Good day and welcome to the Genuine Parts Company Third Quarter 2016 Earnings Conference Call. As a reminder, today’s conference is being recorded. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation [Operator Instructions]. At this time, I’d like to turn the conference over to Sid Jones, Vice President, Investor Relations. Please go ahead.

Good morning and thank you for joining us today for the Genuine Parts Company third quarter 2016 conference call to discuss our earnings results and outlook for the full-year. Before we begin this morning please be advised that this call may involve forward-looking statements regarding the Company and its businesses. The Company’s actual results could differ materially from any forward-looking statements due to several important factors described in the Company’s latest SEC filings. The Company assumes no obligation to update any forward-looking statements made during this call. We’ll begin this morning with comments from our President and CEO, Paul Donahue. Paul?

Thank you, Sid, and let me add my welcome to all of you on the call this morning. We appreciate you taking the time to be with us. Before we begin our commentary on the quarter, we want to update you on Hurricane Matthew, a powerful and deadly storm which recently hit the coast of Florida, Georgia, the Carolinas as well as the Caribbean. This storm inflicted damages in excess of $5 billion and impacted the lives and businesses of countless GPC personnel and our good customer partners. There are many GPC associates, too many to call out today, who were mobilized around the clock before, during and after the storm, providing aid and assistance for those affected. We want to take this opportunity to publicly thank them for their selfless efforts. From an operations perspective, we’ve had a number of facilities and stores closed and/or without power for long periods of time. While most operations are now back up and running, we still have stores in the Carolinas struggling with power outages and floodwaters. So now the real work begins, and our team will continue to support the cleanup efforts and provide assistance wherever and whenever needed. Now earlier this morning, we released our third quarter 2016 results. I’ll make a few remarks on our overall results and then cover our performance by business. Carol Yancey, our Executive Vice President and Chief Financial Officer, will provide an update on our financial results and our guidance for the full-year. After that, we will open up the call to your questions. So a quick recap of our third quarter results shows; sales for the quarter were $3.94 billion, which was up 0.5%. Net income was $185.3 million compared to $188 million last year, and earnings per share were $1.24 which is…

Thank you, Paul. We’ll begin with our financial review with a look at our third quarter income statement and the segment information and then we’ll review a few key balance sheet and other financial items. As Paul mentioned, total revenues of $3.94 billion for the third quarter was an increase of 0.5%. Gross profit for the third quarter was 30.4% of sales, which is an increase from the 29.8% in the prior year quarter. This improvement was primarily driven by a favorable supplier incentive, product mix shift into higher-margin categories and the benefit of our more recent higher margin acquisitions. Looking forward, we remain focused on the effective execution of our gross margin initiatives and we remain committed to an enhanced gross margin for the long-term. The pricing environment across our businesses remains relatively unchanged from where we’ve been for some time with very little supplier inflation, if any. Our cumulative supplier price changes through nine months in 2016 were down 0.7% in Automotive, up 0.4% in Industrial, up 0.2% in Office and down 1.3% in Electrical. Turning to our SG&A, our total expenses for the third quarter were $907 million, up 4% from last year and 23% of sales. Our increase in expenses as a percentage of sales is primarily due to the weak sales environment across all of our businesses. In addition, as we initially integrate our acquisitions into our existing operations, we can experience an uptick in costs. Ultimately, we’re able to eliminate these excess costs and actually reduce our overall cost as we build on the synergies that we create with the combined businesses. We would also add that, with certain acquisitions, their models show higher gross margins, as mentioned earlier, but also a higher operating cost as well, so that’s a factor in the current…

Thank you, Carol. Before we go to questions, I just wanted to add a few additional remarks we feel are important. First, we want to remind you of the action steps we outlined in our last call which are the four building blocks of our growth strategy. These are: one, executing our key initiatives to capture greater share of wallet with our existing customer base; two, an aggressive and disciplined acquisition strategy focused on both geographical as well as product line expansions; three, building out our digital capabilities across all four of our businesses; and four, further expanding our U.S. and international store footprint. We are confident that over time, our intense focus in these four key areas will positively impact our sales performance and drive the ongoing steady and consistent growth we look to achieve and our stakeholders expect. Second, we want to assure you that our current performance was not up to our expectations. As we speak, we continue to evaluate our cost structure in all areas of the business to drive immediate savings and longer-term efficiencies. Our goal is to show improved results in the quarters ahead and better position the company for sustainable growth well into the future. As Carol shared earlier, we have a strong balance sheet and excellent cash flows to support our efforts. So in closing as we look ahead, we’re excited with the many opportunities we have at GPC and can point to many positive factors fueling our optimism. We operate in four large and fragmented industries with less than 10% market share in each. The outlook for the automotive aftermarket continues to be positive. The industrial sector is showing early signs of a recovery. Our balance sheet and cash flows remain strong, supporting effective capital allocation strategy, our steady track record of increased dividends for 60 consecutive years and, last, but certainly not least, our team of 40,000 dedicated GPC Associates around the globe committed to delivering exceptional customer service. So despite our current challenges, we feel very good about the long-term prospects for growth at GPC. We’ve been operating now for 88-plus years and we’ve been through challenging times before. And as we move forward, we’ll make the necessary adjustments and we will emerge as a stronger company. We look forward to reporting to you on our progress. So with that, we’ll turn it back to the operator, and Carol and I will take your questions.

[Operator Instructions] We’ll now take our first question from Chris Horvers with JPMorgan.

Thanks. Good morning everybody.

Good morning, Chris.

So wanted to follow-up, start with the September commentary around the U.S. NAPA business and also on the Motion Industries side. Can you put some brackets around that? Is it back to flat? Is it - turn positive? Or was it just simply less negative?

The Automotive, well, I’ll give you, Chris, the kind of the cadence for the quarter, as I’m sure that will come up. What we saw in our overall Automotive business was predominantly flat in July and August, and then we saw a low to mid single - low single-digit increase in the month of September. So we did see some improvement in September. And while it’s early yet in October, that’s holding a bit. So it gives us a bit of renewed optimism as we head into the all-important fourth quarter. And hopefully, if we get a little winter weather headed our way in November, December that can only further help things. And in Industrial, we’re seeing some green shoots as well. If you look at the indices that we follow, the ISM September numbers were positive, which rebounded from a negative number in August. So we’re starting to see a bit of an uptick in our Industrial business as well.

So just to clarify that, that flat in July and August and up low single digits in the month of September, that’s the U.S. business or I thought the U.S. is actually down during the quarter.

That’s our global Automotive business, Chris.

Okay, any particulars around the U.S. business? Did it follow that similar trend?

Our overall trend in Automotive was if you go - because you had a lot of calendar movement in the quarter with a couple less days in July, a couple of extra days in August. So it was kind of all over the board, but the positive is we did see a more positive trend in September than what we saw in July and August in our U.S. business, so similar trend to our global business.

Understood. And then as you think about NAPA, I think I was curious at the product category level, was the improvement sort of a lag hot weather repair and maintenance on hot weather-sensitive products? Or did you see more broad-based improvement in some of the more core less weather-sensitive categories?

No. You hit it right on the head, Chris. The growth that we saw in the quarter was temp-related products. So our Electrical business obviously led by batteries was up mid-single digits. We saw a nice increase in our AC type products. We also saw decent business in our tool and equipment side. Where we’re still seeing a bit of a struggle is some of our under car lines, some of our ride control, heavy duty. And we don’t often talk about it on this call, but our capital equipment business, so things like tire changers, wheel balancers, lifts, that business has been off as well. So to your point, we did see some of the benefits of the hot temps coming out of the summer, and it drove business in our Electrical and AC business.

