Equity-Based Compensation

3 Months Ended

Mar. 31, 2014

Equity-Based Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Equity-Based Compensation

The Company recognized $3.3 million and $1.9 million in equity-based compensation expense for the three months ended March 31, 2014 and 2013, respectively.

The following table sets forth a summary of the Company's stock option activity for the three months ended March 31, 2014:

Options	Number of Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2014	1,280,255		$	17.00
Granted	1,223,388		$	24.29
Forfeited/Expired	—		$	—
Exercised	(7,807	)	$	17.00		$	0.1
Outstanding at March 31, 2014	2,495,836		$	20.57	9.0	$	17.1
Vested at March 31, 2014	448,464		$	17.00	7.9	$	4.7
Exercisable at March 31, 2014	448,464		$	17.00	7.9	$	4.7
Expected to vest at March 31, 2014	1,973,141		$	21.36	9.3	$	12.0

During the three months ended March 31, 2014, the Company granted 1,223,388 stock options under the 2013 Long-Term Incentive Plan (the "2013 LTIP"). These options vest annually over three years. The Company has elected to use 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 dividend yields. The assumptions used to value the stock options granted during the three months ended March 31, 2014 are presented below.

Assumptions	Three Months Ended March 31, 2014
Weighted-average grant date fair value	$	7.20
Weighted-average volatility (1)	30.00		%
Weighted-average risk-free rate (2)	1.77		%
Dividend yield	0.70		%
Expected term (in years) (3)	6.0

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

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

(3) The expected term is calculated using the simplified method. The simplified method 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.

The following table sets forth a summary of the Company's restricted stock unit activity for the three months ended March 31, 2014:

	Number of Units		Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2014	1,351,572		$	17.04
Granted	25,773		24.29
Vested/Settled	(596	)	17.00
Forfeited	(33,992	)	17.00
Nonvested at March 31, 2014	1,342,757		$	17.18

In connection with the Company's 2013 IPO discussed in Note 6, CDW Holdings distributed all of its shares of the Company's common stock to its existing members in accordance with the members' respective membership interests and was subsequently dissolved in August 2013. Common stock received by holders of B Units in connection with the distribution is subject to any vesting provisions previously applicable to the holder's B Units. At the time of the IPO, B Unit holders received 3,798,508 shares of restricted stock with respect to B Units that had not yet vested at the time of the distribution. For the three months ended March 31, 2014, 573,237 shares of such restricted stock vested/settled and 4,617 shares were forfeited. As of March 31, 2014, 2,014,179 shares of restricted stock were outstanding.

During the three months ended March 31, 2014, the Company granted 408,455 performance share units (the "PSUs") under the 2013 LTIP. The percentage of shares 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 $24.29 per unit. As of March 31, 2014, 408,455 PSUs were outstanding.

As of March 31, 2014, the Company estimated there was $39.7 million of total unrecognized compensation cost to be recognized over the next 2.8 years.