|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
26-0273989
|
||
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
||
|
|
|
|
|
75 Tri-State International
|
|
|
||
Lincolnshire
|
,
|
Illinois
|
|
60069
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
Common stock, par value $0.01 per share
|
CDW
|
Nasdaq Global Select Market
|
|
Item
|
|
Page
|
PART I
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
PART II
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
PART III
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
PART IV
|
|
|
Item 15.
|
||
Item 16.
|
||
SIGNATURES
|
Our value proposition to our customers
|
Our value proposition to our vendor partners
|
||
●
|
Broad selection of products and multi-branded
IT solutions
|
●
|
Access to over 250,000 customers
|
●
|
Value-added services with integration capabilities
|
●
|
Large and established customer channels
|
●
|
Highly-skilled specialists and engineers
|
●
|
Strong distribution and implementation capabilities
|
●
|
Solutions across IT lifecycle
|
●
|
Customer relationships driving insight into technology roadmaps
|
•
|
Data Center: We assess our customers application infrastructure need, 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, hybrid storage and energy-efficient power and cooling.
|
•
|
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.
|
•
|
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 health checks.
|
•
|
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.
|
•
|
Services: We advise, 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.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2019
|
|
2018(1)
|
|
2017(1)
|
|||||||||||||||
|
|
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
|
|
$
|
4,631.7
|
|
|
25.7
|
%
|
|
$
|
4,062.2
|
|
|
25.0
|
%
|
|
$
|
3,491.8
|
|
|
23.5
|
%
|
Netcomm Products
|
|
2,193.4
|
|
|
12.2
|
|
|
2,119.1
|
|
|
13.0
|
|
|
2,021.6
|
|
|
13.6
|
|
|||
Desktops
|
|
1,598.2
|
|
|
8.9
|
|
|
1,322.2
|
|
|
8.1
|
|
|
1,196.0
|
|
|
8.1
|
|
|||
Video
|
|
1,272.7
|
|
|
7.1
|
|
|
1,184.3
|
|
|
7.3
|
|
|
1,070.0
|
|
|
7.2
|
|
|||
Enterprise and Data Storage (Including Drives)
|
|
1,146.0
|
|
|
6.4
|
|
|
1,102.5
|
|
|
6.8
|
|
|
1,070.2
|
|
|
7.2
|
|
|||
Other Hardware
|
|
3,521.2
|
|
|
19.5
|
|
|
3,308.8
|
|
|
20.4
|
|
|
3,122.2
|
|
|
21.0
|
|
|||
Total Hardware
|
|
14,363.2
|
|
|
79.8
|
|
|
13,099.1
|
|
|
80.6
|
|
|
11,971.8
|
|
|
80.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Software(2)
|
|
2,637.2
|
|
|
14.6
|
|
|
2,331.9
|
|
|
14.4
|
|
|
2,145.4
|
|
|
14.5
|
|
|||
Services(2)
|
|
907.6
|
|
|
5.0
|
|
|
695.8
|
|
|
4.3
|
|
|
602.8
|
|
|
4.1
|
|
|||
Other(3)
|
|
124.4
|
|
|
0.6
|
|
|
113.7
|
|
|
0.7
|
|
|
112.9
|
|
|
0.8
|
|
|||
Total Net sales
|
|
$
|
18,032.4
|
|
|
100.0
|
%
|
|
$
|
16,240.5
|
|
|
100.0
|
%
|
|
$
|
14,832.9
|
|
|
100.0
|
%
|
(1)
|
Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2019.
|
(2)
|
Certain software and services revenue is recorded on a net basis for accounting purposes, so the category percentage of Net sales is not representative of the category percentage of gross profits.
|
(3)
|
Includes items such as delivery charges to customers.
|
•
|
resellers, such as Computacenter, Connection, ePlus, Insight Enterprises, NTT, Presidio, SCC, Softchoice, World Wide Technology and many smaller resellers;
|
•
|
manufacturers who sell directly to customers, such as Adobe, Apple, Dell EMC, HP Inc. and Hewlett Packard Enterprise;
|
•
|
large service providers and system integrators, such as Accenture, Dell EMC, Hewlett Packard Enterprise and IBM;
|
•
|
communications service providers, such as AT&T, CenturyLink and Verizon;
|
•
|
cloud providers, such as Amazon Web Services, Google and Microsoft;
|
•
|
e-tailers, such as Amazon and Newegg; and
|
•
|
retailers (including their e-commerce activities), such as Office Depot and Staples.
|
•
|
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.
|
•
|
conduct business with our customers, including delivering services and solutions to them;
|
•
|
manage our inventory, accounts receivable and accounts payable;
|
•
|
support planned growth in services and solutions and continued evolution of the business;
|
•
|
purchase, sell, ship and invoice our hardware and software products and provide and invoice our services efficiently and on a timely basis; and
|
•
|
maintain our cost-efficient operating model while scaling our business.
|
•
|
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;
|
•
|
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
|
55
|
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.
|
Jill M. Billhorn
|
58
|
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.
|
Sona Chawla
|
52
|
Chief Growth and Innovation Officer since January 2020; President, Kohl's Corporation (an omnichannel retailer) from May 2018 to October 2019 and Chief Operating Officer from November 2015 to May 2018; President, Digital and Chief Marketing Officer, Walgreen Company (a drugstore chain) from February 2014 to November 2015.
|
Mark C. Chong
|
49
|
Senior Vice President of Strategy and Marketing since November 2016; Partner, Bain & Company (a global management consulting firm) from January 2010 to September 2016.
|
Elizabeth H. Connelly
|
55
|
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 (a global financial services firm) from March 2012 to December 2018.
|
Christina M. Corley
|
52
|
Chief Commercial and Operating Officer since January 2020; 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
|
55
|
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
|
53
|
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
|
54
|
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
|
54
|
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
|
56
|
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
|
50
|
Senior Vice President, Operations and Chief Information Officer since November 2009.
|
Matthew A. Troka
|
49
|
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, 2019
|
|
0.4
|
|
|
$
|
122.89
|
|
|
0.4
|
|
|
$
|
798.0
|
|
November 1 through November 30, 2019
|
|
0.5
|
|
|
$
|
135.10
|
|
|
0.5
|
|
|
$
|
731.7
|
|
December 1 through December 31, 2019
|
|
0.4
|
|
|
$
|
137.53
|
|
|
0.4
|
|
|
$
|
678.7
|
|
Total
|
|
1.3
|
|
|
|
|
1.3
|
|
|
|
(1)
|
The amounts presented in this column are the remaining total authorized value to be spent after each month's repurchases.
|
|
|
December 31, 2014
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2019
|
||||||||||||
CDW Corp
|
|
$
|
100
|
|
|
$
|
120
|
|
|
$
|
151
|
|
|
$
|
204
|
|
|
$
|
240
|
|
|
$
|
428
|
|
S&P 500 Index
|
|
$
|
100
|
|
|
$
|
99
|
|
|
$
|
109
|
|
|
$
|
130
|
|
|
$
|
122
|
|
|
$
|
157
|
|
CDW Peers
|
|
$
|
100
|
|
|
$
|
98
|
|
|
$
|
122
|
|
|
$
|
138
|
|
|
$
|
115
|
|
|
$
|
146
|
|
|
|
|
||||||||||||||||||||
|
|
Year Ended December 31,
|
||||||||||||||||||||
(dollars in millions, except per share amounts)
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015(1)
|
||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
18,032.4
|
|
|
$
|
16,240.5
|
|
|
$
|
14,832.9
|
|
|
$
|
13,672.7
|
|
|
$
|
12,988.7
|
|
||
Cost of sales
|
|
14,992.5
|
|
|
13,533.6
|
|
|
12,382.7
|
|
|
11,344.4
|
|
|
10,872.9
|
|
|||||||
Gross profit
|
|
3,039.9
|
|
|
2,706.9
|
|
|
2,450.2
|
|
|
2,328.3
|
|
|
2,115.8
|
|
|||||||
Selling and administrative expenses
|
|
1,713.1
|
|
|
1,537.1
|
|
|
1,410.0
|
|
|
1,345.4
|
|
|
1,226.0
|
|
|||||||
Advertising expense
|
|
193.2
|
|
|
182.5
|
|
|
173.7
|
|
|
162.9
|
|
|
147.8
|
|
|||||||
Operating income
|
|
1,133.6
|
|
|
987.3
|
|
|
866.5
|
|
|
820.0
|
|
|
742.0
|
|
|||||||
Interest expense, net
|
|
(159.4
|
)
|
|
(148.6
|
)
|
|
(150.5
|
)
|
|
(146.5
|
)
|
|
(159.5
|
)
|
|||||||
Gain on remeasurement of equity investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98.1
|
|
|||||||
Other (expense) income, net
|
|
(24.5
|
)
|
|
1.8
|
|
|
(55.3
|
)
|
|
(0.3
|
)
|
|
(33.6
|
)
|
|||||||
Income before income taxes
|
|
949.7
|
|
|
840.5
|
|
|
660.7
|
|
|
673.2
|
|
|
647.0
|
|
|||||||
Income tax expense
|
|
(212.9
|
)
|
|
(197.5
|
)
|
|
(137.6
|
)
|
|
(248.1
|
)
|
|
(243.9
|
)
|
|||||||
Net income
|
|
$
|
736.8
|
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
425.1
|
|
|
$
|
403.1
|
|
||
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
5.08
|
|
|
$
|
4.26
|
|
|
$
|
3.37
|
|
|
$
|
2.60
|
|
|
$
|
2.37
|
|
||
Diluted
|
|
$
|
4.99
|
|
|
$
|
4.19
|
|
|
$
|
3.31
|
|
|
$
|
2.56
|
|
|
$
|
2.35
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash dividends declared per common share
|
|
$
|
1.2650
|
|
|
$
|
0.9250
|
|
|
$
|
0.6900
|
|
—
|
|
$
|
0.4825
|
|
—
|
|
$
|
0.3100
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
154.0
|
|
|
$
|
205.8
|
|
|
$
|
144.2
|
|
|
$
|
263.7
|
|
|
$
|
37.6
|
|
||
Working capital
|
|
842.7
|
|
|
993.7
|
|
|
874.2
|
|
|
959.9
|
|
|
903.5
|
|
|||||||
Total assets
|
|
7,999.4
|
|
|
7,167.7
|
|
|
6,966.7
|
|
|
6,958.4
|
|
|
6,755.3
|
|
|||||||
Total debt and capitalized lease obligations(2)
|
|
3,317.3
|
|
|
3,209.1
|
|
|
3,236.7
|
|
|
3,236.6
|
|
|
3,262.9
|
|
|||||||
Total stockholders' equity
|
|
960.3
|
|
|
975.2
|
|
|
985.6
|
|
|
1,047.9
|
|
|
1,095.9
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
$
|
236.3
|
|
|
$
|
86.1
|
|
|
$
|
81.1
|
|
|
$
|
63.5
|
|
|
$
|
90.1
|
|
||
Gross profit as a percentage of Net sales
|
|
16.9
|
%
|
|
16.7
|
%
|
|
16.5
|
%
|
|
17.0
|
%
|
|
16.3
|
%
|
|||||||
Non-GAAP operating income(3)
|
|
$
|
1,368.4
|
|
|
$
|
1,216.6
|
|
|
$
|
1,106.8
|
|
|
$
|
1,048.3
|
|
|
$
|
960.9
|
|
||
Non-GAAP net income(4)
|
|
902.1
|
|
|
794.3
|
|
|
605.9
|
|
|
569.7
|
|
|
503.5
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating activities
|
|
$
|
1,027.2
|
|
|
$
|
905.9
|
|
|
$
|
777.7
|
|
|
|
$
|
604.0
|
|
|
$
|
277.5
|
|
|
Investing activities
|
|
(331.4
|
)
|
|
(86.1
|
)
|
|
(81.1
|
)
|
|
|
(65.9
|
)
|
|
(354.4
|
)
|
||||||
Financing activities
|
|
(749.8
|
)
|
|
(754.8
|
)
|
|
(818.7
|
)
|
|
|
(304.6
|
)
|
|
(226.5
|
)
|
(1)
|
Includes the impact of consolidating five months of CDW UK's financial results.
