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Research SolutionsCDW CORP FORM 10-K (Annual Report) Filed 03/01/17 for the Period Ending 12/31/16 Address Telephone CIK 200 N MILWAUKEE AVENUE VERNON HILLS, IL 60061 847-465-6000 0001402057 Symbol CDW SIC Code Industry Sector Fiscal Year 5961 - Catalog and Mail-Order Houses IT Services & Consulting Technology 12/31 http://www.edgar-online.com © Copyright 2017, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K (Mark One)ýANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016or¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission File Number 001-35985 CDW CORPORATION(Exact name of registrant as specified in itscharter) Delaware 26-0273989(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) 75 Tri-State InternationalLincolnshire, Illinois 60069(Address of principal executive offices) (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 MarketSecurities 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. ý Yes ¨ NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes ý NoIndicate 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 12 months (or forshorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ NoIndicate 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 pursuantto 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). ý Yes ¨ NoIndicate 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’sknowledge, 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. ýIndicate 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 acceleratedfiler,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):Large accelerated filerx Accelerated filer¨Non-accelerated filer¨ (Do not check if a smaller reporting company)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 ý NoThe aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2016, the last business day of the registrant’s most recentlycompleted second fiscal quarter, was $6,441.6 million , based on the per share closing sale price of $40.08 on that date.As of February 24, 2017 , there were 159,367,089 shares of common stock, $0.01 par value, outstanding. CDW CORPORATION AND SUBSIDIARIESANNUAL REPORT ON FORM 10-KYear Ended December 31, 2016TABLE OF CONTENTSItem PagePART I Item 1.Business4Item 1A.Risk Factors9Item 1B.Unresolved Staff Comments19Item 2.Properties19Item 3.Legal Proceedings19Item 4.Mine Safety Disclosures20 Executive Officers21PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities23Item 6.Selected Financial Data25Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations29Item 7A.Quantitative and Qualitative Disclosures About Market Risk53Item 8.Financial Statements and Supplementary Data54Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure99Item 9A.Controls and Procedures99Item 9B.Other Information101PART III Item 10.Directors, Executive Officers and Corporate Governance102Item 11.Executive Compensation111Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters137Item 13.Certain Relationships and Related Transactions, and Director Independence140Item 14.Principal Accountant Fees and Services140PART IV Item 15.Exhibits and Financial Statement Schedules141Item 16.Form 10-K Summary142SIGNATURES1432 Table of ContentsFORWARD-LOOKING STATEMENTSThis report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical factincluded in this report are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results andestimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. We claim the protection ofThe 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 theexclusive means of identifying such statements. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-lookingstatements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks anduncertainties 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 sectionentitled “Risk Factors” included elsewhere in this report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, areexpressly qualified in their entirety by the cautionary statements contained in the section entitled “Risk Factors” included elsewhere in this report as well as othercautionary statements that are made from time to time in our other Securities and Exchange Commission (“SEC”) filings and public communications. You shouldevaluate 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 ourexpectations. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that theywill 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 thedate 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.3 Table of ContentsPART IItem 1. BusinessOur CompanyCDW Corporation (together with its subsidiaries, the “Company”, “CDW” or “we”) is a Fortune 500 company and a leading provider of integratedinformation technology (“IT”) solutions in the United States (“US”), Canada, and the United Kingdom (“UK”). We help over 250,000 small, medium and largebusiness, government, education and healthcare customers by delivering solutions to meet their increasingly complex IT needs. Our broad array of offerings rangesfrom discrete hardware and software products to integrated IT solutions such as mobility, security, data center, virtualization and digital workspace. We aretechnology “agnostic,” with a solutions portfolio including more than 100,000 products and services from more than 1,000 leading and emerging brands. Oursolutions are delivered in physical, virtual and cloud-based environments through over 5,500 customer-facing coworkers, including field sellers, highly-skilledtechnology specialists and advanced service delivery engineers.We are a leading sales channel partner for many original equipment manufacturers (“OEMs”) and software publishers and cloud providers (collectively,our “vendor partners”), whose products we sell or include in the solutions we offer. We provide our vendor partners with a cost-effective way to reach customersand deliver a consistent brand experience through our established end-market coverage, technical expertise and extensive customer access.We simplify the complexities of technology across design, selection, procurement, integration and management for our customers. Our goal is to have ourcustomers, regardless of their size, view us as a trusted adviser and extension of their IT resources. We do not manufacture products. Our multi-brand offeringapproach enables us to identify the products or combination of products from our vendor partners that best address each customer’s specific IT requirements.We operate in the United States, United Kingdom and Canadian IT markets, which are large and growing markets. Through our acquisition of CDW UK,we can provide IT solutions in more than 80 countries for customers with primary locations in the United States, Canada and the United Kingdom. According tothe International Data Corporation (“IDC”), the total US, UK and Canadian IT market generated approximately $890 billion in sales in 2016. We believe ouraddressable markets in the US, UK and Canada represent more than $290 billion in annual sales. These are highly fragmented markets served by thousands of ITresellers and solutions providers. For the year ended December 31, 2016, we estimate that our total Net sales of $14 billion represented approximately 5% of ouraddressable markets. We believe that demand for IT will continue to outpace general economic growth in the markets we serve fueled by new technologies,including cloud, virtualization and mobility as well as growing end-user demand for security, efficiency and productivity.Value PropositionWe are positioned in the middle of the IT ecosystem where we procure products from OEMs, software publishers, cloud providers and wholesaledistributors and provide added value to our customers by helping them navigate through complex options and implement the best solution for their business. In thisrole, we believe we provide unique value to both our vendor partners and our customers.Our value proposition to our customersOur 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 theUnited 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-userdemandCustomersWe provide integrated IT solutions to over 250,000 small, medium and large business, government, education and healthcare customers throughout NorthAmerica and the United Kingdom.We serve our customers through sales teams focused on customer end-markets that are supported by technical specialists and highly skilled servicedelivery engineers. Our market segmentation allows us to customize our offerings and to provide enhanced expertise in designing and implementing IT solutionsthat meet our customer’s specific needs.In our US business, which represents over 90% of our revenues, we currently have five dedicated customer channels: medium/large business, smallbusiness, government, education and healthcare, each of which generated over $1 billion in Net4 Table of Contentssales in 2016 . Net sales to customers in Canada and the United Kingdom combined generated more than $1 billion in 2016. We believe this diversity of customerend-markets provide us with multiple avenues for growth and has been a key factor in our ability to weather economic and technology cycles and continue to gainmarket share.Information regarding our reportable segments and our customer channels is as follows: Corporate Segment Public Segment Customer ChannelsMedium/LargeBusiness Small Business Government Education Healthcare Other Target Customers100 - 5,000employees 20 - 100employees Various federal, state andlocal agencies Higher educationand K-12 Hospitals, ambulatory serviceproviders and long-term carefacilities Canada and UnitedKingdom2016 Net Sales(in billions)$5.9 $1.1 $1.9 $2.0 $1.7 $1.4For further information regarding our segments, including financial results, see Note 16 (Segment Information) to the accompanying ConsolidatedFinancial Statements under Item 8, “Financial Statements and Supplementary Data.”PartnersWe provide more than 100,000 products and services from more than 1,000 partners, including well-established companies such as Adobe, APC, Apple,Cisco, Dell, EMC, Hewlett Packard Enterprise, HP Inc., IBM, Intel, Lenovo, Microsoft, NetApp, Samsung, Symantec and VMware, as well as from emergingtechnology companies such as Bit9, Calabrio, CloudPhysics, Cradlepoint, Nasuni, Nimble Storage, Nutanix, Proofpoint, Snow, Splunk, Tegile, Tintri and Veeam.This broad portfolio of partners and technologies enables us to offer customers significant choice and meet customer demand for the products and solutions thatbest meet their needs. We believe our value proposition to vendor partners enables us to evolve our offering as new technologies emerge and new companies seekus as a channel partner.In 2016 , we generated over $1 billion of Net sales from each of four of our vendor partners and over $100 million of revenue from each of thirteen othervendor partners. In late 2015, we expanded our partnership with Dell and now provide their entire suite of products and services across all of our customerchannels. We have received the highest level of certification from major vendor partners such as Cisco, Dell, EMC, Hewlett Packard Enterprise and Microsoft,which reflects the extensive product and solution knowledge and capabilities that we bring to our customers’ IT challenges. These certifications also provide uswith access to favorable pricing, tools and resources, including vendor incentive programs, which we use to provide additional value to our customers. Our vendorpartners also regularly recognize us with top awards and select us to develop and grow new customer solutions.Product ProcurementWe 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. Eachvendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protectionpolicies, purchase discounts and vendor incentive programs, such as, purchase or sales rebates and cooperative advertising reimbursements. We also purchasesoftware from major software publishers and cloud providers for resale to our customers or for inclusion in the solutions we offer. Our agreements allow the end-user customer to acquire cloud-based solutions 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 forinclusion 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 US operations, we purchased approximately 50% of the products we sold as discrete products or as components of a solution directly from ourvendor partners and the remaining 50% from wholesale distributors for the year ended December 31, 2016 . Purchases from our three largest wholesaledistributors, Tech Data, SYNNEX and Ingram Micro, are each approximately 10% of total purchases.Inventory ManagementWe 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 NorthLas Vegas, Nevada. We also operate a 120,000 square foot distribution center in Rugby, Warwickshire, UK. We ship over 40 million units annually on anaggregate basis from our distribution centers.5 Table of ContentsWe also have drop-shipment arrangements with many of our OEMs and wholesale distributors, which permit us to offer products to our customerswithout having to take physical delivery at our distribution centers. These arrangements generally represent approximately 45% to 55% of total consolidated Netsales, of which approximately 20% to 30% relate to electronic delivery for software licenses.We believe that the location of our distribution centers allows us efficiently ship products to our customers and provide timely access to our principaldistributors.We believe competitive sources of supply are available in substantially all of the product categories that we offer.CompetitionThe market for technology products and services is highly competitive and subject to economic conditions and rapid technological changes. Competitionis based on many things, including the ability to tailor specific solutions to customer needs, the quality and breadth of product and service offerings, knowledge andexpertise of sales force, customer service, price, product availability, speed of delivery and credit availability. We face competition from resellers, directmanufacturers, large service providers, cloud providers, telecommunication companies, and to a lesser extent e-tailers and retailers. Smaller, local or regional valueadded resellers typically focus on a single solution suite or portfolio of solutions from one or two vendors partners.We believe we are well positioned to compete within this marketplace due to our competitive advantages. We expect the competitive landscape in whichwe compete to continue to evolve as new technologies are developed. While innovation can help our business as it creates new offerings for us to sell, it can alsodisrupt our business model and create new and stronger competitors. For a discussion of the risks associated with competition, see Item 1A, “Risk Factors.”Our Competitive AdvantagesWe believe we have sustainable competitive advantages that differentiate us in the marketplace. We have built a strong sales organization and deepservices and solutions capabilities over time and expect to continue to invest in coworkers to enhance these capabilities, which we believe when combined with ourcompetitive advantages of scale and a performance driven culture, will help drive sustainable, profitable growth for us today and in the future. Our scale enablesus to have a national and international footprint, as well invest in resources to meet specific customer end-market needs. Our sellers are organized around uniquecustomer end-markets that are both vertically and geographically focused. Our scale enables our ability to invest in technical coworkers who work directly withour sellers to help customers implement increasingly complex IT solutions. Our scale also enables us to operate our three distribution centers (two in the US andone in the UK) which combined are more than 1 million square feet in size. With the acquisition of CDW UK in 2015, we have cross-border relationships thatenable us to serve the needs of our US, UK and Canadian-based customers in more than 80 countries. Our strong, execution-oriented culture is underpinned by ourcompensation system.Our OfferingsOur 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 thatapproximately 50% of our Net sales in 2016 in the US came from sales of product categories and services typically associated with solutions. Our hardwareproducts include notebooks/mobile devices (including tablets), network communications, enterprise and data storage, video monitors, printers, desktop computersand servers. Our software products include application suites, security, virtualization, operating systems and network management. Our services include warranties,managed services, consulting design and implementation.Today, IT is critical to both “run the business” and drive greater growth and productivity. To help our customers accomplish this, we have built a robustportfolio of solutions across data center, digital workspace, security, virtualization and services that we provide in physical, virtual, or cloud-based environments.We provide public cloud solutions which reside off customer premises on a public (shared) infrastructure, and private cloud solutions, which reside oncustomer premises. We also offer hybrid cloud solutions that deliver the benefits of both public and private solutions. Our migration, integration and managedservices offerings help our customers simplify cloud adoption, as well as the ongoing management of cloud solutions across the entire IT lifecycle. DedicatedCloud Client Executives work with our customers to architect cloud solutions meeting their organizational, technology and financial objectives. These offerings areunderpinned by our 24 by 7 network operating centers, as well as services that include cloud planning services and managed cloud. All of these investments helpour customers maximize the return on their IT investments.6 Table of ContentsWe offer a broad portfolio of integrated solutions that include the following on and off-premise capabilities:•Data Center: We assess our customers data center needs, design flexible, resilient and efficient solutions and manage the solution throughout itslifecycle. Our broad portfolio of hardware and software, for both on and off-premise solutions, enables us to provide a well-integrated solution, includingconverged and hyperconverged infrastructure, physical and virtualized servers, software defined data center, storage and energy-efficient power andcooling.•Digital Workspace: We build solutions that deliver access to applications that improve our customers’ productivity regardless of time or location. Weconnect our customers’ physical devices, including laptops, desktops and mobile devices, and utilize collaboration solutions to unite communications andapplications 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. Our solutions provide the toolsthat allow our customers’ employees to share knowledge, ideas and information among each other and with clients and partners effectively, securely andquickly.•Security : We assess our customers’ security needs and provide them with threat prevention tools in order to protect their networks, servers andapplications such as, anti-virus, anti-spam, content filtering, intrusion prevention, firewall and virtual private network services, and network accesscontrol. We also design and implement data loss prevention solutions, using data monitoring and encryption across a wide array of devices to ensure thesecurity of customer information, personal employee information and research and development data.•Virtualization : We design and implement server, storage and desktop virtualization solutions. Virtualization enables our customers to efficiently utilizehardware resources by running multiple, independent, virtual operating systems on a single computer and multiple virtual servers simultaneously on asingle server. Virtualization also can separate a desktop environment and associated application software from the hardware device that is used to accessit, and provides employees with remote desktop access. Our specialists assist customers with the steps of implementing virtualization solutions, includingevaluating network environments, deploying shared storage options and licensing platform software.•Services : We advise on, architect and manage integrated business technology for commercial and business organizations. Our solutions include integratedcloud, collaboration, data center, mobility and security business technology, from the physical to the application layer. We provide advisory, architecturaland managed services across basic, discrete and integrated business technology solutions. We leverage best-in-class partner technology platforms toseamlessly architect and manage disparate IT platforms into integrated business technology solutions.Although we believe customers increasingly view technology purchases as solutions rather than discrete product and service categories, our Net sales bymajor category, based upon our internal category classifications was as follow: Years Ended December 31, 2016 2015 (1) 2014 (1) Dollars in Millions Percentage of Total Net Sales Dollars inMillions Percentageof Total Net Sales Dollars inMillions Percentageof Total Net SalesNotebooks/Mobile Devices 2,934.3 21.0% $2,538.5 19.5% $2,352.9 19.5%Netcomm Products 1,950.9 14.0 1,912.3 14.7 1,613.9 13.4Desktops 1,054.8 7.5 968.6 7.5 1,058.2 8.8Enterprise and Data Storage (IncludingDrives) 1,057.6 7.6 1,065.5 8.2 1,023.9 8.5Other Hardware 3,981.4 28.5 3,798.3 29.2 3,492.3 28.8Software (2) 2,406.9 17.2 2,161.3 16.6 2,065.8 17.1Services (2) 579.0 4.1 472.8 3.6 371.1 3.1Other (3) 17.0 0.1 71.4 0.7 96.4 0.8Total Net sales $13,981.9 100.0% $12,988.7 100.0% $12,074.5 100.0%(1)Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2016.(2)Certain software and services revenue is recorded on a net basis for accounting purposes, so the category percentage of net revenues is not representativeof the category percentage of gross profits.7 Table of Contents(3)Includes items such as delivery charges to customers and certain commission revenue.Our Internal CapabilitiesOur CoworkersAs of December 31, 2016, we employed 8,516 coworkers with approximately 7,500 coworkers in North America and 1,000 in the United Kingdom.Approximately two thirds of our coworkers at year-end 2016 were customer facing. Over fifty percent of our Net sales are generated by account managers whohave greater than seven years of experience. Account managers are supported by field sellers, highly skilled technology specialists and advanced service deliveryengineers. We believe this structure to be core to our ability to continue to offer complex IT solutions and services.None of our coworkers are covered by collective bargaining agreements. We consider our coworker relations to be good.MarketingWe market the CDW brand to US, Canadian and British audiences using a variety of channels that include online, broadcast, print, social and other media.We market to current and prospective customers through integrated marketing programs including behaviorally targeted email, print, online media, events andsponsorships, as well as broadcast media. This promotion is also supported by integrated communication efforts targeting decision-makers, influencers and thegeneral public using a combination of news releases, case studies, media interviews and speaking opportunities.As a result of our relationships with our vendor partners, a significant portion of our advertising and marketing expenses is reimbursed throughcooperative advertising programs. These programs are at the discretion of our vendor partners and are typically tied to sales or other commitments to be met by uswithin a specified period of time. We believe that our results and analytical techniques that measure the efficacy of our marketing programs differentiate us fromour competitors.Information Technology SystemsWe 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 accountsreceivable, sales and distribution. Our systems provide us with thorough, detailed and real-time information regarding key aspects of our business. This capabilityhelps us to continuously enhance productivity, ship customer orders quickly and efficiently, respond appropriately to industry changes and provide high levels ofcustomer 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.Intellectual PropertyThe CDW trademark and certain variations thereon are registered or subject to pending trademark applications in the US, Canada, UK and certain otherjurisdictions. We believe our trademarks have significant value and are important factors in our marketing programs. In addition, we own registrations for domainnames, including cdw.com and cdwg.com and variations thereon, for certain of our primary trademarks. We also have unregistered copyrights in our websitecontent.HistoryFounded in 1984, CDW became a public company in 1993. In 2003, we purchased selected United States assets and the Canadian operations of MicroWarehouse, which extended our growth platform into Canada. In 2006, we acquired Berbee Information Networks Corporation, a regional provider of technologyproducts, solutions and customized engineering services in advanced technologies primarily across Cisco, IBM and Microsoft portfolios. This acquisition increasedour capabilities in customized engineering services and managed services.We were a public company from 1993 until October 12, 2007 when we were acquired through a merger transaction by an entity controlled by investmentfunds affiliated with Madison Dearborn Partners, LLC (“Madison Dearborn”) and Providence Equity Partners L.L.C. (“Providence Equity”). CDW Corporationcontinued as the surviving corporation and same legal entity after the acquisition, but became a wholly owned subsidiary of VH Holdings, Inc., a Delawarecorporation.On July 2, 2013, CDW Corporation completed the IPO of its common stock. In connection with the IPO, CDW Holdings distributed all of its shares ofCDW Corporation’s common stock to its members in June 2013 in accordance with the members’ respective membership interests and was subsequently dissolvedin August 2013. See Note 10 (Stockholders’ Equity) to the8 Table of Contentsaccompanying Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data” for additional discussion of the IPO.Before the IPO, Madison Dearborn and Providence Equity owned 46.0% and 40.6% of our common stock, respectively. After the IPO through secondaryofferings and fund distributions, Madison Dearborn and Providence Equity liquidated their ownership positions. As of December 31, 2016 neither firm held aprivate equity position in CDW.On November 10, 2014, we completed the acquisition of a 35% non-controlling equity interest in UK-based IT solutions provider, Kelway TopCoLimited (“Kelway”.) On August 1, 2015, we purchased the remaining 65% of Kelway’s outstanding common stock, which increased our ownership interest from35% to 100% and provided us control. Rebranded CDW UK in April 2016, the acquisition extended our footprint into the United Kingdom. It also enhanced ourability to provide IT solutions to US-based customers with multinational locations. Financial results of CDW UK are included in our Consolidated FinancialStatements from the date of acquisition. For further details regarding the acquisition, see Note 3 (Acquisition) to the accompanying Consolidated FinancialStatements under Item 8, “Financial Statements and Supplementary Data.”Available InformationWe 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 Form8-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 atour website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Our website and the information containedon that site, or connected to that site, are not incorporated into and are not a part of this report.Item 1A. Risk FactorsThere are many factors that could adversely affect our business, results of operations and cash flows, some of which are beyond our control. The following is adescription of some important factors that may cause our business prospects, results of operations and cash flows in future periods to differ materially from thosecurrently expected or desired. Factors not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business,results of operations and cash flows.Risks Related to Our BusinessGlobal and regional economic conditions may have an adverse impact on our business.Weak economic conditions generally, sustained uncertainty about global economic conditions, government spending cuts and the impact of newgovernment policies, or a tightening of credit markets, could cause our customers and potential customers to postpone or reduce spending on technology productsor services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows. For example, therecontinues to be substantial uncertainty regarding the economic impact of the Referendum on the United Kingdom’s Membership of the European Union (“EU”)(referred to as “Brexit”), advising for the exit of the UK from the EU. Potential adverse consequences of Brexit such as global market uncertainty, volatility incurrency exchange rates, greater restrictions on imports and exports between UK and EU countries and increased regulatory complexities could have a negativeimpact on our business, financial condition and results of operations.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 ingovernment spending policies (including ongoing budget cuts at the federal level), budget priorities or revenue levels could cause our public sector customers toreduce their purchases or to terminate or not renew their contracts with us, which could adversely affect our business, results of operations or cash flows. Forexample, in 2013, as a result of sequestration and related budget uncertainty and the partial shutdown of the US federal government for 16 days, we experiencedsignificantly reduced US 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 endedDecember 31, 2016 , we purchased approximately 50% of the products we sold directly from vendor partners and the remaining amount from wholesaledistributors for our North American operations. We are authorized by vendor partners to sell all or some of their products via direct marketing activities. Ourauthorization with each vendor partner is subject to specific terms and conditions regarding such things as sales channel restrictions, product return privileges, priceprotection policies, purchase discounts and vendor partner programs and funding, including purchase rebates, sales volume rebates, purchasing9 Table of Contentsincentives and cooperative advertising reimbursements. However, we do not have any long-term contracts with our vendor partners and many of thesearrangements are terminable upon notice by either party. A reduction in vendor partner programs or funding or our failure to timely react to changes in vendorpartner programs or funding could have an adverse effect on our business, results of operations or cash flows. In addition, a reduction in the amount of creditgranted 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 ofoperations 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 ordiscontinue 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 throughresellers, they will not limit or curtail the availability of their products to solutions providers like us. Any such termination or limitation or the implementation ofsuch changes could have a negative impact on our business, results of operations or cash flows.Although we purchase from a diverse vendor base, in 2016 , products we purchased from wholesale distributors Ingram Micro, SYNNEX and Tech Dataeach represented approximately 10% of total US purchases. In addition, sales of products manufactured by Apple, Cisco, Dell, EMC, Hewlett Packard Enterprise,HP Inc., Lenovo and Microsoft, whether purchased directly from these vendor partners or from a wholesale distributor, represented in the aggregate nearly 60% ofour 2016 consolidated Net sales. Sales of products manufactured by Cisco and HP Inc. represented over 25% of our 2016 consolidated Net sales. The loss of, orchange in business relationship with, any of these or any other key vendor partners, or the diminished availability of their products, including due to backlogs fortheir 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 anadverse 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 theirbusiness 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 donot 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 theirofferings, 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 servicesofferings, such as cloud-based solutions, including Software as a Service (“SaaS”), Infrastructure as a Service (“IaaS”) and Platform as a Service (“PaaS”), and theInternet of Things (“IoT”). We have been and will continue to be dependent on innovations in hardware, software and services offerings, as well as the acceptanceof those innovations by customers. Also, customers may delay spending while they evaluate new technologies. A decrease in the rate of innovation, or the lack ofacceptance of innovations or delays in technology spending 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 theappropriate training to our account managers, sales technology specialists and engineers to enable them to effectively sell and deliver such new offerings tocustomers, 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 withhardware, 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 customerchannels. In addition, our success is dependent on our ability to develop relationships with and sell hardware, software and services from new emerging vendorsand 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 forresale 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, orwe are unable to develop relationships with new technology providers or companies that we have not historically represented, our business, results of operations orcash 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, Connection, Dimension Data, ePlus, Insight Enterprises, PCM, Presidio, SCC, Softchoice, World Wide Technology andmany smaller resellers;•manufacturers who sell directly to customers, such as Dell, HP Inc., Hewlett Packard Enterprise and Apple;10 Table of Contents•large service providers and system integrators, such as IBM, Accenture, Hewlett Packard Enterprise and Dell;•communications service providers, such as AT&T, CenturyLink and Verizon;•cloud providers, such as Amazon Web Services, Microsoft and Box;•e-tailers, such as Amazon, Newegg and TigerDirect.com; and•retailers (including their e-commerce activities), such as Staples and Office Depot.We expect the competitive landscape to continue to evolve as new technologies are developed, such as cloud-based solutions, hyper-convergedinfrastructure and embedded software solutions. While innovation can help our business as it creates new offerings for us to sell, it can also disrupt our businessmodel and create new and stronger competitors. For instance, while cloud-based solutions present an opportunity for us, cloud-based solutions and technologiesthat deliver technology solutions as a service could increase the amount of sales directly to customers rather than through solutions providers like us, or couldreduce the amount of hardware we sell. In addition, some of our hardware and software vendor partners sell, and could intensify their efforts to sell, their productsdirectly to our customers. Moreover, traditional OEMs have increased their services capabilities through mergers and acquisitions with service providers, whichcould potentially increase competition in the market to provide comprehensive technology solutions to customers. If we are unable to effectively respond to theevolving competitive landscape, our business, results of operations or cash flows could be adversely impacted.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 andretain customers, we may be required to reduce prices, increase advertising expenditures or take other actions which could adversely affect our business, results ofoperations 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 areunable 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 businesssystems, such as our sales, customer management, financial and accounting, marketing, purchasing, warehouse management, e-commerce and mobile systems, aswell as our operational platforms, including voice and data networks and power systems. The quality and our utilization of the information generated by ourinformation 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 ourinformation technology systems from a variety of threats, including computer viruses, malware, phishing, social engineering, unauthorized access and othermalicious attacks, both internal and external, and human error, there can be no guarantee that those steps will be effective. Furthermore, although we haveredundant 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 whenrequired. 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 ofcoworkers, customers and others. In addition, we operate data centers for our customers that host their technology infrastructure and may store and transmit bothbusiness-critical data and confidential information. In connection with our services business, some of our coworkers also have access to our customers’ confidentialdata and other information. We have privacy and data security policies in place that are designed to prevent security breaches; however, as newer technologiesevolve,11 Table of Contentswe 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 publicdisclosure, loss or misuse of this information, resulting in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personalinformation, as well as the loss of existing or potential customers and damage to our brand and reputation. In addition, the cost and operational consequences ofimplementing further data protection measures could be significant. Such breaches, costs and consequences could adversely affect our business, results ofoperations or cash flows.The failure to comply with our public sector contracts or applicable laws and regulations could result in, among other things, termination, fines or otherliabilities, 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, throughvarious 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 Statuteor similar laws of the jurisdictions for our business activities outside of the United States) could result in civil, criminal and administrative liability, includingsubstantial monetary fines or damages, termination of government contracts or other public sector customer contracts, and suspension, debarment or ineligibilityfrom doing business with governmental entities or other customers in the public sector. In addition, contracts in the public sector are generally terminable at anytime for convenience of the contracting agency or group purchasing organization (“GPO”) or upon default. Furthermore, our inability to enter into or retaincontracts with GPOs may threaten our ability to sell to customers in those GPOs and compete effectively. The effect of any of these possible actions couldadversely affect our business, results of operations or cash flows. In addition, the adoption of new or modified procurement regulations and other requirements mayincrease 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, ourreputation, 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, wedeliver and manage mission critical software, systems and network solutions for our customers. We also offer certain services, such as implementation andinstallation services and repair services, to our customers through various third-party service providers engaged to perform these services on our behalf. If we orour third-party service providers fail to provide high-quality services to our customers or such services result in a disruption of our customers’ businesses, thiscould, among other things, result in legal claims and proceedings and liability. Moreover, as we expand our services and solutions business, we may be exposed toadditional operational, regulatory and other risks. We also could incur liability for failure to comply with the rules and regulations applicable to the new servicesand 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 ofoperations 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 financialperformance 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 keyexecutive, 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 thecontinued service and support of our other executive officers. Our future success also will depend on our ability to retain and motivate our customer-facingcoworkers, 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 skilledtechnology specialists and engineers, for whom the market is extremely competitive.Our inability to attract, develop, engage and retain key personnel could have an adverse effect on our relationships with our vendor partners and customersand adversely affect our ability to expand our offerings of value-added services and solutions. Moreover, our inability to train our sales, services and technicalpersonnel effectively to meet the rapidly changing technology needs of our customers could cause a decrease in the overall quality and efficiency of suchpersonnel. 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.12 Table of ContentsWhile we purchase our products primarily in the markets we serve (for example, products for US customers are sourced in the US), our vendor partnersmanufacture or purchase a significant portion of the products we sell outside of the US, primarily in Asia. Political, social or economic instability in Asia, or inother regions in which our vendor partners purchase or manufacture the products we sell, could cause disruptions in trade, including exports to the US. Otherevents 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;•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 US or foreign governments, including the likelihood, type or effect of any suchrestrictions. 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 ourbusiness, results of operations or cash flows. In addition, our exports are subject to regulations, some of which may be inconsistent, and noncompliance with theserequirements 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 oneof our distribution centers were to be seriously damaged by a natural disaster or other adverse occurrence, we could utilize another distribution center or third-partydistributors 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 theneeds of our customers and would cause us to incur incremental operating costs. In addition, we operate three customer data centers and numerous sales officeswhich may contain both business-critical data and confidential information of our customers. A natural disaster or other adverse occurrence at any of the customerdata 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 fordelivery charges. If we are unable to pass on to our customers future increases in the cost of commercial delivery services, our profitability could be adverselyaffected. Additionally, strikes, inclement weather, natural disasters or other service interruptions by such shippers could adversely affect our ability to deliverproducts 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 ourcustomers 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 heightenedduring 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 tominimize our inventory exposure through a variety of inventory management procedures and policies, including our rapid-turn inventory model, as well as vendorprice protection and product return programs. However, if we were unable to maintain our rapid-turn inventory model, if there were unforeseen productdevelopments that created more rapid obsolescence or if our vendor partners were to change their terms and conditions, our inventory risks could increase. We alsofrom time to time take advantage of cost savings associated with certain opportunistic bulk inventory purchases offered by our vendor partners or we may decide tocarry high inventory levels of certain products that have limited or no return privileges due to customer demand or request. These bulk purchases could increase ourexposure to inventory obsolescence.13 Table of ContentsWe 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 existingbusiness. These types of transactions involve numerous business risks, including finding suitable transaction partners and negotiating terms that are acceptable tous, the diversion of management’s attention from other business concerns, extending our product or service offerings into areas in which we have limitedexperience, 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.In addition, our financial results could be adversely affected by financial adjustments required by accounting principles generally accepted in the UnitedStates of America (“GAAP”) in connection with these types of transactions where significant goodwill or intangible assets are recorded. To the extent the value ofgoodwill or identifiable intangible assets with indefinite lives becomes impaired, we may be required to incur material charges relating to the impairment of thoseassets.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 stockto be volatile and may result from many factors, including the condition of the technology industry in general, shifts in demand and pricing for hardware, softwareand 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 tonumerous factors, some of which may be outside of our control, including general macroeconomic conditions; pricing pressures; changes in product costs from ourvendor partners; the availability of price protection, purchase discounts and incentive programs from our vendor partners; changes in product, order size andcustomer 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 andcompetitive 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 quicklyenough to compensate for any unexpected sales or gross margin shortfall, and any such inability could have an adverse effect on our business, results of operationsor 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 ConsolidatedFinancial Statements. While our Consolidated Financial Statements are reported in US dollars, the financial statements of our subsidiaries outside the US areprepared using the local currency as the functional currency and translated into US dollars. As a result, fluctuations in the exchange rate of the US dollar relative tothe local currencies of our international subsidiaries, particularly the British pound and the Canadian dollar, could cause fluctuations in our reported results ofoperations. We also have foreign currency exposure to the extent sales and purchases are not denominated in a subsidiary’s functional currency, which could havean 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 otherlitigation.We are subject to intellectual property infringement claims against us in the ordinary course of our business, either because of the products and serviceswe 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 andother communications and demands. In our industry, such intellectual property claims have become more frequent as the complexity of technological products andthe intensity of competition in our industry have increased. Increasingly, many of these assertions are brought by non-practicing entities whose principal businessmodel is to secure patent licensing revenue, but we may also be subject to demands from inventors, competitors or other patent holders who may seek licensingrevenue, lost profits and/or an injunction preventing us from engaging in certain activities, including selling certain products or services.We also are subject to proceedings, investigations and audits by federal, state, international, national, provincial and local authorities, including because ofour significant sales to governmental entities. 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.14 Table of ContentsCurrent and future litigation, infringement claims, governmental proceedings and investigations, audits or indemnification claims that we face, includingthe SEC’s investigation of our vendor partner program incentives, may result in substantial costs and expenses and significantly divert the attention of ourmanagement 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 suchmatter could adversely affect our business, results of operations or cash flows.Failure to comply with complex and evolving US and foreign laws and regulations applicable to our operations could adversely impact our business, results ofoperations or cash flows.Our operations are subject to numerous complex US 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 are evolving and may be inconsistent from jurisdictionto jurisdiction, further increasing the cost of compliance and doing business, and the risk of noncompliance. We have implemented policies and proceduresdesigned to help ensure compliance with applicable laws and regulations, but there can be no guarantee against coworkers, contractors or agents violating suchlaws and regulations or our policies and procedures. As a public company, we also are subject to increasingly complex public disclosure, corporate governance andaccounting 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 $396 million of cancellation of debt income (“CODI”). We made an election under Code Section108(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 $115 million of OID deductions. Starting in 2014, we were required to include the deferred CODI andthe 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 therelevant remaining debt instruments, we will have a future cash tax liability associated with our significant deferred CODI. We have reflected the associated cashtax 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 thegross 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 taxon 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 consistentwith 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 meetthe 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. Webelieve 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 thetax 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 willcontinue to be true in the future.Risks Related to Our IndebtednessWe 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, 2016 , we had $3.2 billion of total long-term debt outstanding, as defined by GAAP,and $580 million of obligations outstanding under our inventory financing agreements, and the ability to borrow an additional $716 million under our seniorsecured asset-based revolving credit loan facility (the “Revolving Loan”) and an additional £ 50 million ( $62 million ) under our CDW UK revolving credit andterm loan facility (“CDW UK 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 reducesthe 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;15 Table of Contents•making it more difficult for us to obtain vendor financing from our vendor partners, including original equipment manufacturers and software publishers;•limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate;•placing us at a competitive disadvantage compared to any of our less-leveraged competitors;•increasing our vulnerability to both general and industry-specific adverse economic conditions; and•limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other generalcorporate 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 limitour 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 businessactivities 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 underour 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 ourborrowings thereunder. We have pledged a significant portion of our assets as collateral under our senior credit facilities. If the lenders under our senior creditfacilities accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our senior credit facilities and our otherindebtedness 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 commerciallyreasonable 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 million. However, our ability to borrow underour 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 itssubsidiary guarantors’ eligible accounts receivable (net of accounts16 Table of Contentsreserves) (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 andits subsidiary guarantors’ eligible inventory (valued at cost and net of inventory reserves) and (ii) the product of 85% multiplied by the net orderly liquidation valuepercentage multiplied by eligible inventory (valued at cost and net of inventory reserves), less reserves (other than accounts reserves and inventory reserves). Theborrowing base in effect as of December 31, 2016 was $1,479 million and, therefore, did not restrict our ability to borrow under our Revolving Loan as of that date.Our ability to borrow under our Revolving Loan is also limited by a minimum liquidity condition, which provides that, if excess cash availability is lessthan the lesser of (i) $125 million and (ii) the greater of (A) 10% of the borrowing base and (B) $100 million, the lenders are not required to lend any additionalamounts 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 to1.0. Moreover, our Revolving Loan provides discretion to the agent bank acting on behalf of the lenders to impose additional availability reserves, which couldmaterially 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 ourobligations 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 toprevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. Our outstanding long-term debt will imposesignificant cash interest payment obligations on us and, accordingly, we will have to generate significant cash flow from operating activities to fund our debtservice 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 CapitalResources” 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, sellassets or operations, seek additional debt or equity capital, restructure or refinance our indebtedness, or revise or delay our strategic plan. We cannot assure youthat 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 ourcapital requirements, or that these actions would be permitted under the terms of our existing or future debt agreements, including our senior credit facilities andindentures. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assetsor 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 thedisposition. 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 beadequate to meet any debt service obligations then due.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 RevolvingLoan and CDW UK 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 therisks 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 donot fully prohibit us or our subsidiaries from doing so. To the extent that we incur additional indebtedness, the risks associated with our substantial indebtednessdescribed above, including our possible inability to service our debt, will increase. As of December 31, 2016 , we had $716 million available for additionalborrowing under our Revolving Loan after taking into account borrowing base limitations (net of $1 million of issued and undrawn letters of credit and $580million of reserves related to our floorplan sub-facility) and an additional £ 50 million ( $62 million ) available under our CDW UK Credit Facility.Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.17 Table of ContentsCertain of our borrowings, primarily borrowings under our senior credit facilities, are at variable rates of interest and expose us to interest rate risk. As ofDecember 31, 2016 , we had $1,552 million of variable rate debt outstanding, $1,483 million of which is subject to a 0.75% LIBOR floor. If interest rates increaseabove 0.75% per annum, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, andour net income would decrease. Although we have entered into interest rate cap agreements on our term loan facility to reduce interest rate volatility, we cannotassure 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 beeffective.Risks Related to Ownership of Our Common StockOur common stock price may be volatile and may decline regardless of our operating performance, and holders of our common stock could lose a significantportion 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 atwhich 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 wecannot 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 analyststo maintain coverage of our common stock;•downgrades by any securities analysts who follow our common stock;•future sales of our common stock by our officers, directors and significant stockholders;•market conditions or trends in our industry or the economy as a whole;•investors’ perceptions of our prospects;•announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; and•changes in key personnel.In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices ofequity securities of many companies, including companies in our industry. In the past, securities class action litigation has followed periods of market volatility. Ifwe were involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business.In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of our common stock issued inconnection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock and depress our stock price.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 Companymore 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 stockholderapproval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of commonstock;•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 resolutionadopted by the affirmative vote of the majority of the total number of directors that the Company would have if there were no vacancies;18 Table of Contents•establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon bystockholders 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 DelawareGeneral 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 periodof three years from the date such person acquired such common stock, unless board or stockholder approval is obtained prior to the acquisition. These anti-takeoverprovisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of the Company, even if doingso would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for our stockholders to elect directors of theirchoosing and to cause us to take other corporate actions our stockholders desire.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 repurchaseprogram, and our indebtedness and certain tax considerations could limit our ability to continue to pay dividends on, or make share repurchases of, ourcommon 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 pricegreater than your purchase price.We expect to continue to pay a cash dividend on our common stock, currently at the rate of $0.16 per share per quarter, or $0.64 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, orrepurchase, 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 ofDirectors 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 topay 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 theterms 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 orat 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 entirelyon the appreciation of the price of our common stock, which may never occur. See “--Risks Related to Our Business--We have significant deferred cancellation ofdebt 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 ourobligations.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 anddistributions and other transfers from our subsidiaries to meet our obligations. The agreements governing the indebtedness of our subsidiaries impose restrictionson 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 anyreason could also limit or impair their ability to pay dividends or other distributions to us.Item 1B. Unresolved Staff CommentsNone.Item 2. PropertiesAs of December 31, 2016 , we owned or leased a total of 2.1 million square feet of space, primarily in the US, Canada and United Kingdom. We own twoproperties: 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 LasVegas, Nevada. In addition, we conduct sales, services and administrative activities in various leased locations primarily in the US, 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 normalbusiness, 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 leasedproperties with equivalent properties. We believe that suitable additional or substitute leased properties will be available as required.Item 3. Legal ProceedingsWe 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 variouspartners, group purchasing organizations and customers, including government agencies, relating to purchases and sales under various contracts. In addition, we aresubject to indemnification claims under various contracts. From time to time, certain of our customers file voluntary petitions for reorganization or liquidationunder the US bankruptcy laws or similar laws of the jurisdictions for our business activities outside of the United States. In such cases,19 Table of Contentscertain pre-petition payments received by us could be considered preference items and subject to return to the bankruptcy administrator.On October 29, 2015, we learned of an investigation by the SEC of our vendor partner program incentives. The SEC’s investigation is ongoing, and weare continuing to cooperate with the SEC in this matter.As of December 31, 2016 , we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized forthese proceedings and matters, if any, has been incurred. However, the ultimate resolutions of 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 theseproceedings or matters.Item 4. Mine Safety DisclosuresNot applicable.Executive OfficersNameAgePositionThomas E. Richards62Chairman, President and Chief Executive Officer, and DirectorDennis G. Berger52Senior Vice President and Chief Coworker Services OfficerNeal J. Campbell55Senior Vice President - Strategic Solutions and ServicesMark C. Chong46Senior Vice President - Strategy and MarketingChristina M. Corley49Senior Vice President - Corporate SalesDouglas E. Eckrote52Senior Vice President - Small Business Sales and eCommerceChristine A. Leahy52Senior Vice President - International, Chief Legal Officer and Corporate SecretaryChristina V. Rother53Senior Vice President - Public and Advanced Technology SalesJonathan J. Stevens47Senior Vice President - Operations and Chief Information OfficerMatthew A. Troka46Senior Vice President - Product and Partner ManagementAnn E. Ziegler58Senior Vice President and Chief Financial OfficerThomas E. Richards serves as our Chairman, President and Chief Executive Officer and as a member of our board of directors. Mr. Richards has servedas our President and Chief Executive Officer since October 2011 and was named Chairman in January 2013. From 2009 to 2011, Mr. Richards served as ourPresident and Chief Operating Officer. Prior to joining CDW, Mr. Richards held leadership positions with Qwest Communications International Inc. (“Qwest”), abroadband Internet-based communications company. From 2008 to 2009, he served as Executive Vice President and Chief Operating Officer, where he wasresponsible for the day-to-day operation and performance of Qwest, and before assuming that role, was the Executive Vice President of the Business MarketsGroup from 2005 to 2008. Mr. Richards also has served as Chairman and Chief Executive Officer of Clear Communications Corporation and as Executive VicePresident of Ameritech Corporation. Mr. Richards serves as a board member of The Northern Trust Corporation, Junior Achievement of Chicago, Rush UniversityMedical 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 heearned 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-CoworkerServices. In 2007, he was named Senior Vice President and Chief Coworker Services Officer. Mr. Berger is responsible for leading CDW’s programs in coworkerlearning and development, benefits, compensation, performance management, coworker relations and talent acquisition. Prior to joining CDW, he served as VicePresident of Human Resources at PepsiAmericas, a beverage company, from 2002 to 2005. Mr. Berger has also held human resources positions of increasingresponsibility 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 agraduate 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 of Strategic Solutions and Services, and is responsible for CDW’s technology solutions teamsfocusing on cloud, mobility, security, collaboration, data center and services. Mr. Campbell served as Senior Vice President and Chief Marketing Officer from2011 to August 2016. Prior to joining CDW in 2011, Mr. Campbell served as Chief Executive Officer of TrafficCast, a provider of real-time and predictive trafficinformation to Google, Yahoo and others from 2008 to 2011. From 2006 to 2008, he served as Executive Vice President and General Manager-Strategic Marketing20 Table of Contentsand Next Generation Products for ISCO International, a manufacturer of wireless telecommunications components. Additionally, Mr. Campbell also spent 17 yearswith Motorola, most recently as Vice President and General Manager, GSM Portfolio Marketing and Planning for the company’s mobile device business. Hecurrently serves as a board member of Junior Achievement of Chicago, and is on the Executive Advisory Council of Bradley University. Mr. Campbell is agraduate of Bradley University where he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earneda Master of Business Administration.Mark C. Chong serves as our Senior Vice President of Strategy and Marketing. Mr. Chong joined CDW in November 2016, and is responsible for theCompany’s corporate strategy, business development and marketing efforts, including analytics and insights; brand, advertising and sponsorships; marketingoperations and execution; and corporate communications. Prior to joining CDW, Mr. Chong served as a Partner in the Chicago office of Bain & Company, a globalmanagement consulting firm (“Bain”), and as a leader in the Technology, Media and Telecom practice as well as the Customer Strategy and Marketing andMergers & Acquisition practice areas. Mr. Chong was with Bain from 1999 to 2003, and then again from 2007 to 2016. From 2003 to 2007, Mr. Chong served asDirector of Corporate Strategy and then Vice President of Strategy and Marketing for the Aerospace Business of Honeywell, Intl. Mr. Chong is a graduate of theUniversity of Chicago where he earned a bachelor’s degree and a graduate of University of Pennsylvania’s Wharton School where he earned a Master of BusinessAdministration.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 asPresident and Chief Operating Officer of Zones, Inc., a provider of IT products and solutions, from 2006 to 2011. She served as Executive Vice President ofPurchasing 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 hercareer 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 ofChicago. Ms. Corley is a graduate of the University of Illinois at Urbana-Champaign where she earned a bachelor’s degree and a graduate of NorthwesternUniversity’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 of Small Business Sales and eCommerce and is responsible for managing all aspects of CDW’sSmall Business Unit, including sales force strategy, structure, goals, operations, revenue generation and training and development, as well as the technical solutionsand services and marketing functions specific to Small Business. Additionally, he oversees CDW’s eCommerce operations. Mr. Eckrote joined CDW in 1989 as anaccount manager and quickly rose through the ranks. Since joining the company, he has served in a variety of management roles of increasing responsibility.Mr. Eckrote was appointed Director of Operations in 1996, Vice President of Operations in 1999, Senior Vice President of Purchasing in April 2001 and SeniorVice President of Purchasing and Operations in October 2001. He was promoted to Senior Vice President of Operations, Services and Canada in 2006 and in 2009was appointed to the role of Senior Vice President of Strategic Solutions and Services. He was appointed to his current role in August 2016. Mr. Eckrote currentlyserves 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 ofWestlake Christian Academy. Mr. Eckrote is a graduate of Purdue University where he earned a bachelor’s degree and a graduate of Northwestern University’sKellogg 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 ourinternational growth platform, including CDW Canada and CDW UK, CDW’s UK-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 CDWin 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 shespecialized in mergers and acquisitions, strategic counseling, corporate governance and securities law. Ms. Leahy serves as Vice Chair of the board of trustees ofChildren’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 ofCDW's Women’s Opportunity Network, a business resource group dedicated to helping women advance and grow into tomorrow’s leaders. Ms. Leahy is agraduate 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 alsocompleted 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 ourpublic 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 waschosen to lead our newly formed healthcare sales team. Beginning in 2006, Ms. Rother has held various positions ranging from Group Vice President of CDWGovernment LLC, President of CDW Government LLC and Senior Vice President of Sales. In September 2011, Ms. Rother21 Table of Contentsassumed her current role as Senior Vice President of Public and Advanced Technology Sales. Prior to joining CDW, Ms. Rother held a number of sales positionswith technology companies including Laser Computers and Price Electronics. Ms. Rother currently serves as chair of the board of directors of the Make-A-WishFoundation 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. In2007, he was named Senior Vice President and Chief Information Officer and assumed his current role in 2009. Mr. Stevens is responsible for the strategicdirection of our information technology. Additionally, he holds responsibility for our distribution centers, transportation, facilities, customer relations andoperational excellence practices. Prior to joining CDW, Mr. Stevens served as regional technology director for Avanade, an international technology integrationcompany formed through a joint venture between Microsoft and Accenture from 2000 to 2001. Prior to that, Mr. Stevens was a principal with Microsoft ConsultingServices 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 withall 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 managerand became a sales manager in 1995. From 1998 to 2001, he 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. In2011, 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 abachelor’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 LeeCorporation (“Sara Lee”), a global consumer goods company, in a number of executive roles including finance, mergers and acquisitions, strategy and generalmanagement positions in both US and international businesses. Most recently, from 2005 until 2008, Ms. Ziegler served as Chief Financial Officer and Senior VicePresident 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. and Groupon, Inc. and the board of governors of the Smart Museum of Art of theUniversity of Chicago. 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 ofChicago Law School where she earned her Juris Doctor.22 Table of ContentsPART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMarket InformationOur common stock has been listed on the NASDAQ Global Select Market since June 27, 2013 under the symbol “CDW.” The following table sets forththe 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 ofcommon stock declared for the two most recent fiscal years. Year Ended December 31, 2016 2015 High Low DividendsDeclared perShare High Low DividendsDeclared perShareFourth quarter $55.47 $43.64 $0.1600 $46.92 $40.07 $0.1075Third quarter $47.50 $39.17 $0.1075 $41.99 $33.01 $0.0675Second quarter $43.11 $37.80 $0.1075 $39.32 $34.19 $0.0675First quarter $41.89 $30.40 $0.1075 $38.44 $33.21 $0.0675HoldersAs of February 24, 2017 , there were 45 holders of record of our common stock. The number of beneficial stockholders is substantially greater than thenumber of holders of record because a portion of our common stock is held through brokerage firms.DividendsOn February 7, 2017 , we announced that our Board of Directors declared a quarterly cash dividend on our common stock of $0.16 per share. Thedividend will be paid on March 10, 2017 to all stockholders of record as of the close of business on February 24, 2017 .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 ofDirectors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potentialindebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors that our Board of Directors deems relevant. In addition, ourability 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 theability 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 ourindebtedness. For a discussion of our cash resources and needs and restrictions on our ability to pay dividends, see “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations—Liquidity and Capital Resources” included elsewhere in this report. For additional discussion of restrictions on ourability to pay dividends, see Note 8 (Long-Term Debt) to the accompanying Consolidated Financial Statements.Issuer Purchases of Equity SecuritiesInformation relating to our purchases of our common stock during the quarter ended December 31, 2016 is as follows:Period Total Number of SharesPurchased (in millions) Average Price Paid perShare Total Number of SharesPurchased as Part of a PubliclyAnnounced Program (in millions) Maximum Dollar Value of Sharesthat May Yet be Purchased Underthe Program (in millions)October 1 through October 31, 2016 — $— — $654.3November 1 through November 30, 2016 0.3 $44.27 0.3 $642.1December 1 through December 31, 2016 — $— — $642.1Total 0.3 0.3 On May 4, 2016, we announced that our Board of Directors authorized a $750 million increase to our share repurchase program under which we mayrepurchase shares of our common stock in the open market through privately negotiated or other transactions, depending on share price, market conditions andother factors.23 Table of ContentsStock Performance GraphThe information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” or incorporated by referencein 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 incorporateit 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 ofthe market on June 27, 2013, the date our common stock first traded on the NASDAQ Global Select Market, through and including the market close onDecember 31, 2016 , 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 2016 consists of the following companies: Accenture plc, Anixter International, Inc., Arrow Electronics, Inc., Avnet, Inc., CGI GroupInc., Essendant Inc., Genuine Parts Company, Henry Schein, Inc., Insight Enterprises, Inc., Owens & Minor, Inc., Patterson Companies, Inc., SYNNEXCorporation, W.W. Grainger, Inc. and Wesco International, Inc. This peer group was selected based on a review of publicly available information about thesecompanies 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 threetimes our revenue or enterprise value); (ii) operates in a business-to-business distribution environment; (iii) members of the technology industry; (iv) similarcustomers ( i.e. , business, government, healthcare, and education); (v) companies that provide services and/or solutions; and (vi) similar EBITDA and grossmargins. Shareholder returns over the indicated period are based on historical data and should not be considered indicative of future shareholder returns. June 27, 2013 December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016CDW Corp $100 $138 $209 $251 $315S&P MidCap 400 index $100 $118 $130 $127 $153CDW Peers $100 $115 $121 $127 $14724 Table of ContentsRecent Sales of Unregistered SecuritiesNone.Use of Proceeds from Registered SecuritiesNone.Item 6. Selected Financial DataThe 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, 2016 and 2015 and for the years ended December 31, 2016, 2015 and2014 from our Consolidated Financial Statements and related notes. The selected financial data as of December 31, 2013 and December 31, 2012 have beenderived from our Consolidated Financial Statements as of and for those periods and are not included in this report.25 Table of Contents Years Ended December 31,(dollars and shares in millions, except per share amounts) 2016 2015 (5) 2014 2013 2012Statement of Operations Data: Net sales $13,981.9 $12,988.7 $12,074.5 $10,768.6 $10,128.2Cost of sales 11,654.7 10,872.9 10,153.2 9,008.3 8,458.6Gross profit 2,327.2 2,115.8 1,921.3 1,760.3 1,669.6Selling and administrative expenses 1,345.1 1,226.0 1,110.3 1,120.9 1,029.5Advertising expense 162.9 147.8 138.0 130.8 129.5Income from operations 819.2 742.0 673.0 508.6 510.6Interest expense, net (146.5) (159.5) (197.3) (250.1) (307.4)Net loss on extinguishments of long-term debt (2.1) (24.3) (90.7) (64.0) (17.2)Gain on remeasurement of equity investment — 98.1 — — —Other income (expense), net 1.8 (9.3) 2.7 1.0 0.1Income before income taxes 672.4 647.0 387.7 195.5 186.1Income tax expense (248.0) (243.9) (142.8) (62.7) (67.1)Net income $424.4 $403.1 $244.9 $132.8 $119.0Net income per common share: Basic $2.59 $2.37 $1.44 $0.85 $0.82Diluted $2.56 $2.35 $1.42 $0.84 $0.82 Cash dividends declared per common share $0.4825 $0.3100 $0.1950 $0.0425 $— Balance Sheet Data (at period end): Cash and cash equivalents $263.7 $37.6 $344.5 $188.1 $37.9Working capital 957.4 903.5 985.4 810.9 666.5Total assets 6,948.4 6,755.3 6,075.9 5,899.3 5,673.5Total debt and capitalized lease obligations (1)(2) 3,236.6 3,262.9 3,166.1 3,226.0 3,724.5Total stockholders’ equity 1,045.5 1,095.9 936.5 711.7 136.5 Other Financial Data: Capital expenditures $63.5 $90.1 $55.0 $47.1 $41.4Gross profit as a percentage of Net sales 16.6% 16.3% 15.9% 16.3% 16.5%EBITDA (3) $1,073.4 $1,033.9 $792.9 $653.8 $703.7Adjusted EBITDA (3) 1,117.3 1,018.5 907.0 808.5 766.6Non-GAAP net income (4) 569.0 503.5 409.9 314.3 247.1 Statement of Cash Flows Data: Net cash provided by (used in): Operating activities $604.0 $277.5 $435.0 $366.3 $317.4Investing activities (65.9) (354.4) (164.8) (47.1) (41.7)Financing activities (304.6) (226.5) (112.0) (168.3) (338.0) (1)Excludes borrowings of $580 million , $440 million , $332 million , $257 million and $249 million , as of December 31, 2016, 2015, 2014, 2013 and2012, 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.26 Table of Contents(2)Includes capitalized lease obligations of $2 million and $3 million as of December 31, 2016 and 2015, respectively, which are included in Other liabilitieson the Consolidated Balance Sheet.(3)EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is ameasure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. We have included areconciliation of EBITDA and Adjusted EBITDA in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financialmeasures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial position that either excludes orincludes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP.Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify suchmeasures.We believe that EBITDA and Adjusted EBITDA provide analysts, investors and management with helpful information regarding the underlying operatingperformance of our business, as they remove the impact of items that management believes are not reflective of underlying operating performance.Management uses these measures to evaluate period-over-period performance as management believes they provide a more comparable measure of theunderlying business. Additionally, Adjusted EBITDA is a measure in the credit agreement governing our Senior Secured Term Loan Facility (“TermLoan”) used to evaluate our ability to make certain investments, incur additional debt, and make restricted payments, such as dividends and sharerepurchases, 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: Years Ended December 31,(in millions) 2016 2015 (f) 2014 2013 2012Net income $424.4 $403.1 $244.9 $132.8 $119.0Depreciation and amortization 254.5 227.4 207.9 208.2 210.2Income tax expense 248.0 243.9 142.8 62.7 67.1Interest expense, net 146.5 159.5 197.3 250.1 307.4EBITDA 1,073.4 1,033.9 792.9 653.8 703.7 Non-cash equity-based compensation 39.2 31.2 16.4 8.6 22.1Net loss on extinguishments of long-term debt (a) 2.1 24.3 90.7 64.0 17.2(Income) loss from equity investments (b) (1.1) 10.1 (2.2) (0.6) (0.3)Acquisition and integration expenses (c) 7.3 10.2 — — —Gain on remeasurement of equity investment (d) — (98.1) — — —Other adjustments (e) (3.6) 6.9 9.2 82.7 23.9Adjusted EBITDA (f) $1,117.3 $1,018.5 $907.0 $808.5 $766.6(a)During the years ended December 31, 2016, 2015, 2014, 2013 and 2012, we recorded net losses on extinguishments of long-term debt. Thelosses represented the difference between the amount paid upon extinguishment, including call premiums and expenses paid to the debt holdersand agents, and the net carrying amount of the extinguished debt, adjusted for a portion of the unamortized deferred financing costs.(b)Represents our share of net (income) loss from our equity investments. Our 35% share of CDW UK’s net loss includes our 35% share of anexpense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to the acquisition.(c)Comprised of expenses related to CDW UK.(d)Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of theacquisition of CDW UK.(e)Other adjustments primarily include our share of settlement payments received from the Dynamic Random Access Memory class action lawsuitsand the favorable resolution of a local sales tax matter in 2016, certain27 Table of Contentshistorical retention costs, 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 million.(f)Includes the impact of consolidating five months of CDW UK’s financial results for the year ended December 31, 2015.(4)Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, non-cash equity-basedcompensation, acquisition and integration expenses, and gains and losses from the extinguishments of long-term debt. Non-GAAP net income isconsidered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financialposition that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated andpresented in accordance with GAAP. Non-GAAP measures used by management may differ from similar measures used by other companies, even whensimilar terms are used to identify such measures. We believe that non-GAAP net income provides analysts, investors and management with helpfulinformation regarding the underlying operating performance of our business, as this measure removes the impact of items that management believes arenot reflective of underlying operating performance. Management uses this measure to evaluate period-over-period performance as management believes itprovides a more comparable measure of the underlying business.The following unaudited table sets forth a reconciliation of net income to non-GAAP net income for the periods presented: Years Ended December 31,(in millions) 2016 2015 (g) 2014 2013 2012Net income $424.4 $403.1 $244.9 $132.8 $119.0Amortization of intangibles (a) 187.2 173.9 161.2 161.2 163.7Non-cash equity-based compensation 39.2 31.2 16.4 8.6 22.1Non-cash equity-based compensation related to equityinvestment (b) — 20.0 — — —Net loss on extinguishments of long-term debt 2.1 24.3 90.7 64.0 17.2Acquisition and integration expenses (c) 7.3 10.2 — — —Gain on remeasurement of equity investment (d) — (98.1) — — —Other adjustments (e) (5.4) 3.7 (0.3) 61.2 (3.3)Aggregate adjustment for income taxes (f) (85.8) (64.8) (103.0) (113.5) (71.6)Non-GAAP net income (g) $569.0 $503.5 $409.9 $314.3 $247.1(a)Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.(b)Represents our 35% share of an expense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 priorto our acquisition of CDW UK.(c)Comprised of expenses related to CDW UK.(d)Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of theacquisition of CDW UK.(e)Primarily includes our share of settlement payments received from the Dynamic Random Access Memory class action lawsuits and the favorableresolution of a local sales tax matter during 2016, expenses related to the consolidation of office locations north of Chicago and secondaryoffering-related expenses. The amount in 2013 primarily relates to IPO and secondary offering-related expenses.(f)Aggregate adjustment for income taxes consists of the following:28 Table of Contents Year Ended December 31, 2016 2015 2014 2013 2012Total Non-GAAP adjustments230.4 165.2 268.0 295.0 199.7Weighted-average statutory effective rate36.0% 38.0% 39.0% 39.0% 39.0%Income tax(82.9) (62.8) (104.5) (115.1) (77.9)Deferred tax adjustment due to law changes(1.5) (4.0) — — —Stock compensation tax benefit related to the adoption of ASU 2016-09(1.8) — — — —Withholding tax expense on the unremitted earnings of our Canadiansubsidiary— 3.3 — — —Non-deductible adjustments and other0.4 (1.3) 1.5 1.6 6.3Total aggregate adjustment for income taxes$(85.8) $(64.8) $(103.0) $(113.5) $(71.6)(g)Includes the impact of consolidating five months for the year ended December 31, 2015 of CDW UK’s financial results.(5)Includes the impact of consolidating five months of CDW UK’s financial results for the year ended December 31, 2015.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsUnless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations,” the terms “we,” “us,” “the Company,” “our,” “CDW” and similar terms refer to CDW Corporation and its subsidiaries. “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the Consolidated Financial Statements and therelated notes included elsewhere in this report. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actualresults may differ materially from those contained in any forward-looking statements. See “Forward-Looking Statements” above.OverviewCDW Corporation is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions in the United States, Canadaand the United Kingdom. We help over 250,000 small, medium and large business, and government, education and healthcare customers by delivering criticalsolutions to meet their increasingly complex IT needs. Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutionssuch as mobility, security, data center, virtualization and digital workspace. We are technology “agnostic,” with a product portfolio including more than 100,000products from more than 1,000 leading and emerging brands. Our solutions are delivered in physical, virtual and cloud-based environments. We provide ourproducts and solutions through over 5,500 customer-facing coworkers, including sellers, highly-skilled technology specialists and advanced service deliveryengineers.We are a leading sales channel partner for many original equipment manufacturers (“OEMs”), software publishers and cloud providers (collectively, our“vendor partners”), whose products we sell or include in the solutions we offer. We provide our vendor partners with a cost-effective way to reach customers anddeliver a consistent brand experience through our established end-market coverage, technical expertise and extensive customer access.On August 1, 2015, we purchased the remaining 65% of Kelway’s outstanding common stock, which increased our ownership interest from 35% to 100%,and provided us control. Rebranded CDW UK in April 2016, the acquisition extended our footprint into the United Kingdom. It also enhanced our ability toprovide IT solutions to US based customers with multinational locations. Financial results of CDW UK are included in our Consolidated Financial Statements fromthe date of acquisition. For further details regarding the acquisition, see Note 3 (Acquisition) to the accompanying Consolidated Financial Statements, under Item8, “Financial Statements and Supplementary Data”.We have two reportable segments, Corporate and Public. We segregate the Corporate segment into private sector business customers in the US based onemployee size between Medium/Large customers, which primarily includes organizations with more than 100 employees, and Small Business customers, whichprimarily includes organizations with up to 100 employees. Our Public segment is comprised of government agencies and education and healthcare institutions inthe US. We also have two other operating segments: Canada and CDW UK, 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 CDW UK, see Note 3 (Acquisition) to our ConsolidatedFinancial Statements. The CDW Advanced Services business consists primarily of customized engineering services delivered by technology specialists andengineers, and managed services that include Infrastructure as a Service (“IaaS”) offerings. Effective January 1, 2016, the CDW Advanced Services business wasincluded in our Corporate and Public segments. Effective January 1, 2017, we established Small Business as its own operating segment to align our financialreporting with the manner in which the Chief Operating Decision Maker assesses performance and makes resource allocation decisions. By separating Small29 Table of ContentsBusiness from our Corporate segment we will drive increased focus and accountability for both segments. To achieve our vision to be small business customers“first choice for technology” we are aligning coworkers and digital resources that point directly at this growing market.We may sell all or only select products that our vendor partners offer. Each vendor partner agreement provides for specific terms and conditions, whichmay include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such as purchaseor sales rebates and cooperative advertising reimbursements. We also resell software for major software publishers. Our agreements with software publishers allowthe end-user customer to acquire software or licensed products and services. In addition to helping our customers determine the best software solutions for theirneeds, we help them manage their software agreements, including warranties and renewals. A significant portion of our advertising and marketing expenses isreimbursed through cooperative advertising programs with our vendor partners. These programs are at the discretion of our vendor partners and are typically tied tosales or other commitments to be met by us within a specified period of time.Trends and Key Factors Affecting our Financial PerformanceWe believe the following trends and key factors may have an important impact on our financial performance:•General economic conditions are a key factor affecting our ability to generate sales and achieve our targeted operating results as they impact ourcustomers’ willingness to spend on information technology. This is particularly the case for corporate customers, as their purchases tend to reflectconfidence in their business prospects, which are driven by their perceptions of business conditions. Purchasing behavior may be different betweenour Medium/Large customers and Small Business customers due to their perception of business conditions.•Changes in spending policies, budget priorities and revenue levels are a key factor influencing government purchasing levels. Our Governmentresults also reflect increased interest in meeting public safety needs through technology solutions by state and local customers, as well as our abilityto address strategic changes made by the Federal government toward a more programmatic technology strategy.•Customer focus on security has been, and we expect will continue to be, an ongoing trend. Customers are seeking solutions to protect their internalsystems against threats and are implementing solutions that provide enterprise-wide visibility, detection expertise and investigation workflows. Theyare also implementing endpoint security, firewall segmentation and user authentication tools. •The Healthcare industry continues to experience consolidation, which has caused uneven technology growth as customers assess their post-acquisition state.•Our Education sales channel performance continues to be impacted by the implementation of networking projects related to the US FederalCommunications Commission E-Rate program. We are also seeing positive impacts as schools develop digital testing and curriculum programs, andwork to create new learning environments for students. Within the higher education market, networking projects continue to be a key priority acrosscampuses. While technology is an opportunity to create cost savings and improve productivity, funding is a key determinant of technology spendingin education.•There continues to be substantial uncertainty regarding the impact of Brexit. Potential adverse consequences of Brexit such as global marketuncertainty, volatility in currency exchange rates, greater restrictions on imports and exports between UK and EU countries and increased regulatorycomplexities could have a negative impact on our business, financial condition and results of operations.•Technology trends drive customer purchase behaviors and we are seeing continuing evolution in the market. Innovation influences customerpurchases across all of our customer end-markets. Key trends in technology include increasing adoption of cloud-based solutions for certain keyworkloads, including security, as well as adoption of hyper-converged appliances to deliver greater flexibility and efficiency. In addition, hybridcloud solutions are being adopted, along with software being embedded into solutions.Key Business MetricsWe monitor a number of financial and non-financial measures and ratios on a regular basis in order to track the progress of our business and makeadjustments 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 oninvested capital, Cash and cash equivalents,30 Table of Contentsnet working capital, cash conversion cycle (defined to be days of sales outstanding in Accounts receivable plus days of supply in Inventory minus days ofpurchases outstanding in Accounts payable, based on a rolling three-month average), debt levels including available credit and leverage ratios, sales per coworkerand coworker turnover. These measures and ratios are compared to standards or objectives set by management, so that actions can be taken, as necessary, in orderto 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 analysts, investors and management with helpful information regarding the underlying operating performance of ourbusiness, as they remove the impact of items that management believes are not reflective of underlying operating performance. Management uses these measures toevaluate period-over-period performance as management believes they provide a more comparable measure of the underlying business. Additionally, AdjustedEBITDA is a measure in the credit agreement governing our Senior Secured Term Loan Facility (“Term Loan”) used to evaluate our ability to make certaininvestments, incur additional debt, and make restricted payments, such as dividends and share repurchases, as well as whether we are required to make additionalprincipal prepayments on the Term Loan beyond the quarterly amortization payments. For further details regarding the Term Loan, see Long-Term Debt andFinancing Arrangements within Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 8 (Long-Term Debt) to theaccompanying Consolidated Financial Statements. For the definitions of Non-GAAP net income and Adjusted EBITDA and reconciliations to Net income, see“Results of Operations”.The results of certain key business metrics are as follows: Years Ended December 31,(dollars in millions)2016 2015 2014Net sales$13,981.9 $12,988.7 $12,074.5Gross profit2,327.2 2,115.8 1,921.3Income from operations819.2 742.0 673.0Net income424.4 403.1 244.9Non-GAAP net income569.0 503.5 409.9Adjusted EBITDA1,117.3 1,018.5 907.0Average daily sales55.0 51.1 47.5Net debt (defined as total debt minus cash and cash equivalents) (1)2,970.7 3,222.1 2,821.5Cash conversion cycle (in days) (2)19 21 21(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 toreflect 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 aseparate asset on the Consolidated Balance Sheet. In the third quarter of 2015, we adopted ASU 2015-15 which allows entities to present deferredfinancing costs for line-of-credit arrangements as an asset. We retroactively adjusted the deferred financing costs and Long-term debt liability presented inhistorical 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 outstandingin accounts payable, based on a rolling three-month average.Results of OperationsYear Ended December 31, 2016 Compared to Year Ended December 31, 2015Results of operations, in dollars and as a percentage of Net sales, for the years ended December 31, 2016 and 2015 are as follows:31 Table of Contents Years Ended December 31, 2016 2015 Dollars inMillions Percentage ofNet Sales (1) Dollars inMillions Percentage ofNet Sales (1)Net sales $13,981.9 100.0 % $12,988.7 100.0 %Cost of sales 11,654.7 83.4 10,872.9 83.7Gross profit 2,327.2 16.6 2,115.8 16.3Selling and administrative expenses 1,345.1 9.6 1,226.0 9.4Advertising expense 162.9 1.2 147.8 1.1Income from operations 819.2 5.9 742.0 5.7Interest expense, net (146.5) (1.0) (159.5) (1.2)Net loss on extinguishments of long-term debt (2.1) — (24.3) (0.2)Gain on remeasurement of equity investment — — 98.1 0.8Other income (expense), net 1.8 — (9.3) (0.1)Income before income taxes 672.4 4.8 647.0 5.0Income tax expense (248.0) (1.8) (243.9) (1.9)Net income $424.4 3.0 % $403.1 3.1 %(1)Percentages may not total due to rounding.Net salesNet 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 yearsended December 31, 2016 and 2015 are as follows: Years Ended December 31, 2016 2015 (dollars in millions) Net Sales Percentage of TotalNet Sales Net Sales Percentage of TotalNet Sales Dollar Change Percent Change (1)Corporate: Medium/Large $5,879.7 42.1% $5,875.3 45.2% $4.4 0.1%Small Business 1,150.2 8.2 1,093.0 8.4 57.2 5.2Total Corporate 7,029.9 50.3 6,968.3 53.6 61.6 0.9 Public: Government 1,863.7 13.3 1,700.9 13.1 162.7 9.6Education 2,018.3 14.4 1,818.8 14.0 199.5 11.0Healthcare 1,707.4 12.2 1,663.9 12.8 43.5 2.6Total Public 5,589.4 40.0 5,183.6 39.9 405.7 7.8 Other 1,362.6 9.7 836.8 6.4 525.9 62.8 Total Net sales $13,981.9 100.0% $12,988.7 100.0% $993.2 7.6%(1)There were 254 selling days for the years ended December 31, 2016 and 2015 .Total Net sales in 2016 increased $993 million , or 7.6% , to $13,982 million , compared to $12,989 million in 2015 , reflecting both solid organicincreases and the inclusion of seven months of incremental CDW UK sales. Total Net sales increased 8.3% on a constant currency basis. There were five keytrends that impacted our Net sales growth. First, customers were seeking to optimize their infrastructure by extending asset lives or adding capacity, which led toincreases in warranties and virtualization software. Second, customer focus on designing IT securely continued to be a major area of interest for customers, and wesaw excellent increases across our entire security portfolio, including security software. We also saw our customers seeking architectures32 Table of Contentsto increase the flexibility and efficiency of their IT infrastructure, which drove increased adoption of cloud solutions for certain workloads, including security, aswell as increased sales of hyper-converged infrastructure. Fourth, we saw the on-going trend where a greater proportion of solutions are being delivered viasoftware. With software becoming more “mission critical,” customers continued to turn to software assurance to protect their investment. Finally, customer demandfor digital signage and video screens, as well as notebook/mobile devices, drove growth across all of our customer end-markets.Corporate segment Net sales in 2016 increased $62 million , or 0.9% , compared to 2015 , driven by sales growth within the small business customerchannel. Net sales to medium/large customers increased $4 million , or 0.1% , year over year, as customer demand for longer tail purchases, including data centerand networking solutions, was impacted by slow economic growth and market trends. Medium/Large had strong sales performance in notebook/mobile devices andsoftware products. Economic conditions had less of an impact on Small business results, as Net sales to small business customers increased by $57 million , or5.2% , between periods, driven by growth in notebooks/mobile devices, desktops, and video projection hardware.Public segment Net sales in 2016 increased $406 million , or 7.8% , between years. Net sales to government customers increased $163 million , or 9.6% .State and local government customers continued to focus on public safety and we benefited from new contracts. Our Federal channel saw low single-digit growthas the success we had meeting new strategic programs was partially offset by the impact of several large client device purchase orders that were delayed into 2017.Net sales to education customers increased $199 million , or 11.0% , year over year, driven by continued success providing client devices to support digital testingand curriculums, as well as desktops and video projection hardware to support new learning environments for students. Healthcare growth was 2.6% or $43 million, driven by notebooks/mobile devices, desktops and software. Patient data security continues to be a top concern. We continued to see some of our larger customersshifting priorities to reducing costs due to industry consolidation.Net sales in Other, which is comprised of our Canadian and CDW UK operations, increased $526 million , or 62.8% , compared 2015 . The increase inNet sales was primarily driven by the impact of consolidating twelve months of CDW UK Net sales in 2016 compared to consolidating five months of CDW UKresults in 2015. Both our Canadian and UK businesses grew high-single digits in local currency in 2016. Currency was impacted by Canadian dollar to US dollartranslation in the first half of the year and British pound to US dollar translation in the second half.Gross profitGross profit increased $211 million , or 10.0% , to $2,327 million in 2016 , compared to $2,116 million in 2015 . As a percentage of Net sales, Grossprofit increased 30 basis points to 16.6% in 2016 , from 16.3% in 2015 .Gross profit margin was positively impacted 30 basis points by a higher mix of net service contract revenue as customers looked to extend the life ofequipment through warranties, protect their software investments through software assurance and adopt cloud solutions to deliver certain workloads. All of thesesolutions grew faster than our overall Net sales. In addition, vendor partner funding positively impacted gross margin by 35 basis points. These increases helpedoffset the impact of 30 basis points from unfavorable product margin.Gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection programs, cooperative advertisingfunds classified as a reduction of cost of sales, product mix, net service contract revenue, commission revenue, pricing strategies, market conditions and otherfactors.Selling and administrative expensesSelling and administrative expenses increased $119 million , or 9.7% , to $1,345 million in 2016 , compared to $1,226 million in 2015 . As a percentageof total Net sales, Selling and administrative expenses increased 20 basis points to 9.6% in 2016 , up from 9.4% in 2015 . Payroll costs increased $65 million ,or 11.7% , year over year, primarily due to incremental coworker hires at the end of 2015, higher compensation costs consistent with increased Gross profit and theinclusion of twelve months of CDW UK payroll costs in 2016 compared to five months in 2015. Total coworker count was 8,516 at December 31, 2016 , up 51from 8,465 at December 31, 2015 . Amortization expense related to intangibles increased $18 million , or 8.8% , during 2016 compared to 2015 , primarily due toincremental amortization expense related to the intangible assets arising from our acquisition of CDW UK. Non-cash equity-based compensation expense increased$8 million , or 25.8% , during 2016 compared to 2015 , primarily due to annual equity awards granted under our 2013 Long-Term Incentive Plan, performanceagainst long-term incentive program targets and equity awards granted in connection with our acquisition of CDW UK.33 Table of ContentsIncome from operationsIncome from operations by segment, in dollars and as a percentage of Net sales, and the year-over-year percentage change for the years ended December31, 2016 and 2015 was as follows: Years Ended December 31, 2016 2015 Dollars inMillions OperatingMargin Dollars inMillions OperatingMargin Percent Changein Incomefrom OperationsSegments: (1) Corporate (2) $522.5 7.4% $500.8 7.2% 4.3%Public (2) 368.0 6.6 328.6 6.3 12.0Other (3)(4) 43.6 3.2 27.1 3.2 60.9Headquarters (5) (114.9) nm* (114.5) nm* 0.3Total Income from operations $819.2 5.9% $742.0 5.7% 10.4% * Not meaningful(1)Segment income from operations includes the segment’s direct operating income, allocations for certain Headquarters’ costs, allocations for income andexpenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors.(2)Certain costs related to technology specialists have been reclassified between our Corporate and Public segments. The prior period has been reclassified toconform to the current period presentation.(3)Effective January 1, 2016, CDW Advanced Services is included in our Corporate and Public segments and Other is comprised of CDW Canada and CDWUK. The prior period has been reclassified to conform to the current period presentation.(4)Includes the financial results for our other operating segments, CDW Canada and CDW UK, which do not meet the reportable segment quantitativethresholds.(5)Includes Headquarters’ function costs that are not allocated to the segments. Certain Headquarters expenses have been allocated to CDW Canada in 2016.The prior period has been reclassified to conform to the current period presentation.Income from operations was $819 million in 2016 , an increase of $77 million , or 10.4% , compared to $742 million in 2015 . Total operating marginincreased 20 basis points to 5.9% in 2016 , from 5.7% in 2015 . Operating margin was positively impacted by the increase in Gross profit margin, driven by highercontribution from net service contract revenue and vendor partner funding. Selling and administrative expenses as a percentage of Net sales increased 20 basispoints in 2016 versus 2015, primarily reflecting increased sales compensation and coworker costs resulting from the inclusion of CDW UK expenses for twelvemonths in 2016 compared to five months in 2015.Corporate segment income from operations was $523 million in 2016 , an increase of $22 million , or 4.3% , compared to $501 million in 2015 .Corporate segment operating margin increased 20 basis points to 7.4% in 2016 , from 7.2% in 2015 . This increase was primarily due to an increase in Gross profitdriven by a higher mix of net service contract revenue, as well as higher volume rebates, partially offset by an increase in Selling and administrative expenses as apercentage of Net sales, due to higher sales payroll costs.Public segment income from operations was $368 million in 2016 , an increase of $39 million , or 12.0% , compared to $329 million in 2015 . Publicsegment operating margin increased 30 basis points to 6.6% in 2016 , from 6.3% in 2015 . This increase was driven primarily due to an increase in Net sales andGross profit driven by a higher mix of net service contract revenue, as well as higher volume rebates, partially offset by an increase in Selling and administrativeexpenses as a percentage of Net sales, due to higher sales payroll costs.Other income from operations was $44 million in 2016 , an increase of $17 million , or 60.9% , compared to $27 million in 2015 . This was primarily dueto the inclusion of an additional seven months of CDW UK income from operations. Other operating margin percentage remained flat at 3.2% in both 2016 and2015.34 Table of ContentsInterest expense, netAt December 31, 2016 , our outstanding long-term debt totaled $3,234 million , compared to $3,260 million at December 31, 2015 , a decrease of $26million primarily due to principal payments on the loans. Net interest expense in 2016 was $147 million , a decrease of $13 million , compared to $160 million in2015 . This decrease was primarily due to the lower effective interest rates and the lower principal loan balances for 2016 compared to 2015 as a result ofredemptions and refinancing activities completed during 2016 and 2015, and the impact in 2016 of mark-to-market gains associated with our interest rate capagreements.Net loss on extinguishments of long-term debtFor information regarding our debt, see Note 8 (Long-Term Debt) to the accompanying Consolidated Financial Statements. During 2016, we recorded anet loss on extinguishments of long-term debt of $2 million compared to $24 million in 2015.Net loss on extinguishments of long-term debt for the years ended December 31, 2016 and 2015 are as follows:Month of ExtinguishmentDebt Instrument (in millions) Amount Extinguished Loss Recognized For the Year Ended December 31, 2016 August 2016Senior Secured Term Loan Facility $1,490.4 $(2.1) Total Loss Recognized $(2.1) For the Year Ended December 31, 2015 March 20152019 Senior Notes $503.9 $(24.3)(1) Total Loss Recognized $(24.3) (1)We repaid all of the remaining aggregate principal amount outstanding. The loss recognized represents the difference between the aggregate principalamount and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs and premium.Gain on remeasurement of equity investmentOn August 1, 2015, we completed the acquisition of CDW UK by purchasing the remaining 65% of its outstanding common stock which increased ourownership 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 again of $98 million recorded in Gain on remeasurement of equity investment in the Consolidated Statements of Operations.Income tax expenseIncome tax expense was $248 million in 2016 , compared to $244 million in 2015 . The effective income tax rate, expressed by calculating income taxexpense or benefit as a percentage of income before income taxes, was 36.9% and 37.7% for 2016 and 2015 , respectively.For 2016 , the effective tax rate differed from the US federal statutory rate primarily due to state income taxes and non-deductible meals andentertainment expenses, which were partially offset by lower corporate tax rates on our international income, a deferred tax benefit as a result of a tax ratereduction in the UK and excess tax benefits on equity compensation as a result of adopting ASU 2016-09. For 2015, the effective tax rate differed from the USfederal 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 assertingpermanent reinvestment, which was partially offset by a deferred tax benefit as a result of a tax rate reduction in the UK. The lower effective tax rate for 2016 ascompared to 2015 was primarily attributable to a larger benefit in 2016 related to our international income, which is taxed at lower tax rates than our US income,excess tax benefits on equity compensation as a result of adopting ASU 2016-09 in 2016 and less Canadian withholding tax expense in 2016 than in 2015, partiallyoffset by a greater deferred tax benefit related to UK tax rate reductions in 2015 than in 2016.Non-GAAP Financial Measure ReconciliationsWe have included reconciliations of Non-GAAP net income, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and consolidated Net sales growthon a constant currency basis for the years ended December 31, 2016 and 2015 below.Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, non-cash equity-basedcompensation, acquisition and integration expenses, and gains and losses from the extinguishment35 Table of Contentsof 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. Consolidated Net salesgrowth on a constant currency basis is defined as consolidated Net sales growth excluding the impact of foreign currency translation on Net sales compared to theprior period.Non-GAAP net income, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and consolidated Net sales growth on a constant currency basis areconsidered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial position thateither excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordancewith GAAP. Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identifysuch measures.We believe these measures provide analysts, investors and management with helpful information regarding the underlying operating performance of ourbusiness, as they remove the impact of items that management believes are not reflective of underlying operating performance. Management uses these measures toevaluate period-over-period performance as management believes they provide a more comparable measure of the underlying business. Additionally, AdjustedEBITDA is a measure in the credit agreement governing our Senior Secured Term Loan Facility (“Term Loan”) used to evaluate our ability to make certaininvestments, incur additional debt and make restricted payments, such as dividends and share repurchases, as well as whether we are required to make additionalprincipal 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 incomeNon-GAAP net income was $569 million for the year ended December 31, 2016 , an increase of $65 million , or 13.0% , compared to $504 million for theyear ended December 31, 2015 . Years Ended December 31,(in millions) 2016 2015Net income $424.4 $403.1Amortization of intangibles (1) 187.2 173.9Non-cash equity-based compensation 39.2 31.2Non-cash equity-based compensation related to equity investment (2) — 20.0Net loss on extinguishments of long-term debt 2.1 24.3Acquisition and integration expenses (3) 7.3 10.2Gain on remeasurement of equity investment (4) — (98.1)Other adjustments (5) (5.4) 3.7Aggregate adjustment for income taxes (6) (85.8) (64.8)Non-GAAP net income (7) $569.0 $503.5(1)Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.(2)Represents our 35% share of an expense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to ouracquisition of CDW UK.(3)Comprised of expenses related to CDW UK.(4)Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisitionof CDW UK.(5)Primarily includes our share of settlement payments received from the Dynamic Random Access Memory class action lawsuits and the favorableresolution of a local sales tax matter during the year ended December 31, 2016. Also includes expenses related to the consolidation of office locationsnorth of Chicago during the years ended December 31, 2016 and 2015.36 Table of Contents(6)Aggregate adjustment for income taxes consists of the following: Year Ended December 31, 2016 2015Total Non-GAAP adjustments 230.4 165.2Weighted-average statutory effective rate 36.0% 38.0%Income tax (82.9) (62.8)Deferred tax adjustment due to law changes (1.5) (4.0)Stock compensation tax benefit related to the adoption of ASU 2016-09 (1.8) —Withholding tax expense on the unremitted earnings of our Canadian subsidiary — 3.3Non-deductible adjustments and other 0.4 (1.3)Total aggregate adjustment for income taxes $(85.8) $(64.8)(7)Includes the impact of consolidating five months of CDW UK's financial results for the year ended December 31, 2015.Adjusted EBITDAAdjusted EBITDA was $1,117 million for the year ended December 31, 2016 , an increase of $99 million , or 9.7% , compared to $1,018 million for theyear ended December 31, 2015 . As a percentage of Net sales, Adjusted EBITDA was 8.0% and 7.8% for the years ended December 31, 2016 and 2015 ,respectively. Years Ended December 31,(in millions) 2016 Percentage ofNet Sales 2015 Percentage ofNet SalesNet income $424.4 $403.1 Depreciation and amortization 254.5 227.4 Income tax expense 248.0 243.9 Interest expense, net 146.5 159.5 EBITDA 1,073.4 7.7% 1,033.9 8.0% Adjustments: Non-cash equity-based compensation 39.2 31.2 Net loss on extinguishments of long-term debt 2.1 24.3 (Income) loss from equity investments (1) (1.1) 10.1 Acquisition and integration expenses (2) 7.3 10.2 Gain on remeasurement of equity investment (3) — (98.1) Other adjustments (4) (3.6) 6.9 Total adjustments 43.9 (15.4) Adjusted EBITDA (5) $1,117.3 8.0% $1,018.5 7.8%(1)Represents our share of (income) loss from our equity investments. Our 35% share of CDW UK's net loss for the twelve months ended December 31,2015 includes our 35% share of an expense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to theacquisition.(2)Comprised of expenses related to CDW UK.(3)Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisitionof CDW UK.(4)Primarily includes our share of settlement payments received from the Dynamic Random Access Memory class action lawsuits and the favorableresolution of a local sales tax matter during the year ended December 31, 2016. Also includes expenses related to the consolidation of office locationsnorth of Chicago during the years ended December 31, 2016 and 2015.(5)Includes the impact of consolidating five months of CDW UK's financial results for the year ended December 31, 2015.37 Table of ContentsConsolidated Net sales growth on a constant currency basisConsolidated Net sales increased $993 million , or 7.6% , to $13,982 million for the year ended December 31, 2016 , compared to $12,989 million for theyear ended December 31, 2015 . Consolidated Net sales on a constant currency basis, which excludes the impact of foreign currency translation, increased $1,070million , or 8.3% , to $13,982 million for the year ended December 31, 2016, compared to $12,912 million for the year ended December 31, 2015 . Years Ended December 31, (in millions) 2016 2015 % ChangeAverage Daily %Change (1)Net sales, as reported $13,981.9 $12,988.7 7.6%7.6%Foreign currency translation (2) — (76.3) Consolidated Net sales, on a constant currency basis $13,981.9 $12,912.4 8.3%8.3%(1)There were 254 selling days for the twelve months ended December 31, 2016 and 2015 .(2)Represents the effect of translating the prior year results of CDW Canada and CDW UK at the average exchange rates applicable in the current year.Includes the impact of consolidating five months of CDW UK's financial results for the year ended December 31, 2015.Year Ended December 31, 2015 Compared to Year Ended December 31, 2014Results of operations, in dollars and as a percentage of Net sales, for the years ended December 31, 2015 and 2014 are as follows: Year Ended December 31, 2015 Year Ended December 31, 2014 Dollars inMillions Percentage ofNet Sales Dollars inMillions Percentage ofNet SalesNet sales $12,988.7 100.0 % $12,074.5 100.0 %Cost of sales 10,872.9 83.7 10,153.2 84.1Gross profit 2,115.8 16.3 1,921.3 15.9Selling and administrative expenses 1,226.0 9.4 1,110.3 9.2Advertising expense 147.8 1.1 138.0 1.1Income from operations 742.0 5.7 673.0 5.6Interest expense, net (159.5) (1.2) (197.3) (1.6)Net loss on extinguishments of long-term debt (24.3) (0.2) (90.7) (0.8)Gain on remeasurement of equity investment 98.1 0.8 — —Other income, net (9.3) (0.1) 2.7 —Income before income taxes 647.0 5.0 387.7 3.2Income tax expense (243.9) (1.9) (142.8) (1.2)Net income $403.1 3.1 % $244.9 2.0 %Net salesNet 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 yearsended December 31, 2015 and 2014 are as follows:38 Table of Contents Years Ended December 31, 2015 2014 (dollars in millions) Net Sales Percentageof Total Net sales Net Sales Percentageof TotalNet Sales DollarChange PercentChange (1)Corporate: Medium/Large $5,875.3 45.2% $5,578.3 46.2% $297.0 5.3 %Small Business 1,093.0 8.4 1,025.7 8.5 67.3 6.6Total Corporate 6,968.3 53.6 6,604.0 54.7 364.3 5.5 Public: Government 1,700.9 13.1 1,475.9 12.2 225.0 15.2Education 1,818.8 14.0 1,838.7 15.2 (19.9) (1.1)Healthcare 1,663.9 12.8 1,623.7 13.4 40.2 2.5Total Public 5,183.6 39.9 4,938.3 40.9 245.3 5.0 Other 836.8 6.4 532.2 4.4 304.6 57.2 Total Net sales $12,988.7 100.0% $12,074.5 100.0% $914.2 7.6 %(1)There were 254 selling days for the years ended December 31, 2015 and 2014 .Total Net sales in 2015 increased $914 million , or 7.6% , to $12,989 million , compared to $12,075 million in 2014, reflecting both organic Net salesgrowth and the impact of consolidating five months of CDW UK Net sales. Customer priorities continued to shift more towards integrated solutions, which drovehigher growth in solutions sales compared to transactional product sales. Strong sales performance in solutions-focused products was driven by netcomm andserver 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 CDW UK, increased $563.5 million, or 4.7%, to $12,638.0 million in 2015, comparedto $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 $635.0million, 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 $364 million , or 5.5% , compared to 2014, driven by sales growth in both our Medium/Large and Smallbusiness customer channels and reflecting stronger performance in solutions sales compared to transactional product sales. Within our Corporate segment, Netsales to Medium/Large customers increased $297 million , or 5.3% , year over year, primarily due to strong sales performance in solutions-focused productsdriven by netcomm products and server and server-related products. Growth in transactional products was driven by notebook/mobile devices, partially offset by adecline in desktop computers. Net sales to Small business customers increased by $67 million , or 6.6% , between periods, driven by growth in notebooks/mobiledevices and netcomm products, partially offset by a decline in desktop computers.Public segment Net sales in 2015 increased $245 million , or 5.0% , between years, due to strong sales performance in Government and growth inHealthcare, partially offset by Education remaining relatively flat. Net sales to government customers increased $225 million , or 15.2% , between periods, assales to both Federal and state/local government customers experienced mid-teens growth. The increase in Net sales to the Federal government was driven bygrowth in sales of netcomm products, software and enterprise storage, as we continued to benefit from strategic changes made to better align with new Federalgovernment 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 customersdecreased $20 million , or 1.1% , year over year, primarily due to declines in notebooks/mobile devices, partially offset by growth in netcomm products. Net salesto healthcare customers increased $40 million , or 2.5% , year over year, driven by growth in netcomm and server-related products, partially offset by declines indesktop computers and point-of-care technology carts, as some of our larger customers shifted priorities to reducing costs due to industry consolidation.39 Table of ContentsNet sales in Other in 2015 increased $305 million , or 57.2% , compared to 2014. Other is comprised of Canada and CDW UK. The increase in 2015 Netsales was driven by the impact of consolidating five months of CDW UK, partially offset by a decline in the US dollar-denominated Net sales of Canada. The Netsales of Canada in constant currency continued to grow during 2015 compared to 2014.Gross profitGross profit increased $195 million, or 10.1%, to $2,116 million in 2015, compared to $1,921 million in 2014. As a percentage of Net sales, Grossprofit 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 grossprofit 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 grossprofit on the transaction. Gross profit margin was positively impacted 15 basis points due to a higher mix of services and improved product margin. We alsoexperienced a favorable impact of 10 basis points from vendor partner funding. Vendor partner funding includes purchase discounts, volume rebates andcooperative advertising.Gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection programs, cooperative advertisingfunds classified as a reduction of cost of sales, product mix, net service contract revenue, commission revenue, pricing strategies, market conditions and otherfactors.Selling and administrative expensesSelling and administrative expenses increased $116 million, or 10.4%, to $1,226 million in 2015, compared to $1,110 million in 2014. As a percentage oftotal 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 million, or12.0%, year over year, primarily due to increased sales compensation consistent with growth in solutions-related sales, an increase in Gross profit andconsolidating five months of incremental CDW UK sales payroll costs. In addition, certain coworker costs increased $10.0 million, or 3.8%, during 2015 comparedto the prior year, due to higher costs consistent with increased coworker count, primarily due to our acquisition of CDW UK. Total coworker countwas 8,465 at December 31, 2015, up 1,254 from 7,211 at December 31, 2014. Amortization expense related to intangibles increased $17 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 CDW UK. Non-cash equity-based compensation expense increased $15 million, or 90.7%, during 2015 compared to 2014, primarily due to annual equity awards granted under our2013 Long-Term Incentive Plan in 2015, performance against long-term incentive program targets and equity awards granted in connection with our acquisition ofCDW UK. In addition, we incurred $10 million of acquisition and integration costs in 2015 related to our acquisition of CDW UK.Income from operationsIncome from operations by segment, in dollars and as a percentage of Net sales, and the year-over-year percentage change in Income from operations forthe years ended December 31, 2015 and 2014 is as follows: Years Ended December 31, 2015 2014 Dollars inMillions OperatingMargin Dollars inMillions OperatingMargin Percent Changein Incomefrom OperationsSegments: (1) Corporate (2) $500.8 7.2% $460.6 7.0% 8.7%Public (2) 328.6 6.3 303.9 6.2 8.1Other (3)(4) 27.1 3.2 21.4 4.0 26.7Headquarters (5) (114.5) nm* (112.9) nm* 1.5Total Income from operations $742.0 5.7% $673.0 5.6% 10.3% 40 Table of Contents* Not meaningful(1)Segment income from operations includes the segment’s direct operating income, allocations for certain Headquarters’ costs, allocations for income andexpenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors.(2)Certain costs related to technology specialists have been reclassified between our Corporate and Public segments. The prior period has been reclassified toconform to the current period presentation.(3)Effective January 1, 2016, CDW Advanced Services is included in our Corporate and Public segments and Other is comprised of CDW Canada and CDWUK. The prior period has been reclassified to conform to the current period presentation.(4)Includes the financial results for our other operating segments, CDW Canada and CDW UK, which do not meet the reportable segment quantitativethresholds.(5)Includes Headquarters’ function costs that are not allocated to the segments. Certain Headquarters expenses have been allocated to CDW Canada in 2016.The prior period has been reclassified to conform to the current period presentation.Income from operations was $742 million in 2015, an increase of $69 million , or 10.3% , compared to $673 million in 2014. Total operatingmargin 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, partiallyoffset 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 $501 million in 2015, an increase of $40 million , or 8.7% , compared to $461 million in 2014.Corporate segment operating margin increased 20 basis points to 7.2% in 2015, from 7.0% in 2014. This increase was driven by higher Net sales and Grossprofit.Public segment income from operations was $329 million in 2015, an increase of $25 million , or 8.1% , compared to $304 million in 2015. Publicsegment operating margin increased 10 basis points to 6.3% in 2015, from 6.2% in 2014. This increase was driven by higher Net sales and Gross profit.Interest expense, netAt December 31, 2015, our outstanding long-term debt totaled $3,260 million, compared to $3,166 million at December 31, 2014, an increase of $94million primarily due to the completion of the acquisition of CDW UK. Net interest expense in 2015 was $160 million, a decrease of $38 million, comparedto $197 million in 2014. This decrease was primarily due to lower effective interest rates for 2015, compared to 2014 as a result of redemptions and refinancingactivities completed during 2014 and 2015.Net loss on extinguishments of long-term debtFor information regarding our debt, see Note 8 (Long-Term Debt) to the accompanying Consolidated Financial Statements. During 2015, we recorded anet loss on extinguishments of long-term debt of $24 million compared to $90 million in 2014.41 Table of ContentsNet loss on extinguishments of long-term debt for the years ended December 31, 2015 and 2014 are as follows:Month of ExtinguishmentDebt Instrument (in millions) Amount Extinguished Loss Recognized For the Year Ended December 31, 2015 March 20152019 Senior Notes $503.9 $(24.3)(1) Total Loss Recognized $(24.3) For the Year Ended December 31, 2014 December 20142019 Senior Notes $541.4 $(36.9)(1) September 20142019 Senior Notes 234.7 (22.1)(1) August 20148.0% Senior Secured Notes due 2018 325.0 (23.7)(1) June 2014Revolving Loan — (0.4)(2) May 201412.535% Senior Subordinated Exchange Notes due 2017 42.5 (2.2)(1) March 20142019 Senior Notes 25.0 (2.7)(1) January and February 201412.535% Senior Subordinated Exchange Notes due 2017 50.0 (2.7)(1) Total Loss Recognized $(90.7) (1)We redeemed or repurchased all or a portion of the aggregate principal amount outstanding. The loss recognized represents the difference between theredemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs and/or unamortizedpremium.(2)We entered into a new $1,250 million five-year senior secured asset-based revolving credit facility (the “Revolving Loan”) on June 6, 2014. TheRevolving Loan replaced our previous revolving loan credit facility that was to mature on June 24, 2016. The loss recognized represents the write-off of aportion of unamortized deferred financing costs.Gain on remeasurement of equity investmentOn August 1, 2015, we completed the acquisition of CDW UK by purchasing the remaining 65% of its outstanding common stock, which increased ourownership 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 again of $98 million recorded in Gain on remeasurement of equity investment in the Consolidated Statements of Operations.Income tax expenseIncome tax expense was $244 million in 2015, compared to $143 million in 2014. The effective income tax rate, expressed by calculating income taxexpense 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 US federal statutory rate primarily due to state income taxes and withholding tax expense on the earningsof 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 ratereduction in the UK For 2014, the effective tax rate differed from the US federal statutory rate primarily due to state income taxes, including current year stateincome 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 taxcredits and the aforementioned Canadian withholding tax expense partially offset by the deferred tax benefit reflecting the tax rate reduction in the UK We areasserting that the unremitted earnings of our UK business are indefinitely reinvested.Non-GAAP Financial Measure ReconciliationsWe have included reconciliations of Non-GAAP net income, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin Organic Net sales growth andOrganic Net sales growth on a constant currency basis for the years ended December 31, 2015 and 2014 below. 42 Table of ContentsNon-GAAP net incomeNon-GAAP net income was $504 million for the year ended December 31, 2015, an increase of $94 million, or 22.8%, compared to $410 million for theyear ended December 31, 2014. Years Ended December 31,(in millions) 2015 2014Net income $403.1 $244.9Amortization of intangibles (1) 173.9 161.2Non-cash equity-based compensation 31.2 16.4Non-cash equity-based compensation related to equity investment (2) 20.0 —Net loss on extinguishments of long-term debt 24.3 90.7Acquisition and integration expenses (3) 10.2 —Gain on remeasurement of equity investment (4) (98.1) —Other adjustments (5) 3.7 (0.3)Aggregate adjustment for income taxes (6) (64.8) (103.0)Non-GAAP net income (7) $503.5 $409.9(1)Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.(2)Represents our 35% share of an expense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to ouracquisition of CDW UK.(3)Comprised of expenses related to CDW UK.(4)Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisitionof CDW UK.(5)Primarily includes expenses related to the consolidation of office locations north of Chicago and secondary offering-related expenses.(6)Aggregate adjustment for income taxes consists of the following: Year Ended December 31, 2015 2014Total Non-GAAP adjustments 165.2 268.0Weighted-average statutory effective rate 38.0% 39.0%Income tax (62.8) (104.5)Deferred tax adjustment due to law changes (4.0) —Withholding tax expense on the unremitted earnings of our Canadian subsidiary 3.3 —Non-deductible adjustments and other (1.3) 1.5Total aggregate adjustment for income taxes $(64.8) $(103.0)(7)Includes the impact of consolidating five months of CDW UK’s financial results for the year ended December 31, 2015.Adjusted EBITDAAdjusted EBITDA was $1,019 million for the year ended December 31, 2015, an increase of $112 million, or 12.3%, compared to $907 million for theyear 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. Years Ended December 31, (in millions)2015 Percentage ofNet Sales 2014 Percentage of Net SalesNet income$403.1 $244.9 Depreciation and amortization227.4 207.9 Income tax expense243.9 142.8 Interest expense, net159.5 197.3 EBITDA1,033.9 8.0% 792.9 6.6% Adjustments: Non-cash equity-based compensation31.2 16.4 Net loss on extinguishments of long-term debt24.3 90.7 Loss (income) from equity investments (1)10.1 (2.2) Acquisition and integration expenses (2)10.2 — Gain on remeasurement of equity investment (3)(98.1) — Other adjustments (4)6.9 9.2 Total adjustments(15.4) 114.1 Adjusted EBITDA (5)$1,018.5 7.8% $907.0 7.5%(1)Represents our share of net (income) loss from our equity investments. Our share of CDW UK's net loss includes our 35% share of an expense related tocertain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to the acquisition.(2)Comprised of expenses related to CDW UK.(3)Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisitionof CDW UK.(4)Primarily includes certain historical retention costs, unusual, non-recurring litigation matters, secondary-offering-related expenses and expenses related tothe consolidation of office locations north of Chicago.(5)Includes the impact of consolidating five months for the year ended December 31, 2015 of CDW UK’s financial results.43 Table of ContentsOrganic Net sales growth and organic net sales growth on constant currency basisOrganic Net sales growth is calculated as net sales growth excluding the impact of acquisitions recorded within the last twelve months. Organic Net salesgrowth on a constant currency basis is calculated as Organic Net sales growth excluding the impact of foreign currency translation on Organic Net sales comparedto the prior period.Organic Net sales, which excludes the impact of the acquisition of CDW UK, increased $563.5 million, or 4.7%, to $12,638.0 million for the year endedDecember 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 theimpact 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 $12,003.0million for the year ended December 31, 2014. Years Ended December 31, (in millions) 2015 2014 % ChangeNet sales, as reported $12,988.7 $12,074.5 7.6%Impact of acquisition (1) (350.7) — Organic Net sales $12,638.0 $12,074.5 4.7%Foreign currency translation (2) — (71.5) Organic Net sales, on a constant currency basis $12,638.0 $12,003.0 5.3%(1)Represents five months for the year ended December 31, 2015 of CDW UK's financial results.(2)Represents the effect of translating the prior year results of our Canadian subsidiary at the average exchange rates applicable in the current year.SeasonalityWhile we have not historically experienced significant seasonality throughout the year, Net sales in our Corporate segment, which primarily serves privatesector business customers, are typically higher in the fourth quarter than in other quarters due to customers spending their remaining technology budget dollars atthe end of the year. Additionally, Net sales in our Public segment have historically been higher in the third quarter than in other quarters primarily due to thebuying patterns of the federal government and education customers.Liquidity and Capital ResourcesOverviewWe finance our operations and capital expenditures with internally generated cash from operations. We also have $716 million of availability forborrowings under our senior secured asset-based revolving credit facility and an additional £50 million ( $62 million as of December 31, 2016 ) under the CDWUK revolving credit facility. Our liquidity and borrowing plans are established to align with our financial and strategic planning processes and ensure we have thenecessary funding to meet our operating commitments, which primarily include the purchase of inventory, payroll and general expenses. We also take intoconsideration our overall capital allocation strategy, which includes investment for future growth, dividend payments, acquisitions and stock repurchases. Webelieve 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 impactour available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the successful execution of our business planand general economic conditions.Long-Term Debt ActivitiesOn August 17, 2016, we entered into a new seven-year $1,490 million aggregate principal amount senior secured term loan facility ("Term Loan"). TheTerm Loan was issued at a price that was 99.50% of par, which resulted in a discount of $7 million . Fees of $5 million were capitalized as deferred financing costsand are being amortized over the seven-year term on a straight-line basis. The Term Loan replaced the prior senior secured term loan facility that had anoutstanding aggregate principal amount of $1,490 million.On August 1, 2016, we entered into a new five-year £56 million ($69 million as of December 31, 2016) aggregate principal amount term loan facility("CDW UK Term Loan"). The CDW UK Term Loan replaced the prior senior secured term loan facility (the “Prior CDW UK Term Loan Facility”) that had anoutstanding aggregate principal amount of £56 million. In connection with this refinancing, the Prior CDW UK Term Loan Facility was amended to include boththe CDW UK Term Loan and a £50 million revolving credit facility ("CDW UK Revolving Credit Facility"). The CDW UK Revolving Credit Facility replaced theprior £50 million revolving credit facility and expires on August 1, 2021.Share Repurchase ProgramDuring 2016 , we repurchased 8.7 million shares of our common stock for $367 million under the previously announced $500 million share repurchaseprogram. On May 4, 2016, we announced that our Board of Directors authorized a $750 million44 Table of Contentsincrease to our share repurchase program under which we may repurchase shares of our common stock in the open market or through privately negotiated or othertransactions, depending on share price, market conditions and other factors. For more information on our share repurchase program, see Item 5, “Market forRegistrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”AcquisitionOn August 1, 2015, we completed the acquisition of CDW UK by purchasing the remaining 65% of its outstanding common stock which, increased ourownership interest from 35% to 100% and provided us control. For further details regarding the acquisition, see Note 3 (Acquisition) to the accompanyingConsolidated Financial Statements.DividendsA summary of 2016 dividend activity for our common stock is as follows:Dividend Amount Declaration Date Record Date Payment Date$0.1075 February 9, 2016 February 25, 2016 March 10, 2016$0.1075 May 4, 2016 May 25, 2016 June 10, 2016$0.1075 August 2, 2016 August 25, 2016 September 12, 2016$0.1600 November 1, 2016 November 25, 2016 December 12, 2016$0.4825 On February 7, 2017 , we announced that our Board of Directors declared a quarterly cash dividend on our common stock of $0.16 per share. Thedividend will be paid on March 10, 2017 to all stockholders of record as of the close of business on February 24, 2017 .The payment of any future dividends will be at the discretion of our Board of Directors and will depend upon our results of operations, financialcondition, business prospects, capital requirements, contractual restrictions, any potential indebtedness we may incur, restrictions imposed by applicable law, taxconsiderations and other factors that our Board of Directors deems relevant. In addition, our ability to pay dividends on our common stock will be limited byrestrictions 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 tous, in each case, under the terms of our current and any future agreements governing our indebtedness.Cash FlowsCash flows from operating, investing and financing activities are as follows: Years Ended December 31,(in millions)2016 2015 2014Net cash provided by (used in): Operating activities$604.0 $277.5 $435.0Investing activities(65.9) (354.4) (164.8) Net change in accounts payable - inventory financing143.6 95.9 75.5Other financing activities(448.2) (322.4) (187.5)Financing activities(304.6) (226.5) (112.0) Effect of exchange rate changes on cash and cash equivalents(7.4) (3.5) (1.8)Net increase (decrease) in cash and cash equivalents$226.1 $(306.9) $156.445 Table of ContentsOperating ActivitiesCash flows from operating activities are as follows: Years Ended December 31,(in millions)2016 2015 Dollar ChangeNet income$424.4 $403.1 $21.3Adjustments for the impact of non-cash items (1)202.9 150.3 52.6Net income adjusted for the impact of non-cash items (2)627.3 553.4 73.9Changes in assets and liabilities: Accounts receivable (3)(179.9) (342.6) 162.7Merchandise inventory(68.5) (31.5) (37.0)Accounts payable-trade (4)225.1 100.5 124.6Other— (2.3) 2.3Net cash provided by operating activities$604.0 $277.5 $326.5(1)Includes items such as Deferred income taxes, Depreciation and amortization, Equity-based compensation expense, Gain on remeasurement of equitymethod investment, Loss from equity method investment and net loss on extinguishments of long-term debt.(2)The change in cash flows reflected stronger operating results driven by Net sales growth and the impact of consolidating a full year of CDW UK financialresults in 2016, compared to five months in 2015.(3)The change in cash flows was primarily due to an increase in collections during 2016 due to the higher accounts receivable balance as of December 31,2015 driven by higher sales in our Public segment where customers generally take longer to pay than customers in our Corporate segment. In addition, thelower accounts receivable balances as of December 31, 2014, driven by early payments from certain customers, resulted in lower cash flows in the prioryear period.(4)The increase in cash flows was primarily due to the timing of inventory purchases and longer payment terms with certain vendors. Years Ended December 31,(in millions)2015 2014 Dollar ChangeNet income$403.1 $244.9 $158.2Adjustments for the impact of non-cash items (1)150.3 231.9 (81.6)Net income adjusted for the impact of non-cash items (2)553.4 476.8 76.6Changes in assets and liabilities: Accounts receivable (3)(342.6) (117.6) (225.0)Merchandise inventory (4)(31.5) 44.2 (75.7)Accounts payable-trade (5)100.5 43.7 56.8Other(2.3) (12.1) 9.8Net cash provided by operating activities$277.5 $435.0 $(157.5)(1)Includes items such as Deferred income taxes, Depreciation and amortization, Equity-based compensation expense, Gain on remeasurement of equitymethod investment, Loss (income) from equity method investment and net loss on extinguishments of long-term debt.(2)The increase in cash flows reflected stronger operating results driven by organic sales growth and the impact of consolidating five months of CDW UKfinancial results. A decrease in interest expense, partially offset by higher income tax expense, also contributed to the strong operating results.(3)The decrease in cash flows was driven by a higher accounts receivable balance at December 31, 2015 driven by higher sales in our Public segment wherecustomers generally take longer to pay than customers in our Corporate segment, slower government payments in certain states due to budget issues andthe lower accounts receivable balance at December 31, 2014 driven by early payments from certain customers.46 Table of Contents(4)The decrease in cash flows was primarily due to the lower inventory balance as of December 31, 2014 as a result of the timing of inventory receipts andearlier than expected inventory shipments at the end of 2014 due to accelerated customer roll-outs and an increase in inventory on-hand as of December31, 2015 to support the growth in the business.(5)The increase in cash flows was primarily due to the timing of inventory purchases, longer payment terms with certain vendors and growth in the business.In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle, defined as days of sales outstanding in accountsreceivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average. Components of ourcash conversion cycle are as follows: December 31,(in days)2016 2015 2014Days of sales outstanding (DSO) (1)51 48 42Days of supply in inventory (DIO) (2)12 13 13Days of purchases outstanding (DPO) (3)(44) (40) (34)Cash conversion cycle19 21 21(1)Represents the rolling three-month average of the balance of trade accounts receivable, net at the end of the period divided by average daily Net sales forthe same three-month period. Also incorporates components of other miscellaneous receivables.(2)Represents the rolling three-month average of the balance of Merchandise inventory at the end of the period divided by average daily cost of goods soldfor the same three-month period.(3)Represents the rolling three-month average of the combined balance of accounts payable-trade, excluding cash overdrafts, and accounts payable-inventoryfinancing at the end of the period divided by average daily cost of goods sold for the same three-month period.The cash conversion cycle was 19 and 21 days at December 31, 2016 and 2015 , respectively. The increase in DSO was primarily driven by higher Netsales and related Accounts receivable for third-party services such as SaaS, software assurance and warranties. These services have an unfavorable impact on DSOas 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 ofOperations 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 onDPO, DPO also increased due to the mix of payables with certain vendors that have longer payment terms.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 higherAccounts receivable balance at December 31, 2015 driven by higher Public segment sales where customers generally take longer to pay than customers in ourCorporate segment, slower government payments in certain states due to budget issues and an increase in Net sales and related Accounts receivable for third-partyservices such as software assurance and warranties. These services have an unfavorable impact on DSO as the receivable is recognized on the balance sheet on agross 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 thepayable 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-partyservice 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 withcertain vendors that have longer payment terms.Investing ActivitiesNet cash used in investing activities decreased $289 million in 2016 compared to 2015 . The decrease in cash used was primarily due to the completion ofthe acquisition of CDW UK in 2015. Additionally, capital expenditures decreased $26 million to $64 million from $90 million for 2016 and 2015 , respectively,primarily due to spending for our new office location in 2015.Net cash used in investing activities increased $190 million in 2015 compared to 2014. The increase was primarily due to the completion of theacquisition of CDW UK by purchasing the remaining 65% of its outstanding common stock on August 1, 2015. Additionally, capital expenditures increased $35million to $90 million from $55 million for 2015 and 2014, respectively, primarily for our new office location and an increase in spending related to improvementsto our information technology systems.47 Table of ContentsFinancing ActivitiesNet cash used in financing activities increased $78 million in 2016 compared to 2015 . The increase was primarily driven by higher share repurchasesduring the year ended December 31, 2016 which resulted in an increase in cash used for financing activities of $126 million . The increase was partially offset bythe changes in accounts payable-inventory financing, which resulted in an increase in cash provided for financing activities of $48 million . The increase in cashprovided by accounts payable-inventory financing was primarily due to a new vendor added to our previously existing inventory financing agreement. For adescription of the inventory financing transactions impacting each period, see Note 6 (Inventory Financing Agreements) to the accompanying ConsolidatedFinancial Statements. For more information on our share repurchase program, see Item 5, “Market for Registrant’s Common Equity, Related Stockholder Mattersand Issuer Purchases of Equity Securities.”Net cash used in financing activities increased $115 million in 2015 compared to 2014. The increase was primarily driven by share repurchases during theyear ended December 31, 2015 which resulted in an increase in cash used for financing activities of $241 million. For more information on our share repurchaseprogram, see Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.” The increase was partiallyoffset by the changes in accounts payable-inventory financing, which resulted in an increase in cash provided for financing activities of $20 million, and the netimpact of our debt transactions which resulted in cash outflows of $7 million and $146 million during the years 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 financingagreement. 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 ArrangementsAs of December 31, 2016 , we had total indebtedness of $3.2 billion , of which $1.6 billion was secured indebtedness. At December 31, 2016 , we were incompliance with the covenants under our various credit agreements and indentures. The amount of CDW’s restricted payment capacity under the Senior SecuredTerm Loan Facility was $892 million at December 31, 2016 . The amount of restricted payment capacity for the CDW UK Term Loan was $131 million .For additional details regarding our debt and refinancing activities, refer to Note 8 (Long-Term Debt) to the accompanying Consolidated FinancialStatements.Inventory Financing AgreementsWe have entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain termsand conditions. These amounts are classified separately as accounts payable-inventory financing on the Consolidated Balance Sheets. We do not incur any interestexpense associated with these agreements as balances are paid when they are due. For further details, see Note 6 (Inventory Financing Agreements) to theaccompanying Consolidated Financial Statements.Contractual ObligationsWe have future obligations under various contracts relating to debt and interest payments, operating leases and asset retirement obligations. Our estimatedfuture payments, based on undiscounted amounts, under contractual obligations that existed as of December 31, 2016 , are as follows: Payments Due by Period(in millions) Total < 1 year 1-3 years 4-5 years > 5 yearsTerm Loan (1) $1,792.3 $62.9 $185.8 $121.5 $1,422.1CDW UK Term Loan (1) 74.0 1.2 21.7 51.1 —Senior Notes due 2022 (2) 816.0 36.0 108.0 672.0 —Senior Notes due 2023 (2) 708.8 26.3 78.8 52.5 551.2Senior Notes due 2024 (2) 828.0 31.6 94.9 63.3 638.2Operating leases (3) 22.6 4.9 12.1 5.6 —Asset retirement obligations (4) 0.9 — 0.3 0.2 0.4Total $4,242.6 $162.9 $501.6 $966.2 $2,611.9(1)Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest payments for variable rate debtwere calculated using interest rates as of December 31, 2016 . Excluded from these amounts are the amortization of debt issuance and other costs relatedto indebtedness.48 Table of Contents(2)Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest on the Senior Notes is calculatedusing the stated interest rates. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness.(3)Includes the minimum lease payments for non-cancelable operating leases of properties and equipment used in our operations. Capital leases included inproperty and equipment are not material.(4)Represent commitments to return property subject to operating leases to original condition upon lease termination.Off-Balance Sheet ArrangementsWe 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.InflationInflation has not had a material impact on our operating results. We generally have been able to pass along price increases to our customers, thoughcertain economic factors and technological advances in recent years have tended to place downward pressure on pricing. We also have been able to generally offsetthe effects of inflation on operating costs by continuing to emphasize productivity improvements and by accelerating our overall cash conversion cycle. There canbe no assurances, however, that inflation would not have a material impact on our sales or operating costs in the future.Commitments and ContingenciesThe information set forth in Note 14 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements included in Part II, Item8 of this Form 10-K is incorporated herein by reference.Critical Accounting Policies and EstimatesThe preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make use of certain estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated FinancialStatements and the reported amounts of revenue and expenses during the reported periods. We base our estimates on historical experience and on various otherassumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets andliabilities that are not readily apparent from other sources. These estimates have not historically required significant management judgment. Our actual results havenot differed materially from our estimates, nor have we historically made significant changes to the methods for determining these estimates. We do not believe itis reasonably likely that the estimates and related assumptions will change materially in the foreseeable future however actual results could differ from thoseestimates.In Note 1 (Description of Business and Summary of Significant Accounting Policies) to the accompanying Consolidated Financial Statements, we includea discussion of the significant accounting policies used in the preparation of our Consolidated Financial Statements. We believe the following are the most criticalaccounting policies and estimates that include significant judgments used in the preparation of the Consolidated Financial Statements. We consider an accountingpolicy 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 couldhave a material impact on our financial condition or results of operations.Revenue RecognitionWe are a primary distribution channel for a large group of vendors and suppliers, including OEMs, software publishers and wholesale distributors. Werecord 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 hasoccurred and/or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. Our shipping terms typically specifyF.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 thecustomer 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.49 Table of ContentsWe leverage drop-shipment arrangements with many of our vendors and suppliers to deliver products to our customers without having to physically holdthe inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-shipment arrangements on a gross basis upondelivery 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 transactionbecause 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 chargedto 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, which includes approximately 20% to 30% related to electronic delivery forsoftware licenses.Revenue from professional services is recognized in either of two ways: services as an hourly rate (recognized using a percentage of completion model) ora fixed fee (recognized using a proportional performance model for the fixed fee). Revenues for cloud computing solutions including SaaS and IaaS arrangementswith one time invoicing to the customer are recognized at the time of invoice. Revenues for data center services such as managed and remote managed services,server co-location, internet connectivity, data backup and storage, and SaaS and IaaS arrangements where the customer is invoiced over time are recognized overthe 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 newapplications 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 anet 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 inNet 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 thecustomer 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 isno 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 natureof 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 acombination of the products and services. For each deliverable that represents a separate unit of accounting, total arrangement consideration is allocated based uponthe 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 ifother 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 ofcommercial 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 ofthe 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 differentnumber of business days used in making this adjustment and could have a material impact on our revenue recognition for the period.Vendor ProgramsWe receive incentives from certain of our vendors related to cooperative advertising allowances, volume rebates, bid programs, price protection and otherprograms. These incentives generally relate to written agreements with specified performance requirements with the vendors and are recorded as adjustments tocost 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 impacton our results of operations.We record receivables from vendors related to these programs when the amounts are probable and reasonably estimable. Some programs are based on theachievement of specific targets, and we base our estimates on information provided by our vendors and internal information to assess our progress towardachieving those targets. If actual performance does not match our estimates, we may be required to adjust our receivables. We record reserves for vendorreceivables for estimated losses due to vendors’50 Table of Contentsinability to pay or rejections by vendors of claims; however, if actual collections differ from our estimates, we may incur additional losses that could have amaterial impact on Gross profit and Income from operations.GoodwillGoodwill is not amortized but is subject to periodic testing for impairment at the reporting unit level. We perform an evaluation of goodwill, utilizingeither a quantitative or qualitative impairment test, on an annual basis, or more frequently if circumstances indicate a potential impairment. The annual test forimpairment is conducted as of December 1. Our reporting units used to assess potential goodwill impairment are the same as our 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 itscarrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of reportingunit 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 aweighted combination of an income approach (75%) and a market approach (25%), as this combination is considered the most indicative of our fair value in anorderly 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. Theestimated future cash flows of each reporting unit are based on internally generated forecasts for the remainder of the respective reporting period and the next tenyears. We use a range of 2.0-3.5% long-term assumed consolidated annual Net sales growth rate for periods after the ten-year forecast.Under the market approach, we utilize valuation multiples derived from publicly available information for guideline companies to provide an indication ofhow 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 salesgrowth rates, gross margins, operating margins, discount rates and future market conditions, among others. Any changes in the judgments, estimates orassumptions 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 reportingunit’s fair value is less than its carrying value. As part of this qualitative assessment, we assess relevant events and circumstances including macroeconomicconditions, industry and market conditions, cost factors, overall financial performance, changes in share price and entity-specific events.December 1, 2016 Impairment AnalysisWe completed our annual impairment analysis as of December 1, 2016 . For the Corporate, Public and Canada reporting units, we performed a qualitativeanalysis. We determined that it was more-likely-than-not that the individual fair values of the Corporate, Public and Canada reporting units exceeded the individualcarrying values. As a result of this determination, the quantitative two-step impairment analysis was deemed unnecessary. Due to the substantial uncertaintyregarding the impact of the Referendum on the United Kingdom’s (“UK”) Membership of the European Union (“EU”) advising for the exit of the UK fromEurope, we performed a quantitative analysis of the CDW UK reporting unit. Based on the results of the quantitative analysis, we determined that the fair value ofthe CDW UK reporting unit exceeded its carrying value by 16% and no impairment existed. We identified that the most sensitive assumptions used in thequantitative analysis were Net sales growth and EBITDA margin and, although we believe our assumptions are reasonable based on current market conditions,actual results may vary significantly and could expose us to impairment charges in the future.December 1, 2015 Impairment AnalysisWe completed our annual impairment analysis as of December 1, 2015 by utilizing a qualitative assessment for all reporting units. We determined that itwas 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-stepimpairment analysis was deemed unnecessary.Intangible assetsIntangible assets include customer relationships, trade names, internally developed software and other intangibles. Intangible assets with finite lives areamortized 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 andamortized on a straight-line basis over the estimated useful life. These intangible assets are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows51 Table of Contentsresulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, animpairment loss is recorded for the excess of the asset’s carrying amount over its fair value. In addition, each quarter, we evaluate whether events andcircumstances 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 remainingestimated useful life of an intangible asset was necessary, then the remaining carrying amount of the intangible asset would be amortized prospectively over thatrevised remaining useful life.During the years ended December 31, 2016 and 2015, we concluded our intangible assets with finite lives were not impaired and no changes to theremaining useful lives were necessary.Income TaxesDeferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the ConsolidatedFinancial 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 ofour deferred tax assets on a quarterly basis. This evaluation requires us to use estimates and make assumptions and considers all positive and negative evidence andfactors, such as the scheduled reversal of temporary differences, the mix of earnings in the jurisdictions in which we operate, and prudent and feasible tax planningstrategies.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 bytax authorities. We report a liability for unrecognized tax benefits resulting from unrecognized tax benefits taken or expected to be taken in a tax return andrecognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense.Recent Accounting PronouncementsThe 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 EventsThe information set forth in Note 19 (Subsequent Events) to the accompanying Consolidated Financial Statements included in Part II, Item 8 of this Form10-K is incorporated herein by reference.52 Table of ContentsItem 7A. Quantitative and Qualitative Disclosures of Market RisksInterest Rate RiskOur market risks relate primarily to changes in interest rates. The interest rates on borrowings under our senior secured asset-based revolving creditfacility, our senior secured term loan facility and the CDW UK term loan are floating and, therefore, are subject to fluctuations. In order to manage the riskassociated 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 interestexpense and to manage our exposure to interest rate fluctuations.As of December 31, 2016 , we have interest rate cap agreements in effect through January 14, 2017 with a combined notional amount of $1,400.0, millionwhich entitle us to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds 2.0% during the agreement period.In connection with the expiration of the interest rate cap agreements noted above in the first quarter of 2017, during the year ended December 31, 2016 weentered into new additional interest rate cap agreements in effect through December 31, 2018 with a combined notional amount of $1,400.0 million, which entitleus to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds 1.5% during the agreement period. For additional details, seeNote 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 - ContractualObligations” for information on cash flows, interest rates and maturity dates of our debt obligations.Foreign Currency RiskWe transact business in foreign currencies other than the US dollar, primarily the Canadian dollar and the British pound, which exposes us to foreigncurrency exchange rate fluctuations. Revenue and expenses generated from our international operations are generally denominated in the local currencies of thecorresponding countries. The functional currency of our international operating subsidiaries is the same as the corresponding local currency. Upon consolidation, asresults of operations are translated, operating results may differ from expectations. The direct effect of foreign currency fluctuations on our results of operations hasnot been material as the majority of our results of operations are denominated in US dollars.53 Table of ContentsItem 8. Financial Statements and Supplementary DataIndex to Consolidated Financial Statements PageReport of Independent Registered Public Accounting Firm55Consolidated Balance Sheets as of December 31, 2016 and 201556Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 201457Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 201458Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2016, 2015 and 201459Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 201460Notes to Consolidated Financial Statements6154 Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders of CDW Corporation and subsidiariesWe have audited the accompanying consolidated balance sheets of CDW Corporation and subsidiaries as of December 31, 2016 and 2015, and the relatedconsolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31,2016. Our audits also included the financial statement schedule listed in the Index at Item 15 (a) (2). These financial statements and schedule are the responsibilityof 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 weplan 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 andsignificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basisfor our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of CDW Corporation andsubsidiaries at December 31, 2016 and 2015, and the consolidated results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, whenconsidered 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, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committeeof Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2017 expressed an unqualified opinion thereon./s/ Ernst & Young LLPChicago, IllinoisFebruary 28, 201755 Table of ContentsCDW CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in millions, except per-share amounts) December 31, 2016 2015Assets Current assets: Cash and cash equivalents$263.7 $37.6Accounts receivable, net of allowance for doubtful accounts of $5.9 and $6.0, respectively2,168.6 2,017.4Merchandise inventory452.0 393.1Miscellaneous receivables234.9 198.4Prepaid expenses and other118.9 144.3Total current assets3,238.1 2,790.8Property and equipment, net163.7 175.4Goodwill2,455.0 2,500.4Other intangible assets, net1,055.6 1,276.4Other assets36.0 12.3Total Assets$6,948.4 $6,755.3Liabilities and Stockholders’ Equity Current liabilities: Accounts payable-trade$1,072.9 $866.5Accounts payable-inventory financing580.4 439.6Current maturities of long-term debt18.5 27.2Deferred revenue172.6 151.9Accrued expenses: Compensation167.6 120.4Interest25.1 25.1Sales taxes38.0 38.1Advertising55.8 52.3Other149.8 166.2Total current liabilities2,280.7 1,887.3Long-term liabilities: Debt3,215.9 3,232.5Deferred income taxes369.2 469.6Other liabilities37.1 70.0Total long-term liabilities3,622.2 3,772.1Commitments and contingencies (Note 14) Stockholders’ equity: Preferred stock, $0.01 par value, 100.0 shares authorized; no shares issued or outstanding for both periods— —Common stock, $0.01 par value, 1,000.0 shares authorized; 160.3 and 168.2 shares issued and outstanding, respectively1.6 1.7Paid-in capital2,857.3 2,806.9Accumulated deficit(1,673.8) (1,651.6)Accumulated other comprehensive loss(139.6) (61.1)Total stockholders’ equity1,045.5 1,095.9Total Liabilities and Stockholders’ Equity$6,948.4 $6,755.3The accompanying notes are an integral part of the Consolidated Financial Statements.56 Table of ContentsCDW CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(in millions, except per-share amounts) Years Ended December 31, 2016 2015 2014Net sales$13,981.9 $12,988.7 $12,074.5Cost of sales11,654.7 10,872.9 10,153.2Gross profit2,327.2 2,115.8 1,921.3Selling and administrative expenses1,345.1 1,226.0 1,110.3Advertising expense162.9 147.8 138.0Income from operations819.2 742.0 673.0Interest expense, net(146.5) (159.5) (197.3)Net loss on extinguishments of long-term debt(2.1) (24.3) (90.7)Gain on remeasurement of equity investment— 98.1 —Other income (expense), net1.8 (9.3) 2.7Income before income taxes672.4 647.0 387.7Income tax expense(248.0) (243.9) (142.8)Net income$424.4 $403.1 $244.9 Net income per common share: Basic$2.59 $2.37 $1.44Diluted$2.56 $2.35 $1.42 Weighted-average common shares outstanding: Basic163.6 170.3 170.6Diluted166.0 171.8 172.8 Cash dividends declared per common share$0.4825 $0.3100 $0.1950The accompanying notes are an integral part of the Consolidated Financial Statements.57 Table of ContentsCDW CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in millions) Years Ended December 31, 2016 2015 2014Net income $424.4 $403.1 $244.9Foreign currency translation (net of tax (expense) benefit of ($0.2) million, ($0.3) million and $0.5million, respectively) (78.5) (44.5) (10.3)Other comprehensive loss, net of tax (78.5) (44.5) (10.3)Comprehensive income $345.9 $358.6 $234.6The accompanying notes are an integral part of the Consolidated Financial Statements.58 Table of ContentsCDW CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY(in millions) Preferred Stock Common Stock Shares Amount Shares Amount Paid-inCapital AccumulatedDeficit AccumulatedOtherComprehensive (Loss)Income Total Stockholders’EquityBalance at December 31, 2013 — $— 172.0 $1.7 $2,688.1 $(1,971.8) $(6.3) $711.7Equity-based compensation expense — — — — 16.4 — — 16.4Stock option exercises — — — — 1.3 — — 1.3Excess tax benefits from equity-based compensation — — — — 0.3 — — 0.3Coworker stock purchase plan — — 0.2 — 5.8 — — 5.8Dividends paid — — — — — (33.6) — (33.6)Net income — — — — — 244.9 — 244.9Foreign currency translation — — — — — — (10.3) (10.3)Balance at December 31, 2014 — $— 172.2 $1.7 $2,711.9 $(1,760.5) $(16.6) $936.5Equity-based compensation expense — — — — 28.3 — — 28.3Stock option exercises — — 0.1 — 2.4 — — 2.4Common stock issued for equity-based compensation — — 0.3 — — — — —Excess tax benefits from equity-based compensation — — — — 0.6 — — 0.6Coworker stock purchase plan — — 0.3 — 8.7 — — 8.7Common stock issued for acquisition of business — — 1.6 — 55.0 — — 55.0Dividends paid — — — — — (52.9) — (52.9)Net income — — — — — 403.1 — 403.1Repurchases of common stock — — (6.3) — — (241.3) — (241.3)Foreign currency translation — — — — — — (44.5) (44.5)Balance at December 31, 2015 — $— 168.2$1.7$2,806.9$(1,651.6)$(61.1)$1,095.9Equity-based compensation expense — — — — 33.2 — — 33.2Stock option exercises — — 0.4 — 7.4 — — 7.4Common stock issued for equity-based compensation — — 0.2 — — — — —Coworker Stock Purchase Plan — — 0.2 — 9.3 — — 9.3Dividends paid — — — — 0.5 (79.2) — (78.7)Net income — — — — — 424.4 — 424.4Repurchases of common stock — — (8.7) (0.1) — (367.4) — (367.5)Foreign currency translation — — — — — — (78.5) (78.5)Balance as of December 31, 2016 — $— 160.3 $1.6 $2,857.3 $(1,673.8) $(139.6) $1,045.5The accompanying notes are an integral part of the Consolidated Financial Statements.59 Table of ContentsCDW CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in millions) Years Ended December 31, 2016 2015 2014Cash flows from operating activities: Net income$424.4 $403.1 $244.9Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization254.5 227.4 207.9Equity-based compensation expense39.2 31.2 16.4Deferred income taxes(97.2) (54.5) (89.1)Amortization of deferred financing costs, debt premium and debt discount, net6.5 6.4 6.4Net loss on extinguishments of long-term debt2.1 24.3 90.7Loss (income) from equity investments— 11.2 (1.2)Gain on remeasurement of equity investment— (98.1) —Mark-to-market (gain) loss on interest rate cap agreements(2.6) 2.1 0.4Other0.4 0.3 0.4Changes in assets and liabilities: Accounts receivable(179.9) (342.6) (117.6)Merchandise inventory(68.5) (31.5) 44.2Other assets(50.1) (71.2) (18.7)Accounts payable-trade225.1 100.5 43.7Other current liabilities80.2 47.5 1.7Long-term liabilities(30.1) 21.4 4.9Net cash provided by operating activities604.0 277.5 435.0Cash flows from investing activities: Capital expenditures(63.5) (90.1) (55.0)Payment for equity investment— — (86.8)Payment of accrued charitable contribution related to the MPK Coworker Incentive Plan II— — (20.9)Premium payments on interest rate cap agreements(2.4) (0.5) (2.1)Acquisition of business, net of cash acquired— (263.8) —Net cash used in investing activities(65.9) (354.4) (164.8)Cash flows from financing activities: Proceeds from borrowings under revolving credit facility338.8 314.5 —Repayments of borrowings under revolving credit facility(338.8) (314.5) —Repayments of long-term debt(20.6) (32.8) (15.4)Proceeds from issuance of long-term debt1,483.0 525.0 1,175.0Payments to extinguish long-term debt(1,490.4) (525.3) (1,299.0)Net change in other long-term obligation15.7 — —Payments of debt financing costs(5.9) (6.8) (21.9)Net change in accounts payable-inventory financing143.6 95.9 75.5Proceeds from stock option exercises7.4 2.4 1.3Proceeds from Coworker Stock Purchase Plan9.3 8.7 5.8Repurchases of common stock(367.4) (241.3) —Dividends paid(78.7) (52.9) (33.6)Excess tax benefits from equity-based compensation— 0.6 0.3Principal payments under capital lease obligations(0.6) — —Net cash used in financing activities(304.6) (226.5) (112.0)Effect of exchange rate changes on cash and cash equivalents(7.4) (3.5) (1.8)Net increase (decrease) in cash and cash equivalents226.1 (306.9) 156.4Cash and cash equivalents – beginning of period37.6 344.5 188.1Cash and cash equivalents – end of period$263.7 $37.6 $344.5Supplementary disclosure of cash flow information: Interest paid$(144.3) $(154.6) $(195.8) Taxes paid, net$(329.2) $(300.2) $(241.2) The accompanying notes are an integral part of the Consolidated Financial Statements.60 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1.Description of Business and Summary of Significant Accounting PoliciesDescription of BusinessCDW Corporation (“Parent”) is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions to small, mediumand large business, government, education and healthcare customers in North America and the United Kingdom. The Company’s offerings range fromdiscrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization andcollaboration.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, togetherwith its 100% owned subsidiaries, holds all material assets and conducts all business activities and operations of the Company. CDW Finance Corporationis a Delaware corporation formed for the sole purpose of acting as co-issuer of certain debt obligations as described in Note 17 (Supplemental GuarantorInformation) 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”), a UK-based IT solutions provider with globalofferings by purchasing the remaining 65% of its outstanding common stock, which increased the Company’s ownership interest from 35% to 100% andprovided the Company control. In 2016 Kelway was rebranded CDW UK. For further information regarding the acquisition, see Note 3 (Acquisition) tothe accompanying Consolidated Financial Statements.Basis of PresentationThe 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 US Securities and Exchange Commission (“SEC”).Principles of ConsolidationThe Consolidated Financial Statements include the accounts of Parent and its 100% owned subsidiaries. All intercompany transactions and accounts areeliminated in consolidation.Use of EstimatesThe preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make use of certain estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the ConsolidatedFinancial Statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historicalexperience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis formaking judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from thoseestimates.Business CombinationsThe Company accounts for all business combinations using the acquisition method of accounting, which allocates the fair value of the purchaseconsideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquiredand liabilities assumed, management makes significant estimates and assumptions. The Company may utilize third-party valuation specialists to assist theCompany in the allocation. Initial purchase price allocations are subject to revision within the measurement period, not to exceed one year from the dateof acquisition. Acquisition-related expenses and transaction costs associated with business combinations are expensed as incurred.Cash and Cash EquivalentsCash and cash equivalents include all deposits in banks and short-term (original maturities of three months or less at the time of purchase), highly liquidinvestments that are readily convertible to known amounts of cash and are so near maturity that there is insignificant risk of changes in value due tointerest rate changes.61 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSAccounts ReceivableTrade accounts receivable are recorded at the invoiced amount and typically do not bear interest. The Company provides allowances for doubtful accountsrelated to accounts receivable for estimated losses resulting from the inability of its customers to make required payments. The Company takes intoconsideration the overall quality of the receivable portfolio along with specifically-identified customer risks in establishing the allowance.Merchandise InventoryInventory is valued at the lower of cost or market value. Cost is determined using a weighted-average cost method. Price protection is recorded whenearned as a reduction to the cost of inventory. The Company decreases the value of inventory for estimated obsolescence equal to the difference betweenthe 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 ReceivablesMiscellaneous receivables generally consist of amounts due from vendors. The Company receives incentives from vendors related to cooperativeadvertising, volume rebates, bid programs, price protection and other programs. These incentives generally relate to written vendor agreements withspecified performance requirements and are recorded as adjustments to Cost of sales or Merchandise inventory, depending on the nature of the incentive.Property and EquipmentProperty and equipment are stated at cost, less accumulated depreciation. The Company calculates depreciation expense using the straight-line methodover the estimated useful lives of the assets. Property and equipment are reviewed annually to determine whether there is any impairment. Determinationof recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carryingamount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount overits fair value. Leasehold improvements are amortized over the shorter of their estimated useful lives or the initial lease term. Expenditures for majorrenewals and improvements that extend the useful life of property and equipment are capitalized. Expenditures for maintenance and repairs are charged toexpense as incurred. The estimated useful lives of property and equipment are as follows:ClassificationEstimated Useful LivesMachinery and equipment5 to 10 yearsBuilding and leasehold improvements4 to 25 yearsComputer and data processing equipment3 to 5 yearsComputer software3 to 5 yearsFurniture and fixtures4 to 10 yearsThe Company has asset retirement obligations associated with commitments to return property subject to the terms of operating leases to its originalcondition upon lease termination. The Company’s asset retirement liability was less than $1 million and $2 million at December 31, 2016 and 2015 ,respectively.Equity InvestmentsIf 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 arecarried 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 andadjustments for basis differences. The Company’s share of the income or loss of equity method investees is included in Other income (expense), net in theConsolidated Statements of Operations.GoodwillThe Company performs an evaluation of goodwill, utilizing either a quantitative or qualitative impairment test, on an annual basis, or more frequently ifcircumstances indicate a potential impairment. The annual test for impairment is62 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSconducted 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 itscarrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value ofreporting unit goodwill with the carrying amount of that goodwill to determine the amount of impairment loss. Fair value of a reporting unit is determinedby using a weighted combination of an income approach ( 75% ) and a market approach ( 25% ), as this combination is considered the most indicative ofthe 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 estimatedweighted-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 expectto earn. The estimated future cash flows of each reporting unit is based on internally generated forecasts for the remainder of the respective reportingperiod and the next ten years. The Company uses a range of 2.0% - 3.5% long-term assumed consolidated annual Net sales growth rate for periods afterthe ten -year forecast.Under the market approach, the Company utilizes valuation multiples derived from publicly available information for guideline companies to provide anindication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. The valuation multiples are applied to thereporting units.Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including Net salesgrowth rates, gross margins, operating margins, discount rates and future market conditions, among others. Any changes in the judgments, estimates orassumptions 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 reportingunit’s goodwill is impaired. As part of this qualitative assessment, the Company assesses relevant events and circumstances including macroeconomicconditions, industry and market conditions, cost factors, overall financial performance, changes in share price and entity-specific events.Intangible AssetsIntangible assets with determinable lives are amortized on a straight-line basis over their respective estimated useful lives. The cost of computer softwaredeveloped or obtained for internal use is capitalized and amortized on a straight-line basis over the estimated useful life of the software. Intangible assetsare 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’scarrying amount over its fair value. In addition, each quarter, the Company evaluates whether events and circumstances warrant a revision to theremaining estimated useful life of each of these intangible assets. If the Company were to determine that a change to the remaining estimated useful life ofan intangible asset was necessary, then the remaining carrying amount of the intangible asset would be amortized prospectively over that revisedremaining useful life.The following table shows estimated useful lives of definite-lived intangible assets:ClassificationEstimated Useful LivesCustomer relationships and contracts3 to 14 yearsTrade namegenerally 20 yearsInternally developed software2 to 5 yearsOther1 to 10 yearsDeferred Financing CostsDeferred financing costs, such as underwriting, financial advisory, professional fees and other similar fees are capitalized and recognized in Interestexpense, net over the estimated life of the related debt instrument using the effective interest method or straight-line method, as applicable. The Companyclassifies deferred financing costs as a direct deduction from the carrying value of the long-term debt liability on the Consolidated Balance Sheets, exceptfor deferred financing63 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTScosts associated with line-of-credit arrangements which are presented as an asset, within “Other assets” on the Consolidated Balance Sheets.DerivativesThe Company has entered into interest rate cap agreements for the purpose of economically hedging its exposure to fluctuations in interest rates. Thesederivatives are recorded at fair value on 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 arerecorded directly to Interest expense, net in the Consolidated Statements of Operations.Fair Value MeasurementsFair 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 marketparticipants at the measurement date. A fair value hierarchy has been established for valuation inputs to prioritize the inputs into three levels based on theextent 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 whichis 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 arenot active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observablemarket 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 theasset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow modelsand similar techniques.Accumulated Other Comprehensive LossForeign currency translation adjustments are included in Stockholders’ equity under Accumulated other comprehensive loss.The components of accumulated other comprehensive loss are as follows: Years Ended December 31,(in millions) 2016 2015 2014Foreign currency translation $(139.6) $(61.1) $(16.6)Accumulated other comprehensive loss $(139.6) $(61.1) $(16.6)Revenue RecognitionThe 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 thecustomer, there is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is fixed ordeterminable, and collectability is reasonably assured. The Company’s shipping terms typically specify F.O.B. destination, at which time title and risk ofloss have passed to the customer.Revenues from the sales of hardware products and software licenses are generally recognized on a gross basis with the selling price to the customerrecorded 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 deliveryfor software licenses. At the time of sale, the Company records an estimate for sales returns and allowances based on historical experience. TheCompany’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 tophysically hold the inventory at its warehouses, thereby increasing efficiency and reducing64 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTScosts. The Company recognizes revenue for drop-shipment arrangements on a gross basis upon delivery to the customer with contract terms that typicallyspecify 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 completionmodel for fixed fee project work or recognized using a proportional performance model for services provided at a fixed fee. Revenues for cloudcomputing solutions including Software as a Service (“SaaS”) and Infrastructure as a Service (“IaaS”) arrangements with one time invoicing to thecustomer are recognized at the time of invoice. Revenues for data center services such as managed and remote managed services, server co-location,internet connectivity, data backup and storage, and SaaS and IaaS arrangements where the customer is invoiced over time are recognized over the periodservice 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, tothe 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 salesrecognition, 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 serviceprovider 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 theiremployee 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 vendorswill transfer the license and bill the customer directly, paying resellers such as the Company an agency fee or commission on these sales. The Companyrecords 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 thecustomer directly under an EA and accounts for the individual items sold based on the nature of the item. The Company’s vendors typically dictate howthe 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 acombination of products and services. For each deliverable that represents a separate unit of accounting, total arrangement consideration is allocated basedupon the relative selling prices of each element. The allocated arrangement consideration is recognized as revenue in accordance with the principlesdescribed above. Relative selling prices are determined by using vendor specific objective evidence (“VSOE”) if it exists. Otherwise, selling prices aredetermined 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 ifother 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-averageanalysis of commercial delivery terms that includes drop-shipment arrangements. This analysis is the basis upon which the Company estimates theamount 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 theCompany’s revenue recognition for the period.Sales TaxesSales tax amounts collected from customers for remittance to governmental authorities are presented on a net basis in the Consolidated Statements ofOperations.AdvertisingAdvertising costs are generally charged to expense in the period incurred. Cooperative reimbursements from vendors are recorded in the period the relatedadvertising expenditure is incurred. The Company classifies vendor consideration as a reduction to Cost of sales.65 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSEquity-Based CompensationThe Company measures all equity-based payments using a fair-value-based method and records compensation expense over the requisite service periodusing the straight-line method in its Consolidated Financial Statements. Estimated forfeiture rates have been developed based upon historical experience.Interest ExpenseInterest expense is recognized in the period incurred at the applicable interest rate in effect.Foreign Currency TranslationThe Company’s functional currency is the US dollar. The functional currency of the Company’s international operating subsidiaries is generally the sameas the corresponding local currency. Assets and liabilities of the international operating subsidiaries are translated at the spot rate in effect at theapplicable reporting date. Revenues and expenses of the international operating subsidiaries are translated at the average exchange rates in effect duringthe applicable period. The resulting foreign currency translation adjustment is recorded as Accumulated other comprehensive loss, which is reflected as aseparate component of Stockholders’ equity.Income TaxesDeferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the ConsolidatedFinancial Statements using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company performs an evaluationof the realizability of deferred tax assets on a quarterly basis. This evaluation requires management to make use of estimates and assumptions andconsiders all positive and negative evidence and factors, such as the scheduled reversal of temporary differences, the mix of earnings in the jurisdictions inwhich 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 uponexamination by tax authorities. The Company reports a liability for unrecognized tax benefits resulting from unrecognized tax benefits taken or expectedto be taken in a tax return and recognizes interest and penalties, if any, related to its unrecognized tax benefits in income tax expense.2.Recent Accounting PronouncementsClassification of Certain Cash Receipts and Cash PaymentsIn August 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-15, Classification ofCertain Cash Receipts and Cash Payments (Topic 230), providing guidance for eight specific cash flow issues with the objective of reducing the existingdiversity in practice. This ASU 2016-15 is effective for the Company beginning in the first quarter of 2018 and allows for early adoption. The Company iscurrently evaluating the impact the ASU will have on its Consolidated Financial Statements.Measurement of Credit Losses on Financial InstrumentsIn June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.This ASU introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments,including trade receivables. The estimate of expected credit losses will require considerations of historical information, current information andreasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand theassumptions, models and methods for estimating expected credit losses. This ASU is effective for the Company beginning in the first quarter of 2020 andallows for early adoption beginning in the first quarter of 2019. The Company is currently evaluating the impact the ASU will have on its ConsolidatedFinancial Statements.Improvements to Employee Share-Based Payment AccountingIn March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based PaymentAccounting, requiring the recognition of the excess tax benefits of stock awards in the provision for income taxes in the income statement when theawards are settled and allowing the Company to repurchase more of an employee's shares for tax withholding purposes than allowed under currentguidance, without triggering liability accounting. This ASU also addresses simplifications related to statement of cash flows classification and66 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSaccounting for forfeitures. This ASU is effective for the Company beginning in the first quarter of 2017 and allows for early adoption. The Companyelected to early adopt ASU 2016-09 in the third quarter of 2016, requiring the Company to reflect any adjustments as of January 1, 2016, the beginning ofthe annual period that includes the interim period of adoption. As a result of the adoption of this ASU, the Company recorded a $2 million tax benefit inits Consolidated Financial Statements for the year ended December 31, 2016.Accounting for LeasesIn February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring lessees to recognize assets and liabilities on the balance sheet for therights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. ThisASU is effective for the Company beginning in the first quarter of 2019 and allows for early adoption. Although the Company is currently evaluating theprovisions of the ASU to determine how it will be affected, the primary impact of the new ASU will be to record assets and liabilities for current operatingleases.Balance Sheet Classification of Deferred TaxesIn November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, simplifying thepresentation of deferred income taxes by requiring all deferred taxes to be presented as noncurrent in the balance sheet. In the first quarter of 2016, theCompany elected to early adopt ASU 2015-17 on a prospective basis. The adoption of this ASU did not have a material impact on the Company'sConsolidated Financial Statements.Simplifying the Measurement of InventoryIn July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, amending the subsequent measurementof 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 iseffective for the Company beginning in the first quarter of 2017, allows for early adoption and must be applied prospectively after the date of adoption.The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.Revenue RecognitionIn May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which, along with amendments issued in 2015 and2016, will replace most existing revenue recognition guidance under GAAP and eliminate industry specific guidance. The core principle of the newguidance 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 thosegoods and services. The ASU, as amended, will be effective for the Company beginning in the first quarter of 2018, and allows for early adoption in thefirst quarter of 2017. The new guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospectivemethod), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method).The Company has established a cross-functional implementation. The Company utilized a bottom-up approach to analyze the impact of the standard on itscontract portfolio by reviewing the current accounting policies and practices to identify potential differences that would result from applying therequirements of the new standard to its revenue contracts. In addition, the Company identified, and is in the process of implementing, appropriate changesto its business processes, systems and controls to support recognition and disclosure under the new standard. The implementation team has reported thefindings and progress of the project to management and the Audit Committee on a frequent basis.The Company will adopt the guidance on January 1, 2018. The current preferred method of adoption is the full retrospective method. The Company’sability to adopt using the full retrospective method is dependent on system readiness and the completion of its analysis of information necessary to recastprior period financial statements. Based on these factors, the Company may decide to use the cumulative catch-up transition method.While the Company is continuing to assess all potential impacts of the standard, it expects the accounting for bill and hold transactions under the newstandard will result in revenue for certain of those arrangements being recognized earlier than under current GAAP. The precise impact will be dependenton contract-specific terms. As of December 31, 2016, total bill and hold transactions deferred on the balance sheet was $78 million .67 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS3.AcquisitionOn August 1, 2015 , the Company completed the acquisition of CDW UK by purchasing the remaining 65% of its outstanding common stock whichincreased the Company’s ownership interest from 35% to 100% , and provided the Company control.A summary of the total consideration transferred is as follows:(in millions) Acquisition-Date Fair ValueCash $291.6Fair value of CDW common stock (1) 33.2Fair value of previously held equity investment on the date of acquisition (2) 174.9Total consideration $499.7(1)The Company issued 2 million shares of CDW common stock. The fair value of the common stock was based on the closing market price onJuly 31, 2015 , adjusted for the lack of marketability as the shares of CDW common stock issued to certain sellers are subject to a three -yearlock up restriction from August 1, 2015 . One of the sellers granted 1 million stock options to certain CDW UK coworkers over his shares ofCDW common stock received in the transaction. The fair value of these stock options was $22 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 inSelling and administrative expenses in the Consolidated Statements of Operations.(2)As a result of the Company obtaining control over CDW UK, the Company’s previously held 35% equity investment was remeasured to fairvalue, resulting in a gain of $98 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, basedon information available at the acquisition date.The recognized amounts of identifiable assets acquired and liabilities assumed, translated using the foreign currency exchange rates on the date ofacquisition, are as follows:(in millions) Acquisition-Date Fair Value (1)Cash $27.8Accounts receivable 135.7Merchandise inventory 27.1Property and equipment, net 11.4Identified intangible assets (2) 289.8Other assets 53.5Total assets acquired 545.3Accounts payable (3) (86.1)Deferred revenue (57.2)Other liabilities (41.7)Deferred tax liabilities (55.1)Debt (111.5)Total liabilities assumed (351.6)Total identifiable net assets 193.7 Goodwill 306.0 Total purchase price $499.768 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES 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 andassumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures andtechniques.(2)Details of the identified intangible assets acquired are as follows:(in millions)Acquisition-Date Fair Value Weighted-AverageAmortization Period(in years)Customer relationships$260.8 13Customer contracts25.9 3Developed technology1.7 2Trade name1.4 1Total identified intangible assets$289.8 (3)Accounts payable includes both Accounts payable-trade and Accounts payable-inventory financing.Goodwill in the amount of $306 million was recognized in the acquisition of CDW UK and is attributable to the business from new customers and thevalue of the acquired assembled workforce. The goodwill was allocated to the CDW UK operating segment which is included with Canada in an all othercategory (“Other”). The full amount of goodwill recognized is not deductible for income tax purposes in the United Kingdom.The unaudited pro forma Consolidated Statements of Operations in the table below summarizes the combined results of operations of the Company andCDW UK, as if the acquisition had been completed on January 1, 2014, and gives effect to pro forma events that are factually supportable and directlyattributable 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 themeasurement 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 weretax-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 thatwould 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 proforma 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: Years Ended December 31,(in millions) 2015 2014Net sales $13,507.6 $12,933.1Net income 363.7 243.1The unaudited pro forma information above reflects the following adjustments:(1)Excludes acquisition and integration expenses directly related to the transaction.(2)Includes additional amortization expense related to the fair value of acquired intangibles.(3)Excludes the gain of resulting from the remeasurement of the Company’s previously held 35% equity investment to fair value upon thecompletion of the acquisition.(4)Excludes the Company’s share of net income/loss from its previously held 35% equity investment prior to the completion of the acquisition.(5)Excludes non-cash equity-based compensation related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015prior to the completion of the acquisition.69 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(6)Includes additional non-cash equity-based compensation related to equity awards granted to CDW UK coworkers after the completion of theacquisition.(7)Includes the elimination of inter-company sales transactions prior to the completion of the acquisition.4.Property and EquipmentProperty and equipment consists of the following: December 31,(in millions) 2016 2015Land $27.7 $27.7Machinery and equipment 43.2 56.8Building and leasehold improvements 120.4 126.7Computer and data processing equipment 101.7 99.6Computer software 10.8 10.3Furniture and fixtures 23.8 29.4Construction in progress 20.4 23.9Property and equipment 348.0 374.4Less: accumulated depreciation (184.3) (199.0)Property and equipment, net $163.7 $175.4During 2016 , 2015 and 2014 , the Company recorded disposals of $50 million , $17 million and $32 million , respectively, to remove assets that were nolonger in use from property and equipment. The Company recorded a pre-tax loss of less than $1 million for all periods for certain disposed assets thatwere not fully depreciated.Depreciation expense for the years ended December 31, 2016, 2015 and 2014 was $38 million , $29 million and $26 million , respectively.70 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS5.Goodwill and Other Intangible AssetsGoodwillThe changes in goodwill by reportable segment for the years ended December 31, 2016 and 2015 are as follows:(in millions) Corporate Public Other (1) ConsolidatedBalances as of December 31, 2014: Goodwill $2,803.2 $1,265.4 $102.8 $4,171.4Accumulated impairment charges (1,571.4) (354.1) (28.3) (1,953.8) 1,231.8 911.3 74.5 2,217.62015 Activity: Foreign currency translation — — (22.4) (22.4)Acquisition (2) — — 305.2 305.2 — — 282.8 282.8Balances as of December 31, 2015: Goodwill 2,803.2 1,265.4 385.6 4,454.2Accumulated impairment charges (1,571.4) (354.1) (28.3) (1,953.8) 1,231.8 $911.3 $357.3 2,500.42016 Activity: Foreign currency translation $— $— $(45.4) $(45.4)CDW Advanced Services Allocation (3) 28.2 18.3 (46.5) — 28.2 18.3 (91.9) (45.4)Balances as of December 31, 2016: Goodwill $2,831.4 $1,283.7 $293.7 $4,408.8Accumulated impairment charges $(1,571.4) $(354.1) $(28.3) $(1,953.8) $1,260.0 $929.6 $265.4 $2,455.0(1)Other is comprised of Canada and CDW UK reporting units.(2)For further information regarding the addition to goodwill resulting from the Company’s acquisition of CDW UK, see Note 3 (Acquisition) .(3)Effective January 1, 2016, the CDW Advanced Services business is included in the Company's Corporate and Public segments.December 1, 2016 Impairment AnalysisThe Company completed its annual impairment analysis as of December 1, 2016 . For the Corporate, Public and Canada reporting units, the Companyperformed a qualitative analysis. The Company determined that it was more-likely-than-not that the individual fair values of the Corporate, Public andCanada reporting units exceeded the respective carrying values. As a result of this determination, the quantitative two-step impairment analysis wasdeemed unnecessary. Due to the substantial uncertainty regarding the impact of the Referendum on the United Kingdom’s (“UK”) Membership of theEuropean Union (“EU”), advising for the exit of the UK from Europe, the Company performed a quantitative analysis of the CDW UK reporting unit.Based on the results of the quantitative analysis, the Company determined that the fair value of the CDW UK reporting unit exceeded its carrying valueand no impairment existed.December 1, 2015 Impairment AnalysisThe Company completed its annual impairment analysis as of December 1, 2015 by utilizing a qualitative assessment for all reporting units. TheCompany determined that it was more-likely-than-not that the fair value of each reporting unit exceeded its carrying value. As a result of thisdetermination, the quantitative two-step impairment analysis was deemed unnecessary.71 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSOther Intangible AssetsA summary of intangible assets at December 31, 2016 and 2015 is as follows:(in millions) December 31, 2016 GrossCarryingAmount AccumulatedAmortization Net CarryingAmountCustomer relationships and contracts $2,084.6 $(1,322.7) $761.9Trade name 422.1 (195.2) 226.9Internally developed software 142.6 (77.7) 64.9Other 6.0 (4.1) 1.9Total $2,655.3 $(1,599.7) $1,055.6 December 31, 2015 Customer relationships $2,128.3 $(1,162.0) $966.3Trade name 422.3 (173.9) 248.4Internally developed software 136.5 (77.7) 58.8Other 5.8 (2.9) 2.9Total $2,692.9 $(1,416.5) $1,276.4During the years ended December 31, 2016 and 2015 , the Company recorded disposals of $29 million and $6 million , respectively, to remove fullyamortized internally developed software assets that were no longer in use.Amortization expense related to intangible assets for the years ended December 31, 2016, 2015 and 2014 was $216 million , $199 million and $182million , respectively.Estimated future amortization expense related to intangible assets for the next five years is as follows:(in millions) Years ending December 31, Estimated Future AmortizationExpense2017 $213.72018 198.92019 181.42020 154.12021 70.86.Inventory Financing AgreementsThe Company has entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certainterms and conditions, as described below. These amounts are classified separately as Accounts payable-inventory financing on the accompanyingConsolidated 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: December 31,(in millions) 2016 2015Revolving Loan inventory financing agreement $558.3 $427.0Other inventory financing agreements 22.1 12.6Accounts payable-inventory financing $580.4 $439.6As described in Note 8 (Long-Term Debt) , the Company’s senior secured asset-based revolving credit facility incorporates an inventory floorplan sub-facility. In connection with the floorplan sub-facility, the Company maintains an inventory72 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSfinancing agreement with a financial intermediary to facilitate the purchase of inventory from certain vendors (the “Revolving Loan inventory financingagreement”). 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 certainvendors. As of December 31, 2016 and 2015 , amounts owed under other inventory financing agreements were $22 million and $13 million , respectively,of which $3 million and $1 million , respectively, were collateralized by the inventory purchased under these financing agreements and a second lien onthe related accounts receivable.7.Lease CommitmentsThe Company is obligated under various non-cancelable operating lease agreements for office facilities that generally provide for minimum rent paymentsand a proportionate share of operating expenses and property taxes and include certain renewal and expansion options. For the years ended December 31,2016, 2015 and 2014 , rent expense under these lease arrangements was $27 million , $25 million and $21 million , respectively. Capital leases included inproperty and equipment are not material.Future minimum lease payments under non-cancelable operating leases as of December 31, 2016 are as follows:(in millions) Years ending December 31, Future Minimum LeasePayments2017 $22.92018 21.02019 20.62020 20.02021 13.7Thereafter 42.1Total future minimum lease payments $140.373 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS8.Long-Term DebtLong-term debt as of December 31, 2016 and 2015 is as follows:(dollars in millions) Interest Rate Principal Unamortized Discount,Premium, and DeferredFinancing Costs TotalYear Ended December 31, 2016 Senior secured asset-based revolving credit facility —% $— $— $—CDW UK revolving credit facility —% — — —Senior secured term loan facility 3.3% 1,483.0 (14.9) 1,468.1CDW UK term loan 1.8% 69.1 (1.6) 67.5Senior notes due August 15, 2022 6.0% 600.0 (5.6) 594.4Senior notes due September 1, 2023 5.0% 525.0 (5.3) 519.7Senior notes due December 1, 2024 5.5% 575.0 (6.0) 569.0Other long-term obligations 15.7 — 15.7Total long-term debt 3,267.8 (33.4) 3,234.4Less current maturities of long-term debt (18.5) — (18.5)Long-term debt, excluding current maturities $3,249.3 $(33.4) $3,215.9 Year Ended December 31, 2015 Senior secured asset-based revolving credit facility —% $— $— $—CDW UK revolving credit facility —% — — —Senior secured term loan facility 3.3% 1,498.1 (6.7) 1,491.4CDW UK term loan 2.0% 88.4 (0.6) 87.8Senior notes due August 15, 2022 6.0% 600.0 (6.6) 593.4Senior notes due September 1, 2023 5.0% 525.0 (6.2) 518.8Senior notes due December 1, 2024 5.5% 575.0 (6.7) 568.3Total long-term debt 3,286.5 (26.8) 3,259.7Less current maturities of long-term debt (27.2) — (27.2)Long-term debt, excluding current maturities $3,259.3 $(26.8) $3,232.5Senior Secured Asset-backed Revolving Credit Facility (“Revolving Loan”)The Revolving Loan is a $1,250 million senior secured asset-based credit facility that matures on June 6, 2019. The Revolving Loan provides availabilityfor borrowings and issuance of letters of credit. In addition, the Revolving Loan includes an inventory floorplan sub-facility that enables the Company tomaintain an inventory financing agreement with a financial intermediary to facilitate the purchase of inventory from certain vendors on more favorableterms than offered directly by the vendors.Borrowings under the Revolving Loan are limited by a borrowing base. As of December 31, 2016, the Company had $1 million of undrawn letters ofcredit, $533 million reserved for the floorplan sub-facility and a borrowing base of $1,479 million , which is based on the amount of eligible inventory andaccounts receivable balances as of November 30, 2016. As of December 31, 2016, the Company could have borrowed up to an additional $716 millionunder the Revolving Loan. Borrowings are also limited by a minimum liquidity condition, which provides that, if excess cash availability is less than thelower of (i) $125 million and (ii) the greater of (A) 10.0% of the borrowing base and (B) $100 million , the lenders are not required to lend additionalamounts under the Revolving Loan unless the consolidated fixed charge coverage ratio, as defined, is at least 1.00 to 1.00 .74 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSBorrowings under the Revolving Loan bear interest at a variable interest rate plus an applicable margin. The interest rate margin is based on one of twoindices, 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 rateplus 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 areduction 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’scorporate family rating from Moody’s Investors Service, Inc. is Ba3 or better (in each case with stable or better outlook). The rate reduction is currentlyapplicable as the Company has met the requirement.CDW UK Revolving Credit Facility (“UK Facility”)The CDW UK Term Loan agreement, discussed below, includes the UK Revolving Credit Facility. The UK Facility is a multi-currency revolving creditfacility expiring on August 1, 2021, under which CDW UK is permitted to borrow an aggregate amount of £ 50 million ( $62 million as of December 31,2016 ).Senior Secured Term Loan Facility (“Term Loan”)On August 17, 2016, the Company entered into a new seven -year $1,490 million aggregate principal amount Term Loan at a price of 99.5% of par,resulting in a discount of $7 million . Fees of $5 million were capitalized as deferred financing costs. The discount and fees are being amortized over theterm of the notes on a straight-line basis. The Term Loan replaced the prior senior secured term loan facility (the “Prior Term Loan Facility”) that had anoutstanding aggregate principal amount of $1,490 million . In connection with this refinancing, the Company recorded a loss on extinguishment of long-term debt of $2 million , representing the write-off of a portion of the unamortized deferred financing costs and unamortized discount related to the PriorTerm Loan Facility.The Company is required to make quarterly principal payments of 0.25% of the original principal amount on the Term Loan, with remaining principalamount payable at maturity date of April 17, 2023. Borrowings under the Term Loan bear interest at either (a) the alternate base rate (“ABR”) plus amargin or (b) LIBOR plus a margin; provided that for the purposes of the Term Loan, LIBOR shall not be less than 0.75% per annum at any time(“LIBOR Floor”). The margin is based upon a net leverage ratio as defined in the Term Loan which is 1.25% for ABR borrowings and 2.25% for LIBORborrowings. As of December 31, 2016 , an interest rate of 3.25% was in effect, which represents the LIBOR rate of 1.00% plus a 2.25% margin.CDW UK Term LoanOn August 1, 2016, the Company entered into a new five -year £ 56 million ( $69 million as of December 31, 2016 ) aggregate principal amount term loanfacility (the “CDW UK Term Loan”), which replaced the prior senior secured term loan facility (the “Prior CDW UK Term Loan Facility”) that had anoutstanding aggregate principal amount of £56 million . Fees of less than $1 million were capitalized as deferred financing costs and are being amortizedover the term of the loan on a straight-line basis.Commencing during the quarter ending September 30, 2018, the Company is required to make annual principal installments of £5 million with theremaining principal amount payable on the maturity date of August 1, 2021. Borrowings under the CDW UK Term Loan bear interest at LIBOR plus amargin, payable quarterly on the last day of each March, June, September and December. As of December 31, 2016, an interest rate of 1.77% was ineffect, which represents LIBOR plus a 1.40% margin.In connection with this refinancing, the Prior CDW UK Term Loan Facility was amended to include both the CDW UK Term Loan and a £50 million ($62 million as of December 31, 2016 ) revolving credit facility (the “CDW UK Revolving Credit Facility”).6.0% Senior Notes due 2022 (“2022 Senior Notes”)At December 31, 2016 , the outstanding principal amount of the 2022 Senior Notes was $600 million . The 2022 Senior Notes will mature on August 15,2022 and bear interest at a rate of 6.0% per annum, payable semi-annually on February 15 and August 15 of each year. The first interest payment date wasFebruary 15, 2015.5.0% Senior Notes due 2023 (“2023 Senior Notes”)At December 31, 2016 , the outstanding principal amount of the 2023 Senior Notes was $525 million .75 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSOn March 3, 2015, CDW LLC and CDW Finance Corporation, as co-issuers, completed the issuance of $525 million aggregate principal amount of 2023Senior Notes at par. Fees of $7 million related to the 2023 Senior Notes were capitalized as deferred financing costs and are being amortized over the termof the notes on a straight-line basis. The 2023 Notes will mature on September 1, 2023 and bear interest rate of 5.0% per annum, payable semi-annuallyon March 1 and September 1 of each year.5.5% Senior Notes due 2024 (“2024 Senior Notes”)At December 31, 2016 , the outstanding principal amount of the 2024 Senior Notes was $575 million . The 2024 Senior Notes will mature on December 1,2024 and bear interest at a rate of 5.5% per annum, payable semi-annually on June 1 and December 1 of each year.Debt Guarantors, Covenants and RestrictionsCDW LLC is the borrower under the Term Loan and Revolving Loan. CDW LLC and CDW Finance Corporation are the co-issuers of the 2022, 2023 and2024 Senior Notes (“Senior Notes”). The obligations under the Term Loan, the Revolving Loan and the Senior Notes are guaranteed by Parent and eachof CDW LLC’s direct and indirect, wholly owned, US subsidiaries (the “Guarantors”).The Revolving Loan is collateralized by a first priority interest in inventory (excluding inventory collateralized under the inventory floorplanarrangements as described in Note 6 (Inventory Financing Agreements) deposits, and accounts receivable, and a second priority interest in substantially allUS assets.The Term Loan is collateralized by a second priority interest in substantially all inventory (excluding inventory collateralized under the inventoryfloorplan arrangements as described in Note 6 (Inventory Financing Agreements) deposits, and accounts receivable, and by a first priority interest insubstantially all other U.S. assets.As of December 31, 2016, the Company remained in compliance with the covenants under its various credit agreements. The Term Loan containsnegative covenants that, among other things, place restrictions and limitations on the ability of the Guarantors to dispose of assets, incur additionalindebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debtinvestments, make acquisitions, engage in mergers or consolidations or engage in certain transactions with affiliates. As of December 31, 2016, theamount of CDW’s restricted payment capacity under the Term Loan was $892 million . However, the Company is separately permitted to make restrictedpayments, so long as the total net leverage ratio is less than 3.25 on a pro forma basis. The total net leverage ratio was 2.68 as of December 31, 2016.Each of the Senior Notes indentures contain negative covenants that, among other things, place restrictions and limitations on the ability of the Guarantorsto enter into sale and lease-back transactions, incur additional secured indebtedness and create liens. The indenture governing each of the Senior Notes donot contain any financial covenants.The CDW UK Term Loan Agreement imposes restrictions on CDW UK's ability to transfer funds to the Company through the payment of dividends,repayment of intercompany loans, advances or subordinated debt that require, among other things, the maintenance of a minimum net leverage ratio. As ofDecember 31, 2016, the amount of restricted payment capacity under the CDW UK Term Loan was $131 million .Long-Term Debt MaturitiesA summary of Long term debt maturities is as follows:(in millions) Years ending December 31, 2017 18.42018 24.82019 25.12020 25.32021 65.4Thereafter 3,108.8 $3,267.876 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSFair ValueThe fair values of the Senior Notes were estimated using quoted market prices for identical liabilities that are traded in over-the-counter secondarymarkets that are not considered active. The fair value of the Term Loan was estimated using dealer quotes for identical liabilities in markets that are notconsidered active. The Senior Notes and Term Loan are classified as Level 2 within the fair value hierarchy. The carrying value of the CDW UK TermLoan was £56 million ( $69 million ), which approximated fair value due to the short period of time between the issuance of this loan on August 1, 2016and December 31, 2016. The fair value of the CDW UK Term Loan was estimated using a discounted cash flow analysis based on current incrementalborrowing rates for similar arrangements. The approximate fair values and related carrying values of the Company's long-term debt, including currentmaturities and excluding unamortized discount and unamortized deferred financing costs, were as follows: December 31,(in millions) 2016 2015Fair value $3,334.8 $3,330.4Carrying value 3,267.8 3,286.5Interest Rate Cap AgreementsIn order to manage the risk associated with changes in interest rates on borrowings under the Term Loan, the Company maintains interest rate capagreements.During the year ended December 31, 2016, the Company entered into interest rate cap agreements at a rate of 1.5% with a combined notional value of$1,400 million . The Company paid the counterparties premiums totaling $2 million in exchange for the right to receive payments equal to the amount, ifany, by which the three-month LIBOR exceeds 1.5% during the agreement period. These interest rate cap agreements are effective from January 17, 2017to December 31, 2018. These interest rate cap agreements replaced the previous interest rate cap agreements with the same notional amount which expiredin January 2017.The Company’s interest rate cap agreements have not been designated as cash flow hedges for GAAP accounting purposes. The interest rate capagreements are recorded at fair value on the Company’s consolidated balance sheet in Other Assets each period, with changes in fair value recordeddirectly to interest expense in the Company’s Consolidated Statements of Operations. The fair value of the Company’s interest rate cap agreements isclassified 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 onthe expected cash receipts that would occur if variable interest rates rise above the strike rates of the caps. This analysis reflects the contractual terms ofthe interest rate cap agreements, including the period to maturity, and uses observable market-based inputs, including LIBOR curves and impliedvolatilities. The Company also incorporates insignificant credit valuation adjustments to appropriately reflect the respective counterparty’snonperformance risk in the fair value measurements. The counterparty credit spreads are based on publicly available credit information obtained from athird party credit data provider.The fair value of the interest rate cap agreements was $5 million and less than $1 million at December 31, 2016 and 2015 respectively.9.Income TaxesIncome before income taxes was taxed under the following jurisdictions: Years Ended December 31,(in millions) 2016 2015 2014Domestic $635.5 $626.4 $366.6Foreign 36.9 20.6 21.1Total $672.4 $647.0 $387.777 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSComponents of Income tax expense (benefit) consist of the following: Years Ended December 31,(in millions) 2016 2015 2014Current: Federal $295.7 $258.5 $206.8State 34.9 28.6 19.3Foreign 16.8 10.1 5.8Total current 347.4 297.2 231.9Deferred: Domestic (90.5) (48.5) (89.0)Foreign (8.9) (4.8) (0.1)Total deferred (99.4) (53.3) (89.1)Income tax expense $248.0 $243.9 $142.8The reconciliation between the statutory tax rate expressed as a percentage of income before income taxes and the effective tax rate is as follows: Years Ended December 31,(dollars in millions) 2016 2015 2014Statutory federal income tax rate $235.4 35.0 % $226.4 35.0 % $135.7 35.0 %State taxes, net of federal effect 17.8 2.6 16.5 2.6 6.5 1.6Tax benefit of equity awards (1.6) (0.2) — — — —Effect of rates different than statutory (4.5) (0.7) (1.9) (0.3) (1.9) (0.5)Foreign withholding tax 0.8 0.1 3.3 0.5 — —Effect of UK tax rate change on deferred taxes (1.5) (0.2) (4.0) (0.6) — —Other 1.6 0.3 3.6 0.5 2.5 0.7Effective tax rate $248.0 36.9 % $243.9 37.7 % $142.8 36.8 %78 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe tax effect of temporary differences that give rise to the net deferred income tax liability is presented below: December 31,(in millions) 2016 2015Deferred tax assets: Equity compensation plans $29.2 $17.0Payroll and benefits 22.7 21.2Deferred interest 13.9 25.0Net operating loss and credit carryforwards, net 12.7 14.1Rent 11.0 10.8Accounts receivable 8.3 6.4Other 6.2 5.9Trade credits 0.6 1.5Total deferred tax assets 104.6 101.9 Deferred tax liabilities: Software and intangibles 337.4 411.0Deferred income 58.3 87.3International investments 31.3 30.4Property and equipment 30.3 30.6Other 15.3 17.3Total deferred tax liabilities 472.6 576.6Deferred tax asset valuation allowance 1.2 —Net deferred tax liabilities $369.2 $474.7The Company has state and international income tax net operating losses of $41 million , which will expire at various dates from 2017 through 2033 andstate tax credit carryforwards of $15 million , which expire at various dates from 2018 through 2021.Due to the nature of the CDW UK acquisition, the Company has provided US income taxes of $31 million on the excess of the financial reporting value ofthe investment over the corresponding tax basis. As the Company is indefinitely reinvested in its UK business, it will not provide for any additional USincome taxes on the undistributed earnings of the UK business. The Company has recognized deferred tax liabilities of $2 million as of December 31,2016 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 2012 and state, local or foreign taxing authorities for taxyears through 2011. Various other taxing authorities are in the process of auditing income tax returns of the Company and its subsidiaries. The Companydoes not anticipate that any adjustments from the audits would have a material impact on its consolidated financial position, results of operations or cashflows.10.Stockholders’ EquityThe Company has completed the following secondary public offerings during the years ended December 31, 2014 and 2015, whereby certain sellingstockholders sold shares of common stock to the underwriters. The Company did not receive any proceeds from these sales of shares.79 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSSecondary Offering Shares Completion Date of SecondaryOffering Overallotment Shares (1) Completion Date ofOverallotment Shares10,000,000 3/12/2014 1,500,000 3/12/201415,000,000 5/28/2014 2,250,000 6/4/201415,000,000 9/8/2014 (2) — —15,000,000 12/8/2014 2,250,000 12/8/201410,000,000 5/22/2015 1,500,000 5/22/201511,250,000 8/18/2015 1,687,500 8/18/20158,000,000 11/30/2015 1,200,000 12/9/2015(1)Under each underwriting agreement, the selling stockholders granted the underwriters an option, exercisable for thirty days, to purchase up to theadditional amount of shares noted.(2)The option to purchase additional shares was not exercised in connection with the September 2014 secondary offering.Share Repurchase ProgramThe Company has a share repurchase program under which the Company may repurchase shares of its common stock in the open market or throughprivately negotiated other transactions, depending on share price, market conditions and other factors. The share repurchase program does not obligate theCompany to repurchase any dollar amount or number of shares, and repurchases may be commenced or suspended from time to time without prior notice.As of December 31, 2016, the Company has $642 million remaining under this program.On May 4, 2016, the Company announced that its Board of Directors authorized a $750 million increase to the Company’s share repurchase programunder which the Company may repurchase shares of its common stock in the open market through privately negotiated or other transactions, depending onshare price, market conditions and other factors.11.Equity-Based CompensationEquity-based compensation expense, which is recorded in Selling and administrative expenses in the Consolidated Statements of Operations, for the yearsended December 31, 2016, 2015 and 2014 was as follows: Years Ended December 31,(in millions) 2016 2015 2014Equity-based compensation expense $39.2 $31.2 $16.4Income tax benefit (13.3) (10.9) (5.1)Equity-based compensation expense (net of tax) $25.9 $20.3 $11.3The total unrecognized compensation cost related to nonvested awards was $40 million at December 31, 2016 and is expected to be recognized over aweighted-average period of 1.7 years.2013 Long-Term Incentive PlanThe 2013 Long-Term Incentive Plan (“2013 LTIP”) provides for the grant of incentive stock options, nonqualified stock options, stock appreciationrights, restricted stock, restricted stock units, bonus stock and performance awards. The maximum aggregate number of shares that may be issued underthe 2013 LTIP is 15,500,000 shares of the Company’s common stock, in addition to the 3,798,508 shares of restricted stock granted in exchange forunvested Class B Common Units in connection with the Company’s IPO in 2013. As of December 31, 2016 , 7,977,223 shares were available for issuanceunder the 2013 LTIP which was approved by the Company’s pre-IPO shareholders. Authorized but unissued shares are reserved for issuance inconnection with equity-based awards.Stock OptionsThe exercise price of a stock option granted is equal to the fair value of the underlying stock on the date of the grant. Stock options have a contractualterm of 10 years and generally vest ratably over three years. To estimate the fair value80 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSof options granted, the Company uses the Black-Scholes option pricing model. The weighted-average assumptions used to value the stock options grantedduring the years ended December 31, 2016, 2015 and 2014 were as follows: Years Ended December 31, 2016 2015 2014Grant date fair value $8.55 $11.13 $7.23Volatility (1) 25.00% 30.00% 30.00%Risk-free rate (2) 1.47% 1.75% 1.77%Expected dividend yield 1.08% 0.72% 0.70%Expected term (in years) (3) 6.0 6.0 6.0(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’sleverage.(2)Based on a composite US Treasury rate.(3)Calculated using the simplified method, which defines the expected term as the average of the option’s contractual term and theoption’s weighted-average vesting period. The Company utilizes this method as it has limited historical stock option data that is sufficient toderive a reasonable estimate of the expected stock option term.Stock option activity for the year ended December 31, 2016 was as follows:Options Number of Options Weighted-AverageExercise Price Weighted-AverageRemainingContractual Term(years) Aggregate IntrinsicValue (millions)Outstanding at January 1, 2016 3,197,221 $25.58 Granted 956,280 39.99 Forfeited/Expired (48,166) 32.87 Exercised (1) (324,284) 22.90 Outstanding at December 31, 2016 3,781,051 $29.36 7.4 $85.9 Exercisable at December 31, 2016 1,729,243 $22.82 6.4 $50.6Vested and expected to vest at December 31, 2016 2,025,415 $34.84 8.3 $34.9(1) The total intrinsic value of stock options exercised during the years ended December 31, 2016, 2015 and 2014 was $7 million , $2 million , and $1million , 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 endof four years. The fair value of RSUs is equal to the closing price of the Company’s common stock on date of grant.RSU activity for the year ended December 31, 2016 was as follows: Number of Units Weighted-AverageGrant-Date Fair ValueNonvested at January 1, 2016 1,257,399 $19.19Granted (1) 35,392 39.82Vested (2) (32,250) 31.34Forfeited (81,053) 17.05Nonvested at December 31, 2016 1,179,488 $19.52(1)The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2016, 2015 and 2014 was $39.82 , $36.24 and$24.29 , respectively.81 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(2)The aggregate fair value of RSUs that vested during the years ended December 31, 2016, 2015 and 2014 was $1 million , $1 million and lessthan $1 million , respectively.Performance Share Units (“PSUs”)As of January 1, 2016 , there were 578,595 PSUs outstanding at a weighted-average grant-date fair value of $28.67 . During the year ended December 31,2016 , the Company granted 198,637 PSUs under the 2013 LTIP which cliff-vest at the end of three years. The percentage of PSUs that shall vest willrange from 0% to 200% of the number of PSUs granted based on the Company’s performance against a cumulative adjusted free cash flow measure andcumulative non-GAAP net income per diluted share measure over a three -year performance period. The weighted-average grant-date fair value of thePSUs granted during the period was $39.91 per unit. During the year ended December 31, 2016 , 385,932 PSUs vested at a weighted-average grant-datefair value of $24.40 per unit, and 27,353 PSUs were forfeited at a weighted-average grant-date fair value of $31.54 per unit. At year end December 31,2016 , there were 363,947 PSUs outstanding at a weighted-average grant-date fair value of $38.92 per unit.Performance Share Awards (“PSAs”)During the year ended December 31, 2016 , the Company granted 127,336 PSAs under the 2013 LTIP which cliff-vest at the end of three years. Thenumber 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 performance period The weighted-average grant-date fair value of the PSAs granted duringthe year ended December 31, 2016 was $40.06 per award. During the year ended December 31, 2016, no PSAs were forfeited or vested.Restricted StockIn connection with the IPO, the Company issued restricted shares of the Company’s common stock to former stockholders of CDW Holdings. Theseshares are subject to any vesting provisions previously applicable to the restrictions associated with the stock of CDW Holdings. Class B Common Unitholders 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 issuance. As ofJanuary 1, 2016 , there were 92,028 shares of restricted stock outstanding. For the year ended December 31, 2016 , 65,287 shares of such restricted stockvested/settled and 689 shares were forfeited. As of December 31, 2016 , there were 26,052 shares of unvested stock outstanding. The aggregate fair valueof restricted stock that vested during the years ended December 31, 2016 , 2015 and 2014 was $1 million , $3 million and $39 million , respectively.Equity Awards Granted by Seller of CDW UKThe Company issued 1.6 million shares of CDW common stock as part of the consideration transferred to certain sellers for the acquisition of CDW UK.One of the sellers granted 0.6 million stock options to certain CDW UK 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 theconsideration transferred and are included within basic weighted-average shares outstanding since the acquisition date. The weighted average grant datefair value of the stock options was $22 million or $35.93 per option. The grant date fair value of the options was determined by calculating the fair valueof 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 thesestock options has been accounted for as post-combination stock-based compensation, as service is required for the coworkers to retain the awards, and isbeing amortized over the weighted-average requisite service period. Options that are forfeited prior to vesting will not be available for future optionissuances and will revert as consideration to the seller. For further information regarding the acquisition, see Note 3 (Acquisition) .12.Earnings Per ShareThe numerator for both basic and diluted earnings per share is Net income. The denominator for basic earnings per share is the weighted-average sharesoutstanding during the period.A reconciliation of basic weighted-average shares outstanding to diluted weighted-average shares outstanding is as follows:82 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31,(in millions) 2016 2015 2014Basic weighted-average shares outstanding 163.6 170.3 170.6Effect of dilutive securities (1) 2.4 1.5 2.2Diluted weighted-average shares outstanding (2) 166.0 171.8 172.8(1)The dilutive effect of outstanding stock options, restricted stock units, restricted stock, performance share units and Coworker Stock PurchasePlan units is reflected in the diluted weighted-average shares outstanding using the treasury stock method.(2)There were less than 1 million potential common shares excluded from diluted weighted-average shares outstanding for the years endedDecember 31, 2016, 2015 and 2014 , respectively, as their inclusion would have had an anti-dilutive effect.13.Coworker Retirement and Other Compensation BenefitsProfit Sharing Plan and Other Savings PlansThe Company has a profit sharing plan that includes a salary reduction feature established under the Internal Revenue Code Section 401(k) coveringsubstantially all coworkers in the United States. In addition, coworkers outside the US participate in other savings plans. Company contributions to theprofit sharing and other savings plans are made in cash and determined at the discretion of the Board of Directors. For the years ended December 31,2016, 2015 and 2014 , the amounts expensed for these plans were $23 million , $20 million and $22 million , respectively.Coworker Stock Purchase PlanThe Company has a Coworker Stock Purchase Plan (the “CSPP”) that provides the opportunity for eligible coworkers to acquire shares of the Company’scommon stock at a 5% discount from the closing market price on the final day of the offering period. There is no compensation expense associated withthe CSPP.Restricted Debt Unit PlanOn March 10, 2010, the Company established the Restricted Debt Unit Plan (the “RDU Plan”), an unfunded nonqualified deferred compensation plan.Compensation expense related to the RDU Plan was $2 million , $5 million and $9 million for the years ended December 31, 2016, 2015 and 2014 ,respectively. At December 31, 2016 and 2015 , the Company had $30 million and $35 million of liabilities related to the RDU Plan recorded on theConsolidated Balance Sheets, respectively.Unrecognized compensation expense as of December 31, 2016 of approximately $2 million is expected to be recognized in 2017. Payments under theRDU Plan may be impacted if certain significant events occur or circumstances change that would impact the financial condition or structure of theCompany. Payment of the principal component of the RDU Plan is expected to be made on October 12, 2017.14. Commitments and ContingenciesThe 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 localauthorities, and by various partners, group purchasing organizations and customers, including government agencies, relating to purchases and sales undervarious contracts. In addition, the Company is subject to indemnification claims under various contracts. From time to time, certain customers of theCompany file voluntary petitions for reorganization or liquidation under the US bankruptcy laws or similar laws of the jurisdictions for the Company’sbusiness activities outside of the United States. In such cases, certain pre-petition payments received by the Company could be considered preferenceitems and subject to return to the bankruptcy administrator.On October 29, 2015, the Company learned of an investigation by the SEC of the Company’s vendor partner program incentives. The SEC’s investigationis ongoing, and the Company is continuing to cooperate with the SEC in this matter.As of December 31, 2016 , the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts alreadyrecognized for these proceedings and matters, if any, has been incurred. However, the83 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s financial condition and results of operationscould be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.15. Related Party TransactionsDuring 2015 and 2014, the Company held a 35% non-controlling interest in CDW UK until August 1, 2015 when the Company purchased the remaining65% of its outstanding common stock. The Company recorded $10 million in Net sales to CDW UK during the normal course of business in 2015 prior tothe acquisition of CDW UK. Net sales to CDW UK during the period in 2014 in which the Company held CDW UK as an equity investment were notsignificant.On November 30, 2015 , the Company completed a public offering of 9.2 million shares of its common stock by certain selling stockholders, whichincluded 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 Companydid not receive any proceeds from the sale of these shares. Upon completion of this offering, the Company purchased from the underwriters 1.0 million ofthe 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 stockholdersin 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. TheCompany did not receive any proceeds from the sale of these shares. Upon completion of this offering, the Company purchased from the underwriters 2.3million 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 sellingstockholders 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 included1.5 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 notreceive any proceeds from the sale of these shares. On May 17, 2015 , the Company entered into a share repurchase agreement with certain sellingstockholders affiliated with Madison Dearborn and Providence Equity pursuant to which it repurchased 2.0 million shares of its common stock from suchselling stockholders. This share repurchase was effected in a private, non-underwritten transaction for $36.60 per share, which was equal to the per shareprice paid by the underwriters to the selling stockholders in connection with the public offering completed on May 22, 2015 .On March 20, 2014, the Company repurchased and subsequently canceled $25 million aggregate principal amount of the 2019 Senior Notes from anaffiliate of Providence Equity. For additional information, see Note 8 (Long-Term Debt) .16. Segment InformationThe Company’s segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the chiefoperating 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 in the US, and Public, which iscomprised of government agencies and education and healthcare institutions in the US. The Company has two other operating segments: CDW Canadaand CDW UK, both of which do not meet the reportable segment quantitative thresholds and, accordingly, are included in an all other category (“Other”).Effective January 1, 2016, CDW Advanced Services is no longer an operating segment. Its results have been allocated to the Corporate and Publicsegments to align the Company's financial reporting with the manner in which the Chief Operating Decision Maker assesses performance and makesresource allocation decisions. Segment information reported in prior periods has been reclassified to conform to the current period presentation. EffectiveJanuary 1, 2017, the Company established Small Business as its own operating and reportable segment to align the Company’s financial reporting with themanner in which the Chief Operating Decision Maker assesses performance and makes resource allocation decisions.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 thelogistics function are fully allocated to both of these segments based on a percent of Net sales. The centralized headquarters function provides services inareas such as accounting, information technology, marketing, legal and coworker services. Headquarters’ function costs that are not allocated to thesegments are included under the heading of “Headquarters” in the tables below.84 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe Company allocates resources to and evaluates performance of its segments based on Net sales, Income from operations and Adjusted EBITDA, anon-GAAP measure as defined in the Company’s credit agreements. However, the Company has concluded that Income from operations is the moreuseful 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 orallocating resources between segments.Selected Segment Financial InformationInformation regarding the Company’s segments for the years ended December 31, 2016, 2015 and 2014 is as follows:(in millions)Corporate Public Other Headquarters Total2016: Net sales$7,029.9 $5,589.4 $1,362.6 $— $13,981.9Income (loss) from operations522.5 368.0 43.6 (114.9) 819.2Depreciation and amortization expense(103.5) (44.7) (32.1) (74.2) (254.5) 2015: Net sales$6,968.3 $5,183.6 $836.8 $— $12,988.7Income (loss) from operations500.8 328.6 27.1 (114.5) 742.0Depreciation and amortization expense(103.2) (44.7) (16.2) (63.3) (227.4) 2014: Net sales$6,604.0 $4,938.3 $532.2 $— $12,074.5Income (loss) from operations460.6 303.9 $21.4 (112.9) 673.0Depreciation and amortization expense(102.5) (44.7) $(1.7) (59.0) (207.9)Geographic Areas and Revenue MixThe Company did not have Net sales to customers outside of the US exceeding 10% of the Company’s total Net sales in 2016 , 2015 and 2014 . TheCompany did not have long-lived assets located outside of the US exceeding 10% of the Company’s total long-lived assets as of December 31, 2016 and2015 , respectively.The following table presents Net sales by major category for the years ended December 31, 2016, 2015 and 2014 . Categories are based upon internalclassifications. Year Ended December 31, 2016 Year Ended December 31, 2015 (1) Year Ended December 31, 2014 (1) Dollars inMillions Percentageof Total NetSales Dollars inMillions Percentageof Total NetSales Dollars inMillions Percentageof Total NetSalesNotebooks/Mobile Devices$2,934.3 21.0% $2,538.5 19.5% $2,352.9 19.5%Netcomm Products1,950.9 14.0 1,912.3 14.7 1,613.9 13.4Desktops1,054.8 7.5 968.6 7.5 1,058.2 8.8Enterprise and Data Storage(Including Drives)1,057.6 7.6 1,065.5 8.2 1,023.9 8.5Other Hardware3,981.4 28.5 3,798.3 29.2 3,492.3 28.8Software (2)2,406.9 17.2 2,161.3 16.6 2,065.8 17.1Services (2)579.0 4.1 472.8 3.6 371.1 3.1Other (3)17.0 0.1 71.4 0.7 96.4 0.8Total Net sales$13,981.9 100.0% $12,988.7 100.0% $12,074.5 100.0%(1)Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31,2016.85 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(2)Certain software and services revenue is recorded on a net basis for accounting purposes, so the category percentage of net revenues is notrepresentative of the category percentage of gross profits.(3)Includes items such as delivery charges to customers and certain commission revenue.17. Supplemental Guarantor InformationThe 2022 Senior Notes, the 2023 Senior Notes and the 2024 Senior Notes are, and, prior to being redeemed in full, the 2019 Senior Notes were,guaranteed by Parent and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries (the “Guarantor Subsidiaries”). All guarantees byParent and the 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 2024Senior Notes and (ii) were subject to certain customary release provisions contained in the indentures governing the 2019 Senior Notes until suchindentures were satisfied and discharged in the first quarter of 2015. CDW LLC's 100% owned foreign subsidiaries, CDW International HoldingsLimited, which is comprised of CDW UK and Canada (together the “Non-Guarantor Subsidiaries”), do not guarantee the debt obligations. CDW LLC andCDW 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, 2016 and 2015 , Consolidating Statements of Operations forthe years ended December 31, 2016, 2015 and 2014 , Condensed Consolidating Statements of Comprehensive Income for the years ended December 31,2016, 2015 and 2014 , and Condensed Consolidating Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014 , in accordancewith Rule 3-10 of Regulation S-X. The consolidating financial information includes the accounts of CDW Corporation (the “Parent Guarantor”), whichhas no independent assets or operations, the accounts of CDW LLC (the “Subsidiary Issuer”), the combined accounts of the Guarantor Subsidiaries, thecombined accounts of the Non-Guarantor Subsidiaries, and the accounts of CDW Finance Corporation (the “Co-Issuer”) for the periods indicated. Theinformation was prepared on the same basis as the Company’s Consolidated Financial Statements.86 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCondensed Consolidating Balance SheetDecember 31, 2016(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiaries Co-Issuer ConsolidatingAdjustments ConsolidatedAssets Current assets: Cash and cash equivalents$— $222.7 $3.1 $37.9 $— $— $263.7Accounts receivable, net— — 1,904.9 263.7 — — 2,168.6Merchandise inventory— — 390.6 61.4 — — 452.0Miscellaneous receivables— 92.6 130.1 12.2 — — 234.9Prepaid expenses and other— 14.3 69.0 35.6 — — 118.9Total current assets— 329.6 2,497.7 410.8 — — 3,238.1Property and equipment, net— 105.6 49.3 8.8 — — 163.7Goodwill— 751.8 1,439.0 264.2 — — 2,455.0Other intangible assets, net— 291.5 565.1 199.0 — — 1,055.6Other assets3.2 19.4 248.2 1.5 — (236.3) 36.0Investment in and advances tosubsidiaries1,042.3 3,026.5 — — — (4,068.8) —Total Assets$1,045.5 $4,524.4 $4,799.3 $884.3 $— $(4,305.1) $6,948.4Liabilities and Stockholders’ Equity Current liabilities: Accounts payable-trade$— $25.9 $895.3 $151.7 $— $— $1,072.9Accounts payable-inventoryfinancing— 1.2 559.5 19.7 — — 580.4Current maturities of long-termdebt— 14.9 3.6 — — — 18.5Deferred revenue— — 100.8 71.8 — — 172.6Accrued expenses— 173.9 214.8 47.7 — (0.1) 436.3Total current liabilities— 215.9 1,774.0 290.9 — (0.1) 2,280.7Long-term liabilities: Debt— 3,136.3 12.1 67.5 — — 3,215.9Deferred income taxes— 99.1 205.4 67.9 — (3.2) 369.2Other liabilities— 30.8 3.6 235.7 — (233.0) 37.1Total long-term liabilities— 3,266.2 221.1 371.1 — (236.2) 3,622.2Total stockholders’ equity1,045.5 1,042.3 2,804.2 222.3 — (4,068.8) 1,045.5Total Liabilities and Stockholders’Equity$1,045.5$4,524.4$4,799.3$884.3$—$(4,305.1)$6,948.487 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Balance SheetDecember 31, 2015(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments ConsolidatedAssets Current assets: Cash and cash equivalents$— $45.1 $— $31.9 $— $(39.4) $37.6Accounts receivable, net— — 1,788.6 228.8 — — 2,017.4Merchandise inventory— — 340.3 52.8 — — 393.1Miscellaneous receivables— 83.7 90.1 24.6 — — 198.4Prepaid expenses and other— 13.0 50.4 84.0 — (3.1) 144.3Total current assets— 141.8 2,269.4 422.1 — (42.5) 2,790.8Property and equipment, net— 110.0 54.1 11.3 — — 175.4Goodwill— 751.8 1,439.0 309.6 — — 2,500.4Other intangible assets, net— 306.0 704.9 265.5 — — 1,276.4Other assets3.8 17.3 263.0 3.0 — (274.8) 12.3Investment in and advances tosubsidiaries1,092.1 3,302.0 — — — (4,394.1) —Total Assets$1,095.9 $4,628.9 $4,730.4 $1,011.5 $— $(4,711.4) $6,755.3Liabilities and Stockholders’ Equity Current liabilities: Accounts payable-trade$— $31.0 $727.4 $147.5 $— $(39.4) $866.5Accounts payable-inventoryfinancing— — 428.4 11.4 — (0.2) 439.6Current maturities of long-termdebt— 15.4 — 11.8 — — 27.2Deferred revenue— — 77.4 74.5 — — 151.9Accrued expenses— 156.0 190.9 58.6 — (3.4) 402.1Total current liabilities— 202.4 1,424.1 303.8 — (43.0) 1,887.3Long-term liabilities: Debt— 3,156.5 — 76.0 — — 3,232.5Deferred income taxes— 117.3 272.8 83.4 — (3.9) 469.6Other liabilities— 60.7 2.9 276.8 — (270.4) 70.0Total long-term liabilities— 3,334.5 275.7 436.2 — (274.3) 3,772.1Total stockholders’ equity1,095.9 1,092.0 3,030.6 271.5 — (4,394.1) 1,095.9Total Liabilities and Stockholders’Equity$1,095.9 $4,628.9 $4,730.4 $1,011.5 $— $(4,711.4) $6,755.388 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSConsolidating Statement of OperationsYear Ended December 31, 2016(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiaries Co-Issuer ConsolidatingAdjustments ConsolidatedNet sales$— $— $12,619.3 $1,362.6 $— $— $13,981.9Cost of sales— — 10,514.4 1,140.3 — — 11,654.7Gross profit— — 2,104.9 222.3 — — 2,327.2Selling and administrative expenses— 114.8 1,057.4 172.9 — — 1,345.1Advertising expense— — 157.2 5.7 — — 162.9Income (loss) from operations— (114.8) 890.3 43.7 — — 819.2Interest (expense) income, net— (145.8) 6.7 (7.4) — — (146.5)Net loss on extinguishments of long-term debt— (2.1) — — — — (2.1)Other income (expense), net— 0.2 1.0 0.6 — — 1.8Income (loss) before income taxes— (262.5) 898.0 36.9 — — 672.4Income tax benefit (expense)— 79.9 (319.9) (8.0) — — (248.0)Income (loss) before equity in earningsof subsidiaries— (182.6) 578.1 28.9 — — 424.4Equity in earnings of subsidiaries424.4 607.0 — — — (1,031.4) —Net income$424.4 $424.4 $578.1 $28.9 $— $(1,031.4) $424.489 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSConsolidating Statement of OperationsYear Ended December 31, 2015(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments ConsolidatedNet sales$— $— $12,151.2 $837.5 $— $— $12,988.7Cost of sales— — 10,158.6 714.3 — — 10,872.9Gross profit— — 1,992.6 123.2 — — 2,115.8Selling and administrative expenses— 114.5 1,020.9 90.6 — — 1,226.0Advertising expense— — 143.2 4.6 — — 147.8(Loss) income from operations— (114.5) 828.5 28.0 — — 742.0Interest (expense) income, net— (158.3) 2.3 (3.5) — — (159.5)Net loss on extinguishments of long-term debt— (24.3) — — — — (24.3)Management fee— 4.2 — (4.2) — — —Gain on remeasurement of equityinvestment— — — 98.1 — — 98.1Other (expense) income, net— (11.1) 1.6 0.2 — — (9.3)(Loss) income before income taxes— (304.0) 832.4 118.6 — — 647.0Income tax benefit (expense)— 103.3 (307.2) (40.0) — — (243.9)(Loss) income before equity in earningsof subsidiaries— (200.7) 525.2 78.6 — — 403.1Equity in earnings of subsidiaries403.1 603.8 — — — (1,006.9) —Net income$403.1 $403.1 $525.2 $78.6 $— $(1,006.9) $403.190 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSConsolidating Statement of OperationsYear Ended December 31, 2014(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments ConsolidatedNet sales$— $— $11,542.3 $532.2 $— $— $12,074.5Cost of sales— — 9,684.9 468.3 — — 10,153.2Gross profit— — 1,857.4 63.9 — — 1,921.3Selling and administrative expenses— 112.8 962.3 35.2 — — 1,110.3Advertising expense— — 134.0 4.0 — — 138.0(Loss) income from operations— (112.8) 761.1 24.7 — — 673.0Interest (expense) income, net— (197.7) 0.1 0.3 — — (197.3)Net loss on extinguishments of long-termdebt— (90.7) — — — — (90.7)Management fee— 3.9 — (3.9) — — —Other income, net— 1.2 1.5 — — — 2.7(Loss) income before income taxes— (396.1) 762.7 21.1 — — 387.7Income tax benefit (expense)— 141.0 (278.1) (5.7) — — (142.8)(Loss) income before equity in earnings ofsubsidiaries— (255.1) 484.6 15.4 — — 244.9Equity in earnings of subsidiaries244.9 500.0 — — — (744.9) —Net income$244.9 $244.9 $484.6 $15.4 $— $(744.9) $244.991 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCondensed Consolidating Statement of Comprehensive IncomeYear Ended December 31, 2016(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiaries Co-Issuer ConsolidatingAdjustments ConsolidatedComprehensive income (loss)$345.9 $345.9 $578.1 $(49.6) $— $(874.4) $345.9Condensed Consolidating Statement of Comprehensive IncomeYear Ended December 31, 2015(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments ConsolidatedComprehensive income$358.6 $358.6 $525.2 $34.1 $— $(917.9) $358.6Condensed Consolidating Statement of Comprehensive IncomeYear Ended December 31, 2014(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments ConsolidatedComprehensive income$234.6 $234.6 $484.6 $5.1 $— $(724.3) $234.692 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCondensed Consolidating Statement of Cash FlowsYear Ended December 31, 2016(in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiaries Co-Issuer ConsolidatingAdjustments ConsolidatedNet cash (used in) provided byoperating activities$— $(158.5) $695.5 $56.1 $— $10.9 $604.0Cash flows from investing activities: Capital expenditures— (50.9) (7.6) (5.0) — — (63.5)Premium payments on interest ratecap agreements— (2.4) — — — — (2.4)Net cash used in investing activities— (53.3) (7.6) (5.0) — — (65.9)Cash flows from financing activities: Proceeds from borrowings underrevolving credit facility— 329.6 — 9.2 — — 338.8Repayments of borrowings underrevolving credit facility— (329.6) — (9.2) — — (338.8)Repayments of long-term debt— (15.2) — (5.4) — — (20.6)Proceeds from the issuance oflong-term debt— 1,483.0 — — — — 1,483.0Payments to extinguish long-termdebt— (1,490.4) — — — — (1,490.4)Net change in other long-termobligation— — 15.7 — — — 15.7Payment of debt financing costs— (4.5) — (1.4) — — (5.9)Net change in accounts payable-inventory financing— 1.5 131.0 11.1 — — 143.6Proceeds from stock optionexercises— 7.4 — — — — 7.4Proceeds from Coworker stockpurchase plan— 9.3 — — — — 9.3Repurchases of common stock(367.4) — — — — — (367.4)Dividends(78.7) — — — — — (78.7)Principal payments under capitallease obligations— — 1.0 (1.6) — — (0.6)Repayment of intercompany loan— — 40.4 (40.4) — — —Distributions and advances from(to) affiliates446.1 398.3 (872.9) — — 28.5 —Net cash provided by (used in)financing activities— 389.4 (684.8) (37.7) — 28.5 (304.6)Effect of exchange rate changes on cashand cash equivalents— — — (7.4) — — (7.4)Net increase (decrease) in cash and cashequivalents— 177.6 3.1 6.0 — 39.4 226.1Cash and cash equivalents – beginningof period— 45.1 — 31.9 — (39.4) 37.6Cash and cash equivalents – end ofperiod$— $222.7 $3.1 $37.9 $— $— $263.793 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCondensed Consolidating Statement of Cash FlowsYear Ended December 31, 2015(in millions)Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments ConsolidatedNet cash (used in) provided by operatingactivities$0.5 $(18.1) $350.0 $27.9 $— $(82.8) $277.5Cash flows from investing activities: Capital expenditures— (75.4) (11.6) (3.1) — — (90.1)Acquisition of business, net of cashacquired— — — (263.8) — — (263.8)Premium payments on interest ratecap agreements— (0.5) — — — — (0.5)Net cash used in investing activities— (75.9) (11.6) (266.9)—— (354.4)Cash flows from financing activities: Proceeds from borrowings underrevolving credit facility— 314.5 — — — — 314.5Repayments of borrowings underrevolving credit facility— (314.5) — — — — (314.5)Repayments of long-term debt— (15.4) — (17.4) — — (32.8)Proceeds from issuance of long-term debt— 525.0 — — — — 525.0Payments to extinguish long-termdebt— (525.3) — — — — (525.3)Payment of debt financing costs— (6.8) — — — — (6.8)Net change in accounts payable-inventory financing— — 96.1 (0.2) — — 95.9Proceeds from stock optionexercises— 2.4 — — — — 2.4Proceeds from Coworker stockpurchase plan— 8.7 — — — — 8.7Repurchases of common stock(241.3) — — — — — (241.3)Dividends paid(52.9) — — — — — (52.9)Excess tax benefits from equity-based compensation— 0.6 — — — — 0.6Advances to/from affiliates293.7 (196.5) (434.5) 267.4 — 69.9 —Net cash provided by (used in) financingactivities(0.5) (207.3) (338.4) 249.8 — 69.9 (226.5)Effect of exchange rate changes on cashand cash equivalents— — — (3.5) — — (3.5)Net increase (decrease) in cash and cashequivalents— (301.3) —7.3 — (12.9) (306.9)Cash and cash equivalents – beginningof period— 346.4 — 24.6 — (26.5) 344.5Cash and cash equivalents – end ofperiod$— $45.1 $— $31.9 $— $(39.4) $37.694 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCondensed Consolidating Statement of Cash FlowsYear Ended December 31, 2014(in millions)Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments ConsolidatedNet cash (used in) provided by operatingactivities$— $(120.4) $547.7 $11.8 $— $(4.1) $435.0Cash flows from investing activities: Capital expenditures— (47.9) (7.1) — — — (55.0)Payment for equity investments— (86.8) — — — — (86.8)Payment of accrued charitablecontribution related to the MPKCoworker Incentive Plan II— (20.9) — — — — (20.9)Premium payments on interest ratecap agreements— (2.1) — — — — (2.1)Net cash used in investing activities— (157.7) (7.1) — — — (164.8)Cash flows from financing activities: Repayments of long-term debt— (15.4) — — — — (15.4)Proceeds from issuance of long-term debt— 1,175.0 — — — — 1,175.0Payments to extinguish long-termdebt— (1,299.0) — — — — (1,299.0)Payment of debt financing costs— (21.9) — — — — (21.9)Net change in accounts payable-inventory financing— — 75.5 — — — 75.5Proceeds from stock optionexercises— 1.3 — — — — 1.3Proceeds from Coworker stockpurchase plan— 5.8 — — — — 5.8Dividends paid(33.6) — — — — — (33.6)Excess tax benefits from equity-based compensation— 0.3 — — — — 0.3Advances to/from affiliates33.6 581.9 (616.1) 0.6 — — —Net cash provided by (used in) financingactivities— 428.0 (540.6) 0.6 — — (112.0)Effect of exchange rate changes on cashand cash equivalents— — — (1.8) — — (1.8)Net increase (decrease) in cash and cashequivalents— 149.9 — 10.6 — (4.1) 156.4Cash and cash equivalents – beginningof period— 196.5 — 14.0 — (22.4) 188.1Cash and cash equivalents – end ofperiod$— $346.4 $— $24.6 $— $(26.5) $344.595 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS18. Selected Quarterly Financial Results (unaudited) Year Ended December 31, 2016(in millions, except per-share amounts) First Quarter Second Quarter Third Quarter Fourth QuarterNet Sales: Corporate: Medium/Large $1,410.7 $1,489.0 $1,463.5 $1,516.6Small Business 281.6 290.2 285.4 293.0Total Corporate 1,692.3 1,779.2 1,748.9 1,809.6Public: Government 339.9 456.6 537.5 529.6Education 341.0 640.0 671.4 365.9Healthcare 388.5 450.4 431.7 436.8Total Public 1,069.4 1,547.0 1,640.6 1,332.3Other 355.0 338.4 318.7 350.5Net sales $3,116.7 $3,664.6 $3,708.2 $3,492.4 Gross profit $524.5 $610.5 $614.3 $577.9Income from operations 161.0 223.5 237.5 197.2Net income 77.8 117.5 125.9 103.2Basic 0.47 0.71 0.78 0.64Diluted 0.46 0.70 0.76 0.63 Cash dividends declared per common share $0.1075 $0.1075 $0.1075 $0.1600 Year Ended December 31, 2015 (2)(in millions, except per-share amounts) First Quarter Second Quarter Third Quarter Fourth QuarterNet Sales: Corporate: Medium/Large $1,341.9 $1,521.3 $1,490.6 $1,521.5Small Business 268.5 277.3 274.1 273.1Total Corporate 1,610.4 1,798.6 1,764.7 1,794.6Public: Government 294.2 390.8 493.9 522.0Education 345.4 548.9 583.3 341.2Healthcare 377.6 448.8 406.7 430.8Total Public 1,017.2 1,388.5 1,483.9 1,294.0Other 127.6 126.9 252.5 329.8Net sales $2,755.2 $3,314.0 $3,501.1 $3,418.4 Gross profit $456.5 $534.5 $567.2 $557.6Income from operations 151.6 205.9 204.6 179.9Net income 54.7 108.2 150.9 89.3Net income per common share (1) : Basic 0.32 0.63 0.89 0.53Diluted 0.32 0.63 0.88 0.52 Cash dividends declared per common share $0.0675 $0.0675 $0.0675 $0.107596 Table of ContentsCDW CORPORATION AND SUBSIDIARIESNOTES 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 anddiluted per share information may not equal annual basic and diluted net income per share.(2)Effective January 1, 2016, CDW Advanced Services is no longer an operating segment and its results have been allocated to our Corporate andPublic segments. The prior periods have been reclassified to conform to the current period presentation.19. Subsequent EventsOn February 7, 2017 , the Company announced that its Board of Directors has declared a quarterly cash dividend of $0.16 per common share to be paid onMarch 10, 2017 to all stockholders of record as of the close of business on February 24, 2017 .On February 23, 2017 the Company priced an offering of $600 million in aggregate principal amount of 5.0% Senior Notes due 2025 (“2025 SeniorNotes") priced at par. The sale of the 2025 Senior Notes is expected to be completed on March 2, 2017, subject to customary closing conditions. TheCompany intends to use the proceeds from the 2025 Senior Notes Offering, together with cash on hand and borrowings under the Revolving Loan, to fundthe redemption of all of the outstanding $600 million aggregate principal amount of the 2022 Senior Notes and to pay related fees and expenses. TheCompany currently expects to issue a notice of redemption to holders of the 2022 Senior Notes upon the closing of the 2025 Senior Notes Offering.On February 28, 2017, the Company completed the refinancing of its Term Loan. As a result of the refinancing, the applicable interest margin on theamount of term loans outstanding was reduced by 0.25% and the LIBOR floor of 0.75% was removed.97 Table of ContentsSCHEDULE II – VALUATION AND QUALIFYING ACCOUNTSYears ended December 31, 2016, 2015 and 2014 (in millions) Balance atBeginningof Period Charged toCosts andExpenses Deductions Balance atEnd ofPeriodAllowance for doubtful accounts: Year Ended December 31, 2016 $6.0 $2.0 $(2.1) $5.9Year Ended December 31, 2015 5.7 4.2 (3.9) 6.0Year Ended December 31, 2014 5.4 5.4 (5.1) 5.7 Reserve for sales returns: Year Ended December 31, 2016 $4.9 $38.1 $(36.2) $6.8Year Ended December 31, 2015 5.1 34.4 (34.6) 4.9Year Ended December 31, 2014 5.1 36.2 (36.2) 5.198 Table of ContentsItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresThe Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated theeffectiveness 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 Actof 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 theCompany’s Chief Executive Officer and Chief Financial Officer, has concluded that, as of the end of such period, the Company’s disclosure controls andprocedures were effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in thereports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Company’s management, including theCompany’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 ReportingManagement 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 onlyreasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods aresubject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures maydeteriorate.Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016 . Management based thisassessment on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control — IntegratedFramework (2013 framework).”Based on its assessment, management concluded that, as of December 31, 2016 , the Company’s internal control over financial reporting is effective.Ernst & Young LLP, independent registered public accounting firm, has audited the Consolidated Financial Statements of the Company and theCompany’s internal control over financial reporting and has included their reports herein.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting during the quarter ended December 31, 2016 that have materially affected orare reasonably likely to materially affect, our internal control over financial reporting.99 Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders of CDW Corporation and subsidiariesWe have audited CDW Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2016, based on criteria established inInternal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSOcriteria). CDW Corporation and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessmentof the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over FinancialReporting. 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 requirethat we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing andevaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessaryin 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 andthe preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control overfinancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.In our opinion, CDW Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December31, 2016, 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 balancesheets of CDW Corporation and subsidiaries as of December 31, 2016 and 2015, 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, 2016 of CDW Corporation and subsidiaries and our report datedFebruary 28, 2017 expressed an unqualified opinion thereon./s/ Ernst & Young LLPChicago, IllinoisFebruary 28, 2017100 Table of ContentsItem 9B. Other InformationNone.101 Table of ContentsPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceOur Board of DirectorsŸ Independent Board. Our Board of Directors is comprised entirely of independent directors, other than our Chief Executive Officer. Ÿ Independent Lead Director. Barry K. Allen serves as our independent lead director. Ÿ Independent Board Committees. All members of our Audit, Compensation and Nominating and Corporate Governance Committees are independentdirectors. Under our Fifth Amended and Restated Certificate of Incorporation, the number of directors on our Board of Directors (“Board of Directors” or “Board”) is setfrom time to time by the Board. Our Board currently consists of eleven directors. Our Board is divided into three classes of directors - Class I, Class II and Class III- with one class of directors elected at each annual meeting of stockholders. Our directors serve three-year terms, with the expiration of their terms staggeredaccording to class.Steven W. Alesio, Barry K. Allen, David W. Nelms and Donna F. Zarcone are Class I directors whose terms will expire in 2017, Virginia C. Addicott, James A.Bell, Benjamin D. Chereskin and Paul J. Finnegan are Class II directors whose terms will expire in 2018 and Thomas E. Richards, Lynda M. Clarizio and JosephR. Swedish are Class III directors who terms will expire in 2019.NameAgeDirectorSince (1)Primary OccupationIndependentBoard Committee MembershipAs of December 31, 2016 (2)AuditCompNom & CorpGovThomas E. Richards (Chairman)622011Chairman & Chief Executive Officer,CDW Corporation Virginia C. Addicott532016President & Chief Executive Officer,FedEx Custom CriticalüX XSteven W. Alesio622009Operating Partner, Providence EquityPartners L.L.C.; CEO, TwentyEighty, Inc.ü CXBarry K. Allen (Lead Director)682009Operating Partner, Providence EquityPartners L.L.C.; President, AllenEnterprises, LLCü XCJames A. Bell682015Retired Executive Vice President, TheBoeing CompanyüX XBenjamin D. Chereskin582007President, Profile Capital ManagementLLCüX XLynda M. Clarizio562015President, The Nielsen Company (US),LLCü XXPaul J. Finnegan632011Co-Chief Executive Officer, MadisonDearborn Partners, LLCü XXDavid W. Nelms562014Chairman & Chief Executive Officer,Discover Financial ServicesüX XJoseph R. Swedish652015Chairman, President & Chief ExecutiveOfficer, Anthem, Inc.ü XXDonna F. Zarcone592011President and Chief Executive Officer, TheEconomic Club of ChicagoüC X(1) The time period for service as a director of CDW includes service on the Board of Managers of CDW Holdings LLC, our parent company prior to our initialpublic offering in 2013.(2)Audit - Audit Committee; Comp - Compensation Committee; Nom & Corp Gov - Nominating and Corporate Governance Committee. C - Committee Chair.102 Table of ContentsThomas E. Richards is our Chairman, President and Chief Executive Officer. Mr. Richards has served as our President and Chief Executive Officer sinceOctober 2011 and was named Chairman in January 2013. From 2009 to 2011, Mr. Richards served as our President and Chief Operating Officer. Prior to joiningCDW, 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 ofQwest, and before assuming that role, was the Executive Vice President of the Business Markets Group from 2005 to 2008. Mr. Richards also has served asChairman and Chief Executive Officer of Clear Communications Corporation and as Executive Vice President of Ameritech Corporation. Mr. Richards serves as aboard member of The Northern Trust Corporation, Junior Achievement of Chicago, Rush University Medical Center and the University of Pittsburgh. Mr. Richardsalso 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 heearned 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. Mr.Richards possesses particular knowledge and experience in technology industries, strategic planning and leadership of complex organizations, and board practicesof other major corporations.Virginia C. Addicott is the President and Chief Executive Officer of FedEx Custom Critical, a leading North American expedited freight carrier, aposition she has held since June 2007. Ms. Addicott joined FedEx Custom Critical in 1999 as Division Managing Director, Service and Safety, and in 2001 becameDivision Vice President, Operations and Customer Service. Prior to joining FedEx Custom Critical, Ms. Addicott spent thirteen years at Roberts Express, Inc.(acquired by FedEx Custom Critical in 1999) in various operations roles. Ms. Addicott serves on the board of trustees of Kent State University and the boards ofdirectors of Akron Children’s Hospital and Akron Community Foundation. Previously, she served as chair of both The Boys and Girls Club of Western Reserveand the Greater Akron Chamber of Commerce. Ms. Addicott is a graduate of Kent State University where she earned a bachelor’s degree and an Executive Masterof Business Administration. Ms. Addicott possesses particular knowledge and experience in operations, technology, finance, strategic planning, and leadership ofcomplex organizations.Steven W. Alesio serves as an Operating Partner at Providence Equity Partners L.L.C., a global asset management firm, a position he has held sinceDecember 2010, and as Chief Executive Officer of TwentyEighty, Inc., a corporate training company, a position he has held since March 2016. Prior to joiningProvidence Equity Partners L.L.C., Mr. Alesio was most recently Chairman of the Board and Chief Executive Officer of Dun & Bradstreet Corporation, a providerof credit information on businesses and corporations. After joining Dun & Bradstreet in 2001 as Senior Vice President, Mr. Alesio served in various seniorleadership positions. In 2002, Mr. Alesio was named President and Chief Operating Officer, and was elected to the board of directors. In January 2005, Mr. Alesiowas chosen to be the Chief Executive Officer, and in May of 2005, he became Chairman of the Board, a position he held until his departure in 2010. Prior tojoining Dun & Bradstreet, Mr. Alesio spent 19 years with the American Express Company, where he served in marketing and general management roles. Mr.Alesio serves on the boards of directors of Ascend Learning, TwentyEighty and Vector Learning. During the past five years, Mr. Alesio also served as a director ofBlackboard, Study Group, Altegrity and Genworth Financial, Inc. Mr. Alesio is the founding sponsor for the non-profit All Stars Project of New Jersey, whichprovides outside-of-school leadership development and performance-based education programming to thousands of inner-city young people in Newark and itssurrounding communities. Mr. Alesio is a graduate of St. Francis College where he earned a bachelor’s degree and a graduate of University of Pennsylvania’sWharton School where he earned a Master of Business Administration. Mr. Alesio possesses particular knowledge and experience in strategic planning andleadership of complex organizations, and board practices of other major corporations.Barry K. Allen serves as an Operating Partner at Providence Equity Partners L.L.C., a global asset management firm, and is President of AllenEnterprises, LLC, a private equity investment and management company he founded in 2000. Prior to joining Providence Equity Partners L.L.C. in 2007, Mr. Allenwas Executive Vice President of Operations at Qwest Communications International Inc., a broadband Internet-based communications company. Before hisretirement from Qwest in 2007, Mr. Allen was responsible for the company’s network and information technology operations. Previously, he served as President ofChicago-based Ameritech Corp., where he began his career in 1974 and held a variety of executive appointments including President and Chief Executive Officerof Wisconsin Bell and President and Chief Executive Officer of Illinois Bell. Before starting at Ameritech, Mr. Allen served in the US Army where he reached therank of Captain. Mr. Allen is the chairman of the board for the Professional Association of Diving Instructors (PADI) and serves on the boards of directors of BellCanada Enterprises, the Fiduciary Management family of mutual funds, Fiduciary Management, Inc. (FMI) and OEConnections LLC. During the past five years,Mr. Allen served as a director of Harley-Davidson, Inc. (Chairman 2009-2012), Stream Global Services, Inc. and the World Triathlon Corp. He also has served as aboard member of many civic organizations, including the Greater Milwaukee Committee, Junior Achievement of Wisconsin, Children’s Hospital of Wisconsin andUnited Way in Milwaukee and currently serves as a board member of the Boys and Girls Club of Milwaukee. Mr. Allen is a graduate of the University of Kentuckywhere he earned a bachelor’s degree and a graduate of Boston University where he earned a Master of Business Administration, with honors. Mr. Allen possessesparticular knowledge and experience in technology industries, strategic planning and leadership of complex organizations, and board practices of other majorcorporations that make him particularly suited to serve as our lead director.103 Table of ContentsJames A. Bell retired as Executive Vice President of The Boeing Company, an aerospace company and manufacturer of commercial jetliners and militaryaircraft, in April 2012. Mr. Bell served as Boeing’s Executive Vice President, Corporate President and Chief Financial Officer from 2008 until February 2012.Previously, he served as Boeing’s Executive Vice President, Finance and Chief Financial Officer from 2003 to 2008; Senior Vice President of Finance andCorporate Controller from 2000 to 2003; and Vice President of Contracts and Pricing for Boeing Space and Communications from 1996 to 2000. Mr. Bell serveson the boards of directors of Apple, Inc., The Dow Chemical Company and JP Morgan Chase & Co. and the board of trustees of Rush University Medical Center.During the past five years, Mr. Bell also served as a director of the Chicago Urban League, World Business Chicago, the Chicago Infrastructure Trust and theEconomic Club of Chicago. Mr. Bell is a graduate of California State University at Los Angeles where he earned a bachelor’s degree. Mr. Bell possesses particularknowledge and experience in finance, accounting, regulatory issues, strategic planning and leadership of complex organizations, and board practices of other majorcorporations.Benjamin D. Chereskin is President of Profile Capital Management LLC, an investment management firm. Prior to founding Profile Capital in 2009, Mr.Chereskin was a Managing Director of Madison Dearborn Partners, LLC, a private equity investment firm, having co-founded the firm in 1992. Prior to thefounding of Madison Dearborn Partners, LLC, Mr. Chereskin was with First Chicago Venture Capital for nine years. Mr. Chereskin serves on the boards ofdirectors of Cinemark, Inc., Expel, Inc. and KIPP-Chicago. During the previous five years, Mr. Chereskin also served as a director of Boulder Brands, Inc., theUniversity of Chicago Laboratory School and University of Chicago Medicine. Mr. Chereskin is a graduate of Harvard College where he earned a bachelor’sdegree and a graduate of Harvard Business School where he earned a Master of Business Administration. Mr. Chereskin possesses particular knowledge andexperience in accounting, finance and capital market transactions, strategic planning and leadership of complex organizations, and board practices of other majorcorporations.Lynda M. Clarizio is the President of U.S. Media at The Nielsen Company (US), LLC, a global performance management company that provides acomprehensive understanding of what consumers watch and buy, a position she has held since August 2013. Prior to joining Nielsen, Ms. Clarizio served asExecutive Vice President, Corporate Development and Operations of AppNexus, Inc., a programmatic advertising platform, from November 2012 to April 2013.From 2009 to 2012, Ms. Clarizio served as Chief Executive Officer and President of INVISION, Inc., a provider of multi-platform advertising solutions to themedia industry. From 1999 to 2009, she held a variety of executive positions with AOL Inc., a media technology company, including most recently President ofPlatform-A (AOL’s consolidated advertising businesses) and President of Advertising.com (an AOL subsidiary). Prior to joining AOL, Ms. Clarizio was a partnerat the Washington, DC law firm of Arnold & Porter, where she practiced law from 1987 through 1999. Ms. Clarizio is a member of the Boards of Directors ofResonate and Human Rights First. She is also a member of the Leadership Council of Princeton University’s School of Engineering and Applied Science. Duringthe past five years, Ms. Clarizio also served as a director of Batanga Media. Ms. Clarizio is a graduate of Princeton University where she earned a bachelor’sdegree and a graduate of Harvard Law School where she earned a J.D. Ms. Clarizio possesses particular knowledge and experience in sales and marketing, finance,technology, strategic planning, and leadership of complex organizations.Paul J. Finnegan is the Co-Chief Executive Officer of Madison Dearborn Partners, LLC, a private equity investment firm. Prior to co-founding MadisonDearborn Partners, LLC in 1992, Mr. Finnegan was with First Chicago Venture Capital for ten years. Previously, he held a variety of marketing positions in thepublishing industry, both in the United States and in Southeast Asia. Mr. Finnegan has more than 30 years of experience in private equity investing with aparticular focus on investments in the communications industry. Mr. Finnegan is the chairman of the board for Government Sourcing Solutions, LLC and serves onthe board of directors of AIA Corporation. He is a Fellow of the Harvard Corporation, Treasurer of Harvard University, chair of the Harvard ManagementCompany and past member of the Harvard Board of Overseers and a Past President of the Harvard Alumni Association. Mr. Finnegan is a member of the Board ofDean’s Advisors at the Harvard Business School, a member of the Leadership Council of the Harvard School of Public Health and also a member of the Center forPublic Leadership’s Leadership Council at Harvard Kennedy School. He is the Past Chairman and current board member of Teach For America in Chicago, amember of Teach For America’s National Board and member of the board of directors of the Chicago Council on Global Affairs. During the previous five years,Mr. Finnegan also has served as a director for iPlan, LLC, Council Tree Hispanic Broadcasters, LLC and PAETEC Communications, Inc. Mr. Finnegan is agraduate of Harvard College where he earned a bachelor’s degree and a graduate of Harvard Business School where he earned a Master of BusinessAdministration. Mr. Finnegan possesses particular knowledge and experience in accounting, finance and capital market transactions, strategic planning andleadership of complex organizations, and board practices of other major corporations.104 Table of ContentsDavid W. Nelms is the Chairman and Chief Executive Officer of Discover Financial Services, a direct banking and payment services company. Mr. Nelmswas elected Chairman of the Board at Discover in January 2009, having served as Chief Executive Officer since 2004, and President and Chief Operating Officerfrom 1998 to 2004. Prior to joining Discover, Mr. Nelms worked at MBNA America Bank from 1991 to 1998, most recently as Vice Chairman. From 1990 to1991, he was a senior product manager for Progressive Insurance. Mr. Nelms served as a management consultant with Bain & Company from 1986 to 1990. Mr.Nelms also serves on the boards of directors of the Federal Reserve Bank of Chicago, Junior Achievement of Chicago and the Executives’ Club of Chicago. He is amember of the Financial Services Roundtable and a member of the Civic Committee of the Commercial Club of Chicago. Mr. Nelms is a graduate of University ofFlorida where he earned a bachelor’s degree in mechanical engineering and a graduate of Harvard Business School where he earned a Master of BusinessAdministration. Mr. Nelms possesses particular knowledge and experience in technology industries, accounting, finance, strategic planning and leadership ofcomplex organizations, and board practices of other major corporations.Joseph R. Swedish is the Chairman, President and Chief Executive Officer of Anthem, Inc., one of the country’s largest health insurers. Prior to joiningAnthem in March 2013, Mr. Swedish was President and Chief Executive Officer of Trinity Health, an eighteen-state integrated health care delivery system, from2004 to 2013. Mr. Swedish also has held CEO and senior leadership positions with Centura Health, Hospital Corporation of America and other healthcareenterprises, amongst others. Mr. Swedish also serves on the board of directors for the Blue Cross and Blue Shield Association, the National Institute for HealthCare Management, America’s Health Insurance Plans (Chairman), and Duke University’s Fuqua School of Business Board of Visitors. Mr. Swedish received hisbachelor’s degree from the University of North Carolina at Charlotte and his master’s degree in health administration from Duke University. Mr. Swedishpossesses particular knowledge and experience in the healthcare industry, technology, finance, strategic planning and leadership of complex organizations, andboard practices of other major corporations.Donna F. Zarcone is the President and Chief Executive Officer of The Economic Club of Chicago, a position she has held since February 2012. Sheserved as Interim President of The Economic Club of Chicago from October 2011 to February 2012. From January 2007 to February 2012, she served as thePresident, CEO and founder of D.F. Zarcone & Associates LLC, a strategy advisory firm. Prior to founding D.F. Zarcone & Associates, Ms. Zarcone was Presidentand Chief Operating Officer of Harley-Davidson Financial Services, Inc., a provider of wholesale and retail financing, credit card and insurance services for dealersand customers of Harley-Davidson. After joining Harley-Davidson Financial Services, Inc. in 1994 as Vice President and Chief Financial Officer, Ms. Zarcone wasnamed President and Chief Operating Officer in 1998. Prior to joining Harley-Davidson Financial Services, Inc., Ms. Zarcone served as Executive Vice President,Chief Financial Officer and Treasurer of Chrysler Systems Leasing, Inc. from 1982 through 1994 and in various management roles at KPMG/Peat Marwick from1979 through 1982. Ms. Zarcone serves on the boards of directors of Cigna Corporation and The Duchossois Group. During the previous five years, Ms. Zarconealso served as a director of The Jones Group Inc. She also serves as a board member of various civic and professional organizations, including The Economic Clubof Chicago and The University of Chicago Polsky Center for Entrepreneurship and Innovation. Ms. Zarcone also is a National Association of Corporate DirectorsGovernance Fellow. Ms. Zarcone is a graduate of Illinois State University where she earned a bachelor’s degree and a graduate of University of Chicago BoothSchool of Business where she earned a Master of Business Administration. Ms. Zarcone is a certified public accountant. Ms. Zarcone possesses particularknowledge and experience in accounting, finance, strategic planning and leadership of complex organizations, and board practices of other major corporations, andin her current role with The Economic Club of Chicago, continually monitors trends and business and economic issues nationally and globally.Director Nomination ProcessThe Board of Directors is responsible for nominating individuals for election to the Board and for filling vacancies on the Board that may occur between annualmeetings of stockholders. The Nominating and Corporate Governance Committee is responsible for identifying and screening potential candidates andrecommending qualified candidates to the Board for nomination. Third-party search firms may be and have been retained to identify individuals that meet thecriteria of the Nominating and Corporate Governance Committee. For example, Mr. Swedish and Mss. Addicott and Clarizio were recommended by a third-partysearch firm prior to their nomination and election by the Board as directors.The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders in the same manner in which it evaluatescandidates it identified, if such recommendations are properly submitted to the Company. Stockholders wishing to recommend nominees for election to the Boardshould submit their recommendations in writing to our Corporate Secretary by email at board@cdw.com or by mail at CDW Corporation, 200 North MilwaukeeAvenue, Vernon Hills, Illinois 60061. Nominations for the 2017 Annual Meeting of Stockholders must be received no later than June 21, 2017.Director QualificationsIn selecting director candidates, the Nominating and Corporate Governance Committee and the Board of Directors consider the105 Table of Contentsqualifications and skills of the candidates individually and the composition of the Board as a whole. Under our Corporate Governance Guidelines, the Nominatingand Corporate Governance Committee and the Board review the following for each candidate, among other qualifications deemed appropriate, when consideringthe suitability of candidates for nomination as director:•Principal employment, occupation or association involving an active leadership role•Qualifications, attributes, skills and/or experience relevant to the Company’s business•Ability to bring diversity to the Board, including complementary skills and viewpoints•Other time commitments, including the number of other boards on which the potential candidate may serve•Independence and absence of conflicts of interest as determined by the Board’s standards and policies, the listing standards of NASDAQ and other applicablelaws, regulations and rules•Financial literacy and expertise•Personal qualities, including strength of character, maturity of thought process and judgment, values and ability to work collegiallyDirector CompensationElements of CompensationThe table below sets forth the elements of our 2016 annual compensation program for our non-employee directors.2016 Annual Compensation ElementsAmountBoard Retainer$87,500Audit Committee Chair Retainer$20,000Compensation Committee Chair Retainer$15,000Nominating and Corporate Governance Committee Chair Retainer$10,000Annual Restricted Stock Unit Grant Value$137,500All retainers are paid quarterly in arrears and, if applicable, are prorated based upon Board or chair service during the calendar year.The annual restricted stock unit grant vests on the first anniversary of the grant date and entitles the director to receive shares of our common stock upon vesting.Directors may elect to defer receipt of common stock upon vesting in five year increments. In the year of appointment to the Board, a director receives a proratedportion of the annual restricted stock unit grant value based upon the number of months between appointment and the vesting date of the most recent annual grantto incumbent directors, which prorated award vests on the same vesting date as the most recent annual grant to incumbent directors.Stock Ownership GuidelinesThe Board believes that, in order to more closely align the interests of directors with the interests of the Company’s other stockholders, each non-employee directorshould maintain a minimum level of equity interests in the Company’s common stock. The Nominating and Corporate Governance Committee is responsible forperiodically reviewing the stock ownership guidelines for non-employee directors and making recommendations to the Board.Pursuant to our Corporate Governance Guidelines, each non-employee director must hold equity interests in the Company’s common stock equal to at least$500,000. Until such guideline is met, a director is required to retain 100% of the after-tax value of all vested equity awards earned under the Company’s non-employee director compensation program.Director Compensation ReviewAt the end of 2015, the Nominating and Corporate Governance Committee, in consultation with the Compensation Committee, reviewed the design andcompetitiveness of our non-employee director compensation program. The Nominating and Corporate Governance Committee considered input from theCompensation Committee’s independent compensation consultant and market data for the same peer group of companies that the Compensation Committee usesfor determining executive compensation as set forth in Part III - Item 11 - “Compensation Discussion and Analysis - Comparison to Relevant Peer Group”. Uponreview, the Nominating and Corporate Governance Committee determined that the design of the Company’s non-employee director compensation programcontinued to be aligned with market trends, but the total compensation was below the median of the peer group. The Nominating and Corporate GovernanceCommittee recommended, and the Board approved, the following increases106 Table of Contentsfor 2016 to align director compensation with the market median range: (1) the cash retainer for Board service was increased by $12,500 to $87,500; (2) the AuditCommittee and Compensation Committee Chair retainers each were increased by $5,000 to $20,000 and $15,000, respectively; and (3) the annual restricted stockunit grant value was increased by $12,500 to $137,500.In June 2016, at the time Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. exited their private equity positions in the Company, theNominating and Corporate Governance Committee also recommended to the Board, and the Board approved, Paul J. Finnegan’s participation in the Company’snon-employee director compensation program effective July 1, 2016. Previously, the Company’s non-employee director compensation program did not apply tonon-employee directors who were Managing Directors of Madison Dearborn Partners, LLC or Providence Equity Partners L.L.C.2016 Director Compensation Table (1) The table below summarizes the compensation paid by the Company to our non-employee directors for the fiscal year ended December 31, 2016:NameFees earnedor paid in cash($)Stock Awards($) (2)Total($)Virginia C. Addicott (3)72,837137,514210,351Steven W. Alesio102,500137,514240,014Barry K. Allen97,500137,514235,014James A. Bell87,500137,514225,014Benjamin D. Chereskin87,500137,514225,014Lynda M. Clarizio87,500137,514225,014Paul J. Finnegan (4)43,75091,683135,433David W. Nelms87,500137,514225,014Joseph R. Swedish87,500137,514225,014Donna F. Zarcone107,500137,514245,014(1) Glenn M. Creamer, Michael J. Dominguez and Robin P. Selati were members of our Board until June 27, 2016, but were not eligible for our non-employeedirector compensation program as Managing Directors of either Madison Dearborn Partners, LLC or Providence Equity Partners L.L.C.(2) The amounts reported represent the grant date fair value of restricted stock units granted in 2016, calculated based on the closing stock price on the date ofgrant in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASBASC Topic 718”). The following table summarizes outstanding stock awards held by each above director on December 31, 2016, including restricted stockunits on which settlement has been deferred and restricted stock units acquired through the deemed reinvestment of dividend equivalents:NameRestricted Stock Units Outstanding(#)Virginia C. Addicott3,493Steven W. Alesio12,137Barry K. Allen12,137James A. Bell6,610Benjamin D. Chereskin3,493Lynda M. Clarizio3,493Paul J. Finnegan2,287David W. Nelms12,137Joseph R. Swedish3,493Donna F. Zarcone12,137(3) Appointed to our Board on March 2, 2016.(4) Commenced participation in the Company’s non-employee director compensation program effective July 1, 2016. In 2016, Mr. Finnegan’s cash compensationfor Board service was paid to Madison Dearborn Partners, LLC.107 Table of ContentsOur Executive OfficersSee Part I - “Executive Officers” for information about our executive officers, which is incorporated by reference in this Item 10.Corporate GovernanceOur success is built on the trust we have earned from our customers, coworkers, business partners, investors and communities, and trust sustains our success. Partof this trust stems from our commitment to good corporate governance. To provide a framework for effective governance, our Board of Directors has adoptedCorporate Governance Guidelines, which outline the operating principles of our Board and the composition and working processes of our Board and itscommittees. The Nominating and Corporate Governance Committee periodically reviews our Corporate Governance Guidelines and developments in corporategovernance and recommends proposed changes to the Board for approval.Our Corporate Governance Guidelines, along with other corporate governance documents such as committee charters and The CDW Way Code (our code ofbusiness conduct and ethics), are available on our website at www.cdw.com by clicking on Investor Relations and then Corporate Governance.Independence of Our Board of DirectorsUnder our Corporate Governance Guidelines and the listing standards of NASDAQ, a majority of our Board members must be independent. The Board of Directorsannually determines whether each of our directors is independent. In determining independence, the Board follows the independence criteria set forth in theNASDAQ listing standards and considers all relevant facts and circumstances.Under the NASDAQ independence criteria, a director cannot be considered independent if he or she has one of the relationships specifically enumerated in theNASDAQ listing standards. In addition, the Board must affirmatively determine that a director does not have a relationship that, in the opinion of the Board, wouldinterfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has affirmatively determined that each of ourcurrent directors is independent under the applicable listing standards of NASDAQ, other than our Chief Executive Officer, Thomas E. Richards.Board of Directors Leadership StructureThomas E. Richards, our Chief Executive Officer, serves as the Chairman of our Board of Directors and Barry K. Allen, a non-executive and independent director,serves as the Lead Director of our Board of Directors. The Board believes that the combined role of Chairman and Chief Executive Officer, together with theappointment of an independent Lead Director, the independence of all Board members other than our Chief Executive Officer, and the use of regular executivesessions of the independent directors, achieves an appropriate balance between the effective development of key strategic and operational objectives andindependent oversight of management’s execution of those objectives.The Board believes that having the Company’s Chief Executive Officer serve as the Chairman is in the best interest of its stockholders at this time because thisstructure ensures a seamless flow of communication between management and the Board, in particular with respect to the Board’s oversight of the Company’sstrategic direction, as well as the Board’s ability to ensure management’s focused execution of that strategy. The Board additionally believes that because the ChiefExecutive Officer is the director most familiar with the Company’s business, industry and day-to-day operations, he is well-positioned to help the Board focus onthose issues of greatest importance to the Company and its stockholders and to assist the Board with identifying the Company’s strategic priorities, as well as theshort-term and long-term risks and challenges facing the Company. While independent directors have invaluable experience and expertise from outside theCompany and its business, giving them different perspectives regarding the development of the Company’s strategic goals and objectives, the Chief ExecutiveOfficer is well-suited to bring Company-specific experience and industry expertise to his discussions with independent directors.Under our Corporate Governance Guidelines, the primary roles of the Lead Director are to assist the Chairman in managing the governance of the Board and toserve as a liaison between the Chairman and other directors. The Lead Director: (1) presides at all meetings of the Board at which the Chairman is not present,including all executive sessions of the non-management and/or independent directors; (2) has the authority to call meetings of the non-management and/orindependent directors; (3) serves as a contact for interested parties who wish to communicate with non-management directors; and (4) provides input to theChairman on the annual Board calendar, agenda items and schedules for each Board meeting and the materials and information to be presented to the Board.108 Table of ContentsThe Board does not believe that a single leadership structure is right for all companies at all times, however, so the Board will periodically review its leadershipstructure to determine, based on the circumstances at the time, whether it and its committees are functioning effectively.Board and Committee MeetingsUnder our Corporate Governance Guidelines, our directors are expected to attend meetings of the Board and applicable committees and annual meetings ofstockholders.In 2016, the Board held four meetings. In 2016, each of the directors attended at least 75% of the aggregate of all meetings of the Board and the committees onwhich he or she served (during the periods for which he or she served on the Board and such committees). In addition, thirteen of the directors then in officeattended our 2016 Annual Meeting of Stockholders.Board CommitteesOur Board has three committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Our Board hasadopted charters for each of these committees, which are available on our website at www.cdw.com . Under the committees’ charters, the committees reportregularly to the Board and as the Board requests. Additional information on each of these committees is set forth below.Audit CommitteeChairperson: Donna F. ZarconeOther Members of the Committee: Virginia C. Addicott, James A. Bell, Benjamin D. Chereskin, David W. NelmsMeetings Held in 2016: 7Primary Responsibilities:Our Audit Committee is responsible for, among other things: (1) appointing, compensating, retaining, evaluating, terminating and overseeing our independentregistered public accounting firm; (2) discussing with our independent registered public accounting firm its independence from management; (3) reviewing withour independent registered public accounting firm the scope and results of its audit; (4) approving all audit and permissible non-audit services to be performed byour independent registered public accounting firm; (5) overseeing the accounting and financial reporting process and discussing with management and ourindependent registered public accounting firm the interim and annual financial statements that we file with the U.S. Securities and Exchange Commission(“SEC”); (6) reviewing and monitoring our accounting principles, accounting policies and financial and accounting controls; (7) establishing procedures for theconfidential and anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters; (8) reviewing and approving orratifying related person transactions; (9) overseeing our business process assurance function (internal audit); and (10) reviewing the Company’s compliance andethics and risk management programs, including with respect to cybersecurity.Independence:Each member of the Audit Committee meets the audit committee independence requirements of NASDAQ and the rules under the Securities Exchange Act of1934 (the “Exchange Act”).The Board has designated each member of the Audit Committee as an “audit committee financial expert.” Each member of the Audit Committee is financiallyliterate, knowledgeable and qualified to review financial statements.109 Table of ContentsCompensation CommitteeChairperson: Steven W. AlesioOther Members of the Committee: Barry K. Allen, Lynda M. Clarizio, Paul J. Finnegan, Joseph R. SwedishMeetings Held in 2016: 4Primary Responsibilities:Our Compensation Committee is responsible for, among other things: (1) reviewing and approving the compensation of our chief executive officer and otherexecutive officers; (2) reviewing and approving employment agreements and other similar arrangements between CDW and our executive officers; (3)administering our stock plans and other incentive compensation plans; (4) periodically reviewing and recommending to the Board any changes to our incentivecompensation and equity-based plans; and (5) reviewing trends in executive compensation.Independence:Each member of the Compensation Committee meets the compensation committee independence requirements of NASDAQ and the rules under the ExchangeAct.Nominating and Corporate Governance CommitteeChairperson: Barry K. AllenOther Members of the Committee: Virginia C. Addicott, Steven W. Alesio, James A. Bell, Benjamin D. Chereskin, Lynda M. Clarizio, Paul J. Finnegan, DavidW. Nelms, Joseph R. Swedish, Donna F. ZarconeMeetings Held in 2016: 4Primary Responsibilities:Our Nominating and Corporate Governance Committee is responsible for, among other things: (1) identifying individuals qualified to become members of ourBoard of Directors, consistent with criteria approved by our Board; (2) overseeing the organization of our Board to discharge the Board’s duties andresponsibilities properly and efficiently; (3) identifying best practices and recommending corporate governance principles; (4) developing and recommending toour Board a set of corporate governance guidelines and principles applicable to us; (5) reviewing compliance with The CDW Way Code, our code of businessconduct and ethics; (6) reviewing and approving the compensation of our directors; (7) setting performance goals for and reviewing the performance of our chiefexecutive officer; and (8) executive succession planning.Independence:Each member of the Nominating and Corporate Governance Committee meets the nominating and corporate governance committee independence requirementsof NASDAQ.Board of Directors Role in Risk OversightEnterprise Risk Management ProgramOur Board of Directors, as a whole and through the Audit Committee, oversees our Enterprise Risk Management Program (“ERM Program”), which is designed todrive the identification, analysis, discussion and reporting of our high priority enterprise risks. The ERM Program facilitates constructive dialog at the seniormanagement and Board levels to proactively identify and manage enterprise risks. Under the ERM Program, senior management develops a holistic portfolio ofenterprise risks by facilitating business and supporting function assessments of strategic, operational, financial reporting and compliance risks, and helps to ensureappropriate response strategies are in place.Our Audit Committee is primarily responsible for overseeing our risk management processes on behalf of the full Board. Enterprise risks are considered in businessdecision making and as part of our overall business strategy. Our management team, including our executive officers, is primarily responsible for managing therisks associated with the operation and business of our company. Senior management provides regular updates to the Audit Committee and periodic updates to thefull Board on the ERM Program, and reports to both the Audit Committee and the full Board on any identified high priority enterprise risks.Compensation Risk AssessmentWe conducted an assessment of the risks associated with our compensation practices and policies, and determined that risks arising from such policies andpractices are not reasonably likely to have a material adverse effect on the Company. In conducting the assessment, we undertook a review of our compensationphilosophies, our compensation governance structure and the design and110 Table of Contentsoversight of our compensation programs. Overall, we believe that our programs include an appropriate mix of fixed and variable features, and short- and long-termincentives with compensation-based goals aligning with corporate goals. Centralized oversight helps ensure compensation programs align with the Company’sgoals and compensation philosophies and, along with other factors, operate to mitigate against the risk that such programs would encourage excessive risk-taking.Code of Business Conduct and EthicsWe have adopted The CDW Way Code, our code of business conduct and ethics, which is applicable to all of our coworkers and our directors. Additionally, withinThe 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 internaldisclosure committee and all managers and above in our finance department. A copy of this code is available on our website at www.cdw.com . If we make anysubstantive amendments to the Financial Integrity Code of Ethics or grant any waiver from a provision to our chief executive officer, principal financial officer orprincipal accounting officer, we will disclose the nature of such amendment or waiver on our website or in a Current Report on Form 8-K.Hedging, Short Sales and Pledging PoliciesOur Policy on Insider Trading, which applies to all coworkers, Board members and consultants, includes policies on hedging, short sales and pledging of oursecurities. Our policy prohibits hedging or monetization transactions involving Company securities, such as prepaid variable forwards, equity swaps, collars andexchange funds. It also prohibits short sales of our securities, including sales of securities that are owned with delayed delivery. In addition, it prohibits holdingCompany securities in a margin account or pledging Company securities as collateral for a loan except in limited circumstances with pre-approval from our ChiefLegal Officer, which pre-approval will only be granted when such person clearly demonstrates the financial capacity to repay the loan without resort to any pledgedsecurities.Executive Compensation Policies and PracticesSee Part III - Item 11 - “Compensation Discussion and Analysis” for a discussion of the Company’s executive compensation policies and practices.Communications with the Board of DirectorsStockholders who would like to communicate with the Board of Directors or its committees may do so by writing to them via the Company’s Corporate Secretaryby email at board@cdw.com or by mail at CDW Corporation, 200 North Milwaukee Avenue, Vernon Hills, Illinois 60061. Correspondence may be addressed tothe collective Board of Directors or to any of its individual members or committees at the election of the sender. Any such communication is promptly distributedto the director or directors named therein unless such communication is considered, either presumptively or in the reasonable judgment of the Company’sCorporate Secretary, to be improper for submission to the intended recipient or recipients. Examples of communications that would presumptively be deemedimproper for submission include, without limitation, solicitations, communications that raise grievances that are personal to the sender, communications that relateto the pricing of the Company’s products or services, communications that do not relate directly or indirectly to the Company and communications that arefrivolous in nature.Compensation Committee Interlocks and Insider ParticipationDuring 2016, our Compensation Committee consisted of Steven W. Alesio, Barry K. Allen, Lynda M. Clarizio, Paul J. Finnegan (appointed June 27, 2016) andJoseph R. Swedish. No member of the Compensation Committee was, during 2016 or previously, an officer or employee of the Company or its subsidiaries. Inaddition, during 2016, there were no compensation committee interlocks required to be disclosed.Item 11. Executive CompensationCOMPENSATION DISCUSSION AND ANALYSISThis Compensation Discussion and Analysis (our “CD&A”) provides an overview of our executive compensation program for 2016 and our executivecompensation philosophies and objectives.Our named executive officers consist of our Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated executive officers(“Named Executive Officers”). For 2016, our Named Executive Officers were:111 Table of ContentsNameTitleThomas E. RichardsChairman, President and Chief Executive OfficerAnn E. ZieglerSenior Vice President and Chief Financial OfficerDouglas E. EckroteSenior Vice President - Small Business Sales and eCommerceChristine A. LeahySenior Vice President - International, Chief Legal Officer and CorporateSecretaryJonathan J. StevensSenior Vice President, Operations and Chief Information OfficerThis CD&A is divided into three sections:Overview Ÿ 2016 Business Highlights Ÿ Our Executive Compensation Program Ÿ Our Executive Compensation Practices Ÿ 2016 Say-on-Pay VoteWhat We Pay and Why Ÿ 2016 Executive Compensation Decisions Ÿ Alignment of Executive Compensation Program with Operational Performance Ÿ Base Salary Ÿ Annual Cash Incentive Awards (Senior Management Incentive Plan) Ÿ Long-Term Incentive Program Ÿ Other Elements of Our 2016 Executive Compensation ProgramHow We Make ExecutiveCompensation Decisions Ÿ Our Executive Compensation Philosophies and Objectives Ÿ Role of the Board, Compensation Committee and our Executive Officers Ÿ Guidance from Independent Compensation Consultant Ÿ Comparison to Relevant Peer GroupOVERVIEWWe are a leading provider of integrated information technology (IT) solutions in the United States, Canada and the United Kingdom serving a growing andfragmented market. We help over 250,000 small, medium and large business, government, education and healthcare customers by delivering solutions to meet theirincreasingly complex IT needs. Our full suite of offerings include discrete hardware and software products to integrated IT solutions such as mobility, security,data center, virtualization and digital workspace. We are technology “agnostic,” with a solutions portfolio including more than 100,000 products and services frommore than 1,000 leading and emerging brands. Our solutions are delivered in physical, virtual and cloud-based environments through over 5,500 customer-facingcoworkers, including sellers, highly-skilled technology specialists and advanced service delivery engineers. As we have evolved with the IT market, we have builtan organization with significant scale, reach and deep intimate knowledge of customer and partner needs. When coupled with our market presence, our solutionsset that addresses the entire IT lifecycle and our large and highly-skilled sales and technical organization, we deliver unique value - for both our customers and ourvendor partners.2016 Business HighlightsOur 2016 performance demonstrated the strength of our business model as we captured market share and delivered excellent profitability while continuing to investin our future. For the year, we delivered:•Net sales (which include results from our August 2015 acquisition of CDW UK, the UK-based integrated solutions provider previously known as Kelway)growth of 7.6%•Constant currency net sales growth of 8.3%•Adjusted EBITDA growth of 9.7%•Non-GAAP net income per diluted share growth of 16.9%, fueled by strong operating profits, incremental earnings from the inclusion of CDW UK and therepurchase of more than 8.7 million shares.112 Table of ContentsSee Appendix A to this Item 11 for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure.There were three main drivers of performance in 2016:•First, our nimble business model, which enables us to quickly capitalize on market trends. In 2016, this helped us deliver a higher mix of “100% grossmargin solutions and services,” contributing to our achievement of an adjusted EBITDA margin for the year above our mid-7% target range.•Second, the power of our balanced portfolio of customer end-markets, with five US channels each with over $1 billion in annual Net sales and combinedsales from Canadian and UK operations of more than $1.3 billion. In 2016, this diversity of end-markets enabled us to more than offset the impact of sloweconomic conditions on sales to US Medium and Large business customers, and deliver mid-single digit organic Net sales growth.