OTHER FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 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, 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. |
WESCO Distribution has outstanding $500 million in aggregate principal amount of 5.375% Senior Notes due 2021 (the "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) |
| | | | | | | | | | | | | | | | | | | |
| June 30, 2014 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Cash and cash equivalents | $ | — | | | $ | 44,687 | | | $ | 56,956 | | | $ | — | | | $ | 101,643 | |
|
Trade accounts receivable, net | — | | | — | | | 1,186,062 | | | — | | | 1,186,062 | |
|
Inventories, net | — | | | 369,332 | | | 480,847 | | | — | | | 850,179 | |
|
Other current assets | — | | | 164,598 | | | 152,245 | | | (46,186 | ) | | 270,657 | |
|
Total current assets | — | | | 578,617 | | | 1,876,110 | | | (46,186 | ) | | 2,408,541 | |
|
Intercompany receivables, net | — | | | — | | | 1,881,659 | | | (1,881,659 | ) | | — | |
|
Property, buildings and equipment, net | — | | | 59,614 | | | 140,337 | | | — | | | 199,951 | |
|
Intangible assets, net | — | | | 5,069 | | | 470,639 | | | — | | | 475,708 | |
|
Goodwill | — | | | 246,770 | | | 1,544,083 | | | — | | | 1,790,853 | |
|
Investments in affiliates | 3,263,323 | | | 3,821,639 | | | — | | | (7,084,962 | ) | | — | |
|
Other noncurrent assets | 4,222 | | | 14,242 | | | 35,246 | | | 369 | | | 54,079 | |
|
Total assets | $ | 3,267,545 | | | $ | 4,725,951 | | | $ | 5,948,074 | | | $ | (9,012,438 | ) | | $ | 4,929,132 | |
|
| | | | | | | | | |
Accounts payable | $ | — | | | $ | 434,071 | | | $ | 360,434 | | | $ | — | | | $ | 794,505 | |
|
Short-term debt | — | | | — | | | 44,962 | | | — | | | 44,962 | |
|
Other current liabilities | 14,744 | | | 107,765 | | | 198,577 | | | (46,186 | ) | | 274,900 | |
|
Total current liabilities | 14,744 | | | 541,836 | | | 603,973 | | | (46,186 | ) | | 1,114,367 | |
|
Intercompany payables, net | 1,167,832 | | | 713,827 | | | — | | | (1,881,659 | ) | | — | |
|
Long-term debt | 175,811 | | | 682,825 | | | 662,324 | | | — | | | 1,520,960 | |
|
Other noncurrent liabilities | 19,572 | | | 237,399 | | | 146,963 | | | 369 | | | 404,303 | |
|
Total WESCO International stockholders' equity | 1,889,586 | | | 2,550,064 | | | 4,534,898 | | | (7,084,962 | ) | | 1,889,586 | |
|
Noncontrolling interest | — | | | — | | | (84 | ) | | — | | | (84 | ) |
|
Total liabilities and stockholders’ equity | $ | 3,267,545 | | | $ | 4,725,951 | | | $ | 5,948,074 | | | $ | (9,012,438 | ) | | $ | 4,929,132 | |
|
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 June 30, 2014 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 894,199 | | | $ | 1,140,850 | | | $ | (29,884 | ) | | $ | 2,005,165 | |
|
Cost of goods sold | — | | | 720,938 | | | 902,383 | | | (29,884 | ) | | 1,593,437 | |
|
Selling, general and administrative expenses | 2 | | | 144,766 | | | 133,941 | | | — | | | 278,709 | |
|
Depreciation and amortization | — | | | 4,914 | | | 12,272 | | | — | | | 17,186 | |
|
Results of affiliates’ operations | 73,172 | | | 61,502 | | | — | | | (134,674 | ) | | — | |
|
Interest expense, net | 6,084 | | | 18,328 | | | (4,075 | ) | | — | | | 20,337 | |
|
Provision for income taxes | (1,700 | ) | | 1,465 | | | 26,944 | | | — | | | 26,709 | |
|
Net income | 68,786 | | | 65,290 | | | 69,385 | | | (134,674 | ) | | 68,787 | |
|
Less: Net loss attributable to noncontrolling interest | — | | | — | | | (15 | ) | | — | | | (15 | ) |
|
