(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.

~~Indicate by check mark whether~~Indicate by check mark whether the ~~registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required~~registrant has submitted electronically every Interactive Data File required to be ~~submitted and posted pursuant~~submitted pursuant to ~~Rule~~Rule 405 of ~~RegulationS-T~~R (§ egulation S-T (§232.405 of this ~~chapter) during the preceding~~chapter) during the preceding 12 months ~~(or for such shorter period that~~(or for such shorter period that the ~~registrant was required~~ registrant was required to submit ~~and post such files)~~such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).

The number of shares outstanding of the issuer’s common stock as of April ~~27, 2018~~26, 2019 was ~~35,436,195.~~35,762,268.

References to “the Company,” “Insight,” “we,” “us,” “our” and other similar words refer to Insight Enterprises, Inc. and its consolidated subsidiaries, unless the context suggests otherwise. Certain statements in this Quarterly Report on Form10-Q, including statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this report, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include: expectations regarding net sales, gross profit, gross margin, operating expenses, earnings from operations,non-operating income and expenses, net earnings ~~and~~or cash flows, cash ~~uses~~needs and ~~needs,~~ the payment of accrued expenses and ~~liabilities, the timing of the inventory shipments;~~liabilities; the expected effects of seasonality on our business; expectations of further consolidation in the Information Technology (“IT”) industry; our intentions concerning the payment of dividends; our acquisition strategy; projections of capital expenditures; the sufficiency of our capital resources, the availability of financing and our needs and plans relating thereto; the estimated effect of new accounting principles and expected dates of adoption; ~~expected tax changes;~~ the effect of indemnification obligations; projections about the outcome of ongoing tax audits; expectations regarding future employee termination benefits; estimates regarding future asset-retirement activities; adequate provisions for and our positions and strategies with respect to ongoing and threatened litigation; our expectations regarding the use of cash flow from operations for working capital, to pay down debt, repurchase shares of our common stock, make capital expenditures and fund acquisitions; our expectations regarding stock-based compensation and future income tax expense; our compliance with leverage ratio requirements; our exposure tooff-balance sheet arrangements; statements of belief; and statements of assumptions underlying any of the foregoing. Forward-looking statements are identified by such words as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “may” and variations of such words and similar expressions and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. There can be no assurances that results described in forward-looking statements will be achieved, and actual results could differ materially from those suggested by the forward-looking statements. Some of the important factors that could cause our actual results to differ materially from those projected in any forward-looking statements include, but are not limited to, the following, which are discussed in “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form10-K for the year ended December 31, ~~2017:~~2018:

our reliance on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can change significantly in the amounts made available and the requirements year over year;

changes in the IT industry and/or rapid changes in technology;

risks associated with the integration and operation of acquired businesses;

possible significant fluctuations in our future operating results;

the risks associated with our international operations;

general economic conditions;

increased debt and interest expense and decreased availability of funds under our financing facilities;

the security of our electronic and other confidential ~~information;~~information;

disruptions in our IT systems and voice and data networks;

failure to comply with the terms and conditions of our commercial and public sector contracts;

legal proceedings ~~and~~ client audits and failure to comply with laws and regulations;

accounts receivable risks, including increased credit loss experience or extended payment terms with our clients;

our reliance on independent shipping companies;

our dependence on certain key personnel;

~~natural disasters or other adverse occurrences;~~

INSIGHT ENTERPRISES, INC.

•

natural disasters or other adverse occurrences;

exposure to changes in, interpretations of, or enforcement trends related to tax rules and regulations; and

~~intellectual~~intellectual property infringement claims and challenges to our registered trademarks and trade names.

Additionally, there may be other risks that are otherwise described from time to time in the reports that we file with the Securities and Exchange Commission. Any forward-looking statements in this report should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. We assume no obligation to update, and, except as may be required by law, do not intend to update, any forward-looking statements. We do not endorse any projections regarding future performance that may be made by third parties.

PART ~~I—FINANCIAL~~I - FINANCIAL INFORMATION

Item 1. Financial Statements.

INSIGHT ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)


	March 31, 2018			December 31, 2017			March 31, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	100,237		$	105,831		$	124,831		$	142,655
Accounts receivable, net of allowance for doubtful accounts of $10,101 and $10,158, respectively		1,751,321			1,814,560
Accounts receivable, net of allowance for doubtful accounts of $10,903 and $10,462, respectively								1,723,817			1,931,736
Inventories		194,743			194,529			187,146			148,503
Inventories not available for sale		645			36,956
Other current assets		119,404			152,467			117,199			115,683

Total current assets		2,166,350			2,304,343			2,152,993			2,338,577
Property and equipment, net of accumulated depreciation and amortization of $325,608 and $335,078, respectively		75,579			75,252
Property and equipment, net of accumulated depreciation and amortization of $273,379 and $331,700, respectively								74,038			72,954
Goodwill		131,403			131,431			166,073			166,841
Intangible assets, net of accumulated amortization of $40,949 and $37,357, respectively		97,158			100,778
Intangible assets, net of accumulated amortization of $56,255 and $52,942, respectively								108,856			112,179
Deferred income taxes		16,019			17,064			7,345			7,967
Other assets		85,902			56,783			247,162			77,429

	$	2,572,411		$	2,685,651
							$	2,756,467		$	2,775,947
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable—trade	$	882,782		$	899,075		$	897,609		$	978,104
Accounts payable—inventory financing facility		228,102			319,468			260,160			304,130
Accrued expenses and other current liabilities		175,147			175,860			183,678			190,733
Current portion of long-term debt		16,358			16,592			1,161			1,395
Deferred revenue		70,955			88,979			66,646			62,300

Total current liabilities		1,373,344			1,499,974			1,409,254			1,536,662
Long-term debt		245,569			296,576			113,227			195,525
Deferred income taxes		672			717			604			683
Other liabilities		72,225			44,915			207,164			56,088
								1,730,249			1,788,958
		1,691,810			1,842,182

Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 3,000 shares authorized; no shares issued		—			—			—			—
Common stock, $0.01 par value, 100,000 shares authorized; 35,848 shares at March 31, 2018 and 35,829 shares at December 31, 2017 issued and outstanding		358			358
Common stock, $0.01 par value, 100,000 shares authorized; 35,762 shares at March 31, 2019 and 35,482 shares at December 31, 2018 issued and outstanding								358			355
Additionalpaid-in capital		315,493			317,155			321,606			323,622
Retained earnings		584,423			550,220			743,992			704,665
Accumulated other comprehensive loss – foreign currency translation adjustments		(19,673	)		(24,264	)		(39,738	)		(41,653	)

Total stockholders’ equity		880,601			843,469			1,026,218			986,989
							$	2,756,467		$	2,775,947
	$	2,572,411		$	2,685,651

See accompanying notes to consolidated financial statements.

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

   Three Months Ended
March 31,
   2018 2017
Net sales:

Products
   $ 1,582,155 $ 1,321,969
Services
   180,748 155,574


Total net sales
   1,762,903 1,477,543


Costs of goods sold:

Products
   1,438,734 1,201,057
Services
   84,164 68,259


Total costs of goods sold
   1,522,898 1,269,316


Gross profit
   240,005 208,227
Operating expenses:

Selling and administrative expenses
   188,180 177,632
Severance and restructuring expenses
   1,644 4,695
Acquisition-related expenses
   —   2,947


Earnings from operations
   50,181 22,953
Non-operating (income) expense:

Interest income
   (153 ) (431 )
Interest expense
   6,015 3,933
Net foreign currency exchange (gain) loss
   (245 ) 380
Other expense, net
   302 315


Earnings before income taxes
   44,262 18,756
Income tax expense
   11,517 4,908


Net earnings
   $ 32,745 $ 13,848


Net earnings per share:

Basic
   $ 0.91 $ 0.39


Diluted
   $ 0.90 $ 0.38


Shares used in per share calculations:

Basic
   35,913 35,602


Diluted
   36,263 36,185

~~See accompanying notes to consolidated financial statements.~~

~~INSIGHT ENTERPRISES, INC.~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(in thousands)~~

~~(unaudited)~~

	Three Months Ended March 31,
	2019			2018
Net sales:
Products	$	1,466,672		$	1,557,792
Services		218,794			184,702
Total net sales		1,685,466			1,742,494
Costs of goods sold:
Products		1,337,308			1,414,986
Services		99,686			87,245
Total costs of goods sold		1,436,994			1,502,231
Gross profit		248,472			240,263
Operating expenses:
Selling and administrative expenses		191,063			188,180
Severance and restructuring expenses		370			1,644
Earnings from operations		57,039			50,439
Non-operating (income) expense:
Interest income		(271	)		(153	)
Interest expense		4,823			6,015
Net foreign currency exchange loss (gain)		711			(245	)
Other expense, net		339			302
Earnings before income taxes		51,437			44,520
Income tax expense		12,110			11,517
Net earnings	$	39,327		$	33,003
Net earnings per share:
Basic	$	1.10		$	0.92
Diluted	$	1.09		$	0.91
Shares used in per share calculations:
Basic		35,609			35,913
Diluted		36,103			36,263

   Three Months Ended
March 31,
   2018    2017
Net earnings
   $ 32,745    $ 13,848
Other comprehensive income (loss), net of tax: Foreign currency translation adjustments
   4,591    7,280




Total comprehensive income
   $ 37,336    $ 21,128

See accompanying notes to consolidated financial statements.

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~COMPREHENSIVE INCOME

(in thousands)

(unaudited)

   Three Months Ended March 31,
   2018 2017
Cash flows from operating activities:

Net earnings
   $ 32,745 $ 13,848
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

Depreciation and amortization of property and equipment
   5,433 6,830
Amortization of intangible assets
   3,611 4,223
Provision for losses on accounts receivable
   346 921
Write-downs of inventories
   629 392
Write-off of property and equipment
   303 —
Non-cash stock-based compensation
   3,184 3,412
Deferred income taxes
   979 (573 )
Changes in assets and liabilities, net of acquisitions and sale of foreign entity:

Decrease in accounts receivable
   188,138 182,710
Decrease (increase) in inventories
   4,444 (22,257 )
(Increase) decrease in other assets
   (28,517 ) 1,043
Decrease in accounts payable
   (97,104 ) (334,221 )
Increase in deferred revenue
   16,177 9,808
Increase (decrease) in accrued expenses and other liabilities
   20,377 (18,238 )


Net cash provided by (used in) operating activities
   150,745 (152,102 )


Cash flows from investing activities:

Purchases of property and equipment
   (5,044 ) (10,052 )
Acquisitions, net of cash and cash equivalents acquired
   —   (180,859 )


Net cash used in investing activities
   (5,044 ) (190,911 )


Cash flows from financing activities:

Borrowings on senior revolving credit facility
   276,684 169,109
Repayments on senior revolving credit facility
   (392,184 ) (169,109 )
Borrowings on accounts receivable securitization financing facility
   1,024,000 918,500
Repayments on accounts receivable securitization financing facility
   (955,000 ) (762,000 )
Borrowings under Term Loan A
   —   175,000
Repayments under Term Loan A
   (3,281 ) —
Repayments under other financing agreements
   (1,234 ) (3,419 )
Payments on capital lease obligations
   (288 ) (128 )
Net repayments under inventory financing facility
   (91,366 ) (4,172 )
Payment of debt issuance costs
   —   (1,123 )
Payment of payroll taxes on stock-based compensation through shares withheld
   (2,884 ) (4,526 )
Repurchases of common stock
   (7,679 ) —


Net cash (used in) provided by financing activities
   (153,232 ) 318,132


Foreign currency exchange effect on cash, cash equivalents and restricted cash balances
   1,937 5,820


Decrease in cash, cash equivalents and restricted cash
   (5,594 ) (19,061 )
Cash, cash equivalents and restricted cash at beginning of period
   107,445 205,946


Cash, cash equivalents and restricted cash at end of period
   $ 101,851 $ 186,885

	Three Months Ended March 31,
	2019		2018
Net earnings	$	39,327	$	33,003
Other comprehensive income, net of tax:
Foreign currency translation adjustments		1,915		4,591
Total comprehensive income	$	41,242	$	37,594

See accompanying notes to consolidated financial statements.

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

Common Stock

Treasury Stock

Additional
Paid-in

Accumulated
Other
Comprehensive

Retained

Total
Stockholders'

Shares

Par Value

Shares

Amount

Capital

Loss

Earnings

Equity

Balances at December 31, 2018

35,482

355

—

—

323,622

(41,653
)

704,665

986,989

Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes

279

3

—

—

(6,131
)

—

—

(6,128
)
Stock-based compensation expense

—

—

—

—

4,115

—

—

4,115

Foreign currency translation adjustments, net of tax

—

—

—

—

—

1,915

—

1,915

Net earnings

—

—

—

—

—

—

39,327

39,327

Balances at March 31, 2019

35,761

$
358

—

$
—

$
321,606

$
(39,738
)

$
743,992

$
1,026,218

Balances at December 31, 2017

35,829

358

—

—

317,155

(24,264
)

550,220

843,469

Cumulative effect of accounting change

—

—

—

—

—

—

7,176

7,176

Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes

240

2

—

—

(2,887
)

—

—

(2,885
)
Stock-based compensation expense

—

—

—

—

3,184

—

—

3,184

Repurchase of treasury stock

—

—

(221
)

(7,679
)

—

—

—

(7,679
)
Retirement of treasury stock

(221
)

(2
)

221

7,679

(1,959
)

—

(5,718
)

—

Foreign currency translation adjustments, net of tax

—

—

—

—

—

4,591

—

4,591

Net earnings

—

—

—

—

—

—

33,003

33,003

Balances at March 31, 2018

35,848

$
358

—

$
—

$
315,493

$
(19,673
)

$
584,681

$
880,859

See accompanying notes to consolidated financial statements.

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Three Months Ended
March 31,

2019

2018

Cash flows from operating activities:

Net earnings

$
39,327

$
33,003

Adjustments to reconcile net earnings to net cash provided by
   operating activities:

Depreciation and amortization of property and equipment

5,044

5,433

Amortization of intangible assets

3,823

3,611

Provision for losses on accounts receivable

1,413

346

Write-downs of inventories

1,408

629

Write-off of property and equipment

—

303

Non-cash stock-based compensation

4,115

3,184

Deferred income taxes

547

979

Changes in assets and liabilities:

Decrease in accounts receivable

210,691

184,877

(Increase) Decrease in inventories

(39,658
)

4,444

Increase in other assets

(107,314
)

(25,514
)
Decrease in accounts payable

(82,246
)

(97,104
)
Increase in deferred revenue

7,117

16,177

Increase in accrued expenses and other liabilities

77,646

20,377

Net cash provided by operating activities

121,913

150,745

Cash flows from investing activities:

Purchases of property and equipment

(5,352
)

(5,044
)
Acquisitions, net of cash and cash equivalents acquired

(762
)

—

Net cash used in investing activities

(6,114
)

(5,044
)
Cash flows from financing activities:

Borrowings on senior revolving credit facility

49,936

276,684

Repayments on senior revolving credit facility

(49,936
)

(392,184
)
Borrowings on accounts receivable securitization financing facility

1,010,500

1,024,000

Repayments on accounts receivable securitization financing facility

(1,092,500
)

(955,000
)
Repayments under Term Loan A

—

(3,281
)
Repayments under other financing agreements

—

(1,234
)
Payments on finance lease obligations

(542
)

(288
)
Net repayments under inventory financing facility

(43,970
)

(91,366
)
Payment of payroll taxes on stock-based compensation
   through shares withheld

(6,128
)

(2,884
)
Repurchases of common stock

—

(7,679
)
Net cash used in financing activities

(132,640
)

(153,232
)
Foreign currency exchange effect on cash, cash equivalents and
   restricted cash balances

(986
)

1,937

Decrease in cash, cash equivalents and restricted cash

(17,827
)

(5,594
)
Cash, cash equivalents and restricted cash at beginning of period

144,293

107,445

Cash, cash equivalents and restricted cash at end of period

$
126,466

$
101,851

See accompanying notes to consolidated financial statements.

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.	Basis of Presentation and Recently Issued Accounting Standards

We ~~are a Fortune 500 global IT provider helping businesses~~empower organizations of all sizes ~~– from small and medium sized firms to worldwide enterprises, governments, schools and health care organizations – define, architect, implement and manage~~with Insight Intelligent Technology Solutions^TM to maximize the business value of IT in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). ~~We empower our~~As a Fortune 500-ranked global provider of digital innovation, cloud/data center transformation, connected workforce, and supply chain optimization solutions and services, we help clients ~~to manage their IT environments so they can drive meaningful business outcomes today~~innovate and ~~transform~~optimize their operations ~~for tomorrow.~~to run smarter. Our company is organized in the following three operating segments, which are primarily defined by their related geographies:


Operating Segment		Geography
North America		United States and Canada
EMEA		Europe, Middle East and Africa
APAC		Asia-Pacific

Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services. Our offerings in the remainder of our EMEA and APAC segments ~~are~~consist of largely software and certain software-related services.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly our financial position as of March 31, ~~2018~~2019 and our results of operations for the three months ended March 31, 2019 and 2018 and cash flows for the three months ended March 31, ~~2018~~2019 and ~~2017.~~2018. The consolidated balance sheet as of December 31, ~~2017~~2018 was derived from the audited consolidated balance sheet at such date. The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with the rules and regulations promulgated by the Securities and Exchange Commission and consequently do not include all of the disclosures normally required by United States generally accepted accounting principles (“GAAP”).

The results of operations for interim periods are not necessarily indicative of results for the full year, due in part to the seasonal nature of our business. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the related notes thereto, in our Annual Report on Form10-K for the year ended December 31, ~~2017.~~2018. Our results of operations include the results of ~~Datalink Corporation~~Cardinal Solutions Group, Inc. (“~~Datalink”~~Cardinal”) from its acquisition date of ~~January 6, 2017 and Caase Group B.V. (referred to herein as, “Caase.com”) from its acquisition date of September 26, 2017.~~August 1, 2018.

The consolidated financial statements include the accounts of Insight Enterprises, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Additionally, these estimates and assumptions affect the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to sales recognition, anticipated achievement levels under partner funding programs, assumptions related to stock-based compensation valuation, allowances for doubtful accounts, valuation of inventories, litigation-related obligations, valuation allowances for deferred tax assets and impairment of long-lived assets, including purchased intangibles and goodwill, if indicators of potential impairment exist.

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Recently Issued Accounting Standards

~~Other than the adoption of~~Effective January 1, 2019, we adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Update (“ASU”)No. ~~2014-09,~~2016-02—Leases (Topic 842) ~~“Revenue from Contracts with Customers,” effective~~, as of January 1, ~~2018,~~2019, using the effective date transition method. This approach provides a method for recording existing leases at adoption without restating comparative periods. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. In addition, we made an accounting policy election not to separate non-lease components from lease components for all existing classes of underlying assets with the exception of land and buildings. We also made an accounting policy election to not record right of use (“ROU”) assets and lease liabilities for leases with an initial term of twelve months or less on our consolidated balance sheet.

Adoption of the new standard resulted in the recording of additional net operating lease ROU assets and lease liabilities of $65,922,000 and $70,512,000, respectively, as ~~discussed in Note 2, there~~of January 1, 2019. The difference between the additional lease assets and lease liabilities reflected existing accrued and prepaid rent balances that were reclassified to the operating lease ROU asset at January 1, 2019. The standard did not materially impact our consolidated net earnings and had no impact on cash flows.

There have been no other material changes in or additions to the recently issued accounting standards as previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report onForm 10-K for the year ended December 31, ~~2017~~2018 that affect or may affect our current financial statements.

Leases

We ~~adopted ASU~~lease office space, distribution centers, land, vehicles and equipment. Lease agreements with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

Certain lease agreements include one or more options to renew, with renewal terms that can extend the lease term from one to ~~No. 2016-18,~~five years ~~“Restricted Cash,” ASU~~or more. ~~No. 2016-15,~~ ~~“Classification~~The exercise of lease renewal options is at our sole discretion. Some agreements also include options to purchase the leased property. The estimated life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain ~~Cash Receipts~~of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Significant Accounting Policy

We determine if a contract or arrangement is, or contains a lease at inception. Balances related to operating leases are included in other assets, other current liabilities, and ~~Cash Payments,” and ASUNo. 2016-01,~~ “Financial Instruments Overview: Recognition and Measurement of Financial Assets and Financial Liabilities,” effective January 1, 2018. The adoption of these new standards did not have a material effect onother liabilities in our consolidated ~~financial statements.~~

~~As a result~~balance sheet. Balances related to financing leases are included in property and equipment, current portion of ~~the adoption of ASUNo. 2016-18,~~ ~~we began including amounts generally described as restricted cash or restricted cash equivalents with cash~~long-term debt, and ~~cash equivalents when reconciling thebeginning-of-period~~ ~~andend-of-period~~ ~~total amounts shown~~long-term debt in ~~the statement of cash flows~~our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the ~~three months ended March 31, 2018. Amounts shown in~~lease term and lease liabilities represent our obligation to make lease payments arising from the statement of cash flows for the three months ended March 31, 2017 were reclassified to conform to the current period presentation. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the statements of cash flows for the three months ended March 31, 2018 and 2017 (in thousands):lease.

   March 31,
2018    December 31,
2017
Cash and cash equivalents
   $ 100,237    $ 105,831
Restricted cash included in other current assets
   10    46
Restricted cash included in othernon-current assets
   1,604    1,568




Total cash, cash equivalents and restricted cash shown in the statement of cash flows
   $ 101,851    $ 107,445

   March 31,
2017    December 31,
2016
Cash and cash equivalents
   $ 183,709    $ 202,882
Restricted cash included in other current assets
   78    51
Restricted cash included in othernon-current assets
   3,098    3,013




Total cash, cash equivalents and restricted cash shown in the statement of cash flows
   $ 186,885    $ 205,946

~~Amounts included~~Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in ~~restricted cash represent those required to be set aside by a contractual agreement with a lessor related to certain leased office space in foreign jurisdictions. Restricted cash shown in~~determining the ~~statement~~present value of ~~cash flows for~~lease payments. We use the three months ended March 31, 2017 also includes funds deposited with a financial institution in Australia to provide a guarantee on our behalf as security for any funds we might draw under our revolving loan facility in China. The deposited funds were restricted in that we could not withdraw them as long as the related loan facility was in place. These amounts were reported in other~~non-current~~ ~~assets.~~implicit rate

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

when readily determinable. The operating lease ROU asset includes any prepaid lease payments and additional direct costs and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

~~2. New Accounting Standard – Sales Recognition~~

~~We adopted ASUNo. 2014-09,~~ ~~“Revenue from Contracts with Customers,” which created FASB Topic 606 (“Topic 606”) with a date~~The following table provides information about the financial statement classification of ~~initial application~~our lease balances reported within the consolidated balances sheets as of March 31, 2019 and January 1, ~~2018. Topic 606 also includes Subtopic340-40,~~ ~~“Other Assets and Deferred Costs – Contracts with Customers,” which requires~~2019 (in thousands):

Leases	Classification	March 31, 2019		January 1, 2019
Assets
Operating lease assets	Other assets	$	63,336	$	65,922
Finance lease assets	Property and equipment^(a)		1,522		1,693
Total lease assets		$	64,858	$	67,615
Liabilities
Current
Operating lease liabilities	Accrued expenses and other current liabilities	$	15,711	$	15,788
Finance lease liabilities	Current portion of long-term debt		1,161		1,399
Non-current
Operating lease liabilities	Other liabilities		52,692		54,724
Finance lease liabilities	Long-term debt		1,227		1,521
Total lease liabilities		$	70,791	$	73,432

(a)	Recorded net of accumulated amortization of $171,000 as of March 31, 2019 and there is no accumulated amortization as of January 1, 2019.

The following table provides information about the ~~deferral~~financial statement classification of ~~incremental costs~~our lease expenses reported within the consolidated statement of ~~obtaining a contract with a customer. As a result, we changed our accounting policy for sales recognition and incremental costs of obtaining a contract with a customer as detailed below.~~

We applied Topic 606 using the modified retrospective transition method. Upon initially applying the new standard, the net cumulative effect from prior periods of applying the guidance in Topic 606 was recognized as a cumulative effect adjustment to the opening balance of retained earnings in our consolidated balance sheet as of January 1, 2018. Additionally, we have elected the option to only account for contracts that remained open as of the January 1, 2018 transition date in accordance with Topic 606. Revenue recognition for contracts for which substantially all of the revenue was recognized in accordance with the revenue guidance in effect before January 1, 2018 has not been changed. The comparative information as of December 31, 2017 andoperations for the ~~years~~three months ended ~~December~~March 31, 2017 and 2016 have not been adjusted and continue to be reported under the previously applicable accounting standards. The details of the significant changes and quantitative impact of the changes are set forth below.

2019 (in thousands):

In sales transactions for certain security software products that are sold with integral third-party delivered software maintenance, we changed our accounting to record both the software license and the accompanying software maintenance on a net basis, as the agent in the arrangement, given the predominant nature of the goods and services provided to the customer. Under previous guidance, we bifurcated the sale of the software license from the sale of the maintenance contract, recorded the sale of the software product on a gross sales recognition basis and recorded the sale of the software maintenance on a net sales recognition basis. This change has no effect on reported gross profit dollars associated with these transactions.

Lease cost	Classification	Three months ended March 31, 2019
Operating lease cost ^{(a) (b)}	Selling and administrative expenses	$	4,918
Finance lease cost
Amortization of leased assets	Selling and administrative expenses		171
Interest on lease liabilities	Interest expense, net		27
Total lease cost		$	5,116

(a)	Includes immaterial amounts recorded to cost of goods sold.

(b)	Excludes short-term and variable lease costs, which are immaterial.

The accounting for inventories not available for sale, otherwise known as bill and hold arrangements, changed such that a portion of revenue under the contracts is recognized earlier than we were recognizing under previous accounting standards. Bill and hold arrangements are inventory balances owned by our clients that we are warehousing and will be deploying to the clients’ locations in a future period.

The accounting for renewals of certain software term licenses changed to delay revenue recognition until the beginning of the renewal period. Under previous guidance, we recognized revenue as the renewal order was completed.

The accounting for certain contracts with our clients that include payment terms that exceed one year changed such that we recognize revenue at the point in time when control of the product is transferred to the client or over the period of time that the service is provided to the client. To the extent that a significant financing component exists in these arrangements, we will record interest income associated with the financing component of the arrangement over the payment terms of the arrangement. Under previous guidance, we deferred revenue recognition under these contracts until payments became due as a result of the extended payment terms.

The timing of revenue recognition for certain services contracts also changed to align with an appropriate input or output method. For example, the timing of revenue recognition for certain services contracts with stated milestone terms changed to an earlier point in time when control transfers to the customer. Under previous guidance, we recognized revenue based on the milestones stated in the contract with our customer.

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The accounting for sales commissions on contracts with performance periods that exceed one year changed such that we record such sales commissions as an asset and amortize them to expense over the related contract performance period. Under previous guidance, sales commissions were expensed in the period the transaction was generated.

~~The total cumulative effect adjustment from prior periods that we recognized in our consolidated balance sheet as of January 1, 2018 as an adjustment to retained earnings was $7,176,000.~~

~~The following tables summarize the effects of adopting Topic 606 on the Company’s consolidated financial statements~~Future minimum lease payments under non-cancelable leases as of March 31, ~~2018~~2019 are as follows (in thousands):

	Operating leases			Finance leases			Total
Remainder of 2019	$	14,118		$	930		$	15,048
2020		14,758			1,150			15,908
2021		12,225			432			12,657
2022		9,466			—			9,466
2023		6,460			—			6,460
After 2023		20,913			—			20,913
Total lease payments		77,940			2,512			80,452
Less: Interest		(9,537	)		(124	)		(9,661	)
Present value of lease liabilities	$	68,403		$	2,388		$	70,791

Operating lease payments include $13.4 million related to options to extend lease terms that are reasonably certain of being exercised.

The following table provides information about the remaining lease terms and discount rates applied as of March 31, 2019:

	March 31, 2019
Weighted average remaining lease term (years)
Operating leases		6.58
Finance leases		2.19
Weighted average discount rate (%)
Operating leases		3.86
Finance leases		4.84

The following table provides other information related to leases for the three months ~~then~~ ended March 31, 2019 (in thousands):

~~BALANCE SHEET AT MARCH 31, 2018~~

	Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,457
Leased assets obtained in exchange for new finance lease liabilities		—
Leased assets obtained in exchange for new operating lease liabilities		1,768

Operating Leases pre-Topic 842 adoption:

   As Reported    Adjustments    Pre-Topic
606
Adoption
Cash and cash equivalents
   $ 100,237    $ —      $ 100,237
Accounts receivable, net
   1,751,321    (80,928 )    1,670,393
Inventories
   194,743    —      194,743
Inventories not available for sale
   645    65,470    66,115
Other current assets
   119,404    34,790    154,194






Total current assets
   2,166,350    19,332    2,185,682
Property and equipment, net
   75,579    —      75,579
Goodwill
   131,403    —      131,403
Intangible assets, net
   97,158    —      97,158
Deferred income taxes
   16,019    —      16,019
Other assets
   85,902    (28,709 )    57,193






   $ 2,572,411    $ (9,377 )    $ 2,563,034






Accounts payable – trade
   $ 882,782    $ (27,199 )    $ 855,583
Accounts payable – inventory financing facility
   228,102    —      228,102
Accrued expenses and other current liabilities
   175,147    �� (13,000 )    162,147
Current portion of long-term debt
   16,358    —      16,358
Deferred revenue
   70,955    65,146    136,101






Total current liabilities
   1,373,344    24,947    1,398,291
Long-term debt
   245,569    —      245,569
Deferred income taxes
   672    —      672
Other liabilities
   72,225    (26,269 )    45,956






   1,691,810    (1,322 )    1,690,488






Stockholders’ equity:

Preferred stock
   —      —      —
Common stock
   358    —      358
Additionalpaid-in capital
   315,493    —      315,493
Retained earnings
   584,423    (7,991 )    576,432
Accumulated other comprehensive loss – foreign currency translation adjustments
   (19,673 )    (64 )    (19,737 )






Total stockholders’ equity
   880,601    (8,055 )    872,546






   $ 2,572,411    $ (9,377 )    $ 2,563,034

We have non-cancelable operating leases with third parties, primarily for administrative and distribution center space and computer equipment. Our facilities leases generally provide for periodic rent increases and many contain escalation clauses and renewal options. We recognize rent expense on a straight-line basis over the lease term. Rental expense for these third-party operating leases was $20,114,000, $19,126,000 and $14,444,000 in 2018, 2017 and 2016, respectively, and is included in selling and administrative expenses in the accompanying consolidated statements of operations.

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2018 are as follows (in thousands):

~~STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2018~~

   As Reported    Adjustments    Pre-Topic
606
Adoption
Net sales:

Products
   $ 1,582,155    $ (9,497 )    $ 1,572,658
Services
   180,748    (1,996 )    178,752






Total net sales
   1,762,903    (11,493 )    1,751,410






Costs of goods sold:

Products
   1,438,734    (11,069 )    1,427,665
Services
   84,164    516    84,680






Total costs of goods sold
   1,522,898    (10,553 )    1,512,345






Gross profit
   240,005    (940 )    239,065
Operating expenses:

Selling and administrative expenses
   188,180    78    188,258
Severance and restructuring expenses
   1,644    —      1,644






Earnings from operations
   50,181    (1,018 )    49,163
Non-operating expense, net
   5,919    —      5,919






Earnings before income taxes
   44,262    (1,018 )    43,244
Income tax expense
   11,517    (203 )    11,314






Net earnings
   $ 32,745    $ (815 )    $ 31,930






Net earnings per share:

Basic
   $ 0.91    $ (0.02 )    $ 0.89






Diluted
   $ 0.90    $ (0.02 )    $ 0.88






Shares used in per share calculations:

Basic
   35,913    —      35,913






Diluted
   36,263    —      36,263

~~STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2018~~

The adoption of Topic 606 had no effect on net cash provided by operating activities, net cash used in investing activities or net cash used in financing activities for the three months ended March 31, 2018. The adjustment to net earnings noted above in reconciling our reported results of operations for the quarter under Topic 606 to~~pre-Topic~~ ~~606 adoption was fully offset by adjustments to the reported changes in asset and liability balances, resulting in no effect on operating cash flows.~~

~~Significant Accounting Policy~~

Revenue is measured based on the consideration specified in a contract with a client, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product or service to a client.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a client, are excluded from revenue. This is consistent with our accounting treatment prior to the adoption of Topic 606, whereby we reported sales net of any sales-based taxes assessed by governmental authorities that are imposed on and concurrent with sales transactions.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

Years Ending December 31,
2019	$	21,499
2020		15,580
2021		12,121
2022		9,150
2023		6,296
Thereafter		7,238
Total minimum lease payments	$	71,884

We record the freight we bill to our clients as net sales and the related freight costs we pay as costs of goods sold. This is consistent with our accounting treatment prior to the adoption of Topic 606.

~~Nature of Goods and Services~~

~~We sell hardware and software products on both a stand-alone basis without any services and as solutions bundled with services.~~

When we provide a combination of hardware and software products with the provision of services, we separately identify our performance obligations under our contract with the client as the distinct goods (hardware and/or software products) or services that will be provided. The total transaction price for an arrangement with multiple performance obligations is allocated at contract inception to each distinct performance obligation in proportion to its stand-alone selling price. The stand-alone selling price is the price at which we would sell a promised good or service separately to a client. Observable stand-alone prices are used when they are available. If not available, we estimate the price based on observable inputs, including direct labor hours and allocable costs.

~~Hardware Offerings~~

We recognize hardware product revenue at the point in time when a client takes control of the hardware, which typically occurs when title and risk of loss have passed to the client at its destination. Our selling terms and conditions were modified during the fourth quarter of 2017 to specify F.O.B. destination contractual terms such that control is transferred from the Company at the point in time when the product is received by the client. Prior to the adoption of Topic 606, because we either (i) had a general practice of covering client losses while products were in transit despite title and risk of loss contractually transferring at the point of shipment or (ii) had specifically stated F.O.B. destination contractual terms with the client, delivery was not deemed to have occurred until the point in time when the product was received by the client. The transaction price for hardware sales is adjusted for estimated product returns that we expect to occur under our return policy based upon historical return rates.

We leverage drop-shipment arrangements with many of our partners and suppliers to deliver products to our clients without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-shipment arrangements on a gross basis as the principalAmounts in the ~~transaction when the product is received by the client because we control the product prior to transfer to the client. We also assume primary responsibility for fulfillment~~table above exclude approximately $1.6 million in the arrangement, we assume inventory risk if the product is returned by the client, we set the price of the product charged to the client and we work closely with our clients to determine their hardware and software specifications. This is consistent with our accounting treatment prior to the adoption of Topic 606.

~~Bill and Hold Transactions~~

~~We offer a service to our customers whereby clients may purchase product that we procure on their behalf and, at our clients’ direction, store the product~~2019 in our warehouse for a designated period of time, with the intention of deploying the product to the clients’ designated locations at a later date. These warehousing services are designed to help our clients with inventory management challenges associated with technology roll-outs, product that is moving to end of life, and/or clients needing integrated stock available for immediate deployment. In some circumstances, we may also perform lab integration services on a portion of the product prior to shipment to our clients for anon-cancellable rental income.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~separate fee. The client is invoiced and title transfers to the client upon receipt of the product at our warehouse. These product contracts arenon-cancelable~~ with customary credit terms beginning the date the product is received in our warehouse and the warranty periods begin on the date of invoice. Revenue is recognized for the sale of the product to the client upon receipt of the product at our warehouse.

The warehousing services and lab integration fees are considered separate performance obligations. Under previous accounting guidance, prior to the adoption of Topic 606, it was determined that these product sales transactions did not meet the revenue recognition criteria under GAAP. Therefore, we did not record product net sales, and the inventories were classified as inventories not available for sale on our consolidated balance sheet, until the product was delivered to the clients’ designated location. If clients remitted payment before we delivered the product to them, we recorded the payments received as deferred revenue on our consolidated balance sheet until such time as the product was delivered.

~~Software Offerings~~

We recognize revenue from software sales at the point in time when the client acquires the right to use or copy software under license and control transfers to the client. Revenue is recognized upon the commencement of the term of the software license agreement or when the renewal term begins, as applicable. This is a change from our accounting treatment prior to the adoption of Topic 606, whereby revenue from renewals of software licenses was recognized when the parties agreed to the renewal or extension, provided that all other revenue recognition criteria had been met.

Although the revenue recognition treatment for term software license renewals has changed as described above, a substantial portion of the software licenses we sell are perpetual software licenses and do not require renewal or extension after their initial purchase by the client. Such perpetual licenses are periodically subject to~~true-up,~~ ~~whereby additional perpetual licenses are sold under the client’spre-existing~~ ~~master agreement. Suchtrue-ups~~ ~~are generally sold in arrears, and clients are invoiced for the additional licenses they had already been utilizing. Since the client controlled these additional perpetual licenses prior to thetrue-up,~~ ~~software revenue related to the underlying additional licenses is recognized when we agree to thetrue-up~~ ~~with our client and the partner. This is consistent with our accounting treatment prior to the adoption of Topic 606.~~

~~Software Maintenance~~

Software maintenance agreements provide our clients with the right to obtain any software upgrades, bug fixes and help desk and other support services directly from the software publisher at no additional charge during the term of the software maintenance agreements. We act as the software publisher’s agent in selling these software maintenance agreements and do not assume any performance obligation to the client under the agreements. As a result, we are the agent in these transactions and these sales are recorded on a net sales recognition basis. Under net sales recognition, the cost of the software maintenance agreement is recorded as a reduction to sales, resulting in net sales equal to the gross profit on the transaction, and there are no costs of goods sold. Because we are acting as the software publisher’s agent, revenue is recognized when the parties agree to the initial purchase, renewal or extension as our agency services are then complete. This is consistent with our accounting treatment prior to the adoption of Topic 606. As discussed in Note 10, we report all fees earned from activities reported net within our services net sales category in our statements of operations.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~Cloud /Software-as-a-Service~~ ~~Offerings~~

~~Cloud orsoftware-as-a-service~~ subscription products provide our clients with access to software products hosted in the public cloud without the client taking possession of the software. We act as the software publisher’s agent in selling these~~software-as-a~~ service subscription products and do not host the software products on our servers. We do not take control of the software products or assume any performance obligation to the clients related to the provisioning of the offerings in the cloud. As a result, these sales are recorded on a net sales recognition basis. This is consistent with our accounting treatment prior to the adoption of Topic 606. As discussed in Note 10, we report all fees earned from activities reported net within our services net sales category in our statements of operations.

~~Services Sales~~

~~We design, procure, deploy, implement and manage solutions that combine hardware, software and services to help businesses run smarter. Such services are provided by us or third-partysub-contract~~ vendors as part of bundled arrangements, or are provided separately on a stand-alone basis as technical, consulting or managed services engagements. If the services are provided as part of a bundled arrangement with hardware and software, the hardware, software and services are generally distinct performance obligations. In general, we recognize revenue from services engagements as we perform the underlying services and satisfy our performance obligations.

We recognize revenue for sales of services by measuring progress toward complete satisfaction of the related service performance obligation. Billings for such services that are made in advance of the related revenue recognized are recorded as a contract liability.

~~Specific revenue recognition practices for certain of our services offerings are described in further detail below.~~

~~Time and Materials Services Contracts.~~We recognize revenue for professional services engagements that are on a time and materials basis based upon hours incurred for the performance completed to date for which we have the right to consideration, even if such amounts have not yet been invoiced as of period end. This is consistent with our accounting treatment prior to the adoption of Topic 606, whereby we recognized revenue for professional services engagements that are on a time and materials basis based upon hours incurred as the services were performed and amounts were earned.

~~Fixed Fee Services Contracts.~~We recognize revenue on fixed fee professional services contracts using a proportional performance method of revenue recognition based on the ratio of direct labor and other allocated costs incurred to total estimated direct labor and other allocated costs. This is consistent with our accounting treatment prior to the adoption of Topic 606.

~~OneCall Support Services Contracts.~~When we sell certain hardware and/or software products to our clients, we also enter into service contracts with them. These contracts are support service agreements for the hardware and/or software products that were purchased. Under certain support services contracts, although we purchase third-party support contracts for maintenance on the specific hardware or software products we have sold, our internal support desk assists the client first by performing an initial technical triage to determine the source of the problem and whether we can direct the client on how to fix the problem. We refer to these services as “OneCall.” We act as the principal in the transaction because we perform the OneCall services over the term of the support service contract and we set the price of the service charged to the client. As a result, we recognize revenue from OneCall extended service contracts on a gross sales recognition basis ratably over the contract term of the stand ready obligation, generally one to three years.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

On our balance sheet, a significant portion of our contract liabilities balance relates to OneCall support services agreements for which clients have paid or have been invoiced but for which we have not yet recognized the applicable services revenue. We also defer incremental direct costs to fulfill our service contracts that we prepay to third parties for direct support of our fulfillment of the service contract to our clients under our contract terms and amortize them into operations over the term of the contracts.

The recognition of revenue and related costs for our stand ready obligation under our OneCall service contracts on a straight-line basis over the term of the contract is consistent with our accounting treatment prior to the adoption of Topic 606.

~~Vendor Direct Support Services Contracts.~~When we do not provide OneCall services to the client on hardware and/or software products that were purchased, the client purchases a vendor direct support services contract through us. Under these contracts, our clients call the manufacturer/publisher or its designated service organization directly for both the initial technical triage and any~~follow-up~~ assistance. We act as the manufacturer/publisher’s agent in selling these support service contracts and do not assume any performance obligation to the client under the arrangements. As a result, these sales are recorded on a net sales recognition basis similar to software maintenance agreements, as discussed above. Because we are acting as the manufacturer/publisher’s agent, revenue is recognized when the parties agree to the purchase of the support services contract as our agency services are then complete. This is consistent with our accounting treatment prior to the adoption of Topic 606.

~~Third-party Provided Services.~~~~A majority of our third-partysub-contractor~~ services contracts are entered into in conjunction with other services contracts under which the services are performed by Insight teammates. We have concluded that we control all services under the contract and can direct the third-party~~sub-contractor~~ to provide the requested services. As such, we act as the principal in the transaction and record the services under a gross sales recognition basis, with the selling price being recorded in sales and our cost to the third-party service provider being recorded in costs of goods sold. For certain third-party service contracts in which we are not responsible for fulfillment of the services, we have concluded that we are an agent in the transaction and record revenue on a net sales recognition basis. This is consistent with our accounting treatment prior to the adoption of Topic 606.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~Disaggregation of Revenue~~

3.	Sales Recognition

In the following table, revenue is disaggregated by our reportable operating segments, which are primarily defined ~~bytheir~~by their related geographies, as well as by major product offering, by major client group and by recognition on either a gross basis as a principal in the arrangement, or on a net basis as an agent, for the three months ended March 31, 2019 and 2018 (in thousands):

									Three Months Ended March 31, 2019
	Three Months Ended March 31, 2018								North America		EMEA		APAC		Consolidated
	North America		EMEA		APAC		Consolidated
Major Product Offering
Major Offerings
Hardware	$	873,341	$	187,010	$	7,160	$	1,067,511	$	748,337	$	171,525	$	6,518	$	926,380
Software		290,476		184,918		39,250		514,644		322,079		183,148		35,065		540,292
Services		143,581		28,487		8,680		180,748		172,025		35,502		11,267		218,794

	$	1,307,398	$	400,415	$	55,090	$	1,762,903
									$	1,242,441	$	390,175	$	52,850	$	1,685,466
Major Client Groups
Large Enterprise / Corporate	$	979,894	$	265,921	$	13,034	$	1,258,849	$	976,841	$	260,607	$	13,307	$	1,250,755
Public Sector		111,604		116,614		29,931		258,149		97,117		109,066		26,154		232,337
Small andMedium-Sized Businesses		215,900		17,880		12,125		245,905		168,483		20,502		13,389		202,374
									$	1,242,441	$	390,175	$	52,850	$	1,685,466
	$	1,307,398	$	400,415	$	55,090	$	1,762,903

Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)	$	1,259,489	$	383,077	$	52,920	$	1,695,486	$	1,182,078	$	367,165	$	47,866	$	1,597,109
Net revenue recognition (Agent)		47,909		17,338		2,170		67,417		60,363		23,010		4,984		88,357
									$	1,242,441	$	390,175	$	52,850	$	1,685,466
	$	1,307,398	$	400,415	$	55,090	$	1,762,903

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

	Three Months Ended March 31, 2018
	North America		EMEA		APAC		Consolidated
Major Offerings
Hardware	$	873,341	$	187,010	$	7,160	$	1,067,511
Software		261,060		190,202		39,019		490,281
Services		143,979		29,922		10,801		184,702
	$	1,278,380	$	407,134	$	56,980	$	1,742,494
Major Client Groups
Large Enterprise / Corporate	$	952,810	$	272,640	$	12,966	$	1,238,416
Public Sector		110,504		116,614		31,376		258,494
Small and Medium-Sized Businesses		215,066		17,880		12,638		245,584
	$	1,278,380	$	407,134	$	56,980	$	1,742,494
Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)	$	1,230,412	$	388,337	$	51,825	$	1,670,574
Net revenue recognition (Agent)		47,968		18,797		5,155		71,920
	$	1,278,380	$	407,134	$	56,980	$	1,742,494

~~Contract Balances~~

The following table provides information about receivables, contract assets and contract liabilities ~~from contracts with customers~~ as of March 31, ~~2018~~2019 and ~~January 1,~~December 31, 2018 (in thousands):

					March 31,		December 31,
	March 31, 2018		January 1, 2018		2019		2018
Current receivables, which are included in “Accounts receivable, net”	$	1,794,794	$	1,849,803	$	1,723,817	$	1,931,736
Non-current receivables, which are included in “Other assets”		41,748		29,675		142,792		38,157
Contract assets, which are included in “Other current assets”		1,040		595		1,207		892
Contract liabilities, which are included in “Deferred revenue” and “Other liabilities”		89,533		86,743		88,801		82,117

Significant changes in the contract assets and the contract liabilities balances during the three months ended March 31, ~~2018~~2019 are as follows (in thousands):

   Increase (Decrease)
   Contract
Assets    Contract
Liabilities
Balances at January 1, 2018
   $ 595    $ 86,743
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied
   —      (19,473 )
Cash received in advance and not recognized as revenue
   —      22,263
Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional
   (395 )    —
Contract assets recognized, net of reclassification to receivables
   840    —




Balances at March 31, 2018
   $ 1,040    $ 89,533

	Increase (Decrease)
	Contract			Contract
	Assets			Liabilities
Balances at December 31, 2018	$	892		$	82,117
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied		—			(17,651	)
Cash received in advance and not recognized as revenue		—			24,335
Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional		(117	)		—
Contract assets recognized, net of reclassification to receivables		432			—
Balances at March 31, 2019	$	1,207		$	88,801

~~Transaction price allocated to the remaining performance obligations~~

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table includes estimated net sales related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, ~~2018~~2019 that are expected to be recognized in the future (in thousands):

							Products		Services		Total
	Products		Services		Total
Remaining nine months of 2018	$	370	$	78,500	$	78,870
2019		193		47,727		47,920
Remaining nine months of 2019							$	9	$	74,784	$	74,793
2020		84		20,998		21,082		6		33,293		33,299
2021		6		6,867		6,873				13,936		13,936
2022		—		3,110		3,110				5,191		5,191
2023		—		910		910
2024 and thereafter		—		24		24

2023 and thereafter										2,667		2,667
Total remaining performance obligations	$	653	$	158,136	$	158,789	$	15	$	129,871	$	129,886

~~Topic 606 allows for certain practical expedients~~

With the exception of remaining performance obligations associated with our OneCall Support Services contracts which ~~we have elected to apply. As a result, we do not disclose information about remaining~~are included in the table above regardless of original duration, remaining performance obligations that have original expected durations of one year or less are not included in the table above. Amounts not included in the table above have an average original expected duration of ~~eight~~nine months. Additionally, for our time and material services contracts, whereby we have the right to consideration from a client in an amount that corresponds directly with the value to the client of our performance completed to date, we recognized revenue in the amount to which we have a right to invoice as of March 31, ~~2018~~2019 and do not disclose information about related remaining performance obligations in the table above. Our time and material contracts have an average expected duration of 1114 months.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

The majority of our backlog historically has been and continues to be open cancelable purchase orders. We do not believe that backlog as of any particular date is predictive of future results, therefore we do not include performance obligations under open cancelable purchase orders, which do not qualify for revenue recognition, in ~~accordance with Topic 606 as of March 31, 2018, in~~ the table above.

~~Assets recognized for costs of obtaining a contract with a customer~~

We believe that the only significant incremental costs incurred to obtain contracts with our clients within the scope of Topic 606 are sales commissions. The majority of our contracts are completed within a~~one-year~~ performance period, and for contracts with a specified term of one year or less, we have exercised a practical expedient, which allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Under Topic 606, we record sales commissions on contracts with performance periods that exceed one year as an asset and amortize the asset to expense over the related contract performance period. As of March 31, 2018, the related asset balance was $2,467,000, which we expect to recognize as expense over the next 36 months. Under previous accounting standards, we recognized sales commissions as earned and recorded such amounts within selling and administrative expenses in our statements of operations.

3. Net Earnings Per Share (“EPS”)

Basic EPS is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock units (“RSUs”).

A reconciliation of the denominators of the basic and diluted EPS calculations follows (in thousands, except per share data):


	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2019		2018
Numerator:
Net earnings	$	32,745	$	13,848	$	39,327	$	33,003

Denominator:
Weighted average shares used to compute basic EPS		35,913		35,602		35,609		35,913
Dilutive potential common shares due to dilutive RSUs, net of tax effect		350		583		494		350

Weighted average shares used to compute diluted EPS		36,263		36,185		36,103		36,263

Net earnings per share:
Basic	$	0.91	$	0.39	$	1.10	$	0.92

Diluted	$	0.90	$	0.38	$	1.09	$	0.91

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

For the three months ended March 31, 2019 and 2018, 164,000 and ~~2017,~~ 20,000, ~~and 96,000,~~ respectively, of our RSUs were not included in the diluted EPS calculations because their inclusion would have been anti-dilutive. These share-based awards could be dilutive in the future.

5.	Debt, Inventory Financing Facility, Finance Leases and Other Financing Obligations

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

4. Debt ~~Inventory Financing Facility, Capital Leases and Other Financing Obligations~~

~~Debt~~

Our long-term debt consists of the following (in thousands):


	March 31, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Senior revolving credit facility	$	2,000		$	117,500		$	—		$	—
Term Loan A (less unamortized debt issuance costs of $811 and $873, respectively)		162,158			165,377
Accounts receivable securitization financing facility		94,000			25,000			112,000			194,000
Capital leases and other financing obligations		3,769			5,291

Finance leases and other financing obligations								2,388			2,920
Total		261,927			313,168			114,388			196,920
Less: current portion of long-term debt		(16,358	)		(16,592	)		(1,161	)		(1,395	)

Long-term debt	$	245,569		$	296,576		$	113,227		$	195,525

Our senior revolving credit facility (“revolving facility”) has an aggregate U.S. dollar equivalent maximum borrowing amount of $350,000,000, including a maximum borrowing capacity that may be used for borrowing in certain foreign currencies of $50,000,000, and matures on June 23, 2021. In January 2017, we amended our revolving facility to expand the facility by $175,000,000 in the form of an incremental Term Loan A (“TLA”). The TLA requires amortization payments of 5%, 7.5%, 10%, 12.5% and 15% of the original principal balance in years one through five, respectively, to be paid quarterly through March 31, 2021, with the remaining balance of $107,187,500 due at maturity on June 23, 2021.

Our accounts receivable securitization financing facility (the “ABS facility”) has a maximum aggregate borrowing availability of $250,000,000, and matures on June 23, ~~2019.~~2021. While the ABS facility has a stated maximum amount, the actual availability under the ABS facility is limited by the quantity and quality of the underlying accounts receivable. As of March 31, ~~2018,~~2019, qualified receivables were sufficient to permit access to the full $250,000,000 facility amount, of which ~~$94,000,000~~$112,000,000 was outstanding.

Our consolidated debt balance that can be outstanding at the end of any fiscal quarter under our revolving facility ~~our TLA~~ and our ABS facility is limited by certain financial covenants, particularly a maximum leverage ratio. The maximum leverage ratio is calculated as aggregate debt outstanding divided by the sum of our trailing twelve month net earnings (loss) plus (i) interest expense, excludingnon-cash imputed interest on our inventory financing facility, (ii) income tax expense (benefit), (iii) depreciation and amortization,(iv) non-cash stock-based compensation, (v) extraordinary or~~non-recurringnon-cash~~ non-recurring non-cash losses or expenses and (vi) certain cash restructuring and acquisition-related charges and synergies, not to exceed a specified cap (“adjusted earnings”). The maximum leverage ratio permitted under the facilities is currently ~~3.25~~3.0 times our trailing twelve-month adjusted earnings. A significant drop in our adjusted earnings would limit the amount of indebtedness that could be outstanding at the end of any fiscal quarter to a level that would be below our consolidated maximum facility amount. Based on our maximum leverage ratio as of March 31, ~~2018,~~2019, our aggregate debt balance that could have been outstanding under our revolving facility ~~our TLA~~ and our ABS facility was the full amount of the maximum borrowing capacity of ~~$762,969,000, of which $2,000,000 was outstanding under our revolving facility, $162,969,000 was outstanding under our TLA and $94,000,000 was outstanding under our ABS facility at March 31, 2018.~~$600,000,000.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

Inventory Financing Facility

Our inventory financing facility ~~was amended on March 23, 2018 to increase the aggregate availability for vendor purchases under the facility from $325,000,000 to~~has a maximum borrowing capacity of $400,000,000, of which ~~$228,102,000~~$260,160,000 was outstanding at March 31, ~~2018.~~2019. The inventory financing facility matures on June 23, 2021. In conjunction with the increase in the aggregate availability under the facility, we no longer have the option to request additional increases in the aggregate amount available under the inventory financing facility without amending the facility. If balances are not paid within stated vendor terms, they will accrue interest at prime plus 1.25%. Amounts outstanding under this facility are classified separately as accounts ~~payable—~~payable – inventory financing facility in the accompanying consolidated balance sheets.

~~Capital~~13

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Finance Lease and Other Financing Obligations

Our ~~capital~~finance lease obligations totaled ~~$2,775,000~~$2,388,000 and ~~$2,802,000~~$2,920,000 as of March 31, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

In conjunction with our acquisition of Datalink effective January 6, 2017, we acquired certain obligations associated with Datalink’s financing of the equipment that it leased to its clients. These financing obligations totaled $994,000 and $2,489,000 as of March 31, 2018 and December 31, 2017, respectively.

The current and long-term portions of our ~~capital lease and other financing obligations~~finance leases are included in the current and long-term portions of long-term debt in the table above and in our consolidated balance sheets as of March 31, ~~2018~~2019 and December 31, ~~2017.~~2018. Further, see Note 2 for additional information.

6.	Restricted Cash

~~5. Severance~~Amounts included in restricted cash represent those required to be set aside by a contractual agreement with a lessor related to certain leased office space in foreign jurisdictions. The following table provides a reconciliation of cash, cash equivalents and ~~Restructuring Activities~~

~~During~~restricted cash reported within the ~~three months ended March 31, 2018, we recorded severance expense~~balance sheets that sum to the total of the same such amounts shown in ~~each~~the statements of ~~our operating segments. The charges in all three operating segments~~cash flows for the three months ended March 31, ~~2018 primarily related to severance actions taken to realign certain roles~~2019 and ~~responsibilities.~~

~~The following table details the activity related to these resource actions for the three months ended March 31, 2018 and the outstanding obligations as of March 31,~~ 2018 (in thousands):

   North America    EMEA    APAC    Consolidated
Balances at December 31, 2017
   $ 1,631    $ 2,994    $ 15    $ 4,640
Severance costs, net of adjustments
   443    1,074    127    1,644
Cash payments
   (791 )    (2,506 )    (142 )    (3,439 )
Foreign currency translation adjustments
   (20 )    81    —      61








Balances at March 31, 2018
   $ 1,263    $ 1,643    $ —      $ 2,906

	March 31, 2019		December 31, 2018
Cash and cash equivalents	$	124,831	$	142,655
Restricted cash included in other current assets		8		8
Restricted cash included in other non-current assets		1,627		1,630
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	126,466	$	144,293

The remaining outstanding obligations are expected to be paid during the next 12 months and, therefore, are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

	March 31, 2018		December 31, 2017
Cash and cash equivalents	$	100,237	$	105,831
Restricted cash included in other current assets		10		46
Restricted cash included in other non-current assets		1,604		1,568
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	101,851	$	107,445

6. 7.Stock-Based Compensation

We recorded the followingpre-tax amounts in selling and administrative expenses for stock-based compensation, by operating segment, in the accompanying consolidated financial statements (in thousands):


	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2019		2018
North America	$	2,390	$	2,538	$	3,123	$	2,390
EMEA		690		745		870		690
APAC		104		129		122		104

Total Consolidated	$	3,184	$	3,412	$	4,115	$	3,184

As of March 31, ~~2018,~~2019, total compensation cost related to nonvested RSUs not yet recognized is ~~$28,174,000,~~$36,742,000, which is expected to be recognized over the next ~~1.41~~1.84 years on a weighted-average basis.

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table summarizes our RSU activity during the three months ended March 31, ~~2018:~~2019:

   Number    Weighted Average
Grant Date Fair Value    Fair Value
Nonvested at January 1, 2018
   892,113    $ 32.86
Granted^(a)
   377,045    35.30
Vested, including shares withheld to
cover taxes
   (321,924 )    29.65    $ 11,355,845 ^(b)


Forfeited
   (14,185 )    33.14



Nonvested at March 31, 2018^(a)
   933,049    34.95    $ 32,591,402 ^(c)

	Number			Weighted Average Grant Date Fair Value		Fair Value
Nonvested at January 1, 2019		1,020,930		$	36.10
Granted^(a)		326,868			57.52
Vested, including shares withheld to cover taxes		(387,406	)		33.90	$	13,133,063	��	^(b)
Forfeited		(7,888	)		40.94
Nonvested at March 31, 2019^(a)		952,504			44.30	$	52,444,870		^(c)

^(a)

Includes ~~116,967~~88,509 RSUs subject to remaining performance conditions. The number of RSUs subject to performance conditions are based on the Company achieving 97% of its ~~2018~~2019 targeted financial results. The number of RSUs ultimately awarded under the performance-based RSUs varies based on actual achieved financial results for ~~2018.~~2019.

^(b)

⁽^b⁾

The aggregate fair value of vested RSUs represents the totalpre-tax fair value, based on the closing stock price on the day of vesting, which would have been received by holders of RSUs had all such holders sold their underlying shares on that date.

^(c)

⁽^c⁾

The aggregate fair value of the nonvested RSUs and the RSUs expected to vest represents the totalpre-tax fair value, based on our closing stock price of ~~$34.93~~$55.06 as of March 29, ~~2018~~2019 (the last trading day of the quarter), which would have been received by holders of RSUs had all such holders sold their underlying shares on that date.

8.	7. Income Taxes

Our effective tax rate for the three months ended March 31, 2019 and 2018 was 23.5% and ~~2017 was 26.0% and 26.2%~~25.9%, respectively. For the three months ended March 31, 2019, our effective tax rate was higher than the United States federal statutory rate of 21.0% due primarily to state income taxes, net of federal benefit, and higher taxes on earnings in foreign jurisdictions partially offset by tax benefits on the settlement of employee share-based awards and the recognition of tax benefits related to research and development activities. For the three months ended March 31, 2018, our effective tax rate was higher than the United States federal statutory rate of 21.0% due primarily to state income taxes net of federal benefit. For the three months ended March 31, 2017, our effective tax rate was lower than the United States federal statutory rate of 35.0% due primarily to the recognition of $1,996,000 of tax benefits on the settlement of employee share-based awards in accordance with a new accounting standard, which was adopted effective January 1, 2017, and the recognition of certain tax benefits related to the release of reserves for specific uncertain tax positions during the quarter. Additionally, the effect of lower taxes on earnings in foreign jurisdictions was offset partially by losses in certain foreign jurisdictions, resulting in an increase in the valuation allowance for deferred tax assets related to these foreign operating losses. These decreases in our effective tax rate were partially offset by state income taxes, net of federal benefit, and the effect of~~non-deductible~~ ~~acquisition-related expenses incurred during the first quarter of 2017.~~

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

In December 2017, U.S. federal tax reform was enacted as part of the U.S. Tax Cuts and Jobs Act. Although we recorded a tax charge in 2017 in connection with the enactment of the U.S. Tax Cuts and Jobs Act, we have not completed our accounting related to all of its provisions. U.S. income taxes attributable to the remeasurement of U.S. deferred income taxes, the mandatory deemed repatriation provision and the state tax effects of these items are provisional amounts. For the quarter ended March 31, 2018, we have not made any changes to these provisional estimates, and we are continuing to analyze and model the impacts of the U.S. federal tax reform and will record said impacts as they become more certain.

As of March 31, ~~2018~~2019 and December 31, ~~2017,~~2018, we had approximately ~~$4,300,000~~$7,423,000 and ~~$4,273,000,~~$6,849,000, respectively, of unrecognized tax benefits. Of these amounts, approximately ~~$268,000~~$373,000 and ~~$287,000,~~$313,000, respectively, related to accrued interest. In the future, if recognized, the liability associated with uncertain tax positions would affect our effective tax rate. We do not believe there will be any changes over the next 12 months that would have a material effect on our effective tax rate.

Several of our subsidiaries are currently under audit for tax years 2012 through ~~2015.~~2017. Although the timing of the resolutions and/or closures of audits is highly uncertain, it is reasonably possible that the examination phase of these audits may be concluded within the next 12 months, which could ~~significantly~~ increase or decrease the balance of our gross unrecognized tax benefits. However, based on the status of the various examinations in multiple jurisdictions, an estimate of the range of reasonably possible outcomes cannot be made at this time, but the estimated effect on our income tax expense and net earnings is not expected to be significant.

~~8. Share Repurchase Program~~15

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

9.	Share Repurchase Program

On February 13, 2018, our Board of Directors authorized the repurchase of up to $50,000,000 of our common stock. Our share repurchases will be made on the open market, subject to Rule10b-18 or in privately negotiated transactions, through block trades, through10b5-1 plans or otherwise, at management’s discretion. The amount of shares purchased and the timing of the purchases will be based on market conditions, working capital requirements, general business conditions and other factors. We intend to retire the repurchased shares. We

During the three months ended March 31, 2019, we did not repurchase any shares of our common stock. During the comparative three months ended March 31, 2018, we repurchased 221,256 shares of our common stock on the open market at a total cost of approximately $7,679,000 (an average price of $34.71 per share) ~~during the three months ended March 31, 2018.~~. All shares repurchased were retired. ~~During the comparative three months ended March 31, 2017, we did not repurchase any shares of our common stock.~~

10.	Commitments and Contingencies

~~9. Commitments and Contingencies~~

Contractual

In the ordinary course of business, we issue performance bonds to secure our performance under certain contracts or state tax requirements. As of March 31, ~~2018,~~2019, we had approximately ~~$1,962,000~~$3,939,000 of performance bonds outstanding. These bonds are issued on our behalf by a surety company on an unsecured basis; however, if the surety company is ever required to pay out under the bonds, we have contractually agreed to reimburse the surety company.

Management believes that payments, if any, related to these performance bonds are not probable at March 31, ~~2018.~~2019. Accordingly, we have not accrued any liabilities related to such performance bonds in our consolidated financial statements.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

Employment Contracts and Severance Plans

We have employment contracts with, and severance plans covering, certain officers and management teammates under which severance payments would become payable in the event of specified terminations without cause or terminations under certain circumstances after a change in control. In addition, vesting of outstanding nonvested RSUs would accelerate following a change in control. If severance payments under the current employment agreements or plan payments were to become payable, the severance payments would generally range from three to twenty-four months of salary.

Indemnifications

From time to time, in the ordinary course of business, we enter into contractual arrangements under which we agree to indemnify either our clients or third-party service providers from certain losses incurred relating to services performed on our behalf or for losses arising from defined events, which may include litigation or claims relating to past performance. These arrangements include, but are not limited to, the indemnification of our clients for certain claims arising out of our performance under our sales contracts, the indemnification of our landlords for certain claims arising from our use of leased facilities and the indemnification of the lenders that provide our credit facilities for certain claims arising from their extension of credit to us. Such indemnification obligations may not be subject to maximum loss clauses.

Management believes that payments, if any, related to these indemnifications are not probable at March 31, ~~2018.~~2019. Accordingly, we have not accrued any liabilities related to such indemnifications in our consolidated financial statements.

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

We have entered into separate indemnification agreements with certain of our executive officers and with each of our directors. These agreements require us, among other requirements, to indemnify such officers and directors against expenses (including attorneys’ fees), judgments and settlements incurred by such individual in connection with any action arising out of such individual’s status or service as our executive officer or director (subject to exceptions such as where the individual failed to act in good faith or in a manner the individual reasonably believed to be in, or not opposed to, the best interests of the Company) and to advance expenses incurred by such individual with respect to which such individual may be entitled to indemnification by us. There are no pending legal proceedings that involve the indemnification of any of the Company’s directors or officers.

Contingencies Related to Third-Party Review

From time to time, we are subject to potential claims and assessments from third parties. We are also subject to various governmental, client and partner audits. We continually assess whether or not such claims have merit and warrant accrual. Where appropriate, we accrue estimates of anticipated liabilities in the consolidated financial statements. Such estimates are subject to change and may affect our results of operations and our cash flows.

Legal Proceedings

From time to time, we are party to various legal proceedings arising in the ordinary course of business, including preference payment claims asserted in client bankruptcy proceedings, indemnification claims, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, claims of allegednon-compliance with contract provisions and claims related to alleged violations of laws and regulations. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional loss, may have been incurred and determine if accruals are

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

appropriate. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made for disclosure. Although litigation is inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that our consolidated financial position, results of operations or liquidity could be materially and adversely affected in any particular period by the resolution of a legal proceeding. Legal expenses related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred.

The Company is not involved in any pending or threatened legal proceedings that it believes would reasonably be expected to have a material adverse effect on its business, financial condition or results of operations.

~~10.~~

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

11.Segment Information

We operate in three reportable geographic operating segments: North America; EMEA; and APAC. Our offerings in North America and certain countries in EMEA and APAC include IT hardware, software and services. Our offerings in the remainder of our EMEA and APAC segments are largely software and certain software-related services.

During the year ended December 31, 2017, subsequent to our acquisition of Datalink, our consolidated net sales from the provision of services approximated 10%. As such, beginning with our results of operations for the year ended December 31, 2017, we began reporting net sales from the provision of services and the related costs of goods sold separately from net sales of products and the related costs of goods sold on the face of our consolidated statement of operations. We continued this presentation in the three months ended March 31, 2018, and expect to continue this presentation in future periods. For comparability purposes, net sales and costs of goods sold for the three months ended March 31, 2017 have been expanded to conform to the current year presentation. These changes in presentation had no effect on previously reported total net sales, total costs of goods sold or gross profit amounts.

In conjunction with these changes in presentation, because fees earned from activities reported net are considered services revenues, we reclassified certain revenue streams for which we act as the agent in the transaction to net sales from services. Previously, we included these net revenue streams within our software and, to a lesser extent, hardware sales mix categories based on the type of product being sold (e.g., fees earned for the sale of software maintenance and certain software licenses were included in software sales and fees earned for the sale of certain third-party provided training and warranty services were included in hardware sales when we historically disclosed and analyzed our sales mix). For comparability purposes, our sales mix among our hardware, software and services categories for the three months ended March 31, 2017 has been reclassified to conform to the current year presentation. These reclassifications had no effect on previously reported total net sales amounts. The following table summarizes net sales by offering for North America, EMEA and APAC including the effect of the reclassifications on the previously reported net sales by sales mix amounts for the three months ended March 31, ~~2017~~2019 and 2018 (in thousands):

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

   North America
Three Months Ended
March 31,    EMEA
Three Months Ended
March 31,    APAC
Three Months Ended
March 31,
Sales Mix
   2018    2017    2018    2017    2018    2017
      (As
Reclassified)       (As
Reclassified)       (As
Reclassified)
Hardware
   $ 873,341    $ 710,864    $ 187,010    $ 138,877    $ 7,160    $ 4,080
Software
   290,476    273,983    184,918    169,318    39,250    24,847
Services
   143,581    126,105    28,487    22,160    8,680    7,309












   $ 1,307,398    $ 1,110,952    $ 400,415    $ 330,355    $ 55,090    $ 36,236

In North America, EMEA and APAC, fees earned from activities reported on a net basis totaling $21,981,000, $10,876,000 and $2,172,000, respectively, that were previously reported as part of our software or hardware product categories in the three months ended March 31, 2017, were reclassified to services to conform to the current year presentation. On a consolidated basis, these reclassified amounts included a total of only $71,000 of fees previously included within the hardware sales mix category for the three months ended March 31, 2017.

	North America				EMEA				APAC
	Three Months Ended March 31,				Three Months Ended March 31,				Three Months Ended March 31,
Sales Mix	2019		2018		2019		2018		2019		2018

Hardware	$	748,337	$	873,341	$	171,525	$	187,010	$	6,518	$	7,160
Software		322,079		261,060		183,148		190,202		35,065		39,019
Services		172,025		143,979		35,502		29,922		11,267		10,801
	$	1,242,441	$	1,278,380	$	390,175	$	407,134	$	52,850	$	56,980

All significant intercompany transactions are eliminated upon consolidation, and there are no differences between the accounting policies used to measure profit and loss for our segments or on a consolidated basis. Net sales are defined as net sales to external clients. None of our clients exceeded ten percent of consolidated net sales for the three months ended March 31, ~~2018~~2019 or ~~2017.~~2018.

A portion of our operating segments’ selling and administrative expenses arise from shared services and infrastructure that we have historically provided to them in order to realize economies of scale and to use resources efficiently. These expenses, collectively identified as corporate charges, include senior management expenses, internal audit, legal, tax, insurance services, treasury and other corporate infrastructure expenses. Charges are allocated to our operating segments, and the allocations have been determined on a basis that we considered to be a reasonable reflection of the utilization of services provided to or benefits received by the operating segments.

The following tables present our results of operations by reportable operating segment for the periods indicated (in thousands):


	Three Months Ended March 31, 2018								Three Months Ended March 31, 2019
	North America		EMEA		APAC		Consolidated		North America		EMEA			APAC		Consolidated
Net sales:
Products	$	1,163,817	$	371,928	$	46,410	$	1,582,155	$	1,070,416	$	354,673		$	41,583	$	1,466,672
Services		143,581		28,487		8,680		180,748		172,025		35,502			11,267		218,794

Total net sales		1,307,398		400,415		55,090		1,762,903		1,242,441		390,175			52,850		1,685,466

Costs of goods sold:
Products		1,057,989		337,907		42,838		1,438,734		974,701		324,038			38,569		1,337,308
Services		74,038		6,716		3,410		84,164		85,133		9,154			5,399		99,686

Total costs of goods sold		1,132,027		344,623		46,248		1,522,898		1,059,834		333,192			43,968		1,436,994

Gross profit		175,371		55,792		8,842		240,005		182,607		56,983			8,882		248,472
Operating expenses:
Selling and administrative expenses		132,640		48,283		7,257		188,180		136,950		47,145			6,968		191,063
Severance and restructuring expenses		443		1,074		127		1,644		331		(85	)		124		370

Earnings from operations	$	42,288	$	6,435	$	1,458	$	50,181	$	45,326	$	9,923		$	1,790	$	57,039

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)


	Three Months Ended March 31, 2017									Three Months Ended March 31, 2018
	North America		EMEA			APAC		Consolidated		North America		EMEA		APAC		Consolidated
Net sales:
Products	$	984,847	$	308,195		$	28,927	$	1,321,969	$	1,134,401	$	377,212	$	46,179	$	1,557,792
Services		126,105		22,160			7,309		155,574		143,979		29,922		10,801		184,702

Total net sales		1,110,952		330,355			36,236		1,477,543		1,278,380		407,134		56,980		1,742,494

Costs of goods sold:
Products		891,587		282,509			26,961		1,201,057		1,028,970		343,019		42,997		1,414,986
Services		61,064		5,300			1,895		68,259		74,039		8,065		5,141		87,245

Total costs of goods sold		952,651		287,809			28,856		1,269,316		1,103,009		351,084		48,138		1,502,231

Gross profit		158,301		42,546			7,380		208,227		175,371		56,050		8,842		240,263
Operating expenses:
Selling and administrative expenses		131,010		40,143			6,479		177,632		132,640		48,283		7,257		188,180
Severance and restructuring expenses		1,104		3,530			61		4,695		443		1,074		127		1,644
Acquisition-related expenses		2,947		—			—		2,947

Earnings (loss) from operations	$	23,240	$	(1,127	)	$	840	$	22,953

Earnings from operations										$	42,288	$	6,693	$	1,458	$	50,439

The following is a summary of our total assets by reportable operating segment (in thousands):


	March 31, 2018			December 31, 2017			March 31, 2019			December 31, 2018
North America	$	2,349,002		$	2,337,573		$	2,640,942		$	2,660,886
EMEA		576,292			530,242			614,556			611,338
APAC		112,778			101,169			114,156			98,959
Corporate assets and intercompany eliminations, net		(465,661	)		(283,333	)		(613,187	)		(595,236	)

Total assets	$	2,572,411		$	2,685,651		$	2,756,467		$	2,775,947

We recorded the followingpre-tax amounts, by reportable operating segment, for depreciation and amortization in the accompanying consolidated financial statements (in thousands):


	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2019		2018
Depreciation and amortization of property and equipment:
North America	$	4,298	$	5,553	$	3,957	$	4,298
EMEA		1,003		1,150		955		1,003
APAC		132		127		132		132
						5,044		5,433
		5,433		6,830

Amortization of intangible assets:
North America		3,360		4,012		3,636		3,360
EMEA		74		12		69		74
APAC		177		199		118		177
						3,823		3,611
		3,611		4,223

Total	$	9,044	$	11,053	$	8,867	$	9,044

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

12.	Acquisition

Effective August 1, 2018, we acquired 100 percent of the issued and outstanding shares of Cardinal, a digital solutions provider based in Cincinnati, Ohio, with offices across the Midwest and Southeast United States, for a cash purchase price, net of cash acquired, of approximately $78,400,000, including final working capital and tax gross up adjustments. Cardinal provides technology solutions to digitally transform organizations through their expertise in mobile applications development, Internet of Things and cloud enabled business intelligence. We believe that this acquisition strengthens our services capabilities and will bring value to our clients within our digital innovation services solution offering.

The fair value of net assets acquired was approximately $42,360,000, including $27,540,000 of identifiable intangible assets, consisting primarily of customer relationships that will be amortized using the straight line method over the estimated economic life of ten years. The preliminary purchase price was allocated using the information currently available. We finalized the fair value assumptions for identifiable intangible assets acquired in the fourth quarter of 2018. Goodwill acquired approximated $36,040,000 which was recorded in our North America operating segment. The goodwill is tax deductible. The working capital adjustment in the amount of $762,000 was finalized in the fourth quarter of 2018 and paid in January 2019. Additionally, we finalized the purchase price allocation when the tax gross up adjustment of $2,600,000 was agreed upon in April 2019. This resulted in a reduction of the previously recorded purchase price of $400,000.

We consolidated the results of operations for Cardinal within our North America operating segment beginning on August 1, 2018, the effective date of the acquisition. Our historical results would not have been materially affected by the acquisition of Cardinal and, accordingly, we have not presented pro forma information as if the acquisition had been completed at the beginning of each period presented in our statement of operations.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form10-Q. We refer to our customers as “clients,” our suppliers as “partners” and our employees as “teammates.”

Quarterly Overview

Today, every business is a technology business. We ~~are a Fortune 500 global IT provider helping businesses~~empower organizations of all sizes ~~– from small and medium sized firms to worldwide enterprises, governments, schools and health care organizations – define, architect, implement and manage~~with Intelligent Technology Solutions^TM and services to maximize the business value of IT in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). ~~We empower our~~As a Fortune 500-ranked global provider of digital innovation, cloud/data center transformation, connected workforce, and supply chain optimization solutions, we help clients ~~to manage their IT environments so they can drive meaningful business outcomes today~~innovate and ~~transform~~optimize their operations ~~for tomorrow.~~to run smarter. Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services. Our offerings in the remainder of our EMEA and APAC segments are largely software and certain software-related services.

~~Consolidated net sales of $1.76 billion in~~

On a consolidated basis, for the three months ended March 31, ~~2018 increased 19%~~2019:

Net sales of $1.69 billion decreased 3% compared to the three months ended March 31, ~~2017, reflecting strong top line financial results across each of~~2018. This change reflects a decrease in hardware net sales to large enterprise clients offset by growth in our ~~geographic operating segments.~~software and services net sales. Excluding the effects of fluctuating foreign currency exchange ~~rates, consolidated~~rate net sales ~~increased 16% in the first quarter of 2018~~decreased 1% compared to the first quarter of ~~2017.~~2018.

~~Consolidated gross~~Gross profit of ~~$240.0~~$248.5 million ~~in the three months ended March 31, 2018~~ increased ~~15%~~3% compared to the three months ended March 31, ~~2017. Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit increased 12% in the three months ended March 31,~~ 2018, compared to the three months ended March 31, 2017. Gross margin declined approximately 50 basis points year to year to 13.6%, reflecting a lower mix of fees from enterprise agreements and fewer professional services engagements, partly offset by the positive effect of changes to certain partner programs. As a result of the changes, certain incentives, which would normally be earned over the full year, were accelerated and were fully earned in the first quarter of 2018. We estimate that the benefit in the three months ended March 31, 2018 was approximately $5.0 million.

~~Consolidated selling and administrative expenses for the first quarter of 2018 increased $10.5 million, or~~up 6% year over year ~~(up 3%~~ excluding the effects of fluctuating foreign currency exchange ~~rates). Our consolidated results~~rates.

Gross margin improved approximately 90 basis points to 14.7% of ~~operations for~~net sales in the ~~first quarter of 2018 also include severance expense,~~three months ended March 31, 2019. This increase reflects a change in sales mix towards higher margin net ~~of adjustments, totaling $1.6 million~~sales categories, including Insight delivered services and cloud solutions compared to ~~$4.7 million during~~ the ~~first quarter of 2017. The first quarter of 2017 also included $2.9 million~~same period in ~~transaction expenses related to~~ the ~~Datalink acquisition, which impacted the~~prior year.

Earnings from operations increased 13% year over year ~~comparison. No such acquisition-related expenses were recorded during the first quarter of 2018.~~

~~Double digit growth in net sales and gross profit, including the positive effect of the change in certain partner incentives noted above, combined with effective cost control, led~~ to ~~a 119% year over year improvement in consolidated earnings from operations from $23.0~~$57.0 million in the first quarter of ~~2017~~2019 compared to ~~$50.2~~$50.4 million in the first quarter of ~~2018, with each of our operating segments contributing positively to our results.~~2018. Excluding the effects of fluctuating foreign currency exchange rates, consolidated earnings from operations ~~also~~ increased ~~119%~~14% year over year. ~~On a consolidated basis, we reported~~

Net earnings and diluted earnings per share were $39.3 million and $1.09, respectively, for the first quarter of 2019. This compares to net earnings of ~~$32.7~~$33.0 million and diluted earnings per share of ~~$0.90~~$0.91 for the first quarter of 2018. ~~This compares to net earnings of $13.8 million and diluted earnings per share of $0.38 for the first quarter of 2017.~~

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Throughout the “Quarterly Overview” and “Results of Operations” sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit, selling and administrative expenses and earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates. In computing the changes in amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period.

Details about segment results of operations can be found in Note 1011 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Our discussion and analysis of financial condition and results of operations is intended to assist in the understanding of our consolidated financial statements, including the changes in certain key items in those consolidated financial statements from period to period and the primary factors that contributed to those changes, as well as how certain critical accounting estimates affect our consolidated financial statements.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form10-K for the year ended December 31, ~~2017.~~2018. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ from estimates we have made. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.

There have been no changes to the items disclosed as critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report onForm 10-K for the year ended December 31, ~~2017, other than the adoption of ASUNo. 2014-09,~~ ~~“Revenue from Contracts with Customers,” effective January 1, 2018, as discussed in Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.~~2018.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Results of Operations

The following table sets forth certain financial data as a percentage of net sales for the three months ended March 31, ~~2018~~2019 and ~~2017:~~2018:


	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Costs of goods sold		86.4			85.9			85.3			86.2

Gross profit		13.6			14.1			14.7			13.8
Selling and administrative expenses		10.7			12.0			11.3			10.8
Severance and restructuring and acquisition-related expenses		0.1			0.5

Severance and restructuring expenses								—			0.1
Earnings from operations		2.8			1.6			3.4			2.9
Non-operating expense, net		0.3			0.3			0.3			0.3

Earnings before income taxes		2.5			1.3			3.1			2.6
Income tax expense		0.6			0.3			0.8			0.7

Net earnings		1.9	%		1.0	%		2.3	%		1.9	%

We experience some seasonal trends in our sales of IT hardware, software and services. Software sales are typically seasonally higher in our ~~second and fourth quarters, particularly the~~ second quarter. Business clients, particularly larger enterprise businesses in the United States, tend to spend more in our fourth quarter and less in our first quarter. Sales to the federal government in the United States are often stronger in our third quarter, while sales in the state and local government and education markets are stronger in our second quarter. Sales to public sector clients in the United Kingdom are often stronger in our first quarter. These trends create overall seasonality in our consolidated results such that net sales and profitability are expected to be higher in the second and fourth quarters of the year.

~~During the year ended December 31, 2017, our consolidated net sales from the provision of services was approximately 10% of net sales. Accordingly, in our Annual Report on Form10-K~~ for the year ended December 31, 2017, we began reporting net sales from the provision of services and the related costs of goods sold separately from net sales of products and the related costs of goods sold on the face of our consolidated statements of operations. We continued this reporting on the face of our consolidated statement of operations for the three months ended March 31, 2018 included in the Consolidated Financial Statements in Part I, Item 1 of this report. For comparability purposes, the presentation of net sales and costs of goods sold for the three months ended March 31, 2017 has been revised to conform to the current period presentation. These changes in presentation had no effect on previously reported total net sales, total costs of goods sold or gross profit amounts.

In conjunction with this change in presentation, because fees earned from activities reported net are considered services revenues, we reclassified certain revenue streams for which we act as the agent in the transaction to net sales from services. Previously, we included these net revenue streams within our software and, to a lesser extent, hardware sales mix categories based on the type of product being sold (e.g., fees earned for the sale of software maintenance and certain software licenses were included in software sales and fees earned for the sale of certain third-party provided training and warranty services were included in hardware sales when we historically disclosed and analyzed our sales mix). For comparability purposes, the sales mix among our hardware, software and services categories for the three months ended March 31, 2017 have been reclassified to conform to the current period presentation. Such reclassifications had no effect on previously reported net sales amounts.

