|
|
|
|
|
|
|
|
• | 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. These payments have been reflected by Veritiv as a reduction to equity. Subsequent to September 30, 2014, the working capital and transaction expense-related adjustments were finalized, resulting in an additional cash payment of $30.7 million to International Paper. This payment will be reflected as a reduction to equity in the fourth quarter of 2014. |
• | UWW Holdings, LLC, the sole shareholder of UWW Holdings, Inc., received 7,840,000 shares of Veritiv common stock for all outstanding shares of UWW Holdings, Inc. common stock that it held on the Distribution Date, in a private placement transaction, |
• | Veritiv and UWW Holdings, LLC entered into a registration rights agreement (the "Registration Rights Agreement") that provides UWW Holdings, LLC with certain demand registration rights and piggyback registration rights. The agreement also entitles UWW Holdings, LLC to transfer its Veritiv common stock to one or more of its affiliates or equity-holders, and UWW Holdings, LLC may exercise registration rights on behalf of such transferees if such transferees become a party to the Registration Rights Agreement, |
• | Veritiv and UWW Holdings, LLC entered into a tax receivable agreement (the "Tax Receivable Agreement") that sets forth the terms by which Veritiv generally will be obligated to pay UWW Holdings, LLC an amount equal to 85% of the U.S. federal, state and Canadian income tax savings that Veritiv actually realizes as a result of the utilization of Unisource’s net operating losses attributable to taxable periods prior to the date of the Merger, and |
• | UWW Holdings, LLC 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. The $33.9 million payment was recorded as part of the purchase price consideration for Unisource, and the $4.7 million payment was recorded within merger and integration expenses in the Condensed Consolidated and Combined Statements of Operations. |
|
Preliminary estimated purchase price: | (in millions) | ||
Fair value of Veritiv shares transferred | $ | 284.7 | |
Cash payment associated with customary working capital and net indebtedness adjustments | 33.9 | ||
Fair value of contingent liability associated with the Tax Receivable Agreement | 60.9 | ||
Total preliminary estimated purchase price | $ | 379.5 |
Preliminary Allocation: | (in millions) | ||
Cash | $ | 70.9 | |
Accounts receivable | 448.4 | ||
Inventories | 351.9 | ||
Deferred income tax assets | 79.8 | ||
Property and equipment | 301.2 | ||
Goodwill | 28.7 | ||
Other intangible assets | 29.9 | ||
Other current and non-current assets (including below market leasehold agreements) | 61.7 | ||
Accounts payable | (263.8 | ) | |
Long-term debt (including equipment capital leases) | (333.2 | ) | |
Financing obligations to related party | (238.2 | ) | |
Defined benefit pension obligations | (31.0 | ) | |
Other current and non-current liabilities (including above market leasehold agreements) | (126.8 | ) | |
Total purchase price | $ | 379.5 |
Value (in millions) | Estimated Useful Life (in years) | ||||
Customer relationships | $ | 23.1 | 10 — 12 | ||
Trademarks/Trade names | 3.9 | 1 — 5 | |||
Non-compete agreements | 2.9 | 1 | |||
Total identifiable intangible assets acquired | $ | 29.9 |
(Unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(in millions, except share and per share data) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Net sales | $ | 2,390.3 | $ | 2,471.8 | $ | 6,934.2 | $ | 7,246.8 | |||||||
Net income(1) | $ | 21.2 | $ | 244.7 | $ | 22.8 | $ | 189.2 | |||||||
Earnings per share - basic and diluted | $ | 1.33 | $ | 15.29 | $ | 1.43 | $ | 11.83 | |||||||
Weighted-average shares outstanding - basic and diluted | 16,000,000 | 16,000,000 | 16,000,000 | 16,000,000 |
• | Merger and integration expenses: Merger and integration expenses of $54.8 million and $3.8 million incurred during the three months ended September 30, 2014 and 2013, respectively, and $56.9 million incurred during the nine months ended September 30, 2014 have been eliminated. Pro forma net income for the nine months ended September 30, 2013 includes merger and integration expenses of $76.3 million. |
• | Incremental depreciation and amortization expense: Pro forma net income for the three months ended September 30, 2013 and nine months ended September 30, 2014 and 2013 includes $3.2 million, $5.2 million and $9.8 million, respectively, of incremental depreciation and amortization expense related to the fair value adjustments to property and equipment and identifiable intangible assets. |
|
(in millions) | Total | ||
Liability at December 31, 2013 | $ | 7.7 | |
Additional provision | 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 September 30, 2014 | $ | — |
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Loss from operations | $ | — | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.3 | ) | ||||
Restructuring and disposal income | — | — | — | 0.3 | |||||||||||
Loss from discontinued operations | $ | — | $ | (0.1 | ) | $ | (0.1 | ) | $ | — |
|
(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Balance at December 31, 2013 | $ | — | $ | — | $ | 26.4 | $ | — | $ | — | $ | 26.4 | |||||||||||
Additions to goodwill | — | — | 22.7 | 1.9 | 4.1 | 28.7 | |||||||||||||||||
Balance at September 30, 2014 | $ | — | $ | — | $ | 49.1 | $ | 1.9 | $ | 4.1 | $ | 55.1 |
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||
(in millions) | Estimated Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||
Customer relationships | 1 — 12 | $ | 53.8 | $ | 23.0 | $ | 30.8 | $ | 30.7 | $ | 21.5 | $ | 9.2 | ||||||||||||
Trademarks/Trade names | 1 — 11 | 4.1 | 0.6 | 3.5 | 0.2 | 0.1 | 0.1 | ||||||||||||||||||
Non-compete agreements | 1 | 2.9 | 0.7 | 2.2 | — | — | — | ||||||||||||||||||
Total | $ | 60.8 | $ | 24.3 | $ | 36.5 | $ | 30.9 | $ | 21.6 | $ | 9.3 |
Year-Ended | Total | |||
2014(1) | $ | 2.1 | ||
2015 | 6.2 | |||
2016 | 4.1 | |||
2017 | 4.1 | |||
2018 | 4.1 |
|
|
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Rebates receivable | $ | 50.8 | $ | 18.4 | |||
Prepaid expenses | 32.0 | 5.6 | |||||
Other | 19.8 | 2.3 | |||||
Other current assets | $ | 102.6 | $ | 26.3 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Land, buildings and improvements | $ | 132.0 | $ | 143.8 | |||
Machinery and equipment | 109.9 | 72.5 | |||||
Equipment capital leases and assets related to financing obligations with related party | 229.3 | — | |||||
Internally developed software | 104.3 | 84.5 | |||||
Other | 14.9 | 4.9 | |||||
Less: Accumulated depreciation | (211.2 | ) | (198.6 | ) | |||
Property and equipment, net | $ | 379.2 | $ | 107.1 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Deferred financing costs | $ | 21.2 | $ | — | |||
Investments in real estate joint ventures | 5.7 | — | |||||
Below market leasehold agreements | 6.2 | — | |||||
Other | 13.1 | 9.4 | |||||
Other non-current assets | $ | 46.2 | $ | 9.4 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Accrued payroll and related taxes | $ | 32.7 | $ | 11.2 | |||
Accrued commissions | 36.6 | 25.9 | |||||
Other | 39.7 | 17.8 | |||||
Accrued payroll and benefits | $ | 109.0 | $ | 54.9 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Accrued taxes | $ | 15.5 | $ | 6.4 | |||
Accrued customer incentives | 22.6 | 12.8 | |||||
Accrued freight | 9.7 | 2.4 | |||||
Accrued professional fees | 5.2 | — | |||||
Customer deposits | 4.4 | — | |||||
Accrued interest | 2.3 | — | |||||
Other | 34.6 | 14.9 | |||||
Other accrued liabilities | $ | 94.3 | $ | 36.5 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Contingent liability associated with Tax Receivable Agreement | $ | 60.9 | $ | — | |||
Deferred compensation | 24.5 | — | |||||
Above market leasehold agreements | 7.5 | — | |||||
Asset retirement obligations | 6.5 | — | |||||
Other | 13.6 | 12.5 | |||||
Other non-current liabilities | $ | 113.0 | $ | 12.5 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | (24.4 | ) | $ | 9.1 | $ | (10.1 | ) | $ | 4.0 | |||||
Income tax (benefit) expense | (10.4 | ) | 3.9 | (4.6 | ) | 2.0 | |||||||||
Effective income tax rate | 42.6 | % | 42.9 | % | 45.5 | % | 50.0 | % |
|
(in millions) | September 30, 2014 | ||
ABL Facility(1) | $ | 796.9 | |
Equipment capital lease obligations | 9.7 | ||
Less: current portion of long-term debt | (3.3 | ) | |
Long-term debt, net | $ | 803.3 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Total stock-based compensation expense | $ | — | $ | 4.0 | $ | 4.3 | $ | 11.8 | |||||||
Income tax benefit related to stock-based compensation | $ | — | $ | 3.8 | $ | 1.3 | $ | 4.7 |
|
(in millions) | Three Months Ended September 30, 2014 | ||
Service cost | $ | 0.4 | |
Interest cost | 1.8 | ||
Expected return on plan assets | (2.5 | ) | |
Net periodic pension credit | $ | (0.3 | ) |
• | Assets contributed to the multiemployer 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 multiemployer 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. |
|
(in millions) | 2014(1) | 2015 | 2016 | 2017 | 2018 | Thereafter | |||||||||||||||||
Lease obligations | $ | 23.6 | $ | 79.5 | $ | 66.2 | $ | 55.2 | $ | 46.2 | $ | 95.1 | |||||||||||
Sublease income | (0.1 | ) | (0.3 | ) | (0.2 | ) | (0.1 | ) | (0.1 | ) | — | ||||||||||||
Total | $ | 23.5 | $ | 79.2 | $ | 66.0 | $ | 55.1 | $ | 46.1 | $ | 95.1 |
(in millions) | 2014(1) | 2015 | 2016 | 2017 | 2018 | Thereafter | |||||||||||||||||
Above market agreements | $ | (0.5 | ) | $ | (1.9 | ) | $ | (1.5 | ) | $ | (1.2 | ) | $ | (1.0 | ) | $ | (1.4 | ) | |||||
Below market agreements | 0.2 | 0.6 | 0.5 | 0.4 | 0.4 | 4.1 | |||||||||||||||||
Net amortization expense (accretion) | $ | (0.3 | ) | $ | (1.3 | ) | $ | (1.0 | ) | $ | (0.8 | ) | $ | (0.6 | ) | $ | 2.7 |
|
(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||||||||
Net sales | $ | 947.2 | $ | 338.2 | $ | 725.0 | $ | 357.0 | $ | 22.9 | $ | 2,390.3 | |||||||||||
