10-Q
Table of Contents

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-Q
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2016
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
CDW CORPORATION
(Exact name of registrant as specified in its charter) 
Delaware
 
26-0273989
(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)
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.    ý  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    ý  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):
 
Large accelerated filer
 
x
  
Accelerated filer
 
¨
 
 
 
 
 
 
 
Non-accelerated filer
 
¨  (Do not check if a smaller reporting company)
  
Smaller reporting company
 
¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     ¨  Yes    ý  No
As of April 30, 2016, there were 165,609,467 shares of common stock, $0.01 par value, outstanding.
 


1

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
FORM 10-Q

TABLE OF CONTENTS
 
 
 
Page
PART I
FINANCIAL INFORMATION
 
Item 1.
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II
OTHER INFORMATION
 
Item 1.
Item 1A.  
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
SIGNATURES
Exhibit Index


2

Table of Contents

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except per-share amounts)
 
March 31, 2016
 
December 31, 2015
Assets
(unaudited)
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
248.2

 
$
37.6

Accounts receivable, net of allowance for doubtful accounts of $5.9 and $6.0, respectively
1,780.2

 
2,017.4

Merchandise inventory
460.4

 
393.1

Miscellaneous receivables
212.7

 
198.4

Prepaid expenses and other
114.8

 
144.3

Total current assets
2,816.3

 
2,790.8

Property and equipment, net
168.4

 
175.4

Goodwill
2,495.2

 
2,500.4

Other intangible assets, net
1,225.4

 
1,276.4

Other assets
12.6

 
12.3

Total assets
$
6,717.9

 
$
6,755.3

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable-trade
$
958.6

 
$
866.5

Accounts payable-inventory financing
372.9

 
439.6

Current maturities of long-term debt
26.9

 
27.2

Deferred revenue
166.3

 
151.9

Accrued expenses:
 
 

Compensation
126.7

 
120.4

Interest
17.5

 
25.1

Sales taxes
38.1

 
38.1

Advertising
50.8

 
52.3

Income taxes
51.6

 

Other
134.0

 
166.2

Total current liabilities
1,943.4

 
1,887.3

Long-term liabilities:
 
 
 
Debt
3,225.0

 
3,232.5

Deferred income taxes
448.5

 
469.6

Other liabilities
61.1

 
70.0

Total long-term liabilities
3,734.6

 
3,772.1

Commitments and contingencies (Note 7)

 


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; 165.5 and 168.2 shares issued and outstanding, respectively
1.7

 
1.7

Paid-in capital
2,817.1

 
2,806.9

Accumulated deficit
(1,710.0
)
 
(1,651.6
)
Accumulated other comprehensive loss
(68.9
)
 
(61.1
)
Total stockholders’ equity
1,039.9

 
1,095.9

Total liabilities and stockholders’ equity
$
6,717.9

 
$
6,755.3


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

3

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per-share amounts)
(unaudited)
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Net sales
 
$
3,116.7

 
$
2,755.2

Cost of sales
 
2,592.2

 
2,298.7

Gross profit
 
524.5

 
456.5

Selling and administrative expenses
 
329.3

 
275.5

Advertising expense
 
34.2

 
29.4

Income from operations
 
161.0

 
151.6

Interest expense, net
 
(38.1
)
 
(44.8
)
Net loss on extinguishments of long-term debt
 

 
(24.3
)
Other income, net
 
1.0

 
4.5

Income before income taxes
 
123.9

 
87.0

Income tax expense
 
(46.1
)
 
(32.3
)
Net income
 
$
77.8

 
$
54.7

 
 
 
 
 
Net income per common share:
 
 
 
 
Basic
 
$
0.47

 
$
0.32

Diluted
 
$
0.46

 
$
0.32

 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
Basic
 
167.3

 
172.1

Diluted
 
168.9

 
173.5

 
 
 
 
 
Cash dividends declared per common share
 
$
0.1075

 
$
0.0675


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


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Table of Contents

CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
 
 
Three Months Ended March 31,
 
 
 
2016
 
2015
 
Net income
 
$
77.8

 
$
54.7

 
Foreign currency translation (net of tax benefit of $0.0 and $1.4 million, respectively)
 
(7.8
)
 
(11.0
)
 
Other comprehensive loss, net of tax
 
(7.8
)
 
(11.0
)
 
Comprehensive income
 
$
70.0

 
$
43.7

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



5

Table of Contents

CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(in millions)
(unaudited)
 
 
Preferred Stock
 
Common Stock
 
 
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Paid-in
Capital
 
Accumulated
Deficit
 
Accumulated
Other
Comprehensive Loss
 
Total
Stockholders’ Equity
Balance as of December 31, 2015
 

 
$

 
168.2

 
$
1.7

 
$
2,806.9

 
$
(1,651.6
)
 
$
(61.1
)
 
$
1,095.9

Net income
 

 

 

 

 

 
77.8

 

 
77.8

Equity-based compensation expense
 

 

 

 

 
6.7

 

 

 
6.7

Stock option exercises
 

 

 

 

 
1.2

 

 

 
1.2

Excess tax benefits from equity-based compensation
 

 

 

 

 
0.2

 

 

 
0.2

Coworker Stock Purchase Plan
 

 

 

 

 
1.9

 

 

 
1.9

Common stock issued for equity-based compensation
 

 

 
0.3

 

 

 

 

 

Repurchases of common stock
 

 

 
(3.0
)
 

 

 
(118.0
)
 

 
(118.0
)
Dividends
 

 

 

 

 
0.2

 
(18.2
)
 

 
(18.0
)
Foreign currency translation
 

 

 

 

 

 

 
(7.8
)
 
(7.8
)
Balance as of March 31, 2016
 

 
$

 
165.5

 
$
1.7

 
$
2,817.1

 
$
(1,710.0
)
 
$
(68.9
)
 
$
1,039.9

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


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Table of Contents

CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

 
 
Three Months Ended March 31,
 
 
2016
 
2015
Cash flows from operating activities:
 
 
 
 
Net income
 
$
77.8

 
$
54.7

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
64.0

 
52.5

Equity-based compensation expense
 
8.4

 
4.7

Deferred income taxes
 
(25.0
)
 
(22.6
)
Amortization of deferred financing costs, debt premium and debt discount, net
 
1.6

 
1.5

Net loss on extinguishments of long-term debt
 

 
24.3

Income from equity investment
 

 
(4.0
)
Other
 

 
1.3

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
237.6

 
105.4

Merchandise inventory
 
(68.2
)
 
(19.7
)
Other assets
 
9.4

 
(23.1
)
Accounts payable-trade
 
91.0

 
(7.0
)
Other current liabilities
 
38.0

 
8.7

Long-term liabilities
 
(7.0
)
 
1.1

Net cash provided by operating activities
 
427.6

 
177.8

Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(11.0
)
 
(10.0
)
Premium payments on interest rate cap agreements
 

 
(0.5
)
Net cash used in investing activities
 
(11.0
)
 
(10.5
)
Cash flows from financing activities:
 
 
 
 
Proceeds from borrowings under revolving credit facility
 
63.4

 

Repayments of borrowings under revolving credit facility
 
(63.4
)
 

Repayments of long-term debt
 
(6.7
)
 
(3.9
)
Proceeds from issuance of long-term debt
 

 
525.0

Payments to extinguish long-term debt
 

 
(525.3
)
Payments of debt financing costs
 

 
(6.8
)
Net change in accounts payable-inventory financing
 
(66.5
)
 
(42.3
)
Proceeds from stock option exercises
 
1.2

 
0.5

Excess tax benefits from equity-based compensation
 
0.2

 
0.1

Proceeds from Coworker Stock Purchase Plan
 
1.9

 
1.7

Repurchases of common stock
 
(118.0
)
 

Dividends
 
(18.0
)
 
(11.7
)
Other
 
(0.5
)
 

Net cash used in financing activities
 
(206.4
)
 
(62.7
)
Effect of exchange rate changes on cash and cash equivalents
 
0.4

 
(1.7
)
Net increase in cash and cash equivalents
 
210.6

 
102.9

Cash and cash equivalents—beginning of period
 
37.6

 
344.5

Cash and cash equivalents—end of period
 
$
248.2

 
$
447.4

Supplementary disclosure of cash flow information:
 
 
 
 
Cash paid for Interest, net
 
$
(44.1
)
 
$
(53.1
)
Cash paid for Income taxes, net
 
$
(6.8
)
 
$
(4.3
)
The accompanying notes are an integral part of the Consolidated Financial Statements.

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Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



1.
Description of Business and Summary of Significant Accounting Policies
Description of Business
CDW Corporation (“Parent”) is a Fortune 500 company with multi-national capabilities and a leading provider of integrated information technology (“IT”) solutions to small, medium and large business, government, education and healthcare customers in the United States, Canada and the United Kingdom. The Company's offerings range from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.
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.

On August 1, 2015, the Company completed the acquisition of Kelway TopCo Limited (“Kelway”) by purchasing the remaining 65% of its outstanding common stock which increased the Company’s ownership interest from 35% to 100%, and provided the Company control. On April 4, 2016, Kelway was rebranded CDW UK. Throughout this report, the term "CDW UK" refers to Kelway. For further details regarding the acquisition, see Note 3 (Acquisition).
Basis of Presentation
The unaudited interim Consolidated Financial Statements as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 (the “Consolidated Financial Statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in Consolidated Financial Statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 (the “December 31, 2015 Consolidated Financial Statements”). The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in the December 31, 2015 Consolidated Financial Statements. 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.
Principles of Consolidation
The accompanying Consolidated Financial Statements include the accounts of Parent and its 100% owned subsidiaries. All intercompany transactions and accounts are eliminated in consolidation.
Use of Estimates
The preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
The notes to the Consolidated Financial Statements contained in the December 31, 2015 Consolidated Financial Statements include an additional discussion of the significant accounting policies and estimates used in the preparation of the Company's Consolidated Financial Statements. There have been no material changes to the Company's significant accounting policies and estimates during the three months ended March 31, 2016.

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Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


2.
Recent Accounting Pronouncements
Improvements to Employee Share-Based Payment Accounting
In March 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, requiring the recognition of the income tax effects of stock awards in the income statement when the awards are settled and allowing the Company to repurchase more of an employee's shares than allowed under current guidance, without triggering liability accounting. This ASU also addresses simplifications related to statement of cash flows classification and accounting for forfeitures. This ASU is effective for the Company beginning in the first quarter of 2017 and allows for early adoption. The Company is currently evaluating the method of adoption and the impact this ASU will have on its Consolidated Financial Statements.
Accounting for Leases
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This ASU is effective for the Company beginning in the first quarter of 2019 and allows for early adoption. The Company is currently evaluating the method of adoption and the impact this ASU will have on its Consolidated Financial Statements.
Balance Sheet Classification of Deferred Taxes
In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, simplifying the presentation of deferred income taxes by requiring all deferred taxes to be presented as noncurrent in the balance sheet. In the first quarter of 2016, the Company elected to early adopt ASU 2015-17 on a prospective basis. The adoption of this standard did not have a material impact on the Company's Consolidated Financial Statements.
Simplifying the Measurement of Inventory
In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, amending the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value instead of the lower of cost or market value. This ASU is effective for the Company beginning in the first quarter of 2017, allows for early adoption and must be applied prospectively after the date of adoption. This ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.
Revenue Recognition
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), replacing most existing revenue recognition guidance under GAAP and eliminating industry specific guidance. The core principle of the new guidance is that an entity should recognize revenue for the transfer of goods and services equal to an amount it expects to be entitled to receive for those goods and services.
In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, deferring the effective date by one year.
In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Gross versus Net), clarifying the principal versus agent guidance in the new revenue recognition standard, by revising the indicators to focus on evidence that the company is a principal. This ASU is effective for the Company beginning in the first quarter of 2018, allows for early adoption in the first quarter of 2017 and may be applied using either a full retrospective approach or a modified retrospective approach. The Company is currently evaluating the method of adoption and the impact this ASU will have on its Consolidated Financial Statements.
3.
Acquisition

On August 1, 2015, the Company completed the acquisition of CDW UK by purchasing the remaining 65% of its outstanding common stock which increased the Company's ownership interest from 35% to 100%, and provided the Company control.

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Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


A summary of the total consideration transferred is as follows:
(in millions)
 
Acquisition-Date Fair Value
Cash
 
$
291.6

Fair value of CDW common stock(1)
 
33.2

Fair value of previously held equity investment on the date of acquisition(2)
 
174.9

Total consideration
 
$
499.7

(1)
The Company issued 2 million shares of CDW common stock. The fair value of the common stock was based on the closing market price on July 31, 2015, adjusted for the lack of marketability as the shares of CDW common stock issued to the sellers are subject to a three-year lock up restriction from August 1, 2015. One of the sellers granted 1 million stock options to certain CDW UK coworkers over his shares of CDW common stock received in the transaction. The fair value of these stock options was $22 million, which has been accounted for as post-combination stock-based compensation and is being amortized over the weighted­-average requisite service period of 3.2 years. Compensation expense for these options is included in Selling and administrative expenses in the Consolidated Statements of Operations.
(2)
As a result of the Company obtaining control over CDW UK, the Company’s previously held 35% equity investment was remeasured to fair value, resulting in a gain of $98 million included in Gain on remeasurement of equity investment in the Consolidated Statements of Operations. The fair value of the previously held equity investment was determined by management with the assistance of a third party valuation firm, based on information available as of the acquisition date.

The recognized amounts of identifiable assets acquired and liabilities assumed, translated using the foreign currency exchange rates on the date of acquisition, are as follows:
(in millions)
 
Acquisition-Date Fair Value(1)
Cash
 
$
27.8

Accounts receivable
 
135.7

Merchandise inventory
 
27.1

Property and equipment, net
 
11.4

Identified intangible assets(2)
 
289.8

Other assets
 
53.6

Total assets acquired
 
545.4

Accounts payable—trade
 
(86.1
)
Deferred revenue
 
(57.2
)
Other liabilities
 
(41.5
)
Deferred tax liabilities
 
(55.1
)
Debt
 
(111.5
)
Total liabilities assumed
 
(351.4
)
Total identifiable net assets
 
194.0

 
 
 
Goodwill
 
305.7

 
 
 
Total purchase price
 
$
499.7

(1)
The fair values assigned to the tangible and intangible assets acquired and liabilities assumed were based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. These fair values are subject to change within the measurement period.

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Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


(2)
Details of the identified intangible assets are as follows:
(in millions)
Acquisition-Date Fair Value
 
Weighted-Average Amortization Period (in years)
Customer relationships
$
260.8

 
13
Customer contracts
25.9

 
3
Developed technology
1.7

 
2
Trade name
1.4

 
1
Total identified intangible assets
$
289.8

 
 

Goodwill in the amount of $306 million was recognized in the acquisition of CDW UK and is attributable to the business from new customers and the value of the acquired assembled workforce. The goodwill was allocated to the CDW UK operating segment which is included with CDW Canada in an all other category (“Other”). The full amount of goodwill recognized is not deductible for income tax purposes in the United Kingdom.
The unaudited pro forma Consolidated Statements of Operations in the table below summarizes the combined results of operations of the Company and CDW UK, as if the acquisition had been completed on January 1, 2015, and gives effect to pro forma events that are factually supportable and directly attributable to the transaction. The unaudited pro forma results reflect adjustments for equity-based compensation, acquisition and integration costs, incremental intangible asset amortization based on the fair values of each identifiable intangible asset, which are subject to change within the measurement period, pre-acquisition equity earnings, the gain on the remeasurement of the Company’s previously held 35% equity method investment, elimination of pre-acquisition intercompany sales transactions and the impacts of certain other pre-acquisition transactions. Pro forma adjustments were tax-effected at the statutory rates within the applicable jurisdictions.
This unaudited pro forma information is presented for informational purposes only and may not be indicative of the historical results of operations that would have been obtained if the acquisition had taken place on January 1, 2015, nor the results that may be obtained in the future. This unaudited pro forma information does not reflect future synergies, integration costs, or other such costs or savings.
The unaudited pro forma Consolidated Statements of Operations for the three months ended March 31, 2015 is as follows:
Net sales
 
$
2,972.7

Net income
 
56.1

The unaudited pro forma information above reflects the following adjustments:
(1)
Excludes acquisition and integration costs directly related to the transaction.
(2)
Includes additional amortization expense related to the fair value of acquired intangibles.
(3)
Excludes the Company's share of net income/loss from its previously held 35% equity investment prior to the completion of the acquisition.
(4)
Excludes non-cash equity-based compensation related to certain equity awards granted by one of the sellers to CDW UK coworkers in July 2015 prior to the completion of the acquisition.
(5)
Includes additional non-cash equity-based compensation related to equity awards granted to CDW UK coworkers after the completion of the acquisition.

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Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


4.
Inventory Financing Agreements
The Company has entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and conditions. These amounts are classified separately as Accounts payable-inventory financing on the Consolidated Balance Sheets. The Company does not incur any interest expense associated with these agreements as balances are paid when they are due. Amounts included in Accounts payable-inventory financing are as follows:
(in millions)
 
March 31, 2016
 
December 31, 2015
Revolving Loan inventory financing agreement
 
$
354.9

 
$
427.0

Other inventory financing agreements(1)
 
18.0

 
12.6

Accounts payable-inventory financing
 
$
372.9

 
$
439.6

(1)
As of March 31, 2016 and December 31, 2015, amounts owed under other inventory financing agreements of $1 million or less for both periods, were collateralized by the inventory purchased under these financing agreements and a second lien on the related accounts receivable.
5.
Long-Term Debt
Long-term debt as of March 31, 2016 is as follows:
(dollars in millions)
 
Interest
Rate
 
Principal
 
Unamortized Discount and Deferred Financing Costs(1)
 
Total
Senior secured asset-based revolving credit facility (1)

%
 
$


$


$

CDW UK revolving credit facility(2)
 
%
 

 

 

Senior secured term loan facility

3.25
%
 
1,494.3


(6.3
)

1,488.0

CDW UK term loan
 
1.99
%
 
83.3

 
(0.5
)
 
82.8

Senior notes due 2022

6.0
%
 
600.0


(6.4
)

593.6

Senior notes due 2023

5.0
%
 
525.0


(6.0
)

519.0

Senior notes due 2024

5.5
%
 
575.0


(6.5
)

