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Business Segments
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Business Segments

15. Business Segments

As of December 31, 2020, the Company had four operating segments – U.S. Energy, U.S. Process Solutions, Canada and International. During 2020, to align with the updates to the operational and management structure, the Company combined two operating segments within the U.S. reportable segment, U.S. Energy and U.S. Supply Chain, each with goodwill of zero prior to and after the combination. 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 or future expected operating margins; the operating segment’s historical or future expected return on capital; outlook within a specific market; opportunities to grow profitability; new products or new customer accounts; confidence in management; and competitive landscape and intensity.

The Company has determined that there are three reportable segments: (1) United States, (2) Canada and (3) International. The U.S. Energy and U.S. Process Solutions operating segments were not separately reported as they exhibit similar long term economic characteristics, the nature of the products 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. They have been aggregated into the United States reportable segment.

United States

The Company has approximately 130 locations in the U.S., which are geographically positioned to serve the upstream, midstream and downstream energy and industrial markets.

Canada

The Company has a network of approximately 40 locations in the Canadian oilfield, predominantly in the oil rich provinces of Alberta, Saskatchewan, Manitoba and other targeted locations across the country. The Company’s Canadian segment primarily serves the energy exploration, production, drilling and midstream business.

International

The Company operates in approximately 20 countries and serves the needs of its international customers from approximately 25 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

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

1,153

 

 

$

209

 

 

$

257

 

 

$

1,619

 

Operating loss

 

 

(281

)

 

 

(60

)

 

 

(79

)

 

 

(420

)

Impairment charges

 

 

189

 

 

 

60

 

 

 

72

 

 

 

321

 

Depreciation and amortization

 

 

23

 

 

 

2

 

 

 

3

 

 

 

28

 

Property, plant and equipment, net

 

 

70

 

 

 

12

 

 

 

16

 

 

 

98

 

Total assets (1)

 

 

714

 

 

 

141

 

 

 

153

 

 

 

1,008

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

2,240

 

 

$

319

 

 

$

392

 

 

$

2,951

 

Operating loss

 

 

(6

)

 

 

(19

)

 

 

(58

)

 

 

(83

)

Impairment charges

 

 

43

 

 

 

27

 

 

 

58

 

 

 

128

 

Depreciation and amortization

 

 

30

 

 

 

2

 

 

 

9

 

 

 

41

 

Property, plant and equipment, net

 

 

84

 

 

 

14

 

 

 

22

 

 

 

120

 

Total assets (1)

 

 

1,034

 

 

 

259

 

 

 

298

 

 

 

1,591

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

2,371

 

 

$

358

 

 

$

398

 

 

$

3,127

 

Operating profit

 

 

57

 

 

 

14

 

 

 

2

 

 

 

73

 

Depreciation and amortization

 

 

30

 

 

 

2

 

 

 

9

 

 

 

41

 

Property, plant and equipment, net

 

 

73

 

 

 

12

 

 

 

21

 

 

 

106

 

Total assets (1)

 

 

1,148

 

 

 

294

 

 

 

353

 

 

 

1,795

 

 

 

(1)

Beginning in 2020, due to asset impairments and declining market conditions, reporting segment assets excluded inter-segment adjustments that were eliminated in the total assets in the consolidated balance sheets. Prior periods have been reclassified to conform with the current period presentation.

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

 

 

Year Ended December 31,

 

 

 

2020

 

 

2019

 

 

2018

 

Product Category

 

 

 

 

 

 

 

 

 

 

 

 

Drilling and production

 

$

428

 

 

$

711

 

 

$

691

 

Pipe

 

 

228

 

 

 

473

 

 

 

587

 

Valves

 

 

326

 

 

 

608

 

 

 

664

 

Fittings and flanges

 

 

287

 

 

 

524

 

 

 

523

 

Mill tool, MRO, safety and other

 

 

350

 

 

 

635

 

 

 

662

 

Total

 

$

1,619

 

 

$

2,951

 

 

$

3,127