v2.4.1.9

Goodwill And Other Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill And Other Intangible Assets | Goodwill and Other Intangible Assets As described in Note 1, the Company is required to perform an evaluation of goodwill 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. The Company has two reportable segments: Corporate, which is comprised primarily of business customers, and Public, which is comprised of government entities and education and healthcare institutions. The Company also has three other operating segments, CDW Advanced Services, Canada, and Kelway, which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other” for segment reporting purposes. The Company has the option of performing a qualitative assessment of a reporting unit's fair value from the last quantitative assessment to determine if it is more likely than not that the reporting unit's goodwill is impaired or performing a quantitative assessment by comparing a reporting unit's estimated fair value to its carrying amount. Under the 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 and a market approach, 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 determined 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. Under the market approach, the Company utilized 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 were 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 revenue growth rates, gross margins, operating margins, discount rates and future market conditions, among others. December 1, 2014 Evaluation The Company performed its annual evaluation of goodwill as of December 1, 2014 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 169%, 147%, 276% and 78% for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75%/25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2014 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate and Public reporting units were discounted at 9.0%; cash flows for the Canada and CDW Advanced Services reporting units were discounted at 9.3% and 11.5%, respectively, based on the future growth rates assumed in the discounted cash flows. Discount rates utilized during the 2014 goodwill evaluation declined compared to those used in 2013 as a result of the market performance of the Company's common stock and a lower equity risk premium with the exception of CDW Advanced Services. The discount rate for CDW Advanced Services increased to account for additional forecast risk. December 1, 2013 Evaluation The Company performed its annual evaluation of goodwill as of December 1, 2013 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 107%, 82%, 167% and 168% for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75%/25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2013 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate and Public reporting units were discounted at 10.0%; cash flows for the Canada and CDW Advanced Services reporting units were discounted at 10.3% and 10.5%, respectively, based on the future growth rates assumed in the discounted cash flows. Discount rates utilized during the 2013 goodwill evaluation declined compared to those used in 2012 as a result of the market performance of the Company's common stock and a lower equity risk premium. December 1, 2012 Evaluation The Company performed its annual evaluation of goodwill as of December 1, 2012 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 49%, 44%, 104% and 17% for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75%/25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2012 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate and Public reporting units were discounted at 11.5%; cash flows for the Canada and CDW Advanced Services reporting units were discounted at 11.8% and 12.0%, respectively, based on the future growth rates assumed in the discounted cash flows. The following table presents the change in goodwill by segment for the years ended December 31, 2014 and 2013:
(in millions) | Corporate |  | Public |  | Other (1) |  | Consolidated
Balances as of December 31, 2012: |  |  |  |  |  |  |
Goodwill | $ | 2,794.4 |  |  | $ | 1,261.4 |  |  | $ | 107.3 |  |  | $ | 4,163.1 |
Accumulated impairment charges | (1,571.4 | ) |  | (354.1 | ) |  | (28.3 | ) |  | (1,953.8 | )
| $ | 1,223.0 |  |  | $ | 907.3 |  |  | $ | 79.0 |  |  | $ | 2,209.3 |
2013 Activity: |  |  |  |  |  |  |
Translation adjustment | $ | — |  |  | $ | — |  |  | $ | (2.1 | ) |  | $ | (2.1 | )
Contingent consideration (2) | 8.8 |  |  | 4.0 |  |  | 0.3 |  |  | 13.1 |
| $ | 8.8 |  |  | $ | 4.0 |  |  | $ | (1.8 | ) |  | $ | 11.0 |
Balances as of December 31, 2013: |  |  |  |  |  |  |
Goodwill | $ | 2,803.2 |  |  | $ | 1,265.4 |  |  | $ | 105.5 |  |  | $ | 4,174.1 |
Accumulated impairment charges | (1,571.4 | ) |  | (354.1 | ) |  | (28.3 | ) |  | (1,953.8 | )
| $ | 1,231.8 |  |  | $ | 911.3 |  |  | $ | 77.2 |  |  | $ | 2,220.3 |
2014 Activity: |  |  |  |  |  |  |
Translation adjustment | $ | — |  |  | $ | — |  |  | $ | (2.7 | ) |  | $ | (2.7 | )
| $ | — |  |  | $ | — |  |  | $ | (2.7 | ) |  | $ | (2.7 | )
Balances as of December 31, 2014: |  |  |  |  |  |  |
Goodwill | $ | 2,803.2 |  |  | $ | 1,265.4 |  |  | $ | 102.8 |  |  | $ | 4,171.4 |
Accumulated impairment charges | (1,571.4 | ) |  | (354.1 | ) |  | (28.3 | ) |  | (1,953.8 | )
| $ | 1,231.8 |  |  | $ | 911.3 |  |  | $ | 74.5 |  |  | $ | 2,217.6 |
(1) | Other is comprised of CDW Advanced Services, Canada, and Kelway reporting units. There is no goodwill attributable to the Kelway reporting unit.
(2) | During 2013, the Company recorded a $13.1 million net-of-tax addition to goodwill in connection with the settlement of the MPK Coworker Incentive Plan II and related charitable contribution. The charitable contribution was accounted for as additional purchase price (goodwill) in accordance with pre-2009 business combinations accounting guidance. See Note 10 for additional discussion of this transaction.
The following table presents a summary of intangible assets at December 31, 2014 and 2013:
(in millions) |  |  |  |  |  |
December 31, 2014 |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Customer relationships |  | $ | 1,859.7 |  |  | $ | 1,012.1 |  |  | $ | 847.6 |
Trade name |  | 421.0 |  |  | 152.0 |  |  | 269.0 |
Internally developed software |  | 110.1 |  |  | 58.9 |  |  | 51.2 |
Other |  | 3.2 |  |  | 2.2 |  |  | 1.0 |
Total |  | $ | 2,394.0 |  |  | $ | 1,225.2 |  |  | $ | 1,168.8 |
December 31, 2013 |  |  |  |  |  |
Customer relationships |  | $ | 1,860.8 |  |  | $ | 872.8 |  |  | $ | 988.0 |
Trade name |  | 421.0 |  |  | 130.9 |  |  | 290.1 |
Internally developed software |  | 128.5 |  |  | 79.8 |  |  | 48.7 |
Other |  | 3.1 |  |  | 1.9 |  |  | 1.2 |
Total |  | $ | 2,413.4 |  |  | $ | 1,085.4 |  |  | $ | 1,328.0 |
During 2014, the Company recorded disposals of $41.7 million to remove fully amortized internally developed software assets that were no longer in use from intangible assets. Amortization expense related to intangible assets for the years ended December 31, 2014, 2013 and 2012 was $182.1 million, $181.0 million and $178.2 million, respectively. Estimated future amortization expense related to intangible assets for the next five years is as follows:
(in millions) |
Years ending December 31, |
2015 | $ | 180.7 |
2016 | 172.8 |
2017 | 167.1 |
2018 | 160.4 |
2019 | 158.9 |

X
- Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration