VERITIV CORP, 10-K filed on 3/24/2015
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2014
Mar. 16, 2015
Jun. 30, 2014
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
VERITIV CORPORATION 
 
 
Entity Central Index Key
0001599489 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Non-accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2014 
 
 
Document Fiscal Year Focus
2014 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
16,000,000 
 
Entity Public Float
 
 
$ 0 
Consolidated and Combined Statements of Operations (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Statement [Abstract]
 
 
 
Net sales (including sales to related parties of $42.7, $53.0 and $65.1 for 2014, 2013 and 2012, respectively)
$ 7,406.5 
$ 5,652.4 
$ 6,012.0 
Cost of products sold (including purchases from related parties of $412.6, $604.4 and $639.0 for 2014, 2013 and 2012, respectively) (exclusive of depreciation and amortization shown separately below)
6,180.9 
4,736.8 
5,036.7 
Distribution expenses
426.2 
314.2 
324.0 
Selling and administrative expenses
689.1 
548.2 
580.6 
Depreciation and amortization
37.6 
17.1 
14.0 
Merger and integration expenses
75.1 
0 
0 
Restructuring charges
4.0 
37.9 
35.1 
Operating income (loss)
(6.4)
(1.8)
21.6 
Interest expense, net
14.0 
0 
0 
Other expense (income), net
1.2 
(2.2)
(1.9)
Income (loss) from continuing operations before income taxes
(21.6)
0.4 
23.5 
Income tax expense (benefit)
(2.1)
0.4 
9.1 
Income (loss) from continuing operations
(19.5)
0 
14.4 
Income (loss) from discontinued operations, net of income taxes
(0.1)
0.2 
(10.0)
Net income (loss)
$ (19.6)
$ 0.2 
$ 4.4 
Earnings (loss) per share: Basic and Diluted
 
 
 
Continuing operations (in dollars per share)
$ (1.61)
$ 0.00 
$ 1.76 
Discontinued operations (in dollars per share)
$ (0.01)
$ 0.02 
$ (1.23)
Basic and diluted earnings (loss) per share (in dollars per share)
$ (1.62)
$ 0.02 
$ 0.53 
Weighted-average shares outstanding - basic and diluted (in shares)
12,080,000 
8,160,000 
8,160,000 
Consolidated and Combined Statements of Operations (Parenthetical) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Statement [Abstract]
 
 
 
Related party sales
$ 42.7 
$ 53.0 
$ 65.1 
Related party cost of products sold
$ 412.6 
$ 604.4 
$ 639.0 
Consolidated and Combined Statements of Comprehensive Income (Loss) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
Net income (loss)
$ (19.6)
$ 0.2 
$ 4.4 
Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency translation adjustments
(10.0)
1.4 
1.8 
Pension liability adjustments, net of $3.4 tax
(7.4)
0 
0 
Other comprehensive income (loss)
(17.4)
1.4 
1.8 
Total comprehensive income (loss)
$ (37.0)
$ 1.6 
$ 6.2 
Consolidated and Combined Statements of Comprehensive Income (Loss) (Parenthetical) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
Pension and other postretirement benefit plans, tax
$ 3.4 
$ 0 
$ 0 
Consolidated and Combined Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Current assets:
 
 
Cash
$ 57.6 
$ 5.7 
Accounts receivable, less allowances of $39.0 and $22.7 in 2014 and 2013, respectively
1,115.1 
669.7 
Related party receivable
3.9 
10.1 
Inventories
673.2 
360.9 
Other current assets
109.3 
26.3 
Assets held for sale
0 
9.3 
Total current assets
1,959.1 
1,082.0 
Property and equipment, net
377.4 
107.1 
Goodwill
52.4 
26.4 
Other intangibles, net
36.1 
9.3 
Non-current deferred income tax assets
105.6 
22.7 
Other non-current assets
43.9 
9.4 
Total assets
2,574.5 
1,256.9 
Current liabilities:
 
 
Accounts payable
589.8 
357.3 
Related party payable
11.0 
2.6 
Accrued payroll and benefits
111.1 
54.9 
Deferred income tax liabilities
21.1 
13.5 
Other accrued liabilities
100.5 
36.5 
Current maturities of long-term debt
3.8 
0 
Financing obligations to related party, current portion
13.8 
0 
Total current liabilities
851.1 
464.8 
Long-term debt, net of current maturities
855.0 
0 
Financing obligations to related party, less current portion
212.4 
0 
Defined benefit pension obligations
36.3 
0 
Other non-current liabilities
107.2 
12.5 
Total liabilities
2,062.0 
477.3 
Commitments and contingencies (Note 15)
   
   
Equity:
 
 
Parent company investment, prior to Spin-off
 
784.3 
Shareholders' equity:
 
 
Preferred stock, $0.01 par value, 10.0 million shares authorized, none issued
0 
 
Common stock, $0.01 par value, 100.0 million shares authorized, 16.0 million shares issued and outstanding
0.2 
 
Additional paid-in capital
562.4 
 
Accumulated deficit
(28.0)
 
Accumulated other comprehensive loss
(22.1)
(4.7)
Total shareholders' equity
512.5 
(4.7)
Total equity
512.5 
779.6 
Total liabilities and equity
$ 2,574.5 
$ 1,256.9 
Consolidated and Combined Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2014
Jul. 1, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Statement of Financial Position [Abstract]
 
 
 
 
 
Allowance for doubtful accounts
$ 39.0 
 
$ 22.7 
$ 25.3 
$ 26.2 
Preferred stock par value (in Dollars per share)
$ 0.01 
 
 
 
 
Preferred stock, shares authorized (in Shares)
10,000,000 
 
 
 
 
Preferred stock, shares issued (in Shares)
0 
 
 
 
 
Common stock par value (in Dollars per share)
$ 0.01 
 
 
 
 
Common stock, shares authorized (in Shares)
100,000,000 
 
 
 
 
Common stock, shares issued (in Shares)
16,000,000 
16,000,000 
 
 
 
Common stock shares outstanding (in shares)
16,000,000 
16,000,000 
 
 
 
Consolidated and Combined Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Net Cash Provided by (Used in) Operating Activities [Abstract]
 
 
 
Net income (loss)
$ (19.6)
$ 0.2 
$ 4.4 
Income (loss) from discontinued operations, net of income taxes
(0.1)
0.2 
(10.0)
Income (loss) from continuing operations
(19.5)
0 
14.4 
Depreciation and amortization
37.6 
17.4 
15.2 
Amortization of deferred financing fees
2.2 
0 
0 
Net gains on sales of property and equipment
(2.3)
(6.4)
(2.3)
Provision for allowance for doubtful accounts
12.8 
6.4 
7.5 
Deferred income tax provision
(9.7)
3.3 
1.4 
Stock-based compensation
4.3 
15.4 
13.1 
Other noncash items, net
1.6 
0 
0 
Changes in operating assets and liabilities, net of Merger
 
 
 
Accounts receivable and related party receivable
(17.7)
(1.3)
27.8 
Inventories
28.2 
12.3 
12.3 
Other current assets
(21.8)
3.1 
7.8 
Accounts payable and related party payable
(44.5)
7.2 
(37.4)
Accrued payroll and benefits
19.9 
(0.5)
(1.6)
Other accrued liabilities
15.4 
4.1 
1.0 
Other
(0.4)
(8.0)
(0.6)
Net cash provided by operating activities – continuing operations
6.1 
53.0 
58.6 
Net cash used for operating activities – discontinued operations
(1.1)
(0.8)
(2.6)
Net cash provided by operating activities
5.0 
52.2 
56.0 
Investing Activities
 
 
 
Net cash acquired in Merger
31.8 
0 
0 
Property and equipment additions
(17.2)
(9.8)
(13.3)
Proceeds from asset sales
4.8 
22.7 
5.1 
Other
0.5 
0.3 
0.5 
Net cash provided by (used for) investing activities – continuing operations
19.9 
13.2 
(7.7)
Net cash provided by investing activities – discontinued operations
0 
0 
0.2 
Net cash provided by (used for) investing activities
19.9 
13.2 
(7.5)
Financing Activities
 
 
 
Net cash transfers to Parent
(60.3)
(70.8)
(48.9)
Change in book overdrafts
1.6 
(5.8)
1.7 
Transfer to Parent in connection with Spin-off
(432.8)
0 
0 
Repayment of Unisource Senior Credit Facility
(303.9)
0 
0 
Borrowings of long-term debt
3,142.2 
0 
0 
Repayments of long-term debt
(2,294.4)
0 
0 
Payments under equipment capital lease obligations
(1.3)
0 
0 
Payments under financing obligations to related party
(6.8)
0 
0 
Deferred financing fees
(22.4)
0 
0 
Net cash provided by (used for) financing activities – continuing operations
21.9 
(76.6)
(47.2)
Net cash provided by financing activities – discontinued operations
1.1 
0 
0.9 
Net cash provided by (used for) financing activities
23.0 
(76.6)
(46.3)
Effect of exchange rate changes on cash
4.0 
1.5 
(1.5)
Net change in cash
51.9 
(9.7)
0.7 
Cash at beginning of period
5.7 
15.4 
14.7 
Cash at end of period
57.6 
5.7 
15.4 
Supplemental Cash Flow Information
 
 
 
Cash paid for income taxes, net of refunds
2.0 
0.7 
1.1 
Cash paid for interest
11.5 
0 
0 
Non-Cash Transactions
 
 
 
Common stock issued in connection with Spin-off
277.9 
0 
0 
Common stock issued in connection with Merger
284.7 
0 
0 
Contingent liability associated with the Tax Receivable Agreement
58.8 
0 
0 
Non-cash transfers (to) from Parent
$ (26.0)
$ 20.3 
$ 0 
Consolidated and Combined Statements of Shareholders' Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
Common Stock
Additional Paid-in Capital
Parent Company Investment
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Beginning of period at Dec. 31, 2011
$ 842.3 
$ 0 
$ 0 
$ 850.2 
$ 0 
$ (7.9)
Beginning Balance (in shares) at Dec. 31, 2011
 
0 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income (loss)
4.4 
 
 
4.4 
 
 
Other comprehensive income, net of tax
1.8 
 
 
 
 
1.8 
Net transfers to Parent
(35.4)
 
 
(35.4)
 
 
End of period at Dec. 31, 2012
813.1 
0 
0 
819.2 
0 
(6.1)
Ending Balance (in shares) at Dec. 31, 2012
 
0 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income (loss)
0.2 
 
 
0.2 
 
 
Other comprehensive income, net of tax
1.4 
 
 
 
 
1.4 
Net transfers to Parent
(35.1)
 
 
(35.1)
 
 
End of period at Dec. 31, 2013
779.6 
 
 
784.3 
0 
(4.7)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income (loss)
8.4 
 
 
8.4 
 
 
End of period at Jun. 30, 2014
 
 
 
 
 
 
Beginning of period at Dec. 31, 2013
779.6 
0 
0 
784.3 
0 
(4.7)
Beginning Balance (in shares) at Dec. 31, 2013
 
0 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income (loss)
(19.6)
 
 
 
 
 
Other comprehensive income, net of tax
(17.4)
 
 
 
 
(17.4)
Net transfers to Parent
(82.0)
 
 
(82.0)
 
 
Conversion of parent company investment in connection with Spin-off (in shares)
 
8,160,000 
 
 
 
 
Conversion of Parent Company Investment in connection with Spin-off
0 
0.1 
710.6 
(710.7)
 
 
Transfer to Parent in connection with Spin-off
(432.8)
 
(432.8)
 
 
 
Issuance of common stock for Merger (in shares)
 
7,840,000 
 
 
 
 
Issuance of common stock for Merger
284.7 
0.1 
284.6 
 
 
 
End of period at Dec. 31, 2014
512.5 
0.2 
562.4 
0 
 
(22.1)
Ending Balance (in shares) at Dec. 31, 2014
 
16,000,000 
 
 
 
 
Beginning of period at Jun. 30, 2014
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income (loss)
(28.0)
 
 
 
(28.0)
 
End of period at Dec. 31, 2014
$ 512.5 
 
 
 
$ (28.0)
 
Business and Summary of Significant Accounting Policies
Business and Summary of Significant Accounting Policies
1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Veritiv Corporation ("Veritiv" or the "Company") is a North American business-to-business distributor of print, publishing, packaging, facility and logistics solutions. Established in 2014, following the merger of International Paper Company’s ("International Paper" or "Parent") xpedx division ("xpedx") and UWW Holdings, Inc. ("UWWH"), the Company operates from more than 180 distribution centers primarily throughout the U.S., Canada and Mexico.

xpedx was a business-to-business distributor of paper, publishing, packaging and facility supplies products in North America that operated in the U.S. and Mexico. xpedx distributed products and services to various customer markets, including printers, publishers, data centers, manufacturers, higher education institutions, healthcare facilities, sporting and performance arenas, retail stores, government agencies, property managers and building service contractors.

UWWH, operating through Unisource Worldwide, Inc. and its other consolidated subsidiaries (collectively, "Unisource"), was a distributor of printing and business paper, publishing solutions, packaging supplies and equipment, facility supplies and equipment and logistics services that operated primarily in the U.S. and Canada. Unisource sold its products to a diverse customer base that included commercial printing, retail, hospitality, healthcare, governmental, distribution and manufacturing sectors.

The Spin-off and Merger

On July 1, 2014 (the "Distribution Date"), International Paper completed the previously announced spin-off of xpedx to its shareholders (the "Spin-off"), forming a new public company called Veritiv. Immediately following the Spin-off, UWWH merged with and into Veritiv (the "Merger"). The primary reason for the business combination was to create a North American business-to-business distribution company with a broad geographic reach, an extensive product offering and a differentiated and leading service platform. The Merger has been reflected in Veritiv’s financial statements using the acquisition method of accounting, with Veritiv as the accounting acquirer of UWWH.

On the Distribution Date:

•
8,160,000 shares of Veritiv common stock were distributed on a pro rata basis to the International Paper shareholders of record as of the close of business on June 20, 2014. Immediately following the Spin-off, but prior to the Merger, International Paper’s shareholders owned all of the shares of Veritiv common stock outstanding, and
•
A cash payment of $404.2 million was distributed to International Paper, which was comprised of: (i) a special payment of $400.0 million, (ii) reduced by a $15.3 million preliminary working capital adjustment and (iii) increased by $19.5 million of transaction expense-related adjustments. During the fourth quarter of 2014, the working capital and transaction expense-related adjustments were finalized, resulting in an additional cash payment of $30.7 million to International Paper. Of the total payment, $432.8 million was reflected as a reduction to equity while the remaining $2.1 million was recorded in the Consolidated Statement of Operations for 2014.

In addition to the above payment, International Paper also has a potential earnout payment of up to $100.0 million that would become due in 2020 if Veritiv's aggregate EBITDA for fiscal years 2017, 2018 and 2019 exceeds an agreed-upon target of $759.0 million, subject to certain adjustments. The $100.0 million potential earnout payment would be reflected by Veritiv as a reduction to equity at the time of payment.

Immediately following the Spin-off on the Distribution Date:

•
UWW Holdings, LLC, the sole shareholder of UWWH, (the "UWWH Stockholder") received 7,840,000 shares of Veritiv common stock for all outstanding shares of UWWH common stock that it held on the Distribution Date, in a private placement transaction,
•
Veritiv and the UWWH Stockholder entered into a registration rights agreement (the "Registration Rights Agreement") that provides the UWWH Stockholder with certain demand registration rights and piggyback registration rights which is more fully described in Note 8, Related Party Transactions,
•
Veritiv and the UWWH Stockholder entered into a tax receivable agreement (the "Tax Receivable Agreement") which is more fully described in Note 8, Related Party Transactions, and
•
The UWWH Stockholder received approximately $33.9 million of cash proceeds associated with preliminary working capital and net indebtedness adjustments, as well as cash proceeds of $4.7 million associated with transaction expense-related adjustments. During the fourth quarter of 2014, the Company finalized the working capital and net indebtedness adjustments, resulting in an additional cash payment of $5.7 million to the UWWH Stockholder. Of the total payment, $39.1 million was recorded as part of the purchase price consideration for Unisource while the remaining $5.2 million was recorded in the Consolidated Statement of Operations for 2014.
    
Immediately following the completion of the Spin-off and Merger, International Paper shareholders owned approximately 51%, and the UWWH Stockholder owned approximately 49%, of the shares of Veritiv common stock on a fully-diluted basis. Immediately following the completion of the Spin-off, International Paper did not own any shares of Veritiv common stock. See Note 2, Merger with Unisource, for further details on the Merger.

Veritiv’s common stock began regular-way trading on the New York Stock Exchange on July 2, 2014 under the ticker symbol VRTV.
 
Basis of Presentation

Prior to the Distribution Date, Veritiv’s financial position, results of operations and cash flows consisted of only the xpedx business of International Paper and have been derived from International Paper’s historical accounting records. The financial results of xpedx have been presented on a carve-out basis through the Distribution Date, while the financial results for Veritiv, post Spin-off, are prepared on a stand-alone basis. As such, the audited Consolidated and Combined Statements of Operations, Consolidated and Combined Statements of Comprehensive Income (Loss) and Consolidated and Combined Statements of Cash Flows for the year ended December 31, 2014 consist of:

•
the combined results of operations of xpedx for the six months ended June 30, 2014 on a carve-out basis, and
•
the consolidated results of Veritiv on a stand-alone basis for the six months ended December 31, 2014.

The combined financial statements as of December 31, 2013 and for the years ended December 31, 2013 and 2012 consist entirely of the combined results of xpedx on a carve-out basis.

As of December 31, 2014, all intercompany transactions have been eliminated. Prior to the Distribution Date, all significant intercompany transactions between xpedx and International Paper have been included for the periods prior to the Spin-off and were considered to be effectively settled for cash at the time the transaction was recorded. The total net effect of the settlement of these intercompany transactions is reflected in the Consolidated and Combined Statements of Cash Flows as a financing activity and in the Consolidated and Combined Balance Sheets as Parent company investment.

For periods prior to the Spin-off, the combined financial statements include expense allocations for certain functions previously provided by International Paper, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, insurance and stock-based compensation. These expenses have been allocated on the basis of direct usage when identifiable, with the remainder principally allocated on the basis of percent of capital employed, headcount, sales or other measures. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to or for the benefit received by xpedx during those periods. The allocations may not, however, reflect the expenses xpedx would have incurred as an independent company for the periods presented. Actual costs that may have been incurred if xpedx had been a stand-alone company would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Veritiv is unable to determine what such costs would have been had xpedx been independent. See Note 8, Related Party Transactions, for further information.

Following the Spin-off, certain corporate and other related functions described above continue to be provided by International Paper under a transition services agreement. Since July 1, 2014, the Company has recognized $15.5 million in selling and administrative expenses related to this agreement.

For the years ended December 31, 2013 and 2012, certain amounts in the operating activities section of the Statements of Cash Flows have been reclassified for comparative purposes to conform to the current year presentation. This reclassification did not have any impact on net cash flows from operations or the Combined Statements of Operations for the years ended December 31, 2013 and 2012, or on the Combined Balance Sheet as of December 31, 2013.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and certain financial statement disclosures. Estimates and assumptions are used for, but not limited to, revenue recognition, accounts receivable valuation, inventory valuation, employee benefit plans, income tax contingency accruals and valuation allowances and goodwill and other intangible asset valuations. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, actual results may ultimately differ from these estimates and assumptions. Estimates are revised as additional information becomes available.

Summary of Significant Accounting Policies

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed or determinable, collectability is reasonably assured and delivery has occurred. Revenue is recognized when the customer takes title and assumes the risks and rewards of ownership. Revenue is recorded at the time of shipment for customer terms designated f.o.b. (free on board) shipping point. For sales transactions with customers designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site, when title and risk of loss are transferred. Shipping terms are determined on a customer-by-customer or order-by-order basis. When management cannot conclude collectability is reasonably assured for shipments to a particular customer, revenue associated with that customer is not recognized until cash is collected or management is otherwise able to establish that collectability is reasonably assured.

Certain revenues are derived from shipments arranged by the Company made directly from a manufacturer to a customer. The Company is considered to be a principal to these transactions because, among other factors, it controls pricing to the customer, bears the credit risk of the customer defaulting on payment and is the primary obligor. Revenues from these sales are reported on a gross basis in the Consolidated and Combined Statements of Operations and amounted to $2.9 billion, $2.4 billion and $2.5 billion for the years ended December 31, 2014, 2013 and 2012, respectively.

Taxes collected from customers relating to product sales and remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from both net sales and expenses.

Purchase Incentives and Customer Rebates

Veritiv enters into agreements with suppliers that entitle Veritiv to receive rebates, allowances and other discounts based on the attainment of specified purchasing levels or sales to certain customers. Purchase incentives are recorded as a reduction to inventory and recognized in cost of products sold as the product is sold.

Veritiv also enters into incentive agreements with its customers, which are generally based on sales to these customers. Veritiv records estimated rebates to customers as a reduction to gross sales as customer revenue is recognized.

Distribution Expenses

Distribution expenses consist of storage, handling and delivery costs including freight to the Company's customers’ destination. Handling and delivery costs were $322.3 million, $252.9 million and $259.7 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Merger and Integration Expenses

Merger and integration expenses are expensed as incurred. Merger expenses include advisory, legal and other professional fees directly associated with the Merger. Integration expenses include professional services and project management fees, retention compensation, termination benefits (including change-in-control bonuses), rebranding and other non-recurring or redundant costs to integrate the combined businesses of xpedx and Unisource.

Accounts Receivable and Allowances

Accounts receivables are recognized net of allowances that primarily consist of allowance for doubtful accounts of $31.7 million and $22.5 million as of December 31, 2014 and 2013, respectively, with the remaining balance of $7.3 million and $0.2 million being comprised of other allowances as of December 31, 2014 and 2013, respectively. The allowance for doubtful accounts reflects the best estimate of losses inherent in the Company’s accounts receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other available evidence. The other allowances balance is inclusive of credit risks, returns, discounts and any other items affecting the realization of these assets. Accounts receivable are written off when management determines they are uncollectible.
    
Below is a rollforward of the Company's accounts receivable allowances for the years ended December 31, 2014, 2013 and 2012:            
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Beginning balance, January 1
$
22.7

 
$
25.3

 
$
26.2

Add / (Deduct):
 
 
 
 
 
Provision for bad debt expense
12.8

 
6.4

 
8.7

Net write-offs and other adjustments
(9.8
)
 
(9.0
)
 
(9.6
)
Other(1)
13.3

 
—

 
—

Ending balance, December 31
$
39.0

 
$
22.7

 
$
25.3

(1) Represents accounts receivable allowances recorded in connection with the Merger.

Inventories

The Company's inventories are primarily comprised of finished goods and primarily valued at cost as determined by the last-in first-out ("LIFO") method. Such valuations are not in excess of market. Elements of cost in inventories include the purchase price invoiced by a supplier, plus inbound freight and related costs and reduced by estimated volume-based discounts and early pay discounts available from certain suppliers. Approximately 86% and 97% of inventories were valued using the LIFO method as of December 31, 2014 and 2013, respectively. If the first-in, first-out method had been used, total inventory balances would have increased by approximately $79.1 million and $76.6 million at December 31, 2014 and 2013, respectively.

The Company reduces the value of obsolete and inactive inventory based on the difference between the LIFO cost of the inventory and the estimated market value using assumptions of future demand and market conditions. To estimate the net realizable value, the Company considers factors such as age of the inventory, the nature of the products, the quantity of items on-hand relative to sales trends, current market prices and trends in pricing, its ability to use excess supply in another channel, historical write-offs and expected residual values or other recoveries.

Veritiv had $58.3 million and $17.7 million of consigned inventory as of December 31, 2014 and 2013, respectively.

Property and Equipment, Net

Property and equipment are stated at cost, less accumulated depreciation. Expenditures for replacements and major improvements are capitalized, whereas repair and maintenance costs that do not improve service potential or extend economic life are expensed as incurred. The Company capitalizes certain computer software and development costs incurred in connection with developing or obtaining software for internal use. Costs related to the development of internally developed software, other than those incurred during the application development stage, are expensed as incurred.

    
The components of property and equipment, net were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Land, buildings and improvements
$
128.9

 
$
143.8

Machinery and equipment
110.2

 
72.5

Equipment capital leases and assets related to financing obligations with related party
232.0

 
—

Internally developed software
114.4

 
84.5

Construction-in-progress
14.0

 
4.9

Less: Accumulated depreciation and software amortization
(222.1
)
 
(198.6
)
Property and equipment, net
$
377.4

 
$
107.1



Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Land is not depreciated, and construction-in-progress ("CIP") is not depreciated until ready for service. Leased property and improvements to leased property are amortized on a straight-line basis over the lease term or useful life of the asset, whichever is less.

Depreciation and amortization for property and equipment, other than land and CIP, is based upon the following estimated useful lives:
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 with related party
3 to 15 years
Internally developed software
3 to 5 years


Depreciation and amortization expenses, including the depreciation expense for assets under capital leases and amortization expense of internally developed software, totaled $32.9 million, $15.9 million and $12.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. Accumulated depreciation on equipment capital leases and assets related to financing obligations with related party as of December 31, 2014 was $15.6 million. Veritiv did not have any capital leases as of December 31, 2013. Amortization expense of the internally developed software was $11.0 million, $8.3 million and $3.0 million during the years ended December 31, 2014, 2013 and 2012, respectively. During 2014, there were no depreciation amounts included in restructuring. During 2013 and 2012, $0.3 million and $1.2 million of depreciation was included in restructuring.

As of December 31, 2014 and 2013, unamortized internally developed software costs, including amounts recorded in CIP, were $44.6 million and $17.1 million, respectively.

Upon retirement or other disposal of property and equipment, the cost and related amount of accumulated depreciation are eliminated from the asset and accumulated depreciation accounts, respectively. The difference, if any, between the net asset value and the proceeds is included in net income.

Leases

The Company leases certain property and equipment used for operations. Such lease arrangements are reviewed for capital or operating classification at their inception.

Capital lease obligations consist of delivery equipment, material handling equipment, computer hardware and office equipment which are leased through third parties under non-cancelable leases with terms generally ranging from three to eight years. Many of the delivery equipment leases include annual rate increases based on the Consumer Price Index which are included in the calculation of the initial lease obligation. The carrying value of the related equipment associated with these capital leases is included within property and equipment, net in the Consolidated and Combined Balance Sheets at December 31, 2014, and depreciated over the term of the lease. The Company does not record rent expense for capital leases. Rather, rental payments under the lease are recognized as a reduction of the capital lease obligation and interest expense. Depreciation expense for assets under capital leases is included in the total depreciation expense disclosed in the Consolidated and Combined Statements of Operations.
  
All other leases are operating leases. Certain lease agreements include renewal options and rent escalation clauses. Assets subject to an operating lease and the related lease payments are not recorded on the Company’s balance sheet. Rent expense is recognized on a straight-line basis over the expected lease term.

The term for all types of leases begins on the date the Company becomes legally obligated for the rent payments or takes possession of the asset, whichever is earlier.

Goodwill and Other Intangible Assets, Net

Goodwill relating to a single business reporting unit is included as an asset of the applicable segment. Goodwill arising from major acquisitions that involve multiple reportable segments is allocated to the reporting units based on the relative fair value of the reporting unit.

Goodwill is reviewed by Veritiv for impairment on a reporting unit basis annually on October 1st or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. The testing of goodwill for possible impairment is a two-step process. In the first step, the fair value of a reporting unit is compared with its carrying value, including goodwill. If fair value exceeds the carrying value, goodwill is not considered to be impaired. If the fair value of a reporting unit is below the carrying value, then step two is performed to measure the amount of the goodwill impairment loss for the reporting unit. This analysis requires the determination of the fair value of all of the individual assets and liabilities of the reporting unit, including any currently unrecognized intangible assets, as if the reporting unit had been purchased on the analysis date. Once these fair values have been determined, the implied fair value of the unit’s goodwill is calculated as the excess, if any, of the fair value of the reporting unit determined in step one over the fair value of the net assets determined in step two. The carrying value of goodwill is then reduced to this implied value, or to zero if the fair value of the assets exceeds the fair value of the reporting unit, through a goodwill impairment charge. The impairment test performed during the fourth quarter of 2014 and 2013 indicated the fair value of the reporting units containing goodwill was in excess of the related carrying value of the net assets.

Intangible assets acquired in a business combination are recorded at fair value. The Company's intangible assets include customer relationships, trademarks and trade names and non-compete agreements. Intangible assets with finite useful lives are subsequently amortized using the straight-line method over the estimated useful lives of the assets.

Impairment of Long-Lived Assets

Long-lived assets, including finite-lived intangible assets, are amortized and tested for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. The Company assesses the recoverability of long-lived assets based on the undiscounted future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When an impairment is identified, the Company reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values.

No long-lived asset impairment charges were recorded during the years ended December 31, 2014, 2013 and 2012.

Employee Benefit Plans

The Company sponsors and/or contributes to defined contribution plans, defined benefit pension plans and multi-employer pension plans in the United States. In addition, the Company and its subsidiaries have various pension plans and other forms of retirement arrangements outside the United States. See Note 9, Employee Benefit Plans, for additional information.
      
Prior to the Spin-off, certain of xpedx’s employees participated in defined benefit pension and other postretirement benefit plans sponsored and accounted for by International Paper. In conjunction with the Spin-off, the above plans were frozen for the xpedx employees, and International Paper retained the associated liabilities. Certain xpedx union employees were added as participants to the Unisource defined benefit pension plan. In conjunction with the Merger, Veritiv assumed responsibility for Unisource’s defined benefit plans and Supplemental Executive Retirement Plan ("SERP") in the U.S. and Canada. Except as discussed below, these plans were frozen prior to the Merger.  Union employees continue to accrue benefits under the U.S. defined benefit pension plan in accordance with their collective bargaining agreements.

The determination of defined benefit pension and postretirement plan obligations and their associated costs requires the use of actuarial computations to estimate participant plan benefits to which the employees will be entitled. The Company’s significant assumptions in this regard include discount rates, rate of future compensation increases, expected long-term rates of return on plan assets, mortality rates, and other factors. Each assumption is developed using relevant company experience in conjunction with market-related data in the U.S. and Canada. All actuarial assumptions are reviewed annually with third-party consultants and adjusted, as necessary.

For the recognition of net periodic postretirement cost, the calculation of the expected long-term rate of return on plan assets is derived using the fair value of plan assets at the measurement date. Actual results that differ from the Company's assumptions are accumulated and amortized on a straight-line basis only to the extent they exceed 10% of the higher of the fair value of plan assets or the projected benefit obligation, over the estimated remaining service period of active participants. The fair value of plan assets is determined based on market prices or estimated fair value at the measurement date.

The Company also makes contributions to multi-employer pension plans for its union employees covered by such plans. For these plans, the Company recognizes a liability only for any required contributions to the plans or surcharges imposed by the plans that are accrued and unpaid at the balance sheet date. The Company does not record an asset or liability to recognize the funded status of the plans.

Stock-Based Compensation

The Company measures and records compensation expense for all stock-based awards based on the grant date fair values over the vesting period of the awards. See Note 14, Equity-Based Incentive Plans, for additional information.

Income Taxes

Veritiv records its global tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Where Veritiv believes that a tax position is supportable for income tax purposes, the item is included in the appropriate income tax returns. Where treatment of a position is uncertain, liabilities are recorded based upon an evaluation of the more likely than not outcome considering technical merits of the position based on specific tax regulations and facts of each matter. Changes to recorded liabilities are made only when an identifiable event occurs that alters the likely outcome, such as settlement with the relevant tax authority, the expiration of statutes of limitation for the subject tax year, change in tax laws, or a recent court case that addresses the matter.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income, as well as successful implementation of various tax planning strategies.

While Veritiv believes that these judgments and estimates are appropriate and reasonable under the circumstances, actual resolution of these matters may differ from recorded estimated amounts.

Fair Value Measurements

Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable.
    
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.

See Note 10, Fair Value Measurements, for further detail.

Foreign Currency

The assets and liabilities of the foreign subsidiaries are translated from their respective local currencies to the U.S. dollars at the appropriate spot rates as of the balance sheet date. Changes in the carrying value of these assets and liabilities attributable to fluctuations in spot rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income (loss) ("AOCI"). See Note 13, Shareholders' Equity, for further detail.

The revenues and expenses of the foreign subsidiaries are translated using the monthly average exchange rates during the year. The gains or losses from foreign currency transactions are included in other expense (income), net in the Consolidated and Combined Statements of Operations.

Recently Issued Accounting Standards
Standard
 
Description
 
Date of Adoption
 
Effect on the Financial Statements or Other Significant Matters
Standards that are not yet adopted:
 
 
 
 
 
 
 
 
 
 
 
 
 
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)
 
The standard will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date.
 
January 1, 2017
 
The Company is currently evaluating the alternative methods of adoption and the effect on its Consolidated and Combined Financial Statements and related disclosures.
Merger with Unisource
Merger with Unisource
2. MERGER WITH UNISOURCE

As more fully described in Note 1, Business and Summary of Significant Accounting Policies, on July 1, 2014, UWWH merged with and into Veritiv. During the year ended December 31, 2014, the Company incurred merger and integration-related expenses of $75.1 million. The following table below summarizes the components of merger and integration expenses:
 
(in millions)
Legal and other professional and consulting fees
$
29.7

Retention compensation and termination benefits
37.9

Other
7.5

Total merger and integration expenses
$
75.1



The Merger was accounted for in the Company’s financial statements using the acquisition method of accounting, with Veritiv as the accounting acquirer of Unisource. The preliminary estimated purchase price of $382.6 million was determined in accordance with the Merger Agreement. During the fourth quarter of 2014, the Company recorded a $3.1 million increase to the purchase price and corresponding adjustment to goodwill as a result of finalizing the working capital and net indebtedness adjustment with the UWWH Stockholder, less a decrease to the fair value of the contingent liability associated with the Tax Receivable Agreement. The preliminary purchase price is allocated to tangible and identifiable intangible assets and liabilities based upon their respective fair values.

The following table summarizes the components of the preliminary estimated purchase price for Unisource. The fair value of Veritiv shares transferred represents the aggregate value of 7,840,000 shares issued at the closing "when-issued" market price of the Company’s stock on June 30, 2014, the day prior to the Merger, less a discount for lack of marketability. See Note 10, Fair Value Measurements, regarding the valuation of the contingent liability.
Preliminary estimated purchase price:
(in millions)
Fair value of Veritiv shares transferred
$
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
58.8

Total preliminary estimated purchase price
$
382.6


    
The following table summarizes the preliminary allocation of the purchase price to assets acquired and liabilities assumed as of the date of the Merger:
Preliminary Allocation:
(in millions)
Cash
$
70.9

Accounts receivable
448.4

Inventories
353.8

Deferred income tax assets
71.1

Property and equipment
299.0

Goodwill
26.0

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
$
382.6



The purchase price allocated to the identifiable intangible assets acquired is as follows:
 
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
Total identifiable intangible assets acquired
$
31.5

 
 

    
The allocation of the purchase price above is considered preliminary and was based on valuation information, estimates and assumptions available on December 31, 2014. During the fourth quarter of 2014, the Company finalized certain valuation matters, including property and equipment and certain types of obligations, which resulted in a $5.8 million net decrease to goodwill. The Company is still in the process of verifying data and finalizing information related to the valuation and expects to finalize these matters within the measurement period as final asset and liability valuations are completed. The following assets and liabilities are subject to change:

•
Deferred income tax assets and liabilities;
•
Contingent liability associated with the Tax Receivable Agreement; and
•
Other intangible assets.

As management receives additional information during the measurement period, these assets and liabilities may be adjusted.

The Company has evaluated and continues to evaluate and gather information relating to the pre-acquisition contingency for the escheat audit described in Note 15, Commitments and Contingencies, that existed as of the acquisition date. Should the Company develop an estimate for this contingency during the measurement period, it will be included in the final valuation and related amounts recognized. Subsequent to the end of the measurement period, any adjustments to pre-acquisition contingency amounts will be reflected in the Company’s results of operations.

Preliminary goodwill of $26.0 million arising from the Merger consists largely of the synergies and other benefits expected from combining the operations and is not expected to be deductible for income tax purposes. See Note 4, Goodwill and Other Intangible Assets, for the preliminary allocation of goodwill to the Company's reportable segments.

Actual and Pro Forma Impact

The operating results for Unisource are included in the Company’s financial statements from July 1, 2014 through December 31, 2014. Net sales and pre-tax income attributable to Unisource during this period were $2,040.5 million and $31.2 million, respectively.
    
The following unaudited pro forma financial information presents results as if the Merger and the related financing, further described in Note 5, Debt, occurred on January 1, 2013. The historical consolidated financial information of the Company and Unisource has been adjusted in the pro forma information to give effect to pro forma events that are directly attributable to the transactions and factually supportable. The unaudited pro forma results do not reflect events that have occurred or may occur after the transactions, including the impact of any synergies expected to result from the Merger. Accordingly, the unaudited pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed date, nor is it necessarily an indication of future operating results.
(Unaudited)
Year Ended 
 December 31,
(in millions, except share and per share data)
2014
 
2013
Net sales
$
9,314.1

 
$
9,741.5

Net income(1)
$
22.7

 
$
181.1

Earnings per share – basic and diluted
$
1.42

 
$
11.32

Weighted-average shares outstanding – basic and diluted
16,000,000

 
16,000,000

(1) Unisource's historical results for the year ended December 31, 2013 include the reversal of a $238.7 million valuation allowance against its U.S. federal and a substantial portion of its state net deferred tax assets.

The unaudited pro forma information reflects primarily the following pre-tax adjustments for the respective periods:

•
Merger and integration expenses: Merger and integration expenses of $75.1 million incurred during the year ended December 31, 2014 have been eliminated. Pro forma net income for the year ended December 31, 2013 includes merger and integration expenses of $103.5 million.
•
Incremental depreciation and amortization expense: Pro forma net income for the years ended December 31, 2014 and 2013 includes $2.5 million and $14.0 million, respectively, of incremental depreciation and amortization expense related to the fair value adjustments to property and equipment and identifiable intangible assets.

A combined effective U.S. federal statutory and state rate of 39.0% was used to determine the after-tax impact on net income of the pro forma adjustments.
Restructuring Charges
Restructuring Charges
3. RESTRUCTURING CHARGES

Veritiv Restructuring Plan

As part of the Spin-off and Merger, the Company is executing on a multi-year restructuring program of its North American operations intended to integrate the legacy xpedx and Unisource operations, generate cost savings and capture synergies across the combined company. The restructuring plan includes initiatives to: (i) consolidate warehouse facilities in overlapping markets, (ii) improve the efficiency of the delivery network, (iii) consolidate customer service centers, (iv) reorganize the field sales and operations functions and (v) restructure the corporate general and administrative functions.
During the fourth quarter of 2014, the Company initiated the process of consolidating warehouse and customer service locations of the legacy organizations as well as realigning its field and sales management function.

The Company recorded restructuring charges of $5.1 million during the fourth quarter of 2014 related to these initiatives. See Note 17, Segment and Geographic Information, for the impact these charges had on the Company's reportable segments. Other direct costs reported in the table below include facility closing costs and other incidental costs associated with the development, communication, administration and implementation of these initiatives.

The corresponding liability and activity are detailed in the table below.
(in millions)
Severance and Related Costs
Other Direct Costs
Total
Liability at December 31, 2013
$
—

$
—

$
—

Costs incurred
4.7

0.4

5.1

Payments
(1.0
)
(0.2
)
(1.2
)
Liability at December 31, 2014
$
3.7

$
0.2

$
3.9



xpedx Restructuring Plan

During 2010, xpedx completed a strategic assessment of its operating model, resulting in the decision to begin a multi-year restructuring plan. The restructuring plan involved the establishment of a lower cost operating model in connection with the repositioning of the Print segment in response to changing market considerations. The restructuring plan included initiatives to (i) optimize the warehouse network, (ii) improve the efficiency of the sales team and (iii) reorganize the procurement function. The plan was launched in 2011 and was substantially completed by June 30, 2014.

The restructuring plan identified locations to be affected and a range of time for specific undertakings. During 2013 and 2012, xpedx closed six and 118 locations, respectively. There were no locations closed in 2014 under this plan. xpedx recorded restructuring income of $1.1 million and charges of $37.9 million and $35.1 million during the years ended December 31, 2014, 2013 and 2012, respectively, related to these closures. The income and charges were as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Facility costs
$
0.3

 
$
15.2

 
$
13.0

Severance
0.2

 
16.9

 
11.9

Personnel costs
—

 
10.9

 
10.6

Accelerated amortization and depreciation
—

 
0.3

 
1.2

Professional services
—

 
1.0

 
1.1

Gain on sale of fixed assets
(1.6
)
 
(6.4
)
 
(2.7
)
Total
$
(1.1
)
 
$
37.9

 
$
35.1



The corresponding liability and activity during the periods presented are detailed in the table below. In connection with the Spin-off on July 1, 2014, the remaining liability at June 30, 2014 was transferred to International Paper. See Note 8, Related Party Transactions, for more details.
(in millions)
Total
Liability at December 31, 2012
$
3.8

Costs incurred
44.0

Payments
(39.7
)
Adjustment of prior year's estimate
(0.4
)
Liability at December 31, 2013
7.7

Costs incurred
0.1

Payments
(3.9
)
Adjustment of prior year's estimate
(0.3
)
Liability transferred to Parent in connection with Spin-off
(3.6
)
Liability at December 31, 2014
$
—

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
4. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

At December 31, 2013, the net goodwill balance was $26.4 million and was specific to the Packaging reportable segment. There were no additions to goodwill during the year ended December 31, 2013. The following table sets forth the changes in the carrying amount of goodwill during 2014:
(in millions)
Print
 
Publishing
 
Packaging
 
Facility Solutions
 
Corporate & Other
 
Total
Balance at December 31, 2013
$
—

 
$
—

 
$
26.4

 
$
—

 
$
—

 
$
26.4

Additions to goodwill
—

 
—

 
17.9

 
1.9

 
6.2

 
26.0

Balance at December 31, 2014
$
—

 
$
—

 
$
44.3

 
$
1.9

 
$
6.2

 
$
52.4



As of December 31, 2013, xpedx had recognized accumulated impairment charges of $265.4 million, $57.1 million and $50.5 million related to its Print, Facility Solutions and Publishing segments, respectively. There were no goodwill impairment charges for the year ended December 31, 2014. Additions to goodwill in 2014 represent the preliminary goodwill resulting from the Merger. See Note 2, Merger with Unisource, for further details.

Other Intangible Assets

The components of the Company's other intangible assets were as follows:
 
December 31, 2014
 
December 31, 2013
(in millions)
Gross Carrying Amount
 
Accumulated Amortization
 
Net
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net
Customer relationships
$
55.0

 
$
23.7

 
$
31.3

 
$
30.7

 
$
21.5

 
$
9.2

Trademarks/Trade names
4.3

 
1.1

 
3.2

 
0.2

 
0.1

 
0.1

Non-compete agreements
3.1

 
1.5

 
1.6

 
—

 
—

 
—

Total
$
62.4

 
$
26.3

 
$
36.1

 
$
30.9

 
$
21.6

 
$
9.3



Additions to other intangible assets in 2014 represent the preliminary identifiable intangible assets resulting from the Merger, as discussed in Note 2, Merger with Unisource.

The Company recorded amortization expense of $4.7 million, $1.5 million and $2.3 million during the years ended December 31, 2014, 2013 and 2012, respectively.

The estimated aggregate amortization expense for each of the five succeeding years is as follows (in millions):
Year
 
Total
2015
 
$
5.8

2016
 
3.6

2017
 
3.6

2018
 
3.6

2019
 
3.3

Debt
Debt
5. DEBT

The Company did not have any long-term debt obligations as of December 31, 2013. As of December 31, 2014, the Company's long-term debt obligations were as follows:
(in millions)
December 31, 2014
ABL Facility
$
847.8

Equipment capital lease obligations
11.0

Total debt
858.8

Less: current portion of long-term debt
(3.8
)
Long-term debt, net of current maturities
$
855.0


        
ABL Facility

In conjunction with the Spin-off and Merger, and to refinance existing debt of Unisource, Veritiv entered into a commitment with a group of lenders for a $1.4 billion asset-based lending facility (the "ABL Facility"). The ABL Facility is comprised of U.S. and Canadian sub-facilities of $1,250.0 million and $150.0 million, respectively. The ABL Facility is available to be drawn in U.S. dollars, in the case of the U.S. sub-facilities, and in U.S. dollars or Canadian dollars, in the case of the Canadian sub-facilities, or in other currencies that are mutually agreeable. The Company's accounts receivable and inventories in the U.S. and Canada are collateral under the ABL Facility.

The ABL Facility will mature and the commitments thereunder will terminate after July 1, 2019; however, it provides for the right of the individual lenders to extend the maturity date of their respective commitments and loans upon the request of Veritiv and without the consent of any other lenders. The ABL Facility may be prepaid at Veritiv's option at any time without premium or penalty and is subject to mandatory prepayment if the amount outstanding under the ABL Facility exceeds either the aggregate commitments with respect thereto or the current borrowing base, in an amount equal to such excess.

The ABL Facility has a springing minimum fixed charge coverage ratio of at least 1.00 to 1.00 on a trailing four-quarter basis, which will be tested only when specified availability is less than limits outlined under the ABL Facility. At December 31, 2014, the above test was not applicable.

Availability under the ABL Facility is determined based upon a monthly borrowing base calculation which includes eligible customer receivables and inventory, less outstanding borrowings, letters of credit and certain designated reserves. As of December 31, 2014, the available additional borrowing capacity under the ABL Facility was approximately $392.0 million.

Under the terms of the ABL Facility, interest rates are based upon LIBOR or the prime rate plus a margin rate, or in the case of Canada, a banker’s acceptance rate or base rate plus a margin rate. At December 31, 2014, the weighted-average borrowing interest rate was 2.0%.

Financing and other related costs incurred in connection with the ABL Facility are reflected in other non-current assets in the Consolidated and Combined Balance Sheets and are amortized over the ABL Facility term. For the year ended December 31, 2014, interest expense, net in the Consolidated and Combined Statements of Operations included $2.2 million of amortization of deferred financing fees.
    
Senior Credit Facility

Unisource had an asset-based senior credit facility agreement (the "Senior Credit Facility") of which $303.9 million was drawn and outstanding as of July 1, 2014. On July 1, 2014, Veritiv assumed the Senior Credit Facility debt in connection with the Merger and used a portion of the proceeds borrowed against the ABL Facility to repay all of the outstanding balance under the Senior Credit Facility. Accordingly, the Senior Credit Facility expired     on July 1, 2014 as a result of the prepayment.
Leases (Notes)
Leases
6. LEASES

Lease Commitments

Future minimum lease payments at December 31, 2014 were as follows:
 
 
 
Operating Leases
(in millions)
Financing Obligations to Related Party and Equipment Capital Leases
 
Lease Obligations
 
Sublease Income
 
Total
2015
$
20.7

 
$
77.8

 
$
(0.3
)
 
$
77.5

2016
19.8

 
68.1

 
(0.2
)
 
67.9

2017
19.4

 
58.3

 
(0.1
)
 
58.2

2018
8.9

 
49.4

 
(0.1
)
 
49.3

2019
0.4

 
40.7

 
—

 
40.7

Thereafter
0.3

 
87.2

 
—

 
87.2

 
69.5

 
381.5

 
(0.7
)
 
380.8

Amount representing interest
(6.3
)
 
—

 
—

 
—

Total future minimum lease payments
$
63.2

 
$
381.5

 
$
(0.7
)
 
$
380.8



Financing Obligations to Related Party
In connection with Bain Capital Fund VII, L.P.’s acquisition of its 60% interest in UWWH on November 27, 2002, Unisource transferred 40 of its U.S. warehouse and distribution facilities (the "Properties") to Georgia-Pacific who then sold 38 of the Properties to an unrelated third-party (the "Purchaser/Landlord"). Contemporaneously with the sale, Georgia-Pacific entered into lease agreements with the Purchaser/Landlord with respect to the individual 38 Properties and concurrently entered into sublease agreements with Unisource, which are set to expire in June 2018. As a result of certain forms of continuing involvement, these transactions did not qualify for sale-leaseback accounting. Accordingly, the leases were classified as financing transactions. At the end of the lease term, the net remaining financing obligation of $174.0 million will be settled by the return of the assets to the Purchaser/Landlord.

The lease and sublease agreements also include rent schedules and escalation clauses throughout the lease and sublease terms. Subject to certain conditions, Unisource has the right to sublease any of the Properties. Under the terms of the lease and sublease agreements, Georgia-Pacific and Unisource are responsible for all costs and expenses associated with the Properties, including the operation, maintenance and repair, taxes and insurances. Currently, Unisource leases from Georgia-Pacific two remaining Properties that are directly owned by Georgia-Pacific and has classified them as capital or operating leases in accordance with the accounting guidance.

Operating Leases

Certain properties and equipment are leased under cancelable and non-cancelable agreements. The Company recorded rent expense of $92.4 million, $65.0 million and $64.4 million for the years ended December 31, 2014, 2013 and 2012, respectively.
Income Taxes
Income Taxes
7. INCOME TAXES

As described in Note 1, Business and Summary of Significant Accounting Policies, Veritiv was formed through a merger of xpedx, previously a division of International Paper, and Unisource Worldwide, Inc. on July 1, 2014. Accordingly, the tax provision included for the periods prior to July 1, 2014 include only the financial results of xpedx presented on a carve-out basis from International Paper’s historical accounting records. For periods subsequent to July 1, 2014 the tax provision presents the consolidated results of Veritiv on a stand-alone basis.
    
The Company is subject to federal, state and local income taxes in the United States, as well as income taxes in Canada, Mexico and other foreign jurisdictions. The domestic (United States) and foreign components of the Company's income (loss) from continuing operations before income taxes were as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Domestic (United States)
$
(19.0
)
 
$
(2.1
)
 
$
15.8

Foreign
(2.6
)
 
2.5

 
7.7

Income (loss) from continuing operations before income taxes
$
(21.6
)
 
$
0.4

 
$
23.5



Income tax expense (benefit) in the Consolidated and Combined Statements of Operations consisted of the following:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Current Provision:
 
 
 
 
 
U.S. Federal
$
5.0

 
$
(3.3
)
 
$
4.6

U.S. State
0.9

 
(0.1
)
 
1.0

Foreign
1.7

 
0.5

 
2.1

Total current income tax expense (benefit)
$
7.6

 
$
(2.9
)
 
$
7.7

 
 
 
 
 
 
Deferred, net:
 
 
 
 
 
U.S. Federal
$
(8.3
)
 
$
3.0

 
$
1.0

U.S. State
(1.2
)
 
0.2

 
0.3

Foreign
(0.2
)
 
0.1

 
0.1

Total deferred, net
(9.7
)
 
3.3

 
1.4

Provision for income tax expense (benefit)
$
(2.1
)
 
$
0.4

 
$
9.1



Reconciliation between the federal statutory rate and the effective tax rate is as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Income from continuing operations before income taxes
$
(21.6
)
 
$
0.4

 
$
23.5

Statutory U.S. income tax rate
35.0
%
 
35.0
%
 
35.0
%
Tax expense using statutory U.S. income tax rate
$
(7.6
)
 
$
0.1

 
$
8.2

Foreign income tax rate differential
0.3

 
(0.1
)
 
(0.6
)
State tax (net of federal benefit)
(0.3
)
 
—

 
0.7

Meals and entertainment
0.7

 
0.4

 
0.6

Transaction costs
1.6

 
—

 
—

Change in valuation allowance
2.0

 
—

 
—

Executive compensation
0.9

 
—

 
—

Other
0.3

 
—

 
0.2

Income tax provision
$
(2.1
)
 
$
0.4

 
$
9.1

Effective income tax rate
9.7
%
 
100.0
%
 
38.7
%


Deferred income tax assets and liabilities as of December 31, 2014 and 2013 were as follows:
 
December 31, 2014
 
December 31, 2013
(in millions)
U.S.
 
Non-U.S.
 
U.S.
 
