UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019March 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     

Commission File Number: 001-14989
WESCO International, Inc.
(Exact name of registrant as specified in its charter)
Delaware25-1723342
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Delaware25-1723342
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
225 West Station Square Drive
Suite 700
15219
Pittsburgh,Pennsylvania(Zip Code)
(Address of principal executive offices)
(412) (412) 454-2200
(Registrant's telephone number, including area code)
Not applicable.
(Former name, former address and former fiscal year, if changed since last report)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of ClassTrading Symbol(s)Name of Exchange on which registered
Common Stock, par value $.01 per shareWCCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.     Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Large accelerated filerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of August 1, 2019, 42,478,200April 30, 2020, 41,873,053 shares of common stock, $0.01 par value, of the registrant were outstanding.



WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


QUARTERLY REPORT ON FORM 10-Q

Table of Contents
Page
PART I—FINANCIAL INFORMATION
Page
PART I—FINANCIAL INFORMATION
PART II—OTHER INFORMATION


1


WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
The interim financial information required by this item is set forth in the unaudited Condensed Consolidated Financial Statements and Notes thereto in this Quarterly Report on Form 10-Q, as follows:
Page
Page

2


WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except share data)
(unaudited)
As ofAs of
AssetsJune 30,
2019
 December 31,
2018
AssetsMarch 31,
2020
December 31,
2019
Current assets:   Current assets:  
Cash and cash equivalents$87,218
 $96,343
Cash and cash equivalents$342,560  $150,902  
Trade accounts receivable, net of allowance for doubtful accounts of $25,821 and $24,468 in 2019 and 2018, respectively1,355,541
 1,166,607
Trade accounts receivable, net of allowance for doubtful accounts of $25,260 and $25,443 in 2020 and 2019, respectivelyTrade accounts receivable, net of allowance for doubtful accounts of $25,260 and $25,443 in 2020 and 2019, respectively1,214,331  1,187,359  
Other accounts receivable65,694
 96,984
Other accounts receivable77,691  98,029  
Inventories1,004,127
 948,726
Inventories950,521  1,011,674  
Prepaid expenses and other current assets72,284
 76,980
Prepaid expenses and other current assets (Note 4)Prepaid expenses and other current assets (Note 4)192,375  92,447  
Total current assets2,584,864
 2,385,640
Total current assets2,777,478  2,540,411  
Property, buildings and equipment, net of accumulated depreciation of $293,076 and $291,811 in 2019 and 2018, respectively172,359
 160,878
Operating lease assets (Notes 2 and 4)233,403
 
Intangible assets, net of accumulated amortization of $271,598 and $249,539 in 2019
and 2018, respectively
304,392
 316,016
Property, buildings and equipment, net of accumulated depreciation of $269,582 and $268,415 in 2020 and 2019, respectivelyProperty, buildings and equipment, net of accumulated depreciation of $269,582 and $268,415 in 2020 and 2019, respectively183,997  181,448  
Operating lease assetsOperating lease assets271,602  235,834  
Intangible assets, net of accumulated amortization of $278,711 and $280,442 in 2020
and 2019, respectively
Intangible assets, net of accumulated amortization of $278,711 and $280,442 in 2020
and 2019, respectively
267,628  287,275  
Goodwill1,752,800
 1,722,603
Goodwill1,717,963  1,759,040  
Other assets20,118
 19,899
Other assets12,288  13,627  
Total assets$5,067,936
 $4,605,036
Total assets$5,230,956  $5,017,635  
Liabilities and Stockholders’ Equity   Liabilities and Stockholders’ Equity      
Current liabilities:   Current liabilities:      
Accounts payable$868,605
 $794,348
Accounts payable$804,330  $830,478  
Accrued payroll and benefit costs43,409
 88,105
Accrued payroll and benefit costs28,940  49,508  
Short-term debt27,217
 30,785
Short-term debt24,097  26,255  
Current portion of long-term debt, net of debt discount and debt issuance costs of $488 in 2018396
 25,429
Current portion of long-term debtCurrent portion of long-term debt379  430  
Bank overdrafts32,493
 17,818
Bank overdrafts13,951  18,021  
Other current liabilities (Note 4)152,712
 105,461
Other current liabilitiesOther current liabilities168,808  159,367  
Total current liabilities1,124,832
 1,061,946
Total current liabilities1,040,505  1,084,059  
Long-term debt, net of debt discount and debt issuance costs of $7,773 and $9,243 in 2019 and 2018, respectively1,399,486
 1,167,311
Operating lease liabilities (Notes 2 and 4)177,907
 
Long-term debt, net of debt issuance costs of $8,211 and $8,876
in 2020 and 2019, respectively
Long-term debt, net of debt issuance costs of $8,211 and $8,876
in 2020 and 2019, respectively
1,542,602  1,257,067  
Operating lease liabilitiesOperating lease liabilities213,172  179,830  
Deferred income taxes147,306
 143,967
Deferred income taxes146,977  146,617  
Other noncurrent liabilities83,582
 102,086
Other noncurrent liabilities85,574  91,391  
Total liabilities$2,933,113
 $2,475,310
Total liabilities$3,028,830  $2,758,964  
Commitments and contingencies (Note 11)



Commitments and contingencies (Note 10)Commitments and contingencies (Note 10)
Stockholders’ equity:   Stockholders’ equity:      
Preferred stock, $.01 par value; 20,000,000 shares authorized, no shares issued or outstanding
 
Common stock, $.01 par value; 210,000,000 shares authorized, 59,292,704 and 59,157,696 shares issued and 42,477,792 and 45,106,085 shares outstanding in 2019 and 2018, respectively593
 592
Class B nonvoting convertible common stock, $.01 par value; 20,000,000 shares authorized, 4,339,431 issued and no shares outstanding in 2019 and 2018, respectively43
 43
Preferred stock, $.01 par value; 20,000,000 shares authorized, 0 shares issued or outstandingPreferred stock, $.01 par value; 20,000,000 shares authorized, 0 shares issued or outstanding—  —  
Common stock, $.01 par value; 210,000,000 shares authorized, 59,381,958 and 59,308,018 shares issued and 41,873,053 and 41,797,093 shares outstanding in 2020 and 2019, respectivelyCommon stock, $.01 par value; 210,000,000 shares authorized, 59,381,958 and 59,308,018 shares issued and 41,873,053 and 41,797,093 shares outstanding in 2020 and 2019, respectively594  593  
Class B nonvoting convertible common stock, $.01 par value; 20,000,000 shares authorized, 4,339,431 issued and no shares outstanding in 2020 and 2019, respectivelyClass B nonvoting convertible common stock, $.01 par value; 20,000,000 shares authorized, 4,339,431 issued and no shares outstanding in 2020 and 2019, respectively43  43  
Additional capital998,218
 993,666
Additional capital1,041,637  1,039,347  
Retained earnings2,412,768
 2,307,462
Retained earnings2,565,597  2,530,429  
Treasury stock, at cost; 21,154,343 and 18,391,042 shares in 2019 and 2018, respectively(904,873) (758,018)
Treasury stock, at cost; 21,848,336 and 21,850,356 shares in 2020 and 2019, respectivelyTreasury stock, at cost; 21,848,336 and 21,850,356 shares in 2020 and 2019, respectively(937,078) (937,157) 
Accumulated other comprehensive loss(365,674) (408,435)Accumulated other comprehensive loss(461,623) (367,772) 
Total WESCO International, Inc. stockholders' equity2,141,075
 2,135,310
Total WESCO International, Inc. stockholders' equity2,209,170  2,265,483  
Noncontrolling interests(6,252) (5,584)Noncontrolling interests(7,044) (6,812) 
Total stockholders’ equity2,134,823
 2,129,726
Total stockholders’ equity2,202,126  2,258,671  
Total liabilities and stockholders’ equity$5,067,936
 $4,605,036
Total liabilities and stockholders’ equity$5,230,956  $5,017,635  
The accompanying notes are an integral part of the condensed consolidated financial statements.
3


WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
(In thousands of dollars, except per share data)
(unaudited)
 Three Months Ended
March 31
20202019
Net sales (Note 3)1,968,647  1,961,267  
Cost of goods sold (excluding depreciation and amortization)1,592,249  1,578,771  
Selling, general and administrative expenses299,392  296,528  
Depreciation and amortization  16,093  15,242  
Income from operations60,913  70,726  
Net interest and other16,472  17,120  
Income before income taxes44,441  53,606  
Provision for income taxes10,266  11,656  
Net income34,175  41,950  
Less: Net loss attributable to noncontrolling interests(232) (419) 
Net income attributable to WESCO International, Inc.$34,407  $42,369  
Other comprehensive income (loss):
Foreign currency translation adjustments(93,851) 22,517  
Comprehensive (loss) income attributable to WESCO International, Inc.$(59,444) $64,886  
Earnings per share attributable to WESCO International, Inc.
Basic$0.82  $0.94  
Diluted$0.82  $0.93  
 Three Months Ended Six Months Ended
 June 30 June 30
 2019 2018 2019 2018
Net sales (Note 3)$2,150,088
 $2,103,994
 $4,111,355
 $4,097,909
Cost of goods sold (excluding depreciation and       
amortization)1,741,114
 1,704,100
 3,319,886
 3,318,066
Selling, general and administrative expenses295,842
 292,888
 592,370
 583,717
Depreciation and amortization15,182
 15,823
 30,424
 31,703
Income from operations97,950
 91,183
 168,675
 164,423
Net interest and other17,307
 17,741
 34,427
 37,524
Income before income taxes80,643
 73,442
 134,248
 126,899
Provision for income taxes17,428
 15,769
 29,084
 26,255
Net income63,215
 57,673
 105,164
 100,644
Less: Net loss attributable to noncontrolling interests(249) (267) (668) (1,717)
Net income attributable to WESCO International, Inc.$63,464
 $57,940
 $105,832
 $102,361
Other comprehensive income (loss):       
Foreign currency translation adjustments20,244
 (28,715) 42,763
 (57,515)
Comprehensive income attributable to WESCO International, Inc.$83,708
 $29,225
 $148,595
 $44,846
        
Earnings per share attributable to WESCO International, Inc.       
Basic$1.46
 $1.23
 $2.39
 $2.18
Diluted$1.45
 $1.22
 $2.37
 $2.15

The accompanying notes are an integral part of the condensed consolidated financial statements.

4


WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(unaudited)
 Six Months Ended
 June 30
 2019 2018
Operating activities:   
Net income$105,164
 $100,644
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization30,424
 31,703
  Deferred income taxes1,983
 6,100
Other operating activities, net11,961
 11,027
Changes in assets and liabilities:   
Trade accounts receivable, net(157,387) (102,567)
Other accounts receivable32,150
 38,430
Inventories(39,655) 11,407
Prepaid expenses and other assets(7,710) (12,866)
Accounts payable62,484
 26,073
Accrued payroll and benefit costs(43,739) (16,588)
Other current and noncurrent liabilities(4,450) (6,542)
Net cash (used in) provided by operating activities(8,775) 86,821
    
Investing activities:   
Capital expenditures(21,402) (16,384)
Acquisition payments(27,742) 
Other investing activities(1,155) (8,684)
Net cash used in investing activities(50,299) (25,068)
    
Financing activities:   
Proceeds from issuance of short-term debt34,866
 87,861
Repayments of short-term debt(64,166) (85,761)
Proceeds from issuance of long-term debt883,508
 794,888
Repayments of long-term debt(654,274) (848,888)
Repurchases of common stock (Note 8)(152,722) (1,891)
Increase (decrease) in bank overdrafts14,676
 (9,408)
Repayment of deferred acquisition payable(11,401) 
Other financing activities, net(472) (550)
Net cash provided by (used in) financing activities50,015
 (63,749)
    
Effect of exchange rate changes on cash and cash equivalents(66) (5,017)
    
Net change in cash and cash equivalents(9,125) (7,013)
Cash and cash equivalents at the beginning of period96,343
 117,953
Cash and cash equivalents at the end of period$87,218
 $110,940
Supplemental disclosures:   
Cash paid for interest$32,787
 $32,380
Cash paid for income taxes35,329
 33,792
The accompanying notes are an integral part of the condensed consolidated financial statements.

