SEGMENT INFORMATION

Grainger's two reportable segments are the U.S. and Canada. These reportable segments reflect the results of the Company's businesses in those geographies, except for Zoro Tools, Inc. (Zoro), which is in the U.S. Other businesses include the Company's single channel businesses (Zoro and MonotaRO in Japan) and small operations in Europe, Asia and Latin America. These businesses individually do not meet the criteria of a reportable segment.

Following is a summary of segment results (in thousands of dollars):



	Three Months Ended June 30, 2018
	U.S.			Canada			Other businesses			Total
Total net sales	$	2,175,106		$	176,868		$	622,153		$	2,974,127
Intersegment net sales	(112,725		)	(15		)	(1,175		)	(113,915		)
Net sales to external customers	$	2,062,381		$	176,853		$	620,978		$	2,860,212
Segment operating earnings	$	349,713		$	(13,667	)	$	40,899		$	376,945



	Three Months Ended June 30, 2017
	U.S.			Canada			Other businesses			Total
Total net sales	$	1,999,153		$	189,113		$	526,560		$	2,714,826
Intersegment net sales	(98,507		)	10			(1,060		)	(99,557		)
Net sales to external customers	$	1,900,646		$	189,123		$	525,500		$	2,615,269
Segment operating earnings	$	309,460		$	(27,727	)	$	(14,222	)	$	267,511



	Six Months Ended June 30, 2018
	U.S.			Canada			Other businesses			Total
Total net sales	$	4,282,792		$	358,633		$	1,210,245		$	5,851,670
Intersegment net sales	(222,906		)	(33		)	(2,118		)	(225,057		)
Net sales to external customers	$	4,059,886		$	358,600		$	1,208,127		$	5,626,613
Segment operating earnings	$	706,217		$	(33,824	)	$	77,321		$	749,714



	Six Months Ended June 30, 2017
	U.S.			Canada			Other businesses			Total
Total net sales	$	3,952,597		$	375,254		$	1,023,967		$	5,351,818
Intersegment net sales	(193,579		)	(3		)	(1,838		)	(195,420		)
Net sales to external customers	$	3,759,018		$	375,251		$	1,022,129		$	5,156,398
Segment operating earnings	$	619,102		$	(44,456	)	$	17,285		$	591,931



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Operating earnings:
Segment operating earnings	$	376,945		$	267,511		$	749,714		$	591,931
Unallocated expenses and eliminations	(32,959		)	(38,431		)	(70,898		)	(70,350		)
Total consolidated operating earnings	$	343,986		$	229,080		$	678,816		$	521,581

Segment and total consolidated operating earnings for the three and six months ended June 30, 2017 were restated for the implementation of ASU 2017-07. See Note 2 to the Financial Statements.

Unallocated expenses and eliminations primarily relate to the Company's headquarters support services and intercompany eliminations, which are not part of any reportable segment. Unallocated expenses are primarily comprised of employee compensation costs, depreciation and other administrative costs.

The Company is a broad-line distributor of MRO supplies, and other related products. Products are regularly added and deleted 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.

Following are reconciliations of segment assets with the total consolidated assets per the financial statements (in thousands of dollars):



	U.S.		Canada		Other businesses		Total
Segment assets:
June 30, 2018	$	2,485,497	$	221,965	$	656,490	$	3,363,952
December 31, 2017	$	2,309,734	$	278,633	$	605,452	$	3,193,819



	As of
Total assets:	June 30, 2018		December 31, 2017
Assets for reportable segments	3,363,952		3,193,819
Other current and non-current assets	2,439,023		2,428,074
Unallocated assets	101,597		182,361
Total consolidated assets	$	5,904,572	$	5,804,254

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. Other current and non-current assets include all other assets of the reportable segments. Unallocated assets are primarily comprised of non-operating cash and cash equivalents, property, buildings and equipment, net, and certain prepaid expenses related to the Company's headquarters support services.