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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-Q
(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to             

Commission File Number 001-35985
q1earningsdatepressre_image1.gif
CDW CORPORATION
(Exact name of registrant as specified in its charter) 
Delaware26-0273989
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
75 Tri-State International
Lincolnshire, Illinois
60069
(Address of principal executive offices)(Zip Code)
(847) 465-6000
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareCDWNasdaq Global Select Market

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 such 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.      Yes      No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).      Yes      No


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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act: 
Large accelerated filer  Accelerated filer
Non-accelerated filer☐   Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).       Yes      No
As of April 28, 2023, there were 134,786,680 shares of common stock, $0.01 par value, outstanding.


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CDW CORPORATION AND SUBSIDIARIES
FORM 10-Q

TABLE OF CONTENTS

 Page
PART IFINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART IIOTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
SIGNATURES


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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars and shares in millions, except per share amounts)
March 31, 2023December 31, 2022
Assets(unaudited)
Current assets:
Cash and cash equivalents$279.4 $315.2 
Accounts receivable, net of allowance for credit losses of $27.4 and $25.7, respectively
4,262.3 4,461.3 
Merchandise inventory781.1 800.2 
Miscellaneous receivables469.4 489.1 
Prepaid expenses and other487.7 498.2 
Total current assets6,279.9 6,564.0 
Operating lease right-of-use assets145.7 149.2 
Property and equipment, net187.4 188.8 
Goodwill4,365.5 4,342.7 
Other intangible assets, net1,455.0 1,490.7 
Other assets334.6 396.1 
Total Assets$12,768.1 $13,131.5 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable-trade$2,644.0 $2,821.3 
Accounts payable-inventory financing532.2 519.0 
Current maturities of long-term debt45.7 56.3 
Contract liabilities495.7 485.5 
Accrued expenses and other current liabilities:
Compensation287.8 377.8 
Advertising126.2 130.5 
Sales and income taxes130.1 73.5 
Other516.2 483.2 
Total current liabilities4,777.9 4,947.1 
Long-term liabilities:
Debt5,749.9 5,866.4 
Deferred income taxes193.0 203.4 
Operating lease liabilities171.0 175.2 
Other liabilities307.4 336.1 
Total long-term liabilities6,421.3 6,581.1 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.01 par value, 100.0 shares authorized; no shares issued or outstanding for both periods
  
Common stock, $0.01 par value, 1,000.0 shares authorized; 135.0 and 135.5 shares outstanding, respectively
1.4 1.4 
Paid-in capital3,557.3 3,518.1 
Accumulated deficit(1,847.0)(1,763.8)
Accumulated other comprehensive loss(142.8)(152.4)
Total stockholders’ equity1,568.9 1,603.3 
Total Liabilities and Stockholders’ Equity$12,768.1 $13,131.5 

The accompanying notes are an integral part of the Consolidated Financial Statements.
3

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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars and shares in millions, except per-share amounts)
(unaudited)
 Three Months Ended March 31,
 20232022
Net sales$5,103.1 $5,949.1 
Cost of sales4,013.7 4,845.0 
Gross profit1,089.4 1,104.1 
Selling and administrative expenses734.1 717.2 
Operating income355.3 386.9 
Interest expense, net(57.7)(56.0)
Other expense, net(1.3)(0.5)
Income before income taxes296.3 330.4 
Income tax expense(66.2)(80.2)
Net income $230.1 $250.2 
Net income per common share:
Basic$1.70 $1.85 
Diluted$1.68 $1.83 
Weighted-average common shares outstanding:
Basic135.6 134.9 
Diluted137.3 136.7 

The accompanying notes are an integral part of the Consolidated Financial Statements.
4

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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in millions)
(unaudited)
 Three Months Ended March 31,
20232022
Net income $230.1 $250.2 
Other comprehensive income:
Unrealized gain from cash flow hedge, net of tax 0.4 
Reclassification of cash flow hedge to net income, net of tax 0.8 
Foreign currency translation, net of tax9.6 (9.9)
Other comprehensive income (loss)9.6 (8.7)
Comprehensive income$239.7 $241.5 

