Illinois
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36-1150280
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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100 Grainger Parkway, Lake Forest, Illinois
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60045-5201
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(Address of principal executive offices)
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(Zip Code)
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(847) 535-1000
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(Registrant’s telephone number including area code)
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Large accelerated filer [X] |
Accelerated filer [ ]
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Non-accelerated filer [ ] |
Smaller reporting company [ ]
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Page(s)
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PART I
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Item 1:
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BUSINESS
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3-5
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THE COMPANY
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3
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UNITED STATES
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3-4
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CANADA
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4
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OTHER BUSINESSES
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4-5
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SEASONALITY
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5
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COMPETITION
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5
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EMPLOYEES
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5
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WEBSITE ACCESS TO COMPANY REPORTS
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5
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Item 1A
:
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RISK FACTORS
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5-6
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Item 1B
:
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UNRESOLVED STAFF COMMENTS
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6
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Item 2:
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PROPERTIES
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7
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Item 3:
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LEGAL PROCEEDINGS
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7-8
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Item 4:
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REMOVED AND RESERVED
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8
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PART II
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Item 5:
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER
|
|||||
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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9-10
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Item 6:
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SELECTED FINANCIAL DATA
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10
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Item 7:
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
|
|||||
CONDITION AND RESULTS OF OPERATIONS
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11-20
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Item 7A:
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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21
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Item 8:
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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21
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Item 9:
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
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|||||
ON ACCOUNTING AND FINANCIAL DISCLOSURE
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21
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Item 9A:
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CONTROLS AND PROCEDURES
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21
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Item 9B:
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OTHER INFORMATION
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21
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PART III
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||||||
Item 10:
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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22
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Item 11:
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EXECUTIVE COMPENSATION
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23
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Item 12:
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
|
|
||||
RELATED STOCKHOLDER MATTERS | 23 | |||||
Item 13:
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
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|||||
DIRECTOR INDEPENDENCE
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23
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|||||
Item 14:
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PRINCIPAL ACCOUNTING FEES AND SERVICES
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23
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PART IV
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||||||
Item 15:
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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23-25
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Signatures
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60
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|||||
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Location
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Facility and Use (6)
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Size in Square
Feet (in 000’s)
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United States (1)
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402 United States branch locations
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8,974
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||
United States (2)
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14 Distribution Centers
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5,822
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||
United States (3)
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Other facilities
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2,914
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||
Canada (4)
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185 Acklands – Grainger facilities
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2,678
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||
Other Businesses (5)
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Other facilities
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1,538
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||
Chicago Area (2)
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Headquarters and General Offices
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1,327
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||
Total Square Feet
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23,253
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(1)
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United States branches consist of 277 owned and 125 leased properties. Most leases expire between 2011 and 2018.
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(2)
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These facilities are primarily owned.
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(3)
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These facilities include both owned and leased locations, consisting of storage facilities, office space, and idle properties including a one million square foot facility for a new distribution center in Illinois to be opened in 2012.
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(4)
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Acklands – Grainger facilities consist of general offices, distribution centers and branches, of which 62 are owned and 123 leased.
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(5)
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These facilities include owned and leased locations in Japan, Mexico, India, Puerto Rico, China, Colombia and Panama.
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(6)
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Owned facilities are not subject to any mortgages.
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Prices
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|||||||||||||
Quarters
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High
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Low
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Dividends
|
||||||||||
2010
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First
|
$ | 109.98 | $ | 96.13 | $ | 0.46 | ||||||
Second
|
116.07 | 96.50 | 0.54 | ||||||||||
Third
|
121.84 | 96.81 | 0.54 | ||||||||||
Fourth
|
139.09 | 117.25 | 0.54 | ||||||||||
Year
|
$ | 139.09 | $ | 96.13 | $ | 2.08 | |||||||
2009
|
First
|
$ | 81.18 | $ | 59.95 | $ | 0.40 | ||||||
Second
|
86.36 | 68.61 | 0.46 | ||||||||||
Third
|
91.55 | 77.67 | 0.46 | ||||||||||
Fourth
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102.54 | 85.24 | 0.46 | ||||||||||
Year
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$ | 102.54 | $ | 59.95 | $ | 1.78 |
Period
|
Total Number
of Shares Purchased (A)
|
Average Price Paid per
Share (B)
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (C)
|
Maximum Number of Shares That May
Yet Be Purchased Under the
Plans or Programs
|
|||||||||||||
Oct. 1 – Oct. 31
|
-
|
-
|
-
|
8,081,385
|
shares
|
||||||||||||
Nov. 1 – Nov. 30
|
-
|
-
|
-
|
8,081,385
|
shares
|
||||||||||||
Dec. 1 – Dec. 31
|
-
|
-
|
-
|
8,081,385
|
shares
|
||||||||||||
Total
|
-
|
-
|
-
|
(A)
|
There were no shares withheld to satisfy tax withholding obligations in connection with the vesting of employee restricted stock awards.
|
(B)
|
Average price paid per share includes any commissions paid and includes only those amounts related to purchases as part of publicly announced plans or programs.
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(C)
|
Purchases were made pursuant to a share repurchase program approved by Grainger’s Board of Directors on July 28, 2010. Effective July 28, 2010, the Board of Directors granted authority to repurchase up to 10 million shares, which replaced the previous authorization of April 30, 2008. The program has no specified expiration date. Activity is reported on a trade date basis.
|
December 31,
|
||||||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
|||||||||||||||||||
W.W. Grainger, Inc.
|
$ | 100 | $ | 100 | $ | 127 | $ | 117 | $ | 146 | $ | 213 | ||||||||||||
Dow Jones US Industrial Suppliers
Total Stock Market Index
|
100 | 103 | 118 | 92 | 116 | 163 | ||||||||||||||||||
S&P 500 Stock Index
|
100 | 116 | 122 | 77 | 97 | 112 |
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(In thousands of dollars, except for per share amounts)
|
||||||||||||||||||||
Net sales
|
$ | 7,182,158 | $ | 6,221,991 | $ | 6,850,032 | $ | 6,418,014 | $ | 5,883,654 | ||||||||||
Net earnings attributable to W.W. Grainger, Inc.
|
510,865 | 430,466 | 475,355 | 420,120 | 383,399 | |||||||||||||||
Net earnings per basic share*
|
7.05 | 5.70 | 6.07 | 5.01 | 4.36 | |||||||||||||||
Net earnings per diluted share*
|
6.93 | 5.62 | 5.97 | 4.91 | 4.24 | |||||||||||||||
Total assets
|
3,904,377 | 3,726,332 | 3,515,417 | 3,094,028 | 3,046,088 | |||||||||||||||
Long-term debt (less current maturities)
|
420,446 | 437,500 | 488,228 | 4,895 | 4,895 | |||||||||||||||
Cash dividends paid per share
|
$ | 2.08 | $ | 1.78 | $ | 1.55 | $ | 1.34 | $ | 1.11 |
For the Years Ended December 31,
|
||||||||||||||||||||
As a Percent of Net Sales
|
Percent Increase/(Decrease) from Prior Year
|
|||||||||||||||||||
2010
|
2009
|
2008
|
2010
|
2009
|
||||||||||||||||
Net sales
|
100.0 | % | 100.0 | % | 100.0 | % | 15.4 | % | (9.2 | )% | ||||||||||
Cost of merchandise sold
|
58.2 | 58.2 | 59.0 | 15.3 | (10.4 | ) | ||||||||||||||
Gross profit
|
41.8 | 41.8 | 41.0 | 15.7 | (7.5 | ) | ||||||||||||||
Operating expenses
|
29.9 | 31.1 | 29.6 | 11.0 | (4.6 | ) | ||||||||||||||
Operating earnings
|
11.9 | 10.7 | 11.4 | 29.4 | (15.0 | ) | ||||||||||||||
Other income (expense)
|
(0.1 | ) | 0.7 | (0.1 | ) | (115.9 | ) | (545.5 | ) | |||||||||||
Income taxes
|
4.7 | 4.5 | 4.4 | 23.0 | (7.2 | ) | ||||||||||||||
Noncontrolling interest
|
0.0 | 0.0 | 0.0 | – | – | |||||||||||||||
Net earnings attributable to W.W. Grainger, Inc.
|
7.1 | % | 6.9 | % | 6.9 | % | 18.7 | % | (9.4 | )% |
For the Years Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Other income and (expense):
|
||||||||
Interest income (expense) – net
|
$ | (6,972 | ) | $ | (7,408 | ) | ||
Equity in net (loss) income of unconsolidated entities
|
(182 | ) | 1,497 | |||||
Gain on previously held equity interest – net
|
– | 47,343 | ||||||
Other non-operating income
|
1,608 | 964 | ||||||
Other non-operating expense
|
(1,151 | ) | (283 | ) | ||||
$ | (6,697 | ) | $ | 42,113 |
For the Years Ended December 31,
|
||||||||
2009
|
2008
|
|||||||
Other income and (expense):
|
||||||||
Interest income (expense) – net
|
$ | (7,408 | ) | $ | (9,416 | ) | ||
Equity in net income of unconsolidated entities
|
1,497 | 3,642 | ||||||
Gain (write-off) of investment in unconsolidated entities
|
47,343 | (6,031 | ) | |||||
Other non-operating income
|
964 | 2,668 | ||||||
Other non-operating expense
|
(283 | ) | (317 | ) | ||||
$ | 42,113 | $ | (9,454 | ) |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Land, buildings, structures and improvements
|
$ | 63,358 | $ | 67,917 | $ | 107,688 | ||||||
Furniture, fixtures, machinery and equipment
|
51,965 | 63,667 | 76,163 | |||||||||
Subtotal
|
115,323 | 131,584 | 183,851 | |||||||||
Capitalized software
|
16,217 | 8,367 | 12,297 | |||||||||
Total
|
$ | 131,540 | $ | 139,951 | $ | 196,148 |
Payments Due by Period
|
||||||||||||||||||||
Total Amounts Committed
|
Less than 1 Year
|
1 – 3 Years
|
4 – 5 Years
|
More than 5 Years
|
||||||||||||||||
Long-term debt obligations
|
$ | 451,505 | $ | 31,059 | $ | 220,138 | $ | 200,055 | $ | 253 | ||||||||||
Interest on long-term debt
|
3,372 | 2,411 | 815 | 46 | 100 | |||||||||||||||
Operating lease obligations
|
201,563 | 45,461 | 72,787 | 48,471 | 34,844 | |||||||||||||||
Purchase obligations:
|
||||||||||||||||||||
Uncompleted additions to
property, buildings and equipment
|
54,323 | 53,923 | 192 | 208 | – | |||||||||||||||
Commitments to purchase inventory
|
272,052 | 271,720 | 332 | – | – | |||||||||||||||
Other purchase obligations
|
146,618 | 62,740 | 49,480 | 34,398 | – | |||||||||||||||
Other liabilities
|
346,540 | 154,009 | 19,091 | 21,405 | 152,035 | |||||||||||||||
Total
|
$ | 1,475,973 | $ | 621,323 | $ | 362,835 | $ | 304,583 | $ | 187,232 |
For the Years Ended December 31 | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Risk-free interest rate
|
2.9 | % | 2.4 | % | 3.2 | % | ||||||
Expected life
|
6 years
|
6 years
|
6 years
|
|||||||||
Expected volatility
|
24.7 | % | 28.8 | % | 25.2 | % | ||||||
Expected dividend yield
|
2.0 | % | 2.3 | % | 1.8 | % |
1 Percentage Point
|
||||||||
Increase
|
(Decrease)
|
|||||||
Effect on total of service and interest cost
|
$ | 6,638 | $ | (5,071 | ) | |||
Effect on accumulated postretirement benefit obligation
|
54,257 | (42,320 | ) |
Item 9: Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
(A)
|
Management’s Annual Report on Internal Control Over Financial Reporting
|
(B)
|
Attestation Report of the Registered Public Accounting Firm
|
(C)
|
Changes in Internal Control Over Financial Reporting
|
Name and Age
|
Positions and Offices Held and Principal
Occupation and Employment During the Past Five Years
|
|
Laura D. Brown (47)
|
Senior Vice President, Communications and Investor Relations, a position assumed in 2010 after serving as Vice President, Global Business Communications, a position assumed in 2009 and Vice President, Investor Relations, a position assumed in 2008. Previously, Ms. Brown served as Vice President, Marketing, a position assumed in 2005. After joining Grainger in 2000, she served in various management positions including Vice President, Finance and Vice President, Internet Business Analysis and Supplier Management.
|
|
Court D. Carruthers (38)
|
President, Grainger International, a position assumed in 2009, and Senior Vice President of Grainger, a position assumed in 2007. Previously, Mr. Carruthers served as President of Acklands – Grainger Inc., a position assumed in 2006. Prior to assuming the last-mentioned position, he served as Vice President, National Accounts and Sales of Acklands – Grainger Inc., a position assumed in 2002 when he joined that company.
|
|
John L. Howard (53)
|
Senior Vice President and General Counsel, a position assumed in 2000.
|
|
Gregory S. Irving (52)
|
Vice President and Controller, a position assumed in 2008. Previously, Mr. Irving served as Vice President, Finance, for Acklands – Grainger Inc. since 2004. After joining Grainger in 1999 he served in various management positions including Vice President, Financial Services and Director, Internal Audit.
|
|
Ronald L. Jadin (50)
|
Senior Vice President and Chief Financial Officer, a position assumed in 2008. Previously, Mr. Jadin served as Vice President and Controller, a position assumed in 2006 after serving as Vice President, Finance. Upon joining Grainger in 1998, he served as Director, Financial Planning and Analysis.
|
|
Donald G. Macpherson (43)
|
Senior Vice President, Global Supply Chain, a position assumed in 2008. Mr. Macpherson joined Grainger in 2008 as Senior Vice President, Supply Chain. Before joining Grainger, he was Partner and Director of the Boston Consulting Group, a global management consulting firm and advisor on business strategy.
|
|
Michael A. Pulick (46)
|
Senior Vice President and President, Grainger U.S., a position assumed in 2008 after serving as Senior Vice President of Customer Service, a position assumed in 2006. After joining Grainger in 1999, Mr. Pulick has held a number of increasingly responsible positions in Grainger’s supplier and product management areas including Vice President, Product Management and Vice President, Merchandising.
|
|
James T. Ryan (52)
|
Chairman of the Board, President and Chief Executive Officer of Grainger, positions assumed in 2009, 2006 and 2008, respectively. Mr. Ryan became Chief Operating Officer and was appointed to Grainger’s Board of Directors in 2007. Prior to that, Mr. Ryan served as Group President, a position assumed in 2004. He has served Grainger in increasingly responsible roles since 1980, including Executive Vice President, Marketing, Sales and Service; Vice President, Information Services; President, Grainger.com; and President, Grainger Parts.
|
|
PART IV
|
(a)
|
1.
|
Financial Statements. See Index to Financial Statements and Supplementary Data.
|
|
2.
|
Financial Statement Schedules. The schedules listed in Reg. 210.5-04 have been omitted because they are either not applicable or the required information is shown in the consolidated financial statements or notes thereto.
|
|
3.
|
Exhibits
|
|
(3)
|
(a)
|
Restated Articles of Incorporation, incorporated by reference to Exhibit 3(i) to Grainger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
|
|
(b)
|
Bylaws, as amended February 17, 2010, incorporated by reference to Exhibit 3(b) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(4)
|
Instruments Defining the Rights of Security Holders, Including Indentures
|
|
(a)
|
No instruments which define the rights of holders of Grainger’s Industrial Development Revenue Bonds are filed herewith, pursuant to the exemption contained in Regulation S-K, Item 601(b)(4)(iii). Grainger hereby agrees to furnish to the Securities and Exchange Commission, upon request, a copy of any such instrument.
|
|
(10)
|
Material Contracts
|
|
(a)
|
(i)
|
A Credit Agreement with Wachovia Bank, National Association, as administrative agent, and other lenders, incorporated by reference to Exhibit 10 to Grainger's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.
|
|
(b)
|
Compensatory Plans or Arrangements
|
|
(i)
|
Director Stock Plan, as amended, incorporated by reference to Exhibit 10(c) to Grainger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.
|
|
(ii)
|
1990 Long-Term Stock Incentive Plan, as amended, incorporated by reference to Exhibit 10(a) to Grainger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.
|
|
(iii)
|
2001 Long-Term Stock Incentive Plan, as amended, incorporated by reference to Exhibit 10(b) to Grainger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.
|
|
(iv)
|
Form of Indemnification Agreement between Grainger and each of its directors and certain of its executive officers, incorporated by reference to Exhibit 10(b)(i) to Grainger’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.
|
|
(v)
|
Executive Death Benefit Plan, as amended, incorporated by reference to Exhibit 10(b)(v) to Grainger's Annual Report on Form 10-K for the year ended December 31, 2007.
|
|
(1)
|
First amendment to the Executive Death Benefit Plan, incorporated by reference to Exhibit 10(b)(v)(1) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2008.
|
|
(2)
|
Second amendment to the Executive Death Benefit Plan, incorporated by reference to Exhibit 10(b)(iv)(2) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(vi)
|
Supplemental Profit Sharing Plan, as amended, incorporated by reference to Exhibit 10(viii) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2003.
|
|
(vii)
|
Supplemental Profit Sharing Plan II, as amended, incorporated by reference to Exhibit 10(b)(ix) to Grainger's Annual Report on Form 10-K for the year ended December 31, 2007.
|
|
(viii)
|
Voluntary Salary and Incentive Deferral Plan, as amended, incorporated by reference to Exhibit 10(b)(xi) to Grainger's Annual Report on Form 10-K for the year ended December 31, 2007.
|
|
(ix)
|
Summary Description of Directors Compensation Program effective April 29, 2009, incorporated by reference to Exhibit 10(b)(xiii) to Grainger’s Annual Report on Form10-K for the year ended December 31, 2008.
|
|
(x)
|
Summary Description of Directors Compensation Program effective April 28, 2010, incorporated by reference to Exhibit 10(b)(xii) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(xi)
|
Summary Description of Directors Compensation Program effective April 27, 2011.
|
|
(xii)
|
2005 Incentive Plan, as amended, incorporated by reference to Exhibit 10(d) to Grainger's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.
|
|
(xiii)
|
2010 Incentive Plan, incorporated by reference to Exhibit B of Grainger’s Proxy Statement dated March 12, 2010.
|
|
(xiv)
|
Form of Stock Option Award Agreement between Grainger and certain of its executive officers, incorporated by reference to Exhibit 10(xiv) to Grainger's Annual Report on Form 10-K for the year ended December 31, 2005.
|
|
(xv)
|
Form of Stock Option Award and Restricted Stock Unit Agreement between Grainger and certain of its executive officers, incorporated by reference to Exhibit 10(xv) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2005.
|
|
(xvi)
|
Form of Stock Option Award Agreement between Grainger and certain of its executive officers, incorporated by reference to Exhibit 10(b)(xvi) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(xvii)
|
Form of Stock Option and Restricted Stock Unit Agreement between Grainger and certain of its executive officers, incorporated by reference to Exhibit 10(b)(xvii) to Grainger's Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(xviii)
|
Form of Restricted Stock Unit Agreement between Grainger and certain of its executive officers.
|
|
(xix)
|
Form of Performance Share Award Agreement between Grainger and certain of its international executive officers, incorporated by reference to Exhibit 10(xvi) to Grainger's Annual Report on Form 10-K for the year ended December 31, 2005.
|
|
(xx)
|
Form of Performance Share Award Agreement (non-dividend equivalent) between Grainger and certain of its executive officers, incorporated by reference to Exhibit 10(b)(xviii) to Grainger's Annual Report on Form 10-K for the year ended December 31, 2008.
|
|
(xxi)
|
Form of Performance Share Award Agreement (non-dividend equivalent and recoupment) between Grainger and certain of its executive officers, incorporated by reference to Exhibit 10(b)(xx) to Grainger's Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(xxii)
|
Offer of Employment Letter to Mr. D.G. Macpherson dated December 14, 2007, incorporated by reference to Exhibit 10(b)(xxi) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(xxiii)
|
Summary Description of 2009 Management Incentive Program, incorporated by reference to Exhibit 10(b)(xxi) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2008.
|
|
(xxiv)
|
Summary Description of 2010 Management Incentive Program, incorporated by reference to Exhibit 10(b)(xxiv) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(xxv)
|
Summary Description of the 2011 Management Incentive Program.
|
|
(xxvi)
|
Incentive Program Recoupment Agreement, incorporated by reference to Exhibit 10(b)(xxv) to Grainger’s Annual Report on Form 10-K for the year ended December 31, 2009.
|
|
(xxvii)
|
Form of Change in Control Employment Agreement between Grainger and certain of its executive officers.
|
|
(21)
|
Subsidiaries of Grainger.
|
|
(23)
|
Consent of Independent Registered Public Accounting Firm.
|
|
(31)
|
Rule 13a – 14(a)/15d – 14(a) Certifications
|
|
(a)
|
Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
(b)
|
Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
(32)
|
Section 1350 Certifications
|
|
(a)
|
Chief Executive Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
(b)
|
Chief Financial Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Page(s
)
|
|
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
|
27
|
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
28-29
|
FINANCIAL STATEMENTS
|
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
30
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
|
31
|
CONSOLIDATED BALANCE SHEETS
|
32-33
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
34-35
|
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
|
36
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
37-59
|
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Net sales
|
$ | 7,182,158 | $ | 6,221,991 | $ | 6,850,032 | ||||||
Cost of merchandise sold
|
4,176,474 | 3,623,465 | 4,041,810 | |||||||||
Gross profit
|
3,005,684 | 2,598,526 | 2,808,222 | |||||||||
Warehousing, marketing and administrative
expenses
|
2,145,209 | 1,933,302 | 2,025,550 | |||||||||
Operating earnings
|
860,475 | 665,224 | 782,672 | |||||||||
Other income and (expense):
|
||||||||||||
Interest income
|
1,215 | 1,358 | 5,069 | |||||||||
Interest expense
|
(8,187 | ) | (8,766 | ) | (14,485 | ) | ||||||
Equity in net (loss) income of unconsolidated entities
|
(182 | ) | 1,497 | 3,642 | ||||||||
Gain (write-off) of investment in unconsolidated entities – net
|
– | 47,343 | (6,031 | ) | ||||||||
Other non-operating income
|
1,608 | 964 | 2,668 | |||||||||
Other non-operating expense
|
(1,151 | ) | (283 | ) | (317 | ) | ||||||
Total other income and (expense)
|
(6,697 | ) | 42,113 | (9,454 | ) | |||||||
Earnings before income taxes
|
853,778 | 707,337 | 773,218 | |||||||||
Income taxes
|
340,196 | 276,565 | 297,863 | |||||||||
Net earnings
|
513,582 | 430,772 | 475,355 | |||||||||
Less: Net earnings attributable to noncontrolling interest
|
2,717 | 306 | – | |||||||||
Net earnings attributable to W.W. Grainger, Inc.
|
$ | 510,865 | $ | 430,466 | $ | 475,355 | ||||||
Earnings per share:
|
||||||||||||
Basic
|
$ | 7.05 | $ | 5.70 | $ | 6.07 | ||||||
Diluted
|
$ | 6.93 | $ | 5.62 | $ | 5.97 | ||||||
Weighted average number of shares outstanding:
|
||||||||||||
Basic
|
70,836,945 | 73,786,346 | 76,579,856 | |||||||||
Diluted
|
72,138,858 | 74,891,852 | 77,887,620 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Net earnings
|
$ | 513,582 | $ | 430,772 | $ | 475,355 | ||||||
Other comprehensive earnings (losses):
|
||||||||||||
Foreign currency translation adjustments, net of
tax (expense)
benefit
of $(3,397), $(7,813) and $11,454, respectively
|
46,450 | 54,693 | (79,287 | ) | ||||||||
Derivative instruments, net of tax benefit of $2,257
|
(3,559 | ) | – | – | ||||||||
Reclassification of cumulative currency translation gain
|
– | (3,145 | ) | – | ||||||||
Defined postretirement benefit plan, net of tax
benefit
of $1,821, $984 and $19,368, respectively
|
(2,874 | ) | (1,552 | ) | (30,550 | ) | ||||||
Other employment-related benefit plans, net of tax
benefit
of $64, $205 and $544, respectively
|
(728 | ) | (554 | ) | (859 | ) | ||||||
Total other comprehensive earnings (losses)
|
39,289 | 49,442 | (110,696 | ) | ||||||||
Comprehensive earnings, net of tax
|
552,871 | 480,214 | 364,659 | |||||||||
Less: Comprehensive earnings attributable to noncontrolling interest:
|
||||||||||||
Net earnings
|
2,717 | 306 | – | |||||||||
Foreign currency translation adjustments
|
8,712 | (1,457 | ) | – | ||||||||
Comprehensive earnings attributable to W.W. Grainger, Inc.
|
$ | 541,442 | $ | 481,365 | $ | 364,659 | ||||||
As of December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||
CURRENT LIABILITIES
|
||||||||||||
Short-term debt
|
$ | 42,769 | $ | 34,780 | $ | 19,960 | ||||||
Current maturities of long-term debt
|
31,059 | 53,128 | 21,257 | |||||||||
Trade accounts payable
|
344,295 | 300,791 | 290,802 | |||||||||
Accrued compensation and benefits
|
169,343 | 135,323 | 162,380 | |||||||||
Accrued contributions to employees’ profit sharing plans
|
145,119 | 121,895 | 146,922 | |||||||||
Accrued expenses
|
130,836 | 124,150 | 118,633 | |||||||||
Income taxes payable
|
5,882 | 6,732 | 1,780 | |||||||||
Total current liabilities
|
869,303 | 776,799 | 761,734 | |||||||||
LONG-TERM DEBT
(less current maturities)
|
420,446 | 437,500 | 488,228 | |||||||||
DEFERRED INCOME TAXES, TAX
UNCERTAINTIES AND DERIVATIVE
INSTRUMENTS
|
82,502 | 62,215 | 33,219 | |||||||||
ACCRUED EMPLOYMENT-RELATED
BENEFITS COSTS
|
244,456 | 222,619 | 198,431 | |||||||||
SHAREHOLDERS’ EQUITY
|
||||||||||||
Cumulative preferred stock –
$5 par value – 12,000,000 shares authorized;
none issued nor outstanding
|
– | – | – | |||||||||
Common stock – $0.50 par value –
300,000,000 shares authorized;
109,659,219 shares issued
|
54,830 | 54,830 | 54,830 | |||||||||
Additional contributed capital
|
637,686 | 596,358 | 564,728 | |||||||||
Retained earnings
|
4,326,761 | 3,966,508 | 3,670,726 | |||||||||
Accumulated other comprehensive earnings (losses)
|
42,951 | 12,374 | (38,525 | ) | ||||||||
Treasury stock, at cost –
40,281,417, 37,382,703 and
34,878,190 shares, respectively
|
(2,857,012 | ) | (2,466,350 | ) | (2,217,954 | ) | ||||||
Total W.W. Grainger, Inc. shareholders’ equity
|
2,205,216 | 2,163,720 | 2,033,805 | |||||||||
Noncontrolling interest
|
82,454 | 63,479 | – | |||||||||
Total shareholders’ equity
|
2,287,670 | 2,227,199 | 2,033,805 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
|
$ | 3,904,377 | $ | 3,726,332 | $ | 3,515,417 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net earnings
|
$ | 513,582 | $ | 430,772 | $ | 475,355 | ||||||
Provision for losses on accounts receivable
|
6,718 | 10,748 | 12,924 | |||||||||
Deferred income taxes and tax uncertainties
|
(5,553 | ) | 21,683 | 5,182 | ||||||||
Depreciation and amortization
|
149,678 | 147,531 | 139,570 | |||||||||
Stock-based compensation
|
49,796 | 43,301 | 47,870 | |||||||||
(Gain) write-off of unconsolidated entities
|
– | (47,343 | ) | 6,031 | ||||||||
Change in operating assets and liabilities –
net of business acquisitions:
|
||||||||||||
Accounts receivable
|
(127,790 | ) | 2,794 | (5,592 | ) | |||||||
Inventories
|
(80,545 | ) | 175,286 | (92,518 | ) | |||||||
Prepaid expenses
|
(8,806 | ) | (11,180 | ) | (33,629 | ) | ||||||
Trade accounts payable
|
36,219 | (16,736 | ) | (6,960 | ) | |||||||
Other current liabilities
|
49,576 | (52,944 | ) | 199 | ||||||||
Current income taxes payable
|
(1,503 | ) | 2,472 | (7,784 | ) | |||||||
Accrued employment-related benefits costs
|
18,128 | 22,080 | 3,216 | |||||||||
Other – net
|
(3,055 | ) | 3,932 | (13,798 | ) | |||||||
Net cash provided by operating activities
|
596,445 | 732,396 | 530,066 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Additions to property, buildings and
equipment –
net of dispositions
|
(120,616 | ) | (140,730 | ) | (181,355 | ) | ||||||
Cash paid for business acquisitions, net of cash acquired
|
(62,072 | ) | (123,093 | ) | (34,290 | ) | ||||||
Other – net
|
13,529 | 1,260 | 13,010 | |||||||||
Net cash used in investing activities
|
$ | (169,159 | ) | $ | (262,563 | ) | $ | (202,635 | ) |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Net increase (decrease) in commercial paper
|
$ | 200,000 | $ | – | $ | (95,947 | ) | |||||
Borrowings under lines of credit
|
35,297 | 46,125 | 29,959 | |||||||||
Payments against lines of credit
|
(29,799 | ) | (43,583 | ) | (15,437 | ) | ||||||
Proceeds from issuance of long-term debt
|
– | – | 500,000 | |||||||||
Payments of long-term debt
|
(239,122 | ) | (18,856 | ) | – | |||||||
Proceeds from stock options exercised
|
86,528 | 91,165 | 46,833 | |||||||||
Excess tax benefits from stock-based compensation
|
25,650 | 19,030 | 13,533 | |||||||||
Purchase of treasury stock
|
(504,803 | ) | (372,727 | ) | (394,247 | ) | ||||||
Cash dividends paid
|
(152,338 | ) | (134,684 | ) | (121,504 | ) | ||||||
Net cash used in financing activities
|
(578,587 | ) | (413,530 | ) | (36,810 | ) | ||||||
Exchange rate effect on cash and cash equivalents
|
4,884 | 7,278 | (7,768 | ) | ||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(146,417 | ) | 63,581 | 282,853 | ||||||||
Cash and cash equivalents at beginning of year
|
459,871 | 396,290 | 113,437 | |||||||||
Cash and cash equivalents at end of year
|
$ | 313,454 | $ | 459,871 | $ | 396,290 | ||||||
Supplemental cash flow information:
|
||||||||||||
Cash payments for interest (net of amounts capitalized)
|
$ | 8,188 | $ | 8,766 | $ | 14,508 | ||||||
Cash payments for income taxes
|
319,754 | 235,043 | 306,960 | |||||||||
W.W. Grainger, Inc. Shareholders’ Equity
|
||||||||||||||||||||||||
Common Stock
|
Additional Contributed Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Earnings (Losses)
|
Treasury Stock
|
Noncontrolling
Interest
|
|||||||||||||||||||
Balance at January 1, 2008
|
$ | 54,830 | $ | 475,350 | $ | 3,316,875 | $ | 72,171 | $ | (1,821,118 | ) | $ | – | |||||||||||
Exercise of stock options
|
– | (12,663 | ) | – | – | 59,460 | – | |||||||||||||||||
Tax benefits on stock-based
compensation awards
|
– | 15,458 | – | – | – | – | ||||||||||||||||||
Stock option expense
|
– | 19,868 | – | – | – | – | ||||||||||||||||||
Amortization of other stock-
based
compensation awards
|
– | 26,077 | – | – | – | – | ||||||||||||||||||
Settlement and vesting of other
stock-
based
compensation awards
|
– | (9,362 | ) | – | – | 4,792 | – | |||||||||||||||||
Purchase of treasury stock
|
– | 50,000 | – | – | (461,088 | ) | – | |||||||||||||||||
Net earnings
|
– | – | 475,355 | – | – | – | ||||||||||||||||||
Other comprehensive earnings
|
– | – | – | (110,696 | ) | – | – | |||||||||||||||||
Cash dividends paid
($1.55
per share)
|
– | – | (121,504 | ) | – | – | – | |||||||||||||||||
Balance at December 31, 2008
|
$ | 54,830 | $ | 564,728 | $ | 3,670,726 | $ | (38,525 | ) | $ | (2,217,954 | ) | $ | – |
Exercise of stock options
|
– | (15,614 | ) | – | – | 106,255 | 96 | |||||||||||||||||
Tax benefits on stock-based
compensation awards
|
– | 21,924 | – | – | – | – | ||||||||||||||||||
Stock option expense
|
– | 16,100 | – | – | – | 98 | ||||||||||||||||||
Amortization of other stock-
based
compensation awards
|
– | 24,307 | – | – | – | – | ||||||||||||||||||
Settlement and vesting of other stock-
based
compensation awards
|
– | (15,087 | ) | – | – | 7,599 | – | |||||||||||||||||
Purchase of treasury stock
|
– | – | – | – | (362,250 | ) | – | |||||||||||||||||
Net earnings
|
– | – | 430,466 | – | – | 306 | ||||||||||||||||||
Other comprehensive earnings
|
– | – | – | 50,899 | – | (1,457 | ) | |||||||||||||||||
Cash dividends paid
($1.78
per share)
|
– | – | (134,684 | ) | – | – | – | |||||||||||||||||
Fair value at acquisition
|
– | – | – | – | – | 64,436 | ||||||||||||||||||
Balance at December 31, 2009
|
$ | 54,830 | $ | 596,358 | $ | 3,966,508 | $ | 12,374 | $ | (2,466,350 | ) | $ | 63,479 |
Exercise of stock options
|
– | (11,211 | ) | – | – | 98,052 | 171 | |||||||||||||||||
Tax benefits on stock-based
compensation awards
|
– | 28,225 | – | – | – | – | ||||||||||||||||||
Stock option expense
|
– | 17,163 | – | – | – | 333 | ||||||||||||||||||
Amortization of other stock-
based
compensation awards
|
– | 29,725 | – | – | – | – | ||||||||||||||||||
Settlement and vesting of other stock-
based
compensation awards
|
– | (22,090 | ) | – | – | 9,297 | – | |||||||||||||||||
Purchase of treasury stock
|
– | (484 | ) | – | – | (498,011 | ) | (428 | ) | |||||||||||||||
Net earnings
|
– | – | 510,865 | – | – | 2,717 | ||||||||||||||||||
Other comprehensive earnings
|
– | – | – | 30,577 | – | 8,712 | ||||||||||||||||||
Cash dividends paid
($2.08
per share)
|
– | – | (150,612 | ) | – | – | (1,726 | ) | ||||||||||||||||
Fair value at acquisition
|
– | – | – | – | – | 9,196 | ||||||||||||||||||
Balance at December 31, 2010
|
$ | 54,830 | $ | 637,686 | $ | 4,326,761 | $ | 42,951 | $ | (2,857,012 | ) | $ | 82,454 |
Buildings, structures and improvements
|
10 to 30 years
|
Furniture, fixtures, machinery and equipment
|
3 to 10 years
|
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Beginning balance
|
$ | 3,238 | $ | 3,218 | $ | 3,442 | ||||||
Returns
|
(10,692 | ) | (11,727 | ) | (12,917 | ) | ||||||
Provisions
|
10,625 | 11,747 | 12,693 | |||||||||
Ending balance
|
$ | 3,171 | $ | 3,238 | $ | 3,218 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Balance at beginning of period
|
$ | 25,850 | $ | 26,481 | $ | 25,830 | ||||||
Provision for uncollectible accounts
|
6,718 | 10,748 | 12,924 | |||||||||
Write-off of uncollectible accounts, net of
recoveries
|
(8,302 | ) | (12,254 | ) | (11,501 | ) | ||||||
Foreign currency translation impact
|
286 | 875 | (772 | ) | ||||||||
Balance at end of period
|
$ | 24,552 | $ | 25,850 | $ | 26,481 |
|
||||||||||||||||
Grainger
|
||||||||||||||||
Industrial
|
||||||||||||||||
MonotaRO
|
MRO Korea
|
Supply India
|
||||||||||||||
Co., Ltd.
