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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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75 Tri-State International
Lincolnshire, Illinois
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60069
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(Address of principal executive offices)
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(Zip Code)
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Title of each class:
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Name of each exchange on which registered
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Common stock, par value $0.01 per share
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NASDAQ Global Select Market
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(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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Our value proposition to our customers
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Our value proposition to our vendor partners
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||
●
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Broad selection of products and multi-branded IT solutions
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●
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Access to over 250,000 customers throughout North America and the United Kingdom
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●
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Value-added services with integration capabilities
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●
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Large and established customer channels
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●
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Highly-skilled specialists and engineers
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●
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Strong distribution and implementation capabilities
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●
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Solutions across a very broad IT landscape
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●
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Value-added solutions and marketing programs that generate end-user demand
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•
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Mobility
: We assist our customers with the selection, procurement and integration of mobile security software, hardware devices, such as smartphones, tablets and notebooks, and cellular wireless activation systems. We also provide mobile device management applications with policy and security management capabilities across a variety of mobile operating systems and platforms.
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•
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Security
: We assess our customers’ security needs and provide them with threat prevention tools in order to protect their networks, servers and applications such as, anti-virus, anti-spam, content filtering, intrusion prevention, firewall and virtual private network services, and network access control. We also design and implement data loss prevention solutions, using data monitoring and encryption across a wide array of devices to ensure the security of customer information, personal employee information and research and development data.
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•
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Data Center Optimization
: We help our customers evaluate their data centers for convergence and optimization opportunities. Our data center optimization solutions consist of server virtualization, physical server consolidation, data storage management and energy-efficient power and cooling systems.
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•
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Cloud Computing
: We provide our customers with a broad portfolio of cloud-based solutions, which are technology delivered as a service. Our cloud offerings include: IaaS, which delivers compute, networking, storage, and data center capabilities via the cloud; SaaS, which connects users to cloud-based software applications; and Platform as a Service (“PaaS”), which enables development and ongoing maintenance of cloud-based solutions. We provide public cloud solutions which reside off customer premises on a public (shared) infrastructure, and private cloud solutions, which reside on customer premises. We also offer hybrid cloud solutions that deliver the benefits of both public and private solutions. Our migration, integration and managed services offerings help our customers simplify cloud adoption, as well as the ongoing management of cloud solutions across the entire IT lifecycle. Dedicated Cloud Client Executives work with our customers to architect cloud solutions meeting their organizational, technology and financial objectives.
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•
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Virtualization
: We design and implement server, storage and desktop virtualization solutions. Virtualization enables our customers to efficiently utilize hardware resources by running multiple, independent, virtual operating systems on a single computer and multiple virtual servers simultaneously on a single server. Virtualization also can separate a desktop environment and associated application software from the hardware device that is used to access it, and provides employees with remote desktop access. Our specialists assist customers with the steps of implementing virtualization solutions, including evaluating network environments, deploying shared storage options and licensing platform software.
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•
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Collaboration
: We provide our customers with communication tools allowing employees to share knowledge, ideas and information among each other and with clients and partners effectively and quickly. Our collaboration solutions unite communications and applications via the integration of products that facilitate the use of multiple enterprise communication methods including email, instant messaging, presence, social media, voice, video, hardware, software and services. We also host cloud-based collaboration solutions.
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Years Ended December 31,
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|||||||||||||||||||
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2015
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2014
(1)
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2013
(1)
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|||||||||||||||
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Dollars in
Millions
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Percentage
of Total Net Sales
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Dollars in
Millions
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Percentage
of Total Net Sales
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Dollars in
Millions
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Percentage
of Total Net Sales
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|||||||||
Notebooks/Mobile Devices
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$
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2,539.4
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19.6
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%
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$
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2,354.0
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19.5
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%
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$
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1,696.5
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15.8
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%
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Netcomm Products
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1,914.9
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14.7
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1,613.3
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13.4
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1,482.7
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13.8
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Enterprise and Data Storage (Including Drives)
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1,065.2
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8.2
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1,024.2
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8.5
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999.3
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9.3
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|||
Other Hardware
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4,756.4
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36.6
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4,551.1
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37.6
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4,184.1
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38.8
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|||
Software
(2)
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2,163.6
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16.7
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2,064.1
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17.1
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1,982.4
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18.4
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|||
Services
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478.0
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3.7
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371.9
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3.1
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332.7
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3.1
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Other
(3)
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71.2
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0.5
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95.9
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0.8
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90.9
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0.8
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Total net sales
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$
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12,988.7
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100.0
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%
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$
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12,074.5
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100.0
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%
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$
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10,768.6
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100.0
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%
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(1)
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Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2015.
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(2)
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The decline in software as a percentage of total net sales is primarily driven by a higher proportion of revenue recorded on a net basis, including SaaS.
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(3)
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Includes items such as delivery charges to customers and certain commission revenue.
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•
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resellers, such as, Computacenter, Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, SCC, Softchoice, World Wide Technology, and many smaller resellers;
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•
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manufacturers who sell directly to customers, such as, Dell, HP Inc., Hewlett Packard Enterprise and Apple;
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•
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large service providers and system integrators, such as, IBM, Accenture, Hewlett Packard Enterprise and Dell;
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•
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e-tailers, such as, Amazon, Newegg, and TigerDirect.com;
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•
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cloud providers, such as, Amazon Web Services, Microsoft and Box; and
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•
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retailers (including their e-commerce activities) such as Staples and Office Depot.
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•
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resellers, such as Computacenter, Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, SCC, Softchoice, World Wide Technology and many smaller resellers;
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•
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manufacturers who sell directly to customers, such as Dell, HP Inc., Hewlett Packard Enterprise and Apple;
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•
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large service providers and system integrators, such as IBM, Accenture, Hewlett Packard Enterprise and Dell;
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•
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e-tailers, such as Amazon, Newegg and TigerDirect.com;
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•
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cloud providers, such as Amazon Web Services, Microsoft and Box; and
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•
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retailers (including their e-commerce activities), such as Staples and Office Depot.
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•
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conduct business with our customers, including delivering services and solutions to them;
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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 while scaling our business.
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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, or affecting, 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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making it more difficult for us to satisfy our obligations with respect to our indebtedness;
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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, including original equipment manufacturers and software publishers;
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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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make loans, capital expenditures or investments or acquisitions;
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•
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receive dividends or other payments from our subsidiaries;
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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;
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•
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transfer or sell assets, including capital stock of subsidiaries; and
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•
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prepay, repurchase or redeem debt.
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•
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will not be required to lend any additional amounts to us;
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•
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could elect to declare all borrowings outstanding thereunder, together with accrued and unpaid interest and fees, to be due and payable; or
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•
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could require us to apply all of our available cash to repay these borrowings.
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•
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our debt holders could declare all outstanding principal and interest to be due and payable;
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•
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the lenders under our senior credit facilities could foreclose against the assets securing the borrowings from them and the lenders under our Revolving Loan and Kelway Credit Facility could terminate their commitments to lend us money; and
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•
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we could be forced into bankruptcy or liquidation.
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•
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changes in financial estimates by any securities analysts who follow our common stock, our failure to meet these estimates or failure of securities analysts to maintain coverage of our common stock;
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•
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downgrades by any securities analysts who follow our common stock;
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•
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future sales of our common stock by our officers, directors and significant stockholders, including Madison Dearborn and Providence Equity;
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•
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market conditions or trends in our industry or the economy as a whole;
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•
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investors’ perceptions of our prospects;
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•
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announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; and
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•
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changes in key personnel.
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•
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authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;
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•
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establish a classified Board of Directors so that not all members of our Board of Directors are elected at one time;
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•
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generally prohibit stockholder action by written consent, requiring all stockholder actions be taken at a meeting of our stockholders;
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•
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provide that special meetings of the stockholders can only be called by or at the direction of our Board of Directors pursuant to a written resolution adopted by the affirmative vote of the majority of the total number of directors that the Company would have if there were no vacancies;
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•
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establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and
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•
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provide that our Board of Directors is expressly authorized to make, alter or repeal our amended and restated bylaws.
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Name
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Age
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Position
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Thomas E. Richards
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61
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Chairman, President and Chief Executive Officer, and Director
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Dennis G. Berger
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51
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Senior Vice President and Chief Coworker Services Officer
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Neal J. Campbell
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54
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Senior Vice President and Chief Marketing Officer
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Christina M. Corley
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48
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Senior Vice President - Corporate Sales
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Douglas E. Eckrote
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51
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Senior Vice President - Strategic Solutions and Services
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Christine A. Leahy
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51
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Senior Vice President - International, Chief Legal Officer and Corporate Secretary
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Christina V. Rother
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52
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Senior Vice President - Public and Advanced Technology Sales
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Jonathan J. Stevens
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46
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Senior Vice President - Operations and Chief Information Officer
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Matthew A. Troka
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45
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Senior Vice President - Product and Partner Management
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Ann E. Ziegler
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57
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Senior Vice President and Chief Financial Officer
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Year Ended December 31,
|
||||||||||||||||||||||
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2015
|
|
2014
|
||||||||||||||||||||
|
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High
|
|
Low
|
|
Dividends Declared per Share
|
|
High
|
|
Low
|
|
Dividends Declared per Share
|
||||||||||||
Fourth quarter
|
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$
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46.92
|
|
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$
|
40.07
|
|
|
$
|
0.1075
|
|
|
$
|
36.08
|
|
|
$
|
27.59
|
|
|
$
|
0.0675
|
|
Third quarter
|
|
$
|
41.99
|
|
|
$
|
33.01
|
|
|
$
|
0.0675
|
|
|
$
|
33.80
|
|
|
$
|
30.07
|
|
|
$
|
0.0425
|
|
Second quarter
|
|
$
|
39.32
|
|
|
$
|
34.19
|
|
|
$
|
0.0675
|
|
|
$
|
32.41
|
|
|
$
|
26.70
|
|
|
$
|
0.0425
|
|
First quarter
|
|
$
|
38.44
|
|
|
$
|
33.21
|
|
|
$
|
0.0675
|
|
|
$
|
27.53
|
|
|
$
|
22.72
|
|
|
$
|
0.0425
|
|
Period
|
|
Total Number of Shares Purchased (in millions)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of a Publicly Announced Program
(1)
(in millions)
|
|
Maximum Dollar Value of Shares that May Yet be Purchased Under the Program
(2)
(in millions)
|
||||||
October 1 through October 31, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
306.7
|
|
November 1 through November 30, 2015
|
|
1.1
|
|
|
$
|
43.77
|
|
|
1.1
|
|
|
$
|
258.7
|
|
December 1 through December 31, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
258.7
|
|
Total
|
|
1.1
|
|
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$
|
43.77
|
|
|
1.1
|
|
|
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(1)
|
On
November 30, 2015
, we completed a public offering of
9.2 million
shares of our common stock by certain selling stockholders, which included
1.2 million
shares sold by the selling stockholders to the underwriters pursuant to the grant of an option that was exercised in full. We did not receive any proceeds from the sale of these shares. Subsequent to the
|
(2)
|
On
November 6, 2014
, we announced that the Board of Directors approved a
$500 million
share repurchase program, which became effective immediately, under which we may repurchase shares of our common stock in the open market or through privately negotiated transactions, depending on share price, market conditions and other factors. The share repurchase program does not obligate us to repurchase any dollar amount or number of shares and repurchases may be commenced or suspended from time to time without prior notice.
|
|
|
June 27, 2013
|
|
December 31, 2013
|
|
December 31, 2014
|
|
December 31, 2015
|
||||||||
CDW Corp
|
|
$
|
100
|
|
|
$
|
138
|
|
|
$
|
209
|
|
|
$
|
249
|
|
S&P MidCap 400 index
|
|
$
|
100
|
|
|
$
|
118
|
|
|
$
|
130
|
|
|
$
|
127
|
|
CDW Peers
|
|
$
|
100
|
|
|
$
|
111
|
|
|
$
|
125
|
|
|
$
|
130
|
|
|
|
|
||||||||||||||||||
|
|
Years Ended December 31,
|
||||||||||||||||||
(dollars and shares in millions, except per share amounts)
|
|
2015
(5)
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
12,988.7
|
|
|
$
|
12,074.5
|
|
|
$
|
10,768.6
|
|
|
$
|
10,128.2
|
|
|
$
|
9,602.4
|
|
Cost of sales
|
|
10,872.9
|
|
|
10,153.2
|
|
|
9,008.3
|
|
|
8,458.6
|
|
|
8,018.9
|
|
|||||
Gross profit
|
|
2,115.8
|
|
|
1,921.3
|
|
|
1,760.3
|
|
|
1,669.6
|
|
|
1,583.5
|
|
|||||
Selling and administrative expenses
|
|
1,226.0
|
|
|
1,110.3
|
|
|
1,120.9
|
|
|
1,029.5
|
|
|
990.1
|
|
|||||
Advertising expense
|
|
147.8
|
|
|
138.0
|
|
|
130.8
|
|
|
129.5
|
|
|
122.7
|
|
|||||
Income from operations
|
|
742.0
|
|
|
673.0
|
|
|
508.6
|
|
|
510.6
|
|
|
470.7
|
|
|||||
Interest expense, net
|
|
(159.5
|
)
|
|
(197.3
|
)
|
|
(250.1
|
)
|
|
(307.4
|
)
|
|
(324.2
|
)
|
|||||
Net loss on extinguishments of long-term debt
|
|
(24.3
|
)
|
|
(90.7
|
)
|
|
(64.0
|
)
|
|
(17.2
|
)
|
|
(118.9
|
)
|
|||||
Gain on remeasurement of equity investment
|
|
98.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other income (expense), net
|
|
(9.3
|
)
|
|
2.7
|
|
|
1.0
|
|
|
0.1
|
|
|
0.7
|
|
|||||
Income before income taxes
|
|
647.0
|
|
|
387.7
|
|
|
195.5
|
|
|
186.1
|
|
|
28.3
|
|
|||||
Income tax expense
|
|
(243.9
|
)
|
|
(142.8
|
)
|
|
(62.7
|
)
|
|
(67.1
|
)
|
|
(11.2
|
)
|
|||||
Net income
|
|
$
|
403.1
|
|
|
$
|
244.9
|
|
|
$
|
132.8
|
|
|
$
|
119.0
|
|
|
$
|
17.1
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
2.37
|
|
|
$
|
1.44
|
|
|
$
|
0.85
|
|
|
$
|
0.82
|
|
|
$
|
0.12
|
|
Diluted
|
|
$
|
2.35
|
|
|
$
|
1.42
|
|
|
$
|
0.84
|
|
|
$
|
0.82
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share
|
|
$
|
0.3100
|
|
|
$
|
0.1950
|
|
|
$
|
0.0425
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
37.6
|
|
|
$
|
344.5
|
|
|
$
|
188.1
|
|
|
$
|
37.9
|
|
|
$
|
99.9
|
|
Working capital
|
|
903.5
|
|
|
985.4
|
|
|
810.9
|
|
|
666.5
|
|
|
538.1
|
|
|||||
Total assets
|
|
6,755.3
|
|
|
6,075.9
|
|
|
5,899.3
|
|
|
5,673.5
|
|
|
5,907.9
|
|
|||||
Total debt and capitalized lease obligations
(1)(2)
|
|
3,262.9
|
|
|
3,166.1
|
|
|
3,226.0
|
|
|
3,724.5
|
|
|
4,006.2
|
|
|||||
Total stockholders’ equity (deficit)
|
|
1,095.9
|
|
|
936.5
|
|
|
711.7
|
|
|
136.5
|
|
|
(7.3
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
|
$
|
90.1
|
|
|
$
|
55.0
|
|
|
$
|
47.1
|
|
|
$
|
41.4
|
|
|
$
|
45.7
|
|
Gross profit as a percentage of net sales
|
|
16.3
|
%
|
|
15.9
|
%
|
|
16.3
|
%
|
|
16.5
|
%
|
|
16.5
|
%
|
|||||
EBITDA
(3)
|
|
$
|
1,033.9
|
|
|
$
|
792.9
|
|
|
$
|
653.8
|
|
|
$
|
703.7
|
|
|
$
|
557.4
|
|
Adjusted EBITDA
(3)
|
|
1,018.5
|
|
|
907.0
|
|
|
808.5
|
|
|
766.6
|
|
|
717.3
|
|
|||||
Non-GAAP net income
(4)
|
|
503.5
|
|
|
409.9
|
|
|
314.3
|
|
|
247.1
|
|
|
198.8
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
|
$
|
277.5
|
|
|
$
|
435.0
|
|
|
$
|
366.3
|
|
|
$
|
317.4
|
|
|
$
|
214.7
|
|
Investing activities
|
|
(354.4
|
)
|
|
(164.8
|
)
|
|
(47.1
|
)
|
|
(41.7
|
)
|
|
(56.0
|
)
|
|||||
Financing activities
|
|
(226.5
|
)
|
|
(112.0
|
)
|
|
(168.3
|
)
|
|
(338.0
|
)
|
|
(95.4
|
)
|
(1)
|
Excludes borrowings of
$439.6 million
,
$332.1 million
,
$256.6 million
,
$249.2 million
and
$278.7 million
, as of December 31, 2015, 2014, 2013, 2012, and 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)
|
Includes capitalized lease obligations of $3.2 million and $0.1 million as of December 31, 2015 and 2014, respectively, which are included in Other liabilities on the Consolidated Balance Sheet.
|
(3)
|
EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. We have included a reconciliation of EBITDA and Adjusted EBITDA in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by us may differ from similar measures used by other companies, even when similar terms are used to identify such measures.
|
|
|
Years Ended December 31,
|
||||||||||||||||||
(in millions)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Net income
|
|
$
|
403.1
|
|
|
$
|
244.9
|
|
|
$
|
132.8
|
|
|
$
|
119.0
|
|
|
$
|
17.1
|
|
Depreciation and amortization
|
|
227.4
|
|
|
207.9
|
|
|
208.2
|
|
|
210.2
|
|
|
204.9
|
|
|||||
Income tax expense
|
|
243.9
|
|
|
142.8
|
|
|
62.7
|
|
|
67.1
|
|
|
11.2
|
|
|||||
Interest expense, net
|
|
159.5
|
|
|
197.3
|
|
|
250.1
|
|
|
307.4
|
|
|
324.2
|
|
|||||
EBITDA
|
|
1,033.9
|
|
|
792.9
|
|
|
653.8
|
|
|
703.7
|
|
|
557.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-cash equity-based compensation
|
|
31.2
|
|
|
16.4
|
|
|
8.6
|
|
|
22.1
|
|
|
19.5
|
|
|||||
Net loss on extinguishment of long-term debt
(a)
|
|
24.3
|
|
|
90.7
|
|
|
64.0
|
|
|
17.2
|
|
|
118.9
|
|
|||||
Loss (income) from equity investments
(b)
|
|
10.1
|
|
|
(2.2
|
)
|
|
(0.6
|
)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|||||
Acquisition and integration expenses
(c)
|
|
10.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gain on remeasurement of equity investment
(d)
|
|
(98.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other adjustments
(e)
|
|
6.9
|
|
|
9.2
|
|
|
82.7
|
|
|
23.9
|
|
|
21.6
|
|
|||||
Adjusted EBITDA
(f)
|
|
$
|
1,018.5
|
|
|
$
|
907.0
|
|
|
$
|
808.5
|
|
|
$
|
766.6
|
|
|
$
|
717.3
|
|
(a)
|
During the years ended December 31, 2015, 2014, 2013, 2012, and 2011, we recorded net losses on extinguishments of long-term debt. The losses 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.
|
(b)
|
Represents our share of net income/loss from our equity investments. Our 35% share of Kelway’s net loss includes our 35% share of an expense related to certain equity awards granted by one of the sellers to Kelway coworkers in July 2015 prior to the acquisition.
|
(c)
|
Primarily includes expenses related to the acquisition of Kelway.
|
(d)
|
Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisition of Kelway.
|
(e)
|
Other adjustments primarily include certain historical retention costs, unusual, non-recurring litigation matters, secondary-offering-related expenses and expenses related to the consolidation of office locations north of Chicago. During the year ended December 31, 2013, we recorded IPO- and secondary-offering related expenses of $75.0 million. For additional information on the IPO- and secondary-offering related expenses, see Note 10 (Stockholder’s Equity) to the accompanying Consolidated Financial Statements.
|
(f)
|
Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway’s financial results.
|
(4)
|
Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, non-cash equity-based compensation, acquisition and integration expenses, and gains and losses from the extinguishment of long-term debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by us may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that non-GAAP net income provides meaningful information regarding our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements.
|
|
|
Years Ended December 31,
|
||||||||||||||||||
(in millions)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Net income
|
|
$
|
403.1
|
|
|
$
|
244.9
|
|
|
$
|
132.8
|
|
|
$
|
119.0
|
|
|
$
|
17.1
|
|
Amortization of intangibles
(a)
|
|
173.9
|
|
|
161.2
|
|
|
161.2
|
|
|
163.7
|
|
|
165.7
|
|
|||||
Non-cash equity-based compensation
|
|
31.2
|
|
|
16.4
|
|
|
8.6
|
|
|
22.1
|
|
|
19.5
|
|
|||||
Non-cash equity-based compensation related to equity investment
(b)
|
|
20.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss on extinguishments of long-term debt
|
|
24.3
|
|
|
90.7
|
|
|
64.0
|
|
|
17.2
|
|
|
118.9
|
|
|||||
Acquisition and integration expenses
(c)
|
|
10.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gain on remeasurement of equity investment
(d)
|
|
(98.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other adjustments
(e)
|
|
3.7
|
|
|
(0.3
|
)
|
|
61.2
|
|
|
(3.3
|
)
|
|
(15.6
|
)
|
|||||
Aggregate adjustment for income taxes
(f)
|
|
(64.8
|
)
|
|
(103.0
|
)
|
|
(113.5
|
)
|
|
(71.6
|
)
|
|
(106.8
|
)
|
|||||
Non-GAAP net income
(g)
|
|
$
|
503.5
|
|
|
$
|
409.9
|
|
|
$
|
314.3
|
|
|
$
|
247.1
|
|
|
$
|
198.8
|
|
(a)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(b)
|
Represents our 35% share of an expense related to certain equity awards granted by one of the sellers to Kelway coworkers in July 2015 prior to our acquisition of Kelway.
|
(c)
|
Primarily includes expenses related to the acquisition of Kelway.
|
(d)
|
Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisition of Kelway.
|
(e)
|
Primarily includes expenses related to the consolidation of office locations north of Chicago and secondary-offering-related expenses. Amount in 2013 primarily relates to IPO- and secondary-offering related expenses.
|
(f)
|
Based on a normalized effective tax rate of 38.0% (39.0% prior to the Kelway acquisition), except for the non-cash equity-based compensation from our equity investment and the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisition of Kelway, which were tax effected at a rate of 35.4%. The aggregate adjustment for income taxes also includes a $4.0 million deferred tax benefit recorded during the three months and year ended December 31, 2015 as a result of a tax rate reduction in the United Kingdom and additional tax expense during the year ended December 31, 2015 of $3.3 million as a result of recording withholding tax on the unremitted earnings of our Canadian subsidiary. Additionally, note that certain acquisition costs are non-deductible.
|
(g)
|
Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway’s financial results.
|
(5)
|
Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway’s financial results.
|
•
|
Our Public segment sales are impacted by government spending policies, budget priorities and revenue levels. An adverse change in any of these factors could cause our Public segment customers to reduce their purchases or to terminate or not renew contracts with us, which could adversely affect our business, results of operations or cash flows. For the year ended December 31, 2015, sales to federal customers increased year-over-year in the mid-teens as we continued to benefit from strategic changes made to better align with new federal government purchasing programs implemented last year. During the same period, sales to state and local customers also increased year-over-year in the mid-teens, driven by the continued focus on public safety. Meeting K-12 customer digital curriculum testing needs through sales of client devices was a significant contributor to education sales throughout 2014 and into early 2015. Education sales decreased slightly in 2015 as a decline in K-12 client device sales was partially offset by an increase in netcomm sales. In 2015, we were named as provider on both the largest number of applications and the largest dollar amounts requested for funds by K-12 customers to support internal connections for the 2014-2015 program year of the U.S. Federal Communications Commission E-Rate program. The amount and timing of E-Rate funds approval and customer implementation is not certain.
|
•
|
An important factor affecting our ability to generate sales and achieve our targeted operating results is the impact of general economic conditions on our customers’ willingness to spend on information technology. During the year ended December 31, 2015, global economic signals were mixed. We continue to closely monitor macroeconomic conditions. Uncertainties related to potential changes in tax and regulatory policy, potential interest rate increases, weakening consumer and business confidence or increased unemployment could result in reduced or deferred spending on information technology products and services by our customers and result in increased competitive pricing pressures.
|
•
|
We believe that our customers’ transition to more complex technology solutions will continue to be an important growth area for us in the future. However, because the market for technology products and services is highly competitive, our success at capitalizing on this transition will be based on our ability to tailor specific solutions to customer needs, the quality and breadth of our product and service offerings, the knowledge and expertise of our sales force, price, product availability and speed of delivery. During the year ended December 31, 2015, customer priorities continued to shift away from last year's focus on client devices towards more integrated solutions, which grew substantially faster than transactional sales.
|
|
Years Ended December 31,
|
||||||||||
(dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Net sales
|
$
|
12,988.7
|
|
|
$
|
12,074.5
|
|
|
$
|
10,768.6
|
|
Gross profit
|
2,115.8
|
|
|
1,921.3
|
|
|
1,760.3
|
|
|||
Income from operations
|
742.0
|
|
|
673.0
|
|
|
508.6
|
|
|||
Net income
|
403.1
|
|
|
244.9
|
|
|
132.8
|
|
|||
Non-GAAP net income
|
503.5
|
|
|
409.9
|
|
|
314.3
|
|
|||
Adjusted EBITDA
|
1,018.5
|
|
|
907.0
|
|
|
808.5
|
|
|||
Average daily sales
|
51.1
|
|
|
47.5
|
|
|
42.4
|
|
|||
Net debt (defined as total debt minus cash and cash equivalents)
(1)
|
3,222.1
|
|
|
2,821.5
|
|
|
3,037.9
|
|
|||
Cash conversion cycle (in days)
(2)
|
21
|
|
|
21
|
|
|
23
|
|
(1)
|
As a result of the adoption of Accounting Standards Update (ASU) 2015-03 during the second quarter of 2015, historical periods have been revised to reflect the change in the presentation of deferred financing costs, which are now shown as a reduction of Long-term debt, instead of being presented as a separate asset on the Consolidated Balance Sheet. In the third quarter of 2015, we adopted ASU 2015-15 which allows entities to present deferred financing costs for line-of-credit arrangements as an asset. We retroactively adjusted the deferred financing costs and Long-term debt liability presented in historical periods to align it to the current period presentation.
|
(2)
|
Cash conversion cycle is defined as days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average.
|
|
|
Years Ended December 31,
|
||||||||||||
|
|
2015
|
|
2014
|
||||||||||
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
(1)
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
||||||
Net sales
|
|
$
|
12,988.7
|
|
|
100.0
|
%
|
|
$
|
12,074.5
|
|
|
100.0
|
%
|
Cost of sales
|
|
10,872.9
|
|
|
83.7
|
|
|
10,153.2
|
|
|
84.1
|
|
||
Gross profit
|
|
2,115.8
|
|
|
16.3
|
|
|
1,921.3
|
|
|
15.9
|
|
||
Selling and administrative expenses
|
|
1,226.0
|
|
|
9.4
|
|
|
1,110.3
|
|
|
9.2
|
|
||
Advertising expense
|
|
147.8
|
|
|
1.1
|
|
|
138.0
|
|
|
1.1
|
|
||
Income from operations
|
|
742.0
|
|
|
5.7
|
|
|
673.0
|
|
|
5.6
|
|
||
Interest expense, net
|
|
(159.5
|
)
|
|
(1.2
|
)
|
|
(197.3
|
)
|
|
(1.6
|
)
|
||
Net loss on extinguishments of long-term debt
|
|
(24.3
|
)
|
|
(0.2
|
)
|
|
(90.7
|
)
|
|
(0.8
|
)
|
||
Gain on remeasurement of equity investment
|
|
98.1
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
||
Other (expense) income, net
|
|
(9.3
|
)
|
|
(0.1
|
)
|
|
2.7
|
|
|
—
|
|
||
Income before income taxes
|
|
647.0
|
|
|
5.0
|
|
|
387.7
|
|
|
3.2
|
|
||
Income tax expense
|
|
(243.9
|
)
|
|
(1.9
|
)
|
|
(142.8
|
)
|
|
(1.2
|
)
|
||
Net income
|
|
$
|
403.1
|
|
|
3.1
|
%
|
|
$
|
244.9
|
|
|
2.0
|
%
|
(1)
|
Percentages may not total due to rounding.
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2015
|
|
2014
|
|
|
|
|
|||||||||||||
(dollars in millions)
|
|
Net Sales
|
|
Percentage
of Total Net Sales |
|
Net Sales
|
|
Percentage
of Total Net Sales |
|
Dollar
Change |
|
Percent
Change (1) |
|||||||||
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Medium/Large
|
|
$
|
5,758.2
|
|
|
44.3
|
%
|
|
$
|
5,485.4
|
|
|
45.4
|
%
|
|
$
|
272.8
|
|
|
5.0
|
%
|
Small Business
|
|
1,058.2
|
|
|
8.2
|
|
|
990.1
|
|
|
8.2
|
|
|
68.1
|
|
|
6.9
|
|
|||
Total Corporate
|
|
6,816.4
|
|
|
52.5
|
|
|
6,475.5
|
|
|
53.6
|
|
|
340.9
|
|
|
5.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Public:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Government
|
|
1,675.9
|
|
|
12.9
|
|
|
1,449.4
|
|
|
12.0
|
|
|
226.5
|
|
|
15.6
|
|
|||
Education
|
|
1,807.0
|
|
|
13.9
|
|
|
1,824.0
|
|
|
15.1
|
|
|
(17.0
|
)
|
|
(0.9
|
)
|
|||
Healthcare
|
|
1,642.6
|
|
|
12.6
|
|
|
1,606.0
|
|
|
13.3
|
|
|
36.6
|
|
|
2.3
|
|
|||
Total Public
|
|
5,125.5
|
|
|
39.4
|
|
|
4,879.4
|
|
|
40.4
|
|
|
246.1
|
|
|
5.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other
|
|
1,046.8
|
|
|
8.1
|
|
|
719.6
|
|
|
6.0
|
|
|
327.2
|
|
|
45.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Net sales
|
|
$
|
12,988.7
|
|
|
100.0
|
%
|
|
$
|
12,074.5
|
|
|
100.0
|
%
|
|
$
|
914.2
|
|
|
7.6
|
%
|
(1)
|
There were
254
selling days for the years ended
December 31, 2015 and 2014
.
|
|
|
Years Ended December 31,
|
|
|
|||||||||||||
|
|
2015
|
|
2014
|
|
|
|||||||||||
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Percent Change
in Income
from Operations
|
|||||||
Segments:
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
|
$
|
470.1
|
|
|
6.9
|
%
|
|
$
|
439.8
|
|
|
6.8
|
%
|
|
6.9
|
%
|
Public
|
|
343.3
|
|
|
6.7
|
|
|
313.2
|
|
|
6.4
|
|
|
9.6
|
|
||
Other
(2)
|
|
43.1
|
|
|
4.1
|
|
|
32.9
|
|
|
4.6
|
|
|
31.0
|
|
||
Headquarters
(3)
|
|
(114.5
|
)
|
|
nm*
|
|
|
(112.9
|
)
|
|
nm*
|
|
|
1.4
|
|
||
Total Income from operations
|
|
$
|
742.0
|
|
|
5.7
|
%
|
|
$
|
673.0
|
|
|
5.6
|
%
|
|
10.3
|
%
|
(1)
|
Segment income from operations includes the segment’s direct operating income, allocations for Headquarters’ costs, allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors.
|
(2)
|
Includes the financial results for our other operating segments, CDW Advanced Services, Canada and five months for Kelway, which do not meet the reportable segment quantitative thresholds.
|
(3)
|
Includes certain Headquarters’ function costs that are not allocated to the segments.
|
(1)
|
We redeemed or repurchased all of or a portion of the remaining aggregate principal amount outstanding. The loss recognized represents the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs and/or premium.
|
(2)
|
We entered into the Revolving Loan, a new $1,250 million five-year senior secured asset-based revolving credit facility. The Revolving Loan replaced our previous revolving loan credit facility that was to mature on June 24, 2016. The loss recognized represents the write-off of a portion of unamortized deferred financing costs.
|
|
|
Years Ended December 31,
|
||||||
(in millions)
|
|
2015
|
|
2014
|
||||
Net income
|
|
$
|
403.1
|
|
|
$
|
244.9
|
|
Amortization of intangibles
(1)
|
|
173.9
|
|
|
161.2
|
|
||
Non-cash equity-based compensation
|
|
31.2
|
|
|
16.4
|
|
||
Non-cash equity-based compensation related to equity investment
(2)
|
|
20.0
|
|
|
—
|
|
||
Net loss on extinguishments of long-term debt
|
|
24.3
|
|
|
90.7
|
|
||
Acquisition and integration expenses
(3)
|
|
10.2
|
|
|
—
|
|
||
Gain on remeasurement of equity investment
(4)
|
|
(98.1
|
)
|
|
—
|
|
||
Other adjustments
(5)
|
|
3.7
|
|
|
(0.3
|
)
|
||
Aggregate adjustment for income taxes
(6)
|
|
(64.8
|
)
|
|
(103.0
|
)
|
||
Non-GAAP net income
(7)
|
|
$
|
503.5
|
|
|
$
|
409.9
|
|
(1)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(2)
|
Represents our 35% share of an expense related to certain equity awards granted by one of the sellers to Kelway coworkers in July 2015 prior to our acquisition of Kelway.
|
(3)
|
Primarily includes expenses related to the acquisition of Kelway.
|
(4)
|
Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisition of Kelway.
|
(5)
|
Primarily includes expenses related to the consolidation of office locations north of Chicago and secondary-offering-related expenses.
|
(6)
|
Based on a normalized effective tax rate of 38.0% (39.0% prior to the Kelway acquisition), except for the non-cash equity-based compensation from our equity investment and the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisition of Kelway, which were tax effected at a rate of 35.4%. The aggregate adjustment for income taxes also includes a $4.0 million deferred tax benefit recorded during the year ended December 31, 2015 as a result of a tax rate reduction in the United Kingdom and additional tax expense during the year ended December 31, 2015 of $3.3 million as a result of recording withholding tax on the unremitted earnings of our Canadian subsidiary. Additionally, note that certain acquisition costs are non-deductible.
|
(7)
|
Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway's financial results.
