WESCO INTERNATIONAL INC [WCC] Filings

10-Q 1 wcc-20240930.htm 10-Q wcc-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-14989

WESCO International, Inc.

(Exact name of registrant as specified in its charter)


Delaware		25-1723342
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

225 West Station Square Drive Suite 700		15219
Pittsburgh,	Pennsylvania	(Zip Code)
(Address of principal executive offices)

(412) 454-2200

(Registrant's telephone number, including area code)

Not applicable.

(Former name, former address and former fiscal year, if changed since last report)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Class

Trading Symbol(s)

Name of Exchange on which registered

Common Stock, par value $.01 per share

WCC

New York Stock Exchange

Depositary Shares, each representing a 1/1,000th interest in a share of Series A Fixed-Rate Reset Cumulative Perpetual Preferred Stock

WCC PR A

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of October 30, 2024, 49,001,657 shares of common stock, $0.01 par value, of the registrant were outstanding.

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

Table of Contents


			Page
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.			2

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.			25

Item 3. Quantitative and Qualitative Disclosures About Market Risk.			45

Item 4. Controls and Procedures.			45

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.			46

Item 1A. Risk Factors.			46

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			46

Item 6. Exhibits.			47

Signatures			48

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

The interim financial information required by this item is set forth in the unaudited Condensed Consolidated Financial Statements and Notes thereto in this Quarterly Report on Form 10-Q, as follows:


			Page

Condensed Consolidated Balance Sheets (unaudited)			3
Condensed Consolidated Statements of Income and Comprehensive Income (unaudited)			4
Condensed Consolidated Statements of Cash Flows (unaudited)			5
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)			6
Notes to Condensed Consolidated Financial Statements (unaudited)			8

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except shares)

(unaudited)


	As of
Assets	September 30, 2024		December 31, 2023
Current assets:
Cash and cash equivalents	$	706.8	$	524.1
Trade accounts receivable, net of allowance for expected credit losses of $61.0 and $55.9 in 2024 and 2023, respectively	3,629.1		3,639.5
Other accounts receivable	398.8		430.5
Inventories	3,630.1		3,572.1
Prepaid expenses and other current assets	318.7		225.4
Total current assets	8,683.5		8,391.6
Property, buildings and equipment, net of accumulated depreciation of $532.8 and $502.5 in 2024 and 2023, respectively	441.7		423.6
Operating lease assets	747.6		761.2
Intangible assets, net	1,811.2		1,857.6
Goodwill	3,217.7		3,262.3
Deferred income taxes	38.1		42.3
Other assets	335.2		322.3
Total assets	$	15,275.0	$	15,060.9
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,839.1	$	2,431.5
Accrued payroll and benefit costs	219.9		191.7
Short-term debt and current portion of long-term debt	14.9		8.6
Other current liabilities	854.6		756.6
Total current liabilities	3,928.5		3,388.4
Long-term debt, net of debt discount and debt issuance costs of $50.6 and $43.0 in 2024 and 2023, respectively	5,007.8		5,313.1
Operating lease liabilities	624.6		641.7
Deferred income taxes	440.4		451.9
Other noncurrent liabilities	236.9		233.9
Total liabilities	$	10,238.2	$	10,029.0
Commitments and Contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $.01 par value; 20,000,000 shares authorized, no shares issued or outstanding	$	—	$	—
Preferred stock, Series A, $.01 par value; 25,000 shares authorized, 21,612 shares issued and outstanding in 2024 and 2023	—		—
Common stock, $.01 par value; 210,000,000 shares authorized, 69,575,119 and 69,278,677 shares issued, and 49,000,624 and 50,897,122 shares outstanding in 2024 and 2023, respectively	0.7		0.7
Class B nonvoting convertible common stock, $.01 par value; 20,000,000 shares authorized, 4,339,431 issued and no shares outstanding in 2024 and 2023, respectively	—		—
Additional capital	2,042.4		2,037.1
Retained earnings	4,829.8		4,391.7
Treasury stock, at cost; 24,913,926 and 22,720,986 shares in 2024 and 2023, respectively	(1,440.7)		(1,060.4)
Accumulated other comprehensive loss	(389.8)		(332.0)
Total WESCO International, Inc. stockholders’ equity	5,042.4		5,037.1
Noncontrolling interests	(5.6)		(5.2)
Total stockholders’ equity	5,036.8		5,031.9
Total liabilities and stockholders’ equity	$	15,275.0	$	15,060.9

The accompanying notes are an integral part of the condensed consolidated financial statements.

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In millions, except per share data)

(unaudited)


	Three Months Ended				Nine Months Ended
	September 30				September 30
	2024		2023		2024		2023
Net sales	$	5,489.4	$	5,644.4	$	16,319.1	$	16,911.8
Cost of goods sold (excluding depreciation and amortization)	4,276.7		4,422.4		12,770.5		13,238.9
Selling, general and administrative expenses	831.1		796.4		2,488.9		2,445.8
Depreciation and amortization	46.0		45.1		137.6		136.4
Income from operations	335.6		380.5		922.1		1,090.7
Interest expense, net	86.5		98.5		279.8		292.3
Other (income) expense, net	(24.9)		3.7		(99.3)		14.6
Income before income taxes	274.0		278.3		741.6		783.8
Provision for income taxes	69.3		44.3		188.1		160.2
Net income	204.7		234.0		553.5		623.6
Less: Net income attributable to noncontrolling interests	0.4		0.6		1.3		—
Net income attributable to WESCO International, Inc.	204.3		233.4		552.2		623.6
Less: Preferred stock dividends	14.4		14.4		43.1		43.1
Net income attributable to common stockholders	$	189.9	$	219.0	$	509.1	$	580.5

Earnings per share attributable to common stockholders
Basic	$	3.87	$	4.28	$	10.18	$	11.34
Diluted	$	3.81	$	4.20	$	10.02	$	11.08

Other comprehensive income (loss):
Foreign currency translation adjustments and other	33.9		(64.5)		(59.5)		(6.3)
Post-retirement benefit plan adjustments, net of tax	(0.1)		—		1.7		—
Other comprehensive income (loss)	33.8		(64.5)		(57.8)		(6.3)
Comprehensive income	238.5		169.5		495.7		617.3
Less: Comprehensive income attributable to noncontrolling interests	0.4		0.6		1.3		—
Less: Preferred stock dividends	14.4		14.4		43.1		43.1
Comprehensive income attributable to common stockholders	$	223.7	$	154.5	$	451.3	$	574.2

The accompanying notes are an integral part of the condensed consolidated financial statements.

