COVER
COVER - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 14, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 35,235,880,897 | ||
Entity Common Stock, Shares Outstanding | 49,173,357 | ||
Documents Incorporated by Reference | Portions of the registrant's definitive proxy statement to be filed in connection with the annual meeting of shareholders to be held on April 24, 2024, are incorporated by reference into Part III of this Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (Form 10-K) where indicated. The registrant's definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. | ||
Entity Central Index Key | 0000277135 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Chicago, Illinois |
Auditor Firm ID | 42 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net sales | $ 16,478 | $ 15,228 | $ 13,022 |
Cost of goods sold | 9,982 | 9,379 | 8,302 |
Gross profit | 6,496 | 5,849 | 4,720 |
Selling, general and administrative expenses | 3,931 | 3,634 | 3,173 |
Operating earnings | 2,565 | 2,215 | 1,547 |
Other (income) expense: | |||
Interest expense – net | 93 | 93 | 87 |
Other – net | (28) | (24) | (25) |
Total other expense – net | 65 | 69 | 62 |
Earnings before income taxes | 2,500 | 2,146 | 1,485 |
Income tax provision | 597 | 533 | 371 |
Net earnings | 1,903 | 1,613 | 1,114 |
Less net earnings attributable to noncontrolling interest | 74 | 66 | 71 |
Net earnings attributable to W.W. Grainger, Inc. | $ 1,829 | $ 1,547 | $ 1,043 |
Earnings per share: | |||
Basic (in dollars per share) | $ 36.39 | $ 30.22 | $ 19.94 |
Diluted (in dollars per share) | $ 36.23 | $ 30.06 | $ 19.84 |
Weighted average number of shares outstanding: | |||
Basic (in shares) | 49.9 | 50.9 | 51.9 |
Diluted (in shares) | 50.1 | 51.1 | 52.2 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 1,903 | $ 1,613 | $ 1,114 |
Other comprehensive earnings (losses): | |||
Foreign currency translation adjustments – net of reclassification to earnings | (11) | (101) | (64) |
Postretirement benefit plan losses – net of tax expense of $2, $6, and $0, respectively | (2) | (17) | 0 |
Total other comprehensive earnings (losses) | (13) | (118) | (64) |
Comprehensive earnings – net of tax | 1,890 | 1,495 | 1,050 |
Less comprehensive earnings (losses) attributable to noncontrolling interest | |||
Net earnings | 74 | 66 | 71 |
Foreign currency translation adjustments | (21) | (34) | (29) |
Total comprehensive earnings (losses) attributable to noncontrolling interest | 53 | 32 | 42 |
Comprehensive earnings attributable to W.W. Grainger, Inc. | $ 1,837 | $ 1,463 | $ 1,008 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS Parentheticals - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Postretirement benefit plan gains (losses), tax | $ 2 | $ 6 | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 660 | $ 325 |
Accounts receivable (less allowance for credit losses of $35 and $36, respectively) | 2,192 | 2,133 |
Inventories – net | 2,266 | 2,253 |
Prepaid expenses and other current assets | 156 | 266 |
Total current assets | 5,274 | 4,977 |
Property, buildings and equipment – net | 1,658 | 1,461 |
Goodwill | 370 | 371 |
Intangibles – net | 234 | 232 |
Operating lease right-of-use | 429 | 367 |
Other assets | 182 | 180 |
Total assets | 8,147 | 7,588 |
Current liabilities | ||
Current maturities | 34 | 35 |
Trade accounts payable | 954 | 1,047 |
Accrued compensation and benefits | 327 | 334 |
Operating lease liability | 71 | 68 |
Accrued expenses | 397 | 474 |
Income taxes payable | 48 | 52 |
Total current liabilities | 1,831 | 2,010 |
Long-term debt | 2,266 | 2,284 |
Long-term operating lease liability | 381 | 318 |
Deferred income taxes and tax uncertainties | 104 | 121 |
Other non-current liabilities | 124 | 120 |
Shareholders' equity | ||
Cumulative preferred stock – $5 par value – 12,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common Stock – $0.50 par value – 300,000,000 shares authorized; 109,659,219 shares issued | 55 | 55 |
Additional contributed capital | 1,355 | 1,310 |
Retained earnings | 12,162 | 10,700 |
Accumulated other comprehensive losses | (172) | (180) |
Treasury stock, at cost – 60,341,817 and 59,402,896 shares, respectively | (10,285) | (9,445) |
Total W.W. Grainger, Inc. shareholders’ equity | 3,115 | 2,440 |
Noncontrolling interest | 326 | 295 |
Total shareholders' equity | 3,441 | 2,735 |
Total liabilities and shareholders' equity | $ 8,147 | $ 7,588 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 35 | $ 36 |
Cumulative preferred stock, par value (in dollars per share) | $ 5 | $ 5 |
Cumulative preferred stock, shares authorized (in shares) | 12,000,000 | 12,000,000 |
Cumulative preferred stock, shares issued (in shares) | 0 | 0 |
Cumulative preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 109,659,219 | 109,659,219 |
Treasury stock, common, shares (in shares) | 60,341,817 | 59,402,896 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net earnings | $ 1,903 | $ 1,613 | $ 1,114 |
Provision for credit losses | 23 | 19 | 18 |
Deferred income taxes and tax uncertainties | (9) | 8 | 27 |
Depreciation and amortization | 214 | 205 | 187 |
Non-cash lease expense | 76 | 70 | 50 |
Net losses (gains) from sales of assets and business divestitures | 17 | (14) | (6) |
Stock-based compensation | 62 | 48 | 42 |
Change in operating assets and liabilities: | |||
Accounts receivable | (98) | (436) | (324) |
Inventories | (16) | (412) | (152) |
Prepaid expenses and other assets | 101 | (158) | (15) |
Trade accounts payable | (65) | 225 | 54 |
Operating lease liabilities | (88) | (76) | (68) |
Accrued liabilities | (91) | 218 | 59 |
Income taxes – net | (4) | 42 | (26) |
Other non-current liabilities | 6 | (19) | (23) |
Net cash provided by operating activities | 2,031 | 1,333 | 937 |
Cash flows from investing activities: | |||
Capital expenditures | (445) | (256) | (255) |
Proceeds from sales of assets and business divestitures | 21 | 28 | 29 |
Other – net | 2 | (35) | 0 |
Net cash used in investing activities | (422) | (263) | (226) |
Cash flows from financing activities: | |||
Proceeds from debt | 7 | 16 | 0 |
Payments of debt | (37) | (15) | (8) |
Proceeds from stock options exercised | 34 | 26 | 48 |
Payments for employee taxes withheld from stock awards | (37) | (23) | (30) |
Purchases of treasury stock | (850) | (603) | (695) |
Cash dividends paid | (392) | (370) | (357) |
Other – net | (3) | (3) | 3 |
Net cash used in financing activities | (1,278) | (972) | (1,039) |
Exchange rate effect on cash and cash equivalents | 4 | (14) | (16) |
Net change in cash and cash equivalents | 335 | 84 | (344) |
Cash and cash equivalents at beginning of year | 325 | 241 | 585 |
Cash and cash equivalents at end of period | 660 | 325 | 241 |
Supplemental cash flow information: | |||
Cash payments for interest (net of amounts capitalized) | 109 | 91 | 87 |
Cash payments for income taxes | $ 615 | $ 479 | $ 377 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' 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 | $ 55 | $ 1,239 | $ 8,779 | $ (61) | $ (8,184) | $ 265 | ||
Stock-based compensation | 60 | 31 | 28 | 1 | |||||
Purchases of treasury stock | (700) | (699) | (1) | ||||||
Net earnings | 1,114 | 1,043 | 71 | ||||||
Other comprehensive earnings (losses) | (64) | (35) | (29) | ||||||
Capital contribution | 2 | 2 | |||||||
Cash dividends paid | (357) | (334) | (23) | ||||||
Ending balance at Dec. 31, 2021 | 2,160 | $ 12 | 55 | 1,270 | 9,500 | $ 12 | (96) | (8,855) | 286 |
Stock-based compensation | 53 | 40 | 12 | 1 | |||||
Purchases of treasury stock | (603) | (602) | (1) | ||||||
Net earnings | 1,613 | 1,547 | 66 | ||||||
Other comprehensive earnings (losses) | (118) | (84) | (34) | ||||||
Cash dividends paid | (370) | 0 | (347) | (23) | |||||
Ending balance at Dec. 31, 2022 | 2,735 | 55 | 1,310 | 10,700 | (180) | (9,445) | 295 | ||
Stock-based compensation | 60 | 46 | 12 | 2 | |||||
Purchases of treasury stock | (853) | (852) | (1) | ||||||
Net earnings | 1,903 | 1,829 | 74 | ||||||
Other comprehensive earnings (losses) | (13) | 8 | (21) | ||||||
Capital contribution | 2 | (1) | 3 | ||||||
Cash dividends paid | (393) | (367) | (26) | ||||||
Ending balance at Dec. 31, 2023 | $ 3,441 | $ 55 | $ 1,355 | $ 12,162 | $ (172) | $ (10,285) | $ 326 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parentheticals) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends paid per share (in dollars per share) | $ 7.30 | $ 6.78 | $ 6.39 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES W.W. Grainger, Inc. is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America, 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. Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its subsidiaries over which the Company exercises control. All significant intercompany transactions are eliminated from the Consolidated Financial Statements. The Company has a controlling ownership interest in MonotaRO, the endless assortment business in Japan, with the residual representing the noncontrolling interest. The Company reports MonotaRO on a one-month calendar lag allowing for the timely preparation of financial statements. This one-month reporting lag is with the exception of significant transactions or events that occur during the intervening period. Use of Estimates The preparation of the Company's Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions affecting reported amounts in the Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. Reclassifications Certain reclassifications have been made to prior year amounts in Grainger's Consolidated Statements of Cash Flows to conform with the current year presentation. The Company reclassified amounts to separately disclose Non-cash lease expense as an adjustment to reconcile net earnings to net cash provided by operating activities and Operating lease liabilities as a change in operating assets and liabilities. Previously, the net activity for these amounts were included in Depreciation and amortization. The change had no effect on previously reported results including net cash provided by (used in) operating, investing and financing activities or net earnings for the twelve months ended December 31, 2023, 2022 and 2021. Foreign Currency Translation The U.S. dollar is the Company's reporting currency for all periods presented. The financial statements of the Company’s foreign operating subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of the Company’s foreign operating subsidiaries are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at average rates in effect during the period. Translation gains or losses are recorded as a separate component of other comprehensive earnings (losses). Revenue Recognition The Company recognizes revenue when a sales arrangement with a customer exists (e.g., contract, purchase orders, others), the transaction price is fixed or determinable and the Company has satisfied its performance obligation per the sales arrangement. The majority of Company revenue originates from contracts with a single performance obligation to deliver products, whereby performance obligations are satisfied when control of the product is transferred to the customer per the arranged shipping terms. Some Company contracts contain a combination of product sales and services, which are distinct and accounted for as separate performance obligations and are satisfied when the services are rendered. Total service revenue is not material and accounted for approximately 1% of the Company's revenue for the years ended December 31, 2023, 2022 and 2021. The Company’s revenue is measured at the determinable transaction price, net of any variable considerations granted to customers and any taxes collected from customers and subsequently remitted to governmental authorities. Variable considerations include rights to return products and sales incentives, which primarily consist of volume rebates. These variable considerations are estimated throughout the year based on various factors, including contract terms, historical experience and performance levels. Total accrued sales returns were approximately $52 million and $38 million as of December 31, 2023 and 2022, respectively, and are reported as a reduction of Accounts receivable – net. Total accrued sales incentives were approximately $114 million and $102 million as of December 31, 2023 and 2022, respectively, and are reported as part of Accrued expenses. The Company records a contract asset when it has a right to payment from a customer that is conditioned on events other than the passage of time. The Company also records a contract liability when customers prepay but the Company has not yet satisfied its performance obligation. The Compa ny did not have any material unsatisfied performance obligations, contract assets or liabilities as of December 31, 2023 and 2022. Cost of Goods Sold (COGS) COGS, exclusive of depreciation and amortization, includes the purchase cost of goods sold net of vendor considerations, in-bound shipping costs, outbound shipping and handling costs and service costs. The Company receives vendor considerations, such as rebates to promote their products, which are generally recorded as a reduction to COGS. Rebates earned from vendors that are based on product purchases are capitalized into inventory and rebates earned based on products sold are credited directly to COGS. Total accrued vendor rebates were $155 million and $136 million as of December 31, 2023 and 2022, respectively, and are reported in Trade accounts payable. Selling, General and Administrative Expenses (SG&A) Company SG&A is primarily comprised of payroll and benefits, advertising, depreciation and amortization, lease, indirect purchasing, supply chain and branch operations, technology, and selling expenses, as well as other types of general and administrative costs. Advertising Advertising costs, which include online marketing, are generally expensed in the year the related advertisement is first presented or when incurred. Total advertising expense was $638 million, $519 million and $402 million for 2023, 2022 and 2021, respectively. Stock Incentive Plans The Company measures all share-based payments using fair-value-based methods and records compensation expense on a straight-line basis over the vesting periods, net of estimated forfeitures. Income Taxes The Company recognizes the provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. Also, the Company evaluates deferred income taxes to determine if valuation allowances are required using a “more likely than not” standard. This assessment considers the nature, frequency and amount of book and taxable income and losses, the duration of statutory carryback and forward periods, future reversals of existing taxable temporary differences and tax planning strategies, among other matters . The Company recognizes tax benefits from uncertain tax positions only if (based on the technical merits of the position) it is more likely than not that the tax positions will be sustained on examination by the tax authority. The Company recognizes interest expense and penalties to its tax uncertainties in the provision for income taxes. Other Comprehensive Earnings (Losses) The Company's Other comprehensive earnings (losses) include foreign currency translation adjustments and unrecognized gains (losses) on postretirement and other employment-related benefit plans. Accumulated other comprehensive earnings (losses) (AOCE) are presented separately as part of shareholders' equity. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at time of purchase to be cash equivalents. Concentration of Credit Risk The Company places temporary cash investments with institutions of high credit quality and, by policy, limits the amount of credit exposure to any one institution. Also, the Company has a broad customer base representing many diverse industries across North America, Japan and U.K. Consequently, no significant concentration of credit risk is considered to exist. Accounts Receivable and Allowance for Credit Losses The Company’s accounts receivable arises primarily from sales on credit to customers and are stated at their estimated net realizable value. The Company establishes allowances for credit losses on customer accounts that are potentially uncollectible. These allowances are determined based on several factors, including the age of the receivables, historical collection trends and economic conditions that may have an impact on a specific industry, group of customers or a specific customer. The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivable. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity quality indicators for industry groups, customer classes or individual customers. Inventories Company inventories primarily consist of merchandise purchased for resale. The Company uses the last-in, first-out (LIFO) method, valued at the lower of cost or market, to account for approximately 77% of total inventory and the first-in, first-out (FIFO) method, valued at the lower of cost or net realizable value, for the remaining inventory. The Company regularly reviews inventory to evaluate continued demand and records excess and obsolete provisions representing the difference between excess and obsolete inventories and market value. Estimated market value considers various variables, including product demand, aging and shelf life, market conditions, and liquidation or disposition history and values. If FIFO had been used for all of the Company’s inventories, they would have been $770 million and $693 million higher than reported as of December 31, 2023 and December 31, 2022, respectively. Concurrently, net earnings would have increased by $58 million, $139 million and $49 million for the years ended December 31, 2023, 2022 and 2021, respectively. Property, Buildings and Equipment Property, buildings and equipment are stated at cost, less accumulated depreciation. Depreciation is computed over the estimated useful lives of the asset classes using the straight-line method. Useful lives for buildings, structures and improvements range from 10 to 50 years and furniture, fixtures, machinery and equipment from three Long-Lived Assets The carrying value of long-lived assets, primarily property, buildings and equipment and amortizable intangibles, is evaluated whenever events or changes in circumstances indicate that the carrying value of the asset group may be impaired. An impairment loss is recognized when estimated undiscounted future cash flows resulting from use of the asset, including disposition, are less than their carrying value. Impairment is measured as the amount by which the asset's carrying amount exceeds the fair value. Leases The Company leases certain properties, buildings and equipment (including branches, warehouses, DCs and office space) under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company determines if an arrangement contains a lease at inception. Leases with an initial term of more than 12 months are recorded on the balance sheet as right-of-use (ROU) assets representing the right to use the underlying asset for the lease term and the corresponding current and long-term lease liabilities representing the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement or possession date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined using the incremental borrowing rate based on the information available at the lease commencement date. The incremental borrowing rate, the ROU asset and the lease liability are re-evaluated upon a lease modification. Certain lease agreements include variable lease payments that primarily include payments for non-lease components including pass-through operating expenses such as certain maintenance costs and utilities, and payments for non-components such as real estate taxes and insurance. Lease agreements with fixed lease and non-lease components are generally accounted for as a single lease component for all underlying classes of assets. Certain of the Company’s lease arrangements contain renewal provisions from one The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in SG&A. Goodwill and Other Intangible Assets In a business acquisition, the Company recognizes goodwill as the excess purchase price of an acquired reporting unit over the net amount assigned to assets acquired including intangible assets and liabilities assumed. Acquired intangibles include both assets with indefinite lives and assets that are subject to amortization, which are amortized straight-line over their estimated useful lives. The Company tests goodwill and indefinite-lived intangibles for impairment annually during the fourth quarter and more frequently if impairment indicators exist. The Company performs qualitative assessments of significant events and circumstances, such as reporting units' historical and current results, assumptions regarding future performance, strategic initiatives and overall economic factors to determine the existence of impairment indicators and assess if it is more likely than not that the fair value of the reporting unit or indefinite-lived intangible asset is less than its carrying value that would necessitate a quantitative impairment test. In the quantitative test, Grainger compares the carrying value of the reporting unit or an indefinite-lived intangible asset with its fair value. Any excess of the carrying value over fair value is recorded as an impairment charge, presented as part of SG&A. The fair value of reporting units is calculated primarily using the discounted cash flow method and utilizing value indicators from a market approach to evaluate the reasonableness of the resulting fair values. Estimates of market-participant risk-adjusted weighted average cost of capital are used as a basis for determining the discount rates to apply to the reporting units’ future expected cash flows and terminal value. The Company’s indefinite-lived intangibles are primarily trade names. The fair value of trade names is calculated primarily using the relief-from-royalty method, which estimates the expected royalty savings attributable to the ownership of the trade name asset. The key assumptions when valuing a trade name are the revenue base, the royalty rate and the discount rate. Additionally, the Company capitalizes certain costs related to the purchase and development of internal-use software, which are presented as intangible assets. Amortization of capitalized software is on a straight-line basis over three Accounting for Derivative Instruments The Company recognizes all derivative instruments as assets or liabilities in the Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, for a derivative to be designated as a hedge, the risk management objective and strategy must be documented. Hedge documentation must identify the derivative hedging instrument, the asset or liability or forecasted transaction, type of risk to be hedged, and how the effectiveness of the derivative is assessed prospectively and retrospectively. To assess effectiveness, the Company uses statistical methods and qualitative comparisons of critical terms. The extent to which a derivative has been and is expected to continue to be highly effective at offsetting changes in the fair value or cash flows of the hedged item is assessed and documented periodically. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. For those derivative instruments that are designated and qualify as hedging instruments, the Company classifies them as fair value hedges or cash flow hedges. Contingencies The Company records a liability when a particular contingency is both probable and estimable. If the probable loss cannot be reasonably estimated, no accrual is recorded, but the loss contingency and the reasons to the effect that it cannot be reasonably estimated are disclosed. If a loss is reasonably possible, the Company will provide disclosure to that effect. For further discussion on the Company's contingencies, see Note 14. New Accounting Standards Accounting Pronouncements Recently Issued In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update requires public entities to disclose significant segment expenses and other segment items on an annual and interim basis. The effective date is for fiscal years beginning after December 15, 2023, with the option to early adopt prior to the effective date and requires application on a retrospective basis. The Company is evaluating the impact of the requirements on the related segment reporting disclosures. In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This update requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. The effective date is for fiscal years beginning after December 15, 2024, with the option to early adopt prior to the effective date and should be applied on prospective basis, but retrospective application is permitted. The Company is evaluating the impact of the requirements on the related income tax disclosures. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE [Abstract] | |
REVENUE | REVENUE The Company's revenue is primarily comprised of MRO product sales and related activities, such as freight and services. 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 table presents the Company's percentage of revenue by reportable segment and by major customer industry: Twelve Months Ended December 31, 2023 2022 (1) 2021 (1) High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) Manufacturing 30 % 30 % 30 % 31 % 30 % 30 % 29 % 30 % 30 % Government 19 % 3 % 16 % 18 % 3 % 15 % 19 % 3 % 15 % Wholesale 7 % 16 % 9 % 7 % 16 % 9 % 7 % 14 % 8 % Commercial Services 7 % 12 % 8 % 7 % 13 % 8 % 7 % 13 % 8 % Contractors 5 % 12 % 6 % 5 % 12 % 6 % 5 % 13 % 6 % Healthcare 7 % 2 % 6 % 7 % 2 % 6 % 8 % 2 % 7 % Retail 4 % 4 % 4 % 4 % 4 % 4 % 4 % 5 % 4 % Transportation 4 % 2 % 4 % 4 % 2 % 4 % 4 % 2 % 4 % Utilities 3 % 2 % 3 % 3 % 2 % 3 % 3 % 2 % 3 % Warehousing 4 % — % 3 % 5 % — % 4 % 5 % — % 4 % Other (3) 10 % 17 % 11 % 9 % 16 % 11 % 9 % 16 % 11 % Total net sales 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % Percent of total company revenue 81 % 18 % 100 % 80 % 18 % 100 % 78 % 20 % 100 % (1) Customer industry results for the twelve months ended December 31, 2022, and 2021 were reclassified to reflect the Company's current year classifications, which primarily uses the North American Industry Classification System (NAICS) beginning January 1, 2023. (2) Total Company includes Other, which includes the Cromwell busine ss. Other accounts for approximately 1%, 2% and 2% of revenue for the twelve months ended December 31, 2023, 2022 and 2021, respectively. (3) Other primarily includes revenue from industries and customers that are not material individually, including hospitality, restaurants, property management and natural resources. |
PROPERTY, BUILDINGS AND EQUIPME
PROPERTY, BUILDINGS AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, BUILDINGS AND EQUIPMENT | PROPERTY, BUILDINGS AND EQUIPMENT Grainger's property, buildings and equipment consisted of the following (in millions of dollars): As of December 31, 2023 December 31, 2022 Land and land improvements $ 397 $ 318 Building, structures and improvements 1,469 1,463 Furniture, fixtures, machinery and equipment 1,852 1,662 Property, buildings and equipment $ 3,718 $ 3,443 Less accumulated depreciation and amortization 2,060 1,982 Property, buildings and equipment – net $ 1,658 $ 1,461 Depreciation expense on property, buildings and equipment was $146 million, $139 million and $123 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND OTHER INTANGIBLES [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Grainger completed its annual impairment testing of goodwill and intangible assets during the fourth quarter of 2023 and 2022. Based on the results of that testing, the Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators and concluded that it was more likely than not that the fair value of the reporting units exceeded their carrying amounts at each respective period. High-Touch Solutions N.A. – Canada Business As of December 31, 2023 and 2022, the Canada business reporting unit had goodwill of $124 million and $121 million, respectively. As part of our annual impairment testing, the Company compared the current results to forecasted expectations of the most recent quantitative analysis, along with analyzing macroeconomic conditions, current industry trends and transactions, and other market data of industry peers. The Company also performed various sensitivities over key assumptions, including projections of future operating expenditures used in the analysis. The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators for its Canada business, and concluded it was more likely than not its fair value exceeded its carrying value. The Company's balances and changes in the carrying amount of Goodwill by segment are as follows (in millions of dollars): High-Touch Solutions N.A. Endless Assortment Total Balance at January 1, 2022 $ 321 $ 63 $ 384 Translation (8) (5) (13) Balance at December 31, 2022 313 58 371 Translation 2 (3) (1) Balance at December 31, 2023 $ 315 $ 55 $ 370 Grainger's cumulative goodwill impairment as of December 31, 2023, was $137 million. No goodwill impairment was recorded for the twelve months ended December 31, 2023, 2022 and 2021. The balances and changes in intangible assets – net are as follows (in millions of dollars): As of December 31, 2023 2022 Weighted average life Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer lists and relationships 10.7 years $ 166 $ 153 $ 13 $ 217 $ 181 $ 36 Trademarks, trade names and other 14.9 years 31 23 8 32 22 10 Non-amortized trade names and other Indefinite 20 — 20 22 — 22 Capitalized software 4.2 years 659 466 193 580 416 164 Total intangible assets 6.1 years $ 876 $ 642 $ 234 $ 851 $ 619 $ 232 Amortization expense of intangible assets recorded in SG&A was $64 million, $61 million and $63 million for the years ended December 31, 2023, 2022 and 2021, respectively. Estimated amortization expense for future periods is as follows (in millions of dollars): Year Expense 2024 $ 66 2025 58 2026 46 2027 28 2028 13 Thereafter 3 Total $ 214 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | DEBT Total debt, including long-term, current maturities and debt issuance costs and discounts – net, consisted of the following (in millions of dollars): As of December 31, 2023 2022 Carrying Value Fair Value Carrying Value Fair Value 4.60% senior notes due 2045 $ 1,000 $ 967 $ 1,000 $ 916 1.85% senior notes due 2025 500 483 500 470 4.20% senior notes due 2047 400 361 400 338 3.75% senior notes due 2046 400 336 400 317 Japanese yen term loan 32 32 69 69 Other (13) (13) (29) (29) Subtotal 2,319 2,166 2,340 2,081 Less current maturities (34) (34) (35) (35) Debt issuance costs – net of amortization (19) (19) (21) (21) Long-term debt $ 2,266 $ 2,113 $ 2,284 $ 2,025 Revolving Credit Facility In October 2023, the Company entered into a five There were no borrowings outstanding under the Company's 2023 Credit Facility and terminated 2020 Credit Facility as of December 31, 2023 and 2022. Senior Notes In the years 2015-2020, Grainger issued $2.3 billion in unsecured long-term debt (senior notes) primarily to provide flexibility in funding general working capital needs, share repurchases and 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 the senior notes representing underwriting fees and other expenses. These costs were recorded as a contra-liability in Long-term debt and are being amortized over the term of the senior notes using the straight-line method to Interest expense – net. As of December 31, 2023 and 2022 , the unamortized costs were $19 million and $21 million, respectively. Grainger uses interest rate swaps to manage the risks associated with the 1.85% senior notes. These swaps were designated for hedge accounting treatment as fair value hedges. The resulting carrying value adjustments as of December 31, 2023 and 2022 , are presented in Other in the table above. For further discussion on the Company's hedge accounting policies and derivative instruments, see Note 11. Term Loan In August 2020, MonotaRO entered into a ¥9 billion term loan agreement to fund technology investments and the expansion of its distribution center (DC) network. As of December 31, 2023 and 2022 , the carrying amount of the term loan, including current maturities due within one year , was $32 million a nd $69 million, respectively. The term loan matures in 2024, payable over two equal remaining semi-annual principal installments in 2024 and bears an average interest rate 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 value hierarchy. The Company's debt instruments include affirmative and negative covenants that are usual and customary for companies with similar credit ratings and do not contain any financial performance covenants. The Company was in compliance with all debt covenants as of December 31, 2023 and 2022. The Company's foreign subsidiaries utilize various financing sources for working capital purposes and other operating needs. These financing sources in aggregate were not m aterial as of December 31, 2023 and 2022. The scheduled aggregate principal payments required on the Company's indebtedness, based on the maturity dates defined within the debt arrangements, for the succeeding five years, excluding debt issuance costs and the impact of derivatives, are due as follows (in millions of dollars): Year Payment Amount 2024 $ 34 2025 503 2026 — 2027 — 2028 — Thereafter 1,800 Total $ 2,337 |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2023 | |
EMPLOYEE BENEFITS [Abstract] | |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS The Company provides various retirement benefits to eligible team members, including contributions to defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and other benefits. Eligibility requirements and benefit levels vary depending on team member location. Various foreign benefit plans cover team members in accordance with local legal requirements. Defined Contribution Plans A majority of the Company's U.S. team members are covered by a retirement savings plan, which provides for an automatic contribution e qual to 6% of the eligible team member's total eligible compensation. The total retirement savings plan expense was $85 million, $87 million, and $78 million for 2023, 2022 and 2021, respectively. The Company sponsors additional defined contribution plans available to certain U.S. and foreign team members for which contributions are made by the Company and participating team members. The expense associated with these defined contribution plans totaled $21 million, $11 million and $16 million for 2023, 2022 and 2021, respectively. Postretirement Healthcare Benefits Plans The Company has a postretirement healthcare benefit plan that provides coverage for certain U.S. team mem bers. C overed team members 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 benefits costs were valued with a measurement date of January 1 for each year and consisted of the following components (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 SG&A Service cost $ 2 $ 4 $ 5 Other (income) expense Interest cost 5 4 3 Expected return on assets (6) (8) (8) Amortization of prior service credit (10) (10) (9) Amortization of unrecognized gains (7) (9) (8) Net periodic benefits $ (16) $ (19) $ (17) Reconciliations of the beginning and ending balances of the postretirement benefit asset, which is calculated as of December 31 measurement date, the fair value of plan assets available for benefits and the funded status of the benefit asset follow (in millions of dollars): 2023 2022 Benefit obligation at beginning of year $ 112 $ 153 Service cost 2 4 Interest cost 5 4 Plan participants' contributions 3 3 Actuarial loss (gains) 2 (40) Benefits paid (10) (12) Benefit obligation at end of year $ 114 $ 112 Plan assets available for benefits at beginning of year $ 162 $ 207 Actual returns on plan assets 18 (36) Plan participants' contributions 3 3 Benefits paid (10) (12) Plan assets available for benefits at end of year 173 162 Noncurrent postretirement benefit asset $ 59 $ 50 The amounts recognized in AOCE consisted of the following (in millions of dollars): As of December 31, 2023 2022 Prior service credit $ 23 $ 33 Unrecognized gains 79 77 Deferred tax liability (25) (28) Net accumulated gains $ 77 $ 82 The Company has elected to amortize the amount of net unrecognized gains over a period equal to the average remaining service period for active plan participants expected to retire and receive benefits of approximately 10 years for 2023. The postretirement benefit obligation is determined by applying the terms of the plan and actuarial models. These models include various actuarial assumptions, including discount rates, long-term rates of return on plan assets, healthcare cost trend rate, mortality and cost-sharing between the Company and the retirees. The actuarial loss recognized during the plan year is primarily related to the change in discount rate assumption. The following assumptions were used to determine net periodic benefit co sts as of January 1: 2023 2022 2021 Discount rate 4.92 % 2.57 % 2.17 % Long-term rate of return on plan assets – net of tax 4.04 % 4.04 % 4.04 % Initial healthcare cost trend rate Pre age 65 7.50 % 6.50 % 5.81 % Ultimate healthcare cost trend rate 4.50 % 4.50 % 4.50 % Year ultimate healthcare cost trend rate reached 2033 2030 2026 The following assumptions were used to determine benefit obligations as of December 31: 2023 2022 2021 Discount rate 4.73 % 4.92 % 2.57 % Expected long-term rate of return on plan assets – net of tax 4.04 % 4.04 % 4.04 % Initial healthcare cost trend rate Pre age 65 7.20 % 7.50 % 6.50 % Ultimate healthcare cost trend rate 4.50 % 4.50 % 4.50 % Year ultimate healthcare cost trend rate reached 2033 2033 2030 The Company's investment strategy reflects the long-term nature of the plan obligation and seeks to reach a balance allocation between Fixed Income securities and Equities of approximately 65% and 35%, respectively. Current allocations may differ from targeted allocations based on investment results and other timing factors. The plan's assets are stated at fair value, which represents the net asset value of shares held by the plan in the registered investment companies at the quoted market prices (Level 1 input) or at significant other observable inputs (Level 2 input). The plan assets available for benefits consisted of the following as of December 31 (in millions of dollars): 2023 2022 Asset class: Level 1 inputs: Mutual funds: Funds – municipal/provincial bonds $ — $ 8 Funds – corporate bonds fund 10 3 Level 2 inputs: Fixed income: Corporate bonds 56 57 Government/municipal bonds 9 12 Equity funds 88 73 Plan assets 163 153 Trust assets 10 9 Plan assets available for benefits $ 173 $ 162 The Company forecasts the following benefit payments related to postretirement (which include a projection for expected future team member service) for the next ten years (in millions of dollars): Year Estimated Gross Benefit Payments 2024 $ 9 2025 10 2026 10 2027 9 2028 8 2029-2033 41 Total $ 87 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases certain properties, buildings and equipment (including branches, warehouses, DCs and office space) under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists mainly of operating leases that expire at various dates through 2037. Information related to operating leases is as follows (in millions of dollars): As of December 31, 2023 2022 Right-of-use assets Operating lease right-of-use $ 429 $ 367 Operating lease liabilities Operating lease liability 71 68 Long-term operating lease liability 381 318 Total operating lease liabilities $ 452 $ 386 As of December 31, 2023 2022 Weighted average remaining lease term 7 years 7 years Weighted average incremental borrowing rate 2.19 % 1.46 % Cash paid for operating leases $ 88 $ 76 Right-of-use assets obtained in exchange for operating lease obligations $ 161 $ 96 Rent expense was $102 million, $93 million and $74 million for 2023, 2022 and 2021, respectively. These amounts are net of sublease income of $2 million for 2023, 2022 and 2021. The remaining maturity of existing lease liabilities as of December 31, 2023 are as follows (in millions of dollars): Year Operating Leases 2024 $ 87 2025 87 2026 76 2027 66 2028 57 Thereafter 119 Total lease payments 492 Less interest (40) Present value of lease liabilities $ 452 As of December 31, 2023 and 2022, the Company's finance leases and service contracts with lease arrangements wer e not material. Finance leases are reported in Property, buildings and equipment – net, and as a short and long-term finance lease liability in Accrued expenses and Other non-current liabilities. |
STOCK INCENTIVE PLANS
STOCK INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2023 | |
STOCK INCENTIVE PLANS [Abstract] | |
STOCK INCENTIVE PLANS | STOCK INCENTIVE PLANS The Company maintains stock incentive plans under which the Company may grant a variety of incentive awards to team members and executives, which include restricted stock units (RSUs), performance shares and deferred stock units. As of December 31, 2023, there were 1.4 million shares available for grant under the plans. When awards are exercised or settled, shares of the Company’s treasury stock are issued. Pretax stock-based compensation expense included in SG&A was $62 million, $48 million, and $42 million in 2023, 2022 and 2021, respectively, and was primarily comprised of RSUs. Related income tax benefits recognized in earnings were $34 million, $19 million, and $21 million in 2023, 2022 and 2021, respectively. Restricted Stock Units The Company awards RSUs to certain team members and executives. RSUs vest generally over periods from one The following table summarizes RSU activity (in millions of dollars, except for share and per share amounts): 2023 2022 2021 Shares Weighted Shares Weighted Shares Weighted Beginning nonvested units 191,032 $ 409.77 202,321 $ 318.40 317,414 $ 259.67 Issued 81,174 $ 692.02 96,940 $ 520.67 105,866 $ 406.17 Canceled (7,943) $ 512.31 (17,038) $ 345.30 (36,134) $ 274.74 Vested (91,279) $ 384.92 (91,191) $ 336.99 (184,825) $ 276.34 Ending nonvested units 172,984 $ 550.62 191,032 $ 409.77 202,321 $ 318.40 Fair value of shares vested $ 35 $ 31 $ 51 As of December 31, 2023, there was $64 million of total unrecognized compensation expense related to nonvested RSUs the Company expects to recognize over a weighted average period of 2 years. |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2023 | |
