CHICAGO, Jan. 30, 2020 /PRNewswire/ -- Grainger
(NYSE: GWW) today reported results for the fourth quarter and full
year 2019. For the full year, sales of $11.5
billion increased 2.5 percent versus $11.2 billion in the prior year. Sales of
$2.8 billion in the 2019 fourth
quarter increased 3 percent versus the 2018 fourth quarter.
"In 2019, we grew sales, operating earnings and EPS despite
challenging and uncertain economic conditions. Our sales growth in
the U.S. outperformed the market throughout the year, and our share
gain accelerated in the fourth quarter, as our growth initiatives
began to take hold. At our U.S. endless assortment business, Zoro,
we continued to invest in the business to ensure ongoing success.
At the total company level, our strong expense control held
SG&A stable and enabled our advertising, technology and Zoro
investments, " said DG Macpherson, Chairman and Chief Executive
Officer. "As we look to 2020, we will diligently manage expenses
while continuing to invest in future growth. We are confident in
our strategy and ability to execute moving forward."
2019 Financial Summary
($ in
millions)
|
FY
2019
|
FY
2019
Change v. Prior
(Fav.
vs. (Unfav.))
|
Q4
2019
|
Q4
2019
Change v. Prior
(Fav.
vs. (Unfav.))
|
|
Reported
|
Adjusted1
|
Reported
|
Adjusted1
|
Reported
|
Adjusted1
|
Reported
|
Adjusted1
|
Net
Sales
|
$11,486
|
$11,486
|
2%
|
2%
|
$2,847
|
$2,847
|
3%
|
3%
|
Gross
Profit
|
$4,397
|
$4,397
|
1%
|
1%
|
$1,082
|
$1,081
|
1%
|
2%
|
Operating
Earnings
|
$1,262
|
$1,388
|
9%
|
3%
|
$181
|
$307
|
(37)%
|
(1)%
|
Net
Earnings
|
$849
|
$958
|
8%
|
1%
|
$103
|
$212
|
(51)%
|
(6)%
|
Diluted
EPS
|
$15.32
|
$17.29
|
12%
|
4%
|
$1.88
|
$3.88
|
(49)%
|
(2)%
|
|
|
|
|
|
|
|
|
|
Gross Profit
%
|
38.3%
|
38.3%
|
(50) bps
|
(50) bps
|
38.0%
|
38.0%
|
(60) bps
|
(50) bps
|
Operating
Margin
|
11.0%
|
12.1%
|
70 bps
|
10 bps
|
6.4%
|
10.8%
|
(410) bps
|
(40) bps
|
Tax
Rate
|
26.0%
|
24.8%
|
(210) bps
|
(310) bps
|
31.7%
|
23.7%
|
(1020) bps
|
(210) bps
|
(1)
|
Results exclude
restructuring and income tax items as shown in the supplemental
information to this release. Reconciliations of the adjusted
measures reflected in this table to the most directly comparable
GAAP measures are provided in the supplemental information to this
release.
|
Revenue
For the full year 2019, total company sales increased 2.5 percent
versus the full year 2018, including a 0.5 percent negative impact
of foreign currency exchange. On a constant currency basis, sales
increased 3 percent driven by volume growth of 2.5 percent and
favorable price of 0.5 percent.
For the fourth quarter 2019, total company sales increased 3.0
percent versus the prior year period driven by volume growth of 3.5
percent and unfavorable price of 0.5 percent. There was no foreign
currency exchange impact in the fourth quarter.
Gross Profit Margin
For the full year 2019, reported and adjusted gross profit margin
was 38.3 percent, down 50 basis points, versus the full year 2018
gross profit margin of 38.7 percent.
Reported gross profit margin for the fourth quarter was 38.0
percent, down 60 basis points, versus the 2018 fourth quarter
gross profit margin of 38.6 percent. Adjusted gross profit
margin for the quarter was 38.0 percent, down 50 basis points,
versus the 2018 fourth quarter gross profit margin of 38.5 percent.
The lower gross profit margin was primarily driven by product and
customer mix in the U.S. Segment and total company business unit
mix driven by faster growth with the lower margin endless
assortment businesses.
Earnings
For the full year 2019, reported operating
earnings of $1.3 billion were up 9
percent versus $1.2 billion in 2018.
On an adjusted basis, operating earnings for 2019 were $1.4 billion, up 3 percent versus $1.3 billion in 2018. Reported operating margin
of 11.0 percent increased 70 basis points versus the prior year.