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(unaudited)


	Nine Months Ended
	September 30
	2024		2023
Operating activities:
Net income	$	553.5	$	623.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	137.6		136.4
Stock-based compensation expense	19.6		34.7
Amortization of debt discount and debt issuance costs	12.2		11.1
Gain on divestiture	(122.2)		—
Loss on abandonment of assets	17.8		—

Other operating activities, net	1.3		7.9
Changes in assets and liabilities:
Trade accounts receivable, net	(217.9)		(133.4)
Other accounts receivable	28.1		18.7
Inventories	(85.0)		(62.7)
Other current and noncurrent assets	(127.7)		(51.8)
Accounts payable	478.0		(86.5)
Accrued payroll and benefit costs	26.1		(120.9)
Other current and noncurrent liabilities	103.2		46.8
Net cash provided by operating activities	824.6		423.9
Investing activities:
Capital expenditures	(70.4)		(63.6)
Acquisition payments, net of cash acquired	(41.7)		—
Proceeds from divestiture, net of cash transferred	354.9		—
Other investing activities, net	6.9		2.4
Net cash provided by (used in) investing activities	249.7		(61.2)
Financing activities:
Proceeds from short-term debt, net	0.2		1.3


Proceeds from issuance of long-term debt	5,524.0		2,114.2
Repayments of long-term debt	(5,842.4)		(2,156.5)
Debt issuance costs	(26.6)		—
Payments for taxes related to net-share settlement of equity awards	(26.2)		(68.0)
Repurchases of common stock	(375.0)		(50.0)
Payment of common stock dividends	(61.4)		(57.6)
Payment of preferred stock dividends	(43.1)		(43.1)
Other financing activities, net	(23.8)		6.3
Net cash used in financing activities	(874.3)		(253.4)
Effect of exchange rate changes on cash and cash equivalents	(17.3)		(5.2)
Net change in cash and cash equivalents	182.7		104.1
Cash and cash equivalents at the beginning of period	524.1		527.3
Cash and cash equivalents at the end of period	$	706.8	$	631.4
Supplemental disclosures:
Cash paid for interest	$	251.4	$	235.0
Cash paid for income taxes	$	223.0	$	165.0
Right-of-use assets obtained in exchange for new operating lease liabilities	$	161.9	$	186.1

The accompanying notes are an integral part of the condensed consolidated financial statements.

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except shares)

(unaudited)


				Class B			Series A					Retained							Accumulated Other Comprehensive Income (Loss)
	Common Stock			Common Stock			Preferred Stock			Additional		Earnings		Treasury Stock			Noncontrolling
	Amount		Shares	Amount		Shares	Amount		Shares	Capital		(Deficit)		Amount		Shares	Interests				Total
Balance, December 31, 2023	$	0.7	69,278,677	$	—	4,339,431	$	—	21,612	$	2,037.1	$	4,391.7	$	(1,060.4)	(22,720,986)	$	(5.2)	$	(332.0)	$	5,031.9
Exercise of stock-based awards	—		429,611							0.3				(0.9)		(5,402)					(0.6)
Stock-based compensation expense										10.1											10.1
Repurchases of common stock, including excise taxes														(50.5)		(343,147)					(50.5)
Tax withholding related to vesting of restricted stock units and retirement of common stock	—		(156,850)							(14.6)		(9.6)									(24.2)
Noncontrolling interests																	0.3				0.3
Net income attributable to WESCO International, Inc.												115.8									115.8
Common stock dividends												(20.9)									(20.9)
Preferred stock dividends												(14.4)									(14.4)
Translation adjustments and other																			(69.7)		(69.7)
Balance, March 31, 2024	$	0.7	69,551,438	$	—	4,339,431	$	—	21,612	$	2,032.9	$	4,462.6	$	(1,111.8)	(23,069,535)	$	(4.9)	$	(401.7)	$	4,977.8
Exercise of stock-based awards	—		16,570							0.1				(0.6)		(3,308)					(0.5)
Stock-based compensation expense										2.7											2.7
Repurchases of common stock, including excise taxes														(303.0)		(1,679,176)					(303.0)
Tax withholding related to vesting of restricted stock units and retirement of common stock	—		(1,499)							(0.2)		(0.1)									(0.3)
Noncontrolling interests																	0.7				0.7
Net income attributable to WESCO International, Inc.												232.1									232.1
Common stock dividends												(20.3)									(20.3)
Preferred stock dividends												(14.4)									(14.4)
Dividends to noncontrolling interests																	(1.8)				(1.8)
Translation adjustments and other												0.2							(21.9)		(21.7)
Balance, June 30, 2024	$	0.7	69,566,509	$	—	4,339,431	$	—	21,612	$	2,035.5	$	4,660.1	$	(1,415.4)	(24,752,019)	$	(6.0)	$	(423.6)	$	4,851.3
Exercise of stock-based awards	—		9,433							0.2						(293)					0.2
Stock-based compensation expense										6.8											6.8
Repurchases of common stock, including excise taxes														(25.3)		(161,614)					(25.3)
Tax withholding related to vesting of restricted stock units and retirement of common stock	—		(823)							(0.1)		—									(0.1)
Noncontrolling interests																	0.4				0.4
Net income attributable to WESCO International, Inc.												204.3									204.3
Common stock dividends												(20.2)									(20.2)
Preferred stock dividends												(14.4)									(14.4)

Translation adjustments and other																			33.8		33.8
Balance, September 30, 2024	$	0.7	69,575,119	$	—	4,339,431	$	—	21,612	$	2,042.4	$	4,829.8	$	(1,440.7)	(24,913,926)	$	(5.6)	$	(389.8)	$	5,036.8

The accompanying notes are an integral part of the condensed consolidated financial statements.

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except shares)

(unaudited)


				Class B			Series A					Retained							Accumulated Other Comprehensive Income (Loss)
	Common Stock			Common Stock			Preferred Stock			Additional		Earnings		Treasury Stock			Noncontrolling
	Amount		Shares	Amount		Shares	Amount		Shares	Capital		(Deficit)		Amount		Shares	Interests				Total
Balance, December 31, 2022	$	0.7	68,535,704	$	—	4,339,431	$	—	21,612	$	2,005.4	$	3,795.0	$	(969.1)	(22,115,653)	$	(4.7)	$	(377.7)	$	4,449.6
Exercise of stock-based awards	—		811,309							0.3				(12.9)		(79,817)					(12.6)
Stock-based compensation expense										11.7											11.7
Tax withholding related to vesting of restricted stock units and retirement of common stock	—		(236,953)							(14.2)		(24.5)									(38.7)
Noncontrolling interests																	0.1				0.1
Net income attributable to WESCO International, Inc.												197.1									197.1
Common stock dividends												(19.2)									(19.2)
Preferred stock dividends												(14.4)									(14.4)
Translation adjustments and other										0.1		(1.0)							17.0		16.1
Balance, March 31, 2023	$	0.7	69,110,060	$	—	4,339,431	$	—	21,612	$	2,003.3	$	3,933.0	$	(982.0)	(22,195,470)	$	(4.6)	$	(360.7)	$	4,589.7
Exercise of stock-based awards	—		56,044							0.1				(2.5)		(15,895)					(2.4)
Stock-based compensation expense										12.2											12.2
Tax withholding related to vesting of restricted stock units and retirement of common stock	—		(1,111)							(0.1)		(0.1)									(0.2)
Noncontrolling interests																	(0.7)				(0.7)
Net income attributable to WESCO International, Inc.												193.1									193.1
Common stock dividends												(19.2)									(19.2)
Preferred stock dividends												(14.4)									(14.4)
Translation adjustments and other												1.0							41.2		42.2
Balance, June 30, 2023	$	0.7	69,164,993	$	—	4,339,431	$	—	21,612	$	2,015.5	$	4,093.4	$	(984.5)	(22,211,365)	$	(5.3)	$	(319.5)	$	4,800.3
Exercise of stock-based awards	—		184,546							0.1				(0.9)		(5,286)					(0.8)
Stock-based compensation expense										10.8											10.8
Repurchases of common stock, including excise taxes														(50.5)		(325,449)					(50.5)
Tax withholding related to vesting of restricted stock units and retirement of common stock	—		(72,194)							(2.5)		(10.4)									(12.9)
Noncontrolling interests																	0.6				0.6
Net income attributable to WESCO International, Inc.												233.4									233.4
Common stock dividends												(19.1)									(19.1)
Preferred stock dividends												(14.4)									(14.4)
Dividends to noncontrolling interests																	(1.1)				(1.1)
Translation adjustments and other												0.6					0.1		(64.5)		(63.8)
Balance, September 30, 2023	$	0.7	69,277,345	$	—	4,339,431	$	—	21,612	$	2,023.9	$	4,283.5	$	(1,035.9)	(22,542,100)	$	(5.7)	$	(384.0)	$	4,882.5

The accompanying notes are an integral part of the condensed consolidated financial statements.

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. ORGANIZATION

WESCO International, Inc. (“Wesco International”) and its subsidiaries (collectively, “Wesco” or the “Company”), headquartered in Pittsburgh, Pennsylvania, is a leading provider of business-to-business distribution, logistics services and supply chain solutions.

The Company has operating segments comprising three strategic business units consisting of Electrical & Electronic Solutions (“EES”), Communications & Security Solutions (“CSS”) and Utility & Broadband Solutions (“UBS”).

2. ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Wesco have been prepared in accordance with Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). The unaudited condensed consolidated financial information should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in WESCO International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 20, 2024. The Condensed Consolidated Balance Sheet at December 31, 2023 was derived from the audited Consolidated Financial Statements as of that date, but does not include all the disclosures required by accounting principles generally accepted in the United States of America.

The unaudited Condensed Consolidated Balance Sheet as of September 30, 2024, the unaudited Condensed Consolidated Statements of Income and Comprehensive Income, the unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023, and the unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023, respectively, in the opinion of management, have been prepared on the same basis as the audited Consolidated Financial Statements and include all adjustments necessary for the fair statement of the results of the interim periods presented herein. All adjustments reflected in the unaudited condensed consolidated financial information are of a normal recurring nature unless indicated. The results for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year.

Reclassifications

The Consolidated Statement of Cash Flows for the nine months ended September 30, 2023, includes certain reclassifications to previously reported amounts to conform to the current period's presentation. Such reclassifications had no impact on the totals of operating, investing and financing cash flow activities.

Supplier Finance Programs

The Company has supplier finance programs that are administered by intermediaries. Under these arrangements, participating suppliers may elect to receive early payment of invoices that have been confirmed by the Company, less an interest deduction or fees paid by the supplier, which is paid to the supplier by third-party finance providers. Wesco agrees to pay the stated amount of confirmed invoices in full on the original due date of the invoices, which is typically within 45 to 180 days of the invoice date, regardless of whether the supplier elects to receive early payment from the third-party finance providers. The Company does not provide assets pledged as security or other forms of guarantees to the finance providers or intermediaries under these arrangements. As of September 30, 2024 and December 31, 2023, the amounts due to suppliers that participate in the Company’s supplier finance programs were approximately $21.3 million and $32.6 million, respectively, which are included in accounts payable in the Condensed Consolidated Balance Sheets.

Loss on Abandonment of Assets

During the second quarter of 2024, management determined that a third-party developed operations management software product would be abandoned in favor of an application that better suits the Company's operations and the Company recognized a $17.8 million loss on abandonment of assets, which is recorded as a component of selling, general and administrative expenses in the Condensed Consolidated Statement of Income.

Recently Adopted and Recently Issued Accounting Standards and Disclosure Rules

In September 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

magnitude. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted this ASU in the first quarter of 2023, except for the amendment on rollforward information, which the Company will begin disclosing in its Annual Report on Form 10-K for the year ending December 31, 2024. The adoption of this ASU resulted in additional disclosure of the Company's supplier finance programs, as described above.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances prior reportable segment disclosure requirements in part by requiring entities to disclose significant expenses related to their reportable segments. The amendments in this ASU are effective on a retrospective basis for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Management is currently evaluating the impact that this accounting standard will have on its consolidated financial statements and notes thereto.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024 on a prospective basis. Management is currently evaluating the impact that this accounting standard will have on its consolidated financial statements and notes thereto.

In March 2024, the SEC issued final climate-related disclosure rules requiring disclosure of material climate-related risks, board and management governance of such risks, and material direct and indirect greenhouse gas emissions. The rules also require disclosure in the notes to the financial statements of the effects of severe weather events and other natural conditions. Disclosures will be made prospectively, with phased-in effective dates starting with fiscal years beginning on or after January 1, 2025. In April 2024, the SEC voluntarily stayed implementation of the climate-related disclosure rules, pending completion of judicial review of consolidated challenges to the rules by the Court of Appeals for the Eighth Circuit. Management is currently evaluating the impact that these rules could have on its consolidated financial statements and notes thereto.

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be material to Wesco’s financial position, results of operations or cash flows.

3. REVENUE

Wesco distributes products and provides services to customers globally in various end markets within its business segments. The segments operate in the United States, Canada and various other countries.

The following tables disaggregate Wesco’s net sales by segment and geography for the periods presented:


	Three Months Ended				Nine Months Ended
	September 30				September 30
(In millions)	2024		2023		2024		2023
Electrical & Electronic Solutions	$	2,151.2	$	2,190.7	$	6,423.1	$	6,526.1
Communications & Security Solutions	1,955.1		1,778.0		5,491.1		5,360.9
Utility & Broadband Solutions	1,383.1		1,675.7		4,404.9		5,024.8
Total by segment	$	5,489.4	$	5,644.4	$	16,319.1	$	16,911.8


	Three Months Ended				Nine Months Ended
	September 30				September 30
(In millions)	2024		2023		2024		2023
United States	$	4,041.4	$	4,166.5	$	12,089.5	$	12,529.5
Canada	763.7		765.8		2,226.6		2,298.3
Other International(1)	684.3		712.1		2,003.0		2,084.0
Total by geography(2)	$	5,489.4	$	5,644.4	$	16,319.1	$	16,911.8

(1) No individual country's net sales are greater than 10% of total net sales.

(2) Wesco attributes revenues from external customers to individual countries on the basis of point of sale.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

Due to the terms of certain contractual arrangements, Wesco bills and receives payment from its customers in advance of satisfying the respective performance obligation. Such advance billings and payments are recorded as deferred revenue and recognized as revenue when the performance obligation has been satisfied and control has transferred to the customer, which is generally upon shipment. Deferred revenue is usually recognized within a year or less from the date of the advance billing and payment. At September 30, 2024 and December 31, 2023, $135.0 million and $111.9 million, respectively, of deferred revenue was recorded as a component of other current liabilities in the Condensed Consolidated Balance Sheets. The Company recognized $3.2 million and $60.3 million of revenue during the three and nine months ended September 30, 2024, respectively, that was included in the deferred revenue balance as of December 31, 2023, and recognized $22.1 million and $64.1 million of revenue during the three and nine months ended September 30, 2023, respectively, that was included in the deferred revenue balance as of December 31, 2022.

The Company also has certain long-term contractual arrangements where revenue is recognized over time based on the cost-to-cost input method. As of September 30, 2024 and December 31, 2023, the Company had contract assets of $40.7 million and $35.4 million, respectively, resulting from contracts where the amount of revenue recognized exceeded the amount billed to the customer. Contract assets are recorded in the Condensed Consolidated Balance Sheets as a component of prepaid expenses and other current assets.

Wesco’s revenues are adjusted for variable consideration, which includes customer volume rebates, returns and discounts. Wesco measures variable consideration by estimating expected outcomes using analysis and inputs based upon historical data, as well as current and forecasted information. Variable consideration is reviewed by management on a monthly basis and revenue is adjusted accordingly. Variable consideration reduced revenue by approximately $110.4 million and $118.4 million, for the three months ended September 30, 2024 and 2023, respectively, and by approximately $331.2 million and $333.5 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, the Company's estimated product return obligation was $41.0 million and $41.3 million, respectively.

Billings to customers for shipping and handling are recognized in net sales. Wesco has elected to recognize shipping and handling costs as a fulfillment cost. Shipping and handling costs recorded as a component of selling, general and administrative expenses totaled $80.9 million and $76.4 million for the three months ended September 30, 2024 and 2023, respectively, and $226.2 million and $232.4 million for the nine months ended September 30, 2024 and 2023, respectively.

4. ACQUISITIONS AND DIVESTITURES

Independent Electric Supply Inc.

Effective July 1, 2024, the Company acquired the assets and liabilities of Independent Electric Supply Inc. (“IES”), a full-line electrical distributor headquartered in Ontario, Canada. The total preliminary estimated fair value of consideration for the acquisition of IES of $13.2 million includes total cash consideration of $11.6 million, net of cash acquired, paid at closing with cash on hand, and contingent consideration not to exceed $2.9 million. The assets acquired included a customer relationship intangible asset with an estimated fair value of $5.9 million.

entroCIM

On June 3, 2024, the Company acquired the assets and liabilities held by Warez, LLC and Hepta Systems, LLC, which own and operate the entroCIM business (collectively, “entroCIM”). entroCIM is an innovator in data center and building intelligence software. The total preliminary estimated fair value of consideration for the acquisition of entroCIM of $36.5 million includes total cash consideration of $30.1 million, paid at closing with cash on hand, and contingent consideration not to exceed $8.0 million, with an estimated fair value of $6.4 million, recorded in current and noncurrent liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2024. The preliminary purchase consideration was allocated to the identified assets acquired and liabilities assumed based on their respective acquisition date fair value, which primarily comprised a developed software intangible asset with an estimated fair value of $8.0 million based on an income valuation method, with the excess of $29.0 million allocated to goodwill in the Company's CSS reportable segment.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

