Mail Stop 7010
August 9, 2005
Mr. Charles A. Banks
Wolseley plc
Parkview 1220
Arlington Business Park, Theale
Reading, Berkshire, RG7 4GA United Kingdom
Re: Wolseley plc
Form 20-F for the fiscal year ended July 31, 2004
Filed November 18, 2004
File No. 1-15186
Dear Mr. Banks:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
FORM 20-F FOR THE YEAR ENDED JULY 31, 2004
Item 5-Operating and Financial Review and Prospects, page 23
Critical Accounting Estimates, page 35
1. We note your discussion of defined benefit pension plans in
footnotes 34 and 41. In future filings please provide a critical
accounting estimate that discusses the impact a change in each of
the
assumptions you used to account for these pensions, if such a
change
could be material. For example, a change in the expected long-
term
rate of return on pension assets often results in a significant
difference to pension liabilities. Please refer to section five,
Critical Accounting Estimates, of our Release 33-8350, available
on
our website at www.sec.gov.
Item 15-Controls and Procedures, page 70
2. We note your statement on pages 59 and 60 that your disclosure
controls and procedures "were effective in ensuring that material
information relating to the Group was made known to [your chief
financial officer and chief executive officer] during the period
in
which this report was being prepared and alerting them on a timely
basis to material information relating to Wolseley (including its
consolidated subsidiaries) required to be included in Wolseley`s
reports filed or submitted under the Exchange Act." Please revise
future filings to either provide the entire definition of
disclosure
controls and procedures as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e) or alternatively state that your disclosure controls
and procedures are effective, or not effective, without providing
any
part of the definition.
Item 18-Financial Statements for the Fiscal Year Ended July 31,
2004
Note 20-Provisions for Liabilities and Charges, page F-23
3. We note your statement that the environmental and legal
liabilities provision includes known legal claims and
environmental
liabilities where the costs and timing of any payment is
inherently
uncertain. Please confirm to us and revise future filings to
clarify, if true, that your provision also includes liabilities
for
which a legal claim has not yet been made if it is probable that
you
have incurred the liability and the amount of the liability can be
reasonably estimated. Refer to paragraph 8 of SFAS 5.
4. We note your assertion that current insurance coverage
significantly exceeds the expected level of current and future
claims
related to your asbestos litigation and that you do not expect any
impact from this litigation to your future profits or cash flows.
We
also note your statement in Note 37 on page F-40 that management
does
not expect your liability under pending litigation and claims to
materially affect your financial statements. We caution you that
a
statement that a contingency is not expected to be material does
not
satisfy the requirements of SFAS 5 if there is at least a
reasonable
possibility that a loss exceeding the amounts already recognized
may
have been incurred and the amount of that additional loss would be
material to a decision to buy or sell your securities. In that
case
you must either (a) disclose the estimated additional loss, or
range
of loss, that is reasonably possible, or (b) state that such an
estimate cannot be made. In addition, if such a reasonable
possibility exists, you must expand your disclosures to provide
the
specific disclosures typically relevant to an understanding of
historical and anticipated product liability costs as set forth in
Question 3 to SAB Topic 5Y. Please confirm that you will provide
these additional disclosures, if applicable, in future filings.
Note 41-Summary of Significant Differences between Accounting
Principles Generally Accepted in the United Kingdom and the United
States, page F-44
Reconciliation of Net Income, page F-45
5. We note your disclosures concerning real property awaiting
disposal in footnotes 1 and 14. Please tell us if these assets
include depreciable assets. If so, please tell us if these assets
qualify as assets held for sale under US GAAP in accordance with
paragraphs 30-33 of SFAS 144. We particularly call your attention
to
the requirements of paragraph 30(d) of SFAS 144. If any of these
assets are depreciable assets that do not qualify as assets held
for
sale under SFAS 144, please tell us where you have included the
depreciation expense required for these items under US GAAP in
your
reconciliation to US GAAP net income.
Reconciliation of Shareholders` Funds, page F-46
6. Please tell us if your balance of shareholders` funds under UK
GAAP includes amounts for the revaluation of your fixed assets
prior
to your adoption of FRS 15. If so, please tell us where you have
included the reconciling item for that difference between UK GAAP
and
US GAAP in your reconciliation. If applicable and material,
please
revise future filings to clarify the impact of this difference in
GAAP.
7. Please provide us with a reconciliation of movements in equity
shareholders` funds under US GAAP.
Note 41(i)-Purchase Accounting Adjustments-Goodwill, page F-46
8. We note your roll forward of consolidated goodwill under US
GAAP
on page F-47 and your allocation of acquired goodwill under US
GAAP
to your reportable segments on page F-63. Please revise future
filings to provide a roll forward of goodwill both in total and by
reportable segment in accordance with paragraph 45 of SFAS 142.
Note 41(x)-Other Disclosures Required by US GAAP, page F-60
9. Please tell us, and revise future filings to disclose, your
revenue recognition policy under US GAAP. You should specifically
address each of the four criteria specified by SAB Topic 13:A.
Exhibits
Exhibits 12.1 and 12.2
10. Please amend your Form 20-F, and revise future filings, to
provide signed certifications that use the exact wording indicated
by
Instruction 12 as to exhibits of Form 20-F.
* * *
Please amend your filing and respond to these comments
within 10 business days, or tell us when you will provide us with
a
response. Please provide us with a response letter that keys your
responses to our comments and provides any requested information.
Detailed letters greatly facilitate our review. Please understand
that we may have additional comments after reviewing your
amendment
and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed decision. Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in their filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in our review of your filing
or
in response to our comments on your filing.
If you have any questions regarding these comments, please
direct them to Jennifer Thompson, Staff Accountant, at (202) 551-
3737
or, in her absence, to the undersigned at (202) 551-3768.
Sincerely,
John Cash
Accounting Branch Chief
Mr. Charles Banks
Wolseley plc
August 9, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE