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FORM 10-K
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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CDW CORPORATION
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(Exact name of registrant as specified in its charter)
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Delaware
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26-0273989
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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200 N. Milwaukee Avenue
Vernon Hills, Illinois
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60061
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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x
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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SIGNATURES
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•
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Breadth of solutions for our customers.
The breadth and depth of knowledge that our direct selling organization, specialists and engineers have across multiple industries and technologies position us well to anticipate and meet our customers’ needs. Our size allows us to provide our customers with a broad selection of over
100,000
technology products from over
1,000
brands and a multitude of advanced technology solutions at competitive prices. We have leveraged our scale to provide a high level of customer service and a breadth of technology options, making it easy for customers to do business with us.
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•
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Broad market access for our vendor partners.
We believe we are an attractive route to market for our vendor partners in part because we provide them with access to a cost-effective and highly knowledgeable sales and marketing organization that reaches over
250,000
customers. Our vendor partners recognize that, in addition to providing broad customer reach, our scale and scope enables us to sell, deliver and implement their products and services to customers with a high level of knowledge and consistency.
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•
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Operational cost efficiencies and productivity.
Our large scale provides us with operational cost efficiencies across our
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Year Ended December 31, 2011
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Year Ended December 31, 2010
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||||||||||
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Dollars in
Millions
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Percentage
of Net Sales
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Dollars in
Millions
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Percentage
of Net Sales
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||||||
Hardware:
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||||||
Notebook/Mobile Devices
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$
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1,340.0
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14.0
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%
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$
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1,142.5
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13.0
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%
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NetComm Products
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1,246.4
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13.0
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1,149.9
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13.1
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||
Data Storage/Drives
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925.6
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9.6
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838.5
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9.5
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||
Other Hardware
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4,061.9
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42.3
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3,793.0
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43.1
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Total Hardware
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$
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7,573.9
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78.9
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%
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$
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6,923.9
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78.7
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%
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Software
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1,757.1
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18.3
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1,608.5
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18.3
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Services
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256.8
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2.7
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217.0
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2.4
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Other
(1)
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14.6
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0.1
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|
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51.8
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0.6
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||
Total net sales
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$
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9,602.4
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100.0
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%
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$
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8,801.2
|
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100.0
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%
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(1)
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Includes items such as delivery charges to customers and certain commission revenue.
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•
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direct marketers such as Insight Enterprises, PC Connection, PC Mall, Softchoice and GTSI;
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•
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value-added resellers, including larger ones such as Logicalis, Agilysis, Sirius, and many regional and local value-added resellers;
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•
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manufacturers such as Dell, Hewlett-Packard and Apple, who sell directly to customers;
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•
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e-tailers such as Tiger Direct, Buy.com, Amazon and Newegg;
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•
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large service providers and system integrators such as IBM, Accenture, Hewlett-Packard and Dell; and
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•
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retailers such as Best Buy, Office Depot, Office Max, Staples, Wal-Mart, Sam’s Club and Costco.
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•
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making it more difficult for us to satisfy our obligations with respect to our debt;
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•
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requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our and our subsidiaries' debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes;
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•
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requiring us to comply with restrictive covenants in our senior credit facilities and indentures, which limit the manner in which we conduct our business;
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•
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making it more difficult for us to obtain vendor financing from our vendor partners;
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•
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limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate;
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•
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placing us at a competitive disadvantage compared to any of our less leveraged competitors;
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•
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increasing our vulnerability to both general and industry-specific adverse economic conditions; and
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•
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limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.
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•
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incur or guarantee additional debt;
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•
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pay dividends or make distributions to holders of our capital stock or to make certain other restricted payments or investments;
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•
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repurchase or redeem capital stock;
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•
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prepay, repurchase or redeem debt;
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•
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make loans, capital expenditures or investments or acquisitions;
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•
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enter into transactions with affiliates;
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•
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create liens;
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•
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merge or consolidate with other companies or transfer all or substantially all of our assets; and
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•
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transfer or sell assets, including capital stock of subsidiaries.
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•
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direct marketers, such as Insight Enterprises, PC Connection, PC Mall, Softchoice and GTSI;
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•
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value-added resellers, including larger ones such as Logicalis, Agilysis, Sirius and many regional and local value-added resellers;
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•
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manufacturers, such as Dell, Hewlett-Packard and Apple, who sell directly to customers;
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•
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e-tailers, such as Tiger Direct, Buy.com, Amazon and Newegg;
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•
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large service providers and system integrators, such as IBM, Accenture, Hewlett-Packard and Dell; and
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•
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retailers such as Best Buy, Office Depot, Office Max, Staples, Wal-Mart, Sam's Club and Costco.
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•
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conduct business with our customers;
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•
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manage our inventory and accounts receivable;
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•
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purchase, sell, ship and invoice our hardware and software products and provide and invoice our services efficiently and on a timely basis; and
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•
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maintain our cost-efficient operating model.
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•
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the imposition of additional trade law provisions or regulations;
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•
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the imposition of additional duties, tariffs and other charges on imports and exports;
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•
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foreign currency fluctuations;
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•
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natural disasters or other adverse occurrences at any of our suppliers' facilities;
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•
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restrictions on the transfer of funds;
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•
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the financial instability or bankruptcy of manufacturers; and
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•
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significant labor disputes, such as strikes.
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•
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In connection with the Acquisition, the purchase price of Predecessor was allocated to the assets acquired and liabilities assumed based on their estimated fair market values on October 12, 2007. This purchase price allocation resulted in significant changes to certain balance sheet items, including deferred income tax assets and liabilities, property and equipment, intangible assets and goodwill.
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•
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In connection with the Acquisition, we entered into various financing arrangements on October 12, 2007, of which $4,640.0 million was funded at closing of the Acquisition. This resulted in significantly increased interest expense for all periods subsequent to the Acquisition.
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•
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In connection with the Acquisition, we recorded customer relationships, trade names, internally developed software and other intangible assets with an estimated fair value of $2,323.8 million. These assets are amortized on a straight-line basis over their estimated useful lives which range from five to twenty years.
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•
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In connection with the Acquisition, we incurred certain Acquisition-related costs. This included investment banking, legal and other third-party costs, along with non-cash equity-based compensation expense resulting from the accelerated vesting of stock options and restricted stock units in connection with the Acquisition. During the periods January 1, 2007 to October 11, 2007, and October 12, 2007 to December 31, 2007, we incurred $144.4 million and $26.7 million, respectively, of these Acquisition-related costs.
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•
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During the years ended December 31, 2008 and 2009, we recorded goodwill impairment charges of $1,712.0 million and $241.8 million, respectively. These impairments were primarily attributable to deterioration in macroeconomic conditions and overall declines in net sales.
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•
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During the year ended December 31, 2011, we recorded a net loss on extinguishments of long-term debt of $118.9 million. The loss represented the difference between the amount paid upon extinguishment, including call premiums and expenses paid to the debt holders and agents, and the net carrying amount of the extinguished debt, adjusted for a portion of the unamortized deferred financing costs.
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Predecessor
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Successor
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||||||||||||||||||||
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Period from
January 1,
2007 to
October 11,
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Period from
October 12,
2007 to
December 31,
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Year Ended December 31,
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||||||||||||||||||
(in millions)
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2007
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2007
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2008
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2009
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2010
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2011
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||||||||||||
Statement of Operations Data:
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||||||||||||
Net sales
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$
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6,344.3
|
|
|
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$
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1,800.2
|
|
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$
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8,071.2
|
|
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$
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7,162.6
|
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$
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8,801.2
|
|
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$
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9,602.4
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Cost of sales
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5,320.8
|
|
|
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1,505.8
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|
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6,710.2
|
|
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6,029.7
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7,410.4
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8,015.0
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||||||
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||||||||||||
Gross profit
|
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1,023.5
|
|
|
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294.4
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|
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1,361.0
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|
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1,132.9
|
|
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1,390.8
|
|
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1,587.4
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||||||
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||||||||||||
Selling and administrative expenses
|
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656.0
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|
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221.8
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|
894.8
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821.1
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|
|
932.1
|
|
|
994.0
|
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||||||
Advertising expense
|
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97.3
|
|
|
|
27.0
|
|
|
141.3
|
|
|
101.9
|
|
|
106.0
|
|
|
122.7
|
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||||||
Goodwill impairment
|
|
—
|
|
|
|
—
|
|
|
1,712.0
|
|
|
241.8
|
|
|
—
|
|
|
—
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|
||||||
|
|
|
|
|
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|
|
|
|
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|
|
|
||||||||||||
Income (loss) from operations
|
|
270.2
|
|
|
|
45.6
|
|
|
(1,387.1
|
)
|
|
(31.9
|
)
|
|
352.7
|
|
|
470.7
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income (expense), net
|
|
16.8
|
|
|
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(104.6
|
)
|
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(390.3
|
)
|
|
(431.7
|
)
|
|
(391.9
|
)
|
|
(324.2
|
)
|
||||||
Net gain (loss) on extinguishments of long-term debt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
(118.9
|
)
|
||||||
Other (expense) income, net
|
|
(0.6
|
)
|
|
|
0.2
|
|
|
0.2
|
|
|
2.4
|
|
|
0.2
|
|
|
0.7
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) before income taxes
|
|
286.4
|
|
|
|
(58.8
|
)
|
|
(1,777.2
|
)
|
|
(461.2
|
)
|
|
(37.0
|
)
|
|
28.3
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax (expense) benefit
|
|
(112.1
|
)
|
|
|
18.5
|
|
|
12.1
|
|
|
87.8
|
|
|
7.8
|
|
|
(11.2
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
|
$
|
174.3
|
|
|
|
$
|
(40.3
|
)
|
|
$
|
(1,765.1
|
)
|
|
$
|
(373.4
|
)
|
|
$
|
(29.2
|
)
|
|
$
|
17.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash, cash equivalents and marketable securities
|
|
$
|
664.3
|
|
|
|
$
|
15.6
|
|
|
$
|
94.4
|
|
|
$
|
88.0
|
|
|
$
|
36.6
|
|
|
$
|
99.9
|
|
Working capital
|
|
1,418.3
|
|
|
|
836.0
|
|
|
877.6
|
|
|
923.2
|
|
|
675.4
|
|
|
538.2
|
|
||||||
Total assets
|
|
2,615.2
|
|
|
|
8,296.4
|
|
|
6,276.3
|
|
|
5,976.0
|
|
|
5,943.8
|
|
|
5,949.6
|
|
||||||
Total debt and capitalized lease obligations
(1)
|
|
0.3
|
|
|
|
4,617.7
|
|
|
4,633.5
|
|
|
4,621.9
|
|
|
4,290.0
|
|
|
4,066.0
|
|
||||||
Total shareholders’ equity (deficit)
|
|
1,737.4
|
|
|
|
2,068.9
|
|
|
262.2
|
|
|
(44.7
|
)
|
|
(43.5
|
)
|
|
(7.3
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
$
|
38.7
|
|
|
|
$
|
8.0
|
|
|
$
|
41.1
|
|
|
$
|
15.6
|
|
|
$
|
41.5
|
|
|
$
|
45.7
|
|
Depreciation and amortization
|
|
33.7
|
|
|
|
46.3
|
|
|
218.4
|
|
|
218.2
|
|
|
209.4
|
|
|
204.9
|
|
||||||
Gross profit as a percentage of net sales
|
|
16.1
|
%
|
|
|
16.4
|
%
|
|
16.9
|
%
|
|
15.8
|
%
|
|
15.8
|
%
|
|
16.5
|
%
|
||||||
Ratio of earnings to fixed charges
(2)
|
|
63:1
|
|
|
|
(a)
|
|
|
(a)
|
|
|
(a)
|
|
|
(a)
|
|
|
1:1
|
|
||||||
EBITDA
(3)
|
|
303.3
|
|
|
|
92.1
|
|
|
(1,168.5
|
)
|
|
188.7
|
|
|
564.3
|
|
|
557.4
|
|
||||||
Adjusted EBITDA
(3)
|
|
456.9
|
|
|
|
125.0
|
|
|
570.6
|
|
|
465.4
|
|
|
601.8
|
|
|
717.3
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating activities
(4)
|
|
$
|
198.8
|
|
|
|
$
|
(123.7
|
)
|
|
$
|
215.4
|
|
|
$
|
107.6
|
|
|
$
|
423.7
|
|
|
$
|
214.7
|
|
Investing activities
|
|
200.0
|
|
|
|
(6,399.6
|
)
|
|
(60.3
|
)
|
|
(82.6
|
)
|
|
(125.4
|
)
|
|
(56.0
|
)
|
||||||
Financing activities
(4)
|
|
115.9
|
|
|
|
6,539.0
|
|
|
(75.8
|
)
|
|
(31.9
|
)
|
|
(350.1
|
)
|
|
(95.4
|
)
|
(1)
|
Excludes borrowings of $122.8 million, $75.3 million, $34.1 million, $25.0 million, $28.2 million and $278.7 million, as of October 11, 2007, December 31, 2007, December 31, 2008, December 31, 2009, December 31, 2010 and December 31, 2011, respectively, under our inventory financing agreements. We do not include these borrowings in total debt because we have not in the past incurred, and in the future do not expect to incur, any interest expense or late fees under these agreements.
|
(2)
|
For purposes of calculating the ratio of earnings to fixed charges, earnings consist of earnings before income taxes
|
(a)
|
For the period October 12, 2007 to December 31, 2007 and the years ended December 31, 2008, 2009 and 2010, earnings available for fixed charges were inadequate to cover fixed charges by $58.8 million, $1,777.2 million, $461.2 million and $37.0 million, respectively.
|
(3)
|
EBITDA is defined as consolidated net income (loss) before interest income (expense), income tax benefit (expense), depreciation, and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, is calculated by adjusting EBITDA for certain items of income and expense including (but not limited to) the following: (a) non-cash equity-based compensation; (b) goodwill impairment charges; (c) sponsor fees; (d) certain consulting fees; (e) debt-related legal and accounting costs; (f) equity investment income and losses; (g) certain severance and retention costs; (h) gains and losses from the early extinguishment of debt; (i) gains and losses from asset dispositions outside the ordinary course of business; (j) Acquisition-related costs; (k) equity compensation payroll taxes; and (l) non-recurring, extraordinary or unusual gains or losses or expenses.
|
|
|
Predecessor
|
|
|
Successor
|
||||||||||||||||||||
|
|
Period from
January 1,
2007 to
October 11,
|
|
|
Period from
October 12,
2007 to
December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||
(in millions)
|
|
2007
|
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
||||||||||||
Net income (loss)
|
|
$
|
174.3
|
|
|
|
$
|
(40.3
|
)
|
|
$
|
(1,765.1
|
)
|
|
$
|
(373.4
|
)
|
|
$
|
(29.2
|
)
|
|
$
|
17.1
|
|
Depreciation and amortization
|
|
33.7
|
|
|
|
46.3
|
|
|
218.4
|
|
|
218.2
|
|
|
209.4
|
|
|
204.9
|
|
||||||
Income tax expense (benefit)
|
|
112.1
|
|
|
|
(18.5
|
)
|
|
(12.1
|
)
|
|
(87.8
|
)
|
|
(7.8
|
)
|
|
11.2
|
|
||||||
Interest (income) expense, net
|
|
(16.8
|
)
|
|
|
104.6
|
|
|
390.3
|
|
|
431.7
|
|
|
391.9
|
|
|
324.2
|
|
||||||
EBITDA
|
|
303.3
|
|
|
|
92.1
|
|
|
(1,168.5
|
)
|
|
188.7
|
|
|
564.3
|
|
|
557.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-cash equity-based compensation
|
|
7.5
|
|
|
|
4.2
|
|
|
17.8
|
|
|
15.9
|
|
|
11.5
|
|
|
19.5
|
|
||||||
Acquisition-related costs
(i)
|
|
144.4
|
|
|
|
26.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Sponsor fees
|
|
—
|
|
|
|
2.0
|
|
|
5.0
|
|
|
5.0
|
|
|
5.0
|
|
|
5.0
|
|
||||||
Consulting and debt-related professional fees
|
|
—
|
|
|
|
—
|
|
|
4.3
|
|
|
14.1
|
|
|
15.1
|
|
|
5.1
|
|
||||||
Goodwill impairment
|
|
—
|
|
|
|
—
|
|
|
1,712.0
|
|
|
241.8
|
|
|
—
|
|
|
—
|
|
||||||
Net (gain) loss on extinguishments of long-term debt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
118.9
|
|
||||||
Other adjustments
(ii)
|
|
1.7
|
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
7.9
|
|
|
11.4
|
|
||||||
Adjusted EBITDA
|
|
$
|
456.9
|
|
|
|
$
|
125.0
|
|
|
$
|
570.6
|
|
|
$
|
465.4
|
|
|
$
|
601.8
|
|
|
$
|
717.3
|
|
(i)
|
Non-cash equity-based compensation expense of $25.3 million related to the Acquisition is included in Acquisition-related costs in the Predecessor period from January 1, 2007 to October 11, 2007.
|
(ii)
|
Includes certain severance and retention costs, equity investment income and the gain related to the sale of the Informacast software and equipment for periods subsequent to the Acquisition. Includes equity compensation
|
|
|
Predecessor
|
|
|
Successor
|
||||||||||||||||||||
|
|
Period from
January 1,
2007 to
October 11,
|
|
|
Period from
October 12,
2007 to
December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||
(in millions)
|
|
2007
|
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
||||||||||||
EBITDA
|
|
$
|
303.3
|
|
|
|
$
|
92.1
|
|
|
$
|
(1,168.5
|
)
|
|
$
|
188.7
|
|
|
$
|
564.3
|
|
|
$
|
557.4
|
|
Depreciation and amortization
|
|
(33.7
|
)
|
|
|
(46.3
|
)
|
|
(218.4
|
)
|
|
(218.2
|
)
|
|
(209.4
|
)
|
|
(204.9
|
)
|
||||||
Income tax benefit (expense)
|
|
(112.1
|
)
|
|
|
18.5
|
|
|
12.1
|
|
|
87.8
|
|
|
7.8
|
|
|
(11.2
|
)
|
||||||
Interest income (expense), net
|
|
16.8
|
|
|
|
(104.6
|
)
|
|
(390.3
|
)
|
|
(431.7
|
)
|
|
(391.9
|
)
|
|
(324.2
|
)
|
||||||
Net income (loss)
|
|
174.3
|
|
|
|
(40.3
|
)
|
|
(1,765.1
|
)
|
|
(373.4
|
)
|
|
(29.2
|
)
|
|
17.1
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
33.7
|
|
|
|
46.3
|
|
|
218.4
|
|
|
218.2
|
|
|
209.4
|
|
|
204.9
|
|
||||||
Goodwill impairment
|
|
—
|
|
|
|
—
|
|
|
1,712.0
|
|
|
241.8
|
|
|
—
|
|
|
—
|
|
||||||
Equity-based compensation expense
|
|
32.8
|
|
|
|
4.2
|
|
|
17.8
|
|
|
15.9
|
|
|
11.5
|
|
|
19.5
|
|
||||||
Amortization of deferred financing costs
|
|
—
|
|
|
|
13.4
|
|
|
38.6
|
|
|
16.2
|
|
|
18.0
|
|
|
15.7
|
|
||||||
Deferred income taxes
|
|
(24.1
|
)
|
|
|
(12.6
|
)
|
|
(39.9
|
)
|
|
(94.4
|
)
|
|
(4.3
|
)
|
|
(10.2
|
)
|
||||||
Allowance for doubtful accounts
|
|
(3.9
|
)
|
|
|
—
|
|
|
0.4
|
|
|
(0.2
|
)
|
|
(1.3
|
)
|
|
0.4
|
|
||||||
Realized loss on interest rate swap agreements
|
|
—
|
|
|
|
—
|
|
|
18.6
|
|
|
103.2
|
|
|
51.5
|
|
|
2.8
|
|
||||||
Mark to market loss on interest rate derivatives
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
4.2
|
|
||||||
Net (gain) loss on extinguishments of long-term debt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
118.9
|
|
||||||
Gross excess tax benefits from equity-based compensation
|
|
(73.6
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net loss (gain) on sale and disposal of assets
|
|
0.6
|
|
|
|
—
|
|
|
0.5
|
|
|
(1.7
|
)
|
|
0.7
|
|
|
0.3
|
|
||||||
Changes in assets and liabilities
|
|
59.0
|
|
|
|
(134.8
|
)
|
|
14.1
|
|
|
(18.0
|
)
|
|
165.3
|
|
|
(158.3
|
)
|
||||||
Other non-cash items
|
|
—
|
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||||
Net cash provided by (used in) operating activities
(4)
|
|
$
|
198.8
|
|
|
|
$
|
(123.7
|
)
|
|
$
|
215.4
|
|
|
$
|
107.6
|
|
|
$
|
423.7
|
|
|
$
|
214.7
|
|
(4)
|
Amounts have been revised. For further information and a summary of the revisions for the years ended December 31, 2009 and 2010, see Note 1 to the consolidated financial statements included in this report. The revision for the period from January 1, 2007 to October 11, 2007 resulted in a decrease to cash flows from operating activities of $14.7 million with an equal and offsetting increase to cash flows from financing activities. The revision for the period from October 12, 2007 to December 31, 2007 resulted in an increase to cash flows from operating activities of $47.5 million with an equal and offsetting decrease to cash flows from financing activities. The revision for the year ended December 31, 2008 resulted in an increase to cash flows from operating activities of $41.2 million with an equal and offsetting decrease to cash flows from financing activities.
|
•
|
Average daily sales increased
8.7%
to $37.7 million
|
•
|
Adjusted EBITDA increased
19.2%
to
$717.3 million
|
•
|
The cash conversion cycle decreased from 32 days to 27 days
|
•
|
Availability under the senior secured asset-based revolving credit facility at the end of the year increased from $548 million to $679 million
|
•
|
The senior secured leverage ratio decreased from 3.9 to 2.7
|
|
|
Year Ended December 31, 2011
|
|
Year Ended December 31, 2010
|
||||||||||
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
||||||
Net sales
|
|
$
|
9,602.4
|
|
|
100.0
|
%
|
|
$
|
8,801.2
|
|
|
100.0
|
%
|
Cost of sales
|
|
8,015.0
|
|
|
83.5
|
|
|
7,410.4
|
|
|
84.2
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Gross profit
|
|
1,587.4
|
|
|
16.5
|
|
|
1,390.8
|
|
|
15.8
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Selling and administrative expenses
|
|
994.0
|
|
|
10.3
|
|
|
932.1
|
|
|
10.6
|
|
||
Advertising expense
|
|
122.7
|
|
|
1.3
|
|
|
106.0
|
|
|
1.2
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Income from operations
|
|
470.7
|
|
|
4.9
|
|
|
352.7
|
|
|
4.0
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
(324.2
|
)
|
|
(3.4
|
)
|
|
(391.9
|
)
|
|
(4.4
|
)
|
||
Net (loss) gain on extinguishments of long-term debt
|
|
(118.9
|
)
|
|
(1.2
|
)
|
|
2.0
|
|
|
—
|
|
||
Other income, net
|
|
0.7
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Income (loss) before income taxes
|
|
28.3
|
|
|
0.3
|
|
|
(37.0
|
)
|
|
(0.4
|
)
|
||
|
|
|
|
|
|
|
|
|
||||||
Income tax (expense) benefit
|
|
(11.2
|
)
|
|
(0.1
|
)
|
|
7.8
|
|
|
0.1
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
17.1
|
|
|
0.2
|
%
|
|
$
|
(29.2
|
)
|
|
(0.3
|
)%
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||||||||
|
2011
|
|
2010
|
|
|
|
|
|||||||||||||
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollar Change
|
|
Percent
Change (1) |
|||||||||
Corporate
|
$
|
5,334.4
|
|
|
55.6
|
%
|
|
$
|
4,833.6
|
|
|
54.9
|
%
|
|
$
|
500.8
|
|
|
10.4
|
%
|
Public
|
3,757.2
|
|
|
39.1
|
|
|
3,560.6
|
|
|
40.5
|
|
|
196.6
|
|
|
5.5
|
|
|||
Other
|
510.8
|
|
|
5.3
|
|
|
407.0
|
|
|
4.6
|
|
|
103.8
|
|
|
25.5
|
|
|||
Total net sales
|
$
|
9,602.4
|
|
|
100.0
|
%
|
|
$
|
8,801.2
|
|
|
100.0
|
%
|
|
$
|
801.2
|
|
|
9.1
|
%
|
(1)
|
There were
255
and
254
selling days in the years ended December 31, 2011 and 2010, respectively. On an average daily basis, total net sales increased
8.7%
.
|
(in millions)
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
|
2011
|
|
2010
|
|
Dollar Change
|
|
Percent Change
|
|||||||
Corporate:
|
|
|
|
|
|
|
|
|
|||||||
Medium / Large
|
|
$
|
4,287.1
|
|
|
$
|
3,867.3
|
|
|
$
|
419.8
|
|
|
10.9
|
%
|
Small Business
|
|
1,047.3
|
|
|
966.3
|
|
|
81.0
|
|
|
8.4
|
|
|||
Total Corporate
|
|
$
|
5,334.4
|
|
|
$
|
4,833.6
|
|
|
$
|
500.8
|
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Public:
|
|
|
|
|
|
|
|
|
|||||||
Government
|
|
$
|
1,343.5
|
|
|
$
|
1,368.6
|
|
|
$
|
(25.1
|
)
|
|
(1.8
|
)%
|
Education
|
|
1,197.7
|
|
|
1,200.6
|
|
|
(2.9
|
)
|
|
(0.2
|
)
|
|||
Healthcare
|
|
1,216.0
|
|
|
991.4
|
|
|
224.6
|
|
|
22.7
|
|
|||
Total Public
|
|
$
|
3,757.2
|
|
|
$
|
3,560.6
|
|
|
$
|
196.6
|
|
|
5.5
|
%
|
|
|
Year Ended December 31, 2011
|
|
Year Ended December 31, 2010
|
|
|
|||||||||||
|
|
Dollars in
Millions
|
|
Operating
Margin
Percentage
|
|
Dollars in
Millions
|
|
Operating
Margin
Percentage
|
|
Percent Change
in Income (Loss)
from Operations
|
|||||||
Segments:
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
|
$
|
331.6
|
|
|
6.2
|
%
|
|
$
|
256.2
|
|
|
5.3
|
%
|
|
29.4
|
%
|
Public
|
|
233.3
|
|
|
6.2
|
|
|
193.0
|
|
|
5.4
|
|
|
20.9
|
|
||
Other
|
|
17.5
|
|
|
3.4
|
|
|
14.3
|
|
|
3.5
|
|
|
22.3
|
|
||
Headquarters
(2)
|
|
(111.7
|
)
|
|
nm
|
|
|
(110.8
|
)
|
|
nm
|
|
|
(0.8
|
)
|
||
Total income (loss) from operations
|
|
$
|
470.7
|
|
|
4.9
|
%
|
|
$
|
352.7
|
|
|
4.0
|
%
|
|
33.5
|
%
|
(1)
|
Segment income (loss) from operations includes the segment’s direct operating income (loss) and allocations for Headquarters’ costs, allocations for logistics services, certain inventory adjustments, and volume rebates and cooperative advertising from vendors.
|
(2)
|
Includes Headquarters’ function costs that are not allocated to the segments.
|
(in millions)
|
Year Ended December 31,
|
||||||
|
2011
|
|
2010
|
||||
Net income (loss)
|
$
|
17.1
|
|
|
$
|
(29.2
|
)
|
Depreciation and amortization
|
204.9
|
|
|
209.4
|
|
||
Income tax expense (benefit)
|
11.2
|
|
|
(7.8
|
)
|
||
Interest expense, net
|
324.2
|
|
|
391.9
|
|
||
EBITDA
|
557.4
|
|
|
564.3
|
|
||
|
|
|
|
||||
Adjustments:
|
|
|
|
||||
Non-cash equity-based compensation
|
19.5
|
|
|
11.5
|
|
||
Sponsor fee
|
5.0
|
|
|
5.0
|
|
||
Consulting and debt-related professional fees
|
5.1
|
|
|
15.1
|
|
||
Net loss (gain) on extinguishments of long-term debt
|
118.9
|
|
|
(2.0
|
)
|
||
Other adjustments
(1)
|
11.4
|
|
|
7.9
|
|
||
Total adjustments
|
159.9
|
|
|
37.5
|
|
||
|
|
|
|
||||
Adjusted EBITDA
|
$
|
717.3
|
|
|
$
|
601.8
|
|
|
Year Ended December 31, 2010
|
|
Year Ended December 31, 2009
|
|
|
|
|
|||||||||||||
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollar Change
|
|
Percent
Change (1) |
|||||||||
Corporate
|
$
|
4,833.6
|
|
|
54.9
|
%
|
|
$
|
3,818.2
|
|
|
53.3
|
%
|
|
$
|
1,015.4
|
|
|
26.6
|
%
|
Public
|
3,560.6
|
|
|
40.5
|
|
|
3,035.5
|
|
|
42.4
|
|
|
525.1
|
|
|
17.3
|
|
|||
Other
|
407.0
|
|
|
4.6
|
|
|
308.9
|
|
|
4.3
|
|
|
98.0
|
|
|
31.8
|
|
|||
Total net sales
|
$
|
8,801.2
|
|
|
100.0
|
%
|
|
$
|
7,162.6
|
|
|
100.0
|
%
|
|
$
|
1,638.5
|
|
|
22.9
|
%
|
(1)
|
There were 254 selling days in both the years ended December 31, 2010 and 2009.
|
(in millions)
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||
|
|
2010
|
|
2009
|
|
Dollar Change
|
|
Percent Change
|
|||||||
Corporate:
|
|
|
|
|
|
|
|
|
|||||||
Medium / Large
|
|
$
|
3,867.3
|
|
|
$
|
3,014.8
|
|
|
$
|
852.5
|
|
|
28.3
|
%
|
Small Business
|
|
966.3
|
|
|
803.4
|
|
|
162.9
|
|
|
20.3
|
|
|||
Total Corporate
|
|
$
|
4,833.6
|
|
|
$
|
3,818.2
|
|
|
$
|
1,015.4
|
|
|
26.6
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Public:
|
|
|
|
|
|
|
|
|
|||||||
Government
|
|
$
|
1,368.6
|
|
|
$
|
1,270.7
|
|
|
$
|
97.9
|
|
|
7.7
|
%
|
Education
|
|
1,200.6
|
|
|
1,040.5
|
|
|
160.1
|
|
|
15.4
|
|
|||
Healthcare
|
|
991.4
|
|
|
724.3
|
|
|
267.1
|
|
|
36.9
|
|
|||
Total Public
|
|
$
|
3,560.6
|
|
|
$
|
3,035.5
|
|
|
$
|
525.1
|
|
|
17.3
|
%
|
|
|
Year Ended December 31, 2010
|
|
Year Ended December 31, 2009
|
|
|
|||||||||||
|
|
Dollars in
Millions
|
|
Operating
Margin
Percentage
|
|
Dollars in
Millions
|
|
Operating
Margin
Percentage
|
|
Percent Change
in Income (Loss)
from Operations
|
|||||||
Segments:
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
|
$
|
256.2
|
|
|
5.3
|
%
|
|
$
|
(56.7
|
)
|
|
(1.5
|
)%
|
|
551.8
|
%
|
Public
|
|
193.0
|
|
|
5.4
|
|
|
150.7
|
|
|
5.0
|
|
|
28.0
|
|
||
Other
|
|
14.3
|
|
|
3.5
|
|
|
(23.2
|
)
|
|
(7.5
|
)
|
|
161.6
|
|
||
Headquarters
(2)
|
|
(110.8
|
)
|
|
nm
|
|
|
(102.7
|
)
|
|
nm
|
|
|
(7.8
|
)
|
||
Total income (loss) from operations
|
|
$
|
352.7
|
|
|
4.0
|
%
|
|
$
|
(31.9
|
)
|
|
(0.4
|
)%
|
|
1,205.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Goodwill impairment included in loss from operations:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
(212.4
|
)
|
|
(5.6
|
)%
|
|
nm
|
|
Public
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
nm
|
|
||
Other
|
|
—
|
|
|
—
|
|
|
(28.3
|
)
|
|
(9.2
|
)
|
|
nm
|
|
||
Total goodwill impairment
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
(241.8
|
)
|
|
(3.4
|
)%
|
|
nm
|
|
(1)
|
Segment income (loss) from operations includes the segment’s direct operating income (loss) and allocations for Headquarters’ costs, allocations for logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors.
|
(2)
|
Includes Headquarters’ function costs that are not allocated to the segments.
|
(in millions)
|
Year Ended December 31,
|
||||||
|
2010
|
|
2009
|
||||
Net loss
|
$
|
(29.2
|
)
|
|
$
|
(373.4
|
)
|
Depreciation and amortization
|
209.4
|
|
|
218.2
|
|
||
Income tax benefit
|
(7.8
|
)
|
|
(87.8
|
)
|
||
Interest expense, net
|
391.9
|
|
|
431.7
|
|
||
EBITDA
|
564.3
|
|
|
188.7
|
|
||
|
|
|
|
||||
Adjustments:
|
|
|
|
||||
Goodwill impairment
|
—
|
|
|
241.8
|
|
||
Non-cash equity-based compensation
|
11.5
|
|
|
15.9
|
|
||
Sponsor fee
|
5.0
|
|
|
5.0
|
|
||
Consulting and debt-related professional fees
|
15.1
|
|
|
14.1
|
|
||
Net gain on extinguishments of long-term debt
|
(2.0
|
)
|
|
—
|
|
||
Other adjustments
(1)
|
7.9
|
|
|
(0.1
|
)
|
||
Total adjustments
|
37.5
|
|
|
276.7
|
|
||
|
|
|
|
||||
Adjusted EBITDA
|
$
|
601.8
|
|
|
$
|
465.4
|
|
(1)
|
Other adjustments include certain severance and retention costs, equity investment income and the gain related to the sale of Informacast software and equipment in 2009.
|
(in millions)
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
214.7
|
|
|
$
|
423.7
|
|
|
$
|
107.6
|
|
Investing activities
|
(56.0
|
)
|
|
(125.4
|
)
|
|
(82.6
|
)
|
|||
Financing activities
|
(95.4
|
)
|
|
(350.1
|
)
|
|
(31.9
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
0.4
|
|
|
0.5
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
63.3
|
|
|
$
|
(51.4
|
)
|
|
$
|
(6.4
|
)
|
(1)
|
Represents the rolling three month average of the balance of trade accounts receivable, net at the end of the period divided by average daily net sales. Also incorporates components of other miscellaneous receivables.
|
(2)
|
Represents the rolling three month average of the balance of inventory at the end of the period divided by average daily cost of goods sold.
|
(3)
|
Represents the rolling three month average of the combined balance of accounts payable-trade, excluding cash overdrafts, and accounts payable-inventory financing at the end of the period divided by average daily cost of goods sold.
|
(in millions)
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Senior secured asset-based revolving credit facility
|
$
|
—
|
|
|
$
|
188.1
|
|
Senior secured term loan facility
|
1,540.5
|
|
|
1,672.5
|
|
||
Senior secured notes due 2018
|
500.0
|
|
|
500.0
|
|
||
Senior notes due 2015
|
129.0
|
|
|
1,207.0
|
|
||
Senior notes due 2019
|
1,175.0
|
|
|
—
|
|
||
Senior subordinated notes due 2017
|
721.5
|
|
|
721.5
|
|
||
Total long-term debt
|
4,066.0
|
|
|
4,289.1
|
|
||
Less current maturities of long-term debt
|
(201.0
|
)
|
|
(132.0
|
)
|
||
Long-term debt, excluding current maturities
|
$
|
3,865.0
|
|
|
$
|
4,157.1
|
|
(in millions)
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
< 1 year
|
|
1-3 years
|
|
4-5 years
|
|
> 5 years
|
||||||||||
Revolving Loan
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan
(2)
|
1,795.1
|
|
|
255.4
|
|
|
525.2
|
|
|
74.6
|
|
|
939.9
|
|
|||||
Senior Secured Notes
(3)
|
780.0
|
|
|
40.0
|
|
|
80.0
|
|
|
80.0
|
|
|
580.0
|
|
|||||
Senior Notes
(3)
|
187.2
|
|
|
14.6
|
|
|
29.2
|
|
|
143.4
|
|
|
—
|
|
|||||
2019 Senior Notes
(3)
|
1,924.1
|
|
|
99.9
|
|
|
199.8
|
|
|
199.8
|
|
|
1,424.6
|
|
|||||
Senior Subordinated Notes
(3)
|
1,263.4
|
|
|
90.4
|
|
|
180.9
|
|
|
180.9
|
|
|
811.2
|
|
|||||
Operating leases
(4)
|
118.5
|
|
|
17.5
|
|
|
35.1
|
|
|
29.2
|
|
|
36.7
|
|
|||||
Asset retirement obligations
(5)
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|||||
Total
|
$
|
6,068.8
|
|
|
$
|
517.8
|
|
|
$
|
1,050.2
|
|
|
$
|
708.4
|
|
|
$
|
3,792.4
|
|
(1)
|
Includes only principal payments. Excludes interest payments and fees related to this facility because of variability with respect to the timing of advances and repayments.
|
(2)
|
Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest payments for the variable rate debt were calculated using interest rates as of December 31, 2011. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness.
|
(3)
|
Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest on the Senior Secured Notes, Senior Notes, 2019 Senior Notes and Senior Subordinated Notes is calculated using the stated interest rate. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness. See "Subsequent Events" for a description of refinancing transactions entered into in 2012.
|
(4)
|
Includes the minimum lease payments for non-cancelable leases for properties and equipment used in our operations.
|
(5)
|
Represent commitments to return property subject to operating leases to original condition upon lease termination.
