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Purchase price: | (in millions) | ||
Fair value of Veritiv shares issued in the Merger | $ | 284.7 | |
Cash payments associated with customary working capital and net indebtedness adjustments | 39.1 | ||
Fair value of contingent liability associated with the Tax Receivable Agreement | 59.4 | ||
Total purchase price | $ | 383.2 |
Final Allocation: | (in millions) | ||
Cash | $ | 70.9 | |
Accounts receivable | 448.4 | ||
Inventories | 353.8 | ||
Deferred income tax assets | 72.0 | ||
Property and equipment | 299.0 | ||
Goodwill | 25.7 | ||
Other intangible assets | 31.5 | ||
Other current and non-current assets (including below market leasehold agreements) | 61.8 | ||
Accounts payable | (284.2 | ) | |
Long-term debt (including equipment capital leases) | (313.2 | ) | |
Financing obligations to related party | (233.1 | ) | |
Defined benefit pension obligations | (30.3 | ) | |
Other current and non-current liabilities (including above market leasehold agreements) | (119.1 | ) | |
Total purchase price | $ | 383.2 |
Value (in millions) | Estimated Weighted Average Useful Life (in years) | ||||
Customer relationships | $ | 24.3 | 14.8 | ||
Trademarks/Trade names | 4.1 | 3.6 | |||
Non-compete agreements | 3.1 | 1.0 | |||
Total identifiable intangible assets acquired | $ | 31.5 |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Legal, consulting and other professional fees | $ | 2.5 | $ | 2.1 | $ | 5.4 | $ | 2.1 | |||||||
Retention compensation | 3.1 | — | 6.6 | — | |||||||||||
Information technology conversion costs | 2.2 | — | 4.3 | — | |||||||||||
Rebranding | 1.7 | — | 2.5 | — | |||||||||||
Other | 0.8 | — | 1.5 | — | |||||||||||
Total merger and integration expenses | $ | 10.3 | $ | 2.1 | $ | 20.3 | $ | 2.1 |
(in millions) | Severance and Related Costs | Other Direct Costs | Total | ||||||||
Liability at December 31, 2014 | $ | 3.7 | $ | 0.2 | $ | 3.9 | |||||
Costs incurred | 1.9 | 1.5 | 3.4 | ||||||||
Payments | (2.7 | ) | (0.4 | ) | (3.1 | ) | |||||
Liability at March 31, 2015 | 2.9 | 1.3 | 4.2 | ||||||||
Costs incurred | 1.0 | 1.2 | 2.2 | ||||||||
Payments | (1.1 | ) | (0.7 | ) | (1.8 | ) | |||||
Liability at June 30, 2015 | $ | 2.8 | $ | 1.8 | $ | 4.6 |
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(in millions) | June 30, 2015 | December 31, 2014 | |||||
ABL Facility | $ | 792.6 | $ | 847.8 | |||
Equipment capital lease obligations | 9.0 | 11.0 | |||||
Total debt | 801.6 | 858.8 | |||||
Less: current portion of long-term debt | (3.5 | ) | (3.8 | ) | |||
Long-term debt, net of current maturities | $ | 798.1 | $ | 855.0 |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Income from continuing operations before income taxes | $ | 10.8 | $ | 5.0 | $ | 8.7 | $ | 14.3 | |||||||
Income tax expense | 6.5 | 2.1 | 6.6 | 5.8 | |||||||||||
Effective tax rate | 60.2 | % | 42.7 | % | 75.9 | % | 40.8 | % |
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Six Months Ended June 30, | ||||
(in millions) | 2014 | |||
Intercompany sales and purchases, net | $ | 255.4 | ||
Cash pooling and general financing activities | (322.5 | ) | ||
Corporate allocations including income taxes | 34.7 | |||
Total net transfers to International Paper | $ | (32.4 | ) |
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Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | ||||||||||||||
(in millions) | U.S. | Canada | U.S. | Canada | |||||||||||
Components of net periodic benefit cost (credit): | |||||||||||||||
Service cost | $ | 0.5 | $ | 0.0 | $ | 0.9 | $ | 0.1 | |||||||
Interest cost | 0.9 | 0.9 | 1.7 | 1.7 | |||||||||||
Expected return on plan assets | (1.3 | ) | (0.9 | ) | (2.7 | ) | (1.8 | ) | |||||||
Net periodic benefit cost (credit) | $ | 0.1 | $ | 0.0 | $ | (0.1 | ) | $ | 0.0 |
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(in millions) | Contingent Liability | |||
Balance at December 31, 2014 | $ | 60.5 | ||
Purchase accounting adjustment | 0.6 | |||
Change in fair value adjustment recorded in other expense (income), net | 1.3 | |||
Balance at March 31, 2015 | $ | 62.4 | ||
Change in fair value adjustment recorded in other expense (income), net | (1.7 | ) | ||
Balance at June 30, 2015 | $ | 60.7 |
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(in millions) | June 30, 2015 | December 31, 2014 | |||||
Foreign currency translation adjustments | $ | (21.2 | ) | $ | (14.7 | ) | |
Adjustments to pension and other benefit liabilities, net of tax | (7.4 | ) | (7.4 | ) | |||
Total accumulated other comprehensive loss | $ | (28.6 | ) | $ | (22.1 | ) |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in millions) | 2014 | 2014 | |||||
Total stock-based compensation expense | $ | 3.2 | $ | 4.3 | |||
Income tax benefit related to stock-based compensation | $ | 0.3 | $ | 1.3 |
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(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Three Months Ended June 30, 2015 | |||||||||||||||||||||||
Net sales | $ | 812.5 | $ | 294.4 | $ | 699.6 | $ | 324.5 | $ | 28.3 | $ | 2,159.3 | |||||||||||
Adjusted EBITDA | 18.4 | 7.4 | 51.8 | 10.6 | (47.5 | ) | 40.7 | ||||||||||||||||
Depreciation and amortization | 3.4 | 1.0 | 4.0 | 2.1 | 4.8 | 15.3 | |||||||||||||||||
Restructuring charges | 0.8 | — | 0.5 | 0.4 | 0.5 | 2.2 | |||||||||||||||||
Three Months Ended June 30, 2014 | |||||||||||||||||||||||
Net sales | 546.3 | 188.0 | 410.3 | 184.4 | — | 1,329.0 | |||||||||||||||||
Adjusted EBITDA | 9.3 | 3.7 | 25.7 | 2.8 | (23.9 | ) | 17.6 | ||||||||||||||||
Depreciation and amortization | 1.2 | 0.2 | 0.7 | 0.4 | 1.8 | 4.3 | |||||||||||||||||
Restructuring income | (0.3 | ) | — | (0.3 | ) | (0.3 | ) | — | (0.9 | ) | |||||||||||||
Six Months Ended June 30, 2015 | |||||||||||||||||||||||
Net sales | 1,633.2 | 603.9 | 1,374.8 | 633.6 | 51.7 | 4,297.2 | |||||||||||||||||
Adjusted EBITDA | 33.9 | 13.8 | 97.5 | 17.5 | (93.6 | ) | 69.1 | ||||||||||||||||
Depreciation and amortization | 6.8 | 1.6 | 7.8 | 3.9 | 8.7 | 28.8 | |||||||||||||||||
Restructuring charges | 1.6 | — | 1.4 | 1.3 | 1.3 | 5.6 | |||||||||||||||||
Six Months Ended June 30, 2014 | |||||||||||||||||||||||
Net sales | 1,091.2 | 377.1 | 804.5 | 363.6 | — | 2,636.4 | |||||||||||||||||
Adjusted EBITDA | 17.6 | 7.4 | 51.3 | 2.9 | (49.0 | ) | 30.2 | ||||||||||||||||
Depreciation and amortization | 2.4 | 0.3 | 1.5 | 0.9 | 3.8 | 8.9 | |||||||||||||||||
Restructuring income | (0.4 | ) | — | (0.2 | ) | (0.5 | ) | — | (1.1 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Income from continuing operations before income taxes | $ | 10.8 | $ | 5.0 | $ | 8.7 | $ | 14.3 | |||||||
Interest expense, net | 6.4 | — | 12.8 | — | |||||||||||
Depreciation and amortization | 15.3 | 4.3 | 28.8 | 8.9 | |||||||||||
Restructuring charges (income) | 2.2 | (0.9 | ) | 5.6 | (1.1 | ) | |||||||||
Non-restructuring stock-based compensation | 0.9 | 3.0 | 1.9 | 4.0 | |||||||||||
LIFO expense (income) | (4.8 | ) | 3.4 | (10.0 | ) | (0.3 | ) | ||||||||
Non-restructuring severance charges | 1.0 | 0.7 | 1.4 | 2.4 | |||||||||||
Merger and integration expenses | 10.3 | 2.1 | 20.3 | 2.1 | |||||||||||
Fair value adjustments on TRA contingent liability | (1.7 | ) | — | (0.4 | ) | — | |||||||||
Other | 0.3 | — | — | (0.1 | ) | ||||||||||
Total Adjusted EBITDA | $ | 40.7 | $ | 17.6 | $ | 69.1 | $ | 30.2 |
