Good morning and Welcome to WESCO International Inc. 2016 Outlook. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mary Ann Bell. Please go ahead.

Thank you, Anne. Good morning, ladies and gentlemen. Thank you for joining us. Participating in today's conference call are, John Engel, Chairman, President and CEO; and Ken Parks, Senior Vice President and Chief Financial Officer. This conference call includes forward-looking statements and therefore, actual results may differ materially from expectations. For additional information on WESCO International, please refer to the Company's SEC filings, including the risk factors described therein. The following presentation includes a discussion of certain non-GAAP financial measures. Information required by Regulation G of the Exchange Act with respect to such non-GAAP financial measures can be obtained via WESCO's Web site at wesco.com. Means to access this conference call via webcast was disclosed in the Press Release and was posted on our corporate Web site. Replay to this conference call will be archived and available for the next seven days. With that I would now like to turn the call over to John Engel.

Thank you, Mary Ann and good morning everyone. We are pleased that you joined us today for an update on our business and our outlook for next year. 2015 will be remembered across our industry as a year in which remarkably strong U.S. dollar and reduced global demand resulted in commodity deflation, sharply reduced production and capital spending and a debate as to whether we have entered an industrial recession. To modify the famous quote a bit, tough times don’t last but tough companies do. WESCO management moved swiftly to take action to help offset these industry headwinds. We cut costs reducing our workforce by over 400 personnel and consolidating or eliminating 13 branches. We sequentially stabilized our margins through executing our lien and productivity initiatives. And we continue to execute against our long-term growth strategies. Specifically first, we advanced our One WESCO platform improving our sales, planning and execution, while enhancing our customer value preposition to drive market share gains with the key accounts. Second, we invested in two strategic acquisitions during the year which strengthened our position in non-residential construction and lighting national accounts. And third, we maintained our strong free cash flow performance and repurchased 2.5 million shares of WESCO’s stock through the third quarter. As a result of these actions we are confident that WESCO will exit 2015 better positioned to grow faster than our underlying end-markets. We expect to return to our long history of consistent profitable growth, as these markets recover and we remain focused on what we can control. That is our strategy, our investments and our execution. As we have said many times, scale matters in distribution. And it is in especially critical differentiator in a consolidating industry. Customers are looking for well-capitalized partners with deep domain expertise and diverse offerings to manage their global supply chain needs. Our One WESCO value preposition provides customers with the product and service solutions they need to meet their MRO, OEM and capital project management requirements, all while delivering increased supply chain efficiency and effectiveness. Our next Annual Investor Day is planned for Wednesday March 2nd in New York, during which our management team will update you on our business model, our strategies, growth initiatives and long-term financial and value creation objectives. I would now like to turn the call over to Ken Parks to provide a more detailed update on our business and our outlook expectations for 2016. Ken?

Thanks, John and good morning everyone. At our third quarter earnings call we projected a full year sales decline in the range of 4% to 5%. This included a Q4 sales decrease of between 5% and 8% and quarter-to-date sales have been within this range. Our quarter-to-date book-to-bill ratio remains above 1.0 as well. As a result, we reaffirm our outlook for a full year sales decline of 4% to 5% from the prior year. With this performance we also reaffirm our 2015 EPS range of $4.15 to $4.30. We continue to expect strong free cash flow as well at approximately 100% of net income for the full year. Slide 5, as I'll discuss in the next several slides our 2016 outlook reflects a balanced view of current end-market expectations along with our initiatives to drive outperformance versus those end-markets. A key priority is expanding our market share. Our outlook includes one point of sales growth at the top-end of the range for market outperformance, primarily market share gains from our various One WESCO sales growth indicatives. We’ve also included in our outlook the carryover impact of the acquisitions completed in 2015. Combined, the carryover impact is expected to account for approximately 2 points of top-line growth. Though not built into our current outlook, additional acquisitions remain an important element of our growth strategy going forward. Our 2016 outlook reflects stable margins that are consistent with our 2015 outlook. As you know, we’ve been facing margin headwinds due to business mix, as well as the impact of softer sales on our supplier volume rebates. In 2016, we’ll continue to drive several margin improvement initiatives listed here, to help us offset these initiatives and we’ll outline these in more detail at our Investor Day in March. Finally, we plan to maintain…

[Operator Instructions] Our first question comes from David Manthey at Robert W. Baird.

First off, this year you have announced about $30 million in cost actions, back in ’09 that number was more like 140 million and as a percentage of SG&A I guess these restructuring efforts are about 3% versus 16% back then, so obviously you've been taking some actions but nothing as dramatic as we've seen in the recent past. Could you tell us what you’d have to see in order to materially adjust the cost structure assumptions for 2016?

When you go back six years ago, the economic downturn was pervasive it's unlike anything any of us who are in business have seen in our carrier. And quite frankly we didn’t know how far things would dropped and when and if where the bottom would settle out. And so I think what we are facing now is just is a mixed low growth environment with some areas that are experiencing some pockets of growth and other areas that are flattish and then there is some particular verticals that we’re seeing some pretty significant traction so our view is the markets are completely different now in terms of versus five to six years ago in that economic cycle. And so we’re managing the business given that view, our customers are using the opportunity to consolidate their supply chains quicker and so we've got our teams charged of -- even if their spending levels have dropped for those customers that are in industry that are contracting those verticals we want to take a larger share of that smaller spend and be positioned as things recover even garner more share. So, we have to see Dave the short answer to your question we’d have to see just much more pervasive and significant economic contraction for us to step up the level of our structural cost take out. With that said I think we’re taking advantage of this opportunity to fine-tune things and improve our efficiency and effectiveness and have made -- taken substantial actions relative to headcount, branch consolidations, as well as organizational streamlining in 2015.

And Ken in your monologue you mentioned restoring variable comp plans now we’d understand that just mean you are resetting target for 2016 and therefore you are more likely to payout incentive comp in ’16 than ’15 is that right?

Yes, absolutely. So as we set the plan and the outlook, we would -- we are not changing the plans but just restoring them back to their full target.

All right, so the actions that you've announced here in terms of your operational priorities for 2016 even though you didn’t outline any incremental savings beyond the $0.40 that you expect at this point, I guess we should take that as you are offsetting some of these increases in comp and maybe offsetting some of the additional weakness in the top-line, netting out to maybe no change in the benefit you will see from the cost reductions.

Right, that's exactly what that means.

The next question is from Deane Dray at RBC Capital Markets.

In the third quarter conference call you highlighted some increased bidding activity on the construction side and then again this morning you rattled off a number of verticals, healthcare, lighting, data, security, education, and infrastructure, I am not sure if I missed any. But are you interested in giving some more specifics about which of these verticals are standing out in terms of holding up better in terms of construction project plans? Are you haircutting any of those expectations that those get released in 2016 and just kind of within those your end-market assumptions?

I would say that as Ken mentioned in his opening comments, the backlog is relatively healthy so I think it’s holding up I would actually say surprisingly well given there is significant contraction in some of our end-market verticals. So, overall backlog is just kind of flattish. As Ken mentioned, the bid activity levels continue to be relatively robust as we move through the fourth quarter thus far. And we’re securing and logging some wins in healthcare, lighting, data com, security, education to spike out and some infrastructure to spike out some areas where we’re getting some wins. As we look at 2016 your question on kind of the framework and outlook, as we look at 2016 and we look at non-residential construction, we think that there has been some mixed data as of late, but there are going to be some pockets of growth in non-resi. Again the increasing strength and continuing recovery in residential construction ultimately leads to a broader non-resi recovery and to drive a very improving labor market and lending standards. And when you look at vacancy rates I think they’re supportive of office growth. So, areas that in particular that we see is being modestly positive for growth in the non-resi construction market in 2016 are healthcare, education and office to spike out three particular areas. But I guess I’d like to put it into context and what I’d say is we’re assuming by and large that the headwinds we’re facing right now persist into 2016. That’s true in construction and it’s true across each of our end-markets. So there is a little bit of some specifics in each one that may vary a bit. But fundamentally we’re assuming the headwinds we’re facing out persist, we are focused on improving our execution against this economic and end-market backdrop. And if our assumptions prove to be a bit overly conservative because we’ve laid out on the webcast deck what we see as kind of the range by end-market, we will obviously be working very aggressively to capture upside to that if our again if our assumptions prove to be overly conservative.

And just a follow-up on that point John I think that’s one of your seeing there is a bit of a relief here that the assumptions seem pretty grounded in conservatism on 2016. I think there is also a relief about the fourth quarter, just because you’ve heard from some companies recently and like three on this morning that lowered 4Q guidance on industrial weakness. So just maybe frame for us what you’re seeing in the fourth quarter, how have the months played out and so this is still within your expectations. But has anything surprised you with then, weakening both regionally but end-markets?

Yes I’ll make some comments and then maybe I’d ask Ken to elaborate if he’d like to add on top of that. I think we laid out a range for the fourth quarter in our third quarter earnings call and what informed that is how we performed throughout the third quarter where we -- I would just characterize is as in time reflection as we look at the second half of this year I think we’ve gotten a more balanced view of what’s happening in the markets and I think our forecast integrity has improved. And so, we laid out our fourth quarter forecast was informed by our momentum vector and our results in the third quarter and what we have done to start the fourth quarter. And it’s pretty much tracking as I’ve seen we are -- that’s why we reaffirmed our outlook this morning. Sales are towards the upper-end of that range, not being the greater decline number so in the down 5 to down 8 they’re closer to the 8 than the 5. But we continue to work our pricing sourcing initiatives, margins appear to be relatively stable we’ve had a series of months where they could have been relatively stable. The margin issue that we’ve seen as Ken is taking you through in the last couple of quarters have really been driven by two factors; our mix and supplier volume rebates, which is driven by our year-over-year volume declines on the purchasing side of our value chain. But our billing, our product margins have been relatively stable which says we’re actually making some nice progress with our pricing initiatives in the face of what is a much more challenging pricing environment and that has continued as we’ve kind of gone through the fourth quarter. And we continue to work the cost, discretionary cost as well as structural cost as we’ve outlined in the last two quarters. So all that taken into account and then obviously the strong free cash flow generation which has been a hallmark of our Company continues and we continue to -- we'll protect and defend that vigorously and have. So, that’s it hopefully that gives you a little color and context, I’d ask Ken to add to that.

I'll just add a couple of comments; one, November was a bit stronger than October. So, that's obviously a good, a more positive indicator and you asked about what may have surprised us, I'm not sure it “surprised us” it may have surprised a lot of people looking at the business more broadly, but we talked in the third quarter call about the expectation and risk of broad industrial shutdowns towards the end of this year and while we're seeing a couple of small pockets of it I mean relatively small in some of our businesses. Overall, we have not seen that and we're already now obviously at December 15th, so we should have visibility into it I think the expectation was that we may have been underestimating the magnitude of what that impact would be and the reality is that it hasn't happened in a broad sense yet.

Your next question is from Sam Darkatsh at Raymond James.

A couple of questions here, the -- you are in December and I guess this is only – it's really important because you're getting at least somewhat closer to book value. Have you done the impairment test yet Ken and I am -- we noticed that there is -- there may be $650 million of goodwill from EECOL and $100 million Conney had to be passed safely and what are your thoughts going forward on that?

We do that test as we get to the end of the year, the only thing I'd say at this point, is we're going through the same processes that we go through, we do not believe that the business performance causes any type of impairment but they're obviously accounting rules that we have to work through. So, I can't give you any more indicator on that because we're in the midst of it right now, but we will go through then as we close the year out.

But you did not anticipate at this point any material write-downs then, is it the primary takeaway you actually get?

Yes, at this point no.

And then following up the last questioner, you’d mentioned that your sales are running at least to-date a bit above or at least at the higher end of your range, does that from a margin standpoint, are you also thinking that your EPS might similarly be running at the higher end of the range at this point, just trying to get…

That is right Sam I made the statement I’ll have Ken amplify and so talked about inside the quarter October versus November, we're actually at the lower-end of our sales decline range to down 5 to down 8, we are closer to the down 8 than the down 5.

But within the range.

But we are still within the range.

I misunderstood, I apologize.

And second comment was November incrementally stronger than October.

[Multiple Speakers] basis than October.

Okay. So then the last question, looking at the margin guidance for '16, can you put a little bit more meat on the bone in terms of where the savings or quantifying the savings might be over and above the restructuring benefits since they're going to be offsetting the variable comp reset I mean the reason why I'm asking is you have a roughly a 90 basis point drop in margin in '15 and then in '16 you're looking at sales to be kind of a similarish drop than '15 and Canada and industrial are both higher margin businesses for you and you got pricing pressures also, so I'm just trying to get a sense of where else might you be seeing the savings on the OpEx side that would give you confidence that margins would be flattish?

So on the high-end of our range, our outlook range, we have obviously got a certain assumption on foreign exchange and a slightly more conservative assumption on the low-end and within the math, you have to consider that the operating cost that are outside the U.S. also get translated at those lower FX rate, so that provides a bit of a OpEx saving if you want to call it that year-over-year. We're also looking at the low-end of the range which I think is really where your question runs to and while we have carryover impacts of cost reductions and we quantify that as $25 million, we're actively working additional cost reduction contingency planning that if we see the top-line move down from 0 to the minus 5% at the low-end of our outlook range, we're obviously going to work and initiate additional contingency planning and cost reduction action. So, those are really the other two variables that are in the mix of the low-end.

And then last question John if I could in the coming off the Anixter Power Solutions deal, are we at the cusp now of major industry consolidation and if are or we're not what hurdles have to be bypassed for us to really be able to see a significant M&A and consolidation that would help everybody's margins to an extent?

Yes, well Sam we have had this discussion over the years, it's been our view that the industry within a consolidation phase that was kind of increasing or building in momentum and that -- it takes an external catalyst to cause that to happen, we saw the last significant economic downturn in kind of the '08-'09 and then coming out in the '10 obviously is being a major catalyst and we're seeing similar condition this year where it's really our customers driving a consolidation of their supply base which ripples down the value chain it impacts us, impacts our supplier partners. Over the last several years we've seen suppliers combined and we're seeing distributors at least the large ones like us, be even more aggressive with our acquisition strategies and so it's been our view and it clearly is our view today that the big are going to get bigger, faster. The big are going to get bigger, faster I think when this year is all said and done, it maybe, we'll see what the numbers look like, but in terms of M&A across the entire industry, all verticals this may be, if it be highest year, close to the highest year in terms of record M&A, so transaction, so I do think that we're in that type of phase in our industry, with that said it's still very large and fragmented. So, there's only a very small number of publicly traded companies and so those transactions are driven by if it's a strategic buyer, what's the story, what's the value creation story and then can the right price premium be achieved in the marketplace, right. But that's a handful larger companies, most of them would be overwhelming number of companies that we compete with are private companies and so…

The next question is from Chris Glynn at Oppenheimer.

Just, wondering if we look at the margin chart on Slide 12, it looks like a lot of those puts and takes I think you sort of characterized them, as a bit of a wash and if we look at that as such then certainly it’s volume detrimentals that look to be a little more moderate than perhaps historically when volumes have been pressured. So, just wondering if you could help flush out those characterizations that I made?

No I would say that's exactly right. And as we've talked about moving through this year, the restructuring actions that we've implemented have been measurable and have come more in the second half of the year and they do carryover to next year, the savings that we talked about. So, that helps us as we see the top-line being under pressure to get the incremental savings and that's why we worked hard beginning early this year to generate those kind of cost actions and I won't minimize I'll repeat a comment I made earlier on the right hand side of that chart, you see the second bullet which is cost savings contingency planning, we'll outline those as they truly need to and do come to fruition but it's an important takeaway to know that we're not just doing a set of cost reduction items in 2015 and now “done” we're continually working that formula so we have a list of things that we can do in certain areas as we see certain areas under potentially more pressure than we might have anticipated at the higher end of our range. So, that helps us to minimize the detrimentals.

And then if you do dip into that bucket that would probably be a restoration in '17, is that the right way to think about it?

It depends on what it is right, I mean we've been tight on our discretionary cost controls, the types of things that we're talking about here for cost saving contingency planning is probably more in the camp of true cost takeout as opposed to squeezing our bucket of discretionary cost. So, if anything depending on the timing of when those occur in 2016 they could have carryover benefit into 2017 favorably.

And then just on the SVRs for 2015, wondering if you could quantify rough dollar value or margin impact in 2015? And then does that set up for more of a flatter impact in 2016 within the revenue range?

Yes so, year-to-date and we talked about this in the third quarter call, probably carry through to the fourth quarter we’ve said about half of our year-over-year decline in gross margins is due to business mix and the other half is due to supplier volume rebate changes. That’s taking those numbers and taking our stated gross margin year-over-year you can kind of quantify the dollar value of that for the full year 2015 at least within a range. To the second part of your question which is are we setting up 2016 to be more of a stable year on SVR, I think that would be the case at the higher end of our range with a flattish kind of top-line we’ll obviously see some growth with some of our suppliers even at that range. At the lower-end, we certainly would have to work to offset some incremental supplier volume rebates because as you know it kind of takes kind of low single-digit growth with the supplier to keep supplier volume rebate dollars the same year-over-year. So if we’re looking at total sales declining more in the 5ish percent range and that obviously has acquisition carryover in it that would put pressure on supplier volume rebate. So the answer is at the high-end of the range so less pressure, we think we have that managed at the lower-end of the range we have certainly have to work other levers to mitigate the supplier volume rebate headwind.

The next question is from Josh. He’s last name I can’t pronounce at Buckingham Research.

Just as a follow-up Chris’ question, Ken I guess I am still a little confused on the detrimental margin comment I think Chris kind of just spelled it down to on a volume basis detrimentals my math works out to be about 8% at the midpoint on just pure volume if those two columns on that page are really a push. I think John’s back raising made it sound like they were going to nearly offset and maybe it’s a small positive or negative I don’t know what the intention was on that messaging. But if any percent volume based detrimental Ken I think you talked a little bit about restructuring or some of these cost actions. But I guess I am under the impression those are already part of those, those two buckets that net against each other. Why wouldn’t just on a pure volume basis you guys look more like the maybe 10% to 15% detrimental that you’ve normally at?

I’ll reiterate what I said before which is the restructuring impacts both in place and those that would be anticipated at the lower-end of the range will mitigate to some degree those detrimentals.

Okay, so it’s not that they necessarily push, they push based on what you have identified today?

Right, exactly.

Okay. At the midpoint of the range though is that 8% detrimental the right way to think about it, is that what you guys are putting out there?

Yes, I mean, you can kind of look at it and say midpoint of the range of 4.8 to 5, you obviously can get that midpoint, you do the math and it’s kind of within that same range. So we’re trying to hold it through actions basically at what you’re outlining.

And then just on the fourth quarter color, I appreciate the heads up on the way demand is trending. I guess similar question on margins, are you guys generally within the range there as well or any color that you can share on that?

Yes what we said as we moved into the fourth quarter is we kind of thought as we moved through the second and third, we have thought that sequentially margins have started to stabilize while still down year-over-year for the reasons we talked about, both business mix as well as volume rebate impacts. I would say the fourth quarter has been so far in line with what we anticipated when we gave you the outlook of saying that we think that we have seen sequential stabilization in our gross margins.

And then just shifting over to the balance sheet, clearly you guys are going to be above the range here on target leverage for a little bit as part of the Needham deal. I guess with some of the actions in the high yield market recently, why not prioritize getting back well into the midpoint or maybe even the lower-end of the leverage range before really taking a forward view on M&A again?

We probably talk about this on most calls. But I will say it this way. 2 to 3.5 times is the control band. I want to make sure that over a long period of time we stay within that control band. If we’re running at 3.5 or even maybe a tick above it because the right acquisition came along, we’ll take a look at those things because our cash flow dynamics are strong and solid. I do want to make sure that we don’t pass on the right opportunities but over the long period of time we stay within the band but if it's a 2.2 versus I'm sorry, 2.7 versus 3.2 it doesn't make that much difference because of how our cash flow dynamics play out. We'll consistently generate solid cash through the cycle and so as long as we're doing the right things and we can within a shorter rather than longer period of time bring ourselves back within that control band and we've a good strong capital structure overall we'll take a look at those activities, those acquisition activities.

The only thing I'd add to that, and 100% agree and -- share repurchases we can control the timing that is completely within purview and control, but acquisitions we’d ultimately control the timing if we do the transaction or not and proceed with the acquisition with that said, I think it's really important to understand that is a critical value creation lever for our Company over the mid to long-term it’s core to how we operate, we see ourselves as a consolidator, we're going to continue to do that, my response is the same questions, we run a phase gated process, it's got five stages in it, so you work these acquisitions and they take -- they are not 30 days in duration, there are many months to many-many years, we told you, we took -- we worked equal for five years and so if you have a terrific acquisition, it's going to strengthen the company, it's got a return that's well above the risk adjusted weighted average cost of capital of the company, given our free cash flow characteristics and the strength of our balance sheet and the cost of our financing when you look at our capital structure we would not want to be turning that on and off again the second if we get acquisitions through the final phase gate, we have got agreement it is a great business case. So we can't control that timing that precisely as things move through the pipeline. We have in our history shut off acquisitions in very challenging economic times, this goes back to Dave’s question, so back in 2009, I moved from COO to CEO and we shut off the acquisition engine. We shut it off, we said we'll not be doing any acquisitions, our leverage ratio was taking up, we lost 25% of our top-line in one year we took out over thousand headcount reduction in less than four quarters and 100 million of inventory and we said, we stop acquisitions and we wouldn't turn it back on again, it's overconfidence that things have stabilized and we are off to the races again and we didn't do our first acquisition again until June [indiscernible] we're not in that scenario right now, as I mentioned in response of to the earlier question. So hopefully that gives you a little additional color on how we think about it.

But Josh you should be comfortable I will just add, it is an important question, so I know we're both giving you answers here but after we did the EECOL acquisition we obviously stepped outside the range, that's not the kind of thing that we're talking about here right so when we did that we said look we will walk away from acquisitions for a period of time, we'll integrate, we'll bring that into play and so we were enough outside of our band that we said, we will put them on hold, we're not talking about that kind of movement at this point in time, we're talking about just a slight tick above.

The next question is from Robert Barry at Susquehanna.

Could you comment on the gross margin expectation and the outlook, I mean if you need low single-digit growth to get rabbets, and you've outlined what seems like some real mix pressure here with industrial and Canada weakness, I mean it feels like it's implied tracking down about as much as it's tracking down this year, which is 50-60 bps is that how you are thinking about it?

We have -- we have kind of tried to get away a bit from giving guidance on the gross margin line because we're obviously trying to manage the mix of that on the bottom-line results with managing our SG&A as well. But that said, I'll tell you that what we're anticipating as we've moved through 2015 which has been a challenging environment, affecting gross margins as well into 2016, is with -- at the upper-end of our range with a flattish top-line, we're anticipating that gross margins continue to be kind of sequentially stable. So 2016 is sequentially stable with 2015, I think that we would say that at the low-end of that range with 5% top-line decline, you get a little bit of gross margin pressure probably not to the degree that we've seen this year just because a lot of the actions that both John and I've talked about that we've outlined as our new sourcing leader has come on-board as well as some of the pricing tools that we continue to implement across the board so a little bit of pressure at the low-end and expecting kind of effectively, relatively stable gross margins at the high-end of the range.

I mean what's the offset to keep it stable if you are seeing mix pressure right with industrial and Canada down and there are no rebates, what's the offset to keep it flattish even at the high-end of the range, is it pricing?

Well I don't know that this was what the indication was but it's not that there would be no rebates at either end of that range, there would be rebates and we continue to work with our large preferred suppliers to improve programs on a yearly basis by managing our spend so even if the same suppliers we will continue to see rebates whether or not the number is slightly smaller or slightly larger. Where some of the offsets are though are on some of the things that we've been able to do with pulling additional suppliers into preferred supplier arrangements, as well as leveraging some of our spend with the sourcing leader that we have a leverage performed we laid out a bit of that for you in the Investor Day, when we started showing you some charts that showed you the variation in what we buy something for a multiple locations. A lot of this first year of work that our new supply chain leader and organization has done has been for start to get the best price where we're not getting the best price even in our existing spend. So it's through both those incremental purchasing as well as pricing initiatives.

I see, I see. [Multiple Speakers]

I think Rob that's an important one and I mentioned that we will kind of develop that much further at the Investor Day, but not to have a long answer here but I think those of you that know us well historically over the years a lot of autonomy and control is at the individual branch level. We didn’t have the overall sales and marketing leader for the company until the new work design was put in place in the beginning of 2014. At the beginning of last year, we didn’t have a supply chain leader which is operations, supply chain, purchasing et cetera and working with pricing in place until beginning of this year and so the increasing preferred supplier utilization that action in and of itself where we’re managing our supply chain more effectively and we are in essence consolidating suppliers in certain categories and driving more purchases through our preferred suppliers. The point is and what Ken was addressing the mix is a huge factor it's underneath the surface in supplier volume rebates, it's heavily mix driven and depending on who you are going with and what programs do you have in place and if some of those have real kickers in for even driving even higher growth.

I see no that makes sense, makes sense. Could I ask just one clarification question on Canada the high single to mid-teens decline including currency, what is that excluding the currency?

I think we stated in the script that it was a low single-digit decline ex-currency.

The next is from Matt Duncan of Stephens.

Just wanted to see if I can get a clarification on one of the comments you guys made about the fourth quarter and help with a little more detail, so I've seen the recall of the time of the 3Q conference call October was tracking at a minus six all-in where did that come in, I think you said November was a little bit better and then how is December tracking for us?

So October came in a little bit further down then where we were at the time of the call. November was still down but better than the month of October and December isn’t tracking, it is tracking a little bit stronger but not significantly different.

Okay. And then the comment about the holiday shutdown, you said you are not really seeing those yet, but I would assume if you are going to see earlier than a normal holiday shutdowns it's probably not going to happen until this week or next. So are you hearing anything from the field that leads you to believe that's not going to happen because I know some of your peers have stated pretty strongly that they expect that to happen, so what are you guys seeing that gives you confidence that's not going to happen?

Again what we're hearing I would characterize overall as being more typical to a standard December. With that said in certain verticals like mining and steel and oil and gas, but we have been facing challenges in some of those verticals with customers and their spend-down right. Some of those have adjusted schedules and such so we will see how the next couple of weeks play out but what we've said is at this point in time, we haven’t seen -- it's nothing -- we are seeing any indications it's like it was back five-six years ago the original question where we just have pervasive across the board shutdowns and we are going through that major contraction here.

And then on the segment guidance I want to make sure we know how to sort of load in FX correctly. Is FX sort of 2% to 3% in each segment, so we take your market forecast and then put it back to 3% FX headwind on top of it or does it lean more towards any segment particular Ken?

It probably is relatively balanced across industrial and construction.

I think that the issue is the mix of end-markets in Canada is actually very different than the mix of end-markets in the U.S. and Canada is much more construction and CIG weighted versus industrial. And I'm just saying construction and CIG combined construction and CIG combined has a heavier weighting than construction and CIG in the U.S. and so the FX is completely a function of mix right. So, the weightings are a bit different.

And then last thing for me just on the cost side. If you see the business tracking more towards the lower-end of the sales guidance, would you get more aggressive with the cost cuts? Or would you really have to see things get materially worse John?

Ken answered that earlier, the answer is yes.

Okay. And…

…so the answer is no. [Multiple Speakers]

Is there anything to quantify how much more you think you might do if you’re at the lower-end of the range as to…

No because I think that’s hypothetical and it’s going to be heavily mix driven. So, if we’re at the lower-end of the range what -- the reality is going to be what is the mix?

Sure.

And what’s driving the lower-end of the range, and what’s driving the mix at the lower-end which has margin implications right, margins expectations. So that’s too much hypothetical there too.

Our last question is from Shannon O'Callaghan at UBS.

Do you have an explicit forecast this year for oil and gas, and how much of a drag that is on the overall Company for ’16?

No, we are not -- we didn’t do it explicitly like we did moving into the initial points of the downturn. One of the reasons why we’ve seen kind of the -- we’ve been able to absorb and see kind of the impact on the CapEx side of the equation as we move through 2015, we said that oil and gas was about 10% of our overall direct -- direct oil and gas sales were about 10% of our overall sales as we moved into 2015. Now with the changes that we’ve seen and we said that would be down around 30% this year, and that’s about what its running that’s still our estimate. That’s now a number that’s been adjusted to more something like around 7% obviously of our total sales. We didn’t do it specifically because we’ve absorbed the first specific large chunks of the change and with that I will say I do think there is probably going to be a bit of incremental pressure from oil and gas as we see the impact that we’ve continued to see in the last few weeks. But I would tell you, I don’t -- we're not expecting it to be as significant an impact on WESCO in 2016 as it was in 2015 just because of the major movement.

Okay. And then on U.S. utility spending, I mean you gave some thoughts around overall utility, some of that is Canada, some of that is your specific customer relationships. I mean just overall tone of U.S. utility spending can you fill out your thoughts there a little more?

Yes. Well, this year I think we’re not quite done the year but just to kind of fit the context, the distribution part of the utility power generation transmission distribution chain kind of the D of T&D. We see the market is being down low single-digits, transmission actually is down to a greater degree this year. And so this is consistent with our view that we’ve been talking about throughout the year, and that’s what we see kind of exiting the year. I’ll just set the context for the overall market there is very much a muted outlook for low growth so take out fundamentally if you want to understand what utilities are facing look at energy demand, that is an overall driver and then obviously residential construction is a good early leading indicator for new leaders in the ground which will drive increased energy demand but there is a time lag there. If you want to know what utilities are facing real time look at energy demand. And the outlook for low growth next year is muted. So there is continued pressure our customers are facing for cost reduction and productivity improvements and major infrastructure investment timing is subject to various policy initiatives that are driven at the national or regional level. So when you add that all up, that’s what informs our outlook on the market. We feel very good about our utility value proposition and our business models because we have a range of them. We have 18 consecutive quarters of growth and we’re highly confident we’ve been taking share for a number of years. And that’s what we plan to continue on doing that is our plan in 2016 against the backdrop that I would say remains challenging as we faced in ’15 as a response to Deane’s question by and large a little bit different by end-market but fundamentally we’re looking at the headwinds we’re facing today persisting.

Thanks Shannon.

We do have a few additional members and people in the queue. Marianne is available and Ken as well to take your follow-up conversations and discussions, we’d be happy to do that. With that, we went a little bit long because we wanted to get in as many questions as we could. And I thank you for your time today and your continued support. Have a great holiday, our best to you and your family. Thank you.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.