CHICAGO, July 18, 2018 /PRNewswire/ -- Grainger
(NYSE: GWW) today reported results for the 2018 second quarter
ended June 30, 2018. Sales of
$2.9 billion increased
9.4 percent versus $2.6 billion
in the second quarter of 2017. Operating earnings for the quarter
of $344 million were up 50 percent
versus $229 million in the 2017 second quarter. Earnings per
share of $4.16 increased 149 percent
versus $1.67 in the 2017 second
quarter. Adjusted earnings per share of $4.37 increased 59 percent versus $2.74 in the 2017 second quarter. The improvement
in earnings was driven mostly by higher sales, operating expense
leverage, a lower tax rate and a lower share count.
Quarterly Financial Summary
($ in
millions)
|
Q2
2018
|
Q2
2017
|
Change
|
|
Reported
|
Adjusted
(1)
|
Reported
|
Adjusted
(1)
|
Reported
|
Adjusted
(1)
|
Net sales
|
$2,860
|
$2,860
|
$2,615
|
$2,615
|
9%
|
9%
|
Gross
profit
|
$1,111
|
$1,112
|
$1,040
|
$1,043
|
7%
|
7%
|
Operating
earnings
|
$344
|
$359
|
$229
|
$291
|
50%
|
23%
|
Net
earnings
|
$237
|
$249
|
$98
|
$161
|
142%
|
54%
|
Diluted earnings per
share
|
$4.16
|
$4.37
|
$1.67
|
$2.74
|
149%
|
59%
|
|
|
|
|
|
|
|
Gross profit
margin
|
38.8%
|
38.9%
|
39.8%
|
39.9%
|
(100) bps
|
(100) bps
|
Operating
margin
|
12.0%
|
12.6%
|
8.8%
|
11.1%
|
320 bps
|
150 bps
|
(1) Results
exclude restructuring as shown on pages 8-9 of this release.
Reconciliations of the adjusted measures reflected in this table to
the most directly comparable GAAP measures are provided on pages
8-9 of this release.
|
"The second quarter exceeded our expectations, with strong
growth from U.S. large and medium customers, gross profit that was
better than anticipated and meaningful operating expense leverage.
We continue to gain share across both large and medium customers
and acquire medium customers amid a strong economy. In Canada, we are on schedule with the business
turnaround. And the single channel and international businesses
also improved operating performance," said DG Macpherson, Chairman
and Chief Executive Officer. "Based on our performance and
momentum, we are raising our sales and earnings per share guidance
for the year."
The company raised its 2018 sales and earnings per share
guidance for the year and now expects sales growth of 5.5 to 8.5
percent and earnings per share of $15.05 to $16.05.
The company's previous 2018 guidance, communicated on April 19, 2018, was sales growth of 5 to 8
percent and earnings per share of $14.30 to $15.30.
2018
Guidance
|
|
As
of 4/19/2018
|
As
of 7/18/2018
|
Sales ($
billions)
|
$10.9 -
$11.3
|
$11.0 -
$11.3
|
% vs. prior
year
|
5% to 8%
|
5.5% to
8.5%
|
Adjusted operating
earnings ($
billions)
|
$1.2 -
$1.3
|
$1.3 -
$1.4
|
% vs. prior
year
|
6% to 14%
|
10% to 18%
|
Adjusted operating
margin
|
11.1% -
11.5%
|
11.5% -
11.9%
|
bps vs. prior
year
|
10 to 50
|
50 to 90
|
Adjusted earnings per
share
|
$14.30 -
$15.30
|
$15.05 -
$16.05
|
% vs. prior
year
|
25% to 33%
|
32% to 40%
|
Company
Sales increased 9.4 percent in the 2018
second quarter versus the 2017 second quarter, driven by a
9 percentage point increase from volume and 1 percentage point
from foreign exchange, partially offset by a 1 percentage point
decline from the divestiture of a specialty business.
Reported gross profit margin for the quarter was 38.8 percent
vs. 39.8 percent in the 2017 second quarter. Adjusted gross profit
margin for the quarter was 38.9 percent vs. 39.9 percent in the
prior year. The lower gross profit margin includes a 0.5 percentage
point decline from implementation of the Financial Accounting
Standards Board's new revenue recognition standard that primarily
reclassifies certain costs related to KeepStock services from
operating expenses to cost of goods sold and a 0.2 percentage point
decline from the timing of the company's annual sales meeting. When
normalized for the impact of the revenue recognition standard and
the timing of the sales meeting, gross profit margin for the 2018
second quarter was 39.2 percent, a decline of 0.3 percentage points
versus the 2017 second quarter.
Company operating earnings of $344
million for the 2018 second quarter increased 50 percent
versus $229 million in the 2017
second quarter. Adjusted operating earnings of $359 million increased 23 percent versus
$291 million in 2017. The improvement
in earnings was driven by higher sales and strong operating expense
leverage. Reported operating margin for the quarter was 12.0
percent, an increase of 3.2 percentage points versus the prior
year. Adjusted operating margin was 12.6 percent, an increase of
1.5 percentage points versus the prior year.
For the second quarter, the effective tax rate in 2018 was
23.4 percent versus 48.4 percent in the 2017 second quarter.
The decrease was primarily due to the 2017 U.S. tax legislation and
the 2017 impact from the wind-down of the Colombia business. The company is currently
projecting an effective tax rate of 23 to 26 percent for the year
2018. The second quarter contained a benefit from the tax treatment
of stock-based awards. Estimated tax benefits from stock-based
awards are not included in the full year projected tax rate.
Cash Flow
Due to strong operating performance, operating cash flow was
$248 million in the 2018 second
quarter versus $191 million in the
2017 second quarter, representing a 30 percent increase versus the
2017 second quarter. Free cash flow in the quarter was $211 million versus $160
million in the prior year, representing a 32 percent
increase. The company used the cash generated during the quarter to
invest in the business and return cash to shareholders through
share repurchase and dividends. Capital expenditures in the 2018
second quarter were $54 million. In
the quarter, Grainger returned $111 million to shareholders
through $83 million in dividends and
$28 million to buy back 96,000 shares
of stock.
Webcast
Grainger will conduct a live conference call and webcast at
11:00 a.m. Eastern Daylight Time on
July 18, 2018, to discuss the second
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.grainger.com/investor.
About Grainger
W.W. Grainger, Inc., with 2017 sales of $10.4 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.grainger.com/investor to view
information about the company, including a supplement regarding
2018 second quarter results. The Grainger website
also includes more information through 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." These
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.
These 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 expectations 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
technologies; the implementation, timing and success 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; disruption of information technology or data security
systems; general industry or market conditions; general global
economic conditions; currency exchange rate fluctuations; market
volatility; commodity price volatility; labor shortages; facilities
disruptions or shutdowns; higher fuel costs or disruptions in
transportation services; natural and other catastrophes;
unanticipated weather conditions; loss of key members of
management; our ability to operate, integrate and leverage acquired
businesses; changes in credit ratings; changes in effective tax
rates 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.
CONSOLIDATED
STATEMENTS OF EARNINGS (Unaudited)
|
(In thousands of
dollars, except for per share amounts)
|
|
|
Three Months
Ended
June 30,
|
Six
Months Ended
June 30,
|
|
2018
|
|
2017
|
2018
|
|
2017
|
Net sales
|
$
|
2,860,212
|
|
|
$
|
2,615,269
|
|
$
|
5,626,613
|
|
|
$
|
5,156,398
|
|
Cost of goods
sold
|
1,749,271
|
|
|
1,575,313
|
|
3,423,913
|
|
|
3,097,250
|
|
Gross profit
|
1,110,941
|
|
|
1,039,956
|
|
2,202,700
|
|
|
2,059,148
|
|
Selling, general and
administrative expense
|
766,955
|
|
|
810,876
|
|
1,523,884
|
|
|
1,537,567
|
|
Operating
earnings
|
343,986
|
|
|
229,080
|
|
678,816
|
|
|
521,581
|
|
Other income and
(expense)
|
|
|
|
|
|
|
Interest
income
|
1,014
|
|
|
465
|
|
1,642
|
|
|
658
|
|
Interest
expense
|
(22,924)
|
|
|
(22,468)
|
|
(47,589)
|
|
|
(41,181)
|
|
Equity method
investment
|
(3,043)
|
|
|
(6,121)
|
|
(14,540)
|
|
|
(14,495)
|
|
Other non-operating
income
|
4,327
|
|
|
6,240
|
|
12,025
|
|
|
11,306
|
|
Total other expense,
net
|
(20,626)
|
|
|
(21,884)
|
|
(48,462)
|
|
|
(43,712)
|
|
Earnings before income
taxes
|
323,360
|
|
|
207,196
|
|
630,354
|
|
|
477,869
|
|
Income
taxes
|
75,617
|
|
|
100,237
|
|
141,826
|
|
|
188,057
|
|
Net earnings
|
247,743
|
|
|
106,959
|
|
488,528
|
|
|
289,812
|
|
Net earnings
attributable to noncontrolling interest
|
10,762
|
|
|
9,038
|
|
20,012
|
|
|
17,147
|
|
Net earnings
attributable to W.W. Grainger, Inc.
