CDW (CDW) 10-K risk factor changes: FY2020 vs FY2019

Weak economic conditions generally, sustained uncertainty about global economic and political conditions, government spending cuts and the impact of new government [removed: policies,] [added: policies (including the introduction of new] or [added: increased taxes), or] a tightening of credit markets, [added: including as a result of the COVID-19 pandemic,] could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows.

For example, there continues to be [removed: substantial] uncertainty regarding the economic [removed: impact] [added: and other impacts] of the UK's [added: phased] exit from the European Union [removed: ("EU"),] [added: ("EU") in 2020,] referred to as "Brexit".

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

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 [removed: customers following the transition period.][added: customers.]

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 [removed: levels] [added: levels,] could cause our 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.

[added: 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 level of indebtedness.

Although we purchase from a diverse vendor base, in [removed: 2019,] [added: 2020,] 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, HP Inc., Lenovo and Microsoft, whether purchased directly from these vendor partners or from a wholesale distributor, represented approximately 60% of our [removed: 2019] [added: 2020] consolidated Net sales.

Sales of products manufactured by [removed: Cisco and] Dell EMC [added: and HP Inc.] represented approximately 25% of our [removed: 2019] [added: 2020] consolidated Net sales.

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

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

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

[removed: | • |] [added: -] communications service providers, such as AT&T, CenturyLink and Verizon; [removed: |]

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

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

[removed: | • |] [added: -] retailers (including their e-commerce activities), such as Office Depot and Staples. [removed: |]

[removed: If such a reduction in prices] occurs and we are unable to attract new customers and sell increased quantities of products, our sales growth and profitability could be adversely affected.

Manufacturing interruptions or delays, including as a result of the financial instability or bankruptcy of manufacturers, significant labor disputes such as strikes, natural disasters, [added: political or social unrest,] pandemics [added: (such as the COVID-19 pandemic)] or other public health crises, [removed: such as the coronavirus,] or other adverse occurrences affecting any of our suppliers' facilities, could disrupt our supply chain.

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 [removed: demand, amongst] [added: demand (including as a result of shortages of product components), among] other reasons.

[removed: | • |] [added: -] the imposition of additional trade law provisions or regulations, including the adoption or expansion of trade restrictions; [removed: |]

[removed: | • |] [added: -] the imposition of additional duties, tariffs and other charges on imports and exports, including any resulting retaliatory tariffs or charges and any reductions in the production of products subject to such tariffs and charges; [removed: |]

[removed: | • |] [added: -] foreign currency fluctuations; and [removed: |]

[removed: | • |] [added: -] restrictions on the transfer of funds. [removed: |]

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

[removed: | • |] [added: -] conduct business with our customers, including delivering services and solutions to them; [removed: |]

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

[removed: | • |] [added: -] support planned growth in services and solutions and continued evolution of the business; [removed: |]

[removed: | • |] [added: -] purchase, sell, ship and invoice our hardware and software products and provide and invoice our services efficiently and on a timely basis; and [removed: |]

[removed: | • |] [added: -] maintain our cost-efficient operating model while scaling our business. [removed: |]

We have privacy and data security [removed: policies] [added: policies, practices and controls] in place that are designed to prevent security breaches; however, as newer technologies evolve, and the portfolio of the service providers we share confidential information [removed: with grows,] [added: with, or from which] we [added: acquire software and/or hardware for our own internal use, expands as our business grows and the complexity of our business overall increases, and as more business activities have shifted online due to the COVID-19 pandemic, we] could be exposed to increased risks from breaches in security, including those from human error, negligence or mismanagement or from illegal or fraudulent acts, such as cyberattacks.

Breaches in security could expose us, our supply chain, our customers or other individuals to significant [removed: disruptions,] [added: disruptions and] a risk of public disclosure, loss or misuse of this information.

Moreover, media or other reports of perceived vulnerabilities in our network security or perceived lack of security within our environment, even if inaccurate, could [added: materially] adversely impact our reputation and [removed: materially impact our] business.

[added: 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.

[removed: We also offer] certain services, such as implementation and installation services and repair services, to our customers through various third-party service providers engaged to perform these services on our behalf.

If we or our third-party service providers fail to provide high-quality services to our customers or such services result in [removed: a] [added: an unplanned] disruption of our customers' businesses, this could, among other things, result in legal claims and proceedings and liability for us.

If the warehouse and distribution equipment [added: or operations] at one of our distribution centers were to be seriously damaged [added: or disrupted] by a natural disaster or other adverse occurrence, [added: including disruption related to political or social unrest,] we could utilize another distribution center or third-party distributors to ship products to our customers.

If we are unable to pass on to our customers future increases in the cost of commercial delivery services (including those that may result from an increase in fuel or personnel [removed: costs),] [added: costs or a need to use higher cost delivery channels during periods of increased demand),] our profitability could be adversely affected.

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

We extend credit to our customers for a significant portion of our [removed: Net] sales, typically on 30-day payment terms.

We are subject to the risk that our customers may not pay for the products they have purchased, or may pay at a slower rate than we have historically [removed: experienced.][added: experienced, or may seek extended payment terms.]

Business and Operational Risks

The outbreak of the novel coronavirus ("COVID-19") pandemic has adversely impacted and could continue to adversely impact our business and results of operations and could also adversely impact our cash flows, financial condition and liquidity.

The global spread of COVID-19 continues to create significant macroeconomic uncertainty, volatility and disruption.

Many governments and health authorities have implemented recommendations or mandates intended to slow the further spread of the disease, such as shelter-in-place orders, resulting in the temporary closure of schools and non-essential businesses, or social distancing measures, resulting in modified operations of various businesses including ours, and these measures may remain in place for a significant period of time.

While some of these restrictions have been lifted or eased in certain jurisdictions, the resurgence of COVID-19 in other jurisdictions has slowed, and in some cases reversed, the reopening process.

We could experience disruptions, including as a result of resurgences of COVID-19, that prevent us from meeting the demands of our

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

customers, such as product constraints from our vendor partners and wholesale distributors and other disruptions to our supply chain, disruptions in or restrictions on the ability of our coworkers to work effectively, temporary closures of our distribution facilities, modifications in the operation of facilities that remain open and disruptions of commercial delivery services.

The impact of COVID-19 and measures implemented to slow the spread have caused and could continue to cause delay in, or limit the ability of, our customers to make timely payments to us and could materially increase our costs.

In addition, the pandemic has resulted in a widespread health crisis that has adversely affected the economies and financial markets of many countries, including the US, the UK and Canada.

During the COVID-19 pandemic and even after it has subsided, we may experience adverse impacts to our business as a result of the pandemic’s global economic impact, including any recession, economic downturn or volatility, government spending cuts, tightening of credit markets or increased unemployment that has occurred or may occur in the future, which could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices.

Individually and collectively, the consequences of the COVID-19 pandemic have adversely impacted and could continue to adversely impact our business and results of operations and could also adversely impact our cash flows, financial condition and liquidity.

The extent to which the COVID-19 pandemic continues to impact our business, results of operations, cash flows, financial condition and liquidity will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration, the severity and further spread of the outbreak, future resurgences and reimplementation of closures, the availability, efficacy and acceptance of a vaccine, and actions taken to contain the virus, and the effectiveness of these actions and how quickly and to what extent normal economic and operating conditions can resume and be sustained.

The COVID-19 pandemic has and may continue to have the effect of heightening many of the other risks described in this "Risk Factors" section.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

If such a reduction in prices

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

We also offer

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

Macroeconomic and Industry Risks

An agreement was reached between the UK and the EU in relation to their future relationship in certain areas, which included a new trade and cooperation agreement relating principally to the free trade in goods (the "EU-UK Trade and Cooperation Agreement").

While the EU-UK Trade and Cooperation Agreement provides clarity in respect of the free trade in goods between the UK and the EU, there remain uncertainties related to the stability and effects of the new relationship.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

Legal and Regulatory Risks

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

principal, premium, if any, and interest on our indebtedness.

However, for US dollar LIBOR, it now appears that the relevant date may be deferred to June 30, 2023 for the most common tenors (overnight and one, three, six and 12 months).

As to those tenors, the LIBOR administrator has published a consultation regarding its intention to cease publication of US dollar LIBOR as of June 30, 2023 (instead of December 31, 2021, as previously expected).

Moreover, the LIBOR administrator’s consultation also relates to the LIBOR administrator’s intention to cease publication of non-US dollar LIBOR after 2021.

Although the foregoing may provide some sense of timing, there is no assurance that LIBOR, of any particular currency or tenor, will continue to be published until any

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

particular date.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

We expect to continue to pay a cash dividend on our common stock.

Risks Related to Our Business

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.

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

| | |

| --- | --- |

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

In addition, the adoption

of rising interest rates or, in the case of public sector customers, during periods of budget constraints.

reserves) (up to 30% of such eligible accounts receivable which can consist of federal government accounts receivable) plus the lesser of (i) 75% of CDW LLC and its subsidiary guarantors' eligible inventory (valued at cost and net of inventory reserves) and (ii) the product of 85% multiplied by the net orderly liquidation value percentage multiplied by eligible inventory (valued at cost and net of inventory reserves), less reserves (other than accounts reserves and inventory reserves).

The first publication of SOFR was released in April 2018.

| • | establish a classified Board of Directors until the 2021 annual meeting of stockholders, so that not all members of our Board of Directors are elected at one time; |

We expect to continue to pay a cash dividend on our common stock, currently at the rate of $0.380 per share per quarter, or $1.52 per share per annum.

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

Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutions [removed: such as mobility, security,] [added: and services that include on-premise, hybrid and cloud capabilities across] data center [removed: optimization, cloud computing, virtualization] and [removed: collaboration.][added: networking, digital workspace, security and virtualization.]

We are [removed: technology "agnostic,"] [added: vendor, technology, and consumption model "agnostic",] with a 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 approximately [removed: 6,800] [added: 7,000] customer-facing coworkers, including sellers, highly-skilled technology specialists and advanced service delivery engineers.

For a discussion of results for the year ended December 31, [removed: 2017,] [added: 2019,] see "Item 7.

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, [removed: 2018,] [added: 2019,] filed with the Securities and Exchange Commission on February [removed: 27, 2019.][added: 28, 2020.]

[removed: | • |] [added: -] Changes in spending policies, budget priorities and funding levels are a key factor influencing the purchasing levels of [removed: government, healthcare] [added: Government, Healthcare] and [removed: education] [added: Education] customers. [removed: |]

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

[removed: In addition to Non-GAAP operating income and Non-GAAP operating income margin, we] [added: We] believe that the most important [removed: financial and non-financial] [added: of these] measures and ratios include average daily sales, gross margin, operating margin, Net income, Non-GAAP [added: operating income, Non-GAAP operating] income [added: margin, Non-GAAP income] before income taxes, Non-GAAP net income, Net [added: sales growth on a constant currency basis, Net] income per diluted share, Non-GAAP net income per diluted share, free cash flow, return on working capital, Cash and cash equivalents, net working capital, cash conversion cycle, debt levels including available credit, sales per coworker and coworker [removed: turnover.]

In this report, we discuss Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP income before income [removed: taxes and] [added: taxes,] Non-GAAP net [removed: income,] [added: income and Net Sales growth on a constant currency basis,] which are non-GAAP financial measures.

For the definitions of Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP income before income [removed: taxes and] [added: taxes,] Non-GAAP net income and [added: Net sales growth on a constant currency basis and] reconciliations to the most directly comparable [added: US] GAAP measure, see "Results of Operations - Non-GAAP Financial Measure Reconciliations."

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

| (dollars in millions) | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | [added: | | | 2018 | | |]

| Net sales | [added: | |] $ | [removed: 18,032.4] [added: 18,467.5] | | | [added: | |] $ | [removed: 16,240.5] [added: 18,032.4] | | | [added: | |] $ | [removed: 14,832.9] [added: 16,240.5] | |

| Gross profit | [removed: 3,039.9] | | [added: 3,210.1] | | [removed: 2,706.9] | | | | [removed: 2,450.2] [added: 3,039.9] | | | [added: | | | 2,706.9 | | |]

| Operating income | [removed: 1,133.6] | | [added: 1,179.2] | | [removed: 987.3] | | | | [removed: 866.5] [added: 1,133.6] | | | [added: | | | 987.3 | | |]

| Net income | [removed: 736.8] | | [added: 788.5] | | [removed: 643.0] | | | | [removed: 523.1] [added: 736.8] | | | [added: | | | 643.0 | | |]

| Non-GAAP operating income | [removed: 1,368.4] | | [added: 1,404.6] | | [removed: 1,216.6] | | | | [removed: 1,106.8] [added: 1,368.4] | | | [added: | | | 1,216.6 | | |]

| Non-GAAP net income | [removed: 902.1] | | [added: 954.4] | | [removed: 794.3] | | | | [removed: 605.9] [added: 902.1] | | | [added: | | | 794.3 | | |]

| Average daily sales(1) | [removed: 71.0] | | [added: 72.7] | | [removed: 63.9] | | | | [removed: 58.4] [added: 71.0] | | | [added: | | | 63.9 | | |]

| Net debt(2) | [removed: 3,163.3] | | [added: 2,517.0] | | [removed: 3,002.8] | | | | [removed: 3,091.3] [added: 3,163.3] | | | [added: | | | 3,002.8 | | |]

| Cash conversion cycle (in days)(3) | [removed: 18] | | [added: 17] | | [removed: 19] | | | | [added: 18 | | | | | |] 19 | | |

[removed: |] (1) [removed: |] There were 254 selling days for each of the years ended December 31, [added: 2020,] 2019, [removed: 2018] and [removed: 2017. |][added: 2018.]

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

[removed: |] (3) [removed: |] 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: |]

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

| | | [added: | | | |] Dollars in Millions | | | | [added: | |] Percentage of Net Sales | | | [added: | | |] Dollars in Millions | | | | [added: | |] Percentage of Net Sales | | [added: |]

| Net sales | | [added: | | | |] $ | [removed: 18,032.4] [added: 18,467.5] | | | [added: | |] 100.0 | [added: |] % | | [added: | |] $ | [removed: 16,240.5] [added: 18,032.4] | | | [added: | |] 100.0 | [added: |] % |

| Cost of sales | | [removed: 14,992.5] | | | | [removed: 83.1] [added: 15,257.4] | | | [removed: 13,533.6] | | | [added: 82.6] | [removed: 83.3] | | [added: | | | 14,992.5 | | | | | | 83.1 | | |]

| Gross profit | | [removed: 3,039.9] | | | | [removed: 16.9] [added: 3,210.1] | | | [removed: 2,706.9] | | | [added: 17.4] | [removed: 16.7] | | [added: | | | 3,039.9 | | | | | | 16.9 | | |]

| Operating income | | [removed: 1,133.6] | | | | [removed: 6.3] [added: 1,179.2] | | | [removed: 987.3] | | | [added: 6.4] | [removed: 6.1] | | [added: | | | 1,133.6 | | | | | | 6.3 | | |]

| Interest expense, net | | [removed: (159.4] | | [removed: )] | | [removed: (0.9] [added: (154.9)] | [removed: )] | | [removed: (148.6] | | [removed: )] | [added: (0.8)] | [removed: (0.9] | [removed: )] | [added: | | | (159.4) | | | | | | (0.9) | | |]

| Other [removed: (expense) income,] [added: expense,] net | | [removed: (24.5] | | [removed: )] | | [removed: (0.1] [added: (22.0)] | [removed: )] | | [removed: 1.8] | | | [added: (0.1)] | [removed: —] | | [added: | | | (24.5) | | | | | | (0.1) | | |]

| Income before income taxes | | [removed: 949.7] | | | | [removed: 5.3] [added: 1,002.3] | | | [removed: 840.5] | | | [added: 5.4] | [removed: 5.2] | | [added: | | | 949.7 | | | | | | 5.3 | | |]

| Income tax expense | | [removed: (212.9] | | [removed: )] | | [removed: (1.2] [added: (213.8)] | [removed: )] | | [removed: (197.5] | | [removed: )] | [added: (1.2)] | [removed: (1.2] | [removed: )] | [added: | | | (212.9) | | | | | | (1.2) | | |]

| Net income | | [added: | | | |] $ | [removed: 736.8] [added: 788.5] | | | [removed: 4.1] | [added: | 4.3 | |] % | | [added: | |] $ | [removed: 643.0] [added: 736.8] | | | [removed: 4.0] | [added: | 4.1 | |] % |

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

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

| Public: | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | |]

| Total Net sales | | [added: | | | |] $ | [removed: 18,032.4] [added: 18,467.5] | | | [added: | |] 100.0 | [added: |] % | | [added: | |] $ | [removed: 16,240.5] [added: 18,032.4] | | | [added: | |] 100.0 | [added: |] % | | [added: | |] $ | [removed: 1,791.9] [added: 435.1] | | | [removed: 11.0] | [added: | 2.4 | |] % |

- General economic conditions are a key factor affecting our results as they impact our customers' willingness to spend on information technology.

This is particularly the case for our Corporate and Small Business customers, as their purchases tend to reflect confidence in their business prospects, which are driven by their discrete perceptions of business and general economic conditions.

Additionally, changes in trade policy and product constraints from suppliers could have an adverse impact on our business.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

- The global spread of the novel coronavirus ("COVID-19") pandemic continues to create significant macroeconomic uncertainty, volatility and disruption.

The extent to which the COVID-19 pandemic continues to impact our business, results of operations, cash flows, financial condition and liquidity will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration, severity and further spread of the outbreak, future resurgences and reimplementation of closures, the availability, efficacy and acceptance of a vaccine, and the actions taken to contain the virus, and the effectiveness of these actions and how quickly and to what extent normal economic and operating conditions can resume and be sustained.

We have mobilized our resources to help ensure the well-being and safety of our coworkers, business continuity, a strong capital position and adequate liquidity.

Our efforts have included:

- Continued focus on the well-being and safety of our coworkers, leveraging standing crisis management protocols and following guidelines from public health authorities and state and local governments.

During 2020, we implemented precautions to help keep our coworkers healthy and safe, including activating a cross-functional response team led by senior leadership, moving to remote work for our office coworkers, and implementing safety protocols at our distribution centers, including social distancing measures, segmented shifts, additional personal protective equipment, enhanced facility cleanings, and temperature screening for anyone entering the facilities.

All distribution and configuration centers are considered essential businesses and continue to be operational.

Our office coworkers continue to work remotely.

- Remote enablement, operations continuity, and security are customer focus areas to manage remote environments at scale and to prepare to be remote longer.

Customers are focused on initiatives to reduce costs, optimize resources, and leverage technology for better customer and employee experiences through digital transformation.

We have orchestrated solutions by leveraging client devices, accessories, collaboration tools, security, software and hybrid and cloud offerings to help customers build these capabilities and achieve their objectives.

- Increasing our provision for credit losses during the year ended December 31, 2020 as a result of the expected economic impact of the COVID-19 pandemic.

We continue to monitor cash collections and credit limits of our customers to manage the risk of uncollectible receivables.

- Closely monitoring our cost structure and liquidity position relative to the overall demand environment.

We took measures to enhance liquidity, including completing a $600 million senior notes issuance in April 2020, leveraging the lower interest rate environment by refinancing one of our higher interest rate senior notes in August 2020, implementing cost savings initiatives and suspending temporarily share repurchases from March 2020 through October 2020.

Given the COVID-19 pandemic, Education customers have prioritized their budgets towards IT spending while Healthcare customer budgets have been pressured.

As the duration and ongoing economic impacts of the COVID-19 pandemic remain uncertain, current and future budget priorities and funding levels for Government, Healthcare and Education customers may be adversely affected.

- 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.

Technology trends could also change as customers consider the impact of the COVID-19 pandemic on their operations.

- The new UK/European Union ("EU") trade deal due to the UK’s exit from the EU (referred to as "Brexit") that came into effect on January 1, 2021 eased concerns over restrictions of imports and exports, but it increased regulatory complexities that may adversely impact our business.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

turnover.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

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

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

| | | | | | | 2020 | | | | | | | | | | | | 2019 | | | | | | | | |

| Selling and administrative expenses | | | | | | 2,030.9 | | | | | | 11.0 | | | | | | 1,906.3 | | | | | | 10.6 | | |

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

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

| | | | | | | 2020 | | | | | | | | | | | | 2019 | | | | | | | | | | | | | | | | | | | | |

| Corporate | | | | | | $ | 6,846.0 | | | | | 37.1 | | % | | | | $ | 7,499.0 | | | | | 41.6 | | % | | | | $ | (653.0) | | | | | (8.7) | | % |

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

| Small Business | | | | | | 1,397.1 | | | | | | 7.6 | | | | | | 1,510.3 | | | | | | 8.4 | | | | | | (113.2) | | | | | | (7.5) | | |

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

| Government | | | | | | 2,978.5 | | | | | | 16.1 | | | | | | 2,519.3 | | | | | | 14.0 | | | | | | 459.2 | | | | | | 18.2 | | |

| | |

| --- | --- |

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

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.

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

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

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

| Selling and administrative expenses | | 1,713.1 | | | | 9.5 | | | 1,537.1 | | | | 9.5 | |

| Advertising expense | | 193.2 | | | | 1.1 | | | 182.5 | | | | 1.1 | |

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

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

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

| Corporate | | $ | 7,499.0 | | | 41.6 | % | | $ | 6,842.5 | | | 42.1 | % | | $ | 656.5 | | | 9.6 | % |

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

| 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 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.

Growth was primarily driven by client devices and software.

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

Net sales to Healthcare customers increased 11.8% primarily driven by client devices and software.

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.

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

As a percentage of total Net sales, Selling and administrative expenses remained flat at 9.5% for the years ended December 31, 2019 and 2018.

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 | % |

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

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

As of December 31, [removed: 2019,] [added: 2020,] we have [added: an] interest rate cap [removed: agreements] [added: agreement] in effect with a [removed: combined] notional amount of $1.4 billion.

For additional information, see Note [removed: 8] [added: 9] (Financial Instruments) to the accompanying Consolidated Financial Statements.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

CDW Corporation (together with its subsidiaries, the "Company," "CDW" or "we"), a Fortune 500 company and member of the S&P 500 Index, is a [removed: market-leading] [added: leading multi-brand] provider of [removed: 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 broad array of offerings ranges from discrete hardware and software products to integrated IT solutions [removed: such as mobility, security,] [added: and services that include on-premise, hybrid and cloud capabilities across] data center [removed: optimization, cloud computing, virtualization] and [removed: collaboration.][added: networking, digital workspace, security and virtualization.]

We are [added: vendor,] technology [removed: "agnostic,"] [added: and consumption model "agnostic",] with a 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 approximately [removed: 6,800] [added: 7,000] customer-facing coworkers, including sellers, highly-skilled technology specialists and advanced service delivery engineers.

According to the International Data Corporation ("IDC"), the total US, UK and Canadian IT market generated approximately $1 trillion in sales in [removed: 2019.][added: 2020.]

For the year ended December 31, [removed: 2019,] [added: 2020,] we estimate that our total Net sales of [removed: $18] [added: $18.5] 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 serve, fueled by new technologies, including [added: hybrid and] cloud computing, virtualization and mobility as well as growing end-user demand for security, efficiency and productivity.

| Our value proposition to our customers | | [added: | | | |] Our value proposition to our vendor partners | | [added: | | | |]

| ● | [added: | |] Broad selection of products and multi-branded IT solutions | [added: | |] ● | [added: | |] Access to over 250,000 customers | [added: | |]

| ● | [added: | |] Value-added services with integration capabilities | [added: | |] ● | [added: | |] Large and established customer channels | [added: | |]

| ● | [added: | |] Highly-skilled specialists and engineers | [added: | |] ● | [added: | |] Strong distribution and implementation capabilities | [added: | |]

| ● | [added: | |] Solutions across IT lifecycle | [added: | |] ● | [added: | |] Customer relationships driving insight into technology roadmaps | [added: | |]

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

[added: 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 [removed: over $1.5] [added: $1.4] billion [added: or greater] in Net sales in [removed: 2019.][added: 2020.]

Net sales to customers in the UK and Canada combined generated [removed: $2.2] [added: $2.1] billion in [removed: 2019.][added: 2020.]

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, [added: Nutanix, Palo Alto Networks, Poly,] Samsung, and VMware, as well as from emerging technology companies [removed: such as Cohesity, Crowdstrike, Proofpoint, Pure Storage, Rubrik, ServiceNow, and Silver Peak.][added: to expand our portfolio.]

In [removed: 2019,] [added: 2020,] we generated over $1.0 billion of Net sales from each of six vendor partners and over $100 million of Net sales from each of [removed: eleven] [added: fourteen] other vendor partners.

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

Each vendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such [removed: as,] [added: as] purchase or sales rebates and cooperative advertising reimbursements.

For our US [removed: operations,] [added: operations in 2020,] 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 [removed: distributors for the year ended December 31, 2019.][added: distributors.]

Purchases from our three largest wholesale distributors, Ingram Micro, SYNNEX and Tech Data, were each approximately 10% of total US purchases in [removed: 2019.][added: 2020.]

[removed: We] [added: Leveraging our distribution and logistics capabilities, we handle and] ship over 40 million units annually on an aggregate basis from our distribution centers.

We believe our customers increasingly view technology purchases as integrated solutions rather than discrete product and [removed: service] [added: services] categories.

We estimate that more than 40% of our Net sales in [removed: 2019] [added: 2020] in the US came from sales of product categories and services typically associated with solutions.

Our services include [removed: warranties,] [added: advisory and design, software development, implementation,] managed [removed: services, consulting design] [added: services] and [removed: implementation.][added: warranties.]

We provide [added: customers with cloud solutions and services through] public cloud solutions, which reside off customer premises on a public (shared) infrastructure, [removed: and] private cloud solutions, which reside on customer [removed: premises.][added: premises, and hybrid cloud solutions that deliver the benefits of both public and private solutions.]

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

[removed: Dedicated Cloud Client Executives] [added: Service delivery engineers] work with our customers to [removed: architect] [added: design] cloud solutions meeting their organizational, technology and financial objectives.

We offer a broad portfolio of integrated solutions that include the following [removed: on] [added: on-premise, hybrid] and [removed: off-premise] [added: cloud] capabilities:

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

[removed: | • | *Security*: We assess our customers' security needs and provide them with risk mitigation tools and services. Product design, architecture and implementation] [added: Our customer solutions] can take the form of hardware, software or Software as a [removed: Service. These tools and services are provided] [added: Service] 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. [removed: Security consulting engagements include security assessment, policy and procedure gap analysis, security roadmaps and health checks. |]

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

| | | [removed: 2019] | | | | [added: 2020] | | | [removed: 2018(1)] | | | | | | | [removed: 2017(1)] | | [added: 2019(1)] | | | | [added: | | | | | | | | 2018(1) | | | | | | | | |]

| | | [added: | | | |] Dollars in Millions | | | | [added: | |] Percentage of Total Net Sales | | | [added: | | |] Dollars in Millions | | | | [added: | |] Percentage of Total Net Sales | | | [added: | | |] Dollars in Millions | | | | [added: | |] Percentage of Total Net Sales | | [added: |]

| Enterprise and Data Storage (Including Drives) | | [removed: 1,146.0] | | | | [removed: 6.4] [added: 947.4] | | | [removed: 1,102.5] | | | [added: 5.1] | [removed: 6.8] | | | [removed: 1,070.2] | | [added: 1,147.6] | | [removed: 7.2] | | [added: | | 6.4 | | | | | | 1,102.4 | | | | | | 6.8 | | |]

| Total Net sales | | [added: | | | |] $ | [removed: 18,032.4] [added: 18,467.5] | | | [added: | |] 100.0 | [added: |] % | | [added: | |] $ | [removed: 16,240.5] [added: 18,032.4] | | | [added: | |] 100.0 | [added: |] % | | [added: | |] $ | [removed: 14,832.9] [added: 16,240.5] | | | [added: | |] 100.0 | [added: |] % |

[removed: | (1) | Amounts] [added: (1)Amounts] have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, [removed: 2019. |][added: 2020.]

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

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

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

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

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

These arrangements represented approximately 50% of total North America Net sales in 2020.

Electronic delivery for software licenses are approximately 15% of total North America Net sales in 2020.

We believe that our logistics and configuration capabilities delivered by our highly skilled and certified team enable us to customize technology for our customers to meet their unique needs.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

- *Data Center and Networking:* We assess our customers application infrastructure need, design flexible, resilient and efficient solutions and manage the solution throughout its lifecycle.

- *Digital Workspace:* We build end-to-end solutions that deliver access to applications that improve our customers' productivity regardless of device or location.

We connect our customers' physical devices, including laptops, desktops, IP Phones, mobile devices and print systems.

We utilize collaboration solutions to unite applications via the integration of products that facilitate the use of multiple enterprise communication methods including email, persistent chat, social media, voice and video.

We also host cloud-based collaboration solutions.

Our solutions provide the tools that allow

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

our customers' employees to share knowledge, ideas and information among each other and with clients and partners effectively, securely and quickly.

- *Security*: We assess our customers' security needs and provide them with tools and services to help effectively manage risk.

We are a security solutions integrator that combines our expertise in design, solution architecture and implementation services.

Security consulting engagements include security assessment, policy and procedure gap analysis, security roadmaps and health checks.

- *Virtualization*: We design and implement server, storage and desktop virtualization solutions.

Virtualization enables our customers to efficiently utilize infrastructure resources by running multiple, independent, virtual operating systems or containers on a single computer and multiple virtual compute instances simultaneously on a single server.

Virtualization also can separate a desktop environment and associated application software from the hardware device that is used to access it, and provides employees with remote desktop access.

Our specialists assist customers with the steps of implementing virtualization solutions, including evaluating network environments, software tools and development processes, deploying shared storage options and licensing platform software.

- *Services*: We help organizations design, orchestrate and manage technology for their unique needs.

Our offerings are designed to highlight our expertise in the most critical technology areas for our customers.

Our service delivery engineers have expertise which include integrated cloud, collaboration, data center, mobility and security business technology, from the physical to the application layer.

We leverage best-in-class partner technology platforms to seamlessly architect and manage disparate IT platforms into integrated business technology solutions.

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

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

| Notebooks/Mobile Devices | | | | | | $ | 5,486.2 | | | | | 29.7 | | % | | | | $ | 4,344.9 | | | | | 24.1 | | % | | | | $ | 3,843.3 | | | | | 23.7 | | % |

| Netcomm Products | | | | | | 1,955.0 | | | | | | 10.6 | | | | | | 2,189.1 | | | | | | 12.1 | | | | | | 2,116.6 | | | | | | 13.0 | | |

| Desktops | | | | | | 1,132.4 | | | | | | 6.1 | | | | | | 1,547.3 | | | | | | 8.6 | | | | | | 1,254.9 | | | | | | 7.7 | | |

| Video | | | | | | 1,190.8 | | | | | | 6.4 | | | | | | 1,272.9 | | | | | | 7.1 | | | | | | 1,184.1 | | | | | | 7.3 | | |

| Other Hardware | | | | | | 4,121.6 | | | | | | 22.3 | | | | | | 3,980.4 | | | | | | 22.1 | | | | | | 3,630.4 | | | | | | 22.4 | | |

| Total Hardware | | | | | | 14,833.4 | | | | | | 80.2 | | | | | | 14,482.2 | | | | | | 80.4 | | | | | | 13,131.7 | | | | | | 80.9 | | |

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

| Software(2) | | | | | | 2,581.0 | | | | | | 14.0 | | | | | | 2,585.0 | | | | | | 14.3 | | | | | | 2,299.1 | | | | | | 14.2 | | |

| Services(2) | | | | | | 913.9 | | | | | | 4.9 | | | | | | 840.9 | | | | | | 4.7 | | | | | | 695.9 | | | | | | 4.3 | | |

| Other(3) | | | | | | 139.2 | | | | | | 0.9 | | | | | | 124.3 | | | | | | 0.6 | | | | | | 113.8 | | | | | | 0.6 | | |

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

Human Capital Management

We do not manufacture products.

| | | | |

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

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

We also offer hybrid cloud solutions that deliver the benefits of both public and private solutions.

| | |

| --- | --- |

| • | *Digital Workspace:* We build end-to-end solutions that deliver access to applications that improve our customers' productivity regardless of device or location. We connect our customers' physical devices, including laptops, desktops, IP Phones, mobile devices and print systems. We utilize collaboration solutions to unite applications via the integration of products that facilitate the use of multiple enterprise communication methods including email, persistent chat, social media, voice and video. We also host cloud-based collaboration solutions. Our solutions provide the tools that allow our customers' employees to share knowledge, ideas and information among each other and with clients and partners effectively, securely and quickly. |

| • | *Virtualization*: We design and implement server, storage and desktop virtualization solutions. Virtualization enables our customers to efficiently utilize hardware resources by running multiple, independent, virtual operating systems on a single computer and multiple virtual servers simultaneously on a single server. Virtualization also can separate a desktop environment and associated application software from the hardware device that is used to access it, and provides employees with remote desktop access. Our specialists assist customers with the steps of implementing virtualization solutions, including evaluating network environments, deploying shared storage options and licensing platform software. |

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

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

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

| 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 | |

| Total Hardware | | 14,363.2 | | | | 79.8 | | | 13,099.1 | | | | 80.6 | | | 11,971.8 | | | | 80.6 | |

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

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

| Other(3) | | 124.4 | | | | 0.6 | | | 113.7 | | | | 0.7 | | | 112.9 | | | | 0.8 | |

Our Coworkers

Approximately two-thirds of our coworkers at year end 2019 were customer facing.

Account managers are supported by field sellers, highly skilled technology specialists and advanced service delivery engineers.

We believe this structure to be core to our ability to continue to offer complex IT solutions and services.

We consider our coworker relations to be good.

Intellectual Property

The CDW trademark and certain variations thereon are registered or subject to pending trademark applications in the US, UK, Canada and certain other jurisdictions.

We believe our trademarks have significant value and are important factors in our marketing programs.

In addition, we own registrations for domain names, including cdw.com, cdwg.com, cdw.ca and variations thereon, for certain of our primary trademarks.

We also own patent rights and have unregistered copyrights in our website content, software and other written materials.

In 2003, we purchased selected US assets and the Canadian operations of Micro Warehouse, which expanded our growth platform into Canada.

In 2006, we acquired Berbee Information Networks Corporation, a regional provider of technology products, solutions and customized engineering services in advanced technologies primarily across Cisco, IBM and Microsoft portfolios.

We were a public company from 1993 until 2007 when we were acquired through a merger transaction by an entity controlled by investment funds affiliated with Madison Dearborn Partners, LLC ("Madison Dearborn") and Providence Equity Partners LLC ("Providence Equity").

In 2013, CDW Corporation completed a second initial public offering ("IPO") of its common stock.

After the IPO, through secondary offerings and fund distributions, Madison Dearborn and Providence Equity liquidated their ownership positions.

It also enhanced our ability to provide IT solutions to US-based customers with multinational locations.

As of December 31, [removed: 2019,] [added: 2020,] 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: ☒ANNUAL] [added: ☒ ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

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

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

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

| 75 Tri-State International | | | | | [added: | | | | | | | | | |]

| Lincolnshire | [added: | |] , | [added: | |] Illinois | | [added: | | | |] 60069 | [added: | |]

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

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

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

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

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

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

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June [removed: 28, 2019,] [added: 30, 2020,] the last business day of the registrant's most recently completed second fiscal quarter, was [removed: $15,932] [added: $16,514] million, based on the per share closing sale price of [removed: $111.00] [added: $116.18] on that date.

As of February [removed: 25, 2020,] [added: 23, 2021,] there were [removed: 142,771,539] [added: 140,991,095] shares of common stock, $0.01 par value, outstanding.

Certain parts of the registrant's definitive proxy statement for its [removed: 2020] [added: 2021] annual meeting of stockholders to be held on May [removed: 21, 2020,] [added: 20, 2021,] which will be filed with the Securities and Exchange Commission on or before April [removed: 29, 2020,] [added: 30, 2021,] are incorporated by reference into Part III of this Annual Report on Form 10-K.

Year Ended December [removed: 31, 2019][added: 31, 2020]

| Item | | [added: | | | |] Page | [added: | |]

| PART I | | | [added: | | | | | |]

| Item 1. | [removed: [Business](#s8F655E81C8455C2BBB4F32A5C107A3FB)] | [removed: [4](#s8F655E81C8455C2BBB4F32A5C107A3FB)] | [added: [Business](#i36711e581b7647b1aa79820df4895dbb_16) | | | [4](#i36711e581b7647b1aa79820df4895dbb_16) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#s448C994412CD5B9DBF331C16D7349605)] [added: Factors](#i36711e581b7647b1aa79820df4895dbb_19)] | [removed: [9](#s448C994412CD5B9DBF331C16D7349605)] | [added: | [9](#i36711e581b7647b1aa79820df4895dbb_19) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s0A0972104DDB54248A5D7FE0A7CF275F)] [added: Comments](#i36711e581b7647b1aa79820df4895dbb_22)] | [removed: [20](#s0A0972104DDB54248A5D7FE0A7CF275F)] | [added: | [21](#i36711e581b7647b1aa79820df4895dbb_22) | | |]

| Item 2. | [removed: [Properties](#sBF26F0B25F15517BB7991904DCE3896C)] | [removed: [20](#sBF26F0B25F15517BB7991904DCE3896C)] | [added: [Properties](#i36711e581b7647b1aa79820df4895dbb_25) | | | [21](#i36711e581b7647b1aa79820df4895dbb_25) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#s761E887FF29052718D130EBD085AFBB5)] [added: Proceedings](#i36711e581b7647b1aa79820df4895dbb_28)] | [removed: [20](#s761E887FF29052718D130EBD085AFBB5)] | [added: | [22](#i36711e581b7647b1aa79820df4895dbb_28) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s44B193409FAD54EE9A6D64BA9889952E)] [added: Disclosures](#i36711e581b7647b1aa79820df4895dbb_31)] | [removed: [20](#s44B193409FAD54EE9A6D64BA9889952E)] | [added: | [22](#i36711e581b7647b1aa79820df4895dbb_31) | | |]

| | [added: | |] [Information about our Executive [removed: Officers](#s6D9C82B1B21D5AF2A6CE31AB93AA5599)] [added: Officers](#i36711e581b7647b1aa79820df4895dbb_34)] | [removed: [21](#s6D9C82B1B21D5AF2A6CE31AB93AA5599)] | [added: | [22](#i36711e581b7647b1aa79820df4895dbb_34) | | |]

| PART II | | | [added: | | | | | |]

| Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s1801CA399BBD55EDB136880A27F9649C)] [added: Securities](#i36711e581b7647b1aa79820df4895dbb_40)] | [removed: [22](#s1801CA399BBD55EDB136880A27F9649C)] | [added: | [23](#i36711e581b7647b1aa79820df4895dbb_40) | | |]

| Item 6. | [added: | |] [Selected Financial [removed: Data](#sE59F7094AD3D50CFA8C71020F694CB0C)] [added: Data](#i36711e581b7647b1aa79820df4895dbb_43)] | [removed: [24](#sE59F7094AD3D50CFA8C71020F694CB0C)] | [added: | [26](#i36711e581b7647b1aa79820df4895dbb_43) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sD8E4D379154154AB811FEA5549E3E91E)] [added: Operations](#i36711e581b7647b1aa79820df4895dbb_46)] | [removed: [28](#sD8E4D379154154AB811FEA5549E3E91E)] | [added: | [29](#i36711e581b7647b1aa79820df4895dbb_46) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s31BB4D7647BE530AB0E1D6A470CD387F)] [added: Risk](#i36711e581b7647b1aa79820df4895dbb_145)] | [removed: [41](#s31BB4D7647BE530AB0E1D6A470CD387F)] | [added: | [44](#i36711e581b7647b1aa79820df4895dbb_145) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#sA7B0230957445378A391499FF9498550)] [added: Data](#i36711e581b7647b1aa79820df4895dbb_148)] | [removed: [43](#sA7B0230957445378A391499FF9498550)] | [added: | [45](#i36711e581b7647b1aa79820df4895dbb_148) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sA63D00878F6154479BAEDC5B6FF2776A)] [added: Disclosure](#i36711e581b7647b1aa79820df4895dbb_277)] | [removed: [87](#sA63D00878F6154479BAEDC5B6FF2776A)] | [added: | [81](#i36711e581b7647b1aa79820df4895dbb_277) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#s961A20D9771258978451ACD68FEAA5D5)] [added: Procedures](#i36711e581b7647b1aa79820df4895dbb_280)] | [removed: [87](#s961A20D9771258978451ACD68FEAA5D5)] | [added: | [81](#i36711e581b7647b1aa79820df4895dbb_280) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#s51F41573303E56B0A8EB816E48D9B25C)] [added: Information](#i36711e581b7647b1aa79820df4895dbb_286)] | [removed: [89](#s51F41573303E56B0A8EB816E48D9B25C)] | [added: | [83](#i36711e581b7647b1aa79820df4895dbb_286) | | |]

| PART III | | | [added: | | | | | |]

| Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s04B789E4C80758CA811CB5118A0E6926)] [added: Governance](#i36711e581b7647b1aa79820df4895dbb_292)] | [removed: [90](#s04B789E4C80758CA811CB5118A0E6926)] | [added: | [84](#i36711e581b7647b1aa79820df4895dbb_292) | | |]

or


CDW CORPORATION

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

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

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

| | | | | | | | | |

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

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

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

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

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Yes ☒ No ☐

| | | | | | | | | |

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

| SIGNATURES | | | | | | [90](#i36711e581b7647b1aa79820df4895dbb_316) | | |

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

or

| | |

| --- | --- |

CDW CORPORATION

| | | | | |

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

| | | |

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

| | | | | | | |

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

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

As of December 31, [removed: 2019,] [added: 2020,] we owned or leased a total of [removed: 2.6] [added: 2.5] million square feet of space, primarily in the US, UK and Canada.

