SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-5690
GENUINE PARTS COMPANY
(Exact name of Registrant as specified in its Charter)
GEORGIA 58-0254510
(State of Incorporation) (IRS Employer Identification No.)
|
Registrant's telephone number, including area code: (770) 953-1700.
Securities registered pursuant to Section 12(b) of the Act and the
Exchange on which such securities are registered:
Common Stock, Par Value, $1 Per Share
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment to this Form 10-K. [ ]
The aggregate market value of the Registrant's Common Stock (based upon the closing sales price reported by the New York Stock Exchange and published in The Wall Street Journal for February 10, 2000) held by non-affiliates as of February 10, 2000 was approximately $3,804,984,022.
The number of shares outstanding of Registrant's Common Stock, as of February 10, 2000: 176,801,292
Documents Incorporated by Reference:
- Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 1999, are incorporated by reference into Parts I and II.
- Portions of the definitive proxy statement for the Annual Meeting of
Shareholders to be held on April 17, 2000 are incorporated by reference
into Part III.
PART I.
ITEM I. BUSINESS.
Genuine Parts Company, a Georgia corporation incorporated on May 7, 1928, is a service organization engaged in the distribution of automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials. In 1999, business was conducted throughout most of the United States, in Canada and in Mexico from approximately 1,850 operations. As used in this report, the "Company" refers to Genuine Parts Company and its subsidiaries, except as otherwise indicated by the context; and the terms "automotive parts" and "industrial parts" refer to replacement parts in each respective category.
SEGMENT DATA. The following table sets forth various segment data for the fiscal years 1999, 1998, and 1997 attributable to each of the Company's groups of products that the Company believes indicate segments of its business. Sales to unaffiliated customers are the same as net sales.
1999 1998 1997
---- ---- ----
NET SALES (in thousands)
Automotive Parts $ 4,084,775 $ 3,262,406 $ 3,071,153
Industrial Parts 2,156,134 2,008,789 1,853,270
Office Products 1,218,367 1,122,420 1,080,822
Electrical/Electronic Materials 522,411 220,417 --
------------ ------------ ------------
TOTAL NET SALES $ 7,981,687 $ 6,614,032 $ 6,005,245
============ ============ ============
OPERATING PROFIT
Automotive Parts $ 396,871 $ 343,629 $ 325,188
Industrial Parts 186,203 176,456 166,367
Office Products 118,345 113,821 110,793
Electrical/Electronic Materials 23,343 12,030 --
------------ ------------ ------------
TOTAL OPERATING PROFIT 724,762 645,936 602,348
Interest Expense (41,487) (20,096) (13,365)
Corporate Expense (35,324) (32,186) (26,943)
Equity in Income from Investees (3,675) 3,329 6,730
Goodwill Amortization (12,708) (5,157) (1,624)
Minority Interests (3,501) (2,709) (1,546)
------------ ------------ ------------
INCOME BEFORE INCOME TAXES $ 628,067 $ 589,117 $ 565,600
============ ============ ============
ASSETS
Automotive Parts $ 2,034,417 $ 1,966,774 $ 1,623,644
Industrial Parts 758,206 671,454 584,356
Office Products 503,904 442,220 380,804
Electrical/Electronic Materials 174,258 147,074 --
Corporate Assets 18,588 18,385 18,611
Goodwill and Equity Investments 440,299 354,473 146,948
------------ ------------ ------------
TOTAL ASSETS $ 3,929,672 $ 3,600,380 $ 2,754,363
============ ============ ============
NET SALES
United States $ 7,345,707 $ 6,535,020 $ 5,977,012
Canada 585,504 79,012 28,233
Mexico 50,476 -- --
------------ ------------ ------------
TOTAL NET SALES $ 7,981,687 $ 6,614,032 $ 6,005,245
============ ============ ============
NET LONG-LIVED ASSETS
United States $ 620,837 $ 545,452 $ 412,344
Canada 207,672 187,951 6,495
Mexico 25,333 15,338 15,767
------------ ------------ ------------
TOTAL NET LONG-LIVED ASSETS $ 853,842 $ 748,741 $ 434,606
============ ============ ============
|
(For additional information regarding segment data, see Page 24 of Annual Report to Shareholders for 1999.)
COMPETITION - GENERAL. The distribution business, which includes all segments of the Company's business, is highly competitive with the principal methods of competition being product quality, sufficiency of inventory, price and the ability to give the customer prompt and dependable service. The Company anticipates no decline in competition in any of its business segments in the foreseeable future.
EMPLOYEES. As of December 31, 1999, the Company employed approximately 33,000 persons.
AUTOMOTIVE PARTS GROUP.
The Automotive Parts Group, the largest division of the Company, distributes automotive replacement parts and accessory items. The Company is the largest member of the National Automotive Parts Association ("NAPA"), a voluntary trade association formed in 1925 to provide nationwide distribution of automotive parts. In addition to over 225,000 available part numbers, the Company, in conjunction with NAPA, offers complete inventory, accounting, cataloging, marketing, training and other programs in the automotive aftermarket. The Automotive Parts Group is working to develop additional channels of distribution through two separate, but coordinated, e-commerce initiatives in business-to-consumer and business-to-business markets.
During 1999, the Company's Automotive Parts Group included NAPA automotive parts distribution centers and automotive parts stores ("auto parts stores" or "NAPA AUTO PARTS stores") owned in the United States by Genuine Parts Company; automotive parts distribution centers and auto parts stores in western Canada owned and operated by UAP, a wholly owned subsidiary; auto parts stores in the United States operated by corporations in which Genuine Parts Company owned either a 51% or a 70% interest; distribution centers owned by Balkamp, Inc., a majority-owned subsidiary; rebuilding plants owned by the Company and operated by its Rayloc division; and automotive parts distribution centers and automotive parts stores in Mexico, owned and operated by Grupo Auto Todo, S.A. de C.V. ("Auto Todo"), a company in which a wholly owned subsidiary of Genuine Parts Company owns a 73% interest.
In January, 1999, the Company completed an addition to the Automotive Parts Group with the acquisition of Johnson Industries, Inc. ("Johnson"). Johnson, an independent distributor of ACDelco, Motorcraft, and other automotive supplies, was founded in 1924. During the year, Johnson Industries completed 3 acquisitions. In February 1999, Johnson acquired Uptown Auto Supply, a single branch distribution center in Chicago. Hunt Automotive, with 4 locations throughout California, was added in May 1999. Finally, L&D Enterprises, acquired in June 1999, added 4 distribution centers located in Kansas, Texas and Oklahoma. The Atlanta, Georgia based company has distribution facilities in ten cities throughout the U.S. Johnson stocks 50,000 SKU's and sells primarily to large fleets and new car dealers.
On October 1, 1999, the Company acquired Brittain Brothers, Inc., a long-standing NAPA Distributor headquartered in Oklahoma City, Oklahoma. Serving approximately 178 independently owned NAPA Automotive Parts stores and 14 company owned stores in Oklahoma, Missouri, Arkansas and Texas, Brittain Brothers had annual sales of approximately $60 million. This acquisition provided the Company with the opportunity to develop in a geographical area not previously covered by the Company.
On January 11, 2000, the Company purchased a 15% interest in Mitchell Repair Information ("MRIC"), a subsidiary of Snap-on Incorporated. MRIC is a leading diagnostic and repair information company with over 35,000 North American subscribers linked to its services and information databases. MRIC's core product, "Mitchell ON-DEMAND", is a premier electronic repair information source in the automotive aftermarket.
The Company's NAPA automotive parts distribution centers distribute replacement parts (other than body parts) for substantially all motor vehicle makes and models in service in the United States, including imported vehicles, trucks, buses, motorcycles, recreational vehicles and farm vehicles. In addition, the Company distributes small engines and replacement parts for farm equipment and heavy duty equipment. The Company's inventories also include accessory items for such vehicles and equipment, and supply items used by a wide variety of customers in the automotive aftermarket, such as repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms,
industrial concerns and individuals who perform their own maintenance and parts installation. Although the Company's domestic automotive operations purchase from more than 150 different suppliers, approximately 58% of 1999 automotive inventories were purchased from 10 major suppliers. Since 1931, the Company has had return privileges with most of its suppliers, which has protected the Company from inventory obsolescence.
DISTRIBUTION SYSTEM. In 1999, Genuine Parts Company operated 62 domestic NAPA automotive parts distribution centers located in 38 states and approximately 750 domestic company-owned NAPA AUTO PARTS stores located in 43 states. At December 31, 1999, Genuine Parts Company owned a 51% interest in 81 corporations and a 70% interest in 14 corporations which operated 150 auto parts stores in 31 states.
UAP, founded in 1926, is a Canadian leader in the distribution, marketing, and rebuilding of replacement parts and accessories for automobiles and trucks. UAP has annual sales of approximately $740 million Canadian ($500 million US) and employs approximately 4,950 people. UAP operates a network of 16 distribution centers supplying approximately 616 UAP/NAPA auto parts wholesalers. These include approximately 193 company owned stores, 28 joint venture or progressive owners, and approximately 395 independently owned stores. UAP supplies bannered installers and independent installers in all provinces of Canada, as well as networks of service stations and repair shops operating under the banners of national accounts. UAP is licensed to and uses the NAPA(R) name in Canada.
In Mexico, Auto Todo owns and operates 12 distribution centers and 19 auto parts stores. Auto Todo is licensed to and uses the NAPA(R)name in Mexico.
The Company's distribution centers serve approximately 5,000 independently owned NAPA AUTO PARTS stores located throughout the market areas served. NAPA AUTO PARTS stores, in turn, sell to a wide variety of customers in the automotive aftermarket. Collectively, these independent automotive parts stores account for approximately 25% of the Company's total sales with no automotive parts store or group of automotive parts stores with individual or common ownership accounting for more than 0.3% of the total sales of the Company.
PRODUCTS. Distribution centers have access to over 225,000 different parts and related supply items. Each item is cataloged and numbered for identification and accessibility. Significant inventories are carried to provide for fast and frequent deliveries to customers. Most orders are filled and shipped the same day as received. The majority of sales are on terms which require payment within 30 days of the statement date. The Company does not manufacture any of the products it distributes. The majority of products are distributed under the NAPA(R) name, a mark licensed to the Company by NAPA.
RELATED OPERATIONS. A majority-owned subsidiary of Genuine Parts Company, Balkamp, Inc. ("Balkamp"), distributes a wide variety of replacement parts and accessory items for passenger cars, heavy duty vehicles, motorcycles and farm equipment. In addition, Balkamp distributes service items such as testing equipment, lubricating equipment, gauges, cleaning supplies, chemicals and supply items used by repair shops, fleets, farms and institutions. Balkamp packages many of the approximately 24,000 part numbers which constitute the "Balkamp" line of products which are distributed to the members of NAPA. These products are categorized in 150 different product groups purchased from more than 400 suppliers. In addition to the Balkamp line of products, Balkamp distributes approximately 100 part numbers of nationally branded consumer appearance products through their Automotive Redistribution Center. These products are cataloged separately for convenience for NAPA customers. BALKAMP(R), a federally registered trademark, is important to the sales and marketing promotions of the Balkamp organization. Balkamp has three distribution centers located in Indianapolis, Indiana, Greenwood, Mississippi, and West Jordan, Utah.
The Company, through its Rayloc division, also operates five plants where certain small automotive parts are rebuilt. These products are distributed to the members of NAPA under both the NAPA and Rayloc(R) brand names. Rayloc(R) is a mark licensed to the Company by NAPA.
SEGMENT DATA. In the year ended December 31, 1999, sales from the Automotive Parts Group approximated 51% of the Company's net sales as compared to 49% in 1998 and 51% in 1997.
SERVICE TO NAPA AUTO PARTS STORES. The Company believes that the quality and the range of services provided to its automotive parts customers constitute a significant part of its automotive parts distribution system. Such services include fast and frequent delivery, obsolescence protection, parts cataloging (including the use of computerized NAPA AUTO PARTS catalogs) and stock adjustment through a continuing parts classification system which allows auto parts customers to return certain merchandise on a scheduled basis. The Company offers its NAPA AUTO PARTS store customers various management aids, marketing aids and service on topics such as inventory control, cost analysis, accounting procedures, group insurance and retirement benefit plans, marketing conferences and seminars, sales and advertising manuals and training programs. Point of sale/inventory management is available through TAMS(R) (Total Automotive Management Systems), a computer system designed and developed by the Company for the NAPA AUTO PARTS store.
In association with NAPA, the Company has developed and refined an inventory classification system to determine optimum distribution center and auto parts store inventory levels for automotive parts stocking based on automotive registrations, usage rates, production statistics, technological advances and other similar factors. This system, which undergoes continuous analytical review, is an integral part of the Company's inventory control procedures and comprises an important feature of the inventory management services which the Company makes available to its NAPA AUTO PARTS store customers. Over the last 10 years, losses to the Company from obsolescence have been insignificant, and the Company attributes this to the successful operation of its classification system which involves product return privileges with most of its suppliers.
COMPETITION. In the distribution of automotive parts, the Company competes with automobile manufacturers (some of which sell replacement parts for vehicles built by other manufacturers as well as those which they build themselves), automobile dealers, warehouse clubs and large automotive parts retail chains. In addition, the Company competes with the distributing outlets of parts manufacturers, oil companies, mass merchandisers, including national retail chains, and with other parts distributors and jobbers.
NAPA. The Company is a member of the National Automotive Parts Association, a voluntary association formed in 1925 to provide nationwide distribution of automotive replacement parts. NAPA, which neither buys nor sells automotive parts, functions as a trade association whose members in 1999 operated 69 distribution centers located throughout the United States, 62 of which were owned and operated by the Company. NAPA develops marketing concepts and programs that may be used by its members. It is not involved in the chain of distribution.
Among the automotive lines that each NAPA member purchases and distributes are certain lines designated, cataloged, advertised and promoted as "NAPA" lines. The members are not required to purchase any specific quantity of parts so designated and may, and do, purchase competitive lines from other supply sources.
The Company and the other NAPA members use the federally registered trademark NAPA(R) as part of the trade name of their distribution centers and jobbing stores. The Company contributes to NAPA's national advertising program, which is designed to increase public recognition of the NAPA name and to promote NAPA product lines.
The Company is a party, together with other members of NAPA and NAPA itself, to a consent decree entered by the Federal District Court in Detroit, Michigan, on May 4, 1954. The consent decree enjoins certain practices under the federal antitrust laws, including the use of exclusive agreements with manufacturers of automotive parts, allocation or division of territories among several NAPA members, fixing of prices or terms of sale for such parts among such members, and agreements to adhere to any uniform policy in selecting parts customers or determining the number and location of, or arrangements with, auto parts customers.
INDUSTRIAL PARTS GROUP.
The Industrial Parts Group distributes industrial replacement parts and related supplies throughout the United States, Canada and Mexico. This Group distributes industrial bearings and power transmission equipment replacement parts, including hydraulic and pneumatic products, material handling components, agricultural and irrigation equipment and their related supplies. The Group is continuing to enhance their internet-based procurement solutions.
In 1999, the Company distributed industrial parts in the United States through Motion Industries, Inc. ("Motion"), headquartered in Birmingham, Alabama. Motion is a wholly owned subsidiary of the Company. In Canada, industrial parts are distributed by another of Motion's operating divisions, Motion Industries (Canada), Inc. ["Motion (Canada)"], comprised of the former Oliver Industrial Supply Ltd. and Premier Industrial Division of UAP Inc., both wholly owned subsidiaries of Genuine Parts Holdings Ltd., which is a wholly owned subsidiary of the Company. Motion (Canada)'s service area includes seven provinces of Alberta, British Columbia, Manitoba, Newfoundland, Ontario, Quebec, and Saskatchewan. In Mexico, industrial parts are distributed by another operating division, Motion Industries (Mexico) ["Motion (Mexico)"], through a joint venture with power transmission specialist Refacciones Industriales de Mexico (RIMSA) located in Mexico City and a new branch in Juarez.
In 1999 the Industrial Group expanded its Canadian operations through the acquisition of Lou's Bearings and Transmission LTD with five locations in Ontario; CHV Hydraulics with its respective nine locations in Canada, which includes the Air Max Division; and B.G.S. Bearings and Equipment LTD with four additional locations in Ontario. Motion Industries expanded its presence in Pennsylvania, Maryland, New Jersey, and New York with the January acquisition of Bush-Miller, Inc. with its five locations, and the September and October acquisitions of John M. Forster's mechanical power transmission division with three locations and Eastern Bearing Company with seven locations. Additionally, Motion opened 33 new branch locations throughout the United States, Canada and Mexico in 1999.
As of December 31, 1999, the Group served more than 165,000 customers in all types of industries located throughout the United States, Mexico and Canada.
DISTRIBUTION SYSTEM. In North America, the Industrial Parts Group operates 499 locations including: seven distribution centers, three re-distribution centers, and 52 service centers for fluid power, electrical and special hose applications. The distribution centers stock and distribute more than 200,000 different items purchased from more than 250 different suppliers. The Group's re-distribution centers serve as collection points for excess inventory collected from its branches for re-distribution to those branches that need the inventory. Approximately 64% of 1999 total industrial purchases were made from 10 major suppliers. Sales are generated from the Group's branches located in 47 states, seven provinces in Canada, and two cities in Mexico. Each branch has warehouse facilities that stock significant amounts of inventory representative of the lines of products used by customers in the respective market area served.
Motion (Canada) operates an industrial parts and agricultural supply distribution center for the 41 Canadian locations serving industrial and agricultural markets. Motion (Canada) also distributes irrigation systems and related supplies.
PRODUCTS. The Industrial Parts Group distributes a wide variety of products to its customers, primarily industrial concerns, to maintain and operate plants, machinery and equipment. Products include such items as hoses, belts, bearings, pulleys, pumps, valves, chains, gears, sprockets, speed reducers and electric motors. The nature of this Group's business demands the maintenance of large inventories and the ability to provide prompt and demanding delivery requirements. Virtually all of the products distributed are installed by the customer. Most orders are filled immediately from existing stock and deliveries are normally made within 24 hours of receipt of order. The majority of all sales are on open account.
RELATED INFORMATION. Non-exclusive distributor agreements are in effect with most of the Group's suppliers. The terms of these agreements vary; however, it has been the experience of the Group that the custom of the
trade is to treat such agreements as continuing until breached by one party, or until terminated by mutual consent.
INTEGRATED SUPPLY. Motion's integrated supply solutions continued to gain momentum in 1999. Motion's integrated supply process not only reduces the costs associated with MRO (Maintenance, Repair and Operation) inventory management, but also enables the manufacturing customer to focus on its core competency, free working capital associated with inventories, improve service levels to end-users, and allow management to focus on more strategic concerns. Motion's integrated supply process analyzes a customer's current operation to develop integration goals and then provides solutions based on industry's accepted best practices.
