PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

VERITIV CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data, unaudited)


	Three Months Ended March 31,
	2023		2022
Net sales	$	1,510.2	$	1,858.1
Cost of products sold (exclusive of depreciation and amortization shown separately below)	1,144.1		1,455.4
Distribution expenses	89.7		112.2
Selling and administrative expenses	171.4		187.9

Depreciation and amortization	10.1		12.7

Restructuring charges, net	—		2.7
Operating income	94.9		87.2
Interest expense, net	4.7		3.5
Other (income) expense, net	1.0		(0.6)
Income before income taxes	89.2		84.3
Income tax expense	20.5		5.8


Net income	$	68.7	$	78.5

Earnings per share:





Basic	$	5.08	$	5.31



Diluted	$	5.00	$	5.12

Weighted-average shares outstanding:
Basic	13.53		14.77
Diluted	13.74		15.32

Three Months Ended
September 30,
Nine Months Ended
September 30,
2017
2016
2017
2016
Net sales (including sales to related party of $8.6, $8.5, $24.9 and $26.6, respectively) $ 2,116.8

$ 2,126.6

$ 6,140.3

$ 6,207.2
Cost of products sold (including purchases from related party of $45.7, $71.4, $138.0 and $174.3, respectively) (exclusive of depreciation and amortization shown separately below) 1,736.6

1,743.8

5,026.4

5,086.2
Distribution expenses 132.0

126.0

380.9

375.2
Selling and administrative expenses 228.7

207.3

650.4

615.9
Depreciation and amortization 13.1

13.4

39.9

40.5
Acquisition and integration expenses 14.2

7.3

28.1

19.6
Restructuring charges 2.7

5.8

30.0

7.2
Operating income (loss) (10.5 ) 23.0
(15.4 ) 62.6
Interest expense, net 8.3

8.2

22.1

21.1
Other expense, net (0.5 )
1.2

1.2

6.3
Income (loss) before income taxes (18.3 ) 13.6
(38.7 ) 35.2
Income tax expense (benefit) (4.0 )
8.0

(13.1 )
18.4
Net income (loss) $ (14.3 ) $ 5.6
$ (25.6 ) $ 16.8

Earnings (loss) per share:
Basic earnings (loss) per share $ (0.91 ) $ 0.35
$ (1.63 ) $ 1.05
Diluted earnings (loss) per share $ (0.91 ) $ 0.34
$ (1.63 ) $ 1.04

Weighted average shares outstanding:
Basic 15.70

16.00

15.70

16.00
Diluted 15.70
16.27
15.70
16.05

See accompanying Notes to Condensed Consolidated Financial Statements.

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VERITIV CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, unaudited)


	Three Months Ended March 31,
	2023		2022
Net income	$	68.7	$	78.5
Other comprehensive income (loss):
Foreign currency translation adjustments	2.9		2.6


Pension liability adjustments, net of tax (1)	(0.1)		0.0

Other comprehensive income (loss)	2.8		2.6
Total comprehensive income (loss)	$	71.5	$	81.1

(1) Amounts shown are net of tax impacts, if any, which for the three months ended March 31, 2023 and 2022 were not significant.

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Net income (loss) $ (14.3 ) $ 5.6
$ (25.6 ) $ 16.8
Other comprehensive income (loss):
Foreign currency translation adjustments 2.4
(1.6 ) 7.8
0.6
Change in fair value of cash flow hedge, net of $0.1, $0.0, $0.1 and $0.2 tax, respectively 0.1
0.0
0.0
(0.3 )
Pension liability adjustments, net of $0.0, $0.0, $0.0 and $0.1 tax, respectively 0.0
0.0
0.1
0.2
Other comprehensive income (loss) 2.5
(1.6 ) 7.9
0.5
Total comprehensive income (loss) $ (11.8 ) $ 4.0
$ (17.7 ) $ 17.3

See accompanying Notes to Condensed Consolidated Financial Statements.

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VERITIV CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in millions, except par value, unaudited)


	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	33.0	$	40.6
Accounts receivable, less allowances of $24.3 and $26.7, respectively	789.8		889.6

Inventories	470.9		423.9

Other current assets	101.2		103.7

Total current assets	1,394.9		1,457.8
Property and equipment (net of accumulated depreciation and amortization of $329.1 and $325.5, respectively)	124.2		127.5
Goodwill	96.3		96.3
Other intangibles, net	34.5		35.6
Deferred income tax assets	29.4		29.0
Other non-current assets	347.6		343.4
Total assets	$	2,026.9	$	2,089.6
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	444.6	$	452.9

Accrued payroll and benefits	44.1		106.2
Other accrued liabilities	144.2		154.1

Current portion of debt	13.6		13.4

Total current liabilities	646.5		726.6
Long-term debt, net of current portion	231.9		264.8

Defined benefit pension obligations	0.8		0.4

Other non-current liabilities	330.4		341.7
Total liabilities	1,209.6		1,333.5
Commitments and contingencies (Note 11)
Shareholders' equity:


Preferred stock, $0.01 par value, 10.0 million shares authorized, none issued	—		—
Common stock, $0.01 par value, 100.0 million shares authorized; shares issued - 17.5 million and 17.5 million, respectively; shares outstanding - 13.5 million and 13.5 million, respectively	0.2		0.2
Additional paid-in capital	611.3		613.1
Accumulated earnings	532.8		472.6
Accumulated other comprehensive loss	(9.9)		(12.7)
Treasury stock at cost - 4.0 million and 4.0 million shares, respectively	(317.1)		(317.1)
Total shareholders' equity	817.3		756.1

Total liabilities and shareholders' equity	$	2,026.9	$	2,089.6

September 30, 2017
December 31, 2016
Assets
Current assets:
Cash $ 76.5

$ 69.6
Accounts receivable, less allowances of $45.2 and $34.5, respectively 1,165.1

1,048.3
Related party receivable 3.8

3.9
Inventories 772.6

707.9
Other current assets 134.7

118.9
Total current assets 2,152.7
1,948.6
Property and equipment (net of depreciation and amortization of $317.9 and $292.8, respectively) 341.5

371.8
Goodwill 105.3

50.2
Other intangibles, net 68.3

21.0
Deferred income tax assets 76.3

61.8
Other non-current assets 31.0

30.3
Total assets $ 2,775.1
$ 2,483.7
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 696.3

$ 654.1
Related party payable 11.2

9.0
Accrued payroll and benefits 61.5

84.4
Other accrued liabilities 130.1

102.5
Current maturities of long-term debt 1.8

2.9
Financing obligations, current portion (including obligations to related party of $10.4 and $14.9, respectively) 11.1

14.9
Total current liabilities 912.0
867.8
Long-term debt, net of current maturities 972.0

749.2
Financing obligations, less current portion (including obligations to related party of $155.2 and $176.1, respectively) 181.9

176.1
Defined benefit pension obligations 25.3

27.6
Other non-current liabilities 148.2

121.2
Total liabilities 2,239.4
1,941.9
Commitments and contingencies (Note 12)

Shareholders' equity:
Preferred stock, $0.01 par value, 10.0 million shares authorized, none issued —

—
Common stock, $0.01 par value, 100.0 million shares authorized, 16.0 million shares issued; shares outstanding - 15.7 million at September 30, 2017 and December 31, 2016 respectively 0.2

0.2
Additional paid-in capital 586.1

574.5
Accumulated earnings (deficit) (5.9 )
19.7
Accumulated other comprehensive loss (31.1 )
(39.0 )
Treasury stock at cost - 0.3 million shares at September 30, 2017 and December 31, 2016 (13.6 ) (13.6 )
Total shareholders' equity 535.7
541.8
Total liabilities and shareholders' equity $ 2,775.1
$ 2,483.7

See accompanying Notes to Condensed Consolidated Financial Statements.

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VERITIV CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)

Nine Months Ended September 30,
Operating activities 2017
2016
Net income (loss) $ (25.6 )
$ 16.8
Depreciation and amortization 39.9

40.5
Amortization of deferred financing fees 1.9

4.9
Net losses (gains) on dispositions of property and equipment (4.0 )
(2.7 )
Long-lived asset impairment charges 8.4

4.0
Provision for allowance for doubtful accounts 11.6

0.4
Deferred income tax provision (benefit) (14.3 )
8.1
Stock-based compensation 11.6

7.2
Other non-cash items, net 2.5

4.7
Changes in operating assets and liabilities

Accounts receivable and related party receivable (87.5 )
(48.6 )
Inventories (17.9 )
19.9
Other current assets (6.7 ) (8.5 )
Accounts payable and related party payable 69.6

38.5
Accrued payroll and benefits (23.4 )
(39.9 )
Other accrued liabilities 8.9
3.6
Other 7.3

11.0
Net cash provided by (used for) operating activities (17.7 )
59.9
Investing activities
Property and equipment additions (26.0 )
(29.8 )
Proceeds from asset sales 23.1

5.1
Cash paid for purchase of business, net of cash acquired (144.8 ) —
Net cash used for investing activities (147.7 )
(24.7 )
Financing activities
Change in book overdrafts (43.9 )
32.9
Borrowings of long-term debt 3,685.2

3,394.4
Repayments of long-term debt (3,446.5 )
(3,439.0 )
Payments under equipment capital lease obligations (2.2 )
(2.3 )
Payments under financing obligations (including obligations to related party of $11.5 and $14.4, respectively) (12.9 )
(14.4 )
Deferred financing fees —
(2.0 )
Payments under Tax Receivable Agreement (8.5 ) —
Net cash provided by (used for) financing activities 171.2

(30.4 )
Effect of exchange rate changes on cash 1.1

0.0
Net change in cash 6.9

4.8
Cash at beginning of period 69.6

54.4
Cash at end of period $ 76.5

$ 59.2
Supplemental cash flow information

Cash paid for income taxes, net of refunds $ 3.2

$ 3.1
Cash paid for interest 19.4

15.5
Non-cash investing and financing activities

Non-cash additions to property and equipment $ 8.6

$ 12.3
Contingent consideration for purchase of business: Earn-out 30.0
—


	Three Months Ended March 31,
	2023		2022
Operating activities
Net income	$	68.7	$	78.5


Depreciation and amortization	10.1		12.7
Amortization and write-off of deferred financing fees	0.4		0.4

Net (gains) losses on disposition of assets and sale of businesses	0.0		(2.3)

Provision for expected credit losses	(1.7)		(0.6)
Deferred income tax provision	(0.2)		(12.7)
Stock-based compensation	1.8		2.8
Other non-cash items, net	(0.2)		0.5
Changes in operating assets and liabilities
Accounts receivable	102.2		(25.8)
Inventories	(45.7)		(8.8)
Other current assets	3.5		(1.1)
Accounts payable	19.1		4.5
Accrued payroll and benefits	(69.3)		(50.6)
Other accrued liabilities	(11.5)		1.0
Other	(6.3)		(4.4)


Net cash provided by (used for) operating activities	70.9		(5.9)
Investing activities

Property and equipment additions	(2.9)		(9.4)
Proceeds from asset sales and sale of businesses, net of cash transferred	0.2		0.2
Proceeds from insurance related to property and equipment	—		2.1




Net cash provided by (used for) investing activities	(2.7)		(7.1)
Financing activities

Change in book overdrafts	(29.0)		20.3


Borrowings of long-term debt	1,459.5		1,515.2
Repayments of long-term debt	(1,488.8)		(1,481.8)
Payments under right-of-use finance leases	(2.5)		(3.4)
Payments under vendor-based financing arrangements	(3.4)		(3.2)


Purchase of treasury stock	—		(10.4)


Impact of tax withholding on share-based compensation	(3.6)		(29.5)
Dividends paid to shareholders	(8.5)		—
Other	(0.2)		0.2


Net cash provided by (used for) financing activities	(76.5)		7.4
Effect of exchange rate changes on cash	0.7		0.0
Net change in cash and cash equivalents, including cash classified within assets-held-for-sale	(7.6)		(5.6)
Less: cash included in assets-held-for-sale, end of period	—		(9.9)
Net change in cash and cash equivalents	(7.6)		(15.5)
Cash and cash equivalents at beginning of period	40.6		49.3
Cash and cash equivalents at end of period	$	33.0	$	33.8
Supplemental cash flow information
Cash paid for income taxes, net of refunds	$	21.6	$	15.1
Cash paid for interest	4.2		2.9
Non-cash investing and financing activities




Non-cash additions to property and equipment for right-of-use finance leases and vendor-based financing arrangements	$	2.7	$	15.6
Non-cash additions to other non-current assets for right-of-use operating leases	14.3		31.2

See accompanying Notes to Condensed Consolidated Financial Statements.

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VERITIV CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in millions, unaudited)


	2023
	Common Stock Issued			Additional Paid-in Capital		Accumulated Earnings		AOCL (1)		Treasury Stock			Total
	Shares	Amount								Shares	Amount
Balance at December 31, 2022	17.5	$	0.2	$	613.1	$	472.6	$	(12.7)	(4.0)	$	(317.1)	$	756.1
Net income						68.7							68.7
Other comprehensive income (loss)								2.8					2.8
Stock-based compensation				1.8									1.8
Issuance of common stock, net of stock received for minimum tax withholdings	0.0	0.0		(3.6)									(3.6)
Dividends						(8.5)							(8.5)

Balance at March 31, 2023	17.5	$	0.2	$	611.3	$	532.8	$	(9.9)	(4.0)	$	(317.1)	$	817.3

(1)Accumulated other comprehensive loss.


	2022
	Common Stock Issued			Additional Paid-in Capital		Accumulated Earnings		AOCL (1)		Treasury Stock			Total
	Shares	Amount								Shares	Amount
Balance at December 31, 2021	17.0	$	0.2	$	633.8	$	143.2	$	(24.3)	(2.4)	$	(117.1)	$	635.8
Net income						78.5							78.5
Other comprehensive income (loss)								2.6					2.6
Stock-based compensation				2.8									2.8
Issuance of common stock, net of stock received for minimum tax withholdings	0.5	0.0		(29.5)									(29.5)

Treasury stock purchases										(0.1)	(10.4)		(10.4)
Balance at March 31, 2022	17.5	$	0.2	$	607.1	$	221.7	$	(21.7)	(2.5)	$	(127.5)	$	679.8

(1)Accumulated other comprehensive loss.

See accompanying Notes to Condensed Consolidated Financial Statements.

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VERITIV CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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~~full-service provider of value-added packaging products and services, as well as facility solutions ~~print~~ and ~~publishing~~print-based products and services. ~~Additionally, Veritiv provides logistics and supply chain management solutions to its customers.~~ Veritiv was established in 2014, following the merger ~~(the "Merger")~~ of International Paper Company's xpedx distribution solutions business ~~("xpedx")~~ and UWW Holdings, Inc. ~~("UWWH")~~, the parent company of Unisource Worldwide, Inc. ("Unisource").

Veritiv operates ~~from approximately 170 distribution centers~~ primarily throughout the United States ("U.S.~~, Canada~~") and Mexico.

On May 2, 2022, the Company sold its Veritiv Canada, Inc. business. On September 1, 2022, the Company sold its logistics solutions business. These sales did not represent strategic shifts that will have a major effect on the Company's operations or financial results and they did not meet the requirements to be classified as discontinued operations.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with ~~U.S.~~accounting principles generally accepted ~~accounting principles~~in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for a complete set of annual audited financial statements.

The accompanying unaudited financial information should be read in conjunction with the Consolidated ~~and Combined~~ Financial Statements and Notes contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") for the year ended December 31, ~~2016.~~2022. In the opinion of management, all adjustments, including normal recurring accruals and other adjustments, considered necessary for a fair presentation of the interim financial information have been included. The operating results for the interim periods are not necessarily indicative of results for the full ~~year.~~

year, particularly in light of the Company's divestitures and the ongoing impacts of the COVID-19 pandemic and its effects on the domestic and global economies. These financial statements include all of the Company's subsidiaries. All significant intercompany transactions between Veritiv's businesses have been eliminated.

Use of Estimates

The preparation of unaudited financial statements in conformity with U.S. 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, right-of-use ("ROU") asset and liability valuations, accounts and notes receivable ~~valuation,~~valuations, inventory valuation, employee benefit plans, long-term incentive plans, income tax contingency accruals and valuation allowances, multi-employer pension plan ("MEPP") withdrawal liabilities, ~~and~~contingency accruals, 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.

The COVID-19 pandemic has affected Veritiv's operational and financial performance to varying degrees and the Company could continue to experience impacts including, but not limited to, charges from potential adjustments of the carrying amount of accounts and notes receivables and inventory, asset impairment charges and deferred tax valuation allowances. The extent to which the COVID-19 pandemic continues to impact the Company's business, results of operations and financial condition will depend on future developments, which are uncertain and difficult to predict. Even after the COVID-19 pandemic has subsided, the Company may experience an impact to its business as a result of any economic recession, downturn or volatility, legislative and regulatory changes or long-term changes in customer behavior. Estimates are revised as additional information becomes available.

Accounting Pronouncements

Recently Adopted Accounting Standards

Effective January 1, 2023, the Company adopted Accounting Standards Update ("ASU") 2022-04, Liabilities- Supplier

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~~Recently Issued Accounting Standards Not Yet Adopted~~
~~Standard~~	~~Description~~	~~Effective Date~~	~~Effect on the Financial Statements or Other Significant Matters~~
~~Accounting Standards Update ("ASU") 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~	~~The standard will replace existing revenue recognition standards and significantly expand the~~Finance Programs (Subtopic 405-50). This standard requires 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, 2018; early adoption date is no earlier than the annual period beginning after December 15, 2016~~	The Company’s analysis of the impact of this standard is ongoing. Focus areas include the impacts of accounting for customer dedicated inventory and principal/agent considerations. During the third quarter, work continued on the disclosure requirements and internal control assessments. As the analysis is not yet complete, the Company cannot provide a financial impact assessment at this time, nor provide a determination as to the effect of the new standard on its internal control over financial reporting and other changes in business practices and processes. The Company anticipates applying the modified retrospective method of adoption. The Company will adopt this ASU on January 1, 2018.
~~ASU 2016-02,~~ ~~Leases (Topic 842)~~	The standard requires lessees to put most leases on their balance sheet but recognize expenses in their statement of operations in a manner similar to current accounting guidance. The new standard also eliminates the current guidance related to real estate specific provisions. The guidance requires application on a modified retrospective basis to leases that existed at the beginning of the earliest period presented and those entered into thereafter but prior to the effective date. The standard permits entities to elect a package of practical expedients which must be applied consistently to all leases that commenced prior to the effective date. If the package of practical expedients is elected, entities do not need to reassess: (i) whether expired or existing contracts contain leases; (ii) lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The guidance also allows entities to make certain policy elections under the new standard, including: (i) the use of hindsight to determine lease term and when assessing existing right of use assets for impairment; (ii) a policy to not record short-term leases on the balance sheet; and (iii) a policy to not separate lease and non-lease components.	~~January 1, 2019; early adoption is permitted~~	The Company is currently evaluating this standard and anticipates that its adoption will have a material impact on the Consolidated Financial Statements and related disclosures as it will result in recording virtually all operating leases on the balance sheet as a lease obligation and right of use asset. The Company’s preliminary assessment has focused on system readiness and the policy elections and practical expedients permitted by the standard. Lease software has been implemented that will better enable the Company to implement the standard. The Company currently anticipates electing to apply the package of practical expedients to all leases that commenced prior to the date of adoption. Based on the analysis performed to date, the Company anticipates making a policy election to not include short-term leases on the Consolidated Balance Sheets and to separate lease and non-lease components. A decision has not been made regarding the use of hindsight when determining lease term and assessing existing right of use assets for impairment. The assessment is ongoing and the preliminary conclusions are subject to change. At this time the Company is unable to quantify the impact that the adoption of this standard will have on the Consolidated Financial Statements and related disclosures. The Company currently plans to adopt this ASU on January 1, 2019.

~~Table of Contents~~



~~Recently Issued Accounting Standards Not Yet Adopted (continued)~~
~~Standard~~	~~Description~~	~~Effective Date~~	~~Effect on the Financial Statements or Other Significant Matters~~
~~ASU 2016-13,~~ ~~Financial Instruments-Credit Losses (Topic 326)~~	The standard will replace the currently required incurred loss impairment methodology with guidance that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to be considered in making credit loss estimates. The guidance requires application on a modified retrospective basis. Other application requirements exist for specific assets impacted by a more-than-insignificant credit deterioration since origination.	~~January 1, 2020; early adoption is permitted for fiscal years beginning after December 15, 2018~~	~~The Company is currently evaluating the impact this ASU will have on its Consolidated Financial Statements and related disclosures. The Company currently plans to adopt this ASU on January 1, 2020.~~
~~ASU 2016-15,~~ ~~Statement of Cash Flows (Topic 230)~~	The standard addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance requires application on a retrospective basis.	~~January 1, 2018; early adoption is permitted (early adoption requires the adoption of all amendments in the same period)~~	The Company is currently evaluating the impact this ASU will have on its Consolidated Financial Statements and related disclosures; the impact is not expected to be material. The Company will adopt this ASU on January 1, 2018.
~~ASU 2017-01,~~ ~~Business Combinations (Topic 805)~~	The standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance requires application on a prospective basis.	~~January 1, 2018; early adoption is permitted~~	~~The Company will adopt this ASU on January 1, 2018.~~
~~ASU 2017-07,~~ ~~Compensation-Retirement Benefits (Topic 715)~~	The standard requires employers to disaggregate the service cost component from the other components of net benefit cost and disclose the amount of net benefit cost that is included in the income statement or capitalized in assets, by line item. The standard requires employers to report the service cost component in the same line item(s) as other compensation costs and to report other pension-related costs (which include interest costs, amortization of pension-related costs from prior periods and the gains or losses on plan assets) separately and exclude them from the subtotal of operating income. The standard also allows only the service cost component to be eligible for capitalization when applicable. The guidance requires application on a retrospective basis for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and on a prospective basis for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets.	~~January 1, 2018; early adoption is permitted as of the first interim period of an annual period for which interim or annual financial statements have not been issued~~	The Company is currently making its assessment of the impact that this ASU will have on its Consolidated Financial Statements and related disclosures using results from 2016 and year-to-date 2017; the impact is not expected to be material. The Company will adopt this ASU on January 1, 2018.

~~Table of Contents~~



~~Recently Adopted Accounting Standards~~
~~Standard~~	~~Description~~	~~Effective Date~~	~~Effect on the Financial Statements or Other Significant Matters~~
~~ASU 2015-11,~~ ~~Inventory~~ - ~~Simplifying the Measurement of Inventory (Topic 330)~~	The standard requires companies to measure inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. This ASU does not apply to inventories measured by either the last-in first-out ("LIFO") method or retail inventory method. The guidance requires application on a prospective basis.	~~January 1, 2017~~	The Company adopted this ASU on January 1, 2017. The adoption did not materially impact its Consolidated Financial Statements or related disclosures. As of September 30, 2017, approximately 87% of the inventory balance was measured using LIFO.
~~ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350)~~	The standard simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The guidance requires application on a prospective basis.	~~January 1, 2020; early adoption is permitted~~	~~The Company adopted this ASU on January 1, 2017.~~
~~ASU 2017-09,~~ ~~Compensation - Stock Compensation (Topic 718)~~	The standard clarifies the changes to the terms and conditions of a share-based payment award that require an entity to apply modification accounting. The guidance requires application on a prospective basis.	~~January 1, 2018; early adoption is permitted~~	~~The Company adopted this ASU on April 1, 2017. The adoption did not materially impact its Consolidated Financial Statements or related disclosures.~~

~~2. 2017 ACQUISITION~~

~~Acquisition of All American Containers - August 2017~~

~~On August 31, 2017 (the "Acquisition Date"), Veritiv completed its acquisition of 100%~~ of the ~~equity interest~~key terms of outstanding supplier finance programs and a rollforward of the related obligations. The amendments in ~~various All American Containers entities (collectively, "AAC"),~~this update do not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. The amendments in this update are effective for fiscal years beginning after December 15, 2022 on a ~~family owned~~retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose rollforward information, which is effective prospectively for fiscal years beginning after December 15, 2023. The adoption did not, and ~~operated distributor of rigid packaging, including plastic, glass and metal containers, caps, closures and plastic pouches.~~ ~~The acquisition of AAC aligns with~~is not expected to have in the future, any material impact on the Company's ~~strategy of investing in higher growth~~related disclosures.

Effective March 17, 2023, the Company adopted ASU 2020-04, Reference Rate Reform (Topic 848). This standard provides temporary optional expedients and ~~higher margin segments of~~exceptions to accounting guidance for certain contract modifications and hedging arrangements to ease financial reporting burdens as the ~~business. Through~~market transitions from the ~~acquisition,~~London Interbank Offered Rate ("LIBOR") and other interbank reference rates to alternative reference rates, such as Term Secured Overnight Financing Rate (''SOFR"). The guidance is available for prospective application upon its issuance and can generally be applied to contract modifications and hedging relationships entered into March 12, 2020 through December 31, 2024. On March 17, 2023, the Company modified its Asset-Based Lending Facility, incorporating the transition from LIBOR to Term SOFR. The adoption did not materially impact the Company's consolidated financial statements and related disclosures.

2. REVENUE RECOGNITION AND CREDIT LOSSES

Revenue Recognition and Composition

Certain revenues are derived from shipments which are made directly from a manufacturer to a Veritiv gains expertise in rigid plastic, glass and metal packaging that complements its portfolio of packaging products and services. This acquisition also provides Veritiv with additional marketing, selling and distribution channels into the growing U.S. rigid packaging market.customer. The ~~rigid packaging market's primary product categories include paperboard, plastics, metals and glass.~~

~~Acquisition-related costs of approximately~~ ~~$6.3 million~~ ~~were expensed as incurred.~~ ~~These costs~~ ~~were recognized in acquisition and integration expenses~~Company is considered to be a principal to these transactions. Revenues from these sales are reported on a gross basis on the Condensed Consolidated Statements of Operations and have historically represented approximately 35% of Veritiv's total net sales. As a normal business practice, Veritiv does not enter into contracts that require more than one year to complete or that contain significant financing components. The Company considers handling and delivery as activities to fulfill its performance obligations. Billings for third-party freight are accounted for as net sales and handling and delivery costs are accounted for as distribution expenses. Veritiv enters into incentive programs with certain of its customers, which are generally based on sales to those same customers. Veritiv follows the ~~three~~expected value method when estimating its retrospective incentives and ~~nine months ended September 30, 2017.~~ ~~These charges~~records the estimated amount as a reduction to gross sales when revenue is recognized. Estimates of the variable consideration are based primarily on contract terms, current customer forecasts as well as historical experience.

Customer product returns are estimated based on historical experience and the identification of specific events necessitating an adjustment. The estimated return value is recognized as a reduction of gross sales and related cost of products sold. The estimated inventory returns value is recognized as part of inventories, while the estimated customer refund liability is recognized as part of other accrued liabilities on the Condensed Consolidated Balance Sheets. As of March 31, 2023 and December 31, 2022, estimated inventory returns were not significant.

A customer contract liability will arise when Veritiv has received payment for goods and services but has not yet transferred the items to a customer and satisfied its performance obligations. Veritiv records a customer contract liability for performance obligations outstanding related to payments received in advance for customer deposits on equipment sales and other sale arrangements requiring prepayment, which are included in accounts payable on the ~~table in~~ ~~Note 3, Acquisition, Integration~~Condensed Consolidated Balance Sheets. Veritiv expects to satisfy these remaining performance obligations and ~~Restructuring Charges~~recognize the related revenues upon delivery of the goods and ~~related primarily~~services to ~~legal, consulting~~the customer's designated location within 12 months following receipt of the payment. Most equipment sales deposits are held for approximately 90 days and other ~~professional fees, and retention.~~sale arrangements requiring prepayment initially cover a 60 - 90 day period but can be renewed by the customer.

~~The acquisition of AAC was accounted for in the Company's financial statements using the acquisition method of accounting. The total consideration to complete the acquisition was approximately~~ ~~$176.6 million~~. Due to the limited amount of time since the acquisition of AAC, the valuation of certain assets and liabilities is preliminary and, as management receives additional information during the measurement period, these assets and liabilities may be adjusted. The preliminary purchase price was allocated to tangible and intangible assets and liabilities based upon their respective estimated fair values. The following table summarizes the components of the preliminary estimated purchase price for AAC:

Table of Contents

See the table below for a year-to-date summary of the changes to the customer contract liabilities balance:

~~Preliminary estimated purchase price:~~


	Customer Contract Liabilities
(in millions)	2023		2022
Balance at January 1,	$	16.1	$	21.8
Payments received	11.2		15.3
Revenue recognized from beginning of year balance	(5.2)		(11.4)
Revenue recognized from current year receipts	(7.0)		(5.1)
Other adjustments (1)	—		(1.1)
Balance at March 31,	$	15.1	$	19.5

(1) Reflects liabilities removed as part of the sale of a business.

(in millions)
Cash consideration $ 112.0
Repayment of loans 34.3
Contingent consideration: Earn-out 30.0
Contingent bonus tax payment 0.3
Total preliminary estimated purchase price $ 176.6

Historically, the Company's ten largest customers have generated approximately 10% - 15% of its consolidated annual net sales. Veritiv's principal markets are concentrated primarily across North America. Approximately 97% of its reported net sales for the three months ended March 31, 2023 were generated in the U.S. Veritiv evaluated the nature of the products and services provided to its customers as well as the nature of the customer and the geographical distribution of its customer base and determined that the best representative level of disaggregated revenue is the product category basis. The following ~~table summarizes the allocation~~is a brief description of the ~~preliminary estimated purchase price to assets acquired~~Company's three reportable segments, organized by major product category. This segment structure is consistent with the way the Chief Operating Decision Maker, who is Veritiv's Chief Executive Officer, makes operating decisions and ~~liabilities assumed as~~manages the growth and profitability of the ~~Acquisition Date~~Company's business. The Company also has a Corporate & Other category, which includes certain assets and costs not primarily attributable to any of the reportable segments. Prior to its divestiture in September 2022, the Company's logistics solutions business, which provided transportation and warehousing solutions, was also included in Corporate & Other.

•Packaging – The Packaging segment provides custom and standard packaging solutions for customers based in North America and in key global markets. This segment services its customers with a full spectrum of packaging product materials within flexible, corrugated and fiber, ancillary packaging, rigid and equipment categories. The business is strategically focused on higher growth industry sectors including manufacturing, food and beverage, wholesale and retail, healthcare and transportation, as well as specialty sectors based on ~~valuation information, estimates~~industry and ~~assumptions available on September 30, 2017.~~ product expertise. This segment also provides supply chain solutions, structural and graphic packaging design and engineering, automation, workflow and equipment services and kitting.

•Facility Solutions – The Facility Solutions segment sources and sells cleaning, break-room and other supplies in product categories that include towels and tissues, food service, personal protective equipment, cleaning chemicals and skincare, primarily in North America. Additionally, the Company offers total cost of ownership solutions with re-merchandising, budgeting and compliance reporting and inventory management.

•Print Solutions – The Print Solutions segment sells and distributes commercial printing, writing and copying products and services primarily in North America. Veritiv's broad geographic platform of operations and services, coupled with the breadth of paper and graphics products, including exclusive private brand offerings, provides a comprehensive suite of solutions in paper procurement, print management, supply chain and distribution.

See Note ~~4, Goodwill~~12, Segment and Other ~~Intangible Assets~~Information, for ~~additional~~the disaggregation of revenue and other information related to the ~~goodwill~~Company's reportable segments and ~~intangible assets acquired in the AAC acquisition. See~~ ~~Note 9, Fair Value Measurements, for additional information related to the fair value~~Corporate & Other.

Credit Losses and Other Allowances

The components of the ~~contingent consideration related to the earn-out.~~accounts receivable allowances were as follows:


(in millions)	March 31, 2023		December 31, 2022
Allowance for credit losses	$	14.7	$	17.7
Other allowances(1)	9.6		9.0
Total accounts receivable allowances	$	24.3	$	26.7

~~Preliminary allocation:~~(1) Includes amounts reserved for credit memos, customer discounts, customer short pays and other miscellaneous items.

(in millions)
Cash $ 1.5
Accounts receivable 30.4
Inventories 39.2
Other current assets 5.7
Property and equipment 2.2
Goodwill 61.2
Other intangible assets 51.2
Other non-current assets 0.9
Accounts payable (12.4 )
Other current liabilities (2.7 )
Other non-current liabilities (0.6 )
Total preliminary estimated purchase price $ 176.6

The amounts shown above may change as the purchase price will be based upon finalization of customary working capital adjustments and valuation of the contingent liability associated with the earn-out. 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.

~~Actual and Pro Forma Impact (unaudited)~~

The operating results of AAC are included in the Company's financial statements from September 1, 2017 through September 30, 2017. Net sales and pre-tax loss attributable to AAC during this period and included in the Company's Condensed Consolidated Statements of Operations were $16.0 million and ($0.9) million, respectively.

The following unaudited pro forma financial information presents results as if the acquisition of AAC occurred on January 1, 2016. The historical consolidated financial information of the Company and AAC has been adjusted in the pro forma information to give effect to pro forma events that are directly attributable to the transaction and are factually supportable. The unaudited pro forma results do not reflect events that have occurred or may occur after the transaction, including the impact of any synergies expected to result from the acquisition. Accordingly, the unaudited pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date, nor is it necessarily an indication of future operating results.

Table of Contents

Below is a year-to-date rollforward of the Company’s allowance for credit losses:


	Packaging and Facility Solutions		Print Solutions - High Risk		Print Solutions - Medium/Low Risk
(in millions)	U.S.		U.S.		U.S.		Rest of world		Total
Balance at December 31, 2022	$	12.8	$	2.7	$	1.6	$	0.6	$	17.7
Add / (Deduct):
Provision for expected credit losses	(0.5)		0.2		(0.4)		0.0		(0.7)
Write-offs charged against the allowance	(1.3)		0.1		0.0		(0.2)		(1.4)
Recoveries of amounts previously written off	0.0		0.1		0.0		—		0.1
Other adjustments(1)	—		(1.0)		—		0.0		(1.0)
Balance at March 31, 2023	$	11.0	$	2.1	$	1.2	$	0.4	$	14.7

(Unaudited) Three Months Ended September 30, Nine Months Ended September 30,
(in millions, except share and per share data) 2017 2016 2017 2016
Net sales $ 2,157.8
$ 2,181.9
$ 6,303.2
$ 6,378.3
Net income (loss) (11.3 ) 5.4
(21.5 ) 12.0
Earnings (loss) per share:
Basic earnings (loss) per share $ (0.72 ) $ 0.34
$ (1.37 ) $ 0.75
Diluted earnings (loss) per share $ (0.72 ) $ 0.33
$ (1.37 ) $ 0.75
Weighted-average shares outstanding
Basic 15.70
16.00
15.70
16.00
Diluted 15.70
16.27
15.70
16.05
(1) Other adjustments represent amounts reserved for foreign currency translation adjustments and reserves for certain customer accounts where revenue is not recognized because collectability is not probable. These adjustments may also include accounts receivable allowances recorded in connection with acquisitions and divestitures.

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

- Acquisition and integration expenses: Acquisition and integration expenses of $6.9 million and $7.4 million incurred during the three and nine months ended September 30, 2017, respectively, have been eliminated. Pro forma net incomeAdditionally, for the three ~~and nine~~ months ended ~~September 30, 2016 includes acquisition~~March 31, 2023 and ~~integration expenses of $0.0~~2022, the Company recognized $(1.0) million and ~~$7.4~~$(0.5) million, ~~respectively.~~

~~- Incremental amortization expense: Pro forma net income~~respectively, in the provision for the three and nine months ended September 30, 2017 includes incremental amortization expense of $1.1 million and $4.4 million, respectively. Pro forma net income for the three and nine months ended September 30, 2016 includes incremental amortization expense of $1.7 million and $5.0 million, respectively.

- Interest expense: Pro forma net income for the three and nine months ended September 30, 2017 includes incremental interest expense of $0.5 million and $2.0 million, respectively. Pro forma net income for the three and nine months ended September 30, 2016 includes incremental interest expense of $0.6 million and $1.8 million, respectively.

~~A combined 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.~~

~~3. ACQUISITION, INTEGRATION AND RESTRUCTURING CHARGES~~

~~Merger of xpedx and Unisource~~

The Company currently expects net costs and charges associated with achieving anticipated cost savings and other synergies from the Merger (excluding charges relating to the complete or partial withdrawal from multi-employer pension plans ("MEPP"), some of which are uncertain at this time, and including cash proceeds from sales of assetsexpected credit losses related to ~~consolidation), to be approximately $225 million to $250 million through~~its notes receivable. At March 31, 2023 and December 31, 2018. Included in the estimate is approximately $105 million for capital expenditures, primarily consisting of information technology infrastructure, systems integration and planning. Through September 30, 2017, the Company has incurred approximately $233 million in costs and charges, including approximately $78 million for capital expenditures.

During the three and nine months ended September 30, 2017 and 2016, Veritiv incurred costs and charges related primarily to: internally dedicated integration management resources, retention compensation, information technology conversion costs, rebranding, professional services and other costs to integrate its businesses.

~~Table of Contents~~

~~The following table summarizes the components of acquisition and integration expenses:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2017 2016 2017 2016
Integration management $ 3.8
$ 2.2
$ 10.5
$ 6.0
Retention compensation —
0.4
0.2
2.4
Information technology conversion costs 2.8
1.9
6.8
4.3
Rebranding 0.1
0.9
0.4
2.1
Legal, consulting and other professional fees 0.4
0.8
1.3
1.8
Other 0.6
1.1
2.4
3.0
AAC acquisition and integration 6.5
—
6.5
—
Total acquisition and integration expenses $ 14.2
$ 7.3
$ 28.1
$ 19.6

~~Veritiv Restructuring Plan~~

As part of the 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 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. As part of its restructuring efforts, the Company continues to evaluate its operations outside of North America to identify additional cost saving opportunities. The Company may elect to restructure its operations in specific countries, which may include staff reductions, lease terminations and facility closures or the complete exit of a market. The Company may continue to record restructuring charges in the future as restructuring activities progress, which may include gains or losses from the disposition of assets. As of September 30, 2017,2022, the Company held ~~for sale $4.2~~$0.1 million and $0.1 million, respectively, in ~~assets related to these activities,~~notes receivable, the majority of which ~~are included in~~is reflected within other ~~current~~non-current assets on the Condensed Consolidated Balance Sheets.

~~Related~~

3. LEASES

The Company leases certain property and equipment used for operations to ~~these company-wide initiatives,~~limit its exposure to risks related to ownership. The major leased asset categories include: real estate, delivery equipment, material handling equipment and computer and office equipment. As of March 31, 2023, the Company ~~recorded restructuring charges~~operated from approximately 95 distribution centers of ~~$2.7~~which approximately 90 were leased. These facilities are strategically located throughout the U.S. and Mexico in order to efficiently serve the customer base in the surrounding areas while also facilitating expedited delivery services for special orders. The Company also leases various office spaces for corporate and sales functions.

The components of lease expense were as follows:


(in millions)		Three Months Ended March 31,
Lease Classification	Financial Statement Classification	2023		2022
Short-term lease expense(1)	Operating expenses	$	1.4	$	0.8

Operating lease expense(2)	Operating expenses	$	21.1	$	25.1




Finance lease expense:
Amortization of right-of-use assets	Depreciation and amortization	$	2.6	$	3.7
Interest expense	Interest expense, net	0.4		0.7
Total finance lease expense		$	3.0	$	4.4


Total Lease Cost		$	25.5	$	30.3

(1) Short-term lease expense is comprised of expenses related to leases with a term of twelve months or less, which includes expenses related to month-to-month leases.

(2) Sublease income and variable lease expense are not included in the above table as the amounts were not significant for the periods presented.

