DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jan. 31, 2015 | Jun. 30, 2014 | |
Document Information [Line Items] | |||
Entity Registrant Name | GRAINGER W W INC | ||
Entity Central Index Key | 277135 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 67,442,179 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $16,485,186,075 |
CONSOLIDATED_STATEMENTS_OF_EAR
CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales | $9,964,953 | $9,437,758 | $8,950,045 |
Cost of merchandise sold | 5,650,711 | 5,301,275 | 5,033,885 |
Gross profit | 4,314,242 | 4,136,483 | 3,916,160 |
Warehousing, marketing and administrative expenses | 2,967,125 | 2,839,629 | 2,785,035 |
Operating earnings | 1,347,117 | 1,296,854 | 1,131,125 |
Other income and (expense): | |||
Interest income | 2,068 | 3,234 | 2,660 |
Interest expense | -10,093 | -13,225 | -16,078 |
Other non-operating income | 483 | 2,732 | 1,866 |
Other non-operating expense | -5,189 | -1,996 | -1,784 |
Total other income and (expense) | -12,731 | -9,255 | -13,336 |
Earnings before income taxes | 1,334,386 | 1,287,599 | 1,117,789 |
Income taxes | 522,090 | 479,850 | 418,940 |
Net earnings | 812,296 | 807,749 | 698,849 |
Net earnings attributable to noncontrolling interest | 10,567 | 10,713 | 8,968 |
Net earnings attributable to W.W. Grainger, Inc. | $801,729 | $797,036 | $689,881 |
Earnings per share: | |||
Basic (in dollars per share) | $11.59 | $11.31 | $9.71 |
Diluted (in dollars per share) | $11.45 | $11.13 | $9.52 |
Weighted average number of shares outstanding: | |||
Basic (in shares) | 68,334,322 | 69,455,507 | 69,811,881 |
Diluted (in shares) | 69,205,744 | 70,576,432 | 71,181,733 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net earnings | $812,296 | $807,749 | $698,849 |
Other comprehensive earnings (losses): | |||
Foreign currency translation (loss) gain, net of tax benefit (expense) of $2,806, $4,078 and $(1,653), respectively | -127,847 | -78,253 | 7,344 |
Net investment hedge, gain (loss) net of tax (expense) benefit of $(2,360), $(3,393) and $1,204, respectively | 3,782 | 5,438 | -1,930 |
Reclassification of cumulative currency translation | 9,042 | 0 | 0 |
Net foreign currency translation (loss) gain | -115,023 | -72,815 | 5,414 |
Defined postretirement benefit plan, net of tax benefit (expense) of $14,140, $(21,632) and $(47,948), respectively | -22,667 | 35,045 | 75,625 |
Reclassification adjustments related to amortization, net of tax expense of $2,545, $1,444, respectively | -4,072 | -2,387 | 0 |
Net defined postretirement benefit plans | -26,739 | 32,658 | 75,625 |
Loss on other employment-related benefit plans, net of tax benefit of $440, $313, and $1,621, respectively | -1,462 | -1,319 | -5,044 |
Reclassification adjustment related to plan amendment and settlement, net of tax benefit of $(2,324) | 6,971 | 0 | 0 |
Net other employment-related benefit plans | 5,509 | -1,319 | -5,044 |
Derivative instrument change in fair value of cash flow hedge | 786 | 1,190 | -2,545 |
Total other comprehensive earnings (losses) | -135,467 | -40,286 | 73,450 |
Comprehensive earnings, net of tax | 676,829 | 767,463 | 772,299 |
Less: Comprehensive earnings attributable to noncontrolling interest: | |||
Net earnings | 10,567 | 10,713 | 8,968 |
Foreign currency translation adjustments | -9,880 | -15,622 | -8,866 |
Comprehensive earnings attributable to W.W. Grainger, Inc. | $676,142 | $772,372 | $772,197 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Parentheticals) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Foreign currency translation adjustments, tax benefit (expense) | $2,806 | $4,078 | ($1,653) |
Net investment hedge tax (expense) benefit | -2,360 | -3,393 | 1,204 |
Defined postretirement benefit plan tax benefit (expense) | 14,140 | -21,632 | -47,948 |
Tax expense from defined postretirement benefit plan reclassification adjustment | 2,545 | 1,444 | 0 |
Other employment-related benefit plans tax benefit | 440 | 313 | 1,621 |
Tax benefit from other employment-related benefit plan reclassification adjustment | ($2,324) | $0 | $0 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $226,644 | $430,644 |
Accounts receivable (less allowances for doubtful accounts of $22,121 and $20,096, respectively) | 1,172,924 | 1,101,656 |
Inventories - net | 1,356,396 | 1,305,520 |
Prepaid expenses and other assets | 102,669 | 115,331 |
Deferred income taxes | 61,387 | 75,819 |
Prepaid income taxes | 47,529 | 15,315 |
Total current assets | 2,967,549 | 3,044,285 |
Land | 337,573 | 277,256 |
Buildings, structures and improvements | 1,269,491 | 1,259,237 |
Furniture, fixtures, machinery and equipment | 1,508,066 | 1,404,597 |
PROPERTY, BUILDINGS AND EQUIPMENT | 3,115,130 | 2,941,090 |
Less: Accumulated depreciation and amortization | 1,790,784 | 1,732,528 |
Property, buildings and equipment - net | 1,324,346 | 1,208,562 |
DEFERRED INCOME TAXES | 16,718 | 16,209 |
GOODWILL | 506,905 | 525,467 |
OTHER ASSETS AND INTANGIBLES - NET | 468,734 | 471,805 |
TOTAL ASSETS | 5,284,252 | 5,266,328 |
CURRENT LIABILITIES | ||
Short-term debt | 56,896 | 66,857 |
Current maturities of long-term debt | 23,404 | 30,429 |
Trade accounts payable | 554,088 | 510,634 |
Accrued compensation and benefits | 191,696 | 185,905 |
Accrued contributions to employees' profit sharing plans | 178,076 | 176,800 |
Accrued expenses | 245,300 | 218,835 |
Income taxes payable | 12,256 | 6,330 |
Total current liabilities | 1,261,716 | 1,195,790 |
LONG-TERM DEBT (less current maturities) | 404,536 | 445,513 |
DEFERRED INCOME TAXES AND TAX UNCERTAINTIES | 95,455 | 113,585 |
EMPLOYMENT-RELATED AND OTHER NONCURRENT LIABILITIES | 238,444 | 184,604 |
SHAREHOLDERS' EQUITY | ||
Cumulative Preferred Stock - $5 par value - 12,000,000 shares authorized; none issued or 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 | 948,340 | 893,055 |
Retained earnings | 6,335,990 | 5,822,612 |
Accumulated other comprehensive earnings | -96,673 | 28,914 |
Treasury stock, at cost – 42,227,178 and 40,805,281 shares, respectively | -4,032,615 | -3,548,973 |
Total W.W. Grainger, Inc. shareholders' equity | 3,209,872 | 3,250,438 |
Noncontrolling interest | 74,229 | 76,398 |
Total shareholders' equity | 3,284,101 | 3,326,836 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $5,284,252 | $5,266,328 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | 3 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stockholders' Equity Balance | $3,284,101 | $3,326,836 | $3,284,101 | $3,326,836 | ||
Net earnings attributable to noncontrolling interest | 10,567 | 10,713 | 8,968 | |||
Net earnings attributable to W.W. Grainger, Inc. | 148,839 | 156,749 | 801,729 | 797,036 | 689,881 | |
Other comprehensive earnings | -135,467 | -40,286 | 73,450 | |||
Common Stock [Member] | ||||||
Stockholders' Equity Balance | 54,830 | 54,830 | 54,830 | 54,830 | 54,830 | 54,830 |
Exercise of stock options | 0 | 0 | 0 | |||
Tax benefits on stock-based compensation awards | 0 | 0 | 0 | |||
Stock option expense | 0 | 0 | 0 | |||
Amortization of other stock-based compensation awards | 0 | 0 | 0 | |||
Settlement and vesting of other stock-based compensation awards | 0 | 0 | 0 | |||
Director's stock compensation | 0 | |||||
Purchase of treasury stock | 0 | 0 | ||||
Purchase of noncontrolling interest - Colombia | 0 | |||||
Net earnings attributable to W.W. Grainger, Inc. | 0 | 0 | 0 | |||
Other comprehensive earnings | 0 | 0 | 0 | |||
Cash dividends paid | 0 | 0 | 0 | |||
Additional Paid-in Capital [Member] | ||||||
Stockholders' Equity Balance | 948,340 | 893,055 | 948,340 | 893,055 | 812,573 | 700,826 |
Exercise of stock options | -4,709 | -4,035 | -927 | |||
Tax benefits on stock-based compensation awards | 36,618 | 62,385 | 60,122 | |||
Stock option expense | 14,547 | 17,373 | 17,898 | |||
Amortization of other stock-based compensation awards | 31,480 | 34,049 | 35,125 | |||
Settlement and vesting of other stock-based compensation awards | -32,711 | -37,851 | -31,175 | |||
Director's stock compensation | 30,867 | |||||
Purchase of treasury stock | 0 | 0 | -163 | |||
Purchase of noncontrolling interest - Colombia | -51 | |||||
Net earnings attributable to W.W. Grainger, Inc. | 0 | 0 | 0 | |||
Other comprehensive earnings | 0 | 0 | 0 | |||
Cash dividends paid | -642 | -542 | 0 | |||
Retained Earnings [Member] | ||||||
Stockholders' Equity Balance | 6,335,990 | 5,822,612 | 6,335,990 | 5,822,612 | 5,278,577 | 4,806,110 |
Exercise of stock options | 0 | 0 | 0 | |||
Tax benefits on stock-based compensation awards | 0 | 0 | 0 | |||
Stock option expense | 0 | 0 | 0 | |||
Amortization of other stock-based compensation awards | 0 | 0 | 0 | |||
Settlement and vesting of other stock-based compensation awards | 0 | 0 | 0 | |||
Director's stock compensation | 0 | |||||
Purchase of treasury stock | 0 | 0 | 0 | |||
Purchase of noncontrolling interest - Colombia | 0 | |||||
Net earnings attributable to W.W. Grainger, Inc. | 801,729 | 797,036 | 689,881 | |||
Other comprehensive earnings | 0 | 0 | 0 | |||
Cash dividends paid | 288,351 | -253,001 | 217,414 | |||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||
Stockholders' Equity Balance | -96,673 | 28,914 | -96,673 | 28,914 | 53,578 | -28,738 |
Exercise of stock options | 0 | 0 | 0 | |||
Tax benefits on stock-based compensation awards | 0 | 0 | 0 | |||
Stock option expense | 0 | 0 | 0 | |||
Amortization of other stock-based compensation awards | 0 | 0 | 0 | |||
Settlement and vesting of other stock-based compensation awards | 0 | 0 | 0 | |||
Director's stock compensation | 0 | |||||
Purchase of treasury stock | 0 | 0 | ||||
Purchase of noncontrolling interest - Colombia | 0 | |||||
Net earnings attributable to W.W. Grainger, Inc. | 0 | 0 | 0 | |||
Other comprehensive earnings | -125,587 | -24,664 | 82,316 | |||
Cash dividends paid | 0 | 0 | 0 | |||
Treasury Stock [Member] | ||||||
Stockholders' Equity Balance | -4,032,615 | -3,548,973 | -4,032,615 | -3,548,973 | -3,175,646 | -2,904,243 |
Exercise of stock options | -42,920 | -64,140 | -72,502 | |||
Tax benefits on stock-based compensation awards | 0 | 0 | 0 | |||
Stock option expense | 0 | 0 | 0 | |||
Amortization of other stock-based compensation awards | 0 | 0 | 0 | |||
Settlement and vesting of other stock-based compensation awards | -1,636 | -3,709 | -1,452 | |||
Director's stock compensation | 0 | |||||
Purchase of treasury stock | -524,926 | -433,758 | -345,357 | |||
Purchase of noncontrolling interest - Colombia | 0 | |||||
Net earnings attributable to W.W. Grainger, Inc. | 0 | 0 | 0 | |||
Other comprehensive earnings | 0 | 0 | 0 | |||
Cash dividends paid | 0 | 0 | 0 | |||
Noncontrolling Interest [Member] | ||||||
Stockholders' Equity Balance | 74,229 | 76,398 | 74,229 | 76,398 | 93,454 | 95,494 |
Exercise of stock options | -872 | -583 | -564 | |||
Tax benefits on stock-based compensation awards | 0 | 0 | 0 | |||
Stock option expense | 152 | 72 | 105 | |||
Amortization of other stock-based compensation awards | 0 | 0 | 0 | |||
Settlement and vesting of other stock-based compensation awards | 0 | 0 | 0 | |||
Director's stock compensation | 0 | |||||
Purchase of treasury stock | -194 | -183 | -148 | |||
Purchase of noncontrolling interest - Colombia | -9,612 | |||||
Net earnings attributable to noncontrolling interest | 10,567 | 10,713 | 8,968 | |||
Other comprehensive earnings | -9,880 | -15,622 | -8,866 | |||
Cash dividends paid | ($3,686) | $3,007 | ($2,663) |
STATEMENT_OF_STOCKHOLDERS_EQUI
STATEMENT OF STOCKHOLDERS' EQUITY (Parentheticals) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash dividends paid per share | $4.17 | $3.59 | $3.06 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $22,121 | $20,096 |
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 | 42,227,178 | 40,805,281 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net earnings | $812,296 | $807,749 | $698,849 |
Provision for losses on accounts receivable | 12,945 | 8,855 | 9,504 |
Deferred income taxes and tax uncertainties | -13,732 | -9,319 | 12,343 |
Depreciation and amortization | 208,326 | 180,613 | 159,049 |
Impairment of goodwill and other intangible assets | 16,652 | 26,284 | 4,945 |
Losses (gains) from non-cash charges and sales of assets | 41,037 | -22,155 | 2,609 |
Stock-based compensation | 49,032 | 55,590 | 55,500 |
Change in operating assets and liabilities - net of business acquisitions and divestitures: | |||
Accounts receivable | -122,580 | -126,465 | -45,953 |
Inventories | -92,443 | -23,636 | -14,872 |
Prepaid expenses and other assets | -24,550 | 16,873 | 8,346 |
Trade accounts payable | 32,019 | 71,118 | -54,314 |
Other current liabilities | 8,693 | -707 | -58,673 |
Current income taxes payable | -1,487 | -4,813 | -9,349 |
Accrued employment-related benefits cost | 35,027 | 9,872 | 45,795 |
Other - net | -1,421 | -3,361 | 2,416 |
Net cash provided by operating activities | 959,814 | 986,498 | 816,195 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Additions to property, buildings and equipment | -387,390 | -272,145 | -249,860 |
Proceeds from sales of assets | 26,755 | 26,701 | 8,530 |
Cash paid for business acquisitions | -30,713 | -153,915 | -64,808 |
Other – net | 7,290 | -68 | 482 |
Net cash used in investing activities | -384,058 | -399,427 | -305,656 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under lines of credit | 113,721 | 144,805 | 161,160 |
Payments against lines of credit | -117,277 | -154,450 | -205,006 |
Proceeds from issuance of long-term debt | 150,504 | 0 | 300,000 |
Payments of long-term debt and commercial paper | -170,907 | -16,681 | -219,950 |
Proceeds from stock options exercised | 48,579 | 69,412 | 72,084 |
Excess tax benefits from stock-based compensation | 33,772 | 59,984 | 57,885 |
Purchase of treasury stock | -525,120 | -438,473 | -340,532 |
Cash dividends paid | -291,395 | -255,466 | -220,077 |
Net cash used in financing activities | -758,123 | -590,869 | -394,436 |
Exchange rate effect on cash and cash equivalents | -21,633 | -17,621 | 469 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -204,000 | -21,419 | 116,572 |
Cash and cash equivalents at beginning of year | 430,644 | 452,063 | 335,491 |
Cash and cash equivalents at end of year | 226,644 | 430,644 | 452,063 |
Cash payments for interest (net of amounts capitalized) | 10,172 | 12,954 | 16,028 |
Cash payments for income taxes | $509,378 | $414,363 | $383,698 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2014 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
INDUSTRY INFORMATION | ||
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. In this report, the words “Company” or “Grainger” mean W.W. Grainger, Inc. and its subsidiaries. | ||
PRINCIPLES OF CONSOLIDATION | ||
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions are eliminated from the consolidated financial statements. | ||
EQUITY METHOD OF ACCOUNTING FOR INVESTMENTS | ||
For investments in which the Company owns or controls from 20% to 50% of the voting shares, the equity method of accounting is used. The Company also accounts for investments below 20% using the equity method when significant influence can be exercised over the operating and financial policies of the investee company. The Company currently does not have any investments accounted for under the equity method of accounting. | ||
USE OF ESTIMATES | ||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ from those estimates. | ||
FOREIGN CURRENCY TRANSLATION | ||
The U.S. dollar is the reporting currency for all periods presented. The financial statements of the Company’s foreign operating subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of the Company’s foreign operating subsidiaries are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at average rates in effect during the period. Net exchange gains or losses resulting from the translation of financial statements of foreign operations and related long-term debt and derivative instruments are recorded as a separate component of other comprehensive earnings. See Note 13 to the Consolidated Financial Statements. Foreign currency transaction gains and losses are shown in the consolidated statement of earnings. | ||
RECLASSIFICATIONS | ||
Certain amounts in the 2013 and 2012 financial statements, as previously reported, have been reclassified to conform to the 2014 presentation. These reclassifications did not have a material impact on the presentation of the consolidated financial statements. | ||
REVENUE RECOGNITION | ||
Revenues recognized include product sales, billings for freight and handling charges and fees earned for services provided. The Company recognizes product sales and billings for freight and handling charges primarily on the date products are shipped to, or picked up by, the customer. In cases where the product is shipped directly to the customer, the Company recognizes revenue at the time of shipment on a gross basis. The Company's standard shipping terms are FOB shipping point. On occasion, the Company will negotiate FOB destination terms. These sales are recognized upon delivery to the customer. eCommerce revenues, which accounted for 36% of total 2014 revenues, are recognized on the same terms as revenues through other channels. Fee revenues, which accounted for less than 1% of total 2014 revenues, are recognized after services are completed. Taxes collected from customers and remitted to governmental authorities are presented on a net basis and are not included in revenue. | ||
COST OF MERCHANDISE SOLD | ||
Cost of merchandise sold includes product and product-related costs, vendor consideration, freight-out and handling costs. The Company defines handling costs as those costs incurred to fulfill a shipped sales order. | ||
VENDOR CONSIDERATION | ||
The Company receives rebates and allowances from its vendors to promote their products. The Company utilizes numerous advertising programs to promote its vendors' products, including catalogs and other printed media, Internet, radio and other marketing programs. Most of these programs relate to multiple vendors, which makes supporting the specific, identifiable and incremental criteria difficult, and would require numerous assumptions and judgments. Based on the inexact nature of trying to track reimbursements to the advertising expenditure for each vendor, the Company treats most vendor advertising allowances as a reduction to Cost of merchandise sold rather than a reduction of operating (advertising) expenses. Rebates earned from vendors that are based on product purchases are capitalized into inventory as part of product purchase price. These rebates are credited to Cost of merchandise sold based on sales. Vendor rebates that are earned based on products sold are credited directly to Cost of merchandise sold. | ||
ADVERTISING | ||
Advertising costs are expensed in the year the related advertisement is first presented. Advertising expense was $169 million, $178 million and $173 million for 2014, 2013 and 2012, respectively. Most vendor-provided allowances are classified as an offset to Cost of merchandise sold. For additional information see VENDOR CONSIDERATION above. | ||
Catalog expense is amortized equally over the life of the catalog, beginning in the month of its distribution. Advertising costs for catalogs that have not been distributed by year-end are capitalized as Prepaid expenses. Amounts included in Prepaid expenses at December 31, 2014 and 2013, were $27 million and $36 million, respectively. | ||
WAREHOUSING, MARKETING AND ADMINISTRATIVE EXPENSES | ||
Included in this category are purchasing, branch operations, information services, and marketing and selling expenses, as well as other types of general and administrative costs. | ||
STOCK INCENTIVE PLANS | ||
The Company measures all share-based payments using fair-value-based methods and records compensation expense related to these payments over the vesting period. See Note 11 to the Consolidated Financial Statements. | ||
INCOME TAXES | ||
Income taxes are recognized during the year in which transactions enter into the determination of financial statement income, with deferred taxes being provided for temporary differences between financial and tax reporting. The Company recognizes in the financial statements a provision for tax uncertainties, resulting from application of complex tax regulations in multiple tax jurisdictions. See Note 14 to the Consolidated Financial Statements. | ||
OTHER COMPREHENSIVE EARNINGS (LOSSES) | ||
The Company's Other comprehensive earnings (losses) include foreign currency translation adjustments, changes in fair value of derivatives designated as hedges and unrecognized gains (losses) on postretirement and other employment-related benefit plans. See Note 13 to the Consolidated Financial Statements. | ||
CASH AND CASH EQUIVALENTS | ||
The Company considers investments in highly liquid debt instruments, purchased with an original maturity of 90 days or less, to be cash equivalents. | ||
CONCENTRATION OF CREDIT RISK | ||
The Company places temporary cash investments with institutions of high credit quality and, by policy, limits the amount of credit exposure to any one institution. | ||
The Company has a broad customer base representing many diverse industries doing business in all regions of the United States, Canada, Europe, Asia and Latin America. Consequently, no significant concentration of credit risk is considered to exist. | ||
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ||
The Company establishes reserves for customer accounts that are potentially uncollectible. The method used to estimate the allowances is based on several factors, including the age of the receivables and the historical ratio of actual write-offs to the age of the receivables. These analyses also take into consideration economic conditions that may have an impact on a specific industry, group of customers or a specific customer. | ||
INVENTORIES | ||
Inventories are valued at the lower of cost or market. Cost is determined primarily by the last-in, first-out (LIFO) method, which accounts for approximately 62% of total inventory. For the remaining inventory, cost is determined by the first-in, first-out (FIFO) method. | ||
PROPERTY, BUILDINGS AND EQUIPMENT | ||
Property, buildings and equipment are valued at cost. For financial statement purposes, depreciation and amortization are provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on the declining-balance and sum-of-the-years-digits depreciation methods. The Company's international businesses record depreciation expense primarily on a straight-line basis. The principal estimated useful lives for determining depreciation are as follows: | ||
Buildings, structures and improvements | 10 to 30 years | |
Furniture, fixtures, machinery and equipment | 3 to 10 years | |
Depreciation expense was $154 million, $142 million and $130 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||
Improvements to leased property are amortized over the initial terms of the respective leases or the estimated service lives of the improvements, whichever is shorter. | ||
The Company capitalized interest costs of $2 million in 2014 and $1 million in years 2013 and 2012. | ||
LONG-LIVED ASSETS | ||
The carrying value of long-lived assets is evaluated whenever events or changes in circumstances indicate that the carrying value of the asset may be impaired. An impairment loss is recognized when estimated undiscounted future cash flows resulting from use of the asset, including disposition, are less than the carrying value of the asset. Impairment is measured as the amount by which the carrying amount exceeds the fair value. | ||
The Company recognized impairment charges of $5 million, $0.4 million and $2 million in 2014, 2013 and 2012, respectively, included in Warehousing, marketing and administrative expenses, to reduce the carrying value of certain long-lived assets to their estimated fair value pursuant to impairment indicators for property currently held for sale, lease terminations, idle assets and branch closures. | ||
CAPITALIZED SOFTWARE | ||
