(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Exhibit Number | Description | |||||||
23 | ||||||||
99.1 | ||||||||
99.2 | ||||||||
99.3 | ||||||||
99.4 | ||||||||
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 | |||||||
104 | The cover page from this Current Report on Form 8-K, formatted in inline XBRL |
Genuine Parts Company | ||||||||||||||
October 23, 2020 | By: | /s/ Carol B. Yancey | ||||||||||||
Name: Carol B. Yancey | ||||||||||||||
Title: Executive Vice President and CFO |
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(In thousands, except per share data) | 2019 | 2018 | 2017 | 2016 (1) | 2015 (1) | |||||||||||||||||||||||||||
Net sales | $ | 17,522,234 | $ | 16,831,605 | $ | 14,396,442 | $ | 15,339,713 | $ | 15,280,044 | ||||||||||||||||||||||
Cost of goods sold | $ | 11,662,551 | $ | 11,311,850 | $ | 9,964,967 | $ | 10,740,106 | $ | 10,724,192 | ||||||||||||||||||||||
Operating and non-operating expenses, net | $ | 5,000,400 | $ | 4,525,117 | $ | 3,500,828 | $ | 3,525,267 | $ | 3,432,171 | ||||||||||||||||||||||
Income before taxes | $ | 859,283 | $ | 994,638 | $ | 930,647 | $ | 1,074,340 | $ | 1,123,681 | ||||||||||||||||||||||
Income taxes | $ | 212,808 | $ | 245,104 | $ | 366,864 | $ | 387,100 | $ | 418,009 | ||||||||||||||||||||||
Net income from continuing operations | $ | 646,475 | $ | 749,534 | $ | 563,783 | $ | — | $ | — | ||||||||||||||||||||||
Net income | $ | 621,085 | $ | 810,474 | $ | 616,757 | $ | 687,240 | $ | 705,672 | ||||||||||||||||||||||
Weighted average common shares outstanding during year — assuming dilution | 146,417 | 147,241 | 147,701 | 149,804 | 152,496 | |||||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||||||
Diluted net income from continuing operations | $ | 4.42 | $ | 5.09 | $ | 3.82 | $ | 4.59 | $ | 4.63 | ||||||||||||||||||||||
Dividends declared | $ | 3.05 | $ | 2.88 | $ | 2.70 | $ | 2.63 | $ | 2.46 | ||||||||||||||||||||||
December 31 closing stock price | $ | 106.23 | $ | 96.02 | $ | 95.01 | $ | 95.54 | $ | 85.89 | ||||||||||||||||||||||
Total debt, less current maturities | $ | 2,802,056 | $ | 2,432,133 | $ | 2,550,020 | $ | 550,000 | $ | 250,000 | ||||||||||||||||||||||
Total equity | $ | 3,695,500 | $ | 3,471,991 | $ | 3,464,156 | $ | 3,207,356 | $ | 3,159,242 | ||||||||||||||||||||||
Total assets | $ | 14,645,629 | $ | 12,683,040 | $ | 12,412,381 | $ | 8,859,400 | $ | 8,144,771 |
Year Ended December 31, | ||||||||||||||||||||
(In thousands, except per share data) | 2019 | 2018 | 2017 | |||||||||||||||||
Net sales | $ | 17,522,234 | $ | 16,831,605 | $ | 14,396,442 | ||||||||||||||
Gross margin | $ | 5,859,683 | $ | 5,519,755 | $ | 4,431,475 | ||||||||||||||
Net income from continuing operations | $ | 646,475 | $ | 749,534 | $ | 563,783 | ||||||||||||||
Diluted net income from continuing operations per common share | $ | 4.42 | $ | 5.09 | $ | 3.82 |
Year Ended December 31, | ||||||||||||||||||||
(In thousands) | 2019 | 2018 | 2017 | |||||||||||||||||
GAAP net income from continuing operations | $ | 646,475 | $ | 749,534 | $ | 563,783 | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Restructuring (1) | $ | 142,780 | $ | — | $ | — | ||||||||||||||
Realized currency and other divestiture losses (2) | 34,701 | — | — | |||||||||||||||||
Gain on equity investment (3) | (38,663) | — | — | |||||||||||||||||
Transaction and other costs (4) | 31,254 | 34,930 | 36,650 | |||||||||||||||||
Total adjustments | 170,072 | 34,930 | 36,650 | |||||||||||||||||
Tax impact of adjustments | (39,704) | (10,170) | (15,738) | |||||||||||||||||
Provisional transition tax and deferred tax revaluation (5) | — | — | 53,064 | |||||||||||||||||
Adjusted net income from continuing operations | $ | 776,843 | $ | 774,294 | $ | 637,759 |
Year Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
GAAP diluted net income from continuing operations per common share | $ | 4.42 | $ | 5.09 | $ | 3.82 | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Restructuring (1) | $ | 0.98 | $ | — | $ | — | ||||||||||||||
Realized currency and other divestiture losses (2) | 0.24 | — | — | |||||||||||||||||
Gain on equity investment (3) | (0.26) | — | — | |||||||||||||||||
Transaction and other costs (4) | 0.20 | 0.24 | 0.25 | |||||||||||||||||
Total adjustments | 1.16 | 0.24 | 0.25 | |||||||||||||||||
Tax impact of adjustments | (0.27) | (0.07) | (0.11) | |||||||||||||||||
Provisional transition tax and deferred tax revaluation (5) | — | — | 0.36 | |||||||||||||||||
Adjusted diluted net income from continuing operations per common share | $ | 5.31 | $ | 5.26 | $ | 4.32 | ||||||||||||||
Weighted average common shares outstanding – assuming dilution | 146,417 | 147,241 | 147,701 |
Year Ended December 31, | ||||||||||||||||||||||||||
(In thousands) | 2019 | 2018 | $ Change | % Change | ||||||||||||||||||||||
Operating activities | $ | 832,519 | $ | 1,056,722 | $ | (224,203) | (21.2) | % | ||||||||||||||||||
Investing activities | $ | (543,595) | $ | (469,938) | $ | (73,657) | 15.7 | % | ||||||||||||||||||
Financing activities | $ | (385,962) | $ | (608,830) | $ | 222,868 | (36.6) | % |
Year Ended December 31, | ||||||||||||||||||||||||||
(In thousands) | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||
Operating activities | $ | 1,056,722 | $ | 754,565 | $ | 302,157 | 40.0 | % | ||||||||||||||||||
Investing activities | $ | (469,938) | $ | (1,625,175) | $ | 1,155,237 | (71.1) | % | ||||||||||||||||||
Financing activities | $ | (608,830) | $ | 872,059 | $ | (1,480,889) | (169.8) | % |
Payment Due by Period | ||||||||||||||||||||||||||||||||
(In thousands) | Total | Less Than 1 Year | 1-3 Years | 3-5 Years | Over 5 Years | |||||||||||||||||||||||||||
Credit facilities | $ | 3,426,099 | $ | 624,043 | $ | 903,525 | $ | 609,138 | $ | 1,289,393 | ||||||||||||||||||||||
Operating leases | 1,092,181 | 281,535 | 415,908 | 208,284 | 186,454 | |||||||||||||||||||||||||||
Total contractual cash obligations | $ | 4,518,280 | $ | 905,578 | $ | 1,319,433 | $ | 817,422 | $ | 1,475,847 |
Amount of Commitment Expiration per Period | |||||||||||||||||||||||||||||
(In thousands) | Total Amounts Committed | Less Than 1 Year | 1-3 Years | 3-5 Years | Over 5 Years | ||||||||||||||||||||||||
Standby letters of credit | $ | 65,322 | $ | 65,322 | $ | — | $ | — | $ | — | |||||||||||||||||||
Guaranteed borrowings of independents and affiliates | 904,662 | 514,353 | 379,039 | 11,270 | — | ||||||||||||||||||||||||
Total commercial commitments | $ | 969,984 | $ | 579,675 | $ | 379,039 | $ | 11,270 | $ | — |
Three Months Ended | ||||||||||||||||||||||||||
(In thousands, except per share data) | March 31, 2019 | June 30, 2019 | Sept. 30, 2019 | Dec. 31, 2019 | ||||||||||||||||||||||
Net sales | $ | 4,259,129 | $ | 4,457,931 | $ | 4,525,284 | $ | 4,279,890 | ||||||||||||||||||
Gross profit | $ | 1,392,798 | $ | 1,482,704 | $ | 1,505,234 | $ | 1,478,947 | ||||||||||||||||||
Net income from continuing operations | $ | 145,684 | $ | 209,519 | $ | 212,256 | $ | 79,016 | ||||||||||||||||||
Net income | $ | 160,250 | $ | 224,430 | $ | 227,487 | $ | 8,918 | ||||||||||||||||||
Earnings per share from continuing operations: | ||||||||||||||||||||||||||
Basic | $ | 1.00 | $ | 1.43 | $ | 1.46 | $ | 0.54 | ||||||||||||||||||
Diluted | $ | 0.99 | $ | 1.43 | $ | 1.45 | $ | 0.54 | ||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||
Basic | $ | 1.10 | $ | 1.54 | $ | 1.56 | $ | 0.06 | ||||||||||||||||||
Diluted | $ | 1.09 | $ | 1.53 | $ | 1.56 | $ | 0.06 |
Three Months Ended | ||||||||||||||||||||||||||
(In thousands, except per share data) | March 31, 2018 | June 30, 2018 | Sept. 30, 2018 | Dec. 31, 2018 | ||||||||||||||||||||||
Net sales | $ | 4,113,812 | $ | 4,340,568 | $ | 4,228,764 | $ | 4,148,461 | ||||||||||||||||||
Gross profit | $ | 1,318,514 | $ | 1,405,401 | $ | 1,366,630 | $ | 1,429,210 | ||||||||||||||||||
Net income from continuing operations | $ | 164,802 | $ | 214,808 | $ | 200,221 | $ | 169,703 | ||||||||||||||||||
Net income | $ | 176,576 | $ | 226,972 | $ | 220,227 | $ | 186,699 | ||||||||||||||||||
Earnings per share from continuing operations: | ||||||||||||||||||||||||||
Basic | $ | 1.12 | $ | 1.46 | $ | 1.36 | $ | 1.16 | ||||||||||||||||||
Diluted | $ | 1.12 | $ | 1.46 | $ | 1.36 | $ | 1.15 | ||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||
Basic | $ | 1.20 | $ | 1.55 | $ | 1.50 | $ | 1.28 | ||||||||||||||||||
Diluted | $ | 1.20 | $ | 1.54 | $ | 1.49 | $ | 1.27 |
Page | |||||
Valuation of Goodwill | |||||
Description of the Matter | As of December 31, 2019, the Company’s goodwill was $2,293,519,000. As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level. For a reporting unit in which the Company concludes, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount (or if the Company elects to skip the optional qualitative assessment), the Company is required to perform a quantitative impairment test, which includes measuring the fair value of the reporting unit and comparing it to the reporting unit’s carrying amount. In the year ended December 31, 2019, the Company recorded a goodwill impairment charge of $81,968,000 related to one of its reporting units as disclosed in Note 2 to the consolidated financial statements. Auditing management’s quantitative impairment test for goodwill was complex and judgmental due to the significant estimation required to determine the fair value of a reporting unit. In particular, the fair value estimate was sensitive to significant assumptions, such as changes in the weighted average costs of capital, revenue growth rates, operating margins, working capital and terminal value, which are affected by expectations about future market or economic conditions. | ||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above. To test the estimated fair value of the reporting units where the quantitative impairment tests were performed, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. For example, we compared the significant assumptions of the reporting unit to current industry, market and economic trends, to the Company's historical results and those of other guideline companies in the same industry, and to other relevant factors. We involved our valuation specialists to assist in our evaluation of the Company's valuation methodology and significant assumptions. In addition, we assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair values of the reporting units that would result from changes in the assumptions. We also recalculated the resulting impairment charge recorded by the Company. | ||||
Fair Value of Customer Relationships Acquired in Business Combinations | |||||
Description of the Matter | As disclosed in Note 12 to the consolidated financial statements, the Company’s cash used in acquisitions of businesses totaled $732,142,000, net of cash acquired, during the year ended December 31, 2019. These acquisitions were accounted for under the acquisition method of accounting for business combinations. For each business combination, the Company allocated the net purchase price to the assets acquired and the liabilities assumed based on their respective fair values as of the date of acquisition, including other intangible assets of $340,799,000. Of the other intangible assets acquired, the largest was customer relationships of $304,302,000. Auditing the Company's accounting for business combinations was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of customer relationships. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values of customer relationships to assumptions about the future cash flows that the Company expects to generate from the acquired businesses. The Company used the multi-period excess earnings method under the income approach to measure the customer relationships. The significant assumptions used to estimate the fair value of the customer relationships included discount rates and certain assumptions that form the basis of the forecasted results (e.g., future revenue growth rates, operating margins and attrition rates). The significant assumptions are forward-looking and could be affected by future economic and market conditions. |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant controls over the Company’s process for estimating the fair value of customer relationships, including controls over management's review of the significant assumptions used in the multi-period excess earnings method under the income approach. To test the estimated fair value of the customer relationships, we performed audit procedures that included, among others, evaluating the Company's selection and application of the multi-period excess earnings method under the income approach and evaluating the significant assumptions used by the Company. We involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates. For example, we compared the significant assumptions to the historical results of the acquired businesses and to other guideline companies within the same industries. We also performed sensitivity analyses of the significant assumptions, including the future revenue growth rates, operating margins and attrition rates, to evaluate the change in the fair value of the intangible assets resulting from changes in the assumptions. | ||||
Adoption of New Lease Accounting Standard | |||||
Description of the Matter | As discussed above and in Note 1 to the consolidated financial statements, the Company adopted Accounting Standard Codification Topic 842, Leases (“ASC 842”) as of January 1, 2019. The adoption of ASC 842 resulted in the recognition of a right-of-use asset and lease liability on the consolidated balance sheet for substantially all leases, including operating leases. The cumulative effect of adopting the standard resulted in an adjustment to retained earnings of $4,797,000, net of taxes, at the same date. Management elected to adopt ASC 842 using the modified retrospective approach, in which existing leases were recorded at the adoption date, but prior periods were not recast under this approach. As of December 31, 2019, the Company’s right-of-use asset and lease liability were $ Auditing the Company's adoption of ASC 842 was especially challenging due to the effort required to ensure the completeness of the lease population and accuracy of lease terms given the significant volume of lease arrangements and subjectivity due to management’s judgment required to estimate its IBRs. Generally, the Company's lease arrangements do not provide an implicit interest rate. Therefore, the Company was required to estimate its IBRs across various currency environments to use as the discount rates when determining its right-of-use asset and lease liability. | ||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant controls over the Company’s process for implementing the new lease accounting standard. For example, we tested controls over management's process for review of the application of accounting policy elections and over management’s review of the IBRs. To test the Company’s adoption of ASC 842, our audit procedures included, among others, an evaluation of the completeness of the population of contracts that meet the definition of a lease under ASC 842, testing the accuracy of lease terms within the lease information technology system, and testing the accuracy of the Company’s system calculations of initial right-of-use assets and lease liabilities. Additionally, we involved our valuation specialists to test management’s model for estimating the IBRs. Our specialists assisted us in evaluating management’s methodology for developing the IBR, testing significant assumptions, such as currency environment adjustments, and comparing the Company’s IBRs to ranges developed by our specialists based on independently observed data. | ||||
Loss Contingencies Related to Product Liabilities | |||||
Description of the Matter | As disclosed in Notes 1 and 11 to the consolidated financial statements, the Company is subject to pending product liability lawsuits primarily resulting from its national distribution of automotive parts and supplies. The Company accrues for loss contingencies related to product liabilities if it is probable that the Company will incur a loss and the loss can be reasonably estimated. The amount accrued for product liabilities as of December 31, 2019 was $146,230,000. Auditing the Company’s loss contingencies related to product liabilities was complex due to the significant measurement uncertainty associated with the estimate, management’s application of significant judgment and the use of valuation techniques. In addition, the loss contingencies related to product liabilities are sensitive to significant management assumptions, including the number, type, and severity of claims incurred and estimated to be incurred in future periods. |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant controls over the Company’s process for estimating loss contingencies related to product liabilities. For example, we tested controls over management's review of the significant assumptions described above and the reconciliation of claims data to that used by the Company’s actuarial specialist. To test the estimated loss contingencies related to product liabilities, our audit procedures included, among others, assessing the methodology used, testing the significant assumptions, including testing the completeness and accuracy of the underlying data, and comparing significant assumptions to historical claims as well as external data. We evaluated the legal letters obtained from internal and external legal counsel, held discussions with legal counsel, and performed a search for new or contrary evidence affecting the estimate. We involved our actuarial specialists to assist in our evaluation of the methodology and assumptions used by management and to independently develop a range of estimated product liabilities using the Company’s historical data as well as other information available for similar cases. We compared the Company's estimated loss contingencies related to product liabilities to the range developed by our actuarial specialists. We also assessed the adequacy of the Company’s disclosures, included in Notes 1 and 11 to the consolidated financial statements, in relation to these matters. |
As of December 31, | |||||||||||
2019 | 2018 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade accounts receivable, net | |||||||||||
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 | |||||||||||
Operating lease assets | |||||||||||
Other assets | |||||||||||
Net property, plant, and equipment | |||||||||||
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 $1 per share — authorized 10,000,000 shares; none issued | |||||||||||
Common stock, par value $1 per share - authorized 450,000,000 shares; issued and outstanding - 2019 - 145,378,158 shares and 2018 - 145,936,613 shares | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Total parent equity | |||||||||||
Noncontrolling interests in subsidiaries | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Year Ended December 31, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Net sales | $ | $ | $ | ||||||||||||||
Cost of goods sold | |||||||||||||||||
Gross margin | |||||||||||||||||
Operating expenses: | |||||||||||||||||
Selling, administrative, and other expenses | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Provision for doubtful accounts | |||||||||||||||||
Restructuring costs | |||||||||||||||||
Goodwill impairment charge | |||||||||||||||||
Total operating expenses | |||||||||||||||||
Non-operating expenses (income): | |||||||||||||||||
Interest expense | |||||||||||||||||
Other | ( | ( | ( | ||||||||||||||
Special termination costs | |||||||||||||||||
Total non-operating expenses (income) | ( | ||||||||||||||||
Income before income taxes | |||||||||||||||||
Income taxes | |||||||||||||||||
Net income from continuing operations | $ | $ | $ | ||||||||||||||
Net (loss) income from discontinued operations | ( | ||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Basic earnings per share: | |||||||||||||||||
Continuing operations | $ | $ | $ | ||||||||||||||
Discontinued operations | ( | ||||||||||||||||
Basic earnings per share | $ | $ | $ | ||||||||||||||
Diluted earnings per share: | |||||||||||||||||
Continuing operations | $ | $ | $ | ||||||||||||||
Discontinued operations | ( | ||||||||||||||||
Diluted earnings per share | $ | $ | $ | ||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||
Dilutive effect of stock options and nonvested restricted stock awards | |||||||||||||||||
Weighted average common shares outstanding — assuming dilution |
Year Ended December 31, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||
Foreign currency translation adjustment | ( | ||||||||||||||||
Net gain (loss) on cash flow and net investment hedges, net of income taxes of 2019 — $16,600; 2018 — $10,398; 2017 — $9,711 | ( | ||||||||||||||||