And then last question, as you think about just - as you look into the fourth quarter, do you have concern that the business could actually ebb from here given the improvement? It sounds like it was the hot weather side. Or is it just simply in the comparisons dropped off so much in the fourth quarter that would neutralize that? Thank you.

Well, you heard the guidance, Chris, and we did take the guidance down a little bit in Q4. We’re comfortable in the range that we told you folks, which is Automotive being up one to up two. Certainly, we’re taking a cautious outlook, and we would hope to outperform. But again, a bit of that is out of our control, so we’ll hope for a little bit of a stronger core business.

Understood. Thanks very much. Good luck.

You are welcome. Thanks, Chris.

And we’ll now go to Seth Basham with Wedbush Securities.

Hi. Good morning and thank you for taking my question.

Hey. Good morning, Seth.

Good morning.

My first question is just making sure I understand some of the trends in the auto business in the U.S. for the quarter. As I heard you correctly, I think you spoke to 0% comps for company-owned stores, but the total U.S. business that was in the second quarter a negative 2% in 3Q, and total U.S. business was down 2% in the second quarter and up 1% in the third quarter, is that correct?

Let me see if I’m correct with you, Seth. The 2% same-store sales decline in Q3 in U.S. was accurate. Our overall - let me just pull the numbers, our overall business in the U.S., was down 1% and plus - and then, when you add in acquisitions, acquisitions actually added in a point for us.

Got it. Okay. So if you look at the U.S. business, then you saw company-owned stores doing all that work in the independently owned stores on a sort of daily sales basis.

No. I think the actual - our store sales in our company-owned stores and our independent owners were actually right on cue with one another. On the same-store sales were both down about 2%, and then you add back in the strength of acquisitions, gets us to your down 1.

Okay, that’s helpful. And then secondly, if you think about the dynamic between ticket and traffic, particularly on the DIFM side of the business, it’s the second quarter in a row that we’re seeing a decline in ticket on the DIFM side. Is that simply due to deflation? Or is there something else going on from a mix standpoint that’s driving that?

No. I think that - I mean it could be a bit, Seth, but we’re not seeing anything dramatic. Look, we’re in constant touch with our key customers, whether they be the Major Accounts of which we have a real focus on our top five Major Accounts. We’re very close to our - obviously to our NAPA AutoCare centers. Their business is soft, and I think our business is trending with theirs, and the bay counts, as we do our survey throughout the marketplace, bay counts are down a bit on both sides, Major Accounts and AutoCare. So it’s just kind of a soft environment out there right now.

Okay. Now last question for me is just on gross margins. If you could tease out the drivers of benefit a little bit more, which were the biggest drivers of improvement between supplier incentives and the product mix shifts and the acquisitions that would be helpful. We’re just trying to understand the sustainability of that improvement.

Yes, okay. I’ll let Carol take that.

Yes. I would point you more, if you think about where we are through the nine months, so we’re up 17 basis points through the nine months. And that’s probably a more normalized where we would expect to be. But in the quarter, what we had is a combination of the factors mentioned. So there was some - definitely, the customer and product mix would be probably a part of it and that’s coming from areas, if you think about what Paul mentioned on the product side and Automotive on the product side, some of the application parts and you’ve got higher margins there, even when you move over to the Office side and the categories you talked about, you have a definite product mix shift there that was positive. And then on the acquisitions, we mentioned that they come with a higher gross margin but they also have higher SG&A and then the increased rebates. I think if you look at the quarter, you would probably say that they’re pretty evenly safe of how they contributed, but I would also point you to more than nine months number to say that, that’s you know hopefully, where we can continue to hold.

Very good. Thanks a lot and good luck.

Thank you.

Thank you.

We’ll now go to Scot Ciccarelli with RBC Capital Markets.

Good morning, guys.

Hey, good morning, Scot.

Good morning.

Hi, just one more sales cadence question and I’m sure the horse is grow at this point, but in the U.S., same-store sales, was September positive?

Yes, it was.

