EX-99.1 2 cdw-2021630earningsrelease.htm EX-99.1
CDW Reports Second Quarter 2021 Earnings
Reinforces Power of Business Model and Strategy

(Dollars in millions, except per share amounts) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | % Chg. | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | % Chg.
Net Sales | $ | 5,146.4 |  | $ | 4,365.7 |  | 17.9 |  | $ | 9,983.9 |  | $ | 8,754.9 |  | 14.0 |
Average Daily Sales 1 | 80.4 |  | 68.2 |  | 17.9 |  | 78.6 |  | 68.4 |  | 14.9 |
Gross Profit | 882.8 |  | 747.2 |  | 18.2 |  | 1,678.0 |  | 1,503.7 |  | 11.6 |
Operating Income | 369.9 |  | 283.4 |  | 30.5 |  | 693.3 |  | 529.2 |  | 31.0 |
Net Income | 274.1 |  | 189.1 |  | 44.9 |  | 506.7 |  | 357.0 |  | 41.9 |
Non-GAAP Operating Income 2 | 418.1 |  | 338.2 |  | 23.6 |  | 785.8 |  | 642.1 |  | 22.4 |
Net Income per Diluted Share | $ | 1.93 |  | $ | 1.31 |  | 47.4 |  | $ | 3.56 |  | $ | 2.47 |  | 44.1 |
Non-GAAP Net Income per Diluted Share 2 | $ | 2.02 |  | $ | 1.56 |  | 29.3 |  | $ | 3.76 |  | $ | 2.94 |  | 27.9 |
1 There were 64 selling days for both the three months ended June 30, 2021 and 2020. There were 127 and 128 selling days for the six months ended June 30, 2021 and 2020, respectively.
2 Non-GAAP measures used in this release that are not based on accounting principles generally accepted in the United States of America ("US GAAP") are each defined and reconciled to the most directly comparable US GAAP measure in the attached schedules.

LINCOLNSHIRE, Ill., August 4, 2021 - CDW Corporation (Nasdaq: CDW), a leading multi-brand provider of information technology solutions to business, government, education and healthcare customers in the United States, the United Kingdom and Canada, today announced second quarter 2021 results. CDW also announced the approval by its Board of Directors of a quarterly cash dividend of $0.40 to be paid on September 10, 2021 to all stockholders of record as of the close of business on August 25, 2021.
“We delivered a record quarter with outstanding Net sales performance and excellent profitability, reinforcing confidence in our strategy and the strength of our business model. Demand from commercial customers increased sharply as economies rebounded and customers turned to CDW for expertise across the full technology solutions stack. Our teams helped customers orchestrate critical digital transformation initiatives, bolster security frameworks and make investments to enable in-person and hybrid models,” said Christine A. Leahy, president and chief executive officer, CDW. “I am extremely proud of the commitment, agility and resolve of our coworkers, who successfully delivered customer outcomes and capabilities in a supply constrained environment.”
“Strong operating results were amplified by share repurchases, delivering a 29 percent increase in Non-GAAP net income per diluted share," said Collin B. Kebo, chief financial officer, CDW. “Given this quarter's results and our expectations for the balance of the year, we now expect 2021 constant currency Non-GAAP net income per diluted share growth in the mid-teens."
“We expect to exceed our 2021 outlook to outpace US IT market growth by 200 to 300 basis points on a constant currency basis. We will continue to execute our strategy, invest in the business, and be laser-focused on meeting the needs of our more than 250,000 customers in the United States, the United Kingdom and Canada and remaining the partner of choice for more than 1,000 leading and emerging technology brands as the technology market continues to evolve," concluded Leahy.
1