The Company capitalizes certain costs related to the purchase and development of internal-use software. Amortization of capitalized software is on a straight-line basis over three or five years. Amortization begins when the software is available for its intended use. Amortization expense was $36 million, $23 million and $16 million for the years ended December 31, 2014, 2013 and 2012, respectively. Capitalized software was $148 million and $107 million at December 31, 2014 and 2013, respectively, and is included in Other assets and intangibles - net on the Consolidated Balance Sheets. During 2014, the Company wrote off $7 million in capitalized software costs due to a change in the implementation plan for an integrated IT system across North America. | ||
GOODWILL AND OTHER INTANGIBLES | ||
Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized, but rather tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value. | ||
The Company recognizes an acquired intangible apart from goodwill whenever the intangible arises from contractual or other legal rights, or whenever it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. Such intangibles are amortized over their estimated useful lives unless the estimated useful life is determined to be indefinite. Amortizable intangible assets are being amortized primarily over useful lives of three to 22 years. The straight-line method of amortization is used as it has been determined to approximate the use pattern of the assets. Impairment losses are recognized if the carrying amount of an intangible, subject to amortization, is not recoverable from expected future cash flows and its carrying amount exceeds its fair value. | ||
The Company also maintains intangible assets with indefinite lives, which are not amortized. These intangibles are tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of these assets is less than their carrying value. See Note 2 and Note 3 to the Consolidated Financial Statements. | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
The carrying amounts of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these financial instruments. The carrying value of long-term debt also approximates fair value due to the variable interest rates. The fair value of the Company's qualifying derivative instruments is recorded in the Consolidated Balance Sheets and is discussed in more detail in Note 8 to the Consolidated Financial Statements. | ||
DERIVATIVE INSTRUMENTS AND HEDGING | ||
The Company uses derivative financial instruments to manage 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. All derivative instruments are recognized as either assets or liabilities in the balance sheet at their fair value. Changes in the fair value of derivatives are recognized in net earnings or other comprehensive earnings (losses) depending on whether the derivative is designated as part of a qualifying hedging relationship. The ineffective portion of a qualifying hedging derivative and derivatives not designated as a hedge are recognized immediately in earnings. Instruments that do not qualify for hedge accounting are marked to market with the change recognized in current period earnings. See Note 8 and Note 13 to the Consolidated Financial Statements for additional information on the Company's derivative activities. | ||
INSURANCE RESERVES | ||
The Company purchases insurance for catastrophic exposures and those risks required to be insured by law. It also retains a significant portion of the risk of certain losses related to workers' compensation, general liability and property losses through the utilization of high deductibles and self-insured retentions. Reserves for these potential losses are based on an external analysis of the Company's historical claims results and other actuarial assumptions. | ||
WARRANTY RESERVES | ||
The Company generally warrants the products it sells against defects for one year. For a significant portion of warranty claims, the manufacturer of the product is responsible for expenses. For warranty expenses not covered by the manufacturer, the Company provides a reserve for future costs based primarily on historical experience. Warranty reserves were $4 million at December 31, 2014 and 2013. | ||
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. This ASU is not expected to have a material impact on the Company's consolidated financial statements. |
BUSINESS_ACQUISITIONS_AND_DIVE
BUSINESS ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements [Abstract] | |
BUSINESS ACQUISITIONS AND DIVESTITURES | BUSINESS ACQUISITIONS AND DIVESTITURES |
In November 2014, the Company announced plans to close the business in Brazil. Operations will cease during 2015. In 2014, the Company recorded shutdown costs of $29 million in the Consolidated Statement of Earnings, including $9 million reclassified from Accumulated other comprehensive earnings (losses) related to foreign currency translation losses from the consolidation of the business unit. See Note 13 to the Consolidated Financial Statements. | |
On September 2, 2014, the Company's Canadian subsidiary acquired WFS Enterprises, Inc. (WFS). With 2013 sales of approximately $87 million, WFS is a distributor of tools and supplies to industrial markets in Southern Ontario and select U.S. locations. The Company paid $33 million for the WFS acquisition, less cash acquired. Goodwill and intangibles recorded totaled approximately $16 million. The purchase price allocation has not been finalized and is subject to change as the Company obtains additional information during the measurement period related to the valuation of the acquired assets and liabilities. | |
During 2013, the Company acquired Safety Solutions, Inc. for $30 million, less cash acquired. Goodwill recorded totaled $8 million. Purchased identified intangible assets totaled $13 million. | |
During 2013, the Company acquired E&R Industrial Sales, Inc. for $116 million, less cash acquired. Goodwill recorded totaled $49 million. Purchased identified intangible assets totaled $51 million. | |
During 2013, the Company acquired the remaining noncontrolling interest in Grainger Colombia for $10 million. | |
During 2012, the Company acquired Techni-Tool, Inc., for $43 million, less cash acquired. Goodwill recorded totaled $10 million. Purchased identified intangible assets totaled $20 million. | |
Purchased identified intangible assets for the acquired businesses primarily consist of customer relationships, trademarks and trade names. See Note 3 to the Consolidated Financial Statements for estimated useful lives and amortization periods. | |
The results of these acquisitions are included in the Company's consolidated results from the respective dates of acquisition. Due to the immaterial nature of these transactions, both individually and in the aggregate, disclosures of amounts assigned to the acquired assets and assumed liabilities and pro forma results of operations were not considered necessary. |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Notes to Financial Statements [Abstract] | ||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||||||||
Goodwill is recognized as the excess cost of an acquired entity over the amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized, but rather tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value. | ||||||||||||||||||||||||
The changes in the carrying amount of goodwill by segment are as follows (in thousands of dollars): | ||||||||||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||||||||||
Balance at January 1, 2013 | $ | 170,439 | $ | 154,775 | $ | 218,456 | $ | 543,670 | ||||||||||||||||
Acquisitions | 35,820 | — | — | 35,820 | ||||||||||||||||||||
Purchase price adjustments | (12,900 | ) | — | 2,067 | (10,833 | ) | ||||||||||||||||||
Impairment | (12,861 | ) | — | (11,260 | ) | (24,121 | ) | |||||||||||||||||
Translation | — | (10,187 | ) | (8,882 | ) | (19,069 | ) | |||||||||||||||||
Balance at December 31, 2013 | 180,498 | 144,588 | 200,381 | 525,467 | ||||||||||||||||||||
Acquisitions | — | 9,620 | — | 9,620 | ||||||||||||||||||||
Purchase price adjustments | 21,522 | — | — | 21,522 | ||||||||||||||||||||
Impairment | — | — | (11,795 | ) | (11,795 | ) | ||||||||||||||||||
Translation | — | (13,019 | ) | (24,890 | ) | (37,909 | ) | |||||||||||||||||
Balance at December 31, 2014 | $ | 202,020 | $ | 141,189 | $ | 163,696 | $ | 506,905 | ||||||||||||||||
Business acquisitions result in the recording of goodwill and identified intangible assets which affect the amount of amortization expense and possible impairment write-downs that may occur in future periods. Grainger annually reviews goodwill and intangible assets with indefinite lives for impairment in the fourth quarter and when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Grainger tests for goodwill impairment at the reporting unit level and performs a qualitative assessment of factors such as a reporting unit's current performance and overall economic factors to determine if it is more likely than not that the goodwill might be impaired and whether it is necessary to perform the two-step quantitative goodwill impairment test. In the two-step test, Grainger compares the carrying value of assets of the reporting unit to its calculated fair value. If the carrying value of assets of the reporting unit exceeds its calculated fair value, the second step is performed, where the implied fair value of goodwill is compared to the carrying value of assets, to determine the amount of impairment. | ||||||||||||||||||||||||
The fair value of reporting units is calculated primarily using the discounted cash flow (DCF) method and incorporating value indicators from a market approach to evaluate the reasonableness of the resulting fair values. The DCF method incorporates various assumptions including the amount and timing of future expected cash flows, including revenues, gross margins, operating expenses, capital expenditures and working capital based on operational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period and reflects management’s best estimates for perpetual growth for the reporting units. Estimates of market-participant risk-adjusted weighted average cost of capital (WACC) are used as a basis for determining the discount rates to apply to the reporting units’ future expected cash flows and terminal value. | ||||||||||||||||||||||||
Grainger completed the annual impairment testing during the fourth quarter of 2014, and identified two reporting units for which it could not determine whether or not the fair value would be less than the carrying value. For one of these reporting units, Grainger Colombia, the two-step quantitative test indicated that the carrying value of assets exceeded the calculated fair value and step two impairment calculations were required. During the testing in the fourth quarter, Grainger considered management’s revised outlook on the business, which included lower projected sales growth and incremental investment necessary to execute on the strategy. Grainger incorporated this revised outlook into the two-step quantitative test, resulting in lowered projected sales growth, operating earnings and cash flows. Grainger recorded a full goodwill impairment charge of $12 million on the Grainger Colombia reporting unit. | ||||||||||||||||||||||||
Fabory, with $118 million of goodwill, had a calculated fair value which exceeded the carrying value of assets by 31%, and step two calculations were not required for this reporting unit. The risk of potential failure of step one of the impairment test for Fabory in future reporting periods is highly dependent upon key assumptions including the amount and timing of future expected cash flows, sales growth rates, gross margins, capital expenditures, discount rates and estimates of market-participant risk-adjusted WACC. These assumptions require considerable management judgment and are subject to uncertainty. | ||||||||||||||||||||||||
For Grainger’s remaining reporting units, the estimated fair values substantially exceeded the carrying values. | ||||||||||||||||||||||||
Intangible assets included in Other assets and intangibles - net in the Consolidated Balance Sheets were comprised of the following (in thousands of dollars): | ||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||||||||||||||
Amortized customer lists and relationships | $ | 316,994 | $ | 133,819 | $ | 183,175 | $ | 350,760 | $ | 134,889 | $ | 215,871 | ||||||||||||
Amortized trademarks, trade names and other | 27,235 | 10,820 | 16,415 | 38,670 | 23,919 | 14,751 | ||||||||||||||||||
Non-amortized trade names | 64,340 | — | 64,340 | 72,790 | — | 72,790 | ||||||||||||||||||
Total intangible assets | $ | 408,569 | $ | 144,639 | $ | 263,930 | $ | 462,220 | $ | 158,808 | $ | 303,412 | ||||||||||||
The decrease of $54 million in the gross carrying amount for total intangible assets was primarily driven by the write-off of fully amortized intangible assets and foreign currency translation. | ||||||||||||||||||||||||
The estimated useful lives for acquired intangibles are primarily as follows: | ||||||||||||||||||||||||
Customer lists and relationships | 6 to 22 years | |||||||||||||||||||||||
Amortized trademarks, trade names and other | 3 to 17 years | |||||||||||||||||||||||
Amortization expense recognized on intangible assets was $18 million, $15 million and $13 million for the years ended December 31, 2014, 2013 and 2012, respectively, and is included in Warehousing, marketing and administrative expenses on the Consolidated Statement of Earnings. | ||||||||||||||||||||||||
Estimated amortization expense for future periods is as follows (in thousands of dollars): | ||||||||||||||||||||||||
Year | Expense | |||||||||||||||||||||||
2015 | $ | 17,221 | ||||||||||||||||||||||
2016 | 16,268 | |||||||||||||||||||||||
2017 | 15,314 | |||||||||||||||||||||||
2018 | 14,928 | |||||||||||||||||||||||
2019 | 14,126 | |||||||||||||||||||||||
Thereafter | 121,733 |
ALLOWANCE_FOR_DOUBTFUL_ACCOUNT
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Notes to Financial Statements [Abstract] | ||||||||
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS | |||||||
The following table shows the activity in the allowance for doubtful accounts (in thousands of dollars): | ||||||||
For the Years Ended December 31, | ||||||||
2014 | 2013 | |||||||
Balance at beginning of period | $ | 20,096 | $ | 19,449 | ||||
Provision for uncollectible accounts | 12,945 | 8,855 | ||||||
Write-off of uncollectible accounts, net of recoveries | (9,628 | ) | (7,942 | ) | ||||
Business acquisitions, foreign currency and other | (1,292 | ) | (266 | ) | ||||
Balance at end of period | $ | 22,121 | $ | 20,096 | ||||
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements [Abstract] | |
INVENTORIES | INVENTORIES |
Inventories primarily consist of merchandise purchased for resale. Inventories would have been $389 million and $388 million higher than reported at December 31, 2014 and 2013, respectively, if the FIFO method of inventory accounting had been used for all Company inventories. Net earnings would have increased by $1 million, $8 million and $13 million for the years ended December 31, 2014, 2013 and 2012, respectively, using the FIFO method of accounting. Inventory values using the FIFO method of accounting approximate replacement cost. The Company provides reserves for excess and obsolete inventory. The reserve balance was $137 million and $134 million as of December 31, 2014 and 2013, respectively. |
SHORTTERM_DEBT
SHORT-TERM DEBT | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Notes to Financial Statements [Abstract] | ||||||||
SHORT-TERM DEBT | SHORT-TERM DEBT | |||||||
The following summarizes information concerning short-term debt (in thousands of dollars): | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Lines of Credit | ||||||||
Outstanding at December 31 | $ | 51,896 | $ | 66,857 | ||||
Maximum month-end balance during the year | $ | 64,384 | $ | 77,401 | ||||
Weighted average interest rate during the year | 4.16 | % | 4.96 | % | ||||
Weighted average interest rate at December 31 | 3.69 | % | 5.02 | % | ||||
Commercial Paper | ||||||||
Outstanding at December 31 | $ | 5,000 | $ | — | ||||
Maximum month-end balance during the year | $ | 54,997 | $ | — | ||||
Weighted average interest rate during the year | 0.16 | % | — | % | ||||
Weighted average interest rate at December 31 | 0.17 | % | — | % | ||||
Lines of Credit | ||||||||
Foreign subsidiaries utilize lines of credit to meet business growth and operating needs. The Company had $114 million and $109 million of uncommitted lines of credit denominated in foreign currencies at December 31, 2014 and 2013, respectively. | ||||||||
The Company had a committed line of credit of $600 million in 2014 and 2013 for which the Company paid a commitment fee of 0.06% as of December 31, 2014 and 2013. This line of credit supports the issuance of commercial paper. The current line is due to expire in August 2018. The Company issued commercial paper during 2014 for general working capital needs. | ||||||||
Letters of Credit | ||||||||
The Company had $29 million and $26 million of letters of credit at December 31, 2014 and 2013, respectively, primarily related to the Company's insurance program. Letters of credit were also issued to facilitate the purchase of products. These issued amounts were $3 million at December 31, 2014 and 2013. Letters of credit issued by the Company's international businesses were immaterial. |
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Notes to Financial Statements [Abstract] | ||||||||
LONG-TERM DEBT | LONG-TERM DEBT | |||||||
Long-term debt consisted of the following (in thousands of dollars): | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Bank term loan | $ | 126,770 | $ | 292,500 | ||||
Revolving line of credit | 146,325 | — | ||||||
Euro-denominated bank term loan | 133,067 | 158,067 | ||||||
Other | 21,778 | 25,375 | ||||||
Less current maturities | (23,404 | ) | (30,429 | ) | ||||
$ | 404,536 | $ | 445,513 | |||||
Bank Term Loan | ||||||||
The Company has a $300 million, unsecured bank term loan, which matures in November 2016. Quarterly principal payments began in August 2013. The change in the bank term loan balance between 2014 and 2013 was primarily due to a $150 million partial prepayment on September 30, 2014. | ||||||||
At the election of the Company, the term loan shall bear interest at the Base Rate plus the Applicable Margin or the LIBOR Rate plus the Applicable Margin as defined within the term loan agreement. At December 31, 2013, the Company had elected a one-month LIBOR Interest Period. The weighted average interest rate during the year was 1.16%. | ||||||||
Revolving Line of Credit | ||||||||
In September 2014, the Company's Canadian subsidiary entered into an unsecured revolving credit facility with a maximum availability of C$175 million. Pursuant to the credit agreement, there is a commitment fee of 0.065% and the facility matures on September 24, 2019. As of December 31, 2014, the Canadian subsidiary had drawn C$170 million under the facility for the purpose of repaying an intercompany loan and to fund general working capital needs. The interest rate on this outstanding amount was 1.91%. No principal payments are required on the credit facility until the maturity date. | ||||||||
Euro-Denominated Bank Term Loan | ||||||||
The Company has a €120 million, unsecured bank term loan that matures in August 2016. Semi-annual payments of €2.5 million began in February 2013. The weighted average interest rate paid during the year was 1.75%. The weighted average interest rate includes inputs from variable rates and an interest rate swap. See Note 8 to the Consolidated Financial Statements. | ||||||||
The scheduled aggregate principal payments related to long-term debt are due as follows (in thousands of dollars): | ||||||||
Year | Payment Amount | |||||||
2015 | $ | 23,404 | ||||||
2016 | 247,641 | |||||||
2017 | 2,853 | |||||||
2018 | 1,771 | |||||||
2019 | 148,055 | |||||||
Thereafter | 4,216 | |||||||
The Company's debt instruments include only standard affirmative and negative covenants for debt instruments of similar amounts and structure. The Company's debt instruments do not contain financial or performance covenants restrictive to the business of the Company, reflecting its strong financial position. The Company is in compliance with all debt covenants for the year ended December 31, 2014. |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS |
The fair values of the Company's derivative 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. | |
During the fourth quarter of 2011, the Company entered into a pay-fixed/receive floating interest rate swap with a notional value of €60 million maturing in August 2016 to partially hedge the future interest expense of the euro-denominated term loan entered into to fund a portion of the Fabory acquisition. The swap is accounted for as a cash flow hedge. The effective portion of the changes in fair value of the derivative is reported as a component of other comprehensive earnings (losses) and reclassified to net income when the hedged transaction affects earnings. The value of the interest-rate swap, included on the Company's balance sheet under Employment-related and other noncurrent liabilities, was $2 million and $3 million as of December 31, 2014 and 2013, respectively. | |
In September 2014, the Company settled all of the outstanding foreign currency forward contracts, which had a total notional value of C$160 million, and were designated as a hedge of an intercompany net investment in the Canadian subsidiary. An after-tax gain of $4 million is included in the foreign currency translation adjustment, a component of other comprehensive earnings. The cash flows from the settlement are reported under cash flows from investing activities in the consolidated statement of cash flows. As of December 31, 2013, the fair value of the foreign currency forward contracts were included on the Company's balance sheet under Prepaid expenses and other assets for $1 million. | |
Other foreign currency forward contracts entered into during the current and prior periods to hedge non-functional currency-denominated intercompany note receivables and forecasted U.S. dollar-denominated obligations by foreign subsidiaries of the Company were not material. | |
See Note 1 to the Consolidated Financial Statements for a description of the Company's Accounting Policy regarding derivative instruments and Note 13 to the Consolidated Financial Statements for additional information. |
EMPLOYEE_BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Notes to Financial Statements [Abstract] | ||||||||||||
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS | |||||||||||
The Company provides various retirement benefits to eligible employees, including contributions to defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and other benefits. Eligibility requirements and benefit levels vary depending on employee location. Various foreign benefit plans cover employees in accordance with local legal requirements. | ||||||||||||
Defined Contribution Plans | ||||||||||||
A majority of the Company's U.S. employees are covered by a noncontributory profit sharing plan. This plan provides for annual employer contributions based upon a formula related primarily to earnings before federal income taxes, limited to a percentage of the total eligible compensation paid to eligible employees. The annual contribution is limited to a minimum of 8% and a maximum of 18% of total eligible compensation paid to eligible employees. The profit sharing plan expense was $175 million, $173 million and $165 million for 2014, 2013 and 2012, respectively. | ||||||||||||
The Company sponsors additional defined contribution plans available to certain U.S. and foreign employees for which contributions are paid by the Company and participating employees. The expense associated with these defined contribution plans totaled $15 million for 2014, and $12 million for 2013 and 2012. | ||||||||||||
Defined Benefit Plans and Other Retirement Plans | ||||||||||||
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. | ||||||||||||
In certain countries, pension contributions are made to government-sponsored social security pension plans in accordance with local legal requirements. For these plans, the Company has no continuing obligations other than the payment of contributions. The Company also sponsors additional defined benefit plans to certain foreign employees. The cost of these programs is not significant to the Company. | ||||||||||||
Executive Death Benefit Plan | ||||||||||||
The Executive Death Benefit Plan provides one of three potential benefits: a supplemental income benefit (SIB), an executive death benefit (EDB) or a postretirement payment. The SIB provides income continuation at 50% of total compensation, payable for ten years to the beneficiary of a participant if that participant dies while employed by the Company. The EDB provides an after-tax lump sum payment of one-time final total compensation to the beneficiary of a participant who dies after retirement. In addition, pre-2008 participants may elect to receive a reduced postretirement payment instead of the EDB. Effective January 1, 2010, the plan is not available to new participants. | ||||||||||||
The net periodic benefits costs charged to operating expenses were $0.7 million in 2014, $0.8 million in 2013 and $1 million in 2012. The net gain recognized in AOCE was $1 million as of December 31, 2014 and 2013. The plan benefits are paid as they come due from the general assets of the Company. The plan benefit obligation was $16 million as of December 31, 2014, and $15 million as of December 31, 2013. | ||||||||||||
Postretirement Benefits | ||||||||||||
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. | ||||||||||||
During the fourth quarter of 2012, the Company implemented plan design changes effective January 1, 2013. Employees hired after January 1, 2013, are not eligible to receive retiree health benefits. Active participants in the plan as of December 31, 2012, will remain eligible for retiree health benefits with the employee contribution structure modified for certain employees based on retirement eligibility. The Company also implemented an Employer Group Waiver Plan (EGWP) and a secondary supplemental "wrap-around" plan for its Medicare eligible retiree medical plan participants and no longer applied for the Part D Retiree Drug Subsidy (RDS) effective January 1, 2013. The EGWP program does not alter the benefits expected to be provided to the plan participants and is expected to increase the level of Medicare subsidies that will offset plan costs. | ||||||||||||
The net periodic benefits costs charged to operating expenses, which were valued with a measurement date of January 1 for each year, consisted of the following components (in thousands of dollars): | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Service cost | $ | 9,005 | $ | 10,589 | $ | 20,058 | ||||||
Interest cost | 10,549 | 8,938 | 12,810 | |||||||||
Expected return on assets | (8,237 | ) | (7,076 | ) | (6,210 | ) | ||||||
Amortization of prior service credit | (7,254 | ) | (7,412 | ) | (495 | ) | ||||||
Amortization of transition asset | (143 | ) | (143 | ) | (143 | ) | ||||||
Amortization of unrecognized losses | 779 | 3,724 | 4,827 | |||||||||
Net periodic benefits costs | $ | 4,699 | $ | 8,620 | $ | 30,847 | ||||||
Reconciliations of the beginning and ending balances of the postretirement benefit obligation, which is calculated using a December 31 measurement date, the fair value of plan assets and the funded status of the benefit obligation follow (in thousands of dollars): | ||||||||||||
2014 | 2013 | |||||||||||
Benefit obligation at beginning of year | $ | 223,488 | $ | 246,087 | ||||||||
Service cost | 9,005 | 10,589 | ||||||||||
Interest cost | 10,549 | 8,938 | ||||||||||
Plan participants' contributions | 2,487 | 2,289 | ||||||||||
Actuarial losses (gains) | 42,300 | (38,476 | ) | |||||||||
Benefits paid | (5,609 | ) | (6,021 | ) | ||||||||
Prescription Drug Rebates | 702 | — | ||||||||||
Medicare Part D Subsidy received | (5 | ) | 82 | |||||||||
Benefit obligation at end of year | 282,917 | 223,488 | ||||||||||
Plan assets available for benefits at beginning of year | 144,514 | 117,939 | ||||||||||
Actual returns on plan assets | 13,730 | 25,278 | ||||||||||
Employer's contributions | 191 | 5,029 | ||||||||||
Plan participants' contributions | 2,487 | 2,289 | ||||||||||
Prescription Drug Rebates | 702 | — | ||||||||||
Benefits paid | (5,609 | ) | (6,021 | ) | ||||||||
Plan assets available for benefits at end of year | 156,015 | 144,514 | ||||||||||
Noncurrent postretirement benefit obligation | $ | 126,902 | $ | 78,974 | ||||||||
The amounts recognized in AOCE consisted of the following components (in thousands of dollars): | ||||||||||||
As of December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Prior service credit | $ | 67,303 | $ | 74,556 | ||||||||
Transition asset | — | 143 | ||||||||||
Unrecognized losses | (54,034 | ) | (18,006 | ) | ||||||||
Deferred tax (liability) | (5,121 | ) | (21,806 | ) | ||||||||
Net gains | $ | 8,148 | $ | 34,887 | ||||||||
The $36 million increase in unrecognized losses was primarily driven by a decrease in the discount rate and a change in the mortality improvement tables used. | ||||||||||||
The components of AOCE related to the postretirement benefit costs that will be amortized into net periodic postretirement benefit costs in 2015 are estimated as follows (in thousands of dollars): | ||||||||||||
2015 | ||||||||||||
Amortization of prior service credit | $ | (6,801 | ) | |||||||||
Amortization of unrecognized losses | 3,442 | |||||||||||
Estimated amount to be amortized from AOCE into net periodic postretirement benefit costs | $ | (3,359 | ) | |||||||||
The Company has elected to amortize the amount of net unrecognized gains (losses) over a period equal to the average remaining service period for active plan participants expected to retire and receive benefits of approximately 15.7 years for 2014. | ||||||||||||
The benefit obligation was determined by applying the terms of the plan and actuarial models. These models include various actuarial assumptions, including discount rates, assumed rates of return on plan assets, healthcare cost trend rate and cost-sharing between the Company and the retirees. The Company evaluates its actuarial assumptions on an annual basis and considers changes in these long-term factors based upon market conditions and historical experience. | ||||||||||||
The following assumptions were used to determine net periodic benefit costs at January 1: | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Discount rate | 4.9 | % | 4 | % | 4.5 | % | ||||||
Expected long-term rate of return on plan assets, net of tax | 5.7 | % | 6 | % | 6 | % | ||||||
Initial healthcare cost trend rate | 7.5 | % | 8 | % | 8.5 | % | ||||||
Ultimate healthcare cost trend rate | 4.5 | % | 5 | % | 5 | % | ||||||
Year ultimate healthcare cost trend rate reached | 2026 | 2019 | 2019 | |||||||||
The following assumptions were used to determine benefit obligations at December 31: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Discount rate | 3.89 | % | 4.9 | % | 4 | % | ||||||
Expected long-term rate of return on plan assets, net of tax | 6.65 | % | 5.7 | % | 6 | % | ||||||
Initial healthcare cost trend rate | 7.25 | % | 7.5 | % | 8 | % | ||||||
Ultimate healthcare cost trend rate | 4.5 | % | 4.5 | % | 5 | % | ||||||
Year ultimate healthcare cost trend rate reached | 2026 | 2026 | 2019 | |||||||||
The discount rate assumptions reflect the rates available on high-quality fixed income debt instruments as of December 31, the measurement date of each year. These rates have been selected due to their similarity to the duration of the projected cash flows of the postretirement healthcare benefit plan. As of December 31, 2014, the Company decreased the discount rate from 4.90% to 3.89% to reflect the decrease in the market interest rates, which contributed to the increase in the unrealized actuarial loss at December 31, 2014. As of December 31, 2014, the Company changed the mortality improvement table used to project mortality rates into the future from Mortality Table RP-2000 with Mortality Improvement Scale BB to Mortality Table RP-2014 with Mortality Improvement Scale MP 2014, which was published by the Society of Actuaries in October 2014, and reflects longer life expectancies than under the previous table and scale. The Company reviews external data and its own historical trends for healthcare costs to determine the healthcare cost trend rates. As of December 31, 2013, Grainger changed the duration and rate of the healthcare trend decline to 25 basis points a year until reaching the ultimate trend rate of 4.50%. Prior to this change, the healthcare trend assumed a 50 basis points decline. As of December 31, 2014, the healthcare cost trend rate was 7.25%, declining 25 basis points a year until reaching the ultimate trend rate. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans. A 1 percentage point change in assumed healthcare cost trend rates would have the following effects on 2014 results (in thousands of dollars): | ||||||||||||
1 Percentage Point | ||||||||||||
Increase | (Decrease) | |||||||||||
Effect on total service and interest cost | $ | 1,978 | $ | (1,613 | ) | |||||||
Effect on postretirement benefit obligation | 36,470 | (29,404 | ) | |||||||||
The Company has established a Group Benefit Trust (Trust) to fund the plan obligations and process benefit payments. All assets of the Trust are invested in equity funds designed to track to either the Standard & Poor's 500 Index (S&P 500) or the Total International Composite Index. The Total International Composite Index tracks non-U.S. stocks within developed and emerging market economies. This investment strategy reflects the long-term nature of the plan obligation and seeks to take advantage of the earnings potential of equity securities in the global markets and intends to reach a balanced allocation between U.S. and non-U.S. equities. The plan's assets are stated at fair value which represents the net asset value of shares held by the plan in the registered investment companies at the quoted market prices (Level 1 input) as of December 31 (in thousands of dollars): | ||||||||||||
2014 | 2013 | |||||||||||
Registered investment companies | ||||||||||||
Fidelity Spartan U.S. Equity Index Fund | 73,071 | 67,160 | ||||||||||
Vanguard 500 Index Fund | 77,202 | 67,931 | ||||||||||
Vanguard Total International Stock | 23,994 | 25,034 | ||||||||||
Total Assets | $ | 174,267 | $ | 160,125 | ||||||||
The Company uses the long-term historical return on the plan assets and the historical performance of the S&P 500 and the Total International Composite Index to develop its expected return on plan assets. In 2013, the Company decreased the after-tax expected long-term rates of return on plan assets from 6.00% to 5.70% based on the historical average of long-term rates of return. In 2014, a change in the estimated tax rate resulted in an increase in the after-tax expected long-term rate of return on plan assets from 5.70% to 6.65%. This change was due to the nature of the taxable income earned on the investments in the Trust and the applicable tax rates. The required use of an expected long-term rate of return on plan assets may result in recognition of income that is greater or less than the actual return on plan assets in any given year. Over time, however, the expected long-term returns are designed to approximate the actual long-term returns and, therefore, result in a pattern of income recognition that more closely matches the pattern of the services provided by the employees. | ||||||||||||
The Company's investment policies include periodic reviews by management and trustees at least annually concerning: (1) the allocation of assets among various asset classes (e.g., domestic stocks, international stocks, short-term bonds, long-term bonds, etc.); (2) the investment performance of the assets, including performance comparisons with appropriate benchmarks; (3) investment guidelines and other matters of investment policy; and (4) the hiring, dismissal or retention of investment managers. | ||||||||||||
The funding of the Trust is an estimated amount that 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. | ||||||||||||
The Company forecasts the following benefit payments (which include a projection for expected future employee service) for the next ten years (in thousands of dollars): | ||||||||||||
Year | Estimated Gross Benefit Payments | |||||||||||
2015 | $ | 5,490 | ||||||||||
2016 | 6,393 | |||||||||||
2017 | 7,394 | |||||||||||
2018 | 8,556 | |||||||||||
2019 | 9,791 | |||||||||||
2020-2024 | 69,854 | |||||||||||
LEASES
LEASES | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes to Financial Statements [Abstract] | |||||
LEASES | LEASES | ||||
The Company leases certain land, buildings and equipment under noncancellable operating leases that expire at various dates through 2036. Capital leases as of December 31, 2014, are not considered material. Many of the building leases obligate the Company to pay real estate taxes, insurance and certain maintenance costs, and contain multiple renewal provisions, exercisable at the Company's option. Leases that contain predetermined fixed escalations of the minimum rentals are recognized in rental expense on a straight-line basis over the lease term. Cash or rent abatements received upon entering into certain operating leases are also recognized on a straight-line basis over the lease term. | |||||
At December 31, 2014, the approximate future minimum lease payments for all operating leases were as follows (in thousands of dollars): | |||||
Year | Future Minimum Lease Payments | ||||
2015 | $ | 65,901 | |||
2016 | 49,898 | ||||
2017 | 30,804 | ||||
2018 | 19,500 | ||||
2019 | 12,237 | ||||
Thereafter | 7,813 | ||||
Total minimum payments required | 186,153 | ||||
Less amounts representing sublease income | (4,310 | ) | |||
$ | 181,843 | ||||
Rent expense, including items under lease and items rented on a month-to-month basis, was $77 million for 2014 and $68 million for 2013 and 2012. These amounts are net of sublease income of $2 million for 2014 and $1 million for 2013 and 2012. |
STOCK_INCENTIVE_PLANS
STOCK INCENTIVE PLANS | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Notes to Financial Statements [Abstract] | |||||||||||||||||||||||||||
STOCK INCENTIVE PLANS | STOCK INCENTIVE PLANS | ||||||||||||||||||||||||||
The Company maintains stock incentive plans under which the Company may grant a variety of incentive awards to employees and directors. Non-qualified stock options, performance shares, restricted stock units and deferred stock units have been granted and are outstanding under these plans. As of December 31, 2014, there were 1.5 million shares available for grant under the plans. | |||||||||||||||||||||||||||
Pretax stock-based compensation expense was $45 million, $52 million and $53 million in 2014, 2013 and 2012, respectively. Related income tax benefits recognized in earnings were $15 million in 2014, $17 million in 2013 and $18 million in 2012. | |||||||||||||||||||||||||||
Options | |||||||||||||||||||||||||||
In 2014, 2013 and 2012, the Company issued stock option grants to employees as part of their incentive compensation. Option awards are granted with an exercise price equal to the closing market price of the Company's stock on the last trading day preceding the date of grant. The options generally vest over three years, although accelerated vesting is provided in certain circumstances. Awards generally expire 10 years from the grant date. Transactions involving stock options are summarized as follows: | |||||||||||||||||||||||||||
Shares Subject to Option | Weighted Average Price Per Share | Options Exercisable | |||||||||||||||||||||||||
Outstanding at January 1, 2012 | 3,960,675 | $ | 91.53 | 1,808,667 | |||||||||||||||||||||||
Granted | 404,111 | $ | 203.96 | ||||||||||||||||||||||||
Exercised | (972,015 | ) | $ | 74.14 | |||||||||||||||||||||||
Canceled or expired | (34,055 | ) | $ | 105.36 | |||||||||||||||||||||||
Outstanding at December 31, 2012 | 3,358,716 | $ | 109.95 | 1,629,468 | |||||||||||||||||||||||
Granted | 348,054 | $ | 245.95 | ||||||||||||||||||||||||
Exercised | (805,235 | ) | $ | 85.75 | |||||||||||||||||||||||
Canceled or expired | (51,080 | ) | $ | 150.15 | |||||||||||||||||||||||
Outstanding at December 31, 2013 | 2,850,455 | $ | 132.67 | 1,652,417 | |||||||||||||||||||||||
Granted | 257,693 | $ | 248.21 | ||||||||||||||||||||||||
Exercised | (479,452 | ) | $ | 100.33 | |||||||||||||||||||||||
Canceled or expired | (45,892 | ) | $ | 199.8 | |||||||||||||||||||||||
Outstanding at December 31, 2014 | 2,582,804 | $ | 149.01 | 1,647,903 | |||||||||||||||||||||||
At December 31, 2014, there was $11 million of total unrecognized compensation expense related to nonvested option awards, which the Company expects to recognize over a weighted average period of 1.8 years. | |||||||||||||||||||||||||||
The following table summarizes information about stock options exercised (in thousands of dollars): | |||||||||||||||||||||||||||
For the years ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Fair value of options exercised | $ | 11,167 | $ | 16,407 | $ | 18,120 | |||||||||||||||||||||
Total intrinsic value of options exercised | 71,924 | 124,752 | 126,138 | ||||||||||||||||||||||||
Fair value of options vested | 16,115 | 20,219 | 15,551 | ||||||||||||||||||||||||
Settlements of options exercised | 47,974 | 69,049 | 72,066 | ||||||||||||||||||||||||
Information about stock options outstanding and exercisable as of December 31, 2014, is as follows: | |||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||
Weighted Average | Weighted Average | ||||||||||||||||||||||||||
Range of | Number | Remaining | Exercise | Intrinsic | Number | Remaining | Exercise | Intrinsic | |||||||||||||||||||
Exercise | Contractual | Price | Value | Contractual | Price | Value | |||||||||||||||||||||
Prices | Life | (000's) | Life | (000's) | |||||||||||||||||||||||
$52.29 - $78.86 | 308,141 | 1.55 years | $ | 70.19 | $ | 56,914 | 308,141 | 1.55 years | $ | 70.19 | $ | 56,914 | |||||||||||||||
$81.49 - $85.82 | 562,045 | 3.64 years | $ | 83.27 | 96,457 | 562,045 | 3.64 years | $ | 83.27 | 96,457 | |||||||||||||||||
$102.26 - $124.93 | 392,796 | 5.29 years | $ | 107.31 | 57,970 | 392,796 | 5.29 years | $ | 107.31 | 57,970 | |||||||||||||||||
$149.02 - $204.24 | 734,000 | 6.82 years | $ | 176.61 | 57,458 | 377,252 | 6.36 years | $ | 150.73 | 39,295 | |||||||||||||||||
$235.15 - $262.14 | 585,822 | 8.75 years | $ | 246.93 | 4,666 | 7,669 | 8.49 years | $ | 246.28 | 66 | |||||||||||||||||
2,582,804 | 5.71 years | $ | 149.01 | $ | 273,465 | 1,647,903 | 4.29 years | $ | 102.76 | $ | 250,702 | ||||||||||||||||
The Company uses a binomial lattice option pricing model for the valuation of stock options. The weighted average fair value of options granted in 2014, 2013 and 2012 was $53.43, $51.30 and $43.98, respectively. The fair value of each option granted in 2014, 2013 and 2012 used the following assumptions: | |||||||||||||||||||||||||||
For the years ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Risk-free interest rate | 2.00% | 0.90% | 1.10% | ||||||||||||||||||||||||
Expected life | 6 years | 6 years | 6 years | ||||||||||||||||||||||||
Expected volatility | 25.00% | 25.50% | 25.90% | ||||||||||||||||||||||||
Expected dividend yield | 1.70% | 1.50% | 1.60% | ||||||||||||||||||||||||
The risk-free interest rate is selected based on yields from U.S. Treasury zero-coupon issues with a remaining term approximately equal to the expected term of the options being valued. The expected life selected for options granted during each year presented represents the period of time that the options are expected to be outstanding based on historical data of option holder exercise and termination behavior. Expected volatility is based upon implied and historical volatility of the Company's closing stock price over a period equal to the expected life of each option grant. Historical Company information is also the primary basis for selection of expected dividend yield assumptions. | |||||||||||||||||||||||||||
Performance Shares | |||||||||||||||||||||||||||
The Company awards performance-based shares to certain executives. Receipt of Company stock is contingent upon the Company meeting sales growth and return on invested capital (ROIC) performance goals. Each participant is granted a base number of shares. At the end of the performance period, the number of shares granted will be increased, decreased or remain the same based upon actual Company-wide sales versus target sales. The shares, as determined at the end of the performance period, are issued at the end of the third year if the Company's average target ROIC is achieved during the vesting period. | |||||||||||||||||||||||||||
Performance share value is based upon closing market prices on the last trading day preceding the date of award and is charged to earnings on a ratable basis over the three-year period based on the number of shares expected to vest. Holders of performance share awards are not entitled to receive cash payments equivalent to cash dividends. If the performance shares vest, they will be settled by the Company's issuance of common stock in exchange for the performance shares on a one-for-one basis. The following table summarizes the transactions involving performance-based share awards: | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Shares | Weighted Average Price Per Share | Shares | Weighted Average Price Per Share | Shares | Weighted Average Price Per Share | ||||||||||||||||||||||
Beginning nonvested | 57,533 | $ | 185.02 | 117,979 | $ | 141.86 | 192,740 | $ | 109.16 | ||||||||||||||||||
shares outstanding | |||||||||||||||||||||||||||
Issued | 32,194 | $ | 242.65 | 31,553 | $ | 191.36 | 28,639 | $ | 177.75 | ||||||||||||||||||
Canceled | (6,835 | ) | $ | 190.9 | (7,659 | ) | $ | 148.25 | (1,666 | ) | $ | 114.41 | |||||||||||||||
Vested | (25,656 | ) | $ | 177.75 | (84,340 | ) | $ | 130.35 | (101,734 | ) | $ | 90.47 | |||||||||||||||
Ending nonvested shares | 57,236 | $ | 220 | 57,533 | $ | 185.02 | 117,979 | $ | 141.86 | ||||||||||||||||||
outstanding | |||||||||||||||||||||||||||
At December 31, 2014, there was $7 million of total unrecognized compensation expense related to performance-based share awards that the Company expects to recognize over a weighted average period of 1.8 years. | |||||||||||||||||||||||||||
Restricted Stock Units (RSUs) | |||||||||||||||||||||||||||
RSUs granted vest over periods from three to seven years from issuance, although accelerated vesting is provided in certain instances. Holders of RSUs are entitled to receive cash payments equivalent to cash dividends and other distributions paid with respect to common stock. RSUs are settled by the issuance of the Company's common stock on a one-for-one basis. Compensation expense related to RSUs is based upon the closing market price on the last trading day preceding the date of award and is charged to earnings on a straight-line basis over the vesting period. The following table summarizes RSU activity: | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | ||||||||||||||||||||||
Average Price Per Share | Average Price Per Share | Average Price Per Share | |||||||||||||||||||||||||
Beginning nonvested units | 739,717 | $ | 154.09 | 978,888 | $ | 118.6 | 1,119,488 | $ | 100.76 | ||||||||||||||||||
Issued | 103,427 | $ | 248.12 | 139,529 | $ | 248.28 | 152,995 | $ | 204.26 | ||||||||||||||||||
Canceled | (51,410 | ) | $ | 170.98 | (54,533 | ) | $ | 141.48 | (37,972 | ) | $ | 123.01 | |||||||||||||||
Vested | (231,383 | ) | $ | 123.82 | (324,167 | ) | $ | 89.62 | (255,623 | ) | $ | 88.36 | |||||||||||||||
Ending nonvested units | 560,351 | $ | 182.4 | 739,717 | $ | 154.09 | 978,888 | $ | 118.6 | ||||||||||||||||||
Fair value of shares vested (in millions) | $29 | $29 | $23 | ||||||||||||||||||||||||
At December 31, 2014, there was $48 million of total unrecognized compensation expense related to nonvested RSUs that the Company expects to recognize over a weighted average period of 3.0 years. | |||||||||||||||||||||||||||
Director Stock Awards | |||||||||||||||||||||||||||
The Company's Board of Directors receives both cash and deferred stock units (DSUs) for its services. A DSU is the economic equivalent of a share of common stock. The directors were each awarded $125,000 of DSUs in 2014 and 2013 and $115,000 in 2012. The number of units granted was based on the 200-day average stock price as of January 31 of the grant year. Compensation expense related to the DSUs is based upon the closing market price on the last trading day preceding the date of award. DSUs vest immediately at grant and are entitled to receive dividends and other distributions with respect to common stock, which are deferred as stock units, based on the market value of the stock at relevant times. Directors can also elect to defer their cash fees in the form of DSUs. Settlement of DSUs is required to be deferred until after termination of service as a director. The accumulated value of DSUs is recorded in Additional contributed capital as of December 31, 2014, 2013 and 2012. During 2012, the Board approved a change in the settlement procedure to eliminate the cash settlement option. The following table summarizes DSU activity (dollars in thousands): | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Units | Dollars | Units | Dollars | Units | Dollars | ||||||||||||||||||||||
Beginning balance | 158,868 | $ | 33,063 | 151,775 | $ | 30,952 | 142,797 | $ | 26,730 | ||||||||||||||||||
Dividends | 2,602 | 653 | 2,259 | 559 | 2,273 | 454 | |||||||||||||||||||||
Deferred fees | 5,866 | 1,453 | 7,337 | 2,059 | 9,170 | 1,871 | |||||||||||||||||||||
Retirement distribution | (7,666 | ) | (1,695 | ) | (2,503 | ) | (507 | ) | (2,465 | ) | (461 | ) | |||||||||||||||
Unit appreciation | — | — | — | — | — | 2,358 | |||||||||||||||||||||
Ending balance | 159,670 | $ | 33,474 | 158,868 | $ | 33,063 | 151,775 | $ | 30,952 | ||||||||||||||||||
CAPITAL_STOCK
CAPITAL STOCK | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Notes to Financial Statements [Abstract] | ||||||||||
CAPITAL STOCK | CAPITAL STOCK | |||||||||
The Company had no shares of preferred stock outstanding as of December 31, 2014 and 2013. The activity related to outstanding common stock and common stock held in treasury was as follows: | ||||||||||
2014 | 2013 | |||||||||
Outstanding Common Stock | Treasury Stock | Outstanding Common Stock | Treasury Stock | |||||||
Balance at beginning of period | 68,853,938 | 40,805,281 | 69,478,495 | 40,180,724 | ||||||
Exercise of stock options, net of 1,905, and 5,134 shares swapped in stock-for-stock exchange, respectively | 477,547 | (477,547 | ) | 800,101 | (800,101 | ) | ||||
Settlement of restricted stock units, net of 104,552 and 135,341 shares retained, respectively | 175,549 | (175,549 | ) | 232,483 | (232,483 | ) | ||||
Settlement of performance share units, net of 33,003 and 39,874 shares retained, respectively | 51,337 | (51,337 | ) | 61,860 | (61,860 | ) | ||||
Purchase of treasury shares | (2,126,330 | ) | 2,126,330 | (1,719,001 | ) | 1,719,001 | ||||
Balance at end of period | 67,432,041 | 42,227,178 | 68,853,938 | 40,805,281 | ||||||
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE EARNINGS | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Notes to Financial Statements [Abstract] | ||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE EARNINGS | ACCUMULATED OTHER COMPREHENSIVE EARNINGS | |||||||||||||||||||||
The following table sets forth the components of Accumulated other comprehensive earnings (in thousands of dollars): | ||||||||||||||||||||||
W.W. Grainger, Inc. Accumulated Other Comprehensive Earnings | ||||||||||||||||||||||
Foreign Currency Translation | Interest Rate Swap | Postretirement Benefit Plan | Other Employment-related Benefit Plans | Total | Foreign Currency Translation Attributable to Noncontrolling Interests | AOCE Attributable to W.W. Grainger, Inc. | ||||||||||||||||
Balance at January 1, 2012, net of tax | $ | 60,104 | $ | (1,616 | ) | $ | (73,396 | ) | $ | (2,448 | ) | $ | (17,356 | ) | $ | 11,382 | $ | (28,738 | ) | |||
Other comprehensive earnings (loss), net of tax | 5,414 | (2,545 | ) | 75,625 | (5,044 | ) | 73,450 | (8,866 | ) | 82,316 | ||||||||||||
Balance at December 31, 2012, net of tax | $ | 65,518 | $ | (4,161 | ) | $ | 2,229 | $ | (7,492 | ) | $ | 56,094 | $ | 2,516 | $ | 53,578 | ||||||
Other comprehensive earnings (loss) before reclassifications, net of tax | (72,815 | ) | 1,190 | 35,045 | (1,319 | ) | (37,899 | ) | (15,622 | ) | (22,277 | ) | ||||||||||
Amounts reclassified to Warehousing, marketing and administrative expenses | — | — | (3,831 | ) | — | (3,831 | ) | — | (3,831 | ) | ||||||||||||
Amounts reclassified to Income Taxes | — | — | 1,444 | — | 1,444 | — | 1,444 | |||||||||||||||
Net current period activity | $ | (72,815 | ) | $ | 1,190 | $ | 32,658 | $ | (1,319 | ) | $ | (40,286 | ) | $ | (15,622 | ) | $ | (24,664 | ) | |||
Balance at December 31, 2013, net of tax | $ | (7,297 | ) | $ | (2,971 | ) | $ | 34,887 | $ | (8,811 | ) | $ | 15,808 | $ | (13,106 | ) | $ | 28,914 | ||||
Other comprehensive earnings (loss) before reclassifications, net of tax | (124,065 | ) | 786 | (22,667 | ) | (1,462 | ) | (147,408 | ) | (9,880 | ) | (137,528 | ) | |||||||||
Amounts reclassified to Warehousing, marketing and administrative expenses | 9,042 | — | (6,617 | ) | 9,295 | 11,720 | — | 11,720 | ||||||||||||||
Amounts reclassified to Income Taxes | — | — | 2,545 | (2,324 | ) | 221 | — | 221 | ||||||||||||||
Net current period activity | $ | (115,023 | ) | $ | 786 | $ | (26,739 | ) | $ | 5,509 | $ | (135,467 | ) | $ | (9,880 | ) | $ | (125,587 | ) | |||
Balance at December 31, 2014, net of tax | $ | (122,320 | ) | $ | (2,185 | ) | $ | 8,148 | $ | (3,302 | ) | $ | (119,659 | ) | $ | (22,986 | ) | $ | (96,673 | ) | ||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Notes to Financial Statements [Abstract] | ||||||||||||
INCOME TAXES | INCOME TAXES | |||||||||||
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. | ||||||||||||
Income tax expense (benefit) consisted of the following (in thousands of dollars): | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current provision: | ||||||||||||
Federal | $ | 437,648 | $ | 398,593 | $ | 324,848 | ||||||
State | 47,199 | 42,526 | 40,508 | |||||||||
Foreign | 43,088 | 52,277 | 53,564 | |||||||||
Total current | 527,935 | 493,396 | 418,920 | |||||||||
Deferred tax (benefit) provision | (5,845 | ) | (13,546 | ) | 20 | |||||||
Total provision | $ | 522,090 | $ | 479,850 | $ | 418,940 | ||||||
Earnings before income taxes by geographical area consisted of the following (in thousands of dollars): | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
United States | $ | 1,299,523 | $ | 1,167,558 | $ | 982,220 | ||||||
Foreign | 34,863 | 120,041 | 135,569 | |||||||||
$ | 1,334,386 | $ | 1,287,599 | $ | 1,117,789 | |||||||
The income tax effects of temporary differences that gave rise to the net deferred tax asset were (in thousands of dollars): | ||||||||||||
As of December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets: | ||||||||||||
Inventory | $ | 30,471 | $ | 35,381 | ||||||||
Accrued expenses | 44,362 | 38,368 | ||||||||||
Accrued employment-related benefits | 139,392 | 123,555 | ||||||||||
Foreign operating loss carryforwards | 61,219 | 70,204 | ||||||||||
Other | 12,748 | 30,862 | ||||||||||
Deferred tax assets | 288,192 | 298,370 | ||||||||||
Less valuation allowance | (56,876 | ) | (62,825 | ) | ||||||||
Deferred tax assets, net of valuation allowance | $ | 231,316 | $ | 235,545 | ||||||||
Deferred tax liabilities: | ||||||||||||
Property, buildings and equipment | (48,044 | ) | (38,210 | ) | ||||||||
Intangibles | (101,958 | ) | (119,923 | ) | ||||||||
Software | (21,975 | ) | (17,492 | ) | ||||||||
Prepaids | (16,673 | ) | (18,945 | ) | ||||||||
Other | (12,196 | ) | (17,378 | ) | ||||||||
Deferred tax liabilities | (200,846 | ) | (211,948 | ) | ||||||||
Net deferred tax asset | $ | 30,470 | $ | 23,597 | ||||||||
The net deferred tax asset is classified as follows: | ||||||||||||
Current assets | $ | 61,387 | $ | 75,819 | ||||||||
Noncurrent assets | 16,718 | 16,209 | ||||||||||
Noncurrent liabilities (foreign) | (47,635 | ) | (68,431 | ) | ||||||||
Net deferred tax asset | $ | 30,470 | $ | 23,597 | ||||||||
At December 31, 2014, the Company had $236 million of operating loss carryforwards related primarily to foreign operations. Some of the operating loss carryforwards may expire at various dates through 2024. The Company has recorded a valuation allowance, which represents a provision for uncertainty as to the realization of the tax benefits of these carryforwards. In addition, the Company recorded a valuation allowance to reflect the estimated amount of deferred tax assets that may not be realized. During 2014, the Company's valuation allowance decreased by $5.9 million primarily due to the write-off of the operating loss carryforwards and corresponding valuation allowance in Brazil and foreign currency translation, offset by an increase in foreign net operating losses. | ||||||||||||
A reconciliation of income tax expense with federal income taxes at the statutory rate follows (in thousands of dollars): | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal income tax at the 35% statutory rate | $ | 467,035 | $ | 450,660 | $ | 391,226 | ||||||
State income taxes, net of federal income tax benefit | 31,263 | 27,430 | 26,099 | |||||||||
Other - net | 23,792 | 1,760 | 1,615 | |||||||||
Income tax expense | $ | 522,090 | $ | 479,850 | $ | 418,940 | ||||||
Effective tax rate | 39.1 | % | 37.3 | % | 37.5 | % | ||||||
In 2014, Other-net increased primarily due to the impact of closure costs for Brazil, foreign tax rates differential and foreign losses for which valuation allowances were provided. | ||||||||||||
Undistributed earnings of foreign subsidiaries at December 31, 2014, amounted to $464 million. No provision for deferred U.S. income taxes has been made for these subsidiaries because the Company intends to permanently reinvest such earnings in its foreign operations. If at some future date these earnings cease to be permanently invested, the Company may be subject to U.S. income taxes, foreign withholding, and other taxes on such amounts, which cannot be reasonably estimated at this time. | ||||||||||||
The changes in the liability for tax uncertainties, excluding interest, are as follows (in thousands of dollars): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Balance at beginning of year | $ | 40,317 | $ | 40,937 | $ | 22,760 | ||||||
Additions for tax positions related to the current year | 11,545 | 8,396 | 11,369 | |||||||||
Additions for tax positions of prior years | 5,318 | 2,308 | 8,977 | |||||||||
Reductions for tax positions of prior years | (4,109 | ) | (7,242 | ) | (1,447 | ) | ||||||
Reductions due to statute lapse | (1,271 | ) | (18 | ) | (737 | ) | ||||||
Settlements, audit payments, refunds - net | (6,674 | ) | (4,064 | ) | 15 | |||||||
Balance at end of year | $ | 45,126 | $ | 40,317 | $ | 40,937 | ||||||
The Company classifies the liability for tax uncertainties in Deferred income taxes and tax uncertainties. Included in this amount are $9 million and $8 million at December 31, 2014 and 2013, respectively, of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Any changes in the timing of deductibility of these items would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authorities to an earlier period. The reduction for tax positions of prior years in 2014 related primarily to law changes, conclusion of audits and audit settlements. | ||||||||||||
The Company regularly undergoes examination of its federal income tax returns by the Internal Revenue Service (IRS). The Company's federal tax returns for 2009, 2010, 2011 and 2012 are currently under audit by the IRS, and the tax years 2013 through 2014 are open. The Company is also subject to audit by state, local and foreign taxing authorities. Tax years 2002 - 2013 remain subject to state and local audits and 2007 - 2014 remain subject to foreign audits. The estimated amount of liability associated with the Company's uncertain tax positions may change within the next 12 months due to the pending audit activity, expiring statutes or tax payments. A reasonable estimate of such change cannot be made. | ||||||||||||
The Company recognizes interest expense in the provision for income taxes. During 2014, 2013 and 2012, the Company recognized an expense of $2 million, $2 million and $1 million, respectively. As of December 31, 2014, 2013 and 2012, the Company accrued approximately $4 million, $4 million and $2 million for interest, respectively. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Notes to Financial Statements [Abstract] | ||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE | |||||||||||
The Company’s unvested Restricted Stock Units and Directors' Deferred Stock Units that contain nonforfeitable rights to dividends meet the criteria of a participating security. Under the two-class method, earnings are allocated between common stock and participating securities. The presentation of basic and diluted earnings per share is required only for each class of common stock and not for participating securities. As such, the Company presents basic and diluted earnings per share for its one class of common stock. | ||||||||||||
The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. The Company’s reported net earnings is reduced by the amount allocated to participating securities to arrive at the earnings allocated to common stock shareholders for purposes of calculating earnings per share. | ||||||||||||
The dilutive effect of participating securities is calculated using the more dilutive of the treasury stock or the two-class method. The Company has determined the two-class method to be the more dilutive. As such, the earnings allocated to common stock shareholders in the basic earnings per share calculation is adjusted for the reallocation of undistributed earnings to participating securities to arrive at the earnings allocated to common stock shareholders for calculating the diluted 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): | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net earnings attributable to W.W. Grainger, Inc. as reported | $ | 801,729 | $ | 797,036 | $ | 689,881 | ||||||
Distributed earnings available to participating securities | (3,154 | ) | (3,304 | ) | (3,641 | ) | ||||||
Undistributed earnings available to participating securities | (6,370 | ) | (8,348 | ) | (8,704 | ) | ||||||
Numerator for basic earnings per share - Undistributed and distributed earnings available to common shareholders | 792,205 | 785,384 | 677,536 | |||||||||
Undistributed earnings allocated to participating securities | 6,370 | 8,348 | 8,704 | |||||||||
Undistributed earnings reallocated to participating securities | (6,290 | ) | (8,218 | ) | (8,540 | ) | ||||||
Numerator for diluted earnings per share - Undistributed and distributed earnings available to common shareholders | $ | 792,285 | $ | 785,514 | $ | 677,700 | ||||||
Denominator for basic earnings per share – weighted average shares | 68,334,322 | 69,455,507 | 69,811,881 | |||||||||
Effect of dilutive securities | 871,422 | 1,120,925 | 1,369,852 | |||||||||
Denominator for diluted earnings per share – weighted average shares adjusted for dilutive securities | 69,205,744 | 70,576,432 | 71,181,733 | |||||||||
Earnings per share two-class method | ||||||||||||
Basic | $ | 11.59 | $ | 11.31 | $ | 9.71 | ||||||
Diluted | $ | 11.45 | $ | 11.13 | $ | 9.52 | ||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Notes to Financial Statements [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, 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 businesses individually do not meet the criteria 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. | ||||||||||||||||
The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment transfer prices are established at external selling prices, less costs not incurred due to a related party sale. The segment results include certain centrally incurred costs for shared services that are charged to the segments based upon the relative level of service used by each operating segment. | ||||||||||||||||
Following is a summary of segment results (in thousands of dollars): | ||||||||||||||||
2014 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 7,926,075 | $ | 1,075,754 | $ | 1,182,186 | $ | 10,184,015 | ||||||||
Intersegment net sales | (211,399 | ) | (304 | ) | (7,359 | ) | (219,062 | ) | ||||||||
Net sales to external customers | 7,714,676 | 1,075,450 | 1,174,827 | 9,964,953 | ||||||||||||
Segment operating earnings | 1,444,288 | 87,583 | (37,806 | ) | 1,494,065 | |||||||||||
Segment assets | 2,181,521 | 394,342 | 345,987 | 2,921,850 | ||||||||||||
Depreciation and amortization | 136,081 | 15,305 | 20,444 | 171,830 | ||||||||||||
Additions to long-lived assets | $ | 243,251 | $ | 106,918 | $ | 31,137 | $ | 381,306 | ||||||||
2013 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 7,413,712 | $ | 1,114,285 | $ | 1,040,473 | $ | 9,568,470 | ||||||||
Intersegment net sales | (128,660 | ) | (300 | ) | (1,752 | ) | (130,712 | ) | ||||||||
Net sales to external customers | 7,285,052 | 1,113,985 | 1,038,721 | 9,437,758 | ||||||||||||
Segment operating earnings | 1,304,175 | 128,768 | 7,599 | 1,440,542 | ||||||||||||
Segment assets | 2,045,564 | 392,147 | 359,007 | 2,796,718 | ||||||||||||
Depreciation and amortization | 116,392 | 14,309 | 19,754 | 150,455 | ||||||||||||
Additions to long-lived assets | $ | 177,046 | $ | 63,821 | $ | 23,951 | $ | 264,818 | ||||||||
2012 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 6,925,842 | $ | 1,105,782 | $ | 1,006,762 | $ | 9,038,386 | ||||||||
Intersegment net sales | (87,249 | ) | (363 | ) | (729 | ) | (88,341 | ) | ||||||||
Net sales to external customers | 6,838,593 | 1,105,419 | 1,006,033 | 8,950,045 | ||||||||||||
Segment operating earnings | 1,132,722 | 127,412 | 20,289 | 1,280,423 | ||||||||||||
Segment assets | 1,884,102 | 387,915 | 347,905 | 2,619,922 | ||||||||||||
Depreciation and amortization | 99,229 | 14,058 | 19,202 | 132,489 | ||||||||||||
Additions to long-lived assets | $ | 182,985 | $ | 46,330 | $ | 21,611 | $ | 250,926 | ||||||||
Following are reconciliations of the segment information with the consolidated totals per the financial statements (in thousands of dollars): | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Operating earnings: | ||||||||||||||||
Total operating earnings for reportable segments | $ | 1,494,065 | $ | 1,440,542 | $ | 1,280,423 | ||||||||||
Unallocated expenses | (146,948 | ) | (143,688 | ) | (149,298 | ) | ||||||||||
Total consolidated operating earnings | $ | 1,347,117 | $ | 1,296,854 | $ | 1,131,125 | ||||||||||
Assets: | ||||||||||||||||
Assets for reportable segments | $ | 2,921,850 | $ | 2,796,718 | $ | 2,619,922 | ||||||||||
Other current and noncurrent assets | 2,113,900 | 2,118,298 | 1,967,480 | |||||||||||||
Unallocated assets | 248,502 | 351,312 | 427,196 | |||||||||||||
Total consolidated assets | $ | 5,284,252 | $ | 5,266,328 | $ | 5,014,598 | ||||||||||
2014 | ||||||||||||||||
Segment | Unallocated | Consolidated Total | ||||||||||||||
Totals | ||||||||||||||||
Other significant items: | ||||||||||||||||
Depreciation and amortization | $ | 171,830 | $ | 18,341 | $ | 190,171 | ||||||||||
Additions to long-lived assets | $ | 381,306 | $ | 22,498 | $ | 403,804 | ||||||||||
Revenues | Long-lived Assets | |||||||||||||||
Geographic information: | ||||||||||||||||
United States | $ | 7,780,382 | $ | 1,109,175 | ||||||||||||
Canada | 1,074,660 | 253,466 | ||||||||||||||
Other foreign countries | 1,109,911 | 110,083 | ||||||||||||||
$ | 9,964,953 | $ | 1,472,724 | |||||||||||||
2013 | ||||||||||||||||
Segment | Unallocated | Consolidated Total | ||||||||||||||
Totals | ||||||||||||||||
Other significant items: | ||||||||||||||||
Depreciation and amortization | $ | 150,455 | $ | 14,447 | $ | 164,902 | ||||||||||
Additions to long-lived assets | $ | 264,818 | $ | 12,782 | $ | 277,600 | ||||||||||
Revenues | Long-lived Assets | |||||||||||||||
Geographic information: | ||||||||||||||||
United States | $ | 7,290,746 | $ | 1,004,806 | ||||||||||||
Canada | 1,126,559 | 176,491 | ||||||||||||||
Other foreign countries | 1,020,453 | 134,535 | ||||||||||||||
$ | 9,437,758 | $ | 1,315,832 | |||||||||||||
2012 | ||||||||||||||||
Segment | Unallocated | Consolidated Total | ||||||||||||||
Totals | ||||||||||||||||
Other significant items: | ||||||||||||||||
Depreciation and amortization | $ | 132,489 | $ | 13,123 | $ | 145,612 | ||||||||||
Additions to long-lived assets | $ | 250,926 | $ | 6,998 | $ | 257,924 | ||||||||||
Revenues | Long-lived Assets | |||||||||||||||
Geographic information: | ||||||||||||||||
United States | $ | 6,786,361 | $ | 944,400 | ||||||||||||
Canada | 1,120,470 | 136,644 | ||||||||||||||
Other foreign countries | 1,043,214 | 135,438 | ||||||||||||||
$ | 8,950,045 | $ | 1,216,482 | |||||||||||||
Revenues are attributed to countries based on the ship-to location of the customer. | ||||||||||||||||
Unallocated expenses and unallocated assets primarily relate to the Company headquarters' 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. | ||||||||||||||||
Assets for reportable segments include net accounts receivable and first-in, first-out inventory which are reported to the Company's Chief Operating Decision Maker. Long-lived assets consist of property, buildings, equipment and capitalized software. | ||||||||||||||||
Depreciation and amortization presented above includes depreciation of long-lived assets and amortization of capitalized software. |
SELECTED_QUARTERLY_FINANCIAL_D
SELECTED QUARTERLY FINANCIAL DATA | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Notes to Financial Statements [Abstract] | |||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||||||
A summary of selected quarterly information for 2014 and 2013 is as follows (in thousands of dollars, except for per share amounts): | |||||||||||||||||||||
2014 Quarter Ended | |||||||||||||||||||||
31-Mar | 30-Jun | 30-Sep | 31-Dec | Total | |||||||||||||||||
Net sales | $ | 2,385,627 | $ | 2,506,104 | $ | 2,562,263 | $ | 2,510,959 | $ | 9,964,953 | |||||||||||
Cost of merchandise sold | 1,309,656 | 1,425,418 | 1,459,479 | 1,456,158 | 5,650,711 | ||||||||||||||||
Gross profit | 1,075,971 | 1,080,686 | 1,102,784 | 1,054,801 | 4,314,242 | ||||||||||||||||
Warehousing, marketing and | 721,632 | 739,935 | 717,271 | 788,287 | 2,967,125 | ||||||||||||||||
administrative expenses | |||||||||||||||||||||
Operating earnings | 354,339 | 340,751 | 385,513 | 266,514 | 1,347,117 | ||||||||||||||||
Net earnings attributable to W.W. Grainger, Inc. | 216,653 | 205,915 | 230,322 | 148,839 | 801,729 | ||||||||||||||||
Earnings per share - basic | 3.11 | 2.97 | 3.33 | 2.17 | 11.59 | ||||||||||||||||
Earnings per share - diluted | $ | 3.07 | $ | 2.94 | $ | 3.3 | $ | 2.14 | $ | 11.45 | |||||||||||
2013 Quarter Ended | |||||||||||||||||||||
31-Mar | 30-Jun | 30-Sep | 31-Dec | Total | |||||||||||||||||
Net sales | $ | 2,280,435 | $ | 2,381,561 | $ | 2,398,530 | $ | 2,377,232 | $ | 9,437,758 | |||||||||||
Cost of merchandise sold | 1,248,699 | 1,334,577 | 1,347,164 | 1,370,835 | 5,301,275 | ||||||||||||||||
Gross profit | 1,031,736 | 1,046,984 | 1,051,366 | 1,006,397 | 4,136,483 | ||||||||||||||||
Warehousing, marketing and | 688,431 | 696,912 | 704,651 | 749,635 | 2,839,629 | ||||||||||||||||
administrative expenses | |||||||||||||||||||||
Operating earnings | 343,305 | 350,072 | 346,715 | 256,762 | 1,296,854 | ||||||||||||||||
Net earnings attributable to W.W. Grainger, Inc. | 211,838 | 217,660 | 210,789 | 156,749 | 797,036 | ||||||||||||||||
Earnings per share - basic | 2.99 | 3.08 | 2.99 | 2.24 | 11.31 | ||||||||||||||||
Earnings per share - diluted | $ | 2.94 | $ | 3.03 | $ | 2.95 | $ | 2.2 | $ | 11.13 | |||||||||||
CONTINGENCIES_AND_LEGAL_MATTER
CONTINGENCIES AND LEGAL MATTERS | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements [Abstract] | |
CONTINGENCIES AND LEGAL MATTERS | CONTINGENCIES AND LEGAL MATTERS |
The Company has been named, along with numerous other nonaffiliated companies, as a defendant in litigation in various states involving asbestos and/or silica. These lawsuits typically assert claims of personal injury arising from alleged exposure to asbestos and/or silica as a consequence of products purportedly distributed by the Company. In 2014, the Company was named in new lawsuits relating to asbestos involving approximately 68 new plaintiffs, while lawsuits relating to asbestos and/or silica involving approximately 1,293 plaintiffs were dismissed with respect to the Company, typically based on the lack of product identification. | |
As of January 16, 2015, the Company is named in cases filed on behalf of approximately 1,376 plaintiffs in which there is an allegation of exposure to asbestos and/or silica. The Company has denied, or intends to deny, the allegations in all of the above-described lawsuits. If a specific product distributed by the Company is identified in any of these lawsuits, the Company would attempt to exercise indemnification remedies against the product manufacturer. In addition, the Company believes that a substantial number of these claims are covered by insurance. The Company has entered into agreements with its major insurance carriers relating to the scope, coverage and costs of defense of lawsuits involving claims of exposure to asbestos. While the Company is unable to predict the outcome of these lawsuits, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position or results of operations. | |
From time to time the Company is involved in various other 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. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION | |
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions are eliminated from the consolidated financial statements. | ||
EQUITY METHOD OF ACCOUNTING FOR INVESTMENTS | EQUITY METHOD OF ACCOUNTING FOR INVESTMENTS | |
For investments in which the Company owns or controls from 20% to 50% of the voting shares, the equity method of accounting is used. The Company also accounts for investments below 20% using the equity method when significant influence can be exercised over the operating and financial policies of the investee company. The Company currently does not have any investments accounted for under the equity method of accounting. | ||
USE OF ESTIMATES | USE OF ESTIMATES | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ from those estimates. | ||
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION | |
The U.S. dollar is the reporting currency for all periods presented. The financial statements of the Company’s foreign operating subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of the Company’s foreign operating subsidiaries are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at average rates in effect during the period. Net exchange gains or losses resulting from the translation of financial statements of foreign operations and related long-term debt and derivative instruments are recorded as a separate component of other comprehensive earnings. See Note 13 to the Consolidated Financial Statements. Foreign currency transaction gains and losses are shown in the consolidated statement of earnings. | ||
RECLASSIFICATIONS | RECLASSIFICATIONS | |
Certain amounts in the 2013 and 2012 financial statements, as previously reported, have been reclassified to conform to the 2014 presentation. These reclassifications did not have a material impact on the presentation of the consolidated financial statements. | ||
REVENUE RECOGNITION | REVENUE RECOGNITION | |
Revenues recognized include product sales, billings for freight and handling charges and fees earned for services provided. The Company recognizes product sales and billings for freight and handling charges primarily on the date products are shipped to, or picked up by, the customer. In cases where the product is shipped directly to the customer, the Company recognizes revenue at the time of shipment on a gross basis. The Company's standard shipping terms are FOB shipping point. On occasion, the Company will negotiate FOB destination terms. These sales are recognized upon delivery to the customer. eCommerce revenues, which accounted for 36% of total 2014 revenues, are recognized on the same terms as revenues through other channels. Fee revenues, which accounted for less than 1% of total 2014 revenues, are recognized after services are completed. Taxes collected from customers and remitted to governmental authorities are presented on a net basis and are not included in revenue. | ||
COST OF MERCHANDISE SOLD | COST OF MERCHANDISE SOLD | |
Cost of merchandise sold includes product and product-related costs, vendor consideration, freight-out and handling costs. The Company defines handling costs as those costs incurred to fulfill a shipped sales order. | ||
VENDOR CONSIDERATION | VENDOR CONSIDERATION | |
The Company receives rebates and allowances from its vendors to promote their products. The Company utilizes numerous advertising programs to promote its vendors' products, including catalogs and other printed media, Internet, radio and other marketing programs. Most of these programs relate to multiple vendors, which makes supporting the specific, identifiable and incremental criteria difficult, and would require numerous assumptions and judgments. Based on the inexact nature of trying to track reimbursements to the advertising expenditure for each vendor, the Company treats most vendor advertising allowances as a reduction to Cost of merchandise sold rather than a reduction of operating (advertising) expenses. Rebates earned from vendors that are based on product purchases are capitalized into inventory as part of product purchase price. These rebates are credited to Cost of merchandise sold based on sales. Vendor rebates that are earned based on products sold are credited directly to Cost of merchandise sold. | ||
ADVERTISING | ADVERTISING | |
Advertising costs are expensed in the year the related advertisement is first presented. Advertising expense was $169 million, $178 million and $173 million for 2014, 2013 and 2012, respectively. Most vendor-provided allowances are classified as an offset to Cost of merchandise sold. For additional information see VENDOR CONSIDERATION above. | ||
Catalog expense is amortized equally over the life of the catalog, beginning in the month of its distribution. Advertising costs for catalogs that have not been distributed by year-end are capitalized as Prepaid expenses. Amounts included in Prepaid expenses at December 31, 2014 and 2013, were $27 million and $36 million, respectively. | ||
WAREHOUSING, MARKETING AND ADMINISTRATIVE EXPENSES | WAREHOUSING, MARKETING AND ADMINISTRATIVE EXPENSES | |
Included in this category are purchasing, branch operations, information services, and marketing and selling expenses, as well as other types of general and administrative costs. | ||
STOCK INCENTIVE PLANS | STOCK INCENTIVE PLANS | |
The Company measures all share-based payments using fair-value-based methods and records compensation expense related to these payments over the vesting period. See Note 11 to the Consolidated Financial Statements. | ||
INCOME TAXES | INCOME TAXES | |
Income taxes are recognized during the year in which transactions enter into the determination of financial statement income, with deferred taxes being provided for temporary differences between financial and tax reporting. The Company recognizes in the financial statements a provision for tax uncertainties, resulting from application of complex tax regulations in multiple tax jurisdictions. See Note 14 to the Consolidated Financial Statements. | ||
OTHER COMPREHENSIVE EARNINGS (LOSSES) | OTHER COMPREHENSIVE EARNINGS (LOSSES) | |
The Company's Other comprehensive earnings (losses) include foreign currency translation adjustments, changes in fair value of derivatives designated as hedges and unrecognized gains (losses) on postretirement and other employment-related benefit plans. See Note 13 to the Consolidated Financial Statements. | ||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS | |
The Company considers investments in highly liquid debt instruments, purchased with an original maturity of 90 days or less, to be cash equivalents. | ||
CONCENTRATION OF CREDIT RISK | CONCENTRATION OF CREDIT RISK | |
The Company places temporary cash investments with institutions of high credit quality and, by policy, limits the amount of credit exposure to any one institution. | ||
The Company has a broad customer base representing many diverse industries doing business in all regions of the United States, Canada, Europe, Asia and Latin America. Consequently, no significant concentration of credit risk is considered to exist. | ||
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
The Company establishes reserves for customer accounts that are potentially uncollectible. The method used to estimate the allowances is based on several factors, including the age of the receivables and the historical ratio of actual write-offs to the age of the receivables. These analyses also take into consideration economic conditions that may have an impact on a specific industry, group of customers or a specific customer. | ||
INVENTORIES | INVENTORIES | |
Inventories are valued at the lower of cost or market. Cost is determined primarily by the last-in, first-out (LIFO) method, which accounts for approximately 62% of total inventory. For the remaining inventory, cost is determined by the first-in, first-out (FIFO) method. | ||
PROPERTY, BUILDINGS AND EQUIPMENT | PROPERTY, BUILDINGS AND EQUIPMENT | |
Property, buildings and equipment are valued at cost. For financial statement purposes, depreciation and amortization are provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on the declining-balance and sum-of-the-years-digits depreciation methods. The Company's international businesses record depreciation expense primarily on a straight-line basis. The principal estimated useful lives for determining depreciation are as follows: | ||
Buildings, structures and improvements | 10 to 30 years | |
Furniture, fixtures, machinery and equipment | 3 to 10 years | |
Depreciation expense was $154 million, $142 million and $130 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||
Improvements to leased property are amortized over the initial terms of the respective leases or the estimated service lives of the improvements, whichever is shorter. | ||
The Company capitalized interest costs of $2 million in 2014 and $1 million in years 2013 and 2012. | ||
LONG-LIVED ASSETS | LONG-LIVED ASSETS | |
The carrying value of long-lived assets is evaluated whenever events or changes in circumstances indicate that the carrying value of the asset may be impaired. An impairment loss is recognized when estimated undiscounted future cash flows resulting from use of the asset, including disposition, are less than the carrying value of the asset. Impairment is measured as the amount by which the carrying amount exceeds the fair value. | ||
The Company recognized impairment charges of $5 million, $0.4 million and $2 million in 2014, 2013 and 2012, respectively, included in Warehousing, marketing and administrative expenses, to reduce the carrying value of certain long-lived assets to their estimated fair value pursuant to impairment indicators for property currently held for sale, lease terminations, idle assets and branch closures. | ||
CAPITALIZED SOFTWARE | CAPITALIZED SOFTWARE | |
The Company capitalizes certain costs related to the purchase and development of internal-use software. Amortization of capitalized software is on a straight-line basis over three or five years. Amortization begins when the software is available for its intended use. Amortization expense was $36 million, $23 million and $16 million for the years ended December 31, 2014, 2013 and 2012, respectively. Capitalized software was $148 million and $107 million at December 31, 2014 and 2013, respectively, and is included in Other assets and intangibles - net on the Consolidated Balance Sheets. During 2014, the Company wrote off $7 million in capitalized software costs due to a change in the implementation plan for an integrated IT system across North America. | ||
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES | |
Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized, but rather tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value. | ||
The Company recognizes an acquired intangible apart from goodwill whenever the intangible arises from contractual or other legal rights, or whenever it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. Such intangibles are amortized over their estimated useful lives unless the estimated useful life is determined to be indefinite. Amortizable intangible assets are being amortized primarily over useful lives of three to 22 years. The straight-line method of amortization is used as it has been determined to approximate the use pattern of the assets. Impairment losses are recognized if the carrying amount of an intangible, subject to amortization, is not recoverable from expected future cash flows and its carrying amount exceeds its fair value. | ||
The Company also maintains intangible assets with indefinite lives, which are not amortized. These intangibles are tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of these assets is less than their carrying value. See Note 2 and Note 3 to the Consolidated Financial Statements. | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS | |
The carrying amounts of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these financial instruments. The carrying value of long-term debt also approximates fair value due to the variable interest rates. The fair value of the Company's qualifying derivative instruments is recorded in the Consolidated Balance Sheets and is discussed in more detail in Note 8 to the Consolidated Financial Statements. | ||
DERIVATIVE INSTRUMENTS AND HEDGING | DERIVATIVE INSTRUMENTS AND HEDGING | |
The Company uses derivative financial instruments to manage 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. All derivative instruments are recognized as either assets or liabilities in the balance sheet at their fair value. Changes in the fair value of derivatives are recognized in net earnings or other comprehensive earnings (losses) depending on whether the derivative is designated as part of a qualifying hedging relationship. The ineffective portion of a qualifying hedging derivative and derivatives not designated as a hedge are recognized immediately in earnings. Instruments that do not qualify for hedge accounting are marked to market with the change recognized in current period earnings. See Note 8 and Note 13 to the Consolidated Financial Statements for additional information on the Company's derivative activities. | ||
INSURANCE RESERVES | INSURANCE RESERVES | |
The Company purchases insurance for catastrophic exposures and those risks required to be insured by law. It also retains a significant portion of the risk of certain losses related to workers' compensation, general liability and property losses through the utilization of high deductibles and self-insured retentions. Reserves for these potential losses are based on an external analysis of the Company's historical claims results and other actuarial assumptions. | ||
WARRANTY RESERVES | WARRANTY RESERVES | |
The Company generally warrants the products it sells against defects for one year. For a significant portion of warranty claims, the manufacturer of the product is responsible for expenses. For warranty expenses not covered by the manufacturer, the Company provides a reserve for future costs based primarily on historical experience. Warranty reserves were $4 million at December 31, 2014 and 2013. | ||
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. This ASU is not expected to have a material impact on the Company's consolidated financial statements. |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES [Abstract] | ||||||||||||||||||||||||
Schedule of Goodwill | The changes in the carrying amount of goodwill by segment are as follows (in thousands of dollars): | |||||||||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||||||||||
Balance at January 1, 2013 | $ | 170,439 | $ | 154,775 | $ | 218,456 | $ | 543,670 | ||||||||||||||||
Acquisitions | 35,820 | — | — | 35,820 | ||||||||||||||||||||
Purchase price adjustments | (12,900 | ) | — | 2,067 | (10,833 | ) | ||||||||||||||||||
Impairment | (12,861 | ) | — | (11,260 | ) | (24,121 | ) | |||||||||||||||||
Translation | — | (10,187 | ) | (8,882 | ) | (19,069 | ) | |||||||||||||||||
Balance at December 31, 2013 | 180,498 | 144,588 | 200,381 | 525,467 | ||||||||||||||||||||
Acquisitions | — | 9,620 | — | 9,620 | ||||||||||||||||||||
Purchase price adjustments | 21,522 | — | — | 21,522 | ||||||||||||||||||||
Impairment | — | — | (11,795 | ) | (11,795 | ) | ||||||||||||||||||
Translation | — | (13,019 | ) | (24,890 | ) | (37,909 | ) | |||||||||||||||||
Balance at December 31, 2014 | $ | 202,020 | $ | 141,189 | $ | 163,696 | $ | 506,905 | ||||||||||||||||
Schedule of Finite-Lived Intangible Assets by Major Class | Intangible assets included in Other assets and intangibles - net in the Consolidated Balance Sheets were comprised of the following (in thousands of dollars): | |||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||||||||||||||
Amortized customer lists and relationships | $ | 316,994 | $ | 133,819 | $ | 183,175 | $ | 350,760 | $ | 134,889 | $ | 215,871 | ||||||||||||
Amortized trademarks, trade names and other | 27,235 | 10,820 | 16,415 | 38,670 | 23,919 | 14,751 | ||||||||||||||||||
Non-amortized trade names | 64,340 | — | 64,340 | 72,790 | — | 72,790 | ||||||||||||||||||
Total intangible assets | $ | 408,569 | $ | 144,639 | $ | 263,930 | $ | 462,220 | $ | 158,808 | $ | 303,412 | ||||||||||||
Schedule of Expected Amortization Expense | Estimated amortization expense for future periods is as follows (in thousands of dollars): | |||||||||||||||||||||||
Year | Expense | |||||||||||||||||||||||
2015 | $ | 17,221 | ||||||||||||||||||||||
2016 | 16,268 | |||||||||||||||||||||||
2017 | 15,314 | |||||||||||||||||||||||
2018 | 14,928 | |||||||||||||||||||||||
2019 | 14,126 | |||||||||||||||||||||||
Thereafter | 121,733 |
ALLOWANCE_FOR_DOUBTFUL_ACCOUNT1
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
NOTE 4 - ALLOWANCE FOR DOUBTFUL ACCOUNTS [Abstract] | ||||||||
Schedule of Allowance for Doubtful Accounts | The following table shows the activity in the allowance for doubtful accounts (in thousands of dollars): | |||||||
For the Years Ended December 31, | ||||||||
2014 | 2013 | |||||||
Balance at beginning of period | $ | 20,096 | $ | 19,449 | ||||
Provision for uncollectible accounts | 12,945 | 8,855 | ||||||
Write-off of uncollectible accounts, net of recoveries | (9,628 | ) | (7,942 | ) | ||||
Business acquisitions, foreign currency and other | (1,292 | ) | (266 | ) | ||||
Balance at end of period | $ | 22,121 | $ | 20,096 | ||||
SHORTTERM_DEBT_Tables
SHORT-TERM DEBT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Short-term Debt [Abstract] | ||||||||
Schedule of Short-term Debt | The following summarizes information concerning short-term debt (in thousands of dollars): | |||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Lines of Credit | ||||||||
Outstanding at December 31 | $ | 51,896 | $ | 66,857 | ||||
Maximum month-end balance during the year | $ | 64,384 | $ | 77,401 | ||||
Weighted average interest rate during the year | 4.16 | % | 4.96 | % | ||||
Weighted average interest rate at December 31 | 3.69 | % | 5.02 | % | ||||
Commercial Paper | ||||||||
Outstanding at December 31 | $ | 5,000 | $ | — | ||||
Maximum month-end balance during the year | $ | 54,997 | $ | — | ||||
Weighted average interest rate during the year | 0.16 | % | — | % | ||||
Weighted average interest rate at December 31 | 0.17 | % | — | % |
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Long-term Debt, Unclassified [Abstract] | ||||||||
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following (in thousands of dollars): | |||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Bank term loan | $ | 126,770 | $ | 292,500 | ||||
Revolving line of credit | 146,325 | — | ||||||
Euro-denominated bank term loan | 133,067 | 158,067 | ||||||
Other | 21,778 | 25,375 | ||||||
Less current maturities | (23,404 | ) | (30,429 | ) | ||||
$ | 404,536 | $ | 445,513 | |||||
Schedule of Maturities of Long-term Debt | The scheduled aggregate principal payments related to long-term debt are due as follows (in thousands of dollars): | |||||||
Year | Payment Amount | |||||||
2015 | $ | 23,404 | ||||||
2016 | 247,641 | |||||||
2017 | 2,853 | |||||||
2018 | 1,771 | |||||||
2019 | 148,055 | |||||||
Thereafter | 4,216 | |||||||
EMPLOYEE_BENEFITS_Tables
EMPLOYEE BENEFITS (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Notes to Financial Statements [Abstract] | ||||||||||||
Schedule of Net Benefit Costs | The net periodic benefits costs charged to operating expenses, which were valued with a measurement date of January 1 for each year, consisted of the following components (in thousands of dollars): | |||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Service cost | $ | 9,005 | $ | 10,589 | $ | 20,058 | ||||||
Interest cost | 10,549 | 8,938 | 12,810 | |||||||||
Expected return on assets | (8,237 | ) | (7,076 | ) | (6,210 | ) | ||||||
Amortization of prior service credit | (7,254 | ) | (7,412 | ) | (495 | ) | ||||||
Amortization of transition asset | (143 | ) | (143 | ) | (143 | ) | ||||||
Amortization of unrecognized losses | 779 | 3,724 | 4,827 | |||||||||
Net periodic benefits costs | $ | 4,699 | $ | 8,620 | $ | 30,847 | ||||||
Schedule of Accumulated and Projected Benefit Obligations | Reconciliations of the beginning and ending balances of the postretirement benefit obligation, which is calculated using a December 31 measurement date, the fair value of plan assets and the funded status of the benefit obligation follow (in thousands of dollars): | |||||||||||
2014 | 2013 | |||||||||||
Benefit obligation at beginning of year | $ | 223,488 | $ | 246,087 | ||||||||
Service cost | 9,005 | 10,589 | ||||||||||
Interest cost | 10,549 | 8,938 | ||||||||||
Plan participants' contributions | 2,487 | 2,289 | ||||||||||
Actuarial losses (gains) | 42,300 | (38,476 | ) | |||||||||
Benefits paid | (5,609 | ) | (6,021 | ) | ||||||||
Prescription Drug Rebates | 702 | — | ||||||||||
Medicare Part D Subsidy received | (5 | ) | 82 | |||||||||
Benefit obligation at end of year | 282,917 | 223,488 | ||||||||||
Plan assets available for benefits at beginning of year | 144,514 | 117,939 | ||||||||||
Actual returns on plan assets | 13,730 | 25,278 | ||||||||||
Employer's contributions | 191 | 5,029 | ||||||||||
Plan participants' contributions | 2,487 | 2,289 | ||||||||||
Prescription Drug Rebates | 702 | — | ||||||||||
Benefits paid | (5,609 | ) | (6,021 | ) | ||||||||
Plan assets available for benefits at end of year | 156,015 | 144,514 | ||||||||||
Noncurrent postretirement benefit obligation | $ | 126,902 | $ | 78,974 | ||||||||
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The amounts recognized in AOCE consisted of the following components (in thousands of dollars): | |||||||||||
As of December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Prior service credit | $ | 67,303 | $ | 74,556 | ||||||||
Transition asset | — | 143 | ||||||||||
Unrecognized losses | (54,034 | ) | (18,006 | ) | ||||||||
Deferred tax (liability) | (5,121 | ) | (21,806 | ) | ||||||||
Net gains | $ | 8,148 | $ | 34,887 | ||||||||
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year | The components of AOCE related to the postretirement benefit costs that will be amortized into net periodic postretirement benefit costs in 2015 are estimated as follows (in thousands of dollars): | |||||||||||
2015 | ||||||||||||
Amortization of prior service credit | $ | (6,801 | ) | |||||||||
Amortization of unrecognized losses | 3,442 | |||||||||||
