Securities registered pursuant to Section 12(b) of the Act:
|
|
Title of each class
|
Name of each exchange on which registered
|
Common stock, $0.01 par value
|
New York Stock Exchange
|
Securities registered pursuant to Section 12(g) of the Act: None
|
Large accelerated filer
|
¨
|
|
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
(do not check if a small reporting company)
|
|
Smaller reporting company
|
¨
|
Emerging growth company
|
¨
|
|
|
|
|
|
|
Page
|
|
|
|
Part I
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
Part II
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
Part III
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
Part IV
|
|
|
Item 15.
|
||
Item 16.
|
||
|
|
|
•
|
Packaging
– The Packaging segment provides standard as well as custom and comprehensive packaging solutions for customers based in North America and in key global markets. The business is strategically focused on higher growth industries including light industrial/general manufacturing, food production, fulfillment and internet retail, as well as niche verticals based on geographical and functional expertise. Veritiv’s packaging professionals create customer value through supply chain solutions, structural and graphic packaging design and engineering, automation, workflow and equipment services and kitting and fulfillment.
|
•
|
Facility Solutions
– The Facility Solutions segment sources and sells cleaning, break-room and other supplies such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities primarily in the U.S., Canada and Mexico. Veritiv is a leading distributor in the Facility Solutions segment. Through this segment we manage a world class network of leading suppliers in most facilities solutions categories. Additionally, we offer total cost of ownership solutions with re-merchandising, budgeting and compliance reporting, inventory management, and a sales-force trained to bring leading vertical expertise to the major North American geographies.
|
•
|
Print
– The Print segment sells and distributes commercial printing, writing, copying, digital, wide format and specialty paper products, graphics consumables and graphics equipment primarily in the U.S., Canada and Mexico. This segment also includes customized paper conversion services of commercial printing paper for distribution to document centers and form printers. Our broad geographic platform of operations coupled with the breadth of paper and graphics products, including our exclusive private brand offerings, provides a foundation to service national, regional and local customers across North America.
|
•
|
Publishing
– The Publishing segment sells and distributes coated and uncoated commercial printing papers to publishers, retailers, converters, printers and specialty businesses for use in magazines, catalogs, books, directories, gaming, couponing, retail inserts and direct mail. This segment also provides print management, procurement and supply chain management solutions to simplify paper and print procurement processes for our customers.
|
•
|
Coated and uncoated papers, coated board and cut size under the Endurance, nordic+, Econosource, Comet, Starbrite Opaque Select and other brands;
|
•
|
Packaging products under the TUFflex brand, which include stretch film, mailers, shrink film, carton sealing tape, and other specialty tapes; and
|
•
|
Foodservice disposable products, cleaning chemicals, towels and tissues, can liners, sanitary maintenance supplies and a wide range of facility supplies products under the Reliable and Spring Grove brands.
|
•
|
Packaging
– The packaging market is fragmented and consists of competition from national and regional packaging distributors, national and regional manufacturers of packaging materials, independent brokers and both catalog-based and online business-to-business suppliers. Veritiv believes there are few national packaging distributors with substrate neutral design capabilities similar to the Company’s capabilities.
|
•
|
Facility Solutions
– There are few national, but numerous regional and local distributors of facility supply solutions. Several groups of distributors have created strategic alliances among multiple distributors to provide broader geographic coverage for larger customers. Other key competitors include the business-to-business divisions of big box stores, purchasing group affiliates and both catalog-based and online business-to-business suppliers.
|
•
|
Print
– Industry sources estimate that there are hundreds of regional and local companies engaged in the marketing and distribution of paper and graphics products. While the Company believes there are few national distributors of paper and graphics products similar to Veritiv, several regional and local distributors have cooperated together to serve customers nationally. The Company’s customers also have the opportunity to purchase products directly from paper and graphics manufacturers. In addition, competitors also include regional and local specialty distributors, office supply and big box stores, online business-to-business suppliers, independent brokers and large commercial printers that broker the sale of paper in connection with the sale of their printing services.
|
•
|
Publishing
– The publishing market is serviced by printers, paper brokers and distributors. The Company’s customers also have the opportunity to purchase paper directly from paper manufacturers. The market consists primarily of magazine and book publishers, cataloguers, direct mailers and retail customers using catalog, insert and direct mail as a method of advertising.
|
Name
|
|
Age
|
|
Position
|
Mary A. Laschinger
|
|
57
|
|
Chairman and Chief Executive Officer
|
Stephen J. Smith
|
|
54
|
|
Senior Vice President and Chief Financial Officer
|
Charles B. Henry
|
|
53
|
|
Senior Vice President Corporate Services
|
Mark W. Hianik
|
|
57
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
Thomas S. Lazzaro
|
|
54
|
|
Senior Vice President Field Sales and Operations
|
Barry R. Nelson
|
|
53
|
|
Senior Vice President Facility Solutions
|
Elizabeth A. Patrick
|
|
50
|
|
Senior Vice President and Chief Human Resources Officer
|
Tracy L. Pearson
|
|
47
|
|
Senior Vice President Packaging
|
Daniel J. Watkoske
|
|
49
|
|
Senior Vice President Print and Veritiv Services
|
•
|
limiting our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;
|
•
|
increasing our cost of borrowing;
|
•
|
requiring that a substantial portion of our cash flows from operations be dedicated to payments on our indebtedness instead of other purposes, including operations, capital expenditures and future business opportunities;
|
•
|
making it more difficult for us to make payments on our indebtedness or satisfy other obligations;
|
•
|
exposing us to risk of (i) increased interest rates on our borrowings in excess of our interest rate cap and (ii) increased interest rates of up to 3% on our borrowings covered by our interest rate cap because all of our borrowings under the ABL Facility are at variable rates of interest;
|
•
|
limiting our ability to make the expenditures necessary to complete the integration of xpedx’s business with Unisource’s business;
|
•
|
limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors that have less debt; and
|
•
|
increasing our vulnerability to a downturn in general economic conditions or in our business, and making us unable to carry out capital spending that is important to our growth.
|
•
|
incur additional indebtedness or guaranties, or issue certain preferred shares;
|
•
|
pay dividends, redeem stock or make other distributions;
|
•
|
repurchase, prepay or redeem subordinated indebtedness;
|
•
|
make investments or acquisitions;
|
•
|
create liens;
|
•
|
make negative pledges;
|
•
|
consolidate or merge with another company;
|
•
|
sell or otherwise dispose of all or substantially all of our assets;
|
•
|
enter into certain transactions with affiliates; and
|
•
|
change the nature of our business.
|
•
|
actual or anticipated fluctuations in the operating results of our company due to factors related to our business;
|
•
|
success or failure of the strategy of our company;
|
•
|
the quarterly or annual earnings of our company, or those of other companies in our industry;
|
•
|
continued industry-wide decrease in demand for paper and related products;
|
•
|
our ability to obtain third-party financing as needed;
|
•
|
announcements by us or our competitors of significant acquisitions or dispositions;
|
•
|
restrictions on our ability to pay dividends under our ABL Facility;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
the operating and stock price performance of other comparable companies;
|
•
|
investor perception of our company;
|
•
|
natural or environmental disasters that investors believe may affect our company;
|
•
|
overall market fluctuations;
|
•
|
a large sale of our stock by a significant shareholder;
|
•
|
results from any material litigation or government investigation;
|
•
|
changes in laws and regulations affecting our company or any of the principal products sold by our company; and
|
•
|
general economic and political conditions and other external factors.
|
•
|
authorize the issuance of "blank check" preferred stock that could be issued by our board of directors to thwart a takeover attempt;
|
•
|
limit the ability of shareholders to remove directors;
|
•
|
provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office;
|
•
|
prohibit shareholders from calling special meetings of shareholders unless called by the holders of not less than 20% of our outstanding shares of common stock;
|
•
|
prohibit shareholder action by written consent, unless initiated by the holders of not less than 20% of the outstanding shares of common stock;
|
•
|
establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our shareholders; and
|
•
|
require the approval of holders of at least a majority of the outstanding shares of our common stock to amend our by-laws and certain provisions of our charter.
|
|
Leased
|
|
Owned
|
|
Total
|
|||
Properties
|
160
|
|
|
10
|
|
|
170
|
|
Square feet (in millions)
|
18.1
|
|
|
1.3
|
|
|
19.4
|
|
|
|
2017
|
|
2016
|
||||||||||||
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
1st Quarter
|
|
$
|
62.60
|
|
|
$
|
48.95
|
|
|
$
|
39.23
|
|
|
$
|
27.44
|
|
2nd Quarter
|
|
$
|
53.25
|
|
|
$
|
39.30
|
|
|
$
|
42.25
|
|
|
$
|
34.10
|
|
3rd Quarter
|
|
$
|
45.40
|
|
|
$
|
26.85
|
|
|
$
|
52.49
|
|
|
$
|
37.05
|
|
4th Quarter
|
|
$
|
33.70
|
|
|
$
|
20.35
|
|
|
$
|
56.70
|
|
|
$
|
43.00
|
|
•
|
Anixter International Inc.
|
•
|
Genuine Parts Company
|
•
|
Resolute Forest Products Inc.
|
•
|
Applied Industrial Technologies, Inc.
|
•
|
Graphic Packaging Holding Company
|
•
|
ScanSource, Inc.
|
•
|
Arrow Electronics, Inc.
|
•
|
InnerWorkings Inc.
|
•
|
Sealed Air Corporation
|
•
|
Avery Dennison Corporation
|
•
|
International Paper Company
|
•
|
Sonoco Products Company
|
•
|
Avnet, Inc.
|
•
|
Kaman Corporation
|
•
|
Staples, Inc.
|
•
|
Bemis Company, Inc.
|
•
|
KapStone Paper and Packaging Corporation
|
•
|
W.W. Grainger, Inc.
|
•
|
Brady Corporation
|
•
|
MSC Industrial Direct Co. Inc.
|
•
|
WESCO International Inc.
|
•
|
Deluxe Corporation
|
•
|
Neenah Paper, Inc.
|
•
|
WestRock Company
|
•
|
Domtar Corporation
|
•
|
Office Depot, Inc.
|
|
|
•
|
Ennis Inc.
|
•
|
Packaging Corporation of America
|
|
|
•
|
Essendant Inc.
|
•
|
PH Glatfelter Company
|
|
|
•
|
Fastenal Company
|
•
|
R.R. Donnelley & Sons Company
|
|
|
(in millions, except per share data)
|
As of and for the Year Ended December 31,
|
||||||||||||||||||
Statements of Operations Data
|
2017
|
|
2016
|
|
2015
|
|
2014
(1)
|
|
2013
|
||||||||||
Net sales
|
$
|
8,364.7
|
|
|
$
|
8,326.6
|
|
|
$
|
8,717.7
|
|
|
$
|
7,406.5
|
|
|
$
|
5,652.4
|
|
Cost of products sold
|
6,846.6
|
|
|
6,826.4
|
|
|
7,160.3
|
|
|
6,180.9
|
|
|
4,736.8
|
|
|||||
Distribution expenses
|
516.9
|
|
|
505.1
|
|
|
521.8
|
|
|
426.2
|
|
|
314.2
|
|
|||||
Selling and administrative expenses
|
872.6
|
|
|
826.2
|
|
|
853.9
|
|
|
689.1
|
|
|
548.2
|
|
|||||
Depreciation and amortization
|
54.2
|
|
|
54.7
|
|
|
56.9
|
|
|
37.6
|
|
|
17.1
|
|
|||||
Acquisition, integration and merger expenses
|
36.5
|
|
|
25.9
|
|
|
34.9
|
|
|
75.1
|
|
|
—
|
|
|||||
Restructuring charges, net
|
16.7
|
|
|
12.4
|
|
|
11.3
|
|
|
4.0
|
|
|
37.9
|
|
|||||
Operating income (loss)
|
21.2
|
|
|
75.9
|
|
|
78.6
|
|
|
(6.4
|
)
|
|
(1.8
|
)
|
|||||
Income tax expense (benefit)
|
11.4
|
|
|
19.8
|
|
|
18.2
|
|
|
(2.1
|
)
|
|
0.4
|
|
|||||
Income (loss) from continuing operations
|
(13.3
|
)
|
|
21.0
|
|
|
26.7
|
|
|
(19.5
|
)
|
|
0.0
|
|
|||||
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||||
Net income (loss)
|
(13.3
|
)
|
|
21.0
|
|
|
26.7
|
|
|
(19.6
|
)
|
|
0.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share
(2)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.85
|
)
|
|
$
|
1.31
|
|
|
$
|
1.67
|
|
|
$
|
(1.61
|
)
|
|
$
|
0.00
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
0.02
|
|
|||||
Basic earnings (loss) per share
|
$
|
(0.85
|
)
|
|
$
|
1.31
|
|
|
$
|
1.67
|
|
|
$
|
(1.62
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.85
|
)
|
|
$
|
1.30
|
|
|
$
|
1.67
|
|
|
$
|
(1.61
|
)
|
|
$
|
0.00
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
0.02
|
|
|||||
Diluted earnings (loss) per share
|
$
|
(0.85
|
)
|
|
$
|
1.30
|
|
|
$
|
1.67
|
|
|
$
|
(1.62
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheets Data (at period end)
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable, net
|
$
|
1,174.3
|
|
|
$
|
1,048.3
|
|
|
$
|
1,037.5
|
|
|
$
|
1,115.1
|
|
|
$
|
669.7
|
|
Inventories
|
722.7
|
|
|
707.9
|
|
|
720.6
|
|
|
673.2
|
|
|
360.9
|
|
|||||
Total assets
|
2,708.4
|
|
|
2,483.7
|
|
|
2,476.9
|
|
|
2,574.5
|
|
|
1,256.9
|
|
|||||
Long-term debt, net of current maturities
|
908.3
|
|
|
749.2
|
|
|
800.5
|
|
|
855.0
|
|
|
—
|
|
|||||
Financing obligations, less current portion
|
181.6
|
|
|
176.1
|
|
|
197.8
|
|
|
212.4
|
|
|
—
|
|
|||||
Defined benefit pension obligations
|
24.4
|
|
|
27.6
|
|
|
28.7
|
|
|
36.3
|
|
|
—
|
|
|||||
Other non-current liabilities
|
137.0
|
|
|
121.2
|
|
|
105.6
|
|
|
107.2
|
|
|
12.5
|
|
•
|
Packaging
– The Packaging segment provides standard as well as custom and comprehensive packaging solutions for customers based in North America and in key global markets. The business is strategically focused on higher growth industries including light industrial/general manufacturing, food production, fulfillment and internet retail, as well as niche verticals based on geographical and functional expertise. Veritiv’s packaging professionals create customer value through supply chain solutions, structural and graphic packaging design and engineering, automation, workflow and equipment services and kitting and fulfillment.
|
•
|
Facility Solutions
– The Facility Solutions segment sources and sells cleaning, break-room and other supplies such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities primarily in the U.S., Canada and Mexico. Veritiv is a leading distributor in the Facility Solutions segment. Through this segment we manage a world class network of leading suppliers in most facilities solutions categories. Additionally, we offer total cost of ownership solutions with re-merchandising, budgeting and compliance reporting, inventory management, and a sales-force trained to bring leading vertical expertise to the major North American geographies.
|
•
|
Print
– The Print segment sells and distributes commercial printing, writing, copying, digital, wide format and specialty paper products, graphics consumables and graphics equipment primarily in the U.S., Canada and Mexico. This segment also includes customized paper conversion services of commercial printing paper for distribution to document centers and form printers. The Company's broad geographic platform of operations coupled with the breadth of paper and graphics products, including its exclusive private brand offerings, provides a foundation to service national, regional and local customers across North America.
|
•
|
Publishing
– The Publishing segment sells and distributes coated and uncoated commercial printing papers to publishers, retailers, converters, printers and specialty businesses for use in magazines, catalogs, books, directories, gaming, couponing, retail inserts and direct mail. This segment also provides print management, procurement and supply chain management solutions to simplify paper and print procurement processes for its customers.
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
Increase (Decrease) %
|
||||||||
Net sales
|
$
|
8,364.7
|
|
|
$
|
8,326.6
|
|
|
$
|
8,717.7
|
|
|
0.5
|
%
|
|
(4.5
|
)%
|
Cost of products sold (exclusive of depreciation and amortization shown separately below)
|
6,846.6
|
|
|
6,826.4
|
|
|
7,160.3
|
|
|
0.3
|
%
|
|
(4.7
|
)%
|
|||
Distribution expenses
|
516.9
|
|
|
505.1
|
|
|
521.8
|
|
|
2.3
|
%
|
|
(3.2
|
)%
|
|||
Selling and administrative expenses
|
872.6
|
|
|
826.2
|
|
|
853.9
|
|
|
5.6
|
%
|
|
(3.2
|
)%
|
|||
Depreciation and amortization
|
54.2
|
|
|
54.7
|
|
|
56.9
|
|
|
(0.9
|
)%
|
|
(3.9
|
)%
|
|||
Acquisition and integration expenses
|
36.5
|
|
|
25.9
|
|
|
34.9
|
|
|
40.9
|
%
|
|
(25.8
|
)%
|
|||
Restructuring charges, net
|
16.7
|
|
|
12.4
|
|
|
11.3
|
|
|
34.7
|
%
|
|
9.7
|
%
|
|||
Operating income
|
21.2
|
|
|
75.9
|
|
|
78.6
|
|
|
(72.1
|
)%
|
|
(3.4
|
)%
|
|||
Interest expense, net
|
31.2
|
|
|
27.5
|
|
|
27.0
|
|
|
13.5
|
%
|
|
1.9
|
%
|
|||
Other (income) expense, net
|
(8.1
|
)
|
|
7.6
|
|
|
6.7
|
|
|
(206.6
|
)%
|
|
13.4
|
%
|
|||
Income (loss) before income taxes
|
(1.9
|
)
|
|
40.8
|
|
|
44.9
|
|
|
(104.7
|
)%
|
|
(9.1
|
)%
|
|||
Income tax expense
|
11.4
|
|
|
19.8
|
|
|
18.2
|
|
|
(42.4
|
)%
|
|
8.8
|
%
|
|||
Net income (loss)
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
|
$
|
26.7
|
|
|
(163.3
|
)%
|
|
(21.3
|
)%
|
•
|
2017
compared to
2016
:
Net sales increased by
$38.1 million
, or
0.5%
, primarily due to the incremental net sales of $71.7 million resulting from the AAC acquisition. Increases in net sales in the Packaging and Facility Solutions segments as well as Veritiv's logistics solutions business were offset by declines in the Print and Publishing segments. See the “Segment Results” section for additional discussion.
|
•
|
2016
compared to
2015
:
Net sales declined by $391.1 million, or 4.5%, primarily due to declines in the Print and Publishing segments. See the “Segment Results” section for additional discussion.
|
•
|
2017
compared to
2016
:
Cost of products sold increased by
$20.2 million
, or
0.3%
, due to the growth in net sales as previously discussed. See the “Segment Results” section for additional discussion.
|
•
|
2016
compared to
2015
:
Cost of products sold decreased by $333.9 million, or 4.7%, primarily due to the decline in net sales as previously discussed. See the “Segment Results” section for additional discussion.
|
•
|
2017
compared to
2016
:
Distribution expenses increased by
$11.8 million
or
2.3%
. Distribution expenses increased $12.2 million from an increase in freight and logistics expenses, primarily due to increased third-party freight, transfer expenses and diesel fuel prices and $4.9 million related to the AAC acquisition. These increases were partially offset by (i) a $1.7 million decrease in facilities rent and other related expenses, (ii) a $1.5 million decrease in insurance expense and (iii) a $1.6 million decrease in personnel expenses as well as maintenance and material expense. The offsetting decreases were primarily driven by warehouse consolidations.
|
•
|
2016
compared to
2015
:
Distribution expenses decreased by $16.7 million or 3.2%. The decline was primarily due to (i) a $6.3 million decrease in facilities expenses due primarily to warehouse consolidations, (ii) a $5.9 million decrease in personnel costs due primarily to reductions in temporary employee expense and (iii) a $5.3 million decrease in vehicle operating expenses primarily driven by reductions in third-party freight expense and fuel.
|
•
|
2017
compared to
2016
:
Selling and administrative expenses increased by
$46.4 million
or
5.6%
. The increase was primarily attributed to (i) an $18.8 million increase in personnel expenses, (ii) a $13.3 million increase in bad debt expense and (iii) a $9.3 million increase related to the AAC acquisition. The increase in personnel expenses was primarily driven by an increase in headcount to support the Company's growth strategy as well as lower commissions in 2016 due to the recovery of commission advances, discussed below. The increase in bad debt expense was primarily due to additional reserves related to certain customers with declining financial conditions during 2017 combined with favorable collections experience in 2016. Selling and administrative expenses also included $8.4 million of impairment charges related to the impairment of the logistics solutions business goodwill and customer relationship intangible asset.
|
•
|
2016
compared to
2015
:
Selling and administrative expenses decreased by $27.7 million or 3.2%. The decrease was primarily attributed to (i) an $11.2 million decrease in commission expense due in part to lower net sales volume and (ii) a $13.6 million decrease in incentive compensation. In 2013, xpedx advanced funds to commissioned sales representatives to compensate them for a change in the timing of commission payments. During 2016, the Company recovered $6.0 million of those advances, which further reduced commission expense. These decreases were partially offset by $5.8 million of impairment charges attributable to the Print and Publishing segments' customer relationship intangible assets.
|
•
|
2017
compared to
2016
:
Depreciation and amortization expense decreased
$0.5 million
.
|
•
|
2016
compared to
2015
:
Depreciation and amortization expense decreased $2.2 million primarily due to $2.4 million of amortization for intangible assets acquired in the Merger that were fully amortized as of June 30, 2015.
|
•
|
2017
compared to
2016
:
Other (income) expense, net was income of $
8.1 million
in 2017 compared to expense of $
7.6 million
in 2016. The $15.7 million change is primarily the result of the Tax Cuts and Jobs Act (the "Tax Act") which lowered the U.S. corporate federal tax rate, from 35% to 21%. The lower rate reduced the value of the Tax Receivable Agreement liability by $13.5 million which was recorded as other income in the fourth quarter of 2017. See
Note 8
of the Notes to Consolidated Financial Statements for additional details regarding the Tax Act.
|
•
|
2016
compared to
2015
:
Other (income) expense, net increased $0.9 million compared to 2015. This increase was primarily driven by higher expenses associated with the Tax Receivable Agreement and a loss on debt extinguishment that were partially offset by lower expenses associated with foreign currency losses in 2016 compared to 2015.
|
•
|
A $30.2 million expense in connection with our provisional estimate of the impact of the Tax Act, including $23.0 million for the remeasurement of our deferred taxes and $7.2 million for the one-time transition tax. See
Note 8
of the Notes to Consolidated Financial Statements for additional details regarding the Tax Act.
|
•
|
A $13.4 million benefit for the reversal of the valuation allowance on the deferred tax assets of the Company’s Canadian subsidiary. The reversal reflects the Company’s cumulative recent income and improved expectation of future taxable income.
|
•
|
A $3.8 million tax rate benefit for the reduction in the fair value of the Tax Receivable Agreement, including the federal rate reduction.
|
•
|
A $3.1 million benefit in conjunction with the third quarter 2017 filing of Veritiv’s 2016 U.S. federal tax return and amended 2015 and 2014 U.S. federal tax returns for credits related to foreign taxes and research and experimentation activities.
|
•
|
A tax rate effect of $2.1 million for the impact of impairing non-deductible goodwill.
|
•
|
Does not reflect the Company’s income tax expenses or the cash requirements to pay its taxes; and
|
•
|
Although depreciation and amortization charges are non-cash charges, it does not reflect that the assets being depreciated and amortized will often have to be replaced in the future, and the foregoing metrics do not reflect any cash requirements for such replacements.