Second Quarter of 2021 Highlights:
Total Net sales in the second quarter of 2021 were $5,146 million, compared to $4,366 million in the second quarter of 2020, an increase of 17.9 percent. There were 64 selling days for both the three months ended June 30, 2021 and 2020. Net sales growth on a constant currency basis increased 16.3 percent. Currency impact to Net sales growth was driven by favorable translation of the Canadian dollar and British pound to US dollar. Second quarter Net sales performance included:
•Total Corporate segment Net sales of $1,983 million, 27.3 percent higher than 2020.
•Total Small Business segment Net sales of $483 million, 59.8 percent higher than 2020.
•Total Public segment Net sales of $2,081 million, 2.9 percent higher than 2020. Public results were driven by an increase in Net sales to Education and Healthcare customers of 26.8 percent and 7.0 percent, respectively. Net sales to Government customers decreased 28.7 percent.
•Net sales for CDW's UK and Canadian operations, combined as "Other" for financial reporting purposes, were $600 million, 23.8 percent higher than 2020.
Gross profit in the second quarter of 2021 was $883 million, compared to $747 million for the second quarter of 2020, representing an increase of 18.2 percent. Gross profit margin was 17.2 percent in the second quarter of 2021 versus 17.1 percent in the second quarter of 2020. The increase in Gross profit margin was primarily driven by an increase in the mix of net service contract revenue, primarily Software as a Service, and increased Net sales and margins on professional services, partially offset by overlapping higher margin configuration services in the prior year.
Total selling and administrative expenses were $513 million in the second quarter of 2021, compared to $464 million in the second quarter of 2020, representing an increase of 10.6 percent. The increase was primarily due to higher sales payroll expenses consistent with higher Gross profit, higher coworker count and higher performance-based compensation consistent with higher attainment against goals, partially offset by lower intangible asset amortization.
Operating income was $370 million in the second quarter of 2021, compared to $283 million in the second quarter of 2020, representing an increase of 30.5 percent. Non-GAAP operating income was $418 million in the second quarter of 2021, compared to $338 million in the second quarter of 2020, representing an increase of 23.6 percent. The Non-GAAP operating income margin was 8.1 percent for the second quarter of 2021 versus 7.7 percent for the second quarter of 2020.
Net interest expense was $36 million in the second quarter of 2021, compared to $40 million in the second quarter of 2020, representing a decrease of 10.6 percent. The decrease was primarily driven by the benefits from the August 2020 senior notes refinancing, a lower effective interest rate on the Term Loan in 2021 compared to 2020 and lower borrowings under the revolving credit facility in 2021 compared to 2020.
The effective tax rate was 26.2 percent in the second quarter of 2021, compared to 22.9 percent in the second quarter of 2020, which resulted in tax expense of $97 million and $56 million, respectively. The increase was primarily attributable to lower excess tax benefits on equity-based compensation and a discrete deferred tax expense as a result of an increase in the UK corporate tax rate effective in 2023.
Net income was $274 million in the second quarter of 2021, compared to $189 million in the second quarter of 2020, representing an increase of 44.9 percent. Net income for the second quarter of 2021 included a $36 million gain from the sale of an equity method investment, as reported within Other income, net. Non-GAAP net income was $286 million in the second quarter of 2021, compared to $225 million in the second quarter of 2020, representing an increase of 27.0 percent.
Weighted average diluted shares outstanding were 142 million for the second quarter of 2021, compared to 144 million for the second quarter of 2020. Net income per diluted share for the second quarter of 2021 was $1.93, compared to $1.31 for the second quarter of 2020, representing an increase of 47.4 percent.
2

Non-GAAP net income per diluted share for the second quarter of 2021 was $2.02, compared to $1.56 for the second quarter of 2020, representing an increase of 29.3 percent.
Year to Date 2021 Highlights:
Total Net sales for the first six months ("year to date") of 2021 were $9,984 million, compared to $8,755 million for year to date 2020, an increase of 14.0 percent. There were 127 and 128 selling days for the six months ended June 30, 2021 and 2020, respectively. On an average daily sales basis, Net sales growth increased 14.9 percent and Net sales growth on a constant currency average daily sales basis increased 13.6 percent. Currency impact to Net sales growth was driven by favorable translation of the Canadian dollar and British pound to US dollar. The year to date Net sales performance, on an average daily sales basis, included:
•Total Corporate segment Net sales of $3,789 million, 10.1 percent higher than 2020.
•Total Small Business segment Net sales of $916 million, 33.0 percent higher than 2020.
•Total Public segment Net sales of $4,002 million, 13.7 percent higher than 2020. Public results were driven by an increase in Net sales to Education and Healthcare customers of 53.1 percent and 2.0 percent, respectively. Net sales to Government customers decreased 19.5 percent.
•Net sales for CDW's UK and Canadian operations, combined as “Other” for financial reporting purposes, were $1,277 million, 23.1 percent higher than 2020.
Gross profit for year to date 2021 was $1,678 million, compared to $1,504 million for 2020, representing an increase of 11.6 percent. Gross profit margin was 16.8 percent for year to date 2021 versus 17.2 percent for 2020. The decrease in Gross profit margin was primarily driven by lower product margin, including notebook mix and rate, and overlapping higher margin configuration services in the prior year, partially offset by an increase in the mix of net service contract revenue, primarily Software as a Service, and increased Net sales and margins on professional services.
Total selling and administrative expenses were $985 million for year to date 2021, compared to $975 million for 2020, representing an increase of 1.1 percent. The increase was primarily due to higher payroll expenses consistent with higher Gross profit, higher coworker count, and higher performance-based compensation consistent with higher attainment against goals, partially offset by lower intangible asset amortization and lower bad debt expense.
Operating income was $693 million for year to date 2021, compared to $529 million in 2020, representing an increase of 31.0 percent. Non-GAAP operating income was $786 million for year to date 2021, compared to $642 million for 2020, representing an increase of 22.4 percent. The Non-GAAP operating income margin was 7.9 percent for year to date 2021 versus 7.3 percent for 2020.
Net interest expense was $71 million for year to date 2021, compared to $78 million for 2020, representing a decrease of 8.4 percent. The decrease was primarily driven by a lower effective interest rate on the Term Loan in 2021 compared to 2020, the benefits from the August 2020 senior notes refinancing, lower amortization on interest rate cap premiums and lower borrowings under the revolving credit facility in 2021 compared to 2020, partially offset by additional interest expense on the April 2020 senior notes.
The effective tax rate was 23.2 percent for year to date 2021, compared to 21.9 percent for 2020, which resulted in tax expense of $153 million and $100 million, respectively. The increase was primarily attributable to a less favorable tax rate impact of excess tax benefits on equity-based compensation and a discrete deferred tax expense as a result of an increase in the UK corporate tax rate effective in 2023.
Net income was $507 million for year to date 2021, compared to $357 million for 2020, representing an increase of 41.9 percent. Net income for year to date 2021 included a $36 million gain from the sale of an
3

equity method investment, as reported within Other income, net. Non-GAAP net income was $536 million for year to date 2021, compared to $425 million for 2020, representing an increase of 25.9 percent.
Weighted average diluted shares outstanding were 142 million for year to date 2021, compared to 145 million for 2020. Net income per diluted share for year to date 2021 was $3.56, compared to $2.47 for 2020, representing an increase of 44.1 percent. Non-GAAP net income per diluted share for year to date 2021 was $3.76, compared to $2.94 for 2020, representing an increase of 27.9 percent.
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results or events 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 release.
These forward-looking statements are identified by the use of terms and phrases such as "anticipate," "assume," "believe," "estimate," "expect," "goal," "intend," "plan," "potential," "predict," "project," "target" and similar terms and phrases or future or conditional verbs such as "could," "may," "should," "will," and "would." However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions and other 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 or events to differ materially from those that we expected.
Important factors that could cause actual results or events to differ materially from our expectations, or cautionary statements, are disclosed under the section entitled "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2020 and from time to time in our subsequent Quarterly Reports on Form 10-Q and our other US Securities and Exchange Commission ("SEC") filings. These factors include, among others, the COVID-19 pandemic and actions taken in response thereto and the associated impact on our business, results of operations, cash flows, financial condition and liquidity; CDW's relationships with vendor partners and terms of their agreements; continued innovations in hardware, software and services offerings by CDW's vendor partners; substantial competition that could reduce CDW's market share; the continuing development, maintenance and operation of CDW's information technology systems; potential breaches of data security and failure to protect our information technology systems from cybersecurity threats; potential failures to provide high-quality services to CDW's customers; potential losses of any key personnel; potential adverse occurrences at one of CDW's primary facilities or customer data centers; increases in the cost of commercial delivery services or disruptions of those services; CDW's exposure to accounts receivable and inventory risks; future acquisitions or alliances; fluctuations in CDW's operating results; fluctuations in foreign currency; global and regional economic and political conditions; potential interruptions of the flow of products from suppliers; decreases in spending on technology products and services; potential failures to comply with Public segment contracts or applicable laws and regulations; current and future legal proceedings and audits; changes in laws, including regulations or interpretations thereof; CDW's level of indebtedness and ability to generate sufficient cash to service such indebtedness; restrictions imposed by agreements relating to CDW's indebtedness on its operations and liquidity; changes in, or the discontinuation of, CDW's share repurchase program or dividend payments; and other risk factors or uncertainties identified from time to time in CDW's filings with the SEC. 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" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2020 as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this release in the context of these risks and uncertainties.
4