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
|
2015
|
|
Percentage of
Net Sales
|
|
2014
|
|
Percentage of
Net Sales
|
||||
Net income
|
|
$
|
403.1
|
|
|
|
|
$
|
244.9
|
|
|
|
Depreciation and amortization
|
|
227.4
|
|
|
|
|
207.9
|
|
|
|
||
Income tax expense
|
|
243.9
|
|
|
|
|
142.8
|
|
|
|
||
Interest expense, net
|
|
159.5
|
|
|
|
|
197.3
|
|
|
|
||
EBITDA
|
|
1,033.9
|
|
|
8.0%
|
|
792.9
|
|
|
6.6%
|
||
|
|
|
|
|
|
|
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||
Non-cash equity-based compensation
|
|
31.2
|
|
|
|
|
16.4
|
|
|
|
||
Net loss on extinguishments of long-term debt
|
|
24.3
|
|
|
|
|
90.7
|
|
|
|
||
Loss (income) from equity investments
(1)
|
|
10.1
|
|
|
|
|
(2.2
|
)
|
|
|
||
Acquisition and integration expenses
(2)
|
|
10.2
|
|
|
|
|
—
|
|
|
|
||
Gain on remeasurement of equity investment
(3)
|
|
(98.1
|
)
|
|
|
|
—
|
|
|
|
||
Other adjustments
(4)
|
|
6.9
|
|
|
|
|
9.2
|
|
|
|
||
Total adjustments
|
|
(15.4
|
)
|
|
|
|
114.1
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA
(5)
|
|
$
|
1,018.5
|
|
|
7.8%
|
|
$
|
907.0
|
|
|
7.5%
|
(1)
|
Represents our share of net (income) loss from our equity investments. Our share of Kelway's net loss includes our 35% share of an expense related to certain equity awards granted by one of the sellers to Kelway coworkers in July 2015 prior to the acquisition.
|
(2)
|
Primarily includes expenses related to the acquisition of Kelway.
|
(3)
|
Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisition of Kelway.
|
(4)
|
Primarily includes certain historical retention costs, unusual, non-recurring litigation matters, secondary-offering-related expenses and expenses related to the consolidation of office locations north of Chicago.
|
(5)
|
Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway's financial results.
|
|
|
Years Ended December 31,
|
|
|
|||||||
(in millions)
|
|
2015
|
|
2014
|
|
% Change
|
|||||
Net sales, as reported
|
|
$
|
12,988.7
|
|
|
$
|
12,074.5
|
|
|
7.6
|
%
|
Impact of acquisition
(1)
|
|
(350.7
|
)
|
|
—
|
|
|
|
|||
Organic net sales
|
|
$
|
12,638.0
|
|
|
$
|
12,074.5
|
|
|
4.7
|
%
|
Foreign currency translation
(2)
|
|
—
|
|
|
(71.5
|
)
|
|
|
|||
Organic net sales, on a constant currency basis
|
|
$
|
12,638.0
|
|
|
$
|
12,003.0
|
|
|
5.3
|
%
|
(1)
|
Represents five months for the year ended December 31, 2015 of Kelway's financial results.
|
(2)
|
Represents the effect of translating the prior year results of our Canadian subsidiary at the average exchange rates applicable in the current year.
|
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
||||||||||
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
||||||
Net sales
|
|
$
|
12,074.5
|
|
|
100.0
|
%
|
|
$
|
10,768.6
|
|
|
100.0
|
%
|
Cost of sales
|
|
10,153.2
|
|
|
84.1
|
|
|
9,008.3
|
|
|
83.7
|
|
||
Gross profit
|
|
1,921.3
|
|
|
15.9
|
|
|
1,760.3
|
|
|
16.3
|
|
||
Selling and administrative expenses
|
|
1,110.3
|
|
|
9.2
|
|
|
1,120.9
|
|
|
10.4
|
|
||
Advertising expense
|
|
138.0
|
|
|
1.1
|
|
|
130.8
|
|
|
1.2
|
|
||
Income from operations
|
|
673.0
|
|
|
5.6
|
|
|
508.6
|
|
|
4.7
|
|
||
Interest expense, net
|
|
(197.3
|
)
|
|
(1.6
|
)
|
|
(250.1
|
)
|
|
(2.3
|
)
|
||
Net loss on extinguishments of long-term debt
|
|
(90.7
|
)
|
|
(0.8
|
)
|
|
(64.0
|
)
|
|
(0.6
|
)
|
||
Other income, net
|
|
2.7
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||
Income before income taxes
|
|
387.7
|
|
|
3.2
|
|
|
195.5
|
|
|
1.8
|
|
||
Income tax expense
|
|
(142.8
|
)
|
|
(1.2
|
)
|
|
(62.7
|
)
|
|
(0.6
|
)
|
||
Net income
|
|
$
|
244.9
|
|
|
2.0
|
%
|
|
$
|
132.8
|
|
|
1.2
|
%
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2014
|
|
2013
|
|
|
|
|
|||||||||||||
(dollars in millions)
|
|
Net Sales
|
|
Percentage
of Total Net sales
|
|
Net Sales
|
|
Percentage
of Total Net Sales
|
|
Dollar
Change
|
|
Percent
Change
(1)
|
|||||||||
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Medium / Large
|
|
$
|
5,485.4
|
|
|
45.4
|
%
|
|
$
|
5,052.7
|
|
|
46.9
|
%
|
|
$
|
432.7
|
|
|
8.6
|
%
|
Small Business
|
|
990.1
|
|
|
8.2
|
|
|
907.4
|
|
|
8.4
|
|
|
82.7
|
|
|
9.1
|
|
|||
Total Corporate
|
|
6,475.5
|
|
|
53.6
|
|
|
5,960.1
|
|
|
55.3
|
|
|
515.4
|
|
|
8.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Public:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Government
|
|
1,449.4
|
|
|
12.0
|
|
|
1,250.6
|
|
|
11.6
|
|
|
198.8
|
|
|
15.9
|
|
|||
Education
|
|
1,824.0
|
|
|
15.1
|
|
|
1,449.0
|
|
|
13.5
|
|
|
375.0
|
|
|
25.9
|
|
|||
Healthcare
|
|
1,606.0
|
|
|
13.3
|
|
|
1,464.9
|
|
|
13.6
|
|
|
141.1
|
|
|
9.6
|
|
|||
Total Public
|
|
4,879.4
|
|
|
40.4
|
|
|
4,164.5
|
|
|
38.7
|
|
|
714.9
|
|
|
17.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other
|
|
719.6
|
|
|
6.0
|
|
|
644.0
|
|
|
6.0
|
|
|
75.6
|
|
|
11.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Net sales
|
|
$
|
12,074.5
|
|
|
100.0
|
%
|
|
$
|
10,768.6
|
|
|
100.0
|
%
|
|
$
|
1,305.9
|
|
|
12.1
|
%
|
(1)
|
There were 254 selling days for the years ended December 31, 2014 and 2013.
|
|
|
Years Ended December 31,
|
|
|
|||||||||||||
|
|
2014
|
|
2013
|
|
|
|||||||||||
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Percent Change
in Income
from Operations
|
|||||||
Segments:
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
|
$
|
439.8
|
|
|
6.8
|
%
|
|
$
|
363.3
|
|
|
6.1
|
%
|
|
21.1
|
%
|
Public
|
|
313.2
|
|
|
6.4
|
|
|
246.5
|
|
|
5.9
|
|
|
27.1
|
|
||
Other
|
|
32.9
|
|
|
4.6
|
|
|
27.2
|
|
|
4.2
|
|
|
20.9
|
|
||
Headquarters
(2)
|
|
(112.9
|
)
|
|
nm*
|
|
|
(128.4
|
)
|
|
nm*
|
|
|
12.0
|
|
||
Total Income from operations
|
|
$
|
673.0
|
|
|
5.6
|
%
|
|
$
|
508.6
|
|
|
4.7
|
%
|
|
32.3
|
%
|
(1)
|
Segment income from operations includes the segment’s direct operating income and allocations for Headquarters’ costs, allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors.
|
(2)
|
Includes certain Headquarters’ function costs that are not allocated to the segments.
|
(1)
|
We redeemed or repurchased all or a portion of the aggregate principal amount outstanding. The loss recognized represents the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs and/or unamortized premium.
|
(2)
|
We entered into the Revolving Loan, a new $1,250 million five-year senior secured asset-based revolving credit facility. The Revolving Loan replaced our previous revolving loan credit facility that was to mature on June 24, 2016. The loss recognized represents the write-off of a portion of unamortized deferred financing costs.
|
(3)
|
We entered into the Term Loan, a new $1,350 million seven-year Senior Secured Term Loan Facility. Substantially all of the proceeds were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility. The loss recognized represents the write-off of a portion of unamortized deferred financing costs.
|
|
|
Years Ended December 31,
|
||||||
(in millions)
|
|
2014
|
|
2013
|
||||
Net income
|
|
$
|
244.9
|
|
|
$
|
132.8
|
|
Amortization of intangibles
(1)
|
|
161.2
|
|
|
161.2
|
|
||
Non-cash equity-based compensation
|
|
16.4
|
|
|
8.6
|
|
||
Net loss on extinguishments of long-term debt
|
|
90.7
|
|
|
64.0
|
|
||
Other adjustments
(2)
|
|
(0.3
|
)
|
|
61.2
|
|
||
Aggregate adjustment for income taxes
(3)
|
|
(103.0
|
)
|
|
(113.5
|
)
|
||
Non-GAAP net income
|
|
$
|
409.9
|
|
|
$
|
314.3
|
|
(1)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(2)
|
Includes ($0.6 million) and ($6.3 million) of unusual, non-recurring litigation matters, ($1.1 million) and ($7.5 million) of adjustments to interest expense resulting from debt extinguishments and $1.4 million and $75.0 million of IPO and secondary-offering related expenses in 2014 and 2013, respectively.
|
(3)
|
Based on a normalized effective tax rate of 39.0%.
|
|
Years Ended December 31,
|
|
|
||||||||
(in millions)
|
2014
|
|
Percentage of
Net Sales
|
|
2013
|
|
Percentage of
Net Sales |
||||
Net income
|
$
|
244.9
|
|
|
|
|
$
|
132.8
|
|
|
|
Depreciation and amortization
|
207.9
|
|
|
|
|
208.2
|
|
|
|
||
Income tax expense
|
142.8
|
|
|
|
|
62.7
|
|
|
|
||
Interest expense, net
|
197.3
|
|
|
|
|
250.1
|
|
|
|
||
EBITDA
|
792.9
|
|
|
6.6%
|
|
653.8
|
|
|
6.1%
|
||
|
|
|
|
|
|
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||
Non-cash equity-based compensation
|
16.4
|
|
|
|
|
8.6
|
|
|
|
||
Net loss on extinguishments of long-term debt
|
90.7
|
|
|
|
|
64.0
|
|
|
|
||
Income from equity investments
|
(2.2
|
)
|
|
|
|
(0.6
|
)
|
|
|
||
Other adjustments
(1)
|
9.2
|
|
|
|
|
82.7
|
|
|
|
||
Total adjustments
|
114.1
|
|
|
|
|
154.7
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
$
|
907.0
|
|
|
7.5%
|
|
$
|
808.5
|
|
|
7.5%
|
(1)
|
Primarily includes ($0.9 million) and ($4.1 million) of unusual, non-recurring litigation matters, $8.7 million and $9.2 million of historical retention costs and $1.4 million and $75.0 million of IPO and secondary-offering related expenses in 2014 and 2013, respectively.
|
Dividend Amount
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
$0.0675
|
|
February 10, 2015
|
|
February 25, 2015
|
|
March 10, 2015
|
$0.0675
|
|
May 7, 2015
|
|
May 26, 2015
|
|
June 10, 2015
|
$0.0675
|
|
August 3, 2015
|
|
August 25, 2015
|
|
September 10, 2015
|
$0.1075
|
|
November 4, 2015
|
|
November 25, 2015
|
|
December 10, 2015
|
$0.3100
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
277.5
|
|
|
$
|
435.0
|
|
|
$
|
366.3
|
|
Investing activities
|
(354.4
|
)
|
|
(164.8
|
)
|
|
(47.1
|
)
|
|||
|
|
|
|
|
|
||||||
Net change in accounts payable - inventory financing
|
95.9
|
|
|
75.5
|
|
|
7.4
|
|
|||
Other financing activities
|
(322.4
|
)
|
|
(187.5
|
)
|
|
(175.7
|
)
|
|||
Financing activities
|
(226.5
|
)
|
|
(112.0
|
)
|
|
(168.3
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
(3.5
|
)
|
|
(1.8
|
)
|
|
(0.7
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(306.9
|
)
|
|
$
|
156.4
|
|
|
$
|
150.2
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
2015
|
|
2014
|
|
Dollar Change
|
||||||
Net income
|
$
|
403.1
|
|
|
$
|
244.9
|
|
|
$
|
158.2
|
|
Adjustments for the impact of non-cash items
(1)
|
150.3
|
|
|
231.9
|
|
|
(81.6
|
)
|
|||
Net income adjusted for the impact of non-cash items
(2)
|
553.4
|
|
|
476.8
|
|
|
76.6
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
(3)
|
(342.6
|
)
|
|
(117.6
|
)
|
|
(225.0
|
)
|
|||
Merchandise inventory
(4)
|
(31.5
|
)
|
|
44.2
|
|
|
(75.7
|
)
|
|||
Accounts payable-trade
(5)
|
100.5
|
|
|
43.7
|
|
|
56.8
|
|
|||
Other
|
(2.3
|
)
|
|
(12.1
|
)
|
|
9.8
|
|
|||
Net cash provided by operating activities
|
$
|
277.5
|
|
|
$
|
435.0
|
|
|
$
|
(157.5
|
)
|
(1)
|
Includes items such as Deferred income taxes, Depreciation and amortization, Equity-based compensation expense, Gain on remeasurement of equity method investment, Loss (income) from equity method investment and net loss on extinguishments of long-term debt.
|
(2)
|
The increase in cash flows reflected stronger operating results driven by organic sales growth and the impact of consolidating five months of Kelway financial results. A decrease in the net loss on extinguishments of long-term debt, as a result of fewer debt refinancing activities in 2015 as compared to 2014, and lower interest expense, partially offset by higher income tax expense, also contributed to the strong operating results.
|
(3)
|
The decrease in cash flows was driven by a higher accounts receivable balance at December 31, 2015 driven by higher sales in our Public segment where customers generally take longer to pay than customers in our Corporate segment, slower government payments in certain states due to budget issues and the lower accounts receivable balance at December 31, 2014 driven by early payments from certain customers.
|
(4)
|
The decrease in cash flows was primarily due to the lower inventory balance as of December 31, 2014 as a result of the timing of inventory receipts and earlier than expected inventory shipments at the end of 2014 due to accelerated customer roll-outs and an increase in inventory on-hand as of December 31, 2015 to support the growth in the business.
|
(5)
|
The increase in cash flows was primarily due to the timing of inventory purchases, longer payment terms with certain vendors and growth in the business.
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
Dollar Change
|
||||||
Net income
|
$
|
244.9
|
|
|
$
|
132.8
|
|
|
$
|
112.1
|
|
Adjustments for the impact of non-cash items
(1)
|
231.9
|
|
|
280.6
|
|
|
(48.7
|
)
|
|||
Net income adjusted for the impact of non-cash items
(2)
|
476.8
|
|
|
413.4
|
|
|
63.4
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(117.6
|
)
|
|
(170.8
|
)
|
|
53.2
|
|
|||
Merchandise inventory
(3)
|
44.2
|
|
|
(67.5
|
)
|
|
111.7
|
|
|||
Accounts payable-trade
(4)
|
43.7
|
|
|
146.1
|
|
|
(102.4
|
)
|
|||
Other
|
(12.1
|
)
|
|
45.1
|
|
|
(57.2
|
)
|
|||
Net cash provided by operating activities
|
$
|
435.0
|
|
|
$
|
366.3
|
|
|
$
|
68.7
|
|
(1)
|
Includes items such as depreciation and amortization, equity-based compensation expense and net loss on extinguishments of long-term debt.
|
(2)
|
The increase in cash flows reflected stronger operating results in 2014 compared to 2013.
|
(3)
|
The increase in cash flows was primarily due to the timing of inventory receipts and earlier than expected inventory shipments at the end of 2014 due to accelerated customer rollouts.
|
(4)
|
The decline in cash flows was driven by the timing of inventory purchases at the end of 2014 versus 2013.
|
(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 for the same three-month period. Also incorporates components of other miscellaneous receivables.
|
(2)
|
Represents the rolling three-month average of the balance of Merchandise inventory at the end of the period divided by average daily cost of goods sold for the same three-month period.
|
(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 for the same three-month period.
|
•
|
On August 1, 2015, we consolidated Kelway’s Term Loan and Kelway’s Revolving Credit Facility. Kelway’s Term Loan is denominated in British Pounds. The Kelway Revolving Credit Facility is a multi-currency revolving credit facility under which Kelway is permitted to borrow an aggregate amount of £
50.0 million
(
$73.7 million
) as of December 31, 2015.
|
•
|
On March 3, 2015, we completed the issuance of $525.0 million principal amount of 5.0% Senior Notes due 2023 which will mature on September 1, 2023.
|
•
|
On March 3, 2015, we redeemed the remaining $503.9 million aggregate principal amount of the 8.5% Senior Notes due 2019, plus accrued and unpaid interest through the date of redemption, April 2, 2015.
|
|
Payments Due by Period
|
||||||||||||||||||
(in millions)
|
Total
|
|
< 1 year
|
|
1-3 years
|
|
4-5 years
|
|
> 5 years
|
||||||||||
Term Loan
(1)
|
$
|
1,703.4
|
|
|
$
|
63.9
|
|
|
$
|
126.3
|
|
|
$
|
1,513.2
|
|
|
$
|
—
|
|
Kelway Term Loan
(1)
|
90.9
|
|
|
13.5
|
|
|
77.4
|
|
|
—
|
|
|
—
|
|
|||||
Senior Notes due 2022
(2)
|
852.0
|
|
|
36.0
|
|
|
72.0
|
|
|
72.0
|
|
|
672.0
|
|
|||||
Senior Notes due 2023
(2)
|
735.1
|
|
|
26.3
|
|
|
52.5
|
|
|
52.5
|
|
|
603.8
|
|
|||||
Senior Notes due 2024
(2)
|
859.7
|
|
|
31.6
|
|
|
63.3
|
|
|
63.3
|
|
|
701.5
|
|
|||||
Operating leases
(3)
|
143.2
|
|
|
22.5
|
|
|
41.7
|
|
|
37.1
|
|
|
41.9
|
|
|||||
Asset retirement obligations
(4)
|
1.8
|
|
|
0.8
|
|
|
0.5
|
|
|
0.3
|
|
|
0.2
|
|
|||||
Total
|
$
|
4,386.1
|
|
|
$
|
194.6
|
|
|
$
|
433.7
|
|
|
$
|
1,738.4
|
|
|
$
|
2,019.4
|
|
(1)
|
Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest payments for variable rate debt were calculated using interest rates as of December 31, 2015. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness.
|
(2)
|
Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest on the Senior Notes is calculated using the stated interest rates. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness.
|
(3)
|
Includes the minimum lease payments for non-cancelable operating leases of properties and equipment used in our operations. Additionally, included in these amounts are future minimum lease payments commencing in the fourth quarter of 2016 that relate to the lease entered into in December 2014 for our new office location north of Chicago. Also reflected in these amounts is the future expiration of two leases in the first quarter of 2016 for facilities currently in use by us which will be consolidated into an office location north of Chicago and accordingly, these leases will not be renewed. Capital leases included in property and equipment are not material.