Pension and postretirement benefit adjustments, net of income taxes of 2019 — $5,036; 2018 — $21,297; 2017 — $20,539 | ( | ||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ||||||||||||||||
Comprehensive income | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Parent Equity | Non- controlling Interests in Subsidiaries | Total Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2017 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $2.70 per share | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based awards exercised, including tax benefit of $3,134 | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Purchase of stock | ( | ( | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Noncontrolling interest activities | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $2.88 per share | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based awards exercised, including tax benefit of $4,232 | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Purchase of stock | ( | ( | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cumulative effect from adoption of ASU No. 2014-09, net of tax | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Noncontrolling interest activities | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $3.05 per share | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based awards exercised, including tax benefit of $4,920 | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Purchase of stock | ( | ( | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cumulative effect from adoption of ASU No. 2018-02 | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||
Cumulative effect from adoption of ASU No. 2016-02, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest activities | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | $ | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Net (loss) income from discontinued operations | ( | ||||||||||||||||
Net income from continuing operations | |||||||||||||||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Excess tax benefits from share-based compensation | ( | ( | ( | ||||||||||||||
Deferred income taxes | ( | ||||||||||||||||
Share-based compensation | |||||||||||||||||
Realized currency and other divestiture losses | |||||||||||||||||
Gain on equity investment | ( | ||||||||||||||||
Other operating activities | ( | ( | |||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Trade accounts receivable, net | ( | ( | ( | ||||||||||||||
Merchandise inventories, net | ( | ( | ( | ||||||||||||||
Trade accounts payable | |||||||||||||||||
Other short-term assets and liabilities | ( | ( | |||||||||||||||
Other long-term 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 used in investing activities from continuing operations | ( | ( | ( | ||||||||||||||
Financing activities | |||||||||||||||||
Proceeds from debt | |||||||||||||||||
Payments on debt | ( | ( | ( | ||||||||||||||
Payments on acquired debt of AAG | ( | ||||||||||||||||
Share-based awards exercised | ( | ( | ( | ||||||||||||||
Dividends paid | ( | ( | ( | ||||||||||||||
Purchase 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 | ( | ||||||||||||||||
Net (decrease) increase in cash and cash equivalents | ( | ||||||||||||||||
Cash and cash equivalents at beginning of year | |||||||||||||||||
Cash and cash equivalents at end of year | $ | $ | $ | ||||||||||||||
Supplemental disclosures of cash flow information | |||||||||||||||||
Cash paid during the year for: | |||||||||||||||||
Income taxes | $ | $ | $ | ||||||||||||||
Interest | $ | $ | $ |
Changes in Accumulated Other Comprehensive Loss by Component | ||||||||||||||||||||||||||||||||
Pension Benefits | Other Post-Retirement Benefits | Cash Flow and Net Investment Hedges | Foreign Currency Translation | Total | ||||||||||||||||||||||||||||
Beginning balance, January 1, 2018 | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications, net of tax | ( | ( | ( | |||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | ( | |||||||||||||||||||||||||||||||
Net current period other comprehensive (loss) income | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Ending balance, December 31, 2018 | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | ||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | ( | |||||||||||||||||||||||||||||||
Net current period other comprehensive income (loss) | ( | |||||||||||||||||||||||||||||||
Cumulative effect from adoption of ASU 2018-02 | ( | ( | ||||||||||||||||||||||||||||||
Ending balance, December 31, 2019 | $ | ( | $ | ( | $ | $ | ( | $ | ( |
Goodwill | |||||||||||||||||||||||
Automotive | Industrial | Total | Other Intangible Assets, Net | ||||||||||||||||||||
Balance as of January 1, 2018 | $ | $ | $ | $ | |||||||||||||||||||
Additions | |||||||||||||||||||||||
Amortization | — | — | — | ( | |||||||||||||||||||
Foreign currency translation | ( | ( | ( | ( | |||||||||||||||||||
Balance as of December 31, 2018 | |||||||||||||||||||||||
Additions | |||||||||||||||||||||||
Divestitures | ( | ( | ( | ( | |||||||||||||||||||
Amortization | — | — | — | ( | |||||||||||||||||||
Impairments | ( | ||||||||||||||||||||||
Foreign currency translation | ( | ( | |||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ |
2019 | 2018 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Trademarks | ( | ( | |||||||||||||||||||||||||||||||||
Non-competition agreements | ( | ( | |||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | $ | ( | $ |
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
$ |
2019 | 2018 | |||||||||||||
Land | $ | $ | ||||||||||||
Buildings | ||||||||||||||
Machinery, equipment and other | ||||||||||||||
Property, plant and equipment, at cost | ||||||||||||||
Less: accumulated depreciation | ||||||||||||||
Property, plant and equipment, net | $ | $ |
December 31, | ||||||||||||||
2019 | 2018 | |||||||||||||
Unsecured Revolving Credit Facility, $1,500,000, LIBOR plus 1.50% variable, due October 30, 2022 | $ | $ | ||||||||||||
Unsecured Term Loan A, $1,100,000, LIBOR plus 1.50% variable, due October 30, 2022 | ||||||||||||||
Unsecured term notes: | ||||||||||||||
July 29, 2016, Series G Senior Unsecured Notes, $50,000, 2.64% fixed, due July 29, 2021 | ||||||||||||||
December 2, 2013, Series F Senior Unsecured Notes, $250,000, 3.24% fixed, due December 2, 2023 | ||||||||||||||
June 30, 2019, Series A Senior Unsecured Notes, A$155,000, 3.10% fixed, due June 30, 2024 | — | |||||||||||||
October 30, 2017, Series J Senior Unsecured Notes, €225,000, 1.40% fixed, due October 30, 2024 | ||||||||||||||
June 30, 2019, Series B Senior Unsecured Notes, A$155,000, 3.43% fixed, due June 30, 2026 | — | |||||||||||||
November 30, 2016, Series H Senior Unsecured Notes, $250,000, 3.24% fixed, due November 30, 2026 | ||||||||||||||
October 30, 2017, Series K Senior Unsecured Notes, €250,000, 1.81% fixed, due October 30, 2027 | ||||||||||||||
October 30, 2017, Series I Senior Unsecured Notes, $120,000, 3.70% fixed, due October 30, 2027 | ||||||||||||||
May 31, 2019, Series A Senior Unsecured Notes, €50,000, 1.55% fixed, due May 31, 2029 | — | |||||||||||||
October 30, 2017, Series L Senior Unsecured Notes, €125,000, 2.02% fixed, due October 30, 2029 | ||||||||||||||
May 31, 2019, Series B Senior Unsecured Notes, €100,000, 1.74% fixed, due May 31, 2031 | — | |||||||||||||
October 30, 2017, Series M Senior Unsecured Notes, €100,000, 2.32% fixed, due October 30, 2032 | ||||||||||||||
May 31, 2019, Series C Senior Unsecured Notes, €100,000, 1.95% fixed, due May 31, 2034 | — | |||||||||||||
Other unsecured debt | ||||||||||||||
Total unsecured debt | ||||||||||||||
Unamortized debt issuance costs | ( | ( | ||||||||||||
Total debt | ||||||||||||||
Less debt due within one year | ||||||||||||||
Long-term debt, excluding current portion | $ | $ |
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
$ |
December 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||
Instrument | Balance sheet location | Notional | Balance | Notional | Balance | |||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||
Interest rate swaps | Other current liabilities | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||||||||
Cross-currency swap | Prepaid expenses and other current assets | $ | $ | $ | $ | |||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||
Cash Flow Hedges: | ||||||||||||||||||||||||||||||||||||||
Interest rate contract | $ | ( | $ | ( | $ | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||
Net Investment Hedges: | ||||||||||||||||||||||||||||||||||||||
Cross-currency swap | ||||||||||||||||||||||||||||||||||||||
Forward contracts | ||||||||||||||||||||||||||||||||||||||
Foreign currency debt | ( | — | — | — | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ |
Balance Sheet Line Item | December 31, 2019 | |||||||||||||
Operating lease assets | Operating lease assets | $ | ||||||||||||
Operating lease liabilities: | ||||||||||||||
Current operating lease liabilities | Other current liabilities | $ | ||||||||||||
Noncurrent operating lease liabilities | Operating lease liabilities | |||||||||||||
Total operating lease liabilities | $ |
Weighted average remaining lease term (in years) | ||||||||
Weighted average discount rate | % |
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total undiscounted future minimum lease payments | |||||
Less: Difference between undiscounted lease payments and discounted operating lease liabilities | |||||
Total operating lease liabilities | $ |
2019 | ||||||||||||||
Shares (1) | Weighted Average Exercise Price (2) | |||||||||||||
Outstanding at beginning of year | $ | |||||||||||||
Granted | $ | |||||||||||||
Exercised | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Outstanding at end of year (3) | $ | |||||||||||||
Exercisable at end of year | $ | |||||||||||||
Shares available for future grants |
Nonvested Share Awards (RSUs) | Shares | Weighted Average Grant Date Fair Value | ||||||||||||
Nonvested at January 1, 2019 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Nonvested at December 31, 2019 | $ |
2019 | 2018 | |||||||||||||
Deferred tax assets related to: | ||||||||||||||
Expenses not yet deducted for tax purposes | $ | $ | ||||||||||||
Operating lease liabilities | — | |||||||||||||
Pension liability not yet deducted for tax purposes | ||||||||||||||
Capital loss | ||||||||||||||
Net operating loss | ||||||||||||||
Deferred tax liabilities related to: | ||||||||||||||
Employee and retiree benefits | ||||||||||||||
Inventory | ||||||||||||||
Operating lease assets | — | |||||||||||||
Other intangible assets | ||||||||||||||
Property, plant and equipment | ||||||||||||||
Other | ||||||||||||||
Net deferred tax liability before valuation allowance | ( | ( | ||||||||||||
Valuation allowance | ( | ( | ||||||||||||
Total net deferred tax liability | $ | ( | $ | ( |
2019 | 2018 | 2017 | ||||||||||||||||||
United States | $ | $ | $ | |||||||||||||||||
Foreign | ||||||||||||||||||||
Income before income taxes | $ | $ | $ |
2019 | 2018 | 2017 | ||||||||||||||||||
Current: | ||||||||||||||||||||
Federal | $ | $ | $ | |||||||||||||||||
State | ||||||||||||||||||||
Foreign | ||||||||||||||||||||
Deferred: | ||||||||||||||||||||
Federal | ( | |||||||||||||||||||
State | ( | |||||||||||||||||||
Foreign | ( | ( | ( | |||||||||||||||||
$ | $ | $ |
2019 | 2018 | 2017 | ||||||||||||||||||
Statutory rate applied to income (1) | $ | $ | $ | |||||||||||||||||
Plus state income taxes, net of Federal tax benefit | ||||||||||||||||||||
Taxation of foreign operations, net (2) | ( | ( | ( | |||||||||||||||||
U.S. tax reform - transition tax (3) | ||||||||||||||||||||
U.S. tax reform - deferred tax remeasurement (3) | ||||||||||||||||||||
Foreign rate change - deferred tax remeasurement | ( | ( | ||||||||||||||||||
Book tax basis difference in investment | ( | |||||||||||||||||||
Valuation allowance | ||||||||||||||||||||
Other | ( | |||||||||||||||||||
$ | $ | $ |
2019 | 2018 | 2017 | ||||||||||||||||||
Balance at beginning of year | $ | $ | $ | |||||||||||||||||
Additions based on tax positions related to the current year | ||||||||||||||||||||
Additions for tax positions of prior years | ||||||||||||||||||||
Reductions for tax positions for prior years | ( | ( | ( | |||||||||||||||||
Reduction for lapse in statute of limitations | ( | ( | ||||||||||||||||||
Settlements | ( | ( | ( | |||||||||||||||||
Balance at end of year | $ | $ | $ |
2019 | 2018 | |||||||||||||
Changes in benefit obligation | ||||||||||||||
Benefit obligation at beginning of year | $ | $ | ||||||||||||
Service cost | ||||||||||||||
Interest cost | ||||||||||||||
Plan participants’ contributions | ||||||||||||||
Actuarial loss (gain) | ( | |||||||||||||
Foreign currency exchange rate changes | ( | |||||||||||||
Gross benefits paid | ( | ( | ||||||||||||
Plan amendments | ||||||||||||||
Curtailments | ( | |||||||||||||
Settlements | ( | |||||||||||||
Special termination costs | ||||||||||||||
Acquired plans | ||||||||||||||
Benefit obligation at end of year | $ | $ |
2019 | 2018 | ||||||||||
Weighted average discount rate | % | % | |||||||||
Rate of increase in future compensation levels | % | % |
2019 | 2018 | |||||||||||||
Changes in plan assets | ||||||||||||||
Fair value of plan assets at beginning of year | $ | $ | ||||||||||||
Actual return on plan assets | ( | |||||||||||||
Foreign currency exchange rate changes | ( | |||||||||||||
Employer contributions | ||||||||||||||
Plan participants’ contributions | ||||||||||||||
Benefits paid | ( | ( | ||||||||||||
Settlements | ( | |||||||||||||
Fair value of plan assets at end of year | $ | $ |
2019 | 2018 | |||||||||||||
Aggregate benefit obligation | $ | $ | ||||||||||||
Aggregate fair value of plan assets | $ | $ |
2019 | 2018 | |||||||||||||
Aggregate accumulated benefit obligation | $ | $ | ||||||||||||
Aggregate fair value of plan assets | $ | $ |
Target Allocation | Percentage of Plan Assets at December 31 | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Asset Category | |||||||||||||||||
Equity securities | % | % | % | ||||||||||||||
Debt securities | % | % | % | ||||||||||||||
% | % | % |
2019 | ||||||||||||||||||||||||||||||||
Total | Assets Measured at NAV | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||
Equity Securities | ||||||||||||||||||||||||||||||||
Common stocks — mutual funds — equity | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Genuine Parts Company common stock | ||||||||||||||||||||||||||||||||
Other stocks | ||||||||||||||||||||||||||||||||
Debt Securities | ||||||||||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||||||||
Cash and equivalents | ||||||||||||||||||||||||||||||||
Government bonds | ||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||
Asset-backed and mortgage-backed securities | ||||||||||||||||||||||||||||||||
Other-international | ||||||||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||||||||
Mutual funds—fixed income | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Cash surrender value of life insurance policies | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
2018 | ||||||||||||||||||||||||||||||||
Total | Assets Measured at NAV | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||
Equity Securities | ||||||||||||||||||||||||||||||||
Common stocks — mutual funds — equity | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Genuine Parts Company common stock | ||||||||||||||||||||||||||||||||
Other stocks | ||||||||||||||||||||||||||||||||
Debt Securities | ||||||||||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||||||||
Cash and equivalents | ||||||||||||||||||||||||||||||||
Government bonds | ||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||
Asset-backed and mortgage-backed securities | ||||||||||||||||||||||||||||||||
Other-international | ||||||||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||||||||
Mutual funds—fixed income | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Cash surrender value of life insurance policies | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
2019 | 2018 | |||||||||||||
Other long-term asset | $ | $ | ||||||||||||
Other current liability | ( | ( | ||||||||||||
Pension and other post-retirement liabilities | ( | ( | ||||||||||||
$ | ( | $ | ( |
2019 | 2018 | |||||||||||||
Net actuarial loss | $ | $ | ||||||||||||
Prior service cost | ||||||||||||||
$ | $ |
Employer contribution | |||||
2020 (expected) | $ | ||||
Expected benefit payments: | |||||
2020 | $ | ||||
2021 | $ | ||||
2022 | $ | ||||
2023 | $ | ||||
2024 | $ | ||||
2025 through 2029 | $ |
2019 | 2018 | 2017 | ||||||||||||||||||
Service cost | $ | $ | $ | |||||||||||||||||
Interest cost | ||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | |||||||||||||||||
Amortization of prior service credit | ( | ( | ( | |||||||||||||||||
Amortization of actuarial loss | ||||||||||||||||||||
Net periodic benefit income | $ | ( | $ | ( | $ | ( |
2019 | 2018 | 2017 | ||||||||||||||||||
Current year actuarial (gain) loss | $ | ( | $ | $ | ( | |||||||||||||||
Recognition of actuarial loss | ( | ( | ( | |||||||||||||||||
Current year prior service cost | ||||||||||||||||||||
Recognition of prior service credit | ||||||||||||||||||||
Recognition of curtailment loss | ( | |||||||||||||||||||
Other | ( | |||||||||||||||||||
Total recognized in other comprehensive (loss) income | $ | ( | $ | $ | ( | |||||||||||||||
Total recognized in net periodic benefit income and other comprehensive (loss) income | $ | ( | $ | $ | ( |
Actuarial loss | $ | ||||
Prior service credit | |||||
Total | $ |
2019 | 2018 | 2017 | |||||||||||||||
Weighted average discount rate | % | % | % | ||||||||||||||
Rate of increase in future compensation levels | % | % | % | ||||||||||||||
Expected long-term rate of return on plan assets | % | % | % |
December 31, 2019 | ||||||||
Cash | $ | |||||||
Fair value of 35% investment in Inenco held prior to business combination | ||||||||
Fair value of other investments held prior to business combination | ||||||||
Total | $ |
As of Acquisition Dates | ||||||||
Trade accounts receivable | $ | |||||||
Merchandise inventories | ||||||||
Prepaid expenses and other current assets | ||||||||
Intangible assets | ||||||||
Deferred tax assets | ||||||||
Property, plant and equipment | ||||||||
Operating lease assets | ||||||||
Other assets | ||||||||
Total identifiable assets acquired | ||||||||
Current liabilities | ||||||||
Long-term debt | ||||||||
Operating lease liabilities | ||||||||
Deferred tax liabilities | ||||||||
Other long-term liabilities | ||||||||
Total liabilities assumed | ||||||||
Net identifiable assets acquired | ||||||||
Noncontrolling interests in a subsidiary | ( | |||||||
Goodwill | ||||||||
Net assets acquired | $ |
Year Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Net sales | $ | $ | $ | |||||||||||||||||
Cost of goods sold | ||||||||||||||||||||
Gross profit | ||||||||||||||||||||
Operating and non-operating expenses | ||||||||||||||||||||
Loss on disposal | ||||||||||||||||||||
(Loss) income before income taxes | ( | |||||||||||||||||||
Income taxes | ( | |||||||||||||||||||
Net (loss) income from discontinued operations | $ | ( | $ | $ |
As of December 31, | ||||||||||||||
2019 | 2018 | |||||||||||||
Assets | ||||||||||||||
Trade accounts receivable, net | $ | $ | ||||||||||||
Merchandise inventories, net | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Goodwill | ||||||||||||||
Other intangible assets, less accumulated amortization | ||||||||||||||
Operating lease assets | ||||||||||||||
Other assets | ||||||||||||||
Total assets of discontinued operations | $ | $ | ||||||||||||
Liabilities | ||||||||||||||
Trade accounts payable | $ | $ | ||||||||||||
Other current liabilities | ||||||||||||||
Long-term liabilities | ||||||||||||||
Total liabilities of discontinued operations | $ | $ |
2019 | 2018 | 2017 | ||||||||||||||||||
Net sales: (1) | ||||||||||||||||||||
Automotive | $ | $ | $ | |||||||||||||||||
Industrial | ||||||||||||||||||||
Total net sales | $ | $ | $ | |||||||||||||||||
Segment profit: | ||||||||||||||||||||
Automotive | $ | $ | $ | |||||||||||||||||
Industrial | ||||||||||||||||||||
Total segment profit | $ | $ | $ | |||||||||||||||||
Interest expense, net | ( | ( | ( | |||||||||||||||||
Corporate expense | ( | ( | ( | |||||||||||||||||
Intangible asset amortization | ( | ( | ( | |||||||||||||||||
Other unallocated costs | ( | ( | ( | |||||||||||||||||
Income before income taxes from continuing operations | $ | $ | $ | |||||||||||||||||
The following table presents a summary of the other unallocated costs: | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Other unallocated amounts: | ||||||||||||||||||||
Restructuring costs | $ | ( | $ | $ | ||||||||||||||||
Special termination costs | ( | |||||||||||||||||||