Non-U.S.
Deferred income tax assets:
 
 
 
 
 
 
 
Accrued compensation
$
16.8

 
$
—

 
$
7.1

 
$
—

Capital lease obligations to related party
86.8

 
0.8

 
—

 
—

Goodwill and other intangibles, net
5.7

 
—

 
18.2

 
—

Property and equipment, net
—

 
0.3

 
—

 
—

Long-term compensation
15.2

 
6.0

 
8.3

 
—

Net operating losses and credit carryforwards
120.5

 
8.7

 
3.4

 
—

Allowance for doubtful accounts
13.8

 
—

 
8.6

 
—

Other
1.8

 
0.5

 
3.7

 
0.5

Gross deferred income tax assets
260.6

 
16.3

 
49.3

 
0.5

Less valuation allowance
(26.1
)
 
(15.7
)
 
—

 
—

Total deferred tax asset
234.5

 
0.6

 
49.3

 
0.5

Deferred income tax liabilities:
 
 
 
 
 
 
 
Property and equipment, net
(95.1
)
 
—

 
(8.7
)
 
—

Inventory reserve
(50.1
)
 
—

 
(31.9
)
 
—

Prepaid assets
(3.8
)
 
—

 
—

 
—

Other
(1.6
)
 
—

 
—

 
—

Total deferred tax liability
$
(150.6
)
 
$
—

 
$
(40.6
)
 
$
—

Net deferred income tax asset (liability)
$
83.9

 
$
0.6

 
$
8.7

 
$
0.5



Deferred income tax asset valuation allowance is as follows:
 
Year Ended December 31,
(in millions)
2014
Balance at July 1, 2014
$
39.8

Additions
2.0

Subtractions
—

Balance at end of year
$
41.8



The Company recorded a valuation allowance on its deferred income tax assets as of December 31, 2014 of $41.8 million, comprised of $24.4 million against its U.S. federal net deferred tax assets, $1.7 million against its U.S. state net deferred tax assets and $15.7 million against its foreign net deferred tax assets. There was no valuation allowance recorded as of December 31, 2013 and 2012. As a result of the Merger, a significant change in the ownership of the Company occurred which, pursuant to the Internal Revenue Code, limits on an annual basis the Company’s ability to utilize its U.S. federal and state net operating loss carryforwards ("NOLs"). The Company’s NOLs will continue to be available to offset taxable income and tax liabilities (until such NOLs and credits are either used or expire) subject to the Section 382 annual limitation. If the annual limitation amount is not fully utilized in a particular tax year, then the unused portion from that particular tax year will be added to the annual limitation in subsequent years.

In analyzing the future realization of Veritiv's deferred tax assets, management evaluated all available positive and negative evidence and determined that it was more likely than not that the remaining deferred tax assets will be realized. In this analysis, management has considered reversals of deferred tax liabilities, projected future taxable income, available tax-planning strategies, and results of recent operations. In projecting future taxable income, management begins with historical results and incorporates assumptions about the amount of future federal, state and foreign pre-tax operating income. The assumptions about future taxable income require significant judgment and are consistent with Veritiv's plans and estimates used to manage the underlying businesses.



In general, it is the practice and intention of Veritiv to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of December 31, 2014, Veritiv’s tax basis is in excess of its financial reporting basis of certain investments in non-U.S. subsidiaries. The Company does not believe these temporary differences will reverse in the foreseeable future and, therefore, no deferred tax asset has been recognized with respect to these basis differences. The Company does have unremitted foreign earnings of approximately $20.4 million with respect to certain of its non-U.S. subsidiaries that would be taxable as dividends if repatriated to the U.S. The estimated income and withholding tax liability associated with the remittance of these earnings would be approximately $8.0 million. The Company has not recorded a deferred tax liability associated with these unremitted earnings.

Veritiv applies a "more likely than not" threshold to the recognition and de-recognition of uncertain tax positions. A change in judgment related to prior years' uncertain tax positions is recognized in the period of such change. The following table presents the rollforward of activity for the years ended December 31, 2014, 2013 and 2012 for uncertain tax positions:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Beginning of period
$
(0.6
)
 
$
(1.7
)
 
$
(1.4
)
Additions based on tax positions taken during the current period
—

 
—

 
(0.3
)
Reductions based on tax positions taken during a prior period
0.6

 
—

 
—

Additions based on tax positions taken during a prior period
(1.0
)
 
—

 
—

Lapses of statutes of limitations
—

 
1.1

 
—

Total gross unrecognized tax benefit
$
(1.0
)
 
$
(0.6
)
 
$
(1.7
)


Included in the balance as of December 31, 2013 and December 31, 2012 are $0.6 million and $1.7 million, respectively, for tax positions for which the ultimate benefits are highly certain, but for which there is uncertainty about the timing of such benefits. There are no such amounts included in the balance as of December 31, 2014. However, except for the possible effect of any penalties, any disallowance that would change the timing of these benefits would not affect the annual effective tax rate, but would accelerate the payment of cash to the taxing authority to an earlier period. Included in the balance of unrecognized tax benefits as of December 31, 2014 is $1.0 million of tax benefits that, if recognized, would affect the effective tax rate. There are no such amounts as of December 31, 2013 or 2012.

The Company accrues interest on unrecognized tax benefits as a component of interest expense. Penalties, if incurred, are recognized as a component of income tax expense. The Company recorded interest of $0.6 million as of December 31, 2014 and less than $0.1 million as of December 31, 2013 and 2012. Additionally, the Company recorded penalties as of December 31, 2014 of $0.2 million. The Company did not record any penalties as of December 31, 2013 and 2012.

During 2015, Veritiv expects to resolve certain tax matters related to U.S. and foreign jurisdictions. As of December 31, 2014, Veritiv estimates that it is reasonably possible that unrecognized tax benefits may decrease by $0.3 million in the next twelve months due to the resolution of these issues or due to a lapse in the statute of limitations. With the exception of these tax matters, Veritiv does not expect any significant changes in unrecognized tax benefits in 2015.

In the U.S., Veritiv is generally subject to examination by the Internal Revenue Service ("IRS") and certain states for fiscal years 2010 and later; however, it may be subject to IRS and state tax authority adjustments for years prior to 2010 to the extent of losses or other tax attributes carrying forward from the earlier years. Unisource Canada remains subject to examination by the Canadian Revenue Agency for fiscal years 2010 and later and certain provinces for fiscal years 2009 and later.

As of December 31, 2014, Veritiv has federal, state and foreign income tax NOLs, available to offset future taxable income, of $312.5 million, $230.0 million and $34.4 million which will expire at various dates from 2015 through 2034, with the exception of certain foreign NOLs that do not expire but have a full valuation allowance.

On September 13, 2013, the U.S. Treasury Department and the IRS issued final regulations that address costs incurred in acquiring, producing, or improving tangible property (the "tangible property regulations"). The tangible property regulations are generally effective for tax years beginning on or after January 1, 2014. The estimated tax impact of these accounting method changes has an immaterial effect on non-current deferred tax assets, with a corresponding reduction in current taxes payable, and has been reflected in the Consolidated and Combined Balance Sheet as of December 31, 2014.
Related-Party Transactions
Related Party Transactions
8. RELATED PARTY TRANSACTIONS

Agreements with the UWWH Stockholder

As described in Note 1, Business and Summary of Significant Accounting Policies, on the Distribution Date the UWWH Stockholder, the sole shareholder of UWWH, received 7,840,000 shares of Veritiv common stock for all outstanding shares of UWWH common stock that it held in a private placement transaction. Additionally, Veritiv and the UWWH Stockholder executed the following agreements:

•
Registration Rights Agreement: The Registration Rights Agreement provides the UWWH Stockholder with certain demand and piggyback registration rights. Under this Agreement, the UWWH Stockholder is also entitled to transfer its Veritiv common stock to one or more of its affiliates or equity-holders and may exercise registration rights on behalf of such transferees if such transferees become a party to the Registration Rights Agreement. The UWWH Stockholder, on behalf of the holders of shares of Veritiv’s common stock that are party to the Registration Rights Agreement, under certain circumstances and provided certain thresholds described in the Registration Rights Agreement are met, may make a written request to the Company for the registration of the offer and sale of all or part of the shares subject to such registration rights. If the Company registers the offer and sale of its common stock (other than pursuant to a demand registration or in connection with registration on Form S-4 and Form S-8 or any successor or similar forms, or relating solely to the sale of debt or convertible debt instruments) either on its behalf or on the behalf of other security holders, the holders of the registration rights under the Registration Rights Agreement are entitled to include their shares in such registration. The demand rights described commenced 180 days after the Distribution Date. Veritiv is not required to effect more than one demand registration in any 150-day period or more than two demand registrations in any 365-day period. If Veritiv believes that a registration or an offering would materially affect a significant transaction or would require it to disclose confidential information which it in good faith believes would be adverse to its interest, then Veritiv may delay a registration or filing for no more than 120 days in a 360-day period.

•
Tax Receivable Agreement: The Tax Receivable Agreement sets forth the terms by which Veritiv generally will be obligated to pay the UWWH Stockholder an amount equal to 85% of the U.S. federal, state and Canadian income tax savings that Veritiv actually realizes as a result of the utilization of Unisource Worldwide, Inc.’s net operating losses attributable to taxable periods prior to the date of the Merger. For purposes of the Tax Receivable Agreement, Veritiv’s income tax savings will generally be computed by comparing Veritiv’s actual aggregate U.S. federal, state and Canadian income tax liability for taxable periods (or portions thereof) beginning after the date of the Merger to the amount of Veritiv’s aggregate U.S. federal, state and Canadian income tax liability for the same periods had Veritiv not been able to utilize Unisource Worldwide, Inc.’s net operating losses 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 filed its U.S. federal income tax return for the applicable taxable year and the date that such tax return was due (without extensions) until payments are made. Under the Tax Receivable Agreement, 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 Tax Receivable Agreement would be adjusted to the extent possible to reflect the result of such disallowance or adjustment). The Tax Receivable Agreement will be binding on and adapt to the benefit of any permitted assignees of the UWWH Stockholder and to any successors to any of the parties of the Tax Receivable Agreement to the same extent as if such permitted assignee or successor had been an original party to the Tax Receivable Agreement.
 
Transactions with Georgia-Pacific

Veritiv purchases certain inventory items from, and sells certain inventory items to, Georgia-Pacific in the normal course of business. As a result of the Merger, Georgia-Pacific is a related party. For the year ended December 31, 2014, the Company sold products to Georgia-Pacific in the amount of $18.4 million, reflected in net sales. For the year ended December 31, 2014, the Company purchased and recognized in cost of products sold inventory from Georgia-Pacific of $136.1 million. The aggregate amount of inventories purchased from Georgia-Pacific that remained on Veritiv's Consolidated Balance Sheet was $26.6 million as of December 31, 2014. Related party payable to and receivable from Georgia-Pacific were $11.0 million and $3.9 million, as of December 31, 2014, respectively.

See Note 6, Leases, for information on the Company's financing obligations to Georgia-Pacific.

Relationship between Veritiv and International Paper

Transactions with International Paper

Prior to the Spin-off, xpedx purchased certain inventory items from, and sold certain inventory items to, International Paper in the normal course of business. For the years ended December 31, 2014, 2013 and 2012, the Company sold products to International Paper in the amount of $24.3 million, $53.0 million and $65.1 million, respectively, reflected in net sales. For the years ended December 31, 2014, 2013 and 2012, the Company purchased and recognized in cost of products sold inventory from International Paper of $276.5 million, $604.4 million and $639.0 million, respectively. As of December 31, 2013, the aggregate amount of inventories purchased from International Paper that remained on the Company’s Combined Balance Sheet was $48.5 million. Related party payable to and receivable from International Paper were $2.6 million and $10.1 million as of December 31, 2013, respectively. After the Spin-off and the Merger, Veritiv continues to purchase and sell certain inventory items to International Paper that are considered transactions in the normal course of the Company’s operations. While the Company and International Paper have entered into a transition services agreement, International Paper is not considered a related party subsequent to the Spin-off.

Parent Company Investment

Net transfers (to) from International Paper are included within Parent company equity on the Combined Balance Sheet as of December 31, 2013. The components of net transfers (to) from Parent for the years ended December 31, 2014, 2013 and 2012, were as follows:     
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Intercompany sales and purchases, net
$
255.4

 
$
556.6

 
$
575.2

Cash pooling and general financing activities
(322.5
)
 
(675.8
)
 
(695.4
)
Corporate allocations including income taxes
34.7

 
84.1

 
84.8

Net adjustments in conjunction with the Spin-off
(49.6
)
 
—

 
—

Total net transfers to International Paper
$
(82.0
)
 
$
(35.1
)
 
$
(35.4
)


In 2011, xpedx borrowed approximately $20.3 million from the Parent in the form of Promissory Notes. On December 31, 2013, xpedx entered into a General Conveyance Agreement with its Parent whereby the debt was assumed by the Parent.

In conjunction with the Spin-off, certain xpedx assets and liabilities were retained by International Paper. Such assets and liabilities were identified and quantified in accordance with the terms agreed to in the Contribution and Distribution Agreement ("C&DA") dated January 28, 2014, entered into by International Paper, xpedx Holding Company, UWWH and the UWWH Stockholder. Additionally, in accordance with the C&DA, the parties agreed to settle, within 30 days of the Distribution Date, all intercompany balances outstanding between International Paper and xpedx as of the Distribution Date, determined based on an agreed-upon formula. The net effect of assets and liabilities retained and adjustments to intercompany balances as of the Distribution Date are reflected in the table above in the net adjustments in conjunction with the Spin-off. These primarily include $24.3 million of net assets transferred to International Paper and settlement of intercompany balances of $24.6 million as of the Distribution Date.

Allocation of General Corporate Expenses

Prior to the Spin-off, the xpedx financial statements included expense allocations for certain functions previously provided by International Paper, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, insurance and stock-based compensation. These expenses were allocated on the basis of direct usage when identifiable, with the remainder principally allocated on the basis of percent of capital employed, headcount, sales or other measures. Prior to the Spin-off, $25.5 million, $84.0 million and $78.4 million of expenses were allocated to xpedx and were included within selling and administrative expenses in the Consolidated and Combined Statements of Operations for the years ended December 31, 2014, 2013 and 2012.

Separation Agreements with Former Unisource CEO

Effective as of the Distribution Date, Allan R. Dragone, Jr. ceased to be the Chief Executive Officer of Unisource and became a member of Veritiv’s Board of Directors. Under his then existing employment agreement with Unisource, Mr. Dragone was entitled to receive severance benefits, subject to his execution and non-revocation of a general release of claims against Unisource, the Company and International Paper. Under a Separation and Non-Competition Agreement entered into between the Company and Mr. Dragone as of June 30, 2014 (the "Separation Agreement"), Mr. Dragone received an additional $3.0 million in severance pay and agreed to be bound by the restrictive covenants set forth in the Separation Agreement. For the year ended December 31, 2014, the Company recognized $5.4 million in expense related to Mr. Dragone's employment agreement and the Separation Agreement, which is reflected in merger and integration expenses in the Consolidated and Combined Statements of Operations. In addition, as part of his employment agreement, Mr. Dragone exercised his right to sell his personal residence to the Company. The Company completed the purchase of the residence on February 10, 2015.
Employee Benefit Plans
Employee Benefit Plans
9. EMPLOYEE BENEFIT PLANS

Defined Contribution Plans

Veritiv sponsors qualified defined contribution plans covering its employees in the U.S. and Canada. The defined
contribution plans allow eligible employees to contribute a portion of their salary to the plans and Veritiv makes matching
contributions to participant accounts on a specified percentage of employee deferrals as determined by the provisions of each plan.

Prior to the Spin-off, certain employees of xpedx participated in defined contribution plans sponsored by International Paper. International Paper's matching contributions to the plans totaled approximately $8.9 million, $16.7 million and $17.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. After the Spin-off, xpedx employees commenced participating in the Veritiv defined contribution plan (formerly known as Unisource plan). The assets of the xpedx employees under International Paper plans were transferred to Veritiv's plan. For the year ended December 31, 2014, Veritiv's matching contributions to this plan totaled $5.6 million.

In conjunction with the Merger, Veritiv assumed responsibility for Unisource's defined contribution retirement plans in the U.S. and Canada. Veritiv’s total contribution to these plans was $2.4 million for the year ended December 31, 2014.
Deferred Compensation Savings Plans

In conjunction with the Merger, Veritiv assumed responsibility for Unisource's legacy deferred compensation savings plan. Unisource maintained deferred compensation obligations for certain employees from its past acquisitions. Unisource agreed to pay these employees deferred compensation in return for services rendered prior to their retirement. In general, the payout terms varied for each employee agreement and were paid in monthly or annual installments ranging up to 15 years from the date of eligibility.

For the year ended December 31, 2014, the cost of the deferred compensation agreements was $2.0 million. The deferred compensation liability as of December 31, 2014 was $20.9 million with $2.7 million included in other accrued liabilities and $18.2 million included in other non-current liabilities in the Consolidated and Combined Balance Sheets.

Effective January 1, 2015, Veritiv established a deferred compensation savings plan which provides for the deferral of salaries, commissions or bonuses of eligible non-union employees.

Defined Benefit Plans

At December 31, 2014, Veritiv did not maintain any active defined benefit plans for its non-union employees.

Certain of xpedx’s employees participated in defined benefit pension and other post-retirement benefit plans sponsored and accounted for by International Paper. In conjunction with the Spin-off, the above plans were frozen for the xpedx employees, and International Paper retained the associated liabilities. Certain xpedx union employees were added as participants to the Unisource's defined benefit pension plan. The amount of net pension and other post-employment benefit expense attributable to xpedx related to the International Paper sponsored plans was $8.0 million, $15.1 million and $12.7 million for the years ended December 31, 2014, 2013 and 2012, respectively.

In conjunction with the Merger, Veritiv assumed responsibility for Unisource’s defined benefit plans and Supplemental Executive Retirement Plans ("SERP") in the U.S. and Canada. Except as discussed below, these plans were frozen prior to the Merger.

Unisource sponsored a defined benefit pension plan for its non-union and union employees and a SERP for certain highly compensated employees. On September 26, 2013, the U.S. defined benefit pension plan received actuarial certification that eligible U.S. non-union participants were permitted to receive lump sum payments for their full cash balance accounts. Expected benefit payments in the U.S. plan assume that vested terminated participants will take lump sum payments at retirement age. Union employees continue to accrue benefits under the U.S. defined benefit pension plan in accordance with their collective bargaining agreements.

In Canada, Unisource sponsored one non-union and two union defined benefit plans also known as Registered Pension Plans. Additionally, Unisource maintained a nonregistered SERP for certain highly compensated employees in Canada that provided pension benefits in excess of the registered plan compensation limits. The non-union defined benefit plan and the SERP plan were frozen for service credit, but participants were still eligible for early retirement benefits, and final average earnings continued to be used for calculating retirement benefits. The Canada union defined benefit plans were frozen for new participants under the two collective bargaining agreements.

Benefit Obligations and Funded Status

The following table provides information about the Unisource U.S. and Canadian defined benefit pension and SERP plans assumed by Veritiv due to the Merger:
(in millions)
U.S.
 
Canada
Accumulated benefit obligation at December 31, 2014
$
93.7

 
$
79.0

 
 
 
 
Change in projected benefit obligation:
 
 
 
Benefit obligation at July 1, 2014
$
87.9

 
$
92.7

Service cost
0.4

 
0.1

Interest cost
1.7

 
1.9

Actuarial loss
5.9

 
4.4

Benefits paid
(2.0
)
 
(2.0
)
Settlements
(0.2
)
 
—

Foreign exchange adjustments
—

 
(7.7
)
Projected benefit obligation at December 31, 2014
$
93.7

 
$
89.4

Change in plan assets:
 
 
 
Plan assets at July 1, 2014
$
81.6

 
$
68.7

Employer contributions
0.8

 
2.0

Investment returns
0.4

 
4.1

Benefits paid
(2.0
)
 
(2.0
)
Administrative expenses paid
(0.4
)
 
—

Settlements
(0.2
)
 
—

Currency translation adjustments
—

 
(6.4
)
Plan assets at December 31, 2014
$
80.2

 
$
66.4

Underfunded status at December 31, 2014
$
(13.5
)
 
$
(23.0
)


Balance Sheet Positions
 
December 31, 2014
(in millions)
U.S.
 
Canada
Amounts recognized in the Consolidated and Combined Balance Sheets consist of:
 
 
 
Other current liabilities
$
0.1

 
$
0.1

Defined benefit pension obligations
13.4

 
22.9

Net liability recognized
$
13.5

 
$
23.0

 
December 31, 2014
(in millions)
U.S.
 
Canada
Amounts not yet reflected in net periodic benefit cost and included in AOCI consist of:
 
 
 
Net loss, net of tax
$
5.2

 
$
2.2



Net Periodic Cost

Total net periodic pension cost associated with the defined benefit pension and SERP plans is summarized below:
 
Year Ended December 31, 2014
(in millions)
U.S.
 
Canada
Components of net periodic benefit cost:
 
 
 
Service cost
$
0.8

 
$
0.1

Interest cost
1.7

 
1.9

Expected return on plan assets
(3.1
)
 
(1.9
)
Net periodic benefit cost (credit)
$
(0.6
)
 
$
0.1



Veritiv does not expect any amounts in AOCI to be recognized as components of net periodic pension cost in 2015.
    
Fair Value of Plan Assets

U.S. and Canada pension plan assets are primarily invested in broad-based mutual funds and pooled funds comprised of U.S. and non-U.S. equities, U.S. and non-U.S. high-quality and high-yield fixed income securities, and short-term interest bearing securities or deposits.
 
The underlying investments of the plan assets are either valued using quoted prices in active markets (Level 1) or valued as of the most recent trade date (Level 2). The following table presents Veritiv’s plan assets using the fair value hierarchy as of December 31, 2014:
(in millions)
Total
 
Level 1
 
Level 2
 
Level 3
Investments – U.S.:
 
 
 
 
 
 
 
Equity securities
$
53.3

 
$
53.3

 
$
—

 
$
—

Fixed income securities
26.7

 
26.7

 
—

 
—

Cash and short-term securities
0.2

 
0.2

 
—

 
—

Total
$
80.2

 
$
80.2

 
$
—

 
$
—

(in millions)
Total
 
Level 1
 
Level 2
 
Level 3
Investments – Canada:
 
 
 
 
 
 
 
Equity securities
$
42.4

 
$
—

 
$
42.4

 
$
—

Fixed income securities
22.9

 
—

 
22.9

 
—

Cash and short-term securities
1.1

 
1.1

 
—

 
—

Total
$
66.4

 
$
1.1

 
$
65.3

 
$
—


    
The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. Valuation methodologies used for assets and liabilities measured at fair value are as follows:

* Equity Securities: Common and preferred stock are valued at the closing price reported on the active market on which the individual securities are traded. Commingled funds are valued at the net asset value of units held at year end, as determined by a pricing vendor or the fund family. Mutual funds are valued at the net asset value of shares held at year end, as determined by the closing price reported on the active market on which the individual securities are traded, or a pricing vendor or the fund family if an active market is not available. 

* Fixed Income Securities: Corporate and government bonds, including asset backed securities, are valued at the closing price reported on the active market on which the individual securities are traded, or based on institutional bid evaluations using proprietary models if an active market is not available. Mutual funds are valued at the net asset value of shares held at year end, as determined by the closing price reported on the active market on which the individual securities are traded, or a pricing vendor or the fund family if an active market is not available. 

* Cash and Short-term Securities: Cash and cash equivalents consist of U.S. and foreign currencies. Foreign currencies are reported in U.S. dollars based on currency exchange rates readily available in active markets. Short term securities are valued at the net asset value of units held at year end.
 
The weighted-average asset allocations of invested assets within Veritiv’s defined benefit pension plans as of December 31, 2014 were as follows:
 
 
 
 
 
Asset Allocation Range
(in millions)
U.S.
 
Canada
 
U.S.
 
Canada
Equity securities
$
53.3

 
$
42.4

 
55 - 75%
 
50 - 70%
Fixed income securities
26.7

 
22.9

 
20 - 40%
 
30 - 50%
Cash and short-term securities
0.2

 
1.1

 
0 - 10%
 
0 - 5%
Total
$
80.2

 
$
66.4

 
 
 
 

    
Veritiv's investment objectives include maximizing long-term returns at acceptable risk levels, diversifying among asset classes, as applicable, and among investment managers as well as establishing certain risk parameters within asset classes.     

Investment performance is evaluated at least quarterly. Total returns are compared to the weighted-average return of a benchmark mix of investments. Individual fund investments are compared to historical 3, 5 and 10 year returns achieved by funds with similar investment objectives.

Assumptions

The determination of Veritiv’s defined benefit obligations and pension expense is based on various assumptions, such as discount rates, expected long-term rates of return, rate of compensation increases, employee retirement patterns and payment selections, inflation, and mortality rates.

Veritiv's weighted average discount rates for its U.S. plans were determined by using cash flow matching techniques whereby the rates of yield curves, developed from U.S. corporate yield curves, were applied to the benefit obligations to determine the appropriate discount rate. Veritiv's weighted average discount rates for its Canadian plans were determined by using spot rates from yield curves, developed from high-quality bonds (rated AA or higher) by established rating agencies, matching the duration of the future expected benefit obligations.

Veritiv’s weighted-average expected rate of return was developed based on several factors, including projected and historical rates of returns, investment allocations of pension plan assets and inflation expectations. Veritiv evaluates the expected rate of return assumptions on an annual basis.

The following table presents significant weighted-average assumptions used in computing the benefit obligations:
 
Year Ended December 31, 2014
 
U.S.
 
Canada
Discount rate
3.75
%
 
4.00
%
Rate of compensation increases
N/A

 
3.00
%

The following table presents significant weighted-average assumptions used in computing net periodic benefit cost:
 
Year Ended December 31, 2014
 
U.S.
 
Canada
Discount rate
4.05
%
 
4.30
%
Rate of compensation increases
N/A

 
3.00
%
Expected long-term rate of return on assets
8.00
%
 
5.75
%


Cash Flows

Veritiv expects to contribute $0.1 million and $3.9 million to its U.S. and Canadian defined benefit pension and SERP plans, respectively, during 2015. Future benefit payments under the defined benefit pension and SERP plans are estimated as follows:
(in millions)
U.S.
 
Canada
2015
$
6.6

 
$
2.5

2016
4.7

 
2.7

2017
4.8

 
2.8

2018
4.8

 
2.9

2019
4.9

 
3.0

2020-2024
27.4

 
18.3



Multi-employer Plans

In conjunction with the Merger, Veritiv assumed responsibility for Unisource’s multi-employer plans. Veritiv's contributions were $3.2 million, $2.5 million and $2.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. It is reasonably possible that changes to Veritiv employees covered under these plans might result in additional contribution obligations to these plans. Any such obligations would be governed by the specific agreement between Veritiv and any such plan. Veritiv's contributions did not represent more than 5% of total contributions to any multi-employer plans. At the date these Consolidated and Combined Financial Statements were issued, Forms 5500 were not available for the plan years ending in 2014.

The risks of participating in these multi-employer pension plans are different from a single employer plan in the following aspects:

•
Assets contributed to the multi-employer plans by one employer may be used to provide benefits to employees of other participating employers,
•
If a participating employer ceases contributing to the plan, the unfunded obligations of the plan may be inherited by the remaining participating employers, and
•
If the Company stops participating in any of the multi-employer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

Veritiv’s participation in the multi-employer plans for the year ended December 31, 2014 is outlined in the table below. The "EIN/Pension Plan Number" column provides the Employee Identification Number and the three-digit plan number, if applicable. The Pension Protection Act zone listed below is based on the latest information Veritiv received from the plan and is certified by the plan’s actuary. Plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded and plans in the green zone are at least 80% funded. The "FIP/RP Status Pending/Implemented" column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement(s).
(in millions)
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)
Pension Fund
 
 
 
2014
 
2013
 
2012
 
 
Western Conference of Teamsters Pension Trust Fund (1)
916145047/001
 
Green
 
No
 
$
1.5

 
$
1.2

 
$
1.3

 
No
 
9/30/2013 - 1/31/2017
Central States, Southeast & Southwest Areas Pension Fund
366044243/001
 
Red
 
Implemented
 
0.3

 
0.2

 
0.2

 
Yes
 
2/28/2015 - 11/30/2016
Teamsters Pension Plan of Philadelphia & Vicinity
231511735/001
 
Yellow
 
Implemented
 
0.3

 
0.3

 
0.3

 
Yes
 
3/31/2015 - 7/31/2015
Graphic Arts Industry Joint Pension Trust
521074215/001
 
Red
 
Implemented
 
0.1

 
0.1

 
0.1

 
Yes
 
6/16/2016
New England Teamsters & Trucking Industry Pension
046372430/001
 
Red
 
Implemented
 
0.5

 
0.5

 
0.5

 
Yes
 
9/30/2017 & 11/30/2017
Western Pennsylvania Teamsters and Employers Pension Plan
256029946/001
 
Red
 
Implemented
 
0.2

 
0.2

 
0.2

 
Yes
 
3/31/2016 & 3/31/2017
Contributions for individually significant plans
 
 
 
 
 
 
2.9

 
2.5

 
2.6

 
 
 
 
Contributions to other multi-employer plans
 
 
 
 
 
 
0.3

 
—

 
—

 
 
 
 
Total contributions
 
 
 
 
 
 
$
3.2

 
$
2.5

 
$
2.6

 
 
 
 
(1) There are 17 collective bargaining units participating in the Western Conference of Teamsters Pension Trust. As of December 31, 2014, five of these were under negotiations.
Fair Value Measurements
Fair Value Measurements
10. FAIR VALUE MEASUREMENTS

At December 31, 2014 and 2013, the carrying amounts of cash, receivables, payables and other components of other current assets and other current liabilities approximate their fair value due to the short maturity of these items. Borrowings under the ABL Facility are at variable interest rates and accordingly its carrying amount approximates fair value. There have been no transfers between the fair value measurement levels for the years ended December 31, 2014 and 2013. The Company recognizes transfers between the fair value measurement levels at the end of the reporting period.

At December 31, 2014, the pension plan assets were primarily comprised of mutual funds and pooled funds. The underlying investments of these funds were valued using either quoted prices in active markets or valued as of the most recent trade date. See Note 9, Employee Benefits Plans, for further detail.

At the time of the Merger, the Company recorded a $58.8 million contingent liability associated with the Tax Receivable Agreement at fair value using a discounted cash flow model that reflected management's expectations about probability of payment. Key assumptions utilized in the discounted cash flow model included a discount rate of 4.8%, projected revenues and taxable income. The Company’s discounted cash flow model used significant unobservable (Level 3) inputs that were tied to the utilization of Unisource’s net operating losses, attributable to taxable periods prior to the Merger, by the Company. The contingent liability is remeasured at fair value at each reporting period with the change in fair value recognized in other expense (income), net in the Company’s Consolidated and Combined Statements of Operations. At December 31, 2014, the Company remeasured the contingent liability using a discount rate of 4.7% and recorded $1.7 million of other expense related to the change in fair value. See Note 8, Related Party Transactions, for further discussion of the Tax Receivable Agreement.

The following table provides a reconciliation of the beginning and ending balance of the contingent liability for the year ended December 31, 2014:    
(in millions)
 
Contingent Liability
Beginning balance, July 1, 2014
 
$
58.8

Change in fair value adjustment
 
1.7

Balance at December 31, 2014
 
$
60.5

Supplementary Financial Statement Information
Supplementary Financial Statement Information
11. SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION
Other Current Assets

The components of other current assets were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Rebates receivable
$
58.1

 
$
18.4

Prepaid expenses
25.7

 
5.6

Other
25.5

 
2.3

Other current assets
$
109.3

 
$
26.3



Other Non-Current Assets

The components of other non-current assets were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Deferred financing costs
$
19.9

 
$
—

Investments in real estate joint ventures
5.7

 
—

Below market leasehold agreements
6.0

 
—

Other
12.3

 
9.4

Other non-current assets
$
43.9

 
$
9.4



Accrued Payroll and Benefits

The components of accrued payroll and benefits were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Accrued payroll and related taxes
$
32.4

 
$
11.2

Accrued commissions
37.0

 
25.9

Other
41.7

 
17.8

Accrued payroll and benefits
$
111.1

 
$
54.9



Other Accrued Liabilities

The components of other accrued liabilities were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Accrued taxes
$
15.3

 
$
6.4

Accrued customer incentives
24.1

 
12.8

Accrued freight
10.1

 
2.4

Accrued professional fees
15.1

 
—

Other
35.9

 
14.9

Other accrued liabilities
$
100.5

 
$
36.5



Other Non-Current Liabilities

The components of other non-current liabilities were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Contingent liability associated with Tax Receivable Agreement
$
60.5

 
$
—

Deferred compensation
18.2

 
—

Straight-line rent
9.4

 
9.2

Above market leasehold agreements
7.0

 
—

Other
12.1

 
3.3

Other non-current liabilities
$
107.2

 
$
12.5

Earnings Per Share
Earnings Per Share
12. EARNINGS PER SHARE

Basic earnings (loss) per share for Veritiv common stock is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is similarly calculated, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued, except where the inclusion of such common shares would have an anti-dilutive impact.

On the Distribution Date, Veritiv had 16,000,000 shares of common stock issued and outstanding, including 7,840,000 shares issued in a private placement to the UWWH Stockholder. The calculation of both basic and diluted earnings (loss) per share for the years ended December 31, 2013 and 2012 utilized 8,160,000 shares as no equity-based awards were outstanding prior to the Distribution Date, and Veritiv was a wholly-owned subsidiary of International Paper prior to that date. The calculation of both basic and diluted earnings (loss) per share for the year ended December 31, 2014 utilized 12,080,000 shares based on the weighted-average shares outstanding during this period, reflecting the impact of the private placement of shares to the UWWH Stockholder on the Distribution Date. Also, as the Company has not issued or granted any dilutive securities since the Distribution Date, there was no dilutive impact to shares outstanding for the year ended December 31, 2014.

Basic and diluted earnings (loss) per share were as follows:
 
Year Ended December 31,
(in millions, except share and per share data)
2014
 
2013
 
2012
Income (loss) from continuing operations
$
(19.5
)
 
$
(0.0
)
 
$
14.4

Income (loss) from discontinued operations, net of income taxes
(0.1
)
 
0.2

 
(10.0
)
Net income (loss)
$
(19.6
)
 
$
0.2

 
$
4.4

 
 
 
 
 
 
Weighted-average number of shares outstanding – basic and diluted
12,080,000

 
8,160,000

 
8,160,000

Earnings (loss) per share:
 
 
 
 
 
Basic and diluted
 
 
 
 
 
Continuing operations
$
(1.61
)
 
$
(0.00
)
 
$
1.76

Discontinued operations
(0.01
)
 
0.02

 
(1.23
)
Basic and diluted earnings (loss) per share
$
(1.62
)
 
$
0.02

 
$
0.53

Shareholders' Equity
Shareholders' Equity
13. SHAREHOLDERS' EQUITY

On the Distribution Date, Veritiv amended and restated its Certificate of Incorporation and its Bylaws. The following summarizes information concerning Veritiv's capital stock.

Authorized Capital Stock

As a result of the Spin-off, the Company’s authorized capital stock consists of 100,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share.

Common Stock

Shares Outstanding: On the Distribution Date, 8,160,000 shares of Veritiv common stock were distributed on a pro rata basis to the International Paper shareholders of record as of the close of business on June 20, 2014. Furthermore, the UWWH Stockholder, the sole shareholder of UWWH, received 7,840,000 shares of Veritiv common stock for all outstanding shares of UWWH common stock that it held on the Distribution Date. Following these distributions, Veritiv had 16,000,000 shares of common stock issued and outstanding.

Dividends: Each holder of common stock shall be entitled to participate equally in all dividends payable with respect to the common stock.

Voting Rights: The holders of the Company’s common stock are entitled to vote only in the circumstances set forth in Veritiv's Amended and Restated Certificate of Incorporation. Each holder of common stock shall be entitled to one vote for each share of common stock held of record by such holder upon all matters to be voted on by the holders of the common stock.

Other Rights: Each holder of common stock shall be entitled to share equally, subject to any rights and preferences of the preferred stock (as fixed by resolutions, if any, of the Board of Directors), in the assets of the Company available for distribution, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of Veritiv, or upon any distribution of the assets of the Company.

Preferred Stock

Subject to the provisions of the Amended and Restated Certificate of Incorporation, the Board of Directors of Veritiv is authorized to provide for the issuance of up to 10,000,000 shares of preferred stock in one or more series. The Board of Directors may fix the number of shares constituting any series and determine the designation of the series, the dividend rates, rights of priority of dividend payment, the voting powers (if any) of the shares of the series, and the preferences and relative, participating, optional and other rights, if any, and any qualifications, limitations or restrictions, applicable to the shares of such series. No preferred stock was issued and outstanding as of December 31, 2014.

Comprehensive Income (Loss)

Comprehensive income (loss) is reported in the Consolidated and Combined Statements of Comprehensive Income (Loss) and consists of net income (loss) and other gains and losses affecting shareholders' equity that, under GAAP, are excluded from net income (loss). AOCI consisted of the following:
(in millions)
December 31, 2014
 
December 31, 2013
Foreign currency translation adjustments
$
(14.7
)
 
$
(4.7
)
Adjustments to pension and other benefit liabilities, net of tax
(7.4
)
 
—

Accumulated other comprehensive loss
$
(22.1
)
 
$
(4.7
)


For the years ended December 31, 2014, 2013 and 2012, there were no reclassifications out of AOCI.
Equity-Based Incentive Plans
Equity-Based Incentive Plans
14. EQUITY-BASED INCENTIVE PLANS

Veritiv Incentive Plans

2014 Omnibus Incentive Plan – In conjunction with the Spin-off and the Merger, Veritiv adopted the Veritiv Corporation 2014 Omnibus Incentive Plan (the "Omnibus Incentive Plan").  A total of 2,080,000 shares of Veritiv common stock may be issued under the Omnibus Incentive Plan, subject to certain adjustment provisions. Veritiv may grant options, stock appreciation rights, stock purchase rights, restricted shares, restricted stock units, dividend equivalents, deferred share units, performance shares, performance units and other equity-based awards under the Omnibus Incentive Plan. Awards may be granted under the Omnibus Incentive Plan to any employee, director, consultant or other service provider of Veritiv or a subsidiary of Veritiv.

On December 31, 2014, the Company granted 16,064 Deferred Share Units ("DSUs") to its non-employee directors. Each DSU is the economical equivalent of one share of Veritiv's common stock. The DSUs are fully vested and non-forfeitable as of the grant date and are payable in cash following the individual's termination of service as a Veritiv director. At December 31, 2014, the Company recognized $0.8 million in expense related to these units based on the closing market price of the Company's common stock. The DSUs were classified as a non-current liability and will be remeasured at each reporting date, with a corresponding adjustment to compensation expense.

Subsequently, on January 1, 2015, the Company granted 63,217 restricted stock units ("RSUs") and 252,930 performance stock units ("PSUs") to certain of its employees based on the closing stock price of the Company's common stock on December 31, 2014. The RSUs will vest at the end of three years based on continued service. The PSUs will vest at the end of three years based on the Company’s financial results on earnings before interest, taxes, depreciation and amortization ("EBITDA") and total shareholder return, subject to continuing service. As of December 31, 2014, no expense was recognized for these awards.

International Paper Incentive Plans

At the time of the Spin-off, all equity awards held by employees of xpedx were granted under International Paper’s 2009 Incentive Compensation Plan or predecessor plans. In conjunction with the Spin-off and Merger, International Paper retained all rights and obligations of these incentive plans. xpedx's stock-based compensation expense and related income tax benefits associated with these International Paper plans were as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Total stock-based compensation expense
$
4.3

 
$
15.4

 
$
13.1

Income tax benefit related to stock-based compensation
$
1.3

 
$
8.5

 
$
6.2

Commitments and Contingencies Disclosure
Commitments and Contingencies
15. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company is involved in various lawsuits, claims, and regulatory and administrative proceedings arising out of its business relating to general commercial and contractual matters, governmental regulations, intellectual property rights, labor and employment matters, tax and other actions.

Although the ultimate outcome of any legal proceeding or investigation cannot be predicted with certainty, based on present information, including the Company's assessment of the merits of the particular claim, the Company does not expect that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on its cash flow, results of operations or financial condition.

Escheat Audit

During 2013, Unisource was notified by the State of Delaware that they intended to examine the books and records of Unisource to determine compliance with Delaware escheat laws. Since that date, seven other states have joined with Delaware in the audit process which is conducted by an outside firm on behalf of the states and covers the period from 1981 to present. The Company has been informed that similar audits have generally taken two to four years to complete. Due to the preliminary stage of this audit, the Company has determined that the ultimate outcome cannot be estimated at this time. Any claims or liabilities resulting from these audits could have a material impact on the Company’s financial condition, results of operations and cash flows.
Discontinued Operations
Discontinued Operations
16. DISCONTINUED OPERATIONS

During 2011, xpedx ceased its Canadian operations, which had provided distribution of printing supplies to Canadian-based customers. Additionally, xpedx ceased its printing press distribution business, which was located in the U.S. Both of these businesses were historically included in xpedx’s Print segment. The operations and cash flows of these components have been eliminated from the ongoing operations of xpedx, and going forward Veritiv will not have any significant continuing involvement in the operations of these components, as any assets and related obligations were retained by International Paper as part of the Spin-off. Prior to the Spin-off, these components were included in discontinued operations for all periods presented.

Results of discontinued operations were as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Loss from operations
$
(0.1
)
 
$
(0.5
)
 
$
(0.4
)
Restructuring and disposal income (loss)
—

 
0.7

 
(10.1
)
(Loss) income from discontinued operations, net of income tax benefit of $0.0, $0.0 and $0.5, respectively
(0.1
)
 
0.2

 
(10.0
)
Segment Information
Segment and Geographic Information
17. SEGMENT AND GEOGRAPHIC INFORMATION

Effective July 1, 2014, in connection with the Spin-off and Merger, the Company reorganized its reportable segments as a result of a change in the way the Chief Executive Officer, who serves as the Chief Operating Decision Maker ("CODM"), manages and evaluates the business. Previously, the Company had three reportable segments: Print, Packaging and Facility Solutions. During the third quarter of 2014, the Company realigned and expanded the Print segment into two separate reportable segments, Print and Publishing, and, therefore, expanded the number of reportable segments to four. In addition, as a result of the change in how the CODM manages and evaluates the business, certain costs such as executive costs, corporate affairs, finance, human resources, IT and legal that were previously allocated to the reportable segments are no longer allocated. The Company’s consolidated financial results now include a "Corporate & Other" category which includes certain assets and costs not primarily attributable to any of the reportable segments. Corporate & Other also includes the Veritiv Logistics Solutions business which provides transportation and warehousing solutions. As a result of these changes in segment reporting, all historical segment information has been revised to conform to the new presentation, with no resulting impact on the consolidated and combined results of operations.

The following is a brief description of the four reportable segments, organized by major product category:

•
Print – The Print segment sells and distributes commercial printing, writing, copying, digital, wide format and specialty paper products, graphics consumables and graphics equipment primarily in the U.S., Canada and Mexico. This segment also includes customized paper conversion services of commercial printing paper for distribution to document centers and form printers.

•
Publishing – The Publishing segment sells and distributes coated and uncoated commercial printing papers to publishers, retailers, converters, printers and specialty businesses for use in magazines, catalogs, books, directories, gaming, couponing, retail inserts and direct mail. This segment also provides print management, procurement and supply chain management solutions to simplify paper and print procurement processes for its customers.

•
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 processing and manufacturing, fulfillment and internet retail, as well as niche verticals based on geographical and functional expertise.

•
Facility Solutions – The Facility Solutions segment sources and sells cleaning, break-room and other supplies such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities primarily in the U.S., Canada and Mexico.

In conjunction with the change in reportable segments, management re-evaluated its use of key performance metrics. Historically, xpedx presented operating profit, excluding certain charges, as its measure of operating performance for presentation of segment results. Based on the recent evaluation, Veritiv management has concluded that Adjusted EBITDA is the metric management uses to assess operating performance. Therefore, the current and prior period segment presentations reflect Adjusted EBITDA as the operating performance measure.
    
The following tables present net sales, Adjusted EBITDA and certain other measures for each of the reportable segments and total continuing operations for the periods presented:
(in millions)
Print
 
Publishing
 
Packaging
 
Facility Solutions
 
Corporate & Other
 
Total
Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,956.1

 
$
1,075.5

 
$
2,259.4

 
$
1,070.3

 
$
45.2

 
$
7,406.5

Adjusted EBITDA
$
55.4

 
$
27.1

 
$
157.0

 
$
33.6

 
$
(151.1
)
 
$
122.0

Depreciation and amortization
$
9.7

 
$
1.4

 
$
9.7

 
$
4.6

 
$
12.2

 
$
37.6

Restructuring charges
$
1.5

 
$
—

 
$
1.4

 
$
0.6

 
$
0.5

 
$
4.0

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,399.6

 
$
807.9

 
$
1,600.3

 
$
844.6

 
$
—

 
$
5,652.4

Adjusted EBITDA
$
43.9

 
$
16.4

 
$
117.9

 
$
14.4

 
$
(118.4
)
 
$
74.2

Depreciation and amortization
$
4.4

 
$
0.6

 
$
2.6

 
$
1.5

 
$
8.0

 
$
17.1

Restructuring charges
$
15.7

 
$
1.1

 
$
11.7

 
$
7.4

 
$
2.0

 
$
37.9

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,651.2

 
$
822.7

 
$
1,593.9

 
$
944.2

 
$
—

 
$
6,012.0

Adjusted EBITDA
$
53.0

 
$
13.8

 
$
123.6

 
$
19.2

 
$
(120.1
)
 
$
89.5

Depreciation and amortization
$
6.1

 
$
0.6

 
$
2.8

 
$
1.8

 
$
2.7

 
$
14.0

Restructuring charges
$
20.4

 
$
0.3

 
$
7.1

 
$
5.0

 
$
2.3

 
$
35.1



The table below presents a reconciliation of income (loss) from continuing operations before income taxes reflected in the Consolidated and Combined Statements of Operations to Total Adjusted EBITDA:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Income (loss) from continuing operations before income taxes
$
(21.6
)
 
$
0.4

 
$
23.5

Interest expense, net
14.0

 
—

 
—

Depreciation and amortization
37.6

 
17.1

 
14.0

Restructuring charges
4.0

 
37.9

 
35.1

Non-restructuring stock-based compensation
4.0

 
13.1

 
13.1

LIFO expense
6.3

 
3.4

 
1.0

Non-restructuring severance charges
2.6

 
2.3

 
0.6

Merger and integration expenses
75.1

 
—

 
—

Fair value adjustment on TRA contingent liability
1.7

 
—

 
—

Other
(1.7
)
 
—

 
2.2

Total Adjusted EBITDA
$
122.0

 
$
74.2

 
$
89.5



The table below summarizes total assets as of December 31, 2014 and December 31, 2013:
(in millions)
December 31, 2014
 
December 31, 2013
Print
$
949.1

 
$
517.4

Publishing
207.6

 
79.8

Packaging
797.6

 
398.7

Facility Solutions
381.3

 
201.7

Corporate & Other
238.9

 
59.3

Total assets
$
2,574.5

 
$
1,256.9



Prior to the Merger, the Company's operations and identifiable assets were primarily located in the U.S. After the Merger, the Company's operations and identifiable assets are primarily located in the U.S. and Canada. The following table presents net sales and property and equipment, net by geographic area.
 
Net Sales(1)
 
Property and Equipment, Net
 
Year Ended December 31,
 
December 31, 2014
 
December 31, 2013
(in millions)
2014
 
2013
 
2012
 
 
U.S.
$
6,848.9

 
$
5,508.5

 
$
5,830.9

 
$
355.0

 
$
106.1

Canada
408.2

 
25.2

 
32.6

 
18.7

 
—

Rest of world
149.4

 
118.7

 
148.5

 
3.7

 
1.0

Total
$
7,406.5

 
$
5,652.4

 
$
6,012.0

 
$
377.4

 
$
107.1

(1) Net sales are attributed based on the location of the purchaser/destination.
    
No single customer accounted for more than 5% of net sales for the years ended December 31, 2014, 2013 and 2012.
Quarterly Data (Unaudited)
Quarterly Data (Unaudited)
18. QUARTERLY DATA (UNAUDITED)

The unaudited quarterly results of operations for 2014 and 2013 are summarized below:
 
2014
(in millions, except share and per share data)
Three Months Ended
 
March 31
 
June 30
 
September 30(2)
 
December 31(3)
Net sales
$
1,307.4

 
$
1,329.0

 
$
2,390.3

 
$
2,379.8

Cost of products sold
1,088.5

 
1,116.7

 
1,987.1

 
1,988.6

Income (loss) from continuing operations
5.6

 
2.9

 
(14.0
)
 
(14.0
)
Loss from discontinued operations, net of income taxes
(0.1
)
 
—

 
—

 
—

Net income (loss)
5.5

 
2.9

 
(14.0
)
 
(14.0
)
 
 
 
 
 
 
 
 
Weighted-average number of shares outstanding – basic and diluted
8,160,000
 
8,160,000
 
16,000,000
 
16,000,000
Earnings (loss) per share (1):
 
 
 
 
 
 
 
Basic and diluted
 
 
 
 
 
 
 
Continuing operations
$
0.69

 
$
0.36

 
$
(0.88
)
 
$
(0.88
)
Discontinued operations
(0.01
)
 
—

 
—

 
—

Basic and diluted earnings (loss) per share
$
0.68

 
$
0.36

 
$
(0.88
)
 
$
(0.88
)
 
 
 
 
 
 
 
 
 
2013
 
Three Months Ended
 
March 31(4)
 
June 30(5)
 
September 30(6)
 
December 31(7)
Net sales
$
1,388.4

 
$
1,402.9

 
$
1,442.8

 
$
1,418.3

Cost of products sold
1,159.3

 
1,172.1

 
1,214.1

 
1,191.3

Income (loss) from continuing operations
(0.9
)
 
(2.3
)
 
5.2

 
(2.0
)
Income (loss) from discontinued operations, net of income taxes
0.2

 
(0.1
)
 
(0.1
)
 
0.2

Net income (loss)
(0.7
)
 
(2.4
)
 
5.1

 
(1.8
)
 
 
 
 
 
 
 
 
Weighted-average number of shares outstanding – basic and diluted
8,160,000
 
8,160,000
 
8,160,000
 
8,160,000
Earnings (loss) per share (1):
 
 
 
 
 
 
 
Basic and diluted
 
 
 
 
 
 
 
Continuing operations
$
(0.11
)
 
$
(0.28
)
 
$
0.64

 
$
(0.25
)
Discontinued operations
0.02

 
(0.01
)
 
(0.01
)
 
0.02

Basic and diluted earnings (loss) per share
$
(0.09
)
 
$
(0.29
)
 
$
0.63

 
$
(0.23
)

(1) See Note 12 of the Notes to the Consolidated and Combined Financial Statements for discussion on the shares of common stock utilized in the computation of basic and diluted earnings per share.
(2) Includes $54.8 million of merger and integration expenses related to the Merger of Unisource and to integrate the combined businesses of xpedx and Unisource.
(3) Includes $18.2 million of merger and integration expenses and $5.1 million of restructuring charges related to Veritiv's restructuring program of its North American operations.
(4) Includes $7.1 million of restructuring charges related to xpedx's restructuring plan.
(5) Includes $17.3 million of restructuring charges related to xpedx's restructuring plan.
(6) Includes $6.0 million of restructuring charges related to xpedx's restructuring plan.
(7) Includes $7.5 million of restructuring charges related to xpedx's restructuring plan.
Business and Summary of Significant Accounting Policies (Policies)
Consolidation 
Prior to the Distribution Date, Veritiv’s financial position, results of operations and cash flows consisted of only the xpedx business of International Paper and have been derived from International Paper’s historical accounting records. The financial results of xpedx have been presented on a carve-out basis through the Distribution Date, while the financial results for Veritiv, post Spin-off, are prepared on a stand-alone basis. As such, the audited Consolidated and Combined Statements of Operations, Consolidated and Combined Statements of Comprehensive Income (Loss) and Consolidated and Combined Statements of Cash Flows for the year ended December 31, 2014 consist of:

•
the combined results of operations of xpedx for the six months ended June 30, 2014 on a carve-out basis, and
•
the consolidated results of Veritiv on a stand-alone basis for the six months ended December 31, 2014.

The combined financial statements as of December 31, 2013 and for the years ended December 31, 2013 and 2012 consist entirely of the combined results of xpedx on a carve-out basis.

As of December 31, 2014, all intercompany transactions have been eliminated. Prior to the Distribution Date, all significant intercompany transactions between xpedx and International Paper have been included for the periods prior to the Spin-off and were considered to be effectively settled for cash at the time the transaction was recorded. The total net effect of the settlement of these intercompany transactions is reflected in the Consolidated and Combined Statements of Cash Flows as a financing activity and in the Consolidated and Combined Balance Sheets as Parent company investment.

For periods prior to the Spin-off, the combined financial statements include expense allocations for certain functions previously provided by International Paper, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, insurance and stock-based compensation. These expenses have been allocated on the basis of direct usage when identifiable, with the remainder principally allocated on the basis of percent of capital employed, headcount, sales or other measures. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to or for the benefit received by xpedx during those periods. The allocations may not, however, reflect the expenses xpedx would have incurred as an independent company for the periods presented. Actual costs that may have been incurred if xpedx had been a stand-alone company would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Veritiv is unable to determine what such costs would have been had xpedx been independent.
Use of Estimates 
The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and certain financial statement disclosures. Estimates and assumptions are used for, but not limited to, revenue recognition, accounts receivable valuation, inventory valuation, employee benefit plans, income tax contingency accruals and valuation allowances and goodwill and other intangible asset valuations. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, actual results may ultimately differ from these estimates and assumptions. Estimates are revised as additional information becomes available.

Revenue Recognition 
Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed or determinable, collectability is reasonably assured and delivery has occurred. Revenue is recognized when the customer takes title and assumes the risks and rewards of ownership. Revenue is recorded at the time of shipment for customer terms designated f.o.b. (free on board) shipping point. For sales transactions with customers designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site, when title and risk of loss are transferred. Shipping terms are determined on a customer-by-customer or order-by-order basis. When management cannot conclude collectability is reasonably assured for shipments to a particular customer, revenue associated with that customer is not recognized until cash is collected or management is otherwise able to establish that collectability is reasonably assured.

Certain revenues are derived from shipments arranged by the Company made directly from a manufacturer to a customer. The Company is considered to be a principal to these transactions because, among other factors, it controls pricing to the customer, bears the credit risk of the customer defaulting on payment and is the primary obligor.
Purchase Incentives and Customer Rebates 
Veritiv enters into agreements with suppliers that entitle Veritiv to receive rebates, allowances and other discounts based on the attainment of specified purchasing levels or sales to certain customers. Purchase incentives are recorded as a reduction to inventory and recognized in cost of products sold as the product is sold.

Veritiv also enters into incentive agreements with its customers, which are generally based on sales to these customers. Veritiv records estimated rebates to customers as a reduction to gross sales as customer revenue is recognized.
Distribution Expenses 
Distribution expenses consist of storage, handling and delivery costs including freight to the Company's customers’ destination.
Merger and Integration Expenses 
Merger and integration expenses are expensed as incurred. Merger expenses include advisory, legal and other professional fees directly associated with the Merger. Integration expenses include professional services and project management fees, retention compensation, termination benefits (including change-in-control bonuses), rebranding and other non-recurring or redundant costs to integrate the combined businesses of xpedx and Unisource.
Accounts Receivable 
Accounts receivables are recognized net of allowances that primarily consist of allowance for doubtful accounts of $31.7 million and $22.5 million as of December 31, 2014 and 2013, respectively, with the remaining balance of $7.3 million and $0.2 million being comprised of other allowances as of December 31, 2014 and 2013, respectively. The allowance for doubtful accounts reflects the best estimate of losses inherent in the Company’s accounts receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other available evidence. The other allowances balance is inclusive of credit risks, returns, discounts and any other items affecting the realization of these assets. Accounts receivable are written off when management determines they are uncollectible.
Inventory 
The Company's inventories are primarily comprised of finished goods and primarily valued at cost as determined by the last-in first-out ("LIFO") method. Such valuations are not in excess of market. Elements of cost in inventories include the purchase price invoiced by a supplier, plus inbound freight and related costs and reduced by estimated volume-based discounts and early pay discounts available from certain suppliers.
Property, Plant and Equipment 
Property and equipment are stated at cost, less accumulated depreciation. Expenditures for replacements and major improvements are capitalized, whereas repair and maintenance costs that do not improve service potential or extend economic life are expensed as incurred. The Company capitalizes certain computer software and development costs incurred in connection with developing or obtaining software for internal use. Costs related to the development of internally developed software, other than those incurred during the application development stage, are expensed as incurred.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Land is not depreciated, and construction-in-progress ("CIP") is not depreciated until ready for service. Leased property and improvements to leased property are amortized on a straight-line basis over the lease term or useful life of the asset, whichever is less.

Depreciation and amortization for property and equipment, other than land and CIP, is based upon the following estimated useful lives:
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 with related party
3 to 15 years
Internally developed software
3 to 5 years


Depreciation and amortization expenses, including the depreciation expense for assets under capital leases and amortization expense of internally developed software, totaled $32.9 million, $15.9 million and $12.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. Accumulated depreciation on equipment capital leases and assets related to financing obligations with related party as of December 31, 2014 was $15.6 million. Veritiv did not have any capital leases as of December 31, 2013. Amortization expense of the internally developed software was $11.0 million, $8.3 million and $3.0 million during the years ended December 31, 2014, 2013 and 2012, respectively. During 2014, there were no depreciation amounts included in restructuring. During 2013 and 2012, $0.3 million and $1.2 million of depreciation was included in restructuring.

As of December 31, 2014 and 2013, unamortized internally developed software costs, including amounts recorded in CIP, were $44.6 million and $17.1 million, respectively.

Upon retirement or other disposal of property and equipment, the cost and related amount of accumulated depreciation are eliminated from the asset and accumulated depreciation accounts, respectively. The difference, if any, between the net asset value and the proceeds is included in net income.

Leases 
The Company leases certain property and equipment used for operations. Such lease arrangements are reviewed for capital or operating classification at their inception.

Capital lease obligations consist of delivery equipment, material handling equipment, computer hardware and office equipment which are leased through third parties under non-cancelable leases with terms generally ranging from three to eight years. Many of the delivery equipment leases include annual rate increases based on the Consumer Price Index which are included in the calculation of the initial lease obligation. The carrying value of the related equipment associated with these capital leases is included within property and equipment, net in the Consolidated and Combined Balance Sheets at December 31, 2014, and depreciated over the term of the lease. The Company does not record rent expense for capital leases. Rather, rental payments under the lease are recognized as a reduction of the capital lease obligation and interest expense. Depreciation expense for assets under capital leases is included in the total depreciation expense disclosed in the Consolidated and Combined Statements of Operations.
  
All other leases are operating leases. Certain lease agreements include renewal options and rent escalation clauses. Assets subject to an operating lease and the related lease payments are not recorded on the Company’s balance sheet. Rent expense is recognized on a straight-line basis over the expected lease term.

The term for all types of leases begins on the date the Company becomes legally obligated for the rent payments or takes possession of the asset, whichever is earlier.

Goodwill and Intangible Assets 
Goodwill relating to a single business reporting unit is included as an asset of the applicable segment. Goodwill arising from major acquisitions that involve multiple reportable segments is allocated to the reporting units based on the relative fair value of the reporting unit.

Goodwill is reviewed by Veritiv for impairment on a reporting unit basis annually on October 1st or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. The testing of goodwill for possible impairment is a two-step process. In the first step, the fair value of a reporting unit is compared with its carrying value, including goodwill. If fair value exceeds the carrying value, goodwill is not considered to be impaired. If the fair value of a reporting unit is below the carrying value, then step two is performed to measure the amount of the goodwill impairment loss for the reporting unit. This analysis requires the determination of the fair value of all of the individual assets and liabilities of the reporting unit, including any currently unrecognized intangible assets, as if the reporting unit had been purchased on the analysis date. Once these fair values have been determined, the implied fair value of the unit’s goodwill is calculated as the excess, if any, of the fair value of the reporting unit determined in step one over the fair value of the net assets determined in step two. The carrying value of goodwill is then reduced to this implied value, or to zero if the fair value of the assets exceeds the fair value of the reporting unit, through a goodwill impairment charge. The impairment test performed during the fourth quarter of 2014 and 2013 indicated the fair value of the reporting units containing goodwill was in excess of the related carrying value of the net assets.

Intangible assets acquired in a business combination are recorded at fair value. The Company's intangible assets include customer relationships, trademarks and trade names and non-compete agreements. Intangible assets with finite useful lives are subsequently amortized using the straight-line method over the estimated useful lives of the assets.
Impairment or Disposal of Long-Lived Assets 
Long-lived assets, including finite-lived intangible assets, are amortized and tested for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. The Company assesses the recoverability of long-lived assets based on the undiscounted future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When an impairment is identified, the Company reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values.

Pension and Other Postretirement Plans 
The Company sponsors and/or contributes to defined contribution plans, defined benefit pension plans and multi-employer pension plans in the United States. In addition, the Company and its subsidiaries have various pension plans and other forms of retirement arrangements outside the United States. See Note 9, Employee Benefit Plans, for additional information.
      
Prior to the Spin-off, certain of xpedx’s employees participated in defined benefit pension and other postretirement benefit plans sponsored and accounted for by International Paper. In conjunction with the Spin-off, the above plans were frozen for the xpedx employees, and International Paper retained the associated liabilities. Certain xpedx union employees were added as participants to the Unisource defined benefit pension plan. In conjunction with the Merger, Veritiv assumed responsibility for Unisource’s defined benefit plans and Supplemental Executive Retirement Plan ("SERP") in the U.S. and Canada. Except as discussed below, these plans were frozen prior to the Merger.  Union employees continue to accrue benefits under the U.S. defined benefit pension plan in accordance with their collective bargaining agreements.

The determination of defined benefit pension and postretirement plan obligations and their associated costs requires the use of actuarial computations to estimate participant plan benefits to which the employees will be entitled. The Company’s significant assumptions in this regard include discount rates, rate of future compensation increases, expected long-term rates of return on plan assets, mortality rates, and other factors. Each assumption is developed using relevant company experience in conjunction with market-related data in the U.S. and Canada. All actuarial assumptions are reviewed annually with third-party consultants and adjusted, as necessary.

For the recognition of net periodic postretirement cost, the calculation of the expected long-term rate of return on plan assets is derived using the fair value of plan assets at the measurement date. Actual results that differ from the Company's assumptions are accumulated and amortized on a straight-line basis only to the extent they exceed 10% of the higher of the fair value of plan assets or the projected benefit obligation, over the estimated remaining service period of active participants. The fair value of plan assets is determined based on market prices or estimated fair value at the measurement date.

The Company also makes contributions to multi-employer pension plans for its union employees covered by such plans. For these plans, the Company recognizes a liability only for any required contributions to the plans or surcharges imposed by the plans that are accrued and unpaid at the balance sheet date. The Company does not record an asset or liability to recognize the funded status of the plans.
Share-based Compensation 
The Company measures and records compensation expense for all stock-based awards based on the grant date fair values over the vesting period of the awards.
Income Tax 
Veritiv records its global tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Where Veritiv believes that a tax position is supportable for income tax purposes, the item is included in the appropriate income tax returns. Where treatment of a position is uncertain, liabilities are recorded based upon an evaluation of the more likely than not outcome considering technical merits of the position based on specific tax regulations and facts of each matter. Changes to recorded liabilities are made only when an identifiable event occurs that alters the likely outcome, such as settlement with the relevant tax authority, the expiration of statutes of limitation for the subject tax year, change in tax laws, or a recent court case that addresses the matter.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income, as well as successful implementation of various tax planning strategies.

While Veritiv believes that these judgments and estimates are appropriate and reasonable under the circumstances, actual resolution of these matters may differ from recorded estimated amounts.

Fair Value Measurement 
Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable.
    
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.
Foreign Currency Transactions and Translations 
The assets and liabilities of the foreign subsidiaries are translated from their respective local currencies to the U.S. dollars at the appropriate spot rates as of the balance sheet date. Changes in the carrying value of these assets and liabilities attributable to fluctuations in spot rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income (loss) ("AOCI"). See Note 13, Shareholders' Equity, for further detail.

The revenues and expenses of the foreign subsidiaries are translated using the monthly average exchange rates during the year. The gains or losses from foreign currency transactions are included in other expense (income), net in the Consolidated and Combined Statements of Operations.

New Accounting Pronouncements 
Standard
 
Description
 
Date of Adoption
 
Effect on the Financial Statements or Other Significant Matters
Standards that are not yet adopted:
 
 
 
 
 
 
 
 
 
 
 
 
 
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)
 
The standard will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date.
 
January 1, 2017
 
The Company is currently evaluating the alternative methods of adoption and the effect on its Consolidated and Combined Financial Statements and related disclosures.


Business and Summary of Significant Accounting Policies (Tables)
Allowances for Accounts Receivable 
Below is a rollforward of the Company's accounts receivable allowances for the years ended December 31, 2014, 2013 and 2012:            
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Beginning balance, January 1
$
22.7

 
$
25.3

 
$
26.2

Add / (Deduct):
 
 
 
 
 
Provision for bad debt expense
12.8

 
6.4

 
8.7

Net write-offs and other adjustments
(9.8
)
 
(9.0
)
 
(9.6
)
Other(1)
13.3

 
—

 
—

Ending balance, December 31
$
39.0

 
$
22.7

 
$
25.3

(1) Represents accounts receivable allowances recorded in connection with the Merger.
Property and Equipment, Net 
The components of property and equipment, net were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Land, buildings and improvements
$
128.9

 
$
143.8

Machinery and equipment
110.2

 
72.5

Equipment capital leases and assets related to financing obligations with related party
232.0

 
—

Internally developed software
114.4

 
84.5

Construction-in-progress
14.0

 
4.9

Less: Accumulated depreciation and software amortization
(222.1
)
 
(198.6
)
Property and equipment, net
$
377.4

 
$
107.1

Depreciation and amortization for property and equipment, other than land and CIP, is based upon the following estimated useful lives:
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 with related party
3 to 15 years
Internally developed software
3 to 5 years
Schedule of New Accounting Pronouncements 
Recently Issued Accounting Standards
Standard
 
Description
 
Date of Adoption
 
Effect on the Financial Statements or Other Significant Matters
Standards that are not yet adopted:
 
 
 
 
 
 
 
 
 
 
 
 
 
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)
 
The standard will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date.
 
January 1, 2017
 
The Company is currently evaluating the alternative methods of adoption and the effect on its Consolidated and Combined Financial Statements and related disclosures.
Merger with Unisource (Tables)
Components of Merger and Integration Costs 
The following table below summarizes the components of merger and integration expenses:
 
(in millions)
Legal and other professional and consulting fees
$
29.7

Retention compensation and termination benefits
37.9

Other
7.5

Total merger and integration expenses
$
75.1

Schedule of Business Acquisition Purchase Price 
Preliminary estimated purchase price:
(in millions)
Fair value of Veritiv shares transferred
$
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
58.8

Total preliminary estimated purchase price
$
382.6

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed 
Preliminary Allocation:
(in millions)
Cash
$
70.9

Accounts receivable
448.4

Inventories
353.8

Deferred income tax assets
71.1

Property and equipment
299.0

Goodwill
26.0

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
$
382.6

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination 
The purchase price allocated to the identifiable intangible assets acquired is as follows:
 
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
Total identifiable intangible assets acquired
$
31.5

 
 
Business Acquisition, Pro Forma Information 
The following unaudited pro forma financial information presents results as if the Merger and the related financing, further described in Note 5, Debt, occurred on January 1, 2013. The historical consolidated financial information of the Company and Unisource has been adjusted in the pro forma information to give effect to pro forma events that are directly attributable to the transactions and factually supportable. The unaudited pro forma results do not reflect events that have occurred or may occur after the transactions, including the impact of any synergies expected to result from the Merger. Accordingly, the unaudited pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed date, nor is it necessarily an indication of future operating results.
(Unaudited)
Year Ended 
 December 31,
(in millions, except share and per share data)
2014
 
2013
Net sales
$
9,314.1

 
$
9,741.5

Net income(1)
$
22.7

 
$
181.1

Earnings per share – basic and diluted
$
1.42

 
$
11.32

Weighted-average shares outstanding – basic and diluted
16,000,000

 
16,000,000

(1) Unisource's historical results for the year ended December 31, 2013 include the reversal of a $238.7 million valuation allowance against its U.S. federal and a substantial portion of its state net deferred tax assets.

Restructuring Charges (Tables)
Schedule of Restructuring Reserve 
The corresponding liability and activity are detailed in the table below.
(in millions)
Severance and Related Costs
Other Direct Costs
Total
Liability at December 31, 2013
$
—

$
—

$
—

Costs incurred
4.7

0.4

5.1

Payments
(1.0
)
(0.2
)
(1.2
)
Liability at December 31, 2014
$
3.7

$
0.2

$
3.9

Restructuring and Related Costs 
The income and charges were as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Facility costs
$
0.3

 
$
15.2

 
$
13.0

Severance
0.2

 
16.9

 
11.9

Personnel costs
—

 
10.9

 
10.6

Accelerated amortization and depreciation
—

 
0.3

 
1.2

Professional services
—

 
1.0

 
1.1

Gain on sale of fixed assets
(1.6
)
 
(6.4
)
 
(2.7
)
Total
$
(1.1
)
 
$
37.9

 
$
35.1

Schedule of Restructuring Reserve 
The corresponding liability and activity during the periods presented are detailed in the table below. In connection with the Spin-off on July 1, 2014, the remaining liability at June 30, 2014 was transferred to International Paper. See Note 8, Related Party Transactions, for more details.
(in millions)
Total
Liability at December 31, 2012
$
3.8

Costs incurred
44.0

Payments
(39.7
)
Adjustment of prior year's estimate
(0.4
)
Liability at December 31, 2013
7.7

Costs incurred
0.1

Payments
(3.9
)
Adjustment of prior year's estimate
(0.3
)
Liability transferred to Parent in connection with Spin-off
(3.6
)
Liability at December 31, 2014
$
—

Goodwill and Other Intangible Assets (Tables)
Schedule of Goodwill 
The following table sets forth the changes in the carrying amount of goodwill during 2014:
(in millions)
Print
 
Publishing
 
Packaging
 
Facility Solutions
 
Corporate & Other
 
Total
Balance at December 31, 2013
$
—

 
$
—

 
$
26.4

 
$
—

 
$
—

 
$
26.4

Additions to goodwill
—

 
—

 
17.9

 
1.9

 
6.2

 
26.0

Balance at December 31, 2014
$
—

 
$
—

 
$
44.3

 
$
1.9

 
$
6.2

 
$
52.4

Schedule of Finite-Lived Intangible Assets 
The components of the Company's other intangible assets were as follows:
 
December 31, 2014
 
December 31, 2013
(in millions)
Gross Carrying Amount
 
Accumulated Amortization
 
Net
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net
Customer relationships
$
55.0

 
$
23.7

 
$
31.3

 
$
30.7

 
$
21.5

 
$
9.2

Trademarks/Trade names
4.3

 
1.1

 
3.2

 
0.2

 
0.1

 
0.1

Non-compete agreements
3.1

 
1.5

 
1.6

 
—

 
—

 
—

Total
$
62.4

 
$
26.3

 
$
36.1

 
$
30.9

 
$
21.6

 
$
9.3

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense 
The estimated aggregate amortization expense for each of the five succeeding years is as follows (in millions):
Year
 
Total
2015
 
$
5.8

2016
 
3.6

2017
 
3.6

2018
 
3.6

2019
 
3.3

Debt (Tables)
Schedule of Long-term Debt Obligations
the Company's long-term debt obligations were as follows:
(in millions)
December 31, 2014
ABL Facility
$
847.8

Equipment capital lease obligations
11.0

Total debt
858.8

Less: current portion of long-term debt
(3.8
)
Long-term debt, net of current maturities
$
855.0

Leases (Tables)
Schedule of Future Minimum Payments for Operating and Capital Leases
Future minimum lease payments at December 31, 2014 were as follows:
 
 
 
Operating Leases
(in millions)
Financing Obligations to Related Party and Equipment Capital Leases
 
Lease Obligations
 
Sublease Income
 
Total
2015
$
20.7

 
$
77.8

 
$
(0.3
)
 
$
77.5

2016
19.8

 
68.1

 
(0.2
)
 
67.9

2017
19.4

 
58.3

 
(0.1
)
 
58.2

2018
8.9

 
49.4

 
(0.1
)
 
49.3

2019
0.4

 
40.7

 
—

 
40.7

Thereafter
0.3

 
87.2

 
—

 
87.2

 
69.5

 
381.5

 
(0.7
)
 
380.8

Amount representing interest
(6.3
)
 
—

 
—

 
—

Total future minimum lease payments
$
63.2

 
$
381.5

 
$
(0.7
)
 
$
380.8

Income Taxes Income Taxes (Tables)
Schedule of Income before Income Tax, Domestic and Foreign 
The domestic (United States) and foreign components of the Company's income (loss) from continuing operations before income taxes were as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Domestic (United States)
$
(19.0
)
 
$
(2.1
)
 
$
15.8

Foreign
(2.6
)
 
2.5

 
7.7

Income (loss) from continuing operations before income taxes
$
(21.6
)
 
$
0.4

 
$
23.5

Schedule of Provision for Income Tax (Benefit) Expense 
Income tax expense (benefit) in the Consolidated and Combined Statements of Operations consisted of the following:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Current Provision:
 
 
 
 
 
U.S. Federal
$
5.0

 
$
(3.3
)
 
$
4.6

U.S. State
0.9

 
(0.1
)
 
1.0

Foreign
1.7

 
0.5

 
2.1

Total current income tax expense (benefit)
$
7.6

 
$
(2.9
)
 
$
7.7

 
 
 
 
 
 
Deferred, net:
 
 
 
 
 
U.S. Federal
$
(8.3
)
 
$
3.0

 
$
1.0

U.S. State
(1.2
)
 
0.2

 
0.3

Foreign
(0.2
)
 
0.1

 
0.1

Total deferred, net
(9.7
)
 
3.3

 
1.4

Provision for income tax expense (benefit)
$
(2.1
)
 
$
0.4

 
$
9.1

Schedule of Effective Income Tax Rate Reconciliation 
Reconciliation between the federal statutory rate and the effective tax rate is as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Income from continuing operations before income taxes
$
(21.6
)
 
$
0.4

 
$
23.5

Statutory U.S. income tax rate
35.0
%
 
35.0
%
 
35.0
%
Tax expense using statutory U.S. income tax rate
$
(7.6
)
 
$
0.1

 
$
8.2

Foreign income tax rate differential
0.3

 
(0.1
)
 
(0.6
)
State tax (net of federal benefit)
(0.3
)
 
—

 
0.7

Meals and entertainment
0.7

 
0.4

 
0.6

Transaction costs
1.6

 
—

 
—

Change in valuation allowance
2.0

 
—

 
—

Executive compensation
0.9

 
—

 
—

Other
0.3

 
—

 
0.2

Income tax provision
$
(2.1
)
 
$
0.4

 
$
9.1

Effective income tax rate
9.7
%
 
100.0
%
 
38.7
%
Schedule of Deferred Tax Assets and Liabilities 
Deferred income tax assets and liabilities as of December 31, 2014 and 2013 were as follows:
 
December 31, 2014
 
December 31, 2013
(in millions)
U.S.
 
Non-U.S.
 
U.S.
 
Non-U.S.
Deferred income tax assets:
 
 
 
 
 
 
 
Accrued compensation
$
16.8

 
$
—

 
$
7.1

 
$
—

Capital lease obligations to related party
86.8

 
0.8

 
—

 
—

Goodwill and other intangibles, net
5.7

 
—

 
18.2

 
—

Property and equipment, net
—

 
0.3

 
—

 
—

Long-term compensation
15.2

 
6.0

 
8.3

 
—

Net operating losses and credit carryforwards
120.5

 
8.7

 
3.4

 
—

Allowance for doubtful accounts
13.8

 
—

 
8.6

 
—

Other
1.8

 
0.5

 
3.7

 
0.5

Gross deferred income tax assets
260.6

 
16.3

 
49.3

 
0.5

Less valuation allowance
(26.1
)
 
(15.7
)
 
—

 
—

Total deferred tax asset
234.5

 
0.6

 
49.3

 
0.5

Deferred income tax liabilities:
 
 
 
 
 
 
 
Property and equipment, net
(95.1
)
 
—

 
(8.7
)
 
—

Inventory reserve
(50.1
)
 
—

 
(31.9
)
 
—

Prepaid assets
(3.8
)
 
—

 
—

 
—

Other
(1.6
)
 
—

 
—

 
—

Total deferred tax liability
$
(150.6
)
 
$
—

 
$
(40.6
)
 
$
—

Net deferred income tax asset (liability)
$
83.9

 
$
0.6

 
$
8.7

 
$
0.5

Schedule of Unrecognized Tax Benefits Roll Forward 
The following table presents the rollforward of activity for the years ended December 31, 2014, 2013 and 2012 for uncertain tax positions:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Beginning of period
$
(0.6
)
 
$
(1.7
)
 
$
(1.4
)
Additions based on tax positions taken during the current period
—

 
—

 
(0.3
)
Reductions based on tax positions taken during a prior period
0.6

 
—

 
—

Additions based on tax positions taken during a prior period
(1.0
)
 
—

 
—

Lapses of statutes of limitations
—

 
1.1

 
—

Total gross unrecognized tax benefit
$
(1.0
)
 
$
(0.6
)
 
$
(1.7
)
Summary of Valuation Allowance 
Deferred income tax asset valuation allowance is as follows:
 
Year Ended December 31,
(in millions)
2014
Balance at July 1, 2014
$
39.8

Additions
2.0

Subtractions
—

Balance at end of year
$
41.8

Related-Party Transactions (Tables)
Parent Company Investment
Net transfers (to) from International Paper are included within Parent company equity on the Combined Balance Sheet as of December 31, 2013. The components of net transfers (to) from Parent for the years ended December 31, 2014, 2013 and 2012, were as follows:     
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Intercompany sales and purchases, net
$
255.4

 
$
556.6

 
$
575.2

Cash pooling and general financing activities
(322.5
)
 
(675.8
)
 
(695.4
)
Corporate allocations including income taxes
34.7

 
84.1

 
84.8

Net adjustments in conjunction with the Spin-off
(49.6
)
 
—

 
—

Total net transfers to International Paper
$
(82.0
)
 
$
(35.1
)
 
$
(35.4
)
Employee Benefit Plans (Tables)
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan 
The following table provides information about the Unisource U.S. and Canadian defined benefit pension and SERP plans assumed by Veritiv due to the Merger:
(in millions)
U.S.
 
Canada
Accumulated benefit obligation at December 31, 2014
$
93.7

 
$
79.0

 
 
 
 
Change in projected benefit obligation:
 
 
 
Benefit obligation at July 1, 2014
$
87.9

 
$
92.7

Service cost
0.4

 
0.1

Interest cost
1.7

 
1.9

Actuarial loss
5.9

 
4.4

Benefits paid
(2.0
)
 
(2.0
)
Settlements
(0.2
)
 
—

Foreign exchange adjustments
—

 
(7.7
)
Projected benefit obligation at December 31, 2014
$
93.7

 
$
89.4

Change in plan assets:
 
 
 
Plan assets at July 1, 2014
$
81.6

 
$
68.7

Employer contributions
0.8

 
2.0

Investment returns
0.4

 
4.1

Benefits paid
(2.0
)
 
(2.0
)
Administrative expenses paid
(0.4
)
 
—

Settlements
(0.2
)
 
—

Currency translation adjustments
—

 
(6.4
)
Plan assets at December 31, 2014
$
80.2

 
$
66.4

Underfunded status at December 31, 2014
$
(13.5
)
 
$
(23.0
)
Schedule of Amounts Recognized in Balance Sheet 
Balance Sheet Positions
 
December 31, 2014
(in millions)
U.S.
 
Canada
Amounts recognized in the Consolidated and Combined Balance Sheets consist of:
 
 
 
Other current liabilities
$
0.1

 
$
0.1

Defined benefit pension obligations
13.4

 
22.9

Net liability recognized
$
13.5

 
$
23.0

 
December 31, 2014
(in millions)
U.S.
 
Canada
Amounts not yet reflected in net periodic benefit cost and included in AOCI consist of:
 
 
 
Net loss, net of tax
$
5.2

 
$
2.2

Schedule of Net Periodic Benefit Cost Not yet Recognized 
Total net periodic pension cost associated with the defined benefit pension and SERP plans is summarized below:
 
Year Ended December 31, 2014
(in millions)
U.S.
 
Canada
Components of net periodic benefit cost:
 
 
 
Service cost
$
0.8

 
$
0.1

Interest cost
1.7

 
1.9

Expected return on plan assets
(3.1
)
 
(1.9
)
Net periodic benefit cost (credit)
$
(0.6
)
 
$
0.1

Schedule of Allocation of Plan Assets 
The following table presents Veritiv’s plan assets using the fair value hierarchy as of December 31, 2014:
(in millions)
Total
 
Level 1
 
Level 2
 
Level 3
Investments – U.S.:
 
 
 
 
 
 
 
Equity securities
$
53.3

 
$
53.3

 
$
—

 
$
—

Fixed income securities
26.7

 
26.7

 
—

 
—

Cash and short-term securities
0.2

 
0.2

 
—

 
—

Total
$
80.2

 
$
80.2

 
$
—

 
$
—

(in millions)
Total
 
Level 1
 
Level 2
 
Level 3
Investments – Canada:
 
 
 
 
 
 
 
Equity securities
$
42.4

 
$
—

 
$
42.4

 
$
—

Fixed income securities
22.9

 
—

 
22.9

 
—

Cash and short-term securities
1.1

 
1.1

 
—

 
—

Total
$
66.4

 
$
1.1

 
$
65.3

 
$
—

The weighted-average asset allocations of invested assets within Veritiv’s defined benefit pension plans as of December 31, 2014 were as follows:
 
 
 
 
 
Asset Allocation Range
(in millions)
U.S.
 
Canada
 
U.S.
 
Canada
Equity securities
$
53.3

 
$
42.4

 
55 - 75%
 
50 - 70%
Fixed income securities
26.7

 
22.9

 
20 - 40%
 
30 - 50%
Cash and short-term securities
0.2

 
1.1

 
0 - 10%
 
0 - 5%
Total
$
80.2

 
$
66.4

 
 
 
 
Schedule of Assumptions Used 
The following table presents significant weighted-average assumptions used in computing the benefit obligations:
 
Year Ended December 31, 2014
 
U.S.
 
Canada
Discount rate
3.75
%
 
4.00
%
Rate of compensation increases
N/A

 
3.00
%

The following table presents significant weighted-average assumptions used in computing net periodic benefit cost:
 
Year Ended December 31, 2014
 
U.S.
 
Canada
Discount rate
4.05
%
 
4.30
%
Rate of compensation increases
N/A

 
3.00
%
Expected long-term rate of return on assets
8.00
%
 
5.75
%
Schedule of Expected Benefit Payments 
Veritiv expects to contribute $0.1 million and $3.9 million to its U.S. and Canadian defined benefit pension and SERP plans, respectively, during 2015. Future benefit payments under the defined benefit pension and SERP plans are estimated as follows:
(in millions)
U.S.
 
Canada
2015
$
6.6

 
$
2.5

2016
4.7

 
2.7

2017
4.8

 
2.8

2018
4.8

 
2.9

2019
4.9

 
3.0

2020-2024
27.4

 
18.3

Schedule of Multiemployer Plans 
Veritiv’s participation in the multi-employer plans for the year ended December 31, 2014 is outlined in the table below. The "EIN/Pension Plan Number" column provides the Employee Identification Number and the three-digit plan number, if applicable. The Pension Protection Act zone listed below is based on the latest information Veritiv received from the plan and is certified by the plan’s actuary. Plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded and plans in the green zone are at least 80% funded. The "FIP/RP Status Pending/Implemented" column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement(s).
(in millions)
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)
Pension Fund
 
 
 
2014
 
2013
 
2012
 
 
Western Conference of Teamsters Pension Trust Fund (1)
916145047/001
 
Green
 
No
 
$
1.5

 
$
1.2

 
$
1.3

 
No
 
9/30/2013 - 1/31/2017
Central States, Southeast & Southwest Areas Pension Fund
366044243/001
 
Red
 
Implemented
 
0.3

 
0.2

 
0.2

 
Yes
 
2/28/2015 - 11/30/2016
Teamsters Pension Plan of Philadelphia & Vicinity
231511735/001
 
Yellow
 
Implemented
 
0.3

 
0.3

 
0.3

 
Yes
 
3/31/2015 - 7/31/2015
Graphic Arts Industry Joint Pension Trust
521074215/001
 
Red
 
Implemented
 
0.1

 
0.1

 
0.1

 
Yes
 
6/16/2016
New England Teamsters & Trucking Industry Pension
046372430/001
 
Red
 
Implemented
 
0.5

 
0.5

 
0.5

 
Yes
 
9/30/2017 & 11/30/2017
Western Pennsylvania Teamsters and Employers Pension Plan
256029946/001
 
Red
 
Implemented
 
0.2

 
0.2

 
0.2

 
Yes
 
3/31/2016 & 3/31/2017
Contributions for individually significant plans
 
 
 
 
 
 
2.9

 
2.5

 
2.6

 
 
 
 
Contributions to other multi-employer plans
 
 
 
 
 
 
0.3

 
—

 
—

 
 
 
 
Total contributions
 
 
 
 
 
 
$
3.2

 
$
2.5

 
$
2.6

 
 
 
 
(1) There are 17 collective bargaining units participating in the Western Conference of Teamsters Pension Trust. As of December 31, 2014, five of these were under negotiations.
Fair Value Measurements (Tables)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The following table provides a reconciliation of the beginning and ending balance of the contingent liability for the year ended December 31, 2014:    
(in millions)
 
Contingent Liability
Beginning balance, July 1, 2014
 
$
58.8

Change in fair value adjustment
 
1.7

Balance at December 31, 2014
 
$
60.5

Supplementary Financial Statement Information (Tables)
Schedule of Other Current Assets 
The components of other current assets were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Rebates receivable
$
58.1

 
$
18.4

Prepaid expenses
25.7

 
5.6

Other
25.5

 
2.3

Other current assets
$
109.3

 
$
26.3

Other Non-Current Assets 
The components of other non-current assets were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Deferred financing costs
$
19.9

 
$
—

Investments in real estate joint ventures
5.7

 
—

Below market leasehold agreements
6.0

 
—

Other
12.3

 
9.4

Other non-current assets
$
43.9

 
$
9.4

Accrued Payroll and Benefits 
The components of accrued payroll and benefits were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Accrued payroll and related taxes
$
32.4

 
$
11.2

Accrued commissions
37.0

 
25.9

Other
41.7

 
17.8

Accrued payroll and benefits
$
111.1

 
$
54.9

Other Accrued Liabilities 
The components of other accrued liabilities were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Accrued taxes
$
15.3

 
$
6.4

Accrued customer incentives
24.1

 
12.8

Accrued freight
10.1

 
2.4

Accrued professional fees
15.1

 
—

Other
35.9

 
14.9

Other accrued liabilities
$
100.5

 
$
36.5

Other Non-Current Liabilities 
The components of other non-current liabilities were as follows:
(in millions)
December 31,
 
December 31,
2014
 
2013
Contingent liability associated with Tax Receivable Agreement
$
60.5

 
$
—

Deferred compensation
18.2

 
—

Straight-line rent
9.4

 
9.2

Above market leasehold agreements
7.0

 
—

Other
12.1

 
3.3

Other non-current liabilities
$
107.2

 
$
12.5

Earnings Per Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted
Basic and diluted earnings (loss) per share were as follows:
 
Year Ended December 31,
(in millions, except share and per share data)
2014
 
2013
 
2012
Income (loss) from continuing operations
$
(19.5
)
 
$
(0.0
)
 
$
14.4

Income (loss) from discontinued operations, net of income taxes
(0.1
)
 
0.2

 
(10.0
)
Net income (loss)
$
(19.6
)
 
$
0.2

 
$
4.4

 
 
 
 
 
 
Weighted-average number of shares outstanding – basic and diluted
12,080,000

 
8,160,000

 
8,160,000

Earnings (loss) per share:
 
 
 
 
 
Basic and diluted
 
 
 
 
 
Continuing operations
$
(1.61
)
 
$
(0.00
)
 
$
1.76

Discontinued operations
(0.01
)
 
0.02

 
(1.23
)
Basic and diluted earnings (loss) per share
$
(1.62
)
 
$
0.02

 
$
0.53

Sthareholders' Equity (Tables)
Schedule of Accumulated Other Comprehensive Income (Loss)
AOCI consisted of the following:
(in millions)
December 31, 2014
 
December 31, 2013
Foreign currency translation adjustments
$
(14.7
)
 
$
(4.7
)
Adjustments to pension and other benefit liabilities, net of tax
(7.4
)
 
—

Accumulated other comprehensive loss
$
(22.1
)
 
$
(4.7
)
Equity-Based Incentive Plans (Tables)
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan
At the time of the Spin-off, all equity awards held by employees of xpedx were granted under International Paper’s 2009 Incentive Compensation Plan or predecessor plans. In conjunction with the Spin-off and Merger, International Paper retained all rights and obligations of these incentive plans. xpedx's stock-based compensation expense and related income tax benefits associated with these International Paper plans were as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Total stock-based compensation expense
$
4.3

 
$
15.4

 
$
13.1

Income tax benefit related to stock-based compensation
$
1.3

 
$
8.5

 
$
6.2

Discontinued Operations (Tables)
Schedule of Net Sales, Income from Operations and Loss on Disposition for Discontinued Operations
Results of discontinued operations were as follows:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Loss from operations
$
(0.1
)
 
$
(0.5
)
 
$
(0.4
)
Restructuring and disposal income (loss)
—

 
0.7

 
(10.1
)
(Loss) income from discontinued operations, net of income tax benefit of $0.0, $0.0 and $0.5, respectively
(0.1
)
 
0.2

 
(10.0
)
Segment Information (Tables)
Schedule of Segment Reporting Information, by Segment 
The following tables present net sales, Adjusted EBITDA and certain other measures for each of the reportable segments and total continuing operations for the periods presented:
(in millions)
Print
 
Publishing
 
Packaging
 
Facility Solutions
 
Corporate & Other
 
Total
Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,956.1

 
$
1,075.5

 
$
2,259.4

 
$
1,070.3

 
$
45.2

 
$
7,406.5

Adjusted EBITDA
$
55.4

 
$
27.1

 
$
157.0

 
$
33.6

 
$
(151.1
)
 
$
122.0

Depreciation and amortization
$
9.7

 
$
1.4

 
$
9.7

 
$
4.6

 
$
12.2

 
$
37.6

Restructuring charges
$
1.5

 
$
—

 
$
1.4

 
$
0.6

 
$
0.5

 
$
4.0

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,399.6

 
$
807.9

 
$
1,600.3

 
$
844.6

 
$
—

 
$
5,652.4

Adjusted EBITDA
$
43.9

 
$
16.4

 
$
117.9

 
$
14.4

 
$
(118.4
)
 
$
74.2

Depreciation and amortization
$
4.4

 
$
0.6

 
$
2.6

 
$
1.5

 
$
8.0

 
$
17.1

Restructuring charges
$
15.7

 
$
1.1

 
$
11.7

 
$
7.4

 
$
2.0

 
$
37.9

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,651.2

 
$
822.7

 
$
1,593.9

 
$
944.2

 
$
—

 
$
6,012.0

Adjusted EBITDA
$
53.0

 
$
13.8

 
$
123.6

 
$
19.2

 
$
(120.1
)
 
$
89.5

Depreciation and amortization
$
6.1

 
$
0.6

 
$
2.8

 
$
1.8

 
$
2.7

 
$
14.0

Restructuring charges
$
20.4

 
$
0.3

 
$
7.1

 
$
5.0

 
$
2.3

 
$
35.1

Reconciliation of Total Adjusted EBITDA to Net Income (Loss) 
The table below presents a reconciliation of income (loss) from continuing operations before income taxes reflected in the Consolidated and Combined Statements of Operations to Total Adjusted EBITDA:
 
Year Ended December 31,
(in millions)
2014
 
2013
 
2012
Income (loss) from continuing operations before income taxes
$
(21.6
)
 
$
0.4

 
$
23.5

Interest expense, net
14.0

 
—

 
—

Depreciation and amortization
37.6

 
17.1

 
14.0

Restructuring charges
4.0

 
37.9

 
35.1

Non-restructuring stock-based compensation
4.0

 
13.1

 
13.1

LIFO expense
6.3

 
3.4

 
1.0

Non-restructuring severance charges
2.6

 
2.3

 
0.6

Merger and integration expenses
75.1

 
—

 
—

Fair value adjustment on TRA contingent liability
1.7

 
—

 
—

Other
(1.7
)
 
—

 
2.2

Total Adjusted EBITDA
$
122.0

 
$
74.2

 
$
89.5

Reconciliation of Assets from Segment to Consolidated 
The table below summarizes total assets as of December 31, 2014 and December 31, 2013:
(in millions)
December 31, 2014
 
December 31, 2013
Print
$
949.1

 
$
517.4

Publishing
207.6

 
79.8

Packaging
797.6

 
398.7

Facility Solutions
381.3

 
201.7

Corporate & Other
238.9

 
59.3

Total assets
$
2,574.5

 
$
1,256.9

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas 
The following table presents net sales and property and equipment, net by geographic area.
 
Net Sales(1)
 
Property and Equipment, Net
 
Year Ended December 31,
 
December 31, 2014
 
December 31, 2013
(in millions)
2014
 
2013
 
2012
 
 
U.S.
$
6,848.9

 
$
5,508.5

 
$
5,830.9

 
$
355.0

 
$
106.1

Canada
408.2

 
25.2

 
32.6

 
18.7

 
—

Rest of world
149.4

 
118.7

 
148.5

 
3.7

 
1.0

Total
$
7,406.5

 
$
5,652.4

 
$
6,012.0

 
$
377.4

 
$
107.1

(1) Net sales are attributed based on the location of the purchaser/destination.
Quarterly Data (Unaudited) (Tables)
Schedule of Quarterly Financial Information
The unaudited quarterly results of operations for 2014 and 2013 are summarized below:
 
2014
(in millions, except share and per share data)
Three Months Ended
 
March 31
 
June 30
 
September 30(2)
 
December 31(3)
Net sales
$
1,307.4

 
$
1,329.0

 
$
2,390.3

 
$
2,379.8

Cost of products sold
1,088.5

 
1,116.7

 
1,987.1

 
1,988.6

Income (loss) from continuing operations
5.6

 
2.9

 
(14.0
)
 
(14.0
)
Loss from discontinued operations, net of income taxes
(0.1
)
 
—

 
—

 
—

Net income (loss)
5.5

 
2.9

 
(14.0
)
 
(14.0
)
 
 
 
 
 
 
 
 
Weighted-average number of shares outstanding – basic and diluted
8,160,000
 
8,160,000
 
16,000,000
 
16,000,000
Earnings (loss) per share (1):
 
 
 
 
 
 
 
Basic and diluted
 
 
 
 
 
 
 
Continuing operations
$
0.69

 
$
0.36

 
$
(0.88
)
 
$
(0.88
)
Discontinued operations
(0.01
)
 
—

 
—

 
—

Basic and diluted earnings (loss) per share
$
0.68

 
$
0.36

 
$
(0.88
)
 
$
(0.88
)
 
 
 
 
 
 
 
 
 
2013
 
Three Months Ended
 
March 31(4)
 
June 30(5)
 
September 30(6)
 
December 31(7)
Net sales
$
1,388.4

 
$
1,402.9

 
$
1,442.8

 
$
1,418.3

Cost of products sold
1,159.3

 
1,172.1

 
1,214.1

 
1,191.3

Income (loss) from continuing operations
(0.9
)
 
(2.3
)
 
5.2

 
(2.0
)
Income (loss) from discontinued operations, net of income taxes
0.2

 
(0.1
)
 
(0.1
)
 
0.2

Net income (loss)
(0.7
)
 
(2.4
)
 
5.1

 
(1.8
)
 
 
 
 
 
 
 
 
Weighted-average number of shares outstanding – basic and diluted
8,160,000
 
8,160,000
 
8,160,000
 
8,160,000
Earnings (loss) per share (1):
 
 
 
 
 
 
 
Basic and diluted
 
 
 
 
 
 
 
Continuing operations
$
(0.11
)
 
$
(0.28
)
 
$
0.64

 
$
(0.25
)
Discontinued operations
0.02

 
(0.01
)
 
(0.01
)
 
0.02

Basic and diluted earnings (loss) per share
$
(0.09
)
 
$
(0.29
)
 
$
0.63

 
$
(0.23
)

(1) See Note 12 of the Notes to the Consolidated and Combined Financial Statements for discussion on the shares of common stock utilized in the computation of basic and diluted earnings per share.
(2) Includes $54.8 million of merger and integration expenses related to the Merger of Unisource and to integrate the combined businesses of xpedx and Unisource.
(3) Includes $18.2 million of merger and integration expenses and $5.1 million of restructuring charges related to Veritiv's restructuring program of its North American operations.
(4) Includes $7.1 million of restructuring charges related to xpedx's restructuring plan.
(5) Includes $17.3 million of restructuring charges related to xpedx's restructuring plan.
(6) Includes $6.0 million of restructuring charges related to xpedx's restructuring plan.
(7) Includes $7.5 million of restructuring charges related to xpedx's restructuring plan.
Business and Summary of Significant Accounting Policies - Narrative (Details) (USD $)
12 Months Ended 0 Months Ended 6 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2014
Distribution_Center
Dec. 31, 2013
Dec. 31, 2012
Jul. 1, 2014
Dec. 31, 2011
Jul. 1, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
International Paper
Selling, general and administrative expenses
Dec. 31, 2014
International Paper
Selling, general and administrative expenses
Dec. 31, 2013
International Paper
Selling, general and administrative expenses
Dec. 31, 2012
International Paper
Selling, general and administrative expenses
Jul. 1, 2014
Veritiv
UWW Holdings, LLC
Dec. 31, 2014
Common Stock
Dec. 31, 2014
Additional Paid-in Capital
Jul. 1, 2014
International Paper Shareholders
Dec. 31, 2014
International Paper Shareholders
Jul. 1, 2014
International Paper Shareholders
Dec. 31, 2014
International Paper Shareholders
Merger and integration expense
Jul. 1, 2014
International Paper Shareholders
Common Stock
Dec. 31, 2014
International Paper Shareholders
Additional Paid-in Capital
Jul. 1, 2014
UWW Holdings, LLC
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, LLC
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, LLC
UWW Holdings, Inc. XPEDX Merger
Jul. 1, 2014
UWW Holdings, LLC
UWW Holdings, Inc. XPEDX Merger
Merger and integration expense
Dec. 31, 2014
UWW Holdings, LLC
UWW Holdings, Inc. XPEDX Merger
Merger and integration expense
Dec. 31, 2014
Capital Lease Obligations
Minimum
Dec. 31, 2014
Capital Lease Obligations
Maximum
Dec. 31, 2014
xpedx Restructuring Plan
Dec. 31, 2013
xpedx Restructuring Plan
Dec. 31, 2012
xpedx Restructuring Plan
Dec. 31, 2014
Allowance for Doubtful Accounts
Dec. 31, 2013
Allowance for Doubtful Accounts
Dec. 31, 2014
Allowance for Credit Risk, Returns and Discounts
Dec. 31, 2013
Allowance for Credit Risk, Returns and Discounts
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of distribution centers
180 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Spin-Off and Merger [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion of parent company investment in connection with Spin-off (in shares)
 
 
 
 
 
 
 
 
 
 
 
8,160,000.00 
 
 
 
 
 
8,160,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payment of cash during spinoff, initial payment
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 404,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payment of cash during spinoff, special payment
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payment of cash during spinoff, working capital adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
15,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payment of cash during spinoff, transaction expense-related adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
19,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payment of cash during spinoff, additional payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transfer to Parent in connection with Spin-off
(432,800,000)
 
 
 
 
 
 
 
 
 
 
 
(432,800,000)
 
 
 
 
 
(432,800,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction expense related adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,100,000 
 
 
 
 
 
4,700,000 
5,200,000 
 
 
 
 
 
 
 
 
 
Additional consideration including separately recognized expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
Spinoff potential earnout payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Spinoff, contingent consideration liability, aggregate EBITDA target
 
 
 
 
 
 
 
 
 
 
 
 
 
759,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business acquisition, equity issued, number of shares
 
 
 
 
 
7,840,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash payment associated with customary working capital and net indebtedness adjustments
 
 
 
 
 
39,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,900,000 
 
39,100,000 
 
 
 
 
 
 
 
 
 
 
 
Shareholder ownership percentage
 
 
 
51.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investment, ownership percentage
 
 
 
 
 
 
 
 
 
 
49.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
General corporate expenses
 
 
 
 
 
 
15,500,000 
25,500,000 
84,000,000 
78,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Manufacturer direct to customer gross sales revenue
2,900,000,000 
2,400,000,000 
2,500,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Handling and Delivery Costs
322,300,000 
252,900,000 
259,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
39,000,000 
22,700,000 
25,300,000 
 
26,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31,700,000 
22,500,000 
7,300,000 
200,000 
Percentage of LIFO inventory
86.00% 
97.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Excess of replacement or current costs over stated LIFO value
79,100,000 
76,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consigned inventory
58,300,000 
17,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
32,900,000 
15,900,000 
12,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated depreciation
15,600,000 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalized computer software, amortization expense
11,000,000 
8,300,000 
3,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation on restructuring
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
300,000 
1,200,000 
 
 
 
 
Capitalized computer software, unamortized amount
44,600,000 
17,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
8 years 
 
 
 
 
 
 
 
Long-lived asset impairment
$ 0 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business and Summary of Significant Accounting Policies - Receivable Allowance Rollforward (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Allowance for Doubtful Accounts Receivable [Roll Forward]
 
 
 
Beginning balance, January 1
$ 22.7 
$ 25.3 
$ 26.2 
Provision for bad debt expense
12.8 
6.4 
8.7 
Net write-offs and other adjustments
(9.8)
(9.0)
(9.6)
Other
13.3 
0 
0 
Ending balance, December 31
$ 39.0 
$ 22.7 
$ 25.3 
Business and Summary of Significant Accounting Policies - Plant Property & Equipment, Net (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Property, Plant and Equipment [Line Items]
 
 
Less: Accumulated depreciation and software amortization
$ (222.1)
$ (198.6)
Property and equipment, net
377.4 
107.1 
Land, buildings and improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
128.9 
143.8 
Machinery and equipment
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
110.2 
72.5 
Equipment capital leases and assets related to financing obligations with related party
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
232.0 
0 
Internally developed software
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
114.4 
84.5 
Construction-in-progress
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 14.0 
$ 4.9 
Business and Summary of Significant Accounting Policies - Estimated Useful Lives (Details)
12 Months Ended
Dec. 31, 2014
Buildings
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
40 years 
Leasehold improvements |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
1 year 
Leasehold improvements |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
20 years 
Machinery and equipment |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
3 years 
Machinery and equipment |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
15 years 
Equipment capital leases and assets related to financing obligations with related party |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
3 years 
Equipment capital leases and assets related to financing obligations with related party |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
15 years 
Internally developed software |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
3 years 
Internally developed software |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Property, plant and equipment, useful life
5 years 
Merger with Unisource - Narrative (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Jul. 1, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Sep. 30, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2013
UWW Holdings, Inc. XPEDX Merger
Jul. 1, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, LLC
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2013
Acquisition-related Costs
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
Fair Value Adjustment to Property, Plant and Equipment and Intangible Assets
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2013
Fair Value Adjustment to Property, Plant and Equipment and Intangible Assets
UWW Holdings, Inc. XPEDX Merger
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Merger and integration expenses
$ 75.1 
$ 0 
$ 0 
 
$ 18.2 
$ 54.8 
 
$ 75.1 
 
 
 
 
 
 
Preliminary estimated purchase price
 
 
 
382.6 
 
 
 
 
 
 
 
 
 
 
Working capital adjustment
 
 
 
 
 
 
 
 
 
 
3.1 
 
 
 
Business acquisition, equity issued, number of shares
 
 
 
7,840,000 
 
 
 
 
 
 
 
 
 
 
Goodwill accounting adjustment
 
 
 
 
(5.8)
 
 
 
 
 
 
 
 
 
Goodwill
52.4 
26.4 
 
 
 
 
 
 
 
26.0 
 
 
 
 
Revenue of acquiree since acquisition date, actual
 
 
 
 
 
 
2,040.5 
 
 
 
 
 
 
 
Earnings or loss of acquiree since acquisition date, actual
 
 
 
 
 
 
31.2 
 
 
 
 
 
 
 
Net income (loss) (in US dollars)
 
 
 
 
 
 
 
$ 22.7 
$ 181.1 
 
 
$ (103.5)
$ (2.5)
$ (14.0)
Pro forma adjustments, effective income tax rate
 
 
 
 
39.00% 
 
39.00% 
39.00% 
 
 
 
 
 
 
Merger with Unisource - Merger and Integration Expenses (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Sep. 30, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Business Acquisition [Line Items]
 
 
 
 
 
 
Legal and other professional and consulting fees
 
 
 
 
 
$ 29.7 
Retention compensation and termination benefits
 
 
 
 
 
37.9 
Other
 
 
 
 
 
7.5 
Total merger and integration expenses
$ 75.1 
$ 0 
$ 0 
$ 18.2 
$ 54.8 
$ 75.1 
Merger with Unisource - Assets Acquired and Liabilites Assumed (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Jul. 1, 2014
UWW Holdings, Inc. XPEDX Merger
Jul. 1, 2014
UWW Holdings, Inc. XPEDX Merger
Preliminary estimated purchase price:
 
 
 
