CDW Corporation (NASDAQ:CDW) Q2 2018 Earnings Conference Call - Final Transcript
Aug 02, 2018 • 08:30 am ET
expect the cash tax rate in the 26% to 27% range to be applied to pretax book income before acquisition-related intangibles amortization, which is approximately $47 million per quarter. In addition, with the reduction in our tax rate, we expect to pay approximately $13 million in 2018 for tax related to the cancellation of debt income we incurred in 2009. 2018 is the final year of payments.
We continue to expect annual free cash flow to come in at the low end of our tax reform enhanced rule of thumb run rate between 3.75% and 4.25% of net sales. This reflects 2017's over-delivery of 50 basis points above our pretax reform rule of thumb due to timing and assumes we manage inventory in the ordinary course during the second half of 2018. Given 2017's over-delivery of free cash flow, we continue to expect to deploy cash in excess of 2018 free cash flow, and you should expect us to return this cash in order of our capital priorities.
That concludes the financial summary. With that, let's go ahead and open it up for questions. Can we please ask each of you to limit your questions to one with a brief follow-up. Operator, please provide the instructions for asking a question. Thank you.