CAPITAL STOCK [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK The Company had no shares of preferred stock outstanding as of December 31, 2023 and 2022. The activity related to outstanding common stock and common stock held in treasury was as follows: 2023 2022 2021 Outstanding Common Stock Treasury Stock Outstanding Common Stock Treasury Stock Outstanding Common Stock Treasury Stock Balance at beginning of period 50,256,323 59,402,896 51,220,205 58,439,014 52,524,391 57,134,828 Exercise of stock options 139,189 (139,189) 101,802 (101,802) 188,444 (188,444) Settlement of restricted stock units – net of 32,800, 31,132 and 61,377 shares retained, respectively 83,795 (83,795) 64,649 (64,649) 127,969 (127,969) Settlement of performance share units – net of 18,521, 10,359 and 9,746 shares retained, respectively 28,135 (28,135) 13,890 (13,890) 12,507 (12,507) Purchase of treasury shares (1,190,040) 1,190,040 (1,144,223) 1,144,223 (1,633,106) 1,633,106 Balance at end of period 49,317,402 60,341,817 50,256,323 59,402,896 51,220,205 58,439,014 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE EARNINGS (LOSSES) (AOCE) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE EARNINGS (LOSSES) (AOCE) | ACCUMULATED OTHER COMPREHENSIVE EARNINGS (LOSSES) (AOCE) The components of AOCE consisted of the following (in millions of dollars): Foreign Currency Translation and Other Defined Postretirement Benefit Plan Other Employment-related Benefit Plans Total Foreign Currency Translation Attributable to Noncontrolling Interests AOCE Attributable to W.W. Grainger, Inc. Balance at December 31, 2021 – net of tax $ (219) $ 99 $ (6) $ (126) $ (30) $ (96) Other comprehensive earnings (loss) before reclassifications – net of tax $ (101) $ (4) $ — $ (105) $ (34) $ (71) Amounts reclassified to net earnings $ — $ (13) $ — $ (13) $ — $ (13) Net current period activity $ (101) $ (17) $ — $ (118) $ (34) $ (84) Balance at December 31, 2022 – net of tax $ (320) $ 82 $ (6) $ (244) $ (64) $ (180) Other comprehensive earnings (loss) before reclassifications – net of tax $ (11) $ 8 $ 3 $ — $ (21) $ 21 Amounts reclassified to net earnings $ — $ (13) $ — $ (13) $ — $ (13) Net current period activity $ (11) $ (5) $ 3 $ (13) $ (21) $ 8 Balance at December 31, 2023 – net of tax $ (331) $ 77 $ (3) $ (257) $ (85) $ (172) |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company's earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates and interest rates. Grainger currently enters into certain derivatives or other financial instruments to hedge against these risks, and may continue to do so in the future. Fair Value Hedges The Company uses interest rate swaps to hedge a portion of its fixed-rate long-term debt. These swaps are treated as fair value hedges and consequently the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item, are recognized in the Consolidated Statements of Earnings in Interest expense – net. The notional amount of the Company’s outstanding fair value hedges as of December 31, 2023 and 2022 were $450 million and $500 million, respectively. The liability hedged by the interest rate swaps is recorded on the Consolidated Balance Sheets in Long-term debt. As of December 31, 2023 and 2022, the carrying amount of the hedged item, including the cumulative amount of fair value hedging adjustments totaled $432 million and $466 million , respectively. The Company's interest rate swaps are reported on the Consolidated Balance Sheets in Other non-current liabilities. As of December 31, 2023 and 2022, the fair values of the Company's interest rate swaps were $16 million and $34 million, respectively. The effect of the Company's fair value hedges on the Consolidated Statement of Earnings in Interest expense – net for the twelve months ended December 31, 2023 and 2022, are shown in the following table (in millions of dollars): For the Years Ended December 31, 2023 2022 Gain or (loss): Interest rate swaps: Hedged item $ (15) $ 35 Derivatives designated as hedging instrument $ 15 $ (35) 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Earnings before income taxes by geographical area consisted of the following (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 U.S. $ 2,211 $ 1,903 $ 1,267 Foreign 289 243 218 Total $ 2,500 $ 2,146 $ 1,485 Income tax expense consisted of the following (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 Current income tax expense: U.S. Federal $ 431 $ 374 $ 221 U.S. State 100 77 46 Foreign 81 78 81 Total current 612 529 348 Deferred income tax (benefit) expense (15) 4 23 Total income tax expense $ 597 $ 533 $ 371 The income tax effects of temporary differences that gave rise to the net deferred tax asset (liability) as of December 31, 2023 and 2022 were as follows (in millions of dollars): As of December 31, 2023 2022 Deferred tax assets: Accrued expenses 177 150 U.S. and foreign loss carryforwards 84 62 Accrued employment-related benefits 51 51 Tax credit carryforward 22 26 Other 30 23 Deferred tax assets 364 312 Less valuation allowance (93) (71) Deferred tax assets – net of valuation allowance $ 271 $ 241 Deferred tax liabilities: Property, buildings, equipment and other capital assets (238) (212) Intangibles (58) (64) Inventory (11) (18) Other (11) (11) Deferred tax liabilities (318) (305) Net deferred tax liability $ (47) $ (64) The net deferred tax asset (liability) is classified as follows: Noncurrent assets $ 10 $ 12 Noncurrent liabilities (foreign) (57) (76) Net deferred tax liability $ (47) $ (64) As of December 31, 2023 and 2022, the Company had $335 million and $248 million, respectively, of gross loss carryforwards related to foreign operations and U.S. transactions. Some of the loss carryforwards may expire at various dates through 2043 . The Company has recorded a valuation allowance, which represents a provision for uncertainty as to the realization of the tax benefits of these carryforwards and deferred tax assets that may not be realized. The Company's valuation allowance changed as follows (in millions of dollars): For the Years Ended December 31, 2023 2022 Balance at beginning of period $ (71) $ (70) Increases primarily related to foreign NOLs (5) (10) Releases primarily related to foreign NOLs 1 1 Foreign exchange rate changes (2) 4 Increase related to U.S. foreign tax credits 3 1 Increase related to capital loss carryforwards (19) — Other changes – net — 3 Balance at end of period $ (93) $ (71) A reconciliation of income tax expense with federal income taxes at the statutory rate follows (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 Federal income tax $ 525 $ 451 $ 312 State income taxes – net of federal income tax benefit 74 64 41 Stock compensation (16) (5) (8) Foreign rate difference 31 26 26 Change in valuation allowance (1) 6 7 7 Other – net (23) (10) (7) Income tax expense $ 597 $ 533 $ 371 Effective tax rate 23.9 % 24.8 % 25.0 % (1) Net of changes in related tax attributes. The decrease to the Company's effective tax rate for the year ended December 31, 2023 was primarily driven by increased tax benefits related to stock compensation. Foreign Undistributed Earnings Estimated gross undistributed earnings of foreign subsidiaries as of December 31, 2023 and 2022, totaled $544 million and $530 million, respectively. The Company considers these undistributed earnings permanently reinvested in its foreign operations and is not recording a deferred tax liability for any foreign withholding taxes on such amounts. If at some future date the Company ceases to be permanently reinvested in its foreign subsidiaries, the Company may be subject to foreign withholding and other taxes on these undistributed earnings and may need to record a deferred tax liability for any outside basis difference in its investments in its foreign subsidiaries. Tax Uncertainties The Company recognizes in the financial statements a provision for tax uncertainties, resulting from application of complex tax regulations in multiple tax jurisdictions. The changes in the liability for tax uncertainties, excluding interest, are as follows (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 Balance at beginning of year $ 41 $ 38 $ 39 Additions for tax positions related to the current year 6 4 3 Additions for tax positions of prior years 1 2 — Reductions for tax positions of prior years (1) — (1) Reductions due to statute lapse (3) (2) (3) Settlements, audit payments, refunds – net (2) (1) — Balance at end of year $ 42 $ 41 $ 38 The Company classifies the liability for tax uncertainties in deferred income taxes and tax uncertainties. Included in this amount is $5 million as of December 31, 2023 and 2022, of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Any changes in the timing of deductibility of these items would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authorities to an earlier period. In 2023, 2022 and 2021, the changes to tax positions were primarily related to the impact of expiring statutes and current year state and local reserves. The Company is regularly subject to examination of its federal income tax returns by the Internal Revenue Service. The statute of limitations expired for the Company's 2019 federal tax return while tax years 2020 through 2022 remain open. The Company is also subject to audit by state, local and foreign taxing authorities. Tax years 2012 through 2022 remain subject to state and local audits and 2012 through 2022 remain subject to foreign audits. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Grainger's two reportable segments are High-Touch Solutions N.A. and Endless Assortment. The remaining businesses, which includes the Company's Cromwell business, are classified as Other to reconcile to consolidated results. These businesses individually and in the aggregate do not meet the criteri a of a reportable segment. The Company's 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 are included in each segment's SG&A and are also eliminated in the Company's Consolidated Financial Statements. Following is a summary of segment results (in millions of dollars): 2023 2022 2021 Net sales Operating earnings (losses) Net sales Operating earnings (losses) Net sales Operating earnings (losses) High-Touch Solutions N.A. $ 13,267 $ 2,334 $ 12,182 $ 1,983 $ 10,186 $ 1,334 Endless Assortment 2,916 233 2,787 223 2,576 232 Other 295 (2) 259 9 260 (19) Total Company $ 16,478 $ 2,565 $ 15,228 $ 2,215 $ 13,022 $ 1,547 2023 2022 2021 Depreciation, amortization and non-cash lease expense: High-Touch Solutions N.A. $ 206 $ 168 $ 148 Endless Assortment 63 35 22 Other 8 3 3 Total $ 277 $ 206 $ 173 Depreciation, amortization and non-cash lease expense presented above includes long-lived assets, capitalized software and ROU assets. Long-lived assets consist of property, buildings and equipment. Following is revenue by geographic location (in millions of dollars): 2023 2022 2021 Revenue by geographic location: United States $ 13,389 $ 12,325 $ 10,236 Japan $ 1,797 1,719 1,705 Canada $ 646 621 560 Other foreign countries $ 646 563 521 $ 16,478 $ 15,228 $ 13,022 |
CONTINGENCIES AND LEGAL MATTERS
CONTINGENCIES AND LEGAL MATTERS | 12 Months Ended |
Dec. 31, 2023 | |
CONTINGENCIES AND LEGAL MATTERS [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 team members, consumers, competitors, suppliers, customers, governmental entities and other third parties. As previously disclosed, between 2019 and 2021, Grainger, KMCO, LLC (KMCO) and other entities were named as defendants in various personal injury and property damage lawsuits in Harris County, Texas relating to an explosion at a KMCO chemical refinery in Crosby, Texas on April 2, 2019. The Company has since settled several of the personal injury lawsuits, including those alleging the most serious injuries. As previously disclosed, those settlements had no effect on net earnings or cash flows for prior quarters or years. The Company continues to contest the remaining KMCO-related lawsuits. The Company is currently unable to predict the timing, outcome or any estimate of possible loss or range of loss on the KMCO lawsuits. 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. While the Company is unable to predict the outcome of any of these proceedings and other matters, it believes that their ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on the Company’s consolidated financial condition or results of operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn January 31, 2024, Grainger's Board of Directors declared a quarterly cash dividend of $1.86 per share of common stock, payable March 1, 2024 to shareholders of record on February 12, 2024. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net earnings attributable to W.W. Grainger, Inc. | $ 1,829 | $ 1,547 | $ 1,043 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
PRINCIPLES OF CONSOLIDATION | Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its subsidiaries over which the Company exercises control. All significant intercompany transactions are eliminated from the Consolidated Financial Statements. The Company has a controlling ownership interest in MonotaRO, the endless assortment business in Japan, with the residual representing the noncontrolling interest. |
USE OF ESTIMATES | Use of Estimates The preparation of the Company's Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions affecting reported amounts in the Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. |
RECLASSIFICATIONS | Reclassifications Certain reclassifications have been made to prior year amounts in Grainger's Consolidated Statements of Cash Flows to conform with the current year presentation. The Company reclassified amounts to separately disclose Non-cash lease expense as an adjustment to reconcile net earnings to net cash provided by operating activities and Operating lease liabilities as a change in operating assets and liabilities. Previously, the net activity for these amounts were included in Depreciation and amortization. The change had no effect on previously reported results including net cash provided by (used in) operating, investing and financing activities or net earnings for the twelve months ended December 31, 2023, 2022 and 2021. |
FOREIGN CURRENCY TRANSLATION | Foreign Currency Translation |
REVENUE RECOGNITION | Revenue Recognition The Company recognizes revenue when a sales arrangement with a customer exists (e.g., contract, purchase orders, others), the transaction price is fixed or determinable and the Company has satisfied its performance obligation per the sales arrangement. The majority of Company revenue originates from contracts with a single performance obligation to deliver products, whereby performance obligations are satisfied when control of the product is transferred to the customer per the arranged shipping terms. Some Company contracts contain a combination of product sales and services, which are distinct and accounted for as separate performance obligations and are satisfied when the services are rendered. Total service revenue is not material and accounted for approximately 1% of the Company's revenue for the years ended December 31, 2023, 2022 and 2021. The Company’s revenue is measured at the determinable transaction price, net of any variable considerations granted to customers and any taxes collected from customers and subsequently remitted to governmental authorities. Variable considerations include rights to return products and sales incentives, which primarily consist of volume rebates. These variable considerations are estimated throughout the year based on various factors, including contract terms, historical experience and performance levels. Total accrued sales returns were approximately $52 million and $38 million as of December 31, 2023 and 2022, respectively, and are reported as a reduction of Accounts receivable – net. Total accrued sales incentives were approximately $114 million and $102 million as of December 31, 2023 and 2022, respectively, and are reported as part of Accrued expenses. The Company records a contract asset when it has a right to payment from a customer that is conditioned on events other than the passage of time. The Company also records a contract liability when customers prepay but the Company has not yet satisfied its performance obligation. The Compa ny did not have any material unsatisfied performance obligations, contract assets or liabilities as of December 31, 2023 and 2022. |
COST OF GOODS SOLD | Cost of Goods Sold (COGS) |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | Selling, General and Administrative Expenses (SG&A) Company SG&A is primarily comprised of payroll and benefits, advertising, depreciation and amortization, lease, indirect purchasing, supply chain and branch operations, technology, and selling expenses, as well as other types of general and administrative costs. |
ADVERTISING | Advertising |
STOCK INCENTIVE PLANS | Stock Incentive Plans |
INCOME TAXES | Income Taxes The Company recognizes the provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. Also, the Company evaluates deferred income taxes to determine if valuation allowances are required using a “more likely than not” standard. This assessment considers the nature, frequency and amount of book and taxable income and losses, the duration of statutory carryback and forward periods, future reversals of existing taxable temporary differences and tax planning strategies, among other matters . The Company recognizes tax benefits from uncertain tax positions only if (based on the technical merits of the position) it is more likely than not that the tax positions will be sustained on examination by the tax authority. The Company recognizes interest expense and penalties to its tax uncertainties in the provision for income taxes. |
OTHER COMPREHENSIVE EARNINGS (LOSSES) | Other Comprehensive Earnings (Losses) |
CASH AND CASH EQUIVALENTS | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at time of purchase to be cash equivalents. |
CONCENTRATION OF CREDIT RISK | Concentration of Credit Risk The Company places temporary cash investments with institutions of high credit quality and, by policy, limits the amount of credit exposure to any one institution. Also, the Company has a broad customer base representing many diverse industries across North America, Japan and U.K. Consequently, no significant concentration of credit risk is considered to exist. |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES | Accounts Receivable and Allowance for Credit Losses The Company’s accounts receivable arises primarily from sales on credit to customers and are stated at their estimated net realizable value. The Company establishes allowances for credit losses on customer accounts that are potentially uncollectible. These allowances are determined based on several factors, including the age of the receivables, historical collection trends and economic conditions that may have an impact on a specific industry, group of customers or a specific customer. The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivable. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity quality indicators for industry groups, customer classes or individual customers. |
INVENTORIES | Inventories Company inventories primarily consist of merchandise purchased for resale. The Company uses the last-in, first-out (LIFO) method, valued at the lower of cost or market, to account for approximately 77% of total inventory and the first-in, first-out (FIFO) method, valued at the lower of cost or net realizable value, for the remaining inventory. The Company regularly reviews inventory to evaluate continued demand and records excess and obsolete provisions representing the difference between excess and obsolete inventories and market value. Estimated market value considers various variables, including product demand, aging and shelf life, market conditions, and liquidation or disposition history and values. If FIFO had been used for all of the Company’s inventories, they would have been $770 million and $693 million higher than reported as of December 31, 2023 and December 31, 2022, respectively. Concurrently, net earnings would have increased by $58 million, $139 million and $49 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
PROPERTY, BUILDINGS AND EQUIPMENT | Property, Buildings and Equipment three |
LONG-LIVED ASSETS | Long-Lived Assets The carrying value of long-lived assets, primarily property, buildings and equipment and amortizable intangibles, is evaluated whenever events or changes in circumstances indicate that the carrying value of the asset group may be impaired. An impairment loss is recognized when estimated undiscounted future cash flows resulting from use of the asset, including disposition, are less than their carrying value. Impairment is measured as the amount by which the asset's carrying amount exceeds the fair value. |
LEASES | Leases The Company leases certain properties, buildings and equipment (including branches, warehouses, DCs and office space) under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company determines if an arrangement contains a lease at inception. Leases with an initial term of more than 12 months are recorded on the balance sheet as right-of-use (ROU) assets representing the right to use the underlying asset for the lease term and the corresponding current and long-term lease liabilities representing the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement or possession date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined using the incremental borrowing rate based on the information available at the lease commencement date. The incremental borrowing rate, the ROU asset and the lease liability are re-evaluated upon a lease modification. Certain lease agreements include variable lease payments that primarily include payments for non-lease components including pass-through operating expenses such as certain maintenance costs and utilities, and payments for non-components such as real estate taxes and insurance. Lease agreements with fixed lease and non-lease components are generally accounted for as a single lease component for all underlying classes of assets. Certain of the Company’s lease arrangements contain renewal provisions from one The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in SG&A. |
GOODWILL AND OTHER INTANGIBLES ASSETS | Goodwill and Other Intangible Assets In a business acquisition, the Company recognizes goodwill as the excess purchase price of an acquired reporting unit over the net amount assigned to assets acquired including intangible assets and liabilities assumed. Acquired intangibles include both assets with indefinite lives and assets that are subject to amortization, which are amortized straight-line over their estimated useful lives. The Company tests goodwill and indefinite-lived intangibles for impairment annually during the fourth quarter and more frequently if impairment indicators exist. The Company performs qualitative assessments of significant events and circumstances, such as reporting units' historical and current results, assumptions regarding future performance, strategic initiatives and overall economic factors to determine the existence of impairment indicators and assess if it is more likely than not that the fair value of the reporting unit or indefinite-lived intangible asset is less than its carrying value that would necessitate a quantitative impairment test. In the quantitative test, Grainger compares the carrying value of the reporting unit or an indefinite-lived intangible asset with its fair value. Any excess of the carrying value over fair value is recorded as an impairment charge, presented as part of SG&A. The fair value of reporting units is calculated primarily using the discounted cash flow method and utilizing value indicators from a market approach to evaluate the reasonableness of the resulting fair values. Estimates of market-participant risk-adjusted weighted average cost of capital are used as a basis for determining the discount rates to apply to the reporting units’ future expected cash flows and terminal value. The Company’s indefinite-lived intangibles are primarily trade names. The fair value of trade names is calculated primarily using the relief-from-royalty method, which estimates the expected royalty savings attributable to the ownership of the trade name asset. The key assumptions when valuing a trade name are the revenue base, the royalty rate and the discount rate. |
CAPITALIZED SOFTWARE | Additionally, the Company capitalizes certain costs related to the purchase and development of internal-use software, which are presented as intangible assets. Amortization of capitalized software is on a straight-line basis over three |
ACCOUNTING FOR DERIVATIVE INSTRUMENTS | Accounting for Derivative Instruments The Company recognizes all derivative instruments as assets or liabilities in the Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, for a derivative to be designated as a hedge, the risk management objective and strategy must be documented. Hedge documentation must identify the derivative hedging instrument, the asset or liability or forecasted transaction, type of risk to be hedged, and how the effectiveness of the derivative is assessed prospectively and retrospectively. To assess effectiveness, the Company uses statistical methods and qualitative comparisons of critical terms. The extent to which a derivative has been and is expected to continue to be highly effective at offsetting changes in the fair value or cash flows of the hedged item is assessed and documented periodically. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. For those derivative instruments that are designated and qualify as hedging instruments, the Company classifies them as fair value hedges or cash flow hedges. |
CONTINGENCIES | Contingencies |
NEW ACCOUNTING STANDARDS | New Accounting Standards Accounting Pronouncements Recently Issued In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update requires public entities to disclose significant segment expenses and other segment items on an annual and interim basis. The effective date is for fiscal years beginning after December 15, 2023, with the option to early adopt prior to the effective date and requires application on a retrospective basis. The Company is evaluating the impact of the requirements on the related segment reporting disclosures. In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This update requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. The effective date is for fiscal years beginning after December 15, 2024, with the option to early adopt prior to the effective date and should be applied on prospective basis, but retrospective application is permitted. The Company is evaluating the impact of the requirements on the related income tax disclosures. |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE [Abstract] | |
Disaggregation of Revenue | The following table presents the Company's percentage of revenue by reportable segment and by major customer industry: Twelve Months Ended December 31, 2023 2022 (1) 2021 (1) High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) Manufacturing 30 % 30 % 30 % 31 % 30 % 30 % 29 % 30 % 30 % Government 19 % 3 % 16 % 18 % 3 % 15 % 19 % 3 % 15 % Wholesale 7 % 16 % 9 % 7 % 16 % 9 % 7 % 14 % 8 % Commercial Services 7 % 12 % 8 % 7 % 13 % 8 % 7 % 13 % 8 % Contractors 5 % 12 % 6 % 5 % 12 % 6 % 5 % 13 % 6 % Healthcare 7 % 2 % 6 % 7 % 2 % 6 % 8 % 2 % 7 % Retail 4 % 4 % 4 % 4 % 4 % 4 % 4 % 5 % 4 % Transportation 4 % 2 % 4 % 4 % 2 % 4 % 4 % 2 % 4 % Utilities 3 % 2 % 3 % 3 % 2 % 3 % 3 % 2 % 3 % Warehousing 4 % — % 3 % 5 % — % 4 % 5 % — % 4 % Other (3) 10 % 17 % 11 % 9 % 16 % 11 % 9 % 16 % 11 % Total net sales 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % Percent of total company revenue 81 % 18 % 100 % 80 % 18 % 100 % 78 % 20 % 100 % (1) Customer industry results for the twelve months ended December 31, 2022, and 2021 were reclassified to reflect the Company's current year classifications, which primarily uses the North American Industry Classification System (NAICS) beginning January 1, 2023. (2) Total Company includes Other, which includes the Cromwell busine ss. Other accounts for approximately 1%, 2% and 2% of revenue for the twelve months ended December 31, 2023, 2022 and 2021, respectively. (3) Other primarily includes revenue from industries and customers that are not material individually, including hospitality, restaurants, property management and natural resources. |
PROPERTY, BUILDINGS AND EQUIP_2
PROPERTY, BUILDINGS AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Buildings and Equipment | roperty, buildings and equipment consisted of the following (in millions of dollars): As of December 31, 2023 December 31, 2022 Land and land improvements $ 397 $ 318 Building, structures and improvements 1,469 1,463 Furniture, fixtures, machinery and equipment 1,852 1,662 Property, buildings and equipment $ 3,718 $ 3,443 Less accumulated depreciation and amortization 2,060 1,982 Property, buildings and equipment – net $ 1,658 $ 1,461 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND OTHER INTANGIBLES [Abstract] | |
Schedule of Goodwill | The Company's balances and changes in the carrying amount of Goodwill by segment are as follows (in millions of dollars): High-Touch Solutions N.A. Endless Assortment Total Balance at January 1, 2022 $ 321 $ 63 $ 384 Translation (8) (5) (13) Balance at December 31, 2022 313 58 371 Translation 2 (3) (1) Balance at December 31, 2023 $ 315 $ 55 $ 370 |
Schedule of Finite-Lived Intangible Assets by Major Class | The balances and changes in intangible assets – net are as follows (in millions of dollars): As of December 31, 2023 2022 Weighted average life Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer lists and relationships 10.7 years $ 166 $ 153 $ 13 $ 217 $ 181 $ 36 Trademarks, trade names and other 14.9 years 31 23 8 32 22 10 Non-amortized trade names and other Indefinite 20 — 20 22 — 22 Capitalized software 4.2 years 659 466 193 580 416 164 Total intangible assets 6.1 years $ 876 $ 642 $ 234 $ 851 $ 619 $ 232 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for future periods is as follows (in millions of dollars): Year Expense 2024 $ 66 2025 58 2026 46 2027 28 2028 13 Thereafter 3 Total $ 214 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments | Total debt, including long-term, current maturities and debt issuance costs and discounts – net, consisted of the following (in millions of dollars): As of December 31, 2023 2022 Carrying Value Fair Value Carrying Value Fair Value 4.60% senior notes due 2045 $ 1,000 $ 967 $ 1,000 $ 916 1.85% senior notes due 2025 500 483 500 470 4.20% senior notes due 2047 400 361 400 338 3.75% senior notes due 2046 400 336 400 317 Japanese yen term loan 32 32 69 69 Other (13) (13) (29) (29) Subtotal 2,319 2,166 2,340 2,081 Less current maturities (34) (34) (35) (35) Debt issuance costs – net of amortization (19) (19) (21) (21) Long-term debt $ 2,266 $ 2,113 $ 2,284 $ 2,025 |
Schedule of Maturities of Long-term Debt | The scheduled aggregate principal payments required on the Company's indebtedness, based on the maturity dates defined within the debt arrangements, for the succeeding five years, excluding debt issuance costs and the impact of derivatives, are due as follows (in millions of dollars): Year Payment Amount 2024 $ 34 2025 503 2026 — 2027 — 2028 — Thereafter 1,800 Total $ 2,337 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EMPLOYEE BENEFITS [Abstract] | |
Schedule of Net Benefit Costs | The net periodic benefits costs were valued with a measurement date of January 1 for each year and consisted of the following components (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 SG&A Service cost $ 2 $ 4 $ 5 Other (income) expense Interest cost 5 4 3 Expected return on assets (6) (8) (8) Amortization of prior service credit (10) (10) (9) Amortization of unrecognized gains (7) (9) (8) Net periodic benefits $ (16) $ (19) $ (17) |
Schedule of Accumulated and Projected Benefit Obligations | Reconciliations of the beginning and ending balances of the postretirement benefit asset, which is calculated as of December 31 measurement date, the fair value of plan assets available for benefits and the funded status of the benefit asset follow (in millions of dollars): 2023 2022 Benefit obligation at beginning of year $ 112 $ 153 Service cost 2 4 Interest cost 5 4 Plan participants' contributions 3 3 Actuarial loss (gains) 2 (40) Benefits paid (10) (12) Benefit obligation at end of year $ 114 $ 112 Plan assets available for benefits at beginning of year $ 162 $ 207 Actual returns on plan assets 18 (36) Plan participants' contributions 3 3 Benefits paid (10) (12) Plan assets available for benefits at end of year 173 162 Noncurrent postretirement benefit asset $ 59 $ 50 |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The amounts recognized in AOCE consisted of the following (in millions of dollars): As of December 31, 2023 2022 Prior service credit $ 23 $ 33 Unrecognized gains 79 77 Deferred tax liability (25) (28) Net accumulated gains $ 77 $ 82 |
Schedule of Assumptions Used | The following assumptions were used to determine net periodic benefit co sts as of January 1: 2023 2022 2021 Discount rate 4.92 % 2.57 % 2.17 % Long-term rate of return on plan assets – net of tax 4.04 % 4.04 % 4.04 % Initial healthcare cost trend rate Pre age 65 7.50 % 6.50 % 5.81 % Ultimate healthcare cost trend rate 4.50 % 4.50 % 4.50 % Year ultimate healthcare cost trend rate reached 2033 2030 2026 The following assumptions were used to determine benefit obligations as of December 31: 2023 2022 2021 Discount rate 4.73 % 4.92 % 2.57 % Expected long-term rate of return on plan assets – net of tax 4.04 % 4.04 % 4.04 % Initial healthcare cost trend rate Pre age 65 7.20 % 7.50 % 6.50 % Ultimate healthcare cost trend rate 4.50 % 4.50 % 4.50 % Year ultimate healthcare cost trend rate reached 2033 2033 2030 |
Schedule of Allocation of Plan Assets | The plan assets available for benefits consisted of the following as of December 31 (in millions of dollars): 2023 2022 Asset class: Level 1 inputs: Mutual funds: Funds – municipal/provincial bonds $ — $ 8 Funds – corporate bonds fund 10 3 Level 2 inputs: Fixed income: Corporate bonds 56 57 Government/municipal bonds 9 12 Equity funds 88 73 Plan assets 163 153 Trust assets 10 9 Plan assets available for benefits $ 173 $ 162 |
Schedule of Expected Benefit Payments | The Company forecasts the following benefit payments related to postretirement (which include a projection for expected future team member service) for the next ten years (in millions of dollars): Year Estimated Gross Benefit Payments 2024 $ 9 2025 10 2026 10 2027 9 2028 8 2029-2033 41 Total $ 87 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Assets and Liabilities | Information related to operating leases is as follows (in millions of dollars): As of December 31, 2023 2022 Right-of-use assets Operating lease right-of-use $ 429 $ 367 Operating lease liabilities Operating lease liability 71 68 Long-term operating lease liability 381 318 Total operating lease liabilities $ 452 $ 386 |
Schedule of Operating Lease Information | As of December 31, 2023 2022 Weighted average remaining lease term 7 years 7 years Weighted average incremental borrowing rate 2.19 % 1.46 % Cash paid for operating leases $ 88 $ 76 Right-of-use assets obtained in exchange for operating lease obligations $ 161 $ 96 |
Schedule of Maturities of Operating Lease Liabilities | The remaining maturity of existing lease liabilities as of December 31, 2023 are as follows (in millions of dollars): Year Operating Leases 2024 $ 87 2025 87 2026 76 2027 66 2028 57 Thereafter 119 Total lease payments 492 Less interest (40) Present value of lease liabilities $ 452 |
STOCK INCENTIVE PLANS (Tables)
STOCK INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
STOCK INCENTIVE PLANS [Abstract] | |
Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | The following table summarizes RSU activity (in millions of dollars, except for share and per share amounts): 2023 2022 2021 Shares Weighted Shares Weighted Shares Weighted Beginning nonvested units 191,032 $ 409.77 202,321 $ 318.40 317,414 $ 259.67 Issued 81,174 $ 692.02 96,940 $ 520.67 105,866 $ 406.17 Canceled (7,943) $ 512.31 (17,038) $ 345.30 (36,134) $ 274.74 Vested (91,279) $ 384.92 (91,191) $ 336.99 (184,825) $ 276.34 Ending nonvested units 172,984 $ 550.62 191,032 $ 409.77 202,321 $ 318.40 Fair value of shares vested $ 35 $ 31 $ 51 |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CAPITAL STOCK [Abstract] | |
Schedule of Capital Stock | The activity related to outstanding common stock and common stock held in treasury was as follows: 2023 2022 2021 Outstanding Common Stock Treasury Stock Outstanding Common Stock Treasury Stock Outstanding Common Stock Treasury Stock Balance at beginning of period 50,256,323 59,402,896 51,220,205 58,439,014 52,524,391 57,134,828 Exercise of stock options 139,189 (139,189) 101,802 (101,802) 188,444 (188,444) Settlement of restricted stock units – net of 32,800, 31,132 and 61,377 shares retained, respectively 83,795 (83,795) 64,649 (64,649) 127,969 (127,969) Settlement of performance share units – net of 18,521, 10,359 and 9,746 shares retained, respectively 28,135 (28,135) 13,890 (13,890) 12,507 (12,507) Purchase of treasury shares (1,190,040) 1,190,040 (1,144,223) 1,144,223 (1,633,106) 1,633,106 Balance at end of period 49,317,402 60,341,817 50,256,323 59,402,896 51,220,205 58,439,014 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE EARNINGS (LOSSES) (AOCE) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of AOCE | The components of AOCE consisted of the following (in millions of dollars): Foreign Currency Translation and Other Defined Postretirement Benefit Plan Other Employment-related Benefit Plans Total Foreign Currency Translation Attributable to Noncontrolling Interests AOCE Attributable to W.W. Grainger, Inc. Balance at December 31, 2021 – net of tax $ (219) $ 99 $ (6) $ (126) $ (30) $ (96) Other comprehensive earnings (loss) before reclassifications – net of tax $ (101) $ (4) $ — $ (105) $ (34) $ (71) Amounts reclassified to net earnings $ — $ (13) $ — $ (13) $ — $ (13) Net current period activity $ (101) $ (17) $ — $ (118) $ (34) $ (84) Balance at December 31, 2022 – net of tax $ (320) $ 82 $ (6) $ (244) $ (64) $ (180) Other comprehensive earnings (loss) before reclassifications – net of tax $ (11) $ 8 $ 3 $ — $ (21) $ 21 Amounts reclassified to net earnings $ — $ (13) $ — $ (13) $ — $ (13) Net current period activity $ (11) $ (5) $ 3 $ (13) $ (21) $ 8 Balance at December 31, 2023 – net of tax $ (331) $ 77 $ (3) $ (257) $ (85) $ (172) |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The effect of the Company's fair value hedges on the Consolidated Statement of Earnings in Interest expense – net for the twelve months ended December 31, 2023 and 2022, are shown in the following table (in millions of dollars): For the Years Ended December 31, 2023 2022 Gain or (loss): Interest rate swaps: Hedged item $ (15) $ 35 Derivatives designated as hedging instrument $ 15 $ (35) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Taxes by Geographical Area | Earnings before income taxes by geographical area consisted of the following (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 U.S. $ 2,211 $ 1,903 $ 1,267 Foreign 289 243 218 Total $ 2,500 $ 2,146 $ 1,485 |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense consisted of the following (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 Current income tax expense: U.S. Federal $ 431 $ 374 $ 221 U.S. State 100 77 46 Foreign 81 78 81 Total current 612 529 348 Deferred income tax (benefit) expense (15) 4 23 Total income tax expense $ 597 $ 533 $ 371 |
Schedule of Deferred Tax Assets and Liabilities | The income tax effects of temporary differences that gave rise to the net deferred tax asset (liability) as of December 31, 2023 and 2022 were as follows (in millions of dollars): As of December 31, 2023 2022 Deferred tax assets: Accrued expenses 177 150 U.S. and foreign loss carryforwards 84 62 Accrued employment-related benefits 51 51 Tax credit carryforward 22 26 Other 30 23 Deferred tax assets 364 312 Less valuation allowance (93) (71) Deferred tax assets – net of valuation allowance $ 271 $ 241 Deferred tax liabilities: Property, buildings, equipment and other capital assets (238) (212) Intangibles (58) (64) Inventory (11) (18) Other (11) (11) Deferred tax liabilities (318) (305) Net deferred tax liability $ (47) $ (64) The net deferred tax asset (liability) is classified as follows: Noncurrent assets $ 10 $ 12 Noncurrent liabilities (foreign) (57) (76) Net deferred tax liability $ (47) $ (64) |
Summary of Valuation Allowance Changes | The Company's valuation allowance changed as follows (in millions of dollars): For the Years Ended December 31, 2023 2022 Balance at beginning of period $ (71) $ (70) Increases primarily related to foreign NOLs (5) (10) Releases primarily related to foreign NOLs 1 1 Foreign exchange rate changes (2) 4 Increase related to U.S. foreign tax credits 3 1 Increase related to capital loss carryforwards (19) — Other changes – net — 3 Balance at end of period $ (93) $ (71) |
Reconciliation of Income Tax Statutory Rate | A reconciliation of income tax expense with federal income taxes at the statutory rate follows (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 Federal income tax $ 525 $ 451 $ 312 State income taxes – net of federal income tax benefit 74 64 41 Stock compensation (16) (5) (8) Foreign rate difference 31 26 26 Change in valuation allowance (1) 6 7 7 Other – net (23) (10) (7) Income tax expense $ 597 $ 533 $ 371 Effective tax rate 23.9 % 24.8 % 25.0 % (1) Net of changes in related tax attributes. |
Reconciliation of Income Tax Contingencies | The changes in the liability for tax uncertainties, excluding interest, are as follows (in millions of dollars): For the Years Ended December 31, 2023 2022 2021 Balance at beginning of year $ 41 $ 38 $ 39 Additions for tax positions related to the current year 6 4 3 Additions for tax positions of prior years 1 2 — Reductions for tax positions of prior years (1) — (1) Reductions due to statute lapse (3) (2) (3) Settlements, audit payments, refunds – net (2) (1) — Balance at end of year $ 42 $ 41 $ 38 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of Segment Results | Following is a summary of segment results (in millions of dollars): 2023 2022 2021 Net sales Operating earnings (losses) Net sales Operating earnings (losses) Net sales Operating earnings (losses) High-Touch Solutions N.A. $ 13,267 $ 2,334 $ 12,182 $ 1,983 $ 10,186 $ 1,334 Endless Assortment 2,916 233 2,787 223 2,576 232 Other 295 (2) 259 9 260 (19) Total Company $ 16,478 $ 2,565 $ 15,228 $ 2,215 $ 13,022 $ 1,547 |
Significant Reconciling Items from Segments to Consolidated | 2023 2022 2021 Depreciation, amortization and non-cash lease expense: High-Touch Solutions N.A. $ 206 $ 168 $ 148 Endless Assortment 63 35 22 Other 8 3 3 Total $ 277 $ 206 $ 173 Depreciation, amortization and non-cash lease expense presented above includes long-lived assets, capitalized software and ROU assets. Long-lived assets consist of property, buildings and equipment. Following is revenue by geographic location (in millions of dollars): 2023 2022 2021 Revenue by geographic location: United States $ 13,389 $ 12,325 $ 10,236 Japan $ 1,797 1,719 1,705 Canada $ 646 621 560 Other foreign countries $ 646 563 521 $ 16,478 $ 15,228 $ 13,022 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Service fee revenue (approximately) | 1% | 1% | 1% |
Accrued sales returns | $ 52 | $ 38 | |
Accrued sales incentives | 114 | 102 | |
Accrued vendor rebates | 155 | 136 | |
Advertising expense | $ 638 | 519 | $ 402 |
Percentage of LIFO inventory | 77% | ||
Inventory, LIFO reserve | $ 770 | 693 | |
Inventory, LIFO reserve, effect on income, net | $ 58 | $ 139 | $ 49 |
Minimum | |||
Buildings, structures and improvements, estimated useful life | 10 years | ||
Furniture, fixtures, machinery equipment, estimated useful life | 3 years | ||
Operating lease renewal term | 1 year | ||
Capitalized software amortization period | 3 years | ||
Maximum | |||
Buildings, structures and improvements, estimated useful life | 50 years | ||
Furniture, fixtures, machinery equipment, estimated useful life | 15 years | ||
Operating lease renewal term | 30 years | ||
Capitalized software amortization period | 5 years |
REVENUE (Details)
REVENUE (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Total net sales | 100% | 100% | 100% |
Percent of total company revenue | 100% | 100% | 100% |
Percentage of company-wide revenue | 1% | 2% | 2% |
Manufacturing | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 30% | 30% | 30% |
Government | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 16% | 15% | 15% |
Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 9% | 9% | 8% |
Commercial Services | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 8% | 8% | 8% |
Contractors | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 6% | 6% | 6% |
Healthcare | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 6% | 6% | 7% |
Retail | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 4% | 4% | 4% |
Transportation | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 4% | 4% | 4% |
Utilities | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 3% | 3% | 3% |
Warehousing | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 3% | 4% | 4% |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 11% | 11% | 11% |
High-Touch Solutions N.A. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 100% | 100% | 100% |
Percent of total company revenue | 81% | 80% | 78% |
High-Touch Solutions N.A. | Manufacturing | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 30% | 31% | 29% |
High-Touch Solutions N.A. | Government | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 19% | 18% | 19% |
High-Touch Solutions N.A. | Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 7% | 7% | 7% |
High-Touch Solutions N.A. | Commercial Services | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 7% | 7% | 7% |
High-Touch Solutions N.A. | Contractors | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 5% | 5% | 5% |
High-Touch Solutions N.A. | Healthcare | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 7% | 7% | 8% |
High-Touch Solutions N.A. | Retail | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 4% | 4% | 4% |
High-Touch Solutions N.A. | Transportation | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 4% | 4% | 4% |
High-Touch Solutions N.A. | Utilities | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 3% | 3% | 3% |
High-Touch Solutions N.A. | Warehousing | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 4% | 5% | 5% |
High-Touch Solutions N.A. | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 10% | 9% | 9% |
Endless Assortment | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 100% | 100% | 100% |
Percent of total company revenue | 18% | 18% | 20% |
Endless Assortment | Manufacturing | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 30% | 30% | 30% |
Endless Assortment | Government | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 3% | 3% | 3% |
Endless Assortment | Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 16% | 16% | 14% |
Endless Assortment | Commercial Services | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 12% | 13% | 13% |
Endless Assortment | Contractors | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 12% | 12% | 13% |
Endless Assortment | Healthcare | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 2% | 2% | 2% |
Endless Assortment | Retail | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 4% | 4% | 5% |
Endless Assortment | Transportation | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 2% | 2% | 2% |
Endless Assortment | Utilities | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 2% | 2% | 2% |
Endless Assortment | Warehousing | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 0% | 0% | 0% |
Endless Assortment | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 17% | 16% | 16% |
PROPERTY, BUILDINGS AND EQUIP_3
PROPERTY, BUILDINGS AND EQUIPMENT - Schedule of Property, Buildings and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | $ 3,718 | $ 3,443 |
Less accumulated depreciation and amortization | 2,060 | 1,982 |
Property, buildings and equipment – net | 1,658 | 1,461 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | 397 | 318 |
Building, structures and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | 1,469 | 1,463 |
Furniture, fixtures, machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | $ 1,852 | $ 1,662 |
PROPERTY, BUILDINGS AND EQUIP_4
PROPERTY, BUILDINGS AND EQUIPMENT- Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 146 | $ 139 | $ 123 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Goodwill | $ 370 | $ 371 | $ 384 |
Cumulative goodwill impairments | 137 | ||
Impairment charges | 0 | 0 | 0 |
Amortization expense, intangible assets | 64 | 61 | $ 63 |
Reporting Unit, Canada | |||
Segment Reporting Information [Line Items] | |||
Goodwill | $ 124 | $ 121 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS Balances and Changes in Carrying Amounts of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 371 | $ 384 |
Translation | (1) | (13) |
Goodwill, ending balance | 370 | 371 |
High-Touch Solutions N.A. | Operating Segments | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 313 | 321 |
Translation | 2 | (8) |
Goodwill, ending balance | 315 | 313 |
Endless Assortment | Operating Segments | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 58 | 63 |
Translation | (3) | (5) |
Goodwill, ending balance | $ 55 | $ 58 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets included in Other assets and intangibles (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Total intangible assets, gross | $ 876 | $ 851 |
Finite-lived intangible assets, accumulated amortization | 642 | 619 |
Total | 214 | |
Total intangible assets, net | 234 | 232 |
Customer lists and relationships | ||
Finite-lived intangible assets, gross | 166 | 217 |
Finite-lived intangible assets, accumulated amortization | 153 | 181 |
Total | 13 | 36 |
Trademarks, trade names and other | ||
Finite-lived intangible assets, gross | 31 | 32 |
Finite-lived intangible assets, accumulated amortization | 23 | 22 |
Total | 8 | 10 |
Non-amortized trade names and other | ||
Finite-lived intangible assets, gross | 20 | 22 |
Finite-lived intangible assets, accumulated amortization | 0 | 0 |
Indefinite-lived intangible assets, carrying amount | 20 | 22 |
Capitalized software | ||
Finite-lived intangible assets, gross | 659 | 580 |
Finite-lived intangible assets, accumulated amortization | 466 | 416 |
Total | $ 193 | $ 164 |
Weighted average life | ||
Finite-lived intangible assets, useful life | 6 years 1 month 6 days | |
Weighted average life | Customer lists and relationships | ||
Finite-lived intangible assets, useful life | 10 years 8 months 12 days | |
Weighted average life | Trademarks, trade names and other | ||
Finite-lived intangible assets, useful life | 14 years 10 months 24 days | |
Weighted average life | Capitalized software | ||
Finite-lived intangible assets, useful life | 4 years 2 months 12 days |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS Estimated amortization expense (Details) $ in Millions | Dec. 31, 2023 USD ($) |
GOODWILL AND OTHER INTANGIBLES [Abstract] | |
2024 | $ 66 |
2025 | 58 |
2026 | 46 |
2027 | 28 |
2028 | 13 |
Thereafter | 3 |
Total | $ 214 |
LONG-TERM DEBT - SCHEDULE OF LO
LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Value | |||
Total | $ 2,319 | $ 2,340 | |
Other | (13) | ||
Other | (29) | ||
Less current maturities | (34) | (35) | |
Debt issuance costs – net of amortization | (19) | (21) | |
Long-term debt | 2,266 | 2,284 | |
Fair Value | |||
Other | (13) | ||
Other | (29) | ||
Subtotal | 2,166 | 2,081 | |
Less current maturities | (34) | (35) | |
Debt issuance costs – net of amortization | (19) | (21) | |
Long-term debt | 2,113 | 2,025 | |
Japanese Yen Term Loan | |||
Carrying Value | |||
Total | 32 | 69 | |
Fair Value | |||
Long-term Debt, Fair Value | 32 | 69 | |
Unsecured Senior Notes, 4.60% | Senior notes | |||
Carrying Value | |||
Total | 1,000 | 1,000 | |
Fair Value | |||
Long-term Debt, Fair Value | $ 967 | 916 | |
Stated interest rate | 4.60% | ||
Unsecured Senior Notes, 1.85% | Senior notes | |||
Carrying Value | |||
Total | $ 500 | 500 | |
Fair Value | |||
Long-term Debt, Fair Value | $ 483 | 470 | |
Stated interest rate | 1.85% | 1.85% | |
Unsecured Senior Notes, 4.20% | Senior notes | |||
Carrying Value | |||
Total | $ 400 | 400 | |
Fair Value | |||
Long-term Debt, Fair Value | $ 361 | 338 | |
Stated interest rate | 4.20% | ||
Unsecured Senior Notes, 3.75% | Senior notes | |||
Carrying Value | |||
Total | $ 400 | 400 | |
Fair Value | |||
Long-term Debt, Fair Value | $ 336 | $ 317 | |
Stated interest rate | 3.75% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) ¥ in Billions | 1 Months Ended | 72 Months Ended | ||||
Aug. 31, 2020 JPY (¥) | Feb. 29, 2020 USD ($) | Dec. 31, 2020 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt instrument, unamortized discount (premium) and debt issuance costs, net | $ 19,000,000 | $ 21,000,000 | ||||
Long-term debt, gross | 2,319,000,000 | 2,340,000,000 | ||||
Domestic Line of Credit | 5-Year Unsecured Revolving Line Of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, outstanding | $ 0 | 0 | ||||
Senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 2,300,000,000 | |||||
Senior notes | Unsecured Senior Notes, 1.85% | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 1.85% | 1.85% | ||||
Long-term debt, gross | $ 500,000,000 | 500,000,000 | ||||
Japanese Yen Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | 32,000,000 | 69,000,000 | ||||
Japanese Yen Term Loan | Term Loan Agreement, 0.05% | ||||||
Debt Instrument [Line Items] | ||||||
Debt, term | 1 year | |||||
Face amount of debt | ¥ | ¥ 9 | |||||
Long-term debt, gross | 32,000,000 | $ 69,000,000 | ||||
Average interest rate (as a percent) | 0.05% | |||||
Revolving credit facility | Line of credit | ||||||
Debt Instrument [Line Items] | ||||||
Debt, term | 5 years | |||||
Maximum borrowing capacity | $ 1,250,000,000 | |||||
Increase in maximum borrowing capacity | $ 1,875,000,000 |
LONG-TERM DEBT - SCHEDULED AGGR
LONG-TERM DEBT - SCHEDULED AGGREGATE PRINCIPAL PAYMENTS (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2024 | $ 34 |
2025 | 503 |
2026 | 0 |
2027 | 0 |
2028 | 0 |
Thereafter | 1,800 |
Total | $ 2,337 |
EMPLOYEE BENEFITS - Defined Con
EMPLOYEE BENEFITS - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
EMPLOYEE BENEFITS [Abstract] | |||
Profit sharing automatic contribution percentage | 6% | ||
Profit sharing plan expense | $ 85 | $ 87 | $ 78 |
Defined contribution plans, expense | $ 21 | $ 11 | $ 16 |
Liability for future policy benefit, weighted-average duration | 10 years |
EMPLOYEE BENEFITS - Postretirem
EMPLOYEE BENEFITS - Postretirement Benefits (Details) - Postretirement Benefits - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Postretirement Benefits | |||
Service cost | $ 2 | $ 4 | $ 5 |
Interest cost | 5 | 4 | 3 |
Expected return on assets | (6) | (8) | (8) |
Amortization of prior service credits | (10) | (10) | (9) |
Amortization of unrecognized gains | (7) | (9) | (8) |
Net periodic (benefits) costs | (16) | (19) | (17) |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation at beginning of year | 112 | 153 | |
Service cost | 2 | 4 | 5 |
Interest cost | 5 | 4 | 3 |
Plan participants' contributions | 3 | 3 | |
Actuarial loss (gains) | 2 | (40) | |
Benefits paid | (10) | (12) | |
Benefit obligation at end of year | 114 | 112 | 153 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Plan assets available for benefits at beginning of year | 162 | 207 | |
Actual returns on plan assets | 18 | (36) | |
Plan participants' contributions | 3 | 3 | |
Benefits paid | (10) | (12) | |
Plan assets available for benefits at end of year | 173 | 162 | $ 207 |
Noncurrent postretirement benefit asset | 59 | 50 | |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Prior service credit | 23 | 33 | |
Unrecognized gains | 79 | 77 | |
Deferred tax liability | (25) | (28) | |
Net accumulated gains | $ 77 | $ 82 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.92% | 2.57% | 2.17% |
Long-term rate of return on plan assets – net of tax | 4.04% | 4.04% | 4.04% |
Pre age 65 | 7.50% | 6.50% | 5.81% |
Ultimate healthcare cost trend rate | 4.50% | 4.50% | 4.50% |
Year ultimate healthcare cost trend rate reached | 2033 | 2030 | 2026 |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 4.73% | 4.92% | 2.57% |
Expected long-term rate of return on plan assets – net of tax | 4.04% | 4.04% | 4.04% |
Pre age 65 | 7.20% | 7.50% | 6.50% |
Year ultimate healthcare cost trend rate reached | 2033 | 2033 | 2030 |
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |||
2024 | $ 9 | ||
2025 | 10 | ||
2026 | 10 | ||
2027 | 9 | ||
2028 | 8 | ||
2029-2033 | 41 | ||
Total | $ 87 |
EMPLOYEE BENEFITS - Summary of
EMPLOYEE BENEFITS - Summary of Plan Assets (Details) - Postretirement Benefits - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Plan assets | $ 173 | $ 162 | $ 207 |
Fair Value, Inputs, Level 1, 2 and 3 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Plan assets | 163 | 153 | |
Funds – municipal/provincial bonds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Plan assets | $ 0 | 8 | |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | Fair Value, Inputs, Level 1 [Member] | ||
