REVENUE (Notes)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

3. REVENUE

Wesco distributes products and provides services to customers globally in various end markets within its business segments. The segments operate in the United States, Canada and various other countries.

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

	Three Months Ended				Six Months Ended
	June 30				June 30
(In millions)	2023		2022		2023		2022
Electrical & Electronic Solutions	$	2,200.3	$	2,330.1	$	4,335.4	$	4,420.1
Communications & Security Solutions	1,850.9		1,602.0		3,582.9		3,036.2
Utility & Broadband Solutions	1,694.3		1,551.4		3,349.1		2,959.4
Total by segment	$	5,745.5	$	5,483.5	$	11,267.4	$	10,415.7

	Three Months Ended				Six Months Ended
	June 30				June 30
(In millions)	2023		2022		2023		2022
United States	$	4,272.5	$	4,039.9	$	8,363.0	$	7,694.1
Canada	773.1		807.8		1,532.5		1,522.9
Other International(1)	699.9		635.8		1,371.9		1,198.7
Total by geography(2)	$	5,745.5	$	5,483.5	$	11,267.4	$	10,415.7

(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 June 30, 2023 and December 31, 2022, $104.8 million and $99.6 million, respectively, of deferred revenue was recorded as a component of other current liabilities in the Condensed Consolidated Balance Sheets. The Company recognized $21.0 million and $42.0 million of revenue during the three and six months ended June 30, 2023, respectively, that was included in the deferred revenue balance as of December 31, 2022. The amount of revenue recognized during the three and six months ended June 30, 2022 that was deferred as of December 31, 2021 was not material.

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 June 30, 2023 and December 31, 2022, the Company had contract assets of $40.7 million and $27.5 million, respectively, resulting from contracts where the amount of revenue recognized exceeded the amount billed to the customer. Contract assets are recorded in the Condensed 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 three months ended June 30, 2023 and 2022 by approximately $118.5 million and $108.5 million, respectively, and by approximately $215.0 million and $203.6 million for the six months ended June 30, 2023 and 2022, respectively. The variable consideration for the three months ended June 30, 2022 reflects an adjustment that increased the previously disclosed amount by $6.2 million and the variable consideration for the six months ended June 30, 2022 reflects an adjustment that reduced the previously disclosed amount by $13.9 million. As of June 30, 2023 and December 31, 2022, the Company's estimated product return obligation was $41.9 million and $46.5 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 $79.1 million and $76.5 million for the three months ended June 30, 2023 and 2022, respectively, and $156.0 million and $144.1 million for the six months ended June 30, 2023 and 2022, respectively.