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W.W. Grainger, Inc. (NYSE:GWW)

November 2012 Sales Results Conference

December 12, 2012 8:00 am ET

Executives

William D. Chapman - Director of Investor Relations

William D. Chapman

Hi. This is Bill Chapman, Senior Director of Investor Relations for Grainger. Thank you for accessing this recorded message with information regarding Grainger's November 2012 sales results.

I'll begin by reminding you that certain statements and projections of future results made in this webcast constitute forward-looking information. This information is based on current expectations of market conditions and competitive and regulatory environments and involves risk and uncertainty. Please see our 2011 Form 10-K for a discussion of factors as they relate to forward-looking statements.

Total company sales increased 8% versus November 2011. These results included a 3 percentage point contribution from price, 2 percentage points increase from the sales of hurricane-related products in the Northeast United States, 2 percentage points from volume and 1 percentage point from acquisitions. November 2012 had 21 selling days, the same as November 2011.

Now let's turn our attention to sales results by segment. As a reminder, monthly sales history by reporting segment for the prior 2 years is available on the Investor Relations website, along with a summary of selling days by month. Please note that although some of our businesses have a different number of selling days due to local holidays, we use the number of selling days in the United States as the basis for our calculation of daily sales.

I'll begin with our largest segment, the United States. Daily sales for the U.S. segment increased 6%, consisting of 3 percentage points from price and 3 percentage points from sales of hurricane-related products. Our multi-channel model and industry-leading customer service levels are enabling us to gain market share as represented by the combination of price and volume. The sales contribution related to the aftermath of Hurricane Sandy demonstrates the strength of our relationships with suppliers and customers, the connectivity of our branch network and the high availability of products we provide.

For our customer end markets in the United States, sales performed as follows. Light Manufacturing and Commercial were up in the high single digits. Government, Heavy Manufacturing and Retail were up in the mid single digits. Contractor and Reseller were up in the low single digits, and Natural Resources was down in the mid single digits.

In Canada, our Acklands-Grainger business hit a milestone in November, surpassing $1 billion in sales for the year. This segment saw November sales increase 12% in U.S. currency, including a 7 percentage point contribution from volume, 3 percentage points from foreign exchange and 2 percentage points from price. In local currency, sales increased to 8% on a rounded basis.

Strong growth to customers in the Commercial, Construction and Oil and Gas end markets contributed to this performance. Despite early signs of economic slowing in Canada, we remain pleased with this performance.

Daily sales for our Other Businesses, which includes operations in Asia, Europe and Latin America increased 17% in November. This growth consisted of 14 percentage points from volume and price and 7 percentage points from acquisitions, partially offset by a 4 percentage point decline from unfavorable foreign exchange.

Looking forward, daily sales growth for the company in December is currently tracking below the growth reported in November. We expect that sales of products related to the hurricane cleanup in the Northeast will continue to boost sales in the near term.

Specific to December, keep in mind that both Christmas and New Year's Day fall on Tuesdays. We will be open for business on Monday, December 24 and Monday, December 31, but are forecasting a minimal sales contribution on either day. While we may have an extra selling day in the 2012 fourth quarter versus the 2011 fourth quarter, the holiday calendar will be working against us.

Please mark your calendar for our fourth quarter earnings release on Thursday, December 24. If you have any questions, please contact Laura Brown, Senior Vice President, Communications and Investor Relations at (847) 535-0409, Casey Darby, Senior Manager of Investor Relations (847) 535-0099 or me at (847) 535-0881. Thank you.

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