OTHER FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2013 |
Condensed Financial Information [Abstract] | |
OTHER FINANCIAL INFORMATION | OTHER FINANCIAL INFORMATION |
WESCO International, Inc. ("WESCO International") has outstanding $344.9 million in aggregate principal amount of 2029 Debentures. The 2029 Debentures are fully and unconditionally guaranteed by WESCO Distribution, Inc. ("WESCO Distribution"), a 100% owned subsidiary of WESCO International, on a senior subordinated basis to all existing and future senior indebtedness of WESCO Distribution. |
Condensed consolidating financial information for WESCO International, WESCO Distribution and the non-guarantor subsidiaries is as follows: |
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING BALANCE SHEETS |
(unaudited) |
| | | | | | | | | | | | | | | | | | | |
| September 30, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Cash and cash equivalents | $ | — | | | $ | 45,838 | | | $ | 52,737 | | | $ | — | | | $ | 98,575 | |
|
Trade accounts receivable, net | — | | | — | | | 1,116,007 | | | — | | | 1,116,007 | |
|
Inventories, net | — | | | 347,319 | | | 448,598 | | | — | | | 795,917 | |
|
Other current assets | — | | | 93,993 | | | 114,178 | | | — | | | 208,171 | |
|
Total current assets | — | | | 487,150 | | | 1,731,520 | | | — | | | 2,218,670 | |
|
Intercompany receivables, net | — | | | — | | | 1,829,020 | | | (1,829,020 | ) | | — | |
|
Property, buildings and equipment, net | — | | | 59,135 | | | 142,770 | | | — | | | 201,905 | |
|
Intangible assets, net | — | | | 5,538 | | | 452,083 | | | — | | | 457,621 | |
|
Goodwill | — | | | 246,125 | | | 1,516,206 | | | — | | | 1,762,331 | |
|
Investments in affiliates | 3,107,052 | | | 3,705,286 | | | — | | | (6,812,338 | ) | | — | |
|
Other noncurrent assets | 4,431 | | | 15,591 | | | 18,922 | | | — | | | 38,944 | |
|
Total assets | $ | 3,111,483 | | | $ | 4,518,825 | | | $ | 5,690,521 | | | $ | (8,641,358 | ) | | $ | 4,679,471 | |
|
| | | | | | | | | |
Accounts payable | $ | — | | | $ | 413,738 | | | $ | 340,275 | | | $ | — | | | $ | 754,013 | |
|
Short-term debt | — | | | — | | | 32,428 | | | — | | | 32,428 | |
|
Other current liabilities | 998 | | | 123,014 | | | 126,358 | | | — | | | 250,370 | |
|
Total current liabilities | 998 | | | 536,752 | | | 499,061 | | | — | | | 1,036,811 | |
|
Intercompany payables, net | 1,170,739 | | | 658,281 | | | — | | | (1,829,020 | ) | | — | |
|
Long-term debt | 173,374 | | | 715,221 | | | 646,869 | | | — | | | 1,535,464 | |
|
Other noncurrent liabilities | 28,067 | | | 202,545 | | | 138,259 | | | — | | | 368,871 | |
|
Total WESCO International Stockholders' Equity | 1,738,305 | | | 2,406,026 | | | 4,406,312 | | | (6,812,338 | ) | | 1,738,305 | |
|
Noncontrolling interest | — | | | — | | | 20 | | | — | | | 20 | |
|
Total liabilities and stockholders’ equity | $ | 3,111,483 | | | $ | 4,518,825 | | | $ | 5,690,521 | | | $ | (8,641,358 | ) | | $ | 4,679,471 | |
|
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING BALANCE SHEETS |
(unaudited) |
| | | | | | | | | | | | | | | | | | | |
| December 31, 2012 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Cash and cash equivalents | $ | — | | | $ | 52,275 | | | $ | 33,824 | | | $ | — | | | $ | 86,099 | |
|
Trade accounts receivable, net | — | | | — | | | 1,036,235 | | | — | | | 1,036,235 | |
|
Inventories, net | — | | | 347,008 | | | 446,966 | | | — | | | 793,974 | |
|
Other current assets | — | | | 66,107 | | | 118,404 | | | 1,018 | | | 185,529 | |
|
Total current assets | — | | | 465,390 | | | 1,635,429 | | | 1,018 | | | 2,101,837 | |
|
