OTHER FINANCIAL INFORMATION | 3 Months Ended |
Mar. 31, 2014 |
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, a 100% owned subsidiary of WESCO International, on a senior subordinated basis to all existing and future senior indebtedness of WESCO Distribution. |
WESCO Distribution has $500 million aggregate principal amount of 2021 Notes. The 2021 Notes are unsecured senior obligations of WESCO Distribution and are guaranteed on a senior unsecured basis by WESCO International. |
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) |
| | | | | | | | | | | | | | | | | | | |
| March 31, 2014 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Cash and cash equivalents | $ | — | | | $ | 47,452 | | | $ | 48,904 | | | $ | — | | | $ | 96,356 | |
|
Trade accounts receivable, net | — | | | — | | | 1,105,297 | | | — | | | 1,105,297 | |
|
Inventories, net | — | | | 357,462 | | | 453,633 | | | — | | | 811,095 | |
|
Other current assets | — | | | 161,965 | | | 130,543 | | | (45,357 | ) | | 247,151 | |
|
Total current assets | — | | | 566,879 | | | 1,738,377 | | | (45,357 | ) | | 2,259,899 | |
|
Intercompany receivables, net | — | | | — | | | 1,880,905 | | | (1,880,905 | ) | | — | |
|
Property, buildings and equipment, net | — | | | 58,064 | | | 137,199 | | | — | | | 195,263 | |
|
Intangible assets, net | — | | | 5,238 | | | 443,942 | | | — | | | 449,180 | |
|
Goodwill | — | | | 246,771 | | | 1,505,341 | | | — | | | 1,752,112 | |
|
Investments in affiliates | 3,147,129 | | | 3,717,115 | | | — | | | (6,864,244 | ) | | — | |
|
Other noncurrent assets | 4,291 | | | 15,013 | | | 35,311 | | | — | | | 54,615 | |
|
Total assets | $ | 3,151,420 | | | $ | 4,609,080 | | | $ | 5,741,075 | | | $ | (8,790,506 | ) | | $ | 4,711,069 | |
|
| | | | | | | | | |
Accounts payable | $ | — | | | $ | 444,869 | | | $ | 336,950 | | | $ | — | | | $ | 781,819 | |
|
Short-term debt | — | | | — | | | 42,722 | | | — | | | 42,722 | |
|
Other current liabilities | 8,159 | | | 110,151 | | | 188,678 | | | (45,357 | ) | | 261,631 | |
|
Total current liabilities | 8,159 | | | 555,020 | | | 568,350 | | | (45,357 | ) | | 1,086,172 | |
|
Intercompany payables, net | 1,173,676 | | | 707,229 | | | — | | | (1,880,905 | ) | | — | |
|
Long-term debt | 174,974 | | | 675,186 | | | 607,426 | | | — | | | 1,457,586 | |
|
Other noncurrent liabilities | 20,984 | | | 229,891 | | | 142,877 | | | — | | | 393,752 | |
|
Total WESCO International stockholders' equity | 1,773,627 | | | 2,441,754 | | | 4,422,490 | | | (6,864,244 | ) | | 1,773,627 | |
|
Noncontrolling interest | — | | | — | | | (68 | ) | | — | | | (68 | ) |
|
Total liabilities and stockholders’ equity | $ | 3,151,420 | | | $ | 4,609,080 | | | $ | 5,741,075 | | | $ | (8,790,506 | ) | | $ | 4,711,069 | |
|
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING BALANCE SHEETS |
(unaudited) |
| | | | | | | | | | | | | | | | | | | |
| December 31, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Cash and cash equivalents | $ | — | | | $ | 31,695 | | | $ | 92,030 | | | $ | — | | | $ | 123,725 | |
|
Trade accounts receivable, net | — | | | — | | | 1,045,054 | | | — | | | 1,045,054 | |
|
Inventories, net | — | | | 351,242 | | | 436,082 | | | — | | | 787,324 | |
|
Other current assets | 22 | | | 166,540 | | | 127,439 | | | (44,489 | ) | | 249,512 | |
|
Total current assets | 22 | | | 549,477 | | | 1,700,605 | | | (44,489 | ) | | 2,205,615 | |
|
Intercompany receivables, net | — | | | — | | | 1,906,785 | | | (1,906,785 | ) | | — | |
|
Property, buildings and equipment, net | — | | | 59,569 | | | 139,085 | | | — | | | 198,654 | |
|
Intangible assets, net | — | | | 5,404 | | | 433,763 | | | — | | | 439,167 | |
|
Goodwill | — | | | 246,125 | | | 1,488,266 | | | — | | | 1,734,391 | |
|
Investments in affiliates | 3,137,418 | | | 3,722,902 | | | — | | | (6,860,320 | ) | | — | |
|
Other noncurrent assets | 4,361 | | | 15,627 | | | 51,078 | | | — | | | 71,066 | |
|
Total assets | $ | 3,141,801 | | | $ | 4,599,104 | | | $ | 5,719,582 | | | $ | (8,811,594 | ) | | $ | 4,648,893 | |
|
| | | | | | | | | |
Accounts payable | $ | — | | | $ | 410,017 | | | $ | 325,080 | | | $ | — | | | $ | 735,097 | |
|
Short-term debt | — | | | — | | | 37,551 | | | — | | | 37,551 | |
|
Other current liabilities | 11,920 | | | 114,894 | | | 196,690 | | | (44,489 | ) | | 279,015 | |
|
Total current liabilities | 11,920 | | | 524,911 | | | 559,321 | | | (44,489 | ) | | 1,051,663 | |
|
Intercompany payables, net | 1,168,507 | | | 738,278 | | | — | | | (1,906,785 | ) | | — | |
|
Long-term debt | 174,149 | | | 675,424 | | | 598,061 | | | — | | | 1,447,634 | |
|
Other noncurrent liabilities | 22,416 | | | 220,650 | | | 141,739 | | | — | | | 384,805 | |
|
Total WESCO International stockholders' equity | 1,764,809 | | | 2,439,841 | | | 4,420,479 | | | (6,860,320 | ) | | 1,764,809 | |
|
Noncontrolling interest | — | | | — | | | (18 | ) | | — | | | (18 | ) |
|
Total liabilities and stockholders’ equity | $ | 3,141,801 | | | $ | 4,599,104 | | | $ | 5,719,582 | | | $ | (8,811,594 | ) | | $ | 4,648,893 | |
|
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2014 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 829,471 | | | $ | 1,007,453 | | | $ | (26,099 | ) | | $ | 1,810,825 | |
|
Cost of goods sold | — | | | 658,584 | | | 803,547 | | | (26,099 | ) | | 1,436,032 | |
|
Selling, general and administrative expenses | — | | | 136,680 | | | 128,782 | | | — | | | 265,462 | |
|
Depreciation and amortization | — | | | 4,700 | | | 11,672 | | | — | | | 16,372 | |
|
Results of affiliates’ operations | 56,210 | | | 40,713 | | | — | | | (96,923 | ) | | — | |
|
Interest expense, net | 6,070 | | | 18,761 | | | (4,143 | ) | | — | | | 20,688 | |
|
Provision for income taxes | (1,715 | ) | | 3,047 | | | 19,084 | | | — | | | 20,416 | |
|
Net income | 51,855 | | | 48,412 | | | 48,511 | | | (96,923 | ) | | 51,855 | |
|
Less: Net loss attributable to noncontrolling interest | — | | | — | | | (50 | ) | | — | | | (50 | ) |
|
Net income attributable to WESCO International, Inc. | $ | 51,855 | | | $ | 48,412 | | | $ | 48,561 | | | $ | (96,923 | ) | | $ | 51,905 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | (46,500 | ) | | (46,500 | ) | | (46,500 | ) | | 93,000 | | | (46,500 | ) |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 5,355 | | | $ | 1,912 | | | $ | 2,061 | | | $ | (3,923 | ) | | $ | 5,405 | |
|
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| | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 820,235 | | | $ | 1,018,864 | | | $ | (31,040 | ) | | $ | 1,808,059 | |
|
Cost of goods sold | — | | | 650,127 | | | 807,892 | | | (31,040 | ) | | 1,426,979 | |
|
Selling, general and administrative expenses | 4 | | | 100,517 | | | 126,935 | | | — | | | 227,456 | |
|
Depreciation and amortization | — | | | 4,103 | | | 12,614 | | | — | | | 16,717 | |
|
Results of affiliates’ operations | 88,453 | | | 46,453 | | | — | | | (134,906 | ) | | — | |
|
Interest expense, net | 5,955 | | | 18,726 | | | (2,755 | ) | | — | | | 21,926 | |
|
Provision for income taxes | (1,600 | ) | | 12,242 | | | 20,245 | | | — | | | 30,887 | |
|
Net income | 84,094 | | | 80,973 | | | 53,933 | | | (134,906 | ) | | 84,094 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | 105 | | | — | | | 105 | |
|
Net income attributable to WESCO International, Inc. | $ | 84,094 | | | $ | 80,973 | | | $ | 53,828 | | | $ | (134,906 | ) | | $ | 83,989 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | (23,481 | ) | | (23,481 | ) | | (23,481 | ) | | 46,962 | | | (23,481 | ) |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 60,613 | | | $ | 57,492 | | | $ | 30,347 | | | $ | (87,944 | ) | | $ | 60,508 | |
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2014 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and Eliminating |
Inc. | Inc. | | Entries |
Net cash (used) provided by operating activities | $ | (4,871 | ) | | $ | 20,415 | | | $ | 31,169 | | | $ | — | | | $ | 46,713 | |
|
Investing activities: | | | | | | | | | |
|
Capital expenditures | — | | | (3,347 | ) | | (1,665 | ) | | — | | | (5,012 | ) |
|
Acquisition payments | — | | | — | | | (91,187 | ) | | — | | | (91,187 | ) |
|
Other | | | | (5,169 | ) | | 39 | | | 5,169 | | | 39 | |
|
Net cash used in investing activities | — | | | (8,516 | ) | | (92,813 | ) | | 5,169 | | | (96,160 | ) |
|
Financing activities: | | | | | | | | | |
Borrowings | 5,168 | | | 307,851 | | | 115,575 | | | (5,169 | ) | | 423,425 | |
|
Repayments | — | | | (307,851 | ) | | (95,592 | ) | | | | | (403,443 | ) |
|
Other | (297 | ) | | 3,858 | | | (4 | ) | | — | | | 3,557 | |
|
Net cash provided by financing activities | 4,871 | | | 3,858 | | | 19,979 | | | (5,169 | ) | | 23,539 | |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | (1,461 | ) | | — | | | (1,461 | ) |
|
Net change in cash and cash equivalents | — | | | 15,757 | | | (43,126 | ) | | — | | | (27,369 | ) |
|
Cash and cash equivalents at the beginning of year | — | | | 31,695 | | | 92,030 | | | — | | | 123,725 | |
|
Cash and cash equivalents at the end of period | $ | — | | | $ | 47,452 | | | $ | 48,904 | | | $ | — | | | $ | 96,356 | |
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
(unaudited) |
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| | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and Eliminating |
Inc. | Inc. | | Entries |
Net cash (used) provided by operating activities | $ | (15,594 | ) | | $ | 38,857 | | | $ | 57,130 | | | $ | — | | | $ | 80,393 | |
|
Investing activities: | | | | | | | | | |
|
Capital expenditures | — | | | (5,300 | ) | | (674 | ) | | — | | | (5,974 | ) |
|
Acquisition payments | — | | | — | | | — | | | — | | | — | |
|
Other | — | | | (16,291 | ) | | 4,944 | | | 16,291 | | | 4,944 | |
|
Net cash (used) provided by investing activities | — | | | (21,591 | ) | | 4,270 | | | 16,291 | | | (1,030 | ) |
|
Financing activities: | | | | | | | | | |
Borrowings | 16,291 | | | 176,922 | | | 105,093 | | | (16,291 | ) | | 282,015 | |
|
Repayments | — | | | (188,922 | ) | | (144,634 | ) | | — | | | (333,556 | ) |
|
Other | (697 | ) | | 3,660 | | | (492 | ) | | — | | | 2,471 | |
|
Net cash provided (used) by financing activities | 15,594 | | | (8,340 | ) | | (40,033 | ) | | (16,291 | ) | | (49,070 | ) |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | 399 | | | — | | | 399 | |
|
Net change in cash and cash equivalents | — | | | 8,926 | | | 21,766 | | | — | | | 30,692 | |
|
Cash and cash equivalents at the beginning of year | — | | | 52,275 | | | 33,824 | | | — | | | 86,099 | |
|
Cash and cash equivalents at the end of period | $ | — | | | $ | 61,201 | | | $ | 55,590 | | | $ | — | | | $ | 116,791 | |
|
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The Company revised its condensed consolidating balance sheet as of December 31, 2013 to properly reflect balance sheet positions of the Company's tax-paying entities and to conform with the current period's financial statement presentation. Specifically, other assets and deferred income taxes of non-guarantor subsidiaries each increased by $24.7 million at December 31, 2013. Additionally, prepaid expenses and other current assets of non-guarantor subsidiaries increased by $7.1 million, with a corresponding increase in other current liabilities of non-guarantor subsidiaries of $7.1 million at December 31, 2013. |
The Company revised its condensed consolidating statements of income and comprehensive income for interest expense related to intercompany borrowings, increasing interest expense of WESCO Distribution by $6.4 million and decreasing interest expense of non-guarantor subsidiaries by $6.4 million for the period ended March 31, 2013. 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 $1.6 million, a decrease in income tax expense of WESCO Distribution by $17.1 million and an increase in income tax expense of non-guarantor subsidiaries by $18.7 million for the period ended March 31, 2013. |
|
The Company revised its condensed statement of cash flows for the period ended March 31, 2013 to reflect a $1.6 million advance from WESCO Distribution to WESCO International. |
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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. |