WESCO INTERNATIONAL INC Management’s Discussion and Analysis of Financial Condition and Operating Results. (Form 10-Q)

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The following discussion should be read in conjunction with the information in
the unaudited condensed consolidated financial statements and notes thereto
included in Item 1 of this Quarterly Report on Form 10-Q and WESCO
International, Inc.'s audited Consolidated Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in its Annual Report on Form 10-K for 2021. The matters discussed
herein may contain forward-looking statements that are subject to certain risks
and uncertainties that could cause actual results to differ materially from
expectations. Certain of these risks are set forth in Item 1A of WESCO
International, Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, as well as WESCO International, Inc.'s other reports filed
with the Securities and Exchange Commission (the "SEC"). In this Item 2, "Wesco"
refers to WESCO International, Inc., and its subsidiaries and its predecessors
unless the context otherwise requires. References to "we," "us," "our" and the
"Company" refer to Wesco and its subsidiaries.

In addition to the results provided in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP"), our discussion
and analysis of financial condition and results of operations includes certain
non-GAAP financial measures, which are defined further below. These financial
measures include organic sales growth, earnings before interest, taxes,
depreciation and amortization ("EBITDA"), adjusted EBITDA, adjusted EBITDA
margin, financial leverage, adjusted selling, general and administrative
expenses, adjusted income from operations, adjusted provision for income taxes,
adjusted income before income taxes, adjusted net income, adjusted net income
attributable to WESCO International, Inc., adjusted net income attributable to
common stockholders, and adjusted earnings per diluted share. We believe that
these non-GAAP measures are useful to investors as they provide a better
understanding of our financial condition and results of operations on a
comparable basis. Additionally, certain non-GAAP measures either focus on or
exclude items impacting comparability of results, allowing investors to more
easily compare our financial performance from period to period. Management does
not use these non-GAAP financial measures for any purpose other than the reasons
stated above.

Company Overview

Wescowhose head office is at Pittsburgh, Pennsylvaniais a leading provider of business-to-business distribution services, logistics services and supply chain solutions.

We employ approximately 18,000 people, maintain relationships with approximately
45,000 suppliers, and serve approximately 140,000 customers worldwide. With
nearly 1,500,000 products, end-to-end supply chain services, and extensive
digital capabilities, we provide innovative solutions to meet customer needs
across commercial and industrial businesses, contractors, government agencies,
institutions, telecommunications providers, and utilities. Our innovative
value-added solutions include supply chain management, logistics and
transportation, procurement, warehousing and inventory management, as well as
kitting and labeling, limited assembly of products and installation enhancement.
We have approximately 800 branches, warehouses and sales offices with operations
in more than 50 countries, providing a local presence for customers and a global
network to serve multi-location businesses and multi-national corporations.

In 2021, we established a new corporate brand strategy to adopt a single, master
brand architecture. This initiative reflects our corporate integration strategy
and simplifies engagement for our customers and suppliers. As a result, we have
been migrating certain legacy sub-brands to the master brand architecture, a
process that will continue for the next several years. Due to the strength of
its recognition with customers and suppliers, we will continue to use the
Anixter brand name as part of the master brand strategy for the foreseeable
future.

We have operating segments comprising three strategic business units consisting
of Electrical & Electronic Solutions ("EES"), Communications & Security
Solutions ("CSS") and Utility & Broadband Solutions ("UBS"). These operating
segments are equivalent to our reportable segments. The following is a
description of each of our reportable segments and their business activities.

Electrical and electronic solutions

The EES segment, with over 6,400 employees supporting customers in over 50
countries, supplies a broad range of products and solutions primarily to the
construction, industrial, and original equipment manufacturer ("OEM") markets.
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.
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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Communication and security solutions

The CSS segment, with over 3,300 employees supporting customers in over 50
countries, is a global leader in the network infrastructure and security
markets. CSS sells products directly to end-users or through various channels
including data communications contractors, security, network, professional
audio/visual and systems integrators. In addition to the core network
infrastructure and security portfolio, CSS has a broad offering of safety and
energy management solutions. CSS products are often combined with supply chain
services to increase efficiency and productivity, including installation
enhancement, project deployment, advisory, and IoT and digital services.

Utility and Broadband Solutions

The UBS segment, with over 2,400 employees supporting 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 also includes our integrated supply
business, which provides products and services to large industrial and
commercial end-users to support their MRO spend. The products sold into the
utility and broadband markets 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.

Overall financial performance

Our financial results for the first six months of 2022 compared to the first six
months of 2021 reflect double-digit sales growth, margin expansion, and the
realization of integration cost synergies, partially offset by higher selling,
general and administrative ("SG&A") payroll and payroll-related expenses
consisting of salaries and variable compensation, volume-related costs, as well
as information technology expenses associated with our digital transformation
initiatives.

Net sales for the first six months of 2022 increased $1.8 billion, or 20.6%,
over the corresponding prior year period. The increase reflects strong demand,
secular growth trends, pricing, and expanded product and service offerings. Cost
of goods sold as a percentage of net sales was 78.5% and 79.4% for the first six
months of 2022 and 2021, respectively. The decrease of 90 basis points reflects
our focus on value-driven pricing and the continued momentum of our gross margin
improvement program, along with a benefit from inflation due to our use of the
average cost method to value inventories. Cost of goods sold for the first six
months of 2021 included a write-down to the carrying value of certain personal
protective equipment inventories, which increased cost of goods sold as a
percentage of net sales by approximately 20 basis points.

Income from operations was $654.7 million for the first six months of 2022
compared to $352.1 million for the first six months of 2021, an increase of
$302.6 million, or 85.9%. Income from operations as a percentage of net sales
was 6.3% for the current six-month period, compared to 4.1% for the first six
months of the prior year. Income from operations for the first six months of
2022 includes merger-related and integration costs of $39.0 million.
Additionally, in connection with an integration initiative to review our brand
strategy, certain legacy trademarks are migrating to a master brand
architecture, which resulted in $9.0 million of accelerated amortization expense
for the six months ended June 30, 2022. Adjusted for these amounts, income from
operations was $702.7 million, or 6.7% of net sales. For the first six months of
2021, income from operations adjusted for merger-related and integration costs
of $84.0 million, accelerated trademark amortization expense of $5.0 million,
and a net gain of $8.9 million resulting from the divestiture of our legacy
utility and data communications businesses in Canada during the first quarter of
2021 was $432.3 million, or 5.0% of net sales. For the six months ended June 30,
2022, income from operations compared to the prior year improved across all
segments and reflects sales growth and lower cost of goods sold as a percentage
of net sales, as well as the realization of integration cost synergies. Income
from operations for the first six months of 2022 was negatively impacted by
higher SG&A payroll and payroll-related expenses consisting of salaries and
variable compensation, volume-related costs, as well as information technology
expenses associated with our digital transformation initiatives.

Earnings per diluted share for the first six months of 2022 was $7.15, based on
52.2 million diluted shares, compared to $2.89 for the first six months of 2021,
based on 51.9 million diluted shares. Adjusted for merger-related and
integration costs, accelerated trademark amortization expense, and the related
income tax effects, earnings per diluted share for the first six months of 2022
was $7.82. Adjusted for merger-related and integration costs, accelerated
trademark amortization expense, net gain on Canadian divestitures, and the
related income tax effects, earnings per diluted share for the first six months
of 2021 was $4.06. Adjusted earnings per diluted share increased 92.6%
year-over-year.

During the first six months of 2022, we continued to experience strong demand
from many of our customers. We also continued to experience some delays in
receiving products from our suppliers. We believe that the impact of these
supply chain issues on our net sales was consistent with the first quarter of
2022. We are aggressively managing supply chain issues, which includes
increasing inventory levels to service our customers. Our industry and the
broader economy are experiencing supply

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chain challenges, including product delays and backlogged orders, shortages in
raw materials and components, labor shortages, transportation challenges, and
higher costs. We anticipate that these supply chain challenges, as well as
inflationary pressures, will continue for the remainder of 2022 and may extend
into 2023. We intend to continue to actively manage the impact of inflation on
our results of operations. We cannot reasonably estimate possible future impacts
at this time.

There continues to be ongoing uncertainties associated with the COVID-19
pandemic, including with respect to the economic conditions and possible
resurgence of COVID-19, including new variants of the virus. As the duration and
severity of the COVID-19 pandemic cannot be predicted, there is significant
uncertainty as to the ultimate impact that COVID-19 will have on our business
and our results of operations and financial condition.

Cash flow

Operating cash flow for the first six months of 2022 was an outflow of $304.5
million. Net cash used in operating activities included net income of $402.8
million and non-cash adjustments to net income totaling $129.7 million, which
were primarily comprised of depreciation and amortization of $92.8 million,
stock-based compensation expense of $24.7 million, amortization of debt discount
and debt issuance costs of $8.1 million, and deferred income taxes of $1.3
million. Operating cash flow also included changes in assets and liabilities of
$837.0 million, which were primarily comprised of an increase in trade accounts
receivable of $716.8 million resulting from higher sales, an increase in
inventories of $530.8 million due to investments during the quarter to both
address supply chain challenges and support our strong sales growth
opportunities, a decrease in accrued payroll and benefit costs of $115.8 million
resulting primarily from the payment of management incentive compensation earned
in 2021, partially offset by an increase in accounts payable of $534.3 million
due to the aforementioned higher purchases of inventory.

Investing activities primarily included $31.6 million of capital expenditures
mostly consisting of internal-use computer software and information technology
hardware to support our digital transformation initiatives, as well as equipment
and leasehold improvements to support our global network of branches, warehouses
and sales offices.

Financing activities were primarily comprised of borrowings and repayments of
$1,516.3 million and $1,228.3 million, respectively, related to our revolving
credit facility (the "Revolving Credit Facility"), and borrowings and repayments
of $230.0 million and $125.0 million, respectively, related to our accounts
receivable securitization facility (the "Receivables Facility"). Financing
activities for the first six months of 2022 also included $28.7 million of
dividends paid to holders of our Series A Preferred Stock, $17.2 million of
payments for taxes related to the exercise and vesting of stock-based awards,
and net proceeds from our various international lines of credit of approximately
$1.6 million.

Financing Availability

On March 1, 2022, we amended our accounts receivable securitization and
revolving credit facilities to, among other things, increase their borrowing
capacities, extend their maturity dates, and replace London Inter-Bank Offered
Rate-based ("LIBOR") interest rate options with Secured Overnight Financing
Rate-based ("SOFR") interest rate options.

See Note 7, “Debt,” to our notes to the unaudited condensed consolidated financial statements for additional information regarding the changes to these facilities.

As of June 30, 2022, we had $429.1 million in total available borrowing capacity
under our Revolving Credit Facility, and $25.0 million of available borrowing
capacity under our Receivables Facility. The Revolving Credit Facility and the
Receivables Facility mature in March 2027 and March 2025, respectively.


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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Operating results

Second quarter of 2022 versus second quarter of 2021

The following table shows the percentage relationship to net sales of financial statement items in our condensed consolidated statements of earnings for the periods presented:

Three months completed

                                                                    June 30, 2022             June 30, 2021
Net sales                                                                   100.0  %                  100.0  %
Cost of goods sold (excluding depreciation and amortization)                 78.3                      79.0
Selling, general and administrative expenses                                 14.1                      15.2
Depreciation and amortization                                                 0.8                       1.0
Income from operations                                                        6.8                       4.8
Interest expense, net                                                         1.2                       1.4
Other expense (income), net                                                     -                       0.1
Income before income taxes                                                    5.6                       3.3
Provision for income taxes                                                    1.5                       0.7
Net income attributable to WESCO International, Inc.                          4.1                       2.6
Preferred stock dividends                                                     0.3                       0.3
Net income attributable to common stockholders                                3.8  %                    2.3  %


Net Sales

The following table sets forth net sales and organic sales growth by segment for
the periods presented:

                               Three Months Ended                                                                    Growth/(Decline)
                                                                                                                          Foreign Exchange                              Organic Sales
                      June 30, 2022           June 30, 2021               Reported              Divestiture Impact             Impact            Workday Impact            Growth
                                 (In thousands)
EES                 $    2,330,153          $    1,923,011                          21.2%                      -  %                (1.9) %                  -  %               23.1  %
CSS                      1,601,997               1,461,120                           9.6%                      -  %                (1.9) %                  -  %               11.5  %
UBS                      1,551,375               1,211,659                          28.0%                      -  %                (0.6) %                  -  %               28.6  %
Total net sales     $    5,483,525          $    4,595,790                          19.3%                      -  %                (1.6) %                  -  %               20.9  %


Note: Organic sales growth is a non-GAAP financial measure of sales performance.
Organic sales growth is calculated by deducting the percentage impact from
acquisitions and divestitures for one year following the respective transaction,
fluctuations in foreign exchange rates and number of workdays from the reported
percentage change in consolidated net sales.

Net sales were $5.5 billion for the second quarter of 2022 compared to $4.6
billion for the second quarter of 2021, an increase of 19.3% reflecting pricing,
strong demand, secular growth trends, and expanded product and service
offerings. Organic sales for the second quarter of 2022 grew by 20.9% as
fluctuations in foreign exchange rates negatively impacted reported net sales by
1.6%. All segments reported increased sales versus the prior year period, as
described below. For the three months ended June 30, 2022, pricing related to
inflation favorably impacted our net sales by approximately 8%.

EES reported net sales of $2.3 billion for the second quarter of 2022 compared
to $1.9 billion for the second quarter of 2021, an increase of 21.2%. Organic
sales for the second quarter of 2022 grew by 23.1% as fluctuations in foreign
exchange rates negatively impacted reported net sales by 1.9%. The increase
reflects strong sales growth in our construction, original equipment
manufacturer, and industrial businesses due to business expansion, price
inflation, as well as the benefits of cross selling.

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CSS reported net sales of $1.6 billion for the second quarter of 2022 compared
to $1.5 billion for the second quarter of 2021, an increase of 9.6%. Organic
sales for the second quarter of 2022 grew by 11.5% as fluctuations in foreign
exchange rates negatively impacted reported net sales by 1.9%. The increase
reflects strong growth in our network infrastructure and security solutions
businesses, as well as price inflation and the benefits of cross selling,
partially offset by the effect of supply chain constraints.

UBS reported net sales of $1.6 billion for the second quarter of 2022 compared
to $1.2 billion for the second quarter of 2021, an increase of 28.0%. Organic
sales for the second quarter of 2022 grew by 28.6% as fluctuations in foreign
exchange rates negatively impacted reported net sales by 0.6%. The increase
reflects price inflation, broad-based growth driven by investments in grid
modernization, connectivity demand and rural broadband development, as well as
expansion in our integrated supply business.

Cost of Goods Sold

Cost of goods sold for the second quarter of 2022 was $4.3 billion compared to
$3.6 billion for the second quarter of 2021, an increase of $0.7 billion. Cost
of goods sold as a percentage of net sales was 78.3% and 79.0% for the second
quarter of 2022 and 2021, respectively. The decrease of 70 basis points reflects
our focus on value-driven pricing and the continued momentum of our gross margin
improvement program, along with a benefit from inflation due to the use of the
average cost method to value inventories. The second quarter of 2021 included a
write-down to the carrying value of certain personal protective equipment
inventories, which increased cost of goods sold as a percentage of net sales by
approximately 20 basis points.

Selling, general and administrative expenses

SG&A expenses primarily include payroll and payroll-related costs, shipping and
handling, travel and entertainment, facilities, utilities, information
technology expenses, professional and consulting fees, credit losses, gains
(losses) on the sale of property and equipment, as well as real estate and
personal property taxes. SG&A expenses for the second quarter of 2022 totaled
$772.9 million versus $699.6 million for the second quarter of 2021, an increase
of $73.3 million, or 10.5%. As a percentage of net sales, SG&A expenses were
14.1% and 15.2%, respectively. SG&A expenses for the second quarter of 2022
include merger-related and integration costs of $13.4 million. Adjusted for this
amount, SG&A expenses were $759.4 million, or 13.8% of net sales, for the second
quarter of 2022. SG&A expenses for the second quarter of 2021 include $37.7
million of merger-related and integration costs. Adjusted for this amount, SG&A
expenses were $661.9 million, or 14.4% of net sales, for the second quarter of
2021.

SG&A payroll and payroll-related expenses for the second quarter of 2022 of
$486.0 million increased by $27.6 million compared to the same period in 2021
primarily due to higher salaries and variable compensation expense.
Additionally, stock-based compensation expense increased as a result of raising
our estimate of the payout levels for certain performance-based awards.

SG&A expenses not related to payroll and payroll-related costs for the second
quarter of 2022 were $286.9 million compared to $241.2 million for the same
period in 2021. The increase of $45.7 million primarily reflects higher
volume-related costs driven by significant sales growth and digital
transformation initiatives that contributed to higher information technology
expenses in the second quarter of 2022. These increases were partially offset by
the realization of integration cost synergies, as well as lower professional and
consulting fees associated with integration activities.

Depreciation and amortization

Depreciation and amortization decreased $0.8 million to $45.9 million for the
second quarter of 2022, compared to $46.7 million for the second quarter of
2021. The second quarter of 2022 and 2021 includes $3.7 million and $5.0
million, respectively, resulting from changes in the estimated useful lives of
certain legacy trademarks that are migrating to our master brand architecture,
as described above. As of June 30, 2022, we expect to recognize approximately
$1.0 million of amortization expense for trademarks migrating to our master
brand architecture over the remainder of 2022 and $5.3 million thereafter.

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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Income from operations

The following tables set forth income from operations by segment for the periods
presented:

                                                                                        Three Months Ended June 30, 2022
(In thousands)                                             EES                   CSS                   UBS               Corporate               Total
Income from operations                               $       221,506       $       130,745       $       162,428       $ (143,970)         $         370,709

                                                                                        Three Months Ended June 30, 2021
(In thousands)                                             EES                   CSS                   UBS               Corporate               Total
Income from operations                               $       153,740       $       111,257       $        94,693       $ (140,818)         $         218,872


Income from operations was $370.7 million for the second quarter of 2022
compared to $218.9 million for the second quarter of 2021. The increase of
$151.8 million, or 69.4%, reflects sales growth and lower cost of goods sold as
a percentage of net sales, as well as the realization of integration synergies,
partially offset by higher SG&A payroll and payroll-related expenses,
volume-related costs, as well as information technology expenses associated with
our digital transformation initiatives. Income from operations for the second
quarter of 2022 was not materially affected by higher pricing related to
inflation given the offsetting effect of higher costs for certain products.

EES reported income from operations of $221.5 million for the second quarter of
2022 compared to $153.7 million for the second quarter of 2021. The increase of
$67.8 million primarily reflects the factors impacting the overall business, as
described above.

CSS reported income from operations of $130.7 million for the second quarter of
2022 compared to $111.3 million for the second quarter of 2021. The increase of
$19.4 million primarily reflects the factors impacting the overall business, as
described above, as well as the negative impact of approximately 40 basis points
from the prior year personal protective equipment inventory value write-down
described in our overall results above.

UBS reported income from operations of $162.4 million for the second quarter of
2022 compared to $94.7 million for the second quarter of 2021. The increase of
$67.7 million primarily reflects the factors impacting the overall business, as
described above.

Corporate, which primarily incurs costs related to treasury, tax, information
technology, legal and other centralized functions, recognized net expenses of
$144.0 million for the second quarter of 2022 compared to $140.8 million for the
second quarter of 2021. The increase of $3.2 million primarily reflects higher
payroll and payroll-related costs, and information technology expenses, as
described above, partially offset by a decrease in professional and consulting
fees associated with integration activities.

Other expenses (income), net

Other non-operating expense totaled $1.2 million for the second quarter of 2022
compared to other non-operating income of $0.8 million for the second quarter of
2021. As disclosed in Note 8, "Employee Benefit Plans" of our Notes to the
unaudited Condensed Consolidated Financial Statements, we recognized net
benefits of $3.5 million and $4.2 million associated with the non-service cost
components of net periodic pension (benefit) cost for the three months ended
June 30, 2022 and 2021, respectively. Due to fluctuations in the U.S. dollar
against certain foreign currencies, we recorded a foreign currency exchange loss
of $3.6 million for the second quarter of 2022 compared to a loss of $1.7
million for the second quarter of 2021.

Income taxes

The provision for income taxes was $79.9 million for the second quarter of 2022
compared to $32.8 million for the corresponding quarter of the prior year,
resulting in effective tax rates of 26.5% and 21.6%, respectively. The effective
tax rate for the quarter ended June 30, 2022 was higher than the comparable
prior year period due to higher taxes on foreign earnings and less favorable
impact of discrete items.

Net earnings and earnings per share

The net result for the second quarter of 2022 was $221.1 million compared to $119.3 million for the second quarter of 2021, an increase of $101.8 millioni.e. 85.3%.

Net income attributable to non-controlling interests for the second quarter of 2022 was $0.4 million compared to $0.1 million for the second quarter of 2021.

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Preferred stock dividends expense, which relates to the fixed-rate reset
cumulative perpetual preferred stock, Series A, that was issued in connection
with the merger with Anixter, was $14.4 million for the second quarter of 2022
and 2021.

Net income and earnings per diluted share attributable to common stockholders
were $206.4 million and $3.95, respectively, for the second quarter of 2022
compared to $104.8 million and $2.02, respectively, for the second quarter of
2021. Adjusted for merger-related and integration costs, accelerated trademark
amortization expense, and the related income tax effects, net income and
earnings per diluted share attributable to common stockholders were $218.9
million and $4.19, respectively, for the three months ended June 30, 2022
compared to $137.2 million and $2.64, respectively, for the three months ended
June 30, 2021.

The following tables reconcile selling, general and administrative expenses,
income from operations, provision for income taxes and earnings per diluted
share to adjusted selling, general and administrative expenses, adjusted income
from operations, adjusted provision for income taxes and adjusted earnings per
diluted share, which are non-GAAP financial measures, for the periods presented:

                                                                       Three Months Ended
Adjusted SG&A Expenses:                                                        June 30, 2022                June 30, 2021
                                                                                             (In thousands)
Selling, general and administrative expenses                              $               772,864       $              699,581
Merger-related and integration costs                                                     (13,427)                     (37,720)
Adjusted selling, general and administrative expenses                     $               759,437       $              661,861


                                                        Three Months Ended

Adjusted operating profit: June 30, 2022 June 30, 2021

                                                          (In thousands)
        Income from operations                 $      370,709      $     

218,872

        Merger-related and integration costs           13,427              

37,720

        Accelerated trademark amortization              3,672               

5,049

        Adjusted income from operations        $      387,808      $      261,641


                                                                      Three Months Ended
Adjusted Provision for Income Taxes:                        June 30, 2022            June 30, 2021
                                                                        (In thousands)
Provision for income taxes                                $        79,887          $       32,800
Income tax effect of adjustments to income from
operations(1)                                                       4,531                  10,381
Adjusted provision for income taxes                       $        84,418   

$43,181


(1)  The adjustments to income from operations have been tax effected at rates
of approximately 26% and 24% for the three months ended June 30, 2022 and 2021,
respectively.

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                                                                             Three Months Ended
Adjusted Earnings per Diluted Share:                                June 30, 2022           June 30, 2021
(In thousands, except per share data)
Adjusted income from operations                                   $      387,808          $      261,641
Interest expense, net                                                     68,478                  67,590
Other expense (income), net                                                1,195                    (802)
Adjusted income before income taxes                                      318,135                 194,853
Adjusted provision for income taxes                                       84,418                  43,181
Adjusted net income                                                      233,717                 151,672
Net income attributable to noncontrolling interests                          443                      89
Adjusted net income attributable to WESCO International, Inc.            233,274                 151,583
Preferred stock dividends                                                 14,352                  14,352
Adjusted net income attributable to common stockholders           $      

218,922 $137,231

Diluted shares                                                            52,220                  51,994
Adjusted earnings per diluted share                               $         

$4.19 2.64


Note: For the three months ended June 30, 2022 and 2021, selling, general and
administrative expenses, income from operations, the provision for income taxes
and earnings per diluted share have been adjusted to exclude merger-related and
integration costs, accelerated amortization expense associated with migrating to
our master brand architecture, and the related income tax effects. These
non-GAAP financial measures provide a better understanding of our financial
results on a comparable basis.

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EBITDA, Adjusted EBITDA and Adjusted EBITDA margin %

The following tables reconcile net income attributable to common shareholders to EBITDA, Adjusted EBITDA and Adjusted EBITDA margin % by segment, which are non-GAAP financial measures, for the periods presented:

                                                                              Three Months Ended June 30, 2022
(In thousands)                                         EES               CSS               UBS             Corporate            Total
Net income attributable to common
stockholders                                       $   222,758       $   130,639       $   161,784       $ (308,827)         $    206,354
Net income attributable to noncontrolling
interests                                                  151                 -                 -              292                   443
Preferred stock dividends                                    -                 -                 -           14,352                14,352
Provision for income taxes                                   -                 -                 -           79,887                79,887
Interest expense, net                                        -                 -                 -           68,478                68,478
Depreciation and amortization                           11,198            17,855             5,670           11,143                45,866
EBITDA                                             $   234,107       $   148,494       $   167,454       $ (134,675)         $    415,380
Other (income) expense, net                            (1,403)               106               644            1,848                 1,195
Stock-based compensation expense(1)                      2,745             1,442               937            9,334                14,458
Merger-related and integration costs                         -                 -                 -           13,427                13,427
Adjusted EBITDA                                    $   235,449       $   150,042       $   169,035       $ (110,066)         $    444,460
Adjusted EBITDA margin %                                 10.1%              9.4%             10.9%                                   8.1%

(1) Stock-based compensation expense in the calculation of Adjusted EBITDA for the three months ended June 30, 2022 excludes $1.4 million
this amount being included in the costs related to the merger and integration.

                                                                              Three Months Ended June 30, 2021
(In thousands)                                         EES               CSS               UBS             Corporate            Total
Net income attributable to common
stockholders                                       $   153,976       $   111,046       $    94,688       $ (254,867)         $    104,843
Net (loss) income attributable to
noncontrolling interests                                  (76)                 -                 -              165                    89
Preferred stock dividends                                    -                 -                 -           14,352                14,352
Provision for income taxes                                   -                 -                 -           32,800                32,800
Interest expense, net                                        -                 -                 -           67,590                67,590
Depreciation and amortization                           12,781            19,241             5,466            9,216                46,704
EBITDA                                             $   166,681       $   130,287       $   100,154       $ (130,744)         $    266,378
Other (income) expense, net                              (160)               211                 5             (858)                (802)
Stock-based compensation expense(1)                      1,434               641               543            3,331                 5,949
Merger-related and integration costs                         -                 -                 -           37,720                37,720
Adjusted EBITDA                                    $   167,955       $   131,139       $   100,702       $  (90,551)         $    309,245
Adjusted EBITDA margin %                                8.7  %            9.0  %            8.3  %                                 6.7  %

(1) Stock-based compensation expense in the calculation of Adjusted EBITDA for the three months ended June 30, 2021 excludes $1.3 million
this amount being included in the costs related to the merger and integration.


Note: EBITDA, Adjusted EBITDA and Adjusted EBITDA margin % are non-GAAP
financial measures that provide indicators of our performance and ability to
meet debt service requirements. EBITDA is defined as earnings before interest,
taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA
before foreign exchange and other non-operating expenses (income), non-cash
stock-based compensation expense and merger-related and integration costs.
Adjusted EBITDA margin % is calculated by dividing Adjusted EBITDA by net sales.
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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

Semester completed June 30, 2022 compared to the half-year ended June 30, 2021

The following table shows the percentage relationship to net sales of financial statement items in our condensed consolidated statements of earnings for the periods presented:

                                                                               Six Months Ended
                                                                    June 30, 2022             June 30, 2021
Net sales                                                                   100.0  %                  100.0  %
Cost of goods sold (excluding depreciation and amortization)                 78.5                      79.4
Selling, general and administrative expenses                                 14.3                      15.5
Depreciation and amortization                                                 0.9                       1.0
Income from operations                                                        6.3                       4.1
Interest expense, net                                                         1.3                       1.6
Other expense (income), net                                                     -                         -
Income before income taxes                                                    5.0                       2.5
Provision for income taxes                                                    1.1                       0.4
Net income attributable to WESCO International, Inc.                          3.9                       2.1
Preferred stock dividends                                                     0.3                       0.4
Net income attributable to common stockholders                                3.6  %                    1.7  %


Net Sales

The following table sets forth net sales and organic sales growth by segment for
the periods presented:

                                Six Months Ended                                                                   Growth/(Decline)
                                                                                                                        Foreign Exchange                             Organic Sales
                     June 30, 2022           June 30, 2021               Reported             Divestiture Impact             Impact            Workday Impact            Growth
                                 (In thousands)
EES                 $   4,420,112          $    3,643,824                       21.3  %                   (0.2) %                (1.2) %                0.8  %              21.9  %
CSS                     3,036,172               2,711,735                       12.0  %                      -  %                (1.4) %                0.8  %              12.6  %
UBS                     2,959,422               2,281,708                       29.7  %                   (0.2) %                (0.4) %                0.8  %              29.5  %
Total net sales     $  10,415,706          $    8,637,267                       20.6  %                   (0.2) %                (1.0) %                0.8  %              21.0  %


Net sales were $10.4 billion for the first six months of 2022 compared to $8.6
billion for the first six months of 2021, an increase of 20.6% reflecting price
inflation, continued strong demand, secular growth trends, and expanded product
and service offerings. Organic sales for the first six months of 2022 grew by
21.0% as the number of workdays positively impacted reported net sales by 0.8%,
while fluctuations in foreign exchange rates and the divestiture of our legacy
utility and data communications businesses in Canada in the first quarter of
2021 negatively impacted reported net sales by 1.0% and 0.2%, respectively. All
segments reported increased sales versus the prior year period, as discussed
below. For the first six months of 2022, pricing related to inflation favorably
impacted our net sales by approximately 8%.

EES reported net sales $4.4 billion for the first six months of 2022 compared to
$3.6 billion for the first six months of 2021, an increase of 21.3%. Organic
sales for the first six months of 2022 grew by 21.9% as the number of workdays
positively impacted reported net sales by 0.8%, while fluctuations in foreign
exchange rates and the Canadian divestitures described above negatively impacted
reported net sales by 1.2% and 0.2%, respectively. The increase reflects strong
sales growth in our construction, original equipment manufacturer, and
industrial businesses due to business expansion, price inflation, as well as the
benefits of cross selling and secular growth trends in electrification and
automation.

CSS reported net sales of $3.0 billion for the first six months of 2022 compared
to $2.7 billion for the first six months of 2021, an increase of 12.0%. Organic
sales for the first six months of 2022 grew by 12.6% as the number of workdays
positively impacted reported net sales by 0.8% and fluctuations in foreign
exchange rates negatively impacted reported net sales by 1.4%. The increase
reflects strong growth in our network infrastructure and security solutions
businesses, as well as price inflation and the benefits of cross selling,
partially offset by the effect of supply chain constraints.
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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


UBS reported net sales of $3.0 billion for the first six months of 2022 compared
to $2.3 billion for the first six months of 2021, an increase of 29.7%. Organic
sales for the first six months of 2022 grew by 29.5% as the number of workdays
positively impacted reported net sales by 0.8%, while fluctuations in foreign
exchange rates and the Canadian divestitures described above negatively impacted
reported net sales by 0.4% and 0.2%, respectively. The increase reflects price
inflation, broad-based growth in our utility and broadband businesses, as well
as expansion in our integrated supply business.

Cost of Goods Sold

Cost of goods sold for the first six months of 2022 was $8.2 billion compared to
$6.9 billion for the first six months of 2021, an increase of $1.3 billion. Cost
of goods sold as a percentage of net sales was 78.5% for the first six months of
2022 compared to 79.4% for the first six months of 2021. The decrease of 90
basis points reflects our focus on value-driven pricing and the continued
momentum of our gross margin improvement program, along with a benefit from
inflation due to the use of the average cost method to value inventories. The
first six months of 2021 included a write-down to the carrying value of certain
personal protective equipment inventories, which increased cost of goods sold as
a percentage of net sales by approximately 20 basis points.

Selling, general and administrative expenses

SG&A expenses primarily include payroll and payroll-related costs, shipping and
handling, travel and entertainment, facilities, utilities, information
technology expenses, professional and consulting fees, credit losses, gains
(losses) on the sale of property and equipment, as well as real estate and
personal property taxes. SG&A expenses for the first six months of 2022 totaled
$1.5 billion versus $1.3 billion for the first six months of 2021, an increase
of $154.8 million, or 11.6%. As a percentage of net sales, SG&A expenses were
14.3% and 15.5%, respectively. SG&A expenses for the first six months of 2022
include merger-related and integration costs of $39.0 million. Adjusted for this
amount, SG&A expenses were 13.9% of net sales for the first six months of 2022.
SG&A expenses for the first six months of 2021 include $84.0 million of
merger-related and integration costs, as well as a net gain of $8.9 million
resulting from the Canadian divestitures. Adjusted for these amounts, SG&A
expenses were 14.6% of net sales for the first six months of 2021.

SG&A payroll and payroll-related expenses for the first six months of 2022 of
$946.9 million increased by $64.8 million compared to the same period in 2021
primarily due to higher salaries and variable compensation expense.
Additionally, stock-based compensation expense increased as a result of raising
our estimate of the payout levels for certain performance-based awards.

SG&A expenses not related to payroll and payroll-related costs for the first six
months of 2022 of $544.1 million increased by $90.0 million compared to the same
period in 2021. The increase primarily reflects higher volume-related costs
driven by significant sales growth and digital transformation initiatives that
contributed to higher information technology expenses in the first six months of
2022, as well as the absence of the net gain recognized in the first quarter of
2021 on the Canadian divestitures. These increases were partially offset by the
realization of integration cost synergies, as well as lower professional and
consulting fees associated with integration activities.

Depreciation and amortization

Depreciation and amortization increased $4.9 million to $92.8 million for the
first six months of 2022 compared to $87.9 million for the first six months of
2021. The first six months of 2022 and 2021 includes $9.0 million and $5.0
million, respectively, resulting from changes in the estimated useful lives of
certain legacy trademarks that are migrating to our master brand architecture,
as described above.

Income from Operations

The following tables set forth income from operations by segment for the periods
presented:

                                                                                         Six Months Ended June 30, 2022
(In thousands)                                             EES                   CSS                   UBS               Corporate               Total
Income from operations                               $       400,277       $       234,776       $       292,376       $ (272,691)         $         654,738

                                                                                         Six Months Ended June 30, 2021
(In thousands)                                             EES                   CSS                   UBS               Corporate               Total
Income from operations                               $       253,852       $       185,220       $       181,723       $ (268,672)         $         352,123


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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


Income from operations was $654.7 million for the first six months of 2022
compared to $352.1 million for the first six months of 2021. The increase of
$302.6 million, or 85.9%, reflects sales growth and lower cost of goods sold as
a percentage of net sales, as well as the realization of integration synergies,
partially offset by higher SG&A payroll and payroll-related expenses,
volume-related costs, as well as information technology expenses associated with
our digital transformation initiatives.

EES reported income from operations of $400.3 million for the first six months
of 2022 compared to $253.9 million for the first six months of 2021. The
increase of $146.4 million primarily reflects the factors impacting the overall
business, as described above.

CSS reported income from operations of $234.8 million for the first six months
of 2022 compared to $185.2 million for the first six months of 2021. The
increase of $49.6 million primarily reflects the factors impacting the overall
business, as described above. Additionally, operating profit for the first six
months of 2021 was negatively impacted by approximately 50 basis points from the
inventory write-down described under Cost of Goods Sold above.

UBS reported income from operations of $292.4 million for the first six months
of 2022 compared to $181.7 million for the first six months of 2021. The
increase of $110.7 million primarily reflects the factors impacting the overall
business, as described above, offset by the benefit in the first quarter of 2021
from the net gain on the Canadian divestitures.

Corporate, which primarily incurs costs related to treasury, tax, information
technology, legal and other centralized functions, recognized net expenses of
$272.7 million for the first six months of 2022 compared to $268.7 million for
the first six months of 2021. The increase of $4.0 million primarily reflects
higher payroll and payroll-related costs, and information technology expenses,
as described above, partially offset by a decrease in professional and
consulting fees associated with integration activities.

Interest expense, net

Net interest expense totaled $132.1 million for the first six months of 2022 compared to $138.0 million for the first six months of 2021. The decrease reflects the repayment of fixed rate debt by variable debt which had lower borrowing rates.

Other income and expenses, net

Other non-operating expense totaled $2.3 million for the first six months of
2022 compared to other non-operating income of $3.6 million for the first six
months of 2021. As disclosed in Note 8, "Employee Benefit Plans" of our Notes to
the unaudited Condensed Consolidated Financial Statements, we recognized net
benefits of $7.1 million and $8.2 million associated with the non-service cost
components of net periodic pension (benefit) cost for the six months ended
June 30, 2022 and 2021, respectively. Due to fluctuations in the U.S. dollar
against certain foreign currencies, we recorded a foreign currency exchange loss
of $7.1 million for the first six months of 2022 compared to a loss of $2.7
million for the first six months of 2021.

Income taxes

The provision for income taxes was $117.5 million for the first six months of
2022 compared to $39.3 million in last year's comparable period, resulting in
effective tax rates of 22.6% and 18.1%, respectively. The effective tax rates
for the first six months of 2022 and last year's comparable period reflect
discrete income tax benefits of $13.4 million and $8.3 million, respectively,
resulting from reductions to the valuation allowance recorded against foreign
tax credit carryforwards, as well as the exercise and vesting of stock-based
awards of $6.1 million and $4.5 million, respectively. These discrete income tax
benefits reduced the estimated annual effective tax rates in such periods by
approximately 3.7 and 5.9 percentage points, respectively.

Net earnings and earnings per share

The net result for the first half of 2022 is $402.8 million compared to
$178.4 million for the first six months of 2021, an increase of $224.4 millioni.e. 125.8%.

Net income attributable to non-controlling interests for the first six months of 2022 was $0.8 million compared to $0.1 million for the first six months of 2021.

Preferred stock dividends expense, which relates to the fixed-rate reset
cumulative perpetual preferred stock, Series A, that was issued in connection
with the merger with Anixter, was $28.7 million for the first six months of 2022
and 2021.

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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


Net income and earnings per diluted share attributable to common stockholders
were $373.2 million and $7.15, respectively, for the first six months of 2022
compared to $149.7 million and $2.89, respectively, for the first six months of
2021. Adjusted for merger-related and integration costs, accelerated trademark
amortization expense, and the related income tax effects, net income and
earnings per diluted share attributable to common stockholders were $408.6
million and $7.82, respectively, for the first six months of 2022. Adjusted for
merger-related and integration costs, accelerated trademark amortization, net
gain on Canadian divestitures, and the related income tax effects, net income
and earnings per diluted share attributable to common stockholders were $210.5
million and $4.06, respectively, for the first six months of 2021.

The following tables reconcile selling, general and administrative expenses,
income from operations, provision for income taxes and earnings per diluted
share to adjusted selling, general and administrative expenses, adjusted income
from operations, adjusted provision for income taxes and adjusted earnings per
diluted share, which are non-GAAP financial measures, for the periods presented:


                                                                        Six Months Ended
Adjusted SG&A Expenses:                                                        June 30, 2022                  June 30, 2021
                                                                                              (In thousands)
Selling, general and administrative expenses                              $              1,490,962       $             1,336,157
Merger-related and integration costs                                                      (38,990)                      (84,042)
Net gain on divestitures                                                                         -                         8,927
Adjusted selling, general and administrative expenses                     $              1,451,972       $             1,261,042




                                                         Six Months Ended

Adjusted operating income: June 30, 2022 June 30, 2021

                                                          (In thousands)
        Income from operations                 $      654,738      $     

352 123

        Merger-related and integration costs           38,990              

84,042

        Accelerated trademark amortization              8,995               

5,049

        Net gain on divestitures                            -              

(8,927)

        Adjusted income from operations        $      702,723      $      432,287


                                                                     Six Months Ended
Adjusted Provision for Income Taxes:                      June 30, 2022            June 30, 2021
                                                                      (In thousands)
Provision for income taxes                              $       117,541          $        39,331
Income tax effect of adjustments to income from
operations(1)                                                    12,614                   19,348
Adjusted provision for income taxes                     $       130,155     

$58,679

(1) Adjustments to operating income were taxed at rates of 26% and 24% for the six months ended June 30, 2022 and 2021, respectively.

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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


                                                                              Six Months Ended
Adjusted Earnings per Diluted Share:                                June 30, 2022           June 30, 2021
(In thousands, except per share data)
Adjusted income from operations                                   $      702,723          $      432,287
Interest expense, net                                                    132,098                 137,963
Other expense (income), net                                                2,319                  (3,609)
Adjusted income before income taxes                                      568,306                 297,933
Adjusted provision for income taxes                                      130,155                  58,679
Adjusted net income                                                      438,151                 239,254
Net income attributable to noncontrolling interests                          831                      65
Adjusted net income attributable to WESCO International, Inc.            437,320                 239,189
Preferred stock dividends                                                 28,704                  28,704
Adjusted net income attributable to common stockholders           $      

408 616 $210,485

Diluted shares                                                            52,229                  51,875
Adjusted earnings per diluted share                               $         

$7.82 4.06


Note: For the six months ended June 30, 2022, selling, general and
administrative expenses, income from operations, the provision for income taxes
and earnings per diluted share have been adjusted to exclude merger-related and
integration costs, accelerated amortization expense associated with migrating to
our master brand architecture, and the related income tax effects. For the six
months ended June 30, 2021, selling, general and administrative expenses, income
from operations, the provision for income taxes and earnings per diluted share
have been adjusted to exclude merger-related and integration costs, a net gain
on the divestiture of our legacy utility and data communications businesses in
Canada, accelerated amortization expense associated with migrating to our master
brand architecture, and the related income tax effects. These non-GAAP financial
measures provide a better understanding of our financial results on a comparable
basis.

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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

EBITDA, Adjusted EBITDA and Adjusted EBITDA margin %

The following tables reconcile net income attributable to common shareholders to EBITDA, Adjusted EBITDA and Adjusted EBITDA margin % by segment, which are non-GAAP financial measures, for the periods presented:

                                                                               Six Months Ended June 30, 2022
(In thousands)                                     EES                CSS               UBS                 Corporate                 Total
Net income attributable to common
stockholders                                  $     401,493       $   234,326       $   291,766       $            (554,340)       $    373,245
Net income attributable to
noncontrolling interests                                361                 -                 -                          470                831
Preferred stock dividends                                 -                 -                 -                       28,704             28,704
Provision for income taxes                                -                 -                 -                      117,541            117,541
Interest expense, net                                     -                 -                 -                      132,098            132,098
Depreciation and amortization                        23,222            35,986            11,456                       22,182             92,846
EBITDA                                        $     425,076       $   270,312       $   303,222       $            (253,345)       $    745,265
Other (income) expense, net                         (1,577)               450               610                        2,836              2,319
Stock-based compensation expense(1)                   4,366             2,319             1,563                       13,760             22,008
Merger-related and integration costs                      -                 -                 -                       38,990             38,990
Adjusted EBITDA                               $     427,865       $   273,081       $   305,395       $            (197,759)       $    808,582
Adjusted EBITDA margin %                             9.7  %            9.0  %           10.3  %                                          7.8  %

(1) Stock-based compensation expense in the calculation of Adjusted EBITDA for the six months ended June 30, 2022 excludes $2.7 million this amount being included in the costs related to the merger and integration.

                                                                               Six Months Ended June 30, 2021
(In thousands)                                     EES                CSS               UBS                 Corporate                 Total
Net income attributable to common
stockholders                                  $     254,606       $   184,639       $   181,701       $            (471,277)       $    149,669
Net (loss) income attributable to
noncontrolling interests                              (151)                 -                 -                          216                 65
Preferred stock dividends                                 -                 -                 -                       28,704             28,704
Provision for income taxes                                -                 -                 -                       39,331             39,331
Interest expense, net                                     -                 -                 -                      137,963            137,963
Depreciation and amortization                        23,344            35,534            10,676                       18,359             87,913
EBITDA                                        $     277,799       $   220,173       $   192,377       $            (246,704)       $    443,645
Other (income) expense, net                           (603)               581                22                      (3,609)            (3,609)
Stock-based compensation expense(2)                   2,785             1,066               883                        5,908             10,642
Merger-related and integration costs                      -                 -                 -                       84,042             84,042
Net gain on divestitures                                  -                 -           (8,927)                            -            (8,927)
Adjusted EBITDA                               $     279,981       $   221,820       $   184,355       $            (160,363)       $    525,793
Adjusted EBITDA margin %                             7.7  %            8.2  %            8.1  %                                          6.1  %

(2) Stock-based compensation expense in the calculation of Adjusted EBITDA for the six months ended June 30, 2021 excludes $2.5 million this amount being included in the costs related to the merger and integration.


