CDW 2015 Annual Report Download - page 79

Table of Contents
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
market-based inputs, including LIBOR curves and implied volatilities. The Company also incorporates insignificant credit valuation adjustments to appropriately
reflect the respective counterparty’s nonperformance risk in the fair value measurements. The counterparty credit spreads are based on publicly available credit
information obtained from a third party credit data provider.
CDW LLC is the borrower under the Term Loan. All obligations under the Term Loan are guaranteed by Parent and each of CDW LLC’s direct and indirect, 100%
owned, domestic subsidiaries. The Term Loan is collateralized by a second priority interest in substantially all inventory (excluding inventory collateralized under
the inventory floorplan arrangements as described in Note 6 (Inventory Financing Agreements) deposits, and accounts receivable, and by a first priority interest in
substantially all other assets. The Term Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and
each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay
other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or
consolidations or engage in certain transactions with affiliates.
8.5% Senior Notes due 2019 (“2019 Senior Notes”)
At December 31, 2015 , there were no outstanding 2019 Senior Notes.
On March 3, 2015, the proceeds from the issuance of the 2023 Senior Notes, discussed below, along with cash on hand, were deposited with the trustee to redeem
the remaining $503.9 million aggregate principal amount of the 2019 Senior Notes at a redemption price of 104.25% of the principal amount redeemed, plus
accrued and unpaid interest up to, but not including, the date of redemption, April 2, 2015. On the same date, the indenture governing the 2019 Senior Notes was
satisfied and discharged and the Company was released from its remaining obligation by the trustee. In connection with this redemption, the Company recorded a
loss on extinguishment of long-term debt of $24.3 million in the Consolidated Statement of Operations for the year ended December 31, 2015 , which was
comprised of $4.2 million for the write-off of the remaining unamortized deferred financing fees and a redemption premium of $21.4 million , partially offset by
$1.3 million for the write-off of the remaining unamortized premium.
On December 1, 2014, the proceeds from the issuance of the 2024 Senior Notes discussed below, along with cash on hand, were deposited with the trustee to
redeem $541.4 million aggregate principal amount of the 2019 Senior Notes at a redemption price of 106.202% of the principal amount redeemed, plus accrued and
unpaid interest through the date of redemption. The redemption date was December 31, 2014. In connection with this redemption, the Company recorded a loss on
extinguishment of long-term debt of $36.9 million in the Consolidated Statement of Operations for the year ended December 31, 2014, which was comprised of
$4.7 million for the write-off of a portion of the unamortized deferred financing fees, a redemption premium of $23.0 million , and a make-whole interest payment
of $10.6 million , partially offset by $1.4 million for the write-off of a portion of the unamortized premium.
On August 5, 2014, the proceeds from the issuance of the 2022 Senior Notes discussed below, along with cash on hand, were deposited with the trustee to redeem
$234.7 million aggregate principal amount of the 2019 Senior Notes at a redemption price of 108.764% of the principal amount redeemed, plus accrued and unpaid
interest through the date of redemption. The redemption date was September 5, 2014. In connection with this redemption, the Company recorded a loss on
extinguishment of long-term debt of $22.1 million in the Consolidated Statement of Operations for the year ended December 31, 2014, which was comprised of
$2.2 million for the write-off of a portion of the unamortized deferred financing fees, a redemption premium of $10.0 million , and a make-whole interest payment
of $10.6 million , partially offset by $0.7 million for the write-off of a portion of the unamortized premium.
On March 20, 2014, the Company repurchased and subsequently canceled $25.0 million aggregate principal amount of the 2019 Senior Notes from an affiliate of
Providence Equity in a privately negotiated transaction on an arms’ length basis at a price of 109.75% of the principal amount. Cash on hand was used to fund the
repurchase of $25.0 million aggregate principal amount, $2.4 million of repurchase premium and $1.0 million in accrued and unpaid interest to the date of
repurchase. In connection with this repurchase, the Company recorded a loss on extinguishment of long-term debt of $2.7 million in the Consolidated Statement of
Operations for the year ended December 31, 2014. This loss represented $2.4 million in repurchase premium and $0.3 million for the write-off of a portion of the
unamortized deferred financing costs related to the 2019 Senior Notes.
6.0% Senior Notes due 2022 (“2022 Senior Notes”)
At December 31, 2015 , the outstanding principal amount of the 2022 Senior Notes was $600.0 million .
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