|
(4)
|
Represent commitments to return property subject to operating leases to original condition upon lease termination.
|
|
As of December 31, 2014
|
||||
(in millions)
|
Percentage
Fair Value Exceeds Carrying Value |
|
Discount Rate
Applied to Estimated Future Cash Flows |
||
Corporate
|
169
|
%
|
|
9.0
|
%
|
Public
|
147
|
%
|
|
9.0
|
%
|
Canada
|
276
|
%
|
|
9.3
|
%
|
CDW Advanced Services
|
78
|
%
|
|
11.5
|
%
|
|
Page
|
/s/ Ernst & Young LLP
|
Chicago, Illinois
|
February 24, 2016
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except per-share amounts)
|
|||||||
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
37.6
|
|
|
$
|
344.5
|
|
Accounts receivable, net of allowance for doubtful accounts of $6.0 and $5.7, respectively
|
2,017.4
|
|
|
1,561.1
|
|
||
Merchandise inventory
|
393.1
|
|
|
337.5
|
|
||
Miscellaneous receivables
|
198.4
|
|
|
155.6
|
|
||
Prepaid expenses and other
|
144.3
|
|
|
54.7
|
|
||
Total current assets
|
2,790.8
|
|
|
2,453.4
|
|
||
Property and equipment, net
|
175.4
|
|
|
137.2
|
|
||
Equity investments
|
—
|
|
|
86.7
|
|
||
Goodwill
|
2,500.4
|
|
|
2,217.6
|
|
||
Other intangible assets, net
|
1,276.4
|
|
|
1,168.8
|
|
||
Other assets
|
12.3
|
|
|
12.2
|
|
||
Total assets
|
$
|
6,755.3
|
|
|
$
|
6,075.9
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable-trade
|
$
|
866.5
|
|
|
$
|
704.0
|
|
Accounts payable-inventory financing
|
439.6
|
|
|
332.1
|
|
||
Current maturities of long-term debt
|
27.2
|
|
|
15.4
|
|
||
Deferred revenue
|
151.9
|
|
|
81.3
|
|
||
Accrued expenses:
|
|
|
|
||||
Compensation
|
120.4
|
|
|
130.1
|
|
||
Interest
|
25.1
|
|
|
28.1
|
|
||
Sales taxes
|
38.1
|
|
|
29.1
|
|
||
Advertising
|
52.3
|
|
|
34.0
|
|
||
Other
|
166.2
|
|
|
113.9
|
|
||
Total current liabilities
|
1,887.3
|
|
|
1,468.0
|
|
||
Long-term liabilities:
|
|
|
|
||||
Debt
|
3,232.5
|
|
|
3,150.6
|
|
||
Deferred income taxes
|
469.6
|
|
|
475.0
|
|
||
Other liabilities
|
70.0
|
|
|
45.8
|
|
||
Total long-term liabilities
|
3,772.1
|
|
|
3,671.4
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
|||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 100.0 shares authorized; and no shares issued or outstanding for both periods
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 1,000.0 shares authorized; 168.2 and 172.2 shares issued and outstanding, respectively
|
1.7
|
|
|
1.7
|
|
||
Paid-in capital
|
2,806.9
|
|
|
2,711.9
|
|
||
Accumulated deficit
|
(1,651.6
|
)
|
|
(1,760.5
|
)
|
||
Accumulated other comprehensive loss
|
(61.1
|
)
|
|
(16.6
|
)
|
||
Total stockholders’ equity
|
1,095.9
|
|
|
936.5
|
|
||
Total liabilities and stockholders’ equity
|
$
|
6,755.3
|
|
|
$
|
6,075.9
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per-share amounts)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net sales
|
$
|
12,988.7
|
|
|
$
|
12,074.5
|
|
|
$
|
10,768.6
|
|
Cost of sales
|
10,872.9
|
|
|
10,153.2
|
|
|
9,008.3
|
|
|||
Gross profit
|
2,115.8
|
|
|
1,921.3
|
|
|
1,760.3
|
|
|||
Selling and administrative expenses
|
1,226.0
|
|
|
1,110.3
|
|
|
1,120.9
|
|
|||
Advertising expense
|
147.8
|
|
|
138.0
|
|
|
130.8
|
|
|||
Income from operations
|
742.0
|
|
|
673.0
|
|
|
508.6
|
|
|||
Interest expense, net
|
(159.5
|
)
|
|
(197.3
|
)
|
|
(250.1
|
)
|
|||
Net loss on extinguishments of long-term debt
|
(24.3
|
)
|
|
(90.7
|
)
|
|
(64.0
|
)
|
|||
Gain on remeasurement of equity investment
|
98.1
|
|
|
—
|
|
|
—
|
|
|||
Other (expense) income, net
|
(9.3
|
)
|
|
2.7
|
|
|
1.0
|
|
|||
Income before income taxes
|
647.0
|
|
|
387.7
|
|
|
195.5
|
|
|||
Income tax expense
|
(243.9
|
)
|
|
(142.8
|
)
|
|
(62.7
|
)
|
|||
Net income
|
$
|
403.1
|
|
|
$
|
244.9
|
|
|
$
|
132.8
|
|
|
|
|
|
|
|
||||||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.37
|
|
|
$
|
1.44
|
|
|
$
|
0.85
|
|
Diluted
|
$
|
2.35
|
|
|
$
|
1.42
|
|
|
$
|
0.84
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
170.3
|
|
|
170.6
|
|
|
156.6
|
|
|||
Diluted
|
171.8
|
|
|
172.8
|
|
|
158.7
|
|
|||
|
|
|
|
|
|
||||||
Cash dividends declared per common share
|
$
|
0.3100
|
|
|
$
|
0.1950
|
|
|
$
|
0.0425
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
|
||||||||||||
|
|
Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
|
$
|
403.1
|
|
|
$
|
244.9
|
|
|
$
|
132.8
|
|
Foreign currency translation (net of tax benefits of $0.3 million, $0.5 million and $0 million, respectively)
|
|
(44.5
|
)
|
|
(10.3
|
)
|
|
(6.7
|
)
|
|||
Other comprehensive loss
|
|
(44.5
|
)
|
|
(10.3
|
)
|
|
(6.7
|
)
|
|||
Comprehensive income
|
|
$
|
358.6
|
|
|
$
|
234.6
|
|
|
$
|
126.1
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions)
|
||||||||||||||||||||||||||||||
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive (Loss) Income
|
|
Total
Stockholders’ Equity |
||||||||||||||
Balance at December 31, 2012
|
|
—
|
|
|
$
|
—
|
|
|
145.2
|
|
|
$
|
1.4
|
|
|
$
|
2,207.7
|
|
|
$
|
(2,073.0
|
)
|
|
$
|
0.4
|
|
|
$
|
136.5
|
|
Equity-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46.6
|
|
|
—
|
|
|
—
|
|
|
46.6
|
|
||||||
Issuance of common stock
|
|
—
|
|
|
—
|
|
|
26.8
|
|
|
0.3
|
|
|
424.4
|
|
|
—
|
|
|
—
|
|
|
424.7
|
|
||||||
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.3
|
)
|
|
|
|
|
(7.3
|
)
|
||||||
Reclassification to goodwill for accrued charitable contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
||||||
Incentive compensation plan units withheld for taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.1
|
)
|
|
—
|
|
|
(24.1
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
132.8
|
|
|
—
|
|
|
132.8
|
|
||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
|
(6.7
|
)
|
||||||
Balance at December 31, 2013
|
|
—
|
|
|
$
|
—
|
|
|
172.0
|
|
|
$
|
1.7
|
|
|
$
|
2,688.1
|
|
|
$
|
(1,971.8
|
)
|
|
$
|
(6.3
|
)
|
|
$
|
711.7
|
|
Equity-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.4
|
|
|
—
|
|
|
—
|
|
|
16.4
|
|
||||||
Stock option exercises
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||||
Excess tax benefits from equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Coworker stock purchase plan
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.6
|
)
|
|
—
|
|
|
(33.6
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
244.9
|
|
|
—
|
|
|
244.9
|
|
||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.3
|
)
|
|
(10.3
|
)
|
||||||
Balance at December 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
172.2
|
|
|
$
|
1.7
|
|
|
$
|
2,711.9
|
|
|
$
|
(1,760.5
|
)
|
|
$
|
(16.6
|
)
|
|
$
|
936.5
|
|
Equity-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.3
|
|
|
—
|
|
|
—
|
|
|
28.3
|
|
||||||
Stock option exercises
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
||||||
Common stock issued for equity-based compensation
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Excess tax benefits from equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
||||||
Coworker stock purchase plan
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
8.7
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
||||||
Common stock issued for acquisition of business
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
55.0
|
|
|
—
|
|
|
—
|
|
|
55.0
|
|
||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52.9
|
)
|
|
—
|
|
|
(52.9
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
403.1
|
|
|
—
|
|
|
403.1
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
(6.3
|
)
|
|
—
|
|
|
—
|
|
|
(241.3
|
)
|
|
—
|
|
|
(241.3
|
)
|
||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44.5
|
)
|
|
(44.5
|
)
|
||||||
Balance at December 31, 2015
|
|
—
|
|
|
$
|
—
|
|
|
168.2
|
|
|
$
|
1.7
|
|
|
$
|
2,806.9
|
|
|
$
|
(1,651.6
|
)
|
|
$
|
(61.1
|
)
|
|
$
|
1,095.9
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
403.1
|
|
|
$
|
244.9
|
|
|
$
|
132.8
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
227.4
|
|
|
207.9
|
|
|
208.2
|
|
|||
Equity-based compensation expense
|
31.2
|
|
|
16.4
|
|
|
46.6
|
|
|||
Deferred income taxes
|
(54.5
|
)
|
|
(89.1
|
)
|
|
(48.7
|
)
|
|||
Amortization of deferred financing costs, debt premium and debt discount, net
|
6.4
|
|
|
6.4
|
|
|
8.8
|
|
|||
Net loss on extinguishments of long-term debt
|
24.3
|
|
|
90.7
|
|
|
64.0
|
|
|||
Loss (income) from equity investments
|
11.2
|
|
|
(1.2
|
)
|
|
—
|
|
|||
Gain on remeasurement of equity investment
|
(98.1
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
2.4
|
|
|
0.8
|
|
|
1.7
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(342.6
|
)
|
|
(117.6
|
)
|
|
(170.8
|
)
|
|||
Merchandise inventory
|
(31.5
|
)
|
|
44.2
|
|
|
(67.5
|
)
|
|||
Other assets
|
(71.2
|
)
|
|
(18.7
|
)
|
|
(10.1
|
)
|
|||
Accounts payable-trade
|
100.5
|
|
|
43.7
|
|
|
146.1
|
|
|||
Other current liabilities
|
47.5
|
|
|
1.7
|
|
|
64.1
|
|
|||
Long-term liabilities
|
21.4
|
|
|
4.9
|
|
|
(8.9
|
)
|
|||
Net cash provided by operating activities
|
277.5
|
|
|
435.0
|
|
|
366.3
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(90.1
|
)
|
|
(55.0
|
)
|
|
(47.1
|
)
|
|||
Payment for equity investment
|
—
|
|
|
(86.8
|
)
|
|
—
|
|
|||
Payment of accrued charitable contribution related to the MPK Coworker Incentive Plan II
|
—
|
|
|
(20.9
|
)
|
|
—
|
|
|||
Premium payments on interest rate cap agreements
|
(0.5
|
)
|
|
(2.1
|
)
|
|
—
|
|
|||
Acquisition of business, net of cash acquired
|
(263.8
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(354.4
|
)
|
|
(164.8
|
)
|
|
(47.1
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from borrowings under revolving credit facility
|
314.5
|
|
|
—
|
|
|
63.0
|
|
|||
Repayments of borrowings under revolving credit facility
|
(314.5
|
)
|
|
—
|
|
|
(63.0
|
)
|
|||
Repayments of long-term debt
|
(32.8
|
)
|
|
(15.4
|
)
|
|
(51.1
|
)
|
|||
Proceeds from issuance of long-term debt
|
525.0
|
|
|
1,175.0
|
|
|
1,535.2
|
|
|||
Payments to extinguish long-term debt
|
(525.3
|
)
|
|
(1,299.0
|
)
|
|
(2,047.4
|
)
|
|||
Payments of debt financing costs
|
(6.8
|
)
|
|
(21.9
|
)
|
|
(6.1
|
)
|
|||
Net change in accounts payable-inventory financing
|
95.9
|
|
|
75.5
|
|
|
7.4
|
|
|||
Proceeds from issuance of common stock
|
—
|
|
|
—
|
|
|
424.7
|
|
|||
Proceeds from stock option exercises
|
2.4
|
|
|
1.3
|
|
|
—
|
|
|||
Proceeds from Coworker Stock Purchase Plan
|
8.7
|
|
|
5.8
|
|
|
—
|
|
|||
Repurchases of common stock
|
(241.3
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||
Dividends paid
|
(52.9
|
)
|
|
(33.6
|
)
|
|
(7.3
|
)
|
|||
Excess tax benefits from equity-based compensation
|
0.6
|
|
|
0.3
|
|
|
0.6
|
|
|||
Payment of incentive compensation plan withholding taxes
|
—
|
|
|
—
|
|
|
(24.1
|
)
|
|||
Net cash used in financing activities
|
(226.5
|
)
|
|
(112.0
|
)
|
|
(168.3
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(3.5
|
)
|
|
(1.8
|
)
|
|
(0.7
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(306.9
|
)
|
|
156.4
|
|
|
150.2
|
|
|||
Cash and cash equivalents – beginning of period
|
344.5
|
|
|
188.1
|
|
|
37.9
|
|
|||
Cash and cash equivalents – end of period
|
$
|
37.6
|
|
|
$
|
344.5
|
|
|
$
|
188.1
|
|
Supplementary disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
(154.6
|
)
|
|
$
|
(195.8
|
)
|
|
$
|
(267.6
|
)
|
Taxes paid, net
|
$
|
(300.2
|
)
|
|
$
|
(241.2
|
)
|
|
$
|
(82.5
|
)
|
|
|
|
|
|
|
1.
|
Description of Business and Summary of Significant Accounting Policies
|
Classification
|
Estimated
Useful Lives
|
Machinery and equipment
|
5 to 10 years
|
Building and leasehold improvements
|
4 to 25 years
|
Computer and data processing equipment
|
3 to 5 years
|
Computer software
|
3 to 5 years
|
Furniture and fixtures
|
4 to 10 years
|
Classification
|
Estimated
Useful Lives
|
Customer relationships and contracts
|
3 to 14 years
|
Trade name
|
generally 20 years
|
Internally developed software
|
2 to 5 years
|
Other
|
1 to 10 years
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Foreign currency translation
|
|
$
|
(61.1
|
)
|
|
$
|
(16.6
|
)
|
|
$
|
(6.3
|
)
|
Accumulated other comprehensive loss
|
|
$
|
(61.1
|
)
|
|
$
|
(16.6
|
)
|
|
$
|
(6.3
|
)
|
2.
|
Recent Accounting Pronouncements
|
|
|
December 31, 2014
|
||||||
(in millions)
|
|
As Previously Reported
|
|
As Reported Upon Adoption of ASU 2015-03 and ASU 2015-15
|
||||
Deferred financing costs, net
|
|
$
|
33.0
|
|
|
$
|
—
|
|
Other assets
|
|
$
|
3.2
|
|
|
$
|
12.2
|
|
Long-term debt
|
|
$
|
(3,174.6
|
)
|
|
$
|
(3,150.6
|
)
|
3.
|
Acquisition
|
(in millions)
|
|
Acquisition-Date Fair Value
|
||
Cash
|
|
$
|
291.6
|
|
Fair value of CDW common stock
(1)
|
|
33.2
|
|
|
Fair value of previously held equity investment on the date of acquisition
(2)
|
|
174.9
|
|
|
Total consideration
|
|
$
|
499.7
|
|
(1)
|
The Company issued
1.6 million
shares of CDW common stock. The fair value of the common stock was based on the closing market price on
July 31, 2015
, adjusted for the lack of marketability as the shares of CDW common stock issued to certain sellers are subject to a
three
-year lock up restriction from
August 1, 2015
. One of the sellers granted
0.6 million
stock options to certain Kelway coworkers over his shares of CDW common stock received in the transaction. The fair value of these stock options was
$21.8 million
, which has been accounted for as post-combination stock-based compensation and is being amortized over the weighted-average requisite service period of
3.2
years and recorded in Selling and administrative expenses in the Consolidated Statements of Operations.
|
(2)
|
As a result of the Company obtaining control over Kelway, the Company’s previously held
35%
equity investment was remeasured to fair value, resulting in a gain of
$98.1 million
included in Gain on remeasurement of equity investment in the Consolidated Statements of Operations. The fair value of the previously held equity investment was determined by management with the assistance of a third party valuation firm, based on information available at the acquisition date.
|
(1)
|
The fair values assigned to the tangible and intangible assets acquired and liabilities assumed were based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. These fair values are subject to change within the measurement period. In the
fourth
quarter of
2015
, the Company recorded a reduction of
$8.6 million
to goodwill, primarily related to adjustments to taxes, merchandise inventory and deferred revenue.
|
(2)
|
Details of the identified intangible assets acquired are as follows:
|
(in millions)
|
Acquisition-Date Fair Value
|
|
Weighted-Average Amortization Period
(in years)
|
||
Customer relationships
|
$
|
260.8
|
|
|
13
|
Customer contracts
|
25.9
|
|
|
3
|
|
Developed technology
|
1.7
|
|
|
2
|
|
Trade name
|
1.4
|
|
|
1
|
|
Total identified intangible assets
|
$
|
289.8
|
|
|
|
(3)
|
Accounts payable includes both Accounts payable-trade and Accounts payable-inventory financing.
|
(1)
|
Excludes acquisition and integration expenses directly related to the transaction.
|
(2)
|
Includes additional amortization expense related to the fair value of acquired intangibles.
|
(3)
|
Excludes the gain of resulting from the remeasurement of the Company’s previously held 35% equity investment to fair value upon the completion of the acquisition.
|
(4)
|
Excludes the Company’s share of net income/loss from its previously held 35% equity investment prior to the completion of the acquisition.
