W.W. GRAINGER, INC., 10-Q filed on 7/23/2020
Quarterly Report
v3.20.2
COVER
 6 Months Ended
Jun. 30, 2020
shares
Cover [Abstract]  
Document Type 10-Q
Document Quarterly Report true
Document Period End Date Jun. 30, 2020
Document Transition Report false
Entity File Number 1-5684
Entity Registrant Name W.W. Grainger, Inc.
Entity Incorporation, State or Country Code IL
Entity Tax Identification Number 36-1150280
Entity Address, Address Line One 100 Grainger Parkway,
Entity Address, City or Town Lake Forest,
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60045-5201
City Area Code 847
Local Phone Number 535-1000
Title of 12(b) Security Common Stock
Trading Symbol GWW
Security Exchange Name NYSE
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Large Accelerated Filer
Entity Small Business false
Entity Emerging Growth Company false
Entity Shell Company false
Entity Common Stock, Shares Outstanding 53,571,736
Entity Central Index Key 0000277135
Current Fiscal Year End Date --12-31
Document Fiscal Year Focus 2020
Document Fiscal Period Focus Q2
Amendment Flag false
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($)
shares in Millions, $ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Statement [Abstract]        
Net sales $ 2,837 $ 2,893 $ 5,838 $ 5,692
Cost of goods sold 1,821 1,772 3,701 3,476
Gross profit 1,016 1,121 2,137 2,216
Selling, general and administrative expenses 811 741 1,773 1,473
Operating earnings 205 380 364 743
Other (income) expense:        
Interest expense, net 28 21 49 40
Other, net (7) (7) (11) (14)
Total other expense, net 21 14 38 26
Earnings before income taxes 184 366 326 717
Income tax provision 55 94 12 183
Net earnings 129 272 314 534
Less: Net earnings attributable to noncontrolling interest 15 12 27 21
Net earnings attributable to W.W. Grainger, Inc. $ 114 $ 260 $ 287 $ 513
Earnings per share:        
Basic (in dollars per share) $ 2.11 $ 4.69 $ 5.31 $ 9.19
Diluted (in dollars per share) $ 2.10 $ 4.67 $ 5.29 $ 9.14
Weighted average number of shares outstanding:        
Basic (in shares) 53.5 55.1 53.6 55.4
Diluted (in shares) 53.7 55.4 53.8 55.7
Cash dividends paid per share (in dollars per share) $ 1.44 $ 1.44 $ 2.88 $ 2.80
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net earnings $ 129 $ 272 $ 314 $ 534
Other comprehensive earnings (losses):        
Foreign currency translation adjustments, net of reclassification 64 19 6 23
Postretirement benefit plan reclassification, net of tax benefit of $1, $1, $2, and $2 million, respectively (3) (2) (6) (5)
Other 3 0 4 0
Total other comprehensive earnings (losses) 64 17 4 18
Comprehensive earnings, net of tax 193 289 318 552
Less: Comprehensive earnings (losses) attributable to noncontrolling interest        
Net earnings 15 12 27 21
Foreign currency translation adjustments (2) 5 1 3
Total comprehensive earnings (losses) attributable to noncontrolling interest 13 17 28 24
Comprehensive earnings attributable to W.W. Grainger, Inc. $ 180 $ 272 $ 290 $ 528
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (PARENTHETICAL) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Postretirement benefit plan reclassification, net of tax benefit $ 1 $ 1 $ 2 $ 2
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
CURRENT ASSETS    
Cash and cash equivalents $ 1,603 $ 360
Accounts receivable (less allowances for doubtful accounts of $25 and $21, respectively) 1,460 1,425
Inventories - net 1,695 1,655
Prepaid expenses and other current assets 127 104
Prepaid income taxes 33 11
Total current assets 4,918 3,555
PROPERTY, BUILDINGS AND EQUIPMENT - NET 1,365 1,400
DEFERRED INCOME TAXES 10 11
GOODWILL 365 429
INTANGIBLES - NET 223 304
OTHER ASSETS 313 306
TOTAL ASSETS 7,194 6,005
CURRENT LIABILITIES    
Short-term debt 15 55
Current maturities of long-term debt 21 246
Trade accounts payable 770 719
Accrued compensation and benefits 212 228
Accrued contributions to employees’ profit sharing plans 33 85
Accrued expenses 312 318
Income taxes payable 25 27
Total current liabilities 1,388 1,678
LONG-TERM DEBT (less current maturities) 3,301 1,914
DEFERRED INCOME TAXES AND TAX UNCERTAINTIES 103 106
OTHER NON-CURRENT LIABILITIES 250 247
SHAREHOLDERS' EQUITY    
Cumulative Preferred Stock – $5 par value – 12,000,000 shares authorized; none issued nor outstanding 0 0
Common Stock – $0.50 par value – 300,000,000 shares authorized; 109,659,219 shares issued 55 55
Additional contributed capital 1,198 1,182
Retained earnings 8,536 8,405
Accumulated other comprehensive losses (151) (154)
Treasury stock, at cost – 56,087,483 and 55,971,691 shares, respectively (7,709) (7,633)
Total W.W. Grainger, Inc. shareholders’ equity 1,929 1,855
Noncontrolling interest 223 205
Total shareholders' equity 2,152 2,060
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,194 $ 6,005
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts $ 25 $ 21
Cumulative preferred stock, par value (in dollars per share) $ 5 $ 5
Cumulative preferred stock, shares authorized 12,000,000 12,000,000
Cumulative preferred stock, shares issued 0 0
Cumulative preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.50 $ 0.50
Common stock, shares authorized 300,000,000 300,000,000
Common stock, shares issued 109,659,219 109,659,219
Treasury stock, shares at cost 56,087,483 55,971,691
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net earnings $ 314 $ 534
Provision for credit losses 14 6
Deferred income taxes and tax uncertainties 0 12
Depreciation and amortization 95 113
Net losses (gains) from sales of assets and business divestitures 110 (5)
Impairment of goodwill, intangibles and long-lived assets 177 0
Stock-based compensation 26 23
Subtotal 422 149
Change in operating assets and liabilities:    
Accounts receivable (113) (118)
Inventories (144) 12
Prepaid expenses and other assets (37) (22)
Trade accounts payable 79 100
Accrued liabilities (32) (187)
Income taxes - net (18) (7)
Other non-current liabilities 5 (11)
Subtotal (260) (233)
Net cash provided by operating activities 476 450
CASH FLOWS FROM INVESTING ACTIVITIES:    
Additions to property, buildings, equipment and intangibles (93) (107)
Proceeds from sales of assets and business divestitures 13 14
Other (2) 2
Net cash used in investing activities (82) (91)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Borrowings under lines of credit 12 19
Payments against lines of credit (50) (16)
Proceeds from Issuance of Long-term Debt 1,500 0
Payments of long-term debt (347) (34)
Proceeds from stock options exercised 28 16
Payments for employee taxes withheld from stock awards (14) (10)
Purchases of treasury stock (101) (400)
Cash dividends paid (164) (163)
Other - net 0 2
Net cash provided by (used in) financing activities 864 (586)
Exchange rate effect on cash and cash equivalents (15) 4
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,243 (223)
Cash and cash equivalents at beginning of year 360 538
Cash and cash equivalents at end of period $ 1,603 $ 315
v3.20.2
CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY - USD ($)
$ in Millions
Total
Common Stock [Member]
Additional Contributed Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Earnings (Losses)
Treasury Stock [Member]
Noncontrolling Interest [Member]
Beginning balance at Dec. 31, 2018 $ 2,093 $ 55 $ 1,134 $ 7,869 $ (171) $ (6,966) $ 172
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Stock based compensation 6   3     3  
Purchases of treasury stock (135)         (135)  
Net earnings 262     253     9
Other comprehensive (losses) earnings 1       3   (2)
Capital contribution 2           2
Cash dividends paid (77)     (77)      
Ending balance at Mar. 31, 2019 2,152 55 1,137 8,045 (168) (7,098) 181
Beginning balance at Dec. 31, 2018 2,093 55 1,134 7,869 (171) (6,966) 172
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net earnings 534            
Other comprehensive (losses) earnings 18            
Ending balance at Jun. 30, 2019 2,114 55 1,152 8,226 (156) (7,354) 191
Beginning balance at Mar. 31, 2019 2,152 55 1,137 8,045 (168) (7,098) 181
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Stock based compensation 24   15     9  
Purchases of treasury stock (265)         (265)  
Net earnings 272     260     12
Other comprehensive (losses) earnings 17       12   5
Cash dividends paid (86)     (79)     (7)
Ending balance at Jun. 30, 2019 2,114 55 1,152 8,226 (156) (7,354) 191
Beginning balance at Dec. 31, 2019 2,060 55 1,182 8,405 (154) (7,633) 205
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Stock based compensation 23   10     13  
Purchases of treasury stock (100)         (100)  
Net earnings 185     173     12
Other comprehensive (losses) earnings (60)       (63)   3
Cash dividends paid (78)     (78)      
Ending balance at Mar. 31, 2020 2,030 55 1,192 8,500 (217) (7,720) 220
Beginning balance at Dec. 31, 2019 2,060 55 1,182 8,405 (154) (7,633) 205
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net earnings 314            
Other comprehensive (losses) earnings 4            
Ending balance at Jun. 30, 2020 2,152 55 1,198 8,536 (151) (7,709) 223
Beginning balance at Mar. 31, 2020 2,030 55 1,192 8,500 (217) (7,720) 220
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Stock based compensation 17   6     11  
Purchases of treasury stock (1)           (1)
Net earnings 129     114     15
Other comprehensive (losses) earnings 64       66   (2)
Cash dividends paid (87)     (78)     (9)
Ending balance at Jun. 30, 2020 $ 2,152 $ 55 $ 1,198 $ 8,536 $ (151) $ (7,709) $ 223
v3.20.2
CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY (PARENTHETICAL) - $ / shares
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Stockholders' Equity (Parentheticals) [Abstract]        
Cash dividends paid per share (in dollars per share) $ 1.44 $ 1.44 $ 2.88 $ 2.80
v3.20.2
BACKGROUND AND BASIS OF PRESENTATION
 6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BACKGROUND AND BASIS OF PRESENTATION BACKGROUND AND BASIS OF PRESENTATION
 
W.W. Grainger, Inc. is a broad line, business-to-business distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America, Japan and Europe. In this report, the words “Company” or “Grainger” mean W.W. Grainger, Inc. and its subsidiaries, except where the context makes it clear that the reference is only to W.W. Grainger, Inc. itself and not its subsidiaries.
 