Leases covering our currently occupied leased properties expire at varying dates, generally within the next [removed: 17] [added: 16] years.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

The following table lists the name, age as of February [removed: 28, 2020] [added: 26, 2021] and positions of each executive officer of the Company.

| Name | [added: | |] Age | [added: | |] Position | [added: | |]

| Christine A. Leahy | [removed: 55] | [added: | 56 | | |] 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. | [added: | |]

| Sona Chawla | [removed: 52] | [added: | 53 | | |] 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 [removed: 2018; President, Digital and Chief Marketing Officer, Walgreen Company (a drugstore chain) from February 2014 to November 2015.] [added: 2018.] | [added: | |]

| Elizabeth H. Connelly | [removed: 55] | [added: | 56 | | |] Chief Human Resources Officer and Senior Vice President, Coworker Services since December 2018; Managing Director and Head, Commercial Bank Healthcare, Higher Education and Not-for-Profit Banking at J.P. Morgan Chase & Company (a global financial services firm) from March 2012 to December 2018. | [added: | |]

| Christina M. Corley | [removed: 52] | [added: | 53 | | |] Chief Commercial and Operating Officer since January 2020; Chief Operating Officer [removed: since] [added: from] January [removed: 2019;] [added: 2019 to January 2020;] Senior Vice President, Commercial and International Markets from July 2017 to December 2018; Senior Vice President, Corporate Sales from September 2011 to July 2017. | [added: | |]

| Collin B. Kebo | [removed: 53] | [added: | 54 | | |] 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. | [added: | |]

| Frederick J. Kulevich | [removed: 54] | [added: | 55 | | |] 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. | [added: | |]

| | | | | | | | | |

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

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

| | | |

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

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

| Mark C. Chong | 49 | Senior Vice President of Strategy and Marketing since November 2016; Partner, Bain & Company (a global management consulting firm) from January 2010 to September 2016. |

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

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

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

| Jonathan J. Stevens | 50 | Senior Vice President, Operations and Chief Information Officer since November 2009. |

| Matthew A. Troka | 49 | Senior Vice President, Product and Partner Management since March 2011. |

As of February [removed: 25, 2020,] [added: 23, 2021,] there were [removed: 17] [added: 12] holders of record of our common stock.

On February [removed: 6, 2020,] [added: 10, 2021,] we announced that our Board of Directors declared a quarterly cash dividend on our common stock of [removed: $0.380] [added: $0.400] per share.

The dividend will be paid on March 10, [removed: 2020] [added: 2021] to all stockholders of record as of the close of business on February 25, [removed: 2020.][added: 2021.]

For additional information on restrictions on our ability to pay dividends, see Note [removed: 9] [added: 10] (Long-Term Debt) to the accompanying Consolidated Financial Statements.

On February 7, 2019, we announced that our Board of Directors authorized a [removed: $1] [added: $1.0] 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: 2019] [added: 2020] is as follows:

| Period | | [added: | | | |] Total Number of Shares Purchased (in millions) | | | [added: | | |] Average Price Paid per Share | | | | [added: | |] Total Number of Shares Purchased as Part of a Publicly Announced Program (in millions) | | | [added: | | |] Maximum Dollar Value of Shares that May Yet be Purchased Under the Program(1) (in millions) | | |

[removed: | (1) | The] [added: (1)The] amounts presented in this column are the remaining total authorized value to be spent after each month's repurchases. [removed: |]

The information contained in this 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 [removed: 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: 2014] [added: 2015] through and including the market close on December 31, [removed: 2019,] [added: 2020,] 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.

[added: Our peer group index for 2020 consists of the following companies: 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, [removed: 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 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: ][added: ]

| | | [removed: December 31, 2014] | | | | [added: | | | | | |] December 31, 2015 | | | | [added: | |] December 31, 2016 | | | | [added: | |] December 31, 2017 | | | | [added: | |] December 31, 2018 | | | | [added: | |] December 31, 2019 | | | [added: | | | December 31, 2020 | | |]

On February 10, 2021, we announced that our Board of Directors authorized a $1.25 billion increase to our share repurchase program.

In March 2020, we elected to temporarily suspend share repurchases as a precautionary measure in light of the COVID-19 pandemic.

We made no share repurchases during the second and third quarters of 2020.

In November 2020, we resumed our share repurchase program.

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

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

| October 1 through October 31, 2020 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 538.0 | |

| November 1 through November 30, 2020 | | | | | | 0.7 | | | | | | $ | 136.13 | | | | | 0.7 | | | | | | $ | 446.1 | |

| December 1 through December 31, 2020 | | | | | | 0.8 | | | | | | $ | 131.91 | | | | | 0.8 | | | | | | $ | 338.0 | |

| Total | | | | | | 1.5 | | | | | | | | | | | | 1.5 | | | | | | | | |

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

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.

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

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

| CDW Corp | | | | | | | | | | | | $ | 100 | | | | | $ | 125 | | | | | $ | 169 | | | | | $ | 199 | | | | | $ | 355 | | | | | $ | 332 | |

| S&P 500 Index | | | | | | | | | | | | $ | 100 | | | | | $ | 110 | | | | | $ | 131 | | | | | $ | 123 | | | | | $ | 158 | | | | | $ | 184 | |

| CDW Peers | | | | | | | | | | | | $ | 100 | | | | | $ | 124 | | | | | $ | 139 | | | | | $ | 118 | | | | | $ | 145 | | | | | $ | 157 | |

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

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

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

| 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 | | | | | |

| | |

| --- | --- |

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 | |

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

| (dollars in millions, except per share amounts) | | [added: | | | | 2020 | | | | | |] 2019 | | | | [removed: 2018] | | [added: 2018] | | [removed: 2017] | | | | [added: 2017] | [removed: 2016] | | | | | [removed: 2015(1)] [added: 2016] | | |

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

| Net sales | | [added: | | | |] $ | [removed: 18,032.4] [added: 18,467.5] | | | [added: | |] $ | [removed: 16,240.5] [added: 18,032.4] | | | [added: | |] $ | [removed: 14,832.9] [added: 16,240.5] | | | | [added: |] $ | [removed: 13,672.7] [added: 14,832.9] | | | | [added: |] $ | [removed: 12,988.7] [added: 13,672.7] | |

| Cost of sales | | [added: | | | | 15,257.4 | | | | | |] 14,992.5 | | | | [removed: 13,533.6] | | [added: 13,533.6] | | [removed: 12,382.7] | | | | [added: 12,382.7] | [removed: 11,344.4] | | | | | [removed: 10,872.9] [added: 11,344.4] | | |

| Gross profit | | [added: | | | | 3,210.1 | | | | | |] 3,039.9 | | | | [removed: 2,706.9] | | [added: 2,706.9] | | [removed: 2,450.2] | | | | [added: 2,450.2] | [removed: 2,328.3] | | | | | [removed: 2,115.8] [added: 2,328.3] | | |

| Operating income | | [added: | | | | 1,179.2 | | | | | |] 1,133.6 | | | | [removed: 987.3] | | [added: 987.3] | | [removed: 866.5] | | | | [added: 866.5] | [removed: 820.0] | | | | | [removed: 742.0] [added: 820.0] | | |

| Interest expense, net | | [removed: (159.4] | | [removed: )] | | [removed: (148.6] [added: (154.9)] | | [removed: )] | | [removed: (150.5] | | [removed: )] [added: (159.4)] | | | [removed: (146.5] | | [removed: )] | [added: (148.6)] | | [removed: (159.5] | | [removed: )] | [added: | (150.5) | | | | | | (146.5) | | |]

| Other (expense) income, net | | [removed: (24.5] | | [removed: )] | | [removed: 1.8] [added: (22.0)] | | | | [removed: (55.3] | | [removed: )] [added: (24.5)] | | | [removed: (0.3] | | [removed: )] | [added: 1.8] | | [removed: (33.6] | | [removed: )] | [added: | (55.3) | | | | | | (0.3) | | |]

| Income before income taxes | | [added: | | | | 1,002.3 | | | | | |] 949.7 | | | | [removed: 840.5] | | [added: 840.5] | | [removed: 660.7] | | | | [added: 660.7] | [removed: 673.2] | | | | | [removed: 647.0] [added: 673.2] | | |

| Income tax expense | | [removed: (212.9] | | [removed: )] | | [removed: (197.5] [added: (213.8)] | | [removed: )] | | [removed: (137.6] | | [removed: )] [added: (212.9)] | | | [removed: (248.1] | | [removed: )] | [added: (197.5)] | | [removed: (243.9] | | [removed: )] | [added: | (137.6) | | | | | | (248.1) | | |]

| Net income | | [added: | | | |] $ | [removed: 736.8] [added: 788.5] | | | [added: | |] $ | [removed: 643.0] [added: 736.8] | | | [added: | |] $ | [removed: 523.1] [added: 643.0] | | | | [added: |] $ | [removed: 425.1] [added: 523.1] | | | | [added: |] $ | [removed: 403.1] [added: 425.1] | |