SEGMENT DATA. In the year ended December 31, 1999, sales from the Company's Industrial Parts Group approximated 27% of the Company's net sales as compared to 31% in 1998 and 31% in 1997.
COMPETITION. The Industrial Parts Group competes with other distributors specializing in the distribution of such items, general line distributors and others who have developed or joined integrated supply programs. To a lesser extent, the Group competes with manufacturers that sell directly to the customer.
OFFICE PRODUCTS GROUP.
The Office Products Group, operated through S. P. Richards Company ("S. P. Richards"), a wholly owned subsidiary of the Company, is headquartered in Atlanta, Georgia. S. P. Richards is engaged in the wholesale distribution of a broad line of office and other products which are used in the daily operation of businesses, schools, offices and institutions. Office products fall into the general categories of computer supplies, imaging supplies, office machines, general office supplies, janitorial supplies, breakroom supplies, and office furniture. Horizon USA Data Supplies, Inc., acquired by the Company in 1995, is a computer supplies distributor headquartered in Reno, Nevada. The Office Products Group is developing several web-based products to benefit resellers, manufacturers and consumers.
In August 1998, the Company completed the purchase of the Canada based Norwestra Sales (1992), Inc. Norwestra, with its headquarters near Vancouver, British Columbia, services office product resellers throughout Western Canada. During 1999, the Company opened a second Norwestra branch in Toronto, Canada.
The Office Products Group distributes computer supplies including diskettes, printer supplies, printout paper and printout binders; office furniture to include desks, credenzas, chairs, chair mats, partitions, files and computer furniture; office machines to include telephones, answering machines, calculators, typewriters, shredders and copiers; and general office supplies to include copier supplies, desk accessories, business forms, accounting supplies, binders, report covers, writing instruments, note pads, envelopes, secretarial supplies, mailroom supplies, filing supplies, art/drafting supplies, janitorial supplies, breakroom supplies and audio visual supplies.
The Office Products Group distributes more than 20,000 items to over 6,000 office supply dealers from 43 facilities located in 28 states and Western Canada. Approximately 59% of 1999 total office products purchases were made from 10 major suppliers.
The Office Products Group sells to resellers of office products. Customers are offered comprehensive marketing programs, which include flyers, other promotional material and personalized product catalogs. The marketing programs are supported by all the Group's distribution centers which stock all cataloged products and have the capability to provide overnight delivery.
While many recognized brand-name items are carried in inventory, S. P. Richards also markets items produced for it under its own SPARCO(R) brand name, as well as its NATURE SAVER(R) brand of recycled products, elite image(TM) printer supplies and CompuCessory(TM) brand of computer supplies and accessories.
SEGMENT DATA. In the year ended December 31, 1999, sales from the Company's Office Products Group approximated 15% of the Company's net sales as compared to 17% in 1998 and 18% in 1997.
COMPETITION. In the distribution of office supplies to retail dealers, S. P. Richards competes with many other wholesale distributors as well as with manufacturers of office products and large national retail chains.
ELECTRICAL/ELECTRONIC MATERIALS GROUP.
The Electrical/Electronic Materials Group was formed on July 1, 1998 through the acquisition of EIS, Inc. ("EIS"). This Group distributes materials for the manufacture and repair of electrical and electronic apparatus. With branch locations in 38 cities nationwide and in Mexico, this Group stocks over 100,000 items, from insulating and conductive materials to assembly tools and test equipment. This Group also has three manufacturing facilities that provide custom fabricated parts and one manufacturing plant that produces printed circuit board drillroom products. The Electrical/Electronic Materials Group is an important single source to original equipment manufacturers, repair shops, the electronic assembly market, and printed circuit board manufacturers. EIS is developing a customizable internet ordering system for electronic assembly customers.
In 1999, the Company distributed electrical materials through EIS, headquartered in Atlanta, Georgia. Electronic materials were distributed through EIS's operating divisions, Com-Kyl, headquartered in Fremont, CA, and Circuit Supply, headquartered in San Francisco, CA.
In January 1999, the Company completed acquisitions of H. A. Holden, Inc. ("Holden"), and Summit Insulation Supply ("Summit"). Holden, a national distributor of materials and parts to the motor repair industry, has distribution facilities in Atlanta, GA; Charlotte, NC; Philadelphia, PA; Houston, TX; Sacramento, CA; Denver, CO; and Miami, FL. Summit, a regional distributor and fabricator of electrical insulation materials to manufacturers of transformers and electric motors, is headquartered in Memphis, TN, and serves 20-30 large original equipment manufacturers in the Southeast. Summit also has a small location in Harlingen, TX, which services Mexico. The Group has a strategy to continue to "roll up" its markets and consolidate the service base for the benefit of both EIS customers and suppliers and plans to make future acquisitions within the markets the Group serves.
PRODUCTS. The Electrical/Electronic Materials Group distributes a wide variety of products to customers from over 400 vendors. Products include such items as magnet wire, copper clad laminate, conductive materials, insulating and shielding materials, assembly tools, test equipment, adhesives and chemicals, pressure sensitive tapes, solder, anti-static products, and thermal management products. To meet the prompt delivery demands of its customers, this Group maintains large inventories. The majority of sales are on open account. Approximately 67% of 1999 total Electrical/Electronic Materials Group purchases were made from 10 major suppliers.
INTEGRATED SUPPLY. The Electrical/Electronic Materials Group's integrated supply programs are expected to grow in 2000, as a greater number of customers--especially national accounts--are given the opportunity to participate in this low-cost, high-service capability. Over the past year, the Group developed AIMS (Advanced Inventory Management System), a totally integrated, highly automated solution for inventory management. This year AIMS will be added to the Group's Integrated Supply offering. This bar code driven system is a cost effective alternative to the traditional labor intensive inventory management process.
SEGMENT DATA. In the year ended December 31, 1999 sales from the Company's Electrical/Electronic Materials Group approximated 7% of the Company's sales, as compared to 3% in 1998.
COMPETITION. The Electrical/Electronic Materials Group competes with other distributors specializing in the distribution of electrical and electronic products, general line distributors, and, to a lesser extent, manufacturers that sell directly to customers.
* * * * * * * * * *
EXECUTIVE OFFICERS OF THE COMPANY. The table below sets forth the name and age of each person deemed to be an executive officer of the Company as of February 10, 2000, the position or office held by each and the period during which each has served as such. Each executive officer is elected by the Board of Directors and serves at the pleasure of the Board of Directors until his successor has been elected and has qualified, or until his earlier death, resignation, removal, retirement or disqualification.
YEAR FIRST ASSUMED
NAME AGE POSITION OF OFFICE POSITION
---- --- ------------------ --------
Larry L. Prince 61 Chairman of the Board of Directors and 1990/1989
Chief Executive Officer
Thomas C. Gallagher 52 President and Chief Operating Officer 1990
Robert J. Breci 64 Executive Vice President 1987
George W. Kalafut 65 Executive Vice President 1991
Jerry W. Nix 54 Executive Vice President -- Finance * 2000
Edward Van Stedum 50 Senior Vice President -- Human Resources 1996
|
* Also serves as the Company's Principal Financial and Accounting Officer.
All executive officers have been employed by and have served as officers of the Company for at least the last five years.
ITEM 2. PROPERTIES.
The Company's headquarters are located in one of two adjacent office buildings owned by Genuine Parts Company in Atlanta, Georgia.
The Company's Automotive Parts Group currently operates 62 NAPA Distribution Centers in the United States distributed among eight geographic divisions. Approximately 90% of the distribution center properties are owned by the Company. At December 31, 1999, the Company owned approximately 750 NAPA AUTO PARTS stores located in 43 states, and the Company owned either a 51% or 70% interest in 180 additional auto parts stores located in 31 states. Other than NAPA AUTO PARTS stores located within Company owned distribution centers, most of the automotive parts stores in which the Company has an ownership interest were operated in leased facilities. In addition, UAP operated 16 distribution centers and approximately 221 automotive parts stores in Canada. The Company's Automotive Parts Group also operates three Balkamp distribution centers and one redistribution center, five Rayloc rebuilding plants, and two transfer and shipping facilities.
The Company's Industrial Parts Group, operating through Motion and Motion (Canada), operates 7 distribution centers, 3 redistribution centers, 52 service centers and 444 branches. Approximately 90% of these branches are operated in leased facilities.
The Company's Office Products Group operates 41 facilities in the United States and 2 facilities in Canada distributed among the Group's five geographic divisions. Approximately 75% of these facilities are operated in leased buildings.
The Company's Electrical/Electronic Materials Group operates in 38 cities in the United States and 2 cities in Mexico. All of this Group's 42 facilities are operated in leased buildings except three facilities, which are owned.
For additional information regarding rental expense on leased properties, see "Note 5 of Notes to Consolidated Financial Statements" on Page 30 of Annual Report to Shareholders for the year ended December 31, 1999.
ITEM 3. LEGAL PROCEEDINGS.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information required by this item is set forth under the heading "Market and Dividend Information" on Page 21 of Annual Report to Shareholders for the year ended December 31, 1999, and is incorporated herein by reference. The Company has made no unregistered sales of securities during the year ended December 31, 1999.
ITEM 6. SELECTED FINANCIAL DATA.
Information required by this item is set forth under the heading "Selected Financial Data" on Page 21 of Annual Report to Shareholders for the year ended December 31, 1999, and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Information required by this item is set forth under the heading "Management's Discussion and Analysis" on Pages 22 and 23 of Annual Report to Shareholders for the year ended December 31, 1999, and is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOVE MARKET RISK.
The information presented under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 22 and 23 and presented under "Note 3 -- Credit Facilities" on Pages 29 and 30 of the Company's Annual Report to Shareholders for the year ended December 31, 1999 is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required by this item is set forth in the consolidated financial statements on Pages 24 through 33, in "Report of Independent Auditors" on Page 20, and under the heading "Quarterly Results of Operations" on Page 23, of Annual Report to Shareholders for the year ended December 31, 1999, and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information required by this item is set forth under the headings "Nominees for Director" and "Members of the Board of Directors Continuing in Office" on Pages 2 and 3 of the definitive proxy statement for the Company's Annual Meeting to be held on April 17, 2000, and is incorporated herein by reference. Certain information about Executive Officers of the Company is included in Item 1 of Part I of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Information required by this item is set forth under the heading "Executive Compensation and Other Benefits" on Pages 8 through 10, and under the headings "Compensation Committee Interlocks and Insider Participation", "Compensation Pursuant to Plans" and "Termination of Employment and Change of Control Arrangements" on Pages 12 through 16 of the definitive proxy statement for the Company's Annual Meeting to be held on April 17, 2000, and is incorporated herein by reference. In no event shall the information contained in the definitive proxy statement for the Company's 2000 Annual Meeting on Pages 10 through 12 under the heading "Compensation and Stock Option Committee Report on Executive Compensation" or on Pages 17 and 18 under the heading "Performance Graph" be incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this item is set forth under the headings "Common Stock Ownership of Certain Beneficial Owners" and "Common Stock Ownership of Management" on Pages 5 through 7 of the definitive proxy statement for the Company's Annual Meeting to be held on April 17, 2000, and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this item is set forth under the heading "Certain Relationships and Related Transactions" on Page 18 of the definitive proxy statement for the Company's 2000 Annual Meeting to be held on April 17, 2000, and is incorporated herein by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) (1) and (2) The response to this portion of Item 14 is submitted as a separate section of this report.
(3) The following Exhibits are filed as part of this
report in Item 14(c):
Exhibit 3.1. Restated Articles of Incorporation of the
Company, dated as of April 18, 1998, and as
amended April 17, 1989 and amendments to
the Restated Articles of Incorporation of
the Company, dated as of November 20, 1989
and April 18, 1994. (Incorporated herein by
reference from the Company's Annual Report
on Form 10-K, dated March 3, 1995.)
Exhibit 3.2 By-laws of the Company, as amended.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 3, 1995.)
Exhibit 4.1 Shareholder Protection Rights Agreement,
dated as of November 15, 1999, between the
Company and SunTrust Bank, Atlanta, as
Rights Agent. (Incorporated herein by
reference from the Company's Report on Form
8-K, dated November 15, 1999.)
Exhibit 4.2 Specimen Common Stock Certificate.
(Incorporated herein by reference from the
Company's Registration Statement on Form
S-1, Registration No. 33-63874.)
|
Instruments with respect to long-term debt where the total amount of securities authorized thereunder does not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis have not been filed. The Registrant agrees to furnish to the Commission a copy of each such instrument upon request.
Exhibit 10.1 * 1988 Stock Option Plan. (Incorporated
herein by reference from the Company's
Annual Meeting Proxy Statement, dated March
9, 1988.)
Exhibit 10.2 * Form of Amendment to Deferred Compensation
Agreement, adopted February 13, 1989,
between the Company and certain executive
officers of the Company. (Incorporated
herein by reference from the Company's
Annual Report on Form 10-K, dated March 15,
1989.)
Exhibit 10.3 * Form of Agreement adopted February 13,
1989, between the Company and certain
executive officers of the Company providing
for a supplemental employee benefit upon a
change in control of the Company.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 15, 1989.)
Exhibit 10.4 * Genuine Parts Company Supplemental
Retirement Plan, effective January 1, 1991.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 8, 1991.)
Exhibit 10.5 * 1992 Stock Option and Incentive Plan,
effective April 20, 1992. (Incorporated
herein by reference from the Company's
Annual Meeting Proxy Statement, dated March
6, 1992.)
Exhibit 10.6 * Restricted Stock Agreement dated March 31,
1994, between the Company and Larry L.
Prince. (Incorporated herein by reference
from the Company's Form 10-Q, dated May 6,
1994.)
Exhibit 10.7 * Restricted Stock Agreement dated March 31,
1994, between the Company and Thomas C.
Gallagher. (Incorporated herein by
reference from the Company's Form 10-Q,
dated May 6, 1994.)
Exhibit 10.8 * The Genuine Parts Company Restated
Tax-Deferred Savings Plan, effective
January 1, 1993. (Incorporated herein by
reference from the Company's Annual Report
on Form 10-K, dated March 3, 1995.)
Exhibit 10.9 * Amendment No. 2 to the Genuine Parts
Company Supplemental Retirement Plan,
effective January 1, 1995. (Incorporated
herein by reference from the Company's
Annual Report on Form 10-K, dated March 3,
1995.)
Exhibit 10.10 * Genuine Partnership Plan, as amended and
restated January 1, 1994. (Incorporated
herein by reference form the Company's
Annual Report on Form 10-K, dated March 3,
1995.)
Exhibit 10.11 * Genuine Parts Company Pension Plan, as
amended and restated effective January 1,
1989. (Incorporated herein by reference
from the Company's Annual Report on Form
10-K, dated March 3, 1995.)
Exhibit 10.12 * Amendment No. 1 to the Genuine Partnership
Plan, effective September 1, 1995.
(Incorporated herein by reference to the
Company's Form 10-K, dated March 7, 1996.)
Exhibit 10.13 * Amendment No. 1 to the Genuine Parts
Company Pension Plan, effective April 1,
1995. (Incorporated herein by reference to
the Company's Form 10-K, dated March 7,
1996.)
|
Exhibit 10.14 * Amendment No. 2 to the Genuine Parts
Company Pension Plan, dated September 28,
1995, effective January 1, 1995.
(Incorporated herein by reference to the
Company's Form 10-K, dated March 7, 1996.)
Exhibit 10.15 * Genuine Parts Company Directors' Deferred
Compensation Plan, effective November 1,
1996. (Incorporated herein by reference to
the Company's Form 10-K, dated March 10,
1997.)
Exhibit 10.16 * Amendment No. 3 to the Genuine Parts
Company Pension Plan dated May 24, 1996,
effective January 1, 1996. (Incorporated
herein by reference to the Company's Form
10-K, dated March 10, 1997.)
Exhibit 10.17 * Amendment No. 4 to the Genuine Parts
Company Pension Plan dated December 3,
1996, effective January 1, 1996.
(Incorporated herein by reference to the
Company's Form 10-K, dated March 10, 1997.)
Exhibit 10.18 * Amendment No. 2 to the Genuine Partnership
Plan, dated December 3, 1996, effective
November 1, 1996. (Incorporated herein by
reference to the Company's Form 10-K, dated
March 10, 1997.)
Exhibit 10.19 * Amendment No. 4-A to the Genuine Parts
Company Pension Plan, dated August 29,
1997, effective January 1, 1996.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 10, 1998.)
Exhibit 10.20 * Amendment No. 5 to the Genuine Parts
Company Pension Plan, dated August 7, 1997.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 10, 1998.)
Exhibit 10.21 * Amendment No. 6 to the Genuine Parts
Company Pension Plan, dated October 6,
1997, effective January 1, 1997.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 10, 1998.)
Exhibit 10.22 * Amendment No. 3 to the Genuine Partnership
Plan, dated August 7, 1997. (Incorporated
herein by reference from the Company's
Annual Report on Form 10-K, dated March 10,
1998.)
Exhibit 10.23 * Amendment No. 3 to the Genuine Parts
Company Supplemental Retirement Plan, dated
August 29, 1997, effective August 15, 1997.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 10, 1998.)
Exhibit 10.24 * Genuine Parts Company Death Benefit Plan,
effective July 15, 1997. (Incorporated
herein by reference from the Company's
Annual Report on Form 10-K, dated March 10,
1998.)
Exhibit 10.25 * Amendment No. 4 to the Genuine Partnership
Plan, dated August 19, 1998, effective
January 1, 1998. (Incorporated herein by
reference from the Company's Annual Report
on Form 10-K, dated March 10, 1999.)
Exhibit 10.26 * Amendment No. 5 to the Genuine Partnership
Plan, dated December 7, 1998, effective
January 1, 1999. (Incorporated herein by
reference from the Company's Annual Report
on Form 10-K, dated March 10, 1999.)
|
Exhibit 10.27 * Amendment No. 6 to the Genuine Partnership
Plan, dated December 7, 1998, effective
January 1, 1994. (Incorporated herein by
reference from the Company's Annual Report
on Form 10-K, dated March 10, 1999.)
Exhibit 10.28 * Amendment No. 7 to the Genuine Parts
Company Pension Plan, dated August 19,
1998, effective January 1, 1998.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 10, 1999.)
Exhibit 10.29 * Genuine Parts Company 1999 Long-Term
Incentive Plan. (Incorporated herein by
reference from the Company's Annual Report
on Form 10-K, dated March 10, 1999.)
Exhibit 10.30 * Genuine Parts Company 1999 Annual Incentive
Bonus Plan, effective April 19, 1995.
(Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated
March 10, 1999.)
