DEBT

12 Months Ended

Dec. 31, 2024

Total debt, including long-term, current maturities and debt issuance costs and discounts – net, consisted of the following (in millions of dollars):


	As of December 31,
	2024				2023
	Carrying Value		Fair Value		Carrying Value		Fair Value
4.60% senior notes due 2045	$	1,000	$	894	$	1,000	$	967
1.85% senior notes due 2025	—		—		500		483
4.45% senior notes due 2034	500		477		—		—
3.75% senior notes due 2046	400		332		400		336
4.20% senior notes due 2047	400		312		400		361
Debt issuance costs – net of amortization and other	(21)		(21)		(34)		(34)
Long-term debt	2,279		1,994		2,266		2,113
1.85% senior notes due 2025	500		498		—		—
Japanese yen term loan	—		—		32		32
Other	(1)		(1)		2		2
Current maturities	$	499	$	497	$	34	$	34
Total debt	$	2,778	$	2,491	$	2,300	$	2,147

Revolving Credit Facility

In October 2023, the Company entered into a five-year unsecured revolving credit facility agreement (2023 Credit Facility). Grainger may obtain loans in various currencies on a revolving basis in an aggregate amount not exceeding $1.25 billion, which may be increased up to $1.875 billion at the request of the Company, subject to obtaining additional commitments and other customary conditions. The primary purpose of the 2023 Credit Facility is to support the Company's commercial paper program and for general corporate purposes.

There were no borrowings outstanding under the Company's 2023 Credit Facility as of December 31, 2024 and 2023.

Senior Notes

In the years 2015-2020, Grainger issued $2.3 billion in unsecured long-term debt (Senior Notes) primarily to provide flexibility in funding general working capital needs, share repurchases and long-term cash requirements. The Senior Notes require no principal payments until maturity and interest is paid semi-annually.

In September 2024, Grainger issued $500 million in unsecured 4.45% Senior Notes (4.45% Notes). Grainger intends to use the net proceeds from this offering to repay the 1.85% Senior Notes that mature in February 2025 and any remaining net proceeds for general corporate purposes. The 4.45% Notes mature in September 2034, require no principal payments until maturity, and interest is paid semi-annually in arrears, beginning March 15, 2025.

The Company incurred debt issuance costs related to the Senior Notes representing underwriting fees and other expenses. These costs were recorded as a contra-liability in Long-term debt and are being amortized over the term of the Senior Notes using the straight-line method to Interest expense – net. As of December 31, 2024 and 2023, the unamortized costs were $22 million and $19 million, respectively.

Grainger uses interest rate swaps with an outstanding notional amount of $450 million as of December 31, 2024 and 2023, to hedge a portion of the interest rate risk associated with the 1.85% Senior Notes. These derivative instruments qualified and were designated for fair value hedge accounting treatment. Under this method, the resulting carrying value adjustments as of December 31, 2024 and 2023, are presented in Other in the table above and the estimated fair value of the interest rate swaps, based on Level 2 inputs within the fair value hierarchy, are reported on the Consolidated Balance Sheets in Other non-current liabilities.

The gain or loss on the interest rate swaps as well as the offsetting gain or loss on the 1.85% Senior Notes, are recognized in the Consolidated Statements of Earnings in Interest expense – net and the effect for the twelve months ended December 31, 2024 and 2023 was not material.

MonotaRO Term Loan

In August 2020, MonotaRO Co., Ltd (MonotaRO) entered into a ¥9 billion term loan agreement to fund technology investments and the expansion of its distribution center (DC) network. In the third quarter of 2024, the term loan was paid in full.

Fair Value

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 Company's 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 December 31, 2024 and 2023.

The Company's foreign subsidiaries utilize various financing sources for working capital purposes and other operating needs. These financing sources in aggregate were not material as of December 31, 2024 and 2023.

The scheduled aggregate principal payments required on the Company's indebtedness, based on the maturity dates defined within the debt arrangements, for the succeeding five years, excluding debt issuance costs and the impact of derivatives, are due as follows (in millions of dollars):


Year	Payment Amount
2025	$	502
2026	1
2027	—
2028	—
2029	—
Thereafter	2,300
Total	$	2,803