# Genuine Parts Company and Subsidiaries

Consolidated Statements of Income and Comprehensive Income

<table><tr><td rowspan="3"></td><td colspan="3">Year Ended December 31</td></tr><tr><td>2017</td><td>2016</td><td>2015</td></tr><tr><td colspan="3">(In Thousands, Except per Share Amounts)</td></tr><tr><td>Net sales</td><td>$    16,308,801</td><td>$    15,339,713</td><td>$    15,280,044</td></tr><tr><td>Cost of goods sold</td><td>11,402,403</td><td>10,740,106</td><td>10,724,192</td></tr><tr><td>Gross marign</td><td>4,906,398</td><td>4,599,607</td><td>4,555,852</td></tr><tr><td>Operating expenses:</td><td></td><td></td><td></td></tr><tr><td>Selling, administrative, and other expenses</td><td>3,705,136</td><td>3,370,833</td><td>3,277,390</td></tr><tr><td>Depreciation and amortization</td><td>167,691</td><td>147,487</td><td>141,675</td></tr><tr><td>Provision for doubtful accounts</td><td>13,932</td><td>11,515</td><td>12,373</td></tr><tr><td>Total operating expenses</td><td>3,886,759</td><td>3,529,835</td><td>3,431,438</td></tr><tr><td>Non­operating expenses (income) :</td><td></td><td></td><td></td></tr><tr><td>Interest expense</td><td>41,486</td><td>21,084</td><td>21,662</td></tr><tr><td>Other</td><td>(31,115)</td><td>(25,652)</td><td>(20,929)</td></tr><tr><td>Total non­operating expenses (income)</td><td>10,371</td><td>(4,568)</td><td>733</td></tr><tr><td>Income before income taxes</td><td>1,009,268</td><td>1,074,340</td><td>1,123,681</td></tr><tr><td>Income taxes</td><td>392,511</td><td>387,100</td><td>418,009</td></tr><tr><td>Net income</td><td>$       616,757</td><td>$       687,240</td><td>$       705,672</td></tr><tr><td>Basic net income per common share</td><td>$          4.19</td><td>$          4.61</td><td>$          4.65</td></tr><tr><td>Diluted net income per common share</td><td>$          4.18</td><td>$          4.59</td><td>$          4.63</td></tr><tr><td>Weihgted average common shares outstanding</td><td>147,140</td><td>149,051</td><td>151,667</td></tr><tr><td>Dilutive effect of stock options and nonvested restricted stock awards</td><td>561</td><td>753</td><td>829</td></tr><tr><td>Weihgted average common shares outstandinilg — assuming dution</td><td>147,701</td><td>149,804</td><td>152,496</td></tr><tr><td>Net income</td><td>$       616,757</td><td>$       687,240</td><td>$       705,672</td></tr><tr><td>Other comprehensive income (loss), net of tax:</td><td></td><td></td><td></td></tr><tr><td>Foreign currency translation adjustment</td><td>137,694</td><td>(8,957)</td><td>(207,986)</td></tr><tr><td>Net investment hedge, net of income taxes of 2017 — $9,711</td><td>(17,388)</td><td>—</td><td>—</td></tr><tr><td>Pension and postretirement benefit adjustments, net of income taxes of 2017
— ($20,539); 2016 — $50,144; 2015 — $5,335</td><td>40,123</td><td>(73,446)</td><td>(2,421)</td></tr><tr><td>Other comprehensive income (loss), net of tax</td><td>160,429</td><td>(82,403)</td><td>(210,407)</td></tr><tr><td>Comprehensive income</td><td>$       777,186</td><td>$       604,837</td><td>$      495,265</td></tr></table>

See accompanying notes.

# Genuine Parts Company and Subsidiaries

Consolidated Statements of Equity

(In Thousands, Except Share and per Share Amounts)

