(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
TABLE OF CONTENTS | ||||||||
Page | ||||||||
PART I - FINANCIAL INFORMATION | ||||||||
Item 1: | Financial Statements (Unaudited) | |||||||
Condensed Consolidated Statements of Earnings for the Three Months Ended March 31, 2023 and 2022 | ||||||||
Condensed Consolidated Statements of Comprehensive Earnings for the Three Months Ended March 31, 2023 and 2022 | ||||||||
Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 | ||||||||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 | ||||||||
Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, 2023 and 2022 | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
Item 2: | Management's Discussion and Analysis of Financial Condition and Results of Operations | |||||||
Item 3: | Quantitative and Qualitative Disclosures About Market Risk | |||||||
Item 4: | Controls and Procedures | |||||||
PART II - OTHER INFORMATION | ||||||||
Item 1: | Legal Proceedings | |||||||
Item 1A: | Risk Factors | |||||||
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||
Item 6: | Exhibits | |||||||
Signatures | ||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net sales | $ | $ | |||||||||
Cost of goods sold | |||||||||||
Gross profit | |||||||||||
Selling, general and administrative expenses | |||||||||||
Operating earnings | |||||||||||
Other (income) expense: | |||||||||||
Interest expense – net | |||||||||||
Other – net | ( | ( | |||||||||
Total other expense – net | |||||||||||
Earnings before income taxes | |||||||||||
Income tax provision | |||||||||||
Net earnings | |||||||||||
Less net earnings attributable to noncontrolling interest | |||||||||||
Net earnings attributable to W.W. Grainger, Inc. | $ | $ | |||||||||
Earnings per share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted average number of shares outstanding: | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net earnings | $ | $ | |||||||||
Other comprehensive earnings (losses): | |||||||||||
Foreign currency translation adjustments – net of reclassification to earnings | ( | ||||||||||
Postretirement benefit plan losses and other – net of tax benefit of $ | ( | ( | |||||||||
Total other comprehensive earnings (losses) | ( | ( | |||||||||
Comprehensive earnings – net of tax | |||||||||||
Less comprehensive earnings (losses) attributable to noncontrolling interest | |||||||||||
Net earnings | |||||||||||
Foreign currency translation adjustments | ( | ( | |||||||||
Total comprehensive earnings (losses) attributable to noncontrolling interest | |||||||||||
Comprehensive earnings attributable to W.W. Grainger, Inc. | $ | $ |
As of | |||||||||||
Assets | (Unaudited) March 31, 2023 | December 31, 2022 | |||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable (less allowances for credit losses of $ | |||||||||||
Inventories – net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, buildings and equipment – net | |||||||||||
Goodwill | |||||||||||
Intangibles – net | |||||||||||
Operating lease right-of-use | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and shareholders' equity | |||||||||||
Current liabilities | |||||||||||
Current maturities | $ | $ | |||||||||
Trade accounts payable | |||||||||||
Accrued compensation and benefits | |||||||||||
Operating lease liability | |||||||||||
Accrued expenses | |||||||||||
Income taxes payable | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Long-term operating lease liability | |||||||||||
Deferred income taxes and tax uncertainties | |||||||||||
Other non-current liabilities | |||||||||||
Shareholders' equity | |||||||||||
Cumulative preferred stock – $ | |||||||||||
Common Stock – $ | |||||||||||
Additional contributed capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive losses | ( | ( | |||||||||
Treasury stock, at cost – | ( | ( | |||||||||
Total W.W. Grainger, Inc. shareholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total shareholders' equity | |||||||||||
Total liabilities and shareholders' equity | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings | $ | $ | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Provision for credit losses | |||||||||||
Deferred income taxes and tax uncertainties | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Trade accounts payable | |||||||||||
Accrued liabilities | ( | ( | |||||||||
Income taxes – net | |||||||||||
Other non-current liabilities | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from debt | |||||||||||
Payments of debt | ( | ||||||||||
Proceeds from stock options exercised | |||||||||||