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

| Basic | | [added: | | | |] $ | [removed: 5.08] [added: 5.53] | | | [added: | |] $ | [removed: 4.26] [added: 5.08] | | | [added: | |] $ | [removed: 3.37] [added: 4.26] | | | | [added: |] $ | [removed: 2.60] [added: 3.37] | | | | [added: |] $ | [removed: 2.37] [added: 2.60] | |

| Diluted | | [added: | | | |] $ | [removed: 4.99] [added: 5.45] | | | [added: | |] $ | [removed: 4.19] [added: 4.99] | | | [added: | |] $ | [removed: 3.31] [added: 4.19] | | | | [added: |] $ | [removed: 2.56] [added: 3.31] | | | | [added: |] $ | [removed: 2.35] [added: 2.56] | |

| Cash dividends declared per common share | | [added: | | | |] $ | [removed: 1.2650] [added: 1.5400] | | | [added: | |] $ | [removed: 0.9250] [added: 1.2650] | | | [added: | |] $ | [removed: 0.6900] [added: 0.9250] | | [removed: —] | | [added: |] $ | [removed: 0.4825] [added: 0.6900] | | [removed: —] | | [added: |] $ | [removed: 0.3100] [added: 0.4825] | |

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

| Cash and cash equivalents | | [added: | | | |] $ | [removed: 154.0] [added: 1,410.2] | | | [added: | |] $ | [removed: 205.8] [added: 154.0] | | | [added: | |] $ | [removed: 144.2] [added: 205.8] | | | | [added: |] $ | [removed: 263.7] [added: 144.2] | | | | [added: |] $ | [removed: 37.6] [added: 263.7] | |

| Working capital | | [added: | | | | 2,055.2 | | | | | |] 842.7 | | | | [removed: 993.7] | | [added: 993.7] | | [removed: 874.2] | | | | [added: 874.2] | [removed: 959.9] | | | | | [removed: 903.5] [added: 959.9] | | |

| Total assets | | [added: | | | | 9,344.7 | | | | | |] 7,999.4 | | | | [removed: 7,167.7] | | [added: 7,167.7] | | [removed: 6,966.7] | | | | [added: 6,966.7] | [removed: 6,958.4] | | | | | [removed: 6,755.3] [added: 6,958.4] | | |

| Total debt and [removed: capitalized] [added: finance] lease [removed: obligations(2)] [added: obligations(1)(2)] | | [added: | | | | 3,927.2 | | | | | |] 3,317.3 | | | | [removed: 3,209.1] | | [added: 3,209.1] | | [removed: 3,236.7] | | | | [added: 3,236.7] | [removed: 3,236.6] | | | | | [removed: 3,262.9] [added: 3,236.6] | | |

| Total stockholders' equity | | [added: | | | | 1,297.1 | | | | | |] 960.3 | | | | [removed: 975.2] | | [added: 975.2] | | [removed: 985.6] | | | | [added: 985.6] | [removed: 1,047.9] | | | | | [removed: 1,095.9] [added: 1,047.9] | | |

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

| Capital expenditures | | [added: | | | |] $ | [removed: 236.3] [added: 158.0] | | | [added: | |] $ | [removed: 86.1] [added: 236.3] | | | [added: | |] $ | [removed: 81.1] [added: 86.1] | | | | [added: |] $ | [removed: 63.5] [added: 81.1] | | | | [added: |] $ | [removed: 90.1] [added: 63.5] | |

| Gross profit as a percentage of Net sales | | [removed: 16.9] | | [added: | | 17.4 | |] % | | [removed: 16.7] | | [added: 16.9 | |] % | | [removed: 16.5] | | [added: 16.7 | |] % | | | [removed: 17.0] | [added: 16.5] | [added: |] % | | | [removed: 16.3] | [added: 17.0] | [added: |] % |

| Non-GAAP operating income(3) | | [added: | | | |] $ | [removed: 1,368.4] [added: 1,404.6] | | | [added: | |] $ | [removed: 1,216.6] [added: 1,368.4] | | | [added: | |] $ | [removed: 1,106.8] [added: 1,216.6] | | | | [added: |] $ | [removed: 1,048.3] [added: 1,106.8] | | | | [added: |] $ | [removed: 960.9] [added: 1,048.3] | |

| Non-GAAP net income(4) | | [added: | | | | 954.4 | | | | | |] 902.1 | | | | [removed: 794.3] | | [added: 794.3] | | [removed: 605.9] | | | | [added: 605.9] | [removed: 569.7] | | | | | [removed: 503.5] [added: 569.7] | | |

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

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

| Operating activities | | [added: | | | |] $ | [removed: 1,027.2] [added: 1,314.3] | | | [added: | |] $ | [removed: 905.9] [added: 1,027.2] | | | [added: | |] $ | [removed: 777.7] [added: 905.9] | | | | [added: |] $ | [removed: 604.0] [added: 777.7] | | | | [added: |] $ | [removed: 277.5] [added: 604.0] | |

| Investing activities | | [removed: (331.4] | | [removed: )] | | [removed: (86.1] [added: (201.0)] | | [removed: )] | | [removed: (81.1] | | [removed: )] [added: (331.4)] | | | [removed: (65.9] | | [removed: )] | [added: (86.1)] | | [removed: (354.4] | | [removed: )] | [added: | (81.1) | | | | | | (65.9) | | |]

| Financing activities | | [removed: (749.8] | | [removed: )] | | [removed: (754.8] [added: 138.8] | | [removed: )] | | [removed: (818.7] | | [removed: )] [added: (749.8)] | | | [removed: (304.6] | | [removed: )] | [added: (754.8)] | | [removed: (226.5] | | [removed: )] | [added: | (818.7) | | | | | | (304.6) | | |]

[removed: | (2) | Excludes borrowings of $430 million, $429 million, $498 million, $580 million and $440 million as of December 31, 2019, 2018, 2017, 2016 and 2015, respectively, under our inventory financing agreements.] We do not include these borrowings in total debt because we have not in the past incurred, and in the future do not expect to incur, any interest expense or late fees under these agreements. [removed: |]

[removed: | (3) | Non-GAAP] [added: (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, [added: a workforce reduction program,] and acquisition and integration expenses. [removed: |]

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 [added: US] GAAP.

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

| (dollars in millions) | | [added: | | | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [added: | |] 2017 | | | | [removed: 2016] | | [added: 2016] | | [removed: 2015(1)] | | | [added: |]

| Operating [removed: income] [added: income, as reported] | | [added: | | | |] $ | [added: 1,179.2 | | | | | $ |] 1,133.6 | | | [added: | |] $ | 987.3 | | | [added: | |] $ | 866.5 | | | [added: | |] $ | 820.0 | | | [removed: $] | [removed: 742.0] | [removed: |]

| Amortization of [removed: intangibles] [added: intangibles(1)] | | [added: | | | | 158.1 | | | | | |] 178.5 | | | | [added: | |] 182.7 | | | | [added: | |] 185.1 | | | | [removed: 187.2] | | [added: 187.2] | | [removed: 173.9] | | | [added: |]

| Equity-based compensation | | [added: | | | | 42.5 | | | | | |] 48.5 | | | | [added: | |] 40.7 | | | | [added: | |] 43.7 | | | | [removed: 39.2] | | [added: 39.2] | | [removed: 31.2] | | | [added: |]

Items that materially impact the comparability of the results over the last five years are discussed below the table.

