DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Document Information [Line Items] | ' |
Entity Registrant Name | 'GRAINGER W W INC |
Entity Central Index Key | '0000277135 |
Current Fiscal Year End Date | '--12-31 |
Entity Filer Category | 'Large Accelerated Filer |
Document Type | '10-Q |
Document Period End Date | 30-Jun-14 |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q2 |
Amendment Flag | 'false |
Entity Common Stock, Shares Outstanding | 68,395,811 |
Entity Well-known Seasoned Issuer | 'Yes |
Entity Voluntary Filers | 'No |
Entity Current Reporting Status | 'Yes |
Entity Public Float | $16,485,186,075 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Net sales | $2,506,104 | $2,381,561 | $4,891,731 | $4,661,996 |
Cost of merchandise sold | 1,425,418 | 1,334,577 | 2,735,074 | 2,583,276 |
Gross profit | 1,080,686 | 1,046,984 | 2,156,657 | 2,078,720 |
Warehousing, marketing and administrative expenses | 739,935 | 696,912 | 1,461,567 | 1,385,344 |
Operating earnings | 340,751 | 350,072 | 695,090 | 693,376 |
Other income and (expense): | ' | ' | ' | ' |
Interest income | 413 | 796 | 1,053 | 1,694 |
Interest expense | -2,757 | -3,201 | -5,620 | -6,367 |
Other non-operating income | 177 | 164 | 345 | 2,146 |
Other non-operating expense | -159 | -311 | -830 | -1,405 |
Total other expense | -2,326 | -2,552 | -5,052 | -3,932 |
Earnings before income taxes | 338,425 | 347,520 | 690,038 | 689,444 |
Income taxes | 129,348 | 126,767 | 261,906 | 254,164 |
Net earnings | 209,077 | 220,753 | 428,132 | 435,280 |
Less: Net earnings attributable to noncontrolling interest | 3,162 | 3,093 | 5,564 | 5,782 |
Net earnings attributable to W.W. Grainger, Inc. | $205,915 | $217,660 | $422,568 | $429,498 |
Earnings per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $2.97 | $3.08 | $6.08 | $6.07 |
Diluted (in dollars per share) | $2.94 | $3.03 | $6 | $5.97 |
Weighted average number of shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 68,453,602 | 69,664,697 | 68,576,232 | 69,613,947 |
Diluted (in shares) | 69,341,885 | 70,801,050 | 69,509,125 | 70,788,203 |
Cash dividends paid per share (in dollars per share) | $1.08 | $0.93 | $2.01 | $1.73 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (UNAUDITED) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Net earnings | $209,077 | $220,753 | $428,132 | $435,280 |
Other comprehensive earnings (losses): | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax benefit of $2,103, $1,988, $75 and $3,517, respectively | 23,295 | -38,689 | 8,175 | -69,800 |
Derivative instruments, net of tax (expense) benefit of $(1,987), $(1,862), $255 and $(2,994), respectively | 3,176 | 3,657 | -386 | 6,035 |
Other, net of tax (expense) benefit of $(1,692), $430, $(1,051) and $722, respectively | 6,045 | -775 | 5,013 | -527 |
Comprehensive earnings, net of tax | 241,593 | 184,946 | 440,934 | 370,988 |
Comprehensive earnings (losses) attributable to noncontrolling interest | 4,713 | -1,221 | 8,594 | -5,299 |
Comprehensive earnings attributable to W.W. Grainger, Inc. | $236,880 | $186,167 | $432,340 | $376,287 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (UNAUDITED) (PARENTHETICALS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Foreign currency translation adjustments, tax benefit | $2,103 | $1,988 | $75 | $3,517 |
Derivative instruments, tax (expense) benefit | -1,987 | -1,862 | 255 | -2,994 |
Other, tax (expense) benefit | ($1,692) | $430 | ($1,051) | $722 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $331,707 | $430,644 |
Accounts receivable (less allowances for doubtful accounts of $21,254 and $20,096, respectively) | 1,177,543 | 1,101,656 |
Inventories - net | 1,317,467 | 1,305,520 |
Prepaid expenses and other assets | 112,598 | 115,331 |
Deferred income taxes | 66,468 | 75,819 |
Prepaid income taxes | 24,770 | 15,315 |
Total current assets | 3,030,553 | 3,044,285 |
PROPERTY, BUILDINGS AND EQUIPMENT | 2,957,430 | 2,941,090 |
Less: Accumulated depreciation and amortization | 1,708,342 | 1,732,528 |
Property, buildings and equipment - net | 1,249,088 | 1,208,562 |
DEFERRED INCOME TAXES | 16,382 | 16,209 |
GOODWILL | 554,719 | 525,467 |
OTHER ASSETS AND INTANGIBLES - NET | 460,570 | 471,805 |
TOTAL ASSETS | 5,311,312 | 5,266,328 |
CURRENT LIABILITIES | ' | ' |
Short-term debt | 101,617 | 66,857 |
Current maturities of long-term debt | 33,352 | 30,429 |
Trade accounts payable | 513,829 | 510,634 |
Accrued compensation and benefits | 160,712 | 185,905 |
Accrued contributions to employees' profit sharing plans | 93,764 | 176,800 |
