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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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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth 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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Item 16.
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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
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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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Data Center: We assess our customers data center needs, design flexible, resilient and efficient solutions and manage the solution throughout its lifecycle. Our broad portfolio of hardware and software products, encompassing both on and off-premise solutions, enables us to provide well-integrated solutions, including converged and hyper-converged infrastructure, physical and virtualized servers, software defined automation and orchestration solutions, storage and energy-efficient power and cooling.
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•
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Digital Workspace: We build end-to-end solutions that deliver access to applications that improve our customers' productivity regardless of device or location. We connect our customers' physical devices, including laptops, desktops, IP Phones, mobile devices and print systems. We utilize collaboration solutions to unite applications via the integration of products that facilitate the use of multiple enterprise communication methods including email, persistent chat, social media, voice and video. We also host cloud-based collaboration solutions. Our solutions provide the tools that allow our customers' employees to share knowledge, ideas and information among each other and with clients and partners effectively, securely and quickly.
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•
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Security: We assess our customers' security needs and provide them with risk mitigation tools and services. Product design, architecture and implementation can take the form of hardware, software or Software as a Service. These tools and services are provided across a multitude of categories such as: endpoint security, email security, web security, intrusion prevention, authentication, firewall, virtual private network services and network access control. Security consulting engagements include security assessment, policy and procedure gap analysis, security roadmaps and healthchecks.
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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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Services: We advise on, architect and manage integrated business technology for our customers. Our solutions include integrated cloud, collaboration, data center, mobility and security business technology, from the physical to the application layer. We provide advisory, architectural and managed services across basic, discrete and integrated business technology solutions. We leverage best-in-class partner technology platforms to seamlessly architect and manage disparate IT platforms into integrated business technology solutions.
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Years Ended December 31,
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|||||||||||||||||||
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2018
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2017(1)(2)
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2016(1)(2)
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|||||||||||||||
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Dollars in
Millions |
|
Percentage
of Total Net Sales |
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Dollars in
Millions
|
|
Percentage
of Total Net Sales
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|
Dollars in
Millions
|
|
Percentage
of Total Net Sales
|
|||||||||
Notebooks/Mobile Devices
|
|
$
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4,053.6
|
|
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25.0
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%
|
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$
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3,519.8
|
|
|
23.7
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%
|
|
$
|
2,942.9
|
|
|
21.5
|
%
|
Netcomm Products
|
|
2,119.8
|
|
|
13.1
|
|
|
2,040.3
|
|
|
13.8
|
|
|
1,957.0
|
|
|
14.3
|
|
|||
Desktops
|
|
1,318.2
|
|
|
8.1
|
|
|
1,207.0
|
|
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8.1
|
|
|
1,087.7
|
|
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8.0
|
|
|||
Video
|
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1,185.6
|
|
|
7.3
|
|
|
1,078.4
|
|
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7.3
|
|
|
963.0
|
|
|
7.0
|
|
|||
Enterprise and Data Storage (Including Drives)
|
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1,099.2
|
|
|
6.8
|
|
|
1,087.3
|
|
|
7.3
|
|
|
1,073.9
|
|
|
7.9
|
|
|||
Other Hardware
|
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3,306.0
|
|
|
20.3
|
|
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3,027.6
|
|
|
20.4
|
|
|
2,891.5
|
|
|
21.1
|
|
|||
Total Hardware
|
|
13,082.4
|
|
|
80.6
|
|
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11,960.4
|
|
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80.6
|
|
|
10,916.0
|
|
|
79.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Software(3)
|
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2,347.0
|
|
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14.4
|
|
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2,156.9
|
|
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14.5
|
|
|
2,072.3
|
|
|
15.2
|
|
|||
Services(3)
|
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697.3
|
|
|
4.3
|
|
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602.7
|
|
|
4.1
|
|
|
564.2
|
|
|
4.1
|
|
|||
Other(4)
|
|
113.8
|
|
|
0.7
|
|
|
112.9
|
|
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0.8
|
|
|
120.2
|
|
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0.9
|
|
|||
Total Net sales
|
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$
|
16,240.5
|
|
|
100.0
|
%
|
|
$
|
14,832.9
|
|
|
100.0
|
%
|
|
$
|
13,672.7
|
|
|
100.0
|
%
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of ASU 2014-09, Revenue from Contracts with Customers, as amended ("Topic 606").
|
(2)
|
Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2018.
|
(3)
|
Certain software and services revenue is recorded on a net basis for accounting purposes, so the category percentage of net revenues is not representative of the category percentage of gross profits.
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(4)
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Includes items such as delivery charges to customers.
|
•
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resellers, such as Computacenter, Connection, Dimension Data, ePlus, Insight Enterprises, PCM, Presidio, SCC, Softchoice, World Wide Technology and many smaller resellers;
|
•
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manufacturers who sell directly to customers, such as Adobe, Apple, Dell, HP Inc. and Hewlett Packard Enterprise;
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•
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large service providers and system integrators, such as Accenture, Dell, Hewlett Packard Enterprise and IBM;
|
•
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communications service providers, such as AT&T, CenturyLink and Verizon;
|
•
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cloud providers, such as Amazon Web Services, Box and Microsoft;
|
•
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e-tailers, such as Amazon, Newegg and TigerDirect.com; and
|
•
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retailers (including their e-commerce activities), such as Office Depot and Staples.
|
•
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conduct business with our customers, including delivering services and solutions to them;
|
•
|
manage our inventory and accounts receivable and accounts payable;
|
•
|
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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maintain our cost-efficient operating model while scaling our business.
|
•
|
the imposition of additional trade law provisions or regulations, including the adoption or expansion of trade restrictions;
|
•
|
the imposition of additional duties, tariffs and other charges on imports and exports, including any resulting retaliatory tariffs or charges and any reductions in the production of products subject to such tariffs and charges;
|
•
|
foreign currency fluctuations; and
|
•
|
restrictions on the transfer of funds.
|
•
|
making it more difficult for us to satisfy our obligations with respect to our indebtedness;
|
•
|
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;
|
•
|
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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making it more difficult for us to obtain vendor financing from our vendor partners, including original equipment manufacturers and software publishers;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate;
|
•
|
placing us at a competitive disadvantage compared to any of our less-leveraged competitors;
|
•
|
increasing our vulnerability to both general and industry-specific adverse economic conditions; and
|
•
|
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.
|
•
|
incur or guarantee additional debt;
|
•
|
pay dividends or make distributions to holders of our capital stock or to make certain other restricted payments or investments;
|
•
|
repurchase or redeem capital stock;
|
•
|
make loans, capital expenditures or investments or acquisitions;
|
•
|
receive dividends or other payments from our subsidiaries;
|
•
|
enter into transactions with affiliates;
|
•
|
pledge our assets as collateral;
|
•
|
merge or consolidate with other companies or transfer all or substantially all of our assets;
|
•
|
transfer or sell assets, including capital stock of subsidiaries; and
|
•
|
prepay, repurchase or redeem debt.
|
•
|
will not be required to lend any additional amounts to us;
|
•
|
could elect to declare all borrowings outstanding thereunder, together with accrued and unpaid interest and fees, to be due and payable; or
|
•
|
could require us to apply all of our available cash to repay these borrowings.
|
•
|
our debt holders could declare all outstanding principal and interest to be due and payable;
|
•
|
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 CDW UK revolving credit facility could terminate their commitments to lend us money; and
|
•
|
we could be forced into bankruptcy or liquidation.
|
•
|
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;
|
•
|
downgrades by any securities analysts who follow our common stock;
|
•
|
future sales of our common stock by our officers, directors and significant stockholders;
|
•
|
market conditions or trends in our industry or the economy as a whole;
|
•
|
investors' perceptions of our prospects;
|
•
|
announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; and
|
•
|
changes in key personnel.
|
•
|
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;
|
•
|
establish a classified Board of Directors until the 2021 annual meeting of stockholders, so that not all members of our Board of Directors are elected at one time;
|
•
|
generally prohibit stockholder action by written consent, requiring all stockholder actions be taken at a meeting of our stockholders;
|
•
|
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;
|
•
|
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
|
•
|
provide that our Board of Directors is expressly authorized to make, alter or repeal our amended and restated bylaws.
|
Name
|
Age
|
Position
|
Christine A. Leahy
|
54
|
President and Chief Executive Officer and member of our Board of Directors since January 2019; Chief Revenue Officer from July 2017 to December 2018; Senior Vice President - International, Chief Legal Officer, and Corporate Secretary from May 2016 to July 2017; Senior Vice President, General Counsel and Corporate Secretary from January 2007 to May 2016.
|
Thomas E. Richards
|
64
|
Executive Chairman of our Board of Directors since January 2019; President and Chief Executive Officer from October 2011 to December 2018; Chairman of the Board of Directors from January 2013 to December 2018.
|
Jill M. Billhorn
|
57
|
Senior Vice President, Corporate Sales since January 2019; Vice President, Strategic Solution Sales of CDW Direct, LLC from January 2018 to December 2018; Vice President, East Region of CDW Direct, LLC from August 2015 to January 2018; Vice President - Small Business of CDW Direct, LLC from August 2010 to August 2015.
|
Mark C. Chong
|
48
|
Senior Vice President of Strategy and Marketing since November 2016; Partner, Bain & Company from January 2010 to September 2016 and Principal from September 2007 to December 2009.
|
Elizabeth H. Connelly
|
54
|
Chief Human Resources Officer and Senior Vice President, Coworker Services since December 2018; Managing Director and Head, Commercial Bank Healthcare, Higher Education and Not-for-Profit Banking at J.P. Morgan Chase & Company from March 2012 to December 2018.
|
Christina M. Corley
|
51
|
Chief Operating Officer since January 2019; Senior Vice President, Commercial and International Markets from July 2017 to December 2018; Senior Vice President, Corporate Sales from September 2011 to July 2017.
|
Douglas E. Eckrote
|
54
|
Senior Vice President, Small Business Sales and eCommerce since August 2016; Senior Vice President, Strategic Solutions and Services from November 2009 to August 2016.
|
Collin B. Kebo
|
52
|
Senior Vice President and Chief Financial Officer since January 2018; Vice President, Financial Planning and Analysis from December 2008 to December 2017; Chief Financial Officer - International from May 2016 to December 2017.
|
Robert F. Kirby
|
53
|
Senior Vice President, Public Sales since July 2018; Vice President, Federal and State and Local Sales of CDW Government LLC from June 2011 to August 2018.
|
Frederick J. Kulevich
|
53
|
Senior Vice President, General Counsel and Corporate Secretary since October 2017; Vice President and Deputy General Counsel from May 2016 to October 2017; Vice President and Assistant General Counsel from May 2014 to May 2016; Senior Director, Ethics and Compliance from July 2006 to May 2014.
|
Christina V. Rother
|
55
|
Senior Vice President, Integrated Technology Solutions since July 2018; Senior Vice President, Public and Advanced Technology Sales from September 2011 to July 2018.
|
Jonathan J. Stevens
|
49
|
Senior Vice President, Operations and Chief Information Officer since November 2009.
|
Matthew A. Troka
|
48
|
Senior Vice President, Product and Partner Management since March 2011.
|
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 (in millions)
|
|
Maximum Dollar Value of Shares that May Yet be Purchased Under the Program(1)
(in millions)
|
||||||
October 1 through October 31, 2018
|
|
1.1
|
|
|
$
|
83.58
|
|
|
1.1
|
|
|
$
|
532.4
|
|
November 1 through November 30, 2018
|
|
1.1
|
|
|
$
|
89.22
|
|
|
1.1
|
|
|
$
|
433.4
|
|
December 1 through December 31, 2018
|
|
1.1
|
|
|
$
|
89.24
|
|
|
1.1
|
|
|
$
|
335.8
|
|
Total
|
|
3.3
|
|
|
|
|
3.3
|
|
|
|
(1)
|
The amounts presented in this column are the remaining total authorized value to be spent after each month's repurchases.
|
|
|
December 31, 2013
|
|
December 31, 2014
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2018
|
||||||||||||
CDW Corp
|
|
$
|
100
|
|
|
$
|
152
|
|
|
$
|
183
|
|
|
$
|
229
|
|
|
$
|
308
|
|
|
$
|
364
|
|
S&P MidCap 400 index
|
|
$
|
100
|
|
|
$
|
108
|
|
|
$
|
104
|
|
|
$
|
124
|
|
|
$
|
142
|
|
|
$
|
124
|
|
CDW Peers
|
|
$
|
100
|
|
|
$
|
109
|
|
|
$
|
107
|
|
|
$
|
133
|
|
|
$
|
151
|
|
|
$
|
127
|
|
|
|
|
||||||||||||||||||
|
|
Years Ended December 31,
|
||||||||||||||||||
(dollars in millions, except per share amounts)
|
|
2018
|
|
2017(1)
|
|
2016(1)
|
|
2015(2)
|
|
2014
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
16,240.5
|
|
|
$
|
14,832.9
|
|
|
$
|
13,672.7
|
|
|
$
|
12,988.7
|
|
|
$
|
12,074.5
|
|
Cost of sales
|
|
13,533.6
|
|
|
12,382.7
|
|
|
11,344.4
|
|
|
10,872.9
|
|
|
10,153.2
|
|
|||||
Gross profit
|
|
2,706.9
|
|
|
2,450.2
|
|
|
2,328.3
|
|
|
2,115.8
|
|
|
1,921.3
|
|
|||||
Selling and administrative expenses
|
|
1,537.1
|
|
|
1,410.0
|
|
|
1,345.4
|
|
|
1,226.0
|
|
|
1,110.3
|
|
|||||
Advertising expense
|
|
182.5
|
|
|
173.7
|
|
|
162.9
|
|
|
147.8
|
|
|
138.0
|
|
|||||
Operating income
|
|
987.3
|
|
|
866.5
|
|
|
820.0
|
|
|
742.0
|
|
|
673.0
|
|
|||||
Interest expense, net
|
|
(148.6
|
)
|
|
(150.5
|
)
|
|
(146.5
|
)
|
|
(159.5
|
)
|
|
(197.3
|
)
|
|||||
Net loss on extinguishments of long-term debt
|
|
—
|
|
|
(57.4
|
)
|
|
(2.1
|
)
|
|
(24.3
|
)
|
|
(90.7
|
)
|
|||||
Gain on remeasurement of equity investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98.1
|
|
|
—
|
|
|||||
Other income (expense), net
|
|
1.8
|
|
|
2.1
|
|
|
1.8
|
|
|
(9.3
|
)
|
|
2.7
|
|
|||||
Income before income taxes
|
|
840.5
|
|
|
660.7
|
|
|
673.2
|
|
|
647.0
|
|
|
387.7
|
|
|||||
Income tax expense
|
|
(197.5
|
)
|
|
(137.6
|
)
|
|
(248.1
|
)
|
|
(243.9
|
)
|
|
(142.8
|
)
|
|||||
Net income
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
425.1
|
|
|
$
|
403.1
|
|
|
$
|
244.9
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
4.26
|
|
|
$
|
3.37
|
|
|
$
|
2.60
|
|
|
$
|
2.37
|
|
|
$
|
1.44
|
|
Diluted
|
|
$
|
4.19
|
|
|
$
|
3.31
|
|
|
$
|
2.56
|
|
|
$
|
2.35
|
|
|
$
|
1.42
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share
|
|
$
|
0.9250
|
|
|
$
|
0.6900
|
|
|
$
|
0.4825
|
|
|
$
|
0.3100
|
|
|
$
|
0.1950
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
205.8
|
|
|
$
|
144.2
|
|
|
$
|
263.7
|
|
|
$
|
37.6
|
|
|
$
|
344.5
|
|
Working capital
|
|
993.7
|
|
|
874.2
|
|
|
959.9
|
|
|
903.5
|
|
|
985.4
|
|
|||||
Total assets
|
|
7,167.7
|
|
|
6,966.7
|
|
|
6,958.4
|
|
|
6,755.3
|
|
|
6,075.9
|
|
|||||
Total debt and capitalized lease obligations(3)
|
|
3,209.1
|
|
|
3,236.7
|
|
|
3,236.6
|
|
|
3,262.9
|
|
|
3,166.1
|
|
|||||
Total stockholders' equity
|
|
975.2
|
|
|
985.6
|
|
|
1,047.9
|
|
|
1,095.9
|
|
|
936.5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
|
$
|
86.1
|
|
|
$
|
81.1
|
|
|
$
|
63.5
|
|
|
$
|
90.1
|
|
|
$
|
55.0
|
|
Gross profit as a percentage of Net sales
|
|
16.7
|
%
|
|
16.5
|
%
|
|
17.0
|
%
|
|
16.3
|
%
|
|
15.9
|
%
|
|||||
EBITDA(4)
|
|
$
|
1,254.7
|
|
|
$
|
1,072.1
|
|
|
$
|
1,074.2
|
|
|
$
|
1,033.9
|
|
|
$
|
792.9
|
|
Adjusted EBITDA(4)
|
|
1,302.2
|
|
|
1,186.0
|
|
|
1,118.1
|
|
|
1,018.5
|
|
|
907.0
|
|
|||||
Non-GAAP net income(5)
|
|
794.3
|
|
|
605.9
|
|
|
569.7
|
|
|
503.5
|
|
|
409.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
|
$
|
905.9
|
|
|
$
|
777.7
|
|
|
$
|
604.0
|
|
|
$
|
277.5
|
|
|
$
|
435.0
|
|
Investing activities
|
|
(86.1
|
)
|
|
(81.1
|
)
|
|
(65.9
|
)
|
|
(354.4
|
)
|
|
(164.8
|
)
|
|||||
Financing activities
|
|
(754.8
|
)
|
|
(818.7
|
)
|
|
(304.6
|
)
|
|
(226.5
|
)
|
|
(112.0
|
)
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Includes the impact of consolidating five months of CDW UK's financial results for the year ended December 31, 2015.
|
(3)
|
Excludes borrowings of $429 million, $498 million, $580 million, $440 million and $332 million as of December 31, 2018, 2017, 2016, 2015 and 2014, respectively, under our inventory financing agreements. We do not include these
|
(4)
|
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 or financial position 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 management 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)
|
|
2018
|
|
2017(1)
|
|
2016(1)
|
|
2015(2)
|
|
2014
|
||||||||||
Net income
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
425.1
|
|
|
$
|
403.1
|
|
|
$
|
244.9
|
|
Depreciation and amortization
|
|
265.6
|
|
|
260.9
|
|
|
254.5
|
|
|
227.4
|
|
|
207.9
|
|
|||||
Income tax expense
|
|
197.5
|
|
|
137.6
|
|
|
248.1
|
|
|
243.9
|
|
|
142.8
|
|
|||||
Interest expense, net
|
|
148.6
|
|
|
150.5
|
|
|
146.5
|
|
|
159.5
|
|
|
197.3
|
|
|||||
EBITDA
|
|
1,254.7
|
|
|
1,072.1
|
|
|
1,074.2
|
|
|
1,033.9
|
|
|
792.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-cash equity-based compensation
|
|
40.7
|
|
|
43.7
|
|
|
39.2
|
|
|
31.2
|
|
|
16.4
|
|
|||||
Net loss on extinguishments of long-term debt(3)
|
|
—
|
|
|
57.4
|
|
|
2.1
|
|
|
24.3
|
|
|
90.7
|
|
|||||
Gain on remeasurement of equity investment(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98.1
|
)
|
|
—
|
|
|||||
Other adjustments(5)
|
|
6.8
|
|
|
12.8
|
|
|
2.6
|
|
|
27.2
|
|
|
7.0
|
|
|||||
Adjusted EBITDA
|
|
$
|
1,302.2
|
|
|
$
|
1,186.0
|
|
|
$
|
1,118.1
|
|
|
$
|
1,018.5
|
|
|
$
|
907.0
|
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Includes the impact of consolidating five months of CDW UK's financial results for the year ended December 31, 2015.
|
(3)
|
During the years ended December 31, 2017, 2016, 2015 and 2014, 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.
|
(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 CDW UK.
|
(5)
|
Includes other expenses such as payroll taxes on equity-based compensation for the years ended December 31, 2018 and 2017, expenses related to the acquisition of Scalar Decisions Inc. incurred during 2018, integration expenses related to CDW UK during 2017, and the reinstatement of prior year unclaimed property balances as a result of a retroactive Illinois state law change enacted during 2017. The year ended December 31, 2016 includes our share of the settlement payments received from the Dynamic Random Access Memory class actions lawsuits and the favorable resolution of a local sales tax matter, offset by integration expenses related to CDW
|
(5)
|
Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated tax benefits, acquisition and integration expenses, and gains and losses from the extinguishments 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 or financial position 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 management 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 analysts, investors and management with helpful information regarding the underlying operating performance of our business, as this measure removes the impact of items that management believes are not reflective of underlying operating performance. Management uses this measure to evaluate period-over-period performance as management believes it provides a more comparable measure of the underlying business.
|
|
|
Years Ended December 31,
|
||||||||||||||||||
(in millions)
|
|
2018
|
|
2017(1)
|
|
2016(1)
|
|
2015(2)
|
|
2014
|
||||||||||
Net income
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
425.1
|
|
|
$
|
403.1
|
|
|
$
|
244.9
|
|
Amortization of intangibles(3)
|
|
182.7
|
|
|
185.1
|
|
|
187.2
|
|
|
173.9
|
|
|
161.2
|
|
|||||
Equity-based compensation
|
|
40.7
|
|
|
43.7
|
|
|
39.2
|
|
|
31.2
|
|
|
16.4
|
|
|||||
Net loss on extinguishments of long-term debt
|
|
—
|
|
|
57.4
|
|
|
2.1
|
|
|
24.3
|
|
|
90.7
|
|
|||||
Gain on remeasurement of equity investment(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98.1
|
)
|
|
—
|
|
|||||
Other adjustments(5)
|
|
5.9
|
|
|
11.5
|
|
|
1.9
|
|
|
33.9
|
|
|
(0.3
|
)
|
|||||
Aggregate adjustment for income taxes(6)
|
|
(78.0
|
)
|
|
(214.9
|
)
|
|
(85.8
|
)
|
|
(64.8
|
)
|
|
(103.0
|
)
|
|||||
Non-GAAP net income
|
|
$
|
794.3
|
|
|
$
|
605.9
|
|
|
$
|
569.7
|
|
|
$
|
503.5
|
|
|
$
|
409.9
|
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Includes the impact of consolidating five months for the year ended December 31, 2015 of CDW UK's financial results.
|
(3)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(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 CDW UK.
|
(5)
|
Includes other expenses such as payroll taxes on equity-based compensation for the years ended December 31, 2018 and 2017, expenses related to the acquisition of Scalar Decisions Inc. incurred during 2018, integration expenses related to CDW UK during 2017, and the reinstatement of prior year unclaimed property balances as a result of a retroactive Illinois state law change enacted during 2017. The year ended December 31, 2016 includes our share of the settlement payments received from the Dynamic Random Access Memory class actions lawsuits and the favorable resolution of a local sales tax matter, offset by integration expenses related to CDW UK and expenses related to the consolidation of office locations north of Chicago. The year ended December 31, 2015 includes our 35% share of CDW UK's net loss, which entails our 35% share of an expense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to the acquisition. The years ended December 31, 2015 and 2014 include secondary-offering-related expenses and expenses related to the consolidation of office locations north of Chicago.
|
(6)
|
Aggregate adjustment for income taxes consists of the following:
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Total Non-GAAP adjustments
|
$
|
229.3
|
|
|
$
|
297.7
|
|
|
$
|
230.4
|
|
|
$
|
165.2
|
|
|
$
|
268.0
|
|
Weighted-average statutory effective rate
|
25.0
|
%
|
|
36.0
|
%
|
|
36.0
|
%
|
|
38.0
|
%
|
|
39.0
|
%
|
|||||
Income tax
|
(57.3
|
)
|
|
(107.2
|
)
|
|
(82.9
|
)
|
|
(62.8
|
)
|
|
(104.5
|
)
|
|||||
Deferred tax adjustment due to law changes
|
0.5
|
|
|
1.3
|
|
|
(1.5
|
)
|
|
(4.0
|
)
|
|
—
|
|
|||||
Excess tax benefits from equity-based compensation
|
(19.1
|
)
|
|
(36.2
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|||||
Tax Cuts and Jobs Act
|
(1.9
|
)
|
|
(75.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Withholding tax expense on the unremitted earnings of our Canadian subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|||||
Non-deductible adjustments and other
|
(0.2
|
)
|
|
2.7
|
|
|
0.4
|
|
|
(1.3
|
)
|
|
1.5
|
|
|||||
Total aggregate adjustment for income taxes
|
$
|
(78.0
|
)
|
|
$
|
(214.9
|
)
|
|
$
|
(85.8
|
)
|
|
$
|
(64.8
|
)
|
|
$
|
(103.0
|
)
|
•
|
General economic conditions are a key factor affecting our results as they impact our customers' willingness to spend on information technology. This is particularly the case for business customers, as their purchases tend to reflect confidence in their business prospects, which are driven by their perceptions of business conditions. Purchasing behavior may be different between our Corporate customers and Small Business customers due to their perception of business conditions. Additionally, changes in trade policy and product constraints from suppliers could have an adverse impact on our business. There continues to be substantial uncertainty regarding the impact of Brexit. Potential adverse consequences of Brexit such as global market uncertainty, volatility in currency exchange rates, greater restrictions on imports and exports between UK and EU countries and increased regulatory complexities could have a negative impact on our business, financial condition and results of operations. To date, CDW UK is not seeing significant changes in the buying behavior of its customers even with the uncertainty related to the timing and terms of Brexit.
|
•
|
Changes in spending policies, budget priorities and funding levels are a key factor influencing the purchasing levels of government, healthcare and education customers. A prolonged partial shutdown of the US Government could have an adverse impact to our sales to Government customers and sales to our other customers that do business with the areas of the US Government affected by a partial shutdown. Additionally, a prolonged partial shutdown could impact cash collections from contracts with customers who do business with areas of the US Government affected by a partial shutdown.
|
•
|
Technology trends drive customer purchasing behaviors in the market. Current technology trends are focused on delivering greater flexibility and efficiency, as well as designing IT securely. These trends are driving customer adoption of solutions such as those delivered via cloud, software defined architectures and hybrid on-premise and off-premise combinations, as well as the evolution of the IT consumption model to more "as-a-service" offerings, including Device-as-a-Service ("DaaS") and managed services.
|
|
Years Ended December 31,
|
||||||||||
(dollars in millions)
|
2018
|
|
2017(1)
|
|
2016(1)
|
||||||
Net sales
|
$
|
16,240.5
|
|
|
$
|
14,832.9
|
|
|
$
|
13,672.7
|
|
Gross profit
|
2,706.9
|
|
|
2,450.2
|
|
|
2,328.3
|
|
|||
Operating income
|
987.3
|
|
|
866.5
|
|
|
820.0
|
|
|||
Net income
|
643.0
|
|
|
523.1
|
|
|
425.1
|
|
|||
Non-GAAP net income
|
794.3
|
|
|
605.9
|
|
|
569.7
|
|
|||
Adjusted EBITDA
|
1,302.2
|
|
|
1,186.0
|
|
|
1,118.1
|
|
|||
Average daily sales(2)
|
63.9
|
|
|
58.4
|
|
|
53.8
|
|
|||
Net debt(3)
|
3,002.8
|
|
|
3,091.3
|
|
|
2,970.7
|
|
|||
Cash conversion cycle (in days)(4)
|
19
|
|
|
19
|
|
|
19
|
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
There were 254 selling days for each of the years ended December 31, 2018, 2017 and 2016.
|
(3)
|
Defined as Total debt minus Cash and cash equivalents.
|
(4)
|
Cash conversion cycle is defined as days of sales outstanding in Accounts receivable and certain receivables due from vendors plus days of supply in Merchandise inventory minus days of purchases outstanding in Accounts payable and Accounts payable-inventory financing, based on a rolling three-month average.
|
|
|
Years Ended December 31,
|
||||||||||||
|
|
2018
|
|
2017(1)
|
||||||||||
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
||||||
Net sales
|
|
$
|
16,240.5
|
|
|
100.0
|
%
|
|
$
|
14,832.9
|
|
|
100.0
|
%
|
Cost of sales
|
|
13,533.6
|
|
|
83.3
|
|
|
12,382.7
|
|
|
83.5
|
|
||
Gross profit
|
|
2,706.9
|
|
|
16.7
|
|
|
2,450.2
|
|
|
16.5
|
|
||
Selling and administrative expenses
|
|
1,537.1
|
|
|
9.5
|
|
|
1,410.0
|
|
|
9.5
|
|
||
Advertising expense
|
|
182.5
|
|
|
1.1
|
|
|
173.7
|
|
|
1.2
|
|
||
Operating income
|
|
987.3
|
|
|
6.1
|
|
|
866.5
|
|
|
5.8
|
|
||
Interest expense, net
|
|
(148.6
|
)
|
|
(0.9
|
)
|
|
(150.5
|
)
|
|
(1.0
|
)
|
||
Net loss on extinguishments of long-term debt
|
|
—
|
|
|
—
|
|
|
(57.4
|
)
|
|
(0.4
|
)
|
||
Other income, net
|
|
1.8
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
||
Income before income taxes
|
|
840.5
|
|
|
5.2
|
|
|
660.7
|
|
|
4.5
|
|
||
Income tax expense
|
|
(197.5
|
)
|
|
(1.2
|
)
|
|
(137.6
|
)
|
|
(0.9
|
)
|
||
Net income
|
|
$
|
643.0
|
|
|
4.0
|
%
|
|
$
|
523.1
|
|
|
3.5
|
%
|
(1)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2018
|
|
2017(1)
|
|
|
|
|
|||||||||||||
(dollars in millions)
|
|
Net Sales
|
|
Percentage
of Total Net Sales |
|
Net Sales
|
|
Percentage
of Total Net Sales |
|
Dollar
Change |
|
Percent
Change(2) |
|||||||||
Corporate
|
|
$
|
6,842.5
|
|
|
42.1
|
%
|
|
$
|
6,172.8
|
|
|
41.6
|
%
|
|
$
|
669.7
|
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Small Business
|
|
1,359.6
|
|
|
8.4
|
|
|
1,220.5
|
|
|
8.2
|
|
|
139.1
|
|
|
11.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Public:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Government
|
|
2,097.3
|
|
|
12.9
|
|
|
2,109.8
|
|
|
14.2
|
|
|
(12.5
|
)
|
|
(0.6
|
)
|
|||
Education
|
|
2,327.4
|
|
|
14.3
|
|
|
2,184.5
|
|
|
14.7
|
|
|
142.9
|
|
|
6.5
|
|
|||
Healthcare
|
|
1,730.0
|
|
|
10.7
|
|
|
1,612.2
|
|
|
10.9
|
|
|
117.8
|
|
|
7.3
|
|
|||
Total Public
|
|
6,154.7
|
|
|
37.9
|
|
|
5,906.5
|
|
|
39.8
|
|
|
248.2
|
|
|
4.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other
|
|
1,883.7
|
|
|
11.6
|
|
|
1,533.1
|
|
|
10.4
|
|
|
350.6
|
|
|
22.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Net sales
|
|
$
|
16,240.5
|
|
|
100.0
|
%
|
|
$
|
14,832.9
|
|
|
100.0
|
%
|
|
$
|
1,407.6
|
|
|
9.5
|
%
|
(1)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
There were 254 selling days for each of the years ended December 31, 2018 and 2017.
|
|
|
Years Ended December 31,
|
|
|
|||||||||||||
|
|
2018
|
|
2017(1)
|
|
|
|||||||||||
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Percent Change
in Operating Income
|
|||||||
Segments:(2)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
|
$
|
536.9
|
|
|
7.8
|
%
|
|
$
|
487.9
|
|
|
7.9
|
%
|
|
10.0
|
%
|
Small Business
|
|
95.7
|
|
|
7.0
|
|
|
74.3
|
|
|
6.1
|
|
|
28.8
|
|
||
Public
|
|
410.8
|
|
|
6.7
|
|
|
374.4
|
|
|
6.3
|
|
|
9.7
|
|
||
Other(3)
|
|
82.2
|
|
|
4.4
|
|
|
57.1
|
|
|
3.7
|
|
|
43.9
|
|
||
Headquarters(4)
|
|
(138.3
|
)
|
|
nm*
|
|
|
(127.2
|
)
|
|
nm*
|
|
|
8.7
|
|
||
Total Operating income
|
|
$
|
987.3
|
|
|
6.1
|
%
|
|
$
|
866.5
|
|
|
5.8
|
%
|
|
13.9
|
%
|
(1)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Segment operating income includes the segment's direct operating income, allocations for certain Headquarters costs, allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors.
|
(3)
|
Includes the financial results for our other operating segments, CDW UK and CDW Canada, which do not meet the reportable segment quantitative thresholds.
|
(4)
|
Includes Headquarters function costs that are not allocated to the segments.
|
Month of Extinguishment
|
Debt Instrument
|
|
(in millions)
|
|
||||||
|
Amount Extinguished
|
|
Loss Recognized
|
|
||||||
February 2017
|
Senior Secured Term Loan Facility
|
|
$
|
1,483.0
|
|
|
$
|
(13.7
|
)
|
|
March 2017
|
Senior Notes due 2022
|
|
600.0
|
|
|
(42.5
|
)
|
(1)
|
||
March 2017
|
Senior Secured Asset-based Revolving Credit Facility
|
|
—
|
|
|
(1.2
|
)
|
|
||
|
Total Loss Recognized
|
|
|
|
$
|
(57.4
|
)
|
|
(1)
|
We repaid all of the remaining aggregate principal amount outstanding. The loss recognized represents the difference between the aggregate principal amount and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing fees and premium.
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017(1)
|
||||||||||||||||||||
(in millions)
|
|
Income before income taxes
|
|
Income tax expense(2)
|
|
Net income
|
|
Income before income taxes
|
|
Income tax expense(2)
|
|
Net income
|
||||||||||||
GAAP (as reported)
|
|
$
|
840.5
|
|
|
$
|
(197.5
|
)
|
|
$
|
643.0
|
|
|
$
|
660.7
|
|
|
$
|
(137.6
|
)
|
|
$
|
523.1
|
|
Amortization of intangibles(3)
|
|
182.7
|
|
|
(45.7
|
)
|
|
137.0
|
|
|
185.1
|
|
|
(66.6
|
)
|
|
118.5
|
|
||||||
Equity-based compensation
|
|
40.7
|
|
|
(29.2
|
)
|
|
11.5
|
|
|
43.7
|
|
|
(51.9
|
)
|
|
(8.2
|
)
|
||||||
Net loss on extinguishments of long-term debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57.4
|
|
|
(20.7
|
)
|
|
36.7
|
|
||||||
Tax Cuts and Jobs Act(4)
|
|
—
|
|
|
(1.9
|
)
|
|
(1.9
|
)
|
|
—
|
|
|
(75.5
|
)
|
|
(75.5
|
)
|
||||||
Other adjustments(5)
|
|
5.9
|
|
|
(1.2
|
)
|
|
4.7
|
|
|
11.5
|
|
|
(0.2
|
)
|
|
11.3
|
|
||||||
Non-GAAP
|
|
$
|
1,069.8
|
|
|
$
|
(275.5
|
)
|
|
$
|
794.3
|
|
|
$
|
958.4
|
|
|
$
|
(352.5
|
)
|
|
$
|
605.9
|
|
(1)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Income tax on non-GAAP adjustments includes excess tax benefits associated with equity compensation. Additionally, 2018 includes the impact of global intangible low tax income ("GILTI") on equity-based compensation and amortization of intangibles.
|
(3)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(4)
|
2018 is comprised of adjustments to the provisional amounts recorded to finalize the US federal and state impact of revaluing deferred tax assets and liabilities and mandatory repatriation tax due to the completion of the 2017 US federal
|
(5)
|
Includes other expenses such as payroll taxes on equity-based compensation for the year ended December 31, 2018 and 2017, expenses related to the acquisition of Scalar Decisions Inc. incurred during 2018, integration expenses related to CDW UK during 2017, the reinstatement of prior year unclaimed property balances in 2017 and tax benefits due to state law changes for the year ended December 31, 2017.
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
|
2018
|
|
Percentage of
Net Sales
|
|
2017(1)
|
|
Percentage of
Net Sales
|
||||
Net income
|
|
$
|
643.0
|
|
|
4.0%
|
|
$
|
523.1
|
|
|
3.5%
|
Depreciation and amortization
|
|
265.6
|
|
|
|
|
260.9
|
|
|
|
||
Income tax expense
|
|
197.5
|
|
|
|
|
137.6
|
|
|
|
||
Interest expense, net
|
|
148.6
|
|
|
|
|
150.5
|
|
|
|
||
EBITDA
|
|
1,254.7
|
|
|
7.7%
|
|
1,072.1
|
|
|
7.2%
|
||
|
|
|
|
|
|
|
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||
Equity-based compensation
|
|
40.7
|
|
|
|
|
43.7
|
|
|
|
||
Net loss on extinguishments of long-term debt
|
|
—
|
|
|
|
|
57.4
|
|
|
|
||
Other adjustments(2)
|
|
6.8
|
|
|
|
|
12.8
|
|
|
|
||
Total adjustments
|
|
47.5
|
|
|
|
|
113.9
|
|
|
|
||
Adjusted EBITDA
|
|
$
|
1,302.2
|
|
|
8.0%
|
|
$
|
1,186.0
|
|
|
8.0%
|
(1)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Includes other expenses such as payroll taxes on equity-based compensation and our share of net income from our equity investment during the years ended December 31, 2018 and 2017, expenses related to the acquisition of Scalar Decisions Inc. incurred during 2018, integration expenses related to CDW UK during 2017, and the reinstatement of prior year unclaimed property balances as a result of a retroactive Illinois state law change enacted during 2017. Also includes historical retention costs during the year ended December 31, 2017.
|
|
|
Years Ended December 31,
|
|
|
|
||||||||
(in millions)
|
|
2018
|
|
2017(1)
|
|
% Change
|
Average Daily % Change(2)
|
||||||
Net sales, as reported
|
|
$
|
16,240.5
|
|
|
$
|
14,832.9
|
|
|
9.5
|
%
|
9.5
|
%
|
Foreign currency translation(3)
|
|
—
|
|
|
34.1
|
|
|
|
|
||||
Consolidated Net sales, on a constant currency basis
|
|
$
|
16,240.5
|
|
|
$
|
14,867.0
|
|
|
9.2
|
%
|
9.2
|
%
|
(1)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
There were 254 selling days for each of the years ended December 31, 2018 and 2017.
|
(3)
|
Represents the effect of translating the prior year results of CDW UK and CDW Canada at the average exchange rates applicable in the current year.
|
|
|
Years Ended December 31,
|
||||||||||||
|
|
2017(1)
|
|
2016(1)
|
||||||||||
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
||||||
Net sales
|
|
$
|
14,832.9
|
|
|
100.0
|
%
|
|
$
|
13,672.7
|
|
|
100.0
|
%
|
Cost of sales
|
|
12,382.7
|
|
|
83.5
|
|
|
11,344.4
|
|
|
83.0
|
|
||
Gross profit
|
|
2,450.2
|
|
|
16.5
|
|
|
2,328.3
|
|
|
17.0
|
|
||
Selling and administrative expenses
|
|
1,410.0
|
|
|
9.5
|
|
|
1,345.4
|
|
|
9.8
|
|
||
Advertising expense
|
|
173.7
|
|
|
1.2
|
|
|
162.9
|
|
|
1.2
|
|
||
Operating income
|
|
866.5
|
|
|
5.8
|
|
|
820.0
|
|
|
6.0
|
|
||
Interest expense, net
|
|
(150.5
|
)
|
|
(1.0
|
)
|
|
(146.5
|
)
|
|
(1.1
|
)
|
||
Net loss on extinguishments of long-term debt
|
|
(57.4
|
)
|
|
(0.4
|
)
|
|
(2.1
|
)
|
|
—
|
|
||
Other income, net
|
|
2.1
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
||
Income before income taxes
|
|
660.7
|
|
|
4.5
|
|
|
673.2
|
|
|
4.9
|
|
||
Income tax expense
|
|
(137.6
|
)
|
|
(0.9
|
)
|
|
(248.1
|
)
|
|
(1.8
|
)
|
||
Net income
|
|
$
|
523.1
|
|
|
3.5
|
%
|
|
$
|
425.1
|
|
|
3.1
|
%
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2017(1)
|
|
2016(1)
|
|
|
|
|
|||||||||||||
(dollars in millions)
|
|
Net Sales
|
|
Percentage
of Total Net sales
|
|
Net Sales
|
|
Percentage
of Total Net Sales
|
|
Dollar
Change
|
|
Percent
Change (2)
|
|||||||||
Corporate
|
|
$
|
6,172.8
|
|
|
41.6
|
%
|
|
$
|
5,734.9
|
|
|
41.9
|
%
|
|
$
|
437.9
|
|
|
7.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Small Business
|
|
1,220.5
|
|
|
8.2
|
|
|
1,118.1
|
|
|
8.2
|
|
|
102.4
|
|
|
9.1
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Public:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Government
|
|
2,109.8
|
|
|
14.2
|
|
|
1,813.6
|
|
|
13.3
|
|
|
296.2
|
|
|
16.3
|
|
|||
Education
|
|
2,184.5
|
|
|
14.7
|
|
|
1,994.4
|
|
|
14.6
|
|
|
190.1
|
|
|
9.5
|
|
|||
Healthcare
|
|
1,612.2
|
|
|
10.9
|
|
|
1,669.4
|
|
|
12.2
|
|
|
(57.2
|
)
|
|
(3.4
|
)
|
|||
Total Public
|
|
5,906.5
|
|
|
39.8
|
|
|
5,477.4
|
|
|
40.1
|
|
|
429.1
|
|
|
7.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other
|
|
1,533.1
|
|
|
10.4
|
|
|
1,342.3
|
|
|
9.8
|
|
|
190.8
|
|
|
14.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Net sales
|
|
$
|
14,832.9
|
|
|
100.0
|
%
|
|
$
|
13,672.7
|
|
|
100.0
|
%
|
|
$
|
1,160.2
|
|
|
8.5
|
%
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
There were 254 selling days for each of the years ended December 31, 2017 and 2016.
|
|
|
Years Ended December 31,
|
|
|
|||||||||||||
|
|
2017(1)
|
|
2016(1)
|
|
|
|||||||||||
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Percent Change in Operating Income
|
|||||||
Segments: (2)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
|
$
|
487.9
|
|
|
7.9
|
%
|
|
$
|
453.5
|
|
|
7.9
|
%
|
|
7.6
|
%
|
Small Business
|
|
74.3
|
|
|
6.1
|
|
|
69.1
|
|
|
6.2
|
|
|
7.4
|
|
||
Public
|
|
374.4
|
|
|
6.3
|
|
|
367.7
|
|
|
6.7
|
|
|
1.8
|
|
||
Other(3)
|
|
57.1
|
|
|
3.7
|
|
|
44.6
|
|
|
3.3
|
|
|
28.2
|
|
||
Headquarters(4)
|
|
(127.2
|
)
|
|
nm*
|
|
|
(114.9
|
)
|
|
nm*
|
|
|
10.7
|
|
||
Total Operating income
|
|
$
|
866.5
|
|
|
5.8
|
%
|
|
$
|
820.0
|
|
|
6.0
|
%
|
|
5.7
|
%
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Segment operating income includes the segment's direct operating income, allocations for certain Headquarters costs, allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors.
|
(3)
|
Includes the financial results for our other operating segments, CDW UK and CDW Canada, which do not meet the reportable segment quantitative thresholds.
|
(4)
|
Includes Headquarters function costs that are not allocated to the segments.
|
(1)
|
We repaid all of the remaining aggregate principal amount outstanding. The loss recognized represents the difference between the aggregate principal amount and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs and premium.
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(3)
|
Includes other expenses such as payroll taxes on equity-based compensation and tax benefits due to state law changes for the year ended December 31, 2017 and 2016, integration expenses related to CDW UK, and the reinstatement of prior year unclaimed property balances as a result of a retroactive Illinois state law change enacted in the third quarter of 2017.
|
|
Years Ended December 31,
|
|
|
||||||||
(in millions)
|
2017(1)
|
|
Percentage of
Net Sales
|
|
2016(1)
|
|
Percentage of
Net Sales |
||||
Net income
|
$
|
523.1
|
|
|
3.5%
|
|
$
|
425.1
|
|
|
3.1%
|
Depreciation and amortization
|
260.9
|
|
|
|
|
254.5
|
|
|
|
||
Income tax expense
|
137.6
|
|
|
|
|
248.1
|
|
|
|
||
Interest expense, net
|
150.5
|
|
|
|
|
146.5
|
|
|
|
||
EBITDA
|
1,072.1
|
|
|
7.2%
|
|
1,074.2
|
|
|
7.9%
|
||
|
|
|
|
|
|
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||
Equity-based compensation
|
43.7
|
|
|
|
|
39.2
|
|
|
|
||
Net loss on extinguishments of long-term debt
|
57.4
|
|
|
|
|
2.1
|
|
|
|
||
Other adjustments(2)
|
12.8
|
|
|
|
|
2.6
|
|
|
|
||
Total adjustments
|
113.9
|
|
|
|
|
43.9
|
|
|
|
||
Adjusted EBITDA
|
$
|
1,186.0
|
|
|
8.0%
|
|
$
|
1,118.1
|
|
|
8.2%
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Primarily includes expenses related to payroll taxes on equity-based compensation, our share of net income from our equity investment, and historical retention costs during 2017. The year ended December 31, 2016 primarily includes our share of the settlement payments received from the Dynamic Random Access Memory class action lawsuits and the favorable resolution of a local sales tax matter, partially offset by expenses related to the consolidation of office locations north of Chicago. Also comprised of integration expenses related to CDW UK and the reinstatement of prior year unclaimed property balances as a result of a retroactive Illinois state law change enacted during 2017.
|
|
|
Years Ended December 31,
|
|
|
|
|
||||||||
(in millions)
|
|
2017(1)
|
|
2016(1)
|
|
% Change
|
|
Average Daily % Change (2)
|
||||||
Net sales, as reported
|
|
$
|
14,832.9
|
|
|
$
|
13,672.7
|
|
|
8.5
|
%
|
|
8.5
|
%
|
Foreign currency translation(3)
|
|
—
|
|
|
(28.1
|
)
|
|
|
|
|
||||
Consolidated Net sales, on a constant currency basis
|
|
$
|
14,832.9
|
|
|
$
|
13,644.6
|
|
|
8.7
|
%
|
|
8.7
|
%
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
There were 254 selling days for each of the years ended December 31, 2017 and 2016.
|
(3)
|
Represents the effect of translating the prior year results of CDW UK and CDW Canada at the average exchange rates applicable in the current year.
|
Dividend Amount
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
$0.210
|
|
February 7, 2018
|
|
February 26, 2018
|
|
March 12, 2018
|
$0.210
|
|
May 2, 2018
|
|
May 25, 2018
|
|
June 11, 2018
|
$0.210
|
|
August 2, 2018
|
|
August 24, 2018
|
|
September 10, 2018
|
$0.295
|
|
October 31, 2018
|
|
November 26, 2018
|
|
December 10, 2018
|
$0.925
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
905.9
|
|
|
$
|
777.7
|
|
|
$
|
604.0
|
|
Investing activities
|
(86.1
|
)
|
|
(81.1
|
)
|
|
(65.9
|
)
|
|||
|
|
|
|
|
|
||||||
Net change in accounts payable - inventory financing
|
(67.4
|
)
|
|
(84.0
|
)
|
|
143.6
|
|
|||
Other financing activities
|
(687.4
|
)
|
|
(734.7
|
)
|
|
(448.2
|
)
|
|||
Financing activities
|
(754.8
|
)
|
|
(818.7
|
)
|
|
(304.6
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
(3.4
|
)
|
|
2.6
|
|
|
(7.4
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
61.6
|
|
|
$
|
(119.5
|
)
|
|
$
|
226.1
|
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017(1)
|
|
Change
|
||||||
Net income
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
119.9
|
|
Adjustments for the impact of non-cash items(2)
|
261.1
|
|
|
194.4
|
|
|
66.7
|
|
|||
Net income adjusted for the impact of non-cash items(3)
|
904.1
|
|
|
717.5
|
|
|
186.6
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable(4)
|
(365.1
|
)
|
|
(136.8
|
)
|
|
(228.3
|
)
|
|||
Merchandise inventory(5)
|
(46.8
|
)
|
|
16.9
|
|
|
(63.7
|
)
|
|||
Accounts payable-trade(6)
|
271.2
|
|
|
231.5
|
|
|
39.7
|
|
|||
Other(7)
|
142.5
|
|
|
(51.4
|
)
|
|
193.9
|
|
|||
Net cash provided by operating activities
|
$
|
905.9
|
|
|
$
|
777.7
|
|
|
$
|
128.2
|
|
(1)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Includes items such as deferred income taxes, depreciation and amortization, equity-based compensation expense and Net loss on extinguishments of long-term debt.
|
(3)
|
The change is primarily due to stronger operating results driven by Net sales and Gross profit growth, partially offset by higher sales payroll.
|
(4)
|
The change in Accounts receivable is primarily due to increased sales volume in 2018 compared to 2017 and longer payment cycles for certain Public segment customers.
|
(5)
|
The change in Merchandise inventory is primarily due to growth in business and timing of shipments to customers in 2018, as well as lower inventory levels at the end of 2017.
|
(6)
|
The change in Accounts payable-trade is due to increased sales in 2018 and the timing of inventory purchases.
|
(7)
|
The change in Other is driven by improved collection performance of our receivables from vendors, higher accrued compensation expense in 2018 and the settlement of our Restricted Debt Unit Plan liability in 2017.
|
|
Years Ended December 31,
|
||||||||||
(in millions)
|
2017(1)
|
|
2016(1)
|
|
Change
|
||||||
Net income
|
$
|
523.1
|
|
|
$
|
425.1
|
|
|
$
|
98.0
|
|
Adjustments for the impact of non-cash items(2)
|
194.4
|
|
|
202.9
|
|
|
(8.5
|
)
|
|||
Net income adjusted for the impact of non-cash items(3)
|
717.5
|
|
|
628.0
|
|
|
89.5
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable(4)
|
(136.8
|
)
|
|
(178.9
|
)
|
|
42.1
|
|
|||
Merchandise inventory(5)
|
16.9
|
|
|
(68.0
|
)
|
|
84.9
|
|
|||
Accounts payable-trade
|
231.5
|
|
|
225.1
|
|
|
6.4
|
|
|||
Other(6)
|
(51.4
|
)
|
|
(2.2
|
)
|
|
(49.2
|
)
|
|||
Net cash provided by operating activities
|
$
|
777.7
|
|
|
$
|
604.0
|
|
|
$
|
173.7
|
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Includes items such as deferred income taxes, depreciation and amortization, equity-based compensation expense and Net loss on extinguishments of long-term debt.
|
(3)
|
The change is primarily due to stronger operating results driven by Net sales and Gross profit growth and excess tax benefits recognized related to equity-based compensation.
|
(4)
|
The change in Accounts receivable was primarily due to the timing of sales compared to the same period in 2016.
|
(5)
|
The change in Merchandise inventory was primarily due to higher inventory levels in 2016 as a result of the timing of inventory shipments to customers, increased returns and higher bill-and-hold orders.
|
(6)
|
The change in Other is driven by an increase in the receivables from vendors due to the growth in business and the settlement of our Restricted Debt Unit Plan liability, partially offset by an increase in accrued marketing expenses.
|
|
December 31,
|
|||||||
(in days)
|
2018
|
|
2017(1)
|
|
2016(1)
|
|||
Days of sales outstanding (DSO)(2)
|
56
|
|
|
53
|
|
|
52
|
|
Days of supply in inventory (DIO)(3)
|
13
|
|
|
13
|
|
|
13
|
|
Days of purchases outstanding (DPO)(4)
|
(50
|
)
|
|
(47
|
)
|
|
(46
|
)
|
Cash conversion cycle
|
19
|
|
|
19
|
|
|
19
|
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Represents the rolling three-month average of the balance of 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.
|
(3)
|
Represents the rolling three-month average of the balance of Merchandise inventory at the end of the period divided by average daily Cost of sales for the same three-month period.
|
(4)
|
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 sales for the same three-month period.
|
|
Payments Due by Period
|
||||||||||||||||||
(in millions)
|
Total
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
2024 & Thereafter
|
||||||||||
Term Loan(1)
|
$
|
1,738.6
|
|
|
$
|
77.7
|
|
|
$
|
153.7
|
|
|
$
|
1,507.2
|
|
|
$
|
—
|
|
CDW UK Term Loan(1)
|
68.8
|
|
|
8.2
|
|
|
60.6
|
|
|
—
|
|
|
—
|
|
|||||
Senior Notes due 2023(2)
|
656.3
|
|
|
26.3
|
|
|
52.5
|
|
|
577.5
|
|
|
—
|
|
|||||
Senior Notes due 2024(2)
|
764.8
|
|
|
31.6
|
|
|
63.3
|
|
|
63.3
|
|
|
606.6
|
|
|||||
Senior Notes due 2025(2)
|
810.0
|
|
|
30.0
|
|
|
60.0
|
|
|
60.0
|
|
|
660.0
|
|
|||||
Operating leases(3)
|
264.7
|
|
|
29.7
|
|
|
49.7
|
|
|
36.7
|
|
|
148.6
|
|
|||||
Mandatory repatriation tax(4)
|
10.7
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
9.7
|
|
|||||
Total
|
$
|
4,313.9
|
|
|
$
|
203.5
|
|
|
$
|
439.8
|
|
|
$
|
2,245.7
|
|
|
$
|
1,424.9
|
|
(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, 2018. 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. Capital leases included in property and equipment are not material.
|
(4)
|
Represents future cash tax payments for the one-time mandatory repatriation tax on the earnings of international operations previously deferred for US tax purposes, as required by the Tax Cuts and Jobs Act.
|
|
Page
|
/s/ Ernst & Young LLP
|
We have served as the Company's auditor since 2011.
|
Chicago, Illinois
|
February 27, 2019
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except per-share amounts)
|
|||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
(as adjusted)
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
205.8
|
|
|
$
|
144.2
|
|
Accounts receivable, net of allowance for doubtful accounts of $7.0 and $6.2, respectively
|
2,671.2
|
|
|
2,329.3
|
|
||
Merchandise inventory
|
454.3
|
|
|
411.5
|
|
||
Miscellaneous receivables
|
316.4
|
|
|
343.0
|
|
||
Prepaid expenses and other
|
149.1
|
|
|
168.3
|
|
||
Total current assets
|
3,796.8
|
|
|
3,396.3
|
|
||
Property and equipment, net
|
156.1
|
|
|
161.1
|
|
||
Goodwill
|
2,462.8
|
|
|
2,479.6
|
|
||
Other intangible assets, net
|
712.2
|
|
|
897.0
|
|
||
Other assets
|
39.8
|
|
|
32.7
|
|
||
Total Assets
|
$
|
7,167.7
|
|
|
$
|
6,966.7
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable-trade
|
$
|
1,577.1
|
|
|
$
|
1,317.7
|
|
Accounts payable-inventory financing
|
429.3
|
|
|
498.0
|
|
||
Current maturities of long-term debt
|
25.3
|
|
|
25.5
|
|
||
Contract liabilities
|
178.3
|
|
|
158.8
|
|
||
Accrued expenses and other current liabilities:
|
|
|
|
||||
Compensation
|
186.4
|
|
|
129.5
|
|
||
Advertising
|
119.2
|
|
|
89.2
|
|
||
Sales and income taxes
|
55.5
|
|
|
60.0
|
|
||
Other
|
232.0
|
|
|
243.4
|
|
||
Total current liabilities
|
2,803.1
|
|
|
2,522.1
|
|
||
Long-term liabilities:
|
|
|
|
||||
Debt
|
3,183.3
|
|
|
3,210.0
|
|
||
Deferred income taxes
|
141.9
|
|
|
196.3
|
|
||
Other liabilities
|
64.2
|
|
|
52.7
|
|
||
Total long-term liabilities
|
3,389.4
|
|
|
3,459.0
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 100.0 shares authorized; no shares issued or outstanding for both periods
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 1,000.0 shares authorized; 147.7 and 153.1 shares issued, respectively
|
1.5
|
|
|
1.5
|
|
||
Less: treasury stock, $0.01 par value, 0.0 and 0.1 shares held, respectively
|
—
|
|
|
—
|
|
||
Outstanding common stock, $0.01 par value, 147.7 and 153.0 shares outstanding, respectively
|
1.5
|
|
|
1.5
|
|
||
Paid-in capital
|
2,996.9
|
|
|
2,911.6
|
|
||
Accumulated deficit
|
(1,892.6
|
)
|
|
(1,831.6
|
)
|
||
Accumulated other comprehensive loss
|
(130.6
|
)
|
|
(95.9
|
)
|
||
Total stockholders' equity
|
975.2
|
|
|
985.6
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
7,167.7
|
|
|
$
|
6,966.7
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per-share amounts)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(as adjusted)
|
|
(as adjusted)
|
||||||
Net sales
|
$
|
16,240.5
|
|
|
$
|
14,832.9
|
|
|
$
|
13,672.7
|
|
Cost of sales
|
13,533.6
|
|
|
12,382.7
|
|
|
11,344.4
|
|
|||
Gross profit
|
2,706.9
|
|
|
2,450.2
|
|
|
2,328.3
|
|
|||
Selling and administrative expenses
|
1,537.1
|
|
|
1,410.0
|
|
|
1,345.4
|
|
|||
Advertising expense
|
182.5
|
|
|
173.7
|
|
|
162.9
|
|
|||
Operating income
|
987.3
|
|
|
866.5
|
|
|
820.0
|
|
|||
Interest expense, net
|
(148.6
|
)
|
|
(150.5
|
)
|
|
(146.5
|
)
|
|||
Net loss on extinguishments of long-term debt
|
—
|
|
|
(57.4
|
)
|
|
(2.1
|
)
|
|||
Other income, net
|
1.8
|
|
|
2.1
|
|
|
1.8
|
|
|||
Income before income taxes
|
840.5
|
|
|
660.7
|
|
|
673.2
|
|
|||
Income tax expense
|
(197.5
|
)
|
|
(137.6
|
)
|
|
(248.1
|
)
|
|||
Net income
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
425.1
|
|
|
|
|
|
|
|
||||||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.26
|
|
|
$
|
3.37
|
|
|
$
|
2.60
|
|
Diluted
|
$
|
4.19
|
|
|
$
|
3.31
|
|
|
$
|
2.56
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
150.9
|
|
|
155.4
|
|
|
163.6
|
|
|||
Diluted
|
153.6
|
|
|
158.2
|
|
|
166.0
|
|
|||
|
|
|
|
|
|
||||||
Cash dividends declared per common share
|
$
|
0.9250
|
|
|
$
|
0.6900
|
|
|
$
|
0.4825
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
|
||||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
(as adjusted)
|
|
(as adjusted)
|
||||||
Net income
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
425.1
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||||
Unrealized loss from hedge accounting, net of tax
|
|
(5.9
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Reclassification of hedge accounting gain to net income, net of tax
|
|
3.9
|
|
|
0.3
|
|
|
—
|
|
|||
Foreign currency translation, net of tax
|
|
(32.7
|
)
|
|
43.7
|
|
|
(78.7
|
)
|
|||
Other comprehensive (loss) income:
|
|
(34.7
|
)
|
|
43.9
|
|
|
(78.7
|
)
|
|||
Comprehensive income
|
|
$
|
608.3
|
|
|
$
|
567.0
|
|
|
$
|
346.4
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in millions)
|
|||||||||||||||||||||||||||||||||||||
|
|
Preferred Stock
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive Loss
|
|
Total
Stockholders' Equity |
|||||||||||||||||
Balance as of
December 31, 2015 (as reported) |
|
—
|
|
|
$
|
—
|
|
|
168.2
|
|
|
$
|
1.7
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
2,806.9
|
|
|
$
|
(1,651.6
|
)
|
|
$
|
(61.1
|
)
|
|
$
|
1,095.9
|
|
Adjustment
upon adoption of ASC 606
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|||||||
Balance as of
December 31, 2015 (as adjusted) |
|
—
|
|
|
—
|
|
|
168.2
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
2,806.9
|
|
|
(1,649.7
|
)
|
|
(61.1
|
)
|
|
1,097.8
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
425.1
|
|
|
—
|
|
|
425.1
|
|
|||||||
Common stock issued for equity-based compensation
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Equity-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33.2
|
|
|
—
|
|
|
—
|
|
|
33.2
|
|
|||||||
Stock option exercises
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|||||||
Coworker Stock Purchase Plan
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.3
|
|
|
—
|
|
|
—
|
|
|
9.3
|
|
|||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
(8.7
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(367.4
|
)
|
|
—
|
|
|
(367.5
|
)
|
|||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
(79.2
|
)
|
|
—
|
|
|
(78.7
|
)
|
|||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78.7
|
)
|
|
(78.7
|
)
|
|||||||
Balance as of
December 31, 2016 (as adjusted)
|
|
—
|
|
|
$
|
—
|
|
|
160.3
|
|
|
$
|
1.6
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
2,857.3
|
|
|
$
|
(1,671.2
|
)
|
|
$
|
(139.8
|
)
|
|
$
|
1,047.9
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
523.1
|
|
|
—
|
|
|
523.1
|
|
|||||||
Equity-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37.9
|
|
|
—
|
|
|
—
|
|
|
37.9
|
|
|||||||
Stock option exercises
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
13.0
|
|
|||||||
Coworker Stock Purchase Plan
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.3
|
|
|
—
|
|
|
—
|
|
|
10.3
|
|
|||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
(8.9
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(533.9
|
)
|
|
—
|
|
|
(534.0
|
)
|
|||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
(107.6
|
)
|
|
—
|
|
|
(106.9
|
)
|
|||||||
Incentive compensation plan stock withheld for taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
(7.6
|
)
|
|
(42.0
|
)
|
|
—
|
|
|
(49.6
|
)
|
|||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43.7
|
|
|
43.7
|
|
|||||||
Unrealized gain from hedge accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||||||
Balance as of
December 31, 2017 (as adjusted)
|
|
—
|
|
|
$
|
—
|
|
|
153.1
|
|
|
$
|
1.5
|
|
|
0.1
|
|
|
$
|
—
|
|
|
$
|
2,911.6
|
|
|
$
|
(1,831.6
|
)
|
|
$
|
(95.9
|
)
|
|
$
|
985.6
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
643.0
|
|
|
—
|
|
|
643.0
|
|
|||||||
Equity-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36.5
|
|
|
—
|
|
|
—
|
|
|
36.5
|
|
|||||||
Stock option exercises
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.6
|
|
|
—
|
|
|
—
|
|
|
28.6
|
|
|||||||
Coworker Stock Purchase Plan
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
(6.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(522.3
|
)
|
|
—
|
|
|
(522.3
|
)
|
|||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
(140.2
|
)
|
|
—
|
|
|
(139.4
|
)
|
|||||||
Incentive compensation plan stock withheld for taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
7.6
|
|
|
(41.5
|
)
|
|
—
|
|
|
(33.9
|
)
|
|||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.7
|
)
|
|
(32.7
|
)
|
|||||||
Unrealized loss from hedge accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|||||||
Balance as of
December 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
147.7
|
|
|
$
|
1.5
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
2,996.9
|
|
|
$
|
(1,892.6
|
)
|
|
$
|
(130.6
|
)
|
|
$
|
975.2
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
(as adjusted)
|
|
(as adjusted)
|
||||||
Net income
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
425.1
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
265.6
|
|
|
260.9
|
|
|
254.5
|
|
|||
Equity-based compensation expense
|
40.7
|
|
|
43.7
|
|
|
39.2
|
|
|||
Deferred income taxes
|
(56.1
|
)
|
|
(172.7
|
)
|
|
(97.2
|
)
|
|||
Net loss on extinguishments of long-term debt
|
—
|
|
|
57.4
|
|
|
2.1
|
|
|||
Other
|
10.9
|
|
|
5.0
|
|
|
4.3
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(365.1
|
)
|
|
(136.8
|
)
|
|
(178.9
|
)
|
|||
Merchandise inventory
|
(46.8
|
)
|
|
16.9
|
|
|
(68.0
|
)
|
|||
Other assets
|
25.2
|
|
|
(117.8
|
)
|
|
(51.8
|
)
|
|||
Accounts payable-trade
|
271.2
|
|
|
231.5
|
|
|
225.1
|
|
|||
Other liabilities
|
117.3
|
|
|
66.5
|
|
|
49.6
|
|
|||
Net cash provided by operating activities
|
905.9
|
|
|
777.7
|
|
|
604.0
|
|
|||
Cash flows used in investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(86.1
|
)
|
|
(81.1
|
)
|
|
(63.5
|
)
|
|||
Premium payments on interest rate cap agreements
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|||
Net cash used in investing activities
|
(86.1
|
)
|
|
(81.1
|
)
|
|
(65.9
|
)
|
|||
Cash flows used in financing activities:
|
|
|
|
|
|
||||||
Proceeds from borrowings under revolving credit facility
|
686.7
|
|
|
1,560.7
|
|
|
338.8
|
|
|||
Repayments of borrowings under revolving credit facility
|
(686.7
|
)
|
|
(1,560.7
|
)
|
|
(338.8
|
)
|
|||
Repayments of long-term debt
|
(21.6
|
)
|
|
(14.9
|
)
|
|
(20.6
|
)
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,083.0
|
|
|
1,483.0
|
|
|||
Payments to extinguish long-term debt
|
—
|
|
|
(2,121.3
|
)
|
|
(1,490.4
|
)
|
|||
Net change in accounts payable-inventory financing
|
(67.4
|
)
|
|
(84.0
|
)
|
|
143.6
|
|
|||
Repurchases of common stock
|
(522.3
|
)
|
|
(534.0
|
)
|
|
(367.4
|
)
|
|||
Payment of incentive compensation plan withholding taxes
|
(33.9
|
)
|
|
(49.6
|
)
|
|
—
|
|
|||
Dividends
|
(139.4
|
)
|
|
(106.9
|
)
|
|
(78.7
|
)
|
|||
Other
|
29.8
|
|
|
9.0
|
|
|
25.9
|
|
|||
Net cash used in financing activities
|
(754.8
|
)
|
|
(818.7
|
)
|
|
(304.6
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(3.4
|
)
|
|
2.6
|
|
|
(7.4
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
61.6
|
|
|
(119.5
|
)
|
|
226.1
|
|
|||
Cash and cash equivalents – beginning of period
|
144.2
|
|
|
263.7
|
|
|
37.6
|
|
|||
Cash and cash equivalents – end of period
|
$
|
205.8
|
|
|
$
|
144.2
|
|
|
$
|
263.7
|
|
Supplementary disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
(148.8
|
)
|
|
$
|
(148.5
|
)
|
|
$
|
(144.3
|
)
|
Taxes paid, net
|
$
|
(261.2
|
)
|
|
$
|
(275.7
|
)
|
|
$
|
(329.2
|
)
|
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
|
5 to 25 years
|
Computer and data processing equipment
|
3 to 5 years
|
Computer software
|
3 to 5 years
|
Furniture and fixtures
|
5 to 10 years
|
Classification
|
Estimated
Useful Lives |
Customer relationships and contracts
|
3 to 14 years
|
Trade name
|
generally 20 years
|
Internally developed software
|
3 to 5 years
|
Other
|
1 to 10 years
|
2.
|
Recent Accounting Pronouncements
|
|
|
December 31, 2017(1)
|
|
December 31, 2016(1)
|
||||||||||||||||||||
(in millions)
(except per share amounts)
|
|
As Reported
|
|
New Revenue Standard Adjustment
|
|
As Adjusted
|
|
As Reported
|
|
New Revenue Standard Adjustment
|
|
As Adjusted
|
||||||||||||
Net sales
|
|
$
|
15,191.5
|
|
|
$
|
(358.6
|
)
|
|
$
|
14,832.9
|
|
|
$
|
13,981.9
|
|
|
$
|
(309.2
|
)
|
|
$
|
13,672.7
|
|
Gross profit
|
|
2,449.9
|
|
|
0.3
|
|
|
$
|
2,450.2
|
|
|
2,327.2
|
|
|
1.1
|
|
|
$
|
2,328.3
|
|
||||
Gross margin
|
|
16.1
|
%
|
|
40 bps
|
|
|
16.5
|
%
|
|
16.6
|
%
|
|
40 bps
|
|
|
17.0
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from operations
|
|
866.1
|
|
|
0.4
|
|
|
866.5
|
|
|
819.2
|
|
|
0.8
|
|
|
820.0
|
|
||||||
Income tax expense
|
|
(137.3
|
)
|
|
(0.3
|
)
|
|
(137.6
|
)
|
|
(248.0
|
)
|
|
(0.1
|
)
|
|
(248.1
|
)
|
||||||
Net income
|
|
$
|
523.0
|
|
|
$
|
0.1
|
|
|
$
|
523.1
|
|
|
$
|
424.4
|
|
|
$
|
0.7
|
|
|
$
|
425.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
3.37
|
|
|
$
|
—
|
|
|
$
|
3.37
|
|
|
$
|
2.59
|
|
|
$
|
0.01
|
|
|
$
|
2.60
|
|
Diluted
|
|
$
|
3.31
|
|
|
$
|
—
|
|
|
$
|
3.31
|
|
|
$
|
2.56
|
|
|
$
|
—
|
|
|
$
|
2.56
|
|
(1)
|
Amounts may not foot or cross-foot due to rounding.
|
|
|
December 31, 2017(1)
|
|
December 31, 2016(1)
|
||||||||||||||||||||
(in millions)
|
|
As Reported
|
|
New Revenue Standard Adjustment
|
|
As Adjusted
|
|
As Reported
|
|
New Revenue Standard Adjustment
|
|
As Adjusted
|
||||||||||||
Accounts receivable
|
|
$
|
2,320.5
|
|
|
$
|
8.8
|
|
|
$
|
2,329.3
|
|
|
$
|
2,168.6
|
|
|
$
|
0.3
|
|
|
$
|
2,168.9
|
|
Merchandise inventory
|
|
449.5
|
|
|
(38.0
|
)
|
|
411.5
|
|
|
452.0
|
|
|
(28.1
|
)
|
|
423.9
|
|
||||||
Miscellaneous receivables
|
|
336.5
|
|
|
6.5
|
|
|
343.0
|
|
|
234.9
|
|
|
2.6
|
|
|
237.5
|
|
||||||
Prepaid expenses and other
|
|
127.4
|
|
|
40.9
|
|
|
168.3
|
|
|
118.9
|
|
|
35.3
|
|
|
154.2
|
|
||||||
Total current assets
|
|
3,378.1
|
|
|
18.2
|
|
|
3,396.3
|
|
|
3,238.1
|
|
|
10.1
|
|
|
3,248.2
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other assets
|
|
40.8
|
|
|
(8.1
|
)
|
|
32.7
|
|
|
36.0
|
|
|
(0.1
|
)
|
|
35.9
|
|
||||||
Total assets
|
|
6,956.6
|
|
|
10.1
|
|
|
6,966.7
|
|
|
6,948.4
|
|
|
10.0
|
|
|
6,958.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred revenue
|
|
194.0
|
|
|
(35.2
|
)
|
|
158.8
|
|
|
172.6
|
|
|
(29.1
|
)
|
|
143.5
|
|
||||||
Other accrued expenses
|
|
180.2
|
|
|
41.6
|
|
|
221.8
|
|
|
147.2
|
|
|
36.0
|
|
|
183.2
|
|
||||||
Income tax payable
|
|
15.1
|
|
|
1.1
|
|
|
16.2
|
|
|
2.6
|
|
|
0.7
|
|
|
3.3
|
|
||||||
Total current liabilities
|
|
2,514.6
|
|
|
7.5
|
|
|
2,522.1
|
|
|
2,280.7
|
|
|
7.6
|
|
|
2,288.3
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total liabilities
|
|
5,973.7
|
|
|
7.5
|
|
|
5,981.1
|
|
|
5,902.9
|
|
|
7.6
|
|
|
5,910.5
|
|
||||||
Total stockholders' equity
|
|
$
|
982.9
|
|
|
$
|
2.7
|
|
|
$
|
985.6
|
|
|
$
|
1,045.5
|
|
|
$
|
2.4
|
|
|
$
|
1,047.9
|
|
(1)
|
Amounts may not foot or cross-foot due to rounding.
|
|
|
December 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Building and leasehold improvements
|
|
$
|
129.1
|
|
|
$
|
123.0
|
|
Computer and data processing equipment
|
|
105.4
|
|
|
116.4
|
|
||
Machinery and equipment
|
|
44.1
|
|
|
45.6
|
|
||
Land
|
|
27.7
|
|
|
27.7
|
|
||
Construction in progress
|
|
24.5
|
|
|
17.9
|
|
||
Computer software
|
|
22.2
|
|
|
9.6
|
|
||
Furniture and fixtures
|
|
18.9
|
|
|
22.7
|
|
||
Property and equipment, gross
|
|
371.9
|
|
|
362.9
|
|
||
Less: accumulated depreciation
|
|
(215.8
|
)
|
|
(201.8
|
)
|
||
Property and equipment, net
|
|
$
|
156.1
|
|
|
$
|
161.1
|
|
(in millions)
|
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other(1)
|
|
Consolidated
|
||||||||||
Balance at December 31, 2016(2)
|
|
1,074.1
|
|
|
185.9
|
|
|
929.6
|
|
|
265.4
|
|
|
2,455.0
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.6
|
|
|
24.6
|
|
|||||
Balances as of December 31, 2017(2)
|
|
1,074.1
|
|
|
185.9
|
|
|
929.6
|
|
|
290.0
|
|
|
2,479.6
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.8
|
)
|
|
(16.8
|
)
|
|||||
Balances as of December 31, 2018(2)
|
|
$
|
1,074.1
|
|
|
$
|
185.9
|
|
|
$
|
929.6
|
|
|
$
|
273.2
|
|
|
$
|
2,462.8
|
|
(1)
|
Other is comprised of CDW UK and Canada reporting units.
|
(2)
|
Goodwill is net of accumulated impairment losses of $1,571 million, $354 million and $28 million related to the Corporate, Public and Other segments, respectively.
|
(in millions)
|
|
|
||
Years ending December 31,
|
|
Estimated Future Amortization Expense
|
||
2019
|
|
$
|
215.9
|
|
2020
|
|
182.2
|
|
|
2021
|
|
85.1
|
|
|
2022
|
|
37.4
|
|
|
2023
|
|
37.4
|
|
|
Thereafter
|
|
154.2
|
|
|
Total future amortization expense
|
|
$
|
712.2
|
|
|
|
December 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Revolving Loan inventory financing agreement(1)
|
|
$
|
406.3
|
|
|
$
|
480.9
|
|
Other inventory financing agreements
|
|
23.0
|
|
|
17.1
|
|
||
Accounts payable-inventory financing
|
|
$
|
429.3
|
|
|
$
|
498.0
|
|
(1)
|
The Senior Secured Asset-Based Revolving Credit Facility includes an inventory floorplan sub-facility that enables the Company to maintain an inventory financing agreement with a financial intermediary to facilitate the purchase of inventory from certain vendors on more favorable terms than offered directly by the vendors.
|
(in millions)
|
|
Within 1 Year
|
|
Years 1-2
|
|
Years 2-3
|
|
Thereafter
|
||||||||
Remaining performance obligations
|
|
$
|
37.8
|
|
|
$
|
23.7
|
|
|
$
|
5.4
|
|
|
$
|
0.4
|
|
(in millions)
|
|
|
||
Years ending December 31,
|
|
Future Minimum Lease Payments
|
||
2019
|
|
$
|
29.7
|
|
2020
|
|
27.0
|
|
|
2021
|
|
22.7
|
|
|
2022
|
|
19.5
|
|
|
2023
|
|
17.2
|
|
|
Thereafter
|
|
148.6
|
|
|
Total future minimum lease payments
|
|
$
|
264.7
|
|
|
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||
Notional Value (in millions)
|
|
Effective Date
|
|
Maturity Date
|
|
Fair Value (in millions)
|
|
Fair Value (in millions)
|
||||||
$
|
1,400.0
|
|
|
January 17, 2017
|
|
December 31, 2018
|
|
$
|
—
|
|
|
$
|
5.4
|
|
1,400.0
|
|
|
December 31, 2018
|
|
December 31, 2020
|
|
10.6
|
|
|
—
|
|
|||
200.0
|
|
|
December 31, 2020
|
|
December 31, 2022
|
|
1.5
|
|
|
—
|
|
|||
|
|
|
|
|
|
$
|
12.1
|
|
|
$
|
5.4
|
|
|
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||
(dollars in millions)
|
|
Maturities
|
|
Interest Rate
|
|
Amount
|
|
Interest Rate
|
|
Amount
|
||||||
Credit Facilities
|
|
|
|
|
|
|
|
|
|
|
||||||
CDW UK revolving credit facility(1)
|
|
July 2021
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
Senior secured asset-based revolving credit facility
|
|
March 2022
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
||
Total credit facilities
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Term Loans
|
|
|
|
|
|
|
|
|
|
|
||||||
CDW UK term loan(1)
|
|
August 2021
|
|
2.3
|
%
|
|
65.0
|
|
|
1.9
|
%
|
|
75.7
|
|
||
Senior secured term loan facility
|
|
August 2023
|
|
4.1
|
%
|
|
1,453.2
|
|
|
3.7
|
%
|
|
1,468.0
|
|
||
Total term loans
|
|
|
|
|
|
1,518.2
|
|
|
|
|
1,543.7
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Unsecured Senior Notes
|
|
|
|
|
|
|
|
|
|
|
||||||
Senior notes due 2023
|
|
September 2023
|
|
5.0
|
%
|
|
525.0
|
|
|
5.0
|
%
|
|
525.0
|
|
||
Senior notes due 2024
|
|
December 2024
|
|
5.5
|
%
|
|
575.0
|
|
|
5.5
|
%
|
|
575.0
|
|
||
Senior notes due 2025
|
|
September 2025
|
|
5.0
|
%
|
|
600.0
|
|
|
5.0
|
%
|
|
600.0
|
|
||
Total unsecured senior notes
|
|
|
|
|
|
1,700.0
|
|
|
|
|
1,700.0
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Other long-term obligations
|
|
|
|
|
|
8.3
|
|
|
|
|
12.2
|
|
||||
Unamortized deferred financing fees
|
|
|
|
|
|
(17.9
|
)
|
|
|
|
(20.4
|
)
|
||||
Current maturities of long-term debt
|
|
|
|
|
|
(25.3
|
)
|
|
|
|
(25.5
|
)
|
||||
Total long-term debt
|
|
|
|
|
|
$
|
3,183.3
|
|
|
|
|
$
|
3,210.0
|
|
(1)
|
British pound-denominated debt facilities.
|
(in millions)
|
|
|
||
Years ending December 31,
|
|
Total
|
||
2019
|
|
$
|
25.3
|
|
2020
|
|
25.5
|
|
|
2021
|
|
67.2
|
|
|
2022
|
|
14.9
|
|
|
2023
|
|
1,918.6
|
|
|
Thereafter
|
|
1,175.0
|
|
|
|
|
$
|
3,226.5
|
|
|
|
December 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Fair value
|
|
$
|
3,145.8
|
|
|
$
|
3,366.5
|
|
Carrying value
|
|
3,226.5
|
|
|
3,255.9
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
(as adjusted)
|
|
(as adjusted)
|
||||||
Domestic
|
|
$
|
762.3
|
|
|
$
|
608.3
|
|
|
$
|
635.5
|
|
Foreign
|
|
78.2
|
|
|
52.4
|
|
|
37.7
|
|
|||
Total
|
|
$
|
840.5
|
|
|
$
|
660.7
|
|
|
$
|
673.2
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
(as adjusted)
|
|
(as adjusted)
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
192.6
|
|
|
$
|
258.9
|
|
|
$
|
295.6
|
|
State
|
|
43.3
|
|
|
29.8
|
|
|
34.9
|
|
|||
Foreign
|
|
17.7
|
|
|
21.3
|
|
|
16.8
|
|
|||
Total current
|
|
253.6
|
|
|
310.0
|
|
|
347.3
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Domestic
|
|
(52.7
|
)
|
|
(167.6
|
)
|
|
(90.5
|
)
|
|||
Foreign
|
|
(3.4
|
)
|
|
(4.8
|
)
|
|
(8.7
|
)
|
|||
Total deferred
|
|
(56.1
|
)
|
|
(172.4
|
)
|
|
(99.2
|
)
|
|||
Income tax expense
|
|
$
|
197.5
|
|
|
$
|
137.6
|
|
|
$
|
248.1
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
(dollars in millions)
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
|
|
|
|
|
(as adjusted)
|
|
(as adjusted)
|
|||||||||||||
Statutory federal income tax rate
|
|
$
|
176.5
|
|
|
21.0
|
%
|
|
$
|
231.1
|
|
|
35.0
|
%
|
|
$
|
235.5
|
|
|
35.0
|
%
|
State taxes, net of federal effect
|
|
31.1
|
|
|
3.7
|
|
|
18.3
|
|
|
2.8
|
|
|
17.7
|
|
|
2.6
|
|
|||
Excess tax benefit of equity awards
|
|
(19.7
|
)
|
|
(2.3
|
)
|
|
(36.2
|
)
|
|
(5.5
|
)
|
|
(1.6
|
)
|
|
(0.2
|
)
|
|||
Effect of rates different than statutory
|
|
0.6
|
|
|
0.1
|
|
|
(6.3
|
)
|
|
(1.0
|
)
|
|
(4.6
|
)
|
|
(0.7
|
)
|
|||
Tax on foreign earnings
|
|
2.8
|
|
|
0.3
|
|
|
1.0
|
|
|
0.1
|
|
|
0.8
|
|
|
0.1
|
|
|||
Effect of UK tax rate change on deferred taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
(0.2
|
)
|
|||
Effect of US Tax Cuts and Jobs Act on deferred taxes and repatriation tax
|
|
(1.9
|
)
|
|
(0.2
|
)
|
|
(75.5
|
)
|
|
(11.4
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
|
8.1
|
|
|
0.9
|
|
|
5.2
|
|
|
0.8
|
|
|
1.8
|
|
|
0.3
|
|
|||
Effective tax rate
|
|
$
|
197.5
|
|
|
23.5
|
%
|
|
$
|
137.6
|
|
|
20.8
|
%
|
|
$
|
248.1
|
|
|
36.9
|
%
|
|
|
December 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Equity compensation plans
|
|
$
|
17.7
|
|
|
$
|
18.7
|
|
Payroll and benefits
|
|
9.3
|
|
|
8.0
|
|
||
Deferred interest
|
|
—
|
|
|
6.8
|
|
||
Net operating loss and credit carryforwards, net
|
|
23.8
|
|
|
28.1
|
|
||
Rent
|
|
7.5
|
|
|
7.4
|
|
||
Accounts receivable
|
|
6.5
|
|
|
5.4
|
|
||
Other
|
|
10.0
|
|
|
9.5
|
|
||
Total deferred tax assets
|
|
74.8
|
|
|
83.9
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Software and intangibles
|
|
148.6
|
|
|
194.5
|
|
||
Deferred income
|
|
—
|
|
|
18.6
|
|
||
International investments
|
|
19.2
|
|
|
19.2
|
|
||
Property and equipment
|
|
20.0
|
|
|
20.4
|
|
||
Other
|
|
11.7
|
|
|
12.0
|
|
||
Total deferred tax liabilities
|
|
199.5
|
|
|
264.7
|
|
||
Deferred tax asset valuation allowance
|
|
17.2
|
|
|
15.5
|
|
||
Net deferred tax liabilities
|
|
$
|
141.9
|
|
|
$
|
196.3
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance as of January 1, 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions for tax positions related to current year
|
|
15.1
|
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2018
|
|
$
|
15.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Equity-based compensation expense
|
|
$
|
40.7
|
|
|
$
|
43.7
|
|
|
$
|
39.2
|
|
Income tax benefit(1)
|
|
(9.9
|
)
|
|
(15.3
|
)
|
|
(13.3
|
)
|
|||
Equity-based compensation expense (net of tax)
|
|
$
|
30.8
|
|
|
$
|
28.4
|
|
|
$
|
25.9
|
|
(1)
|
Represents equity-based compensation tax expense at the statutory tax rates. Excess tax benefits associated with equity awards are excluded from this disclosure and separately disclosed in Note 10 (Income Taxes).
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Grant date fair value
|
|
$
|
14.80
|
|
|
$
|
12.27
|
|
|
$
|
8.55
|
|
Volatility (1)
|
|
20.00
|
%
|
|
22.00
|
%
|
|
25.00
|
%
|
|||
Risk-free rate (2)
|
|
2.75
|
%
|
|
2.08
|
%
|
|
1.47
|
%
|
|||
Expected dividend yield
|
|
1.14
|
%
|
|
1.09
|
%
|
|
1.08
|
%
|
|||
Expected term (in years) (3)
|
|
6.0
|
|
|
6.0
|
|
|
6.0
|
|
(1)
|
Based upon an assessment of the two-year and five-year historical and implied volatility for the Company's selected peer group, adjusted for the Company's leverage.
|
(2)
|
Based on a composite US 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, 2018
|
|
4,457,996
|
|
|
$
|
37.41
|
|
|
|
|
|
||
Granted
|
|
1,021,398
|
|
|
73.85
|
|
|
|
|
|
|||
Forfeited/Expired
|
|
(63,372
|
)
|
|
59.85
|
|
|
|
|
|
|||
Exercised(1)
|
|
(935,250
|
)
|
|
30.59
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
|
4,480,772
|
|
|
$
|
46.82
|
|
|
7.04
|
|
$
|
153.5
|
|
|
|
|
|
|
|
|
|
|
|||||
Vested and exercisable at December 31, 2018
|
|
2,423,693
|
|
|
$
|
32.67
|
|
|
5.79
|
|
$
|
117.3
|
|
Expected to vest after December 31, 2018
|
|
2,031,401
|
|
|
$
|
63.43
|
|
|
8.52
|
|
$
|
35.9
|
|
(1)
|
The total intrinsic value of stock options exercised during the years ended December 31, 2018, 2017 and 2016 was $47 million, $17 million and $7 million, respectively.
|
|
|
Number of Units
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Nonvested at January 1, 2018
|
|
131,069
|
|
|
$
|
40.11
|
|
Granted (1)
|
|
177,525
|
|
|
73.95
|
|
|
Vested (2)
|
|
(26,886
|
)
|
|
60.18
|
|
|
Forfeited
|
|
(21,535
|
)
|
|
60.25
|
|
|
Nonvested at December 31, 2018
|
|
260,173
|
|
|
$
|
59.56
|
|
(1)
|
The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2018, 2017 and 2016 was $73.95, $58.90 and $39.82, respectively.
|
(2)
|
The aggregate fair value of RSUs that vested during the years ended December 31, 2018, 2017 and 2016 was $2 million, $18 million and $1 million, respectively.
