XML 28 R12.htm IDEA: XBRL DOCUMENT
v3.6.0.2

GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
--- | ---
Dec. 31, 2016
GOODWILL AND OTHER INTANGIBLES [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The balances and changes in the carrying amount of Goodwill by segment are as follows (in thousands of dollars):
|  | United States |  | Canada |  | Other Businesses |  | Total
Balance at January 1, 2015 |  | $ | 202,020 |  |  | $ | 141,189 |  |  | $ | 163,696 |  |  | $ | 506,905 |
Acquisitions |  | — |  |  | — |  |  | 114,903 |  |  | 114,903 |
Translation |  | — |  |  | (22,660 | ) |  | (16,812 | ) |  | (39,472 | )
Balance at December 31, 2015 |  | 202,020 |  |  | 118,529 |  |  | 261,787 |  |  | 582,336 |
Acquisitions and Purchase Price Adjustments |  | — |  |  | — |  |  | 8,362 |  |  | 8,362 |
Impairment |  | — |  |  | — |  |  | (47,244 | ) |  | (47,244 | )
Translation |  | — |  |  | 3,611 |  |  | (19,915 | ) |  | (16,304 | )
Balance at December 31, 2016 |  | $ | 202,020 |  |  | $ | 122,140 |  |  | $ | 202,990 |  |  | $ | 527,150 |
Cumulative goodwill impairment charges, January 1, 2016 |  | $ | 17,038 |  |  | $ | 32,265 |  |  | $ | 23,055 |  |  | $ | 72,358 |
Goodwill impairment charges |  | — |  |  | — |  |  | 47,244 |  |  | 47,244 |
Cumulative goodwill impairment charges, December 31, 2016 |  | $ | 17,038 |  |  | $ | 32,265 |  |  | $ | 70,299 |  |  | $ | 119,602 |
Business acquisitions result in the recording of goodwill and identified intangible assets that affect the amount of amortization expense and possible impairment write-downs that may occur in future periods. Grainger annually reviews goodwill and intangible assets with indefinite lives for impairment in the fourth quarter and when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Grainger tests for goodwill impairment at the reporting unit level and performs a qualitative assessment of factors such as a reporting unit's current performance and overall economic conditions to determine if it is more likely than not that the goodwill might be impaired and whether it is necessary to perform the two-step quantitative goodwill impairment test. In the two-step test, Grainger compares the carrying value of assets of the reporting unit to its calculated fair value. If the carrying value of assets of the reporting unit exceeds its calculated fair value, the second step is performed, where the implied fair value of goodwill is compared to the carrying value of that goodwill, to determine the amount of impairment. The fair value of reporting units is calculated primarily using the discounted cash flow (DCF) method and incorporating value indicators from a market approach to evaluate the reasonableness of the resulting fair values. The DCF method incorporates various assumptions including the amount and timing of future expected cash flows, including revenues, gross margins, operating expenses, capital expenditures and working capital based on operational budgets, long-range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period and reflects management’s best estimates for perpetual growth for the reporting units. Estimates of market-participant risk-adjusted weighted average cost of capital are used as a basis for determining the discount rates to apply to the reporting units’ future expected cash flows and terminal value. Grainger completed its annual goodwill impairment testing during the fourth quarter. For all of the Company’s reporting units, the estimated fair values substantially exceeded the carrying values, except for the Fabory reporting unit. As of the 2015 test, the fair value of the Fabory reporting unit exceeded its $106 million carrying value by 15%. During the current year testing, Grainger considered Fabory’s performance and the revised outlook. Prior branch rationalization initiatives and structural changes in the business contributed to cost improvements. However, declines in sales, primarily in the Netherlands and France, and price pressure contributed to lower earnings for the year. The current year business performance and revised financial projections also reflect market conditions, which continued to be negatively impacted by the downturn in oil and gas and maritime industries in the Netherlands, Fabory’s largest market. The revised outlook and uncertainty beyond 2016 were factored into lower earnings, cash flow projections and long-term expectations for Fabory’s future performance, resulting in the calculated fair value of the reporting unit below its carrying value in step one of the two-step quantitative test, and step two impairment calculations were required. As a result, the Company recorded a $47 million goodwill impairment charge with no tax benefit due to the nondeductibility of goodwill in the relevant taxing jurisdictions. The risk of potential failure of step one of the impairment test for Fabory’s remaining goodwill of $55 million as of December 31, 2016, is highly dependent upon a number of assumptions included in the determination of the reporting unit’s fair value. Changes in assumptions regarding discount rate and future performance may have a significant impact on the fair value of the reporting unit in the future. If future earnings and cash flow projections are not achieved or unfavorable economic environment continues in Fabory’s key markets, future impairment of the remaining goodwill or intangible assets could result. The balances and changes in Intangible assets - net are as follows (in thousands of dollars):
|  |  | As of December 31,
|  |  | 2016 |  | 2015
| Weighted average life |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount
Customer lists and relationships | 14.2 years |  | $ | 424,405 |  |  | $ | 175,112 |  |  | $ | 249,293 |  |  | $ | 452,429 |  |  | $ | 148,424 |  |  | $ | 304,005 |
Trademarks, trade names and other | 13.8 years |  | 25,353 |  |  | 14,262 |  |  | 11,091 |  |  | 25,764 |  |  | 13,051 |  |  | 12,713 |
Non-amortized trade names and other |  |  | 128,282 |  |  | — |  |  | 128,282 |  |  | 146,576 |  |  | — |  |  | 146,576 |
Capitalized software | 4.2 years |  | 571,978 |  |  | 374,518 |  |  | 197,460 |  |  | 504,283 |  |  | 319,567 |  |  | 184,716 |
Total intangible assets | 8.5 years |  | $ | 1,150,018 |  |  | $ | 563,892 |  |  | $ | 586,126 |  |  | $ | 1,129,052 |  |  | $ | 481,042 |  |  | $ | 648,010 |
Capitalized software of $185 million was previously reported in Other Assets as of December 31, 2015. The amount was reclassified to Intangibles - net to conform to the 2016 presentation. Amortization expense recognized on intangible assets was $82 million, $65 million and $54 million for the years ended December 31, 2016, 2015 and 2014, respectively, and is included in Warehousing, marketing and administrative expenses on the Consolidated Statement of Earnings. Estimated amortization expense for future periods is as follows (in thousands of dollars):
Year |  | Expense
2017 |  | $ | 85,791 |
2018 |  | 75,502 |
2019 |  | 58,309 |
2020 |  | 43,488 |
2021 |  | 31,716 |
Thereafter |  | 163,038 |

X
- Definition GOODWILL AND OTHER INTANGIBLES [Abstract] + References No definition available. + Details
Name: | gww_GoodwillAndOtherIntangiblesAbstract
Namespace Prefix: | gww_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16373-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16323-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration