W.W. GRAINGER, INC.

PART I – FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In millions of dollars)

CONDENSED CONSOLIDATED BALANCE SHEETS

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of dollars)

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

W.W. Grainger, Inc. is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America (N.A.) and Japan. In the fourth quarter of 2025, Grainger exited the United Kingdom (U.K.) market by completing the sale of the Cromwell business and closing the Zoro U.K. business. In this report, the words “Grainger” or “Company” 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.

Basis of Presentation

The Company's Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and therefore do not include all information and disclosures normally included in the annual Consolidated Financial Statements. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from these estimated amounts. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

The Condensed Consolidated Balance Sheet at December 31, 2025, has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 19, 2026 (2025 Form 10-K).

There were no material changes to the Company’s significant accounting policies from those disclosed in Note 1 ofthe Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company's 2025 Form 10-K.

NOTE 2 -REVENUE

Grainger serves a large number of customers in diverse industries, which are subject to different economic and market-specific factors. The Company's revenue is primarily comprised of MRO product sales and related activities.

The Company's presentation of revenue by reportable segment and customer industry most reasonably depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic and market-specific factors. The majority of Company revenue originates from contracts with a single performance obligation to deliver products, whereby performance obligations are satisfied when control of the product is transferred to the customer per the arranged shipping terms.

The following tables present the Company's percentage of revenue by reportable segment and customer industry:

Total accrued sales incentives are recorded in Accrued expenses and were approximately $121 million and $115 million as of June 30, 2026 and December 31, 2025, respectively.

The Company did not have any material unsatisfied performance obligations, contract assets or liabilities as of June 30, 2026 and December 31, 2025.

NOTE 3 -PROPERTY, BUILDINGS AND EQUIPMENT

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

NOTE 4 -GOODWILL AND OTHER INTANGIBLE ASSETS

The Company did not identify any significant events or changes in circumstances that indicated the existence of impa irment indicators during the three and six months ended June 30, 2026. As such, quantitative assessments were not required.

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

No goodwill impairment was recorded for the three and six months ended June 30, 2026 and 2025.

The balances and changes in intangible assets – net are as follows (in millions of dollars):

NOTE 5 -DEBT

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

Senior Notes

Between 2015 and 2024, Grainger issued $2.3 billion in unsecured debt (Senior Notes), net of the$500 million principal repayment for the 1.85% Senior Notes that matured in February 2025, 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.

The Company incurred debt issuance costs related to its 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 June 30, 2026 and December 31, 2025, the cumulative unamortized costs were $20 million and$21 million, respectively.

Japanese Yen Term Loans

In 2026 and 2025, MonotaRO entered into ¥7.5 billion and ¥13 billion, respectively, term loan agreements to fund the expansion of its distribution center (DC) network. The Japanese Yen term loans mature in 2035, payable in equal monthly principal installments from September 2028 through June 2035. The weighted average interest rates on the 2026 and 2025 term loans are 1.74% and 1.27%, respectively.

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.

NOTE 6 -SEGMENT INFORMATION

Grainger'stwo reportable segments are High-Touch Solutions N.A. (HTSNA) and Endless Assortment (EA). These reportable segments align with Grainger's go-to-market strategies and bifurcated business models of high-touch solutions and endless assortment that generate sales primarily through the distribution of MRO products. Theremaining businesses are classified as Other to reconcile to consolidated results. These businesses individually and in the aggregate do not meet the criteria of a reportable segment.

The operating and reportable segments reflect the way the chief operating decision maker (CODM) evaluates the business. All expenses directly attributable to each reportable segment are included in the operating results for each segment. The CODM is not regularly provided and does not evaluate the segments using total asset or capital expenditure information and it is therefore not disclosed. For further discussion on the CODM, see Note 13 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company’s 2025 Form 10-K.

The following is a summary of segment results (in millions of dollars):

The following is depreciation, amortization and non-cash lease expense (in millions of dollars):

The following is revenue by geographic location (in millions of dollars):

The Company is a broad line distributor of MRO products. Products are regularly added and removed from the Company's inventory assortment. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered, including the evolving list of products stocked and additional products available online but not stocked. For further information regarding the Company's sales by segment and customer industry, see Note 2 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q.

NOTE 7 -CONTINGENCIES AND LEGAL MATTERS

From time to time, the Company is involved in various legal and administrative proceedings, including claims related to: product liability, safety or compliance; privacy and cybersecurity matters; negligence; contract disputes; environmental issues; unclaimed property; wage and hour laws; intellectual property; advertising and marketing; consumer protection; pricing (including disaster or emergency declaration pricing statutes); employment practices; regulatory compliance, including trade and export matters; anti-bribery and corruption; and other matters and actions brought by team members, consumers, competitors, suppliers, customers, governmental entities and other third parties. It is not expected that the ultimate resolution of any of these matters will have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position or results of operations.

NOTE 8 -SUBSEQUENT EVENTS

On July 29, 2026, the Company’s Board of Directors declared a quarterly dividend of $2.49 per share, payable September 1, 2026, to shareholders of record on August 10, 2026.