|
(2)
|
Excludes borrowings of $430 million, $429 million, $498 million, $580 million and $440 million as of December 31, 2019, 2018, 2017, 2016 and 2015, respectively, under our inventory financing agreements. We do not include these borrowings in total debt because we have not in the past incurred, and in the future do not expect to incur, any interest expense or late fees under these agreements.
|
(3)
|
Non-GAAP operating income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated payroll taxes, and acquisition and integration expenses.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(dollars in millions)
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015(1)
|
||||||||||
Operating income
|
|
$
|
1,133.6
|
|
|
$
|
987.3
|
|
|
$
|
866.5
|
|
|
$
|
820.0
|
|
|
$
|
742.0
|
|
Amortization of intangibles
|
|
178.5
|
|
|
182.7
|
|
|
185.1
|
|
|
187.2
|
|
|
173.9
|
|
|||||
Equity-based compensation
|
|
48.5
|
|
|
40.7
|
|
|
43.7
|
|
|
39.2
|
|
|
31.2
|
|
|||||
Other adjustments(2)
|
|
7.8
|
|
|
5.9
|
|
|
11.5
|
|
|
1.9
|
|
|
13.8
|
|
|||||
Non-GAAP operating income
|
|
$
|
1,368.4
|
|
|
$
|
1,216.6
|
|
|
$
|
1,106.8
|
|
|
$
|
1,048.3
|
|
|
$
|
960.9
|
|
(1)
|
Includes the impact of consolidating five months of CDW UK's financial results.
|
(2)
|
Primarily includes payroll taxes on equity-based compensation, consolidation of office space, settlement of litigation matters, and acquisition and integration expenses.
|
(4)
|
Non-GAAP net income excludes, among other things, charges related to acquisition-related intangible asset amortization, equity-based compensation, net loss on extinguishment of long-term debt, acquisition and integration expenses, and the associated tax effects of each. 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.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(dollars in millions)
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015(1)
|
||||||||||
Net income
|
|
$
|
736.8
|
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
$
|
425.1
|
|
|
$
|
403.1
|
|
Amortization of intangibles(2)
|
|
178.5
|
|
|
182.7
|
|
|
185.1
|
|
|
187.2
|
|
|
173.9
|
|
|||||
Equity-based compensation
|
|
48.5
|
|
|
40.7
|
|
|
43.7
|
|
|
39.2
|
|
|
31.2
|
|
|||||
Net loss on extinguishments of long-term debt
|
|
22.1
|
|
|
—
|
|
|
57.4
|
|
|
2.1
|
|
|
24.3
|
|
|||||
Gain on remeasurement of equity investment(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98.1
|
)
|
|||||
Other adjustments(4)
|
|
7.8
|
|
|
5.9
|
|
|
11.5
|
|
|
1.9
|
|
|
33.9
|
|
|||||
Aggregate adjustments for income taxes(5)
|
|
(91.6
|
)
|
|
(78.0
|
)
|
|
(214.9
|
)
|
|
(85.8
|
)
|
|
(64.8
|
)
|
|||||
Non-GAAP net income
|
|
$
|
902.1
|
|
|
$
|
794.3
|
|
|
$
|
605.9
|
|
|
$
|
569.7
|
|
|
$
|
503.5
|
|
(1)
|
Includes the impact of consolidating five months of CDW UK's financial results.
|
(2)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(3)
|
Represents the gain resulting from the remeasurement of the Company's previously held 35% equity investment to fair value upon the completion of the acquisition of CDW UK.
|
(4)
|
Primarily includes expenses related to the consolidation of office space, settlement of litigation matters, the favorable resolution of a local sales tax matter, acquisition and integration expenses and the Company's 35% share of expenses related to certain equity awards for the acquisition of CDW UK.
|
(5)
|
Aggregate adjustments for income taxes consists of the following:
|
|
Year Ended December 31,
|
||||||||||||||||||
(dollars in millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Total Non-GAAP adjustments
|
$
|
256.9
|
|
|
$
|
229.3
|
|
|
$
|
297.7
|
|
|
$
|
230.4
|
|
|
$
|
165.2
|
|
Weighted-average statutory effective rate
|
25.0
|
%
|
|
25.0
|
%
|
|
36.0
|
%
|
|
36.0
|
%
|
|
38.0
|
%
|
|||||
Income tax
|
(64.2
|
)
|
|
(57.3
|
)
|
|
(107.2
|
)
|
|
(82.9
|
)
|
|
(62.8
|
)
|
|||||
Deferred tax adjustment due to law changes
|
0.3
|
|
|
0.5
|
|
|
1.3
|
|
|
(1.5
|
)
|
|
(4.0
|
)
|
|||||
Excess tax benefits from equity-based compensation
|
(24.5
|
)
|
|
(19.1
|
)
|
|
(36.2
|
)
|
|
(1.8
|
)
|
|
—
|
|
|||||
Discrete tax benefit related to CDW Canada's acquisition of Scalar
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
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
|
)
|
|
(0.2
|
)
|
|
2.7
|
|
|
0.4
|
|
|
(1.3
|
)
|
|||||
Total aggregate adjustments for income taxes
|
$
|
(91.6
|
)
|
|
$
|
(78.0
|
)
|
|
$
|
(214.9
|
)
|
|
$
|
(85.8
|
)
|
|
$
|
(64.8
|
)
|
•
|
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 our Corporate and Small Business customers, as their purchases tend to reflect confidence in their business prospects, which are driven by their discrete perceptions of business and general economic conditions. Additionally, changes in trade policy and product constraints from suppliers could have an adverse impact on our business. There is uncertainty regarding whether the rapidly evolving coronavirus could impact our supply chain causing product constraints, which could have an adverse impact on our business. There continues to be substantial uncertainty regarding the impact of the UK's exit from the European Union ("EU") (referred to as "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 has not experienced significant changes in the buying behavior of its customers even with the uncertainty related to the ultimate terms of
|
•
|
Changes in spending policies, budget priorities and funding levels are a key factor influencing the purchasing levels of government, healthcare and education customers.
|
•
|
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 and managed services.
|
|
Year Ended December 31,
|
||||||||||
(dollars in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
18,032.4
|
|
|
$
|
16,240.5
|
|
|
$
|
14,832.9
|
|
Gross profit
|
3,039.9
|
|
|
2,706.9
|
|
|
2,450.2
|
|
|||
Operating income
|
1,133.6
|
|
|
987.3
|
|
|
866.5
|
|
|||
Net income
|
736.8
|
|
|
643.0
|
|
|
523.1
|
|
|||
Non-GAAP operating income
|
1,368.4
|
|
|
1,216.6
|
|
|
1,106.8
|
|
|||
Non-GAAP net income
|
902.1
|
|
|
794.3
|
|
|
605.9
|
|
|||
Average daily sales(1)
|
71.0
|
|
|
63.9
|
|
|
58.4
|
|
|||
Net debt(2)
|
3,163.3
|
|
|
3,002.8
|
|
|
3,091.3
|
|
|||
Cash conversion cycle (in days)(3)
|
18
|
|
|
19
|
|
|
19
|
|
(1)
|
There were 254 selling days for each of the years ended December 31, 2019, 2018 and 2017.
|
(2)
|
Defined as Total debt minus Cash and cash equivalents.
|
(3)
|
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.
|
|
|
Year Ended December 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
|
Dollars in
Millions
|
|
Percentage of
Net Sales
|
||||||
Net sales
|
|
$
|
18,032.4
|
|
|
100.0
|
%
|
|
$
|
16,240.5
|
|
|
100.0
|
%
|
Cost of sales
|
|
14,992.5
|
|
|
83.1
|
|
|
13,533.6
|
|
|
83.3
|
|
||
Gross profit
|
|
3,039.9
|
|
|
16.9
|
|
|
2,706.9
|
|
|
16.7
|
|
||
Selling and administrative expenses
|
|
1,713.1
|
|
|
9.5
|
|
|
1,537.1
|
|
|
9.5
|
|
||
Advertising expense
|
|
193.2
|
|
|
1.1
|
|
|
182.5
|
|
|
1.1
|
|
||
Operating income
|
|
1,133.6
|
|
|
6.3
|
|
|
987.3
|
|
|
6.1
|
|
||
Interest expense, net
|
|
(159.4
|
)
|
|
(0.9
|
)
|
|
(148.6
|
)
|
|
(0.9
|
)
|
||
Other (expense) income, net
|
|
(24.5
|
)
|
|
(0.1
|
)
|
|
1.8
|
|
|
—
|
|
||
Income before income taxes
|
|
949.7
|
|
|
5.3
|
|
|
840.5
|
|
|
5.2
|
|
||
Income tax expense
|
|
(212.9
|
)
|
|
(1.2
|
)
|
|
(197.5
|
)
|
|
(1.2
|
)
|
||
Net income
|
|
$
|
736.8
|
|
|
4.1
|
%
|
|
$
|
643.0
|
|
|
4.0
|
%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2019
|
|
2018
|
|
|
|
|
|||||||||||||
(dollars in millions)
|
|
Net Sales
|
|
Percentage
of Total Net Sales |
|
Net Sales
|
|
Percentage
of Total Net Sales |
|
Dollar
Change |
|
Percent
Change(1) |
|||||||||
Corporate
|
|
$
|
7,499.0
|
|
|
41.6
|
%
|
|
$
|
6,842.5
|
|
|
42.1
|
%
|
|
$
|
656.5
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Small Business
|
|
1,510.3
|
|
|
8.4
|
|
|
1,359.6
|
|
|
8.4
|
|
|
150.7
|
|
|
11.1
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Public:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Government
|
|
2,519.3
|
|
|
14.0
|
|
|
2,097.3
|
|
|
12.9
|
|
|
422.0
|
|
|
20.1
|
|
|||
Education
|
|
2,411.6
|
|
|
13.4
|
|
|
2,327.4
|
|
|
14.3
|
|
|
84.2
|
|
|
3.6
|
|
|||
Healthcare
|
|
1,933.9
|
|
|
10.7
|
|
|
1,730.0
|
|
|
10.7
|
|
|
203.9
|
|
|
11.8
|
|
|||
Total Public
|
|
6,864.8
|
|
|
38.1
|
|
|
6,154.7
|
|
|
37.9
|
|
|
710.1
|
|
|
11.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other
|
|
2,158.3
|
|
|
12.0
|
|
|
1,883.7
|
|
|
11.6
|
|
|
274.6
|
|
|
14.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Net sales
|
|
$
|
18,032.4
|
|
|
100.0
|
%
|
|
$
|
16,240.5
|
|
|
100.0
|
%
|
|
$
|
1,791.9
|
|
|
11.0
|
%
|
(1)
|
There were 254 selling days for each of the years ended December 31, 2019 and 2018.
|
|
|
Year Ended December 31,
|
|
|
|||||||||||||
|
|
2019
|
|
2018
|
|
|
|||||||||||
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Dollars in
Millions
|
|
Operating
Margin
|
|
Percent Change
in Operating Income
|
|||||||
Segments:(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
|
$
|
585.1
|
|
|
7.8
|
%
|
|
$
|
530.4
|
|
|
7.8
|
%
|
|
10.3
|
%
|
Small Business
|
|
107.5
|
|
|
7.1
|
|
|
94.4
|
|
|
6.9
|
|
|
13.9
|
|
||
Public
|
|
475.0
|
|
|
6.9
|
|
|
405.0
|
|
|
6.6
|
|
|
17.3
|
|
||
Other(2)
|
|
101.6
|
|
|
4.7
|
|
|
82.2
|
|
|
4.4
|
|
|
24.8
|
|
||
Headquarters(3)
|
|
(135.6
|
)
|
|
nm*
|
|
|
(124.7
|
)
|
|
nm*
|
|
|
8.7
|
|
||
Total Operating income
|
|
$
|
1,133.6
|
|
|
6.3
|
%
|
|
$
|
987.3
|
|
|
6.1
|
%
|
|
14.8
|
%
|
(1)
|
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.
|
(2)
|
Includes the financial results for our other operating segments, CDW UK and CDW Canada, which do not meet the reportable segment quantitative thresholds.
|
(3)
|
Includes Headquarters' function costs that are not allocated to the segments.
|
|
Year Ended December 31,
|
||||||
(dollars in millions)
|
2019
|
|
2018
|
||||
Operating income
|
$
|
1,133.6
|
|
|
$
|
987.3
|
|
Amortization of intangibles(1)
|
178.5
|
|
|
182.7
|
|
||
Equity-based compensation
|
48.5
|
|
|
40.7
|
|
||
Scalar acquisition and integration expenses
|
3.0
|
|
|
1.5
|
|
||
Other adjustments(2)
|
4.8
|
|
|
4.4
|
|
||
Non-GAAP operating income
|
$
|
1,368.4
|
|
|
$
|
1,216.6
|
|
Non-GAAP operating income margin
|
7.6
|
%
|
|
7.5
|
%
|
(1)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(2)
|
Includes other expenses such as payroll taxes on equity-based compensation.
|
|
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
||||||||||||||||||||
(dollars in millions)
|
|
Income before income taxes
|
|
Income tax expense(1)
|
|
Net income
|
|
Income before income taxes
|
|
Income tax expense(1)
|
|
Net income
|
||||||||||||
GAAP (as reported)
|
|
$
|
949.7
|
|
|
$
|
(212.9
|
)
|
|
$
|
736.8
|
|
|
$
|
840.5
|
|
|
$
|
(197.5
|
)
|
|
$
|
643.0
|
|
Amortization of intangibles(2)
|
|
178.5
|
|
|
(44.6
|
)
|
|
133.9
|
|
|
182.7
|
|
|
(45.7
|
)
|
|
137.0
|
|
||||||
Equity-based compensation
|
|
48.5
|
|
|
(36.6
|
)
|
|
11.9
|
|
|
40.7
|
|
|
(29.2
|
)
|
|
11.5
|
|
||||||
Net loss on extinguishments of long-term debt
|
|
22.1
|
|
|
(5.5
|
)
|
|
16.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Scalar acquisition and integration expenses(3)
|
|
3.0
|
|
|
(3.7
|
)
|
|
(0.7
|
)
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
||||||
Other adjustments(4)
|
|
4.8
|
|
|
(1.2
|
)
|
|
3.6
|
|
|
4.4
|
|
|
(3.1
|
)
|
|
1.3
|
|
||||||
Non-GAAP
|
|
$
|
1,206.6
|
|
|
$
|
(304.5
|
)
|
|
$
|
902.1
|
|
|
$
|
1,069.8
|
|
|
$
|
(275.5
|
)
|
|
$
|
794.3
|
|
(1)
|
Income tax on non-GAAP adjustments includes excess tax benefits associated with equity-based compensation and the impact of global intangible low tax income ("GILTI") due to equity-based compensation and amortization of intangibles.
|
(2)
|
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
|
(3)
|
Includes a $3 million discrete tax benefit related to CDW Canada's acquisition of Scalar.
|
(4)
|
Includes other expenses such as payroll taxes on equity-based compensation.
|
|
|
Year Ended December 31,
|
|
|
|||||||
(dollars in millions)
|
|
2019
|
|
2018
|
|
% Change(1)
|
|||||
Net sales, as reported
|
|
$
|
18,032.4
|
|
|
$
|
16,240.5
|
|
|
11.0
|
%
|
Foreign currency translation(2)
|
|
—
|
|
|
(67.8
|
)
|
|
|
|||
Net sales, on a constant currency basis
|
|
$
|
18,032.4
|
|
|
$
|
16,172.7
|
|
|
11.5
|
%
|
(1)
|
There were 254 selling days for each of the years ended December 31, 2019 and 2018.
|
(2)
|
Represents the effect of translating the prior period 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
|
$0.295
|
|
February 7, 2019
|
|
February 25, 2019
|
|
March 12, 2019
|
$0.295
|
|
May 1, 2019
|
|
May 24, 2019
|
|
June 11, 2019
|
$0.295
|
|
July 31, 2019
|
|
August 26, 2019
|
|
September 10, 2019
|
$0.380
|
|
October 31, 2019
|
|
November 25, 2019
|
|
December 10, 2019
|
$1.265
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||
(dollars in millions)
|
2019
|
|
2018
|
||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
1,027.2
|
|
|
$
|
905.9
|
|
Investing activities
|
(331.4
|
)
|
|
(86.1
|
)
|
||
|
|
|
|
||||
Net change in accounts payable - inventory financing
|
(1.3
|
)
|
|
(67.4
|
)
|
||
Other financing activities
|
(748.5
|
)
|
|
(687.4
|
)
|
||
Financing activities
|
(749.8
|
)
|
|
(754.8
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
2.2
|
|
|
(3.4
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
$
|
(51.8
|
)
|
|
$
|
61.6
|
|
|
Year Ended December 31,
|
||||||||||
(dollars in millions)
|
2019
|
|
2018
|
|
Change
|
||||||
Net income
|
$
|
736.8
|
|
|
$
|
643.0
|
|
|
$
|
93.8
|
|
Adjustments for the impact of non-cash items(1)
|
256.7
|
|
|
261.1
|
|
|
(4.4
|
)
|
|||
Net income adjusted for the impact of non-cash items(2)
|
993.5
|
|
|
904.1
|
|
|
89.4
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable(3)
|
(244.8
|
)
|
|
(365.1
|
)
|
|
120.3
|
|
|||
Merchandise inventory(4)
|
(153.0
|
)
|
|
(46.8
|
)
|
|
(106.2
|
)
|
|||
Accounts payable-trade(5)
|
194.1
|
|
|
271.2
|
|
|
(77.1
|
)
|
|||
Other(6)
|
237.4
|
|
|
142.5
|
|
|
94.9
|
|
|||
Net cash provided by operating activities
|
$
|
1,027.2
|
|
|
$
|
905.9
|
|
|
$
|
121.3
|
|
(1)
|
Includes items such as deferred income taxes, depreciation and amortization, and equity-based compensation expense.
|
(2)
|
The change is due to stronger operating results driven by Net sales and Gross profit growth.
|
(3)
|
The change is due to improved collections performance.
|
(4)
|
The change is due to higher customer-driven and strategic stocking positions and timing of receipts and shipments.
|
(5)
|
The change is due to timing of payments.
|
(6)
|
The change is due to higher contract liabilities, partially offset by an increase in the receivables from vendors attributed to the growth in business.
|
|
December 31,
|
||||
(in days)
|
2019
|
|
2018
|
||
Days of sales outstanding (DSO)(1)
|
57
|
|
|
56
|
|
Days of supply in inventory (DIO)(2)
|
14
|
|
|
13
|
|
Days of purchases outstanding (DPO)(3)
|
(53
|
)
|
|
(50
|
)
|
Cash conversion cycle
|
18
|
|
|
19
|
|
(1)
|
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.
|
(2)
|
Represents the rolling three-month average of the balance of Merchandise inventory at the end of the period divided by average daily Cost of sales for the same three-month period.
|
(3)
|
Represents the rolling three-month average of the combined balance of Accounts payable-trade, excluding cash overdrafts, and Accounts payable-inventory financing at the end of the period divided by average daily Cost of sales for the same three-month period.
|
|
Payments Due by Period
|
||||||||||||||||||
(dollars in millions)
|
Total
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
2025 & Thereafter
|
||||||||||
Term Loan(1)
|
$
|
1,777.5
|
|
|
$
|
66.6
|
|
|
$
|
131.3
|
|
|
$
|
129.3
|
|
|
$
|
1,450.3
|
|
Revolving Loan(1)
|
58.7
|
|
|
2.6
|
|
|
56.1
|
|
|
—
|
|
|
—
|
|
|||||
CDW UK Term Loan(1)
|
63.1
|
|
|
7.9
|
|
|
55.2
|
|
|
—
|
|
|
—
|
|
|||||
Senior Notes due 2024(2)
|
733.1
|
|
|
31.6
|
|
|
63.3
|
|
|
638.2
|
|
|
—
|
|
|||||
Senior Notes due 2025(2)
|
780.0
|
|
|
30.0
|
|
|
60.0
|
|
|
60.0
|
|
|
630.0
|
|
|||||
Senior Notes due 2028(2)
|
817.2
|
|
|
25.9
|
|
|
51.0
|
|
|
51.0
|
|
|
689.3
|
|
|||||
Operating leases(3)
|
277.3
|
|
|
32.2
|
|
|
50.9
|
|
|
37.6
|
|
|
156.6
|
|
|||||
Total
|
$
|
4,506.9
|
|
|
$
|
196.8
|
|
|
$
|
467.8
|
|
|
$
|
916.1
|
|
|
$
|
2,926.2
|
|
(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, 2019. 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)
|
For additional information, see Note 11 (Leases) to the accompanying Consolidated Financial Statements.
|
|
Page
|
|
Revenue recognition
|
Description of the Matter
|
As described in Note 1 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of promised products or services to customers. The Company applies judgment in determining whether it is the principal and reports revenue on a gross basis, or agent and reports revenue on a net basis. The Company also sells some of its products and services as part of bundled contract arrangements containing multiple performance obligations.
Significant judgment may be required when determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together. For each distinct performance obligation, judgment is required to determine the relative standalone selling price to allocate the transaction price, such as using an expected cost plus margin approach.
Auditing the Company's contracts with customers was challenging given the significant audit effort required to analyze the Company's various products, services and contract arrangements. For example, certain customer contracts contain multiple parties and there can be subjective judgment in assessing the Company's role as principal or agent in the contract arrangement. For certain other customer contracts, there can be judgment in the identification of the distinct performance obligations along with the determination of the associated relative standalone selling prices.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding of the revenue process, evaluated the design and tested the operating effectiveness of the Company's internal controls over the relevant terms of the customer contracts, including the determination of principal versus agent, the identification of distinct performance obligations and the determination of the relative standalone selling price for separate performance obligations.
