2013 annual meeting of shareholders april 24, 2013

2013 Annual Meeting

of Shareholders

April 24, 2013

2

Jim Ryan Chairman, President and Chief Executive Officer

3

Agenda

Director nominations

Motion to ratify appointment of independent auditors

Say on Pay

Voting

Business review

Voting results

Questions

4

Nominees:

Board of Directors

5

Brian P. Anderson

Former Chief Financial Officer

OfficeMax and Baxter Healthcare

6

V. Ann Hailey

President, Chief Executive Officer and Chief Financial Officer

Famous Yard Sale, Inc.

7

William K. Hall

Founding Partner

Procyon Advisors LLP

8

Stuart L. Levenick

Group President

Caterpillar Inc.

9

John W. McCarter, Jr.

President Emeritus

The Field Museum of Natural History

10

Neil S. Novich

Former Chairman, President and Chief Executive Officer

Ryerson Inc.

11

Michael J. Roberts

Chief Executive Officer of LYFE Kitchen

Former Global President and Chief Operating Officer of McDonald’s Corporation

12

Gary L. Rogers

Former Vice Chairman

General Electric Company

13

Scott Santi

President and Chief Executive Officer

Illinois Tool Works Inc.

14

James D. Slavik

Chairman

Mark IV Capital, Inc.

15

16

Wilbur H. Gantz

President and Chief Executive Officer

PathoCapital LLC

17

Agenda

Director nominations

Motion to ratify appointment of independent auditors

Say on Pay

Voting

Business review

Voting results

Questions

18

Agenda

Director nominations

Motion to ratify appointment of independent auditors

Say on Pay

Voting

Business review

Voting results

Questions

19

Agenda

Director nominations

Motion to ratify appointment of independent auditors

Say on Pay

Voting

Business review

Voting results

Questions

20

Agenda

Director nominations

Motion to ratify appointment of independent auditors

Say on Pay

Voting

Business review

Voting results

Questions

21

Agenda

Director nominations

Motion to ratify appointment of independent auditors

Say on Pay

Voting

Business review

Voting results

Questions

22

Forward Looking Statement

This document contains statements that are forward-looking; i.e., not

historical facts. The forward-looking statements are based on the

company’s current expectations, and some of them are subject to risks

and uncertainties the outcome of which could result in actual future

performance being materially different from the performance indicated.

They should be read in conjunction with the company’s most recent

annual report, as well as the company’s Form 10-K and other reports

filed with the Securities and Exchange Commission containing a

discussion of the company’s business and of various factors that may

affect it.

23

Business Review

24

2012 Results

Sales $9.0 billion +11%

Earnings per share $9.52 +5%

EPS (adjusted) $10.43 +15%

2012 vs. 2011

25

Total Shareholder Return

0%

25%

50%

75%

100%

125%

150%

175%

200%

S&P 500

Grainger

To

tal S

ha

reh

old

er

Re

turn

2008 - 2012

26

First Quarter 2013 Results

Sales $2.3 billion +4%

Net earnings $212 million +13%

Earnings per share $2.94 +14%

% growth 2005 vs. 2004

2013 vs. 2012

27

Market Fragmentation

$140B North American MRO Market

Other Top 10 Distributors

24%All Other

Distributors 70%

Grainger 6%

28

Investing in the Foundation

Broad product assortment

New DCs

Chicago

Toronto

Japan

Improved information systems in

Mexico and Canada

29

Top Workplace

FORTUNE Magazine’s 100 Best

Companies to Work For

Canada’s 10 Most Admired Cultures

Award

Named to the Súper Empresas list

(Super Company)

30

Meeting Customer Needs

Investing in capabilities to

help customers improve

productivity

31

Growth Drivers

Product Line Expansion

Sales Force Expansion

Inventory Management

eCommerce

32

International

Worldwide MRO Market est. ~$570 Billion USD

33

Corporate Citizenship

Operating Responsibly

Valuing Our People

Serving Our Communities

Sustainability as a Priority

34

Cash Deployment (2002-2012) $ B

Illio

ns

Capital

Dividends

Share

Repurchases

Cash from

Operations Acquisitions

65%

35%

35

Share Repurchase

0

20

40

60

80

100

SHARES OUTSTANDING (millions of shares)

2007 2012

79

69

13% reduction

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

Div

ide

nd

s p

er

Sh

are

36

Dividend Increases

37

Quarterly dividend raised to $0.93 per share

42nd consecutive year of increased dividends

Dividend

38

39

Agenda

Director nominations

Motion to ratify appointment of independent auditors

Say on Pay

Voting

Business review

Voting results

Questions

40

Agenda

Director nominations

Motion to ratify appointment of independent auditors

Say on Pay

Voting

Business review

Voting results

Questions

2013 Annual Meeting

of Shareholders

April 24, 2013