GENUINE PARTS COMPANY
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
| |
|
|
|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the fiscal year ended
December 31, 2007
|
|
OR
|
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the transition period
from to
|
Commission file
number: 1-5690
GENUINE PARTS COMPANY
(Exact name of registrant as
specified in its charter)
| |
|
|
|
Georgia
|
|
58-0254510
|
(State or other jurisdiction
of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
2999 Circle 75 Parkway, Atlanta, Georgia
|
|
30339
|
|
(Address of principal executive
offices)
|
|
(Zip
Code)
|
770-953-1700
(Registrant’s telephone
number, including area code)
Securities registered pursuant to Section 12(b) of the
Act:
| |
|
|
|
Title of each class
|
|
Name of each exchange on which registered
|
|
|
|
Common Stock, $1 par value per share
|
|
New York Stock Exchange
|
Securities registered pursuant to Section 12(g) of the
Act: None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes þ No o
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Exchange
Act. Yes o No þ
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 þ No o
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. þ
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See definition of
“large accelerated filer”, “accelerated
filer” and “smaller reporting company” in
Rule 12b-2
of the Exchange Act.
Large accelerated
filer þ Accelerated
filer o Non-accelerated
filer o Smaller
reporting
company o
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes o No þ
As of June 30, 2007, the aggregate market value of the
registrant’s common stock held by non-affiliates of the
registrant was approximately $8,167,294,000 based on the closing
sale price as reported on the New York Stock Exchange.
Indicate the number of shares outstanding of each of the
issuer’s classes of common stock, as of the latest
practicable date.
| |
|
|
|
Class
|
|
Outstanding at February 15, 2008
|
|
|
|
Common Stock, $1 par value per share
|
|
165,305,021 shares
|
Specifically identified portions of the Company’s 2007
Annual Report are incorporated by reference into Parts I and II
of this
Form 10-K
and specifically identified portions of the Company’s
definitive Proxy Statement for the Annual Meeting of
Shareholders to be held on April 21, 2008 are incorporated
by reference into Part III of this
Form 10-K.
PART I.
ITEM 1. 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 2007, business was conducted
throughout the United States, in Canada and in Mexico from approximately 2,000 locations. 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.
Financial Information about Segments. For financial information regarding segments as well
as our geographic areas of operation, refer to “Segment Data” and to Note 9 of Notes to
Consolidated Financial Statements, both in the Company’s 2007 Annual Report filed as Exhibit 13 to
this report and both incorporated herein by reference.
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, 2007, the Company employed approximately 32,000 persons.
Available Information. The Company’s internet website can be found at www.genpt.com. The
Company makes available, free of charge through its internet website, access to the Company’s
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy
statement and other reports, as amended, as soon as reasonably practicable after such material is
filed with or furnished to the Securities and Exchange Commission (“SEC”). Additionally, our
corporate governance guidelines, codes of conduct and ethics, and charters of the Audit Committee
and the Compensation, Nominating and Governance Committee of our Board of Directors, as well as
information regarding our director nominating process and our procedure for shareholders to
communicate with our Board of Directors, are available on our website. We will furnish copies of
all of the above information free of charge upon request to our Corporate Secretary.
In Part III of the Form 10-K, we incorporate certain information by reference to our proxy
statement for our 2008 annual meeting of shareholders. We expect to file that proxy statement with
the SEC on or about February 29, 2008, and we will make it available through our website as soon as
reasonably practicable. Please refer to the proxy statement when it is available.
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, with approximately 95%
ownership, 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 375,000
available part numbers, the Company, in conjunction with NAPA, offers complete inventory,
cataloging, marketing, training and other programs in the automotive aftermarket.
During 2007, 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 and
operated in the United States by the Company; NAPA and TRACTION automotive parts distribution
centers and auto parts stores in the United States and Canada owned and operated by the Company and
NAPA Canada/UAP Inc. (“NAPA Canada/UAP”), a wholly-owned subsidiary of the Company; auto parts
stores and distribution centers in the United States operated by corporations in which the Company
owned either a minority or majority interest; auto parts stores in Canada operated by corporations
in which UAP owns a 50% interest; distribution centers in the United States owned by Balkamp, Inc.
(“Balkamp”), a majority-owned subsidiary of the Company; rebuilding plants in the United States
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 wholly-owned subsidiary of the Company.
Subsequent to December 31, 2007, the Company sold the stock of Johnson Industries, including
certain operations owned and operated by Johnson Industries, a wholly-owned subsidiary. Effective
February 1, 2008, the Company operates one distribution center under the name JI Chicago, LLC.
The Company has 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 40,000
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.
In 2007, the Company was a participant in a joint venture with Altrom Group, an import
automotive parts distributor headquartered in Vancouver, British Columbia, Canada. At December 31,
2007, the Company had a 45% interest in Altrom Canada Corp., with 15 Canadian locations. The
Company’s interest in Altrom America Corp., with two locations in the United States, was 90%.
Effective January 1, 2008, the Company increased its ownership interest in Altrom Canada Corp. and
Altrom America Corp. to 100%.
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, SUVs, buses, motorcycles, recreational vehicles and
farm vehicles. In addition, the Company distributes replacement parts for small engines, 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 90 different suppliers, approximately 53% of
2007 automotive parts 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 2007, the Company operated 58 domestic NAPA automotive parts
distribution centers located in 39 states and approximately 1,100 domestic company-owned NAPA AUTO
PARTS stores located in 43 states. At December 31, 2007, Genuine Parts Company owned either a
minority or majority interest in three corporations, which operated approximately 22 auto parts
stores in three states, and a subsidiary corporation operating three distribution centers in three
states.
NAPA Canada/UAP, founded in 1926, is a Canadian leader in the distribution and marketing of
replacement parts and accessories for automobiles and trucks. NAPA Canada/UAP employs approximately
3,900 people. The Company operates a network of 12 distribution centers supplying approximately
582 NAPA stores and 94 TRACTION wholesalers. TRACTION is a supplier of parts to small and large
fleet owners and operators and, together with NAPA stores, is a significant supplier to the mining
and forestry industries. These include approximately 211 company owned stores, 19 joint venture or
progressive owners in which NAPA Canada/UAP owns a 50% interest and approximately 446 independently
owned stores. NAPA and TRACTION operations supply bannered installers and independent installers
in all provinces of Canada, as well as networks of service station and repair shops operating under
the banners of national accounts. UAP is a licensee of the NAPA® name in Canada.
In Mexico, Auto Todo owns and operates eight distribution centers, four auto parts stores and
four tire centers. Auto Todo is a licensee of the NAPA® name in Mexico.
The Company’s domestic distribution centers serve approximately 4,700 independently owned NAPA
AUTO PARTS stores located throughout the market areas served in the United States. 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 24% 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 0.25% of the total sales of the Company.
Products. Distribution centers have access to over 375,000 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 that 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® name, a mark licensed to the Company by NAPA.
Related Operations. 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 43,000 products, which constitute the “Balkamp” line of products that
are distributed to the members of NAPA. These products are categorized into over 220 different
product groups purchased from approximately 600 domestic suppliers and 100 foreign manufacturers.
In addition, Balkamp operates two Redistribution Centers that provide NAPA with over 1,000 SKUs of
oils, chemicals and procurement items. BALKAMP®, a federally registered trademark, is important to
the sales and marketing promotions of the Balkamp organization. Balkamp has four distribution
centers located in Indianapolis and Plainfield, Indiana, Greenwood, Mississippi and West Jordan,
Utah.
The Company, through its Rayloc division, also operates four facilities where certain small
automotive parts are rebuilt or distributed to the members of NAPA under the NAPA® brand name.
Rayloc® is a mark licensed to the Company by NAPA.
The Company’s Heavy Vehicle Parts Group operates as TW Distribution, with one location in
Atlanta, Georgia, and Traction Heavy Duty parts stores, with seven locations in the United States.
This group distributes heavy vehicle parts through the NAPA system and direct to small fleet owners
and operators.
Segment Data. In the years ended December 31, 2007 and 2006, sales from the Automotive
Parts Group were approximately 49% of the Company’s net sales, as compared to 51% in 2005.
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 advantage for its
automotive parts distribution system. Such services include fast and frequent delivery,
obsolescence protection, parts cataloging (including the use of electronic NAPA AUTO PARTS
catalogs) and stock adjustment through a continuing parts classification system which allows
independent retailers (“jobbers”) 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, as well as marketing conferences and seminars, sales and advertising
manuals and training programs. Point of sale/inventory management is available through TAMS®
(Total Automotive Management Systems), a computer system designed and developed by the Company for
the NAPA AUTO PARTS stores.
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 that 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 that 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 retailers.
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 2007 operated 64
distribution centers located throughout the United States, 58 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® as part of
the trade name of their distribution centers and parts 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 and Canada. This group distributes bearings, mechanical power
transmission, industrial automation, hose, hydraulic and pneumatic components, industrial products
and material handling products. The Industrial Parts Group continues to enhance communication and
process activities through three distinct programs. These programs include: motionindustries.com,
an internet-based procurement system; MiSupplierConnect, a manufacturer communication and
fulfillment system; and inMotion, an internal employee communication source and operational
reporting system.
The Company distributes 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 Motion Industries (Canada), Inc. (“Motion
Canada”), an operating group in the Company’s North American structure.
During 2007, the Company acquired Jonesboro Bearing & Supply, with two locations; Canco Hose
and Fittings, Inc., with one location; Gerrish Bearing Company, with two locations; Meier
Transmission, with two locations; and Shuster Corporation, with one location. All of the acquired
companies are suppliers of industrial parts and supplies in the United States, with the exception
of Canco, which is located in British Columbia, Canada.
As of December 31, 2007, the Industrial Parts Group served more than 100,000 customers in all
types of industries located throughout the United States and Canada, including the automotive,
food, forest products, primary metal, paper, mining, petrochemical and pharmaceutical industries.
Distribution System. In North America, the Industrial Parts Group operates 470 branches, 10
distribution centers and 35 service centers as of December 31, 2007. The distribution centers stock
and distribute more than 80,000 different items purchased from more than 250 different suppliers.
The service centers provide hydraulic, hose and mechanical repairs for customers. Approximately
40% of 2007 total industrial product purchases were made from 10 major suppliers. Sales are
generated from the Industrial Parts Group’s branches located in 47 states, Puerto Rico and nine
provinces in Canada. 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 two distribution centers for the 48 Canadian branches serving
industrial and agricultural markets.
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 promptly meet 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.
Supply Agreements. Non-exclusive distributor agreements are in effect with most of the
Industrial Parts Group’s suppliers. The terms of these agreements vary; however, it has been the
experience of the Industrial Parts 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. The Company has
return privileges with most of its suppliers, which has protected the Company from inventory
obsolescence.
Segment Data. In the year ended December 31, 2007, sales from the Company’s Industrial Parts
Group approximated 31% of the Company’s net sales, as compared to 30% in 2006 and 29% in 2005.
Competition. The Industrial Parts Group competes with other distributors specializing in the
distribution of such items, general line distributors and others who provide similar services. To a
lesser extent, the Industrial Parts 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 business related products
that are used in the daily operation of businesses, schools, offices and institutions. Office
products fall into the general categories of computer supplies, imaging products, office furniture,
office machines, general office products, school supplies, cleaning and breakroom supplies, and
healthcare products.
The Office Products Group is represented in Canada through S. P. Richards Canada, a
wholly-owned subsidiary of the Company, and is headquartered near Toronto, Ontario. S. P. Richards
Canada services office product resellers throughout Canada from locations in Vancouver, Toronto,
Calgary, Edmonton and Winnipeg.
Distribution System. The Office Products Group distributes more than 40,000 items to over
7,000 business product resellers throughout the United States and Canada from a network of 44
distribution centers. This network of strategically located distribution centers provides
overnight delivery of the Company’s comprehensive product offering. Approximately 55% of the
Company’s 2007 total office products purchases were made from 10 major suppliers.
The Office Products Group sells strictly to resellers of office products. These resellers
include independently owned office product dealers, national office product superstores and mass
merchants, large contract stationers, mail order companies, Internet resellers and college
bookstores. Resellers are offered comprehensive marketing programs, which include print catalogs
and flyers, electronic content for reseller websites, and education and training resources.
Products. The Office Products Group distributes computer supplies including storage media,
printer supplies and computer accessories; office furniture including desks, credenzas, chairs,
chair mats, partitions, files and computer furniture; office machines including telephones,
answering machines, calculators, fax machines, multi-function copiers, printers, digital cameras,
laminators and shredders; general office supplies including desk accessories, business forms,
accounting supplies, binders, filing supplies, report covers, writing instruments, envelopes, note
pads, copy paper, mailroom supplies, drafting supplies and audiovisual supplies; school supplies
including bulletin boards, teaching aids and art supplies; healthcare products; janitorial supplies
including cleaning supplies, paper towels and trash can liners; and breakroom supplies including
napkins, utensils, snacks and beverages. S. P. Richards has return privileges with most of its
suppliers, which has protected the Company from inventory obsolescence.
While the Company’s inventory includes products from over 400 of the industry’s leading
manufacturers worldwide, S. P. Richards also markets nine proprietary brands of items. These
brands include: SPARCO®, an economical line of office supply basics; Compucessory™, a line of
computer accessories; Lorell, a line of office furniture; NATURE SAVER®, an offering of recycled
products; Elite Image™, a line of new and remanufactured toner cartridges, specialty paper and
labels; Integra, a line of writing instruments; Genuine Joe, a line of cleaning and breakroom
products; and Atlantic Breeze and Heat Runner, two lines of climate control products.
Segment Data. In the year ended December 31, 2007, sales from the Company’s Office Products
Group were approximately 16% of the Company’s net sales, as compared to 17% in 2006 and 2005.
Competition. In the distribution of office supplies to retail dealers, S. P. Richards
competes with many other wholesale distributors as well as with certain manufacturers of office
products.
ELECTRICAL/ELECTRONIC MATERIALS GROUP
The Electrical/Electronic Materials Group was formed on July 1, 1998 through the acquisition
of EIS, Inc. (“EIS”) headquartered in Atlanta, Georgia. This Group distributes materials to more
than 20,000 electrical and electronic manufacturers in North America. With 31 branch locations in
the United States, Puerto Rico, the Dominican Republic, Mexico and Canada, this Group distributes
over 100,000 items, from insulating and conductive materials to assembly tools and test equipment.
EIS also has three manufacturing facilities that provide custom fabricated parts.
Distribution System. The Electrical/Electronic Materials Group provides distribution
services to original equipment manufacturers, motor repair shops and assembly markets. EIS
actively utilizes its E-commerce Internet site to present its products to customers while allowing
these on-line visitors to conveniently purchase from a large product assortment.
Electrical and electronic products are distributed from warehouse locations in major user
markets throughout the United States, as well as in Mexico and Canada. The Company has return
privileges with some of its suppliers, which has protected the Company from inventory obsolescence.
Products. The Electrical/Electronic Materials Group distributes a wide variety of products
to customers from over 350 vendors. These products include custom fabricated flexible materials
that are used as components within a customer’s manufactured finished product in a variety of
market segments. Among the products distributed and fabricated are such items as magnet wire,
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 45% of 2007 total
Electrical/Electronic Materials Group purchases were made from 10 major suppliers.
Integrated Supply. The Electrical/Electronic Materials Group’s integrated supply programs
are a part of the marketing strategy, as a greater number of customers—especially national
accounts—are given the opportunity to participate in this low-cost, high-service capability. The
Group developed AIMS (Advanced Inventory Management System), a totally integrated, highly automated
solution for inventory management. The Group’s Integrated Supply offering also includes SupplyPro,
an electronic vending dispenser used to eliminate costly tool cribs, or in-house stores, at
customer warehouse facilities.
Segment Data. In the years ended December 31, 2007 and 2006, sales from the Company’s
Electrical/Electronic Materials Group approximated 4% of the Company’s sales, as compared to 3% in
2005.
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.
* * * * * * * * * *
ITEM 1A. RISK FACTORS.
Forward-Looking Statements
Some statements in this report, as well as in other materials we file with the SEC or otherwise
release to the public and in materials that we make available on our website, constitute
forward-looking statements that are subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Senior officers may also make verbal statements to analysts,
investors, the media and others that are forward-looking. Forward-looking statements may relate,
for example, to our future operations, prospects, strategies, financial condition, economic
performance (including growth and earnings), industry conditions and demand for our products and
services. The Company cautions that its forward-looking statements involve risks and
uncertainties, and while we believe that our expectations for the future are reasonable in view of
currently available information, you are cautioned not to place undue reliance on our
forward-looking statements. Actual results or events may differ materially from those indicated as
a result of various important factors. Such factors include, but are not limited to, those set
forth below and in other documents that we file with the SEC.
Forward-looking statements are only as of the date they are made, and the Company undertakes no
duty to update its forward-looking statements except as required by law. You are advised, however,
to review any further disclosures we make on related subjects in our Form 10-Q, Form 8-K and other
reports to the SEC.
Risks Relating to Our Company
We Depend on Our Relationships with Our Vendors.
As a distributor of automotive replacement parts, industrial parts, office products and
electrical/electronic materials, our business depends on developing and maintaining close and
productive relationships with our vendors. We depend on our vendors to sell us quality products at
favorable prices. Many factors outside our control may harm these relationships. For example,
financial or operational difficulties with a vendor could cause that vendor to increase the cost of
the products we purchase from it. Vendor consolidation could also limit the number of suppliers
from which we may purchase products and could materially affect the prices we pay for these
products. Also, consolidation among automotive parts or industrial parts and office product
suppliers could disrupt our relationship with some vendors. A disruption of our vendor
relationships or a disruption in our vendors’ operations could have a material adverse effect on
our business and results of operations.
Our Business and Results of Operations Could Be Impacted by Certain Laws.
We are subject to various federal, state, local and foreign laws and regulations relating to the
operation of our business, such as laws and regulations relating to environmental and employment
matters, as well as changes in accounting and taxation guidance. Because such laws and regulations
are subject to change without notice, we cannot anticipate the potential costs of compliance. On
the other hand, if we fail to comply with existing or future laws or regulations, we may be subject
to governmental or judicial fines or sanctions. There can be no assurance that the cost of
compliance, or a material failure by us to comply, with these laws and regulations will not have a
material adverse effect on us in the future.
Risks Relating to Our Industry
Our Business May Be Impacted by General Economic Conditions and Local, National and Global Events.
Our business and results of operations also may be impacted by general economic conditions,
conditions in local markets or other factors that we cannot control, including: job growth and
unemployment conditions, industrial output and capacity and capital expenditures, reduction in
manufacturing capacity in our targeted geographic markets due to consolidation and the transfer of
manufacturing capacity to foreign countries, weather, terrorist acts, pricing pressures of our
competitors and customers, shortages of fuel or interruptions in transportation systems, labor
strikes, work stoppages, or other interruptions to or difficulties in the employment of labor in
the major markets where we operate, changes in interest rates, inflation or currency exchange
rates, changes in accounting policies and practices and changes in regulatory policies and
practices.
Our Business May Be Materially Affected If Demand for Our Products Slows.
Our business depends on customer demand for the products that we distribute. Demand for these
products depends on many factors. With respect to our automotive group, the primary factors are:
the number of miles vehicles are driven annually, as higher vehicle mileage increases the need for
maintenance and repair; the quality of the vehicles manufactured by the original vehicle
manufacturers and the length of the warranty or maintenance offered on new vehicles; the number of
vehicles in current service that are six years old and older, as these vehicles are typically no
longer under the original vehicle manufacturers’ warranty and will need more maintenance and repair
than newer vehicles; restrictions on access to diagnostic tools and repair information imposed by
the original vehicle manufacturers or by governmental regulation; and the economy generally.
We Face Substantial Competition in the Industries in Which We Do Business.
The industries in which we do business are highly competitive. The sale of automotive and
industrial parts, office products and electronic materials is highly competitive and impacted by
many factors including name recognition, product availability, customer service, anticipating
changing customer preferences, store location, and pricing pressures. Increased competition among
distributors of automotive and industrial parts, office products and electronic materials,
including internet-related initiatives, could cause a material adverse effect on our results of
operations.
In particular, the market for replacement automotive parts is highly competitive and subjects us to
a wide variety of competitors. We compete primarily with national and regional auto parts chains,
independently owned regional and local automotive parts and accessories stores, automobile dealers
that supply manufacturer replacement parts and accessories, mass merchandisers and wholesale clubs
that sell automotive products and regional and local full service automotive repair shops. If we
are unable to continue to develop successful competitive strategies, including internet related
initiatives, or if our competitors develop more effective strategies, we could lose customers and
our sales and profits may decline.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2. PROPERTIES.
The Company’s headquarters and Automotive Parts Group headquarters are located in two adjacent
office buildings owned by the Company in Atlanta, Georgia.
The Company’s Automotive Parts Group currently operates 58 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, 2007, the Company operated
approximately 1,100 NAPA AUTO PARTS stores located in 43 states, and the Company owned either a
minority or majority interest in approximately 22 additional auto parts stores and three
distribution centers located in six states. Other than NAPA AUTO PARTS stores located within
Company owned distribution centers, the majority of the automotive parts stores in which the
Company has an ownership interest were operated in leased facilities. In addition, NAPA Canada/UAP
operates 12 distribution centers and approximately 230 automotive parts and TRACTION stores in
Canada, and Auto Todo operates eight distribution centers and eight stores and tire centers in
Mexico. These operations were operated in leased facilities.
The Company’s Automotive Parts Group also operates four Balkamp distribution centers, four
Rayloc rebuilding and distribution facilities and one transfer and shipping facility. Finally,
Altrom America operates two import parts distribution centers and the Heavy Vehicle Parts Group
operates one TW distribution center and seven Traction stores. These operations were operated
in leased facilities.
The Company’s Industrial Parts Group, operating through Motion and Motion Canada,
operates 10 distribution centers, 35 service centers and 470 branches. Approximately 90% of these
branches are operated in leased facilities.
The Company’s Office Products Group operates 39 facilities in the United States and five
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 28 locations in the United
States, one location in Puerto Rico, one location in the Dominican Republic, three locations in
Mexico and one location in Canada. All of this Group’s 34 facilities are operated in leased
buildings except one facility, which is owned.
For additional information regarding rental expense on leased properties, see Note 4 of Notes
to Consolidated Financial Statements on the Company’s 2007 Annual Report.
ITEM 3. LEGAL PROCEEDINGS.
The Company is subject to various legal and governmental proceedings, many involving routine
litigation incidental to the businesses, including approximately 1,300 product liability lawsuits
resulting from its national distribution of automotive parts and supplies. Many of these involve
claims of personal injury allegedly resulting from the use of automotive parts distributed by the
Company. While litigation of any type contains an element of uncertainty, the Company believes
that its defense and ultimate resolution of pending and reasonably anticipated claims will continue
to occur within the ordinary course of the Company’s business and that resolution of these claims
will not have a material adverse effect on the Company’s business, results of operations or
financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY.
Executive officers of the Company are elected by the Board of Directors and each 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. The current executive
officers of the Company are:
Thomas C. Gallagher, age 60, has been President of the Company since 1990, Chief Executive
Officer since August 2004 and Chairman of the Board since February 2005. Mr. Gallagher served as
Chief Operating Officer of the Company from 1990 until August 2004.
Jerry W. Nix, age 62, was appointed as a director of the Company and elected Vice-Chairman by
the Board of Directors in November 2005. He is Executive Vice President-Finance and Chief
Financial Officer of the Company, a position he has held since 2000. Previously, Mr. Nix held the
position of Senior Vice President-Finance from 1990 to 2000.
Robert J. Susor, age 62, has been the Executive Vice President of the Company since 2003. Mr.
Susor previously served as Senior Vice President-Market Development from 1991 to 2003.
Paul D. Donahue, age 51, was appointed Executive Vice President of the Company in August 2007.
Previously, Mr. Donahue was President and Chief Operating Officer of S.P. Richards Company from
2004 to 2007 and was Executive Vice President — Sales and Marketing in 2003, the year he joined
the Company. Prior to S. P. Richards, Mr. Donahue was President of Sanford North America, a
division of Newell Rubbermaid, from 1999 to 2002.
Larry R. Samuelson, age 61, was appointed President of the Automotive Parts Group in January
2004. Mr. Samuelson previously served as President, Chief Operating Officer and Chief Executive
Officer of NAPA Canada/UAP Inc. from February 2000 to January 2004.
PART II.
|
|
|
| ITEM 5. |
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Market Information Regarding Common Stock
Certain information required by this item is set forth under the heading “Market Price and
Dividend Information” in the Company’s 2007 Annual Report and is incorporated herein by reference.
Sales of Unregistered Securities
All of our sales of securities in 2007 were registered under the Securities Act of 1933, as
amended.
Issuer Purchases of Equity Securities
The following table provides information about the purchases of shares of the Company’s common
stock during the three month period ended December 31, 2007:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total |
|
|
|
|
|
Total Number of |
|
|
| |
|
Number of |
|
|
|
|
|
Shares Purchased |
|
Maximum Number of |
| |
|
Shares |
|
Average |
|
as Part of Publicly |
|
Shares That May Yet Be |
| |
|
Purchased |
|
Price Paid |
|
Announced Plans |
|
Purchased Under the Plans |
| Period |
|
(1) |
|
Per Share |
|
or Programs (2) |
|
or Programs |
| |
October 1, 2007 through October 31, 2007 |
|
|
634,003 |
|
|
$ |
48.53 |
|
|
|
624,000 |
|
|
|
11,553,976 |
|
| |
November 1, 2007 through November 30, 2007 |
|
|
745,308 |
|
|
$ |
48.13 |
|
|
|
745,308 |
|
|
|
10,808,668 |
|
| |
December 1, 2007 through December 31, 2007 |
|
|
486,114 |
|
|
$ |
47.39 |
|
|
|
483,553 |
|
|
|
10,325,115 |
|
| |
Totals |
|
|
1,865,425 |
|
|
$ |
48.07 |
|
|
|
1,852,861 |
|
|
|
10,325,115 |
|
| |
|
|
|
| (1) |
|
Includes shares surrendered by employees to the Company to satisfy tax withholding
obligations in connection with the vesting of shares of restricted stock, the exercise of
stock options and/or tax withholding obligations. |
| |
| (2) |
|
On August 21, 2006, the Board of Directors authorized the repurchase of 15 million shares,
and such repurchase plan was announced August 21, 2006. The authorization for this
repurchase plan continues until all such shares have been repurchased, or the repurchase
plan is terminated by action of the Board of Directors. |
ITEM 6. SELECTED FINANCIAL DATA.
Information required by this item is set forth under the heading “Selected Financial Data” in
the Company’s 2007 Annual Report and is incorporated herein by reference.
|
|
|
| ITEM 7. |
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Information required by this item is set forth under the heading “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in the Company’s 2007 Annual Report and
is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Information related to this item is set forth under the heading “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and in Note 3 of Notes to Consolidated
Financial Statements in the Company’s 2007 Annual Report and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required by this item is set forth in “Segment Data”, Consolidated Financial
Statements, Notes to Consolidated Financial Statements, in “Report of Independent Registered Public
Accounting Firm on the Financial Statements” and under the heading “Quarterly Results of
Operations” in the Company’s 2007 Annual Report and is incorporated herein by reference.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Management’s conclusion regarding the effectiveness of disclosure controls and procedures
As of the end of the period covered by this report, an evaluation was performed under the
supervision and with the participation of the Company’s management, including the Chief Executive
Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure
controls and procedures, as such term is defined in SEC Rule 13a-15(e). Based on that evaluation,
the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure
controls and procedures were effective, as of the end of the period covered by this report, to
provide reasonable assurance that information required to be disclosed in the Company’s reports
under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms, and that such information
is accumulated and communicated to the Company’s management, including the CEO and CFO, as
appropriate, to allow timely decisions regarding required disclosure.
Management’s report on internal control over financial reporting
A report of management’s assessment of our internal control over financial reporting as of
December 31, 2007 is set forth under the heading “Management’s Report on Internal Control over
Financial Reporting” in the Company’s 2007 Annual Report and is incorporated herein by reference.
Other control matters
There have been no changes in the Company’s internal control over financial reporting during
the Company’s fourth fiscal quarter ended December 31, 2007 that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Information required by this item is set forth under the heading “Nominees for Director”,
under the heading “Corporate Governance — Code of Conduct and Ethics”, under the heading “Corporate
Governance -Board Committees”, and under the heading “Section 16(a) Beneficial Ownership Reporting
Compliance” of
the Proxy Statement and is incorporated herein by reference. Certain information required by this
Item is
included in and incorporated by reference to Item “4A. Executive Officers of the Company”
of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Information required by this item is set forth under the headings “Executive Compensation”,
“Additional Information Regarding Executive Compensation”, “2007 Grants of Plan-Based Awards”,
“2007 Outstanding Equity Awards at Fiscal Year-End”, “2007 Option Exercises and Stock Vested”,
“2007 Pension Benefits”, “2007 Nonqualified Deferred Compensation”, “Post Termination Payments and
Benefits”, “Compensation, Nominating and Governance Committee Report”, “Compensation, Nominating
and Governance Committee Interlocks and Insider Participation”, and “Audit Committee Report” of the
Proxy Statement. All such information in the Proxy Statement is incorporated herein by reference,
except that the information contained in the Proxy Statement under the heading “Compensation,
Nominating and Governance Committee Report” or under the heading “Audit Committee Report” is
specifically not so incorporated herein by reference.
|
|
|
| ITEM 12. |
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
Certain information required by this item is set forth below. Additional information required
by this item is set forth under the headings “Security Ownership of Certain Beneficial Owners” and
“Security Ownership of Management” of the Proxy Statement and is incorporated herein by reference.
Equity Compensation Plan Information
The following table gives information as of December 31, 2007 about the common stock that may
be issued under all of the Company’s existing equity compensation plans:
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
(c) |
| |
|
|
|
|
|
|
|
|
|
Number of Securities |
| |
|
|
|
|
|
(b) |
|
Remaining Available for |
| |
|
|
|
|
|
Weighted Average |
|
Future Issuance Under |
| |
|
(a) |
|
Exercise Price of |
|
Equity Compensation |
| |
|
Number of Securities to |
|
Outstanding |
|
Plans (Excluding |
| |
|
be Issued Upon Exercise |
|
Options, |
|
Securities |
| |
|
of Outstanding Options, |
|
Warrants and |
|
Reflected in Column |
| Plan Category |
|
Warrants and Rights |
|
Rights |
|
(a)) |
| |
Equity
Compensation Plans
Approved by
Shareholders: |
|
|
179,027 |
(1) |
|
$ |
30.28 |
|
|
|
-0- |
|
|
|
|
4,819,040 |
(2) |
|
$ |
36.03 |
|
|
|
-0- |
|
|
|
|
1,316,650 |
(3) |
|
$ |
45.73 |
|
|
|
6,636,350 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Compensation
Plans Not Approved
by Shareholders: |
|
|
46,037 |
(4) |
|
|
n/a |
|
|
|
944,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
6,360,754 |
|
|
|
— |
|
|
|
7,580,893 |
|
|
|
|
| (1) |
|
Genuine Parts Company 1992 Stock Option and Incentive Plan, as amended |
| |
| (2) |
|
Genuine Parts Company 1999 Long-Term Incentive Plan, as amended |
| |
| (3) |
|
Genuine Parts Company 2006 Long-Term Incentive Plan |
| |
| (4) |
|
Genuine Parts Company Director’s Deferred Compensation Plan, as amended |
| |
| (5) |
|
All of these shares are available for issuance pursuant to grants of full-value stock
awards. |
|
|
|
| ITEM 13. |
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
Information required by this item is set forth under the headings “Corporate Governance —
Independent Directors” and “Transactions with Related Persons” of the Proxy Statement and is
incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Information required by this item is set forth under the heading “Proposal 2. Ratification of
Selection of Independent Auditors” of the Proxy Statement and is incorporated herein by reference.
PART IV.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Documents filed as part of this report
(1) Financial Statements
The following consolidated financial statements of Genuine Parts Company and subsidiaries,
included in the Annual Report, are incorporated herein by reference on Form 10-K.
Consolidated balance sheets — December 31, 2007 and 2006
Consolidated statements of income — Years ended December 31, 2007, 2006 and 2005
Consolidated statements of shareholders’ equity — Years ended December 31, 2007, 2006 and
2005
Consolidated statements of cash flows — Years ended December 31, 2007, 2006 and 2005
Notes to consolidated financial statements — December 31, 2007
(2) Financial Statement Schedules.
The following consolidated financial statement schedule of Genuine Parts Company and
subsidiaries, set forth immediately following the signature page of this report, is filed pursuant
to Item 15(c):
Schedule II — Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulations of
the Securities and Exchange Commission are not required under the related instructions or are
inapplicable, and therefore have been omitted.
(3) Exhibits. The following exhibits are filed as part of this report. The Company will
furnish a copy of any exhibit upon request to the Company’s Corporate Secretary.
| |
|
|
Exhibit 3.1
|
|
Amended and Restated Articles of Incorporation of the Company,
as amended April 23, 2007. (Incorporated herein by reference
from the Company’s Current Report on Form 8-K, dated April 23,
2007.) |
|
|
|
Exhibit 3.2
|
|
By-laws of the Company, as amended and restated August 20,
2007. (Incorporated herein by reference from the Company’s
Current Report on Form 8-K, dated August 20, 2007.) |
|
|
|
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.) |
| |
|
|
Exhibit 4.3
|
|
Note Purchase Agreement, dated November 30, 2001.