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Purchase price: | (in millions) | ||
Fair value of Veritiv shares issued in the Merger | $ | 284.7 | |
Cash payments associated with customary working capital and net indebtedness adjustments | 39.1 | ||
Fair value of contingent liability associated with the Tax Receivable Agreement | 59.4 | ||
Total purchase price | $ | 383.2 |
Final Allocation: | (in millions) | ||
Cash | $ | 70.9 | |
Accounts receivable | 448.4 | ||
Inventories | 353.8 | ||
Deferred income tax assets | 72.0 | ||
Property and equipment | 299.0 | ||
Goodwill | 25.7 | ||
Other intangible assets | 31.5 | ||
Other current and non-current assets (including below market leasehold agreements) | 61.8 | ||
Accounts payable | (284.2 | ) | |
Long-term debt (including equipment capital leases) | (313.2 | ) | |
Financing obligations to related party | (233.1 | ) | |
Defined benefit pension obligations | (30.3 | ) | |
Other current and non-current liabilities (including above market leasehold agreements) | (119.1 | ) | |
Total purchase price | $ | 383.2 |
Value (in millions) | Estimated Weighted Average Useful Life (in years) | ||||
Customer relationships | $ | 24.3 | 14.8 | ||
Trademarks/Trade names | 4.1 | 3.6 | |||
Non-compete agreements | 3.1 | 1.0 | |||
Total identifiable intangible assets acquired | $ | 31.5 |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Legal, consulting and other professional fees | $ | 2.5 | $ | 2.1 | $ | 5.4 | $ | 2.1 | |||||||
Retention compensation | 3.1 | — | 6.6 | — | |||||||||||
Information technology conversion costs | 2.2 | — | 4.3 | — | |||||||||||
Rebranding | 1.7 | — | 2.5 | — | |||||||||||
Other | 0.8 | — | 1.5 | — | |||||||||||
Total merger and integration expenses | $ | 10.3 | $ | 2.1 | $ | 20.3 | $ | 2.1 |
(in millions) | Severance and Related Costs | Other Direct Costs | Total | ||||||||
Liability at December 31, 2014 | $ | 3.7 | $ | 0.2 | $ | 3.9 | |||||
Costs incurred | 1.9 | 1.5 | 3.4 | ||||||||
Payments | (2.7 | ) | (0.4 | ) | (3.1 | ) | |||||
Liability at March 31, 2015 | 2.9 | 1.3 | 4.2 | ||||||||
Costs incurred | 1.0 | 1.2 | 2.2 | ||||||||
Payments | (1.1 | ) | (0.7 | ) | (1.8 | ) | |||||
Liability at June 30, 2015 | $ | 2.8 | $ | 1.8 | $ | 4.6 |
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(in millions) | June 30, 2015 | December 31, 2014 | |||||
ABL Facility | $ | 792.6 | $ | 847.8 | |||
Equipment capital lease obligations | 9.0 | 11.0 | |||||
Total debt | 801.6 | 858.8 | |||||
Less: current portion of long-term debt | (3.5 | ) | (3.8 | ) | |||
Long-term debt, net of current maturities | $ | 798.1 | $ | 855.0 |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Income from continuing operations before income taxes | $ | 10.8 | $ | 5.0 | $ | 8.7 | $ | 14.3 | |||||||
Income tax expense | 6.5 | 2.1 | 6.6 | 5.8 | |||||||||||
Effective tax rate | 60.2 | % | 42.7 | % | 75.9 | % | 40.8 | % |
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Six Months Ended June 30, | ||||
(in millions) | 2014 | |||
Intercompany sales and purchases, net | $ | 255.4 | ||
Cash pooling and general financing activities | (322.5 | ) | ||
Corporate allocations including income taxes | 34.7 | |||
Total net transfers to International Paper | $ | (32.4 | ) |
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Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | ||||||||||||||
(in millions) | U.S. | Canada | U.S. | Canada | |||||||||||
Components of net periodic benefit cost (credit): | |||||||||||||||
Service cost | $ | 0.5 | $ | 0.0 | $ | 0.9 | $ | 0.1 | |||||||
Interest cost | 0.9 | 0.9 | 1.7 | 1.7 | |||||||||||
Expected return on plan assets | (1.3 | ) | (0.9 | ) | (2.7 | ) | (1.8 | ) | |||||||
Net periodic benefit cost (credit) | $ | 0.1 | $ | 0.0 | $ | (0.1 | ) | $ | 0.0 |
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(in millions) | Contingent Liability | |||
Balance at December 31, 2014 | $ | 60.5 | ||
Purchase accounting adjustment | 0.6 | |||
Change in fair value adjustment recorded in other expense (income), net | 1.3 | |||
Balance at March 31, 2015 | $ | 62.4 | ||
Change in fair value adjustment recorded in other expense (income), net | (1.7 | ) | ||
Balance at June 30, 2015 | $ | 60.7 |
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(in millions) | June 30, 2015 | December 31, 2014 | |||||
Foreign currency translation adjustments | $ | (21.2 | ) | $ | (14.7 | ) | |
Adjustments to pension and other benefit liabilities, net of tax | (7.4 | ) | (7.4 | ) | |||
Total accumulated other comprehensive loss | $ | (28.6 | ) | $ | (22.1 | ) |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in millions) | 2014 | 2014 | |||||
Total stock-based compensation expense | $ | 3.2 | $ | 4.3 | |||
Income tax benefit related to stock-based compensation | $ | 0.3 | $ | 1.3 |
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(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Three Months Ended June 30, 2015 | |||||||||||||||||||||||
Net sales | $ | 812.5 | $ | 294.4 | $ | 699.6 | $ | 324.5 | $ | 28.3 | $ | 2,159.3 | |||||||||||
Adjusted EBITDA | 18.4 | 7.4 | 51.8 | 10.6 | (47.5 | ) | 40.7 | ||||||||||||||||
Depreciation and amortization | 3.4 | 1.0 | 4.0 | 2.1 | 4.8 | 15.3 | |||||||||||||||||
Restructuring charges | 0.8 | — | 0.5 | 0.4 | 0.5 | 2.2 | |||||||||||||||||
Three Months Ended June 30, 2014 | |||||||||||||||||||||||
Net sales | 546.3 | 188.0 | 410.3 | 184.4 | — | 1,329.0 | |||||||||||||||||
Adjusted EBITDA | 9.3 | 3.7 | 25.7 | 2.8 | (23.9 | ) | 17.6 | ||||||||||||||||
Depreciation and amortization | 1.2 | 0.2 | 0.7 | 0.4 | 1.8 | 4.3 | |||||||||||||||||
Restructuring income | (0.3 | ) | — | (0.3 | ) | (0.3 | ) | — | (0.9 | ) | |||||||||||||
Six Months Ended June 30, 2015 | |||||||||||||||||||||||
Net sales | 1,633.2 | 603.9 | 1,374.8 | 633.6 | 51.7 | 4,297.2 | |||||||||||||||||
Adjusted EBITDA | 33.9 | 13.8 | 97.5 | 17.5 | (93.6 | ) | 69.1 | ||||||||||||||||
Depreciation and amortization | 6.8 | 1.6 | 7.8 | 3.9 | 8.7 | 28.8 | |||||||||||||||||
Restructuring charges | 1.6 | — | 1.4 | 1.3 | 1.3 | 5.6 | |||||||||||||||||
Six Months Ended June 30, 2014 | |||||||||||||||||||||||
Net sales | 1,091.2 | 377.1 | 804.5 | 363.6 | — | 2,636.4 | |||||||||||||||||
Adjusted EBITDA | 17.6 | 7.4 | 51.3 | 2.9 | (49.0 | ) | 30.2 | ||||||||||||||||
Depreciation and amortization | 2.4 | 0.3 | 1.5 | 0.9 | 3.8 | 8.9 | |||||||||||||||||
Restructuring income | (0.4 | ) | — | (0.2 | ) | (0.5 | ) | — | (1.1 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Income from continuing operations before income taxes | $ | 10.8 | $ | 5.0 | $ | 8.7 | $ | 14.3 | |||||||
Interest expense, net | 6.4 | — | 12.8 | — | |||||||||||
Depreciation and amortization | 15.3 | 4.3 | 28.8 | 8.9 | |||||||||||
Restructuring charges (income) | 2.2 | (0.9 | ) | 5.6 | (1.1 | ) | |||||||||
Non-restructuring stock-based compensation | 0.9 | 3.0 | 1.9 | 4.0 | |||||||||||
LIFO expense (income) | (4.8 | ) | 3.4 | (10.0 | ) | (0.3 | ) | ||||||||
Non-restructuring severance charges | 1.0 | 0.7 | 1.4 | 2.4 | |||||||||||
Merger and integration expenses | 10.3 | 2.1 | 20.3 | 2.1 | |||||||||||
Fair value adjustments on TRA contingent liability | (1.7 | ) | — | (0.4 | ) | — | |||||||||
Other | 0.3 | — | — | (0.1 | ) | ||||||||||
Total Adjusted EBITDA | $ | 40.7 | $ | 17.6 | $ | 69.1 | $ | 30.2 |
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