CDW Annual Report 2015 | Quarterlytics

FY2015 Annual Report · CDW

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POSITIONEDfor

GROWTH

2015 Annual Report

CDW’s integrated technology solutions and services help more than
250,000 business, government, education and healthcare customers in
the U.S., U.K. and Canada navigate an increasingly complex IT market and
maximize the return on their technology investment.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

POSITIONEDfor

GROWTH

The combination of
our balance, focus and
execution has delivered
excellent results throughout
our 30+ year history and
positions us for continued
industry-leading growth

Chairman’s Letter

Dear Fellow Shareholders,

Achieving sustainable, proﬁtable growth year after year requires

more than a focus on the next big deal; it’s about understanding

the market and providing relevant solutions for our customers

who want the beneﬁts technology brings but need skills and

resources to take advantage. CDW helps customers navigate

an increasingly complex IT market by bringing together the

best technologies from multiple partners.

In 2015, our strategy again positioned us for growth and delivered

strong ﬁnancial performance as we captured market share

and delivered excellent proﬁtability while continuing to invest

in our future. Yet again, our performance reﬂected the power

of our business model, our strategies and our unique ability to

understand and meet the evolving needs of our customers.

Our business model is built on three elements fundamental to

our continued success – our balanced channel portfolio, our

diverse product suite and our variable cost structure – which

enable us to make the most of opportunities and trends while

eﬀectively managing market challenges.

Results Prove the Point

We believe that hard work translates into results, and we don’t

shy away from big goals. Regardless of market conditions, CDW

expects to outperform the U.S. IT market by 200 to 300 basis

points, which we did in 2015.

Thomas E. Richards
Chairman and Chief Executive Oﬃcer

CDW helps customers navigate an
increasingly complex IT market by
bringing together the best technologies
from multiple partners.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

balance

CDW CORPORATION 1

Chairman’s Letter (continued)

Our net sales of $12.9 billion were 7.6 percent stronger than
in 2014. On a constant currency, organic basis, excluding the
impact of consolidating U.K. IT solutions provider Kelway, which
we fully acquired in August 2015, net sales increased 5.3 percent.
And we achieved excellent proﬁtability with Adjusted EBITDA up
12.3 percent and Non-GAAP earnings per share up 23.6 percent
to $2.93. We also increased our dividend nearly 60 percent –
the second such increase since we went public in 2013. Further,
we repurchased more than $240 million of our stock. As we
continue to deliver consistent performance, there is no question
that a drive for results is in our DNA.

Balance and Breadth Set Us Apart
Our balanced channel and product portfolio are true
diﬀerentiators of our business model and drive results for
our shareholders. We have ﬁve U.S. customer channels of
$1 billion or more and we saw 2015 revenues grow in Hardware,
Software and Services and balanced growth across both
transactional and solutions categories.

improve market knowledge. In addition, we’ve put resources
behind our eCommerce platform to empower our customers
and deliver a highly relevant online experience.

To ensure we stay relevant to our customers, we are increasing
our ability to deliver high-growth integrated solutions and
expanded services. In 2015, we added new cloud oﬀerings
including a proprietary cloud provisioning platform, and hired
additional solution architects focused solely on cloud. We also
opened another services market and now have technical
specialists, service delivery and sales coworkers in more than
20 major metro markets across the country.

Our business model is fundamental to our success and we’ll
continue to invest in it to maximize our opportunities for growth
and ensure we are prepared to respond to market challenges.

Execution Turns Plans into Results
At the heart of our success is our ability to execute. We set big
goals, put plans in place and deliver.

This year we continued to make investments to ensure we are
positioned for future growth. Our acquisition of Kelway expanded
our go-to-market oﬀering with multi-national capabilities. We
also expanded our partnership with Dell to continue to deliver on
our promise of access, choice and expertise. And we maintained
our commitment to enhancing seller capacity and capability
enabling productivity with investments in advanced analytics to
provide customer insights that both shorten the selling cycle and

It comes down to being where our customers need us to be.
We remain relevant by deeply understanding the needs of our
customers and the potential solutions we can bring to bear. When
we saw that more and more of our customers were looking for
multi-national solutions, we acquired Kelway. We know that
security and cloud continue to be priorities for our customers
so we make the investments we need to be able to provide the
solutions they need.

focus

2 CDW CORPORATION

execution

We continued to invest in our ability to execute, adding more than
165 customer-facing coworkers, of which three-quarters support
solutions and services. We also enhanced our infrastructure,
opening our new Enterprise Command Center (ECC) in Vernon
Hills, which expands our managed services, cloud and mobility
capabilities, and brings strategic value to customers. The new ECC
provides 24x7x365 management of customers’ IT solutions –
cloud, data center, mobility, security and uniﬁed communication/
collaboration – and plays a vital role in managing the currency of
any enterprise – data.

We also invest in our communities, which beneﬁts our
coworkers, customers and partners. CDW not only donates
to organizations providing healthcare, education and military
support, but our coworkers donate their time, expertise and
money, as well. Since starting our partnership in 1988, CDW
coworkers have raised more than $6 million for Children’s
Miracle Network hospitals, and this year we were proud to
support Folds of Honor, which provides educational scholarships
to children and spouses of our country’s fallen and wounded
heroes. In the end, our giving strategy continues to position
CDW, our customers and partners for better tomorrows.

Focused on the Right Things
Our commitment and ability to execute sets us apart, and
I’m honored to lead this group of 8,000+ coworkers who work
every day to make the right things happen the right way. We are
both disciplined and resilient, making adjustments when markets

and customer needs change. Our disciplined and measured
approach to integrating with Kelway is a great example of how
we choose to do things right. In April, we will rebrand Kelway to
CDW and together we’re now successfully meeting the needs
of customers in the U.K. and abroad.

It is an honor and a pleasure to lead this growing team. The
competitive spirit and energy of this company inspires me on
a daily basis.

Looking forward, we will continue to execute against our
strategies and believe we are well-positioned for growth in
2016 and beyond.

Everything in today’s world starts with IT and every success
starts with a conversation with CDW. We are committed to
our vision of being the leading IT solutions and services provider
in the markets we serve, and I thank you for your continued
conﬁdence in CDW.

Thomas E. Richards

Chairman and Chief Executive Oﬃcer

March 24, 2016

results

CDW CORPORATION 3

Benjamin D. Chereskin
President,
Proﬁle Capital Management LLC

David W. Nelms
Chairman and Chief Executive Oﬃcer,
Discover Financial Services

Lynda M. Clarizio
President,
The Nielsen Company (U.S.), L.L.C.

Robin P. Selati
Managing Director,
Madison Dearborn Partners, LLC

Glenn M. Creamer
Senior Managing Director,
Providence Equity Partners L.L.C.

Michael J. Dominguez
Managing Director,
Providence Equity Partners L.L.C.

Paul J. Finnegan
Co-Chief Executive Oﬃcer,
Madison Dearborn Partners, LLC

Joseph R. Swedish
Chairman, President and Chief
Executive Oﬃcer,
Anthem, Inc.

Donna F. Zarcone
President and Chief Executive Oﬃcer,
Economic Club of Chicago

Douglas E. Eckrote
Senior Vice President of Strategic
Solutions and Services

Jonathan J. Stevens
Senior Vice President of Operations
and Chief Information Oﬃcer

Christine A. Leahy
Senior Vice President of
International, Chief Legal Oﬃcer and
Corporate Secretary

Christina V. Rother
Senior Vice President of Public and
Advanced Technology Sales

Matthew A. Troka
Senior Vice President of Product
and Partner Management

Ann E. Ziegler
Senior Vice President and
Chief Financial Oﬃcer

Leadership

Board of Directors

Thomas E. Richards
Chairman and Chief Executive Oﬃcer

Virginia C. Albanese
President and Chief Executive Oﬃcer,
FedEx Custom Critical

Steven W. Alesio
Operating Partner/Advisor,
Providence Equity Partners L.L.C.

Barry K. Allen
Operating Partner/Advisor,
Providence Equity Partners L.L.C.

James A. Bell
Retired Executive Vice President,
The Boeing Company

Executive Committee

Thomas E. Richards
Chairman and Chief Executive Oﬃcer

Dennis G. Berger
Senior Vice President and
Chief Coworker Services Oﬃcer

Neal J. Campbell
Senior Vice President and
Chief Marketing Oﬃcer

Christina M. Corley
Senior Vice President of
Corporate Sales

4 CDW CORPORATION

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35985

CDW CORPORATION
(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)

75 Tri-State International
Lincolnshire, Illinois

(Address of principal executive offices)

26-0273989

(I.R.S. Employer
Identification No.)

60069

(Zip Code)

(847) 465-6000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Name of each exchange on which registered

Common stock, par value $0.01 per share

NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None
____________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
No
12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).

Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer

Non-accelerated filer

(Do not check if a smaller reporting company)

Accelerated filer

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2015, the last business day of the registrant’s
most recently completed second fiscal quarter, was $4,463.1 million, based on the per share closing sale price of $34.28 on that date.

As of February 19, 2016, there were 167,740,043 shares of common stock, $0.01 par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for use in connection with its 2016 Annual Meeting of Shareholders, to be filed not later than 120 days after
December 31, 2015, are incorporated by reference into Part III of this report.

CDW CORPORATION AND SUBSIDIARIES

ANNUAL REPORT ON FORM 10-K
Year Ended December 31, 2015

TABLE OF CONTENTS

Business

Item
PART I
Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.

Properties

Item 3.

Item 4.

PART II
Item 5.

Item 6.

Legal Proceedings

Mine Safety Disclosures
Executive Officers

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Selected Financial Data

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Financial Statements and Supplementary Data

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9.
Item 9A. Controls and Procedures
Item 9B. Other Information
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11.

Executive Compensation

Item 12.

Item 13.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Item 14.
PART IV
Item 15.
SIGNATURES

Principal Accountant Fees and Services

Exhibits and Financial Statement Schedules

Page

21
21

24
26

104

106

107

108

109

Table of Contents

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the federal securities laws. All statements other
than statements of historical fact included in this report are forward-looking statements. These statements relate to analyses and
other information, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements
also relate to our future prospects, developments and business strategies. We claim the protection of The Private Securities Litigation
Reform Act of 1995 for all forward-looking statements in this report.

These forward-looking statements are identified by the use of terms and phrases such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and similar terms and phrases, including
references to assumptions. However, these words are not the exclusive means of identifying such statements. Although we believe
that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot
assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from those that we expected.

Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are
disclosed under the section entitled “Risk Factors” included elsewhere in this report. All written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained
in the section entitled “Risk Factors” included elsewhere in this report as well as other cautionary statements that are made from
time to time in our other Securities and Exchange Commission (“SEC”) filings and public communications. You should evaluate
all forward-looking statements made in this report in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not contain all of the factors that could cause actual
results to differ from our expectations. In addition, we cannot assure you that we will realize the results or developments we expect
or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way
we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation
to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as
otherwise required by law.

Table of Contents

Item 1. Business

Our Company

PART I

CDW Corporation (together with its subsidiaries, the “Company”, “CDW” or “we”) is a Fortune 500 company and a
leading provider of integrated information technology (“IT”) solutions in North America and the United Kingdom. We help our
customer base of over 250,000 small, medium and large business, government, education and healthcare customers by delivering
critical solutions to their increasingly complex IT needs. Our broad array of offerings ranges from discrete hardware and software
products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and
collaboration. We are technology “agnostic,” with a product portfolio including more than 100,000 products from more than 1,000
brands. We provide our products and solutions through more than 5,000 customer-facing coworkers, including field sellers, highly-
skilled technology specialists and advanced service delivery engineers.

We are a leading sales channel partner in North America and the United Kingdom for many original equipment
manufacturers (“OEMs”) and software publishers (collectively, our “vendor partners”), whose products we sell or include in the
solutions we offer. We believe we are an important extension of our vendor partners’ sales and marketing capabilities, providing
them with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market
coverage and extensive customer access.

We provide value to our customers by simplifying the complexities of technology across design, selection, procurement,
integration and management. Our goal is to have our customers, regardless of their size, view us as an indispensable extension of
their IT staff. We seek to achieve this goal by providing our customers with superior service through our large and experienced
sales force and service delivery teams. Our multi-brand offering approach enables us to identify the products or combination of
products that best address each customer’s specific organizational IT requirements and to evolve our offerings as new technologies
develop.

We believe we offer the following value proposition to our customers and our vendor partners:

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 throughout North
America and the United Kingdom

Value-added services with integration capabilities

Large and established customer channels

Highly-skilled specialists and engineers

Strong distribution and implementation capabilities

Solutions across a very broad IT landscape

Value-added solutions and marketing programs that
generate end-user demand

Our customers include private sector businesses, many of which employ fewer than 5,000 employees, government agencies
and educational and healthcare institutions. We serve our customers through channel-specific sales teams and service delivery
teams with extensive technical skills and knowledge of the specific markets they serve. This market segmentation allows us to
customize our offerings and to provide enhanced expertise in designing and implementing IT solutions for our customers. In our
U.S. business, which represents over 90% of our revenues, we currently have five dedicated customer channels: medium/large
business, small business, government, education and healthcare, each of which generated over $1 billion or more in net sales in
2015. The scale and diversity of our customer channels provide us with multiple avenues for growth and a balanced customer base
to weather economic and technology cycles.

Information regarding our reportable segments and our customer channels is as follows:

Corporate Segment

Public Segment

Customer Channels

Target Customers

2015 Net Sales
(in billions)

Medium/
Large
Business

100 - 5,000
employees

Small
Business

10 - 100
employees

Government

Education

Healthcare

Other

Various federal, state
and local agencies

Higher
education and
K-12

Hospitals, ambulatory
service providers and
long-term care facilities

Advanced services
customers, Canada
and United Kingdom

$5.8

$1.1

$1.7

$1.8

$1.6

$1.0

Table of Contents

For further information regarding our segments, including financial results, see Note 16 (Segment Information) to the

accompanying Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”

We offer more than 1,000 brands, from well-established companies such as APC, Apple, Cisco, Dell, EMC, Google,
Hewlett Packard Enterprise, HP Inc., IBM, Lenovo, Microsoft, NetApp, Samsung, Symantec and VMware, as well as from emerging
vendor partners such as BlueJeans, CafeX, Cradlepoint, CloudPhysics, FireEye, Nimble Storage, Nutanix, Palo Alto Networks,
Ruckus, and Veeam. In 2015, we generated over $1 billion of revenue from each of four of our vendor partners and over $100
million of revenue from each of 11 other vendor partners. We have received the highest level of certification from major vendor
partners such as Cisco, EMC and Microsoft, which reflects the extensive product and solution knowledge and capabilities that we
bring to our customers’ IT challenges. These certifications also provide us with access to favorable pricing, tools and resources,
including vendor incentive programs, which we use to provide additional value to our customers. Our vendor partners also regularly
recognize us with top awards and select us to develop and grow new customer solutions.

History

Founded in 1984, CDW became a public company in 1993. We were a public company from 1993 until October 2007
(see below). In 2003, we purchased selected United States assets and the Canadian operations of Micro Warehouse, which extended
our growth platform into Canada. In 2006, we acquired Berbee Information Networks Corporation, a regional provider of technology
products, solutions and customized engineering services in advanced technologies primarily across Cisco, IBM and Microsoft
portfolios. This acquisition increased our capabilities in customized engineering services and managed services.

On October 12, 2007, CDW Corporation, an Illinois corporation, was acquired through a merger transaction by an entity
controlled by investment funds affiliated with Madison Dearborn Partners, LLC (“Madison Dearborn”) and Providence Equity
Partners L.L.C. (“Providence Equity”). CDW Corporation continued as the surviving corporation and same legal entity after the
acquisition, but became a wholly owned subsidiary of VH Holdings, Inc., a Delaware corporation.

On December 31, 2009, CDW Corporation merged into CDWC LLC, an Illinois limited liability company owned by VH
Holdings, Inc., with CDWC LLC as the surviving entity. This change had no impact on our operations or management. On
December 31, 2009, CDWC LLC was renamed CDW LLC (“CDW LLC”). On August 17, 2010, VH Holdings, Inc. was renamed
CDW Corporation (“Parent”), a Delaware corporation.

Prior to July 2, 2013, the date of our initial public offering (“IPO”), Parent was owned directly by CDW Holdings LLC
("CDW Holdings"), a company controlled by investment funds affiliated with Madison Dearborn and Providence Equity, certain
other co-investors and certain members of CDW management. Before the IPO, Madison Dearborn and Providence Equity owned
46.0% and 40.6% of our common stock, respectively. After the IPO and through subsequent secondary offerings from the fourth
quarter of 2013 through 2015, their ownership has significantly decreased. As of December 31, 2015, Madison Dearborn and
Providence Equity own 4.9% and 4.3% of our common stock, respectively.

On July 2, 2013, Parent completed the IPO of its common stock. In connection with the IPO, CDW Holdings distributed
all of its shares of Parent’s common stock to its members in June 2013 in accordance with the members’ respective membership
interests and was subsequently dissolved in August 2013. See Note 10 (Stockholders’ Equity) to the accompanying Consolidated
Financial Statements under Item 8, “Financial Statements and Supplementary Data” for additional discussion of the IPO.

On November 10, 2014, we completed the acquisition of a 35% non-controlling equity interest in Kelway TopCo Limited
(“Kelway”), a U.K.-based IT solutions provider, which has global supply chain relationships that enable it to conduct business in
more than 80 countries. On August 1, 2015, we completed the acquisition of Kelway by purchasing the remaining 65% of its
outstanding common stock which increased our ownership interest from 35% to 100%, and provided us control. The acquisition
enhances our ability to provide IT solutions to U.S.-based customers with international locations. We included the financial results
of Kelway in our Consolidated Financial Statements from the date of acquisition. For further details regarding the acquisition, see
Note 3 (Acquisition) to the accompanying Consolidated Financial Statements under Item 8, “Financial Statements and
Supplementary Data.”

Our Market

We operate in the United States, United Kingdom and Canadian IT markets, which are large and growing markets. We
also have an international presence in both private and public sector IT, and through our global supply chain have the ability to
provide products and services in over 80 countries. According to the International Data Corporation (“IDC”), the total U.S., U.K.
and Canadian IT market generated approximately $900 billion in sales in 2015. We believe our addressable market in the indirect
sales channel for the U.S., U.K. and Canadian markets represent more than $282 billion in annual sales. For the year ended
December 31, 2015, our total Net sales of $12.9 billion represented approximately 5% of that highly diverse and fragmented
market. New technologies, including cloud, virtualization and mobility, coupled with the resulting increase in demand for data as

Table of Contents

well as aging infrastructure, are increasingly requiring businesses and institutions to seek integrated solutions to their IT needs.
We expect this trend to continue for the foreseeable future, with end-user demand for business efficiency and productivity driving
future IT spending growth.

Our Offerings

Our offerings range from discrete hardware and software products and services to complex integrated solutions including
one or more of these elements. We believe our customers increasingly view technology purchases as integrated solutions rather
than discrete product and service categories. We estimate that approximately 48% of our net sales in 2015 in the U.S. came from
sales of product categories and services typically associated with solutions. Our hardware products include notebooks/mobile
devices (including tablets), network communications, enterprise and data storage, video monitors, printers, desktop computers
and servers. Our software products include application suites, security, virtualization, operating systems, network management
and Software as a Service (“SaaS”) offerings. We also provide a full suite of value-added-services, which range from basic
installation, warranty and repair services to custom configuration, data center and network implementation services, as well as
managed services that include Infrastructure as a Service (“IaaS”) offerings.

•

We also offer a variety of integrated solutions, such as:

Mobility: We assist our customers with the selection, procurement and integration of mobile security software, hardware
devices, such as smartphones, tablets and notebooks, and cellular wireless activation systems. We also provide mobile
device management applications with policy and security management capabilities across a variety of mobile operating
systems and platforms.

Security: We assess our customers’ security needs and provide them with threat prevention tools in order to protect their
networks, servers and applications such as, anti-virus, anti-spam, content filtering, intrusion prevention, firewall and
virtual private network services, and network access control. We also design and implement data loss prevention solutions,
using data monitoring and encryption across a wide array of devices to ensure the security of customer information,
personal employee information and research and development data.

Data Center Optimization: We help our customers evaluate their data centers for convergence and optimization
opportunities. Our data center optimization solutions consist of server virtualization, physical server consolidation, data
storage management and energy-efficient power and cooling systems.

Cloud Computing: We provide our customers with a broad portfolio of cloud-based solutions, which are technology
delivered as a service. Our cloud offerings include: IaaS, which delivers compute, networking, storage, and data center
capabilities via the cloud; SaaS, which connects users to cloud-based software applications; and Platform as a Service
(“PaaS”), which enables development and ongoing maintenance of cloud-based solutions. We provide public cloud
solutions which reside off customer premises on a public (shared) infrastructure, and private cloud solutions, which reside
on customer premises. We also offer hybrid cloud solutions that deliver the benefits of both public and private solutions.
Our migration, integration and managed services offerings help our customers simplify cloud adoption, as well as the
ongoing management of cloud solutions across the entire IT lifecycle. Dedicated Cloud Client Executives work with our
customers to architect cloud solutions meeting their organizational, technology and financial objectives.

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.

Collaboration: We provide our customers with communication tools allowing employees to share knowledge, ideas and
information among each other and with clients and partners effectively and quickly. Our collaboration solutions unite
communications and applications via the integration of products that facilitate the use of multiple enterprise
communication methods including email, instant messaging, presence, social media, voice, video, hardware, software
and services. We also host cloud-based collaboration solutions.

Table of Contents

Although we believe customers increasingly view technology purchases as solutions rather than discrete product and

service categories, our net sales by major category, based upon our internal category classifications is as follow:

2015

Years Ended December 31,
2014 (1)

2013 (1)

Percentage
of Total
Net Sales

Dollars in
Millions

Percentage
of Total
Net Sales

Dollars in
Millions

Percentage
of Total
Net Sales

19.6% $

2,354.0

19.5% $

1,696.5

14.7

8.2

36.6

16.7

3.7

0.5

1,613.3

1,024.2

4,551.1

2,064.1

371.9

95.9

13.4

8.5

37.6

17.1

3.1

0.8

1,482.7

999.3

4,184.1

1,982.4

332.7

90.9

15.8%

13.8

9.3

38.8

18.4

3.1

0.8

Dollars in
Millions

$ 2,539.4

1,914.9

1,065.2

4,756.4

2,163.6

478.0

71.2

$ 12,988.7

100.0% $ 12,074.5

100.0% $ 10,768.6

100.0%

Notebooks/Mobile Devices

Netcomm Products

Enterprise and Data Storage
(Including Drives)

Other Hardware
Software (2)
Services
Other (3)
Total net sales

(1)

(2)

Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the
year ended December 31, 2015.

The decline in software as a percentage of total net sales is primarily driven by a higher proportion of revenue recorded
on a net basis, including SaaS.

(3)

Includes items such as delivery charges to customers and certain commission revenue.

Our Customers

We provide integrated IT solutions to over 250,000 small, medium and large business, government, education and
healthcare customers throughout North America and the United Kingdom. As a result of the acquisition of Kelway, we also have
the ability to provide products and services to customers in over 80 countries.

Inventory Management

We utilize our IT systems to manage our inventory in a cost-efficient manner, resulting in a rapid-turn inventory model.

We generally only stock items that have attained a minimum sales volume.

Our distribution process is highly automated. Once a customer order is received and credit approved, orders are
automatically routed to one of our distribution centers for picking and shipping as well as configuration and imaging services. We
operate two distribution centers in North America: a 450,000 square foot facility in Vernon Hills, Illinois, and a 513,000 square
foot facility in North Las Vegas, Nevada. We ship over 37 million units annually on an aggregate basis from these two distribution
centers. We believe that the location of these distribution centers allows us to efficiently ship products throughout North America
and provide timely access to our principal distributors. In addition, in the event of weather-related or other disruptions at one of
our distribution centers, we are able to shift order processing and fulfillment from one center to the other quickly and efficiently,
enabling us to continue to ship products in a timely manner. We believe competitive sources of supply are available in substantially
all of the product categories we offer. We continue to improve the productivity of our distribution centers as measured by key
performance indicators such as units shipped per hour worked and bin accuracy. We also operate one distribution center in the
United Kingdom, a 120,000 square foot facility in Rugby. We ship over 2 million units annually from this distribution center to
customers in the United Kingdom and in more than 80 countries around the world.

We also have drop-shipment arrangements with many of our OEMs and wholesale distributors, which permit us to offer
products to our customers without having to take physical delivery at our distribution centers. These arrangements generally
represent approximately 45% to 55% of total consolidated net sales, including approximately 15% to 20% related to electronic
delivery for software licenses.

Information Technology Systems

We maintain customized IT and unified communication systems that enhance our ability to provide prompt, efficient and
expert service to our customers. In addition, these systems enable centralized management of key functions, including purchasing,
inventory management, billing and collection of accounts receivable, sales and distribution. Our systems provide us with thorough,

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detailed and real-time information regarding key aspects of our business. This capability helps us to continuously enhance
productivity, ship customer orders quickly and efficiently, respond appropriately to industry changes and provide high levels of
customer service. We believe our websites, which provide electronic order processing and advanced tools, such as, order tracking,
reporting and asset management, make it easy for customers to transact business with us and ultimately strengthen our customer
relationships.

Product Procurement

We may purchase all or only some of the products our vendor partners offer for resale to our customers or for inclusion
in the solutions we offer. Each vendor partner agreement provides for specific terms and conditions, which may include one or
more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs,
such as, purchase or sales rebates and cooperative advertising reimbursements. In late 2015 we expanded our partnership with
Dell. Through this partnership we have increased our offering of Dell products and services to our customers. We also purchase
software from major software publishers for resale to our customers or for inclusion in the solutions we offer. Our agreements
with software publishers allow the end-user customer to acquire software or licensed products and services.

In addition to purchasing products directly from our vendor partners, we purchase products from wholesale distributors
for resale to our customers or for inclusion in the solutions we offer. These wholesale distributors provide logistics management
and supply-chain services for us, as well as for our vendor partners.

For our North American operations, we purchased approximately 50% of the products we sold as discrete products or as
components of a solution directly from our vendor partners and the remaining 50% from wholesale distributors for the year ended
December 31, 2015. Purchases from our three largest wholesale distributors, Tech Data, SYNNEX and Ingram Micro, represented
9%, 9% and 8% of our total purchases.

Sales of products manufactured by Apple, Cisco, EMC, HP Inc., Hewlett Packard Enterprise, Lenovo and Microsoft,
whether purchased directly from these vendor partners or from a wholesale distributor, represented in the aggregate 56% of our
consolidated Net sales in 2015. Sales of products manufactured by Cisco and the companies formerly known as Hewlett-Packard
Company represented 16% and 18%, of our 2015 consolidated Net sales, respectively.

Competition

The market for technology products and services is highly competitive. Competition is based on the ability to tailor
specific solutions to customer needs, quality and breadth of product and service offerings, knowledge and expertise of sales force,
customer service, price, product availability, speed of delivery and credit availability. Our competition includes:

•

resellers, such as, Computacenter, Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, SCC,
Softchoice, World Wide Technology, and many smaller resellers;

manufacturers who sell directly to customers, such as, Dell, HP Inc., Hewlett Packard Enterprise and Apple;

large service providers and system integrators, such as, IBM, Accenture, Hewlett Packard Enterprise and Dell;

e-tailers, such as, Amazon, Newegg, and TigerDirect.com;

cloud providers, such as, Amazon Web Services, Microsoft and Box; and

retailers (including their e-commerce activities) such as Staples and Office Depot.

Marketing

We market the CDW brand to U.S., Canadian, and British audiences using a variety of channels that include online,
broadcast, print, social and other media. This promotion is supported by integrated communication efforts targeting decision-
makers, influencers and the general public using a combination of news releases, case studies, media interviews and speaking
opportunities. We also market to current and prospective customers through integrated marketing programs including behaviorally
targeted email, print, online media, events and sponsorships, as well as broadcast media.

As a result of our relationships with our vendor partners, a significant portion of our advertising and marketing expenses
are reimbursed through cooperative advertising programs. These programs are at the discretion of our vendor partners and are

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typically tied to sales or other commitments to be met by us within a specified period of time. We believe that our national scale
and analytical techniques that measure the efficacy of our marketing programs differentiate us from our competitors.

Coworkers

As of December 31, 2015, we employed 8,465 coworkers, none of whom is covered by collective bargaining agreements.

We consider our coworker relations to be good.

Intellectual Property

The CDW trademark and certain variations thereon are registered or subject to pending trademark applications in the
U.S., Canada and certain other jurisdictions. The Kelway trademark and certain variations thereon are registered or subject to
pending trademark applications in the European Union, which includes the United Kingdom, and certain other jurisdictions such
as Hong Kong, Singapore, and South Africa. We believe our trademarks have significant value and are important factors in our
marketing programs. In addition, we own registrations for domain names, including cdw.com and cdwg.com, kelway.com and
variations thereon, for certain of our primary trademarks. We also have unregistered copyrights in our website content.

Available Information

We maintain a website at www.cdw.com. You may access our Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 with the SEC free of charge at our website as soon as reasonably practicable after such material
is electronically filed with, or furnished to, the SEC. Our website and the information contained on that site, or connected to that
site, are not incorporated into and are not a part of this report.

Item 1A. Risk Factors

There are many factors that affect our business, results of operations and cash flows, some of which are beyond our control. The
following is a description of some important factors that may cause our actual results of operations and cash flows in future
periods to differ materially from those currently expected or desired.

Risks Related to Our Business

General economic conditions could negatively affect technology spending by our customers and put downward pressure on
prices, which may have an adverse impact on our business, results of operations or cash flows.

Weak economic conditions generally, sustained uncertainty about global economic conditions, government spending cuts
and the impact of new government programs, or a tightening of credit markets, could cause our customers and potential customers
to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an
adverse effect on our business, results of operations or cash flows.

Our financial performance could be adversely affected by decreases in spending on technology products and services by our
public sector customers.

Our sales to our public sector customers are impacted by government spending policies, budget priorities and revenue
levels. An adverse change in government spending policies (including ongoing budget cuts at the federal level), budget priorities
or revenue levels could cause our public sector customers to reduce their purchases or to terminate or not renew their contracts
with us, which could adversely affect our business, results of operations or cash flows. For example, in 2013, as a result of
sequestration and related budget uncertainty and the partial shutdown of the U.S. federal government for 16 days, we experienced
significantly reduced U.S. Federal sales in our Public segment.

Our business depends on our vendor partner relationships and the availability of their products.

We purchase products for resale from vendor partners, which include OEMs and software publishers, and wholesale
distributors. For the year ended December 31, 2015, we purchased approximately 50% of the products we sold directly from
vendor partners and the remaining amount from wholesale distributors for our North American Operations. We are authorized by
vendor partners to sell all or some of their products via direct marketing activities. Our authorization with each vendor partner is
subject to specific terms and conditions regarding such things as sales channel restrictions, product return privileges, price protection
policies, purchase discounts and vendor partner programs and funding, including purchase rebates, sales volume rebates, purchasing
incentives and cooperative advertising reimbursements. However, we do not have any long-term contracts with our vendor partners
and many of these arrangements are terminable upon notice by either party. A reduction in vendor partner programs or funding or
our failure to timely react to changes in vendor partner programs or funding could have an adverse effect on our business, results

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of operations or cash flows. In addition, a reduction in the amount of credit granted to us by our vendor partners could increase
our need for, and the cost of, working capital and could have an adverse effect on our business, results of operations or cash flows,
particularly given our substantial indebtedness.

From time to time, vendor partners may terminate or limit our right to sell some or all of their products or change the
terms and conditions or reduce or discontinue the incentives that they offer us. For example, there is no assurance that, as our
vendor partners continue to sell directly to end users and through resellers, they will not limit or curtail the availability of their
products to solutions providers like us. Any such termination or limitation or the implementation of such changes could have a
negative impact on our business, results of operations or cash flows.

Although we purchase from a diverse vendor base, in 2015, products we purchased from wholesale distributors Tech
Data and SYNNEX each represented 9% of our total purchases and Ingram Micro represented 8% of our total North American
purchases. In addition, sales of products manufactured by Apple, Cisco, EMC, HP Inc., Hewlett Packard Enterprise, Lenovo and
Microsoft in the aggregate represented 56% of our 2015 Net sales. Sales of products manufactured by Cisco and the companies
formerly known as Hewlett-Packard Company represented 16% and 18%, respectively, of our 2015 consolidated Net sales. The
loss of, or change in business relationship with, any of these or any other key vendor partners, the diminished availability of their
products, or backlogs for their products leading to manufacturer allocation, could reduce the supply and increase the cost of
products we sell and negatively impact our competitive position.

Additionally, the relocation of key distributors utilized in our purchasing model could increase our need for, and the cost
of, working capital and have an adverse effect on our business, results of operations or cash flows. Further, the sale, spin-off or
combination of any of our vendor partners and/or certain of their business units, including any such sale to or combination with
a vendor with whom we do not currently have a commercial relationship or whose products we do not sell, could have an adverse
impact on our business, results of operations or cash flows.

Our sales are dependent on continued innovations in hardware, software and services offerings by our vendor partners and
the competitiveness of their offerings, and our ability to partner with new and emerging technology providers.

The technology industry is characterized by rapid innovation and the frequent introduction of new and enhanced hardware,
software and services offerings, such as cloud-based solutions, including SaaS, IaaS and PaaS, and the Internet of Things (“IoT”).
We have been and will continue to be dependent on innovations in hardware, software and services offerings, as well as the
acceptance of those innovations by customers. A decrease in the rate of innovation, or the lack of acceptance of innovations by
customers, could have an adverse effect on our business, results of operations or cash flows.

In addition, if we are unable to keep up with changes in technology and new hardware, software and services offerings,
for example by providing the appropriate training to our account managers, sales technology specialists and engineers to enable
them to effectively sell and deliver such new offerings to customers, our business, results of operations or cash flows could be
adversely affected.

We also are dependent upon our vendor partners for the development and marketing of hardware, software and services
to compete effectively with hardware, software and services of vendors whose products and services we do not currently offer or
that we are not authorized to offer in one or more customer channels. In addition, our success is dependent on our ability to develop
relationships with and sell hardware, software and services from new emerging vendors and vendors that we have not historically
represented in the marketplace. To the extent that a vendor’s offering that is highly in demand is not available to us for resale in
one or more customer channels, and there is not a competitive offering from another vendor that we are authorized to sell in such
customer channels, or we are unable to develop relationships with new technology providers or companies that we have not
historically represented, our business, results of operations or cash flows could be adversely impacted.

Substantial competition could reduce our market share and significantly harm our financial performance.

Our current competition includes:

• resellers, such as Computacenter, Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, SCC,

Softchoice, World Wide Technology and many smaller resellers;

• manufacturers who sell directly to customers, such as Dell, HP Inc., Hewlett Packard Enterprise and Apple;

• large service providers and system integrators, such as IBM, Accenture, Hewlett Packard Enterprise and Dell;

• e-tailers, such as Amazon, Newegg and TigerDirect.com;

• cloud providers, such as Amazon Web Services, Microsoft and Box; and

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• retailers (including their e-commerce activities), such as Staples and Office Depot.

We expect the competitive landscape in which we compete to continue to change as new technologies are developed.
While innovation can help our business as it creates new offerings for us to sell, it can also disrupt our business model and create
new and stronger competitors. For instance, while cloud-based solutions present an opportunity for us, cloud-based solutions and
technologies that deliver technology solutions as a service could increase the amount of sales directly to customers rather than
through solutions providers like us, or could reduce the amount of hardware we sell, leading to a reduction in our sales and/or
profitability. In addition, some of our hardware and software vendor partners sell, and could intensify their efforts to sell, their
products directly to our customers. Moreover, traditional OEMs have increased their services capabilities through mergers and
acquisitions with service providers, which could potentially increase competition in the market to provide comprehensive
technology solutions to customers. If any of these trends becomes more prevalent, it could adversely affect our business, results
of operations or cash flows.

We focus on offering a high level of service to gain new customers and retain existing customers. To the extent we face
increased competition to gain and retain customers, we may be required to reduce prices, increase advertising expenditures or take
other actions which could adversely affect our business, results of operations or cash flows. Additionally, some of our competitors
may reduce their prices in an attempt to stimulate sales, which may require us to reduce prices. This would require us to sell a
greater number of products to achieve the same level of net sales and gross profit. If such a reduction in prices occurs and we are
unable to attract new customers and sell increased quantities of products, our sales growth and profitability could be adversely
affected.

The success of our business depends on the continuing development, maintenance and operation of our information technology
systems.

Our success is dependent on the accuracy, proper utilization and continuing development of our information technology
systems, including our business systems, such as our sales, customer management, financial and accounting, marketing, purchasing,
warehouse management, e-commerce and mobile systems, as well as our operational platforms, including voice and data networks
and power systems. The quality and our utilization of the information generated by our information technology systems, and our
success in implementing new systems and upgrades, affects, among other things, our ability to:

• conduct business with our customers, including delivering services and solutions to them;

• manage our inventory and accounts receivable;

• 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.

