CDW-2013.3.31 10-Q
Table of Contents

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-Q
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2013
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                    

Commission File Number 333-169258
CDW CORPORATION
(Exact name of registrant as specified in its charter) 
Delaware
 
26-0273989
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
200 N. Milwaukee Avenue
Vernon Hills, Illinois
 
60061
(Address of principal executive offices)
 
(Zip Code)
(847) 465-6000
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ¨  Yes    ý  No The registrant is a voluntary filer of reports required of companies with public securities under Section 13 or 15(d) of the Securities Exchange Act of 1934 and has filed all reports which would have been required of the registrant during the preceding 12 months had it been subject to such provisions.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):
 
Large accelerated filer
 
¨
  
Accelerated filer
 
¨
 
 
 
 
 
 
 
Non-accelerated filer
 
x  (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  No
As of May 7, 2013, there were 100,000 Class A common shares, $0.01 par value, outstanding, and 915,309 Class B common shares, $0.01 par value, outstanding, all of which were owned by CDW Holdings LLC.
 


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Table of Contents

CDW CORPORATION AND SUBSIDIARIES
FORM 10-Q

TABLE OF CONTENTS
 
 
 
Page
PART I
FINANCIAL INFORMATION
 
Item 1.
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II
OTHER INFORMATION
 
Item 1.
Item 1A.  
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
SIGNATURES


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Table of Contents

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share-related amounts)
 
March 31,
2013
 
December 31, 2012
Assets
(unaudited)
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
147.1

 
$
37.9

Accounts receivable, net of allowance for doubtful accounts of $5.4 and $5.4, respectively
1,264.5

 
1,285.0

Merchandise inventory
358.4

 
314.6

Miscellaneous receivables
151.5

 
148.5

Deferred income taxes
13.1

 
14.1

Prepaid expenses and other
51.5

 
34.6

Total current assets
1,986.1

 
1,834.7

Property and equipment, net
134.0

 
142.7

Goodwill
2,208.5

 
2,209.3

Other intangible assets, net
1,443.6

 
1,478.5

Deferred financing costs, net
49.3

 
53.2

Other assets
1.2

 
1.6

Total assets
$
5,822.7

 
$
5,720.0

Liabilities and Shareholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable—trade
$
642.1

 
$
518.6

Accounts payable—inventory financing
252.9

 
249.2

Current maturities of long-term debt

 
40.0

Deferred revenue
66.0

 
57.8

Accrued expenses:

 

Compensation
86.6

 
99.4

Interest
104.8

 
50.7

Sales taxes
22.6

 
22.6

Advertising
27.1

 
33.9

Income taxes
17.5

 
0.2

Other
93.3

 
95.8

Total current liabilities
1,312.9

 
1,168.2

Long-term liabilities:
 
 
 
Debt
3,680.8

 
3,731.0

Deferred income taxes
609.0

 
624.3

Accrued interest
6.9

 
8.0

Other liabilities
49.3

 
52.0

Total long-term liabilities
4,346.0

 
4,415.3

Commitments and contingencies


 


Shareholders’ equity:
 
 
 
Class A common shares, $0.01 par value, 100,000 shares authorized, issued, and outstanding

 

Class B common shares, $0.01 par value, 1,900,000 shares authorized; 915,391 and 914,935 shares issued, respectively; 914,669 and 914,259 shares outstanding, respectively

 

Paid-in capital
2,210.6

 
2,209.1

Accumulated deficit
(2,044.8
)
 
(2,073.0
)
Accumulated other comprehensive (loss) income
(2.0
)
 
0.4

Total shareholders’ equity
163.8

 
136.5

Total liabilities and shareholders’ equity
$
5,822.7

 
$
5,720.0

The accompanying notes are an integral part of the consolidated financial statements.

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Table of Contents

CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions)
(unaudited)
 
 
Three Months Ended March 31,
 
 
2013
 
2012
Net sales
 
$
2,411.7

 
$
2,319.2

Cost of sales
 
2,009.7

 
1,934.6

Gross profit
 
402.0

 
384.6

Selling and administrative expenses
 
251.5

 
251.6

Advertising expense
 
30.4

 
29.4

Income from operations
 
120.1

 
103.6

Interest expense, net
 
(72.1
)
 
(78.9
)
Net loss on extinguishments of long-term debt
 
(3.9
)
 
(9.4
)
Other income (expense), net
 
0.4

 
(0.2
)
Income before income taxes
 
44.5

 
15.1

Income tax expense
 
(16.2
)
 
(4.2
)
Net income
 
$
28.3

 
$
10.9

The accompanying notes are an integral part of the consolidated financial statements.


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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
 
 
Three Months Ended March 31,
 
 
2013
 
2012
Net income
 
$
28.3

 
$
10.9

Foreign currency translation adjustment
 
(2.4
)
 
1.9

Other comprehensive (loss) income
 
$
(2.4
)
 
$
1.9

Comprehensive income
 
$
25.9

 
$
12.8

The accompanying notes are an integral part of the consolidated financial statements.



