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Purchase price: | (in millions) | ||
Fair value of Veritiv shares issued in the Merger | $ | 284.7 | |
Cash payments associated with customary working capital and net indebtedness adjustments | 39.1 | ||
Fair value of contingent liability associated with the Tax Receivable Agreement | 59.4 | ||
Total purchase price | $ | 383.2 |
Final Allocation: | (in millions) | ||
Cash | $ | 70.9 | |
Accounts receivable | 448.4 | ||
Inventories | 353.8 | ||
Deferred income tax assets | 72.0 | ||
Property and equipment | 299.0 | ||
Goodwill | 25.7 | ||
Other intangible assets | 31.5 | ||
Other current and non-current assets (including below market leasehold agreements) | 61.8 | ||
Accounts payable | (284.2 | ) | |
Long-term debt (including equipment capital leases) | (313.2 | ) | |
Financing obligations to related party | (233.1 | ) | |
Defined benefit pension obligations | (30.3 | ) | |
Other current and non-current liabilities (including above market leasehold agreements) | (119.1 | ) | |
Total purchase price | $ | 383.2 |
Value (in millions) | Estimated Weighted Average Useful Life (in years) | ||||
Customer relationships | $ | 24.3 | 14.8 | ||
Trademarks/Trade names | 4.1 | 3.6 | |||
Non-compete agreements | 3.1 | 1.0 | |||
Total identifiable intangible assets acquired | $ | 31.5 |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Legal, consulting and other professional fees | $ | 1.4 | $ | 24.1 | $ | 6.8 | $ | 26.2 | |||||||
Retention compensation | 2.3 | 27.9 | 8.9 | 27.9 | |||||||||||
Information technology conversion costs | 2.1 | 1.0 | 6.4 | 1.0 | |||||||||||
Rebranding | 1.7 | 0.1 | 4.2 | 0.1 | |||||||||||
Other | 0.8 | 1.7 | 2.3 | 1.7 | |||||||||||
Total merger and integration expenses | $ | 8.3 | $ | 54.8 | $ | 28.6 | $ | 56.9 |
(in millions) | Severance and Related Costs | Other Direct Costs | Asset Impairment | Total | |||||||||||
Balance at December 31, 2014 | $ | 3.7 | $ | 0.2 | $ | — | $ | 3.9 | |||||||
Costs incurred | 1.9 | 1.5 | — | 3.4 | |||||||||||
Payments | (2.7 | ) | (0.4 | ) | — | (3.1 | ) | ||||||||
Balance at March 31, 2015 | 2.9 | 1.3 | — | 4.2 | |||||||||||
Costs incurred | 1.0 | 1.2 | — | 2.2 | |||||||||||
Payments | (1.1 | ) | (0.7 | ) | — | (1.8 | ) | ||||||||
Balance at June 30, 2015 | 2.8 | 1.8 | — | 4.6 | |||||||||||
Costs incurred | 0.8 | 0.2 | 2.0 | 3.0 | |||||||||||
Payments | (1.3 | ) | (1.1 | ) | — | (2.4 | ) | ||||||||
Non-cash charges | — | — | (2.0 | ) | (2.0 | ) | |||||||||
Balance at September 30, 2015 | $ | 2.3 | $ | 0.9 | $ | — | $ | 3.2 |
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(in millions) | September 30, 2015 | December 31, 2014 | |||||
ABL Facility | $ | 772.6 | $ | 847.8 | |||
Equipment capital lease obligations | 8.2 | 11.0 | |||||
Total debt | 780.8 | 858.8 | |||||
Less: current portion of long-term debt | (3.3 | ) | (3.8 | ) | |||
Long-term debt, net of current maturities | $ | 777.5 | $ | 855.0 |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | 23.4 | $ | (24.4 | ) | $ | 32.1 | $ | (10.1 | ) | |||||
Income tax expense (benefit) | 8.9 | (10.4 | ) | 15.5 | (4.6 | ) | |||||||||
Effective tax rate | 38.0 | % | 42.6 | % | 48.3 | % | 45.5 | % |
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||
Sales to Georgia-Pacific, reflected in net sales | $ | 8.0 | $ | 9.2 | $ | 25.0 | $ | 9.2 | ||||||
Purchases of inventory from Georgia-Pacific, recognized in cost of products sold | 67.0 | 62.7 | 205.0 | 62.7 |
(in millions) | September 30, 2015 | December 31, 2014 | ||||||
Inventories purchased from Georgia-Pacific that remained on Veritiv's balance sheet | $ | 24.3 | $ | 26.6 | ||||
Related party payable to Georgia-Pacific | 12.7 | 11.0 | ||||||
Related party receivable from Georgia-Pacific | 4.0 | 3.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in millions) | 2014 | 2014 | ||||||
Intercompany sales and purchases, net | $ | — | $ | 255.4 | ||||
Cash pooling and general financing activities | — | (322.5 | ) | |||||
Corporate allocations including income taxes | — | 34.7 | ||||||
Net adjustments in conjunction with the Spin-off | (50.2 | ) | (50.2 | ) | ||||
Total net transfers to International Paper | $ | (50.2 | ) | $ | (82.6 | ) |
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Three Months Ended September 30, 2015 | Nine Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||||||||||
(in millions) | U.S. | Canada | U.S. | Canada | U.S. | Canada | |||||||||||||||||
Components of net periodic benefit cost (credit): | |||||||||||||||||||||||
Service cost | $ | 0.4 | $ | 0.1 | $ | 1.3 | $ | 0.2 | $ | 0.3 | $ | 0.1 | |||||||||||
Interest cost | 0.8 | 0.7 | 2.5 | 2.4 | 0.9 | 0.9 | |||||||||||||||||
Expected return on plan assets | (1.4 | ) | (0.8 | ) | (4.1 | ) | (2.6 | ) | (1.6 | ) | (0.9 | ) | |||||||||||
Net periodic benefit cost (credit) | $ | (0.2 | ) | $ | 0.0 | $ | (0.3 | ) | $ | 0.0 | $ | (0.4 | ) | $ | 0.1 |
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(in millions) | Contingent Liability | |||
Balance at December 31, 2014 | $ | 60.5 | ||
Purchase accounting adjustment | 0.6 | |||
Change in fair value adjustment recorded in other expense (income), net | 1.3 | |||
Balance at March 31, 2015 | 62.4 | |||
Change in fair value adjustment recorded in other expense (income), net | (1.7 | ) | ||
Balance at June 30, 2015 | 60.7 | |||
Change in fair value adjustment recorded in other expense (income), net | 0.3 | |||
Balance at September 30, 2015 | $ | 61.0 |
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(in millions) | September 30, 2015 | December 31, 2014 | |||||
Foreign currency translation adjustments | $ | (24.9 | ) | $ | (14.7 | ) | |
Change in fair value of cash flow hedge, net of tax | (0.4 | ) | — | ||||
Adjustments to pension and other benefit liabilities, net of tax | (7.4 | ) | (7.4 | ) | |||
Total accumulated other comprehensive loss | $ | (32.7 | ) | $ | (22.1 | ) |
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Nine Months Ended September 30, | ||||
(in millions) | 2014 | |||
Total stock-based compensation expense | $ | 4.3 | ||
Income tax benefit related to stock-based compensation | $ | 1.3 |
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(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Three Months Ended September 30, 2015 | |||||||||||||||||||||||
Net sales | $ | 832.4 | $ | 303.0 | $ | 722.3 | $ | 331.4 | $ | 30.7 | $ | 2,219.8 | |||||||||||
Adjusted EBITDA | 23.2 | 9.3 | 59.0 | 12.7 | (43.6 | ) | 60.6 | ||||||||||||||||
Depreciation and amortization | 3.4 | 0.8 | 3.3 | 1.6 | 4.6 | 13.7 | |||||||||||||||||
Restructuring charges | 0.3 | — | 2.6 | 0.1 | — | 3.0 | |||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||||||||
Net sales | 947.2 | 338.2 | 725.0 | 357.0 | 22.9 | 2,390.3 | |||||||||||||||||
Adjusted EBITDA | 20.5 | 9.2 | 53.0 | 15.5 | (46.7 | ) | 51.5 | ||||||||||||||||
Depreciation and amortization | 3.7 | 0.5 | 4.2 | 1.8 | 4.0 | 14.2 | |||||||||||||||||
Restructuring charges | — | — | — | — | 0.1 | 0.1 | |||||||||||||||||
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||
Net sales | 2,465.6 | 906.9 | 2,097.1 | 965.0 | 82.4 | 6,517.0 | |||||||||||||||||
Adjusted EBITDA | 57.1 | 23.1 | 156.5 | 30.2 | (137.2 | ) | 129.7 | ||||||||||||||||
Depreciation and amortization | 10.2 | 2.3 | 11.1 | 5.5 | 13.4 | 42.5 | |||||||||||||||||
Restructuring charges | 1.9 | — | 4.0 | 1.4 | 1.3 | 8.6 | |||||||||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||
Net sales | 2,038.3 | 715.4 | 1,529.5 | 720.6 | 22.9 | 5,026.7 | |||||||||||||||||
Adjusted EBITDA | 38.1 | 16.6 | 104.4 | 18.4 | (95.7 | ) | 81.8 | ||||||||||||||||
Depreciation and amortization | 6.1 | 0.6 | 5.9 | 2.6 | 7.9 | 23.1 | |||||||||||||||||
Restructuring charges (income) | (0.4 | ) | — | (0.2 | ) | (0.5 | ) | 0.1 | (1.0 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | 23.4 | $ | (24.4 | ) | $ | 32.1 | $ | (10.1 | ) | |||||
Interest expense, net | 7.0 | 6.8 | 19.8 | 6.8 | |||||||||||
Depreciation and amortization | 13.7 | 14.2 | 42.5 | 23.1 | |||||||||||
Restructuring charges (income) | 3.0 | 0.1 | 8.6 | (1.0 | ) | ||||||||||
Non-restructuring stock-based compensation | 1.0 | — | 3.0 | 4.0 | |||||||||||
LIFO expense (income) | 2.2 | (0.5 | ) | (7.8 | ) | (0.8 | ) | ||||||||
Non-restructuring severance charges | 0.5 | — | 1.9 | 2.4 | |||||||||||
Merger and integration expenses | 8.3 | 54.8 | 28.6 | 56.9 | |||||||||||
Fair value adjustments on TRA contingent liability | 0.3 | — | (0.1 | ) | — | ||||||||||
Other | 1.2 | 0.5 | 1.1 | 0.5 | |||||||||||
Total Adjusted EBITDA | $ | 60.6 | $ | 51.5 | $ | 129.7 | $ | 81.8 |
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Purchase price: | (in millions) | ||
Fair value of Veritiv shares issued in the Merger | $ | 284.7 | |
Cash payments associated with customary working capital and net indebtedness adjustments | 39.1 | ||
Fair value of contingent liability associated with the Tax Receivable Agreement | 59.4 | ||
Total purchase price | $ | 383.2 |
Final Allocation: | (in millions) | ||
Cash | $ | 70.9 | |
Accounts receivable | 448.4 | ||
Inventories | 353.8 | ||
Deferred income tax assets | 72.0 | ||
Property and equipment | 299.0 | ||
Goodwill | 25.7 | ||
Other intangible assets | 31.5 | ||
Other current and non-current assets (including below market leasehold agreements) | 61.8 | ||
Accounts payable | (284.2 | ) | |
Long-term debt (including equipment capital leases) | (313.2 | ) | |
Financing obligations to related party | (233.1 | ) | |
Defined benefit pension obligations | (30.3 | ) | |
Other current and non-current liabilities (including above market leasehold agreements) | (119.1 | ) | |
Total purchase price | $ | 383.2 |
Value (in millions) | Estimated Weighted Average Useful Life (in years) | ||||
Customer relationships | $ | 24.3 | 14.8 | ||
Trademarks/Trade names | 4.1 | 3.6 | |||
Non-compete agreements | 3.1 | 1.0 | |||
Total identifiable intangible assets acquired | $ | 31.5 |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Legal, consulting and other professional fees | $ | 1.4 | $ | 24.1 | $ | 6.8 | $ | 26.2 | |||||||
Retention compensation | 2.3 | 27.9 | 8.9 | 27.9 | |||||||||||
Information technology conversion costs | 2.1 | 1.0 | 6.4 | 1.0 | |||||||||||
Rebranding | 1.7 | 0.1 | 4.2 | 0.1 | |||||||||||
Other | 0.8 | 1.7 | 2.3 | 1.7 | |||||||||||