The accompanying notes are an integral part of the Consolidated Financial Statements.
5

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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
(unaudited)
 Three Months Ended March 31,
 20232022
Cash flows from operating activities:
Net income$230.1 $250.2 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization70.7 71.4 
Equity-based compensation expense20.8 21.1 
Deferred income taxes(10.9)(5.0)
Provision for credit losses6.2 1.7 
Other 3.4 4.8 
Changes in assets and liabilities:
Accounts receivable208.9 (125.0)
Merchandise inventory22.0 (130.3)
Other assets102.5 24.3 
Accounts payable-trade(248.7)87.8 
Other liabilities(39.6)179.8 
Net cash provided by operating activities365.4 380.8 
Cash flows from investing activities:
Capital expenditures(31.7)(41.3)
Acquisitions of businesses, net of cash acquired(22.5) 
Net cash used in investing activities(54.2)(41.3)
Cash flows from financing activities:
Proceeds from borrowings under revolving credit facility 702.3 
Repayments of borrowings under revolving credit facility(49.1)(895.2)
Repayments of long-term debt(50.0)(35.5)
Repayments of receivable financing liability(31.5)(28.7)
Net change in accounts payable-inventory financing77.6 126.7 
Repurchases of common stock(200.0) 
Proceeds from stock option exercises12.8 8.3 
Payment of incentive compensation plan withholding taxes(31.6)(20.4)
Dividend payments(79.9)(67.5)
Other3.5 1.9 
Net cash used in financing activities(348.2)(208.1)
Effect of exchange rate changes on cash and cash equivalents1.2 (2.6)
Net (decrease) increase in cash and cash equivalents(35.8)128.8 
Cash and cash equivalents—beginning of period315.2 258.1 
Cash and cash equivalents—end of period$279.4 $386.9 
Supplementary disclosure of cash flow information:
Interest paid$(24.9)$(17.5)
Income taxes paid, net$21.5 $(11.5)

The accompanying notes are an integral part of the Consolidated Financial Statements.
6

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CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(dollars and shares in millions)
(unaudited)
Three Months Ended March 31, 2023
Common Stock
SharesAmountPaid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
Stockholders’ Equity
Balance as of December 31, 2022135.5 $1.4 $3,518.1 $(1,763.8)$(152.4)$1,603.3 
Net income— — — 230.1 — 230.1 
Equity-based compensation expense— — 20.8 — — 20.8 
Stock option exercises0.5 — 12.8 — — 12.8 
Coworker Stock Purchase Plan— — 5.0 — — 5.0 
Repurchases of common stock(1.0)— — (200.0)— (200.0)
Dividends paid ($0.59 per share)
— — 0.6 (80.5)— (79.9)
Incentive compensation plan stock withheld for taxes— — — (31.6)— (31.6)
Foreign currency translation and other— — — (1.2)9.6 8.4 
Balance as of March 31, 2023135.0 $1.4 $3,557.3 $(1,847.0)$(142.8)$1,568.9 

Three Months Ended March 31, 2022
Common Stock
SharesAmountPaid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
Stockholders’ Equity
Balance as of December 31, 2021134.8 $1.3 $3,369.5 $(2,570.7)$(94.4)$705.7 
Net income— — — 250.2 — 250.2 
Equity-based compensation expense— — 21.1 — — 21.1 
Stock option exercises0.3 0.1 8.2 — — 8.3 
Coworker Stock Purchase Plan— — 4.4 — — 4.4 
Dividends paid ($0.50 per share)
— — 0.5 (68.0)— (67.5)
Incentive compensation plan stock withheld for taxes— — — (20.4)— (20.4)
Unrealized gain from hedge accounting— — — — 0.4 0.4 
Reclassification of cash flow hedge to net income— — — — 0.8 0.8 
Foreign currency translation— — — — (9.9)(9.9)
Balance as of March 31, 2022135.1 $1.4 $3,403.7 $(2,408.9)$(103.1)$893.1 

The accompanying notes are an integral part of the Consolidated Financial Statements.
7

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)

1.    Description of Business and Summary of Significant Accounting Policies
Description of Business
CDW Corporation (“Parent”), a Fortune 500 company and member of the S&P 500 Index, is a leading multi-brand provider of information technology (“IT”) solutions to small, medium and large business, government, education and healthcare customers in the United States (“US”), the United Kingdom (“UK”) and Canada. The Company’s broad array of offerings ranges from discrete hardware and software products to integrated IT solutions and services that include on-premise and cloud capabilities across hybrid infrastructure, digital experience and security.
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 and does not hold any material assets or engage in any business activities or operations.
Basis of Presentation
The accompanying unaudited interim Consolidated Financial Statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 (the “Consolidated Financial Statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules and regulations of the US Securities and Exchange Commission (the “SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The presentation of the Consolidated Financial Statements requires the Company to make estimates and assumptions that affect reported amounts and related disclosures. In the opinion of management, the Consolidated Financial Statements contain all adjustments (consisting of a normal, recurring nature) necessary to present fairly the Company’s financial position, results of operations, comprehensive income, cash flows and changes in stockholders’ equity as of the dates and for the periods indicated. The unaudited results of operations for such interim periods reported are not necessarily indicative of results for the full year.
These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “December 31, 2022 Consolidated Financial Statements”). The significant accounting policies and estimates used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in the December 31, 2022 Consolidated Financial Statements.
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.

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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
2.    Recent Accounting Pronouncements
In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This ASU requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose key terms of the programs and information about the obligations that are outstanding at the end of the reporting period. This disclosure requirement is intended to provide information about an entity’s use of supplier finance programs and their effect on the entity’s working capital, liquidity and cash flows. The ASU is effective for all entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023. The Company adopted the standard during the first quarter of 2023 with the exception of the rollforward requirement, which will be adopted during the first quarter of 2024. The adoption of the standard only resulted in new disclosures for amounts presented within Accounts payable - inventory financing and did not affect the Company’s recognition, measurement or financial statement presentation of supplier finance program obligations on the Consolidated Financial Statements. For additional information on the new disclosures, see Note 4 (Inventory Financing Agreements).
3.    Accounts Receivable and Contract Balances
Accounts Receivable
The following table details the total accounts receivable recognized and the related classification on the Consolidated Balance Sheets:
March 31, 2023December 31, 2022
Accounts receivable, current(1)
$4,262.3 $4,461.3 
Accounts receivable, noncurrent(2)
154.5 203.0 
Total accounts receivable$4,416.8 $4,664.3 
(1)Accounts receivable, current are presented within Accounts receivable, net of allowance for credit losses on the Consolidated Balance Sheets.
(2)Accounts receivable, noncurrent are presented within Other assets on the Consolidated Balance Sheets.
From time to time, the Company transfers certain accounts receivable, without recourse, to third-party financial companies as a method to reduce the Company’s credit exposure and accelerate cash collections. Such transfers are recognized as a sale and the related accounts receivable is derecognized from the Consolidated Balance Sheet upon receipt of payment from the third-party financing company. During the three months ended March 31, 2023 and 2022, the Company sold approximately $124 million and $170 million of accounts receivable, respectively.
Contract Balances
Contract assets and liabilities represent the difference in the timing of revenue recognition from receipt of cash from customers. Contract assets represent revenue recognized on performance obligations satisfied or partially satisfied for which the Company has no unconditional right to consideration. Contract liabilities consist of payments received from customers, or such consideration that is contractually due, in advance of providing the product or performing services. The following table details information about the Company’s contract balances recognized on the Consolidated Balance Sheets:
March 31, 2023December 31, 2022
Contract assets(1)
$198.1 $242.1 
Contract liabilities(2)(3)
$540.6 $525.3 
(1)Contract assets are presented within Prepaid expenses and other on the Consolidated Balance Sheets.
(2)Includes $45 million and $40 million of long-term contract liabilities that are presented within Other liabilities on the Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
(3)During the three months ended March 31, 2023 and 2022, the Company recognized revenue of $190 million and $156 million, respectively, related to its contract liabilities that were included in the beginning balance of the respective periods.
A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The following table represents the total transaction price for the remaining performance obligations as of March 31, 2023 related to non-cancelable contracts longer than 12 months in duration that is expected to be recognized over future periods.
Within 1 YearYears 1-2Years 2-3Thereafter
Remaining performance obligations$50.6 $23.9 $10.0 $1.2 
4.    Inventory Financing Agreements
The Company has entered into agreements with financial institutions to facilitate the purchase of inventory from designated suppliers under certain terms and conditions to enhance liquidity. Under these agreements, the Company receives extended payment terms and agrees to pay the financial institution a stated amount of confirmed invoices from its designated suppliers. The Company does not incur any interest or other incremental expenses associated with these agreements as balances are paid when they are due. Additionally, the Company has no involvement in establishing the terms or conditions of the arrangements between its suppliers and the financial institution.
The amounts outstanding under these agreements as of March 31, 2023 and December 31, 2022 were $532 million and $519 million, respectively, and are separately presented as Accounts payable-inventory financing on the Consolidated Balance Sheets. The majority of such outstanding amounts relates to a floorplan sub-facility that is incorporated in the Company’s Revolving Loan Facility (as defined below). A portion of the Company’s availability under the Revolving Loan Facility is reserved to cover the obligation to pay the financial institution. For additional information regarding the Revolving Loan Facility, see Note 5 (Debt).
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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
5.    Debt
As of March 31, 2023As of December 31, 2022
Maturity DateInterest RateAmountInterest RateAmount
Credit Facility
Senior unsecured revolving loan facilityDecember 2026Variable$24.7 Variable$72.5 
Term Loan
Senior unsecured term loan facilityDecember 2026Variable734.5 Variable784.5 
Unsecured Senior Notes
Senior notes due 2024December 20245.500 %575.0 5.500 %575.0 
Senior notes due 2025May 20254.125 %600.0 4.125 %600.0 
Senior notes due 2028April 20284.250 %600.0 4.250 %600.0 
Senior notes due 2029February 20293.250 %700.0 3.250 %700.0 
Senior notes due 2026December 20262.670 %1,000.0 2.670 %1,000.0 
Senior notes due 2028December 20283.276 %500.0 3.276 %500.0 
Senior notes due 2031December 20313.569 %1,000.0 3.569 %1,000.0 
Total unsecured senior notes4,975.0 4,975.0 
Receivable financing liability84.9 115.4 
Other long-term obligations10.8 11.6 
Unamortized deferred financing fees(34.3)(36.3)
Current maturities of long-term debt(45.7)(56.3)
Total long-term debt$5,749.9 $5,866.4 
As of March 31, 2023, the Company is in compliance with the covenants under its credit agreements and indentures.
Credit Facility
The Company has a variable rate senior unsecured revolving loan facility (the “Revolving Loan Facility”) from which it may draw tranches denominated in US dollars, British pounds or Euros. The interest rate is based on LIBOR plus a margin or an alternate base rate plus a margin, where the margin is based on the Company’s senior unsecured rating. The Revolving Loan Facility is used by the Company for borrowings, issuances of letters of credit and floorplan financing. As of March 31, 2023, the Company could have borrowed up to an additional $1.1 billion under the Revolving Loan Facility. As of March 31, 2023, the Revolving Loan Facility had less than $1 million of undrawn letters of credit and $524 million reserved for the floorplan sub-facility.
Term Loan
The senior unsecured term loan facility (the “Term Loan Facility”) has a variable interest rate. The interest rate is based on LIBOR plus a margin, where the margin is determined by the Company’s senior unsecured credit rating. During the three months ended March 31, 2023, the Company prepaid $50 million on the Term Loan Facility without penalty. As a result of the prepayments made to date, no additional mandatory payments are required on the remaining principal amount until its maturity date on December 1, 2026.
Unsecured Senior Notes
The unsecured senior notes have a fixed interest rate, which is paid semi-annually.
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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
Receivable Financing
The receivable financing liability relates to certain accounts receivable transferred to third-party financial institutions that did not qualify as a sale under the terms of the agreements. While the terms of such agreements are on a nonrecourse basis, the transfers of accounts receivable could not achieve certain criteria that would allow derecognition of the accounts receivable. The proceeds from these arrangements are recognized as a liability and the associated accounts receivable remains on the Consolidated Balance Sheet until the liability is settled. The Company did not execute any transfers under these agreements during the three months ended March 31, 2023.
Fair Value
The fair values of the unsecured senior notes were estimated using quoted market prices for identical liabilities that are traded in over-the-counter secondary markets. The fair value of the Term Loan Facility was estimated using dealer quotes for identical liabilities in markets that are not considered active. The unsecured senior notes and Term Loan Facility were classified as Level 2 within the fair value hierarchy. The carrying value of the Revolving Loan Facility approximates fair value.
The approximate fair values and related carrying values of the Company’s long-term debt, including current maturities and excluding unamortized discount and unamortized deferred financing costs, were as follows:
March 31, 2023December 31, 2022
Fair value$5,397.9 $5,412.6 
Carrying value5,829.9 5,959.0 
6.    Income Taxes
Income tax expense was $66 million and $80 million for the three months ended March 31, 2023 and 2022, respectively. The effective tax rate, expressed by calculating the income tax expense as a percentage of Income before income taxes, was 22.3% and 24.3% for the three months ended March 31, 2023 and 2022, respectively.
The effective tax rate for both the three months ended March 31, 2023 and March 31, 2022 differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes, partially offset by excess tax benefits on equity-based compensation.
7.    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:
Three Months Ended March 31,
20232022
Basic weighted-average shares outstanding135.6134.9
Effect of dilutive securities(1)
1.71.8
Diluted weighted-average shares outstanding(2)
137.3136.7
(1)The dilutive effect of outstanding stock options, restricted stock units, performance share units and Coworker Stock Purchase Plan units is reflected in the diluted weighted-average shares outstanding using the treasury stock method.
