COVER
COVER - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 21, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-5684 | |
Entity Registrant Name | W.W. Grainger, Inc. | |
Entity Incorporation, State or Country Code | IL | |
Entity Tax Identification Number | 36-1150280 | |
Entity Address, Address Line One | 100 Grainger Parkway | |
Entity Address, City or Town | Lake Forest, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60045-5201 | |
City Area Code | 847 | |
Local Phone Number | 535-1000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | GWW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 50,529,263 | |
Entity Central Index Key | 0000277135 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 3,942 | $ 3,372 | $ 11,426 | $ 9,663 |
Cost of goods sold | 2,423 | 2,122 | 7,083 | 6,196 |
Gross profit | 1,519 | 1,250 | 4,343 | 3,467 |
Selling, general and administrative expenses | 916 | 812 | 2,672 | 2,337 |
Operating earnings | 603 | 438 | 1,671 | 1,130 |
Other (income) expense: | ||||
Interest expense – net | 25 | 22 | 70 | 65 |
Other – net | (9) | (6) | (20) | (19) |
Total other expense – net | 16 | 16 | 50 | 46 |
Earnings before income taxes | 587 | 422 | 1,621 | 1,084 |
Income tax provision | 145 | 107 | 405 | 271 |
Net earnings | 442 | 315 | 1,216 | 813 |
Less net earnings attributable to noncontrolling interest | 16 | 18 | 53 | 53 |
Net earnings attributable to W.W. Grainger, Inc. | $ 426 | $ 297 | $ 1,163 | $ 760 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 8.31 | $ 5.68 | $ 22.64 | $ 14.48 |
Diluted (in dollars per share) | $ 8.27 | $ 5.65 | $ 22.52 | $ 14.40 |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 50.8 | 51.8 | 51 | 52.1 |
Diluted (in shares) | 51.1 | 52.1 | 51.3 | 52.4 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 442 | $ 315 | $ 1,216 | $ 813 |
Other comprehensive earnings (losses): | ||||
Foreign currency translation adjustments – net of reclassification to earnings | (71) | (17) | (180) | (43) |
Postretirement benefit plan losses and other – net of tax benefit of $2, $1, $4, and $3, respectively | (3) | (4) | (10) | (9) |
Total other comprehensive earnings (losses) | (74) | (21) | (190) | (52) |
Comprehensive earnings – net of tax | 368 | 294 | 1,026 | 761 |
Less comprehensive earnings (losses) attributable to noncontrolling interest | ||||
Net earnings | 16 | 18 | 53 | 53 |
Foreign currency translation adjustments | (14) | (1) | (61) | (19) |
Total comprehensive earnings (losses) attributable to noncontrolling interest | 2 | 17 | (8) | 34 |
Comprehensive earnings attributable to W.W. Grainger, Inc. | $ 366 | $ 277 | $ 1,034 | $ 727 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (PARENTHETICAL) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Postretirement benefit plan reclassification, net of tax benefit | $ 2 | $ 1 | $ 4 | $ 3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 315 | $ 241 |
Accounts receivable (less allowances for credit losses of $36 and $30, respectively) | 2,158 | 1,754 |
Inventories – net | 2,071 | 1,870 |
Prepaid expenses and other current assets | 142 | 146 |
Total current assets | 4,686 | 4,011 |
Property, buildings and equipment – net | 1,409 | 1,424 |
Goodwill | 363 | 384 |
Intangibles – net | 222 | 238 |
Operating lease right-of-use | 360 | 393 |
Other assets | 161 | 142 |
Total assets | 7,201 | 6,592 |
Current liabilities | ||
Current maturities | 16 | 0 |
Trade accounts payable | 1,038 | 816 |
Accrued compensation and benefits | 307 | 319 |
Operating lease liability | 67 | 66 |
Accrued expenses | 332 | 290 |
Income taxes payable | 25 | 37 |
Total current liabilities | 1,785 | 1,528 |
Long-term debt | 2,294 | 2,362 |
Long-term operating lease liability | 305 | 334 |
Deferred income taxes and tax uncertainties | 135 | 121 |
Other non-current liabilities | 120 | 87 |
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; 109,659,219 shares issued | 55 | 55 |
Additional contributed capital | 1,299 | 1,270 |
Retained earnings | 10,402 | 9,500 |
Accumulated other comprehensive losses | (225) | (96) |
Treasury stock, at cost – 59,028,249 and 58,439,014 shares, respectively | (9,223) | (8,855) |
Total W.W. Grainger, Inc. shareholders’ equity | 2,308 | 1,874 |
Noncontrolling interest | 254 | 286 |
Total shareholders' equity | 2,562 | 2,160 |
Total liabilities and shareholders' equity | $ 7,201 | $ 6,592 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 36 | $ 30 |
Cumulative preferred stock, par value (in dollars per share) | $ 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 (in dollars per share) | $ 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 | 59,028,249 | 58,439,014 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net earnings | $ 1,216 | $ 813 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Provision for credit losses | 13 | 12 |
Deferred income taxes and tax uncertainties | 20 | (7) |
Depreciation and amortization | 159 | 137 |
Net losses (gains) from sale or redemption of assets | 1 | (3) |
Stock-based compensation | 38 | 33 |
Change in operating assets and liabilities: | ||
Accounts receivable | (487) | (298) |
Inventories | (253) | (64) |
Prepaid expenses and other assets | (39) | (1) |
Trade accounts payable | 261 | 167 |
Accrued liabilities | 51 | (13) |
Income taxes – net | 8 | (42) |
Other non-current liabilities | (15) | (10) |
Net cash provided by operating activities | 973 | 724 |
Cash flows from investing activities: | ||
Additions to property, buildings, equipment and intangibles | (208) | (197) |
Proceeds from sale or redemption of assets | 7 | 17 |
Other – net | (11) | 0 |
Net cash used in investing activities | (212) | (180) |
Cash flows from financing activities: | ||
Borrowings under lines of credit | 1 | 0 |
Payments of long-term debt | 0 | (8) |
Proceeds from stock options exercised | 21 | 31 |
Payments for employee taxes withheld from stock awards | (22) | (29) |
Purchases of treasury stock | (383) | (525) |
Cash dividends paid | (285) | (261) |
Other – net | 0 | 2 |
Net cash used in financing activities | (668) | (790) |
Exchange rate effect on cash and cash equivalents | (19) | (11) |
Net change in cash and cash equivalents | 74 | (257) |
Cash and cash equivalents at beginning of year | 241 | 585 |
Cash and cash equivalents at end of period | $ 315 | $ 328 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Contributed Capital | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Earnings (Losses) | Treasury Stock | Noncontrolling Interest |
Beginning balance at Dec. 31, 2020 | $ 2,093 | $ 12 | $ 55 | $ 1,239 | $ 8,779 | $ 12 | $ (61) | $ (8,184) | $ 265 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock-based compensation | 14 | 9 | 5 | ||||||
Purchases of treasury stock | (175) | (175) | |||||||
Net earnings | 255 | 238 | 17 | ||||||
Other comprehensive earnings (losses) | (38) | (20) | (18) | ||||||
Cash dividends paid | (81) | (81) | |||||||
Ending balance at Mar. 31, 2021 | 2,080 | 55 | 1,248 | 8,948 | (81) | (8,354) | 264 | ||
Beginning balance at Dec. 31, 2020 | 2,093 | $ 12 | 55 | 1,239 | 8,779 | $ 12 | (61) | (8,184) | 265 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net earnings | 813 | ||||||||
Other comprehensive earnings (losses) | (52) | ||||||||
Ending balance at Sep. 30, 2021 | 2,117 | 1,255 | 9,301 | (94) | (8,690) | 290 | |||
Beginning balance at Mar. 31, 2021 | 2,080 | 55 | 1,248 | 8,948 | (81) | (8,354) | 264 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock-based compensation | 12 | (1) | 12 | 1 | |||||
Purchases of treasury stock | (108) | (107) | (1) | ||||||
Net earnings | 243 | 225 | 18 | ||||||
Other comprehensive earnings (losses) | 7 | 7 | |||||||
Capital contribution | 2 | 2 | |||||||
Cash dividends paid | (95) | (84) | (11) | ||||||
Ending balance at Jun. 30, 2021 | 2,141 | 55 | 1,247 | 9,089 | (74) | (8,449) | 273 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock-based compensation | 9 | 8 | 1 | ||||||
Purchases of treasury stock | (242) | (242) | |||||||
Net earnings | 315 | 297 | 18 | ||||||
Other comprehensive earnings (losses) | (21) | (20) | (1) | ||||||
Cash dividends paid | (85) | (85) | |||||||
Ending balance at Sep. 30, 2021 | 2,117 | 1,255 | 9,301 | (94) | (8,690) | 290 | |||
Beginning balance at Dec. 31, 2021 | 2,160 | 55 | 1,270 | 9,500 | (96) | (8,855) | 286 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock-based compensation | 13 | 10 | 3 | ||||||
Purchases of treasury stock | (75) | (75) | |||||||
Net earnings | 385 | 366 | 19 | ||||||
Other comprehensive earnings (losses) | (29) | (13) | (16) | ||||||
Cash dividends paid | (84) | (84) | |||||||
Ending balance at Mar. 31, 2022 | 2,370 | 55 | 1,280 | 9,782 | (109) | (8,927) | 289 | ||
Beginning balance at Dec. 31, 2021 | 2,160 | 55 | 1,270 | 9,500 | (96) | (8,855) | 286 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net earnings | 1,216 | ||||||||
Other comprehensive earnings (losses) | (190) | ||||||||
Ending balance at Sep. 30, 2022 | 2,562 | 55 | 1,299 | 10,402 | (225) | (9,223) | 254 | ||
Beginning balance at Mar. 31, 2022 | 2,370 | 55 | 1,280 | 9,782 | (109) | (8,927) | 289 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock-based compensation | 10 | 7 | 2 | 1 | |||||
Purchases of treasury stock | (118) | (117) | (1) | ||||||
Net earnings | 389 | 371 | 18 | ||||||
Other comprehensive earnings (losses) | (87) | (56) | (31) | ||||||
Cash dividends paid | (99) | (87) | (12) | ||||||
Ending balance at Jun. 30, 2022 | 2,465 | 55 | 1,287 | 10,066 | (165) | (9,042) | 264 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock-based compensation | 15 | 12 | 3 | ||||||
Purchases of treasury stock | (184) | (184) | |||||||
Net earnings | 442 | 426 | 16 | ||||||
Other comprehensive earnings (losses) | (74) | (60) | (14) | ||||||
Cash dividends paid | (102) | (90) | (12) | ||||||
Ending balance at Sep. 30, 2022 | $ 2,562 | $ 55 | $ 1,299 | $ 10,402 | $ (225) | $ (9,223) | $ 254 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY (PARENTHETICAL) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Statement of Stockholders' Equity (Parentheticals) [Abstract] | ||||||
Cash dividends paid per share (in dollars per share) | $ 1.72 | $ 1.72 | $ 1.62 | $ 1.62 | $ 1.62 | $ 1.53 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES W.W. Grainger, Inc. is a broad line, business-to-business distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America (N.A.), Japan and the United Kingdom (U.K.). In this report, the words “Grainger” or “Company” mean W.W. Grainger, Inc. and its subsidiaries, except where the context makes it clear that the reference is only to W.W. Grainger, Inc. itself and not its subsidiaries. Basis of Presentation The Company's Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and therefore do not include all information and disclosures normally included in the annual Consolidated Financial Statements. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from these estimated amounts. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The Condensed Consolidated Balance Sheet at December 31, 2021, has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 23, 2022 (2021 Form 10-K). There w ere no mater ial changes to the Company’s significant accounting policies from those disclosed in Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company's 2021 Form 10-K. New Accounting Standards Accounting Pronouncements Recently Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting as modified by subsequently issued ASU 2021-01. This update provides optional expedients and exceptions for applying GAAP to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and generally can be applied prospectively to contract modifications made and hedging relationships entered or evaluated on or before December 31, 20 22. In October 2022, the FASB amended Topic 848, updating the sunset date from December 31, 2022 to December 31, 2024. Th e Company adopted this ASU on July 1, 2022 on a prospective basis and it did not have a material impact on the Consolidated Financial Statements. For further discussion on the credit agreement modifications made to the revolving credit facility, see Note 5. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance . This update provides increased transparency of government assistance, including the disclosure of the types of assistance an entity receives, an entity's method of accounting for government assistance and the effect of the assistance on an entity's financial statements. The guidance is effective for annual periods beginning after December 15, 2021 and should be applied prospectively or retrospectively. Early adoption is permitted. The Company adopted this ASU on January 1, 2022 on a prospective basis and it did not have a material impact on the Consolidated Financial Stateme nts and related disclosures. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Company revenue is primarily comprised of MRO product sales and related activities, such as freight and services. Total service revenue accounted for approximately 1% of the Company's revenue for both the three and nine months ended September 30, 2022 and 2021. Grainger serves a large number of customers in diverse industries, which are subject to different economic and market-specific factors. The Company's presentation of revenue by segment and industry most reasonably depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic and market-specific factors. In addition, the segments have unique underlying risks associated with customer purchasing behaviors. In the High-Touch Solutions N.A. segment, more than two-thirds of revenue is derived from customer contracts whereas in the Endless Assortment segment, a majority of revenue is derived from non-contractual purchases. The following tables present the Company's percentage of revenue by reportable segment and by major customer industry: Three Months Ended September 30, 2022 2021 High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) Contractors 8 % 14 % 9 % 9 % 15 % 10 % Commercial 10 % 15 % 11 % 9 % 15 % 10 % Government 17 % 2 % 14 % 18 % 3 % 15 % Healthcare 6 % 2 % 5 % 7 % 2 % 6 % Manufacturing 32 % 30 % 32 % 29 % 30 % 29 % Retail/Wholesale 8 % 15 % 9 % 9 % 10 % 10 % Transportation 6 % 3 % 6 % 5 % 3 % 5 % Other (1) 13 % 19 % 14 % 14 % 22 % 15 % Total net sales 100 % 100 % 100 % 100 % 100 % 100 % Percent of total company revenue 80 % 18 % 100 % 79 % 19 % 100 % (1) Other primarily includes revenue from industries and customers that are not material individually, including agriculture, mining, natural resources and resellers not aligned to a major industry segment. (2) Total Company includes other businesses, which includes the Cromwell business. Other businesses account for approximately 2% of revenue for both the three months ended September 30, 2022 and 2021. Nine Months Ended September 30, 2022 2021 High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) Contractors 9 % 15 % 10 % 9 % 15 % 10 % Commercial 10 % 15 % 11 % 9 % 15 % 10 % Government 17 % 3 % 14 % 19 % 3 % 15 % Healthcare 6 % 2 % 5 % 7 % 2 % 6 % Manufacturing 31 % 30 % 31 % 30 % 29 % 29 % Retail/Wholesale 9 % 15 % 10 % 9 % 10 % 10 % Transportation 6 % 3 % 5 % 5 % 3 % 5 % Other (1) 12 % 17 % 14 % 12 % 23 % 15 % Total net sales 100 % 100 % 100 % 100 % 100 % 100 % Percent of total company revenue 80 % 18 % 100 % 78 % 20 % 100 % (1) Other primarily includes revenue from industries and customers that are not material individually, including agriculture, mining, natural resources and resellers not aligned to a major industry segment. (2) Total Company includes other businesses, which includes the Cromwell business. Other businesses account for approximately 2% of revenue for both the nine months ended September 30, 2022 and 2021. Total accrued sales incentives were approximately $96 mil lion and $73 million as of September 30, 2022 and December 31, 2021, and are reported as part of Accrued expenses. The Compa ny had no mater ial unsatisfied performance obligations, contract assets or liabilities as of September 30, 2022 and December 31, 2021. |
PROPERTY, BUILDINGS AND EQUIPME
PROPERTY, BUILDINGS AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, BUILDINGS AND EQUIPMENT | PROPERTY, BUILDINGS AND EQUIPMENT Property, buildings and equipment consisted of the following (in millions of dollars): As of September 30, 2022 December 31, 2021 Land $ 329 $ 329 Building, structures and improvements 1,403 1,431 Furniture, fixtures, machinery and equipment 1,630 1,567 Property, buildings and equipment $ 3,362 $ 3,327 Less accumulated depreciation and amortization 1,953 1,903 Property, buildings and equipment – net $ 1,409 $ 1,424 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators during the three and nine months ended September 30, 2022. As such, quantitative assessments were not required. The balances and changes in the carrying amount of Goodwill (net of cumulative goodwill impairments) by segment are as follows (in millions of dollars): High-Touch Solutions N.A. Endless Assortment Other Total Balance at January 1, 2021 $ 321 $ 70 $ — $ 391 Translation — (7) — (7) Balance at December 31, 2021 321 63 — 384 Translation (10) (11) — (21) Balance at September 30, 2022 $ 311 $ 52 $ — $ 363 The cumu lative goodwill impairments as of September 30, 2022, were $137 million and consisted of $32 million within High-Touch Solutions N.A. and $105 million in Other. There were no impairments to goodwill for the three and nine months ended September 30, 2022 or the year ended December 31, 2021. The balances in Intangible assets – net are as follows (in millions of dollars ): As of September 30, 2022 December 31, 2021 Weighted average life Gross carrying amount Accumulated amortization/impairment Net carrying amount Gross carrying amount Accumulated amortization/impairment Net carrying amount Customer lists and relationships 11.7 years $ 215 $ 177 $ 38 $ 221 $ 176 $ 45 Trademarks, trade names and other 14.3 years 33 24 9 36 24 12 Non-amortized trade names and other Indefinite 20 — 20 25 — 25 Capitalized software 4.2 years 554 399 155 525 369 156 Total intangible assets 7.0 years $ 822 $ 600 $ 222 $ 807 $ 569 $ 238 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Total debt, including long-term, cur rent maturities and debt issuance costs and discounts – net, consisted of the following (in millions of dollars): As of September 30, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value 4.60% senior notes due 2045 $ 1,000 $ 899 $ 1,000 $ 1,284 1.85% senior notes due 2025 500 468 500 509 4.20% senior notes due 2047 400 335 400 492 3.75% senior notes due 2046 400 314 400 459 Japanese yen term loan 62 62 78 78 Other (31) (31) 7 7 Subtotal 2,331 2,047 2,385 2,829 Less current maturities (16) (16) — — Debt issuance costs and discounts – net of amortization (21) (21) (23) (23) Long-term debt $ 2,294 $ 2,010 $ 2,362 $ 2,806 Revolving Credit Facility In August 2022, the Company entered into a First Amendment (the Amendment) to its existing five-year unsecured credit agreement originally entered into in February 2020. The Amendment changes the benchmark rate for borrowings denominated in U.S. and foreign currencies from LIBOR to certain alternative benchmark rates. This includes benchmark rates based on the Euro Interbank Offered Rate (EURIBOR) for borrowings denominated in Euros, the Canadian Dollar Offer Rate (CDOR) for borrowings denominated in Canadian dollars, the Sterling Overnig ht Index Average (SONIA) for borrowings denominated in sterling and Secured Overnight Financing Rate (SOFR) for borrowings denominated in U.S. dollars. The Amendment also updates certain other provisions regarding successor interest rates to LIBOR. Senior Notes In the years 2015-2020, Grainger issue d $2.3 billion in unsecured long-term debt (Senior Notes) primarily to provide flexibility in funding general working capital needs, share repurchases a nd long-term cash requirements. The Senior Notes require no principal payments until maturity and interest is paid semi-annually. The Company incurred debt issuance costs related to its Senior Notes of approxima tely $29 million, representing underwriting fees and other expenses, that were recorded as a contra-liability within Long-term debt and are being amortized over the term of the Senior Notes using the straight-line method to Interest expense – net. The Company uses interest rate swaps to manage the risks associated with its 1.85% Senior Notes. These swaps were designated for hedge accounting treatment as fair value hedges. The resulting carrying value adjustments as of September 30, 2022 and December 31, 2021, are presented within Other in the table above. F or further discussion on the Company's hedge accounting policies and derivative instruments, see Note 6. Term Loan In August 2020, MonotaRO entered into a ¥9 billion te rm loan agreement to fund technology investments and the expansion of its distribution center (DC) network. As of September 30, 2022 and December 31, 2021, the carrying amount of the term loan, including current maturities due within one year, was $62 million and $78 million, respectively. The term loan matures i n 2024, payable over four equal semi-annual principal installments in 2023 and 2024 and bears an average interest of 0.05%. Fair Value The estimated fair value of the Company’s Senior Notes was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as Level 2 inputs within the fair v alue hierarchy. For further information on the Company’s debt instruments, see Note 6 of the Notes to Consolidated Financia l Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company’s 2021 Form 10-K. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company maintains various agreements with bank counterparties that permit the Company to enter into “over-the-counter” derivative instrument agreements to manage its risk associated with interest rates and foreign currency fluctuations. In February 2020, the Company entered into certain derivative instrument agreements to manage its risk associated with interest rates o n its 1.85% Notes and foreign currency fluctuations in connection with its foreign currency-denominated intercompany borrowings. T he Company did not enter into these agreements for trading or speculative purposes. Cash Flow Hedges The Company uses cash flow hedges primarily to hedge the exposure to variability in forecasted cash flows from foreign currency-denominated intercompany borrowings via cross-currency swaps. Gains or losses on the cross-currency swaps are reported as a component of Accumulated other comprehensive earnings (losses) (AOCE) and reclassified into earnings in the same period during which the hedged transaction affects earnings. The notional amount of the Company’s outstanding cash flow hedges as of September 30, 2022 and December 31, 2021 was approximately $34 million. The effect of the Company’s cash flow hedges on the Condensed Consolidated Statements of Earnings in Other – net and AOCE for the three and nine months ended September 30, 2022 and 2021 w as not material. Fair Value Hedges The Company uses fair value hedges primarily to hedge a portion of its fixed-rate long-term debt via interest rate swaps. Changes in the fair value of the interest rate swaps, along with the gain or loss on the hedged item, is recorded in earnings under the same line item, Interest expense – net. The notional amount of the Company’s outstanding fair value hedges as of September 30, 2022 and December 31, 2021 wa s $500 million. The effect of the Company's fair value hedges on the Condensed Consolidated Statements of Earnings in Interest expense – net for the three and nine months ended September 30, 2022 and 2021, respectively, is as follows (in millions of dollars): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gain or (loss): Interest rate swaps: Hedged item $ 11 $ 3 $ 36 $ 12 Derivatives designated as hedging instrument $ (11) $ (3) $ (36) $ (12) The fair value and carrying amounts of outstanding derivative instruments on the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021, respectively, were as follows (in millions of dollars): As of September 30, 2022 December 31, 2021 Balance Sheet Classification Fair Value and Carrying Amounts Cross-currency swap Prepaid expenses and other current assets $ 1 $ — Other non-current liabilities $ — $ 2 Interest rate swaps Other assets $ — $ 1 Other non-current liabilities $ 35 $ — The carrying amount of the liability hedged by the interest rate swaps recorded in Long-term debt, including the cumulative amount of fair value hedging adjustments, as of September 30, 2022 and December 31, 2021 totaled $465 million and $501 million, respectively. Fair Value The estimated fair values of the Company's derivative instruments were based on quoted market forward rates, which are classified as Level 2 inputs within the fair value hierarchy and reflect the present value of the amount that the Company would pay for contracts involving the same notional amounts and maturity dates. No adjustments were required during the current period to reflect the counterparty’s credit risk or t he Comp |
DIVIDEND
DIVIDEND | 9 Months Ended |
Sep. 30, 2022 | |
Dividends [Abstract] | |
DIVIDEND | DIVIDENDOn October 26, 2022, the Company’s Board of Directors declared a quarterly dividend of $1.72 per share, payable December 1, 2022, to shareholders of record on November 14, 2022. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Grainger's two reportable segments are High-Touch Solutions N.A. and Endless Assortment. The remaining international businesses, which include the Cromwell business, are classified as Other to reconcile to consolidated results. These businesses individually and in the aggregate do not meet the criteria of a reportable segment. Corporate costs are allocated to each reportable segment based on benefits received. Additionally, intersegment sales transactions, which are sales between Grainger businesses in separate reportable segments, are eliminated within the segment to present only the impact of sales to external customers. Service fees for intersegment sales from the High-Touch Solutions N.A. segment to the Endless Assortment segment are included in each segment's Selling, general and administrative expenses (SG&A) and are eliminated in consolidation. Following is a summary of segment results (in millions of dollars): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net sales Operating earnings (losses) Net sales Operating earnings (losses) Net sales Operating earnings (losses) Net sales Operating earnings (losses) High-Touch Solutions N.A. $ 3,180 $ 550 $ 2,663 $ 387 $ 9,111 $ 1,506 $ 7,558 $ 975 Endless Assortment 701 58 646 59 2,117 175 1,913 172 Other 61 (5) 63 (8) 198 (10) 192 (17) Total Company $ 3,942 $ 603 $ 3,372 $ 438 $ 11,426 $ 1,671 $ 9,663 $ 1,130 The Company is a broad line distributor of MRO products and services. Products are regularly added and removed from the Company's product assortment. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered, including the evolving list of products stocked and additional products available online but not stocked. Assets for reportable segments are not disclosed. This information is not regularly reviewed by the Company's Chief Operating Decision Maker. |
CONTINGENCIES AND LEGAL MATTERS
CONTINGENCIES AND LEGAL MATTERS | 9 Months Ended |
Sep. 30, 2022 | |
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, including claims related to: product liability, safety or compliance; privacy and cybersecurity matters; negligence; contract disputes; environmental issues; unclaimed property; wage and hour laws; intellectual property; advertising and marketing; consumer protection; pricing (including disaster or emergency declaration pricing statutes); employment practices; regulatory compliance, including trade and export matters; anti-bribery and corruption; and other matters and actions brought by employees, consumers, competitors, suppliers, customers, governmental entities and other third parties. As previously disclosed, beginning in the fourth quarter of 2019, Grainger, KMCO, LLC (KMCO) and other defendants have been named in several product liability-related lawsuits in the Harris County, Texas District Court relating to an explosion at a KMCO chemical refinery located in Crosby, Harris County, Texas on April 2, 2019. The complaints in which Grainger has been named, which to date encompass approximately 186 plaintiffs, seek recovery of compensatory and other damages and relief in relation to personal injury, including one death and various other alleged injuries. On May 8, 2020, KMCO filed a voluntary petition in the United States Bankruptcy Court for the Southern District of Texas for relief under Chapter 7 of Title 11 of the United States Bankruptcy Court in the case KMCO, LLC, No. 20-60028. As a result of the Chapter 7 proceedings, the claims against KMCO in the Harris County lawsuits were stayed. Effective January 1, 2021, the Bankruptcy Court lifted the stay with respect to KMCO. In the product liability related cases, the Harris County District Court has decided to conduct bellwether trials involving a subset of plaintiffs the Court believes are representative of the parties' claims and defenses. The first such trial is scheduled for mid-January 2023 and will include six plaintiffs. Additional trials may follow after the resolution of this initial trial. On December 16, 2020, KMCO, the trustee of its estate and ORG Chemical Holdings, LLC, KMCO’s parent company (ORG), filed a property damage lawsuit relating to the KMCO chemical refinery incident against Grainger and another defendant in the Harris County, Texas District Court, which seeks unspecified damages (the KMCO Case). On April 1, 2021, 24 individual plaintiffs filed a petition in intervention seeking to be added as plaintiffs in the KMCO Case and seeking unspecified damages. On March 24, 2021, Indian Harbor Insurance Company, together with other insurance companies and underwriters, filed a property damage lawsuit relating to the KMCO chemical refinery incident against Grainger and another defendant in the Harris County, Texas District Court, seeking reimbursement of insurance payments made to or on behalf of KMCO and ORG, the insured parties under their respective policies, and other damages. Grainger is investigating each of the various claims against the Company relating to the KMCO chemical refinery incident and intends to contest these matters vigorously. Also, as a government contractor selling to federal, state and local governmental entities, the Company may be subject to governmental or regulatory inquiries or audits or other proceedings, including those related to contract administration, pricing and product compliance. From time to time, the Company has also been named, along with numerous other nonaffiliated companies, as 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 manufactured by third parties purportedly distributed by the Company. While several lawsuits have been dismissed in the past based on the lack of product identification, if a specific product distributed by the Company is identified in any pending or future lawsuits, the Company will seek to exercise indemnification remedies against the product manufacturer to the extent available. 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 the costs of defense, of lawsuits involving claims of exposure to asbestos. The Company believes it has strong legal and factual defenses and intends to continue defending itself vigorously in these lawsuits. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenues | The following tables present the Company's percentage of revenue by reportable segment and by major customer industry: Three Months Ended September 30, 2022 2021 High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) Contractors 8 % 14 % 9 % 9 % 15 % 10 % Commercial 10 % 15 % 11 % 9 % 15 % 10 % Government 17 % 2 % 14 % 18 % 3 % 15 % Healthcare 6 % 2 % 5 % 7 % 2 % 6 % Manufacturing 32 % 30 % 32 % 29 % 30 % 29 % Retail/Wholesale 8 % 15 % 9 % 9 % 10 % 10 % Transportation 6 % 3 % 6 % 5 % 3 % 5 % Other (1) 13 % 19 % 14 % 14 % 22 % 15 % Total net sales 100 % 100 % 100 % 100 % 100 % 100 % Percent of total company revenue 80 % 18 % 100 % 79 % 19 % 100 % (1) Other primarily includes revenue from industries and customers that are not material individually, including agriculture, mining, natural resources and resellers not aligned to a major industry segment. (2) Total Company includes other businesses, which includes the Cromwell business. Other businesses account for approximately 2% of revenue for both the three months ended September 30, 2022 and 2021. Nine Months Ended September 30, 2022 2021 High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) Contractors 9 % 15 % 10 % 9 % 15 % 10 % Commercial 10 % 15 % 11 % 9 % 15 % 10 % Government 17 % 3 % 14 % 19 % 3 % 15 % Healthcare 6 % 2 % 5 % 7 % 2 % 6 % Manufacturing 31 % 30 % 31 % 30 % 29 % 29 % Retail/Wholesale 9 % 15 % 10 % 9 % 10 % 10 % Transportation 6 % 3 % 5 % 5 % 3 % 5 % Other (1) 12 % 17 % 14 % 12 % 23 % 15 % Total net sales 100 % 100 % 100 % 100 % 100 % 100 % Percent of total company revenue 80 % 18 % 100 % 78 % 20 % 100 % (1) Other primarily includes revenue from industries and customers that are not material individually, including agriculture, mining, natural resources and resellers not aligned to a major industry segment. (2) Total Company includes other businesses, which includes the Cromwell business. Other businesses account for approximately 2% of revenue for both the nine months ended September 30, 2022 and 2021. |
PROPERTY, BUILDINGS AND EQUIP_2
PROPERTY, BUILDINGS AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Buildings and Equipment | Property, buildings and equipment consisted of the following (in millions of dollars): As of September 30, 2022 December 31, 2021 Land $ 329 $ 329 Building, structures and improvements 1,403 1,431 Furniture, fixtures, machinery and equipment 1,630 1,567 Property, buildings and equipment $ 3,362 $ 3,327 Less accumulated depreciation and amortization 1,953 1,903 Property, buildings and equipment – net $ 1,409 $ 1,424 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Balances and Changes in Carrying Amounts of Goodwill | The balances and changes in the carrying amount of Goodwill (net of cumulative goodwill impairments) by segment are as follows (in millions of dollars): High-Touch Solutions N.A. Endless Assortment Other Total Balance at January 1, 2021 $ 321 $ 70 $ — $ 391 Translation — (7) — (7) Balance at December 31, 2021 321 63 — 384 Translation (10) (11) — (21) Balance at September 30, 2022 $ 311 $ 52 $ — $ 363 |
Schedule of Balance in Intangible Assets, Net | The balances in Intangible assets – net are as follows (in millions of dollars ): As of September 30, 2022 December 31, 2021 Weighted average life Gross carrying amount Accumulated amortization/impairment Net carrying amount Gross carrying amount Accumulated amortization/impairment Net carrying amount Customer lists and relationships 11.7 years $ 215 $ 177 $ 38 $ 221 $ 176 $ 45 Trademarks, trade names and other 14.3 years 33 24 9 36 24 12 Non-amortized trade names and other Indefinite 20 — 20 25 — 25 Capitalized software 4.2 years 554 399 155 525 369 156 Total intangible assets 7.0 years $ 822 $ 600 $ 222 $ 807 $ 569 $ 238 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | long-term, current maturities and debt issuance costs and discounts – net, consisted of the following (in millions of dollars): As of September 30, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value 4.60% senior notes due 2045 $ 1,000 $ 899 $ 1,000 $ 1,284 1.85% senior notes due 2025 500 468 500 509 4.20% senior notes due 2047 400 335 400 492 3.75% senior notes due 2046 400 314 400 459 Japanese yen term loan 62 62 78 78 Other (31) (31) 7 7 Subtotal 2,331 2,047 2,385 2,829 Less current maturities (16) (16) — — Debt issuance costs and discounts – net of amortization (21) (21) (23) (23) Long-term debt $ 2,294 $ 2,010 $ 2,362 $ 2,806 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Effect of Fair Value Hedges in Interest Expense, Net | The effect of the Company's fair value hedges on the Condensed Consolidated Statements of Earnings in Interest expense – net for the three and nine months ended September 30, 2022 and 2021, respectively, is as follows (in millions of dollars): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gain or (loss): Interest rate swaps: Hedged item $ 11 $ 3 $ 36 $ 12 Derivatives designated as hedging instrument $ (11) $ (3) $ (36) $ (12) |
Schedule of Fair Value and Carrying Amounts of Outstanding Derivative Instruments | The fair value and carrying amounts of outstanding derivative instruments on the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021, respectively, were as follows (in millions of dollars): As of September 30, 2022 December 31, 2021 Balance Sheet Classification Fair Value and Carrying Amounts Cross-currency swap Prepaid expenses and other current assets $ 1 $ — Other non-current liabilities $ — $ 2 Interest rate swaps Other assets $ — $ 1 Other non-current liabilities $ 35 $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Summary of Segment Results | Following is a summary of segment results (in millions of dollars): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net sales Operating earnings (losses) Net sales Operating earnings (losses) Net sales Operating earnings (losses) Net sales Operating earnings (losses) High-Touch Solutions N.A. $ 3,180 $ 550 $ 2,663 $ 387 $ 9,111 $ 1,506 $ 7,558 $ 975 Endless Assortment 701 58 646 59 2,117 175 1,913 172 Other 61 (5) 63 (8) 198 (10) 192 (17) Total Company $ 3,942 $ 603 $ 3,372 $ 438 $ 11,426 $ 1,671 $ 9,663 $ 1,130 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Accrued sales incentives | $ 96 | $ 96 | $ 73 | ||
Service Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total company revenue (as a percent) | 1% | 1% | 1% | 1% |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenues (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 100% | 100% | 100% | 100% |
Percent of total company revenue | 100% | 100% | 100% | 100% |
Operating earnings (losses) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total company revenue (as a percent) | 2% | 2% | 2% | 2% |
Contractors | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 9% | 10% | 10% | 10% |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 11% | 10% | 11% | 10% |
Government Customer | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 14% | 15% | 14% | 15% |
Healthcare Customer | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 5% | 6% | 5% | 6% |
Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 32% | 29% | 31% | 29% |
Retail/Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 9% | 10% | 10% | 10% |
Transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 6% | 5% | 5% | 5% |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 14% | 15% | 14% | 15% |
High-Touch Solutions N.A. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 100% | 100% | 100% | 100% |
Percent of total company revenue | 80% | 79% | 80% | 78% |
High-Touch Solutions N.A. | Contractors | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 8% | 9% | 9% | 9% |
High-Touch Solutions N.A. | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 10% | 9% | 10% | 9% |
High-Touch Solutions N.A. | Government Customer | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 17% | 18% | 17% | 19% |
High-Touch Solutions N.A. | Healthcare Customer | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 6% | 7% | 6% | 7% |
High-Touch Solutions N.A. | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 32% | 29% | 31% | 30% |
High-Touch Solutions N.A. | Retail/Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 8% | 9% | 9% | 9% |
High-Touch Solutions N.A. | Transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 6% | 5% | 6% | 5% |
High-Touch Solutions N.A. | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 13% | 14% | 12% | 12% |
Endless Assortment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 100% | 100% | 100% | 100% |
Percent of total company revenue | 18% | 19% | 18% | 20% |
Endless Assortment | Contractors | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 14% | 15% | 15% | 15% |
Endless Assortment | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 15% | 15% | 15% | 15% |
Endless Assortment | Government Customer | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 2% | 3% | 3% | 3% |
Endless Assortment | Healthcare Customer | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 2% | 2% | 2% | 2% |
Endless Assortment | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 30% | 30% | 30% | 29% |
Endless Assortment | Retail/Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 15% | 10% | 15% | 10% |
Endless Assortment | Transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 3% | 3% | 3% | 3% |
Endless Assortment | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales (as a percent) | 19% | 22% | 17% | 23% |
PROPERTY, BUILDINGS AND EQUIP_3
PROPERTY, BUILDINGS AND EQUIPMENT (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | $ 3,362 | $ 3,327 |
Less accumulated depreciation and amortization | 1,953 | 1,903 |
Property, buildings and equipment – net | 1,409 | 1,424 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | 329 | 329 |
Building, Structures and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | 1,403 | 1,431 |
Furniture, Fixtures, Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | $ 1,630 | $ 1,567 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Balances and Changes in Carrying Amounts of Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 384 | $ 391 |
Translation | (21) | (7) |
Goodwill, ending balance | 363 | 384 |
Other | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | 0 |
Translation | 0 | 0 |
Goodwill, ending balance | 0 | 0 |
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 321 | 321 |
Translation | (10) | 0 |
Goodwill, ending balance | 311 | 321 |
Endless Assortment | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 63 | 70 |
Translation | (11) | (7) |
Goodwill, ending balance | $ 52 | $ 63 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Impairments | $ 0 | $ 0 | $ 0 |
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Cumulative goodwill impairments | 137 | ||
Other | |||
Segment Reporting Information [Line Items] | |||
Cumulative goodwill impairments | 105 | ||
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Cumulative goodwill impairments | $ 32 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Balance in Intangible Assets, Net (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-lived intangible assets, useful life | 7 years | |
Total intangible assets, gross | $ 822 | $ 807 |
Finite-lived intangible assets, accumulated amortization | 600 | 569 |
Total intangible assets, net | $ 222 | 238 |
Customer lists and relationships | ||
Finite-lived intangible assets, useful life | 11 years 8 months 12 days | |
Finite-lived intangible assets, gross | $ 215 | 221 |
Finite-lived intangible assets, accumulated amortization | 177 | 176 |
Finite-lived intangible assets, net | $ 38 | 45 |
Trademarks, trade names and other | ||
Finite-lived intangible assets, useful life | 14 years 3 months 18 days | |
Finite-lived intangible assets, gross | $ 33 | 36 |
Finite-lived intangible assets, accumulated amortization | 24 | 24 |
