UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
   
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JuneSeptember 30, 2009
Or
   
o 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
(IRS Employer Identification No.)
incorporation or organization) 25-1723342
(IRS Employer Identification No.)
   
225 West Station Square Drive
Suite 700		  
Suite 700
Pittsburgh, Pennsylvania 15219
(412) 454-2200
(Address of principal executive offices) (412) 454-2200
(Registrant’s telephone number, including area code)
N/A
(Former name, or former address and former fiscal year, if changed since last report)
          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. Yesþ   Noo
          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405(§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yeso   Noo
          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
       
Large accelerated filerþ Accelerated filero Non-accelerated filero Smaller reporting companyo
    (Do not check if a smaller reporting company)  
          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso   Noþ
          As of July 30,November 2, 2009, WESCO International, Inc. had 42,245,06142,278,665 shares of common stock outstanding.
 
 

 

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
Table of Contents
     
  Page
PART I — FINANCIAL INFORMATION
    
     
Item 1.Financial Statements
    
Condensed Consolidated Balance Sheets as of JuneSeptember 30, 2009 and December 31, 2008 (unaudited)
  2 
Condensed Consolidated Statements of Income for the three months and sixnine months ended JuneSeptember 30, 2009 and 2008 (unaudited)
  3 
Condensed Consolidated Statements of Cash Flows for the sixnine months ended JuneSeptember 30, 2009 and 2008 (unaudited)
  4 
Notes to Condensed Consolidated Financial Statements (unaudited)
  5 
     
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
  19 
     
Item 3.Quantitative and Qualitative Disclosures About Market Risk
  2526 
     
Item 4.Controls and Procedures
  2526 
     
PART II — OTHER INFORMATION
    
     
Item 1.Legal Proceedings
  26
Item 4.Submissions of Matters to a Vote of Security Holders
2627 
     
Item 6.Exhibits
  27 
EX-10.1
Signatures and CertificationsEX-10.2
EX-10.3
EX-10.4
 EX-31.1
 EX-31.2
 EX-32.1
 EX-32.2

1

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
                
 June 30, December 31,  September 30, December 31, 
Amounts in thousands, except share data 2009 2008  2009 2008 
Assets
  
 
Current Assets:
  
Cash and cash equivalents $103,290 $86,338  $111,345 $86,338 
Trade accounts receivable, net of allowance for doubtful accounts of $21,349 and $19,665 in 2009 and 2008, respectively 680,499 791,356 
Trade accounts receivable, net of allowance for doubtful accounts of $22,414 and $19,665 in 2009 and 2008, respectively 663,433 791,356 
Other accounts receivable 40,211 42,758  46,851 42,758 
Inventories, net 516,738 605,678  495,301 605,678 
Current deferred income taxes 2,878 2,857  2,871 2,857 
Income taxes receivable 21,812 18,661  24,299 18,661 
Prepaid expenses and other current assets 14,346 10,015  13,748 10,015 
          
Total current assets 1,379,774 1,557,663  1,357,848 1,557,663 
 
Property, buildings and equipment, net 117,166 119,223  117,705 119,223 
Intangible assets, net 84,984 88,689  83,146 88,689 
Goodwill 863,173 862,778  863,339 862,778 
Investment in subsidiary 45,112 46,251  44,540 46,251 
Deferred income taxes 17,336 16,811  18,469 16,811 
Other assets 12,023 28,446  13,690 28,446 
          
Total assets $2,519,568 $2,719,861  $2,498,737 $2,719,861 
          
  
Liabilities and Stockholders’ Equity
  
  
Current Liabilities:
  
Accounts payable $487,541 $556,502  $494,845 $556,502 
Accrued payroll and benefit costs 26,074 49,753  28,691 49,753 
Short-term debt — 295,000  — 295,000 
Current portion of long-term debt 3,872 3,823  3,897 3,823 
Bank overdrafts 21,180 30,367  19,245 30,367 
Current deferred income taxes 1,601 1,516  1,705 1,516 
Other current liabilities 59,998 69,048  60,842 69,048 
          
Total current liabilities 600,266 1,006,009  609,225 1,006,009 
  
Long-term debt, net of discount of $32,810 and $40,501 in 2009 and 2008, respectively 929,905 801,427 
Long-term debt, net of discount of $183,942 and $40,501 in 2009 and 2008, respectively 701,047 801,427 
Deferred income taxes 142,218 136,736  199,411 136,736 
Other noncurrent liabilities 25,585 20,585  27,643 20,585 
          
Total liabilities $1,697,974 $1,964,757  $1,537,326 $1,964,757 
  
Commitments and contingencies  
  
Stockholders’ Equity:
  
Preferred stock, $.01 par value; 20,000,000 shares authorized, no shares issued or outstanding — —  — — 
Common stock, $.01 par value; 210,000,000 shares authorized, 55,827,671 and 55,788,620 shares issued and 42,278,390 and 42,239,962 shares outstanding in 2009 and 2008, respectively 558 557 
Common stock, $.01 par value; 210,000,000 shares authorized, 55,828,790 and 55,788,620 shares issued and 42,278,994 and 42,239,962 shares outstanding in 2009 and 2008, respectively 558 557 
Class B nonvoting convertible common stock, $.01 par value; 20,000,000 shares authorized, 4,339,431 issued and no shares outstanding in 2009 and 2008, respectively 43 43  43 43 
Additional capital 892,805 886,019  987,621 886,019 
Retained earnings 526,827 477,111  560,446 477,111 
Treasury stock, at cost; 17,888,712 and 17,888,089 shares in 2009 and 2008, respectively  (590,306)  (590,288)
Treasury stock, at cost; 17,889,227 and 17,888,089 shares in 2009 and 2008, respectively  (590,319)  (590,288)
Accumulated other comprehensive income  (8,333)  (18,338) 3,062  (18,338)
          
Total stockholders’ equity 821,594 755,104  961,411 755,104 
          
Total liabilities and stockholders’ equity $2,519,568 $2,719,861  $2,498,737 $2,719,861 
          
The accompanying notes are an integral part of the condensed consolidated financial statements.

2

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
                                
 Three Months Ended Six Months Ended Three Months Ended Nine Months Ended
 June 30, June 30, September 30, September 30,
Amounts in thousands, except per share data 2009 2008(1) 2009 2008(1) 2009 2008(1) 2009 2008(1)
Net sales $1,159,218 $1,587,753 $2,338,807 $3,052,960  $1,152,427 $1,628,087 $3,491,232 $4,681,046 
Cost of goods sold (excluding depreciation and amortization below) 935,306 1,277,423 1,876,763 2,446,985  931,536 1,311,731 2,808,296 3,758,716 
Selling, general and administrative expenses 169,914 206,802 357,347 418,442  168,309 211,262 525,658 629,704 
Depreciation and amortization 6,360 6,692 13,516 13,625  6,410 6,543 19,926 20,168 
    
Income from operations 47,638 96,836 91,181 173,908  46,172 98,551 137,352 272,458 
  
Interest expense, net 13,821 16,057 26,350 34,141  13,599 15,646 39,949 49,786 
Gain on debt exchange  (5,961) —  (5,961) — 
Other income  (1,101)  (2,638)  (2,727)  (5,383)  (1,391)  (2,274)  (4,118)  (7,657)
    
Income before income taxes 34,918 83,417 67,558 145,150  39,925 85,179 107,482 230,329 
  
Provision for income taxes 8,464 25,430 17,842 44,472  6,306 21,451 24,147 65,924 
    
Net income $26,454 $57,987 $49,716 $100,678  $33,619 $63,728 $83,335 $164,405 
    
  
Earnings per share :  
Basic $0.63 $1.36 $1.18 $2.36  $0.80 $1.51 $1.97 $3.87 
    
  
Diluted $0.62 $1.33 $1.17 $2.30  $0.79 $1.48 $1.95 $3.77 
    
 
(1) The balances reported for the three months and sixnine months ended JuneSeptember 30, 2008 have been revised as a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009 (see Note 3 Accounting for Convertible Debt Instruments)3).
The accompanying notes are an integral part of the condensed consolidated financial statements.

3

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
                
 Six Months Ended  Nine Months Ended 
 June 30,  September 30, 
Amounts in thousands 2009 2008(1)  2009 2008(1) 
   
Operating Activities:
  
Net income $49,716 $100,678  $83,335 $164,405 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization 13,516 13,625  19,926 20,168 
Amortization of debt issuance costs 2,029 1,680  2,862 2,525 
Amortization of debt discount 7,691 7,256  10,556 10,884 
Deferred income taxes 5,433  (7,931) 5,413  (6,716)
Stock-based compensation expense 6,319 6,466  9,787 9,703 
Gain on debt exchange  (5,961) 
Gain on sale of property, buildings and equipment  (362)  (2,216)  (308)  (2,114)
Loss on sale of subsidiary — 3,005  — 3,005 
Equity income, net of distributions in 2009 and 2008 of $3,395 and $2,769, respectively 668  (2,614)
Equity income, net of distributions in 2009 and 2008 of $4,786 and $5,857, respectively 668  (1,800)
Excess tax benefit from stock-based compensation  (155)  (9,408)  (197)  (9,457)
Interest related to uncertain tax positions 597 632  863 957 
Changes in assets and liabilities  
Trade and other receivables, net 132,937  (70,082) 148,858  (99,399)
Inventories, net 92,011  (3,867) 117,086  (14,348)
Prepaid expenses and other current assets  (5,580) 26,051   (8,577) 23,292 
Accounts payable  (72,623) 96,886   (69,698) 129,821 
Accrued payroll and benefit costs  (23,831)  (11,686)  (21,413)  (2,698)
Other current and noncurrent liabilities  (3,664)  (7,721)  (2,346)  (1,301)
          
Net cash provided by operating activities 204,702 140,754  290,854 226,927 
  
Investing Activities:
  
Capital expenditures  (6,224)  (19,603)  (10,505)  (26,947)
Acquisition payments  (122)  (3,251)  (214)  (3,289)
Proceeds from sale of subsidiary — 60,000  — 60,000 
Equity distribution 1,039 —  1,328 — 
Proceeds from sale of assets 98 3,809  111 3,794 
          
Net cash (used) provided by investing activities  (5,209) 40,955   (9,280) 33,558 
  
Financing Activities:
  
Short-term borrowings, net — 20,000  — 20,000 
Proceeds from issuance of long-term debt 248,200 369,400  305,700 523,400 
Repayments of long-term debt  (422,066)  (460,676)  (545,458)  (682,715)
Debt issuance costs  (1,890)  (45)  (13,261)  (45)
Proceeds from the exercise of stock options 312 9,370  312 9,357 
Excess tax benefit from stock-based compensation 155 9,408  197 9,457 
Repurchase of common stock  (18)  (64,815)  (30)  (78,852)
Decrease in bank overdrafts  (9,188)  (19,137)  (11,122)  (25,239)
Payments on capital lease obligations  (1,027)  (930)  (1,500)  (1,363)
          
Net cash used by financing activities  (185,522)  (137,425)  (265,162)  (226,000)
  
Effect of exchange rate changes on cash and cash equivalents 2,981  (1,049) 8,595  (3,512)
          
  
Net change in cash and cash equivalents 16,952 43,235  25,007 30,973 
Cash and cash equivalents at the beginning of period 86,338 72,297  86,338 72,297 
          
Cash and cash equivalents at the end of period $103,290 $115,532  $111,345 $103,270 
          
Supplemental disclosures:
  
Non-cash investing and financing activities:  
Property, buildings and equipment acquired through capital leases 728 1,442  805 1,990 
Issuance of long-term debt 345,000 — 
Reacquisition of long-term debt 357,411 — 
 
(1) The balances reported for the sixnine months ended JuneSeptember 30, 20082009 have been revised as a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009.2009 (see Note 3 Accounting for Convertible Debt Instruments)3).
The accompanying notes are an integral part of the condensed consolidated financial statements.

4

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. ORGANIZATION
     WESCO International, Inc. and its subsidiaries (collectively, “WESCO” or the “Company”), headquartered in Pittsburgh, Pennsylvania, is a full-line distributor of electrical supplies and equipment and is a provider of integrated supply procurement services with operations in the United States, Canada, Mexico, the United Kingdom, Nigeria, United Arab Emirates, Singapore, Australia and China. WESCO currently operates approximately 400380 full service branch locations and seven distribution centers (four in the United States and three in Canada.)
2. ACCOUNTING POLICIES
     Basis of Presentation
     The 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 statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in WESCO’s Current Report on Form 8-K dated July 27, 2009 filed with the SEC. The December 31, 2008 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.
     The unaudited condensed consolidated balance sheet as of JuneSeptember 30, 2009, the unaudited condensed consolidated statements of income for the three and sixnine months ended JuneSeptember 30, 2009 and 2008, respectively, and the unaudited condensed consolidated statements of cash flows for the sixnine months ended JuneSeptember 30, 2009 and 2008, 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. All adjustments reflected in the unaudited condensed consolidated financial statements are of a normal recurring nature unless indicated. Results for the interim periods presented are not necessarily indicative of the results to be expected for the full year.
     We evaluated subsequent events through November 6, 2009, which is the date the unaudited condensed consolidated financial statements were issued.
Reclassification
     Certain prior period balances within the balance sheet have been reclassified to conform with current year presentation.
     Recent Accounting Pronouncements
     In June 2009, the FASBFinancial Accounting Standards Board (the“FASB”) issued SFAS No. 168,Thenew guidance concerning the organization of authoritative guidance under U.S. GAAP. This new guidance created the FASB Accounting Standards Codification(the (the “Codification”)and The Hierarchy of Generally Accepted Accounting Principles.The Codification will become the single source of authoritative nongovernmental U.S. GAAP.. The Codification does not change current U.S. GAAP but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. The Codification will supersedesupersedes all existing accounting and reporting standards, and all other accounting literature not included in the Codification will becomeis nonauthoritative. The Codification is effective for interim and annual periods ending after September 15, 2009. The Codification isbecame effective for WESCO during the interim period endingended September 30, 2009 and willdid not have an impact on WESCO’s financial position, results of operations or cash flows.

5

3. CHANGE IN METHOD OF ACCOUNTING FOR CONVERTIBLE DEBT INSTRUMENTS
     On January 1, 2009, WESCO retrospectively applied the provisions of FSP APB 14-1,Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)(“FSP APB 14-1”),new guidance concerning convertible debt instruments to its 2.625% Convertible Senior Debentures due 2025 (the “2025 Debentures”) and 1.75% Convertible Senior Debentures due 2026 (the “2026 Debentures” and together with the 2025 Debentures, the “Debentures”). Prior to the adoption of FSP APB 14-1,this guidance, WESCO accounted for its convertible debt instruments solely as long-term debt. FSP APB 14-1The new guidance requires an issuer of certain convertible debt instruments to separately account for the liability and equity components of convertible debt instruments in a manner that reflects the issuer’s nonconvertiblenon-convertible debt borrowing rate. This accounting treatment results in an increase in non-cash interest reported in the financial statements, a decrease in long-term debt, an increase in equity and an increase in deferred income taxes.
     Proceeds of $150 million and $300 million were received in connection with the issuance of the 2025 Debentures and 2026 Debentures, respectively. WESCO utilized an interest rate of 6.0% for both the 2025 Debentures and 2026 Debentures to reflect the non-convertible marketdebt borrowing rate of its offerings upon issuance, which resulted in discounts of $21.3 million and $53.7 million, respectively, to the convertible note balances and a net increase in additional capital of $12.3 million and $31.2 million, respectively. In addition, financing costs related to the issuance of the Debentures were allocated between the debt and equity components. The debt discounts are being amortized over a five- yearfive-year period. The amortization period ends on October 15, 2010 for the 2025 Debentures and November 15, 2011 for the 2026 Debentures. Debt discount amortization of $7.7$0.7 million will be recognized over the remainder of 2009, $15.0$2.1 million in 2010, and $10.1less than $0.1 million in 2011. These amounts reflect the impact of the convertible debt exchange offer, which was completed on August 27, 2009 (see Note 7).
     As of JuneSeptember 30, 2009, the unamortized discount for the 2025 Debentures and 2026 Debentures was $5.8$2.9 million and $27.0$0.1 million, respectively. As of December 31, 2008, the unamortized discount for the 2025 Debentures and 2026 Debentures was $8.1 million and $32.4 million, respectively. The decrease in the unamortized discounts is due to the completion of the convertible debt exchange offer (see Note 7). The net carrying amounts of the liability components are classified as long-term debt in the consolidated balance sheets.
     In accordance with SFAS No. 109,Accounting for Income Taxes,     WESCO recorded a deferred tax liability for the basis difference associated with the liability components. The initial recognition of deferred taxes was recorded as an adjustment to additional capital. In subsequent periods, the deferred tax liability is reduced and a deferred tax benefit is recognized in earnings as the debt discount is amortized to pre-tax income.
     As described above, the Debentures accrue interest asat an effective interest rate of 6.0%. For the three months ended JuneSeptember 30, 2009 and 2008, interest expense for the 2025 Debentures and 2026 Debentures totaled $6.1$4.3 million and $5.9 million, respectively, of which $3.8$2.7 million and $3.6 million, respectively, was non-cash interest. For the sixnine months ended JuneSeptember 30, 2009 and 2008, interest expense for the 2025 Debentures and 2026 Debentures totaled $12.3$16.6 million and $11.8$17.8 million, respectively, of which $7.7$10.4 million and $7.3$10.9 million, respectively, was non-cash interest. Interest expense for the three and nine months ended September 30, 2009 reflects the impact of the convertible debt exchange (see Note 7).
     The following table provides the effect of applying FSP APB 14-1the new guidance on individual line items in the 2008 financial statements:
        
 Previously Reported Revised        
 Three Months Ended Three Months Ended Previously Reported Revised
 June 30, June 30, Three Months Ended Three Months Ended
 2008 2008 September 30, September 30,
Condensed Consolidated Statement of Income
  2008 2008
Interest expense, net $12,538 $16,057  $12,127 $15,646 
Income before income taxes 86,936 83,417  88,698 85,179 
Provision for income taxes 26,809 25,430  22,830 21,451 
Net Income 60,127 57,987  65,868 63,728 
Earnings per share:  
Basic 1.41 1.36  1.56 1.51 
Diluted 1.38 1.33  1.53 1.48 

6

        
 Previously Reported Revised        
 Six Months Ended Six Months Ended Previously Reported Revised
 June 30, June 30, Nine Months Ended Nine Months Ended
 2008 2008 September 30, September 30,
Condensed Consolidated Statement of Income
  2008 2008
Interest expense, net $27,103 $34,141  $39,229 $49,786 
Income before income taxes 152,188 145,150  240,886 230,329 
Provision for income taxes 47,231 44,472  70,062 65,924 
Net Income 104,957 100,678  170,824 164,405 
Earnings per share:  
Basic 2.46 2.36  4.02 3.87 
Diluted 2.39 2.30  3.92 3.77 
        
 Six Months Ended Six Months Ended        
 June 30, June 30, Nine Months Ended Nine Months Ended
 2008 2008 September 30, September 30,
Condensed Consolidated Statement of Cash Flows
  2008 2008
Net income $104,957 $100,678  $170,824 $164,405 
Adjustments to net income:  
Amortization of debt issuance costs 1,898 1,680  2,852 2,525 
Amortization of debt discount — 7,256  — 10,884 
Deferred income taxes  (5,172)  (7,931)  (2,578)  (6,716)
Net cash provided by operating activities 140,754 140,754  226,927 226,927 
4. STOCK-BASED COMPENSATION
     WESCO’s stock-based employee compensation plans are comprised of stock options, and stock-settled stock appreciation rights. Beginning January 1, 2006, WESCO adopted SFAS No. 123 (revised 2004),Share-Based Payment(“SFAS 123R”), using the modified prospective method. Under SFAS 123R, compensationrights and restricted stock units. 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-based awardsstock options and stock-settled appreciation rights is determined using the Black-Scholes valuation model. The fair value of restricted stock units is determined by the grant-date closing price of WESCO’s common stock. The forfeiture assumption is based on WESCO’s historical employee behavior that is reviewed on an annual basis. No dividends are assumed.
     During the three months ended JuneSeptember 30, 2009 and 2008 and sixnine months ended JuneSeptember 30, 2009 and 2008, WESCO granted the following stock-settled stock appreciation rights and restricted stock units at the following weighted average assumptions:
                        
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended Nine Months Ended
 2009 2008 2009 2008 September 30, September 30,
   2009 2008 2009 2008
Stock-settled appreciations rights granted 1,700 23,309 1,700 25,109 
Stock-settled appreciation rights granted 801,531 895,235 803,231 920,344
Restricted stock units 245,997 — 245,997 —
Risk free interest rate  2.0%  2.7%  2.0%  2.7% 2.3% 3.1% 2.3% 3.1%
Expected life 4.5 years 4 years 4.5 years 4 years  4.5 years 4 years 4.5 years 4 years
Expected volatility  50%  38%  50%  38% 51% 38% 51% 38%
     For the three and sixnine months ended JuneSeptember 30, 2009 and 2008, the weighted average fair value per equity awardstock-settled appreciation right granted was $10.86$11.15 and $12.80,$13.65, respectively. For the three and nine months ended September 30, 2009, the weighted average fair value per restricted stock unit granted was $25.37.
     WESCO recognized $3.5 million and $3.2 million of non-cash stock-based compensation expense, which is included in selling, general and administrative expenses, for the three months ended JuneSeptember 30, 2009 and 2008.2008, respectively. WESCO recognized $6.3$9.8 million and $6.5$9.7 million of non-cash stock-based compensation expense, which is included in selling, general and administrative expenses, for the sixnine months ended JuneSeptember 30, 2009 and 2008, respectively. As of JuneSeptember 30, 2009, there was $12.3$23.3 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements for all awards previously made, of which approximately $4.1$3.5 million is expected to be recognized over the remainder of 2009, $6.1$11.7 million in 2010, $2.0$6.3 million in 2011 and less than $0.1$1.8 million in 2012.

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     During the sixnine months ended JuneSeptember 30, 2009 and 2008, the total intrinsic value of awardsstock options and stock-settled stock appreciation rights exercised was $0.6 million and $25.7$26.1 million, respectively, and the total amount of cash received from the exercise of options was $0.3 million and $9.4 million, respectively. The tax benefitimpact associated with the exercise of awardsstock options and stock-settled stock appreciation rights for the threenine months ended JuneSeptember 30, 2009 and 2008 totaled $0.2was a detriment of $0.1 million and $9.4a benefit $9.5 million, respectively, and was recorded as a credit to additional paid-in capital.

7

     The following table sets forth a summary of both stock options and stock-settled stock appreciation rights and related information for the sixnine months ended JuneSeptember 30, 2009:
                                
 Weighted    Weighted   
 Average    Average   
 Weighted Remaining    Weighted Remaining   
 Average Contractual Aggregate  Average Contractual Aggregate 
 Exercise Term Intrinsic Value  Exercise Term Intrinsic Value 
 Awards Price (In Years) (In Thousands)  Awards Price (In Years) (In Thousands) 
Outstanding at December 31, 2008 3,933,035 $36.44  3,933,035 $36.44 
Granted 1,700 25.18  803,231 25.37 
Exercised  (47,587) 11.60   (83,587) 16.95 
Forfeited  (99,343) 43.37   (202,200) 44.71 
          
Outstanding at June 30, 2009 3,787,805 36.56 6.4 $12,276 
Outstanding at September 30, 2009 4,450,479 34.44 6.8 $19,500 
                  
Exercisable at June 30, 2009 2,368,672 $29.68 5.1 $12,239 
Exercisable at September 30, 2009 2,867,615 $34.26 5.5 $16,693 
                  
     The following table sets forth a summary of restricted stock units and related information for the nine months ended September 30, 2009:
         
      Weighted 
      Average 
      Fair 
  Awards  Value 
Unvested at December 31, 2008  —   — 
Granted  245,997  $25.37 
Vested  —   — 
Forfeited  —   — 
       
Unvested at September 30, 2009  245,997  $25.37 
       
5. EARNINGS PER SHARE
     Basic earnings per share are computed by dividing net income by the weighted average common shares outstanding during the periods. Diluted earnings per share are computed by dividing net income 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 stock-based compensation required by SFAS No. 123R and SFAS No. 128,Earnings Per Share.compensation.
     The following table sets forth the details of basic and diluted earnings per share:
                
 Three Months Ended  Three Months Ended 
 June 30,  September 30, 
Amounts in thousands, except share and per share data 2009 2008  2009 2008 
Net income reported(1)
 $26,454 $57,987  $33,619 $63,728 
          
Weighted average common shares outstanding used in computing basic earnings per share 42,267,444 42,502,707  42,278,729 42,154,940 
Common shares issuable upon exercise of dilutive stock options 473,656 1,114,188  479,142 944,697 
          
Weighted average common shares outstanding and common share equivalents used in computing diluted earnings per share 42,741,100 43,616,895  42,757,871 43,099,637 
          
  
Earnings per share:(1)
  
Basic $0.63 $1.36  $0.80 $1.51 
Diluted $0.62 $1.33  $0.79 $1.48 
 
(1) As a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009, net income and earnings per share were revised for the three months ended JuneSeptember 30, 2008 (see Note 3 Accounting for Convertible Debt Instruments)3).