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands of dollars)
 Three Months Ended
 March 31
20202019
Operating activities:  
Net income$34,175  $41,950  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization16,093  15,242  
  Deferred income taxes1,979  893  
Other operating activities, net1,760  5,961  
Changes in assets and liabilities:
Trade accounts receivable, net(53,944) (76,696) 
Other accounts receivable19,236  22,425  
Inventories37,807  (40,768) 
Prepaid expenses and other assets(3,125) 15,074  
Accounts payable(10,858) 68,085  
Accrued payroll and benefit costs(18,973) (27,851) 
Other current and noncurrent liabilities7,378  4,554  
Net cash provided by operating activities31,528  28,869  
Investing activities:
Capital expenditures(15,762) (10,828) 
Acquisition payments (Note 4)(100,000) (27,742) 
Other investing activities5,497  53  
Net cash used in investing activities(110,265) (38,517) 
Financing activities:
Repayments of short-term debt, net(383) (28,414) 
Proceeds from issuance of long-term debt585,511  423,666  
Repayments of long-term debt(300,511) (377,825) 
Repurchases of common stock (Note 7)(1,566) (2,572) 
Other financing activities, net(4,360) 4,391  
Net cash provided by financing activities278,691  19,246  
Effect of exchange rate changes on cash and cash equivalents(8,296) 159  
Net change in cash and cash equivalents191,658  9,757  
Cash and cash equivalents at the beginning of period150,902  96,343  
Cash and cash equivalents at the end of period$342,560  $106,100  
Supplemental disclosures:
Cash paid for interest$4,029  $4,583  
Cash paid for income taxes$6,245  $5,018  
Right-of-use assets obtained in exchange for new operating lease liabilities$57,185  $8,092  
(unaudited)
                    Accumulated Other
      Class B   Retained       Comprehensive
  Common Stock Common Stock Additional Earnings Treasury Stock Noncontrolling Income
  Amount Shares Amount Shares Capital (Deficit) Amount Shares Interests (Loss)
Balance, December 31, 2018 $592
 59,157,696
 $43
 4,339,431
 $993,666
 $2,307,462
 $(758,018) (18,391,042) $(5,584) $(408,435)
Exercise of stock-based awards 1
 156,760
     (90)   (54) (184)    
Stock-based compensation expense         4,665
          
Repurchases of common stock         19,144
   (19,144) (365,272)    
Tax withholding related to vesting of restricted stock units and retirement of common stock 
 (42,564)     (1,822) (531)        
Noncontrolling interests                 (419)  
Net income attributable to WESCO           42,369
        
Translation adjustments                   22,517
Balance, March 31, 2019 $593
 59,271,892
 $43
 4,339,431
 $1,015,563
 $2,349,300
 $(777,216) (18,756,498) $(6,003) $(385,918)
Exercise of stock-based awards 
 20,831
     6
   (157) (3,029)    
Stock-based compensation expense         5,150
          
Repurchases of common stock         (22,500)   (127,500) (2,394,816)    
Tax withholding related to vesting of restricted stock units and retirement of common stock 
 (19)     (1) 4
        
Noncontrolling interests                 (249)  
Net income attributable to WESCO           63,464
        
Translation adjustments                   20,244
Balance, June 30, 2019 $593
 59,292,704
 $43
 4,339,431
 $998,218
 $2,412,768
 $(904,873) (21,154,343) $(6,252) $(365,674)

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands of dollars)
(unaudited)
Accumulated Other
                   Accumulated Other   Class B Retained  Comprehensive
     Class B   Retained       Comprehensive Common StockCommon StockAdditionalEarningsTreasury StockNoncontrollingIncome
 Common Stock Common Stock Additional Earnings Treasury Stock Noncontrolling IncomeAmountSharesAmountSharesCapital(Deficit)AmountSharesInterests(Loss)
 Amount Shares Amount Shares Capital (Deficit) Amount Shares Interests (Loss)
Balance, December 31, 2017 $591
 59,045,762
 $43
 4,339,431
 $999,156
 $2,079,697
 $(647,158) (16,375,653) $(3,596) $(312,590)
Balance, December 31, 2019Balance, December 31, 2019$593  59,308,018  $43  4,339,431  $1,039,347  $2,530,429  $(937,157) (21,850,356) $(6,812) $(367,772) 
Exercise of stock-based awards 
 88,554
     (67)   (455) (5,521)    Exercise of stock-based awards 105,620  (39) 79  2,020  
Stock-based compensation expense         3,858
          Stock-based compensation expense4,626  
Tax withholding related to vesting of restricted stock units and retirement of common stock 
 (16,614)     (1,153) 417
        Tax withholding related to vesting of restricted stock units and retirement of common stock—  (31,680) (2,297) 761  
Noncontrolling interests                 (1,450)  Noncontrolling interests(232) 
Net income attributable to WESCO           44,421
        Net income attributable to WESCO34,407  
Translation adjustments                   (28,800)Translation adjustments(93,851) 
Balance, March 31, 2018 $591
 59,117,702
 $43
 4,339,431
 $1,001,794
 $2,124,535
 $(647,613) (16,381,174) $(5,046) $(341,390)
Exercise of stock-based awards 
 26,867
     (31)   (230) (3,795)    
Stock-based compensation expense         4,102
          
Tax withholding related to vesting of restricted stock units and retirement of common stock 
 
     32
 11
        
Noncontrolling interests                 (267)  
Net income attributable to WESCO           57,940
        
Translation adjustments                   (28,715)
Balance, June 30, 2018 $591
 59,144,569
 $43
 4,339,431
 $1,005,897
 $2,182,486
 $(647,843) (16,384,969) $(5,313) $(370,105)
Balance, March 31, 2020Balance, March 31, 2020$594  59,381,958  $43  4,339,431  $1,041,637  $2,565,597  $(937,078) (21,848,336) $(7,044) $(461,623) 

Accumulated Other
   Class B Retained  Comprehensive
 Common StockCommon StockAdditionalEarningsTreasury StockNoncontrollingIncome
AmountSharesAmountSharesCapital(Deficit)AmountSharesInterests(Loss)
Balance, December 31, 2018$592  59,157,696  $43  4,339,431  $993,666  $2,307,462  $(758,018) (18,391,042) $(5,584) $(408,435) 
Exercise of stock-based awards 156,760  (90) (54) (184) 
Stock-based compensation expense4,665  
Repurchases of common stock19,144  (19,144) (365,272) 
Tax withholding related to vesting of restricted stock units and retirement of common stock—  (42,564) (1,822) (531) 
Noncontrolling interests(419) 
Net income attributable to WESCO42,369  
Translation adjustments22,517  
Balance, March 31, 2019$593  59,271,892  $43  4,339,431  $1,015,563  $2,349,300  $(777,216) (18,756,498) $(6,003) $(385,918) 
The accompanying notes are an integral part of the condensed consolidated financial statements.
6

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



1. ORGANIZATION
WESCO International, Inc. ("WESCO International") and its subsidiaries (collectively, “WESCO” or the "Company"), headquartered in Pittsburgh, Pennsylvania, is a full-line distributor of electrical, industrial and communications maintenance, repair and operating ("MRO") and original equipment manufacturer ("OEM") products, construction materials, and advanced supply chain management and logistics services used primarily in the industrial, construction, utility and commercial, institutional and government markets. WESCO serves approximately 70,000 active customers globally through approximately 500 branches primarily located in North America, with operations in 1516 additional countries and 1011 distribution centers located in the United States and Canada.
2. ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements of WESCO have been prepared in accordance with Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). The unaudited condensed consolidated financial information should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in WESCO’s 20182019 Annual Report on Form 10-K as filed with the SEC on February 27, 2019.24, 2020. The Condensed Consolidated Balance Sheet at December 31, 20182019 was derived from the audited Consolidated Financial Statements as of that date, but does not include all of the disclosures required by accounting principles generally accepted in the United States of America.
The unaudited Condensed Consolidated Balance Sheet as of June 30, 2019,March 31, 2020, the unaudited Condensed Consolidated Statements of Income and Comprehensive Income and(Loss), the unaudited Condensed Consolidated Statements of Stockholders' Equity, for the three and six months ended June 30, 2019 and 2018, and the unaudited Condensed Consolidated Statements of Cash Flows for the sixthree months ended June 30,March 31, 2020 and 2019, and 2018, respectively, in the opinion of management, have been prepared on the same basis as the audited Consolidated Financial Statements and include all adjustments necessary for the fair statement of the results of the interim periods presented herein. All adjustments reflected in the unaudited condensed consolidated financial information are of a normal recurring nature unless indicated. The results for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year.
Recently Adopted Accounting PronouncementsReclassifications
Effective January 1, 2019, WESCO adopted Accounting Standards Update (ASU) 2016-02, Leases, and all the related amendments (“Topic 842”), a comprehensive new standard that amended various aspects of existing accounting guidance for leases. The adoption of Topic 842 resulted in the recognition of right-of-use assets and lease liabilities for operating leases of approximately $240 million and $245 million, respectively, in theCondensed Consolidated Balance Sheet as of January 1, 2019, most of which relate to real estate. The adoption of Topic 842 did not have a material impact on the Consolidated Statements of Income and Comprehensive Income or Consolidated StatementsStatement of Cash Flows for the three and six months ended June 30,March 31, 2019 respectively.
The Company used the optional effective date transition method and therefore did not adjust the prior comparative periods presented herein. There was no cumulative-effect adjustmentincludes certain reclassifications to beginning retained earnings as a result of using this method. In addition, the Company elected the package of practical expedients that allowed the adoption of Topic 842 without reassessing arrangements that commenced priorpreviously reported amounts to conform to the effective date. Additional qualitative and quantitative information about the Company's leases is disclosed in Note 4.current period presentation.
Recently IssuedAdopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (FASB) issued ASUAccounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introducesintroduced new guidance for the accounting for credit losses on certain financial instruments. The amendments inCompany adopted this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. EarlyJanuary 1, 2020. The adoption is permitted. Managementof this new credit loss guidance did not have a material impact on the unaudited condensed consolidated financial statements and notes thereto presented herein, and WESCO does not expect the adoption of this accounting standardit to have a material impact on its consolidated financial statements and notes thereto.position or results of operation on an ongoing basis.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying and adding certain disclosures. The amendments inCompany adopted this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted.
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


Management does not expectin the first quarter of 2020. The adoption of this accounting standard toguidance did not have a materialan impact on itsthe unaudited condensed consolidated financial statements and notes thereto.thereto presented herein.
Recently Issued Accounting Pronouncements
In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends the disclosure requirements for all employers that sponsor defined benefit pension and other post retirement plans by removing and adding certain disclosures. The amendments in this ASU are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. Management does not expect the adoption of this accounting standard to have a material impact on its condensed consolidated financial statements and notes thereto.
7

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles of Accounting Standards Codification Topic 740, Income Taxes, and simplifies other aspects of accounting for income taxes. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. Management does not expect the adoption of this accounting standard to have a material impact on its condensed consolidated financial statements and notes thereto.
Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to WESCO’s financial position, results of operations or cash flows.
3. REVENUE
WESCO distributes products and provides services to customers globally within the following end markets: (1) industrial, (2) construction, (3) utility, and (4) commercial, institutional and government. Revenue is measured as the amount of consideration WESCO expects to receive in exchange for transferring goods or providing services.
The following tables disaggregate WESCO’s revenue by end market and geography:
Three Months Ended
 March 31
(In thousands)20202019
Industrial$702,214  $736,906  
Construction636,503  633,288  
Utility340,945  308,269  
Commercial, Institutional and Government288,985  282,804  
Total by end market$1,968,647  $1,961,267  
 Three Months Ended Six Months Ended
 June 30 June 30
(In thousands)2019 2018 2019 2018
Industrial$761,934
 $760,741
 $1,498,825
 $1,519,723
Construction704,183
 683,752
 1,337,483
 1,321,551
Utility346,941
 336,961
 655,213
 652,506
Commercial, Institutional and Government337,030
 322,540
 619,834
 604,129
Total by end market$2,150,088
 $2,103,994
 $4,111,355
 $4,097,909

Three Months Ended
 March 31
(In thousands)20202019
United States$1,478,491  $1,460,991  
Canada377,419  384,596  
Other International112,737  115,680  
Total by geography$1,968,647  $1,961,267  
 Three Months Ended Six Months Ended
 June 30 June 30
(In thousands)2019 2018 2019 2018
United States$1,616,347
 $1,563,392
 $3,077,263
 $3,046,140
Canada (1)
415,030
 405,981
 799,700
 804,689
Other International (1)
118,711
 134,621
 234,392
 247,080
Total by geography$2,150,088
 $2,103,994
 $4,111,355
 $4,097,909

(1)
The prior period has been reclassified to conform to the current period presentation.
In accordance with certain contractual arrangements, WESCO receives payment from its customers in advance and recognizes such payment as deferred revenue. Revenue for advance payment is recognized when the performance obligation has been satisfied and control has transferred to the customer, which is generally upon shipment. Deferred revenue is usually recognized within a year or less from the date of the customer’s advance payment. At June 30, 2019March 31, 2020 and December 31, 2018, $10.42019, $9.9 million and $11.8$12.3 million, respectively, of deferred revenue was recorded as a component of other current liabilities in the Condensed Consolidated Balance Sheets.
WESCO’s revenues are adjusted for variable consideration, which includes customer volume rebates, returns, and discounts. WESCO measures variable consideration by estimating expected outcomes using analysis and inputs based upon anticipated performance, historical data, as well as current and forecasted information. Measurement and recognition of variable consideration is reviewed by management on a monthly basis and revenue is adjusted accordingly. Variable consideration reduced revenue for the three months ended June 30,March 31, 2020 and 2019 and 2018 by approximately $28.5$23.3 million and $25.0$25.5 million, respectively, and by approximately $53.8 million and $49.4 million for the six months ended June 30, 2019 and 2018, respectively.
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


Shipping and handling costs are recognized in net sales when they are billed to the customer. These costs are recognized as a component of selling, general and administrative expenses when WESCO does not bill the customer. WESCO has elected to recognize shipping and handling costs as a fulfillment cost. Shipping and handling costs recorded as a component of selling, general and administrative expenses totaled $18.2 million and $18.6 million for the three months ended June 30, 2019 and 2018, respectively, and $35.2 million and $36.8 million for the six months ended June 30, 2019 and 2018, respectively.
4. LEASES
WESCO leases real estate, automobiles, trucks and other equipment. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Classification and initial measurement of the right-of-use asset and lease liability are determined at the lease commencement date. The Company elected the short-term lease measurement and recognition exemption; therefore, leases with an initial term of 12 months or less are not recorded on the balance sheet.
The Company's arrangements include certain non-lease components such as common area and other maintenance for leased real estate, as well as mileage, fuel and maintenance costs related to leased automobiles and trucks. WESCO accounts for these nonlease components separately from the associated lease components. The Company does not guarantee any residual value in its lease agreements, and there are no material restrictions or covenants imposed by lease arrangements. Real estate leases typically include one or more options to extend the lease. The Company regularly evaluates the renewal options, and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. The Company uses the interest rate implicit in its leases to discount lease payments at the lease commencement date. When the implicit rate is not readily available, the Company uses its incremental borrowing rate.
The Company's finance leases, which are recorded in the Condensed Consolidated Balance Sheet as of June 30, 2019 as a component of property, buildings and equipment, current portion of long-term debt and long-term debt, respectively, are not material to the consolidated financial statements and notes thereto. Accordingly, finance leases have not been disclosed herein.
The following table sets forth supplemental balance sheet information related to operating leases for the period presented:
8
As of
(In thousands)June 30, 2019
Operating lease assets$233,403
Current operating lease liabilities60,294
Noncurrent operating lease liabilities177,907
Total operating lease liabilities$238,201
The following table sets forth the Company's total lease cost, which is recorded as a component of selling, general and administrative expenses, for the periods presented:

 Three Months Ended Six Months Ended
 June 30 June 30
(In thousands)2019 2019
Operating lease cost$18,285
 $36,274
Short-term lease cost22
 33
Variable lease cost6,463
 11,784
Total lease cost$24,770
 $48,091

Variable lease cost consists of the non-lease components described above, as well as taxes and insurance for WESCO's leased real estate.
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


The following table sets forth supplemental cash flow information related to operating leasesgeneral and administrative expenses totaled $18.0 million and $17.0 million for the period presented:three months ended March 31, 2020 and 2019, respectively.
 Six Months Ended
 June 30
(In thousands)2019
Operating cash flows from operating leases$32,214
Right-of-use assets obtained in exchange for new operating lease liabilities26,731
As of June 30, 2019, the weighted-average remaining lease term for operating leases was 5.5 years and the weighted-average discount rate used to measure operating lease assets and liabilities was 4.6%.
The following table sets forth the maturities of the Company's operating lease liabilities and reconciles the respective undiscounted payments to the operating lease liabilities in the Condensed Consolidated Balance Sheet as of June 30, 2019:
 (In thousands)
2019$36,218
202064,614
202153,127
202239,774
202330,201
Thereafter47,550
Total undiscounted operating lease payments271,484
Less: interest(33,283)
Total operating lease liabilities$238,201

The following table sets forth the future minimum rental payments for operating leases accounted for in accordance with Accounting Standards Codification Topic 840, Leases, as of December 31, 2018:
Years ending December 31(In thousands)
2019$71,640
202059,594
202147,264
202234,490
202324,493
Thereafter40,302

5.4. ACQUISITIONS
The following table sets forth the consideration paid for acquisitions:
Three Months Ended
March 31
2019
(In thousands)
Fair value of assets acquired$34,812 
Fair value of liabilities assumed7,070 
Cash paid for acquisitions$27,742 
 Six Months Ended
 June 30
 2019
 (In thousands)
Fair value of assets acquired$36,188
Fair value of liabilities assumed8,446
Cash paid for acquisitions$27,742

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


Sylvania Lighting Services Corp.
On March 5, 2019,, WESCO Distribution, Inc. ("WESCO Distribution"), through its WESCO Services, LLC subsidiary, acquired certain assets and assumed certain liabilities of Sylvania Lighting Services Corp. ("SLS"). Headquartered in Wilmington, Massachusetts, SLS offers a full spectrum of energy-efficient lighting upgrade, retrofit, and renovation solutions with annual sales of approximately $100 million and approximately 220 employees across the U.S. and Canada. WESCO Distribution funded the purchase price paid at closing with borrowings under its accounts receivable securitization facility. The purchase price was allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date, resulting in goodwill of $5.9$11.6 million, which is deductible for tax purposes.
Anixter International Inc.
On January 10, 2020, WESCO International entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Anixter International Inc. (“Anixter”) and Warrior Merger Sub, Inc., a wholly owned subsidiary of WESCO International (“Merger Sub”). The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into Anixter (the “Merger”), with Anixter surviving the Merger and continuing as a wholly owned subsidiary of WESCO International.
At the effective time of the Merger, each outstanding share of Anixter common stock will be converted into the right to receive (i) $70.00 in cash, without interest, which amount may be increased by up to $2.82 per Anixter common share at closing, based on the volume-weighted average trading price of WESCO International common stock on the New York Stock Exchange during a specified period prior to closing, and subject to further adjustment as set forth in the Merger Agreement (the “cash consideration”), (ii) 0.2397 shares of WESCO International common stock, subject to adjustment as set forth in the Merger Agreement (the “common stock consideration”), and (iii) 0.6356 depositary shares, each share representing a 1/1,000th interest in a share of newly issued WESCO International Series A fixed-rate reset cumulative perpetual preferred stock, $25,000 stated amount per whole preferred share, subject to adjustment as set forth in the Merger Agreement (the “preferred stock consideration” and, together with the cash consideration and the common stock consideration, (the “Merger Consideration”), in each case less any applicable withholding taxes. Based on the closing price of WESCO International common stock and the liquidation preference of the WESCO International Series A preferred stock underlying the preferred stock consideration, and giving effect to the downside protection described above, the implied value of the per share Merger Consideration was:(i) $100.00, on January 10, 2020, the last full trading day before the public announcement of the merger and (ii) $94.91, on April 30, 2020, the most recent practicable date prior to the date of this filing.
Concurrently with the execution of the Merger Agreement, WESCO paid to entities affiliated with Clayton, Dubilier & Rice, LLC (“CD&R”), on behalf of Anixter, a termination fee of $100 million that was required to terminate Anixter’s then-existing merger agreement with CD&R. As of March 31, 2020, the termination fee is recorded on the balance sheet as a component of prepaid expenses and other current assets. Upon consummation of the Merger with Anixter, the $100 million termination fee will be accounted for as a portion of the Merger Consideration paid to the stockholders of Anixter.
6.
The closing of the Merger is subject to the satisfaction or waiver of customary conditions to closing, including the approval or clearance, or the expiration, termination or waiver of the waiting periods under various antitrust laws. As of the date hereof, clearance under the antitrust laws of Canada remains outstanding. Notification of the Merger was filed in Canada on February 27, 2020 and, on April 14, 2020, the Canadian Commissioner of Competition issued a Supplementary Information Request seeking additional information with respect to the Merger and the businesses of Anixter and WESCO. Notification of the
9

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)

Merger was filed in Mexico on February 10, 2020, and approval was received on April 30, 2020. Approval or clearance has previously been received under the antitrust laws of the United States, Russia and Turkey. WESCO, Anixter and Merger Sub have also filed notifications seeking approval under the antitrust laws of Chile (filed on February 20, 2020), but the receipt of approval in Chile is not a condition to the closing of the Merger. WESCO and Anixter expect to complete the Merger in the second or third calendar quarter of 2020.
5. GOODWILL
The following table sets forth the changes in the carrying value of goodwill:
Three Months Ended
March 31
(In thousands)2020
Beginning balance January 1$1,759,040 
Foreign currency exchange rate changes(46,894)
Adjustments to goodwill for acquisitions(1)
5,817 
Ending balance March 31$1,717,963 
 Six Months Ended
 June 30
(In thousands)2019
Beginning balance January 1$1,722,603
Foreign currency exchange rate changes24,251
Additions to goodwill for acquisitions5,946
Ending balance June 30$1,752,800
(1) 
Adjustments to goodwill resulted from the final allocation of the purchase price paid for SLS, as described in Note 4, to the respective assets acquired and liabilities assumed.
Certain triggering events occurred during the first quarter of 2020, including the effect of the ongoing macroeconomic disruption and uncertainty caused by a novel coronavirus disease (“COVID-19”) pandemic, as well as the decline in our share price and market capitalization, both of which could indicate that the carrying value of goodwill and indefinite-lived intangible assets may not be recoverable. Accordingly, we performed an interim test for impairment. We tested for goodwill impairment on a reporting unit level and the evaluation involved comparing the fair value of each reporting unit to its carrying value. The fair values of our reporting units were determined using a combination of a discounted cash flow analysis and market multiples. We evaluated the recoverability of indefinite-lived intangible assets using the relief-from-royalty method based on projected financial information. Goodwill and indefinite-lived trademarks totaled $1.8 billion and $1.9 billion as of March 31, 2020 and December 31, 2019, respectively.
7.There were no impairment losses identified as a result of our interim test. Two of our reporting units with goodwill of $261.3 million and $524.9 million, respectively, had estimated fair values that exceeded their respective carrying values by less than 5%. The determination of fair value of our reporting units involves significant management judgment, particularly as it relates to the underlying assumptions and factors around our expected operating margins and discount rate. In performing our quantitative assessments, we used expected operating margins supported by a combination of historical results, current forecasts, market data and recent economic events. We used a discount rate that reflects marketplace participants' cost of capital.
The determination of fair value involves significant management judgment and management applies its best judgment when assessing the reasonableness of financial projections. Fair values are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the interim goodwill and indefinite-lived intangible impairment tests will prove to be accurate predictions of future results.
6. STOCK-BASED COMPENSATION
WESCO’s stock-based employee compensation plans are comprised of stock-settled stock appreciation rights, restricted stock units and performance-based awards. Compensation cost for all stock-based awards is measured at fair value on the date of grant and compensation cost is recognized, net of estimated forfeitures, over the service period for awards expected to vest. The fair value of stock-settled stock appreciation rights and performance-based awards with market conditions is determined using the Black-Scholes and Monte Carlo simulation models, respectively.model. The fair value of restricted stock units and performance-based awards with performance conditions is determined by the grant-date closing price of WESCO’s common stock. The forfeiture assumption is based on WESCO’s historical employee behavior that is reviewed on an annual basis. No dividends are assumed. For stock-settled stock appreciation rights that are exercised and for restricted stock units and performance-based awards that vest, shares are issued out of WESCO's outstanding common stock.
Stock-settled stock appreciation rights vest ratably over a three-year period and terminate on the tenth anniversary of the grant date unless terminated sooner under certain conditions. Vesting of restricted stock units is based on a minimum time period of three years. Vesting of performance-based awards is based on a three-year performance period, and the number of
10

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)

shares earned, if any, depends on the attainment of certain performance levels. Outstanding awards would vest upon the consummation of a change in control transaction and performance-based awards would vest at the target level.
Performance-based awards granted in 2020 and 2019 were based on two equally-weighted performance measures: the three-year average growth rate of WESCO's net income and the three-year cumulative return on net assets. Performance-based awards granted in 2018 were based on two equally-weighted performance measures: the three-year average growth rate of the Company’s fully diluted earnings per share and the three-year cumulative return on net assets. From 2015 to 2017, the two equally-weighted performance-based award metrics were the three-year average growth rate of WESCO's net income and WESCO's total stockholder return in relation to the total stockholder return of a select group of peer companies over a three-year period.
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


During the three and six months ended June 30,March 31, 2020 and 2019, and 2018, WESCO granted the following stock-settled stock appreciation rights, restricted stock units and performance-based awards at the following weighted-average fair values:
 Three Months Ended Six Months Ended
 June 30,
2019
 June 30,
2018
 June 30,
2019
 June 30,
2018
Stock-settled stock appreciation rights granted
 8,402
 213,618
 499,631
Weighted-average fair value$
 $17.85
 $16.36
 $18.39
        
Restricted stock units granted
 2,502
 175,544
 116,771
Weighted-average fair value$
 $59.95
 $54.64
 $62.75
        
Performance-based awards granted
 
 126,874
 44,144
Weighted-average fair value$
 $
 $54.64
 $62.80

Three Months Ended
March 31,
2020
March 31,
2019
Stock-settled stock appreciation rights granted262,091  213,618  
Weighted-average fair value$13.86  $16.36  
Restricted stock units granted211,450  175,544  
Weighted-average fair value$48.32  $54.64  
Performance-based awards granted158,756  126,874  
Weighted-average fair value$48.67  $54.64  
The fair value of stock-settled stock appreciation rights was estimated using the following weighted-average assumptions:
 Three Months Ended Six Months Ended
 June 30,
2019
 June 30,
2018
 June 30,
2019
 June 30,
2018
Risk free interest raten/a 2.8% 2.5% 2.5%
Expected life (in years)n/a 5
 5
 5
Expected volatilityn/a 28% 29% 28%

Three Months Ended
March 31,
2020
March 31,
2019
Risk free interest rate1.4 %2.5 %
Expected life (in years)55
Expected volatility30 %29 %
The risk-free interest rate is based on the U.S. Treasury Daily Yield Curve as of the grant date. The expected life is based on historical exercise experience and the expected volatility is based on the volatility of the Company's daily stock prices over a five-year period preceding the grant date.
The following table sets forth a summary of stock-settled stock appreciation rights and related information for the sixthree months ended June 30, 2019:March 31, 2020:
AwardsWeighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual Term (In years)
Aggregate
Intrinsic
Value
(In thousands)
Outstanding at December 31, 20192,337,049  $59.72    
     Granted262,091  48.32    
     Exercised(6,589) 42.12    
     Forfeited(24,273) 65.33    
Outstanding at March 31, 20202,568,278  58.54  5.7$—  
Exercisable at March 31, 20202,027,915  $59.84  4.9$—  
 Awards 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual Term (In years)
 
Aggregate
Intrinsic
Value
(In thousands)
Outstanding at December 31, 20182,351,633
 $59.26
    
     Granted213,618
 54.63
    
     Exercised(106,044) 34.70
    
     Forfeited(44,877) 70.10
    
Outstanding at June 30, 20192,414,330
 59.73
 6.2 $6,739
Exercisable at June 30, 20191,749,679
 $59.01
 5.2 $6,739


11

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


The following table sets forth a summary of time-based restricted stock units and related information for the sixthree months ended June 30, 2019:March 31, 2020:
 Awards 
Weighted-
Average
Fair
Value
Unvested at December 31, 2018327,798
 $57.87
     Granted175,544
 54.64
     Vested(116,858) 44.32
     Forfeited(2,937) 56.16
Unvested at June 30, 2019383,547
 $60.46

AwardsWeighted-
Average
Fair
Value
Unvested at December 31, 2019363,729  $60.00  
     Granted211,450  48.32  
     Vested(78,007) 70.07  
     Forfeited(6,755) 61.67  
Unvested at March 31, 2020490,417  $53.38  
Performance shares are awards for which the vesting will occur based on market or performance conditions. The following table sets forth a summary of performance-based awards for the sixthree months ended June 30, 2019:March 31, 2020:
 Awards 
Weighted-
Average
Fair
Value
Unvested at December 31, 2018138,896
 $59.33
     Granted126,874
 54.64
     Vested(25,696) 42.44
     Forfeited(35,486) 50.79
Unvested at June 30, 2019204,588
 $60.11

The unvested performance-based awards in the table above include 17,507 shares in which vesting of the ultimate number of shares is dependent upon WESCO's total stockholder return in relation to the total stockholder return of a select group of peer companies over a three-year period. These awards are accounted for as awards with market conditions; compensation cost is recognized over the service period, regardless of whether the market conditions are achieved and the awards ultimately vest.
AwardsWeighted-
Average
Fair
Value
Unvested at December 31, 2019195,305  $60.24  
     Granted158,756  48.67  
     Vested(25,909) 78.04  
     Forfeited(20,538) 71.47  
Unvested at March 31, 2020307,614  $52.60  
Vesting of the remaining 187,081307,614 shares of performance-based awards in the table above is dependent upon the achievement of certain performance targets, including 80,944134,010 that are dependent upon the three-year average growth rate of WESCO's net income, 21,35019,797 that are dependent upon the three-year average growth rate of the Company's fully diluted earnings per share, and 84,787153,807 that are based upon the three-year cumulative return on net assets. These awards are accounted for as awards with performance conditions; compensation cost is recognized over the performance period based upon WESCO's determination of whether it is probable that the performance targets will be achieved.
WESCO recognized $5.2$4.6 million and $4.4$4.7 million of non-cash stock-based compensation expense, which is included in selling, general and administrative expenses, for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively. WESCO recognized $9.8 million and $8.0 million of non-cash stock-based compensation expense, which is included in selling, general and administrative expenses, for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019,March 31, 2020, there was $31.4$35.9 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements for all awards previously made, of which approximately $10.2$14.3 million is expected to be recognized over the remainder of 2019, $13.5 million in 2020, $7.0$13.4 million in 2021, and $0.7$7.4 million in 2022.2022 and $0.8 million in 2023.
8.7. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income attributable to WESCO International by the weighted-average number of common shares outstanding during the periods. Diluted earnings per share is computed by dividing net income attributable to WESCO International by the weighted-average common shares and common share equivalents outstanding during the periods. The dilutive effect of common share equivalents is considered in the diluted earnings per share computation using the treasury stock method, which includes consideration of equity awards.

12

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


The following table sets forth the details of basic and diluted earnings per share:
 Three Months Ended Six Months Ended
 June 30 June 30
(In thousands, except per share data)2019 2018 2019 2018
Net income attributable to WESCO International$63,464
 $57,940
 $105,832
 $102,361
Weighted-average common shares outstanding used in computing basic earnings per share43,493
 47,085
 44,280
 47,062
Common shares issuable upon exercise of dilutive equity awards323
 465
 381
 516
Weighted-average common shares outstanding and common share equivalents used in computing diluted earnings per share

43,816
 47,550
 44,661
 47,578
Earnings per share attributable to WESCO International       
Basic$1.46
 $1.23
 $2.39
 $2.18
Diluted$1.45
 $1.22
 $2.37
 $2.15

Three Months Ended
 March 31
(In thousands, except per share data)20202019
Net income attributable to WESCO International$34,407  $42,369  
Weighted-average common shares outstanding used in computing basic earnings per share41,837  45,076  
Common shares issuable upon exercise of dilutive equity awards238  415  
Weighted-average common shares outstanding and common share equivalents used in computing diluted earnings per share42,075  45,491  
Earnings per share attributable to WESCO International
Basic$0.82  $0.94  
Diluted$0.82  $0.93  
For the three and six months ended June 30,March 31, 2020 and 2019, the computation of diluted earnings per share attributable to WESCO International excluded approximately 2.3 million and 1.8 million of stock-based awards, of approximately 1.8 million. For the three and six months ended June 30, 2018, the computation of diluted earnings per share attributable to WESCO International excluded stock-based awards of approximately 1.5 million.respectively. These amounts were excluded because their effect would have been antidilutive.
In December 2017, the Company's Board of Directors authorized the repurchase of up to $300 million of the Company's common stock through December 31, 2020.2020. In October 2018, the Board approved an increase to this repurchase authorization from $300 million to $400 million.
On May 7, 2019,November 6, 2018, the Company entered into an accelerated stock repurchase agreement (the "ASR Transaction") with a financial institution to repurchase additional shares of its common stock. In exchange for an up-front cash payment of $150.0$100.0 million, the Company received 2,394,816a total of 1,953,167 shares, 365,272 of which were received during the three months ended June 30,March 31, 2019. As of June 30, 2019, the ASR Transaction had not yet settled between the counterparties. Upon settlement, the Company expects to receive additional shares. WESCO funded the repurchase primarily with borrowings under its accounts receivable securitization facility. For the six months ended June 30, 2019, the Company received a total of 2,760,088 shares, of which 365,272 were received upon the settlement of an accelerated stock repurchase agreement entered into on November 6, 2018.and revolving credit facilities.
The total number of shares ultimately delivered under an accelerated stock repurchase transaction is determined by the average of the volume-weighted-average price of the Company's common stock for each exchange business day during the respective settlement valuation periods. For purposes of computing earnings per share for the three and six months ended June 30,March 31, 2019, sharesshare repurchases have been reflected as a reduction to common shares outstanding on the respective delivery dates.
9.8. EMPLOYEE BENEFIT PLANS
A majority of WESCO’s employees are covered by defined contribution retirement savings plans for their services rendered subsequent to WESCO’s formation. WESCO also offers a deferred compensation plan for select individuals. For U.S. participants, WESCO matches contributions made by employees at an amount equal to 50% of participants' total monthly contributions up to a maximum of 6% of eligible compensation. For Canadian participants, WESCO makes contributions in amounts ranging from 3% to 5% of participants' eligible compensation based on years of continuous service. WESCO may also make, subject to the Board of Directors' approval, a discretionary contribution to the defined contribution retirement savings plan covering U.S. participants if certain predetermined profit levels are attained. For the sixthree months ended June 30,March 31, 2020 and 2019, and 2018, WESCO incurred charges of $18.9$2.8 million and $21.9$12.6 million, respectively, for all such plans. Contributions are made in cash to employee retirement savings plan accounts. The deferred compensation plan is an unfunded plan. As of June 30, 2019March 31, 2020 and December 31, 2018,2019, the Company's obligation under the deferred compensation plan was $23.7$21.9 million and $21.9$25.2 million, respectively. Employees have the option to transfer balances allocated to their accounts in the defined contribution retirement savings plan and the deferred compensation plan into any of the available investment options.
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


The Company sponsors a contributory defined benefit plan covering substantially all Canadian employees of EECOL and a Supplemental Executive Retirement Plan (the "SERP") for certain executives of EECOL. During the three and six months ended June 30, 2019,March 31, 2020, the Company contributed $0.1made aggregate cash contributions of $1.0 million and $0.2 million, respectively, to the SERP.its defined benefit plans.

13

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)

The following table sets forth the components of net periodic benefit costs for the defined benefit plans:
 Three Months Ended Six Months Ended
 June 30 June 30
(In thousands)2019 2018 2019 2018
Service cost$1,139
 $1,312
 $2,288
 $2,659
Interest cost1,080
 1,039
 2,169
 2,105
Expected return on plan assets(1,410) (1,500) (2,832) (3,040)
Recognized actuarial gain(15) (12) (31) (24)
Net periodic benefit cost$794
 $839
 $1,594
 $1,700

Three Months Ended
 March 31
(In thousands)20202019
Service cost$1,309  $1,149  
Interest cost1,037  1,089  
Expected return on plan assets(1,614) (1,422) 
Recognized actuarial gain27  (16) 
Net periodic benefit cost$759  $800  
The service cost of $1.1$1.3 million and $1.3$1.1 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $2.3 million and $2.7 million for the six months ended June 30, 2019 and 2018, respectively, was reported as a component of selling, general and administrative expenses. The other components of net periodic benefit cost totaling a net benefit of $0.3$0.6 million and $0.5$0.3 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $0.7 million and $1.0 million for the six months ended June 30, 2019 and 2018, respectively, were presented as a component of net interest and other.
10.9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, bank overdrafts, and outstanding indebtedness. The Company's outstanding indebtedness includes $500 million in aggregate principal amount of 5.375% Senior Notes due 2021 and $350 million in aggregate principal amount of 5.375% Senior Notes due 2024. With the exception of these debt instruments, the carrying values of the Company's financial instruments approximate fair value.
The following table sets forth WESCO's debt instruments that were not carried at fair value as of March 31, 2020 and December 31, 2019:
As of
March 31, 2020December 31, 2019
(In thousands)Fair ValueCarrying AmountFair ValueCarrying Amount
5.375% Senior Notes due 2021$458,170  $500,000  $502,895  $500,000  
5.375% Senior Notes due 2024295,358  350,000  363,269  350,000  

The Company uses a market approach to determine the fair value of its debt instruments, utilizing quoted prices in active markets, interest rates and other relevant information generated by market transactions involving similar instruments. Therefore, the inputs used to measure the fair value of the Company's debt instruments are classified as Level 2 within the fair value hierarchy. The reported carrying amountsChanges in the fair value of WESCO'sthe Company's debt instruments was effected by the current economic and financial instruments approximated their fair values as of June 30, 2019 and December 31, 2018.market environment.
11.10. COMMITMENTS AND CONTINGENCIES
From time to time, a number of lawsuits and claims have been or may be asserted against the Company relating to the conduct of its business, including litigation relating to commercial, product and employment matters. The outcome of any litigation cannot be predicted with certainty, and some lawsuits may be determined adversely to WESCO. However, management does not believe that the ultimate outcome of any such pending matters is likely to have a material adverse effect on WESCO's financial condition or liquidity, although the resolution in any fiscal period of one or more of these matters may have a material adverse effect on WESCO's results of operations for that period.
In an effort to expand the Company's footprint in the Middle East, WESCO has been doing business since 2009 with WESTEC Supplies General Trading (“WESTEC”), an industrial equipment supplier headquartered in the United Arab Emirates. WESTEC has debt facilities comprised of a $5.8 million term loan and a $1.0 million line of credit with a maximum borrowing capacity of approximately $6.8 million to support its working capital requirements and joint sales efforts with WESCO. Due to the nature of WESCO’s arrangement with WESTEC, WESCO has provided a standby letter of credit under its revolving credit facility of up to $7.3 million as security for WESTEC’s line of credit.debt facilities. As of June 30, 2019,March 31, 2020, WESTEC had an outstanding loan balance ofindebtedness totaling $6.0 million. Management
14

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)

currently believes the estimated fair value of the noncontingent guarantee on the line of creditoutstanding indebtedness is nominal and therefore a liability has not been recorded as of June 30, 2019.March 31, 2020.
12.11. INCOME TAXES
The effective tax rate for the three and six months ended June 30,March 31, 2020 and 2019 was 21.6%23.1% and 21.7%, respectively. The effective tax rate for the three and six months ended June 30, 2018 was 21.5% and 20.7%, respectively. WESCO’s effective tax rate is typically impacted by the tax effect of intercompany financing, foreign tax rate differences, nondeductible expenses and state income taxes. The higher effective tax rate for the sixthree months ended June 30, 2019 wasMarch 31, 2020 is higher than the prior period primarily due to the full application of the international provisions of U.S.discrete income tax reform.expense related to stock-based awards. There have been no material adjustments to liabilities for uncertain tax positions since the last annual disclosure for the year ended December 31, 2018.2019.
12. SUBSEQUENT EVENTS
On April 30, 2020, in connection with WESCO’s previously announced Merger with Anixter, WESCO announced that its wholly owned subsidiary, WESCO Distribution, has commenced (a) offers to purchase for cash any and all of Anixter Inc.’s, (a wholly owned subsidiary of Anixter), outstanding (i) 5.50% Senior Notes due 2023, $350,000,000 aggregate principal amount, and (ii) 6.00% Senior Notes due 2025, $250,000,000 aggregate principal amount (collectively, the “Anixter Notes,” and such offers, the “Offers”) and (b) solicitations of consents from the holders of each series of these existing Anixter Notes to amend the relevant indentures to eliminate certain of the covenants, restrictive provisions, events of default and related provisions therein and exclude the Merger from the change in control provision. Among other conditions, the Offers are conditioned upon the substantially concurrent or prior closing of the Merger.
Concurrent with WESCO’s Offers, Anixter announced that Anixter Inc. has commenced solicitations of consents from the holders of each series of the Anixter Notes to amend the relevant indentures to, among other things, exclude the Merger from the change in control provision (the “Anixter Consent Solicitations”) in return for the payment of a consent fee (the “Consent Fee”). Holder of Anixter Notes have the option to participate in either the Offers or the Anixter Consent Solicitations, but not both. In certain circumstances, consents delivered in connection with the Offers may be aggregated with those delivered in connection with the Anixter Consent Solicitations.
Subject to the terms and conditions of the Offer to Purchase and Consent Solicitation Statement, dated April 30, 2020 (the “Offer to Purchase”), payment of the Offer consideration or the Consent Fee, as applicable, is expected to occur at or immediately following the closing of the Merger. Additional information with respect to the Offers and the Anixter Consent Solicitations is included in WESCO’s Current Report on Form 8-K, filed with the SEC on April 30, 2020. Holders of Anixter Notes should also read the Offer to Purchase (and the documents incorporated by reference therein) carefully and in their entirety before making any decision with respect to a tender of Anixter Notes pursuant to the Offers or the Anixter Consent Solicitations, because they contain important information.
15


WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


13. CONDENSED CONSOLIDATING FINANCIAL INFORMATION
WESCO Distribution has outstanding $500 million in aggregate principal amount of 5.375% Senior Notes due 2021 (the "2021 Notes") and $350 million in aggregate principal amount of 5.375% Senior Notes due 2024 (the "2024 Notes"). The 2021 Notes and 2024 Notes are unsecured senior obligations of WESCO Distribution and are fully and unconditionally guaranteed on a senior unsecured basis by WESCO International.
Condensed consolidating financial information for WESCO International, WESCO Distribution and the non-guarantor subsidiaries is presented in the following tables.
 Condensed Consolidating Balance Sheet
 June 30, 2019
          
(In thousands)
WESCO
International,
Inc.
 
WESCO
Distribution,
Inc.
 