|
(5)
|
Excludes non-cash equity-based compensation related to certain equity awards granted by one of the sellers to Kelway coworkers in July 2015 prior to the completion of the acquisition.
|
(6)
|
Includes additional non-cash equity-based compensation related to equity awards granted to Kelway coworkers after the completion of the acquisition.
|
(7)
|
Includes the elimination of inter-company sales transactions prior to the completion of the acquisition.
|
4.
|
Property and Equipment
|
|
|
December 31,
|
||||||
(in millions)
|
|
2015
|
|
2014
|
||||
Land
|
|
$
|
27.7
|
|
|
$
|
27.7
|
|
Machinery and equipment
|
|
56.8
|
|
|
54.3
|
|
||
Building and leasehold improvements
|
|
126.7
|
|
|
105.1
|
|
||
Computer and data processing equipment
|
|
99.6
|
|
|
65.6
|
|
||
Computer software
|
|
10.3
|
|
|
10.6
|
|
||
Furniture and fixtures
|
|
29.4
|
|
|
21.7
|
|
||
Construction in progress
|
|
23.9
|
|
|
24.7
|
|
||
Property and equipment
|
|
374.4
|
|
|
309.7
|
|
||
Less: accumulated depreciation
|
|
199.0
|
|
|
172.5
|
|
||
Property and equipment, net
|
|
$
|
175.4
|
|
|
$
|
137.2
|
|
5.
|
Goodwill and Other Intangible Assets
|
(in millions)
|
|
Corporate
|
|
Public
|
|
Other
(1)
|
|
Consolidated
|
||||||||
Balances as of December 31, 2013:
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
|
$
|
2,803.2
|
|
|
$
|
1,265.4
|
|
|
$
|
105.5
|
|
|
$
|
4,174.1
|
|
Accumulated impairment charges
|
|
(1,571.4
|
)
|
|
(354.1
|
)
|
|
(28.3
|
)
|
|
(1,953.8
|
)
|
||||
|
|
1,231.8
|
|
|
911.3
|
|
|
77.2
|
|
|
2,220.3
|
|
||||
2014 Activity:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
(2.7
|
)
|
||||
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
(2.7
|
)
|
||||
Balances as of December 31, 2014:
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
|
2,803.2
|
|
|
1,265.4
|
|
|
102.8
|
|
|
4,171.4
|
|
||||
Accumulated impairment charges
|
|
(1,571.4
|
)
|
|
(354.1
|
)
|
|
(28.3
|
)
|
|
(1,953.8
|
)
|
||||
|
|
1,231.8
|
|
|
911.3
|
|
|
74.5
|
|
|
2,217.6
|
|
||||
2015 Activity:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
(22.4
|
)
|
|
(22.4
|
)
|
||||
Acquisition
(2)
|
|
—
|
|
|
—
|
|
|
305.2
|
|
|
305.2
|
|
||||
|
|
—
|
|
|
—
|
|
|
282.8
|
|
|
282.8
|
|
||||
Balances as of December 31, 2015:
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
|
2,803.2
|
|
|
1,265.4
|
|
|
385.6
|
|
|
4,454.2
|
|
||||
Accumulated impairment charges
|
|
(1,571.4
|
)
|
|
(354.1
|
)
|
|
(28.3
|
)
|
|
(1,953.8
|
)
|
||||
|
|
$
|
1,231.8
|
|
|
$
|
911.3
|
|
|
$
|
357.3
|
|
|
$
|
2,500.4
|
|
(1)
|
Other is comprised of CDW Advanced Services, Canada and Kelway reporting units.
|
(2)
|
For further information regarding the addition to goodwill resulting from the Company’s acquisition of Kelway, see
Note 3
(Acquisition)
.
|
(in millions)
|
|
|
|
|
|
|
||||||
December 31, 2015
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
||||||
Customer relationships and contracts
|
|
$
|
2,128.3
|
|
|
$
|
1,162.0
|
|
|
$
|
966.3
|
|
Trade name
|
|
422.3
|
|
|
173.9
|
|
|
248.4
|
|
|||
Internally developed software
|
|
136.5
|
|
|
77.7
|
|
|
58.8
|
|
|||
Other
|
|
5.8
|
|
|
2.9
|
|
|
2.9
|
|
|||
Total
|
|
$
|
2,692.9
|
|
|
$
|
1,416.5
|
|
|
$
|
1,276.4
|
|
|
|
|
|
|
|
|
||||||
December 31, 2014
|
|
|
|
|
|
|
||||||
Customer relationships
|
|
$
|
1,859.7
|
|
|
$
|
1,012.1
|
|
|
$
|
847.6
|
|
Trade name
|
|
421.0
|
|
|
152.0
|
|
|
269.0
|
|
|||
Internally developed software
|
|
110.1
|
|
|
58.9
|
|
|
51.2
|
|
|||
Other
|
|
3.2
|
|
|
2.2
|
|
|
1.0
|
|
|||
Total
|
|
$
|
2,394.0
|
|
|
$
|
1,225.2
|
|
|
$
|
1,168.8
|
|
6.
|
Inventory Financing Agreements
|
|
|
December 31,
|
||||||
(in millions)
|
|
2015
|
|
2014
|
||||
Revolving Loan inventory financing agreement
|
|
$
|
427.0
|
|
|
$
|
330.1
|
|
Other inventory financing agreements
|
|
12.6
|
|
|
2.0
|
|
||
Accounts payable-inventory financing
|
|
$
|
439.6
|
|
|
$
|
332.1
|
|
7.
|
Lease Commitments
|
(1)
|
Included in these amounts are future minimum lease payments commencing in the fourth quarter of 2016 which relate to the lease entered into in December 2014 for the Company’s new office location north of Chicago. Also reflected in these amounts is the future expiration of two leases in the first quarter of 2016 for facilities currently in use by the Company which will be consolidated into the new office location north of Chicago and accordingly, these leases will not be renewed.
|
8.
|
Long-Term Debt
|
(dollars in millions)
|
|
Interest Rate
|
|
Principal
|
|
Unamortized Discount, Premium, and Deferred Financing Costs
(1)
|
|
Total
|
|||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|||||||
Senior secured asset-based revolving credit facility
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Kelway revolving credit facility
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Senior secured term loan facility
|
|
3.25
|
%
|
|
1,498.1
|
|
|
(6.7
|
)
|
|
1,491.4
|
|
|||
Kelway term loan
|
|
1.98
|
%
|
|
88.4
|
|
|
(0.6
|
)
|
|
87.8
|
|
|||
Senior notes due 2022
|
|
6.0
|
%
|
|
600.0
|
|
|
(6.6
|
)
|
|
593.4
|
|
|||
Senior notes due 2023
|
|
5.0
|
%
|
|
525.0
|
|
|
(6.2
|
)
|
|
518.8
|
|
|||
Senior notes due 2024
|
|
5.5
|
%
|
|
575.0
|
|
|
(6.7
|
)
|
|
568.3
|
|
|||
Total long-term debt
|
|
|
|
3,286.5
|
|
|
(26.8
|
)
|
|
3,259.7
|
|
||||
Less current maturities of long-term debt
|
|
|
|
(27.2
|
)
|
|
—
|
|
|
(27.2
|
)
|
||||
Long-term debt, excluding current maturities
|
|
|
|
$
|
3,259.3
|
|
|
$
|
(26.8
|
)
|
|
$
|
3,232.5
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|||||||
Senior secured asset-based revolving credit facility
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Senior secured term loan facility
|
|
3.25
|
%
|
|
1,513.50
|
|
|
(8.3
|
)
|
|
1,505.2
|
|
|||
Senior notes due 2019
(2)
|
|
8.5
|
%
|
|
503.9
|
|
|
(3.1
|
)
|
|
500.8
|
|
|||
Senior notes due 2022
|
|
6.0
|
%
|
|
600.0
|
|
|
(7.6
|
)
|
|
592.4
|
|
|||
Senior notes due 2024
|
|
5.5
|
%
|
|
575.0
|
|
|
(7.4
|
)
|
|
567.6
|
|
|||
Total long-term debt
|
|
|
|
3,192.4
|
|
|
(26.4
|
)
|
|
3,166.0
|
|
||||
Less current maturities of long-term debt
|
|
|
|
(15.4
|
)
|
|
—
|
|
|
(15.4
|
)
|
||||
Long-term debt, excluding current maturities
|
|
|
|
$
|
3,177.0
|
|
|
$
|
(26.4
|
)
|
|
$
|
3,150.6
|
|
(1)
|
As a result of the adoption of ASU 2015-03 during the second quarter of 2015, historical periods have been revised to reflect the change in the presentation of deferred financing costs, which are now shown as a reduction of long-term debt, instead of being presented as a separate asset on the Consolidated Balance Sheets. In the third quarter of 2015, the Company adopted ASU 2015-15 which allows entities to present deferred financing costs for line-of-credit arrangements as an asset. As of December 31, 2015, the Company classified deferred financing costs related to the Senior Secured Asset-Based Revolving Credit Facility as an asset, included within Other Assets on the Consolidated Balance Sheets. The Company retroactively adjusted the deferred financing costs and long term liability presented as of December 31, 2014 to align it to the current period presentation. There are no deferred financing costs related to the Kelway revolving credit facility. For additional information, see Note 2 (Recent Accounting Pronouncements).
|
(2)
|
As of December 31, 2014, the Company reported
$1.3 million
of unamortized premium on the Senior Notes due 2019 net of deferred financing costs of
$4.4 million
.
|
9.
|
Income Taxes
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
258.5
|
|
|
$
|
206.8
|
|
|
$
|
96.7
|
|
State
|
|
28.6
|
|
|
19.3
|
|
|
10.1
|
|
|||
Foreign
|
|
10.1
|
|
|
5.8
|
|
|
4.6
|
|
|||
Total current
|
|
297.2
|
|
|
231.9
|
|
|
111.4
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Domestic
|
|
(48.5
|
)
|
|
(89.0
|
)
|
|
(48.6
|
)
|
|||
Foreign
|
|
(4.8
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Total deferred
|
|
(53.3
|
)
|
|
(89.1
|
)
|
|
(48.7
|
)
|
|||
Income tax expense
|
|
$
|
243.9
|
|
|
$
|
142.8
|
|
|
$
|
62.7
|
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
(dollars in millions)
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Statutory federal income tax rate
|
|
$
|
226.4
|
|
|
35.0
|
%
|
|
$
|
135.7
|
|
|
35.0
|
%
|
|
$
|
68.4
|
|
|
35.0
|
%
|
State taxes, net of federal effect
|
|
16.5
|
|
|
2.6
|
|
|
6.5
|
|
|
1.6
|
|
|
(5.0
|
)
|
|
(2.6
|
)
|
|||
Effect of rates different than statutory
|
|
(1.9
|
)
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|
(0.5
|
)
|
|
(1.4
|
)
|
|
(0.7
|
)
|
|||
Foreign withholding tax
|
|
3.3
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Effect of U.K. tax rate change on deferred taxes
|
|
(4.0
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
3.6
|
|
|
0.5
|
|
|
2.5
|
|
|
0.7
|
|
|
0.7
|
|
|
0.4
|
|
|||
Effective tax rate
|
|
$
|
243.9
|
|
|
37.7
|
%
|
|
$
|
142.8
|
|
|
36.8
|
%
|
|
$
|
62.7
|
|
|
32.1
|
%
|
|
|
December 31,
|
||||||
(in millions)
|
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Deferred interest
|
|
$
|
25.0
|
|
|
$
|
32.9
|
|
State net operating loss and credit carryforwards, net
|
|
14.1
|
|
|
18.8
|
|
||
Payroll and benefits
|
|
21.2
|
|
|
27.0
|
|
||
Rent
|
|
10.8
|
|
|
5.5
|
|
||
Accounts receivable
|
|
6.4
|
|
|
6.3
|
|
||
Equity compensation plans
|
|
17.0
|
|
|
6.5
|
|
||
Trade credits
|
|
1.5
|
|
|
1.5
|
|
||
Other
|
|
5.9
|
|
|
5.0
|
|
||
Total deferred tax assets
|
|
101.9
|
|
|
103.5
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Software and intangibles
|
|
411.0
|
|
|
425.3
|
|
||
Deferred income
|
|
87.3
|
|
|
116.2
|
|
||
Property and equipment
|
|
30.6
|
|
|
22.5
|
|
||
International investments
|
|
30.4
|
|
|
—
|
|
||
Other
|
|
17.3
|
|
|
15.3
|
|
||
Total deferred tax liabilities
|
|
576.6
|
|
|
579.3
|
|
||
Deferred tax asset valuation allowance
|
|
—
|
|
|
—
|
|
||
Net deferred tax liabilities
|
|
$
|
474.7
|
|
|
$
|
475.8
|
|
10.
|
Stockholders’ Equity
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Acceleration charge for certain equity awards and related employer payroll taxes
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40.7
|
|
RDU Plan cash retention pool accrual
(2)
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|||
Management services agreement termination fee
(3)
|
|
—
|
|
|
—
|
|
|
24.4
|
|
|||
Other expenses
(4)
|
|
0.9
|
|
|
1.4
|
|
|
2.4
|
|
|||
IPO- and secondary-offering-related expenses
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
|
$
|
75.0
|
|
(1)
|
For discussion of the impact of the IPO on the Company’s equity awards, see
Note 11
(Equity-Based Compensation)
.
|
(2)
|
For discussion of the RDU Plan, see
Note 13
(Coworker Retirement and Other Compensation Benefits)
.
|
(3)
|
Represents the payment of a termination fee to affiliates of Madison Dearborn and Providence Equity in connection with the termination of the management services agreement with such entities.
|
(4)
|
Other expenses include secondary-offering expenses of
$0.9 million
,
$1.4 million
and
$0.6 million
for the years ended December 31, 2015, 2014 and 2013, respectively.
|
Secondary Offering Shares
|
|
Completion Date of Secondary Offering
|
|
Overallotment Shares
(1)
|
|
Completion Date of Overallotment Shares
|
|
Secondary Offering Expenses
(in millions)
|
||||
15,000,000
|
|
|
11/19/2013
|
|
2,250,000
|
|
12/18/2013
|
|
|
$
|
0.6
|
|
10,000,000
|
|
|
3/12/2014
|
|
1,500,000
|
|
3/12/2014
|
|
|
$
|
0.4
|
|
15,000,000
|
|
|
5/28/2014
|
|
2,250,000
|
|
6/4/2014
|
|
|
$
|
0.5
|
|
15,000,000
|
|
|
9/8/2014
(2)
|
|
—
|
|
—
|
|
|
$
|
0.3
|
|
15,000,000
|
|
|
12/8/2014
|
|
2,250,000
|
|
12/8/2014
|
|
|
$
|
0.2
|
|
10,000,000
|
|
|
5/22/2015
|
|
1,500,000
|
|
5/22/2015
|
|
|
$
|
0.3
|
|
11,250,000
|
|
|
8/18/2015
|
|
1,687,500
|
|
8/18/2015
|
|
|
$
|
0.2
|
|
8,000,000
|
|
|
11/30/2015
|
|
1,200,000
|
|
12/9/2015
|
|
|
$
|
0.4
|
|
(1)
|
Under each underwriting agreement, the selling stockholders granted the underwriters an option, exercisable for thirty days, to purchase up to the additional amount of shares noted.
|
(2)
|
The option to purchase additional shares was not exercised in connection with the September 2014 secondary offering.
|
11.
|
Equity-Based Compensation
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
|
2015
|
|
2014
|
|
2013
(1)
|
||||||
Equity-based compensation expense
|
|
$
|
31.2
|
|
|
$
|
16.4
|
|
|
$
|
46.6
|
|
Income tax benefit
|
|
(10.9
|
)
|
|
(5.1
|
)
|
|
(16.5
|
)
|
|||
Equity-based compensation expense (net of tax)
|
|
$
|
20.3
|
|
|
$
|
11.3
|
|
|
$
|
30.1
|
|
(1)
|
Includes pre-tax expense of
$36.7 million
related to the accelerated vesting of certain equity awards granted prior to the Company’s IPO. All unvested awards granted pursuant to the MPK Coworker Incentive Plan II (the “MPK Plan”) vested in connection with the IPO as discussed further below in the section labeled “MPK II Units.”
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Grant date fair value
|
|
$
|
11.13
|
|
|
$
|
7.23
|
|
|
$
|
4.75
|
|
Volatility
(1)
|
|
30.00
|
%
|
|
30.00
|
%
|
|
35.00
|
%
|
|||
Risk-free rate
(2)
|
|
1.75
|
%
|
|
1.77
|
%
|
|
1.58
|
%
|
|||
Expected dividend yield
|
|
0.72
|
%
|
|
0.70
|
%
|
|
1.00
|
%
|
|||
Expected term (in years)
(3)
|
|
6.0
|
|
|
6.0
|
|
|
5.4
|
|
(1)
|
Based upon an assessment of the two-year, five-year and implied volatility for the Company’s selected peer group, adjusted for the Company’s leverage.
|
(2)
|
Based on a composite U.S. Treasury rate.
|
(3)
|
Calculated using the simplified method, which defines the expected term as the average of the option’s contractual term and the option’s weighted-average vesting period. The Company utilizes this method as it has limited historical stock option data that is sufficient to derive a reasonable estimate of the expected stock option term.
|
Options
|
|
Number of Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (years)
|
|
Aggregate Intrinsic Value (millions)
|
|||||
Outstanding at January 1, 2015
|
|
2,421,072
|
|
|
$
|
20.75
|
|
|
|
|
|
||
Granted
|
|
936,865
|
|
|
37.82
|
|
|
|
|
|
|||
Forfeited/Expired
|
|
(59,554
|
)
|
|
29.49
|
|
|
|
|
|
|||
Exercised
(1)
|
|
(101,162
|
)
|
|
21.11
|
|
|
|
|
|
|||
Outstanding at December 31, 2015
|
|
3,197,221
|
|
|
$
|
25.58
|
|
|
7.8
|
|
$
|
52.6
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2015
|
|
1,146,008
|
|
|
$
|
19.39
|
|
|
6.9
|
|
$
|
26.0
|
|
Vested and expected to vest at December 31, 2015
|
|
2,018,385
|
|
|
$
|
29.02
|
|
|
8.3
|
|
$
|
26.3
|
|
(1)
|
The total intrinsic value of stock options exercised during the years ended
December 31, 2015, 2014 and 2013
was
$1.9 million
,
$1.0 million
and
zero
, respectively.
|
|
|
Number of Units
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Nonvested at January 1, 2015
|
|
1,244,702
|
|
|
$
|
17.19
|
|
Granted
(1)
|
|
141,013
|
|
|
36.24
|
|
|
Vested
(2)
|
|
(32,181
|
)
|
|
23.01
|
|
|
Forfeited
|
|
(96,135
|
)
|
|
17.01
|
|
|
Nonvested at December 31, 2015
|
|
1,257,399
|
|
|
$
|
19.19
|
|
(1)
|
The weighted-average grant date fair value of RSUs granted during the years ended
December 31, 2015, 2014 and 2013
is
$36.24
,
$24.29
and
$17.03
, respectively.
|
(2)
|
The aggregate fair value of RSUs that vested during the years ended
December 31, 2015, 2014 and 2013
is
$0.7 million
,
$0.1 million
and
zero
, respectively.
|
|
|
Year Ended December 31,
|
||
|
|
2013
|
||
Grant date fair value
|
|
$
|
119.00
|
|
Volatility
(1)
|
|
65.50
|
%
|
|
Risk-free rate
(2)
|
|
0.18
|
%
|
|
Expected dividend yield
|
|
0.00
|
%
|
(1)
|
Based upon an assessment of the two-year, five-year and implied volatility for the Company’s selected peer group, adjusted for the Company’s leverage.
|
(2)
|
Based on a composite U.S. Treasury rate.
|
|
|
Class B
Common Units
|
|
MPK Plan
Units
|
||
Outstanding at January 1, 2013
|
|
216,483
|
|
|
66,137
|
|
Granted
|
|
400
|
|
|
—
|
|
Forfeited
|
|
(860
|
)
|
|
(2,228
|
)
|
Converted/Settled
(1)
|
|
(216,023
|
)
|
|
(63,909
|
)
|
Outstanding at December 31, 2013
|
|
—
|
|
|
—
|
|
Vested at December 31, 2013
|
|
—
|
|
|
—
|
|
(1)
|
As discussed above, the Class B Common Units and MPK Plan Units were converted/settled into shares of the Company’s common stock upon completion of the IPO. The converted Class B Common Units, to the extent unvested at the time of the IPO, relate to the grants of restricted stock disclosed above.
|
12.
|
Earnings Per Share
|
|
|
Years Ended December 31,
|
|||||||
(in millions)
|
|
2015
|
|
2014
|
|
2013
(1)
|
|||
Basic weighted-average shares outstanding
|
|
170.3
|
|
|
170.6
|
|
|
156.6
|
|
Effect of dilutive securities
(2)
|
|
1.5
|
|
|
2.2
|
|
|
2.1
|
|
Diluted weighted-average shares outstanding
(3)
|
|
171.8
|
|
|
172.8
|
|
|
158.7
|
|
(1)
|
The 2013 basic weighted-average shares outstanding was impacted by common stock issued during the IPO and the underwriters’ exercise in full of the overallotment option granted to them in connection with the IPO. As the common stock was issued on July 2, 2013 and July 31, 2013, respectively, the shares are only partially reflected in the 2013 basic weighted-average shares outstanding. Such shares are fully reflected in the 2015 and 2014 basic weighted-average shares outstanding. For additional discussion of the IPO, see
Note 10
(Stockholders’ Equity)
.
|
(2)
|
The dilutive effect of outstanding stock options, restricted stock units, restricted stock, Coworker Stock Purchase Plan units and MPK Plan units is reflected in the diluted weighted-average shares outstanding using the treasury stock method.
|
(3)
|
There were
0.4 million
potential common shares excluded from the diluted weighted-average shares outstanding for the year ended
December 31, 2015
, and there was an insignificant amount of potential common shares excluded from the diluted weighted-average shares outstanding for the years ended
December 31, 2014
and
2013
, as their inclusion would have had an anti-dilutive effect.
|
13.
|
Coworker Retirement and Other Compensation Benefits
|
(in millions)
|
Corporate
|
|
Public
|
|
Other
|
|
Headquarters
|
|
Total
|
||||||||||
2015:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
6,816.4
|
|
|
$
|
5,125.5
|
|
|
$
|
1,046.8
|
|
|
$
|
—
|
|
|
$
|
12,988.7
|
|
Income (loss) from operations
|
470.1
|
|
|
343.3
|
|
|
43.1
|
|
|
(114.5
|
)
|
|
742.0
|
|
|||||
Depreciation and amortization expense
|
(96.0
|
)
|
|
(43.7
|
)
|
|
(24.4
|
)
|
|
(63.3
|
)
|
|
(227.4
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
6,475.5
|
|
|
$
|
4,879.4
|
|
|
$
|
719.6
|
|
|
$
|
—
|
|
|
$
|
12,074.5
|
|
Income (loss) from operations
|
439.8
|
|
|
313.2
|
|
|
32.9
|
|
|
(112.9
|
)
|
|
673.0
|
|
|||||
Depreciation and amortization expense
|
(96.3
|
)
|
|
(43.8
|
)
|
|
(8.8
|
)
|
|
(59.0
|
)
|
|
(207.9
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
5,960.1
|
|
|
$
|
4,164.5
|
|
|
$
|
644.0
|
|
|
$
|
—
|
|
|
$
|
10,768.6
|
|
Income (loss) from operations
(1)
|
363.3
|
|
|
246.5
|
|
|
27.2
|
|
|
(128.4
|
)
|
|
508.6
|
|
|||||
Depreciation and amortization expense
|
(97.3
|
)
|
|
(44.0
|
)
|
|
(8.6
|
)
|
|
(58.3
|
)
|
|
(208.2
|
)
|
(1)
|
Includes
$75.0 million
of IPO- and secondary-offering related expenses, as follows: Corporate
$26.4 million
; Public
$14.4 million
; Other
$3.6 million
; and Headquarters
$30.6 million
. For additional information relating to the IPO- and secondary-offering, see
Note 10
(Stockholders’ Equity)
.
|
|
Year Ended
December 31, 2015
|
|
Year Ended
December 31, 2014
|
|
Year Ended
December 31, 2013
|
|||||||||||||||
|
Dollars in
Millions
|
|
Percentage
of Total Net
Sales
|
|
Dollars in
Millions
|
|
Percentage
of Total Net
Sales
|
|
Dollars in
Millions
|
|
Percentage
of Total Net
Sales
|
|||||||||
Notebooks/Mobile Devices
|
$
|
2,539.4
|
|
|
19.6
|
%
|
|
$
|
2,354.0
|
|
|
19.5
|
%
|
|
$
|
1,696.5
|
|
|
15.8
|
%
|
Netcomm Products
|
1,914.9
|
|
|
14.7
|
|
|
1,613.3
|
|
|
13.4
|
|
|
1,482.7
|
|
|
13.8
|
|
|||
Enterprise and Data Storage (Including Drives)
|
1,065.2
|
|
|
8.2
|
|
|
1,024.2
|
|
|
8.5
|
|
|
999.3
|
|
|
9.3
|
|
|||
Other Hardware
|
4,756.4
|
|
|
36.6
|
|
|
4,551.1
|
|
|
37.6
|
|
|
4,184.1
|
|
|
38.8
|
|
|||
Software
|
2,163.6
|
|
|
16.7
|
|
|
2,064.1
|
|
|
17.1
|
|
|
1,982.4
|
|
|
18.4
|
|
|||
Services
|
478.0
|
|
|
3.7
|
|
|
371.9
|
|
|
3.1
|
|
|
332.7
|
|
|
3.1
|
|
|||
Other
(1)
|
71.2
|
|
|
0.5
|
|
|
95.9
|
|
|
0.8
|
|
|
90.9
|
|
|
0.8
|
|
|||
Total Net sales
|
$
|
12,988.7
|
|
|
100.0
|
%
|
|
$
|
12,074.5
|
|
|
100.0
|
%
|
|
$
|
10,768.6
|
|
|
100.0
|
%
|
(1)
|
Includes items such as delivery charges to customers and certain commission revenue.
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||||||||||
December 31, 2015
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
45.1
|
|
|
$
|
—
|
|
|
$
|
31.9
|
|
|
$
|
—
|
|
|
$
|
(39.4
|
)
|
|
$
|
37.6
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,788.6
|
|
|
228.8
|
|
|
—
|
|
|
—
|
|
|
2,017.4
|
|
|||||||
Merchandise inventory
|
—
|
|
|
—
|
|
|
340.3
|
|
|
52.8
|
|
|
—
|
|
|
—
|
|
|
393.1
|
|
|||||||
Miscellaneous receivables
|
—
|
|
|
83.7
|
|
|
90.1
|
|
|
24.6
|
|
|
—
|
|
|
—
|
|
|
198.4
|
|
|||||||
Prepaid expenses and other
|
—
|
|
|
13.0
|
|
|
50.4
|
|
|
84.0
|
|
|
—
|
|
|
(3.1
|
)
|
|
144.3
|
|
|||||||
Total current assets
|
—
|
|
|
141.8
|
|
|
2,269.4
|
|
|
422.1
|
|
|
—
|
|
|
(42.5
|
)
|
|
2,790.8
|
|
|||||||
Property and equipment, net
|
—
|
|
|
110.0
|
|
|
54.1
|
|
|
11.3
|
|
|
—
|
|
|
—
|
|
|
175.4
|
|
|||||||
Equity investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Goodwill
|
—
|
|
|
751.8
|
|
|
1,439.0
|
|
|
309.6
|
|
|
—
|
|
|
—
|
|
|
2,500.4
|
|
|||||||
Other intangible assets, net
|
—
|
|
|
306.0
|
|
|
704.9
|
|
|
265.5
|
|
|
—
|
|
|
—
|
|
|
1,276.4
|
|
|||||||
Other assets
|
3.8
|
|
|
17.3
|
|
|
263.0
|
|
|
3.0
|
|
|
—
|
|
|
(274.8
|
)
|
|
12.3
|
|
|||||||
Investment in and advances to subsidiaries
|
1,092.1
|
|
|
3,302.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,394.1
|
)
|
|
—
|
|
|||||||
Total assets
|
$
|
1,095.9
|
|
|
$
|
4,628.9
|
|
|
$
|
4,730.4
|
|
|
$
|
1,011.5
|
|
|
$
|
—
|
|
|
$
|
(4,711.4
|
)
|
|
$
|
6,755.3
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Accounts payable-trade
|
$
|
—
|
|
|
$
|
31.0
|
|
|
$
|
727.4
|
|
|
$
|
147.5
|
|
|
$
|
—
|
|
|
$
|
(39.4
|
)
|
|
$
|
866.5
|
|
Accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
428.4
|
|
|
11.4
|
|
|
—
|
|
|
(0.2
|
)
|
|
439.6
|
|
|||||||
Current maturities of long-term debt
|
—
|
|
|
15.4
|
|
|
—
|
|
|
11.8
|
|
|
—
|
|
|
—
|
|
|
27.2
|
|
|||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
77.4
|
|
|
74.5
|
|
|
—
|
|
|
—
|
|
|
151.9
|
|
|||||||
Accrued expenses
|
—
|
|
|
156.0
|
|
|
190.9
|
|
|
58.6
|
|
|
—
|
|
|
(3.4
|
)
|
|
402.1
|
|
|||||||
Total current liabilities
|
—
|
|
|
202.4
|
|
|
1,424.1
|
|
|
303.8
|
|
|
—
|
|
|
(43.0
|
)
|
|
1,887.3
|
|
|||||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt
|
—
|
|
|
3,156.5
|
|
|
—
|
|
|
76.0
|
|
|
—
|
|
|
—
|
|
|
3,232.5
|
|
|||||||
Deferred income taxes
|
—
|
|
|
117.3
|
|
|
272.8
|
|
|
83.4
|
|
|
—
|
|
|
(3.9
|
)
|
|
469.6
|
|
|||||||
Other liabilities
|
—
|
|
|
60.7
|
|
|
2.9
|
|
|
276.8
|
|
|
—
|
|
|
(270.4
|
)
|
|
70.0
|
|
|||||||
Total long-term liabilities
|
—
|
|
|
3,334.5
|
|
|
275.7
|
|
|
436.2
|
|
|
—
|
|
|
(274.3
|
)
|
|
3,772.1
|
|
|||||||
Total stockholders’ equity
|
1,095.9
|
|
|
1,092.0
|
|
|
3,030.6
|
|
|
271.5
|
|
|
—
|
|
|
(4,394.1
|
)
|
|
1,095.9
|
|
|||||||
Total liabilities and stockholders’ equity
|
$
|
1,095.9
|
|
|
$
|
4,628.9
|
|
|
$
|
4,730.4
|
|
|
$
|
1,011.5
|
|
|
$
|
—
|
|
|
$
|
(4,711.4
|
)
|
|
$
|
6,755.3
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||||||||||
December 31, 2014
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
346.4
|
|
|
$
|
—
|
|
|
$
|
24.6
|
|
|
$
|
—
|
|
|
$
|
(26.5
|
)
|
|
$
|
344.5
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,479.1
|
|
|
82.0
|
|
|
—
|
|
|
—
|
|
|
1,561.1
|
|
|||||||
Merchandise inventory
|
—
|
|
|
—
|
|
|
333.9
|
|
|
3.6
|
|
|
—
|
|
|
—
|
|
|
337.5
|
|
|||||||
Miscellaneous receivables
|
—
|
|
|
56.1
|
|
|
93.3
|
|
|
6.2
|
|
|
—
|
|
|
—
|
|
|
155.6
|
|
|||||||
Prepaid expenses and other
|
—
|
|
|
11.0
|
|
|
46.0
|
|
|
1.5
|
|
|
—
|
|
|
(3.8
|
)
|
|
54.7
|
|
|||||||
Total current assets
|
—
|
|
|
413.5
|
|
|
1,952.3
|
|
|
117.9
|
|
|
—
|
|
|
(30.3
|
)
|
|
2,453.4
|
|
|||||||
Property and equipment, net
|
—
|
|
|
80.5
|
|
|
55.5
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
137.2
|
|
|||||||
Equity investments
|
—
|
|
|
86.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86.7
|
|
|||||||
Goodwill
|
—
|
|
|
751.8
|
|
|
1,439.0
|
|
|
26.8
|
|
|
—
|
|
|
—
|
|
|
2,217.6
|
|
|||||||
Other intangible assets, net
|
—
|
|
|
320.0
|
|
|
843.6
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
1,168.8
|
|
|||||||
Other assets
|
4.3
|
|
|
12.2
|
|
|
0.4
|
|
|
1.4
|
|
|
—
|
|
|
(6.1
|
)
|
|
12.2
|
|
|||||||
Investment in and advances to subsidiaries
|
932.2
|
|
|
2,784.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,716.7
|
)
|
|
—
|
|
|||||||
Total assets
|
$
|
936.5
|
|
|
$
|
4,449.2
|
|
|
$
|
4,290.8
|
|
|
$
|
152.5
|
|
|
$
|
—
|
|
|
$
|
(3,753.1
|
)
|
|
$
|
6,075.9
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Accounts payable-trade
|
$
|
—
|
|
|
$
|
23.9
|
|
|
$
|
671.9
|
|
|
$
|
34.7
|
|
|
$
|
—
|
|
|
$
|
(26.5
|
)
|
|
$
|
704.0
|
|
Accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
332.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
332.1
|
|
|||||||
Current maturities of long-term debt
|
—
|
|
|
15.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.4
|
|
|||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
79.9
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
81.3
|
|
|||||||
Accrued expenses
|
—
|
|
|
137.8
|
|
|
193.6
|
|
|
7.9
|
|
|
—
|
|
|
(4.1
|
)
|
|
335.2
|
|
|||||||
Total current liabilities
|
—
|
|
|
177.1
|
|
|
1,277.5
|
|
|
44.0
|
|
|
—
|
|
|
(30.6
|
)
|
|
1,468.0
|
|
|||||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt
|
—
|
|
|
3,150.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,150.6
|
|
|||||||
Deferred income taxes
|
—
|
|
|
146.7
|
|
|
331.3
|
|
|
1.3
|
|
|
—
|
|
|
(4.3
|
)
|
|
475.0
|
|
|||||||
Other liabilities
|
—
|
|
|
42.6
|
|
|
3.7
|
|
|
1.0
|
|
|
—
|
|
|
(1.5
|
)
|
|
45.8
|
|
|||||||
Total long-term liabilities
|
—
|
|
|
3,339.9
|
|
|
335.0
|
|
|
2.3
|
|
|
—
|
|
|
(5.8
|
)
|
|
3,671.4
|
|
|||||||
Total stockholders’ equity
|
936.5
|
|
|
932.2
|
|
|
2,678.3
|
|
|
106.2
|
|
|
—
|
|
|
(3,716.7
|
)
|
|
936.5
|
|
|||||||
Total liabilities and stockholders’ equity
|
$
|
936.5
|
|
|
$
|
4,449.2
|
|
|
$
|
4,290.8
|
|
|
$
|
152.5
|
|
|
$
|
—
|
|
|
$
|
(3,753.1
|
)
|
|
$
|
6,075.9
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
Year Ended December 31, 2015
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,151.2
|
|
|
$
|
837.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,988.7
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
10,158.6
|
|
|
714.3
|
|
|
—
|
|
|
—
|
|
|
10,872.9
|
|
|||||||
Gross profit
|
—
|
|
|
—
|
|
|
1,992.6
|
|
|
123.2
|
|
|
—
|
|
|
—
|
|
|
2,115.8
|
|
|||||||
Selling and administrative expenses
|
—
|
|
|
114.5
|
|
|
1,020.9
|
|
|
90.6
|
|
|
—
|
|
|
—
|
|
|
1,226.0
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
143.2
|
|
|
4.6
|
|
|
—
|
|
|
—
|
|
|
147.8
|
|
|||||||
Income (loss) from operations
|
—
|
|
|
(114.5
|
)
|
|
828.5
|
|
|
28.0
|
|
|
—
|
|
|
—
|
|
|
742.0
|
|
|||||||
Interest (expense) income, net
|
—
|
|
|
(158.3
|
)
|
|
2.3
|
|
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
|
(159.5
|
)
|
|||||||
Net loss on extinguishments of long-term debt
|
—
|
|
|
(24.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.3
|
)
|
|||||||
Management fee
|
—
|
|
|
4.2
|
|
|
—
|
|
|
(4.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Gain on remeasurement of equity investment
|
—
|
|
|
—
|
|
|
—
|
|
|
98.1
|
|
|
—
|
|
|
—
|
|
|
98.1
|
|
|||||||
Other income (expense), net
|
—
|
|
|
(11.1
|
)
|
|
1.6
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
|||||||
Income (loss) before income taxes
|
—
|
|
|
(304.0
|
)
|
|
832.4
|
|
|
118.6
|
|
|
—
|
|
|
—
|
|
|
647.0
|
|
|||||||
Income tax benefit (expense)
|
—
|
|
|
103.3
|
|
|
(307.2
|
)
|
|
(40.0
|
)
|
|
—
|
|
|
—
|
|
|
(243.9
|
)
|
|||||||
Income (loss) before equity in earnings of subsidiaries
|
—
|
|
|
(200.7
|
)
|
|
525.2
|
|
|
78.6
|
|
|
—
|
|
|
—
|
|
|
403.1
|
|
|||||||
Equity in earnings of subsidiaries
|
403.1
|
|
|
603.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,006.9
|
)
|
|
—
|
|
|||||||
Net income
|
$
|
403.1
|
|
|
$
|
403.1
|
|
|
$
|
525.2
|
|
|
$
|
78.6
|
|
|
$
|
—
|
|
|
$
|
(1,006.9
|
)
|
|
$
|
403.1
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
Year Ended December 31, 2014
