Company: GWW
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000277135-25-000010
Chunk: 60

Company: W.W. GRAINGER, INC.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 8
Chunk 60
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Change in valuation allowance(1)                                     2                             6                             7     
Other – net                                                       (35)                          (23)                          (10)     
Income tax expense                                                $595                          $597                          $533     
Effective tax rate                                                23.0    %                     23.9    %                     24.8    %
(1) Net of changes in related tax attributes.                                                                                          
The decrease to the Company's effective tax rate for the year ended December 31, 2024 was primarily driven by the expiration of a statute of limitation period in 2024.
Foreign Undistributed Earnings
Estimated gross undistributed earnings of foreign subsidiaries as of December 31, 2024 and 2023, totaled $651 million and $544 million, respectively. The Company considers these undistributed earnings permanently reinvested in its foreign operations and is not recording a deferred tax liability for any foreign withholding taxes on such amounts. If at some future date the Company ceases to be permanently reinvested in its foreign subsidiaries, the Company may be subject to foreign withholding and other taxes on these undistributed earnings and may need to record a deferred tax liability for any outside basis difference in its investments in its foreign subsidiaries.
Tax Uncertainties
The Company recognizes in the financial statements a provision for tax uncertainties, resulting from application of complex tax regulations in multiple tax jurisdictions. 
 60

The changes in the liability for tax uncertainties, excluding interest, are as follows (in millions of dollars):

                                                                                                       For the Years Ended December 31,
2024                                                                                                 2023                          2022
Balance at beginning of year                                       $42                           $41                           $38     
Additions for tax positions related to the current year              3                             6                             4     
Additions for tax positions of prior years                           —                             1                             2     
Reductions for tax positions of prior years                        (1)                           (1)                             —     
Reductions due to statute lapse                                   (22)                           (3)                           (2)     
Settlements, audit payments, refunds – net                         (1)                           (2)                           (1)     
Balance at end of year                                             $21                           $42                           $41     
The Company classifies the liability for tax uncertainties in deferred income taxes and tax uncertainties. Included in
this amount is $4 million as of December 31, 2024, of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing