UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission file number 001-36479

VERITIV CORPORATION

(Exact name of registrant as specified in its charter)


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	30328
(Address of principal executive offices)		(Zip Code)

(770) 391-8200

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐☒	Accelerated filer	☒☐
Non-accelerated filer	☐	Smaller reporting company	☒☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant's common stock as of ~~April 30, 2021~~May 3, 2022 was ~~15,664,599.~~14,686,739.

TABLE OF CONTENTS


		Page
Part I: FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Statements of Operations for the three months ended March 31 ~~2021~~, 202 2 and ~~2020~~2021	1
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended ~~ended~~ March 31 ~~2021~~, 202 2 and ~~2020~~2021	2
	Condensed Consolidated Balance Sheets as of March 31 ~~2021~~, 202 2 and December 31, ~~2020~~2021	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31 ~~2021~~, 202 2 and ~~2020~~2021	4
	Condensed Consolidated Statements of Shareholders' Equity for the three months ended March 31 ~~2021~~, 202 2 and ~~2020~~2021	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1921
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3132
Item 4.	Controls and Procedures	3133

Part II: OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 6.	Exhibits	34
SIGNATURES		35

Table of Contents

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,				Three Months Ended March 31,
		2021		2020				2022		2021
Net sales (including sales to related party of $5.6 in 2020)		$	1,559.3	$	1,707.3
Cost of products sold (including purchases from related party of $18.8 in 2020) (exclusive of depreciation and amortization shown separately below)		1,238.1		1,359.6
Net sales							Net sales	$	1,858.1	$	1,559.3
Cost of products sold (exclusive of depreciation and amortization shown separately below)							Cost of products sold (exclusive of depreciation and amortization shown separately below)	1,455.4		1,238.1
Distribution expenses	Distribution expenses	101.5		123.4			Distribution expenses	112.2		101.5
Selling and administrative expenses	Selling and administrative expenses	166.4		203.6			Selling and administrative expenses	187.9		166.4
Depreciation and amortization	Depreciation and amortization	14.5		13.8			Depreciation and amortization	12.7		14.5

Restructuring charges, net	Restructuring charges, net	4.3		0			Restructuring charges, net	2.7		4.3
Operating income (loss)	Operating income (loss)	34.5		6.9			Operating income (loss)	87.2		34.5
Interest expense, net	Interest expense, net	5.1		7.0			Interest expense, net	3.5		5.1
Other (income) expense, net	Other (income) expense, net	(1.0)		(0.1)			Other (income) expense, net	(0.6)		(1.0)
Income (loss) before income taxes	Income (loss) before income taxes	30.4		0.0			Income (loss) before income taxes	84.3		30.4
Income tax expense (benefit)	Income tax expense (benefit)	9.1		0.4			Income tax expense (benefit)	5.8		9.1

Net income (loss)	Net income (loss)	$	21.3	$	(0.4)		Net income (loss)	$	78.5	$	21.3

Earnings (loss) per share:	Earnings (loss) per share:						Earnings (loss) per share:

Basic earnings (loss) per share		$	1.34	$	(0.02)
Basic							Basic	$	5.31	$	1.34

Diluted earnings (loss) per share		$	1.28	$	(0.02)
Diluted							Diluted	$	5.12	$	1.28

Weighted-average shares outstanding:	Weighted-average shares outstanding:						Weighted-average shares outstanding:
Basic	Basic	15.88		16.16			Basic	14.77		15.88
Diluted	Diluted	16.66		16.16			Diluted	15.32		16.66

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

VERITIV CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, unaudited)


		Three Months Ended March 31,				Three Months Ended March 31,
		2021		2020				2022		2021
Net income (loss)	Net income (loss)	$	21.3	$	(0.4)		Net income (loss)	$	78.5	$	21.3
Other comprehensive income (loss):	Other comprehensive income (loss):						Other comprehensive income (loss):
Foreign currency translation adjustments	Foreign currency translation adjustments	(0.3)		(14.0)			Foreign currency translation adjustments	2.6		(0.3)
Change in fair value of cash flow hedge, net of tax (1)		0.0		0.0
Pension liability adjustments, net of tax (1)		0.0		0.0

Other comprehensive income (loss)	Other comprehensive income (loss)	(0.3)		(14.0)			Other comprehensive income (loss)	2.6		(0.3)
Total comprehensive income (loss)	Total comprehensive income (loss)	$	21.0	$	(14.4)		Total comprehensive income (loss)	$	81.1	$	21.0

~~(1)~~ ~~Amounts shown are net of tax impacts, which were not significant for the periods presented.~~

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

VERITIV CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in millions, except par value, unaudited)


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	109.0	$	120.6	Cash and cash equivalents	$	33.8	$	49.3
Accounts receivable, less allowances of $41.1 and $41.6, respectively		853.3		849.5
Accounts receivable, less allowances of $30.2 and $34.4, respectively						Accounts receivable, less allowances of $30.2 and $34.4, respectively	944.3		1,011.2

Inventories	Inventories	493.5		465.4		Inventories	407.7		484.5

Other current assets	Other current assets	118.2		119.5		Other current assets	118.9		131.5

Assets-held-for-sale						Assets-held-for-sale	300.5		1.2
Total current assets	Total current assets	1,574.0		1,555.0		Total current assets	1,805.2		1,677.7
Property and equipment (net of accumulated depreciation and amortization of $382.4 and $375.9, respectively)		182.9		194.7
Property and equipment (net of accumulated depreciation and amortization of $313.9 and $332.4, respectively)						Property and equipment (net of accumulated depreciation and amortization of $313.9 and $332.4, respectively)	137.1		162.9
Goodwill	Goodwill	99.6		99.6		Goodwill	96.3		99.6
Other intangibles, net	Other intangibles, net	46.3		47.4		Other intangibles, net	38.9		42.7
Deferred income tax assets	Deferred income tax assets	56.9		60.0		Deferred income tax assets	59.8		47.1
Other non-current assets	Other non-current assets	369.0		378.3		Other non-current assets	369.9		408.4
Total assets	Total assets	$	2,328.7	$	2,335.0	Total assets	$	2,507.2	$	2,438.4
Liabilities and shareholders' equity	Liabilities and shareholders' equity					Liabilities and shareholders' equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	513.4	$	471.9	Accounts payable	$	512.4	$	561.9

Accrued payroll and benefits	Accrued payroll and benefits	50.8		80.6		Accrued payroll and benefits	54.9		110.0

Other accrued liabilities	Other accrued liabilities	167.5		182.2		Other accrued liabilities	165.8		185.7
Liabilities-held-for-sale						Liabilities-held-for-sale	172.9		—
Current portion of debt	Current portion of debt	14.9		14.7		Current portion of debt	15.0		16.0

Total current liabilities	Total current liabilities	746.6		749.4		Total current liabilities	921.0		873.6
Long-term debt, net of current portion	Long-term debt, net of current portion	600.7		589.1		Long-term debt, net of current portion	511.5		499.7

Defined benefit pension obligations	Defined benefit pension obligations	17.6		18.2		Defined benefit pension obligations	3.5		7.2

Other non-current liabilities	Other non-current liabilities	386.4		395.2		Other non-current liabilities	391.4		422.1
Total liabilities	Total liabilities	1,751.3		1,751.9		Total liabilities	1,827.4		1,802.6
Commitments and contingencies (Note 12)				00
Commitments and contingencies (Note 11)						Commitments and contingencies (Note 11)			00
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:

Preferred stock, $0.01 par value, 10.0 million shares authorized, NaN issued		0		0
Common stock, $0.01 par value, 100.0 million shares authorized; shares issued - 16.8 million and 16.6 million, respectively; shares outstanding - 15.5 million and 15.9 million, respectively		0.2		0.2
Preferred stock, $0.01 par value, 10.0 million shares authorized, none issued						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 17.0 million, respectively; shares outstanding - 15.0 million and 14.6 million, respectively						Common stock, $0.01 par value, 100.0 million shares authorized; shares issued - 17.5 million and 17.0 million, respectively; shares outstanding - 15.0 million and 14.6 million, respectively	0.2		0.2
Additional paid-in capital	Additional paid-in capital	632.8		634.9		Additional paid-in capital	607.1		633.8
Accumulated earnings (deficit)	Accumulated earnings (deficit)	19.9		(1.4)		Accumulated earnings (deficit)	221.7		143.2
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(33.8)		(33.5)		Accumulated other comprehensive loss	(21.7)		(24.3)
Treasury stock at cost - 1.3 million shares in 2021 and 0.7 million shares in 2020		(41.7)		(17.1)
Treasury stock at cost - 2.5 million and 2.4 million shares, respectively						Treasury stock at cost - 2.5 million and 2.4 million shares, respectively	(127.5)		(117.1)
Total shareholders' equity	Total shareholders' equity	577.4		583.1		Total shareholders' equity	679.8		635.8

Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	2,328.7	$	2,335.0	Total liabilities and shareholders' equity	$	2,507.2	$	2,438.4

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

VERITIV CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)

Three Months Ended March 31,
2021 2020
Operating activities
Net income (loss) $ 21.3 $ (0.4)
Depreciation and amortization 14.5 13.8
Amortization and write-off of deferred financing fees 0.3 0.6
Net losses (gains) on disposition of assets and sale of a business (2.2) 0.1
Provision for expected credit losses 0.9 4.4
Deferred income tax provision (benefit) 3.1 5.2
Stock-based compensation 1.2 9.4
Other non-cash items, net 0.8 2.6
Changes in operating assets and liabilities
Accounts receivable and related party receivable (10.3) (19.6)
Inventories (30.7) 38.5
Other current assets 1.7 1.2
Accounts payable and related party payable 54.3 50.9
Accrued payroll and benefits (29.8) (13.2)
Other accrued liabilities (10.9) (8.8)
Other (1.0) 0.1
Net cash provided by (used for) operating activities 13.2 84.8
Investing activities
Property and equipment additions (6.3) (8.9)
Proceeds from asset sales and sale of a business 8.0 0.7
Net cash provided by (used for) investing activities 1.7 (8.2)
Financing activities
Change in book overdrafts (9.2) (24.7)
Borrowings of long-term debt 1,392.8 1,479.8
Repayments of long-term debt (1,378.9) (1,483.6)
Payments under right-of-use finance leases (3.3) (2.9)
Purchase of treasury stock (24.6) (3.5)
Payments under Tax Receivable Agreement 0 (0.3)
Payments under other contingent consideration 0 (3.5)
Other (2.9) (0.5)
Net cash provided by (used for) financing activities (26.1) (39.2)
Effect of exchange rate changes on cash (0.4) (0.8)
Net change in cash and cash equivalents (11.6) 36.6
Cash and cash equivalents at beginning of period 120.6 38.0
Cash and cash equivalents at end of period $ 109.0 $ 74.6
Supplemental cash flow information
Cash paid for income taxes, net of refunds $ 11.2 $ 0.6
Cash paid for interest 4.6 6.2
Non-cash investing and financing activities
Non-cash additions to property and equipment for right-of-use finance leases $ 0.2 $ 11.2
Non-cash additions to other non-current assets for right-of-use operating leases 11.3 10.8


	Three Months Ended March 31,
	2022		2021
Operating activities
Net income (loss)	$	78.5	$	21.3


Depreciation and amortization	12.7		14.5
Amortization and write-off of deferred financing fees	0.4		0.3

Net losses (gains) on disposition of assets and sale of a business	(2.3)		(2.2)

Provision for expected credit losses	(0.6)		0.9
Deferred income tax provision (benefit)	(12.7)		3.1
Stock-based compensation	2.8		1.2
Other non-cash items, net	0.5		0.8
Changes in operating assets and liabilities
Accounts receivable	(25.8)		(10.3)
Inventories	(8.8)		(30.7)
Other current assets	(1.1)		1.7
Accounts payable	4.5		54.3
Accrued payroll and benefits	(50.6)		(29.8)
Other accrued liabilities	1.0		(10.9)
Other	(4.4)		(1.0)


Net cash provided by (used for) operating activities	(5.9)		13.2
Investing activities

Property and equipment additions	(9.4)		(6.3)
Proceeds from asset sales and sale of a business	0.2		8.0
Proceeds from insurance related to property and equipment	2.1		—




Net cash provided by (used for) investing activities	(7.1)		1.7
Financing activities

Change in book overdrafts	20.3		(9.2)


Borrowings of long-term debt	1,515.2		1,392.8
Repayments of long-term debt	(1,481.8)		(1,378.9)
Payments under right-of-use finance leases	(3.4)		(3.3)
Payments under vendor-based financing arrangements	(3.2)		—


Purchase of treasury stock	(10.4)		(24.6)


Impact of tax withholding on share-based compensation	(29.5)		(3.3)
Other	0.2		0.4


Net cash provided by (used for) financing activities	7.4		(26.1)
Effect of exchange rate changes on cash	0.0		(0.4)
Net change in cash and cash equivalents, including cash classified within assets-held-for-sale	(5.6)		(11.6)
Less: cash included in assets-held-for-sale, end of period	(9.9)		—
Net change in cash and cash equivalents	(15.5)		(11.6)
Cash and cash equivalents at beginning of period	49.3		120.6
Cash and cash equivalents at end of period	$	33.8	$	109.0
Supplemental cash flow information
Cash paid for income taxes, net of refunds	$	15.1	$	11.2
Cash paid for interest	2.9		4.6
Non-cash investing and financing activities




Non-cash additions to property and equipment for right-of-use finance leases and vendor-based financing arrangements	$	15.6	$	0.2
Non-cash additions to other non-current assets for right-of-use operating leases	31.2		11.3

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

VERITIV CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in millions, unaudited)


		2021																					2022
		Common Stock Issued			Additional Paid-in Capital				Accumulated Earnings (Deficit)			AOCL (1)		Treasury Stock					Total				Common Stock Issued					Additional Paid-in Capital				Accumulated Earnings (Deficit)			AOCL (1)				Treasury Stock					Total
		Shares	Amount								Shares			Amount				Shares				Amount									Shares							Amount
Balance at December 31, 2020		16.6	$	0.2			$	634.9				$	(1.4)	$	(33.5)	(0.7)					$	(17.1)		$	583.1
Balance at December 31, 2021																						Balance at December 31, 2021	17.0			$	0.2		$	633.8			$	143.2		$	(24.3)			(2.4)		$	(117.1)		$	635.8
Net income (loss)	Net income (loss)								21.3										21.3			Net income (loss)										78.5												78.5
Other comprehensive income (loss)	Other comprehensive income (loss)											(0.3)							(0.3)			Other comprehensive income (loss)													2.6									2.6
Stock-based compensation	Stock-based compensation				1.2														1.2			Stock-based compensation						2.8																2.8
Issuance of common stock, net of stock received for minimum tax withholdings	Issuance of common stock, net of stock received for minimum tax withholdings	0.2	0.0		(3.3)														(3.3)			Issuance of common stock, net of stock received for minimum tax withholdings	0.5			0.0		(29.5)																(29.5)

Treasury stock purchases	Treasury stock purchases													(0.6)		(24.6)			(24.6)			Treasury stock purchases																	(0.1)		(10.4)			(10.4)
Balance at March 31, 2021		16.8	$	0.2	$	632.8			$	19.9		$	(33.8)	(1.3)		$	(41.7)		$	577.4
Balance at March 31, 2022																						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.


		2020																					2021
		Common Stock Issued			Additional Paid-in Capital				Accumulated Earnings (Deficit)			AOCL (1)		Treasury Stock					Total				Common Stock Issued					Additional Paid-in Capital				Accumulated Earnings (Deficit)			AOCL (1)				Treasury Stock					Total
		Shares	Amount								Shares			Amount				Shares				Amount									Shares							Amount
Balance at December 31, 2019		16.4	$	0.2			$	618.0				$	(35.3)	$	(33.1)	(0.3)					$	(13.6)		$	536.2
Balance at December 31, 2020																						Balance at December 31, 2020	16.6			$	0.2		$	634.9			$	(1.4)		$	(33.5)			(0.7)		$	(17.1)		$	583.1
Net income (loss)	Net income (loss)								(0.4)										(0.4)			Net income (loss)										21.3												21.3
Other comprehensive income (loss)	Other comprehensive income (loss)											(14.0)							(14.0)			Other comprehensive income (loss)													(0.3)									(0.3)
Stock-based compensation	Stock-based compensation				9.4														9.4			Stock-based compensation						1.2																1.2
Issuance of common stock, net of stock received for minimum tax withholdings	Issuance of common stock, net of stock received for minimum tax withholdings	0.1	0.0		(0.6)														(0.6)			Issuance of common stock, net of stock received for minimum tax withholdings	0.2			0.0		(3.3)																(3.3)
Adoption impact - Accounting Standards Update 2016-13									(0.3)										(0.3)

Treasury stock purchases	Treasury stock purchases													(0.4)		(3.5)			(3.5)			Treasury stock purchases																	(0.6)		(24.6)			(24.6)
Balance at March 31, 2020		16.5	$	0.2	$	626.8			$	(36.0)		$	(47.1)	(0.7)		$	(17.1)		$	526.8
Balance at March 31, 2021																						Balance at March 31, 2021	16.8			$	0.2	$	632.8			$	19.9		$	(33.8)			(1.3)		$	(41.7)		$	577.4

(1) Accumulated other comprehensive loss.

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

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 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 125 distribution centers~~ primarily throughout the United States ("U.S."), Canada and Mexico.

As the print and publishing industries continue to evolve, the Company continues to focus on ways to share costs and leverage combined resources where possible. In order to better align the resources of the Company's print and publishing organizations with the needs of the changing marketplaces, during the first quarter of 2022 the Company reevaluated the way in which it would service its customers, manage its product offerings and allocate resources to support these areas of its business. This resulted in a decision to combine the print and publishing operations, resulting in a new reportable segment known as Print Solutions. Prior period results have been revised to align with the new presentation. See Note 2, Revenue Recognition and Credit Losses, for additional information regarding the Company's product offerings and reportable segments.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted 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 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, ~~2020.~~2021. 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, particularly in light of the ~~novel coronavirus ("COVID-19")~~divestiture of Veritiv Canada, Inc. 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 valuations, inventory valuation, employee benefit plans, long-term incentive plans, income tax contingency accruals and valuation allowances, multi-employer pension plan ("MEPP") withdrawal liabilities, contingency accruals, ~~and~~ goodwill and other intangible asset ~~valuations.~~valuations and the determination of assets and liabilities that are held-for-sale. 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.

Table of Contents

Primarily beginning in April 2020, ~~unfavorable impacts from~~ the COVID-19 pandemic ~~have had a negative impact on the Company's~~has affected Veritiv's operational and financial ~~results.~~performance to varying degrees. As a result of the COVID-19 pandemic, 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 ~~including goodwill,~~ and deferred tax valuation allowances. The extent to which the COVID-19 pandemic ~~impacts~~continues to impact the Company's business, results of operations, access to sources of liquidity and financial condition will depend on future developments. These developments, which are ~~highly~~ uncertain and ~~cannot be predicted,~~difficult to predict, include, but are not limited to, the duration, spread and severity of the COVID-19 pandemic including new variants, the effects of the COVID-19 pandemic on the Company's employees, customers, suppliers and vendors, ~~and the remedial actions and stimulus~~ measures adopted or recommended by local and federal governments or health authorities in response to the pandemic, the availability, adoption and effectiveness of avaccines and vaccine boosters and to what extent normal economic and operating conditions can resume and be sustained. 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 ~~that has occurred~~ or ~~may occur~~long-term changes in ~~the future.~~customer behavior. Estimates are revised as additional information becomes available.

~~Table of Contents~~

Accounting Pronouncements

Recently Adopted Accounting Standards

Effective January 1, ~~2021,~~2022, the Company adopted Accounting Standards Update ("ASU") ~~2019-12,~~2021-10, ~~Income Taxes~~Government Assistance (Topic ~~740).~~832 ~~The~~) on a prospective basis. This standard ~~removes certain exceptions~~increases the transparency of government assistance provided to entities by including disclosure of (1) the types of assistance, (2) an entity's accounting for ~~recognizing deferred taxes for investments, performing intraperiod allocation~~the assistance and ~~calculating income taxes in interim periods. The update also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members~~(3) the effect of ~~a consolidated group.~~the assistance on an entity's financial statements. The amendments in this update are effective for ~~fiscal years, and interim~~annual periods ~~within those fiscal years,~~ beginning after December 15, ~~2020. The~~2021. An entity should apply the amendments in this update ~~related~~either (1) prospectively to ~~separate~~all transactions within the scope of the amendments that are reflected in financial statements at the date of ~~legal entities~~initial application and new transactions that are ~~not subject~~entered into after the date of initial application or (2) retrospectively to tax should be applied on a retrospective basis for all periods presented. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis.those transactions. The adoption did not materially impact the Company's consolidated financial statements and disclosures.

Recently Issued Accounting Standards Not Yet Adopted

ASU 2020-04, Reference Rate Reform (Topic 848). - This standard provides temporary optional expedients and exceptions to accounting guidance for certain contract modifications and hedging arrangements to ease financial reporting burdens as the market transitions from the London Interbank Offered Rate ("LIBOR") and other interbank reference rates to alternative reference rates. 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, 2022. The Company has ~~an interest rate cap arrangement and~~ long-term debt for which existing payments are based on LIBOR. The ~~Company is currently evaluating~~Company's ABL Facility includes certain provisions, which are not yet in effect, to facilitate the ~~timing of adoption and the related impact on its consolidated financial statements.~~transition from LIBOR to a new replacement benchmark rate. Currently, the Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.

2. REVENUE RECOGNITION AND CREDIT LOSSES

Veritiv applies the five-step model to assess its contracts with customers. The Company's revenue is reported as net sales and is measured as the determinable transaction price, net of any variable consideration (e.g., sales incentives and rights to return product) and any taxes collected from customers and remitted to governmental authorities. Certain revenues are derived from shipments which are made directly from a manufacturer to a Veritiv customer. The 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. ~~The Company has established credit and collection processes whereby collection assessments are performed and expected credit losses are recognized.~~ Veritiv enters into incentive programs with certain of its customers, which are generally based on sales to those same customers. Veritiv follows the expected value method when estimating its retrospective incentives and 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. The Company has established credit and collection processes whereby collection assessments are performed and expected credit losses are recognized.

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

Table of Contents

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, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 and other accrued liabilities on the Condensed Consolidated Balance Sheets. Veritiv expects to satisfy these remaining performance obligations and recognize the related revenues upon delivery of the goods

~~Table of Contents~~

and services to 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 sale arrangements requiring prepayment initially cover a 60 - 90 day period but can be renewed by the customer.

See the table below for a year-to-date summary of the changes to the customer contract liabilities ~~for the three months ended March 31, 2021 and 2020:~~balance:


	Customer Contract Liabilities
(in millions)	2022		2021
Balance at January 1,	$	21.8	$	12.2
Payments received	15.3		14.2
Revenue recognized from beginning balance	(11.4)		(7.3)
Revenue recognized from current year receipts	(5.1)		(7.1)
Reclassified to liabilities-held-for-sale (1)	(1.1)		—
Balance at March 31,	$	19.5	$	12.0

(1)

Customer Contract Liabilities
(in millions) 2021 2020
Balance at January 1, $ 12.2 $ 11.7
    Payments received 14.2 11.0
    Revenue recognized from beginning balance (7.3) (9.0)
    Revenue recognized from current year receipts (7.1) (2.8)
Balance at March 31, $ 12.0 $ 10.9
See Note 13, Divestitures, for information on the sale of Veritiv Canada, Inc.

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 with first quarter 2022 net sales in the U.S., Canada and Mexico of approximately ~~87%~~86%, ~~10%~~11% and 2%, respectively. 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 is a brief description of the Company's 43 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 manages the growth and profitability of the 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 the Veritiv logistics solutions business which provides transportation and warehousing solutions.