•Third, our diverse product suite of more than 100,000 products from over 1,000 leading and emerging brands. This breadth ensures we are well-positioned to meet our customer’s needs - whether transactional or highly complex. In 2016, US hardware sales increased 3%, software sales increased8% and services increased 12%.In 2016, in addition to our strong financial results, including free cash flow of $684 million, we continued to invest in our future and made excellent progressagainst our three part strategy:See Appendix A to this Item 11 for a reconciliation of free cash flow, which is a non-GAAP financial measure, to the most directly comparable GAAP measure.113 Table of ContentsWe believe our 2016 results, strategic progress and capital allocation actions were recognized by the stock market. The following chart shows how a $100investment in the Company’s common stock on June 27, 2013, the date our common stock first traded on the Nasdaq Global Select Market (“NASDAQ”) after ourIPO, would have grown to $315 on December 31, 2016, with dividends reinvested quarterly. The chart also shows CDW’s significant outperformance versus theS&P Mid Cap 400 Index ($100 investment would have grown to $153) and the Company’s 2016 compensation peer group (see “Comparison to Relevant PeerGroup” in this CD&A) ($100 investment would have grown to $147) over the same period, with dividends reinvested quarterly.The Company’s strong operational performance, including its Adjusted EBITDA, Non-GAAP net income per diluted share and Free cash flow performance,contributed to payouts under the Company’s 2016 annual cash bonus program and 2014 performance-based equity awards. Please see the “Annual Cash IncentiveAwards (Senior Management Incentive Plan)” and “Long-Term Incentive Programs” sections of this CD&A for further information regarding these programs,including the award opportunities, performance measures and payouts under these programs.Our Executive Compensation ProgramOur executive compensation program is designed to drive above-market results and is built upon our performance-driven culture and long-standing executivecompensation philosophies and objectives, as described below under “Our Executive Compensation Philosophies and Objectives,” which we believe have been keycontributors to our long-term success. The table below outlines each of the principal elements of the Company’s executive compensation program:114 Table of ContentsThe chart below illustrates the pay for performance design of our 2016 executive compensation program. For 2016, approximately 86% of the target compensationof our Chief Executive Officer was variable and is realized only if the applicable financial performance goals are met and/or our stock price increases.Our Executive Compensation PracticesThe Compensation Committee reviews on an ongoing basis the Company’s executive compensation program to evaluate whether it supports the Company’sexecutive compensation philosophies and objectives and is aligned with stockholder interests. Our executive compensation practices include the following, each ofwhich the Compensation Committee believes reinforces our executive compensation objectives:115 Table of Contents2016 Say-on-Pay VoteAs noted above, in its compensation review process, the Compensation Committee considers whether the Company’s executive compensation program is alignedwith the interests of the Company’s stockholders. In that respect, as part of its review of the Company’s executive compensation program, the CompensationCommittee considered the approval by approximately 99% of the votes cast for the Company’s say-on-pay vote at our 2016 Annual Meeting of Stockholders. TheCompensation Committee determined that the Company’s executive compensation philosophies and objectives and compensation elements continued to beappropriate and did not make any changes to the Company’s executive compensation program in response to the 2016 say-on-pay vote.WHAT WE PAY AND WHY2016 Executive Compensation DecisionsConsistent with our pay-for-performance philosophy and executive compensation program objectives described below under “Our Executive CompensationPhilosophies and Objectives,” in determining the 2016 adjustments to executive compensation levels and the mix of compensation elements for each NamedExecutive Officer, the Compensation Committee and our Chief Executive Officer (in making recommendations regarding Named Executive Officer compensationother than his own) considered each Named Executive Officer’s prior performance, Company performance, the compensation levels paid to similarly situatedexecutive officers at the Company, the competitive median of the market data to provide a perspective on external practices, and input from the CompensationCommittee’s independent compensation consultant. In approving 2016 compensation adjustments, the Compensation Committee considered, in particular, thecompensation levels of the Named Executive Officers as compared to the competitive median of the market data, noting that some of the Company’s NamedExecutive Officers were meaningfully positioned below the competitive median despite the Company’s above market performance.As a result of several years of strong results coupled with previously granted equity awards while the Company was privately owned, our Named ExecutiveOfficers have accumulated significant value through their equity ownership in CDW. When determining 2016 compensation for each of our Named ExecutiveOfficers, the Compensation Committee and our Chief Executive Officer considered this accumulated value in conjunction with the leadership opportunitiespresented to each executive to motivate116 Table of Contentshim or her in 2016 and beyond.Alignment of Executive Compensation Program with Operational PerformanceOur executive compensation program is designed to drive sustained meaningful profitable growth and shareholder value creation by aligning all members of seniormanagement around common performance goals. The Compensation Committee selects performance goals that it believes are core drivers of the Company’soperational performance and shareholder value creation. By using performance goals under the Company’s incentive programs that are based on EBITDA,earnings per share and free cash flow, as adjusted in accordance with the terms of the awards, as well as market share gains, the Compensation Committee believesthat the program reflects an appropriate balance with respect to incentivizing profitability, top-line growth and cash flow generation.To drive performance against our program goals, when communicating the goals to the senior management team, the Company includes extensive communicationson what members of senior management, together with their teams, can do on a daily basis to impact achievement of these goals. We believe this understanding ofthe link between individual/team performance and the achievement of the Company’s financial performance goals helps the entire organization focus on thoseactions that have the greatest potential to drive sustained meaningful profitable growth and stockholder value creation.Base SalaryThe Compensation Committee generally sets base salaries for executives, including our Named Executive Officers, below the competitive market median ofsalaries for executives in similar positions. Aligned with our compensation philosophies and objectives, a significant portion of each Named Executive Officer’sannual target cash compensation is at risk, to provide a strong connection between pay and performance. Accordingly, in 2016, Mr. Richards’ annual target cashcompensation was weighted 40% base salary and 60% annual incentive target. The table below sets forth the 2016 base salary level for each of our NamedExecutive Officers:Named Executive Officer 2016 Base Salary Thomas E. Richards $900,000Ann E. Ziegler $551,562Douglas E. Eckrote $401,250Christine A. Leahy $453,201Jonathan J. Stevens $321,750Annual Cash Incentive Awards (Senior Management Incentive Plan)We provide our senior management with short-term incentive compensation through our annual cash bonus program, the Senior Management Incentive Plan(“SMIP”). Short-term compensation under SMIP represents a majority of each Named Executive Officer’s total target cash compensation opportunity in a givenyear.Setting the Target Opportunity under SMIPBecause our Named Executive Officer base salary levels historically have been targeted to be below the competitive market median, the Compensation Committeeuses an above-median target SMIP opportunity to bring targeted total cash compensation within the median range.2016 SMIP Pay for Performance AlignmentThe Compensation Committee undertakes a rigorous review and analysis to establish annual performance goals under SMIP that require above-marketperformance. Factors considered by the Compensation Committee in establishing the performance goals include US IT market growth rate expectations and ourmarket share gain expectations, as well as assumptions regarding our productivity gains and investments.For 2016, the Compensation Committee established the following goals and payout levels under SMIP:•Consistent with the 2015 SMIP design, the Compensation Committee chose Adjusted EBITDA and market share growth (based upon sales) as our SMIPperformance goals. The Compensation Committee chose this combination of performance goals because together they take into account not only our absoluteperformance but also performance relative to the market.•Adjusted EBITDA performance goal was set at $1,102 million, which was based on a growth rate above US IT market growth rate expectations. Whenestablishing the performance goals under SMIP, the Compensation Committee determined to exclude the items set forth in the Adjusted EBITDA reconciliationincluded in Appendix A to this Item 11. In addition, the Compensation117 Table of ContentsCommittee determined to exclude the effect of currency fluctuations from the payout calculations as the Compensation Committee believed that compensationshould not be based on factors outside of the control of the SMIP participants. Under this plan design, performance goals and results are calculated usingexchange rates determined at the time the performance goals were established.•No payout unless 2016 Adjusted EBITDA at or above 2015 Adjusted EBITDA.•Payout range from 0% to 200% of target awards for performance against the Adjusted EBITDA performance goal.•Market share governor would reduce Adjusted EBITDA-based payouts at all performance levels unless we gained market share. The threshold, target and maximum payout opportunities under the SMIP payout curve are set forth below: Adjusted EBITDA performance goal (2)Market share governor (3)Payout opportunity (1)Adjusted EBITDA(in millions)% attainment ofperformance goalGrow (% of targetbonus)Constant/Decline(% of target bonus)Maximum$1,212.1110%200%180%Adjusted EBITDA Target$1,101.9100%100%90%Threshold$1,018.492.4%25%15%(1) Payouts are determined based on various performance achievement levels for Adjusted EBITDA and market share changes. Payouts for performance betweenthese various performance achievement levels are calculated using straight line interpolation.(2) See Appendix A to this Item 11 for a reconciliation of Adjusted EBITDA to income from operations.(3) Market share changes were measured internally based on data from three industry surveys and reports and, based on the availability of data, financialinformation regarding two publicly traded resellers and three publicly traded technology distributors.2016 SMIP Results and PayoutsOur 2016 Adjusted EBITDA measured on a constant currency basis was $1,119 million, and the Compensation Committee determined that we had achieved101.6% of our Adjusted EBITDA performance goal. In addition, based upon industry surveys and reports and financial information from other publicly tradedcompanies in our market (see footnote (3) above), the Compensation Committee determined that our market share grew. The SMIP payout percentage for theNamed Executive Officers therefore was 115.7% of their 2016 SMIP targets. The table below sets forth the SMIP bonus targets and payouts to each of our NamedExecutive Officers based upon 2016 performance:Named Executive Officer SMIP Bonus Target Calculated SMIP Payout Thomas E. Richards $1,350,000 $1,561,768Ann E. Ziegler $680,670 $787,443Douglas E. Eckrote $573,750 $663,751Christine A. Leahy $434,377 $502,516Jonathan J. Stevens $483,250 $559,055Long-Term Incentive ProgramUnder our long-term incentive program, the Compensation Committee has the authority to award various forms of long-term incentive grants, including stockoptions, performance-based awards and restricted stock units. The Compensation Committee’s objectives for the 2016 long-term incentive awards were to:•Focus executives on key performance metrics aligned with long-term stockholder value creation and the Company’s long-term strategic plan and capitalallocation plan.•Establish a direct link between compensation and the achievement of longer-term financial objectives.•Retain the services of executives through multi-year vesting provisions.For 2016, the annual long-term incentive grant was delivered in the form of performance shares and stock options, with the following key elements to driveCompany performance and align with stockholder interests:118 Table of ContentsPerformance Sharesž 50% of target long-term incentive opportunityž 2016-2018 performance period with 0-200% payout curve (threshold payout of 50%)ž Vest at the end of the performance period based upon attainment of (1) cumulative annual adjusted free cash flow(“adjusted FCF”) and (2) cumulative annual non-GAAP net income per diluted share (“adjusted EPS”) performancegoals, each calculated as described belowStock Optionsž 50% of target long-term incentive opportunityž Only have value if CDW stock price increasesž Vest in 1/3 annual increments with 10 year maximum term2016 Long-Term Incentive Program Pay for Performance AlignmentFor 2016, 100% of the long-term incentive awards granted to the Named Executive Officers consisted of performance-based equity awards. Stock options havevalue to an award recipient only if our stock price appreciates, while the performance shares have value if and only to the extent that the pre-establishedquantitative performance metrics relating to adjusted FCF and adjusted EPS, as described below, are achieved during the three-year performance period. TheCompensation Committee selected adjusted FCF and adjusted EPS as the metrics for the performance shares because it believes successful performance againstthese measures promotes the creation of long-term shareholder value. In selecting these metrics, the Company focused on earnings and cash flow as criticalmeasures of operational success, but distinguished the performance share metrics from the SMIP metric (Adjusted EBITDA). By including interest, taxes,depreciation and amortization in the measure of earnings, and including interest, taxes and working capital in the measure of cash flow, the CompensationCommittee intends to provide a stronger linkage to longer-term growth in stockholder value. Consistent with the SMIP design, the performance goals under the2016 performance share awards will be determined on a constant currency basis as the Compensation Committee believed that compensation should not be basedon factors outside of the control of program participants. Under this plan design, the performance goals and results will be calculated using exchange ratesdetermined at the time the performance goals were established. The Committee established the payout curves for the performance shares to encourage strong,focused performance. Given the economic and market conditions at the time the targets were set, the target payout levels were designed to be challenging butachievable, while payouts at the maximum levels were designed to be stretch goals.Under the performance share agreements, adjusted FCF and adjusted EPS are generally calculated as follows:* Non-GAAP net income is defined as net income, adjusted for the items set forth in the Company’s earnings releases which may include, among otheritems, amortization of intangibles, non-cash equity-based compensation, losses or gains on long-term debt extinguishments and acquisition andintegration expenses. Free cash flow is defined as net cash from operating activities minus capital expenditures plus or minus net change inaccounts payable-inventory financing each year during the performance period.** The impact of extraordinary, unusual, infrequently occurring, non-recurring and unanticipated events will be excluded, such as severance expensesattributable to a reduction in force, asset impairments, reserves for uncertain tax positions and reserves for loss contingencies (or payments forsettlements or judgments), each as determined under GAAP, and the effect of any change in tax laws, accounting principles or other laws orregulations affecting results.119 Table of ContentsSetting Award Levels under 2016 Long-Term Incentive ProgramIn determining the 2016 long-term incentive award levels for Named Executive Officers, the Compensation Committee compared the target total directcompensation of each Named Executive Officer to the competitive market median. The table below sets forth the target award value, as of the date of grant, of thelong-term incentive award received by each Named Executive Officer under our 2016 long-term incentive program, which was delivered 50% in performanceshares and 50% in stock options:Executive Amount (1) Thomas E. Richards $4,000,000Ann E. Ziegler $1,400,000Douglas E. Eckrote $450,000Christine A. Leahy $900,000Jonathan J. Stevens $400,000(1) Amounts reported in this column represent the target equity award granted to each Named Executive Officer in 2016, with the number of shares subject to theperformance share and stock option awards determined based on our closing stock price on the date of grant and a conversion ratio of three to one for stockoptions versus full value awards. The target value of the stock option awards differs from the compensation reported in the Summary Compensation Table dueto the calculation of the grant date fair value in the Summary Compensation Table based on a Black-Scholes option pricing model, which incorporates variousassumptions including volatility, expected term, risk-free interest rates and expected dividend yield. Commencing in 2017, the conversion ratio for stock optionsversus full value awards will be based on this Black-Scholes option pricing model.2014 Long-Term Incentive Program Results and PayoutsUnder the terms of the performance share units (“PSUs”) granted as part of the 2014 long-term incentive program, 2016 represented the final year of the three-yearperformance period for the 2014 PSUs. The 2014 PSUs vested based on the attainment of cumulative performance goals relating to adjusted FCF and adjusted EPSduring the 2014-2016 performance period, with each goal weighted equally in the determination of the vesting level. These performance goals were set in 2014based on the Company’s strategic plans at the time. Based on performance, participants were eligible to receive a payout ranging from 0% - 200% of target, with athreshold payout opportunity equal to 50% of target.The threshold, target and maximum payout opportunities under the 2014 PSU payout curve are set forth below: 2014-2016 Performance Goals (1) Adjusted Earnings Per ShareAdjusted Free Cash FlowPayout opportunity (2)Payout (% of target)Adjusted Earnings PerShare% attainment ofperformance goalAdjusted Free CashFlow(in millions)% attainment ofperformance goalMaximum200%$8.54115%$1,175115%Target100%$7.43100%$991 - $1,053 (3) 100%Threshold50%$6.6689.7%86985%(1) Under the terms of the 2014 PSU award agreements, adjusted EPS and adjusted FCF were each weighted equally and calculated as described above withrespect to the 2016 performance share awards, but also adjusted to exclude unbudgeted costs and benefits associated with corporate transactions or events;corporate restructurings; and costs associated with the Company’s new headquarters.(2) Payouts are determined based on various performance achievement levels for adjusted EPS and adjusted FCF. Payouts for performance between these variousperformance achievement levels are calculated using straight line interpolation.(3) Represents the range of achievement levels that would have resulted in a target payout for the adjusted FCF performance goal.For the 2014-2016 performance period, the Company achieved cumulative adjusted EPS and cumulative adjusted FCF of $8.40 and $1,402 million, respectively,resulting in the vesting level for the 2014 PSUs at 193.5% of target. The table below sets forth the target number of shares subject to the 2014 PSUs and thenumber of shares earned based on actual performance during the 2014 - 2016 performance period:120 Table of ContentsNamed Executive Officer Target Shares Subject to2014 PSU Award (#) Shares Earned under 2014PSU Award (#) (1)Thomas E. Richards 66,900 129,462Ann E. Ziegler 14,409 27,884Douglas E. Eckrote 9,263 17,925Christine A. Leahy 13,380 25,892Jonathan J. Stevens 8,234 15,934(1) Pursuant to the terms of the award agreements, participants are eligible to receive dividend equivalents with respect to dividends paid prior to the settlement ofthe award. The earned shares reported in this table do not include additional shares acquired through the deemed reinvestment of dividend equivalents prior tosettlement of the award. The earned shares, including shares acquired through the deemed reinvestment of dividends through December 31, 2016, are reportedin the 2016 Stock Vested Table.Other Elements of Our 2016 Executive Compensation ProgramSeverance ArrangementsDuring 2016, the Named Executive Officers were each subject to a compensation protection agreement that provided for severance benefits upon certain qualifyingterminations of employment with the Company (the “Compensation Protection Agreements”). The Compensation Committee believes that these severancebenefits: (1) help secure the continued employment and dedication of our Named Executive Officers; (2) enhance the Company’s value to a potential acquirerbecause our Named Executive Officers have noncompetition, nonsolicitation and confidentiality provisions that apply after any termination of employment,including after a change in control of the Company; and (3) are important as a recruitment and retention device, as many of the companies with which we competefor executive talent have similar agreements in place for their senior management. Consistent with market practices, the Compensation Protection Agreements donot include change in control-related tax gross-ups and are for three year fixed terms, with certain term extensions in the event of a “potential change in control” or“change in control” during the term.In March 2016, each of the Named Executive Officers entered into an Amended and Restated Compensation Protection Agreement, which preserved the severancebenefits contained in the existing agreement, but extended the term for an additional three year fixed term commencing January 1, 2017, with certain termextensions in the event of a “potential change in control” or “change in control” during the term.Additional information regarding the employment arrangements with each of our Named Executive Officers, including a quantification of benefits that would havebeen received by each Named Executive Officer had his or her employment terminated on December 31, 2016, is provided under “2016 Potential Payments uponTermination or Change in Control.”RDU PlanDuring 2016, our Named Executive Officers participated in the RDU Plan, a legacy nonqualified deferred compensation plan, established by our Board ofDirectors in 2010 in order to retain key leaders prior to our initial public offering and focus them on driving the long-term success of the Company. Whileparticipants are able to receive cash payments under the RDU Plan with respect to RDU grants made at or prior to our initial public offering, no new grants havebeen made since that time and the plan is closed. Under the terms of the RDU Plan, participants will receive cash distributions with respect to their accountbalances in 2017, which will remain subject to clawback for a 24-month period in the event of a termination for “cause” or the Named Executive Officer’s violationof any restrictive covenant agreement with respect to non-competition, non-solicitation, confidentiality or trade secrets.For additional information regarding the operation of this legacy plan, please see the narrative accompanying the “2016 Non-Qualified Deferred Compensation”table.Other BenefitsOur Named Executive Officers participate in our corporate-wide benefit programs. Our Named Executive Officers are offered benefits that generally arecommensurate with the benefits provided to all of our full-time coworkers, which includes participation in our qualified defined contribution plan. Consistent withour performance-based culture, we do not offer a service-based defined benefit pension plan or other similar benefits to our coworkers. Similarly, we do notprovide nonqualified retirement programs or perquisites that are often provided at other companies to executive officers.121 Table of ContentsClawback PolicyThe Compensation Committee adopted a clawback policy in the event the Company is required to prepare an accounting restatement due to material non-compliance with a financial reporting requirement under the federal securities laws. If a current or former executive officer engaged in intentional misconduct thatcaused or partially caused the need for the restatement, the Compensation Committee may, in its discretion and to the full extent permitted by governing law,require reimbursement of that portion of any cash bonus paid to, or performance shares/units earned by, such executive officer during the three-year periodpreceding the date on which the Company is required to prepare the restatement, which is in excess of what would have been paid or earned by such executiveofficer had the financial results been properly reported.Stock Ownership GuidelinesThe Compensation Committee believes that, in order to more closely align the interests of executives with the interests of the Company’s other stockholders, allexecutives should maintain a minimum level of equity interests in the Company’s common stock. The Compensation Committee has adopted stock ownershipguidelines requiring ownership of six times base salary for our Chief Executive Officer and three times base salary for our other executive officers. Until theguideline is met, an executive officer is required to retain 50% of the after-tax shares acquired upon exercise of stock options and vesting of performanceshares/units and restricted shares/units. As of the date of this Form 10-K, all Named Executive Officers had attained the required ownership guideline.Hedging, Short Sales and Pledging PoliciesOur executive officers are prohibited from hedging and short sales transactions with respect to our securities. In addition, our executive officers are prohibited frompledging our securities except in limited circumstances with pre-approval. For a further description of these policies, please see Part III - Item 10 - “CorporateGovernance - Hedging, Short Sales and Pledging Policies.”HOW WE MAKE EXECUTIVE COMPENSATION DECISIONSOur Executive Compensation Philosophies and ObjectivesThe Compensation Committee believes that our executive compensation program should reward actions and behaviors that drive sustained meaningful profitablegrowth and stockholder value creation. The Compensation Committee seeks to foster these objectives through a compensation system that focuses heavily onvariable, performance-based incentives that create a balanced focus on our short-term and long-term strategic and financial goals. The Compensation Committee’sgoal has been to implement an executive compensation program that would continue to drive above-market results and that is built upon our long-standingexecutive compensation philosophies and objectives, as outlined below, which we believe have been key contributors to our long-term success:Role of the Board, Compensation Committee and our Executive OfficersThe Compensation Committee is responsible for determining the annual cash compensation of our Chief Executive Officer and each of our other executive officers.In the case of the 2016 long-term incentives, the Compensation Committee was responsible for recommending to the Board for approval the targeted grant levelsfor each of our executive officers. Based on the recommendations of the Compensation Committee, the Board approved the 2016 long-term incentive awards. Insetting or recommending, as applicable, the compensation of our Chief Executive Officer, the Compensation Committee takes into account122 Table of Contentsthe Nominating and Corporate Governance Committee’s review of the Chief Executive Officer’s performance. In setting or recommending, as applicable, thecompensation of our other executive officers, the Compensation Committee takes into account the Chief Executive Officer’s review of each executive officer’sperformance and his recommendations with respect to their compensation. The Compensation Committee’s responsibilities regarding executive compensation arefurther described in the “Corporate Governance” section of this Proxy Statement.Guidance from Independent Compensation ConsultantFrederic W. Cook & Co., Inc. (the “Compensation Consultant”) provides executive compensation consulting services to the Compensation Committee. In 2016, theCompensation Consultant provided services related to the review of 2016 compensation adjustments, including a review of peer group compensation data, awardsunder our long-term incentive program, the setting of performance goals in our variable incentive plans including the payout leverage for results above and belowthe target performance levels, our compensation protection agreements, a review of trends in executive compensation and our compensation peer group andassistance with this CD&A. The Compensation Consultant is retained by and reports to the Compensation Committee and, at the request of the CompensationCommittee, participates in committee meetings. The Compensation Consultant did not provide any services to the Company in 2016. The CompensationCommittee reviewed the independence of the Compensation Consultant under NASDAQ and SEC rules and concluded that the work of the CompensationConsultant has not raised any conflict of interest.Comparison to Relevant Peer GroupTo obtain a broad view of competitive practices among industry peers and competitors for executive talent, the Compensation Committee reviews market data forpeer group companies as well as a general industry survey. In selecting companies for our peer group, the Compensation Committee considers companies that meetone or more of the following peer group selection criteria established by the Compensation Committee:For 2016 compensation decisions, the Compensation Committee utilized the peer group set forth below, which was the same peer group used by the CompensationCommittee with respect to 2015 compensation decisions. Based on data compiled by the Compensation Consultant at the time of the peer group review, ourrevenues and EBITDA were between the median and 75th percentile of our peer group:The Compensation Consultant provides competitive data utilizing peer group proxy data and Aon Hewitt provides revenue size-adjusted competitive data from itsgeneral industry database. In reviewing the size-adjusted data from the Aon Hewitt general industry database, the Compensation Committee does not review datafrom the specific companies included in the database. For Mr. Richards, the peer group was the primary market data source for evaluating 2016 base salary, annualcash incentive award opportunity and long-term incentive opportunity, given the availability of chief executive officer compensation data in public filings, with thecompensation survey data providing a supplemental viewpoint. For our other Named Executive Officers, the Compensation Committee reviewed both peer groupdata when available and compensation survey data when evaluating the 2016 base salary, annual cash incentive opportunities and long-term incentiveopportunities. For purposes of this CD&A, the peer group data and compensation survey data are collectively referred to as “market data.”123 Table of ContentsCOMPENSATION COMMITTEE REPORTOur Compensation Committee has reviewed and discussed the section entitled “Compensation Discussion and Analysis” with our management. Based upon thisreview and discussion, the Compensation Committee recommended to the Board of Directors that the section entitled “Compensation Discussion and Analysis” beincluded in this Annual Report on Form 10-K for the fiscal year ended December 31, 2016.Respectfully submitted by the Compensation Committee of the Board of Directors.Steven W. Alesio, ChairBarry K. AllenLynda M. ClarizioPaul J. FinneganJoseph R. Swedish124 Table of Contents2016 EXECUTIVE COMPENSATION2016 Summary Compensation TableThe following table provides information regarding the compensation earned by our Chief Executive Officer, our Chief Financial Officer and our three other mosthighly compensated executive officers, whom we collectively refer to as our “Named Executive Officers” for our last three fiscal years.Name and principalpositionYearSalary($) (1)Bonus($) (2)StockAwards($) (3)OptionAwards($) (4)Non-equityIncentive PlanCompensation($) (5)Non-qualifiedDeferredCompensationEarnings($)All OtherCompensation($) (6)Total($)Thomas E. RichardsChairman, President andChief Executive Officer2016888,461—2,000,0051,289,2721,561,768—11,9925,751,4982015851,587—1,750,0171,546,2461,519,418—1,300,3476,967,6152014798,250—1,625,0011,445,0401,836,60912,878278,0195,995,797Ann E. ZieglerSenior Vice President andChief Financial Officer2016544,516—699,986451,243787,443—11,5552,494,7432015516,806—649,988574,319774,750—799,4283,315,2912014453,955—349,995311,242967,8687,870173,9982,264,928Douglas E. EckroteSenior Vice President,Small Business Sales andeCommerce2016396,63539,000225,012145,042663,751—10,6981,480,1382015379,76029,250225,002198,804741,292—680,6632,254,7712014341,25029,250224,998200,081972,0866,690148,7371,923,092Christine A. LeahySenior Vice President -International, Chief LegalOfficer and CorporateSecretary2016443,289—449,985290,084502,516—10,6981,696,5722015396,032—400,007353,422513,689—655,5762,318,7262014340,460—325,000289,008590,5376,439143,5451,694,989Jonathan J. StevensSenior Vice President,Operations and ChiefInformation Officer 2016321,75032,200199,985128,925559,055—9,9141,251,8292015330,27924,150199,985176,711593,340—584,2351,908,7002014301,75024,150200,004177,854771,9175,733128,1581,605,720(1)Salary. 2016 base salary adjustments were effective February 21, 2016. The 2016 increase in the base salary of Mr. Eckrote represents a shift in the mix ofcompensation from SMIP target opportunity to base salary.(2)Bonus. The amounts reported represent lump sum merit awards granted to two of the Named Executive Officers in lieu of an increase in annual targetcompensation.(3)Stock awards. The amounts reported in this column represent the grant date fair value of performance shares and performance share units granted in theapplicable year, calculated in accordance with FASB ASC Topic 718. The amounts included in 2016 for the performance shares are calculated based on theclosing stock price and the probable satisfaction of the performance conditions for such awards as of the date of grant. Assuming the highest level ofperformance is achieved for the 2016 performance shares, the maximum value of these awards at the grant date would be as follows: Mr. Richards-$4,000,010;Ms. Ziegler-$1,399,972; Mr. Eckrote-$450,024; Ms. Leahy-$899,970; and Mr. Stevens-$399,970. See Note 11 to the Audited Financial Statements included inthis Form 10-K (the “Audited Financial Statements”) for a discussion of the relevant assumptions used in calculating these amounts.125 Table of Contents(4)Option awards. The amounts reported in this column represent the grant date fair value of stock option awards granted in the applicable year, calculated inaccordance with FASB ASC Topic 718. See Note 11 to the Audited Financial Statements for a discussion of the relevant assumptions used in calculating theseamounts.(5)Non-equity incentive plan compensation. The amounts reported represent cash awards to the Named Executive Officers under the SMIP. Please see the CD&Afor further information regarding the 2016 SMIP.(6) All other compensation. For 2016, “All Other Compensation” consists of (i) Company-paid supplemental disability premiums for each of the Named ExecutiveOfficers, and (ii) matching and profit sharing contributions to the 401(k) accounts of each of the Named Executive Officers. For 2015, “All OtherCompensation” consists of (i) the cash retention payments under the RDU Plan that vested in 2015 and were paid in 2016 (Mr. Richards, $1,286,954, Ms.Ziegler, $786,472, Mr. Eckrote, $668,564, Ms. Leahy $643,477, and Mr. Stevens, $572,920), (ii) Company-paid supplemental disability premiums for each ofthe Named Executive Officers, and (iii) matching and profit sharing contributions to the 401(k) accounts of each of the Named Executive Officers. For 2014,“All Other Compensation” consists of (i) the 2014 redemption premiums and RDU reserve interest allocation credited pursuant to the terms of the RDU Planto each of the Named Executive Officers (Mr. Richards, $266,360, Ms. Ziegler, $162,776, Mr. Eckrote, $138,372, Ms. Leahy, $133,180, and Mr. Stevens,$118,577), (ii) Company-paid supplemental disability premiums for each of the Named Executive Officers, and (iii) matching and profit sharing contributionsto the 401(k) accounts of each of the Named Executive Officers.2016 Grants of Plan-Based Awards TableThe following table provides information regarding the possible payouts to our Named Executive Officers in 2016 under the SMIP and the annual equity awardsreceived by our Named Executive Officers in 2016 under the CDW Corporation Amended and Restated 2013 Long-Term Incentive Plan (“2013 LTIP”). Estimated Possible PayoutsUnder Non-equityIncentive Plan Awards (1) Estimated Possible PayoutsUnder Equity Incentive PlanAwards (2) Exerciseor BasePrice ofOptionAwards($)GrantDate FairValue ofStockandOptionAwards($) (4)NameGrantDateThreshold($)Target($)Maximum($) Threshold(#)Target(#)Maximum(#)AllOtherStockAwards:Numberof Units(#)All OtherOptionAwards:Number ofSecuritiesUnderlyingOptions(#) (3)Thomas E.Richards—202,5001,350,0002,700,000 ——————— 3/2/16——— 25,13250,264100,528———2,000,005 3/2/16——— ————150,79239.791,289,272Ann E. Ziegler—102,101680,6701,361,340 ——————— 3/2/16——— 8,79617,59235,184———699,986 3/2/16——— ————52,77739.79451,243Douglas E.Eckrote—86,063573,7501,147,500 ——————— 3/2/16——— 2,8285,65511,310———225,012 3/2/16——— ————16,96439.79145,042Christine A.Leahy—65,157434,377868,754 ——————— 3/2/16——— 5,65511,30922,618———449,985 3/2/16——— ————33,92839.79290,084Jonathan J.Stevens—72,488483,250966,500 ——————— 3/2/16——— 2,5135,02610,052———199,985 3/2/16——— ————15,07939.79128,925(1)These amounts represent threshold, target and maximum cash award levels set in 2016 under the SMIP. The amount actually earned by each Named ExecutiveOfficer is reported as Non-Equity Incentive Plan Compensation in the 2016 Summary Compensation Table.126 Table of Contents(2)These amounts represent the threshold, target and maximum performance shares granted under the 2013 LTIP. For actively employed executives, theseperformance shares are scheduled to vest on December 31, 2018, subject to the achievement of the threshold performance goals relating to adjusted FCF andadjusted EPS over the 2016-2018 performance period. The number of shares subject to a performance share award increases as a result of the deemedreinvestment of dividend equivalents prior to settlement of the award and such additional shares are subject to the same vesting conditions as the underlyingperformance shares. Please see the CD&A for further information regarding this award.(3)These amounts represent stock options granted under the 2013 LTIP. For actively employed executives, these options vest in one-third increments on each ofthe first through third year anniversaries of the date of grant.(4)The amounts reported represent the grant date fair value associated with the grant of these performance shares and stock option awards, as computed inaccordance with FASB ASC Topic 718. In the case of the performance shares, the grant date fair value is calculated based on the closing stock price on thedate of grant and the probable satisfaction of the performance conditions for such awards as of the date of grant. See Note 11 to the Audited FinancialStatements for a discussion of the relevant assumptions used in calculating these amounts.2016 Outstanding Equity Awards at Fiscal Year-EndThe following table summarizes outstanding option awards and unvested stock awards held by each Named Executive Officer on December 31, 2016. Option Awards Stock AwardsNameNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisable(#)EquityIncentivePlan Awards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions(#)OptionExercisePrice($)OptionExpirationDate Numberof Sharesor Unitsof StockThatHave NotVested(#)MarketValue ofSharesor Unitsof StockThatHave NotVested($) (8) Equity IncentivePlan Awards:Number ofUnearnedShares, Units,or Other Rightsthat Have NotVested(#)Equity IncentivePlan Awards:Market orPayout Value ofUnearned Shares,Units or OtherRights that HaveNot Vested($) (8)Thomas E.Richards409,824 (1)95,470 (1)17.0012/12/2022 18,246 (5)950,434——133,800 (2)66,900 (2)24.292/25/2024 ————46,308 (3)92,618 (3)37.792/19/2025 ——47,168 (6)2,456,981—150,792 (4)39.793/2/2026 ——50,800 (7)2,646,172Ann E. Ziegler28,818 (2)14,410 (2)24.292/25/2024 ————17,200 (3)34,401 (3)37.792/19/2025 ——17,519 (6)912,565—52,777 (4)39.793/2/2026 ——17,779 (7)926,108Douglas E.Eckrote18,526 (2)9,263 (2)24.292/25/2024 ————5954 (3)11,908 (3)37.792/19/2025 ——6,064 (6)315,874—16,964 (4)39.793/2/2026 ——5,715 (7)297,694Christine A.Leahy26,760 (2)13,380 (2)24.292/25/2024 ————10,584 (3)21,170 (3)37.792/19/2025 ——10,781 (6)561,582—33,928 (4)39.793/2/2026 ——11,429 (7)595,337Jonathan J.Stevens16,468 (2)8,234 (2)24.292/25/2024 ————5,292 (3)10,585 (3)37.792/19/2025 ——5,390 (6)280,765—15,079 (4)39.793/2/2026 ——5,079 (7)264,565(1)Represents stock options granted to Mr. Richards in connection with the pre-initial public offering distribution of equity held by CDW Holdings LLC, ourparent company prior to our initial public offering. These stock options were issued to B Unit holders (B Units represented equity interests in the companywhile it was privately held) to preserve their fully diluted equity ownership percentages, as required by the CDW Holdings LLC Unitholders Agreement. Thevesting of the stock options is based upon the remainder of the 5 year daily vesting schedule applicable to the B Units with respect to which the stock optionswere granted. A portion of Mr. Richards’ stock option grant (54,514 shares) was vested as of June 26, 2013 (the date of our initial public offering), while theremaining portion of the stock option grant vests daily on a pro rata basis through December 11, 2017.(2)These stock options were awarded on February 25, 2014, and vest in one-third increments on each of the first through third year anniversaries of the date ofgrant.127 Table of Contents(3)These stock options were awarded on February 19, 2015, and vest in one-third increments on each of the first through third year anniversaries of the date ofgrant.(4)These stock options were awarded on March 2, 2016, and vest in one-third increments on each of the first through third year anniversaries of the date of grant.(5)Represents shares of restricted stock granted to B unit holders, including Mr. Richards, in connection with the pre-initial public offering distribution of equityheld by CDW Holdings LLC, our parent company prior to our initial public offering. The vesting of the shares of restricted stock is based upon the remainder ofthe 5 year daily vesting schedule applicable to the B Units for which the restricted shares were received in exchange. For Mr. Richards, these shares vest dailyon a pro rata basis through December 11, 2017.(6)These performance shares were awarded on February 19, 2015 and vest on December 31, 2017, subject to the achievement of the threshold performance goalsrelating to adjusted FCF and adjusted EPS over the 2015-2017 performance period. The amounts reported in this column are based on target achievement ofthe applicable performance goals and include performance shares acquired through the deemed reinvestment of dividend equivalents.(7)These performance shares were awarded on March 2, 2016 and vest on December 31, 2018, subject to the achievement of the threshold performance goalsrelating to adjusted FCF and adjusted EPS over the 2016-2018 performance period. The amounts reported in this column are based on target achievement ofthe applicable performance goals and include performance shares acquired through the deemed reinvestment of dividend equivalents.(8)The market value of shares of stock that have not vested reflects a stock price of $52.09, our closing stock price on December 30, 2016.2016 Stock Vested TableThe following table summarizes the number and market value of stock awards held by each Named Executive Officer that vested during 2016. None of our NamedExecutive Officers exercised any stock options during 2016. NameNumber ofShares Acquiredon Vesting (1) (#) Value Realized onVesting (2) ($) Thomas E. Richards152,064 7,749,939 Ann E. Ziegler28,583 1,488,893 Douglas E. Eckrote18,375 957,159 Christine A. Leahy26,542 1,382,563 Jonathan A. Stevens16,334 850,825(1)For Mr. Richards, includes 19,355 shares of restricted stock granted to B unit holders, including Mr. Richards, in connection with the pre-initial public offeringdistribution of equity held by CDW Holdings LLC, our parent company prior to our initial public offering. The vesting of the shares of restricted stock is basedupon the remainder of the 5 year daily vesting schedule applicable to the B units for which the shares of restricted stock were received in exchange. Theremaining shares reported in this column represent shares acquired upon the vesting of performance share units awarded on February 25, 2014 and whichvested on December 31, 2016 based on the achievement of performance goals relating to adjusted FCF and adjusted EPS over the 2014-2016 performanceperiod, including shares acquired through the deemed reinvestment of dividend equivalents through December 31, 2016. Performance share unit awardrecipients receive fractional shares upon settlement; however, for purposes of this table, share numbers have been rounded to the nearest whole share.(2) The market value reported in this table for the shares of restricted stock held by Mr. Richards that vested on a daily basis during 2016 is based upon theaverage daily closing price of our common stock during 2016. The market value for the 2014 performance share units that vested on December 31, 2016 isbased on a stock price of $52.09, our closing stock price on December 30, 2016.Non-Qualified Deferred CompensationAs noted in the CD&A, in 2010, our Board of Directors adopted the RDU Plan, an unfunded nonqualified deferred compensation plan that was designed to retainkey leaders and focus them on driving the long-term success of the Company. Participants in the RDU Plan received RDUs that entitled the participant to aproportionate share of payments under the RDU Plan, determined by dividing the number of RDUs held by the participant by 28,500, which was the total numberof RDUs available under the RDU Plan. Prior to our initial public offering, the RDUs were designed to track two components of the then outstanding SeniorSubordinated Notes, a principal component and an interest component. The total amount of compensation available under the RDU Plan was based on these twocomponents.128 Table of ContentsThe principal component credited the RDU Plan with an amount equal to the $28.5 million face value of the Company’s Senior Subordinated Notes (the “debtpool”), with each RDU representing $1,000 face value of the Senior Subordinated Notes. Participants vested daily in the principal component during employmenton a pro rata basis over the period commencing January 1, 2012 (or, if later, the date of hire or the date of a subsequent RDU grant) through December 31, 2014. Inconnection with our initial public offering and the partial redemption of the Senior Subordinated Notes, and in accordance with the terms of the RDU Plan, theprincipal component of the RDUs converted to a cash-denominated pool upon the redemption of the related Senior Subordinated Notes, with the same vestingschedule as set forth above. The redemption of the Senior Subordinated Notes, per the terms of the RDU Plan, also resulted in participants being credited in 2013and 2014 with an additional amount equal to the prepayment premium that would have been paid on an equivalent amount of Senior Subordinated Notes under theterms of the indenture related to such notes. Under the terms of the RDU Plan, payment of the principal component as well as the additional amount related to theprepayment premium will be made to participants in 2017.The interest component credited the RDU Plan with amounts equal to the interest that would have been earned on the debt pool from March 10, 2010 (or, if later,the date of hire or the date of a subsequent RDU grant) through maturity in 2017; however, in connection with our initial public offering, the CompensationCommittee determined that the accrual of interest credits on the RDUs would cease after the redemption of the related Senior Subordinated Notes. In order toincrease the retentive value of the plan, in 2013, the Compensation Committee established a cash retention pool determined based on the amount of the interestcomponent credits that would have been allocated under the original terms of the RDU Plan. This cash retention pool has been paid to participants based on theirservice prior to 2016 and no longer represents an ongoing element of the Company’s executive compensation program.2016 Non-Qualified Deferred Compensation TableThe following table provides information regarding the RDU Plan.Name ExecutiveContributionsin Last FiscalYear($) RegistrantCompanyContributionsin Last Fiscal Year($) AggregateEarnings inLast Fiscal Year($) AggregateWithdrawals/Distributions($) AggregateBalance atLast FiscalYear-End($) (1)Thomas E. Richards — — — — 5,636,784Ann E. Ziegler — — — — 3,444,703Douglas E. Eckrote — — — — 2,928,270Christine A. Leahy — — — — 2,818,393Jonathan J. Stevens — — — — 2,509,358(1) The amounts reported in this column represent each Named Executive Officer’s balance in the RDU Plan.2016 Potential Payments Upon Termination or Change in ControlDuring 2016, the Named Executive Officers were each subject to a compensation protection agreement that provided for certain severance benefits upon aqualifying termination of employment (the “Compensation Protection Agreements”). These severance arrangements have a three year fixed term, with certain termextensions in the event of a “potential change in control” or “change in control” during the term. As noted above, in March 2016, each of the Named ExecutiveOfficers entered into an Amended and Restated Compensation Protection Agreement, which preserved the severance benefits contained in their existingagreements, but extended the term for an additional three year fixed term commencing January 1, 2017. Each Named Executive Officer is also a participant in theCompany’s equity award program, which provides for accelerated vesting of outstanding equity awards upon certain termination events or a sale of the Company.A description of the material terms of each of the employment arrangements that were in effect on December 31, 2016 and the equity award program as well asestimates of the payments and benefits each Named Executive Officer would receive upon a termination of employment or sale of the Company, are set forthbelow. The estimates have been calculated assuming a termination date on December 31, 2016 and the closing price of a share of our common stock on December30, 2016. The estimates below do not include any value associated with the RDU Plan because, as of December 31, 2016, all participants were vested in theiraccount balances under the RDU Plan. Please see the “2016 Nonqualified Deferred Compensation Table” and related narrative for further information regardingthe RDU Plan. The amounts reported below are only estimates and actual payments and benefits to be paid upon a termination of a Named Executive Officer’semployment with the Company or sale of the Company under these arrangements can only be determined at the time of termination or sale of the Company.129 Table of ContentsCompensation Protection ArrangementsThis section describes the Compensation Protection Agreements in effect for Named Executive Officers in 2016.For purposes of determining severance benefits under the Named Executive Officers’ Compensation Protection Agreements, a qualifying termination meanstermination of the Named Executive Officer’s employment (1) by the Company other than (A) for “cause,” (B) the Named Executive Officer’s death or (C) theNamed Executive Officer’s disability, or (2) by the Named Executive Officer for “good reason.”If the employment of a Named Executive Officer is terminated for any reason other than a qualifying termination of employment, the Named Executive Officer isentitled to receive his or her “accrued obligations.” Accrued obligations include the following: (1) accrued and unpaid base salary; (2) any SMIP bonus, deferredcompensation and other cash compensation accrued by the Named Executive Officer to the extent not paid as of the date of termination; and (3) vacation pay,expense reimbursements and other cash entitlements accrued by the Named Executive Officer to the extent not paid as of the date of termination.If the employment of a Named Executive Officer is terminated due to the Named Executive Officer’s death or disability, the Named Executive Officer or his or herestate, as applicable, is entitled to receive the following payments under his or her Compensation Protection Agreement: (1) accrued obligations as defined aboveand (2) an annual incentive bonus (based on the target bonus under the Company’s SMIP), prorated through the effective date of the Named Executive Officer’stermination of employment.If the employment of a Named Executive Officer is terminated due to a qualifying termination, the Named Executive Officer is entitled to receive the followingpayments and benefits under his or her Compensation Protection Agreement: (1) accrued obligations as defined above; (2) the portion of the unpaid SMIP bonusthat the Named Executive Officer would have received had he or she remained employed by the Company for the full year in which the termination occurs, basedon actual performance and prorated through the date of termination; (3) continuation in accordance with the Company’s regular payroll practices of two times theNamed Executive Officer’s base salary; (4) payment of two times the Named Executive Officer’s SMIP bonus that would have been earned had the NamedExecutive Officer remained employed by the Company for the full year in which the termination occurs, based on actual performance (provided that if thetermination occurs after a change in control, the SMIP bonus will be equal to two times the Named Executive Officer’s average SMIP bonus for each of the threefiscal years ending prior to the change in control); (5) continuation of certain health and welfare benefits for two years or, if earlier, the date that the NamedExecutive Officer becomes eligible for each such type of insurance coverage from a subsequent employer (provided, however, that if the Company is unable toprovide such continuation benefits to the Named Executive Officer, the Company will instead provide a cash payment, subject to any applicable withholding taxes,that is sufficient to purchase comparable benefits); and (6) outplacement services of up to $20,000. The receipt of all of the payments and benefits above, exceptpayment of accrued obligations, is conditioned upon the Named Executive Officer’s execution of a general release agreement in which he or she waives all claimsthat he or she might have against the Company and certain associated individuals and entities.If the employment of Mr. Richards is terminated for any reason other than a termination by the Company for “cause” (as defined in his Compensation ProtectionAgreement), upon the expiration of any continued medical coverage period under his Compensation Protection Agreement and the COBRA continuation coverageperiod, Mr. Richards and his spouse are entitled to continued access to the Company’s medical plan until each becomes eligible for Medicare (or the earlieroccurrence of another event specified in his Compensation Protection Agreement), with the full cost of such continued access to be paid by Mr. Richards.Under the terms of the Compensation Protection Agreements, if the payments and benefits to a Named Executive Officer under his or her respective CompensationProtection Agreement or another plan, arrangement or agreement would subject the Named Executive Officer to the excise tax imposed by Section 4999 of theInternal Revenue Code, then such payments will be reduced by the minimum amount necessary to avoid such excise tax, but only if such reduction will result in theNamed Executive Officer receiving a higher net after-tax amount.Outstanding Equity AwardsThere is no acceleration or continuation of vesting of the shares of restricted stock and stock options granted in exchange for outstanding B Units (the“Replacement Awards”) for terminations other than on account of a Named Executive Officer’s death or disability. In the case of termination due to the NamedExecutive Officer’s death or disability, the Replacement Award agreement provides for the immediate vesting of the additional portion of his or her outstandingReplacement Awards that would vest over a period of one year from such Named Executive Officer’s termination of employment. All outstanding ReplacementAwards would immediately vest upon a sale of the Company under the award agreements. For purposes of the Replacement Awards, a sale of the Company meansthe acquisition by any person or group of (1) at least 51% of the equity securities of the Company entitled to vote to elect members of the board or (2) all orsubstantially all of the Company’s assets determined on a consolidated basis.130 Table of ContentsUnder the terms of the 2016, 2015 and 2014 option awards, the options will become 100% vested in the event of (i) a termination of employment due to death ordisability, (ii) a termination of employment by the Company without cause or by the Named Executive Officer for good reason within two years following achange in control or (iii) a change in control pursuant to which the option awards are not effectively assumed or continued in such transaction. In addition, in theevent of the Named Executive Officer’s retirement, the options will continue to vest in accordance with the vesting schedule set forth in the award agreement solong as the Named Executive Officer continues to comply with restrictive covenants relating to non-competition, non-solicitation and confidentiality through thevesting period.With respect to the 2016 and 2015 performance shares, upon a termination of employment due to death, disability or retirement, the Named Executive Officer willbe entitled to a prorated award based on actual performance through the end of the performance period, subject to the Named Executive Officer’s continuedcompliance with restrictive covenants relating to non-competition, non-solicitation and confidentiality. In the event of a change in control prior to the 24-monthanniversary of the first day of the performance period, the performance goals will be deemed to have been satisfied at target performance. If, however, the changein control occurs on or after the 24-month anniversary of the first day of the performance period, the performance goals will be determined by the CompensationCommittee based on the projected level of performance through the end of the performance period. In the event of a change in control in which the awards are noteffectively assumed, the awards will be settled within 70 days of such change in control. For awards effectively assumed in a change in control, the settlement ofthe awards will be accelerated if the Named Executive Officer’s employment is terminated without cause or due to good reason within 24 months following thechange in control.For purposes of the 2013 LTIP, a change in control generally occurs upon (1) an unapproved change in the majority composition of the Board during a 24-monthperiod, (2) certain acquisitions of 35% or more of the Company’s outstanding voting securities, or (3) certain corporation transactions, including certain mergers,dissolutions, liquidations or the sale of substantially all of the Company’s assets.Potential Payments Upon a Qualifying Termination of Employment (1) NameSeverancePayment($) (2)Value ofAcceleratedEquity Awards($)WelfareBenefits($) (3)Outplacement($) (4)AggregatePayments($)Thomas E. Richards4,923,536—25,69920,0004,969,235Ann E. Ziegler2,678,010—23,33420,0002,721,344Douglas E. Eckrote2,130,002—29,11720,0002,179,119Christine A. Leahy1,911,434—32,03120,0001,963,465Jonathan J. Stevens1,761,610—27,64620,0001,809,256(1)A qualifying termination means termination of the Named Executive Officer’s employment (1) by the Company other than (A) for “cause,” (B) the NamedExecutive Officer’s death or (C) the Named Executive Officer’s disability, or (2) by the Named Executive Officer for “good reason.”(2)Amounts reported in this column represent two times the sum of (i) the Named Executive Officer’s base salary and (ii) the Named Executive Officer’s annualincentive bonus target for 2016 multiplied by the 2016 SMIP payout percentage of 115.7%. Under the Compensation Protection Agreements, the NamedExecutive Officers are also entitled to a pro rata bonus based on the Company’s actual performance for the year in which termination occurs. Because theSMIP bonus is considered earned as of December 31, 2016, amounts related to the pro rata bonus have been excluded from this table and are reported in the2016 Summary Compensation Table as 2016 compensation.(3)Represents the estimated value of continued welfare benefits that all Named Executive Officers would be entitled to receive upon a qualifying termination ofemployment.(4)Represents the maximum value of outplacement services that all Named Executive Officers would be entitled to receive upon a qualifying termination ofemployment.131 Table of ContentsPotential Payments Upon Death, Disability or Retirement Table (1) NameSeverancePayment($) (2)Value ofAcceleratedEquity Awards($) (3)AggregatePayments($)Thomas E. Richards—11,859,52011,859,520Ann E. Ziegler—2,458,7692,458,769Douglas E. Eckrote—946,267946,267Christine A. Leahy—1,664,8431,664,843Jonathan J. Stevens—841,108841,108(1)As noted above, the terms of our 2016, 2015 and 2014 equity awards include retirement vesting provisions and, as of December 31, 2016, Mr. Richards andMs. Ziegler were our only Named Executive Officers eligible for retirement vesting under such equity awards. Please see footnote 3 for an estimate of theamounts that would be received by Mr. Richards and Ms. Ziegler under the terms of such equity awards upon a December 31, 2016 retirement.(2)The Named Executive Officers are entitled to a pro rata bonus based on target for the year in which termination occurs upon death or a termination due todisability and may receive, at the Compensation Committee’s discretion, a pro rata bonus for the year of retirement. Because the SMIP bonus is consideredearned as of December 31, 2016, amounts related to the pro rata bonus have been excluded from this table and are reported in the 2016 SummaryCompensation Table as 2016 compensation.(3)Represents the value of the accelerated vesting of the 2016, 2015 and 2014 stock option awards, pro rata vesting of the 2016 and 2015 performance shares,assuming target achievement of the applicable performance goals, and, for Mr. Richards, partial vesting of the Replacement Awards upon death or atermination due to disability. Under the terms of the 2016, 2015 and 2014 equity awards, Mr. Richards and Ms. Ziegler would continue to vest in their optiongrants and receive a prorated payout based on actual performance with respect to their performance shares upon retirement, provided that each continued tocomply with non-competition, non-solicitation and confidentiality restrictive covenants during the vesting period. Assuming a retirement as of December 31,2016, the value of the accelerated vesting associated with Mr. Richards’ and Ms. Ziegler’s outstanding equity awards is estimated to equal $7,559,044 and$2,458,769, respectively, assuming target achievement of the performance goals applicable to their performance awards. The value of the accelerated vestingof the equity awards reported in this table is based upon our closing stock price of $52.09 on December 30, 2016. Excluded from this column are the 2014performance share units that vested based on Company performance and continued service of the Named Executive Officer through December 31, 2016 andwhich are reflected in the 2016 Stock Vested Table.Potential Payments Upon a Qualifying Termination of Employment Following a Change in Control (1) NameSeverancePayment (2) ($)Value ofAcceleratedEquityAwards($) (3)WelfareBenefits($) (4)Outplacement($) (5)AggregatePayments($)Thomas E. Richards4,865,08314,442,62925,69920,00019,353,411Ann E. Ziegler2,701,0723,380,36223,33420,0006,124,768Douglas E. Eckrote2,382,8561,250,02129,11720,0003,681,994Christine A. Leahy1,919,0682,248,92832,03120,0004,220,027Jonathan J. Stevens1,915,3881,111,07327,64620,0003,074,107(1)A qualifying termination means termination of the Named Executive Officer’s employment following a change in control (1) by the Company other than (A) for“cause,” (B) the Named Executive Officer’s death or (C) the Named Executive Officer’s disability, or (2) by the Named Executive Officer for “good reason.”Under the terms of the Compensation Protection Agreements, if the payments and benefits to a Named Executive Officer under his or her respectiveCompensation Protection Agreement or another plan, arrangement or agreement would subject the Named Executive Officer to the excise tax imposed bySection 4999 of the Internal Revenue Code, then such payments will be reduced by the minimum amount necessary to avoid such excise tax, if such reductionwould result in the Named Executive Officer receiving a higher net after-tax amount. The amounts reflected in this table do not reflect the application of anyreduction in compensation or benefits pursuant to the terms of the Compensation Protection Agreements.132 Table of Contents(2)Amounts reported in this column represent two times the sum of (i) the Named Executive Officer’s base salary and (ii) the Named Executive Officer’s averageSMIP bonus for each of the three fiscal years ending prior to the change in control. Under the Compensation Protection Agreements, the Named ExecutiveOfficers are also entitled to a pro rata bonus based on the Company’s actual performance for the year in which termination occurs. Because the SMIP bonus isconsidered earned as of December 31, 2016, amounts related to the pro rata bonus have been excluded from this table and are reported in the 2016 SummaryCompensation Table as 2016 compensation.