Funds – corporate bonds fund | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Plan assets | $ 10 | 3 | |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | Fair Value, Inputs, Level 1 [Member] | ||
Corporate bonds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Plan assets | $ 56 | 57 | |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | Fair Value, Inputs, Level 2 [Member] | ||
Government/municipal bonds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Plan assets | $ 9 | 12 | |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | Fair Value, Inputs, Level 2 [Member] | ||
Equity funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Plan assets | $ 88 | 73 | |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | Fair Value, Inputs, Level 2 [Member] | ||
Trust Assets and Liabilities, Net | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Plan assets | $ 10 | $ 9 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease expiration date | 2037 | ||
Rent expense | $ 102 | $ 93 | $ 74 |
Sublease income | $ 2 | $ 2 | $ 2 |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease right-of-use | $ 429 | $ 367 |
Operating lease liability | 71 | 68 |
Long-term operating lease liability | 381 | 318 |
Total operating lease liabilities | $ 452 | $ 386 |
Weighted average remaining lease term | 7 years | 7 years |
Weighted average incremental borrowing rate | 2.19% | 1.46% |
Cash paid for operating leases | $ 88 | $ 76 |
ROU assets obtained in exchange for operating lease obligations | $ 161 | $ 96 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease right-of-use | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Operating lease liability | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term operating lease liability | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Leases (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 87 | |
2025 | 87 | |
2026 | 76 | |
2027 | 66 | |
2028 | 57 | |
Thereafter | 119 | |
Total lease payments | 492 | |
Less interest | (40) | |
Present value of lease liabilities | $ 452 | $ 386 |
STOCK INCENTIVE PLANS - Narrati
STOCK INCENTIVE PLANS - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares of common stock available for grant under stock incentive plans (in shares) | 1.4 | ||
Pretax stock-based compensation expense | $ 62 | $ 48 | $ 42 |
Income tax benefits recognized in earnings for stock-based compensation expense | 34 | 19 | 21 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
RSU expense | 43 | $ 34 | $ 30 |
Unrecognized compensation | $ 64 | ||
Weighted average period to recognize (in years) | 2 years | ||
Maximum | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 7 years | ||
Minimum | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year |
STOCK INCENTIVE PLANS - Restric
STOCK INCENTIVE PLANS - Restricted Stock Units (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 191,032 | 202,321 | 317,414 |
Issued (in shares) | 81,174 | 96,940 | 105,866 |
Canceled (in shares) | (7,943) | (17,038) | (36,134) |
Vested (in shares) | (91,279) | (91,191) | (184,825) |
Outstanding at end of period (in shares) | 172,984 | 191,032 | 202,321 |
Weighted Average Price Per Share [Abstract] | |||
Outstanding at beginning of period, weighted average price per share (in dollars per share) | $ 409.77 | $ 318.40 | $ 259.67 |
Issued, weighted average price per share (in dollars per share) | 692.02 | 520.67 | 406.17 |
Cancelled, weighted average price per share (in dollars per share) | 512.31 | 345.30 | 274.74 |
Vested, weighted average price per share (in dollars per share) | 384.92 | 336.99 | 276.34 |
Outstanding at end of period, weighted average price per share (in dollars per share) | $ 550.62 | $ 409.77 | $ 318.40 |
Fair value of shares vested | $ 35 | $ 31 | $ 51 |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - shares | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cumulative preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Stock issued during period, shares, restricted stock award, retained (in shares) | 32,800 | 31,132 | 61,377 | |
Stock issued during period, shares, performance share units, retained (in shares) | 18,521 | 10,359 | 9,746 | |
Treasury stock, common, shares (in shares) | 60,341,817 | 59,402,896 | ||
Common Stock | ||||
Balance at beginning of period, common stock (in shares) | 50,256,323 | 51,220,205 | 52,524,391 | |
Exercised (in shares) | (139,189) | (101,802) | (188,444) | |
Settlement of restricted stock units – net of 32,800, 31,132 and 61,377 shares retained, respectively | (83,795) | (64,649) | (127,969) | |
Settlement of performance share units – net of 18,521, 10,359 and 9,746 shares retained, respectively | (28,135) | (13,890) | (12,507) | |
Purchase of treasury shares (in shares) | 1,190,040 | 1,144,223 | 1,633,106 | |
Balance at end of period, common stock (in shares) | 49,317,402 | 50,256,323 | 51,220,205 | |
Treasury Stock | ||||
Exercised (in shares) | (139,189) | (101,802) | (188,444) | |
Settlement of restricted stock units – net of 32,800, 31,132 and 61,377 shares retained, respectively | (83,795) | (64,649) | (127,969) | |
Settlement of performance share units – net of 18,521, 10,359 and 9,746 shares retained, respectively | (28,135) | (13,890) | (12,507) | |
Purchase of treasury shares (in shares) | 1,190,040 | 1,144,223 | 1,633,106 | |
Treasury stock, common, shares (in shares) | 60,341,817 | 59,402,896 | 58,439,014 | 57,134,828 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE EARNINGS (LOSSES) (AOCE) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 2,735 | $ 2,160 | $ 2,093 |
Net current period activity | (13) | (118) | (64) |
Ending balance | 3,441 | 2,735 | 2,160 |
Foreign Currency Translation and Other | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (320) | (219) | |
Other comprehensive earnings (loss) before reclassifications – net of tax | (11) | (101) | |
Amounts reclassified to net earnings | 0 | 0 | |
Net current period activity | (11) | (101) | |
Ending balance | (331) | (320) | (219) |
Total | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (244) | (126) | |
Other comprehensive earnings (loss) before reclassifications – net of tax | 0 | (105) | |
Amounts reclassified to net earnings | (13) | (13) | |
Net current period activity | (13) | (118) | |
Ending balance | (257) | (244) | (126) |
Foreign Currency Translation Attributable to Noncontrolling Interests | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (64) | (30) | |
Other comprehensive earnings (loss) before reclassifications – net of tax | (21) | (34) | |
Amounts reclassified to net earnings | 0 | 0 | |
Net current period activity | (21) | (34) | |
Ending balance | (85) | (64) | (30) |
AOCE Attributable to W.W. Grainger, Inc. | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (180) | (96) | (61) |
Other comprehensive earnings (loss) before reclassifications – net of tax | 21 | (71) | |
Amounts reclassified to net earnings | (13) | (13) | |
Net current period activity | 8 | (84) | (35) |
Ending balance | (172) | (180) | (96) |
Defined Postretirement Benefit Plan | Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 82 | 99 | |
Other comprehensive earnings (loss) before reclassifications – net of tax | 8 | (4) | |
Amounts reclassified to net earnings | (13) | (13) | |
Net current period activity | (5) | (17) | |
Ending balance | 77 | 82 | 99 |
Other Employment-related Benefit Plans | Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (6) | (6) | |
Other comprehensive earnings (loss) before reclassifications – net of tax | 3 | 0 | |
Amounts reclassified to net earnings | 0 | 0 | |
Net current period activity | 3 | 0 | |
Ending balance | $ (3) | $ (6) | $ (6) |
DERIVATIVE INSTRUMENTS - Narrat
DERIVATIVE INSTRUMENTS - Narrative (Details) - Fair Value Hedging - Designated as Hedging Instrument - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Derivative [Line Items] | ||
Derivative, notional amount | $ 450 | $ 500 |
Derivative liability, notional amount | 432 | 466 |
Other Assets | Interest Rate Swap | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross asset | $ 16 | $ 34 |
DERIVATIVE INSTRUMENTS - Schedu
DERIVATIVE INSTRUMENTS - Schedule of Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | |||
Interest rate swaps: | $ (93) | $ (93) | $ (87) |
Other Contract | Fair Value Hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Interest rate swaps: | (15) | 35 | |
Interest Rate Swap | Fair Value Hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Interest rate swaps: | $ 15 | $ (35) |
INCOME TAXES - Net Earnings Bef
INCOME TAXES - Net Earnings Before Income Taxes by Geographical Area (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net earnings before income taxes by geographical area | |||
U.S. | $ 2,211 | $ 1,903 | $ 1,267 |
Foreign | 289 | 243 | 218 |
Earnings before income taxes | $ 2,500 | $ 2,146 | $ 1,485 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current income tax expense: | |||
U.S. Federal | $ 431 | $ 374 | $ 221 |
U.S. State | 100 | 77 | 46 |
Foreign | 81 | 78 | 81 |
Total current | 612 | 529 | 348 |
Deferred income tax (benefit) expense | (15) | 4 | 23 |
Income tax expense | $ 597 | $ 533 | $ 371 |
INCOME TAXES - Income Tax Effec
INCOME TAXES - Income Tax Effects of Temporary Differences (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | |||
Accrued expenses | $ 177 | $ 150 | |
U.S. and foreign loss carryforwards | 84 | 62 | |
Accrued employment-related benefits | 51 | 51 | |
Tax credit carryforward | 22 | 26 | |
Other | 30 | 23 | |
Deferred tax assets | 364 | 312 | |
Less valuation allowance | (93) | (71) | $ (70) |
Deferred tax assets – net of valuation allowance | 271 | 241 | |
Deferred tax liabilities: | |||
Property, buildings, equipment and other capital assets | (238) | (212) | |
Intangibles | (58) | (64) | |
Inventory | (11) | (18) | |
Other | (11) | (11) | |
Deferred tax liabilities | (318) | (305) | |
Net deferred tax liability | (47) | (64) | |
The net deferred tax asset (liability) is classified as follows: | |||
Noncurrent assets | 10 | 12 | |
Noncurrent liabilities (foreign) | $ (57) | $ (76) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 335 | $ 248 |
Undistributed earnings of foreign subsidiaries | 544 | $ 530 |
Liability for tax uncertainties | $ 5 |
INCOME TAXES - Changes in Valua
INCOME TAXES - Changes in Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred Tax Asset, Valuation Allowance [Roll Forward] | ||
Balance at beginning of period | $ (71) | $ (70) |
Balance at end of period | (93) | (71) |
Increases primarily related to foreign NOLs | ||
Deferred Tax Asset, Valuation Allowance [Roll Forward] | ||
Valuation allowance, increase (decrease) | (5) | (10) |
Releases primarily related to foreign NOLs | ||
Deferred Tax Asset, Valuation Allowance [Roll Forward] | ||
Valuation allowance, increase (decrease) | 1 | 1 |
Foreign exchange rate changes | ||
Deferred Tax Asset, Valuation Allowance [Roll Forward] | ||
Valuation allowance, increase (decrease) | (2) | 4 |
Increase related to U.S. foreign tax credits | ||
Deferred Tax Asset, Valuation Allowance [Roll Forward] | ||
Valuation allowance, increase (decrease) | 3 | 1 |
Increase related to capital loss carryforwards | ||
Deferred Tax Asset, Valuation Allowance [Roll Forward] | ||
Valuation allowance, increase (decrease) | (19) | 0 |
Other changes – net | ||
Deferred Tax Asset, Valuation Allowance [Roll Forward] | ||
Valuation allowance, increase (decrease) | $ 0 | $ 3 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Income Tax Expense with Federal Income Taxes at the Statutory Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of income tax expense with federal income taxes at the statutory rate | |||
Federal income tax | $ 525 | $ 451 | $ 312 |
State income taxes – net of federal income tax benefit | 74 | 64 | 41 |
Stock compensation | (16) | (5) | (8) |
Foreign rate difference | 31 | 26 | 26 |
Change in valuation allowance | 6 | 7 | 7 |
Other – net | (23) | (10) | (7) |
Income tax expense | $ 597 | $ 533 | $ 371 |
Effective tax rate | 23.90% | 24.80% | 25% |
INCOME TAXES - Changes in Liabi
INCOME TAXES - Changes in Liability for Tax Uncertainties, Excluding Interest (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in liability for tax uncertainties, excluding interest | |||
Balance at beginning of year | $ 41 | $ 38 | $ 39 |
Additions for tax positions related to the current year | 6 | 4 | 3 |
Additions for tax positions of prior years | 1 | 2 | 0 |
Reductions for tax positions of prior years | (1) | 0 | (1) |
Reductions due to statute lapse | (3) | (2) | (3) |
Settlements, audit payments, refunds - net | (2) | (1) | 0 |
Balance at end of year | $ 42 | $ 41 | $ 38 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Millions | 12 Months Ended | |||
Jan. 01, 2021 segment | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Summarized Information: | ||||
Net sales | $ 16,478 | $ 15,228 | $ 13,022 | |
Operating earnings | 2,565 | 2,215 | 1,547 | |
Depreciation and amortization | 277 | 206 | 173 | |
United States | ||||
Summarized Information: | ||||
Net sales | 13,389 | 12,325 | 10,236 | |
Japan | ||||
Summarized Information: | ||||
Net sales | 1,797 | 1,719 | 1,705 | |
Canada | ||||
Summarized Information: | ||||
Net sales | 646 | 621 | 560 | |
Other foreign countries | ||||
Summarized Information: | ||||
Net sales | 646 | 563 | 521 | |
Unallocated expense | ||||
Summarized Information: | ||||
Net sales | 295 | 259 | 260 | |
Operating earnings | (2) | 9 | (19) | |
High-Touch Solutions N.A. | Operating segments | ||||
Summarized Information: | ||||
Net sales | 13,267 | 12,182 | 10,186 | |
Operating earnings | 2,334 | 1,983 | 1,334 | |
Depreciation and amortization | 206 | 168 | 148 | |
Endless Assortment | Operating segments | ||||
Summarized Information: | ||||
Net sales | 2,916 | 2,787 | 2,576 | |
Operating earnings | 233 | 223 | 232 | |
Depreciation and amortization | 63 | 35 | 22 | |
Other | Operating segments | ||||
Summarized Information: | ||||
Depreciation and amortization | $ 8 | $ 3 | $ 3 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Jan. 01, 2024 $ / shares |
Common Stock | Subsequent Event | |
Subsequent Event [Line Items] | |
Common stock, dividends, per share, declared (in dollars per share) | $ 1.86 |