Wesco Integrated Supply (“WIS”) Divestiture

On April 1, 2024, Wesco Distribution, Inc. (“Wesco Distribution”) completed the sale of its WIS business for total consideration of $334.2 million, adjusted from the base purchase price of $350.0 million for estimated net working capital, estimated closing cash, and estimated closing indebtedness. The WIS business, located primarily in the U.S. and Canada, was part of the UBS reportable segment and provided products and services to large industrial and commercial end-users to support their maintenance, repair, and operating spend. During the third quarter, the Company finalized the net working capital, closing cash, and closing indebtedness purchase price adjustments, which resulted in a working capital adjustment of $20.7 million and an increase to the gain from the sale. The Company recognized a gain from the sale of $19.3 million and $122.2 million for the three and nine months ended September 30, 2024, respectively, which is recorded as a component of other (income) expense, net in the Condensed Consolidated Statements of Income and Comprehensive Income. Upon closing, Wesco Distribution entered into certain Transition Services Agreements (“TSAs”) under which Wesco Distribution agreed to provide transition services to the purchaser for approximately nine months. Revenues associated with these TSAs are not material.

The sale of the WIS business did not represent a strategic shift that had a major effect on the Company’s operations and financial results, and therefore does not meet the criteria to be classified as discontinued operations.

5. GOODWILL AND INTANGIBLE ASSETS

The following table sets forth the changes in the carrying value of goodwill by reportable segment for the period presented:


	Nine Months Ended
	September 30, 2024
	EES		CSS		UBS		Total
	(In millions)
Beginning balance, January 1	$	838.1	$	1,211.6	$	1,212.6	$	3,262.3
Foreign currency exchange rate changes	(11.8)		(1.8)		(5.4)		(19.0)
Adjustments to goodwill for acquisitions(1)	3.5		29.0		—		32.5
Adjustment to goodwill for divestiture(2)	—		—		(58.1)		(58.1)
Ending balance, September 30	$	829.8	$	1,238.8	$	1,149.1	$	3,217.7

(1) Reflects the preliminary allocation of the purchase price paid to acquire IES and entroCIM, which are part of the EES and CSS segments, respectively, as described in Note 4, “Acquisitions and Divestitures”.

(2) Reflects the amount of goodwill that was allocated to the WIS business, which was part of the UBS segment, and was sold on April 1, 2024, as described in Note 4, “Acquisitions and Divestitures”.

The components of intangible assets are as follows:


		As of
		September 30, 2024						December 31, 2023
	Life (in years)	Gross Carrying Amount (1)		Accumulated Amortization (1)		Net Carrying Amount		Gross Carrying Amount (1)		Accumulated Amortization (1)		Net Carrying Amount
Intangible assets:		(In millions)
Trademarks	Indefinite	$	792.2	$	—	$	792.2	$	793.0	$	—	$	793.0
Customer relationships	10 - 20	1,466.0		(468.7)		997.3		1,519.9		(464.4)		1,055.5
Distribution agreements	15 and 19	29.2		(27.3)		1.9		29.2		(26.0)		3.2
Trademarks	5 and 12	15.5		(11.2)		4.3		15.5		(9.6)		5.9
Software	7	16.0		(0.5)		15.5		—		—		—
		$	2,318.9	$	(507.7)	$	1,811.2	$	2,357.6	$	(500.0)	$	1,857.6

(1) Excludes the original cost and related accumulated amortization of fully-amortized intangible assets.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

Amortization expense related to intangible assets totaled $21.5 million and $22.1 million for the three months ended September 30, 2024 and 2023, respectively, and $65.3 million and $66.5 million for the nine months ended September 30, 2024 and 2023, respectively.

The following table sets forth the remaining estimated amortization expense for intangible assets for the next five years and thereafter:


For the year ending December 31,	(In millions)
2024	$	22.0
2025	85.8
2026	80.4
2027	77.6
2028	75.9
Thereafter	677.3
Total	$	1,019.0

6. STOCK-BASED COMPENSATION

Wesco’s stock-based compensation awards consist of stock options, stock-settled stock appreciation rights, restricted stock units and performance-based awards. Compensation cost for all stock-based awards is measured at fair value on the date of grant and compensation cost is recognized, net of estimated forfeitures, over the service period for awards expected to vest. The fair value of stock options and stock-settled stock appreciation rights is determined using the Black-Scholes model. The fair value of restricted stock units and performance-based awards with performance conditions is determined by the grant-date closing price of Wesco’s common stock. The forfeiture assumption is based on Wesco’s historical participant behavior that is reviewed on at least an annual basis. For stock options and stock-settled stock appreciation rights that are exercised, and for restricted stock units and performance-based awards that vest, shares are issued out of Wesco's outstanding common stock.

Stock options and stock-settled stock appreciation rights vest ratably over a three-year period and terminate on the tenth anniversary of the grant date unless terminated sooner under certain conditions. Restricted stock unit awards that were granted under the Company’s 1999 Long-Term Incentive Plan, as amended and restated, vest fully on the third anniversary of the date of grant. Restricted stock units awarded under the WESCO International, Inc. 2021 Omnibus Incentive Plan, which was adopted on May 27, 2021, typically vest ratably over a three-year period on each of the first, second and third anniversaries of the grant date. Vesting of performance-based awards is based on a three-year performance period, and the number of shares earned, if any, depends on the attainment of certain performance levels, as described below. Outstanding awards would vest upon the consummation of a change in control transaction with performance-based awards vesting at the greater of the target level or actual.