<table><tr><td></td><td colspan="2">Common Stock</td><td rowspan="2">Additional
Paid­In
Caiptal</td><td rowspan="2">Accumulated
Other
Comprehensive
Loss</td><td rowspan="2">Retained
Earnings</td><td rowspan="2">Total
Parent
Equity</td><td rowspan="2">Non-
controlling
Interests in
Subsidiaries</td><td rowspan="2">Total
Equity</td></tr><tr><td></td><td>Shares</td><td>Amount</td></tr><tr><td>Balance at January 1, 2015</td><td>153,113,042</td><td>$    153,113</td><td>$     26,414</td><td>$        (720,211)</td><td>$ 3,841,932</td><td>$ 3,301,248</td><td>$     11,116</td><td>$ 3,312,364</td></tr><tr><td>Net income</td><td>—</td><td>—</td><td>—</td><td>—</td><td>705,672</td><td>705,672</td><td>—</td><td>705,672</td></tr><tr><td>Other comprehensive loss,
net of tax</td><td>—</td><td>—</td><td>—</td><td>(210,407)</td><td>—</td><td>(210,407)</td><td>—</td><td>(210,407)</td></tr><tr><td>Cash dividends declared,
$2.46 per share</td><td>—</td><td>—</td><td>—</td><td>—</td><td>(372,840)</td><td>(372,840)</td><td>—</td><td>(372,840)</td></tr><tr><td>Share­based awards
exercised, including tax
benefit of $7,024</td><td>229,958</td><td>230</td><td>(2,778)</td><td>—</td><td>—</td><td>(2,548)</td><td>—</td><td>(2,548)</td></tr><tr><td>Share­based compensation</td><td>—</td><td>—</td><td>17,717</td><td>—</td><td>—</td><td>17,717</td><td>—</td><td>17,717</td></tr><tr><td>Purchase of stock</td><td>(3,261,526)</td><td>(3,262)</td><td>—</td><td>—</td><td>(289,013)</td><td>(292,275)</td><td>—</td><td>(292,275)</td></tr><tr><td>Noncontrolling interest
activities</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>1,559</td><td>1,559</td></tr><tr><td>Balance at December 31, 2015</td><td>150,081,474</td><td>150,081</td><td>41,353</td><td>(930,618)</td><td>3,885,751</td><td>3,146,567</td><td>12,675</td><td>3,159,242</td></tr><tr><td>Net income</td><td>—</td><td>—</td><td>—</td><td>—</td><td>687,240</td><td>687,240</td><td>—</td><td>687,240</td></tr><tr><td>Other comprehensive loss,
net of tax</td><td>—</td><td>—</td><td>—</td><td>(82,403)</td><td>—</td><td>(82,403)</td><td>—</td><td>(82,403)</td></tr><tr><td>Cash dividends declared,
$2.63 per share</td><td>—</td><td>—</td><td>—</td><td>—</td><td>(391,852)</td><td>(391,852)</td><td>—</td><td>(391,852)</td></tr><tr><td>Share­based awards
exercised, including tax
benefit of $12,021</td><td>340,703</td><td>341</td><td>(4,467)</td><td>—</td><td>—</td><td>(4,126)</td><td>—</td><td>(4,126)</td></tr><tr><td>Share­based compensation</td><td>—</td><td>—</td><td>19,719</td><td>—</td><td>—</td><td>19,719</td><td>—</td><td>19,719</td></tr><tr><td>Purchase of stock</td><td>(2,011,755)</td><td>(2,012)</td><td>—</td><td>—</td><td>(179,405)</td><td>(181,417)</td><td>—</td><td>(181,417)</td></tr><tr><td>Noncontrolling interest
activities</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>953</td><td>953</td></tr><tr><td>Balance at December 31, 2016</td><td>148,410,422</td><td>148,410</td><td>56,605</td><td>(1,013,021)</td><td>4,001,734</td><td>3,193,728</td><td>13,628</td><td>3,207,356</td></tr><tr><td>Net income</td><td>—</td><td>—</td><td>—</td><td>—</td><td>616,757</td><td>616,757</td><td>—</td><td>616,757</td></tr><tr><td>Other comprehensive
income, net of tax</td><td>—</td><td>—</td><td>—</td><td>160,429</td><td>—</td><td>160,429</td><td>—</td><td>160,429</td></tr><tr><td>Cash dividends declared,
$2.70 per share</td><td>—</td><td>—</td><td>—</td><td>—</td><td>(396,891)</td><td>(396,891)</td><td>—</td><td>(396,891)</td></tr><tr><td>Share­based awards
exercised, including tax
benefit of $3,134</td><td>131,232</td><td>132</td><td>(5,371)</td><td>—</td><td>—</td><td>(5,239)</td><td>—</td><td>(5,239)</td></tr><tr><td>Share­based compensation</td><td>—</td><td>—</td><td>16,892</td><td>—</td><td>—</td><td>16,892</td><td>—</td><td>16,892</td></tr><tr><td>Purchase of stock</td><td>(1,889,039)</td><td>(1,889)</td><td>—</td><td>—</td><td>(171,635)</td><td>(173,524)</td><td>—</td><td>(173,524)</td></tr><tr><td>Noncontrolling interest
activities</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>38,376</td><td>38,376</td></tr><tr><td>Balance at December 31, 2017</td><td>146,652,615</td><td>$    146,653</td><td>$     68,126</td><td>$        (852,592)</td><td>$ 4,049,965</td><td>$ 3,412,152</td><td>$     52,004</td><td>$ 3,464,156</td></tr></table>

See accompanying notes.