|
Co., Ltd.
|
Private Ltd.
|
Total
|
|||||||||||||
Balance at January 1, 2008
|
$ | 10,513 | $ | 4,246 | $ | – | $ | 14,759 | ||||||||
Cash investments
|
– | – | 6,487 | 6,487 | ||||||||||||
Equity earnings (losses)
|
4,303 | (205 | ) | (456 | ) | 3,642 | ||||||||||
Write-off
|
– | – | (6,031 | ) | (6,031 | ) | ||||||||||
Foreign currency gain (loss)
|
3,008 | (1,035 | ) | – | 1,973 | |||||||||||
Balance at December 31, 2008
|
17,824 | 3,006 | – | 20,830 | ||||||||||||
Cash investments
|
4,013 | – | 1,194 | 5,207 | ||||||||||||
Equity earnings
|
1,249 | 248 | – | 1,497 | ||||||||||||
Dividends
|
(878 | ) | – | – | (878 | ) | ||||||||||
Foreign currency (loss) gain
|
(468 | ) | 254 | – | (214 | ) | ||||||||||
Gain (loss) on previously held equity interest
|
44,275 | – | (77 | ) | 44,198 | |||||||||||
Investment eliminated in consolidation
|
(66,015 | ) | – | (1,117 | ) | (67,132 | ) | |||||||||
Balance at December 31, 2009
|
– | 3,508 | – | 3,508 | ||||||||||||
Equity (losses)
|
– | (182 | ) | – | (182 | ) | ||||||||||
Foreign currency gain
|
– | 135 | – | 135 | ||||||||||||
Balance at December 31, 2010
|
$ | – | $ | 3,461 | $ | – | $ | 3,461 | ||||||||
As of December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Lines of Credit
|
||||||||||||
Outstanding at December 31
|
$ | 42,769 | $ | 34,780 | $ | 19,960 | ||||||
Maximum month-end balance during the year
|
$ | 42,769 | $ | 35,371 | $ | 19,960 | ||||||
Average amount outstanding during the year
|
$ | 38,369 | $ | 33,554 | $ | 13,022 | ||||||
Weighted average interest rate during the year
|
4.97 | % | 5.22 | % | 6.23 | % | ||||||
Weighted average interest rate at December 31
|
5.26 | % | 5.06 | % | 4.86 | % | ||||||
As of December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Bank term loan
|
$ | 248,311 | $ | 483,333 | $ | 500,000 | ||||||
Commercial paper
|
200,000 | – | – | |||||||||
Other
|
3,194 | 7,295 | 9,485 | |||||||||
Less current maturities
|
(31,059 | ) | (53,128 | ) | (21,257 | ) | ||||||
$ | 420,446 | $ | 437,500 | $ | 488,228 |
Year
|
Payment Amount
|
|||
2011
|
$ | 31,059 | ||
2012
|
220,039 | |||
2013
|
99 | |||
2014
|
200,033 | |||
2015
|
22 | |||
Thereafter
|
253 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Service cost
|
$ | 14,293 | $ | 12,305 | $ | 9,699 | ||||||
Interest cost
|
12,852 | 10,730 | 9,490 | |||||||||
Expected return on assets
|
(4,434 | ) | (3,402 | ) | (4,466 | ) | ||||||
Amortization of prior service credit
|
(495 | ) | (1,215 | ) | (1,215 | ) | ||||||
Amortization of transition asset
|
(143 | ) | (143 | ) | (143 | ) | ||||||
Amortization of unrecognized losses
|
3,649 | 4,135 | 1,312 | |||||||||
Net periodic benefits costs
|
$ | 25,722 | $ | 22,410 | $ | 14,677 |
2010
|
2009
|
2008
|
||||||||||
Benefit obligation at beginning of year
|
$ | 222,117 | $ | 188,639 | $ | 150,910 | ||||||
Service cost
|
14,293 | 12,305 | 9,699 | |||||||||
Interest cost
|
12,852 | 10,730 | 9,490 | |||||||||
Plan participants’ contributions
|
1,862 | 1,797 | 1,751 | |||||||||
Amendments
|
– | 8,715 | – | |||||||||
Actuarial loss
|
12,288 | 4,892 | 21,443 | |||||||||
Benefits paid
|
(5,729 | ) | (5,277 | ) | (4,924 | ) | ||||||
Medicare Part D Subsidy received
|
295 | 316 | 270 | |||||||||
Benefit obligation at end of year
|
257,978 | 222,117 | 188,639 | |||||||||
Plan assets available for benefits at beginning of year
|
73,919 | 56,703 | 74,432 | |||||||||
Actual returns (losses) on plan assets
|
9,017 | 11,695 | (23,963 | ) | ||||||||
Employer’s contributions
|
17,438 | 9,001 | 9,407 | |||||||||
Plan participants’ contributions
|
1,862 | 1,797 | 1,751 | |||||||||
Benefits paid
|
(5,729 | ) | (5,277 | ) | (4,924 | ) | ||||||
Plan assets available for benefits at end of year
|
96,507 | 73,919 | 56,703 | |||||||||
Noncurrent postretirement benefit obligation
|
$ | 161,471 | $ | 148,198 | $ | 131,936 |
As of December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Prior service credit (cost)
|
$ | (1,047 | ) | $ | (552 | ) | $ | 9,377 | ||||
Transition asset
|
571 | 714 | 857 | |||||||||
Unrecognized losses
|
(70,487 | ) | (66,430 | ) | (73,966 | ) | ||||||
Deferred tax asset
|
27,605 | 25,784 | 24,800 | |||||||||
Net losses
|
$ | (43,358 | ) | $ | (40,484 | ) | $ | (38,932 | ) |
2011
|
||||
Amortization of prior service credit
|
$ | (494 | ) | |
Amortization of transition asset
|
(143 | ) | ||
Amortization of unrecognized losses
|
4,246 | |||
Estimated amount to be amortized from AOCE into
net periodic
postretirement benefit costs
|
$ | 3,609 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Discount rate
|
6.00 | % | 5.90 | % | 6.50 | % | ||||||
Expected long-term rate of return on plan assets,
net of tax at 40%
|
6.00 | % | 6.00 | % | 6.00 | % | ||||||
Initial healthcare cost trend rate
|
9.50 | % | 10.00 | % | 10.00 | % | ||||||
Ultimate healthcare cost trend rate
|
5.00 | % | 5.00 | % | 5.00 | % | ||||||
Year ultimate healthcare cost trend rate reached
|
2019 | 2019 | 2018 |
2010
|
2009
|
2008
|
||||||||||
Discount rate
|
5.60 | % | 6.00 | % | 5.90 | % | ||||||
Expected long-term rate of return on plan assets,
net of tax at 40%
|
6.00 | % | 6.00 | % | 6.00 | % | ||||||
Initial healthcare cost trend rate
|
9.00 | % | 9.50 | % | 10.00 | % | ||||||
Ultimate healthcare cost trend rate
|
5.00 | % | 5.00 | % | 5.00 | % | ||||||
Year ultimate healthcare cost trend rate reached
|
2019 | 2019 | 2019 |
1 Percentage Point
|
||||||||
Increase
|
(Decrease)
|
|||||||
Effect on total service and interest cost
|
$ | 6,638 | $ | (5,071 | ) | |||
Effect on APBO
|
54,257 | (42,320 | ) |
2010
|
2009
|
2008
|
||||||||||
Fair value of invested assets (Level 1)
|
||||||||||||
Registered investment companies
|
||||||||||||
Fidelity Spartan U.S. Equity Index Fund
|
$ | 43,260 | $ | 37,624 | $ | 30,597 | ||||||
Vanguard 500 Index Fund
|
43,363 | 37,691 | 31,194 | |||||||||
Vanguard Total International Stock
|
13,215 | – | – | |||||||||
Total Assets
|
$ | 99,838 | $ | 75,315 | $ | 61,791 |
Estimated gross benefit payments
|
Estimated Medicare subsidy receipts
|
|||||||
2011
|
$ | 4,795 | $ | (393 | ) | |||
2012
|
5,522 | (474 | ) | |||||
2013
|
6,468 | (563 | ) | |||||
2014
|
7,591 | (668 | ) | |||||
2015
|
8,835 | (796 | ) | |||||
2016 – 2020
|
68,111 | (6,749 | ) |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Service cost
|
$ | 204 | $ | 234 | $ | 247 | ||||||
Interest cost
|
893 | 965 | 880 | |||||||||
Amortization of unrecognized gains
|
(35 | ) | (24 | ) | (153 | ) | ||||||
Net periodic benefits costs
|
$ | 1,062 | $ | 1,175 | $ | 974 |
2010
|
2009
|
2008
|
||||||||||
Benefit obligation at beginning of year
|
$ | 17,185 | $ | 16,088 | $ | 14,115 | ||||||
Service cost
|
204 | 234 | 247 | |||||||||
Interest cost
|
893 | 965 | 880 | |||||||||
Actuarial (gains) losses
|
(109 | ) | (102 | ) | 1,425 | |||||||
Benefits paid
|
(2,530 | ) | – | (579 | ) | |||||||
Benefit obligation at end of year
|
$ | 15,643 | $ | 17,185 | $ | 16,088 |
As of December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Current liabilities
|
$ | 896 | $ | 3,081 | $ | 552 | ||||||
Noncurrent liabilities
|
14,747 | 14,104 | 15,536 | |||||||||
Total amounts recognized
|
$ | 15,643 | $ | 17,185 | $ | 16,088 |
2010
|
2009
|
2008
|
||||||||||
Discount rate used to determine net periodic benefit cost (January 1 valuation)
|
5.70 | % | 6.10 | % | 6.40 | % | ||||||
Discount rate used to determine benefit obligation
(December 31 valuation)
|
5.10 | % | 5.70 | % | 6.10 | % | ||||||
Compensation increase used to determine obligation
and cost
|
4.00 | % | 4.00 | % | 4.00 | % |
Benefit Payments
|
||||
2011
|
$ | 896 | ||
2012
|
682 | |||
2013
|
1,655 | |||
2014
|
1,064 | |||
2015
|
921 | |||
2016 – 2020
|
4,539 |
Future Minimum Lease Payments
|
||||
2011
|
$ | 45,461 | ||
2012
|
39,341 | |||
2013
|
33,446 | |||
2014
|
26,510 | |||
2015
|
21,961 | |||
Thereafter
|
34,844 | |||
Total minimum payments required
|
201,563 | |||
Less amounts representing sublease income
|
(731 | ) | ||
$ | 200,832 |
Shares Subject to Option
|
Weighted Average Price Per Share
|
Options Exercisable
|
||||||||||
Outstanding at January 1, 2008
|
6,527,986 | $ | 58.19 | 3,447,856 | ||||||||
Granted
|
883,000 | $ | 84.58 | |||||||||
Exercised
|
(953,199 | ) | $ | 50.07 | ||||||||
Canceled or expired
|
(103,920 | ) | $ | 73.14 | ||||||||
Outstanding at December 31, 2008
|
6,353,867 | $ | 62.95 | 3,633,612 | ||||||||
Granted
|
944,470 | $ | 79.69 | |||||||||
Exercised
|
(1,689,581 | ) | $ | 57.18 | ||||||||
Canceled or expired
|
(134,160 | ) | $ | 78.98 | ||||||||
Outstanding at December 31, 2009
|
5,474,596 | $ | 68.07 | 3,141,996 | ||||||||
Granted
|
945,450 | $ | 106.70 | |||||||||
Exercised
|
(1,444,898 | ) | $ | 64.39 | ||||||||
Canceled or expired
|
(93,900 | ) | $ | 84.02 | ||||||||
Outstanding at December 31, 2010
|
4,881,248 | $ | 77.61 | 2,486,478 |
For the years ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Fair value of options exercised
|
$ | 22,665 | $ | 24,442 | $ | 12,752 | ||||||
Total intrinsic value of options exercised
|
75,204 | 57,702 | 35,095 | |||||||||
Fair value of options vested
|
17,974 | 23,303 | 15,510 | |||||||||
Settlements of options exercised
|
87,024 | 92,213 | 47,016 |
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||||||||||||
Weighted Average
|
Weighted Average
|
|||||||||||||||||||||||||||
Range of
Exercise
Prices
|
Number
|
Remaining
Contractual
Life
|
Exercise
Price
|
Intrinsic
Value
(000’s)
|
Number
|
Remaining
Contractual
Life
|
Exercise
Price
|
Intrinsic
Value
(000’s)
|
||||||||||||||||||||
$ | 37.50-$44.05 | 97,051 |
0.38 Years
|
$ | 40.59 | $ | 9,465 | 97,051 |
0.38 Years
|
$ | 40.59 | $ | 9,465 | |||||||||||||||
$ | 45.50-$54.85 | 1,179,265 |
3.02 Years
|
$ | 50.98 | 102,753 | 1,179,265 |
3.02 Years
|
$ | 50.98 | 102,753 | |||||||||||||||||
$ | 56.03-$70.67 | 51,522 |
4.13 Years
|
$ | 61.71 | 3,936 | 51,522 |
4.13 Years
|
$ | 61.71 | 3,936 | |||||||||||||||||
$ | 71.21-$124.93 | 3,553,410 |
7.66 Years
|
$ | 87.70 | 179,141 | 1,158,640 |
6.09 Years
|
$ | 80.11 | 67,197 | |||||||||||||||||
4,881,248 |
6.35 Years
|
$ | 77.61 | $ | 295,295 | 2,486,478 |
4.37 Years
|
$ | 64.37 | $ | 183,351 |
For the years ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Risk-free interest rate
|
2.9 | % | 2.4 | % | 3.2 | % | ||||||
Expected life
|
6 years
|
6 years
|
6 years
|
|||||||||
Expected volatility
|
24.7 | % | 28.8 | % | 25.2 | % | ||||||
Expected dividend yield
|
2.0 | % | 2.3 | % | 1.8 | % |
2010
|
2009
|
2008
|
||||||||||||||||||||||
Shares
|
Weighted Average Price Per Share
|
Shares
|
Weighted Average Price Per Share
|
Shares
|
Weighted Average Price Per Share
|
|||||||||||||||||||
Beginning nonvested
shares outstanding
|
72,362 | $ | 80.01 | 117,896 | $ | 75.13 | 116,796 | $ | 69.49 | |||||||||||||||
Issued
|
140,400 | $ | 87.29 | 36,720 | $ | 73.17 | 38,360 | $ | 86.00 | |||||||||||||||
Cancelled
|
(1,069 | ) | $ | 86.00 | (3,319 | ) | $ | 83.40 | – | $ | – | |||||||||||||
Vested
|
(34,573 | ) | $ | 86.00 | (78,935 | ) | $ | 68.64 | (37,260 | ) | $ | 71.23 | ||||||||||||
Ending nonvested shares
outstanding
|
177,120 | $ | 84.74 | 72,362 | $ | 80.01 | 117,896 | $ | 75.13 |
2010
|
2009
|
2008
|
||||||||||||||||||||||
Shares
|
Weighted Average Price Per Share
|
Shares
|
Weighted Average Price Per Share
|
Shares
|
Weighted Average Price Per Share
|
|||||||||||||||||||
Beginning nonvested
shares
outstanding
|
10,000 | $ | 47.81 | 50,000 | $ | 53.50 | 65,000 | $ | 52.37 | |||||||||||||||
Vested
|
(10,000 | ) | $ | 47.81 | (40,000 | ) | $ | 54.12 | (15,000 | ) | $ | 48.15 | ||||||||||||
Ending nonvested
shares outstanding
|
– | $ | 0.00 | 10,000 | $ | 47.81 | 50,000 | $ | 53.50 | |||||||||||||||
Fair value of shares
vested
|
$0.5 million
|
$2.1 million
|
$0.7 million
|
|||||||||||||||||||||
2010
|
2009
|
2008
|
||||||||||||||||||||||
Shares
|
Weighted
Average Price Per Share
|
Shares
|
Weighted
Average Price Per Share
|
Shares
|
Weighted
Average Price Per Share
|
|||||||||||||||||||
Beginning nonvested units
|
1,241,364 | $ | 80.96 | 1,237,246 | $ | 77.88 | 982,568 | $ | 72.91 | |||||||||||||||
Issued
|
274,740 | $ | 109.63 | 284,825 | $ | 83.10 | 460,423 | $ | 84.35 | |||||||||||||||
Cancelled
|
(61,745 | ) | $ | 82.59 | (81,572 | ) | $ | 78.47 | (33,490 | ) | $ | 78.72 | ||||||||||||
Vested
|
(248,572 | ) | $ | 77.37 | (199,135 | ) | $ | 63.57 | (172,255 | ) | $ | 64.37 | ||||||||||||
Ending nonvested units
|
1,205,787 | $ | 88.65 | 1,241,364 | $ | 80.96 | 1,237,246 | $ | 77.88 | |||||||||||||||
Fair value of shares vested
|
$19.2 million
|
$12.4 million
|
$11.1 million
|
|||||||||||||||||||||
2010
|
2009
|
2008
|
||||||||||||||||||||||
Units
|
Dollars
|
Units
|
Dollars
|
Units
|
Dollars
|
|||||||||||||||||||
Beginning balance
|
113,509 | $ | 10,991 | 93,221 | $ | 7,350 | 74,522 | $ | 6,522 | |||||||||||||||
Dividends
|
2,416 | 261 | 2,338 | 192 | 1,692 | 137 | ||||||||||||||||||
Deferred fees
|
14,452 | 1,563 | 17,950 | 1,463 | 17,007 | 1,460 | ||||||||||||||||||
Unit appreciation
(depreciation)
|
– | 5,191 | – | 1,986 | – | (769 | ) | |||||||||||||||||
Ending balance
|
130,377 | $ | 18,006 | 113,509 | $ | 10,991 | 93,221 | $ | 7,350 |
2010
|
2009
|
2008
|
||||||||||||||||||||||
Outstanding Common Stock
|
Treasury Stock
|
Outstanding Common Stock
|
Treasury Stock
|
Outstanding Common Stock
|
Treasury Stock
|
|||||||||||||||||||
Balance at beginning of period
|
72,276,516 | 37,382,703 | 74,781,029 | 34,878,190 | 79,459,415 | 30,199,804 | ||||||||||||||||||
Exercise of stock options, net of 2,608, 17,050 and 2,725 shares swapped in stock-for-stock exchange, respectively
|
1,442,290 | (1,442,290 | ) | 1,672,531 | (1,672,531 | ) | 950,474 | (950,474 | ) | |||||||||||||||
Cancellation of shares related to tax withholdings on restricted stock vesting
|
(3,014 | ) | 3,014 | (12,531 | ) | 12,531 | (4,874 | ) | 4,874 | |||||||||||||||
Settlement of restricted stock units, net of 85,205, 67,382 and 48,488 shares retained, respectively
|
163,367 | (163,367 | ) | 131,753 | (131,753 | ) | 101,962 | (101,962 | ) | |||||||||||||||
Settlement of performance share units, net of 26,077 and 12,172 shares retained, respectively
|
52,858 | (52,858 | ) | 25,088 | (25,088 | ) | – | – | ||||||||||||||||
Purchase of treasury shares
|
(4,554,215 | ) | 4,554,215 | (4,321,354 | ) | 4,321,354 | (5,725,948 | ) | 5,725,948 | |||||||||||||||
Balance at end of period
|
69,377,802 | 40,281,417 | 72,276,516 | 37,382,703 | 74,781,029 | 34,878,190 |
As of December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Foreign currency translation adjustments
|
$ | 113,151 | $ | 63,304 | $ | 3,943 | ||||||
Derivative instruments
|
(5,816 | ) | – | – | ||||||||
Postretirement benefit plan
|
(70,963 | ) | (66,268 | ) | (63,732 | ) | ||||||
Other employment-related benefit plans
|
(1,619 | ) | (827 | ) | (68 | ) | ||||||
Deferred tax asset
|
15,453 | 14,708 | 21,332 | |||||||||
Total accumulated other comprehensive earnings (losses)
|
50,206 | 10,917 | (38,525 | ) | ||||||||
Less: Foreign currency translation adjustments attributable to noncontrolling interest
|
7,255 | (1,457 | ) | – | ||||||||
Total accumulated other comprehensive earnings (losses) attributable to
W.W. Grainger, Inc.