Accrued expenses | 214,479 | 218,835 |
Income taxes payable | 8,700 | 6,330 |
Total current liabilities | 1,126,453 | 1,195,790 |
LONG-TERM DEBT (less current maturities) | 432,485 | 445,513 |
DEFERRED INCOME TAXES AND TAX UNCERTAINTIES | 112,319 | 113,585 |
EMPLOYMENT-RELATED AND OTHER NON-CURRENT LIABILITIES | 192,031 | 184,604 |
SHAREHOLDERS' EQUITY | ' | ' |
Cumulative Preferred Stock - $5 par value - 12,000,000 shares authorized; none issued nor outstanding | 0 | 0 |
Common Stock - $0.50 par value - 300,000,000 shares authorized; issued 109,659,219 shares | 54,830 | 54,830 |
Additional contributed capital | 923,061 | 893,055 |
Retained earnings | 6,105,729 | 5,822,612 |
Accumulated other comprehensive earnings | 38,687 | 28,914 |
Treasury stock, at cost - 41,263,408 and 40,805,281 shares, respectively | -3,758,016 | -3,548,973 |
Total W.W. Grainger, Inc. shareholders' equity | 3,364,291 | 3,250,438 |
Noncontrolling Interest | 83,733 | 76,398 |
Total shareholders' equity | 3,448,024 | 3,326,836 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $5,311,312 | $5,266,328 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICALS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts | $21,254,000 | $20,096,000 |
Cumulative preferred stock, par value | $5 | $5 |
Cumulative preferred stock, shares authorized | 12,000,000 | 12,000,000 |
Cumulative preferred stock, shares issued | 0 | 0 |
Cumulative preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.50 | $0.50 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 109,659,219 | 109,659,219 |
Treasury stock, shares at cost | 41,263,408 | 40,805,281 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net earnings | $428,132 | $435,280 |
Provision for losses on accounts receivable | 4,782 | 3,783 |
Deferred income taxes and tax uncertainties | -9,605 | -1,074 |
Depreciation and amortization | 93,796 | 80,813 |
Losses (gains) from sales of assets and write-offs | 14,576 | -868 |
Stock-based compensation | 28,988 | 31,372 |
Change in operating assets and liabilities - net of business acquisitions and divestitures: | ' | ' |
Accounts receivable | -98,574 | -155,887 |
Inventories | -13,497 | 57,771 |
Prepaid expenses and other assets | -4,610 | 31,369 |
Trade accounts payable | 2,852 | 31,472 |
Other current liabilities | -127,930 | -128,468 |
Current income taxes payable | 1,601 | -2,648 |
Employment-related and other non-current liabilities | 6,712 | 8,088 |
Other - net | 1,243 | -4,180 |
Net cash provided by operating activities | 328,466 | 386,823 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Additions to property, buildings and equipment | -156,210 | -83,175 |
Proceeds from sales of property, buildings and equipment | 5,416 | 2,528 |
Net cash received (paid) for business divestitures (acquisitions) | 19,199 | -8,234 |
Other - net | 0 | 100 |
Net cash used in investing activities | -131,595 | -88,781 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Borrowings under lines of credit | 44,686 | 105,412 |
Payments against lines of credit | -64,634 | -114,436 |
Net borrowings of commercial paper | 54,997 | 0 |
Net decrease in long-term debt | -9,538 | -4,845 |
Proceeds from stock options exercised | 31,816 | 48,142 |
Excess tax benefits from stock-based compensation | 22,177 | 41,690 |
Purchase of treasury stock | -235,847 | -202,400 |
Cash dividends paid | -140,885 | -123,549 |
Net cash used in financing activities | -297,228 | -249,986 |
Exchange rate effect on cash and cash equivalents | 1,420 | -11,378 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -98,937 | 36,678 |
Cash and cash equivalents at beginning of period | 430,644 | 452,063 |
Cash and cash equivalents at end of period | $331,707 | $488,741 |
BACKGROUND_AND_BASIS_OF_PRESEN
BACKGROUND AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
BACKGROUND AND BASIS OF PRESENTATION | ' |
BACKGROUND AND BASIS OF PRESENTATION | |
W.W. Grainger, Inc. is a broad-line distributor of maintenance, repair and operating supplies, and other related products and services used by businesses and institutions. W.W. Grainger, Inc.’s operations are primarily in the United States and Canada, with a presence in Europe, Asia and Latin America. In this report, the words “Company” or “Grainger” mean W.W. Grainger, Inc. and its subsidiaries. | |
The Condensed Consolidated Financial Statements of the Company and the related notes are unaudited and should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC). | |
The Condensed Consolidated Balance Sheet as of December 31, 2013 has been derived from the audited consolidated financial statements at that date, but does not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. | |
The unaudited financial information reflects all adjustments (primarily consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of the statements contained herein. |
NEW_ACCOUNTING_STANDARDS
NEW ACCOUNTING STANDARDS | 6 Months Ended |
Jun. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
NEW ACCOUNTING STANDARDS | ' |
NEW ACCOUNTING STANDARDS | |
In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in ASU 2014-08 raise the threshold for a disposal to qualify as discontinued operations and require new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. Under the new standard, companies report discontinued operations when they have a disposal that represents a strategic shift that has or will have a major impact on operations or financial results. This ASU will be applied prospectively and is effective for interim and annual periods beginning after December 15, 2014. Early adoption is permitted provided the disposal was not previously disclosed. This ASU is not expected to have a material impact on the Company's consolidated financial statements. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This ASU will be effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. The ASU allows for either full retrospective or modified retrospective adoption. The Company is currently evaluating the transition method that will be elected and the potential effects of the adoption of this ASU on the Company's consolidated financial statements. |
DIVIDEND
DIVIDEND | 6 Months Ended |
Jun. 30, 2014 | |
Dividends [Abstract] | ' |
DIVIDEND | ' |
DIVIDEND | |
On July 30, 2014, the Company’s Board of Directors declared a quarterly dividend of $1.08 per share, payable September 1, 2014, to shareholders of record on August 11, 2014. |
SHORTTERM_DEBT
SHORT-TERM DEBT | 6 Months Ended |
Jun. 30, 2014 | |
Short-term Debt [Abstract] | ' |
SHORT-TERM DEBT | ' |
SHORT-TERM DEBT | |
At June 30, 2014, there was $55 million of commercial paper outstanding, issued for general working capital needs. The commercial paper matured on July 7, 2014, and was paid off in full. |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
DERIVATIVE INSTRUMENTS | ' |
DERIVATIVE INSTRUMENTS | |
The Company uses derivative instruments to manage a portion of exposures to fluctuations in interest rates and foreign currency exchange rates. The Company does not enter into derivative financial instruments for trading or speculative purposes. The fair values of these instruments are determined by using quoted market forward rates (level 2 inputs) and reflect the present value of the amount that the Company would pay for contracts involving the same notional amounts and maturity dates. These instruments qualify for hedge accounting and the changes in fair value are reported as a component of other comprehensive earnings (losses) net of tax effects. | |
As of June 30, 2014 and December 31, 2013, the fair value of the Company's interest rate swap included on the balance sheet as a liability under Employment-related and other noncurrent liabilities was $3 million for both periods. The purpose of the interest rate swap is to partially hedge the future interest expense of the euro-denominated term loan entered into to fund a portion of the Fabory acquisition in 2011. The swap matures in August 2016. | |
The Company had a fair value of $1 million in forward contracts as of June 30, 2014 and December 31, 2013, included on the balance sheet as assets under Prepaid expenses and other assets. The forward contracts were entered into to hedge against adverse changes in the exchange rate on the Company's intercompany loan with the Canadian subsidiary. The contracts expire in September 2014. |
EMPLOYEE_BENEFITS
EMPLOYEE BENEFITS | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ' | |||||||||||||||
EMPLOYEE BENEFITS | ' | |||||||||||||||
EMPLOYEE BENEFITS - POSTRETIREMENT | ||||||||||||||||
The Company has a postretirement healthcare benefits plan that provides coverage for a majority of its United States employees hired prior to January 1, 2013, and their dependents should they elect to maintain such coverage upon retirement. Covered employees become eligible for participation when they qualify for retirement while working for the Company. Participation in the plan is voluntary and requires participants to make contributions toward the cost of the plan, as determined by the Company. | ||||||||||||||||
The net periodic benefit costs charged to operating expenses, which are valued at the measurement date of January 1 and recognized evenly throughout the year, consisted of the following components (in thousands of dollars): | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 2,252 | $ | 2,567 | $ | 4,503 | $ | 5,294 | ||||||||
Interest cost | 2,637 | 2,119 | 5,274 | 4,469 | ||||||||||||
Expected return on assets | (2,060 | ) | (1,769 | ) | (4,119 | ) | (3,538 | ) | ||||||||
Amortization of transition asset | (35 | ) | (36 | ) | (71 | ) | (71 | ) | ||||||||
Amortization of unrecognized losses | 195 | 746 | 390 | 1,862 | ||||||||||||
Amortization of prior service credits | (1,814 | ) | (1,852 | ) | (3,627 | ) | (3,705 | ) | ||||||||
Net periodic benefit costs | $ | 1,175 | $ | 1,775 | $ | 2,350 | $ | 4,311 | ||||||||
The Company has established a Group Benefit Trust to fund the plan and process benefit payments. The funding of the trust is an estimated amount which is intended to allow the maximum deductible contribution under the Internal Revenue Code of 1986 (IRC), as amended. There are no minimum funding requirements and the Company intends to follow its practice of funding the maximum deductible contribution under the IRC. As of June 30, 2014, the plan was in an overfunded position, and the Company currently does not anticipate significant contributions to the trust in 2014. | ||||||||||||||||
During the second quarter of 2014, the Company adopted changes to the retirement plan offered to employees in the Netherlands. The plan was transitioned from a defined benefit plan to a defined contribution plan, and all existing and future obligations under the defined benefit plan have been transferred to a third party. As of December 31, 2013, this pension plan was in an overfunded position with a net pension asset of $5 million and $9 million of unrecognized losses included in Accumulated other comprehensive earnings (AOCE). As a result of the plan amendment and settlement, the Company reclassified the unrecognized losses from AOCE to warehousing, marketing and administrative expenses on the Statement of Earnings in an amount of $9 million, with a corresponding tax benefit to income taxes on the Statement of Earnings in an amount of $2 million. In addition, the Company recognized a $3 million write-off related to the plan's assets and liabilities, net of tax. Effective January 1, 2014, the affected employees have an option to participate in the defined contribution plan sponsored by the Company for which contributions are made by the Company and participating employees. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||
The Company has two reportable segments: the United States and Canada. The United States operating segment reflects the results of the Company's U.S. business. The Canada operating segment reflects the results for Acklands – Grainger Inc., the Company’s Canadian business. Other businesses include Zoro, the single channel online business in the United States, and operations in Europe, Asia and Latin America. These other businesses individually do not meet the definition of a reportable segment. Operating segments generate revenue almost exclusively through the distribution of maintenance, repair and operating supplies, as service revenues account for approximately 1% of total revenues for each operating segment. Following is a summary of segment results (in thousands of dollars): | ||||||||||||||||
Three Months Ended June 30, 2014 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 1,992,955 | $ | 264,046 | $ | 298,926 | $ | 2,555,927 | ||||||||
Intersegment net sales | (49,358 | ) | (42 | ) | (423 | ) | (49,823 | ) | ||||||||
Net sales to external customers | $ | 1,943,597 | $ | 264,004 | $ | 298,503 | $ | 2,506,104 | ||||||||
Segment operating earnings | $ | 365,099 | $ | 19,212 | $ | (456 | ) | $ | 383,855 | |||||||
Three Months Ended June 30, 2013 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 1,863,112 | $ | 288,645 | $ | 261,282 | $ | 2,413,039 | ||||||||
Intersegment net sales | (31,135 | ) | (112 | ) | (231 | ) | (31,478 | ) | ||||||||
Net sales to external customers | $ | 1,831,977 | $ | 288,533 | $ | 261,051 | $ | 2,381,561 | ||||||||
Segment operating earnings | $ | 338,884 | $ | 37,299 | $ | 12,799 | $ | 388,982 | ||||||||
Six Months Ended June 30, 2014 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 3,890,265 | $ | 518,342 | $ | 573,832 | $ | 4,982,439 | ||||||||
Intersegment net sales | (90,225 | ) | (88 | ) | (395 | ) | (90,708 | ) | ||||||||
Net sales to external customers | $ | 3,800,040 | $ | 518,254 | $ | 573,437 | $ | 4,891,731 | ||||||||
Segment operating earnings | $ | 718,786 | $ | 40,508 | $ | 8,019 | $ | 767,313 | ||||||||
Six Months Ended June 30, 2013 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 3,637,650 | $ | 571,786 | $ | 509,156 | $ | 4,718,592 | ||||||||
Intersegment net sales | (56,025 | ) | (151 | ) | (420 | ) | (56,596 | ) | ||||||||
Net sales to external customers | $ | 3,581,625 | $ | 571,635 | $ | 508,736 | $ | 4,661,996 | ||||||||
Segment operating earnings | $ | 669,772 | $ | 70,155 | $ | 21,050 | $ | 760,977 | ||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Segment assets: | ||||||||||||||||
June 30, 2014 | $ | 2,133,561 | $ | 366,829 | $ | 390,602 | $ | 2,890,992 | ||||||||
December 31, 2013 | $ | 2,045,564 | $ | 392,147 | $ | 359,007 | $ | 2,796,718 | ||||||||
Following are reconciliations of segment information with the consolidated totals per the financial statements (in thousands of dollars): | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Operating earnings: | ||||||||||||||||
Total operating earnings for operating segments | $ | 383,855 | $ | 388,982 | $ | 767,313 | $ | 760,977 | ||||||||
Unallocated expenses and eliminations | (43,104 | ) | (38,910 | ) | (72,223 | ) | (67,601 | ) | ||||||||
Total consolidated operating earnings | $ | 340,751 | $ | 350,072 | $ | 695,090 | $ | 693,376 | ||||||||
June 30, 2014 | Dec 31, 2013 | |||||||||||||||
Assets: | ||||||||||||||||
Total assets for operating segments | $ | 2,890,992 | $ | 2,796,718 | ||||||||||||
Other current and non-current assets | 2,162,687 | 2,118,298 | ||||||||||||||
Unallocated assets | 257,633 | 351,312 | ||||||||||||||
Total consolidated assets | $ | 5,311,312 | $ | 5,266,328 | ||||||||||||
Assets for operating segments include net accounts receivable and first-in, first-out inventory which are reported to the Company's Chief Operating Decision Maker. Other current and non-current assets include all other asset balances for the operating segments. | ||||||||||||||||
Unallocated expenses and unallocated assets primarily relate to the Company headquarter's support services, which are not part of any business segment, as well as intercompany eliminations. Unallocated expenses include payroll and benefits, depreciation and other costs associated with headquarters-related support services. Unallocated assets include non-operating cash and cash equivalents, certain prepaid expenses and property, buildings and equipment-net. | ||||||||||||||||
Unallocated assets decreased by $94 million at June 30, 2014 compared to December 31, 2013, due to lower cash balances primarily driven by payments for the employee profit sharing plan, share repurchases and dividends. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share under the two-class method (in thousands of dollars, except for share and per share amounts): | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net earnings attributable to W.W. Grainger, Inc. as reported | $ | 205,915 | $ | 217,660 | $ | 422,568 | $ | 429,498 | ||||||||
Distributed earnings available to participating securities | (727 | ) | (826 | ) | (1,562 | ) | (1,717 | ) | ||||||||
Undistributed earnings available to participating securities | (1,666 | ) | (2,265 | ) | (3,765 | ) | (5,006 | ) | ||||||||
Numerator for basic earnings per share – Undistributed and distributed earnings available to common shareholders | 203,522 | 214,569 | 417,241 | 422,775 | ||||||||||||
Undistributed earnings allocated to participating securities | 1,666 | 2,265 | 3,765 | 5,006 | ||||||||||||
Undistributed earnings reallocated to participating securities | (1,645 | ) | (2,230 | ) | (3,716 | ) | (4,925 | ) | ||||||||
Numerator for diluted earnings per share – Undistributed and distributed earnings available to common shareholders | $ | 203,543 | $ | 214,604 | $ | 417,290 | $ | 422,856 | ||||||||
Denominator for basic earnings per share – weighted average shares | 68,453,602 | 69,664,697 | 68,576,232 | 69,613,947 | ||||||||||||
Effect of dilutive securities | 888,283 | 1,136,353 | 932,893 | 1,174,256 | ||||||||||||
Denominator for diluted earnings per share – weighted average shares adjusted for dilutive securities | 69,341,885 | 70,801,050 | 69,509,125 | 70,788,203 | ||||||||||||
Earnings per share two-class method | ||||||||||||||||
Basic | $ | 2.97 | $ | 3.08 | $ | 6.08 | $ | 6.07 | ||||||||
Diluted | $ | 2.94 | $ | 3.03 | $ | 6 | $ | 5.97 | ||||||||
CONTINGENCIES_AND_LEGAL_MATTER
CONTINGENCIES AND LEGAL MATTERS | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
