157 added · 162 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
Corporate EBITDA amounted to a loss of $357 million, or 1.5% of net sales, in 2025, compared to a loss of $389 million, or 1.7% of net sales, in 2024. 26 Table of Contents Other unallocated costs represent restructuring and other costs, acquisition and integration related costs, and other.
The following table provides a reconciliation of prepaid expenses and other current assets reported within the consolidated balance sheets at December 31: (in thousands) 2025 2024 Prepaid expenses $ 150,014 $ 118,401 Consideration receivable from vendors 907,321 972,842 Other current assets 587,285 584,067 Total prepaid expenses and other current assets $ 1,644,620 $ 1,675,310 Goodwill We review our goodwill annually for impairment in the fourth quarter, or sooner if circumstances indicate that the carrying amount may exceed fair value.
For example, we tested controls over management's review of the assumption related to number of future claims for certain disease types and the reconciliation of claims data to that used by the Company’s actuarial specialist.
In addition, we made a strategic acquisition of Benson Auto Parts, expanding our store footprint in our key Canadian markets and providing a diversified product offering to better serve our customers in Ontario and Quebec.
Our results in 2025 reflect continued headwinds in global market conditions, persistent cost inflation, changes in tariffs and global trade regulations and costs associated with investments in our technology and supply chain capabilities to drive growth.
Year Ended December 31, 2025 2024 (in thousands) $ % of Sales $ % of Sales $ Change % Change Net sales $ 24,300,141 100.0 % $ 23,486,569 100.0 % $ 813,572 3.5 % Cost of goods sold 15,359,443 63.2 % 14,962,954 63.7 % 396,489 2.6 % Gross profit 8,940,698 36.8 % 8,523,615 36.3 % 417,083 4.9 % Operating expenses: Selling, administrative and other expenses 7,151,043 29.4 % 6,642,900 28.3 % 508,143 7.6 % Depreciation and amortization 538,023 2.2 % 407,978 1.7 % 130,045 31.9 % Provision for doubtful accounts 37,020 0.2 % 30,001 0.1 % 7,019 23.4 % Restructuring and other costs 253,961 1.0 % 213,520 0.9 % 40,441 18.9 % Total operating expenses 7,980,047 32.8 % 7,294,399 31.1 % 685,648 9.4 % Non-operating expenses (income): Interest expense, net 163,506 0.7 % 96,827 0.4 % 66,679 68.9 % Pension settlement charge 741,967 3.1 % — — % 741,967 100.0 % Other 3,010 — % (43,579) (0.2) % 46,589 (106.9) % Total non-operating expenses 908,483 3.7 % 53,248 0.2 % 855,235 1606.1 % Income before income taxes 52,168 0.2 % 1,175,968 5.0 % (1,123,800) (95.6) % Income tax expense (benefit) (13,777) (0.1) % 271,892 1.2 % (285,669) (105.1) % Net income $ 65,945 0.3 % $ 904,076 3.8 % $ (838,131) (92.7) % Year Ended December 31, (in thousands, except per share data) 2025 2024 $ Change % Change Diluted EPS $ 0.47 $ 6.47 $ (6.00) (92.7) % Adjusted diluted EPS $ 7.37 $ 8.16 $ (0.79) (9.7) % North America Automotive segment EBITDA $ 672,182 $ 715,530 $ (43,348) (6.1) % International Automotive segment EBITDA $ 544,173 $ 568,001 $ (23,828) (4.2) % Industrial segment EBITDA $ 1,146,422 $ 1,102,188 $ 44,234 4.0 % Corporate EBITDA $ (357,175) $ (389,217) $ 32,042 (8.2) % Adjusted EBITDA $ 2,005,602 $ 1,996,502 $ 9,100 0.5 % North America Automotive segment EBITDA margin 7.1 % 7.8 % International Automotive segment EBITDA margin 9.3 % 10.2 % Industrial segment EBITDA margin 12.9 % 12.6 % Corporate EBITDA margin (1.5) % (1.7) % Adjusted EBITDA margin 8.3 % 8.5 % Net Sales Net sales increased 3.5% in 2025 primarily due to a 2.2% benefit from acquisitions and a 0.9% increase in comparable sales.
The increase in gross profit was partially offset primarily by a nonrecurring $151 million charge to reserve for expected credit losses on amounts due from First Brands, a key global automotive parts supplier whose business significantly deteriorated in the fourth quarter following its Chapter 11 bankruptcy filing in September 2025.
Depreciation and Amortization Depreciation and amortization increased $130 million in 2025 compared to 2024, as a result of the ongoing enhancements to our technology platforms, such as proprietary digital tools that improve customer experience and operational transparency, as well as supply chain initiatives designed to increase efficiency and service levels.
A portion of our transaction costs included in our non-GAAP adjustments for the year ended December 31, 2025 were not deductible for income tax purposes; therefore, no statutory income tax rate was applied to such costs. 28 Table of Contents The table below clarifies where the adjusted items are presented in the consolidated statement of income: Year Ended December 31, (in thousands) 2025 2024 Line item: Cost of goods sold $ 160,200 $ 69,083 Selling, administrative and other expenses 95,777 33,126 Depreciation expense 42,021 — Restructuring and other costs 253,961 213,520 Pension settlement charge 741,967 — Total adjustments $ 1,293,926 $ 315,729 The table below reconciles GAAP net income to adjusted EBITDA: Year Ended December 31, (in thousands) 2025 2024 GAAP net income $ 65,945 $ 904,076 Depreciation and amortization 538,023 407,978 Interest expense, net 163,506 96,827 Income tax expense (benefit) (13,777) 271,892 EBITDA 753,697 1,680,773 Total adjustments (1) 1,251,905 315,729 Adjusted EBITDA $ 2,005,602 $ 1,996,502 (1) Amounts are the same as adjustments included within the adjusted net income table above.
A summary of our consolidated statements of cash flows is as follows: Year Ended December 31, (In thousands) 2025 2024 $ Change % Change Operating activities $ 890,762 $ 1,251,251 $ (360,489) (28.8) % Investing activities $ (711,587) $ (1,507,524) $ 795,937 52.8 % Financing activities $ (209,254) $ (333,936) $ 124,682 37.3 % Liquidity & Capital Resources Our liquidity is supported by cash generated from operating activities and available borrowings.
The remaining surplus plan assets following the U.S. plan settlement will be used to fund certain contributions associated with our U.S. defined contribution plan (Qualified Replacement Plan) beginning in 2027, as well as remaining U.S. pension plan expenses.
Refer to the Employee Benefit Plans Footnote of the Notes to Consolidated Financial Statements for more information regarding these assumptions. 32 Table of Contents Based on the investment policy for the Canadian pension plan, as well as an asset study that was performed based on our asset allocations and future expectations, our expected rate of return on plan assets for measuring 2026 pension income is 6.01% for the Canadian plan.
No longer disclosed
For example, for the year ended December 31, 2024, certain of the non-GAAP metrics contained herein exclude costs relating to our global restructuring initiative and acquisition of Motor Parts & Equipment Corporation, which are one-time events that do not recur in the ordinary course of business.
In 2024, we completed strategic acquisitions of more than 500 stores in the U.S., mostly from our independent owners, including the acquisition of our two largest, Motor Parts & Equipment Corporation ("MPEC") and Walker Automotive Supply, Inc.
Refer to the Goodwill and Other Intangible Assets Footnote of the Notes to Consolidated Financial Statements for further information on the results of our annual goodwill impairment testing. 30 Table of Contents Employee Benefit Plans Effective December 31, 2013, our U.S. pension plan was amended to freeze benefit plan accruals for participants and provide for immediate vesting of accrued benefits.
This guidance is effective for all public entities for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, and early adoption is permitted.
Results were affected by $221 million of costs related to the global restructuring initiative, $33 million of acquisition and integration costs, and a $62 million inventory liquidation charge (described above).
The guidance is effective for our Annual Report on Form 10-K for the year ended December 31, 2025, with early adoption permitted.
This guidance should be applied either prospectively to financial statements issued after the effective date of this update or retrospectively to all prior 32 Table of Contents periods presented in the financial statements.
For example, we tested controls over management's review of the significant assumptions described above and the reconciliation of claims data to that used by the Company’s actuarial specialist.
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Sales growth was partially offset by the negative impact of weak market conditions in both segments, as persistent high interest rates and economic uncertainty led to lower customer demand which resulted in flat Automotive comparable sales and declines in Industrial comparable sales in 2024.
Our earnings in 2024 were also negatively impacted by higher SG&A costs, which were driven by increases in personnel and rent costs due to inflationary pressure and planned investments in technology to modernize our systems and digital platforms.
These costs were partially offset by improved gross margin due to the benefits from acquired businesses and ongoing initiatives around pricing and sourcing and from our global restructuring program. 21 Table of Contents Our results of operations are summarized below for the years ended December 31, 2024 and 2023.
Year Ended December 31, 2024 2023 (in thousands) $ % of Sales $ % of Sales $ Change % Change Net sales $ 23,486,569 100.0 % $ 23,090,610 100.0 % $ 395,959 1.7 % Cost of goods sold 14,962,954 63.7 % 14,799,938 64.1 % 163,016 1.1 % Gross profit 8,523,615 36.3 % 8,290,672 35.9 % 232,943 2.8 % Operating expenses: Selling, administrative and other expenses 6,642,900 28.3 % 6,167,143 26.7 % 475,757 7.7 % Depreciation and amortization 407,978 1.7 % 350,529 1.5 % 57,449 16.4 % Provision for doubtful accounts 30,001 0.1 % 25,947 0.1 % 4,054 15.6 % Restructuring and other costs 213,520 0.9 % — — % 213,520 100.0 % Total operating expenses 7,294,399 31.1 % 6,543,619 28.3 % 750,780 11.5 % Non-operating expenses (income): Interest expense, net 96,827 0.4 % 64,469 0.3 % 32,358 50.2 % Other (43,579) (0.2) % (59,764) (0.3) % 16,185 (27.1) % Total non-operating expenses 53,248 0.2 % 4,705 — % 48,543 1031.7 % Income before income taxes 1,175,968 5.0 % 1,742,348 7.5 % (566,380) (32.5) % Income taxes 271,892 1.2 % 425,824 1.8 % (153,932) (36.1) % Net income $ 904,076 3.8 % $ 1,316,524 5.7 % $ (412,448) (31.3) % Year Ended December 31, (in thousands, except per share data) 2024 2023 $ Change % Change Diluted EPS $ 6.47 $ 9.33 $ (2.86) (30.7) % Adjusted diluted EPS $ 8.16 $ 9.33 $ (1.17) (12.5) % Automotive segment EBITDA $ 1,283,531 $ 1,339,134 $ (55,603) (4.2) % Industrial segment EBITDA $ 1,102,188 $ 1,132,921 $ (30,733) (2.7) % Corporate EBITDA $ (389,217) $ (314,709) $ (74,508) 23.7 % Adjusted EBITDA $ 1,996,502 $ 2,157,346 $ (160,844) (7.5) % Automotive segment EBITDA margin 8.7 % 9.4 % Industrial segment EBITDA margin 12.6 % 12.8 % Corporate EBITDA margin (1.7) % (1.4) % Adjusted EBITDA margin 8.5 % 9.3 % Net Sales Our consolidated net sales increase of 1.7% includes a 2.6% benefit from acquisitions, which was partially offset by a 0.8% comparable sales decrease as described in the following segment discussions.