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,542.3
|
|
|
$
|
532.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,074.5
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
9,684.9
|
|
|
468.3
|
|
|
—
|
|
|
—
|
|
|
10,153.2
|
|
|||||||
Gross profit
|
—
|
|
|
—
|
|
|
1,857.4
|
|
|
63.9
|
|
|
—
|
|
|
—
|
|
|
1,921.3
|
|
|||||||
Selling and administrative expenses
|
—
|
|
|
112.8
|
|
|
962.3
|
|
|
35.2
|
|
|
—
|
|
|
—
|
|
|
1,110.3
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
134.0
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
138.0
|
|
|||||||
(Loss) income from operations
|
—
|
|
|
(112.8
|
)
|
|
761.1
|
|
|
24.7
|
|
|
—
|
|
|
—
|
|
|
673.0
|
|
|||||||
Interest (expense) income, net
|
—
|
|
|
(197.7
|
)
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
(197.3
|
)
|
|||||||
Net loss on extinguishments of long-term debt
|
—
|
|
|
(90.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(90.7
|
)
|
|||||||
Management fee
|
—
|
|
|
3.9
|
|
|
—
|
|
|
(3.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other (expense) income, net
|
—
|
|
|
1.2
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|||||||
(Loss) income before income taxes
|
—
|
|
|
(396.1
|
)
|
|
762.7
|
|
|
21.1
|
|
|
—
|
|
|
—
|
|
|
387.7
|
|
|||||||
Income tax benefit (expense)
|
—
|
|
|
141.0
|
|
|
(278.1
|
)
|
|
(5.7
|
)
|
|
—
|
|
|
—
|
|
|
(142.8
|
)
|
|||||||
(Loss) income before equity in earnings of subsidiaries
|
—
|
|
|
(255.1
|
)
|
|
484.6
|
|
|
15.4
|
|
|
—
|
|
|
—
|
|
|
244.9
|
|
|||||||
Equity in earnings of subsidiaries
|
244.9
|
|
|
500.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(744.9
|
)
|
|
—
|
|
|||||||
Net income
|
$
|
244.9
|
|
|
$
|
244.9
|
|
|
$
|
484.6
|
|
|
$
|
15.4
|
|
|
$
|
—
|
|
|
$
|
(744.9
|
)
|
|
$
|
244.9
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
Year Ended December 31, 2013
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,293.3
|
|
|
$
|
475.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,768.6
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
8,592.1
|
|
|
416.2
|
|
|
—
|
|
|
—
|
|
|
9,008.3
|
|
|||||||
Gross profit
|
—
|
|
|
—
|
|
|
1,701.2
|
|
|
59.1
|
|
|
—
|
|
|
—
|
|
|
1,760.3
|
|
|||||||
Selling and administrative expenses
|
24.4
|
|
|
103.9
|
|
|
957.3
|
|
|
35.3
|
|
|
—
|
|
|
—
|
|
|
1,120.9
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
126.8
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
130.8
|
|
|||||||
(Loss) income from operations
|
(24.4
|
)
|
|
(103.9
|
)
|
|
617.1
|
|
|
19.8
|
|
|
—
|
|
|
—
|
|
|
508.6
|
|
|||||||
Interest (expense) income, net
|
—
|
|
|
(250.6
|
)
|
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
(250.1
|
)
|
|||||||
Net loss on extinguishments of long-term debt
|
—
|
|
|
(64.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64.0
|
)
|
|||||||
Management fee
|
—
|
|
|
4.3
|
|
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other income (expense), net
|
—
|
|
|
(0.5
|
)
|
|
1.2
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|||||||
(Loss) income before income taxes
|
(24.4
|
)
|
|
(414.7
|
)
|
|
618.5
|
|
|
16.1
|
|
|
—
|
|
|
—
|
|
|
195.5
|
|
|||||||
Income tax benefit (expense)
|
9.2
|
|
|
142.2
|
|
|
(209.5
|
)
|
|
(4.6
|
)
|
|
—
|
|
|
—
|
|
|
(62.7
|
)
|
|||||||
(Loss) income before equity in earnings of subsidiaries
|
(15.2
|
)
|
|
(272.5
|
)
|
|
409.0
|
|
|
11.5
|
|
|
—
|
|
|
—
|
|
|
132.8
|
|
|||||||
Equity in earnings of subsidiaries
|
148.0
|
|
|
420.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(568.5
|
)
|
|
—
|
|
|||||||
Net income
|
$
|
132.8
|
|
|
$
|
148.0
|
|
|
$
|
409.0
|
|
|
$
|
11.5
|
|
|
$
|
—
|
|
|
$
|
(568.5
|
)
|
|
$
|
132.8
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||||||||||
Year Ended December 31, 2015
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Comprehensive income
|
$
|
358.6
|
|
|
$
|
358.6
|
|
|
$
|
525.2
|
|
|
$
|
34.1
|
|
|
$
|
—
|
|
|
$
|
(917.9
|
)
|
|
$
|
358.6
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||||||||||
Year Ended December 31, 2014
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Comprehensive income
|
$
|
234.6
|
|
|
$
|
234.6
|
|
|
$
|
484.6
|
|
|
$
|
5.1
|
|
|
$
|
—
|
|
|
$
|
(724.3
|
)
|
|
$
|
234.6
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||||||||||
Year Ended December 31, 2013
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Comprehensive income
|
$
|
126.1
|
|
|
$
|
141.3
|
|
|
$
|
409.0
|
|
|
$
|
4.8
|
|
|
$
|
—
|
|
|
$
|
(555.1
|
)
|
|
$
|
126.1
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
Year Ended December 31, 2015
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
0.5
|
|
|
$
|
(18.1
|
)
|
|
$
|
350.0
|
|
|
$
|
27.9
|
|
|
$
|
—
|
|
|
$
|
(82.8
|
)
|
|
$
|
277.5
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(75.4
|
)
|
|
(11.6
|
)
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
(90.1
|
)
|
|||||||
Acquisition of business, net of cash acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
(263.8
|
)
|
|
—
|
|
|
—
|
|
|
(263.8
|
)
|
|||||||
Premium payments on interest rate cap agreements
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(75.9
|
)
|
|
(11.6
|
)
|
|
(266.9
|
)
|
|
—
|
|
|
—
|
|
|
(354.4
|
)
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Proceeds from borrowings under revolving credit facility
|
—
|
|
|
314.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314.5
|
|
|||||||
Repayments of borrowings under revolving credit facility
|
—
|
|
|
(314.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(314.5
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
(15.4
|
)
|
|
—
|
|
|
(17.4
|
)
|
|
—
|
|
|
—
|
|
|
(32.8
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
525.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
525.0
|
|
|||||||
Payments to extinguish long-term debt
|
—
|
|
|
(525.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(525.3
|
)
|
|||||||
Payment of debt financing costs
|
—
|
|
|
(6.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.8
|
)
|
|||||||
Net change in accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
96.1
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
95.9
|
|
|||||||
Proceeds from stock option exercises
|
—
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|||||||
Proceeds from Coworker stock purchase plan
|
—
|
|
|
8.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
|||||||
Repurchases of common stock
|
(241.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(241.3
|
)
|
|||||||
Dividends paid
|
(52.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52.9
|
)
|
|||||||
Excess tax benefits from equity-based compensation
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||||
Advances to/from affiliates
|
293.7
|
|
|
(196.5
|
)
|
|
(434.5
|
)
|
|
267.4
|
|
|
—
|
|
|
69.9
|
|
|
—
|
|
|||||||
Net cash provided by (used in) financing activities
|
(0.5
|
)
|
|
(207.3
|
)
|
|
(338.4
|
)
|
|
249.8
|
|
|
—
|
|
|
69.9
|
|
|
(226.5
|
)
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(301.3
|
)
|
|
—
|
|
|
7.3
|
|
|
—
|
|
|
(12.9
|
)
|
|
(306.9
|
)
|
|||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
346.4
|
|
|
—
|
|
|
24.6
|
|
|
—
|
|
|
(26.5
|
)
|
|
344.5
|
|
|||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
45.1
|
|
|
$
|
—
|
|
|
$
|
31.9
|
|
|
$
|
—
|
|
|
$
|
(39.4
|
)
|
|
$
|
37.6
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
Year Ended December 31, 2014
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor |
|
Subsidiary
Issuer |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiary |
|
Co-Issuer
|
|
Consolidating
Adjustments |
|
Consolidated
|
||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(120.4
|
)
|
|
$
|
547.7
|
|
|
$
|
11.8
|
|
|
$
|
—
|
|
|
$
|
(4.1
|
)
|
|
$
|
435.0
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(47.9
|
)
|
|
(7.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55.0
|
)
|
|||||||
Payment for equity investments
|
—
|
|
|
(86.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(86.8
|
)
|
|||||||
Payment of accrued charitable contribution related to the MPK Coworker Incentive Plan II
|
—
|
|
|
(20.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20.9
|
)
|
|||||||
Premium Payments on interest rate cap agreements
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(157.7
|
)
|
|
(7.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(164.8
|
)
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Repayments of long-term debt
|
—
|
|
|
(15.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.4
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
1,175.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,175.0
|
|
|||||||
Payments to extinguish long-term debt
|
—
|
|
|
(1,299.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,299.0
|
)
|
|||||||
Payment of debt financing costs
|
—
|
|
|
(21.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.9
|
)
|
|||||||
Net change in accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
75.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75.5
|
|
|||||||
Proceeds from stock option exercises
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|||||||
Proceeds from Coworker stock purchase plan
|
—
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|||||||
Dividends paid
|
(33.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.6
|
)
|
|||||||
Excess tax benefits from equity-based compensation
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||||
Advances to/from affiliates
|
33.6
|
|
|
581.9
|
|
|
(616.1
|
)
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
428.0
|
|
|
(540.6
|
)
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
(112.0
|
)
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
149.9
|
|
|
—
|
|
|
10.6
|
|
|
—
|
|
|
(4.1
|
)
|
|
156.4
|
|
|||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
196.5
|
|
|
—
|
|
|
14.0
|
|
|
—
|
|
|
(22.4
|
)
|
|
188.1
|
|
|||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
346.4
|
|
|
$
|
—
|
|
|
$
|
24.6
|
|
|
$
|
—
|
|
|
$
|
(26.5
|
)
|
|
$
|
344.5
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
Year Ended December 31, 2013
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor |
|
Subsidiary
Issuer |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiary |
|
Co-Issuer
|
|
Consolidating
Adjustments |
|
Consolidated
|
||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
(15.2
|
)
|
|
$
|
(130.3
|
)
|
|
$
|
508.8
|
|
|
$
|
5.5
|
|
|
$
|
—
|
|
|
$
|
(2.5
|
)
|
|
$
|
366.3
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(40.8
|
)
|
|
(6.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(47.1
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(40.8
|
)
|
|
(6.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(47.1
|
)
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Proceeds from borrowings under revolving credit facility
|
—
|
|
|
63.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63.0
|
|
|||||||
Repayments of borrowings under revolving credit facility
|
—
|
|
|
(63.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63.0
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
(51.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51.1
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
1,535.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,535.2
|
|
|||||||
Payments to extinguish long-term debt
|
—
|
|
|
(2,047.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,047.4
|
)
|
|||||||
Payment of debt financing costs
|
—
|
|
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|||||||
Net change in accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|||||||
Payment of incentive compensation plan withholding taxes
|
—
|
|
|
(4.0
|
)
|
|
(19.6
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
(24.1
|
)
|
|||||||
Proceeds from issuance of common stock
|
424.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
424.7
|
|
|||||||
Dividends paid
|
(7.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.3
|
)
|
|||||||
Advances to/from affiliates
|
(402.2
|
)
|
|
892.6
|
|
|
(490.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other financing activities
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||||
Net cash provided by (used in) financing activities
|
15.2
|
|
|
319.6
|
|
|
(502.6
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
(168.3
|
)
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
148.5
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
|
(2.5
|
)
|
|
150.2
|
|
|||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
48.0
|
|
|
—
|
|
|
9.8
|
|
|
—
|
|
|
(19.9
|
)
|
|
37.9
|
|
|||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
196.5
|
|
|
$
|
—
|
|
|
$
|
14.0
|
|
|
$
|
—
|
|
|
$
|
(22.4
|
)
|
|
$
|
188.1
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
(in millions, except per-share amounts)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net Sales Detail:
|
|
|
|
|
|
|
|
|
||||||||
Corporate:
|
|
|
|
|
|
|
|
|
||||||||
Medium/Large
|
|
$
|
1,313.9
|
|
|
$
|
1,492.1
|
|
|
$
|
1,458.9
|
|
|
$
|
1,493.4
|
|
Small Business
|
|
260.1
|
|
|
269.3
|
|
|
265.6
|
|
|
263.2
|
|
||||
Total Corporate
|
|
1,574.0
|
|
|
1,761.4
|
|
|
1,724.5
|
|
|
1,756.6
|
|
||||
Public:
|
|
|
|
|
|
|
|
|
||||||||
Government
|
|
288.6
|
|
|
385.0
|
|
|
488.6
|
|
|
513.7
|
|
||||
Education
|
|
343.6
|
|
|
546.1
|
|
|
579.0
|
|
|
338.3
|
|
||||
Healthcare
|
|
373.6
|
|
|
443.1
|
|
|
400.5
|
|
|
425.3
|
|
||||
Total Public
|
|
1,005.8
|
|
|
1,374.2
|
|
|
1,468.1
|
|
|
1,277.3
|
|
||||
Other
|
|
175.4
|
|
|
178.4
|
|
|
308.5
|
|
|
384.5
|
|
||||
Net sales
|
|
$
|
2,755.2
|
|
|
$
|
3,314.0
|
|
|
$
|
3,501.1
|
|
|
$
|
3,418.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
|
$
|
456.5
|
|
|
$
|
534.5
|
|
|
$
|
567.2
|
|
|
$
|
557.6
|
|
Income from operations
|
|
151.6
|
|
|
205.9
|
|
|
204.6
|
|
|
179.9
|
|
||||
Net income
|
|
54.7
|
|
|
108.2
|
|
|
150.9
|
|
|
89.3
|
|
||||
Net income per common share
(1)
:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
0.32
|
|
|
0.63
|
|
|
0.89
|
|
|
0.53
|
|
||||
Diluted
|
|
0.32
|
|
|
0.63
|
|
|
0.88
|
|
|
0.52
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share
|
|
$
|
0.0675
|
|
|
$
|
0.0675
|
|
|
$
|
0.0675
|
|
|
$
|
0.1075
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Year Ended December 31, 2014
|
||||||||||||||
(in millions, except per-share amounts)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net Sales Detail:
|
|
|
|
|
|
|
|
|
||||||||
Corporate:
|
|
|
|
|
|
|
|
|
||||||||
Medium/Large
|
|
$
|
1,274.8
|
|
|
$
|
1,395.4
|
|
|
$
|
1,374.8
|
|
|
$
|
1,440.3
|
|
Small Business
|
|
230.8
|
|
|
260.8
|
|
|
247.9
|
|
|
250.7
|
|
||||
Total Corporate
|
|
1,505.6
|
|
|
1,656.2
|
|
|
1,622.7
|
|
|
1,691.0
|
|
||||
Public:
|
|
|
|
|
|
|
|
|
||||||||
Government
|
|
254.2
|
|
|
313.1
|
|
|
441.3
|
|
|
440.8
|
|
||||
Education
|
|
321.6
|
|
|
527.0
|
|
|
632.8
|
|
|
342.6
|
|
||||
Healthcare
|
|
394.1
|
|
|
431.5
|
|
|
394.7
|
|
|
385.7
|
|
||||
Total Public
|
|
969.9
|
|
|
1,271.6
|
|
|
1,468.8
|
|
|
1,169.1
|
|
||||
Other
|
|
176.8
|
|
|
178.2
|
|
|
174.6
|
|
|
190.0
|
|
||||
Net sales
|
|
$
|
2,652.3
|
|
|
$
|
3,106.0
|
|
|
$
|
3,266.1
|
|
|
$
|
3,050.1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
|
$
|
425.2
|
|
|
$
|
496.9
|
|
|
$
|
507.3
|
|
|
$
|
491.9
|
|
Income from operations
|
|
135.8
|
|
|
188.2
|
|
|
184.7
|
|
|
164.3
|
|
||||
Net income
|
|
50.9
|
|
|
86.6
|
|
|
55.6
|
|
|
51.8
|
|
||||
Net income per common share
(1)
:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
0.30
|
|
|
0.51
|
|
|
0.33
|
|
|
0.30
|
|
||||
Diluted
|
|
0.30
|
|
|
0.50
|
|
|
0.32
|
|
|
0.30
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share
|
|
$
|
0.0425
|
|
|
$
|
0.0425
|
|
|
$
|
0.0425
|
|
|
$
|
0.0675
|
|
(1)
|
Basic and diluted net income per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted net income per share.