CONTINGENCIES AND LEGAL MATTERS | ' |
CONTINGENCIES AND LEGAL MATTERS | |
From time to time the Company is involved in various legal and administrative proceedings that are incidental to its business, including claims related to product liability, general negligence, contract disputes, environmental issues, wage and hour laws, intellectual property, employment practices, regulatory compliance or other matters and actions brought by employees, consumers, competitors, suppliers or governmental entities. As a government contractor selling to federal, state and local governmental entities, the Company is also subject to governmental or regulatory inquiries or audits or other proceedings, including those related to pricing compliance. It is not expected that the ultimate resolution of any of these matters will have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position or results of operations. |
EMPLOYEE_BENEFITS_Tables
EMPLOYEE BENEFITS (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ' | |||||||||||||||
Net Periodic Benefit Costs Charged to Operating Expenses | ' | |||||||||||||||
The net periodic benefit costs charged to operating expenses, which are valued at the measurement date of January 1 and recognized evenly throughout the year, consisted of the following components (in thousands of dollars): | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 2,252 | $ | 2,567 | $ | 4,503 | $ | 5,294 | ||||||||
Interest cost | 2,637 | 2,119 | 5,274 | 4,469 | ||||||||||||
Expected return on assets | (2,060 | ) | (1,769 | ) | (4,119 | ) | (3,538 | ) | ||||||||
Amortization of transition asset | (35 | ) | (36 | ) | (71 | ) | (71 | ) | ||||||||
Amortization of unrecognized losses | 195 | 746 | 390 | 1,862 | ||||||||||||
Amortization of prior service credits | (1,814 | ) | (1,852 | ) | (3,627 | ) | (3,705 | ) | ||||||||
Net periodic benefit costs | $ | 1,175 | $ | 1,775 | $ | 2,350 | $ | 4,311 | ||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | |||||||||||||||
Following is a summary of segment results (in thousands of dollars): | ||||||||||||||||
Three Months Ended June 30, 2014 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 1,992,955 | $ | 264,046 | $ | 298,926 | $ | 2,555,927 | ||||||||
Intersegment net sales | (49,358 | ) | (42 | ) | (423 | ) | (49,823 | ) | ||||||||
Net sales to external customers | $ | 1,943,597 | $ | 264,004 | $ | 298,503 | $ | 2,506,104 | ||||||||
Segment operating earnings | $ | 365,099 | $ | 19,212 | $ | (456 | ) | $ | 383,855 | |||||||
Three Months Ended June 30, 2013 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 1,863,112 | $ | 288,645 | $ | 261,282 | $ | 2,413,039 | ||||||||
Intersegment net sales | (31,135 | ) | (112 | ) | (231 | ) | (31,478 | ) | ||||||||
Net sales to external customers | $ | 1,831,977 | $ | 288,533 | $ | 261,051 | $ | 2,381,561 | ||||||||
Segment operating earnings | $ | 338,884 | $ | 37,299 | $ | 12,799 | $ | 388,982 | ||||||||
Six Months Ended June 30, 2014 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 3,890,265 | $ | 518,342 | $ | 573,832 | $ | 4,982,439 | ||||||||
Intersegment net sales | (90,225 | ) | (88 | ) | (395 | ) | (90,708 | ) | ||||||||
Net sales to external customers | $ | 3,800,040 | $ | 518,254 | $ | 573,437 | $ | 4,891,731 | ||||||||
Segment operating earnings | $ | 718,786 | $ | 40,508 | $ | 8,019 | $ | 767,313 | ||||||||
Six Months Ended June 30, 2013 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 3,637,650 | $ | 571,786 | $ | 509,156 | $ | 4,718,592 | ||||||||
Intersegment net sales | (56,025 | ) | (151 | ) | (420 | ) | (56,596 | ) | ||||||||
Net sales to external customers | $ | 3,581,625 | $ | 571,635 | $ | 508,736 | $ | 4,661,996 | ||||||||
Segment operating earnings | $ | 669,772 | $ | 70,155 | $ | 21,050 | $ | 760,977 | ||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Segment assets: | ||||||||||||||||
June 30, 2014 | $ | 2,133,561 | $ | 366,829 | $ | 390,602 | $ | 2,890,992 | ||||||||
December 31, 2013 | $ | 2,045,564 | $ | 392,147 | $ | 359,007 | $ | 2,796,718 | ||||||||
Reconciliation Of Operating Earnings From Segment To Consolidated | ' | |||||||||||||||
Following are reconciliations of segment information with the consolidated totals per the financial statements (in thousands of dollars): | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Operating earnings: | ||||||||||||||||
Total operating earnings for operating segments | $ | 383,855 | $ | 388,982 | $ | 767,313 | $ | 760,977 | ||||||||
Unallocated expenses and eliminations | (43,104 | ) | (38,910 | ) | (72,223 | ) | (67,601 | ) | ||||||||
