GPC 2017 Annual Report

The Company’s Automotive Parts Group also operates four Balkamp distribution and redistribution centers, four Rayloc distribution facilities and four transfer and shipping facilities. Two of the Balkamp distribution cen- ters and the four Rayloc distribution facilities are conducted in facilities owned by the Company. Altrom Canada operates two import automotive parts distribution centers and 26 branches, and Altrom America operates two import automotive parts distribution centers and eight branches. The Heavy Vehicle Parts Group operates three TW distribution centers, which serve 27 Traction stores of which 20 are company owned and located in the U.S. These operations are all conducted in leased facilities. The Company’s Industrial Parts Group, operating through Motion and Motion Canada, operates 14 dis- tribution centers, 43 service centers and 498 branches. Approximately 90% of these locations are operated in leased facilities and the remainder are Company owned. The Company’s Business Products Group operates 49 facilities in the United States and six facilities in Canada distributed among the Group’s four geographic divisions. Approximately 75% of these facilities are operated in leased buildings and the remainder are Company owned. The Company’s Electrical/Electronic Materials Group operates in 38 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 44 facilities are operated in leased buildings. We believe that our facilities on the whole are in good condition, are adequately insured, are fully utilized and are suitable and adequate to conduct the business of our current operations. For additional information regarding rental expense on leased properties, see Note 5 of Notes to Con- solidated Financial Statements beginning on page F-1. ITEM 3. LEGAL PROCEEDINGS . The Company is subject to various legal and governmental proceedings, many involving routine litigation incidental to the businesses, including approximately 2,170 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 effect on the Company’s business, results of operations or financial condition. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 16

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