(3)Represents the value of equity awards that would become vested upon a qualifying termination of employment within two years following a change in control orupon a change in control in which the outstanding awards are not effectively assumed, assuming target achievement of the applicable performance goals. Withrespect to Mr. Richards, the vesting of his outstanding Replacement Awards would also accelerate upon a qualifying change in control, without a relatedtermination of employment. Based on a December 31, 2016 closing price, the value of the accelerated vesting associated with Mr. Richards’ outstandingReplacement Awards is estimated to equal $4,300,476. The value of the accelerated vesting of the equity awards reported in this table is based upon our closingstock price of $52.09 on December 30, 2016. Excluded from this column are the 2014 performance share units that vested based on Company performance andcontinued service of the Named Executive Officer through December 31, 2016 and which are reflected in the 2016 Stock Vested Table.(4)Represents the estimated value of continued welfare benefits that all Named Executive Officers would be entitled to receive upon a qualifying termination ofemployment.(5) Represents the maximum value of outplacement services that all Named Executive Officers would be entitled to receive upon a qualifying termination ofemployment.APPENDIX A TO ITEM 11Non-GAAP Financial Measure ReconciliationsWe have included reconciliations of Adjusted EBITDA, Adjusted EBITDA Margin, Non-GAAP net income, Non-GAAP net income per diluted share,Consolidated net sales growth on a constant currency basis and Free cash flow for the years ended December 31, 2016 and 2015 below. EBITDA is defined asconsolidated net income before Interest expense, Income tax expense, Depreciation and Amortization. Adjusted EBITDA, which is a measure defined in our creditagreements, means EBITDA adjusted for certain items which are described in the table below. Adjusted EBITDA margin means Adjusted EBITDA as a percentageof our Net sales. 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. With respect to Non-GAAP net incomeper diluted share, the numerator is Non-GAAP net income and the denominator is the weighted average number of shares outstanding as adjusted to give effect todilutive securities. Consolidated net sales growth on a constant currency basis is defined as consolidated net sales growth excluding the impact of foreign currencytranslation on net sales compared to the prior period. Free cash flow is defined as net cash provided by operating activities, minus capital expenditures, plus/minusthe net change in accounts payable - inventory financing. Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP net income, Non-GAAP net income perdiluted share, Consolidated net sales growth on a constant currency basis and Free cash flow 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 notnormally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by thecompany may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that AdjustedEBITDA, Adjusted EBITDA Margin, Non-GAAP net income, Non-GAAP net income per diluted share, Consolidated net sales growth on a constant currencybasis and Free cash flow provide helpful information with respect to our operating performance and cash flows, including our ability to meet our future debtservice, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certainkey covenants and definitions contained in our credit agreements.133 Table of ContentsADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN(dollars in millions)(unaudited) Year Ended December 31, 2016% of NetSales 2015% of Net Sales % ChangeNet income$424.4 $403.1 Depreciation and amortization 254.5 227.4 Income tax expense 248.0 243.9 Interest expense, net 146.5 159.5 EBITDA 1,073.47.7% 1,033.98.0% Adjustments: Non-cash equity-based compensation 39.2 31.2 Net loss on extinguishments of long-term debt 2.1 24.3 (Income)/loss from equity investments (a) (1.1) 10.1 Acquisition and integration expenses (b) 7.3 10.2 Gain on remeasurement of equity investment (c) — (98.1) Other adjustments (d) (3.6) 6.9 Total adjustments 43.9 (15.4) Adjusted EBITDA (e)$1,117.38.0% $1,018.57.8% 9.7%a) Represents our share of (income) loss from our equity investments. Our 35% share of CDW UK's net loss for the year ended December 31, 2015 includes our35% share of an expense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to the acquisition.b) Comprised of expenses related to CDW UK.c) Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisition of CDWUK.d) Primarily includes our share of settlement payments received from the Dynamic Random Access Memory class action lawsuits and the favorable resolution of alocal sales tax matter during the year ended December 31, 2016. Also includes expenses related to the consolidation of office locations north of Chicago duringthe years ended December 31, 2016 and 2015.e) Includes the impact of consolidating five months of CDW UK's financial results for the year ended December 31, 2015.NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER DILUTED SHARE(in millions, except per share amounts)(unaudited)134 Table of Contents Year Ended December 31, 2016 2015% ChangeNet income $424.4 $403.1 Amortization of intangibles (a) 187.2 173.9 Non-cash equity-based compensation 39.2 31.2 Non-cash equity-based compensation related to equity investment (b) — 20.0 Net loss on extinguishments of long-term debt 2.1 24.3 Acquisition and integration expenses (c) 7.3 10.2 Gain on remeasurement of equity investment (d) — (98.1) Other adjustments (e) (5.4) 3.7 Aggregate adjustment for income taxes (f) (85.8) (64.8) Non-GAAP net income (g) $569.0 $503.513.0%GAAP net income per diluted share $2.56 $2.359.0%Non-GAAP net income per diluted share $3.43 $2.9316.9%Shares used in computing GAAP and Non-GAAP net income per diluted share 166.0 171.8 a) Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.b) Represents our 35% share of an expense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to ouracquisition of CDW UK.c) Comprised of expenses related to CDW UK.d) Represents the gain resulting from the remeasurement of our previously held 35% equity investment to fair value upon the completion of the acquisition of CDWUK.e) Primarily includes our share of settlement payments received from the Dynamic Random Access Memory class action lawsuits and the favorable resolution of alocal sales tax matter during the year ended December 31, 2016. Also includes expenses related to the consolidation of office locations north of Chicago duringthe years ended December 31, 2016 and 2015.f) Aggregate adjustment for income taxes consists of the following: Year Ended December 31, 2016 2015 Total Non-GAAP adjustments $230.4 $165.2 Weighted-average statutory effective rate 36.0% 38.0% Income tax (82.9) (62.8) Deferred tax adjustment due to law changes (1.5) (4.0) Stock compensation tax benefit related to the adoption of ASU 2016-09 (1.8) — Withholding tax expense on the unremitted earnings of our Canadian subsidiary — 3.3 Non-deductible adjustments and other 0.4 (1.3) Total aggregate adjustment for income taxes (85.8) (64.8) g) Includes the impact of consolidating five months of CDW UK's financial results for the year ended December 31, 2015.CONSOLIDATED NET SALES GROWTH ON A CONSTANT CURRENCY BASIS(dollars in millions)(unaudited) Year Ended December 31, 2016 2015% ChangeNet sales, as reported$13,981.9$12,988.77.6% Foreign currency translation (a) — (76.3) Consolidated net sales, on a constant currency basis$13,981.9$12,912.48.3%a) Represents the effect of translating the prior year results of CDW Canada and CDW UK at the average exchange rates applicable in the current year. Includesthe impact of consolidating five months of CDW UK's financial results for the year ended December 31, 2015.135 Table of ContentsFREE CASH FLOW(dollars in millions)(unaudited) Year Ended December 31, 2016 2015 Net cash provided by operating activities $604.0 $277.5 Capital expenditures (63.5) (90.1) Net change in accounts payable - inventory financing 143.6 95.9 Free cash flow $684.1 $283.3 136 Table of ContentsItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersOwnership of Our Common StockThe following tables show information regarding the beneficial ownership of our common stock by:•each member of our Board of Directors, each director nominee and each of our named executive officers;•all members of our Board and our executive officers as a group; and•each person or group who is known by us to own beneficially more than 5% of our common stock.Beneficial ownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting orinvestment power. Shares of common stock subject to options currently exercisable or exercisable within 60 days of February 15, 2017 and restricted stock unitsthat are currently vested but deferred or that will be settled into shares within 60 days of February 15, 2017 are deemed to be outstanding and beneficially owned bythe person. Unvested restricted shares and unvested performance shares (which are issued at the maximum achievement level) are outstanding and are deemed tobe beneficially owned by the person holding such shares. Except as noted by footnote, and subject to community property laws where applicable, we believe basedon the information provided to us that the persons and entities named in the table below have sole voting and investment power with respect to all shares of ourcommon stock shown as beneficially owned by them.Except as otherwise indicated, all stockholdings are as of February 15, 2017 and the percentage of beneficial ownership is based on 160,138,379 shares of commonstock outstanding as of February 15, 2017.Directors and Executive OfficersNameAggregateNumber ofSharesBeneficiallyOwnedPercent ofOutstandingSharesAdditional InformationThomas E. Richards1,836,0061.1%Includes beneficial ownership of 915,447 shares held by Mr. Richards that may be acquiredwithin 60 days of February 15, 2017. Also includes 15,813 shares of unvested restricted stockand 195,940 unvested performance shares held by Mr. Richards.Ann E. Ziegler227,918*Includes beneficial ownership of 123,803 shares held by Ms. Ziegler that may be acquiredwithin 60 days of February 15, 2017. Also includes 70,599 unvested performance shares heldby Ms. Ziegler.Douglas E. Eckrote257,748*Includes beneficial ownership of 63,726 shares held by Mr. Eckrote that may be acquiredwithin 60 days of February 15, 2017. Also includes 23,561 unvested performance shares heldby Mr. Eckrote.Christine A. Leahy351,262*Includes beneficial ownership of 99,160 shares held by Ms. Leahy that may be acquired within60 days of February 15, 2017. Also includes 44,423 unvested performance shares held by Ms.Leahy.Jonathan J. Stevens168,360*Includes beneficial ownership of 56,646 shares held by Mr. Stevens that may be acquiredwithin 60 days of February 15, 2017. Also includes 20,941 unvested performance shares heldby Mr. Stevens.Virginia C. Addicott3,493*Includes beneficial ownership of 3,493 shares held by Ms. Addicott that may be acquiredwithin 60 days of February 15, 2017.Steven W. Alesio33,650*Includes beneficial ownership of 3,493 shares held by Mr. Alesio that may be acquired within60 days of February 15, 2017. Also includes beneficial ownership of 8,645 vested restrictedstock units on which settlement into shares of CDW Corporation common stock has beendeferred until the sooner of separation of service on the Board of Directors or five yearsfollowing vesting.Barry K. Allen35,011*Includes beneficial ownership of 3,493 shares held by Mr. Allen that may be acquired within60 days of February 15, 2017. Also includes beneficial ownership of 8,645 vested restrictedstock units on which settlement into shares of CDW Corporation common stock has beendeferred until the sooner of separation of service on the Board of Directors or five yearsfollowing vesting. Also includes 1,854 shares held by Allen Enterprises LLC, a limited liabilitycompany of which Mr. Allen is the sole member.137 Table of ContentsJames A. Bell12,290*Includes beneficial ownership of 3,493 shares held by Mr. Bell that may be acquired within 60days of February 15, 2017. Also includes beneficial ownership of 3,117 vested restricted stockunits on which settlement into shares of CDW Corporation common stock has been deferreduntil the sooner of separation of service on the Board of Directors or five years followingvesting.Benjamin D. Chereskin201,874*Includes beneficial ownership of 3,493 shares held by Mr. Chereskin that may be acquiredwithin 60 days of February 15, 2017. Also includes 175,163 shares held by the ChereskinFamily Dynasty Trust and 6,936 shares held by the Benjamin D Chereskin Dynasty Trustwhich are deemed to be beneficially owned by Mr. Chereskin. Lynda M. Clarizio3,976*Includes beneficial ownership of 3,493 shares held by Ms. Clarizio that may be acquired within60 days of February 15, 2017.Paul J. Finnegan18,569*Includes beneficial ownership of 2,287 shares held by Mr. Finnegan that may be acquiredwithin 60 days of February 15, 2017. Also includes 8,141 shares indirectly owned by GlenLake Partners L.P. Mr. Finnegan is the trustee of Glen Lake Partners Management Trust I, ageneral partner of Glen Lake Partners, L.P. Mr. Finnegan's wife, Mary M. Finnegan, is thetrustee of Glen Lake Partners Management Trust II, the other general partner of Glen LakePartners, L.P.David W. Nelms12,137*Includes beneficial ownership of 3,493 shares held by Mr. Nelms that may be acquired within60 days of February 15, 2017. Also includes beneficial ownership of 8,645 vested restrictedstock units on which settlement into shares of CDW Corporation common stock has beendeferred until the sooner of separation of service on the Board of Directors or five yearsfollowing vesting.Joseph R. Swedish5,086*Includes beneficial ownership of 3,493 shares held by Mr. Swedish that may be acquiredwithin 60 days of February 15, 2017.Donna F. Zarcone19,143*Includes beneficial ownership of 3,493 shares held by Ms. Zarcone that may be acquired within60 days of February 15, 2017. Also includes beneficial ownership of 8,645 vested restrictedstock units on which settlement into shares of CDW Corporation common stock has beendeferred until the sooner of separation of service on the Board of Directors or five yearsfollowing vesting.All directors and executiveofficers as a group (23persons)4,387,3192.7% * Denotes less than 1.0%138 Table of ContentsPrincipal StockholdersNameAggregate Number of SharesBeneficially OwnedPercent ofOutstanding SharesFMR LLC (1)245 Summer StreetBoston Massachusetts 0221018,628,24611.605%The Vanguard Group (2)100 Vanguard BoulevardMalvern, Pennsylvania 1935514,362,9498.94%Blackrock, Inc. (3)55 East 52 nd StreetNew York, New York 1005511,073,6896.9%(1) This information is based on a Schedule 13G/A filed by FMR LLC with the SEC on February 14, 2017 reporting beneficial ownership as of December 31,2016. FMR LLC reported that it has sole voting power with respect to 3,491,034 shares of our common stock and sole dispositive power with respect to18,628,246 shares of our common stock.(2) This information is based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 10, 2017 reporting beneficial ownership as ofDecember 31, 2016. The Vanguard Group reported that it has sole voting power with respect to 129,405 shares of our common stock, shared voting powerwith respect to 23,621 shares of our common stock, sole dispositive power with respect to 14,207,523 shares of our common stock and shared dispositivepower with respect to 155,426 shares of our common stock.(3) This information is based on a Schedule 13G/A filed by Blackrock, Inc. with the SEC on January 23, 2017 reporting beneficial ownership as of December 31,2016. Blackrock, Inc. reported that it has sole voting power with respect to 9,402,850 shares of our common stock and sole dispositive power with respect to11,073,689 shares of our common stock.Section 16(a) Beneficial Ownership Reporting ComplianceOur directors, executive officers, and owners of more than 10% of our common stock must file reports with the SEC under Section 16(a) of the Exchange Actregarding their ownership of and transactions in our common stock and securities related to our common stock. Based upon a review of these reports and inquirieswe have made, we believe that all reports required to be filed by our directors, executive officers and holders of more than 10% of our common stock pursuant toSection 16(a) of the Exchange Act during 2016 were filed on a timely basis.Equity Compensation Plan InformationThe following table provides information as of December 31, 2016 regarding the number of shares of our common stock that may be issued under our equitycompensation plans.December 31, 2016ABCPlan CategoryNumber of Securitiesto be Issuedupon Exercise ofOutstanding Options,Warrants and RightsWeighted AverageExercise Price ofOutstanding Options,Warrants and Rights Number of Securities RemainingAvailable for Future Issuance UnderEquity Compensation Plans (ExcludingSecurities Reflected in Column A)Equity Compensation PlansApproved by Stockholders6,497,992 (1)$29.36 (2)8,992,009 (3)Equity Compensation PlansNot Approved by Stockholders— ——Total6,497,992$29.368,992,009139 Table of Contents(1) Includes 3,781,051 shares issuable pursuant to outstanding stock options, 1,217,183 shares issuable pursuant to outstanding restricted stock units (includes37,695 vested restricted stock units on which settlement into shares has been deferred by certain of our non-employee directors and shares issuable pursuant torestricted stock units acquired through the deemed reinvestment of dividend equivalents) and 1,499,758 shares issuable pursuant to outstanding performanceshare units (assumes maximum achievement of the applicable performance goals (equivalent to 749,879 performance share units at target) and includes sharesissuable pursuant to performance share units acquired through the deemed reinvestment of dividend equivalents) under our 2013 Long-Term Incentive Plan.Excludes 492,036 performance shares issued to the Company’s executive officers (which are issued at the maximum achievement level of the applicableperformance goals (equivalent to 246,018 performance shares at target) and which include dividend equivalents) and 26,052 shares of restricted stock underour 2013 Long-Term Incentive Plan.(2)Excludes restricted stock units and performance share units that convert to shares of common stock from determination of Weighted Average Exercise Price.(3)Includes 1,014,786 shares available under our Coworker Stock Purchase Plan (“CSPP”). The CSPP provides the opportunity for eligible coworkers to acquireshares of our common stock at a 5% discount. There is no compensation expense associated with the CSPP.Item 13. Certain Relationships and Related Transactions, and Director IndependenceRelated Person Transactions Approval/Ratification ProceduresThe Company has written procedures regarding the approval and ratification of related person transactions. Under these procedures, our Audit Committee isresponsible for reviewing and approving or ratifying all related person transactions. If the Audit Committee determines that approval or ratification of a relatedperson transaction should be considered by the Board, such transaction will be submitted for consideration by all disinterested members of the Board. The Chair ofthe Audit Committee has the authority to approve or ratify any related person transaction in which the aggregate amount involved is expected to be less than$300,000 and in which the Chair of the Audit Committee has no direct or indirect interest.For these purposes, a related person transaction is considered to be any transaction that is required to be disclosed pursuant to Item 404 of the SEC’s Regulation S-K, including transactions between us and our directors, director nominees or executive officers, 5% record or beneficial owners of our common stock or immediatefamily members of any such persons, when such related person has a direct or indirect material interest in such transaction.Potential related person transactions are identified based on information submitted by our officers and managers and then submitted to our Audit Committee forreview. The CDW Way Code, our code of business conduct and ethics, requires that our directors and coworkers identify and disclose any material transaction orrelationship that could reasonably be expected to create a conflict of interest and interfere with their impartiality or loyalty to the Company. Further, at leastannually, each director and executive officer is required to complete a detailed questionnaire that asks questions about any business relationship that may give riseto a conflict of interest and all transactions in which we are involved and in which the executive officer, a director or a related person has a direct or indirectmaterial interest.When deciding to approve or ratify a related person transaction, our Audit Committee takes into account all relevant considerations, including without limitationthe following:•the size of the transaction and the amount payable to or by the related person;•the nature of the interest of the related person in the transaction;•whether the transaction may involve a conflict of interest;•whether the transaction is at arm’s-length, in the ordinary course or on terms no less favorable than terms generally available to an unaffiliated third party underthe same or similar circumstances; and•the purpose of the transaction and any potential benefits to us.Related Person TransactionsThere have been no transactions since January 1, 2016 for which disclosure under Item 404(a) of Regulation S-K is required.Independence of our Board of DirectorsSee Part III - Item 10 - “Independence of Our Board of Directors” for information about the independence of our directors, which is incorporated by reference inthis Item 13.Item 14. Principal Accountant Fees and ServicesErnst & Young LLP serves as the Company’s independent registered public accounting firm. The following table presents fees paid or accrued for the audit of theCompany’s annual consolidated financial statements and all other professional services rendered by Ernst & Young LLP for the years ended December 31, 2016and 2015 . Years Ended December 31,(in thousands) 2016 2015Audit fees $2,983.4 $2,142.0Audit-related fees 50.0 25.6Tax fees 196.5 390.6All other fees 2.8 2.8Total fees $3,232.7 $2,561.0Audit fees. Consists principally of fees related to the integrated audit of the Company’s consolidated financial statements and internal control over financial reporting, and the review of the consolidated financial statements included in the Company’s quarterly reports on Form 10-Q. Also includes services andprocedures performed in connection with the Company’s Registration Statements on Form S-3 and related prospectus supplement filings with the SEC.Audit-Related Fees. Consists principally of fees related to employee benefit plans.Tax Fees. Consists principally of fees related to tax advice and tax compliance.All Other Fees. Consists principally of fees paid for a license to use software relating to accounting rules and regulations.The services provided by Ernst & Young LLP were pre-approved by the Audit Committee. The Audit Committee has considered whether the provision of theabove-noted services is compatible with maintaining the independence of the independent registered public accounting firm and has determined, consistent withadvice from Ernst & Young LLP, that the provision of such services has not adversely affected Ernst & Young LLP’s independence.Pursuant to its charter, the Audit Committee is responsible for pre-approving all audit and permissible non-audit services provided to the Company by itsindependent registered public accounting firm, subject to any exceptions in the Exchange Act. The Audit Committee may delegate to one or more of its membersthe authority to grant such pre-approvals, provided that any decisions of such member or members to grant pre-approvals must be presented to the full AuditCommittee at its next scheduled meeting.140 Table of ContentsPART IVItem 15. Exhibits and Financial Statement Schedules(a)Financial Statements and SchedulesThe following documents are filed as part of this report:(1)Consolidated Financial Statements: Page Report of Independent Registered Public Accounting Firm55Consolidated Balance Sheets as of December 31, 201 6 and 201556Consolidated Statements of Operations for the years ended December 31, 201 6, 2015 and 201457Consolidated Statements of Comprehensive Income for the years ended December 31, 201 6, 2015 and 201458Consolidated Statements of Stockholders’ Equity for the years ended December 31, 20 16, 2015 and 201459Consolidated Statements of Cash Flows for the years ended December 31, 201 6, 2015 and 201460Notes to Consolidated Financial Statements61(2)Financial Statement Schedules: Page Schedule II – Valuation and Qualifying Accounts98All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of theschedule, or because the information required is included in the Consolidated Financial Statements or notes thereto.(b)ExhibitsThe information required by this Item is set forth on the exhibit index that follows the signature page of this report.141 Table of ContentsItem 16. Form 10-K SummaryNone.142 Table of ContentsSIGNATURESPursuant 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 itsbehalf by the undersigned, thereunto duly authorized. CDW CORPORATION Date:February 28, 2017 By:/s/ Thomas E. Richards Thomas E. Richards Chairman, President and Chief Executive OfficerPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.143 Table of ContentsSignature Title Date /s/ Thomas E. Richards Chairman, President and Chief Executive Officer(principal executive officer) and Director February 28, 2017Thomas E. Richards /s/ Ann E. Ziegler Senior Vice President and Chief Financial Officer(principal financial officer) February 28, 2017Ann E. Ziegler /s/ Neil B. Fairfield Vice President and Controller(principal accounting officer) February 28, 2017Neil B. Fairfield /s/ Virginia C. Addicott Director February 28, 2017Virginia C. Addicott /s/ Steven W. Alesio Director February 28, 2017Steven W. Alesio /s/ Barry K. Allen Director February 28, 2017Barry K. Allen /s/ James A. Bell Director February 28, 2017James A. Bell /s/ Benjamin D. Chereskin Director February 28, 2017Benjamin D. Chereskin /s/ Lynda M. Clarizio Director February 28, 2017Lynda M. Clarizio /s/ Paul J. Finnegan Director February 28, 2017Paul J. Finnegan /s/ David W. Nelms Director February 28, 2017David W. Nelms /s/ Joseph R. Swedish Director February 28, 2017Joseph R. Swedish /s/ Donna F. Zarcone Director February 28, 2017Donna F. Zarcone 144 Table of ContentsEXHIBIT INDEXExhibitNumber Description 3.1 Fifth Amended and Restated Certificate of Incorporation of CDW Corporation, previously filed as Exhibit 3.1 with CDW Corporation’sAmendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 3.1.1 Certificate of Amendment to Fifth Amended and Restated Certificate of Incorporation of CDW Corporation, previously filed as Exhibit 3.1with CDW Corporation's Form 8-K filed on May 19, 2016 and incorporated herein by reference. 3.2 Amended and Restated By-Laws of CDW Corporation, previously filed as Exhibit 3.2 with CDW Corporation’s Form 10-Q filed on August4, 2016 and incorporated herein by reference. 3.3 Articles of Organization of CDW LLC, previously filed as Exhibit 3.3 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg.No. 333-169258) and incorporated herein by reference. 3.4 Amended and Restated Limited Liability Company Agreement of CDW LLC, previously filed as Exhibit 3.4 with CDW Corporation’s FormS-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.5 Certificate of Incorporation of CDW Finance Corporation, previously filed as Exhibit 3.5 with CDW Corporation’s Form S-4 filed onSeptember 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.6 Amended and Restated By-Laws of CDW Finance Corporation, previously filed as Exhibit 3.1 with CDW Corporation's Form 10-Q filed onMay 8, 2015 and incorporated herein by reference. 3.7 Articles of Organization of CDW Technologies LLC (formerly CDW Technologies, Inc.), previously filed as Exhibit 3.7 with CDWCorporation's Form 10-K filed on February 25, 2016 and incorporated herein by reference. 3.8 Operating Agreement of CDW Technologies LLC (formerly CDW Technologies, Inc.), previously filed as Exhibit 3.8 with CDWCorporation's Form 10-K filed on February 25, 2016 and incorporated herein by reference. 3.9 Articles of Organization of CDW Direct, LLC, previously filed as Exhibit 3.9 with CDW Corporation’s Form S-4 filed on September 7, 2010(Reg. No. 333-169258) and incorporated herein by reference. 3.10 Amended and Restated Limited Liability Company Agreement of CDW Direct, LLC, previously filed as Exhibit 3.10 with CDWCorporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.11 Articles of Organization of CDW Government LLC, previously filed as Exhibit 3.11 with CDW Corporation’s Form S-4 filed on September7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.12 Amended and Restated Limited Liability Company Agreement of CDW Government LLC, previously filed as Exhibit 3.12 with CDWCorporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.13 Articles of Incorporation of CDW Logistics, Inc., previously filed as Exhibit 3.13 with CDW Corporation’s Form S-4 filed on September 7,2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.14 Amended and Restated By-Laws of CDW Logistics, Inc., previously filed as Exhibit 3.14 with CDW Corporation’s Form S-3 filed on July31, 2014 (Reg. No. 333-197744) and incorporated herein by reference. 4.1 Specimen Common Stock Certificate, previously filed as Exhibit 4.1 with CDW Corporation’s Amendment No. 3 to Form S-1 filed on June25, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 4.2 Indenture, dated as of August 5, 2014, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. BankNational Association, as trustee, previously filed as Exhibit 4.1 with CDW Corporation’s Form 8-K filed on August 6, 2014 and incorporatedherein by reference. 145 Table of ContentsExhibitNumber Description4.3 Form of 6% Senior Note (included as Exhibit A to Exhibit 4.2), previously filed as Exhibit 4.2 with CDW Corporation’s Form 8-K filed onAugust 6, 2014 and incorporated herein by reference. 4.4 Second Supplemental Indenture, dated as of March 3, 2015, by and among CDW LLC, CDW Finance Corporation, the guarantors partythereto and U.S. Bank National Association, as trustee, previously filed as Exhibit 4.2 with CDW Corporation’s Form 8-K filed on March 3,2015 and incorporated herein by reference. 4.5 Form of 5% Note (included as Exhibit A to Exhibit 4.4), previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on March 3,2015 and incorporated herein by reference. 4.6 Base Indenture, dated as of December 1, 2014, by and among CDW LLC, CDW Finance Corporation, CDW Corporation, the guarantorsparty thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed onDecember 1, 2014 and incorporated herein by reference. 4.7 First Supplemental Indenture, dated as of December 1, 2014, by and among CDW LLC, CDW Finance Corporation, CDW Corporation theguarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.2 with CDW Corporation's Form 8-Kfiled on December 1, 2014 and incorporated herein by reference. 4.8 Form of 5.5% Senior Note (included as Exhibit B to Exhibit 4.7), previously filed as Exhibit 4.3 with CDW Corporation's Form 8-K filed onDecember 1, 2014 and incorporated herein by reference. 10.1 Amended and Restated Revolving Loan Credit Agreement, dated as of June 6, 2014, by and among CDW LLC, the lenders from time to timeparty thereto, JPMorgan Chase Bank, N.A., as administrative agent, GE Commercial Distribution Finance Corporation, as floorplan fundingagent, and the joint lead arrangers, joint bookrunners, co-collateral agents, co-syndication agents and co-documentation agents party thereto,previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on June 9, 2014 and incorporated herein by reference. 10.2* First Amendment to ABL Credit Agreement, dated as of November 16, 2016, CDW LLC, the lenders from time to time party thereto,JPMorgan Chase Bank, N.A., as administrative agent, Deutsche Bank AG New York Branch and Wells Fargo Bank, N.A. (as successor toGE Commercial Distribution Finance Corporation), as co-collateral agents, and Wells Fargo & Company (as successor to GE CommercialDistribution Finance Corporation), as floorplan funding agent. 10.3 Amended and Restated Term Loan Agreement, dated as of August 17, 2016, by and among CDW LLC, the lenders from time to time partythereto, Barclays Bank PLC, as administrative agent and collateral agent, and the joint lead arrangers, joint bookrunners, syndication agentand co-documentation agents party thereto, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on August 18, 2016 andincorporated herein by reference. 10.4 Second Amended and Restated Guarantee and Collateral Agreement, dated April 29, 2013, by and among CDW LLC, the guarantors partythereto and Barclays Bank PLC, as collateral agent, previously filed as Exhibit 10.2 with CDW Corporation’s Form 8-K filed on May 1,2013 and incorporated herein by reference. 10.5§ Amended and Restated Compensation Protection Agreement, dated as of March 10, 2016, by and among CDW Corporation, CDW LLC andThomas E. Richards, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on March 14, 2016 and incorporated herein byreference. 10.6§ Form of Compensation Protection Agreement (executive officers other than Thomas E. Richards), previously filed as Exhibit 10.2 withCDW Corporation’s Form 8-K filed on March 14, 2016 and incorporated herein by reference. 10.7§ Form of Noncompetition Agreement under the Compensation Protection Agreement, previously filed as Exhibit 10.3 with CDWCorporation’s Form 8-K filed on March 14, 2016 and incorporated herein by reference. 10.8§ Letter Agreement, dated as of September 13, 2011, by and between CDW Direct, LLC and Christina M. Corley, previously filed as Exhibit10.31 with CDW Corporation’s Form 10-K filed on March 9, 2012 and incorporated herein by reference. 146 Table of ContentsExhibitNumber Description 10.9§ Form of Indemnification Agreement by and between CDW Corporation and its directors and officers, previously filed as Exhibit 10.32 withCDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.10 Share Repurchase Agreement, dated as of May 17, 2015, by and among the Company, Madison Dearborn Partners, LLC Capital Partners V-A, L.P., Madison Dearborn Partners, LLC Capital Partners V-C, L.P., Madison Dearborn Partners, LLC 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 byreference. 10.11 Letter Agreement, dated as of May 18, 2015, by and among the Company, Madison Dearborn Partners, LLC Capital Partners V-A, L.P.,Madison Dearborn Partners, LLC Capital Partners V-C, L.P., Madison Dearborn Partners, LLC Capital Partners V Executive-A, L.P., MDCPCo-Investors (CDW), L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P. and PEP Co-Investors (CWD) L.P.,previously filed as Exhibit 10.2 with CDW Corporation's Form 8-K filed on May 21, 2015 and incorporated herein by reference. 10.12§ CDW Corporation Amended and Restated 2013 Senior Management Incentive Plan, previously filed as Exhibit 10.1 with CDWCorporation’s Form 10-Q filed on May 5, 2016 and incorporated herein by reference. 10.13§ Amended and Restated 2013 Long-Term Incentive Plan of CDW Corporation, previously filed as Exhibit 10.1 with CDW Corporation'sForm 8-K filed on May 19, 2016 and incorporated herein by reference. 10.14§ Amended and Restated CDW Corporation Coworker Stock Purchase Plan, previously filed as Exhibit 10.1 with CDW Corporation’s Form10-Q filed on November 3, 2016 and incorporated herein by reference. 10.15§ Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Thomas E. Richards), previously filed asExhibit 10.37 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporatedherein by reference. 10.16§ 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) andincorporated herein by reference. 10.17§ Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed by Thomas E. Richards),previously filed as Exhibit 10.12 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by reference. 10.18§ Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed by Christina M. Corley),previously filed as Exhibit 10.13 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by reference. 10.19§ CDW Amended and Restated Restricted Debt Unit Plan, previously filed as Exhibit 10.3 with CDW Corporation’s Form 10-Q filed onNovember 7, 2013 and incorporated herein by reference. 10.20§ 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 onSeptember 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.21§ Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rotherand Matthew A. Troka), previously filed as Exhibit 10.24 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.22§,* Form of Stock Option Agreement (executive officers) under the CDW Corporation Amended and Restated 2013 Long-Term Incentive Plan. 147 Table of ContentsExhibitNumber Description 10.23§,* Form of Performance Share Unit Award Agreement (executive officers) under the CDW Corporation Amended and Restated 2013 Long-Term Incentive Plan. 10.24§,* Form of Performance Share Award Agreement (executive officers for 2015 and 2016 awards) under the CDW Corporation Amended andRestated 2013 Long-Term Incentive Plan. 10.25§ Form of Non-Employee Director Restricted Stock Unit Award Agreement under the CDW Corporation 2013 Long-Term Incentive Plan,previously filed as Exhibit 10.6 with CDW Corporation’s Form 10-Q filed on May 12, 2014 and incorporated herein by reference. 12.1* Computation of ratio of earnings to fixed charges. 21.1* List of subsidiaries. 23.1* Consent of Ernst & Young LLP. 31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934. 31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934. 32.1** Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350. 32.2** Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350. 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Label Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document ________________*Filed herewith**These items are furnished and not filed.§A management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K.148 Exhibit 10.2FIRST AMENDMENT TO ABL CREDIT AGREEMENTFIRST AMENDMENT TO ABL CREDIT AGREEMENT dated as of November 16, 2016 (this “ First Amendment ”) to theAmended and Restated Revolving Loan Credit Agreement dated as of June 6, 2014 (the “ ABL Credit Agreement ”) among CDW LLC, anIllinois limited liability company (“ CDW ” or the “ Borrower ”), each of the Lenders party thereto (collectively the “ Lenders ” and,individually, a “ Lender ”), JPMorgan Chase Bank, N.A., as Administrative Agent, Deutsche Bank AG New York Branch and Wells FargoBank, N.A. (as successor to General Electric Capital Corporation), as Co-Collateral Agents, and Wells Fargo & Company (as successor to GECommercial Distribution Finance Corporation), as Floorplan Funding Agent. WHEREAS, the Borrower and the Required Lenders wish to amend the ABL Credit Agreement as set forth herein as of theFirst Amendment Effective Date (as defined below);NOW, THEREFORE, the parties hereto hereby agree as follows:Section 1. Definitions . Capitalized terms used in this First Amendment and not otherwise defined areused herein as defined in the ABL Credit Agreement (as amended hereby).Section 2. Amendment of ABL Credit Agreement . Effective as of the First Amendment Effective Date, the ABLCredit Agreement shall be amended as follows:2.1 References in the ABL Credit Agreement (including references to the ABL Credit Agreement as amendedhereby) to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to bereferences to the ABL Credit Agreement as amended hereby.2.2 Section 1.01 of the ABL Credit Agreement shall be amended by inserting the following definition in theappropriate alphabetical location:““ Trigger Year ” means any fiscal year of the Borrower during which two or more “triggering events” (as defined in Section6.11 ) have occurred or on the last day of which a “triggering event” exists.”2.3 Section 5.04(d) of the ABL Credit Agreement shall be amended and restated in its entirety to read as follows:“(d) as soon as available, but in any event not later than the fifth Business Day after the 90th day after the commencementof any fiscal year of the Borrower immediately following a Trigger Year, copies of projected consolidated balance sheet and relatedstatements of income and cash flows of the Borrower and its subsidiaries for such fiscal year, such projections to be accompanied bya certificate of a Financial Officer of the Borrower to the effect that such Financial Officer believes such projections to have beenprepared on the basis of reasonable assumptions;”US-DOCS\73179586.3 2.4 The proviso to each of Section 6.04(a) and Section 6.04(c) of the ABL Credit Agreement shall be amended andrestated in its entirety to read as follows:“ provided that the Borrower shall notify the Administrative Agent of any such transaction and shall take all required actions eitherprior to or upon the later to occur of (x) 30 days following such transaction and (y) the earlier of (1) the date of required delivery ofthe next Section 5.04 Financials and (2) the date which is 45 days after the end of the most recently ended fiscal quarter (or suchlonger period as to which the Administrative Agent may consent) in order to preserve and protect the Liens on the Collateral securingthe Secured Obligations.”Section 3. Confirmation of Security Interest . The Borrower, by its execution of this First Amendment, herebyconfirms and ratifies that all of its obligations as a “Grantor”, “Mortgagor” and “Trustor” or otherwise under the Security Documentsto which it is a party shall continue in full force and effect for the benefit of the Agents and the Lenders with respect to the ABLCredit Agreement as amended hereby. The Borrower, by its execution of this First Amendment, hereby confirms that the securityinterests granted by it under each of the Security Documents to which it is a party shall continue in full force and effect in favor ofthe Collateral Agent for the benefit of the Lenders and the Agents with respect to the ABL Credit Agreement as amended hereby.Section 4. Conditions Precedent to Effectiveness . This First Amendment shall become effective on the date uponwhich each of the following conditions is satisfied (the “ First Amendment Effective Date ”):(a) First Amendment . This First Amendment shall have been duly executed and delivered by the Borrower,Holdings, the Subsidiary Guarantors and the Required Lenders and acknowledged by the Administrative Agent.(b) Financial Officer’s Certificate . The Administrative Agent shall have received a certificate, dated as ofthe First Amendment Effective Date and signed by a Financial Officer of the Borrower, certifying compliance with the conditionsprecedent set forth in Sections 4.01(c) and 4.01(d) of this First Amendment.(c) No Defaults . No Default or Event of Default shall have occurred and be continuing under the ABLCredit Agreement.(d) Representations and Warranties . The representations and warranties set forth in Article III of the ABLCredit Agreement and in each other Loan Document shall be true and correct in all material respects on and as of the FirstAmendment Effective Date with the same effect as though made on and as of such date, except to the extent such representations andwarranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlierdate.(e) Fees and Expenses . The Administrative Agent shall have received all fees and other amounts due andpayable on or prior to the First Amendment Effective Date , including, to the extent invoiced at least one Business Day prior to theFirst Amendment Effective-2-US-DOCS\73179586.3 Date , reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrowerhereunder or under any other Loan Document.Section 5. Miscellaneous . Except as herein provided, the ABL Credit Agreement shall remain unchanged and in full forceand effect and is hereby in all respects ratified and confirmed. On and after the First Amendment Effective Date, each reference inthe ABL Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the ABL CreditAgreement shall mean and be a reference to the ABL Credit Agreement, as amended by this First Amendment. The execution,delivery and effectiveness of this First Amendment shall not, except as expressly provided herein, operate as a waiver of any right,power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of anyprovision of any of the Loan Documents. On and after the effectiveness of this First Amendment, this First Amendment shall for allpurposes constitute a Loan Document. This First Amendment may be executed in any number of counterparts, all of which takentogether shall constitute one and the same agreement and any of the parties hereto may execute this First Amendment by signing anysuch counterpart. This First Amendment shall be governed by, and construed in accordance with, the law of the State of New York.[remainder of page intentionally blank]-3-US-DOCS\73179586.3 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to ABL Credit Agreement to be dulyexecuted and delivered as of the day and year first above written.Acknowledged byJPMORGAN CHASE BANK, N.A. ,as Administrative AgentBy: /s/ Peter B. Thauer Name: Peter B Thauer Title: Managing Director[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 CDW LLC ,as BorrowerBy: /s/ Robert J Welyki Name: Robert J. WelykiTitle: Vice President, Treasurer and Assistant Secretary [Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 BARCLAYS BANK PLC,as a LenderBy: /s/ Marguerite Sutton Name: Marguerite SuttonTitle: Vice President[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 BANK OF AMERICA, N.A.,as a LenderBy: /s/ Steve Teufel Name: Steve TeufelTitle: Vice President[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 CITY NATIONAL BANK, A National Banking Association,as a LenderBy: /s/ Lauren Bourke Name: Lauren BourkeTitle: Vice President[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 DEUTSCHE BANK AG NEW YORK BRANCH,as a LenderBy: /s/ Anca Trifan Name: Anca TrifanTitle: Managing DirectorBy: /s/ Marcus M. Tarkington Name: Marcus M. TarkingtonTitle: Director[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 MORGAN STANLEY BANK, N.A.,as a LenderBy: /s/ Gilroy D’Souza Name: Gilroy D’SouzaTitle: Authorized Signatory[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 MORGAN STANLEY SENIOR FUNDING, INC.,as a LenderBy: /s/ Gilroy D’Souza Name: Gilroy D’SouzaTitle: Vice President[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 MUFG UNION BANK, N.A.,as a LenderBy: /s/ Brent Housteau Name: Brent HousteauTitle: Director[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 THE NORTHERN TRUST COMPANY,as a LenderBy: /s/ John Lascody Name: John LascodyTitle: Vice President[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 PNC BANK, National Association,as a LenderBy: /s/ Adam Moss Name: Adam MossTitle: Vice President[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 ROYAL BANK OF CANADA,as a LenderBy: /s/ Nicholas Heslip Name: Nicholas HeslipTitle: Authorized Signatory[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 SUNTRUST BANK,as a LenderBy: /s/ Jonathan Keegan Name: Jonathan KeeganTitle: Vice President[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 U.S.BANK NATIONAL ASSOCIATION,as a LenderBy: /s/ David Lawrence Name: David LawrenceTitle: Vice President[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 WELLS FARGO CAPITAL FINANCE, LLC,as a LenderBy: /s/ Maria Quintanilla Name: Maria QuintanillaTitle: Authorized Signatory[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 By its signature below, the undersigned hereby consents to the foregoing First Amendment to ABL Credit Agreement andhereby confirms that all of its obligations under each Security Document (as defined in the ABL Credit Agreement) shall continue unchangedand in full force and effect for the benefit of the Agents and the Lenders with respect to the ABL Credit Agreement as amended by the FirstAmendment.CDW CORPORATION ,as a Guarantor By: /s/ Robert J Welyki Name: Robert J. WelykiTitle: Vice President, Treasurer and Assistant SecretaryCDW DIRECT, LLC ,as a GuarantorBy: /s/ Robert J Welyki Name: Robert J. WelykiTitle: Vice President, Treasurer and Assistant SecretaryCDW GOVERNMENT LLC ,as a GuarantorBy: /s/ Robert J Welyki Name: Robert J. WelykiTitle: Vice President, Treasurer and Assistant SecretaryCDW TECHNOLOGIES LLC ,as a GuarantorBy: /s/ Robert J Welyki Name: Robert J. WelykiTitle: Vice President, Treasurer and Assistant SecretaryCDW LOGISTICS, INC. ,as a GuarantorBy: /s/ Robert J Welyki Name: Robert J. WelykiTitle: Vice President, Treasurer and Assistant Secretary[Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 [Signature Page to First Amendment to ABL Credit Agreement (CDW)]US-DOCS\73179586.3 Exhibit 10.22CDW CORPORATION AMENDED AND RESTATED 2013 LONG-TERM INCENTIVE PLAN Stock Option AgreementCDW Corporation, a Delaware corporation (the “ Company ”), hereby grants to the individual (“ Optionee ”) named in theaward notice attached hereto (the “ Award Notice ”) as of the date set forth in the Award Notice (the “ Option Date ”), pursuant to theprovisions of the CDW Corporation Amended and Restated 2013 Long-Term Incentive Plan (the “ Plan ”), an option to purchase from theCompany the number of shares of the Company’s Common Stock, par value $0.01 per share (“ Common Stock ”), set forth in the AwardNotice at the price per share set forth in the Award Notice (the “ Exercise Price ”) (the “ Option ”), upon and subject to the terms andconditions set forth below, in the Award Notice and in the Plan. Capitalized terms not defined herein shall have the meanings specified in thePlan.1. Option Subject to Acceptance of Agreement . The Option shall be null and void unless Optionee shall accept thisAgreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to theCompany (or electronically accepting this Agreement within the Optionee’s stock plan account with the Company’s stock plan administratoraccording to the procedures then in effect).2. Time and Manner of Exercise of Option .2.1. Maximum Term of Option . In no event may the Option be exercised, in whole or in part, after the expiration date setforth in the Award Notice (the “ Expiration Date ”).2.2. Vesting and Exercise of Option . The Option shall become vested and exercisable in accordance with the vestingschedule set forth in the Award Notice (the “ Vesting Schedule ”). The period of time prior to the full vesting of the Option shall be referredto herein as the “ Vesting Period .” The Option shall be vested and exercisable following a termination of Optionee’s employment accordingto the following terms and conditions:(a) Termination due to Death or Disability . If Optionee’s employment with the Company terminates prior to the end of theVesting Period by reason of Optionee’s death or a termination by the Company due to Disability, then in either such case, the Option shall be100% vested as of the date of termination, and the Option may thereafter be exercised by Optionee or Optionee’s executor, administrator,legal representative, guardian or similar person until and including the earlier to occur of (i) the date which is one year after the date oftermination of employment and (ii) the Expiration Date.(b) Termination due to Retirement . If Optionee’s employment with the Company terminates prior to the end of theVesting Period by reason of Optionee’s Retirement, then the Option shall continue to vest in accordance with the Vesting Schedule, providedthat Optionee complies with all Restrictive Covenants through the expiration of the Vesting Period, and the Option may thereafter beexercised by Optionee until and including the earlier to occur of (i) the date which is three years after the date of termination and (ii) theExpiration Date.(c) Termination other than for Cause, Death, Disability or Retirement . Subject to Section 2.2(e) , if Optionee’semployment with the Company terminates prior to the end of the Vesting Period by reason of a termination of Optionee’s employment (i) bythe Company for any reason other than for Cause, death or Disability or (ii) by the Optionee for any reason other than Retirement, the Option,only to the extent vested on the effective date of such termination of employment, may thereafter be exercised by Optionee until andincluding the earlier to occur of (i) the date which is ninety (90) days after the date of such termination of employment and (ii) the ExpirationDate.(d) Termination for Cause . If Optionee’s employment with the Company terminates by reason of the Company’stermination of Optionee’s employment for Cause, then the Option, whether or not vested, shall terminate immediately upon such terminationof employment. (e) Change in Control .(i) In the event of a Change in Control prior to the end of the Vesting Period pursuant to which the Option is noteffectively assumed or continued by the surviving or acquiring corporation in such Change in Control (as determined by the Board orCommittee, with appropriate adjustments to the number and kind of shares, in each case, that preserve the intrinsic value and othermaterial terms and conditions of the outstanding Option as in effect immediately prior to the Change in Control and in accordancewith Section 409A of the Code), the Option shall be 100% vested immediately prior to such Change in Control and the Optionee shallreceive in full settlement for such Option a cash payment in an amount equal to the aggregate number of shares of Common Stockthen subject to the Option multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of theChange in Control, over the Exercise Price.(ii) In the event of a Change in Control prior to the end of the Vesting Period pursuant to which the Option iseffectively assumed or continued by the surviving or acquiring corporation in such Change in Control (as determined by the Board orCommittee, with appropriate adjustments to the number and kind of shares, in each case, that preserve the intrinsic value and othermaterial terms and conditions of the outstanding Option as in effect immediately prior to the Change in Control and in accordancewith Section 409A of the Code) and the Company terminates Optionee’s employment without Cause or Optionee resigns for GoodReason within 24 months following such Change in Control and Optionee executes and does not revoke a waiver and release ofclaims in the form prescribed by the Company within 60 days after the date of such termination, the Option shall be 100% vestedupon such termination of employment, and the Option may thereafter be exercised by Optionee until and including the earlier to occurof (i) the date which is one year after the date of termination of employment and (ii) the Expiration Date.(f) Termination of Option During Blackout Period . If the Option shall expire under Section 2.2 during any period whenthe Optionee is prohibited from trading in securities of the Company pursuant to the Company’s insider trading policy or other policy of theCompany or during a period when the exercise of the Option would violate applicable securities laws (each, a “ Blackout Period ”), then theperiod during which the Option is exercisable shall be extended to the date that is 30 days after the expiration of such Blackout Period.(g) Definitions .(i) Cause . For purposes of this Option, “ Cause ” shall mean one or more of the following: (A) Optionee’s refusal(after written notice and reasonable opportunity to cure) to perform duties properly assigned which are consistent with the scope andnature of Optionee's position; (B) Optionee’s commission of an act materially and demonstrably detrimental to the financial conditionand/or goodwill of the Company or any of its Subsidiaries, which act constitutes gross negligence or willful misconduct in theperformance of duties to the Company or any of its Subsidiaries; (C) Optionee’s commission of any theft, fraud, act of dishonesty orbreach of trust resulting in or intended to result in material personal gain or enrichment of Optionee at the direct or indirect expense ofthe Company or any of its Subsidiaries; (D) Optionee’s conviction of, or plea of guilty or nolo contendere to, a felony; (E) Optionee’smaterial violation of any Restrictive Covenant; or (F) Optionee’s material and willful violation of the Company’s written policies orof Optionee’s statutory or common law duty of loyalty to the Company or its affiliates that in either case is materially injurious to theCompany, monetarily or otherwise. No act or failure to act will be considered “willful” (x) unless it is done, or omitted to be done, byOptionee in bad faith or without reasonable belief that Optionee’s action or omission was in the best interests of the Company or (y) ifit is done, or omitted to be done, in reliance on the informed advice of the Company’s outside counsel or independent accountants orat the express direction of the Board.(ii) Disability . For purpose of this Option, “ Disability ” shall mean Optionee’s absence from the Optionee’s dutieswith the Company on a full-time basis for at least 180 consecutive days as a result of the Optionee’s incapacity due to physical ormental illness, or under such other circumstances as the Committee determines, in its sole discretion, constitute a Disability. (iii) Good Reason . For purposes of this Option, “ Good Reason ” shall mean that the Optionee resigns fromemployment with the Company and its Subsidiaries as a result of one or more of the following reasons: (A) the Company reduces theamount of the Optionee’s base salary or cash bonus opportunity (it being understood that the Board shall have discretion to set theCompany’s and the Optionee’s personal performance targets to which the cash bonus will be tied), (B) the Company adverselychanges the Optionee’s reporting responsibilities, titles or office as in effect as of the date hereof or reduces his/her position,authority, duties, responsibilities or status materially inconsistent with the positions, authority, duties, responsibilities or status theOptionee then holds, (C) any successor to the Company in any merger, consolidation or transfer of assets does not expressly assumeany material obligation of the Company to the Optionee under any agreement or plan pursuant to which the Optionee receivesbenefits or rights, or (D) the Company changes the Optionee’s place of work to a location more than fifty (50) miles from theOptionee’s present place of work; provided , however , that the occurrence of any such condition shall not constitute Good Reasonunless (1) Optionee provides written notice to the Company of the existence of such condition not later than 60 days after Optioneeknows or reasonably should know of the existence of such condition, (2) the Company fails to remedy such condition within 30 daysafter receipt of such notice and (3) Optionee resigns due to the existence of such condition within 60 days after the expiration of theremedial period described in clause (2) hereof.(iv) Restrictive Covenant . For purposes of this Option, “ Restrictive Covenant ” shall mean any non-competition,non-solicitation, confidentiality or protection of trade secrets (or similar provision regarding intellectual property) covenant by whichOptionee is bound under any agreement between Optionee and the Company and its Subsidiaries.