The company's strategic aspiration for 2025 is to expand Grainger's leadership position by being the go-to partner for people who build and run safe, sustainable, and productive operations. This is achieved through advantaged MRO solutions, differentiated sales and services, and unparalleled customer service.

Net sales in the Endless Assortment segment increased by 7% year-over-year, with a 12% increase on a daily constant currency basis. This growth is attributed to successful customer acquisition and enterprise customer growth at MonotaRO.

Capital project spending for 2025 is expected to be in the range of $450 and $550 million, including continued supply chain capacity expansion and technology enhancements. This indicates a commitment to future growth and operational efficiency.

Selling, general, and administrative expenses increased by 5%, outpacing the 4.2% increase in net sales. This suggests potential inefficiencies in managing operating costs.

Management assessed the effectiveness of internal control over financial reporting as of December 31, 2024, based on COSO criteria and concluded that it was effective. Ernst & Young LLP audited Grainger's internal control over financial reporting as of December 31, 2024.

In the second quarter of 2024, the Company recorded restructuring charges in SG&A of $15 million in the High-Touch Solutions N.A. segment and $1 million in Grainger's Other businesses. The charges consisted primarily of team member severance and benefit costs.

The document states that market variables, such as inflation of product costs, labor rates, fuel, freight and energy costs, as well as geopolitical events, could negatively impact Grainger's ability to effectively manage its operating and administrative expenses.

The document states that Grainger's logistics or supply chain network could be disrupted by the occurrence of one or more natural or weather-related disasters, including earthquakes, tsunamis, storms, hurricanes, floods, fires, droughts, tornados and other extreme weather events or conditions.

The document states that through Grainger's sales and digital channels, as well as its ordinary course of business, Grainger collects and stores personally identifiable, confidential, proprietary and other information from customers, team members, suppliers, website visitors, and other entities or individuals.

Grainger competes in a variety of ways, including product assortment and availability, services offered to customers, pricing, purchasing convenience and the overall experience Grainger offers. This includes the ease of use of Grainger's high-touch operations, eCommerce platforms and delivery of products.

From time to time, Grainger experiences changes in its customer base and product mix that affect gross margin. Changes in customer base and product mix result primarily from business acquisitions and divestitures, changes in customer demand, customer acquisitions, selling and marketing activities, competition and the increased use of eCommerce by Grainger and its competitors.

One of the reasons customers choose to do business with Grainger and team members choose Grainger as a place of employment is the reputation that Grainger has built over many years. Grainger devotes time and resources to initiatives that align with its corporate values and are designed to strengthen its business and protect and preserve its reputation.

All Grainger businesses are focused on continuously enhancing our operational processes to improve service and cost through customer experience, technology and supply chain infrastructure which ultimately delivers long-term returns for shareholders.

As of December 31, 2024, the Company had fixed operating lease payment obligations of $437 million, with $91 million payable within 12 months.

The majority of the Company's inventory is accounted for using the last-in, first-out (LIFO) method. Market value is based on an analysis of inventory trends including, but not limited to, reviews of inventory levels, sales and cost information and on-hand quantities relative to the sales history for the product and shelf-life.

The successful execution of Grainger's eCommerce growth strategy depends on a number of factors, including Grainger's investment in its eCommerce platforms, consumer preferences and purchasing trends, and the ability to deliver a seamless procurement experience across digital and also physical retail channels.

Grainger has also increased, and expects to continue to increase, its investments in developing, managing and implementing Al, such as large language model technologies. Grainger believes the proliferation of Al will have a significant impact on customer preferences and market dynamics in its industry, and Grainger's ability to effectively compete in this space will be critical to its financial performance.

The functioning of Grainger's information systems is critical to the operation of its business. Grainger continues to invest in software, hardware and network infrastructures to effectively manage its information systems.

Grainger expects to continue to invest in its business and return excess cash to shareholders through cash dividends and share repurchases, which it plans to fund through cash flows generated from operations.

For the years ended December 31, 2024 and 2023, Grainger repurchased shares of its common stock in the open market for $1,201 million and $850 million, respectively. Share repurchases for 2025 are expected to be in the range of $1,150 and $1,250 million.

Capital project spending for 2025 is expected to be in the range of $450 and $550 million. This includes continued supply chain capacity expansion and technology enhancements across the Company.

Grainger has established and publicly announced environmental and social programs, including its efforts to address climate change, human rights, and an inclusive workplace. These statements reflect its current plans and are not guarantees that Grainger will be able to achieve them.

For example, evolving climate-related regulations in multiple jurisdictions—such as stricter emissions limits, carbon disclosure mandates, and supply chain sustainability requirements—may require Grainger to adjust its operations and increase compliance investments.

Grainger's selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others.

The global economy continues to experience volatility and uncertainty including to the commodity, labor and transportation markets, arising from a combination of geopolitical conditions and events, and various economic and financial factors.

The Company continues to monitor economic conditions in the U.S. and globally, and the impact of macroeconomic pressures, including repercussions from changes in interest rates, currency exchange fluctuations, changing inflationary environment, and a potential recession on the Company's business, customers, suppliers and other third parties.

The Company has implemented strategies designed to mitigate certain adverse effects from the impact of the changing inflationary environment while remaining market price competitive.