Finite-lived intangible assets, net | 9 | 12 |
Non-amortized trade names and other | ||
Finite-lived intangible assets, gross | 20 | 25 |
Finite-lived intangible assets, accumulated amortization | 0 | 0 |
Indefinite-lived intangible assets, carrying amount | $ 20 | 25 |
Capitalized software | ||
Finite-lived intangible assets, useful life | 4 years 2 months 12 days | |
Finite-lived intangible assets, gross | $ 554 | 525 |
Finite-lived intangible assets, accumulated amortization | 399 | 369 |
Finite-lived intangible assets, net | $ 155 | $ 156 |
DEBT - Long-Term Debt Instrumen
DEBT - Long-Term Debt Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Feb. 29, 2020 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 2,331 | $ 2,385 | |
Other | (31) | (7) | |
Debt issuance costs and discounts – net of amortization | (21) | (23) | |
Long-term debt | 2,294 | 2,362 | |
Other, fair value | (31) | (7) | |
Long-term debt, gross, fair value | 2,047 | 2,829 | |
Current maturities | (16) | 0 | |
Less current maturities | (16) | 0 | |
Debt issuance costs and discounts, fair value | (21) | (23) | |
Long-term debt, excluding current maturities, , fair value | 2,010 | 2,806 | |
Yen Denominated Bank Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 62 | 78 | |
Long-term debt, fair value | 62 | 78 | |
Senior Notes, 4.60% due 2045 | Senior notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 1,000 | 1,000 | |
Long-term debt, fair value | $ 899 | 1,284 | |
Interest rate | 4.60% | ||
Unsecured Senior Notes, 1.85% | Senior notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 500 | 500 | |
Long-term debt, fair value | $ 468 | 509 | |
Interest rate | 1.85% | 1.85% | |
Senior Notes, 4.20% due 2047 | Senior notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 400 | 400 | |
Long-term debt, fair value | $ 335 | 492 | |
Interest rate | 4.20% | ||
Senior Notes, 3.75% due 2046 | Senior notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 400 | 400 | |
Long-term debt, fair value | $ 314 | $ 459 | |
Interest rate | 3.75% |
DEBT - Narrative (Details)
DEBT - Narrative (Details) $ in Millions | 1 Months Ended | ||||||
Aug. 31, 2020 JPY (¥) payment | Feb. 29, 2020 | Sep. 30, 2022 USD ($) | Sep. 30, 2022 JPY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 JPY (¥) | Dec. 31, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 2,331 | $ 2,385 | |||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt principal amount | $ 2,300 | ||||||
Debt issuance costs | $ 29 | ||||||
Yen Denominated Bank Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 62 | 78 | |||||
5-Year Unsecured Revolving Line Of Credit | Domestic Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, term | 5 years | ||||||
Unsecured Senior Notes, 1.85% | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 1.85% | 1.85% | 1.85% | ||||
Long-term debt, gross | $ 500 | $ 500 | |||||
Term Loan Agreement, 0.05% | Yen Denominated Bank Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt principal amount | ¥ | ¥ 9,000,000,000 | ||||||
Long-term debt, gross | ¥ | ¥ 62,000,000 | ¥ 78,000,000 | |||||
Number of semi-annual principal payments | payment | 4 | ||||||
Average interest rate | 0.05% |
DERIVATIVE INSTRUMENTS - Narrat
DERIVATIVE INSTRUMENTS - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Feb. 29, 2020 |
Derivative [Line Items] | |||
Derivative instruments and hedges, liabilities | $ 465 | $ 501 | |
Unsecured Senior Notes, 1.85% | Senior notes | |||
Derivative [Line Items] | |||
Interest rate | 1.85% | 1.85% | |
Designated as Hedging Instrument | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 34 | 34 | |
Designated as Hedging Instrument | Fair Value Hedging | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 500 | $ 500 |
DERIVATIVE INSTRUMENTS - Effect
DERIVATIVE INSTRUMENTS - Effect of Fair Value Hedges in Interest Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest income (expense), net | $ (25) | $ (22) | $ (70) | $ (65) |
Other Contract | Fair Value Hedging | Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest income (expense), net | 11 | 3 | 36 | 12 |
Interest rate swaps | Fair Value Hedging | Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest income (expense), net | $ (11) | $ (3) | $ (36) | $ (12) |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value and Carrying Amounts of Outstanding Derivative Instruments (Details) - Designated as Hedging Instrument - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Cross-currency swap | Prepaid expenses and other current assets | ||
Derivative [Line Items] | ||
Fair value and carrying value of derivative assets | $ 1 | $ 0 |
Cross-currency swap | Other non-current liabilities | ||
Derivative [Line Items] | ||
Fair value and carrying value of derivative liabilities | 0 | 2 |
Interest rate swaps | Other non-current liabilities | ||
Derivative [Line Items] | ||
Fair value and carrying value of derivative liabilities | 35 | 0 |
Interest rate swaps | Other assets | ||
Derivative [Line Items] | ||
Fair value and carrying value of derivative assets | $ 0 | $ 1 |
DIVIDEND (Details)
DIVIDEND (Details) | Oct. 26, 2022 $ / shares |
Subsequent event | |
Subsequent Event [Line Items] | |
Dividend declared (in dollars per share) | $ 1.72 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Summary o
SEGMENT INFORMATION - Summary of Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Total net sales | $ 3,942 | $ 3,372 | $ 11,426 | $ 9,663 |
Segment operating earnings | 603 | 438 | 1,671 | 1,130 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 61 | 63 | 198 | 192 |
Segment operating earnings | (5) | (8) | (10) | (17) |
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 3,180 | 2,663 | 9,111 | 7,558 |
Segment operating earnings | 550 | 387 | 1,506 | 975 |
Endless Assortment | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 701 | 646 | 2,117 | 1,913 |
Segment operating earnings | $ 58 | $ 59 | $ 175 | $ 172 |
CONTINGENCIES AND LEGAL MATTE_2
CONTINGENCIES AND LEGAL MATTERS (Details) | 12 Months Ended | ||
Apr. 01, 2021 plantiff | Jan. 01, 2021 plantiff | Dec. 31, 2019 plantiff death | |
Commitments and Contingencies Disclosure [Abstract] | |||
Number of plaintiffs | plantiff | 24 | 6 | 186 |
Number of deaths | death | 1 |