Note: EBITDA, Adjusted EBITDA and Adjusted EBITDA margin % are non-GAAP
financial measures that provide indicators of our performance and ability to
meet debt service requirements. EBITDA is defined as earnings before interest,
taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA
before foreign exchange and other non-operating expenses (income), non-cash
stock-based compensation, merger-related and integration costs, and net gain on
the divestiture of our legacy utility and data communications businesses in
Canada. Adjusted EBITDA margin % is calculated by dividing Adjusted EBITDA by
net sales.

Cash and capital resources

Our liquidity needs generally arise from fluctuations in our working capital
requirements, information technology investments, capital expenditures,
acquisitions and debt service obligations. As of June 30, 2022, we had $429.1
million in available borrowing capacity under our Revolving Credit Facility,
after giving effect to outstanding letters of credit and certain borrowings
under our international lines of credit, and $25.0 million in available
borrowing capacity under our Receivables
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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


Facility, which combined with available cash of $117.3 million, provided
liquidity of $571.4 million. Cash included in our determination of liquidity
represents cash in certain deposit and interest-bearing investment accounts. 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.

We regularly review our mix of fixed versus variable rate debt, and we may, from
time to time, issue or retire borrowings and/or refinance existing debt in an
effort to mitigate the impact of interest rate and foreign exchange rate
fluctuations, and to maintain a cost-effective capital structure consistent with
our anticipated capital requirements. As of June 30, 2022, approximately 56% of
our debt portfolio was comprised of fixed rate debt. We believe our capital
structure has an appropriate mix of fixed versus variable rate debt and secured
versus unsecured instruments.

Over the next several quarters, it is expected that excess liquidity will be
directed primarily at debt reduction, integration activities and potential
acquisitions, or returning capital to shareholders through our existing share
repurchase authorization. We expect to maintain sufficient liquidity through our
credit facilities and cash balances. We believe cash provided by operations and
financing activities will be adequate to cover our operational and business
needs for at least the next twelve months.

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 financial covenants and restrictions contained in our debt agreements as of
June 30, 2022.

We also measure our ability to meet our debt obligations based on our financial
leverage ratio, which was 3.4 as of June 30, 2022 and 3.9 as of December 31,
2021. Since our merger with Anixter, we have reduced our financial leverage by
2.3.
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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES

The following table sets forth our leverage ratio, which is a non-GAAP financial measure, for the periods presented:

                                                                      Twelve Months Ended
                                                               June 30,               December 31,
                                                                 2022                     2021
(In millions of dollars, except ratio)
Net income attributable to common stockholders            $         631.5          $         408.0
Net income attributable to noncontrolling interests                   1.8                      1.0
Preferred stock dividends                                            57.4                     57.4
Provision for income taxes                                          193.7                    115.5
Interest expense, net                                               262.2                    268.1
Depreciation and amortization                                       203.5                    198.5
EBITDA                                                            1,350.1                  1,048.5
Other income, net(1)                                                (42.2)                   (48.1)
Stock-based compensation expense                                     37.1                     25.7
Merger-related and integration costs                                113.4                    158.5
Net gain on divestitures                                                -                     (8.9)
Adjusted EBITDA                                           $       1,458.4          $       1,175.7

                                                                             As of
                                                               June 30,               December 31,
                                                                 2022                     2021

Short-term debt and current portion of long-term debt, net amount

                                                       $          70.6          $           9.5
Long-term debt, net                                               5,039.9                  4,701.5
Debt discount and debt issuance costs(2)                             64.1                     70.6

Fair value adjustments to Anixter Senior Notes due 2023 and 2025(2)

                                                          (0.6)                    (0.9)
Total debt                                                        5,174.0                  4,780.7
Less: Cash and cash equivalents                                     236.8                    212.6
Total debt, net of cash                                   $       4,937.2          $       4,568.1

Financial leverage ratio                                              3.4                         3.9


(1)Other non-operating income for the twelve months ended June 30, 2022 and
December 31, 2021 includes a $36.6 million curtailment gain resulting from the
remeasurement of our pension obligations in the U.S. and Canada due to amending
certain terms of such defined benefit plans.

(2)Debt is presented in the condensed consolidated balance sheets net of debt
discount and debt issuance costs, and includes adjustments to record the
long-term debt assumed in the merger with Anixter at its acquisition date fair
value.

Note: Financial leverage ratio is a non-GAAP measure of the use of debt.
Financial leverage ratio is calculated by dividing total debt, excluding debt
discount, debt issuance costs and fair value adjustments, net of cash, by
adjusted EBITDA. EBITDA is defined as the trailing twelve months earnings before
interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as
the trailing twelve months EBITDA before foreign exchange and other
non-operating expenses (income), non-cash stock-based compensation expense,
merger-related and integration costs, and net gain on the divestiture of our
legacy utility and data communications businesses in Canada.

Most of the undistributed earnings of our foreign subsidiaries have been taxed
in the U.S. under either the one-time tax on the deemed repatriation of
undistributed foreign earnings, or the global intangible low-taxed income tax
regime imposed by the Tax Cuts and Jobs Act of 2017. Future distributions of
previously taxed earnings by our foreign subsidiaries should, therefore, result
in minimal U.S. taxation. We continue to assert that the remaining undistributed
earnings of our foreign subsidiaries are indefinitely reinvested. The
distribution of earnings by our foreign subsidiaries in the form of dividends,
or otherwise, may be subject to additional taxation. We believe that we are able
to maintain sufficient liquidity for our domestic operations and commitments
without repatriating cash from our foreign subsidiaries.
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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


We finance our operating and investing needs primarily with borrowings under our
Revolving Credit Facility, Receivables Facility, as well as uncommitted lines of
credit entered into by certain of our foreign subsidiaries to support local
operations, some of which are overdraft facilities. The Revolving Credit
Facility has a borrowing limit of $1,350 million and the purchase limit under
the Receivables Facility is $1,400 million. As of June 30, 2022, we had
$883.2 million and $1,375.0 million outstanding under the Revolving Credit
Facility and Receivables Facility, respectively. The maximum borrowing limits of
our international lines of credit vary by facility and range between
$0.6 million and $31.0 million. Our international lines of credit generally are
renewable on an annual basis and certain facilities are fully and
unconditionally guaranteed by Wesco Distribution. Accordingly, certain
borrowings under these lines directly reduce availability under our Revolving
Credit Facility. As of June 30, 2022, we had $8.5 million outstanding under our
international lines of credit.

On March 1, 2022, we amended our Receivables Facility to increase its borrowing
capacity from $1,300 million to $1,400 million and extend its maturity date from
June 21, 2024 to March 1, 2025. Additionally, the amendments to the Receivables
Facility replaced the LIBOR-based interest rate option with SOFR-based interest
rate options, including term SOFR and daily simple SOFR, and decreased the
interest rate spread from 1.15% to 1.10%.

On March 1, 2022, we also amended our Revolving Credit Facility to, among other
things, increase its borrowing capacity from $1,200 million to $1,350 million,
extend its maturity date from June 22, 2025 to March 1, 2027, and replace its
LIBOR-based interest rate option with SOFR-based interest rate options,
including term SOFR and daily simple SOFR.

