What the changes say
- Leverage disclosures are consolidated and updated to $5.6 billion debt, $353 million inventory financing, and $1.9 billion revolver availability.
- Competition now emphasizes price pressure, nontraditional entrants, and competitors bidding for acquisitions.
- CDW plans broader AI investment across operations while supply-chain language adds labor disruptions and removes COVID-specific examples.
- Several financing-specific risks were folded into the broader indebtedness risk or removed.
What changed since the prior 10-K
New
- NewBusiness and Operational Risks
comprehensive technology solutions to customers. If we are unable to effectively respond to the evolving competitive landscape, or respond in a manner that is less effective than that of our competitors, our business, results of operations, or cash flows could be adversely impacted
Competition may force CDW to cut prices, increase advertising, or sell more products to preserve net sales and gross profit.
- NewRisks Related to Our Indebtedness
Our level of indebtedness and obligations pursuant to the agreements and instruments reflecting our indebtedness could adversely affect our business, results of operations, and cash flows
Higher leverage—$5.6 billion debt and $353 million inventory-financing obligations—could constrain cash, borrowing, covenants, ratings, and business flexibility.
Dropped
- DroppedMacroeconomic and Industry Risks
other 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
- DroppedRisks Related to Our Indebtedness
Our level of indebtedness could adversely affect our business
- DroppedRisks Related to Our Indebtedness
Restrictive covenants under our senior credit facilities and, to a lesser degree, our indentures may adversely affect our operations and liquidity
- DroppedRisks Related to Our Indebtedness
The acceleration of amounts outstanding under our senior credit facilities would likely trigger an event of default under our existing indentures
- DroppedRisks Related to Our Indebtedness
Failure to maintain the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital
- DroppedRisks Related to Our Indebtedness
We and our subsidiaries may be able to incur substantially more debt, including secured debt. This could further increase the risks associated with our leverage
- DroppedRisks Related to Our Indebtedness
Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly
- DroppedRisks Related to Ownership of Our Common Stock
Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that may be considered favorable
- DroppedRisks Related to Ownership of Our Common Stock
There 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
- DroppedRisks Related to Ownership of Our Common Stock
We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations
Reworded
- 79% rewrittenMacroeconomic and Industry Risks
The interruption of the flow of products from suppliers could disrupt our supply chain
The supply-chain risk removes the specific COVID-19 example while retaining manufacturers’ financial problems, labor disputes, disasters, conflict, and pandemics.
- 61% rewrittenBusiness and Operational Risks
Substantial competition could reduce our market share and significantly harm our financial performance
The risk shifts from investing to keep pace with emerging technologies toward nontraditional entrants and competitors bidding for acquisitions.
- 59% rewrittenRisks Related to Ownership of Our Common Stock
Our 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
The stock risk now expressly covers volatile trading volumes in addition to volatile prices and resale losses.
- 42% rewrittenBusiness and Operational Risks
Issues relating to the use or capabilities of AI, including social, ethical, and safety issues, in hardware, software, and services offerings may result in reputational harm, liability, or increased costs
CDW now highlights AI interactions with coworkers, customers, and vendors and plans further investment to embed AI across operations.
Was: Issues 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
- 34% rewrittenBusiness and Operational Risks
Increases in the cost of commercial delivery services or disruptions of those services could materially adversely impact our business
The risk removes named FedEx and UPS references, adds transportation costs, and drops the COVID-specific delivery-demand example.
- 26% rewrittenMacroeconomic and Industry Risks
Global and regional economic and political conditions may have an adverse impact on our business
Significant labor disputes were added to the political, geopolitical, natural-disaster, and other disruption scenarios.
- 25% rewrittenMacroeconomic and Industry Risks
Decreases 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
No substantive change; the risk still centers on customer and government decisions to defer technology spending.
- 24% rewrittenBusiness and Operational Risks
The success of our business depends on the continuing development, maintenance, and operation of our information technology systems
The risk adds dependence on cloud enterprise applications’ availability, reliability, and integration for critical business functions.
- 21% rewrittenBusiness and Operational Risks
Our 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
- 21% rewrittenBusiness and Operational Risks
Our future operating results may fluctuate significantly due to the volatility and rapidly changing state of the technology industry, which may result in volatility in the market price of our stock and could impact our ability to operate our business effectively
Was: Our 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
- 20% rewrittenBusiness and Operational Risks
A natural disaster or other adverse occurrence at one of our primary facilities or a third-party provider location could damage our business
All 25 risk factors
Headings as the filing states them, in filing order.
Business and Operational Risks
- 01Our business depends on our vendor partner and wholesale distributor relationships and the terms of the agreements governing those relationships
- 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 providers21% rewritten
- 03Issues relating to the use or capabilities of AI, including social, ethical, and safety issues, in hardware, software, and services offerings may result in reputational harm, liability, or increased costs42% rewritten
- 04Substantial competition could reduce our market share and significantly harm our financial performance61% rewritten
- 05comprehensive technology solutions to customers. If we are unable to effectively respond to the evolving competitive landscape, or respond in a manner that is less effective than that of our competitors, our business, results of operations, or cash flows could be adversely impactedNew
- 06The success of our business depends on the continuing development, maintenance, and operation of our information technology systems24% rewritten
- 07Breaches of data security and the failure to protect our information technology systems from cybersecurity threats could adversely impact our business
- 08If 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
- 09If 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
- 10We 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
- 11A natural disaster or other adverse occurrence at one of our primary facilities or a third-party provider location could damage our business20% rewritten
- 12Increases in the cost of commercial delivery services or disruptions of those services could materially adversely impact our business34% rewritten
- 13We are exposed to accounts receivable and inventory risks
- 14We could be exposed to additional costs and risks if we continue to make strategic investments or acquisitions or enter into joint ventures or alliances
- 15Our future operating results may fluctuate significantly due to the volatility and rapidly changing state of the technology industry, which may result in volatility in the market price of our stock and could impact our ability to operate our business effectively21% rewritten
- 16Fluctuations in foreign currency have an effect on our reported results of operations
Macroeconomic and Industry Risks
- 17Global and regional economic and political conditions may have an adverse impact on our business26% rewritten
- 18Decreases 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 business25% rewritten
- 19The interruption of the flow of products from suppliers could disrupt our supply chain79% rewritten
Legal and Regulatory Risks
- 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
- 21We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, employment, tort, and other litigation
- 22We also are subject to audits by various partners, GPOs, and customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts
- 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
- 24Our level of indebtedness and obligations pursuant to the agreements and instruments reflecting our indebtedness could adversely affect our business, results of operations, and cash flowsNew
Risks Related to Ownership of Our Common Stock
- 25Our 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 investment59% rewritten
Other CDW 10-Ks
- FY2024 10-K risk factors33 risks
CDW faces substantial leverage with $5.8 billion in total debt and $355 million in inventory financing obligations. Vendor partnerships with OEMs and wholesale distributors are critical for product sourcing and direct marketing authorization. Public sector contracts expose the company to complex government regulations, funding policies, and compliance risks.
Filed Feb 21, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.