We caution you that the important factors referenced above may not reflect all of the factors that could cause actual results or events 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 release 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.
Non-GAAP Financial Information
Non-GAAP operating income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and related payroll taxes, and acquisition and integration expenses. Non-GAAP operating income margin is defined as Non-GAAP operating income as a percentage of Net sales. Non-GAAP income before income taxes and Non-GAAP net income exclude, among other things, charges related to acquisition-related intangible asset amortization, equity-based compensation, acquisition and integration expenses, and the associated tax effects of each. Net sales growth on a constant currency basis is defined as Net sales growth excluding the impact of foreign currency translation on Net sales compared to the prior period.
Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP income before income taxes, Non-GAAP net income, Non-GAAP net income per diluted share and 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 or financial position 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 US GAAP.
CDW believes these measures provide analysts, investors and management with helpful information regarding the underlying operating performance of CDW's business, as they remove the impact of items that management believes are not reflective of underlying operating performance. CDW uses these measures to evaluate period-over-period performance as management believes they provide a more comparable measure of the underlying business.
Our annual targets are provided on a Non-GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled, such as currency impacts or interest rates, or reliably predicted because they are not part of CDW's routine activities, such as refinancing activities or acquisition and integration expenses.
The financial statement tables that accompany this press release include a reconciliation of non-GAAP financial measures to the applicable most comparable US GAAP financial measures. Non-GAAP measures used by CDW may differ from similar measures used by other companies, even when similar terms are used to identify such measures.
About CDW
CDW Corporation (Nasdaq: CDW) is a leading multi-brand provider of information technology solutions to business, government, education and healthcare customers in the United States, the United Kingdom and Canada. A Fortune 500 company and member of the S&P 500 Index, CDW was founded in 1984 and employs over 10,500 coworkers. For the trailing twelve months ended June 30, 2021, CDW generated Net sales of approximately $20 billion. For more information about CDW, please visit www.CDW.com.
Webcast
CDW Corporation will hold a conference call today, August 4, 2021 at 7:30 a.m. CT/8:30 a.m. ET to discuss its second quarter financial results. The conference call, which will be broadcast live via the Internet, and a copy of this press release along with supplemental slides used during the call, can be accessed on CDW’s website at investor.cdw.com. For those unable to participate in the live call, a replay of the webcast will be available at investor.cdw.com approximately 90 minutes after the completion of the call and will be accessible on the site for approximately one year.
5

Investor Inquiries Media Inquiries
Brittany A. Smith Sara Granack
Vice President, Investor Relations and Vice President, Corporate Communications
Financial Planning and Analysis (847) 419-7411
(847) 968-0238 mediarelations@cdw.com
investorrelations@cdw.com
CDWPR-FI
6

CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars and shares in millions, except per-share amounts)
(unaudited)

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |  |
|  | 2021 |  | 2020 |  | % Change(i) |  |  | 2021 |  | 2020 |  | % Change(i) |  |
Net sales |  | $ | 5,146.4 |  |  | $ | 4,365.7 |  |  | 17.9 | % |  |  | $ | 9,983.9 |  |  | $ | 8,754.9 |  |  | 14.0 | % |  |
Cost of sales |  | 4,263.6 |  |  | 3,618.5 |  |  | 17.8 |  |  |  | 8,305.9 |  |  | 7,251.2 |  |  | 14.5 |  |  |
Gross profit |  | 882.8 |  |  | 747.2 |  |  | 18.2 |  |  |  | 1,678.0 |  |  | 1,503.7 |  |  | 11.6 |  |  |
Selling and administrative expenses |  | 512.9 |  |  | 463.8 |  |  | 10.6 |  |  |  | 984.7 |  |  | 974.5 |  |  | 1.1 |  |  |
Operating income |  | 369.9 |  |  | 283.4 |  |  | 30.5 |  |  |  | 693.3 |  |  | 529.2 |  |  | 31.0 |  |  |
Interest expense, net |  | (35.5) |  |  | (39.7) |  |  | (10.6) |  |  |  | (71.1) |  |  | (77.6) |  |  | (8.4) |  |  |
Other income, net |  | 36.8 |  |  | 1.7 |  |  | nm* |  |  | 37.9 |  |  | 5.6 |  |  | nm* |  |
Income before income taxes |  | 371.2 |  |  | 245.4 |  |  | 51.3 |  |  |  | 660.1 |  |  | 457.2 |  |  | 44.4 |  |  |
Income tax expense |  | (97.1) |  |  | (56.3) |  |  | 72.8 |  |  |  | (153.4) |  |  | (100.2) |  |  | 53.1 |  |  |
Net income |  | $ | 274.1 |  |  | $ | 189.1 |  |  | 44.9 | % |  |  | $ | 506.7 |  |  | $ | 357.0 |  |  | 41.9 | % |  |
Net income per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.96 |  |  | $ | 1.32 |  |  | 47.6 | % |  |  | $ | 3.60 |  |  | $ | 2.50 |  |  | 43.9 | % |  |
Diluted |  | $ | 1.93 |  |  | $ | 1.31 |  |  | 47.4 | % |  |  | $ | 3.56 |  |  | $ | 2.47 |  |  | 44.1 | % |  |
Weighted-average common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | 139.8 |  |  | 142.4 |  |  |  |  |  | 140.6 |  |  | 142.5 |  |  |  |  |
Diluted |  | 141.7 |  |  | 144.3 |  |  |  |  |  | 142.4 |  |  | 144.6 |  |  |  |  |

* not meaningful
(i)There were 64 selling days for both the three months ended June 30, 2021 and 2020. There were 127 and 128 selling days for the six months ended June 30, 2021 and 2020, respectively.
7

CDW CORPORATION AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
CDW has included reconciliations of Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP income before income taxes, Non-GAAP net income, Non-GAAP net income per diluted share and Net sales growth on a constant currency basis for the three and six months ended June 30, 2021 and 2020 below.
CDW CORPORATION AND SUBSIDIARIES
NON-GAAP OPERATING INCOME AND NON-GAAP OPERATING INCOME MARGIN
(dollars in millions)
(unaudited)

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | % of Net sales |  | 2020 |  | % of Net sales |  | 2021 |  | % of Net sales |  | 2020 |  | % of Net sales
Operating income, as reported | $ | 369.9 |  |  | 7.2 | % |  | $ | 283.4 |  |  | 6.5 | % |  | $ | 693.3 |  |  | 6.9 | % |  | $ | 529.2 |  |  | 6.0 | %
Amortization of intangibles(i) | 24.4 |  |  |  |  | 44.4 |  |  |  |  | 46.0 |  |  |  |  | 89.0 |  |  |
Equity-based compensation | 20.6 |  |  |  |  | 5.6 |  |  |  |  | 36.4 |  |  |  |  | 14.4 |  |  |
Other adjustments | 3.2 |  |  |  |  | 4.8 |  |  |  |  | 10.1 |  |  |  |  | 9.5 |  |  |
Non-GAAP operating income | $ | 418.1 |  |  | 8.1 | % |  | $ | 338.2 |  |  | 7.7 | % |  | $ | 785.8 |  |  | 7.9 | % |  | $ | 642.1 |  |  | 7.3 | %

(i)Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
8

CDW CORPORATION AND SUBSIDIARIES
NON-GAAP INCOME BEFORE INCOME TAXES, NON-GAAP NET INCOME
AND NON-GAAP NET INCOME PER DILUTED SHARE
(dollars and shares in millions, except per-share amounts)
(unaudited)

| Three Months Ended June 30, |  |
| 2021 |  | 2020 |  |
| Income before Income Taxes |  | Income Tax Expense(i) |  | Net Income |  | Effective Tax Rate |  | Income before Income Taxes |  | Income Tax Expense(i) |  | Net Income |  | Effective Tax Rate |  | Net Income % Change
US GAAP, as reported | $ | 371.2 |  |  | $ | (97.1) |  |  | $ | 274.1 |  |  | 26.2 | % |  | $ | 245.4 |  |  | $ | (56.3) |  |  | $ | 189.1 |  |  | 22.9 | % |  | 44.9 | %
Gain on sale of equity method investment | (36.0) |  |  | 8.8 |  |  | (27.2) |  |  |  |  | — |  |  | — |  |  | — |  |  |  |  |
Amortization of intangibles(ii) | 24.4 |  |  | (1.8) |  |  | 22.6 |  |  |  |  | 44.4 |  |  | (11.1) |  |  | 33.3 |  |  |  |  |
Equity-based compensation | 20.6 |  |  | (6.2) |  |  | 14.4 |  |  |  |  | 5.6 |  |  | (6.3) |  |  | (0.7) |  |  |  |  |
Other adjustments | 3.2 |  |  | (1.0) |  |  | 2.2 |  |  |  |  | 4.8 |  |  | (1.2) |  |  | 3.6 |  |  |  |  |
Non-GAAP | $ | 383.4 |  |  | $ | (97.3) |  |  | $ | 286.1 |  |  | 25.4 | % |  | $ | 300.2 |  |  | $ | (74.9) |  |  | $ | 225.3 |  |  | 24.9 | % |  | 27.0 | %
US GAAP net income per diluted share |  |  |  |  | $ | 1.93 |  |  |  |  |  |  |  |  | $ | 1.31 |  |  |  |  |
Non-GAAP net income per diluted share |  |  |  |  | $ | 2.02 |  |  |  |  |  |  |  |  | $ | 1.56 |  |  |  |  |
Shares used in computing US GAAP and Non-GAAP net income per diluted share |  |  |  |  | 141.7 |  |  |  |  |  |  |  |  | 144.3 |  |  |  |  |

(i)Income tax on non-GAAP adjustments includes excess tax benefits associated with equity-based compensation.
(ii)Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
9

CDW CORPORATION AND SUBSIDIARIES
NON-GAAP INCOME BEFORE INCOME TAXES, NON-GAAP NET INCOME
AND NON-GAAP NET INCOME PER DILUTED SHARE
(dollars and shares in millions, except per-share amounts)
(unaudited)

| Six Months Ended June 30, |  |
| 2021 |  | 2020 |  |
| Income before Income Taxes |  | Income Tax Expense(i) |  | Net Income |  | Effective Tax Rate |  | Income before Income Taxes |  | Income Tax Expense(i) |  | Net Income |  | Effective Tax Rate |  | Net Income % Change
US GAAP, as reported | $ | 660.1 |  |  | $ | (153.4) |  |  | $ | 506.7 |  |  | 23.2 | % |  | $ | 457.2 |  |  | $ | (100.2) |  |  | $ | 357.0 |  |  | 21.9 | % |  | 41.9 | %
Gain on sale of equity method investment | (36.0) |  |  | 8.8 |  |  | (27.2) |  |  |  |  | — |  |  | — |  |  | — |  |  |  |  |
Amortization of intangibles(ii) | 46.0 |  |  | (7.2) |  |  | 38.8 |  |  |  |  | 89.0 |  |  | (22.2) |  |  | 66.8 |  |  |  |  |
Equity-based compensation | 36.4 |  |  | (27.0) |  |  | 9.4 |  |  |  |  | 14.4 |  |  | (20.0) |  |  | (5.6) |  |  |  |  |
Other adjustments | 10.5 |  |  | (2.7) |  |  | 7.8 |  |  |  |  | 9.5 |  |  | (2.4) |  |  | 7.1 |  |  |  |  |
Non-GAAP | $ | 717.0 |  |  | $ | (181.5) |  |  | $ | 535.5 |  |  | 25.3 | % |  | $ | 570.1 |  |  | $ | (144.8) |  |  | $ | 425.3 |  |  | 25.4 | % |  | 25.9 | %
US GAAP net income per diluted share |  |  |  |  | $ | 3.56 |  |  |  |  |  |  |  |  | $ | 2.47 |  |  |  |  |
Non-GAAP net income per diluted share |  |  |  |  | $ | 3.76 |  |  |  |  |  |  |  |  | $ | 2.94 |  |  |  |  |
Shares used in computing US GAAP and Non-GAAP net income per diluted share |  |  |  |  | 142.4 |  |  |  |  |  |  |  |  | 144.6 |  |  |  |  |

(i)Income tax on non-GAAP adjustments includes excess tax benefits associated with equity-based compensation.
(ii)Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
10

CDW CORPORATION AND SUBSIDIARIES
NET SALES GROWTH ON A CONSTANT CURRENCY BASIS
(dollars in millions)
(unaudited)

|  | Three Months Ended June 30, |  |  |  | Six Months Ended June 30,
|  | 2021 |  | 2020 |  | % Change(i) |  |  |  | 2021 |  | 2020 |  | % Change |  | Average Daily % Change(i)
Net sales, as reported |  | $ | 5,146.4 |  |  | $ | 4,365.7 |  |  | 17.9 | % |  |  |  | $ | 9,983.9 |  |  | $ | 8,754.9 |  |  | 14.0 | % |  | 14.9 | %
Foreign currency translation(ii) |  | — |  |  | 61.1 |  |  |  |  |  |  | — |  |  | 103.6 |  |  |  |  |
Net sales, on a constant currency basis |  | $ | 5,146.4 |  |  | $ | 4,426.8 |  |  | 16.3 | % |  |  |  | $ | 9,983.9 |  |  | $ | 8,858.5 |  |  | 12.7 | % |  | 13.6 | %

(i)There were 64 selling days for both the three months ended June 30, 2021 and 2020. There were 127 and 128 selling days for the six months ended June 30, 2021 and 2020, respectively.
(ii)Represents the effect of translating the prior year results of CDW UK and CDW Canada at the average exchange rates applicable in the current year.
11

CDW CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)

| June 30, 2021 |  | December 31, 2020 |  | June 30, 2020
Assets | (unaudited) |  |  |  | (unaudited)
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 501.2 |  |  | $ | 1,410.2 |  |  | $ | 958.4 |
Accounts receivable, net of allowance for credit losses of $21.2, $29.6, and $30.7, respectively | 3,370.5 |  |  | 3,212.6 |  |  | 3,029.0 |
Merchandise inventory | 888.7 |  |  | 760.0 |  |  | 694.8 |
Miscellaneous receivables | 430.9 |  |  | 379.5 |  |  | 353.9 |
Prepaid expenses and other | 230.3 |  |  | 191.2 |  |  | 199.7 |
Total current assets | 5,421.6 |  |  | 5,953.5 |  |  | 5,235.8 |
Operating lease right-of-use assets | 124.7 |  |  | 130.8 |  |  | 137.3 |
Property and equipment, net | 176.1 |  |  | 175.5 |  |  | 326.5 |
Goodwill | 2,731.9 |  |  | 2,595.9 |  |  | 2,532.1 |
Other intangible assets, net | 487.3 |  |  | 445.1 |  |  | 492.9 |
Other assets | 49.3 |  |  | 43.9 |  |  | 24.9 |
Total assets | $ | 8,990.9 |  |  | $ | 9,344.7 |  |  | $ | 8,749.5 |
Liabilities and Stockholders’ Equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable - trade | $ | 2,207.4 |  |  | $ | 2,088.4 |  |  | $ | 1,809.0 |
Accounts payable - inventory financing | 375.2 |  |  | 524.6 |  |  | 479.1 |
Current maturities of long-term debt | 19.8 |  |  | 70.9 |  |  | 37.9 |
Contract liabilities | 325.7 |  |  | 243.7 |  |  | 275.4 |
Accrued expenses and other current liabilities | 842.0 |  |  | 970.7 |  |  | 960.1 |
Total current liabilities | 3,770.1 |  |  | 3,898.3 |  |  | 3,561.5 |
Long-term liabilities: |  |  |  |  |
Debt | 3,909.2 |  |  | 3,856.3 |  |  | 3,861.6 |
Deferred income taxes | 33.1 |  |  | 55.3 |  |  | 67.6 |
Operating lease liabilities | 161.5 |  |  | 169.0 |  |  | 138.0 |
Other liabilities | 68.2 |  |  | 68.7 |  |  | 65.2 |
Total long-term liabilities | 4,172.0 |  |  | 4,149.3 |  |  | 4,132.4 |
Total stockholders’ equity | 1,048.8 |  |  | 1,297.1 |  |  | 1,055.6 |
Total liabilities and stockholders’ equity | $ | 8,990.9 |  |  | $ | 9,344.7 |  |  | $ | 8,749.5 |

12

CDW CORPORATION AND SUBSIDIARIES
NET SALES DETAIL
(dollars in millions)
(unaudited)