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Table of Contents

CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(in millions)
(unaudited)
 
 
Total
Shareholders’
Equity
 
Class A
Common
Shares
 
Class B
Common
Shares
 
Paid-in
Capital
 
Accumulated
Deficit
 
Accumulated
Other
Comprehensive (Loss) Income
Balance at December 31, 2012
 
$
136.5

 
$

 
$

 
$
2,209.1

 
$
(2,073.0
)
 
$
0.4

Equity-based compensation expense
 
1.9

 

 

 
1.9

 

 

Repurchase of Class B common shares
 
(0.1
)
 

 

 

 
(0.1
)
 

Accrued charitable contribution related to the MPK Coworker Incentive Plan II, net of tax
 
(0.3
)
 

 

 
(0.3
)
 

 

Incentive compensation plan units withheld for taxes
 
(0.1
)
 

 

 
(0.1
)
 

 

Net income
 
28.3

 

 

 

 
28.3

 

Foreign currency translation adjustment
 
(2.4
)
 

 

 

 

 
(2.4
)
Balance at March 31, 2013
 
$
163.8

 
$

 
$

 
$
2,210.6

 
$
(2,044.8
)
 
$
(2.0
)
The accompanying notes are an integral part of the consolidated financial statements.


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Table of Contents

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

 
 
Three Months Ended March 31,
 
 
2013
 
2012
Cash flows from operating activities:
 
 
 
 
Net income
 
$
28.3

 
$
10.9

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
52.0

 
52.5

Equity-based compensation expense
 
1.9

 
5.7

Deferred income taxes
 
(14.1
)
 
(16.6
)
Allowance for doubtful accounts
 

 
0.4

Amortization of deferred financing costs and debt premium
 
3.0

 
5.2

Net loss on extinguishments of long-term debt
 
3.9

 
9.4

Other
 

 
0.7

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
18.8

 
160.9

Merchandise inventory
 
(43.9
)
 
(25.0
)
Other assets
 
(19.6
)
 
(22.3
)
Accounts payable-trade
 
124.2

 
3.0

Other current liabilities
 
57.6

 
39.7

Long-term liabilities
 
(4.1
)
 
(1.5
)
Net cash provided by operating activities
 
208.0

 
223.0

Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(8.8
)
 
(8.3
)
Net cash used in investing activities
 
(8.8
)
 
(8.3
)
Cash flows from financing activities:
 
 
 
 
Proceeds from borrowings under revolving credit facility
 

 
148.0

Repayments of borrowings under revolving credit facility
 

 
(148.0
)
Repayments of long-term debt
 
(40.0
)
 
(201.0
)
Proceeds from issuance of long-term debt
 

 
135.7

Payments to extinguish long-term debt
 
(53.1
)
 
(136.9
)
Payments of debt financing costs
 

 
(1.9
)
Net change in accounts payable-inventory financing
 
3.7

 
(74.0
)
Repurchase of Class B common shares
 
(0.1
)
 
(0.3
)
Net cash used in financing activities
 
(89.5
)
 
(278.4
)
Effect of exchange rate changes on cash and cash equivalents
 
(0.5
)
 
0.3

Net increase (decrease) in cash and cash equivalents
 
109.2

 
(63.4
)
Cash and cash equivalents—beginning of period
 
37.9

 
99.9

Cash and cash equivalents—end of period
 
$
147.1

 
$
36.5

Supplementary disclosure of cash flow information:
 
 
 
 
Interest paid
 
$
(16.2
)
 
$
(16.3
)
Taxes paid, net
 
$
(1.7
)
 
$
(0.3
)
The accompanying notes are an integral part of the consolidated financial statements.

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Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



1.
Description of Business and Summary of Significant Accounting Policies
Description of Business
CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions to small, medium and large business, government, education and healthcare customers in the U.S. and Canada. The Company's offerings range from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.
Basis of Presentation
The accompanying unaudited interim consolidated financial statements as of March 31, 2013 and for the three months ended March 31, 2013 and 2012 ("consolidated financial statements") have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 ("December 31, 2012 financial statements"). The significant accounting policies used in preparing these consolidated financial statements were applied on a basis consistent with those reflected in the December 31, 2012 financial statements, except as disclosed in Note 2. In the opinion of management, the consolidated financial statements contain all adjustments (consisting of a normal, recurring nature) necessary to present fairly the Company's financial position, results of operations, comprehensive income, cash flows and changes in shareholders' equity as of the dates and for the periods indicated. The unaudited consolidated statements of operations for such interim periods reported are not necessarily indicative of results for the full year.
CDW Corporation ("Parent") is owned directly by CDW Holdings LLC, a company controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners, L.L.C., certain other co-investors and certain members of CDW management.
Parent has two 100% owned subsidiaries, CDW LLC and CDW Finance Corporation. CDW LLC is an Illinois limited liability company that, together with its 100% owned subsidiaries, holds all material assets and conducts all business activities and operations. CDW Finance Corporation is a Delaware corporation formed for the sole purpose of acting as co-issuer of certain debt obligations as described in Note 10 and does not hold any material assets or engage in any business activities or operations.
Throughout this report, the terms “the Company” and “CDW” refer to Parent and its 100% owned subsidiaries.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Parent and its 100% owned subsidiaries. All intercompany transactions and accounts are eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in accordance with GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
The notes to the consolidated financial statements contained in the December 31, 2012 financial statements include an additional discussion of the significant accounting policies and estimates used in the preparation of the Company's consolidated financial statements. There have been no material changes to the Company's significant accounting policies and estimates during the three months ended March 31, 2013.

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Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Reclassifications
Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation.
Registration Statement on Form S-1
On March 22, 2013, the Company filed a Registration Statement on Form S-1 with the SEC relating to the proposed initial public offering of its common shares. The number of shares to be offered and the price range for the offering have not yet been determined. The Company makes no assurances that the Registration Statement on Form S-1 will be declared effective or that the proposed transaction will be consummated.
2.
Recent Accounting Pronouncements
Disclosure of the Effects of Reclassifications from Accumulated Other Comprehensive Income
In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02, which required that the effects of significant reclassifications from accumulated other comprehensive income to net income be shown parenthetically on the face of the consolidated financial statements or disclosed in a note. The adoption of this new guidance on January 1, 2013 did not have an impact on the Company's consolidated financial position, results of operations or cash flows.
3.
Inventory Financing Agreements
The Company has entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and conditions, as described below. These amounts are classified separately as accounts payable-inventory financing on the accompanying consolidated balance sheets. The Company does not incur any interest expense associated with these agreements as balances are paid when they are due.
The following table presents the amounts included in accounts payable-inventory financing:
(in millions)
 
March 31, 2013
 
December 31, 2012
Revolving Loan inventory financing agreement
 
$
252.8

 
$
248.3

Other inventory financing agreements
 
0.1

 
0.9

Accounts payable-inventory financing
 
$
252.9

 
$
249.2

The Company maintains a senior secured asset-based revolving credit facility as described in Note 4, which incorporates a $400.0 million floorplan sub-facility to facilitate the purchase of inventory from a certain vendor. In connection with the floorplan sub-facility, the Company maintains an inventory financing agreement on an unsecured basis with a financial intermediary to facilitate the purchase of inventory from this vendor (the “Revolving Loan inventory financing agreement”). Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and non-interest bearing.
The Company also maintains other inventory financing agreements with financial intermediaries to facilitate the purchase of inventory from certain vendors. At March 31, 2013 and December 31, 2012, amounts owed under other inventory financing agreements of $0.1 million and $0.9 million, respectively, were collateralized by the inventory purchased under these financing agreements and a second lien on the related accounts receivable.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


4.
Long-Term Debt
Long-term debt was as follows:
(dollars in millions)
 
Interest
Rate (1)
 
March 31,
2013
 
December 31,
2012
Senior secured asset-based revolving credit facility
 
%
 
$

 
$

Senior secured term loan facility
 
3.9
%
 
1,299.5

 
1,339.5

Senior secured notes due 2018
 
8.0
%
 
500.0

 
500.0

Senior notes due 2019
 
8.5
%
 
1,305.0

 
1,305.0

Unamortized premium on senior notes due 2019
 
 
 
4.8

 
5.0

Senior subordinated notes due 2017
 
12.535
%
 
571.5

 
621.5

Senior notes due 2015
 
%
 

 

Total long-term debt
 
 
 
3,680.8

 
3,771.0

Less current maturities of long-term debt
 
 
 

 
(40.0
)
Long-term debt, excluding current maturities
 
 
 
$
3,680.8

 
$
3,731.0

(1)Weighted-average interest rate at March 31, 2013.
At March 31, 2013, the Company was in compliance with the covenants under its various credit agreements as described below.
Senior Secured Asset-Based Revolving Credit Facility (“Revolving Loan”)
At March 31, 2013, the Company had no outstanding borrowings under the Revolving Loan, $1.7 million of undrawn letters of credit and $248.9 million reserved related to the floorplan sub-facility. The Revolving Loan matures on June 24, 2016.
In connection with the floorplan sub-facility, the Company maintains a Revolving Loan inventory financing agreement. Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and noninterest bearing. The Company will either pay the outstanding Revolving Loan inventory financing agreement amounts when they become due, or the Revolving Loan's administrative agent will automatically initiate an advance on the Revolving Loan and use the proceeds to pay the balance on the due date. At March 31, 2013, the financial intermediary reported an outstanding balance of $236.7 million under the Revolving Loan inventory financing agreement. The total amount reported on the Company's consolidated balance sheet as accounts payable-inventory financing related to the Revolving Loan inventory financing agreement is $16.1 million more than the $236.7 million owed to the financial intermediary due to differences in the timing of reporting activity under the Revolving Loan inventory financing agreement. The outstanding balance reported by the financial intermediary excludes $12.2 million in reserves for open orders that reduce the availability under the Revolving Loan.
Availability under the Revolving Loan is limited to (a) the lesser of the revolving commitment of $900.0 million and the amount of the borrowing base less (b) outstanding borrowings, letters of credit, and amounts outstanding under the Revolving Loan inventory financing agreement plus a reserve of 15% of open orders. At March 31, 2013, the borrowing base was $1,009.7 million based on the amount of eligible inventory and accounts receivable balances as of February 28, 2013. The Company could have borrowed up to an additional $649.4 million under the Revolving Loan at March 31, 2013.
Senior Secured Term Loan Facility (“Term Loan”)
At March 31, 2013, the outstanding principal amount of the Term Loan was $1,299.5 million, with $408.7 million of non-extended loans due October 10, 2014 and $890.8 million of extended loans due July 15, 2017.
The Term Loan requires the Company to make certain mandatory prepayments of principal amounts under certain circumstances, including (i) a prepayment in an amount equal to 50% of the Company's excess cash flow for a fiscal year (the percentage rate of which decreases to 25% when the total net leverage ratio, as defined in the governing agreement, is less than or equal to 5.5 but greater than 4.5; and decreases to 0% when the total net leverage ratio is less than or equal to 4.5), and (ii) the net cash proceeds from the incurrence of certain additional indebtedness by the

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Company or its subsidiaries. The total net leverage ratio was 4.9 and 5.2 at March 31, 2013 and December 31, 2012, respectively. On January 30, 2013, the Company made an optional prepayment of $40.0 million aggregate principal amount. The optional prepayment satisfied the excess cash flow payment provision of the Term Loan with respect to the year ended December 31, 2012. The prepayment was allocated on a pro rata basis between the extended and non-extended loans.
The Term Loan includes a senior secured leverage ratio requirement to be maintained on a quarterly basis. The senior secured leverage ratio for the four quarters ended March 31, 2013 was required to be at or below 6.5. For the four quarters ended March 31, 2013, the senior secured leverage ratio was 2.1.
The Company is required to maintain interest rate derivative arrangements to fix or cap the interest rate on at least 50% of the outstanding principal amount of the Term Loan through maturity, subject to certain limitations currently in effect. The Company utilizes interest rate cap agreements to maintain compliance with this requirement. The Company has ten interest rate cap agreements in effect through January 14, 2015 with a combined notional amount of $1,150.0 million. Of the ten cap agreements, four entitle the Company to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds 3.5% during the agreement period. The other six cap agreements entitle the Company to payments from the counterparty of the amount, if any, by which the three-month LIBOR exceeds 1.5% during the agreement period. The fair value of the Company's interest rate cap agreements was $0.1 million at both March 31, 2013 and December 31, 2012.
See Note 11 for a description of the Term Loan refinancing transaction completed during the second quarter of 2013.
8.0% Senior Secured Notes due 2018 (“Senior Secured Notes”)
The Senior Secured Notes were issued on December 17, 2010 and mature on December 15, 2018. At March 31, 2013, the outstanding principal amount of the Senior Secured Notes was $500.0 million.
11.0% Senior Exchange Notes due 2015 (“Senior Exchange Notes”); 11.5% / 12.25% Senior PIK Election Exchange Notes due 2015 (“PIK Election Notes” together with the Senior Exchange Notes, the “Senior Notes due 2015”)
At March 31, 2013 and December 31, 2012, there were no outstanding Senior Notes due 2015.
In February and March 2012, the Company purchased or redeemed the remaining $129.0 million aggregate principal amount of Senior Notes due 2015, funded with the issuance of $130.0 million aggregate principal amount of additional Senior Notes (as defined below). In connection with these transactions, the Company recorded a loss on extinguishment of long-term debt of $9.4 million in the Company's consolidated statement of operations for the three months ended March 31, 2012. This loss represented $7.9 million in tender and redemption premiums and $1.5 million for the write-off of the remaining unamortized deferred financing costs related to the Senior Notes due 2015.
8.5% Senior Notes due 2019 (“Senior Notes”)
On February 17, 2012, the Company issued $130.0 million aggregate principal amount of additional Senior Notes at an issue price of 104.375% of par. The $5.7 million premium received is reported on the consolidated balance sheets as an addition to the face amount of the Senior Notes and is being amortized as a reduction to interest expense over the term of the related debt. At March 31, 2013, the outstanding principal amount of Senior Notes was $1,305.0 million, excluding $4.8 million in unamortized premium. The Senior Notes mature on April 1, 2019.
12.535% Senior Subordinated Exchange Notes due 2017 (“Senior Subordinated Notes”)
At March 31, 2013, the outstanding principal amount of the Company's Senior Subordinated Notes was $571.5 million. The Senior Subordinated Notes mature on October 12, 2017.
On March 8, 2013, the Company redeemed $50.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $50.0 million aggregate principal amount, $3.1 million of redemption premium and $2.5 million in accrued and unpaid interest. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $3.9 million in the Company's consolidated statement of operations for three months ended March 31, 2013. This loss represented $3.1 million in redemption premium and $0.8 million for the write-off of a portion of the unamortized deferred financing costs related to the Senior Subordinated Notes.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


On December 21, 2012, the Company redeemed $100.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $100.0 million aggregate principal amount, $6.3 million of redemption premium and $2.3 million in accrued and unpaid interest. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $7.8 million in the Company's consolidated statement of operations for the year ended December 31, 2012. This loss represented $6.3 million in redemption premium and $1.5 million for the write-off of a portion of the unamortized deferred financing costs related to the Senior Subordinated Notes.
Fair Value
The fair value of the Company's long-term debt instruments at March 31, 2013 was $3,938.1 million. The fair value of the Senior Secured Notes, Senior Notes and Senior Subordinated Notes is estimated using quoted market prices for identical assets or liabilities that are traded in over-the-counter secondary markets that are not considered active. The fair value of the Term Loan is estimated using dealer quotes for identical assets or liabilities in markets that are not considered active. Consequently, the Company's long-term debt is classified as Level 2 within the fair value hierarchy.
At March 31, 2013, the carrying value of the Company's long-term debt was $3,676.0 million, excluding $4.8 million in unamortized premium.
5.
Income Taxes
The Company's effective income tax rate was 36.4% for the three months ended March 31, 2013 and differed from the U.S. federal statutory rate primarily due to state income taxes. For the three months ended March 31, 2012, the effective income tax rate was 27.9% and differed from the U.S. federal statutory rate primarily due to favorable adjustments to state tax credits that were recorded in the first quarter of 2012.
In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities, including the Internal Revenue Service (“IRS”). The Company was previously under audit by the IRS for the years 2008 through 2010. The Company has been notified that the audit was completed and approved. In general, the Company is no longer subject to audit by the IRS, state and local or foreign taxing authorities for tax years prior to 2008. Various other taxing authorities are in the process of auditing income tax returns of the Company and its subsidiaries. The Company does not anticipate that any adjustments from the audits would have a material impact on its consolidated financial position, results of operations or cash flows.
6.
Equity-Based Compensation
The Company recognized $1.9 million and $5.7 million in equity-based compensation expense for the three months ended March 31, 2013 and 2012, respectively. Equity-based compensation expense for the three months ended March 31, 2012 included incremental expense of $1.6 million related to a modified Class B Common Unit grant agreement with the Company's former chief executive officer, which was entered into in June 2011.
The following table sets forth the summary of equity plan activity for the three months ended March 31, 2013:
Equity Awards
Class B
Common Units (1)
 
 
MPK Plan
Units (1) (2)
 
Outstanding at January 1, 2013
216,483

 
 
66,137

  
Granted
400

 
 

  
Forfeited
(665
)
 
 
(1,534
)
(3)  
Repurchased/Settled
(126
)
(4 
) 
 
(482
)
(4)  
Outstanding at March 31, 2013
216,092

 
 
64,121

  
Vested at March 31, 2013
125,903

 
 
112

(5)  
(1)
The weighted-average grant date fair market value for Class B Common Units granted during the period ended March 31, 2013 is $119.00. The weighted-average grant date fair market value for outstanding Class B Common Units inclusive of the $60.00 per unit impact of the March 2010 modification and the impact of the June 2011 modification for the Company's former chief executive officer is $279.58. The weighted-average grant date fair market value for outstanding MPK Plan Units is $1,000.
(2)
Represents units notionally credited to participants' accounts.

