CDW (CDW) risk factors, FY2024 10-K

Business and Operational Risks

1. 01Our business depends on our vendor partner and wholesale distributor relationships and the terms of the agreements governing those relationships
2. 02Our sales are dependent on continued innovations in technology by our vendor partners and the competitiveness of their offerings, and our ability to partner with new and emerging technology providers
3. 03Issues relating to the use or capabilities of artificial intelligence, including social, ethical and safety issues, in hardware, software and services offerings may result in reputational harm, liability or increased costs
4. 04Substantial competition could reduce our market share and significantly harm our financial performance
5. 05The success of our business depends on the continuing development, maintenance and operation of our information technology systems
6. 06Breaches of data security and the failure to protect our information technology systems from cybersecurity threats could adversely impact our business
7. 07If we or our third-party service providers fail to provide high-quality services to our customers, our reputation, brand, business, results of operations or cash flows could be adversely affected
8. 08If we lose any of our key personnel, are unable to attract and retain the talent required for our business, our labor costs significantly increase or our approach to workforce management is ineffective, our business could be disrupted and our financial performance could suffer
9. 09We have outsourced certain business processes to third-party outsource partners and any service failures or disruptions related to these outsourcing arrangements could adversely affect our business
10. 10A natural disaster or other adverse occurrence at one of our primary facilities or a third-party provider location could damage our business
11. 11Increases in the cost of commercial delivery services or disruptions of those services could materially adversely impact our business
12. 12We are exposed to accounts receivable and inventory risks
13. 13We could be exposed to additional risks if we continue to make strategic investments or acquisitions or enter into alliances
14. 14Our future operating results may fluctuate significantly, which may result in volatility in the market price of our stock and could impact our ability to operate our business effectively
15. 15Fluctuations in foreign currency have an effect on our reported results of operations

Macroeconomic and Industry Risks

1. 16Global and regional economic and political conditions may have an adverse impact on our business
2. 17Decreases or delays in spending on technology products and services by our customers due to, among other things, customer spending decisions and government spending and funding policies may have an adverse impact on our business
3. 18The interruption of the flow of products from suppliers could disrupt our supply chain
4. 19other reasons. Additionally, the relocation of key distributors utilized in our purchasing model could increase our need for, and the cost of, working capital and have an adverse effect on our business, results of operations or cash flows

Legal and Regulatory Risks

1. 20The failure to comply with our public sector contracts or applicable laws and regulations could result in, among other things, termination, fines or other liabilities, and changes in procurement regulations could adversely impact our business, results of operations or cash flows
2. 21We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, employment, tort and other litigation
3. 22We also are subject to audits by various partners, group purchasing organizations and customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts
4. 23Failure to comply with complex and evolving laws and regulations applicable to our operations or failure to meet stakeholder expectations on environmental sustainability and corporate responsibility matters could adversely affect our business, results of operations or cash flows

Risks Related to Our Indebtedness

1. 24Our level of indebtedness could adversely affect our business
2. 25Restrictive covenants under our senior credit facilities and, to a lesser degree, our indentures may adversely affect our operations and liquidity
3. 26The acceleration of amounts outstanding under our senior credit facilities would likely trigger an event of default under our existing indentures
4. 27Failure to maintain the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital
5. 28We and our subsidiaries may be able to incur substantially more debt, including secured debt. This could further increase the risks associated with our leverage
6. 29Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly

Risks Related to Ownership of Our Common Stock

1. 30Our common stock price may be volatile and may decline regardless of our operating performance, and holders of our common stock could lose a significant portion of their investment
2. 31Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that may be considered favorable
3. 32There can be no assurance that we will continue to pay dividends on our common stock or repurchase any of our common stock under our share repurchase program
4. 33We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations