Published: 2022-02-25 00:00:00 ET

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Basis of Presentation

The consolidated financial statements include the accounts of Wesco International and all of its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Out-of-Period Adjustment

In the fourth quarter of 2020, management determined that the Company’s inventories were overstated by $60.3 million because of a misstatement in inventory cost absorption accounting, which occurred over multiple periods and also impacted inventories acquired in business combinations during those periods. Accordingly, the Consolidated Balance Sheet at December 31, 2020 reflects a reduction to inventories of $60.3 million, an increase to goodwill of $33.9 million and a decrease to deferred income tax liabilities of $12.0 million. The resulting effect of the out-of-period adjustment on the Consolidated Statement of Income and Comprehensive Income for the year ended December 31, 2020 was a $18.9 million increase to cost of goods sold, which decreased net income for the year by $14.4 million. Management concluded that this misstatement was not material to the prior year or the financial statements of any previously filed annual or interim periods.

Change in Estimates

During the second quarter of 2021, the Company established a new corporate brand strategy that will result in migrating certain legacy sub-brands to a master brand architecture. The Company accounts for the trademarks associated with these sub-brands as intangible assets. As of December 31, 2020, $39.1 million of the trademarks impacted by the master brand strategy had indefinite lives and $9.5 million had remaining estimated useful lives ranging from 3 to 8 years. As disclosed further below, the Company continually evaluates whether events or circumstances have occurred that would require a change to the estimated useful lives of indefinite-lived and definite lived intangible assets. When such a change is warranted, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Accordingly, during the second quarter of 2021, the Company changed the estimated useful lives of the trademarks affected by the new corporate brand strategy to coincide with the expected period of time to migrate such sub-brands to the master brand architecture. The Company assigned remaining estimated useful lives to these trademarks, including those that previously had indefinite lives, ranging from less than one year to 5 years. The Company assessed these intangible assets for impairment prior to amortizing them over their revised estimated remaining useful lives. No impairment losses were identified as a result of these tests. For the year ended December 31, 2021, the Company recognized $32.0 million of amortization expense resulting from these changes in estimated useful lives.

Reclassifications

The Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019, respectively, include certain reclassifications to previously reported amounts to conform to the current period's presentation. Such reclassifications had no impact on the totals of operating, investing and financing cash flow activities for those years.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s best knowledge of current events and actions Wesco may undertake in the future, actual results may ultimately differ from the estimates.

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Revenue Recognition

Wesco’s revenue arrangements generally consist of single performance obligations to transfer a promised good or service, or a combination of goods and services. Revenue is measured as the amount of consideration Wesco expects to receive in exchange for transferring goods or providing services. Revenue is recognized when control has transferred to the customer, which is generally when the product has shipped from a Wesco facility or directly from a supplier. However, transfer may occur at a later date depending on the agreed upon terms, such as delivery at the customer's designated location, or based on consignment terms. For products that ship directly from suppliers to customers, Wesco acts as the principal in the transaction and recognizes revenue on a gross basis. When providing services, sales are recognized over time as control transfers to the customer, which occurs as services are rendered. Wesco generally satisfies its performance obligations within a year or less.

Wesco generally does not have significant financing terms associated with its contractual arrangements; payments are normally received within 60 days. There are generally no significant costs associated with obtaining customer contracts. Wesco typically passes through warranties offered by manufacturers or suppliers to its customers. Sales taxes (and value added taxes in foreign jurisdictions) collected from customers and remitted to governmental authorities are excluded from net sales.

Supplier Volume Rebates

Wesco receives volume rebates from certain suppliers based on contractual arrangements with such suppliers. Volume rebates are included within other receivables in the Consolidated Balance Sheets, and represent the estimated amounts due to Wesco based on forecasted purchases and the rebate provisions of the various supplier contracts. The corresponding rebate income is recorded as a reduction to cost of goods sold. Receivables under the supplier rebate program were $219.1 million at December 31, 2021 and $136.7 million at December 31, 2020. The supplier volume rebate income as a percentage of net sales was 1.4% in 2021, 1.1% in 2020 and 1.2% in 2019.

Cash Equivalents

Cash equivalents are defined as highly liquid investments with original maturities of 90 days or less when purchased.

Allowance for Expected Credit Losses

Wesco recognizes expected credit losses resulting from the inability of its customers to make required payments through an allowance account that is measured each reporting period. Wesco estimates credit losses over the life of its trade accounts receivable using a combination of historical loss data, current credit conditions, specific customer circumstances, and reasonable and supportable forecasts of future economic conditions. The allowance for expected credit losses was $41.7 million at December 31, 2021 and $23.9 million at December 31, 2020. The total amount recorded as selling, general and administrative expense related to credit losses was $12.9 million, $10.1 million and $7.0 million for 2021, 2020 and 2019, respectively.

Inventories

Inventories primarily consist of merchandise purchased for resale and are stated at the lower of cost and net realizable value. Cost is determined principally under the average cost method. Wesco reduces the carrying value of its inventories at the earlier of identifying an item that is considered to be obsolete or in excess of supply relative to demand, or no movement in a prescribed number of months. Reserves for excess and obsolete inventories were $50.3 million and $28.7 million at December 31, 2021 and 2020, respectively. The total expense related to excess and obsolete inventories, which is included in cost of goods sold, was $37.1 million, $15.7 million and $10.0 million for 2021, 2020 and 2019, respectively.

Property, Buildings and Equipment

Property, buildings and equipment are recorded at cost. Depreciation expense is determined using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over either their respective lease terms or their estimated lives, whichever is shorter. Estimated useful lives range from five to forty years for buildings and leasehold improvements and two to ten years for furniture, fixtures and equipment.

Costs incurred during the application development stage of internally developed software are capitalized and are reported at the lower of unamortized cost or net realizable value. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred. Capitalized costs include external direct costs of materials and services consumed in developing internal-use computer software, payroll and payroll-related costs for employees who are directly associated with and who devote time to the internal-use computer software project, as well as interest costs. Internal-use computer software is amortized using the straight-line method over its estimated useful life, typically three to seven years.

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Expenditures for new facilities and improvements that extend the useful life of an asset are capitalized. Ordinary repairs and maintenance are expensed as incurred. When property is retired or otherwise disposed, the cost and the related accumulated depreciation are removed from the accounts and any resulting gains or losses are recorded and reported as selling, general and administrative expenses.

Of Wesco’s $379.0 million net book value of property, buildings and equipment as of December 31, 2021, $133.6 million consists of land, buildings and leasehold improvements that are geographically dispersed among Wesco’s 800 branches, warehouses and sales offices, mitigating the risk of impairment. Wesco assesses its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of any such assets may not be fully recoverable. Changes in circumstances include technological advances, changes in the business model, capital structure, economic conditions or operating performance. The evaluation is based upon, among other things, utilization, serviceability and assumptions developed by management, which are categorized as Level 3 of the fair value hierarchy, related to the estimated future undiscounted cash flows that these assets are expected to generate. When the sum of the undiscounted cash flows is less than the carrying value of the asset (asset group), an impairment loss is recognized to the extent that carrying value exceeds fair value. Management applies its best judgment when performing these evaluations.

Leases

The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Classification and initial measurement of the right-of-use asset and lease liability are determined at the lease commencement date. The Company elected the short-term lease measurement and recognition exemption; therefore, leases with an initial term of 12 months or less are not recorded on the balance sheet. Operating lease expense is recognized on a straight-line basis over the lease term.

Operating lease assets and liabilities are recognized at the commencement date based on the present value of the future minimum lease payments. Certain leases contain rent escalation clauses that are either fixed or adjusted periodically for inflation or market rates and such clauses are factored into the Company's determination of lease payments. Wesco also has variable lease payments that do not depend on a rate or index, primarily for items such as common area maintenance and real estate taxes, which are recorded as variable expense when incurred. The operating lease asset includes advance payments and excludes incentives and initial direct costs incurred.

The Company's arrangements include certain non-lease components such as common area and other maintenance for leased real estate, as well as mileage, fuel and maintenance costs related to leased automobiles and trucks. Wesco accounts for these non-lease components separately from the associated lease components. The Company does not guarantee any residual value in its lease agreements, and there are no material restrictions or covenants imposed by lease arrangements. Real estate leases typically include one or more options to extend the lease, or terminate early. The Company regularly evaluates the renewal options, and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. For most of Wesco’s leases, the discount rate implicit in the lease is not readily determinable. Accordingly, the Company uses its incremental borrowing rate based on the information available at the lease commencement date to discount lease payments to the present value.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and indefinite-lived intangible assets are tested for impairment annually during the fourth quarter, or more frequently if triggering events occur, indicating that their carrying value may not be recoverable. Wesco tests for goodwill impairment on a reporting unit level. The Company first assesses qualitative factors, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant events such as changes in key personnel, changes in the composition or carrying amount of the net assets of a reporting unit, and changes in in share price, to determine whether it is more likely than not that the fair value of Wesco's reporting units are less than their carrying values. If the qualitative assessment indicates that the fair values of the Company's reporting units may not exceed their respective carrying values, then Wesco performs a quantitative test for impairment by comparing the fair value of each reporting unit to its carrying value. The Company determines the fair values of its reporting units using a discounted cash flow analysis and consideration of market multiples. The discounted cash flow analysis uses certain assumptions, including expected operating margins supported by a combination of historical results, current forecasts, market data and recent economic events, which are categorized within Level 3 of the fair value hierarchy. The Company uses a discount rate that reflects market participants' cost of capital. Wesco evaluates the recoverability of indefinite-lived intangible assets using the relief-from-royalty method based on projected financial information. Significant inputs used in the relief-from-royalty method include projected revenues, discount rates, royalty rates, and applicable income tax rates. At December 31, 2021 and 2020, goodwill and indefinite-lived trademarks totaled $4.0 billion.

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The determination of fair value involves significant management judgment, particularly as it relates to the underlying assumptions and factors around expected operating margins and discount rate. Management applies its best judgment when assessing the reasonableness of financial projections. Fair values are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill and indefinite-lived intangible impairment tests will prove to be an accurate prediction of future results.

Definite Lived Intangible Assets

Definite lived intangible assets are amortized over 1 to 20 years. Certain customer relationships are amortized using an accelerated method whereas all other definite lived intangible assets subject to amortization use a straight-line method. In either case, the amortization method reflects the pattern in which the economic benefits of the respective assets are consumed or otherwise used. Wesco continually evaluates whether events or circumstances have occurred that would indicate the remaining estimated useful lives of definite lived intangible assets require revision or that the remaining carrying value of such assets may not be recoverable.

Insurance Programs

Wesco uses commercial insurance for auto, workers’ compensation, casualty and health claims, and information technology as a risk-reduction strategy to minimize catastrophic losses. The Company’s strategy involves large deductible policies where Wesco must pay all costs up to the deductible amount. Wesco estimates the reserve for these programs based on historical incident rates and costs. The assumptions included in developing this accrual include the period of time between the incurrence and payment of a claim. The total liability related to insurance programs was $30.6 million and $27.9 million at December 31, 2021 and 2020, respectively.

Income Taxes

Wesco accounts for income taxes under the asset and liability method, which requires the recognition of deferred income taxes for events that have future tax consequences. Under this method, deferred income taxes are recognized (using enacted tax laws and rates) based on the future income tax effects of differences in the carrying amounts of assets and liabilities for financial reporting and tax purposes. The effect of a tax rate change on deferred tax assets and liabilities is recognized in income in the period of change.

Wesco recognizes deferred tax assets at amounts that are expected to be realized. To make such determination, management evaluates all positive and negative evidence, including but not limited to, prior, current and future taxable income, tax planning strategies and future reversals of existing taxable temporary differences. A valuation allowance is recognized if it is “more-likely-than-not” that some or all of a deferred tax asset will not be realized. Wesco regularly assesses the realizability of deferred tax assets.

Wesco accounts for uncertainty in income taxes using a "more-likely-than-not" recognition threshold. Due to the subjectivity inherent in the evaluation of uncertain tax positions, the tax benefit ultimately recognized may materially differ from the estimate recognized in the consolidated financial statements. Wesco recognizes interest and penalties related to uncertain tax benefits as part of interest expense and income tax expense, respectively.

The Tax Cuts and Jobs Act of 2017 (the “TCJA”) imposed a one-time tax on the deemed repatriation of undistributed foreign earnings (the “transition tax”). Except for a portion of foreign earnings previously taxed in the U.S. that can effectively be distributed without further material U.S. or foreign taxation, the Company continues to assert that the undistributed earnings of its foreign subsidiaries are indefinitely reinvested. To the extent the earnings of the Company's foreign subsidiaries are distributed in the form of dividends, such earnings may be subject to additional taxes. The Company believes that it is able to maintain a sufficient level of liquidity for its domestic operations and commitments without incurring any material tax cost to repatriate cash held by its foreign subsidiaries.

The provisions of the TCJA also introduced U.S. taxation on certain global intangible low-taxed income ("GILTI"). Wesco has elected to account for GILTI tax as a component of income tax expense.

Foreign Currency

The local currency is the functional currency for most of the Company's operations outside the U.S. Assets and liabilities of these operations are translated to U.S. dollars at the exchange rate in effect at the end of each period. Income statement accounts are translated at an exchange rate that approximates the average for the period. Translation adjustments arising from the use of differing exchange rates from period to period are included as a component of other comprehensive income (loss) within stockholders’ equity. Gains and losses from foreign currency transactions are included in net income for the period.

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Defined Benefit Pension Plan

Liabilities and expenses for defined benefit pension plans are determined using actuarial methodologies and incorporate significant assumptions, including the interest rate used to discount the future estimated cash flows, the expected long-term rate of return on plan assets, and several assumptions relating to the employee workforce (salary increases, retirement age, and mortality). Unrealized gains and losses related to the Company's defined benefit pension obligations are recognized as a component of other comprehensive income (loss) within stockholders' equity. Gains or losses resulting from plan amendments, curtailments, and settlements are recognized as a component of other non-operating income and expenses ("other, net") in the period of the remeasurement.

Fair Value of Financial Instruments

The Company measures the fair value of assets and liabilities on a recurring and nonrecurring basis according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date; Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, and Level 3 inputs are unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to measurements involving significant unobservable inputs (Level 3).

The Company measures the fair values of goodwill, intangible assets and property, buildings and equipment on a nonrecurring basis if required by impairment tests applicable to these assets, as described above.

Other, net

Other non-operating income and expenses ("other, net") primarily includes the non-service cost components of net periodic pension cost (benefit) and foreign exchange gains and losses.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles of Accounting Standards Codification ("ASC") Topic 740, Income Taxes, and simplifies other aspects of accounting for income taxes. The amendments in this ASU were effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption was permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company adopted this ASU in the first quarter of 2021. The adoption of this guidance did not have a material impact on the consolidated financial statements and notes thereto presented herein.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Management is currently evaluating the impact that the adoption of this accounting standard will have on its consolidated financial statements and notes thereto.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. Management does not expect the replacement of London Interbank Offered Rate (LIBOR) and the related adoption of the optional guidance under this accounting standard to have a material impact on the Company's consolidated financial statements and notes thereto.

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

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Wesco distributes products and provides services to customers globally in various end markets within its business segments. The segments, which consist of EES, CSS, and UBS operate in the United States, Canada and various other international countries.

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

			Year Ended December 31,
(In thousands)			2021						2020						2019
Electrical & Electronic Solutions			$	7,621,263					$	5,479,760					$	4,860,541
Communications & Security Solutions			5,715,238						3,323,264						909,496
Utility & Broadband Solutions			4,881,011						3,522,971						2,588,880
Total by segment			$	18,217,512					$	12,325,995					$	8,358,917

			Year Ended December 31,
(In thousands)			2021						2020						2019
United States			$	13,157,866					$	9,110,453					$	6,234,119
Canada			2,747,187						1,892,321						1,647,066
Other International(1)			2,312,459						1,323,221						477,732
Total by geography(2)			$	18,217,512					$	12,325,995					$	8,358,917

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

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

Due to the terms of certain contractual arrangements, Wesco bills or receives payment from its customers in advance of satisfying the respective performance obligation. Such advance billings or payments are recorded as deferred revenue and recognized as revenue when the performance obligation has been satisfied and control has transferred to the customer, which is generally upon shipment. Deferred revenue is usually recognized within a year or less from the date of the advance billing or payment. At December 31, 2021 and 2020, $35.5 million and $24.3 million, respectively, of deferred revenue was recorded as a component of other current liabilities in the Consolidated Balance Sheets.

The Company also has certain long-term contractual arrangements where revenue is recognized over time based on the cost-to-cost input method. As of December 31, 2021 and 2020, the Company had contract assets of $33.4 million and $19.4 million, respectively, resulting from contracts where the amount of revenue recognized exceeded the amount billed to the customer. Contract assets are recorded in the Consolidated Balance Sheets as a component of prepaid expenses and other current assets.

Wesco’s revenues are adjusted for variable consideration, which includes customer volume rebates, returns and discounts. Wesco measures variable consideration by estimating expected outcomes using analysis and inputs based upon historical data, as well as current and forecasted information. Variable consideration is reviewed by management on a monthly basis and revenue is adjusted accordingly. Variable consideration reduced revenue for the years ended December 31, 2021, 2020 and 2019 by approximately $433.4 million, $269.5 million and $106.6 million, respectively. As of December 31, 2021 and 2020, the Company's estimated product return obligation was $38.8 million and $38.9 million, respectively.

Billings to customers for shipping and handling are recognized in net sales. Wesco has elected to recognize shipping and handling costs as a fulfillment cost. Shipping and handling costs recorded as a component of selling, general and administrative expenses totaled $248.3 million, $149.3 million and $71.7 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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The Company uses a market approach to determine the fair value of its debt instruments, utilizing quoted prices in active markets, interest rates and other relevant information generated by market transactions involving similar instruments. Therefore, the inputs used to measure the fair value of the Company's debt instruments are classified as Level 2 within the fair value hierarchy.

The carrying value of Wesco's debt instruments with fixed interest rates was $2,880.7 million and $3,730.1 million as of December 31, 2021 and 2020, respectively. The estimated fair value of this debt was $3,118.0 million and $4,084.7 million as of December 31, 2021 and 2020, respectively. The reported carrying values of Wesco's other debt instruments, including those with variable interest rates, approximated their fair values as of December 31, 2021 and 2020.

The Company purchases foreign currency forward contracts to minimize the effect of fluctuating foreign currency-denominated accounts on its earnings. The foreign currency forward contracts are not designated as hedges for accounting purposes. The Company's strategy is to negotiate terms for its derivatives and other financial instruments to be highly effective, such that the change in the value of the derivative offsets the impact of the underlying hedge. Its counterparties to foreign currency forward contracts have investment-grade credit ratings. The Company regularly monitors the creditworthiness of its counterparties to ensure no issues exist that could affect the value of its derivatives.

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

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

			EES						CSS						UBS						Total
(In thousands)
Balance as of January 1, 2020			$	573,447					$	235,711					$	949,882					$	1,759,040
Adjustments to goodwill for acquisitions (Note 6)(1) (2) (3)			264,538						868,936						250,553						1,384,027
Foreign currency exchange rate changes			15,471						10,853						17,778						44,102
Balance as of December 31, 2020			$	853,456					$	1,115,500					$	1,218,213					$	3,187,169
Adjustments to goodwill for acquisitions (Note 6)(4)			1,124						8,603						4,215						13,942
Foreign currency exchange rate changes and other			6,378						(2,391)						3,235						7,222
Balance as of December 31, 2021			$	860,958					$	1,121,712					$	1,225,663					$	3,208,333

(1)    Adjustments to goodwill include the final allocation of the purchase price paid to acquire SLS, as disclosed in Note 6, "Acquisitions and Disposals", which is reflected in the EES segment.

(2)    Adjustments to goodwill include an increase of $33.9 million resulting from the out-of-period adjustment related to inventory cost absorption accounting, as described in Note 2, "Accounting Policies", which affected the EES, CSS and UBS segments by $20.2 million, $2.0 million, and $11.7 million, respectively.

(3)    Adjustments to goodwill include $26.1 million that was classified as held for sale on the UBS segment as of December 31, 2020, as disclosed in Note 7, "Assets and Liabilities Held For Sale". Such amount was disposed in the first quarter of 2021 as part of the Canadian divestitures disclosed in Note 6, "Acquisitions and Disposals".

(4)    Includes the effect on goodwill of the adjustments to the assets acquired and liabilities assumed in the merger with Anixter since their initial measurement, as described in Note 6, "Acquisitions and Disposals".

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Intangible Assets

The components of intangible assets are as follows:

									December 31, 2021																		December 31, 2020
			Life (in years)						Gross Carrying Amount (1)						Accumulated Amortization (1)						Net Carrying Amount						Gross Carrying Amount (1)						Accumulated Amortization (1)						Net Carrying Amount
									(In thousands)
Intangible assets:
Trademarks(2)			Indefinite						$	795,065					$	—					$	795,065					$	833,793					$	—					$	833,793
Customer relationships(3)			10 - 20						1,431,251						(308,180)						1,123,071						1,434,554						(227,585)						1,206,969
Distribution agreements(3)			15 - 19						29,212						(22,714)						6,498						29,212						(21,040)						8,172
Trademarks(2)(3)			1 - 12						38,758						(20,058)						18,700						24,898						(11,415)						13,483
Non-compete agreements			2						4,300						(3,493)						807						4,462						(1,384)						3,078
									$	2,298,586					$	(354,445)					$	1,944,141					$	2,326,919					$	(261,424)					$	2,065,495

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

(2)As disclosed in Note 2, "Accounting Policies", the Company assigned remaining estimated useful lives to certain trademarks, including those that previously had indefinite lives.

(3)The net carrying amount as of December 31, 2020 excluded $1.0 million of trademarks, $3.3 million of customer relationships and $1.4 million of distribution agreements that were classified as held for sale and disposed in the first quarter of 2021 as part of the Canadian divestitures disclosed in Note 7, "Assets and Liabilities Held For Sale".

Amortization expense related to intangible assets totaled $119.6 million, $66.5 million and $35.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. For the year ended December 31, 2021, amortization expense includes $32.0 million resulting from the changes in estimated useful lives of certain legacy trademarks that are migrating to the Company's master brand architecture, as described in Note 2, "Accounting Policies".

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

For the year ending December 31,			(In thousands)
2022			$	92,593
2023			83,287
2024			80,827
2025			77,710
2026			60,834
Thereafter			753,825

The Company performed its annual impairment tests of goodwill and indefinite-lived intangible assets during the fourth quarter of 2021 by assessing qualitative factors to determine whether it was more likely than not that the fair values of its reporting units and indefinite-lived intangible assets were less than their respective carrying amounts. In performing this qualitative assessment, the Company assessed relevant events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant events such as changes in key personnel, changes in the composition or carrying amount of the net assets of a reporting unit, and changes in share price. As a result of this assessment, the Company determined that it was more likely than not that the fair values of its reporting units and indefinite-lived intangible assets continued to exceed their respective carrying amounts and, therefore, a quantitative impairment test was unnecessary.

The annual impairment tests of goodwill and indefinite-lived intangible assets involve the assessment of factors, events and circumstances at a point in time that are subject to change. As a result, there can be no assurance that the fair values of the Company's reporting units and indefinite-lived intangible assets will exceed their carrying values in the future, and that goodwill and indefinite-lived intangible assets will be fully recoverable.

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Anixter International Inc.

On June 22, 2020, Wesco completed its acquisition of Anixter International Inc. ("Anixter"), a Delaware corporation. Pursuant to the terms of the Agreement and Plan of Merger, dated January 10, 2020 (the “Merger Agreement”), by and among Anixter, Wesco and Warrior Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Wesco (“Merger Sub”), Merger Sub was merged with and into Anixter (the “Merger”), with Anixter surviving the Merger and continuing as a wholly owned subsidiary of Wesco. On June 23, 2020, Anixter merged with and into Anixter Inc., with Anixter Inc. surviving to become a wholly owned subsidiary of Wesco.

The Company used the net proceeds from the issuance of senior unsecured notes, borrowings under its revolving credit and accounts receivable securitization facilities (as described further in Note 10, "Debt"), as well as cash on hand, to finance the acquisition of Anixter and related transaction costs.

At the effective time of the Merger, each outstanding share of common stock of Anixter (subject to limited exceptions) was converted into the right to receive (i) $72.82 in cash, (ii) 0.2397 shares of common stock of Wesco, par value $0.01 per share and (iii) 0.6356 depositary shares, each representing a 1/1,000th interest in a share of newly issued fixed-rate reset cumulative perpetual preferred stock of Wesco, Series A, with a $25,000 stated amount per whole preferred share and an initial dividend rate equal to 10.625%.

Anixter was a leading distributor of network and security solutions, electrical and electronic solutions, and utility power solutions with locations in over 300 cities across approximately 50 countries, and 2019 annual sales of more than $8 billion. The Merger brought together two companies with highly compatible capabilities and characteristics. The combination of Wesco and Anixter created an enterprise with scale and has afforded the Company the opportunity to digitize its business and expand its services portfolio and supply chain offerings.

The total fair value of consideration transferred for the Merger consisted of the following:

			(In thousands)
Cash portion attributable to common stock outstanding			$	2,476,010
Cash portion attributable to options and restricted stock units outstanding			87,375
Fair value of cash consideration			2,563,385
Common stock consideration			313,512
Series A preferred stock consideration			573,786
Fair value of equity consideration			887,298
Extinguishment of Anixter obligations, including accrued and unpaid interest			1,247,653
Total purchase consideration			$	4,698,336
Supplemental cash flow disclosure related to acquisitions:
Cash paid for acquisition			$	3,811,038
Less: Cash acquired			(103,463)
Cash paid for acquisition, net of cash acquired			$	3,707,575

The Merger was accounted for as a business combination with Wesco acquiring Anixter in accordance with ASC 805, Business Combinations. Under the acquisition method of accounting, the purchase consideration was allocated to the identified assets acquired and liabilities assumed based on their respective acquisition date fair value, with any excess allocated to goodwill. The fair value estimates were based on income, market and cost valuation methods using primarily unobservable inputs developed by management, which are categorized as Level 3 in the fair value hierarchy. Specifically, the fair values of the identified trademark and customer relationship intangible assets were estimated using the relief-from-royalty and multi-period excess earnings methods, respectively. Significant inputs used to value these identifiable intangible assets included projected revenues and expected operating margins, customer attrition rates, discount rates, royalty rates, and applicable income tax rates. The excess purchase consideration recorded as goodwill is not deductible for income tax purposes, and has been assigned to the Company's reportable segments based on their relative fair values, as disclosed in Note 5, "Goodwill and Intangible Assets". The resulting goodwill is primarily attributable to Anixter's workforce, significant cross-selling opportunities in additional geographies, enhanced scale, and other operational efficiencies.

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During the second quarter of 2021, the Company finalized its allocation of the purchase consideration to the respective fair values of assets acquired and liabilities assumed in the acquisition of Anixter. As the Company obtained additional information during the measurement period, it recorded adjustments to its preliminary estimates of fair value, which were as of June 30, 2020. As presented in the table below, the net impact of these measurement period adjustments was an increase to goodwill of $16.4 million.

The following table sets forth the allocation of the purchase consideration to the respective fair value of assets acquired and liabilities assumed for the acquisition of Anixter:

			Preliminary Fair Value Estimates(1)						Measurement Period Adjustments						Final Purchase Price Allocation(1)
Assets			(In thousands)
Cash and cash equivalents			$	103,463					$	—					$	103,463
Trade accounts receivable			1,309,894						(8,928)						1,300,966
Other receivables			116,386						—						116,386
Inventories			1,424,768						(14,906)						1,409,862
Prepaid expenses and other current assets			53,462						14,202						67,664
Property, buildings and equipment			215,513						(3,792)						211,721
Operating lease assets			262,238						18,047						280,285
Intangible assets			1,832,700						5,365						1,838,065
Goodwill			1,367,981						16,356						1,384,337
Other assets			114,258						25,589						139,847
Total assets			$	6,800,663					$	51,933					$	6,852,596
Liabilities
Accounts payable			$	920,163					$	(1,239)					$	918,924
Accrued payroll and benefit costs			69,480						—						69,480
Short-term debt and current portion of long-term debt			13,225						—						13,225
Other current liabilities			221,574						12,745						234,319
Long-term debt			77,822						(205)						77,617
Operating lease liabilities			200,286						17,017						217,303
Deferred income taxes			392,165						(15,111)						377,054
Other noncurrent liabilities			207,612						38,726						246,338
Total liabilities			$	2,102,327					$	51,933					$	2,154,260
Fair value of net assets acquired, including goodwill and intangible assets			$	4,698,336					$	—					$	4,698,336

(1)    The preliminary fair value estimates are as of June 30, 2020. As disclosed above, the Company finalized its purchase price allocation during the measurement period.

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The following table sets forth the identifiable intangible assets and their estimated weighted-average useful lives:

Identifiable Intangible Assets						Estimated Fair Value						Weighted-Average Estimated Useful Life in Years
						(In thousands)
Customer relationships						$	1,098,900					19
Trademarks						735,000						Indefinite
Non-compete agreements						4,165						2
Total identifiable intangible assets						$	1,838,065

The results of operations of Anixter are included in the consolidated financial statements beginning on June 22, 2020, the acquisition date. For the years ended December 31, 2021 and 2020, the consolidated statements of income include $9.5 billion and $4.5 billion of net sales, respectively, and $580.6 million and $180.0 million of income from operations, respectively, for Anixter. For the years ended December 31, 2021 and 2020, the Company incurred costs related to the Merger of $158.5 million and $132.2 million, respectively, which primarily consist of advisory, legal, integration, separation and other costs. These costs are included in selling, general and administrative expenses for both periods.

Pro Forma Financial Information

The following unaudited pro forma financial information presents combined results of operations for the periods presented, as if the Company had completed the Merger on January 1, 2019. The unaudited pro forma financial information includes adjustments to amortization and depreciation for intangible assets and property, buildings and equipment, adjustments to interest expense for the additional indebtedness incurred to complete the acquisition (including the amortization of debt discount and issuance costs), transaction costs, change in control and severance costs, dividends accrued on the Series A preferred stock, compensation expense associated with the Wesco phantom stock unit awards described in Note 14, "Employee Benefit Plans", as well as the respective income tax effects of such adjustments. For the year ended December 31, 2020, adjustments totaling $7.0 million increased the unaudited pro forma net income attributable to common stockholders, and adjustments totaling $201.3 million decreased the unaudited pro forma net income attributable to common stockholders for the year ended December 31, 2019. The unaudited pro forma financial information does not reflect any cost savings, operating synergies or revenue enhancements that Wesco may achieve as a result of its acquisition of Anixter, the costs to integrate the operations of Wesco and Anixter or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements. The unaudited pro forma financial information presented below is not necessarily indicative of consolidated results of operations of the combined business had the acquisition occurred at the beginning of the respective periods, nor is it necessarily indicative of future results of operations of the combined company.

			Year Ended
(In thousands)			December 31, 2020						December 31, 2019
Pro forma net sales			$	16,016,902					$	17,204,472
Pro forma net income attributable to common stockholders			119,839						285,100

Canadian Divestitures

On August 6, 2020, the Company entered into a Consent Agreement with the Competition Bureau of Canada regarding the merger with Anixter. Under the Consent Agreement, the Company was required to divest certain legacy Wesco utility and data communications businesses in Canada, which had total net sales of approximately $110 million and $120 million for the years ended December 31, 2020 and 2019, respectively. In February 2021, the Company completed such divestitures for cash consideration totaling $56.0 million. The Company recognized a net gain from the sale of these businesses of $8.9 million, which is reported as a component of selling, general and administrative expenses for the year ended December 31, 2021. These dispositions fulfilled the Company’s divestiture commitments under the Consent Agreement and the net cash proceeds were used to repay debt.

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On August 6, 2020, the Company entered into a Consent Agreement with the Competition Bureau of Canada regarding the merger with Anixter. Under the Consent Agreement, the Company agreed to divest certain legacy Wesco businesses in Canada. Accordingly, the Company determined that the assets and liabilities of these legacy Wesco businesses in Canada met the held for sale criteria as of December 31, 2020. These businesses did not meet the criteria to be classified as discontinued operations. As disclosed in Note 6, "Acquisitions and Disposals", the Company completed these divestitures in February 2021.

The assets and liabilities classified as held for sale were as follows:

			As of
			December 31, 2020
			(In thousands)
Trade accounts receivable, net			$	4,258
Inventories			16,438
Prepaid expenses and other current assets			395
Property, buildings and equipment, net			263
Operating lease assets			1,938
Intangible assets, net			5,722
Goodwill			26,059
Total assets held for sale			$	55,073
Accounts payable			$	3,639
Other current liabilities			541
Operating lease liabilities			1,537
Total liabilities held for sale			$	5,717

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8. PROPERTY, BUILDINGS AND EQUIPMENT

The following table sets forth the components of property, buildings and equipment:

			As of December 31,
			2021						2020(1)
			(In thousands)
Buildings and leasehold improvements			$	165,691					$	169,873
Furniture, fixtures and equipment(2)			281,864						272,704
Software costs(2)			250,447						229,279
			698,002						671,856
Accumulated depreciation and amortization			(365,345)						(312,106)
			332,657						359,750
Land			25,600						26,409
Construction in progress			20,755						12,998
			$	379,012					$	399,157

(1)    The components of property, buildings and equipment as of December 31, 2020 exclude a total of $0.3 million that is classified as held for sale, as disclosed in Note 7, "Assets and Liabilities Held For Sale".

(2)    The furniture, fixtures and equipment, and software costs components of property, buildings and equipment as of December 31, 2020 reflect a $6.4 million reclassification between the previously reported amounts of those components to conform to the current period's presentation.

Depreciation expense was $61.6 million, $40.8 million and $15.9 million, and capitalized software amortization was $27.5 million, $14.3 million and $10.6 million, in 2021, 2020 and 2019, respectively. As of December 31, 2021 and 2020, unamortized software costs were $103.4 million and $117.5 million, respectively. Furniture, fixtures and equipment include finance leases of $31.9 million and $25.7 million and related accumulated depreciation of $12.4 million and $7.9 million as of December 31, 2021 and 2020, respectively.

The Company capitalizes costs associated with implementing its various cloud computing arrangements. Capitalized implementation costs, which are recorded as a component of other assets in the Consolidated Balance Sheets, were $39.6 million and $8.8 million as of December 31, 2021 and 2020, respectively, and the related accumulated amortization was $2.0 million and $1.1 million, respectively.

9. LEASES

Wesco leases substantially all of its real estate, as well as automobiles, trucks, information technology hardware, and other equipment under lease arrangements classified as operating.

The Company's finance leases, which are recorded in the Consolidated Balance Sheets as a component of property, buildings and equipment, current portion of long-term debt and long-term debt, are not material to the consolidated financial statements and notes thereto. Accordingly, finance leases have not been disclosed herein.

The following table sets forth supplemental balance sheet information related to operating leases for the periods presented:

			As of December 31,
(In thousands)			2021						2020(1)
Operating lease assets			$	530,863					$	534,705
Current operating lease liabilities(2)			129,881						128,322
Noncurrent operating lease liabilities			414,248						414,889
Total operating lease liabilities			$	544,129					$	543,211

(1)    Operating lease assets and liabilities of $1.9 million and $2.1 million, respectively, are classified as held for sale as of December 31, 2020, as disclosed in Note 7, "Assets and Liabilities Held For Sale".

(2)    Current operating lease liabilities are recorded as a component of other current liabilities in the Consolidated Balance Sheets.

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The following table sets forth the Company's total lease cost, which is recorded as a component of selling, general and administrative expenses, for the periods presented:

			Year Ended December 31,
(In thousands)			2021						2020						2019
Operating lease cost			$	169,892					$	127,725					$	73,613
Short-term lease cost			3,578						494						90
Variable lease cost			49,464						36,230						23,385
Total lease cost			$	222,934					$	164,449					$	97,088

Variable lease cost consists of the non-lease components described in Note 2, "Accounting Policies", as well as taxes and insurance for Wesco's leased real estate.

The following table sets forth supplemental cash flow information related to operating leases for the periods presented:

			Year Ended December 31,
(In thousands)			2021						2020						2019
Operating cash flows from operating leases			$	153,626					$	117,106					$	75,775
Right-of-use assets obtained in exchange for new operating lease liabilities			157,523						121,207						60,586

As of December 31, 2021 and 2020, the weighted-average remaining lease term for operating leases was 6.0 years and 6.1 years, respectively. The weighted-average discount rate used to measure operating leases was 4.2% and 4.6% as of December 31, 2021 and 2020, respectively.

The following table sets forth the maturities of the Company's operating lease liabilities and reconciles the respective undiscounted payments to the operating lease liabilities in the Consolidated Balance Sheet as of December 31, 2021:

			(In thousands)
2022			$	152,919
2023			126,012
2024			94,494
2025			64,875
2026			48,813
Thereafter			136,123
Total undiscounted operating lease payments			623,236
Less: imputed interest			(79,107)
Total operating lease liabilities			$	544,129

Operating lease payments include $26.9 million related to options to extend lease terms that are reasonably certain of being exercised. As of December 31, 2021, the Company has additional leases related to facilities that have not yet commenced of $67.1 million. These operating leases, which are not recorded in the Consolidated Balance Sheet as of December 31, 2021, will commence in 2022 with lease terms of 1.5 to 10.5 years.

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The following table sets forth Wesco’s outstanding indebtedness:

			As of December 31,
			2021						2020
			(In thousands)
International lines of credit			$	7,354					$	29,575
Accounts Receivable Securitization Facility			1,270,000						950,000
Revolving Credit Facility			596,959						250,000
5.375% Senior Notes due 2021			—						500,000
5.50% Anixter Senior Notes due 2023			58,636						58,636
5.375% Senior Notes due 2024			—						350,000
6.00% Anixter Senior Notes due 2025			4,173						4,173
7.125% Senior Notes due 2025			1,500,000						1,500,000
7.250% Senior Notes due 2028, less debt discount of $8,088 and $9,332 in 2021 and 2020, respectively			1,316,912						1,315,668
Finance lease obligations			18,563						17,931
Total debt			4,772,597						4,975,983
Plus: Fair value adjustments to the Anixter Senior Notes			957						1,650
Less: Unamortized debt issuance costs			(62,484)						(78,850)
Less: Short-term debt and current portion of long-term debt			(9,528)						(528,830)
Total long-term debt			$	4,701,542					$	4,369,953

International Lines of Credit

Certain foreign subsidiaries of Wesco have entered into uncommitted lines of credit, some of which are overdraft facilities, to support local operations. The maximum borrowing limit varies by facility and ranges between $0.6 million and $31.0 million. The 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 its revolving credit facility. The applicable interest rate for borrowings under these lines of credit varies by country and is governed by the applicable loan agreement. The average interest rate for these facilities was 3.35% and 3.40% at December 31, 2021 and 2020, respectively.

Accounts Receivable Securitization Facility

On June 22, 2020, Wesco Distribution amended its accounts receivable securitization facility (the “Receivables Facility”) pursuant to the terms and conditions of a Fifth Amended and Restated Receivables Purchase Agreement (the “Receivables Purchase Agreement”), by and among WESCO Receivables Corp. (“Wesco Receivables”), Wesco Distribution, the various purchaser groups from time to time party thereto and PNC Bank, National Association, as Administrator. The Receivables Purchase Agreement amended and restated the receivables purchase agreement entered into on September 24, 2015 (the “Prior Receivables Purchase Agreement”).

The Receivables Purchase Agreement, among other things, increased the purchase limit under the Prior Receivables Purchase Agreement from $600 million to $1,025 million, with the opportunity to exercise an accordion feature that permits increases in the purchase limit up to an aggregate commitment of $1,400 million, subject to customary conditions, extended the maturity date to June 22, 2023 and added and amended certain defined terms. Borrowings under the Receivables Facility bear interest at the 30-day LIBOR rate, with a LIBOR floor, plus applicable spreads. The interest rate spread under the Receivables Purchase Agreement of 1.20% increased from 0.95% under the Prior Receivables Purchase Agreement. The Receivables Facility has a commitment fee of 0.45%.

On December 14, 2020, Wesco Distribution amended its Receivables Facility pursuant to the terms and conditions of a First Amendment to the Fifth Amended and Restated Receivables Purchase Agreement (the “First Receivables Amendment”). The First Receivables Amendment amended the Receivables Purchase Agreement and permitted an increase to the purchase limit from $1,025 million to $1,200 million. The maturity date, interest rate spread, and commitment fee of the Receivables Facility remained unchanged.

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On June 1, 2021, Wesco Distribution amended its Receivables Facility pursuant to the terms and conditions of a Third Amendment to the Fifth Amended and Restated Receivables Purchase Agreement (the “Third Receivables Amendment”). The Third Receivables Amendment, among other things, increased the purchase limit under the Receivables Purchase Agreement from $1,200 million to $1,300 million, increased the aggregate commitment under the accordion feature from $1,400 million to $1,500 million, extended the maturity date from June 22, 2023 to June 21, 2024, decreased the LIBOR floor from 0.50% to 0.00% and decreased the interest rate spread from 1.20% to 1.15%. The commitment fee of the Receivables Facility remained unchanged.

Under the Receivables Facility, Wesco sells, on a continuous basis, an undivided interest in all domestic accounts receivable to Wesco Receivables, a wholly owned special purpose entity (the “SPE”). The SPE sells, without recourse, a senior undivided interest in the receivables to financial institutions for cash while maintaining a subordinated undivided interest in the receivables, in the form of overcollateralization. Since Wesco maintains control of the transferred receivables, the transfers do not qualify for “sale” treatment. As a result, the transferred receivables remain on the balance sheet, and Wesco recognizes the related secured borrowing. Wesco has agreed to continue servicing the sold receivables for the third-party conduits and financial institutions at market rates; accordingly, no servicing asset or liability has been recorded.

As of December 31, 2021 and 2020, accounts receivable eligible for securitization totaled $1,728.1 million and $1,476.1 million, respectively. The Consolidated Balance Sheets as of December 31, 2021 and 2020 include $1,270.0 million and $950.0 million, respectively, of accounts receivable balances legally sold to third parties, as well as borrowings for equal amounts. At December 31, 2021, the interest rate for this facility was approximately 1.23%.

Revolving Credit Facility

On June 22, 2020, Wesco, Wesco Distribution and certain other subsidiaries of Wesco entered into a $1,100 million revolving credit facility (the “Revolving Credit Facility”), as a replacement of Wesco Distribution’s revolving credit facility entered into on September 26, 2019, pursuant to the terms and conditions of a Fourth Amended and Restated Credit Agreement, dated as of June 22, 2020 (the “Revolving Credit Agreement”), among Wesco Distribution, the other U.S. borrowers party thereto (collectively, the “U.S. Borrowers”), WESCO Distribution Canada LP (“Wesco Canada”), the other Canadian borrowers party thereto (collectively, the “Canadian Borrowers”), Wesco, the lenders party thereto and Barclays Bank PLC, as the administrative agent. The Revolving Credit Facility contains a letter of credit sub-facility of up to $175 million and an accordion feature allowing Wesco Distribution to request increases to the borrowing commitments under the Revolving Credit Facility of up to $500 million in the aggregate, subject to customary conditions. The Revolving Credit Facility matures in June 2025.

On December 14, 2020, Wesco Distribution and certain other subsidiaries of Wesco entered into an amendment to the Revolving Credit Facility pursuant to the terms and conditions of a First Amendment to Fourth Amended and Restated Credit Agreement, dated as of December 14, 2020 (the “Revolver Amendment”), among Wesco Distribution, the other U.S. borrowers party thereto, WESCO Distribution Canada LP, the other Canadian borrowers party thereto, Wesco, the lenders party thereto and Barclays Bank PLC, as administrative agent. The Revolver Amendment increased the revolving commitments from $1,100 million to $1,200 million and amended certain other defined terms. No other material terms were changed.

The obligations of Wesco Distribution and the other U.S. Borrowers under the Revolving Credit Facility have been guaranteed by Wesco and certain of Wesco Distribution’s subsidiaries (including certain subsidiaries of Anixter). The obligations of Wesco Canada and the other Canadian Borrowers under the Revolving Credit Facility (including certain subsidiaries of Anixter) have been guaranteed by certain subsidiaries of Wesco Canada and the other Canadian Borrowers. The Revolving Credit Facility is secured by (i) substantially all assets of Wesco Distribution, the other U.S. Borrowers and certain of Wesco Distribution’s subsidiaries (including certain subsidiaries of Anixter), other than, among other things, real property and accounts receivable sold or intended to be sold pursuant to the Receivables Facility, and (ii) substantially all assets of Wesco Canada, the other Canadian Borrowers and certain of Wesco Canada’s subsidiaries, other than, among other things, real property, in each case, subject to customary exceptions and limitations. The applicable interest rate for borrowings under the Revolving Credit Facility includes interest rate spreads based on available borrowing capacity that range between 1.25% and 1.50% for LIBOR-based borrowings and 0.25% and 0.50% for prime rate-based borrowings. At December 31, 2021, the interest rate for this facility was approximately 1.54%.

The Revolving Credit Agreement requires compliance with conditions that must be satisfied prior to any borrowing as well as ongoing compliance with certain customary affirmative and negative covenants. The Revolving Credit Agreement contains customary events of default. Upon the occurrence and during the continuance of an event of default, the commitments of the lenders may be terminated, and all outstanding obligations of the loan parties under the Revolving Credit Facility may be declared immediately due and payable.

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During 2021, Wesco borrowed $2,353.4 million under the Revolving Credit Facility and made repayments in the aggregate amount of $2,006.4 million. During 2020, aggregate borrowings and repayments under the prior and new revolving credit facilities were $1,197.9 million and $948.0 million, respectively. Wesco had $564.8 million available under the Revolving Credit facility at December 31, 2021, after giving effect to outstanding letters of credit and certain borrowings under the Company's international lines of credit, as compared to $801.5 million available under the Revolving Credit Facility at December 31, 2020, after giving effect to outstanding letters of credit and certain borrowings under the Company's international lines of credit.

5.375% Senior Notes due 2021

In November 2013, Wesco Distribution issued $500 million aggregate principal amount of 5.375% Senior Notes due 2021 (the "2021 Notes") through a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The 2021 Notes were issued at 100% of par and were governed by an indenture (the “2021 Indenture”) entered into on November 26, 2013 between Wesco Distribution, as issuer, and U.S. Bank National Association, as trustee. The 2021 Notes were unsecured senior obligations of Wesco Distribution and were guaranteed on a senior unsecured basis by Wesco International. The 2021 Notes had a stated interest rate of 5.375% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. The 2021 Notes had a maturity date of December 15, 2021 and were redeemable in whole or in part at any time. The net proceeds of the 2021 Notes were used to prepay a portion of the U.S. sub-facility of the then outstanding term loan due 2019.

Under the terms of a registration rights agreement dated as of November 26, 2013 among Wesco Distribution, Wesco International and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the representative of the initial purchasers of the 2021 Notes, Wesco Distribution and Wesco International agreed to register under the Securities Act notes having terms identical in all material respects to the 2021 Notes (the “2021 Exchange Notes”) and to make an offer to exchange the 2021 Exchange Notes for the 2021 Notes. Wesco Distribution launched the exchange offer on June 12, 2014 and the exchange offer expired on July 17, 2014.

On December 15, 2020, Wesco Distribution exercised its right to redeem the entire $500 million aggregate principal amount of the 2021 Notes, and U.S. Bank, National Association, as trustee under the 2021 Indenture, issued a notice of redemption to registered holders of the 2021 Notes.

On January 14, 2021, Wesco Distribution redeemed the $500 million aggregate principal amount of the 2021 Notes at a redemption price equal to 100% of the principal amount plus accrued interest to, but not including, January 14, 2021. The redemption of the 2021 Notes was funded with available cash, as well as borrowings under the Company's Receivables Facility and Revolving Credit Facility. The Company recognized a loss of $1.0 million from the redemption of the 2021 Notes resulting from the write-off of unamortized debt issuance costs, which is recorded as a component of interest expense in the Consolidated Statement of Income and Comprehensive Income for the year ended December 31, 2021.

5.375% Senior Notes due 2024

In June 2016, Wesco Distribution issued $350 million aggregate principal amount of 5.375% Senior Notes due 2024 (the "2024 Notes") through a private offering exempt from the registration requirements of the Securities Act. The 2024 Notes were issued at 100% of par and were governed by an indenture (the “2024 Indenture”) entered into on June 15, 2016 among Wesco Distribution, as issuer, Wesco International, as parent guarantor, and U.S. Bank National Association, as trustee. The 2024 Notes were unsecured senior obligations of Wesco Distribution and were guaranteed on a senior unsecured basis by Wesco International. The 2024 Notes had a stated interest rate of 5.375% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. The 2024 Notes had a maturity date of June 15, 2024. The Company used the net proceeds from the 2024 Notes to redeem its 6.0% Convertible Senior Debentures due 2029.

Under the terms of a registration rights agreement dated as of June 15, 2016 among Wesco Distribution, as the issuer, Wesco International, as parent guarantor, and Goldman, Sachs & Co., as representative of the initial purchasers of the 2024 Notes, Wesco Distribution and Wesco International agreed to register under the Securities Act notes having terms identical in all material respects to the 2024 Notes (the “2024 Exchange Notes”) and to make an offer to exchange the 2024 Exchange Notes for the 2024 Notes. Wesco Distribution launched the exchange offer on December 28, 2016 and the exchange offer expired on January 31, 2017.

On June 2, 2021, Wesco Distribution exercised its right to redeem the entire $350 million aggregate principal amount of the 2024 Notes, and U.S. Bank, National Association, as trustee under the 2024 Indenture, issued a notice of redemption to registered holders of the 2024 Notes.

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On July 2, 2021, Wesco Distribution redeemed the $350 million aggregate principal amount of the 2024 Notes at a redemption price equal to 101.344% of the principal amount plus accrued interest to, but not including, July 2, 2021. The redemption of the 2024 Notes was funded with borrowings under the Company's Receivables Facility and Revolving Credit Facility. The Company recognized a loss on debt extinguishment totaling $6.9 million, which included $4.7 million for the premium paid to redeem the 2024 Notes and $2.2 million for the write-off of unamortized debt issuance costs. The loss was recorded as a component of interest expense in the Consolidated Statement of Income and Comprehensive Income for the year ended December 31, 2021.

5.50% Senior Notes due 2023

6.00% Senior Notes due 2025

On April 30, 2020, in connection with the Merger, Wesco Distribution commenced offers to purchase for cash (each, a “Wesco Tender Offer” and, together the “Wesco Tender Offers”) any and all of Anixter Inc.’s outstanding (i) 5.50% Senior Notes due 2023 (the “Anixter 2023 Senior Notes”), $350.0 million aggregate principal amount, issued under the Indenture, dated as of August 18, 2015 (the “Anixter 2023 Indenture”), by and among Anixter Inc., Anixter and Wells Fargo Bank, National Association, as trustee, and (ii) 6.00% Senior Notes due 2025 (the “Anixter 2025 Senior Notes” and, together with the Anixter 2023 Senior Notes, the "Anixter Senior Notes"), $250.0 million aggregate principal amount, issued under the Indenture, dated as of November 13, 2018 (the “Anixter 2025 Indenture” and, together with the Anixter 2023 Indenture, the “Anixter Indentures”) by and among Anixter Inc., Anixter and Wells Fargo Bank, National Association, as trustee.

Concurrent with the Wesco Tender Offers, Anixter Inc. commenced consent solicitations to amend the definition of "Change of Control" under the applicable Indenture to exclude the Merger and related transactions and expressly permit a merger between Anixter Inc. and Anixter (the “Anixter Consent Solicitations”).

On June 23, 2020 (the "Expiration Date"), following the completion of the Merger, the Wesco Tender Offers and Anixter Consent Solicitations expired and settled. Pursuant to the terms of the Offer to Purchase and Consent Solicitation Statement, dated April 30, 2020, holders of the Anixter Senior Notes that validly tendered and did not validly withdraw prior to such date, received total tender offer consideration of $1,012.50 per $1,000 principal amount of Anixter Senior Notes, which amount, in each case, included an early tender payment of $50.00 per $1,000 principal amount of Anixter Senior Notes. Holders who validly delivered their consents at or prior to the Expiration Date received a consent fee of $2.50 per $1,000 principal amount of Anixter Senior Notes.

As of December 31, 2021, $58.6 million and $4.2 million aggregate principal amount of the Anixter 2023 Senior Notes and Anixter 2025 Senior Notes, respectively, were outstanding.

7.125% Senior Notes due 2025

7.250% Senior Notes due 2028

On June 12, 2020, Wesco Distribution issued $1,500 million aggregate principal amount of 7.125% Senior Notes due 2025 (the “2025 Notes”) and $1,325 million aggregate principal amount of 7.250% Senior Notes due 2028 (the “2028 Notes” and, together with the 2025 Notes, the “Notes”). The 2025 Notes were issued at a price of 100.000% of the aggregate principal amount. The 2028 Notes were issued at a price of 99.244% of the aggregate principal amount. Wesco incurred costs related to the issuance of the 2025 Notes and 2028 Notes totaling $33.1 million and $29.3 million, respectively, which were recorded as a reduction to the carrying value of the debt and are being amortized over the respective lives of the notes.

The Notes were issued pursuant to, and are governed by, an indenture (the “Notes Indenture”), dated as of June 12, 2020, between the Company, Wesco Distribution and U.S. Bank National Association, as trustee (the “Trustee”). The Notes and related guarantees were issued in a private transaction exempt from the Securities Act and have not been, and will not be, registered under the Securities Act and may not be offered or sold in the U.S. absent registration or an applicable exemption from, or in a transaction not subject to the registration requirements of the Securities Act and other applicable securities laws.

The Company used the net proceeds from the issuance of the Notes, together with borrowings under its Revolving Credit Facility and Receivables Facility and existing cash on hand, to finance the Merger and the other transactions contemplated by the Merger Agreement. The use of proceeds included (i) paying the cash portion of the Merger consideration to stockholders of Anixter, (ii) refinancing certain existing indebtedness of Anixter contemplated by the Merger Agreement, including financing the satisfaction and discharge, defeasance, redemption or other repayment in full of the 5.125% Senior Notes due 2021 of Anixter Inc., a wholly owned subsidiary of Anixter, and financing payments in connection with the Anixter Consent Solicitations and Wesco Tender Offers, as described above, (iii) refinancing other indebtedness of the Company, and (iv) paying fees, costs and expenses in connection with the foregoing.

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The Notes are unsecured and unsubordinated obligations of Wesco Distribution and are guaranteed on an unsecured, unsubordinated basis by the Company and Anixter Inc. The 2025 Notes accrue interest at a rate of 7.125% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. The 2025 Notes will mature on June 15, 2025. The 2028 Notes accrue interest at a rate of 7.250% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. The 2028 Notes will mature on June 15, 2028.

Wesco Distribution may redeem all or a part of the 2025 Notes at any time prior to June 15, 2022 by paying a “make-whole” premium plus accrued and unpaid interest, if any, to but excluding the redemption date. In addition, at any time prior to June 15, 2022, Wesco Distribution may redeem up to 35% of the 2025 Notes with the net cash proceeds from certain equity offerings. At any time between June 15, 2022 and June 14, 2023, Wesco Distribution may redeem all or a part of the 2025 Notes at a redemption price equal to 103.563% of the principal amount. Between June 15, 2023 and June 14, 2024, Wesco Distribution may redeem all or a part of the 2025 Notes at a redemption price equal to 101.781% of the principal amount. On and after June 15, 2024, Wesco Distribution may redeem all or a part of the 2025 Notes at a redemption price equal to 100% of the principal amount.

Wesco Distribution may redeem all or a part of the 2028 Notes at any time prior to June 15, 2023 by paying a “make-whole” premium plus accrued and unpaid interest, if any, to but excluding the redemption date. In addition, at any time prior to June 15, 2023, Wesco Distribution may redeem up to 35% of the 2028 Notes with the net cash proceeds from certain equity offerings. At any time between June 15, 2023 and June 14, 2024, Wesco Distribution may redeem all or a part of the 2028 Notes at a redemption price equal to 103.625% of the principal amount. Between June 15, 2024 and June 14, 2025, Wesco Distribution may redeem all or a part of the 2028 Notes at a redemption price equal to 102.417% of the principal amount. Between June 15, 2025 and June 14, 2026, Wesco Distribution may redeem all or a part of the 2028 Notes at a redemption price equal to 101.208% of the principal amount. On and after June 15, 2026, Wesco Distribution may redeem all or a part of the 2028 Notes at a redemption price equal to 100% of the principal amount.

The Notes Indenture contains certain covenants that, among other things, limit (i) the Company’s and its subsidiaries’ ability to pay dividends on or repurchase the Company’s capital stock, incur liens on assets, engage in certain sale and leaseback transactions or sell certain assets, and (ii) the Company’s and any guarantor’s ability to sell all or substantially all of its assets to, or merge or consolidate with or into, other persons, in the case of each of the foregoing, subject to certain qualifications and exceptions, including the termination of certain of these covenants upon the Notes receiving investment grade credit ratings.

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

As of December 31, 2021, $1,500.0 million and $1,325.0 million aggregate principal amount of the 2025 Notes and 2028 Notes, respectively, were outstanding.

Debt Issuance Costs

Wesco capitalizes certain costs associated with the issuance of debt and such costs are amortized over the term of the respective debt instrument on a straight-line basis. Debt issuance costs are presented in the Consolidated Balance Sheets as a direct reduction to the carrying amount of the related debt liability. Upon prepayment of debt, the Company accelerates the recognition of an appropriate amount of the costs as refinancing or extinguishment of debt. As of December 31, 2021 and 2020, unamortized debt issuance costs of $62.5 million and $78.9 million were recorded in the Consolidated Balance Sheets, respectively.

Covenant Compliance

Wesco’s credit agreements contain various restrictive covenants that, among other things, impose limitations on: (i) dividend payments or certain other restricted payments or investments; (ii) the incurrence of additional indebtedness and guarantees; (iii) creation of liens; (iv) mergers, consolidation or sales of substantially all of Wesco’s assets; (v) certain transactions among affiliates; (vi) payments by certain subsidiaries to Wesco, and (vii) capital expenditures. In addition, the Revolving Credit Facility and the Receivables Facility require Wesco to meet certain fixed charge coverage tests depending on availability or liquidity, respectively.

Wesco was in compliance with all financial covenants contained in its debt agreements as of December 31, 2021.

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The following table sets forth the aggregate principal repayment requirements for all indebtedness for the next five years and thereafter, as of December 31, 2021:

			(In thousands)
2022			$	9,528
2023			64,831
2024			1,272,914
2025			2,105,486
2026			2,010
Thereafter			1,325,916
Total payments on debt			$	4,780,685
Debt discount			(8,088)
Total debt			$	4,772,597

Preferred Stock

There are 20 million shares of preferred stock authorized at a par value of $0.01 per share; there are no shares issued or outstanding. The Board of Directors has the authority, without further action by the stockholders, to issue all authorized preferred shares in one or more series and to fix the number of shares, designations, voting powers, preferences, optional and other special rights and the restrictions or qualifications thereof. The rights, preferences, privileges and powers of each series of preferred stock may differ with respect to dividend rates, liquidation values, voting rights, conversion rights, redemption provisions and other matters.

Series A Preferred Stock

The Company's Board of Directors authorized 25,000 shares of fixed-rate reset cumulative perpetual preferred stock, Series A, with a liquidation preference of $25,000 per whole preferred share and a par value of $0.01 per share (the "Series A Preferred Stock"). Depositary shares, each representing a 1/1,000th interest in a share of Series A Preferred Stock, are registered under the Securities Act of 1933, as amended.

In connection with the Merger, as described in Note 6, "Acquisitions and Disposals", the Company issued 21,611,534 depositary shares, representing an interest in approximately 21,612 shares of Series A Preferred Stock.

Holders of shares of the Series A Preferred Stock are entitled to receive, when, as and if declared by the Company's Board of Directors, cumulative cash dividends at an initial rate of 10.625% per annum of the $25,000 liquidation preference per share. On June 22, 2025, and every five-year period thereafter, the dividend rate on the Series A Preferred Stock resets and will be equal to the Five-year U.S. Treasury Rate plus a spread of 10.325%.

Holders of the Series A Preferred Stock are not entitled to convert or exchange their shares of Series A Preferred stock into shares of any of Wesco’s other classes or series of stock or into any other security of Wesco (other than upon a change of control involving the issuance of additional shares of common stock or other change of control transaction, in each case, approved by holders of common stock).

The Series A Preferred Stock has no stated maturity and will not be subject to any sinking fund, retirement fund or purchase fund or any other obligation of Wesco to redeem, repurchase or retire the Series A Preferred Stock.

Holders of the Series A Preferred Stock will have limited voting rights, including the right to elect two directors to the Board of Directors of the Company in the event dividends on the Series A Preferred Stock remain unpaid for the equivalent of six or more full quarterly dividend periods.

Common Stock

There are 210 million shares of common stock and 20 million shares of Class B common stock authorized at a par value of $0.01 per share. The Class B common stock is identical to the common stock, except for voting and conversion rights. The holders of Class B common stock have no voting rights. With certain exceptions, Class B common stock may be converted, at the option of the holder, into the same number of shares of common stock.

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The terms of the Revolving Credit Facility, as well as the indentures governing the 2025 Notes and 2028 Notes, place certain limits on the Company's ability to declare or pay dividends and repurchase common stock. The share repurchases in 2019, as described in Note 13, "Earnings Per Share", were made within the limits of Wesco's various credit agreements. At December 31, 2021 and 2020, no dividends had been declared and, therefore, no retained earnings were reserved for dividend payments.

Treasury Stock

Common stock purchased for treasury is recorded at cost. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock, with cost determined on a weighted-average basis.

12. INCOME TAXES

The following table sets forth the components of income before income taxes by jurisdiction:

			Year Ended December 31,
			2021						2020						2019
									(In thousands)
United States			$	396,769					$	26,031					$	198,566
Foreign			185,143						96,811						83,495
Income before income taxes			$	581,912					$	122,842					$	282,061

The following table sets forth the components of the provision for income taxes:

			Year Ended December 31,
			2021						2020						2019
									(In thousands)
Current income taxes:
Federal			$	107,919					$	25,605					$	31,695
State			30,206						11,322						8,616
Foreign			55,670						19,414						6,347
Total current income taxes			193,795						56,341						46,658
Deferred income taxes:
Federal			(62,302)						(17,913)						6,774
State			(12,327)						(7,264)						1,846
Foreign			(3,656)						(8,361)						4,585
Total deferred income taxes			(78,285)						(33,538)						13,205
Provision for income taxes			$	115,510					$	22,803					$	59,863

The following table sets forth the reconciliation between the federal statutory income tax rate and the effective tax rate:

			Year Ended December 31,
			2021						2020						2019
Federal statutory rate			21.0		%				21.0		%				21.0		%
State income taxes, net of federal income tax benefit			2.0						1.4						3.1
Deemed repatriation of undistributed foreign earnings			—						—						(1.3)
Tax effect of intercompany financing			(3.2)						(13.4)						(5.5)
Unrecognized tax benefits			2.5						2.1						(0.4)
Nondeductible expenses			0.6						5.7						0.7
Change in valuation allowance			(2.8)						1.8						0.6
Other			(0.2)						—						3.0
Effective tax rate			19.9		%				18.6		%				21.2		%

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The undistributed earnings of the Company's foreign subsidiaries amounted to approximately $1,851.6 million at December 31, 2021. Most of these earnings have been taxed in the U.S. under either the one-time transition tax or the GILTI tax regime imposed by the TCJA. Future distributions of previously taxed earnings by the Company's foreign subsidiaries should, therefore, result in minimal U.S. taxation. Wesco has elected to pay the transition tax in installments over eight years. As of December 31, 2021, the Company's liability for the transition tax was $60.7 million, which is recorded as components of other current and noncurrent liabilities in the Consolidated Balance Sheet. The Company continues to assert that the remaining undistributed earnings of its foreign subsidiaries are indefinitely reinvested. The distribution of earnings by Wesco's foreign subsidiaries in the form of dividends, or otherwise, may be subject to additional taxation. The Company estimates that additional taxes of approximately $82.2 million would be payable upon the remittance of all previously undistributed foreign earnings as of December 31, 2021, based upon the laws in effect on that date. The Company believes that it is able to maintain sufficient liquidity for its domestic operations and commitments without repatriating cash from Wesco's foreign subsidiaries.

The following table sets forth deferred tax assets and liabilities:

			As of December 31,
			2021												2020
									(In thousands)
			Assets						Liabilities						Assets						Liabilities
Accounts receivable			$	18,612					$	—					$	17,560					$	—
Inventories			13,302						—						14,793						—
Depreciation of property, buildings and equipment			—						45,397						—						60,687
Operating leases			142,964						141,686						134,377						136,477
Amortization of intangible assets			—						549,536						—						540,520
Employee benefits			36,410						—						53,040						—
Stock-based compensation			12,281						—						14,061						—
Prepaid royalty payments			34,866						—						—						—
Disallowed business interest expense(1)			11,163						—						2,755						—
Tax loss carryforwards			39,876						—						36,923						—
Foreign tax credit carryforwards			51,632						—						55,637						—
Other(1)			26,666						8,137						24,888						6,286
Deferred income taxes before valuation allowance			387,772						744,756						354,034						743,970
Valuation allowance			(46,269)						—						(60,629)						—
Total deferred income taxes			$	341,503					$	744,756					$	293,405					$	743,970

(1)    The deferred income tax asset of $2.8 million related to disallowed business interest expense as of December 31, 2020 was previously reported as a component of Other. This amount has been reclassified to conform to the current period's presentation.

Wesco had deferred tax assets of $35.5 million and $34.5 million as of December 31, 2021 and 2020, respectively, related to foreign net operating loss carryforwards. These net operating loss carryforwards expire beginning in 2022 through 2041, while some may be carried forward indefinitely. The Company has determined that certain foreign net operating loss carryforwards will not be realized before they expire. Accordingly, the Company has recorded a valuation allowance of $22.1 million and $22.3 million against deferred tax assets related to certain foreign net operating loss carryforwards at December 31, 2021 and 2020, respectively. Additionally, these foreign jurisdictions had deferred tax assets of $6.9 million and $8.2 million as of December 31, 2021 and 2020, respectively, related to other future deductible temporary differences. The Company has recorded a full valuation allowance against these amounts as of December 31, 2021 and 2020, respectively.

As of December 31, 2021 and 2020, Wesco had deferred tax assets of $4.4 million and $2.4 million, respectively, related to state net operating loss carryforwards. These carryforwards expire beginning in 2024 through 2040, while some may be carried forward indefinitely. The deferred tax assets related to disallowed business interest expense as of December 31, 2021 includes $4.7 million and $6.4 million for Federal and state income tax purposes, respectively. The carryforward period for disallowed business interest expense is indefinite.

As of December 31, 2021 and 2020, Wesco had deferred tax assets of $51.6 million and $55.6 million, respectively, related to foreign tax credit carryforwards. The foreign tax credit carryforwards expire beginning in 2027 through 2031. The Company has determined that certain foreign tax credit carryforwards will not be realized before they expire. Accordingly, the Company has recorded a valuation allowance of $17.3 million and $30.1 million against these deferred tax assets at December 31, 2021

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and 2020, respectively. Wesco’s ability to realize its deferred tax assets related to foreign tax credit carryforwards may be impacted by U.S. tax legislation, our ability to generate sufficient foreign source taxable income, and tax planning strategies that the Company may implement. The impact of these items, if any, on Wesco's assessment of the realizability of these deferred tax assets will be recorded as a discrete item in the period in which the Company's assessment changes.

The Company is under examination by tax authorities in various jurisdictions and remains subject to examination until the applicable statutes of limitation expire. The statutes of limitation for the material jurisdictions in which the Company files income tax returns remain open as follows:

United States — Federal						2017 and forward
United States — Material States						2017 and forward
Canada						2012 and forward
UK						2016 and forward
Australia						2017 and forward

The following table sets forth the reconciliation of gross unrecognized tax benefits:

			As of December 31,
			2021						2020						2019
			(In thousands)
Beginning balance January 1			$	68,075					$	54					$	1,293
Additions for current year tax positions			39,841						14,009						—
Additions for prior year tax positions			8,422						—						—
Additions for acquired tax positions			—						68,048						—
Reductions for prior year tax positions			(3,853)						(43)						—
Settlements			(118)						—						(1,290)
Lapse in statute of limitations			(3,837)						(15,886)						—
Foreign currency exchange rate changes			(1,239)						1,893						51
Ending balance December 31			$	107,291					$	68,075					$	54

The total amount of unrecognized tax benefits were $107.3 million and $68.1 million as of December 31, 2021 and 2020, respectively. The amount of unrecognized tax benefits that would affect the effective tax rate if recognized in the consolidated financial statements for the years ended December 31, 2021, 2020 and 2019 were $36.1 million, $29.1 million, and $0.1 million, respectively. Within the next twelve months, the amount of unrecognized tax benefits is expected to decrease by $14.3 million due to the expiration of statutes of limitation. Such change would result in a $3.2 million reduction in income tax expense.

The Company classifies interest related to unrecognized tax benefits as a component of interest expense, net in the Consolidated Statement of Income and Comprehensive Income. The Company recognized interest expense on unrecognized tax benefits of $0.9 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. In 2019, the Company recognized interest income on unrecognized tax benefits of $0.8 million. As of December 31, 2021 and 2020, Wesco had a liability of $6.4 million and $5.5 million, respectively, for interest expense related to unrecognized tax benefits. The Company classifies penalties related to unrecognized tax benefits as part of income tax expense. For the year ended December 31, 2021, penalties recorded in income tax expense were $3.4 million. Penalties recorded in income tax expense for 2020 and 2019 were immaterial. As of December 31, 2021 and 2020, Wesco had a liability of $4.9 million and $1.5 million, respectively, for penalties related to unrecognized tax benefits.

On October 22, 2021, one of the Company's Mexican affiliates received a tax assessment from the Mexican tax authorities related to its 2012 income tax return in the amount of approximately $26.0 million. The Company believes the assessment is without merit and has appealed it. The Company expects any potential liability remaining after availing itself of available administrative and judicial appeals to be immaterial to its consolidated financial statements and, accordingly, has not recorded a reserve.

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

The following table sets forth the details of basic and diluted earnings per share:

			Year Ended December 31,
			2021						2020						2019
(In thousands, except per share data)
Net income attributable to WESCO International, Inc.			$	465,382					$	100,560					$	223,426
Less: Preferred stock dividends			57,408						30,139						—
Net income attributable to common stockholders			$	407,974					$	70,421					$	223,426
Weighted-average common shares outstanding used in computing basic earnings per share			50,300						46,174						43,104
Common shares issuable upon exercise of dilutive equity awards			1,730						451						383
Weighted-average common shares outstanding and common share equivalents used in computing diluted earnings per share			52,030						46,625						43,487
Earnings per share attributable to common stockholders
Basic			$	8.11					$	1.53					$	5.18
Diluted			$	7.84					$	1.51					$	5.14

The computation of diluted earnings per share attributable to common stockholders excludes stock-based awards that would have an antidilutive effect on earnings per share. For the year ended December 31, 2021, there were no antidilutive stock-based awards, and for the years ended December 31, 2020 and 2019, there were approximately 1.8 million and 1.7 million antidilutive awards, respectively.

In December 2017, the Company's Board of Directors (the "Board") authorized the repurchase of up to $300 million of the Company's common stock through December 31, 2020 (the "Repurchase Authorization"). In October 2018, the Board approved an increase to the Repurchase Authorization from $300 million to $400 million.

The Company entered into certain accelerated stock repurchase agreements with a financial institution to repurchase shares of its common stock pursuant to the Repurchase Authorization. In exchange for up-front cash payments totaling $275.0 million, the Company repurchased 5,459,030 shares of common stock under the Repurchase Authorization, of which 3,455,584 shares were received during the year ended December 31, 2019. The Company did not repurchase, nor did it receive, any of its common stock during the years ended December 31, 2021 and 2020.

Defined Contribution Plans

Wesco Distribution sponsors a defined contribution retirement savings plan for the majority of its U.S. employees (the "WESCO Distribution, Inc. Retirement Savings Plan"). The Company matches contributions made by employees at an amount equal to 50% of participants' total monthly contributions up to 6% of eligible compensation. Contributions are made in cash and employees have the option to transfer balances allocated to their accounts into any of the available investment options. The Company may also make, subject to the Board of Directors' approval, a discretionary contribution to the WESCO Distribution, Inc. Retirement Savings Plan if certain predetermined profit levels are attained. Discretionary employer contribution charges of $13.1 million were incurred for the year ended December 31, 2021. There were no discretionary contributions for the years ended December 31, 2020 and 2019.

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Anixter Inc. sponsors a defined contribution plan covering all of its non-union U.S. employees (the "Anixter Inc. Employee Savings Plan"). The employer match for the Anixter Inc. Employee Savings Plan is equal to 50% of a participant's contribution up to 5% of the participant's compensation. Anixter Inc. will also make an annual contribution to the Anixter Inc. Employee Savings Plan on behalf of each active participant who is hired or rehired on or after July 1, 2015, or is not participating in the Anixter Inc. Pension Plan. The amount of the employer annual contribution is equal to either 2% or 2.5% of the participant’s compensation, as determined by the participant’s years of service. This contribution is in lieu of being eligible for the Anixter Inc. Pension Plan. Certain of Anixter Inc.'s foreign subsidiaries also have defined contribution plans. Contributions to these plans are based upon various levels of employee participation and legal requirements.

Effective January 1, 2022, the Anixter Inc. Employee Savings Plan will be merged with and into the WESCO Distribution, Inc. Retirement Savings Plan (the "U.S. Defined Contribution Plan Merger"). On December 31, 2021, participant account balances were transferred from the Anixter Inc. Employee Savings Plan to the WESCO Distribution, Inc. Retirement Savings Plan. In connection with the U.S. Defined Contribution Plan Merger, the WESCO Distribution, Inc. Retirement Savings plan will be amended to change the employer matching contribution at an amount equal to 100% of a participant’s eligible elective deferrals up to 3% of the participant’s eligible compensation and 50% of the next 4% of eligible compensation, and to eliminate the discretionary employer contributions.

WESCO Distribution Canada LP, a wholly-owned subsidiary of the Company, sponsors a defined contribution plan covering the current full-time employees of WESCO Distribution Canada LP and part-time employees meeting certain requirements for continuous service, earnings and minimum hours of employment (the "Wesco Canadian Defined Contribution Plan"). The Company makes contributions in amounts ranging from 3% to 5% of participants' eligible compensation based on years of continuous service. For employees having completed between 20 and 25 or more years of service as of January 1, 2015, the Company's contribution ranges from 5% to 7% of the respective participants' eligible compensation.

Anixter Canada Inc. sponsors a defined contribution plan for certain Canadian employees (the “Anixter Canadian Defined Contribution Plan”), which provides for core employer contributions in amounts ranging from 3% to 4% of participants' eligible compensation based on years of continuous service, plus a matching contribution equal to 25% of a participant’s elective contributions up to 6% of eligible compensation (for a maximum total employer contribution equal to 5.5%).

Effective January 1, 2022, the Anixter Canadian Defined Contribution Plan will be merged with and into an amended Wesco Canadian Defined Contribution Plan. The amended Wesco Canadian Defined Contribution Plan will provide a core employer contribution of 3% of a participant’s eligible compensation, plus a matching contribution equal to 50% of a participant’s elective contributions up to 4% of eligible compensation (for a maximum total employer contribution equal to 5%). The amended Wesco Canadian Defined Contribution Plan will also require employees of EECOL Electric Corp. hired on or after January 1, 2022 to join this Canadian defined contribution plan, and will permit enrollment for those not participating in the defined benefit plan described below.

Wesco incurred charges of $54.7 million, $18.3 million, and $22.9 million for the years ended December 31, 2021, 2020 and 2019, respectively, for all defined contribution plans.

Deferred Compensation Plans

Wesco Distribution sponsors a non-qualified deferred compensation plan (the "Wesco Deferred Compensation Plan") that permits select employees to make pre-tax deferrals of salary and bonus. Employees have the option to transfer balances allocated to their accounts in the Wesco Deferred Compensation Plan into any of the available investment options. The Wesco Deferred Compensation Plan is an unfunded plan. As of December 31, 2021, the Company's obligation under the Wesco Deferred Compensation Plan was $20.9 million, which was included in other noncurrent liabilities in the Consolidated Balance Sheet. As of December 31, 2020, the Company's obligation under the Wesco Deferred Compensation Plan was $27.4 million, of which $10.1 million was included in other current liabilities and $17.3 million was in other noncurrent liabilities in the Consolidated Balance Sheet.

Anixter Inc. sponsored a non-qualified deferred compensation plan (the "Anixter Deferred Compensation Plan") that permitted select employees to make pre-tax deferrals of salary and bonus. Interest was accrued monthly on the deferred compensation balances based on the average ten-year Treasury note rate for the previous three months times a factor of 1.4, and the rate was further adjusted if certain financial goals were achieved. In the fourth quarter of 2020, the Company terminated the Anixter Deferred Compensation Plan. Accordingly, a deferred compensation liability of $45.1 million was classified in other current liabilities in the Consolidated Balance Sheet at December 31, 2020. In the second quarter of 2021, the Company settled the liability for the Anixter Deferred Compensation Plan by making lump sum payments of $42.8 million directly to participants.

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The Company held assets in a Rabbi Trust arrangement to provide for the liability associated with the Anixter Deferred Compensation Plan. The assets were invested in marketable securities. As of December 31, 2020, the assets held in this arrangement were $39.6 million and were recorded in other current assets in the Consolidated Balance Sheet. In the second quarter of 2021, the Company liquidated this investment arrangement for approximately $39.7 million and used its proceeds plus available cash to fund the settlement of the Anixter Deferred Compensation Plan described above.

Defined Benefit Plans

Wesco sponsors a contributory defined benefit plan covering substantially all Canadian employees of EECOL Electric Corp., a wholly-owned subsidiary of the Company (the "EECOL Plan"). The EECOL Plan provides retirement benefits based on earnings and credited service, and participants contribute 2% of their earnings to the EECOL Plan. Participants become 100% vested after two years of continuous service or, if earlier, at the participant's normal retirement age.

Wesco also sponsors a Supplemental Executive Retirement Plan for certain executives of EECOL Electric Corp. (the "EECOL SERP"), which provides additional pension benefits based on earnings and credited service. The EECOL SERP is an unfunded plan. Effective January 1, 2013, the EECOL SERP was closed to new participants and existing participants became 100% vested. EECOL SERP participants now contribute 4% of their earnings to the EECOL Plan.

Anixter Inc. sponsors various defined benefit pension plans in the U.S., which consist of the Anixter Inc. Pension Plan, the Anixter Inc. Executive Benefit Plan, and the Supplemental Executive Retirement Plan (the "Anixter SERP") (together, the "Domestic Plans") and various defined benefit pension plans covering employees of foreign subsidiaries in Canada and Europe (together with the "EECOL Plan" and "EECOL SERP", the "Foreign Plans").

The Anixter Inc. Pension Plan was closed to entrants first hired or rehired on or after July 1, 2015. The majority of the Anixter defined benefit pension plans are non-contributory, and with the exception of the U.S. and Canada, cover substantially all full-time employees in their respective countries. Retirement benefits are provided based on compensation as defined in each of the plan agreements.

The Domestic Plans are funded as required by the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Service. The Foreign Plans are funded as required by applicable foreign laws.

In the fourth quarter of 2020, the Company terminated both the Anixter Inc. Executive Benefit Plan and the Anixter SERP. Accordingly, pension liabilities totaling $18.1 million associated with the Anixter Inc. Executive Benefit Plan and the Anixter SERP were classified as current in the Consolidated Balance Sheet at December 31, 2020. During the year ended December 31, 2021, the Company settled its liabilities for the Anixter Inc. Executive Benefit Plan and Anixter SERP by making lump sum payments directly to participants totaling $17.9 million.

During the fourth quarter of 2021, the Company adopted certain plan amendments to freeze the benefits provided under the Anixter Inc. Pension Plan effective December 31, 2021, to close participation in the EECOL Plan effective December 31, 2021, and to freeze the benefit accruals under the Pension Plan for Employees of Anixter Canada Inc., the EECOL Plan and the EECOL SERP, effective December 31, 2023. These amendments required the Company to remeasure the projected benefit obligations associated with these plans, resulting in a gain from curtailment totaling $36.6 million, which is recorded as a component of other non-operating income in the Consolidated Statement of Income and Comprehensive Income for the year ended December 31, 2021.

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The following table presents the changes in benefit obligations, plan assets and funded status for the defined benefit plans:

			Domestic Plans												Foreign Plans												Total
(In thousands)			2021						2020						2021						2020						2021						2020
Change in Projected Benefit Obligation
Beginning balance			$	332,484					$	—					$	486,855					$	134,852					$	819,339					$	134,852
Impact of acquisition(1)			—						317,893						—						301,206						—						619,099
Service cost			3,033						1,763						12,140						9,029						15,173						10,792
Interest cost			8,219						4,787						9,801						7,162						18,020						11,949
Participant contributions			—						—						846						728						846						728
Actuarial (gain) loss, including assumption changes			(10,649)						12,911						(35,483)						14,044						(46,132)						26,955
Benefits paid from plan assets			(8,988)						(4,222)						(11,343)						(9,008)						(20,331)						(13,230)
Benefits paid from Company assets			(527)						(547)						(461)						(448)						(988)						(995)
Curtailment			(3,900)						(101)						(32,680)						—						(36,580)						(101)
Plan amendment			—						—						(104)						(37)						(104)						(37)
Settlement			(17,889)						—						(219)						(1,235)						(18,108)						(1,235)
Foreign currency exchange rate changes			—						—						(5,256)						30,562						(5,256)						30,562
Ending balance			$	301,783					$	332,484					$	424,096					$	486,855					$	725,879					$	819,339
Change in Plan Assets at Fair Value
Beginning balance			$	355,287					$	—					$	365,718					$	103,385					$	721,005					$	103,385
Impact of acquisition(1)			—						324,292						—						218,644						—						542,936
Actual return on plan assets			24,432						35,217						19,661						23,947						44,093						59,164
Participant contributions			—						—						846						728						846						728
Employer contributions			17,889						—						10,240						6,838						28,129						6,838
Benefits paid			(8,988)						(4,222)						(11,343)						(9,008)						(20,331)						(13,230)
Settlement			(17,889)						—						(218)						(1,235)						(18,107)						(1,235)
Foreign currency exchange rate changes			—						—						(3,123)						22,419						(3,123)						22,419
Ending balance			$	370,731					$	355,287					$	381,781					$	365,718					$	752,512					$	721,005
Funded Status			$	68,948					$	22,803					$	(42,315)					$	(121,137)					$	26,633					$	(98,334)
Amounts Recognized in the Consolidated Balance Sheets
Other assets			$	68,948					$	40,921					$	4,818					$	179					$	73,766					$	41,100
Other current liabilities			—						(18,118)						(437)						(471)						(437)						(18,589)
Other noncurrent liabilities			—						—						(46,696)						(120,845)						(46,696)						(120,845)
Net amount recognized			$	68,948					$	22,803					$	(42,315)					$	(121,137)					$	26,633					$	(98,334)
Weighted Average Assumptions Used to Determine Benefit Obligations
Discount rate			2.9		%				2.6		%				2.4		%				2.0		%				2.6		%				2.2		%
Rate of compensation increase			—		%				3.8		%				3.4		%				3.2		%				3.4		%				3.4		%

(1)    The Company assumed the Domestic Plans and certain foreign plans in connection with the acquisition of Anixter on June 22, 2020, as disclosed in Note 6, "Acquisitions and Disposals". For all defined benefit plans assumed as part of the merger with Anixter, the projected benefit obligation and fair value of plan assets were remeasured as of the acquisition date.

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The measurement date for all plans is December 31st. Accordingly, at the end of each fiscal year, the Company determines the discount rate to measure the plan liabilities at their present value. The discount rate reflects the current rate at which the pension liabilities could effectively be settled at the measurement date. This rate was estimated at the end of 2021 and 2020 using a yield curve based on corporate bond data, which the Company concluded was consistent with observable market conditions and industry standards for developing spot rate curves.

At December 31, 2021 and 2020, the consolidated weighted-average discount rate of all plans was 2.6% and 2.2%, respectively, and these rates were used to measure the projected benefit obligation at the end of each respective year-end. The consolidated net funded status was $26.6 million at December 31, 2021, compared to a consolidated net unfunded status of $98.3 million at December 31, 2020.

At December 31, 2021 and 2020, the Company's projected benefit obligation was $301.8 million and $332.5 million, respectively, for the Domestic Plans and $424.1 million and $486.9 million, respectively, for the Foreign Plans. The Company had 9 plans at December 31, 2021 and 13 plans at December 31, 2020 for which the projected benefit obligation was in excess of the fair value of plan assets. For these plans, the aggregate projected benefit obligation was $214.5 million and $504.8 million, respectively, and the aggregate fair value of plan assets was $167.4 million and $365.4 million, respectively.

At December 31, 2021 and 2020, the Company' accumulated benefit obligation was $301.8 million and $328.2 million, respectively, for the Domestic Plans and $390.8 million and $417.6 million, respectively, for the Foreign Plans. The Company had 9 plans at December 31, 2021 and 13 plans at December 31, 2020 for which the accumulated benefit obligation was in excess of the fair value of plan assets. For these plans, the aggregate accumulated benefit obligation was $194.6 million and $435.6 million, respectively, and the aggregate fair value of plan assets was $167.4 million and $365.4 million, respectively.

The following tables set forth the components of net periodic pension (benefit) cost for the Company's defined benefit plans:

			Domestic Plans(1)																		Foreign Plans(1)																		Total
(In thousands)			2021						2020						2019						2021						2020						2019						2021						2020						2019
Components of Net Periodic Pension (Benefit) Cost
Service cost			$	3,033					$	1,763					$	—					$	12,140					$	9,029					$	4,602					$	15,173					$	10,792					$	4,602
Interest cost			8,219						4,787						—						9,801						7,162						4,362						18,020						11,949						4,362
Expected return on plan assets			(17,097)						(8,395)						—						(17,834)						(11,659)						(5,695)						(34,931)						(20,054)						(5,695)
Recognized actuarial gain			—						—						—						90						—						(63)						90						—						(63)
Curtailment			(3,900)						—						—						(32,680)						—						—						(36,580)						—						—
Settlement			290						—						—						(59)						(144)						—						231						(144)						—
Net periodic pension (benefit) cost			$	(9,455)					$	(1,845)					$	—					$	(28,542)					$	4,388					$	3,206					$	(37,997)					$	2,543					$	3,206

(1)     As described above, the Company assumed the Domestic Plans and certain foreign plans in connection with the acquisition of Anixter on June 22, 2020. The Company began recognizing the associated net periodic pension (benefit) cost as of the acquisition date.

The service cost of $15.2 million, $10.8 million and $4.6 million for the years ended December 31, 2021, 2020 and 2019, respectively, is reported as a component of selling, general and administrative expenses. The other components of net periodic pension (benefit) cost totaling net benefits of $53.2 million, $8.2 million and $1.4 million for the years ended December 31, 2021, 2020 and 2019, respectively, are presented as components of other non-operating income ("other income, net").

The following weighted-average actuarial assumptions were used to determine net periodic pension (benefit) cost:

			Domestic Plans(1)																		Foreign Plans(1)																		Total
			2021						2020						2019						2021						2020						2019						2021						2020						2019
Discount rate			2.6		%				2.9		%				—		%				2.0		%				2.2		%				4.0		%				2.3		%				2.5		%				4.0		%
Expected return on plan assets			5.3		%				5.5		%				—		%				4.9		%				5.2		%				6.4		%				5.1		%				5.3		%				6.4		%
Rate of compensation increase			3.8		%				3.8		%				—		%				3.2		%				3.4		%				3.8		%				3.4		%				3.5		%				3.8		%

(1)     As described above, the Company assumed the Domestic Plans and certain foreign plans in connection with the acquisition of Anixter on June 22, 2020. The Company began using the related assumptions as of the acquisition date.

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The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the invested assets and future assets to be invested to provide for the benefits included in the projected benefit obligation. The Company uses historic plan asset returns combined with current market conditions to estimate the rate of return. The weighted-average expected long-term rate of return on plan assets used in the determination of net periodic pension cost for 2021 was 5.1%.

As a result of the combined effect of valuation changes in both the equity and bond markets, the plan assets produced an actual gain of 6.0% in 2021. The difference between the expected return and actual return on plan assets is amortized into expense over the service lives of the plan participants. These amounts are reflected on the balance sheet through charges to accumulated other comprehensive loss, a component of stockholders’ equity.

The following table sets forth the changes and the end of year components of accumulated other comprehensive (income) loss for the defined benefit plans:

			Year Ended December 31,
(In thousands)			2021						2020
Changes to Balance:
Beginning balance, before tax effect			$	(3,062)					$	8,890
Prior service credit arising in current year			(100)						(37)
Net actuarial gain arising in current year			(93,064)						(12,154)
Recognized actuarial gain			(90)						—
Curtailment			36,580						(101)
Settlement			(231)						144
Foreign currency exchange rate changes			1,179						196
Ending balance, before tax effect			$	(58,788)					$	(3,062)
			As of December 31,
(In thousands)			2021						2020
Components of Balance:
Prior service credit			$	(137)					$	(37)
Net actuarial gain			(58,651)						(3,025)
Ending balance, before tax effect			(58,788)						(3,062)
Tax effect			13,605						562
Ending balance, after tax effect			$	(45,183)					$	(2,500)

The following benefit payments, which reflect expected future service, are expected to be paid as follows:

(In thousands)			Domestic Plans						Foreign Plans						Total
2022			$	11,215					$	9,430					$	20,645
2023			11,743						9,654						21,397
2024			12,385						10,294						22,679
2025			12,890						11,065						23,955
2026			13,508						11,525						25,033
2027 to 2031			73,410						84,171						157,581

The Company expects to contribute approximately $10.8 million to its Foreign Plans in 2022. The Company does not expect to make a contribution to its domestic qualified pension plan in 2022 due to its overfunded status.

The assets of the various defined benefit plans are held in separate independent trusts and managed by independent third party advisors. The investment objective for the defined benefit plans is to ensure an adequate level of assets is available to fund the benefits owed to employees and their beneficiaries when they become payable. In meeting this objective, the Company seeks to achieve a level of absolute investment return consistent with a prudent level of portfolio risk. The Company's risk preference is to refrain from exposing the plans to higher volatility in pursuit of potential higher returns.

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The asset mixes and the asset allocation guidelines for the Domestic Plans and Foreign Plans are summarized as follows:

			Domestic Plans
									Allocation Guidelines
			December 31, 2021						Min						Target						Max
Equities			10.8		%				5		%				10		%				15		%
Debt securities:
Domestic treasuries			36.1						—						34						—
Corporate bonds			25.7						—						40						—
Other			7.6						3						7						13
Total debt securities			69.4												81
Property/real estate			19.0						3						8						13
Other			0.8						—						1						—
			100.0		%										100		%

			Foreign Plans
									Allocation Guidelines
			December 31, 2021						Min						Target						Max
Equities			39.2		%				25		%				39		%				48		%
Debt securities:
Corporate bonds			4.5						—						—						37
Other			43.5						26						48						65
Total debt securities			48.0												48
Property/real estate			4.4						2						5						8
Insurance products			4.9						5						5						5
Other			3.5						3						3						13
			100.0		%										100		%

			Domestic Plans
									Allocation Guidelines
			December 31, 2020						Min						Target						Max
Equities			38.6		%				30		%				37		%				45		%
Debt securities:
Domestic treasuries			22.2						—						24						40
Corporate bonds			6.7						—						8						40
Other			15.6						9						14						19
Total debt securities			44.5												46
Property/real estate			14.8						9						16						23
Other			2.1						—						1						5
			100.0		%										100		%

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			Foreign Plans
									Allocation Guidelines
			December 31, 2020						Min						Target						Max
Equities			38.1		%				25		%				41		%				48		%
Debt securities:
Corporate bonds			5.9		%				1						1						37
Other			40.6						26						44						65
Total debt securities			46.5												45
Property/real estate			4.8						2						6						8
Insurance products			5.4						5						5						5
Other			5.2						3						3						12
			100.0		%										100		%

The plans' pension committees meet regularly to assess investment performance relative to asset allocation guidelines. The Company periodically rebalances its asset portfolios to be in line with its allocation guidelines.

For 2021, the investment policy guidelines of the Domestic Plans were as follows:

•Each asset class is managed by one or more active and passive investment managers

•Each asset class may be invested in a commingled fund, mutual fund, or separately managed account

•Investment in Exchange Traded Funds ("ETFs") is permissible

•Each manager is expected to be "fully invested" with minimal cash holdings

•Derivative instruments such as futures, swaps and options may be used on a limited basis; for funds that employ derivatives, the loss of invested capital to the Trust should be limited to the amount invested in the fund

•The equity portfolio is diversified by sector and geography

•The real assets portfolio is invested in Real Estate Investment Trusts ("REITs") and private real estate

•The fixed income is invested in U.S. Treasuries, investment grade corporate debt (denominated in U.S. dollars), and other credit investments including below investment grade rated bonds and loans, securitized credit, and emerging market debt

The investment policies for the Foreign Plans are the responsibility of the various trustees. Generally, the investment policy guidelines are as follows:

•Make sure that the obligations to the beneficiaries of the plan can be met

•Maintain funds at a level to meet the minimum funding requirements

•The investment managers are expected to provide a return, within certain tracking tolerances, close to that of the relevant market’s indices

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The following tables set forth the fair value of assets by asset category for the Domestic Plans and Foreign Plans:

			December 31, 2021
(In thousands)			Level 1						Level 2						Level 3						NAV (1)						Total
Domestic Plans
Equities			$	—					$	—					$	—					$	40,102					$	40,102
Debt securities:
Domestic treasuries			—						—						—						133,672						133,672
Corporate bonds			—						—						—						95,198						95,198
Other			—						—						—						28,246						28,246
Property/real estate			—						—						—						70,648						70,648
Other			2,865						—						—						—						2,865
Total investments in Domestic Plans			$	2,865					$	—					$	—					$	367,866					$	370,731
Foreign Plans
Equities			$	—					$	—					$	—					$	149,707					$	149,707
Debt securities:
Corporate bonds			—						—						—						17,328						17,328
Other			—						—						—						165,863						165,863
Property/real estate			—						—						—						16,632						16,632
Insurance products			—						18,781						—						—						18,781
Other			1,248						—						—						12,222						13,470
Total investments in Foreign Plans			$	1,248					$	18,781					$	—					$	361,752					$	381,781
Total
Equities			$	—					$	—					$	—					$	189,809					$	189,809
Debt securities:
Domestic treasuries			—						—						—						133,672						133,672
Corporate bonds			—						—						—						112,526						112,526
Other			—						—						—						194,109						194,109
Property/real estate			—						—						—						87,280						87,280
Insurance products			—						18,781						—						—						18,781
Other			4,113						—						—						12,222						16,335
Total investments			$	4,113					$	18,781					$	—					$	729,618					$	752,512

(1)     Investments measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy. The amounts presented in the tables above are intended to reconcile the fair value hierarchy to the total fair value of plan assets.

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			December 31, 2020
(In thousands)			Level 1						Level 2						Level 3						NAV (1)						Total
Domestic Plans
Equities			$	—					$	—					$	—					$	137,098					$	137,098
Debt securities:
Domestic treasuries			—						—						—						78,808						78,808
Corporate bonds			—						—						—						23,824						23,824
Other			—						—						—						55,547						55,547
Property/real estate			—						—						—						52,708						52,708
Other			7,302						—						—						—						7,302
Total investments in Domestic Plans			$	7,302					$	—					$	—					$	347,985					$	355,287
Foreign Plans
Equities			$	—					$	—					$	—					$	139,537					139,537
Debt securities:
Corporate bonds			—						—						—						21,677						21,677
Other			—						—						—						148,469						148,469
Property/real estate			—						—						—						17,365						17,365
Insurance products			—						19,611						—						—						19,611
Other			747						—						—						18,312						19,059
Total investments in Foreign Plans			$	747					$	19,611					$	—					$	345,360					$	365,718
Total
Equities			$	—					$	—					$	—					$	276,635					$	276,635
Debt securities:
Domestic treasuries			—						—						—						78,808						78,808
Corporate bonds			—						—						—						45,501						45,501
Other			—						—						—						204,016						204,016
Property/real estate			—						—						—						70,073						70,073
Insurance products			—						19,611						—						—						19,611
Other			8,049						—						—						18,312						26,361
Total investments			$	8,049					$	19,611					$	—					$	693,345					$	721,005

(1)     Investments measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy. The amounts presented in the tables above are intended to reconcile the fair value hierarchy to the total fair value of plan assets.

The assets of the Domestic Plans and Foreign Plans are measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities are classified in the fair value hierarchy based on the lowest level of any input that is significant to the measurement of fair value. Investments for which fair value is measured using the net asset value (NAV) per share practical expedient are not classified in the fair value hierarchy. The majority of pension assets are comprised of common/collective/pool funds (i.e., mutual funds). These funds are valued at the net asset value of shares held in the underlying funds.

The fair value methods described above may not be indicative of net realizable value or reflective of future fair values. Additionally, while the Company believes the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

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Other Benefits

As permitted by the Merger Agreement, Anixter granted restricted stock units prior to June 22, 2020 in the ordinary course of business to its employees and directors. These awards, for which vesting did not accelerate solely as a result of the Merger, were converted into cash-only settled Wesco phantom stock units, which vest ratably over a 3-year period. As of December 31, 2021 and 2020, the estimated fair value of these awards was $22.7 million and $22.8 million, respectively.

As of December 31, 2021, the Company's liability for these awards was $17.3 million, of which $10.9 million was included in accrued payroll and benefit costs and $6.4 million was a component of other noncurrent liabilities in the Consolidated Balance Sheet. As of December 31, 2020, the Company's liability for these awards was $11.7 million, of which $6.5 million was included in accrued payroll and benefit costs and $5.2 million was a component of other noncurrent liabilities in the Consolidated Balance Sheet.

The Company recognized compensation expense associated with these awards of $13.6 million and $9.2 million for the years ended December 31, 2021 and 2020, respectively, which is reported as a component of selling, general and administrative expenses.

Wesco sponsors a stock-based compensation plan. On May 27, 2021, the Company's stockholders approved the WESCO International, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”). The 2021 Plan is administered by the Compensation Committee of the Company's Board of Directors.

The 2021 Plan was designed to be the successor plan to all prior stock-based compensation plans. Accordingly, no new awards may be granted under the Company’s 1999 Long-Term Incentive Plan, as amended and restated (the “1999 Plan”) or any other prior plan. Awards outstanding under any such prior plans will remain in full force and effect under such plans according to their respective terms. To the extent that any such award is forfeited, terminates, expires or lapses without being exercised, or is settled for cash, the shares subject to such award not delivered will again be available for awards under the 2021 Plan.

The maximum number of shares of the Company’s common stock that may be granted pursuant to awards under the 2021 Plan is 2,150,000, less any shares issued under the 1999 Plan between March 31, 2021 and May 27, 2021. If any award granted under the 2021 Plan is forfeited, terminates, expires or lapses instead of being exercised, or is settled for cash, the shares subject to such award will again be available for grant under the 2021 Plan. Shares delivered by participants or withheld by the Company to pay all or a portion of the exercise price or withholding taxes with respect to stock option or stock appreciation right awards will not again be available for issuance. Shares delivered by participants or withheld by the Company to satisfy applicable tax withholding obligations with respect to restricted shares or restricted stock units will again be available for grant under the 2021 Plan. As of December 31, 2021, 2,138,865 shares of common stock were reserved under the 2021 Plan for future equity award grants.

Stock-based employee compensation awards outstanding under Wesco's plans are comprised of stock-settled stock appreciation rights, restricted stock units and performance-based awards. Compensation cost for all stock-based awards is measured at fair value on the date of grant and compensation cost is recognized, net of estimated forfeitures, over the service period for awards expected to vest. The fair value of stock-settled stock appreciation rights is determined using the Black-Scholes model. The fair value of restricted stock units and performance-based awards with performance conditions is determined by the grant-date closing price of Wesco’s common stock. The forfeiture assumption is based on Wesco’s historical employee behavior that is reviewed on an annual basis. No dividends are assumed. For stock-settled stock appreciation rights that are exercised and for restricted stock units and performance-based awards that vest, shares are issued out of Wesco's outstanding common stock.

Stock-settled stock appreciation rights vest ratably over a three-year period and terminate on the tenth anniversary of the grant date unless terminated sooner under certain conditions. Restricted stock unit awards granted in February 2020 and prior vest based on a minimum time period of three years. The special award described below vests in tranches. Restricted stock units awarded in 2021 vest ratably over a three-year period on each of the first, second and third anniversaries of the grant date. Vesting of performance-based awards is based on a three-year performance period, and the number of shares earned, if any, depends on the attainment of certain performance levels. Outstanding awards would vest upon the consummation of a change in control transaction and performance-based awards would vest at the target level.

On July 2, 2020, a special award of restricted stock units was granted to certain officers of the Company. These awards vest in tranches of 30% on each of the first and second anniversaries of the grant date and 40% on the third anniversary of the grant date, subject, in each case, to continued employment through the applicable anniversary date.

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Performance-based awards granted in 2021, 2020 and 2019 are based on two equally-weighted performance measures: the three-year average growth rate of Wesco's net income attributable to common stockholders and the three-year cumulative return on net assets.

Wesco recognized $30.8 million, $19.3 million and $19.1 million of non-cash stock-based compensation expense, which is included in selling, general and administrative expenses, for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, there was $45.1 million of total unrecognized compensation expense related to non-vested stock-based compensation arrangements for all awards previously made of which approximately $26.4 million is expected to be recognized in 2022, $17.0 million in 2023 and $1.7 million in 2024.

The aggregate intrinsic value of awards exercised during the years ended December 31, 2021, 2020, and 2019 was $69.7 million, $8.8 million, and $10.7 million, respectively. The gross deferred income tax benefit associated with the exercise of stock-based awards totaled $16.8 million, $2.0 million, and $2.5 million in 2021, 2020, and 2019, respectively.

The following table sets forth a summary of stock-settled stock appreciation rights and related information for the periods presented:

			Year Ended December 31,
			2021																								2020												2019
			Awards						Weighted-Average Exercise Price						Weighted-Average Remaining Contractual Life						Aggregate Intrinsic Value (In thousands)						Awards						Weighted-Average Exercise Price						Awards						Weighted-Average Exercise Price
Beginning of year			2,161,556						$	60.48																	2,337,049						$	59.72					2,351,633						$	59.26
Granted			139,592						77.05																		262,091						48.32						213,618						54.63
Exercised			(916,906)						60.70																		(391,339)						47.11						(113,099)						35.01
Canceled			(13,854)						54.42																		(46,245)						65.93						(115,103)						65.27
End of year			1,370,388						62.09						6.1						$	95,246					2,161,556						60.48						2,337,049						59.72
Exercisable at end of year			1,001,708						$	62.79					5.3						$	68,920					1,630,891						$	62.72					1,723,370						$	59.00

The following table sets forth the weighted-average assumptions used to estimate the fair value of stock-settled stock appreciation rights granted during the periods presented:

			Year Ended December 31,
			2021						2020						2019
Stock-settled stock appreciation rights granted			139,592						262,091						213,618
Risk free interest rate			0.8%						1.4%						2.5%
Expected life (in years)			7						5						5
Expected volatility			41%						30%						29%

The risk-free interest rate is based on the U.S. Treasury Daily Yield Curve rate as of the grant date. The expected life is based on historical exercise experience and the expected volatility is based on the volatility of the Company's daily stock prices over the expected life preceding the grant date.

The weighted-average fair value per stock-settled stock appreciation right granted was $33.19, $13.86 and $16.36 for the years ended December 31, 2021, 2020 and 2019, respectively.

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The following table sets forth a summary of time-based restricted stock units and related information for the periods presented:

			Year Ended December 31,
			2021												2020												2019
			Awards						Weighted-Average Fair Value						Awards						Weighted-Average Fair Value						Awards						Weighted-Average Fair Value
Unvested at beginning of year			921,495						$	43.15					363,729						$	60.00					327,798						$	57.87
Granted			314,480						77.81						656,717						37.44						192,106						54.13
Vested			(232,152)						44.10						(83,253)						69.17						(136,777)						46.52
Forfeited			(29,661)						63.86						(15,698)						56.79						(19,398)						59.62
Unvested at end of year			974,162						$	53.48					921,495						$	43.15					363,729						$	60.00

The following table sets forth a summary of performance-based awards and related information for the periods presented:

			Year Ended December 31,
			2021												2020												2019
			Awards						Weighted-Average Fair Value						Awards						Weighted-Average Fair Value						Awards						Weighted-Average Fair Value
Unvested at beginning of year			305,269						$	52.61					195,305						$	60.24					138,896						$	59.33
Granted			122,812						76.76						158,756						49.56						126,874						54.64
Vested			(22,371)						62.80						(25,909)						78.04						(25,696)						42.44
Forfeited			(24,891)						61.26						(22,883)						69.39						(44,769)						52.11
Unvested at end of year			380,819						$	59.23					305,269						$	52.61					195,305						$	60.24

Vesting of the 380,819 shares of performance-based awards in the table above is dependent upon the achievement of certain performance targets, including half that are dependent upon the three-year average growth rate of Wesco's net income attributable to common stockholders and the other half that are based upon the three-year cumulative return on net assets. These awards are accounted for as awards with performance conditions; compensation cost is recognized over the performance period based upon Wesco's determination of whether it is probable that the performance targets will be achieved.

From time to time, a number of lawsuits and claims have been or may be asserted against the Company relating to the conduct of its business, including litigation relating to commercial, product and employment matters (including wage and hour). The outcome of any litigation cannot be predicted with certainty, and some lawsuits may be determined adversely to Wesco. However, management does not believe that the ultimate outcome of any such pending matters is likely to have a material adverse effect on Wesco's financial condition or liquidity, although the resolution in any fiscal period of one or more of these matters may have a material adverse effect on Wesco's results of operations for that period.

As of December 31, 2021, the Company had $50.1 million in outstanding letters of credit and guarantees.

17. BUSINESS SEGMENTS

The Company has operating segments that are organized around three strategic business units consisting of EES, CSS and UBS. These operating segments are equivalent to the Company's reportable segments. The Company's chief operating decision maker evaluates the performance of its operating segments based primarily on net sales, income from operations, adjusted EBITDA, adjusted EBITDA margin percentage, and total assets.

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The following is a description of each of the Company's reportable segments and their business activities.

Electrical & 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.

Communications & 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 & 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 Wesco's 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.

Corporate

Corporate primarily incurs costs related to treasury, tax, information technology, legal and other centralized functions. The Company also has various corporate assets which are reported in corporate. 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.

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The following table sets forth financial information by reportable segment for the periods presented:

(In thousands)			Year Ended December 31, 2021
			EES						CSS						UBS						Corporate						Total
Net sales			$	7,621,263					$	5,715,238					$	4,881,011					$	—					$	18,217,512
Income from operations			542,059						395,343						412,740						(548,269)						801,873
Adjusted EBITDA			604,461						480,820						428,367						(337,965)						1,175,683
Adjusted EBITDA Margin %			7.9		%				8.4		%				8.8		%										6.5		%
Supplemental information:
Depreciation and amortization			$	55,998					$	82,870					$	22,447					$	37,239					$	198,554
Capital expenditures			4,469						3,197						5,207						41,873						54,746
			Year Ended December 31, 2020
(In thousands)			EES						CSS						UBS						Corporate						Total
Net sales			$	5,479,760					$	3,323,264					$	3,522,971					$	—					$	12,325,995
Income from operations			260,207						217,163						231,702						(362,034)						347,038
Adjusted EBITDA			308,327						280,656						265,593						(194,259)						660,317
Adjusted EBITDA Margin %			5.6		%				8.4		%				7.5		%										5.4		%
Supplemental information:
Depreciation and amortization			$	35,811					$	37,765					$	22,380					$	25,644					$	121,600
Capital expenditures			7,081						1,495						12,834						35,261						56,671
			Year Ended December 31, 2019
(In thousands)			EES						CSS						UBS						Corporate						Total
Net sales			$	4,860,541					$	909,496					$	2,588,880					$	—					$	8,358,917
Income from operations			261,788						43,835						184,931						(144,337)						346,217
Adjusted EBITDA			291,473						51,067						198,745						(110,769)						430,516
Adjusted EBITDA Margin %			6.0		%				5.6		%				7.7		%										5.2		%
Supplemental information:
Depreciation and amortization			$	28,569					$	7,155					$	13,583					$	12,800					$	62,107
Capital expenditures			20,405						3,093						6,460						14,109						44,067

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The following table sets forth total assets by reportable segment for the periods presented:

			As of
			December 31, 2021
(In thousands)			EES						CSS						UBS						Corporate(1)						Total
Total assets			$	4,098,335					$	4,601,132					$	3,266,231					$	652,001					$	12,617,699
			As of
			December 31, 2020
(In thousands)			EES						CSS						UBS						Corporate(1)						Total
Total assets			$	3,726,855					$	4,275,611					$	2,947,406					$	930,342					$	11,880,214

(1)Total assets for Corporate primarily consist of cash and cash equivalents, deferred income taxes, fixed assets and right-of-use assets associated with operating leases.

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,
			2021						2020
(In thousands)
United States			$	698,942					$	693,807
Canada			141,380						146,620
Other International(1)			69,553						93,435
Total			$	909,875					$	933,862

(1)    No individual other international country's tangible long-lived assets are material.

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

						Year Ended December 31, 2021
(In thousands)						EES						CSS						UBS						Corporate						Total
Net income attributable to common stockholders						$	543,633					$	394,031					$	412,698					$	(942,388)					$	407,974
Net income attributable to noncontrolling interests						298						—						—						722						1,020
Preferred stock dividends						—						—						—						57,408						57,408
Provision for income taxes						—						—						—						115,510						115,510
Interest expense, net						—						—						—						268,073						268,073
Depreciation and amortization						55,998						82,870						22,447						37,239						198,554
Other (income) expense, net(1)						(1,872)						1,312						42						(47,594)						(48,112)
Stock-based compensation expense(2)						6,404						2,607						2,107						14,581						25,699
Merger-related and integration costs						—						—						—						158,484						158,484
Net gain on Canadian divestitures						—						—						(8,927)						—						(8,927)
Adjusted EBITDA						$	604,461					$	480,820					$	428,367					$	(337,965)					$	1,175,683
Adjusted EBITDA margin %						7.9		%				8.4		%				8.8		%										6.5		%
(1) Corporate other non-operating income in the calculation of adjusted EBITDA for the year ended December 31, 2021 includes a $36.6 million curtailment gain resulting from the remeasurement of the Company's pension obligations in the U.S. and Canada due to amending certain terms of such defined benefit plans.
(2) Stock-based compensation expense in the calculation of adjusted EBITDA for the year ended December 31, 2021 excludes $5.1 million as such amount is included in merger-related and integration costs.
						Year Ended December 31, 2020
(In thousands)						EES						CSS						UBS						Corporate						Total
Net income attributable to common stockholders						$	262,829					$	217,211					$	231,678					$	(641,297)					$	70,421
Net loss attributable to noncontrolling interests						(842)						—						—						321						(521)
Preferred stock dividends						—						—						—						30,139						30,139
Provision for income taxes						—						—						—						22,803						22,803
Interest expense, net						—						—						—						226,591						226,591
Depreciation and amortization						35,811						37,765						22,380						25,644						121,600
Other (income) expense, net						(1,780)						(48)						24						(591)						(2,395)
Stock-based compensation expense(3)(4)						4,080						1,403						1,336						9,895						16,714
Merger-related and integration costs						—						—						—						132,236						132,236
Merger-related fair value adjustments						15,411						22,000						6,282						—						43,693
Out-of-period adjustment(3)						12,634						2,325						3,893						—						18,852
Gain on sale of asset						(19,816)						—						—						—						(19,816)
Adjusted EBITDA						$	308,327					$	280,656					$	265,593					$	(194,259)					$	660,317
Adjusted EBITDA margin %						5.6		%				8.4		%				7.5		%										5.4		%
(3) Stock-based compensation and the out-of-period adjustment by reportable segment for the year ended December 31, 2020, as previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, have been reallocated to conform to the current period's presentation.
(4) Stock-based compensation expense in the calculation of adjusted EBITDA for the year ended December 31, 2020 excludes $2.6 million as such amount is included in merger-related and integration costs.

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						Year Ended December 31, 2019
(In thousands)						EES						CSS						UBS						Corporate						Total
Net income attributable to common stockholders						$	264,570					$	43,835					$	184,931					$	(269,910)					$	223,426
Net loss attributable to noncontrolling interests						(1,228)						—						—						—						(1,228)
Provision for income taxes						—						—						—						59,863						59,863
Interest expense, net						—						—						—						65,710						65,710
Depreciation and amortization						28,569						7,155						13,583						12,800						62,107
Other income, net						(1,554)						—						—						—						(1,554)
Stock-based compensation expense						1,116						77						231						17,638						19,062
Merger-related costs						—						—						—						3,130						3,130
Adjusted EBITDA						$	291,473					$	51,067					$	198,745					$	(110,769)					$	430,516
Adjusted EBITDA margin %						6.0		%				5.6		%				7.7		%										5.2		%

Note: Adjusted EBITDA and Adjusted EBITDA margin % are non-GAAP financial measures that provide indicators of the Company's performance and its ability to meet debt service requirements. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization before foreign exchange and other non-operating expenses (income), non-cash stock-based compensation, costs and fair value adjustments associated with the merger with Anixter, an out-of-period adjustment related to inventory cost absorption accounting, and net gains on the divestiture of Wesco's legacy utility and data communications businesses in Canada and sale of an operating branch in the U.S. Adjusted EBITDA margin % is calculated by dividing Adjusted EBITDA by net sales.

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Schedule II—Valuation and Qualifying Accounts

			Balance at beginning						Charged to						Charged to other												Balance at
			of period						earnings						accounts(1)						Deductions(2)						end of period
Allowance for expected credit losses			(In thousands)
Year Ended December 31, 2021			$	23,909					$	12,944					$	13,669					$	(8,800)					$	41,722
Year Ended December 31, 2020			25,443						11,701						5,160						(18,395)						23,909
Year Ended December 31, 2019			24,468						7,006						52						(6,083)						25,443

(1)For the years ended December 31, 2021 and 2020, the amount charged to other accounts primarily relates to the acquisition of Anixter.

(2)Includes a reduction in the allowance for expected credit losses due to the write-off of trade accounts receivable.

			Balance at beginning						Charged to						Charged to other												Balance at
			of period						earnings						accounts(1)						Deductions(2)						end of period
Allowance for deferred tax assets			(In thousands)
Year Ended December 31, 2021			$	60,629					$	1,115					$	1,791					$	(17,266)					$	46,269
Year Ended December 31, 2020			5,854						1,900						52,875						—						60,629
Year Ended December 31, 2019			4,072						1,745						37						—						5,854

(1)For the year ended December 31, 2020, the amount charged to other accounts includes $59.3 million that was recorded in connection with the acquisition of Anixter.

(2)For the year ended December 31, 2021, deductions primarily include a decrease in the valuation allowance recorded against deferred tax assets related to foreign tax credit carryforwards.

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