|
|
Page
|
/s/ Ernst & Young LLP
|
Chicago, Illinois
|
March 9, 2012
|
/s/ PricewaterhouseCoopers LLP
|
Chicago, IL
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
|
|||||||
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
99.9
|
|
|
$
|
36.6
|
|
Accounts receivable, net of allowance for doubtful accounts of $5.4 and $5.0, respectively
|
1,254.9
|
|
|
1,091.5
|
|
||
Merchandise inventory
|
321.7
|
|
|
292.8
|
|
||
Miscellaneous receivables
|
143.6
|
|
|
192.8
|
|
||
Deferred income taxes
|
24.6
|
|
|
52.8
|
|
||
Prepaid expenses and other
|
34.7
|
|
|
35.8
|
|
||
Total current assets
|
1,879.4
|
|
|
1,702.3
|
|
||
Property and equipment, net
|
154.3
|
|
|
158.1
|
|
||
Goodwill
|
2,208.4
|
|
|
2,209.1
|
|
||
Other intangible assets, net
|
1,636.0
|
|
|
1,791.2
|
|
||
Deferred financing costs, net
|
68.5
|
|
|
79.7
|
|
||
Fair value of interest rate cap agreements
|
0.7
|
|
|
1.2
|
|
||
Other assets
|
2.3
|
|
|
2.2
|
|
||
Total assets
|
$
|
5,949.6
|
|
|
$
|
5,943.8
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Deficit
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable-trade
|
$
|
517.8
|
|
|
$
|
537.1
|
|
Accounts payable-inventory financing
|
278.7
|
|
|
28.2
|
|
||
Current maturities of long-term debt and capital leases
|
201.0
|
|
|
132.6
|
|
||
Fair value of interest rate swap agreements
|
—
|
|
|
2.8
|
|
||
Deferred revenue
|
27.8
|
|
|
28.6
|
|
||
Accrued expenses:
|
|
|
|
||||
Compensation
|
106.6
|
|
|
91.3
|
|
||
Interest
|
54.9
|
|
|
64.3
|
|
||
Sales taxes
|
23.1
|
|
|
23.2
|
|
||
Advertising
|
38.8
|
|
|
27.0
|
|
||
Income taxes
|
—
|
|
|
4.2
|
|
||
Other
|
92.6
|
|
|
87.6
|
|
||
Total current liabilities
|
1,341.3
|
|
|
1,026.9
|
|
||
Long-term liabilities:
|
|
|
|
||||
Debt and capital leases
|
3,865.0
|
|
|
4,157.4
|
|
||
Deferred income taxes
|
692.0
|
|
|
730.3
|
|
||
Accrued interest
|
13.0
|
|
|
32.3
|
|
||
Other liabilities
|
45.6
|
|
|
40.4
|
|
||
Total long-term liabilities
|
4,615.6
|
|
|
4,960.4
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Shareholders’ deficit:
|
|
|
|
||||
Class A common shares, $0.01 par value, 100,000 shares authorized, issued, and outstanding
|
—
|
|
|
—
|
|
||
Class B common shares, $0.01 par value, 1,900,000 shares authorized; 913,063 and 910,735 shares issued, respectively; 912,706 and 910,735 shares outstanding, respectively
|
—
|
|
|
—
|
|
||
Paid-in capital
|
2,186.1
|
|
|
2,166.7
|
|
||
Accumulated deficit
|
(2,191.3
|
)
|
|
(2,208.0
|
)
|
||
Accumulated other comprehensive loss
|
(2.1
|
)
|
|
(2.2
|
)
|
||
Total shareholders’ deficit
|
(7.3
|
)
|
|
(43.5
|
)
|
||
Total liabilities and shareholders’ deficit
|
$
|
5,949.6
|
|
|
$
|
5,943.8
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Net sales
|
$
|
9,602.4
|
|
|
$
|
8,801.2
|
|
|
$
|
7,162.6
|
|
Cost of sales
|
8,015.0
|
|
|
7,410.4
|
|
|
6,029.7
|
|
|||
|
|
|
|
|
|
|
|||||
Gross profit
|
1,587.4
|
|
|
1,390.8
|
|
|
1,132.9
|
|
|||
|
|
|
|
|
|
|
|||||
Selling and administrative expenses
|
994.0
|
|
|
932.1
|
|
|
821.1
|
|
|||
Advertising expense
|
122.7
|
|
|
106.0
|
|
|
101.9
|
|
|||
Goodwill impairment
|
—
|
|
|
—
|
|
|
241.8
|
|
|||
|
|
|
|
|
|
|
|||||
Income (loss) from operations
|
470.7
|
|
|
352.7
|
|
|
(31.9
|
)
|
|||
|
|
|
|
|
|
||||||
Interest expense, net
|
(324.2
|
)
|
|
(391.9
|
)
|
|
(431.7
|
)
|
|||
Net (loss) gain on extinguishments of long-term debt
|
(118.9
|
)
|
|
2.0
|
|
|
—
|
|
|||
Other income, net
|
0.7
|
|
|
0.2
|
|
|
2.4
|
|
|||
|
|
|
|
|
|
|
|||||
Income (loss) before income taxes
|
28.3
|
|
|
(37.0
|
)
|
|
(461.2
|
)
|
|||
|
|
|
|
|
|
|
|||||
Income tax (expense) benefit
|
(11.2
|
)
|
|
7.8
|
|
|
87.8
|
|
|||
|
|
|
|
|
|
|
|||||
Net income (loss)
|
$
|
17.1
|
|
|
$
|
(29.2
|
)
|
|
$
|
(373.4
|
)
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) EQUITY
(in millions)
|
|||||||||||||||||||||||||||
|
Total
Shareholders’
(Deficit)
Equity
|
|
Class A
Common
Shares
|
|
Class B
Common
Shares
|
|
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Comprehensive
(Loss) Income
|
||||||||||||||
Balance at December 31, 2008
|
$
|
262.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,140.8
|
|
|
$
|
(1,805.4
|
)
|
|
$
|
(73.2
|
)
|
|
|
||
Equity-based compensation expense
|
15.9
|
|
|
—
|
|
|
—
|
|
|
15.9
|
|
|
—
|
|
|
—
|
|
|
|
||||||||
Investment from CDW Holdings LLC
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
|
||||||||
Accrued charitable contribution related to the MPK Coworker Incentive Plan II, net of tax
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
|
||||||||
Net loss
|
(373.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(373.4
|
)
|
|
—
|
|
|
$
|
(373.4
|
)
|
||||||
Change in unrealized loss on interest rate swap agreements, net of tax
|
(13.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
|
(13.3
|
)
|
|||||||
Reclassification of realized loss on interest rate swap agreements from accumulated other comprehensive loss to net loss, net of tax
|
56.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56.3
|
|
|
56.3
|
|
|||||||
Foreign currency translation adjustment
|
8.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.9
|
|
|
8.9
|
|
|||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(321.5
|
)
|
||||||||||||
Balance at December 31, 2009
|
$
|
(44.7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,155.4
|
|
|
$
|
(2,178.8
|
)
|
|
$
|
(21.3
|
)
|
|
|
||
Equity-based compensation expense
|
11.5
|
|
|
—
|
|
|
—
|
|
|
11.5
|
|
|
—
|
|
|
—
|
|
|
|
||||||||
Accrued charitable contribution related to the MPK Coworker Incentive Plan II, net of tax
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
|
||||||||
Net loss
|
(29.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.2
|
)
|
|
—
|
|
|
$
|
(29.2
|
)
|
||||||
Change in unrealized loss on interest rate swap agreements, net of tax
|
(32.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.1
|
)
|
|
(32.1
|
)
|
|||||||
Reclassification of realized loss on interest rate swap agreements from accumulated other comprehensive loss to net loss, net of tax
|
47.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47.3
|
|
|
47.3
|
|
|||||||
Foreign currency translation adjustment
|
3.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|
3.9
|
|
|||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(10.1
|
)
|
||||||||||||
Balance at December 31, 2010
|
$
|
(43.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,166.7
|
|
|
$
|
(2,208.0
|
)
|
|
$
|
(2.2
|
)
|
|
|
||
Equity-based compensation expense
|
19.5
|
|
|
—
|
|
|
—
|
|
|
19.5
|
|
|
—
|
|
|
—
|
|
|
|
||||||||
Investment from CDW Holdings LLC
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
|
||||||||
Repurchase of Class B Common Shares
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
|
||||||||
Accrued charitable contribution related to the MPK Coworker Incentive Plan II, net of tax
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
|
||||||||
Net income
|
17.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.1
|
|
|
—
|
|
|
$
|
17.1
|
|
||||||
Reclassification of realized loss on interest rate swap agreements from accumulated other comprehensive loss to net income, net of tax
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
1.9
|
|
|||||||
Foreign currency translation adjustment
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
(1.8
|
)
|
|||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17.2
|
|
||||||||||||
Balance at December 31, 2011
|
$
|
(7.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,186.1
|
|
|
$
|
(2,191.3
|
)
|
|
$
|
(2.1
|
)
|
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
17.1
|
|
|
$
|
(29.2
|
)
|
|
$
|
(373.4
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
204.9
|
|
|
209.4
|
|
|
218.2
|
|
|||
Goodwill impairment
|
—
|
|
|
—
|
|
|
241.8
|
|
|||
Equity-based compensation expense
|
19.5
|
|
|
11.5
|
|
|
15.9
|
|
|||
Deferred income taxes
|
(10.2
|
)
|
|
(4.3
|
)
|
|
(94.4
|
)
|
|||
Allowance for doubtful accounts
|
0.4
|
|
|
(1.3
|
)
|
|
(0.2
|
)
|
|||
Amortization of deferred financing costs
|
15.7
|
|
|
18.0
|
|
|
16.2
|
|
|||
Net loss (gain) on extinguishments of long-term debt
|
118.9
|
|
|
(2.0
|
)
|
|
—
|
|
|||
Realized loss on interest rate swap agreements
|
2.8
|
|
|
51.5
|
|
|
103.2
|
|
|||
Mark to market loss on interest rate derivatives
|
4.2
|
|
|
4.7
|
|
|
—
|
|
|||
Net loss (gain) on sale and disposals of assets
|
0.3
|
|
|
0.7
|
|
|
(1.7
|
)
|
|||
Other
|
(0.6
|
)
|
|
(0.6
|
)
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(165.3
|
)
|
|
(81.5
|
)
|
|
(131.3
|
)
|
|||
Merchandise inventory
|
(29.0
|
)
|
|
(34.9
|
)
|
|
(15.0
|
)
|
|||
Other assets
|
50.3
|
|
|
(61.9
|
)
|
|
3.2
|
|
|||
Accounts payable-trade
|
(19.8
|
)
|
|
269.3
|
|
|
76.5
|
|
|||
Other current liabilities
|
21.5
|
|
|
77.8
|
|
|
3.9
|
|
|||
Long-term liabilities
|
(16.0
|
)
|
|
(3.5
|
)
|
|
44.7
|
|
|||
Net cash provided by operating activities
|
214.7
|
|
|
423.7
|
|
|
107.6
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(45.7
|
)
|
|
(41.5
|
)
|
|
(15.6
|
)
|
|||
Cash settlements on interest rate swap agreements
|
(6.6
|
)
|
|
(78.2
|
)
|
|
(72.2
|
)
|
|||
Premium payments on interest rate cap agreements
|
(3.7
|
)
|
|
(5.9
|
)
|
|
—
|
|
|||
Purchases of marketable securities
|
—
|
|
|
—
|
|
|
(20.0
|
)
|
|||
Redemptions of marketable securities
|
—
|
|
|
—
|
|
|
20.0
|
|
|||
Proceeds from sale of assets and other
|
—
|
|
|
0.2
|
|
|
5.2
|
|
|||
Net cash used in investing activities
|
(56.0
|
)
|
|
(125.4
|
)
|
|
(82.6
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from borrowings under revolving credit facility
|
1,295.0
|
|
|
770.8
|
|
|
—
|
|
|||
Repayments of borrowings under revolving credit facility
|
(1,483.2
|
)
|
|
(1,074.1
|
)
|
|
—
|
|
|||
Repayments of long-term debt
|
(132.0
|
)
|
|
(16.5
|
)
|
|
(11.0
|
)
|
|||
Proceeds from issuance of long-term debt
|
1,175.0
|
|
|
500.0
|
|
|
—
|
|
|||
Payments to extinguish long-term debt
|
(1,175.0
|
)
|
|
(518.6
|
)
|
|
—
|
|
|||
Payments of debt financing costs
|
(26.3
|
)
|
|
(14.3
|
)
|
|
(11.3
|
)
|
|||
Investment from CDW Holdings LLC
|
1.0
|
|
|
—
|
|
|
0.1
|
|
|||
Net change in accounts payable-inventory financing
|
250.5
|
|
|
3.2
|
|
|
(9.1
|
)
|
|||
Repurchase of Class B common shares
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|||
Principal payments under capital lease obligations
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Net cash used in financing activities
|
(95.4
|
)
|
|
(350.1
|
)
|
|
(31.9
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
0.4
|
|
|
0.5
|
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
63.3
|
|
|
(51.4
|
)
|
|
(6.4
|
)
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents – beginning of period
|
36.6
|
|
|
88.0
|
|
|
94.4
|
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents – end of period
|
$
|
99.9
|
|
|
$
|
36.6
|
|
|
$
|
88.0
|
|
|
|
|
|
|
|
||||||
Supplementary disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid, including cash settlements on interest rate swap agreements
|
$
|
(332.9
|
)
|
|
$
|
(377.0
|
)
|
|
$
|
(368.8
|
)
|
Taxes refunded (paid), net
|
$
|
20.9
|
|
|
$
|
(48.0
|
)
|
|
$
|
(11.7
|
)
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Investment in equity method investee
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
Capital expenditures accrued in accounts payable-trade
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
1.
|
Description of Business and Summary of Significant Accounting Policies
|
|
|
Year Ended December 31, 2010
|
||||||||||
(in millions)
|
|
As Previously
Reported |
|
Revision
|
|
As Revised
|
||||||
Net cash provided by operating activities
|
|
$
|
426.9
|
|
|
$
|
(3.2
|
)
|
|
$
|
423.7
|
|
Net cash used in financing activities
|
|
$
|
(353.3
|
)
|
|
$
|
3.2
|
|
|
$
|
(350.1
|
)
|
Net decrease in cash and cash equivalents
|
|
$
|
(51.4
|
)
|
|
$
|
—
|
|
|
$
|
(51.4
|
)
|
|
|
Year Ended December 31, 2009
|
||||||||||
(in millions)
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
||||||
Net cash provided by operating activities
|
|
$
|
98.5
|
|
|
$
|
9.1
|
|
|
$
|
107.6
|
|
Net cash used in financing activities
|
|
$
|
(22.8
|
)
|
|
$
|
(9.1
|
)
|
|
$
|
(31.9
|
)
|
Net decrease in cash and cash equivalents
|
|
$
|
(6.4
|
)
|
|
$
|
—
|
|
|
$
|
(6.4
|
)
|
Classification
|
Estimated
Useful Lives
|
Machinery and equipment
|
5 to 10 years
|
Building and leasehold improvements
|
5 to 25 years
|
Computer and data processing equipment
|
3 to 5 years
|
Computer software
|
3 to 5 years
|
Furniture and fixtures
|
5 to 10 years
|
Classification
|
Estimated
Useful Lives
|
Customer relationships
|
11 to 14 years
|
Trade name
|
20 years
|
Internally developed software
|
3 to 5 years
|
Other
|
1 to 10 years
|
(in millions)
|
December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Unrealized loss on interest rate swap agreements, net of taxes of $0, $0.9 and $27.3, respectively
|
$
|
—
|
|
|
$
|
(1.9
|
)
|
|
$
|
(17.1
|
)
|
Foreign currency translation adjustment
|
(2.1
|
)
|
|
(0.3
|
)
|
|
(4.2
|
)
|
|||
Accumulated other comprehensive loss
|
$
|
(2.1
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(21.3
|
)
|
2.
|
Recent Accounting Pronouncements
|
3.
|
Property and Equipment
|
(in millions)
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Land
|
$
|
27.7
|
|
|
$
|
27.7
|
|
Machinery and equipment
|
48.3
|
|
|
47.1
|
|
||
Building and leasehold improvements
|
102.1
|
|
|
97.3
|
|
||
Computer and data processing equipment
|
49.7
|
|
|
44.8
|
|
||
Computer software
|
29.2
|
|
|
29.3
|
|
||
Furniture and fixtures
|
20.3
|
|
|
17.0
|
|
||
Construction in progress
|
17.0
|
|
|
15.8
|
|
||
Total property and equipment
|
294.3
|
|
|
279.0
|
|
||
Less accumulated depreciation
|
140.0
|
|
|
120.9
|
|
||
Net property and equipment
|
$
|
154.3
|
|
|
$
|
158.1
|
|
4.
|
Goodwill and Other Intangible Assets
|
(in millions)
|
Corporate
|
|
Public
|
|
Other
(1)
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balances as of December 31, 2009:
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
2,794.4
|
|
|
$
|
1,261.4
|
|
|
$
|
105.4
|
|
|
$
|
4,161.2
|
|
Accumulated impairment charges
|
(1,571.4
|
)
|
|
(354.1
|
)
|
|
(28.3
|
)
|
|
(1,953.8
|
)
|
||||
|
$
|
1,223.0
|
|
|
$
|
907.3
|
|
|
$
|
77.1
|
|
|
$
|
2,207.4
|
|
|
|
|
|
|
|
|
|
||||||||
2010 Activity:
|
|
|
|
|
|
|
|
||||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
|
|
|
|
|
|
|
||||||||
Balances as of December 31, 2010:
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
2,794.4
|
|
|
$
|
1,261.4
|
|
|
$
|
107.1
|
|
|
$
|
4,162.9
|
|
Accumulated impairment charges
|
(1,571.4
|
)
|
|
(354.1
|
)
|
|
(28.3
|
)
|
|
(1,953.8
|
)
|
||||
|
$
|
1,223.0
|
|
|
$
|
907.3
|
|
|
$
|
78.8
|
|
|
$
|
2,209.1
|
|
|
|
|
|
|
|
|
|
||||||||
2011 Activity:
|
|
|
|
|
|
|
|
||||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.7
|
)
|
|
$
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balances as of December 31, 2011:
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
2,794.4
|
|
|
$
|
1,261.4
|
|
|
$
|
106.4
|
|
|
$
|
4,162.2
|
|
Accumulated impairment charges
|
(1,571.4
|
)
|
|
(354.1
|
)
|
|
(28.3
|
)
|
|
(1,953.8
|
)
|
||||
|
$
|
1,223.0
|
|
|
$
|
907.3
|
|
|
$
|
78.1
|
|
|
$
|
2,208.4
|
|
(in millions)
|
|
||
Years ended December 31,
|
|
||
2012
|
$
|
174.9
|
|
2013
|
171.2
|
|
|
2014
|
167.5
|
|
|
2015
|
163.0
|
|
|
2016
|
161.5
|
|
5.
|
Inventory Financing Agreements
|
6.
|
Lease Commitments
|
(in millions)
|
|
||
Year Ended December 31,
|
|||
2012
|
$
|
17.5
|
|
2013
|
17.6
|
|
|
2014
|
17.5
|
|
|
2015
|
16.8
|
|
|
2016
|
12.4
|
|
|
Thereafter
|
36.7
|
|
|
Total future minimum lease payments
|
$
|
118.5
|
|
7.
|
Long-Term Debt
|
(in millions)
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Senior secured asset-based revolving credit facility
|
$
|
—
|
|
|
$
|
188.1
|
|
Senior secured term loan facility
|
1,540.5
|
|
|
1,672.5
|
|
||
Senior secured notes due 2018
|
500.0
|
|
|
500.0
|
|
||
Senior notes due 2015
|
129.0
|
|
|
1,207.0
|
|
||
Senior notes due 2019
|
1,175.0
|
|
|
—
|
|
||
Senior subordinated notes due 2017
|
721.5
|
|
|
721.5
|
|
||
Total long-term debt
|
4,066.0
|
|
|
4,289.1
|
|
||
Less current maturities of long-term debt
|
(201.0
|
)
|
|
(132.0
|
)
|
||
Long-term debt, excluding current maturities
|
$
|
3,865.0
|
|
|
$
|
4,157.1
|
|
(in millions)
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Beginning Balance
|
$
|
79.7
|
|
|
$
|
91.2
|
|
Additional costs capitalized
|
26.3
|
|
|
14.3
|
|
||
Amortization expense
|
(15.7
|
)
|
|
(18.0
|
)
|
||
Write-off of unamortized deferred financing costs
|
(21.8
|
)
|
|
(7.8
|
)
|
||
|
|
|
|
||||
Ending Balance
|
$
|
68.5
|
|
|
$
|
79.7
|
|
8.
|
Derivative Instruments and Hedging Activities
|
(in millions)
|
Balance Sheet Location
|
|
Derivative Assets
|
|
Derivative
Liabilities
|
||||||||||||
|
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate cap agreements
|
Fair value of interest rate cap agreements
|
|
$
|
0.7
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap agreements
|
Fair value of interest rate swap agreements
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
Fair value of interest rate swap agreements
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
||||||
(in millions)
|
Amount of Loss Recognized in
Interest Expense, net
|
||||||||||||
|
2011
|
|
|
2010
|
|
|
2009
|
||||||
Interest rate cap agreements
|
$
|
(4.2
|
)
|
|
|
$
|
(4.7
|
)
|
|
|
$
|
—
|
|
Total
|
$
|
(4.2
|
)
|
|
|
$
|
(4.7
|
)
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
(in millions)
|
Amount of Loss Recognized in
Other Comprehensive Income (Loss)
(Effective Portion)
|
||||||||||||
|
2011
|
|
|
2010
|
|
|
2009
|
||||||
Interest rate swap agreements
|
$
|
—
|
|
|
|
$
|
(35.7
|
)
|
(2)
|
|
$
|
(21.6
|
)
|
Total
|
$
|
—
|
|
|
|
$
|
(35.7
|
)
|
|
|
$
|
(21.6
|
)
|
|
|
|
|
|
|
|
|
||||||
|
Amount of Loss Reclassified
from Accumulated Other Comprehensive Loss
into Interest Expense, net
(Effective Portion)
|
||||||||||||
|
2011
|
|
|
2010
|
|
|
2009
|
||||||
Interest rate swap agreements
|
$
|
(2.8
|
)
|
(1)
|
|
$
|
(77.3
|
)
|
(3)
|
|
$
|
(74.5
|
)
|
Total
|
$
|
(2.8
|
)
|
|
|
$
|
(77.3
|
)
|
|
|
$
|
(74.5
|
)
|
|
|
|
|
|
|
|
|
||||||
|
Amount of Gain (Loss)
Recognized in Interest Expense,
net
(Ineffective Portion)
|
||||||||||||
|
2011
|
|
|
2010
|
|
|
2009
|
||||||
Interest rate swap agreements
|
$
|
—
|
|
|
|
$
|
25.8
|
|
(4)
|
|
$
|
(28.7
|
)
|
Total
|
$
|
—
|
|
|
|
$
|
25.8
|
|
|
|
$
|
(28.7
|
)
|
(1)
|
The Company reclassified realized losses of $2.8 million from accumulated other comprehensive loss to net income, or $1.9 million net of tax as reflected on the Company's consolidated statement of shareholders' (deficit) equity.
|
(2)
|
The Company recorded changes in unrealized losses of $35.7 million in accumulated other comprehensive loss. A net amount of $32.1 million was reflected in the consolidated statement of shareholders’ (deficit) equity, primarily due to a deferred tax adjustment of $3.8 million applied to a portion of this amount.
|
(3)
|
The Company reclassified realized losses of $77.3 million from accumulated other comprehensive loss to net loss, or $47.3 million net of tax as reflected in the consolidated statement of shareholders’ (deficit) equity.
|
(4)
|
The Company recorded a net, non-cash gain of $25.8 million in earnings, primarily comprised of the $62.2 million gain representing the cumulative change in the fair value of the amended swap, partially offset by the $38.2 million of loss reclassified to earnings related to the discontinued and de-designated swaps.
|
9.
|
Fair Value Measurements
|
(in millions)
|
|
|
|
|
|
|
|
||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Interest rate cap agreements
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
10.
|
Income Taxes
|
(in millions)
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Domestic
|
$
|
11.4
|
|
|
$
|
(48.8
|
)
|
|
$
|
(468.2
|
)
|
Foreign
|
16.9
|
|
|
11.8
|
|
|
7.0
|
|
|||
Total
|
$
|
28.3
|
|
|
$
|
(37.0
|
)
|
|
$
|
(461.2
|
)
|
(in millions)
|
December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
17.9
|
|
|
$
|
(10.6
|
)
|
|
$
|
(7.3
|
)
|
State
|
(0.6
|
)
|
|
4.3
|
|
|
12.8
|
|
|||
Foreign
|
4.1
|
|
|
2.8
|
|
|
1.1
|
|
|||
Total current
|
21.4
|
|
|
(3.5
|
)
|
|
6.6
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Domestic
|
(9.9
|
)
|
|
(3.5
|
)
|
|
(94.0
|
)
|
|||
Foreign
|
(0.3
|
)
|
|
(0.8
|
)
|
|
(0.4
|
)
|
|||
Total deferred
|
(10.2
|
)
|
|
(4.3
|
)
|
|
(94.4
|
)
|
|||
Income tax expense (benefit)
|
$
|
11.2
|
|
|
$
|
(7.8
|
)
|
|
$
|
(87.8
|
)
|
(dollars in millions)
|
December 31,
|
|||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|||||||||||||||
Statutory federal income tax rate
|
$
|
9.9
|
|
|
35.0
|
%
|
|
$
|
(13.0
|
)
|
|
35.0
|
%
|
|
$
|
(161.4
|
)
|
|
35.0
|
%
|
State taxes, net of federal effect
|
(3.4
|
)
|
|
(11.8
|
)
|
|
0.9
|
|
|
(2.5
|
)
|
|
(11.6
|
)
|
|
2.5
|
|
|||
Equity-based compensation
|
5.1
|
|
|
17.9
|
|
|
3.9
|
|
|
(10.4
|
)
|
|
3.1
|
|
|
(0.7
|
)
|
|||
Effect of rates different than statutory
|
(1.1
|
)
|
|
(4.0
|
)
|
|
(0.4
|
)
|
|
1.0
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Valuation allowance
|
(0.9
|
)
|
|
(3.1
|
)
|
|
0.9
|
|
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|||
Goodwill impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84.6
|
|
|
(18.3
|
)
|
|||
Other
|
1.6
|
|
|
5.7
|
|
|
(0.1
|
)
|
|
0.5
|
|
|
(2.4
|
)
|
|
0.5
|
|
|||
Effective tax rate
|
$
|
11.2
|
|
|
39.7
|
%
|
|
$
|
(7.8
|
)
|
|
21.1
|
%
|
|
$
|
(87.8
|
)
|
|
19.0
|
%
|
(in millions)
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Deferred Tax Assets:
|
|
|
|
||||
Deferred interest
|
$
|
63.6
|
|
|
$
|
75.3
|
|
Federal and state net operating loss and credit carryforwards, net
|
14.6
|
|
|
45.7
|
|
||
Payroll and benefits
|
12.9
|
|
|
8.8
|
|
||
Charitable contribution carryforward
|
9.0
|
|
|
9.9
|
|
||
Equity compensation plans
|
7.5
|
|
|
6.1
|
|
||
Accounts receivable
|
4.4
|
|
|
3.6
|
|
||
Deferred financing costs
|
2.7
|
|
|
6.5
|
|
||
Interest rate caps/hedge agreements
|
2.6
|
|
|
3.7
|
|
||
Trade credits
|
2.4
|
|
|
4.9
|
|
||
Other
|
10.3
|
|
|
9.6
|
|
||
Total deferred tax assets
|
130.0
|
|
|
174.1
|
|
||
|
|
|
|
||||
Deferred Tax Liabilities:
|
|
|
|
||||
Software and intangibles
|
607.7
|
|
|
676.9
|
|
||
Deferred income
|
146.4
|
|
|
146.2
|
|
||
Property and equipment
|
35.1
|
|
|
18.9
|
|
||
Other
|
8.2
|
|
|
8.7
|
|
||
Total deferred tax liabilities
|
797.4
|
|
|
850.7
|
|
||
|
|
|
|
||||
Deferred tax asset valuation allowance
|
—
|
|
|
0.9
|
|
||
|
|
|
|
||||
Net deferred tax liability
|
$
|
667.4
|
|
|
$
|
677.5
|
|
(in millions)
|
2011
|
|
2010
|
|
2009
|
||||||
Balance as of January 1
|
$
|
—
|
|
|
$
|
11.3
|
|
|
$
|
4.8
|
|
Additions for tax positions related to current year
|
—
|
|
|
—
|
|
|
11.3
|
|
|||
Additions for tax positions with respect to prior years
|
—
|
|
|
—
|
|
|
0.3
|
|
|||
Reductions for tax positions with respect to prior years
|
—
|
|
|
(11.3
|
)
|
|
(3.8
|
)
|
|||
Reductions for tax positions as a result of:
|
|
|
|
|
|
||||||
Settlements
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|||
Lapse of statute of limitations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.3
|
|
11.
|
CDW Holdings LLC Equity
|
12.
|
Equity-Based Compensation
|
|
Years Ended December 31,
|
||||||||||
Assumptions
|
2011
|
|
2010
|
|
2009
|
||||||
Weighted-Average Grant Date Fair Value
|
$
|
148.89
|
|
|
$
|
130.45
|
|
|
$
|
295.75
|
|
Weighted-Average Volatility
|
82.87
|
%
|
|
97.86
|
%
|
|
28.13
|
%
|
|||
Weighted-Average Risk-Free Rate
|
0.84
|
%
|
|
2.32
|
%
|
|
4.42
|
%
|
|||
Dividend Yield
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
Equity Awards
|
Class B
Common Units
(1)
|
|
|
MPK Plan
Units
(1) (2)
|
|
||
Outstanding at January 1, 2011
|
191,651
|
|
|
|
74,826
|
|
|
|
|
|
|
|
|
||
Granted
|
14,836
|
|
|
|
—
|
|
|
Forfeited
|
(2,714
|
)
|
|
|
(4,251
|
)
|
(3)
|
Repurchased/Settled
|
(865
|
)
|
|
|
(462
|
)
|
(4)
|
|
|
|
|
|
|
||
Outstanding at December 31, 2011
|
202,908
|
|
|
|
70,113
|
|
|
Vested at December 31, 2011
|
75,263
|
|
|
|
610
|
|
(5)
|
(1)
|
The weighted-average grant date fair market value for Class B Common Units granted during the period ended December 31, 2011 is $148.89. The weighted-average grant date fair market value for outstanding Class B Common Units inclusive of the $60.00 per unit impact of the March 2010 modification and the impact of the June 2011 modification for Mr. Edwardson is $291.68. The weighted-average grant date fair market value for outstanding MPK Plan Units is $1,000.
|
(2)
|
Represents units notionally credited to participants' accounts.
|
(3)
|
The Company contributes the fair market value of awards forfeited under the plan to a charitable foundation. The contribution is generally made in the quarter following that in which the units are forfeited. As of December 31, 2011, the Company owed a contribution for 1,685 units.
|
(4)
|
Represents Class B Common Units that were repurchased by the Company from former participants and the settlement of vested MPK Plan Units through the issuance of Class A Common Units in exchange for the vested MPK Plan Units.
|
(5)
|
Represents MPK Plan Units that have vested but not yet converted to Class A Common Units.
|
13.
|
Deferred Compensation Plan
|
14.
|
Profit Sharing and 401(k) Plan
|
15.
|
Sale of Assets
|
16.
|
Commitments and Contingencies
|
17.
|
Related Party Transactions
|
18.
|
Segment Information
|
(in millions)
|
Corporate
|
|
Public
|
|
Other
|
|
Headquarters
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2011:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
5,334.4
|
|
|
$
|
3,757.2
|
|
|
$
|
510.8
|
|
|
$
|
—
|
|
|
$
|
9,602.4
|
|
Income (loss) from operations
|
331.6
|
|
|
233.3
|
|
|
17.5
|
|
|
(111.7
|
)
|
|
470.7
|
|
|||||
Depreciation and amortization expense
|
(97.4
|
)
|
|
(43.9
|
)
|
|
(8.7
|
)
|
|
(54.9
|
)
|
|
(204.9
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2010:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
4,833.6
|
|
|
$
|
3,560.6
|
|
|
$
|
407.0
|
|
|
$
|
—
|
|
|
$
|
8,801.2
|
|
Income (loss) from operations
|
256.2
|
|
|
193.0
|
|
|
14.3
|
|
|
(110.8
|
)
|
|
352.7
|
|
|||||
Depreciation and amortization expense
|
(97.4
|
)
|
|
(44.2
|
)
|
|
(8.9
|
)
|
|
(58.9
|
)
|
|
(209.4
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2009:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,818.2
|
|
|
$
|
3,035.5
|
|
|
$
|
308.9
|
|
|
$
|
—
|
|
|
$
|
7,162.6
|
|
Income (loss) from operations
|
(56.7
|
)
|
|
150.7
|
|
|
(23.2
|
)
|
|
(102.7
|
)
|
|
(31.9
|
)
|
|||||
Depreciation and amortization expense
|
(97.5
|
)
|
|
(45.0
|
)
|
|
(8.5
|
)
|
|
(67.2
|
)
|
|
(218.2
|
)
|
|
Year Ended
December 31, 2011
|
|
Year Ended
December 31, 2010
|
|
Year Ended
December 31, 2009
|
|||||||||||||||
|
Dollars in
Millions
|
|
Percentage
of Net
Sales
|
|
Dollars in
Millions
|
|
Percentage
of Net
Sales
|
|
Dollars in
Millions
|
|
Percentage
of Net
Sales
|
|||||||||
Hardware:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Notebook/Mobile Devices
|
$
|
1,340.0
|
|
|
14.0
|
%
|
|
$
|
1,142.5
|
|
|
13.0
|
%
|
|
$
|
831.7
|
|
|
11.6
|
%
|
NetComm Products
|
1,246.4
|
|
|
13.0
|
|
|
1,149.9
|
|
|
13.1
|
|
|
874.0
|
|
|
12.2
|
|
|||
Data Storage/Drives
|
925.6
|
|
|
9.6
|
|
|
838.5
|
|
|
9.5
|
|
|
791.3
|
|
|
11.0
|
|
|||
Other Hardware
|
4,061.9
|
|
|
42.3
|
|
|
3,793.0
|
|
|
43.1
|
|
|
3,110.4
|
|
|
43.5
|
|
|||
Total Hardware
|
$
|
7,573.9
|
|
|
78.9
|
%
|
|
$
|
6,923.9
|
|
|
78.7
|
%
|
|
$
|
5,607.4
|
|
|
78.3
|
%
|
Software
|
1,757.1
|
|
|
18.3
|
|
|
1,608.5
|
|
|
18.3
|
|
|
1,293.9
|
|
|
18.1
|
|
|||
Services
|
256.8
|
|
|
2.7
|
|
|
217.0
|
|
|
2.4
|
|
|
194.3
|
|
|
2.7
|
|
|||
Other
(1)
|
14.6
|
|
|
0.1
|
|
|
51.8
|
|
|
0.6
|
|
|
67.0
|
|
|
0.9
|
|
|||
Total net sales
|
$
|
9,602.4
|
|
|
100.0
|
%
|
|
$
|
8,801.2
|
|
|
100.0
|
%
|
|
$
|
7,162.6
|
|
|
100.0
|
%
|
(1)
|
Includes items such as delivery charges to customers and certain commission revenue.
|
19.
|
Supplemental Guarantor Information
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||||||||||
(in millions)
|
December 31, 2011
|
||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
102.1
|
|
|
$
|
15.8
|
|
|
$
|
8.1
|
|
|
$
|
—
|
|
|
$
|
(26.1
|
)
|
|
$
|
99.9
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,197.9
|
|
|
57.0
|
|
|
—
|
|
|
—
|
|
|
1,254.9
|
|
|||||||
Merchandise inventory
|
—
|
|
|
—
|
|
|
318.0
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
321.7
|
|
|||||||
Miscellaneous receivables
|
—
|
|
|
47.3
|
|
|
93.3
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
143.6
|
|
|||||||
Deferred income taxes
|
—
|
|
|
19.5
|
|
|
5.0
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
24.6
|
|
|||||||
Prepaid expenses and other
|
—
|
|
|
11.0
|
|
|
23.5
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
34.7
|
|
|||||||
Total current assets
|
—
|
|
|
179.9
|
|
|
1,653.5
|
|
|
72.1
|
|
|
—
|
|
|
(26.1
|
)
|
|
1,879.4
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Property and equipment, net
|
—
|
|
|
80.9
|
|
|
70.6
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
154.3
|
|
|||||||
Goodwill
|
—
|
|
|
749.4
|
|
|
1,428.4
|
|
|
30.6
|
|
|
—
|
|
|
—
|
|
|
2,208.4
|
|
|||||||
Other intangible assets, net
|
—
|
|
|
366.0
|
|
|
1,261.0
|
|
|
9.0
|
|
|
—
|
|
|
—
|
|
|
1,636.0
|
|
|||||||
Deferred financing costs, net
|
—
|
|
|
68.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68.5
|
|
|||||||
Other assets
|
6.0
|
|
|
1.5
|
|
|
1.4
|
|
|
0.1
|
|
|
—
|
|
|
(6.0
|
)
|
|
3.0
|
|
|||||||
Investment in and advances to subsidiaries
|
(13.3
|
)
|
|
3,038.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,025.4
|
)
|
|
—
|
|
|||||||
Total assets
|
$
|
(7.3
|
)
|
|
$
|
4,484.9
|
|
|
$
|
4,414.9
|
|
|
$
|
114.6
|
|
|
$
|
—
|
|
|
$
|
(3,057.5
|
)
|
|
$
|
5,949.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Liabilities and Shareholders’ (Deficit) Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Accounts payable-trade
|
$
|
—
|
|
|
$
|
17.6
|
|
|
$
|
503.7
|
|
|
$
|
22.6
|
|
|
$
|
—
|
|
|
$
|
(26.1
|
)
|
|
$
|
517.8
|
|
Accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
278.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
278.7
|
|
|||||||
Current maturities of long-term debt
|
—
|
|
|
201.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
201.0
|
|
|||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
27.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.8
|
|
|||||||
Accrued expenses
|
—
|
|
|
162.5
|
|
|
146.2
|
|
|
7.3
|
|
|
—
|
|
|
—
|
|
|
316.0
|
|
|||||||
Total current liabilities
|
—
|
|
|
381.1
|
|
|
956.4
|
|
|
29.9
|
|
|
—
|
|
|
(26.1
|
)
|
|
1,341.3
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt
|
—
|
|
|
3,865.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,865.0
|
|
|||||||
Deferred income taxes
|
—
|
|
|
199.3
|
|
|
496.9
|
|
|
1.8
|
|
|
—
|
|
|
(6.0
|
)
|
|
692.0
|
|
|||||||
Accrued interest
|
—
|
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.0
|
|
|||||||
Other liabilities
|
—
|
|
|
39.8
|
|
|
4.3
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
45.6
|
|
|||||||
Total long-term liabilities
|
—
|
|
|
4,117.1
|
|
|
501.2
|
|
|
3.3
|
|
|
—
|
|
|
(6.0
|
)
|
|
4,615.6
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total shareholders’ (deficit) equity
|
(7.3
|
)
|
|
(13.3
|
)
|
|
2,957.3
|
|
|
81.4
|
|
|
—
|
|
|
(3,025.4
|
)
|
|
(7.3
|
)
|
|||||||
Total liabilities and shareholders (deficit) equity
|
$
|
(7.3
|
)
|
|
$
|
4,484.9
|
|
|
$
|
4,414.9
|
|
|
$
|
114.6
|
|
|
$
|
—
|
|
|
$
|
(3,057.5
|
)
|
|
5,949.6
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||||||||||
(in millions)
|
December 31, 2010
|
||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
32.9
|
|
|
$
|
1.1
|
|
|
$
|
10.0
|
|
|
$
|
—
|
|
|
$
|
(7.4
|
)
|
|
$
|
36.6
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,047.5
|
|
|
44.0
|
|
|
—
|
|
|
—
|
|
|
1,091.5
|
|
|||||||
Merchandise inventory
|
—
|
|
|
—
|
|
|
290.3
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
292.8
|
|
|||||||
Miscellaneous receivables
|
—
|
|
|
90.2
|
|
|
99.1
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
192.8
|
|
|||||||
Deferred income taxes
|
—
|
|
|
45.6
|
|
|
7.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52.8
|
|
|||||||
Prepaid expenses and other
|
—
|
|
|
10.4
|
|
|
25.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.8
|
|
|||||||
Total current assets
|
—
|
|
|
179.1
|
|
|
1,470.6
|
|
|
60.0
|
|
|
—
|
|
|
(7.4
|
)
|
|
1,702.3
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Property and equipment, net
|
—
|
|
|
78.6
|
|
|
77.7
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
158.1
|
|
|||||||
Goodwill
|
—
|
|
|
749.4
|
|
|
1,428.4
|
|
|
31.3
|
|
|
—
|
|
|
—
|
|
|
2,209.1
|
|
|||||||
Other intangible assets, net
|
—
|
|
|
380.5
|
|
|
1,400.4
|
|
|
10.3
|
|
|
—
|
|
|
—
|
|
|
1,791.2
|
|
|||||||
Deferred financing costs, net
|
—
|
|
|
79.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79.7
|
|
|||||||
Other assets
|
6.5
|
|
|
1.5
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
(6.5
|
)
|
|
3.4
|
|
|||||||
Investment in and advances to subsidiaries
|
(50.0
|
)
|
|
3,193.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,143.4
|
)
|
|
—
|
|
|||||||
Total assets
|
$
|
(43.5
|
)
|
|
$
|
4,662.2
|
|
|
$
|
4,379.0
|
|
|
$
|
103.4
|
|
|
$
|
—
|
|
|
$
|
(3,157.3
|
)
|
|
$
|
5,943.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Liabilities and Shareholders’ (Deficit) Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Accounts payable-trade
|
$
|
—
|
|
|
$
|
17.3
|
|
|
$
|
515.0
|
|
|
$
|
12.2
|
|
|
$
|
—
|
|
|
$
|
(7.4
|
)
|
|
$
|
537.1
|
|
Accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
28.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.2
|
|
|||||||
Current maturities of long-term debt and capital leases
|
—
|
|
|
132.5
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
132.6
|
|
|||||||
Fair value of interest rate swap agreements
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
28.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.6
|
|
|||||||
Accrued expenses
|
—
|
|
|
152.4
|
|
|
137.0
|
|
|
8.2
|
|
|
—
|
|
|
—
|
|
|
297.6
|
|
|||||||
Total current liabilities
|
—
|
|
|
305.0
|
|
|
708.9
|
|
|
20.4
|
|
|
—
|
|
|
(7.4
|
)
|
|
1,026.9
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt and capital leases
|
—
|
|
|
4,157.3
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,157.4
|
|
|||||||
Deferred income taxes
|
—
|
|
|
183.5
|
|
|
551.2
|
|
|
2.1
|
|
|
—
|
|
|
(6.5
|
)
|
|
730.3
|
|
|||||||
Accrued interest
|
—
|
|
|
32.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.3
|
|
|||||||
Other liabilities
|
—
|
|
|
34.1
|
|
|
4.7
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
40.4
|
|
|||||||
Total long-term liabilities
|
—
|
|
|
4,407.2
|
|
|
556.0
|
|
|
3.7
|
|
|
—
|
|
|
(6.5
|
)
|
|
4,960.4
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total shareholders’ (deficit) equity
|
(43.5
|
)
|
|
(50.0
|
)
|
|
3,114.1
|
|
|
79.3
|
|
|
—
|
|
|
(3,143.4
|
)
|
|
(43.5
|
)
|
|||||||
Total liabilities and shareholders’ (deficit) equity
|
$
|
(43.5
|
)
|
|
$
|
4,662.2
|
|
|
$
|
4,379.0
|
|
|
$
|
103.4
|
|
|
$
|
—
|
|
|
$
|
(3,157.3
|
)
|
|
$
|
5,943.8
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
(in millions)
|
Year Ended December 31, 2011
|
||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,222.4
|
|
|
$
|
380.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,602.4
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
7,684.9
|
|
|
330.1
|
|
|
—
|
|
|
—
|
|
|
8,015.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross profit
|
—
|
|
|
—
|
|
|
1,537.5
|
|
|
49.9
|
|
|
—
|
|
|
—
|
|
|
1,587.4
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Selling and administrative expenses
|
—
|
|
|
111.7
|
|
|
853.1
|
|
|
29.2
|
|
|
—
|
|
|
—
|
|
|
994.0
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