Exhibit 10.31 * Restricted Stock Agreement dated February
25, 1999, between the Company and Larry L.
Prince. (Incorporated herein by reference
from the Company's Form 10-Q, dated May 3,
1999.)
Exhibit 10.32 * Restricted Stock Agreement dated February
25, 1999, between the Company and Thomas C.
Gallagher. (Incorporated herein by
reference from the Company's Form 10-Q,
dated May 3, 1999.)
Exhibit 10.33 * Amendment No. 8 to the Genuine Parts
Company Pension Plan, dated January 26,
1999, effective September 30, 1998.
Exhibit 10.34 * Amendment No. 9 to the Genuine Parts
Company Pension Plan, dated December 30,
1999, effective January 1, 1989; December
31, 1999; and January 1, 2000.
Exhibit 10.35 * Amendment to the Genuine Parts Company 1992
Stock Option and Incentive Plan, dated
April 19, 1999, effective April 19, 1999.
Exhibit 10.36 * Amendment to the Genuine Parts Company
Tax-Deferred Savings Plan, dated April 19,
1999, effective April 19, 1999.
Exhibit 10.37 * Amendment to the Genuine Parts Company
Original Deferred Compensation Plan, dated
April 19, 1999, effective April 19, 1999.
Exhibit 10.38 * Amendment to the Genuine Parts Company
Directors' Deferred Compensation Plan,
dated April 19, 1999, effective April 19,
1999.
Exhibit 10.39 * Amendment to the Genuine Parts Company
Supplemental Retirement Plan, dated April
19, 1999, effective April 19, 1999.
Exhibit 10.40 * Amendment No. 7 to the Genuine Partnership
Plan, dated January 26, 1999, effective
January 1, 1999.
Exhibit 10.41 * Amendment No. 8 to the Genuine Partnership
Plan, dated February 4, 1999, effective
January 1, 1999.
Exhibit 10.42 * Amendment No. 9 to the Genuine Partnership
Plan, dated April 5, 1999, effective April
1, 1999.
|
Exhibit 10.43 * Amendment No. 10 to the Genuine Partnership
Plan, dated December 30, 1999, effective
November 30, 1999.
|
* Indicates executive compensation plans and arrangements.
Exhibit 13 The following sections and pages of the
1999 Annual Report to Shareholders:
- Selected Financial Data on Page 21
- Market and Dividend Information on Page
21
- Management's Discussion and Analysis on
Pages 22-23
- Quarterly Results of Operations on Page
23
- Segment Data on Page 24
- Report of Independent Auditors on Page 20
- Consolidated Financial Statements and
Notes to Consolidated Financial Statements
on Pages 25-33.
Exhibit 21 Subsidiaries of the Company
Exhibit 23 Consent of Independent Auditors
Exhibit 27 Financial Data Schedule
|
(b) Reports on Form 8-K. The Company filed a Report on Form 8-K, dated November 15, 1999, reporting under Item 5 and Item 7 thereof certain information to describe the approval, by the Board of Directors, of a Shareholders' Rights Plan replacing a similar plan adopted in 1989, which expired on November 20, 1999. A full copy of the Shareholder Protection Rights Agreement, dated November 15, 1999 between Genuine Parts Company and SunTrust Bank, Atlanta, as Rights Agent, was included under Item 7 of the Form 8-K. The adoption of this plan was disclosed in a press release dated November 15, 1999, which was also included under Item 7 of the Form 8-K.
(c) Exhibits. The response to this portion of Item 14 is submitted as a separate section of this report.
(d) Financial Statement Schedules. The response to this portion of Item 14 is submitted as a separate section of this report.
SIGNATURES.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
GENUINE PARTS COMPANY
/S/ LARRY L. PRINCE 3/10/00 /S/ JERRY W. NIX 3/10/00 ------------------------------------------- --------------------------------------------------- LARRY L. PRINCE (Date) JERRY W. NIX (Date) Chairman of the Board Executive Vice President - Finance and Chief Executive Officer (Principal Financial and Accounting Officer) |
Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/S/ RICHARD W. COURTS II 2/21/00 /S/ BRADLEY CURREY, JR. 2/21/00
------------------------------------------------- ----------------------------------------------------
RICHARD W. COURTS II (Date) BRADLEY CURREY, JR. (Date)
Director Director
/S/ JEAN DOUVILLE 2/21/00 /S/ ROBERT P. FORRESTAL 2/21/00
------------------------------------------------- ----------------------------------------------------
JEAN DOUVILLE (Date) ROBERT P. FORRESTAL (Date)
Director Director
/S/ THOMAS C. GALLAGHER 2/21/00 /S/ STEPHEN R. KENDALL 2/21/00
------------------------------------------------- ----------------------------------------------------
THOMAS C. GALLAGHER (Date) STEPHEN R. KENDALL (Date)
Director Director
President and Chief Operating Officer
/S/ J. HICKS LANIER 2/21/00 /S/ LARRY L. PRINCE 2/21/00
------------------------------------------------- ----------------------------------------------------
J. HICKS LANIER LARRY L. PRINCE (Date)
Director Director
Chairman of the Board and Chief Executive Officer
/S/ ALANA S. SHEPHERD 2/21/00 /S/ LAWRENCE G. STEINER 2/21/00
------------------------------------------------- ----------------------------------------------------
ALANA S. SHEPHERD (Date) LAWRENCE G. STEINER (Date)
Director Director
/S/ JAMES B. WILLIAMS 2/21/00
-------------------------------------------------
JAMES B. WILLIAMS (Date)
Director
|
ANNUAL REPORT ON FORM 10-K
ITEM 14(A)(1) AND (2), (C) AND (D)
LIST OF FINANCIAL STATEMENTS
CERTAIN EXHIBITS
YEAR ENDED DECEMBER 31, 1999
GENUINE PARTS COMPANY
ATLANTA, GEORGIA
Form 10-K - Item 14(a)(1) and (2)
Genuine Parts Company and Subsidiaries
Index of Financial Statements
The following consolidated financial statements of Genuine Parts Company and subsidiaries, included in the annual report of the registrant to its shareholders for the year ended December 31, 1999, are incorporated by reference in Item 8:
Consolidated balance sheets - December 31, 1999 and 1998
Consolidated statements of income - Years ended December 31, 1999, 1998, and 1997
Consolidated statements of cash flows - Years ended December 31, 1999, 1998 and 1997
Notes to consolidated financial statements - December 31, 1999
The following consolidated financial statement schedule of Genuine Parts Company and subsidiaries is included in Item 14(d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
ANNUAL REPORT ON FORM 10-K
ITEM 14(A)(3)
LIST OF EXHIBITS
The following Exhibits are filed as a part of this Report:
10.33* Amendment No. 8 to the Genuine Parts Company Pension Plan, dated
January 26, 1999, effective September 30, 1998.
10.34* Amendment No. 9 to the Genuine Parts Company Pension Plan, dated
December 30, 1999, effective January 1, 1989; December 31, 1999; and
January 1, 2000.
10.35* Amendment to the Genuine Parts Company 1992 Stock Option and Incentive
Plan, dated April 19, 1999, effective April 19, 1999.
10.36* Amendment to the Genuine Parts Company Tax-Deferred Savings Plan,
dated April 19, 1999, effective April 19, 1999.
10.37* Amendment to the Genuine Parts Company Original Deferred Compensation
Plan, dated April 19, 1999, effective April 19, 1999.
10.38* Amendment to the Genuine Parts Company Directors' Deferred
Compensation Plan, dated April 19, 1999, effective April 19, 1999.
10.39* Amendment to the Genuine Parts Company Supplemental Retirement Plan,
dated April 19, 1999, effective April 19, 1999.
10.40* Amendment No. 7 to the Genuine Partnership Plan, dated January 26,
1999, effective January 1, 1999.
10.41* Amendment No. 8 to the Genuine Partnership Plan, dated February 4,
1999, effective January 1, 1999.
10.42* Amendment No. 9 to the Genuine Partnership Plan, dated April 5, 1999,
effective April 1, 1999.
10.43* Amendment No. 10 to the Genuine Partnership Plan, dated December 30,
1999, effective November 30, 1999.
13 The following Sections and Pages of Annual Report to Shareholders for
|
1999:
- Selected Financial Data on Page 21
- Market and Dividend Information on Page 21
- Management's Discussion and Analysis on Pages 22 and 23
- Quarterly Results of Operations on Page 23
- Segment Data on Page 24
- Report of Independent Auditors on Page 20
- Consolidated Financial Statements and Notes to Consolidated
Financial Statements on Pages 24-33
21 Subsidiaries of the Company
23 Consent of Independent Auditors
27 Financial Data Schedule (for SEC use only.)
The following Exhibits are incorporated by reference as set forth in Item 14 on pages 11-14 of this Form 10-K:
- 3.1 Restated Articles of Incorporation of the Company, dated as of April 18, 1988, and as amended April 17, 1989 and amendments to the Restated Articles of Incorporation of the Company, dated as of November 20, 1989 and April 18, 1994.
- 3.2 By-laws of the Company, as amended.
- 4.1 Shareholder Protection Rights Agreement, dated as of November 15, 1999, between the Company and SunTrust Bank, Atlanta, as Rights Agent.
- 4.2 Specimen Common Stock Certificate. (Incorporated herein by reference form the Company's Registration Statement on Form S-1, Registration No. 33-63874).
Instruments with respect to long-term debt where the total amount of securities authorized thereunder does not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis have not been filed. The Registrant agrees to furnish to the Commission a copy of each such instrument upon request.
- 10.1* 1988 Stock Option Plan.
- 10.2* Form of Amendment to Deferred Compensation Agreement adopted February 13, 1989, between the Company and certain executive officers of the Company.
- 10.3* Form of Agreement adopted February 13, 1989, between the Company and certain executive officers of the Company providing for a supplemental employee benefit upon a change in control of the Company.
- 10.4* Genuine Parts Company Supplemental Retirement Plan, effective January 1, 1991.
- 10.5* 1992 Stock Option and Incentive Plan, effective April 20, 1992.
- 10.6* Restricted Stock Agreement dated March 31, 1994, between the Company and Larry L. Prince.
- 10.7* Restricted Stock Agreement dated March 31, 1994, between the Company and Thomas C. Gallagher.
- 10.8* The Genuine Parts Company Restated Tax-Deferred Savings Plan, effective January 1, 1993.
- 10.9* Amendment No. 2 to the Genuine Parts Company Supplemental Retirement Plan, effective January 1, 1995.
- 10.10* Genuine Partnership Plan, as amended and restated January 1, 1994.
- 10.11* Genuine Parts Company Pension Plan, as amended and restated, effective January 1, 1989.
- 10.12* Amendment No. 1 to the Genuine Partnership Plan, effective September 1, 1995.
- 10.13* Amendment No. 1 to the Genuine Parts Company Pension Plan, effective April 1, 1995.
- 10.14* Amendment No. 2 to the Genuine Parts Company Pension Plan, dated September 28, 1995, effective January 1, 1995.
- 10.15* Genuine Parts Company Directors' Deferred Compensation Plan, effective November 1, 1996.
- 10.16* Amendment No. 3 to the Genuine Parts Company Pension Plan, dated May 24, 1996, effective January 1, 1996.
- 10.17* Amendment No. 4 to the Genuine Parts Company Pension Plan, dated December 3, 1996, effective January 1, 1996.
- 10.18* Amendment No. 2 to the Genuine Partnership Plan, dated December 3, 1996, effective November 1, 1996.
- 10.19* Amendment No. 4-A to the Genuine Parts Company Pension Plan, dated August 29, 1997, effective January 1, 1996.
- 10.20* Amendment No. 5 to the Genuine Parts Company Pension Plan, dated August 7, 1997.
- 10.21* Amendment No. 6 to the Genuine Parts Company Pension Plan, dated October 6, 1997, effective January 1, 1997.
- 10.22* Amendment No. 3 to the Genuine Partnership Plan, dated August 7, 1997.
- 10.23* Amendment No. 3 to the Genuine Parts Company Supplemental Retirement Plan, dated August 29, 1997, effective August 15, 1997.
- 10.24* Genuine Parts Company Death Benefit Plan, effective July 15, 1997.
- 10.25* Amendment No. 4 to the Genuine Partnership Plan, dated August 19, 1998, effective January 1, 1998.
- 10.26* Amendment No. 5 to the Genuine Partnership Plan, dated December 7, 1998, effective January 1, 1999.
- 10.27* Amendment No. 6 to the Genuine Partnership Plan, dated December 7, 1998, effective January 1, 1994.
- 10.28* Amendment No. 7 to the Genuine Parts Company Pension Plan, dated August 19, 1998, effective January 1, 1998.
- 10.29* Genuine Parts Company 1999 Long-Term Incentive Plan.
- 10.30* Genuine Parts Company 1999 Annual Incentive Bonus Plan.
- 10.31* Restricted Stock Agreement dated February 25, 1999, between the Company and Larry L. Prince.
- 10.32* Restricted Stock Agreement dated February 25, 1999, between the Company and Thomas C. Gallagher.
* Indicates executive compensation plans and arrangements.
Annual Report on Form 10-K
Item 14(d)
Financial Statement Schedule II - Valuation and Qualifying Accounts
Genuine Parts Company and Subsidiaries
Balance at Charged Balance at
Beginning to Costs Other End
of Period and Expenses Additions(1) Deductions(2) of Period
---------- ------------ ------------ ------------- ----------
Year ended December 31, 1997:
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $1,771,181 $ 8,311,045 $ -- $ (8,233,116)(2) $1,849,110
Year ended December 31, 1998:
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts 1,849,110 7,484,733 3,499,025(1) (7,813,966)(2) 5,018,902
Year ended December 31, 1999:
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $5,018,902 $14,402,137 $ 1,479,685(1) $(13,972,115)(2) $6,928,609
|
(2) Uncollectible accounts written off, net of recoveries.
EXHIBIT 10.33
AMENDMENT NO. 8 TO
THE GENUINE PARTS COMPANY
PENSION PLAN
This Amendment to the Genuine Parts Company Pension Plan is adopted by Genuine Parts Company (the "Company") through action of the Pension Committee, effective as of the date set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Parts Company Pension Plan (the "Plan"), as amended and restated effective January 1, 1989, and such Plan is currently in effect; and
WHEREAS, under Section 4.02(c) and 8.06(c), the Pension Committee has the authority to amend Schedule E to the Plan;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as follows effective September 30, 1998:
1.
The following is hereby added to the end of Schedule E of the Plan as follows:
"3. Retirement Window for Closure of the Customer Financial
Management Services Office for the Eastern Division. The
following non-highly compensated employees may elect early
retirement without the early reduction factor described in
Section 4.02(b) of the Plan. Furthermore such non-highly
compensated employees who elect the early retirement window
benefit shall receive a monthly benefit of $419.61 (less
applicable withholding, if any) from October 1, 1998 until
the earlier of the month in which the Participant attains age
65 or the Participant's death. Such non-highly compensated
employees must notify the Company of their desire to elect
the early retirement window between August 5, 1998 and
September 30, 1998. Only the following Participants are
eligible for this early retirement window: Kathleen D. Rosa
and Joan E. Garofalo."
2.
Except as amended herein, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Pension Committee has caused this Amendment to the Plan to be executed on the date shown below but effective as of the date indicated above.
PENSION COMMITTEE TO THE
GENUINE PARTS COMPANY
PENSION PLAN
By: /s/ George W. Kalafut
-----------------------------------
Date: January 22, 1999
---------------------------------
|
By: /s/ Edward J. Van Stedum
-----------------------------------
Date: January 22, 1999
---------------------------------
|
By: /s/Jerry Nix
-----------------------------------
Date: January 22, 1999
---------------------------------
|
By: /s/Frank M. Howard
-----------------------------------
Date: January 22, 1999
---------------------------------
|
EXHIBIT 10.34
AMENDMENT NO. 9 TO
THE GENUINE PARTS COMPANY
PENSION PLAN
This Amendment to the Genuine Parts Company Pension Plan is adopted by Genuine Parts Company (the "Company") through action of the Pension Committee, effective as of the date set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Parts Company Pension Plan (the "Plan"), as amended and restated effective January 1, 1989, and such Plan is currently in effect; and
WHEREAS, under Section 8.06(c), the Pension Committee has the authority to amend the Plan to comply with changes in law and to make other amendments that do not materially increase the costs associated with the Plan; and
WHEREAS, the Company wishes to amend the Plan in certain respects;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as follows:
1.
Section 2.03(d) is hereby added, as follows:
"(d) Attained Age. For purposes of determining actuarial equivalence, age shall be determined using attained age, not the nearest age or age in years and months."
2.
Section 2.03(c)(2) is deleted in its entirety, and a new Section 2.03(c)(2) is substituted in lieu thereof, as follows:
"(2) Applicable Interest Rate.
(i) For lump sum distributions made on or after January 1, 2000, the term "Applicable Interest Rate" means the annual rate of interest on the 30-year Treasury securities for the month of October that precedes the beginning of the Plan Year in which such distribution occurs. (Note that the October rates are published in November.)
(ii) Special Rule for Annuity Starting Dates During Calendar Year
2000. For any Participant whose Annuity Starting Date occurs
on or after January 1, 2000 but prior to January 1, 2001, the
term "Applicable Interest Rate" will be either (a) or (b)
which follow, whichever results in the larger distribution:
(a) the rate in 2.03(c)(2)(i) above; or (b) the annual rate
of interest on the 30-year Treasury securities for the month
of December that precedes the beginning of the Plan Year in
which such distribution occurs. (Note that the December rates
are published in January.)"
3.
Section 2.10 is hereby deleted in its entirety and a new Section 2.10 is substituted in lieu thereof, as follows:
"2.10 Average Earnings shall mean the average of the Participant's monthly Earnings for the highest five (5) calendar years of Employment out of the last complete ten (10) calendar years of Employment (or during total Employment if less) immediately preceding the Participant's Termination of Employment. Average Earnings shall be determined by dividing the total Earnings received by the Participant during the appropriate five (5) year calendar year period by the number of months for which he received Earnings in such period. If the Participant's Earnings in the calendar year in which the Participant terminates Employment will increase the Participant's Average Earnings, such Earnings shall be counted as part of the Participant's ten (10) complete calendar years of Employment. Although a partial calendar year of Earnings may be used as described in the proceeding sentence, if a Participant has more than 60 months of participation in the Plan, Average Earnings shall be computed by dividing by 60 months."
4.
A new section 2.18(i) is hereby added, as follows:
"(i) An Employee who has a Permanent Disability before January 1, 2000 will continue to earn Credited Service following such Permanent Disability until the earlier of (1) the date his Permanent Disability ends; or (2) the date he attains Normal Retirement Age. An Employee who becomes Permanently Disabled on or after January 1, 2000 will continue to earn Credited Service following such Permanent Disability until the earlier of (1) the date his Permanent Disability ends; or (2) the last day of the month following the second anniversary of the date his Permanent Disability began."