Gotcha. Okay. That’s helpful. And another housekeeping item. How big were the real estate gain that you booked in the quarter?

So the fluctuation between the corporate experience - or the other expense, half of the increases related to the real estate gains on several pieces of property and half was related to the retirement plan valuation adjustment.

Got it, so 50/50. Okay, and then the third question, I guess this is really an opinion at this point, but Paul, you’ve been involved with the NAPA for many years at this point, would you expect better performance from NAPA just given how warm this year’s summer weather was?

As I said in my prepared comments, Scot, we’re not pleased with where we find ourselves. If there was anything that was a bit of a surprise for me personally this quarter was our core business and you could almost go to all of our business. But certainly, Automotive and Office, the softness that we saw in our core business certainly is concerning and we always expect more out of our teams. So yes, I think that’s a safe comment. We did expect better.

So do you think there’s any kind of share shift occurring?

I expected that question, Scot, and I have to tell you that again, as we talk to our key customers, as I was mentioned in an earlier question, we see what their business and how their business is trending, whether it would be with a big national account or with our almost 17,000 AutoCares, and the business climate and the bay count is soft. If we were looking out and seeing a robust business environment with those key customers and key AutoCare centers, I would be more concerned than I am. I do believe what we’re seeing right now in Automotive is transitory. I think we saw it a bit when we came out of 2012 in similar weather patterns. So our expectation, Scot, is that when we get back to - if we get back to a normal winter weather patterns that we will see the rebound in our Automotive business. But no, I don’t believe we’re losing share.

Got it. All right. Thanks a lot guys. I appreciate it.

All right. Thank you.

And we’ll now go to Bret Jordan with Jefferies.

Hi, good morning, guys.

Hi, good morning, Bret.

Good morning, Bret.

Hi, can we talk a little bit more about the U.S. trends in the quarter? Really sort of regional dispersion and maybe how we started that out the quarter I guess northern performance versus South and West. And I think you commented that the North was still the weakest, but did the back half close as the quarter progressed?

It did close, Bret, but I would tell you the trend that we saw in Q3 was much the same as we saw in Q2, which is those big northern divisions which, as I mentioned in my prepared comments, is a large portion of our overall business, so the Northeast, the Central, and I compare those two divisions that are performing well and I have to separate out the West. The West for us is an outlier and it’s an outlier in a good way. Our Western Division business is performing quite well and outperforming all of our other divisions. But if I take the Florida, Southern Atlantic, there’s still - we’re still seeing that 400 basis point to 500 basis point gap between the guys up north and the guys in the warmer climates and - but we did see that begin to close a bit in September, which is encouraging.

Okay, great. And then one question on the DIY comp. I think you said it was down mid single-digits, and you said you were sort of examining some - the emerging online competition. Obviously, it’s pretty early for Amazon to be having any real impact given their recent entry in the space. But are you analyzing anything like conversion rates? Or is there any feeling that there’s a competitive shift going on in the DIY market that’s explaining mid single-digit decline?

Again, Bret, we’re looking at everything, as we always do, in our business, whether it’d be ticket counts and basket size, and we are not pleased with where we find our core retail business. I would tell you that I don’t believe we’re losing share to the online players. That is - I mean clearly, they’re growing their business, and I don’t think it’s at the expense of our retail business. But I would mention that where we’re encouraged is where we see growth with our impact stores, the stores that we have relayed and retrofitted to the new look. We’ll have a 150 of those by year-end. We’re seeing double-digit growth there. So it tells me that the retail business is there to be had. We’ve got another 300 stores queued up for 2017 to go to that new look. So we’ll have, hopefully, north of 450 stores in the new format of our - which would be almost half of our company-owned stores by the end of 2017. And our plan then would be we will be able to move the overall needle. Right now with just 150 stores with the new format, it’s tough for us to move the overall retail needle. And I would also mention, Bret, I think that - look, I think the consumer is under a little bit of stress which could be impacting retail across the board.

Great. Thank you. Appreciate it.

You are welcome Bret.

We’ll now take our next question from Chris Bottiglieri with Wolfe Research.

Thanks for taking my question. Quick follow-up. Why was California so good? Is that your retail initiative? Or is there something else driving that?

Our California business I should…

West Coast.

Yes. West Coast, it’s really West Coast. Obviously California is a big, big part of our West Coast business. We’ve been aggressive. Our team has been aggressive out there in conversions, bringing some competitive stores over to the NAPA banner. We’ve done a few bolt-on - small bolt-on acquisitions, but our core business is healthier out there as well, which goes back to - and kind of reinforces the comments that you have to be led to believe that the impact that we’re seeing on the Automotive business is being largely driven by weather patterns because in those warm climates, certainly out west is reflective - the business is okay.

Okay. And then unrelated follow-up. Let me get a sense for as much as you can give us, you kind of answered this on gross margins, what is the inverse of that on the SG&A rate. Can you maybe bifurcate a little bit, tell us how much is kind of integration, one-time costs, that you kind of lap, what are some of the other drivers? I imagine its mix shifting again? And then if you could give us any direction overall, like how much of your - by segment, what your fixed cost structure looks like, trying to get a sense of incremental margins as your sales kind of fluctuates?

Yes, so I would tell you, the gross margin improvement that we had were across our Automotive, Industrial and Office businesses. And then at the same time, the SG&A deterioration was in all four of our segments. And when you look at the core sales, the majority of what you’re seeing there is related to the core sales. And where we modeled, where we thought we would be second half of the year, we weren’t quite there. We thought we would be. So we’ve got just - it takes us longer to get those cost out and we’re really adjusting to a lower level of core sales growth. And then I think the other big part of this is the acquisitions that certainly - I mean we’ve made 16 or so acquisitions this year, and all those acquisitions come in, many of them come in with a different cost structure, but certainly accretive on the margin side, but they’re coming in with higher SG&A. And in some, you have some incremental costs when you first have these acquisitions, and it takes up a couple of quarters to get those costs out. So I think all-in-all, the weak sales factor is the biggest thing that’s impacting the SG&A, but I can tell you, our teams are working very, very hard right now to address all of our costs and we’ve done a lot of work on our headcount. We’ve done a lot of work on our facilities. And then you will see the improvements we’ve done, it just hasn’t been enough to offset the decline in the core sales.

Okay. Then I promise one small last one, I hope it’s a small one. The other revenue count seemed to kind of get a little worse this quarter. What’s driving that? Looks like the implication I think to the story.

Yes. So the other revenue line, that is where we have the impact of our additional sales discounts and incentives. And so when we have the acquisitions that have flowed into the segment sales, with those acquisitions come their additional sales, customer discounts, and so a lot of that increase is related to the acquisitions coming in. So it’s really the growth number is up above in the segments and that’s the net adjustment. Yes, we’ll have a more normalized. If you use the Q3 number, that’s probably going to be our more normal go-forward amount.

Okay. Great. Thanks again for all the questions.

Thank you.

Thank you.

We’ll go next to Greg Melich with Evercore ISI.

Hi, thanks. I had a couple of questions. Paul, I’d like to start on some of the breakdowns of what’s been strong or weak. I think you mentioned that fleet in Major Accounts were negative. Were they more negative than the Company? And just remind us what percentage of your sales are in that bucket.

Well, yes. Thanks, Greg. Those were two challenged businesses for us this past quarter, both down low single-digits. Our Major Accounts business is approaching $2 billion in sales, so it’s a significant part of our overall wholesale business. Our AutoCare center business, which was down slightly year-over-year and I mean very slightly, represents well over $1 billion as well. And fleet, a comment on the fleet. It was down more than the overall business. And again, not surprised, not a total surprise because we have a significant business in the heavy-duty class 6, 7, 8 truck business and we’re seeing softness across that element of our business as well.