8

                
 Six Months Ended  Nine Months Ended 
 June 30,  September 30, 
Amounts in thousands, except share and per share data 2009 2008  2009 2008 
Net income reported(1)
 $49,716 $100,678  $83,335 $164,405 
          
Weighted average common shares outstanding used in computing basic earnings per share 42,257,177 42,622,262  42,264,440 42,465,351 
Common shares issuable upon exercise of dilutive stock options 359,913 1,204,982  381,175 1,116,496 
          
Weighted average common shares outstanding and common share equivalents used in computing diluted earnings per share 42,617,090 43,827,244  42,645,615 43,581,847 
          
 
Earnings per share:(1)
  
Basic $1.18 $2.36  $1.97 $3.87 
Diluted $1.17 $2.30  $1.95 $3.77 
 
(1) As a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009, net income and earnings per share were revised for the sixnine months ended JuneSeptember 30, 2008 (see Note 3 Accounting for Convertible Debt Instruments)3).
     For the three months ended JuneSeptember 30, 2009 and 2008, the computation of diluted earnings per share excluded stock-settled stock appreciation rights of approximately 2.63.3 million and 1.12.0 million, respectively, at weighted average exercise prices of $47$42 per share and $63$52 per share, respectively. For the sixnine months ended JuneSeptember 30, 2009 and 2008, the computation of diluted earnings per share excluded stock-settled stock appreciation rights of approximately 3.03.7 million and 1.12.0 million, respectively, at weighted average exercise prices of $43$40 per share and $63$52 per share, respectively. These amounts were excluded because their effect would have been antidilutive.
     Under EITF Issue No. 04-8,The Effect of Contingently Convertible Instruments on Diluted Earnings Per Share, and EITF Issue No. 90-19, Convertible Bonds with Issuer Option to Settle for Cash upon Conversion, and becauseBecause of WESCO’s obligation to settle the par value of the 2025 Debentures, and the 2026 Debentures (collectively,and its 6.0% Convertible Senior Debentures due 2029 (the “2029 Debentures” and together with the 2025 Debentures and 2026 Debentures, the “Debentures”) in cash, WESCO is not required to include any shares underlying the Debentures in its diluted weighted average shares outstanding until the average stock price per share for the period exceeds the conversion price of the respective Debentures.Debentures (refer to Note 7 for additional information regarding the 2029 Debentures). At such time, only the number of shares that would be issuable (under the treasury stock method of accounting for share dilution) would be included, which is based upon the amount by which the average stock price exceeds the conversion price. The conversion prices of the 2029 Debentures, 2026 Debentures and 2025 Debentures are $28.87, $88.15 and $41.86, respectively. Share dilution is limited to a maximum of 3,403,11011,951,939 shares for the 2029 Debentures, 2,972 shares for the 2026 Debentures and 3,583,0802,205,434 shares for the 2025 Debentures. Share dilution for the 2025 Debentures and 2026 Debentures reflects the impact of the convertible debt exchange (see Note 7). Since the average stock price for the three and sixnine month periods ended JuneSeptember 30, 2009 and 2008 was less than the conversion prices, there was no impact of the Debentures on diluted earnings per share.
6. ACCOUNTS RECEIVABLE SECURITIZATION
     On April 13, 2009, WESCO Distribution Inc. (“WESCO Distribution”) entered into an amendment and restatement of its existing accounts receivable securitization facility (the “Receivables Facility”), pursuant to the terms and conditions of the Third Amended and Restated Receivables Purchase Agreement, dated as of April 13, 2009 (the “Restated Agreement”), by and among WESCO Receivables Corp., WESCO Distribution, the Purchasers and Purchaser Agents party thereto and PNC Bank, National Association (as successor to Wachovia Capital Markets, LLC), as Administrator. The Restated Agreement decreases the purchase commitment under the Receivables Facility from $500 million to $400 million, subject to the right of WESCO Distribution to increase the purchase commitment from time to time up to $450 million with the voluntary participation of existing Purchaserspurchasers and/or the addition of new Purchaserspurchasers to fund such increase. The Restated Agreement also extends the term of the Receivables Facility to April 13, 2012; accordingly, the outstanding borrowings under the Receivables Facility are classified as long-term debt in the consolidated balance sheet. The outstanding borrowings as of December 31, 2008 are classified as short-term debt because, prior to the Restated Agreement, third party conduits and financial institutions could under certain conditions require WESCO Distribution to repay all or a portion of the outstanding amount.
     Under the Receivables Facility, WESCO Distribution and certain of its domestic subsidiaries sell, on a continuous basis, an undivided interest in all domestic accounts receivable to WESCO Receivables Corp., a wholly-owned special purpose entity (the “SPE”). The SPE sells, without recourse, a senior undivided interest in the receivables to third-party conduits and financial institutions for cash while maintaining a subordinated undivided interest in the receivables, in the form of overcollateralization. WESCO Distribution has agreed to continue servicing the sold receivables for the third-party conduits and financial institutions at market rates; accordingly, no servicing asset or liability has been recorded.

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     As of JuneSeptember 30, 2009 and December 31, 2008, accounts receivable eligible for securitization totaled $467.5$452.1 million and $602.9 million, respectively. The consolidated balance sheets as of JuneSeptember 30, 2009 and December 31, 2008 reflect $125.0$50.0 million and $295.0 million, respectively, of account receivable balances legally sold to third party conduits and financial institutions, as well as borrowings for equal amounts. At JuneSeptember 30, 2009, the interest rate on borrowings under this facility was approximately 4.1%4.2%.
7.   6.0% CONVERTIBLE SENIOR DEBENTURES DUE 2029
     On August 27, 2009, WESCO International, Inc. (“WESCO International”) completed an exchange offer pursuant to which it issued $345.0 million aggregate principal amount of 2029 Debentures in exchange for approximately $299.7 million and $57.7 million aggregate principal amounts of its outstanding 2026 Debentures and 2025 Debentures, respectively. As a result of the debt exchange, WESCO recorded a gain of $6.0 million, which included the write-off of debt issuance costs. The 2029 Debentures were issued pursuant to an Indenture dated August 27, 2009 (the “Indenture”), with The Bank of New York Mellon, as trustee, and are unconditionally guaranteed on an unsecured senior subordinate basis by WESCO Distribution. As discussed in Note 3, WESCO separately accounts for the liability and equity components of its convertible debt instruments. WESCO utilized an interest rate of 13.875% to reflect the non-convertible debt borrowing rate of its offering upon issuance, which resulted in a $181.2 million discount to the 2029 Debenture balance and a net increase in additional capital of $106.8 million. In addition, the financing costs related to the issuance of the 2029 Debentures were allocated between the debt and equity components. WESCO is amortizing the debt discount over the life of the instrument. Non-cash interest expense of $0.2 million was recorded for the period from August 27, 2009 to September 30, 2009. The debt discount amortization will approximate $0.5 million for the remainder of 2009, $2.1 million in 2010, $2.4 million in 2011, $2.7 million in 2012, $3.1 million in 2013 and $3.6 million in 2014.
     While the 2029 Debentures accrue interest at an effective interest rate of 13.875% (as described above), the coupon interest rate of 6.0% per annum is payable in cash semi-annually in arrears on each March 15 and September 15, commencing March 15, 2010. Beginning with the six-month period commencing September 15, 2016, WESCO will also pay contingent interest in cash during any six-month period in which the trading price of the 2029 Debentures for each of the five trading days ending on the second trading day immediately preceding the first day of the applicable six-month interest period equals or exceeds 120% of the principal amount of the 2026 Debentures. During any interest period when contingent interest shall be payable, the contingent interest payable per $1,000 principal amount of 2029 Debentures will equal 0.25% of the average trading price of $1,000 principal amount of the 2029 Debentures during the five trading days immediately preceding the first day of the applicable six-month interest period. In accordance with guidance related to derivatives and hedging, the contingent interest feature of the 2029 Debentures is an embedded derivative that is not considered clearly and closely related to the host contract. The contingent interest component had no significant value at issuance or September 30, 2009.
     The 2029 Debentures are convertible into cash, and in certain circumstances, shares of WESCO International’s common stock, at any time on or after September 15, 2028, or prior to September 15, 2028 in certain circumstances. The 2029 Debentures will be convertible based on an initial conversion rate of 34.6433 shares of common stock per $1,000 principal amount of the 2029 Debentures (equivalent to an initial conversion price of approximately $28.87 per share). The conversion rate and conversion price may be adjusted under certain circumstances.
     At any time on or after September 15, 2016, the Company may redeem all or a part of the 2029 Debentures plus accrued and unpaid interest (including contingent interest and additional interest, if any) to, but not including, the redemption date. If WESCO International undergoes certain fundamental changes, as defined in the Indenture, prior to maturity, holders of the 2029 Debentures will have the right, at their option, to require WESCO International to repurchase for cash some or all of their 2029 Debentures at a repurchase price equal to 100% of the principal amount of the 2029 Debentures being repurchased, plus accrued and unpaid interest (including contingent interest and additional interest, if any) to, but not including, the repurchase date.

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     The following table sets forth the components of WESCO’s outstanding convertible debenture indebtedness:
                         
  September 30, 2009 December 31, 2008
          Net         Net
  Principal     Carrying Principal     Carrying
  Balance Discount Amount Balance Discount Amount
  (In thousands)
Convertible Debentures:                        
                         
2025 $92,327  $(2,870) $89,457  $150,000  $(8,121) $141,879 
                         
2026  262   (21)  241   300,000   (32,380)  267,620 
                         
2029  345,000   (181,051)  163,949   —   —   — 
                         
 
  $437,589  $(183,942) $253,647  $450,000  $(40,501) $409,499 
   
8. EQUITY INVESTMENT
     During the first quarter of 2008, WESCO and Deutsch Engineered Connecting Devices, Inc. (“Deutsch”) completed a transaction with respect to WESCO’s LADD operations, which resulted in a joint venture in which Deutsch owns a 60% interest and WESCO owns a 40% interest. Deutsch paid to WESCO aggregate considerationaccounts for its investment in the joint venture using the equity method of approximately $75 million, consisting of $60 million in cash plus a $15 million promissory note, which is included inaccounting. Accordingly, earnings from the joint venture are recorded as other accounts receivableincome in the consolidated balance sheet.statement of income. Deutsch is entitled, but not obliged, to acquire the remaining 40% after January 1, 2010. As a result of this transaction, WESCO recognized an after-tax loss of approximately $2.1 million during the first quarter of 2008. Deutsch paid to WESCO aggregate consideration of approximately $75 million, consisting of $60 million in cash plus a $15 million promissory note, which is included in other accounts for its investment in the joint venture using the equity method of accounting as prescribed by Accounting Principles Board No. 18,The Equity Method of Accounting for Investments in Common Stock. Accordingly, earnings from the joint venture are recorded as other incomereceivable in the consolidated statementbalance sheet.
     Principal and accrued interest on the promissory note are due and payable to WESCO on January 1, 2010. Based on discussions with Deutsch, management believes the repayment terms of income.the promissory note may require modification; however, such discussions are ongoing and management continues to believe the book value of the promissory note reflects its collectability. As such, no reserve or allowance has been recorded against the promissory note. Management cannot provide any assurance that there will not be events that could adversely affect the collectability of the promissory note in future periods.
8.9. EMPLOYEE BENEFIT PLANS
     A majority of WESCO’s employees are covered by defined contribution retirement savings plans for their services rendered subsequent to WESCO’s formation. WESCO also offers a deferred compensation plan for select individuals. For U.S. participants, WESCO will make contributions in an amount equal to 50% of the participant’s total monthly contributions a matching contribution, up to a maximum of 6% of eligible compensation. For Canadian participants, WESCO will make contributions in an amount ranging from 1% to 7% of the participant’s eligible compensation based on years of continuous service. In addition, employer contributions may be made at the discretion of the Board of Directors. For the sixnine months ended JuneSeptember 30, 2009 and 2008, WESCO incurred charges of $5.0$7.4 million and $12.3$15.2 million, respectively, for all such plans. Effective August 1, 2009, WESCO suspended all discretionary contributions. Contributions are made in cash to employee retirement savings plan accounts. Employees then have the option to transfer balances allocated to their accounts into any of the available investment options, including WESCO common stock.
9.10. COMMITMENTS AND CONTINGENCIES
     WESCO is a co-defendant in a lawsuit filed in a state court in Indiana in which a customer alleges that WESCO sold defective products manufactured or remanufactured by others and is seeking monetary damages in the amount of $52 million. WESCO has denied any liability, believes that it has meritorious defenses and intends to vigorously defend itself against these allegations. Accordingly, no liability is recorded for this matter as of JuneSeptember 30, 2009.

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10.11. COMPREHENSIVE INCOME
     The following tables set forth comprehensive income and its components:
                
 Three Months Ended  Three Months Ended 
 June 30,  September 30, 
Amounts in thousands 2009 2008(1)  2009 2008 (1) 
Net income $24,454 $57,987  $33,619 $63,728 
Foreign currency translation adjustment 16,011 2,324  11,395  (7,517)
          
Comprehensive income $40,465 $60,311  $45,014 $56,211 
          
(1)As a result of the retrospective application of new FASB guidance related to convertible debt instruments on January 1, 2009, net income and comprehensive income were revised for the three months ended September 30, 2008 (see Note 3).
         
  Nine Months Ended 
  September 30, 
Amounts in thousands 2009  2008 (1) 
Net income $83,335  $164,405 
Foreign currency translation adjustment  21,400   (11,950)
       
Comprehensive income $104,735  $152,455 
       
 
(1) As a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009, net income and comprehensive income were revised for the threenine months ended JuneSeptember 30, 2008 (see Note 3 Accounting for Convertible Debt Instruments)3).
         
  Six Months Ended 
  June 30, 
Amounts in thousands 2009  2008(1) 
Net income $49,716  $100,678 
Foreign currency translation adjustment  10,005   (4,433)
       
Comprehensive income $59,721  $96,245 
       
(1)As a result of the retrospective application of FSP ABP 14-1 on January 1, 2009, net income and comprehensive income were revised for the six months ended June 30, 2008 (see Note 3 Accounting for Convertible Debt Instruments).

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11.12. SHARE REPURCHASE PLAN
     On September 28, 2007, WESCO announced that its Board of Directors authorized a stock repurchase program in the amount of up to $400 million with an expiration date ofmillion. The program expired on September 30, 2009. The shares may bewere repurchased from time to time in the open market or through privately negotiated transactions. The stock repurchase program may be implemented or discontinued at any time by WESCO. No shares were repurchased during the three or sixnine months ended JuneSeptember 30, 2009.

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12.13. INCOME TAXES
     The following tables set forth the reconciliation between the federal statutory income tax rate and the effective rate:
                
 Three Months Ended Three Months Ended
 June 30, September 30,
 2009 2008(2) 2009 2008(2)
Federal statutory rate  35.0%  35.0%  35.0%  35.0%
State taxes, net of federal tax benefit 2.2 2.0  1.3 1.6 
Nondeductible expenses 1.1 0.6  0.8 0.6 
Domestic tax benefit from foreign operations  (1.4)  (0.4) 0.2  (2.1)
Foreign tax rate differences(1)
  (12.8)  (7.8)  (17.9)  (9.6)
Domestic production activity deduction  (0.6)  (0.2) 0.1  (0.3)
Adjustment related to uncertain tax positions 0.8 1.0  1.4 — 
Revaluation of deferred tax items  (4.5) — 
Other  (0.1) 0.3   (0.6) — 
          
  24.2%  30.5%  15.8%  25.2%
          
                
 Six Months Ended Nine Months Ended
 June 30, September 30,
 2009 2008(2) 2009 2008(2)
Federal statutory rate  35.0%  35.0%  35.0%  35.0%
State taxes, net of federal tax benefit 2.6 2.2  2.2 2.0 
Nondeductible expenses 0.7 0.5  0.8 0.6 
Domestic tax benefit from foreign operations  (1.1)  (0.4)  (0.7)  (1.1)
Foreign tax rate differences(1)
  (10.5)  (7.2)  (13.3)  (8.1)
Domestic production activity deduction  (0.5)  (0.2)  (0.3)  (0.2)
Adjustment related to uncertain tax positions 0.6 0.4  0.9 0.2 
Revaluation of deferred tax items  (1.6) — 
Other  (0.4) 0.3   (0.5) 0.2 
          
  26.4%  30.6%  22.5%  28.6%
          
 
(1) Includes a benefit of $4.3$6.8 million and $5.9$6.4 million for the three months ended JuneSeptember 30, 2009 and 2008, respectively, and $6.7$13.5 million and $9.4$15.8 million for the sixnine months ended JuneSeptember 30, 2009 and 2008, respectively, from the recapitalization of Canadian operations.
 
(2) As a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009, the effective rate was revised for the three and sixnine months ended JuneSeptember 30, 20092008 (see Note 3 Accounting for Convertible Debt Instruments)3).
     In accordance with FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109,WESCO analyzes its filing positions for all open tax years in all jurisdictions. The Company is currently under examination in several tax jurisdictions, both within the United States and outside the United States, and remains subject to examination until the statute of limitations expires for the respective tax jurisdictions. The following summary sets forth the tax years that remain open in the Company’s major tax jurisdictions:
     
  United States — Federal 2000 and forward
  United States — States 2004 and forward
  Canada 1996 and forward
     During the next twelve months, it is reasonably possible that certain issues will be settled by the resolution of Internal Revenue Service tax examinations or the expiration of statutes of limitations. An estimate of the amount of change in unrecognized tax benefits cannot be made at this time as the outcome of the audits and the timing of the settlements are subject to significant uncertainty.

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     The total amounts of unrecognized tax benefits were $8.1$8.4 million and $7.5 million as of JuneSeptember 30, 2009 and December 31, 2008, respectively. If these tax benefits were recognized in the consolidated financial statements, the portion of these amounts that would reduce the Company’s effective tax rate would be $6.9$7.2 million and $6.3 million, respectively. WESCO records interest related to uncertain tax positions as a part of interest expense in the consolidated statement of income. Any penalties are recognized as part of income tax expense. As of JuneSeptember 30, 2009 and December 31, 2008, WESCO had an accrued liability of $4.1$4.3 million and $3.5 million, respectively, for interest related to uncertain tax positions. There were no penalties recorded during the three and sixor nine months ended JuneSeptember 30, 2009.

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13.14. OTHER FINANCIAL INFORMATION
     WESCO Distribution, Inc. (“a wholly owned subsidiary of WESCO Distribution”)International, has outstanding $150$150.0 million in aggregate principal amount of 7.50% Senior Subordinated Notes due 2017 (the “2017 Notes”), and WESCO International Inc. has outstanding $150$92.3 million in aggregate principal amount of 2025 Debentures, and $300$0.3 million in aggregate principal amount of 2026 Debentures and $345.0 million in aggregate principal amount of 2029 Debentures. The 2017 Notes are fully and unconditionally guaranteed by WESCO International, Inc. on a subordinated basis to all existing and future senior indebtedness of WESCO International, Inc.International. The 2025 Debentures, 2026 Debentures and 20262029 Debentures are fully and unconditionally guaranteed by WESCO Distribution on a senior subordinated basis to all existing and future senior indebtedness of WESCO Distribution.
     Condensed consolidating financial information for WESCO International, Inc., WESCO Distribution and the non-guarantor subsidiaries is as follows:

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WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
                     
  June 30, 2009
  (In thousands)
              Consolidating  
  WESCO WESCO Non-Guarantor and Eliminating  
  International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated
   
Cash and cash equivalents $(3) $23,154  $80,139  $—  $103,290 
Trade accounts receivable, net  —   —   680,499   —   680,499 
Inventories, net  —   325,785   190,953   —   516,738 
Other current assets  —   26,020   53,227   —   79,247 
   
Total current assets  (3)  374,959   1,004,818   —   1,379,774 
Intercompany receivables, net  —   (1,261,197)  1,749,172   (487,975)  — 
Property, buildings and equipment, net  —   44,548   72,618   —   117,166 
Intangible assets, net  —   9,126   75,858   —   84,984 
Goodwill and other intangibles, net  —   395,546   467,627   —   863,173 
Investments in affiliates and other noncurrent assets  1,726,762   3,121,231   24,972   (4,798,494)  74,471 
   
Total assets  1,726,759  $2,684,213  $3,395,065  $(5,286,469) $2,519,568 
   
                     
Accounts payable $—  $405,837  $81,704  $—  $487,541 
Short-term debt  —   —   —   —   — 
Other current liabilities  —   37,866   74,859   —   112,725 
   
Total current liabilities  —   443,703   156,563   —   600,266 
Intercompany payables, net  487,975   —   —   (487,975)  — 
Long-term debt  417,190   347,690   165,025   —   929,905 
Other noncurrent liabilities  —   165,946   1,857   —   167,803 
Stockholders’ equity  821,594   1,726,874   3,071,620   (4,798,494)  821,594 
   
Total liabilities and stockholders’ equity $1,726,759  $2,684,213  $3,395,065  $(5,286,469) $2,519,568 
   
                                            
 December 31, 2008 September 30, 2009
 (In thousands) (In thousands)
 Consolidating   Consolidating  
 WESCO WESCO Non-Guarantor and Eliminating   WESCO WESCO Non-Guarantor and Eliminating  
 International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated
    
Cash and cash equivalents $— $18,453 $67,885 $— $86,338  $5 $19,952 $91,388 $— $111,345 
Trade accounts receivable, net — — 791,356 — 791,356  — — 663,433 — 663,433 
Inventories, net — 421,178 184,500 — 605,678  — 306.925 188,376 — 495,301 
Other current assets  (12,100) 44,469 41,922 — 74,291  — 33,619 54,150 — 87,769 
    
Total current assets  (12,100) 484,100 1,085,663 — 1,557,663  5 360,496 997,347 — 1,357,848 
Intercompany receivables, net —  (1,367,199) 1,862,220  (495,021) —  —  (1,206,077) 1,740,040  (533,963) — 
Property, buildings and equipment, net — 46,389 72,834 — 119,223  — 45,312 72,393 — 117,705 
Intangible assets, net — 9,549 79,140 — 88,689  — 8,915 74,231 — 83,146 
Goodwill and other intangibles, net — 395,546 467,232 — 862,778  — 395,546 467,793 — 863,339 
Investments in affiliates and other noncurrent assets 1,671,724 3,074,554 19,133  (4,673,903) 91,508  1,772,543 3,156,712 21,808  (4,874,364) 76,699 
    
Total assets $1,659,624 $2,642,939 $3,586,222 $(5,168,924) $2,719,861  $1,772,548 $2,760,904 $3,373,612 $(5,408,327) $2,498,737 
    
 
Accounts payable $— $433,636 $122,866 $— $556,502  $— $392,875 $101,970 $— $494,845 
Short-term debt — — 295,000 — 295,000  — — — — — 
Other current liabilities — 80,786 73,721 — 154,507  — 42,192 72,188 — 114,380 
    
Total current liabilities — 514,422 491,587 — 1,006,009  — 435,067 174,158 — 609,225 
Intercompany payables, net 495,021 — —  (495,021) —  533,963 — —  (533,963) — 
Long-term debt 409,499 350,601 41,327 — 801,427  253,647 357,765 89,635 — 701,047 
Other noncurrent liabilities — 111,422 45,899 — 157,321  23,527 201,654 1,873 — 227,054 
Stockholders’ equity 755,104 1,666,494 3,007,409  (4,673,903) 755,104  961,411 1,766,418 3,107,946  (4,874,364) 961,411 
    
Total liabilities and stockholders’ equity $1,659,624 $2,642,939 $3,586,222 $(5,168,924) $2,719,861  $1,772,548 $2,760,904 $3,373,612 $(5,408,327) $2,498,737 
    
 December 31, 2008
 (In thousands)
 Consolidating  
 WESCO WESCO Non-Guarantor and Eliminating  
 International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated
  
Cash and cash equivalents $— $18,453 $67,885 $— $86,338 
Trade accounts receivable, net — — 791,356 — 791,356 
Inventories, net — 421,178 184,500 — 605,678 
Other current assets  (12,100) 44,469 41,922 — 74,291 
  
Total current assets  (12,100) 484,100 1,085,663 — 1,557,663 
Intercompany receivables, net —  (1,367,199) 1,862,220  (495,021) — 
Property, buildings and equipment, net — 46,389 72,834 — 119,223 
Intangible assets, net — 9,549 79,140 — 88,689 
Goodwill and other intangibles, net — 395,546 467,232 — 862,778 
Investments in affiliates and other noncurrent assets 1,671,724 3,074,554 19,133  (4,673,903) 91,508 
  
Total assets $1,659,624 $2,642,939 $3,586,222 $(5,168,924) $2,719,861 
  
 
Accounts payable $— $433,636 $122,866 $— $556,502 
Short-term debt — — 295,000 — 295,000 
Other current liabilities — 80,786 73,721 — 154,507 
  
Total current liabilities — 514,422 491,587 — 1,006,009 
Intercompany payables, net 495,021 — —  (495,021) — 
Long-term debt 409,499 350,601 41,327 — 801,427 
Other noncurrent liabilities — 111,422 45,899 — 157,321 
Stockholders’ equity 755,104 1,666,494 3,007,409  (4,673,903) 755,104 
  
Total liabilities and stockholders’ equity $1,659,624 $2,642,939 $3,586,222 $(5,168,924) $2,719,861 
  

1315

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
                     
  Three Months Ended June 30, 2009
  (In thousands)
              Consolidating  
  WESCO WESCO Non-Guarantor and Eliminating  
  International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated
   
Net sales $—  $785,493  $373,725  $—  $1,159,218 
Cost of goods sold  —   638,641   296,665   —   935,306 
Selling, general and administrative expenses  2   129,201   40,711   —   169,914 
Depreciation and amortization  —   6,605   (245)  —   6,360 
Results of affiliates’ operations  26,745   46,910   —   (73,655)  — 
Interest expense, net  289   28,022   (14,490)  —   13,821 
Other income  —   (1,101)  —   —   (1,101)
Provision for income taxes  —   4,290   4,174   —   8,464 
   
                     
Net income $26,454  $26,745  $46,910  $(73,655) $26,454 
   
                        
 Three Months Ended September 30, 2009 
 (In thousands) 
 Consolidating   
 WESCO WESCO Non-Guarantor and Eliminating   
 International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated 
  
Net sales $— $767,537 $384,890 $— $1,152,427 
Cost of goods sold — 624,784 306,752 — 931,536 
Selling, general and administrative expenses 20 131,880 36,409 — 168,309 
Depreciation and amortization — 4,990 1,420 — 6,410 
Results of affiliates’ operations 28,148 36,328 —  (64,476) — 
Interest expense, net 470 14,907  (1,778) — 13,599 
Gain on debt exchange  (5,961) — — —  (5,961) 
Other income —  (1,391) — —  (1,391) 
Provision for income taxes — 547 5,759 — 6,306 
  
 
Net income $33,619 $28,148 $36,328 $(64,476) $33,619 
  
                    
 Three Months Ended June 30, 2008(1) Three Months Ended September 30, 2008(1)
 (In thousands) (In thousands) 
 Consolidating   Consolidating   
 WESCO WESCO Non-Guarantor and Eliminating   WESCO WESCO Non-Guarantor and Eliminating   
 International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated 
    
Net sales $— $1,142,129 $445,624 $— $1,587,753  $— $1,167,773 $460,314 $— $1,628,087 
Cost of goods sold — 932,055 345,368 — 1,277,423  — 952,945 358,786 — 1,311,731 
Selling, general and administrative expenses 2 161,493 45,307 — 206,802  1 159,532 51,729 — 211,262 
Depreciation and amortization — 3,540 3,152 — 6,692  — 3,394 3,149 — 6,543 
Results of affiliates’ operations 55,839 34,814 —  (90,653) —  61,589 31,873 —  (93,462) — 
Interest (income) expense, net  (2,150) 6,048 12,159 — 16,057   (2,140) 4,811 12,975 — 15,646 
Other income —  (2,638) — —  (2,638) —  (2,274) — —  (2,274) 
Provision for income taxes — 20,606 4,824 — 25,430  — 19,649 1,802 — 21,451 
    
  
Net income $57,987 $55,839 $34,814 $(90,653) $57,987  $63,728 $61,589 $31,873 $(93,462) $63,728 
    
 
(1) The balances reported for the three months ended JuneSeptember 30, 2008 have been revised as a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009 (see Note 3 Accounting for Convertible Debt Instruments)3).

1416

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
                     
  Six Months Ended June 30, 2009
  (In thousands)
              Consolidating  
  WESCO WESCO Non-Guarantor and Eliminating  
  International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated
   
Net sales $—  $1,620,362  $718,445  $—  $2,338,807 
Cost of goods sold  —   1,311,366   565,397   —   1,876,763 
Selling, general and administrative expenses  4   274,834   82,509   —   357,347 
Depreciation and amortization  —   10,199   3,317   —   13,516 
Results of affiliates’ operations  50,374   64,210   —   (114,584)  — 
Interest expense, net  654   31,556   (5,860)  —   26,350 
Other income  —   (2,727)  —   —   (2,727)
Provision for income taxes  —   8,970   8,872   —   17,842 
   
                     
Net income $49,716  $50,374  $64,210  $(114,584) $49,716 
   
                        
 Nine Months Ended September 30, 2009
 (In thousands) 
 Consolidating   
 WESCO WESCO Non-Guarantor and Eliminating   
 International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated 
  
Net sales $— $2,387,898 $1,103,334 $— $3,491,232 
Cost of goods sold — 1,936,150 872,146 — 2,808,296 
Selling, general and administrative expenses 24 406,714 118,920 — 525,658 
Depreciation and amortization — 15,189 4,737 — 19,926 
Results of affiliates’ operations 78,522 100,539 —  (179,061) — 
Interest expense, net 1,124 46,463  (7,638) — 39,949 
Gain on debt exchange  (5,961) — — —  (5,961) 
Other income —  (4,118) — —  (4,118) 
Provision for income taxes — 9,517 14,630 — 24,147 
  
 
Net income $83,335 $78,522 $100,539 $(179,061) $83,335 
  
                    
 Six Months Ended June 30, 2008(1) Nine Months Ended September 30, 2008(1)
 (In thousands) (In thousands) 
 Consolidating   Consolidating   
 WESCO WESCO Non-Guarantor and Eliminating   WESCO WESCO Non-Guarantor and Eliminating   
 International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated 
    
Net sales $— $2,177,643 $875,317 $— $3,052,960  $— $3,345,416 $1,335,630 $— $4,681,046 
Cost of goods sold — 1,768,537 678,448 — 2,446,985  — 2,721,482 1,037,234 — 3,758,716 
Selling, general and administrative expenses 4 331,137 87,301 — 418,442  5 490,669 139,030 — 629,704 
Depreciation and amortization — 7,315 6,310 — 13,625  — 10,708 9,460 — 20,168 
Results of affiliates’ operations 95,079 70,220 —  (165,299) —  156,668 102,094 —  (258,762) — 
Interest (income) expense, net  (5,603) 15,858 23,886 — 34,141   (7,742) 20,669 36,859 — 49,786 
Other income —  (5,383) — —  (5,383) —  (7,657) — —  (7,657) 
Provision for income taxes — 35,320 9,152 — 44,472  — 54,971 10,953 — 65,924 
    
  
Net income $100,678 $95,079 $70,220 $(165,299) $100,678  $164,405 $156,668 $102,094 $(258,762) $164,405 
    
 
(1) The balances reported for the sixnine months ended JuneSeptember 30, 2008 have been revised as a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009 (see Note 3 Accounting for Convertible Debt Instruments)3).

1517

WESCO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                     
  Six Months Ended June 30, 2009
  (In thousands)
              Consolidating  
  WESCO WESCO Non-Guarantor and Eliminating  
  International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated
   
Net cash provided by operating activities $6,594  $185,789  $12,319  $—  $204,702 
Investing activities:                    
Capital expenditures  —   (5,826)  (398)  —   (6,224)
Acquisition payments  —   (122)  —   —   (122)
Equity income, net of distributions  —   1,039   —   —   1,039 
Other  —   98   —   —   98 
   
Net cash used by investing activities  —   (4,811)  (398)  —   (5,209)
Financing activities:                    
Net repayments  (7,046)  (166,062)  (758)  —   (173,866)
Equity transactions  449   —   —   —   449 
Other  —   (10,215)  (1,890)  —   (12,105)
   
Net cash used by financing activities  (6,597)  (176,277)  (2,648)  —   (185,522)
   
Effect of exchange rate changes on cash and cash equivalents  —   —   2,981   —   2,981 
   
Net change in cash and cash equivalents  (3)  4,701   12,254   —   16,952 
Cash and cash equivalents at the beginning of year  —   18,453   67,885   —   86,338 
   
Cash and cash equivalents at the end of period $(3) $23,154  $80,139  $—  $103,290 
   
                                            
 Six Months Ended June 30, 2008(1) Nine Months Ended September 30, 2009
 (In thousands) (In thousands) 
 Consolidating   Consolidating   
 WESCO WESCO Non-Guarantor and Eliminating   WESCO WESCO Non-Guarantor and Eliminating   
 International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated 
    
Net cash (used) provided by operating activities $(1,393) $113,391 $28,756 $— $140,754  $(39,415) $300,348 $29,921 $— $290,854 
Investing activities: 
Capital expenditures —  (9,900)  (605) —  (10,505) 
Acquisition payments —  (214) — —  (214) 
Equity income, net of distributions — 1,328 — — 1,328 
Other — 111 — — 111 
  
Net cash used by investing activities —  (8,675)  (605) —  (9,280) 
Financing activities: 
Net repayments 38,942  (279,052)  (1,148) —  (241,258) 
Equity transactions 479 — — — 479 
Other —  (11,122)  (13,261) —  (24,383) 
  
Net cash provided (used) by financing activities 39,421  (290,174)  (14,409) —  (265,162) 
  
Effect of exchange rate changes on cash and cash equivalents — — 8,595 — 8,595 
  
Net change in cash and cash equivalents 6 1,499 23,502 — 25,007 
Cash and cash equivalents at the beginning of year — 18,453 67,885 — 86,338 
  
Cash and cash equivalents at the end of period $6 $19,952 $91,387 $— $111,345 
  
 Nine Months Ended September 30, 2008(1)
 (In thousands) 
 Consolidating   
 WESCO WESCO Non-Guarantor and Eliminating   
 International, Inc. Distribution, Inc. Subsidiaries Entries Consolidated 
  
Net cash provided by operating activities $8,135 $196,725 $22,067 $— $226,927 
Investing activities:  
Capital expenditures —  (18,870)  (733) —  (19,603) —  (25,607)  (1,340) —  (26,947) 
Acquisition payments —  (3,251) — —  (3,251) —  (3,289) — —  (3,289) 
Proceeds from sale of subsidiary — 60,000 — — 60,000  — 60,000 — — 60,000 
Other — 3,809 — — 3,809  — 3,794 — — 3,794 
    
Net cash provided (used) by investing activities — 41,688  (733) — 40,955  — 34,898  (1,340) — 33,558 
Financing activities:  
Net borrowings (repayments) 47,439  (118,035)  (680) —  (71,276) 51,910  (190,204)  (1,021) —  (139,315) 
Equity transactions  (46,037) — — —  (46,037)  (60,038) — — —  (60,038) 
Other —  (20,067)  (45) —  (20,112) —  (26,602)  (45) —  (26,647) 
    
Net cash provided (used) by financing activities 1,402  (138,102)  (725) —  (137,425)
Net cash used by financing activities  (8,128)  (216,806)  (1,066) —  (226,000) 
    
Effect of exchange rate changes on cash and cash equivalents — —  (1,049) —  (1,049) — —  (3,512) —  (3,512) 
    
Net change in cash and cash equivalents 9 16,977 26,249 — 43,235  7 14,817 16,149 — 30,973 
Cash and cash equivalents at the beginning of year  (7) 32,140 40,164 — 72,297   (7) 32,140 40,164 — 72,297 
    
Cash and cash equivalents at the end of period $2 $49,117 $66,413 $— $115,532  $— $46,957 $56,313 $— $103,270 
    
 
(1) The balances reported for net cash (used) provided by operating activities for the sixnine months ended JuneSeptember 30, 2008 have been revised as a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009 (see Note 3 Accounting for Convertible Debt Instruments)3).

16

14. SUBSEQUENT EVENTS
     On July 27, 2009, WESCO International, Inc. announced that it has commenced an exchange offer (the “Exchange Offer”) for its outstanding 2026 Debentures and its 2025 Debentures.
     Upon the terms and subject to the conditions of the Exchange Offer, WESCO International, Inc. is offering to exchange $960 principal amount of its 6.00% Convertible Senior Debentures due 2029 (the “2029 Debentures”) for each $1,000 principal amount of its 2026 Debentures, and $1,010 principal amount of its 2029 Debentures for each $1,000 principal amount of 2025 Debentures, provided that the maximum aggregate principal amount of 2029 Debentures that it will issue is $345,000,000 (the “Maximum Issue Amount”). WESCO International, Inc. will also pay in cash accrued and unpaid interest on 2026 Debentures and 2025 Debentures accepted for exchange from the last applicable interest payment date to, but excluding, the date on which the exchange of 2026 Debentures and 2025 Debentures accepted for exchange is settled.
     The aggregate principal amount of 2026 Debentures and 2025 Debentures that are accepted for exchange will be based on the acceptance priority for such series. WESCO International, Inc. will accept for purchase (1) first, any and all of the 2026 Debentures validly tendered and not validly withdrawn and (2) second, the maximum aggregate principal amount of 2025 Debentures validly tendered and not validly withdrawn on a pro rata basis, such that the aggregate principal amount of 2029 Debentures issued in the Exchange Offer for 2026 Debentures and 2025 Debentures does not exceed the Maximum Issue Amount.
     The Exchange Offer is subject to certain conditions, including that the registration statement relating to the Exchange Offer must be declared effective and not be subject to a stop order or any proceedings for that purpose. The Exchange Offer is also conditioned on a minimum aggregate principal amount of 2026 Debentures and 2025 Debentures being validly tendered and not validly withdrawn such that at least $100,000,000 aggregate principal amount of 2029 Debentures will be issued in the Exchange Offer.
     The Exchange Offer will expire at midnight, New York City time, on August 21, 2009, unless extended or earlier terminated by WESCO International, Inc. ( the “Expiration Date”). Holders may withdraw their tendered 2026 Debentures and 2025 Debentures at any time prior to the Expiration Date. If the initial conversion price of the 2029 Debentures is determined to be the Minimum Conversion Price (as defined below) because the Average VWAP (as defined below) otherwise would result in an initial conversion price of less than $26.25, WESCO International, Inc. will extend the Exchange Offer until midnight, New York City time, on the second trading day following the previously scheduled Expiration Date to permit holders to tender or withdraw their 2026 Debentures or 2025 Debentures during those days.
     Payment of all principal and interest (including contingent interest and additional interest, if any) payable on the 2029 Debentures will be unconditionally guaranteed by WESCO International, Inc.’s subsidiary, WESCO Distribution, Inc. The 2029 Debentures will be WESCO International, Inc.’s senior unsecured obligations, and the guarantee will be an unsecured senior subordinated obligation of WESCO Distribution, Inc.
     The 2029 Debentures will be convertible into cash and, in certain circumstances, shares of our common stock pursuant to the terms of the 2029 Debentures. The initial conversion price will be equal to 125% of the “Average VWAP,” provided that the initial conversion price will in no event be less than $26.25 (the “Minimum Conversion Price”). The “Average VWAP” means the arithmetic average, as determined by WESCO International, Inc., of the Daily VWAP for each trading day during the ten trading day period ending on and including the scheduled Expiration Date for the Exchange Offer, rounded to four decimal places. The “Daily VWAP” for any trading day means the per share volume weighted average price of our common stock on that day as displayed under the heading Bloomberg VWAP on Bloomberg Page WCC.N<Equity>AQR (or its equivalent successor page if such page is not available) in respect of the period from the scheduled open of trading on the relevant trading day until the scheduled close of trading on the relevant trading day (or if such volume weighted average price is unavailable, the market price of one share of WESCO International, Inc. common stock on such trading day determined, using a volume weighted average method, by a nationally recognized investment banking firm retained by WESCO International, Inc. for this purpose). The initial conversion rate will be 1,000 divided by the initial conversion price, rounded to four decimal places. The maximum initial conversion rate is 38.0952 shares of WESCO International, Inc.’s common stock per $1,000 principal amount of 2029 Debentures.

17

     WESCO International, Inc. has filed a registration statement (the “Registration Statement”) and a tender offer statement relating to the Exchange Offer with the SEC. The Registration Statement has not yet become effective and the 2029 Debentures may not be issued, nor may the Exchange Offer be consummated, prior to the time that the Registration Statement becomes effective.
     As a result of the Exchange Offer, WESCO’s Board of Directors temporarily suspended the previously authorized stock repurchase plan.
     WESCO has performed an evaluation of subsequent events through August 3, 2009, which is the date the financial statements were issued.

18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
     The following discussion should be read in conjunction with the information in the unaudited condensed consolidated financial statements and notes thereto included herein and WESCO International Inc.’s Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in its Current Report onForm 8-K dated July 27, 2009.
Company Overview
     We are a full-line distributor of electrical supplies and equipment and a provider of integrated supply procurement services. We have approximately 400380 full service branches and seven distribution centers located in the United States, Canada, Mexico, the United Kingdom, Nigeria, United Arab Emirates, Singapore, Australia and China. We serve approximately 115,000 customers worldwide, offering over 1,000,000 products from more than 23,00019,000 suppliers. Our diverse customer base includes a wide variety of industrial companies; contractors for industrial, commercial and residential projects; utility companies, and commercial, institutional and governmental customers. Approximately 86%85% of our net sales are generated from operations in the United States, 11%12% from Canada and the remainder from other countries.
     Our financial results for the first sixnine months of 2009 reflect weak conditions in our markets served, along with aggressive cost reduction actions which were partially offset bylower commodity prices, unfavorable foreign currency exchange rates, lower commodity prices and an unfavorable sales mix.the absence of hurricane restoration activities, to which we responded with aggressive cost reduction actions. Sales decreased $714.2$1,189.8 million, or 23.4%25.4%, over the same period last year. Cost of goods sold as a percentage of net sales was 80.2%80.4% and 80.3% for the first sixnine months of 2009 and 2008.2008, respectively. Operating income decreased by $82.7$135.1 million, or 47.6%49.6%, primarily from the decrease in sales resulting from the decline in end market activity. Net income for the sixnine months ended JuneSeptember 30, 2009 and 2008 was $49.7$83.3 million and $100.7$164.4 million, respectively.
Cash Flow
     We generated $204.7$290.9 million in operating cash flow for the first sixnine months of 2009. Included in this amount was net income of $49.7$83.3 million, a decrease in trade and other receivables of $132.9$148.9 million, a decrease in inventory of $92.0$117.1 million and a decrease in accounts payable of $72.6$69.7 million. Investing activities were primarily comprised of capital expenditures, which totaled $6.2$10.5 million for the first sixnine months of 2009. Financing activities consisted of borrowings and repayments of $193.2$250.7 million and $196.2$243.2 million, respectively, related to our revolving credit facility, and net repayments of $170.0$245.0 million related to our Receivables Facility, whereby we sell, on a continuous basis, an undivided interest in all domestic accounts receivable to WESCO Receivables Corp., a wholly owned SPE.Facility.
Financing Availability
     As of JuneSeptember 30, 2009, we had $321.1$355.0 million in total available borrowing capacity. The available borrowing capacity under our revolving credit facility was $114.9$89.0 million, of which $50.2$25.5 million is the U.S. sub-facility borrowing limit and $64.7$63.5 million is the Canadian sub-facility borrowing limit. The revolving credit facility does not mature until November 1, 2013. The available borrowing capacity under the Receivables Facility, which was amended and restated on April 13, 2009, was $206.2 million.$266.0 million at September 30, 2009. The Receivables Facility matures on April 13, 2012. In addition, on August 27, 2009, we completed an exchange offer pursuant to which we issued $345.0 million aggregate principal amount of the 2029 Debentures in exchange for approximately $299.7 million and $57.7 million aggregate principal amounts of our outstanding 2026 Debentures and 2025 Debentures, respectively. Our 2025 Debentures and 20262029 Debentures cannot be redeemed or repurchased until October 2010 and November 2011,September 2016, respectively. For further discussion related to the Debentures, refer to Note 14, Subsequent EventsNotes 3 and 7 of the Notes to our Condensed Consolidated Financial Statements. We increased our cash by $17.0$25.0 million to $103.3$111.3 million at September 30, 2009, after taking into account $174.9$240.3 million of net debt repayments and $6.2$10.5 million of capital expenditures. We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions. For further discussion refer to “Liquidity and Capital Resources.”
Outlook
     We believe that improvements made to our operations and capital structure and actions taken in 2008 and the first sixnine months of 2009, including the amendment and restatement of the accounts receivable securitization facilityReceivables Facility in April, and the convertible debt exchange in August, have helped position the Company to operate effectively in the lower level of activity being experienced in our end markets. Current macroeconomic data and input from internal sales management, customers and suppliers suggest activity levelsIn the fourth quarter of 2009, we anticipate continued contraction in the nonresidential construction market; however, we expect that our majorindustrial end markets will continuebegin to be significantly weaker in 2009 compared tostrengthen and that experienced in 2008. We remain confident thatwe will benefit from our sales and marketing initiativesinitiatives. When these factors are combined with traditional fourth quarter market seasonality, we would expect a 4% to 6% sequential decline in quarterly sales. Despite competitive pressures, we expect to maintain fourth quarter gross margins at the levels experienced in the second and third quarters. While we will not reduce our leading market positions will enablefocus on cost controls in the Companyfourth quarter, we expect to perform better than end markets as we maintain or improve current positions and grow with new customers.experience some negative operating expense leverage due to lower sales.

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Critical Accounting Policies and Estimates
     Our critical accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2008 contained in our Current Report on Form 8-K dated July 27, 2009. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in the notes to our Condensed Consolidated Financial Statements for the period ended JuneSeptember 30, 2009.
Results of Operations
SecondThird Quarter of 2009 versus SecondThird Quarter of 2008
     The following table sets forth the percentage relationship to net sales of certain items in our condensed consolidated statements of income for the periods presented:
                
 Three Months Ended Three Months Ended
 June 30, September 30,
 2009 2008(1) 2009 2008(1) 
Net sales  100.0%  100.0%  100.0%  100.0%
Cost of goods sold 80.7 80.5  80.8 80.5 
Selling, general and administrative expenses 14.7 13.0  14.6 13.0 
Depreciation and amortization 0.5 0.4  0.6 0.4 
          
Income from operations 4.1 6.1  4.0 6.1 
Interest expense 1.2 1.0  1.2 1.0 
Gain on debt exchange  (0.5) — 
Other income  (0.1)  (0.2)  (0.1)  (0.1)
          
Income before income taxes 3.0 5.3  3.4 5.2 
Provision for income taxes 0.7 1.6  0.5 1.3 
          
Net income  2.3%  3.7%  2.9%  3.9%
          
 
(1) As a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009, interest expense, income before income taxes, provision for income taxes and net income were revised for the three months ended JuneSeptember 30, 2008 (see Note 3 to the consolidated financial statements).
     Net sales in the secondthird quarter of 2009 totaled $1,159.2$1,152.4 million versus $1,587.8$1,628.1 million in the comparable period for 2008, a decrease of $428.5$475.7 million, or 27.0%29.2%, over the same period last year. Sales were negatively impacted by weak market conditions, lower commodity prices, the absence of hurricane restoration activity and unfavorable foreign currency exchange rates.
     Cost of goods sold for the secondthird quarter of 2009 was $935.3$931.5 million versus $1,277.4$1,311.7 million for the comparable period in 2008, and cost of goods sold as a percentage of net sales was 80.7%80.8% in 2009 versus 80.5% in 2008. The increase in the cost of goods sold percentage was primarily due to a shiftan increase in sales mixinventory reserves and lower supplier volume rebates.rebate rates.
     Selling, general and administrative (“SG&A”) expenses in the secondthird quarter of 2009 totaled $169.9$168.3 million versus $206.8$211.3 million in last year’s comparable quarter. The decrease in SG&A expenses is due to aggressive cost reduction actions. As a percentage of net sales, SG&A expenses were 14.7%14.6% in the secondthird quarter of 2009 compared to 13.0% in the secondthird quarter of 2008, reflecting a decrease in sales volume.
     SG&A payroll expenses for the secondthird quarter of 2009 of $114.5$111.1 million decreased by $28.3$30.6 million compared to the same quarter in 2008. The decrease in payroll expenses was primarily due to a decrease in salaries and wages of $11.4 million, a decrease in commission and incentive costs of $6.2$13.0 million, a decrease in salaries and wages of $12.8 million, a decrease in benefit costs of $8.6$2.3 million and a decrease in temporary labor costs of $1.9 million. Other SG&A related payroll expenses decreased $0.2$0.6 million.
     The remaining SG&A expenses for the secondthird quarter of 2009 of $55.4$57.2 million decreased by approximately $8.6$12.8 million compared to same quarter in 2008. Included in this period’s SG&A expenses was a decrease in travel costs of $4.1$3.2 million, and a decrease in transportation costs of $3.5$2.5 million, and a decrease in other operating expenses of $2.3 million due to the decrease in sales volume. These decreases were partially offset by an increaseIn addition, there was a $1.7 million reduction in bad debt expense of $1.5 million due to deteriorationa one time charge recorded in the credit worthiness of certain customers.last years comparable period. Other SG&A expenses decreased $2.5$3.1 million.
     Depreciation and amortization for the secondthird quarter of 2009 was $6.4 million versus $6.7$6.5 million in last year’s comparable quarter. The decrease is due to the reduction in capital expenditures in 2009.

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     Interest expense totaled $13.8$13.6 million for the secondthird quarter of 2009 versus $16.1$15.6 million in last year’s comparable quarter, a decrease of 13.9%13.1%. Interest expense for the secondthird quarter of 2009 was impacted by both the reduction in interest rates and the decrease in debt. On January 1, 2009, we retrospectively applied the provisions of FSP APB 14-1,Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including

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Partial Cash Settlement)(“FSP APB 14-1”), fornew guidance concerning convertible debt instruments to our 2.625% Convertible Senior2025 Debentures due 2025 (the “2025 Debentures”) and 1.75% Convertible Senior2026 Debentures, due 2026 (the “2026 Debentures”).and on August 27, 2009 we applied the provisions of the new guidance to our 2029 Debentures. This change in accounting treatment results in an increase in non-cash interest reported in the financial statements, a decrease in long-term debt, an increase in equity and an increase in deferred income taxes.statements. Interest expense for the 2025 Debentures and 2026 Debentures totaled $6.1$6.5 million and $5.9 million for the three months ended June,September 30, 2009 and 2008, respectively, of which $3.8$2.9 million and $3.6 million, respectively, was non-cash interest.
     Gain on debt exchange totaled $6.0 million for the third quarter of 2009. On August 27, 2009, we completed an exchange offer pursuant to which we issued $345.0 million aggregate principal amount of 2029 Debentures in exchange for approximately $299.7 million and $57.7 million aggregate principal amounts of our outstanding 2026 Debentures and 2025 Debentures, respectively. The gain included the write-off of debt issue costs.
Other income totaled $1.1$1.4 million for the secondthird quarter of 2009 versus $2.6$2.3 million in the comparable period for 2008. We account for our investment in the LADD joint venture on an equity basis, and earnings are reported as other income in the consolidated statement of income. The decrease in other income is due to the decrease in the joint venture’s income.
     Income tax expense totaled $8.5$6.3 million in the secondthird quarter of 2009, and the effective tax rate was 24.2%15.8% compared to 30.5%25.2% in the same quarter in 2008. The decrease in the effective tax rate is primarilydue to a resultreduction in projected income, the revaluation of deferred tax items and the impact from foreign jurisdictions.
     For the secondthird quarter of 2009, net income decreased by $31.5$30.1 million to $26.5$33.6 million compared to $58.0$63.7 million in the secondthird quarter of 2008. Diluted earnings per share was $0.62$0.79 for the secondthird quarter of 2009 compared with $1.33$1.48 per diluted share for the secondthird quarter of 2008. The decrease in net income was primarily due to the decline in sales attributable to the weak market conditions.
SixNine Months Ended JuneSeptember 30, 2009 versus SixNine Months Ended JuneSeptember 30, 2008
     The following table sets forth the percentage relationship to net sales of certain items in our condensed consolidated statements of income for the periods presented:
                
 Six Months Ended Nine Months Ended
 June 30, September 30,
 2009 2008(1) 2009 2008(1)
Net sales  100.0%  100.0%  100.0%  100.0%
Cost of goods sold 80.2 80.2  80.4 80.3 
Selling, general and administrative expenses 15.3 13.7  15.1 13.5 
Depreciation and amortization 0.6 0.4  0.6 0.4 
          
Income from operations 3.9 5.7  3.9 5.8 
Interest expense 1.1 1.1  1.1 1.1 
Gain on debt exchange  (0.2) — 
Other income  (0.1)  (0.2)  (0.1)  (0.2)
          
Income before income taxes 2.9 4.8  3.1 4.9 
Provision for income taxes 0.8 1.5  0.7 1.4 
          
Net income  2.1%  3.3%  2.4%  3.5%
          
 
(1) As a result of the retrospective application of FSP ABP 14-1new FASB guidance related to convertible debt instruments on January 1, 2009, interest expense, income before income taxes, provision for income taxes and net income were revised for the sixnine months ended JuneSeptember 30, 2008 (see Note 3 to the consolidated financial statements).
     Net sales in the first sixnine months of 2009 totaled $2,338.8$3,491.2 million versus $3,053.0$4,681.0 million in the comparable period for 2008, a decrease of $714.2$1,189.8 million, or 23.4%25.4%, over the same period last year. Sales were negatively impacted by weak market conditions, lower commodity prices, unfavorable foreign currency exchange rates, the absence of hurricane restoration activity and one less workday in the first sixnine months of 2009 compared to the same period in 2008.
     Cost of goods sold for the first sixnine months of 2009 was $1,876.8$2,808.3 million versus $2,447.0$3,758.7 million for the comparable period in 2008, and cost of goods sold as a percentage of net sales was 80.2%80.4% in 2009 andversus 80.3% in 2008. The increase in the cost of goods sold percentage for the first six months of 2009 was equivalent to the same period 2008primarily due to pricing and procurement initiatives which offset a shift in sales mix.lower supplier volume rebate rates.

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     SG&A expenses in the first sixnine months of 2009 totaled $357.3$525.7 million versus $418.4$629.7 million in last year’s comparable period. The decrease in SG&A expenses is due to aggressive cost reduction actions. As a percentage of net sales, SG&A expenses were 15.3%15.1% in the first sixnine months of 2009 compared to 13.7%13.5% in the first sixnine months of 2008, reflecting a decrease in sales volume.
     SG&A payroll expenses for the first sixnine months of 2009 of $246.1$357.1 million decreased by $41.8$72.4 million compared to the same period in 2008. The decrease in payroll expenses was primarily due to a decrease in commission and incentive costs of $13.7$26.7 million, a decrease in salaries and wages of $13.1$25.9 million, a decrease in benefit costs of $10.9$13.2 million and a decrease in temporary labor costs of $3.4$5.3 million. Other SG&A related payroll expenses decreased $0.7$1.3 million.

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     The remaining SG&A expenses for the first sixnine months of 2009 of $111.2$168.6 million decreased by approximately $19.3$32.3 million compared to same period in 2008. Included in this period’s SG&A expenses was a decrease in transportation costs of $6.4$9.3 million, due to the decrease in sales volume, a decrease in travel costs of $6.1$8.9 million, a decrease in other operating expenses of $6.5 million and a decrease in supplies costs of $2.0 million.$3.0 million due to the decrease in sales volume. Other SG&A expenses decreased $4.8$4.6 million.
     Depreciation and amortization for the first sixnine months of 2009 was $13.5$19.9 million versus $13.6$20.2 million in last year’s comparable period. The decrease is due to the reduction in capital expenditures in 2009.
     Interest expense totaled $26.4$39.9 million for the first sixnine months of 2009 versus $34.1$49.8 million in last year’s comparable period, a decrease of 22.8%19.9%. Interest expense for the first sixnine months of 2009 was impacted by both the reduction in interest rates and the decrease in debt. On January 1, 2009, we retrospectively applied the provisions of FSP APB 14-1, fornew guidance concerning convertible debt instruments to our 2025 Debentures and 2026 Debentures, and on August 27, 2009 we applied the provisions of the new guidance to our 2029 Debentures. This change in accounting treatment results in an increase in non-cash interest reported in the financial statements, a decrease in long-term debt, an increase in equity and an increase in deferred income taxes.statements. Interest expense for the 2025 Debentures and 2026 Debentures totaled $12.3$18.8 million and $11.8$17.8 million for the sixnine months ended June,September 30, 2009 and 2008, respectively, of which $7.7$10.6 million and $7.3$10.9 million, respectively, was non-cash interest.
     Gain on debt exchange totaled $6.0 million for the third quarter of 2009. On August 27, 2009, we completed an exchange offer pursuant to which we issued $345.0 million aggregate principal amount of 2029 Debentures in exchange for approximately $299.7 million and $57.7 million aggregate principal amounts of our outstanding 2026 Debentures and 2025 Debentures, respectively. The gain included the write-off of debt issue costs.
Other income totaled $2.7$4.1 million for the first sixnine months of 2009 versus $5.4$7.7 million in the comparable period for 2008. We account for our investment in the LADD joint venture on an equity basis, and earnings are reported as other income in the consolidated statement of income. The decrease in other income is due to the decrease in the joint venture’s income.
     Income tax expense totaled $17.8$24.1 million for the first sixnine months of 2009, and the effective tax rate was 26.4%22.5% compared to 30.6%28.6% in the same period in 2008. The decrease in the effective tax rate is primarily a resultdue to the revaluation of deferred tax items and the impact from foreign jurisdictions.
     For the first sixnine months of 2009, net income decreased by $51.0$81.1 million to $49.7$83.3 million compared to $100.7$164.4 million for the first sixnine months of 2008. Diluted earnings per share was $1.17$1.95 for the first sixnine months of 2009 compared with $2.30$3.77 per diluted share for the first sixnine months of 2008. The decrease in net income was primarily due to the decline in sales attributable to the weak market conditions.
Liquidity and Capital Resources
     Total assets were $2.5 billion at JuneSeptember 30, 2009, compared to $2.7 billion at December 31, 2008. The $200.3$221.1 million decrease in total assets was principally attributable to the decrease in accounts receivable and inventory of $110.9$127.9 million and $88.9$110.4 million, respectively. These reductions were due to the decrease in sales activity. Total liabilities at JuneSeptember 30, 2009 compared to December 31, 2008 decreased by $266.8$427.4 million to $1.7$1.5 billion. Contributing to the decrease in total liabilities was a decrease in short-term and long-term debt of $166.5$395.3 million; a decrease in accounts payable of $69.0$61.7 million due to reduced purchasing activity; and a decrease in accrued payroll and benefit costs of $23.7$21.1 million due to staffing reductions and the payment of the 2008 management incentive compensation. These decreases were partially offset by an increase in deferred income taxes of $62.7 million due to the convertible debt exchange. Stockholders’ equity increased 8.8%27.3% to $821.6$961.4 million at JuneSeptember 30, 2009, compared with $755.1 million at December 31, 2008, primarily as a result of the convertible debt exchange which resulted in a net increase to additional capital of $91.6 million. Also contributing to the increase in stockholder’s equity was net earnings of $49.7$83.3 million, foreign currency translation adjustments of $10.0$21.4 million and stock-based compensation expense of $6.3$9.8 million.

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     Our liquidity needs arise from working capital requirements, capital expenditures, acquisitions and debt service obligations. As of JuneSeptember 30, 2009, we had $114.9$89.0 million in available borrowing capacity under our revolving credit facility, which combined with our $206.2$266.0 million of available borrowing capacity under our Receivables Facility and our invested cash provides us with liquidity of $388.6$439.2 million. We believe cash provided by operations and financing activities will be adequate to cover our current operational and business needs.
     The worldwide financial turmoil has had significant impacts on global credit markets. We communicate on a regular basis with our lenders regarding our financial and working capital performance and liquidity position.  We were in compliance with all covenants and restrictions as of JuneSeptember 30, 2009. On April 13, 2009, we entered into a $400 million amended and restated receivables purchase agreement. As previously mentioned, the amended and restated Receivables Facility is not subject to renewal until April 2012. In addition, on August 27, 2009, we completed an exchange offer pursuant to which we issued $345.0 million aggregate principal amount of the 2029 Debentures in exchange for approximately $299.7 million and $57.7 million aggregate principal amounts of our outstanding 2026 Debentures and 2025 Debentures, respectively. Our 2025 Debentures and 2029 Debentures cannot be redeemed or repurchased until October 2010 and September 2016, respectively. In the event that our 2025 Debentures are redeemed in October 20082010, we believe that we will have ample financial capacity to handle such funding requirement. In conjunction with the convertible debt exchange, Moody’s Investor Services and Standard & Poor’s affirmed our credit rating and stable outlook.
     We did not note any conditions or events during the third quarter of 2009 requiring an interim evaluation of impairment of goodwill. We will perform our annual impairment testing of goodwill and indefinite-lived intangible assets during the fourth quarter.
     A possible indicator of impairment is the relationship of a company’s market capitalization to its book value. As of JuneSeptember 30, 2009, our market capitalization exceeded our book value. The persistence or further acceleration of the recent downturn in the global economic conditions and turbulence in financial markets could have a further negative impact on our market capitalization and/or financial performance. OneTwo reporting units comprised of our recent large acquisitions, which hashave goodwill and trademarks totaling $77.4$284.6 million, is mostare sensitive to a further decline in financial performance. We are taking actions to improve our future financial performance; however, we cannot predict whether or not there will be certain

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events that could adversely affect the reported value of goodwill and trademarks, which totaled $901.1$901.2 million and $900.7 million at JuneSeptember 30, 2009 and December 31, 2008, respectively.
     Over the next several quarters, we expect to maintain working capital productivity, and it is expected that excess cash will be directed primarily at debt reduction. Our near term focus will continue to be on our cost structure, right sizing of the business and maintaining ample liquidity and credit availability. We believe our balance sheet and ability to generate ample cash flow provides us with a durable business model and should allow us to fund expansion needs and growth initiatives in this time of economic contraction while maintaining targeted levels of leverage.contraction. To the extent that operating cash flow is materially lower than current levels or external financing sources are not available on terms competitive with those currently available, including increases in interest rates, future liquidity may be adversely affected.
Cash Flow
     Operating Activities.Cash provided by operating activities for the first sixnine months of 2009 totaled $204.7$290.9 million compared with $140.8$226.9 million of cash generated for the first sixnine months of 2008. Cash provided by operating activities in the first sixnine months of 2009 included net income of $49.7$83.3 million and adjustments to net income totaling $35.7$43.6 million. The increased level of cash flow is primarily attributable to a decrease in trade and other receivables of $132.9$148.9 million and a decrease in inventory of $92.0$117.1 million resulting from the decrease in sales. Cash used by operating activities in the first sixnine months of 2009 included: $72.6$69.7 million for the decrease in accounts payable, resulting from the decrease in purchasing activity; $23.8$21.4 million for the decrease in accrued payroll and benefit costs, resulting from the payment of the 2008 management incentive compensation; $5.6costs; $8.6 million for the increase in prepaid expenses and other current assets; and $3.6$2.3 million for the decrease in other current and noncurrent liabilities. In the first sixnine months of 2008, primary sources of cash were net income of $100.7$164.4 million and adjustments to net income totaling $10.5$27.1 million; an increase in accounts payable of $96.9$129.8 million, resulting from the increase in the cost of sales; and a reduction in prepaid and other current assets of $26.1$23.3 million. Cash used by operating activities in the first sixnine months of 2008 included: $70.1$99.4 million for the increase in trade and other receivables, resulting from the increase in sales; $11.7$14.3 million for the increase in inventory; $2.7 million for the decrease in accrued payroll and benefit costs, resulting from the payment of the 2007 management incentive compensation; $7.7costs; and $1.3 million for the decrease in other current and noncurrent liabilities; and $3.9 million for the increase in inventory.liabilities.

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     Investing Activities.Net cash used by investing activities for the first sixnine months of 2009 was $5.2$9.3 million, compared with $41.0$33.6 million of net cash provided during the first sixnine months of 2008. Included in 2008 were proceeds of $60.0 million from the partial divestiture of the LADD operations. Capital expenditures were $6.2$10.5 million and $19.6$26.9 million in the first sixnine months of 2009 and 2008, respectively. The decrease in capital expenditures in 2009 iswas due to cash management initiatives.
     Financing Activities.Net cash used by financing activities for the first sixnine months of 2009 and 2008 was $185.5$265.2 million and $137.4$226.0 million, respectively. During the first sixnine months of 2009, borrowings and repayments of long-term debt of $193.2$250.7 million and $196.2$245.2 million, respectively, were made to our revolving credit facility. Borrowings and repayments of $55.0 million and $225.0$300.0 million, respectively, were applied to our Receivables Facility, and there were repayments of $0.8$1.1 million to our mortgage financing facility. During the first sixnine months of 2008, borrowings and repayments of long-term debt of $369.4$523.4 million and $460.0$681.7 million, respectively, were made to our revolving credit facility. Borrowings and repayments of $100.0 million and $80.0 million, respectively, were applied to our Receivables Facility, and there were repayments of $0.7$1.0 million to our mortgage financing facility. In addition, during the first sixnine months of 2008, we purchased shares of our common stock under our share repurchase plan for approximately $60.8$74.8 million. The exercise of stock-based compensation arrangements resulted in proceeds of $0.3 million and $9.4 million during the first sixnine months of 2009 and 2008, respectively.
Contractual Cash Obligations and Other Commercial Commitments
     There were no material changes in our contractual obligations and other commercial commitments that would require an update to the disclosure provided in our Current Report on Form 8-K dated July 27, 2009, other than the Receivables Facility disclosure in Note 6 and the subsequent eventconvertible debt disclosure in Note 137 to the condensed consolidated financial statements. Management believes that cash generated from operations, together with amounts available under our revolving credit facility and the Receivables Facility, will be sufficient to meet our working capital, capital expenditures and other cash requirements for the foreseeable future. There can be no assurances, however, that this will be or will continue to be the case.

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Inflation
     The rate of inflation affects different commodities, the cost of products purchased and ultimately the pricing of our different products and product classes to our customers. As a result of the worldwide financial turmoil, weWe experienced price deflation during the sixnine months ended JuneSeptember 30, 2009. On an overall basis, our pricing related to deflation2009, which comprised an estimated $70.0$105.0 million of our sales decline.
Seasonality
     Our operating results are not significantly affected by certain seasonal factors. Sales during the first and fourth quarter are generally less than 2%5% below the sales of the remaining threesecond and third quarters due to reduced level of activity during the winter months of December, January and February. Sales typically increase beginning in March with slight fluctuations per month through December.
Impact of Recently Issued Accounting Standards
     In June 2009, the FASB issued SFAS No. 168,The FASB Accounting Standards Codification(new guidance concerning the “Codification”)and The Hierarchy of Generally Accepted Accounting Principles.The Codification will become the single sourceorganization of authoritative nongovernmentalguidance under U.S. GAAP. This new guidance created the Codification. The Codification does not change current U.S. GAAP but, is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. The Codification will supersedesupersedes all existing accounting and reporting standards and all other accounting literature not included in the Codification will becomeis nonauthoritative. The Codification is effective for interim and annual periods ending after September 15, 2009. The Codification isbecame effective for us during the interim period ending September 30, 2009 and willdid not have an impact on our financial position, results of operations or cash flows.

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Forward-Looking Statements
     From time to time in this report and in other written reports and oral statements, references are made to expectations regarding our future performance. When used in this context, the words “anticipates,” “plans,” “believes,” “estimates,” “intends,” “expects,” “projects,” “will” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain such words. Such statements including, but not limited to, our statements regarding our business strategy, growth strategy, productivity and profitability enhancement, new product and service introductions and liquidity and capital resources are based on management’s beliefs, as well as on assumptions made by, and information currently available to, management, and involve various risks and uncertainties, certain of which are beyond our control. Our actual results could differ materially from those expressed in any forward-looking statement made by or on our behalf. In light of these risks and uncertainties there can be no assurance that the forward-looking information will in fact prove to be accurate. Factors that might cause actual results to differ from such forward-looking statements include, but are not limited to, an increase in competition, the amount of outstanding indebtedness, the availability of appropriate acquisition opportunities, availability of key products, functionality of information systems, international operating environments, global and national economic and market factors and other risks that are described in our Annual Report on Form 10-K for our fiscal year ended December 31, 2008, or other documents subsequently filed with the Securities and Exchange Commission. We have undertaken no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Item 3. Quantitative and Qualitative Disclosures about Market Risks
     There have not been any material changes to our exposures to market risk during the quarter ended JuneSeptember 30, 2009 that would require an update to the disclosures provided in our Current Report on Form 8-K dated July 27, 2009.
Item 4. Controls and Procedures
     Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
     Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
     Changes in Internal Control Over Financial Reporting
     The financial results for the three and sixnine month periods ended JuneSeptember 30, 2009, were prepared using a new financial reporting system. We believe the necessary steps have been implemented regarding the operation of internal controls related to our information technology systems and financial statement close process. We will include the internal control over our new financial reporting system and financial statement close process in our annual report on internal controls over financial reporting as of December 31, 2009. There were no other changes during the secondthird quarter of 2009 in our internal control over financial reporting identified in connection with management’s evaluation of the effectiveness of our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II — Other Information
Item 1. Legal Proceedings
     From time to time, a number of lawsuits and claims have been or may be asserted against us relating to the conduct of our business, including routine litigation relating to commercial and employment matters. The outcome of any litigation cannot be predicted with certainty, and some lawsuits may be determined adversely to us. However, management does not believe, based on information presently available, that the ultimate outcome of any such pending matters is likely to have a material adverse effect on our financial condition or liquidity, although the resolution in any quarter of one or more of these matters may have a material adverse effect on our results of operations for that period.
     As previously reported in our Annual Report on Form 10-K, we are a co-defendant in a lawsuit filed in a state court in Indiana in which a customer alleges that we sold defective products manufactured or remanufactured by others and is seeking monetary damages in the amount of $52 million.  We have denied any liability, continue to believe that we have meritorious defenses and intend to vigorously defend ourselves against these allegations. Accordingly, no liability is recorded for this matter as of JuneSeptember 30, 2009.
     Information relating to legal proceedings is included in Note 9, Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements and is incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of WESCO International, Inc. was held on May 20, 2009. At the meeting, the following matters were submitted to a vote of the stockholders of WESCO International, Inc.:
(1)To elect Class I Directors to hold office until the 2012 Annual Meeting of Stockholders or until their successors are duly elected and qualified. The vote with respect to each nominee was as follows:
         
Nominee  For  Withheld
John J. Engel  37,554,233   1,348,097 
Steven A. Raymund  37,641,386   1,260,944 
Lynn M. Utter  37,628,215   1,274,115 
William J. Vareschi  37,640,086   1,262,244 
(2)To elect a Class II Director to hold office until the 2010 Annual Meeting of Stockholders or until his successor is duly elected and qualified. The vote with respect to the nominee was as follows:
         
Nominee  For  Withheld
Stephen A. Van Oss  35,761,384   3,140,946 
The individuals continuing in office as Directors after the annual meeting were Sandra Beach Lin, Roy W. Haley, George L. Miles, Jr., John K. Morgan, James L. Singleton, Robert J. Tarr, Jr., and Kenneth L. Way.
(3)To ratify the appointment of PricewaterhouseCoopers, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2009:
       
For Against Abstain Broker Non-Votes
37,985,915 887,477 28,938 —

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Item 6. Exhibits
     (a) Exhibits
10.1 Employment Agreement, dated as of March 7, 2009, between WESCO International, Inc. and Leslie J. Parrette, Jr.
10.2 Term sheet, dated May 15, 2009, memorializing terms of employment of Richard P. Heyse by WESCO International, Inc.
31.1 Certification of Chief Executive Officer pursuant to Rules 13a-14(a) promulgated under the Exchange Act.
31.2 Certification of Chief Financial Officer pursuant to Rules 13a-14(a) promulgated under the Exchange Act.
32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
3.1Amended and Restated By-Laws of WESCO International, Inc., effective as of September 28, 2009 (incorporated by reference to Exhibit 3.1 of Current Report on Form 8-K dated September 28, 2009).
10.1Amended and Restated Employment Agreement, dated as of September 1, 2009, between WESCO International, Inc. and Roy W. Haley.
10.2Amended and Restated Employment Agreement, dated as of September 1, 2009, between WESCO International, Inc. and John J. Engel.
10.3Amended and Restated Employment Agreement, dated as of September 1, 2009, between WESCO International, Inc. and Stephen A. Van Oss.
10.4First Amendment to Third Amended and Restated Receivables Purchase Agreement, dated August 31, 2009.
31.1Certification of Chief Executive Officer pursuant to Rules 13a-14(a) promulgated under the Exchange Act.
31.2Certification of Chief Financial Officer pursuant to Rules 13a-14(a) promulgated under the Exchange Act.
32.1Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
     
 WESCO International, Inc.
  
 
Date: August 3,November 6, 2009 /s/ Richard P. Heyse
Richard P. Heyse		  
 Richard P. Heyse 
 Vice President and Chief Financial Officer  

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