Consistent with the Company's strategic focus on broad-line MRO distribution in key markets, on June 30, 2020, Grainger divested the Fabory business in Europe (Fabory). Accordingly, the Company's condensed consolidated statements of earnings, comprehensive earnings and cash flows include Fabory results through the date of divestiture. The proceeds from the divestiture will be used to fund general corporate needs and capital investments. During the second quarter of 2020, Grainger recognized a net loss of approximately $109 million (presented within Selling, general and administrative expenses (SG&A)) as a result of this divestiture, which included accumulated foreign currency translation losses of $48 million, that were reclassified from Accumulated other comprehensive earnings (losses) (AOCE) to SG&A.

The Company's Condensed Consolidated Financial Statements (Financial Statements) and the related notes are unaudited and should be read in conjunction with the consolidated financial statements and associated notes for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 20, 2020 (the 2019 Form 10-K). The Condensed Consolidated Balance Sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all of the disclosures required by accounting principles generally accepted in the United States of America (U.S.) for complete financial statements.
 
The unaudited financial information reflects all adjustments (primarily consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of the statements contained in this report.
v3.20.2
UPDATE TO SIGNIFICANT ACCOUNTING POLICIES
 6 Months Ended
Jun. 30, 2020
UPDATE TO SIGNIFICANT ACCOUNTING POLICIES [Abstract]  
UPDATE TO SIGNIFICANT ACCOUNTING POLICIES UPDATE TO SIGNIFICANT ACCOUNTING POLICIESOther than the implemented accounting policies related to the allowances for credit losses per the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-13 (see Notes 3 and 5 to the Financial Statements), change in depreciation estimates (see Note 6 to the Financial Statements) and accounting for derivative instruments (see Note 10 to the Financial Statements), there have been no material changes to the Company’s significant accounting policies disclosed in the 2019 Form 10-K, Part II, Item 8.
v3.20.2
NEW ACCOUNTING STANDARDS
 6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
NEW ACCOUNTING STANDARDS NEW ACCOUNTING STANDARDS
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments as modified by subsequently issued ASUs 2018-19, 2019-04, 2019-05, 2019-11 and 2020-02. This ASU requires estimating all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company adopted this ASU effective January 1, 2020. While the adoption of this ASU did not have a material impact on the Company's Financial Statements, it required changes to the Company’s process of estimating expected credit losses on trade receivables. See Note 5 for further information on the Company’s allowance for credit losses.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU clarifies and simplifies accounting for income taxes by eliminating certain exceptions for intraperiod tax allocation principles, the methodology for calculating income tax rates in an interim period, and recognition of deferred taxes for outside basis differences in an investment, among other updates. The effective date of this ASU is for fiscal years and interim periods beginning after December 15, 2020. The Company is currently evaluating the potential impact of this ASU on the Financial Statements.

In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), Clarifying the Interactions between Topic 321, Topic 323 and Topic 815. This ASU simplifies the understanding and application of the
codification topics by eliminating inconsistencies and providing clarifications. The effective date of this ASU is for fiscal years and interim periods beginning after December 15, 2020. The Company is currently evaluating the potential impact of this ASU on the Financial Statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. The amendments in this update represent changes to clarify or improve the codification and correct unintended application. This ASU was effective immediately upon issuance and its adoption did not have a material impact on the Company's Financial Statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update provides optional expedients and exceptions for applying generally accepted accounting principles to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is currently evaluating the potential impact of this ASU on the Financial Statements.
v3.20.2
REVENUE
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
Company revenue is primarily comprised of MRO product sales and related activities, such as freight and services. Total service revenue is not material and accounted for approximately 1% of the Company's revenue for the three and six months ended June 30, 2020 and 2019, respectively.

Grainger serves a large number of customers in diverse industries, which are subject to different economic and market specific factors. The Company's presentation of revenue by industry most reasonably depicts how the nature, amount, timing and uncertainty of Company revenue and cash flows are affected by economic and market specific factors. The following table presents the Company's percentage of revenue by reportable segment and by major customer industry:
Three Months Ended June 30,
20202019
U.S.CanadaTotal Company (2)U.S.CanadaTotal Company (2)
Government24 %10 %17 %19 %6 %14 %
Heavy Manufacturing15 %16 %15 %19 %20 %17 %
Light Manufacturing13 %7 %10 %13 %6 %11 %
Transportation5 %10 %5 %5 %8 %5 %
Healthcare11 %— %8 %7 %— %5 %
Commercial7 %10 %6 %10 %9 %8 %
Retail/Wholesale10 %3 %8 %8 %4 %7 %
Contractors9 %10 %7 %10 %11 %8 %
Natural Resources2 %29 %3 %3 %32 %4 %
Other (1)4 %5 %21 %6 %4 %21 %
Total100 %100 %100 %100 %100 %100 %
Percent of Total Company Revenue72 %4 %100 %72 %5 %100 %
Six Months Ended June 30,
20202019
U.S.CanadaTotal Company (2)U.S.CanadaTotal Company (2)
Government21 %10 %16 %18 %6 %13 %
Heavy Manufacturing17 %17 %16 %19 %21 %18 %
Light Manufacturing13 %6 %10 %13 %6 %11 %
Transportation5 %10 %5 %6 %8 %5 %
Healthcare10 %— %7 %7 %— %5 %
Commercial8 %9 %7 %10 %9 %8 %
Retail/Wholesale10 %4 %8 %8 %4 %7 %
Contractors9 %9 %7 %10 %10 %8 %
Natural Resources2 %29 %3 %3 %32 %4 %
Other (1)5 %6 %21 %6 %4 %21 %
Total net sales to external customers100 %100 %100 %100 %100 %100 %
Percent of Total Company Revenue72 %4 %100 %72 %5 %100 %

(1) Other category primarily includes revenue from individual customers not aligned to major industry segment, including small businesses and consumers, and intersegment net sales.
(2) Total Company includes other businesses, which include the Company's endless assortment businesses and operations in the United Kingdom (U.K.) and Mexico and accounts for approximately 24% of revenue for the three and six months ended June 30, 2020 and 23% of revenue for the three and six months ended June 30, 2019.
Total accrued sales returns were approximately $26 million and $25 million as of June 30, 2020 and December 31, 2019, respectively and are reported as a reduction of Accounts receivable, net. Total accrued sales incentives were approximately $54 million and $57 million as of June 30, 2020 and December 31, 2019 and are reported as part of Accrued expenses. The Company had no material unsatisfied performance obligations, contract assets or liabilities as of June 30, 2020 and December 31, 2019.
v3.20.2
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES
 6 Months Ended
Jun. 30, 2020
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES [Abstract]  
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES The Company’s accounts receivable arise primarily from sales on credit to customers. The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivables. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity quality indicators for industry groups, customer classes or individual customers.
v3.20.2
PROPERTY, BUILDINGS AND EQUIPMENT
 6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
PROPERTY, BUILDINGS AND EQUIPMENT PROPERTY, BUILDINGS AND EQUIPMENT
Property, buildings and equipment consisted of the following (in millions of dollars):
As of
June 30, 2020December 31, 2019
Land$329  $332  
Building, structures and improvements1,317  1,329  
Furniture, fixtures, machinery and equipment1,824  1,832  
Property, buildings and equipment$3,470  $3,493  
Less: Accumulated depreciation and amortization and impairment2,105  2,093  
Property, buildings and equipment, net$1,365  $1,400  

Grainger has historically depreciated certain property, building, and equipment using both the declining balance and sum-of-the-years’ digits methods over estimated useful lives of approximately thirty years. In accordance with its policy, the Company periodically reviews information impacting the pattern of consumption for its capital assets and useful lives to ensure that estimates of depreciation expenses are appropriate. The Company’s investment in its supply chain infrastructure and technology triggered the review of these patterns of consumption. Pursuant to the review and effective January 1, 2020, the method of estimating depreciation for these assets was changed to the straight-line method and useful lives to forty and fifty years. The Company determined that these changes in depreciation method and useful lives were considered a change in accounting estimate effected by a change in accounting principle, and as such have been accounted for on a prospective basis. Grainger believes the changes to the straight-line method and useful lives are appropriate estimations of the Company's current patterns of economic consumption of its capital assets and appropriately match current revenues and costs over updated estimates of the assets' useful lives. The effect of these changes resulted in a decrease of $7 million and $15 million to depreciation expense for the three and six months ended June 30, 2020, respectively.
During the first quarter of 2020, the Company recorded approximately $44 million of impairment charges in SG&A in connection with the impairment of Fabory’s long-lived assets, including property, buildings and equipment for approximately $24 million and right-to-use (ROU) assets for approximately $20 million (presented in Other assets) due to the factors discussed in Note 7. The Company divested Fabory during the second quarter of 2020 (see Note 1).
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS
 6 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND INTANGIBLE ASSETS
Canada Business
Given the continued slowdowns in global oil markets and the economic repercussions from the COVID-19 pandemic in Canada, qualitative tests performed in the second quarter of 2020 indicated the existence of impairment indicators for the Canada business. As such, quantitative tests were performed to evaluate whether any impairment of goodwill was necessary.

