W.W. GRAINGER, INC. [GWW] Filings

10-Q 1 gww-20210930.htm 10-Q gww-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission file number 1-5684

W.W. Grainger, Inc.

(Exact name of registrant as specified in its charter)

Illinois

36-1150280

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

100 Grainger Parkway,

Lake Forest,

Illinois

60045-5201

(Address of principal executive offices)

(Zip Code)

(847)

535-1000

(Registrant’s telephone number including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock	GWW	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☐

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

There were 51,520,047 shares of the Company’s Common Stock, par value $0.50, outstanding as of September 30, 2021.


	TABLE OF CONTENTS
		Page
	PART I - FINANCIAL INFORMATION

Item 1:	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Earnings for the Three and Nine Months Ended September 30, 2021 and 2020	3
	Condensed Consolidated Statements of Comprehensive Earnings for the Three and Nine Months Ended September 30, 2021 and 2020	4
	Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	6
	Condensed Consolidated Statements of Shareholders' Equity for the Three and Nine Months Ended September 30, 2021 and 2020	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2:	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4:	Controls and Procedures	30

	PART II - OTHER INFORMATION

Item 1:	Legal Proceedings	31
Item 1A:	Risk Factors	31
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 6:	Exhibits	34
Signatures		35

PART I – FINANCIAL INFORMATION

Item 1: Financial Statements

W.W. Grainger, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In millions of dollars and shares, except for per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net sales	$	3,372	$	3,018	$	9,663	$	8,856
Cost of goods sold	2,122		1,944		6,196		5,645
Gross profit	1,250		1,074		3,467		3,211
Selling, general and administrative expenses	812		694		2,337		2,467
Operating earnings	438		380		1,130		744
Other (income) expense:
Interest expense - net	22		23		65		72
Other - net	(6)		(5)		(19)		(16)
Total other expense - net	16		18		46		56
Earnings before income taxes	422		362		1,084		688
Income tax provision	107		106		271		118
Net earnings	315		256		813		570
Less: Net earnings attributable to noncontrolling interest	18		16		53		43
Net earnings attributable to W.W. Grainger, Inc.	$	297	$	240	$	760	$	527
Earnings per share:
Basic	$	5.68	$	4.43	$	14.48	$	9.74
Diluted	$	5.65	$	4.41	$	14.40	$	9.70
Weighted average number of shares outstanding:
Basic	51.8		53.6		52.1		53.6
Diluted	52.1		53.9		52.4		53.8
Cash dividends paid per share	$	1.62	$	1.53	$	4.77	$	4.41

The accompanying notes are an integral part of these financial statements.

W.W. Grainger, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In millions of dollars)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net earnings	$	315	$	256	$	813	570
Other comprehensive earnings (losses):
Foreign currency translation adjustments, net of reclassification to earnings	(17)		24		(43)		30


Postretirement benefit plan losses, net of tax benefit of $1, $1, $3, and $3, respectively	(4)		(2)		(10)		(8)
Other	—		—		1		4
Total other comprehensive earnings (losses)	(21)		22		(52)		26
Comprehensive earnings - net of tax	294		278		761		596
Less: Comprehensive earnings (losses) attributable to noncontrolling interest
Net earnings	18		16		53		43
Foreign currency translation adjustments	(1)		5		(19)		6
Total comprehensive earnings (losses) attributable to noncontrolling interest	17		21		34		49
Comprehensive earnings attributable to W.W. Grainger, Inc.	$	277	$	257	$	727	$	547

The accompanying notes are an integral part of these financial statements.

W.W. Grainger, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of dollars, except for share and per share amounts)


	As of
Assets	(Unaudited) September 30, 2021		December 31, 2020
Current assets
Cash and cash equivalents	$	328	$	585
Accounts receivable (less allowances for credit losses of $29 and $27, respectively)	1,742		1,474
Inventories - net	1,786		1,733
Prepaid expenses and other current assets	149		127


Total current assets	4,005		3,919
Property, buildings and equipment - net	1,429		1,395

Goodwill	387		391
Intangibles - net	233		228
Other assets	336		362
Total assets	$	6,390	$	6,295

Liabilities and shareholders' equity
Current liabilities

Current maturities of long-term debt	$	—	$	8
Trade accounts payable	933		779
Accrued compensation and benefits	259		307