|
(in millions)
|
Packaging
|
|
Facility Solutions
|
|
Print
|
|
Publishing
|
|
Corporate & Other
|
||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,157.8
|
|
|
$
|
1,309.7
|
|
|
$
|
2,793.7
|
|
|
$
|
958.0
|
|
|
$
|
145.5
|
|
Adjusted EBITDA
|
$
|
238.0
|
|
|
$
|
35.5
|
|
|
$
|
60.8
|
|
|
$
|
26.4
|
|
|
$
|
(184.3
|
)
|
Adjusted EBITDA as a % of net sales
|
7.5
|
%
|
|
2.7
|
%
|
|
2.2
|
%
|
|
2.8
|
%
|
|
*
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,854.2
|
|
|
$
|
1,271.6
|
|
|
$
|
3,047.4
|
|
|
$
|
1,033.6
|
|
|
$
|
119.8
|
|
Adjusted EBITDA
|
$
|
221.2
|
|
|
$
|
47.0
|
|
|
$
|
76.8
|
|
|
$
|
23.6
|
|
|
$
|
(176.4
|
)
|
Adjusted EBITDA as a % of net sales
|
7.7
|
%
|
|
3.7
|
%
|
|
2.5
|
%
|
|
2.3
|
%
|
|
*
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,829.9
|
|
|
$
|
1,289.3
|
|
|
$
|
3,271.8
|
|
|
$
|
1,215.5
|
|
|
$
|
111.2
|
|
Adjusted EBITDA
|
$
|
212.6
|
|
|
$
|
41.7
|
|
|
$
|
79.0
|
|
|
$
|
34.7
|
|
|
$
|
(186.0
|
)
|
Adjusted EBITDA as a % of net sales
|
7.5
|
%
|
|
3.2
|
%
|
|
2.4
|
%
|
|
2.9
|
%
|
|
*
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
Increase (Decrease) %
|
||||||||
Net sales
|
$
|
3,157.8
|
|
|
$
|
2,854.2
|
|
|
$
|
2,829.9
|
|
|
10.6
|
%
|
|
0.9
|
%
|
Adjusted EBITDA
|
$
|
238.0
|
|
|
$
|
221.2
|
|
|
$
|
212.6
|
|
|
7.6
|
%
|
|
4.0
|
%
|
Adjusted EBITDA as a % of net sales
|
7.5
|
%
|
|
7.7
|
%
|
|
7.5
|
%
|
|
|
|
|
|
Increase (Decrease)
|
||||||
(in millions)
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||
Volume
|
$
|
315.0
|
|
|
$
|
50.3
|
|
Foreign currency
|
3.3
|
|
|
(21.8
|
)
|
||
Price/Mix
|
(14.7
|
)
|
|
(4.2
|
)
|
||
|
$
|
303.6
|
|
|
$
|
24.3
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
Increase (Decrease) %
|
||||||||
Net sales
|
$
|
1,309.7
|
|
|
$
|
1,271.6
|
|
|
$
|
1,289.3
|
|
|
3.0
|
%
|
|
(1.4
|
)%
|
Adjusted EBITDA
|
$
|
35.5
|
|
|
$
|
47.0
|
|
|
$
|
41.7
|
|
|
(24.5
|
)%
|
|
12.7
|
%
|
Adjusted EBITDA as a % of net sales
|
2.7
|
%
|
|
3.7
|
%
|
|
3.2
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
Increase (Decrease) %
|
||||||||
Net sales
|
$
|
2,793.7
|
|
|
$
|
3,047.4
|
|
|
$
|
3,271.8
|
|
|
(8.3
|
)%
|
|
(6.9
|
)%
|
Adjusted EBITDA
|
$
|
60.8
|
|
|
$
|
76.8
|
|
|
$
|
79.0
|
|
|
(20.8
|
)%
|
|
(2.8
|
)%
|
Adjusted EBITDA as a % of net sales
|
2.2
|
%
|
|
2.5
|
%
|
|
2.4
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
Increase (Decrease) %
|
||||||||
Net sales
|
$
|
958.0
|
|
|
$
|
1,033.6
|
|
|
$
|
1,215.5
|
|
|
(7.3
|
)%
|
|
(15.0
|
)%
|
Adjusted EBITDA
|
$
|
26.4
|
|
|
$
|
23.6
|
|
|
$
|
34.7
|
|
|
11.9
|
%
|
|
(32.0
|
)%
|
Adjusted EBITDA as a % of net sales
|
2.8
|
%
|
|
2.3
|
%
|
|
2.9
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
Increase (Decrease) %
|
||||||||
Net sales
|
$
|
145.5
|
|
|
$
|
119.8
|
|
|
$
|
111.2
|
|
|
21.5
|
%
|
|
7.7
|
%
|
Adjusted EBITDA
|
$
|
(184.3
|
)
|
|
$
|
(176.4
|
)
|
|
$
|
(186.0
|
)
|
|
(4.5
|
)%
|
|
5.2
|
%
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by (used for):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
36.6
|
|
|
$
|
140.2
|
|
|
$
|
113.0
|
|
Investing activities
|
(126.2
|
)
|
|
(34.4
|
)
|
|
(44.1
|
)
|
|||
Financing activities
|
99.2
|
|
|
(89.9
|
)
|
|
(70.4
|
)
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2017
|
|
2016
|
||||
Cash held in the U.S.
|
|
$
|
64.0
|
|
|
$
|
57.6
|
|
Cash held in foreign subsidiaries
|
|
16.3
|
|
|
12.0
|
|
||
Total Cash
|
|
$
|
80.3
|
|
|
$
|
69.6
|
|
|
Payment Due by Period
|
||||||||||||||||||
(in millions)
|
2018
|
|
2019 – 2020
|
|
2021 – 2022
|
|
After 2022
|
|
Total
|
||||||||||
Equipment capital lease obligations
(1)
|
$
|
4.0
|
|
|
$
|
6.3
|
|
|
$
|
4.3
|
|
|
$
|
3.7
|
|
|
$
|
18.3
|
|
Financing obligations (including obligations to related party)
(1,2)
|
8.8
|
|
|
3.3
|
|
|
3.5
|
|
|
18.7
|
|
|
34.3
|
|
|||||
Other lease type obligations
(3)
|
94.1
|
|
|
150.5
|
|
|
103.5
|
|
|
135.6
|
|
|
483.7
|
|
|||||
ABL Facility
(4)
|
29.6
|
|
|
59.3
|
|
|
915.8
|
|
|
—
|
|
|
1,004.7
|
|
|||||
Deferred compensation
(5)
|
2.6
|
|
|
4.9
|
|
|
3.9
|
|
|
9.2
|
|
|
20.6
|
|
|||||
Tax Receivable Agreement contingent liability
(6)
|
9.9
|
|
|
12.4
|
|
|
9.9
|
|
|
25.5
|
|
|
57.7
|
|
|||||
AAC contingent liability
(7)
|
17.1
|
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|
24.2
|
|
|||||
Multi-employer pension plan ("MEPP") withdrawal obligations
(8)
|
0.7
|
|
|
1.3
|
|
|
1.4
|
|
|
9.9
|
|
|
13.3
|
|
|||||
Federal income tax liability
(9)
|
0.5
|
|
|
1.0
|
|
|
1.0
|
|
|
3.7
|
|
|
6.2
|
|
|||||
Total
|
$
|
167.3
|
|
|
$
|
246.1
|
|
|
$
|
1,043.3
|
|
|
$
|
206.3
|
|
|
$
|
1,663.0
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
Restructuring charges, net
|
|
Distribution expenses
|
|
Total Net Charges
|
||||||
2017
|
$
|
17.4
|
|
|
$
|
2.1
|
|
|
$
|
19.5
|
|
2016
|
7.5
|
|
|
2.3
|
|
|
9.8
|
|
|||
|
|
|
|
|
|
||||||
|
At December 31,
|
|
|
||||||||
|
|
|
|
|
|
||||||
(in millions)
|
Other accrued liabilities
|
|
Other non-current liabilities
|
|
|
||||||
2017
|
$
|
0.7
|
|
|
$
|
27.2
|
|
|
|
||
2016
|
0.0
|
|
|
9.8
|
|
|
|
Assumption
|
|
Change
|
|
Net Periodic Benefit Cost
|
|
Projected Benefit Obligation
|
Discount rate
|
|
1% increase
|
|
$(0.2)
|
|
$(4.5)
|
|
|
1% decrease
|
|
0.7
|
|
6.7
|
Return on plan assets
|
|
1% increase
|
|
(1.4)
|
|
N/A
|
|
|
1% decrease
|
|
1.4
|
|
N/A
|
|
Page
|
Consolidated Statements of Operations
|
|
Consolidated Statements of Comprehensive Income (Loss)
|
|
Consolidated Statements of Cash Flows
|
|
Consolidated Statements of Shareholders' Equity
|
|
Notes to Consolidated Financial Statements
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales (including sales to related party of $32.2, $35.6 and $33.6, respectively)
|
$
|
8,364.7
|
|
|
$
|
8,326.6
|
|
|
$
|
8,717.7
|
|
Cost of products sold (including purchases from related party of $181.6, $224.9 and $264.7, respectively) (exclusive of depreciation and amortization shown separately below)
|
6,846.6
|
|
|
6,826.4
|
|
|
7,160.3
|
|
|||
Distribution expenses
|
516.9
|
|
|
505.1
|
|
|
521.8
|
|
|||
Selling and administrative expenses
|
872.6
|
|
|
826.2
|
|
|
853.9
|
|
|||
Depreciation and amortization
|
54.2
|
|
|
54.7
|
|
|
56.9
|
|
|||
Acquisition and integration expenses
|
36.5
|
|
|
25.9
|
|
|
34.9
|
|
|||
Restructuring charges, net
|
16.7
|
|
|
12.4
|
|
|
11.3
|
|
|||
Operating income
|
21.2
|
|
|
75.9
|
|
|
78.6
|
|
|||
Interest expense, net
|
31.2
|
|
|
27.5
|
|
|
27.0
|
|
|||
Other (income) expense, net
|
(8.1
|
)
|
|
7.6
|
|
|
6.7
|
|
|||
Income (loss) before income taxes
|
(1.9
|
)
|
|
40.8
|
|
|
44.9
|
|
|||
Income tax expense
|
11.4
|
|
|
19.8
|
|
|
18.2
|
|
|||
Net income (loss)
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
|
$
|
26.7
|
|
|
|
|
|
|
|
||||||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
(0.85
|
)
|
|
$
|
1.31
|
|
|
$
|
1.67
|
|
Diluted earnings (loss) per share
|
$
|
(0.85
|
)
|
|
$
|
1.30
|
|
|
$
|
1.67
|
|
|
|
|
|
|
|
||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
15.70
|
|
|
15.97
|
|
|
16.00
|
|
|||
Diluted
|
15.70
|
|
|
16.15
|
|
|
16.00
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
|
$
|
26.7
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of $2.0 tax for 2015
|
5.7
|
|
|
(2.1
|
)
|
|
(12.4
|
)
|
|||
Change in fair value of cash flow hedge, net of $0.0, $0.1 and $0.3 tax, respectively
|
0.0
|
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|||
Pension liability adjustments, net of ($0.6), ($0.3) and $0.3 tax, respectively
|
(0.2
|
)
|
|
(1.7
|
)
|
|
0.0
|
|
|||
Other comprehensive income (loss)
|
5.5
|
|
|
(4.0
|
)
|
|
(12.9
|
)
|
|||
Total comprehensive income (loss)
|
$
|
(7.8
|
)
|
|
$
|
17.0
|
|
|
$
|
13.8
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
80.3
|
|
|
$
|
69.6
|
|
Accounts receivable, less allowances of $44.0 and $34.5, respectively
|
1,174.3
|
|
|
1,048.3
|
|
||
Related party receivable
|
3.3
|
|
|
3.9
|
|
||
Inventories
|
722.7
|
|
|
707.9
|
|
||
Other current assets
|
133.5
|
|
|
118.9
|
|
||
Total current assets
|
2,114.1
|
|
|
1,948.6
|
|
||
Property and equipment (net of depreciation and amortization of $314.6 and $292.8, respectively)
|
340.2
|
|
|
371.8
|
|
||
Goodwill
|
99.6
|
|
|
50.2
|
|
||
Other intangibles, net
|
64.1
|
|
|
21.0
|
|
||
Deferred income tax assets
|
59.6
|
|
|
61.8
|
|
||
Other non-current assets
|
30.8
|
|
|
30.3
|
|
||
Total assets
|
$
|
2,708.4
|
|
|
$
|
2,483.7
|
|
Liabilities and shareholders' equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
680.1
|
|
|
$
|
654.1
|
|
Related party payable
|
8.5
|
|
|
9.0
|
|
||
Accrued payroll and benefits
|
73.5
|
|
|
84.4
|
|
||
Other accrued liabilities
|
134.6
|
|
|
102.5
|
|
||
Current maturities of long-term debt
|
2.9
|
|
|
2.9
|
|
||
Financing obligations, current portion (including obligations to related party of $7.1 and $14.9, respectively)
|
7.8
|
|
|
14.9
|
|
||
Total current liabilities
|
907.4
|
|
|
867.8
|
|
||
Long-term debt, net of current maturities
|
908.3
|
|
|
749.2
|
|
||
Financing obligations, less current portion (including obligations to related party of $155.2 and $176.1, respectively)
|
181.6
|
|
|
176.1
|
|
||
Defined benefit pension obligations
|
24.4
|
|
|
27.6
|
|
||
Other non-current liabilities
|
137.0
|
|
|
121.2
|
|
||
Total liabilities
|
2,158.7
|
|
|
1,941.9
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
Shareholders' equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 10.0 million shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 100.0 million shares authorized, 16.0 million shares issued; shares outstanding - 15.7 million at December 31, 2017 and 2016
|
0.2
|
|
|
0.2
|
|
||
Additional paid-in capital
|
590.2
|
|
|
574.5
|
|
||
Accumulated earnings
|
6.4
|
|
|
19.7
|
|
||
Accumulated other comprehensive loss
|
(33.5
|
)
|
|
(39.0
|
)
|
||
Treasury stock at cost - 0.3 million shares at December 31, 2017 and 2016
|
(13.6
|
)
|
|
(13.6
|
)
|
||
Total shareholders' equity
|
549.7
|
|
|
541.8
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,708.4
|
|
|
$
|
2,483.7
|
|
|
Year Ended December 31,
|
||||||||||
Operating activities
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
|
$
|
26.7
|
|
Depreciation and amortization
|
54.2
|
|
|
54.7
|
|
|
56.9
|
|
|||
Amortization and write-off of deferred financing fees
|
2.6
|
|
|
5.6
|
|
|
4.4
|
|
|||
Net losses (gains) on dispositions of property and equipment
|
(25.7
|
)
|
|
(0.8
|
)
|
|
0.5
|
|
|||
Goodwill and long-lived asset impairment charges
|
8.4
|
|
|
7.7
|
|
|
5.9
|
|
|||
Provision for allowance for doubtful accounts
|
15.9
|
|
|
2.2
|
|
|
7.4
|
|
|||
Deferred income tax provision
|
1.9
|
|
|
11.1
|
|
|
14.9
|
|
|||
Stock-based compensation
|
15.7
|
|
|
8.3
|
|
|
3.8
|
|
|||
Other non-cash items, net
|
(8.8
|
)
|
|
3.7
|
|
|
2.0
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable and related party receivable
|
(101.9
|
)
|
|
(14.7
|
)
|
|
53.4
|
|
|||
Inventories
|
30.1
|
|
|
13.1
|
|
|
(62.0
|
)
|
|||
Other current assets
|
(8.4
|
)
|
|
(11.4
|
)
|
|
1.0
|
|
|||
Accounts payable and related party payable
|
48.3
|
|
|
69.9
|
|
|
(8.4
|
)
|
|||
Accrued payroll and benefits
|
(11.3
|
)
|
|
(40.9
|
)
|
|
10.5
|
|
|||
Other accrued liabilities
|
13.6
|
|
|
(3.6
|
)
|
|
(7.1
|
)
|
|||
Other
|
15.3
|
|
|
14.3
|
|
|
3.1
|
|
|||
Net cash provided by operating activities
|
36.6
|
|
|
140.2
|
|
|
113.0
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Property and equipment additions
|
(32.5
|
)
|
|
(41.0
|
)
|
|
(44.4
|
)
|
|||
Proceeds from asset sales
|
51.1
|
|
|
6.6
|
|
|
0.3
|
|
|||
Cash paid for purchase of business, net of cash acquired
|
(144.8
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used for investing activities
|
(126.2
|
)
|
|
(34.4
|
)
|
|
(44.1
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Change in book overdrafts
|
(40.5
|
)
|
|
18.9
|
|
|
(5.8
|
)
|
|||
Borrowings of long-term debt
|
4,898.8
|
|
|
4,555.8
|
|
|
4,661.9
|
|
|||
Repayments of long-term debt
|
(4,731.5
|
)
|
|
(4,625.9
|
)
|
|
(4,708.9
|
)
|
|||
Payments under equipment capital lease obligations
|
(2.7
|
)
|
|
(3.2
|
)
|
|
(3.8
|
)
|
|||
Payments under financing obligations (including obligations to related party of $15.0, $19.9 and $13.8, respectively)
|
(16.4
|
)
|
|
(19.9
|
)
|
|
(13.8
|
)
|
|||
Deferred financing fees
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|||
Purchase of treasury stock
|
—
|
|
|
(13.6
|
)
|
|
—
|
|
|||
Payments under Tax Receivable Agreement
|
(8.5
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used for) financing activities
|
99.2
|
|
|
(89.9
|
)
|
|
(70.4
|
)
|
|||
Effect of exchange rate changes on cash
|
1.1
|
|
|
(0.7
|
)
|
|
(1.7
|
)
|
|||
Net change in cash
|
10.7
|
|
|
15.2
|
|
|
(3.2
|
)
|
|||
Cash at beginning of period
|
69.6
|
|
|
54.4
|
|
|
57.6
|
|
|||
Cash at end of period
|
$
|
80.3
|
|
|
$
|
69.6
|
|
|
$
|
54.4
|
|
Supplemental cash flow information
|
|
|
|
|
|
||||||
Cash paid for income taxes, net of refunds
|
$
|
3.7
|
|
|
$
|
11.6
|
|
|
$
|
1.9
|
|
Cash paid for interest
|
27.6
|
|
|
20.6
|
|
|
21.7
|
|
|||
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Non-cash additions to property and equipment
|
17.8
|
|
|
20.8
|
|
|
4.0
|
|
|||
Contingent consideration for purchase of business: Earn-out
|
22.2
|
|
|
—
|
|
|
—
|
|
|
Common Stock Issued
|
|
Additional Paid-in Capital
|
|
Accumulated Earnings (Deficit)
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Total
|
|||||||||||||||||
|
Shares
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2014
|
16.0
|
|
$
|
0.2
|
|
|
$
|
562.4
|
|
|
$
|
(28.0
|
)
|
|
$
|
(22.1
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
512.5
|
|
Net income
|
—
|
|
—
|
|
|
—
|
|
|
26.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26.7
|
|
||||||
Other comprehensive loss
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.9
|
)
|
|
—
|
|
|
—
|
|
|
(12.9
|
)
|
||||||
Stock-based compensation
|
—
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
||||||
Balance at December 31, 2015
|
16.0
|
|
$
|
0.2
|
|
|
$
|
566.2
|
|
|
$
|
(1.3
|
)
|
|
$
|
(35.0
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
530.1
|
|
Net income
|
—
|
|
—
|
|
|
—
|
|
|
21.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.0
|
|
||||||
Other comprehensive loss
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
||||||
Stock-based compensation
|
—
|
|
—
|
|
|
8.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.3
|
|
||||||
Treasury stock
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(13.6
|
)
|
|
(13.6
|
)
|
||||||
Balance at December 31, 2016
|
16.0
|
|
$
|
0.2
|
|
|
$
|
574.5
|
|
|
$
|
19.7
|
|
|
$
|
(39.0
|
)
|
|
(0.3
|
)
|
|
$
|
(13.6
|
)
|
|
$
|
541.8
|
|
Net loss
|
—
|
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
||||||
Other comprehensive income
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
||||||
Stock-based compensation
|
—
|
|
—
|
|
|
15.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.7
|
|
||||||
Balance at December 31, 2017
|
16.0
|
|
$
|
0.2
|
|
|
$
|
590.2
|
|
|
$
|
6.4
|
|
|
$
|
(33.5
|
)
|
|
(0.3
|
)
|
|
$
|
(13.6
|
)
|
|
$
|
549.7
|
|
|
Year Ended December 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Allowance for doubtful accounts
|
$
|
32.4
|
|
|
$
|
23.7
|
|
Other allowances
|
11.6
|
|
|
10.8
|
|
||
Total accounts receivable allowances
|
$
|
44.0
|
|
|
$
|
34.5
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance, January 1
|
$
|
34.5
|
|
|
$
|
33.3
|
|
|
$
|
39.0
|
|
Add / (Deduct):
|
|
|
|
|
|
||||||
Provision for bad debt expense
|
15.9
|
|
|
2.2
|
|
|
7.4
|
|
|||
Net write-offs and recoveries
|
(7.7
|
)
|
|
(6.7
|
)
|
|
(13.1
|
)
|
|||
Other adjustments
(1)
|
1.3
|
|
|
5.7
|
|
|
—
|
|
|||
Ending balance, December 31
|
$
|
44.0
|
|
|
$
|
34.5
|
|
|
$
|
33.3
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2017
|
|
2016
|
|||||
Land, buildings and improvements
|
$
|
106.6
|
|
|
$
|
132.0
|
|
Machinery and equipment
|
145.3
|
|
|
131.1
|
|
||
Equipment capital leases and assets related to financing obligations (including financing obligations with related party)
|
233.3
|
|
|
215.5
|
|
||
Internal use software
|
159.2
|
|
|
151.0
|
|
||
Construction-in-progress
|
10.4
|
|
|
35.0
|
|
||
Less: Accumulated depreciation and software amortization
|
(314.6
|
)
|
|
(292.8
|
)
|
||
Property and equipment, net
|
$
|
340.2
|
|
|
$
|
371.8
|
|
Buildings
|
40 years
|
Leasehold improvements
|
1 to 20 years
|
Machinery and equipment
|
3 to 15 years
|
Equipment capital leases and assets related to financing obligations (including financing obligations with related party)
|
3 to 15 years
|
Internal use software
|
3 to 5 years
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Depreciation expense
(1)
|
$
|
33.5
|
|
|
$
|
33.8
|
|
|
$
|
32.6
|
|
Amortization expense - internal use software
|
16.5
|
|
|
17.5
|
|
|
18.4
|
|
|||
Depreciation and amortization expense related to property and equipment
|
$
|
50.0
|
|
|
$
|
51.3
|
|
|
$
|
51.0
|
|
|
|
|
|
|
|
||||||
Accumulated depreciation on equipment capital leases and assets related to financing obligations (including financing obligations with related party)
|
$
|
35.6
|
|
|
$
|
29.7
|
|
|
|
||
Unamortized internal use software costs, including amounts recorded in CIP
|
$
|
37.6
|
|
|
$
|
43.9
|
|
|
|
Level 1 –
|
Quoted market prices in active markets for identical assets or liabilities.
|
Level 2 –
|
Observable market-based inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
Level 3 –
|
Unobservable inputs for the asset or liability reflecting the reporting entity’s own assumptions or external inputs from inactive markets.
|
Recently Issued Accounting Standards Not Yet Adopted
|
||||||
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
Accounting Standards Update ("ASU") 2016-02,
Leases (Topic 842)
|
|
The standard requires lessees to put most leases on their balance sheet but recognize expenses in their statement of operations in a manner similar to current accounting guidance. The new standard also eliminates the current guidance related to real estate specific provisions. The guidance requires application on a modified retrospective basis to leases that existed at the beginning of the earliest period presented and those entered into thereafter but prior to the effective date. A proposed ASU has been issued that would add the option for organizations to not provide comparative period financial statements and instead apply the transition requirements as of the effective date. The standard permits entities to elect a package of practical expedients which must be applied consistently to all leases that commenced prior to the effective date. If the package of practical expedients is elected, entities do not need to reassess: (i) whether expired or existing contracts contain leases; (ii) lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The guidance also allows entities to make certain policy elections under the new standard, including: (i) the use of hindsight to determine lease term and when assessing existing right of use assets for impairment; (ii) a policy to not record short-term leases on the balance sheet; and (iii) a policy to not separate lease and non-lease components.
|
|
January 1, 2019; early adoption is permitted
|
|
The Company is currently evaluating this standard and anticipates that its adoption will have a material impact on the Consolidated Financial Statements and related disclosures as it will result in recording substantially all operating leases on the balance sheet as a lease obligation and right of use asset. Lease software has been implemented that will better enable the Company to implement the standard. The Company currently anticipates electing to apply the package of practical expedients to all leases that commenced prior to the date of adoption. Based on the analysis performed to date, the Company anticipates making a policy election to not include short-term leases on the Consolidated Balance Sheets and to separate lease and non-lease components. The Company currently does not anticipate making a policy election to use hindsight to determine lease term. The assessment is ongoing and the preliminary conclusions are subject to change. At this time the Company is unable to quantify the impact that the adoption of this standard will have on the Consolidated Financial Statements and related disclosures. The Company currently plans to adopt this ASU on January 1, 2019.
|
|
|
|
|
|
|
|
Recently Issued Accounting Standards Not Yet Adopted (continued)
|
|
|
|
|
||
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
ASU 2016-13,
Financial Instruments-Credit Losses (Topic 326)
|
|
The standard will replace the currently required incurred loss impairment methodology with guidance that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to be considered in making credit loss estimates. The guidance requires application on a modified retrospective basis. Other application requirements exist for specific assets impacted by a more-than-insignificant credit deterioration since origination.
|
|
January 1, 2020; early adoption is permitted for fiscal years beginning after December 15, 2018
|
|
The Company is currently evaluating the impact this ASU will have on its Consolidated Financial Statements and related disclosures. The Company currently plans to adopt this ASU on January 1, 2020.
|
ASU 2018-02,
Income Statement-Reporting Comprehensive Income (Topic 220)
|
|
The standard allows companies to reclassify the effect of the change in tax laws and rates on deferred tax assets and liabilities as part of the Tax Act from accumulated other comprehensive income (loss) to retained earnings. The guidance is to be applied to each period in which the effect of the Tax Act (or portion thereof) is recorded and companies may apply it either (1) retrospectively as of the date of enactment or (2) as of the beginning of the period of adoption.
|
|
January 1, 2019; early adoption is permitted.
|
|
The Company is currently evaluating early adoption and the impact this ASU will have on its Consolidated Financial Statements and related disclosures.
|
Recently Adopted Accounting Standards
|
||||||
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
|
|
The standard replaces previous revenue recognition standards and significantly expands the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date.
|
|
January 1, 2018; early adoption date is no earlier than the annual period beginning after December 15, 2016
|
|
The Company adopted this ASU on January 1, 2018 applying the modified retrospective method. Focus areas were customer rebates, accounting for customer dedicated inventory and principal/agent considerations. The adoption did not materially impact the Company's Financial Statements and is not expected to have a material impact on future financial results as the adoption did not change the recognition pattern for the Company's existing revenue streams. The Company implemented new internal controls related to contract reviews and revenue recognition disclosures. Additional disclosures will be made as needed in future reports as a result of the adoption in 2018.
|
|
|
|
|
|
|
|
|
(in millions)
|
||
Cash
|
$
|
1.5
|
|
Accounts receivable
|
30.4
|
|
|
Inventories
|
38.5
|
|
|
Other current assets
|
5.7
|
|
|
Property and equipment
|
3.5
|
|
|
Goodwill
|
55.5
|
|
|
Other intangible assets
|
49.0
|
|
|
Other non-current assets
|
1.4
|
|
|
Accounts payable
|
(12.4
|
)
|
|
Other current liabilities
|
(2.7
|
)
|
|
Other non-current liabilities
|
(0.6
|
)
|
|
Total preliminary estimated purchase price
|
$
|
169.8
|
|
(Unaudited)
|
Year Ended December 31,
|
||||||
(in millions, except share and per share data)
|
2017
|
|
2016
|
||||
Net sales
|
$
|
8,527.6
|
|
|
$
|
8,548.2
|
|
Net income (loss)
|
(7.2
|
)
|
|
14.1
|
|
||
Earnings (loss) per share:
|
|
|
|
||||
Basic earnings (loss) per share
|
$
|
(0.46
|
)
|
|
$
|
0.88
|
|
Diluted earnings (loss) per share
|
$
|
(0.46
|
)
|
|
$
|
0.87
|
|
Weighted-average shares outstanding
|
|
|
|
||||
Basic
|
15.70
|
|
|
15.97
|
|
||
Diluted
|
15.70
|
|
|
16.15
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Integration management
|
|
$
|
14.5
|
|
|
$
|
8.3
|
|
|
$
|
—
|
|
Retention compensation
|
|
0.2
|
|
|
2.5
|
|
|
10.8
|
|
|||
Information technology conversion costs
|
|
8.8
|
|
|
6.3
|
|
|
7.4
|
|
|||
Rebranding
|
|
0.5
|
|
|
2.4
|
|
|
6.1
|
|
|||
Legal, consulting and other professional fees
|
|
1.5
|
|
|
2.3
|
|
|
7.8
|
|
|||
Other
|
|
3.0
|
|
|
4.1
|
|
|
2.8
|
|
|||
AAC acquisition and integration
|
|
8.0
|
|
|
—
|
|
|
—
|
|
|||
Total acquisition and integration expenses
|
|
$
|
36.5
|
|
|
$
|
25.9
|
|
|
$
|
34.9
|
|
(in millions)
|
Severance and Related Costs
|
|
Other Direct Costs
|
|
Gain on Sale of Assets and Other
|
|
Total
|
||||||||
2017
|
$
|
7.5
|
|
|
$
|
33.6
|
|
|
$
|
(24.4
|
)
|
|
$
|
16.7
|
|
2016
|
3.5
|
|
|
11.0
|
|
|
(2.1
|
)
|
|
12.4
|
|
||||
2015
|
4.3
|
|
|
2.9
|
|
|
4.1
|
|
|
11.3
|
|
||||
Cumulative
|
20.0
|
|
|
47.9
|
|
|
(22.4
|
)
|
|
45.5
|
|
(in millions)
|
Severance and Related Costs
|
|
Other Direct Costs
|
|
Total
|
||||||
Balance at December 31, 2015
|
$
|
1.7
|
|
|
$
|
0.4
|
|
|
$
|
2.1
|
|
Costs incurred
|
3.5
|
|
|
11.0
|
|
|
14.5
|
|
|||
Payments
|
(3.4
|
)
|
|
(3.4
|
)
|
|
(6.8
|
)
|
|||
Balance at December 31, 2016
|
1.8
|
|
|
8.0
|
|
|
9.8
|
|
|||
Costs incurred
|
7.5
|
|
|
33.6
|
|
|
41.1
|
|
|||
Payments
|
(4.9
|
)
|
|
(16.4
|
)
|
|
(21.3
|
)
|
|||
Balance at December 31, 2017
|
$
|
4.4
|
|
|
$
|
25.2
|
|
|
$
|
29.6
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
Restructuring charges, net
|
|
Distribution expenses
|
|
Total Net Charges
|
||||||
2017
|
$
|
17.4
|
|
|
$
|
2.1
|
|
|
$
|
19.5
|
|
2016
|
7.5
|
|
|
2.3
|
|
|
9.8
|
|
(in millions)
|
Packaging
|
|
Facility Solutions
|
|
Print
|
|
Publishing
|
|
Corporate & Other
|
|
Total
|
||||||||||||
Balance at December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
$
|
44.1
|
|
|
$
|
59.0
|
|
|
$
|
265.4
|
|
|
$
|
50.5
|
|
|
$
|
6.1
|
|
|
$
|
425.1
|
|
Accumulated impairment losses
|
—
|
|
|
(59.0
|
)
|
|
(265.4
|
)
|
|
(50.5
|
)
|
|
—
|
|
|
(374.9
|
)
|
||||||
Net goodwill 2015
|
44.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
50.2
|
|
||||||
2016 Activity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
44.1
|
|
|
59.0
|
|
|
265.4
|
|
|
50.5
|
|
|
6.1
|
|
|
425.1
|
|
||||||
Accumulated impairment losses
|
—
|
|
|
(59.0
|
)
|
|
(265.4
|
)
|
|
(50.5
|
)
|
|
—
|
|
|
(374.9
|
)
|
||||||
Net goodwill 2016
|
44.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
50.2
|
|
||||||
2017 Activity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill acquired
|
55.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.5
|
|
||||||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
(6.1
|
)
|
||||||
Balance at December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
99.6
|
|
|
59.0
|
|
|
265.4
|
|
|
50.5
|
|
|
6.1
|
|
|
480.6
|
|
||||||
Accumulated impairment losses
|
—
|
|
|
(59.0
|
)
|
|
(265.4
|
)
|
|
(50.5
|
)
|
|
(6.1
|
)
|
|
(381.0
|
)
|
||||||
Net goodwill 2017
|
$
|
99.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99.6
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in millions)
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Customer relationships
|
$
|
67.7
|
|
|
$
|
6.1
|
|
|
$
|
61.6
|
|
|
$
|
23.6
|
|
|
$
|
4.0
|
|
|
$
|
19.6
|
|
Trademarks/Trade names
|
3.8
|
|
|
2.3
|
|
|
1.5
|
|
|
2.7
|
|
|
1.3
|
|
|
1.4
|
|
||||||
Non-compete agreements
|
1.5
|
|
|
0.5
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
73.0
|
|
|
$
|
8.9
|
|
|
$
|
64.1
|
|
|
$
|
26.3
|
|
|
$
|
5.3
|
|
|
$
|
21.0
|
|
|
Gross Value
(in millions)
|
|
Estimated Useful Life
(in years)
|
||
Customer relationships
|
$
|
46.4
|
|
|
14.0
|
Trademarks/Trade names
|
1.1
|
|
|
1.0
|
|
Non-compete agreements
|
1.5
|
|
|
1.0
|
|
Total identifiable intangible assets acquired
|
$
|
49.0
|
|
|
|
Year
|
|
Total
|
||
2018
|
|
$
|
6.7
|
|
2019
|
|
4.8
|
|
|
2020
|
|
4.8
|
|
|
2021
|
|
4.8
|
|
|
2022
|
|
4.8
|
|
(in millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Asset-Based Lending Facility (the "ABL Facility")
|
$
|
897.7
|
|
|
$
|
726.9
|
|
Equipment capital lease and other obligations
|
13.5
|
|
|
25.2
|
|
||
Total debt
|
911.2
|
|
|
752.1
|
|
||
Less: current maturities of long-term debt
|
(2.9
|
)
|
|
(2.9
|
)
|
||
Long-term debt, net of current maturities
|
$
|
908.3
|
|
|
$
|
749.2
|
|
(in millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Obligations to related party
|
$
|
162.3
|
|
|
$
|
191.0
|
|
Obligations - other financing
|
27.1
|
|
|
—
|
|
||
Total financing obligations
|
189.4
|
|
|
191.0
|
|
||
Less: current portion of financing obligations
|
(7.8
|
)
|
|
(14.9
|
)
|
||
Financing obligations, less current portion
|
$
|
181.6
|
|
|
$
|
176.1
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except number of agreements)
|
2017
|
|
2016
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Property and equipment
|
$
|
14.6
|
|
|
$
|
3.7
|
|
|
$
|
18.3
|
|
Financing obligations
|
15.2
|
|
|
8.4
|
|
|
23.6
|
|
|||
Number of terminated property agreements
|
8
|
|
|
3
|
|
|
11
|
|
|
Financing Obligations and Equipment Capital Leases
(1)
|
|
Operating Leases
|
||||||||||||
(in millions)
|
|
Lease Obligations
|
|
Sublease Income
|
|
Total
|
|||||||||
2018
|
$
|
12.8
|
|
|
$
|
94.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
94.1
|
|
2019
|
5.0
|
|
|
80.3
|
|
|
(0.2
|
)
|
|
80.1
|
|
||||
2020
|
4.6
|
|
|
70.4
|
|
|
—
|
|
|
70.4
|
|
||||
2021
|
4.0
|
|
|
57.7
|
|
|
—
|
|
|
57.7
|
|
||||
2022
|
3.8
|
|
|
45.8
|
|
|
—
|
|
|
45.8
|
|
||||
Thereafter
|
22.4
|
|
|
135.6
|
|
|
—
|
|
|
135.6
|
|
||||
|
52.6
|
|
|
484.1
|
|
|
(0.4
|
)
|
|
483.7
|
|
||||
Amount representing interest
|
(12.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total future minimum lease payments
|
$
|
40.1
|
|
|
$
|
484.1
|
|
|
$
|
(0.4
|
)
|
|
$
|
483.7
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic (United States)
|
$
|
(18.0
|
)
|
|
$
|
27.6
|
|
|
$
|
46.6
|
|
Foreign
|
16.1
|
|
|
13.2
|
|
|
(1.7
|
)
|
|||
Income (loss) before income taxes
|
$
|
(1.9
|
)
|
|
$
|
40.8
|
|
|
$
|
44.9
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Current Provision:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
4.8
|
|
|
$
|
3.6
|
|
|
$
|
—
|
|
U.S. State
|
1.5
|
|
|
1.5
|
|
|
1.7
|
|
|||
Foreign
|
3.2
|
|
|
3.6
|
|
|
1.6
|
|
|||
Total current income tax expense
|
$
|
9.5
|
|
|
$
|
8.7
|
|
|
$
|
3.3
|
|
|
|
|
|
|
|
||||||
Deferred, net:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
16.3
|
|
|
$
|
9.6
|
|
|
$
|
14.8
|
|
U.S. State
|
(2.7
|
)
|
|
1.9
|
|
|
0.5
|
|
|||
Foreign
|
(11.7
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||
Total deferred, net
|
$
|
1.9
|
|
|
$
|
11.1
|
|
|
$
|
14.9
|
|
Provision for income tax expense (benefit)
|
$
|
11.4
|
|
|
$
|
19.8
|
|
|
$
|
18.2
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Deferred income tax assets:
|
|
|
|
|
|
|
|
||||||||
Accrued compensation
|
$
|
11.6
|
|
|
$
|
0.2
|
|
|
$
|
17.7
|
|
|
$
|
0.1
|
|
Financing obligations to related party
|
47.3
|
|
|
0.8
|
|
|
77.5
|
|
|
0.8
|
|
||||
Goodwill and other intangibles, net
|
1.9
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
||||
Long-term compensation
|
21.3
|
|
|
4.1
|
|
|
21.2
|
|
|
3.8
|
|
||||
Net operating losses and credit carryforwards
|
44.9
|
|
|
11.8
|
|
|
74.1
|
|
|
13.6
|
|
||||
Allowance for doubtful accounts
|
10.0
|
|
|
0.1
|
|
|
11.9
|
|
|
—
|
|
||||
Other
|
5.6
|
|
|
0.6
|
|
|
3.5
|
|
|
0.8
|
|
||||
Gross deferred income tax assets
|
142.6
|
|
|
17.6
|
|
|
210.5
|
|
|
19.1
|
|
||||
Less valuation allowance
|
(4.7
|
)
|
|
(3.6
|
)
|
|
(6.5
|
)
|
|
(18.1
|
)
|
||||
Total deferred tax asset
|
137.9
|
|
|
14.0
|
|
|
204.0
|
|
|
1.0
|
|
||||
Deferred income tax liabilities:
|
|
|
|
|
|
|
|
||||||||
Property and equipment, net
|
(54.2
|
)
|
|
—
|
|
|
(86.7
|
)
|
|
—
|
|
||||
Inventory reserve
|
(33.5
|
)
|
|
—
|
|
|
(48.2
|
)
|
|
—
|
|
||||
Other
|
(4.6
|
)
|
|
—
|
|
|
(8.3
|
)
|
|
—
|
|
||||
Total deferred tax liability
|
(92.3
|
)
|
|
—
|
|
|
(143.2
|
)
|
|
—
|
|
||||
Net deferred income tax asset
|
$
|
45.6
|
|
|
$
|
14.0
|
|
|
$
|
60.8
|
|
|
$
|
1.0
|
|
(in millions)
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||
Balance at December 31, 2015
|
$
|
6.3
|
|
|
$
|
15.5
|
|
|
$
|
21.8
|
|
Additions
|
0.2
|
|
|
3.4
|
|
|
3.6
|
|
|||
Subtractions
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|||
Currency translation adjustments
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Balance at December 31, 2016
|
6.5
|
|
|
18.1
|
|
|
24.6
|
|
|||
Additions
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||
Subtractions
(a)
|
(1.8
|
)
|
|
(16.0
|
)
|
|
(17.8
|
)
|
|||
Currency translation adjustments
|
—
|
|
|
1.3
|
|
|
1.3
|
|
|||
Balance at December 31, 2017
|
$
|
4.7
|
|
|
$
|
3.6
|
|
|
$
|
8.3
|
|
•
|
Registration Rights Agreement:
The Registration Rights Agreement provides the UWWH Stockholder with certain demand and piggyback registration rights. Under this Agreement, the UWWH Stockholder is also entitled to transfer its Veritiv common stock to one or more of its affiliates or equity-holders and may exercise registration rights on behalf of such transferees if such transferees become a party to the Registration Rights Agreement. The UWWH Stockholder, on behalf of the holders of shares of Veritiv’s common stock that are party to the Registration Rights Agreement, under certain circumstances and provided certain thresholds described in the Registration Rights Agreement are met, may make a written request to the Company for the registration of the offer and sale of all or part of the shares subject to such registration rights. If the Company registers the offer and sale of its common stock (other than pursuant to a demand registration or in connection with registration on Form S-4 and Form S-8 or any successor or similar forms, or relating solely to the sale of debt or convertible debt instruments) either on its behalf or on the behalf of other security holders, the holders of the registration rights under the Registration Rights Agreement are entitled to include their shares in such registration. The demand rights described commenced
180 days
after the Distribution Date. Veritiv is not required to effect more than
one
demand registration in any 150-day period or more than
two
demand registrations in any 365-day period. If Veritiv believes that a registration or an offering would materially affect a significant transaction or would require it to disclose confidential information which it in good faith believes would be adverse to its interest, then Veritiv may delay a registration or filing for no more than
120 days
in a 360-day period.
|
•
|
Tax Receivable Agreement:
The Tax Receivable Agreement sets forth the terms by which Veritiv generally will be obligated to pay the UWWH Stockholder an amount equal to
85%
of the U.S. federal, state and Canadian income tax savings that Veritiv actually realizes as a result of the utilization of Unisource's net operating losses attributable to taxable periods prior to the date of the Merger. For purposes of the Tax Receivable Agreement, Veritiv’s income tax savings will generally be computed by comparing Veritiv’s actual aggregate U.S. federal, state and Canadian income tax liability for taxable periods (or portions thereof) beginning after the date of the Merger to the amount of Veritiv’s aggregate U.S. federal, state and Canadian income tax liability for the same periods had Veritiv not been able to utilize Unisource's net operating losses attributable to taxable periods prior to the date of the Merger. Veritiv will pay to the
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sales to Georgia-Pacific, reflected in net sales
|
|
$
|
32.2
|
|
|
$
|
35.6
|
|
|
$
|
33.6
|
|
Purchases of inventory from Georgia-Pacific, recognized in cost of products sold
|
|
$
|
181.6
|
|
|
$
|
224.9
|
|
|
$
|
264.7
|
|
|
|
|
|
|
|
|
||||||
Inventories purchased from Georgia-Pacific that remained on Veritiv's balance sheet
|
|
$
|
22.7
|
|
|
$
|
24.8
|
|
|
|
||
Related party payable to Georgia-Pacific
|
|
$
|
8.5
|
|
|
$
|
9.0
|
|
|
|
||
Related party receivable from Georgia-Pacific
|
|
$
|
3.3
|
|
|
$
|
3.9
|
|
|
|
Deferred Compensation Liability
|
|
|
|
|
||||
|
|
|
|
|
||||
(in millions)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Other accrued liabilities
|
|
$
|
2.6
|
|
|
$
|
2.7
|
|
Other non-current liabilities
|
|
23.7
|
|
|
21.6
|
|
||
Total liabilities
|
|
$
|
26.3
|
|
|
$
|
24.3
|
|
|
Year Ended December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||||||
Accumulated benefit obligation, end of year
|
$
|
91.0
|
|
|
$
|
83.2
|
|
|
$
|
89.7
|
|
|
$
|
71.9
|
|
|
|
|
|
|
|
|
|
||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, beginning of year
|
$
|
89.7
|
|
|
$
|
79.0
|
|
|
$
|
89.0
|
|
|
$
|
76.0
|
|
Service cost
|
0.8
|
|
|
0.3
|
|
|
0.7
|
|
|
0.3
|
|
||||
Interest cost
|
2.7
|
|
|
2.7
|
|
|
3.4
|
|
|
3.1
|
|
||||
Actuarial (gain) loss
|
3.3
|
|
|
6.1
|
|
|
—
|
|
|
2.2
|
|
||||
Benefits paid
|
(5.5
|
)
|
|
(3.9
|
)
|
|
(3.4
|
)
|
|
(4.8
|
)
|
||||
Foreign exchange adjustments
|
—
|
|
|
5.8
|
|
|
—
|
|
|
2.2
|
|
||||
Projected benefit obligation, end of year
|
$
|
91.0
|
|
|
$
|
90.0
|
|
|
$
|
89.7
|
|
|
$
|
79.0
|
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Plan assets, beginning of year
|
$
|
75.9
|
|
|
$
|
64.9
|
|
|
$
|
74.4
|
|
|
$
|
61.6
|
|
Employer contributions
|
—
|
|
|
3.1
|
|
|
—
|
|
|
3.1
|
|
||||
Investment returns
|
12.0
|
|
|
6.0
|
|
|
5.9
|
|
|
3.1
|
|
||||
Benefits paid
|
(5.5
|
)
|
|
(3.9
|
)
|
|
(3.4
|
)
|
|
(4.8
|
)
|
||||
Administrative expenses paid
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
||||
Foreign exchange adjustments
|
—
|
|
|
4.8
|
|
|
—
|
|
|
1.9
|
|
||||
Plan assets, end of year
|
$
|
81.4
|
|
|
$
|
74.9
|
|
|
$
|
75.9
|
|
|
$
|
64.9
|
|
Underfunded status, end of year
|
$
|
(9.6
|
)
|
|
$
|
(15.1
|
)
|
|
$
|
(13.8
|
)
|
|
$
|
(14.1
|
)
|
|
Year Ended December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||||||
Amounts recognized in the Consolidated Balance Sheets consist of:
|
|
|
|
|
|
|
|
||||||||
Other accrued liabilities
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
Defined benefit pension obligations
|
9.5
|
|
|
14.9
|
|
|
13.7
|
|
|
13.9
|
|
||||
Net liability recognized
|
$
|
9.6
|
|
|
$
|
15.1
|
|
|
$
|
13.8
|
|
|
$
|
14.1
|
|
|
Year Ended December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||||||
Amounts not yet reflected in net periodic benefit cost and included in AOCL consist of:
|
|
|
|
|
|
|
|
||||||||
Net loss, net of tax
|
$
|
3.2
|
|
|
$
|
6.1
|
|
|
$
|
5.7
|
|
|
$
|
3.4
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||||||||||
Components of net periodic benefit cost (credit):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
2.0
|
|
|
$
|
0.3
|
|
|
$
|
1.7
|
|
|
$
|
0.3
|
|
|
$
|
1.6
|
|
|
$
|
0.2
|
|
Interest cost
|
2.7
|
|
|
2.7
|
|
|
3.4
|
|
|
3.1
|
|
|
3.2
|
|
|
3.2
|
|
||||||
Expected return on plan assets
|
(5.1
|
)
|
|
(3.7
|
)
|
|
(5.0
|
)
|
|
(3.5
|
)
|
|
(5.2
|
)
|
|
(3.3
|
)
|
||||||
Amortization of net loss
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (credit)
|
$
|
(0.3
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
(0.4
|
)
|
|
$
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes to funded status recognized in other comprehensive (income) loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss (gain) during year, net of tax
|
$
|
(2.5
|
)
|
|
$
|
2.7
|
|
|
$
|
(0.5
|
)
|
|
$
|
2.2
|
|
|
$
|
1.0
|
|
|
$
|
(1.0
|
)
|
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
(in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Investments – U.S.:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
56.8
|
|
|
$
|
56.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed income securities
|
24.3
|
|
|
24.3
|
|
|
—
|
|
|
—
|
|
||||
Cash and short-term securities
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
81.4
|
|
|
$
|
81.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
(in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Investments – Canada:
|
|
|
|
|
|
|
|
||||||||
Cash and short-term securities
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investments measured at NAV:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
49.2
|
|
|
|
|
|
|
|
|||||||
Fixed income securities
|
25.6
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
74.9
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
(in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Investments – U.S.:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
50.0
|
|
|
$
|
50.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed income securities
|
25.7
|
|
|
25.7
|
|
|
—
|
|
|
—
|
|
||||
Cash and short-term securities
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
75.9
|
|
|
$
|
75.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
(in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Investments – Canada:
|
|
|
|
|
|
|
|
||||||||
Cash and short-term securities
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investments measured at NAV:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
43.8
|
|
|
|
|
|
|
|
|||||||
Fixed income securities
|
20.8
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
64.9
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
As of December 31, 2017
|
|
|
|
|
Asset Allocation Range
|
||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||
Equity securities
|
$
|
56.8
|
|
|
$
|
49.2
|
|
|
55 - 75%
|
|
50 - 70%
|
Fixed income securities
|
24.3
|
|
|
25.6
|
|
|
20 - 40%
|
|
30 - 50%
|
||
Cash and short-term securities
|
0.3
|
|
|
0.1
|
|
|
0 - 10%
|
|
0 - 5%
|
||
Total
|
$
|
81.4
|
|
|
$
|
74.9
|
|
|
|
|
|
As of December 31, 2016
|
|
|
|
|
Asset Allocation Range
|
||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||
Equity securities
|
$
|
50.0
|
|
|
$
|
43.8
|
|
|
55 - 75%
|
|
50 - 70%
|
Fixed income securities
|
25.7
|
|
|
20.8
|
|
|
20 - 40%
|
|
30 - 50%
|
||
Cash and short-term securities
|
0.2
|
|
|
0.3
|
|
|
0 - 10%
|
|
0 - 5%
|
||
Total
|
$
|
75.9
|
|
|
$
|
64.9
|
|
|
|
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
||||||||
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||
Discount rate
|
3.33
|
%
|
|
3.40
|
%
|
|
3.76
|
%
|
|
3.85
|
%
|
Rate of compensation increases
|
N/A
|
|
|
3.00
|
%
|
|
N/A
|
|
|
3.00
|
%
|
(in millions)
|
U.S.
|
|
Canada
|
||||
2018
|
$
|
9.6
|
|
|
$
|
2.8
|
|
2019
|
5.7
|
|
|
2.9
|
|
||
2020
|
5.4
|
|
|
3.0
|
|
||
2021
|
5.6
|
|
|
3.2
|
|
||
2022
|
5.5
|
|
|
3.4
|
|
||
2023-2027
|
27.7
|
|
|
20.1
|
|
•
|
Assets contributed to the multi-employer plans by one employer may be used to provide benefits to employees of other participating employers,
|
•
|
If a participating employer ceases contributing to the plan, the unfunded obligations of the plan may be inherited by the remaining participating employers, and
|
•
|
If the Company stops participating in any of the multi-employer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
Restructuring charges, net
|
|
Distribution expenses
|
|
Total Net Charges
|
||||||
2017
|
$
|
17.4
|
|
|
$
|
2.1
|
|
|
$
|
19.5
|
|
2016
|
7.5
|
|
|
2.3
|
|
|
9.8
|
|
|||
|
|
|
|
|
|
||||||
|
At December 31,
|
|
|
||||||||
|
|
|
|
|
|
||||||
(in millions)
|
Other accrued liabilities
|
|
Other non-current liabilities
|
|
|
||||||
2017
|
$
|
0.7
|
|
|
$
|
27.2
|
|
|
|
||
2016
|
0.0
|
|
|
9.8
|
|
|
|
Pension Fund
|
EIN/Pension Plan No.