|
|
|
|
|
|
|
|
|
|
||||||||
(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, 2015
|
|
$
|
5.7
|
|
|
$
|
4.2
|
|
|
$
|
(3.9
|
)
|
|
$
|
6.0
|
|
Year Ended December 31, 2014
|
|
5.4
|
|
|
5.4
|
|
|
(5.1
|
)
|
|
5.7
|
|
||||
Year Ended December 31, 2013
|
|
5.4
|
|
|
2.8
|
|
|
(2.8
|
)
|
|
5.4
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Reserve for sales returns:
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2015
|
|
$
|
5.1
|
|
|
$
|
34.4
|
|
|
$
|
(34.6
|
)
|
|
$
|
4.9
|
|
Year Ended December 31, 2014
|
|
5.1
|
|
|
36.2
|
|
|
(36.2
|
)
|
|
5.1
|
|
||||
Year Ended December 31, 2013
|
|
4.4
|
|
|
35.0
|
|
|
(34.3
|
)
|
|
5.1
|
|
/s/ Ernst & Young LLP
|
Chicago, Illinois
|
February 24, 2016
|
(a)
|
Financial Statements and Schedules
|
(1)
|
Consolidated Financial Statements:
|
|
Page
|
|
|
(2)
|
Financial Statement Schedules:
|
(b)
|
Exhibits
|
|
|
|
CDW CORPORATION
|
|
|
|
|
|
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Date:
|
February 24, 2016
|
|
By:
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/s/ Thomas E. Richards
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Thomas E. Richards
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Chairman, President and Chief Executive Officer
|
Signature
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Title
|
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Date
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|
||
/s/ Thomas E. Richards
|
|
Chairman, President and Chief Executive Officer
(principal executive officer) and Director
|
|
February 24, 2016
|
Thomas E. Richards
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|
|
||
/s/ Ann E. Ziegler
|
|
Senior Vice President and Chief Financial Officer
(principal financial officer)
|
|
February 24, 2016
|
Ann E. Ziegler
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|
||
/s/ Neil B. Fairfield
|
|
Vice President and Controller
(principal accounting officer)
|
|
February 24, 2016
|
Neil B. Fairfield
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|
||
/s/ Steven W. Alesio
|
|
Director
|
|
February 24, 2016
|
Steven W. Alesio
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|
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|
||
/s/ Barry K. Allen
|
|
Director
|
|
February 24, 2016
|
Barry K. Allen
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|
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|
||
/s/ James A. Bell
|
|
Director
|
|
February 24, 2016
|
James A. Bell
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|
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/s/ Benjamin D. Chereskin
|
|
Director
|
|
February 24, 2016
|
Benjamin D. Chereskin
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|
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|
||
/s/ Lynda M. Clarizio
|
|
Director
|
|
February 24, 2016
|
Lynda M. Clarizio
|
|
|
|
|
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|
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/s/ Glenn M. Creamer
|
|
Director
|
|
February 24, 2016
|
Glenn M. Creamer
|
|
|
|
|
|
|
|
||
/s/ Michael J. Dominguez
|
|
Director
|
|
February 24, 2016
|
Michael J. Dominguez
|
|
|
|
|
|
|
|
||
/s/ Paul J. Finnegan
|
|
Director
|
|
February 24, 2016
|
Paul J. Finnegan
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|
|
|
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|
||
/s/ David W. Nelms
|
|
Director
|
|
February 24, 2016
|
David W. Nelms
|
|
|
|
|
|
|
|
||
/s/ Robin P. Selati
|
|
Director
|
|
February 24, 2016
|
Robin P. Selati
|
|
|
|
|
|
|
|
||
/s/ Joseph R. Swedish
|
|
Director
|
|
February 24, 2016
|
Joseph R. Swedish
|
|
|
|
|
|
|
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|
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/s/ Donna F. Zarcone
|
|
Director
|
|
February 24, 2016
|
Donna F. Zarcone
|
|
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Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Fifth Amended and Restated Certificate of Incorporation of CDW Corporation, previously filed as Exhibit 3.1 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) 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 Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) 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
|
|
Amended and Restated By-Laws of CDW Finance Corporation, previously filed as Exhibit 3.1 with CDW Corporation's Form 10-Q filed on May 8, 2015 and incorporated herein by reference.
|
|
|
|
3.7*
|
|
Articles of Organization of CDW Technologies LLC (formerly CDW Technologies, Inc.).
|
|
|
|
3.8*
|
|
Operating Agreement of CDW Technologies LLC (formerly CDW Technologies, Inc.).
|
|
|
|
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
|
|
Amended and Restated Limited Liability Company Agreement of CDW Government LLC, previously filed as Exhibit 3.12 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
|
|
Amended and Restated By-Laws of CDW Logistics, Inc., previously filed as Exhibit 3.14 with CDW Corporation’s Form S-3 filed on July 31, 2014 (Reg. No. 333-197744) and incorporated herein by reference.
|
|
|
|
4.1
|
|
Specimen Common Stock Certificate, previously filed as Exhibit 4.1 with CDW Corporation’s Amendment No. 3 to Form S-1 filed on June 25, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
4.2
|
|
Indenture, dated as of August 5, 2014, 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 August 6, 2014 and incorporated herein by reference.
|
|
|
|
Exhibit
Number
|
|
Description
|
4.3
|
|
Form of 6% Senior Note (included as Exhibit A to Exhibit 4.2), previously filed as Exhibit 4.2 with CDW Corporation’s Form 8-K filed on August 6, 2014 and incorporated herein by reference.
|
|
|
|
4.4
|
|
Second Supplemental Indenture, dated as of March 3, 2015, 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 March 3, 2015 and incorporated herein by reference.
|
|
|
|
4.5
|
|
Form of 5% Note (included as Exhibit A to Exhibit 4.4), previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on March 3, 2015 and incorporated herein by reference.
|
|
|
|
4.6
|
|
Base Indenture, dated as of December 1, 2014, by and among CDW LLC, CDW Finance Corporation, 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 8-K filed on December 1, 2014 and incorporated herein by reference.
|
|
|
|
4.7
|
|
First Supplemental Indenture, dated as of December 1, 2014, by and among CDW LLC, CDW Finance Corporation, CDW 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 December 1, 2014 and incorporated herein by reference.
|
|
|
|
4.8
|
|
Form of 5.5% Senior Note (included as Exhibit B to Exhibit 4.7), previously filed as Exhibit 4.3 with CDW Corporation's Form 8-K filed on December 1, 2014 and incorporated herein by reference.
|
|
|
|
10.1
|
|
Amended and Restated Revolving Loan Credit Agreement, dated as of June 6, 2014, 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, co-syndication agents and co-documentation agents party thereto, previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on June 9, 2014 and incorporated herein by reference.
|
|
|
|
10.2
|
|
Term Loan Agreement, dated as of April 29, 2013, by and among CDW LLC, the lenders from time to time party thereto, Barclays Bank PLC, as administrative agent and collateral agent, and the joint lead arrangers, joint bookrunners, co-syndication agents and co-documentation agents party thereto, previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on May 1, 2013 and incorporated herein by reference.
|
|
|
|
10.3
|
|
First Amendment to Term Loan Agreement, dated as of May 30, 2013, by and among CDW LLC, the lenders from time to time party thereto, and Barclays Bank PLC, as administrative agent and collateral agent, previously filed as Exhibit 10.3 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
10.4
|
|
Incremental Amendment, dated as of July 31, 2013, by and among CDW LLC, the lenders party thereto and Barclays Bank PLC, as administrative agent, previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on August 1, 2013 and incorporated herein by reference.
|
|
|
|
10.5
|
|
Third Amendment to the Term Loan Agreement, dated as of September 12, 2013, by and among CDW LLC, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, previously filed as Exhibit 10.2 with CDW Corporation’s Form 10-Q filed on November 7, 2013 and incorporated herein by reference.
|
|
|
|
10.6
|
|
Second Amended and Restated Guarantee and Collateral Agreement, dated April 29, 2013, by and among CDW LLC, the guarantors party thereto and Barclays Bank PLC, as collateral agent, previously filed as Exhibit 10.2 with CDW Corporation’s Form 8-K filed on May 1, 2013 and incorporated herein by reference.
|
|
|
|
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
|
|
Termination Agreement, dated as of June 12, 2013, by and among CDW Corporation, Madison Dearborn Partners V-B, L.P. and Providence Equity Partners L.L.C., previously filed as Exhibit 10.6 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
Exhibit
Number
|
|
Description
|
10.9
|
|
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.
|
|
|
|
10.10
|
|
Withdrawal from Registration Agreement, dated as of November 12, 2013, by and between CDW Corporation and Paul S. Shain, previously filed as Exhibit 10.10 with CDW Corporation’s Form 10-K filed on March 5, 2014 and incorporated herein by reference.
|
|
|
|
10.11
|
|
Withdrawal from Registration Agreement, dated as of November 13, 2013, by and among CDW Corporation, James R. Shanks and BOS Holdings, LLC, previously filed as Exhibit 10.11 with CDW Corporation’s Form 10-K filed on March 5, 2014 and incorporated herein by reference.
|
|
|
|
10.12
|
|
Withdrawal from Registration Agreement, dated as of August 27, 2014, by and between CDW Corporation, John A. Edwardson and Whispering Pines Capital LLC , previously filed as Exhibit 10.1 with CDW Corporation’s Form 10-Q filed on November 12, 2014 and incorporated herein by reference.
|
|
|
|
10.13§
|
|
Amended and Restated Compensation Protection Agreement, dated as of March 24, 2014, by and among CDW Corporation, CDW LLC and Thomas E. Richards, previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on March 28, 2014 and incorporated herein by reference.
|
|
|
|
10.14§
|
|
Form of Compensation Protection Agreement (executive officers other than Thomas E. Richards), previously filed as Exhibit 10.2 with CDW Corporation’s Form 8-K filed on March 28, 2014 and incorporated herein by reference.
|
|
|
|
10.15§
|
|
Form of Noncompetition Agreement under the Compensation Protection Agreement, previously filed as Exhibit 10.3 with CDW Corporation’s Form 8-K filed on March 28, 2014 and incorporated herein by reference.
|
|
|
|
10.16§
|
|
Letter Agreement, dated as of September 13, 2011, by and between CDW Direct, LLC and Christina M. Corley, previously filed as Exhibit 10.31 with CDW Corporation’s Form 10-K filed on March 9, 2012 and incorporated herein by reference.
|
|
|
|
10.17§
|
|
Form of Indemnification Agreement by and between CDW Corporation and its directors and officers, previously filed as Exhibit 10.32 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
10.18
|
|
Stockholders Agreement, dated as of June 10, 2013, by and among CDW Corporation, 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., Providence Equity Partners VI-A L.P. and the other securityholders party thereto, previously filed as Exhibit 10.33 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
10.19
|
|
Share Repurchase Agreement, dated as of May 17, 2015, by and among the Company, 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., MDCP Co-Investors (CDW), L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P. and PEP Co-Investors (CWD) L.P., previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on May 21, 2015 and incorporated herein by reference.
|
|
|
|
10.20
|
|
Letter Agreement, dated as of May 18, 2015, by and among the Company, 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., MDCP Co-Investors (CDW), L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P. and PEP Co-Investors (CWD) L.P., previously filed as Exhibit 10.2 with CDW Corporation's Form 8-K filed on May 21, 2015 and incorporated herein by reference.
|
|
|
|
10.21§
|
|
CDW Corporation 2013 Senior Management Incentive Plan, previously filed as Exhibit 10.34 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
10.22§
|
|
CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.35 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
Exhibit
Number
|
|
Description
|
10.23§
|
|
CDW Corporation Coworker Stock Purchase Plan, previously filed as Exhibit 10.36 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
10.24§
|
|
Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Thomas E. Richards), previously filed as Exhibit 10.37 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
10.25§
|
|
Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Neal J. Campbell and Christina M. Corley), previously filed as Exhibit 10.38 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.
|
|
|
|
10.26§
|
|
Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award 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 10.12 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by reference.
|
|
|
|
10.27§
|
|
Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka), previously filed as Exhibit 10.13 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by reference.
|
|
|
|
10.28§
|
|
CDW Amended and Restated Restricted Debt Unit Plan, previously filed as Exhibit 10.3 with CDW Corporation’s Form 10-Q filed on November 7, 2013 and incorporated herein by reference.
|
|
|
|
10.29§
|
|
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.
|
|
|
|
10.30§
|
|
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), 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.
|
|
|
|
10.31§
|
|
Form of Stock Option Agreement (executive officers) under the CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.4 with CDW Corporation’s Form 10-Q filed on May 12, 2014 and incorporated herein by reference.
|
|
|
|
10.32§
|
|
Form of Performance Share Unit Award Agreement (executive officers) under the CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.5 with CDW Corporation’s Form 10-Q filed on May 12, 2014 and incorporated herein by reference.
|
10.33§
|
|
Form of Performance Share Award Agreement (executive officers) under the CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.31 with CDW Corporation's Form 10-K filed on February 26, 2015 and incorporated herein by reference.
|
|
|
|
10.34§
|
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement under the CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.6 with CDW Corporation’s Form 10-Q filed on May 12, 2014 and incorporated herein by reference.
|
|
|
|
12.1*
|
|
Computation of ratio of earnings to fixed charges.
|
|
|
|
21.1*
|
|
List of subsidiaries.
|
|
|
|
23.1*
|
|
Consent of Ernst & Young LLP.
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 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.
|
|
|
|
Exhibit
Number
|
|
Description
|
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.
|
§
|
A management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K.
|
Article 1.
|
Name of the limited liability company:
CDW Technologies LLC |
|
|
Article 2.
|
The limited liability company is organized under Ch. 183 of the Wisconsin Statutes.
|
|
|
Article 3.
|
Name of the initial registered agent:
Corporation Service Company |
|
|
Article 4.
|
Street address of the initial registered office:
8040 Excelsior Drive, Suite 400, Madison, WI 53717 |
|
|
Article 5.
|
Management of the limited liability company shall be vested in:
its Members |
|
|
Article 6.
|
Name and complete address of each organizer:
Timothy S. Crisp
c/o Foley & Lardner LLP 150 East Gilman Street, Suite 5000 Madison, Wisconsin 53703 |
|
|
|
This document was drafted by:
Timothy S. Crisp c/o Foley & Lardner LLP 150 E. Gilman Street, Suite 5000 Madison, Wisconsin 53703
This document has a delayed effective date and time of 11:59 PM (Central Time) on December 31, 2015.
|
Name
|
|
Address
|
CDW LLC
|
|
200 North Milwaukee Avenue
Vernon Hills, IL 60061
|
|
|
|
|
|
|
Its:
|
Vice President, Treasurer and Assistant Secretary
|
Its:
|
Vice President, Treasurer and Assistant Secretary
|
Name of Member
|
Number of Common Units
|
CDW LLC
|
1
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Years Ended December 31,
|
||||||||||||||||||
(dollars in millions)
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||
Computation of earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes and adjustment for (income) loss from equity investees
|
$
|
28.3
|
|
|
$
|
185.8
|
|
|
$
|
194.9
|
|
|
$
|
385.5
|
|
|
$
|
657.2
|
|
Distributed income from equity investees
|
0.5
|
|
|
1.2
|
|
|
1.0
|
|
|
1.1
|
|
|
1.0
|
|
|||||
Fixed charges
|
324.9
|
|
|
312.4
|
|
|
254.3
|
|
|
202.8
|
|
|
164.5
|
|
|||||
Total earnings
|
$
|
353.7
|
|
|
$
|
499.4
|
|
|
$
|
450.2
|
|
|
$
|
589.4
|
|
|
$
|
822.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Computation of fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
302.0
|
|
|
$
|
294.4
|
|
|
$
|
241.8
|
|
|
$
|
191.3
|
|
|
$
|
153.5
|
|
Amortization of deferred financing costs, debt premium and debt discount
|
15.7
|
|
|
13.6
|
|
|
8.8
|
|
|
6.4
|
|
|
6.4
|
|
|||||
Portion of rent expense representative of interest
(1)
|
7.2
|
|
|
4.4
|
|
|
3.7
|
|
|
5.1
|
|
|
4.6
|
|
|||||
Total fixed charges
|
$
|
324.9
|
|
|
$
|
312.4
|
|
|
$
|
254.3
|
|
|
$
|
202.8
|
|
|
$
|
164.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
1.1
|
|
|
1.6
|
|
|
1.8
|
|
|
2.9
|
|
|
5.0
|
|
(1)
|
Fixed charges include a reasonable estimation of the interest factor included in rental expense.
|
|
|
|
Subsidiary
|
|
Jurisdiction of Organization
|
CDW LLC
|
|
Illinois
|
CDW Finance Corporation
|
|
Delaware
|
CDW Technologies LLC
|
|
Wisconsin
|
CDW Direct, LLC
|
|
Illinois
|
CDW Government LLC
|
|
Illinois
|
CDW Logistics, Inc.
|
|
Illinois
|
CDW Canada Corp.
|
|
Novia Scotia
|
CDW NA Limited
|
|
United Kingdom
|
CDW International Holdings Limited
|
|
United Kingdom
|
Kelway Bidco Limited
|
|
United Kingdom
|
Kelway Holdings Limited
|
|
United Kingdom
|
Kelway Limited
|
|
United Kingdom
|
Kelway Topco Limited
|
|
Jersey
|
1.
|
I have reviewed this annual report on Form 10-K of 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
|
Chairman, President and Chief Executive Officer
|
CDW Corporation
|
February 24, 2016
|
1.
|
I have reviewed this annual report on Form 10-K of 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
|
February 24, 2016
|
/s/ Thomas E. Richards
|
Thomas E. Richards
|
Chairman, President and Chief Executive Officer
|
CDW Corporation
|
February 24, 2016
|
/s/ Ann E. Ziegler
|
Ann E. Ziegler
|
Senior Vice President and Chief Financial Officer
|
CDW Corporation
|
February 24, 2016
|