(v) Retirement . For purposes of this Option, “ Retirement ” shall mean Optionee’s termination of employment at atime when (A) the Optionee has attained age 55 and (B) the sum of the Optionee’s age and years of employment with or service to theCompany or its Subsidiaries equals or exceeds 65; provided that such termination occurs at least six months after the Option Date.2.3. Method of Exercise . Subject to the limitations set forth in this Agreement, the Option, to the extent vested, may beexercised by Optionee (a) by delivering to the Company an exercise notice in the form prescribed by the Company specifying the number ofwhole shares of Common Stock to be purchased and by accompanying such notice with payment therefor in full (or by arranging for suchpayment to the Company’s satisfaction) either (i) in cash, (ii) to the extent permitted by the Committee, by delivery to the Company (eitheractual delivery or by attestation procedures established by the Company) of shares of Common Stock having an aggregate Fair Market Value,determined as of the date of exercise, equal to the aggregate purchase price payable pursuant to the Option by reason of such exercise, (iii) tothe extent permitted by the Committee, by authorizing the Company to withhold whole shares of Common Stock which would otherwise bedelivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy suchobligation, (iv) except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to the Company to whom Optionee hassubmitted an irrevocable notice of exercise or (v) by a combination of (i), (ii) and (iii), and (b) by executing such documents as the Companymay reasonably request. No share of Common Stock or certificate representing a share of Common Stock shall be issued or delivered untilthe full purchase price therefor and any withholding taxes thereon, as described in Section 5.1 , have been paid.2.4. Termination of Option . In no event may the Option be exercised after it terminates as set forth in this Section 2.4 .The Option shall terminate, to the extent not earlier terminated pursuant to Section 2.2 or exercised pursuant to Section 2.3 , on the ExpirationDate. Upon the termination of the Option, the Option and all rights hereunder shall immediately become null and void.3. Clawback of Proceeds .3.1. Clawback of Proceeds . This award is subject to the clawback provisions in Section 5.15 of the Plan. In addition, ifOptionee materially violates any Restrictive Covenant and such violation occurs on or before the third anniversary of the date of Optionee’stermination of employment: (i) the Option shall be forfeited and (ii) any and all Option Proceeds (as hereinafter defined) shall be immediatelydue and payable by the Optionee to the Company. For purposes of this Section, “ Option Proceeds ” shall mean, with respect to any portion of the Option which is exercised laterthan 24 months prior to the date of the Optionee’s termination of employment or service with the Company (x) the difference between (A) theFair Market Value of a share of Common Stock on the date such portion of the Option was exercised and (B) the per share exercise price ofthe Option, multiplied by (y) the number of shares of Common Stock purchased pursuant to the exercise of such portion of the Option. Theremedy provided by this Section shall be in addition to and not in lieu of any rights or remedies which the Company may have against theOptionee in respect of a breach by the Optionee of any duty or obligation to the Company.3.2. Right of Setoff . The Optionee agrees that by accepting the Award Notice the Optionee authorizes the Company andits affiliates to deduct any amount or amounts owed by the Optionee pursuant to this Section 3 from any amounts payable by or on behalf ofthe Company or any affiliate to the Optionee, including, without limitation, any amount payable to the Optionee as salary, wages, vacationpay, bonus or the settlement of the Option or any stock-based award. This right of setoff shall not be an exclusive remedy and the Company’sor an affiliate’s election not to exercise this right of setoff with respect to any amount payable to the Optionee shall not constitute a waiver ofthis right of setoff with respect to any other amount payable to the Optionee or any other remedy.4. Transfer Restrictions and Investment Representations .4.1. Nontransferability of Option . The Option may not be transferred by Optionee other than by will or the laws of descentand distribution or pursuant to the designation of one or more beneficiaries on the form prescribed by the Company. Except to the extentpermitted by the foregoing sentence, (i) during Optionee’s lifetime the Option is exercisable only by Optionee or Optionee’s legalrepresentative, guardian or similar person and (ii) the Option may not be sold, transferred, assigned, pledged, hypothecated, encumbered orotherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attemptto so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and all rights hereunder shallimmediately become null and void.4.2. Investment Representation . Optionee hereby represents and covenants that (a) any shares of Common Stockpurchased upon exercise of the Option will be purchased for investment and not with a view to the distribution thereof within the meaning ofthe Securities Act of 1933, as amended (the “ Securities Act ”), unless such purchase has been registered under the Securities Act and anyapplicable state securities laws; (b) any subsequent sale of any such shares shall be made either pursuant to an effective registration statementunder the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act andsuch state securities laws; and (c) if requested by the Company, Optionee shall submit a written statement, in a form satisfactory to theCompany, to the effect that such representation (x) is true and correct as of the date of any purchase of any shares hereunder or (y) is true andcorrect as of the date of any sale of any such shares, as applicable. As a further condition precedent to any exercise of the Option, Optioneeshall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or deliveryof the shares and, in connection therewith, shall execute any documents which the Board or the Committee shall in its sole discretion deemnecessary or advisable.5. Additional Terms and Conditions .5.1. Withholding Taxes . (a) As a condition precedent to the issuance of Common Stock following the exercise of theOption, Optionee shall, upon request by the Company, pay to the Company in addition to the purchase price of the shares, such amount as theCompany determines is required, under all applicable federal, state, local or other laws or regulations, to be withheld and paid over as incomeor other withholding taxes (the “ Required Tax Payments ”) with respect to such exercise of the Option. If Optionee shall fail to advance theRequired Tax Payments after request by the Company, the Company may, in its discretion, deduct any Required Tax Payments from anyamount then or thereafter payable by the Company to Optionee.(b) Optionee may elect to satisfy his or her obligation to advance the Required Tax Payments by any of the followingmeans: (i) a cash payment to the Company; (ii) to the extent permitted by the Committee, delivery to the Company (either actual delivery orby attestation procedures established by the Company) of previously owned whole shares of Common Stock having an aggregate Fair MarketValue, determined as of the date on which such withholding obligation arises (the “ Tax Date ”), equal to the Required Tax Payments; (iii) to the extent permitted by the Committee,authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered to Optionee upon exercise of theOption having an aggregate Fair Market Value, determined as of the Tax Date, equal to the Required Tax Payments; (iv) except as may beprohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom Optionee has submitted an irrevocablenotice of exercise or (v) any combination of (i), (ii) and (iii). Shares of Common Stock to be delivered or withheld may not have a FairMarket Value in excess of the amount determined by applying the maximum individual statutory tax rate in the Optionee’s jurisdiction;provided that the Committee shall be permitted to limit the number of shares so delivered or withheld to a lesser number if necessary, asdetermined by the Committee, to avoid adverse accounting consequences or for administrative convenience; provided , however , that if afraction of a share of Common Stock would be required to satisfy the maximum individual statutory rate in the Optionee’s jurisdiction, thenthe number of shares of Common Stock to be delivered or withheld may be rounded up to the next nearest whole share of Common Stock. Noshare of Common Stock or certificate representing a share of Common Stock shall be issued or delivered until the Required Tax Paymentshave been satisfied in full.5.2. Adjustment . In the event of any equity restructuring (within the meaning of Financial Accounting Standards BoardAccounting Standards Codification Topic 718, Compensation—Stock Compensation) that causes the per share value of shares of CommonStock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, thenumber and class of securities subject to the Option and the Exercise Price shall be equitably adjusted by the Committee, such adjustment tobe made in accordance with Section 409A of the Code. In the event of any other change in corporate capitalization, including a merger,consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoingsentence may be made as determined to be appropriate and equitable by the Committee (or, if the Company is not the surviving corporation inany such transaction, the board of directors of the surviving corporation) to prevent dilution or enlargement of rights of participants. Thedecision of the Committee regarding any such adjustment shall be final, binding and conclusive.5.3. Compliance with Applicable Law . The Option is subject to the condition that if the listing, registration orqualification of the shares subject to the Option upon any securities exchange or under any law, or the consent or approval of anygovernmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the purchase orissuance of shares hereunder, the Option may not be exercised, in whole or in part, and such shares may not be issued, unless such listing,registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to theCompany. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval orother action.5.4. Issuance or Delivery of Shares . Upon the exercise of the Option, in whole or in part, the Company shall issue ordeliver, subject to the conditions of this Agreement, the number of shares of Common Stock purchased against full payment therefor. Suchissuance shall be evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. TheCompany shall pay all original issue or transfer taxes and all fees and expenses incident to such issuance, except as otherwise provided inSection 5.1 .5.5. Option Confers No Rights as Stockholder . Optionee shall not be entitled to any privileges of ownership with respectto shares of Common Stock subject to the Option unless and until such shares are purchased and issued upon the exercise of the Option, inwhole or in part, and Optionee becomes a stockholder of record with respect to such issued shares. Optionee shall not be considered astockholder of the Company with respect to any such shares not so purchased and issued.5.6. Option Confers No Rights to Continued Employment . In no event shall the granting of the Option or its acceptance byOptionee, or any provision of this Agreement or the Plan, give or be deemed to give Optionee any right to continued employment by theCompany, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate ofthe Company to terminate the employment of any person at any time. 5.7. Decisions of Board or Committee . The Board or the Committee shall have the right to resolve all questions whichmay arise in connection with the Option or its exercise. Any interpretation, determination or other action made or taken by the Board or theCommittee regarding the Plan or this Agreement shall be final, binding and conclusive.5.8. Successors . This Agreement shall be binding upon and inure to the benefit of any successor or successors of theCompany and any person or persons who shall, upon the death of Optionee, acquire any rights hereunder in accordance with this Agreementor the Plan.5.9. Notices . All notices, requests or other communications provided for in this Agreement shall be made, if to theCompany, to CDW Corporation, Attn: General Counsel, 200 N. Milwaukee Avenue, Vernon Hills, Illinois 60061, and if to Optionee, to thelast known mailing address of Optionee contained in the records of the Company. All notices, requests or other communications provided forin this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c)by mailing in the United States mails or (d) by express courier service. The notice, request or other communication shall be deemed to bereceived upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitledthereto if by United States mail or express courier service; provided , however , that if a notice, request or other communication sent to theCompany is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of theCompany.5.10. Governing Law . This Agreement, the Option and all determinations made and actions taken pursuant hereto andthereto, to the extent not governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware andconstrued in accordance therewith without giving effect to principles of conflicts of laws.5.11. Agreement Subject to the Plan . This Agreement is subject to the provisions of the Plan and shall be interpreted inaccordance therewith. In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control. The Optionee herebyacknowledges receipt of a copy of the Plan.5.12. Entire Agreement . This Agreement and the Plan constitute the entire agreement of the parties with respect to thesubject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect tothe subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Companyand the Optionee.5.13. Partial Invalidity . The invalidity or unenforceability of any particular provision of this Agreement shall not effect theother provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.5.14. Amendment and Waiver . The provisions of this Agreement may be amended or waived only by the writtenagreement of the Company and the Optionee, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shallaffect the validity, binding effect or enforceability of this Agreement.5.15. Counterparts . The Award Notice may be executed in two counterparts, each of which shall be deemed an originaland both of which together shall constitute one and the same instrument. Exhibit 10.23CDW CORPORATIONAMENDED AND RESTATED 2013 LONG-TERM INCENTIVE PLAN PERFORMANCE SHARE UNIT AWARD AGREEMENTCDW Corporation, a Delaware corporation (the “ Company ”), hereby grants to the individual (the “ Holder ”) named in theaward notice attached hereto (the “ Award Notice ”) as of the date set forth in the Award Notice (the “ Grant Date ”), pursuant to theprovisions of the CDW Corporation Amended and Restated 2013 Long-Term Incentive Plan (the “ Plan ”), a performance share unit award(the “ Award ”) with respect to the number of shares of the Company’s Common Stock, par value $0.01 per share (“ Stock ”), set forth in theAward Notice, upon and subject to the restrictions, terms and conditions set forth in the Plan and this agreement (the “ Agreement ”).Capitalized terms not defined herein shall have the meanings specified in the Plan.1. Award Subject to Acceptance of Agreement . The Award shall be null and void unless the Holder accepts thisAgreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to theCompany (or electronically accepting this Agreement within the Holder’s stock plan account with the Company’s stock plan administratoraccording to the procedures then in effect).2. Rights as a Stockholder . The Holder shall not be entitled to any privileges of ownership with respect to the shares ofStock subject to the Award unless and until, and only to the extent, such shares become vested pursuant to Section 3 hereof and the Holderbecomes a stockholder of record with respect to such shares. As of each date on which the Company pays a cash dividend to record owners ofshares of Stock (a “ Dividend Date ”), then the number of shares subject to the Award shall increase by (i) the product of the total number ofshares subject to the Award immediately prior to such Dividend Date multiplied by the dollar amount of the cash dividend paid per share ofStock by the Company on such Dividend Date, divided by (ii) the Fair Market Value of a share of Stock on such Dividend Date. Any suchadditional shares shall be subject to the same vesting conditions and payment terms set forth herein as the shares to which they relate.3. Restriction Period and Vesting .3.1. Performance-Based Vesting Conditions . Subject to the remainder of this Section 3 , the Stock shall vest pursuant tothe terms of this Agreement and the Plan based on the achievement of the performance goals set forth in the Award Notice over theperformance period set forth in the Award Notice (the “ Performance Period ”), provided that that the Holder remains in continuousemployment with the Company through the end of the Performance Period. Attainment of the performance goals shall be determined andcertified by the Committee in writing prior to the settlement of the Award.3.2. Termination of Employment(a) Termination due to Retirement, Death or Disability . If the Holder’s employment with the Company terminates prior tothe end of the Performance Period and prior to a Change in Control by reason of the Holder’s Retirement, death or a termination by theCompany due to Disability, the Performance Period shall continue through the last day thereof and the Holder shall be entitled to aExec Form 1 prorated Award, provided that the Holder has continuously complied with the Restrictive Covenants. Such prorated Award shall be equal tothe number of shares earned at the end of the Performance Period based on the actual performance during the Performance Period multipliedby a fraction, the numerator of which shall equal the number of full months in the Performance Period during which the Holder was employedby the Company and the denominator of which shall equal 36.(b) Termination other than due to Retirement, Death or Disability . If the Holder’s employment with the Companyterminates prior to the end of the Performance Period and prior to a Change in Control by reason of (i) the Company’s termination of theHolder’s employment for any reason other than death or Disability or (ii) the Holder’s resignation for any reason other than Retirement, thenthe Award shall be immediately forfeited by the Holder and cancelled by the Company.3.3. Change in Control .(a) Satisfaction of Performance Goals . If a Change in Control occurs prior to the 24-month anniversary of the first day ofthe Performance Period, the performance goals set forth in Section 3.1 shall be deemed to have been satisfied at the target level. If the Changein Control occurs on or after the 24-month anniversary of the first day of the Performance Period, the number of shares of Stock earnedpursuant to Section 3.1 shall be based on the projected level of performance through the end of the Performance Period, as determined by theCommittee prior to the date of the Change in Control based on performance through the date of such determination. If the Change in Controloccurs after the date on which the Participant’s employment is terminated by reason of death, Disability or Retirement, pursuant to Section3.2(a) , the number of shares earned for purposes of such section shall be determined as of the date of the Change in Control in accordancewith this Section 3.3(a) and shall be settled within 70 days following such Change in Control.(b) Settlement of Award Not Assumed . In the event of a Change in Control prior to the end of the Performance Periodpursuant to which the Award is not effectively assumed or continued by the surviving or acquiring corporation in such Change in Control (asdetermined by the Board or Committee, with appropriate adjustments to the number and kind of shares, in each case, that preserve the valueof the shares subject to the Award and other material terms and conditions of the outstanding Award as in effect immediately prior to theChange in Control), the Award shall vest as of the date of the Change in Control, based on the performance level determined in accordancewith Section 3.3(a) and shall be settled in cash within 70 days following the Change in Control.(c) Settlement of Award Assumed . In the event of a Change in Control prior to the end of the Performance Periodpursuant to which the Award is effectively assumed or continued by the surviving or acquiring corporation in such Change in Control (asdetermined by the Board or Committee, with appropriate adjustments to the number and kind of shares, in each case, that preserve the valueof the shares subject to the Award and other material terms and conditions of the outstanding Award as in effect immediately prior to theChange in Control) and (i) the Holder remains continuously employed through the end of the Performance Period, (ii) the Companyterminates the Holder’s employment without Cause or the Holder resigns for Good Reason within 24 months following such Change inControl and the Holder executes and does not revoke a waiver and release of claims in the form prescribed by the Company within 60 daysafter the date of such termination or (iii) the Holder’s employment terminates due to death, Disability or Retirement following such Change inControl, in any such case, the Award shall vest based on the performance level determined in accordance with Section 3.3(a ) hereof and shallbe settled within 70 days following the end of the Performance Period or, if earlier, the Holder’s termination of employment. In the case of atermination pursuant to clause (ii) of this Section 3.3(c)2 (termination without Cause or resignation for Good Reason), the Award shall be paid in full, and in the case of a termination pursuant toclause (iii) of this Section 3.3(c) (death, Disability or Retirement), the Award shall be prorated in accordance with, and subject to the terms of,Section 3.2(a) . If, following a Change in Control, the Holder experiences a termination of employment other than as set forth in this Section3.3(c) , the Award shall be immediately forfeited by the Holder and cancelled by the Company.3.4. Definitions .(a) Cause . For purposes of this Award, “ Cause ” shall mean one or more of the following: (A) Holder’s refusal (afterwritten notice and reasonable opportunity to cure) to perform duties properly assigned which are consistent with the scope and nature ofHolder's position; (B) Holder’s commission of an act materially and demonstrably detrimental to the financial condition and/or goodwill ofthe Company or any of its Subsidiaries, which act constitutes gross negligence or willful misconduct in the performance of duties to theCompany or any of its Subsidiaries; (C) Holder’s commission of any theft, fraud, act of dishonesty or breach of trust resulting in or intendedto result in material personal gain or enrichment of Holder at the direct or indirect expense of the Company or any of its Subsidiaries; (D)Holder’s conviction of, or plea of guilty or nolo contendere to, a felony; (E) Holder’s material violation of any Restrictive Covenant; or (F)Holder’s material and willful violation of the Company’s written policies or of Holder’s statutory or common law duty of loyalty to theCompany or its affiliates that in either case is materially injurious to the Company, monetarily or otherwise. No act or failure to act will beconsidered “willful” (x) unless it is done, or omitted to be done, by Holder in bad faith or without reasonable belief that Holder’s action oromission was in the best interests of the Company or (y) if it is done, or omitted to be done, in reliance on the informed advice of theCompany’s outside counsel or independent accountants or at the express direction of the Board.(b) Disability . For purposes of this Award, “ Disability ” shall mean the Holder’s absence from the Holder’s duties withthe Company on a full-time basis for at least 180 consecutive days as a result of the Holder’s incapacity due to physical or mental illness, orunder such other circumstances as the Committee determines, in its sole discretion, constitute a Disability.(c) Good Reason . For purposes of this Award, “ Good Reason ” shall mean that the Holder resigns from employment withthe Company and its Subsidiaries as a result of one or more of the following reasons: (i) the Company reduces the amount of the Holder’sbase salary or cash bonus opportunity (it being understood that the Board shall have discretion to set the Company’s and the Holder’spersonal performance targets to which the cash bonus will be tied), (ii) the Company adversely changes the Holder’s reportingresponsibilities, titles or office as in effect as of the date hereof or reduces his/her position, authority, duties, responsibilities or statusmaterially inconsistent with the positions, authority, duties, responsibilities or status the Holder then holds, (iii) any successor to the Companyin any merger, consolidation or transfer of assets does not expressly assume any material obligation of the Company to the Holder under anyagreement or plan pursuant to which the Holder receives benefits or rights, or (iv) the Company changes the Holder’s place of work to alocation more than fifty (50) miles from the Holder’s present place of work; provided , however , that the occurrence of any such conditionshall not constitute Good Reason unless (A) the Holder provides written notice to the Company of the existence of such condition not laterthan 60 days after the Holder knows or reasonably should know of the existence of such condition, (B) the Company fails to remedy suchcondition within 30 days after receipt of such notice and (C) the Holder resigns due to the existence of such condition within 60 days after theexpiration of the remedial period described in clause (B) hereof.3 (d) Restrictive Covenant . For purposes of this Award, “ Restrictive Covenant ” shall mean any non-competition, non-solicitation, confidentiality or protection of trade secrets (or similar provision regarding intellectual property) covenant by which Holder isbound under any agreement between Holder and the Company and its Subsidiaries.(e) Retirement . For purposes of this Award, “ Retirement ” shall mean Holder’s termination of employment at a timewhen (i) the Holder has attained age 55 and (B) the sum of the Holder’s age and years of employment with or service to the Company or itsSubsidiaries equals or exceeds 65; provided that such termination occurs at least six months after the Grant Date.4. Issuance or Delivery of Shares . Subject to Section 7.12 and except as otherwise provided for herein, within 70 daysafter the vesting of the Award, the Company shall issue or deliver, subject to the conditions of this Agreement, the vested shares of Stock tothe Holder; provided , however , that in the event of vesting of the Award pursuant to Section 3.3(b) , if the Award constitutes nonqualifieddeferred compensation (within the meaning of Section 409A of the Code) and such Change in Control is not a “change in control event”(within the meaning of Section 409A of the Code), such Award shall be paid within 70 days after the earlier to occur of (i) the last day of thePerformance Period and (ii) the Holder’s termination of employment. Such issuance or delivery shall be evidenced by the appropriate entryon the books of the Company or of a duly authorized transfer agent of the Company. The Company shall pay all original issue or transfertaxes and all fees and expenses incident to such issuance or delivery, except as otherwise provided in Section 7 . Prior to the issuance to theHolder of the shares of Stock subject to the Award, the Holder shall have no direct or secured claim in any specific assets of the Company orin such shares of Stock, and will have the status of a general unsecured creditor of the Company.5. Clawback of Proceeds .5.1. Clawback of Proceeds . This award is subject to the clawback provisions in Section 5.15 of the Plan. In addition, if theHolder materially violates any Restrictive Covenant and such violation occurs on or before the third anniversary of the date of the Holder’stermination of employment: (i) the Award shall be forfeited and (ii) any and all Performance Share Proceeds (as hereinafter defined) shall beimmediately due and payable by the Holder to the Company. For purposes of this Section, “ Performance Share Proceeds ” shall mean, withrespect to any portion of the Award which is settled later than 24 months prior to the date of the Holder’s termination of employment orservice with the Company the Fair Market Value of a share of Stock on the date such portion of the Award was settled, multiplied by thenumber of shares of Stock issued to the Holder pursuant to the settlement of such portion of the Award. The remedy provided by this Sectionshall be in addition to and not in lieu of any rights or remedies which the Company may have against the Holder in respect of a breach by theHolder of any duty or obligation to the Company.5.2. Right of Setoff . The Holder agrees that by accepting the Award the Holder authorizes the Company and its affiliatesto deduct any amount or amounts owed by the Holder pursuant to this Section 5 from any amounts payable by or on behalf of the Company orany affiliate to the Holder, including, without limitation, any amount payable to the Holder as salary, wages, vacation pay, bonus or thevesting or settlement of the Award or any stock-based award. This right of setoff shall not be an exclusive remedy and the Company’s or anaffiliate’s election not to exercise this right of setoff with respect to any amount payable to the Holder shall not constitute a waiver of thisright of setoff with respect to any other amount payable to the Holder or any other remedy.4 6. Transfer Restrictions and Investment Representation .6.1. Nontransferability of Award . The Award may not be transferred by the Holder other than by will or the laws ofdescent and distribution. Except to the extent permitted by the foregoing sentence, the Award may not be sold, transferred, assigned, pledged,hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment orsimilar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Awardand all rights hereunder shall immediately become null and void.6.2. Investment Representation . The Holder hereby covenants that (a) any sale of any share of Stock acquired upon thevesting of the Award shall be made either pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act ”), and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and suchstate securities laws and (b) the Holder shall comply with all regulations and requirements of any regulatory authority having control of orsupervision over the issuance of the shares and, in connection therewith, shall execute any documents which the Committee shall in its solediscretion deem necessary or advisable.7. Additional Terms and Conditions of Award .7.1. Withholding Taxes . As a condition precedent to the issuance or delivery of the Stock upon the vesting of the Award,at the Company’s discretion either (i) the Holder shall pay to the Company such amount as the Company (or an affiliate) determines isrequired, under all applicable federal, state, local, foreign or other laws or regulations, to be withheld and paid over as income or otherwithholding taxes (the “ Required Tax Payments ”) with respect to the Award or (ii) the Company or an affiliate may, in its discretion, deductany Required Tax Payments from any amount then or thereafter payable by the Company or an affiliate to the Holder, which may include thewithholding of whole shares of Stock which would otherwise be delivered to the Holder having an aggregate Fair Market Value, determinedas of the date on which such withholding obligation arises, equal to the Required Tax Payments, in either case in accordance with such terms,conditions and procedures that may be prescribed by the Company. Shares of Stock withheld may not have a Fair Market Value in excess ofthe amount determined by applying the maximum individual statutory tax rate in the Holder’s jurisdiction; provided that the Company shallbe permitted to limit the number of shares so withheld to a lesser number if necessary, as determined by the Company, to avoid adverseaccounting consequences or for administrative convenience; provided , however , that if a fraction of a share of Stock would be required tosatisfy the maximum individual statutory rate in the Holder’s jurisdiction, then the number of shares of Stock to be withheld may be roundedup to the next nearest whole share of Stock. No certificate representing a share of Stock shall be delivered until the Required Tax Paymentshave been satisfied in full. Any determination by the Company with respect to the withholding of shares of Stock to satisfy the Required TaxPayments shall be made by the Committee if the Holder is subject to Section 16 of the Exchange Act.7.2. Compliance with Applicable Law . The Award is subject to the condition that if the listing, registration orqualification of the shares of Stock subject to the Award upon any securities exchange or under any law, or the consent or approval of anygovernmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shareshereunder, the shares of Stock subject to the Award shall not be delivered, in whole or in part, unless such listing, registration, qualification,consent, approval or other action shall have been effected or obtained,5 free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing,registration, qualification, consent, approval or other action.7.3. Award Confers No Rights to Continued Employment . In no event shall the granting of the Award or its acceptance bythe Holder, or any provision of the Agreement or the Plan, give or be deemed to give the Holder any right to continued employment by theCompany, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate ofthe Company to terminate the employment of any person at any time.7.4. Decisions of Board or Committee . The Board or the Committee shall have the right to resolve all questions whichmay arise in connection with the Award. Any interpretation, determination or other action made or taken by the Board or the Committeeregarding the Plan or this Agreement shall be final, binding and conclusive.7.5. Successors . This Agreement shall be binding upon and inure to the benefit of any successor or successors of theCompany and any person or persons who shall, upon the death of the Holder, acquire any rights hereunder in accordance with this Agreementor the Plan.7.6. Notices . All notices, requests or other communications provided for in this Agreement shall be made, if to theCompany, to CDW Corporation, Attn: General Counsel, 200 N. Milwaukee Avenue, Vernon Hills, Illinois 60061, and if to the Holder, to thelast known mailing address of the Holder contained in the records of the Company. All notices, requests or other communications providedfor in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt,(c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication shall be deemed to bereceived upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitledthereto if by United States mail or express courier service; provided , however , that if a notice, request or other communication sent to theCompany is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of theCompany.7.7. Governing Law . This Agreement, the Award and all determinations made and actions taken pursuant hereto andthereto, to the extent not governed by the laws of the United States, shall be governed by the laws of the State of Delaware and construed inaccordance therewith without giving effect to principles of conflicts of laws.7.8. Agreement Subject to the Plan . This Agreement is subject to the provisions of the Plan and shall be interpreted inaccordance therewith. In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control. The Holder herebyacknowledges receipt of a copy of the Plan.7.9. Entire Agreement . This Agreement and the Plan constitute the entire agreement of the parties with respect to thesubject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Holder with respect to thesubject matter hereof, and may not be modified adversely to the Holder’s interest except by means of a writing signed by the Company andthe Holder.7.10. Partial Invalidity . The invalidity or unenforceability of any particular provision of this Agreement shall not affect theother provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.6 7.11. Amendment and Waiver . The Company may amend the provisions of this Agreement at any time; provided that anamendment that would adversely affect the Holder’s rights under this Agreement shall be subject to the written consent of the Holder. Nocourse of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability ofthis Agreement.7.12. Compliance With Section 409A of the Code . This Award is intended to be exempt from or comply with Section409A of the Code, and shall be interpreted and construed accordingly. To the extent this Agreement provides for the Award to become vestedand be settled upon the Holder’s termination of employment, the applicable shares of Stock shall be transferred to the Holder or his or herbeneficiary upon the Holder’s “separation from service,” within the meaning of Section 409A of the Code; provided that if the Holder is a“specified employee,” within the meaning of Section 409A of the Code, then to the extent the Award constitutes nonqualified deferredcompensation, within the meaning of Section 409A of the Code, such shares of Stock shall be transferred to the Holder or his or herbeneficiary upon the earlier to occur of (i) the six-month anniversary of such separation from service and (ii) the date of the Holder’s death. 7 Exhibit 10.24CDW CORPORATION2013 LONG-TERM INCENTIVE PLAN PERFORMANCE SHARE AWARD AGREEMENTCDW Corporation, a Delaware corporation (the “ Company ”), hereby grants to the individual (the “ Holder ”) named in theaward notice attached hereto (the “ Award Notice ”) as of the date set forth in the Award Notice (the “ Grant Date ”), pursuant to theprovisions of the CDW Corporation 2013 Long-Term Incentive Plan (the “ Plan ”), a performance share award (the “ Award ”) with respectto the number of shares of the Company’s Common Stock, par value $0.01 per share (“ Stock ”), set forth in the Award Notice, upon andsubject to the restrictions, terms and conditions set forth in the Plan and this agreement (the “ Agreement ”). Capitalized terms not definedherein shall have the meanings specified in the Plan.1. Award Subject to Acceptance of Agreement . The Award shall be null and void unless the Holder (a) accepts thisAgreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to theCompany (or electronically accepting this Agreement within the Holder’s stock plan account with the Company’s stock plan administratoraccording to the procedures then in effect) and (b) if requested by the Company, executes and returns one or more irrevocable stock powers tofacilitate the transfer to the Company (or its assignee or nominee) of all or a portion of the shares subject to the Award, if shares are forfeitedpursuant to Section 3 hereof or if required under applicable laws or regulations. As soon as practicable after the Holder has accepted thisAgreement and executed such stock power or powers and returned the same to the Company, the Company shall cause to be issued in theHolder’s name the maximum number of shares of Stock subject to the Award.2. Rights as a Stockholder . The Holder shall have the right to vote the shares of Stock subject to the Award unless anduntil such shares are forfeited pursuant to Section 3 hereof. As of each date on which the Company pays a cash dividend on the shares ofStock subject to the Award (a “ Dividend Date ”), the dividend shall be used to purchase from the Company a number of shares equal to (i)the product of the total number of shares subject to the Award immediately prior to such Dividend Date multiplied by the dollar amount of thecash dividend paid per share of Stock by the Company on such Dividend Date, divided by (ii) the Fair Market Value of a share of Stock onsuch Dividend Date. Any such additional shares shall be subject to the same vesting conditions and other terms set forth herein as the sharesto which they relate. The shares of Stock subject to the Award may be held by a custodian in book entry form with the restrictions on suchshares duly noted or, alternatively, the Company may hold the certificate or certificates representing such shares, in either case until theAward shall have vested, in whole or in part, pursuant to Section 3 hereof. As soon as practicable after shares of Stock shall have vestedpursuant to Section 3 hereof, subject to Section 4 hereof, the restrictions shall be removed from those of such shares that are held in bookentry form, and the Company shall deliver to the Holder any certificate or certificates representing those of such shares that are held by theCompany and destroy or return to the Holder the stock power or powers relating to such shares. Any shares of Stock that do not becomevested and are forfeited pursuant to Section 3 shall be transferred to the Company (or its assignee or nominee).3. Restriction Period and Vesting .3.1 Performance-Based Vesting Conditions . Subject to the remainder of this Section 3 , the Stock shall vest pursuant to theterms of this Agreement and the Plan based on the achievement of the performance goals set forth in the Award Notice over the performanceperiod set forth in the Award Notice1 (the “ Performance Period ”), provided that that the Holder remains in continuous employment with the Company through the end of thePerformance Period. Attainment of the performance goals shall be determined and certified by the Committee in writing prior to the vestingof the Award. Any shares of Stock subject to the portion of the Award that does not become vested due to the failure of the Company toachieve the performance goals at the maximum levels of performance shall be forfeited and transferred to the Company (or its assignee ornominee).3.2 Termination of Employment .(a) Termination due to Retirement, Death or Disability . If the Holder’s employment with the Company terminates prior tothe end of the Performance Period and prior to a Change in Control by reason of the Holder’s Retirement, death or a termination by theCompany due to Disability, the Performance Period shall continue through the last day thereof and the Holder shall be entitled to a proratedAward, provided that the Holder has continuously complied with the Restrictive Covenants. Such prorated Award shall be equal to thenumber of shares earned at the end of the Performance Period based on the actual performance during the Performance Period multiplied by afraction, the numerator of which shall equal the number of full months in the Performance Period during which the Holder was employed bythe Company and the denominator of which shall equal 36. Attainment of the performance goals shall be determined and certified by theCommittee in writing prior to the vesting of the Award. Any shares of Stock subject to the portion of the Award that does not become vestedshall be forfeited and transferred to the Company (or its assignee or nominee).(b) Termination other than due to Retirement, Death or Disability . If the Holder’s employment with the Companyterminates prior to the end of the Performance Period and prior to a Change in Control by reason of (i) the Company’s termination of theHolder’s employment for any reason other than death or Disability or (ii) the Holder’s resignation for any reason other than Retirement, thenthe Award shall be immediately forfeited by the Holder and cancelled by the Company. The shares of Stock subject to the Award shall beforfeited and transferred to the Company (or its assignee or nominee).3.3 Change in Control .(a) Satisfaction of Performance Goals . If a Change in Control occurs prior to the 24-month anniversary of the first day ofthe Performance Period, the Performance Period shall end as of the date of the Change in Control and the performance goals set forth inSection 3.1 shall be deemed to have been satisfied at the target level. If the Change in Control occurs on or after the 24-month anniversary ofthe first day of the Performance Period, the Performance Period shall end as of the date of the Change in Control, and the number of shares ofStock earned pursuant to Section 3.1 shall be based on the projected level of performance through the end of the Performance Period, asdetermined by the Committee prior to the date of the Change in Control based on performance through the date of such determination. If theChange in Control occurs after the date on which the Participant’s employment is terminated by reason of death, Disability or Retirement,pursuant to Section 3.2(a) , the number of shares earned for purposes of such section shall be determined as of the date of the Change inControl in accordance with this Section 3.3(a) and shall be vested as of the date of such Change in Control. Any shares of Stock subject to theportion of the Award that does not become vested shall be forfeited and transferred to the Company (or its assignee or nominee).(b) Vesting of Award Not Assumed . In the event of a Change in Control prior to the end of the Performance Periodpursuant to which the Award is not effectively assumed or continued by the surviving or acquiring corporation in such Change in Control (asdetermined by the Board or Committee,2 with appropriate adjustments to the number and kind of shares, in each case, that preserve the value of the shares subject to the Award andother material terms and conditions of the outstanding Award as in effect immediately prior to the Change in Control), the Award shall vestas of the date of the Change in Control, based on the performance level determined in accordance with Section 3.3(a) . Any shares of Stocksubject to the portion of the Award that does not become vested shall be forfeited and transferred to the Company (or its assignee ornominee).(c) Vesting of Award Assumed . In the event of a Change in Control prior to the end of the Performance Period pursuant towhich the Award is effectively assumed or continued by the surviving or acquiring corporation in such Change in Control (as determined bythe Board or Committee, with appropriate adjustments to the number and kind of shares, in each case, that preserve the value of the sharessubject to the Award and other material terms and conditions of the outstanding Award as in effect immediately prior to the Change inControl) and (i) the Holder remains continuously employed through the end of the Performance Period, (ii) the Company terminates theHolder’s employment without Cause or the Holder resigns for Good Reason within 24 months following such Change in Control and theHolder executes and does not revoke a waiver and release of claims in the form prescribed by the Company within 60 days after the date ofsuch termination or (iii) the Holder’s employment terminates due to death, Disability or Retirement following such Change in Control, in anysuch case, the Award shall vest based on the performance level determined in accordance with Section 3.3(a ) hereof as of the end of thePerformance Period or, if earlier, the Holder’s termination of employment; provided that to the extent that any Required Tax Payments aredue prior to such vesting date, the Company shall withhold whole shares of Stock from the number of shares subject to the Award having anaggregate Fair Market Value, determined as of the date on which such withholding obligation arises, equal to the Required Tax Payments, inaccordance with Section 6.1 . In the case of a termination pursuant to clause (ii) of this Section 3.3(c) (termination without Cause orresignation for Good Reason), the Award shall vest in full, and in the case of a termination pursuant to clause (iii) of this Section 3.3(c)(death, Disability or Retirement), the Award shall be prorated in accordance with, and subject to the terms of, Section 3.2(a) . If, following aChange in Control, the Holder experiences a termination of employment other than as set forth in this Section 3.3(c) , the Award shall beimmediately forfeited by the Holder and cancelled by the Company. Any shares of Stock subject to the portion of the Award that does notbecome vested shall be forfeited and transferred to the Company (or its assignee or nominee).3.4 Definitions .(a) Cause . For purposes of this Award, “ Cause ” shall mean one or more of the following: (A) Holder’s refusal (afterwritten notice and reasonable opportunity to cure) to perform duties properly assigned which are consistent with the scope and nature ofHolder's position; (B) Holder’s commission of an act materially and demonstrably detrimental to the financial condition and/or goodwill ofthe Company or any of its Subsidiaries, which act constitutes gross negligence or willful misconduct in the performance of duties to theCompany or any of its Subsidiaries; (C) Holder’s commission of any theft, fraud, act of dishonesty or breach of trust resulting in or intendedto result in material personal gain or enrichment of Holder at the direct or indirect expense of the Company or any of its Subsidiaries; (D)Holder’s conviction of, or plea of guilty or nolo contendere to, a felony; (E) Holder’s material violation of any Restrictive Covenant; or (F)Holder’s material and willful violation of the Company’s written policies or of Holder’s statutory or common law duty of loyalty to theCompany or its affiliates that in either case is materially injurious to the Company, monetarily or otherwise. No act or failure to act will beconsidered “willful” (x) unless it is done, or omitted to be done, by Holder in bad faith or without reasonable belief that Holder’s action oromission was in the best interests of the Company or (y) if it is done, or omitted to be done, in reliance on the informed advice of theCompany’s outside counsel or independent accountants or at the express direction of the Board.3 (b) Disability . For purposes of this Award, “ Disability ” shall mean the Holder’s absence from the Holder’s duties withthe Company on a full-time basis for at least 180 consecutive days as a result of the Holder’s incapacity due to physical or mental illness, orunder such other circumstances as the Committee determines, in its sole discretion, constitute a Disability.(c) Good Reason . For purposes of this Award, “ Good Reason ” shall mean that the Holder resigns from employment withthe Company and its Subsidiaries as a result of one or more of the following reasons: (i) the Company reduces the amount of the Holder’sbase salary or cash bonus opportunity (it being understood that the Board shall have discretion to set the Company’s and the Holder’spersonal performance targets to which the cash bonus will be tied), (ii) the Company adversely changes the Holder’s reportingresponsibilities, titles or office as in effect as of the date hereof or reduces his/her position, authority, duties, responsibilities or statusmaterially inconsistent with the positions, authority, duties, responsibilities or status the Holder then holds, (iii) any successor to the Companyin any merger, consolidation or transfer of assets does not expressly assume any material obligation of the Company to the Holder under anyagreement or plan pursuant to which the Holder receives benefits or rights, or (iv) the Company changes the Holder’s place of work to alocation more than fifty (50) miles from the Holder’s present place of work; provided , however , that the occurrence of any such conditionshall not constitute Good Reason unless (A) the Holder provides written notice to the Company of the existence of such condition not laterthan 60 days after the Holder knows or reasonably should know of the existence of such condition, (B) the Company fails to remedy suchcondition within 30 days after receipt of such notice and (C) the Holder resigns due to the existence of such condition within 60 days after theexpiration of the remedial period described in clause (B) hereof.(d) Restrictive Covenant . For purposes of this Award, “ Restrictive Covenant ” shall mean any non-competition, non-solicitation, confidentiality or protection of trade secrets (or similar provision regarding intellectual property) covenant by which Holder isbound under any agreement between Holder and the Company and its Subsidiaries.(e) Retirement . For purposes of this Award, “ Retirement ” shall mean Holder’s termination of employment at a time when(i) the Holder has attained age 55 and (B) the sum of the Holder’s age and years of employment with or service to the Company or itsSubsidiaries equals or exceeds 65; provided that such termination occurs at least six months after the Grant Date.4. Clawback of Proceeds .4.1 Clawback of Proceeds . This award is subject to the clawback provisions in Section 5.15 of the Plan. In addition, if theHolder materially violates any Restrictive Covenant and such violation occurs on or before the third anniversary of the date of the Holder’stermination of employment: (i) the Award shall be forfeited and (ii) any and all Performance Share Proceeds (as hereinafter defined) shall beimmediately due and payable by the Holder to the Company. For purposes of this Section, “ Performance Share Proceeds ” shall mean, withrespect to any portion of the Award which becomes vested later than 24 months prior to the date of the Holder’s termination of employmentor service with the Company, the Fair Market Value of a share of Common Stock on the date such portion of the Award became vested,multiplied by the number of shares of Common Stock that became vested. The remedy provided by this Section shall be in addition to and notin lieu of any rights or remedies which the Company may have against the Holder in respect of a breach by the Holder of any duty orobligation to the Company.4.2 Right of Setoff . The Holder agrees that by accepting the Award the Holder authorizes the Company and its affiliates todeduct any amount or amounts owed by the Holder pursuant to this Section 4 from any amounts payable by or on behalf of the Company orany affiliate to the Holder, including, without4 limitation, any amount payable to the Holder as salary, wages, vacation pay, bonus or the vesting or settlement of the Award or any stock-based award. This right of setoff shall not be an exclusive remedy and the Company’s or an affiliate’s election not to exercise this right ofsetoff with respect to any amount payable to the Holder shall not constitute a waiver of this right of setoff with respect to any other amountpayable to the Holder or any other remedy.5. Transfer Restrictions and Investment Representation .5.1 Nontransferability of Award . The Award may not be transferred by the Holder other than by will or the laws of descentand distribution. Except to the extent permitted by the foregoing sentence, the Award may not be sold, transferred, assigned, pledged,hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment orsimilar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Awardand all rights hereunder shall immediately become null and void.5.2 Investment Representation . The Holder hereby covenants that (a) any sale of any share of Stock acquired upon thevesting of the Award shall be made either pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act ”), and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and suchstate securities laws and (b) the Holder shall comply with all regulations and requirements of any regulatory authority having control of orsupervision over the issuance of the shares and, in connection therewith, shall execute any documents which the Committee shall in its solediscretion deem necessary or advisable.6. Additional Terms and Conditions of Award .6.1 Withholding Taxes . As a condition precedent to the vesting of the Award and the delivery of the Stock hereunder, atthe Company’s discretion either (i) the Holder shall pay to the Company such amount as the Company (or an affiliate) determines is required,under all applicable federal, state, local, foreign or other laws or regulations, to be withheld and paid over as income or other withholdingtaxes (the “ Required Tax Payments ”) with respect to the Award or (ii) the Company or an affiliate may, in its discretion, deduct anyRequired Tax Payments from any amount then or thereafter payable by the Company or an affiliate to the Holder, which may include thewithholding of whole shares of Stock which would otherwise be delivered to the Holder having an aggregate Fair Market Value, determinedas of the date on which such withholding obligation arises, equal to the Required Tax Payments, in either case in accordance with such terms,conditions and procedures that may be prescribed by the Company. Shares of stock withheld may not have a Fair Market Value in excess ofthe amount determined by applying the maximum individual statutory tax rate in the Holder’s jurisdiction; provided that the Company shallbe permitted to limit the number of shares so withheld to a lesser number if necessary, as determined by the Company, to avoid adverseaccounting consequences or for administrative convenience; provided, however, that if a fraction of a share of Stock would be required tosatisfy the maximum individual statutory rate in the Holder’s jurisdiction, then the number of shares of Stock to be withheld may be roundedup to the next nearest whole share of Stock. Notwithstanding the foregoing, if the Required Tax Payments are due prior to the date theCompany determines the number of shares of Stock that have become vested, the amount of the Required Tax Payments, including thenumber of shares withheld to pay such Required Tax Payments, may be based on a reasonable estimate of the number of shares that areexpected to become vested. No certificate representing a share of Stock shall be delivered until the Required Tax Payments have beensatisfied in full. Any determination by the Company with respect to the withholding of shares of Stock to satisfy the Required Tax Paymentsshall be made by the Committee if the Holder is subject to Section 16 of the Exchange Act.5 6.2 Compliance with Applicable Law . The Award is subject to the condition that if the listing, registration or qualificationof the shares of Stock subject to the Award upon any securities exchange or under any law, or the consent or approval of any governmentalbody, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares hereunder, theshares of Stock subject to the Award shall not be delivered, in whole or in part, unless such listing, registration, qualification, consent,approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees touse reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action.6.3 Award Confers No Rights to Continued Employment . In no event shall the granting of the Award or its acceptance bythe Holder, or any provision of the Agreement or the Plan, give or be deemed to give the Holder any right to continued employment by theCompany, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate ofthe Company to terminate the employment of any person at any time.6.4 Decisions of Board or Committee . The Board or the Committee shall have the right to resolve all questions which mayarise in connection with the Award. Any interpretation, determination or other action made or taken by the Board or the Committee regardingthe Plan or this Agreement shall be final, binding and conclusive.6.5 Successors . This Agreement shall be binding upon and inure to the benefit of any successor or successors of theCompany and any person or persons who shall, upon the death of the Holder, acquire any rights hereunder in accordance with this Agreementor the Plan.6.6 Notices . All notices, requests or other communications provided for in this Agreement shall be made, if to theCompany, to CDW Corporation, Attn: General Counsel, 200 N. Milwaukee Avenue, Vernon Hills, Illinois 60061, and if to the Holder, to thelast known mailing address of the Holder contained in the records of the Company. All notices, requests or other communications providedfor in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt,(c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication shall be deemed to bereceived upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitledthereto if by United States mail or express courier service; provided , however , that if a notice, request or other communication sent to theCompany is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of theCompany.6.7 Governing Law . This Agreement, the Award and all determinations made and actions taken pursuant hereto andthereto, to the extent not governed by the laws of the United States, shall be governed by the laws of the State of Delaware and construed inaccordance therewith without giving effect to principles of conflicts of laws.6.8 Agreement Subject to the Plan . This Agreement is subject to the provisions of the Plan and shall be interpreted inaccordance therewith. In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control. The Holder herebyacknowledges receipt of a copy of the Plan.6.9 Entire Agreement . This Agreement and the Plan constitute the entire agreement of the parties with respect to thesubject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Holder with respect to thesubject matter hereof, and may not be modified adversely to the Holder’s interest except by means of a writing signed by the Company andthe Holder.6 6.10. Partial Invalidity . The invalidity or unenforceability of any particular provision of this Agreement shall not affect theother provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.6.11. Amendment and Waiver . The Company may amend the provisions of this Agreement at any time; provided that anamendment that would adversely affect the Holder’s rights under this Agreement shall be subject to the written consent of the Holder. Nocourse of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability ofthis Agreement.6.12. Compliance With Section 409A of the Code . This Award is intended to be exempt from Section 409A of the Code,and shall be interpreted and construed accordingly.7 EXHIBIT 12.1CDW CORPORATIONCOMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (unaudited) Years ended December 31,(dollars in millions) 2012 2013 2014 2015 2016Computation of earnings: Income (loss) before income taxes and adjustment for(income) loss from equity investees $185.8 $194.9 $385.5 $657.2 $671.2Distributed income from equity investees 1.2 1.0 1.1 1.0 1.1Fixed charges 312.4 254.3 202.8 164.5 153.9Total earnings $499.4 $450.2 $589.4 $822.7 $826.2 Computation of fixed charges: Interest expense $294.4 $241.8 $191.3 $153.5 $141.8Amortization of deferred financing costs and debtpremium 13.6 8.8 6.4 6.4 6.5Portion of rent expense representative of interest (1) 4.4 3.7 5.1 4.6 5.6Total fixed charges $312.4 $254.3 $202.8 $164.5 $153.9 Ratio of earnings to fixed charges 1.6 1.8 2.9 5.0 5.4(1) Fixed charges include a reasonable estimation of the interest factor included in rental expense. Exhibit 21.1LIST OF SUBSIDIARIES Subsidiary Jurisdiction of OrganizationCDW LLC IllinoisCDW Finance Corporation DelawareCDW Technologies LLC WisconsinCDW Direct, LLC IllinoisCDW Government LLC IllinoisCDW Logistics, Inc. IllinoisCDW Canada Corp. Novia ScotiaCDW NA Limited United KingdomCDW International Holdings Limited United KingdomCDW Finance Bidco Limited United KingdomCDW Finance Holdings Limited United KingdomCDW Limited United KingdomCDW Finance Topco Limited Jersey Exhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statements:(1) Registration Statement (Form S-8 No. 333-212912) pertaining to the Amended and Restated 2013 Long-Term Incentive Plan ofCDW Corporation,(2) Registration Statement (Form S-3 ASR No. 333-199425) of CDW Corporation, and(3) Registration Statement (Form S-8 No. 333-189622) pertaining to the 2013 Long-Term Incentive Plan and Coworker StockPurchase Plan of CDW Corporation;of our reports dated February 28, 2017, with respect to the consolidated financial statements and schedule of CDW Corporation andsubsidiaries and the effectiveness of internal control over financial reporting of CDW Corporation and subsidiaries included in thisAnnual Report (Form 10-K) of CDW Corporation for the year ended December 31, 2016./s/ Ernst & Young LLPChicago, IllinoisFebruary 28, 2017 Exhibit 31.1CERTIFICATION PURSUANT TO RULE 13a-14(a) or 15d-14(a) UNDERTHE SECURITIES EXCHANGE ACT OF 1934I, Thomas E. Richards, certify that:1.I have reviewed this annual report on Form 10-K of the registrant;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting. /s/ Thomas E. RichardsThomas E. RichardsChairman, President and Chief Executive OfficerCDW CorporationFebruary 28, 2017 Exhibit 31.2CERTIFICATION PURSUANT TO RULE 13a-14(a) or 15d-14(a) UNDERTHE SECURITIES EXCHANGE ACT OF 1934I, Ann E. Ziegler, certify that:1.I have reviewed this annual report on Form 10-K of the registrant;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting. /s/ Ann E. ZieglerAnn E. ZieglerSenior Vice President and Chief Financial OfficerCDW CorporationFebruary 28, 2017 Exhibit 32.1CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63OF TITLE 18 OF THE UNITED STATES CODEI, Thomas E. Richards, the chief executive officer of CDW Corporation (“CDW”), certify that (i) the Annual Report on Form 10-K for the year endedDecember 31, 2016 (the “10-K”) of CDW fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) theinformation contained in the 10-K fairly presents, in all material respects, the financial condition and results of operations of CDW. /s/ Thomas E. RichardsThomas E. RichardsChairman, President and Chief Executive OfficerCDW CorporationFebruary 28, 2017 Exhibit 32.2CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63OF TITLE 18 OF THE UNITED STATES CODEI, Ann E. Ziegler, the chief financial officer of CDW Corporation (“CDW”), certify that (i) the Annual Report on Form 10-K for the year ended December31, 2016 (the “10-K”) of CDW fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the informationcontained in the 10-K fairly presents, in all material respects, the financial condition and results of operations of CDW. /s/ Ann E. ZieglerAnn E. ZieglerSenior Vice President and Chief Financial OfficerCDW CorporationFebruary 28, 2017
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