W.W. GRAINGER, INC. 
By CHICAGO, Jan. 24, 2014 /PRNewswire/ -- Grainger (NYSE: GWW) today reported record results for the year ended December 31, 2013. Sales of $9.4 billion increased 5 percent versus $9.0 billion in 2012. Reported net earnings of $797 million increased 16 percent versus $690 million in 2012. Reported earnings per share of $11.13 increased 17 percent versus $9.52 in 2012. The years 2013 and 2012 included the following items:
Twelve Months Ended
December 31,
------------
2013 2012 % Change
---- ---- --------
Diluted Earnings Per Share as reported: $11.13 $9.52 17%
GSA/USPS settlement 0.66
Goodwill impairment 0.29 0.04
Restructuring 0.10 0.18
Charge for U.S. branch closures 0.03
Subtotal 0.39 0.91
---- ----
Diluted Earnings Per Share as adjusted: $11.52 $10.43 10%
====== ======
Note: Information regarding the adjustments is detailed in the discussion of the 2013 fourth quarter.
"Despite a sluggish economic environment and aggressive investments in growth and infrastructure, this was another record year for Grainger," said Chairman, President and Chief Executive Officer Jim Ryan. "We made significant investments aimed directly at increasing our scale and accelerating share gains in the large and highly fragmented MRO market. Going forward, we will continue to invest in areas such as eCommerce, sales force expansion, inventory management solutions and distribution centers in order to drive market share growth and deliver solid returns," Ryan added.
"As evidenced by the restructuring in the quarter, we have some areas of the business that are not performing to our expectations. We are committed to improving the results and are taking the appropriate steps to strengthen the performance of these businesses," Ryan concluded.
The company also updated its 2014 earnings per share guidance to $12.10 to $12.85 from $12.25 to $13.00 and its 2014 sales guidance to 5 to 9 percent growth from 6 to 10 percent growth from the previous guidance issued on November 13, 2013. This change is largely due to a weaker Canadian dollar in recent months and the divestiture of a number of the direct marketing Specialty Brands that were sold on December 31, 2013.
During 2013, the company invested an incremental $132 million to drive growth and scale, primarily in the United States, and reached the following milestones:
-- eCommerce: Grainger surpassed $3 billion in eCommerce sales in 2013,
representing 33 percent of total company sales. eCommerce represents the
fastest growing and most profitable channel in the business. The company
also transitioned to a new web platform, launched a Spanish website and
introduced innovative mobile solutions.
-- Sales Force Expansion: In the United States, Grainger added 180 new
sales representatives in 2013. Since 2009, Grainger has added 930 new
U.S. sales representatives who, in aggregate, contributed approximately
1 percentage point of company sales growth in 2013. In general, sales to
customers with a sales representative grow at twice the rate of
customers that are not covered.
-- Inventory Management: Total U.S. KeepStock installations, including
vendor managed inventory, customer managed inventory and vending
machines, grew 38 percent, ending the year at approximately 55,000
installations. Sales to customers with a KeepStock installation grow at
twice the rate of non-KeepStock customers.
-- Product Line Expansion: In the Grainger U.S. business, Grainger.com
added more than 300,000 new products, bringing the total number of
products to more than 1.2 million products online. In Canada,
Acklands-Grainger announced the addition of 200,000 products to its
online offering. A broader product line enables customers to increase
productivity by consolidating their supplier base.
-- Distribution Network: Grainger enhanced its North America distribution
center network to accommodate growth and increase scale. The company
opened a 1 million square-foot highly automated distribution center in
Illinois that serves as the company's new central stocking facility.
Grainger also began construction on a 500,000 square-foot distribution
center in the Toronto area.
-- Single Channel Online Model: MonotaRO, the online business in Japan,
grew nearly 20 percent in local currency in 2013 and was named to the
Forbes(®) Asia "Best Under A Billion" list, which highlights 200 of the
best small and mid-sized companies in Asia Pacific. Revenue for the
company's other online business, Zoro Tools, grew more than 150 percent
in 2013.