Estimated amount to be amortized from AOCE into net periodic postretirement benefit costs | $ | (3,359 | ) | |||||||||
Schedule of Assumptions Used | The following assumptions were used to determine net periodic benefit costs at January 1: | |||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Discount rate | 4.9 | % | 4 | % | 4.5 | % | ||||||
Expected long-term rate of return on plan assets, net of tax | 5.7 | % | 6 | % | 6 | % | ||||||
Initial healthcare cost trend rate | 7.5 | % | 8 | % | 8.5 | % | ||||||
Ultimate healthcare cost trend rate | 4.5 | % | 5 | % | 5 | % | ||||||
Year ultimate healthcare cost trend rate reached | 2026 | 2019 | 2019 | |||||||||
The following assumptions were used to determine benefit obligations at December 31: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Discount rate | 3.89 | % | 4.9 | % | 4 | % | ||||||
Expected long-term rate of return on plan assets, net of tax | 6.65 | % | 5.7 | % | 6 | % | ||||||
Initial healthcare cost trend rate | 7.25 | % | 7.5 | % | 8 | % | ||||||
Ultimate healthcare cost trend rate | 4.5 | % | 4.5 | % | 5 | % | ||||||
Year ultimate healthcare cost trend rate reached | 2026 | 2026 | 2019 | |||||||||
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | A 1 percentage point change in assumed healthcare cost trend rates would have the following effects on 2014 results (in thousands of dollars): | |||||||||||
1 Percentage Point | ||||||||||||
Increase | (Decrease) | |||||||||||
Effect on total service and interest cost | $ | 1,978 | $ | (1,613 | ) | |||||||
Effect on postretirement benefit obligation | 36,470 | (29,404 | ) | |||||||||
Schedule of Allocation of Plan Assets | The plan's assets are stated at fair value which represents the net asset value of shares held by the plan in the registered investment companies at the quoted market prices (Level 1 input) as of December 31 (in thousands of dollars): | |||||||||||
2014 | 2013 | |||||||||||
Registered investment companies | ||||||||||||
Fidelity Spartan U.S. Equity Index Fund | 73,071 | 67,160 | ||||||||||
Vanguard 500 Index Fund | 77,202 | 67,931 | ||||||||||
Vanguard Total International Stock | 23,994 | 25,034 | ||||||||||
Total Assets | $ | 174,267 | $ | 160,125 | ||||||||
Schedule of Expected Benefit Payments | The Company forecasts the following benefit payments (which include a projection for expected future employee service) for the next ten years (in thousands of dollars): | |||||||||||
Year | Estimated Gross Benefit Payments | |||||||||||
2015 | $ | 5,490 | ||||||||||
2016 | 6,393 | |||||||||||
2017 | 7,394 | |||||||||||
2018 | 8,556 | |||||||||||
2019 | 9,791 | |||||||||||
2020-2024 | 69,854 | |||||||||||
LEASES_Tables
LEASES (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases [Abstract] | |||||
Schedule of Future Minimum Rental Payments for Operating Leases | At December 31, 2014, the approximate future minimum lease payments for all operating leases were as follows (in thousands of dollars): | ||||
Year | Future Minimum Lease Payments | ||||
2015 | $ | 65,901 | |||
2016 | 49,898 | ||||
2017 | 30,804 | ||||
2018 | 19,500 | ||||
2019 | 12,237 | ||||
Thereafter | 7,813 | ||||
Total minimum payments required | 186,153 | ||||
Less amounts representing sublease income | (4,310 | ) | |||
$ | 181,843 | ||||
STOCK_INCENTIVE_PLANS_Tables
STOCK INCENTIVE PLANS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Disclosure of Share-based Compensation, Stock Options | Transactions involving stock options are summarized as follows: | ||||||||||||||||||||||||||
Shares Subject to Option | Weighted Average Price Per Share | Options Exercisable | |||||||||||||||||||||||||
Outstanding at January 1, 2012 | 3,960,675 | $ | 91.53 | 1,808,667 | |||||||||||||||||||||||
Granted | 404,111 | $ | 203.96 | ||||||||||||||||||||||||
Exercised | (972,015 | ) | $ | 74.14 | |||||||||||||||||||||||
Canceled or expired | (34,055 | ) | $ | 105.36 | |||||||||||||||||||||||
Outstanding at December 31, 2012 | 3,358,716 | $ | 109.95 | 1,629,468 | |||||||||||||||||||||||
Granted | 348,054 | $ | 245.95 | ||||||||||||||||||||||||
Exercised | (805,235 | ) | $ | 85.75 | |||||||||||||||||||||||
Canceled or expired | (51,080 | ) | $ | 150.15 | |||||||||||||||||||||||
Outstanding at December 31, 2013 | 2,850,455 | $ | 132.67 | 1,652,417 | |||||||||||||||||||||||
Granted | 257,693 | $ | 248.21 | ||||||||||||||||||||||||
Exercised | (479,452 | ) | $ | 100.33 | |||||||||||||||||||||||
Canceled or expired | (45,892 | ) | $ | 199.8 | |||||||||||||||||||||||
Outstanding at December 31, 2014 | 2,582,804 | $ | 149.01 | 1,647,903 | |||||||||||||||||||||||
Information about stock options excercised | The following table summarizes information about stock options exercised (in thousands of dollars): | ||||||||||||||||||||||||||
For the years ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Fair value of options exercised | $ | 11,167 | $ | 16,407 | $ | 18,120 | |||||||||||||||||||||
Total intrinsic value of options exercised | 71,924 | 124,752 | 126,138 | ||||||||||||||||||||||||
Fair value of options vested | 16,115 | 20,219 | 15,551 | ||||||||||||||||||||||||
Settlements of options exercised | 47,974 | 69,049 | 72,066 | ||||||||||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range | Information about stock options outstanding and exercisable as of December 31, 2014, is as follows: | ||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||
Weighted Average | Weighted Average | ||||||||||||||||||||||||||
Range of | Number | Remaining | Exercise | Intrinsic | Number | Remaining | Exercise | Intrinsic | |||||||||||||||||||
Exercise | Contractual | Price | Value | Contractual | Price | Value | |||||||||||||||||||||
Prices | Life | (000's) | Life | (000's) | |||||||||||||||||||||||
$52.29 - $78.86 | 308,141 | 1.55 years | $ | 70.19 | $ | 56,914 | 308,141 | 1.55 years | $ | 70.19 | $ | 56,914 | |||||||||||||||
$81.49 - $85.82 | 562,045 | 3.64 years | $ | 83.27 | 96,457 | 562,045 | 3.64 years | $ | 83.27 | 96,457 | |||||||||||||||||
$102.26 - $124.93 | 392,796 | 5.29 years | $ | 107.31 | 57,970 | 392,796 | 5.29 years | $ | 107.31 | 57,970 | |||||||||||||||||
$149.02 - $204.24 | 734,000 | 6.82 years | $ | 176.61 | 57,458 | 377,252 | 6.36 years | $ | 150.73 | 39,295 | |||||||||||||||||
$235.15 - $262.14 | 585,822 | 8.75 years | $ | 246.93 | 4,666 | 7,669 | 8.49 years | $ | 246.28 | 66 | |||||||||||||||||
2,582,804 | 5.71 years | $ | 149.01 | $ | 273,465 | 1,647,903 | 4.29 years | $ | 102.76 | $ | 250,702 | ||||||||||||||||
Assumptions used to determine fair value of options granted | The fair value of each option granted in 2014, 2013 and 2012 used the following assumptions: | ||||||||||||||||||||||||||
For the years ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Risk-free interest rate | 2.00% | 0.90% | 1.10% | ||||||||||||||||||||||||
Expected life | 6 years | 6 years | 6 years | ||||||||||||||||||||||||
Expected volatility | 25.00% | 25.50% | 25.90% | ||||||||||||||||||||||||
Expected dividend yield | 1.70% | 1.50% | 1.60% | ||||||||||||||||||||||||
Transactions involving performance-based share awards | The following table summarizes the transactions involving performance-based share awards: | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Shares | Weighted Average Price Per Share | Shares | Weighted Average Price Per Share | Shares | Weighted Average Price Per Share | ||||||||||||||||||||||
Beginning nonvested | 57,533 | $ | 185.02 | 117,979 | $ | 141.86 | 192,740 | $ | 109.16 | ||||||||||||||||||
shares outstanding | |||||||||||||||||||||||||||
Issued | 32,194 | $ | 242.65 | 31,553 | $ | 191.36 | 28,639 | $ | 177.75 | ||||||||||||||||||
Canceled | (6,835 | ) | $ | 190.9 | (7,659 | ) | $ | 148.25 | (1,666 | ) | $ | 114.41 | |||||||||||||||
Vested | (25,656 | ) | $ | 177.75 | (84,340 | ) | $ | 130.35 | (101,734 | ) | $ | 90.47 | |||||||||||||||
Ending nonvested shares | 57,236 | $ | 220 | 57,533 | $ | 185.02 | 117,979 | $ | 141.86 | ||||||||||||||||||
outstanding | |||||||||||||||||||||||||||
Activity for restricted stock units | The following table summarizes RSU activity: | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | ||||||||||||||||||||||
Average Price Per Share | Average Price Per Share | Average Price Per Share | |||||||||||||||||||||||||
Beginning nonvested units | 739,717 | $ | 154.09 | 978,888 | $ | 118.6 | 1,119,488 | $ | 100.76 | ||||||||||||||||||
Issued | 103,427 | $ | 248.12 | 139,529 | $ | 248.28 | 152,995 | $ | 204.26 | ||||||||||||||||||
Canceled | (51,410 | ) | $ | 170.98 | (54,533 | ) | $ | 141.48 | (37,972 | ) | $ | 123.01 | |||||||||||||||
Vested | (231,383 | ) | $ | 123.82 | (324,167 | ) | $ | 89.62 | (255,623 | ) | $ | 88.36 | |||||||||||||||
Ending nonvested units | 560,351 | $ | 182.4 | 739,717 | $ | 154.09 | 978,888 | $ | 118.6 | ||||||||||||||||||
Fair value of shares vested (in millions) | $29 | $29 | $23 | ||||||||||||||||||||||||
Activity for stock units related to deferred director fees | The following table summarizes DSU activity (dollars in thousands): | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Units | Dollars | Units | Dollars | Units | Dollars | ||||||||||||||||||||||
Beginning balance | 158,868 | $ | 33,063 | 151,775 | $ | 30,952 | 142,797 | $ | 26,730 | ||||||||||||||||||
Dividends | 2,602 | 653 | 2,259 | 559 | 2,273 | 454 | |||||||||||||||||||||
Deferred fees | 5,866 | 1,453 | 7,337 | 2,059 | 9,170 | 1,871 | |||||||||||||||||||||
Retirement distribution | (7,666 | ) | (1,695 | ) | (2,503 | ) | (507 | ) | (2,465 | ) | (461 | ) | |||||||||||||||
Unit appreciation | — | — | — | — | — | 2,358 | |||||||||||||||||||||
Ending balance | 159,670 | $ | 33,474 | 158,868 | $ | 33,063 | 151,775 | $ | 30,952 | ||||||||||||||||||
CAPITAL_STOCK_Tables
CAPITAL STOCK (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
CAPITAL STOCK [Abstract] | ||||||||||
Schedule of Capital Stock | The Company had no shares of preferred stock outstanding as of December 31, 2014 and 2013. The activity related to outstanding common stock and common stock held in treasury was as follows: | |||||||||
2014 | 2013 | |||||||||
Outstanding Common Stock | Treasury Stock | Outstanding Common Stock | Treasury Stock | |||||||
Balance at beginning of period | 68,853,938 | 40,805,281 | 69,478,495 | 40,180,724 | ||||||
Exercise of stock options, net of 1,905, and 5,134 shares swapped in stock-for-stock exchange, respectively | 477,547 | (477,547 | ) | 800,101 | (800,101 | ) | ||||
Settlement of restricted stock units, net of 104,552 and 135,341 shares retained, respectively | 175,549 | (175,549 | ) | 232,483 | (232,483 | ) | ||||
Settlement of performance share units, net of 33,003 and 39,874 shares retained, respectively | 51,337 | (51,337 | ) | 61,860 | (61,860 | ) | ||||
Purchase of treasury shares | (2,126,330 | ) | 2,126,330 | (1,719,001 | ) | 1,719,001 | ||||
Balance at end of period | 67,432,041 | 42,227,178 | 68,853,938 | 40,805,281 | ||||||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE EARNINGS (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE EARNINGS [Abstract] | ||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Earnings | The following table sets forth the components of Accumulated other comprehensive earnings (in thousands of dollars): | |||||||||||||||||||||
W.W. Grainger, Inc. Accumulated Other Comprehensive Earnings | ||||||||||||||||||||||
Foreign Currency Translation | Interest Rate Swap | Postretirement Benefit Plan | Other Employment-related Benefit Plans | Total | Foreign Currency Translation Attributable to Noncontrolling Interests | AOCE Attributable to W.W. Grainger, Inc. | ||||||||||||||||
Balance at January 1, 2012, net of tax | $ | 60,104 | $ | (1,616 | ) | $ | (73,396 | ) | $ | (2,448 | ) | $ | (17,356 | ) | $ | 11,382 | $ | (28,738 | ) | |||
Other comprehensive earnings (loss), net of tax | 5,414 | (2,545 | ) | 75,625 | (5,044 | ) | 73,450 | (8,866 | ) | 82,316 | ||||||||||||
Balance at December 31, 2012, net of tax | $ | 65,518 | $ | (4,161 | ) | $ | 2,229 | $ | (7,492 | ) | $ | 56,094 | $ | 2,516 | $ | 53,578 | ||||||
Other comprehensive earnings (loss) before reclassifications, net of tax | (72,815 | ) | 1,190 | 35,045 | (1,319 | ) | (37,899 | ) | (15,622 | ) | (22,277 | ) | ||||||||||
Amounts reclassified to Warehousing, marketing and administrative expenses | — | — | (3,831 | ) | — | (3,831 | ) | — | (3,831 | ) | ||||||||||||
Amounts reclassified to Income Taxes | — | — | 1,444 | — | 1,444 | — | 1,444 | |||||||||||||||
Net current period activity | $ | (72,815 | ) | $ | 1,190 | $ | 32,658 | $ | (1,319 | ) | $ | (40,286 | ) | $ | (15,622 | ) | $ | (24,664 | ) | |||
Balance at December 31, 2013, net of tax | $ | (7,297 | ) | $ | (2,971 | ) | $ | 34,887 | $ | (8,811 | ) | $ | 15,808 | $ | (13,106 | ) | $ | 28,914 | ||||
Other comprehensive earnings (loss) before reclassifications, net of tax | (124,065 | ) | 786 | (22,667 | ) | (1,462 | ) | (147,408 | ) | (9,880 | ) | (137,528 | ) | |||||||||
Amounts reclassified to Warehousing, marketing and administrative expenses | 9,042 | — | (6,617 | ) | 9,295 | 11,720 | — | 11,720 | ||||||||||||||
Amounts reclassified to Income Taxes | — | — | 2,545 | (2,324 | ) | 221 | — | 221 | ||||||||||||||
Net current period activity | $ | (115,023 | ) | $ | 786 | $ | (26,739 | ) | $ | 5,509 | $ | (135,467 | ) | $ | (9,880 | ) | $ | (125,587 | ) | |||
Balance at December 31, 2014, net of tax | $ | (122,320 | ) | $ | (2,185 | ) | $ | 8,148 | $ | (3,302 | ) | $ | (119,659 | ) | $ | (22,986 | ) | $ | (96,673 | ) | ||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
INCOME TAXES [Abstract] | ||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) consisted of the following (in thousands of dollars): | |||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current provision: | ||||||||||||
Federal | $ | 437,648 | $ | 398,593 | $ | 324,848 | ||||||
State | 47,199 | 42,526 | 40,508 | |||||||||
Foreign | 43,088 | 52,277 | 53,564 | |||||||||
Total current | 527,935 | 493,396 | 418,920 | |||||||||
Deferred tax (benefit) provision | (5,845 | ) | (13,546 | ) | 20 | |||||||
Total provision | $ | 522,090 | $ | 479,850 | $ | 418,940 | ||||||
Schedule of Income before Income Tax, Domestic and Foreign | Earnings before income taxes by geographical area consisted of the following (in thousands of dollars): | |||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
United States | $ | 1,299,523 | $ | 1,167,558 | $ | 982,220 | ||||||
Foreign | 34,863 | 120,041 | 135,569 | |||||||||
$ | 1,334,386 | $ | 1,287,599 | $ | 1,117,789 | |||||||
Schedule of Deferred Tax Assets and Liabilities | The income tax effects of temporary differences that gave rise to the net deferred tax asset were (in thousands of dollars): | |||||||||||
As of December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets: | ||||||||||||
Inventory | $ | 30,471 | $ | 35,381 | ||||||||
Accrued expenses | 44,362 | 38,368 | ||||||||||
Accrued employment-related benefits | 139,392 | 123,555 | ||||||||||
Foreign operating loss carryforwards | 61,219 | 70,204 | ||||||||||
Other | 12,748 | 30,862 | ||||||||||
Deferred tax assets | 288,192 | 298,370 | ||||||||||
Less valuation allowance | (56,876 | ) | (62,825 | ) | ||||||||
Deferred tax assets, net of valuation allowance | $ | 231,316 | $ | 235,545 | ||||||||
Deferred tax liabilities: | ||||||||||||
Property, buildings and equipment | (48,044 | ) | (38,210 | ) | ||||||||
Intangibles | (101,958 | ) | (119,923 | ) | ||||||||
Software | (21,975 | ) | (17,492 | ) | ||||||||
Prepaids | (16,673 | ) | (18,945 | ) | ||||||||
Other | (12,196 | ) | (17,378 | ) | ||||||||
Deferred tax liabilities | (200,846 | ) | (211,948 | ) | ||||||||
Net deferred tax asset | $ | 30,470 | $ | 23,597 | ||||||||
The net deferred tax asset is classified as follows: | ||||||||||||
Current assets | $ | 61,387 | $ | 75,819 | ||||||||
Noncurrent assets | 16,718 | 16,209 | ||||||||||
Noncurrent liabilities (foreign) | (47,635 | ) | (68,431 | ) | ||||||||
Net deferred tax asset | $ | 30,470 | $ | 23,597 | ||||||||
Reconciliation of Income Tax Statutory Disclosure | A reconciliation of income tax expense with federal income taxes at the statutory rate follows (in thousands of dollars): | |||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal income tax at the 35% statutory rate | $ | 467,035 | $ | 450,660 | $ | 391,226 | ||||||
State income taxes, net of federal income tax benefit | 31,263 | 27,430 | 26,099 | |||||||||
Other - net | 23,792 | 1,760 | 1,615 | |||||||||
Income tax expense | $ | 522,090 | $ | 479,850 | $ | 418,940 | ||||||
Effective tax rate | 39.1 | % | 37.3 | % | 37.5 | % | ||||||
Reconciliation of Income Tax Contingencies | The changes in the liability for tax uncertainties, excluding interest, are as follows (in thousands of dollars): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Balance at beginning of year | $ | 40,317 | $ | 40,937 | $ | 22,760 | ||||||
Additions for tax positions related to the current year | 11,545 | 8,396 | 11,369 | |||||||||
Additions for tax positions of prior years | 5,318 | 2,308 | 8,977 | |||||||||
Reductions for tax positions of prior years | (4,109 | ) | (7,242 | ) | (1,447 | ) | ||||||
Reductions due to statute lapse | (1,271 | ) | (18 | ) | (737 | ) | ||||||
Settlements, audit payments, refunds - net | (6,674 | ) | (4,064 | ) | 15 | |||||||
Balance at end of year | $ | 45,126 | $ | 40,317 | $ | 40,937 | ||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Notes to Financial Statements [Abstract] | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | 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): | |||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net earnings attributable to W.W. Grainger, Inc. as reported | $ | 801,729 | $ | 797,036 | $ | 689,881 | ||||||
Distributed earnings available to participating securities | (3,154 | ) | (3,304 | ) | (3,641 | ) | ||||||
Undistributed earnings available to participating securities | (6,370 | ) | (8,348 | ) | (8,704 | ) | ||||||
Numerator for basic earnings per share - Undistributed and distributed earnings available to common shareholders | 792,205 | 785,384 | 677,536 | |||||||||
Undistributed earnings allocated to participating securities | 6,370 | 8,348 | 8,704 | |||||||||
Undistributed earnings reallocated to participating securities | (6,290 | ) | (8,218 | ) | (8,540 | ) | ||||||
Numerator for diluted earnings per share - Undistributed and distributed earnings available to common shareholders | $ | 792,285 | $ | 785,514 | $ | 677,700 | ||||||
Denominator for basic earnings per share – weighted average shares | 68,334,322 | 69,455,507 | 69,811,881 | |||||||||
Effect of dilutive securities | 871,422 | 1,120,925 | 1,369,852 | |||||||||
Denominator for diluted earnings per share – weighted average shares adjusted for dilutive securities | 69,205,744 | 70,576,432 | 71,181,733 | |||||||||
Earnings per share two-class method | ||||||||||||
Basic | $ | 11.59 | $ | 11.31 | $ | 9.71 | ||||||
Diluted | $ | 11.45 | $ | 11.13 | $ | 9.52 | ||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Notes to Financial Statements [Abstract] | ||||||||||||||||
Summary of Segment Results | Following is a summary of segment results (in thousands of dollars): | |||||||||||||||
2014 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 7,926,075 | $ | 1,075,754 | $ | 1,182,186 | $ | 10,184,015 | ||||||||
Intersegment net sales | (211,399 | ) | (304 | ) | (7,359 | ) | (219,062 | ) | ||||||||
Net sales to external customers | 7,714,676 | 1,075,450 | 1,174,827 | 9,964,953 | ||||||||||||
Segment operating earnings | 1,444,288 | 87,583 | (37,806 | ) | 1,494,065 | |||||||||||
Segment assets | 2,181,521 | 394,342 | 345,987 | 2,921,850 | ||||||||||||
Depreciation and amortization | 136,081 | 15,305 | 20,444 | 171,830 | ||||||||||||
Additions to long-lived assets | $ | 243,251 | $ | 106,918 | $ | 31,137 | $ | 381,306 | ||||||||
2013 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 7,413,712 | $ | 1,114,285 | $ | 1,040,473 | $ | 9,568,470 | ||||||||
Intersegment net sales | (128,660 | ) | (300 | ) | (1,752 | ) | (130,712 | ) | ||||||||
Net sales to external customers | 7,285,052 | 1,113,985 | 1,038,721 | 9,437,758 | ||||||||||||
Segment operating earnings | 1,304,175 | 128,768 | 7,599 | 1,440,542 | ||||||||||||
Segment assets | 2,045,564 | 392,147 | 359,007 | 2,796,718 | ||||||||||||
Depreciation and amortization | 116,392 | 14,309 | 19,754 | 150,455 | ||||||||||||
Additions to long-lived assets | $ | 177,046 | $ | 63,821 | $ | 23,951 | $ | 264,818 | ||||||||
2012 | ||||||||||||||||
United States | Canada | Other Businesses | Total | |||||||||||||
Total net sales | $ | 6,925,842 | $ | 1,105,782 | $ | 1,006,762 | $ | 9,038,386 | ||||||||
Intersegment net sales | (87,249 | ) | (363 | ) | (729 | ) | (88,341 | ) | ||||||||
Net sales to external customers | 6,838,593 | 1,105,419 | 1,006,033 | 8,950,045 | ||||||||||||
Segment operating earnings | 1,132,722 | 127,412 | 20,289 | 1,280,423 | ||||||||||||
Segment assets | 1,884,102 | 387,915 | 347,905 | 2,619,922 | ||||||||||||
Depreciation and amortization | 99,229 | 14,058 | 19,202 | 132,489 | ||||||||||||
Additions to long-lived assets | $ | 182,985 | $ | 46,330 | $ | 21,611 | $ | 250,926 | ||||||||
Significant Reconciling Items from Segments to Consolidated | Following are reconciliations of the segment information with the consolidated totals per the financial statements (in thousands of dollars): | |||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Operating earnings: | ||||||||||||||||
Total operating earnings for reportable segments | $ | 1,494,065 | $ | 1,440,542 | $ | 1,280,423 | ||||||||||
Unallocated expenses | (146,948 | ) | (143,688 | ) | (149,298 | ) | ||||||||||
Total consolidated operating earnings | $ | 1,347,117 | $ | 1,296,854 | $ | 1,131,125 | ||||||||||
Assets: | ||||||||||||||||
Assets for reportable segments | $ | 2,921,850 | $ | 2,796,718 | $ | 2,619,922 | ||||||||||
Other current and noncurrent assets | 2,113,900 | 2,118,298 | 1,967,480 | |||||||||||||
Unallocated assets | 248,502 | 351,312 | 427,196 | |||||||||||||
Total consolidated assets | $ | 5,284,252 | $ | 5,266,328 | $ | 5,014,598 | ||||||||||
2014 | ||||||||||||||||
Segment | Unallocated | Consolidated Total | ||||||||||||||
Totals | ||||||||||||||||
Other significant items: | ||||||||||||||||
Depreciation and amortization | $ | 171,830 | $ | 18,341 | $ | 190,171 | ||||||||||
Additions to long-lived assets | $ | 381,306 | $ | 22,498 | $ | 403,804 | ||||||||||
Revenues | Long-lived Assets | |||||||||||||||
Geographic information: | ||||||||||||||||
United States | $ | 7,780,382 | $ | 1,109,175 | ||||||||||||
Canada | 1,074,660 | 253,466 | ||||||||||||||
Other foreign countries | 1,109,911 | 110,083 | ||||||||||||||
$ | 9,964,953 | $ | 1,472,724 | |||||||||||||
2013 | ||||||||||||||||
Segment | Unallocated | Consolidated Total | ||||||||||||||
Totals | ||||||||||||||||
Other significant items: | ||||||||||||||||
Depreciation and amortization | $ | 150,455 | $ | 14,447 | $ | 164,902 | ||||||||||
Additions to long-lived assets | $ | 264,818 | $ | 12,782 | $ | 277,600 | ||||||||||
Revenues | Long-lived Assets | |||||||||||||||
Geographic information: | ||||||||||||||||
United States | $ | 7,290,746 | $ | 1,004,806 | ||||||||||||
Canada | 1,126,559 | 176,491 | ||||||||||||||
Other foreign countries | 1,020,453 | 134,535 | ||||||||||||||
$ | 9,437,758 | $ | 1,315,832 | |||||||||||||
2012 | ||||||||||||||||
Segment | Unallocated | Consolidated Total | ||||||||||||||
Totals | ||||||||||||||||
Other significant items: | ||||||||||||||||
Depreciation and amortization | $ | 132,489 | $ | 13,123 | $ | 145,612 | ||||||||||
Additions to long-lived assets | $ | 250,926 | $ | 6,998 | $ | 257,924 | ||||||||||
Revenues | Long-lived Assets | |||||||||||||||
Geographic information: | ||||||||||||||||
United States | $ | 6,786,361 | $ | 944,400 | ||||||||||||
Canada | 1,120,470 | 136,644 | ||||||||||||||
Other foreign countries | 1,043,214 | 135,438 | ||||||||||||||
$ | 8,950,045 | $ | 1,216,482 | |||||||||||||
SELECTED_QUARTERLY_FINANCIAL_D1
SELECTED QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) [Abstract] | |||||||||||||||||||||