|  | Three Months Ended June 30, |  |  |  |  | Six Months Ended June 30,
|  | 2021 |  | 2020 |  | % Change(i) |  |  |  |  | 2021 |  | 2020 |  | % Change |  | Average Daily % Change(i)
Corporate |  | $ | 1,983.3 |  |  | $ | 1,557.5 |  |  | 27.3 | % |  |  |  |  | $ | 3,788.9 |  |  | $ | 3,468.5 |  |  | 9.2 | % |  | 10.1 | %
Small Business |  | 482.9 |  |  | 302.1 |  |  | 59.8 |  |  |  |  |  | 915.6 |  |  | 693.6 |  |  | 32.0 |  |  | 33.0 |
Public |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government |  | 513.4 |  |  | 719.7 |  |  | (28.7) |  |  |  |  |  | 1,029.5 |  |  | 1,288.2 |  |  | (20.1) |  |  | (19.5) |
Education |  | 1,112.1 |  |  | 876.8 |  |  | 26.8 |  |  |  |  |  | 2,055.4 |  |  | 1,353.0 |  |  | 51.9 |  |  | 53.1 |
Healthcare |  | 455.2 |  |  | 425.6 |  |  | 7.0 |  |  |  |  |  | 917.5 |  |  | 906.2 |  |  | 1.3 |  |  | 2.0 |
Total Public |  | 2,080.7 |  |  | 2,022.1 |  |  | 2.9 |  |  |  |  |  | 4,002.4 |  |  | 3,547.4 |  |  | 12.8 |  |  | 13.7 |
Other |  | 599.5 |  |  | 484.0 |  |  | 23.8 |  |  |  |  |  | 1,277.0 |  |  | 1,045.4 |  |  | 22.2 |  |  | 23.1 |
Total Net sales |  | $ | 5,146.4 |  |  | $ | 4,365.7 |  |  | 17.9 | % |  |  |  |  | $ | 9,983.9 |  |  | $ | 8,754.9 |  |  | 14.0 | % |  | 14.9 | %

(i)There were 64 selling days for both the three months ended June 30, 2021 and 2020. There were 127 and 128 selling days for the six months ended June 30, 2021 and 2020, respectively.
13

CDW CORPORATION AND SUBSIDIARIES
DEBT AND WORKING CAPITAL INFORMATION
(dollars in millions)

| June 30, 2021 |  | December 31, 2020 |  | June 30, 2020
| (unaudited) |  |  |  | (unaudited)
Debt and Revolver Availability |  |  |  |  |
Cash and cash equivalents | $ | 501.2 |  |  | $ | 1,410.2 |  |  | $ | 958.4 |
Total debt | 3,929.0 |  |  | 3,927.2 |  |  | 3,899.5 |
Revolver availability | 1,228.5 |  |  | 1,059.3 |  |  | 1,029.5 |
Cash plus revolver availability | 1,729.7 |  |  | 2,469.5 |  |  | 1,987.9 |
Working Capital(i) |  |  |  |  |
Days of sales outstanding | 56 |  |  | 57 |  |  | 59 |
Days of supply in inventory | 16 |  |  | 14 |  |  | 18 |
Days of purchases outstanding | (51) |  |  | (54) |  |  | (52) |
Cash conversion cycle | 21 |  |  | 17 |  |  | 25 |

(i)Based on a rolling three-month average.
14

CDW CORPORATION AND SUBSIDIARIES
CASH FLOW INFORMATION
(dollars in millions)
(unaudited)

| Six Months Ended June 30,
| 2021 |  | 2020
Cash flows provided by operating activities | $ | 344.9 |  |  | $ | 515.8 |
Capital expenditures(i) | (38.5) |  |  | (100.0) |
Acquisition of business, net of cash acquired | (211.6) |  |  | — |
Proceeds from the sale of equity method investment | 36.0 |  |  | — |
Cash flows used in investing activities | (214.1) |  |  | (100.0) |
Net change in accounts payable - inventory financing | (150.1) |  |  | 52.3 |
Financing payments for revenue generating assets | (46.1) |  |  | — |
Other cash flows (used in) provided by financing activities | (846.3) |  |  | 342.0 |
Cash flows (used in) provided by financing activities | (1,042.5) |  |  | 394.3 |
Effect of exchange rate changes on cash and cash equivalents | 2.7 |  |  | (5.7) |
Net (decrease) increase in cash and cash equivalents | (909.0) |  |  | 804.4 |
Cash and cash equivalents - beginning of period | 1,410.2 |  |  | 154.0 |
Cash and cash equivalents - end of period | $ | 501.2 |  |  | $ | 958.4 |
Supplementary disclosure of cash flow information: |  |  |
Interest paid | $ | (66.4) |  |  | $ | (67.2) |
Income taxes paid, net | $ | (157.6) |  |  | $ | (21.5) |

(i)Includes expenditures for revenue generating assets.
15