Net income attributable to WESCO International, Inc. | $ | 68,786 | | | $ | 65,290 | | | $ | 69,400 | | | $ | (134,674 | ) | | $ | 68,802 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | 43,023 | | | 43,023 | | | 43,023 | | | (86,046 | ) | | 43,023 | |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 111,809 | | | $ | 108,313 | | | $ | 112,423 | | | $ | (220,720 | ) | | $ | 111,825 | |
|
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| | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 873,607 | | | $ | 1,052,902 | | | $ | (32,556 | ) | | $ | 1,893,953 | |
|
Cost of goods sold | — | | | 698,844 | | | 835,115 | | | (32,556 | ) | | 1,501,403 | |
|
Selling, general and administrative expenses | 1 | | | 138,817 | | | 126,688 | | | — | | | 265,506 | |
|
Depreciation and amortization | — | | | 4,780 | | | 12,373 | | | — | | | 17,153 | |
|
Results of affiliates’ operations | 69,789 | | | 60,753 | | | — | | | (130,542 | ) | | — | |
|
Interest expense, net | 5,994 | | | 19,118 | | | (3,343 | ) | | — | | | 21,769 | |
|
Provision for income taxes | (1,557 | ) | | 2,520 | | | 21,808 | | | — | | | 22,771 | |
|
Net income | 65,351 | | | 70,281 | | | 60,261 | | | (130,542 | ) | | 65,351 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | 66 | | | — | | | 66 | |
|
Net income attributable to WESCO International, Inc. | $ | 65,351 | | | $ | 70,281 | | | $ | 60,195 | | | $ | (130,542 | ) | | $ | 65,285 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | (44,350 | ) | | (44,350 | ) | | (44,350 | ) | | 88,700 | | | (44,350 | ) |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 21,001 | | | $ | 25,931 | | | $ | 15,845 | | | $ | (41,842 | ) | | $ | 20,935 | |
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Six Months Ended June 30, 2014 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 1,723,670 | | | $ | 2,148,303 | | | $ | (55,982 | ) | | $ | 3,815,991 | |
|
Cost of goods sold | — | | | 1,379,523 | | | 1,705,929 | | | (55,982 | ) | | 3,029,470 | |
|
Selling, general and administrative expenses | 2 | | | 281,446 | | | 262,723 | | | — | | | 544,171 | |
|
Depreciation and amortization | — | | | 9,614 | | | 23,944 | | | — | | | 33,558 | |
|
Results of affiliates’ operations | 129,382 | | | 102,215 | | | — | | | (231,597 | ) | | — | |
|
Interest expense, net | 12,153 | | | 37,090 | | | (8,218 | ) | | — | | | 41,025 | |
|
Provision for income taxes | (3,414 | ) | | 4,511 | | | 46,028 | | | — | | | 47,125 | |
|
Net income | 120,641 | | | 113,701 | | | 117,897 | | | (231,597 | ) | | 120,642 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | (65 | ) | | — | | | (65 | ) |
|
Net income attributable to WESCO International, Inc. | $ | 120,641 | | | $ | 113,701 | | | $ | 117,962 | | | $ | (231,597 | ) | | $ | 120,707 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | (3,477 | ) | | (3,477 | ) | | (3,477 | ) | | 6,954 | | | (3,477 | ) |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 117,164 | | | $ | 110,224 | | | $ | 114,485 | | | $ | (224,643 | ) | | $ | 117,230 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Six Months Ended June 30, 2013 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 1,693,842 | | | $ | 2,071,765 | | | $ | (63,596 | ) | | $ | 3,702,011 | |
|
Cost of goods sold | — | | | 1,348,971 | | | 1,643,007 | | | (63,596 | ) | | 2,928,382 | |
|
Selling, general and administrative expenses | 5 | | | 239,334 | | | 253,623 | | | — | | | 492,962 | |
|
Depreciation and amortization | — | | | 8,883 | | | 24,987 | | | — | | | 33,870 | |
|
Results of affiliates’ operations | 158,241 | | | 99,153 | | | — | | | (257,394 | ) | | — | |
|
Interest expense, net | 11,949 | | | 37,844 | | | (6,098 | ) | | — | | | 43,695 | |
|
Provision for income taxes | (3,158 | ) | | 14,762 | | | 42,054 | | | — | | | 53,658 | |
|
Net income | 149,445 | | | 143,201 | | | 114,192 | | | (257,394 | ) | | 149,444 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | 170 | | | — | | | 170 | |
|
Net income attributable to WESCO International, Inc. | $ | 149,445 | | | $ | 143,201 | | | $ | 114,022 | | | $ | (257,394 | ) | | $ | 149,274 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | (67,830 | ) | | (67,830 | ) | | (67,830 | ) | | 135,660 | | | (67,830 | ) |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 81,615 | | | $ | 75,371 | | | $ | 46,192 | | | $ | (121,734 | ) | | $ | 81,444 | |
|
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2014 |
| (In thousands) |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and Eliminating |
Inc. | Inc. | | Entries |
Net cash (used) provided by operating activities | $ | 1,063 | | | $ | 57,016 | | | $ | (7,237 | ) | | $ | — | | | $ | 50,842 | |
|
Investing activities: | | | | | | | | | |
|
Capital expenditures | — | | | (8,380 | ) | | (3,405 | ) | | — | | | (11,785 | ) |
|
Acquisition payments | — | | | (42,131 | ) | | (91,187 | ) | | — | | | (133,318 | ) |
|
Other | — | | | 675 | | | 27 | | | (675 | ) | | 27 | |
|
Net cash used in investing activities | — | | | (49,836 | ) | | (94,565 | ) | | (675 | ) | | (145,076 | ) |
|
Financing activities: | | | | | | | | | |
Borrowings | — | | | 409,460 | | | 230,461 | | | — | | | 639,921 | |
|
Repayments | (675 | ) | | (402,459 | ) | | (160,572 | ) | | 675 | | | (563,031 | ) |
|
Other | (388 | ) | | (1,189 | ) | | (3 | ) | | — | | | (1,580 | ) |
|
Net cash provided (used) by financing activities | (1,063 | ) | | 5,812 | | | 69,886 | | | 675 | | | 75,310 | |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | (3,158 | ) | | — | | | (3,158 | ) |
|
Net change in cash and cash equivalents | — | | | 12,992 | | | (35,074 | ) | | — | | | (22,082 | ) |
|
Cash and cash equivalents at the beginning of year | — | | | 31,695 | | | 92,030 | | | — | | | 123,725 | |
|
Cash and cash equivalents at the end of period | $ | — | | | $ | 44,687 | | | $ | 56,956 | | | $ | — | | | $ | 101,643 | |
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 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 | $ | (9,418 | ) | | $ | 70,521 | | | $ | 58,624 | | | $ | — | | | $ | 119,727 | |
|
Investing activities: | | | | | | | | | |
|
Capital expenditures | — | | | (9,621 | ) | | (2,129 | ) | | — | | | (11,750 | ) |
|
Acquisition payments | — | | | — | | | — | | | — | | | — | |
|
Other | — | | | (10,454 | ) | | 9,654 | | | 10,454 | | | 9,654 | |
|
Net cash (used) provided by investing activities | — | | | (20,075 | ) | | 7,525 | | | 10,454 | | | (2,096 | ) |
|
Financing activities: | | | | | | | | | |
Borrowings | 10,454 | | | 333,036 | | | 203,263 | | | (10,454 | ) | | 536,299 | |
|
Repayments | — | | | (396,036 | ) | | (244,118 | ) | | — | | | (640,154 | ) |
|
Other | (1,036 | ) | | 7,566 | | | (501 | ) | | — | | | 6,029 | |
|
Net cash provided (used) by financing activities | 9,418 | | | (55,434 | ) | | (41,356 | ) | | (10,454 | ) | | (97,826 | ) |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | (1,392 | ) | | — | | | (1,392 | ) |
|
Net change in cash and cash equivalents | — | | | (4,988 | ) | | 23,401 | | | — | | | 18,413 | |
|
Cash and cash equivalents at the beginning of year | — | | | 52,275 | | | 33,824 | | | — | | | 86,099 | |
|
Cash and cash equivalents at the end of period | $ | — | | | $ | 47,287 | | | $ | 57,225 | | | $ | — | | | $ | 104,512 | |
|
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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 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. |