To test revenue recognition, our audit procedures included among others, examination of executed customer contracts for a sample of sales transactions, and evaluating the Company's determination of principal versus agent, identifying products and services in the contract and assessing separate distinct performance obligations. To test management's determination of relative standalone selling price for separate performance obligations, we performed audit procedures that included, among others, assessing the appropriateness of the methodology applied, testing the mathematical accuracy of the underlying data and calculations and inspecting the underlying data information on a sample basis.
|
/s/ Ernst & Young LLP
|
We have served as the Company's auditor since 2011.
|
Chicago, Illinois
|
February 28, 2020
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except per share amounts)
|
|||||||
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
154.0
|
|
|
$
|
205.8
|
|
Accounts receivable, net of allowance for doubtful accounts of $7.9 and $7.0, respectively
|
3,002.2
|
|
|
2,671.2
|
|
||
Merchandise inventory
|
611.2
|
|
|
454.3
|
|
||
Miscellaneous receivables
|
395.1
|
|
|
316.4
|
|
||
Prepaid expenses and other
|
171.6
|
|
|
149.1
|
|
||
Total current assets
|
4,334.1
|
|
|
3,796.8
|
|
||
Operating lease right-of-use assets
|
131.8
|
|
|
—
|
|
||
Property and equipment, net
|
363.1
|
|
|
156.1
|
|
||
Goodwill
|
2,553.0
|
|
|
2,462.8
|
|
||
Other intangible assets, net
|
594.1
|
|
|
712.2
|
|
||
Other assets
|
23.3
|
|
|
39.8
|
|
||
Total Assets
|
$
|
7,999.4
|
|
|
$
|
7,167.7
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable-trade
|
$
|
1,835.0
|
|
|
$
|
1,577.1
|
|
Accounts payable-inventory financing
|
429.9
|
|
|
429.3
|
|
||
Current maturities of long-term debt
|
34.1
|
|
|
25.3
|
|
||
Contract liabilities
|
252.2
|
|
|
178.3
|
|
||
Accrued expenses and other current liabilities:
|
|
|
|
||||
Compensation
|
212.3
|
|
|
186.4
|
|
||
Advertising
|
147.9
|
|
|
119.2
|
|
||
Sales and income taxes
|
88.6
|
|
|
55.5
|
|
||
Other
|
491.4
|
|
|
232.0
|
|
||
Total current liabilities
|
3,491.4
|
|
|
2,803.1
|
|
||
Long-term liabilities:
|
|
|
|
||||
Debt
|
3,283.2
|
|
|
3,183.3
|
|
||
Deferred income taxes
|
62.4
|
|
|
141.9
|
|
||
Operating lease liabilities
|
131.1
|
|
|
—
|
|
||
Other liabilities
|
71.0
|
|
|
64.2
|
|
||
Total long-term liabilities
|
3,547.7
|
|
|
3,389.4
|
|
||
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; 143.0 and 147.7 shares outstanding, respectively
|
1.4
|
|
|
1.5
|
|
||
Paid-in capital
|
3,095.3
|
|
|
2,996.9
|
|
||
Accumulated deficit
|
(2,018.6
|
)
|
|
(1,892.6
|
)
|
||
Accumulated other comprehensive loss
|
(117.8
|
)
|
|
(130.6
|
)
|
||
Total stockholders' equity
|
960.3
|
|
|
975.2
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
7,999.4
|
|
|
$
|
7,167.7
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, except per share amounts)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
18,032.4
|
|
|
$
|
16,240.5
|
|
|
$
|
14,832.9
|
|
Cost of sales
|
14,992.5
|
|
|
13,533.6
|
|
|
12,382.7
|
|
|||
Gross profit
|
3,039.9
|
|
|
2,706.9
|
|
|
2,450.2
|
|
|||
Selling and administrative expenses
|
1,713.1
|
|
|
1,537.1
|
|
|
1,410.0
|
|
|||
Advertising expense
|
193.2
|
|
|
182.5
|
|
|
173.7
|
|
|||
Operating income
|
1,133.6
|
|
|
987.3
|
|
|
866.5
|
|
|||
Interest expense, net
|
(159.4
|
)
|
|
(148.6
|
)
|
|
(150.5
|
)
|
|||
Other (expense) income, net
|
(24.5
|
)
|
|
1.8
|
|
|
(55.3
|
)
|
|||
Income before income taxes
|
949.7
|
|
|
840.5
|
|
|
660.7
|
|
|||
Income tax expense
|
(212.9
|
)
|
|
(197.5
|
)
|
|
(137.6
|
)
|
|||
Net income
|
$
|
736.8
|
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
|
|
|
|
|
|
||||||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.08
|
|
|
$
|
4.26
|
|
|
$
|
3.37
|
|
Diluted
|
$
|
4.99
|
|
|
$
|
4.19
|
|
|
$
|
3.31
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
145.1
|
|
|
150.9
|
|
|
155.4
|
|
|||
Diluted
|
147.8
|
|
|
153.6
|
|
|
158.2
|
|
|||
|
|
|
|
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in millions)
|
||||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
|
$
|
736.8
|
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Unrealized loss from hedge accounting, net of tax
|
|
(11.3
|
)
|
|
(5.9
|
)
|
|
(0.1
|
)
|
|||
Reclassification of hedge accounting gain to net income, net of tax
|
|
1.7
|
|
|
3.9
|
|
|
0.3
|
|
|||
Foreign currency translation, net of tax
|
|
22.4
|
|
|
(32.7
|
)
|
|
43.7
|
|
|||
Other comprehensive income (loss):
|
|
12.8
|
|
|
(34.7
|
)
|
|
43.9
|
|
|||
Comprehensive income
|
|
$
|
749.6
|
|
|
$
|
608.3
|
|
|
$
|
567.0
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(dollars in millions)
|
||||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive Loss
|
|
Total
Stockholders' Equity |
||||||||||||||
Balance as of December 31, 2016
|
|
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
|
)
|
||||||
Dividend payments ($0.690 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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 loss from hedge accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||||
Realized gain from hedge accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||
Balance as of December 31, 2017
|
|
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
|
)
|
||||||
Dividend payments ($0.925 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.9
|
)
|
|
(5.9
|
)
|
||||||
Realized gain from hedge accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|
3.9
|
|
||||||
Balance as of December 31, 2018
|
|
147.7
|
|
|
$
|
1.5
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
2,996.9
|
|
|
$
|
(1,892.6
|
)
|
|
$
|
(130.6
|
)
|
|
$
|
975.2
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
736.8
|
|
|
—
|
|
|
736.8
|
|
||||||
Equity-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47.7
|
|
|
—
|
|
|
—
|
|
|
47.7
|
|
||||||
Stock option exercises
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34.9
|
|
|
—
|
|
|
—
|
|
|
34.9
|
|
||||||
Coworker stock purchase plan
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.9
|
|
|
—
|
|
|
—
|
|
|
14.9
|
|
||||||
Repurchases of common stock
|
|
(6.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(657.1
|
)
|
|
—
|
|
|
(657.2
|
)
|
||||||
Dividend payments ($1.265 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
(184.3
|
)
|
|
—
|
|
|
(183.4
|
)
|
||||||
Incentive compensation plan stock withheld for taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.4
|
)
|
|
—
|
|
|
(21.4
|
)
|
||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.4
|
|
|
22.4
|
|
||||||
Unrealized loss from hedge accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.3
|
)
|
|
(11.3
|
)
|
||||||
Realized gain from hedge accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
||||||
Balance as of December 31, 2019
|
|
143.0
|
|
|
$
|
1.4
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
3,095.3
|
|
|
$
|
(2,018.6
|
)
|
|
$
|
(117.8
|
)
|
|
$
|
960.3
|
|
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
736.8
|
|
|
$
|
643.0
|
|
|
$
|
523.1
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
267.1
|
|
|
265.6
|
|
|
260.9
|
|
|||
Equity-based compensation expense
|
48.5
|
|
|
40.7
|
|
|
43.7
|
|
|||
Deferred income taxes
|
(87.9
|
)
|
|
(56.1
|
)
|
|
(172.7
|
)
|
|||
Other
|
29.0
|
|
|
10.9
|
|
|
62.4
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(244.8
|
)
|
|
(365.1
|
)
|
|
(136.8
|
)
|
|||
Merchandise inventory
|
(153.0
|
)
|
|
(46.8
|
)
|
|
16.9
|
|
|||
Other assets
|
(10.9
|
)
|
|
25.2
|
|
|
(117.8
|
)
|
|||
Accounts payable-trade
|
194.1
|
|
|
271.2
|
|
|
231.5
|
|
|||
Other liabilities
|
248.3
|
|
|
117.3
|
|
|
66.5
|
|
|||
Net cash provided by operating activities
|
1,027.2
|
|
|
905.9
|
|
|
777.7
|
|
|||
Cash flows used in investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(236.3
|
)
|
|
(86.1
|
)
|
|
(81.1
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
(95.1
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(331.4
|
)
|
|
(86.1
|
)
|
|
(81.1
|
)
|
|||
Cash flows used in financing activities:
|
|
|
|
|
|
||||||
Proceeds from borrowings under revolving credit facilities
|
2,445.5
|
|
|
686.7
|
|
|
1,560.7
|
|
|||
Repayments of borrowings under revolving credit facilities
|
(2,394.5
|
)
|
|
(686.7
|
)
|
|
(1,560.7
|
)
|
|||
Repayments of long-term debt
|
(23.5
|
)
|
|
(21.6
|
)
|
|
(14.9
|
)
|
|||
Proceeds from issuance of long-term debt
|
600.0
|
|
|
—
|
|
|
2,083.0
|
|
|||
Payments to extinguish long-term debt
|
(539.0
|
)
|
|
—
|
|
|
(2,121.3
|
)
|
|||
Net change in accounts payable-inventory financing
|
(1.3
|
)
|
|
(67.4
|
)
|
|
(84.0
|
)
|
|||
Repurchases of common stock
|
(657.2
|
)
|
|
(522.3
|
)
|
|
(534.0
|
)
|
|||
Payment of incentive compensation plan withholding taxes
|
(21.4
|
)
|
|
(33.9
|
)
|
|
(49.6
|
)
|
|||
Dividend payments
|
(183.4
|
)
|
|
(139.4
|
)
|
|
(106.9
|
)
|
|||
Other
|
25.0
|
|
|
29.8
|
|
|
9.0
|
|
|||
Net cash used in financing activities
|
(749.8
|
)
|
|
(754.8
|
)
|
|
(818.7
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
2.2
|
|
|
(3.4
|
)
|
|
2.6
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(51.8
|
)
|
|
61.6
|
|
|
(119.5
|
)
|
|||
Cash and cash equivalents – beginning of period
|
205.8
|
|
|
144.2
|
|
|
263.7
|
|
|||
Cash and cash equivalents – end of period
|
$
|
154.0
|
|
|
$
|
205.8
|
|
|
$
|
144.2
|
|
Supplementary disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
(154.2
|
)
|
|
$
|
(148.8
|
)
|
|
$
|
(148.5
|
)
|
Taxes paid, net
|
$
|
(272.2
|
)
|
|
$
|
(261.2
|
)
|
|
$
|
(275.7
|
)
|
1.
|
Description of Business and Summary of Significant Accounting Policies
|
2.
|
Recent Accounting Pronouncements
|
|
|
Acquisition-Date Fair Value
|
||
Net assets acquired
|
|
$
|
5.7
|
|
Identified intangible assets(1)
|
|
20.3
|
|
|
Goodwill(2)
|
|
62.0
|
|
|
Total purchase price
|
|
$
|
88.0
|
|
(1)
|
Net of a related deferred tax liability of $7 million.
|
(2)
|
Goodwill in the amount of $62 million was recognized in connection with the acquisition of Scalar, primarily attributed to cross selling opportunities and overall corporate synergies. The full amount of goodwill recognized is not deductible for income tax purposes in Canada.
|
|
|
|
December 31,
|
||||||
|
Useful Lives (Years)
|
|
2019
|
|
2018
|
||||
Revenue generating assets
|
Up to 1
|
|
$
|
212.0
|
|
|
$
|
—
|
|
Building and leasehold improvements
|
5 - 25
|
|
134.2
|
|
|
129.1
|
|
||
Computer and data processing equipment
|
3 - 5
|
|
132.0
|
|
|
105.4
|
|
||
Machinery and equipment
|
5 - 10
|
|
45.4
|
|
|
44.1
|
|
||
Land
|
-*
|
|
27.7
|
|
|
27.7
|
|
||
Computer software
|
3 - 5
|
|
25.1
|
|
|
22.2
|
|
||
Construction in progress
|
-*
|
|
23.3
|
|
|
24.5
|
|
||
Furniture and fixtures
|
5 - 10
|
|
20.5
|
|
|
18.9
|
|
||
Property and equipment, gross
|
|
|
620.2
|
|
|
371.9
|
|
||
Less: accumulated depreciation
|
|
|
(257.1
|
)
|
|
(215.8
|
)
|
||
Property and equipment, net
|
|
|
$
|
363.1
|
|
|
$
|
156.1
|
|
|
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other(1)
|
|
Consolidated
|
||||||||||
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
|
|
|||||
Scalar acquisition(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62.0
|
|
|
62.0
|
|
|||||
Other acquisition(4)
|
|
16.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.7
|
|
|
11.7
|
|
|||||
Balances as of December 31, 2019(2)
|
|
$
|
1,090.6
|
|
|
$
|
185.9
|
|
|
$
|
929.6
|
|
|
$
|
346.9
|
|
|
$
|
2,553.0
|
|
(1)
|
Other is comprised of CDW UK and CDW 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.
|
(3)
|
For additional information regarding the addition to goodwill resulting from the Company's acquisition, see Note 3 (Acquisition).
|
(4)
|
The Company acquired Aptris, Inc. on October 1, 2019.
|
December 31, 2019
|
|
Useful Lives (Years)
|
|
Gross Carrying Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
||||||
Customer relationships and contracts
|
|
3 - 14
|
|
$
|
2,111.2
|
|
|
$
|
(1,786.4
|
)
|
|
$
|
324.8
|
|
Trade name
|
|
generally 20
|
|
422.8
|
|
|
(259.0
|
)
|
|
163.8
|
|
|||
Internally developed software
|
|
3 - 5
|
|
263.5
|
|
|
(160.0
|
)
|
|
103.5
|
|
|||
Other
|
|
1 - 10
|
|
5.5
|
|
|
(3.5
|
)
|
|
2.0
|
|
|||
Total
|
|
|
|
$
|
2,803.0
|
|
|
$
|
(2,208.9
|
)
|
|
$
|
594.1
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
||||||
Customer relationships and contracts
|
|
3 - 14
|
|
$
|
2,071.0
|
|
|
$
|
(1,625.5
|
)
|
|
$
|
445.5
|
|
Trade name
|
|
generally 20
|
|
422.1
|
|
|
(237.3
|
)
|
|
184.8
|
|
|||
Internally developed software
|
|
3 - 5
|
|
205.8
|
|
|
(125.4
|
)
|
|
80.4
|
|
|||
Other
|
|
1 - 10
|
|
3.7
|
|
|
(2.2
|
)
|
|
1.5
|
|
|||
Total
|
|
|
|
$
|
2,702.6
|
|
|
$
|
(1,990.4
|
)
|
|
$
|
712.2
|
|
Years ending December 31,
|
|
Estimated Future Amortization Expense
|
||
2020
|
|
$
|
206.4
|
|
2021
|
|
110.4
|
|
|
2022
|
|
62.8
|
|
|
2023
|
|
41.3
|
|
|
2024
|
|
41.1
|
|
|
Thereafter
|
|
132.1
|
|
|
Total future amortization expense
|
|
$
|
594.1
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Revolving Loan inventory financing agreement(1)
|
|
$
|
379.1
|
|
|
$
|
406.3
|
|
Other inventory financing agreements
|
|
50.8
|
|
|
23.0
|
|
||
Accounts payable-inventory financing
|
|
$
|
429.9
|
|
|
$
|
429.3
|
|
(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.
|
|
|
Within 1 Year
|
|
Years 1-2
|
|
Years 2-3
|
|
Thereafter
|
||||||||
Remaining performance obligations
|
|
$
|
43.1
|
|
|
$
|
21.3
|
|
|
$
|
8.2
|
|
|
$
|
1.0
|
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||
Notional Value
|
|
Effective Date
|
|
Maturity Date
|
|
Fair Value
|
|
Fair Value
|
||||||
$
|
1,400.0
|
|
|
December 31, 2018
|
|
December 31, 2020
|
|
$
|
—
|
|
|
$
|
10.6
|
|
1,400.0
|
|
|
December 31, 2020
|
|
December 31, 2022
|
|
0.9
|
|
|
1.5
|
|
|||
|
|
|
|
|
|
$
|
0.9
|
|
|
$
|
12.1
|
|
|
|
|
|
As of December 31, 2019
|
|
As of December 31, 2018
|
||||||||||
|
|
Maturity Date
|
|
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
|
|
5.00
|
%
|
|
51.0
|
|
|
—
|
%
|
|
—
|
|
||
Total credit facilities
|
|
|
|
|
|
51.0
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Term Loans
|
|
|
|
|
|
|
|
|
|
|
||||||
CDW UK term loan(1)
|
|
August 2021
|
|
2.19
|
%
|
|
61.0
|
|
|
2.29
|
%
|
|
65.0
|
|
||
Senior secured term loan facility
|
|
October 2026
|
|
3.55
|
%
|
|
1,438.3
|
|
|
4.10
|
%
|
|
1,453.2
|
|
||
Total term loans
|
|
|
|
|
|
1,499.3
|
|
|
|
|
1,518.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Unsecured Senior Notes
|
|
|
|
|
|
|
|
|
|
|
||||||
Senior notes due 2023 ("2023 Senior Notes")
|
|
September 2023
|
|
—
|
%
|
|
—
|
|
|
5.00
|
%
|
|
525.0
|
|
||
Senior notes due 2024 ("2024 Senior Notes")
|
|
December 2024
|
|
5.50
|
%
|
|
575.0
|
|
|
5.50
|
%
|
|
575.0
|
|
||
Senior notes due 2025 ("2025 Senior Notes")
|
|
September 2025
|
|
5.00
|
%
|
|
600.0
|
|
|
5.00
|
%
|
|
600.0
|
|
||
Senior notes due 2028 ("2028 Senior Notes")
|
|
April 2028
|
|
4.25
|
%
|
|
600.0
|
|
|
—
|
%
|
|
—
|
|
||
Total unsecured senior notes
|
|
|
|
|
|
1,775.0
|
|
|
|
|
1,700.0
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Other long-term obligations
|
|
|
|
|
|
12.6
|
|
|
|
|
8.3
|
|
||||
Unamortized deferred financing fees
|
|
|
|
|
|
(20.6
|
)
|
|
|
|
(17.9
|
)
|
||||
Current maturities of long-term debt
|
|
|
|
|
|
(34.1
|
)
|
|
|
|
(25.3
|
)
|
||||
Total long-term debt
|
|
|
|
|
|
$
|
3,283.2
|
|
|
|
|
$
|
3,183.3
|
|
(1)
|
British pound-denominated debt facilities.
|
Years ending December 31,
|
|
Debt Maturities
|
||
2020
|
|
$
|
34.1
|
|
2021
|
|
69.3
|
|
|
2022
|
|
65.9
|
|
|
2023
|
|
14.9
|
|
|
2024
|
|
589.9
|
|
|
Thereafter
|
|
2,563.8
|
|
|
Total debt maturities
|
|
$
|
3,337.9
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
|
$
|
854.1
|
|
|
$
|
762.3
|
|
|
$
|
608.3
|
|
Foreign
|
|
95.6
|
|
|
78.2
|
|
|
52.4
|
|
|||
Total
|
|
$
|
949.7
|
|
|
$
|
840.5
|
|
|
$
|
660.7
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
224.7
|
|
|
$
|
192.6
|
|
|
$
|
258.9
|
|
State
|
|
56.1
|
|
|
43.3
|
|
|
29.8
|
|
|||
Foreign
|
|
20.0
|
|
|
17.7
|
|
|
21.3
|
|
|||
Total current
|
|
300.8
|
|
|
253.6
|
|
|
310.0
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Domestic
|
|
(83.0
|
)
|
|
(52.7
|
)
|
|
(167.6
|
)
|
|||
Foreign
|
|
(4.9
|
)
|
|
(3.4
|
)
|
|
(4.8
|
)
|
|||
Total deferred
|
|
(87.9
|
)
|
|
(56.1
|
)
|
|
(172.4
|
)
|
|||
Income tax expense
|
|
$
|
212.9
|
|
|
$
|
197.5
|
|
|
$
|
137.6
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
Statutory federal income tax rate
|
|
$
|
199.4
|
|
|
21.0
|
%
|
|
$
|
176.5
|
|
|
21.0
|
%
|
|
$
|
231.1
|
|
|
35.0
|
%
|
State taxes, net of federal effect
|
|
35.4
|
|
|
3.7
|
|
|
31.1
|
|
|
3.7
|
|
|
18.3
|
|
|
2.8
|
|
|||
Excess tax benefit of equity awards
|
|
(26.8
|
)
|
|
(2.8
|
)
|
|
(19.7
|
)
|
|
(2.3
|
)
|
|
(36.2
|
)
|
|
(5.5
|
)
|
|||
Effect of rates different than statutory
|
|
0.8
|
|
|
0.1
|
|
|
0.6
|
|
|
0.1
|
|
|
(6.3
|
)
|
|
(1.0
|
)
|
|||
Tax on foreign earnings
|
|
2.1
|
|
|
0.2
|
|
|
2.8
|
|
|
0.3
|
|
|
1.0
|
|
|
0.1
|
|
|||
Effect of TCJA on deferred taxes and repatriation tax
|
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
|
(0.2
|
)
|
|
(75.5
|
)
|
|
(11.4
|
)
|
|||
Other
|
|
2.0
|
|
|
0.2
|
|
|
8.1
|
|
|
0.9
|
|
|
5.2
|
|
|
0.8
|
|
|||
Effective tax rate
|
|
$
|
212.9
|
|
|
22.4
|
%
|
|
$
|
197.5
|
|
|
23.5
|
%
|
|
$
|
137.6
|
|
|
20.8
|
%
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Contract liabilities
|
|
$
|
40.7
|
|
|
$
|
—
|
|
Equity compensation plans
|
|
21.1
|
|
|
17.7
|
|
||
Net operating loss and credit carryforwards, net
|
|
20.1
|
|
|
23.8
|
|
||
Payroll and benefits
|
|
9.6
|
|
|
9.3
|
|
||
Rent
|
|
7.3
|
|
|
7.5
|
|
||
Accounts receivable
|
|
7.0
|
|
|
6.5
|
|
||
Other
|
|
14.1
|
|
|
10.0
|
|
||
Total deferred tax assets
|
|
119.9
|
|
|
74.8
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Acquisition-related intangibles
|
|
112.2
|
|
|
148.6
|
|
||
Property and equipment
|
|
27.0
|
|
|
20.0
|
|
||
International investments
|
|
19.2
|
|
|
19.2
|
|
||
Other
|
|
3.3
|
|
|
11.7
|
|
||
Total deferred tax liabilities
|
|
161.7
|
|
|
199.5
|
|
||
Deferred tax asset valuation allowance
|
|
16.8
|
|
|
17.2
|
|
||
Net deferred tax liabilities
|
|
$
|
58.6
|
|
|
$
|
141.9
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance as of January 1
|
|
$
|
15.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions for tax positions related to current year
|
|
2.6
|
|
|
15.1
|
|
|
—
|
|
|||
Balance as of December 31
|
|
$
|
17.7
|
|
|
$
|
15.1
|
|
|
$
|
—
|
|
|
|
Classification on the Consolidated Balance Sheets
|
|
December 31, 2019
|
||
Assets
|
|
|
|
|
||
|
|
Operating lease right-of-use assets
|
|
$
|
131.8
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Current
|
|
Accrued expenses and other current liabilities - Other
|
|
$
|
30.1
|
|
Long-term
|
|
Long-term operating lease liabilities
|
|
131.1
|
|
|
Total lease liabilities
|
|
|
|
$
|
161.2
|
|
|
|
|
|
|
||
Lease term and discount rate
|
|
December 31, 2019
|
||||
Weighted average remaining lease term (years)
|
|
9.7
|
|
|||
Weighted average discount rate
|
|
4.78
|
%
|
Financial statement line item
|
|
Twelve Months Ended December 31, 2019
|
||
Cost of sales
|
|
$
|
62.7
|
|
Selling and administrative expenses
|
|
30.6
|
|
|
Total lease cost
|
|
$
|
93.3
|
|
|
|
December 31, 2019
|
||
2020
|
|
$
|
32.2
|
|
2021
|
|
27.9
|
|
|
2022
|
|
23.0
|
|
|
2023
|
|
19.9
|
|
|
2024
|
|
17.7
|
|
|
Thereafter
|
|
156.6
|
|
|
Total lease payments
|
|
$
|
277.3
|
|
Less: Interest
|
|
(80.9
|
)
|
|
Less: Lease incentives (1)
|
|
(35.2
|
)
|
|
Present value of lease liabilities
|
|
$
|
161.2
|
|
|
|
Twelve Months Ended December 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
88.0
|
|
Right-of-use assets obtained in exchange for lease obligations
|
|
|
||
Operating leases
|
|
$
|
110.2
|
|
|
|
December 31, 2018
|
||
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
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Equity-based compensation expense
|
|
$
|
48.5
|
|
|
$
|
40.7
|
|
|
$
|
43.7
|
|
Income tax benefit(1)
|
|
(9.8
|
)
|
|
(9.9
|
)
|
|
(15.3
|
)
|
|||
Equity-based compensation expense, net of tax
|
|
$
|
38.7
|
|
|
$
|
30.8
|
|
|
$
|
28.4
|
|
(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,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Grant date fair value
|
|
$
|
19.26
|
|
|
$
|
14.80
|
|
|
$
|
12.27
|
|
Volatility (1)
|
|
20.00
|
%
|
|
20.00
|
%
|
|
22.00
|
%
|
|||
Risk-free rate (2)
|
|
2.53
|
%
|
|
2.75
|
%
|
|
2.08
|
%
|
|||
Expected dividend yield
|
|
1.23
|
%
|
|
1.14
|
%
|
|
1.09
|
%
|
|||
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
|
|||||
Outstanding at January 1, 2019
|
|
4,480,772
|
|
|
$
|
46.82
|
|
|
|
|
|
||
Granted
|
|
786,601
|
|
|
96.24
|
|
|
|
|
|
|||
Forfeited/Expired
|
|
(63,947
|
)
|
|
74.56
|
|
|
|
|
|
|||
Exercised(1)
|
|
(1,065,184
|
)
|
|
32.80
|
|
|
|
|
|
|||
Outstanding at December 31, 2019
|
|
4,138,242
|
|
|
$
|
59.39
|
|
|
6.17
|
|
$
|
345.3
|
|
|
|
|
|
|
|
|
|
|
|||||
Vested and exercisable at December 31, 2019
|
|
2,364,405
|
|
|
$
|
43.61
|
|
|
4.99
|
|
$
|
234.6
|
|
Expected to vest after December 31, 2019
|
|
1,752,687
|
|
|
$
|
80.34
|
|
|
7.72
|
|
$
|
109.5
|
|
(1)
|
The total intrinsic value of stock options exercised during the years ended December 31, 2019, 2018 and 2017 was $83 million, $47 million and $17 million, respectively.
|
|
|
Number of Units
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Non-vested at January 1, 2019
|
|
260,173
|
|
|
$
|
59.56
|
|
Granted (1)
|
|
58,577
|
|
|
103.24
|
|
|
Vested (2)
|
|
(88,097
|
)
|
|
44.62
|
|
|
Forfeited
|
|
(21,275
|
)
|
|
78.52
|
|
|
Non-vested at December 31, 2019
|
|
209,378
|
|
|
$
|
75.56
|
|
(1)
|
The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2019, 2018 and 2017 was $103.24, $73.95 and $58.90, respectively.
|
(2)
|
The aggregate fair value of RSUs that vested during the years ended December 31, 2019, 2018 and 2017 was $4 million, $2 million and $18 million, respectively.
|
|
|
Number of Units
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Non-vested at January 1, 2019
|
|
421,837
|
|
|
$
|
65.85
|
|
Granted (1)
|
|
201,441
|
|
|
101.33
|
|
|
Attainment Adjustment (2)
|
|
129,498
|
|
|
39.92
|
|
|
Vested (3)
|
|
(350,816
|
)
|
|
52.16
|
|
|
Forfeited
|
|
(20,055
|
)
|
|
72.96
|
|
|
Non-vested at December 31, 2019
|
|
381,905
|
|
|
$
|
87.78
|
|
(1)
|
The weighted-average grant date fair value of PSUs granted during the years ended December 31, 2019, 2018 and 2017 was $101.33, $73.74 and $59.00, respectively.
|
(2)
|
During the year ended December 31, 2019, the attainment on PSUs vested at December 31, 2018 was adjusted to reflect actual performance.
|
(3)
|
The aggregate fair value of PSUs that vested during the years ended December 31, 2019, 2018 and 2017 was $18 million, $13 million and $20 million, respectively.
|
|
|
Year Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Basic weighted-average shares outstanding
|
|
145.1
|
|
|
150.9
|
|
|
155.4
|
|
Effect of dilutive securities (1)
|
|
2.7
|
|
|
2.7
|
|
|
2.8
|
|
Diluted weighted-average shares outstanding (2)
|
|
147.8
|
|
|
153.6
|
|
|
158.2
|
|
(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 0.1 million potential common shares excluded from diluted weighted-average shares outstanding for the years ended December 31, 2019, 2018 and 2017, respectively, as their inclusion would have had an anti-dilutive effect.
|
|
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other
|
|
Headquarters
|
|
Total
|
||||||||||||
2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
7,499.0
|
|
|
$
|
1,510.3
|
|
|
$
|
6,864.8
|
|
|
$
|
2,158.3
|
|
|
$
|
—
|
|
|
$
|
18,032.4
|
|
Operating income (loss)
|
|
585.1
|
|
|
107.5
|
|
|
475.0
|
|
|
101.6
|
|
|
(135.6
|
)
|
|
1,133.6
|
|
||||||
Depreciation and amortization expense
|
|
(86.9
|
)
|
|
(22.5
|
)
|
|
(56.3
|
)
|
|
(31.2
|
)
|
|
(70.2
|
)
|
|
(267.1
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
6,842.5
|
|
|
$
|
1,359.6
|
|
|
$
|
6,154.7
|
|
|
$
|
1,883.7
|
|
|
$
|
—
|
|
|
$
|
16,240.5
|
|
Operating income (loss)
|
|
530.4
|
|
|
94.4
|
|
|
405.0
|
|
|
82.2
|
|
|
(124.7
|
)
|
|
987.3
|
|
||||||
Depreciation and amortization expense
|
|
(88.2
|
)
|
|
(22.1
|
)
|
|
(51.2
|
)
|
|
(31.8
|
)
|
|
(72.3
|
)
|
|
(265.6
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
6,172.8
|
|
|
$
|
1,220.5
|
|
|
$
|
5,906.5
|
|
|
$
|
1,533.1
|
|
|
$
|
—
|
|
|
$
|
14,832.9
|
|
Operating income (loss)
|
|
480.9
|
|
|
73.0
|
|
|
367.7
|
|
|
57.1
|
|
|
(112.2
|
)
|
|
866.5
|
|
||||||
Depreciation and amortization expense
|
|
(90.1
|
)
|
|
(22.0
|
)
|
|
(51.5
|
)
|
|
(30.9
|
)
|
|
(66.4
|
)
|
|
(260.9
|
)
|
|
Year Ended December 31, 2019
|
||||||||||||||||||
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other
|
|
Total
|
||||||||||
Geography(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
7,485.7
|
|
|
$
|
1,510.3
|
|
|
$
|
6,864.8
|
|
|
$
|
32.5
|
|
|
$
|
15,893.3
|
|
Rest of World
|
13.3
|
|
|
—
|
|
|
—
|
|
|
2,125.8
|
|
|
2,139.1
|
|
|||||
Total Net sales
|
7,499.0
|
|
|
1,510.3
|
|
|
6,864.8
|
|
|
2,158.3
|
|
|
18,032.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Major Product and Services
|
|
|
|
|
|
|
|
|
|
||||||||||
Hardware
|
5,955.5
|
|
|
1,263.2
|
|
|
5,584.8
|
|
|
1,559.7
|
|
|
14,363.2
|
|
|||||
Software
|
1,079.4
|
|
|
197.5
|
|
|
1,059.4
|
|
|
300.9
|
|
|
2,637.2
|
|
|||||
Services
|
393.8
|
|
|
28.4
|
|
|
199.3
|
|
|
286.1
|
|
|
907.6
|
|
|||||
Other(2)
|
70.3
|
|
|
21.2
|
|
|
21.3
|
|
|
11.6
|
|
|
124.4
|
|
|||||
Total Net sales
|
7,499.0
|
|
|
1,510.3
|
|
|
6,864.8
|
|
|
2,158.3
|
|
|
18,032.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales by Channel
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
7,499.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,499.0
|
|
|||||
Small Business
|
—
|
|
|
1,510.3
|
|
|
—
|
|
|
—
|
|
|
1,510.3
|
|
|||||
Government
|
—
|
|
|
—
|
|
|
2,519.3
|
|
|
—
|
|
|
2,519.3
|
|
|||||
Education
|
—
|
|
|
—
|
|
|
2,411.6
|
|
|
—
|
|
|
2,411.6
|
|
|||||
Healthcare
|
—
|
|
|
—
|
|
|
1,933.9
|
|
|
—
|
|
|
1,933.9
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
2,158.3
|
|
|
2,158.3
|
|
|||||
Total Net sales
|
7,499.0
|
|
|
1,510.3
|
|
|
6,864.8
|
|
|
2,158.3
|
|
|
18,032.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
||||||||||
Transferred at a point in time where CDW is principal
|
6,818.7
|
|
|
1,423.1
|
|
|
6,410.2
|
|
|
1,900.6
|
|
|
16,552.6
|
|
|||||
Transferred at a point in time where CDW is agent
|
446.1
|
|
|
80.0
|
|
|
248.5
|
|
|
59.6
|
|
|
834.2
|
|
|||||
Transferred over time where CDW is principal
|
234.2
|
|
|
7.2
|
|
|
206.1
|
|
|
198.1
|
|
|
645.6
|
|
|||||
Total Net sales
|
$
|
7,499.0
|
|
|
$
|
1,510.3
|
|
|
$
|
6,864.8
|
|
|
$
|
2,158.3
|
|
|
$
|
18,032.4
|
|
(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, 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
|
5,462.1
|
|
|
1,134.6
|
|
|
5,010.4
|
|
|
1,492.0
|
|
|
13,099.1
|
|
|||||
Software
|
976.2
|
|
|
175.8
|
|
|
965.9
|
|
|
214.0
|
|
|
2,331.9
|
|
|||||
Services
|
336.9
|
|
|
28.1
|
|
|
161.8
|
|
|
169.0
|
|
|
695.8
|
|
|||||
Other(2)
|
67.3
|
|
|
21.1
|
|
|
16.6
|
|
|
8.7
|
|
|
113.7
|
|
|||||
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
|
||||||||||||||||||
|
Corporate
|
|
Small Business
|
|
Public
|
|
Other
|
|
Total
|
||||||||||
Geography(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
4,879.7
|
|
|
1,015.9
|
|
|
4,846.4
|
|
|
1,229.8
|
|
|
11,971.8
|
|
|||||
Software
|
910.4
|
|
|
159.7
|
|
|
908.3
|
|
|
167.0
|
|
|
2,145.4
|
|
|||||
Services
|
316.2
|
|
|
24.5
|
|
|
133.6
|
|
|
128.5
|
|
|
602.8
|
|
|||||
Other(2)
|
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)
|
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,
|
|||||||||||||||||||
|
2019
|
|
2018(1)
|
|
2017(1)
|
|||||||||||||||
|
Net Sales
|
|
Percentage
of Total Net Sales |
|
Net Sales
|
|
Percentage
of Total Net Sales |
|
Net Sales
|
|
Percentage
of Total Net Sales |
|||||||||
Notebooks/Mobile Devices
|
$
|
4,631.7
|
|
|
25.7
|
%
|
|
$
|
4,062.2
|
|
|
25.0
|
%
|
|
$
|
3,491.8
|
|
|
23.5
|
%
|
Netcomm Products
|
2,193.4
|
|
|
12.2
|
|
|
2,119.1
|
|
|
13.0
|
|
|
2,021.6
|
|
|
13.6
|
|
|||
Desktops
|
1,598.2
|
|
|
8.9
|
|
|
1,322.2
|
|
|
8.1
|
|
|
1,196.0
|
|
|
8.1
|
|
|||
Video
|
1,272.7
|
|
|
7.1
|
|
|
1,184.3
|
|
|
7.3
|
|
|
1,070.0
|
|
|
7.2
|
|
|||
Enterprise and Data Storage (Including Drives)
|
1,146.0
|
|
|
6.4
|
|
|
1,102.5
|
|
|
6.8
|
|
|
1,070.2
|
|
|
7.2
|
|
|||
Other Hardware
|
3,521.2
|
|
|
19.5
|
|
|
3,308.8
|
|
|
20.4
|
|
|
3,122.2
|
|
|
21.0
|
|
|||
Total Hardware
|
14,363.2
|
|
|
79.8
|
|
|
13,099.1
|
|
|
80.6
|
|
|
11,971.8
|
|
|
80.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Software(2)
|
2,637.2
|
|
|
14.6
|
|
|
2,331.9
|
|
|
14.4
|
|
|
2,145.4
|
|
|
14.5
|
|
|||
Services(2)
|
907.6
|
|
|
5.0
|
|
|
695.8
|
|
|
4.3
|
|
|
602.8
|
|
|
4.1
|
|
|||
Other(3)
|
124.4
|
|
|
0.6
|
|
|
113.7
|
|
|
0.7
|
|
|
112.9
|
|
|
0.8
|
|
|||
Total Net sales
|
$
|
18,032.4
|
|
|
100.0
|
%
|
|
$
|
16,240.5
|
|
|
100.0
|
%
|
|
$
|
14,832.9
|
|
|
100.0
|
%
|
(1)
|
Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2019.
|
(2)
|
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.
|
(3)
|
Includes items such as delivery charges to customers.
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||||||||||
December 31, 2019
|
|||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
73.9
|
|
|
$
|
—
|
|
|
$
|
98.9
|
|
|
$
|
—
|
|
|
$
|
(18.8
|
)
|
|
$
|
154.0
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
2,517.0
|
|
|
485.2
|
|
|
—
|
|
|
—
|
|
|
3,002.2
|
|
|||||||
Merchandise inventory
|
—
|
|
|
—
|
|
|
524.9
|
|
|
86.3
|
|
|
—
|
|
|
—
|
|
|
611.2
|
|
|||||||
Miscellaneous receivables
|
—
|
|
|
97.9
|
|
|
265.9
|
|
|
31.3
|
|
|
—
|
|
|
—
|
|
|
395.1
|
|
|||||||
Prepaid expenses and other
|
—
|
|
|
22.1
|
|
|
99.9
|
|
|
49.6
|
|
|
—
|
|
|
—
|
|
|
171.6
|
|
|||||||
Total current assets
|
—
|
|
|
193.9
|
|
|
3,407.7
|
|
|
751.3
|
|
|
—
|
|
|
(18.8
|
)
|
|
4,334.1
|
|
|||||||
Operating lease right-of-use assets
|
—
|
|
|
75.4
|
|
|
29.1
|
|
|
27.3
|
|
|
—
|
|
|
—
|
|
|
131.8
|
|
|||||||
Property and equipment, net
|
—
|
|
|
73.3
|
|
|
259.0
|
|
|
30.8
|
|
|
—
|
|
|
—
|
|
|
363.1
|
|
|||||||
Goodwill
|
—
|
|
|
751.8
|
|
|
1,454.3
|
|
|
346.9
|
|
|
—
|
|
|
—
|
|
|
2,553.0
|
|
|||||||
Other intangible assets, net
|
—
|
|
|
242.9
|
|
|
177.6
|
|
|
173.6
|
|
|
—
|
|
|
—
|
|
|
594.1
|
|
|||||||
Other assets
|
1.4
|
|
|
25.7
|
|
|
20.1
|
|
|
171.9
|
|
|
—
|
|
|
(195.8
|
)
|
|
23.3
|
|
|||||||
Investment in and advances to subsidiaries
|
958.9
|
|
|
3,342.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,301.8
|
)
|
|
—
|
|
|||||||
Total Assets
|
$
|
960.3
|
|
|
$
|
4,705.9
|
|
|
$
|
5,347.8
|
|
|
$
|
1,501.8
|
|
|
$
|
—
|
|
|
$
|
(4,516.4
|
)
|
|
$
|
7,999.4
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Accounts payable-trade
|
$
|
—
|
|
|
$
|
46.5
|
|
|
$
|
1,525.7
|
|
|
$
|
281.6
|
|
|
$
|
—
|
|
|
$
|
(18.8
|
)
|
|
$
|
1,835.0
|
|
Accounts payable-inventory financing
|
—
|
|
|
0.1
|
|
|
378.9
|
|
|
50.9
|
|
|
—
|
|
|
—
|
|
|
429.9
|
|
|||||||
Current maturities of long-term debt
|
—
|
|
|
14.9
|
|
|
12.4
|
|
|
6.8
|
|
|
—
|
|
|
—
|
|
|
34.1
|
|
|||||||
Contract liabilities
|
—
|
|
|
—
|
|
|
146.4
|
|
|
105.8
|
|
|
—
|
|
|
—
|
|
|
252.2
|
|
|||||||
Accrued expenses and other current liabilities
|
—
|
|
|
291.3
|
|
|
559.1
|
|
|
89.8
|
|
|
—
|
|
|
—
|
|
|
940.2
|
|
|||||||
Total current liabilities
|
—
|
|
|
352.8
|
|
|
2,622.5
|
|
|
534.9
|
|
|
—
|
|
|
(18.8
|
)
|
|
3,491.4
|
|
|||||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt
|
—
|
|
|
3,229.5
|
|
|
—
|
|
|
53.7
|
|
|
—
|
|
|
—
|
|
|
3,283.2
|
|
|||||||
Deferred income taxes
|
—
|
|
|
49.7
|
|
|
—
|
|
|
29.9
|
|
|
—
|
|
|
(17.2
|
)
|
|
62.4
|
|
|||||||
Operating lease liabilities
|
—
|
|
|
84.9
|
|
|
22.9
|
|
|
23.3
|
|
|
—
|
|
|
—
|
|
|
131.1
|
|
|||||||
Other liabilities
|
—
|
|
|
30.1
|
|
|
0.7
|
|
|
218.8
|
|
|
—
|
|
|
(178.6
|
)
|
|
71.0
|
|
|||||||
Total long-term liabilities
|
—
|
|
|
3,394.2
|
|
|
23.6
|
|
|
325.7
|
|
|
—
|
|
|
(195.8
|
)
|
|
3,547.7
|
|
|||||||
Total stockholders' equity
|
960.3
|
|
|
958.9
|
|
|
2,701.7
|
|
|
641.2
|
|
|
—
|
|
|
(4,301.8
|
)
|
|
960.3
|
|
|||||||
Total Liabilities and Stockholders' Equity
|
$
|
960.3
|
|
|
$
|
4,705.9
|
|
|
$
|
5,347.8
|
|
|
$
|
1,501.8
|
|
|
$
|
—
|
|
|
$
|
(4,516.4
|
)
|
|
$
|
7,999.4
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||||||||||
December 31, 2018
|
|||||||||||||||||||||||||||
|
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
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
Year Ended December 31, 2019
|
|||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,874.1
|
|
|
$
|
2,158.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,032.4
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
13,207.3
|
|
|
1,785.2
|
|
|
—
|
|
|
—
|
|
|
14,992.5
|
|
|||||||
Gross profit
|
—
|
|
|
—
|
|
|
2,666.8
|
|
|
373.1
|
|
|
—
|
|
|
—
|
|
|
3,039.9
|
|
|||||||
Selling and administrative expenses
|
—
|
|
|
136.4
|
|
|
1,317.5
|
|
|
259.2
|
|
|
—
|
|
|
—
|
|
|
1,713.1
|
|
|||||||
Advertising expense
|
—
|
|
|
—
|
|
|
180.8
|
|
|
12.4
|
|
|
—
|
|
|
—
|
|
|
193.2
|
|
|||||||
Operating income (loss)
|
—
|
|
|
(136.4
|
)
|
|
1,168.5
|
|
|
101.5
|
|
|
—
|
|
|
—
|
|
|
1,133.6
|
|
|||||||
Interest (expense) income, net
|
—
|
|
|
(158.1
|
)
|
|
0.3
|
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
(159.4
|
)
|
|||||||
Other (expense) income, net
|
—
|
|
|
(21.9
|
)
|
|
2.1
|
|
|
(4.7
|
)
|
|
—
|
|
|
—
|
|
|
(24.5
|
)
|
|||||||
Income (loss) before income taxes
|
—
|
|
|
(316.4
|
)
|
|
1,170.9
|
|
|
95.2
|
|
|
—
|
|
|
—
|
|
|
949.7
|
|
|||||||
Income tax (expense) benefit
|
—
|
|
|
87.4
|
|
|
(285.2
|
)
|
|
(15.1
|
)
|
|
—
|
|
|
—
|
|
|
(212.9
|
)
|
|||||||
Income (loss) before equity in earnings of subsidiaries
|
—
|
|
|
(229.0
|
)
|
|
885.7
|
|
|
80.1
|
|
|
—
|
|
|
—
|
|
|
736.8
|
|
|||||||
Equity in earnings of subsidiaries
|
736.8
|
|
|
965.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,702.6
|
)
|
|
—
|
|
|||||||
Net income
|
$
|
736.8
|
|
|
$
|
736.8
|
|
|
$
|
885.7
|
|
|
$
|
80.1
|
|
|
$
|
—
|
|
|
$
|
(1,702.6
|
)
|
|
$
|
736.8
|
|
Consolidating Statement of Operations
|
|||||||||||||||||||||||||||
Year Ended December 31, 2018
|
|||||||||||||||||||||||||||
|
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
|
|||||||||||||||||||||||||||
|
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
|
)
|
|||||||
Other (expense) income, net
|
—
|
|
|
(57.5
|
)
|
|
0.7
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
(55.3
|
)
|
|||||||
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
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||||||||||
Year Ended December 31, 2019
|
|||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Comprehensive income
|
$
|
749.6
|
|
|
$
|
749.6
|
|
|
$
|
885.7
|
|
|
$
|
102.5
|
|
|
$
|
—
|
|
|
$
|
(1,737.8
|
)
|
|
$
|
749.6
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||||||||||
Year Ended December 31, 2018
|
|||||||||||||||||||||||||||
|
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
|
|||||||||||||||||||||||||||
|
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 Cash Flows
|
|||||||||||||||||||||||||||
Year Ended December 31, 2019
|
|||||||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries |
|
Co-Issuer
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
|
$
|
14.8
|
|
|
$
|
927.8
|
|
|
$
|
97.1
|
|
|
$
|
—
|
|
|
$
|
(12.5
|
)
|
|
$
|
1,027.2
|
|
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(61.5
|
)
|
|
(160.4
|
)
|
|
(14.4
|
)
|
|
—
|
|
|
—
|
|
|
(236.3
|
)
|
|||||||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(20.1
|
)
|
|
(75.0
|
)
|
|
—
|
|
|
—
|
|
|
(95.1