Adjusted EBITDA | $ | 20.5 | $ | 9.2 | $ | 53.0 | $ | 15.5 | $ | (46.7 | ) | $ | 51.5 | ||||||||||
Depreciation and amortization | $ | 3.7 | $ | 0.5 | $ | 4.2 | $ | 1.8 | $ | 4.0 | $ | 14.2 | |||||||||||
Restructuring charges | $ | — | $ | — | $ | — | $ | — | $ | 0.1 | $ | 0.1 | |||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||||||||
Net sales | $ | 613.2 | $ | 215.0 | $ | 404.5 | $ | 210.1 | $ | — | $ | 1,442.8 | |||||||||||
Adjusted EBITDA | $ | 14.8 | $ | 5.0 | $ | 32.1 | $ | 5.3 | $ | (30.0 | ) | $ | 27.2 | ||||||||||
Depreciation and amortization | $ | 1.0 | $ | 0.1 | $ | 0.7 | $ | 0.4 | $ | 2.2 | $ | 4.4 | |||||||||||
Restructuring charges | $ | 2.5 | $ | — | $ | 1.8 | $ | 1.1 | $ | 0.6 | $ | 6.0 | |||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||
Net sales | $ | 2,038.3 | $ | 715.4 | $ | 1,529.5 | $ | 720.6 | $ | 22.9 | $ | 5,026.7 | |||||||||||
Adjusted EBITDA | $ | 38.1 | $ | 16.6 | $ | 104.4 | $ | 18.4 | $ | (95.7 | ) | $ | 81.8 | ||||||||||
Depreciation and amortization | $ | 6.1 | $ | 0.6 | $ | 5.9 | $ | 2.6 | $ | 7.9 | $ | 23.1 | |||||||||||
Restructuring charges (income) | $ | (0.4 | ) | $ | — | $ | (0.2 | ) | $ | (0.5 | ) | $ | 0.1 | $ | (1.0 | ) | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||||||||
Net sales | $ | 1,812.5 | $ | 596.8 | $ | 1,189.4 | $ | 635.4 | $ | — | $ | 4,234.1 | |||||||||||
Adjusted EBITDA | $ | 35.7 | $ | 12.0 | $ | 91.4 | $ | 10.3 | $ | (89.6 | ) | $ | 59.8 | ||||||||||
Depreciation and amortization | $ | 3.3 | $ | 0.2 | $ | 2.2 | $ | 1.2 | $ | 5.9 | $ | 12.8 | |||||||||||
Restructuring charges | $ | 12.9 | $ | 1.1 | $ | 9.0 | $ | 5.7 | $ | 1.7 | $ | 30.4 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | (24.4 | ) | $ | 9.1 | $ | (10.1 | ) | $ | 4.0 | |||||
Interest expense | 6.8 | — | 6.8 | — | |||||||||||
Depreciation and amortization | 14.2 | 4.4 | 23.1 | 12.8 | |||||||||||
Restructuring charges (income) | 0.1 | 6.0 | (1.0 | ) | 30.4 | ||||||||||
Non-restructuring stock-based compensation | — | 3.2 | 4.0 | 9.8 | |||||||||||
LIFO (income) expense | (0.5 | ) | 4.2 | (0.8 | ) | 1.9 | |||||||||
Non-restructuring severance charges | — | 0.3 | 2.4 | 0.9 | |||||||||||
Merger and integration expenses | 54.8 | — | 56.9 | — | |||||||||||
Other | 0.5 | — | 0.5 | — | |||||||||||
Total Adjusted EBITDA | $ | 51.5 | $ | 27.2 | $ | 81.8 | $ | 59.8 |
(in millions) | September 30, 2014 | December 31, 2013 | |||||
Print | $ | 1,025.8 | $ | 517.1 | |||
Publishing | 207.0 | 77.2 | |||||
Packaging | 802.5 | 401.7 | |||||
Facility Solutions | 380.2 | 201.7 | |||||
Corporate & Other | 251.2 | 59.2 | |||||
Total assets | $ | 2,666.7 | $ | 1,256.9 |
|
• | Registration Rights Agreement: The Registration Rights Agreement provides UWW Holdings, LLC with certain demand and piggyback registration rights. Under this Agreement, UWW Holdings, LLC 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. UWW Holdings, LLC, 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 will commence 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 UWW Holdings, LLC 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 UWW Holdings, LLC 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, UWW Holdings, LLC 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 UWW Holdings, LLC 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. |
Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Intercompany sales and purchases, net | $ | — | $ | 157.7 | $ | 255.4 | $ | 431.6 | |||||||
Cash pooling and general financing activities | — | (165.7 | ) | (322.5 | ) | (503.2 | ) | ||||||||
Corporate allocations including income taxes | — | 27.6 | 34.7 | 65.1 | |||||||||||
Net adjustments in conjunction with the Spin-off | (50.2 | ) | — | (50.2 | ) | — | |||||||||
Total net transfers (to) from International Paper | $ | (50.2 | ) | $ | 19.6 | $ | (82.6 | ) | $ | (6.5 | ) |
|
As of December 31, 2013 | |||||||||||
(in millions) | As | Adjustments | As | ||||||||
Reported | Restated | ||||||||||
Deferred income tax assets | $ | 55.3 | $ | (55.3 | ) | $ | — | ||||
Total current assets | 1,137.3 | (55.3 | ) | 1,082.0 | |||||||
Total assets | 1,312.2 | (55.3 | ) | 1,256.9 | |||||||
Deferred income tax liabilities | — | 13.5 | 13.5 | ||||||||
Total current liabilities | 451.3 | 13.5 | 464.8 | ||||||||
Total liabilities | 463.8 | 13.5 | 477.3 | ||||||||
Parent company investment | 853.1 | (68.8 | ) | 784.3 | |||||||
Total equity | 848.4 | (68.8 | ) | 779.6 | |||||||
Total liabilities and equity | 1,312.2 | (55.3 | ) | 1,256.9 |
Nine Months Ended September 30, 2013 | |||||||||||
(in millions) | As | Adjustments | As | ||||||||
Reported | Restated | ||||||||||
Deferred income tax provision | $ | 4.2 | $ | (0.7 | ) | $ | 3.5 | ||||
Cash provided by operating activities - continuing operations | 12.7 | (0.7 | ) | 12.0 | |||||||
Cash provided by operating activities | 12.6 | (0.7 | ) | 11.9 | |||||||
Net transfers to Parent | (17.6 | ) | 0.7 | (16.9 | ) | ||||||
Cash used for financing activities - continuing operations | (26.7 | ) | 0.7 | (26.0 | ) | ||||||
Cash used for financing activities | (28.6 | ) | 0.7 | (27.9 | ) |
|
|
Preliminary estimated purchase price: | (in millions) | ||
Fair value of Veritiv shares transferred | $ | 284.7 | |
Cash payment associated with customary working capital and net indebtedness adjustments | 33.9 | ||
Fair value of contingent liability associated with the Tax Receivable Agreement | 60.9 | ||
Total preliminary estimated purchase price | $ | 379.5 |
Preliminary Allocation: | (in millions) | ||
Cash | $ | 70.9 | |
Accounts receivable | 448.4 | ||
Inventories | 351.9 | ||
Deferred income tax assets | 79.8 | ||
Property and equipment | 301.2 | ||
Goodwill | 28.7 | ||
Other intangible assets | 29.9 | ||
Other current and non-current assets (including below market leasehold agreements) | 61.7 | ||
Accounts payable | (263.8 | ) | |
Long-term debt (including equipment capital leases) | (333.2 | ) | |
Financing obligations to related party | (238.2 | ) | |
Defined benefit pension obligations | (31.0 | ) | |
Other current and non-current liabilities (including above market leasehold agreements) | (126.8 | ) | |
Total purchase price | $ | 379.5 |
Value (in millions) | Estimated Useful Life (in years) | ||||
Customer relationships | $ | 23.1 | 10 — 12 | ||
Trademarks/Trade names | 3.9 | 1 — 5 | |||
Non-compete agreements | 2.9 | 1 | |||
Total identifiable intangible assets acquired | $ | 29.9 |
(Unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(in millions, except share and per share data) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Net sales | $ | 2,390.3 | $ | 2,471.8 | $ | 6,934.2 | $ | 7,246.8 | |||||||
Net income(1) | $ | 21.2 | $ | 244.7 | $ | 22.8 | $ | 189.2 | |||||||
Earnings per share - basic and diluted | $ | 1.33 | $ | 15.29 | $ | 1.43 | $ | 11.83 | |||||||
Weighted-average shares outstanding - basic and diluted | 16,000,000 | 16,000,000 | 16,000,000 | 16,000,000 |
|
(in millions) | Total | ||
Liability at December 31, 2013 | $ | 7.7 | |
Additional provision | 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 September 30, 2014 | $ | — |
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Loss from operations | $ | — | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.3 | ) | ||||
Restructuring and disposal income | — | — | — | 0.3 | |||||||||||
Loss from discontinued operations | $ | — | $ | (0.1 | ) | $ | (0.1 | ) | $ | — |
|
(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Balance at December 31, 2013 | $ | — | $ | — | $ | 26.4 | $ | — | $ | — | $ | 26.4 | |||||||||||
Additions to goodwill | — | — | 22.7 | 1.9 | 4.1 | 28.7 | |||||||||||||||||
Balance at September 30, 2014 | $ | — | $ | — | $ | 49.1 | $ | 1.9 | $ | 4.1 | $ | 55.1 |
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||
(in millions) | Estimated Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||
Customer relationships | 1 — 12 | $ | 53.8 | $ | 23.0 | $ | 30.8 | $ | 30.7 | $ | 21.5 | $ | 9.2 | ||||||||||||
Trademarks/Trade names | 1 — 11 | 4.1 | 0.6 | 3.5 | 0.2 | 0.1 | 0.1 | ||||||||||||||||||
Non-compete agreements | 1 | 2.9 | 0.7 | 2.2 | — | — | — | ||||||||||||||||||
Total | $ | 60.8 | $ | 24.3 | $ | 36.5 | $ | 30.9 | $ | 21.6 | $ | 9.3 |
Year-Ended | Total | |||
2014(1) | $ | 2.1 | ||
2015 | 6.2 | |||
2016 | 4.1 | |||
2017 | 4.1 | |||
2018 | 4.1 |
|
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Rebates receivable | $ | 50.8 | $ | 18.4 | |||
Prepaid expenses | 32.0 | 5.6 | |||||
Other | 19.8 | 2.3 | |||||
Other current assets | $ | 102.6 | $ | 26.3 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Land, buildings and improvements | $ | 132.0 | $ | 143.8 | |||
Machinery and equipment | 109.9 | 72.5 | |||||
Equipment capital leases and assets related to financing obligations with related party | 229.3 | — | |||||
Internally developed software | 104.3 | 84.5 | |||||
Other | 14.9 | 4.9 | |||||
Less: Accumulated depreciation | (211.2 | ) | (198.6 | ) | |||
Property and equipment, net | $ | 379.2 | $ | 107.1 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Deferred financing costs | $ | 21.2 | $ | — | |||
Investments in real estate joint ventures | 5.7 | — | |||||
Below market leasehold agreements | 6.2 | — | |||||
Other | 13.1 | 9.4 | |||||
Other non-current assets | $ | 46.2 | $ | 9.4 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Accrued payroll and related taxes | $ | 32.7 | $ | 11.2 | |||
Accrued commissions | 36.6 | 25.9 | |||||
Other | 39.7 | 17.8 | |||||
Accrued payroll and benefits | $ | 109.0 | $ | 54.9 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Accrued taxes | $ | 15.5 | $ | 6.4 | |||
Accrued customer incentives | 22.6 | 12.8 | |||||
Accrued freight | 9.7 | 2.4 | |||||
Accrued professional fees | 5.2 | — | |||||
Customer deposits | 4.4 | — | |||||
Accrued interest | 2.3 | — | |||||
Other | 34.6 | 14.9 | |||||
Other accrued liabilities | $ | 94.3 | $ | 36.5 |
(in millions) | September 30, | December 31, | |||||