5.
Section 2.21 is hereby deleted in its entirety and a new Section 2.21 is substituted in lieu thereof, as follows:
"2.21 Earnings shall be determined in accordance with the following rules:
(a) Except as provided below, Earnings means the Participant's
total compensation including wages, salaries, certain welfare
benefits (vacation, bereavement, short term disability, and
workers compensation make up), back pay awarded pursuant to
an EEOC dispute (but not other types of EEOC disputes), and
other amounts received for personal services actually
rendered in the course of Employment (including commissions,
overtime and bonuses). However, Earnings shall NOT include
reimbursements or other expense allowances, fringe benefits
(cash and non cash), moving expenses, awards, prizes,
referral bonuses, deferred compensation (including any
amounts deferred or paid under the Tax Deferred Savings Plan)
and all welfare benefits other than those listed in the
previous sentence. Earnings SHALL include any compensation
which is not includible in the Participant's gross income by
reason of Code Section 402(a)(8) (Employee pre-tax
contributions to the Genuine Partnership Plan), Code Section
125 (Employee salary deferrals under the Genuine Parts
Company Section 125 Plan), and Code Sections 402(h), 457(b)
and 414(h)(2) (none of which currently apply to the
Company)."
6.
Section 2.49 is hereby deleted in its entirety and a new Section 2.49 is substituted in lieu thereof, as follows:
"2.49 Termination Date shall mean the first to occur of the following events:
(a) Voluntary resignation from service of the Employer; or
(b) Discharge from the service of the Employer by the Employer; or
(c) Retirement; or
(d) Death; or
(e) Two weeks after an unpaid absence from work due to a personal leave of absence (not including FMLA); or
(f) Twelve weeks after an absence from work due to an FMLA leave; or
(g) One year after an absence from work due to workers compensation injury/accident; or
(h) Two years after an absence from work due to a Permanent
Disability; or
(i) The first anniversary of the date the Employee ceases
Employment for any reason not described above (e.g.,
vacation, holiday, sickness, disability (but not Permanent
Disability), or layoff)."
7.
A new Section 6.08 is hereby added, as follows:
"6.08 Distributions Pursuant to Qualified Domestic Relations Orders.
Notwithstanding anything to the contrary in this Plan, a "qualified
domestic relations order", as defined in Code Section 414(p), may
provide that any amount to be distributed to an alternate payee may be
distributed immediately in a single lump sum or single life annuity
even though the Participant is not yet entitled to a distribution
under the Plan. The intent of this Section is to provide for the
distribution of benefits to an alternate payee as permitted by
Treasury Regulation 1.401(a)-13(g)(3)."
8.
Amendment Number Five to the Plan, at Paragraph 10, amended Section
|
13.02 of the Plan. Such amendment was to be effective January 1, 2000. This Amendment Number Nine, however, hereby repeals Paragraph 10 of Amendment Number Five, thus reinstating the old Section 13.02. Amendment Number Nine also hereby adds the following new paragraph to the end of Section 13.02 (as it existed prior to Amendment Number Five). Pursuant to these changes, Section 13.02 of the Plan shall hereby read as follows:
"13.02 Combined Plan Limitations.
If the Employer maintains, or at any time maintained, one or more
qualified defined contribution plans covering any Participant in this
Plan, the sum of the Participant's defined contribution fraction and
defined benefit fraction shall not exceed 1.0 in any limitation year,
and the annual benefit otherwise payable to the Participant under this
Plan shall be frozen or reduced to the extent necessary so that the
sum of such fractions shall not exceed 1.0.
Effective as of the first day of the first limitation year beginning
on or after January 1, 2000 (the "Operative Date"), and
notwithstanding any other provision of the Plan, the Accrued Benefit
for any Participant shall be determined by applying the terms of the
Plan implementing the limitations of Section 415 as if the limitations
of Section 415 continued to include the limitations of Section 415(e)
as in effect on the day immediately prior to the Operative Date. For
this purpose, the defined contribution fraction is set equal to the
defined contribution fraction as of the day immediately prior to the
Operative Date."
|
9.
Schedule B shall be amended in three (3) different ways, listed below as a, b, and c, as follows:
a. The following paragraph entitled "Overview" shall be added prior to
Section I and just beneath the heading "CREDIT FOR SERVICE WITH
PREDECESSOR EMPLOYERS":
"Overview
Prior to January 1, 2000, the Company maintained Sections I, II and
III of this Schedule B. Effective January 1, 2000, however, no
additional changes, other than historic changes, will be made to
Sections I, II or III. Beginning January 1, 2000 rules regarding past
service credit will be governed by Section IV."
b. The following sentence shall be added to the beginning of the
paragraph at Section I:
"This Section I shall apply to acquisitions occurring prior to January
1, 2000."
c. Section IV is hereby added to Schedule B, as follows:
"IV. Acquisitions On or After January 1, 2000
A. Effective for acquisitions occurring on or after January 1, 2000,
Participants employed by the predecessor employers listed in this
subsection A, and who are employed on the first anniversary of the
Acquisition Date listed below, shall receive credit under this Plan
for all employment with such predecessor employer solely for purposes
of determining (1) the Participants' vested percentage under Section
4.05(c); and (2) the Participants' eligibility to participate in the
Plan pursuant to Article 3.
Employees terminating employment prior to the first anniversary of the
applicable Acquisition Date shall not participate in this Plan.
|
Name Acquisition Date |
B. Effective for acquisitions occurring on or after January 1, 2000, Participants employed by the predecessor employers listed in this subsection B, and who are employed on the Employment Date listed below (the date the predecessor employer's employees are authorized to participate in the Plan), shall receive credit under this Plan for all employment with such predecessor employer solely for purposes of determining (1) the Participants' vested percentage under Section
4.05(c); and (2) the Participants' eligibility to participate in the Plan pursuant to Article 3.
Name Employment Date" |
10.
Paragraphs 1, 3 and 5 are only clarifications to the Plan document and do not change how the Plan has been administered and interpreted since the Plan's Effective Date. Accordingly, Paragraphs 1, 3, and 5 are effective January 1, 1989. Paragraph 8 (repealing a prior amendment that was to be effective January 1, 2000 is effective December 31, 1999. Paragraphs 2, 4, 6, 7 and 9 are effective January 1, 2000. Except as amended herein, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Pension Committee has caused this Amendment to the Plan to be executed on the date shown below but effective as of the date indicated above.
PENSION COMMITTEE TO THE
GENUINE PARTS COMPANY
PENSION PLAN
By: /s/ George W. Kalafut
-----------------------------------
Date: December 30, 1999
---------------------------------
Attest: /s/ Frank M. Howard
----------------------
|
EXHIBIT 10.35
AMENDMENT TO THE
GENUINE PARTS COMPANY 1992 STOCK OPTION AND INCENTIVE PLAN
This Amendment ("Amendment") to the Genuine Parts Company 1992 Stock Option and Incentive Plan (the "Plan") is made and executed this 19 day of April, 1999, to be effective as of the date hereof.
WHEREAS, the Board of Directors of Genuine Parts Company (the "Company"), acting through its Executive Committee, has approved an amendment to the Plan pursuant to Section 4.2 of the Plan, to change the definition of "Change in Control" for purposes of the Plan;
NOW, THEREFORE, in accordance with Section 4.2 of the Plan, the Plan is hereby amended as follows:
1. CHANGE IN CONTROL DEFINITION. The current definition of the term "Change in Control" contained in Section 1.5(b) of the Plan is hereby deleted in its entirety and the following is substituted therefor:
A Change in Control of the Company means and includes each of the following:
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act)
(a "Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 20% or more of the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (1), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition by a Person who is
on May 1, 1999 the beneficial owner of 20% or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from the
Company, (iii) any acquisition by the Company, (iv) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company, or (v)
any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of this
definition; or
(2) Individuals who, as of May 1, 1999, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 1, 1999 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger, consolidation or share exchange or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities, and (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
2. EFFECT OF AMENDMENT. As modified hereby, the provisions of the Plan, as heretofore amended, shall remain in full force and effect, and the Plan may be restated, as amended hereby, in its entirety.
IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed as of the date first above written.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
-----------------------------------
Name: George W. Kalafut
---------------------------------
Title: Exec Vice-President Finance
& Administration
--------------------------------
|
EXHIBIT 10.36
AMENDMENT TO THE
GENUINE PARTS COMPANY TAX-DEFERRED SAVINGS PLAN
This Amendment ("Amendment") to the Genuine Parts Company Tax-Deferred Savings Plan (the "Plan") is made and executed this 19 day of April, 1999, to be effective as of the date hereof.
WHEREAS, the Executive Committee of the Board of Directors of Genuine
Parts Company (the "Company") has approved an amendment to the Plan pursuant to
Section 7.01 of the Plan, to change the definition of "Change of Control" for
purposes of the Plan;
NOW, THEREFORE, in accordance with Section 7.01 of the Plan, the Plan is hereby amended as follows:
1. CHANGE OF CONTROL DEFINITION. The current Section 8.01(c) of the Plan is hereby deleted in its entirety and the following is substituted therefor:
(c) A Change of Control of the Company means and includes each of the following:
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act)
(a "Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 20% or more of the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (1), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition by a Person who is
on May 1, 1999 the beneficial owner of 20% or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from the
Company, (iii) any acquisition by the Company, (iv) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company, or (v)
any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of this
definition; or
(2) Individuals who, as of May 1, 1999, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 1, 1999 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger, consolidation or share exchange or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities, and (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
2. EFFECT OF AMENDMENT. As modified hereby, the provisions of the Plan, as heretofore amended, shall remain in full force and effect, and the Plan may be restated, as amended hereby, in its entirety.
IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed as of the date first above written.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
-----------------------------------
Name: George W. Kalafut
---------------------------------
Title: Exec Vice-President Finance &
Adminstration
--------------------------------
|
EXHIBIT 10.37
AMENDMENT TO THE
GENUINE PARTS COMPANY ORIGINAL DEFERRED COMPENSATION PLAN
This Amendment ("Amendment") to the Genuine Parts Company Original Deferred Compensation Plan (the "Plan") is made and executed this 19 day of April, 1999, to be effective as of the date hereof.
WHEREAS, the Executive Committee of the Board of Directors of Genuine
Parts Company (the "Company") has approved an amendment to the Plan pursuant to
Section 7.01 of the Plan, to change the definition of "Change of Control" for
purposes of the Plan;
NOW, THEREFORE, in accordance with Section 7.01 of the Plan, the Plan is hereby amended as follows:
1. CHANGE OF CONTROL DEFINITION. The current Section 8.01(c) of the Plan is hereby deleted in its entirety and the following is substituted therefor:
(c) A Change of Control of the Company means and includes each of the following:
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act)
(a "Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 20% or more of the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (1), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition by a Person who is
on May 1, 1999 the beneficial owner of 20% or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from the
Company, (iii) any acquisition by the Company, (iv) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company, or (v)
any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of this
definition; or
(2) Individuals who, as of May 1, 1999, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 1, 1999 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger, consolidation or share exchange or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities, and (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
2. EFFECT OF AMENDMENT. As modified hereby, the provisions of the Plan, as heretofore amended, shall remain in full force and effect, and the Plan may be restated, as amended hereby, in its entirety.
IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed as of the date first above written.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
-----------------------------------
Name: George W. Kalafut
---------------------------------
Title: Exec Vice-President Finance &
Adminstration
--------------------------------
|
EXHIBIT 10.38
AMENDMENT TO THE
GENUINE PARTS COMPANY DIRECTORS' DEFERRED COMPENSATION PLAN
This Amendment ("Amendment") to the Genuine Parts Company Directors' Deferred Compensation Plan (the "Plan") is made and executed this 19 day of April, 1999, to be effective as of the date hereof.
WHEREAS, the Executive Committee of the Board of Directors of Genuine
Parts Company (the "Company") has approved an amendment to the Plan pursuant to
Section 7.01 of the Plan, to change the definition of "Change of Control" for
purposes of the Plan;
NOW, THEREFORE, in accordance with Section 7.01 of the Plan, the Plan is hereby amended as follows:
1. CHANGE OF CONTROL DEFINITION. The current Section 8.03 of the Plan is hereby deleted in its entirety and the following is substituted therefor:
8.03 Definition of Change of Control. Change of Control of the Company means and includes each of the following:
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act)
(a "Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 20% or more of the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (1), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition by a Person who is
on May 1, 1999 the beneficial owner of 20% or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from the
Company, (iii) any acquisition by the Company, (iv) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company, or (v)
any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of this
definition; or
(2) Individuals who, as of May 1, 1999, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 1, 1999 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger, consolidation or share exchange or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities, and (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
2. EFFECT OF AMENDMENT. As modified hereby, the provisions of the Plan, as heretofore amended, shall remain in full force and effect, and the Plan may be restated, as amended hereby, in its entirety.
IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed as of the date first above written.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
-----------------------------------
Name: George W. Kalafut
---------------------------------
Title: Exec Vice-President Finance &
Adminstration
--------------------------------
|
EXHIBIT 10.39
AMENDMENT TO THE
GENUINE PARTS COMPANY SUPPLEMENTAL RETIREMENT PLAN
This Amendment ("Amendment") to the Genuine Parts Company Supplemental Retirement Plan (the "Plan") is made and executed this 19 day of April, 1999, to be effective as of the date hereof.
WHEREAS, the Compensation and Stock Option Committee of the Board of Directors of Genuine Parts Company (the "Company") has approved an amendment to the Plan pursuant to Section 6.08 of the Plan, to change the definition of "Change of Control" for purposes of the Plan;
NOW, THEREFORE, in accordance with Section 6.08 of the Plan, the Plan is hereby amended as follows:
1. CHANGE OF CONTROL DEFINITION. The current Section 5.01(c) of the Plan is hereby deleted in its entirety and the following is substituted therefor:
A Change of Control of Genuine Parts means and includes each of the following:
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act)
(a "Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 20% or more of the combined voting
power of the then outstanding voting securities of Genuine Parts
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (1), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition by a Person who is
on May 1, 1999 the beneficial owner of 20% or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from Genuine
Parts, (iii) any acquisition by Genuine Parts, (iv) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained
by Genuine Parts or any corporation controlled by Genuine Parts, or
(v) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of this
definition; or
(2) Individuals who, as of May 1, 1999, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 1, 1999 whose election, or nomination for election by Genuine Parts' shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger, consolidation or share exchange or sale or other disposition of all or substantially all of the assets of Genuine Parts (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Genuine Parts or all or substantially all of Genuine Parts' assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities, and (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of Genuine Parts or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(4) Approval by the shareholders of Genuine Parts of a complete liquidation or dissolution of Genuine Parts.
2. EFFECT OF AMENDMENT. As modified hereby, the provisions of the Plan, as heretofore amended, shall remain in full force and effect, and the Plan may be restated, as amended hereby, in its entirety.
IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed as of the date first above written.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
-----------------------------------
Name: George W. Kalafut
---------------------------------
Title: Exec Vice-President Finance &
Adminstration
--------------------------------
|
EXHIBIT 10.40
AMENDMENT NO. 7
TO THE
GENUINE PARTNERSHIP PLAN
This Amendment to the Genuine Partnership Plan is adopted by Genuine Parts Company (the "Company"), effective as of the date set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Partnership Plan (the "Plan"), as amended and restated effective January 1, 1994, and such Plan is currently in effect; and
WHEREAS, pursuant to Section 11.01, the Company has reserved the right to amend the Plan through action of the Committee for the Plan;
NOW, THEREFORE, BE IT RESOLVED the Plan is hereby amended as follows:
1.
Section 4.03(a) is hereby deleted and the following is substituted in lieu thereof as follows:
"(a) Change of Contribution Percentage. A Participant may increase or decrease the percentage of his Compensation contributed as a Pre-Tax Contribution only on January 1, April 1, July 1, or October 1 of each Plan Year (or the first pay period that begins on or after such dates) by delivery of written notice to the Committee or by other means as approved by the Committee. In order to be effective, the Participant must notify the Committee at least 30 days prior to the date that the increase or decrease will become effective (or such lesser number of days as permitted by the Committee on a nondiscriminatory basis)."
2.
Section 9.14 is hereby deleted and a new Section 9.14 is substituted in lieu thereof as follows:
9.14 Other Requirements.
(a) All loans issued to a married Participant pursuant to this Plan on or after January 1, 1999 shall require the consent of the Participant's Spouse. Such consent shall authorize the Committee to default the loan and, when a distributable event has occurred, foreclose on the loan pursuant to the loan documents and loan guidelines without
additional notice to or consent by the Participant or the Participant's Spouse. Such consent by the Spouse married to the Participant at the time the loan is processed shall also apply to any future Spouse of the Participant. Additionally, no current or future spousal consent is required if the Participant was not married at the time the loan was processed.
(b) The Committee may establish such additional guidelines and rules as it deems necessary. Such guidelines and rules are hereby incorporated by reference in the Plan. The Committee may amend or modify the loan application, loan guidelines and loan rules as it deems necessary to carry out the provisions of this Article Nine (including retroactive amendments).
3.
Except as amended herein, the Plan shall remain in full force and effect. This Amendment Number 7 shall be effective January 1, 1999.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Committee, has caused this Amendment to the Plan to be executed on the date shown below but effective as of the date indicated above.
COMMITTEE TO THE
GENUINE PARTNERSHIP PLAN
By: /s/ George W. Kalafut
---------------------------------
Date: January 22, 1999
-------------------------------
By:/s/ Edward J. Van Stedum
---------------------------------
Date: January 22, 1999
-------------------------------
By:/s/Jerry Nix
---------------------------------
Date: January 22, 1999
-------------------------------
By: /s/Frank M. Howard
---------------------------------
Date: January 22, 1999
-------------------------------
|
EXHIBIT 10.41
AMENDMENT NO. 8
TO THE
GENUINE PARTNERSHIP PLAN
This Amendment to the Genuine Partnership Plan is adopted by Genuine Parts Company (the "Company"), effective as of the date set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Partnership Plan (the "Plan"), as amended and restated effective January 1, 1994, and such Plan is currently in effect; and
WHEREAS, the Company desires to amend Schedule B of the Plan;
WHEREAS, the Company has authorized the Committee to the Plan ("Committee") to amend Schedules to the Plan and the Committee has authorized Frank Howard to execute such amendments without a meeting of the Committee;
NOW, THEREFORE, BE IT RESOLVED that Schedule B is hereby deleted and a new Schedule B is substituted in lieu thereof as follows:
"SCHEDULE B
Credit for Service with Predecessor Employers
I. General Rule - No Past Service. Unless otherwise identified in Part II below, an Employee will not receive Credited Service or Years of Eligibility Service under this Plan for any purpose. Instead (unless otherwise required by law) Hours of Service worked for a predecessor employer prior to the Designation Date shall be ignored.
II. Definition of Past Service Credit. If Employees who were previously employed by a predecessor employer are granted past service credit (as noted below), such Employees who are employed by an Employer on the Designation Date shall receive Credited Service and Years of Eligibility Service under this Plan beginning with the employment commencement date with the predecessor employer, but subject to all of the rules concerning crediting of service and Breaks in Service set forth in this Plan.
Extent of Credit for Service
Name Designation Date with Predecessor Company
---- ---------------- ----------------------------
1. Odell Hardware Company 7/1/88 Past Service Credit Granted
("Odell")
2. Clark Siviter 7/1/88 Past Service Credit Granted
3. Brooks-Noble Parts 7/1/88 Past Service Credit Granted
& Machine Co., Inc.
4. General Automotive Parts 7/1/88 Past Service Credit Granted
Company and its subsidiaries
("General Automotive")
5. Standard Units Parts 7/1/88 Past Service Credit Granted
Corporation including
its subsidiary Manco,
Inc. ("Standard Units
Parts")
6. NAPA Des Moines 7/1/88 Past Service Credit Granted
Warehouse ("Des Moines")
|
III. (a) Acquisitions Prior to January 1, 1994.
Participants employed by the following predecessor employers that were acquired prior to January 1, 1994, shall not receive Past Service Credit as of the date the predecessor employer was acquired by or merged into Genuine Parts Company. However, after an employee of such predecessor employer becomes a Participant in the Plan by satisfying the requirements of Section 3.01, such Participant shall receive Credited Service for all employment with such predecessor employer effective as of the Employment Date indicated below provided such individuals were employed by an Employer (as determined by the Committee) on the Employment Date.
(b) Acquisitions On or After January 1, 1994.
Participants employed by the following predecessor employers that were acquired on or after January 1, 1994 shall receive Credited Service and credit for participation purposes under Article III for all employment with such predecessor employer effective as of the Employment Date indicated below provided such individuals were employed by an Employer (as determined by the Committee) on the Employment Date.
(c) Important Restrictions.
Credited Service granted under (a) or (b) above may be forfeited or disregarded in accordance with the definition of Credited Service set forth in Article II. Furthermore, no Credited Service shall be granted for employment with a predecessor employer if the granting of such Credited Service will adversely impact the tax qualified status of the Plan.
Davis & Wilmar, Inc. May 1, 1993 Pittsburg, PA (Acquired 7/1/92) M&B, Inc. (Lesker Office Supplies, Inc.) November 1, 1993 Charlotte, NC The Parts, Inc. January 1, 1995 Anchorage, AK (Acquired 1/1/94) Dade City Jobbing Group January 1, 1994 Dade City, FL (Acquired 1/2/92) Atlantic Tracy Inc. November 1, 1995 Summerville, MA Midcap Bearing Corporation June 1, 1995 San Antonio, TX Motion Equipment, Inc. June 1, 1995 Houston, TX Power Drives & Bearings, Inc. October 1,1995 Omaha, NB Friend's Motor Supply, Inc. June 30, 1997 Hastings, NE Utah Bearing and Fabrication, Inc. October 3,1997 Salt Lake City, UT Colorado Bearing and Supply, Inc. October 3, 1997 Denver, CO Quality Auto Supply of Alaska, Inc. April 1, 1998 Palmer, AK Berry Bearing Company /Tom Steel Div. January 1, 1998 Lyons, IL (Acquired 2/93) |
Cascade Bearings April 1, 1998 Yakima, WA Horizon U.S.A. Data Supplies, Inc. August 1, 1998 Reno, NV (Acquired on 4/1/95) Berry Bearing Company (all divisions October 1, 1998 other than Tom Steel Division) (Acquired 2/93) Lyons, IL Hub Tool & Supply, Inc. January 1, 1999 Wichita, KS" |
This amendment shall be effective January 1, 1999. Except as amended herein, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Committee has caused this Amendment to the Plan to be executed on the date shown below but effective as of the date indicated above.
COMMITTEE TO THE
GENUINE PARTNERSHIP PLAN
By: /s/ Frank M. Howard
-------------------------------------
Frank Howard, acting on behalf of the
Committee
Date: February 4, 1999
------------------------------------
|
EXHIBIT 10.42
AMENDMENT NO. 9
TO THE
GENUINE PARTNERSHIP PLAN
This Amendment to the Genuine Partnership Plan is adopted by Genuine Parts Company (the "Company"), effective as of the date set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Partnership Plan (the "Plan"), as amended and restated effective January 1, 1994, and such Plan is currently in effect; and
WHEREAS, the Company desires to amend Schedule B of the Plan;
WHEREAS, the Company has authorized the Committee to the Plan ("Committee") to amend Schedules to the Plan and the Committee has authorized Frank Howard to execute such amendments without a meeting of the Committee;
NOW, THEREFORE, BE IT RESOLVED that Schedule B is hereby deleted and a new Schedule B is substituted in lieu thereof as follows:
"SCHEDULE B
Credit for Service with Predecessor Employers
I. General Rule - No Past Service. Unless otherwise identified in Part II below, an Employee will not receive Credited Service or Years of Eligibility Service under this Plan for any purpose. Instead (unless otherwise required by law) Hours of Service worked for a predecessor employer prior to the Designation Date shall be ignored.
II. Definition of Past Service Credit. If Employees who were previously employed by a predecessor employer are granted past service credit (as noted below), such Employees who are employed by an Employer on the Designation Date shall receive Credited Service and Years of Eligibility Service under this Plan beginning with the employment commencement date with the predecessor employer, but subject to all of the rules concerning crediting of service and Breaks in Service set forth in this Plan.
Extent of Credit for Services
Name Designation Date With Predecessor Company
---- ---------------- -----------------------------
1. Odell Hardware Company 7/1/88 Past Service Credit Granted
("Odell")
2. Clark Siviter 7/1/88 Past Service Credit Granted
3. Brooks-Noble Parts 7/1/88 Past Service Credit Granted
& Machine Co., Inc.
4. General Automotive Parts 7/1/88 Past Service Credit Granted
Company and its subsidiaries
("General Automotive")
5. Standard Units Parts 7/1/88 Past Service Credit Granted
Corporation including
its subsidiary Manco,
Inc. ("Standard Units
Parts")
6. NAPA Des Moines 7/1/88 Past Service Credit Granted
Warehouse ("Des Moines")
|
III. (a) Acquisitions Prior to January 1, 1994.
Participants employed by the following predecessor employers that were acquired prior to January 1, 1994, shall not receive Past Service Credit as of the date the predecessor employer was acquired by or merged into Genuine Parts Company. However, after an employee of such predecessor employer becomes a Participant in the Plan by satisfying the requirements of Section 3.01, such Participant shall receive Credited Service for all employment with such predecessor employer effective as of the Employment Date indicated below provided such individuals were employed by an Employer (as determined by the Committee) on the Employment Date.
(b) Acquisitions On or After January 1, 1994.
Participants employed by the following predecessor employers that were acquired on or after January 1, 1994 shall receive Credited Service and credit for participation purposes under Article III for all employment with such predecessor employer effective as of the Employment Date indicated below provided such individuals were employed by an Employer (as determined by the Committee) on the Employment Date.
(c) Important Restrictions.
Credited Service granted under (a) or (b) above may be forfeited or disregarded in accordance with the definition of Credited Service set forth in Article II. Furthermore, no Credited Service shall be granted for employment with a predecessor employer if the granting of such Credited Service will adversely impact the tax qualified status of the Plan.
Davis & Wilmar, Inc. May 1, 1993 Pittsburg, PA (Acquired 7/1/92) M&B, Inc. (Lesker Office Supplies, Inc.) November 1, 1993 Charlotte, NC The Parts, Inc. January 1, 1995 Anchorage, AK (Acquired 1/1/94) Dade City Jobbing Group January 1, 1994 Dade City, FL (Acquired 1/2/92) Atlantic Tracy Inc. November 1, 1995 Summerville, MA Midcap Bearing Corporation June 1, 1995 San Antonio, TX Motion Equipment, Inc. June 1, 1995 Houston, TX Power Drives & Bearings, Inc. October 1,1995 Omaha, NB Friend's Motor Supply, Inc. June 30, 1997 Hastings, NE Utah Bearing and Fabrication, Inc. October 3,1997 Salt Lake City, UT Colorado Bearing and Supply, Inc. October 3, 1997 Denver, CO Quality Auto Supply of Alaska, Inc. April 1, 1998 Palmer, AK Berry Bearing Company /Tom Steel Div. January 1, 1998 Lyons, IL (Acquired 2/93) Cascade Bearings April 1, 1998 Yakima, WA Horizon U.S.A. Data Supplies, Inc. August 1, 1998 Reno, NV (Acquired on 4/1/95) |
Berry Bearing Company (all divisions October 1, 1998 other than Tom Steel Division) (Acquired 2/93) Lyons, IL Hub Tool & Supply, Inc. January 1, 1999 Wichita, KS Bush-Miller, Inc. April 1, 1999 York, PA" |
This amendment shall be effective April 1, 1999. Except as amended herein, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Committee has caused this Amendment to the Plan to be executed on the date shown below but effective as of the date indicated above.
COMMITTEE TO THE
GENUINE PARTNERSHIP PLAN
By: /s/ Frank M. Howard
-------------------------------------
Frank Howard, acting on behalf of the
Committee
Date: April 5, 1999
-----------------------------------
|
EXHIBIT 10.43
AMENDMENT NO. 10
TO THE
GENUINE PARTNERSHIP PLAN
This Amendment to the Genuine Partnership Plan is adopted by Genuine Parts Company (the "Company"), effective as of the dates set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Partnership Plan (the "Plan"), as amended and restated effective January 1, 1994, and such Plan is currently in effect;
WHEREAS, the Company desires to amend Schedules B and C of the Plan; and
WHEREAS, pursuant to Section 11.01 of the Plan, the Company has reserved the right to amend the Plan through action of the Committee for the Plan;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as follows:
1.
Schedule B shall be deleted in its entirety and a new Schedule B shall be added, effective November 30, 1999, to read as follows:
"SCHEDULE B
Credit for Service with Predecessor Employers
I. General Rule - No Past Service. Unless otherwise identified in Part II below, an Employee will not receive Credited Service or Years of Eligibility Service under this Plan for any purpose. Instead (unless otherwise required by law) Hours of Service worked for a predecessor employer prior to the Designation Date shall be ignored.
II. Definition of Past Service Credit. If Employees who were previously employed by a predecessor employer are granted past service credit (as noted below), such Employees who are employed by an Employer on the Designation Date shall receive Credited Service and Years of Eligibility Service under this Plan beginning with the employment commencement date with the predecessor employer, but subject to all of the rules concerning crediting of service and Breaks in Service set forth in this Plan.
Extent of Credit for Service
Name Designation Date with Predecessor Company
---- ---------------- ----------------------------
1. Odell Hardware Company 7/1/88 Past Service Credit Granted
("Odell")
2. Clark Siviter 7/1/88 Past Service Credit Granted
3. Brooks-Noble Parts 7/1/88 Past Service Credit Granted
& Machine Co., Inc.
4. General Automotive Parts 7/1/88 Past Service Credit Granted
Company and its subsidiaries
("General Automotive")
5. Standard Units Parts 7/1/88 Past Service Credit Granted
Corporation including
its subsidiary Manco,
Inc. ("Standard Units
Parts")
6. NAPA Des Moines 7/1/88 Past Service Credit Granted
Warehouse ("Des Moines")
|
III. (a) Acquisitions Prior to January 1, 1994.
Participants employed by the following predecessor employers that were acquired prior to January 1, 1994, shall not receive Past Service Credit as of the date the predecessor employer was acquired by or merged into Genuine Parts Company. However, after an employee of such predecessor employer becomes a Participant in the Plan by satisfying the requirements of Section 3.01, such Participant shall receive Credited Service for all employment with such predecessor employer effective as of the Employment Date indicated below provided such individuals were employed by an Employer (as determined by the Committee) on the Employment Date.
(b) Acquisitions On or After January 1, 1994.
Participants employed by the following predecessor employers that were acquired on or after January 1, 1994 shall receive Credited Service and credit for participation purposes under Article III for all employment with such predecessor employer effective as of the Employment Date indicated below provided such individuals were employed by an Employer (as determined by the Committee) on the Employment Date.
(c) Important Restrictions.
Credited Service granted under (a) or (b) above may be forfeited or disregarded in accordance with the definition of Credited Service set forth in Article II. Furthermore, no Credited Service shall be granted for employment with a predecessor employer if the granting of such Credited Service will adversely impact the tax qualified status of the Plan.
Davis & Wilmar, Inc. May 1, 1993 Pittsburg, PA (Acquired 7/1/92) M&B, Inc. (Lesker Office Supplies, Inc.) November 1, 1993 Charlotte, NC The Parts, Inc. January 1, 1995 Anchorage, AK (Acquired 1/1/94) Dade City Jobbing Group January 1, 1994 Dade City, FL (Acquired 1/2/92) Atlantic Tracy Inc. November 1, 1995 Summerville, MA Midcap Bearing Corporation June 1, 1995 San Antonio, TX Motion Equipment, Inc. June 1, 1995 Houston, TX Power Drives & Bearings, Inc. October 1,1995 Omaha, NE Friend's Motor Supply, Inc. June 30, 1997 Hastings, NE Utah Bearing and Fabrication, Inc. October 3,1997 Salt Lake City, UT Colorado Bearing and Supply, Inc. October 3, 1997 Denver, CO Quality Auto Supply of Alaska, Inc. April 1, 1998 Palmer, AK Berry Bearing Company /Tom Steel Div. January 1, 1998 Lyons, IL (Acquired 2/93) Cascade Bearings April 1, 1998 |
Yakima, WA Horizon U.S.A. Data Supplies, Inc. August 1, 1998 Reno, NV (Acquired on 4/1/95) Berry Bearing Company (all divisions October 1, 1998 other than Tom Steel Division) (Acquired 2/93) Lyons, IL Hub Tool & Supply, Inc. January 1, 1999 Wichita, KS Bush-Miller, Inc. April 1, 1999 York, PA EIS, Inc. December 1, 1999 (including the following current and former subsidiaries of EIS, Inc.: Com-Kyl, Inc.; Scottsdale Tool & Supply, Inc.; Electronic Tool Co., Inc.; Summit Insulation Supply Company, Inc.; and H.A. Holden, Inc.) Atlanta, GA (Acquired 5/98)" |
2.
A new Section VII shall be added to the end of Schedule C to read as follows:
"VII. Additional Forms of Benefits for Former Participants in the
Hub Tool & Supply, Inc. 401(k) Plan
A. Background. As of December 31, 1998, the Hub Tool & Supply,
Inc. 401(k) Plan (the "Hub Plan") was frozen. The Hub Plan was
subsequently merged into the Plan. Accounts established under
the Hub Plan shall constitute Prior Employer Accounts.
B. Eligibility of Former Participants in the Hub Plan to
Receive Additional Forms of Benefits. Effective as of the
merger of the Hub Plan into this Plan, former participants in
the Hub Plan who became Participants in this Plan ("Hub
Participants") may elect to receive, in addition to the
benefits offered under this Plan, a distribution from their
Prior Employer Accounts as follows:
(i) in a life annuity with monthly income payable for the
life of the Participant;
|
(ii) in a life annuity with monthly income payable for the life of the Participant and, if the Participant dies before the end of a period of five, ten, or fifteen years as selected by the Participant, with monthly income payable to the Participant's beneficiary until the end of such period;
(iii) in a life annuity with monthly income payable for the life of the Participant and, if the Participant dies before the total amount paid equals the Participant's Prior Employer Account, with monthly income payable to the Participant's beneficiary until the total amount paid equals the Participant's Prior Employer Account;
(iv) in a joint and survivor life annuity with monthly income payable for the life of the Participant; with 50%, 66 2/3%, or 100% (as elected by the Participant) of the Participant's monthly income payable for the life of the Participant's survivor; and, if both the Participant and the Participant's survivor die before the total amount paid equals the Participant's Prior Employer Account, payments continue to the Participant's beneficiary until the total amount paid equals the Participant's Prior Employer Account;
(v) in installment payments made monthly for a fixed period of time equal to or greater than 60 months; or
(vi) in a series of flexible income payments for an amount each year equal to that elected by the Participant which, in the year the Participant attains age 70 1/2, must be equal to or greater than a minimum amount."
3.
Except as amended herein, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Committee has caused this Amendment to the Plan to be executed on the date shown below but effective as of the date indicated above.
COMMITTEE TO THE
GENUINE PARTNERSHIP PLAN
By: /s/ Frank M. Howard
-------------------------------------
Frank Howard, acting on behalf of the
Committee
Date: December 30, 1999
-----------------------------------
|
EXHIBIT 13
REPORT OF INDEPENDENT AUDITORS
BOARD OF DIRECTORS
GENUINE PARTS COMPANY
We have audited the accompanying consolidated balance sheets of Genuine Parts Company and subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Genuine Parts Company and subsidiaries at December 31, 1999 and 1998, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP February 4, 2000 |
SELECTED FINANCIAL DATA
YEAR ENDED DECEMBER 31,
In thousands, except per share data 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------
Net sales $7,981,687 $6,614,032 $6,005,245 $5,720,474 $5,261,904
Cost of goods sold 5,587,557 4,611,525 4,178,642 4,002,971 3,654,703
Selling, administrative and other expenses 1,766,063 1,413,390 1,261,003 1,172,270 1,096,407
Income before income taxes 628,067 589,117 565,600 545,233 510,794
Income taxes 250,445 233,323 223,203 215,157 201,626
Net income $ 377,622 $ 355,794 $ 342,397 $ 330,076 $ 309,168
Average common shares outstanding during year -
assuming dilution* 179,238 180,081 180,165 182,189 184,375
Per common share:*
Diluted net income $ 2.11 $ 1.98 $ 1.90 $ 1.81 $ 1.68
Dividends declared 1.04 1.00 .96 .89 .84
December 31 closing stock price 24.81 33.44 33.94 29.67 27.33
Long-term debt, less current maturities 702,417 588,640 209,490 110,241 60,607
Shareholders' equity 2,177,517 2,053,332 1,859,468 1,732,054 1,650,882
Total assets $3,929,672 $3,600,380 $2,754,363 $2,521,631 $2,274,132
========================================================================================================================
*Adjusted to reflect the three-for-two stock split in 1997.
|
SELECTED RATIO ANALYSIS
YEAR ENDED DECEMBER 31,
IN % OF NET SALES 1999 1998 1997 1996 1995
-------------------------------------------------------------------------------------------------------------------
Cost of goods sold 70.00% 69.72% 69.58% 69.98% 69.46%
Selling, administrative and other expenses 22.13 21.37 21.00 20.49 20.84
Income before income taxes 7.87 8.91 9.42 9.53 9.71
Net income 4.73 5.38 5.70 5.77 5.88
Rate earned on shareholders' equity
at the beginning of each year 18.39% 19.13% 19.77% 19.99% 20.26%
===================================================================================================================
|
MARKET AND DIVIDEND INFORMATION
High and Low Sales Price and Dividends per Share of Common Shares Traded on the
New York Stock Exchange.
SALES PRICE OF COMMON SHARES
QUARTER 1999 1998
---------------------------------------------------------------------------------
HIGH LOW HIGH LOW
First $33.81 $27.81 $38.25 $32.44
Second 35.25 28.06 38.00 32.75
Third 35.75 25.25 35.50 29.88
Fourth 27.50 22.25 33.94 28.25
|
Dividends Declared Per Share
1999 1998
----------------------------------------------------------
First $.26 $.25
Second $.26 $.25
Third $.26 $.25
Fourth $.26 $.25
|
Number of Record Holders of Common Stock: 7,322
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
December 31, 1999
RESULTS OF OPERATIONS: Net sales in 1999 increased for the 50th consecutive year to a record high of $7.98 billion. This was an increase of 21% over the prior year amount of $6.6 billion and compares with increases of 10% in 1998, and 5% in 1997. Excluding the effect of acquisitions, sales would have increased approximately 7% in 1999. Sales for the Automotive Parts Group increased 25% in 1999 versus 6% in 1998, reflecting the full year impact of acquisitions made in 1998 and 1999 and increased market share. Price increases for the Automotive Parts Group were flat in 1999 and 1998. Sales for the Industrial Parts Group increased 7% in 1999 versus 8% in 1998, reflecting geographic growth through acquisitions, opening new branches and moderate growth in industrial production. Price increases for the Industrial Parts Group were 1% in 1999 and 1998. Sales for the Office Products Group increased 9% in 1999 and 4% in 1998, reflecting geographic growth, increased market share, expanded product offerings and an increased customer base. Price increases for the Office Products Group were less than 1% in 1999 and 1998. Sales for the Electrical/Electronic Group which the Company acquired July 1, 1998 reached $522 million for 1999. Price increases for the Electrical/Electronic Group, were also less than 1% in 1999 and 1998.
Costs of goods sold was 70.0% of net sales in 1999 compared to 69.7% in 1998 and to 69.6% in 1997. Selling, administrative and other expenses increased 25% in 1999 to $1.8 billion versus (8% increase, excluding 1999 acquisitions) a 12% increase in 1998 (8% increase, excluding 1998 acquisitions) and was 22.1% of net sales in 1999, 21.4% of net sales in 1998, and 21.0% of net sales in 1997. Selling, administrative and other expenses increased as a percentage to sales as a result of additional acquisition costs including interest expense and goodwill amortization. Increased salaries and benefits plus expenses due to the year 2000 and e-commerce initiatives also contributed to this increase. The effective income tax rate was 39.9% in 1999 as compared to 39.6% in 1998 and 39.5% in 1997. The increase in the tax rate in 1999 primarily related to the effect of international operations. Net income as a percent of net sales was 4.7% in 1999, 5.4% in 1998, and 5.7% in 1997. Net income in 1999 increased to $377.6 million, reflecting a 6.1% increase over 1998 net income of $355.8 million. Net income in 1998 increased 4% over 1997 net income of $342.4 million. Diluted earnings per share were $2.11 in 1999 compared to $1.98 in 1998 for an increase of 6.6%.
LIQUIDITY AND SOURCES OF CAPITAL: The ratio of current assets to current liabilities was 3.2 to 1 at the close of 1999 with current assets amounting to 73.7% of total assets. Trade accounts receivable and inventories increased 10.9% and 6.7% respectively, while working capital increased 6.1%. Excluding the impact of acquisitions made in 1999, the increases in accounts receivable and inventory would have been 6.4% and 3.4%, respectively. The increase in working capital has been financed principally from the Company's cash flow generated by operations. At December 31, 1998, $95 million was outstanding under an unsecured revolving line of credit with a bank. This line was canceled during 1999. In 1998, the Company obtained a $200 million revolving line of credit maturing in December 2003. At December 31, 1999, $200 million was outstanding on this line. Also during 1998, the Company obtained a $200 million, 364 day line of credit maturing in December, 2000. At December 31, 1999, $16.8 million was outstanding on this line. Interest on these lines is charged at the one month LIBOR plus .55% (6.37% as of December 31, 1999) and is reset quarterly based on the Company's leverage ratio. No amounts were outstanding at December 31, 1998 under these lines of credit.
At December 31, 1999, the Company had the following unsecured term notes: $50 million, 5.95%, due 2001; $50 million, 5.98%, due 2002; $50 million, LIBOR plus .25%, due 2005; $50 million, LIBOR plus .25%, due 2008; $231 million, LIBOR plus .55%, due 2003; $49 million, 6.43% due 2000; and $72 million in other borrowings. In addition, the weighted average interest rate on the Company's outstanding borrowings was approximately 6.3% and 5.7% at December 31, 1999 and 1998, respectively. Total interest expense for all borrowings was $41.5 million and $20.1 million in 1999 and 1998 respectively.
In addition, the Company had the following Canadian dollar denominated borrowings translated into U.S. dollars at December 31, 1999: $100 million line of credit, banker's acceptance rate plus
EARNINGS PER SHARE* DIVIDENDS PER SHARE*
in dollars in dollars
'90 1.19 '90 .61
'91 1.21 '91 .65
'92 1.27 '92 .67
'93 1.38 '93 .71
'94 1.55 '94 .77
'95 1.68 '95 .84
'96 1.81 '96 .89
'97 1.90 '97 .96
'98 1.98 '98 1.00
'99 2.11 '99 1.04
|
*Restated to reflect stock splits.
.55%, due 2004, $22 million outstanding; a line of credit secured by accounts receivable, $42 million, banker's acceptance rate plus .22%; and $2 million in other borrowings.
In August 1999, the Company completed the repurchase of 15 million shares authorized by the Board of Directors in 1994. The Board authorized the repurchase of an additional 15 million shares on April 19, 1999. Through December 31, 1999, approximately 1.4 million shares have been repurchased under this new authorization.
Existing credit facilities, current financial resources and anticipated funds from operations are expected to meet requirements for working capital in 2000. Capital expenditures during 1999 and 1998 amounted to $88 million compared to $90 million in 1997. The amounts reflect the Company's continuing geographic expansion as well as the upgrading of existing facilities. It is anticipated that capital expenditures in 2000 will be approximately the same as 1999.
The Company manages its exposure to changes in short-term interest rates, particularly to reduce the impact on its floating-rate term notes, by entering into interest rate swap agreements. The counterparties to these contracts are high credit quality commercial banks. Consequently, credit risk, which is inherent in all swaps, has been minimized to a large extent. Interest expense is adjusted for the differential to be paid or received as interest rates change. The effect of such adjustments on interest expense has not been significant. The level of floating-rate debt not fixed by swap agreements was approximately $429 million at December 31, 1999. Accordingly, a 1% adverse change in interest rates would not have a material adverse impact on future earnings and cash flows of the Company.
IMPACT OF YEAR 2000: In prior years, the Company discussed the nature and progress of its plans to become Year 2000 ready. In late 1999, the Company completed its remediation and testing of systems. As a result of those planning and implementation efforts, the Company experienced no significant disruptions in mission critical information technology and non-information technology systems and believes those systems successfully responded to the Year 2000 date change. The Company is not aware of any material problems resulting from Year 2000 issues, either with its products, its internal systems, or the products and services of third parties. The Company will continue to monitor its mission critical computer applications and those of its suppliers and vendors throughout the year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly.
FORWARD-LOOKING STATEMENTS: The Private Securities Litigation Reform Act of 1995 (the Act) provides a safe harbor for forward-looking statements made by or on behalf of the Company. The Company and its representatives may from time to time make written or verbal forward-looking statements, including statements contained in our Company's filings with the Securities and Exchange Commission and in our reports to shareholders. All statements which address operating performance, events or developments that we expect or anticipate will occur in the future, including statements relating to revenue, market share and net income growth, or statements expressing general optimism about future operating results, are forward-looking statements within the meaning of the Act. The forward-looking statements are and will be based on management's then current views and assumptions regarding future events and operating performance. There are many factors which could cause actual results to differ materially from those anticipated by statements made herein. Such factors include, but are not limited to, changes in general economic conditions, the growth rate of the market for the Company's products and services, the ability to maintain favorable supplier arrangements and relationships, competitive product and pricing pressures, the effectiveness of the Company's promotional, marketing and advertising programs, changes in laws and regulations, including changes in accounting and taxation guidance, the uncertainties of litigation, as well as other risks and uncertainties discussed from time to time in the Company's filings with the Securities and Exchange Commission.
QUARTERLY RESULTS OF OPERATIONS: Miscellaneous year-end adjustments resulted in increasing net income during the fourth quarter of 1999 and 1998 by approximately $35.7 million ($.20 per share) and $27.7 million ($.15 per share), respectively. Miscellaneous year-end adjustments primarily relate to changes in management's estimates and assumptions related to the valuation of inventory, the calculation of volume purchasing rebates earned and other adjustments to judgmental reserves which cannot be accurately determined until the end of the year.
The following is a summary of the quarterly results of operations for the years ended December 31, 1999 and 1998.
Three Months Ended
-----------------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
-----------------------------------------------------------------------------------
(in thousands except for per share data)
1999
----
Net Sales $1,901,357 $2,022,894 $2,082,229 $1,975,207
Gross Profit 550,890 590,057 603,164 650,019
Net Income 86,066 92,569 90,637 108,350
Basic Net Income per
Common Share .48 .52 .51 .61
Diluted Net Income
per Common Share .48 .52 .51 .61
1998
----
Net Sales $1,533,138 $1,619,383 $1,760,102 $1,701,409
Gross Profit 446,736 477,403 514,425 563,943
Net Income 79,998 85,884 86,139 103,773
Basic Net Income per
Common Share .45 .48 .48 .58
Diluted Net Income
per Common Share .45 .48 .48 .58
|
SEGMENT DATA
Year Ended December 31,
Dollars in thousands 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------
Net sales:
Automotive $4,084,775 $3,262,406 $3,071,153 $3,008,105 $2,804,086
Industrial 2,156,134 2,008,789 1,853,270 1,677,859 1,509,566
Office products 1,218,367 1,122,420 1,080,822 1,034,510 948,252
Electrical/electronic material 522,411 220,417 -- -- --
---------------------------------------------------------------------------------------------------------------------------
Total net sales $7,981,687 $6,614,032 $6,005,245 $5,720,474 $5,261,904
===========================================================================================================================
Operating profit
Automotive $ 396,871 $ 343,629 $ 325,188 $ 322,956 $ 308,818
Industrial 186,203 176,456 166,367 151,129 133,016
Office products 118,345 113,821 110,793 103,439 93,997
Electrical/electronic materials 23,343 12,030 -- -- --
---------------------------------------------------------------------------------------------------------------------------
Total operating profit 724,762 645,936 602,348 577,524 535,831
Interest expense (41,487) (20,096) (13,365) (8,498) (3,419)
Corporate expense (35,324) (32,186) (26,943) (29,057) (25,939)
Equity in (loss) income from investees (3,675) 3,329 6,730 9,398 8,298
Goodwill amortization (12,708) (5,157) (1,624) (1,548) (1,265)
Minority interest (3,501) (2,709) (1,546) (2,586) (2,712)
---------------------------------------------------------------------------------------------------------------------------
Income before income taxes $ 628,067 $ 589,117 $ 565,600 $ 545,233 $ 510,794
===========================================================================================================================
Assets:
Automotive $2,034,417 $1,966,774 $1,623,644 $1,478,023 $1,304,211
Industrial 758,206 671,454 584,356 524,998 479,652
Office products 503,904 442,220 380,804 376,616 357,821
Electrical/electronic materials 174,258 147,074 -- -- --
Corporate 18,588 18,385 18,611 15,662 12,876
Goodwill and equity investments 440,299 354,473 146,948 126,332 119,572
---------------------------------------------------------------------------------------------------------------------------
Total assets $3,929,672 $3,600,380 $2,754,363 $2,521,631 $2,274,132
===========================================================================================================================
Depreciation and amortization:
Automotive $ 51,563 $ 43,637 $ 40,675 $ 34,265 $ 29,147
Industrial 10,926 8,619 6,688 5,860 4,985
Office products 8,814 8,391 7,865 7,437 6,705
Electrical/electronic materials 4,173 1,508 -- -- --
Corporate 1,783 1,993 2,015 1,335 1,132
Goodwill 12,708 5,157 1,624 1,548 1,265
---------------------------------------------------------------------------------------------------------------------------
Total depreciation and amortization $ 89,967 $ 69,305 $ 58,867 $ 50,445 $ 43,234
===========================================================================================================================
Capital expenditures:
Automotive $ 57,710 $ 69,154 $ 68,305 $ 80,682 $ 67,643
Industrial 11,275 6,972 13,451 7,330 12,132
Office products 16,085 6,901 6,069 5,652 10,587
Electrical/electronic materials 3,113 4,688 -- -- --
Corporate 100 546 2,600 1,494 407
---------------------------------------------------------------------------------------------------------------------------
Total capital expenditures $ 88,283 $ 88,261 $ 90,425 $ 95,158 $ 90,769
===========================================================================================================================
Net sales:
United States $7,345,707 $6,535,020 $5,977,012 $5,697,053 $5,241,653
Canada 585,504 79,012 28,233 23,421 20,251
Mexico 50,476 -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
Total net sales $7,981,687 $6,614,032 $6,005,245 $5,720,474 $5,261,904
===========================================================================================================================
Net long-lived assets:
United States $ 620,837 $ 545,452 $ 412,344 $ 366,119 $ 323,167
Canada 207,672 187,951 6,495 6,725 7,576
Mexico 25,333 15,338 15,767 16,196 16,625
---------------------------------------------------------------------------------------------------------------------------
Total net long-lived assets $ 853,842 $ 748,741 $ 434,606 $ 389,040 $ 347,368
===========================================================================================================================
|
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
Dollars in thousands 1999 1998
-----------------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 45,735 $ 84,972
Trade accounts receivable 1,006,663 907,561
Merchandise inventories 1,771,789 1,660,233
Prepaid expenses and other assets 71,016 30,591
-----------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 2,895,203 2,683,357
Goodwill, less accumulated amortization (1999--$25,286; 1998--$12,578) 440,299 344,733
Other Assets 180,627 168,282
PROPERTY, PLANT AND EQUIPMENT:
Land 40,912 40,238
Buildings, less allowance for depreciation (1999--$90,305; 1998--$85,107) 138,012 131,712
Machinery and equipment, less allowance for depreciation
(1999--$312,716; 1998--$270,467) 234,619 232,058
-----------------------------------------------------------------------------------------------------------------------------
NET PROPERTY, PLANT AND EQUIPMENT 413,543 404,008
-----------------------------------------------------------------------------------------------------------------------------
$3,929,672 $3,600,380
=============================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 581,010 $ 509,532
Current portion of long-term debt and other borrowings 133,056 156,316
Accrued compensation 69,956 54,696
Other accrued expenses 58,603 31,252
Dividends payable 45,355 44,776
Income taxes payable 28,032 21,837
-----------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 916,012 818,409
LONG-TERM DEBT 702,417 588,640
DEFERRED INCOME TAXES 87,466 94,956
MINORITY INTERESTS IN SUBSIDIARIES 46,260 45,043
SHAREHOLDERS' 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 177,275,602 shares
in 1999; 179,505,151 shares in 1998 177,276 179,505
Additional paid-in capital -- 19,989
Accumulated other comprehensive income (6,857) (3,110)
Retained earnings 2,007,098 1,856,948
-----------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 2,177,517 2,053,332
-----------------------------------------------------------------------------------------------------------------------------
$3,929,672 $3,600,380
=============================================================================================================================
|
See accompanying notes.
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
Dollars in thousands, except per share data 1999 1998 1997
-------------------------------------------------------------------------------------------------------------------
Net Sales $7,981,687 $6,614,032 $6,005,245
Cost of goods sold 5,587,557 4,611,525 4,178,642
-------------------------------------------------------------------------------------------------------------------
2,394,130 2,002,507 1,826,603
Selling, administrative and other expenses 1,766,063 1,413,390 1,261,003
-------------------------------------------------------------------------------------------------------------------
Income before income taxes 628,067 589,117 565,600
Income taxes 250,445 233,323 223,203
-------------------------------------------------------------------------------------------------------------------
NET INCOME $ 377,622 $ 355,794 $ 342,397
===================================================================================================================
Basic net income per common share $ 2.11 $ 1.98 $ 1.91
===================================================================================================================
Diluted net income per common share $ 2.11 $ 1.98 $ 1.90
===================================================================================================================
Average common shares outstanding 178,746 179,416 179,592
Dilutive effect of stock options and non-vested restricted stock awards 492 665 573
-------------------------------------------------------------------------------------------------------------------
Average common shares outstanding--assuming dilution 179,238 180,081 180,165
===================================================================================================================
|
See accompanying notes.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Accumulated
Common Stock Additional Other Total
----------------------- Paid-in Comprehensive Retained Shareholders'
Dollars in thousands Shares Amount Capital Income Earnings Equity
----------------------------------------------------------------------------------------------------------------------------------
Balance at January 1, 1997 180,048,435 $180,048 $ -- $ -- $1,552,006 $1,732,054
Net income -- -- -- -- 342,397 342,397
----------
Comprehensive income 342,397
----------
Cash dividends declared -- -- -- -- (172,334) (172,334)
Stock options exercised,
including tax benefit 656,443 657 12,270 -- -- 12,927
Purchase of stock (2,427,927) (2,428) (32,784) -- (41,549) (76,761)
Stock issued in connection
with acquisitions 671,025 671 20,514 -- -- 21,185
----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997 178,947,976 178,948 -- -- 1,680,520 1,859,468
Net income -- -- -- -- 355,794 355,794
Foreign currency translation adjustment -- -- -- (3,110) -- (3,110)
----------
Comprehensive income 352,684
----------
Cash dividends declared -- -- -- -- (179,366) (179,366)
Stock options exercised,
including tax benefit 284,153 284 5,465 -- -- 5,749
Purchase of stock (2,311,580) (2,312) (74,023) -- -- (76,335)
Stock issued in connection
with acquisitions 2,584,602 2,585 88,547 -- -- 91,132
----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 179,505,151 179,505 19,989 (3,110) 1,856,948 2,053,332
Net income -- -- -- -- 377,622 377,622
Foreign currency translation adjustment -- -- -- (3,747) -- (3,747)
----------
Comprehensive income 373,875
----------
Cash dividends declared -- -- -- -- (185,870) (185,870)
Stock options exercised 322,003 322 6,168 -- -- 6,490
Purchase of stock (3,863,353) (3,863) (65,663) -- (41,602) (111,128)
Stock issued in connection
with acquisitions 1,311,801 1,312 37,772 -- -- 39,084
Other -- -- 1,734 -- -- 1,734
----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999 177,275,602 $177,276 $ -- $(6,857) $2,007,098 $2,177,517
==================================================================================================================================
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
Dollars in thousands 1999 1998 1997
--------------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income $ 377,622 $ 355,794 $ 342,397
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 89,967 69,305 58,867
Gain on sale of property, plant and equipment (4,595) (1,664) (5,014)
Provision for deferred taxes 12,347 10,379 13,843
Equity in loss (income) from investees 3,675 (3,329) (6,730)
Income applicable to minority interests 3,501 2,709 1,546
Changes in operating assets and liabilities:
Trade accounts receivable (42,846) (74,165) (63,715)
Merchandise inventories (28,671) (107,290) (87,777)
Trade accounts payable 12,104 14,158 3,299
Other, net (56,857) 18,388 (6,107)
--------------------------------------------------------------------------------------------------------------------------------
(11,375) (71,509) (91,788)
--------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 366,247 284,285 250,609
INVESTING ACTIVITIES
Purchase of property, plant and equipment (88,283) (88,261) (90,425)
Proceeds from sale of property, plant and equipment 10,254 67,522 11,580
Acquisition of businesses, net of cash acquired (89,272) (310,911) (16,045)
Other 4,848 6,088 (7,870)
--------------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (162,453) (325,562) (102,760)
FINANCING ACTIVITIES
Proceeds from credit facilities 2,579,675 1,173,359 949,000
Payments on credit facilities (2,530,429) (874,175) (860,712)
Stock options exercised 6,490 5,749 12,927
Dividends paid (184,247) (178,027) (169,156)
Purchase of stock (111,128) (76,335) (76,761)
Other (3,328) 2,905 2,303
--------------------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (242,967) 53,476 (142,399)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (64) (50) --
--------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (39,237) 12,149 5,450
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 84,972 72,823 67,373
--------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 45,735 $ 84,972 $ 72,823
================================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Income taxes $ 244,250 $ 200,280 $ 212,178
================================================================================================================================
Interest $ 39,888 $ 18,867 $ 12,871
================================================================================================================================
|
See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Genuine Parts Company and all of its subsidiaries (the "Company"). Income applicable to minority interests is included in other expenses. Significant intercompany accounts and transactions have been eliminated in consolidation.
USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States 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.
FOREIGN CURRENCY TRANSLATION The balance sheets and statements of income of the Company's foreign subsidiaries have been translated into U.S. dollars at the current and average exchange rates, respectively.
CASH EQUIVALENTS The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
MERCHANDISE INVENTORIES Merchandise inventories are valued at the lower of cost or market. Cost is determined by the last-in, first-out (LIFO) method for a majority of automotive parts, electrical/electronic materials, and industrial parts, and by the first-in, first-out (FIFO) method for office products and certain other inventories. If the FIFO method had been used for all inventories, cost would have been $141,041,000 and $134,814,000 higher than reported at December 31, 1999 and December 31, 1998, respectively.
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is stated on the basis of cost. Depreciation is determined principally on a straight-line basis over the estimated useful life of each asset.
GOODWILL Goodwill, which represents the excess of the purchase price paid over the fair value of the net assets acquired in connection with business acquisitions, is amortized over a period of 40 years.
LONG-LIVED ASSETS Long-lived assets, including goodwill, are periodically reviewed for impairment based on an assessment of future operations. The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount.
OTHER ASSETS Other assets consists primarily of a prepaid pension asset.
FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount reflected in the consolidated balance sheets for cash, cash equivalents, accounts receivable, long-term debt and other borrowings approximate their respective fair values. Fair values are based primarily on quoted prices for those or similar instruments.
REVENUE RECOGNITION The Company recognizes revenues from product sales upon shipment to its customers.
NET INCOME PER COMMON SHARE Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the year. The computation of diluted net income per common share includes the dilutive effect of stock options and non-vested restricted stock awards. Options to purchase 4,265,000 shares of common stock at prices ranging from $26 to $35 per share were outstanding during 1999 but were not included in the computation of diluted net income per common share because the options' exercise price was greater than the average market price of the common shares. The dilutive effect of options to purchase 748,312 shares of common stock at an average exercise price of approximately $7 per share issued in connection with a July 1, 1998 acquisition have been included in the computation of diluted net income per common share since the date of the acquisition.
NEW ACCOUNTING PRONOUNCEMENTS In June 1998, the FASB issued Statement No. 133, Accounting for Derivative Instruments and for Hedging Activities. The statement requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value assets, liabilities, or firm commitments through earnings or recognized in comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. The Company is required to adopt Statement No. 133 in 2001, however, management does not expect its adoption to have a significant impact on the Company's financial position or results of operation.
2. ACQUISITIONS
In 1999, the Company acquired certain distributors in 14 separate transactions. The aggregate purchase price for all 1999 acquisitions was approximately $126,900,000. Net sales included in the consolidated statement of income associated with the 1999 transactions totals approximately $311,400,000. Effective
July 1, 1999, the Company made an additional $5,300,000 investment in Grupo Auto Todo, a Mexico-based automotive parts distributor, increasing the Company's equity ownership to 73%.
On July 1, 1998, the Company acquired EIS, Inc. and subsidiaries ("EIS"), a distributor of electrical/electronic materials for a combination of cash and stock valued at approximately $180,000,000, which includes certain non-compete agreements.
On December 1, 1998, the Company acquired the remaining outstanding shares of UAP Inc., a Montreal, Canada-based automotive parts distributor, for cash totaling approximately $231,000,000. The Company also made other individually insignificant acquisitions during 1998.
All 1999 and 1998 acquisitions were accounted for under the purchase method of accounting. Goodwill, representing the excess of the purchase price over the fair value of the net assets acquired, totaled approximately $108,300,000 and $287,799,000 for the 1999 and 1998 acquisitions, respectively. All acquired businesses are included in the Company's consolidated statements of income from the dates of acquisition.
The Company's unaudited pro forma results of operations for 1999 and 1998 applicable to 1999 acquisitions is not significantly different from the Company's actual results of operations. The following table summarizes the Company's unaudited pro forma results of operations for 1998 and 1997 as if the 1998 acquisitions had occurred on January 1, 1997:
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS 1998 1997 -------------------------------------------------------------------------- Pro forma net sales $7,351,037 $7,055,103 Pro forma net income $ 359,133 $ 344,681 Pro forma basic net income per common share $ 2.00 $ 1.92 Pro forma diluted net income per common share $ 1.99 $ 1.91 |
The pro forma results presented above include adjustments to reflect interest expense on borrowings for the acquisitions, amortization of assets acquired including intangibles, and the effect on weighted average outstanding shares of common stock and stock options issued in connection with certain acquisitions.
These pro forma unaudited results of operations do not purport to represent what the Company's actual results of operations would have been if the acquisitions had occurred on January 1, 1997, and should not serve as a forecast of the Company's operating results for any future periods. The pro forma adjustments are based solely upon certain assumptions that management believes are reasonable under the circumstances at this time.
3. CREDIT FACILITIES
Amounts outstanding under the Company's credit facilities consist of the following:
December 31
IN THOUSANDS 1999 1998
--------------------------------------------------------------------------------
U.S. DOLLAR DENOMINATED BORROWINGS:
Unsecured revolving line of credit,
$200,000,000, Libor plus .55%
due December 2003 $200,000 $ --
Unsecured 364 day line of credit,
$200,000,000, Libor plus .55%,
due December 2000 16,800 --
Unsecured revolving lines of credit,
$100,000,000, federal funds rate
plus .10%, due May 1999 -- 95,000
Unsecured term notes:
December 27, 1996, 5.95% fixed until
March 2000, then Libor plus .25%
due December 2001 50,000 50,000
October 31, 1997, 5.98% fixed until
October 2000, then the higher of 5.98%
or Libor plus .25%, due October 2002 50,000 50,000
July 1, 1998, Libor plus .25%,
due October 2008 50,000 50,000
October 1, 1998, Libor plus .25%,
due October 2008 50,000 50,000
December 26, 1995, 5.98% fixed,
due December 2000 -- 50,000
September 18, 1997, 6.125% fixed,
due September 2002 -- 50,000
December 1, 1998, Libor plus .55%,
due December 2003 231,367 231,367
December 10, 1999, 6.43% fixed,
due February 2000 49,464 --
Other borrowings 71,858 12,259
CANADIAN DOLLAR DENOMINATED BORROWINGS
TRANSLATED INTO U.S. DOLLARS:
Unsecured revolving lines of credit,
$100,000,000, Banker's Acceptance rate
plus .55%, due January 2004 22,144 47,706
Line of credit, $41,544,000 and $49,013,000
at December 31, 1999 and 1998,
respectively, secured by accounts
receivable, Banker's Acceptance rate
plus .22%, cancelable on 30 days notice
or due March 2003 41,544 49,013
Other borrowings 2,296 --
Unsecured demand loan, Libor plus .25% -- 9,611
--------------------------------------------------------------------------------
835,473 744,956
Current portion of long-term debt and
other borrowings 133,056 156,316
--------------------------------------------------------------------------------
$702,417 $588,640
================================================================================
|
The principal amount of the Company's borrowings subject to variable rates totaled approximately $674,602,000 and $532,697,000 at December 31, 1999 and 1998, respectively. The weighted average interest rate on the Company's outstanding borrowings was approximately 6.3% and 5.7% at December 31, 1999 and 1998, respectively.
The Company enters into interest rate swap agreements to manage interest rate risk, thereby reducing exposure to future interest rate movements. Under interest rate swap agreements, the parties agree to exchange, at specific intervals, the difference between the fixed rate and floating rate interest amounts calculated by reference to an agreed notional amount. At December 31, 1999, the Company was committed to receive an average variable rate of 5.9% and pay an average fixed rate of 5.6% on notional amounts of $245,696,000. The Company's notional amounts of interest rate swaps expire as follows: $27,696,000 in 2003, $100,000,000 in 2008 and $118,000,000 in 2009. The fair value of all such interest rate swap agreements was approximately $9,500,000 at December 31, 1999.
The Company guaranteed borrowings of affiliates totaling approximately $62,400,000 at December 31, 1999.
The $231,367,000 term note also contains one restrictive covenant, whereby the Company must maintain a debt to equity ratio not greater than 50%. Total interest expense for all borrowings was $41,487,000 in 1999, $20,096,000 in 1998 and $13,365,000 in 1997.
Approximate maturities under the Company's credit facilities are as follows (in thousands):
2000 $133,056
2001 62,890
2002 62,916
2003 443,906
2004 1,079
Subsequent to 2004 131,626
---------------------------------
$835,473
=================================
|
4. SHAREHOLDERS' EQUITY
The Company has a Shareholder Protection Rights Agreement which includes the distribution of rights to common shareholders under certain defined circumstances. The rights entitle the holder, upon occurrence of certain events, to purchase additional stock of the Company. The rights will be exercisable only if a person, group or company acquires 20% or more of the Company's common stock or commences a tender offer that would result in ownership of 20% or more of the common stock. The Company is entitled to redeem each right for one cent.
5. LEASED PROPERTIES
The Company leases land, buildings and equipment. Certain land and building leases have renewal options generally for periods ranging from two to ten years. Future minimum payments, by year and in the aggregate, under the noncancellable operating leases with initial or remaining terms of one year or more consisted of the following at December 31, 1999 (in thousands):
2000 $ 83,922
2001 64,724
2002 49,049
2003 35,730
2004 25,634
Subsequent to 2004 101,746
---------------------------------
$360,805
=================================
|
In November 1998, the Company sold land and buildings with a carrying value of approximately $50,000,000 under a sale leaseback arrangement. A gain of approximately $10,000,000 was deferred and is being amortized over the term of the lease. Rental expense for operating leases was $100,546,000 in 1999, $76,834,000 in 1998, and $65,137,000 in 1997.
6. STOCK OPTIONS AND RESTRICTED STOCK AWARDS
The Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and related interpretations in accounting for its employee stock options because, as discussed below, the alternative fair value accounting provided for under FASB Statement No. 123, "Accounting for Stock-Based Compensation," requires use of option valuation models that were not developed for use in valuing employee stock options. Under APB 25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.
In 1999, the Company authorized the grant of options of up to 9,000,000 shares of common stock. In accordance with stock option plans approved by shareholders, options are granted to key personnel for the purchase of the Company's stock at prices not less than the fair market value of the shares on the dates of grant. Most options may be exercised not earlier than twelve months nor later than ten years from the date of grant.
Pro forma information regarding net income and earnings per share is
required by Statement 123 determined as if the Company had accounted for its
employee stock options granted subsequent to December 31, 1994 under the fair
value method of that Statement. The fair value for these options was estimated
at the date of grant using a Black-Scholes option pricing model with the
following weighted-average assumptions for 1999 and 1997, respectively:
risk-free interest rates of 5.5% and 6.4%; dividend yield of 3.5% and 2.5%;
volatility factor of the expected market price of the Company's common stock of
.07 and .12, and an expected life of the option of 7.1 years and 5.4 years. No
options were granted during 1998.
The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have
no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows (in thousands except per share amounts):
1999 1998 1997
--------------------------------------------------------------------------------------------
Pro forma net income........................................ $374,801 $351,875 $338,978
Pro forma basic net income per common share................. $ 2.10 $ 1.96 $ 1.89
Pro forma diluted net income per common share............... $ 2.09 $ 1.95 $ 1.88
|
A summary of the Company's stock option activity and related information are as follows:
1999 1998 1997
-----------------------------------------------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
Shares Exercise Shares Exercise Shares Exercise
(000's) Price (000's) Price (000's) Price
-----------------------------------------------------------------------------------------------------------
Outstanding at beginning of year............. 3,827 $26 3,588 $29 2,743 $23
Granted...................................... 2,046 32 -- -- 1,790 35
Issued in connection with acquisitions....... -- -- 748 7 -- --
Exercised.................................... (430) 23 (413) 24 (907) 20
Forfeited.................................... (55) 33 (96) 35 (38) 21
------ ------ ------
Outstanding at end of year................... 5,388 $28 3,827 $26 3,588 $29
====== ====== ======
Exercisable at end of year................... 2,715 $27 2,792 $26 1,363 $24
====== ====== ======
Weighted-average fair value of options
granted during the year.................... $ 3.78 $ -- $ 6.13
====== ====== ======
Shares available for future grants........... 8,735 1,726 1,572
====== ====== ======
|
Exercise prices for options exercised during 1999 ranged from approximately $17 to $35. Exercise prices for options outstanding as of December 31, 1999 ranged from approximately $18 to $35, except for 748,312 options granted in connection with the 1998 acquisition of EIS discussed in Note 2 for which the range is approximately $0.54 to $16. The weighted-average remaining contractual life of those options is approximately 6 years.
On February 25, 1999, the Company entered into restricted stock agreements with two officers which provide for the award of up to 150,000 and 75,000 shares, respectively, during the period 1999 through 2003 based on the Company achieving certain increases in net income per common share and stock price levels. Through December 31, 1999, the two officers have earned 15,000 and 7,500 shares, respectively. The Company recognizes compensation expense equal to the fair market value of the stock on the award date over the remaining vesting period which expires on February 25, 2009.
7. INCOME TAXES
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:
In thousands 1999 1998
--------------------------------------------------------------------------------
Deferred tax assets related to:
Expenses not yet deducted for tax purposes................ $ 48,249 $ 47,545
Other..................................................... 3,324 1,104
------------------------------------------------------------------------ -------
51,573 48,649
Deferred tax liabilities related to:
Employee and retiree benefits............................. 69,489 64,261
Inventory................................................. 41,980 40,704
Property and equipment.................................... 26,156 26,049
Other..................................................... 16,881 16,412
------------------------------------------------------------------------ -------
154,506 147,426
Net deferred tax liability.................................. 102,933 98,777
Current portion of deferred tax liability (included in
income taxes payable)..................................... 15,467 3,821
--------------------------------------------------------------------------------
Non-current deferred tax liability......................... $ 87,466 $ 94,956
================================================================================
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The components of income tax expense are as follows:
In thousands 1999 1998 1997
------------------------------------------------------------------------
Current:
Federal $200,188 $184,397 $171,676
State 37,910 38,547 37,684
Deferred 12,347 10,379 13,843
------------------------------------------------------------------------
$250,445 $233,323 $223,203
========================================================================
|
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:
In thousands 1999 1998 1997
-------------------------------------------------------------------------
Statutory rate applied to
pre-tax income $219,824 $206,191 $197,960
Plus state income taxes,
net of Federal tax benefit 24,641 25,056 24,494
Other 5,980 2,076 749
-------------------------------------------------------------------------
$250,445 $233,323 $223,203
=========================================================================
|
8. EMPLOYEE BENEFIT PLANS
The Company's noncontributory defined benefit pension plan covers substantially all of its employees. The benefits are based on an average of the employees' compensation during five of their last ten years of credited service. The Company's funding policy is to contribute amounts deductible for income tax purposes. Contributions are intended to provide not only for benefits attributed for service to date but also for those expected to be earned in the future. Pension benefits include amounts related to a supplemental retirement plan.
Pension Benefits Other Postretirement Benefits
In thousands 1999 1998 1999 1998
-------------------------------------------------------------------------------------------------------------------------
CHANGES IN BENEFIT OBLIGATION
Net benefit obligation at beginning of year $566,868 $454,083 $1,427 $ 2,999
Service cost 21,564 16,427 118 (76)
Interest cost 40,332 34,629 (11) 138
Plan participants' contributions -- -- 2,716 2,359
Actuarial (gain) loss (36,608) 82,711 (266) (711)
Gross benefits paid (17,660) (20,982) (3,564) (3,282)
-------------------------------------------------------------------------------------------------------------------------
Net benefit obligation at end of year $574,496 $566,868 $ 420 $ 1,427
=========================================================================================================================
CHANGES IN PLAN ASSETS
Fair value of plan assets at beginning of year $647,439 $590,733 $ -- $ --
Actual return on plan assets 30,220 69,848 -- --
Employer contributions 10,492 7,840 848 924
Plan participants' contribution -- -- 2,716 2,358
Gross benefits paid (17,660) (20,982) (3,564) (3,282)
------------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year $670,491 $647,439 $ -- $ --
========================================================================================================================
|
The follow table sets forth the funded status of the plans and the amount recognized in the balance sheet at December 31.