•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 ~~the fiber-based,~~ flexible, corrugated and fiber, ancillary packaging, rigid and equipment categories. The business is strategically focused on higher growth industry sectors including manufacturing, food ~~processing~~ and ~~service, fulfillment~~beverage, wholesale and ~~internet~~ retail, healthcare and transportation, as well as ~~niche~~specialty sectors based on industry and 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 ~~such as~~in product categories that include towels and tissues, ~~commercial cleaning chemicals,~~food service, personal protective equipment, cleaning chemicals and ~~safety supplies, wipers, can liners, soaps and sanitizers, dispensers, sanitary maintenance supplies and equipment, hazard supplies, and shampoos and amenities~~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 ~~digital, specialty~~ products and ~~graphics consumables~~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 ~~foundation to service national, regional~~comprehensive suite of solutions in paper procurement, print management, supply chain and ~~local customers across North America.~~distribution.

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

Table of Contents

See Note ~~13,~~12, Segment and Other Information, for the disaggregation of revenue and other information related to the Company's reportable segments and Corporate & Other.

~~Table of Contents~~

Allowance for Credit Losses

The components of the accounts receivable allowances were as follows:


(in millions)	(in millions)	March 31, 2021		December 31, 2020		(in millions)	March 31, 2022		December 31, 2021
Allowance for credit losses	Allowance for credit losses	$	30.7	$	31.4	Allowance for credit losses	$	21.5	$	23.7
Other allowances(1)	Other allowances(1)	10.4		10.2		Other allowances(1)	8.7		10.7
Total accounts receivable allowances	Total accounts receivable allowances	$	41.1	$	41.6	Total accounts receivable allowances	$	30.2	$	34.4

(1) Includes amounts reserved for credit memos, customer discounts, customer short pays and other miscellaneous items. The current period amount is shown net of $1.2 million related to Veritiv Canada, Inc., which was reclassified from the allowance to assets-held-for-sale.

Below is a year-to-date rollforward of the Company’s allowance for credit ~~losses for the three months ended March 31, 2021:~~losses:

Packaging and Facility Solutions Print - High Risk Print - Medium/Low Risk
(in millions) U.S. Canada U.S. Canada U.S. Canada
Publishing(1)
Rest of world
Corporate & Other(1)
Total
Ending balance, December 31, 2020 $ 14.4 $ 0.5 $ 10.2 $ 0.7 $ 2.2 $ 0.0 $ 1.6 $ 1.0 $ 0.8 $ 31.4
Add / (Deduct):
Provision for expected credit losses 1.9 0.1 (0.8) 0.0 0.3 0.0 (0.7) 0.0 0.1 0.9
Write-offs charged against the allowance (1.3) 0.0 (0.2) 0.0 0.0 0 0 0.0 (0.1) (1.6)
Recoveries of amounts previously written off 0.0 0 0.0 0 0.0 0 0 0 0 0.0
Other adjustments(2)
0 0.0 1.4 0.0 (1.4) 0.0 0 0.0 0 0.0
Ending balance, March 31, 2021 $ 15.0 $ 0.6 $ 10.6 $ 0.7 $ 1.1 $ 0.0 $ 0.9 $ 1.0 $ 0.8 $ 30.7


	Packaging and Facility Solutions				Print Solutions - High Risk				Print Solutions - Medium/Low Risk
(in millions)	U.S.		Canada		U.S.		Canada		U.S.(1)		Canada		Rest of world		Corporate & Other(2)		Total
Balance at December 31, 2021	$	12.6	$	1.0	$	6.2	$	0.5	$	1.7	$	0.0	$	1.0	$	0.7	$	23.7
Add / (Deduct):
Provision for expected credit losses	0.0		0.1		(0.2)		0.0		(0.2)		0.0		0.1		0.1		(0.1)
Write-offs charged against the allowance	(0.4)		—		(0.3)		—		0.0		—		—		(0.1)		(0.8)
Recoveries of amounts previously written off	0.0		—		0.1		—		0.0		—		—		0.0		0.1
Other adjustments(3)	—		(1.1)		0.2		(0.5)		—		0.0		0.0		—		(1.4)
Balance at March 31, 2022	$	12.2	$	—	$	6.0	$	—	$	1.5	$	—	$	1.1	$	0.7	$	21.5

(1) Reflects the combined results for print and publishing operations.

(2)~~Publishing and~~ Corporate & Other have only U.S. ~~Operations.~~operations.

~~(2)~~(3) 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, and~~probable. These adjustments may also include accounts receivable allowances recorded in connection with ~~acquisitions.~~

acquisitions and divestitures, including reclassifications from the allowance to assets-held-for-sale.

The Company, under certain circumstances, enters into note receivable agreements with customers. Expected credit losses are recognized when collectability is uncertain; these losses are included in selling and administrative expenses on the Condensed Consolidated Statements of Operations. For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the Company recognized ~~$0.0~~$(0.5) million and ~~$2.3~~$0.0 million, respectively, in the provision for expected credit losses related to these notes receivable. During the first quarter of 2022, the Company received higher than expected payments, resulting in a favorable reduction to the required provision. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company held ~~$2.0~~$0.1 million and ~~$2.2~~$0.5 million, respectively, in notes receivable, which is reflected within other current assets on the Condensed Consolidated Balance Sheets.

3. LEASES

The Company leases certain property and equipment used for operations to 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, ~~2021,~~2022, the Company operated from approximately ~~125~~115 distribution centers of which approximately ~~115~~110 were ~~leased.~~leased; of the leased facilities, 12 are located in Canada. These facilities are strategically located throughout the U.S., Canada 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.

Table of Contents

The components of lease expense were as follows:

(in millions) Three Months Ended
March 31,
Lease Classification Financial Statement Classification 2021 2020
Short-term lease expense(1)
Operating expenses $ 1.0 $ 0.9
Operating lease expense(2)
Operating expenses $ 25.6 $ 27.1
Finance lease expense:
Amortization of right-of-use assets Depreciation and amortization $ 3.7 $ 3.5
Interest expense Interest expense, net 0.7 0.8
Total finance lease expense $ 4.4 $ 4.3
Total Lease Cost $ 31.0 $ 32.3


(in millions)		Three Months Ended March 31,
Lease Classification	Financial Statement Classification	2022		2021
Short-term lease expense(1)	Operating expenses	$	0.8	$	1.0

Operating lease expense(2)	Operating expenses	$	25.1	$	25.6




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


Total Lease Cost		$	30.3	$	31.0

(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-to-month leases.

~~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.

Supplemental balance sheets and other information were as ~~follows:~~

(in millions, except weighted-average data) March 31, 2021 December 31, 2020
Lease Classification Financial Statement Classification
Operating Leases:
Operating lease right-of-use assets Other non-current assets $ 342.4 $ 351.7
Operating lease obligations - current Other accrued liabilities $ 83.2 $ 81.9
Operating lease obligations - non-current Other non-current liabilities 296.4 307.4
Total operating lease obligations $ 379.6 $ 389.3
Weighted-average remaining lease term in years 5.9 6.1
Weighted-average discount rate 4.7 % 4.7 %
Finance Leases:
Finance lease right-of-use assets Property and equipment $ 73.4 $ 76.6
Finance lease obligations - current Current portion of debt $ 13.3 $ 13.4
Finance lease obligations - non-current Long-term debt, net of current portion 66.2 68.9
Total finance lease obligations $ 79.5 $ 82.3
Weighted-average remaining lease term in years 7.0 7.1
Weighted-average discount rate 3.7 % 3.7 %
follows (the current period amounts do not include Veritiv Canada, Inc. See Note 13, Divestitures, for information on the sale of this business):


(in millions, except weighted-average data)		March 31, 2022			December 31, 2021
Lease Classification	Financial Statement Classification
Operating Leases:
Operating lease right-of-use assets	Other non-current assets	$	344.6		$	375.6

Operating lease obligations - current	Other accrued liabilities	$	73.5		$	80.2
Operating lease obligations - non-current	Other non-current liabilities	304.3			329.3
Total operating lease obligations		$	377.8		$	409.5

Weighted-average remaining lease term in years		6.3			6.2
Weighted-average discount rate		4.4		%	4.5		%

Finance Leases:
Finance lease right-of-use assets	Property and equipment	$	32.7		$	66.3

Finance lease obligations - current	Current portion of debt	$	9.8		$	13.9
Finance lease obligations - non-current	Long-term debt, net of current portion	26.1			58.9
Total finance lease obligations		$	35.9		$	72.8

Weighted-average remaining lease term in years		4.0			6.4
Weighted-average discount rate		3.7		%	3.7		%

Table of Contents

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 2021 2020
Operating Leases:
Operating cash flows from operating leases Operating activities $ 26.5 $ 27.8
Finance Leases:
Operating cash flows from finance leases Operating activities $ 0.7 $ 0.8
Financing cash flows from finance leases Financing activities 3.3 2.9


(in millions)		Three Months Ended March 31,
Lease Classification	Financial Statement Classification	2022		2021
Operating Leases:
Operating cash flows from operating leases	Operating activities	$	25.0	$	26.5

Finance Leases:
Operating cash flows from finance leases	Operating activities	$	0.7	$	0.7
Financing cash flows from finance leases	Financing activities	3.4		3.3

Lease Commitments

Future minimum lease payments at March 31, ~~2021~~2022 were as follows:


(in millions)	(in millions)	Finance Leases		Operating Leases (1)		(in millions)	Finance Leases(1)		Operating Leases (1)(2)
2021 (excluding the three months ended March 31, 2021)		$	12.0	$	75.5
2022		15.6		87.1
2022 (excluding the three months ended March 31, 2022)						2022 (excluding the three months ended March 31, 2022)	$	8.9	$	67.6
2023	2023	13.3		67.1		2023	8.9		79.1
2024	2024	11.5		53.7		2024	7.3		65.7
2025	2025	10.7		42.8		2025	6.7		54.4
2026	2026	8.0		38.0		2026	4.0		50.1
2027						2027	2.0		43.6
Thereafter	Thereafter	19.9		73.8		Thereafter	1.3		75.0
Total future minimum lease payments	Total future minimum lease payments	91.0		438.0		Total future minimum lease payments	39.1		435.5
Amount representing interest	Amount representing interest	(11.5)		(58.4)		Amount representing interest	(3.2)		(57.7)
Total future minimum lease payments, net of interest	Total future minimum lease payments, net of interest	$	79.5	$	379.6	Total future minimum lease payments, net of interest	$	35.9	$	377.8

(1)The table does not include total future minimum lease payments of $35.7 million for finance leases and $43.2 million for operating leases that are classified as liabilities-held-for sale on the Condensed Consolidated Balance Sheets. See Note 13, Divestitures, for information on the sale of Veritiv Canada, Inc.

(2) Future sublease income of ~~$2.0~~$2.7 million is excluded from the operating leases amount in the table above.

Total future minimum lease payments at March 31, ~~2021~~2022 for finance and operating leases, including the amount representing interest, are comprised of ~~$455.9~~$429.0 million for real estate leases and ~~$73.1~~$45.6 million for non-real estate leases.

At March 31, ~~2021,~~2022, the Company had committed to additional future obligations of approximately ~~$24.3~~$1.4 million for ~~real estate operating~~delivery equipment finance leases that have not yet commenced and therefore are not included in the table above. These leases will commence within the next ~~nine~~three months with an average lease term of approximately ~~nine~~seven years.

4. RESTRUCTURING CHARGES

2020 Restructuring Plan

During ~~the second quarter of~~ 2020, the Company initiated a restructuring plan ~~in response~~(the "2020 Restructuring Plan") to (1) respond to the impact of the COVID-19 pandemic on its business operations, ~~and~~(2) address the ongoing secular changes in its ~~Print~~print and ~~Publishing segments. During the fourth quarter of 2020, the Company expanded the initial plan to~~publishing operations and (3) further align its cost structure with ongoing business needs as the Company executes on its stated corporate strategy. The ~~initial and expansion activities are collectively referred to as the "2020 Restructuring Plan." The~~ 2020 Restructuring Plan ~~includes (i) a reduction~~was substantially complete as of the Company's U.S. salaried workforce by approximately 15% across all business segments and corporate functions, (ii) the closure of certain warehouse facilities and retail stores, (iii) adjustments to various compensation plans, (iv) repositioning of inventory to expand the Company's service radius and (v) other actions.

~~The Company currently estimates it will incur total restructuring~~December 31, 2021, with remaining charges of ~~between $70~~approximately $4 million and $87 million in connection with the 2020 Restructuring Plan. These costs will include the following activities (i) employee termination and other one-time compensation costs, (ii) real estate exit costs, (iii) certain inventory related costs and (iv) other exit costs. Through March 31, 2021, the Company hasexpected to be incurred ~~approximately $56.5 million in costs and charges. Initial charges were incurred and recorded in June 2020. The Company expects to substantially complete the 2020 Restructuring Plan by~~through the end of ~~2021.~~

~~Table of Contents~~

2022.

Other direct costs reported in the ~~table~~tables below include facility closing costs and other incidental costs associated with the development, communication, administration and implementation of these ~~initiatives.~~initiatives; costs incurred exclude any non-cash portion of restructuring gains or losses on asset disposals.

The following table presents a summary of restructuring charges, net, related to restructuring initiatives that were incurred during the three months ended March 31, 2022 and the cumulative amounts since the initiatives began:

Table of Contents


(in millions)	Severance and Related Costs		Other Direct Costs		(Gain) Loss on Sale of Assets and Other (non-cash portion)		Total
2022	$	0.4	$	2.3	$	0.0	$	2.7


Cumulative	41.2		33.0		(3.9)		70.3

The following is a summary of the Company's 2020 Restructuring Plan liability activity for the current year:


(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 addition to the costs incurred in the table above, during the three months ended March 31, ~~2021 (costs incurred exclude any non-cash portion~~2022, the Company expensed $0.9 million of ~~restructuring gains or losses on asset disposals):~~Other Direct Costs, which was prepaid at December 31, 2021.

The following is a summary of the Company's 2020 Restructuring Plan liability activity for the prior year comparable period:


(in millions)	Severance and Related Costs		Other Direct Costs		Total
Balance at December 31, 2020	$	15.4	$	6.9	$	22.3
Costs incurred	(0.3)		2.7		2.4
Payments	(5.2)		(1.6)		(6.8)
Balance at March 31, 2021	$	9.9	$	8.0	$	17.9

In addition to the costs incurred in the table above, during the three months ended March 31, 2021, the Company expensed $1.9 million of Other Direct Costs, which was prepaid ~~during the fourth quarter of~~at December 31, 2020.

~~Additionally,~~In addition to the 2020 Restructuring Plan, the Company ~~holds~~has recorded other restructuring liabilities related to the previous restructuring plans that as of March 31, ~~2021,~~2022, totaled ~~$23.3~~$21.9 million, of which ~~$19.7~~$18.5 million was related to MEPP withdrawal obligations that will be paid-out over an approximate 20-year period. These other liabilities as of December 31, ~~2020,~~2021, totaled ~~$24.0~~$22.2 million, of which ~~$20.0~~$18.8 million was related to MEPP withdrawal obligations.

See Note ~~13,~~12, Segment and Other Information, for the impact that charges from these restructuring plans had on the Company's reportable segments.

Table of Contents

5. DEBT

The Company's debt obligations were as ~~follows:~~

follows (the current period amounts do not include Veritiv Canada, Inc. See
Note 13, Divestitures, for information on the sale of this business):


(in millions)	(in millions)	March 31, 2021		December 31, 2020		(in millions)	March 31, 2022		December 31, 2021
Asset-Based Lending Facility (the "ABL Facility")	Asset-Based Lending Facility (the "ABL Facility")	$	534.5	$	520.2	Asset-Based Lending Facility (the "ABL Facility")	$	474.2	$	440.8
Commercial card program	Commercial card program	1.6		1.3		Commercial card program	2.3		2.1
Vendor-based financing arrangements						Vendor-based financing arrangements	14.1		—
Finance leases	Finance leases	79.5		82.3		Finance leases	35.9		72.8
Total debt	Total debt	615.6		603.8		Total debt	526.5		515.7
Less: current portion of debt	Less: current portion of debt	(14.9)		(14.7)		Less: current portion of debt	(15.0)		(16.0)
Long-term debt, net of current portion	Long-term debt, net of current portion	$	600.7	$	589.1	Long-term debt, net of current portion	$	511.5	$	499.7

ABL Facility

~~On April 9, 2020,~~In 2021, the Company amended its ABL Facility to extend the maturity date to ~~April 9, 2025, reduced the aggregate commitments from $1.4 billion to $1.1 billion and adjusted~~May 20, 2026, adjust the pricing grid for applicable interest ~~rates.~~rates and update certain provisions to facilitate the transition from LIBOR to a new replacement benchmark rate. All other significant terms remained substantially the same. The Company ~~recognized a one-time charge of $0.6 million to interest expense, net, on the Condensed Consolidated Statement of Operations, for the write-off of a portion of the previously~~incurred and deferred certain financing costs associated with ~~lenders in~~ the ~~ABL Facility that exited the amended ABL Facility. In addition, the Company incurred and deferred $3.4 million of new financing costs associated with this~~ transaction, reflected in other non-current assets on the Condensed Consolidated Balance ~~Sheet,~~Sheets, which ~~will be~~are being amortized to interest expense on a straight-line basis over the amended term of 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 March 31, ~~2021,~~2022, the available additional borrowing capacity under the ABL Facility was approximately ~~$343.8~~$576.6 million. As of March 31, ~~2021,~~2022, the Company held ~~$12.1~~$11.0 million in outstanding letters of credit.

~~Table of Contents~~

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 March 31, ~~2021,~~2022, 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.

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, ~~2021,~~2022, the card carried a maximum credit limit of $37.5 million. At March 31, ~~2021~~2022 and December 31, ~~2020, $1.6~~2021, $2.3 million and ~~$1.3~~$2.1 million, respectively, was outstanding on the commercial card. The net change in the outstanding balance is ~~classified as a~~included in other financing ~~activity~~activities on the Condensed Consolidated Statements of Cash Flows.

Vendor-Based Financing Arrangements

On occasion, the Company enters into long-term vendor-based financing arrangements with suppliers to obtain products, services or property in 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 to be paid over a five-year term. At March 31, 2022, the vendor-based financing arrangement had an outstanding balance of $14.1 million. In order to determine the present value of the commitments, the Company used an imputed interest rate of 3.17%. The payments associated with this arrangement are classified as financing activities on the Condensed Consolidated Statements of Cash Flows.

6. INCOME TAXES

The Company calculated the expense or benefit for income taxes during the three months ended March 31, 2022 and 2021, by applying an estimate of the annual effective tax rate ~~("AETR")~~ for the full fiscal year to "ordinary" income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting ~~period.~~ For the three months ended March 31, 2020, due to the heightened uncertainty surrounding the COVID-19 pandemic, Veritiv was unable to reasonably estimate its AETR and used its actual year-to-date effective tax rate to calculate income tax expense.periods.

Table of Contents

The following table presents the Company's expense (benefit) for income taxes and the effective tax ~~rates for the three months ended March 31, 2021 and 2020:~~rates:

Three Months Ended March 31,
(in millions) 2021 2020
Income (loss) before income taxes $ 30.4 $ 0.0
Income tax expense (benefit) 9.1 0.4
Effective tax rate 29.9 % *

* not meaningful


	Three Months Ended March 31,
(in millions)	2022			2021
Income (loss) before income taxes	$	84.3		$	30.4
Income tax expense (benefit)	5.8			9.1
Effective tax rate	6.9		%	29.9		%

The difference between the Company's effective tax rates for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021 and the U.S. statutory tax rate of 21.0% primarily relates to vesting of stock compensation, non-deductible expenses, state income taxes (net of federal income tax benefit), ~~non-deductible expenses,~~ tax ~~expense for stock compensation vesting, Global Intangible Low-Taxed Income ("GILTI"),~~credits and the Company's pre-tax book income (loss) by jurisdiction. ~~In addition, Veritiv recognized~~Additionally, the ~~tax-effect of~~effective tax rate for the ~~Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in the quarter~~three months ended March 31, ~~2020, and recorded an estimated $2.1 million benefit, primarily related to~~2022 includes recognition of a deferred tax asset on the ~~carryback of net operating loss (“NOL” or “NOLs”) generated~~Company's investment in ~~2019 to prior years in which the U.S. statutory tax rate was 35%.~~

The CARES Act was signed into law on March 27, 2020 and makes significant economic stimulus changes and additional changes to the U.S. tax code, including, but not limited to, allowing the carryback of NOLs occurring in 2018, 2019, and 2020 to the prior five years and eliminating the taxable income limitation, changes interest expense limitation, includes a ~~technical correction for qualified improvement property depreciation and provides additional employee retention credits.~~foreign subsidiary.

7. ~~RELATED PARTY TRANSACTIONS~~

On March 3, 2021, Veritiv announced that its Board of Directors authorized a $50.0 million share repurchase program (the "2021 Share Repurchase Program"). Executing within the 2021 Share Repurchase Program, on March 9, 2021, Veritiv entered into a Share Repurchase Agreement with UWW Holdings, LLC (the "UWWH Stockholder"), pursuant to which the Company agreed to repurchase (the “Share Repurchase”) an aggregate of 553,536 shares of its common stock owned by the UWWH Stockholder for an aggregate purchase price of $23.2 million. The Share Repurchase closed on March 12, 2021 and the Company funded the Share Repurchase with cash on hand. Concurrently with the closing of the Share Repurchase, the UWWH Stockholder sold the remainder of its shares of Veritiv common stock to an unrelated third party.

~~Table of Contents~~

~~Agreements with the UWWH Stockholder prior to the Share Repurchase~~

In January 2020, in connection with the Tax Receivable Agreement ("TRA") executed at the time of the Merger, Veritiv paid $0.3 million in principal and interest to the UWWH Stockholder for the utilization of pre-merger NOLs in its 2018 federal and state tax returns. In December 2020, the Company and the UWWH Stockholder agreed to settle the TRA. The Company paid the UWWH Stockholder a total of $12.0 million in settlement of all past and future liabilities that would have been owed under the TRA and the parties agreed to a mutual release of claims under the TRA. See ~~Note 9, Fair Value Measurements, for additional information regarding the TRA.~~

On November 19, 2020, the UWWH Stockholder sold 1.40 million shares of Veritiv common stock in an underwritten public offering. The Company did not sell or repurchase any shares and did not receive any of the proceeds. Following completion of such sale, which reduced the UWWH Stockholder's ownership below 10% of Veritiv's outstanding common stock, Georgia-Pacific, as joint owner of the UWWH Stockholder, is no longer treated as a related party. The Company considers its stockholders that own more than 10.0% of its outstanding common stock to be related parties as defined within ASC 850, ~~Related Party Disclosures.~~

~~Transactions with Georgia-Pacific~~

Veritiv purchases certain inventory items from, and sells certain inventory items to, Georgia-Pacific in the normal course of business. The following table summarizes the financial impact of the transactions with Georgia-Pacific during the prior year period when it was considered a related party:

~~Three Months Ended March 31,~~

~~(in millions)~~

~~2020~~

~~Sales to Georgia-Pacific, reflected in net sales~~

~~5.6~~

~~Purchases of inventory from Georgia-Pacific, recognized in cost of products sold~~

~~18.8~~

8. DEFINED BENEFIT PLANS

Veritiv does not maintain any ~~active~~open defined benefit plans for its non-union employees. Veritiv maintains aan open defined benefit pension plan in the U.S. for employees covered by certain collectively bargained agreements. Veritiv also assumed responsibility for Unisource's defined benefit plans, which include frozen cash balance accounts for certain former Unisource employees. 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 AOCL over the expected future working lifetime of active plan participants.

Effective December 1, 2021, the Company divided the U.S. Veritiv Pension Plan by establishing a new Veritiv Hourly Pension Plan to provide benefits to certain employees who were accruing a benefit under the U.S. Veritiv Pension Plan pursuant to the terms of a collective bargaining agreement. Veritiv currently has the intent to subsequently terminate and settle the U.S. Veritiv Pension Plan. The Veritiv Hourly Pension Plan will remain open.

Total net periodic benefit cost (credit) associated with these plans is summarized below:

Three Months Ended March 31, 2021 Three Months Ended March 31, 2020
(in millions) U.S. Canada U.S. Canada
Components of net periodic benefit cost (credit):
Service cost $ 0.6 $ 0.1 $ 0.6 $ 0.1
Interest cost $ 0.3 $ 0.5 $ 0.4 $ 0.6
Expected return on plan assets (1.1) (1.0) (1.0) (0.9)
Total other components $ (0.8) $ (0.5) $ (0.6) $ (0.3)
Net periodic benefit cost (credit) $ (0.2) $ (0.4) $ 0.0 $ (0.2)


	Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
(in millions)	U.S.		Canada		U.S.		Canada
Components of net periodic benefit cost (credit):
Service cost	$	0.8	$	0.1	$	0.6	$	0.1

Interest cost	$	0.3	$	0.6	$	0.3	$	0.5
Expected return on plan assets	(0.5)		(1.1)		(1.1)		(1.0)



Total other components	$	(0.2)	$	(0.5)	$	(0.8)	$	(0.5)
Net periodic benefit cost (credit)	$	0.6	$	(0.4)	$	(0.2)	$	(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 AOCL over the expected future working lifetime of active plan participants.

~~Table of Contents~~

9.8. FAIR VALUE MEASUREMENTS

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the carrying amounts of cash and cash equivalents, receivables, payables, other components of other current assets and other 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. Cash and cash equivalents may include highly-liquid investments with original maturities to the Company of three months or less that are readily convertible into known amounts of cash.

Borrowings under the ABL Facility are at variable market interest rates, and accordingly, the carrying amount approximates fair value, which is a Level 2 measurement. The fair value of the debt-related interest rate cap was derived from a discounted cash flow analysis based on the terms of the agreement and Level 2 data for the forward interest rate curve adjusted for

Table of Contents

the Company's credit risk and was not significant for the periods presented in this report. See Note 5, Debt, for additional information regarding the Company's ABL Facility and other obligations.

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had ~~assets held for sale~~assets-held-for-sale of ~~$1.4~~$300.5 million and ~~$0.4~~$1.2 million, respectively. At March 31, 2022 the Company had liabilities-held-for-sale of $172.9 million. These assets and liabilities are included, ~~in other current assets on the Condensed Consolidated Balance Sheets~~ at the lower of their carrying value or fair value, ~~at March 31, 2021~~within the current assets and ~~December 31, 2020, respectively.~~current liabilities sections of the Condensed Consolidated Balance Sheets. The majority of the current year amounts are related to the divestiture of Veritiv Canada, Inc., which is described in Note 13, Div estitures.

At March 31, 2022, the ~~time~~Company held a goodwill balance of $96.3 million for its Packaging reportable segment. Additionally, at March 31, 2022, the Company held an other intangibles, net asset balance of $38.9 million for its Packaging and Facility Solutions reportable segments, related to its customer relationships. As a result of the ~~Merger,~~announced sale of Veritiv Canada, Inc., which the Company ~~recorded~~concluded represented a ~~$59.4~~triggering event, the Company reviewed its goodwill and other intangible assets for possible impairment indicators. Utilizing Level 3 data (internal data such as the Company's operating and cash flow projections), the Company allocated $3.3 million ~~contingent liability associated with~~of the ~~TRA at~~goodwill amount and $2.6 million of the other intangibles, net asset amount to the Canadian business being divested. The fair value ~~using a discounted cash flow model. The contingent liability was remeasured at fair value at each reporting period-end with~~analyses used in the ~~change in fair value recognized in~~impairment assessments for the retained goodwill and other ~~(income) expense,~~intangibles, net onasset also relied upon Level 3 data. Management determined that the ~~Condensed Consolidated Statements~~carrying values of ~~Operations. In December 2020,~~ the ~~Company~~goodwill and other intangibles, net asset for both the Veritiv Canada, Inc. business and the ~~UWWH Stockholder agreed to settle the TRA. See~~remaining Veritiv business were not impaired as of March 31, 2022. The divestiture of Veritiv Canada, Inc. is more fully described in Note ~~7, Related Party Transactions~~13, Divestitures~~, for additional information regarding the TRA.~~.

~~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 number of shares of common stock outstanding during the 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.

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) 2021 2020
Numerator:
Net income (loss) $ 21.3 $ (0.4)
Denominator:
Weighted-average shares outstanding – basic 15.88 16.16
Dilutive effect of stock-based awards 0.78 0
Weighted-average shares outstanding – diluted 16.66 16.16
Earnings (loss) per share:
Basic earnings (loss) per share $ 1.34 $ (0.02)
Diluted earnings (loss) per share $ 1.28 $ (0.02)
Antidilutive stock-based awards excluded from computation of diluted earnings per share ("EPS") 0.11 1.28
Performance stock-based awards excluded from computation of diluted EPS because performance conditions had not been met 0.07 0.32


	Three Months Ended March 31,
(in millions, except per share data)	2022		2021
Numerator:


Net income (loss)	$	78.5	$	21.3

Denominator:
Weighted-average shares outstanding – basic	14.77		15.88
Dilutive effect of stock-based awards	0.55		0.78
Weighted-average shares outstanding – diluted	15.32		16.66

Earnings (loss) per share:




Basic	$	5.31	$	1.34
Diluted	$	5.12	$	1.28

Antidilutive stock-based awards excluded from computation of diluted earnings per share ("EPS")	0.14		0.11
Performance stock-based awards excluded from computation of diluted EPS because performance conditions had not been met	0.00		0.07

Table of Contents

10. SHAREHOLDERS' EQUITY

Share Repurchase Programs

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 $10.4 million under its 2022 Share Repurchase Program.

On March 3, 2021, Veritiv announced that its Board of Directors authorized a $50 million share repurchase program (the "2021 Share Repurchase Program"), which was increased to $100 million in May 2021. Executing within the 2021 Share Repurchase Program, on March 9, 2021, Veritiv entered into a Share Repurchase Agreement with UWW Holdings, LLC (the "UWWH Stockholder"), pursuant to which the Company agreed to repurchase (the "Share Repurchase") an aggregate of 553,536 shares of its common stock owned by the UWWH Stockholder for an aggregate purchase price of $23.2 million. The Share Repurchase closed on March 12, 2021 and the Company funded the Share Repurchase with cash on hand. Concurrently with the closing of the Share Repurchase, the UWWH Stockholder sold the remainder of its shares of Veritiv common stock to an unrelated third party. As of March 31, 2021, the Company had repurchased a total of 586,003 shares of its common stock at a cost of $24.6 million under its 2021 Share Repurchase Program. As of December 31, 2021, the Company had completed its repurchases under the 2021 Share Repurchase Program bringing the total purchases to $100 million, the authorized repurchase limit.

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 ~~Performance Condition Share Units~~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, ~~2021~~2022 and ~~2020.~~2021. 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, ~~2020.~~2021.

See the table below for information related to these ~~transactions.~~transactions:



(in millions)	2022	2021
Three months ended March 31,
Shares issued	0.7	0.3
Shares recovered for minimum tax withholding	(0.2)	(0.1)
Net shares issued	0.5	0.2

(in millions) 2021 2020
Three months ended March 31,
Shares issued 0.3 0.2
Shares recovered for minimum tax withholding (0.1) (0.1)
Net shares issued 0.2 0.1

~~11. ACCUMULATED OTHER COMPREHENSIVE LOSS~~Accumulated Other Comprehensive Loss ("AOCL")

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

Table of Contents

The following ~~table provides~~tables provide the components of AOCL ~~at March 31, 2021~~ (amounts are shown net of their related income tax ~~effect,~~effects, if any):


(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 cap		AOCL
Balance at December 31, 2020	$	(24.2)	$	(9.1)	$	(0.2)	$	(33.5)

Unrealized net gains (losses) arising during the period	(0.3)		0.0		0.0		(0.3)

Net current period other comprehensive income (loss)	(0.3)		0.0		0.0		(0.3)
Balance at March 31, 2021	$	(24.5)	$	(9.1)	$	(0.2)	$	(33.8)

~~The following table provides the components of AOCL at March 31, 2020 (amounts are shown net of their related income tax effect, if any):~~

(in millions) Foreign currency translation adjustments Retirement liabilities Interest rate cap AOCL
Balance at December 31, 2019 $ (26.6) $ (6.2) $ (0.3) $ (33.1)
Unrealized net gains (losses) arising during the period (14.0) 0.0 0.0 (14.0)
Net current period other comprehensive income (loss) (14.0) 0.0 0.0 (14.0)
Balance at March 31, 2020 $ (40.6) $ (6.2) $ (0.3) $ (47.1)

~~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.

~~Table of Contents~~

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.

~~Western Pennsylvania Teamsters and Employers Pension Fund~~

During the second quarter of 2019, in the course of negotiations for a collective bargaining agreement, Veritiv negotiated a partial withdrawal from the Western Pennsylvania Teamsters and Employers Pension Fund (the "Western Pennsylvania Fund"), a MEPP related to its Warrendale, Pennsylvania location, and recognized an estimated partial withdrawal liability of $6.5 million, which was unchanged as of March 31, 2021.

During the first quarter of 2020, Veritiv negotiated the complete withdrawal from the Western Pennsylvania Fund 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, 2021. The withdrawal charge was recorded in distribution expenses as it was not related to a restructuring activity.MEPPs

The Company records an estimated undiscounted charge when it becomes probable that it has incurred a withdrawal liability. 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.

Western Pennsylvania Teamsters and 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, 2022.

During the second quarter of 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, 2022.

As of March 31, ~~2021,~~2022, the Company has not yet received the determination letters for the full and partial ~~and subsequent full withdrawal~~withdrawals from the Western Pennsylvania Fund. The Company expects that payments will occur over an approximate 20-year period, which could run consecutively.

~~13.~~Table of Contents

Minneapolis Food Distributors Ind Pension Plan

During the fourth quarter of 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. The withdrawal charge was recorded in distribution expenses as it was not related to a restructuring activity. As of March 31, 2022, the Company has not yet received the determination letter for the complete withdrawal from the Minneapolis Food Distributors Ind Pension Plan. The Company expects that payments will occur over an approximate three-year period.

12. SEGMENT AND OTHER INFORMATION

Veritiv's business is organized under 43 reportable segments: Packaging, Facility Solutions ~~Print, and Publishing~~ and Print ~~Management ("Publishing").~~Solutions. See N ote 1, Business and Summary of Significant Accounting Policies, for information regarding the formation of the Company's Print Solutions reportable segment. See Note 2, Revenue Recognition and Credit Losses, for descriptions of the Company's reportable segments and Corporate & Other.

The following ~~tables present~~table presents net sales, Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring charges, net, integration and acquisition 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, net, fair value adjustments related to contingent 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:

(in millions) Packaging Facility Solutions Print Publishing Total Reportable Segments Corporate & Other Total
Three Months Ended March 31, 2021
Net sales $ 854.6 $ 206.1 $ 323.2 $ 148.1 $ 1,532.0 $ 27.3 $ 1,559.3
Adjusted EBITDA 78.0 11.5 12.3 5.1 106.9 (47.4) 0
Depreciation and amortization 6.1 2.0 1.6 0.0 9.7 4.8 14.5
Restructuring charges, net 2.7 0.5 1.6 0.0 4.8 (0.5) 4.3
Three Months Ended March 31, 2020
Net sales $ 802.6 $ 259.7 $ 452.2 $ 166.7 $ 1,681.2 $ 26.1 $ 1,707.3
Adjusted EBITDA 59.6 9.0 11.2 3.6 83.4 (47.2) 0
Depreciation and amortization 5.3 1.9 2.1 0.0 9.3 4.5 13.8


(in millions)	Packaging		Facility Solutions		Print Solutions		Total Reportable Segments		Corporate & Other		Total
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)		0
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

Three Months Ended March 31, 2021
Net sales	$	854.6	$	206.1	$	471.3	$	1,532.0	$	27.3	$	1,559.3
Adjusted EBITDA	78.0		11.5		17.4		106.9		(47.4)		0
Depreciation and amortization	6.1		2.0		1.6		9.7		4.8		14.5
Restructuring charges, net	2.7		0.5		1.6		4.8		(0.5)		4.3

1718

Table of Contents

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


	Three Months Ended March 31,
(in millions)	2022		2021
Net income (loss)	$	78.5	$	21.3
Interest expense, net	3.5		5.1
Income tax expense (benefit)	5.8		9.1
Depreciation and amortization	12.7		14.5
Restructuring charges, net	2.7		4.3
Facility closure charges, including (gain) loss from asset disposition	(0.6)		0.3
Stock-based compensation	2.8		1.2
LIFO reserve (decrease) increase	11.0		5.1

Non-restructuring severance charges	1.7		0.8






Other	1.4		(2.2)
Adjustment for Corporate & Other	45.9		47.4
Adjusted EBITDA for reportable segments	$	165.4	$	106.9

Three Months Ended
March 31,
(in millions) 2021 2020
Net income (loss) $ 21.3 $ (0.4)
Interest expense, net 5.1 7.0
Income tax expense (benefit) 9.1 0.4
Depreciation and amortization 14.5 13.8
Restructuring charges, net 4.3 0
Facility closure charges, including (gain) loss from asset disposition 0.3 1.4
Stock-based compensation 1.2 9.4
LIFO reserve (decrease) increase 5.1 (5.9)
Non-restructuring severance charges 0.8 1.7
Non-restructuring pension charges, net 0 7.1
Fair value adjustment on TRA contingent liability 0 (0.7)
Fair value adjustment on contingent consideration liability 0 1.0
Other (2.2) 1.4
Adjustment for Corporate & Other 47.4 47.2
Adjusted EBITDA for reportable segments $ 106.9 $ 83.4
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 $1.8 million has been recognized in selling and administrative expenses on the Company's statements of operations, of which $2.1 million was recognized in 2022. During the three months ended March 31, 2022, the Company received $2.1 million in reimbursement 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.

13. DIVESTITURES

Veritiv Canada, Inc.

In March 2022, the Company signed a definitive agreement to sell its Veritiv Canada, Inc. business to Imperial Dade Canada Inc. for a purchase price of CAD $240 million (approximately U.S. $190 million) in cash payable at closing, subject to certain customary adjustments. The sale includes substantially all of the Company's facility solutions and print operations in Canada, and a majority of the Company's Canada-based packaging business, which primarily serves food service customers. The Company maintains the ability to supply packaging solutions to the Canadian locations of certain U.S.-based customers. The sale does not represent a strategic shift that will have a major effect on the Company's operations or financial results and it did not meet the requirements to be classified as a discontinued operation. Management determined that the carrying values of the goodwill and other intangible assets allocated to the Veritiv Canada, Inc. business were not impaired as of March 31, 2022. The sale closed in the second quarter of 2022. Upon closing of the sale, Veritiv’s approximately 900 employees in Canada became employees of Imperial Dade Canada Inc. Veritiv expects to use net proceeds from the transaction to support the 2022 Share Repurchase Program as well as future capital priorities and growth initiatives. See Note 14, Subsequent Event, for additional information regarding the sale of Veritiv Canada, Inc.

In accordance with Accounting Standards Codification Topic 740, Income Taxes, ("ASC 740"), a deferred tax asset should be recognized for the excess of the tax basis over the financial reporting carrying value of an investment in a subsidiary (“outside basis difference”) when it is apparent that the temporary difference will reverse in the foreseeable future. In connection with presenting the assets and liabilities of Veritiv Canada, Inc. as held-for-sale as of March 31, 2022, the Company was required to re-evaluate its position related to the recognition of a deferred tax asset or liability for the outside basis difference of the Veritiv Canada, Inc. corporate subsidiary being sold. In prior years, and as required under ASC 740, deferred taxes for such outside basis difference had not been recognized because the outside basis difference was deemed permanent in nature. Due to the sale status of the Veritiv Canada, Inc. business, which was pending as of March 31, 2022, the outside basis difference was no longer deemed

Table of Contents

to be permanent in nature and is expected to reverse in the foreseeable future. As a result, a net deferred tax asset of $1.1 million and a corresponding income tax benefit for the difference in the Company’s stock basis versus its book carrying value of the Veritiv Canada, Inc. corporate subsidiary was recorded in the first quarter of 2022.

The table below presents the estimated asset and liability balances for Veritiv Canada, Inc., which are reported as held-for-sale on the Condensed Consolidated Balance Sheet as of March 31, 2022:


(in millions)	Balance at March 31, 2022
Cash and cash equivalents	$	9.9
Accounts receivable, net of allowances	94.8
Inventories	87.3
Other current assets	15.0
Property and equipment, net of accumulated depreciation and amortization	38.0
Goodwill	3.3
Other intangibles, net	2.6

Other non-current assets (1)	48.4
Total assets	$	299.3

Accounts payable	$	72.4
Accrued payroll and benefits	4.6
Other accrued liabilities	20.1
Current portion of debt	4.2
Long-term debt, net of current portion	31.5
Defined benefit pension obligations	3.9
Other non-current liabilities (1)	36.2



Total liabilities	$	172.9

(1) Includes $42.1 million for operating lease ROU assets and $36.1 million for the corresponding operating lease obligations, respectively.

Rollsource business

On March 31, 2021, the Company sold its legacy Print segment's Rollsource business, which ~~provides~~provided specialized converting of commercial printing paper for distribution to the business-forms, direct-mail and digital-printing industries. The Company received ~~net~~ cash proceeds of approximately $7.5 million, which ~~was immediately~~were used to pay outstanding revolving loan borrowings under the ABL Facility. The ~~net~~cash proceeds are reported as proceeds from asset sales and sale of a business in the investing activities section of the Condensed Consolidated Statements of Cash Flows. The Company recognized aan initial pre-tax gain of $2.4 million on the sale which is included in selling and administrative expenses on the Condensed Consolidated Statements of Operations. ~~The divestiture is not considered a strategic shift that will have a major effect on the Company's operations or financial results; therefore it is not reported as discontinued operations.~~

14. SUBSEQUENT EVENT

On May 2, 2022, the Company completed the sale of its Veritiv Canada, Inc. business to Imperial Dade Canada Inc. The Company received net cash proceeds of approximately $147.4 million, subject to normal working capital adjustments during the 90-day period following the sale close date. In connection with the closing, the Company entered into an agreement with the buyer for the provision of certain storage, order processing and/or fulfillment services for the small subset of Veritiv retained packaging customers.

Table of Contents

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

Certain statements contained in this report regarding the Company's future operating results, performance, strategy, business plans, prospects ~~guidance, the 2020 Restructuring Plan~~ and ~~any other restructuring,~~guidance, statements related to the 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," "should," "will," "would," "planned," "estimated," "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 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 actual operating results, performance, business plans, prospects or 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 ~~the heading~~ "Risk Factors" and elsewhere in our Annual Report on Form 10-K and ~~elsewhere~~ in the 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 control, include: adverse impacts of the COVID-19 pandemic; the industry-wide decline in demand for paper and related products; increased competition from existing and non-traditional sources; procurement and other risks in obtaining packaging, facility products and 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 and third-party freight and the availability of third-party freight providers; the loss of any of our significant customers; ~~uncertainties as~~inability to ~~the structure, timing,~~realize expected benefits ~~and costs~~ of ~~the 2020 Restructuring Plan or any future~~ restructuring ~~plan that the Company may undertake;~~plans; adverse developments in general business and economic conditions that could impair our ability to use net operating loss carryforwards and other 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 highly qualified employees; our pension and health care costs and participation in multi-employer pension, health and welfare plans; the effects of work stoppages, union negotiations and labor disputes; our ability to generate sufficient cash to service our debt; increasing interest rates; our ability to refinance or restructure our debt on reasonable terms and conditions as might be necessary from time to time; 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; changes in tax laws; adverse results from litigation, governmental investigations or audits, or tax-related proceedings or audits; regulatory changes and judicial rulings impacting our business; the impact of adverse developments in general business and economic conditions as well as conditions in the global capital and credit markets on demand for our products and services, our business including our international operations, and our customers; foreign currency fluctuations; inclement weather, widespread outbreak of an illness, anti-terrorism measures and other disruptions to our supply chain, distribution system and operations; our dependence on a variety of information technology and telecommunications systems and the 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 financial condition and results of operations for the three months ended March 31, ~~2021~~2022 should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and Notes thereto, included elsewhere in this report.

~~Table of Contents~~

Executive Overview

The COVID-19 Pandemic

The global outbreak of the novel coronavirus ("COVID-19"), which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the United States ("U.S.") and global economies and created significant uncertainty regarding potential impacts to Veritiv Corporation's ("Veritiv" or the "Company") operations, supply chain and customer demand. The COVID-19 pandemic has had widespread, rapidly evolving and unpredictable impacts on global societies, economies, financial markets and business ~~practices.Federal~~practices, and ~~state governments have implemented measures in an effort~~created uncertainty regarding potential impacts to ~~contain~~Veritiv Corporation

Table of Contents

("Veritiv" or the virus, including physical distancing recommendations, travel restrictions, border closures, limitations on public gatherings, work-from-home recommendations, supply chain logistical changes and closure of non-essential businesses. Veritiv’s logistics and distribution operations have fallen within guidance provided by various government authorities on essential businesses, services and workplaces and therefore"Company"). Although the Company has not experienced any closures of its distribution ~~centers.~~centers, Veritiv serves customers across a broad range of industry sectors and geographies, with varying COVID-19 impacts. Primarily beginning in April 2020, ~~unfavorable impacts from~~ the COVID-19 pandemic ~~have had~~began having a negative impact on the Company's financial results, including decreased sales activity. Sales activity during the first quarter of 2021 continued to be below the same period in 2020 for the Company's reportable segments with the exception of the Packaging segment, which is now above pre-COVID-19 levels.

Veritiv's first priority remains the health and safety of its employees, customers and their families. The Company has taken steps to limit exposure and enhance the safety of its facilities for employees working to continue to supply vital products to its customers. In response to the pandemic, Veritiv initiated its Corporate Incident Response Team and initiated enhanced health and safety measures across its facilities. The Company modified practices at its distribution centers and offices to adhere to guidance from the United States ("U.S.") Centers for Disease Control and Prevention and local health and governmental authorities with respect to social distancing, enhanced cleaning protocols and usage of personal protective equipment, where appropriate. ~~In addition, the Company implemented global travel restrictions and work-from-home policies for employees who have the ability to work remotely.~~

InBeginning in April 2020, Veritiv took several actions to help mitigate the effects of the ~~revenue decline~~decreased sales activity and improve liquidity. These actions included (i) temporarily reducing salaries for senior leaders ranging from 10% to 50% through June 2020, (ii) temporarily reducing annual cash retainers for independent directors by 50% through June 2020, (iii) placing approximately 15% of its salaried workforce on temporary furloughs through mid-July 2020, (iv) adjusting its supply chain operations staff depending on volume at specific locations, (v) suspending its share repurchase program and (vi) reducing discretionary spending including planned capital expenditures. In July 2020, Veritiv took additional actions in response to the ongoing impacts of the COVID-19 pandemic to enhance liquidity, including implementing cost-savings and cash preservation initiatives as described under the heading "2020 Restructuring Plan" below. ~~In addition, beginning with the second quarter of 2020, the~~The Company ~~invested $75.0 million of its cash~~saw economic improvements during 2021 in ~~highly-liquid investments instead of paying down its long-term debt.~~

Veritiv's management expects that cash provided by operating activities and available capacity under the Asset-Based Lending Facility (the "ABL Facility") will provide sufficient funds to operate the business and meet other liquidity needs. As of March 31, 2021, Veritiv had cash and cash equivalents of $109.0 million and also had $343.8 million in available additional borrowing capacity under the ABL Facility. In April 2020, Veritiv refinanced and extended the maturity datemany of the ~~ABL Facility to April 2025.~~

markets where it operates as global vaccine distribution efforts continued. 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, cannot be reasonably estimated at this time. The extent to which the COVID-19 pandemic ~~impacts~~continues to impact the Company's business, results of operations, access to sources of liquidity and financial condition will depend on future developments. These developments, which are ~~highly~~ uncertain and ~~cannot be predicted,~~difficult to predict, include, but are not limited to, the duration, spread and severity of the COVID-19 pandemic including new variants, the effects of the COVID-19 pandemic on the Company's employees, customers, suppliers and vendors, ~~and the remedial actions and stimulus~~ measures adopted or recommended by local and federal governments or health authorities in response to the pandemic, the availability, adoption and effectiveness of avaccines and vaccine boosters and to what extent normal economic and operating conditions can resume and be sustained. 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 or long-term changes in customer behavior.

Other Developments

Divestiture of Veritiv Canada, Inc.

On May 2, 2022, the Company completed the sale of its Veritiv Canada, Inc. business to Imperial Dade Canada Inc. The sale includes substantially all of the Company's facility solutions and print operations in Canada, and a majority of the Company's Canada-based packaging business, which primarily serves food service customers. The Company maintains the ability to supply packaging solutions to the Canadian locations of certain U.S.-based customers. The sale does not represent a strategic shift that ~~has occurred~~will have a major effect on the Company's operations or ~~may occur~~financial results and it did not meet the requirements to be classified as a discontinued operation. Upon closing of the sale, Veritiv’s approximately 900 employees in Canada became employees of Imperial Dade Canada Inc. This sale 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. Veritiv expects to use net proceeds from the transaction to support its recently announced $200 million share repurchase program as well as future capital priorities and growth initiatives. See Note 13 and Note 14 of the Notes to Condensed Consolidated Financial Statements for information regarding the sale of Veritiv Canada, Inc.

The financial results of Veritiv Canada, Inc. are included in the ~~future.~~Company's Condensed Consolidated Financial Statements for the three months ended March 31, 2022 and 2021, included in this report, as the sale of that business was completed in the second quarter of 2022. For the three months ended March 31, 2022 and 2021, net sales for this business totaled $191.8 million and $160.7 million, respectively. For that same time period, its Adjusted EBITDA totaled $10.9 million and $6.1 million, respectively. Less than 20% of Veritiv Canada, Inc.'s 2021 net sales were from the Packaging segment, after adjusting for products that are not a part of Veritiv's traditional packaging product offering in the U.S.

Change in Reportable Segments

2022

Table of Contents

Solutions. Prior period results have been revised to align with the new presentation. See

~~Other Events~~Note 2 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the Company's product offerings and reportable segments.

~~2021~~2022 Share Repurchase Program

On March ~~3, 2021,~~1, 2022, Veritiv announced that its Board of Directors authorized a ~~$50.0~~$200 million share repurchase program (the ~~"2021~~"2022 Share Repurchase Program")~~. Under this~~, which replaced the Company's previous $100 million share repurchase program that was fully utilized as of December 31, 2021. The 2022 Share Repurchase Program authorizes the Company, ~~may~~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 ~~for the share repurchase program replaces the $25.0 million share repurchase authorization previously approved by the Board of Directors in March 2020 (the "2020 Share Repurchase Program") and~~ 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 $10.4 million under its 2022 Share Repurchase Program.

2020 Restructuring Plan

During ~~the second quarter of~~ 2020, the Company initiated a restructuring plan (the "2020 Restructuring Plan") in response to the impact of the COVID-19 pandemic on its business operations, ~~and the~~ ongoing secular changes in its ~~Print~~print and ~~Publishing segments. During the fourth quarter of 2020, the Company expanded the initial plan~~publishing operations and to further align its cost structure with ongoing business needs as the Company executes on its stated corporate strategy. The ~~initial and expansion activities are collectively referred to as the "2020 Restructuring Plan."~~

~~The~~ 2020 Restructuring Plan ~~includes~~included (i) a reduction of the Company's U.S. salaried workforce by approximately 15% across all business segments and corporate functions, (ii) the closure of certain warehouse facilities and retail stores, (iii) adjustments to various compensation plans, (iv) repositioning of inventory to expand the Company's service radius and (v) other actions.

The Company currently estimates it will incur total restructuring charges of between $70 million and $87 million in connection with the 2020 Restructuring Plan. These costs will include the following activities (i) employee termination and other one-time compensation costs, (ii) real estate exit costs, (iii) certain inventory related costs and (iv) other exit costs. Initial charges were incurred and recorded in June 2020. The Company expects to substantially complete the 2020 Restructuring Plan bywas substantially complete as of December 31, 2021, with remaining charges of approximately $4 million expected to be incurred through the end of ~~2021.~~2022. See Note 4 of the Notes to Condensed Consolidated Financial Statements for information related to the Company's restructuring efforts.

~~Supply Chain Restructuring~~Company Strategy

~~On March 13, 2020,~~ Veritiv ~~announced that~~continues to execute against its ~~Board~~long-term strategy to be the leading provider of ~~Directors authorized~~business-to-business packaging products and services, as well as paper and facility solutions products and services. The Company ~~management~~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 ~~to restructure the Company’s integrated supply chain in an effort to facilitate better alignment with the supply chain needs~~for non-core components of ~~the Company’s customers by segment, with a view towards reducing complexity and lowering overall supply chain costs. Each of the Company’s reportable segments has different market dynamics and~~our business and service needs. Moreover, to address the ongoing and rapid secular decline of the paper industry, management continues to explore opportunities to adapt the cost structure necessary to support the Print segment. The Company is not currently anticipating a separate restructuring of the supply chain operations in 2021 as the changes made in conjunction with the 2020 Restructuring Plan have positioned the Company to meet its near-term needs. There can be no assurance as to what form any future restructuring may take or whether this on-going evaluation will result in any restructuring. Additionally, any restructuring may result in a significant charge to earnings in any given financial reporting period or periods.including potential divestitures.

Business Overview

Veritiv is a leading North American business-to-business 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. ~~The Company~~Veritiv operates ~~from approximately 125 distribution centers~~ primarily throughout the U.S., Canada and Mexico.

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 business.

~~Table of Contents~~

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 the Veritiv logistics solutions business which provides transportation and warehousing solutions. 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 custom and standard packaging solutions for customers based in North America and in key global markets. ~~Veritiv~~This segment services its customers with a full spectrum of packaging product materials within ~~the fiber-based,~~ flexible, corrugated and fiber, ancillary packaging, rigid and equipment categories. The business is strategically focused on higher growth industry sectors including manufacturing, food ~~processing~~ and ~~service, fulfillment~~beverage, wholesale and ~~internet~~ retail, healthcare and transportation, as well as ~~niche~~specialty sectors based on industry and product expertise. Veritiv's packaging professionals create customer value

Table of Contents

through supply chain solutions, structural and graphic packaging design and engineering, automation, workflow and equipment services and 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, ~~commercial cleaning chemicals,~~food service, personal protective equipment, cleaning chemicals and ~~safety supplies, wipers, can liners, soaps and sanitizers, dispensers, sanitary maintenance supplies and equipment, hazard supplies, and shampoos and amenities~~skincare, primarily in North America. 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.

•Print Solutions – 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, specialty~~ products and ~~graphics consumables~~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 ~~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 primarily in the U.S. 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 operating results are subject to seasonal influences. Historically, its higher consolidated net sales have occurred during the third and fourth quarters while its lowest consolidated net sales have occurred during the first quarter. The Packaging segment net sales have traditionally increased each quarter throughout the year and net sales for the first quarter 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 have traditionally peaked in the third quarter due to increased summer demand in the away-from-home resort, cruise and hospitality markets and from back-to-school 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. The COVID-19 pandemic ~~disrupted~~has had minor disruptions to the Company's seasonal patterns in net sales across all segments and on a consolidated basis ~~in 2020~~ due to the ~~significant~~ impacts of the pandemic on many of Veritiv's customers. The duration and extent of the COVID-19 pandemic is ~~highly~~ uncertain and the magnitude of continuing seasonality disruption is difficult to predict.

2224

Table of Contents

Results of Operations, Including Business Segments

The following discussion compares the consolidated operating results of Veritiv for the three months ended March 31, ~~2021~~2022 and ~~2020:~~

Three Months Ended
March 31, Increase (Decrease)
(in millions) 2021 2020 $ %
Net sales $ 1,559.3 $ 1,707.3 $ (148.0) (8.7)%
Cost of products sold (exclusive of depreciation and amortization shown separately below) 1,238.1 1,359.6 (121.5) (8.9)%
Distribution expenses 101.5 123.4 (21.9) (17.7)%
Selling and administrative expenses 166.4 203.6 (37.2) (18.3)%
Depreciation and amortization 14.5 13.8 0.7 5.1%
Restructuring charges, net 4.3 — 4.3 *
Operating income (loss) 34.5 6.9 27.6 400.0%
Interest expense, net 5.1 7.0 (1.9) (27.1)%
Other (income) expense, net (1.0) (0.1) (0.9) (900.0)%
Income (loss) before income taxes 30.4 0.0 30.4 *
Income tax expense (benefit) 9.1 0.4 8.7 *
Net income (loss) $ 21.3 $ (0.4) $ 21.7 *

*- not meaningful2021:


	Three Months Ended March 31,				Increase (Decrease)
(in millions)	2022		2021		$		%
Net sales	$	1,858.1	$	1,559.3	$	298.8	19.2%
Cost of products sold (exclusive of depreciation and amortization shown separately below)	1,455.4		1,238.1		217.3		17.6%
Distribution expenses	112.2		101.5		10.7		10.5%
Selling and administrative expenses	187.9		166.4		21.5		12.9%
Depreciation and amortization	12.7		14.5		(1.8)		(12.4)%

Restructuring charges, net	2.7		4.3		(1.6)		(37.2)%
Operating income (loss)	87.2		34.5		52.7		152.8%
Interest expense, net	3.5		5.1		(1.6)		(31.4)%
Other (income) expense, net	(0.6)		(1.0)		0.4		40.0%
Income (loss) before income taxes	84.3		30.4		53.9		177.3%
Income tax expense (benefit)	5.8		9.1		(3.3)		(36.3)%


Net income (loss)	$	78.5	$	21.3	$	57.2	268.5%

Net Sales

For the three months ended March 31, ~~2021,~~2022, net sales ~~decreased~~increased by $298.8 million, or 19.2%. Net sales increased in all reportable segments ~~except Packaging. Primarily beginning in April 2020,~~with the ~~Company experienced decreased~~Packaging segment's net sales ~~due~~responsible for approximately 50% of the total increase. Inflationary market price increases primarily in the Company's Packaging and Print Solutions product portfolio continued throughout the first quarter of 2022 and contributed to the ~~negative impacts from the COVID-19 pandemic. The decline in~~increased net sales ~~for the three months ended March 31, 2021 was primarily due to continued impacts of the COVID-19 pandemic~~while net sales across the non-Packaging segments ~~and the continuing secular decline~~ in the ~~paper industry. The Print segment experienced~~first quarter of 2021 were negatively impacted by the ~~largest~~COVID-19 pandemic. To the extent feasible, the Company has adjusted its prices to reflect the impact ~~as net sales decreased $129.0 million.~~of inflation on the cost of purchased materials and services. Also, despite constraints in the broader supply chain, the Company was able to mitigate some of the impact to its customers through leveraging its portfolio of suppliers and its North American supply chain network. Management expects higher market prices and marketplace supply chain challenges to continue throughout 2022. See the "Segment Results" section for additional discussion. Management expects net sales during the first half of 2021 to be unfavorably impacted in each of the Company's reportable segments due to the continuing negative effects of the COVID-19 pandemic, with the exception of the Packaging segment. The duration and extent of the COVID-19 pandemic is highly uncertain and the magnitude of net sales declines is difficult to predict.

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

For the three months ended March 31, ~~2021,~~2022, cost of products sold ~~decreased~~increased primarily due to ~~lower~~higher net sales. Cost of products sold ~~decreased~~increased at a ~~faster~~slower rate than net sales due to improvements in ~~pricing.~~pricing, as well as changes in segment mix.

