Table	of	Contents

# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

(Mark	One)

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

# For	the	fiscal	year	ended	December	31,	2015

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

# CDW	CORPORATION

(Exact	name	of	registrant	as	specified	in	its

charter)

Delaware

75	Tri-State	International Lincolnshire,	Illinois

(Address	of	principal	executive	offices)

Title	of	each	class:

Common	stock,	par	value	$0.01	per	share

(Zip	Code)

(Registrant's	telephone	number,	including	area	code)

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

	 Name	of	each	exchange	on	which	registered

# 	 NASDAQ	Global	Select	Market

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

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.				 ý		Yes				¨		No

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act. ¨		Yes				ý		No

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

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

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

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

Large	accelerated	filer x

Non-accelerated	filer ¨	(Do	not	check	if	a	smaller	reporting	company)

Accelerated	filer

Smaller	reporting	company ¨

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).				 ¨		Yes				ý		No

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

# DOCUMENTS	INCORPORATED	BY	REFERENCE

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

# CDW	CORPORATION	AND	SUBSIDIARIES

# ANNUAL	REPORT	ON	FORM	10-K

| Item |  | Page |
| :--- | :--- | :--- |
| PART\tI |  |  |
| Item\t1. | Business | 4 |
| Item\t1A. | Risk\tFactors | 9 |
| Item\t1B. | Unresolved\tStaff\tComments | 20 |
| Item\t2. | Properties | 20 |
| Item\t3. | Legal\tProceedings | 20 |
| Item\t4. | Mine\tSafety\tDisclosures | 21 |
|  | Executive\tOfficers | 21 |
| PART\tII |  |  |
| Item\t5. | Market\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 24 |
| Item\t6. | Selected\tFinancial\tData | 26 |
| Item\t7. | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 30 |
| Item\t7A. | Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | 53 |
| Item\t8. | Financial\tStatements\tand\tSupplementary\tData | 54 |
| Item\t9. | Changes\tin\tand\tDisagreements\tWith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 106 |
| Item\t9A. | Controls\tand\tProcedures | 107 |
| Item\t9B. | Other\tInformation | 109 |
| PART\tIII |  |  |
| Item\t10. | Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 110 |
| Item\t11. | Executive\tCompensation | 110 |
| Item\t12. | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 110 |
| Item\t13. | Certain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | 110 |
| Item\t14. | Principal\tAccountant\tFees\tand\tServices | 110 |
| PART\tIV |  |  |
| Item\t15. | Exhibits\tand\tFinancial\tStatement\tSchedules | 111 |
| SIGNATURES |  | 112 |

# FORWARD-LOOKING	STATEMENTS

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

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

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

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

# PART	I

# Item	1.	Business

# Our	Company

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

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

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

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

●Solutions	across	a	very	broad	IT	landscape

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

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

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

|  | Corporate	Segment | Corporate	Segment |  | Public	Segment |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Customer\tChannels | Medium/Large\nBusiness | Small\tBusiness | Government | Education | Healthcare | Other |
| \tTarget\tCustomers | 100\t-\t5,000 | 10\t-\t100 | Various\tfederal,\tstate\tand | Higher\teducation | Hospitals,\tambulatory\tservice | Advanced\tservices |
|  | employees | employees | local\tagencies | and\tK-12 | providers\tand\tlong-term\tcare | customers,\tCanada\tand |
|  |  |  |  |  | facilities | United\tKingdom |
| 2015\tNet\tSales | $5.8 | $1.1 | $1.7 | $1.8 | $1.6 | $1.0 |

For	further	information	regarding	our	segments,	including	financial	results,	see	Note	16	(Segment	Information)	to	the	accompanying	Consolidated	Financial Statements	under	Item	8,	"Financial	Statements	and	Supplementary	Data."

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

# History

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

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

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

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

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

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

# Our	Market

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

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

# Our	Offerings

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

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

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

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

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

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

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

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

Although	we	believe	customers	increasingly	view	technology	purchases	as	solutions	rather	than	discrete	product	and	service	categories,	our	net	sales	by	major category,	based	upon	our	internal	category	classifications	is	as	follow:

|  | Dollars	in<br>Millions | Percentage<br>of	Total	Net	Sales | Dollars	in<br>Millions | Percentage<br>of	Total	Net	Sales | Dollars	in<br>Millions | Percentage<br>of	Total	Net	Sales |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Notebooks/Mobile\tDevices | $2,539.4 | 19.6% | $2,354.0 | 19.5% | $1,696.5 | 15.8% |
| Netcomm\tProducts | 1,914.9 | 14.7 | 1,613.3 | 13.4 | 1,482.7 | 13.8 |
| Enterprise\tand\tData\tStorage\t(Including\nDrives) | 1,065.2 | 8.2 | 1,024.2 | 8.5 | 999.3 | 9.3 |
| Other\tHardware | 4,756.4 | 36.6 | 4,551.1 | 37.6 | 4,184.1 | 38.8 |
| Software\t(2) | 2,163.6 | 16.7 | 2,064.1 | 17.1 | 1,982.4 | 18.4 |
| Services | 478.0 | 3.7 | 371.9 | 3.1 | 332.7 | 3.1 |
| Other\t(3) | 71.2 | 0.5 | 95.9 | 0.8 | 90.9 | 0.8 |
| Total\tnet\tsales | $12,988.7 | 100.0% | $12,074.5 | 100.0% | $10,768.6 | 100.0% |

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

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

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

# Our	Customers

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

# Inventory	Management

We	utilize	our	IT	systems	to	manage	our	inventory	in	a	cost-efficient	manner,	resulting	in	a	rapid-turn	inventory	model.	We	generally	only	stock	items	that have	attained	a	minimum	sales	volume.

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

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

# Information	Technology	Systems

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

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

# Product	Procurement

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

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

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

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

# Competition

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

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

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

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

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

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

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

We	expect	the	competitive	landscape	in	which	we	compete	to	continue	to	change	as	new	technologies	are	developed.	While	innovation	can	help	our	business	as it	creates	new	offerings	for	us	to	sell,	it	can	also	disrupt	our	business	model	and	create	new	and	stronger	competitors.	For	a	discussion	of	the	risks	associated	with competition,	see	Item	1A,	"Risk	Factors."

# Marketing

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

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

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

# Coworkers

As	of	December	31,	2015,	we	employed	8,465	coworkers,	none	of	whom	is	covered	by	collective	bargaining	agreements.	We	consider	our	coworker	relations to	be	good.

# Intellectual	Property

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

# Available	Information

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

# Item	1A.	Risk	Factors

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

# Risks	Related	to	Our	Business

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

# Our	current	competition	includes:

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

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

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

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

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

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

•manage our inventory and accounts receivable;

•purchase,	sell,	ship	and	invoice	our	hardware	and	software	products	and	provide	and	invoice	our	services	efficiently	and	on	a	timely	basis; and

•maintain our cost-efficient operating model while scaling our business.

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

# Breaches	of	data	security	could	adversely	impact	our	business.

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

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

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

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

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

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

Our	success	is	heavily	dependent	upon	our	ability	to	attract,	develop,	engage	and	retain	key	personnel	to	manage	and	grow	our	business,	including	our	key executive,	management,	sales,	services	and	technical	coworkers.

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

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

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

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

•the	 imposition of additional trade law provisions or regulations;

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

•foreign currency fluctuations;

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

•restrictions on the transfer of funds;

•the financial instability	 or	 bankruptcy	 of	 manufacturers; and

# •significant	labor	disputes,	such	as	strikes.

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

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

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

# We	are	heavily	dependent	on	commercial	delivery	services.

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

# We	are	exposed	to	accounts	receivable	and	inventory	risks.

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

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

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

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

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

# Our	future	operating	results	may	fluctuate	significantly.

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

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

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

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

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

# We	are	exposed	to	risks	from	legal	proceedings	and	audits.

We	are	party	to	various	legal	proceedings	that	arise	in	the	ordinary	course	of	our	business,	which	include	commercial,	employment,	tort	and	other	litigation.

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

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

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

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

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

# We	have	significant	deferred	cancellation	of	debt	income.

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

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

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

# Risks	Related	to	Our	Indebtedness

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

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

•making	 it	 more difficult for us to satisfy our obligations	 with respect to our indebtedness;

•requiring	us	to	dedicate	a	substantial	portion	of	our	cash	flow	from	operations	to	debt	service	payments	on	our	and	our	subsidiaries'	debt,	which	reduces	the funds	available	for	working	capital,	capital	expenditures,	acquisitions	and	other	general	corporate	purposes;

•requiring	us	to	comply	with	restrictive	covenants	in	our	senior	credit	facilities	and	indentures,	which	limit	the	manner	in	which	we	conduct	our business;

•making	 it	 more	 difficult for	 us to	 obtain	 vendor financing from	 our	 vendor	 partners, including	 original	 equipment	 manufacturers	 and	 software publishers;

•limiting	 our	 flexibility in	 planning	 for,	 or	 reacting to,	 changes in the industry in	 which	 we operate;

•placing	 us at a competitive disadvantage compared to any of our less-leveraged competitors;

•increasing	our	vulnerability	to	both	general	and	industry-specific	adverse	economic	conditions;

•limiting	our	ability	to	obtain	additional	debt	or	equity	financing	to	fund	future	working	capital,	capital	expenditures,	acquisitions	or	other	general	corporate requirements	and	increasing	our	cost	of	borrowing.

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

Our	senior	credit	facilities	and,	to	a	lesser	degree,	our	indentures	contain,	and	any	future	indebtedness	of	ours	may	contain,	various	covenants	that	limit	our ability	to,	among	other	things:

•incur	or	guarantee	additional	debt;

•pay	 dividends	 or	 make	 distributions to	 holders	 of	 our	 capital stock	 or to	 make	 certain	 other restricted	 payments	 or investments;

•repurchase	or	redeem	capital	stock;

•make loans, capital expenditures or investments or acquisitions;

•receive dividends or other payments from our subsidiaries;

•enter	into	transactions	with	affiliates;

•create	liens;

•merge	 or	 consolidate	 with	 other	 companies	 or transfer	 all	 or	 substantially	 all	 of	 our assets;

•transfer	 or	 sell	 assets, including	 capital	 stock	 of	 subsidiaries; and

•prepay, repurchase or redeem

debt.

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

•will	not	be	required	to	lend	any	additional	amounts	to

•could	elect	to	declare	all	borrowings	outstanding	thereunder,	together	with	accrued	and	unpaid	interest	and	fees,	to	be	due	and	payable;

•could	 require us to apply all of our available cash to repay these borrowings.

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

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

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

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

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

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

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

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

•our	 debt	 holders	 could	 declare	 all	 outstanding	 principal	 and interest to	 be	 due	 and payable;

•the	lenders	under	our	senior	credit	facilities	could	foreclose	against	the	assets	securing	the	borrowings	from	them	and	the	lenders	under	our	Revolving	Loan and	Kelway	Credit	Facility	could	terminate	their	commitments	to	lend	us	money;	and

•we	 could be forced into bankruptcy or liquidation.

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

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

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

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

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

# Risks	Related	to	Ownership	of	Our	Common	Stock

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

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

•changes	in	financial	estimates	by	any	securities	analysts	who	follow	our	common	stock,	our	failure	to	meet	these	estimates	or	failure	of	securities	analysts	to maintain	coverage	of	our	common	stock;

•downgrades	 by any securities analysts	 who follow	 our common stock;

•future	sales	of	our	common	stock	by	our	officers,	directors	and	significant	stockholders,	including	Madison	Dearborn	and	Providence Equity;

•market	 conditions	 or trends in	 our industry	 or the	 economy	 as	 a whole;

•investors' perceptions of our prospects;

•announcements	by	us	or	our	competitors	of	significant	contracts,	acquisitions,	joint	ventures	or	capital	commitments; and

# •changes	in	key	personnel.

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

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

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

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

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

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

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

Our	amended	and	restated	certificate	of	incorporation	and	amended	and	restated	bylaws	contain	provisions	that	may	make	the	acquisition	of	the	Company	more difficult	without	the	approval	of	our	Board	of	Directors.	These	provisions:

•authorize	the	issuance	of	undesignated	preferred	stock,	the	terms	of	which	may	be	established	and	the	shares	of	which	may	be	issued	without	stockholder approval,	and	which	may	include	super	voting,	special	approval,	dividend,	or	other	rights	or	preferences	superior	to	the	rights	of	the	holders	of	common	stock;

•establish	a	classified	Board	of	Directors	so	that	not	all	members	of	our	Board	of	Directors	are	elected	at	one time;

•generally	 prohibit stockholder action	 by	 written consent, requiring all stockholder actions	 be taken at a	 meeting	 of	 our stockholders;

•provide	that	special	meetings	of	the	stockholders	can	only	be	called	by	or	at	the	direction	of	our	Board	of	Directors	pursuant	to	a	written	resolution	adopted	by the	affirmative	vote	of	the	majority	of	the	total	number	of	directors	that	the	Company	would	have	if	there	were	no	vacancies;

•establish	advance	notice	requirements	for	nominations	for	elections	to	our	Board	of	Directors	or	for	proposing	matters	that	can	be	acted	upon	by	stockholders	at stockholder	meetings;	and

•provide	that	our	Board	of	Directors	is	expressly	authorized	to	make,	alter	or	repeal	our	amended	and	restated

bylaws.

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

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

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

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

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

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

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

# Item	1B.	Unresolved	Staff	Comments

# None.

# Item	2.	Properties

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

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

# Item	3.	Legal	Proceedings

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

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

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

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

# Item	4.	Mine	Safety	Disclosures

Not	applicable.

# Executive	Officers

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

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

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

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

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

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

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

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

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

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

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

# PART	II

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

# Market	Information

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

|  |  | 2015 |  |  | 2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | High | Low | Dividends\nDeclared\tper\nShare | High | Low | Dividends\nDeclared\tper\nShare |
| Fourth\tquarter | $46.92 | $40.07 | $0.1075 | $36.08 | $27.59 | $0.0675 |
| Third\tquarter | $41.99 | $33.01 | $0.0675 | $33.80 | $30.07 | $0.0425 |
| Second\tquarter | $39.32 | $34.19 | $0.0675 | $32.41 | $26.70 | $0.0425 |
| First\tquarter | $38.44 | $33.21 | $0.0675 | $27.53 | $22.72 | $0.0425 |

# Holders

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

# Dividends

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

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

# Issuer	Purchases	of	Equity	Securities

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

| Period | Total	Number	of	Shares<br>Purchased	(in	millions) | Average	Price	Paid	per<br>Share | Total	Number	of	Shares<br>Purchased	as	Part	of	a	Publicly<br>Announced	Program	(1)	(in<br>millions) | Maximum	Dollar	Value	of	Shares<br>that	May	Yet	be	Purchased	Under<br>the	Program	(2)	(in	millions) |
| :--- | :--- | :--- | :--- | :--- |
| October\t1\tthrough\tOctober\t31,\t2015 | — | $— | — | $306.7 |
| November\t1\tthrough\tNovember\t30,\t2015 | 1.1 | $43.77 | 1.1 | $258.7 |
| December\t1\tthrough\tDecember\t31,\t2015 | — | $— | — | $258.7 |
| Total | 1.1 | $43.77 | 1.1 |  |

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

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

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

# Stock	Performance	Graph

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

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

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

|  | June	27,	2013 | December	31,	2013 | December	31,	2014 | December	31,	2015 |
| :--- | :--- | :--- | :--- | :--- |
| CDW\tCorp | $100 | $138 | $209 | $249 |
| S&amp;P\tMidCap\t400\tindex | $100 | $118 | $130 | $127 |
| CDW\tPeers | $100 | $111 | $125 | $130 |

# Recent	Sales	of	Unregistered	Securities

# Use	of	Proceeds	from	Registered	Securities

# Item	6.	Selected	Financial	Data

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

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

| (dollars	and	shares	in	millions,	except	per	share	amounts) | 2015(5) | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Statement\tof\tOperations\tData: |  |  |  |  |  |
| Net\tsales | $12,988.7 | $12,074.5 | $10,768.6 | $10,128.2 | $9,602.4 |
| Cost\tof\tsales | 10,872.9 | 10,153.2 | 9,008.3 | 8,458.6 | 8,018.9 |
| Gross\tprofit | 2,115.8 | 1,921.3 | 1,760.3 | 1,669.6 | 1,583.5 |
| Selling\tand\tadministrative\texpenses | 1,226.0 | 1,110.3 | 1,120.9 | 1,029.5 | 990.1 |
| Advertising\texpense | 147.8 | 138.0 | 130.8 | 129.5 | 122.7 |
| Income\tfrom\toperations | 742.0 | 673.0 | 508.6 | 510.6 | 470.7 |
| Interest\texpense,\tnet | (159.5) | (197.3) | (250.1) | (307.4) | (324.2) |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | (24.3) | (90.7) | (64.0) | (17.2) | (118.9) |
| Gain\ton\tremeasurement\tof\tequity\tinvestment | 98.1 | — | — | — | — |
| Other\tincome\t(expense),\tnet | (9.3) | 2.7 | 1.0 | 0.1 | 0.7 |
| Income\tbefore\tincome\ttaxes | 647.0 | 387.7 | 195.5 | 186.1 | 28.3 |
| Income\ttax\texpense | (243.9) | (142.8) | (62.7) | (67.1) | (11.2) |
| Net\tincome | $403.1 | $244.9 | $132.8 | $119.0 | $17.1 |
| Net\tincome\tper\tcommon\tshare: |  |  |  |  |  |
| Basic | $2.37 | $1.44 | $0.85 | $0.82 | $0.12 |
| Diluted | $2.35 | $1.42 | $0.84 | $0.82 | $0.12 |
| Cash\tdividends\tdeclared\tper\tcommon\tshare | $0.3100 | $0.1950 | $0.0425 | $— | $— |
| Balance\tSheet\tData\t(at\tperiod\tend): |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $37.6 | $344.5 | $188.1 | $37.9 | $99.9 |
| Working\tcapital | 903.5 | 985.4 | 810.9 | 666.5 | 538.1 |
| Total\tassets | 6,755.3 | 6,075.9 | 5,899.3 | 5,673.5 | 5,907.9 |
| Total\tdebt\tand\tcapitalized\tlease\tobligations\t(1)(2) | 3,262.9 | 3,166.1 | 3,226.0 | 3,724.5 | 4,006.2 |
| Total\tstockholders'\tequity\t(deficit) | 1,095.9 | 936.5 | 711.7 | 136.5 | (7.3) |
| Other\tFinancial\tData: |  |  |  |  |  |
| Capital\texpenditures | $90.1 | $55.0 | $47.1 | $41.4 | $45.7 |
| Gross\tprofit\tas\ta\tpercentage\tof\tnet\tsales | 16.3% | 15.9% | 16.3% | 16.5% | 16.5% |
| EBITDA\t(3) | $1,033.9 | $792.9 | $653.8 | $703.7 | $557.4 |
| Adjusted\tEBITDA\t(3) | 1,018.5 | 907.0 | 808.5 | 766.6 | 717.3 |
| Non-GAAP\tnet\tincome\t(4) | 503.5 | 409.9 | 314.3 | 247.1 | 198.8 |
| Statement\tof\tCash\tFlows\tData: |  |  |  |  |  |
| Net\tcash\tprovided\tby\t(used\tin): |  |  |  |  |  |
| Operating\tactivities | $277.5 | $435.0 | $366.3 | $317.4 | $214.7 |
| Investing\tactivities | (354.4) | (164.8) | (47.1) | (41.7) | (56.0) |
| Financing\tactivities | (226.5) | (112.0) | (168.3) | (338.0) | (95.4) |

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

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

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

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

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

| (in	millions) | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tincome | $403.1 | \t $244.9 | \t $132.8 | \t $119.0 | \t $17.1 |
| Depreciation\tand\tamortization | 227.4 | 207.9 | 208.2 | 210.2 | 204.9 |
| Income\ttax\texpense | 243.9 | 142.8 | 62.7 | 67.1 | 11.2 |
| Interest\texpense,\tnet | 159.5 | 197.3 | 250.1 | 307.4 | 324.2 |
| EBITDA | 1,033.9 | 792.9 | 653.8 | 703.7 | 557.4 |
| Non-cash\tequity-based\tcompensation | 31.2 | 16.4 | 8.6 | 22.1 | 19.5 |
| Net\tloss\ton\textinguishment\tof\tlong-term\tdebt(a) | 24.3 | 90.7 | 64.0 | 17.2 | 118.9 |
| Loss\t(income)\tfrom\tequity\tinvestments(b) | 10.1 | (2.2) | (0.6) | (0.3) | (0.1) |
| Acquisition\tand\tintegration\texpenses(c) | 10.2 | — | — | — | — |
| Gain\ton\tremeasurement\tof\tequity\tinvestment(d) | (98.1) | — | — | — | — |
| Other\tadjustments(e) | 6.9 | 9.2 | 82.7 | 23.9 | 21.6 |
| Adjusted\tEBITDA(f) | $1,018.5 | \t $907.0 | \t $808.5 | \t $766.6 | \t $717.3 |

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

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

(c) Primarily includes expenses related to the acquisition of Kelway.

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

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

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

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

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

| (in	millions) | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tincome | $403.1 | \t $244.9 | \t $132.8 | \t $119.0 | \t $17.1 |
| Amortization\tof\tintangibles\t(a) | 173.9 | 161.2 | 161.2 | 163.7 | 165.7 |
| Non-cash\tequity-based\tcompensation | 31.2 | 16.4 | 8.6 | 22.1 | 19.5 |
| Non-cash\tequity-based\tcompensation\trelated\tto\tequity\tinvestment(b) | 20.0 | — | — | — | — |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | 24.3 | 90.7 | 64.0 | 17.2 | 118.9 |
| Acquisition\tand\tintegration\texpenses(c) | 10.2 | — | — | — | — |
| Gain\ton\tremeasurement\tof\tequity\tinvestment(d) | (98.1) | — | — | — | — |
| Other\tadjustments(e) | 3.7 | (0.3) | 61.2 | (3.3) | (15.6) |
| Aggregate\tadjustment\tfor\tincome\ttaxes\t(f) | (64.8) | (103.0) | (113.5) | (71.6) | (106.8) |
| Non-GAAP\tnet\tincome(g) | $503.5 | \t $409.9 | \t $314.3 | \t $247.1 | \t $198.8 |

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

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

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

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

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

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

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

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

# Overview

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

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

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

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

# Trends	and	Key	Factors	Affecting	our	Financial	Performance

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

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

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

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

# Key	Business	Metrics

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

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

The	results	of	certain	key	business	metrics	are	as	follows:

| (dollars	in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tsales | $12,988.7 | $12,074.5 | $10,768.6 |
| Gross\tprofit | 2,115.8 | 1,921.3 | 1,760.3 |
| Income\tfrom\toperations | 742.0 | 673.0 | 508.6 |
| Net\tincome | 403.1 | 244.9 | 132.8 |
| Non-GAAP\tnet\tincome | 503.5 | 409.9 | 314.3 |
| Adjusted\tEBITDA | 1,018.5 | 907.0 | 808.5 |
| Average\tdaily\tsales | 51.1 | 47.5 | 42.4 |
| Net\tdebt\t(defined\tas\ttotal\tdebt\tminus\tcash\tand\tcash\tequivalents)\t(1) | 3,222.1 | 2,821.5 | 3,037.9 |
| Cash\tconversion\tcycle\t(in\tdays)\t(2) | 21 | 21 | 23 |

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

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

# Results	of	Operations

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

|  | Dollars	in<br>Millions | Percentage	of<br>Net	Sales	(1) | Dollars	in<br>Millions | Percentage	of<br>Net	Sales |
| :--- | :--- | :--- | :--- | :--- |
| Net\tsales | $12,988.7 | 100.0\t% | $12,074.5 | 100.0\t% |
| Cost\tof\tsales | 10,872.9 | 83.7 | 10,153.2 | 84.1 |
| Gross\tprofit | 2,115.8 | 16.3 | 1,921.3 | 15.9 |
| Selling\tand\tadministrative\texpenses | 1,226.0 | 9.4 | 1,110.3 | 9.2 |
| Advertising\texpense | 147.8 | 1.1 | 138.0 | 1.1 |
| Income\tfrom\toperations | 742.0 | 5.7 | 673.0 | 5.6 |
| Interest\texpense,\tnet | (159.5) | (1.2) | (197.3) | (1.6) |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | (24.3) | (0.2) | (90.7) | (0.8) |
| Gain\ton\tremeasurement\tof\tequity\tinvestment | 98.1 | 0.8 | — | — |
| Other\t(expense)\tincome,\tnet | (9.3) | (0.1) | 2.7 | — |
| Income\tbefore\tincome\ttaxes | 647.0 | 5.0 | 387.7 | 3.2 |
| Income\ttax\texpense | (243.9) | (1.9) | (142.8) | (1.2) |
| Net\tincome | $403.1 | 3.1\t% | $244.9 | 2.0\t% |

# Net	sales

Net	sales	by	segment,	in	dollars	and	as	a	percentage	of	total	Net	sales,	and	the	year-over-year	dollar	and	percentage	change	in	Net	sales	for	the	years	ended December	31,	2015	and	2014	are	as	follows:

|  | 2015 |  | 2014 |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (dollars\tin\tmillions) | Net\tSales | Percentage\nof\tTotal\nNet\tSales | Net\tSales | Percentage\nof\tTotal\nNet\tSales | Dollar\nChange | Percent\nChange\t(1) |
| Corporate: |  |  |  |  |  |  |
| Medium/Large | $5,758.2 | 44.3% | $5,485.4 | 45.4% | $272.8 | 5.0\t% |
| Small\tBusiness | 1,058.2 | 8.2 | 990.1 | 8.2 | 68.1 | 6.9 |
| Total\tCorporate | 6,816.4 | 52.5 | 6,475.5 | 53.6 | 340.9 | 5.3 |
| Public: |  |  |  |  |  |  |
| Government | 1,675.9 | 12.9 | 1,449.4 | 12.0 | 226.5 | 15.6 |
| Education | 1,807.0 | 13.9 | 1,824.0 | 15.1 | (17.0) | (0.9) |
| Healthcare | 1,642.6 | 12.6 | 1,606.0 | 13.3 | 36.6 | 2.3 |
| Total\tPublic | 5,125.5 | 39.4 | 4,879.4 | 40.4 | 246.1 | 5.0 |
| Other | 1,046.8 | 8.1 | 719.6 | 6.0 | 327.2 | 45.5 |
| Total\tNet\tsales | $12,988.7 | 100.0% | $12,074.5 | 100.0% | $914.2 | 7.6\t% |

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

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

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

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

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

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

# Gross	profit

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

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

# Selling	and	administrative	expenses

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

# Income	from	operations

Income	from	operations	by	segment,	in	dollars	and	as	a	percentage	of	Net	sales,	and	the	year-over-year	percentage	change	for	the	years	ended	December	31, 2015	and	2014	is	as	follows:

|  | Dollars	in<br>Millions | Operating<br>Margin | Dollars	in<br>Millions | Operating<br>Margin | Percent	Change<br>in	Income<br>from	Operations |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Segments:\t(1) |  |  |  |  |  |
| Corporate | $470.1 | 6.9% | $439.8 | 6.8% | 6.9% |
| Public | 343.3 | 6.7 | 313.2 | 6.4 | 9.6 |
| Other\t(2) | 43.1 | 4.1 | 32.9 | 4.6 | 31.0 |
| Headquarters\t(3) | (114.5) | nm* | (112.9) | nm* | 1.4 |
| Total\tIncome\tfrom\toperations | $742.0 | 5.7% | $673.0 | 5.6% | 10.3% |

*	Not	meaningful

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

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

(3) Includes certain	 Headquarters' function costs that are not allocated to the segments.

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

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

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

# Interest	expense,	net

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

# Net	loss	on	extinguishments	of	long-term	debt

For	information	regarding	our	debt,	see	Note	8	(Long-Term	Debt)	to	the	accompanying	Consolidated	Financial	Statements.	During	2015,	we	recorded	a	net loss	on	extinguishments	of	long-term	debt	of	$24.3	million	compared	to	$90.7	million	in	2014.

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

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

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

# Gain	on	remeasurement	of	equity	investment

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

# Income	tax	expense

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

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

# Non-GAAP	Financial	Measure	Reconciliations

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

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

# Non-GAAP	net	income

| (in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Net\tincome | $403.1 | $244.9 |
| Amortization\tof\tintangibles(1) | 173.9 | 161.2 |
| Non-cash\tequity-based\tcompensation | 31.2 | 16.4 |
| Non-cash\tequity-based\tcompensation\trelated\tto\tequity\tinvestment(2) | 20.0 | — |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | 24.3 | 90.7 |
| Acquisition\tand\tintegration\texpenses(3) | 10.2 | — |
| Gain\ton\tremeasurement\tof\tequity\tinvestment(4) | (98.1) | — |
| Other\tadjustments(5) | 3.7 | (0.3) |
| Aggregate\tadjustment\tfor\tincome\ttaxes\t(6) | (64.8) | (103.0) |
| Non-GAAP\tnet\tincome(7) | $503.5 | $409.9 |

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

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

(3) Primarily includes expenses related to the acquisition of Kelway.

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

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

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

# Adjusted	EBITDA

|  |  | Years	Ended	December	31, | Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2015 | Percentage\tof\nNet\tSales | 2014 | Percentage\tof\nNet\tSales |
| Net\tincome | $403.1 | $244.9 | $244.9 |  |
| Depreciation\tand\tamortization | 227.4 |  | 207.9 |  |
| Income\ttax\texpense | 243.9 | 142.8 | 142.8 |  |
| Interest\texpense,\tnet | 159.5 |  | 197.3 |  |
| EBITDA | 1,033.9 | 8.0% | 792.9 | 6.6% |
| Adjustments: |  |  |  |  |
| Non-cash\tequity-based\tcompensation | 31.2 | 16.4 | 16.4 |  |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | 24.3 |  | 90.7 |  |
| Loss\t(income)\tfrom\tequity\tinvestments(1) | 10.1 | (2.2) | (2.2) |  |
| Acquisition\tand\tintegration\texpenses(2) | 10.2 |  | — |  |
| Gain\ton\tremeasurement\tof\tequity\tinvestment(3) | (98.1) |  | — |  |
| Other\tadjustments(4) | 6.9 | 9.2 | 9.2 |  |
| Total\tadjustments | (15.4) | 114.1 | 114.1 |  |
| Adjusted\tEBITDA(5) | $1,018.5 | 7.8% | $907.0 | 7.5% |

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

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

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

| (in	millions) | 2015 | 2014 | %	Change |
| :--- | :--- | :--- | :--- |
| Net\tsales,\tas\treported | $12,988.7 | $12,074.5 | 7.6% |
| Impact\tof\tacquisition\t(1) | (350.7) | — |  |
| Organic\tnet\tsales | $12,638.0 | $12,074.5 | 4.7% |
| Foreign\tcurrency\ttranslation\t(2) | — | (71.5) |  |
| Organic\tnet\tsales,\ton\ta\tconstant\tcurrency\tbasis | $12,638.0 | $12,003.0 | 5.3% |

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

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

|  | Year	Ended	December	31,	2014 |  | Year	Ended	December	31,	2013 | Year	Ended	December	31,	2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Dollars\tin\nMillions | Percentage\tof\nNet\tSales | Dollars\tin\nMillions | Net\tSales | Percentage\tof |
| Net\tsales | $12,074.5 | 100.0\t% | $10,768.6 | $10,768.6 | 100.0\t% |
| Cost\tof\tsales | 10,153.2 | 84.1 | 9,008.3 | 83.7 | 83.7 |
| Gross\tprofit | 1,921.3 | 15.9 | 1,760.3 | 16.3 | 16.3 |
| Selling\tand\tadministrative\texpenses | 1,110.3 | 9.2 | 1,120.9 | 1,120.9 | 10.4 |
| Advertising\texpense | 138.0 | 1.1 | 130.8 | 1.2 | 1.2 |
| Income\tfrom\toperations | 673.0 | 5.6 | 508.6 | 508.6 | 4.7 |
| Interest\texpense,\tnet | (197.3) | (1.6) | (250.1) | (250.1) | (2.3) |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | (90.7) | (0.8) | (64.0) | (64.0) | (0.6) |
| Other\tincome,\tnet | 2.7 | — | 1.0 | 1.0 | — |
| Income\tbefore\tincome\ttaxes | 387.7 | 3.2 | 195.5 | 1.8 | 1.8 |
| Income\ttax\texpense | (142.8) | (1.2) | (62.7) | (0.6) | (0.6) |
| Net\tincome | $244.9 | 2.0\t% | $132.8 | $132.8 | 1.2\t% |

|  | 2014 |  | 2013 |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (dollars\tin\tmillions) | Net\tSales | Percentage\nof\tTotal\tNet\tsales | Net\tSales | Percentage\nof\tTotal\tNet\tSales | Dollar\nChange | Percent\nChange\t(1) |
| Corporate: |  |  |  |  |  |  |
| Medium\t/\tLarge | $5,485.4 | 45.4% | $5,052.7 | 46.9% | $432.7 | 8.6% |
| Small\tBusiness | 990.1 | 8.2 | 907.4 | 8.4 | 82.7 | 9.1 |
| Total\tCorporate | 6,475.5 | 53.6 | 5,960.1 | 55.3 | 515.4 | 8.6 |
| Public: |  |  |  |  |  |  |
| Government | 1,449.4 | 12.0 | 1,250.6 | 11.6 | 198.8 | 15.9 |
| Education | 1,824.0 | 15.1 | 1,449.0 | 13.5 | 375.0 | 25.9 |
| Healthcare | 1,606.0 | 13.3 | 1,464.9 | 13.6 | 141.1 | 9.6 |
| Total\tPublic | 4,879.4 | 40.4 | 4,164.5 | 38.7 | 714.9 | 17.2 |
| Other | 719.6 | 6.0 | 644.0 | 6.0 | 75.6 | 11.7 |
| Total\tNet\tsales | $12,074.5 | 100.0% | $10,768.6 | 100.0% | $1,305.9 | 12.1% |

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

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

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

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

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

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

Income	from	operations	by	segment,	in	dollars	and	as	a	percentage	of	Net	sales,	and	the	year-over-year	percentage	change	in	Income	from	operations	for	the years	ended	December	31,	2014	and	2013	is	as	follows:

|  | Dollars	in<br>Millions | Operating<br>Margin | Dollars	in<br>Millions | Operating<br>Margin | Percent	Change<br>in	Income<br>from	Operations |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Segments:\t(1) |  |  |  |  |  |
| Corporate | $439.8 | 6.8% | $363.3 | 6.1% | 21.1% |
| Public | 313.2 | 6.4 | 246.5 | 5.9 | 27.1 |
| Other | 32.9 | 4.6 | 27.2 | 4.2 | 20.9 |
| Headquarters\t(2) | (112.9) | nm* | (128.4) | nm* | 12.0 |
| Total\tIncome\tfrom\toperations | $673.0 | 5.6% | $508.6 | 4.7% | 32.3% |

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

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

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

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

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

For	information	regarding	our	debt,	see	Note	8	(Long-Term	Debt)	to	the	accompanying	Consolidated	Financial	Statements.	During	2014,	we	recorded	a	net loss	on	extinguishments	of	long-term	debt	of	$90.7	million	compared	to	$64.0	million	in	2013.

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

| Month	of	Extinguishment | Debt	Instrument | Amount	Extinguished | Loss	Recognized |  |
| :--- | :--- | :--- | :--- | :--- |
| For\tthe\tYear\tEnded\tDecember\t31,\t2014 |  |  |  |  |
| December\t2014 | 2019\tSenior\tNotes | $541.4 | $(36.9) | (1) |
| September\t2014 | 2019\tSenior\tNotes | 234.7 | (22.1) | (1) |
| August\t2014 | 8.0%\tSenior\tSecured\tNotes\tdue\t2018 | 325.0 | (23.7) | (1) |
| June\t2014 | Revolving\tLoan | — | (0.4) | (2) |
| May\t2014 | 12.535%\tSenior\tSubordinated\tExchange\tNotes\tdue\t2017 | 42.5 | (2.2) | (1) |
| March\t2014 | 2019\tSenior\tNotes | 25.0 | (2.7) | (1) |
| January\tand\tFebruary\t2014 | 12.535%\tSenior\tSubordinated\tExchange\tNotes\tdue\t2017 | 50.0 | (2.7) | (1) |
| Total\tLoss\tRecognized |  |  | $(90.7) |  |
| For\tthe\tYear\tEnded\tDecember\t31,\t2013 |  |  |  |  |
| October\t2013 | 12.535%\tSenior\tSubordinated\tExchange\tNotes\tdue\t2017 | $155.0 | $(8.5) | (1) |
| August\t2013 | 12.535%\tSenior\tSubordinated\tExchange\tNotes\tdue\t2017 | 324.0 | (24.6) | (1) |
| July\t2013 | 8.0%\tSenior\tSecured\tNotes\tdue\t2018 | 175.0 | (16.7) | (1) |
| April\t2013 | Senior\tSecured\tTerm\tLoan | — | (10.3) | (3) |
| March\t2013 | 12.535%\tSenior\tSubordinated\tExchange\tNotes\tdue\t2017 | 50.0 | (3.9) | (1) |
| Total\tLoss\tRecognized |  |  | $(64.0) |  |

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

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

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

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

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

| (in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Net\tincome | $244.9 | $132.8 |
| Amortization\tof\tintangibles\t(1) | 161.2 | 161.2 |
| Non-cash\tequity-based\tcompensation | 16.4 | 8.6 |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | 90.7 | 64.0 |
| Other\tadjustments\t(2) | (0.3) | 61.2 |
| Aggregate\tadjustment\tfor\tincome\ttaxes\t(3) | (103.0) | (113.5) |
| Non-GAAP\tnet\tincome | $409.9 | $314.3 |

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

(3) Based on a normalized effective tax rate of 39.0%.

| (in	millions) | 2014 | Percentage	of<br>Net	Sales | 2013 | Percentage	of<br>Net	Sales |
| :--- | :--- | :--- | :--- | :--- |
| Net\tincome | $244.9 |  | $132.8 |  |
| Depreciation\tand\tamortization | 207.9 |  | 208.2 |  |
| Income\ttax\texpense | 142.8 |  | 62.7 |  |
| Interest\texpense,\tnet | 197.3 |  | 250.1 |  |
| EBITDA | 792.9 | 6.6% | 653.8 | 6.1% |
| Adjustments: |  |  |  |  |
| Non-cash\tequity-based\tcompensation | 16.4 |  | 8.6 |  |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | 90.7 |  | 64.0 |  |
| Income\tfrom\tequity\tinvestments | (2.2) |  | (0.6) |  |
| Other\tadjustments\t(1) | 9.2 |  | 82.7 |  |
| Total\tadjustments | 114.1 |  | 154.7 |  |
| Adjusted\tEBITDA | $907.0 | 7.5% | $808.5 | 7.5% |

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

# Seasonality

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

# Liquidity	and	Capital	Resources

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

# Long-Term	Debt	Activities

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

# Share	Repurchase	Program

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

# Acquisition

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

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

| Dividend	Amount | Declaration	Date | Record	Date | Payment	Date |
| :--- | :--- | :--- | :--- |
| $0.0675 | February\t10,\t2015 | February\t25,\t2015 | March\t10,\t2015 |
| $0.0675 | May\t7,\t2015 | May\t26,\t2015 | June\t10,\t2015 |
| $0.0675 | August\t3,\t2015 | August\t25,\t2015 | September\t10,\t2015 |
| $0.1075 | November\t4,\t2015 | November\t25,\t2015 | December\t10,\t2015 |

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

# Cash	Flows

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

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\t(used\tin): |  |  |  |
| Operating\tactivities | $277.5 | $435.0 | $366.3 |
| Investing\tactivities | (354.4) | (164.8) | (47.1) |
| Net\tchange\tin\taccounts\tpayable\t-\tinventory\tfinancing | 95.9 | 75.5 | 7.4 |
| Other\tfinancing\tactivities | (322.4) | (187.5) | (175.7) |
| Financing\tactivities | (226.5) | (112.0) | (168.3) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | (3.5) | (1.8) | (0.7) |
| Net\t(decrease)\tincrease\tin\tcash\tand\tcash\tequivalents | $(306.9) | $156.4 | $150.2 |

# Operating	Activities

Cash	flows	from	operating	activities	are	as	follows:

| (in	millions) | 2015 | 2014 | Dollar	Change |
| :--- | :--- | :--- | :--- |
| Net\tincome | $403.1 | $244.9 | $158.2 |
| Adjustments\tfor\tthe\timpact\tof\tnon-cash\titems(1) | 150.3 | 231.9 | (81.6) |
| Net\tincome\tadjusted\tfor\tthe\timpact\tof\tnon-cash\titems(2) | 553.4 | 476.8 | 76.6 |
| Changes\tin\tassets\tand\tliabilities: |  |  |  |
| Accounts\treceivable(3) | (342.6) | (117.6) | (225.0) |
| Merchandise\tinventory(4) | (31.5) | 44.2 | (75.7) |
| Accounts\tpayable-trade(5) | 100.5 | 43.7 | 56.8 |
| Other | (2.3) | (12.1) | 9.8 |
| Net\tcash\tprovided\tby\toperating\tactivities | $277.5 | $435.0 | $(157.5) |

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

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

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

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

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

| (in	millions) | 2014 | 2013 | Dollar	Change |
| :--- | :--- | :--- | :--- |
| Net\tincome | $244.9 | $132.8 | $112.1 |
| Adjustments\tfor\tthe\timpact\tof\tnon-cash\titems(1) | 231.9 | 280.6 | (48.7) |
| Net\tincome\tadjusted\tfor\tthe\timpact\tof\tnon-cash\titems(2) | 476.8 | 413.4 | 63.4 |
| Changes\tin\tassets\tand\tliabilities: |  |  |  |
| Accounts\treceivable | (117.6) | (170.8) | 53.2 |
| Merchandise\tinventory(3) | 44.2 | (67.5) | 111.7 |
| Accounts\tpayable-trade(4) | 43.7 | 146.1 | (102.4) |
| Other | (12.1) | 45.1 | (57.2) |
| Net\tcash\tprovided\tby\toperating\tactivities | $435.0 | $366.3 | $68.7 |

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

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

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

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

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

| (in	days) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Days\tof\tsales\toutstanding\t(DSO)\t(1) | 48 | 42 | 44 |
| Days\tof\tsupply\tin\tinventory\t(DIO)\t(2) | 13 | 13 | 14 |
| Days\tof\tpurchases\toutstanding\t(DPO)\t(3) | (40) | (34) | (35) |
| Cash\tconversion\tcycle | 21 | 21 | 23 |

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

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

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

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

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

# Investing	Activities

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

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

# Financing	Activities

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

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

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

# Long-Term	Debt	and	Financing	Arrangements

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

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

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

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

•On	March	3,	2015,	we	redeemed	the	remaining	$503.9	million	aggregate	principal	amount	of	the	8.5%	Senior	Notes	due	2019,	plus	accrued	and	unpaid interest	through	the	date	of	redemption,	April	2,	2015.

# Inventory	Financing	Agreements

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

# Contractual	Obligations

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

| (in	millions) | Total | &lt;	1	year | 1-3	years | 4-5	years | &gt;	5	years |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Term\tLoan\t(1) | $1,703.4 | $63.9 | $126.3 | $1,513.2 | $— |
| Kelway\tTerm\tLoan\t(1) | 90.9 | 13.5 | 77.4 | — | — |
| Senior\tNotes\tdue\t2022\t(2) | 852.0 | 36.0 | 72.0 | 72.0 | 672.0 |
| Senior\tNotes\tdue\t2023\t(2) | 735.1 | 26.3 | 52.5 | 52.5 | 603.8 |
| Senior\tNotes\tdue\t2024\t(2) | 859.7 | 31.6 | 63.3 | 63.3 | 701.5 |
| Operating\tleases\t(3) | 143.2 | 22.5 | 41.7 | 37.1 | 41.9 |
| Asset\tretirement\tobligations\t(4) | 1.8 | 0.8 | 0.5 | 0.3 | 0.2 |
| Total | $4,386.1 | $194.6 | $433.7 | $1,738.4 | $2,019.4 |

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

(2) Includes	future	principal	and	cash	interest	payments	on	long-term	borrowings	through	scheduled	maturity	dates.	Interest	on	the	Senior	Notes	is	calculated	using the	stated	interest	rates.	Excluded	from	these	amounts	are	the	amortization	of	debt	issuance	and	other	costs	related	to	indebtedness.

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

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

# Off-Balance	Sheet	Arrangements

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

# Inflation

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

# Commitments	and	Contingencies

The	information	set	forth	in	Note	14	(Commitments	and	Contingencies)	to	the	accompanying	Consolidated	Financial	Statements	included	in	Part	II,	Item	8	of this	Form	10-K	is	incorporated	herein	by	reference.

# Critical	Accounting	Policies	and	Estimates

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

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

# Revenue	Recognition

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

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

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

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

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

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

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

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

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

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

# Vendor	Programs

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

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

# Goodwill

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

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

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

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

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

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

# December	1,	2015	Impairment	Analysis

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

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

|  | As	of	December	31,	2014 |  |
| :--- | :--- | :--- |
| (in\tmillions) | Percentage\nFair\tValue\nExceeds\nCarrying\tValue | Discount\tRate\nApplied\tto\nEstimated\tFuture\nCash\tFlows |
| Corporate | 169% | 9.0% |
| Public | 147% | 9.0% |
| Canada | 276% | 9.3% |
| CDW\tAdvanced\tServices | 78% | 11.5% |

# Intangible	assets

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

During	the	years	ended	December	31,	2015	and	2014,	we	concluded	our	intangible	assets	with	determinable	lives	were	not	impaired	and	no	significant	changes to	the	remaining	useful	lives	were	necessary.

# Income	Taxes

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

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

# Recent	Accounting	Pronouncements

The	information	set	forth	in	Note	2	(Recent	Accounting	Pronouncements)	to	the	accompanying	Consolidated	Financial	Statements	included	in	Part	II,	Item	8	of this	Form	10-K	is	incorporated	herein	by	reference.

# Subsequent	Events

The	information	set	forth	in	Note	19	(Subsequent	Events)	to	the	accompanying	Consolidated	Financial	Statements	included	in	Part	II,	Item	8	of	this	Form	10-K is	incorporated	herein	by	reference.

# Item	7A.	Quantitative	and	Qualitative	Disclosures	of	Market	Risks

# Interest	Rate	Risk

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

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

See	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	-	Liquidity	and	Capital	Resources	-	Contractual	Obligations" for	information	on	cash	flows,	interest	rates	and	maturity	dates	of	our	debt	obligations.

# Foreign	Currency	Risk

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

# Item	8.	Financial	Statements	and	Supplementary	Data

# Index	to	Consolidated	Financial	Statements

|  | Page |
| :--- | :--- |
| Report\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm | 55 |
| Consolidated\tBalance\tSheets\tas\tof\tDecember\t31,\t2015\tand\t2014 | 56 |
| Consolidated\tStatements\tof\tOperations\tfor\tthe\tyears\tended\tDecember\t31,\t2015,\t2014\tand\t2013 | 57 |
| Consolidated\tStatements\tof\tComprehensive\tIncome\tfor\tthe\tyears\tended\tDecember\t31,\t2015,\t2014\tand\t2013 | 58 |
| Consolidated\tStatements\tof\tStockholders'\tEquity\tfor\tthe\tyears\tended\tDecember\t31,\t2015,\t2014\tand\t2013 | 59 |
| Consolidated\tStatements\tof\tCash\tFlows\tfor\tthe\tyears\tended\tDecember\t31,\t2015,\t2014\tand\t2013 | 60 |
| Notes\tto\tConsolidated\tFinancial\tStatements | 61 |

# Report	of	Independent	Registered	Public	Accounting	Firm

# To	the	Board	of	Directors	and	Stockholders	of	CDW	Corporation

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

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

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

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

/s/	Ernst	&	Young	LLP

Chicago,	Illinois

# CONSOLIDATED	BALANCE	SHEETS

(in	millions,	except	per-share	amounts)

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Assets |  |  |
| Current\tassets: |  |  |
| Cash\tand\tcash\tequivalents | $37.6 | $344.5 |
|  | 2,017.4 | 1,561.1 |
| Merchandise\tinventory | 393.1 | 337.5 |
| Miscellaneous\treceivables | 198.4 | 155.6 |
| Prepaid\texpenses\tand\tother | 144.3 | 54.7 |
| Total\tcurrent\tassets | 2,790.8 | 2,453.4 |
| Property\tand\tequipment,\tnet | 175.4 | 137.2 |
| Equity\tinvestments | — | 86.7 |
| Goodwill | 2,500.4 | 2,217.6 |
| Other\tintangible\tassets,\tnet | 1,276.4 | 1,168.8 |
| Other\tassets | 12.3 | 12.2 |
| Total\tassets | $6,755.3 | $6,075.9 |
| Liabilities\tand\tStockholders'\tEquity |  |  |
| Current\tliabilities: |  |  |
| Accounts\tpayable-trade | $866.5 | $704.0 |
| Accounts\tpayable-inventory\tfinancing | 439.6 | 332.1 |
| Current\tmaturities\tof\tlong-term\tdebt | 27.2 | 15.4 |
| Deferred\trevenue | 151.9 | 81.3 |
| Accrued\texpenses: |  |  |
| Compensation | 120.4 | 130.1 |
| Interest | 25.1 | 28.1 |
| Sales\ttaxes | 38.1 | 29.1 |
| Advertising | 52.3 | 34.0 |
| Other | 166.2 | 113.9 |
| Total\tcurrent\tliabilities | 1,887.3 | 1,468.0 |
| Long-term\tliabilities: |  |  |
| Debt | 3,232.5 | 3,150.6 |
| Deferred\tincome\ttaxes | 469.6 | 475.0 |
| Other\tliabilities | 70.0 | 45.8 |
| Total\tlong-term\tliabilities | 3,772.1 | 3,671.4 |
| Commitments\tand\tcontingencies\t(Note\t14) |  |  |
| Stockholders'\tequity: |  |  |
|  | — | — |
|  | 1.7 | 1.7 |
| Paid-in\tcapital | 2,806.9 | 2,711.9 |
| Accumulated\tdeficit | (1,651.6) | (1,760.5) |
| Accumulated\tother\tcomprehensive\tloss | (61.1) | (16.6) |
| Total\tstockholders'\tequity | 1,095.9 | 936.5 |
| Total\tliabilities\tand\tstockholders'\tequity | $6,755.3 | $6,075.9 |

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

# CONSOLIDATED	STATEMENTS	OF	OPERATIONS

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tsales | $12,988.7 | $12,074.5 | $10,768.6 |
| Cost\tof\tsales | 10,872.9 | 10,153.2 | 9,008.3 |
| Gross\tprofit | 2,115.8 | 1,921.3 | 1,760.3 |
| Selling\tand\tadministrative\texpenses | 1,226.0 | 1,110.3 | 1,120.9 |
| Advertising\texpense | 147.8 | 138.0 | 130.8 |
| Income\tfrom\toperations | 742.0 | 673.0 | 508.6 |
| Interest\texpense,\tnet | (159.5) | (197.3) | (250.1) |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | (24.3) | (90.7) | (64.0) |
| Gain\ton\tremeasurement\tof\tequity\tinvestment | 98.1 | — | — |
| Other\t(expense)\tincome,\tnet | (9.3) | 2.7 | 1.0 |
| Income\tbefore\tincome\ttaxes | 647.0 | 387.7 | 195.5 |
| Income\ttax\texpense | (243.9) | (142.8) | (62.7) |
| Net\tincome | $403.1 | $244.9 | $132.8 |
| Net\tincome\tper\tcommon\tshare: |  |  |  |
| Basic | $2.37 | $1.44 | $0.85 |
| Diluted | $2.35 | $1.42 | $0.84 |
| Weighted-average\tcommon\tshares\toutstanding: |  |  |  |
| Basic | 170.3 | 170.6 | 156.6 |
| Diluted | 171.8 | 172.8 | 158.7 |
| Cash\tdividends\tdeclared\tper\tcommon\tshare | $0.3100 | $0.1950 | $0.0425 |

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME

(in	millions)

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tincome | $403.1 | $244.9 | $132.8 |
| respectively) | (44.5) | (10.3) | (6.7) |
| Other\tcomprehensive\tloss | (44.5) | (10.3) | (6.7) |
| Comprehensive\tincome | $358.6 | $234.6 | $126.1 |

# CONSOLIDATED	STATEMENTS	OF	STOCKHOLDERS'	EQUITY

|  | Preferred	Stock |  | Common	Stock |  |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Shares | Amount | Shares | Amount | Paid-in\nCapital | Accumulated\nDeficit | Accumulated\nOther\nComprehensive\t(Loss)\nIncome | Total\nStockholders'\nEquity |
| Balance\tat\tDecember\t31,\t2012 | — | $— | 145.2 | $1.4 | $2,207.7 | $(2,073.0) | $0.4 | $136.5 |
| Equity-based\tcompensation\texpense | — | — | — | — | 46.6 | — | — | 46.6 |
| Issuance\tof\tcommon\tstock | — | — | 26.8 | 0.3 | 424.4 | — | — | 424.7 |
| Repurchase\tof\tcommon\tstock | — | — | — | — | — | (0.2) | — | (0.2) |
| Dividends\tpaid | — | — | — | — | — | (7.3) |  | (7.3) |
| Reclassification\tto\tgoodwill\tfor\taccrued\tcharitable\ncontributions | — | — | — | — | 9.4 | — | — | 9.4 |
| Incentive\tcompensation\tplan\tunits\twithheld\tfor\ttaxes | — | — | — | — | — | (24.1) | — | (24.1) |
| Net\tincome | — | — | — | — | — | 132.8 | — | 132.8 |
| Foreign\tcurrency\ttranslation | — | — | — | — | — | — | (6.7) | (6.7) |
| Balance\tat\tDecember\t31,\t2013 | — | $— | 172.0 | $1.7 | $2,688.1 | $(1,971.8) | $(6.3) | $711.7 |
| Equity-based\tcompensation\texpense | — | — | — | — | 16.4 | — | — | 16.4 |
| Stock\toption\texercises | — | — | — | — | 1.3 | — | — | 1.3 |
| Excess\ttax\tbenefits\tfrom\tequity-based\tcompensation | — | — | — | — | 0.3 | — | — | 0.3 |
| Coworker\tstock\tpurchase\tplan | — | — | 0.2 | — | 5.8 | — | — | 5.8 |
| Dividends\tpaid | — | — | — | — | — | (33.6) | — | (33.6) |
| Net\tincome | — | — | — | — | — | 244.9 | — | 244.9 |
| Foreign\tcurrency\ttranslation | — | — | — | — | — | — | (10.3) | (10.3) |
| Balance\tat\tDecember\t31,\t2014 | — | $— | 172.2 | $1.7 | $2,711.9 | $(1,760.5) | $(16.6) | $936.5 |
| Equity-based\tcompensation\texpense | — | — | — | — | 28.3 | — | — | 28.3 |
| Stock\toption\texercises | — | — | 0.1 | — | 2.4 | — | — | 2.4 |
| Common\tstock\tissued\tfor\tequity-based\tcompensation | — | — | 0.3 | — | — | — | — | — |
| Excess\ttax\tbenefits\tfrom\tequity-based\tcompensation | — | — | — | — | 0.6 | — | — | 0.6 |
| Coworker\tstock\tpurchase\tplan | — | — | 0.3 | — | 8.7 | — | — | 8.7 |
| Common\tstock\tissued\tfor\tacquisition\tof\tbusiness | — | — | 1.6 | — | 55.0 | — | — | 55.0 |
| Dividends\tpaid | — | — | — | — | — | (52.9) | — | (52.9) |
| Net\tincome | — | — | — | — | — | 403.1 | — | 403.1 |
| Repurchases\tof\tcommon\tstock | — | — | (6.3) | — | — | (241.3) | — | (241.3) |
| Foreign\tcurrency\ttranslation | — | — | — | — | — | — | (44.5) | (44.5) |
| Balance\tat\tDecember\t31,\t2015 | — | $— | 168.2 | $1.7 | $2,806.9 | $(1,651.6) | $(61.1) | $1,095.9 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Cash\tflows\tfrom\toperating\tactivities: |  |  |  |
| Net\tincome | $403.1 | $244.9 | $132.8 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization | 227.4 | 207.9 | 208.2 |
| Equity-based\tcompensation\texpense | 31.2 | 16.4 | 46.6 |
| Deferred\tincome\ttaxes | (54.5) | (89.1) | (48.7) |
| Amortization\tof\tdeferred\tfinancing\tcosts,\tdebt\tpremium\tand\tdebt\tdiscount,\tnet | 6.4 | 6.4 | 8.8 |
| Net\tloss\ton\textinguishments\tof\tlong-term\tdebt | 24.3 | 90.7 | 64.0 |
| Loss\t(income)\tfrom\tequity\tinvestments | 11.2 | (1.2) | — |
| Gain\ton\tremeasurement\tof\tequity\tinvestment | (98.1) | — | — |
| Other | 2.4 | 0.8 | 1.7 |
| Changes\tin\tassets\tand\tliabilities: |  |  |  |
| Accounts\treceivable | (342.6) | (117.6) | (170.8) |
| Merchandise\tinventory | (31.5) | 44.2 | (67.5) |
| Other\tassets | (71.2) | (18.7) | (10.1) |
| Accounts\tpayable-trade | 100.5 | 43.7 | 146.1 |
| Other\tcurrent\tliabilities | 47.5 | 1.7 | 64.1 |
| Long-term\tliabilities | 21.4 | 4.9 | (8.9) |
| Net\tcash\tprovided\tby\toperating\tactivities | 277.5 | 435.0 | 366.3 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |
| Capital\texpenditures | (90.1) | (55.0) | (47.1) |
| Payment\tfor\tequity\tinvestment | — | (86.8) | — |
| Payment\tof\taccrued\tcharitable\tcontribution\trelated\tto\tthe\tMPK\tCoworker\tIncentive\tPlan\tII | — | (20.9) | — |
| Premium\tpayments\ton\tinterest\trate\tcap\tagreements | (0.5) | (2.1) | — |
| Acquisition\tof\tbusiness,\tnet\tof\tcash\tacquired | (263.8) | — | — |
| Net\tcash\tused\tin\tinvesting\tactivities | (354.4) | (164.8) | (47.1) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |
| Proceeds\tfrom\tborrowings\tunder\trevolving\tcredit\tfacility | 314.5 | — | 63.0 |
| Repayments\tof\tborrowings\tunder\trevolving\tcredit\tfacility | (314.5) | — | (63.0) |
| Repayments\tof\tlong-term\tdebt | (32.8) | (15.4) | (51.1) |
| Proceeds\tfrom\tissuance\tof\tlong-term\tdebt | 525.0 | 1,175.0 | 1,535.2 |
| Payments\tto\textinguish\tlong-term\tdebt | (525.3) | (1,299.0) | (2,047.4) |
| Payments\tof\tdebt\tfinancing\tcosts | (6.8) | (21.9) | (6.1) |
| Net\tchange\tin\taccounts\tpayable-inventory\tfinancing | 95.9 | 75.5 | 7.4 |
| Proceeds\tfrom\tissuance\tof\tcommon\tstock | — | — | 424.7 |
| Proceeds\tfrom\tstock\toption\texercises | 2.4 | 1.3 | — |
| Proceeds\tfrom\tCoworker\tStock\tPurchase\tPlan | 8.7 | 5.8 | — |
| Repurchases\tof\tcommon\tstock | (241.3) | — | (0.2) |
| Dividends\tpaid | (52.9) | (33.6) | (7.3) |
| Excess\ttax\tbenefits\tfrom\tequity-based\tcompensation | 0.6 | 0.3 | 0.6 |
| Payment\tof\tincentive\tcompensation\tplan\twithholding\ttaxes | — | — | (24.1) |
| Net\tcash\tused\tin\tfinancing\tactivities | (226.5) | (112.0) | (168.3) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | (3.5) | (1.8) | (0.7) |
| Net\t(decrease)\tincrease\tin\tcash\tand\tcash\tequivalents | (306.9) | 156.4 | 150.2 |
| Cash\tand\tcash\tequivalents\t–\tbeginning\tof\tperiod | 344.5 | 188.1 | 37.9 |
| Cash\tand\tcash\tequivalents\t–\tend\tof\tperiod | $37.6 | $344.5 | $188.1 |
| Supplementary\tdisclosure\tof\tcash\tflow\tinformation: |  |  |  |
| Interest\tpaid | $(154.6) | $(195.8) | $(267.6) |
| Taxes\tpaid,\tnet | $(300.2) | $(241.2) | $(82.5) |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# 1. Description	of	Business	and	Summary	of	Significant	Accounting	Policies

# Description	of	Business

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

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

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

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

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

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

# Basis	of	Presentation

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

# Principles	of	Consolidation

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

# Use	of	Estimates

The	preparation	of	the	Consolidated	Financial	Statements	in	accordance	with	GAAP	requires	management	to	make	use	of	certain	estimates	and	assumptions that	affect	 the	reported	amounts	of	assets	and	 liabilities	and	disclosure	of	contingent	assets	and	 liabilities	as	of	 the	date	 of	 the	 Consolidated	 Financial Statements	and	the	reported	amounts	of	revenue	and	expenses	during	the	reported	periods.	The	Company	bases	its	estimates	on	historical	experience	and	on various	other	assumptions	that	management	believes	are	reasonable	under	the	circumstances,	the	results	of	which	form	the	basis	for	making	judgments	about carrying	values	of	assets	and	liabilities	that	are	not	readily	apparent	from	other	sources.	Actual	results	could	differ	from	those	estimates.

# Business	Combinations

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

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

# Cash	and	Cash	Equivalents

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

# Accounts	Receivable

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

# Merchandise	Inventory

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

# Miscellaneous	Receivables

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

# Property	and	Equipment

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

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

# Equity	Investments

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

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

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

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

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

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

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

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

# Deferred	Financing	Costs

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

# Derivatives

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

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

# Fair	Value	Measurements

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

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

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

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

# Accumulated	Other	Comprehensive	Loss

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

The	components	of	accumulated	other	comprehensive	loss	are	as	follows:

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Foreign\tcurrency\ttranslation | $(61.1) | \t $(16.6) | \t $(6.3) |
| Accumulated\tother\tcomprehensive\tloss | $(61.1) | \t $(16.6) | \t $(6.3) |

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

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

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

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

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

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

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

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

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

# Sales	Taxes

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

# Advertising

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

# Equity-Based	Compensation

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

# Interest	Expense

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

# Foreign	Currency	Translation

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

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

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

# Balance	Sheet	Classification	of	Deferred	Taxes

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

# Accounting	for	Measurement	Period	Adjustments	in	a	Business	Combination

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

# Simplifying	the	Measurement	of	Inventory

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

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

# Debt	Issuance	Costs

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

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

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

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

| (in	millions) | As	Previously	Reported | 15 |
| :--- | :--- | :--- |
| Deferred\tfinancing\tcosts,\tnet | $33.0 | \t $— |
| Other\tassets | $3.2 | \t $12.2 |
| Long-term\tdebt | $(3,174.6) | \t $(3,150.6) |

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

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

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

A	summary	of	the	total	consideration	transferred	is	as	follows:

| (in	millions) | Acquisition-Date	Fair	Value |
| :--- | :--- |
| Cash | \t $291.6 |
| Fair\tvalue\tof\tCDW\tcommon\tstock\t(1) | 33.2 |
| Fair\tvalue\tof\tpreviously\theld\tequity\tinvestment\ton\tthe\tdate\tof\tacquisition\t(2) | 174.9 |
| Total\tconsideration | \t $499.7 |

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

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

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

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

| (in	millions) | Acquisition-Date	Fair	Value	(1) |
| :--- | :--- |
| Cash | \t $27.8 |
| Accounts\treceivable | 135.7 |
| Merchandise\tinventory | 27.1 |
| Property\tand\tequipment,\tnet | 11.4 |
| Identified\tintangible\tassets\t(2) | 289.8 |
| Other\tassets | 53.5 |
| Total\tassets\tacquired | 545.3 |
| Accounts\tpayable\t(3) | (86.1) |
| Deferred\trevenue | (57.2) |
| Other\tliabilities | (40.7) |
| Deferred\ttax\tliabilities | (55.3) |
| Debt | (111.5) |
| Total\tliabilities\tassumed | (350.8) |
| Total\tidentifiable\tnet\tassets | 194.5 |
| Goodwill | 305.2 |
| Total\tpurchase\tprice | \t $499.7 |

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

(2) Details of the identified intangible assets acquired are as follows:

(3) Accounts payable includes both	 Accounts payable-trade and	 Accounts payable-inventory financing.

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

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

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

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

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

| (in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Net\tsales | $13,507.6 | \t $12,933.1 |
| Net\tincome | 363.7 | 243.1 |

The	unaudited	pro	forma	information	above	reflects	the	following	adjustments:

(1) Excludes acquisition and integration expenses directly related to the transaction.

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

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

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

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

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

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

Property	and	equipment	consists	of	the	following:

| (in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Land | \t $27.7 | \t $27.7 |
| Machinery\tand\tequipment | 56.8 | 54.3 |
| Building\tand\tleasehold\timprovements | 126.7 | 105.1 |
| Computer\tand\tdata\tprocessing\tequipment | 99.6 | 65.6 |
| Computer\tsoftware | 10.3 | 10.6 |
| Furniture\tand\tfixtures | 29.4 | 21.7 |
| Construction\tin\tprogress | 23.9 | 24.7 |
| Property\tand\tequipment | 374.4 | 309.7 |
| Less:\taccumulated\tdepreciation | 199.0 | 172.5 |
| Property\tand\tequipment,\tnet | \t $175.4 | \t $137.2 |

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

# 5. Goodwill	and	Other	Intangible	Assets

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

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

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

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

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

# Other	Intangible	Assets

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

| December	31,	2015 | Gross<br>Carrying<br>Amount | Accumulated<br>Amortization | Net	Carrying	Amount |
| :--- | :--- | :--- | :--- |
| Customer\trelationships\tand\tcontracts | \t $2,128.3 | \t $1,162.0 | \t $966.3 |
| Trade\tname | 422.3 | 173.9 | 248.4 |
| Internally\tdeveloped\tsoftware | 136.5 | 77.7 | 58.8 |
| Other | 5.8 | 2.9 | 2.9 |
| Total | \t $2,692.9 | \t $1,416.5 | \t $1,276.4 |
| December\t31,\t2014 |  |  |  |
| Customer\trelationships | \t $1,859.7 | \t $1,012.1 | \t $847.6 |
| Trade\tname | 421.0 | 152.0 | 269.0 |
| Internally\tdeveloped\tsoftware | 110.1 | 58.9 | 51.2 |
| Other | 3.2 | 2.2 | 1.0 |
| Total | \t $2,394.0 | \t $1,225.2 | \t $1,168.8 |

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

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

| (in	millions) |  |
| :--- | :--- |
| Years\tending\tDecember\t31, | Estimated\tFuture\tAmortization\nExpense |
| 2016 | \t $213.7 |
| 2017 | 207.1 |
| 2018 | 191.3 |
| 2019 | 178.0 |
| 2020 | 157.3 |

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

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

| (in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Revolving\tLoan\tinventory\tfinancing\tagreement | $427.0 | \t $330.1 |
| Other\tinventory\tfinancing\tagreements | 12.6 | 2.0 |
| Accounts\tpayable-inventory\tfinancing | $439.6 | \t $332.1 |

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

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

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

# 7. Lease	Commitments

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

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

| (in	millions) |  |
| :--- | :--- |
| Years\tending\tDecember\t31, | Future\tMinimum\tLease\nPayments |
| 2016 | \t $22.5 |
| 2017 | 22.1 |
| 2018 | 19.6 |
| 2019 | 19.0 |
| 2020 | 18.1 |
| Thereafter | 41.9 |
| Total\tfuture\tminimum\tlease\tpayments\t(1) | \t $143.2 |

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

# 8. Long-Term	Debt

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

| (dollars	in	millions) | Interest	Rate | Principal | Unamortized	Discount,<br>Premium,	and	Deferred<br>Financing	Costs(1) | Total |
| :--- | :--- | :--- | :--- | :--- |
| Year\tEnded\tDecember\t31,\t2015 |  |  |  |  |
| Senior\tsecured\tasset-based\trevolving\tcredit\tfacility | —% \t $ | — | \t $— | \t $— |
| Kelway\trevolving\tcredit\tfacility | —% | — | — | — |
| Senior\tsecured\tterm\tloan\tfacility | 3.25% | 1,498.1 | (6.7) | 1,491.4 |
| Kelway\tterm\tloan | 1.98% | 88.4 | (0.6) | 87.8 |
| Senior\tnotes\tdue\t2022 | 6.0% | 600.0 | (6.6) | 593.4 |
| Senior\tnotes\tdue\t2023 | 5.0% | 525.0 | (6.2) | 518.8 |
| Senior\tnotes\tdue\t2024 | 5.5% | 575.0 | (6.7) | 568.3 |
| Total\tlong-term\tdebt |  | 3,286.5 | (26.8) | 3,259.7 |
| Less\tcurrent\tmaturities\tof\tlong-term\tdebt |  | (27.2) | — | (27.2) |
| Long-term\tdebt,\texcluding\tcurrent\tmaturities |  | \t $3,259.3 | \t $(26.8) | \t $3,232.5 |
| Year\tEnded\tDecember\t31,\t2014 |  |  |  |  |
| Senior\tsecured\tasset-based\trevolving\tcredit\tfacility | —% \t $ | — | \t $— | \t $— |
| Senior\tsecured\tterm\tloan\tfacility | 3.25% | 1,513.50 | (8.3) | 1,505.2 |
| Senior\tnotes\tdue\t2019(2) | 8.5% | 503.9 | (3.1) | 500.8 |
| Senior\tnotes\tdue\t2022 | 6.0% | 600.0 | (7.6) | 592.4 |
| Senior\tnotes\tdue\t2024 | 5.5% | 575.0 | (7.4) | 567.6 |
| Total\tlong-term\tdebt |  | 3,192.4 | (26.4) | 3,166.0 |
| Less\tcurrent\tmaturities\tof\tlong-term\tdebt |  | (15.4) | — | (15.4) |
| Long-term\tdebt,\texcluding\tcurrent\tmaturities |  | \t $3,177.0 | \t $(26.4) | \t $3,150.6 |

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

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

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

Senior	Secured	Asset-Based	Revolving	Credit	Facility	("Revolving	Loan")

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

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

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

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

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

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

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

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

# Senior	Secured	Term	Loan	Facility	("Term	Loan")

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

# Kelway	Term	Loan	("Kelway	Term	Loan")

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

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

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

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

# Kelway	Revolving	Credit	Facility	("Kelway	Credit	Facility")

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

# Long-Term	Debt	Maturities

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

# Fair	Value

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

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

# Taxes

Income	before	income	taxes	was	taxed	under	the	following	jurisdictions:

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Domestic | $626.4 | \t $366.6 | \t $179.4 |
| Foreign | 20.6 | 21.1 | 16.1 |
| Total | $647.0 | \t $387.7 | \t $195.5 |

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

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Current: |  |  |  |
| Federal | $258.5 | \t $206.8 | \t $96.7 |
| State | 28.6 | 19.3 | 10.1 |
| Foreign | 10.1 | 5.8 | 4.6 |
| Total\tcurrent | 297.2 | 231.9 | 111.4 |
| Deferred: |  |  |  |
| Domestic | (48.5) | (89.0) | (48.6) |
| Foreign | (4.8) | (0.1) | (0.1) |
| Total\tdeferred | (53.3) | (89.1) | (48.7) |
| Income\ttax\texpense | $243.9 | \t $142.8 | \t $62.7 |

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

| Statutory	federal	income	tax	rate | $226.4 | 35.0	% 	 $ | 135.7 | 35.0	% 	 $ | 68.4 | 35.0	% |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| State\ttaxes,\tnet\tof\tfederal\teffect | 16.5 | 2.6 | 6.5 | 1.6 | (5.0) | (2.6) |
| Effect\tof\trates\tdifferent\tthan\tstatutory | (1.9) | (0.3) | (1.9) | (0.5) | (1.4) | (0.7) |
| Foreign\twithholding\ttax | 3.3 | 0.5 | — | — | — | — |
| Effect\tof\tU.K.\ttax\trate\tchange\ton\tdeferred\ttaxes | (4.0) | (0.6) | — | — | — | — |
| Other | 3.6 | 0.5 | 2.5 | 0.7 | 0.7 | 0.4 |
| Effective\ttax\trate | \t $243.9 | 37.7\t% \t $ | 142.8 | 36.8\t% \t $ | 62.7 | 32.1\t% |

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

| (in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |
| Deferred\tinterest | \t $25.0 | \t $32.9 |
| State\tnet\toperating\tloss\tand\tcredit\tcarryforwards,\tnet | 14.1 | 18.8 |
| Payroll\tand\tbenefits | 21.2 | 27.0 |
| Rent | 10.8 | 5.5 |
| Accounts\treceivable | 6.4 | 6.3 |
| Equity\tcompensation\tplans | 17.0 | 6.5 |
| Trade\tcredits | 1.5 | 1.5 |
| Other | 5.9 | 5.0 |
| Total\tdeferred\ttax\tassets | 101.9 | 103.5 |
| Deferred\ttax\tliabilities: |  |  |
| Software\tand\tintangibles | 411.0 | 425.3 |
| Deferred\tincome | 87.3 | 116.2 |
| Property\tand\tequipment | 30.6 | 22.5 |
| International\tinvestments | 30.4 | — |
| Other | 17.3 | 15.3 |
| Total\tdeferred\ttax\tliabilities | 576.6 | 579.3 |
| Deferred\ttax\tasset\tvaluation\tallowance | — | — |
| Net\tdeferred\ttax\tliabilities | \t $474.7 | \t $475.8 |

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

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

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

# 10. Stockholders'	Equity

# Public	Offerings

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

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

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

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

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

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

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

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

|  | Completion	Date	of	Secondary |  | Completion	Date	of | Secondary	Offering	Expenses |
| :--- | :--- | :--- | :--- | :--- |
| Secondary\tOffering\tShares | Offering | Overallotment\tShares(1) | Overallotment\tShares | (in\tmillions) |
| 15,000,000 | 11/19/2013 | 2,250,000 | 12/18/2013 | \t $0.6 |
| 10,000,000 | 3/12/2014 | 1,500,000 | 3/12/2014 | \t $0.4 |
| 15,000,000 | 5/28/2014 | 2,250,000 | 6/4/2014 | \t $0.5 |
| 15,000,000 | \t\t9/8/2014(2) | — | — | \t $0.3 |
| 15,000,000 | 12/8/2014 | 2,250,000 | 12/8/2014 | \t $0.2 |
| 10,000,000 | 5/22/2015 | 1,500,000 | 5/22/2015 | \t $0.3 |
| 11,250,000 | 8/18/2015 | 1,687,500 | 8/18/2015 | \t $0.2 |
| 8,000,000 | 11/30/2015 | 1,200,000 | 12/9/2015 | \t $0.4 |

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

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

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

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

| (in	millions) | 2015 | 2014 | 2013	(1) |
| :--- | :--- | :--- | :--- |
| Equity-based\tcompensation\texpense | $31.2 | \t $16.4 | \t $46.6 |
| Income\ttax\tbenefit | (10.9) | (5.1) | (16.5) |
| Equity-based\tcompensation\texpense\t(net\tof\ttax) | $20.3 | \t $11.3 | \t $30.1 |

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

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

# 2013	Long-Term	Incentive	Plan

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

# Stock	Options

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

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Grant\tdate\tfair\tvalue | \t $11.13 | \t $7.23 | \t $4.75 |
| Volatility\t(1) | 30.00% | 30.00% | 35.00% |
| Risk-free\trate\t(2) | 1.75% | 1.77% | 1.58% |
| Expected\tdividend\tyield | 0.72% | 0.70% | 1.00% |
| Expected\tterm\t(in\tyears)\t(3) | 6.0 | 6.0 | 5.4 |

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

(2) Based on a composite	 U.S.	 Treasury rate.

(3) Calculated	using	the	simplified	method,	which	defines	the	expected	term	as	the	average	of	the	option's	contractual	term	and	the	option's	weighted- average	vesting	period.	The	Company	utilizes	this	method	as	it	has	limited	historical	stock	option	data	that	is	sufficient	to	derive	a	reasonable	estimate of	the	expected	stock	option	term.

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

| Options | Number	of	Options | Weighted-Average<br>Exercise	Price | Weighted-Average<br>Remaining	Contractual<br>Term	(years) | Aggregate	Intrinsic<br>Value	(millions) |
| :--- | :--- | :--- | :--- | :--- |
| Outstanding\tat\tJanuary\t1,\t2015 | 2,421,072 | \t $20.75 |  |  |
| Granted | 936,865 | 37.82 |  |  |
| Forfeited/Expired | (59,554) | 29.49 |  |  |
| Exercised\t(1) | (101,162) | 21.11 |  |  |
| Outstanding\tat\tDecember\t31,\t2015 | 3,197,221 | \t $25.58 | 7.8 \t $ | 52.6 |
| Exercisable\tat\tDecember\t31,\t2015 | 1,146,008 | \t $19.39 | 6.9 \t $ | 26.0 |
| Vested\tand\texpected\tto\tvest\tat\tDecember\t31,\t2015 | 2,018,385 | \t $29.02 | 8.3 \t $ | 26.3 |

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

# Restricted	Stock	Units	("RSUs")

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

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

|  | Number	of	Units | Weighted-Average<br>Grant-Date	Fair	Value |
| :--- | :--- | :--- |
| Nonvested\tat\tJanuary\t1,\t2015 | 1,244,702 | \t $17.19 |
| Granted\t(1) | 141,013 | 36.24 |
| Vested\t(2) | (32,181) | 23.01 |
| Forfeited | (96,135) | 17.01 |
| Nonvested\tat\tDecember\t31,\t2015 | 1,257,399 | \t $19.19 |

# Performance	Share	Units	("PSUs")

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

# Performance	Share	Awards	("PSAs")

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

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

# Restricted	Stock

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

# Equity	Awards	Granted	by	Seller	of	Kelway

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

# Pre-IPO	Equity	Awards

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

# Class	B	Common	Units

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

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

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

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

|  | Year	Ended	December	31, |
| :--- | :--- |
|  | 2013 |
| Grant\tdate\tfair\tvalue | \t $119.00 |
| Volatility\t(1) | 65.50% |
| Risk-free\trate\t(2) | 0.18% |
| Expected\tdividend\tyield | 0.00% |

# MPK	II	Units

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

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

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

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

|  | Class	B<br>Common	Units | MPK	Plan<br>Units |
| :--- | :--- | :--- |
| Outstanding\tat\tJanuary\t1,\t2013 | 216,483 | 66,137 |
| Granted | 400 | — |
| Forfeited | (860) | (2,228) |
| Converted/Settled\t(1) | (216,023) | (63,909) |
| Outstanding\tat\tDecember\t31,\t2013 | — | — |
| Vested\tat\tDecember\t31,\t2013 | — | — |

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

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

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

# 12. Earnings Per Share

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

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

| (in	millions) | 2015 | 2014 | 2013	(1) |
| :--- | :--- | :--- | :--- |
| Basic\tweighted-average\tshares\toutstanding | 170.3 | 170.6 | 156.6 |
| Effect\tof\tdilutive\tsecurities\t(2) | 1.5 | 2.2 | 2.1 |
| Diluted\tweighted-average\tshares\toutstanding\t(3) | 171.8 | 172.8 | 158.7 |

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

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

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

# 13. Coworker	Retirement	and	Other	Compensation	Benefits

# Profit	Sharing	Plan	and	Other	Savings	Plans

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

# Coworker	Stock	Purchase	Plan

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

# Restricted	Debt	Unit	Plan

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

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

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

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

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

# 15.				Related	Party	Transactions

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

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

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

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

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

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

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

# 16.				Segment	Information

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

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

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

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

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

# Selected	Segment	Financial	Information

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

| (in	millions) | Corporate | Public | Other | Headquarters | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 2015: |  |  |  |  |  |
| Net\tsales | $6,816.4 | \t $5,125.5 | \t $1,046.8 | \t $— | \t $12,988.7 |
| Income\t(loss)\tfrom\toperations | 470.1 | 343.3 | 43.1 | (114.5) | 742.0 |
| Depreciation\tand\tamortization\texpense | (96.0) | (43.7) | (24.4) | (63.3) | (227.4) |
| 2014: |  |  |  |  |  |
| Net\tsales | $6,475.5 | \t $4,879.4 | \t $719.6 | \t $— | \t $12,074.5 |
| Income\t(loss)\tfrom\toperations | 439.8 | 313.2 | 32.9 | (112.9) | 673.0 |
| Depreciation\tand\tamortization\texpense | (96.3) | (43.8) | (8.8) | (59.0) | (207.9) |
| 2013: |  |  |  |  |  |
| Net\tsales | $5,960.1 | \t $4,164.5 | \t $644.0 | \t $— | \t $10,768.6 |
| Income\t(loss)\tfrom\toperations(1) | 363.3 | 246.5 | 27.2 | (128.4) | 508.6 |
| Depreciation\tand\tamortization\texpense | (97.3) | (44.0) | (8.6) | (58.3) | (208.2) |

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

# Geographic	Areas	and	Revenue	Mix

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

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

|  | Year	Ended<br>December	31,	2015 |  | Year	Ended<br>December	31,	2014 |  | Year	Ended<br>December	31,	2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Dollars\tin\nMillions | Percentage\nof\tTotal\tNet\nSales | Dollars\tin\nMillions | Percentage\nof\tTotal\tNet\nSales | Dollars\tin\nMillions | Percentage\nof\tTotal\tNet\nSales |
| Notebooks/Mobile\tDevices | $2,539.4 | 19.6% | \t $2,354.0 | 19.5% | \t $1,696.5 | 15.8% |
| Netcomm\tProducts | 1,914.9 | 14.7 | 1,613.3 | 13.4 | 1,482.7 | 13.8 |
| Enterprise\tand\tData\tStorage\n(Including\tDrives) | 1,065.2 | 8.2 | 1,024.2 | 8.5 | 999.3 | 9.3 |
| Other\tHardware | 4,756.4 | 36.6 | 4,551.1 | 37.6 | 4,184.1 | 38.8 |
| Software | 2,163.6 | 16.7 | 2,064.1 | 17.1 | 1,982.4 | 18.4 |
| Services | 478.0 | 3.7 | 371.9 | 3.1 | 332.7 | 3.1 |
| Other\t(1) | 71.2 | 0.5 | 95.9 | 0.8 | 90.9 | 0.8 |
| Total\tNet\tsales | $12,988.7 | 100.0% | \t $12,074.5 | 100.0% | \t $10,768.6 | 100.0% |

# 17.				Supplemental	Guarantor	Information

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

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

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

# Condensed	Consolidating	Balance	Sheet

| (in	millions) | Parent<br>Guarantor | Subsidiary<br>Issuer | Guarantor<br>Subsidiaries | Non-Guarantor<br>Subsidiaries | Co-Issuer | Consolidating<br>Adjustments | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |  |  |
| Current\tassets: |  |  |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $— | $45.1 | $— | $31.9 | $— | $(39.4) | $37.6 |
| Accounts\treceivable,\tnet | — | — | 1,788.6 | 228.8 | — | — | 2,017.4 |
| Merchandise\tinventory | — | — | 340.3 | 52.8 | — | — | 393.1 |
| Miscellaneous\treceivables | — | 83.7 | 90.1 | 24.6 | — | — | 198.4 |
| Prepaid\texpenses\tand\tother | — | 13.0 | 50.4 | 84.0 | — | (3.1) | 144.3 |
| Total\tcurrent\tassets | — | 141.8 | 2,269.4 | 422.1 | — | (42.5) | 2,790.8 |
| Property\tand\tequipment,\tnet | — | 110.0 | 54.1 | 11.3 | — | — | 175.4 |
| Equity\tinvestments | — | — | — | — | — | — | — |
| Goodwill | — | 751.8 | 1,439.0 | 309.6 | — | — | 2,500.4 |
| Other\tintangible\tassets,\tnet | — | 306.0 | 704.9 | 265.5 | — | — | 1,276.4 |
| Other\tassets | 3.8 | 17.3 | 263.0 | 3.0 | — | (274.8) | 12.3 |
| Investment\tin\tand\tadvances\tto\nsubsidiaries | 1,092.1 | 3,302.0 | — | — | — | (4,394.1) | — |
| Total\tassets | $1,095.9 | $4,628.9 | $4,730.4 | $1,011.5 | $— | $(4,711.4) | $6,755.3 |
| Liabilities\tand\tStockholders'\tEquity |  |  |  |  |  |  |  |
| Current\tliabilities: |  |  |  |  |  |  |  |
| Accounts\tpayable-trade | $— | $31.0 | $727.4 | $147.5 | $— | $(39.4) | $866.5 |
| Accounts\tpayable-inventory\nfinancing | — | — | 428.4 | 11.4 | — | (0.2) | 439.6 |
| Current\tmaturities\tof\tlong-term\tdebt | — | 15.4 | — | 11.8 | — | — | 27.2 |
| Deferred\trevenue | — | — | 77.4 | 74.5 | — | — | 151.9 |
| Accrued\texpenses | — | 156.0 | 190.9 | 58.6 | — | (3.4) | 402.1 |
| Total\tcurrent\tliabilities | — | 202.4 | 1,424.1 | 303.8 | — | (43.0) | 1,887.3 |
| Long-term\tliabilities: |  |  |  |  |  |  |  |
| Debt | — | 3,156.5 | — | 76.0 | — | — | 3,232.5 |
| Deferred\tincome\ttaxes | — | 117.3 | 272.8 | 83.4 | — | (3.9) | 469.6 |
| Other\tliabilities | — | 60.7 | 2.9 | 276.8 | — | (270.4) | 70.0 |
| Total\tlong-term\tliabilities | — | 3,334.5 | 275.7 | 436.2 | — | (274.3) | 3,772.1 |
| Total\tstockholders'\tequity | 1,095.9 | 1,092.0 | 3,030.6 | 271.5 | — | (4,394.1) | 1,095.9 |
| Total\tliabilities\tand\tstockholders'\nequity | $1,095.9 | $4,628.9 | $4,730.4 | $1,011.5 | $— | $(4,711.4) | $6,755.3 |

| (in	millions) | Parent<br>Guarantor | Subsidiary<br>Issuer | Guarantor<br>Subsidiaries | Non-Guarantor<br>Subsidiary | Co-Issuer | Consolidating<br>Adjustments | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |  |  |
| Current\tassets: |  |  |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $— | $346.4 | $— | $24.6 | $— | $(26.5) | $344.5 |
| Accounts\treceivable,\tnet | — | — | 1,479.1 | 82.0 | — | — | 1,561.1 |
| Merchandise\tinventory | — | — | 333.9 | 3.6 | — | — | 337.5 |
| Miscellaneous\treceivables | — | 56.1 | 93.3 | 6.2 | — | — | 155.6 |
| Prepaid\texpenses\tand\tother | — | 11.0 | 46.0 | 1.5 | — | (3.8) | 54.7 |
| Total\tcurrent\tassets | — | 413.5 | 1,952.3 | 117.9 | — | (30.3) | 2,453.4 |
| Property\tand\tequipment,\tnet | — | 80.5 | 55.5 | 1.2 | — | — | 137.2 |
| Equity\tinvestments | — | 86.7 | — | — | — | — | 86.7 |
| Goodwill | — | 751.8 | 1,439.0 | 26.8 | — | — | 2,217.6 |
| Other\tintangible\tassets,\tnet | — | 320.0 | 843.6 | 5.2 | — | — | 1,168.8 |
| Other\tassets | 4.3 | 12.2 | 0.4 | 1.4 | — | (6.1) | 12.2 |
| Investment\tin\tand\tadvances\tto\nsubsidiaries | 932.2 | 2,784.5 | — | — | — | (3,716.7) | — |
| Total\tassets | $936.5 | $4,449.2 | $4,290.8 | $152.5 | $— | $(3,753.1) | $6,075.9 |
| Liabilities\tand\tStockholders'\tEquity |  |  |  |  |  |  |  |
| Current\tliabilities: |  |  |  |  |  |  |  |
| Accounts\tpayable-trade | $— | $23.9 | $671.9 | $34.7 | $— | $(26.5) | $704.0 |
| Accounts\tpayable-inventory\nfinancing | — | — | 332.1 | — | — | — | 332.1 |
| Current\tmaturities\tof\tlong-term\tdebt | — | 15.4 | — | — | — | — | 15.4 |
| Deferred\trevenue | — | — | 79.9 | 1.4 | — | — | 81.3 |
| Accrued\texpenses | — | 137.8 | 193.6 | 7.9 | — | (4.1) | 335.2 |
| Total\tcurrent\tliabilities | — | 177.1 | 1,277.5 | 44.0 | — | (30.6) | 1,468.0 |
| Long-term\tliabilities: |  |  |  |  |  |  |  |
| Debt | — | 3,150.6 | — | — | — | — | 3,150.6 |
| Deferred\tincome\ttaxes | — | 146.7 | 331.3 | 1.3 | — | (4.3) | 475.0 |
| Other\tliabilities | — | 42.6 | 3.7 | 1.0 | — | (1.5) | 45.8 |
| Total\tlong-term\tliabilities | — | 3,339.9 | 335.0 | 2.3 | — | (5.8) | 3,671.4 |
| Total\tstockholders'\tequity | 936.5 | 932.2 | 2,678.3 | 106.2 | — | (3,716.7) | 936.5 |
| Total\tliabilities\tand\tstockholders'\nequity | $936.5 | $4,449.2 | $4,290.8 | $152.5 | $— | $(3,753.1) | $6,075.9 |

# Consolidating	Statement	of	Operations

|  |  |  | Year	Ended	December	31,	2015 |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiaries | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Net\tsales | $— | $— | $12,151.2 | $837.5 | $— | $— | $12,988.7 |
| Cost\tof\tsales | — | — | 10,158.6 | 714.3 | — | — | 10,872.9 |
| Gross\tprofit | — | — | 1,992.6 | 123.2 | — | — | 2,115.8 |
| Selling\tand\tadministrative\texpenses | — | 114.5 | 1,020.9 | 90.6 | — | — | 1,226.0 |
| Advertising\texpense | — | — | 143.2 | 4.6 | — | — | 147.8 |
| Income\t(loss)\tfrom\toperations | — | (114.5) | 828.5 | 28.0 | — | — | 742.0 |
| Interest\t(expense)\tincome,\tnet | — | (158.3) | 2.3 | (3.5) | — | — | (159.5) |
| Net\tloss\ton\textinguishments\tof\tlong-term\ndebt | — | (24.3) | — | — | — | — | (24.3) |
| Management\tfee | — | 4.2 | — | (4.2) | — | — | — |
| Gain\ton\tremeasurement\tof\tequity\ninvestment | — | — | — | 98.1 | — | — | 98.1 |
| Other\tincome\t(expense),\tnet | — | (11.1) | 1.6 | 0.2 | — | — | (9.3) |
| Income\t(loss)\tbefore\tincome\ttaxes | — | (304.0) | 832.4 | 118.6 | — | — | 647.0 |
| Income\ttax\tbenefit\t(expense) | — | 103.3 | (307.2) | (40.0) | — | — | (243.9) |
| Income\t(loss)\tbefore\tequity\tin\tearnings\tof\nsubsidiaries | — | (200.7) | 525.2 | 78.6 | — | — | 403.1 |
| Equity\tin\tearnings\tof\tsubsidiaries | 403.1 | 603.8 | — | — | — | (1,006.9) | — |
| Net\tincome | $403.1 | $403.1 | $525.2 | $78.6 | $— | $(1,006.9) | $403.1 |

|  |  |  | Year	Ended	December	31,	2014 |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiary | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Net\tsales | $— | $— | $11,542.3 | $532.2 | $— | $— | $12,074.5 |
| Cost\tof\tsales | — | — | 9,684.9 | 468.3 | — | — | 10,153.2 |
| Gross\tprofit | — | — | 1,857.4 | 63.9 | — | — | 1,921.3 |
| Selling\tand\tadministrative\texpenses | — | 112.8 | 962.3 | 35.2 | — | — | 1,110.3 |
| Advertising\texpense | — | — | 134.0 | 4.0 | — | — | 138.0 |
| (Loss)\tincome\tfrom\toperations | — | (112.8) | 761.1 | 24.7 | — | — | 673.0 |
| Interest\t(expense)\tincome,\tnet | — | (197.7) | 0.1 | 0.3 | — | — | (197.3) |
| Net\tloss\ton\textinguishments\tof\tlong-term\ndebt | — | (90.7) | — | — | — | — | (90.7) |
| Management\tfee | — | 3.9 | — | (3.9) | — | — | — |
| Other\t(expense)\tincome,\tnet | — | 1.2 | 1.5 | — | — | — | 2.7 |
| (Loss)\tincome\tbefore\tincome\ttaxes | — | (396.1) | 762.7 | 21.1 | — | — | 387.7 |
| Income\ttax\tbenefit\t(expense) | — | 141.0 | (278.1) | (5.7) | — | — | (142.8) |
| (Loss)\tincome\tbefore\tequity\tin\tearnings\tof\nsubsidiaries | — | (255.1) | 484.6 | 15.4 | — | — | 244.9 |
| Equity\tin\tearnings\tof\tsubsidiaries | 244.9 | 500.0 | — | — | — | (744.9) | — |
| Net\tincome | $244.9 | $244.9 | $484.6 | $15.4 | $— | $(744.9) | $244.9 |

|  |  |  | Year	Ended	December	31,	2013 |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiary | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Net\tsales | $— | $— | $10,293.3 | $475.3 | $— | $— | $10,768.6 |
| Cost\tof\tsales | — | — | 8,592.1 | 416.2 | — | — | 9,008.3 |
| Gross\tprofit | — | — | 1,701.2 | 59.1 | — | — | 1,760.3 |
| Selling\tand\tadministrative\texpenses | 24.4 | 103.9 | 957.3 | 35.3 | — | — | 1,120.9 |
| Advertising\texpense | — | — | 126.8 | 4.0 | — | — | 130.8 |
| (Loss)\tincome\tfrom\toperations | (24.4) | (103.9) | 617.1 | 19.8 | — | — | 508.6 |
| Interest\t(expense)\tincome,\tnet | — | (250.6) | 0.2 | 0.3 | — | — | (250.1) |
| Net\tloss\ton\textinguishments\tof\tlong-term\ndebt | — | (64.0) | — | — | — | — | (64.0) |
| Management\tfee | — | 4.3 | — | (4.3) | — | — | — |
| Other\tincome\t(expense),\tnet | — | (0.5) | 1.2 | 0.3 | — | — | 1.0 |
| (Loss)\tincome\tbefore\tincome\ttaxes | (24.4) | (414.7) | 618.5 | 16.1 | — | — | 195.5 |
| Income\ttax\tbenefit\t(expense) | 9.2 | 142.2 | (209.5) | (4.6) | — | — | (62.7) |
| (Loss)\tincome\tbefore\tequity\tin\tearnings\tof\nsubsidiaries | (15.2) | (272.5) | 409.0 | 11.5 | — | — | 132.8 |
| Equity\tin\tearnings\tof\tsubsidiaries | 148.0 | 420.5 | — | — | — | (568.5) | — |
| Net\tincome | $132.8 | $148.0 | $409.0 | $11.5 | $— | $(568.5) | $132.8 |

# Condensed	Consolidating	Statement	of	Comprehensive	Income

|  | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | Year\tEnded\tDecember\t31,\t2015 |  |  |  |  |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiaries | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Comprehensive\tincome | $358.6 | $358.6 | $525.2 | $34.1 | $— | $(917.9) | $358.6 |

|  | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | Year\tEnded\tDecember\t31,\t2014 |  |  |  |  |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiary | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Comprehensive\tincome | $234.6 | $234.6 | $484.6 | $5.1 | $— | $(724.3) | $234.6 |

|  | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income | Condensed	Consolidating	Statement	of	Comprehensive	Income |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | Year\tEnded\tDecember\t31,\t2013 |  |  |  |  |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiary | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Comprehensive\tincome | $126.1 | $141.3 | $409.0 | $4.8 | $— | $(555.1) | $126.1 |

# Condensed	Consolidating	Statement	of	Cash	Flows

|  |  | Year	Ended	December	31,	2015 | Year	Ended	December	31,	2015 |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiaries | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Net\tcash\t(used\tin)\tprovided\tby\toperating\nactivities | $0.5 | $(18.1) | $350.0 | $27.9 | $— | $(82.8) | $277.5 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |  |  |  |  |
| Capital\texpenditures | — | (75.4) | (11.6) | (3.1) | — | — | (90.1) |
| Acquisition\tof\tbusiness,\tnet\tof\tcash\nacquired | — | — | — | (263.8) | — | — | (263.8) |
| Premium\tpayments\ton\tinterest\trate\ncap\tagreements | — | (0.5) | — | — | — | — | (0.5) |
| Net\tcash\tused\tin\tinvesting\tactivities | — | (75.9) | (11.6) | (266.9) | — | — | (354.4) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |  |  |  |  |
| Proceeds\tfrom\tborrowings\tunder\nrevolving\tcredit\tfacility | — | 314.5 | — | — | — | — | 314.5 |
| Repayments\tof\tborrowings\tunder\nrevolving\tcredit\tfacility | — | (314.5) | — | — | — | — | (314.5) |
| Repayments\tof\tlong-term\tdebt | — | (15.4) | — | (17.4) | — | — | (32.8) |
| Proceeds\tfrom\tissuance\tof\tlong-term\ndebt | — | 525.0 | — | — | — | — | 525.0 |
| Payments\tto\textinguish\tlong-term\ndebt | — | (525.3) | — | — | — | — | (525.3) |
| Payment\tof\tdebt\tfinancing\tcosts | — | (6.8) | — | — | — | — | (6.8) |
| Net\tchange\tin\taccounts\tpayable-\ninventory\tfinancing | — | — | 96.1 | (0.2) | — | — | 95.9 |
| Proceeds\tfrom\tstock\toption\texercises | — | 2.4 | — | — | — | — | 2.4 |
| Proceeds\tfrom\tCoworker\tstock\npurchase\tplan | — | 8.7 | — | — | — | — | 8.7 |
| Repurchases\tof\tcommon\tstock | (241.3) | — | — | — | — | — | (241.3) |
| Dividends\tpaid | (52.9) | — | — | — | — | — | (52.9) |
| Excess\ttax\tbenefits\tfrom\tequity-based\ncompensation | — | 0.6 | — | — | — | — | 0.6 |
| Advances\tto/from\taffiliates | 293.7 | (196.5) | (434.5) | 267.4 | — | 69.9 | — |
| Net\tcash\tprovided\tby\t(used\tin)\tfinancing\nactivities | (0.5) | (207.3) | (338.4) | 249.8 | — | 69.9 | (226.5) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\nand\tcash\tequivalents | — | — | — | (3.5) | — | — | (3.5) |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\nequivalents | — | (301.3) | — | 7.3 | — | (12.9) | (306.9) |
| Cash\tand\tcash\tequivalents\t–\tbeginning\tof\nperiod | — | 346.4 | — | 24.6 | — | (26.5) | 344.5 |
| Cash\tand\tcash\tequivalents\t–\tend\tof\tperiod | $— | $45.1 | $— | $31.9 | $— | $(39.4) | $37.6 |

|  |  |  | Year	Ended	December	31,	2014 |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiary | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Net\tcash\t(used\tin)\tprovided\tby\toperating\nactivities | $— | $(120.4) | $547.7 | $11.8 | $— | $(4.1) | $435.0 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |  |  |  |  |
| Capital\texpenditures | — | (47.9) | (7.1) | — | — | — | (55.0) |
| Payment\tfor\tequity\tinvestments | — | (86.8) | — | — | — | — | (86.8) |
| Payment\tof\taccrued\tcharitable |  |  |  |  |  |  |  |
| contribution\trelated\tto\tthe\tMPK |  |  |  |  |  |  |  |
| Coworker\tIncentive\tPlan\tII | — | (20.9) | — | — | — | — | (20.9) |
| Premium\tPayments\ton\tinterest\trate\ncap\tagreements | — | (2.1) | — | — | — | — | (2.1) |
| Net\tcash\tused\tin\tinvesting\tactivities | — | (157.7) | (7.1) | — | — | — | (164.8) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |  |  |  |  |
| Repayments\tof\tlong-term\tdebt | — | (15.4) | — | — | — | — | (15.4) |
| Proceeds\tfrom\tissuance\tof\tlong-term\ndebt | — | 1,175.0 | — | — | — | — | 1,175.0 |
| Payments\tto\textinguish\tlong-term\ndebt | — | (1,299.0) | — | — | — | — | (1,299.0) |
| Payment\tof\tdebt\tfinancing\tcosts | — | (21.9) | — | — | — | — | (21.9) |
| Net\tchange\tin\taccounts\tpayable-\ninventory\tfinancing | — | — | 75.5 | — | — | — | 75.5 |
| Proceeds\tfrom\tstock\toption\texercises | — | 1.3 | — | — | — | — | 1.3 |
| Proceeds\tfrom\tCoworker\tstock\npurchase\tplan | — | 5.8 | — | — | — | — | 5.8 |
| Dividends\tpaid | (33.6) | — | — | — | — | — | (33.6) |
| Excess\ttax\tbenefits\tfrom\tequity-based\ncompensation | — | 0.3 | — | — | — | — | 0.3 |
| Advances\tto/from\taffiliates | 33.6 | 581.9 | (616.1) | 0.6 | — | — | — |
| Net\tcash\tprovided\tby\t(used\tin)\tfinancing\nactivities | — | 428.0 | (540.6) | 0.6 | — | — | (112.0) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\nand\tcash\tequivalents | — | — | — | (1.8) | — | — | (1.8) |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\nequivalents | — | 149.9 | — | 10.6 | — | (4.1) | 156.4 |
| Cash\tand\tcash\tequivalents\t–\tbeginning\tof\nperiod | — | 196.5 | — | 14.0 | — | (22.4) | 188.1 |
| Cash\tand\tcash\tequivalents\t–\tend\tof\tperiod | $— | $346.4 | $— | $24.6 | $— | $(26.5) | $344.5 |

|  |  | Year	Ended	December	31,	2013 | Year	Ended	December	31,	2013 |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Parent\nGuarantor | Subsidiary\nIssuer | Guarantor\nSubsidiaries | Non-Guarantor\nSubsidiary | Co-Issuer | Consolidating\nAdjustments | Consolidated |
| Net\tcash\t(used\tin)\tprovided\tby\toperating\nactivities | $(15.2) | $(130.3) | $508.8 | $5.5 | $— | $(2.5) | $366.3 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |  |  |  |  |
| Capital\texpenditures | — | (40.8) | (6.2) | (0.1) | — | — | (47.1) |
| Net\tcash\tused\tin\tinvesting\tactivities | — | (40.8) | (6.2) | (0.1) | — | — | (47.1) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |  |  |  |  |
| Proceeds\tfrom\tborrowings\tunder\nrevolving\tcredit\tfacility | — | 63.0 | — | — | — | — | 63.0 |
| Repayments\tof\tborrowings\tunder\nrevolving\tcredit\tfacility | — | (63.0) | — | — | — | — | (63.0) |
| Repayments\tof\tlong-term\tdebt | — | (51.1) | — | — | — | — | (51.1) |
| Proceeds\tfrom\tissuance\tof\tlong-term\ndebt | — | 1,535.2 | — | — | — | — | 1,535.2 |
| Payments\tto\textinguish\tlong-term\ndebt | — | (2,047.4) | — | — | — | — | (2,047.4) |
| Payment\tof\tdebt\tfinancing\tcosts | — | (6.1) | — | — | — | — | (6.1) |
| Net\tchange\tin\taccounts\tpayable-\ninventory\tfinancing | — | — | 7.4 | — | — | — | 7.4 |
| Payment\tof\tincentive\tcompensation\nplan\twithholding\ttaxes | — | (4.0) | (19.6) | (0.5) | — | — | (24.1) |
| Proceeds\tfrom\tissuance\tof\tcommon\nstock | 424.7 | — | — | — | — | — | 424.7 |
| Dividends\tpaid | (7.3) | — | — | — | — | — | (7.3) |
| Advances\tto/from\taffiliates | (402.2) | 892.6 | (490.4) | — | — | — | — |
| Other\tfinancing\tactivities | — | 0.4 | — | — | — | — | 0.4 |
| Net\tcash\tprovided\tby\t(used\tin)\tfinancing\nactivities | 15.2 | 319.6 | (502.6) | (0.5) | — | — | (168.3) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\nand\tcash\tequivalents | — | — | — | (0.7) | — | — | (0.7) |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\nequivalents | — | 148.5 | — | 4.2 | — | (2.5) | 150.2 |
| Cash\tand\tcash\tequivalents\t–\tbeginning\tof\nperiod | — | 48.0 | — | 9.8 | — | (19.9) | 37.9 |
| Cash\tand\tcash\tequivalents\t–\tend\tof\tperiod | $— | $196.5 | $— | $14.0 | $— | $(22.4) | $188.1 |