2014 | 2013 | ||||||
Contingent liability associated with Tax Receivable Agreement | $ | 60.9 | $ | — | |||
Deferred compensation | 24.5 | — | |||||
Above market leasehold agreements | 7.5 | — | |||||
Asset retirement obligations | 6.5 | — | |||||
Other | 13.6 | 12.5 | |||||
Other non-current liabilities | $ | 113.0 | $ | 12.5 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | (24.4 | ) | $ | 9.1 | $ | (10.1 | ) | $ | 4.0 | |||||
Income tax (benefit) expense | (10.4 | ) | 3.9 | (4.6 | ) | 2.0 | |||||||||
Effective income tax rate | 42.6 | % | 42.9 | % | 45.5 | % | 50.0 | % |
|
(in millions) | September 30, 2014 | ||
ABL Facility(1) | $ | 796.9 | |
Equipment capital lease obligations | 9.7 | ||
Less: current portion of long-term debt | (3.3 | ) | |
Long-term debt, net | $ | 803.3 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Total stock-based compensation expense | $ | — | $ | 4.0 | $ | 4.3 | $ | 11.8 | |||||||
Income tax benefit related to stock-based compensation | $ | — | $ | 3.8 | $ | 1.3 | $ | 4.7 |
|
(in millions) | Three Months Ended September 30, 2014 | ||
Service cost | $ | 0.4 | |
Interest cost | 1.8 | ||
Expected return on plan assets | (2.5 | ) | |
Net periodic pension credit | $ | (0.3 | ) |
|
(in millions) | 2014(1) | 2015 | 2016 | 2017 | 2018 | Thereafter | |||||||||||||||||
Lease obligations | $ | 23.6 | $ | 79.5 | $ | 66.2 | $ | 55.2 | $ | 46.2 | $ | 95.1 | |||||||||||
Sublease income | (0.1 | ) | (0.3 | ) | (0.2 | ) | (0.1 | ) | (0.1 | ) | — | ||||||||||||
Total | $ | 23.5 | $ | 79.2 | $ | 66.0 | $ | 55.1 | $ | 46.1 | $ | 95.1 |
(in millions) | 2014(1) | 2015 | 2016 | 2017 | 2018 | Thereafter | |||||||||||||||||
Above market agreements | $ | (0.5 | ) | $ | (1.9 | ) | $ | (1.5 | ) | $ | (1.2 | ) | $ | (1.0 | ) | $ | (1.4 | ) | |||||
Below market agreements | 0.2 | 0.6 | 0.5 | 0.4 | 0.4 | 4.1 | |||||||||||||||||
Net amortization expense (accretion) | $ | (0.3 | ) | $ | (1.3 | ) | $ | (1.0 | ) | $ | (0.8 | ) | $ | (0.6 | ) | $ | 2.7 |
|
(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||||||||
Net sales | $ | 947.2 | $ | 338.2 | $ | 725.0 | $ | 357.0 | $ | 22.9 | $ | 2,390.3 | |||||||||||
Adjusted EBITDA | $ | 20.5 | $ | 9.2 | $ | 53.0 | $ | 15.5 | $ | (46.7 | ) | $ | 51.5 | ||||||||||
Depreciation and amortization | $ | 3.7 | $ | 0.5 | $ | 4.2 | $ | 1.8 | $ | 4.0 | $ | 14.2 | |||||||||||
Restructuring charges | $ | — | $ | — | $ | — | $ | — | $ | 0.1 | $ | 0.1 | |||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||||||||
Net sales | $ | 613.2 | $ | 215.0 | $ | 404.5 | $ | 210.1 | $ | — | $ | 1,442.8 | |||||||||||
Adjusted EBITDA | $ | 14.8 | $ | 5.0 | $ | 32.1 | $ | 5.3 | $ | (30.0 | ) | $ | 27.2 | ||||||||||
Depreciation and amortization | $ | 1.0 | $ | 0.1 | $ | 0.7 | $ | 0.4 | $ | 2.2 | $ | 4.4 | |||||||||||
Restructuring charges | $ | 2.5 | $ | — | $ | 1.8 | $ | 1.1 | $ | 0.6 | $ | 6.0 | |||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||
Net sales | $ | 2,038.3 | $ | 715.4 | $ | 1,529.5 | $ | 720.6 | $ | 22.9 | $ | 5,026.7 | |||||||||||
Adjusted EBITDA | $ | 38.1 | $ | 16.6 | $ | 104.4 | $ | 18.4 | $ | (95.7 | ) | $ | 81.8 | ||||||||||
Depreciation and amortization | $ | 6.1 | $ | 0.6 | $ | 5.9 | $ | 2.6 | $ | 7.9 | $ | 23.1 | |||||||||||
