SEC Company Response from WESCO INTERNATIONAL INC (WCC) (CIK 0000929008) (WCC) — Dec 28, 2011
WESCO INTERNATIONAL INC (WCC) (CIK 0000929008)
Date: Dec. 28, 2011 · CIK: 0000929008 · Accession: 0001445305-11-003627
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-14989
Referenced dates: December 27, 2007, December 6, 2011
Letter
Division of Corporate Finance United States Securities and Exchange Commission Filed February 24, 2011 Form 8-K Dated October 20, 2011 Filed on October 20, 2011 File No. 001-14989
Dear Mr. Vaughn,
This letter sets forth the responses of WESCO International, Inc. (“WESCO” or the “Company”) to the comments of the Staff of the Securities and Exchange Commission communicated by letter dated December 6, 2011, with respect to WESCO's Form 10-K for the Fiscal Year Ended December 31, 2010 and Form 8-K dated October 20, 2011. We acknowledge that we are responsible for the adequacy and accuracy of the disclosure in the filings. We understand that staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing. In addition, we understand that we may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
-Excess and Obsolete Inventory, page 19
Comment No. 1:
Please revise future filings to provide additional information regarding this critical accounting estimate. In this regard, explain in greater detail how you arrive at assumptions about “future demand and market conditions.” Discuss how accurate your assumptions have been in the past, how much the assumptions have changed in the past and whether the assumptions are reasonably likely to change in the future.
Response:
We write down our inventory through the application of a factor or assumption derived from historical analysis of actual losses. Looking back, we identify items that were at risk of becoming obsolete, defined as being in excess of
WESCO Distribution, Inc. / Suite 700 / 225 W. Station Square Drive / Pittsburgh, PA 15219-1122
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
36 months supply relative to demand or movement. We then analyze in a detailed manner the ultimate disposition of the previously identified excess inventory items, such as sold, returned to supplier, or scrapped. This item by item analysis allows us to develop a factor or assumption which represents the historical likelihood that an item identified as being in excess supply ultimately becomes obsolete and of no value.
On a current basis, we apply the factor to inventory items currently in excess of 36 months supply, and reduce our inventory carrying value by the derived amount. In future filings we will expand our disclosure to more fully explain this critical accounting policy.
We revisit and test our assumptions on a periodic basis. Historically, we have not had material changes to our assumptions and do not anticipate any material changes in the future.
With regard to “future demand and market conditions”, absent specific information to the contrary, we assume future demand will be similar to historical demand. We will modify our disclosure of this critical accounting policy in future filings to de-emphasize the stated reliance on “future demand and market conditions”.
Results of Operations, page 21
Comment No 2:
We note you attribute changes in net sales to a variety of factors, including higher product prices, favorable foreign currency exchange rates and acquisitions. Please revise future filings to separately quantify the material items impacting your results of operations.
Response:
In future filings, we will include material items impacting results of operations that can be derived through objective quantification. An example of an objective quantifiable item is the impact acquisitions had on net sales.
-Liquidity and Capital Resources, page 22
Comment No 3:
We note your disclosures on page 47 that you consider $177 million of undistributed earnings of your subsidiaries outside the United States to be permanently reinvested. To the extent such amounts could be considered material to an understanding of your liquidity and capital resources, please revise your future filings to disclose the amounts of the cash and investment amounts held by your foreign subsidiaries that would not be available for use in the United States. Please further provide a discussion of any known trends, demands or uncertainties as a result of this policy that are reasonably likely to have a material effect on the business as a whole or that may be relevant to your financial flexibility. Refer to Item 303(a)(1) of Regulation S-K, SEC Release 33-8350, and Financial Reporting Codification Section 501.03.a.
Response:
We acknowledge the Staff's comments, and in response in future filings we will enhance our disclosure in the discussion of Liquidity and Capital Resources. Specifically, when we discuss invested cash as a component of our liquidity, amounts held by our foreign subsidiaries which are material and would not be available for use in funding U.S. operations will be disclosed.
-Revenue Recognition, page 35
Comment No 4:
WESCO Distribution, Inc. / Suite 700 / 225 W. Station Square Drive / Pittsburgh, PA 15219-1122
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
We note your disclosure that you provide services such as inventory management for some of your customers and that revenues for such services are recognized upon evidence of fulfillment of the agreed upon services. With a view toward enhanced disclosure in future filings, please tell us more about these arrangements and your accounting for the arrangements. Explain in greater detail the nature of the services you provide and how you recognize revenue for each portion of those arrangements. In this regard, clarify if the arrangements with these customers include the sale of inventory and the other services. If so, clarify how you account for the sale of inventory to these customers.
Response:
The inventory management services referenced in our discussion of Revenue Recognition as a critical accounting policy represent those limited situations where WESCO may perform some or all of the following activities for customers: determine inventory stocking levels; establish inventory reorder points; launch purchase orders; receive material; put away material; and pick material for order fulfillment. Service arrangements where we manage a process for the customer are governed by an agreement between WESCO and the customer. We recognize revenue on a monthly basis for service rendered during the period based upon a previously negotiated fee arrangement. We also sell inventory to these customers and recognize revenue at the time title and risk of loss transfers to the customer.
Comment No 5:
Further to the above, please quantify the amount of revenue attributed to these services in each of the last three years and for the nine months ended September 30, 2011. Tell us how you have considered the guidance in Rule 5-03.1 of Regulation S-X.
Response:
The amount of revenue attributed to these services for the twelve months ended December 31, 2010, 2009 and 2008 was approximately $10.9 million, $9.9 million, and $10.8 million, respectively. The amount of service revenue for the nine months ended September 30, 2011 was approximately $8.8 million. Consistent with Rule 5-03 of Regulation S-X, as revenue attributed to these services has never exceeded 10% of our total revenue, we do not state it separately on the face of the income statement.
-Supplier Volume Rebates, page 35
Comment No 6:
We note your disclosures here that you receive volume rebates from certain suppliers. You state that you recognize a receivable for the estimated amounts due to you with a corresponding reduction of cost of goods sold. Please explain to us in greater detail how your accounting complies with FASB ASC 605-50-25-10 through 605-50-25-12. In this regard, clarify for us how you account for rebates that are attributable to inventory that you have not yet sold and is therefore still reflected on your balance sheet.
Response:
As noted, we recognize a receivable and a corresponding reduction to Cost of Goods Sold when recording supplier volume rebates. We comply with FASB ASC 605-50-25-10 through 605-50-25-12 by ensuring that the recording of supplier volume rebates is supported by an amount of cash consideration that is probable and reasonably estimable per a binding vendor agreement. Supplier volume rebates attributable to unsold inventory still reflected on the balance sheet are recorded as a reduction to inventory and therefore not recorded in the income statement. The relationship between supplier volume rebates earned to inventory purchases for the prior 12 months is applied to current inventory and used to determine the amount of supplier volume rebates recorded as a reduction to inventory.
WESCO Distribution, Inc. / Suite 700 / 225 W. Station Square Drive / Pittsburgh, PA 15219-1122
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
Note 5. Acquisitions, page 40
Comment No 7:
In connection with any material acquisitions, please revise your future filings to include the disclosures required by 805-10-50-2(h) of the FASB Accounting Standards Codification.
Response:
In the event that we have material acquisitions in the future, we will ensure that future filings include the disclosures required by FASB Accounting Standards Codification 805-10-50-2(h). Additionally, in connection with the acquisition of TVC Communications, L.L.C. on December 16, 2010, we will include the following disclosures required by FASB Accounting Standards Codification 805-10-50-2(h) in our Form 10-K for the reporting period ended December 31, 2011:
1.
The amount of revenue and earnings since the acquisition date included in the consolidated income statement for the reporting period ended December 31, 2010
2.
The revenue and earnings of the combined entity for the period ended December 31, 2010 as though the acquisition date for the business combination that occurred during 2010 had been as of January 1, 2010 (supplemental pro forma information)
3.
The revenue and earnings of the combined entity for the period ended December 31, 2009 as though the acquisition date for the business combination that occurred during 2010 had occurred as of January 1, 2009 (supplemental pro forma information).
Comment No 8:
Further to the above, please provide us with your calculations of the significance of this acquisition under Rule 3-05 of Regulation S-X.
Response:
We determined that the acquisition of TVC Communications, which was completed on December 16, 2010, did not meet the significance criteria set forth under Rule 3-05 of Regulation S-X, and as a result, historical financial statements and pro-forma financial information were not required. We applied the criteria of Rule 3-05, which outlines when historical financial statements are required for a significant subsidiary, applying a sliding scale of thresholds commencing at 20%. Please see below for the supporting calculations for our significance tests.
1.
Does the registrant's investments in and advances to the acquired subsidiary exceed 20% of the registrant's total assets for the most recently completed fiscal year?
The Company's total assets were $2.49 billion as of December 31, 2009. The TVC Communications acquisition GAAP purchase price of $251 million did not exceed 20% of our total assets.
2.
Does the registrant's share of total assets of the acquired subsidiary exceed 20% of the registrant's total assets for the most recently completed fiscal year?
TVC Communication's total assets of $127.4 million as of December 31, 2009 did not exceed 20% of the Company's total assets of $2.49 billion.
3.
Does the acquired subsidiary's income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principal exceed 20% of such income for the registrant for the most recently completed fiscal year?
WESCO Distribution, Inc. / Suite 700 / 225 W. Station Square Drive / Pittsburgh, PA 15219-1122
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
The Company's income before taxes was $137.2 million for the year ended December 31, 2009. TVC Communication's income before taxes of $18.9 million for the year ended December 31, 2009 did not exceed 20% of our total pre-tax income.
Note 14. Commitments and Contingencies, page 51
Comment No 9:
We note your disclosures regarding the lawsuit filed against you in Indiana. Please review future filings to either disclose an estimate (or, if true, state that the estimate is immaterial in lieu of providing quantified amounts) of the possible loss or range of loss, or state that such an estimate cannot be made. Please refer to 450-20-50 of the FASB Accounting Standards Codification.
Response:
With respect to the Staff's comment, WESCO will continue to monitor developments regarding the referenced lawsuit and make disclosures consistent with the requirements of 450-20-50 of the FASB Accounting Standards Codification. So long as the loss contingency associated with the lawsuit continues to exist, and until such time as any possible loss or range of loss associated with the lawsuit can be estimated, we will revise future filings to include a statement that an estimate of the possible loss or range of loss cannot be made. At the time of our filing, an estimate could not be made because proceedings were at an early stage and discovery was ongoing. As the case progresses we will consider any developments towards our efforts to estimate the possible loss or range of loss.
Note 15. Segments and Related Information, page 51
Comment No 10:
We note that you operate in 12 segments but aggregate the information into one reportable segment. Please provide us with your detailed analysis supporting your conclusion that aggregation of the 12 operating segments into one reportable segment was appropriate. In this regard, specifically address all of the criteria set forth in paragraph 280-10-50-11 of the FASB Accounting Standards Codification. Provide supporting information that addresses your consideration of the similarity of the criteria, including the similarity of economic characteristics.
Response:
WESCO responded previously to a similar comment contained in the letter from the Staff of the Securities and Exchange Commission dated December 27, 2007. Since providing that response, management has remained cognizant of the criteria set forth in paragraph 280-10-50-11 of the FASB Accounting Codification. We have updated our prior response to reflect any changes that have occurred in the facts and circumstances surrounding our operating segments.
At the time the Form 10-K for the Year Ended December 31, 2010 was prepared, WESCO determined that it had 12 operating segments. The 12 operating segments are defined principally by the operating leader and contain businesses and operations for which they have management responsibility. WESCO is comprised of legacy branches developed organically over time, and acquired operations. The branches are typically grouped together into districts and regions for management span of control purposes and these are further grouped into the business units that constitute our operating segments. There are no consistent criteria for defining the composition of an
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WCC SEC Comment Letter 2011
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
SUBMITTTED VIA EDGAR
SENT VIA FIRST-CLASS MAIL
December 28, 2011
Kevin L. Vaughn, Branch Chief
Division of Corporate Finance
United States Securities and Exchange Commission
One Station Place
100 F Street, N.E.
Washington, DC 20549-6010
RE: WESCO International, Inc.
Form 10-K for the Year Ended December 31, 2010
Filed February 24, 2011
Form 8-K Dated October 20, 2011
Filed on October 20, 2011
File No. 001-14989
Dear Mr. Vaughn,
This letter sets forth the responses of WESCO International, Inc. (“WESCO” or the “Company”) to the comments of the Staff of the Securities and Exchange Commission communicated by letter dated December 6, 2011, with respect to WESCO's Form 10-K for the Fiscal Year Ended December 31, 2010 and Form 8-K dated October 20, 2011. We acknowledge that we are responsible for the adequacy and accuracy of the disclosure in the filings. We understand that staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing. In addition, we understand that we may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
-Excess and Obsolete Inventory, page 19
Comment No. 1:
Please revise future filings to provide additional information regarding this critical accounting estimate. In this regard, explain in greater detail how you arrive at assumptions about “future demand and market conditions.” Discuss how accurate your assumptions have been in the past, how much the assumptions have changed in the past and whether the assumptions are reasonably likely to change in the future.
Response:
We write down our inventory through the application of a factor or assumption derived from historical analysis of actual losses. Looking back, we identify items that were at risk of becoming obsolete, defined as being in excess of
WESCO Distribution, Inc. / Suite 700 / 225 W. Station Square Drive / Pittsburgh, PA 15219-1122
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
36 months supply relative to demand or movement. We then analyze in a detailed manner the ultimate disposition of the previously identified excess inventory items, such as sold, returned to supplier, or scrapped. This item by item analysis allows us to develop a factor or assumption which represents the historical likelihood that an item identified as being in excess supply ultimately becomes obsolete and of no value.
On a current basis, we apply the factor to inventory items currently in excess of 36 months supply, and reduce our inventory carrying value by the derived amount. In future filings we will expand our disclosure to more fully explain this critical accounting policy.
We revisit and test our assumptions on a periodic basis. Historically, we have not had material changes to our assumptions and do not anticipate any material changes in the future.
With regard to “future demand and market conditions”, absent specific information to the contrary, we assume future demand will be similar to historical demand. We will modify our disclosure of this critical accounting policy in future filings to de-emphasize the stated reliance on “future demand and market conditions”.
Results of Operations, page 21
Comment No 2:
We note you attribute changes in net sales to a variety of factors, including higher product prices, favorable foreign currency exchange rates and acquisitions. Please revise future filings to separately quantify the material items impacting your results of operations.
Response:
In future filings, we will include material items impacting results of operations that can be derived through objective quantification. An example of an objective quantifiable item is the impact acquisitions had on net sales.
-Liquidity and Capital Resources, page 22
Comment No 3:
We note your disclosures on page 47 that you consider $177 million of undistributed earnings of your subsidiaries outside the United States to be permanently reinvested. To the extent such amounts could be considered material to an understanding of your liquidity and capital resources, please revise your future filings to disclose the amounts of the cash and investment amounts held by your foreign subsidiaries that would not be available for use in the United States. Please further provide a discussion of any known trends, demands or uncertainties as a result of this policy that are reasonably likely to have a material effect on the business as a whole or that may be relevant to your financial flexibility. Refer to Item 303(a)(1) of Regulation S-K, SEC Release 33-8350, and Financial Reporting Codification Section 501.03.a.
Response:
We acknowledge the Staff's comments, and in response in future filings we will enhance our disclosure in the discussion of Liquidity and Capital Resources. Specifically, when we discuss invested cash as a component of our liquidity, amounts held by our foreign subsidiaries which are material and would not be available for use in funding U.S. operations will be disclosed.
-Revenue Recognition, page 35
Comment No 4:
WESCO Distribution, Inc. / Suite 700 / 225 W. Station Square Drive / Pittsburgh, PA 15219-1122
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
We note your disclosure that you provide services such as inventory management for some of your customers and that revenues for such services are recognized upon evidence of fulfillment of the agreed upon services. With a view toward enhanced disclosure in future filings, please tell us more about these arrangements and your accounting for the arrangements. Explain in greater detail the nature of the services you provide and how you recognize revenue for each portion of those arrangements. In this regard, clarify if the arrangements with these customers include the sale of inventory and the other services. If so, clarify how you account for the sale of inventory to these customers.
Response:
The inventory management services referenced in our discussion of Revenue Recognition as a critical accounting policy represent those limited situations where WESCO may perform some or all of the following activities for customers: determine inventory stocking levels; establish inventory reorder points; launch purchase orders; receive material; put away material; and pick material for order fulfillment. Service arrangements where we manage a process for the customer are governed by an agreement between WESCO and the customer. We recognize revenue on a monthly basis for service rendered during the period based upon a previously negotiated fee arrangement. We also sell inventory to these customers and recognize revenue at the time title and risk of loss transfers to the customer.
Comment No 5:
Further to the above, please quantify the amount of revenue attributed to these services in each of the last three years and for the nine months ended September 30, 2011. Tell us how you have considered the guidance in Rule 5-03.1 of Regulation S-X.
Response:
The amount of revenue attributed to these services for the twelve months ended December 31, 2010, 2009 and 2008 was approximately $10.9 million, $9.9 million, and $10.8 million, respectively. The amount of service revenue for the nine months ended September 30, 2011 was approximately $8.8 million. Consistent with Rule 5-03 of Regulation S-X, as revenue attributed to these services has never exceeded 10% of our total revenue, we do not state it separately on the face of the income statement.
-Supplier Volume Rebates, page 35
Comment No 6:
We note your disclosures here that you receive volume rebates from certain suppliers. You state that you recognize a receivable for the estimated amounts due to you with a corresponding reduction of cost of goods sold. Please explain to us in greater detail how your accounting complies with FASB ASC 605-50-25-10 through 605-50-25-12. In this regard, clarify for us how you account for rebates that are attributable to inventory that you have not yet sold and is therefore still reflected on your balance sheet.
Response:
As noted, we recognize a receivable and a corresponding reduction to Cost of Goods Sold when recording supplier volume rebates. We comply with FASB ASC 605-50-25-10 through 605-50-25-12 by ensuring that the recording of supplier volume rebates is supported by an amount of cash consideration that is probable and reasonably estimable per a binding vendor agreement. Supplier volume rebates attributable to unsold inventory still reflected on the balance sheet are recorded as a reduction to inventory and therefore not recorded in the income statement. The relationship between supplier volume rebates earned to inventory purchases for the prior 12 months is applied to current inventory and used to determine the amount of supplier volume rebates recorded as a reduction to inventory.
WESCO Distribution, Inc. / Suite 700 / 225 W. Station Square Drive / Pittsburgh, PA 15219-1122
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
Note 5. Acquisitions, page 40
Comment No 7:
In connection with any material acquisitions, please revise your future filings to include the disclosures required by 805-10-50-2(h) of the FASB Accounting Standards Codification.
Response:
In the event that we have material acquisitions in the future, we will ensure that future filings include the disclosures required by FASB Accounting Standards Codification 805-10-50-2(h). Additionally, in connection with the acquisition of TVC Communications, L.L.C. on December 16, 2010, we will include the following disclosures required by FASB Accounting Standards Codification 805-10-50-2(h) in our Form 10-K for the reporting period ended December 31, 2011:
1.
The amount of revenue and earnings since the acquisition date included in the consolidated income statement for the reporting period ended December 31, 2010
2.
The revenue and earnings of the combined entity for the period ended December 31, 2010 as though the acquisition date for the business combination that occurred during 2010 had been as of January 1, 2010 (supplemental pro forma information)
3.
The revenue and earnings of the combined entity for the period ended December 31, 2009 as though the acquisition date for the business combination that occurred during 2010 had occurred as of January 1, 2009 (supplemental pro forma information).
Comment No 8:
Further to the above, please provide us with your calculations of the significance of this acquisition under Rule 3-05 of Regulation S-X.
Response:
We determined that the acquisition of TVC Communications, which was completed on December 16, 2010, did not meet the significance criteria set forth under Rule 3-05 of Regulation S-X, and as a result, historical financial statements and pro-forma financial information were not required. We applied the criteria of Rule 3-05, which outlines when historical financial statements are required for a significant subsidiary, applying a sliding scale of thresholds commencing at 20%. Please see below for the supporting calculations for our significance tests.
1.
Does the registrant's investments in and advances to the acquired subsidiary exceed 20% of the registrant's total assets for the most recently completed fiscal year?
The Company's total assets were $2.49 billion as of December 31, 2009. The TVC Communications acquisition GAAP purchase price of $251 million did not exceed 20% of our total assets.
2.
Does the registrant's share of total assets of the acquired subsidiary exceed 20% of the registrant's total assets for the most recently completed fiscal year?
TVC Communication's total assets of $127.4 million as of December 31, 2009 did not exceed 20% of the Company's total assets of $2.49 billion.
3.
Does the acquired subsidiary's income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principal exceed 20% of such income for the registrant for the most recently completed fiscal year?
WESCO Distribution, Inc. / Suite 700 / 225 W. Station Square Drive / Pittsburgh, PA 15219-1122
Richard P. Heyse
Vice President and Chief Financial Officer
Phone: 412.454.2392
E-mail: rheyse@wesco.com
The Company's income before taxes was $137.2 million for the year ended December 31, 2009. TVC Communication's income before taxes of $18.9 million for the year ended December 31, 2009 did not exceed 20% of our total pre-tax income.
Note 14. Commitments and Contingencies, page 51
Comment No 9:
We note your disclosures regarding the lawsuit filed against you in Indiana. Please review future filings to either disclose an estimate (or, if true, state that the estimate is immaterial in lieu of providing quantified amounts) of the possible loss or range of loss, or state that such an estimate cannot be made. Please refer to 450-20-50 of the FASB Accounting Standards Codification.
Response:
With respect to the Staff's comment, WESCO will continue to monitor developments regarding the referenced lawsuit and make disclosures consistent with the requirements of 450-20-50 of the FASB Accounting Standards Codification. So long as the loss contingency associated with the lawsuit continues to exist, and until such time as any possible loss or range of loss associated with the lawsuit can be estimated, we will revise future filings to include a statement that an estimate of the possible loss or range of loss cannot be made. At the time of our filing, an estimate could not be made because proceedings were at an early stage and discovery was ongoing. As the case progresses we will consider any developments towards our efforts to estimate the possible loss or range of loss.
Note 15. Segments and Related Information, page 51
Comment No 10:
We note that you operate in 12 segments but aggregate the information into one reportable segment. Please provide us with your detailed analysis supporting your conclusion that aggregation of the 12 operating segments into one reportable segment was appropriate. In this regard, specifically address all of the criteria set forth in paragraph 280-10-50-11 of the FASB Accounting Standards Codification. Provide supporting information that addresses your consideration of the similarity of the criteria, including the similarity of economic characteristics.
Response:
WESCO responded previously to a similar comment contained in the letter from the Staff of the Securities and Exchange Commission dated December 27, 2007. Since providing that response, management has remained cognizant of the criteria set forth in paragraph 280-10-50-11 of the FASB Accounting Codification. We have updated our prior response to reflect any changes that have occurred in the facts and circumstances surrounding our operating segments.
At the time the Form 10-K for the Year Ended December 31, 2010 was prepared, WESCO determined that it had 12 operating segments. The 12 operating segments are defined principally by the operating leader and contain businesses and operations for which they have management responsibility. WESCO is comprised of legacy branches developed organically over time, and acquired operations. The branches are typically grouped together into districts and regions for management span of control purposes and these are further grouped into the business units that constitute our operating segments. There are no consistent criteria for defining the composition of an