Based on the result of the quantitative tests, the Company concluded that there was no impairment of goodwill. The enterprise value of the Canada business at June 30, 2020 exceeded its carrying value by more than 25%, which is a 10 percentage point decrease since the date of the last quantitative test, December 31, 2019. Based on the most recent impairment test of the Canada business and respective sensitivity analysis, it was noted that an increase of approximately 3% in the pre-tax discount rate or approximately 1.5% decrease in revenue long-term growth rate projections, would cause the Canada business enterprise value to fall to the level of its carrying value and thus trigger an impairment.

The Company will continue to monitor business plans for the Canada business throughout 2020 to determine the need for interim impairment evaluations. Changes in assumptions regarding future business performance and macroeconomic conditions, particularly the COVID-19 pandemic and global oil prices, may negatively impact demand generation over a long period, future cash flows and enterprise valuations, which could result in future impairments of goodwill and intangible assets for the Canada business.
Fabory Business
During the first quarter of 2020, the Company recorded impairment charges totaling $58 million attributable to all of Fabory's goodwill and tradenames. Concurrently, consistent with the circumstances leading to the goodwill and tradenames' impairment, the Company performed a recoverability and fair value test of Fabory’s long-lived assets, including property, buildings and equipment and customer lists and relationships and concluded to impair those assets. The impairments of these assets were driven primarily by revenue slowdown in key Fabory markets, gross profit pressures and a flat-to-declining operating margin against a backdrop of industrial sector declines across Europe, which was further amplified by the long-term implications of the COVID-19 pandemic, among other factors. The Company divested Fabory during the second quarter of 2020 (see Note 1).

The balances and changes in the carrying amount of Goodwill (net of cumulative goodwill impairments) by segment are as follows (in millions of dollars):
United StatesCanadaOther businessesTotal
Balance at January 1, 2019$192  $120  $112  $424  
Translation—  6  (1) 5  
Balance at December 31, 2019192  126  111  429  
Impairment—  —  (58) (58) 
Translation—  (5) (1) (6) 
Balance at June 30, 2020$192  $121  $52  $365  
The cumulative goodwill impairments as of June 30, 2020, were $137 million and consisted of $32 million in the Canada business and $105 million in Other businesses. There were no impairments to goodwill for the three and six months ended June 30, 2020 related to current businesses in Grainger's portfolio.
The balances in Intangible assets, net are as follows (in millions of dollars):
June 30, 2020December 31, 2019
Weighted average lifeGross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Customer lists and relationships
11.8 years$221  $166  $55  $401  $301  $100  
Trademarks, trade names and other
14.2 years34  20  14  36  20  16  
Non-amortized trade names and other
Indefinite27  —  27  100  38  62  
Capitalized software
4.2 years652  525  127  626  500  126  
Total intangible assets6.7 years$934  $711  $223  $1,163  $859  $304  
v3.20.2
RESTRUCTURING
 6 Months Ended
Jun. 30, 2020
Restructuring and Related Activities [Abstract]  
RESTRUCTURING RESTRUCTURINGThe Company continues to evaluate performance and take restructuring actions across all businesses to improve operating cost leverage. In the three and six months ended June 30, 2020, the Company recorded restructuring charges of approximately $1 million and $8 million, respectively. These charges primarily consisted of involuntary employee termination costs in the U.S. and Canada business, net of gains from the sales of branches and are included in SG&A. In the three and six months ended June 30, 2019, restructuring activity was not material. The reserve balance as of June 30, 2020 and December 31, 2019 was approximately $10 million and is primarily included in Accrued compensation and benefits. The remaining amounts are expected to be paid through 2020.
v3.20.2
SHORT-TERM AND LONG-TERM DEBT
 6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
SHORT-TERM AND LONG-TERM DEBT SHORT-TERM AND LONG-TERM DEBT
During the first quarter of 2020, the Company entered into several financing transactions:

•In February 2020, the Company issued $500 million of unsecured 1.85% Senior Notes (1.85% Notes) and used the proceeds to repay the British pound term loan, Euro term loan and the Canadian dollar revolving credit facility, and to fund general working capital needs.

•In connection with the 1.85% Notes, in February 2020, the Company entered into derivative instrument agreements to manage its risks associated with interest rates of the 1.85% Notes and foreign currency fluctuations related to the financing of international operations. See Note 10 for further discussion of these derivative instruments and the Company's hedge accounting policies.

•In February 2020, the Company entered into a five-year unsecured credit agreement pursuant to which the Company may obtain loans in various currencies on a revolving basis in an aggregate amount not exceeding the U.S. Dollar equivalent of $1.25 billion ($1.25 billion credit facility), which may be increased from time to time up to $1.875 billion at the request of the Company, subject to obtaining additional commitments and other customary conditions. The $1.25 billion credit facility replaced the Company's former $750 million unsecured revolving credit facility, originated in October 2017, which was scheduled to mature in October 2022.

•In March 2020, the Company received approximately $1 billion after drawing down on its $1.25 billion credit facility as a proactive measure to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 pandemic.

Short-term debt consisted of outstanding lines of credit of $15 million and $55 million as of June 30, 2020 and December 31, 2019, respectively.

Long-term debt, including current maturities and debt issuance costs and discounts, net, consisted of the following (in millions of dollars):
As of June 30, 2020As of December 31, 2019
Carrying ValueFair Value (3)Carrying ValueFair Value (3)
4.60% senior notes due 2045$1,000  $1,260  $1,000  $1,194  
3.75% senior notes due 2046400  441  400  416  
4.20% senior notes due 2047400  478  400  449  
1.85% senior notes due 2025 (1)500  524  —  —  
$1.25 billion credit facility (2)1,000  1,000  —  —  
British pound term loan—  —  170  170  
Euro term loan—  —  123  123  
Canadian dollar revolving credit facility—  —  46  46  
Other49  49  42  42  
Subtotal (4)3,349  3,752  2,181  2,440  
Less current maturities(21) (21) (246) (246) 
Debt issuance costs and discounts, net of amortization(27) (27) (21) (21) 
Long-term debt (less current maturities)$3,301  $3,704  $1,914  $2,173  

(1) The 1.85% Notes mature in February 2025 and they require no principal payments until the maturity date and interest is payable semi-annually on February 15 and August 15, beginning in August 2020. Prior to January 2025, the Company may redeem the 1.85% Notes in whole at any time or in part from time to time at a “make-whole” redemption price. This redemption price is calculated by reference to the then-current yield on a
U.S. treasury security with a maturity comparable to the remaining term of the 1.85% Notes plus 10 basis points, together with accrued and unpaid interest, if any, at the redemption date. Additionally, if the Company experiences specific kinds of changes in control, it will be required to make an offer to purchase the 1.85% Notes at 101% of their principal amount plus accrued and unpaid interest, if any, at the date of purchase. On or after January 15, 2025, the Company may redeem the 1.85% Notes in whole at any time or in part from time to time at 100% of their principal amount, together with accrued and unpaid interest, if any, to the redemption date. Costs and discounts of approximately $5 million associated with the issuance of the 1.85% Notes, representing underwriting fees and other expenses, have been recorded as a contra-liability within Long-term debt and are being amortized to interest expense, net over the term of the 1.85% Notes.

(2) The $1.25 billion credit facility matures in February 2025. Borrowings under the credit facility bear interest, at the Company’s option, either at (a) the Eurocurrency rate for specified interest periods plus a margin determined with reference to the rating on the Company’s non-credit-enhanced, senior unsecured long-term debt or (b) the base rate, which is the highest of (i) 1%, (ii) the Wall Street Journal prime rate, (iii) the higher of (A) the federal funds rate and (B) the Federal Reserve Bank of New York overnight rate, in each case plus 0.50% per annum or (iv) the Eurocurrency rate for a one month interest period plus 1.00% per annum, plus, in each case, a margin determined with reference to the rating on the Company’s non-credit-enhanced, senior unsecured long-term debt. No principal payments are required on the credit facility until the maturity date.