Accrued expenses	336		305
Income taxes payable	22		42
Total current liabilities	1,550		1,441
Long-term debt (less current maturities)	2,372		2,389
Deferred income taxes and tax uncertainties	88		110
Other non-current liabilities	263		262
Shareholders' equity
Cumulative preferred stock – $5 par value – 12,000,000 shares authorized; none issued nor outstanding	—		—
Common Stock – $0.50 par value – 300,000,000 shares authorized; issued 109,659,219 shares	55		55
Additional contributed capital	1,255		1,239
Retained earnings	9,301		8,779
Accumulated other comprehensive losses	(94)		(61)
Treasury stock, at cost – 58,139,172 and 57,134,828 shares, respectively	(8,690)		(8,184)
Total W.W. Grainger, Inc. shareholders’ equity	1,827		1,828
Noncontrolling interest	290		265
Total shareholders' equity	2,117		2,093
Total liabilities and shareholders' equity	$	6,390	$	6,295

The accompanying notes are an integral part of these financial statements.

W.W. Grainger, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of dollars)

(Unaudited)


	Nine Months Ended
	September 30,
	2021		2020
Cash flows from operating activities:
Net earnings	$	813	$	570
Provision for credit losses	12		18
Deferred income taxes and tax uncertainties	(7)		9
Depreciation and amortization	137		137
Impairment of goodwill, intangible and long-lived assets	—		177
Net (gains) losses from sale or redemption of assets and business divestitures	(3)		104
Stock-based compensation	33		36

Subtotal	172		481
Change in operating assets and liabilities:
Accounts receivable	(298)		(145)
Inventories	(64)		(222)
Prepaid expenses and other assets	(1)		(29)
Trade accounts payable	167		145
Accrued liabilities	(13)		(13)
Income taxes - net	(42)		(19)
Other non-current liabilities	(10)		19
Subtotal	(261)		(264)
Net cash provided by operating activities	724		787
Cash flows from investing activities:
Additions to property, buildings, equipment and intangibles	(197)		(152)
Proceeds from sale or redemption of assets and business divestitures	17		22
Other - net	—		(2)


Net cash used in investing activities	(180)		(132)
Cash flows from financing activities:

Borrowings under lines of credit	—		12
Payments against lines of credit	—		(65)
Proceeds from long-term debt	—		1,583
Payments of long-term debt	(8)		(1,361)
Proceeds from stock options exercised	31		47
Payments for employee taxes withheld from stock awards	(29)		(16)
Purchases of treasury stock	(525)		(101)
Cash dividends paid	(261)		(246)
Other - net	2		—
Net cash used in financing activities	(790)		(147)
Exchange rate effect on cash and cash equivalents	(11)		(9)
Net change in cash and cash equivalents	(257)		499
Cash and cash equivalents at beginning of year	585		360
Cash and cash equivalents at end of period	$	328	$	859

The accompanying notes are an integral part of these financial statements.

W.W. Grainger, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In millions of dollars, except for per share amounts)

(Unaudited)


	Common Stock		Additional Contributed Capital		Retained Earnings		Accumulated Other Comprehensive Earnings (Losses)		Treasury Stock		Noncontrolling Interest		Total
Balance at January 1, 2020	$	55	$	1,182	$	8,405	$	(154)	$	(7,633)	$	205	$	2,060
Stock-based compensation	—		10		—		—		13		—		23
Purchases of treasury stock	—		—		—		—		(100)		—		(100)
Net earnings	—		—		173		—		—		12		185
Other comprehensive earnings (losses)	—		—		—		(63)		—		3		(60)

Cash dividends paid ($1.44 per share)	—		—		(78)		—		—		—		(78)
Balance at March 31, 2020	$	55	$	1,192	$	8,500	$	(217)	$	(7,720)	$	220	$	2,030
Stock-based compensation	—		6		—		—		11		—		17
Purchases of treasury stock	—		—		—		—		—		(1)		(1)
Net earnings	—		—		114		—		—		15		129
Other comprehensive earnings (losses)	—		—		—		66		—		(2)		64

Cash dividends paid ($1.44 per share)	—		—		(78)		—		—		(9)		(87)
Balance at June 30, 2020	$	55	$	1,198	$	8,536	$	(151)	$	(7,709)	$	223	$	2,152
Stock-based compensation	—		16		—		—		11		—		27

Net earnings	—		—		240		—		—		16		256
Other comprehensive earnings (losses)	—		—		—		17		—		5		22

Cash dividends paid ($1.53 per share)	—		—		(82)		—		—		—		(82)
Balance at September 30, 2020	$	55	$	1,214	$	8,694	$	(134)	$	(7,698)	$	244	$	2,375

The accompanying notes are an integral part of these financial statements.

W.W. Grainger, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In millions of dollars, except for per share amounts)

(Unaudited)


	Common Stock		Additional Contributed Capital		Retained Earnings		Accumulated Other Comprehensive Earnings (Losses)		Treasury Stock		Noncontrolling Interest		Total
Balance at January 1, 2021	$	55	$	1,239	$	8,779	$	(61)	$	(8,184)	$	265	$	2,093
Stock-based compensation	—		9		—		—		5		—		14
Purchases of treasury stock	—		—		—		—		(175)		—		(175)
Net earnings	—		—		238		—		—		17		255
Other comprehensive earnings (losses)	—		—		—		(20)		—		(18)		(38)

Reclassification due to the adoption of ASU 2019-12	—		—		12		—		—		—		12
Cash dividends paid ($1.53 per share)	—		—		(81)		—		—		—		(81)
Balance at March 31, 2021	$	55	$	1,248	$	8,948	$	(81)	$	(8,354)	$	264	$	2,080
Stock-based compensation	—		(1)		—		—		12		1		12
Purchases of treasury stock	—		—		—		—		(107)		(1)		(108)
Net earnings	—		—		225		—		—		18		243
Other comprehensive earnings (losses)	—		—		—		7		—		—		7
Capital contribution	—		—		—		—		—		2		2
Cash dividends paid ($1.62 per share)	—		—		(84)		—		—		(11)		(95)
Balance at June 30, 2021	$	55	$	1,247	$	9,089	$	(74)	$	(8,449)	$	273	$	2,141
Stock-based compensation	—		8		—		—		1		—		9
Purchases of treasury stock	—		—		—		—		(242)		—		(242)
Net earnings	—		—		297		—		—		18		315
Other comprehensive earnings (losses)	—		—		—		(20)		—		(1)		(21)

Cash dividends paid ($1.62 per share)	—		—		(85)		—		—		—		(85)
Balance at September 30, 2021	$	55	$	1,255	$	9,301	$	(94)	$	(8,690)	$	290	$	2,117

The accompanying notes are an integral part of these financial statements.

W.W. Grainger, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - BACKGROUND AND BASIS OF PRESENTATION

W.W. Grainger, Inc. is a broad line, business-to-business distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America (N.A.), Japan and the United Kingdom (U.K.). In this report, the words “Company” or “Grainger” mean W.W. Grainger, Inc. and its subsidiaries, except where the context makes it clear that the reference is only to W.W. Grainger, Inc. itself and not its subsidiaries.

The Company's Condensed Consolidated Financial Statements (Financial Statements) and the related notes are unaudited and should be read in conjunction with the consolidated financial statements and associated notes for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 24, 2021 (2020 Form 10-K). The Condensed Consolidated Balance Sheet as of December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all of the disclosures required by accounting principles generally accepted in the United States of America (U.S.) for complete financial statements.

The unaudited financial information reflects all adjustments (primarily consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of the statements contained in this report.

Changes to Reportable Segments

Effective January 1, 2021, Grainger's two reportable segments are High-Touch Solutions N.A. and Endless Assortment. On March 8, 2021, the Company provided investors with segment summary historical financial information and segment historical data that is consistent with its new reportable segment structure and reflective of the intersegment accounting policies described in Note 10 - Segment Information.

The Company's High-Touch Solutions N.A. segment provides value-added MRO solutions that are rooted in deep product knowledge and customer expertise. This segment includes the Grainger-branded businesses in the U.S., Canada, Mexico and Puerto Rico. The Company’s Endless Assortment segment provides a simple, transparent and streamlined experience for customers to shop millions of products online. This segment includes the Company’s Zoro Tools, Inc. (Zoro) businesses in the U.S. and U.K. and MonotaRO Co., Ltd. (MonotaRO), which operates predominately in Japan. The remaining international High-Touch Solutions businesses, operating primarily in the U.K., are classified as “Other” to reconcile to consolidated results. These businesses individually do not meet the criteria of a reportable segment.

NOTE 2 - NEW ACCOUNTING STANDARDS

Accounting Pronouncements Recently Adopted

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU clarifies and simplifies accounting for income taxes by eliminating certain exceptions for intra-period tax allocation principles, the methodology for calculating income tax rates in an interim period, and recognition of deferred taxes for outside basis differences in an investment, among other updates. The effective date of this ASU was for fiscal years and interim periods beginning after December 15, 2020. The Company adopted this ASU effective January 1, 2021 and it did not have a material impact on the Financial Statements.

In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), Clarifying the Interactions between Topic 321, Topic 323 and Topic 815. This ASU simplifies the understanding and application of the codification topics by eliminating inconsistencies and providing clarifications. The effective date of this ASU was for fiscal years and interim periods beginning after December 15, 2020. The Company adopted this ASU effective January 1, 2021 and it did not have a material impact on the Financial Statements.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements. These amendments improve consistency by amending the codification to include all disclosure guidance in the appropriate disclosure sections and clarifies application of various provisions in the codification by amending and adding new headings, cross referencing to other guidance and refining or correcting terminology. The effective date of this ASU was for fiscal

W.W. Grainger, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

years and interim periods beginning after December 15, 2020. The Company adopted this ASU effective January 1, 2021 and it did not have a material impact on the Financial Statements.

Accounting Pronouncements Recently Issued

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting as modified by subsequently issued ASU 2021-01. This update provides optional expedients and exceptions for applying generally accepted accounting principles to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and generally can be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is evaluating the impact of this ASU and does not expect a material impact on the Financial Statements.

NOTE 3 - REVENUE

Company revenue is primarily comprised of MRO product sales and related activities, such as freight and services. Total service revenue is not material and accounted for approximately 1% of the Company's revenue for the three and nine months ended September 30, 2021 and 2020, respectively.

Grainger serves a large number of customers in diverse industries, which are subject to different economic and market-specific factors. The Company's presentation of revenue by segment and industry most reasonably depicts how the nature, amount, timing and uncertainty of Company revenue and cash flows are affected by economic and market-specific factors. In addition, the segments have unique underlying risks associated with customer purchasing behaviors. In the High-Touch Solutions N.A. segment, more than two-thirds of revenue is derived from customer contracts whereas in the Endless Assortment segment, a majority of revenue is derived from customer spot buys. The following table presents the Company's percentage of revenue by reportable segment and by major customer industry:


	Three Months Ended September 30,
	2021						2020
	High-Touch Solutions N.A.		Endless Assortment		Total Company(2)		High-Touch Solutions N.A.		Endless Assortment		Total Company(2)
Contractors	9	%	15	%	10	%	8	%	15	%	10	%
Commercial	9	%	15	%	10	%	9	%	15	%	10	%
Government	18	%	3	%	15	%	22	%	3	%	18	%
Healthcare	7	%	2	%	6	%	8	%	2	%	6	%
Manufacturing	29	%	30	%	29	%	27	%	27	%	28	%
Retail/Wholesale	9	%	10	%	10	%	9	%	10	%	9	%
Transportation	5	%	3	%	5	%	5	%	3	%	5	%
Others(1)	14	%	22	%	15	%	12	%	25	%	14	%
Total	100	%	100	%	100	%	100	%	100	%	100	%
Percent of Total Company Revenue	79	%	19	%	100	%	79	%	19	%	100	%

(1) Others primarily includes revenue from industries and customers that are not material individually, including agriculture, mining, natural resources and resellers not aligned to a major industry segment.

(2) Total Company includes other businesses, which includes the Cromwell business in the U.K., as well as the China business in the period prior to its divestiture in the third quarter of 2020. Other businesses account for approximately 2% of revenue for the three months ended September 30, 2021 and September 30, 2020.

W.W. Grainger, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	Nine Months Ended September 30,
	2021						2020
	High-Touch Solutions N.A.		Endless Assortment		Total Company(2)		High-Touch Solutions N.A.		Endless Assortment		Total Company(2)
Contractors	9	%	15	%	10	%	9	%	15	%	10	%
Commercial	9	%	15	%	10	%	9	%	15	%	9	%
Government	19	%	3	%	15	%	20	%	3	%	16	%
Healthcare	7	%	2	%	6	%	9	%	2	%	7	%
Manufacturing	30	%	29	%	29	%	28	%	29	%	29	%
Retail/Wholesale	9	%	10	%	10	%	9	%	10	%	9	%
Transportation	5	%	3	%	5	%	5	%	3	%	5	%
Others(1)	12	%	23	%	15	%	11	%	23	%	15	%
Total	100	%	100	%	100	%	100	%	100	%	100	%
Percent of Total Company Revenue	78	%	20	%	100	%	78	%	18	%	100	%

(2) Total Company includes other businesses, which includes the Cromwell business in the U.K., as well as the Fabory and China businesses in the period prior to their divestitures in the second and third quarter of 2020, respectively. Other businesses account for approximately 2% and 4% of revenue for the nine months ended September 30, 2021 and September 30, 2020.