|
|
|
Number of Units
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Nonvested at January 1, 2018
|
|
418,973
|
|
|
$
|
50.75
|
|
Granted (1)
|
|
204,890
|
|
|
73.74
|
|
|
Attainment Adjustment (2)
|
|
154,234
|
|
|
37.84
|
|
|
Vested (3)
|
|
(334,255
|
)
|
|
39.92
|
|
|
Forfeited
|
|
(22,005
|
)
|
|
59.87
|
|
|
Nonvested at December 31, 2018
|
|
421,837
|
|
|
$
|
65.85
|
|
(1)
|
The weighted-average grant date fair value of PSUs granted during the years ended December 31, 2018, 2017 and 2016 was $73.74, $59.00 and $39.91, respectively.
|
(2)
|
During the year ended December 31, 2018, the attainment on PSUs vested at December 31, 2017 was adjusted to reflect actual performance. The weighted-average grant date fair value of PSUs included in the attainment adjustment is $37.84.
|
(3)
|
The aggregate fair value of PSUs that vested during the years ended December 31, 2018, 2017 and 2016 was $13 million, $20 million and $9 million, respectively.
|
|
|
Number of Units
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Nonvested at January 1, 2018
|
|
122,467
|
|
|
$
|
40.08
|
|
Granted (1)
|
|
1,279
|
|
|
—
|
|
|
Attainment Adjustment (2)
|
|
111,565
|
|
|
37.79
|
|
|
Vested (3)
|
|
(227,298
|
)
|
|
40.12
|
|
|
Forfeited
|
|
(8,013
|
)
|
|
39.79
|
|
|
Nonvested at December 31, 2018
|
|
—
|
|
|
$
|
—
|
|
(1)
|
The weighted-average grant date fair value of PSAs granted during the year ended December 31, 2018 and 2017 was zero as the units granted consisted of only dividends on previously granted units. The weighted-average grant date fair value of PSAs granted during the year ended December 31, 2016 was $40.06.
|
(2)
|
During the year ended December 31, 2018, the attainment on PSAs vested at December 31, 2017 was adjusted to reflect actual performance. The weighted-average grant date fair value of PSAs included in the attainment adjustment is $37.79.
|
(3)
|
The aggregate fair value of PSAs that vested during the years ended December 31, 2018 and 2017 was $9 million and $5 million, respectively. No PSAs vested during the year ended December 31, 2016.
|
|
|
Year Ended December 31,
|
|||||||
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
|||
Basic weighted-average shares outstanding
|
|
150.9
|
|
|
155.4
|
|
|
163.6
|
|
Effect of dilutive securities (1)
|
|
2.7
|
|
|
2.8
|
|
|
2.4
|
|
Diluted weighted-average shares outstanding (2)
|
|
153.6
|
|
|
158.2
|
|
|
166.0
|
|
(1)
|
The dilutive effect of outstanding stock options, restricted stock units, restricted stock, performance share units and Coworker Stock Purchase Plan units is reflected in the diluted weighted-average shares outstanding using the treasury stock method.
|
(2)
|
There were fewer than 0.2 million potential common shares excluded from diluted weighted-average shares outstanding for the years ended December 31, 2018, 2017 and 2016, respectively, as their inclusion would have had an anti-dilutive effect.
|
(in millions)
|
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other
|
|
Headquarters
|
|
Total
|
||||||||||||
2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
6,842.5
|
|
|
$
|
1,359.6
|
|
|
$
|
6,154.7
|
|
|
$
|
1,883.7
|
|
|
$
|
—
|
|
|
$
|
16,240.5
|
|
Operating income (loss)
|
|
536.9
|
|
|
95.7
|
|
|
410.8
|
|
|
82.2
|
|
|
(138.3
|
)
|
|
987.3
|
|
||||||
Depreciation and amortization expense
|
|
(81.7
|
)
|
|
(20.8
|
)
|
|
(45.4
|
)
|
|
(31.8
|
)
|
|
(85.9
|
)
|
|
(265.6
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2017(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
6,172.8
|
|
|
$
|
1,220.5
|
|
|
$
|
5,906.5
|
|
|
$
|
1,533.1
|
|
|
$
|
—
|
|
|
$
|
14,832.9
|
|
Operating income (loss)
|
|
487.9
|
|
|
74.3
|
|
|
374.4
|
|
|
57.1
|
|
|
(127.2
|
)
|
|
866.5
|
|
||||||
Depreciation and amortization expense
|
|
(83.1
|
)
|
|
(20.7
|
)
|
|
(44.8
|
)
|
|
(30.9
|
)
|
|
(81.4
|
)
|
|
(260.9
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2016(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
5,734.9
|
|
|
$
|
1,118.1
|
|
|
$
|
5,477.4
|
|
|
$
|
1,342.3
|
|
|
$
|
—
|
|
|
$
|
13,672.7
|
|
Operating income (loss)
|
|
453.5
|
|
|
69.1
|
|
|
367.7
|
|
|
44.6
|
|
|
(114.9
|
)
|
|
820.0
|
|
||||||
Depreciation and amortization expense
|
|
(82.9
|
)
|
|
(20.6
|
)
|
|
(44.7
|
)
|
|
(32.1
|
)
|
|
(74.2
|
)
|
|
(254.5
|
)
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other
|
|
Total
|
||||||||||
Geography(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
6,834.4
|
|
|
$
|
1,359.6
|
|
|
$
|
6,154.7
|
|
|
$
|
30.9
|
|
|
$
|
14,379.6
|
|
Rest of World
|
8.1
|
|
|
—
|
|
|
—
|
|
|
1,852.8
|
|
|
1,860.9
|
|
|||||
Total Net sales
|
6,842.5
|
|
|
1,359.6
|
|
|
6,154.7
|
|
|
1,883.7
|
|
|
16,240.5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Major Product and Services
|
|
|
|
|
|
|
|
|
|
||||||||||
Hardware
|
5,455.6
|
|
|
1,135.8
|
|
|
4,998.9
|
|
|
1,492.1
|
|
|
13,082.4
|
|
|||||
Software
|
982.3
|
|
|
174.5
|
|
|
976.4
|
|
|
213.8
|
|
|
2,347.0
|
|
|||||
Services
|
337.3
|
|
|
28.2
|
|
|
162.8
|
|
|
169.0
|
|
|
697.3
|
|
|||||
Other(2)
|
67.3
|
|
|
21.1
|
|
|
16.6
|
|
|
8.8
|
|
|
113.8
|
|
|||||
Total Net sales
|
6,842.5
|
|
|
1,359.6
|
|
|
6,154.7
|
|
|
1,883.7
|
|
|
16,240.5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales by Channel
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
6,842.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,842.5
|
|
|||||
Small Business
|
—
|
|
|
1,359.6
|
|
|
—
|
|
|
—
|
|
|
1,359.6
|
|
|||||
Government
|
—
|
|
|
—
|
|
|
2,097.3
|
|
|
—
|
|
|
2,097.3
|
|
|||||
Education
|
—
|
|
|
—
|
|
|
2,327.4
|
|
|
—
|
|
|
2,327.4
|
|
|||||
Healthcare
|
—
|
|
|
—
|
|
|
1,730.0
|
|
|
—
|
|
|
1,730.0
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1,883.7
|
|
|
1,883.7
|
|
|||||
Total Net sales
|
6,842.5
|
|
|
1,359.6
|
|
|
6,154.7
|
|
|
1,883.7
|
|
|
16,240.5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
||||||||||
Transferred at a point in time where CDW is principal
|
6,256.5
|
|
|
1,281.3
|
|
|
5,758.6
|
|
|
1,687.6
|
|
|
14,984.0
|
|
|||||
Transferred at a point in time where CDW is agent
|
389.1
|
|
|
69.4
|
|
|
211.5
|
|
|
49.8
|
|
|
719.8
|
|
|||||
Transferred over time where CDW is principal
|
196.9
|
|
|
8.9
|
|
|
184.6
|
|
|
146.3
|
|
|
536.7
|
|
|||||
Total Net sales
|
$
|
6,842.5
|
|
|
$
|
1,359.6
|
|
|
$
|
6,154.7
|
|
|
$
|
1,883.7
|
|
|
$
|
16,240.5
|
|
(1)
|
Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address.
|
(2)
|
Includes items such as delivery charges to customers.
|
|
Year Ended December 31, 2017(1)
|
||||||||||||||||||
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other
|
|
Total
|
||||||||||
Geography(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
6,167.4
|
|
|
$
|
1,220.5
|
|
|
$
|
5,906.5
|
|
|
$
|
25.5
|
|
|
$
|
13,319.9
|
|
Rest of World
|
5.4
|
|
|
—
|
|
|
—
|
|
|
1,507.6
|
|
|
1,513.0
|
|
|||||
Total Net sales
|
6,172.8
|
|
|
1,220.5
|
|
|
5,906.5
|
|
|
1,533.1
|
|
|
14,832.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Major Product and Services
|
|
|
|
|
|
|
|
|
|
||||||||||
Hardware
|
4,871.6
|
|
|
1,012.5
|
|
|
4,846.5
|
|
|
1,229.8
|
|
|
11,960.4
|
|
|||||
Software
|
918.5
|
|
|
163.1
|
|
|
908.3
|
|
|
167.0
|
|
|
2,156.9
|
|
|||||
Services
|
316.2
|
|
|
24.5
|
|
|
133.5
|
|
|
128.5
|
|
|
602.7
|
|
|||||
Other(3)
|
66.5
|
|
|
20.4
|
|
|
18.2
|
|
|
7.8
|
|
|
112.9
|
|
|||||
Total Net sales
|
6,172.8
|
|
|
1,220.5
|
|
|
5,906.5
|
|
|
1,533.1
|
|
|
14,832.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales by Channel
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
6,172.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,172.8
|
|
|||||
Small Business
|
—
|
|
|
1,220.5
|
|
|
—
|
|
|
—
|
|
|
1,220.5
|
|
|||||
Government
|
—
|
|
|
|
|
2,109.8
|
|
|
—
|
|
|
2,109.8
|
|
||||||
Education
|
—
|
|
|
—
|
|
|
2,184.5
|
|
|
—
|
|
|
2,184.5
|
|
|||||
Healthcare
|
—
|
|
|
—
|
|
|
1,612.2
|
|
|
—
|
|
|
1,612.2
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1,533.1
|
|
|
1,533.1
|
|
|||||
Total Net sales
|
6,172.8
|
|
|
1,220.5
|
|
|
5,906.5
|
|
|
1,533.1
|
|
|
14,832.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
||||||||||
Transferred at a point in time where CDW is principal
|
5,640.9
|
|
|
1,152.5
|
|
|
5,559.4
|
|
|
1,375.7
|
|
|
13,728.5
|
|
|||||
Transferred at a point in time where CDW is agent
|
344.2
|
|
|
59.4
|
|
|
184.1
|
|
|
27.9
|
|
|
615.6
|
|
|||||
Transferred over time where CDW is principal
|
187.7
|
|
|
8.6
|
|
|
163.0
|
|
|
129.5
|
|
|
488.8
|
|
|||||
Total Net sales
|
$
|
6,172.8
|
|
|
$
|
1,220.5
|
|
|
$
|
5,906.5
|
|
|
$
|
1,533.1
|
|
|
$
|
14,832.9
|
|
(1)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address.
|
(3)
|
Includes items such as delivery charges to customers.
|
|
Year Ended December 31, 2016(1)
|
||||||||||||||||||
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other
|
|
Total
|
||||||||||
Geography(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
5,594.6
|
|
|
$
|
1,118.1
|
|
|
$
|
5,477.4
|
|
|
$
|
28.2
|
|
|
$
|
12,218.3
|
|
Rest of World
|
140.3
|
|
|
—
|
|
|
—
|
|
|
1,314.1
|
|
|
1,454.4
|
|
|||||
Total Net sales
|
5,734.9
|
|
|
1,118.1
|
|
|
5,477.4
|
|
|
1,342.3
|
|
|
13,672.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Major Product and Services
|
|
|
|
|
|
|
|
|
|
||||||||||
Hardware
|
4,495.6
|
|
|
908.3
|
|
|
4,481.2
|
|
|
1,030.9
|
|
|
10,916.0
|
|
|||||
Software
|
876.3
|
|
|
165.0
|
|
|
855.4
|
|
|
175.6
|
|
|
2,072.3
|
|
|||||
Services
|
291.5
|
|
|
24.1
|
|
|
119.6
|
|
|
129.0
|
|
|
564.2
|
|
|||||
Other(3)
|
71.5
|
|
|
20.7
|
|
|
21.2
|
|
|
6.8
|
|
|
120.2
|
|
|||||
Total Net sales
|
5,734.9
|
|
|
1,118.1
|
|
|
5,477.4
|
|
|
1,342.3
|
|
|
13,672.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales by Channel
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
5,734.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,734.9
|
|
|||||
Small Business
|
—
|
|
|
1,118.1
|
|
|
—
|
|
|
—
|
|
|
1,118.1
|
|
|||||
Government
|
—
|
|
|
—
|
|
|
1,813.6
|
|
|
—
|
|
|
1,813.6
|
|
|||||
Education
|
—
|
|
|
—
|
|
|
1,994.4
|
|
|
—
|
|
|
1,994.4
|
|
|||||
Healthcare
|
—
|
|
|
—
|
|
|
1,669.4
|
|
|
—
|
|
|
1,669.4
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1,342.3
|
|
|
1,342.3
|
|
|||||
Total Net sales
|
5,734.9
|
|
|
1,118.1
|
|
|
5,477.4
|
|
|
1,342.3
|
|
|
13,672.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
||||||||||
Transferred at a point in time where CDW is principal
|
5,279.8
|
|
|
1,061.3
|
|
|
5,182.4
|
|
|
1,201.8
|
|
|
12,725.3
|
|
|||||
Transferred at a point in time where CDW is agent
|
281.4
|
|
|
46.8
|
|
|
149.3
|
|
|
22.5
|
|
|
500.0
|
|
|||||
Transferred over time where CDW is principal
|
173.7
|
|
|
10.0
|
|
|
145.7
|
|
|
118.0
|
|
|
447.4
|
|
|||||
Total Net sales
|
$
|
5,734.9
|
|
|
$
|
1,118.1
|
|
|
$
|
5,477.4
|
|
|
$
|
1,342.3
|
|
|
$
|
13,672.7
|
|
(1)
|
Amounts for 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address.
|
(3)
|
Includes items such as delivery charges to customers.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017(1)(2)
|
|
2016(1)(2)
|
|||||||||||||||
|
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
|
$
|
4,053.6
|
|
|
25.0
|
%
|
|
$
|
3,519.8
|
|
|
23.7
|
%
|
|
$
|
2,942.9
|
|
|
21.5
|
%
|
Netcomm Products
|
2,119.8
|
|
|
13.1
|
|
|
2,040.3
|
|
|
13.8
|
|
|
1,957.0
|
|
|
14.3
|
|
|||
Desktops
|
1,318.2
|
|
|
8.1
|
|
|
1,207.0
|
|
|
8.1
|
|
|
1,087.7
|
|
|
8.0
|
|
|||
Video
|
1,185.6
|
|
|
7.3
|
|
|
1,078.4
|
|
|
7.3
|
|
|
963.0
|
|
|
7.0
|
|
|||
Enterprise and Data Storage (Including Drives)
|
1,099.2
|
|
|
6.8
|
|
|
1,087.3
|
|
|
7.3
|
|
|
1,073.9
|
|
|
7.9
|
|
|||
Other Hardware
|
3,306.0
|
|
|
20.3
|
|
|
3,027.6
|
|
|
20.4
|
|
|
2,891.5
|
|
|
21.1
|
|
|||
Total Hardware
|
13,082.4
|
|
|
80.6
|
|
|
11,960.4
|
|
|
80.6
|
|
|
10,916.0
|
|
|
79.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Software(3)
|
2,347.0
|
|
|
14.4
|
|
|
2,156.9
|
|
|
14.5
|
|
|
2,072.3
|
|
|
15.2
|
|
|||
Services(3)
|
697.3
|
|
|
4.3
|
|
|
602.7
|
|
|
4.1
|
|
|
564.2
|
|
|
4.1
|
|
|||
Other(4)
|
113.8
|
|
|
0.7
|
|
|
112.9
|
|
|
0.8
|
|
|
120.2
|
|
|
0.9
|
|
|||
Total Net sales
|
$
|
16,240.5
|
|
|
100.0
|
%
|
|
$
|
14,832.9
|
|
|
100.0
|
%
|
|
$
|
13,672.7
|
|
|
100.0
|
%
|
(1)
|
Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606.
|
(2)
|
Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2018.
|
(3)
|
Certain software and services revenues are recorded on a net basis for accounting purposes. As a result, the category percentage of net revenues is not representative of the category percentage of gross profits.
|
(4)
|
Includes items such as delivery charges to customers.
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||||||||||
December 31, 2018
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
176.0
|
|
|
$
|
—
|
|
|
$
|
46.7
|
|
|
$
|
—
|
|
|
$
|
(16.9
|
)
|
|
$
|
205.8
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
2,331.2
|
|
|
340.0
|
|
|
—
|
|
|
—
|
|
|
2,671.2
|
|
|||||||
Merchandise inventory
|
—
|
|
|
—
|
|
|
387.4
|
|
|
66.9
|
|
|
—
|
|
|
—
|
|
|
454.3
|
|
|||||||
Miscellaneous receivables
|
—
|
|
|
110.6
|
|
|
187.7
|
|
|
18.1
|
|
|
—
|
|
|
—
|
|
|
316.4
|
|
|||||||
Prepaid expenses and other
|
—
|
|
|
17.1
|
|
|
93.8
|
|
|
38.2
|
|
|
—
|
|
|
—
|
|
|
149.1
|
|
|||||||
Total current assets
|
—
|
|
|
303.7
|
|
|
3,000.1
|
|
|
509.9
|
|
|
—
|
|
|
(16.9
|
)
|
|
3,796.8
|
|
|||||||
Property and equipment, net
|
—
|
|
|
82.3
|
|
|
52.0
|
|
|
21.8
|
|
|
—
|
|
|
—
|
|
|
156.1
|
|
|||||||
Goodwill
|
—
|
|
|
751.8
|
|
|
1,437.8
|
|
|
273.2
|
|
|
—
|
|
|
—
|
|
|
2,462.8
|
|
|||||||
Other intangible assets, net
|
—
|
|
|
252.5
|
|
|
300.0
|
|
|
159.7
|
|
|
—
|
|
|
—
|
|
|
712.2
|
|
|||||||
Other assets
|
1.4
|
|
|
49.8
|
|
|
9.6
|
|
|
140.2
|
|
|
—
|
|
|
(161.2
|
)
|
|
39.8
|
|
|||||||
Investment in and advances to subsidiaries
|
973.8
|
|
|
3,028.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,002.7
|
)
|
|
—
|
|
|||||||
Total Assets
|
$
|
975.2
|
|
|
$
|
4,469.0
|
|
|
$
|
4,799.5
|
|
|
$
|
1,104.8
|
|
|
$
|
—
|
|
|
$
|
(4,180.8
|
)
|
|
$
|
7,167.7
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Accounts payable-trade
|
$
|
—
|
|
|
$
|
39.2
|
|
|
$
|
1,387.9
|
|
|
$
|
166.9
|
|
|
$
|
—
|
|
|
$
|
(16.9
|
)
|
|
$
|
1,577.1
|
|
Accounts payable-inventory financing
|
—
|
|
|
0.2
|
|
|
406.1
|
|
|
23.0
|
|
|
—
|
|
|
—
|
|
|
429.3
|
|
|||||||
Current maturities of long-term debt
|
—
|
|
|
14.9
|
|
|
4.0
|
|
|
6.4
|
|
|
—
|
|
|
—
|
|
|
25.3
|
|
|||||||
Contract liabilities
|
—
|
|
|
—
|
|
|
95.6
|
|
|
82.7
|
|
|
—
|
|
|
—
|
|
|
178.3
|
|
|||||||
Accrued expenses and other current liabilities
|
—
|
|
|
217.6
|
|
|
306.7
|
|
|
68.8
|
|
|
—
|
|
|
—
|
|
|
593.1
|
|
|||||||
Total current liabilities
|
—
|
|
|
271.9
|
|
|
2,200.3
|
|
|
347.8
|
|
|
—
|
|
|
(16.9
|
)
|
|
2,803.1
|
|
|||||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt
|
—
|
|
|
3,121.3
|
|
|
4.3
|
|
|
57.7
|
|
|
—
|
|
|
—
|
|
|
3,183.3
|
|
|||||||
Deferred income taxes
|
—
|
|
|
55.9
|
|
|
60.5
|
|
|
26.9
|
|
|
—
|
|
|
(1.4
|
)
|
|
141.9
|
|
|||||||
Other liabilities
|
—
|
|
|
46.1
|
|
|
5.7
|
|
|
172.2
|
|
|
—
|
|
|
(159.8
|
)
|
|
64.2
|
|
|||||||
Total long-term liabilities
|
—
|
|
|
3,223.3
|
|
|
70.5
|
|
|
256.8
|
|
|
—
|
|
|
(161.2
|
)
|
|
3,389.4
|
|
|||||||
Total stockholders' equity
|
975.2
|
|
|
973.8
|
|
|
2,528.7
|
|
|
500.2
|
|
|
—
|
|
|
(4,002.7
|
)
|
|
975.2
|
|
|||||||
Total Liabilities and Stockholders' Equity
|
$
|
975.2
|
|
|
$
|
4,469.0
|
|
|
$
|
4,799.5
|
|
|
$
|
1,104.8
|
|
|
$
|
—
|
|
|
$
|
(4,180.8
|
)
|
|
$
|
7,167.7
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||||||||||
December 31, 2017
|
|||||||||||||||||||||||||||
(as adjusted)
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
113.7
|
|
|
$
|
—
|
|
|
$
|
32.4
|
|
|
$
|
—
|
|
|
$
|
(1.9
|
)
|
|
$
|
144.2
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
2,015.7
|
|
|
313.6
|
|
|
—
|
|
|
—
|
|
|
2,329.3
|
|
|||||||
Merchandise inventory
|
—
|
|
|
—
|
|
|
354.6
|
|
|
56.9
|
|
|
—
|
|
|
—
|
|
|
411.5
|
|
|||||||
Miscellaneous receivables
|
—
|
|
|
103.9
|
|
|
211.1
|
|
|
28.0
|
|
|
—
|
|
|
—
|
|
|
343.0
|
|
|||||||
Prepaid expenses and other
|
—
|
|
|
18.0
|
|
|
100.4
|
|
|
49.9
|
|
|
—
|
|
|
—
|
|
|
168.3
|
|
|||||||
Total current assets
|
—
|
|
|
235.6
|
|
|
2,681.8
|
|
|
480.8
|
|
|
—
|
|
|
(1.9
|
)
|
|
3,396.3
|
|
|||||||
Property and equipment, net
|
—
|
|
|
95.0
|
|
|
43.5
|
|
|
22.6
|
|
|
—
|
|
|
—
|
|
|
161.1
|
|
|||||||
Goodwill
|
—
|
|
|
751.8
|
|
|
1,439.0
|
|
|
288.8
|
|
|
—
|
|
|
—
|
|
|
2,479.6
|
|
|||||||
Other intangible assets, net
|
—
|
|
|
280.1
|
|
|
424.5
|
|
|
192.4
|
|
|
—
|
|
|
—
|
|
|
897.0
|
|
|||||||
Other assets
|
1.7
|
|
|
30.7
|
|
|
209.3
|
|
|
2.6
|
|
|
—
|
|
|
(211.6
|
)
|
|
32.7
|
|
|||||||
Investment in and advances to subsidiaries
|
983.9
|
|
|
3,066.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,050.0
|
)
|
|
—
|
|
|||||||
Total Assets
|
$
|
985.6
|
|
|
$
|
4,459.3
|
|
|
$
|
4,798.1
|
|
|
$
|
987.2
|
|
|
$
|
—
|
|
|
$
|
(4,263.5
|
)
|
|
$
|
6,966.7
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Accounts payable-trade
|
$
|
—
|
|
|
$
|
42.5
|
|
|
$
|
1,112.1
|
|
|
$
|
165.0
|
|
|
$
|
—
|
|
|
$
|
(1.9
|
)
|
|
$
|
1,317.7
|
|
Accounts payable-inventory financing
|
—
|
|
|
1.0
|
|
|
480.9
|
|
|
16.1
|
|
|
—
|
|
|
—
|
|
|
498.0
|
|
|||||||
Current maturities of long-term debt
|
—
|
|
|
14.9
|
|
|
3.8
|
|
|
6.8
|
|
|
—
|
|
|
—
|
|
|
25.5
|
|
|||||||
Contract liabilities
|
—
|
|
|
—
|
|
|
87.5
|
|
|
71.3
|
|
|
—
|
|
|
—
|
|
|
158.8
|
|
|||||||
Accrued expenses and other current liabilities
|
—
|
|
|
173.3
|
|
|
262.0
|
|
|
86.8
|
|
|
—
|
|
|
—
|
|
|
522.1
|
|
|||||||
Total current liabilities
|
—
|
|
|
231.7
|
|
|
1,946.3
|
|
|
346.0
|
|
|
—
|
|
|
(1.9
|
)
|
|
2,522.1
|
|
|||||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt
|
—
|
|
|
3,134.2
|
|
|
8.3
|
|
|
67.5
|
|
|
—
|
|
|
—
|
|
|
3,210.0
|
|
|||||||
Deferred income taxes
|
—
|
|
|
66.5
|
|
|
100.1
|
|
|
31.4
|
|
|
—
|
|
|
(1.7
|
)
|
|
196.3
|
|
|||||||
Other liabilities
|
—
|
|
|
43.0
|
|
|
4.7
|
|
|
214.9
|
|
|
—
|
|
|
(209.9
|
)
|
|
52.7
|
|
|||||||
Total long-term liabilities
|
—
|
|
|
3,243.7
|
|
|
113.1
|
|
|
313.8
|
|
|
—
|
|
|
(211.6
|
)
|
|
3,459.0
|
|
|||||||
Total stockholders' equity
|
985.6
|
|
|
983.9
|
|
|
2,738.7
|
|
|
327.4
|
|
|
—
|
|
|
(4,050.0
|
)
|
|
985.6
|
|
|||||||
Total Liabilities and Stockholders' Equity
|
$
|
985.6
|
|
|
$
|
4,459.3
|
|
|
$
|
4,798.1
|
|
|
$
|
987.2
|
|
|
$
|
—
|
|
|
$
|
(4,263.5
|
)
|
|
$
|
6,966.7
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
Year Ended December 31, 2018
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,356.8
|
|
|
$
|
1,883.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,240.5
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
11,962.7
|
|
|
1,570.9
|
|
|
—
|
|
|
—
|
|
|
13,533.6
|
|
|||||||
Gross profit
|
—
|
|
|
—
|
|
|
2,394.1
|
|
|
312.8
|
|
|
—
|
|
|
—
|
|
|
2,706.9
|
|
|||||||
Selling and administrative expenses
|
—
|
|
|
138.3
|
|
|
1,176.8
|
|
|
222.0
|
|
|
—
|
|
|
—
|
|
|
1,537.1
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
173.9
|
|
|
8.6
|
|
|
—
|
|
|
—
|
|
|
182.5
|
|
|||||||
Operating income (loss)
|
—
|
|
|
(138.3
|
)
|
|
1,043.4
|
|
|
82.2
|
|
|
—
|
|
|
—
|
|
|
987.3
|
|
|||||||
Interest (expense) income, net
|
—
|
|
|
(146.7
|
)
|
|
3.5
|
|
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
(148.6
|
)
|
|||||||
Other income (expense), net
|
—
|
|
|
(0.2
|
)
|
|
0.7
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|||||||
Income (loss) before income taxes
|
—
|
|
|
(285.2
|
)
|
|
1,047.6
|
|
|
78.1
|
|
|
—
|
|
|
—
|
|
|
840.5
|
|
|||||||
Income tax (expense) benefit
|
(0.4
|
)
|
|
67.0
|
|
|
(249.8
|
)
|
|
(14.3
|
)
|
|
—
|
|
|
—
|
|
|
(197.5
|
)
|
|||||||
Income (loss) before equity in earnings of subsidiaries
|
(0.4
|
)
|
|
(218.2
|
)
|
|
797.8
|
|
|
63.8
|
|
|
—
|
|
|
—
|
|
|
643.0
|
|
|||||||
Equity in earnings of subsidiaries
|
643.4
|
|
|
861.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,505.0
|
)
|
|
—
|
|
|||||||
Net income
|
$
|
643.0
|
|
|
$
|
643.4
|
|
|
$
|
797.8
|
|
|
$
|
63.8
|
|
|
$
|
—
|
|
|
$
|
(1,505.0
|
)
|
|
$
|
643.0
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
Year Ended December 31, 2017
|
|||||||||||||||||||||||||||
(as adjusted)
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,299.8
|
|
|
$
|
1,533.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,832.9
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
11,103.5
|
|
|
1,279.2
|
|
|
—
|
|
|
—
|
|
|
12,382.7
|
|
|||||||
Gross profit
|
—
|
|
|
—
|
|
|
2,196.3
|
|
|
253.9
|
|
|
—
|
|
|
—
|
|
|
2,450.2
|
|
|||||||
Selling and administrative expenses
|
—
|
|
|
127.2
|
|
|
1,093.3
|
|
|
189.5
|
|
|
—
|
|
|
—
|
|
|
1,410.0
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
166.4
|
|
|
7.3
|
|
|
—
|
|
|
—
|
|
|
173.7
|
|
|||||||
Operating income (loss)
|
—
|
|
|
(127.2
|
)
|
|
936.6
|
|
|
57.1
|
|
|
—
|
|
|
—
|
|
|
866.5
|
|
|||||||
Interest (expense) income, net
|
—
|
|
|
(148.3
|
)
|
|
4.1
|
|
|
(6.3
|
)
|
|
—
|
|
|
—
|
|
|
(150.5
|
)
|
|||||||
Net loss on extinguishments of long-term debt
|
—
|
|
|
(57.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57.4
|
)
|
|||||||
Other income (expense), net
|
—
|
|
|
(0.1
|
)
|
|
0.7
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||||||
Income (loss) before income taxes
|
—
|
|
|
(333.0
|
)
|
|
941.4
|
|
|
52.3
|
|
|
—
|
|
|
—
|
|
|
660.7
|
|
|||||||
Income tax (expense) benefit
|
(0.9
|
)
|
|
149.9
|
|
|
(270.2
|
)
|
|
(16.4
|
)
|
|
—
|
|
|
—
|
|
|
(137.6
|
)
|
|||||||
Income (loss) before equity in earnings of subsidiaries
|
(0.9
|
)
|
|
(183.1
|
)
|
|
671.2
|
|
|
35.9
|
|
|
—
|
|
|
—
|
|
|
523.1
|
|
|||||||
Equity in earnings of subsidiaries
|
524.0
|
|
|
707.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,231.1
|
)
|
|
—
|
|
|||||||
Net income
|
$
|
523.1
|
|
|
$
|
524.0
|
|
|
$
|
671.2
|
|
|
$
|
35.9
|
|
|
$
|
—
|
|
|
$
|
(1,231.1
|
)
|
|
$
|
523.1
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
Year Ended December 31, 2016
|
|||||||||||||||||||||||||||
(as adjusted)
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,330.4
|
|
|
$
|
1,342.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,672.7
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
10,225.5
|
|
|
1,118.9
|
|
|
—
|
|
|
—
|
|
|
11,344.4
|
|
|||||||
Gross profit
|
—
|
|
|
—
|
|
|
2,104.9
|
|
|
223.4
|
|
|
—
|
|
|
—
|
|
|
2,328.3
|
|
|||||||
Selling and administrative expenses
|
—
|
|
|
114.9
|
|
|
1,057.4
|
|
|
173.1
|
|
|
—
|
|
|
—
|
|
|
1,345.4
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
157.2
|
|
|
5.7
|
|
|
—
|
|
|
—
|
|
|
162.9
|
|
|||||||
Operating income (loss)
|
—
|
|
|
(114.9
|
)
|
|
890.3
|
|
|
44.6
|
|
|
—
|
|
|
—
|
|
|
820.0
|
|
|||||||
Interest (expense) income, net
|
—
|
|
|
(145.8
|
)
|
|
6.7
|
|
|
(7.4
|
)
|
|
—
|
|
|
—
|
|
|
(146.5
|
)
|
|||||||
Net loss on extinguishments of long-term debt
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|||||||
Other income, net
|
—
|
|
|
0.2
|
|
|
1.0
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|||||||
Income (loss) before income taxes
|
—
|
|
|
(262.6
|
)
|
|
898.0
|
|
|
37.8
|
|
|
—
|
|
|
—
|
|
|
673.2
|
|
|||||||
Income tax (expense) benefit
|
—
|
|
|
79.8
|
|
|
(319.8
|
)
|
|
(8.1
|
)
|
|
—
|
|
|
—
|
|
|
(248.1
|
)
|
|||||||
Income (loss) before equity in earnings of subsidiaries
|
—
|
|
|
(182.8
|
)
|
|
578.2
|
|
|
29.7
|
|
|
—
|
|
|
—
|
|
|
425.1
|
|
|||||||
Equity in earnings of subsidiaries
|
425.1
|
|
|
607.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,033.0
|
)
|
|
—
|
|
|||||||
Net income
|
$
|
425.1
|
|
|
$
|
425.1
|
|
|
$
|
578.2
|
|
|
$
|
29.7
|
|
|
$
|
—
|
|
|
$
|
(1,033.0
|
)
|
|
$
|
425.1
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||||||||||
Year Ended December 31, 2018
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Comprehensive income
|
$
|
608.3
|
|
|
$
|
608.7
|
|
|
$
|
797.8
|
|
|
$
|
31.1
|
|
|
$
|
—
|
|
|
$
|
(1,437.6
|
)
|
|
$
|
608.3
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||||||||||
Year Ended December 31, 2017
|
|||||||||||||||||||||||||||
(as adjusted)
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Comprehensive income
|
$
|
567.0
|
|
|
$
|
567.9
|
|
|
$
|
671.2
|
|
|
$
|
79.6
|
|
|
$
|
—
|
|
|
$
|
(1,318.7
|
)
|
|
$
|
567.0
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||||||||||
Year Ended December 31, 2016
|
|||||||||||||||||||||||||||
(as adjusted)
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Comprehensive income (loss)
|
$
|
346.4
|
|
|
$
|
346.4
|
|
|
$
|
578.2
|
|
|
$
|
(49.0
|
)
|
|
$
|
—
|
|
|
$
|
(875.6
|
)
|
|
$
|
346.4
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
Year Ended December 31, 2018
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
|
$
|
(85.7
|
)
|
|
$
|
1,073.6
|
|
|
$
|
75.0
|
|
|
$
|
—
|
|
|
$
|
(157.0
|
)
|
|
$
|
905.9
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(40.8
|
)
|
|
(34.5
|
)
|
|
(10.8
|
)
|
|
—
|
|
|
—
|
|
|
(86.1
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(40.8
|
)
|
|
(34.5
|
)
|
|
(10.8
|
)
|
|
—
|
|
|
—
|
|
|
(86.1
|
)
|
|||||||
Cash flows (used in) provided by: financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Proceeds from borrowings under revolving credit facilities
|
—
|
|
|
640.0
|
|
|
—
|
|
|
46.7
|
|
|
—
|
|
|
—
|
|
|
686.7
|
|
|||||||
Repayments of borrowings under revolving credit facilities
|
—
|
|
|
(640.0
|
)
|
|
—
|
|
|
(46.7
|
)
|
|
—
|
|
|
—
|
|
|
(686.7
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
(14.9
|
)
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
|
—
|
|
|
(21.6
|
)
|
|||||||
Net change in accounts payable-inventory financing
|
—
|
|
|
(0.8
|
)
|
|
(74.7
|
)
|
|
8.1
|
|
|
—
|
|
|
—
|
|
|
(67.4
|
)
|
|||||||
Repurchases of common stock
|
(522.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(522.3
|
)
|
|||||||
Payment of incentive compensation plan withholding taxes
|
(33.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.9
|
)
|
|||||||
Dividends
|
(139.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(139.4
|
)
|
|||||||
Repayment of intercompany loan
|
—
|
|
|
—
|
|
|
47.5
|
|
|
(47.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
—
|
|
|
34.6
|
|
|
(4.4
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
29.8
|
|
|||||||
Distributions and advances from (to) affiliates
|
695.6
|
|
|
169.9
|
|
|
(1,007.5
|
)
|
|
—
|
|
|
—
|
|
|
142.0
|
|
|
—
|
|
|||||||
Net cash (used in) provided by financing activities
|
—
|
|
|
188.8
|
|
|
(1,039.1
|
)
|
|
(46.5
|
)
|
|
—
|
|
|
142.0
|
|
|
(754.8
|
)
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|||||||
Net increase in cash and cash equivalents
|
—
|
|
|
62.3
|
|
|
—
|
|
|
14.3
|
|
|
—
|
|
|
(15.0
|
)
|
|
61.6
|
|
|||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
113.7
|
|
|
—
|
|
|
32.4
|
|
|
—
|
|
|
(1.9
|
)
|
|
144.2
|
|
|||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
176.0
|
|
|
$
|
—
|
|
|
$
|
46.7
|
|
|
$
|
—
|
|
|
$
|
(16.9
|
)
|
|
$
|
205.8
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
Year Ended December 31, 2017
|
|||||||||||||||||||||||||||
(as adjusted)
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor |
|
Subsidiary
Issuer |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments |
|
Consolidated
|
||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
0.6
|
|
|
$
|
(71.1
|
)
|
|
$
|
788.5
|
|
|
$
|
52.3
|
|
|
$
|
—
|
|
|
$
|
7.4
|
|
|
$
|
777.7
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(55.2
|
)
|
|
(6.3
|
)
|
|
(19.6
|
)
|
|
—
|
|
|
—
|
|
|
(81.1
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(55.2
|
)
|
|
(6.3
|
)
|
|
(19.6
|
)
|
|
—
|
|
|
—
|
|
|
(81.1
|
)
|
|||||||
Cash flows (used in) provided by financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Proceeds from borrowings under revolving credit facility
|
—
|
|
|
1,501.5
|
|
|
—
|
|
|
59.2
|
|
|
—
|
|
|
—
|
|
|
1,560.7
|
|
|||||||
Repayments of borrowings under revolving credit facility
|
—
|
|
|
(1,501.5
|
)
|
|
—
|
|
|
(59.2
|
)
|
|
—
|
|
|
—
|
|
|
(1,560.7
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
(14.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.9
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,083.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,083.0
|
|
|||||||
Payments to extinguish long-term debt
|
—
|
|
|
(2,121.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,121.3
|
)
|
|||||||
Net change in accounts payable-inventory financing
|
—
|
|
|
(0.2
|
)
|
|
(78.4
|
)
|
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
(84.0
|
)
|
|||||||
Repurchases of common stock
|
(534.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(534.0
|
)
|
|||||||
Payment of incentive compensation plan withholding taxes
|
(49.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49.6
|
)
|
|||||||
Dividends
|
(106.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(106.9