Realized currency and other divestiture losses | ( | |||||||||||||||||||
Gain on equity investment | ||||||||||||||||||||
Transaction and other costs | ( | ( | ( | |||||||||||||||||
Total other unallocated amounts | $ | ( | $ | ( | $ | ( | ||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Assets: | ||||||||||||||||||||
Automotive | $ | $ | $ | |||||||||||||||||
Industrial | ||||||||||||||||||||
Corporate | ||||||||||||||||||||
Goodwill and other intangible assets | ||||||||||||||||||||
Discontinued operations | ||||||||||||||||||||
Total assets | $ | $ | $ |
2019 | 2018 | 2017 | ||||||||||||||||||
Depreciation and amortization: | ||||||||||||||||||||
Automotive | $ | $ | $ | |||||||||||||||||
Industrial | ||||||||||||||||||||
Corporate | ||||||||||||||||||||
Intangible asset amortization | ||||||||||||||||||||
Total depreciation and amortization | $ | $ | $ | |||||||||||||||||
Capital expenditures: | ||||||||||||||||||||
Automotive | $ | $ | $ | |||||||||||||||||
Industrial | ||||||||||||||||||||
Corporate | ||||||||||||||||||||
Total capital expenditures | $ | $ | $ | |||||||||||||||||
Net sales: | ||||||||||||||||||||
United States | $ | $ | $ | |||||||||||||||||
Europe | ||||||||||||||||||||
Canada | ||||||||||||||||||||
Australasia | ||||||||||||||||||||
Mexico | ||||||||||||||||||||
Total net sales | $ | $ | $ | |||||||||||||||||
Net property, plant and equipment: | ||||||||||||||||||||
United States | $ | $ | $ | |||||||||||||||||
Europe | ||||||||||||||||||||
Canada | ||||||||||||||||||||
Australasia | ||||||||||||||||||||
Mexico | ||||||||||||||||||||
Total net property, plant and equipment | $ | $ | $ |
2019 | 2018 | 2017 | |||||||||||||||
North America: | |||||||||||||||||
Automotive | $ | $ | $ | ||||||||||||||
Industrial | |||||||||||||||||
Total North America | $ | $ | $ | ||||||||||||||
Australasia: | |||||||||||||||||
Automotive | $ | $ | $ | ||||||||||||||
Industrial | |||||||||||||||||
Total Australasia | $ | $ | $ | ||||||||||||||
Europe - Automotive | $ | $ | $ | ||||||||||||||
Total net sales | $ | $ | $ |
Total | ||||||||
Restructuring costs | $ | |||||||
Special termination costs | ||||||||
Total costs incurred in 2019 | $ | |||||||
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, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Restructuring costs | ||||||||||||||||||||||||||||||||
Cash payments | ( | ( | ( | |||||||||||||||||||||||||||||
Non-cash charges | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Translation | ||||||||||||||||||||||||||||||||
Liability as of December 31, 2019 | $ | $ | $ | $ | $ |
Cover Page |
Oct. 23, 2020 |
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Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | Oct. 23, 2020 |
Entity Registrant Name | GENUINE PARTS CO |
Entity Incorporation, State or Country Code | GA |
Entity File Number | 001-05690 |
Entity Tax Identification Number | 58-0254510 |
Entity Address, Address Line One | 2999 WILDWOOD PARKWAY, |
Entity Address, City or Town | ATLANTA, |
Entity Address, State or Province | GA |
Entity Address, Postal Zip Code | 30339 |
City Area Code | 678 |
Local Phone Number | 934-5000 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, $1.00 par value per share |
Trading Symbol | GPC |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000040987 |
Amendment Flag | false |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars 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 (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (in shares) | 145,378,158 | 145,936,613 |
Common stock, shares outstanding (in shares) | 145,378,158 | 145,936,613 |
Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Statement [Abstract] | |||
Net investment hedge, tax | $ 16,000 | $ 10,398 | $ 9,711 |
Pension and postretirement benefit adjustments, tax | $ (5,036) | $ 21,297 | $ (20,539) |
Consolidated Statements of Equity (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared (in dollars per share) | $ 3.05 | $ 2.88 | $ 2.70 |
Tax benefit from share-based awards exercised | $ 4,920 | $ 4,232 | $ 3,134 |
Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Business Genuine Parts Company and all of its majority-owned subsidiaries (the "Company") is a distributor of automotive replacement parts and industrial parts. The Company serves a diverse customer base through approximately 3,600 locations in North America, Australasia and Europe and, therefore, has limited exposure from credit losses to any particular customer, region, or industry segment. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company has evaluated subsequent events through the date the financial statements were issued. Principles of Consolidation The consolidated financial statements include all of the accounts of the Company. The net income attributable to noncontrolling interests is not material to the Company’s consolidated net income. Intercompany accounts and transactions have been eliminated in consolidation. Effective 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 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, revenue from freight services provided by the Automotive Parts Group are grossed up and recast in continuing operations in each period because those sales are continuing with the discontinued operations after the divestiture. Use of Estimates The preparation of the consolidated financial statements, in conformity with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates and the differences could be material. Revenue Recognition The Company applied ASU 2014-09, using the modified retrospective method effective January 1, 2018. The cumulative effect of initially applying ASU 2014-09 and its amendments resulted in a reduction to the opening retained earnings balance of $8,000 prior to the tax adjustment, at January 1, 2018 and a related adjustment to other current liabilities as of that date. Revenue for periods prior to January 1, 2018 has not been adjusted and continues to be reported under Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition (ASC 605). The Company primarily recognizes revenue at the point the customer obtains control of the products or services and at an amount that reflects the consideration expected to be received for those products or services. Contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price and recognizes revenue upon delivery or as services are rendered. Revenue is recognized net of allowances for returns, variable consideration and any taxes collected from customers that will be remitted to governmental authorities. Revenue recognized over time is not significant. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. Liabilities for customer incentives, discounts, or rebates are included in other current liabilities in the consolidated balance sheets. Product Distribution Revenues The Company generates revenue primarily by distributing products through wholesale and retail channels. For wholesale customers, revenue is recognized when title and control of the goods has passed to the customer. Retail revenue is recognized at the point of sale when the goods are transferred to customers and consideration is received. Shipping and handling activities are performed prior to the customer obtaining control of the products. Costs associated with shipping and handling are considered costs to fulfill a contract and are included in selling, administrative and other expenses in the period they are incurred. Other Revenues The Company offers software support, product cataloging, marketing, training and other membership program and support services to certain customers. This revenue is recognized as services are performed. Revenue from these services is recognized over a short duration and the impact to our consolidated financial statements is not significant. Variable Consideration The Company’s products are generally sold with a right of return and may include variable consideration in the form of incentives, discounts, credits or rebates. The Company estimates variable consideration based on historical experience to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to a customer. The Company recognizes estimated variable consideration as an adjustment to the transaction price when control of the related product or service is transferred. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Foreign Currency Translation The consolidated balance sheets and statements of income and comprehensive income of the Company’s foreign subsidiaries have been translated into U.S. dollars at the current and average exchange rates, respectively. The foreign currency translation adjustment is included as a component of accumulated other comprehensive loss. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Trade Accounts Receivable and the Allowance for Doubtful Accounts The Company evaluates the collectability of trade accounts receivable based on a combination of factors. The Company estimates an allowance for doubtful accounts as a percentage of net sales based on historical bad debt experience and periodically adjusts this estimate when the Company becomes aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in the overall aging of accounts receivable. While the Company has a large customer base that is geographically dispersed, a general economic downturn in any of the industry segments in which the Company operates could result in higher than expected defaults and, therefore, the need to revise estimates for bad debts. For the years ended December 31, 2019, 2018, and 2017, the Company recorded provisions for doubtful accounts of approximately $13,876, $15,929, and $10,387, respectively. At December 31, 2019 and 2018, the allowance for doubtful accounts was approximately $35,047 and $18,747, respectively. Merchandise Inventories, Including Consideration Received From Vendors Merchandise inventories are valued at the lower of cost or net realizable value. Cost is determined by the last-in, first-out ("LIFO") method for a majority of U.S. automotive and industrial parts, and generally by the first-in, first-out ("FIFO") method for certain non-U.S. and other inventories. If the FIFO method had been used for all inventories, cost would have been approximately $531,800 and $479,500 higher than reported at December 31, 2019 and 2018, respectively. During 2019 and 2017, reductions in industrial parts inventories resulted in liquidations of LIFO inventory layers, which reduced cost of goods sold by approximately $10,400 and $2,000, respectively. There were no LIFO liquidations in 2018. The Company identifies slow moving or obsolete inventories and estimates appropriate provisions related thereto. Historically, these losses have not been significant as the vast majority of the Company’s inventories are not highly susceptible to obsolescence and are eligible for return under various vendor return programs. While the Company has no reason to believe its inventory return privileges will be discontinued in the future, its risk of loss associated with obsolete or slow moving inventories would increase if such were to occur. The Company enters into agreements at the beginning of each year with many of its vendors that provide for inventory purchase incentives. Generally, the Company earns inventory purchase incentives upon achieving specified volume purchasing levels or other criteria. The Company accrues for the receipt of these incentives as part of its inventory cost based on cumulative purchases of inventory to date and projected inventory purchases through the end of the year. While management believes the Company will continue to receive consideration from vendors in 2020 and beyond, there can be no assurance that vendors will continue to provide comparable amounts of incentives in the future. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of amounts due from vendors, prepaid expenses, and income and other taxes receivable. Goodwill 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). A component is a reporting unit if the component constitutes a business for which discrete financial information and operating results are available and management regularly reviews that information. However, the Company may aggregate two or more components of an operating segment into a single reporting unit if the components have similar economic characteristics. To review goodwill at a reporting unit for impairment, the Company generally elects to first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Qualitative factors include adverse macroeconomic, industry or market conditions, cost factors, or financial performance. If the Company elects not to perform a qualitative assessment or concludes from its assessment of qualitative factors that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company must perform a quantitative test to evaluate goodwill impairment. To perform a quantitative test, the Company calculates the fair value of the reporting unit and compares that amount to the reporting unit's carrying value. The Company typically calculates the fair value by using a combination of a market approach and an income approach that is based on a discounted cash flow model. The assumptions used in the market approach generally include benchmark company market multiples and the assumptions used in the income approach generally include the projected cash flows of the reporting unit, which are based on projected revenue growth rates and operating margins, and the estimated weighted average costs of capital, working capital and terminal value. The Company uses inputs and assumptions it believes are consistent with those a hypothetical marketplace participant would use. The Company recognizes goodwill impairment (if any) as the excess of the reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Refer to the goodwill and other intangible assets footnote for further information on the results of the Company's annual goodwill impairment testing. Long-Lived Assets Other Than Goodwill The Company assesses its long-lived assets other than goodwill for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining life of such assets. If these projected cash flows are less than the carrying amount, an impairment would be recognized, resulting in a write-down of assets with a corresponding charge to earnings. Impairment losses, if any, are measured based upon the difference between the carrying amount and the fair value of the assets. For the year ended December 31, 2019, the Company recognized long-lived asset impairments of $5,408 related to certain assets expected to be abandoned in connection with the 2019 Cost Savings Plan (refer to the restructuring footnote for more information). No impairments were recognized in 2018 or 2017. Other Assets Other assets consist primarily of cash surrender value of life insurance policies, equity method investments, guarantee fees receivable, and deferred compensation benefits. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation and amortization are primarily determined on a straight-line basis over the following estimated useful lives of each asset: buildings and improvements, 10 to 40 years; machinery and equipment, 5 to 15 years. Other Current Liabilities Other current liabilities consist primarily of reserves for sales returns expected within the next year, accrued compensation, accrued customer incentives, accrued income and other taxes, and other reserves for expenses incurred. Other Long-term Liabilities Other long-term liabilities consist primarily of reserves for sales returns expected after the next year, guarantee obligations, accrued taxes and other non-current obligations. Self-Insurance The Company is self-insured for the majority its group health insurance costs. A reserve for claims incurred but not reported is developed by analyzing historical claims data provided by the Company’s claims administrators. These reserves are included in accrued expenses in the accompanying consolidated balance sheets as the expenses are expected to be paid within one year. Long-term insurance liabilities consist primarily of reserves for the Company's workers’ compensation program. In addition, the Company carries various large risk deductible workers’ compensation policies for the majority of workers’ compensation liabilities. The Company records the workers’ compensation reserves based on an analysis performed by an independent actuary. The analysis calculates development factors, which are applied to total reserves as provided by the various insurance companies who underwrite the program. While the Company believes that the assumptions used to calculate these liabilities are appropriate, significant differences in actual experience or significant changes in these assumptions may materially affect workers’ compensation costs. Accumulated Other Comprehensive Loss The following table presents the amounts that comprise accumulated other comprehensive loss ("AOCL") as well as the changes in those amounts by component for the years ended on December 31, 2019 and 2018:
The accumulated other comprehensive loss components related to the pension benefits are included in the computation of net periodic benefit income in the employee benefit plans footnote. The components related to the cash flow and net investment hedges are included in the derivatives and hedging footnote. Business Combinations When the Company acquires businesses, it applies the acquisition method of accounting and recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree at their fair values on the acquisition date, which requires significant estimates and assumptions. Goodwill is measured as the excess of the fair value of the consideration transferred over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The acquisition method requires the Company to record provisional amounts for any items for which the accounting is not complete at the end of a reporting period. The Company must complete the accounting during the measurement period, which cannot exceed one year. Adjustments made during the measurement period could have a material impact on the Company's financial condition and results of operations. The Company typically measures customer relationship and other intangible assets using an income approach. Significant estimates and assumptions used in this approach include discount rates and certain assumptions that form the basis of the forecasted cash flows expected to be generated from the asset (e.g., future revenue growth rates, operating margins and attrition rates). If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, the Company could record impairment charges. In addition, the Company has estimated the economic lives of certain acquired tangible and intangible assets and these lives are used to calculate depreciation and amortization expense. If the Company's estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset could be impaired. Legal and Product Liabilities The Company accrues for potential losses related to legal disputes, litigation, product liabilities, and regulatory matters when it is probable (more likely than not) that the Company will incur a loss and the amount of the loss can be reasonably estimated. The amount of the product liability reflects the Company’s reasonable estimate of losses based upon currently known facts. To calculate the liability, the Company estimates potential losses relating to pending claims and also estimates the likelihood of additional, similar claims being filed against the Company in the future. To estimate potential losses on claims that could be filed in the future, the Company considers claims pending against the Company, claim filing rates, the number of codefendants and the extent to which they share in settlements, and the amount of loss by claim type. The estimated losses for pending and potential future claims are calculated on a discounted basis using risk-free interest rates derived from market data about monetary assets with maturities comparable to those of the projected product liabilities. The Company uses an actuarial specialist to assist with measuring its product liabilities. Fair Value Measurements The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, trade accounts receivable, trade accounts payable, and borrowings under the line of credit and term loan approximate their respective fair values based on the short-term nature of these instruments. At December 31, 2019 and 2018, the fair value of fixed rate debt was approximately $2,013,542 and $1,427,381, 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. At December 31, 2019 and 2018, the carrying value of fixed rate debt, net of debt issuance costs, was $1,945,387 and $1,466,803, respectively, and is included in long-term and short-term debt in the consolidated balance sheets. Derivative instruments are recognized in the 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. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analyses of goodwill, other intangible assets, and long-lived assets. These involve fair value measurements on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy (i.e., unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability). Derivatives and Hedging The 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, cash flows and net investments in certain foreign subsidiaries 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. Shipping and Handling Costs Shipping and handling costs are classified as selling, administrative and other expenses in the accompanying consolidated statements of income and comprehensive income and totaled approximately $303,900, $278,500, and $183,100, for the years ended December 31, 2019, 2018, and 2017, respectively. Advertising Costs Advertising costs are expensed as incurred and totaled $201,600, $203,500, and $164,800 in the years ended December 31, 2019, 2018, and 2017, respectively. Accounting for Legal Costs The Company’s legal costs expected to be incurred in connection with loss contingencies are expensed as such costs are incurred. Share-Based Compensation 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. SARs represent a right to receive upon exercise an amount, payable in shares of common stock, equal to the excess, if any, of the fair market value of the Company’s common stock on the date of exercise over the base value of the grant. The terms of such SARs require net settlement in shares of common stock and do not provide for cash settlement. RSUs represent a contingent right to receive one share of the Company’s common stock at a future date. The majority of awards previously granted vest on a pro-rata basis for periods ranging from one to five years and are expensed accordingly on a straight-line basis. Forfeitures are accounted for as they occur. The Company issues new shares upon exercise or conversion of awards under these plans. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amount and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets and liabilities are recorded net as noncurrent deferred income taxes. In addition, valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In making this determination, the Company considers all available positive and negative evidence including projected future taxable income, future reversals of existing temporary differences, recent financial operations and tax planning strategies. The Company recognizes a tax benefit from uncertain tax positions when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Net Income from Continuing Operations per Common Share Basic net income from continuing operations per common share is computed by dividing net income from continuing operations by the weighted average number of common shares outstanding during the year. The computation of diluted net income from continuing operations per common share includes the dilutive effect of stock options, stock appreciation rights and nonvested restricted stock awards options. Options to purchase approximately 210, 1,490, and 1,920 shares of common stock ranging from $85 — $105 per share were outstanding at December 31, 2019, 2018, and 2017, respectively. These options were excluded from the computation of diluted net income from continuing operations per common share because the options’ exercise prices were greater than the average market prices of common stock in each respective year. Recent Accounting Pronouncements Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases, which, among other things, requires an entity to recognize a right-of-use asset and a lease liability on the balance sheet for substantially all leases, including operating leases. Expanded disclosures with additional qualitative and quantitative information are also required. ASU 2016-02 and its amendments were effective for interim and annual reporting periods beginning after December 15, 2018 and early adoption was permitted. The Company adopted ASU 2016-02 and its amendments as of January 1, 2019 using the modified retrospective method and utilized the optional transition method to apply the legacy guidance in ASC 840, Leases, including its disclosure requirements, in the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. The Company elected a policy of not recording leases on its consolidated balance sheets when the leases have a term of 12 months or less and the Company is not reasonably certain to elect an option to purchase the leased asset. The Company recognizes payments on these leases within selling, administrative and other expenses on a straight-line basis over the lease term. The Company's adoption of the standard resulted in a cumulative-effect adjustment to increase retained earnings by $4,797, net of taxes, as of January 1, 2019. The standard did not materially impact the Company's consolidated net income or liquidity. The standard did not have an impact on debt-covenant compliance under the Company's current debt agreements. Income Statement - Reporting Comprehensive Income (Topic 220) In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The ASU permits a company to make a one-time election to reclassify stranded tax effects caused by the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. The ASU also requires companies to disclose their accounting policies for releasing income tax effects from accumulated other comprehensive income. ASU 2018-02 was effective for periods beginning after December 15, 2018, with an election to adopt early. The Company adopted ASU 2018-02 as of January 1, 2019 and recognized an adjustment to increase retained earnings and to adjust accumulated other comprehensive loss by approximately $122,526. Intangibles - Goodwill and Other (Topic 350) In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The ASU simplifies the subsequent measurement of goodwill by eliminating the second step from the goodwill impairment test. ASU 2017-04 requires applying a one-step quantitative test and recording the amount of goodwill impairment as the excess of the reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment. The Company adopted ASU 2017-04 as of October 1, 2019 and performed its annual evaluation of goodwill in accordance with this standard. Financial Instruments - Credit Losses (Topic 220) 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 certain other financial instruments 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. ASU 2016-13 is effective for periods beginning after December 15, 2019, with an option to adopt early. The Company plans to adopt the ASU and its amendments on January 1, 2020. On this date the Company currently expects to record an immaterial cumulative effect adjustment to reduce retained earnings as a result of the adoption. The adoption of ASU 2016-13 and its amendments is not expected to have a significant impact on the Company's consolidated financial statements. 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. Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop internal-use software. These provisions should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. ASU 2018-15 is effective for periods beginning after December 15, 2019, with an option to adopt early. The adoption of ASU 2018-15 is not expected to have a significant impact on the Company’s financial position, results of operations or disclosures. The Company does not plan to early adopt the standard.
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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 The changes in the carrying amount of goodwill during the years ended December 31, 2019 and 2018 by reportable segment, as well as other identifiable intangible assets, are summarized as follows:
The Company completed both qualitative and quantitative goodwill assessments as of October 1, 2019. Due to several factors that developed in the fourth quarter of 2019, the Company performed an interim impairment test as of December 31, 2019 for its Business Products reporting unit and recorded a goodwill impairment charge of $81,968. As such, total goodwill of the Business Products reporting unit is net of $81,968 of accumulated impairment loss. The factors that developed in the fourth quarter of 2019 at the Business Products reporting unit included: (i) greater uncertainty associated with long-term industry trends and the competitive environment and (ii) fourth quarter results, including segment profitability, that were below management expectations due primarily to a reduction in volume with certain national account customers. The Company performed a quantitative goodwill impairment test as of December 31, 2019 and concluded that the full amount of goodwill allocated to the Business Products reporting unit was impaired. Due to the subsequent divestiture of the Business Products reporting unit, its goodwill balance, net of accumulated impairment loss, is classified in noncurrent assets of discontinued operations on the consolidated balance sheet. Further, the impairment charge is classified in net (loss) from discontinued operations in the consolidated statements of income and comprehensive income. Refer to the acquisitions, divestitures and discontinued operations footnote for further information. The Company determined that the fair values of its remaining reporting units are in excess of their carrying amounts and there were no other indicators that goodwill was impaired. The gross carrying amounts and accumulated amortization relating to other intangible assets at December 31, 2019 and 2018 are as follows:
Amortization expense for other intangible assets totaled $92,206, $83,489, and $46,384 for the years ended December 31, 2019, 2018, and 2017, respectively. Estimated other intangible assets amortization expense for the succeeding five years is as follows:
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Property, Plant & Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant & Equipment | Property, Plant and Equipment Property, plant and equipment as of December 31, 2019 and December 31, 2018, consisted of the following:
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Credit Facilities |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Facilities | Credit Facilities The principal amounts of the Company’s borrowings subject to variable rates (after consideration of hedging arrangements) totaled approximately $554,902 and $1,176,477 at December 31, 2019 and 2018, respectively. The weighted average interest rate on the Company’s outstanding borrowings was approximately 2.18% and 2.71% at December 31, 2019 and 2018, respectively. The Company entered into long-term fixed rate debt private placement agreements of €250,000 and Australian dollar ("A$") A$310,000 on May 31, 2019 and June 30, 2019, respectively. The rates of interest and maturity dates related to these agreements are included in the table below. Certain borrowings require the Company to comply with a financial covenant with respect to a maximum debt to EBITDA ratio. At December 31, 2019, the Company was in compliance with all such covenants. Due to the workers’ compensation and insurance reserve requirements in certain states, the Company also had unused letters of credit of approximately $65,322 and $63,504 outstanding at December 31, 2019 and 2018, respectively. Amounts outstanding under the Company’s credit facilities, net of debt issuance costs consist of the following:
Approximate maturities under the Company’s credit facilities, net of debt issuance costs, are as follows:
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Derivatives and Hedging |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging | Derivatives and Hedging 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:
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. Gains and losses from fair value adjustments on the cash flow hedges are initially classified in accumulated other comprehensive loss and are reclassified to interest expense on the dates interest payments are accrued. 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 accumulated other comprehensive loss and would only be reclassified to earnings if the European subsidiary were liquidated, or otherwise disposed. The table below presents pre-tax gains and losses related to designated cash flow hedges and net investment hedges:
Amounts reclassified from accumulated other comprehensive loss to interest expense for the periods presented were not material.
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Leased Properties |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leased Properties | Leased Properties The Company primarily leases real estate for certain retail stores, distribution centers, office space and land. The Company also leases equipment (primarily vehicles). Most real estate leases include one or more options to renew, with renewal terms that generally can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at the Company's discretion. The Company evaluates renewal options at lease inception and on an ongoing basis, and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants. The table below presents the locations of the operating lease assets and liabilities on the consolidated balance sheets as of December 31, 2019:
The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term. The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2019 are:
The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheets as of December 31, 2019:
Operating lease payments include $55,055 related to options to extend lease terms that are reasonably certain of being exercised. Operating lease costs (as defined under ASU 2016-02) were $310,028 for the year ended December 31, 2019. Operating lease costs are included within selling, administrative and other expenses on the consolidated statements of income and comprehensive income. Short-term lease costs, variable lease costs and sublease income were not material for the periods presented. Rental expense for operating leases (as defined prior to the adoption of ASU 2016-02) was approximately $334,000 and $278,000 for 2018 and 2017, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $311,170 for the year ended December 31, 2019, and this amount is included in operating activities in the consolidated statements of cash flows. Operating lease assets obtained in exchange for new operating lease liabilities were $330,103 for the year ended December 31, 2019.
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Share-Based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation At December 31, 2019, total compensation cost related to nonvested awards not yet recognized was approximately $38,000. The weighted-average period over which this compensation cost is expected to be recognized is approximately two years. The aggregate intrinsic value for SARs and RSUs outstanding at December 31, 2019 and 2018 was approximately $132,700 and $97,800, respectively. The aggregate intrinsic value for SARs and RSUs vested totaled approximately $58,200 and $41,300 at December 31, 2019 and 2018, respectively. At December 31, 2019, the weighted-average contractual life for outstanding and exercisable SARs and RSUs was 4 years. Share-based compensation costs of $28,703, $17,737, and $14,031, were recorded for the years ended December 31, 2019, 2018, and 2017, respectively. The total income tax benefits recognized in the consolidated statements of income and comprehensive income for share-based compensation arrangements were approximately $8,700, $5,600, and $4,600 for 2019, 2018, and 2017, respectively. There have been no modifications to valuation methodologies or methods during the years ended December 31, 2019, 2018, or 2017. The fair value of RSUs is based on the price of the Company’s stock on the date of grant. The total fair value of RSUs vested during the years ended December 31, 2019, 2018, and 2017 were $26,200, $20,800, and $15,500, respectively. The Company did not grant SARs for the years ended December 31, 2019 and 2018. For the year ended December 31, 2017, the fair value of SARs granted were estimated using a Black-Scholes option pricing model with the following weighted-average assumptions: risk-free interest rate of 2.3%; dividend yield of 2.8%; annual historical volatility factor of the expected market price of the Company’s common stock of 19% for an average expected life of approximately 6 years. A summary of the Company’s share-based compensation activity and related information is as follows:
(1)Shares include RSUs. (2)The weighted average exercise price excludes RSUs. (3)The exercise prices for SARs outstanding as of December 31, 2019 ranged from approximately $43 to $100. The weighted average remaining contractual life of all SARs outstanding is approximately five years. The weighted average grant date fair value of SARs granted during 2017 was $13.89. The aggregate intrinsic value of SARs and RSUs exercised during the years ended December 31, 2019, 2018, and 2017 was $36,200, $32,600, and $16,800, respectively. In 2019, the Company granted approximately 395 RSUs. In 2018, the Company granted approximately 360 RSUs. In 2017, the Company granted approximately 746 SARs and 171 RSUs. A summary of the Company’s nonvested share awards activity is as follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Significant components of the Company’s deferred tax assets and liabilities are as follows:
The Company currently holds approximately $173,515 in net operating losses, of which approximately $122,212 will carry forward indefinitely. The remaining net operating losses of approximately $51,303 will begin to expire in 2024. The components of income before income taxes are as follows:
The components of income tax expense are as follows:
The reasons for the difference between total tax expense and the amount computed by applying the statutory Federal income tax rate to income before income taxes are as follows:
(1)U.S. statutory rates applied to income are as follows: 2019 and 2018 at 21%, 2017 at 35%. (2)The Company's effective tax rate reflects the net benefit of having operations outside of the U.S. which are taxed at statutory rates different from the U.S. statutory rate, with some income being fully or partially exempt from income taxes due to various operating and financing activities. (3)Impact of the Tax Cuts and Jobs Act, enacted December 22, 2017. The Company accounts for Global Intangible Low Taxed income in the year the tax is incurred as a period cost. The Company, or one of its subsidiaries, files income tax returns in the U.S., various states, and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state and local tax examinations by tax authorities for years before 2015 or subject to non-United States income tax examinations for years ended prior to 2013. The Company is currently under audit in the U.S. and some of its foreign jurisdictions. Some audits may conclude in the next 12 months and the unrecognized tax benefits recorded in relation to the audits may differ from actual settlement amounts. It is not possible to estimate the effect, if any, of the amount of such change during the next 12 months to previously recorded uncertain tax positions in connection with the audits. The Company does not anticipate that total unrecognized tax benefits will significantly change in the next 12 months. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
The amount of gross unrecognized tax benefits, including interest and penalties, as of December 31, 2019 and 2018 was approximately $24,347 and $20,669, respectively, of which approximately $18,286 and $14,760, respectively, if recognized, would affect the effective tax rate. During the years ended December 31, 2019, 2018, and 2017, the Company paid, received refunds, or accrued insignificant amounts of interest and penalties. The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2019, the Company estimates that it has an outside basis difference in certain foreign subsidiaries of approximately $900,000, which includes the cumulative undistributed earnings from the Company's foreign subsidiaries. The Company continues to be indefinitely reinvested in this outside basis difference. Determining the amount of net unrecognized deferred tax liability related to any additional outside basis difference in these entities is not practicable. This is due to the complexities associated with the calculation to determine residual taxes on the undistributed earnings, including the availability of foreign tax credits, applicability of any additional local withholding tax and other indirect tax consequences that may arise due to the distribution of these earnings.
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Employee Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans The Company’s defined benefit pension plans cover employees in the U.S., Canada, and Europe who meet eligibility requirements. The plan covering U.S. employees is noncontributory and the Company implemented a hard freeze for the U.S. qualified defined benefit plan as of December 31, 2013. No further benefits were provided after this date for additional credited service or earnings and all participants became fully vested as of December 31, 2013. The Canadian plan is contributory and benefits are based on career average compensation. The Company’s funding policy is to contribute an amount equal to the minimum required contribution under applicable pension legislation. For the plans in the U.S. and Canada, the Company may increase its contribution above the minimum, if appropriate to its tax and cash position and the plans’ funded position. The European plans are funded in accordance with local regulations. The Company also sponsors supplemental retirement plans covering employees in the U.S. and Canada. The Company uses a measurement date of December 31 for its pension and supplemental retirement plans. Several assumptions are used to determine the benefit obligations, plan assets, and net periodic income. The discount rate for the U.S. pension plan is calculated using a bond matching approach to select specific bonds that would satisfy the projected benefit payments. The bond matching approach reflects the process that would be used to settle the pension obligations. The discount rate for non U.S. plans are set by using Willis Towers Watson's RATE:Link model. For each plan, this approach reflects yields available on high quality corporate bonds that would generate the cash flow necessary to pay the plan's benefits when due. The expected return on plan assets is based on a calculated market-related value of plan assets, where gains and losses on plan assets are amortized over a five year period and accumulate in other comprehensive income. Other non-investment unrecognized gains and losses are amortized in future net income based on a “corridor” approach, where the corridor is equal to 10% of the greater of the benefit obligation or the market-related value of plan assets at the beginning of the year. The unrecognized gains and losses in excess of the corridor criteria are amortized over the average future lifetime or service of plan participants, depending on the plan. These assumptions are updated at each annual measurement date. Changes in benefit obligations for the years ended December 31, 2019 and 2018 were:
The benefit obligations for the Company’s U.S. pension plans included in the above were $2,228,066 and $2,055,701 at December 31, 2019 and 2018, respectively. The total accumulated benefit obligation for the Company’s defined benefit pension plans in the U.S., Canada, and Europe was approximately $2,466,322 and $2,247,013 at December 31, 2019 and 2018, respectively. The Company recorded $42,757 in special termination costs related to benefits provided through the Company's defined benefit plans to employees that accepted the voluntary retirement program ("VRP") as part of the Company's 2019 Cost Savings Plan. Refer to the restructuring footnote for more information. The assumptions used to measure the pension benefit obligations for the plans at December 31, 2019 and 2018, were:
Changes in plan assets for the years ended December 31, 2019 and 2018 were:
The fair values of plan assets for the Company’s U.S. pension plans included in the above were $2,051,474 and $1,831,513 at December 31, 2019 and 2018, respectively. For the years ended December 31, 2019 and 2018, the aggregate benefit obligation and aggregate fair value of plan assets for plans with benefit obligations in excess of plan assets were as follows:
For the years ended December 31, 2019 and 2018, the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with accumulated benefit obligations in excess of plan assets were as follows:
The asset allocations for the Company’s funded pension plans at December 31, 2019 and 2018, and the target allocation for 2020, by asset category were:
The Company’s benefit plan committees in the U.S. and Canada establish investment policies and strategies and regularly monitor the performance of the funds. The plans in Europe are unfunded and, therefore, there are no plan assets. The pension plan strategy implemented by the Company’s management is to achieve long-term objectives and invest the pension assets in accordance with the applicable pension legislation in the U.S. and Canada as well as fiduciary standards. The long-term primary investment objectives for the pension plans are to provide for a reasonable amount of long-term growth of capital, without undue exposure to risk, protect the assets from erosion of purchasing power, and provide investment results that meet or exceed the pension plans’ actuarially assumed long-term rates of return. The Company’s investment strategy with respect to pension plan assets is to generate a return in excess of the passive portfolio benchmark (47% S&P 500 Index, 5% Russell Midcap Index, 7% Russell 2000 Index, 5% MSCI EAFE Index, 5% DJ Global Moderate Index, 3% MSCI Emerging Market Net, and 28% Barclays U.S. Long Govt/Credit). The fair values of the plan assets as of December 31, 2019 and 2018, by asset category, are shown in the tables below. Various inputs are considered when determining the value of the Company’s pension plan assets. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. Level 1 represents observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 represents other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.). Level 3 represents significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). Certain investments are measured at fair value using the net asset value ("NAV") per share as a practical expedient and have not been classified in the fair value hierarchy. The valuation methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Equity securities are valued at the closing price reported on the active market on which the individual securities are traded on the last day of the calendar plan year. Debt securities including corporate bonds, U.S. Government securities, and asset-backed securities are valued using price evaluations reflecting the bid and/or ask sides of the market for an investment as of the last day of the calendar plan year.
Equity securities include Genuine Parts Company common stock in the amounts of $214,418 (9% of total plan assets) and $193,810 (9% of total plan assets) at December 31, 2019 and 2018, respectively. Dividend payments received by the plan on Company stock totaled approximately $6,156 and $5,813 in 2019 and 2018, respectively. Fees paid during the year for services rendered by parties in interest were based on customary and reasonable rates for such services. The changes in the fair value measurement of plan assets using significant unobservable inputs (Level 3) during 2019 and 2018 were not material. Based on the investment policy for the pension plans, as well as an asset study that was performed based on the Company’s asset allocations and future expectations, the Company’s expected rate of return on plan assets for measuring 2020 pension income is 7.11% for the plans. The asset study forecasted expected rates of return for the approximate duration of the Company’s benefit obligations, using capital market data and historical relationships. The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheets at December 31:
Amounts recognized in accumulated other comprehensive loss consist of:
The following table reflects the total benefits expected to be paid from the pension plans’ or the Company’s assets. Of the pension benefits expected to be paid in 2020, approximately $11,694 is expected to be paid from employer assets. Expected employer contributions below reflect amounts expected to be contributed to funded plans. Information about the expected cash flows for the pension plans follows:
Net periodic benefit income included the following components:
Service cost is recorded in selling, administrative and other expenses in the consolidated statements of income and comprehensive income while all other components except for special termination costs are recorded within other non-operating expenses (income). The special termination costs incurred in connection with the 2019 Cost Savings Plan are presented on their own line within non-operating expenses (income). Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:
The estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic benefit income in 2020 are as follows:
The assumptions used in measuring the net periodic benefit income for the plans follow:
The Company has one defined contribution plan in the U.S. that covers substantially all of its domestic employees. Employees receive a matching contribution of 100% of the first 5% of the employees’ salary. Total plan expense was approximately $64,990 in 2019, $62,335 in 2018, and $58,186 in 2017. The Company has a defined contribution plan that covers full-time Canadian employees after six months of employment and part-time employees upon meeting provincial minimum standards. Employees receive a matching contribution of 100% of the first 5% of the employees’ salary. Total plan expense was approximately $4,433 in 2019 and $4,108 in 2018.
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Guarantees |
12 Months Ended |
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Dec. 31, 2019 | |
Guarantees [Abstract] | |
Guarantees | Guarantees The Company guarantees the borrowings of certain independently controlled automotive parts stores (independents) and certain other affiliates in which the Company has a noncontrolling equity ownership interest (affiliates). Presently, the independents are generally consolidated by unaffiliated enterprises that have a controlling financial interest through ownership of a majority voting interest in the independent. The Company has no voting interest or other equity conversion rights in any of the independents. The Company does not control the independents or the affiliates, but receives a fee for the guarantee. 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 entity’s economic performance including, but not limited to, decisions about hiring and terminating personnel, local marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining appropriate inventories, and store hours. Separately, the Company concluded 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 guarantee. While such borrowings of the independents and affiliates are outstanding, the Company is required to maintain compliance with certain covenants, including a maximum debt to EBITDA ratio and certain limitations on additional borrowings. At December 31, 2019, the Company was in compliance with all such covenants. At December 31, 2019, the total borrowings of the independents and affiliates subject to guarantee by the Company were approximately $904,662. These loans generally mature over periods from one to six years. In the event that the Company is required to make payments in connection with guaranteed obligations of the independents or the affiliates, the Company would obtain and liquidate certain collateral (e.g., accounts receivable and inventory) to recover all or a portion of the amounts paid under the guarantee. When it is deemed probable that the Company will incur a loss in connection with a guarantee, a liability is recorded equal to this estimated loss. To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings. The Company has recognized certain assets and liabilities amounting to $90,000 and $78,000 for the guarantees related to the independents’ and affiliates’ borrowings at December 31, 2019 and 2018, respectively. These assets and liabilities are included in other assets and other long-term liabilities in the consolidated balance sheets.
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Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is subject to various legal proceedings, many involving routine litigation incidental to the businesses, including approximately 1,615 pending product liability lawsuits resulting from its national distribution of automotive parts and supplies. Many of these involve claims of personal injury allegedly resulting from the use of automotive parts distributed by the Company. The amounts accrued for product liabilities as of December 31, 2019 and 2018 were $146,230 and $141,203, respectively. While litigation of any type contains an element of uncertainty, the Company believes that its insurance coverage and its defense, and ultimate resolution of pending and reasonably anticipated claims will continue to occur within the ordinary course of the Company’s business and that resolution of these claims will not have a material effect on the Company’s business, results of operations or financial condition. On April 17, 2017, a jury awarded damages against the Company of $81,500 in a litigated automotive product liability dispute. Through post-trial motions and offsets from previous settlements, the initial verdict was reduced to $77,100. The Company believed the verdict was not supported by the facts or the law and was contrary to the Company’s role in the automotive parts industry. The Company challenged the verdict through an appeal to a higher court. On February 19, 2020, the higher court issued an order entirely reversing the jury’s finding on damages and ordering a new trial on damages. Absent any further appeal, the matter will be remanded to the trial court for a new trial on damages only. At the time of the filing of these financial statements, based upon the Company’s legal defenses, insurance coverage, and reserves, the Company does not believe this matter will have a material impact to the consolidated financial statements. 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 expects to recover all losses on inventory, property, plant and equipment and other fire-related costs from insurance proceeds.
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Acquisitions, Divestitures and Discontinued Operations |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions, Divestitures and Discontinued Operations | Acquisitions, Divestitures and Discontinued Operations Acquisitions 2019 The Company's cash used in acquisitions of businesses totaled $732,142, net of cash acquired, during the year ended December 31, 2019. In the Automotive Parts Group, the acquired businesses included all of its equity interests in Hennig Fahrzeugteile Group ("Hennig") in January 2019 and of PartsPoint Group in June 2019, which together generate estimated annual revenues of approximately $520,000, as well as several bolt-on acquisitions. In the Industrial Parts Group, the Company acquired all of the equity interests in Axis New England and Axis New York ("Axis") in March 2019, which generate estimated annual revenue of approximately $55,000, and the remaining 65% equity investment in Inenco Group Pty Ltd ("Inenco") in July 2019. Inenco is one of Australasia's leading industrial distributors of key product categories such as bearings, power transmission and seals and it generates estimated annual revenues of approximately $400,000. Prior to the 65% acquisition, the Company accounted for its 35% investment in Inenco under the equity method of accounting. Upon acquisition the Company recognized the 35% investment at its acquisition-date fair value of $123,385. The difference between the acquisition-date fair value and the carrying amount of the equity method investment resulted in the recognition of a gain of $38,663 on the acquisition date. The acquisition-date fair value was determined using a market and income approach with the assistance of a third party valuation firm. The gain is included in the line item "other" within non-operating (income) expenses on the consolidated statement of income and comprehensive income for the year ended December 31, 2019. The total acquisition date fair value of the consideration transferred for the businesses and of any previously held equity interests was $860,712, net of cash acquired of $16,591, and it consisted of the following:
The following table summarizes the preliminary, estimated fair values of the assets acquired and liabilities assumed at the acquisition dates for the aggregate of these businesses. Additional adjustments may be made to the acquisition accounting during the measurement period primarily related to intangible asset revaluations and tax accounting.
The acquired intangible assets of approximately $340,799 were provisionally assigned to customer relationships of $304,302, trademarks of $32,907, and other intangibles of $3,590 with weighted average amortization lives of 16.6, 21.7, and 5.0 years, respectively, for a total weighted average amortization life of 17.0 years. The fair value of the acquired identifiable intangible assets is provisional pending completion of the final valuations for these assets. The estimated goodwill recognized as part of the acquisitions is generally not tax deductible. The goodwill is attributable primarily to the expected synergies and assembled workforces of the acquired businesses. The results of operations for the acquired businesses were included in the Company’s consolidated statements of income and comprehensive income beginning on their respective acquisition dates. 2018 In 2018, a significant portion of the businesses acquired included 20 businesses in the Automotive Parts Group and three businesses in the Industrial Parts Group. The 20 Automotive Parts Group acquisitions generate estimated annual revenues of approximately $180,000. The acquisitions included TMS Motor Spares ("TMS") in August 2018 and Platinum International Group ("Platinum") in October 2018. TMS is a leading automotive parts distributor and operates 17 locations in Scotland and seven locations in England. Platinum is a leading value-added battery distributor in the automotive, industrial, and leisure markets and operates nine locations in the U.K. and one location in the Netherlands. The three Industrial Parts Group acquisitions generate estimated annual revenues of approximately $100,000. The largest acquisition was Hydraulic Supply Company ("HSC") in October 2018, which operates 30 locations in the U.S. HSC is a full-service fluid power distributor, with a product offering of hydraulic, pneumatic and industrial components and systems. For each acquisition, the Company allocated the purchase price to the assets acquired and the liabilities assumed based on their fair values as of their respective acquisition dates. The results of operations for the acquired businesses were included in the Company’s consolidated statements of income and comprehensive income beginning on their respective acquisition dates. The Company recorded approximately $167,000 of goodwill and other intangible assets associated with the 2018 acquisitions. Other intangible assets acquired consisted of customer relationships of $76,000 with weighted average amortization lives of 15 years. 2017 In 2017, a significant portion of the businesses acquired included 12 businesses in the Automotive Parts Group and three businesses in the Industrial Parts Group. The aggregate purchase price for these 15 acquisitions was approximately $1,334,000, net of cash acquired. In 2017, the Company allocated the purchase price to the assets acquired and the liabilities assumed based on their fair values as of their respective acquisition dates. The results of operations for the acquired companies were included in the Company’s consolidated statements of income and comprehensive income beginning on their respective acquisition dates. The Company recorded $1,926,000 of goodwill and other intangible assets associated with the 2017 acquisitions. Other intangible assets acquired in 2017, excluding AAG, consisted of customer relationships of $69,000 with weighted average amortization lives of 15 years. Divestitures 2019 The Company received proceeds from divestitures of businesses totaling $434,609 during the year ended December 31, 2019. The divestitures are not considered strategic shifts that will have a major effect on the Company’s operations or financial results; therefore, they are not reported as discontinued operations. The Company recognized realized currency losses of $34,701 during the year ended December 31, 2019. These losses are included in the line item "other" within non-operating expenses (income) on the consolidated statement of income and comprehensive income for the year ended December 31, 2019. 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 revenues of $15,900 for the year ended December 31, 2019 and $93,000 for the year ended December 31, 2018. EIS During the third quarter of 2019, the Company approved a transaction to sell EIS, a wholly owned subsidiary within the Industrial Parts Group. The transaction closed on September 30, 2019. EIS contributed revenues of $588,031 for the year ended December 31, 2019 and $817,249 for the year ended December 31, 2018. 2018 Business Products Group On April 12, 2018, the Company entered into a definitive agreement with Essendant, Inc. ("Essendant") for Essendant to combine with the Company's Business Products Group in a business combination transaction. The transaction was to be structured as a Reverse Morris Trust, in which the Company would separate the Business Products Group into a standalone company and spin off that standalone company to the Company's shareholders, immediately followed by the merger of a subsidiary of Essendant and the spun-off company. On September 14, 2018, the definitive agreement with Essendant was terminated by Essendant, so that Essendant could enter into a merger agreement with another party. Concurrently with the termination, the Company received a termination fee of $12,000. The termination fee is classified as an offset to the transaction and other costs incurred related to the merger agreement within selling, administrative and other expenses in the consolidated statements of income and comprehensive income. 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 also remains involved with SPR for a limited period of time through various lease, sublease, freight distribution and transition service agreements. 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. For a limited period of time as SPR completes its transition away from the Company’s shared services platform, the Company continues to pay certain payables on SPR’s behalf and at SPR’s direction with full, weekly reimbursement from SPR under the terms of a transition services agreement. The Company’s results of operations for discontinued operations were:
The Company’s assets and liabilities for discontinued operations, by major class, were:
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Segment Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data | Segment DataThe Company’s reportable segments consist of automotive and industrial parts. Within the reportable segments, certain of the Company’s operating segments are aggregated since they have similar economic characteristics, products and services, type and class of customers, and distribution methods. The Company’s automotive segment distributes replacement parts (other than body parts) for substantially all makes and models of automobiles, trucks, and other vehicles. The Company’s industrial segment distributes a wide variety of industrial bearings, mechanical and fluid power transmission equipment, including hydraulic and pneumatic products, material handling components and related parts and supplies. Inter-segment sales are not significant. Segment profit for each industry segment is calculated as net sales less operating expenses excluding general corporate expenses, interest expense, equity in income from investees, intangible asset amortization, income attributable to noncontrolling interests and other unallocated amounts that are driven by corporate initiatives. Approximately $245,373, $281,687 and $193,308 of income before income taxes was generated in jurisdictions outside the U.S. for the years ended December 31, 2019, 2018, and 2017, respectively. Net sales and net property, plant and equipment by country relate directly to the Company’s operations in the respective country. Corporate assets are principally cash and cash equivalents and headquarters’ facilities and equipment.
