Genuine Parts Company

04/21/2026 | Press release | Distributed by Public on 04/21/2026 09:53

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying notes contained herein and with the audited Consolidated Financial Statements, accompanying notes, related information and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of results for the year ended December 31, 2026.
Forward-Looking Statements
Some statements in this report, as well as in other materials we file with the Securities and Exchange Commission ("SEC"), release to the public, or make available on our website, constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in the future tense and all statements accompanied by words such as "expect," "likely," "outlook," "forecast," "preliminary," "would," "could," "should," "position," "will," "project," "intend," "plan," "on track," "anticipate," "to come," "may," "possible," "assume," or similar expressions are intended to identify such forward-looking statements. These forward-looking statements include our view of business and economic trends for the remainder of the year and our expectations regarding our ability to capitalize on these business and economic trends and our ability to successfully execute our strategic priorities, including our anticipated separation of Global Automotive and Global Industrial into two independent, publicly traded companies. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking.
We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, changes in general economic conditions, including persistent inflation (including the direct and indirect impact of tariffs and retaliatory tariffs) or deflation, geopolitical uncertainty and unrest (including from the conflict in Iran) and declining consumer confidence; our ability to successfully implement the separation of Global Automotive and Global Industrial and achieve the anticipated benefits of such transaction; volatility in oil prices; significant costs, such as elevated fuel and freight expenses; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our three business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; changes in national and international legislation or government regulations or policies, including changes to global trade regulations, environmental and social policy, infrastructure programs and privacy legislation, and their impact to us, our suppliers and customers; changes in tax policies including those included in the One Big Beautiful Bill Act; volatile exchange rates; our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in its disclosure controls and procedures and internal controls over financial reporting; the uncertainties and costs of litigation; public health emergencies, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, on vehicle miles driven as well as other metrics that affect our business, and on access to capital and liquidity provided by the financial and capital markets; disruptions caused by a failure or breach of our information systems; the success of our global restructuring efforts and the annualized cost savings arising therefrom, as well as other risks and uncertainties discussed in our 2025 Annual Report on Form 10-K and from time to time in our subsequent filings with the SEC.
Forward-looking statements speak only as of the date they are made, and we undertake no duty to update any forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the SEC.
Overview
Genuine Parts Company ("GPC") is a leading global service provider of automotive and industrial replacement parts and value-added solutions. We have a long history of growth and innovation dating back to our founding in Atlanta, Georgia, in 1928. Over nearly a century, we've built a reputation for delivering excellent customer service, profitable growth and strong cash flow generation.
For the three months ended March 31, 2026, we conducted business in North America, Europe and Australasia from more than 10,800 locations. Our Automotive businesses operated in the U.S., Canada, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia and New Zealand and accounted for 63% of total revenues for the three months ended March 31, 2026. Our Industrial business operated in the U.S.,
Canada, Mexico, Australia, New Zealand, Indonesia and Singapore and accounted for 37% of total revenues during this period.
We are focused on being the preferred employer, supplier, and partner while delivering values to our shareholders. This focus drives our strategic financial objectives which are growing revenue in excess of the market, improving operating margins, maintaining a healthy balance sheet, generating strong cash flows, and allocating capital effectively. As we look to the future, we are leaning into modernizing our supply chain and technology through digital innovation, and data-driven strategies to enhance our competitive edge. By optimizing supply chains and leveraging technology, we are empowering our teams with cutting-edge tools to continue our focus on delivering exceptional customer service and driving sustainable growth. At the heart of it all is our commitment to excellence, supported by a culture of continuous improvement and a legacy of strong leadership that has guided us for nearly a century.
Proposed Separation of Automotive and Industrial Businesses
On February 17, 2026, we announced our intention to separate the Company into two independent, publicly traded companies: one comprising our Automotive Parts Group ("Global Automotive") and the other comprising our Industrial Parts Group ("Global Industrial"). The separation is targeted for completion in the first quarter of 2027, subject to certain customary and regulatory conditions.