Payments for employee taxes withheld from stock awards | ( | ( | |||||||||
Purchases of treasury stock | ( | ( | |||||||||
Cash dividends paid | ( | ( | |||||||||
Other – net | ( | ||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Exchange rate effect on cash and cash equivalents | ( | ||||||||||
Net change in cash and cash equivalents | |||||||||||
Cash and cash equivalents at beginning of year | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
Common Stock | Additional Contributed Capital | Retained Earnings | Accumulated Other Comprehensive Earnings (Losses) | Treasury Stock | Noncontrolling Interest | Total | |||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||
Purchases of treasury stock | — | — | — | — | ( | — | ( | ||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||
Other comprehensive earnings (losses) | — | — | — | ( | — | ( | ( | ||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | — | — | ( | ||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||
Common Stock | Additional Contributed Capital | Retained Earnings | Accumulated Other Comprehensive Earnings (Losses) | Treasury Stock | Noncontrolling Interest | Total | |||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||
Purchases of treasury stock | — | — | — | — | ( | — | ( | ||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||
Other comprehensive earnings (losses) | — | — | — | — | ( | ( | |||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | — | — | ( | ||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2023 | 2022(1) | ||||||||||||||||||||||||||||||||||
High-Touch Solutions N.A. | Endless Assortment | Total Company(2) | High-Touch Solutions N.A. | Endless Assortment | Total Company(2) | ||||||||||||||||||||||||||||||
Commercial Services | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Contractors | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Government | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Healthcare | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Manufacturing | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Retail | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Transportation | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Utilities | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Warehousing | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Wholesale | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Other(3) | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Total net sales | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Percent of total company revenue | % | % | % | % | % | % | |||||||||||||||||||||||||||||
(1) Customer industry results for March 31, 2022 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 businesses, which includes the Cromwell business. Other businesses account for approximately | |||||||||||||||||||||||||||||||||||
(3) Other primarily includes revenue from industries and customers that are not material individually, including hospitality, restaurants, property management and natural resources. | |||||||||||||||||||||||||||||||||||
As of | |||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||
Land and land improvements | $ | $ | |||||||||
Building, structures and improvements | |||||||||||
Furniture, fixtures, machinery and equipment | |||||||||||
Property, buildings and equipment | $ | $ | |||||||||
Less accumulated depreciation and amortization | |||||||||||
Property, buildings and equipment – net | $ | $ |
High-Touch Solutions N.A. | Endless Assortment | Other | Total | |||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | $ | ||||||||||||||||||||||
Translation | ( | ( | ( | |||||||||||||||||||||||
Balance at December 31, 2022 | ||||||||||||||||||||||||||
Translation | ( | ( | ||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ |
As of | |||||||||||||||||||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
Weighted average life | Gross carrying amount | Accumulated amortization/impairment | Net carrying amount | Gross carrying amount | Accumulated amortization/impairment | Net carrying amount | |||||||||||||||||||||||||||||||||||
Customer lists and relationships | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Trademarks, trade names and other | |||||||||||||||||||||||||||||||||||||||||
Non-amortized trade names and other | Indefinite | ||||||||||||||||||||||||||||||||||||||||
Capitalized software | |||||||||||||||||||||||||||||||||||||||||
Total intangible assets | $ | $ | $ | $ | $ | $ |
As of | |||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
Japanese yen term loan | |||||||||||||||||||||||