For the full year, the company generated $986 million in operating cash flow versus $816 million in 2012. Capital expenditures for the year were $272 million versus $250 million in 2012, driven primarily by investments to expand the distribution center network in North America. The company also funded $154 million in acquisitions. For the full year, Grainger bought back approximately 1.7 million shares of stock for $438 million and has 3.6 million shares remaining under the current repurchase authorization. Dividends paid in 2013 totaled $255 million. For the full year, Grainger returned $693 million in cash to shareholders in the form of dividends and share repurchases.
2013 Fourth Quarter
Sales for the 2013 fourth quarter of $2.4 billion increased 7 percent versus $2.2 billion in the 2012 fourth quarter. Net earnings of $157 million were essentially flat versus $156 million in 2012. Fourth quarter earnings per share of $2.20 increased 1 percent versus $2.17 in 2012. The 2013 and 2012 fourth quarters included the following items:
Three Months Ended
December 31,
------------
2013 2012 % Change
---- ---- --------
Diluted Earnings Per Share as reported: $2.20 $2.17 1%
Goodwill impairment 0.29 0.04
Restructuring 0.10 0.18
Charge for U.S. branch closures 0.03
Subtotal 0.39 0.25
---- ----
Diluted Earnings Per Share as adjusted: $2.59 $2.42 7%
===== =====
During the quarter, the company recorded non-cash impairment charges primarily for goodwill, totaling $0.29 per share, of which $0.18 per share related to the business in Brazil and $0.11 per share related to Grainger Lighting Services in the United States. As a result of lowered performance expectations for these businesses, the fair value of these businesses was less than the carrying value, resulting in an impairment charge. The company also incurred restructuring charges of $0.10 per share related to improving the long-term performance of the businesses in Europe and China. These items combined in the 2013 fourth quarter represented a $0.39 reduction to earnings per share, resulting in adjusted EPS of $2.59. In the 2012 fourth quarter, the company recorded impairment and restructuring charges totaling $0.25, resulting in adjusted EPS of $2.42. Excluding items noted above from both years, company net earnings for the quarter increased 6 percent and earnings per share increased 7 percent versus the prior year.
Company sales in the 2013 fourth quarter increased 7 percent. There were 64 selling days in both the 2013 and 2012 fourth quarters. The 7 percent sales growth for the quarter consisted of 5 percentage points from volume, 4 percentage points from acquisitions and 1 percentage point from sales of seasonal products, partially offset by 2 percentage points decline from unfavorable foreign exchange and 1 percentage point from sales related to Hurricane Sandy in 2012.
The company's gross profit margin for the quarter decreased 130 basis points, driven by lower gross margins from the acquired businesses, accounting for approximately two-thirds of the decline, and faster growth with lower margin customers.
Company operating earnings of $257 million for the 2013 fourth quarter were down 1 percent versus the 2012 quarter. Excluding the items noted in the table above from both years, company operating earnings increased 3 percent. This increase was driven by the 7 percent sales growth and operating expense leverage as expenses, including $31 million in incremental growth-related spending, grew at a slower rate than sales. E&R Industrial, acquired on August 23, 2013, outperformed original expectations and was slightly accretive to earnings in the quarter. Acquisitions made in the United States during the last 13 months, including E&R, are contributing to Grainger's ability to reach the plant floor and increase its share of wallet with customers in the manufacturing space.
The company has two reportable business segments, the United States and Canada, which represented approximately 89 percent of company sales for the quarter. The remaining operating units located primarily in Asia, Europe, and Latin America are included in Other Businesses and are not reportable segments.
United States
Sales in the United States segment increased 10 percent in the 2013 fourth quarter versus the prior year. The 10 percent sales growth was driven by 5 percentage points from volume, 6 percentage points from sales from the E&R Industrial, Techni-Tool and Safety Solutions acquisitions and 1 percentage point from sales of seasonal products, partially offset by a 1 percentage point decline from price and 1 percentage point from unfavorable comparison to sales related to Hurricane Sandy in 2012. Strong sales growth to customers in the manufacturing, retail, natural resources and commercial customer end markets contributed to the sales increase in the quarter.
