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EARNINGS PER SHARE
 12 Months Ended
Dec. 31, 2015
Earnings Per Share [Abstract]  
EARNINGS PER SHARE
EARNINGS PER SHARE
The Company’s unvested Restricted Stock Units and Directors' Deferred Stock Units that contain nonforfeitable rights to dividends meet the criteria of a participating security. Under the two-class method, earnings are allocated between common stock and participating securities. The presentation of basic and diluted earnings per share is required only for each class of common stock and not for participating securities. As such, the Company presents basic and diluted earnings per share for its one class of common stock.
The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. The Company’s reported net earnings is reduced by the amount allocated to participating securities to arrive at the earnings allocated to common stock shareholders for purposes of calculating earnings per share.
The dilutive effect of participating securities is calculated using the more dilutive of the treasury stock or the two-class method. The Company has determined the two-class method to be the more dilutive. As such, the earnings allocated to common stock shareholders in the basic earnings per share calculation is adjusted for the reallocation of undistributed earnings to participating securities to arrive at the earnings allocated to common stock shareholders for calculating the diluted earnings per share.
The following table sets forth the computation of basic and diluted earnings per share under the two-class method (in thousands of dollars, except for share and per share amounts):
 
For the Years Ended December 31,
 
2015
 
2014
 
2013
 
 
 
 
 
 
Net earnings attributable to W.W. Grainger, Inc. as reported
$
768,996

 
$
801,729

 
$
797,036

   Distributed earnings available to participating securities
(2,823
)
 
(3,154
)
 
(3,304
)
   Undistributed earnings available to participating securities
(4,735
)
 
(6,370
)
 
(8,348
)
Numerator for basic earnings per share - Undistributed and distributed earnings available to common shareholders
761,438

 
792,205

 
785,384

   Undistributed earnings allocated to participating securities
4,735

 
6,370

 
8,348

   Undistributed earnings reallocated to participating securities
(4,692
)
 
(6,290
)
 
(8,218
)
Numerator for diluted earnings per share - Undistributed and distributed earnings available to common shareholders
$
761,481

 
$
792,285

 
$
785,514

 
 
 
 
 
 
Denominator for basic earnings per share – weighted average shares
65,156,864

 
68,334,322

 
69,455,507

Effect of dilutive securities
608,257

 
871,422

 
1,120,925

Denominator for diluted earnings per share – weighted average shares adjusted for dilutive securities
65,765,121

 
69,205,744

 
70,576,432

Earnings per share two-class method
 

 
 

 
 
Basic
$
11.69

 
$
11.59

 
$
11.31

Diluted
$
11.58

 
$
11.45

 
$
11.13