Non-Guarantor
Subsidiaries
 
Consolidating
and
Eliminating
Entries
 Consolidated
Cash and cash equivalents$
 $34,401
 $52,817
 $
 $87,218
Trade accounts receivable, net
 
 1,355,541
 
 1,355,541
Inventories
 455,898
 548,229
 
 1,004,127
Prepaid expenses and other current assets1,123
 17,703
 121,956
 (2,804) 137,978
Total current assets1,123
 508,002
 2,078,543
 (2,804) 2,584,864
Intercompany receivables, net
 
 2,521,347
 (2,521,347) 
Property, buildings and equipment, net
 73,401
 98,958
 
 172,359
Operating lease assets
 139,468
 93,935
 
 233,403
Intangible assets, net
 1,816
 302,576
 
 304,392
Goodwill
 257,623
 1,495,177
 
 1,752,800
Investments in affiliates3,336,052
 5,276,915
 
 (8,612,967) 
Other assets
 2,597
 17,521
 
 20,118
Total assets$3,337,175
 $6,259,822
 $6,608,057
 $(11,137,118) $5,067,936
          
Accounts payable$
 $418,469
 $450,136
 $
 $868,605
Short-term debt
 
 27,217
 
 27,217
Other current liabilities
 66,660
 165,154
 (2,804) 229,010
Total current liabilities
 485,129
 642,507
 (2,804) 1,124,832
Intercompany payables, net1,196,100
 1,325,247
 
 (2,521,347) 
Long-term debt, net
 892,909
 506,577
 
 1,399,486
Operating lease liabilities
 110,360
 67,547
 
 177,907
Other noncurrent liabilities
 110,125
 120,763
 
 230,888
Total WESCO International stockholders' equity2,141,075
 3,336,052
 5,276,915
 (8,612,967) 2,141,075
Noncontrolling interests
 
 (6,252) 
 (6,252)
Total liabilities and stockholders’ equity$3,337,175
 $6,259,822
 $6,608,057
 $(11,137,118) $5,067,936

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


 Condensed Consolidating Balance Sheet
 December 31, 2018
          
(In thousands)
WESCO
International,
Inc.
 
WESCO
Distribution,
Inc.
 
Non-Guarantor
Subsidiaries
 
Consolidating
and
Eliminating
Entries
 Consolidated
Cash and cash equivalents$
 $35,931
 $60,412
 $
 $96,343
Trade accounts receivable, net
 
 1,166,607
 
 1,166,607
Inventories
 440,422
 508,304
 
 948,726
Prepaid expenses and other current assets1,123
 57,586
 124,523
 (9,268) 173,964
Total current assets1,123
 533,939
 1,859,846
 (9,268) 2,385,640
Intercompany receivables, net
 
 2,403,704
 (2,403,704) 
Property, buildings and equipment, net
 63,506
 97,372
 
 160,878
Intangible assets, net
 2,131
 313,885
 
 316,016
Goodwill
 257,623
 1,464,980
 
 1,722,603
Investments in affiliates3,182,469
 5,137,783
 
 (8,320,252) 
Other assets
 2,905
 16,994
 
 19,899
Total assets$3,183,592
 $5,997,887
 $6,156,781
 $(10,733,224) $4,605,036
          
Accounts payable$
 $404,373
 $389,975
 $
 $794,348
Short-term debt
 
 30,785
 
 30,785
Other current liabilities
 86,600
 159,481
 (9,268) 236,813
Total current liabilities
 490,973
 580,241
 (9,268) 1,061,946
Intercompany payables, net1,048,282
 1,355,422
 
 (2,403,704) 
Long-term debt, net
 842,093
 325,218
 
 1,167,311
Other noncurrent liabilities
 126,930
 119,123
 
 246,053
Total WESCO International stockholders' equity2,135,310
 3,182,469
 5,137,783
 (8,320,252) 2,135,310
Noncontrolling interests
 
 (5,584) 
 (5,584)
Total liabilities and stockholders’ equity$3,183,592
 $5,997,887
 $6,156,781
 $(10,733,224) $4,605,036

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


 Condensed Consolidating Statement of Income and Comprehensive Income
 Three Months Ended
 June 30, 2019
          
(In thousands)
WESCO
International,
Inc.
 
WESCO
Distribution,
Inc.
 
Non-Guarantor
Subsidiaries
 
Consolidating
and
Eliminating
Entries
 Consolidated
Net sales$
 $938,333
 $1,255,952
 $(44,197) $2,150,088
Cost of goods sold (excluding depreciation and         
amortization)
 763,036
 1,022,275
 (44,197) 1,741,114
Selling, general and administrative expenses
 146,133
 149,709
 
 295,842
Depreciation and amortization
 4,471
 10,711
 
 15,182
Results of affiliates’ operations63,215
 53,962
 
 (117,177) 
Net interest and other
 12,880
 4,427
 
 17,307
Income tax expense
 2,560
 14,868
 
 17,428
Net income63,215
 63,215
 53,962
 (117,177) 63,215
Net loss attributable to noncontrolling interests
 
 (249) 
 (249)
Net income attributable to WESCO International$63,215
 $63,215
 $54,211
 $(117,177) $63,464
Other comprehensive income:         
Foreign currency translation adjustments20,244
 20,244
 20,244
 (40,488) 20,244
Comprehensive income attributable to WESCO International$83,459
 $83,459
 $74,455
 $(157,665) $83,708


 Condensed Consolidating Statement of Income and Comprehensive Income
 Six Months Ended
 June 30, 2019
          
(In thousands)
WESCO
International,
Inc.
 
WESCO
Distribution,
Inc.
 
Non-Guarantor
Subsidiaries
 
Consolidating
and
Eliminating
Entries
 Consolidated
Net sales$
 $1,796,315
 $2,398,346
 $(83,306) $4,111,355
Cost of goods sold (excluding depreciation and         
amortization)
 1,452,592
 1,950,600
 (83,306) 3,319,886
Selling, general and administrative expenses
 298,562
 293,808
 
 592,370
Depreciation and amortization
 9,027
 21,397
 
 30,424
Results of affiliates’ operations105,164
 96,375
 
 (201,539) 
Net interest and other
 24,914
 9,513
 
 34,427
Income tax expense
 2,431
 26,653
 
 29,084
Net income105,164
 105,164
 96,375
 (201,539) 105,164
Net loss attributable to noncontrolling interests
 
 (668) 
 (668)
Net income attributable to WESCO International$105,164
 $105,164
 $97,043
 $(201,539) $105,832
Other comprehensive income:
 

 

 

 

Foreign currency translation adjustments42,763
 42,763
 42,763
 (85,526) 42,763
Comprehensive income attributable to WESCO International$147,927
 $147,927
 $139,806
 $(287,065) $148,595

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


 Condensed Consolidating Statement of Income and Comprehensive Income
 Three Months Ended
 June 30, 2018
          
(In thousands)
WESCO
International,
Inc.
 
WESCO
Distribution,
Inc.
 
Non-Guarantor
Subsidiaries
 
Consolidating
and
Eliminating
Entries
 Consolidated
Net sales$���
 $921,075
 $1,222,369
 $(39,450) $2,103,994
Cost of goods sold (excluding depreciation and         
amortization)
 746,373
 997,177
 (39,450) 1,704,100
Selling, general and administrative expenses
 147,566
 145,322
 
 292,888
Depreciation and amortization
 4,656
 11,167
 
 15,823
Results of affiliates’ operations57,673
 51,122
 
 (108,795) 
Net interest and other
 14,259
 3,482
 
 17,741
Income tax expense
 1,670
 14,099
 
 15,769
Net income57,673
 57,673
 51,122
 (108,795) 57,673
Net loss attributable to noncontrolling interests
 
 (267) 
 (267)
Net income attributable to WESCO International$57,673
 $57,673
 $51,389
 $(108,795) $57,940
Other comprehensive loss:
 

 

 

 

Foreign currency translation adjustments(28,715) (28,715) (28,715) 57,430
 (28,715)
Comprehensive income attributable to WESCO International$28,958
 $28,958
 $22,674
 $(51,365) $29,225


 Condensed Consolidating Statement of Income and Comprehensive Income
 Six Months Ended
 June 30, 2018
          
(In thousands)
WESCO
International,
Inc.
 
WESCO
Distribution,
Inc.
 
Non-Guarantor
Subsidiaries
 
Consolidating
and
Eliminating
Entries
 Consolidated
Net sales$
 $1,803,474
 $2,372,479
 $(78,044) $4,097,909
Cost of goods sold (excluding depreciation and         
amortization)
 1,462,631
 1,933,479
 (78,044) 3,318,066
Selling, general and administrative expenses
 298,047
 285,670
 
 583,717
Depreciation and amortization
 9,275
 22,428
 
 31,703
Results of affiliates’ operations100,644
 96,325
 
 (196,969) 
Net interest and other
 28,076
 9,448
 
 37,524
Income tax expense
 1,126
 25,129
 
 26,255
Net income100,644
 100,644
 96,325
 (196,969) 100,644
Net loss attributable to noncontrolling interests
 
 (1,717) 
 (1,717)
Net income attributable to WESCO International$100,644
 $100,644
 $98,042
 $(196,969) $102,361
Other comprehensive loss:
 

 

 

 

Foreign currency translation adjustments(57,515) (57,515) (57,515) 115,030
 (57,515)
Comprehensive income attributable to WESCO International$43,129
 $43,129
 $40,527
 $(81,939) $44,846

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


 Condensed Consolidating Statement of Cash Flows
 Six Months Ended
 June 30, 2019
          
(In thousands)
WESCO
International,
Inc.
 
WESCO
Distribution,
Inc.
 
Non-Guarantor
Subsidiaries
 
Consolidating
and Eliminating
Entries
 Consolidated
Net cash provided by (used in) operating activities$4,904
 $128,070
 $(141,749) $
 $(8,775)
Investing activities:
 
 
 
 
Capital expenditures
 (5,843) (15,559) 
 (21,402)
Acquisition payments
 (27,742) 
 
 (27,742)
Dividends received from subsidiaries
 44,417
 
 (44,417) 
Other
 (192,235) (1,155) 192,235
 (1,155)
Net cash used in investing activities
 (181,403) (16,714) 147,818
 (50,299)
Financing activities:         
Borrowings147,818
 242,134
 720,657
 (192,235) 918,374
Repayments
 (193,134) (525,306) 
 (718,440)
Repurchases of common stock(152,722) 
 
 
 (152,722)
Dividends paid by subsidiaries
 
 (44,417) 44,417
 
Other
 2,803
 
 
 2,803
Net cash (used in) provided by financing activities(4,904) 51,803
 150,934
 (147,818) 50,015
Effect of exchange rate changes on cash and cash equivalents
 
 (66) 
 (66)
Net change in cash and cash equivalents
 (1,530) (7,595) 
 (9,125)
Cash and cash equivalents at the beginning of period
 35,931
 60,412
 
 96,343
Cash and cash equivalents at the end of period$
 $34,401
 $52,817
 $
 $87,218

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(unaudited)


 Condensed Consolidating Statement of Cash Flows
 Six Months Ended
 June 30, 2018
          
(In thousands)
WESCO
International,
Inc.
 
WESCO
Distribution,
Inc.
 
Non-Guarantor
Subsidiaries
 
Consolidating
and Eliminating
Entries
 Consolidated
Net cash provided by operating activities$9,878
 $31,192
 $45,751
 $
 $86,821
Investing activities:         
Capital expenditures
 (9,334) (7,050) 
 (16,384)
Dividends received from subsidiaries
 95,511
 
 (95,511) 
Other
 (37,524) (8,684) 37,524
 (8,684)
Net cash provided by (used in) investing activities
 48,653
 (15,734) (57,987) (25,068)
Financing activities:         
Borrowings
 191,888
 736,372
 (45,511) 882,749
Repayments(7,987) (260,888) (673,761) 7,987
 (934,649)
Repurchases of common stock(1,891) 
 
 
 (1,891)
Dividends paid by subsidiaries
 
 (95,511) 95,511
 
Other
 (9,958) 
 
 (9,958)
Net cash used in financing activities(9,878) (78,958) (32,900) 57,987
 (63,749)
Effect of exchange rate changes on cash and cash equivalents
 
 (5,017) 
 (5,017)
Net change in cash and cash equivalents
 887
 (7,900) 
 (7,013)
Cash and cash equivalents at the beginning of period
 50,602
 67,351
 
 117,953
Cash and cash equivalents at the end of period$
 $51,489
 $59,451
 $
 $110,940

14. SUBSEQUENT EVENTS
The Company evaluated subsequent events and concluded that no subsequent events have occurred that would require recognition in the unaudited Condensed Consolidated Financial Statements or disclosure in the Notes thereto.

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the information in the unaudited condensed consolidated financial statements and notes thereto included herein and WESCO International, Inc.’s audited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in its 20182019 Annual Report on Form 10-K. The matters discussed herein may contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. Certain of these risks are set forth in WESCO International, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2018,2019, as well as WESCO International, Inc.’s other reports filed with the Securities and Exchange Commission.
Company Overview
WESCO International, Inc. (“WESCO International”), incorporated in 1993 and effectively formed in February 1994 upon acquiring a distribution business from Westinghouse Electric Corporation, is a leading North American-based distributor of products and provider of advanced supply chain management and logistics services used primarily in industrial, construction, utility, and commercial, institutional and government (“CIG”) markets. We are a leading provider of electrical, industrial, and communications maintenance, repair and operating ("MRO") and original equipment manufacturer ("OEM") products, construction materials, and advanced supply chain management and logistics services. Our primary product categories include general supplies, wire, cable and conduit, communications and security, electrical distribution and controls, lighting and sustainability, and automation, controls and motors.
We serve approximately 70,000 active customers globally through approximately 500 branches primarily located in North America, with operations in 1516 additional countries and 1011 distribution centers located in the United States and Canada. We employ approximately 9,3009,500 employees worldwide. We distribute over 1,000,000 products, grouped into six categories, from approximately 30,000 suppliers, utilizing a highly automated, proprietary electronic procurement and inventory replenishment system.
In addition, we offer a comprehensive portfolio of value-added capabilities, which includes supply chain management, logistics and transportation, procurement, warehousing and inventory management, as well as kitting, limited assembly of products and system installation. Our value-added capabilities, extensive geographic reach, experienced workforce and broad product and supply chain solutions have enabled us to grow our business and establish a leading position in North America.
Our financial results for the first sixthree months of 20192020 reflect net sales growth and a continued positive impact from our margin improvement initiatives.through the first ten weeks of the quarter, offset by declines during the last two weeks of March, as well as the uncertain operating environment caused by the COVID-19 virus. Net sales increased $13.4$7.4 million, or 0.3%0.4%, over the same period last year. Cost of goods sold as a percentage of net sales was 80.7%80.9% and 81.0%80.5% for the first sixthree months of 20192020 and 2018,2019, respectively. Selling, general and administrative ("SG&A") expenses as a percentage of net sales were 14.4%15.2% and 14.2%15.1% for the first sixthree months of 20192020 and 2018,2019, respectively. Operating profit was $168.7$60.9 million for the current sixthree month period, compared to $164.4$70.7 million for the first sixthree months of 2018. Operating2019. Adjusted for $4.6 million of transaction costs related to our merger with Anixter, operating profit increased primarily due to higher sales volume.was $65.5 million for the first quarter of 2020. Net income attributable to WESCO International for the sixthree months ended June 30,March 31, 2020 and 2019 and 2018 was $105.8$34.4 million and $102.4$42.4 million, respectively. Earnings per diluted share for the first quarter of 2020 was $0.82, based on 42.1 million diluted shares, compared to $0.93 for the first quarter of 2019, based on 45.5 million diluted shares. Adjusted earnings per diluted share for the first quarter of 2020 was $0.91.
We have been and will continue to take the appropriate actions in response to the COVID-19 virus. Our top priority is the health and safety of our employees. The products and services that we provide are integral to the daily operations of our essential business customers, and as such, we are performing essential activities necessary to manage basic operations in the midst of the pandemic. To date, our branch locations have remained operational consistent with existing governmental and public health authority directives. We have taken actions to reduce costs consistent with the expected decline in demand. We will work to prepare our business to respond to the needs of our customers as demand recovers, which we believe could occur in the second half of this year.
Certain triggering events occurred during the first quarter of 2020, including the effect of the ongoing macroeconomic disruption and uncertainty caused by the COVID-19 pandemic, as well as the decline in our share price and market capitalization, both of which could indicate that the carrying value of goodwill and indefinite-lived intangible assets may not be recoverable. Accordingly, we performed an interim test for impairment. We tested for goodwill impairment on a reporting unit level and the evaluation involved comparing the fair value of each reporting unit to its carrying value. The fair values of our reporting units were determined using a combination of a discounted cash flow analysis and market multiples. We evaluated the recoverability of indefinite-lived intangible assets using the relief-from-royalty method based on projected financial information. As of March 31, 2020 and December 31, 2019, goodwill and indefinite-lived trademarks totaled $1.8 billion and $1.9 billion, respectively.
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

There were no impairment losses identified as a result of our interim test. Two of our reporting units with goodwill of $261.3 million and $524.9 million, respectively, had estimated fair values that exceeded their respective carrying values by less than 5%. The determination of fair value of our reporting units involves significant management judgment, particularly as it relates to the underlying assumptions and factors around our expected operating margins and discount rate. In performing our quantitative assessments, we used expected operating margins supported by a combination of historical results, current forecasts, market data and recent economic events. We used a discount rate that reflects marketplace participants' cost of capital.
Although we applied our best judgment assessing the reasonableness of the financial projections used to estimate the fair value of our reporting units, there is significant uncertainty surrounding the current macroeconomic environment and conditions in the markets in which we operate. A sustained decline in our share price and market capitalization, or any further economic deterioration that could cause our financial performance to fall below our current expectations, could increase the likelihood that the fair values of our reporting units are less than their carrying values, resulting in an impairment of goodwill and indefinite-lived intangible assets in a future period. As a result, there can be no assurance that the estimates and assumptions made for purposes of the interim goodwill and indefinite-lived intangible impairment tests will prove to be an accurate prediction of future results.
Cash Flow
CashWe generated $31.5 million of operating cash flow used in operations was $8.8 million for the first sixthree months of 2019.2020. Investing activities included paymentsthe $100.0 million termination fee associated with the acquisition of $27.7 millionAnixter, as described in Note 5 of our Notes to acquire Sylvania Lighting Solutions ("SLS")the unaudited Condensed Consolidated Financial Statements, and $21.4$15.8 million of capital expenditures. Financing activities were comprised of borrowings and repayments of $473.5$360.5 million and $464.3$260.5 million, respectively, related to our revolving credit facility (the "Revolving Credit Facility"), as well as borrowings and repayments of $410.0$225.0 million and $190.0$40.0 million, respectively, related to our accounts receivable securitization facility (the “Receivables Facility”) and repayments of $24.8 million to pay off our term loan facility (the "Term Loan Facility"). Financing activities for the first sixthree months of 20192020 also included borrowings andnet repayments onrelated to our various international lines of credit of approximately $34.9 million and $39.4 million, respectively. Additionally, financing activities for the first six months of 2019 included the repurchase of $150.0 million of the Company's common stock pursuant to an accelerated stock repurchase transaction under the share repurchase plan announced on December 13, 2017 and amended on October 31, 2018.$0.4 million.
Financing Availability
As of June 30, 2019,March 31, 2020, we had $504.8$446.6 million in total available borrowing capacity under our Revolving Credit Facility, which was comprised of $355.8$231.3 million of availability under the U.S. sub-facility and $149.0$215.3 million of availability under the Canadian sub-facility. AvailableWe had no borrowing capacity available under our Receivables Facility was $55.0 million.Facility. The Revolving Credit Facility and the Receivables Facility both mature in September 2020.

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


2024 and September 2022, respectively.
Critical Accounting Policies and Estimates
Effective January 1, 2019,2020, we adopted Accounting Standards Update (ASU) 2016-02,2016-13, LeasesFinancial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and all the related amendments.. See Note 2 of our Notes to the unaudited Condensed Consolidated Financial Statements for information regarding our significant accounting policies.

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Results of Operations
SecondFirst Quarter of 20192020 versus SecondFirst Quarter of 20182019
The following table sets forth the percentage relationship to net sales of certain items in our Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the periods presented:

Three Months EndedThree Months Ended
June 30March 31
2019 201820202019
Net sales100.0% 100.0%Net sales100.0 %100.0 %
Cost of goods sold (excluding depreciation and amortization)81.0
 81.0
Cost of goods sold (excluding depreciation and amortization)80.9  80.5  
Selling, general and administrative expenses13.8
 13.9
Selling, general and administrative expenses15.2  15.1  
Depreciation and amortization0.6
 0.8
Depreciation and amortization0.8  0.8  
Income from operations4.6
 4.3
Income from operations3.1  3.6  
Net interest and other0.8
 0.8
Net interest and other0.8  0.8  
Income before income taxes3.8
 3.5
Income before income taxes2.3  2.8  
Provision for income taxes0.8
 0.7
Provision for income taxes0.5  0.6  
Net income attributable to WESCO International3.0% 2.8% Net income attributable to WESCO International1.8 %2.2 %
Net sales were $2.2$2.0 billion for the secondfirst quarter of 2019, compared to $2.1 billion for the second quarter of 2018, an increase of 2.2%.2020 and 2019. Organic sales for the secondfirst quarter of 2019 grew2020 declined by 1.9%1.7% as foreign exchange rates negatively impacted net sales by 1.0%, whilethe number of workdays and acquisitions positively impacted net sales by 1.3%.1.6% and 0.5%, respectively. Net sales growth through the first ten weeks of the quarter were offset by declines during the last two weeks of March.
The following table sets forth organic sales growth for the period presented:
Three Months Ended
June 30, 2019March 31, 2020
Change in net sales2.20.4 %
Impact from acquisitions1.30.5 %
Impact from foreign exchange rates(1.0— )%
Impact from number of workdays1.6 %
Organic sales growth1.9(1.7)%
Note: Organic sales growth is a non-GAAP financial measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions in the first year of ownership, foreign exchange rates and number of workdays from the overall percentage change in consolidated net sales.
Cost of goods sold for the secondfirst quarter of 2020 and 2019 and 2018 was $1.7$1.6 billion. As a percentage of net sales, cost of goods sold was 81.0% for both periods. Cost of goods sold as a percentage of net sales for the second quarter of 2019 reflects the positive impact from the SLS acquisition offset by business mix.80.9% and 80.5%, respectively.
SG&A expenses for the secondfirst quarter of 20192020 totaled $295.8$299.4 million versus $292.9$296.6 million for the secondfirst quarter of 2018.2019. As a percentage of net sales, SG&A expenses were 13.8%15.2% and 13.9%15.1%, respectively. The increase in SG&A expenses was primarily duereflects transaction costs related to the impactour merger with Anixter of the SLS acquisition,$4.6 million, partially offset by lower payroll expenses. Adjusted for these costs, SG&A expenses were $294.8 million, or 15.0% of net sales, for the absencefirst quarter of a bad debt charge that was recorded in the prior year's second quarter.

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


2020.
SG&A payroll expenses for the secondfirst quarter of 20192020 of $203.7$203.6 million increaseddecreased by $1.6$3.0 million compared to the same period in 20182019 primarily due to wage inflation and the impact of the SLS acquisition, partially offset by lower variable compensation expense and benefit costs.
Depreciation and amortization for the second quarter of 2019 and 2018 was $15.2 million and $15.8 million, respectively.
Net interest and other totaled $17.3 million for the second quarter of 2019 compared to $17.7 million for the second quarter of 2018.
Income tax expense totaled $17.4 million for the second quarter of 2019 compared to $15.8 million in last year's comparable period, and the effective tax rate was 21.6% and 21.5%, respectively.
Net income for the second quarter of 2019 was $63.2 million, compared to net income of $57.7 million for the second quarter of 2018.
Net loss of $0.3 million was attributable to noncontrolling interests for the second quarter of 2019 and 2018.
Net income and diluted earnings per share attributable to WESCO International were $63.5 million and $1.45 per share, respectively, for the second quarter of 2019, compared with net income and diluted earnings per share of $57.9 million and $1.22 per share, respectively, for the second quarter of 2018.
Six Months Ended June 30, 2019 versus Six Months Ended June 30, 2018
The following table sets forth the percentage relationship to net sales of certain items in our Condensed Consolidated Statements of Income and Comprehensive Income for the periods presented:
 Six Months Ended
 June 30
 2019 2018
Net sales100.0% 100.0%
Cost of goods sold (excluding depreciation and amortization)80.7
 81.0
Selling, general and administrative expenses14.4
 14.2
Depreciation and amortization0.8
 0.8
Income from operations4.1
 4.0
Net interest and other0.8
 0.9
Income before income taxes3.3
 3.1
Provision for income taxes0.7
 0.6
     Net income attributable to WESCO International2.6% 2.5%
Net sales were $4.1 billion for the first six months of 2019 and 2018. Organic sales for the first six months of 2019 grew by 1.5% as foreign exchange rates and the number of workdays negatively impacted net sales by 1.2% and 0.8%, respectively, while acquisitions positively impacted net sales by 0.8%.
The following table sets forth organic sales growth for the period presented:
Six Months Ended
June 30, 2019
Change in net sales0.3 %
Impact from acquisitions0.8 %
Impact from foreign exchange rates(1.2)%
Impact from number of workdays(0.8)%
Organic sales growth1.5 %
Note: Organic sales growth is a non-GAAP financial measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions in the first year of ownership, foreign exchange rates and number of workdays from the overall percentage change in consolidated net sales.

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


Cost of goods sold for the first six months of 2019 and 2018 was $3.3 billion. As a percentage of net sales, cost of goods sold was 80.7% and 81.0%, respectively. The decrease in cost of goods sold as a percentage of net sales was primarily due to the continued positive impact from our margin improvement initiatives.
SG&A expenses for the first six months of 2019 totaled $592.4 million versus $583.7 million for the first six months of 2018. As a percentage of net sales, SG&A expenses were 14.4% and 14.2%, respectively. The increase in SG&A expenses was primarily due to the impact of the SLS acquisition, partially offset by the absence of a bad debt charge that was recorded in the prior year's second quarter.
SG&A payroll expenses for the first six months of 2019 of $410.3 million increased by $6.4 million compared to the same period in 2018 primarily due to primarily due to wage inflation and the impact of the SLS acquisition, partially offset by lower variable compensation expense and benefit costs.
Depreciation and amortization for the first six monthsquarter of 20192020 and 2018 was $30.4$16.1 million, and $31.7compared to $15.2 million respectively.for the first quarter of 2019.
Net interest and other totaled $34.4$16.5 million for the first six monthsquarter of 20192020, compared to $37.5$17.1 million for the first six monthsquarter of 2018. For the six months ended June 30, 2018, net2019. Net interest and other for the first quarter of 2020 includes a foreign exchange lossapproximately $0.5 million of $2.6interest on borrowings against our accounts receivable securitization facility to fund the $100.0 million from the remeasurement of financial instruments, as well as accelerated amortization of debt discount and debt issuance costs totaling $0.8 million due to early repayments on our then outstanding term loan facility.termination fee described above.
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Income tax expense totaled $29.1$10.3 million for the first six monthsquarter of 20192020, compared to $26.3$11.7 million in last year's comparable period, and the effective tax rate was 21.7%23.1% and 20.7%21.7%, respectively. The higher effective tax rate in the current yearquarter is primarily due to the full applicationunfavorable effect of discrete income tax expense associated with stock-based awards. The effective tax rate for the international provisions of U.S. tax reform.current period would have been 21.4% without this discrete impact.
Net income for the first six monthsquarter of 20192020 was $105.2$34.2 million, compared to net income of $100.6$42.0 million for the first six monthsquarter of 2018.2019.
Net loss of $0.7$0.2 million and $1.7$0.4 million was attributable to noncontrolling interests for the first six monthsquarter of 20192020 and 2018,2019, respectively.
Net income and diluted earnings per diluted share attributable to WESCO International were $105.8$34.4 million and $2.37$0.82 per diluted share, respectively, for the first quarter of 2020, compared with net income and earnings per diluted share of $42.4 million and $0.93 per diluted share, respectively, for the first quarter of 2019. Adjusted for the merger-related transaction costs discussed above, net income and earnings per diluted share attributable to WESCO International were $38.3 million and $0.91 per share, respectively, for the first sixthree months of 2019, compared withended March 31, 2020.
The following tables set forth adjusted net income attributable to WESCO International and dilutedadjusted earnings per share of $102.4 million and $2.15 per share, respectively, for the first six months of 2018.diluted share:

Three Months Ended
Adjusted SG&A Expenses:March 31, 2020March 31, 2019
Selling, general and administrative expenses$299,392  $296,528  
Merger-related costs(4,608) —  
Adjusted selling, general and administrative expenses$294,784  $296,528  

Three Months Ended
Adjusted Income from Operations:March 31, 2020March 31, 2019
Income from operations$60,913  $70,726  
Merger-related costs4,608  —  
Adjusted income from operations$65,521  $70,726  

Three Months Ended
Adjusted Net Interest and Other:March 31, 2020March 31, 2019
Net interest and other$16,472  $17,120  
Merger-related interest expense(515) —  
Adjusted net interest and other$15,957  $17,120  

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Three Months Ended
Adjusted Provision for Income Taxes:March 31, 2020March 31, 2019
Provision for income taxes$10,266  $11,656  
Income tax effect of merger-related transaction costs1,183  —  
Adjusted provision for income taxes$11,449  $11,656  

Three Months Ended
Adjusted Earnings Per Diluted Share:March 31, 2020March 31, 2019
Adjusted income from operations$65,521  $70,726  
Adjusted net interest and other15,957  17,120  
Adjusted income before income taxes49,56453,606
Adjusted provision for income taxes11,449  11,656  
Adjusted net income38,11541,950
Net loss attributable to noncontrolling interests(232) (419) 
Adjusted net income attributable to WESCO International, Inc.$38,347  $42,369  
Diluted shares42,075  45,491  
Adjusted earnings per diluted share$0.91  $0.93  
Liquidity and Capital Resources
Total assets were $5.1$5.2 billion and $4.6$5.0 billion at June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively. Total liabilities were $2.9$3.0 billion and $2.5$2.8 billion at June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively. Total stockholders' equity was $2.1$2.2 billion and $2.3 billion at June 30, 2019March 31, 2020 and December 31, 2018.2019, respectively.
Our liquidity needs generally arise from fluctuations in our working capital requirements, capital expenditures, acquisitions and debt service obligations. As of June 30, 2019,March 31, 2020, we had $504.8$446.6 million in available borrowing capacity under our Revolving Credit Facility, and $55.0 million in available borrowing capacity under our Receivables Facility, which combined with available cash of $26.9$285.2 million, provided liquidity of $586.7$731.8 million. Our available cash includes $100 million that we borrowed under our Revolving Credit Facility in March as a precautionary measure to increase our cash position and preserve financial flexibility in light of the current uncertainty resulting from the COVID-19 pandemic. Cash included in our determination of liquidity represents cash in deposit and interest bearing investment accounts. We believe cash provided by operations and financing activities will be adequate to cover our current operational and business needs.needs for at least the next twelve months. In addition, we regularly review our mix of fixed versus variable rate debt, and we may, from time to time, issue or retire borrowings and/or refinance existing debt in an effort to mitigate the impact of interest rate and foreign exchange rate fluctuations, and to maintain a cost-effective capital structure consistent with our anticipated capital requirements. At June 30, 2019,March 31, 2020, approximately 59%54% of our debt portfolio was comprised of fixed rate debt.
Between now and closing of the Anixter acquisition, our capital allocation priorities include supporting our organic sales growth opportunities and repaying or holding cash available for debt repayment. Prior to signing the Merger Agreement with Anixter, we obtained debt financing commitments comprised of a senior secured asset-based revolving credit facility in aggregate principal amount of $1.2 billion and an unsecured bridge facility in aggregate principal amount of $3.2 billion. Prior to the completion of the merger, we intend to enter into permanent financing to replace the unsecured bridge facility, as well as a consent solicitation, tender offer or exchange offer with respect to Anixter's 5.50% Senior Notes due 2023 and 6.00% Senior Notes due 2025. We expect to use proceeds of the debt financing commitments, together with proceeds of any permanent financing replacing the debt financing commitments, amounts available under the senior secured asset-based revolving credit facility and existing cash on hand to consummate the merger. There can be no assurance that WESCO will finance the merger in this anticipated manner and the completion of the merger is not contingent upon the completion of any debt financing. After
20


WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

closing, it is expected that excess liquidity will be directed primarily at debt reduction and costs related to the integration process, and we expect to maintain sufficient liquidity through our credit facilities and cash balances. We anticipate capital expenditures in 2020 to be sufficient to support our business initiatives.
We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions. We also communicate on a regular basis with our lenders regarding our financial and working capital performance, liquidity position and financial leverage. Our financial leverage ratio was 3.43.1 as of June 30, 2019March 31, 2020 and 3.02.8 as of December 31, 2018.2019. In addition, we are in compliance with all covenants and restrictions contained in our debt agreements as of June 30, 2019.

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


March 31, 2020, and we expect to maintain compliance with all such covenants and restrictions following our merger with Anixter.
The following table sets forth our financial leverage ratio as of June 30, 2019March 31, 2020 and December 31, 2018:2019:
Twelve Months Ended
(In millions of dollars, except ratio)March 31,
2020
December 31,
2019
Income from operations$336.4  $346.2  
Depreciation and amortization63.0  62.2  
EBITDA$399.4  $408.4  
As of
March 31,
2020
December 31,
2019
Short-term borrowings and current debt$24.5  $26.7  
Long-term debt1,542.6  1,257.1  
Debt issuance costs (1)
8.2  8.8  
Total debt1,575.3  1,292.6  
Less: cash and cash equivalents342.6  150.9  
Total debt, net of cash$1,232.7  $1,141.7  
Financial leverage ratio3.1  2.8
 Twelve months ended
(In millions of dollars, except ratio)June 30,
2019
 December 31,
2018
Income from operations$356.7
 $352.5
Depreciation and amortization61.7
 63.0
EBITDA$418.4
 $415.5
    
 June 30,
2019
 December 31,
2018
Short-term borrowings and current debt$27.6
 $56.2
Long-term debt1,399.5
 1,167.3
Debt discount and debt issuance costs (1)
7.8
 9.6
Total debt1,434.9
 1,233.1
Less: cash and cash equivalents87.2
 96.3
Total debt, net of cash$1,347.7
 $1,136.8
    
Financial leverage ratio3.4
 3.0
Financial leverage ratio, net of cash3.2
 2.7
(1)(1)Long-term debt is presented in the condensed consolidated balance sheets net of debt issuance costs.
Long-term debt is presented in the condensed consolidated balance sheets net of debt discount and debt issuance costs.
Note: Financial leverage is a non-GAAP measure of the use of debt. Financial leverage ratio is calculated by dividing total debt, including debt discount and debt issuance costs, by EBITDA. Financial leverage ratio, net of cash is calculated by dividing total debt, including debt discount and debt issuance costs, net of cash, by EBITDA. EBITDA, which is also a non-GAAP financial measure, is defined as the trailing twelve months earnings before interest, taxes, depreciation and amortization.
At June 30, 2019,March 31, 2020, we had cash and cash equivalents totaling $87.2$342.6 million, of which $62.2$104.3 million was held by foreign subsidiaries. As a result of the Tax Cuts and Jobs Act of 2017 (the "TCJA"), we reevaluated our intent and ability to repatriate foreign earnings based upon the liquidity of our domestic operations and the cash flow needs of our foreign subsidiaries. Consequently, during the yearyears ended December 31, 2019 and 2018, we repatriated a portion of the previously taxed earnings attributable to our Canadianforeign operations. We continue to assert that the remaining undistributed earnings of our foreign subsidiaries, the majority of which were subject to the one-time tax imposed by the TCJA, are indefinitely reinvested. We believe that we are able to maintain a sufficient level of liquidity for our domestic operations and commitments without repatriating cash held by these foreign subsidiaries. Upon any future repatriation, additional income taxestax expense or benefit may be incurred; however, it iswe do not practicable to determine thebelieve such amount at this time.
We did not note any triggering events or substantive changes during the first six months of 2019 that would require an interim evaluation of impairment of goodwill or indefinite-lived intangible assets. We will perform our annual impairment testing of goodwill and indefinite-lived intangible assets during the fourth quarter.
Over the next several quarters, we plan to closely manage working capital, and it is expected that excess cash will be directed primarily at growth initiatives, acquisitions, debt reduction, and share repurchases. We remain focused on maintaining ample liquidity and credit availability. We anticipate capital expenditures in 2019 to be similar to 2018. We believe our balance sheet and ability to generate ample cash flow provides us with a durable business model and should allow us to fund growth initiatives and expansion needs.material.
Cash Flow
Operating Activities. Net cash used inprovided by operating activities for the first sixthree months of 20192020 totaled $8.8$31.5 million, compared with $86.8$28.9 million of cash generated for the first sixthree months of 2018.2019. Operating activities included net income of $105.2$34.2 million and adjustments to net income totaling $44.4$19.8 million. Other sources of cash in the first three months of 2020 included a decrease in inventories of $37.8 million, a decrease in other accounts receivable of $19.2 million due primarily to the collection of supplier volume rebates earned in 2019, and an increase in other current and noncurrent liabilities of $7.4 million. Primary uses of cash in the first sixthree months of 2020 included: an increase in trade accounts receivable of $53.9 million; a decrease in accrued payroll and benefit costs of $19.0 million resulting from the payment of management incentive compensation earned in 2019; a decrease in accounts payable of $10.9 million; and, an increase in prepaid expenses and other assets of $3.1 million.
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Net cash provided by operating activities for the first three months of 2019 totaled $28.9 million, which included net income of $42.0 million and adjustments to net income totaling $22.1 million. Other sources of cash in the first three months of 2019 included an increase in accounts payable of $68.1 million, a decrease in other accounts receivable of $22.4 million due primarily to the collection of supplier volume rebates earned in 2018, a decrease in prepaid expenses and other assets of $15.1 million, and an increase in other current and noncurrent liabilities of $4.6 million. Primary uses of cash in the first three months of 2019 included: an increase in trade accounts receivable of $157.4$76.7 million resulting from higher sales in the latter part of the quarter; an increase in inventories of $40.8 million primarily to support growth in our business; and, a decrease in accrued payroll and benefit costs of $43.7$27.9 million resulting from the payment of management incentive compensation earned in 2018; an increase in inventories of $39.7 million primarily to support growth in our business; an increase in prepaid expenses and other assets of $7.7 million; and, a decrease in other current and noncurrent liabilities of $4.5 million. Sources of cash in the first six months of

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


2019 included an increase in accounts payable of $62.4 million, and a decrease in other accounts receivable of $32.2 million due primarily to the collection of supplier volume rebates earned in 2018.
Net cash provided by operating activities for the first six months of 2018 totaled $86.8 million, which included net income of $100.6 million and adjustments to net income totaling $48.8 million. Other sources of cash in 2018 included a decrease in other accounts receivable of $38.4 million due primarily to the collection of supplier volume rebates earned in 2017, an increase in accounts payable of $26.1 million, and a decrease in inventories of $11.4 million. Primary uses of cash in the first six months of 2018 included: an increase in trade accounts receivable of $102.6 million resulting from higher sales; a decrease in accrued payroll and benefit costs of $16.6 million resulting from the payment of management incentive compensation earned in 2017; an increase in prepaid expenses and other assets of $12.9 million; and, decrease in other current and noncurrent liabilities of $6.4 million.
Investing Activities. Net cash used in investing activities for the first sixthree months of 20192020 was $50.3$110.3 million, compared with $25.1$38.5 million used during the first sixthree months of 2018.2019. Included in the first sixthree months of 2020 was the $100.0 million termination fee associated with the acquisition of Anixter, as described in Note 4 of our Notes to the unaudited Condensed Consolidated Financial Statements. In the first quarter of 2019, were acquisitionwe made payments of $27.7 million.million to acquire Sylvania Lighting Solutions ("SLS"). Capital expenditures were $21.4$15.8 million for the sixthree month period ended June 30, 2019,March 31, 2020, compared to $16.4$10.8 million for the sixthree month period ended June 30, 2018. The first six months of 2018 also included other payments of $8.8 million for the purchase of a foreign financial instrument.March 31, 2019.
Financing Activities. Net cash provided by financing activities for the first sixthree months of 20192020 was $50.0$278.7 million, compared to $63.7$19.2 million used infor the first sixthree months of 2018.2019. During the first sixthree months of 2020, financing activities consisted of borrowings and repayments of $360.5 million and $260.5 million, respectively, related to our Revolving Credit Facility, as well as borrowings and repayments of $225.0 million and $40.0 million, respectively, related to our Receivables Facility. Financing activities for the first three months of 2020 also included net repayments related to our various international lines of credit of approximately $0.4 million.
During the first three months of 2019, financing activities consisted of borrowings and repayments of $473.5$253.7 million and $464.3$272.8 million, respectively, related to our Revolving Credit Facility, borrowings and repayments of $410.0$170.0 million and $190.0$105.0 million, respectively, related to our Receivables Facility, and repayments of $24.8 million to pay off our Term Loan Facility. Financing activities for the first sixthree months of 2019 also included borrowings andnet repayments onrelated to our various international lines of credit of approximately $34.9 million and $39.4 million, respectively. Additionally, financing activities for the first six months of 2019 included the repurchase of $152.7 million of the Company's common stock, of which $150.0 million was pursuant to an accelerated stock repurchase transaction under the share repurchase plan announced on December 13, 2017 and amended on October 31, 2018.
During the first six months of 2018, financing activities consisted of borrowings and repayments of $449.9 million and $458.9 million, respectively, related to our Revolving Credit Facility, borrowings and repayments of $345.0 million and $330.0 million, respectively, related to our Receivables Facility, and repayments of $60.0 million applied to our Term Loan Facility. Financing activities for the first six months of 2018 also included borrowings and repayments on our various international lines of credit of approximately $87.9 million and $85.8 million, respectively.$3.7 million.
Contractual Cash Obligations and Other Commercial Commitments
There were no material changes in our contractual obligations and other commercial commitments that would require an update to the disclosure provided in our 20182019 Annual Report on Form 10-K. Management believes that cash generated from operations, together with amounts available under our Revolving Credit Facility and the Receivables Facility, will be sufficient to meet our working capital, capital expenditures and other cash requirements for the foreseeable future. However, there can be no assurances that this will continue to be the case.
Inflation
The rate of inflation, as measured by changes in the producer price index, affects different commodities, the cost of products purchased and ultimately the pricing of our different products and product classes to our customers. For the sixthree months ended June 30, 2019,March 31, 2020, pricing related to inflation impacted our sales by approximately 2%less than 1%.
Seasonality
Our operating results are not significantly affected by seasonal factors. Sales during the first quarter are usually affected by a reduced level of activity. Sales during the second, third and fourth quarters are generally 65% to 8%7% higher than the first quarter. Sales typically increase beginning in March, with slight fluctuations per month through October. During periods of economic expansion or contraction, our sales by quarter have varied significantly from this pattern.