Operating earnings for the United States segment increased 6 percent in the quarter driven by the 10 percent sales growth and positive expense leverage, partially offset by lower gross profit margins. Positive expense leverage was driven by the 10 percent sales growth versus a 5 percent increase in operating expenses including $28 million in incremental growth-related spending. Gross profit margins for the quarter decreased 180 basis points driven by lower gross margins from the acquired businesses, which accounted for approximately two-thirds of the decrease, and faster growth with lower margin customers. Excluding the charges for the United States segment in the 2013 and 2012 fourth quarters, operating earnings increased 7 percent for the 2013 fourth quarter.
Canada
Sales in the 2013 fourth quarter at Acklands-Grainger decreased 3 percent and increased 3 percent in local currency. The 3 percent sales decline consisted of 3 percentage points increase from volume offset by a 6 percentage points decline from unfavorable foreign exchange. The sales increase in Canada was led by growth to customers in the commercial, transportation, light manufacturing and forestry end markets.
Operating earnings in Canada decreased 10 percent in the 2013 fourth quarter, down 5 percent in local currency. This decrease was driven by lower gross profit margins, unfavorable foreign exchange and negative expense leverage. The gross profit margin in Canada declined 20 basis points versus the prior year. The decline was primarily due to product cost inflation exceeding price inflation driven by unfavorable foreign exchange. Contributing to the lower operating performance was approximately $2 million in incremental spending related to IT system investments.
Other Businesses
Sales for the Other Businesses, which includes operations primarily in Asia, Europe and Latin America, increased 3 percent for the 2013 fourth quarter versus the prior year. This performance consisted of 11 percentage points of growth from volume and price, partially offset by an 8 percentage point decline from unfavorable foreign exchange. Sales growth in the Other Businesses was driven by Zoro Tools and the business in Mexico. Strong sales growth in Japan was offset by the weakness in the Japanese yen versus the U.S. dollar.
The Other Businesses posted a $20 million operating loss in the 2013 fourth quarter versus a $10 million operating loss in the 2012 fourth quarter. During the quarter, the company recorded impairment charges related to the business in Brazil and implemented structural changes to the businesses in Europe and China, resulting in a $23 million charge. In the 2012 fourth quarter, the company recognized restructuring charges of $14 million for the Other Businesses. Excluding these charges from both years, the Other Businesses would have generated $3 million in operating earnings in both the 2013 and 2012 fourth quarters. Strong operating performance from Zoro Tools offset lower performance from most of the other businesses. In addition, the business in Japan generated strong earnings growth in local currency which was more than offset by unfavorable foreign exchange.
Other
Other income and expense was a net expense of $2 million in the 2013 fourth quarter versus net expense of $5 million in the 2012 fourth quarter. This decrease was primarily attributable to lower average borrowings and lower average interest rates on the debt in the 2013 fourth quarter versus the 2012 quarter.
For the quarter, the effective tax rate in 2013 was 37.3 percent versus 37.6 percent in 2012. For the full year 2013, the effective tax rate was 37.3 percent versus 37.5 percent in 2012. The company is currently projecting an effective tax rate of 37.4 to 37.8 percent for the year 2014.
Cash Flow
Operating cash flow was $246 million in the 2013 fourth quarter versus $240 million in the 2012 fourth quarter. The company used the cash generated during the quarter to invest in the business, fund acquisitions and return cash to shareholders through share repurchase and dividends. Capital expenditures were $124 million in the 2013 fourth quarter versus $95 million in the fourth quarter of 2012. In the 2013 fourth quarter, Grainger returned $226 million to shareholders through $67 million in dividends and $159 million to buy back 606,000 shares of stock.
W.W. Grainger, Inc., with 2013 sales of $9.4 billion, is North America's leading broad line supplier of maintenance, repair and operating products, with operations in Asia, Europe and Latin America.
Visit www.grainger.com/investor to view information about the company, including a history of sales by segment and a podcast regarding 2013 fourth quarter results. The Grainger website also includes more information on Grainger's proven growth drivers, including product line expansion, sales force expansion, eCommerce, inventory services and international expansion.
