XML 35 R19.htm IDEA: XBRL DOCUMENT
v3.10.0.1

EMPLOYEE BENEFITS | 12 Months Ended
--- | ---
Dec. 31, 2018
EMPLOYEE BENEFITS [Abstract] |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS The Company provides various retirement benefits to eligible employees, including contributions to defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and other benefits. Eligibility requirements and benefit levels vary depending on employee location. Various foreign benefit plans cover employees in accordance with local legal requirements. Defined Contribution Plans A majority of the Company's U.S. employees are covered by a noncontributory profit-sharing plan. The plan aligns Company contributions to Company performance and includes two components, a variable annual contribution based on a rate of return on invested capital and an automatic contribution equal to 3% of total eligible compensation. In addition, employees covered by the plan are also able to make personal contributions. The total Company contribution will be maintained at a minimum of 8% and a maximum of 18% of total eligible compensation paid to eligible employees. The total profit-sharing plan expense was $164 million, $120 million and $84 million for 2018, 2017 and 2016, respectively. The Company sponsors additional defined contribution plans available to certain U.S. and foreign employees for which contributions are made by the Company and participating employees. The expense associated with these defined contribution plans totaled $13 million, $18 million, and $12 million for 2018, 2017 and 2016, respectively. Defined Benefit Plans and Other Retirement Plans The Company sponsors defined benefit plans available to certain foreign employees. The cost of these programs is not significant to the Company. In certain countries, pension contributions are made to government-sponsored social security pension plans in accordance with local legal requirements. For these plans, the Company has no continuing obligations other than the payment of contributions. Postretirement Healthcare Benefits Plans The Company has a postretirement healthcare benefits plan that provides coverage for a majority of its U.S. employees hired prior to January 1, 2013, and their dependents should they elect to maintain such coverage upon retirement. Covered employees become eligible for participation when they qualify for retirement while working for the Company. Participation in the plan is voluntary and requires participants to make contributions toward the cost of the plan, as determined by the Company. During the third quarter of 2017, the Company implemented plan design changes effective January 1, 2018, for the post-65 age group. This plan change moved all post-65 Medicare eligible retirees to healthcare exchanges and provided them a subsidy to purchase insurance. The amount of the subsidy is based on years of service. As a result of the plan change, the plan obligation was remeasured as of August 31, 2017. The remeasurement resulted in a decrease in the postretirement benefit obligation of $76 million and a corresponding unrecognized gain recorded in Other comprehensive earnings net of tax of $29 million. The net periodic costs, as previously reported in the 2017 and 2016 Financial Statements, have been reclassified to conform to the 2018 presentation in accordance with ASU 2017-07. The net periodic benefits costs were valued with a measurement date of January 1 for each year and August 31, 2017 remeasurement date and consisted of the following components (in millions of dollars):
| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
SG&A |  |  |  |  |
Service cost | $ | 6 |  |  | $ | 7 |  |  | $ | 8 |
Other income (expense) |  |  |  |  |
Interest cost | 7 |  |  | 8 |  |  | 10 |
Expected return on assets | (13 | ) |  | (12 | ) |  | (10 | )
Amortization of prior service credit | (10 | ) |  | (7 | ) |  | (7 | )
Amortization of unrecognized gains | (3 | ) |  | (2 | ) |  | — |
Net periodic (benefits) costs | $ | (13 | ) |  | $ | (6 | ) |  | $ | 1 |
Reconciliations of the beginning and ending balances of the postretirement benefit obligation, which is calculated as of December 31 measurement date, the fair value of plan assets available for benefits and the funded status of the benefit obligation follow (in millions of dollars):
| 2018 |  | 2017
Benefit obligation at beginning of year | $ | 208 |  |  | $ | 265 |
Service cost | 6 |  |  | 7 |
Interest cost | 7 |  |  | 8 |
Plan participants' contributions | 3 |  |  | 3 |
Actuarial (gains) | (26 | ) |  | (34 | )
Plan amendment | — |  |  | (34 | )
Benefits paid | (9 | ) |  | (9 | )
Prescription drug rebates | 1 |  |  | 2 |
Benefit obligation at end of year | 190 |  |  | 208 |
Plan assets available for benefits at beginning of year | 189 |  |  | 164 |
Actual (losses) returns on plan assets | (8 | ) |  | 29 |
Plan participants' contributions | 3 |  |  | 3 |
Benefits paid | (9 | ) |  | (8 | )
Prescription drug rebates | 1 |  |  | 1 |
Plan assets available for benefits at end of year | 176 |  |  | 189 |
Noncurrent postretirement benefit obligation | $ | 14 |  |  | $ | 19 |
The amounts recognized in AOCE consisted of the following (in millions of dollars):
| As of December 31,
| 2018 |  | 2017
Prior service credit | $ | 71 |  |  | $ | 80 |
Unrecognized gains | 37 |  |  | 37 |
Deferred tax (liability) | (26 | ) |  | (44 | )
Net accumulated gains | $ | 82 |  |  | $ | 73 |
The Company has elected to amortize the amount of net unrecognized gains over a period equal to the average remaining service period for active plan participants expected to retire and receive benefits of approximately 12.9 years for 2018. The postretirement benefit obligation was determined by applying the terms of the plan and actuarial models. These models include various actuarial assumptions, including discount rates, long-term rates of return on plan assets, healthcare cost trend rate and cost-sharing between the Company and the retirees. The Company evaluates its actuarial assumptions on an annual basis and considers changes in these long-term factors based upon market conditions and historical experience. The following assumptions were used to determine net periodic benefit costs at January 1 of each year (excluding the August 31, 2017 remeasurement date):
| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Discount rate | 3.44 | % |  | 4.00 | % |  | 4.20 | %
Long-term rate of return on plan assets, net of tax | 7.13 | % |  | 7.13 | % |  | 6.65 | %
Initial healthcare cost trend rate |  |  |  |  |
Pre age 65 | 6.56 | % |  | 6.81 | % |  | 7.00 | %
Post age 65 | NA |  |  | 9.36 | % |  | 7.00 | %
Catastrophic drug benefit | 12.50 | % |  | NA |  |  | NA |
Ultimate healthcare cost trend rate | 4.50 | % |  | 4.50 | % |  | 4.50 | %
Year ultimate healthcare cost trend rate reached | 2026 |  |  | 2026 |  |  | 2026 |
HRA credit inflation index for grandfathered retirees | 2.50 | % |  | NA |  |  | NA |
The following assumptions were used to determine benefit obligations at December 31:
| 2018 |  | 2017 |  | 2016
Discount rate | 4.08 | % |  | 3.44 | % |  | 4.00 | %
Expected long-term rate of return on plan assets, net of tax | 7.13 | % |  | 7.13 | % |  | 7.13 | %
Initial healthcare cost trend rate |  |  |  |  |
Pre age 65 | 6.31 | % |  | 6.56 | % |  | 6.81 | %
Post age 65 | N/A |  |  | NA |  |  | 9.36 | %
Catastrophic drug benefit | 11.50 | % |  | 12.50 | % |  | N/A |
Ultimate healthcare cost trend rate | 4.50 | % |  | 4.50 | % |  | 4.50 | %
Year ultimate healthcare cost trend rate reached | 2026 |  |  | 2026 |  |  | 2026 |
HRA credit inflation index for grandfathered retirees | 2.50 | % |  | 2.50 | % |  | N/A |
The discount rate assumptions reflect the rates available on high-quality fixed income debt instruments as of December 31, the measurement date of each year. These rates have been selected due to their similarity to the duration of the projected cash flows of the postretirement healthcare benefit plan. As of December 31, 2018, the Company increased the discount rate from 3.44% to 4.08% to reflect the increase in the market interest rates at December 31, 2018. As of December 31, 2018, the Company changed the mortality improvement table used to project mortality rates into the future from Mortality Table RPH-2014 with Mortality Improvement Scale MP 2016 to Mortality Table RPH-2014 with Mortality Improvement Scale MP 2018, which was published by the Society of Actuaries and reflects the most recent updates to life expectancies. RPH-2014 Table is a headcount weighted table, which is also more appropriate for a postretirement healthcare benefit plan. The Company reviews external data and its own historical trends for healthcare costs to determine the healthcare cost trend