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

Our gross profit across the business is, and will continue to be, impacted by partner incentives, which can change significantly in the amounts made available and the related product or services sales being incentivized by the partner. ~~These~~Incentives from our largest partners are significant and changes in the incentives could impact our results of operations to the extent we are unable to ~~remediate and otherwise respond~~adapt our sales strategies to ~~them.~~optimize performance under the revised programs.

Net Sales. Net sales ~~for the three months ended March 31, 2018 increased 19%~~decreased 3% year to year to $1.69 billion compared to the three months ended March 31, ~~2017 to $1.76 billion. Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales increased 16% in the first quarter of 2018 compared to the first quarter of 2017.~~2018. Our net sales by operating segment were as follows for the three months ended March 31, ~~2018~~2019 and ~~2017~~2018 (dollars in thousands):


	Three Months Ended March 31,				%			Three Months Ended March 31,				%
	2018		2017		Change			2019		2018		Change
North America	$	1,307,398	$	1,110,952		18	%	$	1,242,441	$	1,278,380		(3	%)
EMEA		400,415		330,355		21	%		390,175		407,134		(4	%)
APAC		55,090		36,236		52	%		52,850		56,980		(7	%)

Consolidated	$	1,762,903	$	1,477,543		19	%	$	1,685,466	$	1,742,494		(3	%)

Net sales in North America ~~increased 18%~~decreased 3%, or ~~$196.4~~$35.9 million, for the three months ended March 31, ~~2018~~2019 compared to the three months ended March 31, ~~2017.~~2018, primarily driven by declines in hardware net sales to large enterprise clients. Net sales ~~of hardware, software and services increased 23%~~in EMEA decreased 4%, ~~6% and 14%, respectively, year over year. By client group, our top line results included double digit growth with large, small and medium businesses and public sector clients during~~or $17.0 million, in the first quarter of 2018. The growth in hardware net sales reflects a continuation of the device refresh cycle noted in previous quarters as well as higher volume of sales in the data center categories of networking, servers and storage. Services net sales improved year over year due to higher netted sales of software maintenance and cloud offerings. Our net sales by offering category for North America for the three months ended March 31, 2018 and the three months ended March 31, 2017 (as reclassified), were as follows (dollars in thousands):

   North America
   2018    2017    % Change
Sales Mix
      (As Reclassified)
Hardware
   $ 873,341    $ 710,864    23 %
Software
   290,476    273,983    6 %
Services
   143,581    126,105    14 %






   $ 1,307,398    $ 1,110,952    18 %

In North America, fees earned from activities reported on a net basis of $69,000 and $21.9 million that were previously reported as part of our hardware and software product categories, respectively, in the three months ended March 31, 2017, were reclassified to services to conform to the current period presentation.

~~Net sales in EMEA increased 21%, or $70.1 million, for the three months ended March 31, 2018~~2019 compared to the ~~three months ended March 31, 2017.~~first quarter of 2018. Excluding the effects of fluctuating foreign currency exchange rates net sales in EMEA increased 2%, year over year. Net sales in APAC decreased 7%, or $4.1 million, in the first quarter of 2019 compared to the first quarter of ~~last year. Net sales~~2018. Excluding the effects of ~~hardware, software and services increased 35%, 9% and 29%, respectively, compared to the first quarter of 2017. The increase in hardware~~fluctuating foreign currency exchange rates net sales ~~was due primarily to a higher volume of sales of client devices and networking solutions to large enterprise and public sector clients. The increase~~ in services net sales was due primarily to a higher volume of sales of software maintenance and cloud subscription products as well as the addition of Dutch cloud service provider, Caase.com, to our business effective September 26, 2017. Our net sales by offering category for EMEA for the three months ended March 31, 2018 and the three months ended March 31, 2017 (as reclassified)APAC increased 1%, ~~were as follows (dollars in thousands):~~ year over year.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

   EMEA
   2018    2017    % Change
Sales Mix
      (As Reclassified)
Hardware
   $ 187,010    $ 138,877    35 %
Software
   184,918    169,318    9 %
Services
   28,487    22,160    29 %






   $ 400,415    $ 330,355    21 %

~~In EMEA, fees earned from activities reported on a~~Our net ~~basis of $10.9 million that were previously reported as part of our software product~~sales by offering category ~~in the three months ended March 31, 2017 were reclassified to services to conform to the current period presentation.~~

~~Net sales in APAC increased 52%, or $18.9 million,~~for North America for the three months ended March 31, ~~2018 compared to~~2019 and the three months ended March 31, ~~2017. Excluding the effects of fluctuating foreign currency exchange rates,~~2018 were as follows (dollars in thousands):

	Three Months Ended March 31,				%
Sales Mix	2019		2018		Change

Hardware	$	748,337	$	873,341		(14	%)
Software		322,079		261,060		23	%
Services		172,025		143,979		19	%
	$	1,242,441	$	1,278,380		(3	%)

In North America, net sales ~~increased 47% compared~~of software and services were up 23% and 19%, respectively, year over year, while net sales of hardware declined 14% year to ~~the first quarter of last~~ year. The net changes year to year were the result of the following:

The decrease in hardware net sales was due primarily to lower sales of client devices, storage and networking solutions to large enterprise clients.

The increase in the software category was ~~driven~~primarily the result of a significant transaction during the current quarter with a large enterprise client with no comparable transaction in the same quarter in prior year.

The increase in services net sales was due to higher sales of cloud solutions and an increase in Insight delivered services, attributable to our acquisition of Cardinal.

Our net sales by ~~growth~~offering category for EMEA for the three months ended March 31, 2019 and the three months ended March 31, 2018 were as follows (dollars in ~~all offering categories, particularly a 58% increase~~thousands):

	Three Months Ended March 31,				%
Sales Mix	2019		2018		Change

Hardware	$	171,525	$	187,010		(8	%)
Software		183,148		190,202		(4	%)
Services		35,502		29,922		19	%
	$	390,175	$	407,134		(4	%)

In EMEA, net sales of hardware and software declined 8% and 4%, respectively, year to year, while net sales of services increased 19% year over year. The net changes year to year were the result of the following:

The decrease in hardware net sales was due primarily to lower volume sales of networking solutions to public sector clients.

The decrease in software net sales ~~year over year driven by growth with public sector clients.~~ was due to continued client migration of software applications to cloud solutions which are recorded net in services net sales.

The increase in services net sales was due primarily to a higher volume of software maintenance and cloud solutions, and a higher volume of Insight delivered services.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Our net sales by offering category for APAC for the three months ended March 31, ~~2018~~2019 and the three months ended March 31, ~~2017 (as reclassified),~~2018 were as follows (dollars in thousands):


	APAC
	2018		2017		% Change			Three Months Ended March 31,				%
Sales Mix			(As Reclassified)					2019		2018		Change

Hardware	$	7,160	$	4,080		75	%	$	6,518	$	7,160		(9	%)
Software		39,250		24,847		58	%		35,065		39,019		(10	%)
Services		8,680		7,309		19	%		11,267		10,801		4	%
								$	52,850	$	56,980		(7	%)
	$	55,090	$	36,236		52	%

In APAC, ~~fees earned from activities reported on a~~ net ~~basis~~sales of ~~$2,000 and $2.2 million that were previously reported as part of our~~ hardware and software ~~product categories,~~declined 9% and 10%, respectively, year to year, partially offset by an increase in services net sales of 4%, year over year. The net changes year to year were the ~~three months ended March 31, 2017, were reclassified~~result of the following:

The decrease in hardware and software net sales was due primarily to lower volume with enterprise and public sector clients.

The increase in services net sales was due to ~~conform to the current period presentation.~~higher sales of cloud solutions and an increase in Insight delivered services.

The percentage of net sales by category for North America, EMEA and APAC were as follows for the three months ended March 31, ~~2018~~2019 and the three months ended March 31, ~~2017 (as reclassified):~~2018:

   North America EMEA APAC
   Three Months
Ended
March 31, Three Months
Ended
March 31, Three Months
Ended
March 31,
Sales Mix
   2018 2017 2018 2017 2018 2017
Hardware
   67 % 64 % 47 % 42 % 13 % 11 %
Software
   22 % 25 % 46 % 51 % 71 % 69 %
Services
   11 % 11 % 7 % 7 % 16 % 20 %


   100 % 100 % 100 % 100 % 100 % 100 %

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

	North America						EMEA						APAC
	Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,
Sales Mix	2019			2018			2019			2018			2019			2018
Hardware		60	%		68	%		44	%		46	%		12	%		13	%
Software		26	%		21	%		47	%		47	%		67	%		68	%
Services		14	%		11	%		9	%		7	%		21	%		19	%
		100	%		100	%		100	%		100	%		100	%		100	%

Gross Profit. Gross profit ~~for~~increased 3%, or $8.2 million, in the three months ended March 31, ~~2018 increased 15%, or $31.8 million,~~2019, compared to the three months ended March 31, ~~2017,~~2018, with gross margin ~~decreasing~~increasing approximately 5090 basis points to ~~13.6%~~14.7% for the three months ended March 31, 2019 compared to 13.8% for the three months ended March 31, 2018 compared to 14.1% for the three months ended March 31, 2017. Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit increased 12% year over year in the first quarter of 2018 compared to the first quarter of 2017.2018. Our gross profit and gross profit as a percentage of net sales by operating segment were as follows for the three months ended March 31, ~~2018~~2019 and ~~2017~~2018 (dollars in thousands):


	Three Months Ended March 31,										Three Months Ended March 31,
	2018		% of Net Sales			2017		% of Net Sales			2019		% of Net Sales			2018		% of Net Sales
North America	$	175,371		13.4	%	$	158,301		14.2	%	$	182,607		14.7	%	$	175,371		13.7	%
EMEA		55,792		13.9	%		42,546		12.9	%		56,983		14.6	%		56,050		13.8	%
APAC		8,842		16.1	%		7,380		20.4	%		8,882		16.8	%		8,842		15.5	%

Consolidated	$	240,005		13.6	%	$	208,227		14.1	%	$	248,472		14.7	%	$	240,263		13.8	%

North America’s gross profit for the three months ended March 31, ~~2018~~2019 increased ~~11%~~$7.2 million, or 4%, compared to the three months ended March 31, 2017. As a percentage of net sales, gross margin decreased approximately 80 basis points to 13.4% for the first quarter of 2018 from 14.2% in the first quarter of 2017. The year to year decline in gross margin was primarily attributable to a 38 basis point decline in margin generated by services net sales, including reduced sales from technical services projects, which was offset partially by an increase in margin resulting from a higher volume of software maintenance and cloud subscription products that are recorded on a net basis, during the first quarter of 2018. Additionally, a net decrease in product margin, which includes partner funding and freight, of 28 basis points and a decrease in margin from lower fees from enterprise software agreements of 17 basis points contributed to the lower gross margin during the quarter ended March 31, 2018 compared to the quarter ended March 31, 2017. The net decrease in product margin was due primarily to higher hardware sales to large enterprise clients, which generally transact at lower margins, during the quarter ended March 31, 2018 compared to the quarter ended March 31, 2017.

EMEA’s gross profit increased 31% for the three months ended March 31, 2018 compared to the three months ended March 31, 2017. Excluding the effects of fluctuating foreign currency exchange rates, gross profit increased 16% compared to the first quarter of last year. As a percentage of net sales, gross margin increased approximately 100 basis points to ~~13.9%~~ 14.7% for the first quarter of 2018 from 12.9% in the first quarter of 2017. The year over year improvement in gross margin was primarily attributable to a net increase in product margin, which includes partner funding and freight, of 73 basis points and an increase in higher margin services net sales, which contributed 56 basis points of the margin expansion during the three months ended March 31, 2018 compared to the three months ended March 31, 2017. The improvement in product margin primarily resulted from an increase in partner funding in both hardware and software during the quarter ended March 31, 2018 compared to the quarter ended March 31, 2017. The increase in partner funding was primarily due to changes to certain partner programs. As a result of the changes, certain incentives, which would normally be earned over the full year, were accelerated and were fully earned in the first quarter of 2018. The increase in margin from services net sales during the quarter ended March 31, 2018 compared to the quarter ended March 31, 2017 resulted from a higher volume of software maintenance and cloud subscription products that are recorded on a net basis.2019.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

The year over year improvement in gross margin was primarily attributable to the following:

~~APAC’s gross profit increased 20% for~~An increase in higher margin services net sales, which contributed 152 basis points of the ~~three months ended March 31, 2018~~margin expansion, partially offset by a net decrease in product margin, which includes partner funding and freight, of 54 basis points.

The increase in margin from services net sales during the current quarter resulted from a higher volume of Insight delivered services and a higher volume of cloud solutions that are recorded net.

The decrease in product margin is primarily the result of a reduction in partner funding due to lower hardware sales in the current quarter compared to the three months ended March 31, 2017, with gross margin decreasing to 16.1% for the three months ended March 31, 2018 compared to 20.4% for the three months ended March 31, 2017. Excluding the effects of fluctuating foreign currency exchange rates, gross profit increased 16% compared to the first quarter of last year. The decrease in gross marginsame period in the ~~first quarter of 2018 compared to the first quarter of 2017 was due primarily to lower services sales during the three months ended March 31, 2018 compared to the three months ended March 31, 2017.~~prior year.

~~Operating Expenses.~~

~~Selling and Administrative Expenses.~~Selling and administrative expenses increased $10.5 million, or 6%, for the three months ended March 31, 2018 compared to the three months ended March 31, 2017. Excluding the effects of fluctuating foreign currency exchange rates, consolidated selling and administrative expenses increased 3% year over year in the first quarter of 2018 compared to the first quarter of 2017. Our selling and administrative expenses as a percent of net sales by operating segment were as follows for the three months ended March 31, 2018 and 2017 (dollars in thousands):

   Three Months Ended March 31,
   2018    % of
Net
Sales 2017    % of
Net
Sales
North America
   $ 132,640    10.1 % $ 131,010    11.7 %
EMEA
   48,283    12.1 % 40,143    12.2 %
APAC
   7,257    13.2 % 6,479    17.9 %





Consolidated
   $ 188,180    10.7 % $ 177,632    12.0 %

North America’s selling and administrative expenses increased 1%, or $1.6 million, for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 and decreased approximately 160 basis points year to year as a percentage of net sales to 10.1%. The increase in expenses was primarily driven by a $3.0 million increase in salaries and wages, contract labor and teammate benefits expenses and a $2.4 million increase in variable compensation on increased sales andEMEA’s gross profit for the three months ended March 31, 2018 increased $933,000, or 2% (9% excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31, ~~2017. These increases~~2018. As a percentage of net sales, gross margin increased approximately 80 basis points, year over year. The year over year improvement in ~~teammate expenses~~gross margin was primarily ~~resulted from~~attributable to an increase in ~~headcount. Partially offsetting these increases~~higher margin services net sales, which contributed 138 basis points of the margin expansion, partially offset by a net decrease in ~~teammate expenses were decreases in depreciation~~product margin, which includes partner funding and ~~amortization expense~~freight, of ~~$1.9 million and other general and administrative expenses of $1.1 million~~55 basis points.

APAC’s gross profit for the three months ~~ended~~ March 31, ~~2018~~2019 remained flat compared to the three months ended March 31, ~~2017.~~2018. As a percentage of net sales, gross margin increased approximately 130 basis points, year over year. The increase in gross margin in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to an increase in mix of sales of software maintenance and cloud solutions recorded net and higher gross profits from Insight delivered services.

~~EMEA’s~~

Operating Expenses.

Selling and Administrative Expenses. Selling and administrative expenses increased $2.9 million, or 2%, for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. Our selling and administrative expenses ~~increased 20%, or $8.1 million,~~by major expense type for the three months ended March 31, 2019 and 2018 ~~compared to the three months ended March 31, 2017 but decreased~~were as follows (dollars in thousands):

	Three Months Ended March 31,
	2019		2018
Personnel costs, including teammate benefits	$	150,491	$	147,836
Depreciation and amortization		8,867		9,044
Facility expenses		6,663		6,591
Travel and entertainment		6,246		6,128
Legal and professional fees		3,942		4,033
Marketing		2,322		2,644
Other		12,532		11,904
Total	$	191,063	$	188,180

Selling and administrative expenses increased approximately 1050 basis points ~~year to year~~ as a percentage of net sales ~~to 12.1%. Excluding~~in the ~~effects~~first quarter of ~~fluctuating foreign currency exchange rates, selling and administrative expenses increased 6%~~2019 compared to the first quarter of ~~last year.~~2018. The overall net increase in selling and administrative expenses ~~was primarily driven by an~~reflects a $2.7 million increase in ~~salaries and wages and~~personnel costs, including teammate benefits expenses primarily due to increased headcount, including the acquisition of Cardinal, and ~~an increase in~~increased variable compensation onresulting from increased ~~sales and~~ gross profit ~~for~~in the ~~three months ended March 31, 2018 compared to the three months ended March 31, 2017.~~

APAC’s selling and administrative expenses increased 12%, or $778,000, for the three months ended March 31, 2018 compared to the three months ended March 31, 2017, and decreased approximately 470 basis points year to year as a percentagefirst quarter of ~~net sales to 13.2%. Excluding the effects of fluctuating foreign currency exchange rates, selling and administrative expenses increased 8%~~2019 compared to the first quarter of last year. The year over year increase was primarily driven by our investment in resources related to the planned expansion of the business technology consulting and managed services business we acquired with the Ignia, Pty Ltd transaction in 2016.2018.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Severance and Restructuring Expenses. During the three months ended March 31, 2019, we recorded severance expense, net of adjustments, of approximately $370,000. The charges in all three operating segments primarily related to a realignment of certain roles and responsibilities. Current period charges were partially offset by adjustments for changes in estimates of previous accruals as cash payments were made. Comparatively, during the three months ended March 31, 2018, North America, EMEA and APAC recorded severance expense, net of adjustments, of approximately $443,000, $1.1 million and $127,000, respectively. The charges in all three operating segments primarily related to a realignment of certain roles and responsibilities. Current period charges were offset by adjustments for changes in estimates of previous accruals as cash payments were made. Comparatively, during the three months ended March 31, 2017, North America, EMEA and APAC recorded severance expense, net of adjustments, of approximately $1.1 million, $3.5 million and $61,000, respectively.

~~Acquisition-related Expenses~~. During the three months ended March 31, 2018, we did not incur any direct third-party transaction costs related to business acquisitions. Comparatively, during the three months ended March 31, 2017, we incurred $2.9 million in direct third-party transaction costs related to the acquisition of Datalink in January 2017.

Non-Operating (Income) Expense.

Interest Income. Interest income for the three months ended March 31, ~~2018~~2019 and ~~2017~~2018 was generated from interest earned on cash and cash equivalent bank balances. The ~~decrease~~increase in interest income ~~for~~year over year was primarily due to higher average interest-bearing cash and cash equivalent balances and to higher interest rates during the three months ended March 31, ~~2018~~2019 compared to the three months ended March 31, ~~2017 was primarily due to lower average interest-bearing cash and cash equivalent balances during the three months ended March 31,~~ 2018.

Interest Expense. Interest expense primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facility. Interest expense for the three months ended March 31, ~~2018 increased 53%~~2019 decreased 20%, or ~~$2.1~~$1.2 million, compared to the three months ended March 31, ~~2017. This increase~~2018. The decrease was due primarily to ~~higher interest rates and higher~~lower average daily balances on our debt facilities in ~~2018 to fund working capital needs given~~ the ~~growth in our business year over year.~~first quarter of 2019 partially offset by higher interest rates. Imputed interest under our inventory financing facility was $3.0 million for the three months ended March 31, 2019 compared to $2.5 million for the three months ended March 31, ~~2018, compared to $1.4 million for the three months ended March 31, 2017.~~2018. The increase was a result of ~~expanded use of the facility and~~ a higher average incremental borrowing rate used to compute the imputed interest amounts during the ~~2018 period.~~first quarter of 2019. For a description of our various financing facilities, see Note 45 to our Consolidated Financial Statements in Part I, Item 1 of this report.

Net Foreign Currency Exchange Gains/Losses. These gains/losses result from foreign currency transactions, including foreign currency derivative contracts and intercompany balances that are not considered long-term in nature. The change in net foreign currency exchange gains/losses is due primarily to the underlying changes in the applicable exchange rates, partially mitigated by our use of foreign exchange forward contracts to offset the effects of fluctuations in foreign currencies on certain of ournon-functional currency assets and liabilities.

Other Expense, Net. Other expense, net, consists primarily of bank fees associated with our cash management activities.

Income Tax Expense. Our effective tax rate of ~~26.0%~~23.5% for the three months ended March 31, 2019 was lower than our effective tax rate of 25.9% for the three months ended March 31, 2018 ~~was relatively comparable~~due primarily to ~~our effective~~an increase in tax ~~rate~~benefits on the settlement of ~~26.2%~~employee share-based awards and the recognition of tax benefits related to research and development activities for the three months ended March 31, ~~2017. Our effective tax rate for~~2019 compared to the first quarter of 2018 reflects the reduction in the United States federal statutory rate to 21.0% and state income taxes, net of federal benefit. Our effective tax rate for the first quarter of last year includes tax benefits of approximately $2.0 million recorded on the settlement of employee share-based awards in accordance with a newthree months ended March 31, 2018.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

accounting standard, which was adopted effective January 1, 2017, and the recognition of certain tax benefits related to the release of reserves for specific uncertain tax positions during the prior year first quarter, both of which served to reduce the rate below the federal statutory rate at that time.

Liquidity and Capital Resources

The following table sets forth certain consolidated cash flow information for the three months ended March 31, ~~2018~~2019 and ~~2017~~2018 (in thousands):

   Three Months Ended
March 31,
   2018    2017
Net cash provided by (used in) operating activities
   $ 150,745    $ (152,102 )
Net cash used in investing activities
   (5,044 )    (190,911 )
Net cash (used in) provided by financing activities
   (153,232 )    318,132
Foreign currency exchange effect on cash, cash equivalent and restricted cash balances
   1,937    5,820




Decrease in cash, cash equivalents and restricted cash
   (5,594 )    (19,061 )
Cash, cash equivalents and restricted cash at beginning of period
   107,445    205,946




Cash, cash equivalents and restricted cash at end of period
   $ 101,851    $ 186,885

	Three Months Ended March 31,
	2019			2018
Net cash provided by operating activities	$	121,913		$	150,745
Net cash used in investing activities		(6,114	)		(5,044	)
Net cash used in financing activities		(132,640	)		(153,232	)
Foreign currency exchange effect on cash, cash equivalent and restricted cash balances		(986	)		1,937
Increase in cash, cash equivalents and restricted cash		(17,827	)		(5,594	)
Cash, cash equivalents and restricted cash at beginning of period		144,293			107,445
Cash, cash equivalents and restricted cash at end of period	$	126,466		$	101,851

Cash and Cash Flow

Our primary uses of cash during the three months ended March 31, ~~2018~~2019 were to pay down our debt balances ~~to repurchase shares of our common stock~~ and for capital expenditures, as well as funding our working capital ~~requirements throughout the quarter.~~ requirements.

Operating activities provided ~~$150.7~~$121.9 million in cash during the three months ended March 31, ~~2018,~~2019, compared to ~~$152.1~~$150.7 million ~~of cash used in operating activities~~ during the three months ended March 31, 2017. The 2017 results were affected by a significant transaction at the beginning of the prior year period, whereby a single significant payment to a supplier was due and paid in January 2017, but the related receivable was collected from a client in the fourth quarter of 2016, as discussed in more detail below. During the three months ended March 31, 2018, we2018.

We had net repayments under our inventory financing facility of ~~$91.4 million, compared to net repayments under the facility of $4.2~~$44.0 million during the three months ended March 31, ~~2017.~~ 2019, compared to net repayments of $91.4 million during the three months ended March 31, 2018.

We ~~also~~ had combined net repayments under our revolving facility and ABS facility that decreased our outstanding long-term debt by ~~$49.8 million, including scheduled amortization payments under our Term Loan A (“TLA”).~~ $82.0 million.

Capital expenditures were ~~$5.0~~$5.4 million in the three months ended March 31, 2018, a decrease of 50% compared to the total capital expenditures made in the prior year period. The prior year period reflected higher capital expenditures due to planned investments in IT infrastructure upgrades, our global web site and our digital marketing platforms. 2019.

Cash, cash equivalents and restricted cash balances in the three months ended March 31, 2019 were negatively affected by $1.0 million, while the balances in the three months ended March, 31 2018 ~~and 2017~~ were positively affected by $1.9 million, ~~and $5.8 million, respectively,~~ as a result of foreign currency exchange rates.

We expect that cash flows from operations, together with the funds available under our financing facilities, will be adequate to support our presently anticipated cash and working capital requirements for operations ~~as well as other strategic investments~~ over the next 12 months.

Net cash provided by operating activities

Cash flow from operating activities in the first three months of 2019 was $121.9 million compared to $150.7 million in the first three months of 2018.

The decrease in accounts receivable and accounts payable reflects our continued enhanced focus on collection of receivables and optimization of working capital.

The significant increases in both other assets and accrued expenses and other liabilities for the three months ended March 31, 2019 resulted from a single significant transaction in 2019 with no comparable activity in the prior year.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

~~Net cash provided by (used in) operating activities.~~ ~~Cash flows from operating activities for the three months ended March 31, 2018 and 2017 reflect our net earnings, adjusted fornon-cash~~ items such as depreciation, amortization, stock-based compensation expense and write-offs and write-downs of assets, as well as changes in asset and liability balances. In both periods, exclusive of the acquisition of Datalink’s accounts receivable balances and the assumption of Datalink’s accounts payable balances during the 2017 period, we anticipated the cash inflows from decreases in accounts receivable and cash outflows from decreases in accounts payable due to the seasonal changes in net sales from the fourth quarter to the first quarter. However, the 2017 results were also affected by a single significant payment to a supplier of approximately $160 million that was due and paid in January 2017 for which the related receivable was collected from the client in the fourth quarter of 2016, as noted previously. Excluding the effects of this individually significant timing difference, cash flow from operations would have been nominal for the first quarter of 2017. Further impacting our year over year operating cash flows comparison was the fact that we report cash flows associated with trade payables financed under our inventory financing facility in the financing section of our statement of cash flows. In the fourth quarter of 2017, we expanded the use of that facility with certain vendors and subsequently paid down those balances under their stated terms during the first quarter of 2018. Had we not leveraged the facility during the fourth quarter of 2017, the net repayment under our inventory financing facility of $91.4 million that are reflected as cash flows used in financing activities would have been included within the change in trade payables, which is reflected in the operating activities section of our statement of cash flows. For the prior year period, the increase in inventories was primarily attributable to an increase in inventory levels at March 31, 2017 to support specific large enterprise client engagements. The increase in other assets for the three months ended March 31, 2018 was a result of the change in accounting under the new revenue recognition standard, which resulted in accelerated revenue recognition for certain contracts with payment terms that exceed one year. As a result, we recorded a related long-term receivable within other assets in the accompanying consolidated balance sheet as of March 31, 2018. See Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Our consolidated cash flow operating metrics were as follows:

   Three Months Ended
March 31,
   2018    2017
Days sales outstanding in ending accounts receivable (“DSOs”)^(a)
   89    85
Days inventory outstanding (“DIOs”)^(b)
   12    11
Days purchases outstanding in ending accounts payable (“DPOs”)^(c)
   (66 )    (67 )




Cash conversion cycle (days)^(d)
   35    29

	Three Months Ended March 31,
	2019			2018
Days sales outstanding in ending accounts receivable (“DSOs”) ^(a)		92			91
Days inventory outstanding (“DIOs”) ^(b)		11			12
Days purchases outstanding in ending accounts payable (“DPOs”) ^(c)		(73	)		(67	)
Cash conversion cycle (days) ^(d)		30			36

~~(a)~~

(a)

Calculated as the balance of current accounts receivable, net at the end of the quarter divided by daily net sales. Daily net sales is calculated as net sales for the quarter divided by 90 days.

~~(b)~~

(b)

Calculated as average inventories (excluding inventories not available for sale) divided by daily costs of goods sold. Average inventories is calculated as the sum of the balances of inventories at the beginning of the quarter plus inventories at the end of the quarter divided by two. Daily costs of goods sold is calculated as costs of goods sold for the quarter divided by 90 days.

~~(c)~~

(c)

Calculated as the sum of the balances of accounts payable – trade and accounts payable – inventory financing facility at the end of the quarter divided by daily costs of goods sold. Daily costs of goods sold is calculated as costs of goods sold for the quarter divided by 90 days.

~~(d)~~

(d)

Calculated as DSOs plus DIOs, less DPOs.

Our cash conversion cycle was 3530 days in the first quarter of ~~2018, up 6~~2019, down six days from the first quarter of ~~2017.~~ 2018.

The ~~increase~~decrease resulted from the net effect of a ~~four~~one day increase in DSOs and a ~~one~~six day ~~decrease~~increase in DPOs due to the relative timing of client receipts and supplier payments during the respective ~~quarters and~~quarters.

This was partially offset by a one day ~~increase~~decrease in ~~DIOs~~DIO due to ~~investment in~~delivering inventory ~~for~~against client specific ~~client engagements. These operating metrics include the effects of the adoption of the new revenue recognition standard effective January 1, 2018, resulting in a higher current accounts~~engagements and an overall focus on minimizing inventory on hand.

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

receivable balance at March 31, 2018 compared to March 31, 2017. These accounting adjustments did not have a comparable increase in net sales due to the high volume of sales reported on a net basis, thus negatively affecting the DSO metric for the three months ended March 31, 2018.

We expect that cash flow from operations will be used, at least partially, to fund working capital as we typically pay our partners on average terms that are shorter than the average terms we grant to our clients ~~in order~~ to take advantage of supplier discounts. We intend to use cash generated in the remainder of ~~2018~~2019 in excess of working capital needs to pay down our debt balances, to repurchase shares of our common stock and to support our capital expenditures for the year. We also may use cash to fund potential acquisitions to add select capabilities within our current geographic operating segments.

Net cash used in investing activities.

Capital expenditures were ~~$5.0~~$5.4 million and ~~$10.1~~$5.0 million for the three months ended March 31, 2019 and 2018, ~~and 2017,~~ respectively.

We expect capital expenditures for the full year ~~2018~~2019 to be between ~~$15.0~~$20.0 million and ~~$20.0~~$25.0 million, primarily for technology-related upgrade projects.

Net cash used in financing activities

During the three months ended March 31, ~~2017,~~2019, we ~~acquired Datalink in North America for approximately $180.9 million,~~had net ~~of cash~~combined repayments under our revolving facility and ~~cash equivalents acquired.~~

~~Net cash provided~~our ABS facility that decreased our outstanding long-term debt balance by ~~financing activities~~~~. During~~$82.0 million. Comparatively, during the three months ended March 31, 2018, we had net combined repayments under our revolving credit facility and our ABS facility that decreased our outstanding long-term debt balance by $49.8 million, including scheduled amortization payments under our TLA.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

•

We ~~also~~ had net repayments under our inventory financing facility of $44.0 million during the three months ended March 31, 2019 compared to $91.4 million during the three months ended March 31, 2018.

During the three months ended March 31, ~~2018,~~2019 we ~~also~~did not repurchase any shares of our common stock. We repurchased an aggregate of $7.7 million of our common stock under a previously announced repurchase ~~program. Comparatively,~~program during the three months ended March 31, 2017, we had net combined borrowings on our long-term debt under our revolving facility and our ABS facility that increased our outstanding debt balance by $331.5 million, including the expansion of our revolving facility by $175.0 million in the form of an incremental TLA to fund, in part, the acquisition of Datalink, and had net repayments under our inventory financing facility of $4.2 million. During the three months ended March 31, 2017, we did not repurchase any shares of our common stock.2018.

Financing Facilities

The maximum leverage ratio is calculated as aggregate debt outstanding divided by the sum of the Company’s trailing twelve month net earnings (loss) plus (i) interest expense, excludingnon-cash imputed interest on our inventory financing facility, (ii) income tax expense (benefit), (iii) depreciation and amortization,(iv) non-cash stock-based compensation, (v) extraordinary or~~non-recurringnon-cash~~ non-recurring non-cash losses or expenses and (vi) certain cash restructuring and acquisition-related charges and synergies, not to exceed a specified cap (“adjusted earnings”).

The maximum leverage ratio permitted under the facilities is currently ~~3.25~~3.0 times our trailing twelve-month adjusted earnings. ~~We anticipate that we will be in compliance with our maximum leverage ratio requirements over the next four quarters. However, a~~

A significant drop in the Company’s adjusted earnings would limit the amount of indebtedness that could be outstanding at the end of any fiscal quarter to a level that would be below the Company’s consolidated maximum facility amount. We anticipate that we will be in compliance with our maximum leverage ratio requirements over the next four quarters.

Based on the maximum permitted leverage ratio as of March 31, ~~2018,~~2019, the Company’s debt balance that could have been outstanding under our revolving facility ~~TLA~~ and ABS facility was the full amount of the maximum borrowing capacity of ~~$763.0~~$600.0 million, of which ~~$2.0~~$112.0 million was outstanding under the ABS facility and no amount was outstanding under our revolving facility ~~$163.0 million was outstanding under our TLA and $94.0 million was outstanding under our ABS facility~~ at March 31, ~~2018. Additionally, while~~2019.

While our ABS facility has a stated maximum amount, the actual availability under the ABS facility is limited by the quantity and quality of the underlying accounts receivable. As of March 31, ~~2018,~~2019, qualified receivables were sufficient to permit access to the full $250.0 million under the ABS facility.

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

Our debt balance as of March 31, ~~2018~~2019 was ~~$261.9~~$114.4 million, including our ~~capital~~finance lease obligations for certain IT equipment and other financing obligations. As of March 31, 2018, the current portion of our long-term debt includes $14.2 million in amortization payments due through March 31, 2019 under our TLA. The remaining $2.2 million of current debt relates to our capital leases and our other financing obligations acquired from Datalink.

Our objective is to pay our debt balances down while retaining adequate cash balances to meet overall business objectives.

Our revolving facility ~~our TLA~~ and our ABS facility contain various covenants customary for transactions of this type, including limitations on the payment of dividends and the requirement that we comply with maximum leverage and minimum fixed charge ratio requirements, comply with a minimum receivable requirement and meet monthly, quarterly and annual reporting requirements.

If we fail to comply with these covenants, the lenders would be able to demand payment within a specified time period. At March 31, ~~2018,~~2019, we were in compliance with all such covenants. ~~Further, the terms of the ABS facility identify various circumstances that would result in an “amortization event” under the facility. At March 31, 2018,~~

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

•

The terms of the ABS facility identify various circumstances that would result in an “amortization event” under the facility. At March 31, 2019, no such “amortization event” had occurred.

We also have an agreement with a financial intermediary to facilitate the purchase of inventory from various suppliers under certain terms and conditions.

These amounts are classified separately as accounts payable – inventory financing facility in our consolidated balance sheets.

Our inventory financing facility ~~was amended on March 23, 2018 to increase the~~has an aggregate availability for vendor purchases ~~under our inventory financing facility from $325.0 million to~~of $400.0 million, of which ~~$228.1~~$260.2 million was outstanding at March 31, 2018. In conjunction with the increase in the aggregate availability under the facility, we no longer have the option to request additional increases in the aggregate amount available under the inventory financing facility without amending the facility. 2019.

The inventory financing facility matures on June 23, 2021 and may be renewed under certain circumstances described in the agreement for successive12-month periods.

Undistributed Foreign Earnings

Cash and cash equivalents held by foreign subsidiaries are generally subject to U.S. income taxation upon repatriation to the United States. As a result of the U.S. federal tax reform enacted in December 2017, all undistributed foreign earnings are deemed distributed. As of March 31, ~~2018,~~2019, we had approximately ~~$80.7~~$106.9 million in cash and cash equivalents in certain of our foreign subsidiaries. As of March 31, ~~2018,~~2019, the majority of our foreign cash resides in the Netherlands and ~~Australia.~~Canada. Certain of these cash balances will be remitted to the United States by paying down intercompany payables generated in the ordinary course of business or through actual dividend distributions.

Off-Balance Sheet Arrangements

We have entered intooff-balance sheet arrangements, which include indemnifications. The indemnifications are discussed in Note 910 to the Consolidated Financial Statements in Part I, Item 1 of this report and such discussion is incorporated by reference herein. We believe that none of ouroff-balance sheet arrangements have, or are reasonably likely to have, a material current or future effect on our business, financial condition or results of operations.

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

Recently Issued Accounting Standards

The information contained in Notes 1 and 2 to the Consolidated Financial Statements in Part I, Item 1 of this report concerning a description of recently issued accounting standards which affect or may affect our financial statements, including our expected dates of adoption and the estimated effects on our results of operations and financial condition, is incorporated by reference herein.

Contractual Obligations

There have been no material changes in our reported contractual obligations, as described under “Contractual Obligations” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in Part II, Item 7 of our Annual Report on Form10-K for the year ended December 31, ~~2017.~~2018.

INSIGHT ENTERPRISES, INC.

Item 3. Quantitative and ~~Qualitative~~Qualitative Disclosures About Market Risk.

There have been no material changes in our reported market risks, as described in “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report on Form10-K for the year ended December 31, ~~2017.~~2018.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, as of the end of the period covered by this report, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined underRules 13a-15(e) ~~and15d-15(e)~~and 15d-15(e) of the Securities Exchange ~~Act)~~Act of 1934, as amended (the “Exchange Act”)) and determined that as of March 31, ~~2018~~2019 our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Change in Internal Control over Financial Reporting

~~Except as noted below, there~~

There was no change in ~~our~~the Company’s internal control over financial reporting (as such term is defined inRules 13a-15(f) ~~and15d-15(f)~~and 15d-15(f) under the Exchange Act) ~~during~~in the most recent fiscal quarter ~~ended March 31, 2018~~ that has materially affected, or is reasonably likely to materially affect, ~~our~~the Company’s internal control over financial reporting.

During the quarter ended March 31, 2018, we changed existing controls or developed new controls to ensure we adequately implemented the new accounting standard related to revenue recognition effective January 1, 2018. The modified and new controls were designed to address risks associated with recognizing revenue based on the five-step model provided in the new standard and to ensure completeness and accuracy of the expanded disclosures required by the new standard.

Inherent Limitations of Internal Control Over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

INSIGHT ENTERPRISES, INC.

Part II – ~~OTHER~~OTHER INFORMATION

Item 1. Legal Proceedings.

For a discussion of legal proceedings, see “– Legal Proceedings” in Note 910 to the Consolidated Financial Statements in Part I, Item 1 of this report, which section is incorporated by reference herein.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors”, in our Annual Report on Form10-K for the year ended December 31, ~~2017,~~2018, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or operating results.

~~INSIGHT ENTERPRISES, INC.~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of equity securities during the three months ended March 31, ~~2018.~~2019.

We have never paid a cash dividend on our common stock, and we currently do not intend to pay any cash dividends in the foreseeable future. Our revolving facility, our ABS facility ~~our TLA~~ and our inventory financing facility contain restrictions on the payment of cash dividends.

Issuer Purchases of Equity Securities

Period
   (a)
Total Number
of Shares
Purchased    (b)
Average Price
Paid per Share    (c)
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs    (d)
Approximate Dollar Value
of Shares that May
Yet Be Purchased Under
the Plans or Programs
January 1, 2018 through
      January 31, 2018
   —      $ —      —      $ —
February 1, 2018 through
      February 28, 2018
   —      —      —      50,000,000
March 1, 2018 through
      March 31, 2018
   221,256    34.71    221,256    42,321,000





Total
   221,256    $ 34.71    221,256

~~On February 14, 2018, we announced that our Board of Directors had authorized the~~We did not repurchase ~~of up to $50 million~~shares of our common ~~stock. Repurchases~~stock during the quarter ended March 31, ~~2018 are reflected in the table above. There is no stated expiration date for our current share repurchase plan. Any share repurchases may be made on the open market, through block trades, through10b5-1~~ plans or otherwise. The amount of shares purchased and the timing of the purchases will be based on market conditions, working capital requirements, general business conditions and other factors. We intend to retire the repurchased shares. All shares repurchased during the three months ended March 31, 2018 were retired.2019.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

INSIGHT ENTERPRISES, INC.

Item 6. ~~Exhibits.~~Exhibits.

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit
Number

Filing
Date

Filed
Herewith
3.1    Amended and Restated Certificate of Incorporation of Insight Enterprises, Inc.    10-K    000-25092    3.1    February 17, 2006
3.2    Certificate of Amendment of Amended and Restated Certificate of Incorporation of Insight Enterprises, Inc.    8-K    000-25092    3.1    May 21, 2015
3.3    Amended and Restated Bylaws of Insight Enterprises, Inc.    8-K    000-25092    3.2    May 21, 2015
4.1    Specimen Common Stock Certificate (P)    S-1    33-86142    4.1    January 20, 1995
10.1    Third Omnibus Amendment to Loan Documents and Reaffirmation Agreement, dated as of March 23, 2018, by and among Calence, LLC, Insight Direct USA, Inc. and Insight Public Sector, Inc., as Resellers, the guarantors party thereto, Wells Fargo Capital Finance, LLC, as collateral agent, syndication agent and administrative agent, and the lenders party thereto    8-K    000-25092    10.1    March 30, 2018
10.2    Amendment No. 2 to Fourth Amended and Restated Credit Agreement, dated as of March 13, 2018, by and among Insight Enterprises, Inc., Insight Enterprises B.V., Insight Direct (UK), Ltd., as borrowers, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto    8-K    000-25092    10.2    March 30, 2018
31.1    Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule13a-14                X
31.2    Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule13a-14                X
32.1    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                X
101    Interactive data files pursuant to Rule 405 ofRegulation S-T                X

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

File No.

Exhibit

Number

Filing

Date

Filed

Herewith

3.1

Amended and Restated Certificate of Incorporation of Insight Enterprises, Inc.

10-K

000-25092

3.1

February 17, 2006

3.2

Certificate of Amendment of Amended and Restated Certificate of Incorporation of Insight Enterprises, Inc.

8-K

000-25092

3.1

May 21, 2015

3.3

Amended and Restated Bylaws of Insight Enterprises, Inc.

8-K

000-25092

3.2

May 21, 2015

4.1

Specimen Common Stock Certificate (P)

S-1

33-86142

4.1

January 20, 1995

31.1

Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule 13a-14

31.2

Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14

32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

Interactive data files pursuant to Rule 405 of Regulation S-T

(P) Paper exhibit.

INSIGHT ENTERPRISES, INC.

~~SIGNATURES~~SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	May 1, 2019
~~Date: May 2, 2018~~		INSIGHT ENTERPRISES, INC.


~~By:~~
	By:	/s/ Kenneth T. Lamneck
		Kenneth T. Lamneck
		President and Chief Executive Officer
		(Duly Authorized Officer)


~~By:~~	By:	/s/ Glynis A. Bryan
			Glynis A. Bryan
			Chief Financial Officer
			(Principal Financial Officer)


~~By:~~	By:	/s/ ~~Dana~~Rachael A. ~~Leighty~~Bertrandt
		~~Dana~~	Rachael A. ~~Leighty~~Bertrandt
		~~Vice President, Finance~~	Global Corporate Controller
			(Principal Accounting Officer)

4135

Title of each class		Trading Symbol		Name of each exchange on which registered
Common stock, par value $0.01		NSIT		The NASDAQ Global Select Market


		Page

PART I – -		Financial Information


Item 1 –		Financial Statements:

		Consolidated Balance Sheets (unaudited) - March 31, ~~2018~~2019 and December 31, ~~2017~~2018			1

		Consolidated Statements of Operations (unaudited) - Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018			2

		Consolidated Statements of Comprehensive Income (unaudited) - Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018			3

		Consolidated Statements of Stockholders’ Equity (unaudited) – Three Months Ended March 31, 2019 and 2018		4

		Consolidated Statements of Cash Flows (unaudited) - Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018			4	5

		Notes to Consolidated Financial Statements (unaudited)			5
	6

Item 2 –		Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
	21

Item 3 –		Quantitative and Qualitative Disclosures About Market Risk			38
	32

Item 4 –		Controls and Procedures			38
	32
~~PART II – Other Information~~

PART II -		Other Information

Item 1 –		Legal Proceedings			38
	33

Item 1A –		Risk Factors			38
	33

Item 2 –		Unregistered Sales of Equity Securities and Use of Proceeds			39
	33

Item 3 –		Defaults Upon Senior Securities			39
	33

Item 4 –		Mine Safety Disclosures			39
	33

Item 5 –		Other Information			39	33

Item 6 –		Exhibits		34

~~Item 6 – Exhibits~~Signatures					40

~~Signatures~~			41	35

	Common Stock						Treasury Stock						Additional Paid-in			Accumulated Other Comprehensive			Retained			Total Stockholders'
	Shares			Par Value			Shares			Amount			Capital			Loss			Earnings			Equity
Balances at December 31, 2018		35,482			355			—			—			323,622			(41,653	)		704,665			986,989
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes		279			3			—			—			(6,131	)		—			—			(6,128	)
Stock-based compensation expense		—			—			—			—			4,115			—			—			4,115
Foreign currency translation adjustments, net of tax		—			—			—			—			—			1,915			—			1,915
Net earnings		—			—			—			—			—			—			39,327			39,327
Balances at March 31, 2019		35,761		$	358			—		$	—		$	321,606		$	(39,738	)	$	743,992		$	1,026,218


Balances at December 31, 2017		35,829			358			—			—			317,155			(24,264	)		550,220			843,469
Cumulative effect of accounting change		—			—			—			—			—			—			7,176			7,176
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes		240			2			—			—			(2,887	)		—			—			(2,885	)
Stock-based compensation expense		—			—			—			—			3,184			—			—			3,184
Repurchase of treasury stock		—			—			(221	)		(7,679	)		—			—			—			(7,679	)
Retirement of treasury stock		(221	)		(2	)		221			7,679			(1,959	)		—			(5,718	)		—
Foreign currency translation adjustments, net of tax		—			—			—			—			—			4,591			—			4,591
Net earnings		—			—			—			—			—			—			33,003			33,003
Balances at March 31, 2018		35,848		$	358			—		$	—		$	315,493		$	(19,673	)	$	584,681		$	880,859


	March 31, 2017		December 31, 2016
Cash and cash equivalents	$	183,709	$	202,882
Restricted cash included in other current assets		78		51
Restricted cash included in othernon-current assets		3,098		3,013

Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	186,885	$	205,946


	As Reported			Adjustments			Pre-Topic 606 Adoption
Cash and cash equivalents	$	100,237		$	—		$	100,237
Accounts receivable, net		1,751,321			(80,928	)		1,670,393
Inventories		194,743			—			194,743
Inventories not available for sale		645			65,470			66,115
Other current assets		119,404			34,790			154,194

Total current assets		2,166,350			19,332			2,185,682
Property and equipment, net		75,579			—			75,579
Goodwill		131,403			—			131,403
Intangible assets, net		97,158			—			97,158
Deferred income taxes		16,019			—			16,019
Other assets		85,902			(28,709	)		57,193

	$	2,572,411		$	(9,377	)	$	2,563,034

Accounts payable – trade	$	882,782		$	(27,199	)	$	855,583
Accounts payable – inventory financing facility		228,102			—			228,102
Accrued expenses and other current liabilities		175,147		��	(13,000	)		162,147
Current portion of long-term debt		16,358			—			16,358
Deferred revenue		70,955			65,146			136,101

Total current liabilities		1,373,344			24,947			1,398,291
Long-term debt		245,569			—			245,569
Deferred income taxes		672			—			672
Other liabilities		72,225			(26,269	)		45,956

		1,691,810			(1,322	)		1,690,488

Stockholders’ equity:
Preferred stock		—			—			—
Common stock		358			—			358
Additionalpaid-in capital		315,493			—			315,493
Retained earnings		584,423			(7,991	)		576,432
Accumulated other comprehensive loss – foreign currency translation adjustments		(19,673	)		(64	)		(19,737	)

Total stockholders’ equity		880,601			(8,055	)		872,546

	$	2,572,411		$	(9,377	)	$	2,563,034


	Increase (Decrease)
	Contract Assets			Contract Liabilities
Balances at January 1, 2018	$	595		$	86,743
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied		—			(19,473	)
Cash received in advance and not recognized as revenue		—			22,263
Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional		(395	)		—
Contract assets recognized, net of reclassification to receivables		840			—

Balances at March 31, 2018	$	1,040		$	89,533


	Number			Weighted Average Grant Date Fair Value		Fair Value
Nonvested at January 1, 2018		892,113		$	32.86
Granted^(a)		377,045			35.30
Vested, including shares withheld to cover taxes		(321,924	)		29.65	$	11,355,845	^(b)

Forfeited		(14,185	)		33.14

Nonvested at March 31, 2018^(a)		933,049			34.95	$	32,591,402	^(c)


	North America Three Months Ended March 31,				EMEA Three Months Ended March 31,				APAC Three Months Ended March 31,
Sales Mix	2018		2017		2018		2017		2018		2017
			(As Reclassified)				(As Reclassified)				(As Reclassified)
Hardware	$	873,341	$	710,864	$	187,010	$	138,877	$	7,160	$	4,080
Software		290,476		273,983		184,918		169,318		39,250		24,847
Services		143,581		126,105		28,487		22,160		8,680		7,309

	$	1,307,398	$	1,110,952	$	400,415	$	330,355	$	55,090	$	36,236

Large accelerated filer

Accelerated filer

Non-accelerated filer

~~(Do not check if a smaller reporting company) ☐~~

Smaller reporting company

Emerging growth company