For additional information regarding our debt instruments, including our outstanding debt at June 30, 2022see note 7, “Debt” of our notes to the unaudited condensed consolidated financial statements.

A cash flow analysis for the first six months of 2022 and 2021 follows:

Operational activities

Net cash used in operations for the first six months of 2022 totaled $304.5
million, compared to $102.8 million of cash provided by operating activities for
the first six months of 2021. Operating activities for the first six months of
2022 included net income of $402.8 million and non-cash adjustments to net
income totaling $129.7 million, which were primarily comprised of depreciation
and amortization of $92.8 million, stock-based compensation expense of $24.7
million, amortization of debt discount and debt issuance costs of $8.1 million,
and deferred income taxes of $1.3 million. Other sources of cash in the first
six months of 2022 included an increase in accounts payable of $534.3 million
due to higher purchases of inventory and an increase in other current and
noncurrent liabilities of $88.1 million primarily due to an increase in accrued
taxes. Primary uses of cash in the first six months of 2022 included an increase
in trade accounts receivable of $716.8 million resulting from higher sales, an
increase in inventories of $530.8 million due to investments to address both
supply chain challenges and support our strong sales growth opportunities, a
decrease in accrued payroll and benefit costs of $115.8 million resulting
primarily from the payment of management incentive compensation earned in 2021,
an increase in other current and noncurrent assets of $80.7 million primarily
due to an increase in capitalized costs associated with implementing cloud
computing arrangements to support our digital transformation initiatives, and an
increase in other accounts receivable of $15.3 million.

Net cash provided by operating activities for the first six months of 2021
totaled $102.8 million, which included net income of $178.4 million and non-cash
adjustments to net income totaling $101.7 million that were primarily comprised
of depreciation and amortization of $87.9 million, stock-based compensation
expense of $13.2 million, amortization of debt discount and debt issuance costs
of $9.2 million, a net gain of $8.9 million resulting from the Canadian
divestitures, and deferred income taxes of $3.0 million. Other sources of cash
for the first six months of 2021 included an increase in accounts payable of
$474.9 million due to higher purchases of inventory, an increase in other
current and noncurrent liabilities of $26.0 million, and an increase in accrued
payroll and benefit costs of $1.9 million. Primary uses of cash in the first six
months of 2021 included an increase in trade accounts receivable of $372.3
million resulting from higher sales in the latter part of the quarter, an
increase in inventories of $268.3 million to support increased customer demand,
an increase in other accounts receivable of $25.4 million due to higher supplier
volume rebate accruals, and an increase in other current and noncurrent assets
of $14.3 million.

Investing Activities

Net cash used in investing activities for the first six months of 2022 was $31.0
million, compared to $32.4 million of net cash provided by investing activities
during the first six months of 2021. Included in the first six months of
2022 was capital expenditures of $31.6 million, compared to $20.2 million for
the six month period ended June 30, 2021. Included in the first six months of
2021 was $54.3 million of net proceeds from the divestiture of our legacy
utility and data communications businesses in Canada.

Fundraising activities

Net cash provided by financing activities for the first six months of 2022 was
$340.5 millioncompared to $289.7 million net cash used in financing activities for the first half of 2021. During the first half of 2022, financing activities

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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


were primarily comprised of borrowings and repayments of $1,516.3 million and
$1,228.3 million, respectively, related to our Revolving Credit Facility, and
borrowings and repayments of $230.0 million and $125.0 million, respectively,
related to our Receivables Facility. The first six months of 2022 also included
$28.7 million of dividends paid to holders of our Series A Preferred Stock,
$17.2 million of payments for taxes related to the exercise and vesting of
stock-based awards, and net proceeds from our various international lines of
credit of approximately $1.6 million.

During the first six months of 2021, financing activities primarily consisted of
the redemption of our $500.0 million aggregate principal amount of 5.375% Senior
Notes due 2021, borrowings and repayments of $914.8 million and $869.8 million,
respectively, related to our Revolving Credit Facility, and borrowings and
repayments of $643.0 million and $413.0 million, respectively, related to our
Receivables Facility. The first six months of 2021 also included $28.7 million
of dividends paid to holders of our Series A Preferred Stock, net repayments
related to our various international lines of credit of approximately $10.8
million, and $12.4 million of payments for taxes related to the exercise and
vesting of stock-based awards.

Cash contractual obligations and other business commitments

There have been no material changes to our contractual obligations and other business commitments that would require updating the information provided in our Annual Report on Form 10-K for the year ended December 31, 2021.

Seasonality

Our operating results are not significantly affected by seasonal factors. Sales
during the first and fourth quarters are usually affected by a reduced level of
activity due to the impact of weather on projects. Sales typically increase
beginning in March, with slight fluctuations per month through October. During
periods of economic expansion or contraction, our sales by quarter have varied
significantly from this pattern.

Critical accounting estimates

No material changes have been made to the critical accounting estimates presented in Part II, Section 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of WESCO International, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Recent accounting standards

See Note 2, “Accounting Policies,” to our Notes to the Unaudited Condensed Consolidated Financial Statements for a description of recently adopted and recently issued accounting standards.

Forward-looking statements

All statements made herein that are not historical facts should be considered as
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to differ
materially. These statements include, but are not limited to, statements
regarding the expected benefits and costs of the transaction between Wesco and
Anixter, including anticipated future financial and operating results,
synergies, accretion and growth rates, and the combined company's plans,
objectives, expectations and intentions, statements that address the combined
company's expected future business and financial performance, and other
statements identified by words such as "anticipate," "plan," "believe,"
"estimate," "intend," "expect," "project," "will" and similar words, phrases or
expressions. These forward-looking statements are based on current expectations
and beliefs of Wesco's management, as well as assumptions made by, and
information currently available to, Wesco's management, current market trends
and market conditions and involve risks and uncertainties, many of which are
outside of Wesco's and Wesco's management's control, and which may cause actual
results to differ materially from those contained in forward-looking statements.
Accordingly, you should not place undue reliance on such statements.

Those risks, uncertainties and assumptions include the risk of any unexpected
costs or expenses resulting from the transaction, the risk that the transaction
could have an adverse effect on the ability of the combined company to retain
customers and retain and hire key personnel and maintain relationships with its
suppliers, customers and other business relationships and on its operating
results and business generally, or the risk that problems may arise in
successfully integrating the businesses of the companies, which may result in
the combined company not operating as effectively and efficiently as expected,
the risk that the combined company may be unable to achieve synergies or other
anticipated benefits of the transaction or it may take longer than expected to
achieve those synergies or benefits, the risk that the leverage of the company
may be higher than anticipated, the impact of natural disasters (including as a
result of climate change), health epidemics, pandemics and other outbreaks, such
as the ongoing COVID-19 pandemic, supply chain disruptions, and the impact of
Russia's invasion of Ukraine, including the impact of sanctions or other actions
taken by the U.S. or other countries, the increased risk of cyber incidents and
exacerbation of key materials shortages, inflationary cost pressures, material
cost increases, demand

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                   WESCO INTERNATIONAL, INC. AND SUBSIDIARIES


volatility, and logistics and capacity constraints, which may have a material
adverse effect on the combined company's business, results of operations and
financial condition, and other important factors that could cause actual results
to differ materially from those projected. All such factors are difficult to
predict and are beyond each company's control. Additional factors that could
cause results to differ materially from those described above can be found in
WESCO International, Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 2021 and WESCO International, Inc.'s other reports filed with the
SEC.

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