Total accrued sales returns were approximately $41 million and $31 million as of September 30, 2021 and December 31, 2020, respectively and are reported as a reduction of Accounts receivable, net. Total accrued sales incentives were approximately $65 million and $58 million as of September 30, 2021 and December 31, 2020 and are reported as part of Accrued expenses. The Company had no material unsatisfied performance obligations, contract assets or liabilities as of September 30, 2021 and December 31, 2020.

NOTE 4 - PROPERTY, BUILDINGS AND EQUIPMENT

Property, buildings and equipment consisted of the following (in millions of dollars):


	As of
	September 30, 2021		December 31, 2020
Land	$	329	$	329
Building, structures and improvements	1,445		1,330
Furniture, fixtures, machinery and equipment	1,566		1,878
Property, buildings and equipment	$	3,340	$	3,537
Less: Accumulated depreciation and amortization	1,911		2,142
Property, buildings and equipment - net	$	1,429	$	1,395

NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS

Grainger tests reporting units' goodwill and intangible assets for impairment annually during the fourth quarter and more frequently if impairment indicators exist. Accordingly, Grainger performs quarterly qualitative assessments of significant events and circumstances such as reporting units' historical and current results, assumptions regarding future performance, strategic initiatives and overall economic factors, including the current global outbreak of the Coronavirus (COVID-19 pandemic) and macro-economic developments, to determine the existence of potential indicators of impairment and assess if it is more likely than not that the fair value of reporting units' goodwill or intangible assets is less than their carrying value. If indicators of impairment are identified, a quantitative impairment test is performed. The Company did not identify any significant events or changes in circumstances that indicated

W.W. Grainger, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

the existence of impairment indicators during the three and nine months ended September 30, 2021. As such, quantitative assessments were not required.

The balances and changes in the carrying amount of Goodwill (net of cumulative goodwill impairments) by segment are as follows (in millions of dollars):


	High-Touch Solutions N.A		Endless Assortment		Other		Total
Balance at January 1, 2020	$	318	$	52	$	59	$	429
Acquisition	—		15		—		15
Impairment	—		—		(58)		(58)
Translation	3		3		(1)		5
Balance at December 31, 2020	321		70		—		391


Translation	—		(4)		—		(4)
Balance at September 30, 2021	$	321	$	66	$	—	$	387

The cumulative goodwill impairments as of September 30, 2021, were $137 million and consisted of $32 million within High-Touch Solutions N.A. and $105 million in Other. During the first quarter of 2020, the Company recorded $58 million of impairment charges in Selling, general and administrative expenses (SG&A) in connection with the impairment of Fabory's goodwill. The impairment is presented in Other in the table above. The Company divested the Fabory business during the second quarter of 2020. Grainger's current business portfolio had no impairments to goodwill for the three and nine months ended September 30, 2021 and 2020.

The balances in Intangible assets, net are as follows (in millions of dollars):


		September 30, 2021						December 31, 2020
	Weighted average life	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Customer lists and relationships	11.8 years	$	221	$	175	$	46	$	223	$	171	$	52
Trademarks, trade names and other	14.1 years	36		24		12		36		22		14
Non-amortized trade names and other	Indefinite	26		—		26		28		—		28
Capitalized software	4.2 years	510		361		149		461		327		134
Total intangible assets	6.9 years	$	793	$	560	$	233	$	748	$	520	$	228

W.W. Grainger, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 6 - DEBT

There was no short-term debt as of September 30, 2021 and December 31, 2020.

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


	As of September 30, 2021				As of December 31, 2020
	Carrying Value		Fair Value(4)		Carrying Value		Fair Value(4)
4.60% senior notes due 2045(1)	$	1,000	$	1,298	$	1,000	$	1,343
3.75% senior notes due 2046(1)	400		463		400		479
4.20% senior notes due 2047(1)	400		497		400		514
1.85% senior notes due 2025(2)	500		515		500		526



Japanese Yen term loan(3)	81		81		87