XML 41 R23.htm IDEA: XBRL DOCUMENT v3.25.0.1
BUSINESS SEGMENTS
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
SEGMENTS AND RELATED INFORMATION
16. BUSINESS SEGMENTS
The Company has operating segments comprising three strategic business units consisting of EES, CSS and UBS. These operating segments are equivalent to the Company’s reportable segments.
The President and Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (“CODM”). The CODM allocates resources and evaluates the performance of the Company’s reportable segments based on adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), which is the Company’s measure of segment profit or loss. The CODM considers budget-to-actual and year-over-year variances for net sales and adjusted EBITDA when making decisions about allocating resources to the segments.
The Company incurs corporate costs primarily related to treasury, tax, information technology, legal and other centralized functions. The Company also has various corporate assets. Segment assets may not include jointly used assets, but segment results include depreciation expense or other allocations related to those assets. Interest expense and other non-operating items are either not allocated to the segments or reviewed on a segment basis. Corporate expenses and assets not directly identifiable with a reportable segment are reported in the tables below to reconcile the reportable segments to the consolidated financial statements.
The following is a description of each of the Company’s reportable segments and their business activities.
Electrical & Electronic Solutions
The EES segment, with approximately 6,700 employees serving customers in over 50 countries, supplies a broad range of products and solutions primarily to construction, industrial and original equipment manufacturer (“OEM”) customers. The product portfolio in this business includes a broad range of electrical equipment and supplies, automation and connected devices (the “Internet of Things” or “IoT”), security, lighting, wire and cable, safety, and maintenance, repair and operating (“MRO”) products from industry-leading manufacturing partners. The EES service portfolio includes contractor solutions to improve project execution, direct and indirect manufacturing supply chain optimization programs, lighting and renewables advisory services, and digital and automation solutions to improve safety and productivity.
Communications & Security Solutions
The CSS segment, with approximately 4,700 employees serving customers in over 50 countries, is a global leader in data center, network infrastructure and security solutions. CSS sells directly to end-users or through an extensive network of channel partners, including data communications contractors, security and network integrators, professional audio/visual integrators, and systems integrators. Beyond its core portfolio, CSS provides a wide range of professional A/V, safety, facilities, and energy management solutions. The full CSS product portfolio is frequently paired with services designed to enhance efficiency and productivity across all customer segments globally. These services include data center services, advisory, installation enhancement, project deployment, supply chain solutions, and management platforms.
Utility & Broadband Solutions
The UBS segment, with approximately 2,300 employees serving customers primarily in the U.S. and Canada, provides products and services to investor-owned utilities, public power companies, including municipalities, as well as global service providers, wireless providers, broadband operators and the contractors that service these customers. The UBS segment divested Wesco’s integrated supply business on April 1, 2024. The products sold include wire and cable, transformers, transmission and distribution hardware, switches, protective devices, connectors, lighting, conduit, fiber and copper cable, connectivity products, pole line hardware, racks, cabinets, safety and MRO products, and point-to-point wireless devices. The UBS segment also offers a complete set of service solutions to improve customer supply chain efficiencies.
The following tables present information about the Company’s reportable segments and reconcile adjusted EBITDA by segment, which is the Company’s measure of segment profit or loss, to income before income taxes on a consolidated basis for the periods presented:
Year Ended December 31, 2024
(In millions)EESCSSUBSReportable Segments Total
Net sales$8,546.8$7,537.0$5,735.0$21,818.8
Less:
Cost of goods sold (excluding depreciation and amortization)6,517.85,918.44,670.017,106.2
Selling, general and administrative payroll expenses(1)(3)
854.6614.1244.91,713.6
Other segment items(2)
456.9383.4176.71,017.0
Adjusted EBITDA$717.5$621.1$643.4$1,982.0
Adjusted EBITDA margin %8.4 %8.2 %11.2 %
Reconciliation of adjusted EBITDA
Depreciation and amortization146.8
Other income, net(50.9)
Stock-based compensation expense(3)
14.1
Unallocated amounts (Corporate):
Depreciation and amortization36.4
Selling, general and administrative expenses561.5
Interest expense, net(4)
364.9
Other income, net(41.8)
Income before income taxes$951.0
(1) Selling, general and administrative payroll expenses includes salaries, benefits, commissions, incentives, temporary labor, and other payroll expenses.
(2) Other segment items primarily includes allocated expenses (which includes employee-related allocations), transportation costs, facility costs (including rent and utilities), employee expenses (including travel and entertainment), credit losses, professional and consulting fees, supplies, real estate and personal property taxes, sales promotion expenses, and gains (losses) on the sale, disposal, or abandonment of property and equipment.
(3) Stock-based compensation expense is excluded from selling, general and administrative payroll expenses, as this is an adjustment to calculate adjusted EBITDA.
(4) The reportable segments do not incur interest expense as these costs are centrally controlled through the Corporate treasury function.
Year Ended December 31, 2023
(In millions)EESCSSUBSReportable Segments Total
Net sales$8,610.3$7,152.2$6,622.7$22,385.2
Less:
Cost of goods sold (excluding depreciation and amortization)6,576.25,524.65,440.717,541.5
Selling, general and administrative payroll expenses(1)(3)
872.2594.0275.51,741.7
Other segment items(2)
434.5349.8167.2951.5
Adjusted EBITDA$727.4$683.8$739.3$2,150.5
Adjusted EBITDA margin %8.4 %9.6 %11.2 %
Reconciliation of adjusted EBITDA
Depreciation and amortization140.0
Other expense, net82.9
Stock-based compensation expense(3)
14.2
Unallocated amounts (Corporate):
Depreciation and amortization41.3
Selling, general and administrative expenses548.6
Interest expense, net(4)
389.3
Other income, net(57.8)
Income before income taxes$992.0
(1) Selling, general and administrative payroll expenses includes salaries, benefits, commissions, incentives, temporary labor, and other payroll expenses.
(2) Other segment items primarily includes allocated expenses (which includes employee-related allocations), transportation costs, facility costs (including rent and utilities), employee expenses (including travel and entertainment), credit losses, professional and consulting fees, supplies, real estate and personal property taxes, sales promotion expenses, and gains (losses) on the sale, disposal, or abandonment of property and equipment.
(3) Stock-based compensation expense is excluded from selling, general and administrative payroll expenses, as this is an adjustment to calculate adjusted EBITDA.
(4) The reportable segments do not incur interest expense as these costs are centrally controlled through the Corporate treasury function.
Year Ended December 31, 2022
(In millions)EESCSSUBSReportable Segments Total
Net sales$8,823.3$6,401.5$6,195.3$21,420.1
Less:
Cost of goods sold (excluding depreciation and amortization)6,708.04,944.55,106.316,758.8
Selling, general and administrative payroll expenses(1)(3)
822.1516.7264.01,602.8
Other segment items(2)
441.9341.3147.7930.9
Adjusted EBITDA$851.3$599.0$677.3$2,127.6
Adjusted EBITDA margin %9.6 %9.4 %10.9 %
Reconciliation of adjusted EBITDA
Depreciation and amortization134.3
Other income, net(1.3)
Stock-based compensation expense(3)
17.6
Unallocated amounts (Corporate):
Depreciation and amortization44.7
Selling, general and administrative expenses492.9
Interest expense, net(4)
294.4
Other expense, net8.3
Income before income taxes$1,136.7
(1) Selling, general and administrative payroll expenses includes salaries, benefits, commissions, incentives, temporary labor, and other payroll expenses.
(2) Other segment items primarily includes allocated expenses (which includes employee-related allocations), transportation costs, facility costs (including rent and utilities), employee expenses (including travel and entertainment), credit losses, professional and consulting fees, supplies, real estate and personal property taxes, sales promotion expenses, and gains (losses) on the sale, disposal, or abandonment of property and equipment.
(3) Stock-based compensation expense is excluded from selling, general and administrative payroll expenses, as this is an adjustment to calculate adjusted EBITDA.
(4) The reportable segments do not incur interest expense as these costs are centrally controlled through the Corporate treasury function.
The following table sets forth depreciation and amortization by reportable segment for the periods presented:
Year Ended December 31,
(In millions)202420232022
EES$46.8$43.3$42.6
CSS71.571.768.4
UBS28.525.023.3
Reportable segments total
146.8140.0134.3
Corporate36.441.344.7
Total$183.2$181.3$179.0
The following table sets forth other (income) expense, net by reportable segment for the periods presented, which primarily consists of net foreign currency exchange (gains) losses and the gain on the divestiture of the WIS business:
Year Ended December 31,
(In millions)202420232022
EES$10.5$10.1$(2.0)
CSS59.874.2(1.3)
UBS(121.2)(1.4)2.0
Reportable segments total
(50.9)82.9(1.3)
Corporate(41.8)(57.8)8.3
Total$(92.7)$25.1$7.0
The following table sets forth capital expenditures by reportable segment for the periods presented:
Year Ended December 31,
(In millions)202420232022
EES$4.5$10.3$9.1
CSS19.27.94.8
UBS15.819.59.2
Reportable segments total
39.537.723.1
Corporate55.254.676.4
Total$94.7$92.3$99.4
The following table sets forth total assets by reportable segment for the periods presented:
As of December 31,
(In millions)20242023
EES$4,457.0 $4,553.6 
CSS6,009.5 5,626.6 
UBS3,497.5 3,908.5 
Reportable segments total
13,964.0 14,088.7 
Corporate(1)
1,097.4 972.2 
Total$15,061.4 $15,060.9 
(1)Total assets for Corporate primarily consist of cash and cash equivalents, deferred income taxes, property, buildings and equipment, capitalized cloud computing arrangement costs, operating lease assets, and pension assets.
The following table sets forth tangible long-lived assets, which include property, buildings and equipment, and operating lease assets, by geographic area:
As of December 31,
20242023
(In millions)  
United States$893.9 $906.5 
Canada177.5 182.1 
Other International(1)
106.6 96.2 
Total $1,178.0 $1,184.8 
(1)    No individual other international country’s tangible long-lived assets are material.