568.5

Total long-term debt
 
 
 
3,277.6

 
(25.7
)
 
3,251.9

Less current maturities of long-term debt
 
 
 
(26.9
)
 

 
(26.9
)
Long-term debt, excluding current maturities
 
 
 
$
3,250.7

 
$
(25.7
)
 
$
3,225.0


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Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Long-term debt as of December 31, 2015 is as follows:
(dollars in millions)
 
Interest
Rate
 
Principal
 
Unamortized Discount and Deferred Financing Costs(1)
 
Total
Senior secured asset-based revolving credit facility (1)
 
 
%
 
$

 
$

 
$

CDW UK revolving credit facility (2)
 
%
 

 

 

Senior secured term loan facility
 
3.25
%
 
1,498.1

 
(6.7
)
 
1,491.4

CDW UK Term Loan
 
1.98
%
 
88.4

 
(0.6
)
 
87.8

Senior notes due 2022
 
6.0
%
 
600.0

 
(6.6
)
 
593.4

Senior notes due 2023
 
5.0
%
 
525.0

 
(6.2
)
 
518.8

Senior notes due 2024
 
5.5
%
 
575.0

 
(6.7
)
 
568.3

Total long-term debt
 
 
 
3,286.5

 
(26.8
)
 
3,259.7

Less current maturities of long-term debt
 
 
 
(27.2
)
 

 
(27.2
)
Long-term debt, excluding current maturities
 
 
 
$
3,259.3

 
$
(26.8
)
 
$
3,232.5

(1)
The Senior Secured Asset-Based Revolving Credit Facility (“Revolving Loan”) includes an inventory floorplan sub-facility that is related to the Revolving Loan inventory financing agreement with a financial intermediary. As of March 31, 2016, the Company had no outstanding borrowings under the Revolving Loan, $2 million of undrawn letters of credit and $340 million reserved related to the floorplan sub-facility. As of March 31, 2016, the borrowing base was $1,334 million based on the amount of eligible inventory and accounts receivable balances as of February 29, 2016. The Company could have borrowed up to an additional $908 million under the Revolving Loan as of March 31, 2016.
(2)
The CDW UK Credit Facility is a multi-currency revolving credit facility, expiring on July 17, 2017, under which CDW UK is permitted to borrow an aggregate amount of £50.0 million ($72 million).     
Debt Covenants
As of March 31, 2016, the Company remained in compliance with the covenants under its various credit agreements, the most restrictive of which is under the credit agreement governing the Senior Secured Term Loan Facility ("Term Loan"). Under the Term Loan, there are restrictions on the ability of CDW to pay dividends, make share repurchases, redeem subordinated debt and engage in certain other transactions. As of March 31, 2016, the amount of CDW’s restricted payment capacity under the Term Loan was $680 million. However, the Company is separately permitted to make restricted payments, so long as the total net leverage ratio is less than 3.25 on a pro forma basis. The total net leverage ratio was 2.8 as of March 31, 2016.
Fair Value
The fair values of the 2022, 2023 and 2024 Senior Notes were estimated using quoted market prices for identical assets or liabilities that are traded in over-the-counter secondary markets that are not considered active. The fair value of the Term Loan was estimated using dealer quotes for identical assets or liabilities in markets that are not considered active. Consequently, the Company's long-term debt is classified as Level 2 within the fair value hierarchy. The fair value of the CDW UK Term Loan was estimated using a discounted cash flow analysis based on current incremental borrowing rates for similar arrangements. 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:
(in millions)
 
March 31, 2016
 
December 31,
2015
Fair value
 
$
3,338.2

 
$
3,330.4

Carrying value
 
3,277.6

 
3,286.5



13

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Interest Rate Cap Agreements
In order to manage the risk associated with changes in interest rates on borrowings under the Term Loan, the Company maintains interest rate cap agreements. As of March 31, 2016 the interest rate cap agreements had a combined notional amount of $1,400 million and are effective from January 14, 2015 through January 14, 2017. Under these agreements, the Company has the right to receive payments equal to the amount, if any, by which the three-month LIBOR exceeds 2.0% during the agreement period. The fair value of the Company's interest rate cap agreements was less than $1 million as of March 31, 2016 and December 31, 2015.
6.
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,
(in millions)
2016
 
2015
Basic weighted-average shares outstanding
167.3

 
172.1

Effect of dilutive securities(1)
1.6

 
1.4

Diluted weighted-average shares outstanding(2)
168.9

 
173.5

(1)
The dilutive effect of outstanding stock options, restricted stock units, restricted stock and Coworker Stock Purchase Plan units is reflected in the diluted weighted-average shares outstanding using the treasury stock method.