Total merger and integration expenses | $ | 8.3 | $ | 54.8 | $ | 28.6 | $ | 56.9 |
(in millions) | Severance and Related Costs | Other Direct Costs | Asset Impairment | Total | |||||||||||
Balance at December 31, 2014 | $ | 3.7 | $ | 0.2 | $ | — | $ | 3.9 | |||||||
Costs incurred | 1.9 | 1.5 | — | 3.4 | |||||||||||
Payments | (2.7 | ) | (0.4 | ) | — | (3.1 | ) | ||||||||
Balance at March 31, 2015 | 2.9 | 1.3 | — | 4.2 | |||||||||||
Costs incurred | 1.0 | 1.2 | — | 2.2 | |||||||||||
Payments | (1.1 | ) | (0.7 | ) | — | (1.8 | ) | ||||||||
Balance at June 30, 2015 | 2.8 | 1.8 | — | 4.6 | |||||||||||
Costs incurred | 0.8 | 0.2 | 2.0 | 3.0 | |||||||||||
Payments | (1.3 | ) | (1.1 | ) | — | (2.4 | ) | ||||||||
Non-cash charges | — | — | (2.0 | ) | (2.0 | ) | |||||||||
Balance at September 30, 2015 | $ | 2.3 | $ | 0.9 | $ | — | $ | 3.2 |
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(in millions) | September 30, 2015 | December 31, 2014 | |||||
ABL Facility | $ | 772.6 | $ | 847.8 | |||
Equipment capital lease obligations | 8.2 | 11.0 | |||||
Total debt | 780.8 | 858.8 | |||||
Less: current portion of long-term debt | (3.3 | ) | (3.8 | ) | |||
Long-term debt, net of current maturities | $ | 777.5 | $ | 855.0 |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | 23.4 | $ | (24.4 | ) | $ | 32.1 | $ | (10.1 | ) | |||||
Income tax expense (benefit) | 8.9 | (10.4 | ) | 15.5 | (4.6 | ) | |||||||||
Effective tax rate | 38.0 | % | 42.6 | % | 48.3 | % | 45.5 | % |
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||
Sales to Georgia-Pacific, reflected in net sales | $ | 8.0 | $ | 9.2 | $ | 25.0 | $ | 9.2 | ||||||
Purchases of inventory from Georgia-Pacific, recognized in cost of products sold | 67.0 | 62.7 | 205.0 | 62.7 |
(in millions) | September 30, 2015 | December 31, 2014 | ||||||
Inventories purchased from Georgia-Pacific that remained on Veritiv's balance sheet | $ | 24.3 | $ | 26.6 | ||||
Related party payable to Georgia-Pacific | 12.7 | 11.0 | ||||||
Related party receivable from Georgia-Pacific | 4.0 | 3.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in millions) | 2014 | 2014 | ||||||
Intercompany sales and purchases, net | $ | — | $ | 255.4 | ||||
Cash pooling and general financing activities | — | (322.5 | ) | |||||
Corporate allocations including income taxes | — | 34.7 | ||||||
Net adjustments in conjunction with the Spin-off | (50.2 | ) | (50.2 | ) | ||||
Total net transfers to International Paper | $ | (50.2 | ) | $ | (82.6 | ) |
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Three Months Ended September 30, 2015 | Nine Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||||||||||
(in millions) | U.S. | Canada | U.S. | Canada | U.S. | Canada | |||||||||||||||||
Components of net periodic benefit cost (credit): | |||||||||||||||||||||||
Service cost | $ | 0.4 | $ | 0.1 | $ | 1.3 | $ | 0.2 | $ | 0.3 | $ | 0.1 | |||||||||||
Interest cost | 0.8 | 0.7 | 2.5 | 2.4 | 0.9 | 0.9 | |||||||||||||||||
Expected return on plan assets | (1.4 | ) | (0.8 | ) | (4.1 | ) | (2.6 | ) | (1.6 | ) | (0.9 | ) | |||||||||||
Net periodic benefit cost (credit) | $ | (0.2 | ) | $ | 0.0 | $ | (0.3 | ) | $ | 0.0 | $ | (0.4 | ) | $ | 0.1 |
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(in millions) | Contingent Liability | |||
Balance at December 31, 2014 | $ | 60.5 | ||
Purchase accounting adjustment | 0.6 | |||
Change in fair value adjustment recorded in other expense (income), net | 1.3 | |||
Balance at March 31, 2015 | 62.4 | |||
Change in fair value adjustment recorded in other expense (income), net | (1.7 | ) | ||
Balance at June 30, 2015 | 60.7 | |||
Change in fair value adjustment recorded in other expense (income), net | 0.3 | |||
Balance at September 30, 2015 | $ | 61.0 |
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(in millions) | September 30, 2015 | December 31, 2014 | |||||
Foreign currency translation adjustments | $ | (24.9 | ) | $ | (14.7 | ) | |
Change in fair value of cash flow hedge, net of tax | (0.4 | ) | — | ||||
Adjustments to pension and other benefit liabilities, net of tax | (7.4 | ) | (7.4 | ) | |||
Total accumulated other comprehensive loss | $ | (32.7 | ) | $ | (22.1 | ) |
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Nine Months Ended September 30, | ||||
(in millions) | 2014 | |||
Total stock-based compensation expense | $ | 4.3 | ||
Income tax benefit related to stock-based compensation | $ | 1.3 |
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(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Three Months Ended September 30, 2015 | |||||||||||||||||||||||
Net sales | $ | 832.4 | $ | 303.0 | $ | 722.3 | $ | 331.4 | $ | 30.7 | $ | 2,219.8 | |||||||||||
Adjusted EBITDA | 23.2 | 9.3 | 59.0 | 12.7 | (43.6 | ) | 60.6 | ||||||||||||||||
Depreciation and amortization | 3.4 | 0.8 | 3.3 | 1.6 | 4.6 | 13.7 | |||||||||||||||||
Restructuring charges | 0.3 | — | 2.6 | 0.1 | — | 3.0 | |||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||||||||
Net sales | 947.2 | 338.2 | 725.0 | 357.0 | 22.9 | 2,390.3 | |||||||||||||||||
Adjusted EBITDA | 20.5 | 9.2 | 53.0 | 15.5 | (46.7 | ) | 51.5 | ||||||||||||||||
Depreciation and amortization | 3.7 | 0.5 | 4.2 | 1.8 | 4.0 | 14.2 | |||||||||||||||||
Restructuring charges | — | — | — | — | 0.1 | 0.1 | |||||||||||||||||
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||
Net sales | 2,465.6 | 906.9 | 2,097.1 | 965.0 | 82.4 | 6,517.0 | |||||||||||||||||
Adjusted EBITDA | 57.1 | 23.1 | 156.5 | 30.2 | (137.2 | ) | 129.7 | ||||||||||||||||
Depreciation and amortization | 10.2 | 2.3 | 11.1 | 5.5 | 13.4 | 42.5 | |||||||||||||||||
Restructuring charges | 1.9 | — | 4.0 | 1.4 | 1.3 | 8.6 | |||||||||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||
Net sales | 2,038.3 | 715.4 | 1,529.5 | 720.6 | 22.9 | 5,026.7 | |||||||||||||||||
Adjusted EBITDA | 38.1 | 16.6 | 104.4 | 18.4 | (95.7 | ) | 81.8 | ||||||||||||||||
Depreciation and amortization | 6.1 | 0.6 | 5.9 | 2.6 | 7.9 | 23.1 | |||||||||||||||||
Restructuring charges (income) | (0.4 | ) | — | (0.2 | ) | (0.5 | ) | 0.1 | (1.0 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | 23.4 | $ | (24.4 | ) | $ | 32.1 | $ | (10.1 | ) | |||||
Interest expense, net | 7.0 | 6.8 | 19.8 | 6.8 | |||||||||||
Depreciation and amortization | 13.7 | 14.2 | 42.5 | 23.1 | |||||||||||
Restructuring charges (income) | 3.0 | 0.1 | 8.6 | (1.0 | ) | ||||||||||
Non-restructuring stock-based compensation | 1.0 | — | 3.0 | 4.0 | |||||||||||
LIFO expense (income) | 2.2 | (0.5 | ) | (7.8 | ) | (0.8 | ) | ||||||||
Non-restructuring severance charges | 0.5 | — | 1.9 | 2.4 | |||||||||||
Merger and integration expenses | 8.3 | 54.8 | 28.6 | 56.9 | |||||||||||
Fair value adjustments on TRA contingent liability | 0.3 | — | (0.1 | ) | — | ||||||||||
Other | 1.2 | 0.5 | 1.1 | 0.5 | |||||||||||
Total Adjusted EBITDA | $ | 60.6 | $ | 51.5 | $ | 129.7 | $ | 81.8 |
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