W.W. Grainger (GWW) 10-Q 30 Jul 15 2015 Q2 Quarterly report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION - Jun. 30, 2015 - USD ($)	Total
Document Information [Line Items]
Entity Registrant Name	GRAINGER W W INC
Entity Central Index Key	277,135
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding	65,975,137
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float	$ 14,934,345,621

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net sales	$ 2,522,565	$ 2,506,104	$ 4,962,226	$ 4,891,731
Cost of merchandise sold	1,449,133	1,425,418	2,795,052	2,735,074
Gross profit	1,073,432	1,080,686	2,167,174	2,156,657
Warehousing, marketing and administrative expenses	716,715	739,935	1,459,209	1,461,567
Operating earnings	356,717	340,751	707,965	695,090
Other income and (expense):
Interest income	277	413	469	1,053
Interest expense	(4,184)	(2,757)	(5,819)	(5,620)
Loss from equity method investment	(4,302)	0	(4,302)	0
Other non-operating income	484	177	726	345
Other non-operating expense	(306)	(159)	(2,714)	(830)
Total other expense	(8,031)	(2,326)	(11,640)	(5,052)
Earnings before income taxes	348,686	338,425	696,325	690,038
Income taxes	123,451	129,348	256,944	261,906
Net earnings	225,235	209,077	439,381	428,132
Less: Net earnings attributable to noncontrolling interest	4,687	3,162	7,818	5,564
Net earnings attributable to W.W. Grainger, Inc.	$ 220,548	$ 205,915	$ 431,563	$ 422,568
Earnings per share:
Basic (in dollars per share)	$ 3.28	$ 2.97	$ 6.38	$ 6.08
Diluted (in dollars per share)	$ 3.25	$ 2.94	$ 6.32	$ 6
Weighted average number of shares outstanding:
Basic (in shares)	66,652,130	68,453,602	66,939,110	68,576,232
Diluted (in shares)	67,317,131	69,341,885	67,647,689	69,509,125
Cash dividends paid per share (in dollars per share)	$ 1.17	$ 1.08	$ 2.25	$ 2.01

CONDENSED CONSOLIDATED STATEME3

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net earnings	$ 225,235	$ 209,077	$ 439,381	$ 428,132
Other comprehensive earnings (losses):
Foreign currency translation adjustments, net of tax benefit of $0, $2,098, $0 and $75, respectively	9,061	23,309	(66,954)	8,175
Net investment hedge, net of tax (expense) benefit of $0, $(1,987), $0, and $255, respectively	0	3,185	0	(409)
Net foreign currency translation (loss)	9,061	26,494	(66,954)	7,766
Reclassification adjustments related to amortization, net of tax benefit (expense) of $512, $(1,687), $1,021 and $(1,051), respectively	(810)	6,031	(1,623)	5,013
Derivative instrument change in fair value of cash flow hedge	245	(9)	727	23
Comprehensive earnings, net of tax	233,731	241,593	371,531	440,934
Less: Comprehensive earnings (losses) attributable to noncontrolling interest
Net earnings	4,687	3,162	7,818	5,564
Foreign currency translation adjustments	(1,509)	1,551	(1,802)	3,030
Comprehensive earnings attributable to W.W. Grainger, Inc.	$ 230,553	$ 236,880	$ 365,515	$ 432,340

CONDENSED CONSOLIDATED STATEME4

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (UNAUDITED) (PARENTHETICALS) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Foreign currency translation adjustments, tax benefit	$ 0	$ 2,098,000	$ 0	$ 75,000
Net investment hedge tax (expense) benefit	0	(1,987,000)	0	255,000
Tax benefit (expense) from defined postretirement benefit plan reclassification adjustment	$ 512,000	$ (1,687,000)	$ 1,021,000	$ (1,051,000)

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 819,786	$ 226,644
Accounts receivable (less allowances for doubtful accounts of $20,600 and $22,121, respectively)	1,197,856	1,172,924
Inventories - net	1,302,977	1,356,396
Prepaid expenses and other assets	95,008	102,669
Deferred income taxes	60,295	61,387
Prepaid income taxes	47,824	47,529
Total current assets	3,523,746	2,967,549
PROPERTY, BUILDINGS AND EQUIPMENT	3,150,247	3,115,130
Less: Accumulated depreciation and amortization	1,825,696	1,790,784
Property, buildings and equipment - net	1,324,551	1,324,346
DEFERRED INCOME TAXES	17,360	16,718
GOODWILL	486,612	506,905
OTHER ASSETS AND INTANGIBLES - NET	474,640	467,531
TOTAL ASSETS	5,826,909	5,283,049
CURRENT LIABILITIES
Short-term debt	30,495	56,896
Current maturities of long-term debt	26,275	23,404
Trade accounts payable	498,416	554,088
Accrued compensation and benefits	155,048	191,696
Accrued contributions to employees' profit sharing plans	70,130	178,076
Accrued expenses	255,910	245,300
Income taxes payable	10,828	12,256
Total current liabilities	1,047,102	1,261,716
LONG-TERM DEBT (less current maturities)	1,348,642	403,333
DEFERRED INCOME TAXES AND TAX UNCERTAINTIES	95,464	95,455
EMPLOYMENT-RELATED AND OTHER NON-CURRENT LIABILITIES	236,263	238,444
SHAREHOLDERS' EQUITY
Cumulative Preferred Stock - $5 par value - 12,000,000 shares authorized; none issued nor outstanding	0	0
Common Stock - $0.50 par value - 300,000,000 shares authorized; issued 109,659,219 shares	54,830	54,830
Additional contributed capital	975,147	948,340
Retained earnings	6,615,081	6,335,990
Accumulated other comprehensive losses	(162,721)	(96,673)
Treasury stock, at cost - 43,684,082 and 42,227,178 shares, respectively	(4,461,822)	(4,032,615)
Total W.W. Grainger, Inc. shareholders' equity	3,020,515	3,209,872
Noncontrolling Interest	78,923	74,229
Total shareholders' equity	3,099,438	3,284,101
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 5,826,909	$ 5,283,049

CONDENSED CONSOLIDATED BALANCE6

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICALS) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Allowance for doubtful accounts	$ 20,600,000	$ 22,121,000
Cumulative preferred stock, par value	$ 5	$ 5
Cumulative preferred stock, shares authorized	12,000,000	12,000,000
Cumulative preferred stock, shares issued	0	0
Cumulative preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.5	$ 0.5
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	43,684,082	42,227,178

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 439,381	$ 428,132
Provision for losses on accounts receivable	4,630	4,782
Deferred income taxes and tax uncertainties	1,995	(9,605)
Depreciation and amortization	106,937	93,796
Stock-based compensation	27,043	28,988
(Gains) losses from non-cash charges and sales of assets	(51)	14,576
Losses from equity method investment	4,302	0
Change in operating assets and liabilities - net of business acquisitions and divestitures:
Accounts receivable	(50,586)	(98,574)
Inventories	26,075	(13,497)
Prepaid expenses and other current assets	6,929	(4,610)
Trade accounts payable	(29,144)	2,852
Accrued liabilities	(169,123)	(127,930)
Current income taxes payable	(847)	1,601
Employment-related and other non-current liabilities	4,231	6,712
Other - net	(2,267)	1,243
Net cash provided by operating activities	369,505	328,466
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, buildings and equipment	(170,873)	(156,210)
Proceeds from sales of property, buildings and equipment	10,119	5,416
Equity method investment	(10,190)	0
Net cash received for business divestitures	1,114	19,199
Other - net	(567)	0
Net cash used in investing activities	(170,397)	(131,595)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under lines of credit	26,842	44,686
Payments against lines of credit	(46,649)	(64,634)
Proceeds from issuance of long-term debt and commercial paper borrowings	995,880	54,997
Payments of long-term debt and commercial paper	(30,597)	(9,538)
Proceeds from stock options exercised	35,549	31,816
Excess tax benefits from stock-based compensation	17,106	22,177
Purchase of treasury stock	(442,595)	(235,847)
Cash dividends paid	(153,906)	(140,885)
Net cash provided by (used in) financing activities	401,630	(297,228)
Exchange rate effect on cash and cash equivalents	(7,596)	1,420
NET CHANGE IN CASH AND CASH EQUIVALENTS	593,142	(98,937)
Cash and cash equivalents at beginning of period	226,644	430,644
Cash and cash equivalents at end of period	$ 819,786	$ 331,707

BACKGROUND AND BASIS OF PRESENT

BACKGROUND AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BACKGROUND AND BASIS OF PRESENTATION	BACKGROUND AND BASIS OF PRESENTATION W.W. Grainger, Inc. is a broad-line distributor of maintenance, repair and operating supplies, and other related products and services used by businesses and institutions. W.W. Grainger, Inc.’s operations are primarily in the United States and Canada, with a presence in Europe, Asia and Latin America. In this report, the words “Company” or “Grainger” mean W.W. Grainger, Inc. and its subsidiaries. The Condensed Consolidated Financial Statements of the Company and the related notes are unaudited and should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC). The Condensed Consolidated Balance Sheet as of December 31, 2014 has been derived from the audited consolidated financial statements at that date, but does not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited financial information reflects all adjustments (primarily consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of the statements contained herein.

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS	6 Months Ended
	Jun. 30, 2015
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
NEW ACCOUNTING STANDARDS	NEW ACCOUNTING STANDARDS In February 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis . This ASU which is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015, changes the consolidation analysis required under U.S. GAAP for limited partnerships and other variable interest entities. Early adoption is permitted and the ASU allows for either retrospective or modified retrospective application. This ASU is not expected to have a material impact on the Company's consolidated financial statements. In July 2015, the FASB announced a one-year delay in the effective date of ASU 2014-09, Revenue from Contracts with Customers. The standard will now be effective for interim and annual periods beginning after December 15, 2017. The standard also permits adoption as early as the original effective date, which was for interim and annual periods beginning after December 15, 2016. This ASU is not expected to have a material impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs . This ASU which is effective for fiscal years and interim periods beginning after December 15, 2015, changes the presentation of debt issuance costs in financial statements as a direct deduction from the related debt liability rather than as an asset. Early adoption is permitted and retrospective application is required. Effective June 30, 2015, the Company has adopted ASU 2015-03 and the Condensed Consolidated Balance Sheet was retroactively restated under the new presentation. The adoption of ASU 2015-03 did not have a material impact to the Company's consolidated financial statements, as existing debt issuance costs were immaterial. In April 2015, the FASB issued ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU which is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015, provides guidance to customers about whether a cloud computing arrangement includes a software license. Early adoption is permitted and the ASU allows for either retrospective or prospective application. This ASU is not expected to have a material impact on the Company's consolidated financial statements.

DIVIDEND

DIVIDEND	6 Months Ended
	Jun. 30, 2015
Dividends [Abstract]
DIVIDEND	DIVIDEND On July 29, 2015, the Company’s Board of Directors declared a quarterly dividend of $1.17 per share, payable September 1, 2015 , to shareholders of record on August 10, 2015 .

LONG-TERM DEBT

LONG-TERM DEBT	6 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
LONG-TERM DEBT	LONG-TERM DEBT On June 11, 2015 , the Company issued $1 billion of unsecured 4.60% Senior Notes (the "Notes") that mature on June 15, 2045 . The Notes require no principal payments until the maturity date and interest is payable semi-annually on June 15 and December 15, beginning on December 15, 2015. Prior to December 15, 2044, the Company may redeem the Notes in whole at any time or in part from time to time at a “make-whole” redemption price. This redemption price is calculated by reference to the then current yield on a US treasury security with a maturity comparable to the remaining term of the Notes plus 25 basis points, together with accrued and unpaid interest, if any, to the redemption date. On or after December 15, 2044, the Company may redeem the Notes in whole at any time or in part from time to time at 100% of their principal amount, together with accrued and unpaid interest, if any, to the redemption date. Costs of approximately $10 million associated with the issuance of the Notes, representing underwriting fees and other expenses, have been recorded as a contra-liability within Long-term debt and will be amortized to interest expense over the term of the Notes. The approximate fair value of the Company's Notes is $1 billion as of June 30, 2015, and approximates the carrying amount. The estimated fair value of the Company’s Notes was based on available external pricing data and current market rates for similar debt instruments, among other factors, and are classified as level 2 inputs within the fair value hierarchy.

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS	6 Months Ended
	Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
DERIVATIVE INSTRUMENTS	DERIVATIVE INSTRUMENTS The Company uses derivative instruments to manage a portion of exposures to fluctuations in interest rates and foreign currency exchange rates. The Company does not enter into derivative financial instruments for trading or speculative purposes. The fair values of these instruments are determined by using quoted market forward rates (level 2 inputs) and reflect the present value of the amount that the Company would pay for contracts involving the same notional amounts and maturity dates. These instruments qualify for hedge accounting and the changes in fair value are reported as a component of other comprehensive earnings (losses) net of tax effects. As of June 30, 2015 and December 31, 2014, the fair value of the Company's interest rate swap included on the balance sheet as a liability under Employment-related and other noncurrent liabilities was $1 million and $2 million , respectively. The purpose of the interest rate swap is to partially hedge the future interest expense of the euro-denominated term loan entered into to fund a portion of the Fabory acquisition in 2011. The swap matures in August 2016 . All remaining derivative instruments were immaterial individually and in the aggregate as of June 30, 2015 and December 31, 2014.

