Cover
Cover - USD ($) | 12 Months Ended | ||
Jul. 31, 2022 | Sep. 12, 2022 | Jan. 31, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jul. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-40066 | ||
Entity Registrant Name | Ferguson plc | ||
Entity Incorporation, State or Country Code | Y9 | ||
Entity Tax Identification Number | 98-1499339 | ||
Entity Address, Address Line One | 1020 Eskdale Road | ||
Entity Address, Address Line Two | Winnersh Triangle | ||
Entity Address, City or Town | Wokingham | ||
Entity Address, Postal Zip Code | RG41 5TS, | ||
Entity Address, Country | GB | ||
City Area Code | 118 | ||
Local Phone Number | 927 3800 | ||
Title of 12(b) Security | Ordinary Shares of 10 pence | ||
Trading Symbol | FERG | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 34,721,011,396 | ||
Entity Common Stock, Shares Outstanding | 209,756,022 | ||
Entity Central Index Key | 0001832433 | ||
Current Fiscal Year End Date | --07-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Jul. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 1147 |
Auditor Name | Deloitte LLP |
Auditor Location | London, United Kingdom |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 28,566 | $ 22,792 | $ 19,940 |
Cost of sales | (19,810) | (15,812) | (13,957) |
Gross profit | 8,756 | 6,980 | 5,983 |
Selling, general and administrative expenses | (5,635) | (4,732) | (4,329) |
Depreciation and amortization | (301) | (298) | (282) |
Operating profit | 2,820 | 1,950 | 1,372 |
Interest expense, net | (111) | (98) | (93) |
Other (expense) income, net | (1) | 10 | (7) |
Income before income taxes | 2,708 | 1,862 | 1,272 |
Provision for income taxes | (609) | (232) | (299) |
Income from continuing operations | 2,099 | 1,630 | 973 |
Income (loss) from discontinued operations (net of tax) | 23 | (158) | (12) |
Net income | $ 2,122 | $ 1,472 | $ 961 |
Earnings per share - Basic: | |||
Continuing operations, Basic (in usd per share) | $ 9.64 | $ 7.29 | $ 4.32 |
Discontinued operations, Basic (in usd per share) | 0.11 | (0.70) | (0.05) |
Earnings per share, Basic (in usd per share) | 9.75 | 6.59 | 4.27 |
Earnings per share - Diluted: | |||
Continuing operations, Diluted (in usd per share) | 9.59 | 7.25 | 4.29 |
Discontinued operations, Diluted (in usd per share) | 0.10 | (0.70) | (0.05) |
Earnings per share, Diluted (in usd per share) | $ 9.69 | $ 6.55 | $ 4.24 |
Weighted average number of shares outstanding: | |||
Basic (in shares) | 217.7 | 223.5 | 224.8 |
Diluted (in shares) | 218.9 | 224.8 | 226.8 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 2,122 | $ 1,472 | $ 961 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (24) | 170 | 33 |
Pension (loss) income, net of tax (expense) benefit of ($11), ($17) and $45, respectively. | (10) | 79 | (197) |
Total other comprehensive (loss) income, net of tax | (34) | 249 | (164) |
Comprehensive income | $ 2,088 | $ 1,721 | $ 797 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Income tax impact | $ (11) | $ (17) | $ 45 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 771 | $ 1,335 |
Accounts receivable, less allowances of $27 and $17, respectively | 3,610 | 2,786 |
Inventories, net | 4,333 | 3,273 |
Prepaid and other current assets | 834 | 732 |
Assets held for sale | 3 | 3 |
Total current assets | 9,551 | 8,129 |
Non-current: | ||
Property, plant and equipment, net | 1,376 | 1,305 |
Operating lease right-of-use assets | 1,200 | 1,102 |
Deferred income taxes, net | 177 | 240 |
Goodwill | 2,048 | 1,828 |
Other intangible assets, net | 782 | 546 |
Other non-current assets | 527 | 559 |
Total assets | 15,661 | 13,709 |
Current: | ||
Accounts payable | 3,607 | 3,030 |
Short-term debt | 250 | 0 |
Current portion of operating lease liabilities | 321 | 263 |
Share repurchase liability | 324 | 0 |
Other current liabilities | 1,297 | 1,445 |
Total current liabilities | 5,799 | 4,738 |
Non-current: | ||
Long-term debt | 3,679 | 2,512 |
Long-term portion of operating lease liabilities | 878 | 827 |
Other long-term liabilities | 640 | 629 |
Total liabilities | 10,996 | 8,706 |
Shareholders’ equity: | ||
Ordinary shares, par value 10 pence: 500,000,000 shares authorized, 232,171,182 shares issued | 30 | 30 |
Paid-in capital | 760 | 704 |
Retained earnings | 7,594 | 6,054 |
Treasury shares, 21,078,577 and 9,862,816 shares, respectively at cost | (2,782) | (931) |
Employee Benefit Trust, 846,491 and 833,189 shares, respectively at cost | (107) | (58) |
Accumulated other comprehensive loss | (830) | (796) |
Total shareholders' equity | 4,665 | 5,003 |
Total liabilities and shareholders' equity | $ 15,661 | $ 13,709 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Millions | Jul. 31, 2022 USD ($) shares | Jul. 31, 2022 £ / shares | Jul. 31, 2021 USD ($) shares | Jul. 31, 2021 £ / shares |
Statement of Financial Position [Abstract] | ||||
Allowance for credit loss | $ | $ 27 | $ 17 | ||
Ordinary shares, par value (in pound sterling per share) | £ / shares | £ 10 | £ 10 | ||
Ordinary shares, shares authorized (in shares) | 500,000,000 | 500,000,000 | ||
Ordinary shares, shares issued (in shares) | 232,171,182 | 232,171,182 | ||
Treasury stock (in shares) | 21,078,577 | 9,862,816 | ||
Employee Benefit Trust (in shares) | 846,491 | 833,189 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity - USD ($) $ in Millions | Total | Ordinary Shares | Paid-in Capital | Retained Earnings | Treasury Shares | Employee Benefit Trust | Accumulated Other Comprehensive Loss |
Beginning balance at Jul. 31, 2019 | $ 4,407 | $ 30 | $ 585 | $ 5,080 | $ (305) | $ (102) | $ (881) |
Share-based compensation | 39 | 39 | |||||
Net income | 961 | 961 | |||||
Other comprehensive income (loss) | (164) | (164) | |||||
Cash dividends | (327) | (327) | |||||
Share repurchases | (318) | (292) | (26) | ||||
Shares issued under employee share plans | 11 | (56) | 27 | 40 | |||
Ending balance at Jul. 31, 2020 | 4,609 | 30 | 624 | 5,658 | (570) | (88) | (1,045) |
Share-based compensation | 80 | 80 | |||||
Net income | 1,472 | 1,472 | |||||
Other comprehensive income (loss) | 249 | 249 | |||||
Cash dividends | (1,034) | (1,034) | |||||
Share repurchases | (400) | (400) | |||||
Shares issued under employee share plans | 18 | (51) | 39 | 30 | |||
Other | 9 | 9 | |||||
Ending balance at Jul. 31, 2021 | 5,003 | 30 | 704 | 6,054 | (931) | (58) | (796) |
Share-based compensation | 56 | 56 | |||||
Net income | 2,122 | 2,122 | |||||
Other comprehensive income (loss) | (34) | (34) | |||||
Cash dividends | (550) | (550) | |||||
Share repurchases | (1,964) | (1,872) | (92) | ||||
Shares issued under employee share plans | 13 | (51) | 21 | 43 | |||
Other | 19 | 19 | |||||
Ending balance at Jul. 31, 2022 | $ 4,665 | $ 30 | $ 760 | $ 7,594 | $ (2,782) | $ (107) | $ (830) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders’ Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash Dividends (in usd per share) | $ 2.505 | $ 4.611 | $ 1.451 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 2,122 | $ 1,472 | $ 961 |
(Income) loss from discontinued operations | (23) | 158 | 12 |
Income from continuing operations | 2,099 | 1,630 | 973 |
Depreciation and amortization | 301 | 298 | 282 |
Share-based compensation | 57 | 77 | 29 |
Net loss (gain) on disposal of assets and impairment | 15 | 0 | (2) |
(Increase) decrease in inventories | (927) | (748) | 16 |
(Increase) decrease in receivables and other assets | (780) | (756) | 104 |
Increase (decrease) in accounts payable and other liabilities | 436 | 1,012 | (39) |
(Decrease) increase in income taxes | (62) | (170) | 66 |
Other operating activities | 10 | (6) | 23 |
Net cash provided by operating activities of continuing operations | 1,149 | 1,337 | 1,452 |
Net cash provided by operating activities of discontinued operations | 0 | 45 | 93 |
Net cash provided by operating activities | 1,149 | 1,382 | 1,545 |
Cash flows from investing activities: | |||
Purchase of businesses acquired, net of cash acquired | (650) | (286) | (271) |
Proceeds from sale of assets and divestitures | 4 | 18 | 45 |
Capital expenditures | (290) | (241) | (283) |
Other investing activities | (10) | (6) | (5) |
Net cash used in investing activities of continuing operations | (946) | (515) | (514) |
Net cash provided by (used in) investing activities of discontinued operations | 24 | 390 | (57) |
Net cash used in investing activities | (922) | (125) | (571) |
Cash flows from financing activities: | |||
Purchase of own shares by Employee Benefit Trust | (92) | 0 | (26) |
Purchase of treasury shares | (1,545) | (400) | (451) |
Proceeds from sale of treasury shares | 13 | 18 | 11 |
Repayments of debt | (575) | (375) | (1,196) |
Proceeds from debt | 2,019 | 4 | 1,799 |
Change in bank overdrafts | (4) | (213) | 230 |
Cash dividends | (538) | (1,036) | (327) |
Other financing activities | (22) | (49) | (36) |
Net cash (used in) provided by financing activities | (744) | (2,051) | 4 |
Change in cash, cash equivalents and restricted cash | (517) | (794) | 978 |
Effects of exchange rate changes | (40) | 6 | 4 |
Cash, cash equivalents and restricted cash, beginning of period | 1,342 | 2,130 | 1,148 |
Cash, cash equivalents and restricted cash, end of period | 785 | 1,342 | 2,130 |
Supplemental Disclosures: | |||
Cash paid for income taxes | 670 | 404 | 225 |
Cash paid for interest | 94 | 104 | 114 |
Accrued capital expenditures | $ 16 | $ 10 | $ 7 |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Jul. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Background Ferguson plc (the “Company”) (NYSE: FERG; LSE: FERG) is a public company limited by shares incorporated in Jersey under the Companies (Jersey) Law 1991 (as amended). The Company is a value-added distributor in North America providing expertise, solutions and products from infrastructure, plumbing and appliances to HVAC, fire, fabrication and more. We exist to make our customers’ complex projects simple, successful and sustainable. Ferguson is headquartered in the U.K., with its operations and associates solely focused on North America and managed from Newport News, Virginia. The Company’s registered office is 13 Castle Street, St Helier, Jersey, JE1 1ES, Channel Islands. Basis of consolidation These consolidated financial statements include the results of the Company and its wholly-owned subsidiaries and its share of after tax profits and losses of its equity method investments. All intercompany transactions are eliminated from the consolidated financial statements. Effective August 1, 2021, the Company transitioned from International Financial Reporting Standards (“IFRS”) accepted by the International Accounting Standards Board to accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements and notes thereto, including all prior periods presented, have been presented under U.S. GAAP. Fiscal year Except as otherwise specified, references to years indicate our fiscal year ended July 31 of the respective year. For example, references to “fiscal 2022” or similar references refer to the fiscal year ended July 31, 2022. Use of estimates The preparation of the Company's Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions affecting reported amounts in the Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. Accounts receivables Accounts receivables are stated at their estimated net realizable value. An allowance for doubtful accounts is estimated based on historical write-offs, the age of past due receivables, as well as consideration for forward-looking expectations where appropriate. Accounts receivables are written off when recoverability is assessed as being remote. The charges associated with the allowance for doubtful accounts are recognized in selling, general and administrative expenses (“SG&A”). Subsequent recoveries of amounts previously written off are credited to SG&A. Advertising and marketing costs Advertising costs, including digital, television, radio and print, are expensed when the advertisement first appears. Certain marketing, or co-op, contributions are received to fund marketing activities of specific, incremental, and identifiable costs incurred to promote suppliers’ products or activities, which are recorded in SG&A as reductions of the related marketing costs. The following table presents net advertising expenses included in SG&A: For the years ended July 31, (In millions) 2022 2021 2020 Net advertising and marketing costs $389 $299 $249 Business combinations The assets and liabilities of acquired businesses are recorded at their fair values at the date of acquisition. The excess of the purchase price over the fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits with banks with original maturities of three months or less and overdrafts to the extent there is a legal right of offset and practice of net settlement with cash balances. Restricted cash consists of deferred consideration for business combinations, subject to various settlement agreements, and is recorded in prepaid and other current assets in the Company’s balance sheets. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. As of July 31, (In millions) 2022 2021 Cash and cash equivalents $771 $1,335 Restricted cash 14 7 Total cash, cash equivalents and restricted cash $785 $1,342 Concentrations of credit risk The Company monitors credit risk associated with those financial institutions with which it conducts significant business. Credit risk, including but not limited to counterparty non-performance under derivative instruments and our credit facilities, is not considered significant, as we primarily conduct business with large, well-established financial institutions. This risk is managed by setting credit and settlement limits for approved counterparties. In addition, the Company has established guidelines that it follows regarding counterparty credit ratings which are monitored regularly, seeking to limit its exposure to any individual counterparty. The concentration of credit risk was deemed not significant as of July 31, 2022 and 2021. Cost of sales Cost of sales includes the cost of goods purchased for resale, net of earned rebates, and the cost of bringing inventory to a sellable location and condition. As the Company does not produce or manufacture products, its inventories are finished goods and therefore depreciation related to warehouse facilities and equipment is presented separately within operating expenses. Derivative instruments and hedging activity Derivative financial instruments, in particular interest rate swaps and foreign exchange swaps, are used to manage the financial risks arising from the Company’s business activities and the financing of those activities. Derivatives are not used for speculative purposes or trading activities and have generally not been significant. Derivatives are measured at their fair values and included in other assets and other liabilities in the consolidated balance sheets. When the hedging relationship is classified as an effective fair value hedge, the carrying amount of the hedged asset or liability is adjusted by the change in its fair value attributable to the hedged risk and the resulting gain or loss is recognized in the Consolidated Statements of Earnings where it will be offset by the change in the fair value of the hedging instrument. When the hedging relationship is classified as an effective cash flow hedge or as a net investment hedge, changes in the fair value of the hedging instrument arising from the hedged risk are recorded in other comprehensive income. When the hedged item is recognized in the financial statements, the gains and losses recognized in accumulated other comprehensive loss are either recognized in the statement of earnings or, if the hedged item results in a non-financial asset, are recognized as an adjustment to its initial carrying amount. Discontinued operations When the Company has disposed of, or classified as held for sale, a business component that represents a strategic shift with significant effect on the Company’s operations and financial results, it classifies that business component as a discontinued operation and retrospectively presents discontinued operations for the comparable periods. The post-tax income, or loss, of discontinued operations are shown as a single line on the face of the consolidated statements of earnings. The disposal of the discontinued operation would also result in a gain or loss upon final disposal. Fair value measurement s The applicable accounting guidance for fair value measurements established a fair value hierarchy. The fair value hierarchy established under this guidance prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted prices, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value from the perspective of a market participant. Foreign currency The consolidated financial statements are presented in U.S. dollars. Results of operations of foreign subsidiaries are translated into U.S. dollars using average exchange rates during the year. The assets and liabilities of those subsidiaries are translated into U.S. dollars using exchange rates at the current rate of exchange on the last day of the reporting period. These foreign currency translation adjustments are included in accumulated other comprehensive loss. Foreign currency transaction gains and losses are not material. In the event that the Company disposes of a subsidiary that uses a non-U.S. dollar functional currency, the gain or loss on disposal recognized in the Consolidated Statement of Earnings includes the cumulative currency translation differences attributable to the subsidiary. Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net identifiable assets of the acquired business at the date of acquisition. Goodwill is not amortized but is carried at cost less accumulated impairment losses. The Company performs an annual impairment assessment in the fourth quarter of each year, or more frequently if changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment assessment begins with an option to assess qualitative factors to determine whether a quantitative evaluation is appropriate for determining potential goodwill impairment. The quantitative impairment assessment compares the fair value of the reporting unit to its carrying value. The reporting units represent the lowest level within the Company at which the associated goodwill is monitored for management purposes and are based on the markets where the business operates. The fair value of a reporting unit is determined using the income approach, which requires significant assumptions regarding future operations and the ability to generate cash flows. These assumptions include a forecast of future operating cash flows over a period of four years, a terminal value, capital requirements and a discount rate. Where the carrying value of a reporting unit exceeds the fair value, an impairment loss is recorded in the consolidated statements of earnings. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold. Other intangible assets Definite-lived intangible assets are primarily comprised of customer relationships, trade names and other intangible assets, acquired as part of business combinations and are capitalized separately from goodwill and carried at cost less accumulated amortization and accumulated impairment losses. Computer software that is not integral to an item of property, plant and equipment is recognized separately as an intangible asset and is carried at cost less accumulated amortization and accumulated impairment losses. Costs may include software licenses and external and internal costs directly attributable to the development, design and implementation of the computer software. Costs in respect of training and data conversion are expensed as incurred. Customer relationship amortization is calculated using a systematic, accelerated approach based on the timing of future expected cash flows. The straight-line method is used for all other intangible assets. The estimated useful life of the respective intangible assets are as follows: Customer relationships 4 – 15 years Trade names and brands 1 – 15 years Software 3 – 5 years Other 1 – 4 years Impairment of long-lived assets The recoverability of long-lived assets, including property, plant and equipment (“PPE”), right of use assets and definite-lived intangible assets, is evaluated when events or changes in circumstances indicate that the carrying amounts of an asset group may not be recoverable. Long-lived depreciable and amortizable assets are tested for impairment in asset groups, which are defined as the lowest level of assets that generate identifiable cash flows that are largely independent of the cash flows of other asset groups. A potential impairment has occurred for an asset group if projected future undiscounted cash flows expected to result from the use and eventual disposition of the assets are less than the carrying amounts of the assets. Inventories Inventories, which comprise goods purchased for resale, are stated at the lower of cost or net realizable value. Cost is primarily determined using the average cost method. The cost of goods purchased for resale includes import and custom duties, transport and handling costs, freight and packing costs and other attributable costs less trade discounts and rebates. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Inventory reserves are recorded against slow‐moving, obsolete and damaged inventories for which the net realizable value is estimated to be less than the cost. The reserve is estimated based on the Company’s current knowledge with respect to inventory levels, sales trends and historical experience. Leases The Company enters into contractual arrangements for the utilization of certain non-owned assets. These principally relate to property for the Company’s branches, distribution centers and offices which have varying terms including extension and termination options and periodic rent reviews. The Company determines if an arrangement is a lease at inception. Leases are evaluated at commencement to determine proper classification as an operating lease or a finance lease. The Company’s leases primarily consist of operating leases. The Company recognizes a right-of-use (“ROU”) asset and lease liability at lease commencement based on the present value of lease payments over the lease term. The Company generally uses its incremental borrowing rate as the discount rate as most of the Company’s lease arrangements do not provide an implicit borrowing rate. The incremental borrowing rate is estimated using a combination of U.S. Treasury note rates corresponding to lease terms, as well as a blended credit risk spread. For operating leases, fixed lease payments are recognized on a straight-line basis over the lease term. The Company has elected to not separate lease and non-lease components. Certain lease agreements include variable lease payments that depend on an index, as well as payments for non-lease components, such as common area maintenance, and certain pass-through operating expenses such as real estate taxes and insurance. In instances where these payments are fixed, they are included in the measurement of our lease liabilities, and when variable, are excluded and recognized in the period in which the obligations for those payments are incurred. The Company’s leases do not contain any material residual value guarantees or payments under purchase and termination options which are reasonably certain to be exercised. Lease terms are initially determined as the non-cancelable period of a lease adjusted for options to extend or terminate a lease that are reasonably certain to be exercised. Generally, the Company’s real estate leases have initial terms of three two Right of use assets are carried at cost less accumulated amortization, impairment losses, and any subsequent remeasurement of the lease liability. Initial cost comprises the lease liability adjusted for lease payments at or before the commencement date, lease incentives received, initial direct costs and an estimate of restoration costs. The Company recognizes minimum rent expense on a straight-line basis over the lease term. Leases that have an original term of 12 months or less are not recognized on the Company’s balance sheet, and the lease expense related to those short-term leases is recognized over the lease term. Property, plant and equipment (“PPE”) PPE is recorded at cost less accumulated depreciation. Cost includes expenditures necessary to acquire and prepare PPE for its intended use. In addition, subsequent costs that increase the productive capacity or extend the useful life of PPE are capitalized. The cost of repairs and maintenance are expensed as incurred. Assets are depreciated to their estimated residual value using the straight-line method over their estimated useful lives as follows: Owned buildings 20 - 50 years Leasehold improvements Period of lease Plant and machinery 10 years Computer hardware 3 - 5 years Furniture, fixtures, equipment 5 - 7 years Vehicles 4 years Rebates The Company has agreements (“supplier rebates”) with a number of its suppliers whereby volume-based rebates, marketing support and other discounts are received in connection with the purchase of goods for resale from those suppliers. The majority of volume-based supplier rebates are determined by reference to guaranteed rates of rebate. These calculations require minimal judgment. A small proportion of volume-based supplier rebates are subject to tiered targets where the rebate percentage increases as volumes purchased reach agreed targets within a set period of time. The Company estimates supplier rebates based on forecasts which are informed by historical trading patterns, current performance and trends. Rebates relating to the purchase of goods for resale are accrued as earned and are recorded initially as a deduction in inventory with a subsequent reduction in cost of sales when the related goods are sold. Supplier rebates receivable are offset with amounts owed to each supplier at the balance sheet date and are included within accounts payables where the Company has the legal right to offset and net settles balances. Where the supplier rebates are not offset against amounts owed to a supplier, the outstanding amount is recorded in prepaid and other current assets in the consolidated balance sheet. Revenue recognition The Company recognizes revenue when a sales arrangement with a customer exists (e.g., contract, purchase orders, others), the transaction price is fixed or determinable and the Company has satisfied its performance obligation per the sales arrangement. The majority of the Company’s revenue originates from sales arrangements with a single performance obligation to deliver products, whereby performance obligations are satisfied when control of the product is transferred to the customer which is the point they are delivered to, or collected by, the customer. Therefore, shipping and handling activities are not deemed a separate performance obligation. Revenue from the provision of goods is only recognized when the transaction price is determinable and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods to be transferred to the customer. Payment terms between the Company and its customers vary by the type of customer, country of sale and the products sold. The Company does not have significant financing components in its contracts and the payment due date is typically shortly after sale. In some limited cases, the Company’s contracts contain services and products that are deemed one performance obligation as the services are highly interdependent and interrelated with the products or are significantly integrated with the products. Contracts in which services provided are a separately identifiable performance obligation are not material. In some instances, goods are delivered directly to the customer by the supplier. The Company has concluded that it is the principal in these transactions as it is primarily responsible to the customer for fulfilling the obligation and has the responsibility for identifying and directing the supplier to deliver the goods to the customer. The Company offers a right of return to its customers for most goods sold. Revenue is reduced by the amount of expected returns in the period in which the related revenue is recorded with a corresponding liability recorded in other current liabilities. The Company also recognizes a return asset in prepaid and other current assets with a corresponding adjustment to cost of sales, for the right to recover the returned goods, measured at the former carrying value, less any expected recovery costs. Share-based compensation Share-based incentives are provided to associates under the Company’s long-term incentive plans and all-employee sharesave plans. The Company recognizes a compensation cost in respect of these plans that is primarily based on the fair value of the awards. For equity-settled plans, the fair value is determined at the date of grant and is not subsequently remeasured unless the conditions on which the award was granted are modified. For liability-settled plans, the fair value is initially determined at the date of grant and is remeasured at each balance sheet date until the liability is settled. The related liability is recorded in other current liabilities and other long-term liabilities. Generally, the compensation cost is recognized on a straight-line basis over the vesting period, utilizing cumulative catch-up for changes in the liability-settled plans. Estimates of expected forfeitures are made at the date of grant to appropriately reduce expense for those grants expected not to satisfy service conditions or non-market performance conditions. The estimated forfeitures are adjusted when facts and circumstances indicate the prior estimate is no longer appropriate. Tax The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date. The Company recognizes DTAs to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize our DTAs in the future in excess of their net recorded amount, the DTA valuation allowance would be appropriately adjusted, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with Accounting Standard Codification (“ASC”) 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. Recently issued accounting pronouncements Accounting Standards Update (“ASU”) No. 2020-04. In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting. This ASU, and subsequent clarifications, provide practical expedients for contract modification accounting related to the transition away from the London Interbank Offered Rate (LIBOR) and other interbank offering rates to alternative reference rates. The expedients are applicable to contract modifications made and hedging relationships entered into on or before December 31, 2022. The amendments should be applied on a prospective basis. The Company continues to evaluate the impact of reference rate reform and does not currently expect a material impact to the Company’s consolidated financial statements. ASU No. 2021-08. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments address how to determine whether a contract liability is recognized by the acquirer in a business combination and provides specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted, including adoption in an interim period. The Company is evaluating this standard update and does not expect a material impact to the Company’s consolidated financial statements. ASU No. 2022-03. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, ASU 2022-03 introduces new disclosure requirements to provide investors with information about contractual sale restrictions, including the nature and remaining duration of these restrictions. ASU 2022-03 is effective for interim and annual periods beginning after December 15, 2023, although early adoption is permitted. The Company's practice aligns with this clarification and it is evaluating the additional disclosure requirements. Recent accounting pronouncements pending adoption that are not discussed above are either not applicable, or will not have, or are not expected to have, a material impact on our consolidated financial condition, results of operations or cash flows. |
Segment information
Segment information | 12 Months Ended |
Jul. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment information | Segment 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. The Company uses adjusted operating profit as its measure of segment profit. Adjusted operating profit is defined as profit before tax, excluding central and other costs, restructuring costs, amortization of acquired intangible assets, net interest expenses, as well as other items typically recorded in net other (expense) income such as (loss)/gain on disposal of businesses, pension plan changes/closure costs and amounts recorded in connection with the Company’s interests in investees. 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. Segment details were as follows: For the years ended July 31, (In millions) 2022 2021 2020 Net sales: United States $27,067 $21,478 $18,857 Canada 1,499 1,314 1,083 Total net sales $28,566 $22,792 $19,940 Adjusted operating profit: United States $2,893 $2,070 $1,586 Canada 112 76 43 Central and other costs (54) (54) (42) Business restructurings (1) — 11 (72) Corporate restructurings (2) (17) (22) (29) Amortization of acquired intangible assets (114) (131) (114) Interest expense, net (111) (98) (93) Other (expense) income, net (1) 10 (7) Income before income taxes $2,708 $1,862 $1,272 (1) For fiscal 2021, business restructuring reflects the release of provisions in connection with previously anticipated COVID-19 cost actions recorded in fiscal 2020. For fiscal 2020, business restructuring principally comprised costs incurred in the United States and Canada in respect of cost actions taken to ensure the business was appropriately sized for the post COVID-19 operating environment. (2) For fiscal 2022, 2021 and 2020, corporate restructuring costs primarily related to the incremental costs of the Company’s listing in the United States. An additional disaggregation of net sales by end market for continuing operations is as follows: For the years ended July 31, (In millions) 2022 2021 2020 United States: Residential $14,657 $11,990 $10,087 Non-residential: Commercial 8,600 6,661 6,116 Civil/Infrastructure 2,163 1,506 1,315 Industrial 1,647 1,321 1,339 Total Non-residential 12,410 9,488 8,770 Total United States 27,067 21,478 18,857 Canada 1,499 1,314 1,083 Total net sales $28,566 $22,792 $19,940 No sales to an individual customer accounted for more than 10% of net sales during any of the last three fiscal years. The Company is a value-added distributor of products from infrastructure, plumbing and appliances to HVAC, fire, fabrication 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. Depreciation and amortization and capital expenditures by segment: For the years ended July 31, (In millions) 2022 2021 2020 Depreciation and amortization: United States (1) $292 $288 $270 Canada 9 9 10 Corporate — 1 2 Total depreciation and amortization $301 $298 $282 (1) Includes amortization of acquired intangible assets of $114 million, $131 million and $113 million in 2022, 2021 and 2020, respectively. These amounts are not included in the United States segment adjusted operating profit. Capital expenditures: United States 283 232 278 Canada 7 9 5 Corporate — — — Total capital expenditures $290 $241 $283 Assets by segment include: As of July 31, (In millions) 2022 2021 Assets: United States $13,747 $11,247 Canada 802 737 Corporate 1,112 1,725 Total assets $15,661 $13,709 |
Earnings per share
Earnings per share | 12 Months Ended |
Jul. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of share awards as determined under the treasury stock method. The following table shows the calculation of diluted shares: For the years ended July 31, (In millions, except per share amounts) 2022 2021 2020 Income from continuing operations 2,099 $1,630 $973 Income (loss) from discontinued operations (net of tax) 23 (158) (12) Net income $2,122 $1,472 $961 Weighted average number of shares outstanding: Basic weighted-average shares 217.7 223.5 224.8 Effect of dilutive securities 1.2 1.3 2.0 Diluted weighted-average shares 218.9 224.8 226.8 Earnings per share - Basic: Continuing operations $9.64 $7.29 $4.32 Discontinued operations 0.11 (0.70) (0.05) Total $9.75 $6.59 $4.27 Earnings per share - Diluted: Continuing operations $9.59 $7.25 $4.29 Discontinued operations 0.10 (0.70) (0.05) Total $9.69 $6.55 $4.24 Excluded anti-dilutive shares 0.1 0.1 0.1 |
Income tax
Income tax | 12 Months Ended |
Jul. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income tax | Income tax Earnings before income tax by geographical area consisted of the following: For the years ended July 31, (In millions) 2022 2021 2020 United Kingdom $102 $123 $74 United States 2,222 1,385 856 International 384 354 342 Total $2,708 $1,862 $1,272 Provision for income taxes consisted of the following: For the years ended July 31, (In millions) 2022 2021 2020 Current: United Kingdom ($18) $5 $10 Federal and state (U.S.) 528 364 245 International 58 48 35 Total current $568 $417 $290 Deferred: United Kingdom $20 ($8) $11 Federal and state (U.S.) 20 (176) (3) International 1 (1) 1 Total deferred $41 ($185) $9 Provision for income tax $609 $232 $299 The following is a reconciliation of income tax expense with income taxes at the U.K. statutory rate: For the years ended July 31, (In millions) 2022 2021 2020 Provision for income taxes at U.K. statutory rate (1) $515 19.0 % $354 19.0 % $242 19.0 % Non-U.K. tax rate differentials 127 4.7 68 3.7 29 2.3 Impact of change in reserves 8 0.2 (138) (7.4) 33 2.6 Tax rate change — — (29) (1.6) (5) (0.4) Tax credits (9) (0.3) (12) (0.6) (6) (0.5) Non-taxable income (9) (0.3) (18) (1.0) (8) (0.6) Other (23) (0.8) 7 0.4 14 1.1 Income tax expense $609 22.5 % $232 12.5 % $299 23.5 % (1) Ferguson, plc is tax resident in the U.K. Therefore, the Company has utilized the U.K. statutory rate. Deferred Taxes Significant components of the Company’s deferred tax assets and liabilities are as follows: As of July 31, (In millions) 2022 2021 Assets: Deferred compensation $48 $63 Tax loss carryforwards 184 184 Lease liabilities 306 275 Warranty and other liabilities 103 140 Inventory 50 68 Other 37 64 Total deferred tax assets 728 794 Valuation allowance (77) (77) Total deferred tax assets, net of valuation allowance $651 $717 Liabilities: Right of use assets ($306) ($281) Goodwill and intangible assets (119) (99) Tax method change (49) (97) Total deferred tax liabilities (474) (477) Net deferred tax assets $177 $240 We recognize a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. Our valuation allowance at July 31, 2022 and 2021 relates to foreign net capital loss carryforwards in the U.K. and Canada which are not expected to be realizable. For the year ended July 31, 2022, there was no change in the valuation allowance (2021: $30 million and 2020: $2 million). As of July 31, 2022, the Company had $711 million of gross loss carryforwards related to the United Kingdom operations. At July 31, 2022, the Company had U.S. federal and state net operating loss carryforwards for income tax purposes of $19 million and $17 million, respectively. Some of the loss carryforwards may expire at various dates through 2039. At July 31, 2022, the Company had $8 million of gross loss carryforwards related to international operations. A portion of these losses related to capital losses were offset with valuation allowances. Unrecognized Tax Benefits The following table reconciles the beginning and ending amount of our gross unrecognized tax benefits: For the years ended July 31, (In millions) 2022 2021 2020 Unrecognized tax benefits at beginning of fiscal year $132 $245 $220 Additions based on tax positions related to current year 27 28 26 Additions for tax positions of prior years 11 2 — Reductions for tax positions of prior years — (8) — Reductions due to settlements — — (1) Reductions due to lapse of statute of limitations (30) (135) — Total $140 $132 $245 As of July 31, 2022, the unrecognized tax benefits that, if recognized, would impact the effective tax rate were $140 million (2021: $132 million and 2020: $245 million). The Company recognizes interest and penalties in the income tax provision in its consolidated statements of earnings. As of July 31, 2022, the Company had accrued interest of $17 million (2021: $16 million and 2020: $66 million). For the year end July 31, 2022, the interest included in income tax expense was an expense of $1 million (2021: benefit $42 million and 2020: expense $21 million). Penalties related to these positions were not material for all periods presented. The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlement of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. The Company anticipates that the balance of gross unrecognized tax benefits, excluding interest and penalties, will be reduced by $23 million during the next 12 months, primarily due to the anticipated settlement of tax examinations and statute of limitation expirations. However, the outcomes and timing of such events are highly uncertain and changes in the occurrence, expected outcomes and timing of such events could cause the Company’s current estimate to change materially in the future. Reinvestment of Unremitted earnings We consider foreign earnings of specific subsidiaries to be indefinitely reinvested. These permanently reinvested earnings of foreign subsidiaries at July 31, 2022 amounted to $658 million (2021: $551 million). The Company is not recording a deferred tax liability, if any, on such amounts. If at some future date, the Company ceases to be permanently reinvested in these foreign subsidiaries, the Company may be subject to foreign withholding and other taxes on these undistributed earnings and may need to record a deferred tax liability for any outside basis difference on these specific foreign subsidiaries. Tax Return Examination Status The Company files income tax returns in the U.K., U.S. and in various foreign, state and local jurisdictions. We are subject to tax audits in the various jurisdictions until the respective statutes of limitation expire. The Company is no longer subject to U.K. examinations by tax authorities for fiscal years before 2019 and U.S. federal income tax examinations by tax authorities for fiscal years before 2019. There are ongoing U.S. state and local audits and other foreign audits covering fiscal 2008-2020. We do not expect the results from any ongoing income tax audit to have a material impact on our consolidated financial condition, results of operations or cash flows. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Jul. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment consisted of the following: As of July 31, (In millions) 2022 2021 Land $273 $271 Buildings 1,103 1,048 Leasehold improvements 455 423 Plant and machinery 719 641 Other equipment 146 143 Property, plant and equipment 2,696 2,526 Less: Accumulated depreciation (1,320) (1,221) Property, plant and equipment, net $1,376 $1,305 Depreciation related to property, plant and equipment included in operating costs for fiscal 2022 was $140 million (2021: $130 million and 2020: $139 million). |
Leases
Leases | 12 Months Ended |
Jul. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases Lease-related assets and liabilities as presented in the consolidated balance sheets consist of the following: As of July 31, (In millions) 2022 2021 Assets: Operating lease right-of-use assets $1,200 $1,102 Liabilities: Current portion of operating lease liabilities $321 $263 Long-term portion of operating lease liabilities 878 827 Total lease liabilities $1,199 $1,090 The components of leasing costs, included in SG&A, consist of the following: For the years ended July 31, (In millions) 2022 2021 2020 Operating lease costs $349 $318 $313 Variable lease cost 72 62 59 Short-term lease costs 14 1 10 Total lease costs $435 $381 $382 Variable lease costs represent costs incurred in connection with non-lease components, such as common area maintenance, and certain pass-through operating expenses such as real estate taxes and insurance. The weighted average remaining lease terms and discount rates for the Company’s operating leases were as follows: As of July 31, 2022 2021 Weighted average remaining lease term (years) 5.1 5.1 Weighted average discount rate 3.3 % 3.6 % The future minimum rental payments under operating lease obligations, having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows: As of July 31, (In millions) 2022 2023 $330 2024 297 2025 234 2026 166 2027 108 Thereafter 182 Total undiscounted lease payments 1,317 Less: imputed interest (118) Present value of liabilities $1,199 The future minimum lease payments in the table above exclude payments for leases that have not yet commenced. Supplemental cash flow information related to leases from continuing operations consists of the following: For the years ended July 31, (In millions) 2022 2021 2020 Cash paid for operating leases (operating cash flows) $337 $321 $310 Lease assets obtained in exchange for new operating lease liabilities (non-cash) 362 158 115 As of July 31, 2022, the Company had $238 million of non-cancelable operating leases that have not yet commenced. These leases will commence in fiscal 2023 with terms similar to the Company’s current operating leases. |
Goodwill
Goodwill | 12 Months Ended |
Jul. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The Company completed its annual impairment analysis for goodwill during the fourth quarter of fiscal 2022. Based on the results of the Company’s analysis, the Company concluded that the fair value of each reporting unit was substantially in excess of its respective carrying value. There were no impairment charges related to goodwill in fiscal 2022, 2021 or 2020. The following table presents the changes in the net carrying amount of goodwill allocated by reportable segment for the years ended July 31, 2022 and 2021: (In millions) United States Canada Total Balance as of July 31, 2020 $1,590 $147 $1,737 Acquisitions 80 — 80 Effect of currency translation adjustment — 11 11 Balance as of July 31, 2021 1,670 158 1,828 Acquisitions 224 — 224 Effect of currency translation adjustment — (4) (4) Balance as of July 31, 2022 $1,894 $154 $2,048 Cumulative goodwill impairment as of July 31, 2022 108 11 119 Cumulative balance of historical goodwill impairments as of July 31, 2022, as shown above, was the same for all periods presented herein. See note 16 for further information on the additions to goodwill in fiscal 2022. |
Other intangible assets
Other intangible assets | 12 Months Ended |
Jul. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other intangible assets | Other intangible assets The Company's major categories of definite-lived intangible assets and the respective weighted-average remaining useful lives consist of the following: As of July 31, 2022 As of July 31, 2021 (In millions, except remaining useful life) Weighted average remaining useful life (years) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Software 4 $370 ($198) $305 ($156) Customer relationships* 8 1,138 (662) 857 (592) Tradenames and brands* 5 258 (171) 230 (141) Other* 4 206 (159) 187 (144) Total intangible assets $1,972 ($1,190) $1,579 ($1,033) * Acquired intangible assets Amortization expense of intangible assets for the years ended July 31, 2022, 2021, and 2020 was $161 million, $168 million, and $143 million, respectively. In fiscal 2022, the Company also recorded a $15 million impairment charge As of July 31, 2022, expected amortization expense for the unamortized definite-lived intangible assets for the next five years and thereafter is as follows: As of July 31, (In millions) 2022 2023 $171 2024 155 2025 143 2026 106 2027 79 Thereafter 128 Total $782 |
Debt
Debt | 12 Months Ended |
Jul. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s debt obligations consisted of the following: As of July 31, (In millions) 2022 2021 Variable-rate debt: Receivable Securitization Facility 455 — Private Placement Notes: 3.43% due September 2022 250 250 3.30% due November 2023 55 55 3.44% due November 2024 150 150 3.73% due September 2025 400 400 3.51% due November 2026 150 150 3.83% due September 2027 150 150 Unsecured Senior Notes: 4.50% due October 2028 750 750 3.25% due June 2030 600 600 4.25% due April 2027 300 — 4.65% due April 2032 700 — Subtotal $3,960 $2,505 Less: current maturities of debt (250) — Unamortized discounts and debt issuance costs (24) (16) Interest rate swap - fair value adjustment (7) 23 Total long-term debt $3,679 $2,512 Private Placement Notes In June 2015 and November 2017, Wolseley Capital, Inc. (“Wolseley Capital”), a wholly owned subsidiary of the Company, privately placed fixed rate notes in an aggregate principal amount of $800 million and $355 million, respectively (collectively, the “Private Placement Notes”). Interest on the Private Placement Notes is payable semi-annually. There was an additional $95 million of variable rate notes issued in November 2017 that were re-paid in fiscal 2021. Wolseley Capital’s obligations under the note and guarantee agreements are unconditionally guaranteed by the Company and Ferguson UK Holdings Limited. Wolseley Capital may repay the outstanding Private Placement Notes, in whole or in part, at any time at a price equal to 100% of the principal amount being prepaid plus a “make-whole” prepayment premium. The note purchase agreements relating to the Private Placement Notes contain certain customary affirmative covenants, as well as certain customary negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s non-guarantor subsidiaries’ ability to incur indebtedness and the Company’s ability to enter into affiliate transactions, grant liens on its assets, sell assets, or engage in acquisitions, mergers or consolidations. In addition, subject to certain exceptions, the note purchase agreements require us to maintain a leverage ratio. The outstanding Private Placement Notes contain customary events of default. Upon an event of default and an acceleration of the Private Placement Notes, the Company must repay the outstanding Private Placement Notes plus a make-whole premium and accrued and unpaid interest. Unsecured Senior Notes Since 2018, Ferguson Finance, plc (“Ferguson Finance”) has issued $2,350 million in unsecured senior notes (collectively, the “Unsecured Senior Notes”) which are guaranteed by the Company. The Unsecured Senior Notes are fully and unconditionally guaranteed on a direct, unsubordinated and unsecured senior basis by the Company and generally carry the same terms and conditions with interest paid semi-annually. The Unsecured Senior Notes may be redeemed, in whole or in part (i) at 100% of the principal amount on the notes being redeemed plus a “make-whole” prepayment premium at any time prior to three months before the maturity date (the “Notes Par Call Date”) or (ii) after the Notes Par Call Date at 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest on the principal being redeemed. The Unsecured Senior Notes include covenants, subject to certain exceptions, which include limitations on the granting of liens and on mergers and acquisitions. Revolving Credit Facility The Revolving Facility Agreement (as amended from time to time, the “Revolving Facility”), dated March 10, 2020, among the Company, Ferguson UK Holdings Limited, the lenders and arrangers party thereto, and the agent of the lenders party thereto, consists of a $1.1 billion unsecured, revolving loan facility, which terminates in March 2026. The Revolving Facility includes an uncommitted accordion feature that permits the Company to request that the total commitments thereunder be increased by an aggregate amount not to exceed $250 million, subject to the terms and conditions set forth therein. Borrowings are available to the Company and certain of its subsidiaries and bear interest at a rate equal to the sum of LIBOR, plus an applicable margin determined based on our public credit ratings. We are required to pay a quarterly commitment fee and utilization fee in certain circumstances. All obligations under the Revolving Facility are unconditionally guaranteed by the Company and Ferguson UK Holdings Limited, to the extent each entity is not the borrower with respect to such obligation. The Revolving Facility contains certain customary affirmative covenants, as well as certain customary negative covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to incur indebtedness, grant liens on present or future assets and revenues, sell assets, or engage in acquisitions, mergers or consolidations. The Revolving Facility also contains certain events of default, cross-default provisions and cross-acceleration provisions (in each case, with certain grace periods and thresholds). As of July 31, 2022 and 2021, no borrowings were outstanding under the Revolving Facility. Bilateral Loan The Company maintains an unsecured $500 million 364-day revolving facility agreement with Sumitomo Mitsui Banking Corporation, London Branch, as lead arranger, the lenders party thereto, and SMBC Bank International PLC, as agent for the lenders, which expires in March 2023 (the “Bilateral Loan Agreement”). The Bilateral Loan Agreement includes an extension feature that permits the Company, prior to the first anniversary of the date of the Bilateral Loan Agreement, to request that the termination date thereunder be extended for a further period of 364 days, subject to the terms and conditions set forth therein. Borrowings are available to the Company and certain of its subsidiaries and bear interest at a rate equal to the sum of Term SOFR, plus a margin and variable credit adjustment spread depending on the interest period. We are required to pay a quarterly commitment fee. All obligations under the Bilateral Loan Agreement are unconditionally guaranteed by the Company, to the extent that the Company is not the borrower with respect to such obligation. The Bilateral Loan Agreement contains certain affirmative and negative covenants and events of default that are substantially similar to those contained in the Revolving Facility. As of July 31, 2022 and 2021, no borrowings were outstanding under the Bilateral Loan Agreement. Receivable Securitization Facility The Company’s Receivables Securitization Facility (the “Receivables Facility”) is primarily governed by the Receivables Purchase Agreement, dated July 31, 2013, as amended. The Company does not factor its account receivables as this facility is only secured borrowings. As of July 31, 2022, the Receivables Facility consisted of accounts receivable funding for up to $800 million, terminating in May 2024. The Company has available to it an accordion feature whereby the commitment on the Receivables Facility may be increased up to $1.0 billion subject to lender participation. At all times, all borrowings under the Receivables Facility are recorded on the consolidated balance sheet of the Company. Interest is payable under the Receivables Facility at a rate equal to LIBOR, or the commercial paper rates of the conduit lenders, plus an applicable margin. The Company pays customary fees regarding unused amounts to maintain the availability under the Receivables Facility. The Receivables Facility contains certain customary affirmative covenants, as well as certain customary negative covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries party thereto from granting additional liens on the account receivables, selling certain assets or engaging in acquisitions, mergers or consolidations, or, in the case of the borrower, incurring other indebtedness. The Receivables Facility also contains certain customary events of default and cross-default provisions, including requirements that our performance in relation to account receivables remains at set levels (specifically, among other things, relating to timely payments being received from debtors on the account receivables and to the amount of account receivables written off as bad debt) and that a required level of account receivables be generated and available to support the borrowings under the arrangements. As of July 31, 2022, $455 million in borrowings were outstanding under the Receivables Facility. No amounts were outstanding at July 31, 2021. The Company was in compliance with all debt covenants for all facilities as of July 31, 2022 and 2021. Debt maturities, exclusive of unamortized original issue discounts, unamortized debt issuance costs, fair-value hedge adjustments, and finance lease obligations, for the next five fiscal years and thereafter are as follows: As of July 31, (In millions) 2022 2023 $250 2024 510 2025 150 2026 400 2027 450 Thereafter 2,200 Total $3,960 |
Assets and liabilities at fair
Assets and liabilities at fair value | 12 Months Ended |
Jul. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities at fair value | Assets and liabilities at fair value The Company’s assets and liabilities recorded at fair value are summarized as follows: As of July 31, (In millions) Fair Value Hierarchy 2022 2021 Assets at fair value recorded in profit & loss: Current: Derivative financial assets Level 2 $2 $5 Non-current: Derivative financial assets Level 2 — 16 Investments in equity investments Level 3 26 18 Liabilities at fair value recorded in profit & loss: Current: Derivative financial liabilities Level 2 3 — Non-current: Derivative financial liabilities Level 2 3 — Derivative Instruments The Company’s derivatives relate principally to interest rate swaps, designated as fair value hedges, to manage its exposure to interest rate movements on its debt. They are measured at fair value on a recurring basis through profit and loss using forward interest curves which are Level 2 inputs. No transfers between levels occurred during the current or prior year. The notional amount of the Company’s outstanding fair value hedges as of July 31, 2022 and 2021 was $355 million. The Company generally enters into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. Other Fair Value Disclosures Due to their short maturities or their insignificance, the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term debt approximated their fair values at July 31, 2022 and 2021. Non-recurring fair value measurements Fair value estimates are made in connection with the Company’s acquisitions. See note 16 for further details. Equity investments The fair value of the Company’s equity investments is measured on a recurring basis using market derived valuation methods upon occurrence of orderly transactions for identical or similar assets which is deemed a Level 3 input. Liabilities for which fair value is only disclosed The Company estimates that, based on current market conditions, the total fair value of its Unsecured Senior Notes was $2,350 million (2021: $1,538 million) compared with the carrying value of $2,328 million (2021: $1,337 million). The fair value of the Company’s Private Placement Notes is estimated at $1,142 million (2021: $1,273 million) compared with a carrying value of $1,153 million (2021: $1,152 million). The difference in fair values results from changes, since issuance, in the corporate debt markets and investor preferences. The fair value of the Unsecured Senior Notes and Private Placement Notes are classified as Level 2 fair value measurements, and were estimated using quoted market prices as provided in secondary markets that consider the Company's credit risk and market-related conditions. |
Commitment and contingencies
Commitment and contingencies | 12 Months Ended |
Jul. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and contingencies | Commitments and contingencies Legal matters The Company is, from time to time, involved in various legal proceedings considered to be normal course of business in relation to, among other things, the products that we supply, contractual and commercial disputes and disputes with employees. Provision is made if, on the basis of current information and professional advice, liabilities are considered likely to arise. In the case of unfavorable outcomes, the Company may benefit from applicable insurance protection. The Company does not expect any of its pending legal proceedings to have a material adverse effect on its results of operations, financial position or cash flows. |
Accumulated other comprehensive
Accumulated other comprehensive (loss) income | 12 Months Ended |
Jul. 31, 2022 | |
Equity [Abstract] | |
Accumulated other comprehensive (loss) income | Accumulated other comprehensive loss The change in accumulated other comprehensive income was as follows: (In millions, net of tax) Foreign currency translation Pensions Total Balance at July 31, 2019 ($599) ($282) ($881) Other comprehensive income before reclassifications 24 (202) (178) Amounts reclassified from accumulated other comprehensive income 9 5 14 Other comprehensive income (loss) 33 (197) (164) Balance at July 31, 2020 ($566) ($479) ($1,045) Other comprehensive income before reclassifications 35 66 101 Amounts reclassified from accumulated other comprehensive income 135 13 148 Other comprehensive income 170 79 249 Balance at July 31, 2021 ($396) ($400) ($796) Other comprehensive income before reclassifications (24) (18) (42) Amounts reclassified from accumulated other comprehensive income — 8 8 Other comprehensive income (loss) (24) (10) (34) Balance at July 31, 2022 ($420) ($410) ($830) Amounts reclassified from accumulated other comprehensive income related to pension and other post-retirement items include the related income tax impacts. Such amounts consisted of the following: For the years ended July 31, (In millions, net of tax) 2022 2021 2020 Amortization of actuarial losses $10 $18 $7 Tax benefit (2) (5) (2) Amounts reclassified from accumulated other comprehensive income $8 $13 $5 |
Retirement benefit obligations
Retirement benefit obligations | 12 Months Ended |
Jul. 31, 2022 | |
Retirement Benefits [Abstract] | |
Retirement benefit obligations | Retirement benefit obligations The Company provides various retirement benefits to eligible employees, including pension benefits associated with defined benefit plans, contributions to defined contribution plans, post-retirement benefits and other benefits. Eligibility requirements and benefit levels vary depending on associate location. The Company provides defined benefit plans to its employees in Canada and the United Kingdom. The majority of the Canadian defined benefit plans are funded. Post-retirement benefit obligations are not material and have been included in all amounts presented herein. The principal U.K. defined benefit plan is the Wolseley Group Retirement Benefits Plan which provides benefits based on final pensionable salaries. The assets are held in separate trustee administered funds. The plan was closed to new entrants in 2009, it was closed to future service accrual in December 2013, when it was replaced by a defined contribution plan, and it was closed during October 2016 for future non-inflationary salary accrual. In 2017, the Company secured a buy-in insurance policy with Pension Insurance Corporation for the U.K. defined benefit plan. This policy covered all of the benefits provided by the plan to pensioner members at the time. The insurance asset is valued as exactly equal to the insured liabilities. In 2021, prior to the disposal of the U.K. business, Wolseley UK Limited, the U.K. defined benefit plan was transferred to Ferguson UK Holdings Limited. The net periodic benefit costs were valued with a measurement date of July 31 for each year. The funded status of the Company’s plans was as follows: For the years ended July 31, (In millions) 2022 2021 Change in net benefit obligations: Beginning balance $2,208 $2,283 Service cost — 3 Interest cost 41 32 Actuarial (gain) loss (554) (171) Benefits paid (71) (77) Exchange rate adjustment (222) 138 Ending balance $1,402 $2,208 Change in assets at fair value: Beginning balance $2,304 $2,220 Actual return on plan assets (506) (33) Company contributions 15 56 Benefits paid (71) (77) Exchange rate adjustment (234) 138 Ending balance at fair value $1,508 $2,304 Funded status of plans $106 $96 Expected employer contributions to the defined benefit plans for the year ending July 31, 2023 are up to $15 million. Amounts recognized in the balance sheet consisted of: As of July 31, (In millions) 2022 2021 Non-current asset $114 $108 Non-current liability (8) (12) Amounts recognized in accumulated other comprehensive income loss: As of July 31, (In millions) 2022 2021 Net actuarial loss $537 $538 Income tax impact (127) (138) Accumulated other comprehensive loss $410 $400 Components of other comprehensive loss (income) consisted of the following: For the years ended July 31, (In millions) 2022 2021 2020 Net actuarial (gain) loss ($3) ($78) $249 Amortization of net actuarial loss (10) (18) (7) Impact of exchange rates 12 — — Income tax impact 11 17 (45) Other comprehensive loss (income) $ 10 ($79) $197 The costs associated with all of the Company’s plans were as follows: For the years ended July 31, (In millions) 2022 2021 2020 Selling, general and administrative expenses Service costs $— $3 $3 Other expense (income), net Amortization of net actuarial losses 10 18 7 Interest cost 41 32 36 Expected return on plan assets (45) (60) (53) Net periodic benefit (income) cost $6 ($7) ($7) Weighted-average assumptions: Discount rate, net periodic benefit cost 1.78 % 1.56 % 2.21 % Discount rate, benefit obligations 3.53 % 1.78 % 1.56 % Expected return on plan assets 2.12 % 2.60 % 3.15 % Salary growth rate 2.35 % 2.13 % 2.08 % The Company determines the discount rate primarily by reference to rates on high-quality, long-term corporate and government bonds that mature in a pattern similar to the expected payments to be made under the various plans. The weighted average discount rate assumptions used by the Company to determine the benefit obligations was 3.53%, 1.78% and 1.56% for fiscal 2022, 2021 and 2020, respectively. The Company has established strategic asset allocation percentage targets for significant asset classes with the aim of achieving an appropriate balance between risk and return. The Company periodically revises asset allocations, where appropriate, in an effort to improve return and/or manage risk. The expected return on plan assets is determined based on the expected long-term rate of return on plan assets and the market-related value of plan assets. The market-related value of plan assets is based on long-term expectations given current investment objectives and historical results. The weighted average expected rate of return assumptions were 2.12%, 2.60%, and 3.15% for fiscal 2022, 2021 and 2020, respectively. Investment Strategy The Company’s investment strategy for its funded post-employment plans is decided locally and, if relevant, by the trustees of the plan and takes account of the relevant statutory requirements. The Company’s objective for the investment strategy is to achieve a target rate of return in excess of the increase in the liabilities, while taking an acceptable amount of investment risk relative to the liabilities. This objective is implemented by using specific allocations to a variety of asset classes that are expected over the long term to deliver the target rate of return. For the U.K. plan, the guaranteed insurance policy represents approximately 30% of the plan assets. For the remaining assets, the strategy is to invest in a mix of equities, bonds and other income-generating asset classes so that expected cash flows broadly match a high proportion of the cash flows of the plan’s expected liabilities. The investment strategy is subject to regular review by the trustees of the plan in consultation with the Company. For the plans in Canada, the investment strategy is to invest predominantly in equities and bonds. The Company’s weighted-average asset allocations by asset category were as follows: As of July 31, 2022 2021 Asset category: Equity securities 2 % 2% Fixed income securities 67 70 Cash, cash equivalents and other short-term investments 2 1 Guaranteed insurance policies 29 27 Total 100 % 100 % The following table presents the fair value of the Company’s plan assets using the fair value hierarchy as of July 31, 2022: As of July 31, 2022 (In millions) Total Level 1 Level 2 Level 3 U.K. Plan assets: Fixed income securities: Corporate 639 8 492 139 Asset backed 80 16 58 6 Government 246 — 239 7 Cash and cash equivalents 25 22 3 — Insurance policies 418 — — 418 Canada Plan assets: Equity securities 35 35 — — Fixed income securities: Corporate 7 — 7 — Government 32 — 32 — Cash and cash equivalents 1 1 — — Other 25 14 11 — $1,508 $96 $842 $570 The following table presents the fair value of the Company’s plan assets using the fair value hierarchy as of July 31, 2021: As of July 31, 2021 (In millions) Total Level 1 Level 2 Level 3 U.K. Plan assets: Fixed income securities: Corporate 889 11 716 162 Asset backed 173 27 139 7 Government 492 — 477 15 Cash and cash equivalents 19 15 4 — Insurance policies 602 — — 602 Canada Plan assets: Equity securities 48 48 — — Fixed income securities: Corporate 13 — 13 — Government 40 — 40 — Cash and cash equivalents 1 1 — — Other 27 16 11 — $2,304 $118 $1,400 $786 The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3): For the years ended July 31, (In millions) 2022 2021 Beginning balance $786 $707 Realized gains (108) (113) Purchases, sales and settlements, net (20) 147 Impact of exchange rates (88) 45 Ending balance $570 $786 The Company expects the following benefit payments related to its defined benefit pension plan over the next 10 years: As of July 31, (In millions) 2022 2023 $62 2024 64 2025 65 2026 67 2027 68 2028-2032 367 Total $693 Defined Contribution Plans The Company contributes to both employee compensation deferral and profit-sharing plans. The principal plans operated for employees in the United States are defined contribution plans, which are established in accordance with 401k rules in the United States, as well as a Supplemental Executive Retirement Plan. The Company’s Canadian employees are covered by defined contribution plans including a Post Retirement Benefit Plan and Supplemental Executive Retirement Plan. Under the Canadian plans, the Company’s employees are able to make personal contributions. Total expense related to defined contribution plans in fiscal 2022 was $87 million (2021: $74 million and 2020: $68 million). Deferred compensation plan The Company offers its employees a deferred compensation plan that was established to provide added incentive for the retention of key employees. The Company’s obligations related to the plan total $297 million (2021: $328 million), including a current portion of the liability of $29 million (2021: $31 million). The Company has investments in Company-owned life insurance policies that are intended to fund these obligations, however, these assets are subject to the general claims of the Company’s creditors. The assets are recorded at cash surrender value with changes recognized in earnings. The non-current assets total $295 million (2021: $332 million). |
Shareholders_ equity
Shareholders’ equity | 12 Months Ended |
Jul. 31, 2022 | |
Equity [Abstract] | |
Shareholders’ equity | Shareholders’ equity The following table presents a summary of the Company’s share activity: For the years ended July 31, 2022 2021 2020 Ordinary shares: Balance at beginning of period 232,171,182 232,171,182 232,171,182 Change in shares issued — — — Balance at end of period 232,171,182 232,171,182 232,171,182 Treasury shares: Balance at beginning of period (9,862,816) (7,280,222) (2,036,945) Repurchases of ordinary shares (11,413,180) (3,020,368) (5,591,570) Treasury shares used to settle share-based compensation awards 197,419 437,774 348,293 Balance at end of period (21,078,577) (9,862,816) (7,280,222) Employee Benefit Trust: Balance at beginning of period (833,189) (1,277,347) (1,563,778) New shares purchased (600,000) — (307,345) Employee Benefit Trust shares used to settle share-based compensation awards 586,698 444,158 593,776 Balance at end of period (846,491) (833,189) (1,277,347) Total shares outstanding at end of period 210,246,114 221,475,177 223,613,613 Two Employee Benefit Trusts have been established in connection with the Company’s discretionary share option plans and long-term incentive plans. Dividends due on shares held by the Employee Benefit Trusts are waived in accordance with the provisions of the trust deeds. At July 31, 2022, the shares held in trusts had a market value of $107 million (2021: $117 million). Share Repurchases In September 2021, the Company announced a program to repurchase up to $1.0 billion of shares with the aim of completing the purchases within 12 months. In March 2022, the Company announced an increase of $1.0 billion to its share repurchase program, bringing the total to $2.0 billion. As of July 31, 2022, the Company has completed $1.5 billion of the announced $2.0 billion repurchase program. In September 2022, the Company extended its share repurchase program by an additional $0.5 billion, resulting in a remaining balance of $1.0 billion, which is expected to be completed within the next 12 months. The Company is currently purchasing shares under an irrevocable and non-discretionary arrangement (the “Arrangement”) with $324 million in accrued repurchases remaining, which is recorded as a current liability in the consolidated balance sheet. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Jul. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based compensation | Share-based compensation The Ferguson Group International Sharesave Plan 2011, the Ferguson Group International Sharesave Plan 2019 and the Ferguson Group Long Term Incentive Plan 2019 (the “LTIP”) provide guidelines to determine the maximum number of ordinary shares that can be granted under each plan. Under these plans, the Company cannot grant equity awards that would result in the issuance of ordinary shares that, when aggregated with awards issued and outstanding under all of the Company’s other equity plans, would exceed 10% of the Company’s issued ordinary share capital (adjusted for share issuance and cancellation) in any rolling 10-year period. In addition, as applicable, the Company is committed to not issuing new shares or reissuing treasury shares to executives under its equity plans that, when aggregated with issued and outstanding awards held by executives under all of the Company’s other equity plans, would exceed 5% of the issued ordinary share capital of the Company (adjusted for share issuance and cancellation) in any rolling 10-year period. The Ferguson Group Employee Share Purchase Plan 2021 provides for a limit of 20 million ordinary shares that can be awarded under the plan subject to certain guidelines set forth in the plan that are consistent with the limits as described above. The Ferguson Group Deferred Bonus Plan 2019, the Ferguson Group Ordinary Share Plan 2019 (the “OSP”) and the Ferguson Group Performance Ordinary Share Plan 2019 (the “POSP”) each provides for the grant of equity awards without limitation on the number of ordinary shares that can be awarded under the subject plan. The OSP grants to employees share awards that vest over a period of time (“time vested”), typically three years. Dividends do not accrue during the vesting period. The fair value of the award is based on share price on the date of grant. Awards granted under the POSP vest at the end of a three-year performance cycle (“performance vested”). The number of ordinary shares granted upon vesting varies based upon the Company’s performance against an adjusted operating profit measure. Dividends do not accrue during the vesting period. The fair value of the award is based on share price on the date of grant. Awards granted under the LTIP vest at the end of a three-year performance period. The number of ordinary shares granted upon vesting varies based on Company measures of inflation-indexed EPS, cash flow, and share performance compared with a peer company set. Based on the terms of this plan, the LTIP is treated as a liability-settled plan. As such, the fair value is initially determined at the date of grant, and is remeasured at each balance sheet date until the liability is settled. Dividends accrue during the vesting period. The activity for fiscal 2022 with respect to all awards under the Company’s incentive plans is summarized in the following table: Number of Shares Weighted Average grant date fair value Outstanding as July 31, 2021 1,824,615 $78.58 Time vested grants 78,816 134.29 Performance vested grants 184,404 134.29 Long-term incentive plan grants (1) 20,084 142.56 Share adjustments based on performance 205,874 132.43 Vested (652,202) 65.58 Forfeited (85,037) 97.66 Outstanding at July 31, 2022 1,576,554 $100.03 (1) These awards are liability-settled awards. The vesting date fair value of time vested, performance vested awards and long-term incentive awards in fiscal 2022 was $94 million (2021: $60 million and 2020: $61 million). The weighted-average grant-date fair value per share of time vested, performance vested awards and long-term incentive awards was $134.88 (2021: $98.53 and 2020: $75.48). The Company recognized share-based compensation expense within SG&A in the fiscal 2022 consolidated statements of earnings of $57 million (2021: $77 million and 2020: $29 million). The total associated income tax benefit recognized in fiscal 2022 was $20 million (2021: $20 million and 2020: $12 million). Total unrecognized share-based payment expense for all share-based payment plans was $62 million at July 31, 2022, which is expected to be recognized over a weighted average period of 1.7 years. As of July 31, 2022, 19.8 million ordinary shares remain available for allotment under the rules of the Ferguson Group Employee Share Purchase Plan 2021. The exercise price per ordinary share will be prescribed by the Board for each offering period and may not be less than 85% of the lesser of the market value of an ordinary share on the date of grant and the market value of an ordinary share on the date of exercise. During fiscal 2022, there were approximately 122,218 shares purchased under the prior employee sharesave plan at an average price of $106.50. For additional information about the Company share-based compensation plans, see Part III, Item 11: Executive Compensation - Employee Share Schemes. |
Acquisitions
Acquisitions | 12 Months Ended |
Jul. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions The Company acquired the following businesses during fiscal 2022. Each of the acquired businesses are engaged in the distribution of plumbing and heating products and was primarily acquired to support growth, primarily in the United States. All transactions have been accounted for by the acquisition method of accounting. Name Date of acquisition Country of Equity/asset deal Acquired % Meyer Electric Co. September 2021 USA Asset 100 % Sunstate Meter & Supply, Inc. October 2021 USA Asset 100 % Safe Step Walk-In Tub Company, Inc. November 2021 USA Asset 100 % Royal Pacific Limited November 2021 USA Equity 100 % Hot Water Products, Inc. December 2021 USA Asset 100 % Plumbers Supply Company of St. Louis January 2022 USA Asset 100 % Adirondack Piping Solutions, Inc. February 2022 USA Asset 100 % A.P. Supply Co. March 2022 USA Asset 100 % Lighting and Appliance Incorporated April 2022 USA Asset 100 % Founders Kitchen and Bath, Inc. April 2022 USA Asset 100 % Canadian Safe-Step Tubs, Inc. May 2022 CA Asset 100 % Safe-Step Tubs Northwest Inc. May 2022 USA Equity 100 % Aaron & Company, Inc. May 2022 USA Equity 100 % Triton Environmental, LLC June 2022 USA Asset 100 % D2 Land & Water Resource, Inc. July 2022 USA Asset 100 % Minka Lighting, LLC July 2022 USA Equity 100 % Rybak Engineering, Inc. July 2022 USA Asset 100 % The assets and liabilities acquired and the consideration for these acquisitions are as follows: Year ended July 31, (In millions) 2022 Intangible assets: Trade names and brands $27 Customer relationships 282 Other 17 Right of use assets 65 Property, plant and equipment 11 Inventories 139 Trade and other receivables 91 Cash, cash equivalents and bank overdrafts 18 Lease liabilities (65) Trade and other payables (68) Deferred tax (17) Provisions (1) Total 499 Goodwill 224 Consideration $723 Satisfied by: Cash $668 Deferred consideration $55 Total consideration $723 The fair values of the assets acquired are considered preliminary and are based on management’s best estimates. Further adjustments may be necessary when additional information becomes available about events that existed at the date of acquisition. Amendments to fair value estimates may be made to these figures in the 12 months following the date of acquisition. As of the date of this Annual Report, the Company has made all known material adjustments. The fair value estimates of intangible assets are considered non-recurring, Level 3 measurements within the fair value hierarchy and are estimated as of each respective acquisition date. The goodwill on these acquisitions is attributable to the anticipated profitability of the new markets and product ranges to which the Company has gained access and additional profitability, operating efficiencies and other synergies available in connection with existing markets. See note 7 for the allocation of acquired goodwill between the United States and Canada segments. Deferred consideration represents the expected payout due to certain sellers of acquired businesses and is considered a non-cash investing activity as of the date of acquisition. The liability is estimated using assumptions regarding the expectations of an acquiree’s ability to achieve operating targets, as defined in the purchase agreements, over a period of time that typically spans one to three years. Deferred consideration for all current year and prior year acquisitions was recorded at the maximum value as it was deemed probable that the performance targets would be achieved. The businesses acquired in fiscal 2022 contributed $227 million to net sales and $8 million loss to the Company’s income before income tax, including acquired intangible amortization, transaction and integration costs for the period between the date of acquisition and the balance sheet date. If each acquisition had been completed on the first day of the financial period, the Company’s net sales in fiscal 2022 would have been $29,105 million (2021: $23,510 million). The impact on income before income tax in fiscal 2022 and 2021, including additional amortization, transaction and integration costs, would not be material. The net outflow of cash in respect of the purchase of businesses is as follows: Year ended July 31, (In millions) 2022 2021 Purchase consideration $668 $299 Cash, cash equivalents and bank overdrafts acquired (18) (13) Cash consideration paid, net of cash acquired 650 286 Deferred and contingent consideration paid for prior years’ acquisitions (1) 22 49 Net cash outflow in respect of the purchase of businesses $672 $335 (1) Included in other financing activities in the Consolidated Statements of Cash Flows |
Discontinued operations and dis
Discontinued operations and disposals | 12 Months Ended |
Jul. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued operations and disposals | Discontinued operations and disposals On January 29, 2021, the Company disposed of the shares in its U.K. business, Wolseley UK Limited. As such, the disposal group has been presented as a discontinued operation. The results from discontinued operations, which have been included in the consolidated statements of earnings are as follows: Year ended July 31, (In millions, except per share amounts) 2022 2021 2020 Net sales $— $1,138 $1,879 Cost of sales — (879) (1,440) Gross profit — 259 439 Selling, general and administrative expenses — (194) (417) Depreciation and amortization — (11) (43) Gain (loss) on disposal of business, net 23 (200) — Income (loss) before income tax 23 (146) (21) Provision for income taxes — (12) 9 Income (loss) from discontinued operations $23 ($158) ($12) Earnings per share - Basic $0.11 ($0.70) ($0.05) Earnings per share - Diluted $0.10 ($0.70) ($0.05) In fiscal 2022, the gain on disposal of business comprised a gain on the sale of land in connection with the Company’s former Nordic operations that were disposed of in a prior year, generating $24 million in cash flow from investing activities. In fiscal 2021, the net loss on disposal of business primarily related to the disposal of the U.K. business, Wolseley UK Limited, comprising a loss on disposal of $449 million of the U.K. business, partially offset by a $235 million gain from the reclassification of currency translation adjustments from accumulated other comprehensive loss into income following the abandonment of former financing subsidiaries, as well as a $14 million gain on a prior year’s disposal of assets. |
Related party transactions
Related party transactions | 12 Months Ended |
Jul. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactionsFor fiscal 2022, the Company purchased $22 million (2021: $24 million and 2020: $18 million) of delivery, installation and related administrative services from companies that are, or are indirect wholly owned subsidiaries of companies that are, controlled or significantly influenced by a Ferguson Non-Executive Director. No material amounts are due to such companies. The services are purchased on an arm’s-length basis. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Jul. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of consolidation | Basis of consolidation These consolidated financial statements include the results of the Company and its wholly-owned subsidiaries and its share of after tax profits and losses of its equity method investments. All intercompany transactions are eliminated from the consolidated financial statements. |
Basis of presentation | Effective August 1, 2021, the Company transitioned from International Financial Reporting Standards (“IFRS”) accepted by the International Accounting Standards Board to accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements and notes thereto, including all prior periods presented, have been presented under U.S. GAAP. |
Fiscal year | Fiscal year Except as otherwise specified, references to years indicate our fiscal year ended July 31 of the respective year. For example, references to “fiscal 2022” or similar references refer to the fiscal year ended July 31, 2022. |
Use of estimates | Use of estimates The preparation of the Company's Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions affecting reported amounts in the Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. |
Accounts receivables | Accounts receivables |
Advertising and marketing costs | Advertising and marketing costsAdvertising costs, including digital, television, radio and print, are expensed when the advertisement first appears. Certain marketing, or co-op, contributions are received to fund marketing activities of specific, incremental, and identifiable costs incurred to promote suppliers’ products or activities, which are recorded in SG&A as reductions of the related marketing costs. |
Business combinations | Business combinations The assets and liabilities of acquired businesses are recorded at their fair values at the date of acquisition. The excess of the purchase price over the fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits with banks with original maturities of three months or less and overdrafts to the extent there is a legal right of offset and practice of net settlement with cash balances. Restricted cash consists of deferred consideration for business combinations, subject to various settlement agreements, and is recorded in prepaid and other current assets in the Company’s balance sheets. |
Concentrations of credit risk | Concentrations of credit risk The Company monitors credit risk associated with those financial institutions with which it conducts significant business. Credit risk, including but not limited to counterparty non-performance under derivative instruments and our credit facilities, is not considered significant, as we primarily conduct business with large, well-established financial institutions. This risk is managed by setting credit and settlement limits for approved counterparties. In addition, the Company has established guidelines that it follows regarding counterparty credit ratings which are monitored regularly, seeking to limit its exposure to any individual counterparty. The concentration of credit risk was deemed not significant as of July 31, 2022 and 2021. |
Cost of sales | Cost of sales Cost of sales includes the cost of goods purchased for resale, net of earned rebates, and the cost of bringing inventory to a sellable location and condition. As the Company does not produce or manufacture products, its inventories are finished goods and therefore depreciation related to warehouse facilities and equipment is presented separately within operating expenses. |
Derivative instruments and hedging activity | Derivative instruments and hedging activity Derivative financial instruments, in particular interest rate swaps and foreign exchange swaps, are used to manage the financial risks arising from the Company’s business activities and the financing of those activities. Derivatives are not used for speculative purposes or trading activities and have generally not been significant. Derivatives are measured at their fair values and included in other assets and other liabilities in the consolidated balance sheets. When the hedging relationship is classified as an effective fair value hedge, the carrying amount of the hedged asset or liability is adjusted by the change in its fair value attributable to the hedged risk and the resulting gain or loss is recognized in the Consolidated Statements of Earnings where it will be offset by the change in the fair value of the hedging instrument. |
Discontinued operations | Discontinued operations When the Company has disposed of, or classified as held for sale, a business component that represents a strategic shift with significant effect on the Company’s operations and financial results, it classifies that business component as a discontinued operation and retrospectively presents discontinued operations for the comparable periods. The post-tax income, or loss, of discontinued operations are shown as a single line on the face of the consolidated statements of earnings. The disposal of the discontinued operation would also result in a gain or loss upon final disposal. |
Fair value measurements | Fair value measurement s The applicable accounting guidance for fair value measurements established a fair value hierarchy. The fair value hierarchy established under this guidance prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted prices, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. |
Foreign currency | Foreign currency The consolidated financial statements are presented in U.S. dollars. Results of operations of foreign subsidiaries are translated into U.S. dollars using average exchange rates during the year. The assets and liabilities of those subsidiaries are translated into U.S. dollars using exchange rates at the current rate of exchange on the last day of the reporting period. These foreign currency translation adjustments are included in accumulated other comprehensive loss. Foreign currency transaction gains and losses are not material. |
Goodwill | Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net identifiable assets of the acquired business at the date of acquisition. Goodwill is not amortized but is carried at cost less accumulated impairment losses. The Company performs an annual impairment assessment in the fourth quarter of each year, or more frequently if changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment assessment begins with an option to assess qualitative factors to determine whether a quantitative evaluation is appropriate for determining potential goodwill impairment. The quantitative impairment assessment compares the fair value of the reporting unit to its carrying value. The reporting units represent the lowest level within the Company at which the associated goodwill is monitored for management purposes and are based on the markets where the business operates. The fair value of a reporting unit is determined using the income approach, which requires significant assumptions regarding future operations and the ability to generate cash flows. These assumptions include a forecast of future operating cash flows over a period of four years, a terminal value, capital requirements and a discount rate. Where the carrying value of a reporting unit exceeds the fair value, an impairment loss is recorded in the consolidated statements of earnings. |
Other intangible assets | Other intangible assets Definite-lived intangible assets are primarily comprised of customer relationships, trade names and other intangible assets, acquired as part of business combinations and are capitalized separately from goodwill and carried at cost less accumulated amortization and accumulated impairment losses. Computer software that is not integral to an item of property, plant and equipment is recognized separately as an intangible asset and is carried at cost less accumulated amortization and accumulated impairment losses. Costs may include software licenses and external and internal costs directly attributable to the development, design and implementation of the computer software. Costs in respect of training and data conversion are expensed as incurred. |
Impairment of long-lived assets | Impairment of long-lived assets The recoverability of long-lived assets, including property, plant and equipment (“PPE”), right of use assets and definite-lived intangible assets, is evaluated when events or changes in circumstances indicate that the carrying amounts of an asset group may not be recoverable. Long-lived depreciable and amortizable assets are tested for impairment in asset groups, which are defined as the lowest level of assets that generate identifiable cash flows that are largely independent of the cash flows of other asset groups. A potential impairment has occurred for an asset group if projected future undiscounted cash flows expected to result from the use and eventual disposition of the assets are less than the carrying amounts of the assets. |
Inventories | Inventories Inventories, which comprise goods purchased for resale, are stated at the lower of cost or net realizable value. Cost is primarily determined using the average cost method. The cost of goods purchased for resale includes import and custom duties, transport and handling costs, freight and packing costs and other attributable costs less trade discounts and rebates. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. |
Leases | Leases The Company enters into contractual arrangements for the utilization of certain non-owned assets. These principally relate to property for the Company’s branches, distribution centers and offices which have varying terms including extension and termination options and periodic rent reviews. The Company determines if an arrangement is a lease at inception. Leases are evaluated at commencement to determine proper classification as an operating lease or a finance lease. The Company’s leases primarily consist of operating leases. The Company recognizes a right-of-use (“ROU”) asset and lease liability at lease commencement based on the present value of lease payments over the lease term. The Company generally uses its incremental borrowing rate as the discount rate as most of the Company’s lease arrangements do not provide an implicit borrowing rate. The incremental borrowing rate is estimated using a combination of U.S. Treasury note rates corresponding to lease terms, as well as a blended credit risk spread. For operating leases, fixed lease payments are recognized on a straight-line basis over the lease term. The Company has elected to not separate lease and non-lease components. Certain lease agreements include variable lease payments that depend on an index, as well as payments for non-lease components, such as common area maintenance, and certain pass-through operating expenses such as real estate taxes and insurance. In instances where these payments are fixed, they are included in the measurement of our lease liabilities, and when variable, are excluded and recognized in the period in which the obligations for those payments are incurred. The Company’s leases do not contain any material residual value guarantees or payments under purchase and termination options which are reasonably certain to be exercised. Lease terms are initially determined as the non-cancelable period of a lease adjusted for options to extend or terminate a lease that are reasonably certain to be exercised. Generally, the Company’s real estate leases have initial terms of three two Right of use assets are carried at cost less accumulated amortization, impairment losses, and any subsequent remeasurement of the lease liability. Initial cost comprises the lease liability adjusted for lease payments at or before the commencement date, lease incentives received, initial direct costs and an estimate of restoration costs. The Company recognizes minimum rent expense on a straight-line basis over the lease term. |
Property, plant and equipment (“PPE”) | Property, plant and equipment (“PPE”) PPE is recorded at cost less accumulated depreciation. Cost includes expenditures necessary to acquire and prepare PPE for its intended use. In addition, subsequent costs that increase the productive capacity or extend the useful life of PPE are capitalized. The cost of repairs and maintenance are expensed as incurred. |
Rebates | Rebates The Company has agreements (“supplier rebates”) with a number of its suppliers whereby volume-based rebates, marketing support and other discounts are received in connection with the purchase of goods for resale from those suppliers. The majority of volume-based supplier rebates are determined by reference to guaranteed rates of rebate. These calculations require minimal judgment. A small proportion of volume-based supplier rebates are subject to tiered targets where the rebate percentage increases as volumes purchased reach agreed targets within a set period of time. The Company estimates supplier rebates based on forecasts which are informed by historical trading patterns, current performance and trends. Rebates relating to the purchase of goods for resale are accrued as earned and are recorded initially as a deduction in inventory with a subsequent reduction in cost of sales when the related goods are sold. Supplier rebates receivable are offset with amounts owed to each supplier at the balance sheet date and are included within accounts payables where the Company has the legal right to offset and net settles balances. Where the supplier rebates are not offset against amounts owed to a supplier, the outstanding amount is recorded in prepaid and other current assets in the consolidated balance sheet. |
Revenue recognition | Revenue recognition The Company recognizes revenue when a sales arrangement with a customer exists (e.g., contract, purchase orders, others), the transaction price is fixed or determinable and the Company has satisfied its performance obligation per the sales arrangement. The majority of the Company’s revenue originates from sales arrangements with a single performance obligation to deliver products, whereby performance obligations are satisfied when control of the product is transferred to the customer which is the point they are delivered to, or collected by, the customer. Therefore, shipping and handling activities are not deemed a separate performance obligation. Revenue from the provision of goods is only recognized when the transaction price is determinable and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods to be transferred to the customer. Payment terms between the Company and its customers vary by the type of customer, country of sale and the products sold. The Company does not have significant financing components in its contracts and the payment due date is typically shortly after sale. In some limited cases, the Company’s contracts contain services and products that are deemed one performance obligation as the services are highly interdependent and interrelated with the products or are significantly integrated with the products. Contracts in which services provided are a separately identifiable performance obligation are not material. In some instances, goods are delivered directly to the customer by the supplier. The Company has concluded that it is the principal in these transactions as it is primarily responsible to the customer for fulfilling the obligation and has the responsibility for identifying and directing the supplier to deliver the goods to the customer. The Company offers a right of return to its customers for most goods sold. Revenue is reduced by the amount of expected returns in the period in which the related revenue is recorded with a corresponding liability recorded in other current liabilities. The Company also recognizes a return asset in prepaid and other current assets with a corresponding adjustment to cost of sales, for the right to recover the returned goods, measured at the former carrying value, less any expected recovery costs. |
Share-based compensation | Share-based compensation Share-based incentives are provided to associates under the Company’s long-term incentive plans and all-employee sharesave plans. The Company recognizes a compensation cost in respect of these plans that is primarily based on the fair value of the awards. For equity-settled plans, the fair value is determined at the date of grant and is not subsequently remeasured unless the conditions on which the award was granted are modified. For liability-settled plans, the fair value is initially determined at the date of grant and is remeasured at each balance sheet date until the liability is settled. The related liability is recorded in other current liabilities and other long-term liabilities. Generally, the compensation cost is recognized on a straight-line basis over the vesting period, utilizing cumulative catch-up for changes in the liability-settled plans. Estimates of expected forfeitures are made at the date of grant to appropriately reduce expense for those grants expected not to satisfy service conditions or non-market performance conditions. The estimated forfeitures are adjusted when facts and circumstances indicate the prior estimate is no longer appropriate. |
Tax | Tax The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date. The Company recognizes DTAs to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize our DTAs in the future in excess of their net recorded amount, the DTA valuation allowance would be appropriately adjusted, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with Accounting Standard Codification (“ASC”) 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements Accounting Standards Update (“ASU”) No. 2020-04. In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting. This ASU, and subsequent clarifications, provide practical expedients for contract modification accounting related to the transition away from the London Interbank Offered Rate (LIBOR) and other interbank offering rates to alternative reference rates. The expedients are applicable to contract modifications made and hedging relationships entered into on or before December 31, 2022. The amendments should be applied on a prospective basis. The Company continues to evaluate the impact of reference rate reform and does not currently expect a material impact to the Company’s consolidated financial statements. ASU No. 2021-08. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments address how to determine whether a contract liability is recognized by the acquirer in a business combination and provides specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted, including adoption in an interim period. The Company is evaluating this standard update and does not expect a material impact to the Company’s consolidated financial statements. ASU No. 2022-03. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, ASU 2022-03 introduces new disclosure requirements to provide investors with information about contractual sale restrictions, including the nature and remaining duration of these restrictions. ASU 2022-03 is effective for interim and annual periods beginning after December 15, 2023, although early adoption is permitted. The Company's practice aligns with this clarification and it is evaluating the additional disclosure requirements. Recent accounting pronouncements pending adoption that are not discussed above are either not applicable, or will not have, or are not expected to have, a material impact on our consolidated financial condition, results of operations or cash flows. |
Legal matters | Legal matters The Company is, from time to time, involved in various legal proceedings considered to be normal course of business in relation to, among other things, the products that we supply, contractual and commercial disputes and disputes with employees. Provision is made if, on the basis of current information and professional advice, liabilities are considered likely to arise. In the case of unfavorable outcomes, the Company may benefit from applicable insurance protection. The Company does not expect any of its pending legal proceedings to have a material adverse effect on its results of operations, financial position or cash flows. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Net Advertising Expense | The following table presents net advertising expenses included in SG&A: For the years ended July 31, (In millions) 2022 2021 2020 Net advertising and marketing costs $389 $299 $249 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. As of July 31, (In millions) 2022 2021 Cash and cash equivalents $771 $1,335 Restricted cash 14 7 Total cash, cash equivalents and restricted cash $785 $1,342 |
Schedule of Finite-Lived Intangible Assets | The estimated useful life of the respective intangible assets are as follows: Customer relationships 4 – 15 years Trade names and brands 1 – 15 years Software 3 – 5 years Other 1 – 4 years As of July 31, 2022 As of July 31, 2021 (In millions, except remaining useful life) Weighted average remaining useful life (years) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Software 4 $370 ($198) $305 ($156) Customer relationships* 8 1,138 (662) 857 (592) Tradenames and brands* 5 258 (171) 230 (141) Other* 4 206 (159) 187 (144) Total intangible assets $1,972 ($1,190) $1,579 ($1,033) * Acquired intangible assets |
Schedule of Estimated Useful Lives of Property, Plant and Equipment | Assets are depreciated to their estimated residual value using the straight-line method over their estimated useful lives as follows: Owned buildings 20 - 50 years Leasehold improvements Period of lease Plant and machinery 10 years Computer hardware 3 - 5 years Furniture, fixtures, equipment 5 - 7 years Vehicles 4 years Property, plant and equipment consisted of the following: As of July 31, (In millions) 2022 2021 Land $273 $271 Buildings 1,103 1,048 Leasehold improvements 455 423 Plant and machinery 719 641 Other equipment 146 143 Property, plant and equipment 2,696 2,526 Less: Accumulated depreciation (1,320) (1,221) Property, plant and equipment, net $1,376 $1,305 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | Segment details were as follows: For the years ended July 31, (In millions) 2022 2021 2020 Net sales: United States $27,067 $21,478 $18,857 Canada 1,499 1,314 1,083 Total net sales $28,566 $22,792 $19,940 Adjusted operating profit: United States $2,893 $2,070 $1,586 Canada 112 76 43 Central and other costs (54) (54) (42) Business restructurings (1) — 11 (72) Corporate restructurings (2) (17) (22) (29) Amortization of acquired intangible assets (114) (131) (114) Interest expense, net (111) (98) (93) Other (expense) income, net (1) 10 (7) Income before income taxes $2,708 $1,862 $1,272 (1) For fiscal 2021, business restructuring reflects the release of provisions in connection with previously anticipated COVID-19 cost actions recorded in fiscal 2020. For fiscal 2020, business restructuring principally comprised costs incurred in the United States and Canada in respect of cost actions taken to ensure the business was appropriately sized for the post COVID-19 operating environment. (2) For fiscal 2022, 2021 and 2020, corporate restructuring costs primarily related to the incremental costs of the Company’s listing in the United States. An additional disaggregation of net sales by end market for continuing operations is as follows: For the years ended July 31, (In millions) 2022 2021 2020 United States: Residential $14,657 $11,990 $10,087 Non-residential: Commercial 8,600 6,661 6,116 Civil/Infrastructure 2,163 1,506 1,315 Industrial 1,647 1,321 1,339 Total Non-residential 12,410 9,488 8,770 Total United States 27,067 21,478 18,857 Canada 1,499 1,314 1,083 Total net sales $28,566 $22,792 $19,940 Depreciation and amortization and capital expenditures by segment: For the years ended July 31, (In millions) 2022 2021 2020 Depreciation and amortization: United States (1) $292 $288 $270 Canada 9 9 10 Corporate — 1 2 Total depreciation and amortization $301 $298 $282 (1) Includes amortization of acquired intangible assets of $114 million, $131 million and $113 million in 2022, 2021 and 2020, respectively. These amounts are not included in the United States segment adjusted operating profit. Capital expenditures: United States 283 232 278 Canada 7 9 5 Corporate — — — Total capital expenditures $290 $241 $283 Assets by segment include: As of July 31, (In millions) 2022 2021 Assets: United States $13,747 $11,247 Canada 802 737 Corporate 1,112 1,725 Total assets $15,661 $13,709 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the calculation of diluted shares: For the years ended July 31, (In millions, except per share amounts) 2022 2021 2020 Income from continuing operations 2,099 $1,630 $973 Income (loss) from discontinued operations (net of tax) 23 (158) (12) Net income $2,122 $1,472 $961 Weighted average number of shares outstanding: Basic weighted-average shares 217.7 223.5 224.8 Effect of dilutive securities 1.2 1.3 2.0 Diluted weighted-average shares 218.9 224.8 226.8 Earnings per share - Basic: Continuing operations $9.64 $7.29 $4.32 Discontinued operations 0.11 (0.70) (0.05) Total $9.75 $6.59 $4.27 Earnings per share - Diluted: Continuing operations $9.59 $7.25 $4.29 Discontinued operations 0.10 (0.70) (0.05) Total $9.69 $6.55 $4.24 Excluded anti-dilutive shares 0.1 0.1 0.1 |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Earnings before income tax by geographical area consisted of the following: For the years ended July 31, (In millions) 2022 2021 2020 United Kingdom $102 $123 $74 United States 2,222 1,385 856 International 384 354 342 Total $2,708 $1,862 $1,272 |
Schedule of Provision for Income Tax | Provision for income taxes consisted of the following: For the years ended July 31, (In millions) 2022 2021 2020 Current: United Kingdom ($18) $5 $10 Federal and state (U.S.) 528 364 245 International 58 48 35 Total current $568 $417 $290 Deferred: United Kingdom $20 ($8) $11 Federal and state (U.S.) 20 (176) (3) International 1 (1) 1 Total deferred $41 ($185) $9 Provision for income tax $609 $232 $299 |
Schedule of Reconciliation of Income Tax Expense | The following is a reconciliation of income tax expense with income taxes at the U.K. statutory rate: For the years ended July 31, (In millions) 2022 2021 2020 Provision for income taxes at U.K. statutory rate (1) $515 19.0 % $354 19.0 % $242 19.0 % Non-U.K. tax rate differentials 127 4.7 68 3.7 29 2.3 Impact of change in reserves 8 0.2 (138) (7.4) 33 2.6 Tax rate change — — (29) (1.6) (5) (0.4) Tax credits (9) (0.3) (12) (0.6) (6) (0.5) Non-taxable income (9) (0.3) (18) (1.0) (8) (0.6) Other (23) (0.8) 7 0.4 14 1.1 Income tax expense $609 22.5 % $232 12.5 % $299 23.5 % (1) Ferguson, plc is tax resident in the U.K. Therefore, the Company has utilized the U.K. statutory rate. |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: As of July 31, (In millions) 2022 2021 Assets: Deferred compensation $48 $63 Tax loss carryforwards 184 184 Lease liabilities 306 275 Warranty and other liabilities 103 140 Inventory 50 68 Other 37 64 Total deferred tax assets 728 794 Valuation allowance (77) (77) Total deferred tax assets, net of valuation allowance $651 $717 Liabilities: Right of use assets ($306) ($281) Goodwill and intangible assets (119) (99) Tax method change (49) (97) Total deferred tax liabilities (474) (477) Net deferred tax assets $177 $240 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table reconciles the beginning and ending amount of our gross unrecognized tax benefits: For the years ended July 31, (In millions) 2022 2021 2020 Unrecognized tax benefits at beginning of fiscal year $132 $245 $220 Additions based on tax positions related to current year 27 28 26 Additions for tax positions of prior years 11 2 — Reductions for tax positions of prior years — (8) — Reductions due to settlements — — (1) Reductions due to lapse of statute of limitations (30) (135) — Total $140 $132 $245 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Assets are depreciated to their estimated residual value using the straight-line method over their estimated useful lives as follows: Owned buildings 20 - 50 years Leasehold improvements Period of lease Plant and machinery 10 years Computer hardware 3 - 5 years Furniture, fixtures, equipment 5 - 7 years Vehicles 4 years Property, plant and equipment consisted of the following: As of July 31, (In millions) 2022 2021 Land $273 $271 Buildings 1,103 1,048 Leasehold improvements 455 423 Plant and machinery 719 641 Other equipment 146 143 Property, plant and equipment 2,696 2,526 Less: Accumulated depreciation (1,320) (1,221) Property, plant and equipment, net $1,376 $1,305 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Leases [Abstract] | |
Lease Related Assets and Liabilities Disclosures | Lease-related assets and liabilities as presented in the consolidated balance sheets consist of the following: As of July 31, (In millions) 2022 2021 Assets: Operating lease right-of-use assets $1,200 $1,102 Liabilities: Current portion of operating lease liabilities $321 $263 Long-term portion of operating lease liabilities 878 827 Total lease liabilities $1,199 $1,090 |
Schedule of Lease Cost | The components of leasing costs, included in SG&A, consist of the following: For the years ended July 31, (In millions) 2022 2021 2020 Operating lease costs $349 $318 $313 Variable lease cost 72 62 59 Short-term lease costs 14 1 10 Total lease costs $435 $381 $382 The weighted average remaining lease terms and discount rates for the Company’s operating leases were as follows: As of July 31, 2022 2021 Weighted average remaining lease term (years) 5.1 5.1 Weighted average discount rate 3.3 % 3.6 % Supplemental cash flow information related to leases from continuing operations consists of the following: For the years ended July 31, (In millions) 2022 2021 2020 Cash paid for operating leases (operating cash flows) $337 $321 $310 Lease assets obtained in exchange for new operating lease liabilities (non-cash) 362 158 115 |
Schedule of Lease Maturity | The future minimum rental payments under operating lease obligations, having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows: As of July 31, (In millions) 2022 2023 $330 2024 297 2025 234 2026 166 2027 108 Thereafter 182 Total undiscounted lease payments 1,317 Less: imputed interest (118) Present value of liabilities $1,199 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents the changes in the net carrying amount of goodwill allocated by reportable segment for the years ended July 31, 2022 and 2021: (In millions) United States Canada Total Balance as of July 31, 2020 $1,590 $147 $1,737 Acquisitions 80 — 80 Effect of currency translation adjustment — 11 11 Balance as of July 31, 2021 1,670 158 1,828 Acquisitions 224 — 224 Effect of currency translation adjustment — (4) (4) Balance as of July 31, 2022 $1,894 $154 $2,048 Cumulative goodwill impairment as of July 31, 2022 108 11 119 |
Other intangible assets (Tables
Other intangible assets (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The estimated useful life of the respective intangible assets are as follows: Customer relationships 4 – 15 years Trade names and brands 1 – 15 years Software 3 – 5 years Other 1 – 4 years As of July 31, 2022 As of July 31, 2021 (In millions, except remaining useful life) Weighted average remaining useful life (years) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Software 4 $370 ($198) $305 ($156) Customer relationships* 8 1,138 (662) 857 (592) Tradenames and brands* 5 258 (171) 230 (141) Other* 4 206 (159) 187 (144) Total intangible assets $1,972 ($1,190) $1,579 ($1,033) * Acquired intangible assets |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of July 31, 2022, expected amortization expense for the unamortized definite-lived intangible assets for the next five years and thereafter is as follows: As of July 31, (In millions) 2022 2023 $171 2024 155 2025 143 2026 106 2027 79 Thereafter 128 Total $782 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt obligations consisted of the following: As of July 31, (In millions) 2022 2021 Variable-rate debt: Receivable Securitization Facility 455 — Private Placement Notes: 3.43% due September 2022 250 250 3.30% due November 2023 55 55 3.44% due November 2024 150 150 3.73% due September 2025 400 400 3.51% due November 2026 150 150 3.83% due September 2027 150 150 Unsecured Senior Notes: 4.50% due October 2028 750 750 3.25% due June 2030 600 600 4.25% due April 2027 300 — 4.65% due April 2032 700 — Subtotal $3,960 $2,505 Less: current maturities of debt (250) — Unamortized discounts and debt issuance costs (24) (16) Interest rate swap - fair value adjustment (7) 23 Total long-term debt $3,679 $2,512 |
Schedule of Maturities of Long-Term Debt | Debt maturities, exclusive of unamortized original issue discounts, unamortized debt issuance costs, fair-value hedge adjustments, and finance lease obligations, for the next five fiscal years and thereafter are as follows: As of July 31, (In millions) 2022 2023 $250 2024 510 2025 150 2026 400 2027 450 Thereafter 2,200 Total $3,960 |
Assets and liabilities at fai_2
Assets and liabilities at fair value (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Recorded at Fair Value | The Company’s assets and liabilities recorded at fair value are summarized as follows: As of July 31, (In millions) Fair Value Hierarchy 2022 2021 Assets at fair value recorded in profit & loss: Current: Derivative financial assets Level 2 $2 $5 Non-current: Derivative financial assets Level 2 — 16 Investments in equity investments Level 3 26 18 Liabilities at fair value recorded in profit & loss: Current: Derivative financial liabilities Level 2 3 — Non-current: Derivative financial liabilities Level 2 3 — |
Accumulated other comprehensi_2
Accumulated other comprehensive (loss) income (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The change in accumulated other comprehensive income was as follows: (In millions, net of tax) Foreign currency translation Pensions Total Balance at July 31, 2019 ($599) ($282) ($881) Other comprehensive income before reclassifications 24 (202) (178) Amounts reclassified from accumulated other comprehensive income 9 5 14 Other comprehensive income (loss) 33 (197) (164) Balance at July 31, 2020 ($566) ($479) ($1,045) Other comprehensive income before reclassifications 35 66 101 Amounts reclassified from accumulated other comprehensive income 135 13 148 Other comprehensive income 170 79 249 Balance at July 31, 2021 ($396) ($400) ($796) Other comprehensive income before reclassifications (24) (18) (42) Amounts reclassified from accumulated other comprehensive income — 8 8 Other comprehensive income (loss) (24) (10) (34) Balance at July 31, 2022 ($420) ($410) ($830) |
Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified from accumulated other comprehensive income related to pension and other post-retirement items include the related income tax impacts. Such amounts consisted of the following: For the years ended July 31, (In millions, net of tax) 2022 2021 2020 Amortization of actuarial losses $10 $18 $7 Tax benefit (2) (5) (2) Amounts reclassified from accumulated other comprehensive income $8 $13 $5 |
Retirement benefit obligations
Retirement benefit obligations (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The funded status of the Company’s plans was as follows: For the years ended July 31, (In millions) 2022 2021 Change in net benefit obligations: Beginning balance $2,208 $2,283 Service cost — 3 Interest cost 41 32 Actuarial (gain) loss (554) (171) Benefits paid (71) (77) Exchange rate adjustment (222) 138 Ending balance $1,402 $2,208 Change in assets at fair value: Beginning balance $2,304 $2,220 Actual return on plan assets (506) (33) Company contributions 15 56 Benefits paid (71) (77) Exchange rate adjustment (234) 138 Ending balance at fair value $1,508 $2,304 Funded status of plans $106 $96 |
Schedule of Amounts Recognized in Balance Sheet | Amounts recognized in the balance sheet consisted of: As of July 31, (In millions) 2022 2021 Non-current asset $114 $108 Non-current liability (8) (12) |
Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) | Amounts recognized in accumulated other comprehensive income loss: As of July 31, (In millions) 2022 2021 Net actuarial loss $537 $538 Income tax impact (127) (138) Accumulated other comprehensive loss $410 $400 |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Components of other comprehensive loss (income) consisted of the following: For the years ended July 31, (In millions) 2022 2021 2020 Net actuarial (gain) loss ($3) ($78) $249 Amortization of net actuarial loss (10) (18) (7) Impact of exchange rates 12 — — Income tax impact 11 17 (45) Other comprehensive loss (income) $ 10 ($79) $197 |
Schedule of Net Benefit Costs | The costs associated with all of the Company’s plans were as follows: For the years ended July 31, (In millions) 2022 2021 2020 Selling, general and administrative expenses Service costs $— $3 $3 Other expense (income), net Amortization of net actuarial losses 10 18 7 Interest cost 41 32 36 Expected return on plan assets (45) (60) (53) Net periodic benefit (income) cost $6 ($7) ($7) Weighted-average assumptions: Discount rate, net periodic benefit cost 1.78 % 1.56 % 2.21 % Discount rate, benefit obligations 3.53 % 1.78 % 1.56 % Expected return on plan assets 2.12 % 2.60 % 3.15 % Salary growth rate 2.35 % 2.13 % 2.08 % |
Schedule of Allocation of Plan Assets | The Company’s weighted-average asset allocations by asset category were as follows: As of July 31, 2022 2021 Asset category: Equity securities 2 % 2% Fixed income securities 67 70 Cash, cash equivalents and other short-term investments 2 1 Guaranteed insurance policies 29 27 Total 100 % 100 % The following table presents the fair value of the Company’s plan assets using the fair value hierarchy as of July 31, 2022: As of July 31, 2022 (In millions) Total Level 1 Level 2 Level 3 U.K. Plan assets: Fixed income securities: Corporate 639 8 492 139 Asset backed 80 16 58 6 Government 246 — 239 7 Cash and cash equivalents 25 22 3 — Insurance policies 418 — — 418 Canada Plan assets: Equity securities 35 35 — — Fixed income securities: Corporate 7 — 7 — Government 32 — 32 — Cash and cash equivalents 1 1 — — Other 25 14 11 — $1,508 $96 $842 $570 The following table presents the fair value of the Company’s plan assets using the fair value hierarchy as of July 31, 2021: As of July 31, 2021 (In millions) Total Level 1 Level 2 Level 3 U.K. Plan assets: Fixed income securities: Corporate 889 11 716 162 Asset backed 173 27 139 7 Government 492 — 477 15 Cash and cash equivalents 19 15 4 — Insurance policies 602 — — 602 Canada Plan assets: Equity securities 48 48 — — Fixed income securities: Corporate 13 — 13 — Government 40 — 40 — Cash and cash equivalents 1 1 — — Other 27 16 11 — $2,304 $118 $1,400 $786 |
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets | The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3): For the years ended July 31, (In millions) 2022 2021 Beginning balance $786 $707 Realized gains (108) (113) Purchases, sales and settlements, net (20) 147 Impact of exchange rates (88) 45 Ending balance $570 $786 |
Schedule of Expected Benefit Payments | The Company expects the following benefit payments related to its defined benefit pension plan over the next 10 years: As of July 31, (In millions) 2022 2023 $62 2024 64 2025 65 2026 67 2027 68 2028-2032 367 Total $693 |
Shareholders_ equity (Tables)
Shareholders’ equity (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | The following table presents a summary of the Company’s share activity: For the years ended July 31, 2022 2021 2020 Ordinary shares: Balance at beginning of period 232,171,182 232,171,182 232,171,182 Change in shares issued — — — Balance at end of period 232,171,182 232,171,182 232,171,182 Treasury shares: Balance at beginning of period (9,862,816) (7,280,222) (2,036,945) Repurchases of ordinary shares (11,413,180) (3,020,368) (5,591,570) Treasury shares used to settle share-based compensation awards 197,419 437,774 348,293 Balance at end of period (21,078,577) (9,862,816) (7,280,222) Employee Benefit Trust: Balance at beginning of period (833,189) (1,277,347) (1,563,778) New shares purchased (600,000) — (307,345) Employee Benefit Trust shares used to settle share-based compensation awards 586,698 444,158 593,776 Balance at end of period (846,491) (833,189) (1,277,347) Total shares outstanding at end of period 210,246,114 221,475,177 223,613,613 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Award Activity | The activity for fiscal 2022 with respect to all awards under the Company’s incentive plans is summarized in the following table: Number of Shares Weighted Average grant date fair value Outstanding as July 31, 2021 1,824,615 $78.58 Time vested grants 78,816 134.29 Performance vested grants 184,404 134.29 Long-term incentive plan grants (1) 20,084 142.56 Share adjustments based on performance 205,874 132.43 Vested (652,202) 65.58 Forfeited (85,037) 97.66 Outstanding at July 31, 2022 1,576,554 $100.03 (1) These awards are liability-settled awards. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions | Name Date of acquisition Country of Equity/asset deal Acquired % Meyer Electric Co. September 2021 USA Asset 100 % Sunstate Meter & Supply, Inc. October 2021 USA Asset 100 % Safe Step Walk-In Tub Company, Inc. November 2021 USA Asset 100 % Royal Pacific Limited November 2021 USA Equity 100 % Hot Water Products, Inc. December 2021 USA Asset 100 % Plumbers Supply Company of St. Louis January 2022 USA Asset 100 % Adirondack Piping Solutions, Inc. February 2022 USA Asset 100 % A.P. Supply Co. March 2022 USA Asset 100 % Lighting and Appliance Incorporated April 2022 USA Asset 100 % Founders Kitchen and Bath, Inc. April 2022 USA Asset 100 % Canadian Safe-Step Tubs, Inc. May 2022 CA Asset 100 % Safe-Step Tubs Northwest Inc. May 2022 USA Equity 100 % Aaron & Company, Inc. May 2022 USA Equity 100 % Triton Environmental, LLC June 2022 USA Asset 100 % D2 Land & Water Resource, Inc. July 2022 USA Asset 100 % Minka Lighting, LLC July 2022 USA Equity 100 % Rybak Engineering, Inc. July 2022 USA Asset 100 % The net outflow of cash in respect of the purchase of businesses is as follows: Year ended July 31, (In millions) 2022 2021 Purchase consideration $668 $299 Cash, cash equivalents and bank overdrafts acquired (18) (13) Cash consideration paid, net of cash acquired 650 286 Deferred and contingent consideration paid for prior years’ acquisitions (1) 22 49 Net cash outflow in respect of the purchase of businesses $672 $335 (1) Included in other financing activities in the Consolidated Statements of Cash Flows |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The assets and liabilities acquired and the consideration for these acquisitions are as follows: Year ended July 31, (In millions) 2022 Intangible assets: Trade names and brands $27 Customer relationships 282 Other 17 Right of use assets 65 Property, plant and equipment 11 Inventories 139 Trade and other receivables 91 Cash, cash equivalents and bank overdrafts 18 Lease liabilities (65) Trade and other payables (68) Deferred tax (17) Provisions (1) Total 499 Goodwill 224 Consideration $723 Satisfied by: Cash $668 Deferred consideration $55 Total consideration $723 |
Discontinued operations and d_2
Discontinued operations and disposals (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The results from discontinued operations, which have been included in the consolidated statements of earnings are as follows: Year ended July 31, (In millions, except per share amounts) 2022 2021 2020 Net sales $— $1,138 $1,879 Cost of sales — (879) (1,440) Gross profit — 259 439 Selling, general and administrative expenses — (194) (417) Depreciation and amortization — (11) (43) Gain (loss) on disposal of business, net 23 (200) — Income (loss) before income tax 23 (146) (21) Provision for income taxes — (12) 9 Income (loss) from discontinued operations $23 ($158) ($12) Earnings per share - Basic $0.11 ($0.70) ($0.05) Earnings per share - Diluted $0.10 ($0.70) ($0.05) |
