CDW (CDW) 10-K risk factor changes: FY2019 vs FY2018

For example, there continues to be substantial uncertainty regarding the economic impact of the [removed: Referendum on the] UK's [removed: Membership of the European Union ("EU") advising for the] exit [removed: of the UK] from the [removed: EU and the subsequent notice delivered by the UK to the EU of the UK's withdrawal (referred] [added: European Union ("EU"), referred] to as [removed: "Brexit").][added: "Brexit".]

Although the full effects of Brexit are uncertain and will be dependent on the outcome of such negotiations, potential adverse consequences of Brexit include global market uncertainty, volatility in currency exchange rates, greater restrictions on imports and exports between the UK and [removed: EU countries] [added: other countries,] and increased regulatory complexities, each of which could have a negative impact on our business, financial condition [removed: and] [added: or] results of operations.

An adverse change in government spending policies (such as budget cuts or limitations or temporary shutdowns of government operations), shifts in budget priorities or reductions in revenue levels could cause our [added: impacted] public sector customers or our other customers that do business with impacted public sector customers to reduce or delay their purchases or to terminate or not renew their contracts with us, which could adversely affect our business, results of operations or cash flows.

Additionally, such adverse change in government spending policies, shifts in budget priorities or reductions in revenue levels could impact cash collections from contracts with our [added: impacted public sector customers or] other customers that do business with impacted public sector customers, which could adversely affect our business, results of operations or cash flows.

Our business depends on our vendor partner relationships and the [removed: availability] [added: terms] of [removed: their products.][added: the agreements governing those relationships.]

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

For example, there is no assurance that, as our vendor partners continue to sell directly to end users and through resellers, they will not limit or curtail the availability of their [added: products to solutions providers like us.]

We purchase the products included in our [removed: solutions] portfolio both directly from our vendor partners and from wholesale distributors.

Although we purchase from a diverse vendor base, in [removed: 2018,] [added: 2019,] products we purchased from wholesale distributors Ingram Micro, SYNNEX and Tech Data each represented approximately 10% of total US purchases.

In addition, sales of products manufactured by Apple, Cisco, Dell EMC, [removed: Hewlett Packard Enterprise,] HP Inc., Lenovo and Microsoft, whether purchased directly from these vendor partners or from a wholesale distributor, represented [removed: in the aggregate nearly] [added: approximately] 60% of our [removed: 2018] [added: 2019] consolidated Net sales.

Sales of products manufactured by Cisco and [removed: HP Inc.] [added: Dell EMC] represented approximately 25% of our [removed: 2018] [added: 2019] consolidated Net sales.

Further, the sale, spin-off or combination of any of our vendor partners and/or certain of their business units, including any such sale to or combination with a vendor with whom we do not currently have a commercial relationship or whose products we do not sell, [added: or our ability to develop relationships with and sell hardware, software and services from new and emerging vendors and vendors that we have not historically represented in the marketplace,] could have an adverse impact on our business, results of operations or cash flows.

To the extent that a vendor's offering that is [removed: highly] in [added: high] demand is not available to us for resale in one or more customer channels, and there is not a competitive offering from another vendor that we are authorized to sell in such customer channels, or if we are unable to develop relationships with new technology providers or companies that we have not historically represented, our business, results of operations or cash flows could be adversely impacted.

| • | resellers, such as Computacenter, Connection, [removed: Dimension Data,] ePlus, Insight Enterprises, [removed: PCM,] [added: NTT,] Presidio, SCC, Softchoice, World Wide Technology and many smaller resellers; |

| • | manufacturers who sell directly to customers, such as Adobe, Apple, [removed: Dell,] [added: Dell EMC,] HP Inc. and Hewlett Packard Enterprise; |

| • | large service providers and system integrators, such as Accenture, [removed: Dell,] [added: Dell EMC,] Hewlett Packard Enterprise and IBM; |

| • | cloud providers, such as Amazon Web Services, [removed: Box] [added: Google] and Microsoft; |

| • | e-tailers, such as [removed: Amazon, Newegg] [added: Amazon] and [removed: TigerDirect.com;] [added: Newegg;] and |

If we are unable to effectively respond to the evolving competitive landscape, [added: or respond in a manner that is less effective than that of] our [added: competitors, our] business, results of operations or cash flows could be adversely impacted.

Our success is dependent on the accuracy, proper utilization and continuing [added: maintenance and] development of our information technology systems, including our business systems, such as our sales, customer management, financial and accounting, marketing, [removed: purchasing, warehouse management, e-commerce and mobile systems, as well as our operational platforms, including voice and data networks and power systems.]

| • | manage our [removed: inventory and] [added: inventory,] accounts receivable and accounts payable; |

Any disruption to or infiltration of our information technology systems could significantly harm our business [removed: and] [added: or] results of operations.

The evolving nature of threats to data security, in light of new and sophisticated methods used by criminals and cyberterrorists, [added: state-sponsored organizations and nation-states,] including computer viruses, malware, phishing, misrepresentation, social engineering and forgery, make it increasingly challenging to anticipate and adequately mitigate these risks.

Security breaches could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, as well as the loss of existing or potential [added: customers and damage to our brand and reputation.]

[removed: In addition, the adoption] of new or modified procurement regulations and other requirements may increase our compliance costs and reduce our gross margins, which could have a negative effect on our business, results of operations or cash flows.

Our [removed: service offerings] [added: services] include field services, managed services, warranties, configuration services, partner services and telecom services.

Our future success will depend to a significant extent on the efforts of our Chief Executive Officer, as well as the continued service and support of our other executive [removed: officers.][added: officers and the effectiveness of our succession planning.]

Manufacturing interruptions or delays, including as a result of the financial instability or bankruptcy of manufacturers, significant labor disputes such as strikes, natural [removed: disasters] [added: disasters, pandemics] or other [added: public health crises, such as the coronavirus, or other] adverse occurrences affecting any of our suppliers' facilities, could disrupt our supply chain.

A natural disaster or other adverse occurrence at one of our primary facilities or [removed: customer data centers] [added: a third-party provider location] could damage our business.

In addition, we operate [removed: three customer data centers and] numerous [removed: sales offices] [added: facilities] which may contain both business-critical data and confidential information of our [added: customers and third parties, such as data center colocation and hosted solution partners, provide services as a component of our services delivery to] customers.

A natural disaster or other adverse occurrence at any of [removed: the customer data centers or at any of] our major sales offices [added: or third-party provider locations] could negatively impact our business, results of operations or cash flows.

Increases in the cost of commercial delivery services or disruptions of those services could [added: materially] adversely impact our business.

Additionally, strikes, inclement weather, natural disasters or other service interruptions by such shippers could [added: materially] adversely affect our ability to deliver or receive products on a timely basis.

[removed: This risk is heightened during periods] of [removed: global or industry-specific economic downturn or uncertainty, during periods of] rising interest rates or, in the case of public sector customers, during periods of budget constraints.

We seek to minimize our inventory exposure through a variety of inventory management procedures and [added: policies, including our rapid-turn inventory model, as well as vendor price protection and product return programs.]

To the extent the value of goodwill or identifiable intangible assets [removed: with indefinite lives] becomes impaired, we may be required to incur material charges relating to the impairment of those assets.

As a result, fluctuations in the exchange rate of the US dollar relative to the local currencies of our international subsidiaries, particularly the British pound and the Canadian dollar, could cause [added: material] fluctuations in our reported results of operations.

We are subject to intellectual property infringement claims against us in the ordinary course of our business, either because of the products and services we sell or the business systems and processes we use to sell such products and services, in the form [added: of cease-and-desist letters, licensing inquiries, lawsuits and other communications and demands.]

Our operations are subject to numerous complex federal, state, provincial, local and foreign laws and regulations in a number of areas, including labor and employment, advertising, e-commerce, tax, trade, import and export requirements, economic and trade sanctions, anti-corruption, data privacy requirements (including those under the European Union General Data Protection [removed: Regulation),] [added: Regulation and the California Consumer Privacy Act),] anti-competition, environmental and health and safety.

[removed: We have a substantial amount] [added: Our level] of [removed: indebtedness, which] [added: indebtedness] could have important [removed: consequences to our business.][added: consequences, including the following:]

The UK formally withdrew from EU membership on January 31, 2020, and commenced a transition period during which the trading relationship between the UK and the EU will remain the same and the UK and EU will begin negotiations to determine their future relationship.

These effects may be amplified if the UK and the EU fail to agree on a future trade relationship, which could result in significant market and economic disruption.

We have established a presence in the Netherlands to help address future developments, as needed, for Brexit, which could add complexity to our European operations as well as result in higher costs associated with serving our customers following the transition period.

In addition, a reduction in the amount or a change in the terms of credit granted to us by our vendor

We could experience product constraints due to the failure of suppliers to accurately forecast customer demand, or to manufacture sufficient quantities of product to meet customer demand, amongst other reasons.

purchasing, warehouse management, e-commerce and mobile systems, as well as our operational platforms, including voice and data networks and power systems.

| • | support planned growth in services and solutions and continued evolution of the business; |

Additionally, third parties, such as data center colocation and hosted solution partners, provide services to us and as a component of our services delivery to customers.

These third parties could also be a source of security risk in the event of a failure of their own security systems and infrastructure.

In addition, the adoption

This risk is heightened during periods of global or industry-specific economic downturn or uncertainty, during periods

Further, if our customers’ businesses are adversely affected by the impact of the coronavirus, they might delay or reduce purchases from us, which could adversely affect our results of operations.

Our level of indebtedness could adversely affect our business.

The borrowing base at any time equals the sum of up to 85% of CDW LLC and its subsidiary guarantors' eligible accounts receivable (net of accounts receivable

The London Inter-bank Offered Rate ("LIBOR") and certain other interest "benchmarks" may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences.

Certain of our credit facilities, including our senior secured term loan facility and our Revolving Loan, have variable interest rates using LIBOR as a benchmark rate, and we have entered into interest rate cap agreements with respect to the senior secured term loan facility that are based on LIBOR.

As of December 31, 2019, $1.5 billion of our total debt outstanding bears interest at variable interest rates using LIBOR as a benchmark rate.

The LIBOR and certain other interest "benchmarks" may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences.

The United Kingdom's Financial Conduct Authority, which regulates LIBOR, has announced that it intends to stop encouraging or requiring banks to submit LIBOR rates after 2021.

The US Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large US financial institutions, announced the replacement of US dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by US Treasury securities, called the Secured Overnight Financing Rate ("SOFR").

The first publication of SOFR was released in April 2018.

Whether or not SOFR attains market traction as a LIBOR replacement for US dollar-denominated instruments, and whether other benchmarks will attain traction in other markets, remains in question and the future of LIBOR at this time is uncertain.

If LIBOR ceases to exist, interest rates on our current or future debt obligations and hedging instruments may be adversely affected and we may need to renegotiate the agreements governing such obligations or instruments.

Although the agreement governing our senior secured term loan facility contains provisions for amending the applicable term loan interest rates if LIBOR is discontinued or cannot be determined, any such amendments will be contingent on our ability to negotiate new "benchmark" rates, spreads and calculation methods with the administrative agent and lenders under such facility.

We may be unable to negotiate an acceptable alternative to LIBOR, or if we do agree to amend the facility, the new "benchmark" may perform differently than LIBOR or cause other unanticipated consequences, which could adversely affect our interest expense, related debt obligations and our interest rate cap agreements.

| | |

| --- | --- |

Negotiations to determine the terms of the withdrawal, including the terms of trade between the UK and the EU, are ongoing.

products to solutions providers like us.

Our success is dependent on our ability to develop relationships with and sell hardware, software and services from new emerging vendors and vendors that we have not historically represented in the marketplace.

In addition, we operate data centers for our customers that host their technology infrastructure and may store and transmit both business-critical data and confidential information.

customers and damage to our brand and reputation.

Suppliers may also fail to accurately forecast customer demand, or may be unable to manufacture sufficient quantities of product to meet customer demand, resulting in the reduced supply of product available to us.

policies, including our rapid-turn inventory model, as well as vendor price protection and product return programs.

of cease-and-desist letters, licensing inquiries, lawsuits and other communications and demands.

We have a substantial amount of indebtedness.

Our substantial indebtedness could have important consequences, including the following:

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

[removed: Overview][added: *Overview*]

CDW [removed: Corporation is] [added: Corporation,] a Fortune 500 company and [added: member of the S&P 500 Index, is] a [removed: leading] [added: market-leading] provider of integrated [removed: IT] [added: information technology ("IT")] solutions to small, medium and large business, [removed: and] government, education and healthcare customers in the US, the UK and Canada.

[added: Our broad array of offerings] ranges from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.

We are technology "agnostic," with a [removed: product] [added: solutions] portfolio including more than 100,000 products and services from more than 1,000 leading and emerging brands.

Our solutions are delivered in physical, virtual and cloud-based environments through [removed: over 6,000] [added: approximately 6,800] customer-facing coworkers, including sellers, highly-skilled technology specialists and advanced service delivery engineers.

We also have two other operating segments: CDW UK and [added: CDW] Canada, each of which do not meet the reportable segment quantitative thresholds and, accordingly, are included in an all other category ("Other").

| • | General economic conditions are a key factor affecting our results as they impact our customers' willingness to spend on information technology. This is particularly the case for [removed: business] [added: our Corporate and Small Business] customers, as their purchases tend to reflect confidence in their business prospects, which are driven by their [added: discrete] perceptions of business [removed: conditions. Purchasing behavior may be different between our Corporate customers] and [removed: Small Business customers due to their perception of business] [added: general economic] conditions. Additionally, changes in trade policy and product constraints from suppliers could have an adverse impact on our business. There [added: is uncertainty regarding whether the rapidly evolving coronavirus could impact our supply chain causing product constraints, which could have an adverse impact on our business. There] continues to be substantial uncertainty regarding the impact of [removed: Brexit.] [added: the UK's exit from the European Union ("EU") (referred to as "Brexit").] Potential adverse consequences of Brexit such as global market uncertainty, volatility in currency exchange rates, greater restrictions on imports and exports between UK and EU countries and increased regulatory complexities could have a negative impact on our business, financial condition and results of operations. To date, CDW UK [removed: is] [added: has] not [removed: seeing] [added: experienced] significant changes in the buying behavior of its customers even with the uncertainty related to the [removed: timing and] [added: ultimate] terms of [removed: Brexit.] |

| • | Changes in spending policies, budget priorities and funding levels are a key factor influencing the purchasing levels of government, healthcare and education customers. [removed: A prolonged partial shutdown of the US Government could have an adverse impact to our sales to Government customers and sales to our other customers that do business with the areas of the US Government affected by a partial shutdown. Additionally, a prolonged partial shutdown could impact cash collections from contracts with customers who do business with areas of the US Government affected by a partial shutdown.] |

| • | Technology trends drive customer purchasing behaviors in the market. Current technology trends are focused on delivering greater flexibility and efficiency, as well as designing IT securely. These trends are driving customer adoption of solutions such as those delivered via cloud, software defined architectures and hybrid on-premise and off-premise combinations, as well as the evolution of the IT consumption model to more [removed: "as-a-service"] [added: "as a service"] offerings, including [removed: Device-as-a-Service ("DaaS")] [added: Device as a Service] and managed services. |

[removed: We] [added: In addition to Non-GAAP operating income and Non-GAAP operating income margin, we] believe that the most important [removed: of these] [added: financial and non-financial] measures and ratios include average daily sales, gross margin, operating margin, Net income, Non-GAAP income before income taxes, Non-GAAP net income, Net income per [removed: common] [added: diluted] share, Non-GAAP net income per diluted share, [removed: EBITDA, Adjusted EBITDA, Adjusted EBITDA margin,] free cash flow, return on working capital, Cash and cash equivalents, net working capital, cash conversion [removed: cycle (defined to be days of sales outstanding in Accounts receivable plus days of supply in Inventory minus days of purchases outstanding in Accounts payable, based on a rolling three-month average),] [added: cycle,] debt levels including available [removed: credit and leverage ratios,] [added: credit,] sales per coworker and coworker turnover.

In this [removed: Form 10-K,] [added: report,] we discuss Non-GAAP [added: operating income, Non-GAAP operating] income [added: margin, Non-GAAP income] before income [removed: taxes,] [added: taxes and] Non-GAAP net income, [removed: Non-GAAP net income per diluted share, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin] which are non-GAAP financial measures.

For [removed: further details] [added: additional information] regarding [removed: the Term Loan, see Long-Term Debt and Financing Arrangements within Management's Discussion and Analysis of Financial Condition and Results of Operations] [added: our debt] and [added: refinancing activities, see] Note 9 (Long-Term Debt) to the accompanying Consolidated Financial Statements.

For the definitions of Non-GAAP [added: operating income, Non-GAAP operating] income [added: margin, Non-GAAP income] before income [removed: taxes,] [added: taxes and] Non-GAAP net income and [removed: Adjusted EBITDA and] reconciliations to [removed: Net income,] [added: the most directly comparable GAAP measure,] see "Results of [removed: Operations."][added: Operations - Non-GAAP Financial Measure Reconciliations."]

| | [removed: Years] [added: Year] Ended December 31, | | | | | | | | | | |

| (dollars in millions) | [removed: 2018] [added: 2019] | | | | [removed: 2017(1)] [added: 2018] | | | | [removed: 2016(1)] [added: 2017] | | |

| Net sales | $ | [removed: 16,240.5] [added: 18,032.4] | | | $ | [removed: 14,832.9] [added: 16,240.5] | | | $ | [removed: 13,672.7] [added: 14,832.9] | |

| Gross profit | [removed: 2,706.9] [added: 3,039.9] | | | | [removed: 2,450.2] [added: 2,706.9] | | | | [removed: 2,328.3] [added: 2,450.2] | | |

| Operating income | [removed: 987.3] [added: 1,133.6] | | | | [removed: 866.5] [added: 987.3] | | | | [removed: 820.0] [added: 866.5] | | |

| Net income | [removed: 643.0] [added: 736.8] | | | | [removed: 523.1] [added: 643.0] | | | | [removed: 425.1] [added: 523.1] | | |

| Non-GAAP net income | [removed: 794.3] [added: 902.1] | | | | [removed: 605.9] [added: 794.3] | | | | [removed: 569.7] [added: 605.9] | | |

| Average daily [removed: sales(2)] [added: sales(1)] | [removed: 63.9] [added: 71.0] | | | | [removed: 58.4] [added: 63.9] | | | | [removed: 53.8] [added: 58.4] | | |

| Net [removed: debt(3)] [added: debt(2)] | [removed: 3,002.8] [added: 3,163.3] | | | | [removed: 3,091.3] [added: 3,002.8] | | | | [removed: 2,970.7] [added: 3,091.3] | | |

| Cash conversion cycle (in [removed: days)(4)] [added: days)(3)] | [removed: 19] [added: 18] | | | | 19 | | | | 19 | | |

| [removed: (2)] [added: (1)] | There were 254 selling days for each of the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016.] [added: 2017.] |

| [removed: (3)] [added: (2)] | Defined as Total debt minus Cash and cash equivalents. |

| [removed: (4)] [added: (3)] | Cash conversion cycle is defined as days of sales outstanding in Accounts receivable and certain receivables due from vendors plus days of supply in Merchandise inventory minus days of purchases outstanding in Accounts payable and Accounts payable-inventory financing, based on a rolling three-month average. |

[removed: Year Ended December] [added: | | | Year Ended December] 31, [removed: 2018 Compared to] [added: 2019 | | | | | | | | | | | |] Year [removed: Ended December] [added: Ended December] 31, [removed: 2017][added: 2018 | | | | | | | | | | |]

| | | [removed: Years] [added: Year] Ended December 31, | | | | | | | | | | | | |

| [added: (dollars in millions)] | | [removed: Dollars in Millions] [added: Net Sales] | | | | Percentage of [added: Total] Net Sales | | | [removed: Dollars in Millions] [added: Net Sales] | | | | Percentage of [added: Total] Net Sales | | [added: | Dollar Change | | | | Percent Change(1) | |]

| Net sales | | $ | [removed: 16,240.5] [added: 18,032.4] | | | 100.0 | % | | $ | [removed: 14,832.9] [added: 16,240.5] | | | 100.0 | % |

| Cost of sales | | [removed: 13,533.6] [added: 14,992.5] | | | | [removed: 83.3] [added: 83.1] | | | [removed: 12,382.7] [added: 13,533.6] | | | | [removed: 83.5] [added: 83.3] | |

| Gross profit | | [removed: 2,706.9] [added: 3,039.9] | | | | [removed: 16.7] [added: 16.9] | | | [removed: 2,450.2] [added: 2,706.9] | | | | [removed: 16.5] [added: 16.7] | |

| Selling and administrative expenses | | [removed: 1,537.1] [added: 1,713.1] | | | | 9.5 | | | [removed: 1,410.0] [added: 1,537.1] | | | | 9.5 | |

| Advertising expense | | [removed: 182.5] [added: 193.2] | | | | 1.1 | | | [removed: 173.7] [added: 182.5] | | | | [removed: 1.2] [added: 1.1] | |

| Operating income | | [removed: 987.3] [added: 1,133.6] | | | | [removed: 6.1] [added: 6.3] | | | [removed: 866.5] [added: 987.3] | | | | [removed: 5.8] [added: 6.1] | |

| Interest expense, net | | [removed: (148.6] [added: (159.4] | | ) | | (0.9 | ) | | [removed: (150.5] [added: (148.6] | | ) | | [removed: (1.0] [added: (0.9] | ) |

| Net loss on extinguishments of long-term debt | | [removed: —] [added: 22.1] | | | | [added: (5.5 | | ) | | 16.6 | | | |] — | | | [removed: (57.4] | [added: —] | [removed: )] | | [removed: (0.4] | [removed: )] [added: —] | [added: | |]

| Other [added: (expense)] income, net | | [removed: 1.8] [added: (24.5] | | [added: )] | | [removed: —] [added: (0.1] | [added: )] | | [removed: 2.1] [added: 1.8] | | | | — | |

| Income before income taxes | | [removed: 840.5] [added: 949.7] | | | | [removed: 5.2] [added: 5.3] | | | [removed: 660.7] [added: 840.5] | | | | [removed: 4.5] [added: 5.2] | |

| Income tax expense | | [removed: (197.5] [added: (212.9] | | ) | | (1.2 | ) | | [removed: (137.6] [added: (197.5] | | ) | | [removed: (0.9] [added: (1.2] | ) |

Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on February 27, 2019.

Brexit.

We have established a presence in the Netherlands to support CDW UK's broader growth opportunities in the EU and to help address future developments, as needed, for Brexit.

Effective January 1, 2019, we made a change to the non-GAAP financial measures that we use to provide meaningful methods of evaluating our financial performance and have replaced EBITDA, Adjusted EBITDA and Adjusted EBITDA margin with Non-GAAP operating income and Non-GAAP operating income margin.

We made this change due to the continuing evolution of the IT consumption model.

We believe Non-GAAP operating income will be more reflective of the costs of providing services to our customers and our own costs as the consumption model continues to evolve.

Non-GAAP operating income is also being used for the first time in 2019 as a key business metric for our annual incentive compensation programs.

| Non-GAAP operating income | 1,368.4 | | | | 1,216.6 | | | | 1,106.8 | | |

| | | 2019 | | | | | | | 2018 | | | | | |

| | | 2019 | | | | | | | 2018 | | | | | | | | | | | | |

| Small Business | | 1,510.3 | | | | 8.4 | | | 1,359.6 | | | | 8.4 | | | 150.7 | | | | 11.1 | |

| Government | | 2,519.3 | | | | 14.0 | | | 2,097.3 | | | | 12.9 | | | 422.0 | | | | 20.1 | |

| Education | | 2,411.6 | | | | 13.4 | | | 2,327.4 | | | | 14.3 | | | 84.2 | | | | 3.6 | |

| Healthcare | | 1,933.9 | | | | 10.7 | | | 1,730.0 | | | | 10.7 | | | 203.9 | | | | 11.8 | |

| Total Public | | 6,864.8 | | | | 38.1 | | | 6,154.7 | | | | 37.9 | | | 710.1 | | | | 11.5 | |

| Other | | 2,158.3 | | | | 12.0 | | | 1,883.7 | | | | 11.6 | | | 274.6 | | | | 14.6 | |

For additional information, see "Non-GAAP Financial Measure Reconciliations" below regarding constant currency Net sales growth.

For the year ended December 31, 2019, Net sales growth reflected growth across all major product categories, particularly client devices (defined as notebooks/mobile devices and desktops), software and services.

Additionally, eleven months of results from Scalar, which was acquired on February 1, 2019, contributed to our Net sales growth.

Net sales to Government customers increased 20.1% primarily driven by client devices, software and netcomm.

Net sales to Education customers increased 3.6% primarily driven by client devices and video, partially offset by netcomm.

Both operations grew in local currency and Canada growth included the incremental Net sales from Scalar.

Gross profit margin was positively impacted by product margin and an increase in the mix of netted down revenues that are booked net of costs of goods sold, partially offset by Net sales growth outpacing partner funding growth.

The increase was driven by higher sales payroll expenses consistent with higher gross profit.

During 2019, we evaluated our methodology for allocating certain depreciation and amortization expenses to each of our segments.

The evaluation resulted in a revision to the allocation of depreciation and amortization expenses from Headquarters to our reportable segments, effective January 1, 2019.

The prior period results have been recast to reflect these changes and present comparable information.

| | | 2019 | | | | | | | 2018 | | | | | | | | |

| Corporate | | $ | 585.1 | | | 7.8 | % | | $ | 530.4 | | | 7.8 | % | | 10.3 | % |

| Small Business | | 107.5 | | | | 7.1 | | | 94.4 | | | | 6.9 | | | 13.9 | |

| Public | | 475.0 | | | | 6.9 | | | 405.0 | | | | 6.6 | | | 17.3 | |

| Other(2) | | 101.6 | | | | 4.7 | | | 82.2 | | | | 4.4 | | | 24.8 | |

| Headquarters(3) | | (135.6 | | ) | | nm* | | | (124.7 | | ) | | nm* | | | 8.7 | |

Total operating margin percentage increased 20 basis points to 6.3% for the year ended December 31, 2019, from 6.1% for the year ended December 31, 2018 due to an increase in Gross profit margin and lower intangible asset amortization as a percentage of Net sales, partially offset by higher sales payroll expenses.

This increase was primarily due to paying an effective interest rate on the term loan in 2019 that exceeded the capped rate in 2018 and higher interest expense to finance the Scalar acquisition.

The 2019 effective tax rate was lower than 2018 primarily due to tax credits, higher excess tax benefits on equity-based compensation and a discrete tax benefit related to CDW Canada's acquisition of Scalar.

Non-GAAP operating income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated payroll taxes, and acquisition and integration expenses.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

Our broad array of offerings

Effective January 1, 2018, we adopted the requirements of ASU 2014-09, Revenue from Contracts with Customers, as amended ("Topic 606"), utilizing the full retrospective method.

Prior period amounts have been adjusted accordingly.

| | |

| --- | --- |

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| --- | --- |

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| --- | --- |

Additionally, Adjusted EBITDA is a measure in the credit agreement governing our senior secured term loan facility (the "Term Loan") used to evaluate our ability to make certain investments, incur additional debt, and make restricted payments, such as dividends and share repurchases, as well as whether we are required to make additional principal prepayments on the Term Loan beyond the quarterly amortization payments.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| Adjusted EBITDA | 1,302.2 | | | | 1,186.0 | | | | 1,118.1 | | |

| | |

| --- | --- |

| (1) | Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606. |

| | |

| --- | --- |

| | |

| --- | --- |

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| --- | --- |

Results of operations, in dollars and as a percentage of Net sales are as follows:

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| | | 2018 | | | | | | | 2017(1) | | | | | |

| | |

| --- | --- |

| (1) | Amounts for 2017 have been adjusted to reflect the adoption of Topic 606. |

*Net sales*

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

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | |

| | | 2018 | | | | | | | 2017(1) | | | | | | | | | | | | |

| (dollars in millions) | | Net Sales | | | | Percentage of Total Net Sales | | | Net Sales | | | | Percentage of Total Net Sales | | | Dollar Change | | | | Percent Change(2) | |

| | | | | | | | | | | | | | | | | | | | | | |

| Small Business | | 1,359.6 | | | | 8.4 | | | 1,220.5 | | | | 8.2 | | | 139.1 | | | | 11.4 | |

As of December 31, [removed: 2018,] [added: 2019,] we have interest rate cap agreements in effect with a combined notional amount of $1.4 billion.

For additional [removed: details,] [added: information,] see Note 8 (Financial Instruments) to the accompanying Consolidated Financial Statements.

CDW Corporation (together with its subsidiaries, the "Company," "CDW" or [removed: "we") is] [added: "we"),] a Fortune 500 company and [added: member of the S&P 500 Index, is] a [removed: leading] [added: market-leading] provider of integrated information technology ("IT") solutions to small, medium and large business, government, education and healthcare customers in the United States ("US"), the United Kingdom ("UK") and Canada.

Our solutions are delivered in physical, virtual and cloud-based environments through [removed: over 6,000] [added: approximately 6,800] customer-facing coworkers, including sellers, highly-skilled technology specialists and advanced service delivery engineers.

We [added: have capabilities to] provide integrated IT solutions in more than [removed: 80] [added: 150] countries for customers with primary locations in the US, UK and Canada, which are large and growing markets.

According to the International Data Corporation ("IDC"), the total US, UK and Canadian IT market generated approximately $1 trillion in sales in [removed: 2018.][added: 2019.]

We believe our addressable markets in the US, UK and Canada represent [removed: more than $325] [added: approximately $360] billion in annual sales.

For the year ended December 31, [removed: 2018,] [added: 2019,] we estimate that our total Net sales of [removed: $16] [added: $18] billion represented approximately 5% of our addressable markets.

We believe that demand for IT will continue to outpace general economic growth in the markets we [removed: serve] [added: serve,] fueled by new technologies, including cloud computing, virtualization and mobility as well as growing end-user demand for security, efficiency and productivity.

We serve our customers through sales teams focused on customer end-markets that are supported by technical specialists and [removed: highly skilled] [added: highly-skilled] service delivery engineers.

Our Public segment is comprised of government agencies and education and [added: healthcare]

[removed: healthcare] institutions in the US.

In our US business, which represents approximately 90% of our revenues, we currently have five dedicated customer channels: corporate, small business, government, education and healthcare, each of which generated over [removed: $1.0] [added: $1.5] billion in Net sales in [removed: 2018.][added: 2019.]

Net sales to customers in the UK and Canada combined generated [removed: $1.9] [added: $2.2] billion in [removed: 2018.][added: 2019.]

We 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, Google, Hewlett Packard Enterprise, HP Inc., IBM, Intel, Lenovo, Microsoft, NetApp, Samsung, [removed: Symantec] and VMware, as well as from emerging technology companies such as [removed: Calabrio,] Cohesity, Crowdstrike, [removed: Nutanix,] Proofpoint, [removed: Splunk, Varidesk, Veeam] [added: Pure Storage, Rubrik, ServiceNow,] and [removed: Viptela.][added: Silver Peak.]

This broad portfolio of partners and technologies enables us to offer customers significant [removed: choice] [added: options] and meet customer demand for the products and solutions that best meet their needs.

In [removed: 2018,] [added: 2019,] we generated over $1.0 billion of Net sales from each of [removed: five of our] [added: six] vendor partners and over $100 million of [removed: revenue] [added: Net sales] from each of [removed: thirteen] [added: eleven] other vendor partners.

We have received the highest level of certification from major vendor partners such as Cisco, Dell EMC, Hewlett Packard Enterprise, [removed: Microsoft] [added: LG, Microsoft, Samsung,] and [removed: Palo Alto Networks,] [added: VMware] which reflects the extensive product and solution knowledge and capabilities that we bring to our customers' IT challenges.

For our US operations, we purchased approximately 50% of the products we sold as discrete products or as components of a solution directly from our vendor partners and the remaining 50% from wholesale distributors for the year ended December 31, [removed: 2018.][added: 2019.]

Purchases from our three largest wholesale distributors, Ingram Micro, SYNNEX and Tech Data, were each approximately 10% of total US purchases in [removed: 2018.][added: 2019.]

These arrangements represented approximately 50% of total consolidated Net sales in [removed: 2018,] [added: 2019,] of which approximately 25% relate to electronic delivery for software licenses.

Smaller, local or regional [removed: value added] [added: value-added] resellers typically focus on a single solution suite or portfolio of solutions from one or two vendor partners.

For [removed: a discussion of] [added: additional information on] the risks associated with competition, see [removed: Item 1A, "Risk Factors."][added: "Item 1A.]

Our scale also enables us to operate our three distribution centers (two in the US and one in the [removed: UK)] [added: UK),] which combined are more than 1 million square feet in size.

We have cross-border relationships that enable us to serve the needs of our US, UK and Canadian-based customers in more than [removed: 80] [added: 150] countries.

We estimate that more than 40% of our Net sales in [removed: 2018] [added: 2019] in the US came from sales of product categories and services typically associated with solutions.

Our hardware products include notebooks/mobile devices (including tablets), network communications, desktop computers, video monitors, enterprise and data storage, [removed: printers] and [removed: servers.][added: other hardware.]

[removed: Today,] IT is critical to both "run the business" and drive greater growth and productivity.

Our migration, integration and managed services offerings help our customers simplify cloud adoption, as well as the ongoing management of cloud [removed: solutions] [added: solutions,] across the entire IT lifecycle.

| • | *Data Center:* We assess our customers [removed: data center needs,] [added: application infrastructure need,] design flexible, resilient and efficient solutions and manage the solution throughout its lifecycle. Our broad portfolio of hardware and software products, encompassing both on and off-premise solutions, enables us to provide well-integrated solutions, including converged and hyper-converged infrastructure, physical and virtualized servers, software defined automation and orchestration solutions, [added: hybrid] storage and energy-efficient power and cooling. |

| • | *Security*: We assess our customers' security needs and provide them with risk mitigation tools and services. Product design, architecture and implementation can take the form of hardware, software or Software as a Service. These tools and services are provided across a multitude of categories such as: endpoint security, email security, web security, intrusion prevention, authentication, firewall, virtual private network services and network access control. Security consulting engagements include security assessment, policy and procedure gap analysis, security roadmaps and [removed: healthchecks.] [added: health checks.] |

| *•* | *Services*: We [removed: advise on,] [added: advise,] architect and manage integrated business technology for our customers. Our solutions include integrated cloud, collaboration, data center, mobility and security business technology, from the physical to the application layer. We provide advisory, architectural and managed services across basic, discrete and integrated business technology solutions. We leverage best-in-class partner technology platforms to seamlessly architect and manage disparate IT platforms into integrated business technology solutions. |

Although we believe customers increasingly view technology purchases as solutions rather than discrete product and service categories, our Net sales by major category, based upon our internal category [removed: classifications] [added: classifications,] was as follows:

| | | [removed: Years] [added: Year] Ended December 31, | | | | | | | | | | | | | | | | | | | |

| | | [removed: 2018] [added: 2019] | | | | | | | [removed: 2017(1)(2)] [added: 2018(1)] | | | | | | | [removed: 2016(1)(2)] [added: 2017(1)] | | | | | |

| Enterprise and Data Storage (Including Drives) | | [removed: 1,099.2] [added: 1,146.0] | | | | [removed: 6.8] [added: 6.4] | | | [removed: 1,087.3] [added: 1,102.5] | | | | [removed: 7.3] [added: 6.8] | | | [removed: 1,073.9] [added: 1,070.2] | | | | [removed: 7.9] [added: 7.2] | |

| Total Hardware | | [removed: 13,082.4] [added: 14,363.2] | | | | [removed: 80.6] [added: 79.8] | | | [removed: 11,960.4] [added: 13,099.1] | | | | 80.6 | | | [removed: 10,916.0] [added: 11,971.8] | | | | [removed: 79.8] [added: 80.6] | |

| [removed: Other(4)] [added: Other(3)] | | [removed: 113.8] [added: 124.4] | | | | [removed: 0.7] [added: 0.6] | | | [removed: 112.9] [added: 113.7] | | | | [removed: 0.8] [added: 0.7] | | | [removed: 120.2] [added: 112.9] | | | | [removed: 0.9] [added: 0.8] | |

| Total Net sales | | $ | [removed: 16,240.5] [added: 18,032.4] | | | 100.0 | % | | $ | [removed: 14,832.9] [added: 16,240.5] | | | 100.0 | % | | $ | [removed: 13,672.7] [added: 14,832.9] | | | 100.0 | % |

| [removed: (2)] [added: (1)] | Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, [removed: 2018.] [added: 2019.] |

| [removed: (3)] [added: (2)] | Certain software and services revenue is recorded on a net basis for accounting purposes, so the category percentage of [removed: net revenues] [added: Net sales] is not representative of the category percentage of gross profits. |

| [removed: (4)] [added: (3)] | Includes items such as delivery charges to customers. |

| ● | Solutions across IT lifecycle | ● | Customer relationships driving insight into technology roadmaps |

Risk Factors."

| Notebooks/Mobile Devices | | $ | 4,631.7 | | | 25.7 | % | | $ | 4,062.2 | | | 25.0 | % | | $ | 3,491.8 | | | 23.5 | % |

| Netcomm Products | | 2,193.4 | | | | 12.2 | | | 2,119.1 | | | | 13.0 | | | 2,021.6 | | | | 13.6 | |

| Desktops | | 1,598.2 | | | | 8.9 | | | 1,322.2 | | | | 8.1 | | | 1,196.0 | | | | 8.1 | |

| Video | | 1,272.7 | | | | 7.1 | | | 1,184.3 | | | | 7.3 | | | 1,070.0 | | | | 7.2 | |

| Other Hardware | | 3,521.2 | | | | 19.5 | | | 3,308.8 | | | | 20.4 | | | 3,122.2 | | | | 21.0 | |

| Software(2) | | 2,637.2 | | | | 14.6 | | | 2,331.9 | | | | 14.4 | | | 2,145.4 | | | | 14.5 | |

| Services(2) | | 907.6 | | | | 5.0 | | | 695.8 | | | | 4.3 | | | 602.8 | | | | 4.1 | |

In 2019, we acquired Canada-based technology solutions provider, Scalar Decisions Inc. and a premier IT service management solutions provider, Aptris Inc.

| ● | Solutions across a very broad IT landscape | ● | Value-added solutions and marketing programs that generate end-user demand |

| | |

| --- | --- |

| Notebooks/Mobile Devices | | $ | 4,053.6 | | | 25.0 | % | | $ | 3,519.8 | | | 23.7 | % | | $ | 2,942.9 | | | 21.5 | % |

| Netcomm Products | | 2,119.8 | | | | 13.1 | | | 2,040.3 | | | | 13.8 | | | 1,957.0 | | | | 14.3 | |

| Desktops | | 1,318.2 | | | | 8.1 | | | 1,207.0 | | | | 8.1 | | | 1,087.7 | | | | 8.0 | |

| Video | | 1,185.6 | | | | 7.3 | | | 1,078.4 | | | | 7.3 | | | 963.0 | | | | 7.0 | |

| Other Hardware | | 3,306.0 | | | | 20.3 | | | 3,027.6 | | | | 20.4 | | | 2,891.5 | | | | 21.1 | |

| Software(3) | | 2,347.0 | | | | 14.4 | | | 2,156.9 | | | | 14.5 | | | 2,072.3 | | | | 15.2 | |

| Services(3) | | 697.3 | | | | 4.3 | | | 602.7 | | | | 4.1 | | | 564.2 | | | | 4.1 | |

| (1) | Amounts for 2017 and 2016 have been adjusted to reflect the adoption of ASU 2014-09, Revenue from Contracts with Customers, as amended ("Topic 606"). |

As of December 31, [removed: 2018,] [added: 2019,] we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred.

[removed: | FORM 10-K |][added: FORM 10-K]

[removed: | ý | ANNUAL] [added: ☒ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [removed: |]

For the fiscal year ended December 31, [removed: 2018][added: 2019]

| [removed: ¨] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

For the transition period [removed: from to][added: from to]

Commission File [removed: Number 001-35985][added: Number 001-35985]

[removed: |] (Exact name of registrant as specified in its charter) [removed: |]

| Delaware | | [added: | |] 26-0273989 |

| [removed: (State] [added: (State] or other jurisdiction [removed: of incorporation] [added: of incorporation] or [removed: organization)] [added: organization)] | | [removed: (I.R.S. Employer Identification No.)] | [added: | (I.R.S. Employer Identification No.) |]

| 75 Tri-State International [removed: Lincolnshire, Illinois] | | [removed: 60069] | [added: | |]

| [removed: (Address] [added: (Address] of principal executive [removed: offices)] [added: offices)] | | [removed: (Zip Code)] | [added: | (Zip Code) |]

[removed: (847) 465-6000][added: (847) 465-6000]

[removed: (Registrant's] [added: (Registrant's] telephone number, including area code)

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class:] [added: class] | [added: Trading symbol(s)] | [removed: Name] [added: Name] of each exchange on which [removed: registered] [added: registered] |

| [removed: Common] [added: Common] stock, par value $0.01 per [removed: share] [added: share] | [added: CDW] | [removed: Nasdaq] [added: Nasdaq] Global Select [removed: Market] [added: Market] |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the Act: [removed: None][added: None]

[removed: ¨] [added: ☐] Yes [removed: ý] [added: ☒] No

| Large accelerated filer | [added: |] ý | [added: |] Accelerated filer | [removed: ¨] | [added: ☐ |]

| Non-accelerated filer | [removed: ¨] | [added: ☐ | |] Smaller reporting company | [removed: ¨] | [added: ☐ |]

| | | [added: | |] Emerging growth company | [removed: ¨] | [added: ☐ |]

[added: |] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [added: | | | | | | ☐ |]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June [removed: 29, 2018,] [added: 28, 2019,] the last business day of the registrant's most recently completed second fiscal quarter, was [removed: $12,094.3] [added: $15,932] million, based on the per share closing sale price of [removed: $80.79] [added: $111.00] on that date.

As of February [removed: 22, 2019,] [added: 25, 2020,] there were [removed: 147,059,195] [added: 142,771,539] shares of common stock, $0.01 par value, outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Certain parts of the registrant's definitive proxy statement for its [removed: 2019] [added: 2020] annual meeting of stockholders to be held on May 21, [removed: 2019,] [added: 2020,] which will be filed with the Securities and Exchange Commission on or before April [removed: 30, 2019,] [added: 29, 2020,] are incorporated by reference into Part III of this Annual Report on Form 10-K.

Year Ended December 31, [removed: 2018][added: 2019]

| Item 1. | [removed: [Business](#s86AB75E167FE56499BC3E12CBEF2D90F)] [added: [Business](#s8F655E81C8455C2BBB4F32A5C107A3FB)] | [removed: [4](#s86AB75E167FE56499BC3E12CBEF2D90F)] [added: [4](#s8F655E81C8455C2BBB4F32A5C107A3FB)] |

| Item 1A. | [Risk [removed: Factors](#sB12D3B7B5BC45920A5220D754B67CBEB)] [added: Factors](#s448C994412CD5B9DBF331C16D7349605)] | [removed: [9](#sB12D3B7B5BC45920A5220D754B67CBEB)] [added: [9](#s448C994412CD5B9DBF331C16D7349605)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s34DE407652645253B70D3B327FBDC1FD)] [added: Comments](#s0A0972104DDB54248A5D7FE0A7CF275F)] | [removed: [19](#s34DE407652645253B70D3B327FBDC1FD)] [added: [20](#s0A0972104DDB54248A5D7FE0A7CF275F)] |

| Item 2. | [removed: [Properties](#sD0656BBF556F59348A454780D32DE223)] [added: [Properties](#sBF26F0B25F15517BB7991904DCE3896C)] | [removed: [19](#sD0656BBF556F59348A454780D32DE223)] [added: [20](#sBF26F0B25F15517BB7991904DCE3896C)] |

| Item 3. | [Legal [removed: Proceedings](#sF2D1C831E71E555F8B6EF046CD4C479E)] [added: Proceedings](#s761E887FF29052718D130EBD085AFBB5)] | [removed: [19](#sF2D1C831E71E555F8B6EF046CD4C479E)] [added: [20](#s761E887FF29052718D130EBD085AFBB5)] |

| Item 4. | [Mine Safety [removed: Disclosures](#sEFC601AFB2445F2E9741123B7E6AEE80)] [added: Disclosures](#s44B193409FAD54EE9A6D64BA9889952E)] | [removed: [20](#sEFC601AFB2445F2E9741123B7E6AEE80)] [added: [20](#s44B193409FAD54EE9A6D64BA9889952E)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sBA02CB4B881556FFA57A6B6D6FDB176E)] [added: Securities](#s1801CA399BBD55EDB136880A27F9649C)] | [removed: [21](#sBA02CB4B881556FFA57A6B6D6FDB176E)] [added: [22](#s1801CA399BBD55EDB136880A27F9649C)] |

| Item 6. | [Selected Financial [removed: Data](#s5EFD6619DFCD5FEAAC10D215EBD33F84)] [added: Data](#sE59F7094AD3D50CFA8C71020F694CB0C)] | [removed: [23](#s5EFD6619DFCD5FEAAC10D215EBD33F84)] [added: [24](#sE59F7094AD3D50CFA8C71020F694CB0C)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s928D2F34618758A4887CAE218636C5CE)] [added: Operations](#sD8E4D379154154AB811FEA5549E3E91E)] | [removed: [27](#s928D2F34618758A4887CAE218636C5CE)] [added: [28](#sD8E4D379154154AB811FEA5549E3E91E)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sCBB040E865B95C418200B9B94F42C872)] [added: Risk](#s31BB4D7647BE530AB0E1D6A470CD387F)] | [removed: [51](#sCBB040E865B95C418200B9B94F42C872)] [added: [41](#s31BB4D7647BE530AB0E1D6A470CD387F)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s433D20F4F7885BFBA8D20463A5F23227)] [added: Data](#sA7B0230957445378A391499FF9498550)] | [removed: [52](#s433D20F4F7885BFBA8D20463A5F23227)] [added: [43](#sA7B0230957445378A391499FF9498550)] |

| Item 9. | [Changes in and Disagreements [removed: With] [added: with] Accountants on Accounting and Financial [removed: Disclosure](#sF1428BAD5A3C52238ECFE8AD1382CA5C)] [added: Disclosure](#sA63D00878F6154479BAEDC5B6FF2776A)] | [removed: [95](#sF1428BAD5A3C52238ECFE8AD1382CA5C)] [added: [87](#sA63D00878F6154479BAEDC5B6FF2776A)] |

| Item 9A. | [Controls and [removed: Procedures](#s6EDB54474BBF560D95DD996D46D73C64)] [added: Procedures](#s961A20D9771258978451ACD68FEAA5D5)] | [removed: [95](#s6EDB54474BBF560D95DD996D46D73C64)] [added: [87](#s961A20D9771258978451ACD68FEAA5D5)] |

CDW CORPORATION

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| Lincolnshire | , | Illinois | | 60069 |

None

(Former name, former address and former fiscal year, if changed since last report)

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| | [Information about our Executive Officers](#s6D9C82B1B21D5AF2A6CE31AB93AA5599) | [21](#s6D9C82B1B21D5AF2A6CE31AB93AA5599) |

| SIGNATURES | | [96](#s94367AD76ECD58ECBDEE99838E1D997E) |

| |

| --- |

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| |

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| --- | --- |

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| --- |

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| CDW CORPORATION |

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| --- | --- | --- |

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____________________________________________

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

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| --- | --- | --- | --- |

| | | | |

| | [Executive Officers](#s08A3BDB4CA8A5B4EADA305965E1F98D6) | [20](#s08A3BDB4CA8A5B4EADA305965E1F98D6) |

| SIGNATURES | | [105](#s679B55B9A71A5C3590E0EA6EC68B21D6) |

However, these words are not the exclusive means of identifying such statements.

As of December 31, [removed: 2018,] [added: 2019,] we owned or leased a total of [removed: 2.2] [added: 2.6] million square feet of space, primarily in the US, [removed: Canada] [added: UK] and [removed: UK.][added: Canada.]

In addition, we conduct sales, services and administrative activities in various [removed: leased] locations primarily in the US, [removed: Canada and UK, including data centers in Madison, Wisconsin, Minneapolis, Minnesota] [added: UK] and [removed: the UK.][added: Canada.]

Leases covering our currently occupied leased properties expire at varying dates, generally within the next [removed: ten] [added: 17] years.

[removed: Executive] [added: Information about our Executive] Officers

The following table lists the name, age as of February [removed: 27, 2019] [added: 28, 2020] and positions of each executive officer of the Company.

