CDW 2012 Annual Report Download - page 36

Table of Contents
items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a
non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows 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 GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms
are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating
performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements.
Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit
agreements. See “Selected Financial Data” included elsewhere in this report for a reconciliation of EBITDA to cash flows from operating
activities.
Seasonality
While we have not historically experienced significant seasonality throughout the year, sales in our Corporate segment, which primarily
serves business customers, are typically higher in the fourth quarter than in other quarters due to customers spending their remaining technology
budget dollars at the end of the year. Additionally, sales in our Public segment have historically been higher in the third quarter than in other
quarters primarily due to the buying patterns of the federal government and education customers.
Liquidity and Capital Resources
Overview
We finance our operations and capital expenditures through a combination of internally generated cash from operations and from
borrowings under our senior secured asset-based revolving credit facility. We believe that our current sources of funds will be sufficient to fund
our cash operating requirements for the next year. In addition, we believe that, in spite of the uncertainty of future macroeconomic conditions,
we have adequate sources of liquidity and funding available to meet our longer-term needs. However, there are a number of factors that may
negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the
successful execution of our business plan and general economic conditions.
32
(in millions) Years Ended December 31,
2011
2010
Net income (loss)
$
17.1
$
(29.2
)
Depreciation and amortization
204.9
209.4
Income tax expense (benefit)
11.2
(7.8
)
Interest expense, net
324.2
391.9
EBITDA
557.4
564.3
Adjustments:
Non-cash equity-based compensation
19.5
11.5
Sponsor fee
5.0
5.0
Consulting and debt-related professional fees
5.1
15.1
Net loss (gain) on extinguishments of long-term debt
118.9
(2.0
)
Other adjustments
(1)
11.4
7.9
Total adjustments
159.9
37.5
Adjusted EBITDA
$
717.3
$
601.8
(1)
Other adjustments include certain retention costs and equity investment income.