(3) The estimated fair value of the Company’s senior notes was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as level 2 inputs within the fair value hierarchy. The carrying value of other long-term debt approximates fair value due to their variable interest rates.
(4) The Company's long-term debt instruments include affirmative and negative covenants that are usual and customary for companies with similar credit ratings and do not contain any financial performance covenants. The Company was in compliance with all debt covenants as of June 30, 2020.
v3.20.2
DERIVATIVE INSTRUMENTS
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS DERIVATIVE INSTRUMENTS
The Company maintains various agreements with bank counterparties that permit the Company to enter into "over-the-counter" derivative instrument agreements to manage its risk associated with interest rates and foreign currency fluctuations. In February 2020, the Company entered into certain derivative instrument agreements to manage its risk associated with interest rates of its 1.85% Notes and foreign currency fluctuations in connection with its foreign currency-denominated intercompany borrowings. The Company did not enter into these agreements for trading or speculative purposes.

Accounting for derivative instruments
The Company recognizes all derivative instruments as assets or liabilities in the Condensed Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship.

To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, for a derivative to be designated as a hedge, the risk management objective and strategy must be documented. Hedge documentation must identify the derivative hedging instrument, the asset or liability or forecasted transaction, type of risk to be hedged, and how the effectiveness of the derivative is assessed prospectively and retrospectively. To assess effectiveness, the Company uses statistical methods and qualitative comparisons of critical terms. The extent to which a derivative has been and is expected to continue to be, highly effective at offsetting changes in the fair value or cash flows of the hedged item is assessed and documented periodically. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued.

For those derivative instruments that are designated and qualify as hedging instruments, the Company classifies them as fair value hedges or cash flow hedges.
Fair value hedges
The Company uses fair value hedges primarily to hedge a portion of its fixed-rate long-term debt via interest rate swaps. Changes in the fair value of the interest rate swap, along with the gain or loss on the hedged item, is recorded in earnings under the same line item, interest expense, net. The notional amount of the Company’s outstanding fair value hedges as of June 30, 2020 was $500 million.

Cash flow hedges
The Company uses cash flow hedges primarily to hedge the exposure to variability in forecasted cash flows from foreign currency-denominated intercompany borrowings via cross-currency swaps. Gains or losses on the cross-currency swaps are reported as a component of AOCE and reclassified into earnings in the same period during which the hedged transaction affects earnings. The notional amount of the Company’s outstanding cash flow hedges as of June 30, 2020 was approximately $34 million.

The effect of the Company's fair value and cash flow hedges on the Company's Condensed Consolidated Statement of Earnings for the three and six months ended June 30, 2020 is as follows (in millions of dollars):
Three Months Ended June 30, 2020Six Months Ended June 30, 2020
Interest expense, netOther, netInterest expense, netOther, net
Gain or (loss) recognized in earnings
Fair value hedge:
Hedged item$(4) $—  $(22) $—  
Interest rate swap designated as hedging instrument$4  $—  $22  $—  
Cash flow hedge:
Hedged item$—  $2  $—  $—  
Cross-currency swap designated as hedging instrument$—  $(2) $—  $—  
The effect of the Company’s fair value and cash flow hedges on AOCE for the six months ended June 30, 2020 was not material.

The fair value and carrying amounts of outstanding derivative instruments in the Condensed Consolidated Balance Sheets as of June 30, 2020 was as follows (in millions of dollars):
Balance Sheet ClassificationFair Value and Carrying Amounts
Cross-currency swap
Other assets$—  
Interest rate swap
Other assets$22  

The carrying amount of the liability hedged by the interest rate swap (long-term debt), including the cumulative amount of fair value hedging adjustments, as of June 30, 2020 amounted to $522 million.
The estimated fair values of the Company's derivative instruments were based on quoted market forward rates, which are classified as Level 2 within the fair value hierarchy, and reflect the present value of the amount that the Company would pay for contracts involving the same notional amounts and maturity dates. No adjustments were required during the current period to reflect the counterparty’s’ credit risk and/or the Company’s own nonperformance risk.
v3.20.2
INCOME TAXES
 6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The reconciliations of income tax expense with federal income taxes at the statutory rate are as follows (in millions of dollars):
 Three Months Ended June 30, Six Months Ended June 30,
 2020201920202019
Federal income tax $39  $77  $69  $151  
States income taxes, net of federal benefit6  9  11  19  
Foreign rate difference4  5  6  10  
Fabory Tax Impact, non operating5  —  (76) —  
Change in valuation allowance2  2  4  3  
Other, net(1) 1  (2) —  
Income tax expense$55  94  $12  $183  
Effective tax rate30.2 %25.6 %3.9 %25.5 %

The changes to the Company's effective tax rate (ETR) for the six months ended June 30, 2020 was primarily driven by tax losses in the Company's investment in Fabory per the impairment and internal reorganization of the Company's holdings of Fabory in the first quarter of 2020. The Company divested Fabory during the second quarter of 2020 (see Note 1).

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. The CARES Act did not have a material impact on the Company's consolidated financial condition or results of operations as of and for the six months ended June 30, 2020. The Company has deferred the timing of federal tax estimates and payroll taxes as permitted by the CARES Act.
v3.20.2
SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
Grainger's two reportable segments are the U.S. and Canada. These reportable segments reflect the results of the Company's high-touch businesses in those geographies. Other businesses include the endless assortment businesses, Zoro Tools, Inc. (Zoro) and MonotaRO Co., LTD (MonotaRO), and smaller high-touch businesses in the U.K. and Mexico. These businesses individually do not meet the criteria of a reportable segment. Operating segments generate revenue almost exclusively through the distribution of MRO supplies, as service revenues account for approximately 1% of total revenues for each operating segment.

Following is a summary of segment results (in millions of dollars):
 Three Months Ended June 30, 2020
 U.S.CanadaTotal Reportable SegmentsOther businessesTotal
Total net sales$2,169  $107  $2,276  $680  $2,956  
Intersegment net sales(118) —  (118) (1) (119) 
Net sales to external customers$2,051  $107  $2,158  $679  $2,837  
Segment operating earnings$318  $(3) $315  $38  $353  
 Three Months Ended June 30, 2019
 U.S.CanadaTotal Reportable SegmentsOther businessesTotal
Total net sales$2,222  $135  $2,357  $663  $3,020  
Intersegment net sales(127) —  (127) —  (127) 
Net sales to external customers$2,095  $135  $2,230  $663  $2,893  
Segment operating earnings$381  $1  $382  $27  $409  

 Six Months Ended June 30, 2020
 U.S.CanadaTotal Reportable SegmentsOther businessesTotal
Total net sales$4,476  $236  $4,712  $1,378  $6,090  
Intersegment net sales(251) —  (251) (1) (252) 
Net sales to external customers$4,225  $236  4,461  $1,377  $5,838  
Segment operating earnings$658  $(6) $652  $(100) $552  
 Six Months Ended June 30, 2019
 U.S.CanadaTotal Reportable SegmentsOther businessesTotal
Total net sales$4,371  $271  $4,642  $1,296  $5,938  
Intersegment net sales(245) —  (245) (1) (246) 
Net sales to external customers$4,126  $271  $4,397  $1,295  $5,692  
Segment operating earnings$745  $(4) $741  $57  $798  
Following are reconciliations of segment information with the consolidated totals per the Financial Statements (in millions of dollars):
 Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Operating earnings: 
Total operating earnings for reportable segments$315  $382  $652  $741  
Other businesses38  27  (100) 57  
Unallocated expenses(148) (29) (188) (55) 
Total consolidated operating earnings$205  $380  $364  $743  
As of
June 30, 2020December 31, 2019
Assets:
United States$2,919  $2,668  
Canada168  173  
Assets for reportable segments3,087  2,841  
Other current and noncurrent assets2,607  3,003  
Unallocated assets1,500  161  
Total consolidated assets$7,194  $6,005  
The Company is a broad-line distributor of MRO products and services. Products are regularly added and removed from the Company's inventory. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered, including the evolving list of products stocked and additional products available online but not stocked.

Unallocated amounts include corporate-level support and administrative expenses, corporate-level assets consisting primarily of cash, property, buildings and equipment, intersegment eliminations and other adjustments. Unallocated expenses and assets are not included in any reportable segment.
Assets for reportable segments include net accounts receivable and first-in, first-out inventory, which are reported to the Company's Chief Operating Decision Maker.
v3.20.2
CONTINGENCIES AND LEGAL MATTERS
 6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
CONTINGENCIES AND LEGAL MATTERS CONTINGENCIES AND LEGAL MATTERS
From time to time the Company is involved in various legal and administrative proceedings that are incidental to its
business, including claims related to product liability, safety or compliance, privacy and cybersecurity matters, general negligence, contract disputes, environmental issues, unclaimed property, wage and hour laws, intellectual property, advertising, consumer protection, pricing (including disaster or emergency declaration pricing statutes), employment practices, regulatory compliance, anti-bribery and corruption or other matters and actions brought by employees, consumers, competitors, suppliers, customers, governmental entities and other third parties.

For example, as disclosed in the Company's 2019 Form 10-K, beginning in the fourth quarter of 2019, Grainger, KMCO, LLC (KMCO) and other defendants have been named in several product liability-related lawsuits in the Harris County, Texas District Court relating to an explosion at a KMCO chemical refinery located in Crosby, Harris County, Texas on April 2, 2019. The complaints seek recovery of compensatory and other damages and relief. On May 8, 2020, KMCO filed a voluntary petition in the United States Bankruptcy Court for the Southern District of Texas for relief under Chapter 7 of Title 11 of the United States Bankruptcy Court in the case KMCO, LLC, No. 20-60028. As a result of the Chapter 7 proceedings, the claims against KMCO in the Harris County lawsuits are currently stayed. Grainger is investigating the claims, which are at an early stage, and intends to contest these matters vigorously.
Also, as a government contractor selling to federal, state and local governmental entities, the Company may be subject to governmental or regulatory inquiries or audits or other proceedings, including those related to contract administration or to pricing compliance. While the Company is unable to predict the outcome of any of these matters, it is not expected that the ultimate resolution of any of these matters will have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial condition or results of operations.

From time to time, the Company has also been named, along with numerous other nonaffiliated companies, as a defendant in litigation in various states involving asbestos and/or silica. These lawsuits typically assert claims of personal injury arising from alleged exposure to asbestos and/or silica as a consequence of products manufactured by third parties purportedly distributed by the Company. While several lawsuits have been dismissed in the past based on the lack of product identification, if a specific product distributed by the Company is identified in any pending or future lawsuits, the Company will seek to exercise indemnification remedies against the product manufacturer to the extent available. In addition, the Company believes that a substantial number of these claims are covered by insurance. The Company has entered into agreements with its major insurance carriers relating to the scope, coverage and the costs of defense, of lawsuits involving claims of exposure to asbestos. The Company believes it has strong legal and factual defenses and intends to continue defending itself vigorously in these lawsuits. While the Company is unable to predict the outcome of these proceedings, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on the Company’s consolidated financial condition or results of operations.
v3.20.2
NEW ACCOUNTING STANDARDS (Policies)
 6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Update to Significant Accounting Policies and New Accounting Standards UPDATE TO SIGNIFICANT ACCOUNTING POLICIESOther than the implemented accounting policies related to the allowances for credit losses per the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-13 (see Notes 3 and 5 to the Financial Statements), change in depreciation estimates (see Note 6 to the Financial Statements) and accounting for derivative instruments (see Note 10 to the Financial Statements), there have been no material changes to the Company’s significant accounting policies disclosed in the 2019 Form 10-K, Part II, Item 8.NEW ACCOUNTING STANDARDS
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments as modified by subsequently issued ASUs 2018-19, 2019-04, 2019-05, 2019-11 and 2020-02. This ASU requires estimating all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company adopted this ASU effective January 1, 2020. While the adoption of this ASU did not have a material impact on the Company's Financial Statements, it required changes to the Company’s process of estimating expected credit losses on trade receivables. See Note 5 for further information on the Company’s allowance for credit losses.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU clarifies and simplifies accounting for income taxes by eliminating certain exceptions for intraperiod tax allocation principles, the methodology for calculating income tax rates in an interim period, and recognition of deferred taxes for outside basis differences in an investment, among other updates. The effective date of this ASU is for fiscal years and interim periods beginning after December 15, 2020. The Company is currently evaluating the potential impact of this ASU on the Financial Statements.

In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), Clarifying the Interactions between Topic 321, Topic 323 and Topic 815. This ASU simplifies the understanding and application of the
codification topics by eliminating inconsistencies and providing clarifications. The effective date of this ASU is for fiscal years and interim periods beginning after December 15, 2020. The Company is currently evaluating the potential impact of this ASU on the Financial Statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. The amendments in this update represent changes to clarify or improve the codification and correct unintended application. This ASU was effective immediately upon issuance and its adoption did not have a material impact on the Company's Financial Statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update provides optional expedients and exceptions for applying generally accepted accounting principles to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is currently evaluating the potential impact of this ASU on the Financial Statements.
Accounts Receivable and Allowance for Credit Losses, Policy ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES The Company’s accounts receivable arise primarily from sales on credit to customers. The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivables. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity quality indicators for industry groups, customer classes or individual customers.
v3.20.2
REVENUE (Tables)
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenues The following table presents the Company's percentage of revenue by reportable segment and by major customer industry:
Three Months Ended June 30,
20202019
U.S.CanadaTotal Company (2)U.S.CanadaTotal Company (2)
Government24 %10 %17 %19 %6 %14 %
Heavy Manufacturing15 %16 %15 %19 %20 %17 %
Light Manufacturing13 %7 %10 %13 %6 %11 %
Transportation5 %10 %5 %5 %8 %5 %
Healthcare11 %— %8 %7 %— %5 %
Commercial7 %10 %6 %10 %9 %8 %
Retail/Wholesale10 %3 %8 %8 %4 %7 %
Contractors9 %10 %7 %10 %11 %8 %
Natural Resources2 %29 %3 %3 %32 %4 %
Other (1)4 %5 %21 %6 %4 %21 %
Total100 %100 %100 %100 %100 %100 %
Percent of Total Company Revenue72 %4 %100 %72 %5 %100 %
Six Months Ended June 30,
20202019
U.S.CanadaTotal Company (2)U.S.CanadaTotal Company (2)
Government21 %10 %16 %18 %6 %13 %
Heavy Manufacturing17 %17 %16 %19 %21 %18 %
Light Manufacturing13 %6 %10 %13 %6 %11 %
Transportation5 %10 %5 %6 %8 %5 %
Healthcare10 %— %7 %7 %— %5 %
Commercial8 %9 %7 %10 %9 %8 %
Retail/Wholesale10 %4 %8 %8 %4 %7 %
Contractors9 %9 %7 %10 %10 %8 %
Natural Resources2 %29 %3 %3 %32 %4 %
Other (1)5 %6 %21 %6 %4 %21 %
Total net sales to external customers100 %100 %100 %100 %100 %100 %
Percent of Total Company Revenue72 %4 %100 %72 %5 %100 %

(1) Other category primarily includes revenue from individual customers not aligned to major industry segment, including small businesses and consumers, and intersegment net sales.
(2) Total Company includes other businesses, which include the Company's endless assortment businesses and operations in the United Kingdom (U.K.) and Mexico and accounts for approximately 24% of revenue for the three and six months ended June 30, 2020 and 23% of revenue for the three and six months ended June 30, 2019.
v3.20.2
PROPERTY, BUILDINGS AND EQUIPMENT (Tables)
 6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
PROPERTY, BUILDINGS AND EQUIPMENT
Property, buildings and equipment consisted of the following (in millions of dollars):
As of
June 30, 2020December 31, 2019
Land$329  $332  
Building, structures and improvements1,317  1,329  
Furniture, fixtures, machinery and equipment1,824  1,832  
Property, buildings and equipment$3,470  $3,493  
Less: Accumulated depreciation and amortization and impairment2,105  2,093  
Property, buildings and equipment, net$1,365  $1,400  
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)
 6 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
The balances and changes in the carrying amount of Goodwill (net of cumulative goodwill impairments) by segment are as follows (in millions of dollars):
United StatesCanadaOther businessesTotal
Balance at January 1, 2019$192  $120  $112  $424  
Translation—  6  (1) 5  
Balance at December 31, 2019192  126  111  429  
Impairment—  —  (58) (58) 
Translation—  (5) (1) (6) 
Balance at June 30, 2020$192  $121  $52  $365  
Schedule of Finite-Lived Intangible Assets By Major Class
The balances in Intangible assets, net are as follows (in millions of dollars):
June 30, 2020December 31, 2019
Weighted average lifeGross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Customer lists and relationships
11.8 years$221  $166  $55  $401  $301  $100  
Trademarks, trade names and other
14.2 years34  20  14  36  20  16  
Non-amortized trade names and other
Indefinite27  —  27  100  38  62  
Capitalized software
4.2 years652  525  127  626  500  126  
Total intangible assets6.7 years$934  $711  $223  $1,163  $859  $304  
v3.20.2
SHORT-TERM AND LONG-TERM DEBT (Tables)
 6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Schedule of Long-Term Debt Instruments
Long-term debt, including current maturities and debt issuance costs and discounts, net, consisted of the following (in millions of dollars):
As of June 30, 2020As of December 31, 2019
Carrying ValueFair Value (3)Carrying ValueFair Value (3)
4.60% senior notes due 2045$1,000  $1,260  $1,000  $1,194  
3.75% senior notes due 2046400  441  400  416  
4.20% senior notes due 2047400  478  400  449  
1.85% senior notes due 2025 (1)500  524  —  —  
$1.25 billion credit facility (2)1,000  1,000  —  —  
British pound term loan—  —  170  170  
Euro term loan—  —  123  123  
Canadian dollar revolving credit facility—  —  46  46  
Other49  49  42  42  
Subtotal (4)3,349  3,752  2,181  2,440  
Less current maturities(21) (21) (246) (246) 
Debt issuance costs and discounts, net of amortization(27) (27) (21) (21) 
Long-term debt (less current maturities)$3,301  $3,704  $1,914  $2,173  

(1) The 1.85% Notes mature in February 2025 and they require no principal payments until the maturity date and interest is payable semi-annually on February 15 and August 15, beginning in August 2020. Prior to January 2025, the Company may redeem the 1.85% Notes in whole at any time or in part from time to time at a “make-whole” redemption price. This redemption price is calculated by reference to the then-current yield on a
U.S. treasury security with a maturity comparable to the remaining term of the 1.85% Notes plus 10 basis points, together with accrued and unpaid interest, if any, at the redemption date. Additionally, if the Company experiences specific kinds of changes in control, it will be required to make an offer to purchase the 1.85% Notes at 101% of their principal amount plus accrued and unpaid interest, if any, at the date of purchase. On or after January 15, 2025, the Company may redeem the 1.85% Notes in whole at any time or in part from time to time at 100% of their principal amount, together with accrued and unpaid interest, if any, to the redemption date. Costs and discounts of approximately $5 million associated with the issuance of the 1.85% Notes, representing underwriting fees and other expenses, have been recorded as a contra-liability within Long-term debt and are being amortized to interest expense, net over the term of the 1.85% Notes.

(2) The $1.25 billion credit facility matures in February 2025. Borrowings under the credit facility bear interest, at the Company’s option, either at (a) the Eurocurrency rate for specified interest periods plus a margin determined with reference to the rating on the Company’s non-credit-enhanced, senior unsecured long-term debt or (b) the base rate, which is the highest of (i) 1%, (ii) the Wall Street Journal prime rate, (iii) the higher of (A) the federal funds rate and (B) the Federal Reserve Bank of New York overnight rate, in each case plus 0.50% per annum or (iv) the Eurocurrency rate for a one month interest period plus 1.00% per annum, plus, in each case, a margin determined with reference to the rating on the Company’s non-credit-enhanced, senior unsecured long-term debt. No principal payments are required on the credit facility until the maturity date.

(3) The estimated fair value of the Company’s senior notes was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as level 2 inputs within the fair value hierarchy. The carrying value of other long-term debt approximates fair value due to their variable interest rates.
(4) The Company's long-term debt instruments include affirmative and negative covenants that are usual and customary for companies with similar credit ratings and do not contain any financial performance covenants. The Company was in compliance with all debt covenants as of June 30, 2020.
v3.20.2
DERIVATIVE INSTRUMENTS (Tables)
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments
The effect of the Company's fair value and cash flow hedges on the Company's Condensed Consolidated Statement of Earnings for the three and six months ended June 30, 2020 is as follows (in millions of dollars):
Three Months Ended June 30, 2020Six Months Ended June 30, 2020
Interest expense, netOther, netInterest expense, netOther, net
Gain or (loss) recognized in earnings
Fair value hedge:
Hedged item$(4) $—  $(22) $—  
Interest rate swap designated as hedging instrument$4  $—  $22  $—  
Cash flow hedge:
Hedged item$—  $2  $—  $—  
Cross-currency swap designated as hedging instrument$—  $(2) $—  $—  
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The fair value and carrying amounts of outstanding derivative instruments in the Condensed Consolidated Balance Sheets as of June 30, 2020 was as follows (in millions of dollars):
Balance Sheet ClassificationFair Value and Carrying Amounts
Cross-currency swap
Other assets$—  
Interest rate swap
Other assets$22  
v3.20.2
INCOME TAXES (Tables)
 6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Schedule of Effective Income Tax Rate Reconciliation
The reconciliations of income tax expense with federal income taxes at the statutory rate are as follows (in millions of dollars):
 Three Months Ended June 30, Six Months Ended June 30,
 2020201920202019
Federal income tax $39  $77  $69  $151  
States income taxes, net of federal benefit6  9  11  19  
Foreign rate difference4  5  6  10  
Fabory Tax Impact, non operating5  —  (76) —  
Change in valuation allowance2  2  4  3  
Other, net(1) 1  (2) —  
Income tax expense$55  94  $12  $183  
Effective tax rate30.2 %25.6 %3.9 %25.5 %
v3.20.2
SEGMENT INFORMATION (Tables)
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Summary of Segment Results
Following is a summary of segment results (in millions of dollars):
 Three Months Ended June 30, 2020
 U.S.CanadaTotal Reportable SegmentsOther businessesTotal
Total net sales$2,169  $107  $2,276  $680  $2,956  
Intersegment net sales(118) —  (118) (1) (119) 
Net sales to external customers$2,051  $107  $2,158  $679  $2,837  
Segment operating earnings$318  $(3) $315  $38  $353  
 Three Months Ended June 30, 2019
 U.S.CanadaTotal Reportable SegmentsOther businessesTotal
Total net sales$2,222  $135  $2,357  $663  $3,020  
Intersegment net sales(127) —  (127) —  (127) 
Net sales to external customers$2,095  $135  $2,230  $663  $2,893  
Segment operating earnings$381  $1  $382  $27  $409  

 Six Months Ended June 30, 2020
 U.S.CanadaTotal Reportable SegmentsOther businessesTotal
Total net sales$4,476  $236  $4,712  $1,378  $6,090  
Intersegment net sales(251) —  (251) (1) (252) 
Net sales to external customers$4,225  $236  4,461  $1,377  $5,838  
Segment operating earnings$658  $(6) $652  $(100) $552  
 Six Months Ended June 30, 2019
 U.S.CanadaTotal Reportable SegmentsOther businessesTotal
Total net sales$4,371  $271  $4,642  $1,296  $5,938  
Intersegment net sales(245) —  (245) (1) (246) 
Net sales to external customers$4,126  $271  $4,397  $1,295  $5,692  
Segment operating earnings$745  $(4) $741  $57  $798  
Schedule of Reconciliation of Operating Earnings from Segment to Consolidated
Following are reconciliations of segment information with the consolidated totals per the Financial Statements (in millions of dollars):
 Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Operating earnings: 
Total operating earnings for reportable segments$315  $382  $652  $741  
Other businesses38  27  (100) 57  
Unallocated expenses(148) (29) (188) (55) 
Total consolidated operating earnings$205  $380  $364  $743  
As of
June 30, 2020December 31, 2019
Assets:
United States$2,919  $2,668  
Canada168  173  
Assets for reportable segments3,087  2,841  
Other current and noncurrent assets2,607  3,003  
Unallocated assets1,500  161  
Total consolidated assets$7,194  $6,005  
Schedule of Reconciliation of Assets from Segment to Consolidated
Following are reconciliations of segment information with the consolidated totals per the Financial Statements (in millions of dollars):
 Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Operating earnings: 
Total operating earnings for reportable segments$315  $382  $652  $741  
Other businesses38  27  (100) 57  
Unallocated expenses(148) (29) (188) (55) 
Total consolidated operating earnings$205  $380  $364  $743  
As of
June 30, 2020December 31, 2019
Assets:
United States$2,919  $2,668  
Canada168  173  
Assets for reportable segments3,087  2,841  
Other current and noncurrent assets2,607  3,003  
Unallocated assets1,500  161  
Total consolidated assets$7,194  $6,005  
v3.20.2
BACKGROUND AND BASIS OF PRESENTATION (Details) - Fabory Business [Member] - Discontinued Operations [Member]
$ in Millions
 3 Months Ended
Jun. 30, 2020
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Net loss on divestiture $ 109
Accumulated foreign currency translation losses $ 48
v3.20.2
REVENUE Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2020
Dec. 31, 2019
Disaggregation of Revenue [Line Items]      
Accrued sales returns $ 26 $ 26 $ 25
Accrued sales incentives $ 54 $ 54 $ 57
Service Revenue [Member]      
Disaggregation of Revenue [Line Items]      
Percent of Total Company Revenue 1.00% 1.00%  
v3.20.2
REVENUE (Details)
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 100.00% 100.00% 100.00% 100.00%
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage Of Company-Wide Revenue 100.00% 100.00% 100.00% 100.00%
Government Customer [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 17.00% 14.00% 16.00% 13.00%
Heavy Manufacturing [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 15.00% 17.00% 16.00% 18.00%
Light Manufacturing [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 10.00% 11.00% 10.00% 11.00%
Transportation [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 5.00% 5.00% 5.00% 5.00%
Healthcare Customer [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 8.00% 5.00% 7.00% 5.00%
Commercial [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 6.00% 8.00% 7.00% 8.00%
Retail/Wholesale [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 8.00% 7.00% 8.00% 7.00%
Contractors [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 7.00% 8.00% 7.00% 8.00%
Natural Resources [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 3.00% 4.00% 3.00% 4.00%
Other [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 21.00% 21.00% 21.00% 21.00%
Other Segments [Member]        
Disaggregation of Revenue [Line Items]        
Percent of Total Company Revenue 24.00% 23.00% 24.00% 23.00%
United States [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 100.00% 100.00% 100.00% 100.00%
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage Of Company-Wide Revenue 72.00% 72.00% 72.00% 72.00%
United States [Member] | Government Customer [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 24.00% 19.00% 21.00% 18.00%
United States [Member] | Heavy Manufacturing [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 15.00% 19.00% 17.00% 19.00%
United States [Member] | Light Manufacturing [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 13.00% 13.00% 13.00% 13.00%
United States [Member] | Transportation [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 5.00% 5.00% 5.00% 6.00%
United States [Member] | Healthcare Customer [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 11.00% 7.00% 10.00% 7.00%
United States [Member] | Commercial [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 7.00% 10.00% 8.00% 10.00%
United States [Member] | Retail/Wholesale [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 10.00% 8.00% 10.00% 8.00%
United States [Member] | Contractors [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 9.00% 10.00% 9.00% 10.00%
United States [Member] | Natural Resources [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 2.00% 3.00% 2.00% 3.00%
United States [Member] | Other [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 4.00% 6.00% 5.00% 6.00%
Canada [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 100.00% 100.00% 100.00% 100.00%
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage Of Company-Wide Revenue 4.00% 5.00% 4.00% 5.00%
Canada [Member] | Government Customer [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 10.00% 6.00% 10.00% 6.00%
Canada [Member] | Heavy Manufacturing [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 16.00% 20.00% 17.00% 21.00%
Canada [Member] | Light Manufacturing [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 7.00% 6.00% 6.00% 6.00%
Canada [Member] | Transportation [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 10.00% 8.00% 10.00% 8.00%
Canada [Member] | Healthcare Customer [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 0.00% 0.00% 0.00% 0.00%
Canada [Member] | Commercial [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 10.00% 9.00% 9.00% 9.00%
Canada [Member] | Retail/Wholesale [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 3.00% 4.00% 4.00% 4.00%
Canada [Member] | Contractors [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 10.00% 11.00% 9.00% 10.00%
Canada [Member] | Natural Resources [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 29.00% 32.00% 29.00% 32.00%
Canada [Member] | Other [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Contract With Customer, Excluding Assessed Tax, Percentage 5.00% 4.00% 6.00% 4.00%
v3.20.2
PROPERTY, BUILDINGS AND EQUIPMENT (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Jan. 01, 2020
Jun. 30, 2020
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Property, Plant and Equipment [Line Items]          
Property, buildings and equipment   $ 3,470 $ 3,470   $ 3,493
Less: Accumulated depreciation and amortization and impairment         2,093
PROPERTY, BUILDINGS AND EQUIPMENT - NET   1,365 1,365   1,400
Impairment charge     44    
Minimum [Member]          
Property, Plant and Equipment [Line Items]          
Less: Accumulated depreciation and amortization and impairment   2,105 2,105    
Land [Member]          
Property, Plant and Equipment [Line Items]          
Property, buildings and equipment   329 329   332
Building, Structures and Improvements [Member]          
Property, Plant and Equipment [Line Items]          
Property, buildings and equipment   1,317 1,317   1,329
Estimated useful lives       30 years  
Furniture, Fixtures, Machinery and Equipment [Member]          
Property, Plant and Equipment [Line Items]          
Property, buildings and equipment   1,824 1,824   $ 1,832
Estimated useful lives         30 years
Furniture, Fixtures, Machinery and Equipment [Member] | Minimum [Member]          
Property, Plant and Equipment [Line Items]          
Estimated useful lives 40 years        
Furniture, Fixtures, Machinery and Equipment [Member] | Maximum [Member]          
Property, Plant and Equipment [Line Items]          
Estimated useful lives 50 years        
Property, Buildings and Equipment [Member]          
Property, Plant and Equipment [Line Items]          
Impairment charge     24    
Right-Of-Use Assets [Member]          
Property, Plant and Equipment [Line Items]          
Impairment charge     20    
Change in Accounting Method Accounted for as Change in Estimate [Member]          
Property, Plant and Equipment [Line Items]          
Depreciation   $ 7 $ 15    
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS Additional Information (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
Jun. 30, 2020
USD ($)
Segment Reporting Information [Line Items]    
Impairment   $ 58
Percentage of fair value in excess of carrying amount 25.00% 25.00%
Change in percentage of fair value in excess of carrying amount   0.10
Goodwill and Intangible Asset Impairment   $ 137
Goodwill, Impairment Loss, Excluding Divested Businesses $ 0 0
Canada [Member]    
Segment Reporting Information [Line Items]    
Impairment   $ 0
Pro Forma [Member]    
Segment Reporting Information [Line Items]    
Impairment trigger, pre-tax discount rate   0.03
Impairment trigger, decrease in revenue long-term growth rate   0.015
Canada [Member]    
Segment Reporting Information [Line Items]    
Goodwill and Intangible Asset Impairment   $ 32
Other Businesses [Member]    
Segment Reporting Information [Line Items]    
Goodwill and Intangible Asset Impairment   $ 105
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS Balances and Changes in Carrying Amounts of Goodwill (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2020
Dec. 31, 2019
Goodwill [Roll Forward]        
Goodwill, beginning balance   $ 429 $ 429 $ 424
Impairment     (58)  
Translation     (6) 5
Goodwill, ending balance $ 365   365 429
Goodwill, Impairment Loss, Excluding Divested Businesses 0   0  
United States [Member]        
Goodwill [Roll Forward]        
Goodwill, beginning balance   192 192 192
Impairment     0  
Translation     0 0
Goodwill, ending balance 192   192 192
Canada [Member]        
Goodwill [Roll Forward]        
Goodwill, beginning balance   126 126 120
Impairment     0  
Translation     (5) 6
Goodwill, ending balance 121   121 126
Other Businesses [Member]        
Goodwill [Roll Forward]        
Goodwill, beginning balance   111 111 112
Impairment   $ (58) (58)  
Translation     (1) (1)
Goodwill, ending balance $ 52   $ 52 $ 111
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets included in Other assets and intangibles (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Total intangible assets, gross $ 934 $ 1,163
Total intangible assets, net 223 304
Finite-lived intangible assets, accumulated amortization 711 859
Goodwill and Intangible Asset Impairment 137  
Customer lists and relationships [Member]    
Finite-lived intangible assets, gross 221 401
Finite-lived intangible assets, accumulated amortization 166 301
Finite-lived intangible assets, net 55 100
Trademarks, trade names and other [Member]    
Finite-lived intangible assets, gross 34 36
Finite-lived intangible assets, accumulated amortization 20 20
Finite-lived intangible assets, net 14 16
Non-amortized trade names and other [Member]    
Finite-lived intangible assets, gross 27 100
Finite-lived intangible assets, accumulated amortization 0 38
Indefinite-lived intangible assets, carrying amount 27 62
Capitalized software [Member]    
Finite-lived intangible assets, gross 652 626
Finite-lived intangible assets, accumulated amortization 525 500
Finite-lived intangible assets, net $ 127 $ 126
Weighted average [Member]    
Finite-lived intangible assets, useful life 6 years 8 months 12 days  
Weighted average [Member] | Customer lists and relationships [Member]    
Finite-lived intangible assets, useful life 11 years 9 months 18 days  
Weighted average [Member] | Trademarks, trade names and other [Member]    
Finite-lived intangible assets, useful life 14 years 2 months 12 days  
Weighted average [Member] | Capitalized software [Member]    
Finite-lived intangible assets, useful life 4 years 2 months 12 days  
v3.20.2
RESTRUCTURING (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2020
Dec. 31, 2019
Employee Related Liabilities, Current [Member]      
Restructuring Cost and Reserve [Line Items]      
Restructuring reserve balance $ 10 $ 10 $ 10
Selling, General and Administrative Expenses [Member]      
Restructuring Cost and Reserve [Line Items]      
Restructuring related costs $ 1 $ 8  
v3.20.2
SHORT-TERM AND LONG-TERM DEBT - Narrative (Details) - USD ($)
$ in Millions
 1 Months Ended 6 Months Ended
Mar. 31, 2020
Feb. 29, 2020
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Oct. 31, 2017
Debt Instrument [Line Items]            
Debt issuance costs and discounts, net of amortization     $ (27)   $ (21)  
Borrowings under lines of credit     12 $ 19    
Line of Credit [Member]            
Debt Instrument [Line Items]            
Outstanding lines of credit     15   $ 55  
Revolving Credit Facility [Member] | Line of Credit [Member]            
Debt Instrument [Line Items]            
Line Of Credit Facility, Option To Increase Maximum Borrowing Capacity     $ 1,875      
Maximum availability of revolving credit facility   $ 1,250        
Borrowings under lines of credit $ 1,000          
Revolving Credit Facility [Member] | Base Rate [Member] | Line of Credit [Member]            
Debt Instrument [Line Items]            
Effective interest rate   1.00%        
Revolving Credit Facility [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member] | Line of Credit [Member]            
Debt Instrument [Line Items]            
Effective interest rate   0.50%        
Revolving Credit Facility [Member] | Eurodollar [Member] | Line of Credit [Member]            
Debt Instrument [Line Items]            
Effective interest rate   1.00%        
Senior Notes, 1.85% due 2025 [Member] | Senior Notes [Member]            
Debt Instrument [Line Items]            
Debt principal amount   $ 500        
Interest rate   1.85%        
Basis points   0.10%        
Redemption price, percentage upon change of control   101.00%        
Redemption price   100.00%        
Debt issuance costs and discounts, net of amortization   $ 5        
5-Year Unsecured Revolving Line Of Credit [Member] | Domestic Line of Credit [Member]            
Debt Instrument [Line Items]            
Maximum availability of revolving credit facility           $ 750
v3.20.2
SHORT-TERM AND LONG-TERM DEBT - Schedule of Long-Term Debt Instruments (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Feb. 29, 2020
Dec. 31, 2019
Debt Instrument [Line Items]      
Other $ 49   $ 42
Other, fair value 49   42
Long-term debt, gross 3,349   2,181
Long-term debt, gross, fair value 3,752   2,440
Less current maturities (21)   (246)
Less current maturities, fair value (21)   (246)
Debt issuance costs and discounts, net of amortization (27)   (21)
Debt issuance costs and discounts, fair value (27)   (21)
Long-term debt (less current maturities) 3,301   1,914
Long-term debt, excluding current maturities, , fair value 3,704   2,173
British pound denominated term loan and revolving credit facility [Member]      
Debt Instrument [Line Items]      
Long-term debt 0   170
Long-term debt, fair value 0   170
Euro denominated term loan and revolving credit facility [Member]      
Debt Instrument [Line Items]      
Long-term debt 0   123
Long-term debt, fair value 0   123
Canadian dollar revolving credit facility [Member]      
Debt Instrument [Line Items]      
Long-term debt 0   46
Long-term debt, fair value 0   46
Senior Notes, 4.60% due 2045 [Member] | Senior notes [Member]      
Debt Instrument [Line Items]      
Long-term debt 1,000   1,000
Long-term debt, fair value 1,260   1,194
Senior Notes, 3.75% due 2046 [Member] | Senior notes [Member]      
Debt Instrument [Line Items]      
Long-term debt 400   400
Long-term debt, fair value 441   416
Senior Notes, 4.20% due 2047 [Member] | Senior notes [Member]      
Debt Instrument [Line Items]      
Long-term debt 400   400
Long-term debt, fair value 478   449
Senior Notes, 1.85% due 2025 [Member] | Senior notes [Member]      
Debt Instrument [Line Items]      
Long-term debt 500   0
Long-term debt, fair value 524   0
Debt issuance costs and discounts, net of amortization   $ 5  
Revolving Credit Facility [Member] | Line of Credit [Member]      
Debt Instrument [Line Items]      
Long-term debt 1,000   0
Long-term debt, fair value $ 1,000   $ 0
v3.20.2
DERIVATIVE INSTRUMENTS - Narrative (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Feb. 29, 2020
Derivative [Line Items]    
Derivative instruments and hedges, liabilities $ 522  
Senior Notes, 1.85% due 2025 [Member] | Senior notes [Member]    
Derivative [Line Items]    
Interest rate   1.85%
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member]    
Derivative [Line Items]    
Derivative, notional amount 500  
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member]    
Derivative [Line Items]    
Derivative, notional amount $ 34  
v3.20.2
DERIVATIVE INSTRUMENTS - Schedule of Derivative Instruments (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Derivative [Line Items]        
Interest expense, net $ (28) $ (21) $ (49) $ (40)
Other, net 7 $ 7 11 $ 14
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Other Contract [Member]        
Derivative [Line Items]        
Interest expense, net (4)   (22)  
Other, net 0   0  
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Interest Rate Swap [Member]        
Derivative [Line Items]        
Fair Value and Carrying Amounts 22   22  
Interest expense, net 4   22  
Other, net 0   0  
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Contract [Member]        
Derivative [Line Items]        
Interest expense, net 0   0  
Other, net 2   0  
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Cross Currency Interest Rate Contract [Member]        
Derivative [Line Items]        
Fair Value and Carrying Amounts 0   0  
Interest expense, net 0   0  
Other, net $ (2)   $ 0  
v3.20.2
INCOME TAXES (Details)
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Tax Disclosure [Abstract]        
Effective tax rate 30.20% 25.60% 3.90% 25.50%
v3.20.2
INCOME TAXES INCOME TAXES - Reconciliation of Income Tax Expense with Federal Income Taxes at the Statutory Rate (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Tax Disclosure [Abstract]        
Federal income tax $ 39 $ 77 $ 69 $ 151
State income taxes, net of federal income tax benefit 6 9 11 19
Foreign rate difference 4 5 6 10
Fabory Tax Impact, non operating 5 0 (76) 0
Change in valuation allowance 2 2 4 3
Other, net (1) 1 (2) 0
Income tax expense $ 55 $ 94 $ 12 $ 183
Effective tax rate 30.20% 25.60% 3.90% 25.50%
v3.20.2
SEGMENT INFORMATION - Narrative (Details)
 6 Months Ended
Jun. 30, 2020
segment
Segment Reporting Information [Line Items]  
Number of reportable segments 2
v3.20.2
SEGMENT INFORMATION - Summary of Segment Results (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Segment Reporting Information [Line Items]          
TOTAL ASSETS $ 7,194   $ 7,194   $ 6,005
Summarized Information          
Net sales to external customers 2,837 $ 2,893 5,838 $ 5,692  
Total consolidated operating earnings 205 380 364 743  
United States [Member]          
Summarized Information          
Net sales to external customers 2,051 2,095 4,225 4,126  
Canada [Member]          
Summarized Information          
Net sales to external customers 107 135 236 271  
United States And Canada Segments [Member]          
Summarized Information          
Net sales to external customers 2,158 2,230 4,461 4,397  
Other Businesses [Member]          
Summarized Information          
Net sales to external customers 679 663 1,377 1,295  
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
TOTAL ASSETS 3,087   3,087   2,841
Summarized Information          
Net sales to external customers 2,956 3,020 6,090 5,938  
Total consolidated operating earnings 353 409 552 798  
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member] | United States [Member]          
Segment Reporting Information [Line Items]          
TOTAL ASSETS 2,919   2,919   2,668
Summarized Information          
Net sales to external customers 2,169 2,222 4,476 4,371  
Total consolidated operating earnings 318 381 658 745  
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member] | Canada [Member]          
Segment Reporting Information [Line Items]          
TOTAL ASSETS 168   168   $ 173
Summarized Information          
Net sales to external customers 107 135 236 271  
Total consolidated operating earnings (3) 1 (6) (4)  
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member] | United States And Canada Segments [Member]          
Summarized Information          
Net sales to external customers 2,276 2,357 4,712 4,642  
Total consolidated operating earnings 315 382 652 741  
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member] | Other Businesses [Member]          
Summarized Information          
Net sales to external customers 680 663 1,378 1,296  
Total consolidated operating earnings 38 27 (100) 57  
Intersegment Eliminations [Member]          
Summarized Information          
Net sales to external customers (119) (127) (252) (246)  
Intersegment Eliminations [Member] | United States [Member]          
Summarized Information          
Net sales to external customers (118) (127) (251) (245)  
Intersegment Eliminations [Member] | Canada [Member]          
Summarized Information          
Net sales to external customers 0 0 0 0  
Intersegment Eliminations [Member] | United States And Canada Segments [Member]          
Summarized Information          
Net sales to external customers (118) (127) (251) (245)  
Intersegment Eliminations [Member] | Other Businesses [Member]          
Summarized Information          
Net sales to external customers $ (1) $ 0 $ (1) $ (1)  
v3.20.2
SEGMENT INFORMATION - Schedule of Reconciliation of Operating Earnings from Segment to Consolidated (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Segment Reporting Information [Line Items]          
Total consolidated operating earnings $ 205 $ 380 $ 364 $ 743  
Assets 7,194   7,194   $ 6,005
Net sales 2,837 2,893 5,838 5,692  
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Total consolidated operating earnings 353 409 552 798  
Assets 3,087   3,087   2,841
Net sales 2,956 3,020 6,090 5,938  
Eliminations and Unallocated in Consolidation [Member]          
Segment Reporting Information [Line Items]          
Total consolidated operating earnings (148) (29) (188) (55)  
Assets 1,500   1,500   161
Segment Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Assets 2,607   2,607   3,003
Intersegment Eliminations [Member]          
Segment Reporting Information [Line Items]          
Net sales (119) (127) (252) (246)  
United States And Canada Segments [Member]          
Segment Reporting Information [Line Items]          
Net sales 2,158 2,230 4,461 4,397  
United States And Canada Segments [Member] | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Total consolidated operating earnings 315 382 652 741  
Net sales 2,276 2,357 4,712 4,642  
United States And Canada Segments [Member] | Intersegment Eliminations [Member]          
Segment Reporting Information [Line Items]          
Net sales (118) (127) (251) (245)  
Other Businesses [Member]          
Segment Reporting Information [Line Items]          
Net sales 679 663 1,377 1,295  
Other Businesses [Member] | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Total consolidated operating earnings 38 27 (100) 57  
Net sales 680 663 1,378 1,296  
Other Businesses [Member] | Intersegment Eliminations [Member]          
Segment Reporting Information [Line Items]          
Net sales (1) 0 (1) (1)  
United States [Member]          
Segment Reporting Information [Line Items]          
Net sales 2,051 2,095 4,225 4,126  
United States [Member] | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Total consolidated operating earnings 318 381 658 745  
Assets 2,919   2,919   2,668
Net sales 2,169 2,222 4,476 4,371  
United States [Member] | Intersegment Eliminations [Member]          
Segment Reporting Information [Line Items]          
Net sales (118) (127) (251) (245)  
Canada [Member]          
Segment Reporting Information [Line Items]          
Net sales 107 135 236 271  
Canada [Member] | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Total consolidated operating earnings (3) 1 (6) (4)  
Assets 168   168   $ 173
Net sales 107 135 236 271  
Canada [Member] | Intersegment Eliminations [Member]          
Segment Reporting Information [Line Items]          
Net sales $ 0 $ 0 $ 0 $ 0  
v3.20.2
SEGMENT INFORMATION - Schedule of Reconciliation of Assets from Segment to Consolidated (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Segment Reporting Information [Line Items]    
TOTAL ASSETS $ 7,194 $ 6,005
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]    
Segment Reporting Information [Line Items]    
TOTAL ASSETS 3,087 2,841
Segment Reconciling Items [Member]    
Segment Reporting Information [Line Items]    
TOTAL ASSETS 2,607 3,003
Eliminations and Unallocated in Consolidation [Member]    
Segment Reporting Information [Line Items]    
TOTAL ASSETS 1,500 161
United States [Member] | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]    
Segment Reporting Information [Line Items]    
TOTAL ASSETS 2,919 2,668
Canada [Member] | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items [Member]    
Segment Reporting Information [Line Items]    
TOTAL ASSETS $ 168 $ 173