(1)The net effect of discounts, incentives, and freight billed to customers has been allocated to their respective segments for the current and prior periods. Previously, the net effect of such items were captured and presented separately in a line item entitled “Other.” The following table presents disaggregated geographical net sales from contracts with customers by reportable segment. The Company believes this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors:
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Restructuring |
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Restructuring | Restructuring In October of 2019, the Company approved and began to implement certain restructuring actions (the "2019 Cost Savings Plan") across its subsidiaries primarily targeted at simplifying organizational structures and distribution networks. The Company believes these actions will reduce costs in the future and allow it to more effectively and efficiently manage its businesses. Among other things, the 2019 Cost Savings Plan will result in workforce reductions and facility closures and consolidations. The Company executed a VRP for its U.S. and Canadian subsidiaries in the fourth quarter of 2019 in connection with this plan. The table below summarizes costs 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. See the segment data footnote for more information. The table below summarizes the activity related to the restructuring costs discussed above. As of December 31, 2019, the current portion of the restructuring liability of $74,153 is included in other current liabilities on the consolidated balance sheet.
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Business | Business Genuine Parts Company and all of its majority-owned subsidiaries (the "Company") is a distributor of automotive replacement parts and industrial parts. The Company serves a diverse customer base through approximately 3,600 locations in North America, Australasia and Europe and, therefore, has limited exposure from credit losses to any particular customer, region, or industry segment. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company has evaluated subsequent events through the date the financial statements were issued.
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Principles of Consolidation | Principles of ConsolidationThe consolidated financial statements include all of the accounts of the Company. The net income attributable to noncontrolling interests is not material to the Company’s consolidated net income. Intercompany accounts and transactions have been eliminated in consolidation. Effective 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 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, revenue from freight services provided by the Automotive Parts Group are grossed up and recast in continuing operations in each period because those sales are continuing with the discontinued operations after the divestiture. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements, in conformity with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates and the differences could be material.
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Revenue Recognition | Revenue Recognition The Company applied ASU 2014-09, using the modified retrospective method effective January 1, 2018. The cumulative effect of initially applying ASU 2014-09 and its amendments resulted in a reduction to the opening retained earnings balance of $8,000 prior to the tax adjustment, at January 1, 2018 and a related adjustment to other current liabilities as of that date. Revenue for periods prior to January 1, 2018 has not been adjusted and continues to be reported under Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition (ASC 605). The Company primarily recognizes revenue at the point the customer obtains control of the products or services and at an amount that reflects the consideration expected to be received for those products or services. Contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price and recognizes revenue upon delivery or as services are rendered. Revenue is recognized net of allowances for returns, variable consideration and any taxes collected from customers that will be remitted to governmental authorities. Revenue recognized over time is not significant. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. Liabilities for customer incentives, discounts, or rebates are included in other current liabilities in the consolidated balance sheets. Product Distribution Revenues The Company generates revenue primarily by distributing products through wholesale and retail channels. For wholesale customers, revenue is recognized when title and control of the goods has passed to the customer. Retail revenue is recognized at the point of sale when the goods are transferred to customers and consideration is received. Shipping and handling activities are performed prior to the customer obtaining control of the products. Costs associated with shipping and handling are considered costs to fulfill a contract and are included in selling, administrative and other expenses in the period they are incurred. Other Revenues The Company offers software support, product cataloging, marketing, training and other membership program and support services to certain customers. This revenue is recognized as services are performed. Revenue from these services is recognized over a short duration and the impact to our consolidated financial statements is not significant. Variable Consideration The Company’s products are generally sold with a right of return and may include variable consideration in the form of incentives, discounts, credits or rebates. The Company estimates variable consideration based on historical experience to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to a customer. The Company recognizes estimated variable consideration as an adjustment to the transaction price when control of the related product or service is transferred. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant.
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Foreign Currency Translation | Foreign Currency Translation The consolidated balance sheets and statements of income and comprehensive income of the Company’s foreign subsidiaries have been translated into U.S. dollars at the current and average exchange rates, respectively. The foreign currency translation adjustment is included as a component of accumulated other comprehensive loss.
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.
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Trade Accounts Receivable and the Allowance for Doubtful Accounts | Trade Accounts Receivable and the Allowance for Doubtful AccountsThe Company evaluates the collectability of trade accounts receivable based on a combination of factors. The Company estimates an allowance for doubtful accounts as a percentage of net sales based on historical bad debt experience and periodically adjusts this estimate when the Company becomes aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in the overall aging of accounts receivable. While the Company has a large customer base that is geographically dispersed, a general economic downturn in any of the industry segments in which the Company operates could result in higher than expected defaults and, therefore, the need to revise estimates for bad debts. |
Merchandise Inventories, Including Consideration Received From Vendors | Merchandise Inventories, Including Consideration Received From Vendors Merchandise inventories are valued at the lower of cost or net realizable value. Cost is determined by the last-in, first-out ("LIFO") method for a majority of U.S. automotive and industrial parts, and generally by the first-in, first-out ("FIFO") method for certain non-U.S. and other inventories. If the FIFO method had been used for all inventories, cost would have been approximately $531,800 and $479,500 higher than reported at December 31, 2019 and 2018, respectively. During 2019 and 2017, reductions in industrial parts inventories resulted in liquidations of LIFO inventory layers, which reduced cost of goods sold by approximately $10,400 and $2,000, respectively. There were no LIFO liquidations in 2018. The Company identifies slow moving or obsolete inventories and estimates appropriate provisions related thereto. Historically, these losses have not been significant as the vast majority of the Company’s inventories are not highly susceptible to obsolescence and are eligible for return under various vendor return programs. While the Company has no reason to believe its inventory return privileges will be discontinued in the future, its risk of loss associated with obsolete or slow moving inventories would increase if such were to occur. The Company enters into agreements at the beginning of each year with many of its vendors that provide for inventory purchase incentives. Generally, the Company earns inventory purchase incentives upon achieving specified volume purchasing levels or other criteria. The Company accrues for the receipt of these incentives as part of its inventory cost based on cumulative purchases of inventory to date and projected inventory purchases through the end of the year. While management believes the Company will continue to receive consideration from vendors in 2020 and beyond, there can be no assurance that vendors will continue to provide comparable amounts of incentives in the future.
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Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current AssetsPrepaid expenses and other current assets consist primarily of amounts due from vendors, prepaid expenses, and income and other taxes receivable. |
Goodwill | Goodwill 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). A component is a reporting unit if the component constitutes a business for which discrete financial information and operating results are available and management regularly reviews that information. However, the Company may aggregate two or more components of an operating segment into a single reporting unit if the components have similar economic characteristics. To review goodwill at a reporting unit for impairment, the Company generally elects to first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Qualitative factors include adverse macroeconomic, industry or market conditions, cost factors, or financial performance. If the Company elects not to perform a qualitative assessment or concludes from its assessment of qualitative factors that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company must perform a quantitative test to evaluate goodwill impairment. To perform a quantitative test, the Company calculates the fair value of the reporting unit and compares that amount to the reporting unit's carrying value. The Company typically calculates the fair value by using a combination of a market approach and an income approach that is based on a discounted cash flow model. The assumptions used in the market approach generally include benchmark company market multiples and the assumptions used in the income approach generally include the projected cash flows of the reporting unit, which are based on projected revenue growth rates and operating margins, and the estimated weighted average costs of capital, working capital and terminal value. The Company uses inputs and assumptions it believes are consistent with those a hypothetical marketplace participant would use. The Company recognizes goodwill impairment (if any) as the excess of the reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Refer to the goodwill and other intangible assets footnote for further information on the results of the Company's annual goodwill impairment testing.
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Long-Lived Assets Other Than Goodwill | Long-Lived Assets Other Than GoodwillThe Company assesses its long-lived assets other than goodwill for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining life of such assets. If these projected cash flows are less than the carrying amount, an impairment would be recognized, resulting in a write-down of assets with a corresponding charge to earnings. Impairment losses, if any, are measured based upon the difference between the carrying amount and the fair value of the assets. |
Other Assets | Other AssetsOther assets consist primarily of cash surrender value of life insurance policies, equity method investments, guarantee fees receivable, and deferred compensation benefits. |
Property, Plant, and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation and amortization are primarily determined on a straight-line basis over the following estimated useful lives of each asset: buildings and improvements, 10 to 40 years; machinery and equipment, 5 to 15 years.
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Other Current Liabilities | Other Current LiabilitiesOther current liabilities consist primarily of reserves for sales returns expected within the next year, accrued compensation, accrued customer incentives, accrued income and other taxes, and other reserves for expenses incurred. |
Other Long-term Liabilities | Other Long-term LiabilitiesOther long-term liabilities consist primarily of reserves for sales returns expected after the next year, guarantee obligations, accrued taxes and other non-current obligations. |
Self-Insurance | Self-Insurance The Company is self-insured for the majority its group health insurance costs. A reserve for claims incurred but not reported is developed by analyzing historical claims data provided by the Company’s claims administrators. These reserves are included in accrued expenses in the accompanying consolidated balance sheets as the expenses are expected to be paid within one year. Long-term insurance liabilities consist primarily of reserves for the Company's workers’ compensation program. In addition, the Company carries various large risk deductible workers’ compensation policies for the majority of workers’ compensation liabilities. The Company records the workers’ compensation reserves based on an analysis performed by an independent actuary. The analysis calculates development factors, which are applied to total reserves as provided by the various insurance companies who underwrite the program. While the Company believes that the assumptions used to calculate these liabilities are appropriate, significant differences in actual experience or significant changes in these assumptions may materially affect workers’ compensation costs.
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Business Combinations | Business Combinations When the Company acquires businesses, it applies the acquisition method of accounting and recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree at their fair values on the acquisition date, which requires significant estimates and assumptions. Goodwill is measured as the excess of the fair value of the consideration transferred over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The acquisition method requires the Company to record provisional amounts for any items for which the accounting is not complete at the end of a reporting period. The Company must complete the accounting during the measurement period, which cannot exceed one year. Adjustments made during the measurement period could have a material impact on the Company's financial condition and results of operations. The Company typically measures customer relationship and other intangible assets using an income approach. Significant estimates and assumptions used in this approach include discount rates and certain assumptions that form the basis of the forecasted cash flows expected to be generated from the asset (e.g., future revenue growth rates, operating margins and attrition rates). If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, the Company could record impairment charges. In addition, the Company has estimated the economic lives of certain acquired tangible and intangible assets and these lives are used to calculate depreciation and amortization expense. If the Company's estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset could be impaired.
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Legal and Product Liabilities | Legal and Product Liabilities The Company accrues for potential losses related to legal disputes, litigation, product liabilities, and regulatory matters when it is probable (more likely than not) that the Company will incur a loss and the amount of the loss can be reasonably estimated. The amount of the product liability reflects the Company’s reasonable estimate of losses based upon currently known facts. To calculate the liability, the Company estimates potential losses relating to pending claims and also estimates the likelihood of additional, similar claims being filed against the Company in the future. To estimate potential losses on claims that could be filed in the future, the Company considers claims pending against the Company, claim filing rates, the number of codefendants and the extent to which they share in settlements, and the amount of loss by claim type. The estimated losses for pending and potential future claims are calculated on a discounted basis using risk-free interest rates derived from market data about monetary assets with maturities comparable to those of the projected product liabilities. The Company uses an actuarial specialist to assist with measuring its product liabilities.
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Fair Value Measurements | Fair Value Measurements The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, trade accounts receivable, trade accounts payable, and borrowings under the line of credit and term loan approximate their respective fair values based on the short-term nature of these instruments. At December 31, 2019 and 2018, the fair value of fixed rate debt was approximately $2,013,542 and $1,427,381, 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. At December 31, 2019 and 2018, the carrying value of fixed rate debt, net of debt issuance costs, was $1,945,387 and $1,466,803, respectively, and is included in long-term and short-term debt in the consolidated balance sheets. Derivative instruments are recognized in the 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. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analyses of goodwill, other intangible assets, and long-lived assets. These involve fair value measurements on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy (i.e., unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability).
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Derivatives and Hedging | Derivatives and Hedging The 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, cash flows and net investments in certain foreign subsidiaries 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.
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Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are classified as selling, administrative and other expenses in the accompanying consolidated statements of income and comprehensive income and totaled approximately $303,900, $278,500, and $183,100, for the years ended December 31, 2019, 2018, and 2017, respectively.
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Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and totaled $201,600, $203,500, and $164,800 in the years ended December 31, 2019, 2018, and 2017, respectively.
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Accounting for Legal Costs | Accounting for Legal Costs The Company’s legal costs expected to be incurred in connection with loss contingencies are expensed as such costs are incurred.
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Share-Based Compensation | Share-Based Compensation 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. SARs represent a right to receive upon exercise an amount, payable in shares of common stock, equal to the excess, if any, of the fair market value of the Company’s common stock on the date of exercise over the base value of the grant. The terms of such SARs require net settlement in shares of common stock and do not provide for cash settlement. RSUs represent a contingent right to receive one share of the Company’s common stock at a future date. The majority of awards previously granted vest on a pro-rata basis for periods ranging from one to five years and are expensed accordingly on a straight-line basis. Forfeitures are accounted for as they occur. The Company issues new shares upon exercise or conversion of awards under these plans.
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Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amount and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets and liabilities are recorded net as noncurrent deferred income taxes. In addition, valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In making this determination, the Company considers all available positive and negative evidence including projected future taxable income, future reversals of existing temporary differences, recent financial operations and tax planning strategies. The Company recognizes a tax benefit from uncertain tax positions when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.
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Net Income per Common Share | Net Income from Continuing Operations per Common Share Basic net income from continuing operations per common share is computed by dividing net income from continuing operations by the weighted average number of common shares outstanding during the year. The computation of diluted net income from continuing operations per common share includes the dilutive effect of stock options, stock appreciation rights and nonvested restricted stock awards options. Options to purchase approximately 210, 1,490, and 1,920 shares of common stock ranging from $85 — $105 per share were outstanding at December 31, 2019, 2018, and 2017, respectively. These options were excluded from the computation of diluted net income from continuing operations per common share because the options’ exercise prices were greater than the average market prices of common stock in each respective year.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases, which, among other things, requires an entity to recognize a right-of-use asset and a lease liability on the balance sheet for substantially all leases, including operating leases. Expanded disclosures with additional qualitative and quantitative information are also required. ASU 2016-02 and its amendments were effective for interim and annual reporting periods beginning after December 15, 2018 and early adoption was permitted. The Company adopted ASU 2016-02 and its amendments as of January 1, 2019 using the modified retrospective method and utilized the optional transition method to apply the legacy guidance in ASC 840, Leases, including its disclosure requirements, in the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. The Company elected a policy of not recording leases on its consolidated balance sheets when the leases have a term of 12 months or less and the Company is not reasonably certain to elect an option to purchase the leased asset. The Company recognizes payments on these leases within selling, administrative and other expenses on a straight-line basis over the lease term. The Company's adoption of the standard resulted in a cumulative-effect adjustment to increase retained earnings by $4,797, net of taxes, as of January 1, 2019. The standard did not materially impact the Company's consolidated net income or liquidity. The standard did not have an impact on debt-covenant compliance under the Company's current debt agreements. Income Statement - Reporting Comprehensive Income (Topic 220) In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The ASU permits a company to make a one-time election to reclassify stranded tax effects caused by the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. The ASU also requires companies to disclose their accounting policies for releasing income tax effects from accumulated other comprehensive income. ASU 2018-02 was effective for periods beginning after December 15, 2018, with an election to adopt early. The Company adopted ASU 2018-02 as of January 1, 2019 and recognized an adjustment to increase retained earnings and to adjust accumulated other comprehensive loss by approximately $122,526. Intangibles - Goodwill and Other (Topic 350) In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The ASU simplifies the subsequent measurement of goodwill by eliminating the second step from the goodwill impairment test. ASU 2017-04 requires applying a one-step quantitative test and recording the amount of goodwill impairment as the excess of the reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment. The Company adopted ASU 2017-04 as of October 1, 2019 and performed its annual evaluation of goodwill in accordance with this standard. Financial Instruments - Credit Losses (Topic 220) 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 certain other financial instruments 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. ASU 2016-13 is effective for periods beginning after December 15, 2019, with an option to adopt early. The Company plans to adopt the ASU and its amendments on January 1, 2020. On this date the Company currently expects to record an immaterial cumulative effect adjustment to reduce retained earnings as a result of the adoption. The adoption of ASU 2016-13 and its amendments is not expected to have a significant impact on the Company's consolidated financial statements. 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. Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop internal-use software. These provisions should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. ASU 2018-15 is effective for periods beginning after December 15, 2019, with an option to adopt early. The adoption of ASU 2018-15 is not expected to have a significant impact on the Company’s financial position, results of operations or disclosures. The Company does not plan to early adopt the standard
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Pension and Other Postretirement Plans | The Company’s defined benefit pension plans cover employees in the U.S., Canada, and Europe who meet eligibility requirements. The plan covering U.S. employees is noncontributory and the Company implemented a hard freeze for the U.S. qualified defined benefit plan as of December 31, 2013. No further benefits were provided after this date for additional credited service or earnings and all participants became fully vested as of December 31, 2013. The Canadian plan is contributory and benefits are based on career average compensation. The Company’s funding policy is to contribute an amount equal to the minimum required contribution under applicable pension legislation. For the plans in the U.S. and Canada, the Company may increase its contribution above the minimum, if appropriate to its tax and cash position and the plans’ funded position. The European plans are funded in accordance with local regulations. The Company also sponsors supplemental retirement plans covering employees in the U.S. and Canada. The Company uses a measurement date of December 31 for its pension and supplemental retirement plans. Several assumptions are used to determine the benefit obligations, plan assets, and net periodic income. The discount rate for the U.S. pension plan is calculated using a bond matching approach to select specific bonds that would satisfy the projected benefit payments. The bond matching approach reflects the process that would be used to settle the pension obligations. The discount rate for non U.S. plans are set by using Willis Towers Watson's RATE:Link model. For each plan, this approach reflects yields available on high quality corporate bonds that would generate the cash flow necessary to pay the plan's benefits when due. The expected return on plan assets is based on a calculated market-related value of plan assets, where gains and losses on plan assets are amortized over a five year period and accumulate in other comprehensive income. Other non-investment unrecognized gains and losses are amortized in future net income based on a “corridor” approach, where the corridor is equal to 10% of the greater of the benefit obligation or the market-related value of plan assets at the beginning of the year. The unrecognized gains and losses in excess of the corridor criteria are amortized over the average future lifetime or service of plan participants, depending on the plan. These assumptions are updated at each annual measurement date. The Company’s benefit plan committees in the U.S. and Canada establish investment policies and strategies and regularly monitor the performance of the funds. The plans in Europe are unfunded and, therefore, there are no plan assets. The pension plan strategy implemented by the Company’s management is to achieve long-term objectives and invest the pension assets in accordance with the applicable pension legislation in the U.S. and Canada as well as fiduciary standards. The long-term primary investment objectives for the pension plans are to provide for a reasonable amount of long-term growth of capital, without undue exposure to risk, protect the assets from erosion of purchasing power, and provide investment results that meet or exceed the pension plans’ actuarially assumed long-term rates of return. The Company’s investment strategy with respect to pension plan assets is to generate a return in excess of the passive portfolio benchmark (47% S&P 500 Index, 5% Russell Midcap Index, 7% Russell 2000 Index, 5% MSCI EAFE Index, 5% DJ Global Moderate Index, 3% MSCI Emerging Market Net, and 28% Barclays U.S. Long Govt/Credit). The fair values of the plan assets as of December 31, 2019 and 2018, by asset category, are shown in the tables below. Various inputs are considered when determining the value of the Company’s pension plan assets. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. Level 1 represents observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 represents other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.). Level 3 represents significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). Certain investments are measured at fair value using the net asset value ("NAV") per share as a practical expedient and have not been classified in the fair value hierarchy. The valuation methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Equity securities are valued at the closing price reported on the active market on which the individual securities are traded on the last day of the calendar plan year. Debt securities including corporate bonds, U.S. Government securities, and asset-backed securities are valued using price evaluations reflecting the bid and/or ask sides of the market for an investment as of the last day of the calendar plan year.Based on the investment policy for the pension plans, as well as an asset study that was performed based on the Company’s asset allocations and future expectations, the Company’s expected rate of return on plan assets for measuring 2020 pension income is 7.11% for the plans. The asset study forecasted expected rates of return for the approximate duration of the Company’s benefit obligations, using capital market data and historical relationships.The Company has one defined contribution plan in the U.S. that covers substantially all of its domestic employees. Employees receive a matching contribution of 100% of the first 5% of the employees’ salary.
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Consolidation, Variable Interest Entity | The Company guarantees the borrowings of certain independently controlled automotive parts stores (independents) and certain other affiliates in which the Company has a noncontrolling equity ownership interest (affiliates). Presently, the independents are generally consolidated by unaffiliated enterprises that have a controlling financial interest through ownership of a majority voting interest in the independent. The Company has no voting interest or other equity conversion rights in any of the independents. The Company does not control the independents or the affiliates, but receives a fee for the guarantee. 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 entity’s economic performance including, but not limited to, decisions about hiring and terminating personnel, local marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining appropriate inventories, and store hours. Separately, the Company concluded 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 guarantee. While such borrowings of the independents and affiliates are outstanding, the Company is required to maintain compliance with certain covenants, including a maximum debt to EBITDA ratio and certain limitations on additional borrowings. At December 31, 2019, the Company was in compliance with all such covenants. At December 31, 2019, the total borrowings of the independents and affiliates subject to guarantee by the Company were approximately $904,662. These loans generally mature over periods from one to six years. In the event that the Company is required to make payments in connection with guaranteed obligations of the independents or the affiliates, the Company would obtain and liquidate certain collateral (e.g., accounts receivable and inventory) to recover all or a portion of the amounts paid under the guarantee. When it is deemed probable that the Company will incur a loss in connection with a guarantee, a liability is recorded equal to this estimated loss. To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings.
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Segment Reporting | The Company’s reportable segments consist of automotive and industrial parts. Within the reportable segments, certain of the Company’s operating segments are aggregated since they have similar economic characteristics, products and services, type and class of customers, and distribution methods. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Loss | The following table presents the amounts that comprise accumulated other comprehensive loss ("AOCL") as well as the changes in those amounts by component for the years ended on December 31, 2019 and 2018:
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Goodwill and Other Identifiable Intangible Assets | The changes in the carrying amount of goodwill during the years ended December 31, 2019 and 2018 by reportable segment, as well as other identifiable intangible assets, are summarized as follows:
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Gross Carrying Amounts and Accumulated Amortization Relating to Other Intangible Assets | The gross carrying amounts and accumulated amortization relating to other intangible assets at December 31, 2019 and 2018 are as follows:
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Estimated Other Intangible Assets Amortization Expense | Estimated other intangible assets amortization expense for the succeeding five years is as follows:
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Property, Plant & Equipment (Tables) |
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Property, Plant and Equipment | Property, plant and equipment as of December 31, 2019 and December 31, 2018, consisted of the following:
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Credit Facilities (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Amount of Credit Facilities | Amounts outstanding under the Company’s credit facilities, net of debt issuance costs consist of the following:
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Schedule of Maturities of Long-term Debt | Approximate maturities under the Company’s credit facilities, net of debt issuance costs, are as follows:
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Derivatives and Hedging (Tables) |
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | The table below presents pre-tax gains and losses related to designated cash flow hedges and net investment hedges:
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The table below presents pre-tax gains and losses related to designated cash flow hedges and net investment hedges:
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Leased Properties (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Leases, Assets and Liabilities | The table below presents the locations of the operating lease assets and liabilities on the consolidated balance sheets as of December 31, 2019:
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Schedule of Components of Operating Leases | The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2019 are:
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Lessee, Operating Lease, Liability, Maturity | The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheets as of December 31, 2019:
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Share-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's Share-Based Compensation Activity and Related Information | A summary of the Company’s share-based compensation activity and related information is as follows:
(1)Shares include RSUs. (2)The weighted average exercise price excludes RSUs. (3)The exercise prices for SARs outstanding as of December 31, 2019 ranged from approximately $43 to $100. The weighted average remaining contractual life of all SARs outstanding is approximately five years.
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Summary of Company's Nonvested Share Awards (RSUs) Activity | A summary of the Company’s nonvested share awards activity is as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows:
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Components of Income before Income Taxes | The components of income before income taxes are as follows:
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Components of Income Tax Expense | The components of income tax expense are as follows:
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Difference Between Total Tax Expense and Amount Computed by Applying Statutory Federal Income Tax Rate | The reasons for the difference between total tax expense and the amount computed by applying the statutory Federal income tax rate to income before income taxes are as follows:
(1)U.S. statutory rates applied to income are as follows: 2019 and 2018 at 21%, 2017 at 35%. (2)The Company's effective tax rate reflects the net benefit of having operations outside of the U.S. which are taxed at statutory rates different from the U.S. statutory rate, with some income being fully or partially exempt from income taxes due to various operating and financing activities. (3)Impact of the Tax Cuts and Jobs Act, enacted December 22, 2017.
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Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
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Employee Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Benefit Obligation | Changes in benefit obligations for the years ended December 31, 2019 and 2018 were:
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Assumptions Used to Measure Pension Benefit Obligations | The assumptions used to measure the pension benefit obligations for the plans at December 31, 2019 and 2018, were:
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Changes in Plan Assets | Changes in plan assets for the years ended December 31, 2019 and 2018 were:
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Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | For the years ended December 31, 2019 and 2018, the aggregate benefit obligation and aggregate fair value of plan assets for plans with benefit obligations in excess of plan assets were as follows:
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Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | For the years ended December 31, 2019 and 2018, the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with accumulated benefit obligations in excess of plan assets were as follows:
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Asset Allocations for Funded Pension Plans | The asset allocations for the Company’s funded pension plans at December 31, 2019 and 2018, and the target allocation for 2020, by asset category were:
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Fair Value of Plan Assets by Asset Category |
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Amounts Recognized in Consolidated Balance Sheets | The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheets at December 31:
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Amounts Recognized In Accumulated Other Comprehensive Loss Table | Amounts recognized in accumulated other comprehensive loss consist of:
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Expected Cash Flows for Pension Plans | Information about the expected cash flows for the pension plans follows:
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Components of Net Periodic Benefit (Income) Cost | Net periodic benefit income included the following components:
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Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) | Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:
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Estimated Amounts Amortized from Accumulated Other Comprehensive Loss | The estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic benefit income in 2020 are as follows:
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Assumptions Used To Measure Net Periodic Benefit (Income) Cost | The assumptions used in measuring the net periodic benefit income for the plans follow:
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Acquisitions, Divestitures and Discontinued Operations (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The total acquisition date fair value of the consideration transferred for the businesses and of any previously held equity interests was $860,712, net of cash acquired of $16,591, and it consisted of the following:
The following table summarizes the preliminary, estimated fair values of the assets acquired and liabilities assumed at the acquisition dates for the aggregate of these businesses. Additional adjustments may be made to the acquisition accounting during the measurement period primarily related to intangible asset revaluations and tax accounting.
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Disposal Groups, Including Discontinued Operations | The Company’s results of operations for discontinued operations were:
The Company’s assets and liabilities for discontinued operations, by major class, were:
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Segment Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Data |
(1)The net effect of discounts, incentives, and freight billed to customers has been allocated to their respective segments for the current and prior periods. Previously, the net effect of such items were captured and presented separately in a line item entitled “Other.”
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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. The Company believes this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors:
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Restructuring (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The table below summarizes costs associated with the 2019 Cost Savings Plan:
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Goodwill and Other Intangible Assets - Changes in Goodwill and Other Identifiable Intangible Assets (Detail) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Goodwill | ||||
Goodwill, beginning balance | $ 2,046,820 | $ 2,071,999 | ||
Additions | 380,240 | 74,584 | ||
Divestitures | (115,731) | |||
Impairments | 0 | 0 | $ 0 | |
Foreign currency translation | (17,810) | (99,763) | ||
Goodwill, ending balance | $ 2,293,519 | 2,293,519 | 2,046,820 | 2,071,999 |
Other Intangible Assets, Net | ||||
Other intangible assets, net, beginning balance | 1,327,898 | 1,311,165 | ||
Additions | 340,799 | 164,348 | ||
Divestitures | (89,030) | |||
Amortization | (92,206) | (83,489) | (46,384) | |
Impairments | (2,194) | |||
Foreign currency translation | 6,830 | (64,126) | ||
Other intangible assets, net, ending balance | 1,492,097 | 1,492,097 | 1,327,898 | 1,311,165 |
Business Products | ||||
Goodwill | ||||
Impairments | 81,968 | |||
Accumulated impairment loss | 81,968 | 81,968 | ||
Industrial | ||||
Goodwill | ||||
Goodwill, beginning balance | 324,997 | 306,491 | ||
Additions | 185,679 | 19,213 | ||
Divestitures | (115,437) | |||
Impairments | 0 | |||
Foreign currency translation | 785 | (707) | ||
Goodwill, ending balance | 396,024 | 396,024 | 324,997 | 306,491 |
Automotive | ||||
Goodwill | ||||
Goodwill, beginning balance | 1,721,823 | 1,765,508 | ||
Additions | 194,561 | 55,371 | ||
Divestitures | (294) | |||
Impairments | 0 | |||
Foreign currency translation | (18,595) | (99,056) | ||
Goodwill, ending balance | $ 1,897,495 | $ 1,897,495 | $ 1,721,823 | $ 1,765,508 |
Goodwill and Other Intangible Assets - Gross Carrying Amounts and Accumulated Amortization Relating to Other Intangible Assets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,821,381 | $ 1,610,705 | |
Accumulated Amortization | (329,284) | (282,807) | |
Net | 1,492,097 | 1,327,898 | $ 1,311,165 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,481,470 | 1,278,499 | |
Accumulated Amortization | (287,851) | (248,903) | |
Net | 1,193,619 | 1,029,596 | |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 334,643 | 327,217 | |
Accumulated Amortization | (36,501) | (29,643) | |
Net | 298,142 | 297,574 | |
Non-competition agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 5,268 | 4,989 | |
Accumulated Amortization | (4,932) | (4,261) | |
Net | $ 336 | $ 728 |
Goodwill and Other Intangible Assets - Estimated Other Intangible Assets Amortization Expense (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense for other intangible assets total | $ 92,206 | $ 83,489 | $ 46,384 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||
2020 | 93,123 | ||
2021 | 92,797 | ||
2022 | 92,687 | ||
2023 | 91,953 | ||
2024 | 91,105 | ||
Estimated other intangible assets amortization expense | $ 461,665 |
Property, Plant & Equipment (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | $ 2,374,376 | $ 2,099,993 | |
Less: accumulated depreciation | 1,200,688 | 1,105,339 | |
Property, plant and equipment, net | 1,173,688 | 994,654 | $ 903,632 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | 128,353 | 105,960 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | 779,124 | 715,649 | |
Machinery, equipment and other | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | $ 1,466,899 | $ 1,278,384 |
Credit Facilities - Additional Information (Detail) $ in Thousands |
Dec. 31, 2019
USD ($)
|
Jun. 30, 2019
AUD ($)
|
May 31, 2019
EUR (€)
|
Dec. 31, 2018
USD ($)
|
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Long-term debt, bearing variable interest, amount | $ 554,902 | $ 1,176,477 | ||
Weighted average interest rate on outstanding borrowings | 2.18% | 2.71% | ||
Unused letter of credit outstanding due to workers' compensation and insurance reserve | $ 65,322 | $ 63,504 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 310,000 | € 250,000,000 |
Credit Facilities - Maturity of Credit Facilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Disclosure [Abstract] | ||
2020 | $ 624,043 | |
2021 | 189,573 | |
2022 | 713,952 | |
2023 | 249,240 | |
2024 | 359,898 | |
Thereafter | 1,289,393 | |
Total debt | $ 3,426,099 | $ 3,143,280 |
Derivatives and Hedging - Balances and Locations of Derivative Instruments (Details) € in Thousands, $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2019
EUR (€)
|
Dec. 31, 2018
EUR (€)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Derivative [Line Items] | ||||
Balance | $ 1,945,387 | $ 1,466,803 | ||
Designated as Hedging Instrument | Other Current Liabilities | Cash Flow Hedges | Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Notional | 800,000 | 500,000 | ||
Balance | 24,792 | 6,345 | ||
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Net Investment Hedges | Cross-currency swap | ||||
Derivative [Line Items] | ||||
Notional | 0 | 500,000 | ||
Balance | 0 | 6,006 | ||
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Net Investment Hedges | Forward contracts | ||||
Derivative [Line Items] | ||||
Notional | 925,810 | 0 | ||
Balance | 39,965 | 0 | ||
Designated as Hedging Instrument | Long-term Debt | Net Investment Hedges | Foreign currency debt | ||||
Derivative [Line Items] | ||||
Notional | € | € 700,000 | € 700,000 | ||
Balance | $ 784,000 | $ 801,010 |
Leased Properties - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Lessee, Lease, Description [Line Items] | |||
Option to extend, amount | $ 55,055 | ||
Operating lease costs | 310,028 | ||
Operating leases, rent expense | $ 334,000 | $ 278,000 | |
Operating lease, payments | 311,170 | ||
Asset obtained in exchange | $ 330,103 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 20 years |
Leased Properties - Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Leases [Abstract] | ||
Operating lease assets | $ 995,667 | $ 0 |
Current operating lease liabilities | 255,207 | |
Noncurrent operating lease liabilities | 756,519 | $ 0 |
Total operating lease liabilities | $ 1,011,726 |
Leased Properties - Components of Operating Leases (Details) |
Dec. 31, 2019 |
---|---|
Leases [Abstract] | |
Weighted average remaining lease term (in years) | 5 years 6 months |
Weighted average discount rate | 2.82% |
Leased Properties - Future Lease Payments (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2020 | $ 281,535 |
2021 | 236,652 |
2022 | 179,256 |
2023 | 127,058 |
2024 | 81,226 |
Thereafter | 186,454 |
Total undiscounted future minimum lease payments | 1,092,181 |
Less: Difference between undiscounted lease payments and discounted operating lease liabilities | 80,455 |
Total operating lease liabilities | $ 1,011,726 |
Share-Based Compensation - Summary of Company's Nonvested Share Awards (RSUs) Activity (Detail) - $ / shares shares in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Beginning balance (in shares) | 563 | |
Granted (in shares) | 395 | |
Vested (in shares) | (216) | |
Forfeited (in shares) | (65) | |
Ending balance (in shares) | 677 | 563 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted average grant date fair value (in dollars per share) | $ 95 | $ 91 |
Granted, weighted-average grant date fair value (in dollars per share) | 100 | |
Vested, weighted-average grant date fair value (in dollars per share) | 94 | |
Forfeited, weighted-average grant date fair value (in dollars per share) | $ 94 |
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Deferred tax assets related to: | ||
Expenses not yet deducted for tax purposes | $ 276,845 | $ 248,382 |
Operating lease liabilities | 281,853 | |
Pension liability not yet deducted for tax purposes | 261,909 | 277,929 |
Capital loss | 18,317 | 11,944 |
Net operating loss | 38,445 | 29,785 |
Net deferred tax assets, gross | 877,369 | 568,040 |
Deferred tax liabilities related to: | ||
Employee and retiree benefits | 215,899 | 218,019 |
Inventory | 92,577 | 94,361 |
Operating lease assets | 274,630 | |
Other intangible assets | 343,649 | 289,897 |
Property, plant and equipment | 63,518 | 68,122 |
Other | 38,936 | 32,947 |
Deferred tax liabilities, total | 1,029,209 | 703,346 |
Net deferred tax liability before valuation allowance | (151,840) | (135,306) |
Valuation allowance | (35,282) | (26,095) |
Total net deferred tax liability | $ (187,122) | $ (161,401) |
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 173,515 | |
Operating loss carryforwards, not subject to expiration | 122,212 | |
Operating loss carryforwards, subject to expiration | 51,303 | |
Unrecognized tax benefits including interest and penalties | 24,347 | $ 20,669 |
Unrecognized tax benefits that would impact effective tax rate | 18,286 | $ 14,760 |
Undistributed earnings of foreign subsidiaries | $ 900,000 |
Income Taxes - Components of Income before Income Taxes (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||
United States | $ 613,910 | $ 712,951 | $ 737,339 |
Foreign | 245,373 | 281,687 | 193,308 |
Income before income taxes | $ 859,283 | $ 994,638 | $ 930,647 |
Income Taxes - Components of Income Tax Expense (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Current: | |||
Federal | $ 162,883 | $ 130,144 | $ 225,394 |
State | 45,488 | 36,457 | 28,603 |
Foreign | 60,376 | 76,910 | 43,849 |
Deferred: | |||
Federal | (21,617) | 13,295 | 74,197 |
State | (11,273) | 5,427 | 13,761 |
Foreign | (23,049) | (17,129) | (18,940) |
Income tax expense, total | $ 212,808 | $ 245,104 | $ 366,864 |
Income Taxes - Difference Between Total Tax Expense and Amount Computed by Applying Statutory Federal Income Tax Rate (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Tax Contingency [Line Items] | |||
Statutory rate applied to income | $ 180,449 | $ 208,874 | $ 325,742 |
Plus state income taxes, net of Federal tax benefit | 27,030 | 33,088 | 27,537 |
Taxation of foreign operations, net | (17,663) | (7,862) | (33,870) |
U.S. tax reform - transition tax | 4,492 | 4,875 | 37,132 |
Book tax basis difference in investment | 0 | (11,944) | 0 |
Valuation allowance | 4,503 | 20,505 | 1,362 |
Other | 7,782 | (1,395) | 2,367 |
Income tax expense, total | 212,808 | 245,104 | 366,864 |
Domestic Tax Authority | |||
Income Tax Contingency [Line Items] | |||
Deferred tax remeasurement | 0 | 424 | 15,932 |
Foreign Tax Authority | |||
Income Tax Contingency [Line Items] | |||
Deferred tax remeasurement | $ 6,215 | $ (1,461) | $ (9,338) |
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 18,428 | $ 14,697 | $ 15,190 |
Additions based on tax positions related to the current year | 3,701 | 2,034 | 2,644 |
Additions for tax positions of prior years | 620 | 4,787 | 1,511 |
Reductions for tax positions for prior years | (965) | (725) | (430) |
Reduction for lapse in statute of limitations | 0 | (2,338) | (3,917) |
Settlements | (323) | (27) | (301) |
Balance at end of year | $ 21,461 | $ 18,428 | $ 14,697 |
Employee Benefit Plans - Changes in Benefit Obligation (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Changes in benefit obligation | |||
Benefit obligation at beginning of year | $ 2,278,043 | $ 2,435,765 | |
Service cost | 9,558 | 10,410 | $ 8,459 |
Interest cost | 97,441 | 88,247 | 96,651 |
Plan participants’ contributions | 2,246 | 2,466 | |
Actuarial loss (gain) | 246,352 | (122,556) | |
Foreign currency exchange rate changes | 9,073 | (18,416) | |
Gross benefits paid | (119,789) | (118,643) | |
Plan amendments | 3,327 | 0 | |
Curtailments | (6,569) | 0 | |
Settlements | (67,831) | 0 | |
Special termination costs | 42,757 | 0 | |
Acquired plans | 1,992 | 770 | |
Benefit obligation at end of year | $ 2,496,600 | $ 2,278,043 | $ 2,435,765 |
Employee Benefit Plans - Assumptions Used to Measure Pension Benefit Obligations for Plans (Detail) |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Retirement Benefits [Abstract] | ||
Weighted average discount rate | 3.43% | 4.36% |
Rate of increase in future compensation levels | 3.13% | 3.14% |
Employee Benefit Plans - Changes in Plan Assets (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Changes in plan assets | ||
Fair value of plan assets at beginning of year | $ 2,043,379 | $ 2,206,479 |
Actual return on plan assets | 427,597 | (86,418) |
Foreign currency exchange rate changes | 9,826 | (18,054) |
Employer contributions | 15,799 | 57,549 |
Plan participants’ contributions | 2,246 | 2,466 |
Benefits paid | (119,789) | (118,643) |
Settlements | (67,831) | 0 |
Fair value of plan assets at end of year | $ 2,311,227 | $ 2,043,379 |
Employee Benefit Plans - Aggregate Benefit Obligation (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Retirement Benefits [Abstract] | ||
Aggregate benefit obligation | $ 298,565 | $ 2,106,348 |
Aggregate fair value of plan assets | $ 39,672 | $ 1,863,245 |
Employee Benefit Plans - Aggregate Accumulated Benefit Obligations (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Retirement Benefits [Abstract] | ||
Aggregate accumulated benefit obligation | $ 270,230 | $ 2,070,183 |
Aggregate fair value of plan assets | $ 39,672 | $ 1,855,714 |
Employee Benefit Plans - Asset Allocations for Funded Pension Plans (Detail) |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocation | 100.00% | |
Actual plan asset allocation | 100.00% | 100.00% |
Defined Benefit Plan, Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocation | 68.00% | |
Actual plan asset allocation | 70.00% | 67.00% |
Debt Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocation | 32.00% | |
Actual plan asset allocation | 30.00% | 33.00% |
Employee Benefit Plans - Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Retirement Benefits [Abstract] | ||
Other long-term asset | $ 73,520 | $ 8,440 |
Other current liability | (11,692) | (9,213) |
Pension and other post-retirement liabilities | (247,201) | (233,891) |
Amounts recognized in consolidated balance sheets | $ (185,373) | $ (234,664) |
Employee Benefit Plans - Amounts Recognized in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Retirement Benefits [Abstract] | ||
Net actuarial loss | $ 952,133 | $ 1,014,794 |
Prior service cost | 9,343 | 5,939 |
Amounts recognized in accumulated other comprehensive loss | $ 961,476 | $ 1,020,733 |
Employee Benefit Plans - Expected Cash Flows for Pension Plans (Detail) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
Employer contribution 2020 (expected) | $ 6,943 |
Expected benefit payments: | |
2020 | 123,033 |
2021 | 130,333 |
2022 | 134,260 |
2023 | 138,539 |
2024 | 141,350 |
2025 through 2029 | $ 737,591 |
Employee Benefit Plans - Components of Net Periodic Benefit (Income) Cost (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Retirement Benefits [Abstract] | |||
Service cost | $ 9,558 | $ 10,410 | $ 8,459 |
Interest cost | 97,441 | 88,247 | 96,651 |
Expected return on plan assets | (154,137) | (154,006) | (155,432) |
Amortization of prior service credit | (67) | (147) | (350) |
Amortization of actuarial loss | 31,000 | 39,721 | 38,034 |
Net periodic benefit income | $ (16,205) | $ (15,775) | $ (12,638) |
Employee Benefit Plans - Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Retirement Benefits [Abstract] | |||
Current year actuarial (gain) loss | $ (33,677) | $ 117,867 | $ (27,672) |
Recognition of actuarial loss | (31,000) | (39,721) | (38,034) |
Current year prior service cost | 3,327 | 0 | 4,768 |
Recognition of prior service credit | 67 | 147 | 350 |
Recognition of curtailment loss | (155) | 0 | 0 |
Other | (50) | 0 | 0 |
Total recognized in other comprehensive (loss) income | (61,488) | 78,293 | (60,588) |
Total recognized in net periodic benefit income and other comprehensive (loss) income | $ (77,693) | $ 62,518 | $ (73,226) |
Employee Benefit Plans - Estimated Amounts Amortized from Accumulated Other Comprehensive Loss (Detail) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
Actuarial loss | $ 44,602 |
Prior service credit | 691 |
Total | $ 45,293 |
Employee Benefit Plans - Assumptions Used in Measuring Net Periodic Benefit (Income) Cost (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Retirement Benefits [Abstract] | |||
Weighted average discount rate | 4.36% | 3.70% | 4.26% |
Rate of increase in future compensation levels | 3.14% | 3.11% | 3.15% |
Expected long-term rate of return on plan assets | 7.12% | 7.14% | 7.80% |
Guarantees (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Guarantor Obligations [Line Items] | ||
Total borrowings of the independents and affiliates subject to guarantee | $ 904,662 | |
Guarantees related to borrowings | 90,000 | $ 78,000 |
Guarantees related to borrowings, other long-term liabilities | $ 90,000 | $ 78,000 |
Minimum | ||
Guarantor Obligations [Line Items] | ||
Guaranteed obligations maturity (in years) | 1 year | |
Maximum | ||
Guarantor Obligations [Line Items] | ||
Guaranteed obligations maturity (in years) | 6 years |
Commitments and Contingencies (Details) $ in Thousands |
Apr. 17, 2017
USD ($)
|
Dec. 31, 2019
USD ($)
lawsuit
|
Dec. 31, 2018
USD ($)
|
---|---|---|---|
Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Amount awarded to other party | $ 81,500 | ||
Judicial Ruling | |||
Loss Contingencies [Line Items] | |||
Amount awarded to other party | $ 77,100 | ||
Product Liability | |||
Loss Contingencies [Line Items] | |||
Number of pending claims | lawsuit | 1,615 | ||
Product liability | $ 146,230 | $ 141,203 |
Acquisitions, Divestitures and Discontinued Operations - Fair Value of the Consideration Transferred (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jul. 01, 2019 |
Dec. 31, 2019 |
Jun. 30, 2019 |
|
Inenco Group | |||
Business Acquisition [Line Items] | |||
Cash | $ 732,142 | ||
Fair value of 35% investment in Inenco held prior to business combination | $ 123,385 | 123,385 | |
Fair value of other investments held prior to business combination | 5,185 | ||
Total | $ 860,712 | ||
Inenco Group | |||
Business Acquisition [Line Items] | |||
Ownership percentage | 35.00% |
Acquisitions, Divestitures and Discontinued Operations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 2,293,519 | $ 2,046,820 | $ 2,071,999 |
Inenco Group | |||
Business Acquisition [Line Items] | |||
Trade accounts receivable | 148,543 | ||
Merchandise inventories | 319,579 | ||
Prepaid expenses and other current assets | 788 | ||
Intangible assets | 340,799 | ||
Deferred tax assets | 1,480 | ||
Property, plant and equipment | 70,958 | ||
Operating lease assets | 127,470 | ||
Other assets | 20,318 | ||
Total identifiable assets acquired | 1,029,935 | ||
Current liabilities | 122,307 | ||
Long-term debt | 164,662 | ||
Operating lease liabilities | 61,626 | ||
Deferred tax liabilities | 67,081 | ||
Other long-term liabilities | 132,187 | ||
Total liabilities assumed | 547,863 | ||
Net identifiable assets acquired | 482,072 | ||
Noncontrolling interests in a subsidiary | (1,600) | ||
Goodwill | 380,240 | ||
Net assets acquired | $ 860,712 |
Acquisitions, Divestitures and Discontinued Operations - Results of Operations for Discontinued Operations (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Business Combinations [Abstract] | |||
Net sales | $ 1,870,071 | $ 1,903,468 | $ 1,912,359 |
Cost of goods sold | 1,413,485 | 1,439,436 | 1,437,436 |
Gross profit | 456,586 | 464,032 | 474,923 |
Operating and non-operating expenses | 476,521 | 383,058 | 396,302 |
Loss (gain) on disposal | 9,048 | 0 | 0 |
Income before income taxes | (28,983) | 80,974 | 78,621 |
Income taxes | (3,593) | 20,034 | 25,647 |
Net (loss) income from discontinued operations | $ (25,390) | $ 60,940 | $ 52,974 |
Acquisitions, Divestitures and Discontinued Operations - Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets | ||
Trade accounts receivable, net | $ 194,903 | $ 216,908 |
Merchandise inventories, net | 387,307 | 397,694 |
Prepaid expenses and other current assets | 132,041 | 115,047 |
Goodwill | 0 | 81,956 |
Other intangible assets, less accumulated amortization | 76,829 | 83,744 |
Operating lease assets | 80,302 | 0 |
Other assets | 91,640 | 74,912 |
Total assets of discontinued operations | 963,022 | 970,261 |
Liabilities | ||
Trade accounts payable | 158,163 | 170,139 |
Other current liabilities | 59,954 | 37,986 |
Long-term liabilities | 68,906 | 3,204 |
Total liabilities of discontinued operations | $ 287,023 | $ 211,329 |
Segment Data - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Segment Reporting [Abstract] | |||
Income (loss) from continuing operations before income taxes, foreign | $ 245,373 | $ 281,687 | $ 193,308 |
Restructuring - Summary of Restructuring Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Restructuring and Related Activities [Abstract] | |||
Restructuring costs | $ 100,023 | ||
Special termination costs | 42,757 | $ 0 | $ 0 |
Total costs incurred in 2019 | 142,780 | ||
Remaining costs expected but not yet incurred | 19,621 | ||
Total costs | $ 162,401 |
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