W.W. GRAINGER, INC.GWW

W.W. GRAINGER, INC. Leases Disclosure

10-KFiled Feb 19, 20262 min read
LEASES
The Company leases certain properties, buildings and equipment (including branches, warehouses, DCs and office space) under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists mainly of operating leases that expire at various dates through 2037.

Information related to operating leases is as follows (in millions of dollars):
As of December 31,
20252024
Right-of-use assets
Operating lease right-of-use$345 $371 
Operating lease liabilities
Operating lease liability73 78 
Long-term operating lease liability301 327 
Total operating lease liabilities$374 $405 

As of December 31,
20252024
Weighted average remaining lease term6 years6 years
Weighted average incremental borrowing rate2.82 %2.57 %
Cash paid for operating leases$104 $96 
Right-of-use assets obtained in exchange for operating lease obligations$69 $48 

Rent expense was $106 million, $103 million and $102 million for 2025, 2024 and 2023, respectively. These amounts are net of sublease income of $3 million for 2025, and $2 million for 2024 and 2023.
The remaining maturity of existing lease liabilities as of December 31, 2025 are as follows (in millions of dollars):

YearOperating Leases
2026$86 
202779 
202871 
202959 
203048 
Thereafter69 
Total lease payments
412 
Less interest
38 
Present value of lease liabilities
$374 

As of December 31, 2025 and 2024, the Company's finance leases and service contracts with lease arrangements were not material. Finance leases are reported in Property, buildings and equipment – net, and as a short and long-term finance lease liability in Accrued expenses and Other non-current liabilities.

Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 20, 2025
2023Feb 22, 2024
2022Feb 21, 2023
2021Feb 23, 2022
2020Feb 24, 2021
2019Feb 20, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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