(Incorporated herein by reference from the Company’s Annual
Report on Form 10-K, dated March 7, 2002.) |
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 *
|
|
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 10.2 *
|
|
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 10.3 *
|
|
The Genuine Parts Company 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 10.4 *
|
|
Amendment No. 1 to the Genuine Parts Company
Tax-Deferred Savings Plan, dated June 1, 1996,
effective June 1, 1996. (Incorporated herein by
reference from the Company’s Annual Report on Form
10-K, dated March 7, 2005.) |
|
|
|
Exhibit 10.5 *
|
|
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 10.6 *
|
|
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 10.7 *
|
|
Amendment to the Genuine Parts Company 1992 Stock
Option and Incentive Plan, dated April 19, 1999,
effective April 19, 1999. (Incorporated herein by
reference from the Company’s Annual Report on Form
10-K, dated March 10, 2000.) |
|
|
|
Exhibit 10.8 *
|
|
Amendment No. 2 to the Genuine Parts Company
Tax-Deferred Savings Plan, dated April 19, 1999,
effective April 19, 1999. (Incorporated herein by
reference from the Company’s Annual Report on Form
10-K, dated March 10, 2000.) |
|
|
|
Exhibit 10.9 *
|
|
The Genuine Parts Company Original Deferred
Compensation Plan, as amended and restated as of
August 19, 1996. (Incorporated herein by reference
from the Company’s Annual Report on Form 10-K, dated
March 8, 2004.) |
|
|
|
Exhibit 10.10 *
|
|
Amendment to the Genuine Parts Company Original
Deferred Compensation Plan, dated April 19, 1999,
effective April 19, 1999. (Incorporated herein by
reference from the Company’s Annual Report on Form
10-K, dated March 10, 2000.) |
|
|
|
Exhibit 10.11 *
|
|
Amendment No. 3 to the Genuine Parts Company
Tax-Deferred Savings Plan, dated November 28, 2001,
effective July 1, 2001. (Incorporated herein by
reference from the Company’s Annual Report on Form
10-K, dated March 7, 2002.) |
| |
|
|
Exhibit 10.12 *
|
|
Genuine Parts Company 1999 Long-Term Incentive Plan,
as amended and restated as of November 19, 2001.
(Incorporated herein by reference from the
Company’s Annual Report on Form 10-K, dated March
21, 2003.) |
|
|
|
Exhibit 10.13 *
|
|
Amendment to the Genuine Parts Company 1992 Stock
Option and Incentive Plan, dated November 19, 2001,
effective November 19, 2001.
(Incorporated herein by reference from the
Company’s Annual Report on Form 10-K, dated March
21, 2003.) |
|
|
|
Exhibit 10.14 *
|
|
Genuine Parts Company Supplemental Retirement Plan,
as amended and restated effective January 1, 2003,
and executed October 22, 2003. (Incorporated
herein by reference from the Company’s Annual Report
on Form 10-K, dated March 8, 2004.) |
|
|
|
Exhibit 10.15 *
|
|
Amendment No. 1 to the Genuine Parts Company Supplemental Retirement
Plan, dated October 27, 2003, effective January 1, 2003. (Incorporated
herein by reference from the Company’s Annual Report on Form 10-K, dated
March 8, 2004.) |
|
|
|
Exhibit 10.16 *
|
|
Amendment No. 4 to the Genuine Parts Company Tax-Deferred Savings Plan, dated June 5, 2003,
effective June 5, 2003. (Incorporated herein by reference from the Company’s Annual Report
on Form 10-K, dated March 8, 2004.) |
|
|
|
Exhibit 10.17 *
|
|
Genuine Parts Company Directors’ Deferred Compensation Plan, as amended and restated effective
January 1, 2003, and executed November 11, 2003. (Incorporated herein by reference from
the Company’s Annual Report on Form 10-K, dated March 8, 2004.) |
|
|
|
Exhibit 10.18 *
|
|
Genuine Parts Company 2004 Annual Incentive Bonus Plan, effective January 1, 2004. (Incorporated
herein by reference from the Company’s Annual Report on Form 10-K, dated March 7, 2005.) |
|
|
|
Exhibit 10.19 *
|
|
Description of Director Compensation. (Incorporated herein by reference from the Company’s Annual
Report on Form 10-K, dated March 7, 2005.) |
|
|
|
Exhibit 10.20 *
|
|
Genuine Parts Company Stock Appreciation Rights Agreement. (Incorporated herein by reference from
the Company’s Annual Report on Form 10-K, dated March 7, 2005.) |
|
|
|
Exhibit 10.21 *
|
|
Amendment No. 5 to the Genuine Parts Company Tax-Deferred Savings Plan, dated December 28, 2005,
effective January 1, 2006. (Incorporated herein by reference from the Company’s Annual Report on
Form 10-K, dated March 3, 2006.) |
|
|
|
Exhibit 10.22 *
|
|
Amendment No. 2 to the Genuine Parts Company Supplemental Retirement Plan, dated November 9, 2005,
effective January 1, 2006. (Incorporated herein by reference from the Company’s Annual Report on
Form 10-K, dated March 3, 2006.) |
|
|
|
Exhibit 10.23 *
|
|
Amendment No. 3 to the Genuine Parts Company Supplemental Retirement Plan, dated December 28,
2005, effective January 1, 2006. (Incorporated herein by reference from the Company’s Annual
Report on Form 10-K, dated March 3, 2006.) |
| |
|
|
Exhibit 10.24 *
|
|
Amendment No. 2 to the Genuine Parts Company Death Benefit Plan, dated November 9, 2005, effective
April 1, 2005. (Incorporated herein by reference from the Company’s Annual Report on Form 10-K,
dated March 3, 2006.) |
|
|
|
Exhibit 10.25 *
|
|
Genuine Parts Company 2006 Long-Term Incentive Plan, effective April 17, 2006. (Incorporated
herein by reference from the Company’s Current Report on Form 8-K, dated April 18, 2006.) |
|
|
|
Exhibit 10.26 *
|
|
Amendment to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated November 20, 2006,
effective November 20, 2006. (Incorporated herein by reference from the Company’s Annual Report
on Form 10-K, dated February 28, 2007.) |
|
|
|
Exhibit 10.27 *
|
|
Amendment No. 4 to the Genuine Parts Company Supplemental Retirement Plan, dated November 28,
2007, effective January 1, 2008. |
|
|
|
Exhibit 10.28 *
|
|
Amendment No. 1 to the Genuine Parts Company Directors’ Deferred Compensation Plan, dated November
19, 2007, effective January 1, 2008. |
|
|
|
Exhibit 10.29 *
|
|
Amendment No. 6 to the Genuine Parts Company Tax-Deferred Savings Plan, dated November 28, 2007,
effective January 1, 2008. |
|
|
|
Exhibit 10.30 *
|
|
Amendment to the Genuine Parts Company 2004 Annual Incentive Bonus Plan, dated March 27, 2007,
effective March 27, 2007. |
|
|
|
Exhibit 10.31 *
|
|
Amendment No. 2 to the Genuine Parts Company 2004 Annual Incentive Bonus Plan, dated November 19,
2007, effective November 19, 2007. |
|
|
|
Exhibit 10.32 *
|
|
Amendment No. 2 to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated November 19,
2007, effective November 19, 2007. |
|
|
|
Exhibit 10.33 *
|
|
Genuine Parts Company Performance Restricted Stock Unit Award Agreement. |
|
|
|
Exhibit 10.34 *
|
|
Genuine Parts Company Restricted Stock Unit Award Agreement. |
|
|
|
Exhibit 10.35 *
|
|
Specimen Change in Control Agreement, as amended and restated as of November 19, 2007. |
|
|
|
| * |
|
Indicates management contracts and compensatory plans and arrangements. |
| |
|
|
Exhibit 13
|
|
The following sections and pages of the Company’s Annual Report to
Shareholders for the year ended December 31, 2007: |
| |
• |
|
Selected Financial Data on Page 13 |
| |
| |
• |
|
Market and Dividend Information on Page 13 |
| |
| |
• |
|
Segment Data on Page 15 |
| |
| |
• |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations on Pages 16-23 |
| |
| |
• |
|
Quarterly Results of Operations on Page 23 |
| |
| |
• |
|
Management’s Report on Internal Control over Financial Reporting on Page 24 |
| |
| |
• |
|
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting on Page 25 |
| |
| |
• |
|
Report of Independent Registered Public Accounting Firm on the Financial
Statements on Page 25 |
| |
| |
• |
|
Consolidated Financial Statements and Notes to Consolidated Financial
Statements on Pages 26-41 |
| |
|
|
Exhibit 21
|
|
Subsidiaries of the Company. |
|
|
|
Exhibit 23
|
|
Consent of Independent Registered Public Accounting Firm. |
|
|
|
Exhibit 31.1
|
|
Certification signed by Chief Executive Officer pursuant to
SEC Rule 13a-14(a). |
|
|
|
Exhibit 31.2
|
|
Certification signed by Chief Financial Officer pursuant to
SEC Rule 13a-14(a). |
|
|
|
Exhibit 32.1
|
|
Statement of Chief Executive Officer of Genuine Parts Company
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §
906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
Exhibit 32.2
|
|
Statement of Chief Financial Officer of Genuine Parts Company
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §
906 of the Sarbanes-Oxley Act of 2002. |
(b) Exhibits
See the response to Item 15(a)(3) above.
(c) Financial Statement Schedules
See the response to Item 15(a)(2) above.
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/ Thomas C. Gallagher
|
|
2/29/08
|
|
|
|
/s/ Jerry W. Nix
|
|
2/29/08 |
| |
|
|
|
|
Thomas C. Gallagher
|
|
(Date)
|
|
|
|
Jerry W. Nix
|
|
(Date) |
| Chairman, President and Chief Executive Officer |
|
|
|
Vice Chairman and Chief Financial and Accounting Officer |
Pursuant to the requirements of the Securities 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/ Dr. Mary B. Bullock
|
|
2/18/08
|
|
|
|
/s/ Richard W. Courts II
|
|
2/18/08 |
| |
|
|
|
|
Dr. Mary B. Bullock
|
|
(Date)
|
|
|
|
Richard W. Courts II
|
|
(Date) |
Director
|
|
|
|
|
|
Director |
|
|
|
|
|
|
|
|
|
|
|
/s/ Jean Douville
|
|
2/18/08
|
|
|
|
/s/ Thomas C. Gallagher
|
|
2/18/08 |
| |
|
|
|
|
Jean Douville
|
|
(Date)
|
|
|
|
Thomas C. Gallagher
|
|
(Date) |
Director
|
|
|
|
|
|
Director |
|
|
|
|
|
|
|
|
|
|
|
/s/ George C. Guynn
|
|
2/18/08
|
|
|
|
/s/ John D. Johns
|
|
2/18/08 |
| |
|
|
|
|
George C. Guynn
|
|
(Date)
|
|
|
|
John D. Johns
|
|
(Date) |
Director
|
|
|
|
|
|
Director |
|
|
|
|
|
|
|
|
|
|
|
/s/ Michael M.E. Johns
|
|
2/18/08
|
|
|
|
/s/ J. Hicks Lanier
|
|
2/18/08 |
| |
|
|
|
|
Michael M. E. Johns
|
|
(Date)
|
|
|
|
J. Hicks Lanier
|
|
(Date) |
Director
|
|
|
|
|
|
Director |
|
|
|
|
|
|
|
|
|
|
|
/s/ Wendy B. Needham
|
|
2/18/08
|
|
|
|
/s/ Jerry W. Nix
|
|
2/18/08 |
| |
|
|
|
|
Wendy B. Needham
|
|
(Date)
|
|
|
|
Jerry W. Nix
|
|
(Date) |
Director
|
|
|
|
|
|
Director |
|
|
|
|
|
|
|
|
|
|
|
/s/ Larry L. Prince
|
|
2/18/08
|
|
|
|
/s/ Gary W. Rollins
|
|
2/18/08 |
| |
|
|
|
|
Larry L. Prince
|
|
(Date)
|
|
|
|
Gary W. Rollins
|
|
(Date) |
Director
|
|
|
|
|
|
Director |
|
|
|
|
|
|
|
|
|
|
|
/s/ Lawrence G. Steiner
|
|
2/18/08 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Lawrence G. Steiner
|
|
(Date) |
|
|
|
|
|
|
Director |
|
|
|
|
|
|
|
|
Annual Report on Form 10-K
Item 15(c)
Financial Statement Schedule II — Valuation and Qualifying Accounts
Genuine Parts Company and Subsidiaries
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Balance at |
|
Charged |
|
|
|
|
|
Balance at |
| |
|
Beginning |
|
to Costs |
|
|
|
|
|
End |
| |
|
of Period |
|
and Expenses |
|
Deductions |
|
of Period |
Year ended December 31, 2005: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserves and allowances
deducted from asset
accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for
uncollectible
accounts |
|
$ |
12,792,806 |
|
|
$ |
16,355,525 |
|
|
$ |
(17,762,647 |
)1 |
|
$ |
11,385,684 |
|
Reserve for
facility
consolidations |
|
$ |
2,300,000 |
|
|
|
— |
|
|
$ |
(720,000 |
)2 |
|
$ |
1,580,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2006: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserves and allowances
deducted from asset
accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for
uncollectible
accounts |
|
$ |
11,385,684 |
|
|
$ |
16,472,494 |
|
|
$ |
(14,402,108 |
)1 |
|
$ |
13,456,070 |
|
Reserve for
facility
consolidations |
|
$ |
1,580,000 |
|
|
|
— |
|
|
$ |
(1,580,000 |
)2 |
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2007: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserves and allowances
deducted from asset
accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for
uncollectible
accounts |
|
$ |
13,456,070 |
|
|
$ |
13,513,715 |
|
|
$ |
(11,448,980 |
)1 |
|
$ |
15,520,805 |
|
|
|
|
| 1 |
|
Uncollectible accounts written off, net of recoveries. |
| |
| 2 |
|
Facility Consolidation expense paid. |
ANNUAL REPORT ON FORM 10-K
INDEX OF EXHIBITS
The following Exhibits are filed herewith as a part of this Report:
| |
|
|
10.27*
|
|
Amendment No. 4 to the Genuine Parts Company Supplemental Retirement Plan, dated November
28, 2007, effective January 1, 2008. |
|
|
|
10.28*
|
|
Amendment No. 1 to the Genuine Parts Company Directors’ Deferred Compensation Plan, dated
November 19, 2007, effective January 1, 2008. |
|
|
|
10.29*
|
|
Amendment No. 6 to the Genuine Parts Company Tax-Deferred Savings Plan, dated November 28,
2007, effective January 1, 2008. |
|
|
|
10.30*
|
|
Amendment to the Genuine Parts Company 2004 Annual Incentive Bonus Plan, dated March 27,
2007, effective March 27, 2007. |
|
|
|
10.31*
|
|
Amendment No. 2 to the Genuine Parts Company 2004 Annual Incentive Bonus Plan, dated
November 19, 2007, effective November 19, 2007. |
|
|
|
10.32*
|
|
Amendment No. 2 to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated November
19, 2007, effective November 19, 2007. |
|
|
|
10.33*
|
|
Genuine Parts Company Performance Restricted Stock Unit Award Agreement. |
|
|
|
10.34*
|
|
Genuine Parts Company Restricted Stock Unit Award Agreement. |
|
|
|
10.35*
|
|
Specimen Change in Control Agreement, as amended and restated as of November 19, 2007. |
|
|
|
13
|
|
The following sections and pages of the Company’s Annual Report to Shareholders for the year
ended December 31, 2007: |
| |
• |
|
Selected Financial Data on Page 13 |
| |
| |
• |