|
)
|
|||||||
Repayment of intercompany loan
|
—
|
|
|
—
|
|
|
34.3
|
|
|
(34.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
—
|
|
|
14.1
|
|
|
(4.0
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|||||||
Distributions and advances from (to) affiliates
|
689.9
|
|
|
56.6
|
|
|
(737.2
|
)
|
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
|
—
|
|
|||||||
Net cash (used in) provided by financing activities
|
(0.6
|
)
|
|
17.3
|
|
|
(785.3
|
)
|
|
(40.8
|
)
|
|
—
|
|
|
(9.3
|
)
|
|
(818.7
|
)
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|||||||
Net decrease in cash and cash equivalents
|
—
|
|
|
(109.0
|
)
|
|
(3.1
|
)
|
|
(5.5
|
)
|
|
—
|
|
|
(1.9
|
)
|
|
(119.5
|
)
|
|||||||
Cash and cash equivalents—beginning of period
|
—
|
|
|
222.7
|
|
|
3.1
|
|
|
37.9
|
|
|
—
|
|
|
—
|
|
|
263.7
|
|
|||||||
Cash and cash equivalents—end of period
|
$
|
—
|
|
|
$
|
113.7
|
|
|
$
|
—
|
|
|
$
|
32.4
|
|
|
$
|
—
|
|
|
$
|
(1.9
|
)
|
|
$
|
144.2
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
Year Ended December 31, 2016
|
|||||||||||||||||||||||||||
(as adjusted)
|
|||||||||||||||||||||||||||
(in millions)
|
Parent
Guarantor |
|
Subsidiary
Issuer |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments |
|
Consolidated
|
||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
|
$
|
(158.5
|
)
|
|
$
|
695.5
|
|
|
$
|
56.1
|
|
|
$
|
—
|
|
|
$
|
10.9
|
|
|
$
|
604.0
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(50.9
|
)
|
|
(7.6
|
)
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
|
(63.5
|
)
|
|||||||
Premium payments on interest rate cap agreements
|
—
|
|
|
(2.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(53.3
|
)
|
|
(7.6
|
)
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
|
(65.9
|
)
|
|||||||
Cash flows (used in) provided by financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from borrowings under revolving credit facility
|
—
|
|
|
329.6
|
|
|
—
|
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
338.8
|
|
|||||||
Repayments of borrowings under revolving credit facility
|
—
|
|
|
(329.6
|
)
|
|
—
|
|
|
(9.2
|
)
|
|
—
|
|
|
—
|
|
|
(338.8
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
(20.6
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
1,483.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,483.0
|
|
|||||||
Payments to extinguish long-term debt
|
—
|
|
|
(1,490.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,490.4
|
)
|
|||||||
Net change in accounts payable-inventory financing
|
—
|
|
|
1.5
|
|
|
131.0
|
|
|
11.1
|
|
|
—
|
|
|
—
|
|
|
143.6
|
|
|||||||
Repurchases of common stock
|
(367.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(367.4
|
)
|
|||||||
Dividends
|
(78.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78.7
|
)
|
|||||||
Repayment of intercompany loan
|
—
|
|
|
—
|
|
|
40.4
|
|
|
(40.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
—
|
|
|
12.2
|
|
|
16.7
|
|
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
25.9
|
|
|||||||
Distributions and advances from (to) affiliates
|
446.1
|
|
|
398.3
|
|
|
(872.9
|
)
|
|
—
|
|
|
—
|
|
|
28.5
|
|
|
—
|
|
|||||||
Net cash (used in) provided by financing activities
|
—
|
|
|
389.4
|
|
|
(684.8
|
)
|
|
(37.7
|
)
|
|
—
|
|
|
28.5
|
|
|
(304.6
|
)
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.4
|
)
|
|
—
|
|
|
—
|
|
|
(7.4
|
)
|
|||||||
Net increase in cash and cash equivalents
|
—
|
|
|
177.6
|
|
|
3.1
|
|
|
6.0
|
|
|
—
|
|
|
39.4
|
|
|
226.1
|
|
|||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
45.1
|
|
|
—
|
|
|
31.9
|
|
|
—
|
|
|
(39.4
|
)
|
|
37.6
|
|
|||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
222.7
|
|
|
$
|
3.1
|
|
|
$
|
37.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
263.7
|
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
(in millions, except per-share amounts)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net Sales:
|
|
|
|
|
|
|
|
|
||||||||
Corporate
|
|
$
|
1,565.8
|
|
|
$
|
1,733.8
|
|
|
$
|
1,706.5
|
|
|
$
|
1,836.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Small Business
|
|
327.6
|
|
|
329.5
|
|
|
340.0
|
|
|
362.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Public:
|
|
|
|
|
|
|
|
|
||||||||
Government
|
|
418.5
|
|
|
493.5
|
|
|
639.3
|
|
|
546.0
|
|
||||
Education
|
|
397.2
|
|
|
712.1
|
|
|
793.1
|
|
|
425.0
|
|
||||
Healthcare
|
|
414.3
|
|
|
429.8
|
|
|
442.7
|
|
|
443.2
|
|
||||
Total Public
|
|
1,230.0
|
|
|
1,635.4
|
|
|
1,875.1
|
|
|
1,414.2
|
|
||||
Other
|
|
483.0
|
|
|
487.4
|
|
|
451.6
|
|
|
461.7
|
|
||||
Net sales
|
|
3,606.4
|
|
|
4,186.1
|
|
|
4,373.2
|
|
|
4,074.8
|
|
||||
Gross profit
|
|
603.9
|
|
|
695.6
|
|
|
713.6
|
|
|
693.8
|
|
||||
Operating income
|
|
204.1
|
|
|
265.5
|
|
|
274.8
|
|
|
242.9
|
|
||||
Net income
|
|
127.0
|
|
|
173.0
|
|
|
183.7
|
|
|
159.3
|
|
||||
Basic(1)
|
|
0.83
|
|
|
1.14
|
|
|
1.22
|
|
|
1.07
|
|
||||
Diluted(1)
|
|
0.82
|
|
|
1.12
|
|
|
1.20
|
|
|
1.05
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share
|
|
$
|
0.210
|
|
|
$
|
0.210
|
|
|
$
|
0.210
|
|
|
$
|
0.295
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Year Ended December 31, 2017(2)(3)
|
||||||||||||||
(in millions, except per-share amounts)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net Sales:
|
|
|
|
|
|
|
|
|
||||||||
Corporate
|
|
$
|
1,440.6
|
|
|
$
|
1,580.1
|
|
|
$
|
1,552.8
|
|
|
$
|
1,599.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Small Business
|
|
292.0
|
|
|
315.0
|
|
|
305.4
|
|
|
308.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Public:
|
|
|
|
|
|
|
|
|
||||||||
Government
|
|
374.6
|
|
|
523.4
|
|
|
591.9
|
|
|
619.9
|
|
||||
Education
|
|
393.2
|
|
|
704.9
|
|
|
691.3
|
|
|
395.2
|
|
||||
Healthcare
|
|
385.9
|
|
|
404.5
|
|
|
410.7
|
|
|
411.0
|
|
||||
Total Public
|
|
1,153.7
|
|
|
1,632.8
|
|
|
1,693.9
|
|
|
1,426.1
|
|
||||
Other
|
|
369.7
|
|
|
363.8
|
|
|
381.1
|
|
|
418.6
|
|
||||
Net sales
|
|
3,256.0
|
|
|
3,891.7
|
|
|
3,933.2
|
|
|
3,752.1
|
|
||||
Gross profit
|
|
553.5
|
|
|
640.8
|
|
|
642.2
|
|
|
613.7
|
|
||||
Operating income
|
|
170.7
|
|
|
230.8
|
|
|
244.0
|
|
|
221.1
|
|
||||
Net income
|
|
58.2
|
|
|
140.9
|
|
|
129.3
|
|
|
194.8
|
|
||||
Basic(1)
|
|
0.36
|
|
|
0.90
|
|
|
0.84
|
|
|
1.28
|
|
||||
Diluted(1)
|
|
0.36
|
|
|
0.89
|
|
|
0.83
|
|
|
1.25
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share
|
|
$
|
0.160
|
|
|
$
|
0.160
|
|
|
$
|
0.160
|
|
|
$
|
0.210
|
|
(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.
|
(2)
|
Amounts for 2017 have been adjusted to reflect the adoption of Topic 606.
|
(3)
|
Sum of quarters may not agree to reported yearly totals due to rounding.
|
|
|
|
|
|
|
|
|
|
||||||||
(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, 2018
|
|
$
|
6.2
|
|
|
$
|
2.0
|
|
|
$
|
(1.2
|
)
|
|
$
|
7.0
|
|
Year Ended December 31, 2017
|
|
5.9
|
|
|
2.1
|
|
|
(1.8
|
)
|
|
6.2
|
|
||||
Year Ended December 31, 2016
|
|
6.0
|
|
|
2.0
|
|
|
(2.1
|
)
|
|
5.9
|
|
/s/ Ernst & Young LLP
|
Chicago, Illinois
|
February 27, 2019
|
(a)
|
Financial Statements and Schedules
|
(1)
|
Consolidated Financial Statements:
|
|
Page
|
|
|
(2)
|
Financial Statement Schedules:
|
(b)
|
Exhibits
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.1.1
|
|
|
|
|
|
3.1.2
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
3.7
|
|
|
|
|
|
3.8
|
|
|
|
|
|
3.9
|
|
|
|
|
|
3.10
|
|
|
|
|
|
3.11
|
|
|
|
|
|
3.12
|
|
|
|
|
|
3.13
|
|
|
|
|
|
3.14
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
10.1
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6§
|
|
|
|
|
|
10.7§
|
|
|
|
|
|
10.8§
|
|
|
|
|
|
10.9§
|
|
|
|
|
|
10.10§
|
|
|
|
|
|
10.11§
|
|
|
|
|
|
10.12§
|
|
|
|
|
|
10.13§
|
|
|
|
|
|
10.14§
|
|
|
|
|
|
10.15§
|
|
|
|
|
|
10.16§
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
10.17§
|
|
|
|
|
|
10.18§
|
|
|
|
|
|
10.19§
|
|
|
|
|
|
10.20§
|
|
|
|
|
|
10.21§
|
|
|
|
|
|
10.22§
|
|
|
|
|
|
10.23§
|
|
|
|
|
|
10.24§
|
|
|
|
|
|
10.25§*
|
|
|
|
|
|
10.26§
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
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
|
|
|
|
Exhibit
Number
|
|
Description
|
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.
|
|
|
|
CDW CORPORATION
|
|
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By:
|
/s/ Christine A. Leahy
|
|
|
|
|
Christine A. Leahy
|
|
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Christine A. Leahy
|
|
President and Chief Executive Officer
(principal executive officer) and Director
|
|
February 27, 2019
|
Christine A. Leahy
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/s/ Collin B. Kebo
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Senior Vice President and Chief Financial Officer
(principal financial officer)
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February 27, 2019
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Collin B. Kebo
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/s/ Neil B. Fairfield
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Vice President, Controller and Chief Accounting Officer
(principal accounting officer)
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February 27, 2019
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Neil B. Fairfield
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/s/ Thomas E. Richards
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Executive Chairman of the Board
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February 27, 2019
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Thomas E. Richards
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/s/ Virginia C. Addicott
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Director
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February 27, 2019
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Virginia C. Addicott
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/s/ Steven W. Alesio
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Director
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February 27, 2019
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Steven W. Alesio
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/s/ Barry K. Allen
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Director
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February 27, 2019
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Barry K. Allen
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/s/ James A. Bell
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Director
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February 27, 2019
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James A. Bell
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/s/ Benjamin D. Chereskin
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Director
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February 27, 2019
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Benjamin D. Chereskin
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/s/ Lynda M. Clarizio
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Director
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February 27, 2019
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Lynda M. Clarizio
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/s/ Paul J. Finnegan
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Director
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February 27, 2019
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Paul J. Finnegan
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/s/ David W. Nelms
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Director
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February 27, 2019
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David W. Nelms
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/s/ Joseph R. Swedish
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Director
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February 27, 2019
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Joseph R. Swedish
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/s/ Donna F. Zarcone
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Director
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February 27, 2019
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Donna F. Zarcone
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Subsidiary
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Jurisdiction of Organization
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CDW LLC
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Illinois
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CDW Finance Corporation
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Delaware
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CDW Technologies LLC
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Wisconsin
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CDW Direct, LLC
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Illinois
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CDW Government LLC
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Illinois
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CDW Logistics, Inc.
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Illinois
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CDW Canada Corp.
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Novia Scotia
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CDW NA Limited
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United Kingdom
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CDW International Holdings Limited
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United Kingdom
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CDW Finance Bidco Limited
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United Kingdom
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CDW Finance Holdings Limited
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United Kingdom
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CDW Limited
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United Kingdom
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CDW Finance Topco Limited
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Jersey
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1.
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I have reviewed this annual report on Form 10-K of the registrant;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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/s/ Christine A. Leahy
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Christine A. Leahy
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President and Chief Executive Officer
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CDW Corporation
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February 27, 2019
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1.
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I have reviewed this annual report on Form 10-K of the registrant;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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/s/ Collin B. Kebo
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Collin B. Kebo
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Senior Vice President and Chief Financial Officer
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CDW Corporation
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February 27, 2019
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/s/ Christine A. Leahy
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Christine A. Leahy
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President and Chief Executive Officer
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CDW Corporation
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February 27, 2019
|
/s/ Collin B. Kebo
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Collin B. Kebo
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Senior Vice President and Chief Financial Officer
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CDW Corporation
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February 27, 2019
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