Pension Benefits Other Postretirement Benefits
In thousands 1999 1998 1999 1998
----------------------------------------------------------------------------------------------------------------------
Funded status at end of year $ 95,995 $ 80,571 $ (420) $(1,427)
Unrecognized net actuarial loss 72,740 76,434 (2,614) (2,799)
Unrecognized prior service cost (14,702) (18,020) -- --
Unrecognized net transition obligation 521 781 -- --
----------------------------------------------------------------------------------------------------------------------
Net amount recognized at end of year $154,554 $139,766 $(3,034) $(4,226)
======================================================================================================================
|
Net pension cost (income) included the following components:
Pension Benefits Other Postretirement Benefits
In thousands 1999 1998 1997 1999 1998 1997
---------------------------------------------------------------------------------------------------------------------
Service cost $ 21,564 $ 16,427 $15,631 $118 $ (76) $ (48)
Interest cost 40,332 34,629 31,650 (11) 138 242
Expected return on plan assets (64,146) (59,123) (47,957) -- -- --
Amortization of unrecognized transition obligation 260 260 260 -- -- --
Amortization of prior service cost (2,840) (2,865) (2,409) -- -- --
Amortization of actuarial loss (gain) 499 471 1,214 237 (180) (140)
---------------------------------------------------------------------------------------------------------------------
Net periodic pension (income) cost $ (4,331) $(10,201) $(1,611) $344 $(118) $ 54
=====================================================================================================================
|
The assumptions used in the accounting for the defined benefit plans and postretirement plan are as follows:
Pension Benefits Other Postretirement Benefits
1999 1998 1999 1998
-------------------------------------------------------------------------------------------------------------------
Weighted-average discount rate 7.75% 7.10% 7.75% 7.10%
Rate of increase in future compensation levels 4.15% 4.15% -- --
Expected long-term rate of return on assets 10.00% 10.00% -- --
Health care cost trend on covered charges -- -- 8.00% 8.25%
-------------------------------------------------------------------------------------------------------------------
|
The effect of a one percentage point change in the 1999 assumed health care cost trend is as follows:
In thousands Decrease Increase ---------------------------------------------------------------------------- Total service and interest cost components on net periodic postretirement health care benefit cost $ (127) $ 185 Accumulated postretirement benefit obligation for health care benefits (1,254) 1,786 ---------------------------------------------------------------------------- |
At December 31, 1999, the Company sponsored pension plan held 870,369 shares of common stock of the Company with a market value of approximately $21,600,000. Dividend payments received by the plan on Company stock totaled approximately $901,000 and $840,000 in 1999 and 1998, respectively. Fees paid during the year for services rendered by parties-in-interest were based on customary and reasonable rates for such services.
The Company has a defined contribution plan which covers substantially all of its employees. The Company's contributions are determined based on 20% of the first 6% of the covered employee's salary. Total plan expense was approximately $4,599,000 in 1999, $4,491,000 in 1998, and $3,953,000 in 1997.
9. SEGMENT DATA
The segment data for the past five years presented on page 24 is an integral part of these financial statements.
The Company is primarily engaged in the distribution of merchandise, principally automotive and industrial replacement parts, office supplies, and electrical/electronic materials throughout the United States, Canada and Mexico.
In the automotive segment, the Company distributes replacement parts (other than body parts) for substantially all makes and models of automobiles, trucks and buses. In addition, this segment of the business includes the rebuilding of some automotive parts and the distribution of replacement parts for certain types of farm equipment, motorcycles, motorboats and small engines.
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.
The Company's office products segment distributes a wide variety of office products, computer supplies, office furniture and business electronics.
The Company's electrical/electronic materials segment distributes a wide variety of electrical/electronic materials, including insulating and conductive materials for use in electronic and electrical apparatus.
Intersegment sales are not significant. Operating profit for each industry segment is calculated as net sales less operating expenses excluding general corporate expenses, interest expense, equity in income from investees, goodwill amortization and minority interests. Net long-lived assets by country relate directly to the Company's operations in the respective country. Corporate assets are principally cash, cash equivalents and headquarters' facilities and equipment.
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
JURISDICTION OF
NAME % OWNED INCORPORATION
--------------------------------------------------------------------------------------------------------
BALKAMP 100.0% INDIANA
EIS, INC. 100.0% GEORGIA
GENUINE PARTS COMPANY, LTD 100.0% ALBERTA, CANADA
GENUINE PARTS HOLDINGS, LTD 100.0% ALBERTA, CANADA
GPC MEXICO, S.A. de C.V. 100.0% PUEBLA, MEXICO
GPC TRADING CORPORATION 100.0% VIRGIN ISLANDS
HORIZON USA DATA SUPPLY, INC. 100.0% NEVADA
HUB SUPPLY, INC. 100.0% KANSAS
JOHNSON INDUSTRIES 100.0% ATLANTA, GA
L.O.C.O.A. LAMINATING COMPANY OF AMERICA 100.0% CALIFORNIA
MANCO TRUCKING 100.0% ILLINOIS
MJDH HOLDINGS LTD. 100.0% BRITISH COLUMBIA/CANADA
MOTION INDUSTRIES 100.0% DELAWARE
MOTION INDUSTRIES (CANADA), INC. 100.0% OTTAWA, ONTARIO
NORWESTRA HOLDINGS 100.0% ALBERTA, CANADA
NORWESTRA SALES (1992), INC. 100.0% BRITISH COLUMBIA/CANADA
S.P. RICHARDS 100.0% GEORGIA
SCOTTSDALE TOOL & SUPPLY de MEXICO, S.A. de C.V. 100.0% GUADALAJARA, JALISCO - MX
UAP INC. 100.0% QUEBEC, CANADA
1ST CHOICE AUTO PARTS, INC. 51.0% GEORGIA
A & M PARTS, INC. 51.0% GEORGIA
ANN ARBOR AUTO SUPPLY, INC. 51.0% GEORGIA
AUTO & TRUCK PARTS OF SANTA FE, INC. 51.0% GEORGIA
AUTO PAINT & SUPPLY CO. OF LEXINGTON, INC. 51.0% GEORGIA
AUTO PARTS OF CHANUTE INCORPORATED 51.0% GEORGIA
AUTO PARTS OF DAYTONA, INC. 51.0% GEORGIA
AUTO PARTS OF EAST BRUNSWICK, INC. 51.0% GEORGIA
AUTO PARTS OF JUPITER, INC. 51.0% GEORGIA
AUTO PARTS OF PALMDALE, INC. 51.0% GEORGIA
AUTOMOTIVE PARTS OF QUITMAN, INC. 70.0% GEORGIA
BACK BAY AUTO PARTS, INC. 51.0% GEORGIA
BAD AXE AUTO SUPPLY, INC. 51.0% GEORGIA
BAY VIEW AUTO PARTS, INC. 70.0% GEORGIA
BIG HORN AUTO PARTS, INC. 51.0% GEORGIA
BIG TWIN AUTOMOTIVE, INC. 70.0% GEORGIA
BOONE COUNTY AUTOMOTIVE, INC. 51.0% GEORGIA
BROOKINGS AUTO PARTS, INC, 51.0% GEORGIA
C&O AUTO PARTS, INC. 51.0% GEORGIA
CAL-DAVIS AUTO & TRUCK PARTS, INC. 51.0% GEORGIA
CAROLINA LOWCOUNTRY, INC. 70.0% GEORGIA
CAROLINA PIEDMONT CORPORATION 51.0% GEORGIA
CASCADE AUTO & TRUCK SUPPLY, INC. 51.0% GEORGIA
CASS CITY AUTO & TRUCK, INC. 70.0% GEORGIA
CEDAR CITY AUTO PARTS, INC. 51.0% GEORGIA
CENTRAL NEBRASKA SUPPLY CO. 51.0% GEORGIA
CEREAL CITY AUTO PARTS, INC. 51.0% GEORGIA
CHEMUNG RIVER AUTO SUPPLY, INC. 51.0% GEORGIA
CLINTON COUNTY AUTO SUPPLY, INC. 51.0% GEORGIA
COCHISE AUTO PARTS, INC. 51.0% GEORGIA
COLORADO MOTOR PARTS, INC. 51.0% GEORGIA
CORNERSTONE AUTOMOTIVE PRODUCTS, INC. 51.0% GEORGIA
|
JURISDICTION OF
NAME % OWNED INCORPORATION
--------------------------------------------------------------------------------------------------------
CRESWELL AUTO & TRUCK SUPPLY, INC. 51.0% GEORGIA
CROSS TIMBERS AUTO SUPPLY, INC. 51.0% GEORGIA
CRYSTAL RIVER AUTO PARTS, INC. 51.0% GEORGIA
DALTON AUTO, TRUCK, AND INDUSTRIAL PARTS, INC. 70.0% GEORGIA
DIAMOND G AUTO PARTS OF BEAUMONT, INC. 51.0% GEORGIA
EAST TENN AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
ELKTON AUTO SUPPLY, INC. 51.0% GEORGIA
EMERALD VALLEY AUTO PARTS, INC. 51.0% GEORGIA
FAIRFIELD AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
FIRST CLASS AUTO PARTS, INC. 70.0% GEORGIA
FIRST PARTS OF MOUNT AIRY, INC. 70.0% GEORGIA
FIRST SETTLEMENT AUTOMOTIVE, INC. 51.0% GEORGIA
FOOTHILLS AUTO SUPPLY, INC. 51.0% GEORGIA
GAINESVILLE AUTO SUPPLY, INC. 51.0% GEORGIA
GATEWAY AUTO PARTS, INC. 51.0% GEORGIA
GILA AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
GOLD STREAM AUTO PARTS, INC. 51.0% GEORGIA
GRAND CANYON AUTO SUPPLY, INC. 51.0% GEORGIA
GRAND PRAIRIE AUTO SUPPLY, INC. 70.0% GEORGIA
GRANTS TRUCK & AUTO SUPPLY, INC. 51.0% GEORGIA
GRANTSVILLE AUTO PARTS, INC. 51.0% GEORGIA
GREENE COUNTRY AUTO PARTS, INC. 51.0% GEORGIA
GRIMM MANAGEMENT RESOURCES, INC. 51.0% GEORGIA
GROUNDHOG AUTO PARTS, INC. 51.0% GEORGIA
HANFORD AUTO & TRUCK PARTS, INC. 51.0% GEORGIA
HERTFORD COUNTY AUTO PARTS, INC. 51.0% GEORGIA
HOOD CANAL AUTO PARTS, INC. 51.0% GEORGIA
HOUGHTON LAKE AUTO SUPPLY, INC. 51.0% GEORGIA
HUNTINGTON - WHITLEY AUTO PARTS, INC. 51.0% GEORGIA
KENT-KANGLEY AUTO PARTS, INC. 51.0% GEORGIA
KEYSTONE CENTRAL AUTO PARTS, INC. 51.0% GEORGIA
KOLKON AUTO PARTS, INC. 51.0% GEORGIA
LABELLE AUTO AND TRUCK SUPPLY, INC. 51.0% GEORGIA
LAKE CITY AUTO PARTS, INC. 51.0% GEORGIA
LAKE COUNTY AUTOMOTIVE, INC. 51.0% GEORGIA
LAUDERDALE COUNTY SUPPLY, INC. 51.0% GEORGIA
LIVONIA AUTO SUPPLY, INC. 51.0% GEORGIA
LODI AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
LONGLAND CORP. 51.0% GEORGIA
LOUISVILLE AUTO SUPPLY, INC. 51.0% GEORGIA
MARION AUTO SUPPLY, INC. 51.0% GEORGIA
MARION AUTOMOTIVE PARTS, INCORPORATED 51.0% GEORGIA
McMINN COUNTY AUTOMOTIVE, INC. 51.0% GEORGIA
MIDDLETON AUTO & TRUCK PARTS, INC. 51.0% GEORGIA
MIDLAND AUTO AND TRUCK SUPPLY, INC. 70.0% GEORGIA
MIDLAND AUTO PARTS CORPORATION 51.0% GEORGIA
MODESTO AUTO AND TRUCK PARTS, INC. 51.0% GEORGIA
MOTOR INNOVATIONS, INC. 51.0% GEORGIA
N. V. AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
NORTHWEST AUTO PARTS, INC 51.0% GEORGIA
OSCODA AUTO AND TRUCK PARTS, INC. 51.0% GEORGIA
OVERTON COUNTY PARTS CENTER, INC. 51.0% GEORGIA
PARADISE AUTO PARTS, INC. 51.0% GEORGIA
PARTS & COMPANY OF SELMA, INC. 51.0% GEORGIA
PARTS CONNECTION, INC. 70.0% GEORGIA
PARTS OF COLUMBUS, INC. 51.0% GEORGIA
PARTS OF HILLSVILLE, INC. 70.0% GEORGIA
PARTS UNLIMITED, INC. 51.0% GEORGIA
PAYETTE RIVER PARTS CORP. 51.0% GEORGIA
|
JURISDICTION OF
NAME % OWNED INCORPORATION
--------------------------------------------------------------------------------------------------------
PENINSULA PARTS COMPANY 51.0% GEORGIA
POLYCO CORPORATION 70.0% GEORGIA
POTAMAC CREEK AUTO SUPPLY, INC 51.0% GEORGIA
PRAIRIE HILLS CORP. 51.0% GEORGIA
PRO CHOICE AUTOMOTIVE, INC. 51.0% GEORGIA
PUEBLO AUTOMOTIVE, INC. 51.0% GEORGIA
QUALITY AUTO PARTS OF LOS LUNAS, INCORPORATED 51.0% GEORGIA
RHINELANDER AUTO PARTS, INC. 51.0% GEORGIA
RIGBY AUTO SUPPLY, INC. 51.0% GEORGIA
RIO VERDE AUTO PARTS, INC. 51.0% GEORGIA
RKKC, INC. 51.0% GEORGIA
ROSEBURG AUTO & TRUCK SUPPLY, INC. 51.0% GEORGIA
SAN JOAQUIN PARTS CORPORATION, INC. 51.0% GEORGIA
SANILAC AUTO AND TRUCK PARTS, INC. 51.0% GEORGIA
SEASIDE AUTO PARTS, INC. 51.0% GEORGIA
SEQUOIA AUTO & TRUCK PARTS, INC. 51.0% GEORGIA
SERVICE FIRST AUTO, INC. 51.0% GEORGIA
SMITHFIELD AUTO PARTS, INC. 70.0% GEORGIA
SOUTH BURLINGTON AUTO PARTS, INC. 51.0% GEORGIA
SOUTH BURLINTON AUTO PARTS, INC. 51.0% GEORGIA
SOUTHERN INDIANA PARTS, INC. 51.0% GEORGIA
SPANISH FORK AUTO SUPPLY, INC. 51.0% GEORGIA
STANDARD MOTOR PARTS OF REIDSVILLE, INC. 51.0% GEORGIA
SUGAR RIVER AUTO PARTS, INC. 51.0% GEORGIA
SUMNER AUTO & TRUCK, INC. 51.0% GEORGIA
SUN VALLEY AUTO PARTS, INC. 51.0% GEORGIA
TERREBONNE PARISH AUTO PARTS, INC. 51.0% GEORGIA
THE FLOWERS COMPANY 51.0% NORTH CAROLINA
THE PARTS HOUSE, INC. 51.0% GEORGIA
THE PARTS STORE, INC. 51.0% GEORGIA
THE ROCK PARTS CO. 70.0% GEORGIA
THE WILBUR GROUP, INC. 51.0% GEORGIA
TNT SUPPLY, INC. 51.0% GEORGIA
TRI-MOUNT, INC. 70.0% GEORGIA
UNION COUNTY AUTO PARTS, INC. 51.0% GEORGIA
VICKSBURG AUTOMOTIVE,INC. 51.0% GEORGIA
WARRICK AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
WATSONVILLE AUTO SUPPLY, INC. 51.0% GEORGIA
WEST MARION COUNTY AUTO PARTS AND ACCESSORIES, INC. 70.0% GEORGIA
WEST MONROE AUTO PARTS, INC. 51.0% GEORGIA
WEST VOLUSIA AUTO SUPPLY, INC. 51.0% GEORGIA
WHITE COUNTY AUTO SUPPLY, INC. 51.0% GEORGIA
WHITNEY POINT UNIT PARTS, INC. 51.0% GEORGIA
WILMINGTON AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
|
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K) of Genuine Parts Company of our report dated February 4, 2000, included in the 1999 Annual Report to Shareholders of Genuine Parts Company.
Our audits also included the financial statement schedule of Genuine Parts Company listed in Item 14(a). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statements of Genuine Parts Company listed below of our report dated February 4, 2000, with respect to the consolidated financial statements and schedule of Genuine Parts Company incorporated by reference or included in the Annual Report (Form 10-K) for the year ended December 31, 1999.
o Registration Statement No. 33-62512 on Form S-8 pertaining to the 1992 Stock Option and Incentive Plan
o Registration Statement No. 333-21969 on Form S-8 pertaining to the Directors' Deferred Compensation Plan
o Registration Statement No. 333-61611 on Form S-8 pertaining to the Assumed Stock Options Under the Electrical Insulation Suppliers, Inc. 1993 Incentive Plan
o Registration Statement No. 333-76639 on Form S-8 pertaining to the Genuine Parts Company 1999 Long-Term Incentive Plan
/s/ Ernst & Young LLP
Atlanta, Georgia
March 10, 2000
|
| ARTICLE 5 |
| THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF GENUINE PARTS COMPANY FOR THE YEAR ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | YEAR |
| FISCAL YEAR END | DEC 31 1999 |
| PERIOD END | DEC 31 1999 |
| CASH | 45,735 |
| SECURITIES | 0 |
| RECEIVABLES | 1,006,663 |
| ALLOWANCES | 6,929 |
| INVENTORY | 1,771,789 |
| CURRENT ASSETS | 2,895,203 |
| PP&E | 413,543 |
| DEPRECIATION | 403,021 |
| TOTAL ASSETS | 3,929,672 |
| CURRENT LIABILITIES | 916,012 |
| BONDS | 702,417 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 177,276 |
| OTHER SE | 2,000,241 |
| TOTAL LIABILITY AND EQUITY | 3,929,672 |
| SALES | 7,981,687 |
| TOTAL REVENUES | 7,981,687 |
| CGS | 5,587,557 |
| TOTAL COSTS | 5,587,557 |
| OTHER EXPENSES | 1,724,576 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 41,487 |
| INCOME PRETAX | 628,067 |
| INCOME TAX | 250,445 |
| INCOME CONTINUING | 377,622 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 377,622 |
| EPS BASIC | 2.11 |
| EPS DILUTED | 2.11 |