SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
- OF 1934 [NO FEE REQUIRED] for the fiscal year ended December 29, 1999 or
_ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED] for the transition period from to
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COMMISSION FILE NUMBER 1-14989
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
WESCO DISTRIBUTION, INC. RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive offices:
WESCO INTERNATIONAL, Inc.
Commerce Court, Suite 700
Four Station Square
Pittsburgh, Pennsylvania 15219
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Investment and Administrative Committees of
WESCO Distribution, Inc. Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the WESCO Distribution, Inc. Retirement Savings Plan (the Plan) as of
December 29, 1999 and December 31, 1998, and the related statement of changes in
net assets available for benefits for the period January 1, 1999 to December 29,
1999. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
Except as explained in the following paragraph, we conducted our audits in
accordance with auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, investment assets held by American Express Trust Company,
the trustee of the Plan, and transactions in those assets were excluded from the
scope of our audit of the Plan's 1998 financial statements, except for comparing
the information provided by the trustee, which is summarized in Note 6, with the
related information included in the financial statements.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the Plan's financial statements as
of December 31, 1998. The form and content of the information included in the
1998 financial statements, other than that derived from the information
certified by the trustee, have been audited by us and, in our opinion, are
presented in compliance with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974.
In our opinion, the financial statements, referred to above, of the WESCO
Distribution, Inc. Retirement Savings Plan as of December 29, 1999, and for the
period January 1, 1999 to December 29, 1999 present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 29,
1999, and the changes in net assets available for benefits for the period
January 1, 1999 to December 29, 1999 in conformity with accounting principles
generally accepted in the United States.
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<PAGE>
Our audit of the Plan's financial statements as of December 29, 1999 and for the
period January 1, 1999 to December 29, 1999, was made for the purpose of forming
an opinion on the financial statements taken as a whole. The supplemental
schedule of assets held for investment purposes is presented for the purpose of
additional analysis and are not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements for the period January 1, 1999 to December 29, 1999, and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
May 1, 2000
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<PAGE>
<TABLE>
WESCO DISTRIBUTION, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 29, 1999 AND DECEMBER 31, 1998
<CAPTION>
December 29, December 31,
1999 1998
<S> <C> <C>
Investments, at fair value (Note 7) $ 237,921,321 $ 183,407,243
Receivables:
Employer discretionary profit
sharing contributions - 6,564,423
Employee contributions 949,085 903,376
Employer matching contributions 346,999 333,345
Accrued interest 49,343 36,704
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Net assets available for benefits $ 239,266,748 $ 191,245,091
============== ==============
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
<TABLE>
WESCO DISTRIBUTION, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
PERIOD JANUARY 1, 1999 TO DECEMBER 29, 1999
<CAPTION>
<S> <C>
Additions:
Employee contributions $ 13,200,817
Employee rollovers 6,200,130
Employer contributions 4,871,954
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24,272,901
Net appreciation from registered investment companies 23,113,636
Net appreciation from common/collective trust funds 10,129,679
Net appreciation from stock funds 5,715,361
Interest and dividend income 554,756
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Total additions 63,786,333
Deductions:
Distributions to withdrawing participants, at fair value 15,764,676
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Net increase 48,021,657
Net assets available for benefits, beginning of year 191,245,091
-------------
Net assets available for benefits, end of year $ 239,266,748
=============
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
WESCO DISTRIBUTION, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 29, 1999
1. MAJOR FEATURES OF THE PLAN
WESCO Distribution, Inc. Retirement Savings Plan (the Plan) was
established as of February 28, 1994 (date of inception). At the date of
inception, certain employees of the predecessor company became employees
of WESCO Distribution, Inc. (the Company) and participants in the Plan. At
the date of inception, all funds held by the prior plans related to the
transferred employees were transferred to the Plan.
The Plan covers the current employees of the Company and those former
employees with a fund balance of at least $5,000 who elected to maintain
their funds in the Plan. Former employees cannot make contributions to the
Plan.
The Plan is subject to the Employee Retirement Income Security Act of 1974
(ERISA). Under the Plan, participants may elect to make contributions on a
tax deferred basis in the form of a payroll deduction (Tax Deferred
Contributions) ranging from 1% up to the lesser of 15% of their
compensation or $10,000. In addition, employees may elect to make
contributions on an after-tax basis in the form of a payroll deduction
(After-Tax Contributions) ranging from 1% up to the lesser of 15% of their
compensation or $10,000. The $10,000 may be adjusted in future years by
the Internal Revenue Service. The sum of the Tax Deferred Contributions
and the After-Tax Contributions cannot exceed 15% of the participant's
compensation. Subject to limitation, the Company will make contributions
(Regular Company Contributions) in an amount equal to 50% of a
participant's total monthly contributions up to a maximum of 6%. In
addition, the Company may, at the Board of Directors' discretion, make a
profit sharing contribution (Company Profit Sharing Contribution) to the
Plan provided certain predetermined profit levels are attained. The
Company did not elect to make a Profit Sharing Contribution for the period
January 1, 1999 to December 29, 1999. The Company's Profit Sharing
Contribution was approximately $6,564,000 for the year ended December 31,
1998.
Participants are fully vested in the value of their contributions and
related investment income at all times and are fully vested in their
allocated share of employer contributions after five years of combined
service with the Company and the predecessor. In conjunction with a
leveraged recapitalization of the Company all active employees as of June
5, 1998 became fully vested.
Employer contributions forfeited by participants not vested at their
termination date are used to reinstate previously forfeited account
balances of former participants who have returned to employment with the
Company, or to reduce employer contributions in accordance with the plan
document. Total forfeitures that reduced employer contributions in 1999
were approximately $86,000.
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<PAGE>
WESCO DISTRIBUTION, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 29, 1999
Ten funds were available for investment of contributions to the Plan. A
brief description of the investment options is as follows:
Fund Description
American Express Trust Income Fixed income fund that invests in
Fund II insurance and bank investment contracts,
investments to preserve principal and
income
American Express Trust Equity Diversified corporate stock fund that
Index Fund II seeks to achieve a return as close as
possible to the Standard and Poor's 500
Stock Index
AXP Selective Fund Investment grade bond fund that seeks
current income and prservation of
capital
American Balanced Fund Broadly diversified fund that invests in
securities and bonds for the
preservation of capital, current income
and long-term growth of capital and
income
AXP New Dimension Fund Common stock fund that seeks companies
showing potential for significant growth
for long-term growth of capital
AXP Stock Fund Common stock and securities convertible
to common stock fund that seeks current
income and growth of capital
PIMCO Opportunity Fund Common stock fund that seeks companies
with small equity capitalization to
achieve capital appreciation
Templeton Foreign Fund Aggressive long-term capital growth fund
that invests in common stocks of
companies outside the U.S.
American Century Value Fund Long-term capital growth fund that
invests in securities that its
management believes are undervalued at
the time
WESCO International Stock Fund Fund which invests in the stock of WESCO
International, Inc.
In addition, participant account balances transferred from the prior plans
may remain invested in the CBS Corporation Pooled Stock Fund, although no
future contributions may be invested in the CBS Corporation Pooled Stock
Fund. Investment income earned by the CBS Corporation Pooled Stock Fund is
invested in the American Express Trust Income Fund II in accordance with
the plan document. As a result of the initial public offering of WESCO
International, Inc. participants were also given the option to invest in
the WESCO International Stock Fund effective July 1, 1999.
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<PAGE>
WESCO DISTRIBUTION, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 29, 1999
An account is maintained for each participant, which is credited with the
participant's contributions and an allocation of Company contributions and
Plan earnings. Allocations are based on participant contributions or
account balances, as defined by the Plan. The benefit to which a
participant is entitled is the benefit that can be provided from that
participant's account.
The Investment Committee and the Administrative Committee of the Company's
Board of Directors administer the Plan. Reference should be made to the
Prospectus, "What Does Your Future Hold?", for additional information on
the Plan.
In 1999, the Company changed the year-end of the Plan to December 29 to
provide a contribution for participants in the event of certain unusual or
significant circumstances.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan have been prepared in conformity with
generally accepted accounting principles. The following are the
significant accounting policies followed by the Plan:
INVESTMENT VALUATION
Investments are carried at fair value in the accompanying financial
statements. Investments in registered investment companies and
common/collective trust funds are valued by the trustee based on market
values of all assets in the funds' securities portfolio and the number of
units in the funds owned by the Plan. Investments in insurance contracts
included in the American Express Trust Income Fund II are stated at
contract value. Contract value represents contributions made under the
contract, plus earnings, less withdrawals and administrative expenses. The
fund purchases contracts which provide that withdrawals from the contract
to make employee benefit payments will be made at contract value, with no
loss of principal. However, since a portion of the fund is invested in
long-term contracts which, by their nature, cannot be liquidated without
loss of principal, the fund reserves the right to take up to one year to
honor a request for withdrawal. Investments in the CBS Corporation Pooled
Stock Fund and WESCO International Stock Fund are valued at quoted market
prices. Participant loans are valued at cost which approximates fair
value.
NET APPRECIATION (DEPRECIATION) IN VALUE OF INVESTMENTS
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains (losses) and the
unrealized appreciation (depreciation) in common/collective trusts,
registered investment companies, CBS and WESCO International stock.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make significant
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of additions and
deductions during the reporting period. Actual results could differ from
those estimates.
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<PAGE>
WESCO DISTRIBUTION, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 29, 1999
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities and other investment securities.
Investment securities are exposed to various risks, such as interest rate,
market and credit. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in
the value of investment securities, it is at least reasonably possible
that changes in the near-term could materially affect participants'
account balances and the amounts reported in the statements of net assets
available for benefits and the statement of changes in net assets
available for benefits.
OTHER
Administrative expenses, including trustee, legal, auditing and other
fees, are paid by the Company and, therefore, are not expenses of the
Plan.
Benefits are recorded when paid.
Dividend income is recorded on the ex-dividend date.
3. TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under
Section 401(a) of the Internal Revenue Code and, therefore, is exempt from
federal income taxes under provisions of Section 501(a).
4. EMPLOYEE LOANS
Participants are permitted to borrow against a portion of their vested
account balance within the prescribed limitations and pursuant to
nondiscriminatory rules established by the Administrative Committee. Each
loan is to be repaid over a period not to exceed five years.
The interest rate applied to employee loans is established each month by
the Administrative Committee at one percent above the PNC Bank prime
interest rate. The interest rate on new loans ranged between 8.75% and
9.5% for the period January 1, 1999 to December 29, 1999. Principal and
interest payments are generally made through monthly payroll deductions
and are credited to the participant's individual account. Loans of
approximately $4,410,000 were made from the Plan for the period January 1,
1999 to December 29, 1999. Loan repayments of approximately $3,142,000,
including interest of approximately $554,000, were received by the Plan
for the period January 1, 1999 to December 29, 1999.
5. PLAN TERMINATION
Although the Company has not expressed any intent to do so, it has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event the
Plan terminates, participants will become 100% vested in their accounts.
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<PAGE>
WESCO DISTRIBUTION, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 29, 1999
6. INFORMATION CERTIFIED BY TRUSTEE
The plan administrator has received certification from the trustee,
American Express Trust Company, as to the completeness and accuracy of
information relating to investments as of December 31, 1998.
7. INVESTMENTS
Investment values as of December 29, 1999 and December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
American Express Trust Income
Fund II $ 56,488,183 * $ 45,617,637 *
American Express Trust Equity Index
Fund II 42,324,204 * 32,076,446 *
AXP Selective Fund 4,604,437 5,371,178
American Balanced Fund 17,422,291 * 15,746,212 *
AXP New Dimension Fund 67,904,001 * 48,600,602 *
AXP Stock Fund - 6,311,799
PIMCO Opportunity Fund 14,525,897 * 9,032,322
Templeton Foreign Fund 5,527,355 3,166,026
American Century Value Fund 4,017,674 2,825,671
CBS Corporation Pooled Stock Fund 14,219,929 * 9,059,273
WESCO Internaitonal Stock Fund 3,923,233 -
Particiant Loans 6,964,117 5,600,077
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$237,921,321 $183,407,243
============ ============
*These investments exceed five percent of the net assets available for
benefits
</TABLE>
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<TABLE>
WESCO DISTRIBUTION, INC.
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 29, 1999
<CAPTION>
Fair
Issuer Description Value
<S> <C> <C>
American Express Trust American Express Trust Income $ 56,488,183
Company Fund II
American Express Trust American Express Trust Equity 42,324,204
Company Index Fund II
American Express Trust AXP Selective Fund 4,604,437
Company
American Express Trust American Balanced Fund 17,422,291
Company
American Express Trust AXP New Dimension Fund 67,904,001
Company
American Express Trust PIMCO Opportunity Fund 14,525,897
Company
American Express Trust Templeton Foreign Fund 5,527,355
Company
American Express Trust American Century Value Fund 4,017,674
Company
CBS Corporation (formerly CBS Corporaiton Pooled Stock Fund 14,219,929
Westinghouse Electric
Corporation)
WESCO International, Inc. WESCO International Stock Fund 3,923,233
Participant Loans, 7% - 10%, due
at various dates 6,964,117
------------
$237,921,321
============
</TABLE>
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<PAGE>
EXHIBITS
The following exhibits are filed or incorporated as part of this report:
Exhibit
Number Description
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23.1 Consent of PricewaterhouseCoopers LLP (Filed herewith)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee for the WESCO Distribution, Inc. Retirement
Savings Plan has duly caused this annual report to be signed on its behalf
by the undersigned thereunto duly authorized.
WESCO DISTRIBUTION, INC.
RESTIREMENT SAVINGS PLAN
Date: June 26, 2000 By: /s/ Steven A. Burleson
----------------------- -----------------------
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EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-91187) of WESCO International, Inc. of our report
dated May 1, 2000, relating to the financial statements of the WESCO
Distribution, Inc. Retirement Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
June 26, 2000
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