The integrity of our information technology systems is vulnerable to disruption due to forces beyond our control. While
we have taken steps to protect our information technology systems from a variety of threats, including computer viruses, malware,
phishing, social engineering, unauthorized access and other malicious attacks, both internal and external, and human error, there
can be no guarantee that those steps will be effective. Furthermore, although we have redundant systems at a separate location to
back up our primary systems, there can be no assurance that these redundant systems will operate properly if and when required.
Any disruption to or infiltration of our information technology systems could significantly harm our business and results of
operations.

Breaches of data security could adversely impact our business.

Our business involves the storage and transmission of proprietary information and sensitive or confidential data, including
personal information of coworkers, customers and others. In addition, we operate data centers for our customers which host their
technology infrastructure and may store and transmit both business-critical data and confidential information. In connection with
our services business, our coworkers also have access to our customers’ confidential data and other information. We have privacy
and data security policies in place that are designed to prevent security breaches; however, as newer technologies evolve, we could
be exposed to increased risk of breaches in security. Breaches in security could expose us, our customers or other individuals to
a risk of public disclosure, loss or misuse of this information, resulting in legal claims or proceedings, liability or regulatory
penalties under laws protecting the privacy of personal information, as well as the loss of existing or potential customers and
damage to our brand and reputation. In addition, the cost and operational consequences of implementing further data protection
measures could be significant. Such breaches, costs and consequences could adversely affect our business, results of operations
or cash flows.

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The failure to comply with our public sector contracts or applicable laws and regulations could result in, among other things,
termination, fines or other liabilities, and changes in procurement regulations could adversely impact our business, results of
operations or cash flows.

Revenues from our public sector customers are derived from sales to governmental entities, educational institutions and
healthcare customers, through various contracts and open market sales of products and services. Sales to public sector customers
are highly regulated. Noncompliance with contract provisions, government procurement regulations or other applicable laws or
regulations (including the False Claims Act and the Medicare and Medicaid Anti-Kickback Statute or similar laws of the jurisdictions
for our business activities outside of the United States) could result in civil, criminal and administrative liability, including
substantial monetary fines or damages, termination of government contracts or other public sector customer contracts, and
suspension, debarment or ineligibility from doing business with the government and other customers in the public sector. In
addition, contracts in the public sector are generally terminable at any time for convenience of the contracting agency or group
purchasing organization (“GPO”) or upon default. Furthermore, our inability to enter into or retain contracts with GPOs may
threaten our ability to sell to customers in those GPOs and compete. The effect of any of these possible actions could adversely
affect our business, results of operations or cash flows. In addition, the adoption of new or modified procurement regulations and
other requirements may increase our compliance costs and reduce our gross margins, which could have a negative effect on our
business, results of operations or cash flows.

If we fail to provide high-quality services to our customers, or if our third-party service providers fail to provide high-quality
services to our customers, our reputation, business, results of operations or cash flows could be adversely affected.

Our service offerings include field services, managed services, warranties, configuration services, partner services and
telecom services. Additionally, we deliver and manage mission critical software, systems and network solutions for our customers.
We also offer certain services, such as implementation and installation services and repair services, to our customers through
various third-party service providers engaged to perform these services on our behalf. If we or our third-party service providers
fail to provide high quality services to our customers or such services result in a disruption of our customers’ businesses, this
could, among other things, result in legal claims and proceedings and liability. Moreover, as we expand our services and solutions
business, we may be exposed to additional operational, regulatory and other risks. We also could incur liability for failure to comply
with the rules and regulations applicable to the new services and solutions we provide to our customers. If any of the foregoing
were to occur, our reputation with our customers, our brand and our business, results of operations or cash flows could be adversely
affected.

If we lose any of our key personnel, or are unable to attract and retain the talent required for our business, our business could
be disrupted and our financial performance could suffer.

Our success is heavily dependent upon our ability to attract, develop, engage and retain key personnel to manage and

grow our business, including our key executive, management, sales, services and technical coworkers.

Our future success will depend to a significant extent on the efforts of Thomas E. Richards, our Chairman and Chief
Executive Officer, as well as the continued service and support of our other executive officers. Our future success also will depend
on our ability to retain our customer-facing coworkers, who have been given critical CDW knowledge regarding, and the opportunity
to develop strong relationships with, many of our customers. In addition, as we seek to expand our offerings of value-added services
and solutions, our success will even more heavily depend on attracting and retaining highly skilled technology specialists and
engineers, for whom the market is extremely competitive.

Our inability to attract, develop and retain key personnel could have an adverse effect on our relationships with our vendor
partners and customers and adversely affect our ability to expand our offerings of value-added services and solutions. Moreover,
our inability to train our sales, services and technical personnel effectively to meet the rapidly changing technology needs of our
customers could cause a decrease in the overall quality and efficiency of such personnel. Such consequences could adversely affect
our business, results of operations or cash flows.

The interruption of the flow of products from suppliers could disrupt our supply chain.

A significant portion of the products we sell are manufactured or purchased by our vendor partners outside of the U.S.,
primarily in Asia. Political, social or economic instability in Asia, or in other regions in which our vendor partners purchase or
manufacture the products we sell, could cause disruptions in trade, including exports to the U.S. Other events that could also cause
disruptions to our supply chain include:

• the imposition of additional trade law provisions or regulations;

• the imposition of additional duties, tariffs and other charges on imports and exports;

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• foreign currency fluctuations;

• natural disasters or other adverse occurrences at, or affecting, any of our suppliers’ facilities;

• restrictions on the transfer of funds;

• the financial instability or bankruptcy of manufacturers; and

• significant labor disputes, such as strikes.

We cannot predict whether the countries in which the products we sell are purchased or manufactured, or may be purchased
or manufactured in the future, will be subject to new or additional trade restrictions or sanctions imposed by the U.S. or foreign
governments, including the likelihood, type or effect of any such restrictions. Trade restrictions, including new or increased tariffs
or quotas, embargoes, sanctions, safeguards and customs restrictions against the products we sell, as well as foreign labor strikes
and work stoppages or boycotts, could increase the cost or reduce the supply of product available to us and adversely affect our
business, results of operations or cash flows. In addition, our exports are subject to regulations and noncompliance with these
requirements could have a negative effect on our business, results of operations or cash flows.

A natural disaster or other adverse occurrence at one of our primary facilities or customer data centers could damage our
business.

We have two warehouse and distribution facilities in the United States and one in the United Kingdom. If the warehouse
and distribution equipment at one of our distribution centers were to be seriously damaged by a natural disaster or other adverse
occurrence, we could utilize another distribution center or third-party distributors to ship products to our customers. However,
this may not be sufficient to avoid interruptions in our service and may not enable us to meet all of the needs of our customers
and would cause us to incur incremental operating costs. In addition, we operate three customer data centers and numerous sales
offices which may contain both business-critical data and confidential information of our customers. A natural disaster or other
adverse occurrence at any of the customer data centers or at any of our major sales offices could negatively impact our business,
results of operations or cash flows.

We are heavily dependent on commercial delivery services.

We generally ship hardware products to our customers by FedEx, United Parcel Service and other commercial delivery
services and invoice customers for delivery charges. If we are unable to pass on to our customers future increases in the cost of
commercial delivery services, our profitability could be adversely affected. Additionally, strikes, inclement weather, natural
disasters or other service interruptions by such shippers could adversely affect our ability to deliver products on a timely basis.

We are exposed to accounts receivable and inventory risks.

We extend credit to our customers for a significant portion of our net sales, typically on 30-day payment terms. We are
subject to the risk that our customers may not pay for the products they have purchased, or may pay at a slower rate than we have
historically experienced, the risk of which is heightened during periods of economic downturn or uncertainty or, in the case of
public sector customers, during periods of budget constraints.

We are also exposed to inventory risks as a result of the rapid technological changes that affect the market and pricing
for the products we sell. We seek to minimize our inventory exposure through a variety of inventory management procedures and
policies, including our rapid-turn inventory model, as well as vendor price protection and product return programs. However, if
we were unable to maintain our rapid-turn inventory model, if there were unforeseen product developments that created more
rapid obsolescence or if our vendor partners were to change their terms and conditions, our inventory risks could increase. We
also from time to time take advantage of cost savings associated with certain opportunistic bulk inventory purchases offered by
our vendor partners or we may decide to carry high inventory levels of certain products that have limited or no return privileges
due to customer demand or request. These bulk purchases could increase our exposure to inventory obsolescence.

We could be exposed to additional risks if we continue to make strategic investments or acquisitions or enter into alliances.

We may continue to pursue transactions, including strategic investments, acquisitions or alliances, in an effort to extend
or complement our existing business. These types of transactions involve numerous business risks, including finding suitable
transaction partners and negotiating terms that are acceptable to us, the diversion of management’s attention from other business
concerns, extending our product or service offerings into areas in which we have limited experience, entering into new geographic
markets, the potential loss of key coworkers or business relationships and successfully integrating acquired businesses, any of
which could adversely affect our operations.

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In addition, our financial results could be adversely affected by financial adjustments required by accounting principles
generally accepted in the United States of America (“GAAP”) in connection with these types of transactions where significant
goodwill or intangible assets are recorded. To the extent the value of goodwill or identifiable intangible assets with indefinite lives
becomes impaired, we may be required to incur material charges relating to the impairment of those assets.

Our future operating results may fluctuate significantly.

We may experience significant variations in our future quarterly results of operations. These fluctuations may cause the
market price of our common stock to be volatile and may result from many factors, including the condition of the technology
industry in general, shifts in demand and pricing for hardware, software and services and the introduction of new products or
upgrades.

Our operating results are also highly dependent on our level of gross profit as a percentage of net sales. Our gross profit
percentage fluctuates due to numerous factors, some of which may be outside of our control, including general macroeconomic
conditions; pricing pressures; changes in product costs from our vendor partners; the availability of price protection, purchase
discounts and incentive programs from our vendor partners; changes in product, order size and customer mix; the risk of some
items in our inventory becoming obsolete; increases in delivery costs that we cannot pass on to customers; and general market
and competitive conditions.

In addition, our cost structure is based, in part, on anticipated sales and gross margins. Therefore, we may not be able to
adjust our cost structure quickly enough to compensate for any unexpected sales or gross margin shortfall, and any such inability
could have an adverse effect on our business, results of operations or cash flows.

Fluctuations in foreign currency have an effect on our reported results of operations.

Our exposure to fluctuations in foreign currency rates results primarily from the translation exposure associated with the
preparation of our Consolidated Financial Statements. While our Consolidated Financial Statements are reported in U.S. dollars,
the financial statements of our subsidiaries outside the U.S. are prepared using the local currency as the functional currency and
translated into U.S. dollars. As a result, fluctuations in the exchange rate of the U.S. dollar relative to the local currencies of our
international subsidiaries, particularly the British pound and the Canadian dollar, could cause fluctuations in our reported results
of operations. We also have foreign currency exposure to the extent sales and purchases are not denominated in a subsidiary’s
functional currency, such as sales and purchases in euros, which could have an adverse effect on our business, results of operations
or cash flows.

We are exposed to risks from legal proceedings and audits.

We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial,

employment, tort and other litigation.

We are subject to intellectual property infringement claims against us in the ordinary course of our business, either because
of the products and services we sell or the business systems and processes we use to sell such products and services, in the form
of cease-and-desist letters, licensing inquiries, lawsuits and other communications and demands. In our industry, such intellectual
property claims have become more frequent as the complexity of technological products and the intensity of competition in our
industry have increased. Increasingly, many of these assertions are brought by non-practicing entities whose principal business
model is to secure patent licensing revenue, but we may also be subject to suits from inventors, competitors or other patent holders
who may seek licensing revenue, lost profits and/or an injunction preventing us from engaging in certain activities, including
selling certain products and services.

Because of our significant sales to governmental entities, we also are subject to audits by federal, state, international,
national, provincial and local authorities. We also are subject to audits by various vendor partners and large customers, including
government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims
under various contracts.

Current and future litigation, infringement claims, governmental proceedings and investigations, audits or indemnification
claims that we face, including the SEC’s investigation of our vendor partner program incentives, may result in substantial costs
and expenses and significantly divert the attention of our management regardless of the outcome. In addition, these matters could
lead to increased costs or interruptions of our normal business operations. Litigation, infringement claims, governmental
proceedings and investigations, audits or indemnification claims involve uncertainties and the eventual outcome of any such matter
could adversely affect our business, results of operations or cash flows.

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Failure to comply with the laws and regulations applicable to our operations could adversely impact our business, results of
operations or cash flows.

Our operations are subject to numerous U.S. and foreign laws and regulations in a number of areas including areas of
labor and employment, advertising, e-commerce, tax, import and export requirements, anti-corruption, data privacy requirements,
anti-competition, and environmental, health, and safety. Compliance with these laws, regulations and similar requirements may
be onerous and expensive, and they may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance
and doing business, and the risk of noncompliance. We have implemented policies and procedures designed to help ensure
compliance with applicable laws and regulations, but there can be no guarantee against coworkers, contractors, or agents violating
such laws and regulations or our policies and procedures. As a public company, we also are subject to increasingly complex public
disclosure, corporate governance and accounting requirements that increase compliance costs and require significant management
focus.

We have significant deferred cancellation of debt income.

As a result of a 2009 debt modification, we realized $395.5 million of cancellation of debt income (“CODI”). We made
an election under Code Section 108(i) to defer this CODI from taxable income, pursuant to which we are also required to defer
certain original issue discount (“OID”) deductions as they accrue. As of December 31, 2013, we had deferred approximately $114.5
million of OID deductions. Starting in 2014, we were required to include the deferred CODI and the deferred OID into taxable
income ratably over a five-year period ending in 2018. Because we have more CODI than the aggregate of our deferred OID on
the relevant remaining debt instruments, we will have a future cash tax liability associated with our significant deferred CODI.
We have reflected the associated cash tax liability in our deferred taxes for financial accounting purposes.

All of our deferred CODI will be accelerated into current taxable income if, prior to 2018, we engage in a so-called
“impairment transaction” and the gross value of our assets immediately afterward is less than 110% of the sum of our total liabilities
and the tax on the net amount of our deferred CODI and OID (the “110% test”) as determined under the applicable Treasury
Regulations. An “impairment transaction” is any transaction that impairs our ability to pay the tax on our deferred CODI, and
includes dividends or distributions with respect to our equity and charitable contributions, in each case in a manner that is not
consistent with our historical practice within the meaning of the applicable Treasury Regulations.

Prior to 2018, our willingness to pay dividends or make distributions with respect to our equity could be adversely affected
if, at the time, we do not meet the 110% test and, as a result, the payment of a dividend or the making of a distribution would
accelerate the tax payable with respect to our deferred CODI. We believe that, based on our interpretation of applicable Treasury
Regulations, the gross value of our assets exceeds 110% of the sum of our total liabilities and the tax on the net amount of our
deferred CODI and OID as of the filing date of this Annual Report on Form 10-K. However, we cannot assure you that this will
continue to be true in the future.

Risks Related to Our Indebtedness

We have a substantial amount of indebtedness, which could have important consequences to our business.

We have a substantial amount of indebtedness. As of December 31, 2015, we had $3.3 billion of total long-term debt
outstanding, as defined by GAAP, and $439.6 million of obligations outstanding under our inventory financing agreements, and
the ability to borrow an additional $843.1 million under our senior secured asset-based revolving credit facility (the “Revolving
Loan”) and an additional £50.0 million ($73.7 million) under our Kelway revolving credit facility (“Kelway Credit Facility”). Our
substantial indebtedness could have important consequences, including the following:

• 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;

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•

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.

Restrictive covenants under our senior credit facilities and, to a lesser degree, our indentures may adversely affect our operations
and liquidity.

Our senior credit facilities and, to a lesser degree, our indentures contain, and any future indebtedness of ours may contain,

various covenants that limit our ability to, among other things:

• 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;

• create liens;

• 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.

As a result of these covenants, we are limited in the manner in which we conduct our business and we may be unable to
engage in favorable business activities or finance future operations or capital needs. A breach of any of these covenants or any of
the other restrictive covenants would result in a default under our senior credit facilities. Upon the occurrence of an event of default
under our senior credit facilities, the lenders:

• 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.

The acceleration of amounts outstanding under our senior credit facilities would likely trigger an event of default under

our existing indentures.

If we were unable to repay those amounts, the lenders under our senior credit facilities could proceed against the collateral
granted to them to secure our borrowings thereunder. We have pledged a significant portion of our assets as collateral under our
senior credit facilities. If the lenders under our senior credit facilities accelerate the repayment of borrowings, we cannot assure
you that we will have sufficient assets to repay our senior credit facilities and our other indebtedness or the ability to borrow
sufficient funds to refinance such indebtedness. Even if we were able to obtain new financing, it may not be on commercially
reasonable terms, or terms that are acceptable to us.

In addition, under our Revolving Loan, we are permitted to borrow an aggregate amount of up to $1,250.0 million.
However, our ability to borrow under our Revolving Loan is limited by a borrowing base and a liquidity condition. The borrowing
base at any time equals the sum of up to 85% of CDW LLC and its subsidiary guarantors’ eligible accounts receivable (net of
accounts reserves) (up to 30% of such eligible accounts receivable which can consist of federal government accounts receivable)
plus the lesser of (i) 75% of CDW LLC and its subsidiary guarantors’ eligible inventory (valued at cost and net of inventory
reserves) and (ii) the product of 85% multiplied by the net orderly liquidation value percentage multiplied by eligible inventory
(valued at cost and net of inventory reserves), less reserves (other than accounts reserves and inventory reserves). The borrowing
base in effect as of December 31, 2015 was $1,423.1 million, and therefore, did not restrict our ability to borrow under our
Revolving Loan as of that date.

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Our ability to borrow under our Revolving Loan is also limited by a minimum liquidity condition, which provides that,
if excess cash availability is less than the lesser of (i) $125.0 million and (ii) the greater of (A) 10% of the borrowing base and
(B) $100.0 million, the lenders are not required to lend any additional amounts under our Revolving Loan unless the consolidated
fixed charge coverage ratio (as defined in the credit agreement for our Revolving Loan) is at least 1.0 to 1.0. Moreover, our
Revolving Loan provides discretion to the agent bank acting on behalf of the lenders to impose additional availability reserves,
which could materially impair the amount of borrowings that would otherwise be available to us. We cannot assure you that the
agent bank will not impose such reserves or, were it to do so, that the resulting impact of this action would not materially and
adversely impair our liquidity.

We will be required to generate sufficient cash to service our indebtedness and, if not successful, we may be forced to take other
actions to satisfy our obligations under our indebtedness.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial and operating
performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other
factors beyond our control. Our outstanding long-term debt will impose significant cash interest payment obligations on us and,
accordingly, we will have to generate significant cash flow from operating activities to fund our debt service obligations. We
cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal,
premium, if any, and interest on our indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results
of Operations-Liquidity and Capital Resources” included elsewhere in this report.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce
or delay capital expenditures, sell assets or operations, seek additional debt or equity capital, restructure or refinance our
indebtedness, or revise or delay our strategic plan. We cannot assure you that we would be able to take any of these actions, that
these actions would be successful and permit us to meet our scheduled debt service obligations or satisfy our capital requirements,
or that these actions would be permitted under the terms of our existing or future debt agreements, including our senior credit
facilities and indentures. In the absence of such operating results and resources, we could face substantial liquidity problems and
might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior credit
facilities restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate
those dispositions or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet
any debt service obligations then due. Furthermore, Madison Dearborn and Providence Equity have no obligation to provide us
with debt or equity financing.

If we cannot make scheduled payments on our debt, we will be in default and, as a result:

• 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 Kelway Credit Facility could terminate their commitments to lend us money;
and

• we could be forced into bankruptcy or liquidation.

Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more debt, including secured debt.
This could further increase the risks associated with our leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of our senior
credit facilities and indentures do not fully prohibit us or our subsidiaries from doing so. To the extent that we incur additional
indebtedness or such other obligations, the risks associated with our substantial indebtedness described above, including our
possible inability to service our debt, will increase. As of December 31, 2015, we had $843.1 million available for additional
borrowing under our Revolving Loan after taking into account borrowing base limitations (net of $2.1 million of issued and
undrawn letters of credit and $439.6 million of reserves related to our floorplan sub-facility) and an additional £50.0 million ($73.7
million) available under our Kelway Credit Facility.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase
significantly.

Certain of our borrowings, primarily borrowings under our senior credit facilities, are at variable rates of interest and
expose us to interest rate risk. As of December 31, 2015, we had $1,586.5 million of variable rate debt outstanding, $1,498.1
million of which is subject to a 1.0% LIBOR floor. If interest rates increase above 1% per annum, our debt service obligations on
the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would
decrease. Although we have entered into interest rate cap agreements on our term loan facility to reduce interest rate volatility, we

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cannot assure you we will be able to enter into interest rate cap agreements in the future on acceptable terms or that such caps or
the caps we have in place now will be effective.

Risks Related to Ownership of Our Common Stock

Our common stock price may be volatile and may decline regardless of our operating performance, and holders of our common
stock could lose a significant portion of their investment.

The market price for our common stock may be volatile. Our stockholders may not be able to resell their shares of common
stock at or above the price at which they purchased such shares, due to fluctuations in the market price of our common stock,
which may be caused by a number of factors, many of which we cannot control, including the risk factors described in this Annual
Report on Form 10-K and the following:

•

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, including Madison Dearborn
and Providence Equity;

• 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.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue
to affect the market prices of equity securities of many companies, including companies in our industry. In the past, securities
class action litigation has followed periods of market volatility. If we were involved in securities litigation, we could incur substantial
costs, and our resources and the attention of management could be diverted from our business.

Future sales or distributions of our common stock, or the perception in the public markets that these sales or distributions may
occur, may depress our stock price.

Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur,
could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional
shares. As of February 19, 2016, there were 167,740,043 shares of our common stock outstanding. The shares of our common
stock sold in our initial public offering and in registered secondary offerings are freely tradable without restriction under the
Securities Act of 1933, as amended (the “Securities Act”), except that any shares of our common stock that may be acquired by
our directors, executive officers and other affiliates, as that term is defined in the Securities Act, may be sold only in compliance
with certain volume limitations and other restrictions of Rule 144 under the Securities Act.

The remaining shares of our common stock, to the extent not previously sold pursuant to an exemption from registration,
will continue to be “restricted securities” within the meaning of Rule 144 under the Securities Act and subject to certain restrictions
on resale. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold
pursuant to an exemption from registration such as Rule 144 under the Securities Act.

As of February 19, 2016, the holders of approximately 16,000,000 shares of our common stock, including Madison
Dearborn and Providence Equity, will continue to have the right to require us to register the sales of such shares under the Securities
Act, under the terms of an agreement between us and the holders. As of February 19, 2016, Madison Dearborn beneficially owned
approximately 4.9% of our common stock and Providence Equity beneficially owned approximately 4.3% of our common stock.
Madison Dearborn and Providence Equity are permitted to distribute all or a portion of the shares of common stock that they hold
in one or more pro rata distributions to their respective limited partners, and the recipients of the shares would generally be permitted
to sell the shares immediately pursuant to Rule 144 under the Securities Act. A distribution of shares by Madison Dearborn or
Providence Equity, and the subsequent sale of shares by the recipients, or the perception that such a distribution and subsequent
sale of shares might occur, could adversely affect the price of our common stock and could impair our ability to raise capital
through the sale of additional shares.

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In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of
our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding
shares of our common stock.

Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us
that you might consider favorable.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may

make the acquisition of the Company more difficult without the approval of our Board of Directors. These provisions:

•

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 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.

Our amended and restated certificate of incorporation also contains a provision that provides us with protections similar
to Section 203 of the Delaware General Corporation Law, and will prevent us from engaging in a business combination with a
person who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common
stock, unless board or stockholder approval is obtained prior to the acquisition. These anti-takeover provisions and other provisions
under Delaware law could discourage, delay or prevent a transaction involving a change in control of the Company, even if doing
so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for our
stockholders to elect directors of their choosing and to cause us to take other corporate actions our stockholders desire.

Conflicts of interest may arise because some of our directors are principals of Madison Dearborn and Providence Equity.

Paul Finnegan and Robin Selati, who are principals of Madison Dearborn, and Glenn Creamer and Michael Dominguez,
who are managing directors of Providence Equity, serve on our Board of Directors. Madison Dearborn, Providence Equity and
the entities respectively controlled by them may hold equity interests in entities that directly or indirectly compete with us, and
companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts arise
between the interests of Madison Dearborn or Providence Equity, on the one hand, and of other stockholders, on the other hand,
these directors may not be disinterested. Although our directors and officers have a duty of loyalty to us under Delaware law and
our amended and restated certificate of incorporation, transactions that we enter into in which a director or officer has a conflict
of interest are generally permissible so long as (1) the material facts relating to the director’s or officer’s relationship or interest
as to the transaction are disclosed to our Board of Directors and a majority of our disinterested directors approves the transaction,
(2) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our stockholders
and a majority of our disinterested stockholders approve the transaction or (3) the transaction is otherwise fair to us. Our amended
and restated certificate of incorporation also provides that any principal, officer, member, manager and/or employee of Madison
Dearborn or Providence Equity or any entity that controls, is controlled by or under common control with Madison Dearborn or
Providence Equity (other than us or any company that is controlled by us) or an investment fund managed by Madison Dearborn
or Providence Equity will not be required to offer any transaction opportunity of which they become aware to us and could take
any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is
offered to them solely in their capacities as our directors.

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We cannot assure you that we will continue to pay dividends on our common stock or repurchase any of our common stock
under our share repurchase program, and our indebtedness and certain tax considerations could limit our ability to continue
to pay dividends on, or make share repurchases of, our common stock. If we do not continue to pay dividends, you may not
receive any return on investment unless you are able to sell your common stock for a price greater than your purchase price.

We expect to continue to pay a cash dividend on our common stock of $0.1075 per share per quarter, or $0.43 per share
per annum. However, any determination to pay dividends in the future will be at the discretion of our Board of Directors. Any
determination to pay dividends on, or repurchase, shares of our common stock in the future will depend upon our results of
operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness we
may incur, restrictions imposed by applicable law, tax considerations and other factors our Board of Directors deems relevant. In
addition, our ability to pay dividends on, or repurchase, shares of our common stock will be limited by restrictions on our ability
to pay dividends or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions
to us, in each case, under the terms of our current and any future agreements governing our indebtedness. There can be no assurance
that we will continue to pay a dividend at the current rate or at all or that we will repurchase shares of our common stock. If we
do not pay dividends in the future, realization of a gain on your investment will depend entirely on the appreciation of the price
of our common stock, which may never occur. See “--Risks Related to Our Business--We have significant deferred cancellation
of debt income” for a discussion of certain tax considerations that could affect our willingness to pay dividends in the future.

We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our
subsidiaries to meet our obligations.

We are a holding company that does not conduct any business operations of our own. As a result, we are largely dependent
upon cash dividends and distributions and other transfers from our subsidiaries to meet our obligations. The agreements governing
the indebtedness of our subsidiaries impose restrictions on our subsidiaries’ ability to pay dividends or other distributions to us.
The deterioration of the earnings from, or other available assets of, our subsidiaries for any reason could also limit or impair their
ability to pay dividends or other distributions to us.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

As of December 31, 2015, we owned or leased a total of 2.5 million square feet of space, primarily in the U.S., Canada
and United Kingdom. We own two properties: a combined office and a 442,000 square foot distribution center in Vernon Hills,
Illinois and a 513,000 square foot distribution center in North Las Vegas, Nevada. In addition, we conduct sales, services and
administrative activities in various leased locations primarily in the U.S., Canada and United Kingdom, including data centers in
Madison, Wisconsin, Minneapolis, Minnesota and the United Kingdom.

We believe our facilities are well maintained, suitable for our business and occupy sufficient space to meet our operating
needs. As part of our normal business, we regularly evaluate sales center performance and site suitability. Leases covering our
currently occupied leased properties expire at varying dates, generally within the next ten years. We anticipate no difficulty in
retaining occupancy through lease renewals, month-to-month occupancy or replacing the leased properties with equivalent
properties. We believe that suitable additional or substitute leased properties will be available as required.

Item 3. Legal Proceedings

We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial,
intellectual property, employment, tort and other litigation matters. We are also subject to audit by federal, state, international,
national, provincial and local authorities, and by various partners, group purchasing organizations and customers, including
government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims
under various contracts. From time to time, certain of our customers file voluntary petitions for reorganization or liquidation under
the U.S. bankruptcy laws or similar laws of the jurisdictions for our business activities outside of the United States. In such cases,
certain pre-petition payments received by us could be considered preference items and subject to return to the bankruptcy
administrator.

On October 29, 2015, the Company received a request for production of documents in connection with an investigation
by the SEC of the Company’s vendor partner program incentives. The Company has produced documents to the SEC and is
continuing to cooperate with the SEC in this matter.

As of December 31, 2015, we do not believe that there is a reasonable possibility that any material loss exceeding the
amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of
20

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these proceedings and matters are inherently unpredictable. As such, our financial condition and results of operations could be
adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.

Item 4. Mine Safety Disclosures

Not applicable.

Executive Officers

Name
Thomas E. Richards

Dennis G. Berger

Neal J. Campbell

Christina M. Corley

Douglas E. Eckrote

Christine A. Leahy

Christina V. Rother

Jonathan J. Stevens

Matthew A. Troka

Ann E. Ziegler

Age Position

61 Chairman, President and Chief Executive Officer, and Director

51 Senior Vice President and Chief Coworker Services Officer

54 Senior Vice President and Chief Marketing Officer

48 Senior Vice President - Corporate Sales

51 Senior Vice President - Strategic Solutions and Services

51 Senior Vice President - International, Chief Legal Officer and Corporate Secretary

52 Senior Vice President - Public and Advanced Technology Sales

46 Senior Vice President - Operations and Chief Information Officer

45 Senior Vice President - Product and Partner Management

57 Senior Vice President and Chief Financial Officer

Thomas E. Richards serves as our Chairman, President and Chief Executive Officer, as a member of our board of directors
and as a manager of CDW LLC, our wholly owned subsidiary. Mr. Richards has served as our President and Chief Executive
Officer since October 2011 and was named Chairman on January 1, 2013. From 2009 to 2011, Mr. Richards served as our President
and Chief Operating Officer. Prior to joining CDW, Mr. Richards held leadership positions with Qwest Communications
International Inc. (“Qwest”), a broadband Internet-based communications company. From 2008 to 2009, he served as Executive
Vice President and Chief Operating Officer, where he was responsible for the day-to-day operation and performance of Qwest,
and before assuming that role, was the Executive Vice President of the Business Markets Group from 2005 to 2008. Mr. Richards
also has served as Chairman and Chief Executive Officer of Clear Communications Corporation and as Executive Vice President
of Ameritech Corporation. Mr. Richards serves as a board member of The Northern Trust Corporation, Junior Achievement of
Chicago, Rush University Medical Center and the University of Pittsburgh. Mr. Richards also is a member of the Economic Club
of Chicago and the Executives’ Club of Chicago. Mr. Richards is a graduate of the University of Pittsburgh where he earned a
bachelor’s degree and a graduate of Massachusetts Institute of Technology where he earned a Master of Science in Management
as a Sloan Fellow.

Dennis G. Berger serves as our Senior Vice President and Chief Coworker Services Officer. Mr. Berger joined CDW in
2005 as Vice President-Coworker Services. In 2007, he was named Senior Vice President and Chief Coworker Services Officer.
Mr. Berger is responsible for leading CDW’s programs in coworker learning and development, benefits, compensation, performance
management, coworker relations and talent acquisition. Prior to joining CDW, he served as Vice President of Human Resources
at PepsiAmericas, a beverage company, from 2002 to 2005. Mr. Berger has also held human resources positions of increasing
responsibility at Pepsi Bottling Group, Inc., Pepsico, Inc. and GTE Corporation. Mr. Berger serves on the board of directors of
Glenwood Academy, the Anti-Defamation League of Chicago and Skills for Chicagoland’s Future. Mr. Berger is a graduate of
Northeastern University where he earned a bachelor’s degree and a graduate of John M. Olin School of Business at Washington
University in St. Louis where he earned a Master of Business Administration.

Neal J. Campbell serves as our Senior Vice President and Chief Marketing Officer. Mr. Campbell joined CDW in 2011,
and is responsible for the strategy and development of CDW’s advertising, public relations, channel marketing, marketing
intelligence and research, merchandising, microsites, creative services and direct marketing content, along with relationship
marketing, corporate communications and e-commerce initiatives including content development, online marketing and e-
procurement. Prior to joining CDW, Mr. Campbell served as Chief Executive Officer of TrafficCast, a provider of real-time and
predictive traffic information to Google, Yahoo and others from 2008 to 2011. From 2006 to 2008, he served as Executive Vice
President and General Manager-Strategic Marketing and Next Generation Products for ISCO International, a manufacturer of
wireless telecommunications components. Mr. Campbell also spent 17 years with Motorola, most recently as Vice President and
General Manager, GSM Portfolio Marketing and Planning for the company’s mobile device business. He currently serves as a
board member of Junior Achievement of Chicago, and is on the Executive Advisory Council of Bradley University. During the
previous five years, Mr. Campbell served on the board of directors of TrafficCast. Mr. Campbell is a graduate of Bradley University
where he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earned
a Master of Business Administration.

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Christina M. Corley serves as our Senior Vice President - Corporate Sales and is responsible for managing all aspects
of our corporate sales force, including sales force strategy, structure, goals, operations, revenue generation and training and
development. Prior to joining CDW in 2011, Ms. Corley served as President and Chief Operating Officer of Zones, Inc., a provider
of IT products and solutions, from 2006 to 2011. She served as Executive Vice President of Purchasing and Operations for Zones,
Inc. from 2005 to 2006. She served as President of Corporate PC Source (“CPCS”), a wholly owned subsidiary of Zones, Inc.,
from 2003 to 2005. Prior to its acquisition by Zones, Inc., Ms. Corley served as Chief Executive Officer of CPCS from 1999 to
2003. Ms. Corley began her career in sales and marketing, holding various positions at IBM, Dataflex and VisionTek. She currently
serves as a board member of the Boys and Girls Club of Chicago. Ms. Corley is a graduate of the University of Illinois at Urbana-
Champaign where she earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management
where she earned a Master of Business Administration in management and strategy.

Douglas E. Eckrote serves as our Senior Vice President - Strategic Solutions and Services and is responsible for our
technology specialist teams focusing on servers and storage, unified communications, security, wireless, power and cooling,
networking, software licensing and mobility solutions. Through the end of 2015, Mr. Eckrote had responsibility for CDW Canada.
Mr. Eckrote joined CDW in 1989 as an account manager. Mr. Eckrote was appointed Director of Operations in 1996, Vice President
of Operations in 1999 and Senior Vice President of Purchasing in 2001. In 2001, he was named Senior Vice President of Purchasing
and Operations. He was named Senior Vice President of Operations, Services and Canada in 2006 and assumed his current role
in 2009. Prior to joining CDW, Mr. Eckrote worked in outside sales for Arrow Electronics and Cintas Uniform Company. Mr.
Eckrote currently serves on the Board of Directors of The Northern Illinois Food Bank, the Board of Trustees of The Center for
Enriched Living and the Board of Trustees of Westlake Christian Academy. Mr. Eckrote is a graduate of Purdue University where
he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earned an
Executive Master of Business Administration.

Christine A. Leahy serves as our Senior Vice President - International, Chief Legal Officer and Corporate Secretary and
is responsible for our international growth platform, including CDW Canada and Kelway, CDW’s U.K.-based technology solutions
provider with locations in Europe, the Middle East, Africa and Asia. In addition, she is responsible for the legal, corporate
governance, enterprise risk management and compliance functions. Ms. Leahy joined CDW in 2002 as the Company’s first general
counsel. Prior to that, Ms. Leahy served as a corporate partner in the Chicago office of Sidley Austin LLP where she specialized
in mergers and acquisitions, strategic counseling, corporate governance and securities law. Ms. Leahy serves as Vice Chair of the
board of trustees of Children’s Home and Aid. She also is a member of the Economic Club of Chicago and The Chicago Network.
In addition, she is a founder and current sponsor of CDW's Women’s Opportunity Network, a business resource group dedicated
to helping women advance and grow into tomorrow’s leaders. Ms. Leahy is a graduate of Brown University where she earned a
bachelor’s degree and a graduate of Boston College Law School where she earned her Juris Doctor. She also completed the CEO
Perspective and Women’s Director Development Programs at Northwestern University’s Kellogg School of Management.

Christina V. Rother serves as our Senior Vice President - Public and Advanced Technology Sales and is responsible for
managing all aspects of our public sector and advanced technology sales forces, including sales force strategy, structure, goals,
operations, revenue generation and training and development. Ms. Rother joined CDW in 1991 as an account manager. In 2002,
she was appointed Vice President for Education and State and Local Sales. In 2005, she was chosen to lead our newly formed
healthcare sales team. Beginning in 2006, Ms. Rother has held various positions ranging from Group Vice President of CDW
Government LLC, President of CDW Government LLC and Senior Vice President of Sales. In September 2011, Ms. Rother
assumed her current role as Senior Vice President of Public and Advanced Technology Sales. Prior to joining CDW, Ms. Rother
held a number of sales positions with technology companies including Laser Computers and Price Electronics. Ms. Rother currently
serves as chair of the board of directors of the Make-A-Wish Foundation of Illinois. Ms. Rother is a graduate of the University of
Illinois at Chicago where she earned a bachelor’s degree.

Jonathan J. Stevens serves as our Senior Vice President - Operations and Chief Information Officer. Mr. Stevens joined
CDW in 2001 as Vice President-Information Technology, was named Chief Information Officer in 2002 and Vice President-
International and Chief Information Officer from 2005 until 2006. In 2007, he was named Senior Vice President and Chief
Information Officer and assumed his current role in 2009. Mr. Stevens is responsible for the strategic direction of our information
technology. Additionally, he holds responsibility for our distribution centers, transportation, facilities, customer relations and
operational excellence practices. Prior to joining CDW, Mr. Stevens served as regional technology director for Avanade, an
international technology integration company formed through a joint venture between Microsoft and Accenture from 2000 to
2001. Prior to that, Mr. Stevens was a principal with Microsoft Consulting Services and led an information technology group for
a corporate division of AT&T/NCR. He currently serves on the board of directors of SingleWire Software, LLC. Mr. Stevens is a
graduate of the University of Dayton where he earned a bachelor’s degree.

Matthew A. Troka serves as our Senior Vice President - Product and Partner Management. Mr. Troka is responsible for
managing our relationships with all of our vendor partners. In addition, he directs the day-to-day operations of our purchasing
department. Mr. Troka joined CDW in 1992 as an account manager and became a sales manager in 1995. From 1998 to 2001, he

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served as Corporate Sales Director. From 2001 to 2004, Mr. Troka was Senior Director of Purchasing. From 2004 to 2006, Mr. Troka
served as Vice President of Purchasing. From 2006 to 2011, Mr. Troka was Vice President of Product and Partner Management.
In 2011, Mr. Troka was elected Senior Vice President of Product and Partner Management. Mr. Troka is a graduate of the University
of Illinois where he earned a bachelor’s degree.

Ann E. Ziegler serves as our Senior Vice President and Chief Financial Officer. Prior to joining CDW in 2008, Ms. Ziegler
spent 15 years at Sara Lee Corporation (“Sara Lee”), a global consumer goods company, in a number of executive roles including
finance, mergers and acquisitions, strategy and general management positions in both U.S. and international businesses. Most
recently, from 2005 until 2008, Ms. Ziegler served as Chief Financial Officer and Senior Vice President of Administration for Sara
Lee Food and Beverage. Prior to joining Sara Lee, Ms. Ziegler was a corporate attorney at Skadden, Arps, Slate, Meagher & Flom.
Ms. Ziegler serves on the boards of directors of Hanesbrands, Inc., Groupon, Inc. and the board of governors of the Smart Museum
of Art of the University of Chicago. During the previous five years, Ms. Ziegler also served on the board of directors of Unitrin,
Inc. Ms. Ziegler is a graduate of The College of William and Mary where she earned a bachelor’s degree and a graduate of the
University of Chicago Law School where she earned her Juris Doctor.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock has been listed on the NASDAQ Global Select Market since June 27, 2013 under the symbol “CDW.”
Prior to that date, there was no public market for our common stock. Shares sold in our initial public offering (“IPO”) were priced
at $17.00 per share on June 26, 2013. The following table sets forth the ranges of high and low sales prices per share of our common
stock as reported on the NASDAQ Global Select Market and the cash dividends per share of common stock declared for the two
most recent fiscal years.

Year Ended December 31,

2015

2014

High

Low

Dividends
Declared per
Share

High

Low

Dividends
Declared per
Share

46.92

41.99

39.32

38.44

40.07

33.01

34.19

33.21

0.1075

0.0675

36.08

33.80

32.41

27.53

27.59

30.07

26.70

22.72

0.0675

0.0425

Fourth quarter

Third quarter

Second quarter

First quarter

Holders

As of February 19, 2016, there were 59 holders of record of our common stock. The number of beneficial stockholders
is substantially greater than the number of holders of record because a portion of our common stock is held through brokerage
firms.

Dividends

On February 9, 2016, we announced that our Board of Directors declared a quarterly cash dividend on our common stock
of $0.1075 per share. The dividend will be paid on March 10, 2016 to all stockholders of record as of the close of business on
February 25, 2016.

We expect to continue to pay quarterly cash dividends on our common stock in the future, but such payments remain at
the discretion of our Board of Directors and will depend upon our results of operations, financial condition, business prospects,
capital requirements, contractual restrictions, any potential indebtedness we may incur, restrictions imposed by applicable law,
tax considerations and other factors that our Board of Directors deems relevant. In addition, our ability to pay dividends on our
common stock will be limited by restrictions on our ability to pay dividends or make distributions to our stockholders and on the
ability of our subsidiaries to pay dividends or make distributions to us, in each case, under the terms of our current and any future
agreements governing our indebtedness. For a discussion of our cash resources and needs and restrictions on our ability to pay
dividends, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital
Resources” included elsewhere in this report. For additional discussion of restrictions on our ability to pay dividends, see Note 8
(Long-Term Debt) to the accompanying Consolidated Financial Statements.

Issuer Purchases of Equity Securities

Information relating to our purchases of our common stock during the quarter ended December 31, 2015 is as follows:

Period

October 1 through October 31, 2015

November 1 through November 30, 2015

December 1 through December 31, 2015

Total

Total Number of
Shares Purchased
(in millions)

Average Price
Paid per Share

Total Number of Shares
Purchased as Part of a
Publicly Announced
Program (1) (in millions)

Maximum Dollar Value
of Shares that May Yet be
Purchased Under the
Program (2) (in millions)

— $

1.1

— $

1.1

—

43.77

—

43.77

— $

1.1

— $

1.1

306.7

258.7

(1)

On November 30, 2015, we completed a public offering of 9.2 million shares of our common stock by certain selling
stockholders, which included 1.2 million shares sold by the selling stockholders to the underwriters pursuant to the grant
of an option that was exercised in full. We did not receive any proceeds from the sale of these shares. Subsequent to the

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completion of this offering, we purchased from the underwriters 1.0 million of the shares of our common stock that were
subject to the offering at a price per share equal to the price paid by the underwriters to the selling stockholders in the
offering. All other share repurchases during the period were made through the open market.

(2)

On November 6, 2014, we announced that the Board of Directors approved a $500 million share repurchase program,
which became effective immediately, under which we may repurchase shares of our common stock in the open market
or through privately negotiated transactions, depending on share price, market conditions and other factors. The share
repurchase program does not obligate us to repurchase any dollar amount or number of shares and repurchases may be
commenced or suspended from time to time without prior notice.

Stock Performance Graph

The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material” or
“filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities
Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into a document filed under the Securities
Act of 1933 or the Securities Exchange Act of 1934.

The following graph compares the cumulative total shareholder return, calculated on a dividend reinvested basis, on
$100.00 invested at the opening of the market on June 27, 2013, the date our common stock first traded on the NASDAQ Global
Select Market, through and including the market close on December 31, 2015, with the cumulative total return for the same time
period of the same amount invested in the S&P MidCap 400 index and a peer group index. Our peer group index for 2015 consists
of the following companies: Accenture plc, Anixter International, Inc., Arrow Electronics, Inc., Avnet, Inc., CGI Group Inc.,
Genuine Parts Company, Henry Schein, Inc., Insight Enterprises, Inc., Owens & Minor, Inc., Patterson Companies, Inc., SYNNEX
Corporation, United Stationers Inc., W.W. Grainger, Inc. and Wesco International, Inc. This peer group was selected based on a
review of publicly available information about these companies and our determination that they met one or more of the following
criteria: (i) similar size in terms of revenue and/or enterprise value (one-third to three times our revenue or enterprise value);
(ii) operates in a business-to-business distribution environment; (iii) members of the technology industry; (iv) similar customers
(i.e., business, government, healthcare, and education); (v) companies that provide services and/or solutions; and (vi) similar
EBITDA and gross margins.

Shareholder returns over the indicated period are based on historical data and should not be considered indicative of

future shareholder returns.

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June 27, 2013

December 31, 2013

December 31, 2014

December 31, 2015

100

138

118

111

209

130

125

249

127

130

CDW Corp

S&P MidCap 400 index

CDW Peers

Recent Sales of Unregistered Securities

None.

Use of Proceeds from Registered Securities

None.

Item 6. Selected Financial Data

The selected financial data set forth below are not necessarily indicative of the results of future operations and should be
read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our
Consolidated Financial Statements and the related notes.

We have derived the selected financial data presented below as of December 31, 2015 and December 31, 2014 and for
the years ended December 31, 2015, 2014 and 2013 from our Consolidated Financial Statements and related notes. The selected
financial data as of December 31, 2012 and December 31, 2011 have been derived from our Consolidated Financial Statements
as of and for those periods and are not included in this report.

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(dollars and shares in millions, except per share amounts)
Statement of Operations Data:

Net sales

Cost of sales

Gross profit

Selling and administrative expenses

Advertising expense

Income from operations

Interest expense, net

Net loss on extinguishments of long-term debt

Gain on remeasurement of equity investment

Other income (expense), net

Income before income taxes

Income tax expense

Net income

Net income per common share:

Basic

Diluted

2015(5)

2014

2013

2012

2011

Years Ended December 31,

$ 12,988.7

$ 12,074.5

$ 10,768.6

$ 10,128.2

$ 9,602.4

10,872.9

10,153.2

2,115.8

1,226.0

1,921.3

1,110.3

147.8

742.0
(159.5)
(24.3)
98.1
(9.3)
647.0
(243.9)
403.1

2.37

2.35

138.0

673.0
(197.3)
(90.7)
—

2.7

387.7
(142.8)
244.9

1.44

1.42

9,008.3

1,760.3

1,120.9

130.8

508.6
(250.1)
(64.0)
—

1.0

195.5
(62.7)
132.8

0.85

0.84

Cash dividends declared per common share

$ 0.3100

$ 0.1950

$ 0.0425

Balance Sheet Data (at period end):

Cash and cash equivalents

Working capital

Total assets
Total debt and capitalized lease obligations (1)(2)

Total stockholders’ equity (deficit)

Other Financial Data:

Capital expenditures

Gross profit as a percentage of net sales
EBITDA (3)
Adjusted EBITDA (3)
Non-GAAP net income (4)

Statement of Cash Flows Data:

Net cash provided by (used in):

Operating activities
Investing activities

Financing activities

37.6

903.5

6,755.3

3,262.9

1,095.9

344.5

985.4

6,075.9

3,166.1

936.5

90.1

16.3%

$ 1,033.9

1,018.5

503.5

277.5
(354.4)
(226.5)

55.0

15.9%

792.9

907.0

409.9

435.0
(164.8)
(112.0)

188.1

810.9

5,899.3

3,226.0

711.7

47.1

16.3%

653.8

808.5

314.3

366.3
(47.1)
(168.3)

8,458.6

1,669.6

1,029.5

129.5

510.6
(307.4)
(17.2)
—

0.1

186.1
(67.1)
119.0

0.82

8,018.9

1,583.5

990.1

122.7

470.7
(324.2)
(118.9)
—

0.7

28.3
(11.2)
17.1

0.12

— $

—

37.9

666.5

5,673.5

3,724.5

136.5

99.9

538.1

5,907.9

4,006.2
(7.3)

41.4

16.5%

703.7

766.6

247.1

317.4
(41.7)
(338.0)

45.7

16.5%

557.4

717.3

198.8

214.7
(56.0)
(95.4)

(1)

Excludes borrowings of $439.6 million, $332.1 million, $256.6 million, $249.2 million and $278.7 million, as of
December 31, 2015, 2014, 2013, 2012, and 2011, respectively, under our inventory financing agreements. We do not
include these borrowings in total debt because we have not in the past incurred, and in the future do not expect to incur,
any interest expense or late fees under these agreements.

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(2)

(3)

Includes capitalized lease obligations of $3.2 million and $0.1 million as of December 31, 2015 and 2014, respectively,
which are included in Other liabilities on the Consolidated Balance Sheet.

EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization.
Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which
are described in the table below. We have included a reconciliation of EBITDA and Adjusted EBITDA in the table below.
Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial
measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or
includes amounts that are not normally included or excluded in the most directly comparable measure calculated and
presented in accordance with GAAP. Non-GAAP measures used by us may differ from similar measures used by other
companies, even when similar terms are used to identify such measures.

We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance
and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements.
Adjusted EBITDA is also the primary measure used in certain key covenants and definitions contained in the credit
agreement governing our Senior Secured Term Loan Facility (“Term Loan”), including the excess cash flow payment
provision, the restricted payment covenant and the net leverage ratio. These covenants and definitions are material
components of the Term Loan as they are used in determining the interest rate applicable to the Term Loan, our ability
to make certain investments, incur additional debt, and make restricted payments, such as dividends and share repurchases,
as well as whether we are required to make additional principal prepayments on the Term Loan beyond the quarterly
amortization payments. For further details regarding the Term Loan, see Note 8 (Long-Term Debt) to the accompanying
Consolidated Financial Statements.

The following unaudited table sets forth reconciliations of net income to EBITDA and EBITDA to Adjusted EBITDA
for the periods presented:

(in millions)

Net income

Depreciation and amortization

Income tax expense

Interest expense, net

EBITDA

Non-cash equity-based compensation
Net loss on extinguishment of long-term debt(a)
Loss (income) from equity investments(b)
Acquisition and integration expenses(c)
Gain on remeasurement of equity investment(d)
Other adjustments(e)
Adjusted EBITDA(f)

Years Ended December 31,

2015

2014

2013

2012

2011

403.1

$ 244.9

$ 132.8

$ 119.0

17.1

227.4

243.9

159.5

1,033.9

31.2

24.3

10.1

10.2
(98.1)
6.9

207.9

142.8

197.3

792.9

16.4

90.7
(2.2)
—

—
9.2

208.2

62.7

250.1

653.8

8.6

64.0
(0.6)
—

—
82.7

210.2

67.1

307.4

703.7

22.1

17.2
(0.3)
—

—
23.9

204.9

11.2

324.2

557.4

19.5

118.9
(0.1)
—

—
21.6

$ 1,018.5

$ 907.0

$ 808.5

$ 766.6

$ 717.3

(a)

(b)

(c)

(d)

During the years ended December 31, 2015, 2014, 2013, 2012, and 2011, we recorded net losses on
extinguishments of long-term debt. The losses represented the difference between the amount paid upon
extinguishment, including call premiums and expenses paid to the debt holders and agents, and the net carrying
amount of the extinguished debt, adjusted for a portion of the unamortized deferred financing costs.

Represents our share of net income/loss from our equity investments. Our 35% share of Kelway’s net loss
includes our 35% share of an expense related to certain equity awards granted by one of the sellers to Kelway
coworkers in July 2015 prior to the acquisition.

Primarily includes expenses related to the acquisition of Kelway.

Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair
value upon the completion of the acquisition of Kelway.

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(e)

Other adjustments primarily include certain historical retention costs, unusual, non-recurring litigation matters,
secondary-offering-related expenses and expenses related to the consolidation of office locations north of
Chicago. During the year ended December 31, 2013, we recorded IPO- and secondary-offering related expenses
of $75.0 million. For additional information on the IPO- and secondary-offering related expenses, see Note 10
(Stockholder’s Equity) to the accompanying Consolidated Financial Statements.

(f)

Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway’s financial
results.

(4)

Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangible
assets, non-cash equity-based compensation, acquisition and integration expenses, and gains and losses from the
extinguishment of long-term debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a
non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that
either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure
calculated and presented in accordance with GAAP. Non-GAAP measures used by us may differ from similar measures
used by other companies, even when similar terms are used to identify such measures. We believe that non-GAAP net
income provides meaningful information regarding our operating performance and cash flows including our ability to
meet our future debt service, capital expenditures and working capital requirements.

The following unaudited table sets forth a reconciliation of net income to non-GAAP net income for the periods presented:

(in millions)
Net income

Amortization of intangibles (a)
Non-cash equity-based compensation

Non-cash equity-based compensation related to
equity investment(b)
Net loss on extinguishments of long-term debt
Acquisition and integration expenses(c)
Gain on remeasurement of equity investment(d)
Other adjustments(e)
Aggregate adjustment for income taxes (f)

Non-GAAP net income(g)

Years Ended December 31,

2015

2014

2013

2012

2011

403.1

244.9

132.8

119.0

17.1

173.9

31.2

20.0

24.3

10.2
(98.1)
3.7
(64.8)
503.5

161.2

16.4

—

90.7

—

—
(0.3)
(103.0)
409.9

161.2

8.6

—

64.0

—

61.2
(113.5)
314.3

163.7

22.1

—

17.2

—

—
(3.3)
(71.6)
247.1

165.7

19.5

—

118.9

—

—
(15.6)
(106.8)
198.8

(a)

(b)

(c)

(d)

(e)

(f)

Includes amortization expense for acquisition-related intangible assets, primarily customer relationships,
customer contracts and trade names.

Represents our 35% share of an expense related to certain equity awards granted by one of the sellers to Kelway
coworkers in July 2015 prior to our acquisition of Kelway.

Primarily includes expenses related to the acquisition of Kelway.

Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair
value upon the completion of the acquisition of Kelway.

Primarily includes expenses related to the consolidation of office locations north of Chicago and secondary-
offering-related expenses. Amount in 2013 primarily relates to IPO- and secondary-offering related expenses.

Based on a normalized effective tax rate of 38.0% (39.0% prior to the Kelway acquisition), except for the non-
cash equity-based compensation from our equity investment and the gain resulting from the remeasurement of
our previously held 35% equity investment to fair value upon the completion of the acquisition of Kelway, which
were tax effected at a rate of 35.4%. The aggregate adjustment for income taxes also includes a $4.0 million
deferred tax benefit recorded during the three months and year ended December 31, 2015 as a result of a tax
rate reduction in the United Kingdom and additional tax expense during the year ended December 31, 2015 of
$3.3 million as a result of recording withholding tax on the unremitted earnings of our Canadian subsidiary.
Additionally, note that certain acquisition costs are non-deductible.

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(g)

Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway’s financial
results.

(5)

Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway’s financial results.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” the terms “we,” “us,” “the Company,” “our,” “CDW” and similar terms refer
to CDW Corporation and its subsidiaries. “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” should be read in conjunction with the Consolidated Financial Statements and the related notes included elsewhere
in this report. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual
results may differ materially from those contained in any forward-looking statements. See “Forward-Looking Statements” above.

Overview

CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions in North
America and the United Kingdom. We help our customer base of over 250,000 small, medium and large business, government,
education and healthcare customers by delivering critical solutions to their increasingly complex IT needs. Our broad array of
offerings ranges from discrete hardware and software products to integrated IT solutions such as mobility, security, data center
optimization, cloud computing, virtualization and collaboration. We are technology “agnostic,” with a product portfolio including
more than 100,000 products from more than 1,000 brands. We provide our products and solutions through more than 5,000
customer-facing coworkers, including field sellers, highly-skilled technology specialists and advanced service delivery engineers.

On August 1, 2015, we completed the acquisition of Kelway TopCo Limited (“Kelway”) by purchasing the remaining
65% of its outstanding common stock which increased our ownership interest from 35% to 100%, and provided us control. Kelway
is a U.K.-based IT solutions provider, which has global supply chain relationships that enable it to conduct business in more than
80 countries. This investment strengthens our ability to provide a more comprehensive solution to our customers and enhances
our ability to serve our existing multi-national customers. We included the financial results of Kelway in our Consolidated Financial
Statements from the date of acquisition. For additional information relating to the acquisition, see Note 3 (Acquisition) to our
Consolidated Financial Statements.

We have two reportable segments: Corporate, which is comprised primarily of private sector business customers in the
U.S., and Public, which is comprised of government agencies and education and healthcare institutions in the U.S. Our Corporate
segment is divided into a medium/large business customer channel, primarily serving customers with more than 100 employees,
and a small business customer channel, primarily serving customers with up to 100 employees. We also have three other operating
segments: CDW Advanced Services; Canada; and Kelway, each of which do not meet the reportable segment quantitative thresholds
and, accordingly, are included in an all other category (“Other”). For additional information relating to Kelway, see Note 3
(Acquisition) to these Consolidated Financial Statements. The CDW Advanced Services business consists primarily of customized
engineering services delivered by technology specialists and engineers, and managed services that include Infrastructure as a
Service (“IaaS”) offerings. Effective January 1, 2016, the CDW Advanced Services business will be included in our Corporate
and Public segments and Other will be comprised of Canada and Kelway. Revenues in the U.S. from the sale of hardware, software,
custom configuration and third-party provided services are recorded within our Corporate and Public segments.

We may sell all or only select products that our vendor partners offer. Each vendor partner agreement provides for specific
terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase
discounts and vendor incentive programs, such as purchase or sales rebates and cooperative advertising reimbursements. We also
resell software for major software publishers. Our agreements with software publishers allow the end-user customer to acquire
software or licensed products and services. In addition to helping our customers determine the best software solutions for their
needs, we help them manage their software agreements, including warranties and renewals. A significant portion of our advertising
and marketing expenses is reimbursed through cooperative advertising programs with our vendor partners. These programs are
at the discretion of our vendor partners and are typically tied to sales or other commitments to be met by us within a specified
period of time.

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Trends and Key Factors Affecting our Financial Performance

We believe the following trends may have an important impact on our financial performance:

• Our Public segment sales are impacted by government spending policies, budget priorities and revenue levels.
An adverse change in any of these factors could cause our Public segment customers to reduce their purchases
or to terminate or not renew contracts with us, which could adversely affect our business, results of operations
or cash flows. For the year ended December 31, 2015, sales to federal customers increased year-over-year in
the mid-teens as we continued to benefit from strategic changes made to better align with new federal government
purchasing programs implemented last year. During the same period, sales to state and local customers also
increased year-over-year in the mid-teens, driven by the continued focus on public safety. Meeting K-12 customer
digital curriculum testing needs through sales of client devices was a significant contributor to education sales
throughout 2014 and into early 2015. Education sales decreased slightly in 2015 as a decline in K-12 client
device sales was partially offset by an increase in netcomm sales. In 2015, we were named as provider on both
the largest number of applications and the largest dollar amounts requested for funds by K-12 customers to
support internal connections for the 2014-2015 program year of the U.S. Federal Communications Commission
E-Rate program. The amount and timing of E-Rate funds approval and customer implementation is not certain.

• An important factor affecting our ability to generate sales and achieve our targeted operating results is the impact
of general economic conditions on our customers’ willingness to spend on information technology. During the
year ended December 31, 2015, global economic signals were mixed. We continue to closely monitor
macroeconomic conditions. Uncertainties related to potential changes in tax and regulatory policy, potential
interest rate increases, weakening consumer and business confidence or increased unemployment could result
in reduced or deferred spending on information technology products and services by our customers and result
in increased competitive pricing pressures.

• We believe that our customers’ transition to more complex technology solutions will continue to be an important
growth area for us in the future. However, because the market for technology products and services is highly
competitive, our success at capitalizing on this transition will be based on our ability to tailor specific solutions
to customer needs, the quality and breadth of our product and service offerings, the knowledge and expertise of
our sales force, price, product availability and speed of delivery. During the year ended December 31, 2015,
customer priorities continued to shift away from last year's focus on client devices towards more integrated
solutions, which grew substantially faster than transactional sales.

Key Business Metrics

Our management monitors a number of financial and non-financial measures and ratios on a regular basis in order to
track the progress of our business and make adjustments as necessary. We believe that the most important of these measures and
ratios include average daily sales, gross margin, operating margin, Net income, Non-GAAP net income, Net income per common
share, Non-GAAP net income per diluted share, EBITDA and Adjusted EBITDA, free cash flow, return on invested capital, Cash
and cash equivalents, net working capital, cash conversion cycle (defined to be days of sales outstanding in Accounts receivable
plus days of supply in Inventory minus days of purchases outstanding in Accounts payable, based on a rolling three-month average),
debt levels including available credit and leverage ratios, sales per coworker, and coworker turnover. These measures and ratios
are compared to standards or objectives set by management, so that actions can be taken, as necessary, in order to achieve the
standards and objectives.

Non-GAAP net income, Non-GAAP net income per diluted share, EBITDA and Adjusted EBITDA are non-GAAP
financial measures. We believe these measures provide helpful information with respect to our operating performance and cash
flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted
EBITDA also provides helpful information as it is the primary measure used in certain key covenants and definitions contained
in the credit agreement governing our Senior Secured Term Loan Facility (the “Term Loan”), including the excess cash flow
payment provision, the restricted payment covenant and the net leverage ratio. These covenants and definitions are material
components of the Term Loan as they are used in determining the interest rate applicable to the Term Loan, our ability to make
certain investments, incur additional debt, and make restricted payments, such as dividends and share repurchases, as well as
whether we are required to make additional principal prepayments on the Term Loan beyond the quarterly amortization payments.
For further details regarding the Term Loan, see Long-Term Debt and Financing Arrangements within Management’s Discussion
and Analysis of Financial Condition and Results of Operations and Note 8 (Long-Term Debt) to the accompanying Consolidated
Financial Statements. For the definitions of Non-GAAP net income and Adjusted EBITDA and reconciliations to Net income, see
“Results of Operations”.

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The results of certain key business metrics are as follows:

(dollars in millions)

Net sales

Gross profit

Income from operations

Net income

Non-GAAP net income

Adjusted EBITDA

Average daily sales
Net debt (defined as total debt minus cash and cash equivalents) (1)
Cash conversion cycle (in days) (2)

Years Ended December 31,

2015

2014

2013

12,988.7

12,074.5

10,768.6

2,115.8

1,921.3

1,760.3

742.0

403.1

503.5

1,018.5

51.1

3,222.1

673.0

244.9

409.9

907.0

47.5

508.6

132.8

314.3

808.5

42.4

2,821.5

3,037.9

(1)

As a result of the adoption of Accounting Standards Update (ASU) 2015-03 during the second quarter of 2015, historical
periods have been revised to reflect the change in the presentation of deferred financing costs, which are now shown as
a reduction of Long-term debt, instead of being presented as a separate asset on the Consolidated Balance Sheet. In the
third quarter of 2015, we adopted ASU 2015-15 which allows entities to present deferred financing costs for line-of-
credit arrangements as an asset. We retroactively adjusted the deferred financing costs and Long-term debt liability
presented in historical periods to align it to the current period presentation.

(2)

Cash conversion cycle is defined as days of sales outstanding in accounts receivable plus days of supply in inventory
minus days of purchases outstanding in accounts payable, based on a rolling three-month average.

Results of Operations

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Results of operations, in dollars and as a percentage of Net sales, for the years ended December 31, 2015 and 2014 are

as follows:

Net sales

Cost of sales

Gross profit

Selling and administrative expenses

Advertising expense

Income from operations

Interest expense, net

Net loss on extinguishments of long-term debt

Gain on remeasurement of equity investment

Other (expense) income, net

Income before income taxes

Income tax expense

Net income

(1)

Percentages may not total due to rounding.

Years Ended December 31,

2015

2014

Dollars in
Millions

Percentage of
Net Sales (1)

Dollars in
Millions

Percentage of
Net Sales

$ 12,988.7

100.0% $ 12,074.5

100.0%

10,872.9

2,115.8

1,226.0
147.8

742.0
(159.5)
(24.3)
98.1
(9.3)
647.0
(243.9)
403.1

83.7

16.3

9.4
1.1

5.7
(1.2)
(0.2)
0.8
(0.1)
5.0
(1.9)
3.1% $

10,153.2

1,921.3

1,110.3
138.0

673.0
(197.3)
(90.7)
—

2.7

387.7
(142.8)
244.9

84.1

15.9

9.2
1.1

5.6
(1.6)
(0.8)
—

—

3.2
(1.2)
2.0%

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Net sales

Net sales by segment, in dollars and as a percentage of total Net sales, and the year-over-year dollar and percentage

change in Net sales for the years ended December 31, 2015 and 2014 are as follows:

(dollars in millions)
Corporate:

Medium/Large

Small Business

Total Corporate

Public:

Government

Education

Healthcare

Total Public

Other

Total Net sales

Years Ended December 31,

2015

2014

Net Sales

Percentage
of Total
Net Sales

Net Sales

Percentage
of Total
Net Sales

Dollar
Change

Percent
Change (1)

5,758.2

44.3% $

5,485.4

45.4% $

1,058.2

6,816.4

8.2

52.5

990.1

6,475.5

8.2

53.6

1,675.9

1,807.0

1,642.6
5,125.5

12.9

13.9

12.6
39.4

1,449.4

1,824.0

1,606.0
4,879.4

12.0

15.1

13.3
40.4

272.8

68.1

340.9

226.5
(17.0)
36.6
246.1

5.0%

6.9

5.3

15.6
(0.9)
2.3
5.0

1,046.8

8.1

719.6

6.0

327.2

45.5

$ 12,988.7

100.0% $ 12,074.5

100.0% $

914.2

7.6%

(1)

There were 254 selling days for the years ended December 31, 2015 and 2014.

Total Net sales in 2015 increased $914.2 million, or 7.6%, to $12,988.7 million, compared to $12,074.5 million in 2014,
reflecting both organic net sales growth and the impact of consolidating five months of Kelway net sales. Customer priorities
continued to shift more towards integrated solutions, which drove higher growth in solutions sales compared to transactional
product sales. Strong sales performance in solutions-focused products was driven by netcomm and server and server-related
products. The growth in transactional products was led by notebooks/mobile devices, partially offset by a decline in desktop
computers.

Organic net sales, which excludes the impact of the acquisition of Kelway, increased $563.5 million, or 4.7%, to $12,638.0
million in 2015, compared to $12,074.5 million in 2014. Organic net sales on a constant currency basis, which excludes the impact
of foreign currency translation, in 2015 increased $635.0 million, or 5.3%, to $12,638.0 million, compared to $12,003.0 million
in 2014. For additional information, see “Non-GAAP Financial Measure Reconciliations” below.

Corporate segment net sales in 2015 increased $340.9 million, or 5.3%, compared to 2014, driven by sales growth in
both our medium/large and small business customer channels and reflecting stronger performance in solutions sales compared to
transactional product sales. Within our Corporate segment, net sales to medium/large customers increased $272.8 million, or 5.0%,
year over year, primarily due to strong sales performance in solutions-focused products driven by netcomm products and server
and server-related products. Growth in transactional products was driven by notebook/mobile devices, partially offset by a decline
in desktop computers. Net sales to small business customers increased by $68.1 million, or 6.9%, between periods, driven by
growth in notebooks/mobile devices and netcomm products, partially offset by a decline in desktop computers.

Public segment net sales in 2015 increased $246.1 million, or 5.0%, between years, due to strong sales performance in
government and growth in healthcare, partially offset by education remaining relatively flat. Net sales to government customers
increased $226.5 million, or 15.6%, between periods, as sales to both federal and state/local government customers experienced
mid-teens growth. The increase in net sales to the federal government was driven by growth in sales of netcomm products, software
and enterprise storage, as we continued to benefit from strategic changes made to better align with new federal government
purchasing programs implemented last year. A continued focus on public safety drove the increase in net sales to state/local
government customers, which was led by netcomm products, notebooks/mobile devices and software, partially offset by a decline
in desktop computers. Net sales to education customers decreased $17.0 million, or 0.9%, year over year, primarily due to declines
in notebooks/mobile devices, partially offset by growth in netcomm products. Net sales to healthcare customers increased $36.6
million, or 2.3%, year over year, driven by growth in netcomm and server-related products, partially offset by declines in desktop

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computers and point-of-care technology carts, as some of our larger customers shifted priorities to reducing costs due to industry
consolidation.

Net sales in Other in 2015 increased $327.2 million, or 45.5%, compared 2014. Other is comprised of CDW Advanced
Services, Canada and Kelway. The increase in net sales was driven by the impact of consolidating five months of Kelway net
sales, as well as growth in CDW Advanced Services, partially offset by a decline in the U.S. dollar-denominated net sales of
Canada. The net sales of Canada in constant currency continued to grow during 2015 compared to 2014.

Gross profit

Gross profit increased $194.5 million, or 10.1%, to $2,115.8 million in 2015, compared to $1,921.3 million in 2014. As

a percentage of net sales, Gross profit increased 40 basis points to 16.3% in 2015, from 15.9% in 2014.

Net service contract revenue, including items such as third-party services, warranties and SaaS contributed a positive
impact of 15 basis points to gross profit margin as our cost paid to the vendor or third-party service provider is recorded as a
reduction to net sales, resulting in net sales being equal to the gross profit on the transaction. Gross profit margin was positively
impacted 15 basis points due to a higher mix of services and improved product margin. We also experienced a favorable impact
of 10 basis points from vendor partner funding. Vendor partner funding includes purchase discounts, volume rebates and cooperative
advertising.

Gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection
programs, cooperative advertising funds classified as a reduction of cost of sales, product mix, net service contract revenue,
commission revenue, pricing strategies, market conditions and other factors.

Selling and administrative expenses

Selling and administrative expenses increased $115.7 million, or 10.4%, to $1,226.0 million in 2015, compared to $1,110.3
million in 2014. As a percentage of total Net sales, Selling and administrative expenses increased 20 basis points to 9.4% in 2015,
up from 9.2% in 2014. Sales payroll costs increased $60.1 million, or 12.0%, year over year, primarily due to increased sales
compensation consistent with growth in solutions-related sales, an increase in Gross profit and consolidating five months of
incremental Kelway sales payroll costs. In addition, certain coworker costs increased $9.5 million, or 3.8%, during 2015 compared
to the prior year, due to higher costs consistent with increased coworker count, primarily due to our acquisition of Kelway. Total
coworker count was 8,465 at December 31, 2015, up 1,254 from 7,211 at December 31, 2014. Amortization expense related to
intangibles increased $16.7 million, or 9.2%, during 2015 compared to 2014, primarily due to incremental amortization expense
related to the intangible assets arising from our acquisition of Kelway. Non-cash equity-based compensation expense increased
$14.8 million, or 90.7%, during 2015 compared to 2014, primarily due to annual equity awards granted under our 2013 Long-
Term Incentive Plan in 2015, performance against long-term incentive program targets and equity awards granted in connection
with our acquisition of Kelway. In addition, we incurred $10.2 million of acquisition and integration costs in 2015 related to our
acquisition of Kelway.

Income from operations

Income from operations by segment, in dollars and as a percentage of Net sales, and the year-over-year percentage change

for the years ended December 31, 2015 and 2014 is as follows:

Segments: (1)

Corporate

Public
Other (2)
Headquarters (3)
Total Income from operations

* Not meaningful

Years Ended December 31,

2015

2014

Dollars in
Millions

Operating
Margin

Dollars in
Millions

Operating
Margin

Percent Change
in Income
from Operations

470.1

343.3

43.1

(114.5)

742.0

6.9% $

6.7

4.1

nm*

5.7% $

439.8

313.2

32.9
(112.9)
673.0

6.8%

6.4

4.6

nm*

5.6%

6.9%

9.6

31.0

1.4
10.3%

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(1)

(2)

Segment income from operations includes the segment’s direct operating income, allocations for Headquarters’ costs,
allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and
cooperative advertising from vendors.

Includes the financial results for our other operating segments, CDW Advanced Services, Canada and five months for
Kelway, which do not meet the reportable segment quantitative thresholds.

(3)

Includes certain Headquarters’ function costs that are not allocated to the segments.

Income from operations was $742.0 million in 2015, an increase of $69.0 million, or 10.3%, compared to $673.0 million
in 2014. Total operating margin increased 10 basis points to 5.7% in 2015, from 5.6% in 2014. Operating margin was positively
impacted by the increase in gross profit margin, partially offset by an increase in Selling and administrative expenses as a percentage
of Net sales. This increase was driven by higher Net sales and Gross profit.

Corporate segment income from operations was $470.1 million in 2015, an increase of $30.3 million, or 6.9%, compared
to $439.8 million in 2014. Corporate segment operating margin increased 10 basis points to 6.9% in 2015, from 6.8% in 2014.
This increase was driven by higher net sales and gross profit.

Public segment income from operations was $343.3 million in 2015, an increase of $30.1 million, or 9.6%, compared to
$313.2 million in 2015. Public segment operating margin increased 30 basis points to 6.7% in 2015, from 6.4% in 2014. This
increase was driven by higher net sales and gross profit.

Interest expense, net

At December 31, 2015, our outstanding long-term debt totaled $3,259.7 million, compared to $3,166.0 million at
December 31, 2014, an increase of $93.7 million primarily due to the completion of the acquisition of Kelway. Net interest expense
in 2015 was $159.5 million, a decrease of $37.8 million, compared to $197.3 million in 2014. This decrease was primarily due to
lower effective interest rates for 2015, compared to 2014 as a result of redemptions and refinancing activities completed during
2014 and 2015.

Net loss on extinguishments of long-term debt

For information regarding our debt, see Note 8 (Long-Term Debt) to the accompanying Consolidated Financial Statements.

During 2015, we recorded a net loss on extinguishments of long-term debt of $24.3 million compared to $90.7 million in 2014.

Net loss on extinguishments of long-term debt for the years ended December 31, 2015 and 2014 are as follows:

Month of Extinguishment

Debt Instrument

Amount Extinguished

Loss Recognized

(in millions)

For the Year Ended December 31, 2015

March 2015

2019 Senior Notes

Total Loss Recognized

For the Year Ended December 31, 2014

December 2014

September 2014

August 2014

June 2014

May 2014

March 2014

2019 Senior Notes

8.0% Senior Secured Notes due 2018

Revolving Loan

12.535% Senior Subordinated Exchange Notes due
2017

2019 Senior Notes

January and February
2014

12.535% Senior Subordinated Exchange Notes due
2017

Total Loss Recognized

503.9

541.4

234.7

325.0

—

42.5

25.0

50.0

(24.3) (1)
(24.3)

(36.9) (1)
(22.1) (1)
(23.7) (1)
(0.4) (2)

(2.2) (1)
(2.7) (1)

(2.7) (1)
(90.7)

(1)

We redeemed or repurchased all of or a portion of the remaining aggregate principal amount outstanding. The loss
recognized represents the difference between the redemption price and the net carrying amount of the purchased debt,
adjusted for the remaining unamortized deferred financing costs and/or premium.

(2)

We entered into the Revolving Loan, a new $1,250 million five-year senior secured asset-based revolving credit facility.
The Revolving Loan replaced our previous revolving loan credit facility that was to mature on June 24, 2016. The loss
recognized represents the write-off of a portion of unamortized deferred financing costs.

Gain on remeasurement of equity investment

On August 1, 2015, we completed the acquisition of Kelway by purchasing the remaining 65% of its outstanding common
stock which increased our ownership interest from 35% to 100%, and provided us control. As a result, our previously held 35%
equity investment was remeasured to fair value, resulting in a gain of $98.1 million recorded in Gain on remeasurement of equity
investment in the Consolidated Statements of Operations.

Income tax expense

Income tax expense was $243.9 million in 2015, compared to $142.8 million in 2014. The effective income tax rate,
expressed by calculating income tax expense or benefit as a percentage of income before income taxes, was 37.7% and 36.8% for
2015 and 2014, respectively.

For 2015, the effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes and
withholding tax expense on the earnings of our Canadian business as a result of no longer asserting permanent reinvestment which
was partially offset by a deferred tax benefit as a result of a tax rate reduction in the U.K. For 2014, the effective tax rate differed
from the U.S. federal statutory rate primarily due to state income taxes, including current year state income tax credits. The higher
effective tax rate for 2015 as compared to 2014 was primarily attributable to higher state income taxes due to lower state income
tax credits and the aforementioned Canadian withholding tax expense partially offset by the deferred tax benefit reflecting the tax
rate reduction in the U.K. We are asserting that the unremitted earnings of our U.K. business are indefinitely reinvested.

Non-GAAP Financial Measure Reconciliations

We have included reconciliations of Non-GAAP net income, EBITDA, Adjusted EBITDA, Organic net sales growth and
Organic net sales growth on a constant currency basis for the years ended December 31, 2015 and 2014 below. Non-GAAP net
income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, non-cash equity-
based compensation, acquisition and integration expenses and gains and losses from the extinguishment of long-term debt. EBITDA
is defined as consolidated Net income before interest expense, Income tax expense, Depreciation and amortization. Adjusted
EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in
the table below. Organic net sales growth is calculated as net sales growth excluding the impact of acquisitions recorded within
the last twelve months. Organic net sales growth on a constant currency basis is calculated as organic net sales growth excluding
the impact of foreign currency translation on organic net sales compared to the prior period. Non-GAAP net income, EBITDA,
Adjusted EBITDA, Organic net sales growth and Organic net sales growth on a constant currency basis are considered non-GAAP
financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial
position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly
comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by us may differ from similar
measures used by other companies, even when similar terms are used to identify such measures.

We believe that Non-GAAP net income, EBITDA, Adjusted EBITDA, Organic net sales growth and Organic net sales
growth on a constant currency basis provide helpful information with respect to our operating performance and cash flows including
our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA is also the
primary measure used in certain key covenants and definitions contained in the credit agreement governing our Term Loan,
including the excess cash flow payment provision, the restricted payment covenant and the net leverage ratio. These covenants
and definitions are material components of the Term Loan as they are used in determining the interest rate applicable to the Term
Loan, our ability to make certain investments, incur additional debt and make restricted payments, such as dividends and share
repurchases, as well as whether we are required to make additional principal prepayments on the Term Loan beyond the quarterly
amortization payments. For further details regarding the Term Loan, see Note 8 (Long-Term Debt) to the accompanying
Consolidated Financial Statements.

Non-GAAP net income

Non-GAAP net income was $503.5 million for the year ended December 31, 2015, an increase of $93.6 million, or 22.8%,

compared to $409.9 million for the year ended December 31, 2014.

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(in millions)
Net income

Years Ended December 31,

2015

2014

403.1

Amortization of intangibles(1)
Non-cash equity-based compensation
Non-cash equity-based compensation related to equity investment(2)
Net loss on extinguishments of long-term debt
Acquisition and integration expenses(3)
Gain on remeasurement of equity investment(4)
Other adjustments(5)
Aggregate adjustment for income taxes (6)

Non-GAAP net income(7)

173.9

31.2

20.0

24.3

10.2
(98.1)
3.7
(64.8)
503.5

244.9

161.2

16.4

—

90.7

—

—
(0.3)
(103.0)
409.9

(1)

(2)

(3)

(4)

(5)

(6)

Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer
contracts and trade names.

Represents our 35% share of an expense related to certain equity awards granted by one of the sellers to Kelway coworkers
in July 2015 prior to our acquisition of Kelway.

Primarily includes expenses related to the acquisition of Kelway.

Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon
the completion of the acquisition of Kelway.

Primarily includes expenses related to the consolidation of office locations north of Chicago and secondary-offering-
related expenses.

Based on a normalized effective tax rate of 38.0% (39.0% prior to the Kelway acquisition), except for the non-cash equity-
based compensation from our equity investment and the gain resulting from the remeasurement of our previously held
35% equity investment to fair value upon the completion of the acquisition of Kelway, which were tax effected at a rate
of 35.4%. The aggregate adjustment for income taxes also includes a $4.0 million deferred tax benefit recorded during
the year ended December 31, 2015 as a result of a tax rate reduction in the United Kingdom and additional tax expense
during the year ended December 31, 2015 of $3.3 million as a result of recording withholding tax on the unremitted
earnings of our Canadian subsidiary. Additionally, note that certain acquisition costs are non-deductible.

(7)

Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway's financial results.

Adjusted EBITDA

Adjusted EBITDA was $1,018.5 million for the year ended December 31, 2015, an increase of $111.5 million, or 12.3%,
compared to $907.0 million for the year ended December 31, 2014. As a percentage of Net sales, Adjusted EBITDA was 7.8%
and 7.5% for the years ended December 31, 2015 and 2014, respectively.

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(in millions)
Net income

Depreciation and amortization

Income tax expense

Interest expense, net

EBITDA

Adjustments:

Years Ended December 31,

Percentage of
Net Sales

2014

2015

403.1

227.4

243.9

159.5

1,033.9

8.0%

Non-cash equity-based compensation

Net loss on extinguishments of long-term debt
Loss (income) from equity investments(1)
Acquisition and integration expenses(2)
Gain on remeasurement of equity investment(3)
Other adjustments(4)
Total adjustments

31.2

24.3

10.1

10.2
(98.1)
6.9
(15.4)

Adjusted EBITDA(5)

1,018.5

7.8%

Percentage of
Net Sales

6.6%

7.5%

244.9

207.9

142.8

197.3

792.9

16.4

90.7
(2.2)
—

—

9.2

114.1

907.0

(1)

(2)

(3)

(4)

Represents our share of net (income) loss from our equity investments. Our share of Kelway's net loss includes our 35%
share of an expense related to certain equity awards granted by one of the sellers to Kelway coworkers in July 2015 prior
to the acquisition.

Primarily includes expenses related to the acquisition of Kelway.

Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon
the completion of the acquisition of Kelway.

Primarily includes certain historical retention costs, unusual, non-recurring litigation matters, secondary-offering-related
expenses and expenses related to the consolidation of office locations north of Chicago.

(5)

Includes the impact of consolidating five months for the year ended December 31, 2015 of Kelway's financial results.

Organic net sales growth and organic net sales growth on constant currency basis

Organic net sales, which excludes the impact of the acquisition of Kelway, increased $563.5 million, or 4.7%, to $12,638.0
million for the year ended December 31, 2015, compared to $12,074.5 million for the year ended December 31, 2014. Organic
net sales on a constant currency basis, which excludes the impact of foreign currency translation, for the year ended December 31,
2015 increased $635.0 million, or 5.3%, to $12,638.0 million, compared to $12,003.0 million for the year ended December 31,
2014.

(in millions)

Net sales, as reported

Impact of acquisition (1)

Organic net sales

Foreign currency translation (2)

Organic net sales, on a constant currency basis

Years Ended December 31,

2015

2014

% Change

12,988.7
(350.7)
12,638.0

—

12,638.0

12,074.5

—

12,074.5
(71.5)
12,003.0

7.6%

4.7%

5.3%

(1)

(2)

Represents five months for the year ended December 31, 2015 of Kelway's financial results.

Represents the effect of translating the prior year results of our Canadian subsidiary at the average exchange rates applicable
in the current year.

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Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Results of operations, in dollars and as a percentage of net sales, for the years ended December 31, 2014 and 2013 are

as follows:

Net sales

Cost of sales

Gross profit

Selling and administrative expenses

Advertising expense

Income from operations

Interest expense, net

Net loss on extinguishments of long-term debt

Other income, net

Income before income taxes

Income tax expense

Net income

Net sales

Year Ended December 31, 2014

Year Ended December 31, 2013

Dollars in
Millions

Percentage of
Net Sales

Dollars in
Millions

Percentage of
Net Sales

12,074.5

100.0% $

10,768.6

100.0%

10,153.2

1,921.3

1,110.3

138.0

673.0
(197.3)
(90.7)
2.7

387.7
(142.8)
244.9

84.1

15.9

9.2

1.1

5.6
(1.6)
(0.8)
—

3.2
(1.2)
2.0% $

9,008.3

1,760.3

1,120.9

130.8

508.6
(250.1)
(64.0)
1.0

195.5
(62.7)
132.8

83.7

16.3

10.4

1.2

4.7
(2.3)
(0.6)
—

1.8
(0.6)
1.2%

Net sales by segment, in dollars and as a percentage of total Net sales, and the year-over-year dollar and percentage

change in Net sales for the years ended December 31, 2014 and 2013 are as follows:

(dollars in millions)
Corporate:

Medium / Large

Small Business

Total Corporate

Public:

Government

Education

Healthcare

Total Public

Other

Total Net sales

Years Ended December 31,

2014

2013

Net Sales

Percentage
of Total
Net sales

Net Sales

Percentage
of Total
Net Sales

Dollar
Change

Percent
Change (1)

5,485.4

45.4% $

5,052.7

46.9% $

990.1

6,475.5

1,449.4

1,824.0

1,606.0

4,879.4

8.2

53.6

12.0

15.1

13.3

40.4

907.4

5,960.1

1,250.6

1,449.0

1,464.9

4,164.5

8.4

55.3

11.6

13.5

13.6

38.7

432.7

82.7

515.4

198.8

375.0

141.1

714.9

8.6%

9.1

8.6

15.9

25.9

9.6

17.2

719.6

6.0

644.0

6.0

75.6

11.7

12,074.5

100.0% $

10,768.6

100.0% $

1,305.9

12.1%

(1)

There were 254 selling days for the years ended December 31, 2014 and 2013.

Total Net sales in 2014 increased $1,305.9 million, or 12.1%, to $12,074.5 million, compared to $10,768.6 million in
2013. The increase in total Net sales was primarily the result of continued growth in transactional products driven by notebooks/
mobile devices and desktop computers, as customers across all channels refreshed their client devices and K-12 customers continued
to prepare for digital testing requirements, and the addition of more than 140 customer-facing coworkers, the majority in pre- and
post-sale technical positions such as technical specialists and service delivery roles. Growth in solutions-focused products, including
netcomm and software, also contributed to the increase in Net sales during 2014.

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Corporate segment net sales in 2014 increased $515.4 million, or 8.6%, compared to 2013, driven by sales growth in the
medium/large customer channel. Within our Corporate segment, net sales to medium/large customers increased $432.7 million,
or 8.6%, year over year, primarily due to customers refreshing their client devices and making continued investments in technology
infrastructure and a continued focus on seller productivity. This increase was led by growth in notebooks/mobile devices, netcomm
products, software, and desktop computers. Net sales to small business customers increased $82.7 million, or 9.1%, year over
year, driven by growth in notebooks/mobile devices and desktop computers due to customers refreshing their client devices.

Public segment net sales in 2014 increased $714.9 million, or 17.2%, year over year, driven by strong performance across
all channels. In 2013, and through the second quarter of 2014, Public segment results were impacted by the combined and residual
negative effects of sequestration, the partial shutdown of the federal government in 2013 and federal government budget uncertainty.
However, with the finalization of federal budget allocations in early 2014, we began to see improvement in federal sales in the
second quarter of 2014 and saw continued momentum through the third quarter of 2014 in conjunction with the federal fiscal year-
end. This recovery continued into the fourth quarter of 2014 in connection with increased customer confidence that a federal
budget for 2015 would be in place. Net sales to government customers increased $198.8 million, or 15.9%. The increase in net
sales to the federal government was led by increases in sales of notebooks/mobile devices and desktop computers. The increase
in net sales to state/local government customers was led by growth in sales of notebooks/mobile devices, netcomm products,
enterprise storage, and software due to a continued focus on public safety solutions. Net sales to education customers increased
$375.0 million, or 25.9%, year over year, led by growth in net sales to K-12 customers, reflecting increased sales of notebooks/
mobile devices to support digital testing requirements. Net sales to healthcare customers increased $141.1 million, or 9.6%, between
periods, driven by growth in netcomm products, notebook/mobile devices, and desktop computers.

Gross profit

Gross profit increased $161.0 million, or 9.1%, to $1,921.3 million in 2014, compared to $1,760.3 million in 2013. As
a percentage of Net sales, Gross profit decreased 40 basis points to 15.9% during 2014, down from 16.3% in 2013. Gross profit
margin was negatively impacted 30 basis points by unfavorable price/mix changes within product margin, as transactional product
categories such as notebooks/mobile devices and desktops experienced a higher rate of net sales growth than our overall net sales
growth, accompanied by continuing product margin compression in these product categories. Additionally, we experienced an
unfavorable impact of 10 basis points from vendor funding in 2014. Although vendor funding dollars increased, it represented a
lower percentage of Net sales in 2014 compared to 2013. Vendor funding includes purchase discounts, volume rebates and
cooperative advertising.

Selling and administrative expenses

Selling and administrative expenses decreased $10.6 million, or 0.9%, to $1,110.3 million in 2014, compared to $1,120.9
million in 2013. The overall decrease was largely driven by the absence of $74.3 million in costs incurred during 2013 related to
the completion of our IPO. This decrease was partially offset by an increase of $31.4 million, or 14.3%, of certain coworker costs
between years which was primarily due to higher compensation consistent with increased coworker count and attainment-based
compensation accruals tied to annual performance. Total coworker count was 7,211, up 244 from 6,967 at December 31, 2013. In
addition, sales payroll, including sales commissions and other variable compensation costs, increased $18.6 million, or 3.9%
between years, consistent with higher sales and Gross profit. Further offsetting the decrease in Selling and administrative expenses
was an increase in long-term compensation expense and equity compensation expense of $7.2 million during 2014.

As a percentage of Net sales, Selling and administrative expenses decreased 120 basis points to 9.2% in 2014, down from
10.4% in 2013. The decrease in Selling and administrative expenses as a percentage of Net sales was largely driven by a decline
of 70 basis points in costs related to the IPO in 2013. Sales payroll as a percentage of Net sales also decreased 30 basis points
during 2014, reflecting the lower cost to serve transactional sales compared to solutions-focused sales, consistent with our variable
compensation cost structure.

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Income from operations

Income from operations by segment, in dollars and as a percentage of Net sales, and the year-over-year percentage change

in Income from operations for the years ended December 31, 2014 and 2013 is as follows:

Years Ended December 31,

2014

2013

Dollars in
Millions

Operating
Margin

Dollars in
Millions

Operating
Margin

Percent Change
in Income
from Operations

439.8

313.2

32.9

(112.9)

673.0

6.8% $

6.4

4.6

nm*

5.6% $

363.3

246.5

27.2
(128.4)
508.6

6.1%

5.9

4.2

nm*

4.7%

21.1%

27.1

20.9

12.0
32.3%

Segments: (1)

Corporate

Public

Other
Headquarters (2)
Total Income from operations

* Not meaningful

(1)

Segment income from operations includes the segment’s direct operating income and allocations for Headquarters’ costs,
allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and
cooperative advertising from vendors.

(2)

Includes certain Headquarters’ function costs that are not allocated to the segments.

Income from operations was $673.0 million in 2014, an increase of $164.4 million, or 32.3%, compared to $508.6 million
in 2013. The increase in Income from operations was driven by higher Net sales and Gross profit and the absence of IPO-related
costs. Total operating margin percentage increased 90 basis points to 5.6% in 2014, from 4.7% in 2013. Operating margin percentage
benefited from the decrease in Selling and administrative expenses as a percentage of Net sales, which was driven by the absence
of $74.3 million in costs related to our IPO in 2013, and was partially offset by a decrease in Gross profit margin.

Corporate segment income from operations was $439.8 million in 2014, an increase of $76.5 million, or 21.1%, compared
to $363.3 million in 2013. This increase was primarily driven by higher net sales and gross profit. Corporate segment operating
margin percentage increased 70 basis points to 6.8% in 2014, from 6.1% in 2013. Operating margin percentage benefited from
the decrease in selling and administrative expenses as a percentage of net sales, which was driven by the absence of costs related
to our IPO in 2013, and was partially offset by a decrease in gross profit margin.

Public segment income from operations was $313.2 million in 2014, an increase of $66.7 million, or 27.1%, compared
to $246.5 million in 2013. This increase was primarily driven by higher net sales and gross profit. Public segment operating margin
percentage increased 50 basis points to 6.4% in 2014, from 5.9% in 2013. Operating margin percentage benefited from the decrease
in selling and administrative expenses as a percentage of net sales, which was driven by the absence of costs related to our IPO
in 2013, and was partially offset by a decrease in gross profit margin.

Interest expense, net

At December 31, 2014, our outstanding long-term debt totaled $3,166.0 million, compared to $3,226.0 million at
December 31, 2013. We reduced our long-term debt during 2014 through refinancing activities to redeem our higher interest debt.
Net interest expense in 2014 was $197.3 million, a decrease of $52.8 million, compared to $250.1 million in 2013. This decrease
was primarily due to lower debt balances and effective interest rates for 2014, compared to 2013 as a result of debt repayments
and refinancing activities completed during 2014 and 2013.

Net loss on extinguishments of long-term debt

For information regarding our debt, see Note 8 (Long-Term Debt) to the accompanying Consolidated Financial Statements.

During 2014, we recorded a net loss on extinguishments of long-term debt of $90.7 million compared to $64.0 million in 2013.

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Net loss on extinguishments of long-term debt for the year ended December 31, 2014 is as follows:

(in millions)

Month of Extinguishment

Debt Instrument

Amount Extinguished

Loss Recognized

For the Year Ended December 31, 2014

December 2014

September 2014

August 2014

June 2014

May 2014

March 2014

2019 Senior Notes

8.0% Senior Secured Notes due 2018

Revolving Loan

12.535% Senior Subordinated Exchange Notes due
2017

2019 Senior Notes

January and February
2014

12.535% Senior Subordinated Exchange Notes due
2017

Total Loss Recognized

For the Year Ended December 31, 2013

541.4

234.7

325.0

—

42.5

25.0

50.0

October 2013

August 2013

July 2013

April 2013

March 2013

Total Loss Recognized

12.535% Senior Subordinated Exchange Notes due
2017

155.0

12.535% Senior Subordinated Exchange Notes due
2017

8.0% Senior Secured Notes due 2018

Senior Secured Term Loan

12.535% Senior Subordinated Exchange Notes due
2017

324.0

175.0

—

50.0

(36.9) (1)
(22.1) (1)
(23.7) (1)
(0.4) (2)

(2.2) (1)
(2.7) (1)

(2.7) (1)
(90.7)

(8.5) (1)

(24.6) (1)
(16.7) (1)
(10.3) (3)

(3.9) (1)
(64.0)

(1)

(2)

(3)

We redeemed or repurchased all or a portion of the aggregate principal amount outstanding. The loss recognized represents
the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of
the unamortized deferred financing costs and/or unamortized premium.

We entered into the Term Loan, a new $1,350 million seven-year Senior Secured Term Loan Facility. Substantially all
of the proceeds were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured
term loan facility. The loss recognized represents the write-off of a portion of unamortized deferred financing costs.

Income tax expense

Income tax expense was $142.8 million in 2014, compared to $62.7 million in 2013. The effective income tax rate,
expressed by calculating income tax expense or benefit as a percentage of income before income taxes, was 36.8% and 32.1% for
2014 and 2013, respectively.

For 2014, the effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, including
current year state income tax credits. For 2013, the effective tax rate differed from the U.S. federal statutory rate primarily due to
state income taxes, including current year state income tax credits and an adjustment to deferred state income taxes due to changes
in apportionment factors. The higher effective tax rate for 2014 as compared to 2013 was primarily attributable to the favorable
impact of changes in state tax apportionment factors had on deferred state income taxes in 2013 and a lower rate impact of state
income tax credits due to the increase in income before income taxes in 2014.

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Non-GAAP Financial Measure Reconciliations

We have included reconciliations of Non-GAAP net income, EBITDA and Adjusted EBITDA for the years ended
December 31, 2014 and 2013 below. Non-GAAP net income excludes, among other things, charges related to the amortization of
acquisition-related intangible assets, non-cash equity-based compensation, and gains and losses from the extinguishment of long-
term debt. EBITDA is defined as consolidated Net income before Interest expense, Income tax expense, Depreciation and
amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items
which are described in the table below. Non-GAAP net income, EBITDA and Adjusted EBITDA are considered non-GAAP
financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial
position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly
comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by us may differ from similar
measures used by other companies, even when similar terms are used to identify such measures.

We believe that Non-GAAP net income, EBITDA and Adjusted EBITDA provide helpful information with respect to our
operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working
capital requirements. Adjusted EBITDA is also the primary measure used in certain key covenants and definitions contained in
the credit agreement governing our Term Loan, including the excess cash flow payment provision, the restricted payment covenant
and the net leverage ratio. These covenants and definitions are material components of the Term Loan as they are used in determining
the interest rate applicable to the Term Loan, our ability to make certain investments, incur additional debt and make restricted
payments, such as dividends and share repurchases, as well as whether we are required to make additional principal prepayments
on the Term Loan beyond the quarterly amortization payments. For further details regarding the Term Loan, see Note 8 (Long-
Term Debt) to the accompanying Consolidated Financial Statements.

Non-GAAP net income

Non-GAAP net income was $409.9 million for the year ended December 31, 2014, an increase of $95.6 million, or 30.4%,

compared to $314.3 million for the year ended December 31, 2013.

(in millions)
Net income

Amortization of intangibles (1)
Non-cash equity-based compensation

Net loss on extinguishments of long-term debt
Other adjustments (2)
Aggregate adjustment for income taxes (3)

Years Ended December 31,

2014

2013

244.9

161.2

16.4

90.7
(0.3)
(103.0)
409.9

132.8

161.2

8.6

64.0

61.2
(113.5)
314.3

Non-GAAP net income

(1)

(2)

Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer
contracts and trade names.

Includes ($0.6 million) and ($6.3 million) of unusual, non-recurring litigation matters, ($1.1 million) and ($7.5 million)
of adjustments to interest expense resulting from debt extinguishments and $1.4 million and $75.0 million of IPO and
secondary-offering related expenses in 2014 and 2013, respectively.

(3)

Based on a normalized effective tax rate of 39.0%.

Adjusted EBITDA

Adjusted EBITDA was $907.0 million for the year ended December 31, 2014, an increase of $98.5 million, or 12.2%,
compared to $808.5 million for the year ended December 31, 2013. As a percentage of Net sales, Adjusted EBITDA was 7.5%
for both the years ended December 31, 2014 and 2013.

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(in millions)
Net income

Depreciation and amortization

Income tax expense

Interest expense, net

EBITDA

Adjustments:

Non-cash equity-based compensation

Net loss on extinguishments of long-term debt

Income from equity investments
Other adjustments (1)
Total adjustments

Adjusted EBITDA

Years Ended December 31,

2014

Percentage of
Net Sales

2013

Percentage of
Net Sales

244.9

207.9

142.8

197.3

792.9

16.4

90.7
(2.2)
9.2

114.1

907.0

6.6%

7.5%

132.8

208.2

62.7

250.1

653.8

8.6

64.0
(0.6)
82.7

154.7

808.5

6.1%

7.5%

(1)

Primarily includes ($0.9 million) and ($4.1 million) of unusual, non-recurring litigation matters, $8.7 million and $9.2
million of historical retention costs and $1.4 million and $75.0 million of IPO and secondary-offering related expenses
in 2014 and 2013, respectively.

Seasonality

While we have not historically experienced significant seasonality throughout the year, sales in our Corporate segment,
which primarily serves private sector business customers, are typically higher in the fourth quarter than in other quarters due to
customers spending their remaining technology budget dollars at the end of the year. Additionally, sales in our Public segment
have historically been higher in the third quarter than in other quarters primarily due to the buying patterns of the federal government
and education customers.

Liquidity and Capital Resources

Overview

We finance our operations and capital expenditures with internally generated cash from operations. We also have $843.1
million of availability for borrowings under our senior secured asset-based revolving credit facility and an additional £50 million
($73.7 million) under the Kelway revolving credit facility. Our liquidity and borrowing plans are established to align with our
financial and strategic planning processes and ensure we have the necessary funding to meet our operating commitments, which
primarily include the purchase of inventory, payroll and general expenses. We also take into consideration our overall capital
allocation strategy which includes investment for future growth, dividend payments, acquisitions and stock repurchases. We believe
we have adequate sources of liquidity and funding available for at least the next year, however, there are a number of factors that
may negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon
factors such as the successful execution of our business plan and general economic conditions.

Long-Term Debt Activities

During the year ended December 31, 2015 we had debt refinancings. In connection with these refinancings, we recorded
a loss on extinguishment of long-term debt of $24.3 million in our Consolidated Statement of Operations for the year ended
December 31, 2015. See Note 8 (Long-Term Debt) to the accompanying Consolidated Financial Statements for additional details.

Share Repurchase Program

During 2015, we repurchased 6.3 million shares of our common stock for $241.3 million under the previously announced
$500 million share repurchase program. For more information on our share repurchase program, see Item 5, “Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”

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Acquisition

On August 1, 2015, we completed the acquisition of Kelway by purchasing the remaining 65% of its outstanding common
stock which increased our ownership interest from 35% to 100% and provided us control. For further details regarding the
acquisition, see Note 3 (Acquisition) to the accompanying Consolidated Financial Statements.

Dividends

A summary of 2015 dividend activity for our common stock is as follows:

Dividend Amount
$0.0675

$0.0675

$0.1075

$0.3100

Declaration Date
February 10, 2015

May 7, 2015

August 3, 2015

Record Date
February 25, 2015

May 26, 2015

August 25, 2015

November 4, 2015

November 25, 2015

Payment Date
March 10, 2015

June 10, 2015

September 10, 2015

December 10, 2015

The payment of any future dividends will be at the discretion of our Board of Directors and will depend upon our results
of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness
we may incur, restrictions imposed by applicable law, tax considerations and other factors that our Board of Directors deems
relevant. In addition, our ability to pay dividends on our common stock will be limited by restrictions on our ability to pay dividends
or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions to us, in
each case, under the terms of our current and any future agreements governing our indebtedness.

Cash Flows

Cash flows from operating, investing and financing activities are as follows:

(in millions)
Net cash provided by (used in):

Operating activities

Investing activities

Net change in accounts payable - inventory financing

Other financing activities

Financing activities

Years Ended December 31,

2015

2014

2013

277.5
(354.4)

435.0
(164.8)

366.3
(47.1)

95.9
(322.4)
(226.5)

75.5
(187.5)
(112.0)

7.4
(175.7)
(168.3)

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

(3.5)
(306.9) $

(1.8)
156.4

(0.7)
150.2

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Operating Activities

Cash flows from operating activities are as follows:

(in millions)

2015

2014

Dollar Change

Years Ended December 31,

Net income
Adjustments for the impact of non-cash items(1)
Net income adjusted for the impact of non-cash items(2)
Changes in assets and liabilities:
Accounts receivable(3)
Merchandise inventory(4)
Accounts payable-trade(5)
Other

Net cash provided by operating activities

403.1

244.9

150.3

553.4

(342.6)
(31.5)
100.5
(2.3)
277.5

231.9

476.8

(117.6)
44.2

43.7
(12.1)
435.0

158.2
(81.6)
76.6

(225.0)
(75.7)
56.8

9.8
(157.5)

(1)

(2)

(3)

(4)

(5)

Includes items such as Deferred income taxes, Depreciation and amortization, Equity-based compensation expense, Gain
on remeasurement of equity method investment, Loss (income) from equity method investment and net loss on
extinguishments of long-term debt.

The increase in cash flows reflected stronger operating results driven by organic sales growth and the impact of
consolidating five months of Kelway financial results. A decrease in the net loss on extinguishments of long-term debt,
as a result of fewer debt refinancing activities in 2015 as compared to 2014, and lower interest expense, partially offset
by higher income tax expense, also contributed to the strong operating results.

The decrease in cash flows was driven by a higher accounts receivable balance at December 31, 2015 driven by higher
sales in our Public segment where customers generally take longer to pay than customers in our Corporate segment,
slower government payments in certain states due to budget issues and the lower accounts receivable balance at December
31, 2014 driven by early payments from certain customers.

The decrease in cash flows was primarily due to the lower inventory balance as of December 31, 2014 as a result of the
timing of inventory receipts and earlier than expected inventory shipments at the end of 2014 due to accelerated customer
roll-outs and an increase in inventory on-hand as of December 31, 2015 to support the growth in the business.

The increase in cash flows was primarily due to the timing of inventory purchases, longer payment terms with certain
vendors and growth in the business.

(in millions)

2014

2013

Dollar Change

Years Ended December 31,

Net income
Adjustments for the impact of non-cash items(1)
Net income adjusted for the impact of non-cash items(2)
Changes in assets and liabilities:

Accounts receivable
Merchandise inventory(3)
Accounts payable-trade(4)
Other

Net cash provided by operating activities

244.9
231.9

476.8

(117.6)
44.2

43.7
(12.1)
435.0

132.8
280.6

413.4

(170.8)
(67.5)
146.1

45.1

366.3

112.1
(48.7)
63.4

53.2

111.7
(102.4)
(57.2)
68.7

(1)

(2)

(3)

Includes items such as depreciation and amortization, equity-based compensation expense and net loss on extinguishments
of long-term debt.

The increase in cash flows reflected stronger operating results in 2014 compared to 2013.

The increase in cash flows was primarily due to the timing of inventory receipts and earlier than expected inventory
shipments at the end of 2014 due to accelerated customer rollouts.

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(4)

The decline in cash flows was driven by the timing of inventory purchases at the end of 2014 versus 2013.

In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle, defined as days
of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts
payable, based on a rolling three-month average. Components of our cash conversion cycle are as follows:

(in days)
Days of sales outstanding (DSO) (1)
Days of supply in inventory (DIO) (2)
Days of purchases outstanding (DPO) (3)

Cash conversion cycle

December 31,

2015

2014

2013

13
(40)
21

13
(34)
21

14
(35)
23

(1)

(2)

(3)

Represents the rolling three-month average of the balance of trade accounts receivable, net at the end of the period divided
by average daily net sales for the same three-month period. Also incorporates components of other miscellaneous
receivables.

Represents the rolling three-month average of the balance of Merchandise inventory at the end of the period divided by
average daily cost of goods sold for the same three-month period.

Represents the rolling three-month average of the combined balance of accounts payable-trade, excluding cash overdrafts,
and accounts payable-inventory financing at the end of the period divided by average daily cost of goods sold for the
same three-month period.

The cash conversion cycle remained at 21 days at December 31, 2015 and December 31, 2014. The increase in DSO was
primarily driven by a higher Accounts receivable balance at December 31, 2015 driven by higher Public segment sales where
customers generally take longer to pay than customers in our Corporate segment, slower government payments in certain states
due to budget issues and an increase in Net sales and related Accounts receivable for third-party services such as software assurance
and warranties. These services have an unfavorable impact on DSO as the receivable is recognized on the balance sheet on a gross
basis while the corresponding sales amount in the Statement of Operations is recorded on a net basis. These services have a
favorable impact on DPO as the payable is recognized on the balance sheet without a corresponding cost of sale in the Statement
of Operations because the cost paid to the vendor or third-party service provider is recorded as a reduction to net sales. In addition
to the impact of these services on DPO, DPO also increased due to the mix of payables with certain vendors that have longer
payment terms.

The cash conversion cycle decreased to 21 days at December 31, 2014 compared to 23 days at December 31, 2013,
primarily driven by improvement in DSO. The decline in DSO was primarily driven by improved collections and early payments
from certain customers. Additionally, the timing of inventory receipts at the end of 2014 had a favorable impact on DIO and an
unfavorable impact on DPO.

Investing Activities

Net cash used in investing activities increased $189.6 million in 2015 compared to 2014. The increase was primarily due
to the completion of the acquisition of Kelway by purchasing the remaining 65% of its outstanding common stock on August 1,
2015. Additionally, capital expenditures increased $35.1 million to $90.1 million from $55.0 million for 2015 and 2014, respectively,
primarily for our new office location and an increase in spending related to improvements to our information technology systems.

Net cash used in investing activities increased $117.7 million in 2014 compared to 2013. We paid $86.8 million in the
fourth quarter of 2014 to acquire a 35% non-controlling interest in Kelway. Additionally, capital expenditures increased $7.9
million to $55.0 million from $47.1 million in 2014 and 2013, respectively, primarily for improvements to our information
technology systems during both years.

Financing Activities

Net cash used in financing activities increased $114.5 million in 2015 compared to 2014. The increase was primarily
driven by share repurchases during the year ended December 31, 2015 which resulted in an increase in cash used for financing
activities of $241.3 million. For more information on our share repurchase program, see Item 5, “Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.” The increase was partially offset by the changes
in accounts payable-inventory financing, which resulted in an increase in cash provided for financing activities of $20.4 million,
and the net impact of our debt transactions which resulted in cash outflows of $7.1 million and $145.9 million during the years

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ended December 31, 2015 and 2014, respectively. The increase in cash provided by accounts payable-inventory financing was
primarily due to a new vendor added to our previously existing inventory financing agreement. For a description of the inventory
financing transactions impacting each period, see Note 6 (Inventory Financing Agreements) to the accompanying Consolidated
Financial Statements. For a description of the debt transactions impacting each period, see Note 8 (Long-Term Debt) to the
accompanying Consolidated Financial Statements.

Net cash used in financing activities decreased $56.3 million in 2014 compared to 2013. The decrease was primarily
driven by several debt refinancing transactions during each period and our July 2013 IPO, which generated net proceeds of $424.7
million after deducting underwriting discounts, expenses and transaction costs. The net impact of our debt transactions resulted
in cash outflows of $145.9 million and $518.3 million during 2014 and 2013, respectively, as cash was used in each period to
reduce our total long-term debt. For a description of the debt transactions impacting each period, see Note 8 (Long-Term Debt)
to the accompanying Consolidated Financial Statements.

Long-Term Debt and Financing Arrangements

As of December 31, 2015, we had total indebtedness of $3.3 billion, of which $1.6 billion was secured indebtedness. At
December 31, 2015, we were in compliance with the covenants under our various credit agreements and indentures. The amount
of CDW’s restricted payment capacity under the Senior Secured Term Loan Facility was $679.7 million at December 31, 2015.

For further details regarding our debt and each of the transactions described below, see Note 8 (Long-Term Debt) to the

accompanying Consolidated Financial Statements.

During the year ended December 31, 2015, the following events occurred with respect to our debt structure:

• On August 1, 2015, we consolidated Kelway’s Term Loan and Kelway’s Revolving Credit Facility. Kelway’s Term
Loan is denominated in British Pounds. The Kelway Revolving Credit Facility is a multi-currency revolving credit
facility under which Kelway is permitted to borrow an aggregate amount of £50.0 million ($73.7 million) as of
December 31, 2015.

• On March 3, 2015, we completed the issuance of $525.0 million principal amount of 5.0% Senior Notes due 2023

which will mature on September 1, 2023.

• On March 3, 2015, we redeemed the remaining $503.9 million aggregate principal amount of the 8.5% Senior Notes

due 2019, plus accrued and unpaid interest through the date of redemption, April 2, 2015.

Inventory Financing Agreements

We have entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various
suppliers under certain terms and conditions. These amounts are classified separately as accounts payable-inventory financing on
the Consolidated Balance Sheets. We do not incur any interest expense associated with these agreements as balances are paid when
they are due. For further details, see Note 6 (Inventory Financing Agreements) to the accompanying Consolidated Financial
Statements.

Contractual Obligations

We have future obligations under various contracts relating to debt and interest payments, operating leases and asset
retirement obligations. Our estimated future payments, based on undiscounted amounts, under contractual obligations that existed
as of December 31, 2015, are as follows:

(in millions)
Term Loan (1)
Kelway Term Loan (1)
Senior Notes due 2022 (2)
Senior Notes due 2023 (2)
Senior Notes due 2024 (2)
Operating leases (3)
Asset retirement obligations (4)
Total

Payments Due by Period

Total

< 1 year

1-3 years

4-5 years

> 5 years

$ 1,703.4

90.9

852.0

735.1

859.7

143.2

63.9

13.5

36.0

26.3

31.6

22.5

126.3

$ 1,513.2

77.4

72.0

52.5

63.3

41.7

—

72.0

52.5

63.3

37.1

—

672.0

603.8

701.5

41.9

1.8
$ 4,386.1

0.8
194.6

0.5
433.7

0.3
$ 1,738.4

0.2
$ 2,019.4

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(1)

(2)

(3)

Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest
payments for variable rate debt were calculated using interest rates as of December 31, 2015. Excluded from these amounts
are the amortization of debt issuance and other costs related to indebtedness.

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.

Includes the minimum lease payments for non-cancelable operating leases of properties and equipment used in our
operations. Additionally, included in these amounts are future minimum lease payments commencing in the fourth quarter
of 2016 that relate to the lease entered into in December 2014 for our new office location north of Chicago. Also reflected
in these amounts is the future expiration of two leases in the first quarter of 2016 for facilities currently in use by us which
will be consolidated into an office location north of Chicago and accordingly, these leases will not be renewed. Capital
leases included in property and equipment are not material.

(4)

Represent commitments to return property subject to operating leases to original condition upon lease termination.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect
on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources.

Inflation

Inflation has not had a material impact on our operating results. We generally have been able to pass along price increases
to our customers, though certain economic factors and technological advances in recent years have tended to place downward
pressure on pricing. We also have been able to generally offset the effects of inflation on operating costs by continuing to emphasize
productivity improvements and by accelerating our overall cash conversion cycle. There can be no assurances, however, that
inflation would not have a material impact on our sales or operating costs in the future.

Commitments and Contingencies

The information set forth in Note 14 (Commitments and Contingencies) to the accompanying Consolidated Financial

Statements included in Part II, Item 8 of this Form 10-K is incorporated herein by reference.

Critical Accounting Policies and Estimates

The preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make use
of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the
reported periods. We base our estimates on historical experience and on various other assumptions that we believe are reasonable
under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities
that are not readily apparent from other sources. These estimates have not historically required significant management judgment.
Our actual results have not differed materially from our estimates, nor have we historically made significant changes to the methods
for determining these estimates. We do not believe it is reasonably likely that the estimates and related assumptions will change
materially in the foreseeable future however actual results could differ from those estimates.

In Note 1 (Description of Business and Summary of Significant Accounting Policies) to the accompanying Consolidated
Financial Statements, we include a discussion of the significant accounting policies used in the preparation of our Consolidated
Financial Statements. We believe the following are the most critical accounting policies and estimates that include significant
judgments used in the preparation of the Consolidated Financial Statements. We consider an accounting policy or estimate to be
critical if it requires assumptions to be made that were uncertain at the time they were made, and if changes in these assumptions
could have a material impact on our financial condition or results of operations.

Revenue Recognition

We are a primary distribution channel for a large group of vendors and suppliers, including OEMs, software publishers
and wholesale distributors. We record revenue from sales transactions when title and risk of loss are passed to our customer, there
is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is
fixed or determinable, and collectability is reasonably assured. Our shipping terms typically specify F.O.B. destination, at which
time title and risk of loss have passed to the customer.

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Revenues from the sales of hardware products and software products and licenses are generally recognized on a gross
basis with the selling price to the customer recorded as sales and the acquisition cost of the product recorded as cost of sales. These
items can be delivered to customers in a variety of ways, including (i) as physical product shipped from our warehouse, (ii) via
drop-shipment by the vendor or supplier, or (iii) via electronic delivery for software licenses. At the time of sale, we record an
estimate for sales returns and allowances based on historical experience. Our vendor partners warrant most of the products we
sell.

We leverage drop-shipment arrangements with many of our vendors and suppliers to deliver products to our customers
without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize
revenue for drop-shipment arrangements on a gross basis upon delivery to the customer with contract terms that typically specify
F.O.B. destination. We recognize revenue on a gross basis as the principal in the transaction because we are the primary obligor
in the arrangement, we assume inventory risk if the product is returned by the customer, we set the price of the product charged
to the customer, we assume credit risk for the amounts invoiced, and we work closely with our customers to determine their
hardware and software specifications. These arrangements generally represent approximately 45% to 55% of total net sales,
including approximately 15% to 20% related to electronic delivery for software licenses.

Revenue from professional services is either recognized as provided for services billed at an hourly rate, recognized using
a percentage of completion model for fixed fee project work or recognized using a proportional performance model for services
provided at a fixed fee. Revenue from cloud computing solutions including Software as a Service (“SaaS”) and Infrastructure as
a Service (“IaaS”) arrangements, as well as data center services such as managed and remote managed services, server co-location,
internet connectivity and data backup and storage, is recognized over the period service is provided.

We also sell certain products for which we act as an agent. Products in this category include the sale of third-party services,
warranties, software assurance (“SA”) and third-party hosted SaaS and IaaS arrangements. SA is a product that allows customers
to upgrade, at no additional cost, to the latest technology if new applications are introduced during the period that the SA is in
effect. These sales do not meet the criteria for gross sales recognition, and thus are recognized on a net basis at the time of sale.
Under net sales recognition, the cost paid to the vendor or third-party service provider is recorded as a reduction to sales, resulting
in net sales being equal to the gross profit on the transaction.

Our larger customers are offered the opportunity by certain of our vendors to purchase software licenses and SA under
enterprise agreements (“EAs”). Under EAs, customers are considered to be compliant with applicable license requirements for
the ensuing year, regardless of changes to their employee base. Customers are charged an annual true-up fee for changes in the
number of users over the year. With most EAs, our vendors will transfer the license and bill the customer directly, paying resellers
such as us an agency fee or commission on these sales. We record these fees as a component of net sales as earned and there is no
corresponding cost of sales amount. In certain instances, we bill the customer directly under an EA and account for the individual
items sold based on the nature of the item. Our vendors typically dictate how the EA will be sold to the customer.

We also sell some of our products and services as part of bundled contract arrangements containing multiple deliverables,
which may include a combination of the products and services. For each deliverable that represents a separate unit of accounting,
total arrangement consideration is allocated based upon the relative selling prices of each element. The allocated arrangement
consideration is recognized as revenue in accordance with the principles described above. Selling prices are determined by using
vendor specific objective evidence (“VSOE”) if it exists. Otherwise, selling prices are determined using third party evidence
(“TPE”). If neither VSOE or TPE is available, we use our best estimate of selling prices.

We record freight billed to our customers as net sales and the related freight costs as a Cost of sales.

Deferred revenue includes (1) payments received from customers in advance of providing the product or performing

services, and (2) amounts deferred if other conditions of revenue recognition have not been met.

We perform an analysis of the estimated number of days of sales in-transit to customers at the end of each period based
on a weighted-average analysis of commercial delivery terms that includes drop-shipment arrangements. This analysis is the basis
upon which we estimate the amount of sales in-transit at the end of the period and adjust revenue and the related costs to reflect
only what has been received by the customer. Changes in delivery patterns may result in a different number of business days used
in making this adjustment and could have a material impact on our revenue recognition for the period.

Vendor Programs

We receive incentives from certain of our vendors related to cooperative advertising allowances, volume rebates, bid
programs, price protection and other programs. These incentives generally relate to written agreements with specified performance
requirements with the vendors and are recorded as adjustments to cost of sales or inventory, depending on the nature of the incentive.
Vendors may change the terms of some or all of these programs, which could have an impact on our results of operations.

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We record receivables from vendors related to these programs when the amounts are probable and reasonably estimable.
Some programs are based on the achievement of specific targets, and we base our estimates on information provided by our vendors
and internal information to assess our progress toward achieving those targets. If actual performance does not match our estimates,
we may be required to adjust our receivables. We record reserves for vendor receivables for estimated losses due to vendors’
inability to pay or rejections by vendors of claims; however, if actual collections differ from our estimates, we may incur additional
losses that could have a material impact on gross margin and operating income.

Goodwill

Goodwill is not amortized but is subject to periodic testing for impairment at the reporting unit level. We perform an
evaluation of goodwill, utilizing either a quantitative or qualitative impairment test, on an annual basis, or more frequently if
circumstances indicate a potential impairment. The annual test for impairment is conducted as of December 1. Our reporting units
used to assess potential goodwill impairment are the same as its operating segments.

Under a quantitative assessment, testing for impairment of goodwill is a two-step process. The first step compares the
fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its
fair value, the second step compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill
to determine the amount of impairment loss. Fair value of a reporting unit is determined by using a weighted combination of an
income approach (75%) and a market approach (25%), as this combination is considered the most indicative of our fair value in
an orderly transaction between market participants.

Under the income approach, we determine fair value based on estimated future cash flows of a reporting unit, discounted
by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate
of return an outside investor would expect to earn. The estimated future cash flows of each reporting unit are based on internally
generated forecasts for the remainder of the respective reporting period and the next six years. We use a 3.5% long-term assumed
consolidated annual net sales growth rate for periods after the six-year forecast.

Under the market approach, we utilize valuation multiples derived from publicly available information for guideline
companies to provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a
company. The valuation multiples are applied to the reporting units.

Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and
assumptions, including net sales growth rates, gross margins, operating margins, discount rates and future market conditions,
among others. Any changes in the judgments, estimates or assumptions used could produce significantly different results.

Under a qualitative assessment, the most recent quantitative assessment is the starting point to determine if it is more
likely than not that the reporting unit’s goodwill is impaired. As part of this qualitative assessment, we assess relevant events and
circumstances including macroeconomic conditions, industry and market conditions, cost factors, overall financial performance,
changes in share price and entity-specific events.

December 1, 2015 Impairment Analysis

We completed our annual impairment analysis as of December 1, 2015 by utilizing a qualitative assessment for all reporting
units. We determined that it was more-likely-than-not that the fair value of each reporting unit exceeded its carrying value. As a
result of this determination, the quantitative two-step impairment analysis was deemed unnecessary.

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December 1, 2014 Impairment Analysis

We performed our annual impairment analysis as of December 1, 2014 by utilizing a quantitative assessment for all
reporting units. Each reporting unit passed the first step of the analysis, and accordingly, we were not required to perform the
second step of the analysis. The estimated fair value of our reporting units substantially exceeds the recorded carrying value.
Therefore, it is not reasonably likely that significant changes in these estimates would occur that would result in an impairment
charge related to these assets. Information regarding our 2014 impairment analysis is as follows:

(in millions)

Corporate

Public

Canada

CDW Advanced Services

Intangible assets

As of December 31, 2014

Percentage
Fair Value
Exceeds
Carrying Value

Discount Rate
Applied to
Estimated Future
Cash Flows

169%

147%

276%

78%

9.0%

9.3%

11.5%

Intangible assets include customer relationships, trade names, internally developed software and other intangibles.
Intangible assets with determinable lives are amortized on a straight-line basis over the estimated useful lives of the assets. The
cost of software developed or obtained for internal use is capitalized and amortized on a straight-line basis over the estimated
useful life of the software. These intangible assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate
of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an
asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying
amount over its fair value. In addition, each quarter, we evaluate whether events and circumstances warrant a revision to the
remaining estimated useful life of each of these intangible assets. If we were to determine that a change to the remaining estimated
useful life of an intangible asset was necessary, then the remaining carrying amount of the intangible asset would be amortized
prospectively over that revised remaining useful life.

During the years ended December 31, 2015 and 2014, we concluded our intangible assets with determinable lives were

not impaired and no significant changes to the remaining useful lives were necessary.

Income Taxes

Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their
reported amounts in the Consolidated Financial Statements using enacted tax rates in effect for the year in which the differences
are expected to reverse. We perform an evaluation of the realizability of our deferred tax assets on a quarterly basis. This evaluation
requires us to use estimates and make assumptions and considers all positive and negative evidence and factors, such as the
scheduled reversal of temporary differences, the mix of earnings in the jurisdictions in which we operate, and prudent and feasible
tax planning strategies.

We account for unrecognized tax benefits based upon our assessment of whether a tax benefit is more likely than not to
be sustained upon examination by tax authorities. We report a liability for unrecognized tax benefits resulting from unrecognized
tax benefits taken or expected to be taken in a tax return and recognize interest and penalties, if any, related to unrecognized tax
benefits in income tax expense.

Recent Accounting Pronouncements

The information set forth in Note 2 (Recent Accounting Pronouncements) to the accompanying Consolidated Financial

Statements included in Part II, Item 8 of this Form 10-K is incorporated herein by reference.

Subsequent Events

The information set forth in Note 19 (Subsequent Events) to the accompanying Consolidated Financial Statements included

in Part II, Item 8 of this Form 10-K is incorporated herein by reference.

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Item 7A. Quantitative and Qualitative Disclosures of Market Risks

Interest Rate Risk

Our market risks relate primarily to changes in interest rates. The interest rates on borrowings under our senior secured
asset-based revolving credit facility, our senior secured term loan facility, and the Kelway term loan are floating and, therefore,
are subject to fluctuations. In order to manage the risk associated with changes in interest rates on borrowings under our senior
secured term loan facility, we have entered into interest rate caps to add stability to interest expense and to manage our exposure
to interest rate fluctuations.

As of December 31, 2015 we have twenty interest rate cap agreements in effect through January 14, 2017 with a combined
notional amount of $1,400.0 million which entitle us to payments from the counterparty of the amount, if any, by which three-
month LIBOR exceeds 2.0% during the agreement period. For additional details, see Note 8 (Long-Term Debt) to the accompanying
Consolidated Financial Statements.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital

Resources - Contractual Obligations” for information on cash flows, interest rates and maturity dates of our debt obligations.

Foreign Currency Risk

We transact business in foreign currencies other than the U.S. dollar, primarily the Canadian dollar and the British pound,
which exposes us to foreign currency exchange rate fluctuations. Revenue and expenses generated from our international operations
are generally denominated in the local currencies of the corresponding countries. The functional currency of our international
operating subsidiaries is the same as the corresponding local currency. Upon consolidation, as results of operations are translated,
operating results may differ from expectations. The direct effect of foreign currency fluctuations on our results of operations has
not been material as the majority of our results of operations are denominated in U.S. dollars.

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Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2015 and 2014

Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013

Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2015, 2014 and 2013

Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013

Notes to Consolidated Financial Statements

Page

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of CDW Corporation

We have audited the accompanying consolidated balance sheets of CDW Corporation and subsidiaries as of December
31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash
flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule
listed in the Index at Item 15 (a)(2). These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial
position of CDW Corporation and subsidiaries at December 31, 2015 and 2014, and the consolidated results of their operations
and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted
accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), CDW Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2015, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework), and our report dated February 24, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois

February 24, 2016

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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except per-share amounts)

Assets

Current assets:

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $6.0 and $5.7, respectively

Merchandise inventory

Miscellaneous receivables

Prepaid expenses and other

Total current assets

Property and equipment, net

Equity investments

Goodwill

Other intangible assets, net

Other assets

Total assets

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable-trade

Accounts payable-inventory financing

Current maturities of long-term debt

Deferred revenue

Accrued expenses:

Compensation

Interest

Sales taxes

Advertising

Other

Total current liabilities

Long-term liabilities:

Debt

Deferred income taxes

Other liabilities

Total long-term liabilities

Commitments and contingencies (Note 14)

Stockholders’ equity:

Preferred stock, $0.01 par value, 100.0 shares authorized; and no shares issued or outstanding for both periods

Common stock, $0.01 par value, 1,000.0 shares authorized; 168.2 and 172.2 shares issued and outstanding, respectively

Paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

December 31,

2015

2014

37.6

344.5

2,017.4

1,561.1

393.1

198.4

144.3

2,790.8

175.4

—

2,500.4

1,276.4

12.3
6,755.3

866.5

439.6

27.2

151.9

120.4

25.1

38.1

52.3

337.5

155.6

54.7

2,453.4

137.2

86.7

2,217.6

1,168.8

12.2
6,075.9

704.0

332.1

15.4

81.3

130.1

28.1

29.1

34.0

166.2

1,887.3

113.9

1,468.0

3,232.5

3,150.6

469.6

70.0

475.0

45.8

3,772.1

3,671.4

—

1.7

—

1.7

2,806.9

2,711.9

(1,651.6)

(1,760.5)

(61.1)

1,095.9

(16.6)

936.5

6,755.3

6,075.9

The accompanying notes are an integral part of the Consolidated Financial Statements.

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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per-share amounts)

Net sales
Cost of sales
Gross profit
Selling and administrative expenses
Advertising expense
Income from operations
Interest expense, net
Net loss on extinguishments of long-term debt
Gain on remeasurement of equity investment
Other (expense) income, net
Income before income taxes
Income tax expense
Net income

Net income per common share:
Basic
Diluted

Weighted-average common shares outstanding:
Basic
Diluted

Cash dividends declared per common share

Years Ended December 31,

2015
$12,988.7
10,872.9
2,115.8
1,226.0
147.8
742.0
(159.5)
(24.3)
98.1
(9.3)
647.0
(243.9)
403.1

2014
$12,074.5
10,153.2
1,921.3
1,110.3
138.0
673.0
(197.3)
(90.7)
—
2.7
387.7
(142.8)
244.9

2013
$ 10,768.6
9,008.3
1,760.3
1,120.9
130.8
508.6
(250.1)
(64.0)
—
1.0
195.5
(62.7)
132.8

$
$

2.37
2.35

$
$

1.44
1.42

$
$

0.85
0.84

170.3
171.8

170.6
172.8

156.6
158.7

$ 0.3100

$ 0.1950

$ 0.0425

The accompanying notes are an integral part of the Consolidated Financial Statements.

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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)

Net income
Foreign currency translation (net of tax benefits of $0.3 million, $0.5
million and $0 million, respectively)
Other comprehensive loss
Comprehensive income

Years Ended December 31,

2015

2014

2013

403.1

244.9

132.8

(44.5)
(44.5)
358.6

(10.3)
(10.3)
234.6

(6.7)
(6.7)
126.1

The accompanying notes are an integral part of the Consolidated Financial Statements.

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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions)

Preferred Stock

Common Stock

Amount

Paid-in
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
(Loss) Income

Total
Stockholders’
Equity

Balance at December 31, 2012

— $ —

145.2

$ 2,207.7

(2,073.0) $

0.4

Equity-based compensation expense

Issuance of common stock

Repurchase of common stock

Dividends paid

Reclassification to goodwill for accrued
charitable contributions

Incentive compensation plan units withheld for
taxes

Net income

Foreign currency translation

Balance at December 31, 2013

Equity-based compensation expense

Stock option exercises

Excess tax benefits from equity-based
compensation

Coworker stock purchase plan

Dividends paid

Net income

Foreign currency translation

Balance at December 31, 2014

Equity-based compensation expense

Stock option exercises

Common stock issued for equity-based
compensation

Excess tax benefits from equity-based
compensation

Coworker stock purchase plan

Common stock issued for acquisition of
business

Dividends paid

Net income

Repurchases of common stock

Foreign currency translation

Balance at December 31, 2015

—

26.8

—

1.4

—

0.3

—

46.6

424.4

—

9.4

—

(0.2)

(7.3)

—

(24.1)

132.8

—

— $ —

172.0

1.7

$ 2,688.1

(1,971.8) $

—

0.2

—

16.4

1.3

0.3

5.8

—

(33.6)

244.9

—

(6.7)

(6.3) $

—

(10.3)

— $ —

172.2

1.7

$ 2,711.9

(1,760.5) $

(16.6) $

—

0.1

0.3

—

0.3

1.6

—

(6.3)

—

28.3

2.4

—

0.6

8.7

55.0

—

(52.9)

403.1

(241.3)

—

(44.5)

136.5

46.6

424.7

(0.2)

(7.3)

9.4

(24.1)

132.8

(6.7)

711.7

16.4

1.3

0.3

5.8

(33.6)

244.9

(10.3)

936.5

28.3

2.4

—

0.6

8.7

55.0

(52.9)

403.1

(241.3)

(44.5)

— $ —

168.2

1.7

$ 2,806.9

(1,651.6) $

(61.1) $

1,095.9

The accompanying notes are an integral part of the Consolidated Financial Statements.

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

Cash flows from operating activities:

Net income
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization
Equity-based compensation expense
Deferred income taxes
Amortization of deferred financing costs, debt premium and debt discount, net
Net loss on extinguishments of long-term debt
Loss (income) from equity investments
Gain on remeasurement of equity investment
Other
Changes in assets and liabilities:
Accounts receivable
Merchandise inventory
Other assets
Accounts payable-trade
Other current liabilities
Long-term liabilities

Net cash provided by operating activities

Cash flows from investing activities:

Capital expenditures
Payment for equity investment
Payment of accrued charitable contribution related to the MPK Coworker Incentive Plan II
Premium payments on interest rate cap agreements
Acquisition of business, net of cash acquired
Net cash used in investing activities

Cash flows from financing activities:

Proceeds from borrowings under revolving credit facility
Repayments of borrowings under revolving credit facility
Repayments of long-term debt
Proceeds from issuance of long-term debt
Payments to extinguish long-term debt
Payments of debt financing costs
Net change in accounts payable-inventory financing
Proceeds from issuance of common stock
Proceeds from stock option exercises
Proceeds from Coworker Stock Purchase Plan
Repurchases of common stock
Dividends paid
Excess tax benefits from equity-based compensation
Payment of incentive compensation plan withholding taxes
Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents – beginning of period

Cash and cash equivalents – end of period

Supplementary disclosure of cash flow information:

Interest paid
Taxes paid, net

Years Ended December 31,

2015

2014

2013

403.1

244.9

132.8

227.4
31.2
(54.5)
6.4
24.3
11.2
(98.1)
2.4

(342.6)
(31.5)
(71.2)
100.5
47.5
21.4
277.5

(90.1)
—
—
(0.5)
(263.8)
(354.4)

314.5
(314.5)
(32.8)
525.0
(525.3)
(6.8)
95.9
—
2.4
8.7
(241.3)
(52.9)
0.6
—
(226.5)
(3.5)

(306.9)

344.5

207.9
16.4
(89.1)
6.4
90.7
(1.2)
—
0.8

(117.6)
44.2
(18.7)
43.7
1.7
4.9
435.0

(55.0)
(86.8)
(20.9)
(2.1)
—
(164.8)

—
—
(15.4)
1,175.0
(1,299.0)
(21.9)
75.5
—
1.3
5.8
—
(33.6)
0.3
—
(112.0)
(1.8)

156.4

188.1

37.6

344.5

208.2
46.6
(48.7)
8.8
64.0
—
—
1.7

(170.8)
(67.5)
(10.1)
146.1
64.1
(8.9)
366.3

(47.1)
—
—
—
—
(47.1)

63.0
(63.0)
(51.1)
1,535.2
(2,047.4)
(6.1)
7.4
424.7
—
—
(0.2)
(7.3)
0.6
(24.1)
(168.3)
(0.7)

150.2

37.9

188.1

(154.6) $
(300.2) $

(195.8) $
(241.2) $

(267.6)
(82.5)

$
$

The accompanying notes are an integral part of the Consolidated Financial Statements.

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Description of Business and Summary of Significant Accounting Policies

Description of Business

CDW Corporation (“Parent”) is a Fortune 500 company and a leading provider of integrated information technology
(“IT”) solutions to small, medium and large business, government, education and healthcare customers in North America
and the United Kingdom. The Company’s offerings range from discrete hardware and software products to integrated IT
solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.

Throughout this report, the terms “the Company” and “CDW” refer to Parent and its 100% owned subsidiaries.

Parent has two 100% owned subsidiaries, CDW LLC and CDW Finance Corporation. CDW LLC is an Illinois limited
liability company that, together with its 100% owned subsidiaries, holds all material assets and conducts all business
activities and operations of the Company. CDW Finance Corporation is a Delaware corporation formed for the sole
purpose of acting as co-issuer of certain debt obligations as described in Note 17 (Supplemental Guarantor Information)
and does not hold any material assets or engage in any business activities or operations.

On August 1, 2015, the Company completed the acquisition of Kelway TopCo Limited (“Kelway”) by purchasing the
remaining 65% of its outstanding common stock which increased the Company’s ownership interest from 35% to 100%,
and provided the Company control. For further details regarding the acquisition, see Note 3 (Acquisition).

CDW Corporation was previously owned directly by CDW Holdings LLC (“CDW Holdings”), a company controlled by
investment funds affiliated with Madison Dearborn Partners, LLC (“Madison Dearborn”) and Providence Equity Partners
L.L.C. (“Providence Equity”), certain other co-investors and certain members of CDW management. On October 12,
2007, CDW Corporation was acquired through a merger transaction by an entity controlled by investment funds affiliated
with Madison Dearborn and Providence Equity (the “Madison Dearborn and Providence Equity Acquisition”).

On July 2, 2013, Parent completed an initial public offering (“IPO”) of its common stock. In connection with the IPO,
CDW Holdings distributed all of its shares of Parent’s common stock to its members in June 2013 in accordance with
the members’ respective membership interests and was subsequently dissolved in August 2013. For additional discussion
of the IPO, see Note 10 (Stockholders’ Equity).

Basis of Presentation

The Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted
in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission
(“SEC”).

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Parent and its 100% owned subsidiaries. All intercompany
transactions and accounts are eliminated in consolidation.

Use of Estimates

Business Combinations

The Company accounts for all business combinations using the acquisition method of accounting, which allocates the
fair value of the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on
their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and
liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management
makes significant estimates and assumptions. The Company may utilize third-party valuation specialists to assist the

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company in the allocation. Initial purchase price allocations are subject to revision within the measurement period, not
to exceed one year from the date of acquisition. Acquisition-related expenses and transaction costs associated with business
combinations are expensed as incurred.

Cash and Cash Equivalents

Cash and cash equivalents include all deposits in banks and short-term (original maturities of three months or less at the
time of purchase), highly liquid investments that are readily convertible to known amounts of cash and are so near maturity
that there is insignificant risk of changes in value due to interest rate changes.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and typically do not bear interest. The Company provides
allowances for doubtful accounts related to accounts receivable for estimated losses resulting from the inability of its
customers to make required payments. The Company takes into consideration the overall quality of the receivable portfolio
along with specifically-identified customer risks.

Merchandise Inventory

Inventory is valued at the lower of cost or market value. Cost is determined using a weighted-average cost method. Price
protection is recorded when earned as a reduction to the cost of inventory. The Company decreases the value of inventory
for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based
upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future
demand and market conditions.

Miscellaneous Receivables

Miscellaneous receivables generally consist of amounts due from vendors. The Company receives incentives from vendors
related to cooperative advertising, volume rebates, bid programs, price protection and other programs. These incentives
generally relate to written vendor agreements with specified performance requirements and are recorded as adjustments
to Cost of sales or Merchandise inventory, depending on the nature of the incentive.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. The Company calculates depreciation expense
using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over
the shorter of their useful lives or the initial lease term. Expenditures for major renewals and improvements that extend
the useful life of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense
as incurred. The estimated useful lives of property and equipment are as follows:

Classification
Machinery and equipment

Building and leasehold improvements

Computer and data processing equipment

Computer software

Furniture and fixtures

Estimated
Useful Lives

5 to 10 years
4 to 25 years

3 to 5 years

4 to 10 years

The Company has asset retirement obligations associated with commitments to return property subject to operating leases
to its original condition upon lease termination. The Company’s asset retirement liability was $1.8 million and $0.5
million as of December 31, 2015 and 2014, respectively.

Equity Investments

If the Company is not required to consolidate its investment in another entity because it does not have control, the Company
uses the equity method if it (i) can exercise significant influence over the other entity and (ii) holds common stock of the
other entity. Under the equity method, investments are carried at cost, plus or minus the Company’s share of equity in
the increases and decreases in the investee’s net assets after the date of acquisition and adjustments for basis differences.
The Company’s share of the net income or loss of equity method investees is included in Other (expense) income, net in
the Consolidated Statements of Operations.

Table of Contents

Goodwill

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company performs an evaluation of goodwill, utilizing either a quantitative or qualitative impairment test, on an
annual basis, or more frequently if circumstances indicate a potential impairment. The annual test for impairment is
conducted as of December 1. The Company’s reporting units used to assess potential goodwill impairment are the same
as its operating segments.

Under a quantitative assessment, testing for impairment of goodwill is a two-step process. The first step compares the
fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit
exceeds its fair value, the second step compares the implied fair value of reporting unit goodwill with the carrying amount
of that goodwill to determine the amount of impairment loss. Fair value of a reporting unit is determined by using a
weighted combination of an income approach (75%) and a market approach (25%), as this combination is considered
the most indicative of the Company’s fair value in an orderly transaction between market participants.

Under the income approach, the Company determines fair value based on estimated future cash flows of a reporting unit,
discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting
unit and the rate of return an outside investor would expect to earn. The estimated future cash flows of each reporting
unit is based on internally generated forecasts for the remainder of the respective reporting period and the next six years.
The Company uses a 3.5% long-term assumed consolidated annual net sales growth rate for periods after the six-year
forecast.

Under the market approach, the Company utilizes valuation multiples derived from publicly available information for
guideline companies to provide an indication of how much a knowledgeable investor in the marketplace would be willing
to pay for a company. The valuation multiples are applied to the reporting units.

Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and
assumptions, including net sales growth rates, gross margins, operating margins, discount rates and future market
conditions, among others. Any changes in the judgments, estimates or assumptions used could produce significantly
different results.

Under a qualitative assessment, the most recent quantitative assessment is the starting point to determine if it is more-
likely-than-not that the reporting unit’s goodwill is impaired. As part of this qualitative assessment, the Company assesses
relevant events and circumstances including macroeconomic conditions, industry and market conditions, cost factors,
overall financial performance, changes in share price and entity-specific events.

Intangible Assets

Intangible assets with determinable lives are amortized on a straight-line basis over their respective estimated useful
lives. The cost of computer software developed or obtained for internal use is capitalized and amortized on a straight-
line basis over the estimated useful life of the software. Intangible assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of
recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual
disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss
is recorded for the excess of the asset’s carrying amount over its fair value. In addition, each quarter, the Company
evaluates whether events and circumstances warrant a revision to the remaining estimated useful life of each of these
intangible assets. If the Company were to determine that a change to the remaining estimated useful life of an intangible
asset was necessary, then the remaining carrying amount of the intangible asset would be amortized prospectively over
that revised remaining useful life.

The following table shows estimated useful lives of definite-lived intangible assets:

Classification
Customer relationships and contracts
Trade name

Internally developed software

Other

Estimated
Useful Lives

3 to 14 years

generally 20 years

2 to 5 years

1 to 10 years

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred Financing Costs

Deferred financing costs, such as underwriting, financial advisory, professional fees and other similar fees are capitalized
and recognized in Interest expense, net over the estimated life of the related debt instrument using the effective interest
method or straight-line method, as applicable. The Company classifies deferred financing costs as a direct deduction
from the carrying value of the long-term debt liability on the Consolidated Balance Sheets, except for deferred financing
costs associated with line-of-credit arrangements which are presented as an asset, included within “Other assets” on the
Consolidated Balance Sheets.

Derivatives

The Company has entered into interest rate cap agreements for the purpose of economically hedging its exposure to
fluctuations in interest rates. These derivatives are recorded at fair value in the Consolidated Balance Sheets.

The Company’s interest rate cap agreements are not designated as cash flow hedges of interest rate risk. Changes in fair
value of the derivatives are recorded directly to Interest expense, net in the Consolidated Statements of Operations.

Fair Value Measurements

Fair value is defined under GAAP as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. A fair value hierarchy has been established for
valuation inputs to prioritize the inputs into three levels based on the extent to which inputs used in measuring fair value
are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by
the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 – observable inputs such as quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar
instruments in markets that are not active and model-based valuation techniques for which all significant assumptions
are observable in the market or can be corroborated by observable market data for substantially the full term of the assets
or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market
participants would use in pricing the asset or liability. The fair values are therefore determined using model-based
techniques that include option pricing models, discounted cash flow models and similar techniques.

Accumulated Other Comprehensive Loss

Foreign currency translation adjustments are included in Stockholders’ equity under Accumulated other comprehensive
loss.

The components of accumulated other comprehensive loss are as follows:

(in millions)
Foreign currency translation

Accumulated other comprehensive loss

Revenue Recognition

Years Ended December 31,

2015

2014

2013

$ (61.1) $ (16.6) $
$ (61.1) $ (16.6) $

(6.3)
(6.3)

The Company is a primary distribution channel for a large group of vendors and suppliers, including original equipment
manufacturers (“OEMs”), software publishers and wholesale distributors. The Company records revenue from sales
transactions when title and risk of loss are passed to the customer, there is persuasive evidence of an arrangement for
sale, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable, and collectability
is reasonably assured. The Company’s shipping terms typically specify F.O.B. destination, at which time title and risk
of loss have passed to the customer.

Revenues from the sales of hardware products and software products and licenses are generally recognized on a gross
basis with the selling price to the customer recorded as sales and the acquisition cost of the product recorded as cost of
sales. These items can be delivered to customers in a variety of ways, including (i) as physical product shipped from the
Company’s warehouse, (ii) via drop-shipment by the vendor or supplier, or (iii) via electronic delivery for software

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

licenses. At the time of sale, the Company records an estimate for sales returns and allowances based on historical
experience. The Company’s vendor partners warrant most of the products the Company sells.

The Company leverages drop-shipment arrangements with many of its vendors and suppliers to deliver products to its
customers without having to physically hold the inventory at its warehouses, thereby increasing efficiency and reducing
costs. The Company recognizes revenue for drop-shipment arrangements on a gross basis upon delivery to the customer
with contract terms that typically specify F.O.B. destination.

Revenue from professional services is either recognized as provided for services billed at an hourly rate, recognized using
a percentage of completion model for fixed fee project work or recognized using a proportional performance model for
services provided at a fixed fee. Revenue from cloud computing solutions including Software as a Service (“SaaS”) and
Infrastructure as a Service (“IaaS”) arrangements, as well as data center services such as managed and remote managed
services, server co-location, internet connectivity and data backup and storage, is recognized over the period service is
provided.

The Company also sells certain products for which it acts as an agent. Products in this category include the sale of third-
party services, warranties, software assurance (“SA”) and third-party hosted SaaS and IaaS arrangements. SA is a product
that allows customers to upgrade, at no additional cost, to the latest technology if new applications are introduced during
the period that the SA is in effect. These sales do not meet the criteria for gross sales recognition, and thus are recognized
on a net basis at the time of sale. Under net sales recognition, the cost paid to the vendor or third-party service provider
is recorded as a reduction to sales, resulting in net sales being equal to the gross profit on the transaction.

The Company’s larger customers are offered the opportunity by certain of its vendors to purchase software licenses and
SA under enterprise agreements (“EAs”). Under EAs, customers are considered to be compliant with applicable license
requirements for the ensuing year, regardless of changes to their employee base. Customers are charged an annual true-
up fee for changes in the number of users over the year. With most EAs, the Company’s vendors will transfer the license
and bill the customer directly, paying resellers such as the Company an agency fee or commission on these sales. The
Company records these fees as a component of net sales as earned and there is no corresponding cost of sales amount.
In certain instances, the Company bills the customer directly under an EA and accounts for the individual items sold
based on the nature of the item. The Company’s vendors typically dictate how the EA will be sold to the customer.

The Company also sells some of its products and services as part of bundled contract arrangements containing multiple
deliverables, which may include a combination of products and services. For each deliverable that represents a separate
unit of accounting, total arrangement consideration is allocated based upon the relative selling prices of each element.
The allocated arrangement consideration is recognized as revenue in accordance with the principles described above.
Selling prices are determined by using vendor specific objective evidence (“VSOE”) if it exists. Otherwise, selling prices
are determined using third-party evidence (“TPE”). If neither VSOE or TPE is available, the Company uses its best
estimate of selling prices.

The Company records freight billed to its customers as Net sales and the related freight costs as a Cost of sales.

Deferred revenue includes (1) payments received from customers in advance of providing the product or performing
services and (2) amounts deferred if other conditions of revenue recognition have not been met.

The Company performs an analysis of the estimated number of days of sales in-transit to customers at the end of each
period based on a weighted-average analysis of commercial delivery terms that includes drop-shipment arrangements.
This analysis is the basis upon which the Company estimates the amount of sales in-transit at the end of the period and
adjusts revenue and the related costs to reflect only what has been received by the customer. Changes in delivery patterns
may result in a different number of business days used in making this adjustment and could have a material impact on
the Company’s revenue recognition for the period.

Sales Taxes

Sales tax amounts collected from customers for remittance to governmental authorities are presented on a net basis in
the Company’s Consolidated Statements of Operations.

Advertising

Advertising costs are generally charged to expense in the period incurred. Cooperative reimbursements from vendors are
recorded in the period the related advertising expenditure is incurred. The Company classifies vendor consideration as a
reduction to Cost of sales.

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity-Based Compensation

The Company measures all equity-based payments using a fair-value-based method and records compensation expense
over the requisite service period using the straight-line method in its Consolidated Financial Statements. Estimated
forfeiture rates have been developed based upon historical experience.

Interest Expense

Interest expense is typically recognized in the period incurred at the applicable interest rate in effect.

Foreign Currency Translation

The Company’s functional currency is the U.S. dollar. The functional currency of the Company’s international operating
subsidiaries is generally the same as the corresponding local currency. Assets and liabilities of the international operating
subsidiaries are translated at the spot rate in effect at the applicable reporting date. Revenues and expenses of the
international operating subsidiaries are translated at the average exchange rates in effect during the applicable period.
The resulting foreign currency translation adjustment is recorded as Accumulated other comprehensive loss, which is
reflected as a separate component of Stockholders’ equity.

Income Taxes

Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their
reported amounts in the Consolidated Financial Statements using enacted tax rates in effect for the year in which the
differences are expected to reverse. The Company performs an evaluation of the realizability of deferred tax assets on a
quarterly basis. This evaluation requires management to make use of estimates and assumptions and considers all positive
and negative evidence and factors, such as the scheduled reversal of temporary differences, the mix of earnings in the
jurisdictions in which the Company operates, and prudent and feasible tax planning strategies.

The Company accounts for unrecognized tax benefits based upon its assessment of whether a tax benefit is more likely
than not to be sustained upon examination by tax authorities. The Company reports a liability for unrecognized tax benefits
resulting from unrecognized tax benefits taken or expected to be taken in a tax return and recognizes interest and penalties,
if any, related to its unrecognized tax benefits in income tax expense.

Recent Accounting Pronouncements

Balance Sheet Classification of Deferred Taxes

In November 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update
(“ASU”) 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, simplifying the balance
sheet classification of deferred taxes by requiring all deferred taxes, along with any related valuation allowance, to be
presented as noncurrent. This ASU is effective for the Company beginning in the first quarter of 2017, allows for early
adoption and may be applied either prospectively or retrospectively. This ASU is not expected to have a material impact
on the Company’s Consolidated Financial Statements.

Accounting for Measurement Period Adjustments in a Business Combination

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting
for Measurement-Period Adjustments, eliminating the requirement for an acquirer in a business combination to account
for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments
during the period in which they determine the amounts, including the effect on earnings of any amounts they would have
recorded in previous periods if the accounting had been completed at the acquisition date. This ASU is effective for the
Company beginning in the first quarter of 2016, allows for early adoption and must be applied prospectively to adjustments
to provisional amounts occurring after the effective date. The Company elected to early adopt ASU 2015-16 in the fourth
quarter of 2015 and applied the new guidance to the measurement period adjustments recognized during the fourth quarter
of 2015. For more information, see Note 3 (Acquisition).

Simplifying the Measurement of Inventory

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, amending
the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable
value instead of the lower of cost or market value. This ASU is effective for the Company beginning in the first quarter

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of 2017, allows for early adoption and must be applied prospectively after the date of adoption. This ASU is not expected
to have a material impact on the Company’s Consolidated Financial Statements.

Debt Issuance Costs

In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the
Presentation of Debt Issuance Costs, amending the presentation of debt issuance costs by requiring deferred financing
costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying
amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for deferred
financing costs are not affected by the amendments in this ASU. This ASU is effective for the Company beginning in the
first quarter of 2016, allows for early adoption permitted and requires retrospective application to all prior periods.

The Company elected to early adopt ASU 2015-03 in the second quarter of 2015. As of June 30, 2015, the Company
classified deferred financing costs as a direct deduction from the carrying value of the long-term debt liability on the
Consolidated Balance Sheets. Additionally, as of June 30, 2015, the Company retroactively adjusted the deferred financing
costs and long-term debt liability presented as of December 31, 2014 by reducing the long-term debt liability by the
amount of the deferred financing costs and eliminating the presentation of deferred financing costs as an asset on the
Consolidated Balance Sheets.

In August 2015, the FASB issued ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and
Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC
Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update), clarifying the SEC’s views
on the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The ASU
allows for an entity to defer and present debt issuance costs associated with line-of-credit arrangements as an asset and
subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless
of whether there are any outstanding borrowings on the line-of-credit arrangements. This ASU is effective upon issuance
and the Company adopted it in the third quarter of 2015. As of September 30, 2015, the Company classified deferred
financing costs related to the Senior Secured Asset-Based Revolving Credit Facility as an asset, included within Other
Assets on the Consolidated Balance Sheets. The Company retroactively adjusted the deferred financing costs and long-
term debt liability presented as of December 31, 2014 to align it to the presentation required by ASU 2015-15.

These adjustments had no impact on Net income, Comprehensive income, total Stockholders’ equity cash flows, or
Adjusted EBITDA, a non-GAAP measure defined in the Company’s credit agreement. The Company has determined the
adjustments are not material either individually or in aggregate to any of its previously issued Consolidated Financial
Statements. A summary of the revisions to the Consolidated Balance Sheet at December 31, 2014 is as follows:

(in millions)

Deferred financing costs, net

Other assets
Long-term debt

Revenue Recognition

December 31, 2014

As Previously
Reported

As Reported Upon
Adoption of ASU 2015-03
and ASU 2015-15

$
$

33.0

$
3.2
(3,174.6) $

—

12.2
(3,150.6)

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), replacing most
existing revenue recognition guidance under GAAP and eliminating industry specific guidance. The core principal of the
new guidance is that an entity should recognize revenue for the transfer of goods and services equal to an amount it
expects to be entitled to receive for those goods and services. In August 2015, the FASB issued ASU 2015-14, Revenue
from Contracts with Customers (Topic 606): Deferral of the Effective Date, deferring the effective date by one year. This
ASU will be effective for the Company beginning in the first quarter of 2018, allows for early adoption in the first quarter
of 2017 and may be applied using either a full retrospective approach or a modified retrospective approach. The Company
is currently evaluating the method of adoption and the impact this ASU will have on its Consolidated Financial Statements.

Acquisition

On August 1, 2015, the Company completed the acquisition of Kelway by purchasing the remaining 65% of its outstanding
common stock which increased the Company’s ownership interest from 35% to 100%, and provided the Company control.

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Kelway is a U.K.-based IT solutions provider which has cross-border supply chain relationships that enable it to conduct
business in more than 80 countries.

A summary of the total consideration transferred is as follows:

(in millions)

Acquisition-Date Fair Value

Cash
Fair value of CDW common stock (1)
Fair value of previously held equity investment on the date of acquisition (2)
Total consideration

291.6

33.2

174.9

499.7

(1)

(2)

The Company issued 1.6 million shares of CDW common stock. The fair value of the common stock was based
on the closing market price on July 31, 2015, adjusted for the lack of marketability as the shares of CDW common
stock issued to certain sellers are subject to a three-year lock up restriction from August 1, 2015. One of the
sellers granted 0.6 million stock options to certain Kelway coworkers over his shares of CDW common stock
received in the transaction. The fair value of these stock options was $21.8 million, which has been accounted
for as post-combination stock-based compensation and is being amortized over the weighted-average requisite
service period of 3.2 years and recorded in Selling and administrative expenses in the Consolidated Statements
of Operations.

As a result of the Company obtaining control over Kelway, the Company’s previously held 35% equity investment
was remeasured to fair value, resulting in a gain of $98.1 million included in Gain on remeasurement of equity
investment in the Consolidated Statements of Operations. The fair value of the previously held equity investment
was determined by management with the assistance of a third party valuation firm, based on information available
at the acquisition date.

Transaction-related costs associated with this acquisition of $5.8 million during the year ended December 31, 2015 were
expensed as incurred and included in Selling and administrative expenses in the Consolidated Statements of Operations.

The recognized amounts of identifiable assets acquired and liabilities assumed, translated using the foreign currency
exchange rates on the date of acquisition, are as follows:

(in millions)

Cash

Accounts receivable

Merchandise inventory

Property and equipment, net
Identified intangible assets (2)
Other assets

Total assets acquired

Accounts payable (3)
Deferred revenue

Other liabilities

Deferred tax liabilities

Debt

Total liabilities assumed

Total identifiable net assets

Goodwill

Total purchase price

Acquisition-Date Fair Value (1)

27.8

135.7

27.1

11.4

289.8
53.5

545.3
(86.1)
(57.2)
(40.7)
(55.3)
(111.5)
(350.8)
194.5

305.2

499.7

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)

The fair values assigned to the tangible and intangible assets acquired and liabilities assumed were based on
management’s estimates and assumptions, as well as other information compiled by management, including
valuations that utilize customary valuation procedures and techniques. These fair values are subject to change
within the measurement period. In the fourth quarter of 2015, the Company recorded a reduction of $8.6 million
to goodwill, primarily related to adjustments to taxes, merchandise inventory and deferred revenue.

(2)

Details of the identified intangible assets acquired are as follows:

(in millions)

Customer relationships

Customer contracts

Developed technology

Trade name

Total identified intangible assets

Acquisition-Date Fair
Value

Weighted-Average
Amortization Period
(in years)

260.8

25.9

1.7

1.4

289.8

(3)

Accounts payable includes both Accounts payable-trade and Accounts payable-inventory financing.

Goodwill in the amount of $305.2 million was recognized in the acquisition of Kelway and is attributable to the business
from new customers and the value of the acquired assembled workforce. The goodwill was allocated to the Kelway
operating segment which is included with CDW Advanced Services and Canada in an all other category (“Other”). The
full amount of goodwill recognized is not deductible for income tax purposes in the United Kingdom.

For the year ended December 31, 2015, net sales and net income of Kelway included in the Company’s Consolidated
Statements of Operations from the date of acquisition were $350.7 million and $8.6 million, respectively.

The unaudited pro forma Consolidated Statements of Operations in the table below summarizes the combined results of
operations of the Company and Kelway, as if the acquisition had been completed on January 1, 2014, and gives effect to
pro forma events that are factually supportable and directly attributable to the transaction. The unaudited pro forma results
reflect adjustments for equity-based compensation, acquisition and integration costs, incremental intangible asset
amortization based on the fair values of each identifiable intangible asset, which are subject to change within the
measurement period, pre-acquisition equity earnings, the gain on the remeasurement of the Company’s previously held
35% equity method investment, elimination of pre-acquisition intercompany sales transactions and the impacts of certain
other pre-acquisition transactions. Pro forma adjustments were tax-effected at the statutory rates within the applicable
jurisdictions.

This unaudited pro forma information is presented for informational purposes only and may not be indicative of the
historical results of operations that would have been obtained if the acquisition had taken place on January 1, 2014, nor
the results that may be obtained in the future. This unaudited pro forma information does not reflect future synergies,
integration costs or other such costs or savings.

The unaudited pro forma Consolidated Statements of Operations for the years ended December 31, 2015 and 2014 is as
follows:

(in millions)

Net sales

Net income

Years Ended December 31,

2015

2014

13,507.6

363.7

12,933.1

243.1

The unaudited pro forma information above reflects the following adjustments:

(1)

(2)

(3)

Excludes acquisition and integration expenses directly related to the transaction.

Includes additional amortization expense related to the fair value of acquired intangibles.

Excludes the gain of resulting from the remeasurement of the Company’s previously held 35% equity investment
to fair value upon the completion of the acquisition.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4)

(5)

(6)

Excludes the Company’s share of net income/loss from its previously held 35% equity investment prior to the
completion of the acquisition.

Excludes non-cash equity-based compensation related to certain equity awards granted by one of the sellers to
Kelway coworkers in July 2015 prior to the completion of the acquisition.

Includes additional non-cash equity-based compensation related to equity awards granted to Kelway coworkers
after the completion of the acquisition.

(7)

Includes the elimination of inter-company sales transactions prior to the completion of the acquisition.

Property and Equipment

Property and equipment consists of the following:

(in millions)
Land
Machinery and equipment
Building and leasehold improvements
Computer and data processing equipment
Computer software
Furniture and fixtures
Construction in progress
Property and equipment
Less: accumulated depreciation
Property and equipment, net

December 31,

2015

2014

27.7
56.8
126.7
99.6
10.3
29.4
23.9
374.4
199.0
175.4

27.7
54.3
105.1
65.6
10.6
21.7
24.7
309.7
172.5
137.2

During 2015, 2014 and 2013, the Company recorded disposals of $22.8 million, $32.0 million and $7.9 million,
respectively, to remove assets that were no longer in use from property and equipment. The Company recorded a pre-tax
loss of $0.2 million, $0.1 million and $0.0 million in 2015, 2014 and 2013, respectively, for certain disposed assets that
were not fully depreciated.

Depreciation expense for the years ended December 31, 2015, 2014 and 2013 is $28.6 million, $25.8 million and $27.2
million, respectively.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Other Intangible Assets

Goodwill

The changes in goodwill by reportable segment for the years ended December 31, 2015 and 2014 are as follows:

(in millions)
Balances as of December 31, 2013:

Goodwill

Accumulated impairment charges

2014 Activity:

Foreign currency translation

Balances as of December 31, 2014:

Goodwill

Accumulated impairment charges

2015 Activity:

Foreign currency translation
Acquisition (2)

Balances as of December 31, 2015:

Goodwill

Accumulated impairment charges

Corporate

Public

Other (1)

Consolidated

2,803.2
(1,571.4)
1,231.8

1,265.4
(354.1)
911.3

105.5
(28.3)
77.2

4,174.1
(1,953.8)
2,220.3

—

2,803.2
(1,571.4)
1,231.8

1,265.4
(354.1)
911.3

—

(2.7)
(2.7)

102.8
(28.3)
74.5

(22.4)
305.2

282.8

(2.7)
(2.7)

4,171.4
(1,953.8)
2,217.6

(22.4)
305.2

282.8

2,803.2
(1,571.4)
1,231.8

1,265.4
(354.1)
911.3

385.6
(28.3)
357.3

4,454.2
(1,953.8)
2,500.4

(1)

(2)

Other is comprised of CDW Advanced Services, Canada and Kelway reporting units.

For further information regarding the addition to goodwill resulting from the Company’s acquisition of Kelway,
see Note 3 (Acquisition).

December 1, 2015 Impairment Analysis

The Company completed its annual impairment analysis as of December 1, 2015 by utilizing a qualitative assessment
for all reporting units. The Company determined that it was more-likely-than-not that the fair value of each reporting
unit exceeded its carrying value. As a result of this determination, the quantitative two-step impairment analysis was
deemed unnecessary.

December 1, 2014 Impairment Analysis

The Company performed its annual impairment analysis as of December 1, 2014 by utilizing a quantitative assessment
for all reporting units. Each reporting unit passed the first step of the analysis, and accordingly, the Company was not
required to perform the second step of the analysis.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Intangible Assets

A summary of intangible assets at December 31, 2015 and 2014 is as follows:

(in millions)

December 31, 2015
Customer relationships and contracts

Trade name

Internally developed software

Other

Total

December 31, 2014
Customer relationships

Trade name

Internally developed software

Other

Total

Gross
Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

2,128.3

1,162.0

422.3

136.5

5.8

173.9

77.7

2.9

966.3

248.4

58.8

2.9

2,692.9

1,416.5

1,276.4

1,859.7

1,012.1

421.0

110.1
3.2

152.0

58.9
2.2

847.6

269.0

51.2
1.0

2,394.0

1,225.2

1,168.8

During the years ended December 31, 2015 and 2014, the Company recorded disposals of $6.1 million and $41.7 million,
respectively, to remove fully amortized internally developed software assets that were no longer in use.

Amortization expense related to intangible assets for the years ended December 31, 2015, 2014 and 2013 is $198.8
million, $182.1 million and $181.0 million, respectively.

Estimated future amortization expense related to intangible assets for the next five years is as follows:

(in millions)

Years ending December 31,
2016

2017

2018

2019

2020

Estimated Future
Amortization Expense

213.7

207.1

191.3

178.0

157.3

Inventory Financing Agreements

The Company has entered into agreements with certain financial intermediaries to facilitate the purchase of inventory
from various suppliers under certain terms and conditions, as described below. These amounts are classified separately
as Accounts payable-inventory financing on the accompanying Consolidated Balance Sheets. The Company does not
incur any interest expense associated with these agreements as balances are paid when they are due.

Amounts included in accounts payable-inventory financing are as follows:

(in millions)

Revolving Loan inventory financing agreement

Other inventory financing agreements

Accounts payable-inventory financing

December 31,

2015

2014

427.0

12.6

439.6

330.1

2.0

332.1

As described in Note 8 (Long-Term Debt), in June 2014, the Company entered into a new senior secured asset-based
revolving credit facility, which incorporates the previous inventory floorplan sub-facility and, among other changes,

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

removes the $400.0 million limit on the size of the floorplan sub-facility. In connection with the floorplan sub-facility,
the Company maintains an inventory financing agreement on an unsecured basis with a financial intermediary to facilitate
the purchase of inventory from certain vendors (the “Revolving Loan inventory financing agreement”). Amounts
outstanding under the Revolving Loan inventory financing agreement are unsecured and non-interest bearing.

The Company also maintains other inventory financing agreements with financial intermediaries to facilitate the purchase
of inventory from certain vendors. As of December 31, 2015 and 2014, amounts owed under other inventory financing
agreements were $12.6 million and $2.0 million, respectively, of which $1.2 million and $2.0 million, respectively, were
collateralized by the inventory purchased under these financing agreements and a second lien on the related accounts
receivable.

Lease Commitments

The Company is obligated under various non-cancelable operating lease agreements for office facilities that generally
provide for minimum rent payments and a proportionate share of operating expenses and property taxes and include
certain renewal and expansion options. For the years ended December 31, 2015, 2014 and 2013, rent expense under these
lease arrangements was $24.7 million, $21.4 million and $20.7 million, respectively. Capital leases included in property
and equipment are not material.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2015 are as follows:

(in millions)

Years ending December 31,
2016

2017

2018

2019

2020

Thereafter
Total future minimum lease payments (1)

Future Minimum
Lease Payments

22.5

22.1

19.6

19.0

18.1

41.9

143.2

(1)

Included in these amounts are future minimum lease payments commencing in the fourth quarter of 2016 which
relate to the lease entered into in December 2014 for the Company’s new office location north of Chicago. Also
reflected in these amounts is the future expiration of two leases in the first quarter of 2016 for facilities currently
in use by the Company which will be consolidated into the new office location north of Chicago and accordingly,
these leases will not be renewed.

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Long-Term Debt

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-term debt as of December 31, 2015 is as follows:

(dollars in millions)

Year Ended December 31, 2015

Interest Rate

Principal

Unamortized
Discount,
Premium, and
Deferred
Financing Costs(1)

Total

Senior secured asset-based revolving credit facility

—% $

Kelway revolving credit facility

Senior secured term loan facility

Kelway term loan

Senior notes due 2022

Senior notes due 2023

Senior notes due 2024

Total long-term debt

Less current maturities of long-term debt

Long-term debt, excluding current maturities

Year Ended December 31, 2014
Senior secured asset-based revolving credit facility

Senior secured term loan facility
Senior notes due 2019(2)
Senior notes due 2022

Senior notes due 2024

Total long-term debt

Less current maturities of long-term debt

Long-term debt, excluding current maturities

—%

3.25%

1.98%

6.0%

5.0%

5.5%

— $

—

1,498.1

88.4

600.0

525.0

575.0

3,286.5
(27.2)
3,259.3

—% $

— $

3.25%

1,513.50

8.5%

6.0%

5.5%

503.9

600.0

575.0

3,192.4
(15.4)
3,177.0

— $

—
(6.7)
(0.6)
(6.6)
(6.2)
(6.7)
(26.8)
—
(26.8) $

— $

(8.3)
(3.1)
(7.6)
(7.4)
(26.4)
—
(26.4) $

—

1,491.4

87.8

593.4

518.8

568.3

3,259.7
(27.2)
3,232.5

—

1,505.2

500.8

592.4

567.6

3,166.0
(15.4)
3,150.6

(1)

As a result of the adoption of ASU 2015-03 during the second quarter of 2015, historical periods have been
revised to reflect the change in the presentation of deferred financing costs, which are now shown as a reduction
of long-term debt, instead of being presented as a separate asset on the Consolidated Balance Sheets. In the third
quarter of 2015, the Company adopted ASU 2015-15 which allows entities to present deferred financing costs
for line-of-credit arrangements as an asset. As of December 31, 2015, the Company classified deferred financing
costs related to the Senior Secured Asset-Based Revolving Credit Facility as an asset, included within Other
Assets on the Consolidated Balance Sheets. The Company retroactively adjusted the deferred financing costs
and long term liability presented as of December 31, 2014 to align it to the current period presentation. There
are no deferred financing costs related to the Kelway revolving credit facility. For additional information, see
Note 2 (Recent Accounting Pronouncements).

(2)

As of December 31, 2014, the Company reported $1.3 million of unamortized premium on the Senior Notes due
2019 net of deferred financing costs of $4.4 million.

As of December 31, 2015, the Company remained in compliance with the covenants under its various credit agreements.
Under the credit agreement governing the Senior Secured Term Loan Facility, there are restrictions on the ability of CDW
to pay dividends, make share repurchases, redeem subordinated debt and engage in certain other transactions. At
December 31, 2015, the amount of CDW’s restricted payment capacity under the Senior Secured Term Loan Facility was
$679.7 million, however the Company is separately permitted to make restricted payments so long as the total net leverage
ratio is less than 3.25 on a pro forma basis. The total net leverage ratio was 3.0 at December 31, 2015.

Senior Secured Asset-Based Revolving Credit Facility (“Revolving Loan”)

At December 31, 2015, the Company had no outstanding borrowings under the Revolving Loan, $2.1 million of undrawn
letters of credit and $404.9 million reserved related to the floorplan sub-facility.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On June 6, 2014, the Company entered into the Revolving Loan, a new five-year $1,250.0 million senior secured asset-
based revolving credit facility, with the facility being available to the Company for borrowings, issuance of letters of
credit and floorplan financing for certain vendor products. The Revolving Loan matures on June 6, 2019, subject to an
acceleration provision discussed below. The Revolving Loan replaced the Company’s previous revolving loan credit
facility that was to mature on June 24, 2016. The Revolving Loan (i) increased the overall revolving credit facility capacity
available to the Company from $900.0 million to $1,250.0 million, (ii) increased the maximum aggregate amount of
increases that may be made to the revolving credit facility from $200.0 million to $300.0 million, (iii) maintained a
maturity acceleration provision based upon excess cash availability whereby the Revolving Loan may mature 45 days
prior to the final maturity of any then outstanding senior debt if excess cash availability does not exceed the outstanding
borrowings of the subject maturing debt at the time of the test plus $150.0 million, (iv) decreased the fee on the unused
portion of the revolving credit facility from either 37.5 or 50 basis points, depending on the amount of utilization, to 25
basis points, (v) decreased the applicable interest rate margin by 50 basis points, and (vi) amended the existing inventory
floorplan sub-facility as discussed below. In connection with the termination of the previous facility, the Company recorded
a loss on extinguishment of long-term debt of $0.4 million in the Consolidated Statement of Operations for the year ended
December 31, 2014, representing a write-off of a portion of unamortized deferred financing costs. Fees of $6.4 million
related to the Revolving Loan were capitalized as deferred financing costs and are being amortized over the five-year
term of the facility on a straight-line basis.

The Revolving Loan incorporates the previous inventory floorplan sub-facility and related Revolving Loan inventory
financing agreement while removing the previous $400.0 million limit on the size of the floorplan sub-facility and the
in-transit reserve of 15.0% of open orders. At December 31, 2015, the financial intermediary reported an outstanding
balance of $415.6 million under the Revolving Loan inventory financing agreement. The amount included on the
Consolidated Balance Sheet as of December 31, 2015 as Accounts payable-inventory financing related to the Revolving
Loan inventory financing agreement of $427.0 million includes $11.4 million for amounts in transit.

Borrowings under the Revolving Loan bear interest at a variable interest rate plus an applicable margin. The interest rate
margin is based on one of two indices, either (i) LIBOR, or (ii) the Alternate Base Rate (“ABR”) with the ABR being the
greater of (a) the prime rate, (b) the federal funds effective rate plus 50 basis points or (c) the one-month LIBOR plus
1.00%. The applicable margin varies (1.50% to 2.00% for LIBOR borrowings and 0.50% to 1.00% for ABR borrowings)
depending upon average daily excess cash availability under the agreement evidencing the Revolving Loan and is subject
to a reduction of 0.25% if, and for as long as, CDW LLC’s corporate credit rating from Standard & Poor’s Rating Services
is BB or better and CDW LLC’s corporate family rating from Moody’s Investors Service, Inc. is Ba3 or better (in each
case with stable or better outlook).

Under the Revolving Loan, the Company is permitted to borrow an aggregate amount of $1,250.0 million; however, its
ability to borrow under the Revolving Loan is limited by a borrowing base. The borrowing base is (a) the sum of the
products of the applicable advance rates on eligible accounts receivable and on eligible inventory as defined in the
agreement less (b) any reserves. At December 31, 2015, the borrowing base was $1,423.1 million based on the amount
of eligible inventory and accounts receivable balances as of November 30, 2015. The Company could have borrowed up
to an additional $843.1 million under the Revolving Loan at December 31, 2015.

The ability to borrow under the Revolving Loan also remains limited by a minimum liquidity condition which provides
that, if excess cash availability is less than the lesser of (i) $125.0 million and (ii) the greater of (A) 10.0% of the borrowing
base and (B) $100.0 million, the lenders are not required to lend any additional amounts under the Revolving Loan unless
the consolidated fixed charge coverage ratio (as described in the agreement evidencing the Revolving Loan) is at least
1.00 to 1.00.

CDW LLC is the borrower under the Revolving Loan. All obligations under the Revolving Loan are guaranteed by Parent
and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries. Borrowings under the Revolving Loan
are collateralized by a first priority interest in inventory (excluding inventory collateralized under the inventory floorplan
arrangements as described in Note 6 (Inventory Financing Agreements) deposits, and accounts receivable, and a second
priority interest in substantially all other assets. The Revolving Loan contains negative covenants that, among other things,
place restrictions and limitations on the ability of Parent and each of CDW LLC’s direct and indirect, 100% owned,
domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other
indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make
acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Revolving Loan
also includes maintenance of a minimum average daily excess cash availability requirement. Should the Company fall
below the minimum average daily excess cash availability requirement for five consecutive business days, the Company

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

becomes subject to a fixed charge coverage ratio until such time as the daily excess cash availability requirement is met
for 30 consecutive business days.

Senior Secured Term Loan Facility (“Term Loan”)

On April 29, 2013, the Company entered into the Term Loan, a seven-year, $1,350.0 million aggregate principal amount
senior secured term loan facility. The Term Loan was issued at a price that was 99.75% of par, which resulted in a discount
of $3.4 million. Substantially all of the proceeds from the Term Loan were used to repay the $1,299.5 million outstanding
aggregate principal amount of the prior senior secured term loan facility (the “Prior Term Loan Facility”). In connection
with this refinancing, the Company recorded a loss on extinguishment of long-term debt of $10.3 million in the
Consolidated Statement of Operations for the year ended December 31, 2013. This loss represented a write-off of the
remaining unamortized deferred financing costs related to the Prior Term Loan Facility.

On July 31, 2013, the Company borrowed an additional $190.0 million aggregate principal amount under the Term Loan
at a price that was 99.25% of par, which resulted in a discount of $1.4 million. Such proceeds were used to redeem a
portion of outstanding 12.535% Senior Subordinated Exchange Notes due 2017. The discounts are reported on the
Consolidated Balance Sheet as a reduction to the face amount of the Term Loan and are being amortized to interest expense
over the term of the related debt. Fees of $6.1 million related to the Term Loan were capitalized as deferred financing
costs and are being amortized over the term of the facility using the effective interest method.

The Company is required to pay quarterly principal installments equal to 0.25% of the original principal amount of the
Term Loan, with the remaining principal amount payable on the maturity date of April 29, 2020. The quarterly principal
installment payments commenced during the quarter ended June 30, 2013. At December 31, 2015, the outstanding principal
amount of the Term Loan was $1,498.1 million, excluding $6.7 million of unamortized discount and deferred financing
costs.

Borrowings under the Term Loan bear interest at either (a) the alternate base rate (“ABR”) plus a margin or (b) LIBOR
plus a margin; provided that for the purposes of the Term Loan, LIBOR shall not be less than 1.00% per annum at any
time (“LIBOR Floor”), payable quarterly on the last day of each March, June, September, and December. The margin is
based upon a net leverage ratio as defined in the agreement governing the Term Loan, ranging from 1.25% to 1.50% for
ABR borrowings and 2.25% to 2.50% for LIBOR borrowings. The total net leverage ratio was 3.0 at December 31, 2015.
As defined in the Company’s credit agreement, the total net leverage ratio is calculated, on a consolidated basis, as the
ratio of total debt at period-end excluding any unamortized discount and/or premium and unamortized deferred financing
costs, less cash and cash equivalents, to trailing twelve months (“TTM”) adjusted earnings before taxes, interest expense,
and depreciation and amortization (“Adjusted EBITDA”), a non-GAAP measure defined in the Company’s credit
agreement. The Term Loan calculates Adjusted EBITDA on a trailing twelve month basis, which includes twelve months
of Kelway’s results on a pro forma basis. An interest rate of 3.25%, LIBOR Floor plus a 2.25% margin, was in effect
during the three-month period ended December 31, 2015.

In order to manage the risk associated with changes in interest rates on borrowings under the Term Loan, the Company
maintains interest rate cap agreements. During the year ended December 31, 2014, the Company entered into fourteen
interest rate cap agreements at a rate of 2.0% with a combined notional amount of $1,000.0 million. Under the 2014
agreements, the Company made premium payments totaling $2.1 million to the counterparties in exchange for the right
to receive payments equal to the amount, if any, by which three-month LIBOR exceeds 2.0% during the agreement period.
During the year ended December 31, 2015, the Company entered into six interest rate cap agreements at a rate of 2.0%
with a combined notional amount of $400.0 million. Under the 2015 agreements, the Company made premium payments
totaling $0.5 million to the counterparties in exchange for the right to receive payments equal to the amount, if any, by
which the three-month LIBOR exceeds 2.0% during the agreement period. These interest rate cap agreements are effective
from January 14, 2015 through January 14, 2017. The fair value of the Company’s interest rate cap agreements was $0.1
million and $1.7 million at December 31, 2015 and 2014, respectively. Previously, the Company had ten interest rate cap
agreements with a combined notional amount of $1,150.0 million that expired on January 14, 2015.

The Company’s interest rate cap agreements have not been designated as cash flow hedges of interest rate risk for GAAP
accounting purposes. The interest rate cap agreements are recorded at fair value on the Consolidated Balance Sheet in
Other Assets each period, with changes in fair value recorded directly to Interest expense, net in the Consolidated
Statements of Operations. The fair value of the Company’s interest rate cap agreements is classified as Level 2 in the fair
value hierarchy. The valuation of the interest rate cap agreements is derived by using a discounted cash flow analysis on
the expected cash receipts that would occur if variable interest rates rise above the strike rates of the caps. This analysis
reflects the contractual terms of the interest rate cap agreements, including the period to maturity, and uses observable

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

market-based inputs, including LIBOR curves and implied volatilities. The Company also incorporates insignificant credit
valuation adjustments to appropriately reflect the respective counterparty’s nonperformance risk in the fair value
measurements. The counterparty credit spreads are based on publicly available credit information obtained from a third
party credit data provider.

CDW LLC is the borrower under the Term Loan. All obligations under the Term Loan are guaranteed by Parent and each
of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries. The Term Loan is collateralized by a second
priority interest in substantially all inventory (excluding inventory collateralized under the inventory floorplan
arrangements as described in Note 6 (Inventory Financing Agreements) deposits, and accounts receivable, and by a first
priority interest in substantially all other assets. The Term Loan contains negative covenants that, among other things,
place restrictions and limitations on the ability of Parent and each of CDW LLC’s direct and indirect, 100% owned,
domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other
indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make
acquisitions, engage in mergers or consolidations or engage in certain transactions with affiliates.

8.5% Senior Notes due 2019 (“2019 Senior Notes”)

At December 31, 2015, there were no outstanding 2019 Senior Notes.

On March 3, 2015, the proceeds from the issuance of the 2023 Senior Notes, discussed below, along with cash on hand,
were deposited with the trustee to redeem the remaining $503.9 million aggregate principal amount of the 2019 Senior
Notes at a redemption price of 104.25% of the principal amount redeemed, plus accrued and unpaid interest up to, but
not including, the date of redemption, April 2, 2015. On the same date, the indenture governing the 2019 Senior Notes
was satisfied and discharged and the Company was released from its remaining obligation by the trustee. In connection
with this redemption, the Company recorded a loss on extinguishment of long-term debt of $24.3 million in the
Consolidated Statement of Operations for the year ended December 31, 2015, which was comprised of $4.2 million for
the write-off of the remaining unamortized deferred financing fees and a redemption premium of $21.4 million, partially
offset by $1.3 million for the write-off of the remaining unamortized premium.

On December 1, 2014, the proceeds from the issuance of the 2024 Senior Notes discussed below, along with cash on
hand, were deposited with the trustee to redeem $541.4 million aggregate principal amount of the 2019 Senior Notes at
a redemption price of 106.202% of the principal amount redeemed, plus accrued and unpaid interest through the date of
redemption. The redemption date was December 31, 2014. In connection with this redemption, the Company recorded a
loss on extinguishment of long-term debt of $36.9 million in the Consolidated Statement of Operations for the year ended
December 31, 2014, which was comprised of $4.7 million for the write-off of a portion of the unamortized deferred
financing fees, a redemption premium of $23.0 million, and a make-whole interest payment of $10.6 million, partially
offset by $1.4 million for the write-off of a portion of the unamortized premium.

On August 5, 2014, the proceeds from the issuance of the 2022 Senior Notes discussed below, along with cash on hand,
were deposited with the trustee to redeem $234.7 million aggregate principal amount of the 2019 Senior Notes at a
redemption price of 108.764% of the principal amount redeemed, plus accrued and unpaid interest through the date of
redemption. The redemption date was September 5, 2014. In connection with this redemption, the Company recorded a
loss on extinguishment of long-term debt of $22.1 million in the Consolidated Statement of Operations for the year ended
December 31, 2014, which was comprised of $2.2 million for the write-off of a portion of the unamortized deferred
financing fees, a redemption premium of $10.0 million, and a make-whole interest payment of $10.6 million, partially
offset by $0.7 million for the write-off of a portion of the unamortized premium.

On March 20, 2014, the Company repurchased and subsequently canceled $25.0 million aggregate principal amount of
the 2019 Senior Notes from an affiliate of Providence Equity in a privately negotiated transaction on an arms’ length
basis at a price of 109.75% of the principal amount. Cash on hand was used to fund the repurchase of $25.0 million
aggregate principal amount, $2.4 million of repurchase premium and $1.0 million in accrued and unpaid interest to the
date of repurchase. In connection with this repurchase, the Company recorded a loss on extinguishment of long-term debt
of $2.7 million in the Consolidated Statement of Operations for the year ended December 31, 2014. This loss represented
$2.4 million in repurchase premium and $0.3 million for the write-off of a portion of the unamortized deferred financing
costs related to the 2019 Senior Notes.

6.0% Senior Notes due 2022 (“2022 Senior Notes”)

At December 31, 2015, the outstanding principal amount of the 2022 Senior Notes was $600.0 million.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On August 5, 2014, CDW LLC and CDW Finance Corporation, as co-issuers, completed the issuance of $600.0 million
aggregate principal amount of 2022 Senior Notes at par. Fees of $8.0 million related to the 2022 Senior Notes were
capitalized as deferred financing costs and are being amortized over the term of the notes on a straight-line basis. The
2022 Senior Notes will mature on August 15, 2022 and bear interest at a rate of 6.00% per annum, payable semi-annually
on February 15 and August 15 of each year. The first interest payment date was February 15, 2015.

CDW LLC and CDW Finance Corporation are the co-issuers of the 2022 Senior Notes and the obligations under the notes
are guaranteed by Parent and each of CDW LLC’s direct and indirect, wholly owned, domestic subsidiaries. The 2022
Senior Notes indenture contains negative covenants that, among other things, place restrictions and limitations on the
ability of Parent and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries to enter into sale and
lease-back transactions, incur additional secured indebtedness and create liens. The indenture governing the 2022 Senior
Notes does not contain any financial covenants.

5.0% Senior Notes due 2023 (“2023 Senior Notes”)

At December 31, 2015, the outstanding principal amount of the 2023 Senior Notes was $525.0 million.

On March 3, 2015, CDW LLC and CDW Finance Corporation, as co-issuers, completed the issuance of $525.0 million
aggregate principal amount of 2023 Senior Notes at par. Fees of $6.8 million related to the 2023 Senior Notes were
capitalized as deferred financing costs and are being amortized over the term of the notes on a straight-line basis. The
2023 Senior Notes will mature on September 1, 2023 and bear interest at a rate of 5.0% per annum, payable semi-annually
on March 1 and September 1 of each year.

CDW LLC and CDW Finance Corporation are the co-issuers of the 2023 Senior Notes and the obligations under the notes
are guaranteed by Parent and each of CDW LLC’s direct and indirect, wholly owned, domestic subsidiaries. The 2023
Senior Notes indenture contains negative covenants that, among other things, place restrictions and limitations on the
ability of Parent and each of CDW LLC’s direct and indirect 100% owned domestic subsidiaries to enter into sale and
lease-back transactions, incur additional secured indebtedness and create liens. The indenture governing the 2023 Senior
Notes does not contain any financial covenants.

5.5% Senior Notes due 2024 (“2024 Senior Notes”)

At December 31, 2015, the outstanding principal amount of the 2024 Senior Notes was $575.0 million.

On December 1, 2014, CDW LLC and CDW Finance Corporation, as co-issuers, completed the issuance of $575.0 million
aggregate principal amount of 2024 Senior Notes at par. Fees of $7.5 million related to the 2024 Senior Notes were
capitalized as deferred financing costs and are being amortized over the term of the notes on a straight-line basis. The
2024 Senior Notes will mature on December 1, 2024 and bear interest at a rate of 5.50% per annum, payable semi-annually
on June 1 and December 1 of each year.

CDW LLC and CDW Finance Corporation are the co-issuers of the 2024 Senior Notes and the obligations under the notes
are guaranteed by Parent and each of CDW LLC’s direct and indirect, wholly owned, domestic subsidiaries. The 2024
Senior Notes indenture contains negative covenants that, among other things, place restrictions and limitations on the
ability of Parent and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries to enter into sale and
lease-back transactions, incur additional secured indebtedness and create liens. The indenture governing the 2024 Senior
Notes does not contain any financial covenants.

Kelway Term Loan (“Kelway Term Loan”)

As a result of the completion of the acquisition of Kelway, the Company consolidated Kelway’s Term Loan as of August
1, 2015. Kelway’s Term Loan is denominated in British Pounds. The carrying value of the Kelway Term Loan as of August
1, 2015 was £64.0 million ($100.0 million), which approximated fair value due to the short period of time between
issuance of this loan and acquisition date.

Kelway is required to make quarterly principal installments of £2.0 million ($2.9 million) on the original principal amount
of the Kelway Term Loan, with the remaining principal amount payable on the maturity date of June 30, 2017. As of
December 31, 2015, the outstanding principal amount of the Kelway Term Loan was £60.0 million ($88.4 million).

Borrowings under the Kelway Term Loan bear interest at LIBOR plus a margin, payable quarterly on the last day of each
March, June, September and December. An interest rate of 1.98%, comprised of LIBOR plus a 1.40% margin, was in
effect during the three-month period ended December 31, 2015.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Kelway Term Loan contains financial and other covenants. As of December 31, 2015, Kelway remained in compliance
with these covenants.

Kelway Revolving Credit Facility (“Kelway Credit Facility”)

The Kelway Credit Facility is a multi-currency revolving credit facility under which Kelway is permitted to borrow an
aggregate amount of £50.0 million ($73.7 million). The Kelway Credit Facility expires on July 17, 2017. As of
December 31, 2015, there were no outstanding borrowings under this facility.

Long-Term Debt Maturities

As of December 31, 2015, the maturities of long-term debt are as follows:

(in millions)

Years ending December 31,
2016

2017

2018

2019

2020

Thereafter

Fair Value

27.2

92.0

15.4

1,436.5
1,700.0

$ 3,286.5

The fair values of the 2022, 2023 and 2024 Senior Notes, as well as the 2019 Senior Notes prior to their redemption, were
estimated using quoted market prices for identical assets or liabilities that are traded in over-the-counter secondary markets
that are not considered active. The fair value of the Term Loan was estimated using dealer quotes for identical assets or
liabilities in markets that are not considered active. Consequently, the Company’s long-term debt is classified as Level 2
within the fair value hierarchy. The fair value of the Kelway Term Loan was estimated using a discounted cash flow
analysis based on current incremental borrowing rates for similar borrowing arrangements.

The approximate fair values and related carrying values of the Company’s long-term debt, including current maturities
and excluding unamortized discount and/or premium and unamortized deferred financing costs, are as follows:

(in millions)

Fair value

Carrying value

Income Taxes

Income before income taxes was taxed under the following jurisdictions:

(in millions)
Domestic
Foreign
Total

December 31,

2015

2014

3,330.4

3,286.5

3,208.7

3,192.4

Years Ended December 31,

2015

2014

2013

626.4
20.6
647.0

366.6
21.1
387.7

179.4
16.1
195.5

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Components of Income tax expense (benefit) consist of the following:

(in millions)
Current:

Federal
State
Foreign
Total current
Deferred:

Domestic
Foreign

Total deferred
Income tax expense

Years Ended December 31,

2015

2014

2013

258.5
28.6
10.1
297.2

(48.5)
(4.8)
(53.3)
243.9

206.8
19.3
5.8
231.9

(89.0)
(0.1)
(89.1)
142.8

96.7
10.1
4.6
111.4

(48.6)
(0.1)
(48.7)
62.7

The reconciliation between the statutory tax rate expressed as a percentage of income before income taxes and the effective
tax rate is as follows:

(dollars in millions)
Statutory federal income tax rate

State taxes, net of federal effect

Effect of rates different than statutory

Foreign withholding tax
Effect of U.K. tax rate change on deferred
taxes

Other

Effective tax rate

Years Ended December 31,

2015

2014

2013

226.4

35.0% $

135.7

35.0% $

16.5

(1.9)
3.3

(4.0)

3.6

2.6
(0.3)
0.5

(0.6)
0.5

6.5
(1.9)
—

—

2.5

1.6
(0.5)
—

—

0.7

68.4
(5.0)
(1.4)
—

—

0.7

35.0%
(2.6)
(0.7)
—

—

0.4

243.9

37.7% $

142.8

36.8% $

62.7

32.1%

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tax effect of temporary differences that give rise to the net deferred income tax liability is presented below:

(in millions)

Deferred tax assets:

Deferred interest

State net operating loss and credit carryforwards, net

Payroll and benefits

Rent

Accounts receivable

Equity compensation plans

Trade credits

Other

Total deferred tax assets

Deferred tax liabilities:

Software and intangibles
Deferred income

Property and equipment

International investments

Other

Total deferred tax liabilities

Deferred tax asset valuation allowance

Net deferred tax liabilities

December 31,

2015

2014

25.0

14.1

21.2

10.8

6.4

17.0

1.5

5.9

32.9

18.8

27.0

5.5

6.3

6.5

1.5

5.0

101.9

103.5

411.0
87.3

30.6

30.4

17.3

576.6

—

425.3
116.2

22.5

—

15.3

579.3

—

474.7

475.8

The Company has state income tax net operating loss carryforwards of $70.0 million, which will expire at various dates
from 2016 through 2033 and state tax credit carryforwards of $16.3 million, which expire at various dates from 2017
through 2020.

Due to the nature of the Kelway (U.K.) acquisition, the Company has provided U.S. income taxes on the excess of the
financial reporting value of the investment over the corresponding tax basis of $30.4 million. As the Company is
indefinitely reinvested in its U.K. business, it will not provide for any additional U.S. income taxes on the undistributed
earnings of the U.K. business. The Company has recognized deferred tax liabilities of $2.0 million as of December 31,
2015 related to withholding taxes on earnings of its Canadian business which are not considered to be indefinitely
reinvested.

In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities, including
the Internal Revenue Service (“IRS”). In general, the Company is no longer subject to audit by the IRS for tax years
through 2011 and state, local or foreign taxing authorities for tax years through 2010. Various other taxing authorities
are in the process of auditing income tax returns of the Company and its subsidiaries. The Company does not anticipate
that any adjustments from the audits would have a material impact on its consolidated financial position, results of
operations or cash flows.

10.

Stockholders’ Equity

Public Offerings

On July 2, 2013, the Company completed an IPO of 23,250,000 shares of common stock. On July 31, 2013, the Company
completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the
underwriters’ July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Such
shares were registered under the Securities Act of 1933, as amended, pursuant to the Company’s Registration Statement
on Form S-1, which was declared effective by the SEC on June 26, 2013. The Company’s shares of common stock were
sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

together generated aggregate net proceeds of $424.7 million to the Company after deducting underwriting discounts,
expenses and transaction costs.

The following pre-tax IPO-related expenses and secondary-offering-related expenses were included within Selling and
administrative expenses in the Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and
2013, respectively.

(in millions)
Acceleration charge for certain equity awards and related employer payroll
taxes(1)
RDU Plan cash retention pool accrual(2)
Management services agreement termination fee(3)
Other expenses (4)
IPO- and secondary-offering-related expenses

Years Ended December 31,

2015

2014

2013

— $

—

0.9

—

1.4

40.7

7.5

24.4

2.4

75.0

(1)

(2)

(3)

(4)

For discussion of the impact of the IPO on the Company’s equity awards, see Note 11 (Equity-Based
Compensation).

For discussion of the RDU Plan, see Note 13 (Coworker Retirement and Other Compensation Benefits).

Represents the payment of a termination fee to affiliates of Madison Dearborn and Providence Equity in
connection with the termination of the management services agreement with such entities.

Other expenses include secondary-offering expenses of $0.9 million, $1.4 million and $0.6 million for the years
ended December 31, 2015, 2014 and 2013, respectively.

The Company has completed the following secondary public offerings, whereby certain selling stockholders sold shares
of common stock to the underwriters. The Company did not receive any proceeds from these sales of shares.

Secondary Offering
Shares

Completion Date of
Secondary Offering

Overallotment Shares(1)

Completion Date of
Overallotment Shares

Secondary Offering
Expenses
(in millions)

15,000,000

10,000,000

15,000,000

10,000,000

11,250,000
8,000,000

11/19/2013

3/12/2014

5/28/2014
9/8/2014(2)
12/8/2014

5/22/2015

8/18/2015
11/30/2015

2,250,000

1,500,000

2,250,000

—

2,250,000

1,500,000

1,687,500
1,200,000

12/18/2013

3/12/2014

6/4/2014

— $

12/8/2014

5/22/2015

8/18/2015
12/9/2015

$
$

0.6

0.4

0.5

0.3

0.2

0.3

0.2
0.4

(1)

(2)

Under each underwriting agreement, the selling stockholders granted the underwriters an option, exercisable
for thirty days, to purchase up to the additional amount of shares noted.

The option to purchase additional shares was not exercised in connection with the September 2014 secondary
offering.

Share Repurchase Program

On November 6, 2014, the Company announced that its Board of Directors approved a $500.0 million share repurchase
program effective immediately under which the Company may repurchase shares of its common stock in the open market
or through privately negotiated transactions, depending on share price, market conditions and other factors. The share
repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and repurchases
may be commenced or suspended from time to time without prior notice.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.

Equity-Based Compensation

Equity-based compensation expense, which is recorded in Selling and administrative expenses in the Consolidated
Statements of Operations, for the years ended December 31, 2015, 2014 and 2013 is as follows:

(in millions)
Equity-based compensation expense

Income tax benefit

Equity-based compensation expense (net of tax)

Years Ended December 31,

2015

2014

2013 (1)

31.2
(10.9)
20.3

16.4
(5.1)
11.3

46.6
(16.5)
30.1

(1)

Includes pre-tax expense of $36.7 million related to the accelerated vesting of certain equity awards granted
prior to the Company’s IPO. All unvested awards granted pursuant to the MPK Coworker Incentive Plan II (the
“MPK Plan”) vested in connection with the IPO as discussed further below in the section labeled “MPK II
Units.”

The total unrecognized compensation cost related to nonvested awards was $57.9 million at December 31, 2015 and is
expected to be recognized over a weighted-average period of 2.2 years.

2013 Long-Term Incentive Plan

The 2013 Long-Term Incentive Plan (“2013 LTIP”) provides for the grant of incentive stock options, nonqualified stock
options, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The
maximum aggregate number of shares that may be issued under the 2013 LTIP is 11,700,000 shares of the Company’s
common stock, in addition to the 3,798,508 shares of restricted stock granted in exchange for unvested Class B Common
Units in connection with the Company’s IPO, as discussed under “Pre-IPO Equity Awards.” As of December 31, 2015,
5,636,925 shares were available for issuance under the 2013 LTIP which was approved by the Company’s pre-IPO
shareholders. Authorized but unissued shares are reserved for issuance in connection with equity-based awards.

Stock Options

During the year ended December 31, 2015, the Company granted 936,865 stock options under the 2013 LTIP. These
options vest annually over three years and have a contractual term of 10 years. The exercise price of a stock option is
equal to the fair value of a share of the Company’s common stock on the date of the grant. The Company uses the Black-
Scholes option pricing model to estimate the fair value of stock options granted. The Black-Scholes option pricing model
incorporates various assumptions including volatility, expected term, risk-free interest rates and expected dividend yield.
The weighted-average assumptions used to value the stock options granted during the years ended December 31, 2015,
2014 and 2013 are as follows:

Grant date fair value
Volatility (1)
Risk-free rate (2)
Expected dividend yield
Expected term (in years) (3)

Years Ended December 31,

2015

2014

2013

11.13
30.00%
1.75%
0.72%
6.0

7.23
30.00%
1.77%
0.70%
6.0

4.75
35.00%
1.58%
1.00%
5.4

(1)

(2)

(3)

Based upon an assessment of the two-year, five-year and implied volatility for the Company’s selected peer
group, adjusted for the Company’s leverage.

Based on a composite U.S. Treasury rate.

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.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock option activity for the year ended December 31, 2015 is as follows:

Outstanding at January 1, 2015

Options

Granted

Forfeited/Expired
Exercised (1)
Outstanding at December 31, 2015

Exercisable at December 31, 2015

Vested and expected to vest at December 31, 2015

Number of
Options

Weighted-
Average
Exercise Price

Weighted-Average
Remaining
Contractual Term
(years)

Aggregate
Intrinsic Value
(millions)

2,421,072

936,865
(59,554)
(101,162)
3,197,221

1,146,008

2,018,385

20.75

37.82

29.49

21.11

25.58

19.39

29.02

7.8

52.6

6.9

8.3

26.0

26.3

(1)

The total intrinsic value of stock options exercised during the years ended December 31, 2015, 2014 and 2013
was $1.9 million, $1.0 million and zero, respectively.

Restricted Stock Units (“RSUs”)

Restricted stock units represent the right to receive unrestricted shares of the Company’s stock at the time of vesting.
RSUs generally cliff-vest at the end of four years.

RSU activity for the year ended December 31, 2015 is as follows:

Nonvested at January 1, 2015
Granted (1)
Vested (2)
Forfeited

Nonvested at December 31, 2015

Number of Units

Weighted-Average
Grant-Date Fair
Value

1,244,702

141,013
(32,181)
(96,135)
1,257,399

17.19

36.24

23.01

17.01

19.19

(1)

(2)

The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2015, 2014
and 2013 is $36.24, $24.29 and $17.03, respectively.

The aggregate fair value of RSUs that vested during the years ended December 31, 2015, 2014 and 2013 is $0.7
million, $0.1 million and zero, respectively.

Performance Share Units (“PSUs”)

As of January 1, 2015, there were 411,580 PSUs outstanding at a weighted-average grant-date fair value of $24.40. During
the year ended December 31, 2015, the Company granted 195,622 PSUs under the 2013 LTIP which cliff-vest at the end
of 3 years. The percentage of PSUs that shall vest will range from 0% to 200% of the number of PSUs granted based on
the Company’s performance against a cumulative adjusted free cash flow measure and cumulative non-GAAP net income
per diluted share measure over a three-year performance period. The weighted-average grant-date fair value of the PSUs
granted during the period was $37.83 per unit. During the year ended December 31, 2015, 28,607 PSUs were forfeited
at a weighted-average grant-date fair value of $28.76. As of December 31, 2015, 578,595 PSUs were outstanding at a
weighted-average grant-date fair value of $28.67. During the years ended December 31, 2015 and 2014, no units vested.

Performance Share Awards (“PSAs”)

During the year ended December 31, 2015, the Company granted 118,676 PSAs under the 2013 LTIP which cliff-vest at
the end of 3 years. The number of PSAs that shall vest will be based on the Company’s performance against a cumulative
adjusted free cash flow measure and cumulative non-GAAP net income per diluted share measure over a three-year

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

performance period. The weighted-average grant-date fair value of the PSAs granted during the year ended December 31,
2015 was $37.79 per award. During the year ended December 31, 2015, no PSAs were forfeited or vested.

Restricted Stock

In connection with the IPO, CDW Holdings distributed all of its shares of the Company’s common stock to its existing
members in accordance with their respective membership interests. Common stock received by holders of Class B
Common Units in connection with the distribution is subject to any vesting provisions previously applicable to the holder’s
Class B Common Units. Class B Common Unit holders received 3,798,508 shares of restricted stock with respect to
Class B Common Units that had not yet vested at the time of the distribution. As of January 1, 2015, there were 260,514
shares of restricted stock outstanding. For the year ended December 31, 2015, 165,697 shares of such restricted stock
vested/settled and 2,789 shares were forfeited. As of December 31, 2015, there were 92,028 shares of unvested stock
outstanding. The aggregate fair value of restricted stock that vested during the years ended December 31, 2015, 2014
and 2013 was $2.8 million, $39.5 million and $20.4 million, respectively.

Equity Awards Granted by Seller of Kelway

The Company issued 1.6 million shares of CDW common stock as part of the consideration transferred to certain sellers
for the acquisition of Kelway. One of the sellers granted 0.6 million stock options to certain Kelway coworkers over his
shares of CDW common stock received in this transaction. The options are not dilutive for purposes of calculating diluted
weighted-average shares outstanding as the underlying shares were issued as part of the consideration transferred and
are included within basic weighted-average shares outstanding since the acquisition date. The weighted average grant
date fair value of the stock options was $21.8 million or $35.93 per option. The grant date fair value of the options was
determined by calculating the fair value of the common stock that was issued which will eventually settle these options.
The exercise price of these stock options is $0.01. The fair value of these stock options has been accounted for as post-
combination stock-based compensation, as service is required for the coworkers to retain the awards, and is being amortized
over the weighted-average requisite service period. No options were forfeited or vested during the year ended
December 31, 2015. Options that are forfeited prior to vesting will not be available for future option issuances and will
revert as consideration to the seller. For further details regarding the acquisition, refer to Note 3 (Acquisition).

Pre-IPO Equity Awards

Prior to the IPO, the Company had the following equity-based compensation plans in place:

Class B Common Units

The Board of Managers of CDW Holdings adopted the CDW Holdings LLC 2007 Incentive Equity Plan (the “Plan”) for
coworkers, managers, consultants and advisors of the Company and its subsidiaries. The Plan permitted a committee
designated by the Board of Managers of CDW Holdings (the “Committee”) to grant or sell to any participant Class A
Common Units or Class B Common Units of CDW Holdings in such quantity, at such price, on such terms and subject
to such conditions that were consistent with the Plan and as established by the Committee.

The Class B Common Units that were granted vested daily on a pro rata basis between the date of grant and the fifth
anniversary thereof and were subject to repurchase by, with respect to vested units, or forfeiture to, with respect to unvested
units, the Company upon the coworker’s separation from service as was set forth in each holder’s Class B Common Unit
Grant Agreement.

The grant date fair value of Class B Common Unit grants was calculated using the Option-Pricing Method. This method
considered Class A Common Units and Class B Common Units as call options on the total equity value, giving
consideration to liquidation preferences and conversion of the preferred units. Such Class A Common Units and Class B
Common Units were modeled as call options that gave their owners the right, but not the obligation, to buy the underlying
equity value at a predetermined (or exercise) price. Class B Common Units were considered to be call options with a
claim on equity value at an exercise price equal to the remaining value immediately after the Class A Common Units and
Class B Common Units with a lower participation threshold were liquidated. The Option-Pricing Method is highly
sensitive to key assumptions, such as the volatility assumption. As such, the use of this method can be applied when the
range of possible future outcomes is difficult to predict.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted-average assumptions and resulting fair value of the Class B Common Unit grants for the year ended
December 31, 2013 are as follows:

Grant date fair value
Volatility (1)
Risk-free rate (2)
Expected dividend yield

Year Ended December 31,

2013

119.00
65.50%
0.18%
0.00%

(1)

Based upon an assessment of the two-year, five-year and implied volatility for the Company’s selected peer
group, adjusted for the Company’s leverage.

(2)

Based on a composite U.S. Treasury rate.

MPK II Units

Contemporaneous with the Madison Dearborn and Providence Equity Acquisition, the Company agreed with Michael P.
Krasny, CDW Corporation founder, former chairman and CEO and significant selling shareholder, to establish the MPK
Plan for the benefit of all of the coworkers of the Company other than members of senior management who received
incentive equity awards under the Plan.

The MPK Plan established an “account” for each eligible participant which was notionally credited with a number of
Class A Common Units of CDW Holdings LLC on October 15, 2007, the day the plan was established. The notional units
credited to participants’ accounts were to cliff-vest at the end of ten years, subject to acceleration upon the occurrence
of certain events. Notional units granted under the MPK Plan were valued on the grant date at $1,000 per unit, the fair
value equivalent of the Class A Common Units at the time the awards were granted.

On July 2, 2013, the Company completed an IPO of its common shares. Under the terms of the MPK Plan, vesting
accelerated for all unvested units upon completion of the IPO. The Company recorded a pre-tax charge of $36.7 million
for compensation expense related to the acceleration of the expense recognition for MPK Plan units in the year ended
December 31, 2013. In connection with the completion of the IPO, the Company distributed common stock to each
participant and withheld the number of shares of common stock equal to the required tax withholding for each participant.
The Company paid required withholding taxes of $24.0 million to federal, state and foreign taxing authorities. This
amount is reported as a financing activity in the Consolidated Statement of Cash flows and as an increase to Accumulated
deficit in the Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2013. In addition, the
Company paid $4.0 million of employer payroll taxes that are included as an operating activity in the Consolidated
Statement of Cash Flows for the year ended December 31, 2013.

A summary of pre-IPO equity plan activity for the year ended December 31, 2013 is as follows:

Outstanding at January 1, 2013

Granted

Forfeited
Converted/Settled (1)
Outstanding at December 31, 2013

Vested at December 31, 2013

Class B
Common Units

MPK Plan
Units

216,483

400
(860)
(216,023)
—

—

66,137

—
(2,228)
(63,909)
—

—

(1)

As discussed above, the Class B Common Units and MPK Plan Units were converted/settled into shares of the
Company’s common stock upon completion of the IPO. The converted Class B Common Units, to the extent
unvested at the time of the IPO, relate to the grants of restricted stock disclosed above.

In connection with the establishment of the MPK Plan, the Company agreed to make charitable contributions in amounts
equal to the net income tax benefits derived from payouts to participants under the MPK Plan (net of any related employer
payroll tax costs). The contributions of these amounts were due by March 15 of the calendar year following the year in

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

which the Company realized the benefits of the deductions. This arrangement has been accounted for as contingent
consideration. Pre-2009 business combinations were accounted for under a former accounting standard which, among
other aspects, precluded the recognition of certain contingent consideration as of the business combination date. Instead,
under the former accounting standard, contingent consideration is accounted for as additional purchase price (goodwill)
at the time the contingency is resolved. As of December 31, 2013, the Company accrued $20.9 million related to this
arrangement within other current liabilities, as the Company realized the tax benefit of the compensation deductions
during the 2013 tax year. The Company made the related cash contribution during the first quarter of 2014.

12.

Earnings Per Share

The numerator for both basic and diluted earnings per share is Net income. The denominator for basic earnings per share
is the weighted-average shares outstanding during the period.

A reconciliation of basic weighted-average shares outstanding to diluted weighted-average shares outstanding is as
follows:

(in millions)

Basic weighted-average shares outstanding
Effect of dilutive securities (2)
Diluted weighted-average shares outstanding (3)

Years Ended December 31,

2015

2014

2013 (1)

170.3

1.5
171.8

170.6

2.2
172.8

156.6

2.1
158.7

(1)

(2)

(3)

The 2013 basic weighted-average shares outstanding was impacted by common stock issued during the IPO and
the underwriters’ exercise in full of the overallotment option granted to them in connection with the IPO. As the
common stock was issued on July 2, 2013 and July 31, 2013, respectively, the shares are only partially reflected
in the 2013 basic weighted-average shares outstanding. Such shares are fully reflected in the 2015 and 2014
basic weighted-average shares outstanding. For additional discussion of the IPO, see Note 10 (Stockholders’
Equity).

The dilutive effect of outstanding stock options, restricted stock units, restricted stock, Coworker Stock Purchase
Plan units and MPK Plan units is reflected in the diluted weighted-average shares outstanding using the treasury
stock method.

There were 0.4 million potential common shares excluded from the diluted weighted-average shares outstanding
for the year ended December 31, 2015, and there was an insignificant amount of potential common shares
excluded from the diluted weighted-average shares outstanding for the years ended December 31, 2014 and
2013, as their inclusion would have had an anti-dilutive effect.

13.

Coworker Retirement and Other Compensation Benefits

Profit Sharing Plan and Other Savings Plans

The Company has a profit sharing plan that includes a salary reduction feature established under the Internal Revenue
Code Section 401(k) covering substantially all coworkers in the United States. In addition, coworkers outside the U.S.
participate in other savings plans. Company contributions to the profit sharing and other savings plans are made in cash
and determined at the discretion of the Board of Directors. For the years ended December 31, 2015, 2014 and 2013, the
amounts expensed for these plans were $19.8 million, $21.9 million and $17.3 million, respectively.

Coworker Stock Purchase Plan

On January 1, 2014, the first offering period under the Company’s Coworker Stock Purchase Plan (the “CSPP”)
commenced. The CSPP provides the opportunity for eligible coworkers to acquire shares of the Company’s common
stock at a 5% discount from the closing market price on the final day of the offering period. There is no compensation
expense associated with the CSPP.

Restricted Debt Unit Plan

On March 10, 2010, the Company established the Restricted Debt Unit Plan (the “RDU Plan”), an unfunded nonqualified
deferred compensation plan.

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Compensation expense related to the RDU Plan was $4.6 million, $8.8 million and $16.8 million for the years ended
December 31, 2015, 2014 and 2013, respectively. At December 31, 2015 and 2014, the Company had $35.0 million and
$30.4 million of liabilities related to the RDU Plan recorded on the Consolidated Balance Sheets, respectively.

Unrecognized compensation expense as of December 31, 2015 of approximately $1.7 million is expected to be recognized
in 2016 and approximately $1.3 million in 2017. Payments under the RDU Plan may be impacted if certain significant
events occur or circumstances change that would impact the financial condition or structure of the Company. Payment
of the principal component of the RDU Plan is expected to be made on October 12, 2017.

14.

Commitments and Contingencies

The Company is party to various legal proceedings that arise in the ordinary course of its business, which include
commercial, intellectual property, employment, tort and other litigation matters. The Company is also subject to audit by
federal, state, international, national, provincial and local authorities, and by various partners, group purchasing
organizations and customers, including government agencies, relating to purchases and sales under various contracts. In
addition, the Company is subject to indemnification claims under various contracts. From time to time, certain customers
of the Company file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws or similar laws
of the jurisdictions for the Company’s business activities outside of the United States. In such cases, certain pre-petition
payments received by the Company could be considered preference items and subject to return to the bankruptcy
administrator.

On October 29, 2015, the Company received a request for production of documents in connection with an investigation
by the SEC of the Company’s vendor partner program incentives. The Company has produced documents to the SEC
and is continuing to cooperate with the SEC in this matter.

As of December 31, 2015, the Company does not believe that there is a reasonable possibility that any material loss
exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the
ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s financial
condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of
one or more of these proceedings or matters.

15.

Related Party Transactions

During 2015 and 2014, the Company held a 35% non-controlling interest in Kelway until August 1, 2015 when the
Company purchased the remaining 65% of its outstanding common stock. The Company recorded $9.9 million in net
sales to Kelway during the normal course of business in 2015 prior to the acquisition of Kelway. Net sales to Kelway
during the period in 2014 in which the Company held Kelway as an equity investment were not significant.

On November 30, 2015, the Company completed a public offering of 9.2 million shares of its common stock by certain
selling stockholders, which included 1.2 million shares sold by the selling stockholders to the underwriters pursuant to
the grant of an option that was exercised in full. The Company did not receive any proceeds from the sale of these shares.
Upon completion of this offering, the Company purchased from the underwriters 1.0 million of the shares of its common
stock that were subject to the offering at a price per share equal to the price paid by the underwriters to the selling
stockholders in the offering.

On August 18, 2015, the Company completed a public offering of approximately 12.9 million shares of its common stock
by certain selling stockholders, which included 1.7 million shares sold by the selling stockholders to the underwriters
pursuant to the grant of an option that was exercised in full. The Company did not receive any proceeds from the sale of
these shares. Upon completion of this offering, the Company purchased from the underwriters 2.3 million of the shares
of its common stock that were subject to the offering at a price per share equal to the price paid by the underwriters to
the selling stockholders in the offering.

On May 22, 2015, the Company completed a public offering of 11.5 million shares of its common stock by certain selling
stockholders, which included 1.5 million shares sold by the selling stockholders to the underwriters pursuant to the grant
of an option that was exercised in full. The Company did not receive any proceeds from the sale of these shares. On
May 17, 2015, the Company entered into a share repurchase agreement with certain selling stockholders affiliated with
Madison Dearborn and Providence Equity pursuant to which it repurchased 2.0 million shares of its common stock from
such selling stockholders. This share repurchase was effected in a private, non-underwritten transaction for $36.60 per
share, which was equal to the per share price paid by the underwriters to the selling stockholders in connection with the
public offering completed on May 22, 2015.

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On March 20, 2014, the Company repurchased and subsequently canceled $25.0 million aggregate principal amount of
the 2019 Senior Notes from an affiliate of Providence Equity. For additional information, see Note 8 (Long-Term Debt).

On July 2, 2013, the Company completed an IPO of its common stock. Using a portion of the net proceeds from the IPO,
the Company paid a $24.4 million termination fee to affiliates of the Madison Dearborn and Providence Equity in
connection with the termination of the management services agreement with such entities that was effective upon
completion of the IPO. The Company paid an annual management fee of $2.5 million in the year ended December 31,
2013. There were no management fees paid for the years ended December 31, 2015 and 2014.

Prior to the completion of the IPO, the Company had previously entered into a management services agreement with
Madison Dearborn and Providence Equity pursuant to which they had agreed to provide it with management and consulting
services and financial and other advisory services. Pursuant to such agreement, Madison Dearborn and Providence Equity
received an annual management fee of $5.0 million and reimbursement of out-of-pocket expenses incurred in connection
with the provision of such services. Such amounts were classified as Selling and administrative expenses within the
Consolidated Statements of Operations. The management services agreement included customary indemnification and
provisions in favor of Madison Dearborn and Providence Equity.

16.

Segment Information

The Company’s segment information is presented in accordance with a “management approach,” which designates the
internal reporting used by the chief operating decision-maker for deciding how to allocate resources and for assessing
performance.

The Company has two reportable segments: Corporate, which is comprised primarily of private sector business customers,
and Public, which is comprised of government agencies and education and healthcare institutions. The Company also
has three other operating segments: CDW Advanced Services; Canada; and Kelway, each of which do not meet the
reportable segment quantitative thresholds and, accordingly, are included in an all other category (“Other”). For additional
information relating to Kelway, see Note 3 (Acquisition).

The Company has centralized logistics and headquarters functions that provide services to the segments. The logistics
function includes purchasing, distribution and fulfillment services to support both the Corporate and Public segments.
As a result, costs and intercompany charges associated with the logistics function are fully allocated to both of these
segments based on a percent of Net sales. The centralized headquarters function provides services in areas such as
accounting, information technology, marketing, legal and coworker services. Headquarters’ function costs that are not
allocated to the segments are included under the heading of “Headquarters” in the tables below.

The Company allocates resources to and evaluates performance of its segments based on Net sales, Income from operations
and Adjusted EBITDA, a non-GAAP measure as defined in the Company’s credit agreements. However, the Company
has concluded that Income from operations is the more useful measure in terms of discussion of operating results, as it
is a GAAP measure.

Segment information for Total assets and capital expenditures is not presented, as such information is not used in measuring
segment performance or allocating resources between segments.

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Selected Segment Financial Information

Information regarding the Company’s segments for the years ended December 31, 2015, 2014 and 2013 is as follows:

(in millions)
2015:
Net sales
Income (loss) from operations
Depreciation and amortization expense

2014:
Net sales
Income (loss) from operations
Depreciation and amortization expense

2013:
Net sales
Income (loss) from operations(1)
Depreciation and amortization expense

Corporate

Public

Other

Headquarters

Total

$ 6,816.4
470.1
(96.0)

$ 5,125.5
343.3
(43.7)

$ 1,046.8
43.1
(24.4)

$ 6,475.5
439.8
(96.3)

$ 4,879.4
313.2
(43.8)

$ 5,960.1
363.3
(97.3)

$ 4,164.5
246.5
(44.0)

719.6
32.9
(8.8)

644.0
27.2
(8.6)

— $ 12,988.7
742.0
(227.4)

(114.5)
(63.3)

— $ 12,074.5
673.0
(207.9)

(112.9)
(59.0)

— $ 10,768.6
508.6
(208.2)

(128.4)
(58.3)

(1)

Includes $75.0 million of IPO- and secondary-offering related expenses, as follows: Corporate $26.4 million;
Public $14.4 million; Other $3.6 million; and Headquarters $30.6 million. For additional information relating
to the IPO- and secondary-offering, see Note 10 (Stockholders’ Equity).

Geographic Areas and Revenue Mix

The Company does not have Net sales to customers outside of the U.S. exceeding 10% of the Company’s total Net sales
in 2015, 2014 and 2013. The Company does not have long-lived assets located outside of the U.S. exceeding 10% of the
Company’s total long-lived assets as of December 31, 2015 and 2014, respectively.

The following table presents net sales by major category for the years ended December 31, 2015, 2014 and 2013. Categories
are based upon internal classifications. Amounts for the years ended December 31, 2014 and 2013 have been reclassified
for certain changes in individual product classifications to conform to the presentation for the year ended December 31,
2015.

Year Ended
December 31, 2015

Year Ended
December 31, 2014

Year Ended
December 31, 2013

Dollars in
Millions

Percentage
of Total Net
Sales

Dollars in
Millions

Percentage
of Total Net
Sales

Dollars in
Millions

2,539.4
1,914.9

1,065.2

4,756.4

2,163.6

478.0

71.2

19.6% $
14.7

8.2

36.6

16.7

3.7

0.5

2,354.0
1,613.3

1,024.2

4,551.1

2,064.1

371.9

95.9

19.5% $
13.4

8.5

37.6

17.1

3.1

0.8

1,696.5
1,482.7

999.3

4,184.1

1,982.4

332.7

90.9

Percentage
of Total Net
Sales

15.8%
13.8

9.3

38.8

18.4

3.1

0.8

12,988.7

100.0% $

12,074.5

100.0% $

10,768.6

100.0%

Notebooks/Mobile Devices
Netcomm Products

Enterprise and Data Storage
(Including Drives)
Other Hardware

Software

Services
Other (1)
Total Net sales

(1)

Includes items such as delivery charges to customers and certain commission revenue.

17.

Supplemental Guarantor Information

The 2022 Senior Notes, the 2023 Senior Notes and the 2024 Senior Notes are, and, prior to being redeemed in full, the
2019 Senior Notes, the 12.535% Senior Subordinated Exchange Notes due 2017, and the 8.0% Senior Secured Notes
due 2018 were guaranteed by Parent and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(the “Guarantor Subsidiaries”). All guarantees by Parent and Guarantor Subsidiaries are and were joint and several, and
full and unconditional; provided that guarantees by the Guarantor Subsidiaries (i) are subject to certain customary release
provisions contained in the indentures governing the 2022 Senior Notes, the 2023 Senior Notes and the 2024 Senior
Notes and (ii) were subject to certain customary release provisions contained in the indentures governing the 2019 Senior
Notes, the 12.535% Senior Subordinated Exchange Notes due 2017 and the 8.0% Senior Secured Notes due 2018 until
such indentures were satisfied and discharged in 2014 and the first quarter of 2015. CDW LLC's 100% owned foreign
subsidiaries, CDW International Holdings Limited, which is comprised of Kelway and Canada, (together the “Non-
Guarantor Subsidiaries”) do not guarantee the debt obligations. CDW LLC and CDW Finance Corporation, as co-issuers,
are 100% owned by Parent, and each of the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries are, directly or
indirectly, 100% owned by CDW LLC.

The following tables set forth condensed Consolidating Balance Sheets as of December 31, 2015 and 2014, Consolidating
Statements of Operations for the years ended December 31, 2015, 2014 and 2013, condensed Consolidating Statements
of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, and condensed Consolidating
Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, in accordance with Rule 3-10 of
Regulation S-X. The consolidating financial information includes the accounts of CDW Corporation (the “Parent
Guarantor”), which has no independent assets or operations, the accounts of CDW LLC (the “Subsidiary Issuer”), the
combined accounts of the Guarantor Subsidiaries, the combined accounts of the Non-Guarantor Subsidiaries, and the
accounts of CDW Finance Corporation (the “Co-Issuer”) for the periods indicated. The information was prepared on the
same basis as the Company’s Consolidated Financial Statements.

Table of Contents

(in millions)
Assets

Current assets:

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidating Balance Sheet

December 31, 2015

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Co-Issuer

Consolidating
Adjustments

Consolidated

Cash and cash equivalents

$ — $

45.1

— $

31.9

$ — $

—

3.8

—

83.7

13.0

141.8

110.0

—

751.8

306.0

17.3

1,788.6

340.3

90.1

50.4

2,269.4

54.1

—

1,439.0

704.9

263.0

1,092.1

3,302.0

—

228.8

52.8

24.6

84.0

422.1

11.3

—

309.6

265.5

3.0

—

$1,095.9

$ 4,628.9

$ 4,730.4

1,011.5

$ — $

Accounts receivable, net

Merchandise inventory

Miscellaneous receivables

Prepaid expenses and other

Total current assets

Property and equipment, net

Equity investments

Goodwill

Other intangible assets, net

Other assets

Investment in and advances to
subsidiaries
Total assets

Liabilities and Stockholders’
Equity

Current liabilities:

(39.4) $
—

37.6

2,017.4

—

—
(3.1)
(42.5)
—

—

—
(274.8)

393.1

198.4

144.3

2,790.8

175.4

—

2,500.4

1,276.4

12.3

(4,394.1)
—
(4,711.4) $ 6,755.3

Accounts payable-trade

$ — $

31.0

727.4

147.5

$ — $

(39.4) $

866.5

Accounts payable-
inventory financing

Current maturities of long-
term debt

Deferred revenue

Accrued expenses

Total current liabilities

—

428.4

15.4

—

156.0

202.4

—

77.4

190.9

11.4

11.8

74.5

58.6

1,424.1

303.8

Long-term liabilities:

Debt

Deferred income taxes

Other liabilities

Total long-term
liabilities

Total stockholders’ equity
Total liabilities and
stockholders’ equity

— 3,156.5

—

117.3

60.7

—

272.8

2.9

— 3,334.5

275.7

1,095.9

1,092.0

3,030.6

76.0

83.4

276.8

436.2

271.5

—

(0.2)

439.6

—

—
(3.4)
(43.0)

—
(3.9)
(270.4)

27.2

151.9

402.1

1,887.3

3,232.5

469.6

70.0

(274.3)

3,772.1

(4,394.1)

1,095.9

$1,095.9

$ 4,628.9

$ 4,730.4

1,011.5

$ — $

(4,711.4) $ 6,755.3

Table of Contents

(in millions)
Assets
Current assets:

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidating Balance Sheet

December 31, 2014

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiary

Co-Issuer

Consolidating
Adjustments

Consolidated

Cash and cash equivalents

$ — $

346.4

— $

—

—
4.3

—

56.1

11.0

413.5

80.5

86.7

751.8

320.0
12.2

1,479.1

333.9

93.3

46.0

1,952.3

55.5

—

1,439.0

843.6
0.4

932.2

2,784.5

—

Accounts receivable, net

Merchandise inventory

Miscellaneous receivables

Prepaid expenses and other

Total current assets

Property and equipment, net

Equity investments

Goodwill

Other intangible assets, net

Other assets

Investment in and advances to
subsidiaries
Total assets

Liabilities and Stockholders’
Equity
Current liabilities:

24.6

82.0

3.6

6.2

1.5

117.9

1.2

—

26.8

5.2
1.4

—

$ — $

—

—
—

—

(26.5) $
—

344.5

1,561.1

—

—
(3.8)
(30.3)
—

—

—
(6.1)

337.5

155.6

54.7

2,453.4

137.2

86.7

2,217.6

1,168.8
12.2

(3,716.7)
—
(3,753.1) $ 6,075.9

$ 936.5

$ 4,449.2

$ 4,290.8

152.5

$ — $

Accounts payable-trade

$ — $

23.9

671.9

34.7

$ — $

(26.5) $

704.0

Accounts payable-
inventory financing

Current maturities of long-
term debt

Deferred revenue

Accrued expenses

Total current liabilities

—

332.1

15.4

—

137.8

177.1

— 3,150.6

—

146.7

42.6

—

79.9

193.6

1,277.5

—

331.3

3.7

Long-term liabilities:

Debt

Deferred income taxes

Other liabilities

Total long-term
liabilities

Total stockholders’ equity

Total liabilities and
stockholders’ equity

— 3,339.9

335.0

936.5

932.2

2,678.3

106.2

—

1.4

7.9

44.0

—

1.3

1.0

2.3

—

—
(4.1)
(30.6)

—
(4.3)
(1.5)

332.1

15.4

81.3

335.2

1,468.0

3,150.6

475.0

45.8

(5.8)

3,671.4

(3,716.7)

936.5

$ 936.5

$ 4,449.2

$ 4,290.8

152.5

$ — $

(3,753.1) $ 6,075.9

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidating Statement of Operations

Year Ended December 31, 2015

(in millions)

Net sales

Cost of sales

Gross profit
Selling and administrative
expenses
Advertising expense

Income (loss) from operations

Interest (expense) income, net

Net loss on extinguishments of
long-term debt

Management fee

Gain on remeasurement of equity
investment

Other income (expense), net

Income (loss) before income taxes

Income tax benefit (expense)

Income (loss) before equity in
earnings of subsidiaries

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Co-Issuer

Consolidating
Adjustments

Consolidated

$ — $

— $ 12,151.2

837.5

$ — $

—

— 10,158.6

—

1,992.6

114.5

1,020.9

—

(114.5)

(158.3)

(24.3)

4.2

—

(11.1)

(304.0)

103.3

(200.7)

603.8

143.2

828.5

2.3

—

1.6

832.4
(307.2)

525.2

—

714.3

123.2

90.6

4.6

28.0
(3.5)

—
(4.2)

98.1

0.2

118.6
(40.0)

78.6

—

— $ 12,988.7

— 10,872.9

—

—
(1,006.9)

2,115.8

1,226.0

147.8

742.0
(159.5)

(24.3)
—

98.1
(9.3)
647.0
(243.9)

403.1

—

Equity in earnings of subsidiaries

403.1

Net income

$ 403.1

403.1

525.2

78.6

$ — $ (1,006.9) $

403.1

Table of Contents

(in millions)
Net sales

Cost of sales

Gross profit

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidating Statement of Operations

Year Ended December 31, 2014

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiary

Co-Issuer

Consolidating
Adjustments

Consolidated

$ — $

— $ 11,542.3

532.2

$ — $

— $ 12,074.5

— 10,153.2

—

1,921.3

1,110.3

138.0

673.0
(197.3)

(90.7)
—

2.7

387.7
(142.8)

—
(744.9)
(744.9) $

244.9

—

244.9

Selling and administrative expenses

Advertising expense

(Loss) income from operations

Interest (expense) income, net

Net loss on extinguishments of
long-term debt

Management fee

Other (expense) income, net

(Loss) income before income taxes

Income tax benefit (expense)

(Loss) income before equity in
earnings of subsidiaries

—

112.8

—

(112.8)

(197.7)

(90.7)

3.9

1.2

(396.1)

141.0

(255.1)

500.0

9,684.9

1,857.4

962.3

134.0

761.1

0.1

—

1.5

762.7
(278.1)

484.6

—

468.3

63.9

35.2

4.0

24.7

0.3

—
(3.9)
—

21.1
(5.7)

15.4

—

Equity in earnings of subsidiaries

244.9

Net income

$ 244.9

244.9

484.6

15.4

$ — $

Table of Contents

(in millions)
Net sales

Cost of sales

Gross profit

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidating Statement of Operations

Year Ended December 31, 2013

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiary

Co-Issuer

Consolidating
Adjustments

Consolidated

— $

— $ 10,293.3

475.3

$ — $

— $ 10,768.6

Selling and administrative expenses

Advertising expense

(Loss) income from operations

Interest (expense) income, net

Net loss on extinguishments of
long-term debt

Management fee

Other income (expense), net

Income tax benefit (expense)

(Loss) income before equity in
earnings of subsidiaries

—

24.4

—

(24.4)

—

103.9

—

(103.9)

(250.6)

(64.0)

4.3

(0.5)

9.2

142.2

8,592.1

1,701.2

957.3

126.8

617.1

0.2

—

1.2

618.5
(209.5)

(15.2)

(272.5)

409.0

(Loss) income before income taxes

(24.4)

(414.7)

416.2

59.1

35.3

4.0

19.8

0.3

—
(4.3)
0.3

16.1
(4.6)

11.5

—

(568.5)

9,008.3

1,760.3

1,120.9

130.8

508.6
(250.1)

(64.0)
—

1.0

195.5
(62.7)

132.8

—

Equity in earnings of subsidiaries

148.0

420.5

—

Net income

$ 132.8

148.0

409.0

11.5

$ — $

(568.5) $

132.8

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidating Statement of Comprehensive Income

Year Ended December 31, 2015

(in millions)
Comprehensive income

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Co-Issuer

Consolidating
Adjustments

Consolidated

$ 358.6

358.6

525.2

34.1

$ — $

(917.9) $

358.6

Condensed Consolidating Statement of Comprehensive Income

Year Ended December 31, 2014

(in millions)
Comprehensive income

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiary

Co-Issuer

Consolidating
Adjustments

Consolidated

$ 234.6

234.6

484.6

5.1

$ — $

(724.3) $

234.6

Condensed Consolidating Statement of Comprehensive Income

Year Ended December 31, 2013

(in millions)
Comprehensive income

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiary

Co-Issuer

Consolidating
Adjustments

Consolidated

$ 126.1

141.3

409.0

4.8

$ — $

(555.1) $

126.1

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2015

(in millions)
Net cash (used in) provided by
operating activities

Cash flows from investing
activities:

Capital expenditures

Acquisition of business, net of
cash acquired

Premium payments on interest
rate cap agreements

Net cash used in investing activities

Cash flows from financing
activities:

Proceeds from borrowings
under revolving credit facility

Repayments of borrowings
under revolving credit facility

Repayments of long-term debt

Proceeds from issuance of
long-term debt

Payments to extinguish long-
term debt

Payment of debt financing
costs

Net change in accounts
payable-inventory financing

Proceeds from stock option
exercises
Proceeds from Coworker stock
purchase plan
Repurchases of common stock

Dividends paid

Excess tax benefits from
equity-based compensation
Advances to/from affiliates

Net cash provided by (used in)
financing activities

Effect of exchange rate changes on
cash and cash equivalents

Net increase (decrease) in cash and
cash equivalents

Cash and cash equivalents –
beginning of period

Cash and cash equivalents – end of
period

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Co-Issuer

Consolidating
Adjustments

Consolidated

0.5

(18.1) $

350.0

27.9

$ — $

(82.8) $

277.5

—

(241.3)

(52.9)

—

(75.4)

(11.6)

(3.1)

—

(263.8)

(0.5)

(75.9)

—
(11.6)

—
(266.9)

314.5

(314.5)

(15.4)

525.0

(525.3)

(6.8)

—

2.4

8.7

—

0.6

—

(17.4)

—

96.1

(0.2)

—

—
(434.5)

—

267.4

293.7

(196.5)

(0.5)

(207.3)

(338.4)

249.8

—

(301.3)

346.4

—

(3.5)

7.3

24.6

—

69.9

—

(90.1)

(263.8)

(0.5)
(354.4)

314.5

(314.5)

(32.8)

525.0

(525.3)

(6.8)

95.9

2.4

8.7
(241.3)
(52.9)

0.6

—

(226.5)

(3.5)

(12.9)

(306.9)

(26.5)

344.5

$ — $

45.1

— $

31.9

$ — $

(39.4) $

37.6

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2014

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiary

Co-Issuer

Consolidating
Adjustments

Consolidated

$ — $ (120.4) $

547.7

11.8

$ — $

(4.1) $

435.0

Repayments of long-term debt

—

(15.4)

— 1,175.0

— (1,299.0)

(in millions)
Net cash (used in) provided by
operating activities

Cash flows from investing
activities:

Capital expenditures

Payment for equity
investments

Payment of accrued charitable
contribution related to the
MPK Coworker Incentive Plan
II

Premium Payments on interest
rate cap agreements

Net cash used in investing activities

Cash flows from financing
activities:

Proceeds from issuance of
long-term debt

Payments to extinguish long-
term debt

Payment of debt financing
costs

Net change in accounts
payable-inventory financing

Proceeds from stock option
exercises

Proceeds from Coworker stock
purchase plan

Dividends paid

Excess tax benefits from
equity-based compensation
Advances to/from affiliates

Net cash provided by (used in)
financing activities

Effect of exchange rate changes on
cash and cash equivalents

Net increase (decrease) in cash and
cash equivalents

Cash and cash equivalents –
beginning of period

Cash and cash equivalents – end of
period

—

(33.6)

—

33.6

—

(47.9)

(7.1)

(86.8)

—

(20.9)

(2.1)

(157.7)

(21.9)

—

1.3

5.8

—

0.3

581.9

—

—
(7.1)

—

75.5

—

—
(616.1)

428.0

(540.6)

—

149.9

196.5

—

0.6

(1.8)

10.6

14.0

—

(55.0)

(86.8)

(20.9)

(2.1)
(164.8)

(15.4)

1,175.0

(1,299.0)

(21.9)

75.5

1.3

5.8
(33.6)

0.3

—

(112.0)

(1.8)

(4.1)

156.4

(22.4)

188.1

$ — $

346.4

— $

24.6

$ — $

(26.5) $

344.5

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2013

(in millions)
Net cash (used in) provided by
operating activities

Cash flows from investing
activities:

Capital expenditures

Net cash used in investing activities

Cash flows from financing
activities:

Proceeds from borrowings
under revolving credit facility

Repayments of borrowings
under revolving credit facility

Repayments of long-term debt

Proceeds from issuance of
long-term debt

Payments to extinguish long-
term debt

Payment of debt financing
costs

Net change in accounts
payable-inventory financing

Payment of incentive
compensation plan
withholding taxes

Proceeds from issuance of
common stock

Dividends paid

Advances to/from affiliates

Other financing activities

Net cash provided by (used in)
financing activities

Effect of exchange rate changes on
cash and cash equivalents

Net increase (decrease) in cash and
cash equivalents

Cash and cash equivalents –
beginning of period

Cash and cash equivalents – end of
period

Parent
Guarantor

Subsidiary
Issuer

Guarantor
Subsidiaries

Non-Guarantor
Subsidiary

Co-Issuer

Consolidating
Adjustments

Consolidated

$ (15.2) $ (130.3) $

508.8

5.5

$ — $

(2.5) $

366.3

(40.8)

(6.2)
(6.2)

(0.1)
(0.1)

—

7.4

—

63.0

(63.0)

(51.1)

(6.1)

—

— 1,535.2

— (2,047.4)

(4.0)

(19.6)

(0.5)

424.7

(7.3)

(402.2)

—

892.6

0.4

—

—
(490.4)
—

15.2

319.6

(502.6)

—

148.5

48.0

—

(0.5)

(0.7)

4.2

9.8

—

(47.1)
(47.1)

63.0

(63.0)
(51.1)

1,535.2

(2,047.4)

(6.1)

7.4

(24.1)

424.7
(7.3)
—

0.4

(168.3)

(0.7)

(2.5)

150.2

(19.9)

37.9

$ — $

196.5

— $

14.0

$ — $

(22.4) $

188.1

100

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.

Selected Quarterly Financial Results (unaudited)

(in millions, except per-share amounts)
Net Sales Detail:

Corporate:

Medium/Large

Small Business

Total Corporate

Public:

Government

Education

Healthcare

Total Public

Other

Net sales

Gross profit

Income from operations

Net income
Net income per common share(1):
Basic
Diluted

Year Ended December 31, 2015

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

1,313.9

1,492.1

1,458.9

1,493.4

260.1

1,574.0

288.6

343.6

373.6

1,005.8

175.4

2,755.2

456.5

151.6

54.7

0.32
0.32

269.3

1,761.4

385.0

546.1

443.1

1,374.2

178.4

3,314.0

534.5

205.9

108.2

0.63
0.63

265.6

1,724.5

488.6

579.0

400.5

1,468.1

308.5

3,501.1

567.2

204.6

150.9

0.89
0.88

263.2

1,756.6

513.7

338.3

425.3

1,277.3

384.5

3,418.4

557.6

179.9

89.3

0.53
0.52

Cash dividends declared per common share

0.0675

0.1075

(in millions, except per-share amounts)
Net Sales Detail:

Corporate:

Medium/Large

Small Business

Total Corporate

Public:

Government

Education

Healthcare

Total Public

Other

Net sales

Gross profit

Income from operations

Net income
Net income per common share (1):
Basic

Diluted

Year Ended December 31, 2014

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

1,274.8

1,395.4

1,374.8

1,440.3

230.8

1,505.6

254.2

321.6

394.1

969.9

176.8

2,652.3

425.2

135.8

50.9

0.30

260.8

1,656.2

313.1

527.0

431.5

1,271.6

178.2

3,106.0

496.9

188.2

86.6

0.51

0.50

247.9

1,622.7

441.3

632.8

394.7

1,468.8

174.6

3,266.1

507.3

184.7

55.6

0.33

0.32

250.7

1,691.0

440.8

342.6

385.7

1,169.1

190.0

3,050.1

491.9

164.3

51.8

0.30

Cash dividends declared per common share

0.0425

0.0675

101

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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.

19.

Subsequent Events

On February 9, 2016, the Company announced that its Board of Directors has declared a quarterly cash dividend of
$0.1075 per common share to be paid on March 10, 2015 to all stockholders of record as of the close of business on
February 25, 2016. Future dividends will be subject to Board of Directors approval.

102

Table of Contents

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 2015, 2014 and 2013

(in millions)
Allowance for doubtful accounts:
Year Ended December 31, 2015
Year Ended December 31, 2014
Year Ended December 31, 2013

Reserve for sales returns:
Year Ended December 31, 2015
Year Ended December 31, 2014
Year Ended December 31, 2013

Balance at
Beginning
of Period

Charged to
Costs and
Expenses

Deductions

Balance at
End of
Period

5.7
5.4
5.4

5.1
5.1
4.4

4.2
5.4
2.8

34.4
36.2
35.0

(3.9) $
(5.1)
(2.8)

(34.6) $
(36.2)
(34.3)

6.0
5.7
5.4

4.9
5.1
5.1

103

Table of Contents

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule
13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the
period covered by this report. Based on such evaluation, the Company’s management, including the Company’s Chief Executive
Officer and Chief Financial Officer, has concluded that, as of the end of such period, the Company’s disclosure controls and
procedures were effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be
disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and
communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely discussions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined
in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation
and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31,
2015. Management based this assessment on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in “Internal Control — Integrated Framework (2013 framework).”

Based on its assessment, management concluded that, as of December 31, 2015, the Company’s internal control over

financial reporting is effective.

On August 1, 2015, the Company completed the acquisition of Kelway TopCo Limited (“Kelway”) by purchasing the
remaining 65% of its outstanding common stock which increased the registrant's ownership interest from 35% to 100% and
provided the registrant control. Management has excluded this acquisition from its assessment of internal control over financial
reporting for the year ended December 31, 2015. Kelway represented $897.5 million of total assets as of December 31, 2015 and
$350.7 million and $8.6 million of net sales and net income, respectively, for the year then ended.

Ernst & Young LLP, independent registered public accounting firm, has audited the Consolidated Financial Statements

of the Company and the Company’s internal control over financial reporting and has included their reports herein.

Changes in Internal Control over Financial Reporting

Except as noted above, there have been no changes in our internal control over financial reporting during the quarter
ended December 31, 2015 that have materially affected or are reasonably likely to materially affect, our internal control over
financial reporting.

104

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of CDW Corporation

We have audited CDW Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2015,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (2013 framework), (the COSO criteria). CDW Corporation and subsidiaries’ management is responsible
for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting,
management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the
internal controls of Kelway TopCo Limited, which is included in the 2015 consolidated financial statements of CDW Corporation
and subsidiaries and constituted $898 million of total assets as of December 31, 2015 and $351 million and $9 million of net sales
and net income, respectively, for the year then ended. Our audit of internal control over financial reporting of CDW Corporation
and subsidiaries also did not include an evaluation of the internal control over financial reporting of Kelway TopCo Limited.

In our opinion, CDW Corporation and subsidiaries maintained, in all material respects, effective internal control over

financial reporting as of December 31, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of CDW Corporation and subsidiaries as of December 31, 2015 and 2014, and the related
consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in
the period ended December 31, 2015 of CDW Corporation and subsidiaries and our report dated February 24, 2016 expressed an
unqualified opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois

February 24, 2016

105

Table of Contents

Item 9B. Other Information

None.

106

Table of Contents

Item 10. Directors, Managers, Executive Officers and Corporate Governance

PART III

We have adopted The CDW Way Code, our code of business conduct and ethics, that is applicable to all of our coworkers.
Additionally, within The CDW Way Code is a Financial Integrity Code of Ethics that sets forth an even higher standard applicable
to our executives, officers, members of our internal disclosure committee and all managers and above in our finance department.
A copy of this code is available on our corporate website at www.cdw.com. If we make any substantive amendments to this code
or grant any waiver from a provision to our chief executive officer, principal financial officer or principal accounting officer, we
will disclose the nature of such amendment or waiver on our website or in a report on Form 8-K.

See Part I - “Executive Officers” for information about our executive officers, which is incorporated by reference in this
Item 10. Other information required under this Item 10 is incorporated herein by reference to our definitive proxy statement for
our 2016 annual meeting of stockholders on May 19, 2016 (“2016 Proxy Statement”), which we will file with the SEC on or before
120 days after our 2015 fiscal year-end.

Item 11. Executive Compensation

Information required under this Item 11 is incorporated herein by reference to the 2016 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information required under this Item 12 is incorporated herein by reference to the 2016 Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information required under this Item 13 is incorporated herein by reference to the 2016 Proxy Statement.

Item 14. Principal Accountant Fees and Services

Information required under this Item 14 is incorporated herein by reference to the 2016 Proxy Statement.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)

Financial Statements and Schedules

The following documents are filed as part of this report:

(1)

Consolidated Financial Statements:

Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2015 and 2014
Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013
Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2015, 2014 and 2013
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
Notes to Consolidated Financial Statements

(2)

Financial Statement Schedules:

Schedule II – Valuation and Qualifying Accounts

Page

55
56
57

58
59
60
61

Page

103

All other schedules are omitted since the required information is not present or is not present in amounts sufficient
to require submission of the schedule, or because the information required is included in the Consolidated
Financial Statements or notes thereto.

(b)

Exhibits

The information required by this Item is set forth on the exhibit index that follows the signature page of this report.

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Table of Contents

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Date:

February 24, 2016

CDW CORPORATION

By:

/s/ Thomas E. Richards

Thomas E. Richards
Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.

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Signature

Title

Date

/s/ Thomas E. Richards
Thomas E. Richards

Chairman, President and Chief Executive Officer
(principal executive officer) and Director

/s/ Ann E. Ziegler
Ann E. Ziegler

Senior Vice President and Chief Financial Officer
(principal financial officer)

/s/ Neil B. Fairfield
Neil B. Fairfield

Vice President and Controller
(principal accounting officer)

/s/ Steven W. Alesio

Director

Steven W. Alesio

February 24, 2016

/s/ Barry K. Allen

Director

February 24, 2016

Barry K. Allen

/s/ James A. Bell

James A. Bell

Director

February 24, 2016

/s/ Benjamin D. Chereskin Director

Benjamin D. Chereskin

/s/ Lynda M. Clarizio

Director

Lynda M. Clarizio

/s/ Glenn M. Creamer

Director

Glenn M. Creamer

/s/ Michael J. Dominguez
Michael J. Dominguez

Director

/s/ Paul J. Finnegan
Paul J. Finnegan

/s/ David W. Nelms
David W. Nelms

/s/ Robin P. Selati
Robin P. Selati

Director

/s/ Joseph R. Swedish
Joseph R. Swedish

Director

/s/ Donna F. Zarcone
Donna F. Zarcone

Director

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February 24, 2016

Table of Contents

Exhibit
Number

Description

EXHIBIT INDEX

3.1

3.2

3.3

3.4

3.5

3.6

3.7*

3.8*

3.9

3.10

3.11

3.12

3.13

3.14

4.1

4.2

Fifth Amended and Restated Certificate of Incorporation of CDW Corporation, previously filed as Exhibit
3.1 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472)
and incorporated herein by reference.

Amended and Restated By-Laws of CDW Corporation, previously filed as Exhibit 3.2 with CDW
Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and
incorporated herein by reference.

Articles of Organization of CDW LLC, previously filed as Exhibit 3.3 with CDW Corporation’s Form S-4
filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.

Amended and Restated Limited Liability Company Agreement of CDW LLC, previously filed as Exhibit 3.4
with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated
herein by reference.

Certificate of Incorporation of CDW Finance Corporation, previously filed as Exhibit 3.5 with CDW
Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by
reference.

Amended and Restated By-Laws of CDW Finance Corporation, previously filed as Exhibit 3.1 with CDW
Corporation's Form 10-Q filed on May 8, 2015 and incorporated herein by reference.

Articles of Organization of CDW Technologies LLC (formerly CDW Technologies, Inc.).

Operating Agreement of CDW Technologies LLC (formerly CDW Technologies, Inc.).

Articles of Organization of CDW Direct, LLC, previously filed as Exhibit 3.9 with CDW Corporation’s
Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.

Amended and Restated Limited Liability Company Agreement of CDW Direct, LLC, previously filed as
Exhibit 3.10 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and
incorporated herein by reference.

Articles of Organization of CDW Government LLC, previously filed as Exhibit 3.11 with CDW
Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by
reference.

Amended and Restated Limited Liability Company Agreement of CDW Government LLC, previously filed
as Exhibit 3.12 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and
incorporated herein by reference.

Articles of Incorporation of CDW Logistics, Inc., previously filed as Exhibit 3.13 with CDW Corporation’s
Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference.

Amended and Restated By-Laws of CDW Logistics, Inc., previously filed as Exhibit 3.14 with CDW
Corporation’s Form S-3 filed on July 31, 2014 (Reg. No. 333-197744) and incorporated herein by reference.

Specimen Common Stock Certificate, previously filed as Exhibit 4.1 with CDW Corporation’s Amendment
No. 3 to Form S-1 filed on June 25, 2013 (Reg. No. 333-187472) and incorporated herein by reference.

Indenture, dated as of August 5, 2014, by and among CDW LLC, CDW Finance Corporation, the guarantors
party thereto and U.S. Bank National Association, as trustee, previously filed as Exhibit 4.1 with CDW
Corporation’s Form 8-K filed on August 6, 2014 and incorporated herein by reference.

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Exhibit
Number
4.3

4.4

4.5

4.6

4.7

4.8

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

Description
Form of 6% Senior Note (included as Exhibit A to Exhibit 4.2), previously filed as Exhibit 4.2 with CDW
Corporation’s Form 8-K filed on August 6, 2014 and incorporated herein by reference.

Second Supplemental Indenture, dated as of March 3, 2015, by and among CDW LLC, CDW Finance
Corporation, the guarantors party thereto and U.S. Bank National Association, as trustee, previously filed as
Exhibit 4.2 with CDW Corporation’s Form 8-K filed on March 3, 2015 and incorporated herein by reference.

Form of 5% Note (included as Exhibit A to Exhibit 4.4), previously filed as Exhibit 4.2 with CDW
Corporation's Form 8-K filed on March 3, 2015 and incorporated herein by reference.

Base Indenture, dated as of December 1, 2014, by and among CDW LLC, CDW Finance Corporation, CDW
Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as
Exhibit 4.1 with CDW Corporation's Form 8-K filed on December 1, 2014 and incorporated herein by
reference.

First Supplemental Indenture, dated as of December 1, 2014, by and among CDW LLC, CDW Finance
Corporation, CDW Corporation the guarantors party thereto and U.S. Bank National Association as trustee,
previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on December 1, 2014 and
incorporated herein by reference.

Form of 5.5% Senior Note (included as Exhibit B to Exhibit 4.7), previously filed as Exhibit 4.3 with CDW
Corporation's Form 8-K filed on December 1, 2014 and incorporated herein by reference.

Amended and Restated Revolving Loan Credit Agreement, dated as of June 6, 2014, by and among CDW
LLC, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, GE
Commercial Distribution Finance Corporation, as floorplan funding agent, and the joint lead arrangers, joint
bookrunners, co-collateral agents, co-syndication agents and co-documentation agents party thereto,
previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on June 9, 2014 and incorporated
herein by reference.

Term Loan Agreement, dated as of April 29, 2013, by and among CDW LLC, the lenders from time to time
party thereto, Barclays Bank PLC, as administrative agent and collateral agent, and the joint lead arrangers,
joint bookrunners, co-syndication agents and co-documentation agents party thereto, previously filed as
Exhibit 10.1 with CDW Corporation’s Form 8-K filed on May 1, 2013 and incorporated herein by reference.

First Amendment to Term Loan Agreement, dated as of May 30, 2013, by and among CDW LLC, the lenders
from time to time party thereto, and Barclays Bank PLC, as administrative agent and collateral agent,
previously filed as Exhibit 10.3 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14,
2013 (Reg. No. 333-187472) and incorporated herein by reference.

Incremental Amendment, dated as of July 31, 2013, by and among CDW LLC, the lenders party thereto and
Barclays Bank PLC, as administrative agent, previously filed as Exhibit 10.1 with CDW Corporation’s Form
8-K filed on August 1, 2013 and incorporated herein by reference.

Third Amendment to the Term Loan Agreement, dated as of September 12, 2013, by and among CDW LLC,
the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral
agent, previously filed as Exhibit 10.2 with CDW Corporation’s Form 10-Q filed on November 7, 2013 and
incorporated herein by reference.

Second Amended and Restated Guarantee and Collateral Agreement, dated April 29, 2013, by and among
CDW LLC, the guarantors party thereto and Barclays Bank PLC, as collateral agent, previously filed as
Exhibit 10.2 with CDW Corporation’s Form 8-K filed on May 1, 2013 and incorporated herein by reference.

Management Services Agreement, dated as of October 12, 2007, by and between CDW Corporation,
Madison Dearborn Partners V-B, L.P. and Providence Equity Partners L.L.C., previously filed as Exhibit
10.9 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and
incorporated herein by reference.

Termination Agreement, dated as of June 12, 2013, by and among CDW Corporation, Madison Dearborn
Partners V-B, L.P. and Providence Equity Partners L.L.C., previously filed as Exhibit 10.6 with CDW
Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and
incorporated herein by reference.

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Exhibit
Number
10.9

10.10

10.11

10.12

10.13§

10.14§

10.15§

10.16§

10.17§

10.18

10.19

10.20

10.21§

10.22§

Description
Registration Agreement, dated as of October 12, 2007, by and among VH Holdings, Inc., CDW Holdings
LLC, Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison
Dearborn Partners V Executive-A, L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-
A L.P., and the other securityholders party thereto, previously filed as Exhibit 10.10 with CDW
Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by
reference.

Withdrawal from Registration Agreement, dated as of November 12, 2013, by and between CDW
Corporation and Paul S. Shain, previously filed as Exhibit 10.10 with CDW Corporation’s Form 10-K filed
on March 5, 2014 and incorporated herein by reference.

Withdrawal from Registration Agreement, dated as of November 13, 2013, by and among CDW Corporation,
James R. Shanks and BOS Holdings, LLC, previously filed as Exhibit 10.11 with CDW Corporation’s Form
10-K filed on March 5, 2014 and incorporated herein by reference.

Withdrawal from Registration Agreement, dated as of August 27, 2014, by and between CDW Corporation,
John A. Edwardson and Whispering Pines Capital LLC , previously filed as Exhibit 10.1 with CDW
Corporation’s Form 10-Q filed on November 12, 2014 and incorporated herein by reference.

Amended and Restated Compensation Protection Agreement, dated as of March 24, 2014, by and among
CDW Corporation, CDW LLC and Thomas E. Richards, previously filed as Exhibit 10.1 with CDW
Corporation’s Form 8-K filed on March 28, 2014 and incorporated herein by reference.

Form of Compensation Protection Agreement (executive officers other than Thomas E. Richards), previously
filed as Exhibit 10.2 with CDW Corporation’s Form 8-K filed on March 28, 2014 and incorporated herein by
reference.

Form of Noncompetition Agreement under the Compensation Protection Agreement, previously filed as
Exhibit 10.3 with CDW Corporation’s Form 8-K filed on March 28, 2014 and incorporated herein by
reference.

Letter Agreement, dated as of September 13, 2011, by and between CDW Direct, LLC and Christina M.
Corley, previously filed as Exhibit 10.31 with CDW Corporation’s Form 10-K filed on March 9, 2012 and
incorporated herein by reference.

Form of Indemnification Agreement by and between CDW Corporation and its directors and officers,
previously filed as Exhibit 10.32 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14,
2013 (Reg. No. 333-187472) and incorporated herein by reference.

Stockholders Agreement, dated as of June 10, 2013, by and among CDW Corporation, Madison Dearborn
Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Capital Partners
V Executive-A, L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P. and the other
securityholders party thereto, previously filed as Exhibit 10.33 with CDW Corporation’s Amendment No. 2
to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.

Share Repurchase Agreement, dated as of May 17, 2015, by and among the Company, Madison Dearborn
Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Capital Partners
V Executive-A, L.P., MDCP Co-Investors (CDW), L.P., Providence Equity Partners VI L.P., Providence
Equity Partners VI-A L.P. and PEP Co-Investors (CWD) L.P., previously filed as Exhibit 10.1 with CDW
Corporation's Form 8-K filed on May 21, 2015 and incorporated herein by reference.

Letter Agreement, dated as of May 18, 2015, by and among the Company, Madison Dearborn Capital
Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Capital Partners V
Executive-A, L.P., MDCP Co-Investors (CDW), L.P., Providence Equity Partners VI L.P., Providence Equity
Partners VI-A L.P. and PEP Co-Investors (CWD) L.P., previously filed as Exhibit 10.2 with CDW
Corporation's Form 8-K filed on May 21, 2015 and incorporated herein by reference.

CDW Corporation 2013 Senior Management Incentive Plan, previously filed as Exhibit 10.34 with CDW
Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and
incorporated herein by reference.

CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.35 with CDW
Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and
incorporated herein by reference.

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Exhibit
Number
10.23§

10.24§

10.25§

10.26§

10.27§

10.28§

10.29§

10.30§

10.31§

10.32§

10.33§

10.34§

12.1*

21.1*

23.1*

31.1*

31.2*

Description
CDW Corporation Coworker Stock Purchase Plan, previously filed as Exhibit 10.36 with CDW
Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and
incorporated herein by reference.

Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Thomas E.
Richards), previously filed as Exhibit 10.37 with CDW Corporation’s Amendment No. 2 to Form S-1 filed
on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.

Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Neal J.
Campbell and Christina M. Corley), previously filed as Exhibit 10.38 with CDW Corporation’s Amendment
No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference.

Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed
by Thomas E. Richards, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and
Ann E. Ziegler), previously filed as Exhibit 10.12 with CDW Corporation’s Form 10-Q filed on August 12,
2013 and incorporated herein by reference.

Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed
by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka), previously filed as
Exhibit 10.13 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by
reference.

CDW Amended and Restated Restricted Debt Unit Plan, previously filed as Exhibit 10.3 with CDW
Corporation’s Form 10-Q filed on November 7, 2013 and incorporated herein by reference.

Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Thomas E. Richards, Dennis
G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed
as Exhibit 10.23 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and
incorporated herein by reference.

Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Neal J. Campbell, Christina
M. Corley, Christina V. Rother and Matthew A. Troka), previously filed as Exhibit 10.24 with CDW
Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by
reference.

Form of Stock Option Agreement (executive officers) under the CDW Corporation 2013 Long-Term
Incentive Plan, previously filed as Exhibit 10.4 with CDW Corporation’s Form 10-Q filed on May 12, 2014
and incorporated herein by reference.

Form of Performance Share Unit Award Agreement (executive officers) under the CDW Corporation 2013
Long-Term Incentive Plan, previously filed as Exhibit 10.5 with CDW Corporation’s Form 10-Q filed on
May 12, 2014 and incorporated herein by reference.

Form of Performance Share Award Agreement (executive officers) under the CDW Corporation 2013 Long-
Term Incentive Plan, previously filed as Exhibit 10.31 with CDW Corporation's Form 10-K filed on
February 26, 2015 and incorporated herein by reference.

Form of Non-Employee Director Restricted Stock Unit Award Agreement under the CDW Corporation 2013
Long-Term Incentive Plan, previously filed as Exhibit 10.6 with CDW Corporation’s Form 10-Q filed on
May 12, 2014 and incorporated herein by reference.

Computation of ratio of earnings to fixed charges.

List of subsidiaries.

Consent of Ernst & Young LLP.

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities
Exchange Act of 1934.

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities
Exchange Act of 1934.

32.1**

Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350.

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Exhibit
Number
32.2**

Description
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350.

101.INS*

XBRL Instance Document

101.SCH*

XBRL Taxonomy Extension Schema Document

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

________________
*
**
§

Filed herewith
These items are furnished and not filed.
A management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation
S-K.

115