Segment Information

6 Months Ended

Jun. 30, 2019

The Company has three reportable segments: Corporate, which is comprised primarily of US private sector business customers with more than 250 employees, Small Business, which primarily serves US private sector business customers with up to 250 employees, and Public, which is comprised of government agencies and education and healthcare institutions in the US. The Company has two other operating segments: CDW UK and CDW Canada, both of which do not meet the reportable segment quantitative thresholds and, accordingly, are included in an all other category ("Other"). Headquarters function costs that are not allocated to the segments are included under the heading of "Headquarters" in the tables below.

During the first quarter of 2019, the Company evaluated its methodology for allocating certain depreciation and amortization expenses to each of its segments. The evaluation resulted in a revision to the allocation of depreciation and amortization expenses from Headquarters to the Company’s reportable segments, effective January 1, 2019. The prior period results have been recast to reflect these changes and present comparable information.

Information about the Company's segments is as follows:



(in millions)	Corporate			Small Business			Public			Other			Headquarters			Total
Three Months Ended June 30, 2019
Net sales	$	1,883.9		$	377.4		$	1,840.1		$	528.5		$	—		$	4,629.9
Operating income (loss)	157.2			26.6			129.4			19.1			(32.0		)	300.3
Depreciation and amortization expense	(21.6		)	(5.6		)	(13.7		)	(7.8		)	(16.3		)	(65.0		)

Three Months Ended June 30, 2018
Net sales	$	1,733.8		$	329.5		$	1,635.4		$	487.4		$	—		$	4,186.1
Operating income (loss)	139.7			24.2			111.5			21.7			(31.6		)	265.5
Depreciation and amortization expense	(22.0		)	(5.6		)	(12.8		)	(9.0		)	(16.9		)	(66.3		)



(in millions)	Corporate			Small Business			Public			Other			Headquarters			Total
Six Months Ended June 30, 2019
Net sales	$	3,620.1		$	733.0		$	3,170.8		$	1,063.9		$	—		$	8,587.8
Operating income (loss)	291.9			51.0			205.5			44.7			(63.9		)	529.2
Depreciation and amortization expense	(43.1		)	(11.2		)	(26.4		)	(15.2		)	(33.4		)	(129.3		)

Six Months Ended June 30, 2018
Net sales	$	3,299.6		$	657.1		$	2,865.4		$	970.4		$	—		$	7,792.5
Operating income (loss)	262.6			46.2			181.7			41.5			(62.4		)	469.6
Depreciation and amortization expense	(45.0		)	(11.1		)	(25.5		)	(17.8		)	(33.5		)	(132.9		)

Geographic Areas and Revenue Mix



	Three Months Ended June 30, 2019
(in millions)	Corporate		Small Business		Public		Other		Total
Geography⁽¹⁾
United States	$	1,881.7	$	377.4	$	1,840.1	$	8.9	$	4,108.1
Rest of World	2.2		—		—		519.6		521.8
Total Net sales	1,883.9		377.4		1,840.1		528.5		4,629.9

Major Product and Services
Hardware	1,496.8		316.4		1,523.0		389.0		3,725.2
Software	270.0		48.6		262.2		69.8		650.6
Services	99.4		7.0		50.1		66.9		223.4
Other⁽²⁾	17.7		5.4		4.8		2.8		30.7
Total Net sales	1,883.9		377.4		1,840.1		528.5		4,629.9

Sales by Channel
Corporate	1,883.9		—		—		—		1,883.9
Small Business	—		377.4		—		—		377.4
Government	—		—		578.4		—		578.4
Education	—		—		773.6		—		773.6
Healthcare	—		—		488.1		—		488.1
Other	—		—		—		528.5		528.5
Total Net sales	1,883.9		377.4		1,840.1		528.5		4,629.9

Timing of Revenue Recognition
Transferred at a point in time where CDW is principal	1,708.2		355.5		1,725.5		465.0		4,254.2
Transferred at a point in time where CDW is agent	118.7		20.0		65.0		13.5		217.2
Transferred over time where CDW is principal	57.0		1.9		49.6		50.0		158.5
Total Net sales	$	1,883.9	$	377.4	$	1,840.1	$	528.5	$	4,629.9


(1)	Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address.


(2)	Includes items such as delivery charges to customers.



	Three Months Ended June 30, 2018
(in millions)	Corporate		Small Business		Public		Other		Total
Geography⁽¹⁾
United States	$	1,731.4	$	329.5	$	1,635.4	$	8.0	$	3,704.3
Rest of World	2.4		—		—		479.4		481.8
Total Net sales	1,733.8		329.5		1,635.4		487.4		4,186.1

Major Product and Services
Hardware	1,382.3		273.7		1,338.7		392.5		3,387.2
Software	254.2		42.9		255.4		50.8		603.3
Services	79.9		7.7		37.0		41.7		166.3
Other⁽²⁾	17.4		5.2		4.3		2.4		29.3
Total Net sales	1,733.8		329.5		1,635.4		487.4		4,186.1

Sales by Channel
Corporate	1,733.8		—		—		—		1,733.8
Small Business	—		329.5		—		—		329.5
Government	—		—		493.5		—		493.5
Education	—		—		712.1		—		712.1
Healthcare	—		—		429.8		—		429.8
Other	—		—		—		487.4		487.4
Total Net sales	1,733.8		329.5		1,635.4		487.4		4,186.1

Timing of Revenue Recognition
Transferred at a point in time where CDW is principal	1,583.4		309.6		1,537.3		441.6		3,871.9
Transferred at a point in time where CDW is agent	101.5		17.1		55.3		9.7		183.6
Transferred over time where CDW is principal	48.9		2.8		42.8		36.1		130.6
Total Net sales	$	1,733.8	$	329.5	$	1,635.4	$	487.4	$	4,186.1


(1)	Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address.


(2)	Includes items such as delivery charges to customers.



	Six Months Ended June 30, 2019
(in millions)	Corporate		Small Business		Public		Other		Total
Geography⁽¹⁾
United States	$	3,614.6	$	733.0	$	3,170.8	$	17.2	$	7,535.6
Rest of World	5.5		—		—		1,046.7		1,052.2
Total Net sales	3,620.1		733.0		3,170.8		1,063.9		8,587.8

Major Product and Services
Hardware	2,880.9		611.6		2,586.1		784.9		6,863.5
Software	517.1		96.8		483.3		147.2		1,244.4
Services	187.5		14.1		92.3		126.1		420.0
Other⁽²⁾	34.6		10.5		9.1		5.7		59.9
Total Net sales	3,620.1		733.0		3,170.8		1,063.9		8,587.8

Sales by Channel
Corporate	3,620.1		—		—		—		3,620.1
Small Business	—		733.0		—		—		733.0
Government	—		—		1,066.8		—		1,066.8
Education	—		—		1,174.0		—		1,174.0
Healthcare	—		—		930.0		—		930.0
Other	—		—		—		1,063.9		1,063.9
Total Net sales	3,620.1		733.0		3,170.8		1,063.9		8,587.8

Timing of Revenue Recognition
Transferred at a point in time where CDW is principal	3,290.0		690.7		2,968.7		939.9		7,889.3
Transferred at a point in time where CDW is agent	222.7		39.8		111.3		26.5		400.3
Transferred over time where CDW is principal	107.4		2.5		90.8		97.5		298.2
Total Net sales	$	3,620.1	$	733.0	$	3,170.8	$	1,063.9	$	8,587.8


(1)	Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address.


(2)	Includes items such as delivery charges to customers.



	Six Months Ended June 30, 2018
(in millions)	Corporate		Small Business		Public		Other		Total
Geography⁽¹⁾
United States	$	3,295.8	$	657.1	$	2,865.4	$	17.2	$	6,835.5
Rest of World	3.8		—		—		953.2		957.0
Total Net sales	3,299.6		657.1		2,865.4		970.4		7,792.5

Major Product and Services
Hardware	2,633.0		546.8		2,345.7		773.2		6,298.7
Software	473.3		85.6		439.7		108.4		1,107.0
Services	159.3		14.0		71.6		84.4		329.3
Other⁽²⁾	34.0		10.7		8.4		4.4		57.5
Total Net sales	3,299.6		657.1		2,865.4		970.4		7,792.5

Sales by Channel
Corporate	3,299.6		—		—		—		3,299.6
Small Business	—		657.1		—		—		657.1
Government	—		—		912.0		—		912.0
Education	—		—		1,109.3		—		1,109.3
Healthcare	—		—		844.1		—		844.1
Other	—		—		—		970.4		970.4
Total Net sales	3,299.6		657.1		2,865.4		970.4		7,792.5

Timing of Revenue Recognition
Transferred at a point in time where CDW is principal	3,009.7		619.0		2,681.2		874.6		7,184.5
Transferred at a point in time where CDW is agent	194.2		33.6		96.4		24.8		349.0
Transferred over time where CDW is principal	95.7		4.5		87.8		71.0		259.0
Total Net sales	$	3,299.6	$	657.1	$	2,865.4	$	970.4	$	7,792.5


(1)	Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address.


(2)	Includes items such as delivery charges to customers.

The following table presents Net sales by major category for the three and six months ended June 30, 2019 and 2018. Categories are based upon internal classifications.



	Three Months Ended June 30,
	2019				2018
	Dollars in Millions		Percentage of Total Net Sales		Dollars in Millions		Percentage of Total Net Sales
Notebooks/Mobile Devices	$	1,232.9	26.6	%	$	1,078.0	25.8	%
Netcomm Products	563.4		12.2		498.7		11.9
Desktops	431.3		9.3		353.6		8.4
Video	348.5		7.5		323.5		7.7
Enterprise and Data Storage (Including Drives)	273.0		5.9		268.8		6.4
Other Hardware	876.1		18.9		864.6		20.8
Total Hardware	3,725.2		80.4		3,387.2		81.0

Software⁽¹⁾	650.6		14.1		603.3		14.3
Services⁽¹⁾	223.4		4.8		166.3		4.0
Other⁽²⁾	30.7		0.7		29.3		0.7
Total Net sales	$	4,629.9	100.0	%	$	4,186.1	100.0	%



	Six Months Ended June 30,
	2019				2018
	Dollars in Millions		Percentage of Total Net Sales		Dollars in Millions		Percentage of Total Net Sales
Notebooks/Mobile Devices	$	2,210.1	25.7	%	$	1,943.9	24.9	%
Netcomm Products	1,075.8		12.5		986.0		12.7
Desktops	734.9		8.6		664.3		8.5
Video	620.1		7.2		584.2		7.5
Enterprise and Data Storage (Including Drives)	563.7		6.6		518.8		6.7
Other Hardware	1,658.9		19.3		1,601.5		20.7
Total Hardware	6,863.5		79.9		6,298.7		81.0

Software⁽¹⁾	1,244.4		14.5		1,107.0		14.1
Services⁽¹⁾	420.0		4.9		329.3		4.2
Other⁽²⁾	59.9		0.7		57.5		0.7
Total Net sales	$	8,587.8	100.0	%	$	7,792.5	100.0	%


(1)	Certain software and services revenues are recorded on a net basis for accounting purposes. As a result, the category percentage of net revenues is not representative of the category percentage of gross profits.

(2)

Includes items such as delivery charges to customers.