Restructuring charges (income) | $ | (0.4 | ) | $ | — | $ | (0.2 | ) | $ | (0.5 | ) | $ | 0.1 | $ | (1.0 | ) | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||||||||
Net sales | $ | 1,812.5 | $ | 596.8 | $ | 1,189.4 | $ | 635.4 | $ | — | $ | 4,234.1 | |||||||||||
Adjusted EBITDA | $ | 35.7 | $ | 12.0 | $ | 91.4 | $ | 10.3 | $ | (89.6 | ) | $ | 59.8 | ||||||||||
Depreciation and amortization | $ | 3.3 | $ | 0.2 | $ | 2.2 | $ | 1.2 | $ | 5.9 | $ | 12.8 | |||||||||||
Restructuring charges | $ | 12.9 | $ | 1.1 | $ | 9.0 | $ | 5.7 | $ | 1.7 | $ | 30.4 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | (24.4 | ) | $ | 9.1 | $ | (10.1 | ) | $ | 4.0 | |||||
Interest expense | 6.8 | — | 6.8 | — | |||||||||||
Depreciation and amortization | 14.2 | 4.4 | 23.1 | 12.8 | |||||||||||
Restructuring charges (income) | 0.1 | 6.0 | (1.0 | ) | 30.4 | ||||||||||
Non-restructuring stock-based compensation | — | 3.2 | 4.0 | 9.8 | |||||||||||
LIFO (income) expense | (0.5 | ) | 4.2 | (0.8 | ) | 1.9 | |||||||||
Non-restructuring severance charges | — | 0.3 | 2.4 | 0.9 | |||||||||||
Merger and integration expenses | 54.8 | — | 56.9 | — | |||||||||||
Other | 0.5 | — | 0.5 | — | |||||||||||
Total Adjusted EBITDA | $ | 51.5 | $ | 27.2 | $ | 81.8 | $ | 59.8 |
(in millions) | September 30, 2014 | December 31, 2013 | |||||
Print | $ | 1,025.8 | $ | 517.1 | |||
Publishing | 207.0 | 77.2 | |||||
Packaging | 802.5 | 401.7 | |||||
Facility Solutions | 380.2 | 201.7 | |||||
Corporate & Other | 251.2 | 59.2 | |||||
Total assets | $ | 2,666.7 | $ | 1,256.9 |
|
Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Intercompany sales and purchases, net | $ | — | $ | 157.7 | $ | 255.4 | $ | 431.6 | |||||||
Cash pooling and general financing activities | — | (165.7 | ) | (322.5 | ) | (503.2 | ) | ||||||||
Corporate allocations including income taxes | — | 27.6 | 34.7 | 65.1 | |||||||||||
Net adjustments in conjunction with the Spin-off | (50.2 | ) | — | (50.2 | ) | — | |||||||||
Total net transfers (to) from International Paper | $ | (50.2 | ) | $ | 19.6 | $ | (82.6 | ) | $ | (6.5 | ) |
|
As of December 31, 2013 | |||||||||||
(in millions) | As | Adjustments | As | ||||||||
Reported | Restated | ||||||||||
Deferred income tax assets | $ | 55.3 | $ | (55.3 | ) | $ | — | ||||
Total current assets | 1,137.3 | (55.3 | ) | 1,082.0 | |||||||
Total assets | 1,312.2 | (55.3 | ) | 1,256.9 | |||||||
Deferred income tax liabilities | — | 13.5 | 13.5 | ||||||||
Total current liabilities | 451.3 | 13.5 | 464.8 | ||||||||
Total liabilities | 463.8 | 13.5 | 477.3 | ||||||||
Parent company investment | 853.1 | (68.8 | ) | 784.3 | |||||||
Total equity | 848.4 | (68.8 | ) | 779.6 | |||||||
Total liabilities and equity | 1,312.2 | (55.3 | ) | 1,256.9 |
Nine Months Ended September 30, 2013 | |||||||||||
(in millions) | As | Adjustments | As | ||||||||
Reported | Restated | ||||||||||
Deferred income tax provision | $ | 4.2 | $ | (0.7 | ) | $ | 3.5 | ||||
Cash provided by operating activities - continuing operations | 12.7 | (0.7 | ) | 12.0 | |||||||
Cash provided by operating activities | 12.6 | (0.7 | ) | 11.9 | |||||||
Net transfers to Parent | (17.6 | ) | 0.7 | (16.9 | ) | ||||||
Cash used for financing activities - continuing operations | (26.7 | ) | 0.7 | (26.0 | ) | ||||||
Cash used for financing activities | (28.6 | ) | 0.7 | (27.9 | ) |
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|