Forward-Looking Statements
This document contains forward-looking statements under the federal securities law. Forward-looking statements relate to the company's expected future financial results and business plans, strategies and objectives and are not historical facts. They are generally identified by qualifiers such as "going forward", "will continue", "plan", "earnings per share guidance", "sales guidance", "currently projecting" or similar expressions. There are risks and uncertainties, the outcome of which could cause the company's results to differ materially from what is projected. The forward-looking statements should be read in conjunction with the company's most recent annual report, as well as the company's Form 10-K, Form 10-Q and other reports filed with the Securities & Exchange Commission, containing a discussion of the company's business and various factors that may affect it.
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except for per share amounts)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2013 2012 2013 2012
---- ---- ---- ----
Net sales $2,377,232 $2,226,120 $9,437,758 $8,950,045
Cost of merchandise sold 1,370,835 1,256,595 5,301,275 5,033,885
--------- --------- --------- ---------
Gross profit 1,006,397 969,525 4,136,483 3,916,160
Warehousing, marketing and administrative expenses 749,635 711,087 2,839,629 2,785,035
------- ------- --------- ---------
Operating earnings 256,762 258,438 1,296,854 1,131,125
Other income and (expense)
Interest income 719 756 3,234 2,660
Interest expense (3,123) (5,360) (13,225) (16,078)
Other non-operating income and (expense) (63) (7) 736 82
--- --- --- ---
Total other income and (expense) (2,467) (4,611) (9,255) (13,336)
------ ------ ------ -------
Earnings before income taxes 254,295 253,827 1,287,599 1,117,789
Income taxes 94,902 95,341 479,850 418,940
------ ------ ------- -------
Net earnings 159,393 158,486 807,749 698,849
------- ------- ------- -------
Net earnings attributable to noncontrolling interest 2,644 2,219 10,713 8,968
----- ----- ------ -----
Net earnings attributable to W.W. Grainger, Inc. $156,749 $156,267 $797,036 $689,881
======== ======== ======== ========
Earnings per share $2.24 $2.21 $11.31 $9.71
-Basic
-Diluted $2.20 $2.17 $11.13 $9.52
===== ===== ====== =====
Average number of shares outstanding 69,140 69,557 69,456 69,812
-Basic
-Diluted 70,191 70,809 70,576 71,182
====== ====== ====== ======
Diluted Earnings Per Share
--------------------------
Net earnings as reported $156,749 $156,267 $797,036 $689,881
Earnings allocated to participating securities (1,985) (2,705) (11,521) (12,181)
------ ------ ------- -------
Net earnings available to common shareholders $154,764 $153,562 $785,515 $677,700
======== ======== ======== ========
Weighted average shares adjusted for dilutive securities 70,191 70,809 70,576 71,182
====== ====== ====== ======
Diluted earnings per share $2.20 $2.17 $11.13 $9.52
===== ===== ====== =====
SEGMENT RESULTS (Unaudited)
(In thousands of dollars)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2013 2012 2013 2012
---- ---- ---- ----
Sales
United States $1,871,510 $1,706,283 $7,413,712 $6,925,842
Canada 271,839 280,339 1,114,285 1,105,782
Other Businesses 272,876 263,858 1,040,473 1,006,762
Intersegment sales (38,993) (24,360) (130,712) (88,341)
------- ------- -------- -------
Net sales to external customers $2,377,232 $2,226,120 $9,437,758 $8,950,045
---------- ---------- ---------- ----------
Operating earnings
United States $291,984 $276,021 $1,304,175 $1,132,722
Canada 26,815 29,910 128,768 127,412
Other Businesses (19,634) (10,448) 7,599 20,289
Unallocated expense (42,403) (37,045) (143,688) (149,298)
------- ------- -------- --------
Operating earnings $256,762 $258,438 $1,296,854 $1,131,125
-------- -------- ---------- ----------
Company operating margin 10.8% 11.6% 13.7% 12.6%
ROIC* for Company 31.8% 29.1%
ROIC* for United States 49.2% 45.8%
ROIC* for Canada 21.4% 22.5%