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

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

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

| Selling and administrative expenses | | | | | | 2,030.9 | | | | | | 1,906.3 | | | | | | 1,719.6 | | | | | | 1,583.7 | | | | | | 1,508.3 | | |

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

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

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

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

(1)Excludes borrowings of $525 million, $430 million, $429 million, $498 million and $580 million as of December 31, 2020, 2019, 2018, 2017 and 2016, respectively, under our inventory financing agreements.

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

(2)On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), and applied the requirements retrospectively.

As such, the lease obligations included in this line are classified as finance leases for the years ended December 31, 2020 and 2019, and as capital leases for the years ended December 31, 2018, 2017 and 2016.

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

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

| Workforce reduction charges | | | | | | 8.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | |

(3)

(4)Non-GAAP net income excludes, among other things, charges related to acquisition-related intangible asset amortization, equity-based compensation, net loss on extinguishment of long-term debt, a workforce reduction program, acquisition and integration expenses, and the associated tax effects of each.

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

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

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

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

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

| Equity-based compensation | | | | | | 42.5 | | | | | | 48.5 | | | | | | 40.7 | | | | | | 43.7 | | | | | | 39.2 | | |

| Workforce reduction charges | | | | | | 8.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

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

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

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

| | | | | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| (dollars in millions) | | | | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

[Table](#i36711e581b7647b1aa79820df4895dbb_7) [of Contents](#i36711e581b7647b1aa79820df4895dbb_7)

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

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

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

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

| Selling and administrative expenses | | 1,713.1 | | | | 1,537.1 | | | | 1,410.0 | | | | | 1,345.4 | | | | | 1,226.0 | | |

| Advertising expense | | 193.2 | | | | 182.5 | | | | 173.7 | | | | | 162.9 | | | | | 147.8 | | |

| Gain on remeasurement of equity investment | | — | | | | — | | | | — | | | | | — | | | | | 98.1 | | |

| | |

| --- | --- |

| (1) | Includes the impact of consolidating five months of CDW UK's financial results. |

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

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

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

| Gain on remeasurement of equity investment(3) | | — | | | | — | | | | — | | | | — | | | | (98.1 | | ) |

| (3) | Represents the gain resulting from the remeasurement of the Company's previously held 35% equity investment to fair value upon the completion of the acquisition of CDW UK. |

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

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

| Withholding tax expense on the unremitted earnings of our Canadian subsidiary | — | | | | — | | | | — | | | | — | | | | 3.3 | | |

| | [added: | |] Page | [added: | |]

| [Report of Independent Registered Public Accounting [removed: Firm](#s66BC32A87D1A51FAB831BA00F4BA6763)] [added: Firm](#i36711e581b7647b1aa79820df4895dbb_151)] | [removed: [44](#s66BC32A87D1A51FAB831BA00F4BA6763)] | [added: | [46](#i36711e581b7647b1aa79820df4895dbb_151) | | |]

| [Consolidated Balance Sheets as of December 31, [removed: 2019] [added: 2020] and [removed: 2018](#s20FF30D7C3F253F3873CFC160104864B)] [added: 2019](#i36711e581b7647b1aa79820df4895dbb_157)] | [removed: [46](#s20FF30D7C3F253F3873CFC160104864B)] | [added: | [48](#i36711e581b7647b1aa79820df4895dbb_157) | | |]

| [Consolidated Statements of Operations for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#s653929C7F47156E59C922B7EA1E71584)] [added: 2018](#i36711e581b7647b1aa79820df4895dbb_163)] | [removed: [47](#s653929C7F47156E59C922B7EA1E71584)] | [added: | [49](#i36711e581b7647b1aa79820df4895dbb_163) | | |]

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#sCB4A48DE85D0519E967FFA0CE74E0467)] [added: 2018](#i36711e581b7647b1aa79820df4895dbb_166)] | [removed: [48](#sCB4A48DE85D0519E967FFA0CE74E0467)] | [added: | [50](#i36711e581b7647b1aa79820df4895dbb_166) | | |]

| [Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#s734CA1402B43502993A7FF6B7AB631A2)] [added: 2018](#i36711e581b7647b1aa79820df4895dbb_169)] | [removed: [49](#s734CA1402B43502993A7FF6B7AB631A2)] | [added: | [51](#i36711e581b7647b1aa79820df4895dbb_169) | | |]

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#sEFC79880F8EC548B99694EA1074651C0)] [added: 2018](#i36711e581b7647b1aa79820df4895dbb_175)] | [removed: [50](#sEFC79880F8EC548B99694EA1074651C0)] | [added: | [52](#i36711e581b7647b1aa79820df4895dbb_175) | | |]

| [Notes to Consolidated Financial [removed: Statements](#sD0FD58125FF652319D753D6B0CF45BE4)] [added: Statements](#i36711e581b7647b1aa79820df4895dbb_178)] | [removed: [51](#sD0FD58125FF652319D753D6B0CF45BE4)] | [added: | [53](#i36711e581b7647b1aa79820df4895dbb_178) | | |]

We have audited the accompanying consolidated balance sheets of CDW Corporation and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] 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 [removed: as of] [added: at] December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] in conformity with [removed: US] [added: U.S.] 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: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 28, 2020] [added: 26, 2021] expressed an unqualified opinion thereon.

Critical Audit [removed: Matters][added: Matter]

| | [added: | |] Revenue recognition | [added: | |]

| Description of the Matter | [added: | |] As described in Note 1 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of promised products or services to customers. The Company applies judgment in determining whether it is the principal and reports revenue on a gross basis, or [added: an] agent and reports revenue on a net basis. The Company also sells some of its products and services as part of bundled contract arrangements containing multiple performance obligations. Significant judgment may be required when determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together. For each distinct performance obligation, judgment is required to determine the relative standalone selling price to allocate the transaction price, such as using an expected cost plus margin approach. Auditing the Company's contracts with customers was challenging given the significant audit effort required to analyze the Company's various products, services and contract arrangements. For example, certain customer contracts contain multiple parties and there can be subjective judgment in assessing the Company's role as principal or agent in the contract arrangement. For certain other customer contracts, there can be judgment in the identification of the distinct performance obligations along with the determination of the associated relative standalone selling prices. | [added: | |]

| How We Addressed the Matter in Our Audit | [added: | |] We obtained an understanding of the revenue process, evaluated the design and tested the operating effectiveness of the Company's internal controls over the relevant terms of the customer contracts, including the determination of principal versus agent, the identification of distinct performance obligations and the determination of the relative standalone selling price for separate performance obligations. To test revenue recognition, our audit procedures included among others, examination of executed customer contracts for a sample of sales transactions, and evaluating the Company's determination of principal versus agent, identifying products and services in the contract and assessing separate distinct performance obligations. To test management's determination of relative standalone selling price for separate performance obligations, we performed audit procedures that included, among others, assessing the appropriateness of the methodology applied, testing the mathematical accuracy of the underlying data and calculations and inspecting the underlying data information on a sample basis. | [added: | |]

| /s/ Ernst & Young LLP | [added: | |]

| We have served as the Company's auditor since 2011. | [added: | |]

| Chicago, Illinois | [added: | |]

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

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

| | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | [added: | 2019 | | | | | | 2018 | | |]

| Assets | | | | | | | | [added: | | | |]

| Current assets: | | | | | | | | [added: | | | |]

| Cash and cash equivalents | [added: | |] $ | [removed: 154.0] [added: 1,410.2] | | | [added: | |] $ | [removed: 205.8] [added: 154.0] | |

| Accounts receivable, net of allowance for [removed: doubtful accounts] [added: credit losses] of [removed: $7.9] [added: $29.6] and [removed: $7.0,] [added: $7.9,] respectively | [removed: 3,002.2] | | [added: 3,212.6] | | [removed: 2,671.2] | | | [added: | 3,002.2 | | |]

| Merchandise inventory | [removed: 611.2] | | [added: 760.0] | | [removed: 454.3] | | | [added: | 611.2 | | |]

| Miscellaneous receivables | [removed: 395.1] | | [added: 379.5] | | [removed: 316.4] | | | [added: | 395.1 | | |]

| Prepaid expenses and other | [removed: 171.6] | | [added: 191.2] | | [removed: 149.1] | | | [added: | 171.6 | | |]

| Total current assets | [removed: 4,334.1] | | [added: 5,953.5] | | [removed: 3,796.8] | | | [added: | 4,334.1 | | |]

| Operating lease right-of-use assets | [removed: 131.8] | | [added: 130.8] | | [removed: —] | | | [added: | 131.8 | | |]

| Property and equipment, net | [removed: 363.1] | | [added: 175.5] | | [removed: 156.1] | | | [added: | 363.1 | | |]