Total consolidated operating earnings | $ | 340,751 | $ | 350,072 | $ | 695,090 | $ | 693,376 | ||||||||
Reconciliation of Assets from Segment to Consolidated | ' | |||||||||||||||
June 30, 2014 | Dec 31, 2013 | |||||||||||||||
Assets: | ||||||||||||||||
Total assets for operating segments | $ | 2,890,992 | $ | 2,796,718 | ||||||||||||
Other current and non-current assets | 2,162,687 | 2,118,298 | ||||||||||||||
Unallocated assets | 257,633 | 351,312 | ||||||||||||||
Total consolidated assets | $ | 5,311,312 | $ | 5,266,328 | ||||||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computation of Basic and Diluted Earnings per Share under two-class method | ' | |||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share under the two-class method (in thousands of dollars, except for share and per share amounts): | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net earnings attributable to W.W. Grainger, Inc. as reported | $ | 205,915 | $ | 217,660 | $ | 422,568 | $ | 429,498 | ||||||||
Distributed earnings available to participating securities | (727 | ) | (826 | ) | (1,562 | ) | (1,717 | ) | ||||||||
Undistributed earnings available to participating securities | (1,666 | ) | (2,265 | ) | (3,765 | ) | (5,006 | ) | ||||||||
Numerator for basic earnings per share – Undistributed and distributed earnings available to common shareholders | 203,522 | 214,569 | 417,241 | 422,775 | ||||||||||||
Undistributed earnings allocated to participating securities | 1,666 | 2,265 | 3,765 | 5,006 | ||||||||||||
Undistributed earnings reallocated to participating securities | (1,645 | ) | (2,230 | ) | (3,716 | ) | (4,925 | ) | ||||||||
Numerator for diluted earnings per share – Undistributed and distributed earnings available to common shareholders | $ | 203,543 | $ | 214,604 | $ | 417,290 | $ | 422,856 | ||||||||
Denominator for basic earnings per share – weighted average shares | 68,453,602 | 69,664,697 | 68,576,232 | 69,613,947 | ||||||||||||
Effect of dilutive securities | 888,283 | 1,136,353 | 932,893 | 1,174,256 | ||||||||||||
Denominator for diluted earnings per share – weighted average shares adjusted for dilutive securities | 69,341,885 | 70,801,050 | 69,509,125 | 70,788,203 | ||||||||||||
Earnings per share two-class method | ||||||||||||||||
Basic | $ | 2.97 | $ | 3.08 | $ | 6.08 | $ | 6.07 | ||||||||
Diluted | $ | 2.94 | $ | 3.03 | $ | 6 | $ | 5.97 | ||||||||
DIVIDEND_Details
DIVIDEND (Details) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Jun. 30, 2014 | |
Dividends [Abstract] | ' | ' |
Dividend payable declaration date | 30-Jul-14 | ' |
Dividends Payable, Amount Per Share | ' | $1.08 |
Dividend payable date to be paid | 1-Sep-14 | ' |
Dividends payable record date | 11-Aug-14 | ' |
SHORTTERM_DEBT_Details
SHORT-TERM DEBT (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 |
Short-term Debt [Abstract] | ' | ' |
Commercial Paper | ' | $55 |
Debt Instrument, Maturity Date | 7-Jul-14 | ' |
DERIVATIVE_INSTRUMENTS_Details
DERIVATIVE INSTRUMENTS (Details) (USD $) | 59 Months Ended | 45 Months Ended | ||||
In Millions, unless otherwise specified | Aug. 31, 2016 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative instruments, Liabilities | ' | $3 | $3 | ' | ' | ' |
Derivative instruments, Assets | ' | ' | ' | ' | $1 | $1 |
Derivative, Maturity Date | 31-Aug-16 | ' | ' | 30-Sep-14 | ' | ' |
EMPLOYEE_BENEFITS_Details
EMPLOYEE BENEFITS (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Netherlands Plan Change | Netherlands Plan Change | Netherlands Plan Change | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ' | ' | ' | ' | ' | ' | ' |
Service cost | $2,252 | $2,567 | $4,503 | $5,294 | ' | ' | ' |
Interest cost | 2,637 | 2,119 | 5,274 | 4,469 | ' | ' | ' |
Expected return on assets | -2,060 | -1,769 | -4,119 | -3,538 | ' | ' | ' |
Amortization of transition asset | -35 | -36 | -71 | -71 | ' | ' | ' |
Amortization of unrecognized losses | 195 | 746 | 390 | 1,862 | ' | ' | ' |
Amortization of prior service credits | -1,814 | -1,852 | -3,627 | -3,705 | ' | ' | ' |
Net periodic benefit costs | 1,175 | 1,775 | 2,350 | 4,311 | ' | ' | ' |
Defined Benefit Plan, Fair Value of Plan Assets | ' | ' | ' | ' | ' | ' | 5,000 |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax | ' | ' | ' | ' | ' | ' | 9,000 |
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, before Tax | ' | ' | ' | ' | 9,000 | ' | ' |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Tax | ' | ' | ' | ' | -2,000 | ' | ' |
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements and Curtailments | ' | ' | ' | ' | ($3,000) | ' | ' |
Effective Date of plan change | ' | ' | ' | ' | ' | 1-Jan-14 | ' |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Summary of segment results [Line Items] | ' | ' | ' | ' | ' |
Service Revenue, Percentage | ' | ' | 1.00% | ' | ' |
Unallocated Assets Decrease | ' | ' | $94,000 | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | 2,506,104 | 2,381,561 | 4,891,731 | 4,661,996 | ' |
Operating earnings (expenses) | 340,751 | 350,072 | 695,090 | 693,376 | ' |
Total assets | 5,311,312 | ' | 5,311,312 | ' | 5,266,328 |
United States [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | 1,943,597 | 1,831,977 | 3,800,040 | 3,581,625 | ' |
Total assets | 2,133,561 | ' | 2,133,561 | ' | 2,045,564 |
Canada [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | 264,004 | 288,533 | 518,254 | 571,635 | ' |
Total assets | 366,829 | ' | 366,829 | ' | 392,147 |
Other Businesses [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | 298,503 | 261,051 | 573,437 | 508,736 | ' |
Total assets | 390,602 | ' | 390,602 | ' | 359,007 |
Segment balances before intersegment eliminations and consolidation reconciling items [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | 2,555,927 | 2,413,039 | 4,982,439 | 4,718,592 | ' |
Operating earnings (expenses) | 383,855 | 388,982 | 767,313 | 760,977 | ' |
Total assets | 2,890,992 | ' | 2,890,992 | ' | 2,796,718 |
Segment balances before intersegment eliminations and consolidation reconciling items [Member] | United States [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | 1,992,955 | 1,863,112 | 3,890,265 | 3,637,650 | ' |
Operating earnings (expenses) | 365,099 | 338,884 | 718,786 | 669,772 | ' |
Segment balances before intersegment eliminations and consolidation reconciling items [Member] | Canada [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | 264,046 | 288,645 | 518,342 | 571,786 | ' |
Operating earnings (expenses) | 19,212 | 37,299 | 40,508 | 70,155 | ' |
Segment balances before intersegment eliminations and consolidation reconciling items [Member] | Other Businesses [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | 298,926 | 261,282 | 573,832 | 509,156 | ' |
Operating earnings (expenses) | -456 | 12,799 | 8,019 | 21,050 | ' |
Intersegment Eliminations [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | -49,823 | -31,478 | -90,708 | -56,596 | ' |
Intersegment Eliminations [Member] | United States [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | -49,358 | -31,135 | -90,225 | -56,025 | ' |
Intersegment Eliminations [Member] | Canada [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | -42 | -112 | -88 | -151 | ' |
Intersegment Eliminations [Member] | Other Businesses [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Net sales | -423 | -231 | -395 | -420 | ' |
Eliminations and Unallocated in Consolidation [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Operating earnings (expenses) | -43,104 | -38,910 | -72,223 | -67,601 | ' |
Total assets | 257,633 | ' | 257,633 | ' | 351,312 |
Segment other current and non-current assets [Member] | ' | ' | ' | ' | ' |
Summarized Information | ' | ' | ' | ' | ' |
Total assets | $2,162,687 | ' | $2,162,687 | ' | $2,118,298 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net earnings attributable to W.W. Grainger, Inc. as reported | $205,915 | $217,660 | $422,568 | $429,498 |
Distributed earnings available to participating securities | -727 | -826 | -1,562 | -1,717 |
Undistributed earnings available to participating securities | -1,666 | -2,265 | -3,765 | -5,006 |
Numerator for basic earnings per share b Undistributed and distributed earnings available to common shareholders | 203,522 | 214,569 | 417,241 | 422,775 |
Undistributed earnings allocated to participating securities | 1,666 | 2,265 | 3,765 | 5,006 |
Undistributed earnings reallocated to participating securities | -1,645 | -2,230 | -3,716 | -4,925 |
Numerator for diluted earnings per share b Undistributed and distributed earnings available to common shareholders | $203,543 | $214,604 | $417,290 | $422,856 |
Denominator for basic earnings per share - weighted average shares (in shares) | 68,453,602 | 69,664,697 | 68,576,232 | 69,613,947 |
Effect of dilutive securities | 888,283 | 1,136,353 | 932,893 | 1,174,256 |
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities (in shares) | 69,341,885 | 70,801,050 | 69,509,125 | 70,788,203 |
Basic (in dollars per share) | $2.97 | $3.08 | $6.08 | $6.07 |
Diluted (in dollars per share) | $2.94 | $3.03 | $6 | $5.97 |