| Christine A. Leahy | [removed: 54] [added: 55] | President and Chief Executive Officer and member of our Board of Directors since January 2019; Chief Revenue Officer from July 2017 to December 2018; Senior Vice President - International, Chief Legal Officer, and Corporate Secretary from May 2016 to July 2017; Senior Vice President, General Counsel and Corporate Secretary from January 2007 to May 2016. |

| Jill M. Billhorn | [removed: 57] [added: 58] | Senior Vice President, Corporate Sales since January 2019; Vice President, Strategic Solution Sales of CDW Direct, LLC from January 2018 to December 2018; Vice President, East Region of CDW Direct, LLC from August 2015 to January 2018; Vice President - Small Business of CDW Direct, LLC from August 2010 to August 2015. |

| Mark C. Chong | [removed: 48] [added: 49] | Senior Vice President of Strategy and Marketing since November 2016; Partner, Bain & Company [added: (a global management consulting firm)] from January 2010 to September [removed: 2016 and Principal from September 2007 to December 2009.] [added: 2016.] |

| Elizabeth H. Connelly | [removed: 54] [added: 55] | Chief Human Resources Officer and Senior Vice President, Coworker Services since December 2018; Managing Director and Head, Commercial Bank Healthcare, Higher Education and Not-for-Profit Banking at J.P. Morgan Chase & Company [added: (a global financial services firm)] from March 2012 to December 2018. |

| Christina M. Corley | [removed: 51] [added: 52] | Chief [added: Commercial and] Operating Officer since January [added: 2020; Chief Operating Officer since January] 2019; Senior Vice President, Commercial and International Markets from July 2017 to December 2018; Senior Vice President, Corporate Sales from September 2011 to July 2017. |

| Douglas E. Eckrote | [removed: 54] [added: 55] | Senior Vice President, Small Business Sales and eCommerce since August 2016; Senior Vice President, Strategic Solutions and Services from November 2009 to August 2016. |

| Collin B. Kebo | [removed: 52] [added: 53] | Senior Vice President and Chief Financial Officer since January 2018; Vice President, Financial Planning and Analysis from December 2008 to December 2017; Chief Financial Officer - International from May 2016 to December 2017. |

| Robert F. Kirby | [removed: 53] [added: 54] | Senior Vice President, Public Sales since July 2018; Vice President, Federal and State and Local Sales of CDW Government LLC from June 2011 to August 2018. |

| Frederick J. Kulevich | [removed: 53] [added: 54] | Senior Vice President, General Counsel and Corporate Secretary since October 2017; Vice President and Deputy General Counsel from May 2016 to October 2017; Vice President and Assistant General Counsel from May 2014 to May 2016; Senior Director, Ethics and Compliance from July 2006 to May 2014. |

| Christina V. Rother | [removed: 55] [added: 56] | Senior Vice President, Integrated Technology Solutions since July 2018; Senior Vice President, Public and Advanced Technology Sales from September 2011 to July 2018. |

| Jonathan J. Stevens | [removed: 49] [added: 50] | Senior Vice President, Operations and Chief Information Officer since November 2009. |

| Matthew A. Troka | [removed: 48] [added: 49] | Senior Vice President, Product and Partner Management since March 2011. |

| Sona Chawla | 52 | Chief Growth and Innovation Officer since January 2020; President, Kohl's Corporation (an omnichannel retailer) from May 2018 to October 2019 and Chief Operating Officer from November 2015 to May 2018; President, Digital and Chief Marketing Officer, Walgreen Company (a drugstore chain) from February 2014 to November 2015. |

| Thomas E. Richards | 64 | Executive Chairman of our Board of Directors since January 2019; President and Chief Executive Officer from October 2011 to December 2018; Chairman of the Board of Directors from January 2013 to December 2018. |

As of February [removed: 22, 2019,] [added: 25, 2020,] there were [removed: 19] [added: 17] holders of record of our common stock.

On February [removed: 7, 2019,] [added: 6, 2020,] we announced that our Board of Directors declared a quarterly cash dividend on our common stock of [removed: $0.295] [added: $0.380] per share.

The dividend will be paid on March [removed: 12, 2019] [added: 10, 2020] to all stockholders of record as of the close of business on February 25, [removed: 2019.][added: 2020.]

For [removed: a discussion of] [added: additional information on] our cash resources and needs and restrictions on our ability to pay dividends, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" included elsewhere in this report.

For additional [removed: discussion of] [added: information on] restrictions on our ability to pay dividends, see Note 9 (Long-Term Debt) to the accompanying Consolidated Financial Statements.

On [removed: August 3, 2017,] [added: February 7, 2019,] we announced that our Board of Directors authorized a [removed: $750 million] [added: $1 billion] increase to our share repurchase program under which we may repurchase shares of our common stock in the open market through privately negotiated or other transactions, depending on share price, market conditions and other factors.

Information relating to the Company's purchases of its common stock during the quarter ended December 31, [removed: 2018] [added: 2019] is as follows:

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

The following graph compares the cumulative total shareholder return, calculated on a dividend reinvested basis, on $100.00 invested at the closing of the market on December 31, [removed: 2013] [added: 2014] through and including the market close on December 31, [added: 2019, with the cumulative total return for the same time period of the same amount invested in the S&P 500 Index and a peer group index.]

[removed: Our peer group index for 2018 consists of the following companies: Anixter International, Inc., Arrow Electronics, Inc., Avnet, Inc., CGI Group Inc., Cognizant Technology Solutions Corporation, DXC Technology Company, Genuine Parts Company, Henry] Schein, Inc., Insight Enterprises, Inc., LKQ Corporation, Patterson Companies, Inc., SYNNEX Corporation, Tech Data Corporation, W.W. Grainger, Inc. and Wesco International, Inc. This peer group was selected based on a review of publicly available information about these companies and our determination that they met one or more of the following criteria: (i) similar size in terms of revenue and/or enterprise value (one-third to three times our revenue or enterprise value); (ii) operates in a business-to-business distribution environment; (iii) members of the technology industry; (iv) similar customers (*i.e.*, business, government, healthcare, and education); (v) companies that provide services and/or solutions; (vi) similar [removed: EBITDA] margins; (vii) comparable percentage of international sales; (viii) frequently identified as a peer by the other peer companies or Institutional Shareholder Services Inc.; or (ix) identified by the Company as a competitor.

[removed: Shareholder] [added: The cumulative total shareholder] returns over the indicated period are based on historical data and should not be considered indicative of future shareholder returns.

[removed: ][added: ]

| | | December 31, [removed: 2013] [added: 2014] | | | | December 31, [removed: 2014] [added: 2015] | | | | December 31, [removed: 2015] [added: 2016] | | | | December 31, [removed: 2016] [added: 2017] | | | | December 31, [removed: 2017] [added: 2018] | | | | December 31, [removed: 2018] [added: 2019] | | |

| October 1 through October 31, 2019 | | 0.4 | | | $ | 122.89 | | | 0.4 | | | $ | 798.0 | |

| November 1 through November 30, 2019 | | 0.5 | | | $ | 135.10 | | | 0.5 | | | $ | 731.7 | |

| December 1 through December 31, 2019 | | 0.4 | | | $ | 137.53 | | | 0.4 | | | $ | 678.7 | |

| Total | | 1.3 | | | | | | | 1.3 | | | | | |

Cumulative Total Shareholder Return

Our peer group index for 2019 consists of the following companies: Anixter International, Inc., Arrow Electronics, Inc., Avnet, Inc., CGI Group Inc., Cognizant Technology Solutions Corporation, DXC Technology Company, Genuine Parts Company, Henry

| CDW Corp | | $ | 100 | | | $ | 120 | | | $ | 151 | | | $ | 204 | | | $ | 240 | | | $ | 428 | |

| S&P 500 Index | | $ | 100 | | | $ | 99 | | | $ | 109 | | | $ | 130 | | | $ | 122 | | | $ | 157 | |

| CDW Peers | | $ | 100 | | | $ | 98 | | | $ | 122 | | | $ | 138 | | | $ | 115 | | | $ | 146 | |

On February 7, 2019, we announced that our Board of Directors authorized a $1.0 billion increase to our share repurchase program.

| October 1 through October 31, 2018 | | 1.1 | | | $ | 83.58 | | | 1.1 | | | $ | 532.4 | |

| November 1 through November 30, 2018 | | 1.1 | | | $ | 89.22 | | | 1.1 | | | $ | 433.4 | |

| December 1 through December 31, 2018 | | 1.1 | | | $ | 89.24 | | | 1.1 | | | $ | 335.8 | |

| Total | | 3.3 | | | | | | | 3.3 | | | | | |

Stock Performance Graph

2018, 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.

| CDW Corp | | $ | 100 | | | $ | 152 | | | $ | 183 | | | $ | 229 | | | $ | 308 | | | $ | 364 | |

| S&P MidCap 400 index | | $ | 100 | | | $ | 108 | | | $ | 104 | | | $ | 124 | | | $ | 142 | | | $ | 124 | |

| CDW Peers | | $ | 100 | | | $ | 109 | | | $ | 107 | | | $ | 133 | | | $ | 151 | | | $ | 127 | |

We have derived the selected financial data presented below as of December 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] and for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] from our Consolidated Financial Statements and related notes included elsewhere in this report.

The selected financial data as of December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] and for the years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] have been derived from our Consolidated Financial Statements as of and for those periods and are not included in this report.

| | | [removed: Years] [added: Year] Ended December 31, | | | | | | | | | | | | | | | | | | | [added: | |]

| (dollars in millions, except per share amounts) | | [removed: 2018] [added: 2019] | | | | [removed: 2017(1)] [added: 2018] | | | | [removed: 2016(1)] [added: 2017] | | | | [removed: 2015(2)] | [added: 2016] | | | [removed: 2014] | | [added: 2015(1)] | [added: | |]

| Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | [added: | |]

| Net sales | | $ | [removed: 16,240.5] [added: 18,032.4] | | | $ | [removed: 14,832.9] [added: 16,240.5] | | | $ | [removed: 13,672.7] [added: 14,832.9] | | | [added: |] $ | [removed: 12,988.7] [added: 13,672.7] | | | [added: |] $ | [removed: 12,074.5] [added: 12,988.7] | |

| Cost of sales | | [removed: 13,533.6] [added: 14,992.5] | | | | [removed: 12,382.7] [added: 13,533.6] | | | | [removed: 11,344.4] [added: 12,382.7] | | | | [removed: 10,872.9] | [added: 11,344.4] | | | [removed: 10,153.2] | | [added: 10,872.9] | [added: | |]

| Gross profit | | [removed: 2,706.9] [added: 3,039.9] | | | | [removed: 2,450.2] [added: 2,706.9] | | | | [removed: 2,328.3] [added: 2,450.2] | | | | [removed: 2,115.8] | [added: 2,328.3] | | | [removed: 1,921.3] | | [added: 2,115.8] | [added: | |]

| Selling and administrative expenses | | [removed: 1,537.1] [added: 1,713.1] | | | | [removed: 1,410.0] [added: 1,537.1] | | | | [removed: 1,345.4] [added: 1,410.0] | | | | [removed: 1,226.0] | [added: 1,345.4] | | | [removed: 1,110.3] | | [added: 1,226.0] | [added: | |]

| Advertising expense | | [removed: 182.5] [added: 193.2] | | | | [removed: 173.7] [added: 182.5] | | | | [removed: 162.9] [added: 173.7] | | | | [removed: 147.8] | [added: 162.9] | | | [removed: 138.0] | | [added: 147.8] | [added: | |]

| Operating income | | [removed: 987.3] [added: 1,133.6] | | | | [removed: 866.5] [added: 987.3] | | | | [removed: 820.0] [added: 866.5] | | | | [removed: 742.0] | [added: 820.0] | | | [removed: 673.0] | | [added: 742.0] | [added: | |]

| Interest expense, net | | [removed: (148.6] [added: (159.4] | | ) | | [removed: (150.5] [added: (148.6] | | ) | | [removed: (146.5] [added: (150.5] | | ) | | [removed: (159.5] | [added: (146.5] | [added: |] ) | | [removed: (197.3] | [added: (159.5] | [added: |] ) |

| Net loss on extinguishments of long-term debt | | [removed: —] [added: 22.1] | | | | [removed: (57.4] [added: —] | | [removed: )] | | [removed: (2.1] [added: 57.4] | | [removed: )] | | [removed: (24.3] [added: 2.1] | | [removed: )] | | [removed: (90.7] [added: 24.3] | | [removed: )] |

| Gain on remeasurement of equity investment | | — | | | | — | | | | — | | | | [removed: 98.1] | [added: —] | | | [removed: —] | | [added: 98.1] | [added: | |]

| Other [removed: income (expense),] [added: (expense) income,] net | | [removed: 1.8] [added: (24.5] | | [added: )] | | [removed: 2.1] [added: 1.8] | | | | [removed: 1.8] [added: (55.3] | | [added: )] | | [removed: (9.3] | [added: (0.3] | [added: |] ) | | [removed: 2.7] | [added: (33.6] | | [added: ) |]

| Income before income taxes | | [removed: 840.5] [added: 949.7] | | | | [removed: 660.7] [added: 840.5] | | | | [removed: 673.2] [added: 660.7] | | | | [removed: 647.0] | [added: 673.2] | | | [removed: 387.7] | | [added: 647.0] | [added: | |]

| Income tax expense | | [removed: (197.5] [added: (212.9] | | ) | | [removed: (137.6] [added: (197.5] | | ) | | [removed: (248.1] [added: (137.6] | | ) | | [removed: (243.9] | [added: (248.1] | [added: |] ) | | [removed: (142.8] | [added: (243.9] | [added: |] ) |

| Net income | | $ | [removed: 643.0] [added: 736.8] | | | $ | [removed: 523.1] [added: 643.0] | | | $ | [removed: 425.1] [added: 523.1] | | | [added: |] $ | [removed: 403.1] [added: 425.1] | | | [added: |] $ | [removed: 244.9] [added: 403.1] | |

| Net income per common share: | | | | | | | | | | | | | | | | | | | | | [added: | |]

| Basic | | $ | [removed: 4.26] [added: 5.08] | | | $ | [removed: 3.37] [added: 4.26] | | | $ | [removed: 2.60] [added: 3.37] | | | [added: |] $ | [removed: 2.37] [added: 2.60] | | | [added: |] $ | [removed: 1.44] [added: 2.37] | |

| Diluted | | $ | [removed: 4.19] [added: 4.99] | | | $ | [removed: 3.31] [added: 4.19] | | | $ | [removed: 2.56] [added: 3.31] | | | [added: |] $ | [removed: 2.35] [added: 2.56] | | | [added: |] $ | [removed: 1.42] [added: 2.35] | |

| Cash dividends declared per common share | | $ | [removed: 0.9250] [added: 1.2650] | | | $ | [removed: 0.6900] [added: 0.9250] | | | $ | [removed: 0.4825] [added: 0.6900] | | [added: —] | [added: |] $ | [removed: 0.3100] [added: 0.4825] | | [added: —] | [added: |] $ | [removed: 0.1950] [added: 0.3100] | |

| Balance Sheet Data (at period end): | | | | | | | | | | | | | | | | | | | | | [added: | |]

| Cash and cash equivalents | | $ | [removed: 205.8] [added: 154.0] | | | $ | [removed: 144.2] [added: 205.8] | | | $ | [removed: 263.7] [added: 144.2] | | | [added: |] $ | [removed: 37.6] [added: 263.7] | | | [added: |] $ | [removed: 344.5] [added: 37.6] | |

| Working capital | | [removed: 993.7] [added: 842.7] | | | | [removed: 874.2] [added: 993.7] | | | | [removed: 959.9] [added: 874.2] | | | | [removed: 903.5] | [added: 959.9] | | | [removed: 985.4] | | [added: 903.5] | [added: | |]

| Total assets | | [removed: 7,167.7] [added: 7,999.4] | | | | [removed: 6,966.7] [added: 7,167.7] | | | | [removed: 6,958.4] [added: 6,966.7] | | | | [removed: 6,755.3] | [added: 6,958.4] | | | [removed: 6,075.9] | | [added: 6,755.3] | [added: | |]

| Total debt and capitalized lease [removed: obligations(3)] [added: obligations(2)] | | [removed: 3,209.1] [added: 3,317.3] | | | | [removed: 3,236.7] [added: 3,209.1] | | | | [removed: 3,236.6] [added: 3,236.7] | | | | [removed: 3,262.9] | [added: 3,236.6] | | | [removed: 3,166.1] | | [added: 3,262.9] | [added: | |]

| Total stockholders' equity | | [removed: 975.2] [added: 960.3] | | | | [removed: 985.6] [added: 975.2] | | | | [removed: 1,047.9] [added: 985.6] | | | | [removed: 1,095.9] | [added: 1,047.9] | | | [removed: 936.5] | | [added: 1,095.9] | [added: | |]

| Other Financial Data: | | | | | | | | | | | | | | | | | | | | | [added: | |]

| Capital expenditures | | $ | [removed: 86.1] [added: 236.3] | | | $ | [removed: 81.1] [added: 86.1] | | | $ | [removed: 63.5] [added: 81.1] | | | [added: |] $ | [removed: 90.1] [added: 63.5] | | | [added: |] $ | [removed: 55.0] [added: 90.1] | |

| Gross profit as a percentage of Net sales | | [removed: 16.7] [added: 16.9] | | % | | [removed: 16.5] [added: 16.7] | | % | | [removed: 17.0] [added: 16.5] | | % | | [removed: 16.3] | [added: 17.0] | [added: |] % | | [removed: 15.9] | [added: 16.3] | [added: |] % |

| Non-GAAP net [removed: income(5)] [added: income(4)] | | [removed: 794.3] [added: 902.1] | | | | [removed: 605.9] [added: 794.3] | | | | [removed: 569.7] [added: 605.9] | | | | [removed: 503.5] | [added: 569.7] | | | [removed: 409.9] | | [added: 503.5] | [added: | |]

| Statement of Cash Flows Data: | | | | | | | | | | | | | | | | | | | | | [added: | |]

| Net cash provided by (used in): | | | | | | | | | | | | | | | | | | | | | [added: | |]

| Operating activities | | $ | [removed: 905.9] [added: 1,027.2] | | | $ | [removed: 777.7] [added: 905.9] | | | $ | [removed: 604.0] [added: 777.7] | | | [added: |] $ | [removed: 277.5] [added: 604.0] | | | [added: |] $ | [removed: 435.0] [added: 277.5] | |

| Investing activities | | [removed: (86.1] [added: (331.4] | | ) | | [removed: (81.1] [added: (86.1] | | ) | | [removed: (65.9] [added: (81.1] | | ) | | [removed: (354.4] | [added: (65.9] | [added: |] ) | | [removed: (164.8] | [added: (354.4] | [added: |] ) |

| Financing activities | | [removed: (754.8] [added: (749.8] | | ) | | [removed: (818.7] [added: (754.8] | | ) | | [removed: (304.6] [added: (818.7] | | ) | | [removed: (226.5] | [added: (304.6] | [added: |] ) | | [removed: (112.0] | [added: (226.5] | [added: |] ) |

| [removed: (2)] [added: (1)] | Includes the impact of consolidating five months of CDW UK's financial [removed: results for the year ended December 31, 2015.] [added: results.] |

| [removed: (3)] [added: (2)] | Excludes borrowings of [added: $430 million,] $429 million, $498 million, $580 [removed: million, $440] million and [removed: $332] [added: $440] million as of December 31, [added: 2019,] 2018, 2017, [removed: 2016, 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively, under our inventory financing agreements. We do not include these [added: 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.] |

| (4) | [removed: EBITDA is defined as consolidated] [added: Non-GAAP] net income [removed: before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. We have included a reconciliation] [added: excludes, among other things, charges related to acquisition-related intangible asset amortization, equity-based compensation, net loss on extinguishment] of [removed: EBITDA] [added: long-term debt, acquisition] and [removed: Adjusted EBITDA in the table below. Both EBITDA] [added: integration expenses,] and [removed: Adjusted EBITDA are] [added: the associated tax effects of each. Non-GAAP net income is] considered [added: a] non-GAAP financial [removed: measures.] [added: measure.] Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial position that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures. [added: We believe that Non-GAAP net income provides analysts, investors and management with helpful information regarding the underlying operating performance of our business, as this measure removes the impact of items that management believes are not reflective of underlying operating performance. Management uses this measure to evaluate period-over-period performance as management believes it provides a more comparable measure of the underlying business.] |

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| Non-GAAP operating income(3) | | $ | 1,368.4 | | | $ | 1,216.6 | | | $ | 1,106.8 | | | | $ | 1,048.3 | | | | $ | 960.9 | |

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| (3) | Non-GAAP operating income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated payroll taxes, and acquisition and integration expenses. |

Non-GAAP operating income is considered a non-GAAP financial measure.

Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial position that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP.

Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

| Operating income | | $ | 1,133.6 | | | $ | 987.3 | | | $ | 866.5 | | | $ | 820.0 | | | $ | 742.0 | |

| Other adjustments(2) | | 7.8 | | | | 5.9 | | | | 11.5 | | | | 1.9 | | | | 13.8 | | |

| Non-GAAP operating income | | $ | 1,368.4 | | | $ | 1,216.6 | | | $ | 1,106.8 | | | $ | 1,048.3 | | | $ | 960.9 | |

| (2) | Primarily includes payroll taxes on equity-based compensation, consolidation of office space, settlement of litigation matters, and acquisition and integration expenses. |

| Amortization of intangibles(2) | | 178.5 | | | | 182.7 | | | | 185.1 | | | | 187.2 | | | | 173.9 | | |

| (4) | Primarily includes expenses related to the consolidation of office space, settlement of litigation matters, the favorable resolution of a local sales tax matter, acquisition and integration expenses and the Company's 35% share of expenses related to certain equity awards for the acquisition of CDW UK. |

| Discrete tax benefit related to CDW Canada's acquisition of Scalar | (3.0 | | ) | | — | | | | — | | | | — | | | | — | | |

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| EBITDA(4) | | $ | 1,254.7 | | | $ | 1,072.1 | | | $ | 1,074.2 | | | $ | 1,033.9 | | | $ | 792.9 | |

| Adjusted EBITDA(4) | | 1,302.2 | | | | 1,186.0 | | | | 1,118.1 | | | | 1,018.5 | | | | 907.0 | | |

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| (1) | Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606. |

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borrowings in total debt because we have not in the past incurred, and in the future do not expect to incur, any interest expense or late fees under these agreements.

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Additionally, Adjusted EBITDA is a measure in the credit agreement governing our senior secured term loan facility (the "Term Loan") used to evaluate our ability to make certain investments, incur additional debt, and make restricted payments, such as dividends and share repurchases, as well as whether we are required to make additional principal prepayments on the Term Loan beyond the quarterly amortization payments.

For further details regarding the Term Loan, see Note 9 (Long-Term Debt) to the accompanying Consolidated Financial Statements.

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| Depreciation and amortization | | 265.6 | | | | 260.9 | | | | 254.5 | | | | 227.4 | | | | 207.9 | | |

| Income tax expense | | 197.5 | | | | 137.6 | | | | 248.1 | | | | 243.9 | | | | 142.8 | | |

| Interest expense, net | | 148.6 | | | | 150.5 | | | | 146.5 | | | | 159.5 | | | | 197.3 | | |

| EBITDA | | 1,254.7 | | | | 1,072.1 | | | | 1,074.2 | | | | 1,033.9 | | | | 792.9 | | |

| Net loss on extinguishments of long-term debt(3) | | — | | | | 57.4 | | | | 2.1 | | | | 24.3 | | | | 90.7 | | |

| Other adjustments(5) | | 6.8 | | | | 12.8 | | | | 2.6 | | | | 27.2 | | | | 7.0 | | |

| Adjusted EBITDA | | $ | 1,302.2 | | | $ | 1,186.0 | | | $ | 1,118.1 | | | $ | 1,018.5 | | | $ | 907.0 | |

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| (1) | Amounts for 2017 and 2016 have been adjusted to reflect the adoption of Topic 606. |

| (3) | During the years ended December 31, 2017, 2016, 2015 and 2014, we recorded net losses on extinguishments of long-term debt. The losses represented the difference between the amount paid upon extinguishment, including call premiums and expenses paid to the debt holders and agents, and the net carrying amount of the extinguished debt, adjusted for a portion of the unamortized deferred financing costs. |

| (5) | Includes other expenses such as payroll taxes on equity-based compensation for the years ended December 31, 2018 and 2017, expenses related to the acquisition of Scalar Decisions Inc. incurred during 2018, integration expenses related to CDW UK during 2017, and the reinstatement of prior year unclaimed property balances as a result of a retroactive Illinois state law change enacted during 2017. The year ended December 31, 2016 includes our share of the settlement payments received from the Dynamic Random Access Memory class actions lawsuits and the favorable resolution of a local sales tax matter, offset by integration expenses related to CDW |

UK and expenses related to the consolidation of office locations north of Chicago.

The year ended December 31, 2015 includes our 35% share of CDW UK's net loss, which entails our 35% share of an expense related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to the acquisition.

The years ended December 31, 2015 and 2014 also includes certain historical retention costs, expenses related to litigation matters, secondary-offering-related expenses and expenses related to the consolidation of office locations north of Chicago.

| (5) | Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated tax benefits, acquisition and integration expenses, and gains and losses from the extinguishments of long-term debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial position that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that non-GAAP net income provides analysts, investors and management with helpful information regarding the underlying operating performance of our business, as this measure removes the impact of items that management believes are not reflective of underlying operating performance. Management uses this measure to evaluate period-over-period performance as management believes it provides a more comparable measure of the underlying business. |

| Net income | | $ | 643.0 | | | $ | 523.1 | | | $ | 425.1 | | | $ | 403.1 | | | $ | 244.9 | |

| [Report of Independent Registered Public Accounting [removed: Firm](#sC6194EB880135C029C8ABFA521AA79AD)] [added: Firm](#s66BC32A87D1A51FAB831BA00F4BA6763)] | [removed: [53](#sC6194EB880135C029C8ABFA521AA79AD)] [added: [44](#s66BC32A87D1A51FAB831BA00F4BA6763)] |

| [Consolidated Balance Sheets as of December 31, [removed: 2018] [added: 2019] and [removed: 2017](#s1C9053B2C87E58E59ED920C6741034B2)] [added: 2018](#s20FF30D7C3F253F3873CFC160104864B)] | [removed: [54](#s1C9053B2C87E58E59ED920C6741034B2)] [added: [46](#s20FF30D7C3F253F3873CFC160104864B)] |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#sA6EC6367108E554595A5966887FA4B7D)] [added: 2017](#s653929C7F47156E59C922B7EA1E71584)] | [removed: [55](#sA6EC6367108E554595A5966887FA4B7D)] [added: [47](#s653929C7F47156E59C922B7EA1E71584)] |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#s38347b266c82462295607522d03489a6)] [added: 2017](#sCB4A48DE85D0519E967FFA0CE74E0467)] | [removed: [56](#s38347b266c82462295607522d03489a6)] [added: [48](#sCB4A48DE85D0519E967FFA0CE74E0467)] |

| [Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#s2BE3C1A504A657CAA29F534E636BFA9F)] [added: 2017](#s734CA1402B43502993A7FF6B7AB631A2)] | [removed: [57](#s2BE3C1A504A657CAA29F534E636BFA9F)] [added: [49](#s734CA1402B43502993A7FF6B7AB631A2)] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#sA83082BE99235F6C9D79ECF8B020852A)] [added: 2017](#sEFC79880F8EC548B99694EA1074651C0)] | [removed: [58](#sA83082BE99235F6C9D79ECF8B020852A)] [added: [50](#sEFC79880F8EC548B99694EA1074651C0)] |

| [Notes to Consolidated Financial [removed: Statements](#sF6230F00876F5605A9428493DED43E6C)] [added: Statements](#sD0FD58125FF652319D753D6B0CF45BE4)] | [removed: [59](#sF6230F00876F5605A9428493DED43E6C)] [added: [51](#sD0FD58125FF652319D753D6B0CF45BE4)] |

We have audited the accompanying consolidated balance sheets of CDW Corporation and subsidiaries (the Company) as of December 31, [removed: 2018,] [added: 2019] and [removed: 2017,] [added: 2018,] the related [removed: statements of] consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] and the related notes and financial statement schedule listed in the Index at Item 15(a) (2) (collectively referred to as the [removed: "consolidated] [added: “consolidated] financial [removed: statements").][added: statements“).]

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] in conformity with US generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 [removed: framework),] [added: framework)] and our report dated February [removed: 27, 2019] [added: 28, 2020] expressed an unqualified opinion thereon.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the [removed: US] [added: U.S.] federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Such procedures [removed: include] [added: included] examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

| CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS [removed: (in] [added: (dollars in] millions, except [removed: per-share] [added: per share] amounts) | | | | | | | |

| | [removed: December 31,] [added: December 31,] | | | | | | |

| | [added: 2019 | | | |] 2018 | | | | 2017 | | |

| Assets | | | | | [removed: (as adjusted)] | | |

| Cash and cash equivalents | $ | [removed: 205.8] [added: 154.0] | | | $ | [removed: 144.2] [added: 205.8] | |

| Accounts receivable, net of allowance for doubtful accounts of [removed: $7.0] [added: $7.9] and [removed: $6.2,] [added: $7.0,] respectively | [removed: 2,671.2] [added: 3,002.2] | | | | [removed: 2,329.3] [added: 2,671.2] | | |

| Merchandise inventory | [removed: 454.3] [added: 611.2] | | | | [removed: 411.5] [added: 454.3] | | |

| Miscellaneous receivables | [removed: 316.4] [added: 395.1] | | | | [removed: 343.0] [added: 316.4] | | |

| Prepaid expenses and other | [removed: 149.1] [added: 171.6] | | | | [removed: 168.3] [added: 149.1] | | |

| Total current assets | [removed: 3,796.8] [added: 4,334.1] | | | | [removed: 3,396.3] [added: 3,796.8] | | |

| Property and equipment, net | [removed: 156.1] [added: 363.1] | | | | [removed: 161.1] [added: 156.1] | | |

| Goodwill | [removed: 2,462.8] [added: 2,553.0] | | | | [removed: 2,479.6] [added: 2,462.8] | | |

| Other intangible assets, net | [removed: 712.2] [added: 594.1] | | | | [removed: 897.0] [added: 712.2] | | |

| Other assets | [removed: 39.8] [added: 23.3] | | | | [removed: 32.7] [added: 39.8] | | |

| Total Assets | $ | [removed: 7,167.7] [added: 7,999.4] | | | $ | [removed: 6,966.7] [added: 7,167.7] | |

| Accounts payable-trade | $ | [removed: 1,577.1] [added: 1,835.0] | | | $ | [removed: 1,317.7] [added: 1,577.1] | |

| Accounts payable-inventory financing | [removed: 429.3] [added: 429.9] | | | | [removed: 498.0] [added: 429.3] | | |

| Current maturities of long-term debt | [removed: 25.3] [added: 34.1] | | | | [removed: 25.5] [added: 25.3] | | |

| Contract liabilities | [removed: 178.3] [added: 252.2] | | | | [removed: 158.8] [added: 178.3] | | |

| Compensation | [removed: 186.4] [added: 212.3] | | | | [removed: 129.5] [added: 186.4] | | |

| Advertising | [removed: 119.2] [added: 147.9] | | | | [removed: 89.2] [added: 119.2] | | |

| Sales and income taxes | [removed: 55.5] [added: 88.6] | | | | [removed: 60.0] [added: 55.5] | | |