rates. As of December 31, 2016, Grainger adopted a new healthcare trend rate to include a pre and post age 65 trend rates. Post age 65, prescription drug costs, primarily specialty drugs, are expected to increase the cost of healthcare more significantly than medical expenses. The alternative trend rates allow for a better estimate of expected costs for this plan. As of December 31, 2018, the initial healthcare cost trend rate was 6.31% for pre age 65. The healthcare costs trend rates decline each year until reaching the ultimate trend rate of 4.50%. The plan amendment adopted in 2017 moves all post age 65 Medicare eligible retirees to an exchange and provides a subsidy to those retirees to purchase insurance. The amount of the subsidy is based on years of service and is indexed at 2.50% for grandfathered employees. The Company has established a Group Benefit Trust (Trust) to fund the plan obligations and process benefit payments. All assets of the Trust are invested in equity funds designed to track to either the Standard & Poor's 500 Index (S&P 500) or the Total International Composite Index. The Total International Composite Index tracks non-U.S. stocks within developed and emerging market economies. This investment strategy reflects the long-term nature of the plan obligation and seeks to take advantage of the earnings potential of equity securities in the global markets and intends to reach a balanced allocation between U.S. and non-U.S. equities. The plan's assets are stated at fair value, which represents the net asset value of shares held by the plan in the registered investment companies at the quoted market prices (level 1 input). The plan assets available for benefits are net of Trust liabilities, primarily related to deferred income taxes and taxes payable at December 31 (in millions of dollars):
| 2018 |  | 2017
Registered investment companies: |  |  |
Fidelity Spartan U.S. Equity Index Fund | $ | 80 |  |  | $ | 83 |
Vanguard 500 Index Fund | 93 |  |  | 104 |
Vanguard Total International Stock | 26 |  |  | 30 |
Plan Assets | 199 |  |  | 217 |
Trust liabilities | (23 | ) |  | (28 | )
Plan assets available for benefits | $ | 176 |  |  | $ | 189 |
The Company uses the long-term historical return on the plan assets and the historical performance of the S&P 500 and the Total International Composite Index to develop its expected return on plan assets. The after-tax expected long-term rates of return on plan assets of 7.13% at December 31, 2018 is based on the historical average of long-term rates of return and an estimated tax rate. The required use of an expected long-term rate of return on plan assets may result in recognition of income that is greater or lower than the actual return on plan assets in any given year. Over time, however, the expected long-term returns are designed to approximate the actual long-term returns and, therefore, result in a pattern of income recognition that more closely matches the pattern of the services provided by the employees. The Company's investment policies include periodic reviews by management and trustees at least annually concerning: (1) the allocation of assets among various asset classes (e.g., domestic stocks, international stocks, short-term bonds, long-term bonds, etc.); (2) the investment performance of the assets, including performance comparisons with appropriate benchmarks; (3) investment guidelines and other matters of investment policy and (4) the hiring, dismissal or retention of investment managers. The funding of the Trust is an estimated amount that is intended to allow the maximum deductible contribution under the Internal Revenue Code of 1986 (IRC), as amended. There are no minimum funding requirements and the Company intends to follow its practice of funding the maximum deductible contribution under the IRC. The Company forecasts the following benefit payments related to postretirement (which include a projection for expected future employee service) for the next ten years (in millions of dollars):
Year |  | Estimated Gross Benefit Payments
2019 |  | $ | 8 |
2020 |  | 9 |
2021 |  | 10 |
2022 |  | 11 |
2023 |  | 12 |
2024-2028 |  | 66 |

X
- Definition EMPLOYEE BENEFITS [Abstract] + References No definition available. + Details
Name: | gww_EmployeeBenefitsAbstract
Namespace Prefix: | gww_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration