The **sharp increase** in Cash and cash equivalents in Q3 2024 was driven by several factors. First, W.W. Grainger issued a **$500 million bond**, which significantly bolstered its cash balance.  **[GWW_3405081_7]** **[0000277135-24-000173_gww-20240930.htm:23]**  Additionally, the company generated **$611 million in operating cash flow**, reflecting strong operational performance.  **[0000277135-24-000169_gww8kex991q32024.htm:0]** **[0000277135-24-000173_gww-20240930.htm:23]**  Moreover, lower cash outflows for financing activities—despite returning **$328 million to shareholders** through dividends and share repurchases—and **moderate capital expenditures** of **$88 million** further contributed to the increase.  **[0000277135-24-000169_gww8kex991q32024.htm:0]** **[0000277135-24-000169_gww8kex991q32024.htm:10]** **[0000277135-24-000173_gww-20240930.htm:23]** 

What drove the sharp increase in Cash and cash equivalents in Q3 2024?

The spike in **Current maturities of long-term debt** in Q1 2024 was caused by the reclassification of the **1.85% senior notes due 2025** from long-term debt to current maturities, which had a carrying value of **$500 million**.  **[0000277135-24-000059_gww-20240331.htm:7]** **[0000277135-24-000059_gww-20240331.htm:3]** 

What caused the spike in Current maturities of long-term debt in Q1 2024?

The significant drop in **Long-term debt** in Q1 2024 was primarily due to the reclassification of **$500 million of 1.85% senior notes due 2025** from long-term debt to current maturities, reflecting their approaching maturity within 12 months. Additionally, there was a reduction in the **Japanese yen term loan**, which decreased from **$32 million** to **$15 million** as part of its scheduled repayment.  **[0000277135-24-000059_gww-20240331.htm:3]** **[0000277135-24-000059_gww-20240331.htm:7]** 

Why did Long-term debt drop significantly in Q1 2024?

The notable increase in Total assets in Q3 2024 was primarily driven by **a significant rise in cash and cash equivalents**—from **$660 million** at the end of 2023 to **$1,448 million** in Q3 2024—largely due to **strong operating cash flow of $611 million** and a **$500 million issuance of 4.45% senior notes**. Additionally, **growth in accounts receivable** and **prepaid expenses and other current assets** contributed to the higher asset base, along with an increase in the net carrying amount of **capitalized software and intangibles**. These positive changes were partially offset by a decline in inventories from **$2,266 million** to **$2,170 million**.  **[0000277135-24-000173_gww-20240930.htm:3]** **[0000277135-24-000173_gww-20240930.htm:8]** **[0000277135-24-000169_gww8kex991q32024.htm:1]** 

What factors contributed to the notable increase in Total assets in Q3 2024?

87c79ca1598b0b3dc2f3504a741c93f6a6e8aa3e767484cb8fa6e123f447c403

Although net sales in Q4 2023 increased by **5.1%** compared to Q4 2022 to reach **$3,997 million**  **[0000277135-24-000003_gww8kex991q42023.htm:0]** **[0000277135-24-000003_gww8kex991q42023.htm:11]** **[GWW_3371760_6]** , there was a decline from Q3 2023’s **$4,208 million**. The documents indicate that one factor contributing to this quarter‐to‐quarter decline was **holiday-related softness** at the quarter’s end, which slightly tempered overall growth.  **[GWW_3371760_6]**  There isn’t additional detail provided on other specific causes for the quarterly decline.

Why did net sales decline in Q4 2023?

In Q4 2023, **reported operating earnings were $557 million  **[0000277135-24-000011_gww-20231231.htm:48]** **, while on an adjusted basis they were **$583 million  **[0000277135-24-000003_gww8kex991q42023.htm:0]** **[GWW_3371760_6]** **. The lower reported figure was primarily driven by the inclusion of a **$26 million pre-tax loss** related to the divestiture of E&R Industrial Sales, Inc..  **[0000277135-24-000003_gww8kex991q42023.htm:12]** **[0000277135-24-000003_gww8kex991q42023.htm:0]**  Although underlying performance was aided by **5.1% net sales growth** and improved SG&A efficiency, these positive factors were offset in the reported results by the impact of the divestiture and the fact that the prior year’s one-time **$35 million expense** was not repeated. This mix of factors led to the lower reported operating earnings in Q4 2023.  **[0000277135-24-000003_gww8kex991q42023.htm:0]** **[GWW_3371760_6]** 

What led to the lower operating earnings in Q4 2023?

The lower net earnings in Q4 2023 were primarily due to a **$22 million after-tax loss** on the divestiture of the E&R Industrial Sales subsidiary, which negatively impacted the reported net earnings despite underlying improvements in sales and operating margins.  **[0000277135-24-000003_gww8kex991q42023.htm:12]** **[0000277135-24-000003_gww8kex991q42023.htm:0]** 

Why were net earnings lower in Q4 2023?

282e4598c2fa8844d3036f4358267d0ff42b9e663e0968e9c155881f1c171a51

In Q4 2023, **operating cash flow** was notably high because of several factors. **Net earnings** increased to **$412 million** from **$397 million** in Q4 2022, which positively impacted the cash flow from operations. Additionally, there were **favorable changes in working capital**—accounts receivable decreased by **$253 million** (compared to a **$51 million** decrease in Q4 2022), and the inventory reduction was more aligned with improved operational efficiency. Moreover, **non-cash adjustments** such as depreciation, amortization, and stock-based compensation further contributed to the higher cash flow. These combined factors led to Q4 2023's operating cash flow reaching **$604 million** compared to **$360 million** in the prior year.  **[0000277135-24-000003_gww8kex991q42023.htm:9]** 

Why was Operating Cash Flow so high in Q4 2023?

The significant increase in **Operating Cash Flow** in FY 2023 was driven primarily by **higher earnings**—with net earnings rising from **$1,613 million in FY 2022** to **$1,903 million in FY 2023**—and **favorable changes in working capital**. Specifically, improvements included **less negative inventory changes** (from **$(412) million** to **$(16) million**) and **better management of accounts receivable** (improving from **$(436) million** to **$(98) million**), along with more efficient timing of cash receipts and payments. Additionally, **non-cash adjustments** such as increased depreciation and amortization and stock-based compensation further bolstered the operating cash flow, culminating in a **$698 million increase** from FY 2022 to FY 2023.  **[0000277135-24-000011_gww-20231231.htm:50]** **[0000277135-24-000011_gww-20231231.htm:41]** 

What drove the significant increase in Operating Cash Flow in FY 2023?

The jump in operating cash flow in Q1 2024 was primarily driven by **favorable working capital changes**. Specifically, **trade accounts payable** increased dramatically by **$202 million**, compared to only **$53 million** in Q1 2023; **inventories** saw a significant decrease of **$76 million** versus a modest decline of **$4 million** in Q1 2023; and **accrued liabilities** decreased by only **$35 million** instead of the **$193 million** decline noted in Q1 2023. In addition, **improved timing of cash payments** and more efficient inventory management also contributed to the increase in cash flow.  **[20240425CG96836:5]** **[0000277135-24-000059_gww-20240331.htm:18]** 

Why did Operating Cash Flow jump in Q1 2024?

The drop in Operating Cash Flow in **Q2 2024** was primarily caused by **higher income tax payments** (a negative impact of **$(169) million** in Q2 2024 compared to **$(130) million** in Q2 2023) and **lower contributions from trade accounts payable** (a negative impact of **$(18) million** in Q2 2024 versus a positive impact of **$94 million** in Q2 2023). These were partially offset by improvements in accounts receivable management, as well as higher depreciation and increased stock-based compensation.  **[20240801CG73933:5]** **[0000277135-24-000131_gww8kex991q22024.htm:8]** 

What caused the drop in Operating Cash Flow in Q2 2024?

The recovery in **Operating Cash Flow** in **Q3 2024** was driven by several factors. **Favorable changes in working capital** played a significant role, notably an improvement in **accounts receivable**, which shifted from a negative impact in Q3 2023 to a positive contribution in Q3 2024, and stable inventory management that provided a slight benefit. Additionally, **higher net earnings** supported the improved cash flow, and **other adjustments**—including increases in **depreciation and amortization** as well as expanded contributions from **deferred income taxes and tax uncertainties**—further bolstered the cash flow recovery.  **[20241031CG44873:5]** **[0000277135-24-000169_gww8kex991q32024.htm:8]** **[0000277135-24-000173_gww-20240930.htm:23]** 

What factors contributed to the recovery in Operating Cash Flow in Q3 2024?

5ff98c9fe38c774a958a1c75c10502f03e19040aa0e0a9f8d0561c995eeb1243

Cash and cash equivalents (USD, millions)

Accounts receivable (net) (USD, millions)

Inventories - net (USD, millions)

Prepaid expenses and other current assets (USD, millions)

Total current assets (USD, millions)

Property, buildings and equipment - net (USD, millions)

Goodwill (USD, millions)

Intangibles - net (USD, millions)

Operating lease right-of-use assets (USD, millions)

Other assets (USD, millions)

Total assets (USD, millions)

Current maturities of long-term debt (USD, millions)

Trade accounts payable (USD, millions)

Accrued compensation and benefits (USD, millions)

Operating lease liability, current portion (USD, millions)

Accrued expenses (USD, millions)

Income taxes payable (USD, millions)

Total current liabilities (USD, millions)

Long-term debt (USD, millions)

Long-term operating lease liability (USD, millions)

Deferred income taxes and tax uncertainties (USD, millions)

Other non-current liabilities (USD, millions)

Total shareholders' equity (USD, millions)

Total liabilities and shareholders' equity (USD, millions)

03f4ad1a2821ed6f3431d8bb2a834d777c7698d9a8b6473df8c5e24cfc4332ec

Net sales (USD, millions)

Cost of goods sold (USD, millions)

Gross profit (USD, millions)

Selling, general and administrative expenses (USD, millions)

Operating earnings (USD, millions)

Interest expense – net (USD, millions)

Other – net (USD, millions)

Total other expense – net (USD, millions)

Earnings before income taxes (USD, millions)

Income tax provision (USD, millions)

Net earnings (USD, millions)

Less net earnings attributable to noncontrolling interest (USD, millions)

Net earnings attributable to W.W. Grainger, Inc. (USD, millions)

b08acabdd030aa575588183bebd0f92374e76e4782608e971f8c2aa2ac86fce2

Net earnings [USD, millions]

Provision for credit losses [USD, millions]

Depreciation and amortization [USD, millions]

Non-cash lease expense [USD, millions]

Stock-based compensation [USD, millions]

Net cash provided by operating activities [USD, millions]

Capital expenditures [USD, millions]

Proceeds from sale of assets [USD, millions]

Other – net [USD, millions]

Net cash used in investing activities [USD, millions]

Proceeds from debt [USD, millions]

Payments of debt [USD, millions]

Proceeds from stock options exercised [USD, millions]

Payments for employee taxes withheld from stock awards [USD, millions]

Purchases of treasury stock [USD, millions]

Cash dividends paid [USD, millions]

Net cash used in financing activities [USD, millions]

Exchange rate effect on cash and cash equivalents [USD, millions]

Net change in cash and cash equivalents [USD, millions]

Deferred income taxes and tax uncertainties [USD, millions]

Cash and cash equivalents at beginning of year [USD, millions]

Cash and cash equivalents at end of period [USD, millions]

e818ddc56dedd518ba89806133c620377efc984c4c4d9f74ed665bcc59187fd8

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Units]

EPS - Diluted [USD, Units]

a5f56505a9d20c4faaaa14617c97c71fc8be570b97b21169f7e0f26253e1bbf5

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from Debt

Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

840a29127f773a23396ace96c8eae63ff1b77885171a2a76684603c0180ddc47

1fb02b32bcd7d397c569f3902f7f37f3d439f12c012bbc4c3d2919b0393fbc3f

Daily, organic constant currency net sales for High-Touch Solutions N.A. (USD millions)

Daily, organic constant currency net sales yoy growth for High-Touch Solutions N.A. (percentage)

Daily, organic constant currency net sales for Endless Assortment (USD millions)

Daily, organic constant currency net sales yoy growth for Endless Assortment (percentage)

Daily, organic constant currency net sales for Total Company (USD millions)

Daily, organic constant currency net sales yoy growth for Total Company (percentage)

e8aee5ad177f9540325876333d6d0a5dd07c5e1c012c5bc7450b8502c2696eec

United States

Japan

Canada

Other foreign countries

Other Businesses

Total Revenue

388a9d05b0922836f9504d198d1209c5b4a012505a44f5bdac3b6bc2afc07205

High-Touch Solutions N.A.

Endless Assortment

Other

1f99e0f5c305b3485b8764e38234d854be0280554ece6ba1f30bc1e8a4c9ef49

W.W. GRAINGER (GWW)

Financials