GENUINE PARTS COGPC
GENUINE PARTS CO Leases Disclosure
Leased Properties
Operating lease costs are included within selling, administrative and other expenses on the consolidated statements of income. Short-term lease costs, variable lease costs and sublease income were not material for the periods presented. Cash paid for amounts included in the measurement of operating lease liabilities is included in operating activities in the consolidated statements of cash flows.
We primarily lease real estate for retail stores, branches, distribution centers, office space and land. We also lease equipment (primarily vehicles).
Most real estate leases include one or more options to renew, with renewal terms that generally can extend the lease term from to 20 years or more. The exercise of lease renewal options is at our discretion. We evaluate renewal options at lease inception and on an ongoing basis, and we include renewal options that we are reasonably certain to exercise in the expected lease terms when classifying leases and measuring lease liabilities. We elected
a policy of not recording leases on the consolidated balance sheets when the leases have a term of 12 months or less and we are not reasonably certain to elect an option to purchase the leased asset. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants.
The table below presents the locations of the operating lease assets and liabilities on the consolidated balance sheets:
| (in thousands) | Balance Sheet Line Item | December 31, 2025 | December 31, 2024 | |||||||||||||||||
| Operating lease assets | Operating lease assets | $ | 2,084,487 | $ | 1,769,720 | |||||||||||||||
| Operating lease liabilities: | ||||||||||||||||||||
| Current operating lease liabilities | $ | 394,536 | $ | 343,276 | ||||||||||||||||
| Noncurrent operating lease liabilities | Operating lease liabilities | 1,739,478 | 1,458,391 | |||||||||||||||||
| Total operating lease liabilities | $ | 2,134,014 | $ | 1,801,667 | ||||||||||||||||
The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term.
Our leases generally do not provide an implicit rate, and therefore we use our incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. We used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.
Our weighted average remaining lease term and weighted average discount rate for operating leases are:
| December 31, 2025 | December 31, 2024 | |||||||||||||
| Weighted average remaining lease term (in years) | 7.61 | 7.79 | ||||||||||||
| Weighted average discount rate | 4.42 | % | 4.28 | % | ||||||||||
The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheets as of December 31, 2025 (in thousands):
| 2026 | $ | 495,498 | |||
| 2027 | 451,204 | ||||
| 2028 | 361,049 | ||||
| 2029 | 269,076 | ||||
| 2030 | 199,632 | ||||
| Thereafter | 786,216 | ||||
| Total undiscounted future minimum lease payments | 2,562,675 | ||||
| Less: Difference between undiscounted lease payments and discounted operating lease liabilities | 428,661 | ||||
| Total operating lease liabilities | $ | 2,134,014 | |||
Future minimum lease payments include $64 million related to options to extend lease terms that we are reasonably certain to exercise. Future minimum lease payments exclude $11 million related to operating leases that have not yet commenced. The leases are expected to commence in 2026 with a lease term of 3 to 9 years.
The table below presents operating lease costs and supplemental cash flow information related to leases for the year ended December 31:
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Operating lease costs | $ | 531,443 | $ | 459,654 | $ | 380,730 | ||||||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 527,850 | $ | 449,374 | $ | 389,610 | ||||||||||||||
| Operating lease assets obtained in exchange for new operating lease liabilities | $ | 728,742 | $ | 966,796 | $ | 493,039 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 26, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.