12

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


(3)
The Company contributes the fair market value of awards forfeited under the plan to a charitable foundation. The contribution is generally made in the quarter following that in which the units are forfeited. As of March 31, 2013, the Company owed a contribution of 1,534 units.
(4)
Represents Class B Common Units that were repurchased by the Company from former participants and the settlement of vested MPK Plan Units through the issuance of Class A Common Units in exchange for the vested MPK Plan Units.
(5)
Represents MPK Plan Units that have vested but not yet converted to Class A Common Units.
As of March 31, 2013, the total unrecognized compensation cost of $28.5 million related to nonvested equity-based compensation awards granted under the equity plans is expected to be recognized over the weighted-average period of 4.3 years. As discussed in Note 1, on March 22, 2013, the Company filed a Registration Statement on Form S-1 with the SEC relating to the proposed initial public offering of its common shares. In the event of an initial public offering of the Company's shares, the vesting of certain equity awards will accelerate, resulting in the acceleration of the related compensation expense during the period such event occurs.
7.
Deferred Compensation Plan
On March 10, 2010, the Company established the Restricted Debt Unit Plan (the “RDU Plan”), an unfunded nonqualified deferred compensation plan. The total number of RDUs that can be granted under the RDU Plan is 28,500. As of March 31, 2013, 26,499 RDUs were outstanding.
Compensation expense of $2.1 million related to the RDU Plan was recognized in both the three months ended March 31, 2013 and 2012. As of March 31, 2013, total unrecognized compensation expense of $15.6 million related to the RDU Plan is expected to be recognized over the next 1.8 years. 
At March 31, 2013 and December 31, 2012, the Company had $17.6 million and $15.5 million of liabilities related to the RDU Plan recorded on the consolidated balance sheets, respectively.
8.
Commitments and Contingencies
The Company is party to various legal proceedings that arise in the ordinary course of its business, which include commercial, intellectual property, employment, tort and other litigation matters. The Company is also subject to audit by federal, state and local authorities, by various partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, the Company is subject to indemnification claims under various contracts. From time to time, certain customers of the Company file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws. In such cases, certain pre-petition payments received by the Company could be considered preference items and subject to return to the bankruptcy administrator.
As of March 31, 2013, the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company's financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.
9.
Segment Information
Segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the chief operating decision-maker for making decisions and assessing performance as the source of the Company's reportable segments. The Company's segments are organized in a manner consistent with which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance.
The Company has two reportable segments: Corporate, which is comprised primarily of private sector business customers, and Public, which is comprised of government agencies and education and healthcare institutions. The Company also has two other operating segments, CDW Advanced Services and Canada, which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other.”

13

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


The Company has centralized logistics and headquarters functions that provide services to the segments. The logistics function includes purchasing, distribution and fulfillment services to support both the Corporate and Public segments. As a result, costs and intercompany charges associated with the logistics function are fully allocated to both of these segments based on a percent of sales. The centralized headquarters function provides services in areas such as accounting, information technology, marketing, legal and coworker services. Headquarters' function costs that are not allocated to the segments are included under the heading of “Headquarters” in the tables below. Depreciation expense is included in Headquarters as it is not allocated among segments or used in measuring segment performance.
The Company allocates resources to and evaluates performance of its segments based on net sales, income (loss) from operations and Adjusted EBITDA, a non-GAAP measure as defined in the Company's credit agreements. However, the Company has concluded that income (loss) from operations is the more useful measure in terms of discussion of operating results, as it is a GAAP measure.
Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources between segments. 
Selected Segment Financial Information
The following table presents information about the Company’s segments for the three months ended March 31, 2013 and 2012:
(in millions)
 
Corporate
 
Public
 
Other
 
Headquarters
 
Total
Three Months Ended March 31, 2013:
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
1,403.9

 
$
846.8

 
$
161.0

 
$

 
$
2,411.7

Income (loss) from operations
 
94.1

 
45.6

 
6.1

 
(25.7
)
 
120.1

Depreciation and amortization expense
 
(24.4
)
 
(11.0
)
 
(2.3
)
 
(14.3
)
 
(52.0
)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2012:
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
1,362.8

 
$
817.6

 
$
138.8

 
$

 
$
2,319.2

Income (loss) from operations
 
84.8

 
42.1

 
2.5

 
(25.8
)
 
103.6

Depreciation and amortization expense
 
(24.3
)
 
(11.0
)
 
(2.3
)
 
(14.9
)
 
(52.5
)

14

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


10.
Supplemental Guarantor Information
The Senior Secured Notes, Senior Notes and Senior Subordinated Notes are guaranteed by Parent and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries (the “Guarantor Subsidiaries”). All guarantees by Parent and Guarantor Subsidiaries are joint and several, and full and unconditional; provided that each guarantee by the Guarantor Subsidiaries is subject to certain customary release provisions contained in the indentures governing the Senior Secured Notes, Senior Notes and Senior Subordinated Notes. CDW LLC's Canada subsidiary (the “Non-Guarantor Subsidiary”) does not guarantee the debt obligations. CDW LLC and CDW Finance Corporation, as co-issuers, are 100% owned by Parent, and each of the Guarantor Subsidiaries and the Non-Guarantor Subsidiary is 100% owned by CDW LLC.
The following tables set forth condensed consolidating balance sheets as of March 31, 2013 and December 31, 2012, consolidating statements of operations for the three months ended March 31, 2013 and 2012, condensed consolidating statements of comprehensive income for the three months ended March 31, 2013 and 2012, and condensed consolidating statements of cash flows for the three months ended March 31, 2013 and 2012, in accordance with Rule 3-10 of Regulation S-X. The consolidating financial information includes the accounts of CDW Corporation (the “Parent Guarantor”), which has no independent assets or operations, the accounts of CDW LLC (the “Subsidiary Issuer”), the combined accounts of the Guarantor Subsidiaries, the accounts of the Non-Guarantor Subsidiary, and the accounts of CDW Finance Corporation (the “Co-Issuer”) for the periods indicated. The information was prepared on the same basis as the Company’s consolidated financial statements.