|
$ | 42,951 | $ | 12,374 | $ | (38,525 | ) |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Net earnings attributable to W.W. Grainger, Inc.
|
$ | 510,865 | $ | 430,466 | $ | 475,355 | ||||||
Transfers from the noncontrolling interest:
|
||||||||||||
Increase in W.W. Grainger, Inc. additional contributed capital for MonotaRO Co.,
Ltd. stock option exercises
|
86 | 34 | – | |||||||||
Decrease in W.W. Grainger, Inc. additional contributed capital for MonotaRO Co.,
Ltd. treasury share purchases
|
(484 | ) | – | – | ||||||||
Change from net earnings attributable to W.W. Grainger, Inc. and transfer from noncontrolling interest
|
$ | 510,467 | $ | 430,500 | $ | 475,355 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Current provision:
|
||||||||||||
Federal
|
$ | 283,481 | $ | 203,375 | $ | 246,731 | ||||||
State
|
48,241 | 36,078 | 39,673 | |||||||||
Foreign
|
21,235 | 15,860 | 18,044 | |||||||||
Total current
|
352,957 | 255,313 | 304,448 | |||||||||
Deferred tax provision (benefit):
|
||||||||||||
Federal
|
(7,875 | ) | 16,446 | (5,968 | ) | |||||||
State
|
(1,384 | ) | 2,894 | (1,049 | ) | |||||||
Foreign
|
(3,502 | ) | 1,912 | 432 | ||||||||
Total deferred
|
(12,761 | ) | 21,252 | (6,585 | ) | |||||||
Total provision
|
$ | 340,196 | $ | 276,565 | $ | 297,863 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
United States
|
$ | 802,135 | $ | 679,648 | $ | 731,315 | ||||||
Foreign
|
51,643 | 27,689 | 41,903 | |||||||||
$ | 853,778 | $ | 707,337 | $ | 773,218 |
As of December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Deferred tax assets:
|
||||||||||||
Inventory
|
$ | 32,438 | $ | 11,554 | $ | 22,674 | ||||||
Accrued expenses
|
31,116 | 29,262 | 29,966 | |||||||||
Accrued employment-related benefits
|
145,440 | 163,333 | 144,125 | |||||||||
Foreign operating loss carryforwards
|
13,117 | 12,547 | 10,833 | |||||||||
Property, buildings and equipment
|
2,072 | – | 921 | |||||||||
Other
|
19,274 | 13,947 | 11,352 | |||||||||
Deferred tax assets
|
243,457 | 230,643 | 219,871 | |||||||||
Less valuation allowance
|
(20,087 | ) | (20,810 | ) | (15,977 | ) | ||||||
Deferred tax assets, net of valuation allowance
|
$ | 223,370 | $ | 209,833 | $ | 203,894 | ||||||
Deferred tax liabilities:
|
||||||||||||
Purchased tax benefits
|
$ | (4,570 | ) | $ | (5,178 | ) | $ | (5,812 | ) | |||
Property, buildings and equipment
|
- | (7,318 | ) | – | ||||||||
Intangibles
|
(80,055 | ) | (67,821 | ) | (17,083 | ) | ||||||
Software
|
(4,419 | ) | (8,835 | ) | (12,774 | ) | ||||||
Prepaids
|
(28,897 | ) | (22,889 | ) | (21,893 | ) | ||||||
Other
|
(13,590 | ) | (10,020 | ) | (2,206 | ) | ||||||
Deferred tax liabilities
|
(131,531 | ) | (122,061 | ) | (59,768 | ) | ||||||
Net deferred tax asset
|
$ | 91,839 | $ | 87,772 | $ | 144,126 | ||||||
The net deferred tax asset is classified as follows:
|
||||||||||||
Current assets
|
$ | 44,627 | $ | 42,023 | $ | 52,556 | ||||||
Noncurrent assets
|
87,244 | 79,472 | 97,442 | |||||||||
Noncurrent liabilities (foreign)
|
(40,032 | ) | (33,723 | ) | (5,872 | ) | ||||||
Net deferred tax asset
|
$ | 91,839 | $ | 87,772 | $ | 144,126 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Beginning balance
|
$ | 20,810 | $ | 15,977 | $ | 13,551 | ||||||
(Decrease) increase related to foreign net operating
loss carryforwards
|
(723 | ) | 4,833 | 86 | ||||||||
Increase related to capital losses and other
|
– | – | 2,340 | |||||||||
Ending balance
|
$ | 20,087 | $ | 20,810 | $ | 15,977 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Federal income tax at the 35% statutory rate
|
$ | 298,822 | $ | 247,568 | $ | 270,626 | ||||||
State income taxes, net of federal income
tax benefit
|
30,457 | 25,332 | 25,105 | |||||||||
Other – net
|
10,917 | 3,665 | 2,132 | |||||||||
Income tax expense
|
$ | 340,196 | $ | 276,565 | $ | 297,863 | ||||||
Effective tax rate
|
39.8 | % | 39.1 | % | 38.5 | % |
2010
|
2009
|
2008
|
||||||||||
Balance at beginning of year
|
$ | 26,540 | $ | 24,364 | $ | 13,568 | ||||||
Additions to tax positions related to the current year
|
8,304 | 6,743 | 13,016 | |||||||||
Additions for tax positions of prior years
|
3,815 | 362 | 735 | |||||||||
Reductions for tax positions of prior years
|
(2,062 | ) | (2,856 | ) | (2,900 | ) | ||||||
Reductions due to statute lapse
|
(2,413 | ) | (1,961 | ) | – | |||||||
Settlements (audit payments) refunds – net
|
(124 | ) | (112 | ) | (55 | ) | ||||||
Balance at end of year
|
$ | 34,060 | $ | 26,540 | $ | 24,364 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Net earnings attributable to W.W. Grainger, Inc. as reported
|
$ | 510,865 | $ | 430,466 | $ | 475,355 | ||||||
Less: Distributed earnings available to participating securities
|
(3,086 | ) | (2,990 | ) | (2,560 | ) | ||||||
Less: Undistributed earnings available to participating securities
|
(8,355 | ) | (7,059 | ) | (7,935 | ) | ||||||
Numerator for basic earnings per share –
Undistributed and
distributed earnings available to common shareholders
|
499,424 | 420,417 | 464,860 | |||||||||
Add: Undistributed earnings allocated to participating securities
|
8,355 | 7,059 | 7,935 | |||||||||
Less: Undistributed earnings reallocated to participating securities
|
(8,208 | ) | (6,957 | ) | (7,804 | ) | ||||||
Numerator for diluted earnings per share –
Undistributed and
distributed earnings available to common shareholders
|
$ | 499,571 | $ | 420,519 | $ | 464,991 | ||||||
Denominator for basic earnings per share – weighted average shares
|
70,836,945 | 73,786,346 | 76,579,856 | |||||||||
Effect of dilutive securities
|
1,301,913 | 1,105,506 | 1,307,764 | |||||||||
Denominator for diluted earnings per share –
weighted average shares adjusted for dilutive securities
|
72,138,858 | 74,891,852 | 77,887,620 | |||||||||
Earnings per share two-class method
|
||||||||||||
Basic
|
$ | 7.05 | $ | 5.70 | $ | 6.07 | ||||||
Diluted
|
$ | 6.93 | $ | 5.62 | $ | 5.97 | ||||||
2010
|
||||||||||||||||
United States
|
Canada
|
Other Businesses
|
Total
|
|||||||||||||
Total net sales
|
$ | 6,020,069 | $ | 820,941 | $ | 389,621 | $ | 7,230,631 | ||||||||
Intersegment net sales
|
(47,913 | ) | (137 | ) | (423 | ) | (48,473 | ) | ||||||||
Net sales to external customers
|
5,972,156 | 820,804 | 389,198 | 7,182,158 | ||||||||||||
Segment operating earnings (losses)
|
920,222 | 46,836 | 11,661 | 978,719 | ||||||||||||
Segment assets
|
2,365,532 | 605,023 | 446,216 | 3,416,771 | ||||||||||||
Depreciation and amortization
|
105,478 | 12,407 | 7,809 | 125,694 | ||||||||||||
Additions to long-lived assets
|
$ | 100,194 | $ | 20,745 | $ | 5,660 | $ | 126,599 |
2009
|
||||||||||||||||
United States
|
Canada
|
Other Businesses
|
Total
|
|||||||||||||
Total net sales
|
$ | 5,445,390 | $ | 651,166 | $ | 165,051 | $ | 6,261,607 | ||||||||
Intersegment net sales
|
(39,057 | ) | (154 | ) | (405 | ) | (39,616 | ) | ||||||||
Net sales to external customers
|
5,406,333 | 651,012 | 164,646 | 6,221,991 | ||||||||||||
Segment operating earnings (losses)
|
735,586 | 43,742 | (11,634 | ) | 767,694 | |||||||||||
Segment assets
|
2,281,731 | 545,866 | 333,955 | 3,161,552 | ||||||||||||
Depreciation and amortization
|
111,922 | 10,718 | 5,991 | 128,631 | ||||||||||||
Additions to long-lived assets
|
$ | 111,816 | $ | 14,828 | $ | 10,690 | $ | 137,334 |
2008
|
||||||||||||||||
United States
|
Canada
|
Other Businesses
|
Total
|
|||||||||||||
Total net sales
|
$ | 6,057,828 | $ | 727,989 | $ | 111,732 | $ | 6,897,549 | ||||||||
Intersegment net sales
|
(46,992 | ) | (127 | ) | (398 | ) | (47,517 | ) | ||||||||
Net sales to external customers
|
6,010,836 | 727,862 | 111,334 | 6,850,032 | ||||||||||||
Segment operating earnings (losses)
|
840,408 | 54,263 | (11,827 | ) | 882,844 | |||||||||||
Segment assets
|
2,310,484 | 448,660 | 133,111 | 2,892,255 | ||||||||||||
Depreciation and amortization
|
107,709 | 10,488 | 4,574 | 122,771 | ||||||||||||
Additions to long-lived assets
|
$ | 136,338 | $ | 19,833 | $ | 32,469 | $ | 188,640 |
2010
|
2009
|
2008
|
||||||||||
Operating earnings:
|
||||||||||||
Total operating earnings for reportable
segments
|
$ | 978,719 | $ | 767,694 | $ | 882,844 | ||||||
Unallocated expenses
|
(118,244 | ) | (102,470 | ) | (100,172 | ) | ||||||
Total consolidated operating earnings
|
$ | 860,475 | $ | 665,224 | $ | 782,672 | ||||||
Assets:
|
||||||||||||
Total assets for reportable segments
|
$ | 3,416,771 | $ | 3,161,552 | $ | 2,892,255 | ||||||
Unallocated assets
|
487,606 | 564,780 | 623,162 | |||||||||
Total consolidated assets
|
$ | 3,904,377 | $ | 3,726,332 | $ | 3,515,417 |
2010
|
||||||||||||
Segment
Totals
|
Unallocated
|
Consolidated Total
|
||||||||||
Other significant items:
|
||||||||||||
Depreciation and amortization
|
$ | 125,694 | $ | 12,099 | $ | 137,793 | ||||||
Additions to long-lived assets
|
$ | 126,599 | $ | 4,941 | $ | 131,540 | ||||||
Revenues
|
Long-lived Assets
|
|||||||||||
Geographic information:
|
||||||||||||
United States
|
$ | 5,922,668 | $ | 845,008 | ||||||||
Canada
|
823,220 | 87,325 | ||||||||||
Other foreign countries
|
436,270 | 64,900 | ||||||||||
$ | 7,182,158 | $ | 997,233 |
2009
|
||||||||||||
Segment
Totals
|
Unallocated
|
Consolidated Total
|
||||||||||
Other significant items:
|
||||||||||||
Depreciation and amortization
|
$ | 128,631 | $ | 12,343 | $ | 140,974 | ||||||
Additions to long-lived assets
|
$ | 137,334 | $ | 2,618 | $ | 139,952 | ||||||
Revenues
|
Long-lived Assets
|
|||||||||||
Geographic information:
|
||||||||||||
United States
|
$ | 5,362,729 | $ | 864,586 | ||||||||
Canada
|
653,984 | 74,515 | ||||||||||
Other foreign countries
|
205,278 | 53,543 | ||||||||||
$ | 6,221,991 | $ | 992,644 |
2008
|
||||||||||||
Segment
Totals
|
Unallocated
|
Consolidated Total
|
||||||||||
Other significant items:
|
||||||||||||
Depreciation and amortization
|
$ | 122,771 | $ | 12,366 | $ | 135,137 | ||||||
Additions to long-lived assets
|
$ | 188,640 | $ | 7,508 | $ | 196,148 | ||||||
Revenues
|
Long-lived Assets
|
|||||||||||
Geographic information:
|
||||||||||||
United States
|
$ | 5,953,205 | $ | 878,624 | ||||||||
Canada
|
731,131 | 60,755 | ||||||||||
Other foreign countries
|
165,696 | 42,481 | ||||||||||
$ | 6,850,032 | $ | 981,860 |
United States
|
Canada
|
Other Businesses
|
Total
|
|||||||||||||
Balance at January 1, 2008
|
$ | 91,696 | $ | 141,332 | $ | – | $ | 233,028 | ||||||||
Acquisition
|
2,372 | 4,381 | – | 6,753 | ||||||||||||
Translation
|
– | (26,622 | ) | – | (26,622 | ) | ||||||||||
Balance at December 31, 2008
|
94,068 | 119,091 | – | 213,159 | ||||||||||||
Acquisitions
|
62,361 | 67 | 58,191 | 120,619 | ||||||||||||
Translation
|
– | 18,748 | (1,344 | ) | 17,404 | |||||||||||
Balance at December 31, 2009
|
156,429 | 137,906 | 56,847 | 351,182 | ||||||||||||
Acquisitions
|
1,012 | 8,592 | 14,531 | 24,135 | ||||||||||||
Purchase price adjustments
|
(6,221 | ) | – | 2,286 | (3,935 | ) | ||||||||||
Translation
|
– | 7,424 | 8,426 | 15,850 | ||||||||||||
Balance at December 31, 2010
|
$ | 151,220 | $ | 153,922 | $ | 82,090 | $ | 387,232 |
2010 Quarter Ended
|
||||||||||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
Total
|
||||||||||||||||
Net sales
|
$ | 1,672,354 | $ | 1,783,696 | $ | 1,899,412 | $ | 1,826,696 | $ | 7,182,158 | ||||||||||
Cost of merchandise sold
|
966,612 | 1,036,610 | 1,109,688 | 1,063,564 | 4,176,474 | |||||||||||||||
Gross profit
|
705,742 | 747,086 | 789,724 | 763,132 | 3,005,684 | |||||||||||||||
Warehousing, marketing and
administrative expenses
|
522,857 | 532,171 | 538,451 | 551,730 | 2,145,209 | |||||||||||||||
Operating earnings
|
182,885 | 214,915 | 251,273 | 211,402 | 860,475 | |||||||||||||||
Net earnings attributable to W.W. Grainger, Inc.
|
99,173 | 129,077 | 150,405 | 132,210 | 510,865 | |||||||||||||||
Earnings per share - basic
|
1.34 | 1.76 | 2.10 | 1.87 | 7.05 | |||||||||||||||
Earnings per share - diluted
|
$ | 1.31 | $ | 1.73 | $ | 2.06 | $ | 1.83 | $ | 6.93 |
2009 Quarter Ended
|
||||||||||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
Total
|
||||||||||||||||
Net sales
|
$ | 1,465,248 | $ | 1,533,263 | $ | 1,589,665 | $ | 1,633,815 | $ | 6,221,991 | ||||||||||
Cost of merchandise sold
|
835,833 | 908,295 | 929,720 | 949,617 | 3,623,465 | |||||||||||||||
Gross profit
|
629,415 | 624,968 | 659,945 | 684,198 | 2,598,526 | |||||||||||||||
Warehousing, marketing and
administrative expenses
|
470,201 | 471,039 | 473,225 | 518,837 | 1,933,302 | |||||||||||||||
Operating earnings
|
159,214 | 153,929 | 186,720 | 165,361 | 665,224 | |||||||||||||||
Net earnings attributable to W.W. Grainger, Inc.
|
96,378 | 92,466 | 144,564 | 97,058 | 430,466 | |||||||||||||||
Earnings per share - basic
|
1.27 | 1.23 | 1.91 | 1.29 | 5.70 | |||||||||||||||
Earnings per share - diluted
|
$ | 1.25 | $ | 1.21 | $ | 1.88 | $ | 1.27 | $ | 5.62 |
W.W. GRAINGER, INC.
|
|
By:
|
/s/ James T. Ryan
|
James T. Ryan
Chairman, President and Chief Executive Officer
|
/s/ James T. Ryan
|
/s/ Stuart L. Levenick
|
|
James T. Ryan
|
Stuart L. Levenick
|
|
Chairman, President and Chief Executive Officer
|
Director
|
|
(Principal Executive Officer and Director)
|
||
/s/ John W. McCarter, Jr.
|
||
/s/ Ronald L. Jadin
|
John W. McCarter, Jr.
|
|
Ronald L. Jadin
|
Director
|
|
Senior Vice President
|
||
and Chief Financial Officer
|
/s/ Neil S. Novich
|
|
(Principal Financial Officer)
|
Neil S. Novich
|
|
Director
|
||
/s/ Gregory S. Irving
|
||
Gregory S. Irving
|
/s/ Michael J. Roberts
|
|
Vice President and Controller
|
Michael J. Roberts
|
|
(Principal Accounting Officer)
|
Director
|
|
/s/ Brian P. Anderson
|
/s/ Gary L. Rogers
|
|
Brian P. Anderson
|
Gary L. Rogers
|
|
Director
|
Director
|
|
/s/ Wilbur H. Gantz
|
/s/ E. Scott Santi
|
|
Wilbur H. Gantz
|
E. Scott Santi
|
|
Director
|
Director
|
|
/s/ V. Ann Hailey
|
/s/ James D. Slavik
|
|
V. Ann Hailey
|
James D. Slavik
|
|
Director
|
Director
|
|
/s/ William K. Hall
|
||
William K. Hall
|
||
Director
|
||
|
(i) any merger, reorganization or consolidation of the Company or any Subsidiary with or into any corporation or other Person if Persons who were the beneficial owners (as such term is used in Rule 13d-3 under the Act) of the Company’s Common Stock and securities of the Company entitled to vote generally in the election of directors (“
Voting Securities
”) immediately before such merger, reorganization or consolidation are not, immediately thereafter, the beneficially owners, directly or indirectly, of at least 60% of the then-outstanding common shares and the combined voting power of the then-outstanding Voting Securities (“
Voting Power
”) of the corporation or other Person surviving or resulting from such merger, reorganization or consolidation (or the parent corporation thereof) in substantially the same respective proportions as their beneficial ownership, immediately before the consummation of such merger, reorganization or consolidation, of the then-outstanding Common Stock and Voting Power of the Company; or
|
|
(ii) the sale or other disposition of all or substantially all of the consolidated assets of the Company, other than a sale or other disposition by the Company of all or substantially all of its consolidated assets to an entity of which at least 60% of the common shares and the Voting Power outstanding
|
|
(i) no such person, entity or group shall be deemed to own beneficially any securities held by the Company or a Subsidiary or any employee benefit plan (or any related trust) of the Company or a Subsidiary;
|
|
(ii) no Change in Control shall be deemed to have occurred solely by reason of any such acquisition if both (x) after giving effect to acquisition, such person, entity or group has beneficial ownership of less than 30% of the then-outstanding Common Stock and Voting Power of the Company and (y) prior to such acquisition, at least two-thirds of the directors described in paragraph (c) of this definition vote to adopt a resolution of the Board to the specific effect that such acquisition shall not be deemed a Change in Control; and
|
|
(iii) no Change in Control shall be deemed to have occurred solely by reason any such acquisition or holding in connection with any merger, reorganization or consolidation of the Company or any Subsidiary which is not a Change in Control within the meaning of paragraph (a)(i) of this definition.
|
|
(i) During the Employment Period, (A) Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) Executive's services shall be performed at the location where Executive was employed immediately preceding the Effective Date or any office or location less than 50 miles from such location.
|
|
(ii) During the Employment Period, and excluding any periods of vacation, sick leave and disability to which Executive is entitled, Executive shall devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to Executive thereunder, use Executive's reasonable best efforts to perform faithfully and efficiently such
|
|
(b)
Compensation
.
|
|
(i)
Base Salary
. During the Employment Period, Executive shall receive an annual base salary in cash (“
Annual Base Salary
”), which shall be paid in a manner consistent with the Company's payroll practices immediately preceding the Effective Date at a rate at least equal to 12 times the highest monthly base salary (unreduced by any salary reductions or deferrals pursuant to a plan maintained under Section 401(k) of the Code or any similar plan) paid or payable to Executive by the Company in respect of the 12-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Company shall review the Annual Base Salary at least annually and may increase Annual Base Salary at any time and from time to time based on the performance of the Executive and the Company. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term “Annual Base Salary” shall refer to Annual Base Salary as so increased.
|
|
(ii)
Annual Bonus
. In addition to Annual Base Salary, during the Employment Period Executive shall be entitled to participate in the Management Incentive Program or other annual bonus program maintained by the Company for peer executives, and the Executive's target bonus thereunder shall be not be less than the Target Bonus. Any annual bonus due to Executive under such program (the "
Annual Bonus
") shall be paid in cash no later than 90 days after the end of the fiscal year for which the Annual Bonus is awarded, unless Executive shall elect to defer the receipt of such Annual Bonus.
|
|
(iii)
Incentive, Savings and Retirement Plans
. In addition to Annual Base Salary and Annual Bonus payable as hereinabove provided, Executive shall be entitled to participate during the Employment Period in all incentive, savings and retirement plans and Policies applicable to peer
|
|
(iv)
Welfare Benefit Plans
. During the Employment Period, Executive and/or Executive's family, as the case may be, shall be eligible to participate in and shall receive all benefits under welfare benefit plans and Policies provided by the Company (including medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) and applicable to peer executives of the Company, but in no event shall such plans and Policies provide benefits which are less favorable, in the aggregate, than the most favorable of such plans and Policies in effect at any time during the 90-day period immediately preceding the Effective Date.
|
|
(v)
Expenses
. During the Employment Period, Executive shall be entitled to prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the most favorable Policies of the Company in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to Executive, as in effect at any time thereafter with respect to peer executives of the Company.
|
|
(vi)
Fringe Benefits
. During the Employment Period, Executive shall be entitled to fringe benefits in accordance with the most favorable plans and Policies of the Company in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to Executive, as in effect at any time thereafter with respect to peer executives of the Company.
|
|
(vii)
Office; Support Staff
. During the Employment Period, Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to Executive by the Company at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to Executive, as provided at any time thereafter with respect to peer executives of the Company.
|
|
(viii)
Vacation
. During the Employment Period, Executive shall be entitled to paid vacation in accordance with the most favorable plans and Policies of the Company as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to Executive, as in effect at any time thereafter with respect to peer executives of the Company.
|
|
(ix)
Subsidiaries
. To the extent that, immediately prior to the Effective Date, Executive has been on the payroll of, and participated in the bonus, incentive or employee benefit plans of, a Subsidiary, the references to the Company contained in Sections 2(b)(i) through 2(b)(viii) and elsewhere in this Agreement referring to benefits to which Executive may be entitled shall also refer to such Subsidiary.
|
|
(i) embezzlement, fraud or theft with respect to the property of the Company or a conviction for any felony involving moral turpitude or causing material harm, financial or otherwise, to the Company;
|
|
(ii) habitual neglect in the performance of Executive's significant duties (other than on account of incapacity due to physical or mental illness or Disability); or
|
|
(iii) a demonstrably deliberate act or failure to act, including a violation of the rules or policies of the Company, which causes a material financial or other loss, damage or injury to the property, reputation or employees of the Company; provided, however, that, unless such an act or a failure to act was done by Executive in bad faith or without a reasonable belief that Executive's act or failure to act, as the case may be, was in the best interest of the Company or was required by applicable law, such act or failure to act shall not constitute Cause if, within 20 days after the Board or the Chief Executive Officer of the Company gives Executive written notice of such act or failure to act that specifically refers to this Section, Executive cures such act or failure to act to the fullest extent that it is curable.
|
|
(v) The Company provides Executive a written notice (a “
Notice of Intent to Terminate
”) not less than 30 days prior to the Date of Termination setting forth the Company's intention to consider terminating Executive’s employment. Such Notice shall include a statement of the intended Date of Termination and a detailed description of the specific facts that the Company believes to constitute Cause.
|
|
(w) No act or omission of Executive shall constitute Cause if such act or omission occurred more than 12 months before the earliest date on which any member of the Board who is not a party to the act or omission
|
|
(x) Executive is offered an opportunity to respond to such Notice of Intent to Terminate by appearing in person, together with Executive's legal counsel, before the Board on a date specified in the Notice of Intent to Terminate, which date shall be at least 25 days after Executive’s receipt of the Notice of Intent to Terminate and, in any event, at least five days prior to the Date of Termination proposed in such Notice.
|
|
(y) By a vote of the Board that includes the affirmative vote of at least 75% of the Non-Employee Directors, the Board determines that the actions of Executive specified in the Notice of Intent to Terminate constitute Cause and that Executive's employment should accordingly be terminated for Cause.
|
|
(z) The Company provides Executive a copy of the Board's written determination setting forth in detail (I) the specific basis for such termination for Cause and (II) if the Date of Termination is other than the date of Executive’s receipt of such determination, the Date of Termination (which date shall be not more than 15 days after the giving of such notice).
|
|
(i) the assignment to Executive of any duties inconsistent in any material respect with Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 2(a), or any other action by the Company which results in a material adverse change in such position, authority, duties or responsibilities, excluding an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive (it being understood that, without limiting the generality of the foregoing, if a substantial portion of Executive's duties prior to the Change in Control related to the Company's status as a public company and such activities no longer constitute a substantial portion of Executive's duties during the Employment Period, then Executive shall be deemed to have "Good Reason");
|
|
(ii) any reduction by the Company in the base salary, annual bonus opportunity or long-term incentive opportunity provided to the Executive under Section 2(b), or any material reduction by the Company in the aggregate benefits (other than base salary, annual bonus opportunity or long-term incentive opportunity) provided to the Executive under such section;
|
|
(iii) any requirement that Executive be based at any office or location other than the location specified in Section 2(a)(i)(B);
|
|
(iv) any purported termination by the Company of Executive's employment otherwise than as expressly permitted by this Agreement (it being understood that any such purported termination shall not be effective for any other purpose of this Agreement); or
|
|
(v) any failure by the Company to comply with Section 10(c).
|
|
(i) The Company shall pay to Executive the following amounts in a lump sum in cash within 10 days after Executive's Date of Termination:
|
|
(A) an amount equal to the sum of Executive's Accrued Base Salary, Accrued Annual Bonus and accrued but unpaid vacation pay (collectively, the “
Accrued Obligations
”),
|
|
(B) the Prorated Annual Bonus,
|
|
(C) the product of two (2.0) (such number, the “
Severance Multiple
”) times the sum of Executive's (I) Annual Base Salary, (II) Target Bonus and (III) Average Profit Sharing Plan Contribution; and
|
|
(D) an amount equal to the value of the unvested portion of Executive's accounts under the Profit Sharing Plans as of the Date of Termination.
|
|
(ii)
|
(A) During the period commencing on the Date of Termination and continuing thereafter for a number of years equal to the Severance Multiple, or such longer period as any plan or Policy in which Executive is a participant as of the Date of Termination (such eligibility to be determined based on the terms of such plan or Policy as in effect on the Effective Date or, if more favorable to Executive, the terms of such plan or Policy as in effect on the Date of Termination), the Company shall continue to provide medical (including post-retirement medical benefits to the extent that Executive is or becomes eligible for such benefits as of the Date of Termination after giving effect to paragraph (C) of this Section 4(a)(ii)), prescription, dental and similar health care benefits (or, if such benefits are not available, the after-tax economic value thereof determined pursuant to paragraph (D) of this Section 4(a)(ii)) to Executive and his family.
|
|
(B) The terms of such benefits shall be at least as favorable to Executive as the terms of the most favorable plans or Policies of the Company applicable to peer executives at Executive's Date of Termination, but in no event less favorable to Executive than the most favorable plans or Policies of the Company applicable to peer
|
|
(C) Such benefits shall be provided at no cost to Executive and his family, except that Executive shall be responsible for the payment of premiums, co-payments, deductibles and similar charges based on the terms of the most favorable plans or Policies of the Company applicable to peer executives at Executive's Date of Termination, but in no event less favorable to Executive than the most favorable plans or Policies of the Company applicable to peer executives during the 90-day period immediately preceding the Effective Date.
|
|
(D) For purposes of determining whether, and on what terms and conditions, Executive is eligible to receive the post-retirement medical benefits specified in paragraph (A) above, Executive shall on the Date of Termination be credited with three (3.0) additional years for purposes of attained age and years of service.
|
|
(E) The after-tax economic value of any benefit to be provided pursuant to paragraph (A) above shall be deemed to be the present value of the premiums expected to be paid for all such benefits that are to be provided on an insured basis. The after-tax economic value of all other benefits shall be deemed to be the present value of the expected net cost to the Company of providing such benefits.
|
|
(iii) The Company shall cause Executive to receive, at the Company's expense, standard outplacement services from a nationally-recognized firm selected by Executive; provided that the cost of such services to the Company shall not exceed 15% of Executive's Annual Base Salary in effect on the Date of Termination.
|
|
(iv) If on the Date of Termination the Executive is a “specified employee” of the Company (as defined in Treasury Regulation Section 1.409A-1(i)), and if amounts payable under this Section 4(a) (other than Accrued Obligations) are not on account of an “involuntary separation from service” (as defined in Treasury Regulation Section 1.409A – 1(n)), amounts that would otherwise have been paid during the 6-month period immediately following the Date of Termination shall be paid on the first regular payroll date immediately following the 6-month anniversary of the Date of Termination.
|
If to the Company, to:
|
W.W. Grainger, Inc.
|
100 Grainger Parkway
|
|
Lake Forest, Illinois 60045
|
|
Attention: General Counsel
|
|
W.W. GRAINGER, INC.
|
|
|
By:________________________________________________ |
James T. Ryan
Chairman, President and Chief Executive Officer
|
|
EXECUTIVE:
|
|
___________________________________________________ | |
INSERT NAME
|
|
Encourage decision-making focused on producing a favorable rate of ROIC and on growing the business rapidly, thus leading to improvements in shareholder value.
|
|
Influence participants to make decisions consistent with shareholders’ interests.
|
|
Align management with Company objectives.
|
|
Attract and retain the talent required to achieve the Company’s objectives.
|
ROIC
|
=
|
Operating Earnings
Net Working Assets
|
Sales growth
|
=
|
Total Company Daily Sales, Current Year
Total Company Daily Sales, Prior Year
|
-1
|
1.
|
I have reviewed this Annual Report on Form 10-K of W.W. Grainger, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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By:
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/s/ J. T. Ryan
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Name:
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J. T. Ryan
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Title:
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Chairman, President and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of W.W. Grainger, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
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/s/ R. L. Jadin
|
Name:
|
R. L. Jadin
|
Title:
|
Senior Vice President and Chief Financial Officer
|
1.
|
The Annual Report on Form 10-K of Grainger for the annual period ended
December 31, 2010, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Grainger.
|
/s/ J. T. Ryan
|
|
J. T. Ryan
|
|
Chairman, President and
Chief Executive Oficer
|
|
February 25, 2011
|
1.
|
The Annual Report on Form 10-K of Grainger for the annual period ended
December 31, 2010, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Grainger.
|
/s/ R. L. Jadin
|
|
R. L. Jadin
|
|
Senior Vice President
and Chief Financial Officer
|
|
February 25, 2011
|