Other | ( | ( | ( | ( | |||||||||||||||||||
Subtotal | |||||||||||||||||||||||
Less current maturities | ( | ( | ( | ( | |||||||||||||||||||
Debt issuance costs and discounts – net of amortization | ( | ( | ( | ( | |||||||||||||||||||
Long-term debt | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Gain or (loss): | |||||||||||
Interest rate swaps: | |||||||||||
Hedged item | $ | ( | $ | ||||||||
Derivatives designated as hedging instrument | $ | $ | ( | ||||||||
As of | ||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
Interest rate swaps reported in Other non-current liabilities | $ | $ |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Net sales | Operating earnings (losses) | Net sales | Operating earnings (losses) | ||||||||||||||||||||
High-Touch Solutions N.A. | $ | $ | $ | $ | |||||||||||||||||||
Endless Assortment | |||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||
Total Company | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||||||||||||||||||||||||
Percent Increase from Prior Year | As a Percent of Net Sales | ||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||
Net sales(1) | $ | 4,091 | $ | 3,647 | 12.2 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||
Cost of goods sold | 2,457 | 2,264 | 8.6 | 60.1 | 62.1 | ||||||||||||||||||||||||
Gross profit | 1,634 | 1,383 | 18.1 | 39.9 | 37.9 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 954 | 849 | 12.3 | 23.3 | 23.3 | ||||||||||||||||||||||||
Operating earnings | 680 | 534 | 27.4 | 16.6 | 14.6 | ||||||||||||||||||||||||
Other expense – net | 18 | 17 | 4.3 | 0.4 | 0.5 | ||||||||||||||||||||||||
Income tax provision | 154 | 132 | 17.3 | 3.8 | 3.5 | ||||||||||||||||||||||||
Net earnings | 508 | 385 | 32.0 | 12.4 | 10.6 | ||||||||||||||||||||||||
Noncontrolling interest | 20 | 19 | 4.1 | 0.5 | 0.6 | ||||||||||||||||||||||||
Net earnings attributable to W.W. Grainger, Inc. | $ | 488 | $ | 366 | 33.4 | 11.9 | 10.0 | ||||||||||||||||||||||
Diluted earnings per share: | $ | 9.61 | $ | 7.07 | 36.0 | % | |||||||||||||||||||||||
(1) For further information regarding the Company's disaggregated revenue, see Note 2 of the Notes to Condensed Consolidated Financial Statements in Part 1, Item 1: Financial Statements of this Form 10-Q. |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net sales | $ | 4,091 | $ | 3,647 | |||||||
$ Change from prior-year period | 444 | 563 | |||||||||
% Change from prior-year period | 12.2 | % | 18.2 | % | |||||||
Daily sales(1) | $ | 63.9 | $ | 57.0 | |||||||
$ Change from prior-year period | 6.9 | 8.0 | |||||||||
% Change from prior-year period | 12.2 | % | 16.4 | % | |||||||
Daily sales impact of currency fluctuations | (2.3) | % | (1.5) | % | |||||||
(1) Daily sales are defined as the total net sales for the period divided by the number of U.S. selling days in the period. There were 64 sales days in both the three months ended March 31, 2023 and 2022. | |||||||||||
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Percent Increase | |||||||||||||||
Net sales | $ | 3,294 | $ | 2,878 | 14.5 | % | |||||||||||
Gross profit | $ | 1,397 | $ | 1,164 | 20.0 | % | |||||||||||
Selling, general and administrative expenses | $ | 775 | $ | 683 | 13.5 | % | |||||||||||
Operating earnings | $ | 621 | $ | 481 | 29.3 | % | |||||||||||
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Percent Increase | |||||||||||||||
Net sales | $ | 724 | $ | 697 | 3.8 | % | |||||||||||
Gross profit | $ | 214 | $ | 197 | 9.0 | % | |||||||||||
Selling, general and administrative expenses | $ | 156 | $ | 142 | 10.2 | % | |||||||||||
Operating earnings | $ | 58 | $ | 55 | 6.0 | % | |||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Total cash provided by (used in): | |||||||||||
Operating activities | $ | 454 | $ | 343 | |||||||
Investing activities | (96) | (57) | |||||||||
Financing activities | (224) | (159) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 2 | (4) | |||||||||
Increase in cash and cash equivalents | $ | 136 | $ | 123 |
Corporate | Senior Unsecured | Short-term | |||||||||||||||
Moody's | A2 | A2 | P1 | ||||||||||||||
S&P | A+ | A+ | A1 |
Period | Total Number of Shares Purchased (A) (B) | Average Price Paid per Share (C) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (D) | Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs | |||||||||||||
Jan. 1 – Jan. 31 | 92,528 | $563.74 | 92,521 | 2,649,445 | |||||||||||||
Feb. 1 – Feb. 28 | 57,903 | $661.23 | 57,815 | 2,591,630 | |||||||||||||
Mar. 1 – Mar. 31 | 74,630 | $675.01 | 74,246 | 2,517,384 | |||||||||||||
Total | 225,061 | 224,582 | |||||||||||||||