Performance-based awards are based on two equally-weighted performance measures: the three-year average growth rate of Wesco’s net income attributable to common stockholders and the three-year cumulative return on net assets. These awards are accounted for as awards with performance conditions; compensation cost is recognized over the performance period based upon Wesco’s determination of whether it is probable that the performance targets will be achieved.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

During the three and nine months ended September 30, 2024 and 2023, Wesco granted the following stock options, restricted stock units, and performance-based awards at the following weighted-average fair values:


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Stock options granted	—		1,593		85,425		78,729
Weighted-average fair value	n/a		$	72.57	$	72.05	$	76.69

Restricted stock units granted	1,942		1,649		240,233		175,513
Weighted-average fair value	$	150.44	$	140.91	$	157.13	$	170.13

Performance-based awards granted(1)	540		662		194,105		212,107
Weighted-average fair value(1)	$	147.26	$	115.04	$	108.94	$	86.97

(1) As described further below, the nine months ended September 30, 2024 includes performance-based awards granted in February 2021 for which actual achievement levels were certified in February 2024, as well as performance-based awards granted during the nine months ended September 30, 2024.

The fair values of stock options, as disclosed in the table above, were estimated using the following weighted-average assumptions in the respective periods:


	Three Months Ended			Nine Months Ended
	September 30, 2024	September 30, 2023		September 30, 2024		September 30, 2023
Risk free interest rate	n/a	4.4	%	4.2	%	4.1	%
Expected life (in years)	n/a	5		5		5
Expected volatility	n/a	52	%	55	%	50	%
Expected dividend yield	n/a	0.96	%	1.09	%	0.89	%

The risk-free interest rate is based on the U.S. Treasury Daily Yield Curve rate as of the grant date. The expected life is based on historical exercise experience, the expected volatility is based on the volatility of the Company’s daily stock price over the expected life preceding the grant date of the award, and the expected dividend yield is based on the calculated yield on the Company’s common stock at date of grant using the current fiscal year projected dividend distribution rate.

The following table sets forth a summary of stock options and related information for the nine months ended September 30, 2024:


	Awards	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In years)	Aggregate Intrinsic Value (In millions)
Outstanding at December 31, 2023	163,082	$	144.51
Granted	85,425	152.07
Exercised	(3,053)	122.09
Forfeited	(6,343)	154.71
Outstanding at September 30, 2024	239,111	$	147.23	8.4	$	5.2
Exercisable at September 30, 2024	79,145	$	136.93	7.7	$	2.5

For the nine months ended September 30, 2024, the aggregate intrinsic value of stock options exercised during such period was not material.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

The following table sets forth a summary of stock-settled stock appreciation rights and related information for the nine months ended September 30, 2024:


	Awards	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In years)	Aggregate Intrinsic Value (In millions)
Outstanding at December 31, 2023	818,284	$	59.55
Granted	—	—
Exercised	(44,063)	62.58
Forfeited	(727)	76.25
Outstanding at September 30, 2024	773,494	$	59.37	4.4	$	84.0
Exercisable at September 30, 2024	773,494	$	59.37	4.4	$	84.0

For the nine months ended September 30, 2024, the aggregate intrinsic value of stock-settled stock appreciation rights exercised during such period was $4.7 million.

The following table sets forth a summary of restricted stock units and related information for the nine months ended September 30, 2024:


	Awards	Weighted- Average Fair Value
Unvested at December 31, 2023	407,613	$	127.49
Granted	240,233	157.13
Vested	(193,762)	115.40
Forfeited	(27,973)	142.78
Unvested at September 30, 2024	426,111	$	148.54

The following table sets forth a summary of performance-based awards and related information for the nine months ended September 30, 2024:


	Awards	Weighted- Average Fair Value
Unvested at December 31, 2023	254,859	$	115.15
Granted(1)	194,105	108.94
Vested	(223,042)	77.08
Forfeited	(7,065)	154.19
Unvested at September 30, 2024	218,857	$	147.18

(1) Includes 80,951 performance-based awards granted in February 2024 with a fair value of $152.07 and three-year performance period ending December 31, 2026, and 111,521 of additional performance-based awards related to awards originally granted in February 2021 with a fair value of $77.08 and three-year performance period ended December 31, 2023 for which actual achievement levels were certified in February 2024.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

Wesco recognized $6.8 million and $10.8 million of non-cash stock-based compensation expense for the three months ended September 30, 2024 and 2023, respectively, and $19.6 million and $34.7 million of non-cash stock-based compensation expense for the nine months ended September 30, 2024 and 2023, respectively, which is included in selling, general and administrative expenses for such periods. As of September 30, 2024, there was $60.4 million of total unrecognized compensation expense related to unvested stock-based compensation arrangements for all awards previously made, which is expected to be recognized as follows:


For the year ending December 31,	(In millions)
Remaining 2024	$	10.1
2025	28.3
2026	18.0
2027	3.7
2028	0.3

7. STOCKHOLDERS’ EQUITY

Share Repurchases

On May 31, 2022, the Company’s Board of Directors adopted a resolution authorizing the repurchase of up to $1 billion of the Company’s common stock and Series A Preferred Stock. The share repurchase authorization has no expiration date and may be modified, suspended, or terminated at any time without prior notice.

During the three and nine months ended September 30, 2024, the Company entered into spot repurchase transactions through brokers to purchase 161,614 and 2,183,937 shares, respectively, of its common stock in the open market for cash totaling $25.3 million and $378.8 million, respectively, including excise taxes. Wesco funded the repurchases with available cash and borrowings under its accounts receivable securitization and revolving credit facilities. During the three and nine months ended September 30, 2023, the Company entered into spot repurchase transactions through a broker to purchase 325,449 shares of its common stock totaling $50.5 million, including excise taxes. Wesco funded the repurchases with available cash and borrowings under its revolving credit facility.

Dividends

The Company’s dividends on common stock are declared at the discretion of the Board of Directors. The following table is a summary of cash dividends declared and paid on the Company’s common stock for the nine months ended September 30, 2024:


Date Declared	Record Date	Payment Date	Amount Per Share		Dividend Payment
February 29, 2024	March 15, 2024	March 29, 2024	$	0.413	$	20.9	million
May 30, 2024	June 14, 2024	June 28, 2024	$	0.413	$	20.3	million
August 29, 2024	September 13, 2024	September 30, 2024	$	0.413	$	20.2	million

The following table is a summary of cash dividends declared and paid on the Company’s common stock for the nine months ended September 30, 2023:


Date Declared	Record Date	Payment Date	Amount Per Share		Dividend Payment
March 3, 2023	March 15, 2023	March 31, 2023	$	0.375	$	19.2	million
June 1, 2023	June 15, 2023	June 30, 2023	$	0.375	$	19.2	million
August 31, 2023	September 15, 2023	September 29, 2023	$	0.375	$	19.1	million

During the three and nine months ended September 30, 2024 and 2023, the Company's Board of Directors also declared and the Company paid quarterly cash dividends of $0.664 per depositary share relating to its Series A Preferred Stock totaling $14.4 million and $43.1 million, respectively, each year.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

8. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the periods. Diluted earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average common shares and common share equivalents outstanding during the periods. The dilutive effect of common share equivalents is considered in the diluted earnings per share computation using the treasury stock method, which includes consideration of equity awards.