Adjusted operating margin of 12.1 percent increased 10 basis points
versus the prior year due primarily to operating expense leverage.
Reported earnings per share of $15.32
were up 12 percent versus $13.73 in
2018. Adjusted earnings per share of $17.29 increased 4 percent versus $16.70 in 2018. The increase in adjusted earnings
per share was due primarily to higher operating earnings, partially
offset by a higher tax rate.
Reported operating earnings for the 2019 fourth quarter of
$181 million were down 37 percent
versus $290 million in the 2018
fourth quarter. During the quarter, the company recorded a
$120 million write-down of
substantially all of the remaining intangible assets of the
Cromwell business which was the primary driver of the decline in
reported operating earnings. On an adjusted basis, operating
earnings for the quarter of $307
million were down 1 percent versus $310 million in the 2018 quarter. Reported
operating margin of 6.4 percent declined 410 basis points versus
the prior year. Adjusted operating margin of 10.8 percent declined
40 basis points versus the prior year due primarily to lower gross
profit margin in the quarter. Reported earnings per share of
$1.88 in the fourth quarter were down
49 percent versus $3.68 in the 2018
quarter. Adjusted earnings per share in the quarter of
$3.88 decreased 2 percent versus
$3.96 in the 2018 fourth quarter. The
decline in adjusted earnings per share was due primarily to a
higher tax rate in the quarter.
Tax Rate
For the full year 2019, the company's reported tax rate was 26.0
percent versus 23.9 percent in 2018. The adjusted tax rate for the
full year was 24.8 percent versus 21.7 percent in 2018.
For the fourth quarter 2019, the company's reported tax rate was
31.7 percent versus 21.5 percent in the 2018 fourth quarter.
The company's adjusted tax rate for the fourth quarter 2019 was
23.7 percent versus 21.6 percent in the fourth quarter 2018.
The 2019 tax rates for the quarter and full year contained no
tax benefit from the clean energy investments which were concluded
in 2018. For the full year, the 2019 tax rates also contained a
lower benefit from stock-based compensation than the prior year. In
addition, the company recorded a valuation allowance to reduce the
future tax benefits from Cromwell, increasing the reported tax rate
for the quarter.
Cash Flow
For the full year 2019, the company generated operating cash flow
of $1,042 million. This represents a
minor year over year decrease primarily related to employee
variable compensation payments, partially offset by favorable net
income and changes in working capital. The company used the cash
generated during the year to invest in the business and return cash
to shareholders through share repurchases and dividends. In 2019,
capital expenditures were $221
million. Grainger returned $1,028
million to shareholders through $328
million in dividends and $700
million used to buy back 2.4 million shares in 2019.
Operating cash flow for the quarter was $272 million versus $314
million in the 2018 fourth quarter, a decrease of 13 percent
compared to the same period last year. The majority of this decline
was driven by lower net income and working capital timing.
2020 Company Guidance:
The company is providing the following 2020 guidance:
Total
Company
|
2020 Guidance
Range
|
Net Sales
|
3.5% to 6.5%
growth
|
U.S. Market Growth (nominal)
|
-1.5% to
0.5%
|
U.S. Sales
|
1.0% to 4.0%
growth
|
Gross Profit
Margin
|
37.2% to
37.8%
|
Operating
Margin
|
11.7% to
12.5%
|
Earnings per
Share
|
$17.75 to
$19.25
|
Operating Cash
Flow
|
$1.1 to $1.2
billion
|
CapEx
|
~$250
million
|
Share
Buyback
|
$600 to $700
million
|
Dividend
|
$310 to $320
million
|
Tax Rate
|
24.5% to
25.5%
|
Segment Operating
Margin
|
|
United
States
|
15.6% to
16.0%
|
Canada
|
-2.0% to
2.0%
|
Other
Businesses
|
4.0% to
6.0%
|
Webcast
Grainger will conduct a live conference call and webcast at
11:00 a.m. Eastern Standard Time on
Jan. 30, 2020, to discuss the fourth
quarter. The webcast will be hosted by DG Macpherson and
Tom Okray, Senior Vice President and
Chief Financial Officer and can be accessed at
www.grainger.com/investor. For those unable to participate in the
live event, a webcast replay will be available for 90 days at
www.invest.grainger.com.
About Grainger
W.W. Grainger, Inc., with 2019 sales of $11.5 billion, is North
America's leading broad line supplier of maintenance, repair
and operating products (MRO), with operations also in Europe, Asia
and Latin America.
Visit www.invest.grainger.com to view information about
the company, including a supplement regarding 2019 fourth quarter
results. Additional company information can be found on the
Grainger Investor Relations website which includes our Fact Book
and Corporate Social Responsibility report.
Safe Harbor Statement
All statements in this communication, other than those relating to
historical facts, are "forward-looking statements." Forward-looking
statements can generally be identified by their use of terms such
as "anticipate," "estimate," "believe," "expect," "could,"
"forecast," "may," "intend," "plan," "predict," "project" "will" or
"would" and similar terms and phrases, including references to
assumptions. Forward-looking statements are not guarantees of
future performance and are subject to a number of assumptions,
risks and uncertainties, many of which are beyond our control,
which could cause actual results to differ materially from such
statements. Forward-looking statements include, but are not limited
to, statements about future strategic plans and future financial
and operating results. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include, among others: higher product costs or other
expenses; a major loss of customers; loss or disruption of source
of supply; increased competitive pricing pressures; failure to
develop or implement new technology initiatives; the
implementation, timing and results of our strategic pricing
initiatives; the outcome of pending and future litigation or
governmental or regulatory proceedings, including with respect to
wage and hour, anti-bribery and corruption, environmental,
advertising, privacy and cybersecurity matters; investigations,
inquiries, audits and changes in laws and regulations; failure to
comply with laws, regulations and standards; disruption of
information technology or data security systems involving us or
third parties on which we depend; general industry, economic,
market or political conditions; general global economic conditions,
including tariffs and trade issues and policies; currency exchange
rate fluctuations; market volatility; commodity price volatility;
labor shortages; facilities disruptions or shutdowns; higher fuel
costs or disruptions in transportation services; pandemic diseases
and natural and other catastrophes; unanticipated and/or extreme
weather conditions; loss of key members of management; our ability
to operate, integrate and leverage acquired businesses; changes in
effective tax rates; our common stock, including volatility in our
stock price; and other factors which can be found in our filings
with the Securities and Exchange Commission, including our most
recent periodic reports filed on Form 10-K and Form 10-Q, which are
available on our Investor Relations website. Forward-looking
statements are given only as of the date of this communication and
we disclaim any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as required by law.
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
(In millions of
dollars, except for per share amounts)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net sales
|
$
|
2,847
|
|
|
$
|
2,763
|
|
|
$
|
11,486
|
|
|
$
|
11,221
|
|
Cost of goods sold
|
1,765
|
|
|
1,697
|
|
|
7,089
|
|
|
6,873
|
|
Gross profit
|
1,082
|
|
|
1,066
|
|
|
4,397
|
|
|
4,348
|
|
Selling, general and
administrative expenses
|
901
|
|
|
776
|
|
|
3,135
|
|
|
3,190
|
|
Operating earnings
|
181
|
|
|
290
|
|
|
1,262
|
|
|
1,158
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
Interest expense,
net
|
19
|
|
|
16
|
|
|
79
|
|
|
82
|
|
Other, net
|
(8)
|
|
|
(5)
|
|
|
(26)
|
|
|
(5)
|
|
Total other
expense, net
|
11
|
|
|
11
|
|
|
53
|
|
|
77
|
|
Earnings before income taxes
|
170
|
|
|
279
|
|
|
1,209
|
|
|
1,081
|
|
Income
taxes
|
53
|
|
|
60
|
|
|
314
|
|
|
258
|
|
Net earnings
|
117
|
|
|
219
|
|
|
895
|
|
|
823
|
|
Less: Net earnings
attributable to noncontrolling interest
|
14
|
|
|
10
|
|
|
46
|
|
|
41
|
|
Net earnings
attributable to W.W. Grainger, Inc.
|
$
|
103
|
|
|
$
|
209
|
|
|
$
|
849
|
|
|
$
|
782
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.89
|
|
|
$
|
3.71
|
|
|
$
|
15.39
|
|
|
$
|
13.82
|
|
Diluted
|
$
|
1.88
|
|
|
$
|
3.68
|
|
|
$
|
15.32
|
|
|
$
|
13.73
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
53.8
|
|
|
56.1
|
|
|
54.7
|
|
|
56.1
|
|
Diluted
|
54.1
|
|
|
56.4
|
|
|
54.9
|
|
|
56.5
|
|
Diluted Earnings Per
Share
|
|
|
|
|
|
|
|
Net earnings as
reported
|
$
|
103
|
|
|
$
|
209
|
|
|
$
|
849
|
|
|
$
|
782
|
|
Earnings allocated to
participating securities
|
(1)
|
|
|
(1)
|
|
|
(7)
|
|
|
(6)
|
|
Net earnings
available to common shareholders
|
$
|
102
|
|
|
$
|
208
|
|
|
$
|
842
|
|
|
$
|
776
|
|
Weighted average
shares adjusted for dilutive securities
|
54.1
|
|
|
56.4
|
|
|
54.9
|
|
|
56.5
|
|
Diluted earnings per
share
|
$
|
1.88
|
|
|
$
|
3.68
|
|
|
$
|
15.32
|
|
|
$
|
13.73
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In millions of
dollars)
|
|
|
|
|
(Unaudited)
|
|
|
Assets
|
December 31,
2019
|
|
December 31,
2018
|
Cash and cash
equivalents
|
$
|
360
|
|
|
$
|
538
|
|
Accounts receivable –
net
|
1,425
|
|
|
1,385
|
|
Inventories -
net
|
1,655
|
|
|
1,541
|
|
Prepaid expenses and
other assets
|
104
|
|
|
83
|
|
Prepaid income
taxes
|
11
|
|
|
10
|
|
Total current
assets
|
3,555
|
|
|
3,557
|
|
Property, buildings
and equipment – net
|
1,400
|
|
|
1,352
|
|
Deferred income
taxes
|
11
|
|
|
12
|
|
Goodwill
|
429
|
|
|
424
|
|
Intangibles - net
(2)
|
304
|
|
|
460
|
|
Other assets
(1)
|
306
|
|
|
68
|
|
Total
assets
|
$
|
6,005
|
|
|
$
|
5,873
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Short-term
debt
|
$
|
55
|
|
|
$
|
49
|
|
Current maturities of
long-term debt
|
246
|
|
|
81
|
|
Trade accounts
payable
|
719
|
|
|
678
|
|
Accrued compensation
and benefits
|
228
|
|
|
262
|
|
Accrued contributions
to employees' profit-sharing plans (3)
|
85
|
|
|
133
|
|
Accrued expenses
(1)
|
318
|
|
|
269
|
|
Income taxes
payable
|
27
|
|
|
29
|
|
Total current
liabilities
|
1,678
|
|
|
1,501
|
|
Long-term
debt
|
1,914
|
|
|
2,090
|
|
Deferred income taxes
and tax uncertainties
|
106
|
|
|
103
|
|
Other non-current
liabilities (1)
|
247
|
|
|
86
|
|
Shareholders' equity
(4)
|
2,060
|
|
|
2,093
|
|
Total liabilities and
shareholders' equity
|
$
|
6,005
|
|
|
$
|
5,873
|
|
|
|
(1)
|
Other assets
increased $223 million, Accrued expenses increased $58 million and
Other non-current liabilities increased $171 million due to the
adoption of Accounting Standards Update (ASU) 2016-02,
Leases.
|
(2)
|
Intangibles - net
decreased $120 million as the results of an intangible asset
impairment at the Cromwell business in the U.K., located in other
businesses.
|
(3)
|
Accrued contributions
to employees' profit-sharing plans decreased $48 million primarily
due to a reduction in variable compensation.
|
(4)
|
Common stock
outstanding as of December 31, 2019 was 53,687,528 compared with
55,862,360 shares at December 31, 2018, primarily due to share
repurchases.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
(In millions of
dollars)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
117
|
|
|
$
|
219
|
|
|
$
|
895
|
|
|
$
|
823
|
|
|
|
|
|
|
|
|
|
Provision for losses
on accounts receivable
|
5
|
|
|
—
|
|
|
12
|
|
|
7
|
|
Deferred income taxes
and tax uncertainties
|
(15)
|
|
|
(3)
|
|
|
4
|
|
|
7
|
|
Depreciation and
amortization
|
58
|
|
|
65
|
|
|
229
|
|
|
257
|
|
Net gains from sales
of assets and divestitures
|
(1)
|
|
|
(2)
|
|
|
(6)
|
|
|
(6)
|
|
Impairment of
goodwill, intangible and other assets
|
123
|
|
|
14
|
|
|
123
|
|
|
156
|
|
Stock-based
compensation
|
8
|
|
|
11
|
|
|
40
|
|
|
47
|
|
Subtotal
|
178
|
|
|
85
|
|
|
402
|
|
|
468
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
77
|
|
|
93
|
|
|
(42)
|
|
|
(79)
|
|
Inventories
|
(124)
|
|
|
(76)
|
|
|
(106)
|
|
|
(129)
|
|
Prepaid expenses and
other assets
|
(18)
|
|
|
11
|
|
|
(33)
|
|
|
(2)
|
|
Trade accounts
payable
|
(18)
|
|
|
(55)
|
|
|
32
|
|
|
(51)
|
|
Accrued
liabilities
|
53
|
|
|
54
|
|
|
(84)
|
|
|
18
|
|
Income taxes,
net
|
13
|
|
|
(3)
|
|
|
(3)
|
|
|
36
|
|
Other non-current
liabilities
|
(6)
|
|
|
(14)
|
|
|
(19)
|
|
|
(27)
|
|
Subtotal
|
(23)
|
|
|
10
|
|
|
(255)
|
|
|
(234)
|
|
Net cash provided by
operating activities
|
272
|
|
|
314
|
|
|
1,042
|
|
|
1,057
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions to
property, buildings, equipment and intangibles
|
(58)
|
|
|
(70)
|
|
|
(221)
|
|
|
(239)
|
|
Proceeds from sales
of assets
|
1
|
|
|
10
|
|
|
17
|
|
|
86
|
|
Equity method
proceeds (investment)
|
—
|
|
|
(1)
|
|
|
2
|
|
|
(13)
|
|
Net cash used in
investing activities
|
(57)
|
|
|
(61)
|
|
|
(202)
|
|
|
(166)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Net increase
(decrease) in lines of credit
|
1
|
|
|
(1)
|
|
|
5
|
|
|
(5)
|
|
Net decrease in
long-term debt
|
6
|
|
|
(7)
|
|
|
(42)
|
|
|
(96)
|
|
Proceeds from stock
options exercised
|
30
|
|
|
2
|
|
|
49
|
|
|
181
|
|
Payments for employee
taxes withheld from stock awards
|
(1)
|
|
|
(1)
|
|
|
(11)
|
|
|
(12)
|
|
Purchases of treasury
stock
|
(100)
|
|
|
(142)
|
|
|
(700)
|
|
|
(425)
|
|
Cash dividends
paid
|
(86)
|
|
|
(84)
|
|
|
(328)
|
|
|
(316)
|
|
Other, net
|
2
|
|
|
—
|
|
|
4
|
|
|
3
|
|
Net cash used in
financing activities
|
(148)
|
|
|
(233)
|
|
|
(1,023)
|
|
|
(670)
|
|
Exchange rate effect
on cash and cash equivalents
|
7
|
|
|
1
|
|
|
5
|
|
|
(10)
|
|
Net change in cash
and cash equivalents
|
74
|
|
|
21
|
|
|
(178)
|
|
|
211
|
|
Cash and cash
equivalents at beginning of period
|
286
|
|
|
517
|
|
|
538
|
|
|
327
|
|
Cash and cash
equivalents at end of period
|
$
|
360
|
|
|
$
|
538
|
|
|
$
|
360
|
|
|
$
|
538
|
|
SUPPLEMENTAL INFORMATION - CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In millions of dollars, except for per share amounts)
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 gross profit,
adjusted gross profit margin, adjusted operating earnings, adjusted
operating margin, adjusted net earnings, adjusted tax rate,
adjusted diluted earnings per share and sales in constant currency.
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 gross profit, adjusted
gross profit margin, adjusted operating earnings, adjusted
operating margin, adjusted net earnings, adjusted tax rate 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.
This press release also includes certain non-GAAP
forward-looking information. The company believes that a
quantitative reconciliation of such forward-looking information to
the most comparable financial measure calculated and presented in
accordance with GAAP cannot be made available without unreasonable
efforts. A reconciliation of these non-GAAP financial measures
would require the company to predict the timing and likelihood of
future restructurings, asset impairments, and other charges.
Neither of these forward-looking measures, nor their probable
significance, can be quantified with a reasonable degree of
accuracy. Accordingly, the most directly comparable forward-looking
GAAP measures are not provided.
The reconciliations provided below reconcile GAAP financial
measures to the non-GAAP financial measures: , adjusted gross
profit, adjusted gross profit margin, adjusted operating earnings,
adjusted operating margin, adjusted net earnings, adjusted tax rate
and adjusted diluted earnings per share:
In
millions
|
Three Months Ended
December 31,
|
|
Twelve
Months Ended December 31,
|
|
2019
|
Gross
Profit %
|
|
2018
|
Gross
Profit %
|
|
2019
|
Gross
Profit %
|
|
2018
|
Gross
Profit %
|
Gross profit
reported
|
$
|
1,082
|
|
38.0
|
%
|
|
$
|
1,066
|
|
38.6
|
%
|
|
$
|
4,397
|
|
38.3
|
%
|
|
$
|
4,348
|
|
38.7
|
%
|
Restructuring, net
|
(1)
|
|
—
|
|
|
(1)
|
|
(0.1)
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
Gross profit
adjusted
|
$
|
1,081
|
|
38.0
|
%
|
|
$
|
1,065
|
|
38.5
|
%
|
|
$
|
4,397
|
|
38.3
|
%
|
|
$
|
4,348
|
|
38.7
|
%
|
|
|
|
|
In
millions
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
Operating
Margin %
|
|
2018
|
Operating
Margin %
|
|
2019
|
Operating
Margin %
|
|
2018
|
Operating
Margin %
|
Operating earnings
reported
|
$
|
181
|
|
6.4
|
%
|
|
$
|
290
|
|
10.5
|
%
|
|
$
|
1,262
|
|
11.0
|
%
|
|
$
|
1,158
|
|
10.3
|
%
|
Restructuring, net
and impairment charges
|
126
|
|
4.4
|
|
|
20
|
|
0.7
|
|
|
126
|
|
1.1
|
|
|
186
|
|
1.7
|
|
Operating earnings
adjusted
|
$
|
307
|
|
10.8
|
%
|
|
$
|
310
|
|
11.2
|
%
|
|
$
|
1,388
|
|
12.1
|
%
|
|
$
|
1,344
|
|
12.0
|
%
|
SUPPLEMENTAL
INFORMATION - CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited)
|
(In millions of
dollars, except for per share amounts)
|
|
In
millions
|
Three Months
Ended
December 31,
|
|
|
Twelve Months
Ended
December 31,
|
|
|
2019
|
|
2018
|
%
|
|
2019
|
|
2018
|
%
|
Net earnings
reported
|
$
|
103
|
|
|
$
|
209
|
|
(51)
|
%
|
|
$
|
849
|
|
|
$
|
782
|
|
8
|
%
|
Restructuring, net
and impairment charges
|
109
|
|
|
16
|
|
|
|
109
|
|
|
170
|
|
|
Net earnings
adjusted
|
$
|
212
|
|
|
$
|
225
|
|
(6)
|
%
|
|
$
|
958
|
|
|
$
|
952
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share reported
|
$
|
1.88
|
|
|
$
|
3.68
|
|
(49)
|
%
|
|
$
|
15.32
|
|
|
$
|
13.73
|
|
12
|
%
|
Pretax restructuring,
net and impairment charges
|
2.30
|
|
|
0.36
|
|
|
|
2.26
|
|
|
3.26
|
|
|
Tax effect
(1)
|
(0.30)
|
|
|
(0.08)
|
|
|
|
(0.29)
|
|
|
(0.29)
|
|
|
Total, net of
tax
|
2.00
|
|
|
0.28
|
|
|
|
1.97
|
|
|
2.97
|
|
|
Diluted earnings per
share adjusted
|
$
|
3.88
|
|
|
$
|
3.96
|
|
(2)
|
%
|
|
$
|
17.29
|
|
|
$
|
16.70
|
|
4
|
%
|
|
|
(1)
|
The tax impact of
adjustments and impairments are calculated based on the income tax
rate in each applicable jurisdiction, subject to deductibility
limitations and the company's ability to realize the associated tax
benefits.
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2019
|
|
2018
|
|
Bps
impact
|
|
2019
|
|
2018
|
|
Bps
impact
|
Tax rate
reported
|
31.7
|
%
|
|
21.5
|
%
|
|
1,020
|
|
|
26.0
|
%
|
|
23.9
|
%
|
|
210
|
|
Restructuring, net and
impairment charges
|
(8.0)
|
|
|
0.1
|
|
|
|
|
(1.2)
|
|
|
(2.2)
|
|
|
|
Tax rate
adjusted
|
23.7
|
%
|
|
21.6
|
%
|
|
210
|
|
|
24.8
|
%
|
|
21.7
|
%
|
|
310
|
|
View original
content:http://www.prnewswire.com/news-releases/grainger-reports-results-for-the-2019-fourth-quarter-and-full-year-300995695.html
SOURCE W.W. Grainger, Inc.