Schedule of Quarterly Financial Information | A summary of selected quarterly information for 2014 and 2013 is as follows (in thousands of dollars, except for per share amounts): | ||||||||||||||||||||
2014 Quarter Ended | |||||||||||||||||||||
31-Mar | 30-Jun | 30-Sep | 31-Dec | Total | |||||||||||||||||
Net sales | $ | 2,385,627 | $ | 2,506,104 | $ | 2,562,263 | $ | 2,510,959 | $ | 9,964,953 | |||||||||||
Cost of merchandise sold | 1,309,656 | 1,425,418 | 1,459,479 | 1,456,158 | 5,650,711 | ||||||||||||||||
Gross profit | 1,075,971 | 1,080,686 | 1,102,784 | 1,054,801 | 4,314,242 | ||||||||||||||||
Warehousing, marketing and | 721,632 | 739,935 | 717,271 | 788,287 | 2,967,125 | ||||||||||||||||
administrative expenses | |||||||||||||||||||||
Operating earnings | 354,339 | 340,751 | 385,513 | 266,514 | 1,347,117 | ||||||||||||||||
Net earnings attributable to W.W. Grainger, Inc. | 216,653 | 205,915 | 230,322 | 148,839 | 801,729 | ||||||||||||||||
Earnings per share - basic | 3.11 | 2.97 | 3.33 | 2.17 | 11.59 | ||||||||||||||||
Earnings per share - diluted | $ | 3.07 | $ | 2.94 | $ | 3.3 | $ | 2.14 | $ | 11.45 | |||||||||||
2013 Quarter Ended | |||||||||||||||||||||
31-Mar | 30-Jun | 30-Sep | 31-Dec | Total | |||||||||||||||||
Net sales | $ | 2,280,435 | $ | 2,381,561 | $ | 2,398,530 | $ | 2,377,232 | $ | 9,437,758 | |||||||||||
Cost of merchandise sold | 1,248,699 | 1,334,577 | 1,347,164 | 1,370,835 | 5,301,275 | ||||||||||||||||
Gross profit | 1,031,736 | 1,046,984 | 1,051,366 | 1,006,397 | 4,136,483 | ||||||||||||||||
Warehousing, marketing and | 688,431 | 696,912 | 704,651 | 749,635 | 2,839,629 | ||||||||||||||||
administrative expenses | |||||||||||||||||||||
Operating earnings | 343,305 | 350,072 | 346,715 | 256,762 | 1,296,854 | ||||||||||||||||
Net earnings attributable to W.W. Grainger, Inc. | 211,838 | 217,660 | 210,789 | 156,749 | 797,036 | ||||||||||||||||
Earnings per share - basic | 2.99 | 3.08 | 2.99 | 2.24 | 11.31 | ||||||||||||||||
Earnings per share - diluted | $ | 2.94 | $ | 3.03 | $ | 2.95 | $ | 2.2 | $ | 11.13 | |||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
eCommerce Revenue | 36.00% | ||
Service Fee Revenue (less than) | 1.00% | ||
Advertising expense | $169,000,000 | $178,000,000 | $173,000,000 |
Catalog-related prepaid expenses | 27,000,000 | 36,000,000 | |
Original Maturity of Cash (days) | 90 days | ||
Depreciation | 154,000,000 | 142,000,000 | 130,000,000 |
Percentage of LIFO Inventory | 62.00% | ||
Capitalized Interest Costs | 2,000,000 | 1,000,000 | 1,000,000 |
Long lived assets related impairment charges | 5,000,000 | 400,000 | 2,000,000 |
Capitalized software amortization | 36,000,000 | 23,000,000 | 16,000,000 |
Capitalized software | 148,000,000 | 107,000,000 | |
Capitalized Computer Software, Impairments | 7,000,000 | ||
Warranty reserves | $4,000,000 | $4,000,000 | |
Minimum [Member] | |||
Equity Method Investment, Ownership Percentage | 20.00% | ||
Buildings, Structures and Improvements, Estimated Useful Lives | 10 | ||
Furniture, Fixtures, Machinery and Equipment, Estimated Useful Lives | 3 | ||
Intangibles Assets Estimated Useful Lives | 3 | ||
Capitalized Software Amortization Period | 3 | ||
Maximum [Member] | |||
Equity Method Investment, Ownership Percentage | 50.00% | ||
Buildings, Structures and Improvements, Estimated Useful Lives | 30 | ||
Furniture, Fixtures, Machinery and Equipment, Estimated Useful Lives | 10 | ||
Intangibles Assets Estimated Useful Lives | 22 | ||
Capitalized Software Amortization Period | 5 |
BUSINESS_ACQUISITIONS_AND_DIVE1
BUSINESS ACQUISITIONS AND DIVESTITURES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Business Acquisitions and Divestitures [Line Items] | |||
Reclassification of cumulative currency translation | $9,042,000 | $0 | $0 |
Goodwill | 506,905,000 | 525,467,000 | 543,670,000 |
Intangible Assets | 263,930,000 | 303,412,000 | |
Grainger Brazil [Member] | |||
Business Acquisitions and Divestitures [Line Items] | |||
Shutdown Costs | 29,000,000 | ||
Reclassification of cumulative currency translation | 9,042,000 | ||
WFS Enterprises, Inc. [Member] | |||
Business Acquisitions and Divestitures [Line Items] | |||
Business Acquisition, Name of Acquired Entity | WFS Enterprises, Inc. | ||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | 87,000,000 | ||
Business Acquisition, Description of Acquired Entity | WFS is a distributor of tools and supplies to industrial markets in Southern Ontario and select U.S. locations. | ||
Business Acquisition, Goodwill and Intangibles, prior to finalization of Purchase Price Allocation | 16,000,000 | ||
Business Acquisition, Cost of Acquired Entity, Cash Paid | 33,000,000 | ||
Safety Solutions, Inc. [Member] | |||
Business Acquisitions and Divestitures [Line Items] | |||
Business Acquisition, Name of Acquired Entity | Safety Solutions, Inc. | ||
Business Acquisition, Cost of Acquired Entity, Cash Paid | 30,000,000 | ||
Goodwill | 8,000,000 | ||
Intangible Assets | 13,000,000 | ||
E&R Industrial, Inc. [Member] | |||
Business Acquisitions and Divestitures [Line Items] | |||
Business Acquisition, Name of Acquired Entity | E&R Industrial Sales, Inc. | ||
Business Acquisition, Cost of Acquired Entity, Cash Paid | 116,000,000 | ||
Goodwill | 49,000,000 | ||
Intangible Assets | 51,000,000 | ||
Grainger Colombia [Member] | |||
Business Acquisitions and Divestitures [Line Items] | |||
Business Acquisition, Name of Acquired Entity | Grainger Colombia | ||
Business Acquisition, Cost of Acquired Entity, Cash Paid | 10,000,000 | ||
Techni Tool, Inc. [Member] | |||
Business Acquisitions and Divestitures [Line Items] | |||
Business Acquisition, Name of Acquired Entity | Techni-Tool, Inc. | ||
Business Acquisition, Cost of Acquired Entity, Cash Paid | 43,000,000 | ||
Goodwill | 10,000,000 | ||
Intangible Assets | $20,000,000 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | |||
Goodwill | $506,905 | $525,467 | $543,670 |
Acquisitions | 9,620 | 35,820 | |
Purchase price adjustments | 21,522 | -10,833 | |
Goodwill, Impairment Loss | -11,795 | -24,121 | |
Goodwill, Translation Adjustments | -37,909 | -19,069 | |
United States [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 202,020 | 180,498 | 170,439 |
Acquisitions | 0 | 35,820 | |
Purchase price adjustments | 21,522 | -12,900 | |
Goodwill, Impairment Loss | 0 | -12,861 | |
Goodwill, Translation Adjustments | 0 | 0 | |
Canada [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 141,189 | 144,588 | 154,775 |
Acquisitions | 9,620 | 0 | |
Purchase price adjustments | 0 | 0 | |
Goodwill, Impairment Loss | 0 | 0 | |
Goodwill, Translation Adjustments | -13,019 | -10,187 | |
Other Businesses [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 163,696 | 200,381 | 218,456 |
Acquisitions | 0 | 0 | |
Purchase price adjustments | 0 | 2,067 | |
Goodwill, Impairment Loss | -11,795 | -11,260 | |
Goodwill, Translation Adjustments | -24,890 | -8,882 | |
Fabory [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $118,000 | ||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 31.00% |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets included in Other assets and intangibles (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Decrease in Gross Intangible Assets | $54,000,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 144,639,000 | 158,808,000 |
Intangible Assets, Gross (Excluding Goodwill) | 408,569,000 | 462,220,000 |
Total intangible assets | 263,930,000 | 303,412,000 |
Customer-Related Intangible Assets [Member] | ||
Finite-Lived Intangible Assets, Gross | 316,994,000 | 350,760,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | 133,819,000 | 134,889,000 |
Finite-Lived Intangible Assets, Net | 183,175,000 | 215,871,000 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets, Gross | 27,235,000 | 38,670,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | 10,820,000 | 23,919,000 |
Finite-Lived Intangible Assets, Net | 16,415,000 | 14,751,000 |
Indefinite-lived Intangible Assets [Member] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 64,340,000 | 72,790,000 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $0 | $0 |
GOODWILL_AND_OTHER_INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense Recognized on Intangible Assets (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets Amortization [Line Items] | |||
Amortization of Intangible Assets | $18 | $15 | $13 |
Minimum [Member] | |||
Intangible Assets Amortization [Line Items] | |||
Customer relationships and lists, amortization period | 6 years | ||
Trademarks, tradenames and other, amortization period | 3 years | ||
Maximum [Member] | |||
Intangible Assets Amortization [Line Items] | |||
Customer relationships and lists, amortization period | 22 years | ||
Trademarks, tradenames and other, amortization period | 17 years |
GOODWILL_AND_OTHER_INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS Estimated amortization expense (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Intangible Assets Amortization [Line Items] | |
2015 | $17,221 |
2016 | 16,268 |
2017 | 15,314 |
2018 | 14,928 |
2019 | 14,126 |
Thereafter | $121,733 |
ALLOWANCE_FOR_DOUBTFUL_ACCOUNT2
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
ALLOWANCE FOR DOUBTFUL ACCOUNTS [Abstract] | |||
Balance at beginning of period | $20,096 | $19,449 | |
Provision for uncollectible accounts | 12,945 | 8,855 | 9,504 |
Write-off of uncollectible accounts, net of recoveries | -9,628 | -7,942 | |
Business acquisitions, foreign currency and other | -1,292 | -266 | |
Balance at end of period | $22,121 | $20,096 | $19,449 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
INVENTORIES [Abstract] | |||
Inventory, LIFO Reserve | $389 | $388 | |
Inventory, LIFO Reserve, Effect on Income, Net | 1 | 8 | 13 |
Inventory Valuation Reserves | $137 | $134 |
SHORTTERM_DEBT_Details
SHORT-TERM DEBT (Details) (USD $) | 12 Months Ended | 60 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Aug. 21, 2018 | |
Line of Credit [Member] | |||
Short-term Debt [Line Items] | |||
Lines of credit | $51,896,000 | $66,857,000 | |
Maximum month-end balance during the year | 64,384,000 | 77,401,000 | |
Short-term Debt, Weighted Average Interest Rate during year | 4.16% | 4.96% | |
Short-term Debt, Weighted Average Interest Rate at December 31 | 3.69% | 5.02% | |
Uncommitted lines of credit | 114,000,000 | 109,000,000 | |
Committed Line of Credit | 600,000,000 | 600,000,000 | |
Line of Credit Facility, Commitment Fee Percentage | 0.06% | 0.06% | |
Committed Line of Credit Facility, Expiration Date | 21-Aug-18 | ||
Commercial Paper [Member] | |||
Short-term Debt [Line Items] | |||
Maximum month-end balance during the year | 54,997,000 | 0 | |
Commercial paper | 5,000,000 | 0 | |
Short-term Debt, Weighted Average Interest Rate during year | 0.16% | 0.00% | |
Short-term Debt, Weighted Average Interest Rate at December 31 | 0.17% | 0.00% | |
Letter of Credit [Member] | |||
Short-term Debt [Line Items] | |||
Letters of Credit Outstanding, Amount | 29,000,000 | 26,000,000 | |
Letters Of Credit Outstanding To Facitate Purchase Of Products From Foreign Sources | $3,000,000 | $3,000,000 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) | 12 Months Ended | 9 Months Ended | 12 Months Ended | 5 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | 31-May-12 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Bank term loan [Member] | Bank term loan [Member] | Bank term loan [Member] | Euro denominated bank term loan [Member] | Euro denominated bank term loan [Member] | Euro denominated bank term loan [Member] | Euro denominated bank term loan [Member] | |
CAD | CAD | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | EUR (€) | USD ($) | USD ($) | |||||
Debt Instrument [Line Items] | |||||||||||||||
Debt Instrument, Face Amount | $300,000,000 | € 120,000,000 | |||||||||||||
Other Long-term Debt | 21,778,000 | 25,375,000 | |||||||||||||
Current maturities of long-term debt | -23,404,000 | -30,429,000 | |||||||||||||
Long-term Debt | 404,536,000 | 445,513,000 | 146,325,000 | 0 | 126,770,000 | 292,500,000 | 133,067,000 | 158,067,000 | |||||||
Debt, Weighted Average Interest Rate | 1.91% | ||||||||||||||
Debt Instrument, Maturity Date | 24-Sep-19 | 24-Sep-19 | 30-Nov-16 | 31-Aug-16 | |||||||||||
Semi annual payments | 2,500,000 | ||||||||||||||
Payment start date | 31-Aug-13 | ||||||||||||||
Repayments of Long-term Debt | 170,907,000 | 16,681,000 | 219,950,000 | 150,000,000 | |||||||||||
Debt Instrument, Interest Rate During Period | 1.16% | 1.75% | |||||||||||||
Line of Credit Facility, Initiation Date | 29-Sep-14 | 29-Sep-14 | |||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 175,000,000 | ||||||||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.07% | 0.07% | |||||||||||||
Proceeds from Lines of Credit | 170,000,000 | ||||||||||||||
2016 | 247,641,000 | ||||||||||||||
2017 | 2,853,000 | ||||||||||||||
2018 | 1,771,000 | ||||||||||||||
2019 | 148,055,000 | ||||||||||||||
Thereafter | $4,216,000 |
DERIVATIVE_INSTRUMENTS_Details
DERIVATIVE INSTRUMENTS (Details) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 45 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Sep. 29, 2014 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | Euro denominated interest Rate Swap [Member] | Euro denominated interest Rate Swap [Member] | Euro denominated interest Rate Swap [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | |
EUR (€) | USD ($) | USD ($) | USD ($) | CAD | USD ($) | ||||
Derivative [Line Items] | |||||||||
Derivative instruments, Liabilities | $2,000,000 | $3,000,000 | |||||||
Derivative instruments, Assets | 1,000,000 | ||||||||
Forward foreign currency exchange contract details [Abstract] | |||||||||
Derivative, notional amount | 60,000,000 | 160,000,000 | |||||||
Derivative, maturity date | 31-Aug-16 | 30-Sep-14 | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | ($127,847,000) | ($78,253,000) | $7,344,000 | $4,000,000 |
EMPLOYEE_BENEFITS_Defined_Cont
EMPLOYEE BENEFITS - Defined Contribution Plans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Profit sharing plan expense | $175,000,000 | $173,000,000 | $165,000,000 |
Defined contribution plans, expense | 15,000,000 | 12,000,000 | 12,000,000 |
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Tax | -2,545,000 | -1,444,000 | 0 |
Other Postretirement Benefit Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 156,015,000 | 144,514,000 | 117,939,000 |
Executive Death Benefit Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Unrecognized (Gains)/Losses in AOCE | -1,000,000 | -1,000,000 | |
Netherlands Plan Change | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 5,000,000 | ||
Unrecognized (Gains)/Losses in AOCE | 9,000,000 | ||
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, before Tax | 9,000,000 | ||
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Tax | 2,000,000 | ||
Defined Benefit Plan, Recognized Net Loss Due to Settlements and Curtailments | $3,000,000 | ||
Minimum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Profit sharing contribution percentage | 8.00% | ||
Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Profit sharing contribution percentage | 18.00% |
EMPLOYEE_BENEFITS_Executive_De
EMPLOYEE BENEFITS - Executive Death Benefit Plan (Details) (Executive Death Benefit Plan [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Executive Death Benefit Plan [Member] | |||
Defined Benefit Plan, Income Continuation Rate | 50.00% | ||
Net periodic benefit costs | $700,000 | $800,000 | $1,000,000 |
Net gains in AOCE | 1,000,000 | 1,000,000 | |
Defined Benefit Plan, Benefit Obligation | $16,000,000 | $15,000,000 |
EMPLOYEE_BENEFITS_Postretireme
EMPLOYEE BENEFITS - Postretirement Benefits (Details) (Other Postretirement Benefit Plans, Defined Benefit [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
years | |||
Increase in Unrecognized Losses in AOCE | $36,000,000 | ||
Postretirement Benefits | |||
Service cost | 9,005,000 | 10,589,000 | 20,058,000 |
Interest cost | 10,549,000 | 8,938,000 | 12,810,000 |
Expected return on assets | -8,237,000 | -7,076,000 | -6,210,000 |
Amortization of prior service credits | -7,254,000 | -7,412,000 | -495,000 |
Amortization of transition asset | -143,000 | -143,000 | -143,000 |
Amortization of unrecognized losses | 779,000 | 3,724,000 | 4,827,000 |
Net periodic benefit costs | 4,699,000 | 8,620,000 | 30,847,000 |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation at beginning of year | 223,488,000 | 246,087,000 | |
Service cost | 9,005,000 | 10,589,000 | 20,058,000 |
Interest cost | 10,549,000 | 8,938,000 | 12,810,000 |
Plan participants' contributions | 2,487,000 | 2,289,000 | |
Actuarial (gains) losses | 42,300,000 | -38,476,000 | |
Benefits paid | -5,609,000 | -6,021,000 | |
Prescription Drug Rebates | 702,000 | 0 | |
Medicare Part D Subsidy received | -5,000 | -82,000 | |
Benefit obligation at end of year | 282,917,000 | 223,488,000 | 246,087,000 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Plan assets available for benefits at beginning of year | 144,514,000 | 117,939,000 | |
Actual returns (losses) on plan assets | 13,730,000 | 25,278,000 | |
Employer's contributions | 191,000 | 5,029,000 | |
Plan participants' contributions | 2,487,000 | 2,289,000 | |
Prescription Drug Rebates | 702,000 | 0 | |
Benefits paid | -5,609,000 | -6,021,000 | |
Plan assets available for benefits at end of year | 156,015,000 | 144,514,000 | 117,939,000 |
Noncurrent postretirement benefit obligation | 126,902,000 | 78,974,000 | |
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Prior service credit (cost) | 67,303,000 | 74,556,000 | |
Transition asset | 0 | 143,000 | |
Unrecognized losses | -54,034,000 | -18,006,000 | |
Deferred tax (liability) asset | -5,121,000 | -21,806,000 | |
Net losses | 8,148,000 | 34,887,000 | |
Pension and Other Postretirement Benefit Plans, Amounts that Will be Amortized from Accumulated Other Comprehensive Income (Loss) in Next Fiscal Year [Abstract] | |||
Amortization of prior service credit | -6,801,000 | ||
Amortization of unrecognized losses | 3,442,000 | ||
Estimated amount to be amortized from AOCE into net periodic postretirement benefit costs | -3,359,000 | ||
Net Unrecognized Losses Amortization Period | 15.7 | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.90% | 4.00% | 4.50% |
Expected long-term rate of return on plan assets, net of tax | 5.70% | 6.00% | 6.00% |
Initial healthcare cost trend rate | 7.50% | 8.00% | 8.50% |
Ultimate healthcare cost trend rate | 4.50% | 5.00% | 5.00% |
Year ultimate healthcare cost trend rate reached | 2026 | 2019 | 2019 |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 3.89% | 4.90% | 4.00% |
Expected long-term rate of return on plan assets, net of tax | 6.65% | 5.70% | 6.00% |
Initial healthcare cost trend rate | 7.25% | 7.50% | 8.00% |
Ultimate healthcare cost trend rate | 4.50% | 4.50% | 5.00% |
Year ultimate healthcare cost trend rate reached | 2026 | 2026 | 2019 |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates [Abstract] | |||
Effect of one percentage point increase on service and interest cost | 1,978,000 | ||
Effect of one percentage point decrease on service and interest cost | -1,613,000 | ||
Effect of one percentage point increase on postretirement benefit obligation | 36,470,000 | ||
Effect of one percentage point decrease on postretirement benefit obligation | -29,404,000 | ||
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |||
Estimated gross benefit payments, 2015 | 5,490,000 | ||
Estimated gross benefit payments, 2016 | 6,393,000 | ||
Estimated gross benefit payments, 2017 | 7,394,000 | ||
Estimated gross benefit payments, 2018 | 8,556,000 | ||
Estimated gross benefit payments, 2019 | 9,791,000 | ||
Estimated gross benefit payments, 2020-2024 | 69,854,000 | ||
Fidelity Spartan Us Equity Index Fund [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Plan assets available for benefits at end of year | 73,071,000 | 67,160,000 | |
Vanguard 500 Index Fund [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Plan assets available for benefits at end of year | 77,202,000 | 67,931,000 | |
Vanguard Total International Stock Member | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Plan assets available for benefits at end of year | 23,994,000 | 25,034,000 | |
Total Registered Investment Companies [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Plan assets available for benefits at end of year | $174,267,000 | $160,125,000 |
LEASES_Details
LEASES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Operating Leased Assets [Line Items] | |||
Operating Lease Expiration Date | 2036 | ||
2015 | $65,901,000 | ||
2016 | 49,898,000 | ||
2017 | 30,804,000 | ||
2018 | 19,500,000 | ||
2019 | 12,237,000 | ||
Thereafter | 7,813,000 | ||
Total minimum payments required | 186,153,000 | ||
Less amounts representing sublease income | -4,310,000 | ||
Operating Leases Future Minimum Payments Net of Income | 181,843,000 | ||
Operating Leases, Rent Expense | 77,000,000 | 68,000,000 | 68,000,000 |
Operating Leases, Rent Expense, Sublease Rentals | $2,000,000 | $1,000,000 | $1,000,000 |
STOCK_INCENTIVE_PLANS_Details
STOCK INCENTIVE PLANS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares of common stock available for grant under stock incentive plans (in shares) | 1,500,000 | ||
Allocated Share-based Compensation Expense | $45,000,000 | $52,000,000 | $53,000,000 |
Income tax benefits recognized in earnings for stock-based compensation expense | 15,000,000 | 17,000,000 | 18,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at January 1 (in shares) | 2,850,455 | 3,358,716 | 3,960,675 |
Granted (in shares) | 257,693 | 348,054 | 404,111 |
Exercised (in shares) | -479,452 | -805,235 | -972,015 |
Canceled or expired (in shares) | -45,892 | -51,080 | -34,055 |
Outstanding at December 31 (in shares) | 2,582,804 | 2,850,455 | 3,358,716 |
Weighted Average Price Per Share [Abstract] | |||
Outstanding at January 1, weighted average price per share (in dollars per share) | $132.67 | $109.95 | $91.53 |
Granted, weighted average price per share (in dollars per share) | $248.21 | $245.95 | $203.96 |
Exercised, weighted average price per share (in dollars per share) | $100.33 | $85.75 | $74.14 |
Canceled or expired, weighted average price per share (in dollars per share) | $199.80 | $150.15 | $105.36 |
Outstanding at December 31, weighted average price per share (in dollars per share) | $149.01 | $132.67 | $109.95 |
Options exercisable outstanding at January 1 (in shares) | 1,652,417 | 1,629,468 | 1,808,667 |
Options exercisable outstanding at December 31 (in shares) | 1,647,903 | 1,652,417 | 1,629,468 |
Stock Options Exercised [Abstract] | |||
Fair value of options exercised | 11,167,000 | 16,407,000 | 18,120,000 |
Total intrinsic value of options exercised | 71,924,000 | 124,752,000 | 126,138,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 16,115,000 | 20,219,000 | 15,551,000 |
Settlements of options exercised | 47,974,000 | 69,049,000 | 72,066,000 |
Stock Options [Member] | |||
Stock Options Exercised [Abstract] | |||
Unearned unrecognized compensation | $11,000,000 | ||
Weighted average period to recognize (in years) | 1 year 9 months 20 days |
STOCK_INCENTIVE_PLANS_Stock_Op
STOCK INCENTIVE PLANS - Stock Options Outstanding and Exercisable (Details) (USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 2,582,804 | 2,850,455 | 3,358,716 | 3,960,675 |
Options outstanding, weighted-average remaining contractual life (in years) | 5 years 8 months 17 days | |||
Options outstanding, weighted-average exercise price (in dollars per share) | $149.01 | |||
Options outstanding intrinsic value | $273,465 | |||
Options exercisable (in shares) | 1,647,903 | |||
Options exercisable, weighted-average remaining contractual life (in years) | 4 years 3 months 16 days | |||
Options exercisable, weighted-average exercise price (in dollars per share) | $102.76 | |||
Options exercisable intrinsic value | 250,702 | |||
Range 1 of Exercise Prices [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit (in dollars per share) | $52.29 | |||
Exercise price range, upper range limit (in dollars per share) | $78.86 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 308,141 | |||