15

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


 
Condensed Consolidating Balance Sheet
March 31, 2013
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
123.4

 
$
7.9

 
$
16.2

 
$

 
$
(0.4
)
 
$
147.1

Accounts receivable, net

 

 
1,193.0

 
71.5

 

 

 
1,264.5

Merchandise inventory

 

 
354.1

 
4.3

 

 

 
358.4

Miscellaneous receivables

 
49.7

 
95.9

 
5.9

 

 

 
151.5

Deferred income taxes

 
8.6

 
4.6

 
(0.1
)
 

 

 
13.1

Prepaid expenses and other

 
16.2

 
34.7

 
0.6

 

 

 
51.5

Total current assets

 
197.9

 
1,690.2

 
98.4

 

 
(0.4
)
 
1,986.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net

 
68.2

 
63.4

 
2.4

 

 

 
134.0

Goodwill

 
749.4

 
1,428.5

 
30.6

 

 

 
2,208.5

Other intangible assets, net

 
348.6

 
1,087.2

 
7.8

 

 

 
1,443.6

Deferred financing costs, net

 
49.3

 

 

 

 

 
49.3

Other assets
5.3

 
1.1

 
0.1

 
0.6

 

 
(5.9
)
 
1.2

Investment from and advances to subsidiaries
158.5

 
2,881.2

 

 

 

 
(3,039.7
)
 

Total assets
$
163.8

 
$
4,295.7

 
$
4,269.4

 
$
139.8

 
$

 
$
(3,046.0
)
 
$
5,822.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable—trade
$

 
$
16.3

 
$
591.1

 
$
35.1

 
$

 
$
(0.4
)
 
$
642.1

Accounts payable—inventory financing

 

 
252.9

 

 

 

 
252.9

Deferred revenue

 

 
65.7

 
0.3

 

 

 
66.0

Accrued expenses

 
202.3

 
143.7

 
5.9

 

 

 
351.9

Total current liabilities

 
218.6

 
1,053.4

 
41.3

 

 
(0.4
)
 
1,312.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt

 
3,680.8

 

 

 

 

 
3,680.8

Deferred income taxes

 
186.5

 
426.1

 
1.7

 

 
(5.3
)
 
609.0

Accrued interest

 
6.9

 

 

 

 

 
6.9

Other liabilities

 
44.4

 
3.8

 
1.7

 

 
(0.6
)
 
49.3

Total long-term liabilities

 
3,918.6

 
429.9

 
3.4

 

 
(5.9
)
 
4,346.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity
163.8

 
158.5

 
2,786.1

 
95.1

 

 
(3,039.7
)
 
163.8

Total liabilities and shareholders’ equity
$
163.8

 
$
4,295.7

 
$
4,269.4

 
$
139.8

 
$

 
$
(3,046.0
)
 
$
5,822.7




16

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Condensed Consolidating Balance Sheet
December 31, 2012
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
48.0

 
$

 
$
9.8

 
$

 
$
(19.9
)
 
$
37.9

Accounts receivable, net

 

 
1,217.7

 
67.3

 

 

 
1,285.0

Merchandise inventory

 

 
313.2

 
1.4

 

 

 
314.6

Miscellaneous receivables

 
61.7

 
82.0

 
4.8

 

 

 
148.5

Deferred income taxes

 
8.7

 
5.5

 
(0.1
)
 

 

 
14.1

Prepaid expenses and other

 
10.1

 
24.4

 
0.1

 

 

 
34.6

Total current assets

 
128.5

 
1,642.8

 
83.3

 

 
(19.9
)
 
1,834.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net

 
73.9

 
66.2

 
2.6

 

 

 
142.7

Goodwill

 
749.4

 
1,428.5

 
31.4

 

 

 
2,209.3

Other intangible assets, net

 
348.6

 
1,121.7

 
8.2

 

 

 
1,478.5

Deferred financing costs, net

 
53.2

 

 

 

 

 
53.2

Other assets
5.4

 
1.1

 
0.4

 
0.6

 

 
(5.9
)
 
1.6

Investment in and advances to subsidiaries
131.1

 
2,946.0

 

 

 

 
(3,077.1
)
 

Total assets
$
136.5

 
$
4,300.7

 
$
4,259.6

 
$
126.1

 
$

 
$
(3,102.9
)
 
$
5,720.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable-trade
$

 
$
16.5

 
$
500.3

 
$
21.7

 
$

 
$
(19.9
)
 
$
518.6

Accounts payable-inventory financing

 

 
249.2

 

 

 

 
249.2

Current maturities of long-term debt

 
40.0

 

 

 

 

 
40.0

Deferred revenue

 

 
57.8

 

 

 

 
57.8

Accrued expenses

 
139.3

 
157.4

 
5.9

 

 

 
302.6

Total current liabilities

 
195.8

 
964.7

 
27.6

 

 
(19.9
)
 
1,168.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt

 
3,731.0

 

 

 

 

 
3,731.0

Deferred income taxes

 
188.1

 
440.0

 
1.7

 

 
(5.5
)
 
624.3

Accrued interest

 
8.0

 

 

 

 

 
8.0

Other liabilities

 
46.7

 
4.0

 
1.7

 

 
(0.4
)
 
52.0

Total long-term liabilities

 
3,973.8

 
444.0

 
3.4

 

 
(5.9
)
 
4,415.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity
136.5

 
131.1

 
2,850.9

 
95.1

 

 
(3,077.1
)
 
136.5

Total liabilities and shareholders' equity
$
136.5

 
$
4,300.7

 
$
4,259.6

 
$
126.1

 
$

 
$
(3,102.9
)
 
$
5,720.0




17

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Consolidating Statement of Operations
Three Months Ended March 31, 2013
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Net sales
$

 
$

 
$
2,289.8

 
$
121.9

 
$

 
$

 
$
2,411.7

Cost of sales

 

 
1,902.1

 
107.6

 

 

 
2,009.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit

 

 
387.7

 
14.3

 

 

 
402.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling and administrative expenses

 
25.7

 
216.7

 
9.1

 

 

 
251.5

Advertising expense

 

 
29.6

 
0.8

 

 

 
30.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations

 
(25.7
)
 
141.4

 
4.4

 

 

 
120.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest (expense) income, net

 
(72.2
)
 

 
0.1

 

 

 
(72.1
)
Net loss on extinguishments of long-term debt

 
(3.9
)
 

 

 

 

 
(3.9
)
Management fee

 
0.9

 

 
(0.9
)
 

 

 

Other income, net

 

 
0.3

 
0.1

 

 

 
0.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income before income taxes

 
(100.9
)
 
141.7

 
3.7

 

 

 
44.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax benefit (expense)

 
37.7

 
(53.0
)
 
(0.9
)
 

 

 
(16.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income before equity in earnings of subsidiaries

 
(63.2
)
 
88.7

 
2.8

 

 

 
28.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
28.3

 
91.5

 

 

 

 
(119.8
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
28.3

 
$
28.3

 
$
88.7

 
$
2.8

 
$

 
$
(119.8
)
 
$
28.3








18

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Consolidating Statement of Operations
Three Months Ended March 31, 2012
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Net sales
$

 
$

 
$
2,213.0

 
$
106.2

 
$

 
$

 
$
2,319.2

Cost of sales

 

 
1,842.0

 
92.6

 

 

 
1,934.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit

 

 
371.0

 
13.6

 

 

 
384.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling and administrative expenses

 
25.8

 
217.2

 
8.6

 

 

 
251.6

Advertising expense

 

 
28.6

 
0.8

 

 

 
29.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations

 
(25.8
)
 
125.2

 
4.2

 

 

 
103.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest (expense) income, net

 
(79.2
)
 
0.3

 

 

 

 
(78.9
)
Net loss on extinguishments of long-term debt

 
(9.4
)
 

 

 

 

 
(9.4
)
Management fee

 
1.4

 

 
(1.4
)
 

 

 

Other (expense) income, net

 
(0.3
)
 
0.1

 

 

 

 
(0.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income before income taxes

 
(113.3
)
 
125.6

 
2.8

 

 

 
15.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax benefit (expense)

 
48.8

 
(52.2
)
 
(0.8
)
 

 

 
(4.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income before equity in earnings of subsidiaries

 
(64.5
)
 
73.4

 
2.0

 

 

 
10.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
10.9

 
75.4

 

 

 

 
(86.3
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
10.9

 
$
10.9

 
$
73.4

 
$
2.0

 
$

 
$
(86.3
)
 
$
10.9



















19

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2013
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Comprehensive income
$
25.9

 
$
25.9

 
$
88.7

 
$
0.4

 
$

 
$
(115.0
)
 
$
25.9




























20

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2012
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Comprehensive income
$
12.8

 
$
12.8

 
$
73.4

 
$
3.8

 
$

 
$
(90.0
)
 
$
12.8































21

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2013
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Net cash provided by operating activities
$

 
$
9.7

 
$
171.7

 
$
7.1

 
$

 
$
19.5

 
$
208.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures

 
(7.8
)
 
(1.0
)
 

 

 

 
(8.8
)
Net cash used in investing activities