|
$
|
236,981
|
|
|
$
|
97,921
|
|
$
|
468,516
|
|
|
$
|
272,665
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
-Basic
|
$
|
4.19
|
|
|
$
|
1.68
|
|
$
|
8.29
|
|
|
$
|
4.64
|
|
-Diluted
|
$
|
4.16
|
|
|
$
|
1.67
|
|
$
|
8.23
|
|
|
$
|
4.61
|
|
Average number of
shares outstanding
|
|
-Basic
|
56,110
|
|
|
58,013
|
|
56,087
|
|
|
58,363
|
|
-Diluted
|
56,553
|
|
|
58,287
|
|
56,479
|
|
|
58,741
|
|
Diluted Earnings Per
Share
|
|
|
|
|
|
|
Net earnings as
reported
|
$
|
236,981
|
|
|
$
|
97,921
|
|
$
|
468,516
|
|
|
$
|
272,665
|
|
Earnings allocated to
participating securities
|
(1,806)
|
|
|
(643)
|
|
(3,797)
|
|
|
(2,125)
|
|
Net earnings
available to common shareholders
|
$
|
235,175
|
|
|
$
|
97,278
|
|
$
|
464,719
|
|
|
$
|
270,540
|
|
Weighted average
shares adjusted for dilutive securities
|
56,553
|
|
|
58,287
|
|
56,479
|
|
|
58,741
|
|
Diluted earnings per
share
|
$
|
4.16
|
|
|
$
|
1.67
|
|
$
|
8.23
|
|
|
$
|
4.61
|
|
|
NOTE: Results for
2017 have been restated due to adoption of Accounting Standards
Update (ASU) 2017-07, Compensation Retirement Benefits (Topic
715): Improving the Presentation of Net Periodic Pension Cost and
Net Periodic Postretirement Benefit Cost. The ASU effectively
increases Selling, general and administrative expense, lowering
Operating earnings, and decreases Total other expense, net, with no
impact on Net earnings or Earnings per share. Restated 2017
quarterly and annual financials can be found at
www.grainger.com/investor.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(In thousands of
dollars)
|
|
Assets
|
June 30,
2018
|
|
December 31,
2017
|
Cash and cash
equivalents
|
$
|
312,461
|
|
|
$
|
326,876
|
|
Accounts receivable –
net
|
1,462,603
|
|
|
1,325,186
|
|
Inventories
|
1,464,181
|
|
|
1,429,199
|
|
Prepaid expenses and
other assets
|
106,672
|
|
|
86,667
|
|
Prepaid income
taxes
|
27,085
|
|
|
38,061
|
|
Total current
assets
|
3,373,002
|
|
|
3,205,989
|
|
Property, buildings
and equipment – net
|
1,359,908
|
|
|
1,391,967
|
|
Deferred income
taxes
|
27,619
|
|
|
22,362
|
|
Goodwill
|
535,121
|
|
|
543,903
|
|
Intangibles –
net
|
533,641
|
|
|
569,115
|
|
Other
assets
|
75,281
|
|
|
70,918
|
|
Total
assets
|
$
|
5,904,572
|
|
|
$
|
5,804,254
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Short-term
debt
|
$
|
54,222
|
|
|
$
|
55,603
|
|
Current maturities of
long-term debt
|
30,172
|
|
|
38,709
|
|
Trade accounts
payable
|
735,266
|
|
|
731,582
|
|
Accrued compensation
and benefits
|
234,791
|
|
|
254,560
|
|
Accrued contributions
to employees' profit sharing plans (1)
|
59,375
|
|
|
92,682
|
|
Accrued
expenses
|
272,238
|
|
|
313,766
|
|
Income taxes
payable
|
38,431
|
|
|
19,759
|
|
Total current
liabilities
|
1,424,495
|
|
|
1,506,661
|
|
Long-term
debt
|
2,210,358
|
|
|
2,248,036
|
|
Deferred income taxes
and tax uncertainties
|
117,209
|
|
|
111,710
|
|
Employment-related
and other non-current liabilities
|
102,241
|
|
|
110,114
|
|
Shareholders' equity
(2)
|
2,050,269
|
|
|
1,827,733
|
|
Total liabilities and
shareholders' equity
|
$
|
5,904,572
|
|
|
$
|
5,804,254
|
|
|
|
(1)
|
Accrued contributions
to employees' profit sharing plans decreased $33 million primarily
due to the annual cash contributions to the profit sharing
plan.
|
(2)
|
Common stock
outstanding as of June 30, 2018 was 56,133,815 compared with
56,328,863 shares at December 31, 2017, primarily due to share
repurchases.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
(In thousands of
dollars)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
247,743
|
|
|
$
|
106,959
|
|
|
$
|
488,528
|
|
|
$
|
289,812
|
|
Provision for losses
on accounts receivable
|
66
|
|
|
8,851
|
|
|
3,618
|
|
|
12,769
|
|
Deferred income taxes
and tax uncertainties
|
4,736
|
|
|
293
|
|
|
3,076
|
|
|
(7,339)
|
|
Depreciation and
amortization
|
63,800
|
|
|
65,946
|
|
|
127,731
|
|
|
128,195
|
|
Net (gains) losses
from sale of assets and non-cash charges
|
(8,417)
|
|
|
23,503
|
|
|
(14,131)
|
|
|
12,537
|
|
Stock-based
compensation
|
16,181
|
|
|
13,273
|
|
|
27,833
|
|
|
20,030
|
|
Losses from equity
method investment
|
3,043
|
|
|
6,121
|
|
|
14,540
|
|
|
14,495
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(53,927)
|
|
|
(41,425)
|
|
|
(148,148)
|
|
|
(136,844)
|
|
Inventories
|
(47,476)
|
|
|
2,110
|
|
|
(44,340)
|
|
|
29,936
|
|
Prepaid expenses and
other assets
|
7,800
|
|
|
1,711
|
|
|
(25,151)
|
|
|
(24,232)
|
|
Trade accounts
payable
|
(7,819)
|
|
|
18,766
|
|
|
5,425
|
|
|
36,817
|
|
Other current
liabilities
|
42,575
|
|
|
45,182
|
|
|
(60,089)
|
|
|
(18,989)
|
|
Current income taxes
payable, net
|
(15,300)
|
|
|
(66,867)
|
|
|
28,544
|
|
|
6,360
|
|
Accrued
employment-related benefits cost
|
(6,655)
|
|
|
2,135
|
|
|
(13,605)
|
|
|
3,655
|
|
Other –
net
|
1,604
|
|
|
4,674
|
|
|
1,008
|
|
|
4,976
|
|
Net cash provided by
operating activities
|
247,954
|
|
|
191,232
|
|
|
394,839
|
|
|
372,178
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions to
property, buildings and equipment and intangibles
|
(53,934)
|
|
|
(52,379)
|
|
|
(103,083)
|
|
|
(131,147)
|
|
Proceeds from sales
of assets
|
17,293
|
|
|
21,452
|
|
|
43,280
|
|
|
69,758
|
|
Equity method
investment
|
(5,871)
|
|
|
(6,233)
|
|
|
(13,986)
|
|
|
(13,300)
|
|
Other –
net
|
—
|
|
|
(146)
|
|
|
—
|
|
|
(146)
|
|
Net cash used in
investing activities
|
(42,512)
|
|
|
(37,306)
|
|
|
(73,789)
|
|
|
(74,835)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Net (decrease)
increase in commercial paper
|
(89,886)
|
|
|
(304,787)
|
|
|
18
|
|
|
(269,841)
|
|
Borrowings under
lines of credit
|
11,959
|
|
|
20,491
|
|
|
22,144
|
|
|
30,374
|
|
Payments against
lines of credit
|
(2,385)
|
|
|
(8,869)
|
|
|
(22,308)
|
|
|
(18,036)
|
|
Net (decrease)
increase of long-term debt
|
(10,878)
|
|
|
410,191
|
|
|
(36,063)
|
|
|
407,873
|
|
Proceeds from stock
options exercised
|
28,131
|
|
|
719
|
|
|
87,134
|
|
|
27,064
|
|
Payments for employee
taxes withheld from stock awards
|
(14,148)
|
|
|
(5,094)
|
|
|
(29,026)
|
|
|
(16,719)
|
|
Purchase of treasury
stock
|
(27,961)
|
|
|
(154,416)
|
|
|
(200,878)
|
|
|
(313,562)
|
|
Cash dividends
paid
|
(82,878)
|
|
|
(79,519)
|
|
|
(155,132)
|
|
|
(151,637)
|
|
Other –
net
|
2,740
|
|
|
—
|
|
|
2,740
|
|
|
—
|
|
Net cash used in
financing activities
|
(185,306)
|
|
|
(121,284)
|
|
|
(331,371)
|
|
|
(304,484)
|
|
Exchange rate effect
on cash and cash equivalents
|
(9,690)
|
|
|
3,622
|
|
|
(4,094)
|
|
|
8,060
|
|
Net change in cash
and cash equivalents
|
10,446
|
|
|
36,264
|
|
|
(14,415)
|
|
|
919
|
|
Cash and cash
equivalents at beginning of year
|
302,015
|
|
|
238,801
|
|
|
326,876
|
|
|
274,146
|
|
Cash and cash
equivalents at end of period
|
$
|
312,461
|
|
|
$
|
275,065
|
|
|
$
|
312,461
|
|
|
$
|
275,065
|
|
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 gross profit,
adjusted gross profit margin, adjusted operating earnings, adjusted
operating margin, adjusted net earnings and adjusted diluted
earnings per share. Free cash flow is not defined under GAAP. The
company defines free cash flow as net cash flow provided by
operating activities less purchases of property, buildings and
equipment plus proceeds from the sale of assets. The company
believes free cash flow is meaningful to investors as a useful
measure of performance and the company uses this measure as an
indication of the strength of the company and its ability to
generate cash. 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 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 gross profit, adjusted gross profit
margin, adjusted operating earnings, adjusted operating margin,
adjusted net earnings and adjusted diluted earnings per share with
GAAP financial measures:
|
Three Months Ended
June 30,
|
|
Six Months
Ended June 30,
|
|
2018
|
Gross
Profit %
|
|
2017
|
Gross
Profit %
|
|
2018
|
Gross
Profit %
|
|
2017
|
Gross
Profit %
|
Gross profit
reported
|
$
|
1,110,941
|
|
38.8
|
%
|
|
$
|
1,039,956
|
|
39.8
|
%
|
|
$
|
2,202,700
|
|
39.1
|
%
|
|
$
|
2,059,148
|
|
39.9
|
%
|
Restructuring, net
(1)
|
1,349
|
|
0.1
|
|
|
2,574
|
|
0.1
|
|
|
961
|
|
0.1
|
|
|
2,574
|
|
0.1
|
|
Gross profit
adjusted
|
$
|
1,112,290
|
|
38.9
|
%
|
|
$
|
1,042,530
|
|
39.9
|
%
|
|
$
|
2,203,661
|
|
39.2
|
%
|
|
$
|
2,061,722
|
|
40.0
|
%
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended June 30,
|
|
2018
|
Operating
Margin %
|
|
2017
|
Operating
Margin %
|
|
2018
|
Operating
Margin %
|
|
2017
|
Operating
Margin %
|
Operating earnings
reported
|
$
|
343,986
|
|
12.0
|
%
|
|
$
|
229,080
|
|
8.8
|
%
|
|
$
|
678,816
|
|
12.1
|
%
|
|
$
|
521,581
|
|
10.1
|
%
|
Restructuring, net
(1)
|
15,296
|
|
0.6
|
|
|
62,098
|
|
2.3
|
|
|
23,334
|
|
0.4
|
|
|
56,863
|
|
1.1
|
|
Operating earnings
adjusted
|
$
|
359,282
|
|
12.6
|
%
|
|
$
|
291,178
|
|
11.1
|
%
|
|
$
|
702,150
|
|
12.5
|
%
|
|
$
|
578,444
|
|
11.2
|
%
|
SUPPLEMENTAL
INFORMATION - CONSOLIDATED STATEMENTS OF EARNINGS
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited)
|
(In thousands of
dollars)
|
|
|
Three Months
Ended
June 30,
|
|
|
Six Months
Ended June
30,
|
|
|
2018
|
|
2017
|
%
|
|
2018
|
|
2017
|
%
|
Net earnings
reported
|
$
|
236,981
|
|
|
$
|
97,921
|
|
142
|
%
|
|
$
|
468,516
|
|
|
$
|
272,665
|
|
72
|
%
|
Restructuring, net
(1)
|
11,839
|
|
|
63,209
|
|
|
|
18,034
|
|
|
60,051
|
|
|
Net earnings
adjusted
|
$
|
248,820
|
|
|
$
|
161,130
|
|
54
|
%
|
|
$
|
486,550
|
|
|
$
|
332,716
|
|
46
|
%
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share reported
|
$
|
4.16
|
|
|
$
|
1.67
|
|
149
|
%
|
|
$
|
8.23
|
|
|
$
|
4.61
|
|
79
|
%
|
Pretax restructuring,
net (1)
|
0.27
|
|
|
1.06
|
|
|
|
0.41
|
|
|
0.96
|
|
|
Tax effect
(2)
|
(0.06)
|
|
|
0.01
|
|
|
|
(0.09)
|
|
|
0.05
|
|
|
Total, net of
tax
|
0.21
|
|
|
1.07
|
|
|
|
0.32
|
|
|
1.01
|
|
|
Diluted earnings per
share adjusted
|
$
|
4.37
|
|
|
$
|
2.74
|
|
59
|
%
|
|
$
|
8.55
|
|
|
$
|
5.62
|
|
52
|
%
|
|
|
(1)
|
Second quarter 2018
charges related to restructuring actions and sales of branches in
the United States, restructuring actions in Canada, restructuring
in Other Businesses and the sale of real estate in Unallocated
expense. Second quarter 2017 charges related to restructuring
actions and sales of branches in the United States, branch closures
and other restructuring in Canada and primarily the wind-down of
the business in Colombia in Other Businesses.
|
|
|
(2)
|
The tax impact of
adjustments is 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.
|
Free Cash
Flow
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net cash provided by
operating activities
|
$
|
247,954
|
|
|
$
|
191,232
|
|
|
$
|
394,839
|
|
|
$
|
372,178
|
|
Less:
|
|
|
|
|
|
|
|
Additions to
property, building and equipment
|
53,934
|
|
|
52,379
|
|
|
103,083
|
|
|
131,147
|
|
Add:
|
|
|
|
|
|
|
|
Proceeds from the
sale of assets
|
17,293
|
|
|
21,452
|
|
|
43,280
|
|
|
69,758
|
|
Free Cash
Flow
|
$
|
211,313
|
|
|
$
|
160,305
|
|
|
$
|
335,036
|
|
|
$
|
310,789
|
|
View original
content:http://www.prnewswire.com/news-releases/grainger-reports-results-for-the-2018-second-quarter-300682603.html
SOURCE W.W. Grainger, Inc.