EXHIBIT NO. | DESCRIPTION | |||||||
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | |||||||
W.W. GRAINGER, INC. | |||||||||||
Date: | April 27, 2023 | By: | /s/ Deidra C. Merriwether | ||||||||
Deidra C. Merriwether | |||||||||||
Senior Vice President | |||||||||||
and Chief Financial Officer | |||||||||||
(Principal Financial Officer) | |||||||||||
Date: | April 27, 2023 | By: | /s/ Laurie R. Thomson | ||||||||
Laurie R. Thomson | |||||||||||
Vice President and Controller | |||||||||||
(Principal Accounting Officer) |
By: | /s/ D.G. Macpherson | ||||
Name: | D.G. Macpherson | ||||
Title: | Chairman and Chief Executive Officer |
By: | /s/ Deidra C. Merriwether | ||||
Name: | Deidra C. Merriwether | ||||
Title: | Senior Vice President and Chief Financial Officer |
/s/ D.G. Macpherson | ||
D.G. Macpherson | ||
Chairman and Chief Executive Officer | ||
April 27, 2023 | ||
/s/ Deidra C. Merriwether | ||
Deidra C. Merriwether | ||
Senior Vice President and Chief Financial Officer | ||
April 27, 2023 |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Income Statement [Abstract] | ||
Net sales | $ 4,091 | $ 3,647 |
Cost of goods sold | 2,457 | 2,264 |
Gross profit | 1,634 | 1,383 |
Selling, general and administrative expenses | 954 | 849 |
Operating earnings | 680 | 534 |
Other (income) expense: | ||
Interest expense – net | 24 | 23 |
Other – net | (6) | (6) |
Total other expense – net | 18 | 17 |
Earnings before income taxes | 662 | 517 |
Income tax provision | 154 | 132 |
Net earnings | 508 | 385 |
Less net earnings attributable to noncontrolling interest | 20 | 19 |
Net earnings attributable to W.W. Grainger, Inc. | $ 488 | $ 366 |
Earnings per share: | ||
Basic (in dollars per share) | $ 9.66 | $ 7.11 |
Diluted (in dollars per share) | $ 9.61 | $ 7.07 |
Weighted average number of shares outstanding: | ||
Basic (in shares) | 50.2 | 51.1 |
Diluted (in shares) | 50.5 | 51.4 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 508 | $ 385 |
Other comprehensive earnings (losses): | ||
Foreign currency translation adjustments – net of reclassification to earnings | 2 | (26) |
Postretirement benefit plan losses and other – net of tax benefit of $1,and $1, respectively | (3) | (3) |
Total other comprehensive earnings (losses) | (1) | (29) |
Comprehensive earnings – net of tax | 507 | 356 |
Less comprehensive earnings (losses) attributable to noncontrolling interest | ||
Net earnings | 20 | 19 |
Foreign currency translation adjustments | (5) | (16) |
Total comprehensive earnings (losses) attributable to noncontrolling interest | 15 | 3 |
Comprehensive earnings attributable to W.W. Grainger, Inc. | $ 492 | $ 353 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (PARENTHETICAL) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Postretirement benefit plan reclassification, net of tax benefit | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 38 | $ 36 |
Cumulative preferred stock, par value (in dollars per share) | $ 5 | $ 5 |
Cumulative preferred stock, shares authorized | 12,000,000 | 12,000,000 |
Cumulative preferred stock, shares issued | 0 | 0 |
Cumulative preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 109,659,219 | 109,659,219 |
Treasury stock, shares at cost | 59,502,483 | 59,402,896 |
CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY - USD ($) $ in Millions |
Total |
Common Stock |
Additional Contributed Capital |
Retained Earnings |
Accumulated Other Comprehensive Earnings (Losses) |
Treasury Stock |
Noncontrolling Interest |
---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2021 | $ 2,160 | $ 55 | $ 1,270 | $ 9,500 | $ (96) | $ (8,855) | $ 286 |
Increase (Decrease) in Stockholders' Equity | |||||||
Stock-based compensation | 13 | 10 | 3 | ||||
Purchases of treasury stock | (75) | (75) | |||||
Net earnings | 385 | 366 | 19 | ||||
Other comprehensive earnings (losses) | (29) | (13) | (16) | ||||
Cash dividends paid | (84) | (84) | |||||
Ending balance at Mar. 31, 2022 | 2,370 | 55 | 1,280 | 9,782 | (109) | (8,927) | 289 |
Beginning balance at Dec. 31, 2022 | 2,735 | 55 | 1,310 | 10,700 | (180) | (9,445) | 295 |
Increase (Decrease) in Stockholders' Equity | |||||||
Stock-based compensation | 32 | 14 | 18 | ||||
Purchases of treasury stock | (142) | (142) | |||||
Net earnings | 508 | 488 | 20 | ||||
Other comprehensive earnings (losses) | (1) | 4 | (5) | ||||
Cash dividends paid | (87) | (87) | |||||
Ending balance at Mar. 31, 2023 | $ 3,045 | $ 55 | $ 1,324 | $ 11,101 | $ (176) | $ (9,569) | $ 310 |
CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY (PARENTHETICAL) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Statement of Stockholders' Equity (Parentheticals) [Abstract] | ||
Cash dividends paid per share (in dollars per share) | $ 1.72 | $ 1.62 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES W.W. Grainger, Inc. is a broad line, business-to-business distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America (N.A.), Japan and the United Kingdom (U.K.). In this report, the words “Grainger” or “Company” mean W.W. Grainger, Inc. and its subsidiaries, except where the context makes it clear that the reference is only to W.W. Grainger, Inc. itself and not its subsidiaries. Basis of Presentation The Company's Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and therefore do not include all information and disclosures normally included in the annual Consolidated Financial Statements. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from these estimated amounts. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The Condensed Consolidated Balance Sheet at December 31, 2022, has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 21, 2023 (2022 Form 10-K). There were no material changes to the Company’s significant accounting policies from those disclosed in Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company's 2022 Form 10-K.
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REVENUE |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Grainger serves a large number of customers in diverse industries, which are subject to different economic and market-specific factors. The Company's revenue is primarily comprised of MRO product sales and related activities. 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 present the Company's percentage of revenue by reportable segment and by major customer industry:
Total accrued sales incentives are recorded in Accrued expenses and were approximately $92 million and $102 million as of March 31, 2023 and December 31, 2022, respectively. The Company had no material unsatisfied performance obligations, contract assets or liabilities as of March 31, 2023 and December 31, 2022.
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PROPERTY, BUILDINGS AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, BUILDINGS AND EQUIPMENT | PROPERTY, BUILDINGS AND EQUIPMENT Property, buildings and equipment consisted of the following (in millions of dollars):
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators during the three months ended March 31, 2023. As such, quantitative assessments were not required. The balances and changes in the carrying amount of goodwill by segment are as follows (in millions of dollars):
The aggregate cumulative goodwill impairments as of March 31, 2023, was $137 million and consisted of $32 million within High-Touch Solutions N.A. and $105 million in Other. The balances and changes in intangible assets – net are as follows (in millions of dollars):
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Total debt, including long-term, current maturities and debt issuance costs and discounts – net, consisted of the following (in millions of dollars):
Senior Notes Between 2015 and 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 its Senior Notes of approximately $29 million, representing underwriting fees and other expenses, that were recorded as a contra-liability within Long-term debt and are being amortized over the term of the Senior Notes using the straight-line method to Interest expense – net. The Company uses interest rate swaps to manage the risks associated with its 1.85% Senior Notes. These swaps were designated for hedge accounting treatment as fair value hedges. The resulting carrying value adjustments as of March 31, 2023 and December 31, 2022, are presented within Other in the table above. For further discussion on the Company's hedge accounting policies, see Note 6. 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 March 31, 2023 and December 31, 2022, the carrying amount of the term loan, including current maturities due within one year, was $56 million and $69 million, respectively. The term loan matures in August 2024, payable over four equal semi-annual principal installments in 2023 and 2024 and bears an average interest of 0.05%. Fair Value The estimated fair value of the Company’s Senior Notes was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as Level 2 inputs within the fair value hierarchy. For further information on the Company’s debt instruments, see Note 5 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company’s 2022 Form 10-K.