Summary of significant accoun_4
Summary of significant accounting policies - Narrative (Details) | 12 Months Ended |
Jul. 31, 2022 extension | |
Accounting Policies [Line Items] | |
Forecast of future operating cash flows (in years) | 4 years |
Minimum | |
Accounting Policies [Line Items] | |
Lease term (in years) | 3 years |
Lease term, extension (in years) | 2 years |
Maximum | |
Accounting Policies [Line Items] | |
Lease term (in years) | 10 years |
Number of extension periods | 4 |
Lease term, extension (in years) | 5 years |
Summary of significant accoun_5
Summary of significant accounting policies - Advertising and Marketing Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Accounting Policies [Abstract] | |||
Net advertising and marketing costs | $ 389 | $ 299 | $ 249 |
Summary of significant accoun_6
Summary of significant accounting policies - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 771 | $ 1,335 | ||
Restricted cash | 14 | 7 | ||
Total cash, cash equivalents and restricted cash | $ 785 | $ 1,342 | $ 2,130 | $ 1,148 |
Summary of significant accoun_7
Summary of significant accounting policies - Useful Life of Intangible Assets (Details) | 12 Months Ended |
Jul. 31, 2022 | |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 8 years |
Trade names and brands | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 5 years |
Software | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 4 years |
Other | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 4 years |
Minimum | Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 4 years |
Minimum | Trade names and brands | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 1 year |
Minimum | Software | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 3 years |
Minimum | Other | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 1 year |
Maximum | Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 15 years |
Maximum | Trade names and brands | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 15 years |
Maximum | Software | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 5 years |
Maximum | Other | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average remaining useful life (years) | 4 years |
Summary of significant accoun_8
Summary of significant accounting policies - Useful Life of PPE (Details) | 12 Months Ended |
Jul. 31, 2022 | |
Owned buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 20 years |
Owned buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 50 years |
Plant and machinery | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 10 years |
Computer hardware | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 3 years |
Computer hardware | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 5 years |
Furniture, fixtures, equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 5 years |
Furniture, fixtures, equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 7 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 4 years |
Segment information - Narrative
Segment information - Narrative (Details) | 12 Months Ended |
Jul. 31, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment information - Items not
Segment information - Items not Allocated (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Net sales: | |||
Total net sales | $ 28,566 | $ 22,792 | $ 19,940 |
Adjusted operating profit: | |||
Adjusted segment operating profit | 2,820 | 1,950 | 1,372 |
Central and other costs | (54) | (54) | (42) |
Amortization of acquired intangible assets | (114) | (131) | (114) |
Interest expense, net | (111) | (98) | (93) |
Other (expense) income, net | (1) | 10 | (7) |
Income before income taxes | 2,708 | 1,862 | 1,272 |
United States | |||
Net sales: | |||
Total net sales | 27,067 | 21,478 | 18,857 |
Adjusted operating profit: | |||
Adjusted segment operating profit | 2,893 | 2,070 | 1,586 |
Amortization of acquired intangible assets | (114) | (131) | (113) |
Canada | |||
Net sales: | |||
Total net sales | 1,499 | 1,314 | 1,083 |
Adjusted operating profit: | |||
Adjusted segment operating profit | 112 | 76 | 43 |
Business restructurings | |||
Adjusted operating profit: | |||
Restructuring costs | 0 | 11 | (72) |
Corporate restructurings | |||
Adjusted operating profit: | |||
Restructuring costs | $ (17) | $ (22) | $ (29) |
Segment information - Disaggreg
Segment information - Disaggregation of Net Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Total net sales | $ 28,566 | $ 22,792 | $ 19,940 |
United States | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 27,067 | 21,478 | 18,857 |
Canada | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 1,499 | 1,314 | 1,083 |
Residential | United States | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 14,657 | 11,990 | 10,087 |
Commercial | United States | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 8,600 | 6,661 | 6,116 |
Civil/Infrastructure | United States | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 2,163 | 1,506 | 1,315 |
Industrial | United States | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 1,647 | 1,321 | 1,339 |
Non-residential: | United States | |||
Segment Reporting Information [Line Items] | |||
Total net sales | $ 12,410 | $ 9,488 | $ 8,770 |
Segment information - Depreciat
Segment information - Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | $ 301 | $ 298 | $ 282 |
Amortization of acquired intangible assets | 114 | 131 | 114 |
Total capital expenditures | 290 | 241 | 283 |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 0 | 1 | 2 |
Total capital expenditures | 0 | 0 | 0 |
United States | |||
Segment Reporting Information [Line Items] | |||
Amortization of acquired intangible assets | 114 | 131 | 113 |
United States | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 292 | 288 | 270 |
Total capital expenditures | 283 | 232 | 278 |
Canada | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 9 | 9 | 10 |
Total capital expenditures | $ 7 | $ 9 | $ 5 |
Segment information - Identifia
Segment information - Identifiable Assets (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 15,661 | $ 13,709 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Total assets | 1,112 | 1,725 |
United States | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 13,747 | 11,247 |
Canada | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 802 | $ 737 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Income from continuing operations | $ 2,099 | $ 1,630 | $ 973 |
Income (loss) from discontinued operations (net of tax) | 23 | (158) | (12) |
Net income | $ 2,122 | $ 1,472 | $ 961 |
Weighted average number of shares outstanding: | |||
Basic weighted-average shares (in shares) | 217,700,000 | 223,500,000 | 224,800,000 |
Effect of dilutive securities (in shares) | 1,200,000 | 1,300,000 | 2,000,000 |
Diluted weighted-average shares (in shares) | 218,900,000 | 224,800,000 | 226,800,000 |
Earnings per share - Basic: | |||
Continuing operations, Basic (in usd per share) | $ 9.64 | $ 7.29 | $ 4.32 |
Discontinued operations, Basic (in usd per share) | 0.11 | (0.70) | (0.05) |
Earnings per share, Basic (in usd per share) | 9.75 | 6.59 | 4.27 |
Earnings per share - Diluted: | |||
Continuing operations, Diluted (in usd per share) | 9.59 | 7.25 | 4.29 |
Discontinued operations, Diluted (in usd per share) | 0.10 | (0.70) | (0.05) |
Earnings per share, Diluted (in usd per share) | $ 9.69 | $ 6.55 | $ 4.24 |
Excluded anti-dilutive shares (in shares) | 100,000 | 100,000 | 100,000 |
Income tax - Earnings Before In
Income tax - Earnings Before Income Tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Investments, Owned, Federal Income Tax Note [Line Items] | |||
United Kingdom | $ 102 | $ 123 | $ 74 |
Income before income taxes | 2,708 | 1,862 | 1,272 |
Foreign, United States | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Foreign | 2,222 | 1,385 | 856 |
Foreign, Excluding United States | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Foreign | $ 384 | $ 354 | $ 342 |
Income tax - Provision for Inco
Income tax - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Current: | |||
United Kingdom | $ (18) | $ 5 | $ 10 |
Federal and state (U.S.) | 528 | 364 | 245 |
International | 58 | 48 | 35 |
Total current | 568 | 417 | 290 |
Deferred: | |||
Deferred Federal Income Tax Expense (Benefit) | 20 | (8) | 11 |
Federal and state (U.S.) | 20 | (176) | (3) |
International | 1 | (1) | 1 |
Total deferred | 41 | (185) | 9 |
Provision for income tax | $ 609 | $ 232 | $ 299 |
Income tax - Reconciliation of
Income tax - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Provision for income taxes at UK statutory rate | $ 515 | $ 354 | $ 242 |
Provision for income taxes at UK statutory rate (percent) | 19% | 19% | 19% |
Non-U.K. tax rate differentials | $ 127 | $ 68 | $ 29 |
Non-UK tax rate differentials (percent) | 4.70% | 3.70% | 2.30% |
Impact of change in reserves | $ 8 | $ (138) | $ 33 |
Impact of change in reserves (percent) | 0.20% | (7.40%) | 2.60% |
Tax rate change | $ 0 | $ (29) | $ (5) |
Tax rate change (percent) | 0% | (1.60%) | (0.40%) |
Tax credits | $ (9) | $ (12) | $ (6) |
Tax credits (percent) | (0.30%) | (0.60%) | (0.50%) |
Non-taxable income | $ (9) | $ (18) | $ (8) |
Non-taxable income (percent) | (0.30%) | (1.00%) | (0.60%) |
Other | $ (23) | $ 7 | $ 14 |
Other (percent) | (0.80%) | 0.40% | 1.10% |
Provision for income tax | $ 609 | $ 232 | $ 299 |
Income tax expense (percent) | 22.50% | 12.50% | 23.50% |
Income tax - Deferred Tax Asset
Income tax - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Assets: | ||
Deferred compensation | $ 48 | $ 63 |
Tax loss carryforwards | 184 | 184 |
Lease liabilities | 306 | 275 |
Warranty and other liabilities | 103 | 140 |
Inventory | 50 | 68 |
Other | 37 | 64 |
Total deferred tax assets | 728 | 794 |
Valuation allowance | (77) | (77) |
Total deferred tax assets, net of valuation allowance | 651 | 717 |
Liabilities: | ||
Right of use assets | (306) | (281) |
Goodwill and intangible assets | (119) | (99) |
Tax method change | (49) | (97) |
Total deferred tax liabilities | (474) | (477) |
Net deferred tax assets | $ 177 | $ 240 |
Income tax - Narrative (Details
Income tax - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Jul. 31, 2023 | Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Investments, Owned, Federal Income Tax Note [Line Items] | |||||
Change in valuation allowance | $ 0 | $ 30,000,000 | $ 2,000,000 | ||
U.K. federal operating loss carryforwards | 711,000,000 | ||||
U.K. gross loss carryforwards | 184,000,000 | 184,000,000 | |||
Unrecognized tax benefits | 140,000,000 | 132,000,000 | 245,000,000 | $ 220,000,000 | |
Accrued interest | 17,000,000 | 16,000,000 | 66,000,000 | ||
Interest included in income tax expense | 1,000,000 | (42,000,000) | 21,000,000 | ||
Reductions due to settlements | 0 | 0 | $ (1,000,000) | ||
Foreign earnings reinvested | 658,000,000 | $ 551,000,000 | |||
Forecast | |||||
Investments, Owned, Federal Income Tax Note [Line Items] | |||||
Reductions due to settlements | $ (23,000,000) | ||||
Foreign, United States | |||||
Investments, Owned, Federal Income Tax Note [Line Items] | |||||
Foreign gross loss carryforwards | 19,000,000 | ||||
U.S. state operating loss carryforwards | 17,000,000 | ||||
Foreign, Excluding United States | |||||
Investments, Owned, Federal Income Tax Note [Line Items] | |||||
Foreign gross loss carryforwards | $ 8,000,000 |
Income tax - Unrecognized Tax B
Income tax - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at beginning of fiscal year | $ 132 | $ 245 | $ 220 |
Additions based on tax positions related to current year | 27 | 28 | 26 |
Additions for tax positions of prior years | 11 | 2 | 0 |
Reductions for tax positions of prior years | 0 | (8) | 0 |
Decrease due to state exposures | 0 | 0 | (1) |
Reductions due to lapse of statute of limitations | (30) | (135) | 0 |
Total | $ 140 | $ 132 | $ 245 |
Property, plant and equipment -
Property, plant and equipment - Schedule of PPE (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 2,696 | $ 2,526 |
Less: Accumulated depreciation | (1,320) | (1,221) |
Property, plant and equipment, net | 1,376 | 1,305 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 273 | 271 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 1,103 | 1,048 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 455 | 423 |
Plant and machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 719 | 641 |
Other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 146 | $ 143 |
Property, plant and equipment_2
Property, plant and equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 140 | $ 130 | $ 139 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 1,200 | $ 1,102 |
Current portion of operating lease liabilities | 321 | 263 |
Long-term portion of operating lease liabilities | 878 | 827 |
Total lease liabilities | $ 1,199 | $ 1,090 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Leases [Abstract] | |||
Operating lease costs | $ 349 | $ 318 | $ 313 |
Variable lease cost | 72 | 62 | 59 |
Short-term lease costs | 14 | 1 | 10 |
Total lease costs | $ 435 | $ 381 | $ 382 |
Leases - Lease Term and Weighte
Leases - Lease Term and Weighted Average Discount Rate (Details) | Jul. 31, 2022 | Jul. 31, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease term (years) | 5 years 1 month 6 days | 5 years 1 month 6 days |
Weighted average discount rate (percent) | 3.30% | 3.60% |
Leases - Maturity Payments (Det
Leases - Maturity Payments (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 330 | |
2024 | 297 | |
2025 | 234 | |
2026 | 166 | |
2027 | 108 | |
Thereafter | 182 | |
Total undiscounted lease payments | 1,317 | |
Less: imputed interest | (118) | |
Total lease liabilities | $ 1,199 | $ 1,090 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Leases [Abstract] | |||
Cash paid for operating leases (operating cash flows) | $ 337 | $ 321 | $ 310 |
Lease assets obtained in exchange for new operating lease liabilities (non-cash) | $ 362 | $ 158 | $ 115 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | Jul. 31, 2022 USD ($) |
Leases [Abstract] | |
Liabilities for leases that have not yet commenced | $ 238 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Goodwill - Goodwill Rollforward
Goodwill - Goodwill Rollforward (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 1,828 | $ 1,737 |
Acquisitions | 224 | 80 |
Effect of currency translation adjustment | (4) | 11 |
Ending balance | 2,048 | 1,828 |
Cumulative goodwill impairment as of July 31, 2022 | 119 | |
United States | ||
Goodwill [Roll Forward] | ||
Beginning balance | 1,670 | 1,590 |
Acquisitions | 224 | 80 |
Effect of currency translation adjustment | 0 | 0 |
Ending balance | 1,894 | 1,670 |
Cumulative goodwill impairment as of July 31, 2022 | 108 | |
Canada | ||
Goodwill [Roll Forward] | ||
Beginning balance | 158 | 147 |
Acquisitions | 0 | 0 |
Effect of currency translation adjustment | (4) | 11 |
Ending balance | 154 | $ 158 |
Cumulative goodwill impairment as of July 31, 2022 | $ 11 |
Other intangible assets - Sched
Other intangible assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,972 | $ 1,579 |
Accumulated Amortization | $ (1,190) | (1,033) |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life (years) | 4 years | |
Gross Carrying Amount | $ 370 | 305 |
Accumulated Amortization | $ (198) | (156) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life (years) | 8 years | |
Gross Carrying Amount | $ 1,138 | 857 |
Accumulated Amortization | $ (662) | (592) |
Trade names and brands | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life (years) | 5 years | |
Gross Carrying Amount | $ 258 | 230 |
Accumulated Amortization | $ (171) | (141) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life (years) | 4 years | |
Gross Carrying Amount | $ 206 | 187 |
Accumulated Amortization | $ (159) | $ (144) |
Other intangible assets - Narra
Other intangible assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 161 | $ 168 | $ 143 |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total depreciation and amortization | ||
Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment charges | $ 15 |
Other intangible assets - Futur
Other intangible assets - Future Amortization (Details) $ in Millions | Jul. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 171 |
2024 | 155 |
2025 | 143 |
2026 | 106 |
2027 | 79 |
Thereafter | 128 |
Total | $ 782 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Debt Instrument [Line Items] | ||
Subtotal | $ 3,960 | $ 2,505 |
Less: current maturities of debt | (250) | 0 |
Unamortized discounts and debt issuance costs | (24) | (16) |
Interest rate swap - fair value adjustment | (7) | 23 |
Long-term debt | 3,679 | 2,512 |
Corporate | Receivable Securitization Facility | ||
Debt Instrument [Line Items] | ||
Subtotal | $ 455 | 0 |
Private Placement Notes: | 3.43% due September 2022 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.43% | |
Subtotal | $ 250 | 250 |
Private Placement Notes: | 3.30% due November 2023 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.30% | |
Subtotal | $ 55 | 55 |
Private Placement Notes: | 3.44% due November 2024 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.44% | |
Subtotal | $ 150 | 150 |
Private Placement Notes: | 3.73% due September 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.73% | |
Subtotal | $ 400 | 400 |
Private Placement Notes: | 3.51% due November 2026 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.51% | |
Subtotal | $ 150 | 150 |
Private Placement Notes: | 3.83% due September 2027 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.83% | |
Subtotal | $ 150 | 150 |
Unsecured Senior Notes: | 4.50% due October 2028 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.50% | |
Subtotal | $ 750 | 750 |
Unsecured Senior Notes: | 3.25% due June 2030 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.25% | |
Subtotal | $ 600 | 600 |
Unsecured Senior Notes: | 4.25% due April 2027 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.25% | |
Subtotal | $ 300 | 0 |
Unsecured Senior Notes: | 4.65% due April 2032 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.65% | |
Subtotal | $ 700 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 12 Months Ended | ||||||
Mar. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | Mar. 10, 2021 | Dec. 31, 2018 | Nov. 30, 2017 | Jun. 30, 2015 | |
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||||
Total long-term debt | $ 3,960,000,000 | ||||||
Private Placement Notes: | |||||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||||
Debt instrument, face amount | $ 355,000,000 | $ 800,000,000 | |||||
Percentage of principal amount redeemed (in percent) | 100% | ||||||
Total long-term debt | $ 1,153,000,000 | $ 1,152,000,000 | |||||
Variable Rate Notes | |||||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||||
Debt instrument, face amount | $ 95,000,000 | ||||||
Unsecured Senior Notes: | |||||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||||
Debt instrument, face amount | $ 2,350,000,000 | ||||||
Redemption price (percentage) | 100% | ||||||
Total long-term debt | $ 2,328,000,000 | 1,337,000,000 | |||||
Line of Credit | Revolving Credit Facility | |||||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||||
Line of credit facility | $ 1,100,000,000 | ||||||
Line of credit, accordion feature, increase limit | $ 250,000,000 | ||||||
Borrowings outstanding | 0 | 0 | |||||
Line of Credit | Revolving Credit Facility | Bilateral Loan Agreement | |||||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||||
Line of credit facility | $ 500,000,000 | ||||||
Debt instrument, term, option to extend (in years) | 364 days | ||||||
Corporate | Receivable Securitization Facility | |||||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||||
Debt instrument, face amount | 800,000,000 | ||||||
Accordion feature, increase limit | 1,000,000,000 | ||||||
Total long-term debt | $ 455,000,000 | $ 0 |
Debt - Maturities (Details)
Debt - Maturities (Details) $ in Millions | Jul. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 250 |
2024 | 510 |
2025 | 150 |
2026 | 400 |
2027 | 450 |
Thereafter | 2,200 |
Total long-term debt | $ 3,960 |
Assets and liabilities at fai_3
Assets and liabilities at fair value - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Current: | ||
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid and other current assets | |
Non-current: | ||
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current assets | |
Current: | ||
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current | |
Non-current: | ||
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | |
Level 2 | ||
Current: | ||
Derivative financial assets | $ 2 | $ 5 |
Non-current: | ||
Derivative financial assets | 0 | 16 |
Current: | ||
Derivative financial liabilities | 3 | 0 |
Non-current: | ||
Derivative financial liabilities | 3 | 0 |
Level 3 | ||
Non-current: | ||
Investments in equity investments | $ 26 | $ 18 |
Assets and liabilities at fai_4
Assets and liabilities at fair value - Narrative (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Hedged liability, fair value hedge | $ 355 | $ 355 |
Carrying value of long-term debt | 3,960 | |