*The GAAP financial statements are the source for all amounts used in the Return on Invested Capital (ROIC) calculation. ROIC is calculated using operating earnings divided by net working assets (a 5-point average for the year). Net working assets are working assets minus working liabilities defined as follows: working assets equal total assets less cash equivalents (5-point average of $357.1 million), deferred taxes, and investments in unconsolidated entities, plus the LIFO reserve (5-point average of $384.0 million). Working liabilities are the sum of trade payables, accrued compensation and benefits, accrued contributions to employees' profit sharing plans, and accrued expenses.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
Preliminary
(In thousands of dollars)
At December 31,
---------------
Assets 2013 2012
------ ---- ----
Cash and cash
equivalents $430,644 $452,063
Accounts
receivable -
net (1) 1,101,656 940,020
Inventories 1,305,520 1,301,935
Prepaid
expenses and
other assets 138,104 150,655
Deferred income
taxes 75,511 55,967
------ ------
Total current
assets 3,051,435 2,900,640
Property,
buildings and
equipment -
net 1,208,562 1,144,573
Deferred income
taxes 11,812 51,536
Goodwill 525,467 543,670
Other assets
and
intangibles -
net (2) 471,805 374,179
------- -------
Total assets $5,269,081 $5,014,598
---------- ----------
Liabilities and
Shareholders'
Equity
---------------
Short-term debt $66,857 $79,071
Current
maturities of
long-term
debt 29,585 18,525
Trade accounts
payable (3) 504,129 428,782
Accrued
compensation
and benefits 185,905 165,450
Accrued
contributions
to employees'
profit sharing
plans 176,800 170,434
Accrued
expenses 228,093 204,800
Income taxes
payable 6,330 12,941
----- ------
Total current
liabilities 1,197,699 1,080,003
Long-term debt 446,357 467,048
Deferred income
taxes and tax
uncertainties 113,585 119,280
Employment-
related and
other non-
current
liabilities 184,604 230,901
Shareholders'
equity (4) 3,326,836 3,117,366
--------- ---------
Total
liabilities
and
shareholders'
equity $5,269,081 $5,014,598
========== ==========
Accounts receivable -net
increased $162 million, or
17%, primarily due to
increased sales and
(1) acquisitions.
Other assets and intangibles -
net increased $98 million, or
26%, primarily due to the
acquisitions of E&R
Industrial and Safety
(2) Solutions.
Trade accounts payable
increased $75 million, or
18%, primarily due to a year-
end increase in inventory
(3) purchases and acquisitions.
Common stock outstanding as of
December 31, 2013 was
68,853,938 shares as compared
with 69,478,495 shares at
(4) December 31, 2012.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Preliminary
(In thousands of dollars)
Twelve Months Ended
December 31,
------------
2013 2012
---- ----
Cash flows from operating activities:
Net earnings $807,749 $698,849
Provision for losses on accounts receivable 8,855 9,504
Deferred income taxes and tax uncertainties 15,573 12,343
Depreciation and amortization 180,613 159,049
Impairment of goodwill and other intangible
assets 26,284 4,945
(Gains) losses from sales of assets (22,155) 2,609
Stock-based compensation 55,590 55,500
Change in operating assets and liabilities -
net of business acquisitions:
Accounts receivable (126,465) (45,953)
Inventories (23,636) (14,872)
Prepaid expenses and other assets 9,416 8,346
Trade accounts payable 64,613 (54,314)
Other current liabilities 8,551 (58,673)
Current income taxes payable (4,813) (9,349)
Accrued employment-related benefits cost (10,316) 45,795
Other - net (3,361) 2,416
------ -----
Net cash provided by operating activities 986,498 816,195
------- -------
Cash flows from investing activities:
Additions to property, buildings and
equipment (272,145) (249,860)
Proceeds from sales of property, buildings
and equipment 26,701 8,530
Cash paid for business acquisitions, net of
cash acquired (153,915) (64,808)
Other - net (68) 482
--- ---
Net cash used in investing activities (399,427) (305,656)
-------- --------
Cash flows from financing activities:
Borrowings under lines of credit 144,805 161,160
Payments against lines of credit (154,450) (205,006)
Proceeds from issuance of long-term debt - 300,000
Payments of long-term debt and commercial
paper (16,681) (219,950)
Proceeds from stock options exercised 69,412 72,084
Excess tax benefits from stock-based
compensation 59,984 57,885
Purchase of treasury stock (438,473) (340,532)
Cash dividends paid (255,466) (220,077)
