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Business Segments
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Business Segments

14. Business Segments

The Company has four principal operating segments, which are the (1) United States Energy branches, (2) United States Supply Chain locations, (3) Canada and (4) International. These operating segments were determined based primarily on the geographical markets and secondarily on the distribution channel of the products and services offered. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company’s chief executive officer has been identified as the chief operating decision maker. The Company’s chief operating decision maker directs the allocation of resources to operating segments based on various metrics of each respective operating segment. The allocation of resources across the operating segments is dependent upon, among other factors, the operating segment’s historical operating margins; the operating segment’s historical or future expected return on capital; outlook within a specific oilfield market; opportunities to grow profitability through new technology, new products or new customer accounts; confidence in management; competitive landscape and intensity; etc.

The Company has determined that there are three reportable segments: (1) United States, (2) Canada and (3) International. The United States Energy branches and United States Supply Chain locations operating segments were not separately reported as they exhibit similar long term economic characteristics, the nature of the products offered and services offered are similar, purchase many identical products from outside vendors, have similar customers, sell products directly to end-users and operate in similar regulatory environments.

United States

The Company has more than 200 locations in the U.S., which are geographically positioned to best serve the upstream, midstream and downstream energy and industrial markets.

Canada

The Company has a network of over 70 locations in the Canadian oilfield, predominantly in the oil rich provinces of Alberta and Saskatchewan in Western Canada. The Company’s Canadian segment primarily serves the energy exploration, production and drilling business.

International

The Company operates in over 20 countries and serves the needs of its international customers from more than 30 locations outside of the U.S. and Canada, all of which are strategically located in major oil and gas development areas. The Company’s International segment primarily serves the energy exploration, production and drilling business.

 

The following table presents financial information for each of the Company’s reportable segments as of and for the year ended December 31 (in millions):

 

     United States      Canada      International      Total  

2014

            

Revenue

    $ 2,793       $ 669       $ 643       $ 4,105   

Operating profit

      89         47         45         181   

Depreciation and amortization

      16         3         2         21   

Long-lived assets:

            

Property, plant and equipment, net

      101         20         3         124   

Goodwill

      222         101         23         346   

Intangibles, net

      58         1         14         73   

Total assets

      1,735         500         361         2,596   

2013

            

Revenue

    $ 2,863       $ 773       $ 660       $ 4,296   

Operating profit

      134         47         43         224   

Depreciation and amortization

      11         3         3         17   

Long-lived assets:

            

Property, plant and equipment, net

      86         13         3         102   

Goodwill

      202         109         22         333   

Intangibles, net

      50         2         16         68   

Total assets

      1,582         411         190         2,183   

2012

            

Revenue

    $ 2,257       $ 591       $ 566       $ 3,414   

Operating profit

      94         37         37         168   

Depreciation and amortization

      7         2         3         12   

Long-lived assets:

            

Property, plant and equipment, net

      40         16         5         61   

Goodwill

      204         117         22         343   

Intangibles, net

      53         3         18         74   

Total assets

      1,603         549         221         2,373   

The following table presents a comparison of the approximate sales mix in the principal product categories (in millions):

 


     Year Ended December 31,  
     2014      2013      2012  

Product Category

         

Drilling and production

    $ 991       $ 987       $ 860   

Pipe

      723         845         621   

Valves

      801         839         569   

Fittings and flanges

      667         664         522   

Mill tool, MRO, safety and other

      923         961         842   
  

 

 

     

 

 

     

 

 

  

Total

 $ 4,105    $ 4,296    $ 3,414