Company: WCC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000929008-25-000012
Chunk: 54

Company: WESCO INTERNATIONAL INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 1
Chunk 54
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 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.

13. INCOME TAXES

The effective tax rate for the three months ended March 31, 2025 and 2024 was 23.4% and 21.0%, respectively. For the three months ended March 31, 2025 and 2024, the effective tax rate reflects discrete income tax benefits of $4.7 million and $7.7 million, respectively, resulting from the exercise and vesting of stock-based awards. These discrete income tax benefits reduced the estimated annual effective tax rate in such periods by approximately 3.0 and 5.3 percentage points, respectively.During the three months ended March 31, 2025, the Company purchased transferable clean energy tax credits in the amount of $53.3 million. The Company used these tax credits to reduce its 2024 U.S. federal income tax liability. The Company has taken appropriate measures to mitigate the transferee liability associated with these tax credits, including but not limited to conducting due diligence to confirm the eligibility of the underlying projects or production, as applicable, for the tax credits and the eligibility of the tax credits for transfer, obtaining appropriate contractual protections from the sellers, and obtaining tax credit insurance.The effective tax rate, excluding discrete income tax benefits, differs from the federal statutory income tax rate due primarily to state income taxes, nondeductible expenses, and the tax impact of international operations. 

There have been no material adjustments to the Company's assessment of uncertain tax positions since December 31, 2024. 

14. BUSINESS SEGMENTSThe Company has operating segments comprising three strategic business units: EES, CSS and UBS. These operating segments are equivalent to the Company’s reportable segments. The President and Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (“CODM”). The CODM evaluates the performance of the Company’s reportable segments based on adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), which is the Company’s measure of segment profit or loss.The Company incurs corporate costs primarily related to treasury, tax, information technology, legal and other centralized functions. The Company also has various corporate assets. Segment assets may not include jointly used assets, but segment results include depreciation expense or other allocations related to those assets. Interest expense and other non-operating