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Guarantor Financial Statements
WESCO Distribution (the “Issuer”) has outstanding $500 million in aggregate principal amount of 5.375% Senior Notes due 2021 (the “2021 Notes”) and $350 million in aggregate principal amount of 5.375% Senior Notes due 2024 (the “2024 Notes” and, together with the 2021 Notes, the “Notes”).
The Notes are unsecured senior obligations of WESCO Distribution and are fully and unconditionally guaranteed on a senior unsecured basis by WESCO International (the “Parent Guarantor”), ranking pari passu in right of payment with all other existing and future senior obligations of the Issuer, including obligations under other unsubordinated indebtedness. The Notes are effectively subordinated to all existing and future obligations of the Issuer that are secured by liens on any property or assets of the Issuer, including the Issuer’s Revolving Credit Facility and the then outstanding term loan facility (the ���Senior Secured Credit Facilities”), to the extent of the value of the collateral securing such obligations, and are structurally subordinated to all liabilities (including trade payables) of any of the Parent Guarantor’s or the Issuer’s subsidiaries (the “non-Guarantor Subsidiaries”) and senior in right of payment to all existing and future obligations of the Issuer that are, by their terms, subordinated in right of payment to the Notes.
The Notes are guaranteed by the Parent Guarantor and not by the non-Guarantor Subsidiaries. In the event of a bankruptcy, liquidation or reorganization of any of the non-Guarantor Subsidiaries, such non-Guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute or contribute, as the case may be, any of their assets to the Issuer or the Parent Guarantor. Therefore, the Notes and the guarantee of the Parent Guarantor (the “Parent Guarantee”) are effectively subordinated to the liabilities of the non-Guarantor Subsidiaries.
The Parent Guarantee constitutes a senior obligation of the Parent Guarantor, ranking pari passu in right of payment with all other senior obligations of the Parent Guarantor, including obligations under other unsubordinated indebtedness. The Parent Guarantee is effectively subordinated to all existing and future obligations incurred by the Parent Guarantor that are secured by liens on any property or assets of the Parent Guarantor, including the Senior Secured Credit Facilities, to the extent of the value of the collateral securing such obligations, structurally subordinated to all liabilities (including trade payables) of the non-Guarantor Subsidiaries and senior in right of payment to all existing and future obligations of the Parent Guarantor that are, by their terms, subordinated in right of payment to the Parent Guarantee.
The Parent Guarantor guarantees to each holder of the Notes and to the respective trustees (i) the due and punctual payment of the principal of, premium, if any, and interest on each Note, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal of and interest on the Notes, to the extent lawful, and the due and punctual payment of all other obligations and due and punctual performance of all obligations of the Issuer to the holders or the respective trustee all in accordance with the terms of the Notes and the indentures governing the Notes and (ii) in the case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, at stated maturity, by acceleration or otherwise.
If the Issuer becomes a debtor in a case under the U.S. Bankruptcy Code or encounter other financial difficulty, under federal or state fraudulent transfer law, a court may void, subordinate or otherwise decline to enforce the Notes. A court might do so if it is found that when the Issuer issued the Notes, or in some states when payments became due under the Notes, the Issuer received less than reasonably equivalent value or fair consideration and either: (i) were insolvent or rendered insolvent by reason of such incurrence; (ii) were left with inadequate capital to conduct its business; or (iii) believed or reasonably should have believed that the Issuer would incur debts beyond its ability to pay.
The court might also void an issuance of the Notes without regard to the above factors, if the court found that the Issuer issued the Notes with actual intent to hinder, delay or defraud its creditors. A court would likely find that the Issuer did not receive reasonably equivalent value or fair consideration for the Notes, if the Issuer did not substantially benefit directly or indirectly from the issuance of the Notes. If a court were to void the issuance of the Notes, holders would no longer have any claim against the Issuer. Sufficient funds to repay the Notes may not be available from other sources. In addition, the court might direct holders to repay any amounts that they already received from the Issuer.
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

The following tables present summarized financial information for WESCO International and WESCO Distribution on a combined basis after elimination of (i) intercompany transactions and balances among such entities and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor. The summarized financial information has been prepared in accordance with Rule 13-01 of Regulation S-X.
Summarized Balance Sheets
(In thousands of dollars)
(unaudited)
As of
March 31, 2020December 31, 2019
Assets
Current assets$845,631  $582,075  
Due from non-guarantor subsidiaries465,268  465,012  
Total current assets1,310,899  1,047,087  
Noncurrent assets515,326  484,552  
Total assets$1,826,225  $1,531,639  
Liabilities
Current liabilities$441,402  $445,075  
Due to non-guarantor subsidiaries3,296,996  3,133,326  
Total current liabilities3,738,398  3,578,401  
Noncurrent liabilities1,198,399  1,067,486  
Total liabilities$4,936,797  $4,645,887  

Summarized Statement of Income
(In thousands of dollars)
(unaudited)
Three Months Ended
March 31, 2020
Net sales(1)
$873,594 
Gross profit(1)
168,571 
Net income$285 
(1) Includes $8.9 million of net sales and cost of goods sold to non-guarantor subsidiaries.
Impact of Recently Issued Accounting Standards
See Note 2 of our Notes to Condensed Consolidated Financial Statements for information regarding the effect of new accounting pronouncements.
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


Forward-Looking Statements
From time to time in this report and in other written reports and oral statements, references are made to expectations regarding our future performance. When used in this context, the words “anticipates,” “plans,” “believes,” “estimates,” “intends,” “expects,” “projects,” “will” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain such words. Such statements including, but not limited to, our statements regarding business strategy, growth strategy, competitive strengths, productivity and profitability enhancement, competition, new product and service introductions and liquidity and capital resources are based on management’s beliefs, as well as on assumptions made by and information currently available to management, and involve various risks and uncertainties, some of which are beyond our control. In addition, forward-looking statements in this document include information regarding our proposed acquisition of Anixter, the potential effects of the pending acquisition on our business and operations prior to the consummation thereof, the effects on WESCO if the acquisition is not consummated, information regarding the combined operations and business of WESCO and Anixter following the acquisition, if consummated, and statements regarding the impact of natural disasters, health epidemics and other outbreaks, especially the outbreak of COVID-19 since December 2019, which may have a material adverse effect on WESCO's business. Our actual results could differ materially from those expressed in any forward-looking statement made by us or on our behalf. In light of these risks and uncertainties, there can be no assurance that the forward-looking information will in fact prove to be accurate. Certain of these risks are set forth in the WESCO International’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018,2019, as well as WESCO International’s other reports filed with the Securities and Exchange Commission.SEC. We have undertaken no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 3. Quantitative and Qualitative Disclosures about Market Risks.
There have not been any materialFor a discussion of changes to our exposures tothe market risk during the quarterly period ended June 30, 2019risks that would require an update to the relevant disclosures providedwere previously disclosed in our 20182019 Annual Report on Form 10-K.10-K, refer to Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations” and to Part II, Item 1A, "Risk Factors”.
Item 4. Controls and Procedures.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures and internal control over financial reporting were effective as of the end of the period covered by this report.
Effective January 1, 2019, we adopted ASU 2016-02, Leases, and all the related amendments. In connection with the adoption of this new lease standard, we modified certain processes and implemented internal controls related to leases. Except for the effect of adopting the new lease standard, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, a number of lawsuits and claims have been or may be asserted against us relating to the conduct of our business, including litigation relating to commercial, product and employment matters. The outcome of any litigation cannot be predicted with certainty, and some lawsuits may be determined adversely to us. However, management does not believe that the ultimate outcome of any such pending matters is likely to have a material adverse effect on our financial condition or liquidity, although the resolution in any fiscal period of one or more of these matters may have a material adverse effect on our results of operations for that period.
Item 1A. Risk Factors.
There have been no material changesThe following is an additional risk factor to the risk factorsthose previously disclosed in Item 1A. to Part 1 of WESCO’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.2019.
The following table sets forth all issuer purchasesCOVID-19 pandemic has adversely affected how we, our suppliers and our customers are operating our businesses, and the duration and extent to which it will affect our business, financial condition, results of commonoperations, cash flows, liquidity, and stock duringprice are uncertain.
In December 2019, a novel coronavirus disease (“COVID-19”) was reported in China, and on March 11, 2020, the three months ended June 30, 2019,World Health Organization declared COVID-19 a global pandemic. Governmental authorities around the world have implemented measures to reduce the spread of COVID-19, and this widespread health crisis is adversely affecting the broader economies, financial markets, workforces, our suppliers and customers, and the business environment.
We cannot be certain about the impact that COVID-19 will have on our business and operations going forward. The duration and extent of the impact from the COVID-19 pandemic depends on future developments for which there is significant uncertainty at this time, such as the severity and transmission rate of the virus, governmental, business and individuals' actions taken in response, the extent and effectiveness of containment actions, restrictions or disruptions to transportation, including those made pursuantreduced availability of ground or air transport, the impact of these and other factors on our employees, including disruptions to publicly announced plansour operations resulting from the illness of any of our employees, the impact of these and other factors on our ability to sell and provide our products and services, including as a result of travel restrictions and people working from home, the effect on our suppliers and disruptions to the global supply chain, the effect on our customers and their demand for our products and services and ability to pay for them, and any closures of our and our suppliers’ and customers’ facilities. While we are supporting essential businesses and have not had to close our facilities for extended periods of time as of the date of this filing, there is significant uncertainty about what steps we may need to take in response to the pandemic in the future. We have taken actions to reduce costs and cash expenditures, including reductions in administrative expenses, payroll and benefits, capital expenditures, and other costs, and further steps may become necessary in the future. We have also drawn against our credit facilities as a precautionary measure to increase our cash position and preserve financial flexibility in light of the current uncertainty. Due to the uncertainty of COVID-19, we will continue to assess the situation, including the impact of governmental regulations that might be imposed in response to the pandemic. In addition, the impact of COVID-19 on macroeconomic conditions may impact the proper functioning of financial and capital markets, foreign currency exchange rates, commodity and energy prices, and interest rates. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or programs:depression that has occurred or may occur in the future.
Any of these events could materially adversely affect our business, financial condition, results of operations, cash flows, liquidity and stock price, and could also have the effect of heightening the other risks described in “Risk Factors” under Item 1A and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” under Item 7 of our Annual Report on Form 10-K, filed with the SEC on February 24, 2020, including Operational Risks, Financial Risks, Regulatory and Legal Risks, and Risks Related to Our Pending Acquisition of Anixter, as well as in subsequent SEC filings.

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Period 
Total Number of Shares Purchased (2)
 Average Price Paid Per Share 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
 
Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (2) (3)
      (In Millions)
April 1 – April 30, 2019 939
 $55.97
 
 $275.0
May 1 – May 31, 2019 2,395,036
 $53.24
 2,394,816
 $125.0
June 1 – June 30, 2019 1,889
 $49.67
 
 $125.0
Total 2,397,864
 $53.24
 2,394,816
  
(1)
There were 3,048 shares purchased in the period that were not part of the publicly announced share repurchase program. These shares were surrendered by stock-based compensation plan participants to satisfy tax withholding obligations arising from the exercise of stock-settled stock appreciation rights and vesting of restricted stock units.
(2)
On December 13, 2017, WESCO announced that its Board of Directors approved, on December 7, 2017, the repurchase of up to $300 million of the Company's common stock through December 31, 2020. On October 31, 2018, the Company's Board of Directors approved an increase to the authorization from $300 million to $400 million.
(3)
This amount represents the remaining authorization under the Company's share repurchase program that is available to repurchase shares of the Company's common stock. Due to the nature of accelerated share repurchases, the Company receives a certain percentage of shares immediately upon an up-front payment of cash. The remaining shares are delivered by the respective counterparty at the end of the valuation period. The amount authorized under the Company’s share repurchase program was reduced at the time of the up-front cash payment.


WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


Item 6. Exhibits.
(a)Exhibits
(31) Rule 13a-14(a)/15d-14(a) Certifications
(1) Certification of Chief Executive Officer pursuant to Rules 13a-14(a) promulgated under the Exchange Act.
(2) Certification of Chief Financial Officer pursuant to Rules 13a-14(a) promulgated under the Exchange Act.
(32) Section 1350 Certifications
(1) Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(2) Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS XBRL Instance Document.
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.





104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


WESCO International, Inc.
(Registrant)

August 2, 2019May 1, 2020By:/s/ David S. Schulz
(Date)David S. Schulz
Senior Vice President and Chief Financial Officer



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