LEASES (Notes)

12 Months Ended

Dec. 31, 2019

Leases of Lessee Disclosure [Text Block]

9. LEASES

WESCO leases real estate, automobiles, trucks and other equipment. 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.

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 nonlease 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. 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. The Company uses the interest rate implicit in its leases to discount lease payments at the lease commencement date. When the implicit rate is not readily available, the Company uses its incremental borrowing rate.

The Company's finance leases, which are recorded in the Condensed Consolidated Balance Sheet as of December 31, 2019 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 period presented:



	As of
(In thousands)	December 31, 2019
Operating lease assets	$	235,834

Current operating lease liabilities	62,046
Noncurrent operating lease liabilities	179,830
Total operating lease liabilities	$	241,876

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 period ending:



(In thousands)	December 31, 2019
Operating lease cost	$	73,613
Short-term lease cost	90
Variable lease cost	23,385
Total lease cost	$	97,088

Variable lease cost consists of the non-lease components described above, 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 period ending:



(In thousands)	December 31, 2019
Operating cash flows from operating leases	$	75,775
Right-of-use assets obtained in exchange for new operating lease liabilities	60,586

As of December 31, 2019, the weighted-average remaining lease term for operating leases was 5.3 years and the weighted-average discount rate used to measure operating lease assets and liabilities was 4.6%.

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 Condensed Consolidated Balance Sheet as of December 31, 2019:



	(In thousands)
2020	$	72,946
2021	62,549
2022	48,490
2023	38,209
2024	22,426
Thereafter	32,559
Total undiscounted operating lease payments	277,179
Less: interest	(35,303		)
Total operating lease liabilities	$	241,876

The following table sets forth the future minimum rental payments for operating leases accounted for in accordance with Accounting Standards Codification Topic 840, Leases, as of December 31, 2018:



Years ending December 31	(In thousands)
2019	$	71,640
2020	59,594
2021	47,264
2022	34,490
2023	24,493
Thereafter	40,302