119.0
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
122.7
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(Loss) income from operations
|
—
|
|
|
(111.7
|
)
|
|
565.4
|
|
|
17.0
|
|
|
—
|
|
|
—
|
|
|
470.7
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest (expense) income, net
|
—
|
|
|
(324.5
|
)
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(324.2
|
)
|
|||||||
Net loss on extinguishments of long-term debt
|
—
|
|
|
(118.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(118.9
|
)
|
|||||||
Management fee
|
—
|
|
|
9.2
|
|
|
—
|
|
|
(9.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other income (expense), net
|
—
|
|
|
0.4
|
|
|
0.5
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(Loss) income before income taxes
|
—
|
|
|
(545.5
|
)
|
|
566.1
|
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
28.3
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income tax benefit (expense)
|
—
|
|
|
215.1
|
|
|
(222.4
|
)
|
|
(3.9
|
)
|
|
—
|
|
|
—
|
|
|
(11.2
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(Loss) income before equity in earnings (loss) of subsidiaries
|
—
|
|
|
(330.4
|
)
|
|
343.7
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
17.1
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity in earnings (loss) of subsidiaries
|
17.1
|
|
|
347.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(364.6
|
)
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss)
|
$
|
17.1
|
|
|
$
|
17.1
|
|
|
$
|
343.7
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
(364.6
|
)
|
|
$
|
17.1
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
(in millions)
|
Year Ended December 31, 2010
|
||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,504.7
|
|
|
$
|
296.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,801.2
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
7,152.3
|
|
|
258.1
|
|
|
—
|
|
|
—
|
|
|
7,410.4
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross profit
|
—
|
|
|
—
|
|
|
1,352.4
|
|
|
38.4
|
|
|
—
|
|
|
—
|
|
|
1,390.8
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Selling and administrative expenses
|
—
|
|
|
110.8
|
|
|
798.3
|
|
|
23.0
|
|
|
—
|
|
|
—
|
|
|
932.1
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
102.5
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
106.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(Loss) income from operations
|
—
|
|
|
(110.8
|
)
|
|
451.6
|
|
|
11.9
|
|
|
—
|
|
|
—
|
|
|
352.7
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest (expense) income, net
|
—
|
|
|
(393.2
|
)
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(391.9
|
)
|
|||||||
(Loss) gain on extinguishments of long-term debt
|
—
|
|
|
(7.9
|
)
|
|
9.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|||||||
Other income (expense), net
|
—
|
|
|
8.6
|
|
|
(8.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(Loss) income before income taxes
|
—
|
|
|
(503.3
|
)
|
|
454.6
|
|
|
11.7
|
|
|
—
|
|
|
—
|
|
|
(37.0
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income tax benefit (expense)
|
—
|
|
|
125.5
|
|
|
(115.7
|
)
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
7.8
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(Loss) income before equity in (loss) earnings of subsidiaries
|
—
|
|
|
(377.8
|
)
|
|
338.9
|
|
|
9.7
|
|
|
—
|
|
|
—
|
|
|
(29.2
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity in (loss) earnings of subsidiaries
|
(29.2
|
)
|
|
348.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(319.4
|
)
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net (loss) income
|
$
|
(29.2
|
)
|
|
$
|
(29.2
|
)
|
|
$
|
338.9
|
|
|
$
|
9.7
|
|
|
$
|
—
|
|
|
$
|
(319.4
|
)
|
|
$
|
(29.2
|
)
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||
(in millions)
|
Year Ended December 31, 2009
|
||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer (a)
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,951.7
|
|
|
$
|
210.9
|
|
|
|
|
$
|
—
|
|
|
$
|
7,162.6
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
5,844.8
|
|
|
184.9
|
|
|
|
|
—
|
|
|
6,029.7
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
—
|
|
|
—
|
|
|
1,106.9
|
|
|
26.0
|
|
|
|
|
—
|
|
|
1,132.9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling and administrative expenses
|
—
|
|
|
102.8
|
|
|
700.9
|
|
|
17.4
|
|
|
|
|
—
|
|
|
821.1
|
|
||||||
Advertising expense
|
—
|
|
|
—
|
|
|
99.9
|
|
|
2.0
|
|
|
|
|
—
|
|
|
101.9
|
|
||||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
241.8
|
|
|
—
|
|
|
|
|
—
|
|
|
241.8
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Loss) income from operations
|
—
|
|
|
(102.8
|
)
|
|
64.3
|
|
|
6.6
|
|
|
|
|
—
|
|
|
(31.9
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest (expense) income, net
|
—
|
|
|
(432.2
|
)
|
|
0.5
|
|
|
—
|
|
|
|
|
—
|
|
|
(431.7
|
)
|
||||||
Other (expense) income, net
|
—
|
|
|
(0.1
|
)
|
|
2.2
|
|
|
0.3
|
|
|
|
|
—
|
|
|
2.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Loss) income before income taxes
|
—
|
|
|
(535.1
|
)
|
|
67.0
|
|
|
6.9
|
|
|
|
|
—
|
|
|
(461.2
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
1.1
|
|
|
187.3
|
|
|
(99.9
|
)
|
|
(0.7
|
)
|
|
|
|
—
|
|
|
87.8
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) before equity in (loss) earnings of subsidiaries
|
1.1
|
|
|
(347.8
|
)
|
|
(32.9
|
)
|
|
6.2
|
|
|
|
|
—
|
|
|
(373.4
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in (loss) earnings of subsidiaries
|
(374.5
|
)
|
|
(26.7
|
)
|
|
—
|
|
|
—
|
|
|
|
|
401.2
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
$
|
(373.4
|
)
|
|
$
|
(374.5
|
)
|
|
$
|
(32.9
|
)
|
|
$
|
6.2
|
|
|
|
|
$
|
401.2
|
|
|
$
|
(373.4
|
)
|
(a)
|
Not applicable for the year ended December 31, 2009. The Co-Issuer was formed on August 6, 2010.
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
(in millions)
|
Year Ended December 31, 2011
|
||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(93.8
|
)
|
|
$
|
327.5
|
|
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
|
$
|
(18.7
|
)
|
|
$
|
214.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(33.4
|
)
|
|
(10.6
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
(45.7
|
)
|
|||||||
Cash settlements on interest rate swap agreements
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.6
|
)
|
|||||||
Premium payments on interest rate cap agreements
|
—
|
|
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.7
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(43.7
|
)
|
|
(10.6
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
(56.0
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Proceeds from borrowings under revolving credit facility
|
—
|
|
|
1,295.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,295.0
|
|
|||||||
Repayments of borrowings under revolving credit facility
|
—
|
|
|
(1,483.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,483.2
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
(132.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(132.0
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
1,175.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,175.0
|
|
|||||||
Payments to extinguish long-term debt
|
—
|
|
|
(1,175.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,175.0
|
)
|
|||||||
Payment of debt financing costs
|
—
|
|
|
(26.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.3
|
)
|
|||||||
Net change in accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
250.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250.5
|
|
|||||||
Advances to/from affiliates
|
—
|
|
|
552.6
|
|
|
(552.7
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other financing activities
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
206.7
|
|
|
(302.2
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(95.4
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net increase (decrease) in cash
|
—
|
|
|
69.2
|
|
|
14.7
|
|
|
(1.9
|
)
|
|
—
|
|
|
(18.7
|
)
|
|
63.3
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
32.9
|
|
|
1.1
|
|
|
10.0
|
|
|
—
|
|
|
(7.4
|
)
|
|
36.6
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
102.1
|
|
|
$
|
15.8
|
|
|
$
|
8.1
|
|
|
$
|
—
|
|
|
$
|
(26.1
|
)
|
|
$
|
99.9
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
(in millions)
|
Year Ended December 31, 2010
|
||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(245.6
|
)
|
|
$
|
665.2
|
|
|
$
|
4.4
|
|
|
$
|
—
|
|
|
$
|
(0.3
|
)
|
|
$
|
423.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(31.4
|
)
|
|
(9.9
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(41.5
|
)
|
|||||||
Cash settlements on interest rate swap agreements
|
—
|
|
|
(78.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78.2
|
)
|
|||||||
Premium payments on interest rate cap agreements
|
—
|
|
|
(5.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.9
|
)
|
|||||||
Other investing activities
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(115.3
|
)
|
|
(9.9
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(125.4
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Proceeds from borrowings under revolving credit facility
|
—
|
|
|
770.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
770.8
|
|
|||||||
Repayments of borrowings under revolving credit facility
|
—
|
|
|
(1,074.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,074.1
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
(16.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.5
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
500.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500.0
|
|
|||||||
Payments to extinguish long-term debt
|
—
|
|
|
(500.0
|
)
|
|
(18.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(518.6
|
)
|
|||||||
Payment of debt financing costs
|
—
|
|
|
(14.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.3
|
)
|
|||||||
Net change in accounts payable - inventory financing
|
—
|
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||||
Advances to/from affiliates
|
—
|
|
|
640.8
|
|
|
(639.2
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other financing activities
|
—
|
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
306.2
|
|
|
(654.7
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
(350.1
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net (decrease) increase in cash
|
—
|
|
|
(54.7
|
)
|
|
0.6
|
|
|
3.0
|
|
|
—
|
|
|
(0.3
|
)
|
|
(51.4
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
87.6
|
|
|
0.5
|
|
|
7.0
|
|
|
—
|
|
|
(7.1
|
)
|
|
88.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
32.9
|
|
|
$
|
1.1
|
|
|
$
|
10.0
|
|
|
$
|
—
|
|
|
$
|
(7.4
|
)
|
|
$
|
36.6
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||
(in millions)
|
Year Ended December 31, 2009
|
||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer (a)
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
1.1
|
|
|
$
|
(213.1
|
)
|
|
$
|
322.9
|
|
|
$
|
1.4
|
|
|
|
|
$
|
(4.7
|
)
|
|
$
|
107.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(10.8
|
)
|
|
(4.8
|
)
|
|
—
|
|
|
|
|
—
|
|
|
(15.6
|
)
|
||||||
Cash settlements on interest rate swap agreements
|
—
|
|
|
(72.2
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(72.2
|
)
|
||||||
Purchases of marketable securities
|
—
|
|
|
(20.0
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(20.0
|
)
|
||||||
Redemption of marketable securities
|
—
|
|
|
20.0
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
20.0
|
|
||||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
5.2
|
|
|
—
|
|
|
|
|
—
|
|
|
5.2
|
|
||||||
Net cash (used in) provided by investing activities
|
—
|
|
|
(83.0
|
)
|
|
0.4
|
|
|
—
|
|
|
|
|
—
|
|
|
(82.6
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Repayments of long-term debt
|
—
|
|
|
(11.0
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(11.0
|
)
|
||||||
Payment of debt financing costs
|
—
|
|
|
(11.3
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(11.3
|
)
|
||||||
Net change in accounts payable - inventory financing
|
—
|
|
|
—
|
|
|
(9.1
|
)
|
|
—
|
|
|
|
|
—
|
|
|
(9.1
|
)
|
||||||
Advances to/from affiliates
|
(1.1
|
)
|
|
315.0
|
|
|
(314.8
|
)
|
|
0.9
|
|
|
|
|
—
|
|
|
—
|
|
||||||
Other financing activities
|
—
|
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
|
|
—
|
|
|
(0.5
|
)
|
||||||
Net cash (used in) provided by financing activities
|
(1.1
|
)
|
|
292.4
|
|
|
(324.1
|
)
|
|
0.9
|
|
|
|
|
—
|
|
|
(31.9
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
|
|
—
|
|
|
0.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (decrease) increase in cash
|
—
|
|
|
(3.7
|
)
|
|
(0.8
|
)
|
|
2.8
|
|
|
|
|
(4.7
|
)
|
|
(6.4
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
91.3
|
|
|
1.3
|
|
|
4.2
|
|
|
|
|
(2.4
|
)
|
|
94.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
87.6
|
|
|
$
|
0.5
|
|
|
$
|
7.0
|
|
|
|
|
$
|
(7.1
|
)
|
|
$
|
88.0
|
|
(a)
|
Not applicable for the year ended December 31, 2009. The Co-Issuer was formed on August 6, 2010.
|
20.
|
Selected Quarterly Financial Results (unaudited)
|
(in millions)
|
2011
|
||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net Sales Detail:
|
|
|
|
|
|
|
|
||||||||
Corporate:
|
|
|
|
|
|
|
|
||||||||
Medium/Large
|
$
|
1,022.9
|
|
|
$
|
1,075.0
|
|
|
$
|
1,070.6
|
|
|
$
|
1,118.6
|
|
Small Business
|
256.4
|
|
|
263.4
|
|
|
259.7
|
|
|
267.8
|
|
||||
Total Corporate
|
1,279.3
|
|
|
1,338.4
|
|
|
1,330.3
|
|
|
1,386.4
|
|
||||
Public:
|
|
|
|
|
|
|
|
||||||||
Government
|
231.9
|
|
|
296.1
|
|
|
388.1
|
|
|
427.4
|
|
||||
Education
|
214.6
|
|
|
343.3
|
|
|
415.7
|
|
|
224.1
|
|
||||
Healthcare
|
277.4
|
|
|
311.8
|
|
|
319.3
|
|
|
307.5
|
|
||||
Total Public
|
723.9
|
|
|
951.2
|
|
|
1,123.1
|
|
|
959.0
|
|
||||
Other
|
126.4
|
|
|
122.5
|
|
|
128.0
|
|
|
133.9
|
|
||||
Net sales
|
$
|
2,129.6
|
|
|
$
|
2,412.1
|
|
|
$
|
2,581.4
|
|
|
$
|
2,479.3
|
|
Gross profit
|
$
|
351.5
|
|
|
$
|
401.8
|
|
|
$
|
420.8
|
|
|
$
|
413.3
|
|
Income from operations
|
$
|
91.7
|
|
|
$
|
128.2
|
|
|
$
|
139.7
|
|
|
$
|
111.1
|
|
Net income (loss)
|
$
|
(4.2
|
)
|
|
$
|
(34.8
|
)
|
|
$
|
37.1
|
|
|
$
|
19.0
|
|
|
|
|
|
|
|
|
|
||||||||
(in millions)
|
2010
|
||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net Sales Detail:
|
|
|
|
|
|
|
|
||||||||
Corporate:
|
|
|
|
|
|
|
|
||||||||
Medium/Large
|
$
|
893.0
|
|
|
$
|
964.6
|
|
|
$
|
973.7
|
|
|
$
|
1,036.0
|
|
Small Business
|
223.7
|
|
|
228.8
|
|
|
251.0
|
|
|
262.8
|
|
||||
Total Corporate
|
1,116.7
|
|
|
1,193.4
|
|
|
1,224.7
|
|
|
1,298.8
|
|
||||
Public:
|
|
|
|
|
|
|
|
||||||||
Government
|
280.5
|
|
|
343.1
|
|
|
397.1
|
|
|
348.0
|
|
||||
Education
|
227.8
|
|
|
338.1
|
|
|
392.5
|
|
|
242.1
|
|
||||
Healthcare
|
212.0
|
|
|
249.7
|
|
|
262.1
|
|
|
267.5
|
|
||||
Total Public
|
720.3
|
|
|
930.9
|
|
|
1,051.7
|
|
|
857.6
|
|
||||
Other
|
97.1
|
|
|
99.0
|
|
|
98.0
|
|
|
112.9
|
|
||||
Net sales
|
$
|
1,934.1
|
|
|
$
|
2,223.3
|
|
|
$
|
2,374.4
|
|
|
$
|
2,269.3
|
|
Gross profit
|
$
|
305.9
|
|
|
$
|
359.9
|
|
|
$
|
368.4
|
|
|
$
|
356.8
|
|
Income from operations
|
$
|
71.3
|
|
|
$
|
95.6
|
|
|
$
|
104.6
|
|
|
$
|
81.2
|
|
Net income (loss)
|
$
|
2.2
|
|
|
$
|
(7.0
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(24.2
|
)
|
|
|
Nine Months Ended September 30, 2010
|
||||||||||
(in millions)
|
|
As Previously
Reported
|
|
Revision
|
|
As Revised
|
||||||
Net cash provided by operating activities
|
|
$
|
397.6
|
|
|
$
|
(33.8
|
)
|
|
$
|
363.8
|
|
Net cash used in financing activities
|
|
$
|
(335.8
|
)
|
|
$
|
33.8
|
|
|
$
|
(302.0
|
)
|
Net decrease in cash and cash equivalents
|
|
$
|
(21.0
|
)
|
|
$
|
—
|
|
|
$
|
(21.0
|
)
|
|
|
Six Months Ended June 30, 2011
|
||||||||||
(in millions)
|
|
As Previously
Reported
|
|
Revision
|
|
As Revised
|
||||||
Net cash provided by operating activities
|
|
$
|
207.4
|
|
|
$
|
(77.6
|
)
|
|
$
|
129.8
|
|
Net cash used in financing activities
|
|
$
|
(173.3
|
)
|
|
$
|
77.6
|
|
|
$
|
(95.7
|
)
|
Net increase in cash and cash equivalents
|
|
$
|
8.0
|
|
|
$
|
—
|
|
|
$
|
8.0
|
|
|
|
Six Months Ended June 30, 2010
|
||||||||||
(in millions)
|
|
As Previously
Reported
|
|
Revision
|
|
As Revised
|
||||||
Net cash provided by operating activities
|
|
$
|
260.3
|
|
|
$
|
(98.5
|
)
|
|
$
|
161.8
|
|
Net cash used in financing activities
|
|
$
|
(266.2
|
)
|
|
$
|
98.5
|
|
|
$
|
(167.7
|
)
|
Net decrease in cash and cash equivalents
|
|
$
|
(61.9
|
)
|
|
$
|
—
|
|
|
$
|
(61.9
|
)
|
|
|
Three Months Ended March 31, 2011
|
||||||||||
(in millions)
|
|
As Previously
Reported
|
|
Revision
|
|
As Revised
|
||||||
Net cash provided by operating activities
|
|
$
|
196.3
|
|
|
$
|
(54.7
|
)
|
|
$
|
141.6
|
|
Net cash used in financing activities
|
|
$
|
(143.5
|
)
|
|
$
|
54.7
|
|
|
$
|
(88.8
|
)
|
Net increase in cash and cash equivalents
|
|
$
|
37.1
|
|
|
$
|
—
|
|
|
$
|
37.1
|
|
|
|
Three Months Ended March 31, 2010
|
||||||||||
(in millions)
|
|
As Previously
Reported
|
|
Revision
|
|
As Revised
|
||||||
Net cash provided by operating activities
|
|
$
|
313.3
|
|
|
$
|
(78.1
|
)
|
|
$
|
235.2
|
|
Net cash used in financing activities
|
|
$
|
(309.5
|
)
|
|
$
|
78.1
|
|
|
$
|
(231.4
|
)
|
Net decrease in cash and cash equivalents
|
|
$
|
(20.3
|
)
|
|
$
|
—
|
|
|
$
|
(20.3
|
)
|
21.
|
Subsequent Events
|
(in millions)
|
|
|
|
|
|
|
|
||||||||
|
Balance at
Beginning
of Period
|
|
Charged to
Costs and
Expenses
|
|
Deductions
|
|
Balance at
End of
Period
|
||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2011
|
$
|
5.0
|
|
|
$
|
3.6
|
|
|
$
|
(3.2
|
)
|
|
$
|
5.4
|
|
Year Ended December 31, 2010
|
6.3
|
|
|
1.2
|
|
|
(2.5
|
)
|
|
5.0
|
|
||||
Year Ended December 31, 2009
|
6.4
|
|
|
5.1
|
|
|
(5.2
|
)
|
|
6.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Inventory valuation reserve:
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2011
|
$
|
4.1
|
|
|
$
|
22.8
|
|
|
$
|
(22.0
|
)
|
|
$
|
4.9
|
|
Year Ended December 31, 2010
|
3.5
|
|
|
28.9
|
|
|
(28.3
|
)
|
|
4.1
|
|
||||
Year Ended December 31, 2009
|
3.5
|
|
|
21.9
|
|
|
(21.9
|
)
|
|
3.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Reserve for sales returns:
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2011
|
$
|
3.2
|
|
|
$
|
32.0
|
|
|
$
|
(30.7
|
)
|
|
$
|
4.5
|
|
Year Ended December 31, 2010
|
2.9
|
|
|
29.4
|
|
|
(29.1
|
)
|
|
3.2
|
|
||||
Year Ended December 31, 2009
|
2.9
|
|
|
26.8
|
|
|
(26.8
|
)
|
|
2.9
|
|
/s/ Ernst & Young LLP
|
Chicago, Illinois
|
March 9, 2012
|
Name
|
Age
|
Position
|
|
Thomas E. Richards
|
57
|
|
President and Chief Executive Officer, Manager of CDW Ho, and Director of Parent
|
John A. Edwardson
|
62
|
|
Chairman of the Boards of CDW Holdings and CDW LLC
|
Dennis G. Berger
|
47
|
|
Senior Vice President and Chief Coworker Services Officer
|
Neal J. Campbell
|
50
|
|
Senior Vice President and Chief Marketing Officer
|
Christina M. Corley
|
44
|
|
Senior Vice President - Corporate Sales
|
Douglas E. Eckrote
|
47
|
|
Senior Vice President - Strategic Solutions and Services
|
Christine A. Leahy
|
47
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
Jonathan J. Stevens
|
42
|
|
Senior Vice President - Operations and Chief Information Officer
|
Christina V. Rother
|
48
|
|
Senior Vice President - Public and Advanced Technology Sales
|
Matthew A. Troka
|
41
|
|
Senior Vice President - Product and Partner Management
|
Ann E. Ziegler
|
53
|
|
Senior Vice President and Chief Financial Officer
|
Steven W. Alesio
|
57
|
|
Manager of CDW Holdings and CDW LLC
|
Barry K. Allen
|
63
|
|
Manager of CDW Holdings and CDW LLC
|
Benjamin D. Chereskin
|
53
|
|
Manager of CDW Holdings and CDW LLC
|
Glenn M. Creamer
|
50
|
|
Manager of CDW Holdings and CDW LLC
|
Michael J. Dominguez
|
42
|
|
Manager of CDW Holdings and CDW LLC and Director of Parent
|
Paul J. Finnegan
|
59
|
|
Manager of CDW Holdings and CDW LLC and Director of Parent
|
Robin P. Selati
|
46
|
|
Manager of CDW Holdings and CDW LLC
|
Donna F. Zarcone
|
54
|
|
Manager of CDW Holdings and CDW LLC
|
•
|
Thomas E. Richards, President and Chief Executive Officer
|
•
|
John A. Edwardson, Chairman and Former Chief Executive Officer
|
•
|
Ann E. Ziegler, Senior Vice President and Chief Financial Officer
|
•
|
Douglas E. Eckrote, Senior Vice President, Strategic Solutions and Services
|
•
|
Neal J. Campbell, Senior Vice President, Chief Marketing Officer
|
•
|
Christina M. Corley, Senior Vice President, Corporate Sales
|
•
|
Attract, retain and motivate high performing talent;
|
•
|
Directly align executive compensation elements with both short-term and long-term Company performance; and
|
•
|
Align the interests of our executives with those of our stakeholders.
|
•
|
Base salary;
|
•
|
Annual cash incentive awards (the Senior Management Incentive Plan);
|
•
|
Long-term incentive awards; and
|
•
|
Severance benefits.
|
Period
|
|
Base Salary (Per Annum)
|
||
10/1/2011 through 3/31/2012
|
|
|
$825,000
|
|
4/1/2012 through 6/30/2012
|
|
|
$618,750
|
|
7/1/2012 through 9/30/2012
|
|
|
$412,500
|
|
10/1/2012 through 12/31/2012
|
|
|
$206,250
|
|
•
|
Target payout requires growth above market growth rate expectations;
|
•
|
Threshold payout requires performance at or above prior year level; and
|
•
|
The market share governor adjusts payouts if the Company underperforms the market.
|
|
Adjusted EBITDA
Performance Goal
|
|
Market Share Governor
(2)
|
|||||
Payout Opportunity
(1)
|
(% of attainment of
performance goal)
|
|
Grow (% of target
bonus)
|
|
Flat/Decline (%
of target bonus)
|
|||
Maximum
|
115.0
|
%
|
|
200
|
%
|
|
180
|
%
|
Adjusted EBITDA Performance Goal
|
100.0
|
%
|
|
100
|
%
|
|
90
|
%
|
Minimum Performance Threshold
|
91.3
|
%
|
|
25
|
%
|
|
15
|
%
|
(1)
|
Payouts were determined under a grid based on various performance achievement levels for Adjusted EBITDA and market share changes.
|
(2)
|
Market share changes were measured internally based on data from seven industry surveys and reports as well as financial information regarding four publicly traded resellers and four publicly traded technology distributors and/or manufacturers.
|
|
|
|
|
||||
Named Executive Officer
|
SMIP Bonus Target
|
|
Calculated SMIP Payout
|
||||
Thomas E. Richards (1)
|
$
|
1,078,356
|
|
|
$
|
1,725,370
|
|
John A. Edwardson
|
$
|
1,300,000
|
|
|
$
|
2,080,000
|
|
Ann E. Ziegler
|
$
|
700,000
|
|
|
$
|
1,120,000
|
|
Douglas E. Eckrote
|
$
|
700,000
|
|
|
$
|
1,120,000
|
|
Neal J. Campbell (2)
|
$
|
257,671
|
|
|
$
|
412,274
|
|
Christina M. Corley (2)
|
$
|
73,082
|
|
|
$
|
116,932
|
|
(1)
|
The SMIP Bonus Target reported for Mr. Richards is prorated to reflect his SMIP Bonus Target in effect until September 30, 2011 and his increased SMIP Bonus Target in effect from October 1, 2011 through December 31, 2011.
|
(2)
|
Mr. Campbell and Ms. Corley each commenced employment with the Company during 2011 and each received a prorated bonus opportunity reflecting the portion of the year in which each Named Executive Officer was employed by the Company.
|
Name and Principal Position
|
|
Year
|
|
Salary
($) (1)
|
|
Bonus
($) (2)
|
|
Stock
Awards
($)
(3)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($) (4)
|
|
Non-qualified
Deferred
Compensation
Earnings
($) (5)
|
|
All Other
Compensation
($) (6)
|
|
Total
($)
|
||||||||
Thomas E. Richards
President and Chief
Executive Officer
|
|
2011
|
|
715,865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,725,370
|
|
|
374,747
|
|
|
5,180
|
|
|
2,821,162
|
|
|
|
2010
|
|
700,000
|
|
|
—
|
|
|
2,238,960
|
|
|
—
|
|
|
1,995,000
|
|
|
296,561
|
|
|
5,130,000
|
|
|
10,360,521
|
|
|
|
2009
|
|
175,000
|
|
|
1,208,896
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,274
|
|
|
1,414,170
|
|
John A. Edwardson
Chairman and Former Chief
Executive Officer
|
|
2011
|
|
825,000
|
|
|
—
|
|
|
8,220,865
|
|
|
—
|
|
|
2,080,000
|
|
|
—
|
|
|
5,180
|
|
|
11,131,045
|
|
|
|
2010
|
|
825,000
|
|
|
—
|
|
|
4,191,657
|
|
|
—
|
|
|
2,470,000
|
|
|
—
|
|
|
—
|
|
|
7,486,657
|
|
|
|
2009
|
|
564,205
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
683,800
|
|
|
—
|
|
|
3,193
|
|
|
1,251,448
|
|
Ann E. Ziegler
Senior Vice President and Chief Financial Officer
|
|
2011
|
|
320,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,120,000
|
|
|
229,012
|
|
|
5,180
|
|
|
1,674,192
|
|
|
|
2010
|
|
320,000
|
|
|
—
|
|
|
628,429
|
|
|
—
|
|
|
1,340,000
|
|
|
181,232
|
|
|
3,135,000
|
|
|
5,604,661
|
|
|
|
2009
|
|
317,538
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
331,380
|
|
|
—
|
|
|
3,193
|
|
|
652,211
|
|
Douglas E. Eckrote
Senior Vice President,
Strategic Solutions
and Services
|
|
2011
|
|
275,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,120,000
|
|
|
187,373
|
|
|
5,180
|
|
|
1,587,553
|
|
|
|
2010
|
|
275,000
|
|
|
—
|
|
|
514,867
|
|
|
—
|
|
|
1,340,000
|
|
|
148,281
|
|
|
2,565,000
|
|
|
4,843,148
|
|
|
|
2009
|
|
272,885
|
|
|
350
|
|
|
—
|
|
|
—
|
|
|
368,200
|
|
|
—
|
|
|
3,193
|
|
|
644,628
|
|
Neal J. Campbell
Senior Vice President, Chief Marketing Officer
|
|
2011
|
|
248,558
|
|
|
—
|
|
|
695,783
|
|
|
—
|
|
|
412,274
|
|
|
27,353
|
|
|
400,000
|
|
|
1,783,968
|
|
Christina M. Corley
Senior Vice President,
Corporate Sales
|
|
2011
|
|
69,153
|
|
|
78,400
|
|
|
797,316
|
|
|
—
|
|
|
116,932
|
|
|
7,711
|
|
|
400,000
|
|
|
1,469,512
|
|
(1)
|
Salary
. Mr. Campbell and Ms. Corley each joined the Company during 2011.
|
(2)
|
Bonus
. The amounts reported in this column for Mr. Richards and Ms. Corley represent bonuses paid in connection with Mr. Richards and Ms. Corley joining the Company.
|
(3)
|
Stock Awards
. The amounts reported represent the grant date fair value of B Units calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”). The amounts reported in 2011 for Mr. Campbell and Ms. Corley represent the aggregate grant date fair value of B Units granted in 2011. Mr. Campbell and Ms. Corley's B Units vest daily on a pro rata basis commencing on the date of grant and continuing through the five-year anniversary of the date of grant. The amount reported in 2011 for Mr. Edwardson represents the incremental fair value associated with the modification to Mr. Edwardson's outstanding B Unit awards in 2011 and does not reflect a new B Unit grant to Mr. Edwardson. As noted in the following narrative, in 2011, the vesting terms of Mr. Edwardson's B Units were modified in connection with his retirement as Chief Executive Officer to provide that Mr. Edwardson's outstanding B Units will continue to vest in accordance with the vesting schedule set forth in his original grant agreement (through 2014); provided, that Mr. Edwardson continues to perform services through December 31, 2012 or experiences a qualifying termination of employment prior to that date. For 2010, the amounts reported represent the aggregate grant date fair value of B Units granted in 2010 and the incremental fair value associated with the 2010 modification of the B Unit program. See Note 12 to the consolidated financial statements for a discussion of the relevant assumptions used in calculating these amounts. Please see the Compensation Discussion and Analysis for further information regarding the 2011 B Unit grants to Mr.
|
(4)
|
Non-Equity Incentive Plan Compensation
. For 2011, the amounts reported represent cash awards to the Named Executive Officers under the SMIP. Please see the Compensation Discussion and Analysis for further information regarding the 2011 SMIP.
|
(5)
|
Nonqualified Deferred Compensation Earnings
. Pursuant to SEC disclosure rules, the amounts reported represent the portion of the interest credited under the RDU Plan that exceeds 120% of the applicable federal long-term rate. As noted in the Compensation Discussion and Analysis, the payment of interest earned during 2010 and 2011 under the RDU Plan was deferred until 2012. Please see the Compensation Discussion and Analysis for further information regarding the RDU Plan.
|
(6)
|
All Other Compensation
. For 2011, “All Other Compensation” consists of (i) the value of RDUs that Mr. Campbell and Ms. Corley received during 2011 and (ii) profit sharing contributions to the 401(k) accounts of Messrs. Richards, Edwardson, and Eckrote and Ms. Ziegler. For 2010, “All Other Compensation” for Messrs. Richards and Eckrote and Ms. Ziegler consists of the value of RDUs that each received during 2010. The RDU value reported is calculated by multiplying the number of RDUs received by $1,000, the face amount of an RDU. Because the amounts reported represent the face amount of the unvested RDUs, these amounts may not correspond to the actual value that will be recognized by the Named Executive Officer. Participants in the RDU Plan vest in this principal component on a pro rata basis over the three-year period commencing January 1, 2012 through December 31, 2014, subject to earlier vesting in the event of certain qualifying terminations of employment or a sale of the Company.
|
Name
|
|
Grant Date
|
|
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards (1)
|
|
Estimated Possible Payouts
Under Equity Incentive Plan
Awards
|
|
All Other
Stock
Awards:
Number of
Units (#)
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
Exercise
or Base
Price of
Option
Awards
($)
|
|
Grant Date
Fair Value
of Stock
and Option
Awards
($) (4)
|
|||||||||||||||||||||
Threshold
($)
|
|
Target
($)
|
|
Maximum ($)
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
||||||||||||||||||||||||
Thomas E. Richards
|
|
—
|
|
|
161,753
|
|
|
1,078,356
|
|
|
2,156,712
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
John A. Edwardson
|
|
—
|
|
|
195,000
|
|
|
1,300,000
|
|
|
2,600,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|||
|
|
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,887
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
8,220,865
|
|
|
Ann E. Ziegler
|
|
—
|
|
|
105,000
|
|
|
700,000
|
|
|
1,400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Douglas E. Eckrote
|
|
—
|
|
|
105,000
|
|
|
700,000
|
|
|
1,400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Neal J. Campbell
|
|
|
|
38,651
|
|
|
257,671
|
|
|
515,342
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
3/10/2011
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,783
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
695,783
|
|
Christina M. Corley
|
|
—
|
|
|
10,962
|
|
|
73,082
|
|
|
146,164
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
11/4/2011
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,246
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
797,316
|
|
(1)
|
These amounts represent threshold, target and maximum cash award levels set in 2011 under the SMIP. The SMIP bonus opportunities reported for Mr. Richards are prorated to reflect his SMIP bonus opportunities in effect until September 30, 2011 and his increased SMIP bonus opportunities in effect from October 1, 2011 through December 31, 2011. Mr. Campbell and Ms. Corley each commenced employment with the Company during 2011 and each received prorated bonus opportunities reflecting the portion of the year in which each Named Executive Officer was employed by the Company. The amount actually earned by each Named Executive Officer is reported as Non-Equity Incentive Plan Compensation in the 2011 Summary Compensation Table.
|
(2)
|
The amount reported for Mr. Edwardson represents the number of B Units that were impacted by the modification to Mr. Edwardson's outstanding B Unit awards in 2011 and does not reflect a new B Unit grant to Mr. Edwardson. As noted in the following narrative, in 2011, the vesting terms of Mr. Edwardson's B Units were modified in connection with his retirement as Chief Executive Officer to provide that Mr. Edwardson's outstanding B Units will continue to vest in accordance with the vesting schedule set forth in his original grant agreement (through 2014); provided, that Mr.
|
(3)
|
The amounts reported for Mr. Campbell and Ms. Corley represent B Units granted in 2011 under the Company's 2007 Incentive Equity Plan. These B Units vest daily on a pro rata basis commencing on the date of grant and continuing through the five-year anniversary of the date of grant. The per unit participation thresholds for Mr. Campbell and Ms. Corley's B Unit grants equal $464.06 and $592.00, respectively.
|
(4)
|
The amounts reported in this column represent the grant date fair value of the 2011 B Unit grants and the incremental fair value associated with the modification of Mr. Edwardson's B Units in 2011, each as computed in accordance with FASB ASC 718. See Note 12 to the consolidated financial statements for a discussion of the relevant assumptions used in calculating these amounts.
|
Period
|
|
Base Salary (Per Annum)
|
||
10/1/2011 through 3/31/2012
|
|
|
$825,000
|
|
4/1/2012 through 6/30/2012
|
|
|
$618,750
|
|
7/1/2012 through 9/30/2012
|
|
|
$412,500
|
|
10/1/2012 through 12/31/2012
|
|
|
$206,250
|
|
•
|
If Mr. Edwardson's employment as Chairman is terminated by the Company without “cause,” by Mr. Edwardson for “good reason,” or due to disability, Mr. Edwardson will receive, in addition to the payments and benefits that he is already entitled to receive under his existing employment agreement, continuation of medical, dental and vision insurance until he becomes eligible for Medicare benefits, and full COBRA rights for his eligible dependents once he becomes eligible for Medicare benefits or, if earlier, upon his death.
|
•
|
Mr. Edwardson extended the term of his noncompetition covenant through December 31, 2016.
|
Name
|
|
Number of Units
That Have Not
Vested (1) |
|
Market Value of
Units That Have
Not Vested (2) |
|||
Thomas E. Richards
|
|
11,203
|
|
|
$
|
9,623,239
|
|
John A. Edwardson
|
|
37,348
|
|
|
$
|
32,081,413
|
|
Ann E. Ziegler
|
|
5,229
|
|
|
$
|
4,491,399
|
|
Douglas E. Eckrote
|
|
5,152
|
|
|
$
|
4,425,880
|
|
Neal J. Campbell
|
|
4,006
|
|
|
$
|
1,582,088
|
|
Christina M. Corley
|
|
5,079
|
|
|
$
|
1,356,111
|
|
(1)
|
Amounts reported in this column represent the number of unvested B Units held by each Named Executive Officer as of December 31, 2011. For each of the Named Executive Officers other than Mr. Campbell and Ms. Corley, the B Units vest daily on a pro rata basis over a five year period commencing on January 1, 2010. For Mr. Campbell and Ms. Corley, the B Units vest daily on a pro rata basis over a five year period commencing on March 10, 2011 and November 4, 2011, respectively.
|
(2)
|
Following the Acquisition, the Company's equity ceased to be publicly traded and, therefore, there was no ascertainable public market value for the B Units as of December 31, 2011. The market value reported in this table is based upon a valuation analysis of the "fair market value" (as defined in our applicable equity documents) of total Company equity performed on a semi-annual basis.
|
Name
|
|
Number of Units Acquired
on Vesting (1)
|
|
Value Realized on
Vesting (2)
|
|||
Thomas E. Richards
|
|
3,728
|
|
|
$
|
3,201,898
|
|
John A. Edwardson
|
|
12,427
|
|
|
$
|
10,674,308
|
|
Ann E. Ziegler
|
|
1,740
|
|
|
$
|
1,494,403
|
|
Douglas E. Eckrote
|
|
1,714
|
|
|
$
|
1,472,604
|
|
Neal J. Campbell
|
|
777
|
|
|
$
|
306,911
|
|
Christina M. Corley
|
|
166
|
|
|
$
|
44,438
|
|
(1)
|
Amounts reported in this column represent the number of the Named Executive Officer's B Units that vested during 2011. These B Units remain subject to transfer restrictions pursuant to the terms of the B Unit agreements.
|
(2)
|
Following the Acquisition, the Company's equity ceased to be publicly traded and, therefore, there was no ascertainable public market value for the B Units as of December 31, 2011. The market value reported in this table is based upon a valuation analysis of the "fair market value" (as defined in our applicable equity documents) of total Company equity performed on a semi-annual basis.
|
Name
|
|
Executive
Contributions in
Last Fiscal Year
($)
|
|
Registrant
Contributions in
Last Fiscal Year
($) (1)
|
|
Aggregate
Earnings in Last
Fiscal Year
($) (2)
|
|
Aggregate
Withdrawals /
Distributions
($)
|
|
Aggregate Balance
at Last Fiscal
Year-End
($) (3)
|
|||||
Thomas E. Richards
|
|
—
|
|
|
—
|
|
|
643,046
|
|
|
—
|
|
|
6,286,482
|
|
John A. Edwardson
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Ann E. Ziegler
|
|
—
|
|
|
—
|
|
|
392,972
|
|
|
—
|
|
|
3,841,739
|
|
Douglas E. Eckrote
|
|
—
|
|
|
—
|
|
|
321,523
|
|
|
—
|
|
|
3,143,241
|
|
Neal J. Campbell
|
|
—
|
|
|
400,000
|
|
|
46,937
|
|
|
—
|
|
|
446,937
|
|
Christina M. Corley
|
|
—
|
|
|
400,000
|
|
|
13,231
|
|
|
—
|
|
|
413,231
|
|
(1)
|
The amounts reported in this column represent the number of RDUs that Mr. Campbell and Ms. Corley received during 2011 multiplied by $1,000, the face amount of an RDU. Please see the narrative above for a description of the principal component of the RDU Plan. These amounts are included in the “All Other Compensation” column in the 2011 Summary Compensation Table. Participants in the RDU Plan vest in the principal component on a pro rata basis over the three-year period commencing January 1, 2012 through December 31, 2014, subject to earlier vesting in the event of certain qualifying terminations of employment or a sale of the Company. Accordingly, none of the amounts reported in this column as of December 31, 2011 were vested.
|
(2)
|
The amounts reported in this column represent interest credited to each Named Executive Officer's RDU account in 2011. Please see the narrative above for a description of the interest component of the RDU Plan. (This is different than the portion of the interest credited that is above the applicable long-term federal rate, which is included in the “Nonqualified Deferred Compensation Earnings” column in the 2011 Summary Compensation Table.) Participants in the RDU Plan became vested in the interest payments that accrued under the RDU Plan from March 10, 2010 (or the date of hire, if later) through December 31, 2011 on December 31, 2011. Such accrued interest payments were paid to participants in January 2012.
|
(3)
|
The amounts reported in this column represent each Named Executive Officer's balance in the RDU Plan.
|
Name
|
|
Severance
Payment
($) (2)
|
|
Pro Rata
Actual Bonus
Payment
($) (3)
|
|
Value of
Class B
Common
Units
($) (4)
|
|
Value of
Accelerated
RDUs
($) (5)
|
|
Welfare
Benefits ($) (6)
|
|
Outplacement
($) (7)
|
|
Aggregate
Payments
($)
|
|||||||
Thomas E. Richards (2x Scenario)
|
|
5,000,740
|
|
|
1,725,370
|
|
|
—
|
|
|
3,208,482
|
|
|
17,502
|
|
|
20,000
|
|
|
9,972,094
|
|
Thomas E. Richards (3x Scenario)
|
|
7,483,856
|
|
|
1,725,370
|
|
|
—
|
|
|
3,208,482
|
|
|
26,253
|
|
|
20,000
|
|
|
12,463,961
|
|
John A. Edwardson
|
|
5,139,200
|
|
|
2,080,000
|
|
|
32,110,657
|
|
|
—
|
|
|
9,793
|
|
|
—
|
|
|
39,339,650
|
|
Ann E. Ziegler
|
|
2,880,000
|
|
|
1,120,000
|
|
|
—
|
|
|
1,960,739
|
|
|
11,549
|
|
|
20,000
|
|
|
5,992,288
|
|
Douglas E. Eckrote
|
|
2,790,000
|
|
|
1,120,000
|
|
|
—
|
|
|
1,604,241
|
|
|
17,406
|
|
|
20,000
|
|
|
5,551,647
|
|
Neal J. Campbell
|
|
715,000
|
|
|
412,274
|
|
|
—
|
|
|
46,937
|
|
|
8,215
|
|
|
20,000
|
|
|
1,202,426
|
|
Christina M. Corley
|
|
715,000
|
|
|
116,932
|
|
|
—
|
|
|
13,231
|
|
|
10,213
|
|
|
20,000
|
|
|
875,376
|
|
(1)
|
A qualifying termination means termination of the Named Executive Officer's employment (1) by the Company other than (A) for “cause,” (B) the Named Executive Officer's death or (C) the Named Executive Officer's disability, or (2) for a Named Executive Officer who is a party to a Compensation Protection Agreement, by the Named Executive Officer for “good reason.”
|
(2)
|
Except as otherwise noted, amounts reported in this column represent a multiple of the sum of (i) the Named Executive Officer's base salary and (ii) the Named Executive Officer's annual incentive bonus target for 2011 multiplied by the 2011 SMIP payout percentage of 160%. For Mr. Edwardson, the bonus component of his severance payment is determined under his employment agreement based upon the average of the annual incentive bonus amounts earned for the last three full fiscal years. The multiple is one times for the Named Executive Officers who participate in the Compensation Protection Plan, two times for Mr. Edwardson and the Named Executive Officers who are parties to Compensation Protection Agreements and three times for base salary and 2.99 times for SMIP bonus in the case Mr. Richards resigns for good reason in certain circumstances following an acquisition of the Company on or before December 31, 2011.
|
(3)
|
Under the Named Executive Officers' respective agreements, the Named Executive Officers are entitled to a pro rata bonus based on the Company's actual performance for the year in which termination occurs. The amount reported in this column represents the annual bonus earned by each Named Executive Officer during 2011. This amount is also reported in the 2011 Summary Compensation Table as 2011 compensation.
|
(4)
|
Pursuant to the terms of the B Unit agreements, the B Units do not accelerate upon a termination of employment other than a termination of employment due to the death or disability of the Named Executive Officer, as described below. Although Mr. Edwardson's unvested B Units do not accelerate upon a qualifying termination of employment, Mr. Edwardson's unvested B Units will continue to vest in accordance with the vesting schedule set forth in his grant agreement (through 2014) upon a qualifying termination of employment. The amount reported for Mr. Edwardson represents the value of the B Units that will continue to vest in the event Mr. Edwardson's employment with the Company is terminated without cause or Mr. Edwardson resigns with good reason before December 31, 2012. The B Unit value reported in this table is based upon a valuation analysis of the "fair market value" (as defined in our applicable equity documents) of total Company equity performed on a semi-annual basis.
|
(5)
|
Pursuant to the terms of the RDU Plan, upon a qualifying termination of employment under a Compensation Protection Agreement, the participant will vest in the RDUs through the date of termination, determined as if the vesting schedule had been five year daily commencing on January 1, 2010. The amounts reported in the table represent the sum of (i) the number of RDUs that would vest upon the qualifying termination of employment under a Compensation Protection Agreement multiplied by the $1,000 face amount of an RDU and (ii) the interest earned in 2010 and 2011 that became
|
(6)
|
Represents the estimated value of continued welfare benefits that all Named Executive Officers would be entitled to receive upon a qualifying termination of employment.
|
(7)
|
Represents the maximum value of outplacement services that all Named Executive Officers, except for Mr. Edwardson, would be entitled to receive.
|
Name
|
|
Severance
Payment
($)
|
|
Pro Rata
Actual Bonus
Payment
($) (1)
|
|
Value of
Accelerated
Class B Common
Units
($) (2)
|
|
Value of
Accelerated
RDUs
($) (3)
|
|
Aggregate
Payments
($)
|
|||||
Thomas E. Richards
|
|
—
|
|
|
1,725,370
|
|
|
3,205,407
|
|
|
2,182,482
|
|
|
7,113,259
|
|
John A. Edwardson
|
|
—
|
|
|
2,080,000
|
|
|
10,686,006
|
|
|
—
|
|
|
12,766,006
|
|
Ann E. Ziegler
|
|
—
|
|
|
1,120,000
|
|
|
1,496,041
|
|
|
1,333,739
|
|
|
3,949,780
|
|
Douglas E. Eckrote
|
|
—
|
|
|
1,120,000
|
|
|
1,474,218
|
|
|
1,091,241
|
|
|
3,685,459
|
|
Neal J. Campbell
|
|
—
|
|
|
412,274
|
|
|
377,800
|
|
|
126,937
|
|
|
917,011
|
|
Christina M. Corley
|
|
—
|
|
|
116,932
|
|
|
280,110
|
|
|
93,231
|
|
|
490,273
|
|
(1)
|
Under the Compensation Protection Agreements, the Named Executive Officers are entitled to a pro rata bonus based on target or, in the case of Mr. Edwardson, actual performance for the year in which termination occurs. The amount reported in this column represents the annual bonus earned by each Named Executive Officer during 2011. This amount is also reported in the 2011 Summary Compensation Table as 2011 compensation.
|
(2)
|
Represents the value of B Units, equal to the amount that would vest over a period of one year, in the event of a death or a termination following a disability on December 30, 2011. The B Unit value reported in this table is based upon a valuation analysis of the "fair market value" (as defined in our applicable equity documents) of total Company equity performed on a semi-annual basis.
|
(3)
|
Pursuant to the terms of the RDU Plan, in the event of the participant's death or disability, the participant will vest in an additional 20% of the RDUs (i.e., one year of vesting on a five year daily vesting schedule). The amounts reported in the table represent the sum of (i) the number of RDUs that would vest upon a termination due to death or disability multiplied by the $1,000 face amount of an RDU and (ii) the interest earned in 2010 and 2011 that became vested on December 31, 2011 and was paid in January 2012. In addition, the Named Executive Officer will continue to receive interest earned subsequent to 2011 with respect to the RDUs that vested in connection with his or her termination of employment due to death or disability.
|
Name
|
|
Severance
Payment
($)
|
|
Pro Rata
Actual
Bonus
Payment
($)
|
|
Value of
Accelerated
Class B Common
Units
($) (1)
|
|
Value of
Accelerated
RDUs
($) (2)
|
|
Gross-Up ($) (3)
|
|
Aggregate
Payments
($) (4)
|
||||||
Thomas E. Richards
|
|
—
|
|
|
—
|
|
|
9,632,012
|
|
|
7,143,831
|
|
|
—
|
|
|
16,775,843
|
|
John A. Edwardson
|
|
—
|
|
|
—
|
|
|
32,110,657
|
|
|
—
|
|
|
—
|
|
|
32,110,657
|
|
Ann E. Ziegler
|
|
—
|
|
|
—
|
|
|
4,495,493
|
|
|
4,365,681
|
|
|
—
|
|
|
8,861,174
|
|
Douglas E. Eckrote
|
|
—
|
|
|
—
|
|
|
4,429,915
|
|
|
3,571,921
|
|
|
—
|
|
|
8,001,836
|
|
Neal J. Campbell
|
|
—
|
|
|
—
|
|
|
1,583,121
|
|
|
513,790
|
|
|
—
|
|
|
2,096,911
|
|
Christina M. Corley
|
|
—
|
|
|
—
|
|
|
1,356,877
|
|
|
480,085
|
|
|
—
|
|
|
1,836,962
|
|
(1)
|
Represents the value of all unvested B Units that would become vested immediately prior to a sale of the Company on December 30, 2011. The B Unit value reported in this table is based upon a valuation analysis of the "fair market value" (as defined in our applicable equity documents) of total Company equity performed on a semi-annual basis.
|
(2)
|
Represents the value of all unvested RDUs that would become vested upon a sale of the Company as well as the interest accrued in 2010 and 2011 on these RDUs, the allocation of the unallocated RDU debt pool (principal and any accrued interest) that each Named Executive Officer would have received if a sale of the Company occurred on December 30, 2011 and the change in control payment on the RDUs. The amounts are calculated based on the $1,000 face amount of an RDU. Please see the “2011 Non-Qualified Deferred Compensation” table for a description of the RDU Plan and the narrative above entitled “RDU Plan” for a description of the amounts to be received by participants in the RDU Plan upon a sale of the Company.
|
(3)
|
The tax gross-up calculations assumed a blended effective tax rate of approximately 39% and a 20% excise tax incurred on excess parachute payments, as calculated in accordance with Internal Revenue Code Sections 280G and 4999. For Mr. Richards, given that he commenced employment with the Company in 2009, the tax gross-up calculation is based on Mr. Richard's W-2 forms for 2009 and 2010 only, with 2009 compensation information based on an annualized salary amount. For Ms. Ziegler, given that she commenced employment in 2008, the tax gross-up calculation is based on Ms. Ziegler's W-2 forms for 2008, 2009 and 2010 only, with 2008 compensation information based on an annualized salary amount.
|
(4)
|
If the Named Executive Officer experiences a qualifying termination of employment in connection with a change in control, the Named Executive Officer would also be entitled to the amounts reported in the “Potential Payments upon a Qualifying Termination of Employment” table above, except that such Named Executive Officer would receive the value of the accelerated RDUs as set forth in this table rather than in the “Potential Payments upon a Qualifying Termination of Employment” table above. In addition, the 280G gross-up calculation would be increased to reflect the additional compensation received in connection with a qualifying termination of employment. In such case, Mr. Richards would receive a gross-up payment of $2,316,136 for the 2x termination scenario and $3,608,933 for the 3x termination scenario, and Ms. Ziegler would receive a gross-up payment of $1,357,190.
|
Name
|
|
Fees Earned or Paid in Cash/Total
|
|
||
Steven W. Alesio
|
|
$
|
175,000
|
|
|
Barry K. Allen
|
|
$
|
175,000
|
|
|
Benjamin D. Chereskin
|
|
$
|
175,000
|
|
|
Donna F. Zarcone
|
|
$
|
106,250
|
|
(1)
|
(1)
|
Consists of a pro rata portion of the $175,000 annual retainer earned by Ms. Zarcone based upon length of Board service in 2011. Ms. Zarcone currently serves on the Board and commenced Board service on May 23, 2011.
|
•
|
each person who is the beneficial owner of more than 5% of its outstanding voting common equity;
|
•
|
each member of the board of managers of CDW Holdings and each of our Named Executive Officers; and
|
•
|
our managers and executive officers as a group.
|
|
CDW Holdings LLC
|
|||||||||||||
|
Number of A Units
Beneficially Owned
|
|
Percent of A
Units
Beneficially
Owned
|
|
Number of B
Units
Beneficially
Owned
|
|
Percent of B
Units
Beneficially
Owned
|
|
Percent of All
Units
Beneficially
Owned
|
|||||
Principal Unitholders:
|
|
|
|
|
|
|
|
|
|
|||||
Madison Dearborn
(1)
|
1,108,879.4
|
|
|
51.2
|
|
|
—
|
|
|
—
|
|
|
49.5
|
|
Providence Equity
(2)
|
980,415.5
|
|
|
45.3
|
|
|
—
|
|
|
—
|
|
|
43.7
|
|
Managers and Executive Officers:
|
|
|
|
|
|
|
|
|
|
|||||
John A. Edwardson
(3)
|
26,000.0
|
|
|
1.2
|
|
|
26,895.9
|
|
|
34.7
|
|
|
2.4
|
|
Ann E. Ziegler
(4)
|
1,000.0
|
|
|
*
|
|
|
3,765.4
|
|
|
5.0
|
|
|
*
|
|
Thomas E. Richards
(5)
|
2,154.9
|
|
|
*
|
|
|
8,067.8
|
|
|
10.6
|
|
|
*
|
|
Douglas E. Eckrote
(6)
|
4,000.0
|
|
|
*
|
|
|
3,710.5
|
|
|
4.9
|
|
|
*
|
|
Christina M. Corley
(7)
|
—
|
|
|
*
|
|
|
338.6
|
|
|
*
|
|
|
*
|
|
Neal J. Campbell
(8)
|
—
|
|
|
*
|
|
|
934.1
|
|
|
1.2
|
|
|
|
|
Steven W. Alesio
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Barry K. Allen
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Benjamin D. Chereskin
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Glenn M. Creamer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Michael J. Dominguez
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Paul J. Finnegan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Robin P. Selati
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Donna F. Zarcone
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
All Managers and Executive Officers as a group (19 persons)
|
37,454.9
|
|
|
1.7
|
|
|
56,260.4
|
|
|
70.4
|
|
|
4.2
|
|
(1)
|
Consists of 723,840.2 A Units held directly by Madison Dearborn Capital Partners V-A, L.P. (“MDP A”), 192,022.3 A Units held directly by Madison Dearborn Capital Partners V-C, L.P. (“MDP C”), 7,273.2 A Units held directly by Madison Dearborn Capital Partners V Executive-A, L.P. (“MDP Exec”) and 185,743.8 A Units held directly by MDCP Co-Investor (CDW), L.P. (“MDP Co-Investor”). The units held by MDP A, MDP C, MDP Exec and MDP Co-Investor may be deemed to be beneficially owned by Madison Dearborn Partners V A&C, L.P. (“MDP V”), and the general partner of MDP A, MDP C, MDP Exec and MDP Co-Investor. As the sole member of a limited partner committee of MDP V that has the power, acting by majority vote, to vote or dispose of the units directly held by MDP A, MDP C, MDP Exec and MDP Co-Investor, John A. Canning, Paul J. Finnegan and Samuel M. Mencoff may be deemed to have shared voting and investment power over such units. MDP V, MDP A, MDP C, MDP Exec and MDP Co-Investor may be deemed to be a group for purposes of Section 13(d)(3) of the Exchange Act, but expressly disclaim group attribution. Messrs. Canning, Finnegan and Mencoff and MDP V hereby disclaim any beneficial ownership of any shares held by MDP A, MDP C, MDP Exec and MDP Co-Investor. The address for the Madison Dearborn entities and persons is Three First National Plaza, 70 W. Madison Street, Suite 4600, Chicago, Illinois, 60602.
|
(2)
|
Consists of 621,184.7 A Units held directly by Providence Equity Partners VI, L.P. (“PEP VI”), 213,695.0 A Units held directly by Providence Equity Partners VI-A, L.P. (“PEP VI-A”) and 145,535.8 A Units held directly by PEP Co-Investors (CDW), L.P. (“PEP Co-Investor”). The units held by PEP VI, PEP VI-A and PEP Co-Investor may be deemed to be beneficially owned by Providence Equity GP VI, L.P. (“PEP GP”), the general partner of PEP VI, PEP VI-A and PEP Co-Investor and Providence Equity Partners VI, L.L.C. (“PEP LLC”), the general partner of PEP GP. PEP VI, PEP VI-A, PEP Co-Investor, PEP GP and PEP LLC may be deemed to be a group for purposes of Section 13(d)(3) of the Exchange Act, but expressly disclaim group attribution. The address for the Providence Equity entities is
|
(3)
|
8,775 A Units held by the Edwardson Family Foundation are deemed to be beneficially owned by Mr. Edwardson. Includes beneficial ownership of 2,042.7 B Units held by Mr. Edwardson that may be acquired within 60 days of December 31, 2011.
|
(4)
|
350 A Units held by the Mark A. Orloff Irrevocable Trust, the assets of which trust, including the 350 A Units, are pledged to secure a loan incurred by the trust, and 650 A Units held by the Ann E. Ziegler IRA Northern Trust Bank are deemed to be beneficially owned by Ms. Ziegler. Includes beneficial ownership of 286.0 B Units held by Ms. Ziegler that may be acquired within 60 days of December 31, 2011.
|
(5)
|
Includes beneficial ownership of 612.7 B Units held by Mr. Richards that may be acquired within 60 days of December 31, 2011.
|
(6)
|
Includes beneficial ownership of 281.8 B Units held by Mr. Eckrote that may be acquired within 60 days of December 31, 2011.
|
(7)
|
Includes beneficial ownership of 172.2 B Units held by Ms. Corley that may be acquired within 60 days of December 31, 2011.
|
(8)
|
Includes beneficial ownership of 157.0 B Units held by Mr. Campbell that may be acquired within 60 days of December 31, 2011.
|
•
|
the approximate dollar amount involved in the transaction, including the amount payable to or by the related person;
|
•
|
the nature of the interest of the related person in the transaction;
|
•
|
whether the transaction may involve a conflict of interest;
|
•
|
whether the transaction was entered into on terms no less favorable to us than terms that could have been reached with an unaffiliated third party; and
|
•
|
the purpose of the transaction and any potential benefits to us.
|
(in thousands)
|
Years Ended December 31,
|
||||||
|
2011
|
|
2010
|
||||
Audit Fees
(1)
|
$
|
1,084.2
|
|
|
$
|
1,730.0
|
|
Audit Related Fees
(2)
|
—
|
|
|
380.0
|
|
||
Tax Fees
(3)
|
—
|
|
|
15.0
|
|
||
All Other Fees
(4)
|
2.0
|
|
|
—
|
|
||
Total
|
$
|
1,086.2
|
|
|
$
|
2,125.0
|
|
(1)
|
Audit fees include fees for the audit of our annual financial statements and reviews of our quarterly financial statements. Fees in 2011 and 2010 also include services related to the Company’s Registration Statements on Form S-4. Fees in 2010 also include services provided in connection with the issuance of the Company’s Senior Secured Notes in December.
|
(2)
|
Audit related fees include fees related to employee benefit plans and consultation services provided in connection with the Company’s Registration Statement on Form S-4 and certain changes to compensation plans.
|
(3)
|
Tax fees include fees related to tax compliance.
|
(4)
|
All other fees include a fee paid for a license to use software relating to accounting rules and regulations.
|
(a)
|
Financial Statements and Schedules
|
(1)
|
Consolidated Financial Statements:
|
|
Page
|
|
|
(2)
|
Financial Statement Schedules:
|
(b)
|
Exhibits
|
|
|
|
CDW CORPORATION
|
|
|
|
|
|
|
Date:
|
March 9, 2012
|
|
By:
|
/s/ Thomas E. Richards
|
|
|
|
|
Thomas E. Richards
|
|
|
|
|
President, Chief Executive Officer and Director
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Thomas E. Richards
|
|
President, Chief Executive Officer and Director
(principal executive officer)
|
|
March 9, 2012
|
Thomas E. Richards
|
|
|
|
|
|
|
|
||
/s/ Ann E. Ziegler
|
|
Senior Vice President and Chief Financial Officer
(principal financial officer)
|
|
March 9, 2012
|
Ann E. Ziegler
|
|
|
|
|
|
|
|
||
/s/ Virginia L. Seggerman
|
|
Vice President and Controller
(principal accounting officer)
|
|
March 9, 2012
|
Virginia L. Seggerman
|
|
|
|
|
|
|
|
||
/s/ Michael J. Dominguez
|
|
Director
|
|
March 9, 2012
|
Michael J. Dominguez
|
|
|
|
|
|
|
|
||
/s/ Paul J. Finnegan
|
|
Director
|
|
March 9, 2012
|
Paul J. Finnegan
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Fourth Amended and Restated Certificate of Incorporation of CDW Corporation, previously filed as Exhibit 3.1 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.2
|
|
Amended and Restated By-Laws of CDW Corporation, previously filed as Exhibit 3.2 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.3
|
|
Articles of Organization of CDW LLC, previously filed as Exhibit 3.3 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.4
|
|
Amended and Restated Limited Liability Company Agreement of CDW LLC, previously filed as Exhibit 3.4 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.5
|
|
Certificate of Incorporation of CDW Finance Corporation, previously filed as Exhibit 3.5 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.6
|
|
By-Laws of CDW Finance Corporation, previously filed as Exhibit 3.6 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.7
|
|
Amended and Restated Articles of Incorporation of CDW Technologies, Inc., previously filed as Exhibit 3.7 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.8
|
|
Amended and Restated By-Laws of CDW Technologies, Inc., previously filed as Exhibit 3.8 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.9
|
|
Articles of Organization of CDW Direct, LLC, previously filed as Exhibit 3.9 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.10
|
|
Amended and Restated Limited Liability Company Agreement of CDW Direct, LLC, previously filed as Exhibit 3.10 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.11
|
|
Articles of Organization of CDW Government LLC, previously filed as Exhibit 3.11 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.12
|
|
Articles of Organization of CDW Government LLC, previously filed as Exhibit 3.11 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.13
|
|
Articles of Incorporation of CDW Logistics, Inc., previously filed as Exhibit 3.13 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
3.14
|
|
By-Laws of CDW Logistics, Inc., previously filed as Exhibit 3.14 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
4.1
|
|
Senior Exchange Note Indenture, dated October 10, 2008, by and among CDW Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
4.2
|
|
Senior Exchange Note Supplemental Indenture, dated as of May 10, 2010, by and among CDW LLC, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.2 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
Exhibit
Number
|
|
Description
|
4.3
|
|
Second Senior Exchange Note Supplemental Indenture, dated as of August 23, 2010, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.3 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
4.4
|
|
Third Senior Exchange Note Supplemental Indenture, dated as of February 16, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on February 17, 2012 and incorporated herein by reference.
|
|
|
|
4.5
|
|
Form of Fixed Rate Senior/Senior PIK Election Exchange Note due 2015 (included as Exhibit B to Exhibit 4.1 above), previously filed as Exhibit 4.5 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
4.6
|
|
Form of Global Fixed Rate Senior Note due 2015, Series B, previously filed as Exhibit 4.5 with CDW Corporation's Form 10-K for the fiscal year ended December 31, 2010 and incorporated herein by reference.
|
|
|
|
4.7
|
|
Form of Global Fixed Rate Senior PIK Note due 2015, Series B, previously filed as Exhibit 4.6 with CDW Corporation's Form 10-K for the fiscal year ended December 31, 2010 and incorporated herein by reference.
|
|
|
|
4.8
|
|
Senior Subordinated Exchange Note Indenture, dated as of October 10, 2008, by and among CDW Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.6 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
4.9
|
|
Senior Subordinated Exchange Note Supplemental Indenture, dated as of May 10, 2010, by and among CDW LLC, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.7 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
4.10
|
|
Second Senior Subordinated Exchange Note Supplemental Indenture, dated as of August 23, 2010, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.8 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
4.11
|
|
Form of Fixed Rate Senior Subordinated Exchange Note due 2017 (included as Exhibit B to Exhibit 4.8 above), previously filed as Exhibit 4.10 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
4.12
|
|
Form of Global Fixed Rate Senior Subordinated Exchange Note due 2017, Series B, previously filed as Exhibit 4.11 with CDW Corporation's Form 10-K for the fiscal year ended December 31, 2010 and incorporated herein by reference.
|
|
|
|
4.13
|
|
Senior Secured Note Indenture, dated as of December 17, 2010, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on December 21, 2010 and incorporated herein by reference.
|
|
|
|
4.14
|
|
Senior Secured Note Supplemental Indenture, dated as of March 29, 2011, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on March 30, 2011 and incorporated herein by reference.
|
|
|
|
4.15
|
|
Form of Senior Secured Note (included as Exhibit A to Exhibit 4.13), previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on December 21, 2010 and incorporated herein by reference.
|
|
|
|
4.16
|
|
Senior Note Indenture, dated as of April 13, 2011, between CDW Escrow Corporation and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference.
|
|
|
|
4.17
|
|
Senior Note Supplemental Indenture, dated as of April 13, 2011, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference.
|
|
|
|
Exhibit
Number
|
|
Description
|
4.18
|
|
Second Senior Note Supplemental Indenture, dated as of May 20, 2011, by and among CDW LLC, CDW Finance Corporation, CDW Escrow Corporation, the guarantors party thereto and U.S. Bank National Association as Trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on May 23, 2011 and incorporated herein by reference.
|
|
|
|
4.19
|
|
Third Senior Note Supplemental Indenture, dated as of February 17, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as Trustee, previously filed as Exhibit 4.5 with CDW Corporation's Form 8-K filed on February 17, 2012 and incorporated herein by reference.
|
|
|
|
4.20
|
|
Form of Senior Note (included as Exhibit A to Exhibit 4.16), previously filed as Exhibit 4.3 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference.
|
|
|
|
4.21
|
|
Senior Secured Notes Registration Rights Agreement, dated as of December 17, 2010, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and J.P. Morgan Securities LLC as representative of the initial purchasers thereto, previously filed as Exhibit 4.3 with CDW Corporation's Form 8-K filed on December 21, 2010 and incorporated herein by reference.
|
|
|
|
4.22
|
|
Senior Notes Registration Rights Agreement, dated as of April 13, 2011, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and J.P. Morgan Securities LLC as representative of the initial purchasers thereto, previously filed as Exhibit 4.4 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference.
|
|
|
|
4.23
|
|
Add-On Senior Notes Registration Rights Agreement, dated as of May 20, 2011, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and J.P. Morgan Securities LLC as initial purchaser, previously filed as Exhibit 4.4 with CDW Corporation's Form 8-K filed on May 23, 2011 and incorporated herein by reference.
|
|
|
|
4.24
|
|
Senior Notes Registration Rights Agreement, dated as of February 17, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and Barclays Capital Inc., previously filed as Exhibit 4.7 with CDW Corporation's Form 8-K filed on February 17, 2012 and incorporated herein by reference.
|
10.1
|
|
Revolving Loan Credit Agreement, dated as of June 24, 2011, by and among CDW LLC, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, GE Commercial Distribution Finance Corporation, as floorplan funding agent, and the joint lead arrangers, joint bookrunners, co-collateral agents and other agents party thereto, previously filed as Exhibit 10.1 with CDW Corporation's Amendment No. 1 to Form S-4 filed on September 26, 2011 (Reg. No. 333-175597) and incorporated herein by reference.
|
|
|
|
10.2
|
|
Term Loan Agreement, dated as of October 12, 2007 and amended and restated March 12, 2008, by and among VH MergerSub, Inc., CDW Corporation, the lenders party thereto, Lehman Commercial Paper Inc., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan Stanley Senior Funding, Inc., Deutsche Bank Securities Inc. and JPMorgan Chase Bank, N.A, previously filed as Exhibit 10.2 with CDW Corporation's Amendment No. 1 to Form S-4 filed on September 26, 2011 (Reg. No. 333-175597) and incorporated herein by reference.
|
|
|
|
10.3
|
|
Amendment No. 1 to the Term Loan Agreement, dated as of November 4, 2009 previously filed as Exhibit 10.4 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.4
|
|
Amendment No. 2 to the Term Loan Agreement, dated as of December 2, 2010, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on December 7, 2010 and incorporated herein by reference.
|
|
|
|
10.5
|
|
Amendment No. 3 to the Term Loan Agreement, dated as of March 11, 2011, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on March 11, 2011 and incorporated herein by reference.
|
|
|
|
10.6
|
|
Guarantee and Collateral Agreement, dated as of October 12, 2007, as amended and restated December 17, 2010, among CDW LLC, the Guarantors and Morgan Stanley & Co. Incorporated, in its capacity as collateral agent, previously filed as Exhibit 10.6 with CDW Corporation's Amendment No. 1 to Form S-4 filed on September 26, 2011 (Reg. No. 333-175597) and incorporated herein by reference.
|
Exhibit
Number
|
|
Description
|
10.7
|
|
Management Services Agreement, dated as of October 12, 2007, by and between CDW Corporation, Madison Dearborn Partners V-B, L.P. and Providence Equity Partners L.L.C., previously filed as Exhibit 10.9 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.8
|
|
Registration Agreement, dated as of October 12, 2007, by and among VH Holdings, Inc. CDW Holdings LLC, Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Partners V Executive-A, L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P., and the other securityholders party thereto, previously filed as Exhibit 10.10 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.9§
|
|
CDW Holdings LLC 2007 Incentive Equity Plan, adopted as of October 12, 2007, previously filed as Exhibit 10.11 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.10§
|
|
Form of CDW Holdings LLC Class A Common Unit Purchase and Exchange Agreement under the CDW Holdings LLC 2007 Incentive Equity Plan (executed by Thomas E. Richards, John A. Edwardson, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.12 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.11§
|
|
Form of CDW Holdings LLC Class A Common Unit Purchase and Exchange Agreement under the CDW Holdings LLC 2007 Incentive Equity Plan (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka and to be used for certain future investors), previously filed as Exhibit 10.13 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.12§
|
|
Form of CDW Holdings LLC Class B Common Unit Grant Agreement under the CDW Holdings LLC 2007 Incentive Equity Plan (executed by Thomas E. Richards, John A. Edwardson, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.14 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.13§
|
|
Form of CDW Holdings LLC Class B Common Unit Grant Agreement under the CDW Holdings LLC 2007 Incentive Equity Plan (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka and to be used for certain future grantees), previously filed as Exhibit 10.15 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.14§
|
|
Form of CDW Holdings LLC Deferred Unit Purchase Agreement (executed by Dennis G. Berger, Douglas E. Eckrote and Christine A. Leahy), previously filed as Exhibit 10.16 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.15§
|
|
Form of CDW Holdings LLC Deferred Unit Purchase Agreement (executed by Matthew A. Troka and to be used for certain future investors), previously filed as Exhibit 10.17 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.16§
|
|
Form of Compensation Protection Agreement (executed by Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.18 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.17§
|
|
CDW Compensation Protection Plan, adopted as of December 10, 2002 and amended and restated effective as of January 1, 2009 (applicable to Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka), previously filed as Exhibit 10.19 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.18*§
|
|
First Amendment to CDW Compensation Protection Plan, adopted as of December 10, 2002 and amended and restated effective as of January 1, 2009, dated as of January 3, 2012.
|
|
|
|
10.19§
|
|
Form of Noncompetition Agreement under the Compensation Protection Agreement, previously filed as Exhibit 10.20 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
Exhibit
Number
|
|
Description
|
10.20§
|
|
Form of Noncompetition Agreement under the CDW Compensation Protection Plan, previously filed as Exhibit 10.21 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.21§
|
|
CDW Restricted Debt Unit Plan, adopted as of March 10, 2010, previously filed as Exhibit 10.22 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.22§
|
|
Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Thomas E. Richards, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.23 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.23§
|
|
Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka and to be used for certain future grantees), previously filed as Exhibit 10.24 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.24§
|
|
Senior Management Incentive Plan, as amended and restated effective January 1, 2010, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on November 15, 2010 and incorporated herein by reference.
|
|
|
|
10.25§
|
|
Employment Agreement dated as of October 12, 2007 by and between CDW Corporation and John A. Edwardson, previously filed as Exhibit 10.26 with CDW Corporation's Amendment No. 1 to Form S-4 filed on October 18, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.26§
|
|
First Amendment to the Employment Agreement by and between CDW Corporation and John A. Edwardson dated as of January 1, 2009, previously filed as Exhibit 10.27 with CDW Corporation's Amendment No. 1 to Form S-4 filed on October 18, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.27§
|
|
Addendum to Compensation Protection Agreement dated as of March 10, 2010 by and between CDW LLC and Thomas E. Richards, previously filed as Exhibit 10.28 with CDW Corporation's Amendment No. 1 to Form S-4 filed on October 18, 2010 (Reg. No. 333-169258) and incorporated herein by reference.
|
|
|
|
10.28§
|
|
Amended and Restated Employment Agreement dated as of June 30, 2011 by and between CDW LLC and John A. Edwardson, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on July 1, 2011 and incorporated herein by reference.
|
|
|
|
10.29§
|
|
Class B Grant Agreement Modification Letter dated as of June 30, 2011 by and among CDW Holdings LLC, John A. Edwardson, Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Capital Partners V Executive-A, L.P., Providence Equity Partners VI, L.P. and Providence Equity Partners VI-A, L.P., previously filed as Exhibit 10.2 with CDW Corporation's Form 8-K filed on July 1, 2011 and incorporated herein by reference.
|
|
|
|
10.30§
|
|
Amended and Restated Compensation Protection Agreement dated as of June 30, 2011 by and between CDW LLC and Thomas E. Richards, previously filed as Exhibit 10.3 with CDW Corporation's Form 8-K filed on July 1, 2011 and incorporated herein by reference.
|
|
|
|
10.31*§
|
|
Letter Agreement dated as of September 13, 2011 by and between CDW Direct, LLC and Christina M. Corley.
|
|
|
|
12.1*
|
|
Computation of ratio of earnings to fixed charges.
|
|
|
|
16.1
|
|
Letter to Securities and Exchange Commission from PricewaterhouseCoopers LLP dated as of June 28, 2011, previously filed as Exhibit 16.1 with CDW Corporation's Form 8-K filed on June 28, 2011 and incorporated herein by reference.
|
Exhibit
Number
|
|
Description
|
21.1*
|
|
List of subsidiaries.
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Rule 15d-14(a) under the Securities Exchange Act of 1934.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Rule 15d-14(a) under the Securities Exchange Act of 1934.
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350.
|
|
|
|
32.2**
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350.
|
|
|
|
101.INS***
|
|
XBRL Instance Document
|
|
|
|
101.SCH***
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL***
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF***
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB***
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE***
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed Herewith
|
**
|
These items are furnished and not filed.
|
***
|
Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
§
|
A management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K.
|
300 N. Milwaukee Avenue
Vernon Hills, IL 60061
Phone: 847.371.8000
Toll-free: 800.800.4239
Fax: 847.465.6800
CDW.com
|
|
|
Predecessor
|
|
|
Successor
|
||||||||||||||||||||
|
|
Period from January 1,
2007 to |
|
|
Period from October 12,
2007 to |
|
Years ended December 31,
|
||||||||||||||||||
(dollars in millions)
|
|
October 11, 2007
|
|
|
December 31, 2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
||||||||||||
Computation of earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) before income taxes and adjustment for (income) loss from equity investees
|
|
$
|
286.4
|
|
|
|
$
|
(58.8
|
)
|
|
$
|
(1,777.2
|
)
|
|
$
|
(461.2
|
)
|
|
$
|
(37.1
|
)
|
|
$
|
28.3
|
|
Distributed income from equity investees
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.5
|
|
||||||
Fixed charges
|
|
4.6
|
|
|
|
105.8
|
|
|
397.3
|
|
|
413.1
|
|
|
420.7
|
|
|
324.9
|
|
||||||
Total earnings
|
|
$
|
291.0
|
|
|
|
$
|
47.0
|
|
|
$
|
(1,379.9
|
)
|
|
$
|
(48.1
|
)
|
|
$
|
383.8
|
|
|
$
|
353.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Computation of fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on debt obligations
|
|
$
|
—
|
|
|
|
$
|
91.1
|
|
|
$
|
351.8
|
|
|
$
|
389.3
|
|
|
$
|
394.7
|
|
|
$
|
302.0
|
|
Amortization of debt issuance costs
|
|
—
|
|
|
|
13.4
|
|
|
38.6
|
|
|
16.2
|
|
|
18.0
|
|
|
15.7
|
|
||||||
Portion of rent expense representative of interest
(1)
|
|
4.6
|
|
|
|
1.3
|
|
|
6.9
|
|
|
7.6
|
|
|
8.0
|
|
|
7.2
|
|
||||||
Total fixed charges
|
|
$
|
4.6
|
|
|
|
$
|
105.8
|
|
|
$
|
397.3
|
|
|
$
|
413.1
|
|
|
$
|
420.7
|
|
|
$
|
324.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of earnings to fixed charges
|
|
63x
|
|
|
|
(2)
|
|
|
(2)
|
|
|
(2)
|
|
|
(2)
|
|
|
1x
|
|
(1)
|
Imputed interest on operating leases is estimated to be approximately one-third of rent expense.
|
(2)
|
For the period from October 12, 2007 to December 31, 2007 and the years ended December 31, 2008, 2009 and 2010, earnings available for fixed charges were inadequate to cover fixed charges by $58.8 million, $1,777.2 million, $461.2 million and $37.0 million, respectively.
|
Subsidiary
|
|
Jurisdiction of Organization
|
CDW LLC
|
|
Illinois
|
CDW Direct, LLC
|
|
Illinois
|
CDW Canada Inc.
|
|
New Brunswick
|
CDW Finance Corporation
|
|
Delaware
|
CDW Government LLC
|
|
Illinois
|
CDW Logistics, Inc.
|
|
Illinois
|
CDW Technologies, Inc.
|
|
Wisconsin
|
1.
|
I have reviewed this annual report on Form 10-K of CDW Corporation (the "registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Thomas E. Richards
|
Thomas E. Richards
|
President and Chief Executive Officer
|
CDW Corporation
|
March 9, 2012
|
1.
|
I have reviewed this annual report on Form 10-K of CDW Corporation (the "registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Ann E. Ziegler
|
Ann E. Ziegler
|
Senior Vice President and Chief Financial Officer
|
CDW Corporation
|
March 9, 2012
|
/s/ Thomas E. Richards
|
Thomas E. Richards
|
President and Chief Executive Officer
|
CDW Corporation
|
March 9, 2012
|
/s/ Ann E. Ziegler
|
Ann E. Ziegler
|
Senior Vice President and Chief Financial Officer
|
CDW Corporation
|
March 9, 2012
|