Securities registered pursuant to Section 12(b) of the Act:
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|
Title of each class
|
Name of each exchange on which registered
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Common stock, $0.01 par value
|
New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None
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Large accelerated filer
|
¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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Part I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV
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Item 15.
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Item 16.
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•
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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, 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.
|
•
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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.
|
•
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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
|
•
|
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
|
|
58
|
|
Chairman and Chief Executive Officer
|
Stephen J. Smith
|
|
55
|
|
Senior Vice President and Chief Financial Officer
|
Salvatore A. Abbate
|
|
50
|
|
Senior Vice President and Chief Commercial Officer
|
Charles B. Henry
|
|
54
|
|
Senior Vice President Strategic Initiatives
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Mark W. Hianik
|
|
58
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
Thomas S. Lazzaro
|
|
55
|
|
Senior Vice President Sales
|
Elizabeth A. Patrick
|
|
51
|
|
Senior Vice President and Chief Human Resources Officer
|
Tracy L. Pearson
|
|
48
|
|
Senior Vice President Supply Chain Operations
|
Daniel J. Watkoske
|
|
50
|
|
Senior Vice President Print
|
•
|
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 increased interest rates on our borrowings due to the variable rate exposure associated with the ABL Facility, which can be worsened by (i) increased interest rates up to the level covered by our interest rate cap, (ii) increased interest rates on borrowings in excess of the notional amount of our interest rate cap, and (iii) the expiration of our interest rate cap without an equivalent replacement;
|
•
|
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;
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•
|
prohibit shareholder action by written consent, unless initiated by the holders of not less than 20% of the outstanding shares of common stock;
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•
|
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
|
150
|
|
|
10
|
|
|
160
|
|
Square feet (in millions)
|
18.3
|
|
|
1.1
|
|
|
19.4
|
|
•
|
Anixter International Inc.
|
•
|
Genuine Parts Company
|
•
|
ScanSource, Inc.
|
•
|
Applied Industrial Technologies, Inc.
|
•
|
Graphic Packaging Holding Company
|
•
|
Sealed Air Corporation
|
•
|
Arrow Electronics, Inc.
|
•
|
InnerWorkings, Inc.
|
•
|
Sonoco Products Company
|
•
|
Avery Dennison Corporation
|
•
|
International Paper Company
|
•
|
W.W. Grainger, Inc.
|
•
|
Avnet, Inc.
|
•
|
Kaman Corporation
|
•
|
WESCO International, Inc.
|
•
|
Bemis Company, Inc.
|
•
|
MSC Industrial Direct Co., Inc.
|
•
|
WestRock Company
|
•
|
Brady Corporation
|
•
|
Neenah Inc.
|
|
|
•
|
Deluxe Corporation
|
•
|
Office Depot, Inc.
|
|
|
•
|
Domtar Corporation
|
•
|
Packaging Corporation of America
|
|
|
•
|
Ennis, Inc.
|
•
|
P.H. Glatfelter Company
|
|
|
•
|
Essendant Inc.
|
•
|
R.R. Donnelley & Sons Company
|
|
|
•
|
Fastenal Company
|
•
|
Resolute Forest Products, Inc.
|
|
|
(in millions, except per share data)
|
As of and for the Year Ended December 31,
|
||||||||||||||||||
Statements of Operations Data
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
(1)
|
||||||||||
Net sales
|
$
|
8,696.2
|
|
|
$
|
8,364.7
|
|
|
$
|
8,326.6
|
|
|
$
|
8,717.7
|
|
|
$
|
7,406.5
|
|
Cost of products sold
|
7,155.7
|
|
|
6,846.6
|
|
|
6,826.4
|
|
|
7,160.3
|
|
|
6,180.9
|
|
|||||
Distribution expenses
|
550.5
|
|
|
516.9
|
|
|
505.1
|
|
|
521.8
|
|
|
426.2
|
|
|||||
Selling and administrative expenses
(2)
|
867.6
|
|
|
875.7
|
|
|
827.9
|
|
|
856.0
|
|
|
690.5
|
|
|||||
Depreciation and amortization
|
53.5
|
|
|
54.2
|
|
|
54.7
|
|
|
56.9
|
|
|
37.6
|
|
|||||
Integration, acquisition and merger expenses
|
31.8
|
|
|
36.5
|
|
|
25.9
|
|
|
34.9
|
|
|
75.1
|
|
|||||
Restructuring charges, net
|
21.3
|
|
|
16.7
|
|
|
12.4
|
|
|
11.3
|
|
|
4.0
|
|
|||||
Operating income (loss)
(2)
|
15.8
|
|
|
18.1
|
|
|
74.2
|
|
|
76.5
|
|
|
(7.8
|
)
|
|||||
Income tax expense (benefit)
|
5.5
|
|
|
11.4
|
|
|
19.8
|
|
|
18.2
|
|
|
(2.1
|
)
|
|||||
Income (loss) from continuing operations
|
(15.7
|
)
|
|
(13.3
|
)
|
|
21.0
|
|
|
26.7
|
|
|
(19.5
|
)
|
|||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||||
Net income (loss)
|
(15.7
|
)
|
|
(13.3
|
)
|
|
21.0
|
|
|
26.7
|
|
|
(19.6
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.99
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
1.31
|
|
|
$
|
1.67
|
|
|
$
|
(1.61
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||||
Basic earnings (loss) per share
|
$
|
(0.99
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
1.31
|
|
|
$
|
1.67
|
|
|
$
|
(1.62
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.99
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
1.30
|
|
|
$
|
1.67
|
|
|
$
|
(1.61
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||||
Diluted earnings (loss) per share
|
$
|
(0.99
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
1.30
|
|
|
$
|
1.67
|
|
|
$
|
(1.62
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheets Data (at period end)
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable, net
|
$
|
1,181.4
|
|
|
$
|
1,174.3
|
|
|
$
|
1,048.3
|
|
|
$
|
1,037.5
|
|
|
$
|
1,115.1
|
|
Inventories
|
688.2
|
|
|
722.7
|
|
|
707.9
|
|
|
720.6
|
|
|
673.2
|
|
|||||
Total assets
(4)
|
2,529.7
|
|
|
2,708.4
|
|
|
2,483.7
|
|
|
2,476.9
|
|
|
2,574.5
|
|
|||||
Long-term debt, net of current maturities
(5)
|
963.6
|
|
|
908.3
|
|
|
749.2
|
|
|
800.5
|
|
|
855.0
|
|
|||||
Financing obligations, less current portion
(4)
|
23.6
|
|
|
181.6
|
|
|
176.1
|
|
|
197.8
|
|
|
212.4
|
|
|||||
Defined benefit pension obligations
|
21.1
|
|
|
24.4
|
|
|
27.6
|
|
|
28.7
|
|
|
36.3
|
|
|||||
Other non-current liabilities
|
128.6
|
|
|
137.0
|
|
|
121.2
|
|
|
105.6
|
|
|
107.2
|
|
•
|
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 Veritiv manages a world class network of leading suppliers in most facilities solutions categories. Additionally, the Company offers 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 Veritiv's customers.
|
|
Year Ended December 31,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
$
|
%
|
|
$
|
%
|
||||||||||||
Net sales
|
$
|
8,696.2
|
|
|
$
|
8,364.7
|
|
|
$
|
8,326.6
|
|
|
$
|
331.5
|
|
4.0
|
%
|
|
$
|
38.1
|
|
0.5
|
%
|
Cost of products sold (exclusive of depreciation and amortization shown separately below)
|
7,155.7
|
|
|
6,846.6
|
|
|
6,826.4
|
|
|
309.1
|
|
4.5
|
%
|
|
20.2
|
|
0.3
|
%
|
|||||
Distribution expenses
|
550.5
|
|
|
516.9
|
|
|
505.1
|
|
|
33.6
|
|
6.5
|
%
|
|
11.8
|
|
2.3
|
%
|
|||||
Selling and administrative expenses
(1)
|
867.6
|
|
|
875.7
|
|
|
827.9
|
|
|
(8.1
|
)
|
(0.9
|
)%
|
|
47.8
|
|
5.8
|
%
|
|||||
Depreciation and amortization
|
53.5
|
|
|
54.2
|
|
|
54.7
|
|
|
(0.7
|
)
|
(1.3
|
)%
|
|
(0.5
|
)
|
(0.9
|
)%
|
|||||
Integration and acquisition expenses
|
31.8
|
|
|
36.5
|
|
|
25.9
|
|
|
(4.7
|
)
|
(12.9
|
)%
|
|
10.6
|
|
40.9
|
%
|
|||||
Restructuring charges, net
|
21.3
|
|
|
16.7
|
|
|
12.4
|
|
|
4.6
|
|
27.5
|
%
|
|
4.3
|
|
34.7
|
%
|
|||||
Operating income
(1)
|
15.8
|
|
|
18.1
|
|
|
74.2
|
|
|
(2.3
|
)
|
(12.7
|
)%
|
|
(56.1
|
)
|
(75.6
|
)%
|
|||||
Interest expense, net
|
42.3
|
|
|
31.2
|
|
|
27.5
|
|
|
11.1
|
|
35.6
|
%
|
|
3.7
|
|
13.5
|
%
|
|||||
Other (income) expense, net
(1)
|
(16.3
|
)
|
|
(11.2
|
)
|
|
5.9
|
|
|
(5.1
|
)
|
(45.5
|
)%
|
|
(17.1
|
)
|
*
|
|
|||||
Income (loss) before income taxes
|
(10.2
|
)
|
|
(1.9
|
)
|
|
40.8
|
|
|
(8.3
|
)
|
*
|
|
|
(42.7
|
)
|
(104.7
|
)%
|
|||||
Income tax expense
|
5.5
|
|
|
11.4
|
|
|
19.8
|
|
|
(5.9
|
)
|
(51.8
|
)%
|
|
(8.4
|
)
|
(42.4
|
)%
|
|||||
Net income (loss)
|
$
|
(15.7
|
)
|
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
|
$
|
(2.4
|
)
|
(18.0
|
)%
|
|
$
|
(34.3
|
)
|
(163.3
|
)%
|
•
|
2018
compared to
2017
:
Net sales increased by $331.5 million, or 4.0%, primarily due to a $172.5 million increase in net sales for the eight months with no comparable sales related to the AAC acquisition on August 31, 2017. Increases in net sales in the Packaging and Publishing segments were partially offset by a decline in the Print segment. See the “Segment Results” section for additional discussion.
|
•
|
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.
|
•
|
2018
compared to
2017
:
Cost of products sold increased by $309.1 million, or 4.5%, primarily due to the growth in net sales as previously discussed. See the “Segment Results” section for additional discussion.
|
•
|
2017
compared to
2016
:
Cost of products sold increased by $20.2 million, or 0.3%, primarily due to the growth in net sales as previously discussed. See the “Segment Results” section for additional discussion.
|
•
|
2018
compared to
2017
:
Distribution expenses increased by $33.6 million or 6.5%. The increase was primarily due to (i) a $10.9 million increase in personnel expense primarily due to the withdrawal from a multi-employer pension plan in the year ended December 31, 2018, (ii) a $10.3 million increase for the eight months with no comparable expenses related to the AAC acquisition on August 31, 2017, (iii) a $6.9 million increase in facilities rent primarily due to r
|
•
|
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 costs, 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 expenses. The offsetting decreases were primarily driven by warehouse consolidations.
|
•
|
2018
compared to
2017
:
Selling and administrative expenses decreased by $8.1 million or 0.9%. The decrease was primarily due to a (i) $17.8 million decrease in compensation expense mainly driven by a decrease in personnel and commission expenses primarily related to the Print segment as well as a decrease in incentive compensation expense, (ii) a $7.7 million decrease from asset impairments related to goodwill and customer relationships in the Veritiv logistics solutions business in the year ended December 31, 2017, (iii) a $3.8 million decrease in legal expense, (iv) a $2.8 million decrease in travel and entertainment expenses, (v) a net gain of $2.7 million related to a warehouse sale and (vi) a $2.1 million decrease in marketing and communications expense. The decrease was partially offset by a $17.6 million increase for the eight months with no comparable expenses related to the AAC acquisition on August 31, 2017 and an $11.1 million increase in bad debt expense primarily driven by the Print segment. The increase in bad debt expense was primarily due to additional reserves related to certain customers with declining financial conditions during 2018. See
Note 4
of the Notes to Consolidated Financial Statements for information related to the Print segment restructuring plan.
|
•
|
2017
compared to
2016
:
Selling and administrative expenses increased by $47.8 million or 5.8%. 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. 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 $7.7 million of impairment charges related to the impairment of the logistics solutions business goodwill and customer relationship intangible asset and $0.7 million for the impairment of software.
|
•
|
2018
compared to
2017
:
Depreciation and amortization expense decreased $0.7 million.
|
•
|
2017
compared to
2016
:
Depreciation and amortization expense decreased $0.5 million.
|
•
|
2018
compared to
2017
:
Other (income) expense, net, was income of $16.3 million. This was a net other income increase of $5.1 million, compared to the same period in 2017. In 2018 there was a $12.3 million reduction in the estimated fair value of the AAC contingent consideration compared to an increase of $2.0 million in 2017. See
Note 12
of the Notes to Consolidated Financial Statements for information related to the AAC contingent consideration. The remaining income was primarily driven by changes associated with the Tax Receivable Agreement. See
Note 10
of the Notes to Consolidated Financial Statements for information related to the Tax Receivable Agreement.
|
•
|
2017
compared to
2016
:
Other (income) expense, net was income of $11.2 million in 2017 compared to expense of $5.9 million in 2016. The $17.1 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 35.0% to 21.0%. 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 9
of the Notes to Consolidated Financial Statements for information related to the Tax Act.
|
•
|
A $1.7 million expense for the impact of stock compensation vesting.
|
•
|
A $1.4 million expense for the impact of Global Intangible Low Taxed Income.
|
•
|
A $1.3 million expense recorded in 2018 for the accounting completed under the measurement period related to the Tax Act under Staff Accounting Bulletin 118, totaling $31.5 million of cumulative effect of which $24.0 million is remeasurement of our deferred taxes and $7.5 million for the one-time transition tax. See
Note 9
of the Notes to the Consolidated Financial Statements for additional details regarding the Tax Act.
|
•
|
A $1.0 million benefit for certain tax credits.
|
•
|
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.
|
•
|
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, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,547.1
|
|
|
$
|
1,311.7
|
|
|
$
|
2,676.7
|
|
|
$
|
1,019.2
|
|
|
$
|
141.5
|
|
Adjusted EBITDA
|
246.7
|
|
|
29.0
|
|
|
64.0
|
|
|
24.6
|
|
|
(178.9
|
)
|
|||||
Adjusted EBITDA as a % of net sales
|
7.0
|
%
|
|
2.2
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
*
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
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,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
$
|
%
|
|
$
|
%
|
||||||||||||
Net sales
|
$
|
3,547.1
|
|
|
$
|
3,157.8
|
|
|
$
|
2,854.2
|
|
|
$
|
389.3
|
|
12.3
|
%
|
|
$
|
303.6
|
|
10.6
|
%
|
Adjusted EBITDA
|
246.7
|
|
|
238.0
|
|
|
221.2
|
|
|
8.7
|
|
3.7
|
%
|
|
16.8
|
|
7.6
|
%
|
|||||
Adjusted EBITDA as a % of net sales
|
7.0
|
%
|
|
7.5
|
%
|
|
7.7
|
%
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
$
|
%
|
|
$
|
%
|
||||||||||||
Net sales
|
$
|
1,311.7
|
|
|
$
|
1,309.7
|
|
|
$
|
1,271.6
|
|
|
$
|
2.0
|
|
0.2
|
%
|
|
$
|
38.1
|
|
3.0
|
%
|
Adjusted EBITDA
|
29.0
|
|
|
35.5
|
|
|
47.0
|
|
|
(6.5
|
)
|
(18.3
|
)%
|
|
(11.5
|
)
|
(24.5
|
)%
|
|||||
Adjusted EBITDA as a % of net sales
|
2.2
|
%
|
|
2.7
|
%
|
|
3.7
|
%
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
$
|
%
|
|
$
|
%
|
||||||||||||
Net sales
|
$
|
2,676.7
|
|
|
$
|
2,793.7
|
|
|
$
|
3,047.4
|
|
|
$
|
(117.0
|
)
|
(4.2
|
)%
|
|
$
|
(253.7
|
)
|
(8.3
|
)%
|
Adjusted EBITDA
|
64.0
|
|
|
60.8
|
|
|
76.8
|
|
|
3.2
|
|
5.3
|
%
|
|
(16.0
|
)
|
(20.8
|
)%
|
|||||
Adjusted EBITDA as a % of net sales
|
2.4
|
%
|
|
2.2
|
%
|
|
2.5
|
%
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
$
|
%
|
|
$
|
%
|
||||||||||||
Net sales
|
$
|
1,019.2
|
|
|
$
|
958.0
|
|
|
$
|
1,033.6
|
|
|
$
|
61.2
|
|
6.4
|
%
|
|
$
|
(75.6
|
)
|
(7.3
|
)%
|
Adjusted EBITDA
|
24.6
|
|
|
26.4
|
|
|
23.6
|
|
|
(1.8
|
)
|
(6.8
|
)%
|
|
2.8
|
|
11.9
|
%
|
|||||
Adjusted EBITDA as a % of net sales
|
2.4
|
%
|
|
2.8
|
%
|
|
2.3
|
%
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
$
|
%
|
|
$
|
%
|
||||||||||||
Net sales
|
$
|
141.5
|
|
|
$
|
145.5
|
|
|
$
|
119.8
|
|
|
$
|
(4.0
|
)
|
(2.7
|
)%
|
|
$
|
25.7
|
|
21.5
|
%
|
Adjusted EBITDA
|
(178.9
|
)
|
|
(184.3
|
)
|
|
(176.4
|
)
|
|
5.4
|
|
2.9
|
%
|
|
(7.9
|
)
|
(4.5
|
)%
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by (used for):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
15.0
|
|
|
$
|
36.6
|
|
|
$
|
140.2
|
|
Investing activities
|
(21.7
|
)
|
|
(126.2
|
)
|
|
(34.4
|
)
|
|||
Financing activities
|
(8.7
|
)
|
|
99.2
|
|
|
(89.9
|
)
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Cash held in the U.S.
|
|
$
|
50.5
|
|
|
$
|
64.0
|
|
Cash held in foreign subsidiaries
|
|
13.8
|
|
|
16.3
|
|
||
Total Cash
|
|
$
|
64.3
|
|
|
$
|
80.3
|
|
|
Payment Due by Period
|
||||||||||||||||||
(in millions)
|
2019
|
|
2020 – 2021
|
|
2022 – 2023
|
|
After 2023
|
|
Total
|
||||||||||
Equipment capital lease obligations
(1)
|
$
|
7.8
|
|
|
$
|
14.3
|
|
|
$
|
11.3
|
|
|
$
|
7.4
|
|
|
$
|
40.8
|
|
Financing obligation
(1,2)
|
1.5
|
|
|
3.0
|
|
|
3.4
|
|
|
15.6
|
|
|
23.5
|
|
|||||
Other lease type obligations
(3)
|
108.0
|
|
|
180.4
|
|
|
118.7
|
|
|
173.4
|
|
|
580.5
|
|
|||||
ABL Facility
(4)
|
42.6
|
|
|
1,000.8
|
|
|
—
|
|
|
—
|
|
|
1,043.4
|
|
|||||
Deferred compensation
(5)
|
3.4
|
|
|
6.5
|
|
|
5.5
|
|
|
7.2
|
|
|
22.6
|
|
|||||
Tax Receivable Agreement contingent liability
(6)
|
7.8
|
|
|
7.1
|
|
|
11.2
|
|
|
20.6
|
|
|
46.7
|
|
|||||
AAC contingent liability
(7)
|
9.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|||||
Multi-employer pension plan ("MEPP") withdrawal obligations
(8)
|
0.7
|
|
|
1.3
|
|
|
1.4
|
|
|
9.2
|
|
|
12.6
|
|
|||||
Federal income tax liability
(9)
|
0.5
|
|
|
0.9
|
|
|
1.4
|
|
|
2.8
|
|
|
5.6
|
|
|||||
Total
|
$
|
181.7
|
|
|
$
|
1,214.3
|
|
|
$
|
152.9
|
|
|
$
|
236.2
|
|
|
$
|
1,785.1
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
Restructuring charges, net
|
|
Distribution expenses
|
|
Total Net Charges
|
||||||
2018
|
$
|
(2.8
|
)
|
|
$
|
11.2
|
|
|
$
|
8.4
|
|
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
|
|
|
||||||
2018
|
$
|
0.7
|
|
|
$
|
32.5
|
|
|
|
||
2017
|
0.7
|
|
|
27.2
|
|
|
|
Assumption
|
|
Change
|
|
Net Periodic Benefit Cost
|
|
Projected Benefit Obligation
|
Discount rate
|
|
1% increase
|
|
$0.5
|
|
$(4.7)
|
|
|
1% decrease
|
|
0.8
|
|
6.2
|
Return on plan assets
|
|
1% increase
|
|
(1.5)
|
|
N/A
|
|
|
1% decrease
|
|
1.5
|
|
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,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales (including sales to related party of $28.0, $32.2 and $35.6, respectively)
|
$
|
8,696.2
|
|
|
$
|
8,364.7
|
|
|
$
|
8,326.6
|
|
Cost of products sold (including purchases from related party of $146.5, $181.6 and $224.9, respectively) (exclusive of depreciation and amortization shown separately below)
|
7,155.7
|
|
|
6,846.6
|
|
|
6,826.4
|
|
|||
Distribution expenses
|
550.5
|
|
|
516.9
|
|
|
505.1
|
|
|||
Selling and administrative expenses
|
867.6
|
|
|
875.7
|
|
|
827.9
|
|
|||
Depreciation and amortization
|
53.5
|
|
|
54.2
|
|
|
54.7
|
|
|||
Integration and acquisition expenses
|
31.8
|
|
|
36.5
|
|
|
25.9
|
|
|||
Restructuring charges, net
|
21.3
|
|
|
16.7
|
|
|
12.4
|
|
|||
Operating income
|
15.8
|
|
|
18.1
|
|
|
74.2
|
|
|||
Interest expense, net
|
42.3
|
|
|
31.2
|
|
|
27.5
|
|
|||
Other (income) expense, net
|
(16.3
|
)
|
|
(11.2
|
)
|
|
5.9
|
|
|||
Income (loss) before income taxes
|
(10.2
|
)
|
|
(1.9
|
)
|
|
40.8
|
|
|||
Income tax expense
|
5.5
|
|
|
11.4
|
|
|
19.8
|
|
|||
Net income (loss)
|
$
|
(15.7
|
)
|
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
|
|
|
|
|
|
||||||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
(0.99
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
1.31
|
|
Diluted earnings (loss) per share
|
$
|
(0.99
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
1.30
|
|
|
|
|
|
|
|
||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
15.82
|
|
|
15.70
|
|
|
15.97
|
|
|||
Diluted
|
15.82
|
|
|
15.70
|
|
|
16.15
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
(15.7
|
)
|
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(6.8
|
)
|
|
5.7
|
|
|
(2.1
|
)
|
|||
Change in fair value of cash flow hedge, net of $0.2, $0.0 and $0.1 tax, respectively
|
0.5
|
|
|
0.0
|
|
|
(0.2
|
)
|
|||
Pension liability adjustments, net of $0.0, $(0.6) and $(0.3) tax, respectively
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(1.7
|
)
|
|||
Other comprehensive income (loss)
|
(6.4
|
)
|
|
5.5
|
|
|
(4.0
|
)
|
|||
Total comprehensive income (loss)
|
$
|
(22.1
|
)
|
|
$
|
(7.8
|
)
|
|
$
|
17.0
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
64.3
|
|
|
$
|
80.3
|
|
Accounts receivable, less allowances of $62.0 and $44.0, respectively
|
1,181.4
|
|
|
1,174.3
|
|
||
Related party receivable
|
3.2
|
|
|
3.3
|
|
||
Inventories
|
688.2
|
|
|
722.7
|
|
||
Other current assets
|
147.2
|
|
|
133.5
|
|
||
Total current assets
|
2,084.3
|
|
|
2,114.1
|
|
||
Property and equipment (net of accumulated depreciation and amortization of $320.7 and $314.6, respectively)
|
206.7
|
|
|
340.2
|
|
||
Goodwill
|
99.6
|
|
|
99.6
|
|
||
Other intangibles, net
|
57.2
|
|
|
64.1
|
|
||
Deferred income tax assets
|
56.5
|
|
|
59.6
|
|
||
Other non-current assets
|
25.4
|
|
|
30.8
|
|
||
Total assets
|
$
|
2,529.7
|
|
|
$
|
2,708.4
|
|
Liabilities and shareholders' equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
641.9
|
|
|
$
|
680.1
|
|
Related party payable
|
9.3
|
|
|
8.5
|
|
||
Accrued payroll and benefits
|
56.5
|
|
|
73.5
|
|
||
Other accrued liabilities
|
134.7
|
|
|
134.6
|
|
||
Current maturities of long-term debt
|
6.7
|
|
|
2.9
|
|
||
Financing obligations, current portion (including obligations to related party of $0.0 and $7.1, respectively)
|
0.6
|
|
|
7.8
|
|
||
Total current liabilities
|
849.7
|
|
|
907.4
|
|
||
Long-term debt, net of current maturities
|
963.6
|
|
|
908.3
|
|
||
Financing obligations, less current portion (including obligations to related party of $0.0 and $155.2, respectively)
|
23.6
|
|
|
181.6
|
|
||
Defined benefit pension obligations
|
21.1
|
|
|
24.4
|
|
||
Other non-current liabilities
|
128.6
|
|
|
137.0
|
|
||
Total liabilities
|
1,986.6
|
|
|
2,158.7
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
|
|
||
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; shares issued - 16.2 million and 16.0 million, respectively; shares outstanding - 15.9 million and 15.7 million, respectively
|
0.2
|
|
|
0.2
|
|
||
Additional paid-in capital
|
605.7
|
|
|
590.2
|
|
||
Accumulated (deficit) earnings
|
(8.5
|
)
|
|
6.4
|
|
||
Accumulated other comprehensive loss
|
(40.7
|
)
|
|
(33.5
|
)
|
||
Treasury stock at cost - 0.3 million shares at December 31, 2018 and 2017
|
(13.6
|
)
|
|
(13.6
|
)
|
||
Total shareholders' equity
|
543.1
|
|
|
549.7
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,529.7
|
|
|
$
|
2,708.4
|
|
|
Year Ended December 31,
|
||||||||||
Operating activities
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
(15.7
|
)
|
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
Depreciation and amortization
|
53.5
|
|
|
54.2
|
|
|
54.7
|
|
|||
Amortization and write-off of deferred financing fees
|
2.6
|
|
|
2.6
|
|
|
5.6
|
|
|||
Net (gains) on dispositions of property and equipment
|
(18.5
|
)
|
|
(25.7
|
)
|
|
(0.8
|
)
|
|||
Goodwill and long-lived asset impairment charges
|
0.4
|
|
|
8.4
|
|
|
7.7
|
|
|||
Provision for allowance for doubtful accounts
|
27.1
|
|
|
15.9
|
|
|
2.2
|
|
|||
Deferred income tax provision
|
2.0
|
|
|
1.9
|
|
|
11.1
|
|
|||
Stock-based compensation
|
18.1
|
|
|
15.7
|
|
|
8.3
|
|
|||
Other non-cash items, net
|
(8.3
|
)
|
|
(8.8
|
)
|
|
3.7
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable and related party receivable
|
(43.9
|
)
|
|
(101.9
|
)
|
|
(14.7
|
)
|
|||
Inventories
|
26.4
|
|
|
30.1
|
|
|
13.1
|
|
|||
Other current assets
|
(23.2
|
)
|
|
(8.4
|
)
|
|
(11.4
|
)
|
|||
Accounts payable and related party payable
|
(15.9
|
)
|
|
48.3
|
|
|
69.9
|
|
|||
Accrued payroll and benefits
|
(16.6
|
)
|
|
(11.3
|
)
|
|
(40.9
|
)
|
|||
Other accrued liabilities
|
17.2
|
|
|
13.6
|
|
|
(3.6
|
)
|
|||
Other
|
9.8
|
|
|
15.3
|
|
|
14.3
|
|
|||
Net cash provided by operating activities
|
15.0
|
|
|
36.6
|
|
|
140.2
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Property and equipment additions
|
(45.4
|
)
|
|
(32.5
|
)
|
|
(41.0
|
)
|
|||
Proceeds from asset sales
|
23.7
|
|
|
51.1
|
|
|
6.6
|
|
|||
Cash paid for purchase of business, net of cash acquired
|
—
|
|
|
(144.8
|
)
|
|
—
|
|
|||
Net cash used for investing activities
|
(21.7
|