EQUITY METHOD INVESTMENT

EQUITY METHOD INVESTMENT	6 Months Ended
	Jun. 30, 2015
Equity Method Investments and Joint Ventures [Abstract]
EQUITY METHOD INVESTMENT	EQUITY METHOD INVESTMENT In May 2015, the Company invested in a limited liability company (“LLC”) established to produce refined coal, which is then sold to a utility to produce electricity. The production and sale of refined coal is eligible for renewable energy tax credits under Section 45 of the Internal Revenue Code. Under the terms of the investment, effective control lies with a co-investor who manages the day-to-day operations of the entity. The Company will fund its share of operating expenses of the entity through January 2019 and receive tax credits in proportion to its equity investment. The investment will be accounted for under the equity method of accounting. As of June 30, 2015, the investment balance was $6 million and is included on the balance sheet under Other assets and intangibles-net. During the period, the Company recorded $4 million in equity losses and the tax benefit of energy tax credits is reflected in the Company’s effective tax rate.

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS	6 Months Ended
	Jun. 30, 2015
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]
EMPLOYEE BENEFITS - POSTRETIREMENT	EMPLOYEE BENEFITS - POSTRETIREMENT The Company has a postretirement healthcare benefits plan that provides coverage for a majority of its United States employees hired prior to January 1, 2013, and their dependents should they elect to maintain such coverage upon retirement. Covered employees become eligible for participation when they qualify for retirement while working for the Company. Participation in the plan is voluntary and requires participants to make contributions toward the cost of the plan, as determined by the Company. The net periodic benefit costs charged to operating expenses, which are valued at the measurement date of January 1 and recognized evenly throughout the year, consisted of the following components (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Service cost $ 2,532 $ 2,252 $ 5,064 $ 4,503 Interest cost 2,412 2,637 4,824 5,274 Expected return on assets (2,594 ) (2,060 ) (5,188 ) (4,119 ) Amortization of transition asset — (35 ) — (71 ) Amortization of unrecognized losses 378 195 756 390 Amortization of prior service credits (1,700 ) (1,814 ) (3,400 ) (3,627 ) Net periodic benefit costs $ 1,028 $ 1,175 $ 2,056 $ 2,350 The Company has established a Group Benefit Trust to fund the plan and process benefit payments. The funding of the trust is an estimated amount which is intended to allow the maximum deductible contribution under the Internal Revenue Code of 1986 (IRC), as amended. There are no minimum funding requirements and the Company intends to follow its practice of funding the maximum deductible contribution under the IRC. During the three and six months ended June 30, 2015, the Company contributed $1.7 million and $2.1 million , respectively, to the trust.