(2)There were fewer than 0.2 million potential common shares excluded from diluted weighted-average shares outstanding for both the three months ended March 31, 2023 and 2022. Inclusion of these common shares in diluted weighted average shares outstanding would have had an anti-dilutive effect.
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CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
8.    Commitments and Contingencies
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 US bankruptcy laws or similar laws of the jurisdictions for the Company’s business activities outside of the US. 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 March 31, 2023, 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 Consolidated Financial Statements could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.
A subsidiary of the Company received a Civil Investigative Demand dated September 20, 2021 from the Department of Justice (“DOJ”) in connection with a False Claims Act investigation. The DOJ requested information related to teaming agreements with original equipment manufacturers and the Company is cooperating with the DOJ. At this stage of the matter, the Company is unable to assess the probability of any outcome or the range of possible loss, if any.
9.    Segment Information
The Company’s segment information reflects the way the chief operating decision maker uses internal reporting to evaluate business performance, allocate resources and manage operations.
The Company has three reportable segments: Corporate, which is comprised primarily of private sector business customers with more than 250 employees in the US, Small Business, primarily servicing private sector business customers with up to 250 employees in the US, 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”).
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 the Corporate, Small Business and Public segments. As a result, costs and intercompany charges associated with the logistics function are fully allocated to all 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.
Information about the Company’s segments is as follows:
CorporateSmall BusinessPublicOtherHeadquartersTotal
Three Months Ended March 31, 2023
Net sales$2,203.7 $411.4 $1,812.8 $675.2 $ $5,103.1 
Operating income (loss)193.3 41.5 127.5 36.5 (43.5)355.3 
Depreciation and amortization expense(22.8)(1.3)(16.2)(7.8)(22.6)(70.7)
Three Months Ended March 31, 2022
Net sales$2,627.6 $524.0 $2,033.0 $764.5 $ $5,949.1 
Operating income (loss)210.0 46.7 141.8 36.7 (48.3)386.9 
Depreciation and amortization expense(25.0)(1.4)(16.3)(8.4)(20.3)(71.4)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
Geographic Areas and Revenue Mix
Three Months Ended March 31, 2023
CorporateSmall BusinessPublicOtherTotal
Geography(1)
United States$2,199.2 $409.6 $1,812.6 $8.5 $4,429.9 
Rest of World4.5 1.8 0.2 666.7 673.2 
Total Net sales2,203.7 411.4 1,812.8 675.2 5,103.1 
Major Product and Services
Hardware1,519.4 334.7 1,362.5 471.6 3,688.2 
Software453.0 56.2 301.5 134.0 944.7 
Services215.5 15.7 144.4 66.5 442.1 
Other(2)
15.8 4.8 4.4 3.1 28.1 
Total Net sales2,203.7 411.4 1,812.8 675.2 5,103.1 
Sales by Channel
Corporate2,203.7    2,203.7 
Small Business 411.4   411.4 
Government  551.5  551.5 
Education  665.7  665.7 
Healthcare  595.6  595.6 
Other   675.2 675.2 
Total Net sales2,203.7 411.4 1,812.8 675.2 5,103.1 
Timing of Revenue Recognition
Transferred at a point in time where CDW is principal1,861.4 365.3 1,608.6 590.5 4,425.8 
Transferred at a point in time where CDW is agent185.4 36.8 101.5 28.4 352.1 
Transferred over time where CDW is principal156.9 9.3 102.7 56.3 325.2 
Total Net sales$2,203.7 $411.4 $1,812.8 $675.2 $5,103.1 
(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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
Three Months Ended March 31, 2022
CorporateSmall BusinessPublicOtherTotal
Geography(1)
United States$2,616.8 $524.0 $2,033.0 $4.6 $5,178.4 
Rest of World10.8   759.9 770.7 
Total Net sales2,627.6 524.0 2,033.0 764.5 5,949.1 
Major Product and Services
Hardware1,983.6 443.5 1,646.3 608.7 4,682.1 
Software399.8 59.8 253.2 85.6 798.4 
Services225.3 15.1 129.2 67.9 437.5 
Other(2)
18.9 5.6 4.3 2.3 31.1 
Total Net sales2,627.6 524.0 2,033.0 764.5 5,949.1 
Sales by Channel
Corporate2,627.6    2,627.6 
Small Business 524.0   524.0 
Government  543.9  543.9 
Education  902.8  902.8 
Healthcare  586.3  586.3 
Other   764.5 764.5 
Total Net sales2,627.6 524.0 2,033.0 764.5 5,949.1 
Timing of Revenue Recognition
Transferred at a point in time where CDW is principal2,291.2 480.0 1,840.3 677.1 5,288.6 
Transferred at a point in time where CDW is agent180.6 34.3 96.3 29.5 340.7 
Transferred over time where CDW is principal155.8 9.7 96.4 57.9 319.8 
Total Net sales$2,627.6 $524.0 $2,033.0 $764.5 $5,949.1 
(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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
The following table presents Net sales by major category for the three months ended March 31, 2023 and 2022. Categories are based upon internal classifications.
Three Months Ended March 31,
2023
2022
Net SalesPercentage
of Total Net
Sales
Net SalesPercentage
of Total Net
Sales
Hardware:
Notebooks/Mobile Devices$1,064.6 20.9 %$1,713.8 28.8 %
Netcomm Products(3)
744.5 14.6 567.7 9.5 
Desktops