Options outstanding, weighted-average remaining contractual life (in years) | 1 year 6 months 20 days | |||
Options outstanding, weighted-average exercise price (in dollars per share) | $70.19 | |||
Options outstanding intrinsic value | 56,914 | |||
Options exercisable (in shares) | 308,141 | |||
Options exercisable, weighted-average remaining contractual life (in years) | 1 year 6 months 20 days | |||
Options exercisable, weighted-average exercise price (in dollars per share) | $70.19 | |||
Options exercisable intrinsic value | 56,914 | |||
Range 2 of Exercise Prices [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit (in dollars per share) | $81.49 | |||
Exercise price range, upper range limit (in dollars per share) | $85.82 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 562,045 | |||
Options outstanding, weighted-average remaining contractual life (in years) | 3 years 7 months 20 days | |||
Options outstanding, weighted-average exercise price (in dollars per share) | $83.27 | |||
Options outstanding intrinsic value | 96,457 | |||
Options exercisable (in shares) | 562,045 | |||
Options exercisable, weighted-average remaining contractual life (in years) | 3 years 7 months 20 days | |||
Options exercisable, weighted-average exercise price (in dollars per share) | $83.27 | |||
Options exercisable intrinsic value | 96,457 | |||
Range 3 of Exercise Prices [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit (in dollars per share) | $102.26 | |||
Exercise price range, upper range limit (in dollars per share) | $124.93 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 392,796 | |||
Options outstanding, weighted-average remaining contractual life (in years) | 5 years 3 months 15 days | |||
Options outstanding, weighted-average exercise price (in dollars per share) | $107.31 | |||
Options outstanding intrinsic value | 57,970 | |||
Options exercisable (in shares) | 392,796 | |||
Options exercisable, weighted-average remaining contractual life (in years) | 5 years 3 months 15 days | |||
Options exercisable, weighted-average exercise price (in dollars per share) | $107.31 | |||
Options exercisable intrinsic value | 57,970 | |||
Range 4 of Exercise Prices [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit (in dollars per share) | $149.02 | |||
Exercise price range, upper range limit (in dollars per share) | $204.24 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 734,000 | |||
Options outstanding, weighted-average remaining contractual life (in years) | 6 years 9 months 27 days | |||
Options outstanding, weighted-average exercise price (in dollars per share) | $176.61 | |||
Options outstanding intrinsic value | 57,458 | |||
Options exercisable (in shares) | 377,252 | |||
Options exercisable, weighted-average remaining contractual life (in years) | 6 years 4 months 11 days | |||
Options exercisable, weighted-average exercise price (in dollars per share) | $150.73 | |||
Options exercisable intrinsic value | 39,295 | |||
Range 5 of Exercise Prices [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit (in dollars per share) | $235.15 | |||
Exercise price range, upper range limit (in dollars per share) | $262.14 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 585,822 | |||
Options outstanding, weighted-average remaining contractual life (in years) | 8 years 8 months 30 days | |||
Options outstanding, weighted-average exercise price (in dollars per share) | $246.93 | |||
Options outstanding intrinsic value | 4,666 | |||
Options exercisable (in shares) | 7,669 | |||
Options exercisable, weighted-average remaining contractual life (in years) | 8 years 5 months 27 days | |||
Options exercisable, weighted-average exercise price (in dollars per share) | $246.28 | |||
Options exercisable intrinsic value | $66 |
STOCK_INCENTIVE_PLANS_Fair_Val
STOCK INCENTIVE PLANS - Fair Value of Options (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
STOCK INCENTIVE PLANS [Abstract] | |||
Weighted average fair value of options granted | $53.43 | $51.30 | $43.98 |
Risk-free interest rate (in hundredths) | 2.00% | 0.90% | 1.10% |
Expected life (in years) | 6 years | 6 years | 6 years |
Expected volatility (in hundredths) | 25.00% | 25.50% | 25.90% |
Expected dividend yield (in hundredths) | 1.70% | 1.50% | 1.60% |
STOCK_INCENTIVE_PLANS_Performa
STOCK INCENTIVE PLANS - Performance Shares and Restricted Stock Units (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 57,533 | 117,979 | 192,740 |
Issued (in shares) | 32,194 | 31,553 | 28,639 |
Cancelled (in shares) | -6,835 | -7,659 | -1,666 |
Vested (in shares) | -25,656 | -84,340 | -101,734 |
Outstanding at end of period (in shares) | 57,236 | 57,533 | 117,979 |
Weighted Average Price Per Share [Abstract] | |||
Outstanding at beginning of period, weighted average price per share (in dollars per share) | $185.02 | $141.86 | $109.16 |
Issued, weighted average price per share (in dollars per share) | $242.65 | $191.36 | $177.75 |
Cancelled, weighted average price per share (in dollars per share) | $190.90 | $148.25 | $114.41 |
Vested, weighted average price per share (in dollars per share) | $177.75 | $130.35 | $90.47 |
Outstanding at end of period, weighted average price per share (in dollars per share) | $220 | $185.02 | $141.86 |
Unearned unrecognized compensation | $7 | ||
Weighted average period to recognize (in years) | 1 year 9 months 18 days | ||
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-Based Compensation Vested Fair Value | 29 | 29 | 23 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 739,717 | 978,888 | 1,119,488 |
Issued (in shares) | 103,427 | 139,529 | 152,995 |
Cancelled (in shares) | -51,410 | -54,533 | -37,972 |
Vested (in shares) | -231,383 | -324,167 | -255,623 |
Outstanding at end of period (in shares) | 560,351 | 739,717 | 978,888 |
Weighted Average Price Per Share [Abstract] | |||
Outstanding at beginning of period, weighted average price per share (in dollars per share) | $154.09 | $118.60 | $100.76 |
Issued, weighted average price per share (in dollars per share) | $248.12 | $248.28 | $204.26 |
Cancelled, weighted average price per share (in dollars per share) | $170.98 | $141.48 | $123.01 |
Vested, weighted average price per share (in dollars per share) | $123.82 | $89.62 | $88.36 |
Outstanding at end of period, weighted average price per share (in dollars per share) | $182.40 | $154.09 | $118.60 |
Unearned unrecognized compensation | $48 | ||
Weighted average period to recognize (in years) | 3 years 0 months 0 days |
STOCK_INCENTIVE_PLANS_Director
STOCK INCENTIVE PLANS - Director Stock Awards (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Director stock awards | |||
Deferred stock units (DSU) granted | $125,000 | $125,000 | $115,000 |
Directors' deferred stock unit grants | |||
Beginning balance (in shares) | 158,868 | 151,775 | 142,797 |
Dividends (in shares) | 2,602 | 2,259 | 2,273 |
Deferred fees (in shares) | 5,866 | 7,337 | 9,170 |
Retirement distribution (in shares) | -7,666 | -2,503 | -2,465 |
Unit appreciation (in shares) | 0 | 0 | 0 |
Ending balance (in shares) | 159,670 | 158,868 | 151,775 |
Beginning balance | 33,063,000 | 30,952,000 | 26,730,000 |
Dividends | 653,000 | 559,000 | 454,000 |
Deferred fees | 1,453,000 | 2,059,000 | 1,871,000 |
Retirement distribution | -1,695,000 | -507,000 | -461,000 |
Unit appreciation | 0 | 0 | 2,358,000 |
Ending balance | $33,474,000 | $33,063,000 | $30,952,000 |
CAPITAL_STOCK_Details
CAPITAL STOCK (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Treasury Stock, Shares | 42,227,178 | 40,805,281 | |
Exercise of stock options, net of 1,905, and 5,134 shares swapped in stock-for-stock exchange, respectively | -479,452 | -805,235 | -972,015 |
Common Stock [Member] | |||
Common Stock, Shares, Outstanding | 67,432,041 | 68,853,938 | 69,478,495 |
Exercise of stock options, net of 1,905, and 5,134 shares swapped in stock-for-stock exchange, respectively | 477,547 | 800,101 | |
Settlement of restricted stock units, net of 104,552 and 135,341 shares retained, respectively | 175,549 | 232,483 | |
Settlement of performance share units, net of 33,003 and 39,874 shares retained, respectively | 51,337 | 61,860 | |
Purchase of treasury shares | -2,126,330 | -1,719,001 | |
Treasury Stock [Member] | |||
Treasury Stock, Shares | 42,227,178 | 40,805,281 | 40,180,724 |
Exercise of stock options, net of 1,905, and 5,134 shares swapped in stock-for-stock exchange, respectively | -477,547 | -800,101 | |
Settlement of restricted stock units, net of 104,552 and 135,341 shares retained, respectively | -175,549 | -232,483 | |
Settlement of performance share units, net of 33,003 and 39,874 shares retained, respectively | -51,337 | -61,860 | |
Purchase of treasury shares | 2,126,330 | 1,719,001 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE EARNINGS (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Accumulated other comprehensive earnings | ($96,673,000) | $28,914,000 | ||
Reclassification of cumulative currency translation | 9,042,000 | 0 | 0 | |
Tax impact from reclassification of postretirement and other-employment related benefit plans | 2,545,000 | 1,444,000 | 0 | |
Other Comprehensive Income (Loss), Net of Tax | -135,467,000 | -40,286,000 | 73,450,000 | |
Foreign Currency Translation | ||||
Accumulated other comprehensive earnings | -122,320,000 | -7,297,000 | 65,518,000 | 60,104,000 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -124,065,000 | -72,815,000 | ||
Reclassification of cumulative currency translation | 9,042,000 | 0 | ||
Other Comprehensive Income (Loss), Net of Tax | -115,023,000 | -72,815,000 | 5,414,000 | |
Interest Rate Swap | ||||
Accumulated other comprehensive earnings | -2,185,000 | -2,971,000 | -4,161,000 | -1,616,000 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 786,000 | 1,190,000 | ||
Other Comprehensive Income (Loss), Net of Tax | 786,000 | 1,190,000 | -2,545,000 | |
Postretirement Benefit Plan | ||||
Accumulated other comprehensive earnings | 8,148,000 | 34,887,000 | 2,229,000 | -73,396,000 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -22,667,000 | 35,045,000 | ||
Reclassification of postretirement and other employment-related benefit plans | -6,617,000 | -3,831,000 | ||
Tax impact from reclassification of postretirement and other-employment related benefit plans | 2,545,000 | 1,444,000 | ||
Other Comprehensive Income (Loss), Net of Tax | -26,739,000 | 32,658,000 | 75,625,000 | |
Other Employment-related Benefit Plans | ||||
Accumulated other comprehensive earnings | -3,302,000 | -8,811,000 | -7,492,000 | -2,448,000 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -1,462,000 | -1,319,000 | ||
Reclassification of postretirement and other employment-related benefit plans | 9,295,000 | 0 | ||
Tax impact from reclassification of postretirement and other-employment related benefit plans | -2,324,000 | 0 | ||
Other Comprehensive Income (Loss), Net of Tax | 5,509,000 | -1,319,000 | -5,044,000 | |
Total AOCE (before NCI) | ||||
Accumulated other comprehensive earnings | -119,659,000 | 15,808,000 | 56,094,000 | -17,356,000 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -147,408,000 | -37,899,000 | ||
Total reclassifications related to foreign currency translation and benefit plans | 11,720,000 | -3,831,000 | ||
Total tax impact from all reclassifications | 221,000 | 1,444,000 | ||
Other Comprehensive Income (Loss), Net of Tax | -135,467,000 | -40,286,000 | 73,450,000 | |
Foreign Currency Translation Attributable to Noncontrolling Interests | ||||
Accumulated other comprehensive earnings | -22,986,000 | -13,106,000 | 2,516,000 | 11,382,000 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -9,880,000 | -15,622,000 | ||
Other Comprehensive Income (Loss), Net of Tax | -9,880,000 | -15,622,000 | -8,866,000 | |
AOCE Attributable to W.W. Grainger, Inc. | ||||
Accumulated other comprehensive earnings | -96,673,000 | 28,914,000 | 53,578,000 | -28,738,000 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -137,528,000 | -22,277,000 | ||
Total reclassifications related to foreign currency translation and benefit plans | 11,720,000 | -3,831,000 | ||
Total tax impact from all reclassifications | 221,000 | 1,444,000 | ||
Other Comprehensive Income (Loss), Net of Tax | ($125,587,000) | ($24,664,000) | $82,316,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Current provision: | |||
Federal | $437,648,000 | $398,593,000 | $324,848,000 |
State | 47,199,000 | 42,526,000 | 40,508,000 |
Foreign | 43,088,000 | 52,277,000 | 53,564,000 |
Total current | 527,935,000 | 493,396,000 | 418,920,000 |
Deferred Income Tax (Benefit) Expense | -5,845,000 | -13,546,000 | 20,000 |
Total provision | 522,090,000 | 479,850,000 | 418,940,000 |
Undistributed Foreign Subsidiary Earnings | 464,000,000 | ||
Interest expense | -2,000,000 | -2,000,000 | -1,000,000 |
Interest accrued | $4,000,000 | $4,000,000 | $2,000,000 |
INCOME_TAXES_Net_Earnings_Befo
INCOME TAXES - Net Earnings Before Income Taxes by Geographical Area (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net earnings before income taxes by geographical area | |||
United States | $1,299,523 | $1,167,558 | $982,220 |
Foreign | 34,863 | 120,041 | 135,569 |
Earnings before income taxes | $1,334,386 | $1,287,599 | $1,117,789 |
INCOME_TAXES_Income_Tax_Effect
INCOME TAXES - Income Tax Effects of Temporary Differences (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred tax assets: | ||
Inventory | $30,471,000 | $35,381,000 |
Accrued expenses | 44,362,000 | 38,368,000 |
Accrued employment-related benefits | 139,392,000 | 123,555,000 |
Foreign operating loss carryforwards | 61,219,000 | 70,204,000 |
Other | 12,748,000 | 30,862,000 |
Deferred tax assets | 288,192,000 | 298,370,000 |
Less valuation allowance | -56,876,000 | -62,825,000 |
Deferred tax assets, net of valuation allowance | 231,316,000 | 235,545,000 |
Deferred tax liabilities: | ||
Property, buildings and equipment | -48,044,000 | -38,210,000 |
Intangibles | -101,958,000 | -119,923,000 |
Software | -21,975,000 | -17,492,000 |
Deferred Tax Liabilities, Prepaid Expenses | 16,673,000 | 18,945,000 |
Other | -12,196,000 | -17,378,000 |
Deferred tax liabilities | -200,846,000 | -211,948,000 |
Net deferred tax asset | 30,470,000 | 23,597,000 |
The net deferred tax asset is classified as follows: | ||
Current assets | 61,387,000 | 75,819,000 |
Noncurrent assets | 16,718,000 | 16,209,000 |
Noncurrent liabilities (foreign) | -47,635,000 | -68,431,000 |
Operating loss carryforwards related primarily from foreign operations | 236,000,000 | |
Valuation Allowance, Deferred Tax Asset, Change in balance | $5,900,000 |
INCOME_TAXES_Reconciliation_of
INCOME TAXES - Reconciliation of Income Tax Expense with Federal Income Taxes at the Statutory Rate (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of income tax expense with federal income taxes at the statutory rate | |||
Federal income tax at the 35% statutory rate | $467,035 | $450,660 | $391,226 |
State income taxes, net of federal income tax benefit | 31,263 | 27,430 | 26,099 |
Other - net | 23,792 | 1,760 | 1,615 |
Total provision | $522,090 | $479,850 | $418,940 |
Effective tax rate | 39.10% | 37.30% | 37.50% |
INCOME_TAXES_Changes_in_Liabil
INCOME TAXES - Changes in Liability for Tax Uncertainties, Excluding Interest (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Changes in liability for tax uncertainties, excluding interest | |||
Balance at beginning of year | $40,317,000 | $40,937,000 | $22,760,000 |
Additions for tax positions related to the current year | 11,545,000 | 8,396,000 | 11,369,000 |
Additions for tax positions of prior years | 5,318,000 | 2,308,000 | 8,977,000 |
Reductions for tax positions of prior years | -4,109,000 | -7,242,000 | -1,447,000 |
Reductions due to statute lapse | -1,271,000 | -18,000 | -737,000 |
Settlements, audit payments, refunds - net | -6,674,000 | -4,064,000 | 15,000 |
Balance at end of year | 45,126,000 | 40,317,000 | 40,937,000 |
Liability for tax uncertainties | $9,000,000 | $8,000,000 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Notes to Financial Statements [Abstract] | |||||||||||
Net earnings attributable to W.W. Grainger, Inc. as reported | $148,839 | $230,322 | $205,915 | $216,653 | $156,749 | $210,789 | $217,660 | $211,838 | $801,729 | $797,036 | $689,881 |
Distributed earnings available to participating securities | 3,154 | 3,304 | 3,641 | ||||||||
Undistributed earnings available to participating securities | -6,370 | -8,348 | -8,704 | ||||||||
Numerator for basic earnings per share - Undistributed and distributed earnings available to common shareholders | 792,205 | 785,384 | 677,536 | ||||||||
Undistributed earnings allocated to participating securities | 6,370 | 8,348 | 8,704 | ||||||||
Undistributed earnings reallocated to participating securities | -6,290 | -8,218 | -8,540 | ||||||||
Numerator for diluted earnings per share - Undistributed and distributed earnings available to common shareholders | $792,285 | $785,514 | $677,700 | ||||||||
Denominator for basic earnings per share - weighted average shares (in shares) | 68,334,322 | 69,455,507 | 69,811,881 | ||||||||
Effect of dilutive securities (in shares) | 871,422 | 1,120,925 | 1,369,852 | ||||||||
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities (in shares) | 69,205,744 | 70,576,432 | 71,181,733 | ||||||||
Earnings per share Two-class method | |||||||||||
Basic (in dollars per share) | $2.17 | $3.33 | $2.97 | $3.11 | $2.24 | $2.99 | $3.08 | $2.99 | $11.59 | $11.31 | $9.71 |
Diluted (in dollars per share) | $2.14 | $3.30 | $2.94 | $3.07 | $2.20 | $2.95 | $3.03 | $2.94 | $11.45 | $11.13 | $9.52 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Service Fee Revenue (approximately) | 1.00% | ||||||||||
Summarized Information: | |||||||||||
Operating Income | $266,514 | $385,513 | $340,751 | $354,339 | $256,762 | $346,715 | $350,072 | $343,305 | $1,347,117 | $1,296,854 | $1,131,125 |
Total assets | 5,284,252 | 5,266,328 | 5,284,252 | 5,266,328 | 5,014,598 | ||||||
Depreciation, Depletion and Amortization | 190,171 | 164,902 | 145,612 | ||||||||
Net sales | 2,510,959 | 2,562,263 | 2,506,104 | 2,385,627 | 2,377,232 | 2,398,530 | 2,381,561 | 2,280,435 | 9,964,953 | 9,437,758 | 8,950,045 |
Additions to Long-Lived Assets | 403,804 | 277,600 | 257,924 | ||||||||
Long-lived Assets | 1,472,724 | 1,315,832 | 1,472,724 | 1,315,832 | 1,216,482 | ||||||
United States [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | 7,714,676 | 7,285,052 | 6,838,593 | ||||||||
Canada [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | 1,075,450 | 1,113,985 | 1,105,419 | ||||||||
Other Businesses [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | 1,174,827 | 1,038,721 | 1,006,033 | ||||||||
Segment Balances before intersegment eliminations and consolidations [Member] | |||||||||||
Summarized Information: | |||||||||||
Operating Income | 1,494,065 | 1,440,542 | 1,280,423 | ||||||||
Total assets | 2,921,850 | 2,796,718 | 2,921,850 | 2,796,718 | 2,619,922 | ||||||
Depreciation, Depletion and Amortization | 171,830 | 150,455 | 132,489 | ||||||||
Net sales | 10,184,015 | 9,568,470 | 9,038,386 | ||||||||
Additions to Long-Lived Assets | 381,306 | 264,818 | 250,926 | ||||||||
Segment Balances before intersegment eliminations and consolidations [Member] | United States [Member] | |||||||||||
Summarized Information: | |||||||||||
Operating Income | 1,444,288 | 1,304,175 | 1,132,722 | ||||||||
Total assets | 2,181,521 | 2,045,564 | 2,181,521 | 2,045,564 | 1,884,102 | ||||||
Depreciation, Depletion and Amortization | 136,081 | 116,392 | 99,229 | ||||||||
Net sales | 7,926,075 | 7,413,712 | 6,925,842 | ||||||||
Additions to Long-Lived Assets | 243,251 | 177,046 | 182,985 | ||||||||
Segment Balances before intersegment eliminations and consolidations [Member] | Canada [Member] | |||||||||||
Summarized Information: | |||||||||||
Operating Income | 87,583 | 128,768 | 127,412 | ||||||||
Total assets | 394,342 | 392,147 | 394,342 | 392,147 | 387,915 | ||||||
Depreciation, Depletion and Amortization | 15,305 | 14,309 | 14,058 | ||||||||
Net sales | 1,075,754 | 1,114,285 | 1,105,782 | ||||||||
Additions to Long-Lived Assets | 106,918 | 63,821 | 46,330 | ||||||||
Segment Balances before intersegment eliminations and consolidations [Member] | Other Businesses [Member] | |||||||||||
Summarized Information: | |||||||||||
Operating Income | -37,806 | 7,599 | 20,289 | ||||||||
Total assets | 345,987 | 359,007 | 345,987 | 359,007 | 347,905 | ||||||
Depreciation, Depletion and Amortization | 20,444 | 19,754 | 19,202 | ||||||||
Net sales | 1,182,186 | 1,040,473 | 1,006,762 | ||||||||
Additions to Long-Lived Assets | 31,137 | 23,951 | 21,611 | ||||||||
Intersegment Eliminations [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | -219,062 | -130,712 | -88,341 | ||||||||
Intersegment Eliminations [Member] | United States [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | -211,399 | -128,660 | -87,249 | ||||||||
Intersegment Eliminations [Member] | Canada [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | -304 | -300 | -363 | ||||||||
Intersegment Eliminations [Member] | Other Businesses [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | -7,359 | -1,752 | -729 | ||||||||
Segment other current and noncurrent assets [Member] | |||||||||||
Summarized Information: | |||||||||||
Total assets | 2,113,900 | 2,118,298 | 2,113,900 | 2,118,298 | 1,967,480 | ||||||
Elimination and Unallocated in consolidation [Member] | |||||||||||
Summarized Information: | |||||||||||
Operating Income | -146,948 | -143,688 | -149,298 | ||||||||
Total assets | 248,502 | 351,312 | 248,502 | 351,312 | 427,196 | ||||||
Depreciation, Depletion and Amortization | 18,341 | 14,447 | 13,123 | ||||||||
Additions to Long-Lived Assets | 22,498 | 12,782 | 6,998 | ||||||||
Geographical Information: | United States [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | 7,780,382 | 7,290,746 | 6,786,361 | ||||||||
Long-lived Assets | 1,109,175 | 1,004,806 | 1,109,175 | 1,004,806 | 944,400 | ||||||
Geographical Information: | Canada [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | 1,074,660 | 1,126,559 | 1,120,470 | ||||||||
Long-lived Assets | 253,466 | 176,491 | 253,466 | 176,491 | 136,644 | ||||||
Geographical Information: | Other Foreign Countries [Member] | |||||||||||
Summarized Information: | |||||||||||
Net sales | 1,109,911 | 1,020,453 | 1,043,214 | ||||||||
Long-lived Assets | $110,083 | $134,535 | $110,083 | $134,535 | $135,438 |
SELECTED_QUARTERLY_FINANCIAL_D2
SELECTED QUARTERLY FINANCIAL DATA (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales | $2,510,959 | $2,562,263 | $2,506,104 | $2,385,627 | $2,377,232 | $2,398,530 | $2,381,561 | $2,280,435 | $9,964,953 | $9,437,758 | $8,950,045 |
Cost of merchandise sold | 1,456,158 | 1,459,479 | 1,425,418 | 1,309,656 | 1,370,835 | 1,347,164 | 1,334,577 | 1,248,699 | 5,650,711 | 5,301,275 | 5,033,885 |
Gross profit | 1,054,801 | 1,102,784 | 1,080,686 | 1,075,971 | 1,006,397 | 1,051,366 | 1,046,984 | 1,031,736 | 4,314,242 | 4,136,483 | 3,916,160 |
Warehousing, marketing and administrative expenses | 788,287 | 717,271 | 739,935 | 721,632 | 749,635 | 704,651 | 696,912 | 688,431 | 2,967,125 | 2,839,629 | 2,785,035 |
Operating earnings | 266,514 | 385,513 | 340,751 | 354,339 | 256,762 | 346,715 | 350,072 | 343,305 | 1,347,117 | 1,296,854 | 1,131,125 |
Net earnings attributable to W.W. Grainger, Inc. | $148,839 | $230,322 | $205,915 | $216,653 | $156,749 | $210,789 | $217,660 | $211,838 | $801,729 | $797,036 | $689,881 |
Earnings per share - basic | $2.17 | $3.33 | $2.97 | $3.11 | $2.24 | $2.99 | $3.08 | $2.99 | $11.59 | $11.31 | $9.71 |
Earnings per share - diluted | $2.14 | $3.30 | $2.94 | $3.07 | $2.20 | $2.95 | $3.03 | $2.94 | $11.45 | $11.13 | $9.52 |
CONTINGENCIES_AND_LEGAL_MATTER1
CONTINGENCIES AND LEGAL MATTERS (Details) | 12 Months Ended | |
Dec. 31, 2014 | Jan. 16, 2015 | |
Loss Contingencies [Line Items] | ||
Number of new plaintiffs in asbestos and or silica cases filed against the company | 68 | |
Number of plaintiffs in asbestos and or silica lawsuits whose allegations against the company were dismissed | 1,293 | |
Number of plaintiffs in asbestos and or silica cases filed against the company | 1,376 |