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DERIVATIVE INSTRUMENTS |
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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, and may in the future, enters into certain derivatives or other financial instruments to hedge against these risks. 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 March 31, 2023 and December 31, 2022 was $450 million and $500 million, respectively. The liability hedged by the interest rate swaps is recorded on the Condensed Consolidated Balance Sheets in Long-term debt. As of March 31, 2023 and December 31, 2022, the carrying amount of the hedged item, including the cumulative amount of fair value hedging adjustments was $424 million and $466 million, respectively. The effect of the Company's fair value hedges on the Condensed Consolidated Statements of Earnings in Interest expense – net is as follows (in millions of dollars):
The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of March 31, 2023, are shown in the following table (in millions of dollars):
Fair Value The estimated fair values of the Company's derivative instruments were based on quoted market forward rates, which are classified as Level 2 inputs within the fair value hierarchy and reflect the present value of the amount that the Company would pay for contracts involving the same notional amounts and maturity dates. No adjustments were required during the current period to reflect the counterparty’s credit risk or the Company’s own nonperformance risk.
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SEGMENT INFORMATION |
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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 include 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 criteria 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 selling, general and administrative expenses and are also eliminated in the Company's Consolidated Financial Statements. Following is a summary of segment results (in millions of dollars):
The Company is a broad line distributor of MRO products and services. Products are regularly added and removed from the Company's inventory. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered, including the evolving list of products stocked and additional products available online but not stocked. Assets for reportable segments are not disclosed as such information is not regularly reviewed by the Company's Chief Operating Decision Maker.
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CONTINGENCIES AND LEGAL MATTERS |
3 Months Ended |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND LEGAL MATTERS | CONTINGENCIES AND LEGAL MATTERS From time to time the Company is involved in various legal and administrative proceedings, including claims related to: product liability, safety or compliance; privacy and cybersecurity matters; negligence; contract disputes; environmental issues; unclaimed property; wage and hour laws; intellectual property; advertising and marketing; consumer protection; pricing (including disaster or emergency declaration pricing statutes); employment practices; regulatory compliance, including trade and export matters; anti-bribery and corruption; and other matters and actions brought by employees, consumers, competitors, suppliers, customers, governmental entities and other third parties. As previously disclosed, since the fourth quarter of 2019, Grainger, KMCO, LLC (KMCO) and other defendants have been named in several product liability-related lawsuits in the Harris County, Texas District Court relating to an explosion at a KMCO chemical refinery located in Crosby, Harris County, Texas on April 2, 2019. The complaints in which Grainger has been named, which to date encompass approximately 186 plaintiffs, seek recovery of compensatory and other damages and relief in relation to personal injury, including one death and various other alleged injuries. On May 8, 2020, KMCO filed a voluntary petition in the United States Bankruptcy Court for the Southern District of Texas for relief under Chapter 7 of Title 11 of the United States Bankruptcy Court in the case KMCO, LLC, No. 20-60028. As a result of the Chapter 7 proceedings, the claims against KMCO in the Harris County lawsuits were stayed. Effective January 1, 2021, the Bankruptcy Court lifted the stay with respect to KMCO. In the product liability cases, the Harris County District Court decided to schedule bellwether trials involving a subset of plaintiffs the Court believes are representative of the parties' claims and defenses, and the first of such trials involving six plaintiffs (the First Scheduled Trial) was scheduled to commence in mid-January 2023 and later postponed until May 2023. To date, the Company and 32 plaintiffs have executed settlement agreements with respect to such plaintiffs' claims against the Company. Those 32 plaintiffs include the plaintiffs who alleged the most serious injuries, as well as all six plaintiffs from the First Scheduled Trial. The contingent liability and corresponding recoverable asset recorded on the Consolidated Balance Sheet as of December 31, 2022 related to settlements previously disclosed were relieved in full upon payment by insurance. This resulted in no effect on net earnings or cash flows for the quarter ended March 31, 2023. Whether trials involving any or all of the remaining plaintiffs will proceed is uncertain and the timing or outcome of any such trials cannot currently be predicted, nor is it currently possible to make any additional estimate of potential loss or range of loss. On December 16, 2020, KMCO, the trustee of its estate and ORG Chemical Holdings, LLC, KMCO’s parent company (ORG), filed a property damage lawsuit relating to the KMCO chemical refinery incident against Grainger and another defendant in the Harris County, Texas District Court, which seeks unspecified damages (the KMCO Case). On April 1, 2021, 24 individual plaintiffs filed a petition in intervention seeking to be added as plaintiffs in the KMCO Case and seeking unspecified damages. On March 24, 2021, Indian Harbor Insurance Company, together with other insurance companies and underwriters, filed a property damage lawsuit relating to the KMCO chemical refinery incident against Grainger and another defendant in the Harris County, Texas District Court, seeking reimbursement of insurance payments made to or on behalf of KMCO and ORG, the insured parties under their respective policies, and other damages. The Company is currently unable to predict the timing, outcome or any estimate of possible loss or range of loss of the ORG and the Indian Harbor Insurance Company lawsuits. Grainger continues to investigate each of the various remaining claims against the Company relating to the KMCO chemical refinery incident and intends to contest these matters vigorously. Also, as a government contractor selling to federal, state and local governmental entities, the Company may be subject to governmental or regulatory inquiries or audits or other proceedings, including those related to contract administration, pricing and product compliance. From time to time, the Company has also been named, along with numerous other nonaffiliated companies, as defendant in litigation in various states involving asbestos and/or silica. These lawsuits typically assert claims of personal injury arising from alleged exposure to asbestos and/or silica as a consequence of products manufactured by third parties purportedly distributed by the Company. While several lawsuits have been dismissed in the past based on the lack of product identification, if a specific product distributed by the Company is identified in any pending or future lawsuits, the Company will seek to exercise indemnification remedies against the product manufacturer to the extent available. In addition, the Company believes that a substantial number of these claims are covered by insurance. The Company has entered into agreements with its major insurance carriers relating to the scope, coverage and the costs of defense of lawsuits involving claims of exposure to asbestos. The Company believes it has strong legal and factual defenses and intends to continue defending itself vigorously in these lawsuits. 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.
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SUBSEQUENT EVENTS |
3 Months Ended |
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Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn April 26, 2023, the Company’s Board of Directors declared a quarterly dividend of $1.86 per share, payable June 1, 2023, to shareholders of record on May 8, 2023. |
REVENUE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenues | The following table present the Company's percentage of revenue by reportable segment and by major customer industry:
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PROPERTY, BUILDINGS AND EQUIPMENT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Buildings and Equipment | Property, buildings and equipment consisted of the following (in millions of dollars):
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Balances and Changes in Carrying Amounts of Goodwill | The balances and changes in the carrying amount of goodwill by segment are as follows (in millions of dollars):
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Schedule of Balance in Intangible Assets, Net | The balances and changes in intangible assets – net are as follows (in millions of dollars):
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DEBT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt Instruments | long-term, current maturities and debt issuance costs and discounts – net, consisted of the following (in millions of dollars):
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DERIVATIVE INSTRUMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effect of Fair Value Hedges in Interest Expense, Net | The effect of the Company's fair value hedges on the Condensed Consolidated Statements of Earnings in Interest expense – net is as follows (in millions of dollars):
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Schedule of Fair Value and Carrying Amounts of Outstanding Derivative Instruments | The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of March 31, 2023, are shown in the following table (in millions of dollars):
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SEGMENT INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Results | Following is a summary of segment results (in millions of dollars):
|
REVENUE - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Accrued sales incentives | $ 92 | $ 102 |
PROPERTY, BUILDINGS AND EQUIPMENT (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | $ 3,459 | $ 3,443 |
Less accumulated depreciation and amortization | 1,991 | 1,982 |
Property, buildings and equipment – net | 1,468 | 1,461 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | 319 | 318 |
Building, Structures and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | 1,432 | 1,463 |
Furniture, Fixtures, Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, buildings and equipment | $ 1,708 | $ 1,662 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Balances and Changes in Carrying Amounts of Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Mar. 31, 2023 |
Jun. 30, 2022 |
|
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 371 | $ 384 |
Translation | (1) | (13) |
Goodwill, ending balance | 370 | |
Other | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | 0 |
Translation | 0 | 0 |
Goodwill, ending balance | 0 | |
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 313 | 321 |
Translation | 0 | (8) |
Goodwill, ending balance | 313 | |
Endless Assortment | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 58 | 63 |
Translation | (1) | $ (5) |
Goodwill, ending balance | $ 57 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | |
Segment Reporting Information [Line Items] | |
Cumulative goodwill impairments | $ 137 |
Other | |
Segment Reporting Information [Line Items] | |
Cumulative goodwill impairments | 105 |
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | |
Segment Reporting Information [Line Items] | |
Cumulative goodwill impairments | $ 32 |
DEBT - Narrative (Details) $ in Millions |
1 Months Ended | ||||||
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Aug. 31, 2020
JPY (¥)
payment
|
Mar. 31, 2023
USD ($)
|
Mar. 31, 2023
JPY (¥)
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2022
JPY (¥)
|
Dec. 31, 2021
USD ($)
|
Feb. 29, 2020 |
|
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 2,336 | $ 2,340 | |||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt principal amount | $ 2,300 | ||||||
Debt issuance costs | $ 29 | ||||||
Yen Denominated Bank Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 56 | 69 | |||||
Unsecured Senior Notes, 1.85% | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 1.85% | 1.85% | 1.85% | ||||
Long-term debt, gross | $ 500 | $ 500 | |||||
Term Loan Agreement, 0.05% | Yen Denominated Bank Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt principal amount | ¥ | ¥ 9,000,000,000 | ||||||
Long-term debt, gross | ¥ | ¥ 56,000,000 | ¥ 69,000,000 | |||||
Number of semi-annual principal payments | payment | 4 | ||||||
Average interest rate | 0.05% |
DERIVATIVE INSTRUMENTS - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivative [Line Items] | ||
Derivative instruments and hedges, liabilities | $ 424 | $ 466 |
Designated as Hedging Instrument | Fair Value Hedging | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 450 | $ 500 |
DERIVATIVE INSTRUMENTS - Effect of Fair Value Hedges in Interest Expense, Net (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest income (expense), net | $ (24) | $ (23) |
Other Contract | Fair Value Hedging | Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest income (expense), net | (8) | 19 |
Interest rate swaps | Fair Value Hedging | Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest income (expense), net | $ 8 | $ (19) |
DERIVATIVE INSTRUMENTS - Fair Value and Carrying Amounts of Outstanding Derivative Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Interest rate swaps | Designated as Hedging Instrument | Other Noncurrent Liabilities | ||
Derivative [Line Items] | ||
Interest rate swaps reported in Other non-current liabilities | $ 22 | $ 34 |
SEGMENT INFORMATION - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Summary of Segment Results (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Segment Reporting Information [Line Items] | ||
Total net sales | $ 4,091 | $ 3,647 |
Segment operating earnings | 680 | 534 |
Other | ||
Segment Reporting Information [Line Items] | ||
Total net sales | 73 | 72 |
Segment operating earnings | 1 | (2) |
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Total net sales | 3,294 | 2,878 |
Segment operating earnings | 621 | 481 |
Endless Assortment | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Total net sales | 724 | 697 |
Segment operating earnings | $ 58 | $ 55 |
CONTINGENCIES AND LEGAL MATTERS (Details) |
3 Months Ended | 42 Months Ended | |
---|---|---|---|
Apr. 01, 2021
numberOfPlaintiffs
|
Mar. 31, 2023
numberOfPlaintiffs
|
Mar. 31, 2023
death
numberOfPlaintiffs
|
|
Loss Contingencies [Line Items] | |||
Number of plaintiffs | 24 | 32 | 186 |
Number of deaths | death | 1 | ||
First Scheduled Trial | |||
Loss Contingencies [Line Items] | |||
Number of plaintiffs | 6 |
SUBSEQUENT EVENTS (Details) |
Apr. 26, 2023
$ / shares
|
---|---|
Subsequent event | |
Subsequent Event [Line Items] | |
Dividend declared (in dollars per share) | $ 1.86 |
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