Grainger_2005_AR1

Grainger_2005_AR1 - People rely on us Businesses depend on...

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People rely on us Businesses depend on us Communities trust us 2005 Annual Report
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Grainger plays a critical role in keeping the North American economy going. As the leading broad-line supplier of facilities maintenance products – motors, tools, lighting, fasteners, safety gear, material handling and other equipment – Grainger is the reliable resource for people, businesses and communities. In addition, Grainger’s healthy balance sheet, strong cash flow and commitment to increasing shareholder value make the company’s stock an attractive investment. CONTENTS 1 Financial Highlights 2-3 Chairman’s Letter 4-5 People Rely on Us 6-7 Businesses Depend on Us 8-9 Communities Trust Us 10-11 Historical Financial Summary 12 Board of Directors, Management K1-K66 Form 10-K 13 Shareholder and Media Information BC Grainger at a Glance People rely on us Businesses depend on us Communities trust us On the Cover The Grainger branch in Mobile, Alabama, provided essential products to businesses and institutions in the local community and served as a staging area to deliver generators, pumps, chainsaws and other supplies to customers in need following Hurricane Katrina. The new branch, which opened the day before the hurricane hit, is one of nearly 20 branches that serve the Gulf Coast. These branches, along with Grainger’s logistics network, helped the company provide more than 70 full truckloads of emergency supplies to the region within days. W.W. GRAINGER, INC. AND SUBSIDIARIES Growing shareholder value drives us
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(In thousands of dollars, except for per share amounts) 2005 2004 % Change Income Statement Net sales $5,526,636 $5,049,785 9.4%÷« Gross profit 2,161,541 1,906,652 13.4%÷« As a percent of net sales 39.1% 37.8%÷« Operating earnings 518,989 441,254 17.6%÷« As a percent of net sales 9.4%÷« 8.7%÷ Earnings before income taxes 532,674 445,139 19.7%÷« As a percent of net sales 9.6%÷« 8.8%÷ Net earnings $346,324 $286,923 20.7%÷« As a percent of net sales 6.3%÷« 5.7%÷« Per Share Earnings – diluted $3.78 $3.13 20.8%÷« Cash dividends paid 0.920 0.785 17.2%÷« Average number of shares outstanding – diluted 91,588,295 91,673,375 (0.1)% Balance Sheet and Cash Flow Working capital $1,270,904 $1,092,279 16.4%÷« Cash flow from operations 432,543 406,487 6.4%÷« Additions to property, buildings and equipment – net 112,297 128,276 (12.5)% Financial Ratios and Other Data Return on average shareholders’ equity 15.9%÷« 14.7%÷« Return on average total capitalization 15.9% 14.2%÷ Return on invested capital (ROIC) * 25.9% 24.2%÷ Number of branches 589 582 Number of employees 16,732 15,523 Financial Highlights 02 2.24 03 2.4 6 04 3 . 13 05 3 . 78 Earnings per Share – Diluted DOLLARS 01 1 . 8 4 W.W. GRAINGER, INC. AND SUBSIDIARIES Sales 01 4.75 02 4. 6 4 03 4. 6 7 04 5. 0 5 05 5.5 3 DOLLARSINBILLIONS 01 10.2 02 13.6 03 12.3 04 1 4 .2 05 1 5 . 9 Return on Average Total Capitalization PERCENT 01 18.3 02 22 . 7 03 20 . 6 04 24 . 2 05 25 . 9 Return on Invested Capital * See page13 for definition * 1
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• We expanded our sales force by more than 450 representatives throughout the United States to grow sales with even more customers. Our stratified sales coverage builds deeper relationships with thousands of customers. We will continue to further penetrate customer
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Grainger_2005_AR1 - People rely on us Businesses depend on...

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