Table of Contents

Supplemental balance sheets and other information were as follows:


(in millions, except weighted-average data)		March 31, 2023			December 31, 2022
Lease Classification	Financial Statement Classification
Operating Leases:
Operating lease right-of-use assets	Other non-current assets	$	302.2		$	304.3

Operating lease obligations - current	Other accrued liabilities	$	68.6		$	67.9
Operating lease obligations - non-current	Other non-current liabilities	262.4			266.0
Total operating lease obligations		$	331.0		$	333.9

Weighted-average remaining lease term in years		5.7			5.9
Weighted-average discount rate		4.7		%	4.6		%

Finance Leases:
Finance lease right-of-use assets	Property and equipment	$	29.9		$	29.7

Finance lease obligations - current	Current portion of debt	$	8.7		$	8.8
Finance lease obligations - non-current	Long-term debt, net of current portion	24.3			24.1
Total finance lease obligations		$	33.0		$	32.9

Weighted-average remaining lease term in years		3.8			3.7
Weighted-average discount rate		4.5		%	4.2		%

Cash paid for amounts included in the measurement of lease liabilities was as follows:


(in millions)		Three Months Ended March 31,
Lease Classification	Financial Statement Classification	2023		2022
Operating Leases:
Operating cash flows from operating leases	Operating activities	$	21.4	$	25.0

Finance Leases:
Operating cash flows from finance leases	Operating activities	$	0.4	$	0.7
Financing cash flows from finance leases	Financing activities	2.5		3.4

Table of Contents

Lease Commitments

Future minimum lease payments at March 31, 2023 were as follows:



(in millions)	Finance Leases		Operating Leases (1)
2023 (excluding the three months ended March 31, 2023)	$	8.1	$	64.5
2024	8.9		74.5
2025	8.3		61.5
2026	5.5		55.3
2027	3.0		45.9
2028	1.9		29.4
Thereafter	1.0		46.2
Total future minimum lease payments	36.7		377.3
Amount representing interest	(3.7)		(46.3)
Total future minimum lease payments, net of interest	$	33.0	$	331.0

(1) Future sublease income of $1.8 million is excluded from the operating leases amount in the table above.

Total future minimum lease payments at March 31, 2023 for finance and ~~$5.8~~operating leases, including the amount representing interest, are comprised of $375.1 million for real estate leases and $38.9 million for non-real estate leases.

At March 31, 2023, the Company had committed to additional future obligations of approximately $4.8 million for real estate operating leases that have not yet commenced and therefore are not included in the table above. These leases will commence within the next three months ~~ended September 30, 2017~~with an average lease term of approximately five years.

4. RESTRUCTURING CHARGES

2020 Restructuring Plan

During 2020, the Company initiated a restructuring plan (the "2020 Restructuring Plan") to (1) respond to the impact of the COVID-19 pandemic on its business operations, (2) address the ongoing secular changes in its print and ~~2016, respectively,~~publishing operations and ~~restructuring charges~~(3) further align its cost structure with ongoing business needs as the Company executes on its stated corporate strategy. As of ~~$30.0 million~~December 31, 2022, the 2020 Restructuring Plan was complete. See Note 12, Segment and $7.2 million for the nine months ended September 30, 2017 and 2016, respectively. The increase in charges for the nine months ended September 30, 2017 over the same period in 2016 primarily related to: (i) an estimated $15.5 million in MEPP withdrawals, (ii) $4.1 million in severance costs and (iii) other facility relocation and related support costs. See ~~Note 13, Segment~~Other Information, for the impact ~~these~~that charges from this restructuring plan had on the Company's reportable segments.

Other direct costs reported in the tables below include facility closing costs and other incidental costs associated with the development, communication, administration and implementation of these ~~initiatives.~~initiatives; unless otherwise indicated, costs incurred exclude any restructuring gains or losses on lease terminations and asset disposals.

The following table presents a summary of restructuring charges, net, showing the cumulative amounts since the initiatives began:


(in millions)	Severance and Related Costs		Other Direct Costs		(Gain) Loss on Sale of Assets and Other		Total
Cumulative	$	41.4	$	36.6	$	(8.4)	$	69.6

Table of Contents

The following is a summary of the Company's ~~restructuring~~2020 Restructuring Plan liability activity for the ~~three and nine months ended September 30, 2017:~~current year:

(in millions) Severance and Related Costs Other Direct Costs Total
Balance at December 31, 2016 $ 1.8
$ 8.0
$ 9.8
Costs incurred 1.4
3.1
4.5
Payments (1.2 ) (2.8 ) (4.0 )
Balance at March 31, 2017 2.0
8.3
10.3
Costs incurred 3.9
19.7
23.6
Payments (2.0 ) (5.4 ) (7.4 )
Balance at June 30, 2017 3.9
22.6
26.5
Costs incurred 0.7
3.8
4.5
Payments (0.7 ) (4.7 ) (5.4 )
Balance at September 30, 2017 $ 3.9
$ 21.7
$ 25.6


(in millions)	Severance and Related Costs		Other Direct Costs		Total
Balance at December 31, 2022	$	0.9	$	2.3	$	3.2

Payments	(0.4)		(0.3)		(0.7)
Other non-cash items	(0.1)		0.0		(0.1)
Balance at March 31, 2023	$	0.4	$	2.0	$	2.4

~~Table~~The total liability in the table above primarily consists of ~~Contents~~

obligations to make future lease payments through the end of 2024 for properties that were exited before the lease expired; the majority of the noted severance obligation is expected to be paid by the end of 2023.

In addition, the Company recognized net non-cash gains of $1.8 million and $2.6 million related to vacating certain of its facilities for the three and nine months ended September 30, 2017, respectively.

The following is a summary of the Company's ~~restructuring~~2020 Restructuring Plan liability activity for the ~~three and nine months ended September 30, 2016:~~prior year comparable period:


(in millions)	Severance and Related Costs		Other Direct Costs		Total
Balance at December 31, 2021	$	4.7	$	3.7	$	8.4
Costs incurred	0.4		1.4		1.8
Payments	(2.3)		(2.1)		(4.4)
Balance at March 31, 2022	$	2.8	$	3.0	$	5.8

(in millions) Severance and Related Costs Other Direct Costs Total
Balance at December 31, 2015 $ 1.7
$ 0.4
$ 2.1
Costs incurred 0.7
0.3
1.0
Payments (0.9 ) (0.4 ) (1.3 )
Balance at March 31, 2016 1.5
0.3
1.8
Costs incurred 0.9
1.5
2.4
Payments (0.6 ) (1.0 ) (1.6 )
Balance at June 30, 2016 1.8
0.8
2.6
Costs incurred 0.3
5.4
5.7
Payments (1.0 ) (0.7 ) (1.7 )
Balance at September 30, 2016 $ 1.1
$ 5.5
$ 6.6

In addition to the Company recognized a net non-cash loss of $0.1 million and a net non-cash gain of $1.9 million related to vacating certain of its facilities for the three and nine months ended September 30, 2016, respectively.

~~4. GOODWILL AND OTHER INTANGIBLE ASSETS~~

~~Goodwill~~

~~At September 30, 2017, the Company's net goodwill balance was~~ ~~$105.3 million.~~ ~~The following table sets forth the changes~~costs incurred in the ~~carrying amount of goodwill~~table above, during the three ~~and nine~~ months ended ~~September 30, 2017:~~

(in millions) Packaging Corporate & Other Total
Balance at December 31, 2016:
   Goodwill $ 44.1
$ 6.1
$ 50.2
   Accumulated impairment losses —
—
—
      Net goodwill 2016 44.1
6.1
50.2
2017 Activity:
   Goodwill acquired 61.2
—
61.2
   Impairment of goodwill —
(6.1 ) (6.1 )
Balance at September 30, 2017:

   Goodwill 105.3
6.1
111.4
   Accumulated impairment losses —
(6.1 ) (6.1 )
      Net goodwill at September 30, 2017 $ 105.3
$ —
$ 105.3

~~Preliminary goodwill of~~ ~~$61.2 million~~ ~~arising from the acquisition of AAC, as described in~~ ~~Note 2, 2017 Acquisition~~, consists largely of the expected synergies and other benefits from combining operations and is expected to be deductible for tax purposes. The goodwill was allocated 100% to the Company's Packaging segment.

During the third quarter of 2017, as part of the Company's review for possible goodwill impairment indicators, management determined that the goodwill allocated to the logistics solutions business was fully impaired. The impairment was recorded as selling and administrative expense in the Condensed Consolidated Statements of Operations. See ~~Note 9,~~

~~Table of Contents~~

~~Fair Value Measurements, for additional information related to the impairment.~~ ~~As the asset had no remaining net book value or useful life, both the gross value and accumulated amortization value were removed from the Company’s ledger.~~

~~Other Intangible Assets~~

~~The components of the Company's other intangible assets were as follows:~~

September 30, 2017 December 31, 2016
(in millions) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net
Customer relationships $ 64.9
$ 5.0
$ 59.9
$ 23.6
$ 4.0
$ 19.6
Trademarks/Trade names 7.8
1.9
5.9
2.7
1.3
1.4
Non-compete agreements 2.6
0.1
2.5
—
—
—
Total $ 75.3
$ 7.0
$ 68.3
$ 26.3
$ 5.3
$ 21.0

~~The gross carrying amount of other intangible assets increased by~~ ~~$51.2 million~~ as a result of the acquisition of AAC. Due to the limited amount of time since the acquisition of AAC, the valuation of the identifiable intangible assets is preliminary and based on market benchmark studies. These assets are included in other intangibles, net on the Condensed Consolidated Balance Sheets and are being amortized to operating expense on a ~~straight-line basis over their estimated useful lives. Preliminary allocated values from the AAC acquisition are as follows:~~

Gross Value (in millions)

Estimated Useful Life (in years)
Customer relationships $ 43.5
10
Trademarks/Trade names 5.1
5
Non-compete agreements 2.6
2
Total identifiable intangible assets acquired $ 51.2

~~During the third quarter of 2017,~~March 31, 2022, the Company ~~recognized a $1.6~~expensed $0.9 million ~~non-restructuring asset impairment charge related to its logistics solutions business's customer relationship intangible asset,~~of Other Direct Costs, which was ~~recorded in selling and administrative expenses.~~ ~~See~~ ~~Note 9, Fair Value Measurements, for additional information related to the impairment.~~prepaid at December 31, 2021.

5. DEBT ~~AND OTHER OBLIGATIONS~~

The Company's ~~long-term~~ debt obligations were as follows:


(in millions)	March 31, 2023		December 31, 2022
Asset-Based Lending Facility (the "ABL Facility")	$	199.9	$	229.2
Commercial card program	1.4		1.6
Vendor-based financing arrangements	11.2		14.5
Finance leases	33.0		32.9
Total debt	245.5		278.2
Less: current portion of debt	(13.6)		(13.4)
Long-term debt, net of current portion	$	231.9	$	264.8

(in millions) September 30, 2017 December 31, 2016
Asset-Based Lending Facility (the "ABL Facility") $ 969.3
$ 726.9
Equipment capital lease and other obligations 4.5
25.2
Total debt 973.8
752.1
Less: current maturities of long-term debt (1.8 ) (2.9 )
Long-term debt, net of current maturities $ 972.0
$ 749.2

ABL Facility

On March 17, 2023, the Company amended its ABL Facility to, among other things, replace LIBOR provisions with analogous SOFR provisions. The Company currently expects to complete the full transition to Term SOFR in the second quarter of 2023. All other significant terms remained substantially the same. The ABL Facility has aggregate commitments of $1.1 billion, a maturity date of May 20, 2026 and interest rates which are based on LIBOR, Term SOFR or the prime rate plus a margin rate. 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 ~~September 30, 2017,~~March 31, 2023, the available additional borrowing capacity under the ABL Facility was approximately ~~$272.3~~$681.8 million. As of March 31, 2023, the Company held $8.6 million in outstanding letters of credit.

The ~~equipment capital lease and other obligations reported in~~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 the ~~table above includes $19.1 million related to~~limits outlined under the ~~accumulated construction costs for the Toronto build-to-suit arrangement as of December~~ABL Facility. At March 31, ~~2016. This project was completed during the second quarter of 2017 and is accounted for as a financing obligation. As such, for periods beginning~~

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~~with~~2023, the ~~second quarter~~above test was not applicable and based on information available as of ~~2017~~ the ~~obligation value~~date of this report it is ~~shown~~not expected to be applicable in the ~~table below as~~next 12 months.

Commercial Card Program

The Company has a commercial purchasing card program that is used for business purpose purchasing and must be paid in-full monthly. At March 31, 2023, the card carried a maximum credit limit of $37.5 million. The net change in the outstanding balance is included in other financing ~~in addition to the Company's related party financing obligations.~~

~~The Company's long-term financing obligations were as follows:~~

(in millions) September 30, 2017 December 31, 2016
Obligations to related party $ 165.6
$ 191.0
Obligations - other financing 27.4
—
Total financing obligations 193.0
191.0
Less: current portion of financing obligations (11.1 ) (14.9 )
Financing obligations, less current portion $ 181.9
$ 176.1

From the Merger through September 30, 2017, the Company has terminated agreements for 11 of the related party financed properties and therefore triggered an early termination of each respective property's financing agreement. One of these terminations also involved the purchase of a facility in Austin, Texas. See ~~Note 7, Related Party Transactions~~, for additional information related to that purchase. Upon termination of a property's financing agreement, the Company recognizes the non-cash effects of the derecognition of (i) the property and equipment and (ii) the corresponding financing obligation, as other non-cash items, net,activities on the Condensed Consolidated Statements of Cash Flows. ~~Any gain~~

Vendor-Based Financing Arrangements

On occasion, the Company enters into long-term vendor-based financing arrangements with suppliers to obtain products, services or ~~loss realized upon derecognition has been included~~property in ~~other expense, net or restructuring charges~~exchange for extended payment terms. During thethree months ended March 31, 2022, the Company entered into a vendor-based financing agreement with a principal amount of $18.5 million to finance the acquisition of certain internal use software licenses which is being paid in annual installments over a five-year term. The payments associated with this arrangement are classified as financing activities on the Condensed Consolidated Statements of ~~Operations, based upon~~Cash Flows. The Company has not entered into any other similar arrangements in the ~~rationale~~current year period.

Finance Leases

See Note 3, Leases, for ~~the termination. For the three and nine months ended September 30, 2017, the non-cash effects~~additional information related to the derecognition of (i) the property and equipment totaled $5.3 million and $14.6 million, respectively, and (ii) the corresponding financing obligations totaled $5.6 million and $15.2 million respectively. For the nine months ended September 30, 2016, there was one termination related to these financed properties, which was the Austin, Texas facility purchase noted above. Unless terminated early, upon the expiration of the term of the remaining related party financing agreements, the net remaining financing obligation of $155.2 million will be settled by the return of the assets to the owner and has been included in other non-current liabilities on the Condensed Consolidated Balance Sheets.Company's finance leases.

In May 2017, the Company entered into a purchase and sale agreement under which Veritiv agreed to sell the previously acquired Austin, Texas facility to an unrelated third party. Upon the closing of the sale, Veritiv entered into a lease of the facility for an initial period of ten years with two optional five-year renewal terms. The sale-leaseback transaction does not provide for any continuing involvement by the Company other than a normal lease for use of the property during the lease term. The transaction resulted in net cash proceeds of $9.1 million and a related deferred gain of $5.4 million. The Company expects to recognize the gain over the initial ten-year lease period on a straight-line basis as a reduction to selling and administrative expenses in the Condensed Consolidated Statements of Operations. The current portion of the deferred gain is included in other accrued liabilities and the non-current portion of the deferred gain is included in other non-current liabilities on the Condensed Consolidated Balance Sheets.

6. INCOME TAXES

The ~~Company’s provision (benefit)~~Company calculated the expense for income taxes ~~for~~during the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016 is based on~~2022, by applying an estimate of the ~~estimated~~ annual effective tax rate ~~plus any~~for the full fiscal year to "ordinary" income (pre-tax income excluding unusual or infrequently occurring discrete ~~items.~~items) for the reporting periods.

The following table presents the ~~provision~~Company's expense for income taxes and the effective tax ~~rates for the three and nine months ended September 30, 2017 and 2016:~~rates:


	Three Months Ended March 31,
(in millions)	2023			2022
Income before income taxes	$	89.2		$	84.3
Income tax expense	20.5			5.8
Effective tax rate	23.0		%	6.9		%

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017 2016 2017 2016
Income (loss) before income taxes $ (18.3 ) $ 13.6
$ (38.7 ) $ 35.2
Income tax expense (benefit) (4.0 ) 8.0
(13.1 ) 18.4
Effective tax rate 21.9 % 58.8 % 33.9 % 52.3 %

The difference between the ~~Company’s~~Company's effective tax rates for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022 and the U.S. statutory tax rate of ~~35.0%~~21.0% primarily relates to ~~non-deductible expenses,~~ state income taxes (net of

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federal income tax benefit), vesting of stock compensation and ~~the Company's income (loss) by jurisdiction.~~non-deductible expenses. Additionally, the effective tax ~~rates~~rate for the three ~~and nine~~ months ended ~~September 30, 2017 include~~March 31, 2022 includes recognition of a deferred tax asset on the Company's investment in a foreign subsidiary.

7. DEFINED BENEFIT PLANS

Veritiv maintains an open defined benefit pension plan in the U.S. for employees covered by certain collectively bargained agreements. Veritiv also maintains a defined benefit plan in the U.S., which includes frozen cash balance accounts for certain former Unisource employees, and formerly maintained similar plans for Canadian employees prior to the sale of ~~tax credits and the impact of impairing non-deductible goodwill.~~Veritiv Canada, Inc. No other employees participate in Veritiv-sponsored defined benefit pension plans.

~~In conjunction with the third quarter of 2017 filing of Veritiv's 2016 U.S. federal tax return and amended 2015 and 2014 U.S. federal tax returns,~~Effective December 1, 2021, the Company ~~recognized~~divided the U.S. Veritiv Pension Plan by establishing a ~~$3.1 million~~new Veritiv Hourly Pension Plan to provide benefits to certain employees who were accruing a benefit ~~for credits related to foreign taxes and research and experimentation activities. Additionally, an estimate of 2017 tax credits is included in our estimated annual effective tax rate.~~

~~The effective tax rate may vary significantly due to potential fluctuations in~~under the ~~amount and source, including both foreign and domestic, of pre-tax income and changes in amounts of non-deductible expenses and other items.~~

~~7. RELATED PARTY TRANSACTIONS~~

~~Agreements with the UWWH Stockholder~~

~~On March 22, 2017, UWW Holdings, LLC (the "UWWH Stockholder"), one of Veritiv's existing stockholders and the former sole stockholder of UWWH, sold 1.80 million shares of~~U.S. Veritiv common stock in a block trade. The Company did not sell any shares and did not receive any of the proceeds. In conjunction with this transaction, Veritiv incurred approximately $0.2 million in transaction-related fees, which are included in selling and administrative expenses on the Condensed Consolidated Statements of Operations. The UWWH Stockholder beneficially owned 27.3% of Veritiv's outstanding common stock as of September 30, 2017, based on publicly available data.

~~In January 2017, in connection with the Tax Receivable Agreement ("TRA") executed at the time of the Merger, Veritiv paid $8.7 million total, of which $8.5 million was the principal amount,~~Pension Plan pursuant to the ~~UWWH Stockholder for~~terms of a collective bargaining agreement. Veritiv currently has the ~~utilization~~intent to terminate and settle the U.S. Veritiv Pension Plan by the end of ~~pre-merger net operating losses ("NOL" or "NOLs") in its 2015 federal and state tax returns. See~~ ~~Note 9, Fair Value Measurements, for additional information regarding the TRA.~~2023. The Veritiv Hourly Pension Plan will remain open.

~~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 and related private placement, Georgia-Pacific, as joint owner of the UWWH Stockholder, is a related party.

~~The following tables summarize the financial impact of these related party transactions with Georgia-Pacific:~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017 2016 2017 2016
Sales to Georgia-Pacific, reflected in net sales $ 8.6
$ 8.5
$ 24.9
$ 26.6
Purchases of inventory from Georgia-Pacific, recognized in cost of products sold 45.7
71.4
138.0
174.3

(in millions) September 30, 2017 December 31, 2016
Inventories purchased from Georgia-Pacific that remained on Veritiv's balance sheet $ 23.5
$ 24.8
Related party payable to Georgia-Pacific 11.2
9.0
Related party receivable from Georgia-Pacific 3.8
3.9

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Additionally, in April 2016, Veritiv assumed ownership of a warehouse and distribution facility located in Austin, Texas that was subleased from Georgia-Pacific. The Company exercised its right of first refusal and matched a $5.4 million offer from an unrelated third party to purchase the facility directly from the owner. This transaction was accounted for as a settlement of the financing obligation related to the facility. Accordingly, Veritiv recognized a $1.3 million loss on the transaction, which is reflected in other expense,Total net ~~on the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2016.~~

~~8. DEFINED BENEFIT PLANS~~

~~In conjunction with the Merger, Veritiv assumed responsibility for Unisource’s defined benefit plans and Supplemental Executive Retirement Plans in the U.S. and Canada. Net~~ periodic benefit cost (credit) associated with these plans is summarized below:


	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
(in millions)	U.S.		U.S.		Canada
Components of net periodic benefit cost (credit):
Service cost	$	0.4	$	0.8	$	0.1

Interest cost	$	0.6	$	0.3	$	0.6
Expected return on plan assets	(0.6)		(0.5)		(1.1)



Total other components	$	0.0	$	(0.2)	$	(0.5)
Net periodic benefit cost (credit)	$	0.4	$	0.6	$	(0.4)

The components of net periodic benefit cost (credit) other than the service cost component are included in other (income) expense, net on the Condensed Consolidated Statements of Operations. Amounts are generally amortized from accumulated other comprehensive loss over the expected future working lifetime of active plan participants.

Three Months Ended September 30, 2017 Three Months Ended September 30, 2016
(in millions) U.S. Canada U.S. Canada
Components of net periodic benefit cost (credit):
Service cost $ 0.5
$ 0.0
$ 0.4
$ 0.1
Interest cost 0.6
0.8
0.7
0.8
Expected return on plan assets (1.2 ) (1.0 ) (1.2 ) (0.9 )
Amortization of net loss 0.1
0.0
0.0
0.0
Net periodic benefit cost (credit) $ 0.0
$ (0.2 ) $ (0.1 ) $ 0.0

Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
(in millions) U.S. Canada U.S. Canada
Components of net periodic benefit cost (credit):
Service cost $ 1.5
$ 0.2
$ 1.3
$ 0.2
Interest cost 2.0
2.1
2.5
2.4
Expected return on plan assets (3.8 ) (2.8 ) (3.8 ) (2.7 )
Amortization of net loss 0.1
0.1
0.1
0.1
Net periodic benefit cost (credit) $ (0.2 ) $ (0.4 ) $ 0.1
$ 0.0

9.8. FAIR VALUE MEASUREMENTS

At ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, the carrying amounts of cash and cash equivalents, receivables, payables, ~~and~~ other components of other current assets and other ~~current~~accrued liabilities, and the short-term debt associated with the commercial card program approximate their fair values due to the short maturity of these items.

~~Certain of the Company's assets~~ Cash and ~~liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at their fair values on a nonrecurring basis as a result of impairment charges. During the~~ ~~Company's review of its intangible assets for possible impairment indicators, management determined that the carrying values of the goodwill and customer relationship intangible assets allocated~~cash equivalents may include highly-liquid investments with original maturities to the ~~logistics solutions business were fully impaired. The impairments were determined after a review~~Company of the business's forecasted revenues and estimated cash flows (Level 3 data). The impairment charges were primarily a result of lower forecasted sales growth, due to expected changes in our growth strategy and margin compression due to increased competition. The fair value of these assets was derived using discounted cash flow analyses based on Level 3 inputs. ~~As a result, the Company recorded $7.7 million in non-restructuring impairment charges for the~~ three months ~~ended September 30, 2017 related to its logistics solutions business's goodwill and customer relationship intangible assets. See~~ ~~Note 4, Goodwill~~or less that are readily convertible into known amounts of cash.

Debt and Other ~~Intangible Assets~~, for additional information regarding the Company's goodwill and other intangible assets. For the nine months ended September 30, 2017, the Company recognized $8.4 million in non-restructuring impairment charges related to the previously noted goodwill and customer relationshipObligations

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intangible asset impairments, as well as a software asset which will not be placed into service and has no alternative use. For the three and nine months ended September 30, 2016, the Company recognized $3.1 million and $4.0 million, respectively, in non-restructuring impairment charges related to its Publishing segment's customer relationship intangible asset, software assets and the sale of a facility. The impairment charges for 2017 and 2016 were recorded in selling and administrative expenses on the Condensed Consolidated Statements of Operations.

~~The Company's liabilities disclosed at fair value at September 30, 2017 were as follows:~~

(in millions) Total
Level 1
Level 2
Level 3
ABL Facility $ 969.3

$ 969.3

Tax Receivable Agreement 61.0

61.0
Contingent Consideration: Earn-out 30.0
30.0

~~The Company's liabilities disclosed at fair value at December 31, 2016 were as follows:~~

(in millions) Total Level 1 Level 2 Level 3
ABL Facility $ 726.9

$ 726.9

Tax Receivable Agreement 67.9

67.9

Borrowings under the ABL Facility are at variable market interest rates, and accordingly, the carrying amount approximates fair ~~value.~~

Atvalue, which is a Level 2 measurement. The Company's one interest rate cap agreement, which was related to the ~~time~~ABL Facility, expired on September 13, 2022. Prior to its expiration, the fair value of the ~~Merger, the Company recorded a $59.4 million contingent liability associated with the TRA at fair value using~~interest rate cap was derived from a discounted cash flow ~~model that reflected management's expectations about probability of payment. The fair value~~analysis based on the terms of the ~~TRA is a Level 3 measurement, which relied upon both~~agreement and Level 2 data (publicly observable data such as market interest rates) and Level 3 data (internal data such as the Company’s projected revenues, taxable income and assumptions about the utilization of Unisource’s NOLs, attributable to taxable periods prior to the Merger, by the Company). The amount payable under the TRA is contingent on the Company generating a certain level of taxable income prior to the expiration of the NOL carryforwards. Moreover, future trading of Company stock by significant stockholders may result in additional ownership changes as defined under Section 382 of the Internal Revenue Code, further limiting the use of Unisource's NOLs and the amount ultimately payable under the TRA. The contingent liability is remeasured at fair value at each reporting period end with the change in fair value recognized in other expense, net on the Condensed Consolidated Statements of Operations. At September 30, 2017, the Company remeasured the contingent liability using a discount rate of 4.3% (Moody's daily long-term corporate BAA bond yield).

~~The following table provides a reconciliation of the beginning and ending balance of the TRA contingent liability~~ for the ~~three and nine months ended September 30, 2017:~~

(in millions) TRA Contingent Liability
Balance at December 31, 2016 $ 67.9
Change in fair value adjustment recorded in other expense, net 0.9
Principal payment (8.5 )
Balance at March 31, 2017 60.3
Change in fair value adjustment recorded in other expense, net 1.1
Balance at June 30, 2017 61.4
Change in fair value adjustment recorded in other expense, net (0.4 )
Balance at September 30, 2017 $ 61.0

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~~The following table provides a reconciliation of the beginning and ending balance of the TRA contingent liability~~forward interest rate curve adjusted for the ~~three~~Company's credit risk and ~~nine months ended September 30, 2016:~~

(in millions) TRA Contingent Liability
Balance at December 31, 2015 $ 63.0
Change in fair value adjustment recorded in other expense, net 1.8
Balance at March 31, 2016 64.8
Change in fair value adjustment recorded in other expense, net 2.0
Balance at June 30, 2016 66.8
Change in fair value adjustment recorded in other expense, net 1.0
Balance at September 30, 2016 $ 67.8

~~For the TRA contingent liability, there have been no transfers between the fair value measurement levels~~was not significant for the ~~three~~periods presented in this report. See Note 5, Debt, for additional information regarding the Company's ABL Facility and ~~nine months ended September 30, 2017. The Company recognizes transfers between the fair value measurement levels at the end of the reporting period.~~other obligations.

~~The preliminary purchase price allocation for the acquisition of AAC, described in~~ ~~Note 2, 2017 Acquisition~~, includes $30.0 million for the estimated fair value of an earn-out liability. The maximum amount payable for the earn-out is $50.0 million payable in increments at the first and second anniversaries of the Acquisition Date. The final earn-out amount will be determined based on actual growth rates in revenue and gross profit. The preliminary fair value estimate was based on historic growth patterns and future forecasts, which are Level 3 data. Valuation inputs also included a discount rate of 8.3%. Actual results may differ from these estimates.

~~10.~~9. EARNINGS ~~(LOSS)~~ PER SHARE

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

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A summary of the numerators and denominators used in the basic and diluted earnings ~~(loss)~~ per share calculations is as follows:


	Three Months Ended March 31,
(in millions, except per share data)	2023		2022
Numerator:


Net income	$	68.7	$	78.5

Denominator:
Weighted-average shares outstanding – basic	13.53		14.77
Dilutive effect of stock-based awards	0.21		0.55
Weighted-average shares outstanding – diluted	13.74		15.32

Earnings per share:




Basic	$	5.08	$	5.31
Diluted	$	5.00	$	5.12

Antidilutive stock-based awards excluded from computation of diluted earnings per share ("EPS")	0.02		0.14
Performance stock-based awards excluded from computation of diluted EPS because performance conditions had not been met	0.08		0.00

10. SHAREHOLDERS' EQUITY

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions, except per share data) 2017 2016 2017 2016
Numerator:
Net income (loss) $ (14.3 ) $ 5.6
$ (25.6 ) $ 16.8

Denominator:
Weighted average number of shares outstanding – basic 15.70
16.00
15.70
16.00
Dilutive effect of stock-based awards —
0.27
—
0.05
Weighted average number of shares outstanding – diluted 15.70
16.27
15.70
16.05

Earnings (loss) per share:
Basic earnings (loss) per share $ (0.91 ) $ 0.35
$ (1.63 ) $ 1.05
Diluted earnings (loss) per share $ (0.91 ) $ 0.34
$ (1.63 ) $ 1.04

Antidilutive stock-based awards excluded from computation of diluted earnings per share ("EPS") 0.68
0.00
0.66
0.20
Performance stock-based awards excluded from computation of diluted EPS because performance conditions had not been met 0.48
0.33
0.48
0.33

Dividends

~~11. ACCUMULATED OTHER COMPREHENSIVE LOSS~~

The following table ~~provides~~summarizes the Company's dividend declarations and payments made during the current year period. There were no comparable transactions in the prior year period.


Declaration Date	Record Date	Payable Date	Dividend Per Share		Payment (in millions)
February 27, 2023	March 9, 2023	March 31, 2023	$	0.63	$	8.5
May 8, 2023	May 18, 2023	June 5, 2023	0.63		N/A


Total			$	1.26	$	8.5

The payment of future dividends remains subject to the discretion of the Company's Board of Directors and will depend upon various factors then existing, including earnings, financial condition, results of operations, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by applicable law, general business conditions and other factors that Veritiv's Board of Directors may deem relevant.

Treasury Stock - Share Repurchase Program

On March 1, 2022, Veritiv announced that its Board of Directors authorized a $200 million share repurchase program (the "2022 Share Repurchase Program"). The 2022 Share Repurchase Program authorizes the Company, from time to time, to purchase shares of its common stock through open market transactions, privately negotiated transactions, forward, derivative or accelerated repurchase transactions, tender offers or otherwise, including Rule 10b5-1 trading plans, in accordance with all applicable securities laws and regulations. The timing and method of any repurchases, which will depend on a variety of market factors, including market conditions, are subject to results of operations, financial conditions, cash requirements and other factors. This authorization may be suspended, terminated, increased or decreased by the Board of Directors at any time. During the month ended March 31, 2022, the Company repurchased 78,025 shares of its common stock at a cost of approximately $10.4 million under its 2022 Share Repurchase Program. During the year ended December 31, 2022, the Company completed its repurchases under the 2022 Share Repurchase Program by repurchasing 1,564,420 shares of its common stock at a cost of $200 million, reaching the program's authorized repurchase limit.

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Veritiv Omnibus Incentive Plan

In accordance with the Company's 2014 Omnibus Incentive Plan, as amended and restated as of March 8, 2017, shares of the Company's common stock were issued to plan participants whose Restricted Stock Units, Performance Share Units, Market Condition Performance Share Units and/or non-employee director grants (grants not deferred) vested during those periods. The net share issuance is included on the Condensed Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2023 and 2022. The related cash flow impacts are included in financing activities on the Condensed Consolidated Statements of Cash Flows. For additional information related to these plans, refer to the Company's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2022.

See the table below for information related to these transactions.



(in millions)	2023	2022
Three months ended March 31,
Shares issued	0.1	0.7
Shares recovered for minimum tax withholding	(0.1)	(0.2)
Net shares issued	0.0	0.5

Accumulated Other Comprehensive Loss ("AOCL")

Comprehensive income (loss) is reported on the Condensed Consolidated Statements of Comprehensive Income (Loss) and consists of net income and other gains and losses affecting shareholders' equity that, under U.S. GAAP, are excluded from net income.

The following tables provide the components of ~~accumulated other comprehensive loss ("AOCL") at September 30, 2017~~AOCL (amounts are shown net of their related income tax ~~effect,~~effects, if any):


(in millions)	Foreign currency translation adjustments		Retirement liabilities		AOCL
Balance at December 31, 2022	$	(16.6)	$	3.9	$	(12.7)

Unrealized net gains (losses) arising during the period	2.9		(0.1)		2.8

Net current period other comprehensive income (loss)	2.9		(0.1)		2.8

Balance at March 31, 2023	$	(13.7)	$	3.8	$	(9.9)


(in millions)	Foreign currency translation adjustments		Retirement liabilities		Interest rate cap		AOCL
Balance at December 31, 2021	$	(25.2)	$	1.0	$	(0.1)	$	(24.3)

Unrealized net gains (losses) arising during the period	2.6		0.0		0.0		2.6

Net current period other comprehensive income (loss)	2.6		0.0		0.0		2.6
Balance at March 31, 2022	$	(22.6)	$	1.0	$	(0.1)	$	(21.7)

(in millions) Foreign currency translation adjustments Retirement liabilities Interest rate swap AOCL
Balance at December 31, 2016 $ (29.2 ) $ (9.1 ) $ (0.7 ) $ (39.0 )
     Unrealized net gains (losses) arising during the period 2.8
0.1
(0.1 ) 2.8
Net current period other comprehensive income (loss) 2.8
0.1
(0.1 ) 2.8
Balance at March 31, 2017 (26.4 ) (9.0 ) (0.8 ) (36.2 )
     Unrealized net gains (losses) arising during the period 2.6
—
—
2.6
Net current period other comprehensive income (loss) 2.6
—
—
2.6
Balance at June 30, 2017 (23.8 ) (9.0 ) (0.8 ) (33.6 )
     Unrealized net gains (losses) arising during the period 2.4
—
—
2.4
     Amounts reclassified from AOCL —
—
0.1
0.1
Net current period other comprehensive income (loss) 2.4
—
0.1
2.5
Balance at September 30, 2017 $ (21.4 ) $ (9.0 ) $ (0.7 ) $ (31.1 )

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~~The following table provides the components of AOCL at September 30, 2016 (amounts are shown net of their related income tax effect, if any):~~

(in millions) Foreign currency translation adjustments Retirement liabilities Interest rate swap AOCL
Balance at December 31, 2015 $ (27.1 ) $ (7.4 ) $ (0.5 ) $ (35.0 )
     Unrealized net gains (losses) arising during the period 3.8
—
(0.3 ) 3.5
     Amounts reclassified from AOCL —
0.1
—
0.1
Net current period other comprehensive income (loss) 3.8
0.1
(0.3 ) 3.6
Balance at March 31, 2016 (23.3 ) (7.3 ) (0.8 ) (31.4 )
     Unrealized net gains (losses) arising during the period (1.6 ) —
0.0
(1.6 )
     Amounts reclassified from AOCL —
0.1
—
0.1
Net current period other comprehensive income (loss) (1.6 ) 0.1
—
(1.5 )
Balance at June 30, 2016 (24.9 ) (7.2 ) (0.8 ) (32.9 )
     Unrealized net gains (losses) arising during the period (1.6 ) —
—
(1.6 )
Net current period other comprehensive income (loss) (1.6 ) —
—
(1.6 )
Balance at September 30, 2016 $ (26.5 ) $ (7.2 ) $ (0.8 ) $ (34.5 )

~~12.~~11. 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.

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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 results of operations, financial condition or cash flows.

~~Escheat Audit~~MEPPs

The Company records an estimated undiscounted charge when it becomes probable that it has incurred a withdrawal liability when exiting a MEPP. Final charges for MEPP withdrawals are not known until the plans issue their respective determinations. As a result, these estimates may increase or decrease depending upon the final determinations. Charges not related to the Company's restructuring efforts are recorded as distribution expenses on the Condensed Consolidated Statements of Operations. Initial amounts are recorded as other non-current liabilities on the Condensed Consolidated Balance Sheets.

Teamsters Pension Trust Fund of Philadelphia and Vicinity

During ~~2013, Unisource was notified by~~ the ~~State~~fourth quarter of ~~Delaware that it 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~~2022, in the ~~audit process,~~course of negotiations for a collective bargaining agreement, Veritiv negotiated a complete withdrawal from the Teamsters Pension Trust Fund of Philadelphia and Vicinity to take effect on December 31, 2024, and recognized an estimated complete withdrawal liability of $4.9 million as of December 31, 2022, which ~~is conducted by an outside firm on behalf~~was unchanged as of March 31, 2023. The withdrawal charge was recorded in distribution expenses as it was not related to a restructuring activity. As of March 31, 2023, the ~~states. While~~Company has not yet received the ~~original time period~~determination letter for the ~~audit was~~complete withdrawal from ~~1981 to present, recent legal developments have resulted in Delaware narrowing~~ the ~~time period from 1998 to present.~~Teamsters Pension Trust Fund of Philadelphia and Vicinity. The Company ~~has been informed~~expects that ~~similar audits have generally taken four years or more to complete.~~payments will occur over an approximate 19-year period.

InMinneapolis Food Distributors Ind Pension Plan

During the ~~third~~fourth quarter of ~~2017,~~2021, in the course of negotiations for a collective bargaining agreement, Veritiv negotiated a complete withdrawal from the Minneapolis Food Distributors Ind Pension Plan to take effect on July 31, 2022, and recognized an estimated complete withdrawal liability of $0.5 million as of December 31, 2021. During the first quarter of 2023, the Company ~~recorded an estimated~~received the determination letter and recognized a final withdrawal liability ~~with respect to certain transactions in connection with the pending audit.~~of $0.6 million. The Company ~~does not consider this amount~~expects to be material to the Company’s results of operations or financial condition. There are other transactions under audit based upon which potential liability cannot be reasonably estimated at this time. Any claims or liabilities resulting from the audit could have a material impact on the Company’s results of operations, financial condition or cash flows. The Company will continue to monitor the matter for any developments that would make ~~the loss contingency associated with other transactions under audit probable or reasonably estimable.~~payments over an approximate four-year period.

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~~New England~~Western Pennsylvania Teamsters and ~~Trucking Industry~~Employers Pension Fund

During the first quarter of 2020, Veritiv negotiated the complete withdrawal from the Western Pennsylvania Teamsters and Employers Pension Fund (the "Western Pennsylvania Fund"), a MEPP related to the second bargaining unit at its Warrendale, Pennsylvania location and recognized an estimated complete withdrawal liability of $7.1 million, which was unchanged as of March 31, 2023. During the second quarter of ~~2017,~~2019, in the course of negotiations for a collective bargaining agreement, Veritiv negotiated a partial withdrawal from the Western Pennsylvania Fund and recognized an estimated partial withdrawal liability of $6.5 million, which was unchanged as of March 31, 2023. As of March 31, 2023, the Company ~~closed its facility in Wilmington, Massachusetts as part of its plan to consolidate operations in~~has not yet received the ~~northeastern United States. In connection with this closure,~~determination letters for the ~~Company ceased contributions to the New England Teamsters~~full and Trucking Industry Pension Fund (the “NE Fund”), a multi-employer pension plan, for participating employees who previously worked at this facility. In June 2017, the Company was presented with a Demand for Payment of Withdrawal Liability (the “Demand”)partial withdrawals from the NE Fund in the amount of $10.9 million, payable in 240 equal monthly installments beginning in August 2017. The Company has assessed the merits of the Demand and, pursuant to Employee Retirement Income Security Act of 1974 ("ERISA") regulations, requested review of the Demand. The NE Fund responded, confirming its Demand and the Company is considering arbitration. A charge for the Demand was recorded as a component of restructuring charges in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2017. Depending on the Company's decision whether or not to arbitrate and the decision of such arbitration, an adjustment to the charge recorded for the withdrawal liability contained in the Demand may be required.