-------- --------
Net cash used in financing activities (590,869) (394,436)
-------- --------
Exchange rate effect on cash and cash
equivalents (17,621) 469
------- ---
Net change in cash and cash equivalents (21,419) 116,572
Cash and cash equivalents at beginning of
year 452,063 335,491
------- -------
Cash and cash equivalents at end of period $430,644 $452,063
======== ========
SUPPLEMENTAL INFORMATION -CONSOLIDATED
STATEMENTS OF EARNINGS
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (Unaudited)
(In thousands of dollars)
The company supplemented the reporting of financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, which the company refers to as "adjusted" measures, including adjusted operating earnings, adjusted segment operating earnings, adjusted net earnings and adjusted diluted earnings per share. Adjusted measures exclude items that may not be indicative of core operating results. The company believes that these non-GAAP measures provide meaningful information to assist shareholders in understanding financial results and assessing prospects for future performance. Management believes adjusted operating earnings, adjusted net earnings and adjusted diluted earnings per share are important indicators of operations because they exclude items that may not be indicative of our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported results. These non-GAAP financial measures reflect an additional way of viewing aspects of operations that, when viewed with GAAP results, provide a more complete understanding of the business. The company strongly encourages investors and shareholders to review company financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
The reconciliations provided below reconcile the non-GAAP financial measures adjusted net earnings, adjusted diluted earnings per share, adjusted operating earnings and adjusted segment operating earnings with GAAP financial measures:
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2013 2012% 2013 2012%
---- ---- ---- ----
Net earnings reported $156,749 $156,267 - % $797,036 $689,881 16%
GSA/USPS settlement - - - 47,310
Goodwill impairment 20,421 3,030 20,421 3,030
Restructuring 7,326 12,550 7,326 12,550
Charge for U.S. branch
closures - 2,170 - 2,170
--- ----- --- -----
Subtotal 27,747 17,750 27,747 65,060
------ ------ ------ ------
Net earnings adjusted $184,496 $174,017 6% $824,783 $754,941 9%
======== ======== ======== ========
Diluted earnings per
share reported $2.20 $2.17 1% $11.13 $9.52 17%
GSA/USPS settlement - - - 0.66
Goodwill impairment 0.29 0.04 0.29 0.04
Restructuring 0.10 0.18 0.10 0.18
Charge for U.S. branch
closures - 0.03 - 0.03
--- ---- --- ----
Subtotal 0.39 0.25 0.39 0.91
---- ---- ---- ----
Diluted earnings per
share adjusted $2.59 $2.42 7% $11.52 $10.43 10%
===== ===== ====== ======
SUPPLEMENTAL INFORMATION - CONSOLIDATED STATEMENTS OF EARNINGS
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited)
(In thousands of dollars)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2013 2012% 2013 2012%
---- ---- ---- ----
Operating earnings reported $256,762 $258,438 (1)% $1,296,854 $1,131,125 15%
GSA/USPS settlement - - - 76,000
Goodwill impairment 25,758 4,850 25,758 4,850
Restructuring 9,815 16,050 9,815 16,050
Charge for U.S. branch closures - 3,470 - 3,470
--- ----- --- -----
Subtotal 35,573 24,370 35,573 100,370
------ ------ ------ -------
Operating earnings adjusted $292,335 $282,808 3% $1,332,427 $1,231,495 8%
======== ======== ========== ==========
Segment operating earnings adjusted
United States 304,845 286,081 1,317,036 1,218,782
Canada 26,815 29,910 128,768 127,412
Other Businesses 3,079 3,222 30,312 33,959
Unallocated expense (42,404) (36,405) (143,689) (148,658)
------- ------- -------- --------
Segment operating earnings adjusted $292,335 $282,808 3% $1,332,427 $1,231,495 8%
======== ======== ========== ==========
Company operating margin adjusted 12.3% 12.7% 14.1% 13.8%
ROIC* for Company 32.6% 31.5%
ROIC* for United States 49.6% 48.9%
ROIC* for Canada 21.4% 22.5%
*Adjusted ROIC is calculated as defined on page 9, excluding the items adjusting operating earnings as noted above.
SOURCE W.W. Grainger, Inc.