# 18.				Selected	Quarterly	Financial	Results	(unaudited)

| (in	millions,	except	per-share	amounts) | First	Quarter | Second	Quarter | Third	Quarter | Fourth	Quarter |
| :--- | :--- | :--- | :--- | :--- |
| Net\tSales\tDetail: |  |  |  |  |
| Corporate: |  |  |  |  |
| Medium/Large | \t $1,313.9 | \t $1,492.1 | \t $1,458.9 | \t $1,493.4 |
| Small\tBusiness | 260.1 | 269.3 | 265.6 | 263.2 |
| Total\tCorporate | 1,574.0 | 1,761.4 | 1,724.5 | 1,756.6 |
| Public: |  |  |  |  |
| Government | 288.6 | 385.0 | 488.6 | 513.7 |
| Education | 343.6 | 546.1 | 579.0 | 338.3 |
| Healthcare | 373.6 | 443.1 | 400.5 | 425.3 |
| Total\tPublic | 1,005.8 | 1,374.2 | 1,468.1 | 1,277.3 |
| Other | 175.4 | 178.4 | 308.5 | 384.5 |
| Net\tsales | \t $2,755.2 | \t $3,314.0 | \t $3,501.1 | \t $3,418.4 |
| Gross\tprofit | \t $456.5 | \t $534.5 | \t $567.2 | \t $557.6 |
| Income\tfrom\toperations | 151.6 | 205.9 | 204.6 | 179.9 |
| Net\tincome | 54.7 | 108.2 | 150.9 | 89.3 |
| Net\tincome\tper\tcommon\tshare(1): |  |  |  |  |
| Basic | 0.32 | 0.63 | 0.89 | 0.53 |
| Diluted | 0.32 | 0.63 | 0.88 | 0.52 |
| Cash\tdividends\tdeclared\tper\tcommon\tshare | \t $0.0675 | \t $0.0675 | \t $0.0675 | \t $0.1075 |

| (in	millions,	except	per-share	amounts) | First	Quarter | Second	Quarter | Third	Quarter | Fourth	Quarter |
| :--- | :--- | :--- | :--- | :--- |
| Net\tSales\tDetail: |  |  |  |  |
| Corporate: |  |  |  |  |
| Medium/Large | \t $1,274.8 | \t $1,395.4 | \t $1,374.8 | \t $1,440.3 |
| Small\tBusiness | 230.8 | 260.8 | 247.9 | 250.7 |
| Total\tCorporate | 1,505.6 | 1,656.2 | 1,622.7 | 1,691.0 |
| Public: |  |  |  |  |
| Government | 254.2 | 313.1 | 441.3 | 440.8 |
| Education | 321.6 | 527.0 | 632.8 | 342.6 |
| Healthcare | 394.1 | 431.5 | 394.7 | 385.7 |
| Total\tPublic | 969.9 | 1,271.6 | 1,468.8 | 1,169.1 |
| Other | 176.8 | 178.2 | 174.6 | 190.0 |
| Net\tsales | \t $2,652.3 | \t $3,106.0 | \t $3,266.1 | \t $3,050.1 |
| Gross\tprofit | \t $425.2 | \t $496.9 | \t $507.3 | \t $491.9 |
| Income\tfrom\toperations | 135.8 | 188.2 | 184.7 | 164.3 |
| Net\tincome | 50.9 | 86.6 | 55.6 | 51.8 |
| Net\tincome\tper\tcommon\tshare\t(1): |  |  |  |  |
| Basic | 0.30 | 0.51 | 0.33 | 0.30 |
| Diluted | 0.30 | 0.50 | 0.32 | 0.30 |
| Cash\tdividends\tdeclared\tper\tcommon\tshare | \t $0.0425 | \t $0.0425 | \t $0.0425 | \t $0.0675 |

(1) Basic	and	diluted	net	income	per	share	are	computed	independently	for	each	of	the	quarters	presented.	Therefore,	the	sum	of	quarterly	basic	and diluted	per	share	information	may	not	equal	annual	basic	and	diluted	net	income	per	share.

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

# SCHEDULE	II	–	VALUATION	AND	QUALIFYING	ACCOUNTS

| (in	millions) | Balance	at<br>Beginning<br>of	Period | Charged	to<br>Costs	and<br>Expenses | Deductions | Balance	at<br>End	of<br>Period |
| :--- | :--- | :--- | :--- | :--- |
| Allowance\tfor\tdoubtful\taccounts: |  |  |  |  |
| Year\tEnded\tDecember\t31,\t2015 | $5.7 | $4.2 | $(3.9) | $6.0 |
| Year\tEnded\tDecember\t31,\t2014 | 5.4 | 5.4 | (5.1) | 5.7 |
| Year\tEnded\tDecember\t31,\t2013 | 5.4 | 2.8 | (2.8) | 5.4 |
| Reserve\tfor\tsales\treturns: |  |  |  |  |
| Year\tEnded\tDecember\t31,\t2015 | $5.1 | $34.4 | $(34.6) | $4.9 |
| Year\tEnded\tDecember\t31,\t2014 | 5.1 | 36.2 | (36.2) | 5.1 |
| Year\tEnded\tDecember\t31,\t2013 | 4.4 | 35.0 | (34.3) | 5.1 |

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

# Item	9A.	Controls	and	Procedures

# Evaluation	of	Disclosure	Controls	and	Procedures

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

# Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting

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

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

Based	on	its	assessment,	management	concluded	that,	as	of	December	31,	2015,	the	Company's	internal	control	over	financial	reporting	is	effective.

On	August	1,	2015,	the	Company	completed	the	acquisition	of	Kelway	TopCo	Limited	("Kelway")	by	purchasing	the	remaining	65%	of	its	outstanding common	stock	which	increased	the	registrant's	ownership	interest	from	35%	to	100%	and	provided	the	registrant	control.	Management	has	excluded	this	acquisition from	its	assessment	of	internal	control	over	financial	reporting	for	the	year	ended	December	31,	2015.	Kelway	represented	$897.5	million	of	total	assets	as	of	December 31,	2015	and	$350.7	million	and	$8.6	million	of	net	sales	and	net	income,	respectively,	for	the	year	then	ended.

Ernst	&	Young	LLP,	independent	registered	public	accounting	firm,	has	audited	the	Consolidated	Financial	Statements	of	the	Company	and	the	Company's internal	control	over	financial	reporting	and	has	included	their	reports	herein.

# Changes	in	Internal	Control	over	Financial	Reporting

Except	as	noted	above,	there	have	been	no	changes	in	our	internal	control	over	financial	reporting	during	the	quarter	ended	December	31,	2015	that	have materially	affected	or	are	reasonably	likely	to	materially	affect,	our	internal	control	over	financial	reporting.

We	have	audited	CDW	Corporation	and	subsidiaries'	internal	control	over	financial	reporting	as	of	December	31,	2015,	based	on	criteria	established	in Internal	Control-Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(2013	framework),	(the	COSO	criteria). CDW	 Corporation	 and	 subsidiaries'	 management	 is	 responsible	 for	 maintaining	 effective	 internal	 control	 over	 financial	 reporting,	 and	 for	 its	 assessment	 of	 the effectiveness	of	internal	control	over	financial	reporting	included	in	the	accompanying	Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting.	Our responsibility	is	to	express	an	opinion	on	the	company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we plan	and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our audit	included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	testing	and	evaluating	the	design and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk,	and	performing	such	other	procedures	as	we	considered	necessary	in	the	circumstances.	We believe	that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of management	 and	 directors	 of	 the	 company;	 and	 (3)	 provide	 reasonable	 assurance	 regarding	 prevention	 or	 timely	 detection	 of	 unauthorized	 acquisition,	 use,	 or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the policies	or	procedures	may	deteriorate.

As	indicated	in	the	accompanying	Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting,	management's	assessment	of	and	conclusion	on the	effectiveness	of	internal	control	over	financial	reporting	did	not	include	the	internal	controls	of	Kelway	TopCo	Limited,	which	is	included	in	the	2015	consolidated financial	statements	of	CDW	Corporation	and	subsidiaries	and	constituted	$898	million	of	total	assets	as	of	December	31,	2015	and	$351	million	and	$9	million	of	net sales	and	net	income,	respectively,	for	the	year	then	ended.	Our	audit	of	internal	control	over	financial	reporting	of	CDW	Corporation	and	subsidiaries	also	did	not include	an	evaluation	of	the	internal	control	over	financial	reporting	of	Kelway	TopCo	Limited.

In	our	opinion,	CDW	Corporation	and	subsidiaries	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31, 2015,	based	on	the	COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance	sheets	of CDW	Corporation	and	subsidiaries	as	of	December	31,	2015	and	2014,	and	the	related	consolidated	statements	of	operations,	comprehensive	income,	stockholders' equity	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2015	of	CDW	Corporation	and	subsidiaries	and	our	report	dated	February	24,	2016 expressed	an	unqualified	opinion	thereon.

# Item	9B.	Other	Information

# PART	III

# Item	10.	Directors,	Managers,	Executive	Officers	and	Corporate	Governance

We	have	adopted	The	CDW	Way	Code,	our	code	of	business	conduct	and	ethics,	that	is	applicable	to	all	of	our	coworkers.	Additionally,	within	The	CDW	Way Code	is	a	Financial	Integrity	Code	of	Ethics	that	sets	forth	an	even	higher	standard	applicable	to	our	executives,	officers,	members	of	our	internal	disclosure	committee and	all	managers	and	above	in	our	finance	department.	A	copy	of	this	code	is	available	on	our	corporate	website	at	www.cdw.com.	If	we	make	any	substantive amendments	to	this	code	or	grant	any	waiver	from	a	provision	to	our	chief	executive	officer,	principal	financial	officer	or	principal	accounting	officer,	we	will	disclose the	nature	of	such	amendment	or	waiver	on	our	website	or	in	a	report	on	Form	8-K.

See	Part	I	-	"Executive	Officers"	for	information	about	our	executive	officers,	which	is	incorporated	by	reference	in	this	Item	10.	Other	information	required under	this	Item	10	is	incorporated	herein	by	reference	to	our	definitive	proxy	statement	for	our	2016	annual	meeting	of	stockholders	on	May	19,	2016	("2016	Proxy Statement"),	which	we	will	file	with	the	SEC	on	or	before	120	days	after	our	2015	fiscal	year-end.

# Item	11.	Executive	Compensation

Information	required	under	this	Item	11	is	incorporated	herein	by	reference	to	the	2016	Proxy	Statement.

# Item	12.	Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters

# Item	13.	Certain	Relationships	and	Related	Transactions,	and	Director	Independence

# Item	14.	Principal	Accountant	Fees	and	Services

# PART	IV

# Item	15.	Exhibits	and	Financial	Statement	Schedules

# (a) Financial	Statements	and	Schedules

The	following	documents	are	filed	as	part	of	this	report:

All	other	schedules	are	omitted	since	the	required	information	is	not	present	or	is	not	present	in	amounts	sufficient	to	require	submission	of	the schedule,	or	because	the	information	required	is	included	in	the	Consolidated	Financial	Statements	or	notes	thereto.

# (b) Exhibits

The	information	required	by	this	Item	is	set	forth	on	the	exhibit	index	that	follows	the	signature	page	of	this	report.

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf by	the	undersigned,	thereunto	duly	authorized.

Thomas	E.	Richards

Chairman,	President	and	Chief	Executive	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and in	the	capacities	and	on	the	dates	indicated.

# EXHIBIT	INDEX

10.8 		 Termination	Agreement,	dated	as	of	June	12,	2013,	by	and	among	CDW	Corporation,	Madison	Dearborn	Partners	V-B,	L.P.	and	Providence Equity	Partners	L.L.C.,	previously	filed	as	Exhibit	10.6	with	CDW	Corporation's	Amendment	No.	2	to	Form	S-1	filed	on	June	14,	2013	(Reg. No.	333-187472)	and	incorporated	herein	by	reference.

10.12 		 Withdrawal	from	Registration	Agreement,	dated	as	of	August	27,	2014,	by	and	between	CDW	Corporation,	John	A.	Edwardson	and	Whispering Pines	Capital	LLC	,	previously	filed	as	Exhibit	10.1	with	CDW	Corporation's	Form	10-Q	filed	on	November	12,	2014	and	incorporated	herein	by reference.

		10.31§ Form	of	Stock	Option	Agreement	(executive	officers)	under	the	CDW	Corporation	2013	Long-Term	Incentive	Plan,	previously	filed	as	Exhibit 10.4	with	CDW	Corporation's	Form	10-Q	filed	on	May	12,	2014	and	incorporated	herein	by	reference.

		10.32§ Form	of	Performance	Share	Unit	Award	Agreement	(executive	officers)	under	the	CDW	Corporation	2013	Long-Term	Incentive	Plan,	previously filed	as	Exhibit	10.5	with	CDW	Corporation's	Form	10-Q	filed	on	May	12,	2014	and	incorporated	herein	by	reference.

		10.33§ Form	of	Performance	Share	Award	Agreement	(executive	officers)	under	the	CDW	Corporation	2013	Long-Term	Incentive	Plan,	previously	filed as	Exhibit	10.31	with	CDW	Corporation's	Form	10-K	filed	on	February	26,	2015	and	incorporated	herein	by	reference.

* Filed

herewith

** These	items	are	furnished	and	not	filed.

§ A	management	contract	or	compensatory	arrangement	required	to	be	filed	as	an	exhibit	pursuant	to	Item	601	of	Regulation	S-



Question: how much more money was expensed per outstanding basic weighted-average share in the year ended dec 31 , 2013 compared to the year ended dec 31 , 2014?
Calculation:     a = 156.6 / 17.3
 b = 170.6 / 21.9
 c = a - b 
Answer: 1.26