Also as part of this same consolidation, the Company's Windsor and Middletown, Connecticut facilities were closed and relocated to Enfield, Connecticut. Employees at both the Windsor and Middletown locations were covered by separate collective bargaining agreements. Employees at the Middletown location and those subject to this agreement also participate in the NEWestern Pennsylvania Fund. The Company is currently negotiating a new collective bargaining agreement for the Enfield, Connecticut facility to replace the legacy Windsor and Middletown, Connecticut agreements. If, as a result of these negotiations, participation in the NE Fund ends, the Company may incurexpects that payments will occur over an ~~additional withdrawal liability charge.~~approximate 20-year period, which could run consecutively.

12. SEGMENT AND OTHER INFORMATION

~~13. SEGMENT INFORMATION~~

Veritiv's business is organized under ~~four~~three reportable segments: Packaging, Facility Solutions ~~Print, and Publishing~~ and Print ~~Management ("Publishing"). This segment structure is consistent with the way the Chief Operating Decision Maker, who is Veritiv's Chief Executive Officer, makes operating decisions~~Solutions. See Note 2, Revenue Recognition and ~~manages the growth and profitability~~Credit Losses, for descriptions of the ~~Company’s business. The Company also has a~~Company's reportable segments and Corporate & Other category, which includes certain assets and costs not primarily attributable to any of the reportable segments, as well as the Veritiv logistics solutions business, which provides transportation and warehousing solutions.Other.

The following ~~tables present~~table presents net sales, Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring charges, ~~(income),~~net, integration and acquisition ~~and integration~~ expenses and other similar charges including any severance costs, costs associated with warehouse and office openings or closings, consolidation, and relocation and other business optimization expenses, stock-based compensation expense, changes in the LIFO reserve, non-restructuring asset impairment charges, non-restructuring severance charges, non-restructuring pension charges (benefits), fair value adjustments ~~on the~~related to contingent ~~liability associated with the TRA~~liabilities assumed in mergers and acquisitions and certain other adjustments), which is the metric management uses to assess operating performance of the segments, and certain other measures for each of the reportable segments and Corporate & Other for the periods presented:

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(in millions)	Packaging		Facility Solutions		Print Solutions		Total Reportable Segments		Corporate & Other		Total
Three Months Ended March 31, 2023
Net sales	$	895.4	$	180.2	$	434.6	$	1,510.2	$	—	$	1,510.2
Adjusted EBITDA	96.4		15.4		37.2		149.0		(45.2)
Depreciation and amortization	5.4		1.2		1.1		7.7		2.4		10.1


Three Months Ended March 31, 2022
Net sales	$	1,003.1	$	229.4	$	596.6	$	1,829.1	$	29.0	$	1,858.1
Adjusted EBITDA	97.4		13.4		54.6		165.4		(45.9)
Depreciation and amortization	6.3		1.8		1.2		9.3		3.4		12.7
Restructuring charges, net	1.6		0.4		0.7		2.7		0.0		2.7

(in millions) Packaging Facility Solutions Print Publishing Total Reportable Segments Corporate & Other Total
Three Months Ended September 30, 2017
Net sales $ 799.6
$ 339.6
$ 701.6
$ 238.7
$ 2,079.5
$ 37.3
$ 2,116.8
Adjusted EBITDA 62.1
10.3
13.1
5.5
91.0
(46.9 )

Depreciation and amortization 4.0
1.6
2.7
0.2
8.5
4.6
13.1
Restructuring charges 5.8
1.9
5.9
0.0
13.6
(10.9 ) 2.7

Three Months Ended September 30, 2016
Net sales $ 730.1
$ 328.7
$ 788.2
$ 248.4
$ 2,095.4
$ 31.2
$ 2,126.6
Adjusted EBITDA 59.5
13.0
20.0
6.6
99.1
(42.0 )

Depreciation and amortization 3.1
1.5
3.1
0.8
8.5
4.9
13.4
Restructuring charges 2.2
1.0
2.6
0.0
5.8
0.0
5.8

Nine Months Ended September 30, 2017
Net sales $ 2,266.0
$ 975.5
$ 2,095.1
$ 696.6
$ 6,033.2
$ 107.1
$ 6,140.3
Adjusted EBITDA 166.7
25.1
44.8
17.6
254.2
(137.8 )
Depreciation and amortization 10.5
4.5
7.9
1.3
24.2
15.7
39.9
Restructuring charges 12.3
5.2
12.2
0.0
29.7
0.3
30.0

Nine Months Ended September 30, 2016
Net sales $ 2,106.4
$ 951.6
$ 2,299.0
$ 763.2
$ 6,120.2
$ 87.0
$ 6,207.2
Adjusted EBITDA 165.4
34.3
55.7
16.4
271.8
(129.7 )
Depreciation and amortization 9.3
4.5
9.5
2.5
25.8
14.7
40.5
Restructuring charges 2.6
1.5
2.9
0.0
7.0
0.2
7.2

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The table below presents a reconciliation of net income ~~(loss) before income taxes~~ as reflected inon the Condensed Consolidated Statements of Operations to Adjusted EBITDA for the reportable segments:


	Three Months Ended March 31,
(in millions)	2023		2022
Net income	$	68.7	$	78.5
Interest expense, net	4.7		3.5
Income tax expense	20.5		5.8
Depreciation and amortization	10.1		12.7
Restructuring charges, net	—		2.7

Facility closure charges, including (gain) loss from asset disposition	(0.1)		(0.6)
Stock-based compensation	1.8		2.8
LIFO reserve (decrease) increase	(2.5)		11.0

Non-restructuring severance charges	0.3		1.7
Non-restructuring pension charges (benefits)	0.2		—





Other	0.1		1.4
Adjustment for Corporate & Other	45.2		45.9
Adjusted EBITDA for reportable segments	$	149.0	$	165.4

In February 2021, a Veritiv warehouse incurred significant damage as a result of a severe weather event, which included damage to the building structure and contents, as well as a loss of inventory. The total amount of the incurred loss and restoration cost is currently estimated to be approximately $13 million, the majority of which is expected to be covered by the Company's various insurance policies. From the date of the incident, a total net benefit of $2.8 million has been recognized in selling and administrative expenses on the Company's statements of operations, of which $0.1 million of expense and $2.1 million of benefit was recognized for the three months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023 and 2022, the Company received none and $2.1 million, respectively, in reimbursements related to the structural damage, which is reported as proceeds from insurance related to property and equipment on the Condensed Consolidated Statement of Cash Flows. Insurance proceeds not related to the structural damage are reported as cash flows from operating activities.

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2017 2016 2017 2016
Income (loss) before income taxes $ (18.3 ) $ 13.6
$ (38.7 ) $ 35.2
Interest expense, net 8.3
8.2
22.1
21.1
Depreciation and amortization 13.1
13.4
39.9
40.5
Restructuring charges 2.7
5.8
30.0
7.2
Stock-based compensation 3.8
2.1
11.6
7.2
LIFO reserve increase (decrease) 3.7
0.4
3.4
(2.7 )
Non-restructuring asset impairment charges 7.7
3.1
8.4
4.0
Non-restructuring severance charges 0.5
0.2
1.5
2.4
Non-restructuring pension charges 3.2
2.3
2.1
2.3
Acquisition and integration expenses 14.2
7.3
28.1
19.6
Fair value adjustments on TRA contingent liability (0.4 ) 1.0
1.6
4.8
Other 5.6
(0.3 ) 6.4
0.5
Adjustment for Corporate & Other 46.9
42.0
137.8
129.7
Adjusted EBITDA for reportable segments $ 91.0
$ 99.1
$ 254.2
$ 271.8

~~The following table summarizes total assets as of September 30, 2017:~~

(in millions) September 30, 2017
December 31, 2016
Packaging $ 1,137.3
$ 875.9
Facility Solutions 424.1
397.9
Print 883.6
874.1
Publishing 178.3
170.0
Corporate & Other 151.8
165.8
Total assets $ 2,775.1
$ 2,483.7

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ITEM 2. ~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained in this report regarding the ~~Company’s~~Company's future operating results, performance, strategy, business plans, prospects and guidance, statements related to customer demand, supply and demand imbalances, the expected competitive landscape, the expected impact of COVID-19 and any other statements not constituting historical fact are "forward-looking statements" subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Where possible, the words "believe," "expect," "anticipate," "continue," "intend," "will," "may," "should," ~~"will,~~"could," "would," ~~"planned,~~"plan," ~~"estimated,~~"estimate," "predict," "potential," "goal," "outlook,~~" "may," "predicts," "could,~~" or the negative of such terms, or other comparable expressions, ~~as they relate to the Company or its business,~~ have been used to identify such forward-looking statements. All forward-looking statements reflect only the ~~Company’s~~Company's current beliefs and assumptions with respect to future ~~operating~~ results ~~performance, business plans, prospects, guidance~~ and other matters, and are based on information currently available to the Company. Accordingly, the statements are subject to significant risks, uncertainties and contingencies, which could cause the ~~Company’s~~Company's actual operating results, performance, strategy, business plans, prospects or ~~prospects~~guidance to differ materially from those expressed in, or implied by, these statements.

Factors that could cause actual results to differ materially from current expectations include the risks and other factors described under "Risk Factors" and elsewhere in our Annual Report on Form 10-K and ~~elsewhere~~ in the ~~Company’s~~Company's other publicly available reports filed with the Securities and Exchange Commission ("SEC")~~, which contain a discussion of various factors that may affect the Company’s business or financial results.~~. Such risks and other factors, which in some instances are beyond the ~~Company’s~~Company's control, include: the industry-wide decline in demand for paper and related products; increased competition from existing and non-traditional sources; adverse developments in general business and economic conditions as well as conditions in the global capital and credit markets; foreign currency fluctuations; our ability to collect trade receivables from customers to whom we extend credit; our ability to attract, train and retain highly qualified employees; the effects of work stoppages, union negotiations and labor disputes; the loss of any of our significant customers; changes in business conditions in our international operations; procurement and other risks in obtaining packaging, ~~paper~~facility products and ~~facility products~~paper from our suppliers for resale to our customers; changes in prices for raw materials; changes in trade policies and regulations; increases in the cost of fuel ~~cost increases; inclement weather, anti-terrorism measures~~and third-party freight and the availability of third-party freight providers; the loss of multiple significant customers; adverse developments in general business and economic conditions that could impair our ability to use net operating loss carryforwards and other disruptions to the transportation network; our dependence on a variety of IT and telecommunications systems and the Internet; our reliance on third party vendors for various services; cyber-security risks; costs to comply with laws, rules and regulations, including environmental, health and safety laws, and to satisfy any liability or obligation imposed under such laws; regulatory changes and judicial rulings impacting our business; adverse results from litigation, governmental investigations or audits, or tax-related proceedings or audits; our inability to renew existing leases on acceptable terms, negotiate rent decreases or concessions and identify affordable real estate;deferred tax assets; our ability to adequately protect our material intellectual property and other proprietary rights, or to defend successfully against intellectual property infringement claims by third parties; our ability to attract, train and retain appropriately qualified employees; our pension and health care costs and participation in multi-employer pension, health and welfare plans; ~~increasing interest rates;~~the effects of work stoppages, union negotiations and labor disputes; our ability to generate sufficient cash to service our debt; our ability to comply with the covenants contained in our debt agreements; costs to comply with laws, rules and regulations, including environmental, health and safety laws, and to satisfy any liability or obligation imposed under such laws; our ability to ~~refinance~~adequately address environmental, social and governance matters; changes in tax laws; adverse results from litigation, governmental investigations or ~~restructure~~audits, or tax-related proceedings or audits; regulatory changes and judicial rulings impacting our ~~debt on reasonable terms~~business; adverse impacts from the COVID-19 pandemic; the impact of adverse developments in general business and economic conditions as ~~might be necessary from time to time; changes~~well as conditions in ~~accounting standards~~the global capital and ~~methodologies;~~credit markets on demand for our ~~ability to realize the anticipated synergies, cost savings~~products and ~~growth opportunities from the merger transaction~~services, our business including our international operations, and our ~~ability~~customers; foreign currency fluctuations; inclement weather, widespread outbreak of an illness, anti-terrorism measures and other disruptions to ~~integrate~~our supply chain, distribution system and operations; our dependence on a variety of information technology and telecommunications systems and the ~~xpedx business with the Unisource business; the possibility of incurring expenditures in excess of those currently budgeted in connection with the integration;~~Internet; our reliance on third-party vendors for various services; cybersecurity risks; and other events of which we are presently unaware or that we currently deem immaterial that may result in unexpected adverse operating results.

For a more detailed discussion of these factors, see the information under ~~the heading~~ "Risk Factors" and elsewhere in our Annual Report on Form 10-K and in our other filings we make with the SEC. Forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, historical information should not be considered as an indicator of future performance.

The following discussion of the ~~Company’s~~Company's financial condition and results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 should be read in conjunction with the unaudited CondensedConsolidated Financial Statements and Notes thereto, included elsewhere in this report.

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Executive Overview

Results and Outlook

The COVID-19 Pandemic

The current circumstances are dynamic and the impacts of the COVID-19 pandemic on the Company's business operations, including the duration and impact on overall customer demand, supply chain disruption and inflationary pressures, cannot be reasonably estimated at this time. The extent to which the COVID-19 pandemic continues to impact the Company's business, results of operations and financial condition will depend on future developments, which are uncertain and difficult to predict. Even after the COVID-19 pandemic has subsided, the Company may experience an impact to its business as a result of any economic recession, downturn or volatility, legislative and regulatory changes or long-term changes in customer behavior. Estimates are revised as additional information becomes available.

Company Strategy

Veritiv continues to execute against its long-term strategy to be the leading provider of business-to-business packaging products and services, as well as paper and facility solutions products and services. The Company continues to invest in organic packaging growth including selling and supply chain capabilities, and to pursue inorganic packaging growth opportunities. The Company also continues to evaluate alternatives for non-core components of its business.

Business Overview

Veritiv ~~Corporation ("Veritiv" or the "Company")~~ is a leading North American business-to-business ~~distributor~~full-service provider of value-added packaging products and services, as well as facility solutions ~~print~~ and ~~publishing~~print-based products and services. ~~Additionally, Veritiv provides logistics and supply chain management solutions to its customers.~~ Veritiv was established inon July 1, 2014 following the merger ~~(the "Merger")~~ of International Paper Company's xpedx distribution solutions business and UWW Holdings, Inc., the parent company of Unisource Worldwide, Inc.

~~As described in~~ ~~Note 2, 2017 Acquisition, on August 31, 2017,~~ Veritiv completed the acquisition of All American Containers ("AAC"), a family-owned and operated distributor of rigid packaging, including plastic, glass and metal containers, caps, closures and plastic pouches.

~~Veritiv~~ operates ~~from approximately 170 distribution centers~~ primarily throughout the United States ("U.S.,") and Mexico.

On May 2, 2022, the Company sold its Veritiv Canada, Inc. business. The sale included substantially all of the Company's facility solutions and print operations in Canada, and ~~Mexico.~~a majority of the Company's Canada-based packaging business, which primarily served food service customers. On September 1, 2022, the Company sold its logistics solutions business, which provided transportation and warehousing solutions to customers in the U.S. These divestitures will allow Veritiv to continue to shift its portfolio to focus on its core packaging business, with an emphasis on higher growth, higher margin businesses, and further invest in building on its industry-leading capabilities. This report includes the financial results of the Veritiv Canada, Inc. business and the Company's logistics solutions business for their respective partial year of 2022 based on their respective sale dates.

Veritiv's business is organized under ~~four~~three reportable segments: Packaging, Facility Solutions ~~Print, and Publishing~~ and Print ~~Management ("Publishing").~~Solutions. This segment structure is consistent with the way the Chief Operating Decision Maker, who is Veritiv's Chief Executive Officer, makes operating decisions and manages the growth and profitability of the ~~Company’s~~Company's business. The Company also has a Corporate & Other category which includes certain assets and costs not primarily attributable to any of the reportable ~~segments, as well as~~segments. Prior to its divestiture in September 2022, the ~~Veritiv~~Company's logistics solutions business, which ~~provides~~provided transportation and warehousing ~~solutions.~~solutions, was also included in Corporate & Other. The following summary describes the products and services offered in each of the reportable segments:

•Packaging – Veritiv is a global provider of packaging products, services and solutions. The Packaging segment provides ~~standard as well as~~ custom and ~~comprehensive~~standard packaging solutions for customers based in North America and in key global markets. This segment services its customers with a full spectrum of packaging product materials within flexible, corrugated and fiber, ancillary packaging, rigid and equipment categories. The business is strategically focused on higher growth ~~industries~~industry sectors including ~~light industrial/general~~ manufacturing, food ~~production, fulfillment~~ and ~~internet~~beverage, wholesale and retail, healthcare and transportation, as well as ~~niche verticals~~specialty sectors based on ~~geographical~~industry and ~~functional~~product expertise. ~~Veritiv’s~~Veritiv's packaging professionals create customer value through supply chain solutions, structural and graphic packaging design and engineering, automation, workflow and equipment services ~~contract packaging~~ and ~~kitting and fulfillment.~~

kitting.

•Facility Solutions – Veritiv is a global provider of hygiene and facility solutions products and services. The Facility Solutions segment sources and sells cleaning, break-room and other supplies ~~such as~~in product categories that include towels and tissues, ~~wipers and dispensers, can liners, commercial~~food service, personal protective equipment, cleaning chemicals ~~soaps~~ and ~~sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities~~skincare, primarily in ~~the U.S., Canada and Mexico. Veritiv is a leading distributor in the Facility Solutions segment.~~ North America.

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Through this segment Veritiv manages a world class network of leading suppliers in most facilities solutions categories. Additionally, the Company offers total cost of ownership solutions with re-merchandising, budgeting and compliance reporting and inventory ~~management and a sales-force~~management. Its sales force is trained to bring leading vertical expertise to the major North American geographies.

•PrintSolutions – The Print Solutions segment helps customers optimize their printed communication by sourcing and distributing sustainable papers through a global network of suppliers. The Print Solutions segment sells and distributes commercial printing, writing and copying ~~digital, wide format~~products and ~~specialty paper products, graphics consumables and graphics equipment~~services 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.~~North America. Veritiv's broad geographic platform of operations and services, coupled with the breadth of paper and graphics products, including exclusive private brand offerings, provides a ~~foundation to service national, regional and local customers across North America.~~

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

distribution. This segment's customer base includes commercial printers, marketers, corporate end users, publishers and retailers.

Seasonality

The ~~Company’s~~Company's operating results are subject to seasonal influences. Historically, ~~the Company's~~its higher consolidated net sales ~~occur~~have occurred during the third and fourth quarters while ~~the~~its lowest consolidated net sales ~~occur~~have occurred during the first quarter. The Packaging segment net sales ~~tend to increase~~have traditionally increased each quarter throughout the year and net sales for the first quarter ~~are~~have typically been less than net sales for the fourth quarter of the preceding year. Production schedules for non-durable goods that build up to the holidays and peak in the fourth quarter drive this seasonal net sales pattern. Net sales for the Facility Solutions segment ~~tend to be highest during~~have traditionally peaked in the third ~~and fourth quarters~~quarter due to increased summer demand in the away-from-home resort, cruise and

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hospitality markets ~~activities related to~~and from back-to-school ~~and increased retail activity during the holidays.~~activities. Within the Print ~~and Publishing segments,~~Solutions segment, seasonality is driven by increased magazine advertising page counts, retail inserts, catalogs and direct mail primarily due to back-to-school, political election and holiday-related advertising and promotions in the second half of the year.