)
|
|
(126.2
|
)
|
|
(34.4
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Change in book overdrafts
|
(16.2
|
)
|
|
(40.5
|
)
|
|
18.9
|
|
|||
Borrowings of long-term debt
|
5,805.3
|
|
|
4,898.8
|
|
|
4,555.8
|
|
|||
Repayments of long-term debt
|
(5,767.3
|
)
|
|
(4,731.5
|
)
|
|
(4,625.9
|
)
|
|||
Payments under equipment capital lease obligations
|
(6.7
|
)
|
|
(2.7
|
)
|
|
(3.2
|
)
|
|||
Payments under financing obligations (including obligations to related party of $8.6, $15.0 and $19.9, respectively)
|
(9.3
|
)
|
|
(16.4
|
)
|
|
(19.9
|
)
|
|||
Deferred financing fees
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(13.6
|
)
|
|||
Payments under Tax Receivable Agreement
|
(9.9
|
)
|
|
(8.5
|
)
|
|
—
|
|
|||
Payments under other contingent consideration
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash (used for) provided by financing activities
|
(8.7
|
)
|
|
99.2
|
|
|
(89.9
|
)
|
|||
Effect of exchange rate changes on cash
|
(0.6
|
)
|
|
1.1
|
|
|
(0.7
|
)
|
|||
Net change in cash
|
(16.0
|
)
|
|
10.7
|
|
|
15.2
|
|
|||
Cash at beginning of period
|
80.3
|
|
|
69.6
|
|
|
54.4
|
|
|||
Cash at end of period
|
$
|
64.3
|
|
|
$
|
80.3
|
|
|
$
|
69.6
|
|
Supplemental cash flow information
|
|
|
|
|
|
||||||
Cash paid for income taxes, net of refunds
|
$
|
2.4
|
|
|
$
|
3.7
|
|
|
$
|
11.6
|
|
Cash paid for interest
|
38.9
|
|
|
27.6
|
|
|
20.6
|
|
|||
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Non-cash additions to property and equipment
|
31.5
|
|
|
17.8
|
|
|
20.8
|
|
|||
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, 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
|
|
Net loss
|
—
|
|
—
|
|
|
—
|
|
|
(15.7
|
)
|
|
—
|
|
|
—
|
|
—
|
|
|
(15.7
|
)
|
||||||
Other comprehensive loss
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.4
|
)
|
|
—
|
|
—
|
|
|
(6.4
|
)
|
||||||
Tax impact of adoption of ASU 2018-02
|
—
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
—
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
—
|
|
—
|
|
|
18.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
18.1
|
|
||||||
Issuance of common stock, net of stock received for minimum tax withholdings
|
0.2
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
(2.6
|
)
|
||||||
Balance at December 31, 2018
|
16.2
|
|
$
|
0.2
|
|
|
$
|
605.7
|
|
|
$
|
(8.5
|
)
|
|
$
|
(40.7
|
)
|
|
(0.3
|
)
|
$
|
(13.6
|
)
|
|
$
|
543.1
|
|
|
Year Ended December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Allowance for doubtful accounts
|
$
|
49.1
|
|
|
$
|
32.4
|
|
Other allowances
|
12.9
|
|
|
11.6
|
|
||
Total accounts receivable allowances
|
$
|
62.0
|
|
|
$
|
44.0
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance, January 1
|
$
|
44.0
|
|
|
$
|
34.5
|
|
|
$
|
33.3
|
|
Add / (Deduct):
|
|
|
|
|
|
||||||
Provision for bad debt expense
|
26.5
|
|
|
15.9
|
|
|
2.2
|
|
|||
Net write-offs and recoveries
|
(6.3
|
)
|
|
(7.7
|
)
|
|
(6.7
|
)
|
|||
Other adjustments
(1)
|
(2.2
|
)
|
|
1.3
|
|
|
5.7
|
|
|||
Ending balance, December 31
|
$
|
62.0
|
|
|
$
|
44.0
|
|
|
$
|
34.5
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2018
|
|
2017
|
|||||
Land, buildings and improvements
|
$
|
107.4
|
|
|
$
|
106.6
|
|
Machinery and equipment
|
159.7
|
|
|
145.3
|
|
||
Equipment capital leases and assets related to financing obligations (including financing obligations with related party)
(1)
|
75.3
|
|
|
233.3
|
|
||
Internal use software
|
166.6
|
|
|
159.2
|
|
||
Construction-in-progress
|
18.4
|
|
|
10.4
|
|
||
Less: Accumulated depreciation and software amortization
|
(320.7
|
)
|
|
(314.6
|
)
|
||
Property and equipment, net
|
$
|
206.7
|
|
|
$
|
340.2
|
|
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)
|
2018
|
|
2017
|
|
2016
|
||||||
Depreciation expense
(1)
|
$
|
33.2
|
|
|
$
|
33.5
|
|
|
$
|
33.8
|
|
Amortization expense - internal use software
|
13.4
|
|
|
16.5
|
|
|
17.5
|
|
|||
Depreciation and amortization expense related to property and equipment
|
$
|
46.6
|
|
|
$
|
50.0
|
|
|
$
|
51.3
|
|
|
|
|
|
|
|
||||||
Accumulated depreciation on equipment capital leases and assets related to financing obligations (including financing obligations with related party)
|
$
|
16.3
|
|
|
$
|
35.6
|
|
|
|
||
Unamortized internal use software costs, including amounts recorded in CIP
|
$
|
32.9
|
|
|
$
|
37.6
|
|
|
|
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.
|
|
Year Ended December 31, 2017
|
||||||||||
(in millions)
|
As Revised
|
|
Previously Reported
|
|
Effect of Change Higher/(Lower)
|
||||||
Selling and administrative expenses
|
$
|
875.7
|
|
|
$
|
872.6
|
|
|
$
|
3.1
|
|
Operating income
|
18.1
|
|
|
21.2
|
|
|
(3.1
|
)
|
|||
Other (income) expense, net
|
(11.2
|
)
|
|
(8.1
|
)
|
|
(3.1
|
)
|
|
Year Ended December 31, 2016
|
||||||||||
(in millions)
|
As Revised
|
|
Previously Reported
|
|
Effect of Change Higher/(Lower)
|
||||||
Selling and administrative expenses
|
$
|
827.9
|
|
|
$
|
826.2
|
|
|
$
|
1.7
|
|
Operating income
|
74.2
|
|
|
75.9
|
|
|
(1.7
|
)
|
|||
Other (income) expense, net
|
5.9
|
|
|
7.6
|
|
|
(1.7
|
)
|
Recently Issued Accounting Standards Not Yet Adopted (continued)
|
|
|
|
|
||
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
ASU 2018-15,
Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)
|
|
The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update also require companies to expense capitalized implementation costs over the term of the hosting arrangement, including periods covered by renewal options that are reasonably certain to be exercised. The amendments also stipulate presentation requirements for the Statement of Operations, Balance Sheet and Statement of Cash Flows. The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.
|
|
January 1, 2020; early adoption is permitted
|
|
The Company does not expect the adoption of this standard to have a material impact on its Consolidated Financial Statements and related disclosures. The Company currently plans to adopt this ASU on January 1, 2020.
|
|
Customer Contract Liabilities
|
||
(in millions)
|
2018
|
||
Balance at January 1
|
$
|
20.5
|
|
Payments received
|
55.0
|
|
|
Revenue recognized from beginning balance
|
(20.5
|
)
|
|
Revenue recognized from current year receipts
|
(37.3
|
)
|
|
Balance at December 31
|
$
|
17.7
|
|
•
|
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. This segment also provides 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. Additionally, the Company offers total cost of ownership solutions with re-merchandising, budgeting and compliance reporting, and inventory management.
|
•
|
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. Veritiv's broad geographic platform of operations coupled with the breadth of paper and graphics products, including 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.
|
|
(in millions)
|
||
Cash consideration
|
$
|
112.0
|
|
Loan pay-off
|
34.3
|
|
|
Contingent consideration
|
22.2
|
|
|
Other
|
1.3
|
|
|
Total purchase price
|
$
|
169.8
|
|
|
(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 purchase price
|
$
|
169.8
|
|
|
|
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
|
|
|
|
(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
|
|
•
|
Acquisition and integration expenses: Acquisition and integration expenses of
$8.9 million
incurred during the year ended December 31, 2017 have been eliminated. Pro forma net income for the year ended December 31, 2016 includes acquisition and integration expenses of
$8.9 million
.
|
•
|
Incremental amortization expense: Pro forma net loss for the year ended December 31, 2017 includes incremental amortization expense of
$2.5 million
. Pro forma net income for the year ended December 31, 2016 includes incremental amortization expense of
$6.3 million
.
|
•
|
Interest expense: Pro forma net loss for the year ended December 31, 2017 includes incremental interest expense of
$2.0 million
. Pro forma net income for the year ended December 31, 2016 includes incremental interest expense of
$2.4 million
.