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(61.5
|
)
|
|
(180.5
|
)
|
|
(89.4
|
)
|
|
—
|
|
|
—
|
|
|
(331.4
|
)
|
|||||||
Cash flows (used in) provided by: financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Proceeds from borrowings under revolving credit facility
|
—
|
|
|
2,445.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,445.5
|
|
|||||||
Repayments of borrowings under revolving credit facility
|
—
|
|
|
(2,394.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,394.5
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
(14.9
|
)
|
|
—
|
|
|
(8.6
|
)
|
|
—
|
|
|
—
|
|
|
(23.5
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
600.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
600.0
|
|
|||||||
Payments to extinguish long-term debt
|
—
|
|
|
(539.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(539.0
|
)
|
|||||||
Net change in accounts payable-inventory financing
|
—
|
|
|
—
|
|
|
(27.3
|
)
|
|
26.0
|
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|||||||
Repurchases of common stock
|
(657.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(657.2
|
)
|
|||||||
Payment of incentive compensation plan withholding taxes
|
(21.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.4
|
)
|
|||||||
Dividend payments
|
(183.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(183.4
|
)
|
|||||||
Capital contributions
|
—
|
|
|
(76.0
|
)
|
|
—
|
|
|
76.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
—
|
|
|
35.5
|
|
|
(10.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
25.0
|
|
|||||||
Distributions and advances from (to) affiliates
|
862.0
|
|
|
(112.0
|
)
|
|
(709.8
|
)
|
|
(50.8
|
)
|
|
—
|
|
|
10.6
|
|
|
—
|
|
|||||||
Net cash (used in) provided by financing activities
|
—
|
|
|
(55.4
|
)
|
|
(747.3
|
)
|
|
42.3
|
|
|
—
|
|
|
10.6
|
|
|
(749.8
|
)
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||||
Net (decrease) increase in cash and cash equivalents
|
—
|
|
|
(102.1
|
)
|
|
—
|
|
|
52.2
|
|
|
—
|
|
|
(1.9
|
)
|
|
(51.8
|
)
|
|||||||
Cash and cash equivalents – beginning of period
|
—
|
|
|
176.0
|
|
|
—
|
|
|
46.7
|
|
|
—
|
|
|
(16.9
|
)
|
|
205.8
|
|
|||||||
Cash and cash equivalents – end of period
|
$
|
—
|
|
|
$
|
73.9
|
|
|
$
|
—
|
|
|
$
|
98.9
|
|
|
$
|
—
|
|
|
$
|
(18.8
|
)
|
|
$
|
154.0
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||||||||||
Year Ended December 31, 2018
|
|||||||||||||||||||||||||||
|
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 used in 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 facility
|
—
|
|
|
640.0
|
|
|
—
|
|
|
46.7
|
|
|
—
|
|
|
—
|
|
|
686.7
|
|
|||||||
Repayments of borrowings under revolving credit facility
|
—
|
|
|
(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
|
)
|
|||||||
Dividend payments
|
(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
|
|||||||||||||||||||||||||||
|
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 used in 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
|
)
|
|||||||
Dividend payments
|
(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
|
|
|
|
Year Ended December 31, 2019
|
||||||||||||||
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
||||||||
Corporate
|
|
$
|
1,736.2
|
|
|
$
|
1,883.9
|
|
|
$
|
1,913.5
|
|
|
$
|
1,965.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Small Business
|
|
355.6
|
|
|
377.4
|
|
|
386.2
|
|
|
391.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Public:
|
|
|
|
|
|
|
|
|
||||||||
Government
|
|
488.4
|
|
|
578.4
|
|
|
793.4
|
|
|
659.1
|
|
||||
Education
|
|
400.4
|
|
|
773.6
|
|
|
807.0
|
|
|
430.6
|
|
||||
Healthcare
|
|
441.9
|
|
|
488.1
|
|
|
500.5
|
|
|
503.4
|
|
||||
Total Public
|
|
1,330.7
|
|
|
1,840.1
|
|
|
2,100.9
|
|
|
1,593.1
|
|
||||
Other
|
|
535.4
|
|
|
528.5
|
|
|
507.1
|
|
|
587.3
|
|
||||
Net sales
|
|
$
|
3,957.9
|
|
|
$
|
4,629.9
|
|
|
$
|
4,907.7
|
|
|
$
|
4,536.9
|
|
Gross profit
|
|
672.1
|
|
|
773.8
|
|
|
816.5
|
|
|
777.5
|
|
||||
Operating income
|
|
228.9
|
|
|
300.3
|
|
|
320.6
|
|
|
283.8
|
|
||||
Net income
|
|
152.9
|
|
|
196.6
|
|
|
201.7
|
|
|
185.6
|
|
||||
Basic(1)
|
|
1.04
|
|
|
1.35
|
|
|
1.39
|
|
|
1.29
|
|
||||
Diluted(1)
|
|
1.02
|
|
|
1.33
|
|
|
1.37
|
|
|
1.27
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
|
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
|
|
(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.
|
Allowance for doubtful accounts:
|
|
Balance at
Beginning of Period |
|
Charged to
Costs and Expenses |
|
Deductions
|
|
Balance at
End of Period |
||||||||
Year Ended December 31, 2019
|
|
$
|
7.0
|
|
|
$
|
2.2
|
|
|
$
|
(1.3
|
)
|
|
$
|
7.9
|
|
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
|
|
/s/ Ernst & Young LLP
|
Chicago, Illinois
|
February 28, 2020
|
(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
|
|
|
|
|
|
4.9
|
|
|
|
|
|
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§
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL*
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB*
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE*
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
104*
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL 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 28, 2020
|
|
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 28, 2020
|
Christine A. Leahy
|
|
|
|
|
|
|
|
||
/s/ Collin B. Kebo
|
|
Senior Vice President and Chief Financial Officer
(principal financial officer)
|
|
February 28, 2020
|
Collin B. Kebo
|
|
|
|
|
|
|
|
||
/s/ Neil B. Fairfield
|
|
Vice President, Controller and Chief Accounting Officer
(principal accounting officer)
|
|
February 28, 2020
|
Neil B. Fairfield
|
|
|
|
|
|
|
|
|
|
/s/ David W. Nelms
|
|
Non-Executive Chairman of the Board
|
|
February 28, 2020
|
David W. Nelms
|
|
|
|
|
|
|
|
|
|
/s/ Virginia C. Addicott
|
|
Director
|
|
February 28, 2020
|
Virginia C. Addicott
|
|
|
|
|
|
|
|
||
/s/ Steven W. Alesio
|
|
Director
|
|
February 28, 2020
|
Steven W. Alesio
|
|
|
|
|
|
|
|
||
/s/ Barry K. Allen
|
|
Director
|
|
February 28, 2020
|
Barry K. Allen
|
|
|
|
|
|
|
|
||
/s/ James A. Bell
|
|
Director
|
|
February 28, 2020
|
James A. Bell
|
|
|
|
|
|
|
|
|
|
/s/ Benjamin D. Chereskin
|
|
Director
|
|
February 28, 2020
|
Benjamin D. Chereskin
|
|
|
|
|
|
|
|
||
/s/ Lynda M. Clarizio
|
|
Director
|
|
February 28, 2020
|
Lynda M. Clarizio
|
|
|
|
|
|
|
|
||
/s/ Paul J. Finnegan
|
|
Director
|
|
February 28, 2020
|
Paul J. Finnegan
|
|
|
|
|
|
|
|
|
|
/s/ Joseph R. Swedish
|
|
Director
|
|
February 28, 2020
|
Joseph R. Swedish
|
|
|
|
|
|
|
|
|
|
/s/ Donna F. Zarcone
|
|
Director
|
|
February 28, 2020
|
Donna F. Zarcone
|
|
|
|
|
Restricted Stock Units:
|
You have been awarded a restricted stock unit award with respect to [____] shares of Common Stock, par value $0.01 per share, subject to adjustment as provided in the Plan.
|
Grant Date:
|
[____________]
|
Vesting Schedule:
|
Except as otherwise provided in the Plan, the Agreement or any other agreement between the Company or any of its Subsidiaries and Holder, the Award shall vest [_____________], provided that you remain continuously employed by the Company or a Subsidiary, in each case, from the date of this Agreement through and including such date.
|
Subsidiary
|
|
Jurisdiction of Organization
|
CDW LLC
|
|
Illinois
|
CDW Finance Corporation
|
|
Delaware
|
CDW Technologies LLC
|
|
Wisconsin
|
CDW Direct, LLC
|
|
Illinois
|
CDW Government LLC
|
|
Illinois
|
CDW Logistics, Inc.
|
|
Illinois
|
CDW Canada Corp.
|
|
Nova Scotia
|
CDW NA Limited
|
|
United Kingdom
|
CDW International Holdings Limited
|
|
United Kingdom
|
CDW Finance Bidco Limited
|
|
United Kingdom
|
CDW Finance Holdings Limited
|
|
United Kingdom
|
CDW Limited
|
|
United Kingdom
|
CDW Finance Topco Limited
|
|
Jersey
|
1.
|
I have reviewed this annual report on Form 10-K of the registrant;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Christine A. Leahy
|
Christine A. Leahy
|
President and Chief Executive Officer
|
CDW Corporation
|
February 28, 2020
|
1.
|
I have reviewed this annual report on Form 10-K of the registrant;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Collin B. Kebo
|
Collin B. Kebo
|
Senior Vice President and Chief Financial Officer
|
CDW Corporation
|
February 28, 2020
|
/s/ Christine A. Leahy
|
Christine A. Leahy
|
President and Chief Executive Officer
|
CDW Corporation
|
February 28, 2020
|
/s/ Collin B. Kebo
|
Collin B. Kebo
|
Senior Vice President and Chief Financial Officer
|
CDW Corporation
|
February 28, 2020
|