|
|
Pension Protection Act Zone Status
|
|
FIP/RP Status Pending/ Implemented
|
|
Veritiv's Contributions
|
|
Surcharge Imposed
|
|
Expiration Date(s) of Collective Bargaining Agreement(s)
|
||||||||||
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
||||||||||||
Western Conference of Teamsters Pension Trust Fund
(1)
|
916145047/001
|
|
Green
|
|
No
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
No
|
|
7/31/2017 - 10/31/2020
|
Central States, Southeast & Southwest Areas Pension Fund
(2)
|
366044243/001
|
|
Red
|
|
Implemented
|
|
0.2
|
|
|
0.3
|
|
|
0.4
|
|
|
Yes
|
|
7/31/2018
|
|||
Teamsters Pension Plan of Philadelphia & Vicinity
|
231511735/001
|
|
Yellow
|
|
Implemented
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
Yes
|
|
3/31/2018 & 7/31/2018
|
|||
Graphic Arts Industry Joint Pension Trust
|
521074215/001
|
|
Red
|
|
Implemented
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
Yes
|
|
Exited during 2016
|
|||
New England Teamsters & Trucking Industry Pension
|
046372430/001
|
|
Red
|
|
Implemented
|
|
0.4
|
|
|
0.5
|
|
|
0.4
|
|
|
Yes
|
|
Exited during 2017
|
|||
Western Pennsylvania Teamsters and Employers Pension Plan
|
256029946/001
|
|
Red
|
|
Implemented
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
Yes
|
|
3/31/2019 & 3/31/2020
|
|||
Contributions for individually significant plans
|
|
|
|
|
|
|
2.9
|
|
|
3.2
|
|
|
3.3
|
|
|
|
|
|
|||
Contributions to other multi-employer plans
|
|
|
|
|
|
|
0.6
|
|
|
0.5
|
|
|
0.6
|
|
|
|
|
|
|||
Total contributions
|
|
|
|
|
|
|
$
|
3.5
|
|
|
$
|
3.7
|
|
|
$
|
3.9
|
|
|
|
|
|
(in millions)
|
|
TRA Contingent Liability
|
||
Balance at December 31, 2015
|
|
$
|
63.0
|
|
Change in fair value adjustment recorded in other (income) expense, net
|
|
4.9
|
|
|
Balance at December 31, 2016
|
|
67.9
|
|
|
Change in fair value adjustment recorded in other (income) expense, net
(a)
|
|
(9.4
|
)
|
|
Principal payments
|
|
(8.5
|
)
|
|
Balance at December 31, 2017
|
|
$
|
50.0
|
|
(in millions)
|
|
AAC Contingent Liability
|
||
Balance at August 31, 2017
|
|
$
|
30.0
|
|
Purchase accounting adjustment
|
|
(7.8
|
)
|
|
Adjusted purchase price
|
|
22.2
|
|
|
Change in fair value adjustment recorded in other (income) expense, net
|
|
2.0
|
|
|
Balance at December 31, 2017
|
|
$
|
24.2
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2017
|
|
2016
|
|||||
Rebates receivable
|
$
|
61.1
|
|
|
$
|
62.3
|
|
Prepaid expenses
|
33.8
|
|
|
26.1
|
|
||
Other
|
38.6
|
|
|
30.5
|
|
||
Other current assets
|
$
|
133.5
|
|
|
$
|
118.9
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2017
|
|
2016
|
|||||
Deferred financing costs
|
$
|
9.3
|
|
|
$
|
11.9
|
|
Investments in real estate joint ventures
|
6.4
|
|
|
6.0
|
|
||
Below market leasehold agreements
|
4.7
|
|
|
4.7
|
|
||
Other
|
10.4
|
|
|
7.7
|
|
||
Other non-current assets
|
$
|
30.8
|
|
|
$
|
30.3
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2017
|
|
2016
|
|||||
Accrued payroll and related taxes
|
$
|
18.0
|
|
|
$
|
26.0
|
|
Accrued commissions
|
23.2
|
|
|
21.8
|
|
||
Accrued incentive plans
|
28.7
|
|
|
33.1
|
|
||
Other
|
3.6
|
|
|
3.5
|
|
||
Accrued payroll and benefits
|
$
|
73.5
|
|
|
$
|
84.4
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2017
|
|
2016
|
|||||
Accrued taxes
|
$
|
12.1
|
|
|
$
|
9.1
|
|
Accrued customer incentives
|
25.1
|
|
|
23.3
|
|
||
Accrued freight
|
16.0
|
|
|
13.9
|
|
||
Accrued professional fees
|
6.7
|
|
|
7.3
|
|
||
Tax Receivable Agreement contingent liability
|
9.9
|
|
|
8.5
|
|
||
AAC contingent liability and working capital adjustment
|
18.4
|
|
|
—
|
|
||
Other
|
46.4
|
|
|
40.4
|
|
||
Other accrued liabilities
|
$
|
134.6
|
|
|
$
|
102.5
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2017
|
|
2016
|
|||||
Tax Receivable Agreement contingent liability
|
$
|
40.1
|
|
|
$
|
59.4
|
|
AAC contingent liability
|
7.1
|
|
|
—
|
|
||
Deferred compensation
|
23.7
|
|
|
21.6
|
|
||
Straight-line rent
|
17.5
|
|
|
15.7
|
|
||
Above market leasehold agreements
|
2.1
|
|
|
3.1
|
|
||
Other, including multi-employer pension plan withdrawals
|
46.5
|
|
|
21.4
|
|
||
Other non-current liabilities
|
$
|
137.0
|
|
|
$
|
121.2
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except per share data)
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
|
$
|
26.7
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted-average number of shares outstanding – basic
|
15.70
|
|
|
15.97
|
|
|
16.00
|
|
|||
Weighted-average number of shares outstanding – diluted
|
15.70
|
|
|
16.15
|
|
|
16.00
|
|
|||
|
|
|
|
|
|
||||||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
(0.85
|
)
|
|
$
|
1.31
|
|
|
$
|
1.67
|
|
Diluted earnings (loss) per share
|
$
|
(0.85
|
)
|
|
$
|
1.30
|
|
|
$
|
1.67
|
|
|
|
|
|
|
|
||||||
Antidilutive stock-based awards excluded from computation of diluted earnings per share
|
0.80
|
|
|
0.06
|
|
|
0.10
|
|
|||
Performance stock-based awards excluded from computation of diluted earnings per share because performance conditions had not been met
|
0.30
|
|
|
0.20
|
|
|
0.16
|
|
(in millions)
|
|
Foreign currency translation adjustments
|
|
Retirement liabilities
|
|
Interest rate swap
|
|
AOCL
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2015
|
|
$
|
(27.1
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(35.0
|
)
|
Unrealized net losses arising during the period
|
|
(2.1
|
)
|
|
(1.8
|
)
|
|
(0.2
|
)
|
|
(4.1
|
)
|
||||
Amounts reclassified from AOCL
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Net current period other comprehensive loss
|
|
(2.1
|
)
|
|
(1.7
|
)
|
|
(0.2
|
)
|
|
(4.0
|
)
|
||||
Balance at December 31, 2016
|
|
(29.2
|
)
|
|
(9.1
|
)
|
|
(0.7
|
)
|
|
(39.0
|
)
|
||||
Unrealized net gains (losses) arising during the period
|
|
5.9
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
5.9
|
|
||||
Amounts reclassified from AOCL
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
0.1
|
|
|
(0.4
|
)
|
||||
Net current period other comprehensive income (loss)
|
|
5.7
|
|
|
(0.2
|
)
|
|
0.0
|
|
|
5.5
|
|
||||
Balance at December 31, 2017
|
|
$
|
(23.5
|
)
|
|
$
|
(9.3
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(33.5
|
)
|
(units in thousands)
|
|
Number of RSUs
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|||
Non-vested at December 31, 2015
|
|
59
|
|
|
$
|
51.21
|
|
Granted
|
|
98
|
|
|
$
|
36.43
|
|
Vested
|
|
(1
|
)
|
|
$
|
47.71
|
|
Forfeited
|
|
(10
|
)
|
|
$
|
41.35
|
|
Non-vested at December 31, 2016
|
|
146
|
|
|
$
|
42.05
|
|
Granted
|
|
111
|
|
|
$
|
49.86
|
|
Vested
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
|
(8
|
)
|
|
$
|
44.21
|
|
Non-vested at December 31, 2017
|
|
249
|
|
|
$
|
45.43
|
|
(units in thousands)
|
|
Number of PCSUs
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|
|||
Non-vested at December 31, 2015
|
|
159
|
|
|
$
|
51.23
|
|
|
Granted
|
|
244
|
|
|
$
|
47.98
|
|
(1)
|
Shares lost based on actual performance
|
|
(22
|
)
|
|
$
|
36.43
|
|
|
Vested
|
|
—
|
|
|
$
|
—
|
|
|
Forfeited
|
|
(26
|
)
|
|
$
|
41.49
|
|
|
Non-vested at December 31, 2016
|
|
355
|
|
|
$
|
42.14
|
|
|
Granted
|
|
166
|
|
|
$
|
53.56
|
|
(2)
|
Shares lost based on actual performance
|
|
(45
|
)
|
|
$
|
53.56
|
|
|
Vested
|
|
—
|
|
|
$
|
—
|
|
|
Forfeited
|
|
(22
|
)
|
|
$
|
40.78
|
|
|
Non-vested at December 31, 2017
|
|
454
|
|
|
$
|
40.87
|
|
|
(units in thousands)
|
|
Number of MCPSUs
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|||
Non-vested at December 31, 2015
|
|
91
|
|
|
$
|
62.52
|
|
Granted
|
|
146
|
|
|
$
|
42.23
|
|
Shares earned based on actual performance
|
|
15
|
|
|
$
|
—
|
|
Vested
|
|
—
|
|
|
$
|
—
|
|
Forfeited/cancelled
|
|
(44
|
)
|
|
$
|
58.16
|
|
Non-vested at December 31, 2016
|
|
208
|
|
|
$
|
48.23
|
|
Granted
|
|
100
|
|
|
$
|
71.63
|
|
Shares lost based on actual performance
|
|
(103
|
)
|
|
$
|
71.63
|
|
Vested
|
|
—
|
|
|
$
|
—
|
|
Forfeited/cancelled
|
|
(12
|
)
|
|
$
|
55.65
|
|
Non-vested at December 31, 2017
|
|
193
|
|
|
$
|
56.23
|
|
•
|
Packaging
– The Packaging segment provides standard as well as custom and comprehensive packaging solutions for customers based in North America and in key global markets. The business is strategically focused on higher growth industries including light industrial/general manufacturing, food production, fulfillment and internet retail, as well as niche verticals based on geographical and functional expertise.
|
•
|
Facility Solutions
– The Facility Solutions segment sources and sells cleaning, break-room and other supplies such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities primarily in the U.S., Canada and Mexico.
|
•
|
Print
– The Print segment sells and distributes commercial printing, writing, copying, digital, wide format and specialty paper products, graphics consumables and graphics equipment primarily in the U.S., Canada and Mexico. This segment also includes customized paper conversion services of commercial printing paper for distribution to document centers and form printers.
|
•
|
Publishing
– The Publishing segment sells and distributes coated and uncoated commercial printing papers to publishers, retailers, converters, printers and specialty businesses for use in magazines, catalogs, books, directories, gaming, couponing, retail inserts and direct mail. This segment also provides print management, procurement and supply chain management solutions to simplify paper and print procurement processes for its customers.
|
(in millions)
|
Packaging
|
|
Facility Solutions
|
|
Print
|
|
Publishing
|
|
Total Reportable Segments
|
|
Corporate & Other
|
|
Total
|
||||||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net sales
|
$
|
3,157.8
|
|
|
$
|
1,309.7
|
|
|
$
|
2,793.7
|
|
|
$
|
958.0
|
|
|
$
|
8,219.2
|
|
|
$
|
145.5
|
|
|
$
|
8,364.7
|
|
Adjusted EBITDA
|
238.0
|
|
|
35.5
|
|
|
60.8
|
|
|
26.4
|
|
|
360.7
|
|
|
(184.3
|
)
|
|
|
||||||||
Depreciation and amortization
|
15.9
|
|
|
6.0
|
|
|
10.4
|
|
|
1.5
|
|
|
33.8
|
|
|
20.4
|
|
|
54.2
|
|
|||||||
Restructuring charges, net
|
6.1
|
|
|
2.3
|
|
|
8.0
|
|
|
0.0
|
|
|
16.4
|
|
|
0.3
|
|
|
16.7
|
|
|||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net sales
|
2,854.2
|
|
|
1,271.6
|
|
|
3,047.4
|
|
|
1,033.6
|
|
|
8,206.8
|
|
|
119.8
|
|
|
8,326.6
|
|
|||||||
Adjusted EBITDA
|
221.2
|
|
|
47.0
|
|
|
76.8
|
|
|
23.6
|
|
|
368.6
|
|
|
(176.4
|
)
|
|
|
||||||||
Depreciation and amortization
|
12.4
|
|
|
5.9
|
|
|
12.4
|
|
|
3.1
|
|
|
33.8
|
|
|
20.9
|
|
|
54.7
|
|
|||||||
Restructuring charges, net
|
4.6
|
|
|
2.3
|
|
|
5.2
|
|
|
0.1
|
|
|
12.2
|
|
|
0.2
|
|
|
12.4
|
|
|||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net sales
|
2,829.9
|
|
|
1,289.3
|
|
|
3,271.8
|
|
|
1,215.5
|
|
|
8,606.5
|
|
|
111.2
|
|
|
8,717.7
|
|
|||||||
Adjusted EBITDA
|
212.6
|
|
|
41.7
|
|
|
79.0
|
|
|
34.7
|
|
|
368.0
|
|
|
(186.0
|
)
|
|
|
||||||||
Depreciation and amortization
|
14.4
|
|
|
7.1
|
|
|
13.5
|
|
|
3.1
|
|
|
38.1
|
|
|
18.8
|
|
|
56.9
|
|
|||||||
Restructuring charges
|
3.8
|
|
|
2.5
|
|
|
3.6
|
|
|
0.0
|
|
|
9.9
|
|
|
1.4
|
|
|
11.3
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) before income taxes
|
$
|
(1.9
|
)
|
|
$
|
40.8
|
|
|
$
|
44.9
|
|
Interest expense, net
|
31.2
|
|
|
27.5
|
|
|
27.0
|
|
|||
Depreciation and amortization
|
54.2
|
|
|
54.7
|
|
|
56.9
|
|
|||
Restructuring charges, net
|
16.7
|
|
|
12.4
|
|
|
11.3
|
|
|||
Stock-based compensation
|
15.7
|
|
|
8.3
|
|
|
3.8
|
|
|||
LIFO reserve increase (decrease)
|
7.1
|
|
|
3.6
|
|
|
(7.3
|
)
|
|||
Non-restructuring asset impairment charges
|
8.4
|
|
|
7.7
|
|
|
2.6
|
|
|||
Non-restructuring severance charges
|
3.5
|
|
|
3.1
|
|
|
3.3
|
|
|||
Non-restructuring pension charges
|
2.2
|
|
|
2.4
|
|
|
—
|
|
|||
Acquisition and integration expenses
|
36.5
|
|
|
25.9
|
|
|
34.9
|
|
|||
Fair value adjustment on Tax Receivable Agreement contingent liability
|
(9.4
|
)
|
|
4.9
|
|
|
1.9
|
|
|||
Fair value adjustment on contingent consideration liability
|
2.0
|
|
|
—
|
|
|
—
|
|
|||
Escheat audit contingent liability
|
7.5
|
|
|
—
|
|
|
—
|
|
|||
Other
|
2.7
|
|
|
0.9
|
|
|
2.7
|
|
|||
Adjustment for Corporate & Other
|
184.3
|
|
|
176.4
|
|
|
186.0
|
|
|||
Adjusted EBITDA for reportable segments
|
$
|
360.7
|
|
|
$
|
368.6
|
|
|
$
|
368.0
|
|
(in millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Packaging
|
$
|
1,192.2
|
|
|
$
|
875.9
|
|
Facility Solutions
|
416.9
|
|
|
397.9
|
|
||
Print
|
801.8
|
|
|
874.1
|
|
||
Publishing
|
168.6
|
|
|
170.0
|
|
||
Corporate & Other
|
128.9
|
|
|
165.8
|
|
||
Total assets
|
$
|
2,708.4
|
|
|
$
|
2,483.7
|
|
|
Net Sales
|
|
Property and Equipment, Net
|
||||||||||||||||
|
Year Ended December 31,
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|
||||||||||||
U.S.
|
$
|
7,510.9
|
|
|
$
|
7,552.3
|
|
|
$
|
7,961.3
|
|
|
$
|
300.6
|
|
|
$
|
333.8
|
|
Canada
|
682.0
|
|
|
631.2
|
|
|
628.9
|
|
|
36.7
|
|
|
35.0
|
|
|||||
Rest of world
|
171.8
|
|
|
143.1
|
|
|
127.5
|
|
|
2.9
|
|
|
3.0
|
|
|||||
Total
|
$
|
8,364.7
|
|
|
$
|
8,326.6
|
|
|
$
|
8,717.7
|
|
|
$
|
340.2
|
|
|
$
|
371.8
|
|
|
2017
|
||||||||||||||
|
Three Months Ended
|
||||||||||||||
(in millions, except per share data)
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net sales
|
$
|
1,994.6
|
|
|
$
|
2,028.9
|
|
|
$
|
2,116.8
|
|
|
$
|
2,224.4
|
|
Cost of products sold
|
1,629.3
|
|
|
1,660.5
|
|
|
1,736.6
|
|
|
1,820.2
|
|
||||
Net income (loss)
|
(2.2
|
)
|
|
(9.1
|
)
|
|
(14.3
|
)
|
|
12.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares outstanding – basic
|
15.69
|
|
15.70
|
|
15.70
|
|
15.70
|
||||||||
Weighted-average number of shares outstanding – diluted
|
15.69
|
|
15.70
|
|
15.70
|
|
15.98
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
$
|
(0.14
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share
|
(0.14
|
)
|
|
(0.58
|
)
|
|
(0.91
|
)
|
|
0.77
|
|
||||
(1)
See
Note 13, Earning (Loss) Per Share
, for discussion about the shares of common stock utilized in the computation of basic and diluted earnings per share for the year ended December 31, 2017.
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
2016
|
||||||||||||||
|
Three Months Ended
|
||||||||||||||
(in millions, except per share data)
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net sales
|
$
|
2,019.8
|
|
|
$
|
2,060.8
|
|
|
$
|
2,126.6
|
|
|
$
|
2,119.4
|
|
Cost of products sold
|
1,654.5
|
|
|
1,687.9
|
|
|
1,743.8
|
|
|
1,740.2
|
|
||||
Net income
|
3.3
|
|
|
7.9
|
|
|
5.6
|
|
|
4.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares outstanding – basic
|
16.00
|
|
16.00
|
|
16.00
|
|
15.87
|
||||||||
Weighted-average number of shares outstanding – diluted
|
16.00
|
|
16.00
|
|
16.27
|
|
16.21
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
0.21
|
|
|
$
|
0.49
|
|
|
$
|
0.35
|
|
|
$
|
0.26
|
|
Diluted earnings per share
|
0.21
|
|
|
0.49
|
|
|
0.34
|
|
|
0.26
|
|
|
2017
|
||||||||||||||
(in millions)
|
Three Months Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Acquisition and integration expenses
|
$
|
6.4
|
|
|
$
|
7.5
|
|
|
$
|
14.2
|
|
|
$
|
8.4
|
|
Restructuring charges, net
|
4.1
|
|
|
23.2
|
|
|
2.7
|
|
|
(13.3
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
|
2016
|
||||||||||||||
(in millions)
|
Three Months Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Acquisition and integration expenses
|
$
|
6.2
|
|
|
$
|
6.1
|
|
|
$
|
7.3
|
|
|
$
|
6.3
|
|
Restructuring charges, net
|
1.7
|
|
|
(0.3
|
)
|
|
5.8
|
|
|
5.2
|
|
Exhibit No.
|
|
Description
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.4
|
|
|
|
|
|
2.5
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
10.1
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8†
|
|
|
|
|
|
10.9†
|
|
|
|
|
|
10.10†*
|
|
|
|
|
|
10.11†*
|
|
|
|
|
|
10.12†
|
|
|
|
|
|
10.13†
|
|
|
|
|
|
10.14†
|
|
|
|
|
|
10.15†
|
|
|
|
|
|
10.16†
|
|
|
|
|
|
|
|
VERITIV CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Mary A. Laschinger
|
|
|
|
Name: Mary A. Laschinger
|
|
|
|
Title: Chairman and Chief Executive Officer
|
(i)
|
Principal executive officer:
|
|
|
/s/ Mary A. Laschinger
|
Chairman of the Board of Directors and Chief Executive Officer
|
|
Mary A. Laschinger
|
|
|
|
|
(ii)
|
Principal financial officer:
|
|
|
/s/ Stephen J. Smith
|
Senior Vice President and Chief Financial Officer
|
|
Stephen J. Smith
|
|
|
|
|
(iii)
|
Principal accounting officer:
|
|
|
/s/ W. Forrest Bell
|
Chief Accounting Officer
|
|
W. Forrest Bell
|
|
|
|
|
(iv)
|
Directors:
|
|
|
|
|
|
/s/ David E. Flitman
|
Director
|
|
David E. Flitman
|
|
|
|
|
|
/s/ Daniel T. Henry
|
Director
|
|
Daniel T. Henry
|
|
|
|
|
|
/s/ Liza K. Landsman
|
Director
|
|
Liza K. Landsman
|
|
|
|
|
|
/s/ Tracy A. Leinbach
|
Director
|
|
Tracy A. Leinbach
|
|
|
|
|
|
|
|
|
/s/ William E. Mitchell
|
Director
|
|
William E. Mitchell
|
|
|
|
|
|
/s/ Michael P. Muldowney
|
Director
|
|
Michael P. Muldowney
|
|
|
|
|
|
/s/ Charles G. Ward, III
|
Director
|
|
Charles G. Ward, III
|
|
|
|
|
|
/s/ John J. Zillmer
|
Director
|
|
John J. Zillmer
|
|
1)
|
You have not retained and will not retain any documents (in whatever form, whether hard copy or electronic) containing confidential, trade secret, or proprietary information belonging to any of your former employers;
|
2)
|
You have maintained and will continue to maintain your duty of loyalty to your former employer until your termination date with that employer;
|
3)
|
During your employment with Veritiv, you will not utilize or disclose any confidential, trade secret, or proprietary information belonging to any of your former employers; and
|
4)
|
If you are subject to a non-compete agreement and/or any other restrictive covenant with a former employer or any other entity, you have advised us of the existence of that restrictive covenant and have truthfully and accurately represented to us your understanding that the restrictive covenant will not prevent you from performing the duties of the position that we have offered you.
|
Name of Subsidiary
|
Jurisdiction
|
Alco Realty, Inc.
|
Delaware
|
All American Containers, LLC
|
Florida
|
All American Containers of Georgia, LLC
|
Delaware
|
All American Containers of Puerto Rico, LLC
|
Florida
|
All American Containers of Southern California Inc.
|
California
|
All American Containers of Tampa, LLC
|
Florida
|
All American Containers of Texas Inc.
|
Delaware
|
All American Containers of the Midwest Inc.
|
Delaware
|
All American Containers of the Northeast, LLC
|
Delaware
|
All American Containers of the Pacific Coast Inc.
|
California
|
Graph Comm Holdings International, Inc.
|
California
|
Graph Comm International (UK Branch Office)
|
United Kingdom
|
MC xpedx, S. de R.L. de C.V.
|
Mexico
|
Oficina Central de Servicios, S. A. de C. V.
|
Mexico
|
Papelera Kif de Mexico, S. A. de C. V.
|
Mexico
|
Paper Corporation of North America
|
Delaware
|
Unisource Belgium BVBA
|
Belgium
|
Unisource Global Solutions - Malaysia Sdn. Bhd.
|
Malaysia
|
Unisource Global Solutions - Singapore Pte. Ltd.
|
Singapore
|
Unisource International China, Inc.
|
Delaware
|
Unisource International Holdings, Inc.
|
Delaware
|
Unisource International Holdings, Inc. Chengdu Rep Office
|
China
|
Unisource International Holdings, Inc. Shanghai Rep Office
|
China
|
Unisource International Holdings, Inc. Shenzhen Rep Office
|
China
|
Unisource International Holdings Poland, Inc.
|
Delaware
|
Unisource International Holdings Poland, Inc. (Poland Branch Office)
|
Poland
|
Unisource International SA, Inc.
|
Delaware
|
Unisource Trading (Shanghai) Co., Ltd
|
China
|
Unisource Trading (Shanghai) Co., Ltd - Shenzhen Branch
|
China
|
Veritiv Canada, Inc.
|
Canada
|
Veritiv Europe GmbH
|
Germany
|
Veritiv Netherlands B.V.
|
Netherlands
|
Veritiv Operating Company
|
Delaware
|
Veritiv Publishing & Print Management, Inc.
|
California
|
Veritiv Publishing & Print Management, Inc. (Mexico Branch Office)
|
Mexico
|
Veritiv, S.A. de C.V.
|
Mexico
|
xpedx Holdings S.A.R.L.
|
Luxembourg
|
xpedx International Inc.
|
Delaware
|
xpedx Mexico Nominee Holdings S.A.R.L.
|
Luxembourg
|
1.
|
I have reviewed this Annual Report on Form 10-K of Veritiv Corporation;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 1, 2018
|
/s/ Mary A. Laschinger
|
Mary A. Laschinger
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Veritiv Corporation;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 1, 2018
|
/s/ Stephen J. Smith
|
Stephen J. Smith
|
Senior Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Mary A. Laschinger
|
Mary A. Laschinger
|
Chairman and Chief Executive Officer
|
March 1, 2018
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Stephen J. Smith
|
Stephen J. Smith
|
Senior Vice President and Chief Financial Officer
|
March 1, 2018
|