|
Market and Dividend Information on Page 13 |
| |
| |
• |
|
Segment Data on Page 15 |
| |
| |
• |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations on Pages 16-23 |
| |
| |
• |
|
Quarterly Results of Operations on Page 23 |
| |
| |
• |
|
Management’s Report on Internal Control over Financial Reporting on Page 24 |
| |
| |
• |
|
Report of Independent Registered Public Accounting Firm on Internal Control over Financial
Reporting on Page 25 |
| |
| |
• |
|
Report of Independent Registered Public Accounting Firm on the Financial Statements on Page 25 |
| |
| |
• |
|
Consolidated Financial Statements and Notes to Consolidated Financial Statements on Pages 26-41 |
| |
|
|
21
|
|
Subsidiaries of the Company. |
|
|
|
23
|
|
Consent of Independent Registered Public Accounting Firm. |
|
|
|
31.1
|
|
Certification signed by the Chief Executive Officer pursuant to SEC Rule 13a-14(a). |
|
|
|
31.2
|
|
Certification signed by the Chief Financial Officer pursuant to SEC Rule 13a-14(a). |
| |
|
|
32.1
|
|
Statement of Chief Executive Officer of Genuine Parts Company pursuant to 18 U.S.C. Section
1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2
|
|
Statement of Chief Financial Officer of Genuine Parts Company pursuant to 18 U.S.C. Section
1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002. |
The following Exhibits are incorporated by reference as set forth in Item 15 of this Form 10-K:
| |
|
|
- 3.1
|
|
Amended and Restated Articles of Incorporation of the Company, amended April 23, 2007. |
|
|
|
- 3.2
|
|
By-Laws of the Company as amended and restated August 20, 2007. |
|
|
|
- 4.2
|
|
Specimen Common Stock Certificate. |
|
|
|
- 4.3
|
|
Note Purchase Agreement dated November 30, 2001. |
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*
|
|
Form of Amendment to Deferred Compensation Agreement adopted February
13, 1989, between the Company and certain executive officers of the Company. |
|
|
|
- 10.2*
|
|
1992 Stock Option and Incentive Plan, effective April 20, 1992. |
|
|
|
- 10.3*
|
|
The Genuine Parts Company Restated Tax-Deferred Savings Plan, effective January 1, 1993. |
|
|
|
- 10.4*
|
|
Amendment No. 1 to the Genuine Parts Company Tax-Deferred Savings
Plan, dated June 1, 1996, effective June 1, 1996. |
|
|
|
- 10.5*
|
|
Genuine Parts Company Death Benefit Plan, effective July 15, 1997. |
|
|
|
- 10.6*
|
|
Restricted Stock Agreement dated February 25, 1999, between the Company
and Thomas C. Gallagher. |
|
|
|
- 10.7*
|
|
Amendment to the Genuine Parts Company 1992 Stock Option and Incentive
Plan, dated April 19, 1999, effective April 19, 1999. |
|
|
|
- 10.8*
|
|
Amendment to the Genuine Parts Company Tax-Deferred Savings Plan, dated
April 19, 1999, effective April 19, 1999. |
|
|
|
- 10.9*
|
|
The Genuine Parts Company Original Deferred Compensation Plan, as
amended and restated as of August 19, 1996. |
|
|
|
- 10.10*
|
|
Amendment to the Genuine Parts Company Original Deferred Compensation
Plan, dated April 19, 1999, effective April 19, 1999. |
|
|
|
- 10.11*
|
|
Amendment No. 3 to the Genuine Parts Company Tax-Deferred Savings
Plan, dated November 28, 2001, effective July 1, 2001. |
|
|
|
- 10.12*
|
|
Genuine Parts Company 1999 Long-Term Incentive Plan, as amended and
restated as of November 19, 2001. |
|
|
|
- 10.13*
|
|
Amendment to the Genuine Parts Company 1992 Stock Option and Incentive
Plan, dated November 19, 2001, effective November 19, 2001. |
|
|
|
- 10.14*
|
|
Genuine Parts Company Supplemental Retirement Plan, as amended and
restated effective January 1, 2003, and executed October 22, 2003. |
|
|
|
- 10.15*
|
|
Amendment No. 1 to the Genuine Parts Company Supplemental Retirement
Plan, dated October 27, 2003, effective January 1, 2003. |
|
|
|
- 10.16*
|
|
Amendment No. 4 to the Genuine Parts Company Tax-Deferred Savings
Plan, dated June 5, 2003, effective June 5, 2003. |
|
|
|
- 10.17*
|
|
Genuine Parts Company Directors’ Deferred Compensation Plan, as
amended and restated effective January 1, 2003, and executed November 11,
2003. |
|
|
|
- 10.18*
|
|
Genuine Parts Company 2004 Annual Incentive Bonus Plan,
effective January 1, 2004. |
|
|
|
- 10.19*
|
|
Description of Director Compensation. |
|
|
|
- 10.20*
|
|
Genuine Parts Company Stock Appreciation Rights Agreement. |
|
|
|
- 10.21*
|
|
Amendment No. 5 to the Genuine Parts Company Tax-Deferred Savings Plan. |
|
|
|
- 10.22*
|
|
Amendment No. 2 to the Genuine Parts Company Supplemental
Retirement Plan. |
|
|
|
- 10.23*
|
|
Amendment No. 3 to the Genuine Parts Company Supplemental Retirement Plan. |
|
|
|
- 10.24*
|
|
Amendment No. 2 to the Genuine Parts Company Death Benefit Plan. |
|
|
|
- 10.25*
|
|
Genuine Parts Company 2006 Long-Term Incentive Plan, effective April
17, 2006. |
|
|
|
- 10.26*
|
|
Amendment to the Genuine Parts Company 2006 Long-Term Incentive Plan,
dated November 20, 2006, effective November 20, 2006. |
|
|
|
| * |
|
Indicates management contracts and compensatory plans and arrangements. |