Results of Operations, Including Business Segments

The following discussion compares the consolidated operating results of Veritiv for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016:~~

Three Months Ended
September 30, Increase (Decrease) Nine Months Ended
September 30, Increase (Decrease)
(in millions) 2017 2016 $ % 2017 2016 $ %
Net sales $ 2,116.8
$ 2,126.6
$ (9.8 ) (0.5 )% $ 6,140.3
$ 6,207.2
$ (66.9 ) (1.1 )%
Cost of products sold (exclusive of depreciation and amortization shown separately below) 1,736.6
1,743.8
(7.2 ) (0.4 )% 5,026.4
5,086.2
(59.8 ) (1.2 )%
Distribution expenses 132.0
126.0
6.0
4.8 % 380.9
375.2
5.7
1.5 %
Selling and administrative expenses 228.7
207.3
21.4
10.3 % 650.4
615.9
34.5
5.6 %
Depreciation and amortization 13.1
13.4
(0.3 ) (2.2 )% 39.9
40.5
(0.6 ) (1.5 )%
Acquisition and integration expenses 14.2
7.3
6.9
94.5 % 28.1
19.6
8.5
43.4 %
Restructuring charges 2.7
5.8
(3.1 ) (53.4 )% 30.0
7.2
22.8
*
Operating income (loss) (10.5 ) 23.0
(33.5 ) *
(15.4 ) 62.6
(78.0 ) *
Interest expense, net 8.3
8.2
0.1
1.2 % 22.1
21.1
1.0
4.7 %
Other expense, net (0.5 ) 1.2
(1.7 ) *
1.2
6.3
(5.1 ) (81.0 )%
Income (loss) before income taxes (18.3 ) 13.6
(31.9 ) *
(38.7 ) 35.2
(73.9 ) *
Income tax expense (benefit) (4.0 ) 8.0
(12.0 ) *
(13.1 ) 18.4
(31.5 ) *
Net income (loss) $ (14.3 ) $ 5.6
$ (19.9 ) *
$ (25.6 ) $ 16.8
$ (42.4 ) *

* - not meaningful2022:


	Three Months Ended March 31,				Increase (Decrease)
(in millions)	2023		2022		$		%
Net sales	$	1,510.2	$	1,858.1	$	(347.9)	(18.7)%
Cost of products sold (exclusive of depreciation and amortization shown separately below)	1,144.1		1,455.4		(311.3)		(21.4)%
Distribution expenses	89.7		112.2		(22.5)		(20.1)%
Selling and administrative expenses	171.4		187.9		(16.5)		(8.8)%

Depreciation and amortization	10.1		12.7		(2.6)		(20.5)%

Restructuring charges, net	—		2.7		(2.7)		(100.0)%
Operating income	94.9		87.2		7.7		8.8%
Interest expense, net	4.7		3.5		1.2		34.3%
Other (income) expense, net	1.0		(0.6)		1.6		266.7%
Income before income taxes	89.2		84.3		4.9		5.8%
Income tax expense	20.5		5.8		14.7		253.4%


Net income	$	68.7	$	78.5	$	(9.8)	(12.5)%

The table below provides a reconciliation of Veritiv's reported net sales, calculated in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), to its organic sales, which is a non-GAAP financial measure. Organic sales is defined by the Company as: net sales on an average daily sales basis, excluding revenue from sold businesses and revenue from acquired businesses for a period of 12 months after the Company completes the acquisition. The Company believes presenting organic sales will help investors better compare period-over-period results. Other companies in the industry may calculate organic sales differently than Veritiv does, limiting its usefulness as a comparative measure.

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	Three Months Ended March 31,
	Total Company				Packaging				Facility Solutions				Print Solutions				Corporate & Other
(in millions)	2023		2022		2023		2022		2023		2022		2023		2022		2023		2022
Reported net sales	$	1,510.2	$	1,858.1	$	895.4	$	1,003.1	$	180.2	$	229.4	$	434.6	$	596.6	$	—	$	29.0

Impact of change in selling days (1)	—		—		—		—		—		—		—		—		—		—

Net sales (on an average daily sales basis)	1,510.2		1,858.1		895.4		1,003.1		180.2		229.4		434.6		596.6		—		29.0

Business divestitures (2)	—		(220.6)		—		(74.2)		—		(64.5)		—		(52.9)		—		(29.0)

Organic sales	$	1,510.2	$	1,637.5	$	895.4	$	928.9	$	180.2	$	164.9	$	434.6	$	543.7	$	—	$	—

(1) Adjustment for differences in the number of selling days, if any.

(2) Represents the net sales of each of the following divested businesses prior to its respective divestiture: Veritiv Canada, Inc. (May 2, 2022) and the logistics solutions business (September 1, 2022).

Net Sales

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2023, net sales ~~declined~~decreased by $347.9 million, or 18.7%, and organic sales decreased by $127.3 million, or 7.8%. The decrease in net sales resulting from the divestitures of the Canadian and logistics solutions businesses for the three months ended March 31, 2023, was $191.6 million and $29.0 million, respectively. After adjusting for the impact of the divestiture of the Canadian business, net sales decreased in the Print Solutions and Packaging reportable segments with Print Solutions responsible for a majority of the total decline. The decrease in net sales was primarily due to ~~decreased~~lower volumes partially offset by higher market prices. Throughout the first quarter of 2023, net sales were negatively impacted by customer inventory destocking and lower demand, primarily in the Print ~~and Publishing segments, partially offset by increased net sales~~Solutions segment. Inflationary market price increases, primarily in the Company's Packaging and ~~Facility~~Print Solutions ~~segments~~product portfolios, impacted the first quarter of 2023. To the extent feasible, the Company has adjusted its prices to reflect the impact of inflation on the cost of purchased materials and ~~Veritiv's logistics solutions business.~~services. Uncertain macroeconomic conditions may lead to a continued slow-down of broader market demand in 2023. See the "Segment Results" section for additional ~~information.~~discussion.

Cost of Products Sold (exclusive of depreciation and amortization shown separately below)

For the three ~~and nine~~ months ended ~~September 30, 2017~~,March 31, 2023, cost of products sold decreased primarily due to the divestiture of the Canadian business and lower net sales. Cost of products sold decreased at a slower rate than net sales due to improvements in pricing, sale of the lower margin Canadian business and changes in segment mix.

Distribution Expenses

For the three months ended ~~September 30, 2017, total~~March 31, 2023, distribution expenses ~~increased~~decreased by ~~$6.0 million. Distribution expenses increased $4.9~~$22.5 million, or 20.1%. The decrease was primarily due to ~~an increase~~(i) a $16.3 million decrease related to the divestiture of the Canadian business and (ii) a $4.0 million decrease in freight and logistics ~~expenses, driven mostly by increased third party~~expense, which was primarily related to third-party freight ~~transfer expenses and diesel fuel prices. The remaining increase in distribution expenses is largely the result of the acquisition of AAC.~~due to lower sales volume.

For the nine months ended September 30, 2017, distribution expenses increased by $5.7 million. Distribution expenses increased $10.8 million from an increase in freight and logistics expenses, due mostly to increased third party freight, transfer expense and diesel fuel prices and $1.2 million as a result of the acquisition of AAC. These increases were partially offset by (i) a $2.1 million decrease in facilities rent and other expense, (ii) a $1.4 million decrease in insurance expense, (iii) a $1.2 million decrease in maintenance and material expense and (iv) a $0.8 million decrease in personnel expenses. The offsetting decreases were driven primarily by warehouse consolidations.

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Selling and Administrative Expenses

For the three months ended ~~September 30, 2017,~~March 31, 2023, selling and administrative expenses ~~increased~~decreased by ~~$21.4~~$16.5 million, or 8.8%. The decrease was primarily due to (i) a ~~$6.3~~$14.3 million ~~increase~~decrease in expenses related to the divestiture of the Canadian business, (ii) a $3.8 million decrease in professional fees expense and (iii) a $1.9 million decrease in personnel expenses, ~~due in part to increased headcount to support the Company's growth strategy and increased commission expense, which was primarily due to~~partially offset by a $2.2 million lower ~~expense in 2016 resulting~~net gain from ~~the recovery of a $4.9 million commission advance, (ii) a $4.8 million increase in bad debt expense, (iii) a $4.7 million increase in asset impairments primarily related~~insurance proceeds as compared to the ~~goodwill and customer relationships in the Veritiv logistics solutions business and (iv) a $2.0 million increase related to the acquisition of AAC.~~

For the nine months ended September 30, 2017, selling and administrative expenses increased by $34.5 million due to (i) an $11.1 million increase in bad debt expense, (ii) an $11.0 million increase in personnel expenses, (iii) a $5.3 million increase in asset impairments primarily related to the goodwill and customer relationships in the Veritiv logistics solutions business, and (iv) a $2.0 million increase related to the acquisition of AAC. The increase in bad debt expense was primarily due to additional reserves related to certain customers with declining financial conditions during the current period combined with favorable collections experience in the prior year period. The ~~increase~~decrease in personnel expenses was ~~primarily driven by an increase in headcount to support the Company's growth strategy as well as lower commissions in 2016~~ due to ~~the commission advance recovery,~~lower incentive compensation expense partially offset by ~~a $7.5 million decrease in incentive compensation.~~higher wages.

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Depreciation and Amortization

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2023, depreciation and amortization ~~decreased $0.3 million~~was lower than the same period in 2022. The decrease was primarily driven by lower depreciation on information technology related assets and ~~$0.6 million, respectively.~~the divestiture of the Canadian business.

~~Acquisition and Integration Expenses~~

~~See~~ ~~Note 2, 2017 Acquisition, and~~ ~~Note 3, Acquisition, Integration and Restructuring Charges, to the Condensed Consolidated Financial Statements for information related to the Company's acquisition and integration efforts.~~

Restructuring Charges, Net

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2023, restructuring charges, net, decreased ~~$3.1~~by $2.7 million, ~~and increased $22.8 million, respectively.~~or 100.0%. As of December 31, 2022, the Company had completed its restructuring activities. See Note ~~3, Acquisition, Integration and Restructuring Charges~~4, of the Notes to ~~the~~ Condensed Consolidated Financial Statements for additional information related to the Company's restructuring efforts. ~~The Company may continue to record restructuring charges in the future as restructuring activities progress, which may include gains or losses from the disposition of assets.~~

Interest Expense, Net

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2023, interest expense, net, increased ~~$0.1~~by $1.2 million, ~~and $1.0 million, respectively. Interest expense increased~~or 34.3%. The increase was primarily due to ~~(i) an increased~~higher average interest rates, partially offset by a lower average balance on the Company's ~~asset-based lending facility (the "ABL Facility") and (ii) increased interest rates. See~~ ~~Note 5, Debt and Other Obligations, to the Condensed Consolidated Financial Statements for information related to the~~ ABL Facility.

Other (Income) Expense, Net

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2023, other (income) expense, net, ~~decreased $1.7~~was expense of $1.0 million. This was a net unfavorable change of $1.6 million as compared to the same period in 2022. The unfavorable change was primarily due to (i) higher pension expenses and ~~$5.1 million, respectively. These decreases were primarily driven by decreased expense associated with the tax receivable agreement, decreased~~(ii) unfavorable foreign ~~currency losses, and a loss on debt extinguishment in the second quarter of 2016.~~exchange impacts.

Effective Tax Rate

Veritiv's effective tax rates were ~~21.9%~~23.0% and ~~58.8%~~6.9% for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively. ~~Veritiv's effective tax rates were 33.9% and 52.3% for the nine months ended September 30, 2017 and 2016, respectively.~~

The difference between the ~~Company’s~~Company's effective tax rates and the U.S. statutory tax rate of ~~35.0%~~21.0% primarily relates to ~~non-deductible expenses,~~ state income taxes (net of federal income tax benefit), vesting of stock compensation and ~~the Company's income (loss) by jurisdiction.~~non-deductible expenses. Additionally, the effective tax rate for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 includes ~~the benefit~~recognition of a deferred tax ~~credits and the impact of impairing non-deductible goodwill.~~

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In conjunction with the third quarter 2017 filing of Veritiv's 2016 U.S. federal tax return and amended 2015 and 2014 U.S. federal tax returns, the Company recognized a $3.1 million benefit for credits related to foreign taxes and research and experimentation activities. Additionally, an estimate of 2017 tax credits is included in our estimated annual effective tax rate.

~~The historic volatility of~~asset on the Company's ~~effective tax rate has been primarily due to both the level of pre-tax income as well as variations~~investment in the Company's income (loss) by jurisdiction. Over time and with increasing pre-tax income, the Company estimates its effective tax rate will trend toward approximately 40%. However, the effective tax rate may vary significantly due to potential fluctuations in the amount and source, including botha foreign ~~and domestic, of pre-tax income and changes in amounts of non-deductible expenses and other items.~~subsidiary.

Segment Results

Adjusted EBITDA is the primary financial performance measure Veritiv uses to manage its businesses, to monitor its results of operations, to measure its performance against the ABL Facility and to incentivize its management. This common metric is intended to align stockholders, debt holders and management. Adjusted EBITDA is a non-GAAP financial measure and is not an alternative to net income, operating income or any other measure prescribed by U.S. generally accepted accounting principles ("U.S. GAAP").

~~Veritiv uses~~ Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring charges, ~~(income),~~net, integration and acquisition ~~and integration~~ expenses and other similar charges including any severance costs, costs associated with warehouse and office openings or closings, consolidation, and relocation and other business optimization expenses, stock-based compensation expense, changes in the LIFO reserve, non-restructuring asset impairment charges, non-restructuring severance charges, non-restructuring pension charges (benefits), fair value adjustments ~~on the~~related to contingent ~~liability associated with the Tax Receivable Agreement ("TRA")~~liabilities assumed in mergers and acquisitions and certain other adjustments) ~~because~~ is the primary financial performance measure Veritiv uses to manage its businesses, to monitor its results of operations, to measure its performance against the ABL Facility and to incentivize its management.

Veritiv believes investors commonly use Adjusted EBITDA as a key financial metric for valuing companies. In addition, the credit agreement governing the ABL Facility permits the Company to exclude these and other charges in calculating Consolidated EBITDA, as defined in the ABL Facility. This common metric is intended to align shareholders, debt holders and management. Adjusted EBITDA is a non-GAAP financial measure and is not an alternative to net income, operating income or any other measure prescribed by U.S. GAAP.

Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of ~~Veritiv’s~~Veritiv's results as reported under U.S. GAAP. For example, Adjusted EBITDA:

~~Does~~•does not reflect the ~~Company’s~~Company's income tax expenses or the cash requirements to pay its taxes; and

~~Although~~•although depreciation and amortization charges are non-cash charges, it does not reflect that the assets being depreciated and amortized will often have to be replaced in the future and the foregoing ~~metrics do~~metric does not reflect any cash requirements for such replacements.

Other companies in the industry may calculate Adjusted EBITDA differently than Veritiv does, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to Veritiv to invest in the growth of its business. Veritiv compensates for these limitations by relying on the

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Company's U.S. GAAP results and by using Adjusted EBITDA for supplemental purposes. Additionally, Adjusted EBITDA is not an alternative measure of financial performance under U.S. GAAP and therefore should be considered in conjunction with net income and other performance measures such as operating income or net cash provided by operating activities and not as an alternative to such U.S. GAAP measures.

Due to the shared nature of the distribution network, distribution expenses are not a specific charge to each segment but are instead allocated to each segment based primarily on operational metrics that correlate with changes in volume. Accordingly, distribution expenses allocated to each segment are highly interdependent on the results of other segments. Lower volume in any segment that is not offset by a reduction in distribution expenses can result in the other segments absorbing a larger share of distribution expenses. Conversely, higher volume in any segment can result in the other segments absorbing a smaller share of distribution expenses. The impact of this at the segment level is that the changes in distribution expense trends may not correspond with volume trends within a particular segment.

The Company sells thousands of products. In the Packaging, Facility Solutions and Print segments, Veritiv is unable to compute the impact of changes in sales volume based on changes in sales of each individual product. Rather, the Company assumes that the margin stays constant and estimates the volume impact based on changes in cost of products sold as a proxy for the change in sales volume. After any other significant sales variances are identified, the remaining sales variance is attributed to price/mix.

The Company approximates foreign currency effects by applying the foreign currency exchange rate for the prior period to the local currency results for the current period. ~~We believe~~The Company believes the elimination of the foreign currency translation impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.

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The Company believes that the historical decline in demand for paper and related products is due to the widespread use of electronic media and permanent product substitution, more e-commerce, less print advertising, fewer catalogs and a reduced volume of direct mail, among other factors. ~~This~~In the long term, this trend is expected to continue and will place continued pressure on the Company’s revenues and profit margins and make it more difficult to maintain or grow Adjusted EBITDA within the Print ~~and Publishing segments.~~Solutions segment.

Included in the following ~~table~~tables are net sales and Adjusted EBITDA for each of the reportable segments and Corporate & Other:

(in millions) Packaging Facility Solutions Print Publishing Corporate & Other
Three Months Ended September 30, 2017
Net sales $ 799.6
$ 339.6
$ 701.6
$ 238.7
$ 37.3
Adjusted EBITDA 62.1
10.3
13.1
5.5
(46.9 )
Adjusted EBITDA as a % of net sales 7.8 % 3.0 % 1.9 % 2.3 % *

Three Months Ended September 30, 2016
Net sales $ 730.1
$ 328.7
$ 788.2
$ 248.4
$ 31.2
Adjusted EBITDA 59.5
13.0
20.0
6.6
(42.0 )
Adjusted EBITDA as a % of net sales 8.1 % 4.0 % 2.5 % 2.7 % *

Nine Months Ended September 30, 2017
Net sales $ 2,266.0
$ 975.5
$ 2,095.1
$ 696.6
$ 107.1
Adjusted EBITDA 166.7
25.1
44.8
17.6
(137.8 )
Adjusted EBITDA as a % of net sales 7.4 % 2.6 % 2.1 % 2.5 % *

Nine Months Ended September 30, 2016
Net sales $ 2,106.4
$ 951.6
$ 2,299.0
$ 763.2
$ 87.0
Adjusted EBITDA 165.4
34.3
55.7
16.4
(129.7 )
Adjusted EBITDA as a % of net sales 7.9 % 3.6 % 2.4 % 2.1 % *


(in millions)	Packaging			Facility Solutions			Print Solutions			Corporate & Other
Three Months Ended March 31, 2023
Net sales	$	895.4		$	180.2		$	434.6		$	—
Adjusted EBITDA	96.4			15.4			37.2			(45.2)
Adjusted EBITDA as a % of net sales	10.8		%	8.5		%	8.6		%	*


Three Months Ended March 31, 2022
Net sales	$	1,003.1		$	229.4		$	596.6		$	29.0
Adjusted EBITDA	97.4			13.4			54.6			(45.9)
Adjusted EBITDA as a % of net sales	9.7		%	5.8		%	9.2		%	*

* - not meaningful

See Note ~~13, Segment Information~~12, of the Notes to ~~the~~ Condensed Consolidated Financial Statements for additional information related to Adjusted EBITDA, including a reconciliation of net income ~~(loss) before income taxes~~ as reflected inon the Condensed Consolidated Statements of Operations to Adjusted EBITDA for reportable segments.

Packaging

~~The table below presents selected data for the Packaging segment:~~


	Three Months Ended March 31,						Increase (Decrease)
(in millions)	2023			2022			$		%
Net sales	$	895.4		$	1,003.1		$	(107.7)	(10.7)	%
Adjusted EBITDA	96.4			97.4			(1.0)		(1.0)	%
Adjusted EBITDA as a % of net sales	10.8		%	9.7		%			110 bps

Three Months Ended September 30, 2017 vs. 2016 Nine Months Ended September 30, 2017 vs. 2016
(in millions) 2017 2016 Increase (Decrease) % 2017 2016 Increase (Decrease) %
Net sales $ 799.6
$ 730.1
9.5 % $ 2,266.0
$ 2,106.4
7.6 %
Adjusted EBITDA 62.1
59.5
4.4 % 166.7
165.4
0.8 %
Adjusted EBITDA as a % of net sales 7.8 % 8.1 % 7.4 % 7.9 %

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The table below presents the components of the net sales change compared to the prior year:


	Increase (Decrease)
	Three Months Ended March 31,
(in millions)	2023 vs. 2022
Volume	$	(152.4)

Price/Mix	44.7


Total change	$	(107.7)

Increase (Decrease)
Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2017 vs. 2016 2017 vs. 2016
Volume $ 71.0
$ 177.1
Foreign currency 3.8
(0.9 )
Price/Mix (5.3 ) (16.6 )
Total change $ 69.5
$ 159.6

Comparison of the Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~March 31, 2022

Net sales ~~increased $69.5~~decreased $107.7 million, or ~~9.5%~~10.7%, as compared to the same period in ~~2016. The net~~2022. Organic sales increase was primarily attributable to an increase in sales of corrugated products, films and folding cartons due to increases in volume and market prices as well as $16.0 million of rigid packaging products sales in the current period relating to the AAC business acquired in 2017.

~~Adjusted EBITDA increased $2.6~~decreased $33.5 million, or ~~4.4%~~3.6%, as compared to the same period in ~~2016.~~ 2022. The ~~increase~~net sales decrease was primarily attributable to lower sales volume and volume declines associated with the divestiture of the Canadian business, partially offset by higher market prices. Throughout the first quarter of 2023, customer inventory destocking combined with economic uncertainty contributed to lower demand. Sales increases to healthcare, wholesale and retail, and heavy manufacturing customers were more than offset by sales decreases to light manufacturing, food and beverage and logistics customers compared to the prior year period. The decrease in net sales resulting from the divestiture of the Canadian business for the three months ended March 31, 2023 was $74.2 million. Management expects market demand challenges will continue into the second quarter of 2023. However, management believes the majority of the effects of customer inventory destocking were substantially over by the end of the first quarter of 2023.

Adjusted EBITDA decreased $1.0 million, or 1.0%, as compared to the same period in 2022. The decrease in Adjusted EBITDA was primarily attributable to ~~the increase in~~lower net ~~sales. The increase in net~~ sales, ~~was~~ partially offset by ~~increases~~(i) an $11.7 million decrease in distribution expenses, (ii) cost of products sold ~~increasing~~decreasing at a faster rate than net sales and ~~an increase~~(iii) a $3.9 million decrease in selling and administrative ~~expenses. Distribution~~expense. The decrease in distribution expenses ~~increased $6.5 million~~was primarily driven by ~~increased~~(i) a $7.2 million decrease related to the divestiture of the Canadian business, (ii) a $2.2 million decrease in facility rent expense driven by decreased utilization of ~~our~~the distribution network ~~which is reflected~~and (iii) a $1.9 million decrease in ~~(i) increased~~ freight and logistics ~~expenses driven mostly by increased third party~~expense, which was primarily related to third-party freight and transfer expenses, (ii) increased personnel expenses and (iii) increased facilities rent and other expenses. Selling and administrative expenses increased $3.4 million primarily driven by increased personnel expenses associated with increased headcountdue to ~~support our growth strategy.~~lower sales volume. The ~~acquisition of AAC resulted in a $1.2 million increase in distribution expenses and a $2.0 million increase~~decrease in selling and administrative ~~expenses.~~

~~Comparison~~expenses was primarily driven by (i) a $3.9 million decrease in professional fees and (ii) a $3.1 million decrease related to the divestiture of the ~~Nine Months Ended September 30, 2017 and September 30, 2016~~

~~Net sales increased $159.6~~Canadian business, partially offset by a $3.4 million ~~or 7.6%, compared to the same period in 2016. The net sales increase was primarily attributable to an~~ increase in sales of corrugated products, films and folding cartons due to increases in volume and market prices as well as $16.0 million of rigid packaging products sales in the current period relating to the AAC business acquired in 2017.

~~Adjusted EBITDA increased $1.3 million, or 0.8%, compared to the same period in 2016.~~personnel expenses. The increase in ~~net sales~~personnel expenses was ~~mostly offset~~associated with (i) higher wages and benefits to support the Company's Packaging growth strategy and (ii) increased commission expenses driven by ~~an increase in distribution expenses,~~ cost of products sold ~~increasing~~decreasing at a faster rate than net sales and an increase in selling and administrative expenses. Distribution expenses increased $14.0 million primarily driven by increased utilization of our distribution network, which is reflected in (i) increased freight and logistics expenses driven mostly by increased third party freight, transfer expenses and diesel fuel prices, (ii) increased personnel expenses and (iii) increased facilities rent and other expenses. Selling and administrative expenses increased $10.1 million primarily driven by increased personnel expenses associated with increased headcount to support our growth strategy. The acquisition of AAC resulted in a $1.2 million increase in distribution expenses and a $2.0 million increase in selling and administrative expenses.sales.

Facility Solutions


	Three Months Ended March 31,						Increase (Decrease)
(in millions)	2023			2022			$		%
Net sales	$	180.2		$	229.4		$	(49.2)	(21.4)	%
Adjusted EBITDA	15.4			13.4			2.0		14.9	%
Adjusted EBITDA as a % of net sales	8.5		%	5.8		%			270 bps

~~The table below presents selected data for the Facility Solutions segment:~~

Three Months Ended September 30, 2017 vs. 2016 Nine Months Ended September 30, 2017 vs. 2016
(in millions) 2017 2016 Increase (Decrease) % 2017 2016 Increase (Decrease) %
Net sales $ 339.6
$ 328.7
3.3 % $ 975.5
$ 951.6
2.5 %
Adjusted EBITDA 10.3
13.0
(20.8 )% 25.1
34.3
(26.8 )%
Adjusted EBITDA as a % of net sales 3.0 % 4.0 % 2.6 % 3.6 %

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The table below presents the components of the net sales change compared to the prior year:


	Increase (Decrease)
	Three Months Ended March 31,
(in millions)	2023 vs. 2022
Volume	$	(67.7)

Price/Mix	18.5


Total change	$	(49.2)

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Increase (Decrease)
Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2017 vs. 2016 2017 vs. 2016
Volume $ 9.4
$ 28.5
Foreign currency 2.9
1.9
Price/Mix (1.4 ) (6.5 )
Total change $ 10.9
$ 23.9

Comparison of the Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~March 31, 2022

Net sales ~~increased $10.9~~decreased $49.2 million, or ~~3.3%~~21.4%, as compared to the same period in ~~2016. The net~~2022. Organic sales ~~increase was primarily attributable to~~ increased ~~sales of food service products, chemicals and safety supplies.~~

~~Adjusted EBITDA decreased $2.7~~$15.3 million, or ~~20.8%~~9.3%, as compared to the same period in ~~2016.~~2022. The net sales decrease was primarily attributable to the divestiture of the Canadian business and decreased sales volume, partially offset by higher market prices and increased sales of towels and tissues, food service products and wipers. The decrease in net sales resulting from the divestiture of the Canadian business for the three months ended March 31, 2023 was $64.5 million. During the first quarter of 2023, a consumer shift from goods to services contributed to higher demand in away-from-home product categories. Demand improved within the entertainment and hospitality end use sectors as well as office-like end use sectors as more employees are physically returning to offices. This was partially offset by lower demand for the personal protective equipment product category.

Adjusted EBITDA increased $2.0 million, or 14.9%, as compared to the same period in 2022. The increase in ~~net~~Adjusted EBITDA was primarily attributable to (i) the organic sales ~~was more than offset by (i) a $2.4 million~~ increase ~~in distribution expenses,~~and (ii) ~~a $1.6 million increase in selling and administrative expenses and (iii)~~ cost of products sold increasing at a ~~faster~~slower rate than net ~~sales.~~sales, partially offset by lower net sales resulting from the divestiture of the Canadian business. The ~~increase~~divestiture of the Canadian business resulted in (i) a $6.3 million decrease in distribution expenses was primarily driven by increased utilization of our distribution network and is evidenced in (i) increased freight and logistics expenses driven mostly by increased third party freight and transfer expensesexpense and (ii) ~~increased personnel expenses. The increase~~a $3.7 million decrease in selling and administrative ~~expenses was largely a result of a $1.0 million increase in personnel expenses, generally due to increased headcount to support our growth strategy, and a $0.8 million increase in bad debt expense.~~expenses.

~~Comparison of the Nine Months Ended September 30, 2017 and September 30, 2016~~

~~Net sales increased $23.9 million, or 2.5%, compared to the same period in 2016. The net sales increase was primarily attributable to increased sales of food service products and chemicals.~~

Adjusted EBITDA decreased $9.2 million, or 26.8%, compared to the same period in 2016. The increase in net sales was more than offset by (i) cost of products sold increasing at a faster rate than net sales, (ii) a $4.8 million increase in distribution expenses and (iii) a $4.8 million increase in selling and administrative costs. The increase in distribution expenses was primarily driven by increased utilization of our distribution network and is evidenced in (i) increased freight and logistics expenses driven mostly by increased third party freight, transfer expenses and diesel fuel prices and (ii) increased personnel expenses. The increase in selling and administrative expenses was primarily driven by (i) a $1.9 million increase in personnel expenses primarily due to increased headcount to support our growth strategy and (ii) a $1.9 million increase in bad debt expense.

Print Solutions

~~The table below presents selected data for the Print segment:~~


	Three Months Ended March 31,						Increase (Decrease)
(in millions)	2023			2022			$		%
Net sales	$	434.6		$	596.6		$	(162.0)	(27.2)	%
Adjusted EBITDA	37.2			54.6			(17.4)		(31.9)	%
Adjusted EBITDA as a % of net sales	8.6		%	9.2		%			(60) bps

Three Months Ended September 30, 2017 vs. 2016 Nine Months Ended September 30, 2017 vs. 2016
(in millions) 2017 2016 Increase (Decrease) % 2017 2016 Increase (Decrease) %
Net sales $ 701.6
$ 788.2
(11.0 )% $ 2,095.1
$ 2,299.0
(8.9 )%
Adjusted EBITDA 13.1
20.0
(34.5 )% 44.8
55.7
(19.6 )%
Adjusted EBITDA as a % of net sales 1.9 % 2.5 % 2.1 % 2.4 %

~~Table of Contents~~

The table below presents the components of the net sales change compared to the prior year:


	Increase (Decrease)
	Three Months Ended March 31,
(in millions)	2023 vs. 2022
Volume	$	(244.6)

Price/Mix	82.6


Total change	$	(162.0)

Increase (Decrease)
Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2017 vs. 2016 2017 vs. 2016
Volume $ (89.9 ) $ (211.5 )
Foreign currency 2.0
1.1
Price/Mix 1.3
6.5
Total change $ (86.6 ) $ (203.9 )

Comparison of the Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~March 31, 2022

Net sales decreased ~~$86.6~~$162.0 million, or ~~11.0%~~27.2%, as compared to the same period in ~~2016.~~2022. Organic sales decreased $109.1 million, or 20.1%, as compared to the same period in 2022. The net sales decrease was primarily attributable to decreased sales volume as well as volume declines associated with the ~~continued secular decline~~divestiture of the Canadian business, partially offset by higher market prices. Customer inventory destocking contributed to lower demand throughout the first quarter of 2023. The decrease in net sales resulting from the divestiture of the Canadian business for the three months ended March 31, 2023 was $52.9 million. Management expects the effects of customer inventory destocking to continue into the third quarter of 2023. Management also expects pricing could be challenged in the ~~paper industry.~~second half of 2023 if customer inventory destocking subsides and demand remains depressed.

Adjusted EBITDA decreased ~~$6.9~~$17.4 million, or ~~34.5%~~31.9%, as compared to the same period in ~~2016.~~2022. The Adjusted EBITDA decrease was primarily attributable to ~~the decline in~~(i) lower net ~~sales. The decline in net~~ sales, ~~was~~ partially offset by (i) ~~a $3.8 million decrease in distribution expenses and (ii)~~ cost of products sold decreasing at a faster rate than net ~~sales. The decrease in distribution expenses was primarily due to decreased utilization of our distribution network and was evidenced in (i) a decrease in personnel expenses and~~sales, (ii) a decrease in facilities rent and other related expenses. Selling and administrative expenses were flat as lower personnel expenses of $3.2 million were offset by a $3.8 million increase in bad debt expense.

~~Comparison of the Nine Months Ended September 30, 2017 and September 30, 2016~~

~~Net sales decreased $203.9 million, or 8.9%, compared to the same period in 2016. The net sales decrease was primarily attributable to the continued secular decline in the paper industry.~~

Adjusted EBITDA decreased $10.9 million, or 19.6%, compared to the same period in 2016. The Adjusted EBITDA decrease was largely attributable to the decline in net sales. The decline in net sales was partially offset by (i) a $10.3 million decrease in distribution expenses, (ii) cost of products sold declining at a faster rate than net sales and (iii) a $2.5$2.9 million decrease in selling and administrative ~~expenses. The~~expenses and (iii) a $1.3 million decrease in distribution expenses was primarily driven by decreased utilization of our distribution network which is reflected in (i) a decrease in facilities rent (ii) a decrease in personnel expense and (iii) a decrease in freight and logistics expenses. The decrease in selling and administrative expenses was primarily driven by a ~~$5.9~~$2.0 million decrease related to the divestiture of the Canadian business. The decrease in distribution expenses was primarily driven by (i) a $2.5 million decrease related to the divestiture of the Canadian business, (ii) a $1.2 million decrease in freight and logistics expense and (iii) a $1.0 million decrease in personnel expenses, ~~and a $0.8 million decrease in professional and communication expenses,~~ partially offset by a ~~$5.3~~$3.4 million increase in ~~bad debt expense.~~

~~Publishing~~

~~The table below presents selected data for the Publishing segment:~~facility rent expense driven by increased

Three Months Ended September 30, 2017 vs. 2016 Nine Months Ended September 30, 2017 vs. 2016
(in millions) 2017 2016 Increase (Decrease) % 2017 2016 Increase (Decrease) %
Net sales $ 238.7
$ 248.4
(3.9 )% $ 696.6
$ 763.2
(8.7 )%
Adjusted EBITDA 5.5
6.6
(16.7 )% 17.6
16.4
7.3 %
Adjusted EBITDA as a % of net sales 2.3 % 2.7 % 2.5 % 2.1 %

Table of Contents

~~The table below presents the components~~utilization of the ~~net sales change compared to the prior year:~~distribution network.

Increase (Decrease)
Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2017 vs. 2016 2017 vs. 2016
Volume $ (12.3 ) $ (84.0 )
Foreign currency 0.3
0.2
Price/Mix 2.3
17.2
Total change $ (9.7 ) $ (66.6 )
Corporate & Other


	Three Months Ended March 31,				Increase (Decrease)
(in millions)	2023		2022		$		%
Net sales	$	—	$	29.0	$	(29.0)	(100.0)	%
Adjusted EBITDA	(45.2)		(45.9)		0.7		1.5	%

Comparison of the Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~March 31, 2022

Net sales decreased ~~$9.7~~$29.0 million, or ~~3.9%~~100.0%, as compared to the same period in ~~2016.~~2022. The net sales decrease was ~~primarily attributable to a decline~~driven by the divestiture of the logistics solutions business in ~~volume.~~ 2022.

Adjusted EBITDA ~~decreased $1.1~~increased $0.7 million, or ~~16.7%~~1.5%, as compared to the same period in ~~2016.~~2022. The Adjusted EBITDA ~~decrease~~increase was primarily ~~attributable to lower net sales and cost of products sold decreasing at~~driven by a ~~slower rate than net sales.~~

~~Comparison of the Nine Months Ended September 30, 2017 and September 30, 2016~~

~~Net sales decreased $66.6 million, or 8.7%, compared to the same period in 2016. The net sales decrease was primarily attributable to a decline in volume.~~

Adjusted EBITDA increased $1.2 million, or 7.3%, compared to the same period in 2016. The decrease in net sales was more than offset by cost of products sold decreasing at a faster rate than net sales. The increase in Adjusted EBITDA was also attributable to a $1.0$5.0 million decrease in selling and administrative expenses, ~~primarily driven~~partially offset by ~~decreased personnel expenses.~~

~~Corporate & Other~~

~~The table below presents selected data for Corporate & Other:~~

Three Months Ended September 30, 2017 vs. 2016 Nine Months Ended September 30, 2017 vs. 2016
(in millions) 2017 2016 Increase (Decrease) % 2017 2016 Increase (Decrease) %
Net sales $ 37.3
$ 31.2
19.6 % $ 107.1
$ 87.0
23.1 %
Adjusted EBITDA (46.9 ) (42.0 ) (11.7 )% (137.8 ) (129.7 ) (6.2 )%

~~Comparison~~the net sales decrease due to the divestiture of the ~~Three Months Ended September 30, 2017 and September 30, 2016~~

~~Net sales increased $6.1 million, or 19.6%, compared to the same period in 2016.~~logistics solutions business. The ~~net sales increase was primarily attributable to an increase in freight brokerage services.~~

Adjusted EBITDA decreased $4.9 million compared to the same period in 2016. The increase in net sales was more than offset by (i) a $5.3 million increase in selling and administrative expenses and (ii) cost of products sold increasing at a faster rate than net sales. The increasedecrease in selling and administrative expenses was ~~primarily driven~~due to (i) a $3.4 million decrease related to the divestiture of the Canadian business, (ii) a $2.2 million decrease related to the divestiture of the logistics solutions business and (iii) a $2.0 million decrease in personnel expenses, partially offset by a ~~$5.0~~$2.2 million increase in ~~personnel expenses primarily related to the commission advance recovery in 2016, as discussed above.~~

~~Comparison of the Nine Months Ended September 30, 2017 and September 30, 2016~~

~~Net sales increased $20.1 million, or 23.1%, compared to the same period in 2016.~~professional fees. The ~~net sales increase was primarily attributable to an increase in freight brokerage services.~~

~~Table of Contents~~

~~Adjusted EBITDA decreased $8.1 million compared to the same period in 2016. The increase in net sales and a $2.3 million~~ decrease in distribution expenses were more than offset by (i) cost of products sold increasing at a faster rate than net sales and (ii) a $7.5 million increase in selling and administrative costs. The increase in selling and administrative costs was driven by (i) a $5.5 million increase in personnel expenses and (ii) a $1.3 million increase in insurance expense. The increase in personnel expenses was primarily ~~driven by~~due to lower ~~commission expense in 2016 as a result of the commission advance recovery and increased headcount to support the Company's growth strategy, partially offset by a decrease in~~ incentive compensation ~~as discussed above.~~expense.

Liquidity and Capital Resources

The cash requirements of the Company are primarily provided by cash flows from operations and borrowings under the ABL Facility. See Note 5 of the Notes to Condensed Consolidated Financial Statements for additional information related to the Company's debt position.

The following table sets forth a summary of cash flows:


	Three Months Ended March 31,
(in millions)	2023		2022
Net cash provided by (used for):
Operating activities	$	70.9	$	(5.9)
Investing activities	(2.7)		(7.1)
Financing activities	(76.5)		7.4

Nine Months Ended September 30,
(in millions) 2017 2016
Net cash provided by (used for):
Operating activities $ (17.7 ) $ 59.9
Investing activities (147.7 ) (24.7 )
Financing activities 171.2
(30.4 )
Analysis of Cash Flows

Operating Activities

Net cash ~~provided by~~from operating activities ~~decreased~~was higher by ~~$77.6~~$76.8 million compared to the prior year. Most of the decrease resulted from the decline in operating results and increase in working capital. The increase in working capital was primarily due to increases in accounts receivable and inventories which more than offset an increase in accounts payable. These increases were due to increases in the number of days sales in accounts receivable and the number of days of inventory on hand, which more than offset an increase in the number of days of accounts payable on hand.

~~Investing Activities~~

Net cash used for investing activities increased by $123.0 million compared to the prior year primarily due to the acquisition of AAC in the third quarter of 2017. Proceeds from asset sales increased in 2017 due to $9.1 million received from the sale of the Austin, Texas facility in May 2017 and $11.4 million received from the sale of the Hensall facility in Canada in July 2017. See ~~Note 5, Debt and Other Obligations~~ ~~for additional information regarding the Company's debt position.~~

~~Financing Activities~~

~~Net cash provided by financing activities increased by $201.6 million~~as compared to the prior year. The increase was ~~used~~ primarily ~~for~~due to a decrease in accounts receivable driven by the ~~purchase of AAC. Also,~~decline in net sales and the Company's improved accounts receivable collection efforts in the ~~first quarter~~current year period. Unfavorable impacts to operating cash flows were due to (i) a $36.9 million increase in cash paid for inventories, (ii) the payment of ~~2017,~~ the ~~Company made~~ cash-based long-term incentive awards granted in 2020, valued at approximately $15.2 million and (iii) a ~~payment against~~$6.5 million increase in cash paid for income taxes, net of refunds. The remaining changes in the ~~TRA contingent liability. In addition,~~Company's operating assets and liabilities were driven by other normal business activities.