Could you speak on that in particular because I think you mentioned ride control and heavy-duty. Are there any shared shifts going on there that could explain that? Or do you think this is just overall demand and I have another question.

No. I honestly don’t think so. We just spent a day with our heavy-duty team earlier this week, Greg, and we did an acquisition in that space earlier this year. So we’re getting more and more broader in our scope and in our footprint, in our heavy-duty business. And honestly, we think that business is under pressure across the entire heavy-duty industry.

Okay, great. And Carol, I think in your prepared comments, I heard in SG&A there was a real estate sale and a pension valuation adjustment. Could you quantify those?

Yes, I did earlier. That’s in the other line of corporate expense line. So the delta between last year Q3 and this year Q3, the delta is half related to real estate gains and half related to the pension retirement valuation adjustment, and that is not in the segment margin. That’s in other.

Got it. And the real estate is any of that - is that all just one-off? Or is there any of that, that might occur on, say the pension side if it’s an accrual?

It’s largely one-off. I mean we have transactions all the time, but there are some more significant ones this quarter, so that’s largely one-off. Therefore, when we gave our guidance for corporate expense for the full-year, you’re going to be back to a more normal run rate.

Got it. And then I guess this is sort of one last question whoever wants to take it. If you think about the change in your guidance for the year, what was the main driver of that? Was it just the business being weaker than expected in the third quarter or what you’re expecting for the fourth quarter?

Yes. So Greg, it’s a combination of what you said, but the Q3, the weaker sales is the primary driver, which we had that in Q3 and we’re expecting that in Q4, but we certainly factored in what occurred in Q3, but the primary driver is the weak sales, but we took into account the incremental one-time things that we had in Q3 as well.

So you factored in also something lower in the fourth quarter, obviously, but the bulk of it is in the third quarter miss basically.

Correct.

Got it. Okay. Thanks good luck.

Thanks Greg.

Thank you.

And we’ll now go to Matt Fassler with Goldman Sachs.

Thanks a lot and good afternoon.

Hi, good afternoon, Matt.

Hi, how are you? I want to slice and dice the Automotive discussion, I guess, one other way. We’ve talked about competition, we’ve talked about weather, we’ve talked about regions. If we think about the Northeast and that part of the country that we thought about as being particularly weather-sensitive, it seems to have been challenged for almost everyone who plays in that part of the country for more than the past year. So for a longer period of time, do you think there’s anything from a demand perspective transpiring in that part of the country that’s impacting the aftermarket relative to the rest of the U.S?

From a demand perspective, Matt, certainly, it’s interesting to listen to our peer groups and the other players in our industry. And if there is one consistent theme, it is that softness up in that part of the country. I would also - in addition to potentially softer overall demand, I would tell you that in terms of the competitive nature of that part of the country, it’s as tough as any market that we compete in. There’s a lot of players. There’s a lot of strong players, a lot of strong regional players. It’s a competitive market and again we don’t believe we’re losing market share, but it is a challenging market no doubt.

If I can ask a second question. If you could recap your disclosure of the pieces of your same-store sales numbers, I want to make sure I heard some of the numbers right. Because I think you talked about a negative two decline overall for company-owned stores in the U.S. and I just want to make sure I understand the components of that to reconcile those to the total.

Well, Matt, I’m not sure we’re going to want to get into all of that detail, but I would suffice to say that our overall same-store sales, as mentioned, was down two. We had a point that - a positive point through acquisitions which led to our overall U.S. business decline of 1%.

I guess I was thinking about the comments you made on DIY and commercial. I think you said commercial down low singles and DIY down a bit more. And I was trying to solve that with a minus two that you discussed. And those might not be apples-to-apples numbers. That’s what I’m trying to get my arms around.

No, the - and obviously, you know our DIFM business is our bread and butter, and our DIFM business is really what drives our overall same-store sales number. Retail is still an overall smaller percentage, but our DIFM business was down in that very low single-digit number.

Got it. And then one final question, very brief one, Carol, you spoke about the international mix of business and the impact on the of tax rate. It sounds like that was only one part of what drove the tax rate lower this quarter. But as we think out to subsequent years given the deals that you’ve done outside the U.S., should that tax rate now be below 37% on a secular basis? Do you see that in your future?

We probably - to your point, we probably are more in a steady state of probably assuming that there is nothing beyond this point and no tax law changes, we probably are in a 36% to 36.5% rate and that would just assume the same mix that we have today, but it would be dependent on future acquisitions or any tax law changes, but I think you’re right.

Great. Thank you so much guys.

Thanks, Matt.

Thanks, Matt.

And we’ll go now to Brian Sponheimer with Gabelli.

Good afternoon.

Hey, good afternoon, Brian.

Just one question and may lead to a follow-up about the balance sheet. You had almost a $200 million increase in inventories on a year-over-year basis and $80 million quarter-to-quarter. Some of that’s obviously coming from your acquisitions, but is any - just a lag from a sluggish sales environment? And how do you see that trending throughout the balance of the year?

Yes. Actually our inventories are flat when you take out the acquisitions and currency. So we don’t think - I mean the acquisition was a pretty significant number in inventory, so we don’t think there is anything there. But having said that, and certainly if you say we’re pleased with flat, but we also know we have further opportunities with some of this facility rationalizations and some of our productivity improvements to further tighten down the inventory. So that maybe a further source of working capital for us going forward.

Okay. So if I’m just thinking about this, if your total sales were flat and acquisitions contributed 350 basis points there, in an ideal world, your flat year-over-year for inventory, is that 3% number a potential working capital source target as we kind of move forward? Or are these inventory initiatives going to require at least some safety stock as you’d handle them?

I don’t think they will. And I think, like I said, there’s a lot of initiatives going across all of our businesses, but I don’t think we really have that going forward.

Okay. Thank you very much.

Thanks, Brian.

Thanks, Brian.

And we’ll take our last question from Elizabeth Suzuki with Bank of America Merrill Lynch.

Hey, guys.

Hey, Elizabeth.

Hi. I just wanted to start with one question about acquisition opportunities, and you mentioned that you’re open to some larger acquisitions in that typical $25 million to $150 million annualized revenue target. How many such larger businesses are there out there that might actually make sense to incorporate into your business? In other words, how fragmented is this industry?

Well, if you think about our global footprint now, Elizabeth, and you think about four different industries that we conduct business in, there are multiple acquisition opportunities. So when you take into account Asia Pacific, you take into account Canada, Mexico, U.S., and then our Office business, our Industrial business, our Automotive, we look at - as well as Electrical, we look at all of our businesses. And we’ve actually now - we’ve completed 16, 17 acquisitions already this year, and they’ve impacted all four businesses and have been in most every geographical region that we conduct business in. So there is no shortage of opportunities out there.

Great, that’s really helpful. And sort of on the reverse side, have you entertained at all the idea of divesting any of the four business segments? Or do you view them all as core and yielding synergies for the total business?

Yes. So we get asked that question often, Elizabeth. As of today, we’re quite pleased to be in the four businesses that we’re in. We’ve got strategies in the works in all four. We do believe the four; you mentioned the synergies that they bring to Genuine Parts Company. So as of today, we are committed to all four. That’s not to say at any point in time in the future, if we get to a point where we don’t believe either we’re the best owner of the business or that we can grow a business, we would consider divesting that business. We’ve done it in the past. But at this point, we have no plans to do that.

All right. Thanks very much.

All right. Thank you.

And that does conclude today’s question-and-answer session. At this time, I’ll turn the conference back to management for any additional or closing remarks.

We’d like to thank you for your support and your interest in Genuine Parts Company. Thank you for your participation today, and we look forward to reporting back out with our year-end earnings in February. Thank you.

And ladies and gentlemen, that does conclude today’s conference call. Thank you for your participation.