Key Performance Indicators
We consider a variety of performance and financial measures in assessing our business, and the key performance indicators used to measure our results are Comparable Sales, Gross Profit and Gross Margin, Selling, Administrative and Other Expenses ("SG&A"), Segment EBITDA and Segment EBITDA Margin, and Net Income and EBITDA along with their adjusted measures. For more information regarding our key performance indicators please reference the Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Trends Affecting our Business
We are navigating through several external factors that create uncertainty and volatility in our operating results. These factors, and any changes to these factors, among others, could have a material adverse impact on customer behavior and our future operating results. For additional discussion regarding these external factors and other risks, refer to Risk Factors in Item 1A of Part 1 within our Annual Report on Form 10-K for the year ended December 31, 2025.
Tariffs and Other Trade Policy Matters
We continue to monitor the global trade environment, including the tariffs on merchandise inventories sourced directly or indirectly from several countries, such as China, Canada, and Mexico, and their impact on our operations. During the three months ended March 31, 2026, tariffs continued to drive higher prices to our customers and cost inflation that impacted our gross margin and SG&A expenses. We continue to manage these challenges through strategic pricing and sourcing initiatives, leveraging global supplier relationships and technology tools. We are closely monitoring the recent U.S. Supreme Court decision on February 20, 2026, invalidating certain tariffs imposed under the International Emergency Economic Powers Act. The ultimate impact of this ruling, including whether importers may be entitled to refunds or previously paid tariffs, remains uncertain and subject to further legal proceedings. Our exposure as the importer of record represents less than 0.5% of our total purchases. Accordingly, we have not recorded any adjustments to our financial statements related to potential refunds, as any such amounts would not be material and are not reasonably estimable at this time. We continue to take steps to manage tariff-related cost pressures; however, these actions may not fully offset increased costs in future periods.
Middle East Geopolitical Developments
We are closely monitoring ongoing geopolitical tensions in the Middle East, including the recent conflict involving the United States, Israel and Iran, and related regional instability. Although we have no operations in the Middle East, the ongoing geopolitical conflicts in the region could lead to significant disruption of fuel and energy supplies and increases in global fuel prices, which could heighten inflationary pressures, disrupt global supply chains and adversely impact consumer spending patterns. We will continue to evaluate and take actions to mitigate any potential impacts on our business, results of operations and financial condition. Although the long-term effects remains uncertain, these geopolitical conflicts did not have any material effects on our results of operations for the three months ended March 31, 2026.
Results of Operations
Our performance in the first quarter of 2026 reflects solid sales across our business segments and benefits from our global restructuring initiatives while navigating a challenging operating environment. Our first quarter net sales of $6.3 billion increased 6.8% year-over-year driven by comparable sales growth in our North America and Industrial segments, acquisitions and favorable impacts from foreign currency.
Gross margin continues to improve and increased 20 basis points year-over-year, driven by the continued execution of our strategic pricing and sourcing initiatives.
First quarter net income declined 3.0% year over year due to continued cost inflation in salaries and wages, rent, and freight. In addition we incurred certain nonrecurring costs related to the planned separation of our Global Automotive and Global Industrial businesses, increased restructuring and other costs, and higher depreciation and interest expenses from planned investments.
Our first quarter results of operations are summarized below for the three months ended March 31, 2026 and 2025.
Three Months Ended March 31,
2026 2025
(in thousands) $ % of Sales $ % of Sales $ Change % Change
Net sales $ 6,264,940 100.0 % $ 5,866,069 100.0 % $ 398,871 6.8 %
Cost of goods sold 3,925,976 62.7 % 3,692,385 62.9 % 233,591 6.3 %
Gross profit 2,338,964 37.3 % 2,173,684 37.1 % 165,280 7.6 %
Operating expense:
Selling, administrative and other expenses 1,856,830 29.6 % 1,709,679 29.1 % 147,151 8.6 %
Depreciation and amortization 131,028 2.1 % 115,435 2.0 % 15,593 13.5 %
Provision for doubtful accounts 7,103 0.1 % 5,855 0.1 % 1,248 21.3 %
Restructuring and other costs 57,732 0.9 % 54,770 0.9 % 2,962 5.4 %
Total operating expense 2,052,693 32.8 % 1,885,739 32.1 % 166,954 8.9 %
Non-operating (income) expense:
Interest expense, net 43,953 0.7 % 37,216 0.6 % 6,737 18.1 %
Other (3,075) - % (908) - % (2,167) 238.7 %
Total non-operating (income) expense 40,878 0.7 % 36,308 0.6 % 4,570 12.6 %
Income before income taxes 245,393 3.9 % 251,637 4.3 % (6,244) (2.5) %
Income taxes 56,858 0.9 % 57,245 1.0 % (387) (0.7) %
Net income $ 188,535 3.0 % $ 194,392 3.3 % $ (5,857) (3.0) %
Three Months Ended March 31,
(in thousands, except per share data) 2026 2025 $ Change % Change
Diluted EPS $ 1.37 $ 1.40 $ (0.03) (2.1) %
Adjusted diluted EPS $ 1.77 $ 1.75 $ 0.02 1.1 %
North America Automotive segment EBITDA $ 156,205 $ 146,995 $ 9,210 6.3 %
International segment EBITDA $ 144,845 $ 138,512 $ 6,333 4.6 %
Industrial segment EBITDA $ 314,120 $ 278,711 $ 35,409 12.7 %
Corporate EBITDA $ (119,525) $ (91,125) $ (28,400) 31.2 %
Total adjusted EBITDA $ 495,645 $ 473,093 $ 22,552 4.8 %
North America Automotive segment EBITDA margin 6.6 % 6.5 %
International Automotive segment EBITDA margin 9.1 % 9.9 %
Industrial segment EBITDA margin 13.6 % 12.7 %
Corporate EBITDA margin (1.9) % (1.6) %
Total adjusted EBITDA margin 7.9 % 8.1 %
Net Sales
Net sales increased 6.8% in 2026 due to a 2.4% increase in comparable sales, a 3.1% benefit from favorable impact of foreign currency and other, and a 1.3% benefit from acquisitions. We estimate that comparable sales benefited from approximately 3.0% of price inflation, including tariff related impacts.
North America Automotive net sales were $2.4 billion for the first quarter of 2026, a 4.3% increase from the same period in 2025, primarily driven by a 2.2% increase in comparable sales and a 1.6% increase from acquisitions. Our sales growth within North America Automotive reflected favorable demand trends in company-owned operations. International Automotive net sales were $1.6 billion for the first quarter of 2026, a 13.2% increase from the same period in 2025, driven by 10.6% favorable foreign exchange impact and 2.3% contribution from acquisitions. Industrial net sales were $2.3 billion for the first quarter of 2026, a 5.2% increase from the same period in 2025, primarily driven by a 3.9% increase in comparable sales. Economic activity in the U.S. manufacturing sector, measured by PMI, expanded throughout the first quarter of 2026 which supported sales demand in our Industrial segment.
Gross Profit and Gross Margin
Gross profit increased $165 million, or 7.6%, with gross margin increasing 20 basis points to 37.3% during the first quarter of 2026 compared to the same prior year period. These increases primarily reflect our ongoing pricing and sourcing initiatives, partially offset by the impact of inflation and tariffs on product costs.
Selling, Administrative and Other Expenses
SG&A expenses increased $147 million, or 8.6%, during the first quarter of 2026 compared to the same prior year period. The growth in SG&A expenses was primarily due to inflationary cost pressures affecting salaries and wages, rent and freight and additional operating expenses linked to acquisitions. Additionally, SG&A expenses increased due to foreign currency exchange impacts of approximately $70 million relative to the prior year period. We also incurred costs of $18 million related to the planned separation of our Global Automotive and Global Industrial businesses.
We continue to actively mitigate the impact of the inflationary cost environment through our global restructuring initiatives, which we estimate had a $26 million benefit to SG&A for the three months ended March 31, 2026. In response to sustained cost pressures, we executed targeted cost-control initiatives, including reductions in discretionary travel, limited merit-based compensation adjustments in certain regions, and the strategic deferral of select technology and other projects.
Restructuring and Other Costs
As part of our global restructuring plan, which was approved and initiated in February 2024, we incurred $58 million associated with facility closures and additional severance costs during the first quarter of 2026. For additional details, refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements.
Depreciation and Amortization
Depreciation and amortization expenses increased $16 million related to planned investments in technology and supply chain initiatives.
Non-Operating Expenses and Income
We incurred $41 million in net non-operating expenses during the first quarter of 2026, a $5 million change from $36 million in net non-operating expenses in the prior year period. This category primarily includes net interest expense, investment income, foreign currency gains and losses, and fees associated with our Accounts Receivable Sales Agreement ("A/R Sales Agreement").
Income Taxes
Our effective income tax rates were 23.2% and 22.7% for the first quarter 2026 and 2025, respectively. The rate increase is primarily due to a comparative shift in the mix of earnings across our businesses due to our one-time U.S. pension transaction in 2025 offset by expanded domestic investments.
Net Income, Adjusted Net Income and Segment EBITDA
Net income was $189 million for the first quarter of 2026, a decrease of 3.0% compared to $194 million during the first quarter of 2025. Diluted earnings per share ("EPS") was $1.37 for the first quarter of 2026, down $0.03 compared to $1.40 during the first quarter of 2025. The year over year decline in net income is primarily due to persistent cost inflation, higher depreciation and amortization from ongoing investments, and higher interest expense. This was partially offset by gross margin expansion and benefits from our global restructuring program and cost actions, which are discussed above in more detail.
Adjusted net income was $245 million for the first quarter of 2026, a increase of 0.6% compared to the same prior year period. On a per share basis, adjusted net income was $1.77, an increase of 1.1% compared to $1.75 in the same prior year period.
North America Automotive
North America Automotive EBITDA increased $9 million, or 6.3%, compared to the same period in 2025, and EBITDA margin increased 10 basis points to 6.6% from 6.5%, driven by the following factors. North America Automotive segment sales grew $98 million, or 4.3%, primarily driven by an 2.2% increase in comparable sales and 1.6% benefit from acquisitions. Gross profit increased $41 million or 4.7%, with gross margin expanding 20 basis points, primarily due to our strategic pricing, sourcing initiatives, and acquisitions. These gains were partially offset by continued inflationary pressures on salaries and wages and freight costs, as well as the incremental expenses associated with acquired businesses. The increase in EBITDA margin reflects our gross margin improvement and benefits of our global restructuring and cost control initiatives.
International Automotive
International Automotive EBITDA increased $6 million, or 4.6%, compared to the same prior year period, and EBITDA margin decreased 80 basis points to 9.1%, driven by the following factors. International Automotive segment sales grew $185 million or 13.2% primarily driven by a 10.6% benefit from favorable foreign currency exchange. Sales also benefited from a 2.3% contribution from acquisitions, and a 0.3% increase in comparable sales. Gross profit increased $79 million, or 12.4%, in-line with the increase in sales. Gross margin declined 30 basis points primarily due to the impact of businesses acquired after the first quarter of 2025 that operate at a slightly lower gross margin. Our EBITDA margin declined due to a $73 million increase in operating expenses, driven primarily by inflationary pressures impacting personnel costs, rent and freight, including statutory minimum wage increases in certain jurisdictions. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Industrial
Industrial EBITDA increased 12.7% to $314 million compared to the same prior year period, and EBITDA margin increased 90 basis points year over year to 13.6%, driven by the following factors. Industrial segment sales increased by $115 million or 5.2%, primarily driven by a 3.9% increase in comparable sales and a 1.0% benefit from foreign currency exchange. Gross profit increased $45 million or 6.8%, with gross margin expanding 50 basis points due to the benefits of our strategic pricing and sourcing initiatives. Our effective cost initiatives resulted in a 50 basis point improvement in operating expenses as a percentage of sales compared to the same prior year period.
Corporate EBITDA and Other Segment Reconciling items
Corporate EBITDA primarily reflects costs related to our corporate headquarters' broad support to our business units and other costs that are managed centrally and not allocated to business segments. These include personnel and other costs for company-wide functions such as executive leadership, human resources, technology, cybersecurity, legal, corporate finance, internal audit, and risk management, as well as asbestos-related product liability costs and A/R Sales Agreement fees. Our operational objective is to maintain Corporate EBITDA within a range of 1.5% to 2.0% of net sales.
Corporate EBITDA amounted to a loss of $120 million, or 1.9% of net sales, for the three months ended March 31, 2026, compared to a loss of $91 million, or 1.6% of net sales, for the three months ended March 31, 2025. The increased loss was primarily driven by inflationary pressures impacting personnel costs and health insurance.
Other unallocated costs represent restructuring and other costs, separation costs, and acquisition and integration related costs and other. For the first quarter of 2026, we incurred $58 million of restructuring and other costs and $18 million of separation costs.
EBITDA
EBITDA was $420 million for the three months ended March 31, 2026, an increase of 4.0% from $404 million during the prior year period. Adjusted EBITDA was $496 million in the first quarter of 2026, an increase of 4.8% from $473 million during the prior year period. The increase in adjusted EBITDA was primarily driven by higher technology investments along with costs associated with our global business services initiative, which consolidated certain back-office finance functions at Corporate, allowing us to improve the efficiency of those activities.
Adjusted net income, adjusted diluted EPS, EBITDA and adjusted EBITDA are non-GAAP measures (see table below for reconciliations to the most directly comparable GAAP measures).
Non-GAAP Financial Measures
The following tables set forth reconciliations of net income and diluted EPS to adjusted net income and adjusted diluted EPS, respectively, to account for the impact of adjustments. We also include a reconciliation from net income to adjusted EBITDA. We believe that the presentation of adjusted net income, adjusted diluted EPS, and adjusted EBITDA, which are not calculated in accordance with GAAP, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to both management and investors that is indicative of our core operations. We consider these metrics useful to investors because they provide greater transparency into management's view and assessment of our ongoing operating performance by removing items management believes are not representative of our operations and may distort our longer-term operating trends. For example, for the three months ended March 31, 2026, certain of the non-GAAP metrics contained herein exclude costs relating to our global restructuring initiative and acquisition of acquired independent automotive stores, which are one-time events that do not recur in the ordinary course of business. We believe the non-GAAP metrics included herein also enhance the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not associated with our core operations. We do not, nor do we suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.
Three Months Ended March 31,
(in thousands) 2026 2025
GAAP net income $ 188,535 $ 194,392
Adjustments:
Restructuring and other costs (1) 57,732 54,770
Separation costs (2) 17,539 -
Acquisition and integration related costs and other (3) - 14,035
Total adjustments 75,271 68,805
Tax impact of adjustments (4) (19,255) (20,124)
Adjusted net income $ 244,551 $ 243,073
The table below represents amounts per common share assuming dilution:
Three Months Ended March 31,
(in thousands, except per share data) 2026 2025
GAAP diluted earnings per share $ 1.37 $ 1.40
Adjustments:
Restructuring and other costs (1) 0.42 0.39
Separation costs (2) 0.13 -
Acquisition and integration related costs and other (3) - 0.10
Total adjustments 0.55 0.49
Tax impact of adjustments (4) (0.15) (0.14)
Adjusted diluted earnings per share $ 1.77 $ 1.75
Weighted average common shares outstanding - assuming dilution 138,030 139,200
(1)Amount reflects costs related to our global restructuring initiative which includes employee severance and other termination benefits, and the rationalization and optimization of certain distribution centers, stores and other facilities.
(2)Amount primarily reflects legal and professional services and executive incentive plan costs related to the planned separation of our Global Automotive and Global Industrial businesses that was announced on February 17, 2026 and is targeted for completion in the first quarter of 2027.
(3)Amount primarily reflects lease and other exit costs related to the integration of acquired independent automotive stores.
(4)We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments, including any related valuation allowances. For the three months ended March 31, 2026, we applied the statutory income tax rates to the taxable portion of all of our adjustments, which resulted in a tax impact of $19 million.
The table below represents a reconciliation from GAAP net income to adjusted EBITDA:
Three Months Ended March 31,
(in thousands) 2026 2025
GAAP net income $ 188,535 $ 194,392
Depreciation and amortization 131,028 115,435
Interest expense, net 43,953 37,216
Income taxes 56,858 57,245
EBITDA 420,374 404,288
Total adjustments (1) 75,271 68,805
Adjusted EBITDA $ 495,645 $ 473,093
(1)Amounts are the same as adjustments included within the adjusted net income table above.
The table below clarifies where the adjusted items are presented in the Condensed Consolidated Statements of Income:
Three Months Ended March 31,
(in thousands) 2026 2025
Line item:
Selling, administrative and other expenses $ 17,539 $ 14,035
Restructuring and other costs 57,732 54,770
Total adjustments $ 75,271 $ 68,805
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our financial position and cash flow performance have provided us with the capacity to invest in acquisitions, capital expenditures and technology to support our global growth strategy, as well as return value to our shareholders through dividends. Our sources of capital consist primarily of cash flows from operations, supplemented as necessary by issuing commercial paper, private and public issuances of debt and bank borrowings.
On February 17, 2026, we announced a 3.2% increase to our regular quarterly cash dividend. We have paid a cash dividend every year since going public in 1948, and 2026 marks the 70th consecutive year of increased dividends paid to shareholders.
Currently, we believe that our existing lines of credit, commercial paper program, and cash generated from operations will be sufficient to fund our operations for the foreseeable future, including working capital requirements, strategic acquisitions, dividends, share repurchases, capital expenditures, scheduled debt and interest payments, and income tax obligations.
Cash Flow Activity
For the three months ended March 31, 2026, net cash provided by operating activities was $63.9 million, primarily driven by an improvement in working capital, partly offset by payments related to tax planning initiatives. We also had a $250 million benefit to operating cash flow from our A/R Sales Agreement. Changes in working capital can cause cash from operations to vary significantly period over period depending on factors such as the timing of customer payments, inventory purchases, vendor payments, tax payments, and fluctuations in foreign exchange rates.
During the first quarter of 2026, we also continued to invest in our business through strategic acquisitions and capital expenditures to broaden our product and service offerings, improve our business operations and expand our global footprint. In the first quarter of 2026, we deployed $141.7 million for dividends, $97.6 million for capital expenditures, and $13.8 million for acquisitions. In addition, we had net proceeds of debt of approximately $218.0 million, which includes $263.5 million under our commercial paper program to support these investments.
A summary of our condensed consolidated statements of cash flows is as follows:
Three Months Ended March 31,
(In thousands) 2026 2025 $ Change % Change
Operating activities 63,916 (40,827) $ 104,743 (256.6) %
Investing activities (92,910) (154,818) $ 61,908 40.0 %
Financing activities 56,713 128,742 $ (72,029) 55.9 %
Liquidity and Capital Resources
Our liquidity is supported by cash generated from operating activities and available borrowings. As of March 31, 2026, total liquidity was $1.3 billion, consisting of $500 million in cash and $838 million of available capacity under the company's $2.0 billion Revolving Credit Agreement. This reflects $554 million drawn on the revolver and $607 million outstanding under our commercial paper program. From time to time, we may enter into other credit facilities or financing arrangements to provide additional liquidity and to manage against foreign currency risk.
At March 31, 2026, we had $5.0 billion of total debt outstanding. Approximately $1.3 billion of this debt includes unsecured Senior Notes which contain covenants related to a maximum debt to EBITDA ratio and certain limitations on additional borrowings.
Additionally, we have an A/R Sales Agreement to sell short-term receivables from certain customer trade accounts to the unaffiliated financial institutions on a revolving basis. On January 2, 2026, we amended our A/R Sales Agreement to increase the facility capacity from $1 billion to $1.25 billion and extended the agreement's maturity through January 8, 2027. We also facilitate a voluntary supply chain finance program to provide certain of our suppliers with the opportunity to sell receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. Refer to the AR Sales Agreement Footnote and the Supply Chain Finance Footnote in the Notes to Condensed Consolidated Financial Statements for more information.
We expect to be able to continue to borrow funds at reasonable rates over the long term. At March 31, 2026, our total average cost of debt was 3.98%, and we remain in compliance with all covenants connected with our borrowings. Any failure to comply with our debt covenants or restrictions could result in a default under our financing
arrangements or could require us to obtain waivers from our lenders for failure to comply with these restrictions. The occurrence of a default that remains uncured or the inability to secure a necessary consent or waiver could create cross defaults under other debt arrangements and have a material adverse effect on our business, financial condition, results of operations and cash flows.
Genuine Parts Company published this content on April 21, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 21, 2026 at 15:54 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]