Unsecured Senior Notes: | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long-term debt | 2,350 | 1,538 |
Carrying value of long-term debt | 2,328 | 1,337 |
Private Placement Notes: | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long-term debt | 1,142 | 1,273 |
Carrying value of long-term debt | $ 1,153 | $ 1,152 |
Accumulated other comprehensi_3
Accumulated other comprehensive (loss) income - Change in AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 5,003 | $ 4,609 | $ 4,407 |
Other comprehensive income before reclassifications | (42) | 101 | (178) |
Amounts reclassified from accumulated other comprehensive income | 8 | 148 | 14 |
Total other comprehensive (loss) income, net of tax | (34) | 249 | (164) |
Ending balance | 4,665 | 5,003 | 4,609 |
AOCI Attributable to Parent | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (796) | (1,045) | (881) |
Total other comprehensive (loss) income, net of tax | (34) | 249 | (164) |
Ending balance | (830) | (796) | (1,045) |
Foreign currency translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (396) | (566) | (599) |
Other comprehensive income before reclassifications | (24) | 35 | 24 |
Amounts reclassified from accumulated other comprehensive income | 0 | 135 | 9 |
Total other comprehensive (loss) income, net of tax | (24) | 170 | 33 |
Ending balance | (420) | (396) | (566) |
Pensions | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (400) | (479) | (282) |
Other comprehensive income before reclassifications | (18) | 66 | (202) |
Amounts reclassified from accumulated other comprehensive income | 8 | 13 | 5 |
Total other comprehensive (loss) income, net of tax | (10) | 79 | (197) |
Ending balance | $ (410) | $ (400) | $ (479) |
Accumulated other comprehensi_4
Accumulated other comprehensive (loss) income - Reclassification Out of AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax benefit | $ 609 | $ 232 | $ 299 |
Net income | (2,122) | (1,472) | (961) |
Reclassification out of Accumulated Other Comprehensive Income | Employee Benefit Trust | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Amortization of actuarial losses | 10 | 18 | 7 |
Tax benefit | (2) | (5) | (2) |
Net income | $ 8 | $ 13 | $ 5 |
Retirement benefit obligation_2
Retirement benefit obligations - Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Change in net benefit obligations: | |||
Beginning balance | $ 2,208 | $ 2,283 | |
Service cost | 0 | 3 | $ 3 |
Interest cost | 41 | 32 | 36 |
Actuarial (gain) loss | (554) | (171) | |
Benefits paid | (71) | (77) | |
Exchange rate adjustment | (222) | 138 | |
Ending balance | 1,402 | 2,208 | 2,283 |
Change in assets at fair value: | |||
Beginning balance | 2,304 | 2,220 | |
Actual return on plan assets | (506) | (33) | |
Company contributions | 15 | 56 | |
Amortization of net actuarial losses | (71) | (77) | |
Exchange rate adjustment | (234) | 138 | |
Ending balance at fair value | 1,508 | 2,304 | $ 2,220 |
Funded status of plans | $ 106 | $ 96 |
Retirement benefit obligation_3
Retirement benefit obligations - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Discount rate, benefit obligations (percent) | 3.53% | 1.78% | 1.56% | |
Expected return on plan assets (percent) | 2.12% | 2.60% | 3.15% | |
Percentage of plan assets | 100% | 100% | ||
Total expense defined contribution plan | $ 87 | $ 74 | $ 68 | |
Deferred compensation plan assets | 295 | 332 | ||
Deferred compensation liability, classified, noncurrent | 297 | 328 | ||
Deferred compensation liability, current | $ 29 | $ 31 | ||
Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected employer contributions | $ 15 | |||
Insurance policies | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of plan assets | 29% | 27% | ||
Insurance policies | United Kingdom | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of plan assets | 30% |
Retirement benefit obligation_4
Retirement benefit obligations - Non-Current Asset and Liability in Balance Sheet (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Retirement Benefits [Abstract] | ||
Non-current asset | $ 114 | $ 108 |
Non-current liability | $ (8) | $ (12) |
Retirement benefit obligation_5
Retirement benefit obligations - AOCI (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Retirement Benefits [Abstract] | ||
Net actuarial loss | $ 537 | $ 538 |
Income tax impact | (127) | (138) |
Accumulated other comprehensive loss | $ 410 | $ 400 |
Retirement benefit obligation_6
Retirement benefit obligations - OCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Net actuarial (gain) loss | $ (3) | $ (78) | $ 249 |
Amortization of net actuarial loss | (10) | (18) | (7) |
Impact of exchange rates | 12 | 0 | 0 |
Income tax impact | 11 | 17 | (45) |
Other comprehensive loss (income) | $ 10 | $ (79) | $ 197 |
Retirement benefit obligation_7
Retirement benefit obligations - Net Periodic Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Selling, general and administrative expenses | |||
Service cost | $ 0 | $ 3 | $ 3 |
Other expense (income), net | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other (expense) income, net | ||
Amortization of net actuarial losses | $ 10 | 18 | 7 |
Interest cost | 41 | 32 | 36 |
Expected return on plan assets | (45) | (60) | (53) |
Net periodic benefit (income) cost | $ 6 | $ (7) | $ (7) |
Weighted-average assumptions: | |||
Discount rate, net periodic benefit cost (percent) | 1.78% | 1.56% | 2.21% |
Discount rate, benefit obligations (percent) | 3.53% | 1.78% | 1.56% |
Expected return on plan assets (percent) | 2.12% | 2.60% | 3.15% |
Salary growth rate (percent) | 2.35% | 2.13% | 2.08% |
Retirement benefit obligation_8
Retirement benefit obligations - Asset Allocation (Details) | Jul. 31, 2022 | Jul. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 100% | 100% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 2% | 2% |
Fixed income securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 67% | 70% |
Cash, cash equivalents and other short-term investments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 2% | 1% |
Guaranteed insurance policies | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 29% | 27% |
Retirement benefit obligation_9
Retirement benefit obligations - Fair Value of Plan Assets UK and Canada (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | $ 1,508 | $ 2,304 | $ 2,220 |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 96 | 118 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 842 | 1,400 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 570 | 786 | $ 707 |
Equity securities | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 35 | 48 | |
Equity securities | Level 1 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 35 | 48 | |
Equity securities | Level 2 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Equity securities | Level 3 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Corporate | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 639 | 889 | |
Corporate | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 7 | 13 | |
Corporate | Level 1 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 8 | 11 | |
Corporate | Level 1 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Corporate | Level 2 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 492 | 716 | |
Corporate | Level 2 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 7 | 13 | |
Corporate | Level 3 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 139 | 162 | |
Corporate | Level 3 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Asset backed | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 80 | 173 | |
Asset backed | Level 1 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 16 | 27 | |
Asset backed | Level 2 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 58 | 139 | |
Asset backed | Level 3 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 6 | 7 | |
Government | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 246 | 492 | |
Government | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 32 | 40 | |
Government | Level 1 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Government | Level 1 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Government | Level 2 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 239 | 477 | |
Government | Level 2 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 32 | 40 | |
Government | Level 3 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 7 | 15 | |
Government | Level 3 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Cash and cash equivalents | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 25 | 19 | |
Cash and cash equivalents | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 1 | 1 | |
Cash and cash equivalents | Level 1 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 22 | 15 | |
Cash and cash equivalents | Level 1 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 1 | 1 | |
Cash and cash equivalents | Level 2 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 3 | 4 | |
Cash and cash equivalents | Level 2 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Cash and cash equivalents | Level 3 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Cash and cash equivalents | Level 3 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Insurance policies | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 418 | 602 | |
Insurance policies | Level 1 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Insurance policies | Level 2 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Insurance policies | Level 3 | United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 418 | 602 | |
Other | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 25 | 27 | |
Other | Level 1 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 14 | 16 | |
Other | Level 2 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 11 | 11 | |
Other | Level 3 | Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | $ 0 | $ 0 |
Retirement benefit obligatio_10
Retirement benefit obligations - Level 3 Fair Value Inputs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Change in assets at fair value: | ||
Beginning balance | $ 2,304 | $ 2,220 |
Impact of exchange rates | (234) | 138 |
Ending balance at fair value | 1,508 | 2,304 |
Level 3 | ||
Change in assets at fair value: | ||
Beginning balance | 786 | 707 |
Realized gains | (108) | (113) |
Purchases, sales and settlements, net | (20) | 147 |
Impact of exchange rates | (88) | 45 |
Ending balance at fair value | $ 570 | $ 786 |
Retirement benefit obligatio_11
Retirement benefit obligations - Future Benefit Payment Obligations (Details) $ in Millions | Jul. 31, 2022 USD ($) |
Retirement Benefits [Abstract] | |
2023 | $ 62 |
2024 | 64 |
2025 | 65 |
2026 | 67 |
2027 | 68 |
2028-2032 | 367 |
Total | $ 693 |
Shareholders_ equity - Summary
Shareholders’ equity - Summary of Share Activity (Details) - shares | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Total shares outstanding at end of period (in shares) | 210,246,114 | 221,475,177 | 223,613,613 |
Ordinary Shares | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period (in shares) | 232,171,182 | 232,171,182 | 232,171,182 |
Change in shares issued (in shares) | 0 | 0 | 0 |
Balance at end of period (in shares) | 232,171,182 | 232,171,182 | 232,171,182 |
Treasury Shares | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period (in shares) | (9,862,816) | (7,280,222) | (2,036,945) |
Repurchases of ordinary shares (in shares) | (11,413,180) | (3,020,368) | (5,591,570) |
Treasury shares used to settle share-based compensation awards (in shares) | 197,419 | 437,774 | 348,293 |
Balance at end of period (in shares) | (21,078,577) | (9,862,816) | (7,280,222) |
Employee Benefit Trust | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period (in shares) | (833,189) | (1,277,347) | (1,563,778) |
New shares purchased (in shares) | (600,000) | 0 | (307,345) |
Employee Benefit Trust shares used to settle share-based compensation awards (in shares) | 586,698 | 444,158 | 593,776 |
Balance at end of period (in shares) | (846,491) | (833,189) | (1,277,347) |
Shareholders_ equity - Narrativ
Shareholders’ equity - Narrative (Details) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2021 USD ($) | Jul. 31, 2022 USD ($) trust | Jul. 31, 2021 USD ($) | Jul. 31, 2020 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | |
Class of Stock [Line Items] | ||||||
Number of employee benefit trusts | trust | 2 | |||||
Market value of shares held in trusts | $ 107 | $ 117 | ||||
Authorized stock to repurchased | $ 1,000 | $ 2,000 | ||||
Increase to share buy back program | $ 1,000 | |||||
Period for repurchase | 12 months | |||||
Purchase of treasury shares | (1,545) | $ (400) | $ (451) | |||
Share repurchase liability | $ 324 | |||||
Subsequent Event | Forecast | ||||||
Class of Stock [Line Items] | ||||||
Authorized stock to repurchased | $ 1,000 | |||||
Increase to share buy back program | $ 500 |
Share-based compensation - Narr
Share-based compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share based compensation, percentage of outstanding stock maximum (in percent) | 10% | ||
Share based compensation, rolling offering period (in years) | 10 years | ||
Share based compensation, percentage of outstanding treasury stock maximum (in percent) | 5% | ||
Vesting date fair value of awards | $ 94 | $ 60 | $ 61 |
Vested, Weighted Average grant date fair value (in usd per share) | $ 65.58 | ||
Share based payment expense | $ 57 | 77 | 29 |
Share based payment, tax benefit | 20 | $ 20 | $ 12 |
Share based payment, cost not yet recognized | $ 62 | ||
Share based payment, cost not yet recognized, period for recognition (in years) | 1 year 8 months 12 days | ||
Ferguson Group Employee Share Purchase Plan 2021 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares available for grant under ESPP (in shares) | 20,000,000 | ||
Time Vested, Performance Vested, and Long Term Incentive Awards | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vested, Weighted Average grant date fair value (in usd per share) | $ 134.88 | $ 98.53 | $ 75.48 |
Employee Stock | Ferguson Group Employee Share Purchase Plan 2021 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares available for grant under ESPP (in shares) | 19,800,000 | ||
Share based compensation, purchase price of common stock (in percent) | 85% | ||
Share based compensation, shares purchased (in shares) | 122,218 | ||
Share based compensation, per share weighted average price of shares purchased (in usd per share) | $ 106.50 | ||
Employee Stock | Ferguson Group Ordinary Share Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share based compensation, award vesting period (in years) | 3 years | ||
Employee Stock | Ferguson Group Performance Share Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share based compensation, award vesting period (in years) | 3 years | ||
Employee Stock | Ferguson Group Long-Term Incentive Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share based compensation, award vesting period (in years) | 3 years |
Share-based compensation - Summ
Share-based compensation - Summary of Awards (Details) | 12 Months Ended |
Jul. 31, 2022 $ / shares shares | |
Number of Shares | |
Beginning Balance Outstanding (in shares) | shares | 1,824,615 |
Vested (in shares) | shares | (652,202) |
Forfeited (in shares) | shares | (85,037) |
Ending Balance Outstanding (in shares) | shares | 1,576,554 |
Weighted Average grant date fair value | |
Outstanding, Weighted Average grant date fair value, Beginning Balance | $ / shares | $ 78.58 |
Vested, Weighted Average grant date fair value (in usd per share) | $ / shares | 65.58 |
Forfeited, Weighted Average grant date fair value (in usd per share) | $ / shares | 97.66 |
Outstanding, Weighted Average grant date fair value, Ending Balance | $ / shares | $ 100.03 |
Share-Based Payment Arrangement | |
Number of Shares | |
Share adjustments based on performance (in shares) | shares | 205,874 |
Weighted Average grant date fair value | |
Share adjustments based on performance, Weighted Average grant date fair value (in usd per share) | $ / shares | $ 132.43 |
Time vested grants | |
Number of Shares | |
Grants (in shares) | shares | 78,816 |
Weighted Average grant date fair value | |
Granted, Weighted Average grant date fair value (in usd per share) | $ / shares | $ 134.29 |
Performance vested grants | |
Number of Shares | |
Grants (in shares) | shares | 184,404 |
Weighted Average grant date fair value | |
Granted, Weighted Average grant date fair value (in usd per share) | $ / shares | $ 134.29 |
Long-term incentive plan grants | |
Number of Shares | |
Grants (in shares) | shares | 20,084 |
Weighted Average grant date fair value | |
Granted, Weighted Average grant date fair value (in usd per share) | $ / shares | $ 142.56 |
Acquisitions - Businesses Acqui
Acquisitions - Businesses Acquired (Details) | Jul. 31, 2022 | Jun. 30, 2022 | May 31, 2022 | Apr. 30, 2022 | Mar. 31, 2022 | Feb. 28, 2022 | Jan. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | Oct. 31, 2021 | Sep. 30, 2021 |
Meyer Electric Co. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Sunstate Meter & Supply, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Safe Step Walk-In Tub Company, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Royal Pacific Limited | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Hot Water Products, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Plumbers Supply Company of St. Louis | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Adirondack Piping Solutions, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
A.P. Supply Co. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Lighting and Appliance Incorporated | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Founders Kitchen and Bath, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Canadian Safe-Step Tubs, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Safe-Step Tubs Northwest Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Aaron & Company, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Triton Environmental, LLC | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
D2 Land & Water Resource, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Minka Lighting, LLC | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% | ||||||||||
Rybak Engineering, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired % | 100% |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets and Liabilities Acquired (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Business Acquisition [Line Items] | ||
Right of use assets | $ 65 | |
Property, plant and equipment | 11 | |
Inventories | 139 | |
Trade and other receivables | 91 | |
Cash, cash equivalents and bank overdrafts | 18 | |
Lease liabilities | (65) | |
Trade and other payables | (68) | |
Deferred tax | (17) | |
Provisions | (1) | |
Total | 499 | |
Goodwill | 224 | $ 80 |
Total consideration | 723 | |
Cash | 668 | $ 299 |
Deferred consideration | 55 | |
Trade names and brands | ||
Business Acquisition [Line Items] | ||
Intangible assets: | 27 | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets: | 282 | |
Other | ||
Business Acquisition [Line Items] | ||
Intangible assets: | $ 17 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue since acquisition date | $ 227 | |
Loss since acquisition date | (8) | |
Net sales since first day of financial period | $ 29,105 | $ 23,510 |
Acquisitions - Net Cash Outflow
Acquisitions - Net Cash Outflow (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Business Combination and Asset Acquisition [Abstract] | |||
Purchase consideration | $ 668 | $ 299 | |
Cash, cash equivalents and bank overdrafts acquired | (18) | (13) | |
Cash consideration paid, net of cash acquired | 650 | 286 | $ 271 |
Deferred and contingent consideration paid for prior years’ acquisitions | 22 | 49 | |
Net cash outflow in respect of the purchase of businesses | $ 672 | $ 335 |
Discontinued operations and d_3
Discontinued operations and disposals - Schedule of Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Income (loss) from discontinued operations (net of tax) | $ 23 | $ (158) | $ (12) |
Discontinued operations, Diluted (in usd per share) | $ 0.10 | $ (0.70) | $ (0.05) |
Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net sales | $ 0 | $ 1,138 | $ 1,879 |
Cost of sales | 0 | (879) | (1,440) |
Gross profit | 0 | 259 | 439 |
Selling, general and administrative expenses | 0 | (194) | (417) |
Depreciation and amortization | 0 | (11) | (43) |
Gain (loss) on disposal of business, net | 23 | (200) | 0 |
Income (loss) before income tax | 23 | (146) | (21) |
Provision for income taxes | 0 | (12) | 9 |
Income (loss) from discontinued operations (net of tax) | $ 23 | $ (158) | $ (12) |
Basic earnings per share (in usd per share) | $ 0.11 | $ (0.70) | $ (0.05) |
Discontinued operations, Diluted (in usd per share) | $ 0.10 | $ (0.70) | $ (0.05) |
Discontinued operations and d_4
Discontinued operations and disposals - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net cash provided by (used in) investing activities of discontinued operations | $ 24 | $ 390 | $ (57) |
Nordic Operations | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net cash provided by (used in) investing activities of discontinued operations | $ 24 | ||
Wolseley UK Limited | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain (loss) on disposal of business | (449) | ||
Gain from reclassification adjustment | 235 | ||
Gain on disposal of assets | $ 14 |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Non-Executive Directors | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | $ 22 | $ 24 | $ 18 |