OTHER FINANCIAL INFORMATION | 9 Months Ended |
Sep. 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) |
| | | | | | | | | | | | | | | | | | | |
Amounts in thousands | September 30, 2014 |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Cash and cash equivalents | $ | — | | | $ | 37,639 | | | $ | 72,729 | | | $ | — | | | $ | 110,368 | |
|
Trade accounts receivable, net | — | | | — | | | 1,218,759 | | | — | | | 1,218,759 | |
|
Inventories, net | — | | | 380,584 | | | 465,582 | | | — | | | 846,166 | |
|
Other current assets | 18 | | | 172,936 | | | 145,653 | | | (43,863 | ) | | 274,744 | |
|
Total current assets | 18 | | | 591,159 | | | 1,902,723 | | | (43,863 | ) | | 2,450,037 | |
|
Intercompany receivables, net | — | | | — | | | 1,833,480 | | | (1,833,480 | ) | | — | |
|
Property, buildings and equipment, net | — | | | 57,966 | | | 133,427 | | | — | | | 191,393 | |
|
Intangible assets, net | — | | | 4,901 | | | 447,239 | | | — | | | 452,140 | |
|
Goodwill | — | | | 246,771 | | | 1,513,062 | | | — | | | 1,759,833 | |
|
Investments in affiliates | 3,284,749 | | | 3,820,458 | | | — | | | (7,105,207 | ) | | — | |
|
Other noncurrent assets | 4,152 | | | 13,586 | | | 34,327 | | | — | | | 52,065 | |
|
Total assets | $ | 3,288,919 | | | $ | 4,734,841 | | | $ | 5,864,258 | | | $ | (8,982,550 | ) | | $ | 4,905,468 | |
|
| | | | | | | | | |
Accounts payable | $ | — | | | $ | 482,892 | | | $ | 359,887 | | | $ | — | | | $ | 842,779 | |
|
Short-term debt | — | | | — | | | 43,006 | | | — | | | 43,006 | |
|
Other current liabilities | 11,533 | | | 114,565 | | | 158,661 | | | (43,863 | ) | | 240,896 | |
|
Total current liabilities | 11,533 | | | 597,457 | | | 561,554 | | | (43,863 | ) | | 1,126,681 | |
|
Intercompany payables, net | 1,174,355 | | | 659,125 | | | — | | | (1,833,480 | ) | | — | |
|
Long-term debt | 176,691 | | | 680,618 | | | 614,465 | | | — | | | 1,471,774 | |
|
Other noncurrent liabilities | 17,613 | | | 234,121 | | | 146,634 | | | — | | | 398,368 | |
|
Total WESCO International stockholders' equity | 1,908,727 | | | 2,563,520 | | | 4,541,687 | | | (7,105,207 | ) | | 1,908,727 | |
|
Noncontrolling interest | — | | | — | | | (82 | ) | | — | | | (82 | ) |
|
Total liabilities and stockholders’ equity | $ | 3,288,919 | | | $ | 4,734,841 | | | $ | 5,864,258 | | | $ | (8,982,550 | ) | | $ | 4,905,468 | |
|
WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING BALANCE SHEETS |
(unaudited) |
| | | | | | | | | | | | | | | | | | | |
Amounts in thousands | December 31, 2013 |
| 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) |
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| | | | | | | | | | | | | | | | | | | |
Amounts in thousands | Three Months Ended September 30, 2014 |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 932,948 | | | $ | 1,174,935 | | | $ | (29,733 | ) | | $ | 2,078,150 | |
|
Cost of goods sold | — | | | 747,219 | | | 938,301 | | | (29,733 | ) | | 1,655,787 | |
|
Selling, general and administrative expenses | — | | | 141,924 | | | 129,773 | | | — | | | 271,697 | |
|
Depreciation and amortization | — | | | 4,670 | | | 12,748 | | | — | | | 17,418 | |
|
Results of affiliates’ operations | 85,219 | | | 62,611 | | | — | | | (147,830 | ) | | — | |
|
Interest expense, net | 6,123 | | | 18,765 | | | (4,090 | ) | | — | | | 20,798 | |
|
Provision for income taxes | (1,722 | ) | | 5,733 | | | 27,621 | | | — | | | 31,632 | |
|
Net income | 80,818 | | | 77,248 | | | 70,582 | | | (147,830 | ) | | 80,818 | |
|
Less: Net loss attributable to noncontrolling interest | — | | | — | | | 2 | | | — | | | 2 | |
|
Net income attributable to WESCO International, Inc. | $ | 80,818 | | | $ | 77,248 | | | $ | 70,580 | | | $ | (147,830 | ) | | $ | 80,816 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | (63,794 | ) | | (63,794 | ) | | (63,794 | ) | | 127,588 | | | (63,794 | ) |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 17,024 | | | $ | 13,454 | | | $ | 6,786 | | | $ | (20,242 | ) | | $ | 17,022 | |
|
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| | | | | | | | | | | | | | | | | | | |
Amounts in thousands | Three Months Ended September 30, 2013 |
| 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 | 69,118 | | | 65,595 | | | 66,220 | | | (131,815 | ) | | 69,118 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | (44 | ) | | — | | | (44 | ) |
|
Net income 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 | |
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
(unaudited) |
|
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| | | | | | | | | |
| | | | | | | | | |
Amounts in thousands | Nine Months Ended September 30, 2014 |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and |
Inc. | Inc. | | Eliminating |
| | | Entries |
Net sales | $ | — | | | $ | 2,656,619 | | | $ | 3,323,237 | | | $ | (85,715 | ) | | $ | 5,894,141 | |
|
Cost of goods sold | — | | | 2,126,743 | | | 2,644,229 | | | (85,715 | ) | | 4,685,257 | |
|
Selling, general and administrative expenses | 2 | | | 423,371 | | | 392,496 | | | — | | | 815,869 | |
|
Depreciation and amortization | — | | | 14,284 | | | 36,692 | | | — | | | 50,976 | |
|
Results of affiliates’ operations | 214,601 | | | 164,826 | | | — | | | (379,427 | ) | | — | |
|
Interest expense, net | 18,277 | | | 55,854 | | | (12,308 | ) | | — | | | 61,823 | |
|
Provision for income taxes | (5,137 | ) | | 10,244 | | | 73,650 | | | — | | | 78,757 | |
|
Net income | 201,459 | | | 190,949 | | | 188,478 | | | (379,427 | ) | | 201,459 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | (64 | ) | | — | | | (64 | ) |
|
Net income attributable to WESCO International, Inc. | $ | 201,459 | | | $ | 190,949 | | | $ | 188,542 | | | $ | (379,427 | ) | | $ | 201,523 | |
|
Comprehensive income: | | | | | | | | | |
Foreign currency translation adjustment | (67,271 | ) | | (67,271 | ) | | (67,271 | ) | | 134,542 | | | (67,271 | ) |
|
Comprehensive income attributable to WESCO International, Inc. | $ | 134,188 | | | $ | 123,678 | | | $ | 121,271 | | | $ | (244,885 | ) | | $ | 134,252 | |
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Amounts in thousands | Nine Months Ended September 30, 2013 |
| 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 | 231,482 | | | 157,726 | | | — | | | (389,208 | ) | | — | |
|
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 | (4,997 | ) | | 34,617 | | | 54,947 | | | — | | | 84,567 | |
|
Net income | 218,562 | | | 208,794 | | | 180,414 | | | (389,208 | ) | | 218,562 | |
|
Less: Net income attributable to noncontrolling interest | — | | | — | | | 126 | | | — | | | 126 | |
|
Net income attributable to WESCO International, Inc. | $ | 218,562 | | | $ | 208,794 | | | $ | 180,288 | | | $ | (389,208 | ) | | $ | 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 | | | $ | 137,077 | | | $ | (302,786 | ) | | $ | 175,225 | |
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
Amounts in thousands | Nine Months Ended September 30, 2014 |
| WESCO | | WESCO | | Non-Guarantor | | Consolidating | | Consolidated |
International, | Distribution, | Subsidiaries | and Eliminating |
Inc. | Inc. | | Entries |
Net cash (used) provided by operating activities | $ | (5,202 | ) | | $ | 68,291 | | | $ | 76,731 | | | $ | — | | | $ | 139,820 | |
|
Investing activities: | | | | | | | | | |
|
Capital expenditures | — | | | (10,811 | ) | | (5,225 | ) | | — | | | (16,036 | ) |
|
Acquisition payments | — | | | (42,132 | ) | | (96,673 | ) | | — | | | (138,805 | ) |
|
Other | — | | | (5,842 | ) | | 5,444 | | | 5,842 | | | 5,444 | |
|
Net cash used in investing activities | — | | | (58,785 | ) | | (96,454 | ) | | 5,842 | | | (149,397 | ) |
|
Financing activities: | | | | | | | | | |
Borrowings | 6,517 | | | 645,411 | | | 316,462 | | | (6,517 | ) | | 961,873 | |
|
Repayments | (675 | ) | | (640,411 | ) | | (316,560 | ) | | 675 | | | (956,971 | ) |
|
Other | (640 | ) | | (8,562 | ) | | (110 | ) | | — | | | (9,312 | ) |
|
Net cash provided (used) by financing activities | 5,202 | | | (3,562 | ) | | (208 | ) | | (5,842 | ) | | (4,410 | ) |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | 630 | | | — | | | 630 | |
|
Net change in cash and cash equivalents | — | | | 5,944 | | | (19,301 | ) | | — | | | (13,357 | ) |
|
Cash and cash equivalents at the beginning of year | — | | | 31,695 | | | 92,030 | | | — | | | 123,725 | |
|
Cash and cash equivalents at the end of period | $ | — | | | $ | 37,639 | | | $ | 72,729 | | | $ | — | | | $ | 110,368 | |
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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
(unaudited) |
|
| | | | | | | | | | | | | | | | | | | |
Amounts in thousands | Nine Months Ended September 30, 2013 |
| 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 | — | | | — | | | — | | | — | | | — | |
|
Other | — | | | (17,176 | ) | | 9,276 | | | 17,176 | | | 9,276 | |
|
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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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. |