Intercompany receivables, net | — | | | — | | | 1,756,898 | | | (1,756,898 | ) | | — | |
|
Property, buildings and equipment, net | — | | | 58,523 | | | 152,200 | | | — | | | 210,723 | |
|
Intangible assets, net | — | | | 6,153 | | | 490,608 | | | — | | | 496,761 | |
|
Goodwill | — | | | 246,125 | | | 1,531,672 | | | — | | | 1,777,797 | |
|
Investments in affiliates | 2,918,779 | | | 3,590,772 | | | — | | | (6,509,551 | ) | | — | |
|
Other noncurrent assets | 4,671 | | | 16,842 | | | 19,656 | | | 1,342 | | | 42,511 | |
|
Total assets | $ | 2,923,450 | | | $ | 4,383,805 | | | $ | 5,586,463 | | | $ | (8,264,089 | ) | | $ | 4,629,629 | |
|
| | | | | | | | | |
Accounts payable | $ | — | | | $ | 401,016 | | | $ | 305,564 | | | $ | — | | | $ | 706,580 | |
|
Short-term debt | — | | | — | | | 30,136 | | | — | | | 30,136 | |
|
Other current liabilities | 16,779 | | | 100,956 | | | 152,526 | | | 1,018 | | | 271,279 | |
|
Total current liabilities | 16,779 | | | 501,972 | | | 488,226 | | | 1,018 | | | 1,007,995 | |
|
Intercompany payables, net | 1,153,562 | | | 603,336 | | | — | | | (1,756,898 | ) | | — | |
|
Long-term debt | 171,213 | | | 847,761 | | | 676,439 | | | — | | | 1,695,413 | |
|
Other noncurrent liabilities | 28,099 | | | 190,294 | | | 152,795 | | | 1,342 | | | 372,530 | |
|
Total WESCO International Stockholders' Equity | 1,553,797 | | | 2,240,442 | | | 4,269,109 | | | (6,509,551 | ) | | 1,553,797 | |
|
Noncontrolling interest | — | | | — | | | (106 | ) | | — | | | (106 | ) |
|
Total liabilities and stockholders’ equity | $ | 2,923,450 | | | $ | 4,383,805 | | | $ | 5,586,463 | | | $ | (8,264,089 | ) | | $ | 4,629,629 | |
|
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 878,851 | | | $ | 1,082,585 | | | $ | (30,176 | ) | | $ | 1,931,260 | |
|
Cost of goods sold | — | | | 698,965 | | | 866,820 | | | (30,176 | ) | | 1,535,609 | |
|
Selling, general and administrative expenses | 19 | | | 129,518 | | | 125,665 | | | — | | | 255,202 | |
|
Depreciation and amortization | — | | | 4,668 | | | 12,135 | | | — | | | 16,803 | |
|
Results of affiliates’ operations | 73,241 | | | 58,574 | | | — | | | (131,815 | ) | | — | |
|
Interest expense, net | 5,944 | | | 18,823 | | | (3,463 | ) | | — | | | 21,304 | |
|
Loss on sale of Argentina business | — | | | — | | | 2,315 | | | — | | | 2,315 | |
|
Provision for income taxes | (1,840 | ) | | 19,856 | | | 12,893 | | | — | | | 30,909 | |
|
Net income (loss) | 69,118 | | | 65,595 | | | 66,220 | | | (131,815 | ) | | 69,118 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | (44 | ) | | — | | | (44 | ) |
|
Net income (loss) attributable to WESCO International, Inc. | $ | 69,118 | | | $ | 65,595 | | | $ | 66,264 | | | $ | (131,815 | ) | | $ | 69,162 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | 24,619 | | | 24,619 | | | 24,619 | | | (49,238 | ) | | 24,619 | |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 93,737 | | | $ | 90,214 | | | $ | 90,883 | | | $ | (181,053 | ) | | $ | 93,781 | |
|
|
|
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2012 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 868,289 | | | $ | 818,213 | | | $ | (30,316 | ) | | $ | 1,656,186 | |
|
Cost of goods sold | — | | | 689,462 | | | 658,286 | | | (30,316 | ) | | 1,317,432 | |
|
Selling, general and administrative expenses | 25 | | | 121,067 | | | 104,720 | | | — | | | 225,812 | |
|
Depreciation and amortization | — | | | 3,979 | | | 5,931 | | | — | | | 9,910 | |
|
Results of affiliates’ operations | 68,055 | | | 34,887 | | | — | | | (102,942 | ) | | — | |
|
Interest expense, net | 6,623 | | | 11,886 | | | (5,855 | ) | | — | | | 12,654 | |
|
Provision for income taxes | (1,984 | ) | | 16,248 | | | 12,723 | | | — | | | 26,987 | |
|
Net income (loss) | 63,391 | | | 60,534 | | | 42,408 | | | (102,942 | ) | | 63,391 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | (24 | ) | | — | | | (24 | ) |
|
Net income (loss) attributable to WESCO International, Inc. | $ | 63,391 | | | $ | 60,534 | | | $ | 42,432 | | | $ | (102,942 | ) | | $ | 63,415 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | 10,652 | | | 10,652 | | | 10,652 | | | (21,304 | ) | | 10,652 | |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 74,043 | | | $ | 71,186 | | | $ | 53,084 | | | $ | (124,246 | ) | | $ | 74,067 | |
|
|
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
(unaudited) |
| | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 2,572,693 | | | $ | 3,154,350 | | | $ | (93,772 | ) | | $ | 5,633,271 | |
|
Cost of goods sold | — | | | 2,047,937 | | | 2,509,826 | | | (93,772 | ) | | 4,463,991 | |
|
Selling, general and administrative expenses | 24 | | | 368,853 | | | 379,287 | | | — | | | 748,164 | |
|
Depreciation and amortization | — | | | 13,551 | | | 37,122 | | | — | | | 50,673 | |
|
Results of affiliates’ operations | 231,481 | | | 157,726 | | | — | | | (389,207 | ) | | — | |
|
Interest expense, net | 17,893 | | | 56,667 | | | (9,561 | ) | | — | | | 64,999 | |
|
Loss on sale of Argentina business | — | | | — | | | 2,315 | | | — | | | 2,315 | |
|
Provision for income taxes | (4,998 | ) | | 34,617 | | | 54,948 | | | — | | | 84,567 | |
|
Net income (loss) | 218,562 | | | 208,794 | | | 180,413 | | | (389,207 | ) | | 218,562 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | 126 | | | — | | | 126 | |
|
Net income (loss) attributable to WESCO International, Inc. | $ | 218,562 | | | $ | 208,794 | | | $ | 180,287 | | | $ | (389,207 | ) | | $ | 218,436 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | (43,211 | ) | | (43,211 | ) | | (43,211 | ) | | 86,422 | | | (43,211 | ) |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 175,351 | | | $ | 165,583 | | | $ | 137,076 | | | $ | (302,785 | ) | | $ | 175,225 | |
|
|
|
| | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2012 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 2,602,688 | | | $ | 2,432,239 | | | $ | (99,989 | ) | | $ | 4,934,938 | |
|
Cost of goods sold | — | | | 2,074,165 | | | 1,966,586 | | | (99,989 | ) | | 3,940,762 | |
|
Selling, general and administrative expenses | 49 | | | 413,540 | | | 271,541 | | | — | | | 685,130 | |
|
Depreciation and amortization | — | | | 11,232 | | | 15,199 | | | — | | | 26,431 | |
|
Results of affiliates’ operations | 187,903 | | | 122,064 | | | — | | | (309,967 | ) | | — | |
|
Interest expense, net | 17,944 | | | 32,200 | | | (17,051 | ) | | — | | | 33,093 | |
|
Provision for income taxes | (5,353 | ) | | 27,739 | | | 51,873 | | | — | | | 74,259 | |
|
Net income (loss) | 175,263 | | | 165,876 | | | 144,091 | | | (309,967 | ) | | 175,263 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | (4 | ) | | — | | | (4 | ) |
|
Net income (loss) attributable to WESCO International, Inc. | $ | 175,263 | | | $ | 165,876 | | | $ | 144,095 | | | $ | (309,967 | ) | | $ | 175,267 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | 14,297 | | | 14,297 | | | 14,297 | | | (28,594 | ) | | 14,297 | |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 189,560 | | | $ | 180,173 | | | $ | 158,392 | | | $ | (338,561 | ) | | $ | 189,564 | |
|
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and Eliminating |
Inc. | Inc. | | Entries |
Net cash (used) provided by operating activities | $ | (14,515 | ) | | $ | 163,190 | | | $ | 30,994 | | | $ | — | | | $ | 179,669 | |
|
Investing activities: | | | | | | | | | |
|
Capital expenditures | — | | | (16,421 | ) | | (4,051 | ) | | — | | | (20,472 | ) |
|
Acquisition payments | — | | | — | | | — | | | — | | | — | |
|
Proceeds from sale of assets | — | | | — | | | 10,481 | | | — | | | 10,481 | |
|
Other | | | | (17,176 | ) | | (1,205 | ) | | 17,176 | | | (1,205 | ) |
|
Net cash (used) provided by investing activities | — | | | (33,597 | ) | | 5,225 | | | 17,176 | | | (11,196 | ) |
|
Financing activities: | | | | | | | | | |
Borrowings | 17,176 | | | 508,213 | | | 294,229 | | | (17,176 | ) | | 802,442 | |
|
Repayments | | | | (640,713 | ) | | (308,657 | ) | | | | | (949,370 | ) |
|
Other | (2,661 | ) | | (3,530 | ) | | (1,401 | ) | | — | | | (7,592 | ) |
|
Net cash provided (used) by financing activities | 14,515 | | | (136,030 | ) | | (15,829 | ) | | (17,176 | ) | | (154,520 | ) |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | (1,477 | ) | | — | | | (1,477 | ) |
|
Net change in cash and cash equivalents | — | | | (6,437 | ) | | 18,913 | | | — | | | 12,476 | |
|
Cash and cash equivalents at the beginning of year | — | | | 52,275 | | | 33,824 | | | — | | | 86,099 | |
|
Cash and cash equivalents at the end of period | $ | — | | | $ | 45,838 | | | $ | 52,737 | | | $ | — | | | $ | 98,575 | |
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2012 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and Eliminating |
Inc. | Inc. | | Entries |
Net cash (used) provided by operating activities | $ | (3,020 | ) | | $ | 272,123 | | | $ | (79,420 | ) | | $ | — | | | $ | 189,683 | |
|
Investing activities: | | | | | | | | | |
|
Capital expenditures | — | | | (15,654 | ) | | (3,815 | ) | | — | | | (19,469 | ) |
|
Acquisition payments | — | | | (142,483 | ) | | (58,640 | ) | | — | | | (201,123 | ) |
|
Proceeds from sale of assets | — | | | 51 | | | — | | | — | | | 51 | |
|
Other | — | | | (64,129 | ) | | — | | | 64,129 | | | — | |
|
Net cash used in investing activities | — | | | (222,215 | ) | | (62,455 | ) | | 64,129 | | | (220,541 | ) |
|
Financing activities: | | | | | | | | | |
Borrowings | 5,489 | | | 177,300 | | | 643,178 | | | (64,129 | ) | | 761,838 | |
|
Repayments | — | | | (204,300 | ) | | (489,031 | ) | | — | | | (693,331 | ) |
|
Other | (2,469 | ) | | 8,353 | | | — | | | — | | | 5,884 | |
|
Net cash provided (used) by financing activities | 3,020 | | | (18,647 | ) | | 154,147 | | | (64,129 | ) | | 74,391 | |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | 235 | | | — | | | 235 | |
|
Net change in cash and cash equivalents | — | | | 31,261 | | | 12,507 | | | — | | | 43,768 | |
|
Cash and cash equivalents at the beginning of year | — | | | 44,412 | | | 19,457 | | | — | | | 63,869 | |
|
Cash and cash equivalents at the end of period | $ | — | | | $ | 75,673 | | | $ | 31,964 | | | $ | — | | | $ | 107,637 | |
|
|
The Company revised its condensed consolidating balance sheet as of December 31, 2012 to include WESCO Finance Corporation ("WESCO Finance"), a subsidiary of WESCO International, as a non-guarantor subsidiary. Previously, WESCO Finance was included in the WESCO International column of the Company's condensed consolidating balance sheets. In doing so, the Company recorded the $480.2 million investment in WESCO Finance as an increase in investments in affiliates, with an offsetting increase in intercompany payables, net. The Company increased intercompany receivables, net by $679.9 million with a corresponding increase in stockholders' equity of non-guarantor subsidiaries to record WESCO Finance as a non-guarantor subsidiary. Additionally, the Company recorded the cumulative accrued interest payable of $198.1 million related to an intercompany loan between WESCO Distribution and WESCO Finance by adjusting the stockholders' equity of WESCO Distribution at December 31, 2012 with a corresponding increase in intercompany payables, net. The Company also decreased non-current liabilities of WESCO International by $1.6 million with a corresponding increase to intercompany payable, net at December 31, 2012. The Company made additional immaterial revisions related to other intercompany transactions in the condensed consolidating balance sheet at December 31, 2012. |
|
The Company revised its condensed consolidating statements of income and comprehensive income for the three month and nine month periods ended September 30, 2012. The Company revised net sales related to intercompany sales eliminations by increasing net sales of non-guarantor subsidiaries by $2.0 million and decreasing net sales in consolidating and eliminated entries for the same amount for the three month period ending September 30, 2012. The Company revised interest expense related to intercompany borrowings increasing interest expense of WESCO International by $0.5 million and $0.5 million, increasing interest expense of WESCO Distribution by $8.2 million and $24.5 million and decreasing interest expense of non-guarantor subsidiaries by $8.7 million and $25.0 million for the three and nine month periods ending September 30, 2012. In addition, the Company revised its methodology for allocating income tax expense during interim reporting periods, resulting in a decrease in income tax expense of WESCO International by $2.0 million and $5.4 million, a decrease in income tax expense of WESCO Distribution by $8.4 million and $40.0 million and an increase in income tax expense of non-guarantor subsidiaries by $10.4 million and $45.4 million for the three and nine month periods ending September 30, 2012, respectively. |
The Company revised its condensed statement of cash flows to present cash paid for acquisitions of $58.6 million for the nine months ended September 30, 2012 as intercompany loans to non-guarantor subsidiaries. These payments represent acquisitions made by the non-guarantor subsidiaries that were funded by WESCO Distribution. Such transactions have now been revised to reflect an investing cash outflow and a corresponding intercompany borrowing from WESCO Distribution as a financing cash inflow in the statement of cash flows of the non-guarantor subsidiaries. Additionally, the revised statements present proceeds from issuance of debt and repayments of debt along with properly classifying debt between WESCO Distribution (proceeds of $177.3 million and repayments of $204.3 million) and non-guarantor subsidiaries (proceeds of $643.2 million and repayments of $489.0 million). Lastly, the Company revised its condensed consolidating statement of cash flows to reflect a $5.5 million advance from WESCO Distribution to WESCO International. |
The impact of the revisions noted above, which the Company has determined is not material to the consolidated financial statements taken as a whole, did not have any impact on the consolidated amounts previously reported, nor did they impact the Company's obligations under the 2029 Debentures. The prior period condensed consolidating financial statements will be similarly revised as the information is presented in the Company's annual Form 10-K filing for 2013 and first quarter Form 10-Q filing for 2014. |