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Integration management
|
|
$
|
17.3
|
|
|
$
|
14.5
|
|
|
$
|
8.3
|
|
Retention compensation
|
|
0.5
|
|
|
0.2
|
|
|
2.5
|
|
|||
Information technology conversion costs
|
|
8.1
|
|
|
8.8
|
|
|
6.3
|
|
|||
Rebranding
|
|
0.0
|
|
|
0.5
|
|
|
2.4
|
|
|||
Legal, consulting and other professional fees
|
|
0.3
|
|
|
1.5
|
|
|
2.3
|
|
|||
Other
|
|
3.5
|
|
|
3.0
|
|
|
4.1
|
|
|||
AAC integration and acquisition
|
|
2.1
|
|
|
8.0
|
|
|
—
|
|
|||
Total integration and acquisition expenses
|
|
$
|
31.8
|
|
|
$
|
36.5
|
|
|
$
|
25.9
|
|
(in millions)
|
Severance and Related Costs
|
|
Other Direct Costs
|
|
(Gain) Loss on Sale of Assets and Other (non-cash portion)
|
|
Total
|
||||||||
2018
|
$
|
3.3
|
|
|
$
|
22.3
|
|
|
$
|
(15.0
|
)
|
|
$
|
10.6
|
|
2017
|
7.5
|
|
|
33.6
|
|
|
(24.4
|
)
|
|
16.7
|
|
||||
2016
|
3.5
|
|
|
11.0
|
|
|
(2.1
|
)
|
|
12.4
|
|
||||
Cumulative
|
23.3
|
|
|
70.2
|
|
|
(37.4
|
)
|
|
56.1
|
|
(in millions)
|
Severance and Related Costs
|
|
Other Direct Costs
|
|
Total
|
||||||
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
|
|
|||
Costs incurred
|
3.3
|
|
|
22.3
|
|
|
25.6
|
|
|||
Payments
|
(3.0
|
)
|
|
(22.4
|
)
|
|
(25.4
|
)
|
|||
Balance at December 31, 2018
|
$
|
4.7
|
|
|
$
|
25.1
|
|
|
$
|
29.8
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
Restructuring charges, net
|
|
Distribution expenses
|
|
Total Net Charges
|
||||||
2018
|
$
|
(2.8
|
)
|
|
$
|
11.2
|
|
|
$
|
8.4
|
|
2017
|
17.4
|
|
|
2.1
|
|
|
19.5
|
|
|||
2016
|
7.5
|
|
|
2.3
|
|
|
9.8
|
|
(in millions)
|
Severance and Related Costs
|
|
Other Direct Costs
|
|
Total
|
||||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Costs incurred
|
10.0
|
|
|
0.7
|
|
|
10.7
|
|
|||
Payments
|
(8.0
|
)
|
|
(0.7
|
)
|
|
(8.7
|
)
|
|||
Balance at December 31, 2018
|
$
|
2.0
|
|
|
$
|
0.0
|
|
|
$
|
2.0
|
|
(in millions)
|
Packaging
|
|
Facility Solutions
|
|
Print
|
|
Publishing
|
|
Corporate & Other
|
|
Total
|
||||||||||||
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
|
|
||||||
2018 Activity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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 2018
|
$
|
99.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99.6
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(in millions)
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Customer relationships
|
$
|
67.7
|
|
|
$
|
10.8
|
|
|
$
|
56.9
|
|
|
$
|
67.7
|
|
|
$
|
6.1
|
|
|
$
|
61.6
|
|
Trademarks/Trade names
|
3.8
|
|
|
3.5
|
|
|
0.3
|
|
|
3.8
|
|
|
2.3
|
|
|
1.5
|
|
||||||
Non-compete agreements
|
1.5
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
0.5
|
|
|
1.0
|
|
||||||
Total
|
$
|
73.0
|
|
|
$
|
15.8
|
|
|
$
|
57.2
|
|
|
$
|
73.0
|
|
|
$
|
8.9
|
|
|
$
|
64.1
|
|
Year
|
|
Total
|
||
2019
|
|
$
|
5.0
|
|
2020
|
|
4.8
|
|
|
2021
|
|
4.8
|
|
|
2022
|
|
4.8
|
|
|
2023
|
|
4.8
|
|
(in millions)
|
December 31, 2018
|
|
December 31, 2017
|
||||
Asset-Based Lending Facility (the "ABL Facility")
|
$
|
932.1
|
|
|
$
|
897.7
|
|
Equipment capital leases
|
38.2
|
|
|
13.5
|
|
||
Total debt
|
970.3
|
|
|
911.2
|
|
||
Less: current maturities of long-term debt
|
(6.7
|
)
|
|
(2.9
|
)
|
||
Long-term debt, net of current maturities
|
$
|
963.6
|
|
|
$
|
908.3
|
|
(in millions)
|
December 31, 2018
|
|
December 31, 2017
|
||||
Obligations to related party
|
$
|
—
|
|
|
$
|
162.3
|
|
Obligations - other financing
|
24.2
|
|
|
27.1
|
|
||
Total financing obligations
|
24.2
|
|
|
189.4
|
|
||
Less: current portion of financing obligations
|
(0.6
|
)
|
|
(7.8
|
)
|
||
Financing obligations, less current portion
|
$
|
23.6
|
|
|
$
|
181.6
|
|
|
Year Ended December 31,
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
Total
|
||||||||
Property and equipment
|
$
|
155.2
|
|
|
$
|
14.6
|
|
|
$
|
3.7
|
|
|
$
|
173.5
|
|
Financing obligations
|
155.6
|
|
|
15.2
|
|
|
8.4
|
|
|
179.2
|
|
|
Financing Obligation and Equipment Capital Leases
|
|
Operating Leases
|
||||||||||||
(in millions)
|
|
Lease Obligations
|
|
Sublease Income
|
|
Total
|
|||||||||
2019
|
$
|
9.3
|
|
|
$
|
108.3
|
|
|
$
|
(0.3
|
)
|
|
$
|
108.0
|
|
2020
|
9.0
|
|
|
98.3
|
|
|
(0.1
|
)
|
|
98.2
|
|
||||
2021
|
8.3
|
|
|
82.2
|
|
|
—
|
|
|
82.2
|
|
||||
2022
|
7.9
|
|
|
69.3
|
|
|
—
|
|
|
69.3
|
|
||||
2023
|
6.8
|
|
|
49.4
|
|
|
—
|
|
|
49.4
|
|
||||
Thereafter
|
23.0
|
|
|
173.4
|
|
|
—
|
|
|
173.4
|
|
||||
|
64.3
|
|
|
580.9
|
|
|
(0.4
|
)
|
|
580.5
|
|
||||
Amount representing interest
|
(11.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total future minimum lease payments
|
$
|
52.7
|
|
|
$
|
580.9
|
|
|
$
|
(0.4
|
)
|
|
$
|
580.5
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Domestic (United States)
|
$
|
(16.7
|
)
|
|
$
|
(18.0
|
)
|
|
$
|
27.6
|
|
Foreign
|
6.5
|
|
|
16.1
|
|
|
13.2
|
|
|||
Income (loss) before income taxes
|
$
|
(10.2
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
40.8
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Current Provision:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
0.8
|
|
|
$
|
4.8
|
|
|
$
|
3.6
|
|
U.S. State
|
1.2
|
|
|
1.5
|
|
|
1.5
|
|
|||
Foreign
|
1.5
|
|
|
3.2
|
|
|
3.6
|
|
|||
Total current income tax expense
|
$
|
3.5
|
|
|
$
|
9.5
|
|
|
$
|
8.7
|
|
|
|
|
|
|
|
||||||
Deferred, net:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
0.4
|
|
|
$
|
16.3
|
|
|
$
|
9.6
|
|
U.S. State
|
0.6
|
|
|
(2.7
|
)
|
|
1.9
|
|
|||
Foreign
|
1.0
|
|
|
(11.7
|
)
|
|
(0.4
|
)
|
|||
Total deferred, net
|
$
|
2.0
|
|
|
$
|
1.9
|
|
|
$
|
11.1
|
|
Provision for income tax expense
|
$
|
5.5
|
|
|
$
|
11.4
|
|
|
$
|
19.8
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Deferred income tax assets:
|
|
|
|
|
|
|
|
||||||||
Accrued compensation
|
$
|
11.4
|
|
|
$
|
0.1
|
|
|
$
|
11.6
|
|
|
$
|
0.2
|
|
Capital leases and financing obligations
|
13.0
|
|
|
0.6
|
|
|
47.3
|
|
|
0.8
|
|
||||
Goodwill and other intangibles, net
|
1.2
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
||||
Long-term compensation
|
21.7
|
|
|
2.5
|
|
|
21.3
|
|
|
4.1
|
|
||||
Net operating losses and credit carryforwards
|
40.8
|
|
|
10.0
|
|
|
44.9
|
|
|
11.8
|
|
||||
Allowance for doubtful accounts
|
14.8
|
|
|
0.1
|
|
|
10.0
|
|
|
0.1
|
|
||||
Other
|
9.6
|
|
|
1.4
|
|
|
5.6
|
|
|
0.6
|
|
||||
Gross deferred income tax assets
|
112.5
|
|
|
14.7
|
|
|
142.6
|
|
|
17.6
|
|
||||
Less valuation allowance
|
(5.1
|
)
|
|
(3.3
|
)
|
|
(4.7
|
)
|
|
(3.6
|
)
|
||||
Total deferred tax asset
|
107.4
|
|
|
11.4
|
|
|
137.9
|
|
|
14.0
|
|
||||
Deferred income tax liabilities:
|
|
|
|
|
|
|
|
||||||||
Property and equipment, net
|
(22.9
|
)
|
|
—
|
|
|
(54.2
|
)
|
|
—
|
|
||||
Inventory reserve
|
(34.9
|
)
|
|
—
|
|
|
(33.5
|
)
|
|
—
|
|
||||
Other
|
(4.5
|
)
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
||||
Total deferred tax liability
|
(62.3
|
)
|
|
—
|
|
|
(92.3
|
)
|
|
—
|
|
||||
Net deferred income tax asset
|
$
|
45.1
|
|
|
$
|
11.4
|
|
|
$
|
45.6
|
|
|
$
|
14.0
|
|
(in millions)
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
6.5
|
|
|
$
|
18.1
|
|
|
$
|
24.6
|
|
Additions
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||
Subtractions
(1)
|
(1.8
|
)
|
|
(16.0
|
)
|
|
(17.8
|
)
|
|||
Currency translation adjustments
|
—
|
|
|
1.3
|
|
|
1.3
|
|
|||
Balance at December 31, 2017
|
4.7
|
|
|
3.6
|
|
|
8.3
|
|
|||
Additions
|
0.5
|
|
|
0.7
|
|
|
1.2
|
|
|||
Subtractions
|
(0.1
|
)
|
|
(0.8
|
)
|
|
(0.9
|
)
|
|||
Currency translation adjustments
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
Balance at December 31, 2018
|
$
|
5.1
|
|
|
$
|
3.3
|
|
|
$
|
8.4
|
|
•
|
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 ("TRA") 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 NOLs attributable to taxable periods prior to the date of the Merger. For purposes of the TRA, 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 NOLs attributable to taxable periods prior to the date of the Merger. Veritiv will pay to the UWWH Stockholder an amount equal to
85%
of such tax savings, plus interest at a rate of LIBOR plus
1.00%
, computed from the earlier of the date that Veritiv files its U.S. federal income tax return for the applicable taxable year and the date that such tax return is due (without extensions) until payments are made. Under the TRA, the UWWH Stockholder will not be required to reimburse Veritiv for any payments previously made if such tax benefits are subsequently disallowed or adjusted (although future payments under the TRA would be adjusted to the extent possible to reflect the result of such disallowance or adjustment). The TRA will be binding on and adapt to the benefit of any permitted assignees of the UWWH Stockholder and to any successors to any
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales to Georgia-Pacific, reflected in net sales
|
|
$
|
28.0
|
|
|
$
|
32.2
|
|
|
$
|
35.6
|
|
Purchases of inventory from Georgia-Pacific, recognized in cost of products sold
|
|
$
|
146.5
|
|
|
$
|
181.6
|
|
|
$
|
224.9
|
|
|
|
|
|
|
|
|
||||||
Inventories purchased from Georgia-Pacific that remained on Veritiv's balance sheet
|
|
$
|
17.3
|
|
|
$
|
22.7
|
|
|
|
||
Related party payable to Georgia-Pacific
|
|
$
|
9.3
|
|
|
$
|
8.5
|
|
|
|
||
Related party receivable from Georgia-Pacific
|
|
$
|
3.2
|
|
|
$
|
3.3
|
|
|
|
Deferred Compensation Liability
|
|
|
|
|
||||
|
|
|
|
|
||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Other accrued liabilities
|
|
$
|
3.4
|
|
|
$
|
2.6
|
|
Other non-current liabilities
|
|
21.6
|
|
|
23.7
|
|
||
Total liabilities
|
|
$
|
25.0
|
|
|
$
|
26.3
|
|
|
Year Ended December 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||||||
Accumulated benefit obligation, end of year
|
$
|
64.1
|
|
|
$
|
70.2
|
|
|
$
|
91.0
|
|
|
$
|
83.2
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, beginning of year
|
$
|
91.0
|
|
|
$
|
90.0
|
|
|
$
|
89.7
|
|
|
$
|
79.0
|
|
Service cost
|
1.2
|
|
|
0.3
|
|
|
0.8
|
|
|
0.3
|
|
||||
Interest cost
|
2.5
|
|
|
2.7
|
|
|
2.7
|
|
|
2.7
|
|
||||
Actuarial (gain) loss
|
(3.7
|
)
|
|
(6.0
|
)
|
|
3.3
|
|
|
6.1
|
|
||||
Benefits paid
|
(1.7
|
)
|
|
(4.9
|
)
|
|
(5.5
|
)
|
|
(3.9
|
)
|
||||
Settlements
|
(25.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign exchange adjustments
|
—
|
|
|
(6.8
|
)
|
|
—
|
|
|
5.8
|
|
||||
Projected benefit obligation, end of year
|
$
|
64.1
|
|
|
$
|
75.3
|
|
|
$
|
91.0
|
|
|
$
|
90.0
|
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Plan assets, beginning of year
|
$
|
81.4
|
|
|
$
|
74.9
|
|
|
$
|
75.9
|
|
|
$
|
64.9
|
|
Employer contributions
|
0.1
|
|
|
2.2
|
|
|
—
|
|
|
3.1
|
|
||||
Investment returns
|
(1.5
|
)
|
|
(0.4
|
)
|
|
12.0
|
|
|
6.0
|
|
||||
Benefits paid
|
(1.7
|
)
|
|
(4.9
|
)
|
|
(5.5
|
)
|
|
(3.9
|
)
|
||||
Administrative expenses paid
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
||||
Settlements
|
(25.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign exchange adjustments
|
—
|
|
|
(5.9
|
)
|
|
—
|
|
|
4.8
|
|
||||
Plan assets, end of year
|
$
|
52.1
|
|
|
$
|
65.9
|
|
|
$
|
81.4
|
|
|
$
|
74.9
|
|
Underfunded status, end of year
|
$
|
(12.0
|
)
|
|
$
|
(9.4
|
)
|
|
$
|
(9.6
|
)
|
|
$
|
(15.1
|
)
|
|
Year Ended December 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
(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
|
11.9
|
|
|
9.2
|
|
|
9.5
|
|
|
14.9
|
|
||||
Net liability recognized
|
$
|
12.0
|
|
|
$
|
9.4
|
|
|
$
|
9.6
|
|
|
$
|
15.1
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||||||||||
Components of net periodic benefit cost (credit):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
2.0
|
|
|
$
|
0.3
|
|
|
$
|
2.0
|
|
|
$
|
0.3
|
|
|
$
|
1.7
|
|
|
$
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
$
|
2.5
|
|
|
$
|
2.7
|
|
|
$
|
2.7
|
|
|
$
|
2.7
|
|
|
$
|
3.4
|
|
|
$
|
3.1
|
|
Expected return on plan assets
|
(5.2
|
)
|
|
(3.9
|
)
|
|
(5.1
|
)
|
|
(3.7
|
)
|
|
(5.0
|
)
|
|
(3.5
|
)
|
||||||
Settlement loss
|
1.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net loss
|
—
|
|
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
||||||
Total other components
|
$
|
(1.6
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
(0.2
|
)
|
Net periodic benefit cost (credit)
|
$
|
0.4
|
|
|
$
|
(0.5
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes to funded status recognized in other comprehensive (income) loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss (gain) during year, net of tax
|
$
|
2.2
|
|
|
$
|
(1.4
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
2.7
|
|
|
$
|
(0.5
|
)
|
|
$
|
2.2
|
|
As of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
(in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Investments – U.S.:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
33.1
|
|
|
$
|
33.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed income securities
|
18.7
|
|
|
18.7
|
|
|
—
|
|
|
—
|
|
||||
Cash and short-term securities
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
52.1
|
|
|
$
|
52.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
As of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
(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
|
42.2
|
|
|
|
|
|
|
|
|||||||
Fixed income securities
|
23.4
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
65.9
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
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, 2018
|
|
|
|
|
Asset Allocation Range
|
||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||
Equity securities
|
$
|
33.1
|
|
|
$
|
42.2
|
|
|
55 - 75%
|
|
50 - 70%
|
Fixed income securities
|
18.7
|
|
|
23.4
|
|
|
20 - 40%
|
|
30 - 50%
|
||
Cash and short-term securities
|
0.3
|
|
|
0.3
|
|
|
0 - 10%
|
|
0 - 5%
|
||
Total
|
$
|
52.1
|
|
|
$
|
65.9
|
|
|
|
|
|
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
|
|
|
|
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
||||||||
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||
Discount rate
|
4.01
|
%
|
|
3.90
|
%
|
|
3.33
|
%
|
|
3.40
|
%
|
Rate of compensation increases
|
N/A
|
|
|
3.00
|
%
|
|
N/A
|
|
|
3.00
|
%
|
(in millions)
|
U.S.
|
|
Canada
|
||||
2019
|
$
|
8.0
|
|
|
$
|
2.6
|
|
2020
|
3.8
|
|
|
2.7
|
|
||
2021
|
4.0
|
|
|
2.9
|
|
||
2022
|
3.8
|
|
|
3.1
|
|
||
2023
|
3.9
|
|
|
3.3
|
|
||
2024-2028
|
21.0
|
|
|
19.2
|
|
•
|
Assets contributed to the multi-employer pension 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 pension 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
|
||||||
2018
|
$
|
(2.8
|
)
|
|
$
|
11.2
|
|
|
$
|
8.4
|
|
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
|
|
|
||||||
2018
|
$
|
0.7
|
|
|
$
|
32.5
|
|
|
|
||
2017
|
0.7
|
|
|
27.2
|
|
|
|
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)
|
||||||||||
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
||||||||||||
Western Conference of Teamsters Pension Trust Fund
(1)
|
916145047/001
|
|
Green
|
|
No
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
|
No
|
|
9/30/2018 - 10/31/2020
|
Central States, Southeast & Southwest Areas Pension Fund
|
366044243/001
|
|
Red
|
|
Implemented
|
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
|
Yes
|
|
Exited during 2018
|
|||
Teamsters Pension Plan of Philadelphia & Vicinity
|
231511735/001
|
|
Yellow
|
|
Implemented
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
Yes
|
|
3/31/2021 & 7/31/2021
|
|||
New England Teamsters & Trucking Industry Pension
|
046372430/001
|
|
Red
|
|
Implemented
|
|
—
|
|
|
0.4
|
|
|
0.5
|
|
|
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
|
|
|
|
|
|
|
2.5
|
|
|
2.9
|
|
|
3.2
|
|
|
|
|
|
|||
Contributions to other multi-employer plans
|
|
|
|
|
|
|
0.5
|
|
|
0.6
|
|
|
0.5
|
|
|
|
|
|
|||
Total contributions
|
|
|
|
|
|
|
$
|
3.0
|
|
|
$
|
3.5
|
|
|
$
|
3.7
|
|
|
|
|
|
(in millions)
|
|
TRA Contingent Liability
|
||
Balance at December 31, 2016
|
|
$
|
67.9
|
|
Change in fair value adjustment recorded in other (income) expense, net
(1)
|
|
(9.4
|
)
|
|
Principal payment
|
|
(8.5
|
)
|
|
Balance at December 31, 2017
|
|
50.0
|
|
|
Change in fair value adjustment recorded in other (income) expense, net
|
|
(1.2
|
)
|
|
Principal payment
|
|
(9.9
|
)
|
|
Balance at December 31, 2018
|
|
$
|
38.9
|
|
(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
|
|
|
Change in fair value adjustment recorded in other (income) expense, net
|
|
(12.3
|
)
|
|
Contingent liability payment
|
|
(2.5
|
)
|
|
Balance at December 31, 2018
|
|
$
|
9.4
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2018
|
|
2017
|
|||||
Rebates receivable
|
$
|
78.0
|
|
|
$
|
61.1
|
|
Prepaid expenses
|
32.0
|
|
|
33.8
|
|
||
Other
|
37.2
|
|
|
38.6
|
|
||
Other current assets
|
$
|
147.2
|
|
|
$
|
133.5
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2018
|
|
2017
|
|||||
Deferred financing costs
|
$
|
6.7
|
|
|
$
|
9.3
|
|
Investments in real estate joint ventures
|
6.7
|
|
|
6.4
|
|
||
Below market leasehold agreements
|
4.0
|
|
|
4.7
|
|
||
Other
|
8.0
|
|
|
10.4
|
|
||
Other non-current assets
|
$
|
25.4
|
|
|
$
|
30.8
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2018
|
|
2017
|
|||||
Accrued incentive plans
|
$
|
23.6
|
|
|
$
|
28.7
|
|
Accrued commissions
|
20.6
|
|
|
23.2
|
|
||
Accrued payroll and related taxes
|
9.2
|
|
|
18.0
|
|
||
Other
|
3.1
|
|
|
3.6
|
|
||
Accrued payroll and benefits
|
$
|
56.5
|
|
|
$
|
73.5
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2018
|
|
2017
|
|||||
Accrued customer incentives
|
$
|
25.1
|
|
|
$
|
25.1
|
|
Accrued freight
|
16.4
|
|
|
16.0
|
|
||
Accrued taxes
|
9.9
|
|
|
12.1
|
|
||
AAC contingent liability and working capital adjustment
|
9.4
|
|
|
18.4
|
|
||
Tax Receivable Agreement contingent liability
|
7.9
|
|
|
9.9
|
|
||
Accrued professional fees
|
6.6
|
|
|
6.7
|
|
||
Other
|
59.4
|
|
|
46.4
|
|
||
Other accrued liabilities
|
$
|
134.7
|
|
|
$
|
134.6
|
|
(in millions)
|
December 31,
|
|
December 31,
|
||||
2018
|
|
2017
|
|||||
MEPP withdrawals
|
$
|
32.5
|
|
|
$
|
27.2
|
|
Tax Receivable Agreement contingent liability
|
31.0
|
|
|
40.1
|
|
||
Deferred compensation
|
21.6
|
|
|
23.7
|
|
||
Straight-line rent
|
19.5
|
|
|
17.5
|
|
||
AAC contingent liability
|
—
|
|
|
7.1
|
|
||
Other
|
24.0
|
|
|
21.4
|
|
||
Other non-current liabilities
|
$
|
128.6
|
|
|
$
|
137.0
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(15.7
|
)
|
|
$
|
(13.3
|
)
|
|
$
|
21.0
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted-average number of shares outstanding – basic
|
15.82
|
|
|
15.70
|
|
|
15.97
|
|
|||
Weighted-average number of shares outstanding – diluted
|
15.82
|
|
|
15.70
|
|
|
16.15
|
|
|||
|
|
|
|
|
|
||||||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
(0.99
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
1.31
|
|
Diluted earnings (loss) per share
|
$
|
(0.99
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
1.30
|
|
|
|
|
|
|
|
||||||
Antidilutive stock-based awards excluded from computation of diluted earnings per share
|
1.32
|
|
|
0.80
|
|
|
0.06
|
|
|||
Performance stock-based awards excluded from computation of diluted earnings per share because performance conditions had not been met
|
0.26
|
|
|
0.30
|
|
|
0.20
|
|
(in millions)
|
|
Foreign currency translation adjustments
|
|
Retirement liabilities
|
|
Interest rate swap
|
|
AOCL
|
||||||||
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
|
)
|
||||
Unrealized net gains (losses) arising during the period
|
|
(6.8
|
)
|
|
(0.2
|
)
|
|
0.0
|
|
|
(7.0
|
)
|
||||
Amounts reclassified from AOCL
|
|
—
|
|
|
0.1
|
|
|
0.5
|
|
|
0.6
|
|
||||
Net current period other comprehensive income (loss)
|
|
(6.8
|
)
|
|
(0.1
|
)
|
|
0.5
|
|
|
(6.4
|
)
|
||||
Adjustment for adoption of ASU 2018-02
|
|
—
|
|
|
(0.7
|
)
|
|
(0.1
|
)
|
|
(0.8
|
)
|
||||
Balance at December 31, 2018
|
|
$
|
(30.3
|
)
|
|
$
|
(10.1
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(40.7
|
)
|
(units in thousands)
|
|
Number of RSUs
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|||
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
|
|
Granted
|
|
228
|
|
|
$
|
29.69
|
|
Vested
|
|
(65
|
)
|
|
$
|
50.03
|
|
Forfeited
|
|
(14
|
)
|
|
$
|
39.01
|
|
Non-vested at December 31, 2018
|
|
398
|
|
|
$
|
35.88
|
|
(units in thousands)
|
|
Number of PSUs
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|
|||
Non-vested at December 31, 2016
|
|
355
|
|
|
$
|
42.14
|
|
|
Granted
|
|
166
|
|
|
$
|
37.12
|
|
(1)
|
Shares lost based on actual performance
|
|
(45
|
)
|
|
$
|
37.12
|
|
|
Vested
|
|
—
|
|
|
$
|
—
|
|
|
Forfeited
|
|
(22
|
)
|
|
$
|
40.78
|
|
|
Non-vested at December 31, 2017
|
|
454
|
|
|
$
|
40.87
|
|
|
Granted
|
|
323
|
|
|
$
|
29.24
|
|
(2)
|
Shares gained based on actual performance
|
|
7
|
|
|
$
|
29.24
|
|
|
Vested
|
|
(122
|
)
|
|
$
|
47.37
|
|
|
Forfeited
|
|
(35
|
)
|
|
$
|
34.57
|
|
|
Non-vested at December 31, 2018
|
|
627
|
|
|
$
|
32.59
|
|
|
(units in thousands)
|
|
Number of MCPSUs
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|||
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
|
|
Granted
|
|
194
|
|
|
$
|
37.76
|
|
Shares lost based on actual performance
|
|
(35
|
)
|
|
$
|
37.76
|
|
Vested
|
|
(23
|
)
|
|
$
|
62.53
|
|
Forfeited/cancelled
|
|
(21
|
)
|
|
$
|
49.66
|
|
Non-vested at December 31, 2018
|
|
308
|
|
|
$
|
46.74
|
|
(in millions)
|
Packaging
|
|
Facility Solutions
|
|
Print
|
|
Publishing
|
|
Total Reportable Segments
|
|
Corporate & Other
|
|
Total
|
||||||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net sales
|
$
|
3,547.1
|
|
|
$
|
1,311.7
|
|
|
$
|
2,676.7
|
|
|
$
|
1,019.2
|
|
|
$
|
8,554.7
|
|
|
$
|
141.5
|
|
|
$
|
8,696.2
|
|
Adjusted EBITDA
|
246.7
|
|
|
29.0
|
|
|
64.0
|
|
|
24.6
|
|
|
364.3
|
|
|
(178.9
|
)
|
|
|
||||||||
Depreciation and amortization
|
19.2
|
|
|
6.8
|
|
|
8.8
|
|
|
0.8
|
|
|
35.6
|
|
|
17.9
|
|
|
53.5
|
|
|||||||
Restructuring charges, net
|
4.7
|
|
|
3.4
|
|
|
12.1
|
|
|
0.7
|
|
|
20.9
|
|
|
0.4
|
|
|
21.3
|
|
|||||||
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,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Income (loss) before income taxes
|
$
|
(10.2
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
40.8
|
|
Interest expense, net
|
42.3
|
|
|
31.2
|
|
|
27.5
|
|
|||
Depreciation and amortization
|
53.5
|
|
|
54.2
|
|
|
54.7
|
|
|||
Restructuring charges, net
|
21.3
|
|
|
16.7
|
|
|
12.4
|
|
|||
Stock-based compensation
|
18.1
|
|
|
15.7
|
|
|
8.3
|
|
|||
LIFO reserve increase
|
19.9
|
|
|
7.1
|
|
|
3.6
|
|
|||
Non-restructuring asset impairment charges
|
0.4
|
|
|
8.4
|
|
|
7.7
|
|
|||
Non-restructuring severance charges
|
4.9
|
|
|
3.5
|
|
|
3.1
|
|
|||
Non-restructuring pension charges, net
|
11.3
|
|
|
2.2
|
|
|
2.4
|
|
|||
Integration and acquisition expenses
|
31.8
|
|
|
36.5
|
|
|
25.9
|
|
|||
Fair value adjustment on Tax Receivable Agreement contingent liability
|
(1.2
|
)
|
|
(9.4
|
)
|
|
4.9
|
|
|||
Fair value adjustment on contingent consideration liability
|
(12.3
|
)
|
|
2.0
|
|
|
—
|
|
|||
Escheat audit contingent liability
|
2.5
|
|
|
7.5
|
|
|
—
|
|
|||
Other
|
3.1
|
|
|
2.7
|
|
|
0.9
|
|
|||
Adjustment for Corporate & Other
|
178.9
|
|
|
184.3
|
|
|
176.4
|
|
|||
Adjusted EBITDA for reportable segments
|
$
|
364.3
|
|
|
$
|
360.7
|
|
|
$
|
368.6
|
|
(in millions)
|
December 31, 2018
|
|
December 31, 2017
|
||||
Packaging
|
$
|
1,183.1
|
|
|
$
|
1,192.2
|
|
Facility Solutions
|
345.5
|
|
|
416.9
|
|
||
Print
|
684.5
|
|
|
801.8
|
|
||
Publishing
|
196.3
|
|
|
168.6
|
|
||
Corporate & Other
|
120.3
|
|
|
128.9
|
|
||
Total assets
|
$
|
2,529.7
|
|
|
$
|
2,708.4
|
|
|
Net Sales
|
|
Property and Equipment, Net
|
||||||||||||||||
|
Year Ended December 31,
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
|
||||||||||||
U.S.
|
$
|
7,800.9
|
|
|
$
|
7,510.9
|
|
|
$
|
7,552.3
|
|
|
$
|
171.6
|
|
|
$
|
300.6
|
|
Canada
|
712.7
|
|
|
682.0
|
|
|
631.2
|
|
|
32.1
|
|
|
36.7
|
|
|||||
Rest of world
|
182.6
|
|
|
171.8
|
|
|
143.1
|
|
|
3.0
|
|
|
2.9
|
|
|||||
Total
|
$
|
8,696.2
|
|
|
$
|
8,364.7
|
|
|
$
|
8,326.6
|
|
|
$
|
206.7
|
|
|
$
|
340.2
|
|
|
2018
|
||||||||||||||
|
Three Months Ended
|
||||||||||||||
(in millions, except per share data)
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net sales
|
$
|
2,101.0
|
|
|
$
|
2,171.9
|
|
|
$
|
2,192.5
|
|
|
$
|
2,230.8
|
|
Cost of products sold
|
1,729.5
|
|
|
1,788.5
|
|
|
1,805.8
|
|
|
1,831.9
|
|
||||
Net income (loss)
|
(15.8
|
)
|
|
(10.6
|
)
|
|
1.4
|
|
|
9.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares outstanding – basic
|
15.76
|
|
15.84
|
|
15.85
|
|
15.85
|
||||||||
Weighted-average number of shares outstanding – diluted
|
15.76
|
|
15.84
|
|
16.47
|
|
16.46
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
$
|
(1.00
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
0.09
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share
|
$
|
(1.00
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
0.09
|
|
|
$
|
0.57
|
|
(1)
See
Note 14, 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, 2018.
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
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
|
|
|
2018
|
||||||||||||||
(in millions)
|
Three Months Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Integration and acquisition expenses
|
$
|
8.3
|
|
|
$
|
8.4
|
|
|
$
|
7.9
|
|
|
$
|
7.2
|
|
Restructuring charges, net
|
11.9
|
|
|
11.4
|
|
|
5.4
|
|
|
(7.4
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
|
2017
|
||||||||||||||
(in millions)
|
Three Months Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Integration and acquisition expenses
|
$
|
6.4
|
|
|
$
|
7.5
|
|
|
$
|
14.2
|
|
|
$
|
8.4
|
|
Restructuring charges, net
|
4.1
|
|
|
23.2
|
|
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2.7
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(13.3
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)
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Exhibit No.
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Description
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2.1+
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2.2
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2.3
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2.4+
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2.5
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3.1
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3.2
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3.3
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10.1
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Exhibit No.
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Description
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10.2
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10.3
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10.4
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10.5
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10.6
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10.7
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10.8†
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10.9†
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10.10†
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10.11†
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10.12†*
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10.13†
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10.14†
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10.15†
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VERITIV CORPORATION
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(Registrant)
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By:
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/s/ Mary A. Laschinger
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Name: Mary A. Laschinger
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Title: Chairman and Chief Executive Officer
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(i)
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Principal executive officer:
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/s/ Mary A. Laschinger
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Chairman of the Board of Directors and Chief Executive Officer
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Mary A. Laschinger
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(ii)
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Principal financial officer:
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/s/ Stephen J. Smith
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Senior Vice President and Chief Financial Officer
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Stephen J. Smith
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(iii)
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Principal accounting officer:
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/s/ Andrew E. Magley
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Chief Accounting Officer
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Andrew E. Magley
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(iv)
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Directors:
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/s/ David E. Flitman
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Director
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David E. Flitman
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/s/ Daniel T. Henry
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Director
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Daniel T. Henry
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/s/ Liza K. Landsman
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Director
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Liza K. Landsman
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/s/ Tracy A. Leinbach
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Director
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Tracy A. Leinbach
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/s/ William E. Mitchell
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Director
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William E. Mitchell
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/s/ Michael P. Muldowney
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Director
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Michael P. Muldowney
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/s/ Charles G. Ward, III
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Director
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Charles G. Ward, III
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/s/ John J. Zillmer
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Director
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John J. Zillmer
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1)
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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;
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2)
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You have maintained and will continue to maintain your duty of loyalty to your former employer until your termination date with that employer;
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3)
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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
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4)
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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.
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Name of Subsidiary
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Jurisdiction
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Alco Realty, Inc.
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Delaware
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All American Containers of Puerto Rico, LLC
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Florida
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Graph Comm Holdings International, Inc.
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California
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Graph Comm International (UK Branch Office)
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United Kingdom
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MC xpedx, S. de R.L. de C.V.
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Mexico
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Oficina Central de Servicios, S. A. de C. V.
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Mexico
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Paper Corporation of North America
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Delaware
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Unisource Belgium BVBA
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Belgium
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Unisource Global Solutions - Malaysia Sdn. Bhd.
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Malaysia
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Unisource Global Solutions - Singapore Pte. Ltd.
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Singapore
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Unisource International China, Inc.
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Delaware
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Unisource International Holdings, Inc.
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Delaware
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Unisource International Holdings, Inc. Chengdu Rep Office
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China
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Unisource International Holdings, Inc. Shanghai Rep Office
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China
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Unisource International Holdings Poland, Inc.
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Delaware
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Unisource International Holdings Poland, Inc. (Poland Branch Office)
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Poland
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Unisource Trading (Shanghai) Co., Ltd
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China
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Unisource Trading (Shanghai) Co., Ltd - Chengdu Branch
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China
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Unisource Trading (Shanghai) Co., Ltd - Shenzhen Branch
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China
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Veritiv Canada, Inc.
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Canada
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Veritiv Europe GmbH
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Germany
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Veritiv Netherlands B.V.
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Netherlands
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Veritiv Operating Company
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Delaware
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Veritiv Publishing & Print Management, Inc.
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California
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Veritiv, S.A. de C.V.
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Mexico
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xpedx Holdings S.A.R.L.
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Luxembourg
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xpedx Mexico Nominee Holdings S.A.R.L.
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Luxembourg
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1.
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I have reviewed this Annual Report on Form 10-K of Veritiv Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date:
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February 28, 2019
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/s/ Mary A. Laschinger
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Mary A. Laschinger
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Chairman and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of Veritiv Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date:
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February 28, 2019
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/s/ Stephen J. Smith
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Stephen J. Smith
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Senior Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Mary A. Laschinger
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Mary A. Laschinger
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Chairman and Chief Executive Officer
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February 28, 2019
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Stephen J. Smith
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Stephen J. Smith
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Senior Vice President and Chief Financial Officer
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February 28, 2019
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