v3.26.1
Segment and net sales information
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Segment and net sales information Segment and net sales information
The Company reports its financial results of operations on a geographical basis in the following two reportable segments: United States and Canada. Each segment generally derives its revenues in the same manner as described in Note 1, Summary of significant accounting policies included in the Transition Report. The Company uses adjusted operating profit as its measure of segment profit. Certain income and expenses are not allocated to the Company’s segments and, thus, the information that management uses to make operating decisions and assess performance does not reflect such amounts.
This segment structure reflects the financial information and reports used by the Company’s management, specifically its chief operating decision makers (“CODM”), to make decisions regarding the Company’s business, including resource allocations and performance assessments, as well as the current operating focus in compliance with ASC 280, Segment Reporting. The Company’s CODM are the Chief Executive Officer and the Chief Financial Officer.
The significant expenses reviewed by the CODM include operating costs and costs of sales. The operating costs evaluated by the CODM are primarily SG&A, including depreciation expense on long lived assets and software amortization expense.
The CODM use segment adjusted operating profit to evaluate performance and allocate resources (including employees, property, and financial or capital resources) in conjunction with the annual budget process, as well as during periodic business reviews.
Segment results were as follows:
Three months ended
March 31,
(In millions)20262025
Net sales:
United States$7,146 $6,904 
Canada326 309 
Total net sales7,472 7,213 
Cost of sales:
United States(4,915)(4,772)
Canada(239)(225)
Operating costs:
United States(1,575)(1,521)
Canada(82)(78)
Adjusted operating profit:
United States656 611 
Canada5 6 
Total segment adjusted operating profit661 617 
Central and other costs(1)
(14)(20)
Restructuring activities(2)
(2)(51)
Amortization of acquired intangible assets(33)(39)
Interest expense, net(45)(46)
Other (expense) income, net(7)8 
Income before income taxes$560 $469 
(1)Primarily includes SG&A that is not related to a segment.
(2)See Note 12, Restructuring expenses for further information.
Capital expenditures and depreciation and amortization by segment were as follows:
Three months ended
March 31,
(In millions)20262025
Capital expenditures:
United States$90 $72 
Canada2 1 
Total capital expenditures$92 $73 
Depreciation and amortization:
United States$92 $89 
Canada5 4 
Total depreciation and amortization(1)
$97 $93 
(1) Includes amortization of acquired intangible assets of $33 million and $39 million in the three months ended March 31, 2026 and 2025, respectively. These amounts are not included in segment adjusted operating profit.
Assets by segment included:
As of
(In millions)March 31, 2026December 31, 2025
Assets:
United States$15,872 $15,444 
Canada929 946 
Total segment assets16,801 16,390 
Corporate988 762 
Total assets$17,789 $17,152 
Long-lived assets are as follows:
As of
(In millions)March 31, 2026December 31, 2025
Long-lived assets:
United States$1,887 $1,865 
Canada44 46 
Total long-lived assets$1,931 $1,911 
Net sales disaggregation
A disaggregation of net sales by customer group in the United States is as follows:
Three months ended
March 31,
20262025
Customer Group
Waterworks23 %22 %
Ferguson Home21 %22 %
Commercial/Mechanical16 %14 %
Residential Trade Plumbing15 %16 %
HVAC11 %11 %
Industrial7 %7 %
Facilities Supply4 %5 %
Fire & Fabrication3 %3 %
Total United States100 %100 %
The Company does not disaggregate sales for Canada based on materiality. No sales to an individual customer accounted for more than 10% of net sales during any of the periods presented.
The Company is a value-added distributor in North America, providing a wide range of products from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more. We offer a broad line of products, and items are regularly added to and removed from the Company's inventory. 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.