ACQUISITIONS

3 Months Ended

Mar. 31, 2019

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

5. ACQUISITIONS

The following table sets forth the consideration paid for acquisitions:



	Three Months Ended
	March 31
	2019
	(In thousands)
Fair value of assets acquired	$	34,812
Fair value of liabilities assumed	7,070
Cash paid for acquisitions	$	27,742

Sylvania Lighting Services Corp.

On March 5, 2019, WESCO Distribution, Inc. ("WESCO Distribution"), through its WESCO Services, LLC subsidiary, acquired certain assets and assumed certain liabilities of Sylvania Lighting Services Corp. ("SLS"). Headquartered in Wilmington, Massachusetts, SLS offers a full spectrum of energy-efficient lighting upgrade, retrofit, and renovation solutions with annual sales of approximately $100 million and approximately 220 employees across the U.S. and Canada. WESCO Distribution funded the purchase price paid at closing with borrowings under its accounts receivable securitization facility. The purchase price was allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date, resulting in goodwill of $5.5 million, which is deductible for tax purposes.

ACQUISITIONS

3. REVENUE

WESCO distributes products and provides services to customers globally within the following end markets: (1) industrial, (2) construction, (3) utility, and (4) commercial, institutional and government. Revenue is measured as the amount of consideration WESCO expects to receive in exchange for transferring goods or providing services.

The following tables disaggregate WESCO’s revenue by end market and geography:



	Three Months Ended
	March 31
(In thousands)	2019		2018
Industrial	$	736,906	$	758,976
Construction	633,288		637,800
Utility	308,269		315,546
Commercial, Institutional and Government	282,804		281,593
Total by end market	$	1,961,267	$	1,993,915



	Three Months Ended
	March 31
(In thousands)	2019		2018
United States	$	1,460,991	$	1,482,718
Canada ⁽¹⁾	384,596		398,738
Other International ⁽¹⁾	115,680		112,459
Total by geography	$	1,961,267	$	1,993,915


⁽¹⁾	The prior period has been reclassified to conform to the current period presentation.

In accordance with certain contractual arrangements, WESCO receives payment from its customers in advance and recognizes such payment as deferred revenue. Revenue for advance payment is recognized when the performance obligation has been satisfied and control has transferred to the customer, which is generally upon shipment. Deferred revenue is usually recognized within a year or less from the date of the customer’s advance payment. At March 31, 2019 and December 31, 2018, $8.8 million and $11.8 million, respectively, of deferred revenue was recorded as a component of other current liabilities in the Condensed Consolidated Balance Sheets.

WESCO’s revenues are adjusted for variable consideration, which includes customer volume rebates, returns, and discounts. WESCO measures variable consideration by estimating expected outcomes using analysis and inputs based upon anticipated performance, historical data, as well as current and forecasted information. Measurement and recognition of variable consideration is reviewed by management on a monthly basis and revenue is adjusted accordingly. Variable consideration reduced revenue for the three months ended March 31, 2019 and 2018 by approximately $25.5 million and $23.8 million, respectively.

Shipping and handling costs are recognized in net sales when they are billed to the customer. These costs are recognized as a component of selling, general and administrative expenses when WESCO does not bill the customer. WESCO has elected to recognize shipping and handling costs as a fulfillment cost. Shipping and handling costs recorded as a component of selling, general and administrative expenses totaled $17.0 million and $18.2 million for the three months ended March 31, 2019 and 2018, respectively.