Segment Information | Segment Information The Company’s reportable segments are Piping Systems, Industrial Metals, and Climate. Each of the reportable segments is composed of certain operating segments that are aggregated primarily by the nature of products offered as follows: Piping Systems Piping Systems is composed of the following operating segments: Domestic Piping Systems Group, Great Lakes Copper, Heatlink Group, European Operations, Trading Group, Jungwoo-Mueller (the Company’s South Korean joint venture), and Mueller Middle East (our Bahraini joint venture). The Domestic Piping Systems Group manufactures and distributes copper tube, fittings, and line sets. These products are manufactured in the U.S., sold in the U.S., and exported to markets worldwide. Outside the U.S., Great Lakes Copper manufactures copper tube and line sets in Canada and sells the products primarily in the U.S. and Canada. Heatlink Group produces a complete line of products for PEX plumbing and radiant systems in Canada and sells these products in Canada and the U.S. European Operations manufacture copper tube in the U.K. which is sold primarily in Europe. The Trading Group manufactures pipe nipples and resells brass and plastic plumbing valves, malleable iron fittings, faucets, and plumbing specialty products in the U.S. and Mexico. Jungwoo-Mueller manufactures copper-based joining products that are sold worldwide. Mueller Middle East manufactures copper tube and serves markets in the Middle East and Northern Africa. The Piping Systems segment’s products are sold primarily to plumbing, refrigeration, and air-conditioning wholesalers, hardware wholesalers and co-ops, building product retailers, and air-conditioning OEMs. As disclosed in “ Note 2 – Acquisitions & Dispositions ,” during September 2021 the Company exchanged the outstanding common stock of Die-Mold for an equity interest in a limited liability company in the retail distribution business, resulting in the deconsolidation of Die-Mold and the recognition of a $4.7 million gain. This gain is reported within Corporate and Eliminations. The results of Die-Mold, prior to deconsolidation, were included within the Piping Systems segment. During 2020, the segment recognized fixed asset impairment charges for certain manufacturing equipment of $3.8 million. During 2019, the segment recognized a gain of $1.2 million on the sale of real property. Industrial Metals Industrial Metals is composed of the following operating segments: Brass Rod, Impacts & Micro Gauge, and Brass Value-Added Products. These businesses manufacture brass rod, impact extrusions, and forgings, as well as a wide variety of end products including plumbing brass, automotive components, valves, fittings, and gas assemblies. These products are manufactured in the U.S. and sold primarily to OEMs in the U.S., many of which are in the industrial, transportation, construction, heating, ventilation, and air-conditioning, plumbing, refrigeration, and energy markets. During 2021, the segment recognized a gain of $6.5 million on the sale of the Copper Bar business. During 2019, the segment recognized a loss of $0.3 million on the sale of real property and an insurance recovery gain of $0.5 million related to the losses incurred due to the 2017 fire at the brass rod mill in Port Huron, Michigan. Climate Climate is composed of the following operating segments: Refrigeration Products, Westermeyer, Turbotec, Flex Duct, and Linesets, Inc. These domestic businesses manufacture and fabricate valves, assemblies, high pressure components, coaxial heat exchangers, insulated HVAC flexible duct systems, line sets, brazed manifolds, headers, and distributor assemblies primarily for the heating, ventilation, air-conditioning, and refrigeration markets in the U.S. As disclosed in “ Note 2 – Acquisitions & Dispositions ,” during July 2021 the Company sold the assets of FTP and all of the outstanding stock of STI, resulting in a gain of $46.6 million. This gain is reported within Corporate and Eliminations. The results of FTP and STI, prior to the sale, were included within the Climate segment. During 2021 the segment recognized impairment charges on goodwill and long-lived assets of $2.8 million. Performance of segments is generally evaluated by their operating income. Summarized product line, geographic, and segment information is shown in the following tables. Geographic sales data indicates the location from which products are shipped. Unallocated expenses include general corporate expenses, plus certain charges or credits not included in segment activity. During 2021, 2020, and 