The following table sets forth the computation of basic and diluted earnings per share for the periods presented:


	Three Months Ended				Nine Months Ended
	September 30				September 30
(In millions, except per share data)	2024		2023		2024		2023
Net income attributable to WESCO International, Inc.	$	204.3	$	233.4	$	552.2	$	623.6
Less: Preferred stock dividends	14.4		14.4		43.1		43.1
Net income attributable to common stockholders	$	189.9	$	219.0	$	509.1	$	580.5
Weighted-average common shares outstanding used in computing basic earnings per share	49.1		51.2		50.0		51.2
Common shares issuable upon exercise of dilutive equity awards	0.7		1.0		0.8		1.2
Weighted-average common shares outstanding and common share equivalents used in computing diluted earnings per share	49.8		52.2		50.8		52.4
Earnings per share attributable to common stockholders
Basic	$	3.87	$	4.28	$	10.18	$	11.34
Diluted	$	3.81	$	4.20	$	10.02	$	11.08

The computation of diluted earnings per share attributable to common stockholders excludes stock-based awards that would have had an antidilutive effect on earnings per share. For the three and nine months ended September 30, 2024, there were approximately 0.2 million antidilutive shares. For the three and nine months ended September 30, 2023, there were approximately 0.1 million and 0.2 million antidilutive shares, respectively.

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(unaudited)

9. DEBT

The following table sets forth Wesco's outstanding indebtedness:


	As of
	September 30, 2024		December 31, 2023
	(In millions)
International lines of credit	$	0.8	$	1.0
Accounts Receivable Securitization Facility	1,450.0		1,550.0
Revolving Credit Facility	485.0		953.0
6.00% Anixter Senior Notes due 2025	4.2		4.2
7.125% Senior Notes due 2025	—		1,500.0
7.250% Senior Notes due 2028, less debt discount of $4.7 and $5.6 in 2024 and 2023, respectively	1,320.3		1,319.4
6.375% Senior Notes due 2029	900.0		—
6.625% Senior Notes due 2032	850.0		—
Finance lease obligations	58.2		31.4
Total debt	5,068.5		5,359.0
Plus: Fair value adjustments to the Anixter Senior Notes	0.1		0.1
Less: Unamortized debt issuance costs	(45.9)		(37.4)
Less: Short-term debt and current portion of long-term debt	(14.9)		(8.6)
Total long-term debt	$	5,007.8	$	5,313.1

Accounts Receivable Securitization Facility

On March 8, 2024, Wesco Distribution amended its accounts receivable securitization facility (the “Receivables Facility”) pursuant to the terms and conditions of an Eighth Amendment to Fifth Amended and Restated Receivables Purchase Agreement (the “Eighth Receivables Amendment”), by and among WESCO Receivables Corp., Wesco Distribution, the various purchasers and purchaser agents party thereto and PNC Bank, National Association, as administrator. The Eighth Receivables Amendment modified the receivables purchase agreement originally entered into on June 22, 2020 (the “Receivables Purchase Agreement”). The Eighth Receivables Amendment, among other things, (i) reduced the purchase limit under the Receivables Facility from $1,625 million to $1,550 million, (ii) increased the capacity to request increases in the purchase limit under the Receivables Facility from $125 million to $300 million, (iii) extended the termination date of the Receivables Facility to March 1, 2027, (iv) added a commercial paper funding option for any conduit purchaser funding its investment through issuances of notes, and (v) modified the drawn spread applicable to investments. No other material terms were changed.

Revolving Credit Facility

On March 6, 2024, Wesco Distribution amended its revolving credit facility (the “Revolving Credit Facility”) pursuant to the terms and conditions of a Sixth Amendment to Fourth Amended and Restated Credit Agreement (the “Sixth Revolver Amendment”). The Sixth Revolver Amendment amended the Revolving Credit Agreement to, among other things, modify the Canadian interest rate options and increase certain negative covenant baskets. No other material terms were changed.

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(unaudited)

7.125% Senior Notes due 2025

In June 2020, Wesco Distribution issued $1,500 million aggregate principal amount of 7.125% Senior Notes due 2025 (the “2025 Notes”) through a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The 2025 Notes were issued at a price of 100% of the aggregate principal amount and were issued pursuant to, and governed by, an indenture (the “2025 Notes Indenture”), dated as of June 12, 2020, between the Company, Wesco Distribution, and U.S. Bank National Association, as trustee. The 2025 Notes were unsecured and unsubordinated obligations of Wesco Distribution and were guaranteed on an unsecured, unsubordinated basis by the Company and Anixter Inc. The 2025 Notes had a stated interest rate of 7.125% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. The 2025 Notes had a maturity date of June 15, 2025 and were redeemable in whole or in part at a redemption price equal to 101.781% of the principal amount between June 15, 2023 and June 14, 2024 or 100% of the principal amount on and after June 15, 2024. The net proceeds from the issuance of the 2025 Notes, together with other borrowings and existing cash on hand, were used to finance the merger with Anixter Inc.

On May 20, 2024, Wesco Distribution exercised its right to redeem the entire outstanding $1,500 million aggregate principal amount of the 2025 Notes, and U.S. Bank Trust Company, National Association, as successor to U.S. Bank National Association, as trustee under the 2025 Notes Indenture, issued a notice of redemption to registered holders of the 2025 Notes.

On June 17, 2024, Wesco Distribution redeemed the $1,500 million aggregate principal amount of the 2025 Notes at a redemption price equal to 100% of the principal amount plus accrued interest up to, but not including, June 15, 2024. The redemption of the 2025 Notes was funded through the issuance of the 6.375% Senior Notes due 2029 (the “2029 Notes”) and the 6.625% Senior Notes due 2032 (the “2032 Notes” and, together with the 2029 Notes, the “2029 and 2032 Notes”) as described below. The Company recognized a non-cash loss of $6.8 million from the redemption of the 2025 Notes resulting from the write-off of unamortized debt issuance costs, which is recorded as a component of interest expense, net in the Condensed Consolidated Statement of Income and Comprehensive Income for the nine months ended September 30, 2024.

6.375% Senior Notes due 2029

6.625% Senior Notes due 2032

On March 7, 2024, Wesco Distribution issued $900 million aggregate principal amount of 6.375% senior notes due 2029 and $850 million aggregate principal amount of 6.625% senior notes due 2032. The 2029 and 2032 Notes were issued at a price of 100% of the aggregate principal amount. Wesco incurred costs related to the issuance of the 2029 Notes and 2032 Notes totaling $11.3 million and $10.6 million, respectively, which were recorded as a reduction to the carrying value of the debt and are being amortized over the respective lives of the notes.

The 2029 and 2032 Notes were issued pursuant to, and are governed by, an indenture (the “2029 and 2032 Notes Indenture”), dated as of March 7, 2024, among Wesco Distribution, the Company, Anixter Inc., and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The 2029 and 2032 Notes and related guarantees were issued in a private transaction exempt from the Securities Act.

The Company used the net proceeds from the issuance of the 2029 and 2032 Notes to redeem the 2025 Notes on June 17, 2024. Prior to repaying the 2025 Notes, the Company used the net proceeds temporarily to repay a portion of the amounts outstanding under its Receivables Facility and repaid all of the outstanding borrowings under its Revolving Credit Facility. The Company subsequently redrew under the Receivables Facility and the Revolving Credit Facility an aggregate amount sufficient to redeem the 2025 Notes.

The 2029 and 2032 Notes are unsecured and unsubordinated obligations of Wesco Distribution and are guaranteed on an unsecured, unsubordinated basis by the Company and Anixter Inc. The 2029 Notes accrue interest at a rate of 6.375% per annum, payable semi-annually in arrears on March 15 and September 15 of each year. The 2029 Notes will mature on March 15, 2029. The 2032 Notes accrue interest at a rate of 6.625% per annum, payable semi-annually in arrears on March 15 and September 15 of each year. The 2032 Notes will mature on March 15, 2032.

Wesco Distribution may redeem all or a part of the 2029 Notes at any time prior to March 15, 2026 by paying a “make-whole” premium plus accrued and unpaid interest, if any, to but excluding the redemption date. In addition, at any time prior to March 15, 2026, Wesco Distribution may redeem up to 35% of the original aggregate principal amount of the 2029 Notes with the net cash proceeds from certain equity offerings. At any time between March 15, 2026 and March 14, 2027, Wesco Distribution may redeem all or a part of the 2029 Notes at a redemption price equal to 103.188% of the principal amount. Between March 15, 2027 and March 14, 2028, Wesco Distribution may redeem all or a part of the 2029 Notes at a redemption price equal to 101.594% of the principal amount. On and after March 15, 2028, Wesco Distribution may redeem all or a part of the 2029 Notes at a redemption price equal to 100% of the principal amount.

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(unaudited)

Wesco Distribution may redeem all or a part of the 2032 Notes at any time prior to March 15, 2027 by paying a “make-whole” premium plus accrued and unpaid interest, if any, to but excluding the redemption date. In addition, at any time prior to March 15, 2027, Wesco Distribution may redeem up to 35% of the original aggregate principal amount of the 2032 Notes with the net cash proceeds from certain equity offerings. At any time between March 15, 2027 and March 14, 2028, Wesco Distribution may redeem all or a part of the 2032 Notes at a redemption price equal to 103.313% of the principal amount. Between March 15, 2028 and March 14, 2029, Wesco Distribution may redeem all or a part of the 2032 Notes at a redemption price equal to 101.657% of the principal amount. On and after March 15, 2029, Wesco Distribution may redeem all or a part of the 2032 Notes at a redemption price equal to 100% of the principal amount.

The 2029 and 2032 Notes Indenture contains certain covenants that, among other things, limit the Company’s and its restricted subsidiaries’ ability to incur liens on assets, make certain restricted payments, engage in certain sale and leaseback transactions or sell certain assets or merge or consolidate with or into other companies, subject to certain qualifications and exceptions, including the termination of certain of these covenants upon the 2029 and 2032 Notes receiving investment grade credit ratings.

The 2029 and 2032 Notes Indenture contains certain events of default, including, among other things, failure to make required payments, failure to comply with certain agreements or covenants, failure to pay or acceleration of certain other indebtedness, certain events of bankruptcy and insolvency, and failure to pay certain judgments. An event of default under the 2029 and 2032 Notes Indenture will allow either the Trustee or the holders of at least 25% in aggregate principal amount of the applicable series of the then-outstanding Notes to accelerate or, in certain cases, will automatically cause the acceleration of the amounts due under the applicable series of Notes.

10. EMPLOYEE BENEFIT PLANS

The following table sets forth the components of net periodic pension cost (benefit) for the Company’s defined benefit plans:


	Three Months Ended September 30
(In millions)	2024		2023		2024		2023		2024		2023
	Domestic Plan(1)				Foreign Plans(2)				Total
Service cost	$	—	$	—	$	0.4	$	1.2	$	0.4	$	1.2
Interest cost	—		4.6		3.2		2.9		3.2		7.5
Expected return on plan assets	—		(4.3)		(3.2)		(3.1)		(3.2)		(7.4)
Recognized actuarial gain(3)	—		—		(0.2)		(0.3)		(0.2)		(0.3)
Settlement	(2.2)		—		—		—		(2.2)		—
Net periodic pension (benefit) cost	$

WESCO INTERNATIONAL INC [WCC] Filings

WESCO INTERNATIONAL INC [WCC-PA] Filings