W.W. GRAINGER, INC.GWW

W.W. GRAINGER, INC. Goodwill & Intangibles Disclosure

10-KFiled Feb 19, 20262 min read
GOODWILL AND OTHER INTANGIBLE ASSETS
Grainger completed its annual impairment testing of goodwill and intangible assets during the fourth quarter of 2025 and 2024. Based on the results of that testing, the Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators and concluded that it was more likely than not that the fair value of the reporting units exceeded their carrying amounts at each respective period.

High-Touch Solutions N.A. – Canada Business
As of December 31, 2025 and 2024, the Canada business reporting unit had goodwill of $119 million and $114 million, respectively. As part of our annual impairment testing, the Company compared the current results to forecasted expectations of the most recent quantitative analysis, along with analyzing macroeconomic conditions, current industry trends and transactions, and other market data of industry peers. The Company also performed various sensitivities over key assumptions, including projections of future revenue growth and operating expenditures used in the analysis. The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators for its Canada business, and concluded it was more likely than not its fair value exceeded its carrying value.

The balances and changes in the carrying amount of goodwill by segment are as follows (in millions of dollars):
High-Touch Solutions N.A.Endless AssortmentTotal
Balance at January 1, 2024
$315 $55 $370 
Translation(9)(6)(15)
Balance at December 31, 2024306 49 355 
Translation5 — 5 
Balance at December 31, 2025$311 $49 $360 

The Company's cumulative goodwill impairment as of December 31, 2025, was $32 million. No goodwill impairment was recorded for the twelve months ended December 31, 2025, 2024 and 2023.
The balances and changes in intangible assets – net are as follows (in millions of dollars):
As of December 31,
20252024
Weighted average lifeGross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Customer lists and relationships10.7 years$163 $157 $6 $164 $155 $9 
Trademarks, trade names and other16.5 years20 17 3 31 24 7 
Non-amortized trade names and otherIndefinite19 — 19 18 — 18 
Capitalized software4.5 years821 584 237 714 505 209 
Total intangible assets5.8 years$1,023 $758 $265 $927 $684 $243 

Amortization expense of intangible assets recorded in SG&A was $81 million, $70 million and $64 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Estimated amortization expense for future periods is as follows (in millions of dollars):
Year Expense
2026$76 
202768 
202853 
202932 
203012 
Thereafter5 
Total$246 
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Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 20, 2025
2023Feb 22, 2024
2020Feb 24, 2021
2019Feb 20, 2020
2018Feb 28, 2019
2017Feb 26, 2018
2016Feb 28, 2017
2015Feb 29, 2016

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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