| Segment Information |
8. SEGMENT INFORMATION
Our reportable segments are Installation and Specialty Distribution.
Our Installation segment installs insulation and other building products. We sell primarily to the residential new construction market, with increasing activity in the commercial/industrial construction market, along with repair/remodel of residential housing. In addition to insulation, we install other building products including glass and windows, rain gutters, garage doors, closet shelving, and fireplaces, among other items.
Our Specialty Distribution segment distributes building and mechanical insulation, insulation accessories and other building product materials for the residential and commercial/industrial end markets. In addition to insulation and accessories, it distributes rain gutters, roofing materials, and closet shelving, among other items. Distributed products are sold from distribution centers in various parts of the United States and Canada, primarily to contractors and dealers (including lumber yards) serving a wide variety of commercial/industrial markets.
Our Chief Operating Decision Maker regularly reviews financial information of our segments in determining resource allocation and assessing performance. The key performance metric we use to evaluate our businesses is segment operating profit. Operating profit for the individual segments includes corporate costs which are allocated to the segments based on various metrics including sales and headcount.
Intercompany sales from the Specialty Distribution segment to the Installation segment are recorded by the Specialty Distribution segment with a profit margin and by our Installation segment at cost. This intercompany profit is eliminated in consolidation.
Key information by segment is as follows, for the years ended December 31, in thousands:
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Net Sales |
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Operating Profit (b) |
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2023 |
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2022 |
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2021 |
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2023 |
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2022 |
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2021 |
Operations by segment (a): |
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Installation |
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$ |
3,188,232 |
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$ |
2,969,978 |
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$ |
2,378,401 |
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$ |
644,392 |
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$ |
548,795 |
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$ |
383,722 |
Specialty Distribution |
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2,268,339 |
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2,278,261 |
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1,287,176 |
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330,938 |
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326,226 |
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169,368 |
Intercompany eliminations and other adjustments |
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(261,877) |
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(239,495) |
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(179,370) |
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(44,438) |
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(39,839) |
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(29,653) |
Total |
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$ |
5,194,694 |
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$ |
5,008,744 |
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$ |
3,486,207 |
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930,892 |
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835,182 |
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523,437 |
General corporate expense, net (c) |
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(52,067) |
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(38,018) |
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(47,018) |
Operating profit, as reported |
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878,825 |
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797,164 |
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476,419 |
Other expense, net |
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(53,342) |
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(55,029) |
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(42,976) |
Income before income taxes |
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$ |
825,483 |
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$ |
742,135 |
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$ |
433,443 |
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Property Additions (d) |
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Depreciation and
Amortization |
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Total Assets |
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2023 |
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2022 |
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2021 |
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2023 |
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2022 |
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2021 |
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2023 |
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2022 |
Operations by segment (a): |
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Installation |
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$ |
48,076 |
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$ |
46,518 |
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$ |
53,996 |
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$ |
69,123 |
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$ |
62,483 |
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$ |
57,815 |
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$ |
2,207,734 |
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$ |
2,129,255 |
Specialty Distribution |
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18,859 |
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17,671 |
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41,847 |
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59,607 |
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56,881 |
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18,743 |
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2,060,127 |
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2,175,835 |
Corporate |
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8,394 |
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10,023 |
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4,539 |
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4,148 |
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3,971 |
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2,832 |
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894,990 |
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|
301,741 |
Total, as reported |
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$ |
75,329 |
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$ |
74,212 |
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$ |
100,382 |
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$ |
132,878 |
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$ |
123,335 |
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$ |
79,390 |
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$ |
5,162,851 |
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$ |
4,606,831 |
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(a) |
All of our operations are located primarily in the U.S. and to a lesser extent Canada. |
(b) |
Segment operating profit includes an allocation of general corporate expenses attributable to the operating segments which is based on direct benefit or usage (such as salaries of corporate employees who directly support the segment). |
(c) |
General corporate expense, net includes expenses not specifically attributable to our segments for functions such as corporate human resources, finance, and legal, including salaries, benefits, and other related costs. |
(d) |
Property additions include assets acquired in business combinations in each respective year. |
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