(2)
There were less than 1 million potential common shares excluded from diluted weighted-average shares outstanding for the three months ended March 31, 2016 and 2015 as their inclusion would have had an anti-dilutive effect.
7.
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.
On October 29, 2015, the Company received a request for production of documents in connection with an investigation by the SEC of the Company’s vendor partner program incentives. The Company has produced documents to the SEC and is continuing to cooperate with the SEC in this matter.
As of March 31, 2016, 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 financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.
8.
Segment Information
The Company has two reportable segments: Corporate, which is comprised primarily of private sector business customers 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 Canada and CDW UK, both of which do not meet the reportable segment quantitative thresholds and, accordingly, are included in an all other category (“Other”). Effective January 1, 2016, CDW Advanced Services is no longer an operating segment. Its results have been allocated to the Corporate and

14

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Public segments to align the Company's financial reporting with the manner in which the Chief Operating Decision Maker assesses performance and makes resource allocation decisions. Segment information reported in prior periods has been reclassified to conform to the current period presentation.
Information about the Company’s segments for the three months ended March 31, 2016 and 2015 is as follows:
(in millions)

Corporate

Public

Other

Headquarters

Total
Three Months Ended March 31, 2016:










Net sales

$
1,692.3


$
1,069.4


$
355.0


$


$
3,116.7

Income (loss) from operations(1)

118.2


58.5


8.1


(23.8
)

161.0

Depreciation and amortization expense

(25.9
)

(11.2
)

(8.7
)

(18.2
)

(64.0
)











Three Months Ended March 31, 2015:










Net sales

$
1,610.4


$
1,017.2


$
127.6


$


$
2,755.2

Income (loss) from operations(1)

118.6


55.4


4.9


(27.3
)

151.6

Depreciation and amortization expense

(25.7
)

(11.1
)

(0.4
)

(15.3
)

(52.5
)
(1)
Certain costs related to technology specialists have been reclassified between our Corporate and Public segments. Prior periods have been reclassified to conform to the current period presentation.


15

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


9.
Supplemental Guarantor Information
The 2022 Senior Notes, the 2023 Senior Notes and the 2024 Senior Notes are, and, prior to being redeemed in full, the 2019 Senior Notes were guaranteed by Parent and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries (the “Guarantor Subsidiaries”). All guarantees by Parent and the Guarantor Subsidiaries are and were joint and several, and full and unconditional; provided that guarantees by the Guarantor Subsidiaries (i) are subject to certain customary release provisions contained in the indentures governing the 2022 Senior Notes, the 2023 Senior Notes and the 2024 Senior Notes and (ii) were subject to certain customary release provisions contained in the indentures governing the 2019 Senior Notes until such indentures were satisfied and discharged in the first quarter of 2015. CDW LLC's 100% owned foreign subsidiaries, CDW International Holdings Limited, which is comprised of CDW UK and Canada, (together the “Non-Guarantor Subsidiaries”) do not guarantee the debt obligations. CDW LLC and CDW Finance Corporation, as co-issuers, are 100% owned by Parent and each of the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries are, directly or indirectly, 100% owned by CDW LLC.
The following tables set forth condensed Consolidating Balance Sheets as of March 31, 2016 and December 31, 2015, Consolidating Statements of Operations for the three months ended March 31, 2016 and 2015, condensed Consolidating Statements of Comprehensive Income for the three months ended March 31, 2016 and 2015 and condensed Consolidating Statements of Cash Flows for the three months ended March 31, 2016 and 2015, in accordance with Rule 3-10 of Regulation S-X. The consolidating financial information includes the accounts of CDW Corporation (the “Parent Guarantor”), which has no independent assets or operations, the accounts of CDW LLC (the “Subsidiary Issuer”), the combined accounts of the Guarantor Subsidiaries, the accounts of the Non-Guarantor Subsidiaries, and the accounts of CDW Finance Corporation (the “Co-Issuer”) for the periods indicated. The information was prepared on the same basis as the Consolidated Financial Statements.

16

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


 
Condensed Consolidating Balance Sheet
March 31, 2016
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
185.4

 
$

 
$
82.6

 
$

 
$
(19.8
)
 
$
248.2

Accounts receivable, net

 

 
1,529.0

 
251.2

 

 

 
1,780.2

Merchandise inventory

 

 
393.1

 
67.3

 

 

 
460.4

Miscellaneous receivables

 
77.7

 
111.9

 
23.1

 

 

 
212.7

Prepaid expenses and other

 
16.6

 
61.4

 
36.8

 

 

 
114.8

Total current assets

 
279.7

 
2,095.4

 
461.0

 

 
(19.8
)
 
2,816.3

Property and equipment, net

 
106.1

 
51.5

 
10.8

 

 

 
168.4

Goodwill

 
751.8

 
1,439.0

 
304.4

 

 

 
2,495.2

Other intangible assets, net

 
303.7

 
670.2

 
251.5

 

 

 
1,225.4

Other assets
3.6

 
23.1

 
263.2

 
3.4

 

 
(280.7
)
 
12.6

Investment in and advances to subsidiaries
1,036.3

 
3,120.4

 

 

 

 
(4,156.7
)
 

Total assets
$
1,039.9

 
$
4,584.8

 
$
4,519.3

 
$
1,031.1

 
$

 
$
(4,457.2
)
 
$
6,717.9

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable—trade
$

 
$
24.9

 
$
774.6

 
$
178.9

 
$

 
$
(19.8
)
 
$
958.6

Accounts payable—inventory financing

 

 
355.6

 
17.5

 

 
(0.2
)
 
372.9

Current maturities of
long-term debt

 
15.4

 

 
11.5

 

 

 
26.9

Deferred revenue

 

 
90.9

 
75.4

 

 

 
166.3

Accrued expenses

 
184.8

 
187.5

 
47.0

 

 
(0.6
)
 
418.7

Total current liabilities

 
225.1

 
1,408.6

 
330.3

 

 
(20.6
)
 
1,943.4

Long-term liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt

 
3,153.7

 

 
71.3

 

 

 
3,225.0

Deferred income taxes

 
116.5

 
255.3

 
80.3

 

 
(3.6
)
 
448.5

Other liabilities

 
53.2

 
3.4

 
280.6

 

 
(276.1
)
 
61.1

Total long-term liabilities

 
3,323.4

 
258.7

 
432.2

 

 
(279.7
)
 
3,734.6

Total stockholders’ equity
1,039.9

 
1,036.3

 
2,852.0

 
268.6

 

 
(4,156.9
)
 
1,039.9

Total liabilities and stockholders’ equity
$
1,039.9

 
$
4,584.8

 
$
4,519.3

 
$
1,031.1

 
$

 
$
(4,457.2
)
 
$
6,717.9




17

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Condensed Consolidating Balance Sheet
December 31, 2015
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
45.1

 
$

 
$
31.9

 
$

 
$
(39.4
)
 
$
37.6

Accounts receivable, net

 

 
1,788.6

 
228.8

 

 

 
2,017.4

Merchandise inventory

 

 
340.3

 
52.8

 

 

 
393.1

Miscellaneous receivables

 
83.7

 
90.1

 
24.6

 

 

 
198.4

Prepaid expenses and other

 
13.0

 
50.4

 
84.0

 

 
(3.1
)
 
144.3

Total current assets

 
141.8

 
2,269.4

 
422.1

 

 
(42.5
)
 
2,790.8

Property and equipment, net

 
110.0

 
54.1

 
11.3

 

 

 
175.4

Goodwill

 
751.8

 
1,439.0

 
309.6

 

 

 
2,500.4

Other intangible assets, net

 
306.0

 
704.9

 
265.5

 

 

 
1,276.4

Other assets
3.8

 
17.3

 
263.0

 
3.0

 

 
(274.8
)
 
12.3

Investment in and advances to subsidiaries
1,092.1

 
3,302.0

 

 

 

 
(4,394.1
)
 

Total assets
$
1,095.9

 
$
4,628.9

 
$
4,730.4

 
$
1,011.5

 
$

 
$
(4,711.4
)
 
$
6,755.3

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable-trade
$

 
$
31.0

 
$
727.4

 
$
147.5

 
$

 
$
(39.4
)
 
$
866.5

Accounts payable-inventory financing

 

 
428.4

 
11.4

 

 
(0.2
)
 
439.6

Current maturities of long-term debt

 
15.4

 

 
11.8

 

 

 
27.2

Deferred revenue

 

 
77.4

 
74.5

 

 

 
151.9

Accrued expenses

 
156.0

 
190.9

 
58.6

 

 
(3.4
)
 
402.1

Total current liabilities

 
202.4

 
1,424.1

 
303.8

 

 
(43.0
)
 
1,887.3

Long-term liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt

 
3,156.5

 

 
76.0

 

 

 
3,232.5

Deferred income taxes

 
117.3

 
272.8

 
83.4

 

 
(3.9
)
 
469.6

Other liabilities

 
60.7

 
2.9

 
276.8

 

 
(270.4
)
 
70.0

Total long-term liabilities

 
3,334.5

 
275.7

 
436.2

 

 
(274.3
)
 
3,772.1

Total stockholders’ equity
1,095.9

 
1,092.0

 
3,030.6

 
271.5

 

 
(4,394.1
)
 
1,095.9

Total liabilities and stockholders’ equity
$
1,095.9

 
$
4,628.9

 
$
4,730.4

 
$
1,011.5

 
$

 
$
(4,711.4
)
 
$
6,755.3





18

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Consolidating Statement of Operations
Three Months Ended March 31, 2016
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Net sales
$

 
$

 
$
2,761.7

 
$
355.0

 
$

 
$

 
$
3,116.7

Cost of sales

 

 
2,291.4

 
300.8

 

 

 
2,592.2

Gross profit

 

 
470.3

 
54.2

 

 

 
524.5

Selling and administrative expenses

 
23.6

 
260.7

 
45.0

 

 

 
329.3

Advertising expense

 

 
33.0

 
1.2

 

 

 
34.2

Income (loss) from operations

 
(23.6
)
 
176.6

 
8.0

 

 

 
161.0

Interest (expense) income, net

 
(37.5
)
 
1.4

 
(2.0
)
 

 

 
(38.1
)
Other income (expense), net

 

 
0.6

 
0.4

 

 

 
1.0

Income (loss) before income taxes

 
(61.1
)
 
178.6

 
6.4

 

 

 
123.9

Income tax benefit (expense)

 
23.4

 
(67.6
)
 
(1.9
)
 

 

 
(46.1
)
Income (loss) before equity in earnings of subsidiaries

 
(37.7
)
 
111.0

 
4.5

 

 

 
77.8

Equity in earnings of subsidiaries
77.8

 
115.5

 

 

 

 
(193.3
)
 

Net income
$
77.8

 
$
77.8

 
$
111.0

 
$
4.5

 
$

 
$
(193.3
)
 
$
77.8






19

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Consolidating Statement of Operations
Three Months Ended March 31, 2015 (1)
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Net sales
$

 
$

 
$
2,627.6

 
$
127.6

 
$

 
$

 
$
2,755.2

Cost of sales

 

 
2,186.4

 
112.3

 

 

 
2,298.7

Gross profit

 

 
441.2

 
15.3

 

 

 
456.5

Selling and administrative expenses

 
27.3

 
238.5

 
9.7

 

 

 
275.5

Advertising expense

 

 
28.7

 
0.7

 

 

 
29.4

Income (loss) from operations

 
(27.3
)
 
174.0

 
4.9

 

 

 
151.6

Interest (expense) income, net

 
(44.9
)
 

 
0.1

 

 

 
(44.8
)
Net loss on extinguishments of long-term debt

 
(24.3
)
 

 

 

 

 
(24.3
)
Other income (expense), net

 
4.1

 
0.7

 
(0.3
)
 

 

 
4.5

Income (loss) before income taxes

 
(92.4
)
 
174.7

 
4.7

 

 

 
87.0

Income tax benefit (expense)

 
34.8

 
(65.8
)
 
(1.3
)
 

 

 
(32.3
)
Income (loss) before equity in earnings of subsidiaries

 
(57.6
)
 
108.9

 
3.4

 

 

 
54.7

Equity in earnings of subsidiaries
54.7

 
112.3

 

 

 

 
(167.0
)
 

Net income
$
54.7

 
$
54.7

 
$
108.9

 
$
3.4

 
$

 
$
(167.0
)
 
$
54.7

(1)    Certain amounts have been reclassified to conform to the current period presentation.

















20

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2016
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Comprehensive income
$
70.0

 
$
70.0

 
$
111.0

 
$
(3.3
)
 
$

 
$
(177.7
)
 
$
70.0


Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2015
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiary
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Comprehensive income
$
43.7

 
$
43.7

 
$
108.9

 
$
(7.6
)
 
$

 
$
(145.0
)
 
$
43.7

























21

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2016
(in millions)
Parent
Guarantor
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Co-Issuer
 
Consolidating
Adjustments
 
Consolidated
Net cash (used in) provided by operating activities
$

 
$
(17.0
)
 
$
377.9

 
$
42.1

 
$

 
$
24.6

 
$
427.6

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures

 
(9.9
)
 
(0.5
)
 
(0.6
)
 

 

 
(11.0
)
Net cash used in investing activities

 
(9.9
)
 
(0.5
)
 
(0.6
)
 

 

 
(11.0
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from borrowings under revolving credit facility

 
63.4

 

 

 

 

 
63.4

Repayments of borrowings under revolving credit facility

 
(63.4
)
 

 

 

 

 
(63.4
)
Repayments of long-term debt

 
(3.9
)
 

 
(2.8
)
 

 

 
(6.7
)
Net change in accounts payable-inventory financing

 

 
(72.9
)
 
6.4

 

 

 
(66.5
)
Proceeds from stock option exercises

 
1.2