Investing Activities

Net cash used for investing activities was a decreased use of cash by $4.4 million as compared to the ~~Company experienced a~~prior year. The decrease in usage was primarily due to lower purchases of property and equipment in the current year, which was partially offset by having no insurance proceeds in the current year as compared to the prior year.

Financing Activities

Net cash used for financing activities was an increased use of cash by $83.9 million as compared to the prior year. The

Table of Contents

increased usage was primarily due to (i) increased net repayments under the Company's ABL Facility, (ii) unfavorable change in book overdrafts, due to the timing of ~~payments. In 2016~~payments, and (iii) the payment of a dividend, partially offset by (i) lower tax withholdings on share based compensation and (ii) lower common stock repurchases. On February 27, 2023, the Company’s Board of Directors declared a quarterly cash ~~provided by operating activities was used~~dividend of $0.63 per share of common stock, payable on March 31, 2023 to ~~pay down~~shareholders of record at the ~~borrowings~~close of business on March 9, 2023. The dividend resulted in a payout of approximately $8.5 million. During the ~~ABL Facility.~~month ended March 31, 2022, the Company repurchased 78,025 shares of its common stock at a cost of approximately $10.4 million under its 2022 Share Repurchase Program.

Funding and Liquidity Strategy

ABL Facility

On ~~August 11, 2016,~~March 17, 2023, the Company amended its ABL Facility to, among other things, ~~extend~~replace LIBOR provisions with analogous SOFR provisions. The Company currently expects to complete the ~~maturity date~~full transition to ~~August 11, 2021.~~Term SOFR in the second quarter of 2023. All other significant terms remained ~~consistent. See~~ ~~Note 5, Debt~~substantially the same. The ABL Facility has aggregate commitments of $1.1 billion and ~~Other Obligations~~,a maturity date of May 20, 2026. The ABL Facility is available to be drawn in U.S. dollars, or in other currencies that are mutually agreeable. The ABL Facility provides for ~~additional information regarding~~ 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 Company's ~~debt position.~~accounts receivable and inventories in the U.S. are collateral under the ABL Facility.

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 ~~September 30, 2017,~~March 31, 2023, the available additional borrowing capacity under the ABL Facility was approximately ~~$272.3~~$681.8 million. As of March 31, 2023, the Company held $8.6 million in outstanding letters of credit.

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 the limits outlined under the ABL Facility. At ~~September 30, 2017,~~March 31, 2023, the above test was not applicable and based on information available as of the date of this report it is not expected to be applicable in the next 12 months.

Short and long-term funding strategy

Veritiv's management expects that the Company's primary future cash needs will be for working capital, capital expenditures, contractual commitments, dividends and strategic investments. Veritiv's ability to fund its capital and operating needs will depend on its ongoing ability to generate cash from operations, availability of borrowings under the ABL Facility and ~~funds received from~~access to the capital ~~market offerings.~~markets. If Veritiv's cash flows from operating activities are lower than expected, the Company ~~will~~would need to borrow under the ABL Facility and may need to incur additional debt or issue additional equity. Although management believes that the arrangements currently in place will permit Veritiv to finance its

~~Table of Contents~~

~~operations~~ capital and operating needs on acceptable terms and conditions, the ~~Company’s~~Company's access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including the liquidity of the overall capital markets and the current state of the economy.

~~Veritiv's management expects~~The Company currently estimates that ~~the Company's primary future cash needs~~during 2023 it will bespend approximately $30 million for ~~working capital,~~ capital expenditures ~~contractual commitments~~covering both maintenance and strategic investments. ~~Additionally, management expects that~~On May 8, 2023, the Company’s Board of Directors declared a quarterly cash ~~provided by operating activities and available capacity under~~dividend of $0.63 per share of common stock, payable on June 5, 2023 to shareholders of record at the ~~ABL Facility will provide sufficient funds to operate the~~close of business ~~and meet other liquidity needs.~~on May 18, 2023.

~~Off-Balance Sheet Arrangements~~

~~Veritiv does not have any off-balance sheet arrangements as of September 30, 2017, other than operating lease obligations and the letters of credit under the ABL Facility.~~ The Company ~~does not have any off-balance sheet arrangements~~currently expects to pay-out the cash-based long-term incentive awards granted in 2021 in March 2024; the value of these awards cannot yet be determined. See Note 3 of the Notes to Condensed Consolidated Financial Statements for information regarding the Company's lease commitments, including leases that have ~~or are reasonably likely~~not yet commenced, if any. See Note 5 of the Notes to ~~have a material current or~~Condensed Consolidated Financial Statements for information regarding the Company's use of vendor-based financing arrangements, if any. The payment of future ~~effect on its~~dividends remains subject to the discretion of the Company's Board of Directors and will depend upon various factors then existing, including earnings, financial condition, ~~revenues or expenses,~~ results of operations, ~~liquidity,~~ capital ~~expenditures or capital resources.~~requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by applicable law, general business conditions and other factors that Veritiv's Board of Directors may deem relevant.

~~Contractual Obligations~~Table of Contents

Inflation and Changing Prices

Essentially all of the Company's revenue is derived from the sale of its products and services in competitive markets. To the extent feasible, the Company has adjusted its prices to reflect the impact of inflation on the cost of purchased materials and services. Impacts on the Company's results from price and product mix are discussed in the "Segment Results" section of this Item 2.

Critical Accounting Estimates

There have been no material changes to the Company's ~~contractual obligations~~critical accounting estimate methodologies from those disclosed in Veritiv's Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022. 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, particularly in light of the COVID-19 pandemic and its effects on the domestic and global economies. Estimates are revised as ~~adjusted~~additional information becomes available. See the "Use of Estimates" section of Note 1 of the Notes to Condensed Consolidated Financial Statements for ~~obligations resulting from the acquisition of AAC (see~~ ~~Note 2, 2017 Acquisition~~)

~~Critical Accounting Policies and Estimates~~

~~There have been no material changes to~~additional information regarding the Company's ~~critical accounting policies and estimates from those disclosed in Veritiv's Annual Report on Form 10-K for the year ended December 31, 2016.~~estimates.

Recently Issued Accounting Standards

See Note 1 ~~Business and Summary~~ of ~~Significant Accounting Policies,~~the Notes to ~~the~~ Condensed Consolidated Financial Statements for information regarding recently issued accounting standards.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided in Item 7A "Quantitative and Qualitative Disclosures about Market Risk" of the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The ~~Company’s~~Company's management has carried out an evaluation, with the participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the ~~Company’s~~Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended. Based upon such evaluation, management has concluded that the ~~Company’s~~Company's disclosure controls and procedures were effective as of ~~September 30, 2017.~~March 31, 2023.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting that occurred during the quarter ended ~~September 30, 2017~~March 31, 2023 that ~~has~~have materially affected, or isare reasonably likely to materially affect, the Company's internal control over financial reporting. During the third quarter of 2017, the Company completed the acquisition of AAC. As permitted by SEC staff interpretive guidance that an assessment of a recently acquired business may be omitted from the scope of evaluation in the year of acquisition, management excluded AAC from its interim evaluation of internal control over financial reporting.

~~Table of Contents~~

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to Note ~~12, Commitments and Contingencies,~~11 of the Notes to ~~the~~ Condensed Consolidated Financial Statements.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

Table of Contents

ITEM 6. EXHIBITS


Exhibit No.	Description

3.1	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Veritiv Corporation dated May 5, 2023 incorporated by reference from Exhibit ~~No.~~	~~Description~~3.1 to the Registrant’s Form 8-K filed on May 5, 2023.

31.1* 10.1*	Third Amendment to ABL Credit Agreement dated as of March 17, 2023 among Veritiv Corporation, Veritiv Operating Company and the other borrowers from to time parties thereto, the several lenders and financial institutions from time to time parties thereto, Bank of America, N.A., as administrative agent and collateral agent for the lenders party thereto, and the other parties thereto.

10.22†*	Offer Letter, dated as of February 24, 2022 between Veritiv Operating Company and Susan Salyer .

31.1*	Rule 13a-14(a) Certification of the Chief Executive Officer.

31.2*	Rule 13a-14(a) Certification of the Chief Financial Officer.

32.1*	Section 1350 Certification of the Chief Executive Officer.

32.2*	Section 1350 Certification of the Chief Financial Officer.

101.INS*	XBRL Instance ~~Document.~~Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*	Inline XBRL Taxonomy Extension Schema Document.

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

† Management contract or compensatory plans or arrangements
* Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			VERITIV CORPORATION
			(Registrant)

Date:		May 9, 2023	~~VERITIV CORPORATION~~By: /s/ Eric J. Guerin
			~~(Registrant)~~Name: Eric J. Guerin

~~Date:~~	~~November 7, 2017~~	~~By: /s/ Stephen J. Smith~~
		~~Name: Stephen J. Smith~~
		Title: Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)

Date:		~~November 7, 2017~~May 9, 2023	By: /s/ ~~W. Forrest Bell~~Lance D. Gebert
			Name: ~~W. Forrest Bell~~Lance D. Gebert
			Title: ~~Chief Accounting Officer~~Corporate Controller
			(Principal Accounting Officer)



Delaware		46-3234977
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

1000 Abernathy Road NE
Building 400, Suite 1700
Atlanta, ~~Georgia~~	Georgia	30328
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	VRTV	New York Stock Exchange



Large accelerated filer	☐☒	Accelerated filer	☒☐
Non-accelerated filer	☐~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
		Emerging growth company	☐


			Page
Part I: FINANCIAL INFORMATION
Item 1.		Financial Statements (Unaudited)	1
		Condensed Consolidated Statements of Operations ~~for the three and nine months ended September 30, 2017 and 2016~~	1
		Condensed Consolidated Statements of Comprehensive Income (Loss) ~~for the three and nine months ended September 30, 2017 and 2016~~	2
		Condensed Consolidated Balance Sheets ~~as of September 30, 2017 and December 31, 2016~~	3
		Condensed Consolidated Statements of Cash Flows ~~for the nine months ended September 30, 2017 and 2016~~	4
		Condensed Consolidated Statements of Shareholders' Equity	5
		Notes to Condensed Consolidated Financial Statements	56
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	2419
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	3529
Item 4.		Controls and Procedures	3529

Part II: OTHER INFORMATION
Item 1.		Legal Proceedings	3629
Item 1A.		Risk Factors	3629

Item 6.		Exhibits	30
~~Item 6.~~SIGNATURES			~~Exhibits~~31	36
~~SIGNATURES~~	37



	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
Net sales (including sales to related party of $8.6, $8.5, $24.9 and $26.6, respectively)	$	2,116.8		$	2,126.6	$	6,140.3		$	6,207.2
Cost of products sold (including purchases from related party of $45.7, $71.4, $138.0 and $174.3, respectively) (exclusive of depreciation and amortization shown separately below)	1,736.6			1,743.8		5,026.4			5,086.2
Distribution expenses	132.0			126.0		380.9			375.2
Selling and administrative expenses	228.7			207.3		650.4			615.9
Depreciation and amortization	13.1			13.4		39.9			40.5
Acquisition and integration expenses	14.2			7.3		28.1			19.6
Restructuring charges	2.7			5.8		30.0			7.2
Operating income (loss)	(10.5		)	23.0		(15.4		)	62.6
Interest expense, net	8.3			8.2		22.1			21.1
Other expense, net	(0.5		)	1.2		1.2			6.3
Income (loss) before income taxes	(18.3		)	13.6		(38.7		)	35.2
Income tax expense (benefit)	(4.0		)	8.0		(13.1		)	18.4
Net income (loss)	$	(14.3	)	$	5.6	$	(25.6	)	$	16.8

Earnings (loss) per share:
Basic earnings (loss) per share	$	(0.91	)	$	0.35	$	(1.63	)	$	1.05
Diluted earnings (loss) per share	$	(0.91	)	$	0.34	$	(1.63	)	$	1.04

Weighted average shares outstanding:
Basic	15.70			16.00		15.70			16.00
Diluted	15.70			16.27		15.70			16.05



	September 30, 2017			December 31, 2016
Assets
Current assets:
Cash	$	76.5		$	69.6
Accounts receivable, less allowances of $45.2 and $34.5, respectively	1,165.1			1,048.3
Related party receivable	3.8			3.9
Inventories	772.6			707.9
Other current assets	134.7			118.9
Total current assets	2,152.7			1,948.6
Property and equipment (net of depreciation and amortization of $317.9 and $292.8, respectively)	341.5			371.8
Goodwill	105.3			50.2
Other intangibles, net	68.3			21.0
Deferred income tax assets	76.3			61.8
Other non-current assets	31.0			30.3
Total assets	$	2,775.1		$	2,483.7
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	696.3		$	654.1
Related party payable	11.2			9.0
Accrued payroll and benefits	61.5			84.4
Other accrued liabilities	130.1			102.5
Current maturities of long-term debt	1.8			2.9
Financing obligations, current portion (including obligations to related party of $10.4 and $14.9, respectively)	11.1			14.9
Total current liabilities	912.0			867.8
Long-term debt, net of current maturities	972.0			749.2
Financing obligations, less current portion (including obligations to related party of $155.2 and $176.1, respectively)	181.9			176.1
Defined benefit pension obligations	25.3			27.6
Other non-current liabilities	148.2			121.2
Total liabilities	2,239.4			1,941.9
Commitments and contingencies (Note 12)
Shareholders' equity:
Preferred stock, $0.01 par value, 10.0 million shares authorized, none issued	—			—
Common stock, $0.01 par value, 100.0 million shares authorized, 16.0 million shares issued; shares outstanding - 15.7 million at September 30, 2017 and December 31, 2016 respectively	0.2			0.2
Additional paid-in capital	586.1			574.5
Accumulated earnings (deficit)	(5.9		)	19.7
Accumulated other comprehensive loss	(31.1		)	(39.0		)
Treasury stock at cost - 0.3 million shares at September 30, 2017 and December 31, 2016	(13.6		)	(13.6		)
Total shareholders' equity	535.7			541.8
Total liabilities and shareholders' equity	$	2,775.1		$	2,483.7



	Nine Months Ended September 30,
Operating activities	2017			2016
Net income (loss)	$	(25.6	)	$	16.8
Depreciation and amortization	39.9			40.5
Amortization of deferred financing fees	1.9			4.9
Net losses (gains) on dispositions of property and equipment	(4.0		)	(2.7		)
Long-lived asset impairment charges	8.4			4.0
Provision for allowance for doubtful accounts	11.6			0.4
Deferred income tax provision (benefit)	(14.3		)	8.1
Stock-based compensation	11.6			7.2
Other non-cash items, net	2.5			4.7
Changes in operating assets and liabilities
Accounts receivable and related party receivable	(87.5		)	(48.6		)
Inventories	(17.9		)	19.9
Other current assets	(6.7		)	(8.5		)
Accounts payable and related party payable	69.6			38.5
Accrued payroll and benefits	(23.4		)	(39.9		)
Other accrued liabilities	8.9			3.6
Other	7.3			11.0
Net cash provided by (used for) operating activities	(17.7		)	59.9
Investing activities
Property and equipment additions	(26.0		)	(29.8		)
Proceeds from asset sales	23.1			5.1
Cash paid for purchase of business, net of cash acquired	(144.8		)	—
Net cash used for investing activities	(147.7		)	(24.7		)
Financing activities
Change in book overdrafts	(43.9		)	32.9
Borrowings of long-term debt	3,685.2			3,394.4
Repayments of long-term debt	(3,446.5		)	(3,439.0		)
Payments under equipment capital lease obligations	(2.2		)	(2.3		)
Payments under financing obligations (including obligations to related party of $11.5 and $14.4, respectively)	(12.9		)	(14.4		)
Deferred financing fees	—			(2.0		)
Payments under Tax Receivable Agreement	(8.5		)	—
Net cash provided by (used for) financing activities	171.2			(30.4		)
Effect of exchange rate changes on cash	1.1			0.0
Net change in cash	6.9			4.8
Cash at beginning of period	69.6			54.4
Cash at end of period	$	76.5		$	59.2
Supplemental cash flow information
Cash paid for income taxes, net of refunds	$	3.2		$	3.1
Cash paid for interest	19.4			15.5
Non-cash investing and financing activities
Non-cash additions to property and equipment	$	8.6		$	12.3
Contingent consideration for purchase of business: Earn-out	30.0			—



	(in millions)
Cash consideration	$	112.0
Repayment of loans	34.3
Contingent consideration: Earn-out	30.0
Contingent bonus tax payment	0.3
Total preliminary estimated purchase price	$	176.6



(Unaudited)	Three Months Ended September 30,					Nine Months Ended September 30,
(in millions, except share and per share data)	2017			2016		2017			2016
Net sales	$	2,157.8		$	2,181.9	$	6,303.2		$	6,378.3
Net income (loss)	(11.3		)	5.4		(21.5		)	12.0
Earnings (loss) per share:
Basic earnings (loss) per share	$	(0.72	)	$	0.34	$	(1.37	)	$	0.75
Diluted earnings (loss) per share	$	(0.72	)	$	0.33	$	(1.37	)	$	0.75
Weighted-average shares outstanding
Basic	15.70			16.00		15.70			16.00
Diluted	15.70			16.27		15.70			16.05



	Gross Value (in millions)		Estimated Useful Life (in years)
Customer relationships	$	43.5	10
Trademarks/Trade names	5.1		5
Non-compete agreements	2.6		2
Total identifiable intangible assets acquired	$	51.2



	Three Months Ended September 30, 2017						Three Months Ended September 30, 2016
(in millions)	U.S.			Canada			U.S.			Canada
Components of net periodic benefit cost (credit):
Service cost	$	0.5		$	0.0		$	0.4		$	0.1
Interest cost	0.6			0.8			0.7			0.8
Expected return on plan assets	(1.2		)	(1.0		)	(1.2		)	(0.9		)
Amortization of net loss	0.1			0.0			0.0			0.0
Net periodic benefit cost (credit)	$	0.0		$	(0.2	)	$	(0.1	)	$	0.0



	Nine Months Ended September 30, 2017						Nine Months Ended September 30, 2016
(in millions)	U.S.			Canada			U.S.			Canada
Components of net periodic benefit cost (credit):
Service cost	$	1.5		$	0.2		$	1.3		$	0.2
Interest cost	2.0			2.1			2.5			2.4
Expected return on plan assets	(3.8		)	(2.8		)	(3.8		)	(2.7		)
Amortization of net loss	0.1			0.1			0.1			0.1
Net periodic benefit cost (credit)	$	(0.2	)	$	(0.4	)	$	0.1		$	0.0



(in millions)	Total		Level 1	Level 2		Level 3
ABL Facility	$	969.3		$	969.3
Tax Receivable Agreement	61.0					61.0
Contingent Consideration: Earn-out	30.0					30.0



(in millions)	TRA Contingent Liability
Balance at December 31, 2016	$	67.9
Change in fair value adjustment recorded in other expense, net	0.9
Principal payment	(8.5		)
Balance at March 31, 2017	60.3
Change in fair value adjustment recorded in other expense, net	1.1
Balance at June 30, 2017	61.4
Change in fair value adjustment recorded in other expense, net	(0.4		)
Balance at September 30, 2017	$	61.0



(in millions)	TRA Contingent Liability
Balance at December 31, 2015	$	63.0
Change in fair value adjustment recorded in other expense, net	1.8
Balance at March 31, 2016	64.8
Change in fair value adjustment recorded in other expense, net	2.0
Balance at June 30, 2016	66.8
Change in fair value adjustment recorded in other expense, net	1.0
Balance at September 30, 2016	$	67.8



	Three Months Ended September 30,						2017 vs. 2016		Nine Months Ended September 30,						2017 vs. 2016
(in millions)	2017			2016			Increase (Decrease) %		2017			2016			Increase (Decrease) %
Net sales	$	799.6		$	730.1		9.5	%	$	2,266.0		$	2,106.4		7.6	%
Adjusted EBITDA	62.1			59.5			4.4	%	166.7			165.4			0.8	%
Adjusted EBITDA as a % of net sales	7.8		%	8.1		%			7.4		%	7.9		%