 
Fair value of Veritiv shares transferred
 
 
$ 284.7 
 
Cash payment associated with customary working capital and net indebtedness adjustments
 
 
39.1 
 
Fair value of contingent liability associated with the Tax Receivable Agreement
 
 
58.8 
 
Total preliminary estimated purchase price
 
 
382.6 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
 
 
 
 
Cash
 
 
 
70.9 
Accounts receivable
 
 
 
448.4 
Inventories
 
 
 
353.8 
Deferred income tax assets
 
 
 
71.1 
Property and equipment
 
 
 
299.0 
Goodwill
52.4 
26.4 
 
26.0 
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
 
 
 
$ 382.6 
Merger with Unisource - Intangible Assets Acquired (Details) (UWW Holdings, Inc. XPEDX Merger, USD $)
In Millions, unless otherwise specified
0 Months Ended
Jul. 1, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
 
Value (in millions)
$ 31.5 
Customer relationships
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Estimated Useful Lives (in years)
14 years 9 months 6 days 
Value (in millions)
24.3 
Trademarks/Trade names
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Estimated Useful Lives (in years)
3 years 7 months 6 days 
Value (in millions)
4.1 
Non-compete agreements
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Estimated Useful Lives (in years)
1 year 
Value (in millions)
$ 3.1 
Merger with Unisource - Pro Forma (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Business Acquisition, Pro Forma Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding - basic and diluted (in shares)
16,000,000 
16,000,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
12,080,000 
8,160,000 
8,160,000 
UWW Holdings, Inc. XPEDX Merger
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net sales (in US dollars)
 
 
 
 
 
 
 
 
$ 9,314.1 
$ 9,741.5 
 
Net income (loss) (in US dollars)
 
 
 
 
 
 
 
 
22.7 
181.1 
 
Earnings per share, basic (in shares)
 
 
 
 
 
 
 
 
$ 1.42 
$ 11.32 
 
Earnings per share, diluted (in shares)
 
 
 
 
 
 
 
 
$ 1.40 
$ 11.32 
 
Weighted-average shares outstanding - basic and diluted (in shares)
 
 
 
 
 
 
 
 
16,000,000 
16,000,000 
 
UWW Holdings, Inc. XPEDX Merger |
Valuation Allowance Adjustment
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) (in US dollars)
 
 
 
 
$ (238.7)
 
 
 
 
 
 
Restructuring Charges - Restructuring Liability (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Veritiv Restructuring Plan
Dec. 31, 2014
Veritiv Restructuring Plan
Dec. 31, 2013
xpedx Restructuring Plan
Sep. 30, 2013
xpedx Restructuring Plan
Jun. 30, 2013
xpedx Restructuring Plan
Mar. 31, 2013
xpedx Restructuring Plan
Dec. 31, 2014
xpedx Restructuring Plan
Dec. 31, 2013
xpedx Restructuring Plan
Dec. 31, 2012
xpedx Restructuring Plan
Dec. 31, 2014
Severance and Related Costs
Veritiv Restructuring Plan
Dec. 31, 2014
Severance and Related Costs
xpedx Restructuring Plan
Dec. 31, 2013
Severance and Related Costs
xpedx Restructuring Plan
Dec. 31, 2012
Severance and Related Costs
xpedx Restructuring Plan
Dec. 31, 2014
Other Direct Costs
Veritiv Restructuring Plan
Restructuring Reserve [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring reserve
 
 
 
 
$ 0 
 
 
 
$ 3.8 
$ 7.7 
$ 3.8 
 
$ 0 
 
 
 
$ 0 
Costs incurred
4.0 
37.9 
35.1 
5.1 
5.1 
7.5 
6.0 
17.3 
7.1 
(1.1)
37.9 
35.1 
4.7 
0.2 
16.9 
11.9 
0.4 
Costs incurred
 
 
 
 
 
 
 
 
 
0.1 
44.0 
 
 
 
 
 
 
Payments
 
 
 
 
(1.2)
 
 
 
 
(3.9)
(39.7)
 
(1.0)
 
 
 
(0.2)
Adjustment of prior year's estimate
 
 
 
 
 
 
 
 
 
(0.3)
(0.4)
 
 
 
 
 
 
Liability transferred to Parent in connection with Spin-off
 
 
 
 
 
 
 
 
 
3.6 
 
 
 
 
 
 
 
Restructuring reserve
 
 
 
$ 3.9 
$ 3.9 
$ 7.7 
 
 
 
$ 0 
$ 7.7 
$ 3.8 
$ 3.7 
 
 
 
$ 0.2 
Restructuring Charges - Restructuring Income (Loss) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
facility
Dec. 31, 2013
facility
Dec. 31, 2012
facility
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
$ 4.0 
$ 37.9 
$ 35.1 
xpedx Restructuring Plan
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Number of facilities closed
 
 
 
 
0 
6 
118 
Restructuring charges
7.5 
6.0 
17.3 
7.1 
(1.1)
37.9 
35.1 
Facility costs |
xpedx Restructuring Plan
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
0.3 
15.2 
13.0 
Severance and Related Costs |
xpedx Restructuring Plan
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
0.2 
16.9 
11.9 
Personnel costs |
xpedx Restructuring Plan
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
0 
10.9 
10.6 
Accelerated amortization and depreciation |
xpedx Restructuring Plan
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
0 
0.3 
1.2 
Professional services |
xpedx Restructuring Plan
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
0 
1.0 
1.1 
Gain on sale of fixed assets |
xpedx Restructuring Plan
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
$ (1.6)
$ (6.4)
$ (2.7)
Goodwill and Other Intangible Assets - Changes in Goodwill (Details) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Goodwill [Roll Forward]
 
 
Balance at December 31, 2013
$ 26,400,000 
 
Additions to goodwill
26,000,000 
0 
Balance at December 31, 2014
52,400,000 
26,400,000 
Operating Segments |
Print
 
 
Goodwill [Roll Forward]
 
 
Balance at December 31, 2013
0 
 
Additions to goodwill
0 
 
Balance at December 31, 2014
0 
 
Operating Segments |
Publishing
 
 
Goodwill [Roll Forward]
 
 
Balance at December 31, 2013
0 
 
Additions to goodwill
0 
 
Balance at December 31, 2014
0 
 
Operating Segments |
Packaging
 
 
Goodwill [Roll Forward]
 
 
Balance at December 31, 2013
26,400,000 
 
Additions to goodwill
17,900,000 
 
Balance at December 31, 2014
44,300,000 
 
Operating Segments |
Facility Solutions
 
 
Goodwill [Roll Forward]
 
 
Balance at December 31, 2013
0 
 
Additions to goodwill
1,900,000 
 
Balance at December 31, 2014
1,900,000 
 
Corporate and Other
 
 
Goodwill [Roll Forward]
 
 
Balance at December 31, 2013
0 
 
Additions to goodwill
6,200,000 
 
Balance at December 31, 2014
$ 6,200,000 
 
Goodwill and Other Intangible Assets - Other Intagible Assets (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Carrying Amount
$ 62.4 
$ 30.9 
Accumulated Amortization
26.3 
21.6 
Net
36.1 
9.3 
Customer relationships
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Carrying Amount
55.0 
30.7 
Accumulated Amortization
23.7 
21.5 
Net
31.3 
9.2 
Trademarks/Trade names
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Carrying Amount
4.3 
0.2 
Accumulated Amortization
1.1 
0.1 
Net
3.2 
0.1 
Non-compete agreements
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Carrying Amount
3.1 
0 
Accumulated Amortization
1.5 
0 
Net
$ 1.6 
$ 0 
Goodwill and Other Intangible Assets - Other Intangible Assets - Future Amortization (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
2015
$ 5.8 
2016
3.6 
2017
3.6 
2018
3.6 
2019
$ 3.3 
Goodwill and Other Intangible Assets - Narrative (Details) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Goodwill [Line Items]
 
 
 
Goodwill
$ 52,400,000 
$ 26,400,000 
 
Additions to goodwill
26,000,000 
0 
 
Accumulated impairment loss
0 
 
 
Amortization of intangible assets
4,700,000 
1,500,000 
2,300,000 
Packaging |
Operating Segments
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill
44,300,000 
26,400,000 
 
Additions to goodwill
17,900,000 
 
 
Print
 
 
 
Goodwill [Line Items]
 
 
 
Accumulated impairment loss
 
265,400,000 
 
Print |
Operating Segments
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill
0 
0 
 
Additions to goodwill
0 
 
 
Facility Solutions
 
 
 
Goodwill [Line Items]
 
 
 
Accumulated impairment loss
 
57,100,000 
 
Facility Solutions |
Operating Segments
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill
1,900,000 
0 
 
Additions to goodwill
1,900,000 
 
 
Publishing
 
 
 
Goodwill [Line Items]
 
 
 
Accumulated impairment loss
 
50,500,000 
 
Publishing |
Operating Segments
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill
0 
0 
 
Additions to goodwill
$ 0 
 
 
Debt - Long-Term Debt Obligations (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
Equipment capital lease obligations
$ 11.0 
 
Long-term Debt and Capital Lease Obligations, Including Current Maturities
858.8 
 
Less: current portion of long-term debt
(3.8)
0 
Long-term debt, net
855.0 
0 
Line of Credit |
Asset-Backed Lending Facility
 
 
Debt Instrument [Line Items]
 
 
ABL Facility
$ 847.8 
 
Debt - Narrative (Details) (USD $)
12 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Line of Credit
Asset-Backed Lending Facility
Dec. 31, 2014
Line of Credit
Asset-Backed Lending Facility
Interest Expense
Dec. 31, 2014
Line of Credit
U.S. Borrowers Line of Credit
Asset-Backed Lending Facility
Dec. 31, 2014
Revolving Credit Facility
Canadian Borrower Line of Credit
Asset-Backed Lending Facility
Jul. 1, 2014
Line of Credit, Senior Facility
Senior Credit Facility
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
$ 1,400,000,000 
 
$ 1,250,000,000.0 
$ 150,000,000 
 
Minimum fixed charge coverage ratio
 
 
 
100.00% 
 
 
 
 
Remaining borrowing capacity
 
 
 
392,000,000 
 
 
 
 
Weighted average interest rate
 
 
 
2.00% 
 
 
 
 
Amortization of deferred financing fees
2,200,000 
0 
0 
 
2,200,000 
 
 
 
Line of credit outstanding
 
 
 
 
 
 
 
$ 303,900,000 
Leases Leases - Future Minimum Lease Payments (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Related Party Financing Obligations and Capital Leases
 
2015
$ 20.7 
2016
19.8 
2017
19.4 
2018
8.9 
2019
0.4 
Thereafter
0.3 
Total
69.5 
Amount representing interest
(6.3)
Total future minimum lease payments
63.2 
Gross Lease Obligations
 
2015
77.8 
2016
68.1 
2017
58.3 
2018
49.4 
2019
40.7 
Thereafter
87.2 
Lease obligations total
381.5 
Sublease income
 
2015
(0.3)
2016
(0.2)
2017
(0.1)
2018
(0.1)
2019
0 
Thereafter
0 
Total
(0.7)
Net Lease Obligations
 
2015
77.5 
2016
67.9 
2017
58.2 
2018
49.3 
2019
40.7 
Thereafter
87.2 
Total
$ 380.8 
Leases Leases - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Georgia-Pacific
UWW Holdings Inc
Property
Nov. 27, 2002
Georgia-Pacific
UWW Holdings Inc
Property
Dec. 31, 2014
Unisource
Georgia-Pacific
Financing Obligations to Related Party [Abstract]
 
 
 
 
 
 
Percentage of voting interest sold
 
 
 
 
60.00% 
 
Number of properties transferred to related party
 
 
 
 
40 
 
Sublease agreements, number of properties
 
 
 
 
38 
 
Financing obligation at end of lease term
 
 
 
 
 
$ 174.0 
Number of properties transferred to related party not sold
 
 
 
2 
 
 
Operating leases, rent expense
$ 92.4 
$ 65.0 
$ 64.4 
 
 
 
Income Taxes - Narrative (Details) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Operating Loss Carryforwards [Line Items]
 
 
 
 
Valuation allowance on deferred tax assets
$ 41,800,000 
$ 0 
$ 0 
 
Undistributed earnings of foreign subsidiaries
20,400,000 
 
 
 
Amount of unrecognized deferred tax liability, undistributed earnings of foreign subsidiaries
8,000,000 
 
 
 
Ultimate benefits highly certain
0 
600,000 
1,700,000 
 
Unrecognized tax benefits that would impact effective tax rate
1,000,000 
0 
0 
 
Unrecognized tax benefits, interest on income taxes accrued (less than in 2013 and 2012)
600,000 
100,000 
100,000 
 
Unrecognized tax benefits, income tax penalties accrued
200,000 
0 
0 
 
Unrecognized tax benefits
1,000,000 
600,000 
1,700,000 
1,400,000 
Expected decrease in unrecognized tax benefits in the next 12 months
300,000 
 
 
 
Federal tax authority
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
Valuation allowance on deferred tax assets
24,400,000 
 
 
 
Operating loss carryforwards
312,500,000 
 
 
 
State tax authority
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
Valuation allowance on deferred tax assets
1,700,000 
 
 
 
Operating loss carryforwards
230,000,000 
 
 
 
Non-U.S.
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
Valuation allowance on deferred tax assets
15,700,000 
0 
 
 
Operating loss carryforwards
$ 34,400,000 
 
 
 
Income Taxes - Domestic (United States) and Foreign components of Net Income Before Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]
 
 
 
Domestic (United States)
$ (19.0)
$ (2.1)
$ 15.8 
Foreign
(2.6)
2.5 
7.7 
Income (loss) from continuing operations before income taxes
$ (21.6)
$ 0.4 
$ 23.5 
Income Taxes - Income Tax Expense (Benefit) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Current Provision:
 
 
 
U.S. Federal
$ 5.0 
$ (3.3)
$ 4.6 
U.S. State
0.9 
(0.1)
1.0 
Foreign
1.7 
0.5 
2.1 
Total current income tax expense (benefit)
7.6 
(2.9)
7.7 
Deferred, net:
 
 
 
U.S. Federal
(8.3)
3.0 
1.0 
U.S. State
(1.2)
0.2 
0.3 
Foreign
(0.2)
0.1 
0.1 
Total deferred, net
(9.7)
3.3 
1.4 
Provision for income tax expense (benefit)
$ (2.1)
$ 0.4 
$ 9.1 
Income Taxes - Reconciliation of Federal Statutory Rate and the Effective Tax Rate (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Effective Income Tax Rate Reconciliation, Amount [Abstract]
 
 
 
Income from continuing operations before income taxes
$ (21.6)
$ 0.4 
$ 23.5 
Statutory U.S. income tax rate (as percent)
35.00% 
35.00% 
35.00% 
Tax expense using statutory U.S. income tax rate
(7.6)
0.1 
8.2 
Foreign income tax rate differential
0.3 
(0.1)
(0.6)
State tax (net of federal benefit)
(0.3)
0 
0.7 
Meals and entertainment
0.7 
0.4 
0.6 
Transaction costs
1.6 
0 
0 
Change in valuation allowance
2.0 
0 
0 
Executive compensation
0.9 
0 
0 
Other
0.3 
0 
0.2 
Provision for income tax expense (benefit)
$ (2.1)
$ 0.4 
$ 9.1 
Effective income tax rate
9.70% 
100.00% 
38.70% 
Income Taxes - Deferred Income Tax Assets and Liabilities (Details) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Deferred income tax assets:
 
 
 
Less valuation allowance
$ (41,800,000)
$ 0 
$ 0 
U.S.
 
 
 
Deferred income tax assets:
 
 
 
Accrued compensation
16,800,000 
7,100,000 
 
Capital lease obligations to related party
86,800,000 
0 
 
Goodwill and other intangibles, net
5,700,000 
18,200,000 
 
Property and equipment, net
0 
0 
 
Long-term compensation
15,200,000 
8,300,000 
 
Net operating losses and credit carryforwards
120,500,000 
3,400,000 
 
Allowance for doubtful accounts
13,800,000 
8,600,000 
 
Other
1,800,000 
3,700,000 
 
Gross deferred income tax assets
260,600,000 
49,300,000 
 
Less valuation allowance
(26,100,000)
0 
 
Total deferred tax asset
234,500,000 
49,300,000 
 
Deferred income tax liabilities:
 
 
 
Property and equipment, net
(95,100,000)
(8,700,000)
 
Inventory reserve
(50,100,000)
(31,900,000)
 
Prepaid assets
(3,800,000)
0 
 
Other
(1,600,000)
0 
 
Total deferred tax liability
(150,600,000)
(40,600,000)
 
Net deferred income tax asset (liability)
83,900,000 
8,700,000 
 
Non-U.S.
 
 
 
Deferred income tax assets:
 
 
 
Accrued compensation
0 
0 
 
Capital lease obligations to related party
800,000 
0 
 
Goodwill and other intangibles, net
0 
0 
 
Property and equipment, net
300,000 
0 
 
Long-term compensation
6,000,000 
0 
 
Net operating losses and credit carryforwards
8,700,000 
0 
 
Allowance for doubtful accounts
0 
0 
 
Other
500,000 
500,000 
 
Gross deferred income tax assets
16,300,000 
500,000 
 
Less valuation allowance
(15,700,000)
0 
 
Total deferred tax asset
600,000 
500,000 
 
Deferred income tax liabilities:
 
 
 
Property and equipment, net
0 
0 
 
Inventory reserve
0 
0 
 
Prepaid assets
0 
0 
 
Other
0 
0 
 
Total deferred tax liability
0 
0 
 
Net deferred income tax asset (liability)
$ 600,000 
$ 500,000 
 
Income Taxes - Activity of Uncertain Tax Positions (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Beginning of period
$ (0.6)
$ (1.7)
$ (1.4)
Additions based on tax positions taken during the current period
0 
0 
(0.3)
Reductions based on tax positions taken during a prior period
0.6 
0 
0 
Additions based on tax positions taken during a prior period
(1.0)
0 
0 
Lapses of statutes of limitations
0 
1.1 
0 
Total gross unrecognized tax benefit
$ (1.0)
$ (0.6)
$ (1.7)
Income Taxes - Schedule of Valuation Allowance (Details) (USD $)
6 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Valuation Allowance of Deferred Tax Assets
Valuation Allowance [Roll Forward]
 
 
 
 
Balance at July 1, 2014
$ 41,800,000 
$ 0 
$ 0 
$ 39,800,000 
Additions
 
 
 
2,000,000 
Subtractions
 
 
 
0 
Balance at end of year
$ 41,800,000 
$ 0 
$ 0 
$ 41,800,000 
Related-Party Transactions Parent Company Investment (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Parent Company Investment [Line Items]
 
 
 
Total net transfers to International Paper
$ (82.0)
$ (35.1)
$ (35.4)
Parent Company Investment
 
 
 
Parent Company Investment [Line Items]
 
 
 
Intercompany sales and purchases, net
255.4 
556.6 
575.2 
Cash pooling and general financing activities
(322.5)
(675.8)
(695.4)
Corporate allocations including income taxes
34.7 
84.1 
84.8 
Net adjustments in conjunction with the Spin-off
(49.6)
0 
0 
Total net transfers to International Paper
$ (82.0)
$ (35.1)
$ (35.4)
Related-Party Transactions Narrative (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Jul. 1, 2014
UWW Holdings, LLC
Demand_Registration
Jul. 1, 2014
UWW Holdings, LLC
Jul. 1, 2014
UWW Holdings, LLC
LIBOR
Dec. 31, 2014
Georgia-Pacific
Dec. 31, 2014
Georgia-Pacific
Sales
Dec. 31, 2014
Georgia-Pacific
Cost of products sold
Dec. 31, 2014
International Paper
Dec. 31, 2013
International Paper
Dec. 31, 2014
International Paper
Sales
Other International Paper Businesses
Dec. 31, 2013
International Paper
Sales
Other International Paper Businesses
Dec. 31, 2012
International Paper
Sales
Other International Paper Businesses
Dec. 31, 2014
International Paper
Cost of products sold
Other International Paper Businesses
Dec. 31, 2013
International Paper
Cost of products sold
Other International Paper Businesses
Dec. 31, 2012
International Paper
Cost of products sold
Other International Paper Businesses
Dec. 31, 2014
International Paper
Selling, general and administrative expenses
Dec. 31, 2014
International Paper
Selling, general and administrative expenses
Dec. 31, 2013
International Paper
Selling, general and administrative expenses
Dec. 31, 2012
International Paper
Selling, general and administrative expenses
Jun. 30, 2014
CEO of Merged Company [Member]
Merger and integration expense
Dec. 31, 2014
CEO of Merged Company [Member]
Merger and integration expense
Jul. 1, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2011
Promissory Notes from Parent
International Paper
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable form parent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 20.3 
Business acquisition, equity issued, number of shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,840,000 
 
Registration rights agreement, period demand rights commence following distribution date
 
 
 
180 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Registration rights agreement, maximum demand registration in 150 day period
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Registration rights agreement, maximum demand registration in 365 day period
 
 
 
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Registration rights agreement, material transaction, period allowed to delay registration in 360 day period
 
 
 
120 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Merger utilization of operating losses, percentage of tax savings payable to affiliate
 
 
 
 
85.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax receivable agreement, basis spread on variable rate
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases from related party
 
 
 
 
 
 
 
 
136.1 
 
 
 
 
 
276.5 
604.4 
639.0 
 
 
 
 
 
 
 
 
Related party sales
42.7 
53.0 
65.1 
 
 
 
 
18.4 
 
 
 
24.3 
53.0 
65.1 
 
 
 
 
 
 
 
 
 
 
 
Related party payable
11.0 
2.6 
 
 
 
 
11.0 
 
 
 
2.6 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Related party receivable
3.9 
10.1 
 
 
 
 
3.9 
 
 
 
10.1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventories
673.2 
360.9 
 
 
 
 
26.6 
 
 
 
48.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
General corporate expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.5 
25.5 
84.0 
78.4 
 
 
 
 
Time period for net adjustments of intercompany settlements to be completed
 
 
 
 
 
 
 
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net adjustments related to spin-off, tangible assets
 
 
 
 
 
 
 
 
 
24.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net adjustments of intercompany settlements
 
 
 
 
 
 
 
 
 
24.6 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Related party transaction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.0 
 
 
 
Severance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 5.4 
 
 
Employee Benefit Plans - Change Benefit Obligation and Funded Status (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Accumulated benefit obligation at December 31, 2014
$ 93.7 
$ 93.7 
Change in projected benefit obligation:
 
 
Beginning balance
87.9 
 
Service cost
0.4 
 
Interest cost
1.7 
1.7 
Actuarial loss
5.9 
 
Benefits paid
(2.0)
 
Settlements
(0.2)
 
Foreign exchange adjustments
0 
 
Ending balance
93.7 
93.7 
Change in plan assets:
 
 
Beginning balance
81.6 
 
Employer contributions
0.8 
 
Investment returns
0.4 
 
Benefits paid
(2.0)
 
Administrative expenses paid
(0.4)
 
Settlements
(0.2)
 
Currency translation adjustments
0 
 
Ending balance
80.2 
80.2 
Underfunded status at December 31, 2014
(13.5)
(13.5)
Canada Pension Plan
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Accumulated benefit obligation at December 31, 2014
79.0 
79.0 
Change in projected benefit obligation:
 
 
Beginning balance
92.7 
 
Service cost
0.1 
 
Interest cost
1.9 
1.9 
Actuarial loss
4.4 
 
Benefits paid
(2.0)
 
Settlements
0 
 
Foreign exchange adjustments
(7.7)
 
Ending balance
89.4 
89.4 
Change in plan assets:
 
 
Beginning balance
68.7 
 
Employer contributions
2.0 
 
Investment returns
4.1 
 
Benefits paid
(2.0)
 
Administrative expenses paid
0 
 
Settlements
0 
 
Currency translation adjustments
(6.4)
 
Ending balance
66.4 
66.4 
Underfunded status at December 31, 2014
$ (23.0)
$ (23.0)
Employee Benefit Plans - Balance Sheet Positions (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
 
 
Net loss, net of tax
$ 7.4 
$ 0 
U.S. Defined Benefit Pension Plan
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Other current liabilities
0.1 
 
Defined benefit pension obligations
13.4 
 
Net liability recognized
13.5 
 
Net loss, net of tax
5.2 
 
Canada Pension Plan
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Other current liabilities
0.1 
 
Defined benefit pension obligations
22.9 
 
Net liability recognized
23.0 
 
Net loss, net of tax
$ 2.2 
 
Employee Benefit Plans - Net Periodic Costs (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
 
 
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
 
 
Service cost
 
$ 0.8 
Interest cost
1.7 
1.7 
Expected return on plan assets
 
(3.1)
Net periodic pension credit
 
(0.6)
Canada Pension Plan
 
 
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
 
 
Service cost
 
0.1 
Interest cost
1.9 
1.9 
Expected return on plan assets
 
(1.9)
Net periodic pension credit
 
$ 0.1 
Employee Benefit Plans - Fair Value Hierarchy of Plan Assets (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Jul. 1, 2014
U.S. Defined Benefit Pension Plan
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
$ 80.2 
$ 81.6 
U.S. Defined Benefit Pension Plan |
Level 1
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
80.2 
 
U.S. Defined Benefit Pension Plan |
Level 2
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
U.S. Defined Benefit Pension Plan |
Level 3
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
U.S. Defined Benefit Pension Plan |
Equity securities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
53.3 
 
U.S. Defined Benefit Pension Plan |
Equity securities |
Level 1
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
53.3 
 
U.S. Defined Benefit Pension Plan |
Equity securities |
Level 2
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
U.S. Defined Benefit Pension Plan |
Equity securities |
Level 3
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
U.S. Defined Benefit Pension Plan |
Fixed income securities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
26.7 
 
U.S. Defined Benefit Pension Plan |
Fixed income securities |
Level 1
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
26.7 
 
U.S. Defined Benefit Pension Plan |
Fixed income securities |
Level 2
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
U.S. Defined Benefit Pension Plan |
Fixed income securities |
Level 3
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
U.S. Defined Benefit Pension Plan |
Cash and short-term securities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0.2 
 
U.S. Defined Benefit Pension Plan |
Cash and short-term securities |
Level 1
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0.2 
 
U.S. Defined Benefit Pension Plan |
Cash and short-term securities |
Level 2
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
U.S. Defined Benefit Pension Plan |
Cash and short-term securities |
Level 3
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
Canada Pension Plan
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
66.4 
68.7 
Canada Pension Plan |
Level 1
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
1.1 
 
Canada Pension Plan |
Level 2
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
65.3 
 
Canada Pension Plan |
Level 3
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
Canada Pension Plan |
Equity securities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
42.4 
 
Canada Pension Plan |
Equity securities |
Level 1
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
Canada Pension Plan |
Equity securities |
Level 2
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
42.4 
 
Canada Pension Plan |
Equity securities |
Level 3
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
Canada Pension Plan |
Fixed income securities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
22.9 
 
Canada Pension Plan |
Fixed income securities |
Level 1
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
Canada Pension Plan |
Fixed income securities |
Level 2
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
22.9 
 
Canada Pension Plan |
Fixed income securities |
Level 3
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
Canada Pension Plan |
Cash and short-term securities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
1.1 
 
Canada Pension Plan |
Cash and short-term securities |
Level 1
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
1.1 
 
Canada Pension Plan |
Cash and short-term securities |
Level 2
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
 
Canada Pension Plan |
Cash and short-term securities |
Level 3
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
$ 0 
 
Employee Benefit Plans - Weighted-Average Asset Allocations (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
Jul. 1, 2014
U.S. Defined Benefit Pension Plan
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
Equity securities
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
Fixed income securities
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
Cash and short-term securities
Dec. 31, 2014
Canada Pension Plan
Jul. 1, 2014
Canada Pension Plan
Dec. 31, 2014
Canada Pension Plan
Equity securities
Dec. 31, 2014
Canada Pension Plan
Fixed income securities
Dec. 31, 2014
Canada Pension Plan
Cash and short-term securities
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
$ 80.2 
$ 81.6 
$ 53.3 
$ 26.7 
$ 0.2 
$ 66.4 
$ 68.7 
$ 42.4 
$ 22.9 
$ 1.1 
Asset allocations percent range, minimum
 
 
55.00% 
20.00% 
0.00% 
 
 
50.00% 
30.00% 
0.00% 
Asset allocations percent range, maximum
 
 
75.00% 
40.00% 
10.00% 
 
 
70.00% 
50.00% 
5.00% 
Employer Benefit Plans - Significant Weighted-Average Assumptions (Details)
12 Months Ended
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
 
Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
 
Discount rate
3.75% 
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
 
Discount rate
4.05% 
Expected long-term rate of return on assets
8.00% 
Canada Pension Plan
 
Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
 
Discount rate
4.00% 
Rate of compensation increases
3.00% 
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
 
Discount rate
4.30% 
Rate of compensation increases
3.00% 
Expected long-term rate of return on assets
5.75% 
Employee Benefit Plans - Expected Future Benefit Payments (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
 
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract]
 
2015
$ 6.6 
2016
4.7 
2017
4.8 
2018
4.8 
2019
4.9 
2020-2024
27.4 
Canada Pension Plan
 
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract]
 
2015
2.5 
2016
2.7 
2017
2.8 
2018
2.9 
2019
3.0 
2020-2024
$ 18.3 
Employee Benefit Plans - Multiemployer Plans (Details) (Multiemployer plans, pension, USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Multiemployer Plans [Line Items]
 
 
 
Veritiv's Contributions
$ 3.2 
$ 2.5 
$ 2.6 
US employee collective bargaining agreement
 
 
 
Multiemployer Plans [Line Items]
 
 
 
Veritiv's Contributions
3.2 
2.5 
2.6 
Western Conference of Teamsters Pension Trust Fund
 
 
 
Multiemployer Plans [Line Items]
 
 
 
EIN Plan No.
916145047 
 
 
Pension Plan No.
001 
 
 
Pension Protection Act Zone Status
Green 
 
 
Veritiv's Contributions
1.5 
1.2 
1.3 
Surcharge Imposed
No 
 
 
Central States, Southeast & Southwest Areas Pension Fund
 
 
 
Multiemployer Plans [Line Items]
 
 
 
EIN Plan No.
366044243 
 
 
Pension Plan No.
001 
 
 
Pension Protection Act Zone Status
Red 
 
 
Veritiv's Contributions
0.3 
0.2 
0.2 
Surcharge Imposed
Yes 
 
 
Teamsters Pension Plan of Philadelphia & Vicinity
 
 
 
Multiemployer Plans [Line Items]
 
 
 
EIN Plan No.
231511735 
 
 
Pension Plan No.
001 
 
 
Pension Protection Act Zone Status
Yellow 
 
 
Veritiv's Contributions
0.3 
0.3 
0.3 
Surcharge Imposed
Yes 
 
 
Graphic Arts Industry Joint Pension Trust
 
 
 
Multiemployer Plans [Line Items]
 
 
 
EIN Plan No.
521074215 
 
 
Pension Plan No.
001 
 
 
Pension Protection Act Zone Status
Red 
 
 
Veritiv's Contributions
0.1 
0.1 
0.1 
Surcharge Imposed
Yes 
 
 
New England Teamsters & Trucking Industry Pension
 
 
 
Multiemployer Plans [Line Items]
 
 
 
EIN Plan No.
046372430 
 
 
Pension Plan No.
001 
 
 
Pension Protection Act Zone Status
Red 
 
 
Veritiv's Contributions
0.5 
0.5 
0.5 
Surcharge Imposed
Yes 
 
 
Western Pennsylvania Teamsters and Employers Pension Plan
 
 
 
Multiemployer Plans [Line Items]
 
 
 
EIN Plan No.
256029946 
 
 
Pension Plan No.
001 
 
 
Pension Protection Act Zone Status
Red 
 
 
Veritiv's Contributions
0.2 
0.2 
0.2 
Surcharge Imposed
Yes 
 
 
Contributions for individually significant plans
 
 
 
Multiemployer Plans [Line Items]
 
 
 
Veritiv's Contributions
2.9 
2.5 
2.6 
Contributions to other multi-employer plans
 
 
 
Multiemployer Plans [Line Items]
 
 
 
Veritiv's Contributions
$ 0.3 
$ 0 
$ 0 
Employee Benefit Plans - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended
Dec. 31, 2014
plan
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Multiemployer plans, pension
Dec. 31, 2013
Multiemployer plans, pension
Dec. 31, 2012
Multiemployer plans, pension
Dec. 31, 2014
Multiemployer plans, pension
US employee collective bargaining agreement
Dec. 31, 2013
Multiemployer plans, pension
US employee collective bargaining agreement
Dec. 31, 2012
Multiemployer plans, pension
US employee collective bargaining agreement
Dec. 31, 2014
Western Conference of Teamsters Pension Trust Fund
Multiemployer plans, pension
collective_bargaining_unit
Dec. 31, 2013
Western Conference of Teamsters Pension Trust Fund
Multiemployer plans, pension
Dec. 31, 2012
Western Conference of Teamsters Pension Trust Fund
Multiemployer plans, pension
Dec. 31, 2014
U.S. Defined Benefit Pension Plan
Dec. 31, 2014
Canada Pension Plan
plan
Dec. 31, 2010
Canada Pension Plan
agreement
Dec. 31, 2014
International Paper
Dec. 31, 2013
International Paper
Dec. 31, 2012
International Paper
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
Other Accrued Liabilities
Dec. 31, 2014
Other Non-current Liabilities
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Contribution Plan, cost recognized
$ 5.6 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 8.9 
$ 16.7 
$ 17.3 
$ 2.4 
 
 
Maximum contractual term
15 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation expense
2.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation liability
20.9 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation current liability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.7 
 
Deferred Compensation non-current liability
18.2 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18.2 
Net pension and other post-employment benefit expense
8.0 
15.1 
12.7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of nonunion benefit plans
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
Number of union benefit plans
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
 
 
Number of active defined benefit plans
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of collective bargaining agreements freezing benefit plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
 
Estimated future employer contributions in 2015
 
 
 
 
 
 
 
 
 
 
 
 
0.1 
3.9 
 
 
 
 
 
 
 
Multiemployer plan, period contributions
 
 
 
$ 3.2 
$ 2.5 
$ 2.6 
$ 3.2 
$ 2.5 
$ 2.6 
$ 1.5 
$ 1.2 
$ 1.3 
 
 
 
 
 
 
 
 
 
Multiemployer plans, percentage of contributions
 
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of participating collective bargaining units
 
 
 
 
 
 
 
 
 
17 
 
 
 
 
 
 
 
 
 
 
 
Number of collective bargaining units under negotiations
 
 
 
 
 
 
 
 
 
5 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements - Narrative (Details) (UWW Holdings, Inc. XPEDX Merger, USD $)
In Millions, unless otherwise specified
0 Months Ended 6 Months Ended
Jul. 1, 2014
Dec. 31, 2014
Business Acquisition [Line Items]
 
 
Fair value of contingent liability associated with the Tax Receivable Agreement
$ 58.8 
 
Other Nonoperating Income (Expense)
 
 
Business Acquisition [Line Items]
 
 
Change in fair value adjustment
1.7 
 
Fair Value, Measurements, Recurring |
Level 3 |
Contingent Liability
 
 
Business Acquisition [Line Items]
 
 
Fair value discount rate
4.80% 
4.70% 
Change in fair value adjustment
 
$ 1.7 
Fair Value Measurements - Contingent Liability (Details) (Contingent Liability, UWW Holdings, Inc. XPEDX Merger, Fair Value, Measurements, Recurring, Level 3, USD $)
In Millions, unless otherwise specified
6 Months Ended
Dec. 31, 2014
Contingent Liability |
UWW Holdings, Inc. XPEDX Merger |
Fair Value, Measurements, Recurring |
Level 3
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
Beginning balance, July 1, 2014
$ 58.8 
Change in fair value adjustment
1.7 
Balance at December 31, 2014
$ 60.5 
Supplementary Financial Statement Information - Other Current Assets (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
Rebates receivable
$ 58.1 
$ 18.4 
Prepaid expenses
25.7 
5.6 
Other
25.5 
2.3 
Other current assets
$ 109.3 
$ 26.3 
Supplementary Financial Statement Information - Other Non-Current Assets (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Other Non-Current Assets:
 
 
Deferred financing costs
$ 19.9 
$ 0 
Investments in real estate joint ventures
5.7 
0 
Below market leasehold agreements
6.0 
0 
Other
12.3 
9.4 
Other non-current assets
$ 43.9 
$ 9.4 
Supplementary Financial Statement Information - Accrued Payroll and Benefits (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Accrued Payroll and Benefits:
 
 
Accrued payroll and related taxes
$ 32.4 
$ 11.2 
Accrued commissions
37.0 
25.9 
Other
41.7 
17.8 
Accrued payroll and benefits
$ 111.1 
$ 54.9 
Supplementary Financial Statement Information - Other Accrued Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Other Accrued Liabilities:
 
 
Accrued taxes
$ 15.3 
$ 6.4 
Accrued customer incentives
24.1 
12.8 
Accrued freight
10.1 
2.4 
Accrued professional fees
15.1 
0 
Other
35.9 
14.9 
Other accrued liabilities
$ 100.5 
$ 36.5 
Supplementary Financial Statement Information - Other Non-Current Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Other Non-Current Liabilities:
 
 
Contingent liability associated with Tax Receivable Agreement
$ 60.5 
$ 0 
Deferred compensation
18.2 
0 
Straight-line rent
9.4 
9.2 
Above market leasehold agreements
7.0 
0 
Other
12.1 
3.3 
Other non-current liabilities
$ 107.2 
$ 12.5 
Earnings Per Share - Narrative (Details)
3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Jul. 1, 2014
Jul. 1, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2013
UWW Holdings, Inc. XPEDX Merger
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity based awards outstanding (in shares)
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
Dilutive shares issued (in shares)
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
Dilutive shares granted (in shares)
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
Dilutive share impact (in shares)
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
Common stock, shares issued (in Shares)
16,000,000 
 
 
 
 
 
 
 
16,000,000 
 
 
16,000,000 
 
 
 
Common stock shares outstanding (in shares)
16,000,000 
 
 
 
 
 
 
 
16,000,000 
 
 
16,000,000 
 
 
 
Weighted-average shares outstanding - basic and diluted (in shares)
16,000,000 
16,000,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
12,080,000 
8,160,000 
8,160,000 
 
 
16,000,000 
16,000,000 
Business acquisition, equity issued, number of shares
 
 
 
 
 
 
 
 
 
 
 
 
7,840,000 
 
 
Earnings Per Share - Schedule of Earnings Per Share Basic and Diluated (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Jun. 30, 2014
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
$ (14.0)
$ (14.0)
$ 2.9 
$ 5.6 
$ (2.0)
$ 5.2 
$ (2.3)
$ (0.9)
 
 
$ (19.5)
$ 0 
$ 14.4 
Income (loss) from discontinued operations, net of income taxes
0 
0 
0 
(0.1)
0.2 
(0.1)
(0.1)
0.2 
 
 
(0.1)
0.2 
(10.0)
Net income (loss)
$ (14.0)
$ (14.0)
$ 2.9 
$ 5.5 
$ (1.8)
$ 5.1 
$ (2.4)
$ (0.7)
$ (28.0)
$ 8.4 
$ (19.6)
$ 0.2 
$ 4.4 
Weighted-average shares outstanding - basic and diluted (in shares)
16,000,000 
16,000,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
 
 
12,080,000 
8,160,000 
8,160,000 
Earnings (loss) per share: Basic and Diluted
 
 
 
 
 
 
 
 
 
 
 
 
 
Continuing operations (in dollars per share)
$ (0.88)
$ (0.88)
$ 0.36 
$ 0.69 
$ (0.25)
$ 0.64 
$ (0.28)
$ (0.11)
 
 
$ (1.61)
$ 0.00 
$ 1.76 
Discontinued operations (in dollars per share)
$ 0.00 
$ 0.00 
$ 0.00 
$ (0.01)
$ 0.02 
$ (0.01)
$ (0.01)
$ 0.02 
 
 
$ (0.01)
$ 0.02 
$ (1.23)
Basic and diluted earnings (loss) per share (in dollars per share)
$ (0.88)
$ (0.88)
$ 0.36 
$ 0.68 
$ (0.23)
$ 0.63 
$ (0.29)
$ (0.09)
 
 
$ (1.62)
$ 0.02 
$ 0.53 
Shareholders' Equity - Narrative (Details) (USD $)
12 Months Ended 12 Months Ended 0 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Jul. 1, 2014
Dec. 31, 2014
Common Stock
Jul. 1, 2014
International Paper Shareholders
Common Stock
Jul. 1, 2014
UWW Holdings, Inc. XPEDX Merger
Class of Stock [Line Items]
 
 
 
 
 
 
 
Common stock, shares authorized (in Shares)
100,000,000 
 
 
 
 
 
 
Common stock par value (in Dollars per share)
$ 0.01 
 
 
 
 
 
 
Preferred stock, shares authorized (in Shares)
10,000,000 
 
 
 
 
 
 
Preferred stock par value (in Dollars per share)
$ 0.01 
 
 
 
 
 
 
Conversion of parent company investment in connection with Spin-off (in shares)
 
 
 
 
8,160,000.00 
8,160,000 
 
Business acquisition, equity issued, number of shares
 
 
 
 
 
 
7,840,000 
Common stock, shares issued (in Shares)
16,000,000 
 
 
16,000,000 
 
 
 
Common stock votes per share owned (in votes per share)
1 
 
 
 
 
 
 
Common stock shares outstanding (in shares)
16,000,000 
 
 
16,000,000 
 
 
 
Preferred stock, shares outstanding (in shares)
0 
 
 
 
 
 
 
Preferred stock, shares issued (in Shares)
0 
 
 
 
 
 
 
Reclassifications out of AOCI
$ 0 
$ 0 
$ 0 
 
 
 
 
Shareholders' Equity - Schedule of Other Comprehensive Income Included (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Equity [Abstract]
 
 
Foreign currency translation adjustments
$ (14.7)
$ (4.7)
Adjustments to pension and other benefit liabilities, net of tax
(7.4)
0 
Accumulated other comprehensive loss
$ (22.1)
$ (4.7)
Equity-Based Incentive Plans - Narrative (Details) (USD $)
12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Omnibus Incentive Plan
Jan. 1, 2015
Restricted Stock Units (RSUs)
Subsequent Event [Member]
Jan. 1, 2015
Performance Share Units (PSUs)
Subsequent Event [Member]
Dec. 31, 2014
Restricted Stock Units (RSUs) & Performance Share Units (PSUs)
Dec. 31, 2014
Deferred Share Units
Non-Employee Director
Dec. 31, 2014
Deferred Share Units
Non-Employee Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
Number of shares authorized
 
 
 
2,080,000 
 
 
 
 
 
Deferred compensation number of shares issued
 
 
 
 
 
 
 
16,064 
 
Deferred compensation share-based compensation expense
 
 
 
 
 
 
 
 
$ 800,000 
Share-based compensation, grants in period
 
 
 
 
63,217 
252,930 
 
 
 
Share-based compensation, award vesting period
 
 
 
 
3 years 
3 years 
 
 
 
Stock-based compensation expense
$ 4,300,000 
$ 15,400,000 
$ 13,100,000 
 
 
 
$ 0 
 
 
Equity-Based Incentive Plans - Stock Based Compensation Expense (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Total stock-based compensation expense
$ 4.3 
$ 15.4 
$ 13.1 
Income tax benefit related to stock-based compensation
$ 1.3 
$ 8.5 
$ 6.2 
Commitments and Contingencies Disclosure - Narrative (Details)
12 Months Ended
Dec. 31, 2013
state
Loss Contingencies [Line Items]
 
Additional states joining escheat audit
7 
Minimum
 
Loss Contingencies [Line Items]
 
Escheat audit period
2 years 
Maximum
 
Loss Contingencies [Line Items]
 
Escheat audit period
4 years 
Discontinued Operations - Results of Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Discontinued Operations and Disposal Groups [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss from operations
 
 
 
 
 
 
 
 
$ (0.1)
$ (0.5)
$ (0.4)
Restructuring and disposal income
 
 
 
 
 
 
 
 
0 
0.7 
(10.1)
Income (loss) from discontinued operations, net of income taxes
0 
0 
0 
(0.1)
0.2 
(0.1)
(0.1)
0.2 
(0.1)
0.2 
(10.0)
Tax effect of discontinued operations
 
 
 
 
 
 
 
 
$ 0 
$ 0 
$ 0.5 
Segment Information - Net Sales by Reportable Segment (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
segment
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Jun. 30, 2014
segment
Dec. 31, 2014
segment
Dec. 31, 2013
Dec. 31, 2012
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Number of reportable segments
 
4 
 
 
 
 
 
 
3 
4 
 
 
Segment split number of segments
 
2 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 2,379.8 
$ 2,390.3 
$ 1,329.0 
$ 1,307.4 
$ 1,418.3 
$ 1,442.8 
$ 1,402.9 
$ 1,388.4 
 
$ 7,406.5 
$ 5,652.4 
$ 6,012.0 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
122.0 
74.2 
89.5 
Depreciation and amortization
 
 
 
 
 
 
 
 
 
37.6 
17.1 
14.0 
Restructuring charges
 
 
 
 
 
 
 
 
 
4.0 
37.9 
35.1 
Operating Segments |
Print
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
2,956.1 
2,399.6 
2,651.2 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
55.4 
43.9 
53.0 
Depreciation and amortization
 
 
 
 
 
 
 
 
 
9.7 
4.4 
6.1 
Restructuring charges
 
 
 
 
 
 
 
 
 
1.5 
15.7 
20.4 
Operating Segments |
Publishing
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
1,075.5 
807.9 
822.7 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
27.1 
16.4 
13.8 
Depreciation and amortization
 
 
 
 
 
 
 
 
 
1.4 
0.6 
0.6 
Restructuring charges
 
 
 
 
 
 
 
 
 
0 
1.1 
0.3 
Operating Segments |
Packaging
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
2,259.4 
1,600.3 
1,593.9 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
157.0 
117.9 
123.6 
Depreciation and amortization
 
 
 
 
 
 
 
 
 
9.7 
2.6 
2.8 
Restructuring charges
 
 
 
 
 
 
 
 
 
1.4 
11.7 
7.1 
Operating Segments |
Facility Solutions
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
1,070.3 
844.6 
944.2 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
33.6 
14.4 
19.2 
Depreciation and amortization
 
 
 
 
 
 
 
 
 
4.6 
1.5 
1.8 
Restructuring charges
 
 
 
 
 
 
 
 
 
0.6 
7.4 
5.0 
Corporate and Other
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
45.2 
0 
0 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
(151.1)
(118.4)
(120.1)
Depreciation and amortization
 
 
 
 
 
 
 
 
 
12.2 
8.0 
2.7 
Restructuring charges
 
 
 
 
 
 
 
 
 
$ 0.5 
$ 2.0 
$ 2.3 
Segment Information - Operating Profit by Reportable Segment (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Segment Reporting [Abstract]
 
 
 
Income (loss) from continuing operations before income taxes
$ (21.6)
$ 0.4 
$ 23.5 
Interest expense, net
14.0 
0 
0 
Depreciation and amortization
37.6 
17.1 
14.0 
Restructuring charges
4.0 
37.9 
35.1 
Non-restructuring stock-based compensation
4.0 
13.1 
13.1 
LIFO expense
6.3 
3.4 
1.0 
Non-restructuring severance charges
2.6 
2.3 
0.6 
Merger and integration expenses
75.1 
0 
0 
Fair value adjustment on TRA contingent liability
1.7 
0 
0 
Other
(1.7)
0 
2.2 
Total Adjusted EBITDA
$ 122.0 
$ 74.2 
$ 89.5 
Segment Information - Assets by Reportable Segment (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting Information [Line Items]
 
 
Total assets
$ 2,574.5 
$ 1,256.9 
Operating Segments |
Print
 
 
Segment Reporting Information [Line Items]
 
 
Total assets
949.1 
517.4 
Operating Segments |
Publishing
 
 
Segment Reporting Information [Line Items]
 
 
Total assets
207.6 
79.8 
Operating Segments |
Packaging
 
 
Segment Reporting Information [Line Items]
 
 
Total assets
797.6 
398.7 
Operating Segments |
Facility Solutions
 
 
Segment Reporting Information [Line Items]
 
 
Total assets
381.3 
201.7 
Corporate and Other
 
 
Segment Reporting Information [Line Items]
 
 
Total assets
$ 238.9 
$ 59.3 
Segment Information - Sales and Property and Equipment by Geographic Area (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 2,379.8 
$ 2,390.3 
$ 1,329.0 
$ 1,307.4 
$ 1,418.3 
$ 1,442.8 
$ 1,402.9 
$ 1,388.4 
$ 7,406.5 
$ 5,652.4 
$ 6,012.0 
Property and equipment, net
377.4 
 
 
 
107.1 
 
 
 
377.4 
107.1 
 
U.S.
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
6,848.9 
5,508.5 
5,830.9 
Property and equipment, net
355.0 
 
 
 
106.1 
 
 
 
355.0 
106.1 
 
Canada
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
408.2 
25.2 
32.6 
Property and equipment, net
18.7 
 
 
 
0 
 
 
 
18.7 
0 
 
Rest of world
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
149.4 
118.7 
148.5 
Property and equipment, net
$ 3.7 
 
 
 
$ 1.0 
 
 
 
$ 3.7 
$ 1.0 
 
Quarterly Data (Unaudited) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Jun. 30, 2014
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 2,379.8 
$ 2,390.3 
$ 1,329.0 
$ 1,307.4 
$ 1,418.3 
$ 1,442.8 
$ 1,402.9 
$ 1,388.4 
 
 
$ 7,406.5 
$ 5,652.4 
$ 6,012.0 
Cost of products sold (including purchases from related parties of $412.6, $604.4 and $639.0 for 2014, 2013 and 2012, respectively) (exclusive of depreciation and amortization shown separately below)
1,988.6 
1,987.1 
1,116.7 
1,088.5 
1,191.3 
1,214.1 
1,172.1 
1,159.3 
 
 
6,180.9 
4,736.8 
5,036.7 
Income (loss) from continuing operations
(14.0)
(14.0)
2.9 
5.6 
(2.0)
5.2 
(2.3)
(0.9)
 
 
(19.5)
0 
14.4 
Income (loss) from discontinued operations, net of income taxes
0 
0 
0 
(0.1)
0.2 
(0.1)
(0.1)
0.2 
 
 
(0.1)
0.2 
(10.0)
Net income (loss)
$ (14.0)
$ (14.0)
$ 2.9 
$ 5.5 
$ (1.8)
$ 5.1 
$ (2.4)
$ (0.7)
$ (28.0)
$ 8.4 
$ (19.6)
$ 0.2 
$ 4.4 
Weighted-average shares outstanding - basic and diluted (in shares)
16,000,000 
16,000,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
8,160,000 
 
 
12,080,000 
8,160,000 
8,160,000 
Earnings (loss) per share: Basic and Diluted
 
 
 
 
 
 
 
 
 
 
 
 
 
Continuing operations (in dollars per share)
$ (0.88)
$ (0.88)
$ 0.36 
$ 0.69 
$ (0.25)
$ 0.64 
$ (0.28)
$ (0.11)
 
 
$ (1.61)
$ 0.00 
$ 1.76 
Discontinued operations (in dollars per share)
$ 0.00 
$ 0.00 
$ 0.00 
$ (0.01)
$ 0.02 
$ (0.01)
$ (0.01)
$ 0.02 
 
 
$ (0.01)
$ 0.02 
$ (1.23)
Basic and diluted earnings (loss) per share (in dollars per share)
$ (0.88)
$ (0.88)
$ 0.36 
$ 0.68 
$ (0.23)
$ 0.63 
$ (0.29)
$ (0.09)
 
 
$ (1.62)
$ 0.02 
$ 0.53 
Quarterly Data (Unaudited) - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Veritiv Restructuring Plan
Dec. 31, 2014
Veritiv Restructuring Plan
Dec. 31, 2013
xpedx Restructuring Plan
Sep. 30, 2013
xpedx Restructuring Plan
Jun. 30, 2013
xpedx Restructuring Plan
Mar. 31, 2013
xpedx Restructuring Plan
Dec. 31, 2014
xpedx Restructuring Plan
Dec. 31, 2013
xpedx Restructuring Plan
Dec. 31, 2012
xpedx Restructuring Plan
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Sep. 30, 2014
UWW Holdings, Inc. XPEDX Merger
Dec. 31, 2014
UWW Holdings, Inc. XPEDX Merger
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Merger and integration expenses
$ 75.1 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
$ 18.2 
$ 54.8 
$ 75.1 
Restructuring charges
$ 4.0 
$ 37.9 
$ 35.1 
$ 5.1 
$ 5.1 
$ 7.5 
$ 6.0 
$ 17.3 
$ 7.1 
$ (1.1)
$ 37.9 
$ 35.1