2019, no single customer exceeded 10 percent of worldwide sales. The following tables represent a disaggregation of revenue from contracts with customers, along with the reportable segment for each category: For the Year Ended December 25, 2021 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 2,055,639 $ — $ — $ 2,055,639 Brass rod and forgings — 565,870 — 565,870 OEM components, tube & assemblies 32,557 48,572 137,564 218,693 Valves and plumbing specialties 511,834 — — 511,834 Flex duct and other HVAC components — — 357,850 357,850 Other — 88,921 — 88,921 $ 2,600,030 $ 703,363 $ 495,414 $ 3,798,807 Intersegment sales (29,462) Net sales $ 3,769,345 For the Year Ended December 26, 2020 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 1,232,724 $ — $ — $ 1,232,724 Brass rod and forgings — 356,547 — 356,547 OEM components, tube & assemblies 56,176 42,127 138,551 236,854 Valves and plumbing specialties 294,102 — — 294,102 Flex duct and other HVAC components — — 231,580 231,580 Other — 73,485 — 73,485 $ 1,583,002 $ 472,159 $ 370,131 $ 2,425,292 Intersegment sales (27,249) Net sales $ 2,398,043 Disaggregation of revenue from contracts with customers (continued): For the Year Ended December 28, 2019 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 1,271,558 $ — $ — $ 1,271,558 Brass rod and forgings — 425,573 — 425,573 OEM components, tube & assemblies 29,103 48,104 133,651 210,858 Valves and plumbing specialties 241,795 — — 241,795 Flex duct and other HVAC components — — 222,565 222,565 Other — 80,695 — 80,695 $ 1,542,456 $ 554,372 $ 356,216 $ 2,453,044 Intersegment sales (22,428) Net sales $ 2,430,616 Summarized segment information is as follows: For the Year Ended December 25, 2021 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 2,600,030 $ 703,363 $ 495,414 $ (29,462) $ 3,769,345 Cost of goods sold 1,996,610 605,715 367,343 (30,679) 2,938,989 Depreciation and amortization 23,384 6,929 10,379 4,698 45,390 Selling, general, and administrative expense 93,749 11,698 29,327 49,278 184,052 Gain on sale of businesses — (6,454) — (51,306) (57,760) Impairment charges — — 2,829 — 2,829 Operating income 486,287 85,475 85,536 (1,453) 655,845 Interest expense (7,709) Redemption premium (5,674) Environmental expense (5,053) Other income, net 3,730 Income before income taxes $ 641,139 Segment information (continued): For the Year Ended December 26, 2020 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 1,583,002 $ 472,159 $ 370,131 $ (27,249) $ 2,398,043 Cost of goods sold 1,311,697 398,000 276,274 (19,810) 1,966,161 Depreciation and amortization 23,071 7,528 10,249 3,995 44,843 Selling, general, and administrative expense 78,744 12,566 26,806 41,367 159,483 Litigation settlement, net — — — (22,053) (22,053) Impairment charges 3,771 — — — 3,771 Operating income 165,719 54,065 56,802 (30,748) 245,838 Interest expense (19,247) Pension plan termination expense (17,835) Environmental expense (4,454) Other income, net 4,887 Income before income taxes $ 209,189 For the Year Ended December 28, 2019 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 1,542,456 $ 554,372 $ 356,216 $ (22,428) $ 2,430,616 Cost of goods sold 1,313,980 473,010 273,850 (25,230) 2,035,610 Depreciation and amortization 22,621 7,489 9,298 3,285 42,693 Selling, general, and administrative expense 75,170 12,359 30,385 44,444 162,358 Gain on sale of assets, net (1,194) 275 (44) — (963) Insurance recovery — (485) — — (485) Operating income 131,879 61,724 42,727 (44,927) 191,403 Interest expense (25,683) Environmental expense (1,321) Other income, net 1,684 Income before income taxes $ 166,083 Summarized geographic information is as follows: (In thousands) 2021 2020 2019 Net sales: United States $ 2,791,571 $ 1,765,810 $ 1,775,321 United Kingdom 330,908 207,754 230,791 Canada 469,652 293,776 285,720 Asia 83,217 58,256 64,363 Mexico 93,997 72,447 74,421 $ 3,769,345 $ 2,398,043 $ 2,430,616 Long-lived assets: 2021 2020 2019 United States $ 272,903 $ 289,508 $ 286,727 United Kingdom 36,529 30,872 18,776 Canada 26,422 29,582 31,429 Asia 48,742 26,107 25,637 Mexico 966 503 559 $ 385,562 $ 376,572 $ 363,128 (In thousands) 2021 2020 2019 Expenditures for long-lived assets (including those resulting from business acquisitions): Piping Systems $ 43,429 $ 39,209 $ 15,505 Industrial Metals 5,744 5,968 9,101 Climate 12,428 5,521 3,845 General Corporate 3,521 448 2,711 $ 65,122 $ 51,146 $ 31,162 Segment assets: Piping Systems $ 1,160,272 $ 977,937 $ 796,262 Industrial Metals 173,290 152,683 161,904 Climate 250,107 258,668 249,853 General Corporate 145,267 139,280 162,921 $ 1,728,936 $ 1,528,568 $ 1,370,940 |