v3.26.1
Segment and net sales information
 6 Months Ended
Jun. 30, 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 endedSix months ended
June 30,June 30,
(In millions)2026202520262025
Net sales:
United States$8,343 $7,947 $15,489 $14,851 
Canada408 416 734 725 
Total net sales8,751 8,363 16,223 15,576 
Cost of sales:
United States(5,736)(5,448)(10,651)(10,220)
Canada(303)(302)(542)(527)
Operating costs:
United States(1,682)(1,600)(3,257)(3,121)
Canada(83)(91)(165)(169)
Adjusted operating profit:
United States925 899 $1,581 $1,510 
Canada22 23 27 29 
Total segment adjusted operating profit947 922 1,608 1,539 
Central and other costs(1)
(15)(16)(29)(36)
Restructuring activities(2)
(2)(25)(4)(76)
Amortization of acquired intangible assets(37)(39)(70)(78)
Interest expense, net(52)(49)(97)(95)
Other income (expense)5 (3)(2)5 
Income before income taxes$846 $790 $1,406 $1,259 
(1)Primarily includes SG&A that is not related to a segment.
(2)See Note 13, Restructuring expenses for further information.
Capital expenditures and depreciation and amortization by segment were as follows:
Three months endedSix months ended
June 30,June 30,
(In millions)2026202520262025
Capital expenditures:
United States$140 $66 $230 $138 
Canada2 2 $4 $3 
Total capital expenditures$142 $68 $234 $141 
Depreciation and amortization:
United States$94 $91 $186 $180 
Canada5 5 10 9 
Total depreciation and amortization(1)
$99 $96 $196 $189 
(1) Includes amortization of acquired intangible assets of $37 million, $39 million, $70 million and $78 million in the three and six months ended June 30, 2026 and 2025, respectively. These amounts are not included in segment adjusted operating profit.
Assets by segment included:
As of
(In millions)June 30, 2026December 31, 2025
Assets:
United States$17,746 $15,444 
Canada977 946 
Total segment assets18,723 16,390 
Corporate580 762 
Total assets$19,303 $17,152 
Long-lived assets are as follows:
As of
(In millions)June 30, 2026December 31, 2025
Long-lived assets:
United States$1,973 $1,865 
Canada43 46 
Total long-lived assets$2,016 $1,911 
Net sales disaggregation
A disaggregation of net sales by customer group in the United States is as follows:
Three months endedSix months ended
June 30,June 30,
2026202520262025
Customer Group
Waterworks24 %24 %23 %23 %
Ferguson Home20 %21 %20 %21 %
Commercial/Mechanical16 %15 %16 %15 %
Residential Trade Plumbing14 %15 %15 %15 %
HVAC13 %12 %12 %12 %
Industrial7 %6 %7 %7 %
Facilities Supply4 %4 %4 %4 %
Fire & Fabrication2 %3 %3 %3 %
Total United States100 %100 %100 %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.