SEGMENT INFORMATION

SEGMENT INFORMATION	6 Months Ended
	Jun. 30, 2015
Segment Reporting [Abstract]
SEGMENT INFORMATION	SEGMENT INFORMATION The Company has two reportable segments: the United States and Canada. The United States operating segment reflects the results of the Company's U.S. business. The Canada operating segment reflects the results for Acklands – Grainger Inc., the Company’s Canadian business. Other businesses include Zoro, the single channel business in the United States, and operations in Europe, Asia and Latin America. These other businesses individually do not meet the definition of a reportable segment. Operating segments generate revenue almost exclusively through the distribution of maintenance, repair and operating supplies, as service revenues account for less than 1% of total revenues for each operating segment. Following is a summary of segment results (in thousands of dollars): Three Months Ended June 30, 2015 United States Canada Other Businesses Total Total net sales $ 2,030,633 $ 239,466 $ 318,898 $ 2,588,997 Intersegment net sales (65,394 ) (17 ) (1,021 ) (66,432 ) Net sales to external customers $ 1,965,239 $ 239,449 $ 317,877 $ 2,522,565 Segment operating earnings $ 369,533 $ 9,499 $ 15,158 $ 394,190 Three Months Ended June 30, 2014 United States Canada Other Businesses Total Total net sales $ 1,992,955 $ 264,046 $ 298,926 $ 2,555,927 Intersegment net sales (49,358 ) (42 ) (423 ) (49,823 ) Net sales to external customers $ 1,943,597 $ 264,004 $ 298,503 $ 2,506,104 Segment operating earnings $ 365,099 $ 19,212 $ (456 ) $ 383,855 Six Months Ended June 30, 2015 United States Canada Other Businesses Total Total net sales $ 4,002,088 $ 473,996 $ 616,697 $ 5,092,781 Intersegment net sales (128,585 ) (53 ) (1,917 ) (130,555 ) Net sales to external customers $ 3,873,503 $ 473,943 $ 614,780 $ 4,962,226 Segment operating earnings $ 735,622 $ 18,886 $ 24,684 $ 779,192 Six Months Ended June 30, 2014 United States Canada Other Businesses Total Total net sales $ 3,890,265 $ 518,342 $ 573,832 $ 4,982,439 Intersegment net sales (90,225 ) (88 ) (395 ) (90,708 ) Net sales to external customers $ 3,800,040 $ 518,254 $ 573,437 $ 4,891,731 Segment operating earnings $ 718,786 $ 40,508 $ 8,019 $ 767,313 United States Canada Other Businesses Total Segment assets: June 30, 2015 $ 2,188,815 $ 348,508 $ 356,992 $ 2,894,315 December 31, 2014 $ 2,181,521 $ 394,342 $ 345,987 $ 2,921,850 Following are reconciliations of segment information with the consolidated totals per the financial statements (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Operating earnings: Total operating earnings for operating segments $ 394,190 $ 383,855 $ 779,192 $ 767,313 Unallocated expenses and eliminations (37,473 ) (43,104 ) (71,227 ) (72,223 ) Total consolidated operating earnings $ 356,717 $ 340,751 $ 707,965 $ 695,090 June 30, 2015 Dec 31, 2014 Assets: Total assets for operating segments $ 2,894,315 $ 2,921,850 Other current and non-current assets 2,069,484 2,113,900 Unallocated assets 863,110 247,299 Total consolidated assets $ 5,826,909 $ 5,283,049 Assets for operating segments include net accounts receivable and first-in, first-out inventory which are reported to the Company's Chief Operating Decision Maker. Other current and non-current assets include all other asset balances for the operating segments. Unallocated expenses and unallocated assets primarily relate to the Company headquarter's support services, which are not part of any business segment, as well as intercompany eliminations. Unallocated expenses include payroll and benefits, depreciation and other costs associated with headquarters-related support services. Unallocated assets include non-operating cash and cash equivalents, certain prepaid expenses and property, buildings and equipment-net. Unallocated assets increased by $616 million at June 30, 2015 compared to December 31, 2014, primarily due to increased cash balances from the issuance of $1 billion in long-term debt. Intersegment net sales for the U.S. segment increased by $38 million for the six months of 2015 compared to the prior year, driven by increased sales from the U.S. business to Zoro. The U.S. business' supply chain network is Zoro's primary source of inventory. Other current and non-current assets decreased by $44 million at June 30, 2015 compared to December 31, 2014, primarily due to lower goodwill and intangible balances, as a result of foreign currency translation.

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
EARNINGS PER SHARE	EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share under the two-class method (in thousands of dollars, except for share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Net earnings attributable to W.W. Grainger, Inc. as reported $ 220,548 $ 205,915 $ 431,563 $ 422,568 Distributed earnings available to participating securities (742 ) (727 ) (1,510 ) (1,562 ) Undistributed earnings available to participating securities (1,418 ) (1,666 ) (2,879 ) (3,765 ) Numerator for basic earnings per share – Undistributed and distributed earnings available to common shareholders 218,388 203,522 427,174 417,241 Undistributed earnings allocated to participating securities 1,418 1,666 2,879 3,765 Undistributed earnings reallocated to participating securities (1,404 ) (1,645 ) (2,850 ) (3,716 ) Numerator for diluted earnings per share – Undistributed and distributed earnings available to common shareholders $ 218,402 $ 203,543 $ 427,203 $ 417,290 Denominator for basic earnings per share – weighted average shares 66,652,130 68,453,602 66,939,110 68,576,232 Effect of dilutive securities 665,001 888,283 708,579 932,893 Denominator for diluted earnings per share – weighted average shares adjusted for dilutive securities 67,317,131 69,341,885 67,647,689 69,509,125 Earnings per share two-class method Basic $ 3.28 $ 2.97 $ 6.38 $ 6.08 Diluted $ 3.25 $ 2.94 $ 6.32 $ 6.00

CONTINGENCIES AND LEGAL MATTERS

CONTINGENCIES AND LEGAL MATTERS	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES AND LEGAL MATTERS	CONTINGENCIES AND LEGAL MATTERS From time to time the Company is involved in various legal and administrative proceedings that are incidental to its business, including claims related to product liability, general negligence, contract disputes, environmental issues, wage and hour laws, intellectual property, employment practices, regulatory compliance or other matters and actions brought by employees, consumers, competitors, suppliers or governmental entities. As a government contractor selling to federal, state and local governmental entities, the Company is also subject to governmental or regulatory inquiries or audits or other proceedings, including those related to pricing compliance. It is not expected that the ultimate resolution of any of these matters will have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position or results of operations.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS On July 30, 2015, the Company announced an agreement to acquire Cromwell Group (Holdings) Limited , together with its subsidiaries, a distributor of MRO products headquartered in Leicester, England , for £310 million GBP, subject to customary adjustments. The transaction is expected to be completed in early September 2015. The acquisition will be funded with debt, both in the United Kingdom and United States.

EMPLOYEE BENEFITS (Tables)

EMPLOYEE BENEFITS (Tables)	6 Months Ended
	Jun. 30, 2015
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]
Net Periodic Benefit Costs Charged to Operating Expenses	The net periodic benefit costs charged to operating expenses, which are valued at the measurement date of January 1 and recognized evenly throughout the year, consisted of the following components (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Service cost $ 2,532 $ 2,252 $ 5,064 $ 4,503 Interest cost 2,412 2,637 4,824 5,274 Expected return on assets (2,594 ) (2,060 ) (5,188 ) (4,119 ) Amortization of transition asset — (35 ) — (71 ) Amortization of unrecognized losses 378 195 756 390 Amortization of prior service credits (1,700 ) (1,814 ) (3,400 ) (3,627 ) Net periodic benefit costs $ 1,028 $ 1,175 $ 2,056 $ 2,350

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	6 Months Ended
	Jun. 30, 2015
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment	Following is a summary of segment results (in thousands of dollars): Three Months Ended June 30, 2015 United States Canada Other Businesses Total Total net sales $ 2,030,633 $ 239,466 $ 318,898 $ 2,588,997 Intersegment net sales (65,394 ) (17 ) (1,021 ) (66,432 ) Net sales to external customers $ 1,965,239 $ 239,449 $ 317,877 $ 2,522,565 Segment operating earnings $ 369,533 $ 9,499 $ 15,158 $ 394,190 Three Months Ended June 30, 2014 United States Canada Other Businesses Total Total net sales $ 1,992,955 $ 264,046 $ 298,926 $ 2,555,927 Intersegment net sales (49,358 ) (42 ) (423 ) (49,823 ) Net sales to external customers $ 1,943,597 $ 264,004 $ 298,503 $ 2,506,104 Segment operating earnings $ 365,099 $ 19,212 $ (456 ) $ 383,855 Six Months Ended June 30, 2015 United States Canada Other Businesses Total Total net sales $ 4,002,088 $ 473,996 $ 616,697 $ 5,092,781 Intersegment net sales (128,585 ) (53 ) (1,917 ) (130,555 ) Net sales to external customers $ 3,873,503 $ 473,943 $ 614,780 $ 4,962,226 Segment operating earnings $ 735,622 $ 18,886 $ 24,684 $ 779,192 Six Months Ended June 30, 2014 United States Canada Other Businesses Total Total net sales $ 3,890,265 $ 518,342 $ 573,832 $ 4,982,439 Intersegment net sales (90,225 ) (88 ) (395 ) (90,708 ) Net sales to external customers $ 3,800,040 $ 518,254 $ 573,437 $ 4,891,731 Segment operating earnings $ 718,786 $ 40,508 $ 8,019 $ 767,313 United States Canada Other Businesses Total Segment assets: June 30, 2015 $ 2,188,815 $ 348,508 $ 356,992 $ 2,894,315 December 31, 2014 $ 2,181,521 $ 394,342 $ 345,987 $ 2,921,850
Reconciliation Of Operating Earnings From Segment To Consolidated	Following are reconciliations of segment information with the consolidated totals per the financial statements (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Operating earnings: Total operating earnings for operating segments $ 394,190 $ 383,855 $ 779,192 $ 767,313 Unallocated expenses and eliminations (37,473 ) (43,104 ) (71,227 ) (72,223 ) Total consolidated operating earnings $ 356,717 $ 340,751 $ 707,965 $ 695,090
Reconciliation of Assets from Segment to Consolidated	June 30, 2015 Dec 31, 2014 Assets: Total assets for operating segments $ 2,894,315 $ 2,921,850 Other current and non-current assets 2,069,484 2,113,900 Unallocated assets 863,110 247,299 Total consolidated assets $ 5,826,909 $ 5,283,049

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Computation of Basic and Diluted Earnings per Share under two-class method	The following table sets forth the computation of basic and diluted earnings per share under the two-class method (in thousands of dollars, except for share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Net earnings attributable to W.W. Grainger, Inc. as reported $ 220,548 $ 205,915 $ 431,563 $ 422,568 Distributed earnings available to participating securities (742 ) (727 ) (1,510 ) (1,562 ) Undistributed earnings available to participating securities (1,418 ) (1,666 ) (2,879 ) (3,765 ) Numerator for basic earnings per share – Undistributed and distributed earnings available to common shareholders 218,388 203,522 427,174 417,241 Undistributed earnings allocated to participating securities 1,418 1,666 2,879 3,765 Undistributed earnings reallocated to participating securities (1,404 ) (1,645 ) (2,850 ) (3,716 ) Numerator for diluted earnings per share – Undistributed and distributed earnings available to common shareholders $ 218,402 $ 203,543 $ 427,203 $ 417,290 Denominator for basic earnings per share – weighted average shares 66,652,130 68,453,602 66,939,110 68,576,232 Effect of dilutive securities 665,001 888,283 708,579 932,893 Denominator for diluted earnings per share – weighted average shares adjusted for dilutive securities 67,317,131 69,341,885 67,647,689 69,509,125 Earnings per share two-class method Basic $ 3.28 $ 2.97 $ 6.38 $ 6.08 Diluted $ 3.25 $ 2.94 $ 6.32 $ 6.00

DIVIDEND (Details)

DIVIDEND (Details) - 1 months ended Jul. 29, 2015 - Subsequent Event [Member] - $ / shares	Total
Dividends Payable [Line Items]
Dividends Payable, Amount Per Share	$ 1.17
Dividend payable date to be paid	Sep. 1, 2015
Dividends payable record date	Aug. 10, 2015

LONG-TERM DEBT (Details)

LONG-TERM DEBT (Details) - Jun. 30, 2015 - Senior Notes [Member] - USD ($) $ in Millions	Total
Debt Instrument [Line Items]
Debt Instrument, Issuance Date	Jun. 11, 2015
Senior Notes	$ 1,000
Debt Instrument, Interest Rate, Stated Percentage	4.60%
Debt Instrument, Maturity Date	Jun. 15, 2045
Debt Instrument, Redemption, Description	Prior to December 15, 2044, the Company may redeem the Notes in whole at any time or in part from time to time at a “make-whole” redemption price. This redemption price is calculated by reference to the then current yield on a US treasury security with a maturity comparable to the remaining term of the Notes plus 25 basis points, together with accrued and unpaid interest, if any, to the redemption date. On or after December 15, 2044, the Company may redeem the Notes in whole at any time or in part from time to time at 100% of their principal amount, together with accrued and unpaid interest, if any, to the redemption date.
Debt Issuance Cost	$ 10
Long-term Debt, Fair Value	$ 1,000

DERIVATIVE INSTRUMENTS (Details

DERIVATIVE INSTRUMENTS (Details) - Interest Rate Swap [Member] - USD ($) $ in Millions	1 Months Ended
	Oct. 31, 2011	Jun. 30, 2015	Dec. 31, 2014
Derivative [Line Items]
Derivative instruments, Liabilities		$ 1	$ 2
Derivative, Maturity Date	Aug. 31, 2016

EQUITY METHOD INVESTMENT (Detai

EQUITY METHOD INVESTMENT (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Equity Method Investments and Joint Ventures [Abstract]
Equity Method Investments	$ 6,000		$ 6,000
Loss from equity method investment	$ (4,302)	$ 0	$ (4,302)	$ 0

EMPLOYEE BENEFITS (Details)

EMPLOYEE BENEFITS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]
Defined Benefit Plan, Contributions by Employer	$ 1,700		$ 2,100
Service cost	2,532	$ 2,252	5,064	$ 4,503
Interest cost	2,412	2,637	4,824	5,274
Expected return on assets	(2,594)	(2,060)	(5,188)	(4,119)
Amortization of transition asset	0	(35)	0	(71)
Amortization of unrecognized losses	378	195	756	390
Amortization of prior service credits	(1,700)	(1,814)	(3,400)	(3,627)
Net periodic benefit costs	$ 1,028	$ 1,175	$ 2,056	$ 2,350

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Summary of segment results [Line Items]
Service Fee Revenue (Less than)			1.00%
Increase in unallocated assets			$ 616,000
Other assets decrease			(44,000)
Summarized Information
Net sales	$ 2,522,565	$ 2,506,104	4,962,226	$ 4,891,731
Operating earnings (expenses)	356,717	340,751	707,965	695,090
Total assets	5,826,909		5,826,909		$ 5,283,049
United States [Member]
Summary of segment results [Line Items]
Intersegment Sales Increase			38,000
Summarized Information
Net sales	1,965,239	1,943,597	3,873,503	3,800,040
Total assets	2,188,815		2,188,815		2,181,521
Canada [Member]
Summarized Information
Net sales	239,449	264,004	473,943	518,254
Total assets	348,508		348,508		394,342
Other Businesses [Member]
Summarized Information
Net sales	317,877	298,503	614,780	573,437
Total assets	356,992		356,992		345,987
Segment balances before intersegment eliminations and consolidation reconciling items [Member]
Summarized Information
Net sales	2,588,997	2,555,927	5,092,781	4,982,439
Operating earnings (expenses)	394,190	383,855	779,192	767,313
Total assets	2,894,315		2,894,315		2,921,850
Segment balances before intersegment eliminations and consolidation reconciling items [Member] | United States [Member]
Summarized Information
Net sales	2,030,633	1,992,955	4,002,088	3,890,265
Operating earnings (expenses)	369,533	365,099	735,622	718,786
Segment balances before intersegment eliminations and consolidation reconciling items [Member] | Canada [Member]
Summarized Information
Net sales	239,466	264,046	473,996	518,342
Operating earnings (expenses)	9,499	19,212	18,886	40,508
Segment balances before intersegment eliminations and consolidation reconciling items [Member] | Other Businesses [Member]
Summarized Information
Net sales	318,898	298,926	616,697	573,832
Operating earnings (expenses)	15,158	(456)	24,684	8,019
Intersegment Eliminations [Member]
Summarized Information
Net sales	(66,432)	(49,823)	(130,555)	(90,708)
Intersegment Eliminations [Member] | United States [Member]
Summarized Information
Net sales	(65,394)	(49,358)	(128,585)	(90,225)
Intersegment Eliminations [Member] | Canada [Member]
Summarized Information
Net sales	(17)	(42)	(53)	(88)
Intersegment Eliminations [Member] | Other Businesses [Member]
Summarized Information
Net sales	(1,021)	(423)	(1,917)	(395)
Eliminations and Unallocated in Consolidation [Member]
Summarized Information
Operating earnings (expenses)	(37,473)	$ (43,104)	(71,227)	$ (72,223)
Total assets	863,110		863,110		247,299
Segment other current and non-current assets [Member]
Summarized Information
Total assets	2,069,484		2,069,484		$ 2,113,900
Senior Notes [Member]
Summary of segment results [Line Items]
Senior Notes	$ 1,000,000		$ 1,000,000

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share [Abstract]
Net earnings attributable to W.W. Grainger, Inc. as reported	$ 220,548	$ 205,915	$ 431,563	$ 422,568
Distributed earnings available to participating securities	(742)	(727)	(1,510)	(1,562)
Undistributed earnings available to participating securities	(1,418)	(1,666)	(2,879)	(3,765)
Numerator for basic earnings per share – Undistributed and distributed earnings available to common shareholders	218,388	203,522	427,174	417,241
Undistributed earnings allocated to participating securities	1,418	1,666	2,879	3,765
Undistributed earnings reallocated to participating securities	(1,404)	(1,645)	(2,850)	(3,716)
Numerator for diluted earnings per share – Undistributed and distributed earnings available to common shareholders	$ 218,402	$ 203,543	$ 427,203	$ 417,290
Denominator for basic earnings per share - weighted average shares (in shares)	66,652,130	68,453,602	66,939,110	68,576,232
Effect of dilutive securities	665,001	888,283	708,579	932,893
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities (in shares)	67,317,131	69,341,885	67,647,689	69,509,125
Basic (in dollars per share)	$ 3.28	$ 2.97	$ 6.38	$ 6.08
Diluted (in dollars per share)	$ 3.25	$ 2.94	$ 6.32	$ 6

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - 1 months ended Jul. 30, 2015 - Subsequent Event [Member] - GBP (£) £ in Millions	Total
Subsequent Event [Line Items]
Business Acquisition, Name of Entity to be Acquired	Cromwell Group (Holdings) Limited
Business Acquisition, Description of Entity to be Acquired	a distributor of MRO products headquartered in Leicester, England
Value of Business to be Acquired	£ 310