Distribution Expenses

For the three months ended March 31, ~~2021,~~2022, distribution expenses ~~decreased~~increased by ~~$21.9~~$10.7 million, or ~~17.7%~~10.5%. The ~~decrease~~increase was primarily due to (i) an $8.4 million increase in freight and logistics expense and (ii) a ~~$7.8~~$1.0 million ~~decrease~~increase in wages and temporary employee expenses, (ii) a $7.1 million multi-employer pension plan withdrawal charge in the first quarter of 2020 that did not repeat in 2021, (iii) a $4.7 million decrease in facility and equipment rent expense and (iv) a $1.0 million decrease in freight and logistics expense.expenses. The decrease in wages and temporary employee expenses was primarily driven by actions taken by the Company in response to the COVID-19 pandemic, including lowering headcount across the Company's distribution network. The decrease in facility and equipment rent expense was primarily driven by consolidation of the Company's facilities. The decreaseincrease in freight and logistics expense was primarily driven by ~~a decrease~~an increase in third-party freight and fuel expenses ~~mostly~~ related to ~~lower net~~higher sales ~~volumes. The Company expects wages~~volume and ~~related costs to decline in the first half of the year versus the comparable prior year period as a result of the reduction in the Company's U.S. salaried workforce.~~higher diesel fuel and carrier prices.

Selling and Administrative Expenses

For the three months ended March 31, 2022, selling and administrative expenses increased by $21.5 million, or 12.9%. The increase was primarily due to (i) a $17.1 million increase in personnel expenses and (ii) a $6.8 million increase in professional fees expense, partially offset by a $1.5 million decrease in bad debt expense. The increase in personnel expenses was

Table of Contents

~~Selling and Administrative Expenses~~

For the three months ended March 31, 2021, selling and administrative expenses decreased by $37.2 million, or 18.3%. The decrease was primarily due to (i) a $28.6 million decrease in personnel expenses, (ii) a $3.5 million decrease in bad debt expense, (iii) a $2.6 million decrease in professional fees ex~~pense and (iv) a $2.4 million gain on the sale of a business.~~ ~~The decrease in personnel expenses was~~ primarily driven by (i) ~~lower wages primarily as a result of actions taken by the Company in response to the COVID-19 pandemic, (ii) a decrease~~an increase in commission expenses ~~driven by lower~~due to higher net sales, ~~and (iii) a decrease~~(ii) an increase in travel and entertainment expenses ~~in response to the COVID-19 pandemic, partially offset by~~and (iii) higher incentive compensation expenses. The Company expects wages and related costs to decline in the first half of the year versus the comparable prior year period as a result of the reduction in the Company's U.S. salaried workforce.expense.

Depreciation and Amortization

For the three months ended March 31, ~~2021,~~2022, depreciation and amortization ~~increased~~was slightly lower than the same period in 2021. The decrease was primarily driven by ~~$0.7 million, or 5.1%. The increases were primarily due to increases in~~lower depreciation ~~related to capitalized~~on information technology ~~and facilities expense.~~related assets.

Restructuring Charges, Net

For the three months ended March 31, ~~2021,~~2022, restructuring charges, net, ~~increased~~decreased by ~~$4.3 million. The increase was due to net charges from the 2020 Restructuring Plan occurring in 2021, which did not occur in the corresponding prior year period.~~$1.6 million, or 37.2%. See Note 4 of the Notes to Condensed Consolidated Financial Statements for additional information related to the Company's restructuring efforts.

Interest Expense, Net

For the three months ended March 31, ~~2021,~~2022, interest expense, net, decreased by ~~$1.9~~$1.6 million, or ~~27.1%~~31.4%. The decrease was primarily due to (i) lower average interest rates and (ii) a lower average balance on the Company's ABL ~~Facility and (ii) lower average interest rates.~~Facility.

Other (Income) Expense, Net

For the three months ended March 31, ~~2021,~~2022, other (income) expense, net, was income of ~~$1.0~~$0.6 million. This was a net ~~improvement~~unfavorable change of ~~$0.9~~$0.4 million as compared to the same period in ~~2020.~~2021. The ~~improvement~~unfavorable change was primarily due to ~~lower~~higher pension ~~expenses and higher foreign currency gains.~~expenses.

Effective Tax Rate

Veritiv's effective tax ~~rate was~~rates were 6.9% and 29.9% for the three months ended March 31, ~~2021. The effective tax rate for the three months ended March 31, 2020 was not meaningful.~~2022 and 2021, respectively. The difference between the Company's effective tax rates and the U.S. statutory tax rate of 21.0% primarily relates to vesting of stock compensation, non-deductible expenses, state income taxes (net of federal income tax benefit), ~~non-deductible expenses,~~ tax ~~expense for stock compensation vesting, Global Intangible Low-Taxed Income ("GILTI"),~~credits and the Company's pre-tax book income (loss) by jurisdiction. ~~In addition,~~Additionally, the effective tax rate for the three months ended March 31, ~~2020, Veritiv recorded an estimated $2.1 million~~2022 includes recognition of a deferred tax ~~rate benefit related to~~asset on the ~~carryback of net operating losses which are now available due to the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act").~~Company's investment in a foreign subsidiary.

The historical volatility of the Company's effective tax rate has been primarily due to both the level of pre-tax book income (loss) as well as variations in the Company's income (loss) by jurisdiction. The Company may experience volatility of the effective tax rate in future periods due to potential fluctuations in the amount and source, including both foreign and domestic, of pre-tax book income (loss) by jurisdiction, potential deferred tax valuation allowance increases in certain jurisdictions, including the U.S., changes in amounts of non-deductible expenses, and other items that could impact the effective tax rate.

Segment Results

Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring charges, net, integration and acquisition 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, net, fair value adjustments related to contingent liabilities assumed in mergers and acquisitions and certain other adjustments) 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.

~~Table of Contents~~

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. generally accepted accounting principles ("U.S. GAAP").

Table of Contents

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

•~~Does~~does not reflect the 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 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 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, ~~to support the Packaging, Facility Solutions and Print segments,~~ 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~~Prior to the fourth quarter of ~~products. In the Packaging and Facility Solutions segments,~~2021, Veritiv iswas unable to compute the impact of changes in sales volume based on changes in sales of each individual ~~product.~~product for the Packaging and Facility Solutions segments. Rather, the Company ~~assumes~~assumed that the margin ~~stays~~stayed constant and ~~estimates~~estimated 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~~were identified, the remaining sales variance iswas attributed to price/mix. As a result of the Company’s information technology enhancements, the Company has improved its insight into products within these segments and is able to isolate the change in sales attributed to volume and price separately at the item level for the majority of products and thus it no longer needs to rely on cost of products sold as a proxy for the changes in sales volumes.

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. The Company believes the elimination of the foreign currency translation impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.

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 ~~which may have been accelerated by the COVID-19 pandemic,~~ 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 Solutions segment. In the short term, shortages in the supply chain and ~~Publishing segments.~~product cost inflation have resulted in higher paper and related product prices. The Company believes the shortage of supply is due to mill closures and conversions and international supply chain disruptions, which have been accelerated by the COVID-19 pandemic. Higher prices, if continued over the longer term, could further accelerate demand decline.

2527

Table of Contents

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 March 31, 2021
Net sales $ 854.6 $ 206.1 $ 323.2 $ 148.1 $ 27.3
Adjusted EBITDA 78.0 11.5 12.3 5.1 (47.4)
Adjusted EBITDA as a % of net sales 9.1 % 5.6 % 3.8 % 3.4 % *
Three Months Ended March 31, 2020
Net sales $ 802.6 $ 259.7 $ 452.2 $ 166.7 $ 26.1
Adjusted EBITDA 59.6 9.0 11.2 3.6 (47.2)
Adjusted EBITDA as a % of net sales 7.4 % 3.5 % 2.5 % 2.2 % *


(in millions)	Packaging			Facility Solutions			Print Solutions			Corporate & Other
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		%	*


Three Months Ended March 31, 2021
Net sales	$	854.6		$	206.1		$	471.3		$	27.3
Adjusted EBITDA	78.0			11.5			17.4			(47.4)
Adjusted EBITDA as a % of net sales	9.1		%	5.6		%	3.7		%	*

* - not meaningful

See Note 1312 of the Notes to Condensed Consolidated Financial Statements for additional information related to Adjusted EBITDA, including a reconciliation of net income (loss) as reflected on 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)				Three Months Ended March 31,					Increase (Decrease)
(in millions)	(in millions)	2021			2020			$		%			(in millions)	2022				2021			$		%
Net sales	Net sales	$	854.6		$	802.6		$	52.0	6.5	%		Net sales	$	1,003.1			$	854.6		$	148.5	17.4	%
Adjusted EBITDA	Adjusted EBITDA	78.0			59.6			18.4		30.9	%		Adjusted EBITDA	97.4				78.0			19.4		24.9	%
Adjusted EBITDA as a % of net sales	Adjusted EBITDA as a % of net sales	9.1		%	7.4		%			170 bps			Adjusted EBITDA as a % of net sales	9.7		%		9.1		%			60 bps

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)	~~2021~~2022 vs. ~~2020~~2021
Volume	$	~~43.4~~44.0
Foreign currency	~~5.3~~ (5.5)
Price/Mix	~~3.3~~110.0


Total change	$	~~52.0~~148.5

Comparison of the Three Months Ended March 31, ~~2021~~2022 and March 31, ~~2020~~2021

Net sales increased ~~$52.0~~$148.5 million, or ~~6.5%~~17.4%, as compared to the same period in ~~2020.~~2021. The net sales increase was primarily attributable to higher market prices and increased sales ~~of corrugated products, ancillary packaging~~volume in all product categories and ~~labeling products as well as higher market prices.~~end use sectors, partially offset by unfavorable foreign currency impacts. Sales to healthcare, wholesale and retail and consumer electronics customers improved most significantly compared to the prior year period. Similar to ~~the fourth quarter of 2020,~~prior year, net sales during the first quarter of ~~2021~~2022 were positively impacted by strong e-commerce demand. ~~Sales~~Management expects the strong demand and supply chain constraints to ~~industrial manufacturing customers continued~~continue throughout 2022 and the Company has invested in additional inventory to ~~improve during the current period~~support its customers.

Adjusted EBITDA increased $19.4 million, or 24.9%, as compared to the ~~fourth quarter~~same period in 2021. The increase in Adjusted EBITDA was primarily attributable to (i) higher net sales and (ii) cost of ~~2020, but certain sectors including automotive and aerospace remained below pre-COVID-19 pandemic~~products sold increasing at a slower rate than net sales, ~~volumes.~~

2628

Table of Contents

~~Adjusted EBITDA increased $18.4~~partially offset by (i) a $14.2 million ~~or 30.9%, as compared to the same period in 2020. The~~ increase ~~in Adjusted EBITDA was primarily attributable to (i) increased net sales volume, (ii) a $4.6 million decrease~~ in selling and administrative expenses and ~~(iii) cost of products sold increasing at~~(ii) a ~~slower rate than net sales, partially offset by a $1.7~~$9.0 million increase in distribution expenses. The ~~decrease~~increase in selling and administrative expenses was primarily driven by (i) a ~~$4.9~~$10.9 million increase in personnel expenses and (ii) a $4.7 million increase in professional fees expense, partially offset by a $1.6 million decrease in bad debt expense. The increase in personnel expenses was associated with (i) increased commission expenses driven by higher sales, (ii) higher wages and benefits to support the Company's Packaging growth strategy and (iii) an increase in travel and entertainment expenses. The increase in distribution expenses was primarily driven by ~~increased utilization of the distribution network, which is reflected in~~ (i) a ~~$0.9~~$4.8 million increase in freight and logistics expense, ~~and~~ (ii) a ~~$0.7~~$2.9 million increase in facility rent expense driven by increased utilization of the distribution network and ~~equipment rent expense.~~(iii) a $1.0 million increase in personnel expenses.

Facility Solutions

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


		Three Months Ended March 31,						Increase (Decrease)				Three Months Ended March 31,					Increase (Decrease)
(in millions)	(in millions)	2021			2020			$		%			(in millions)	2022				2021			$		%
Net sales	Net sales	$	206.1		$	259.7		$	(53.6)	(20.6)	%		Net sales	$	229.4			$	206.1		$	23.3	11.3	%
Adjusted EBITDA	Adjusted EBITDA	11.5			9.0			2.5		27.8	%		Adjusted EBITDA	13.4				11.5			1.9		16.5	%
Adjusted EBITDA as a % of net sales	Adjusted EBITDA as a % of net sales	5.6		%	3.5		%			210 bps			Adjusted EBITDA as a % of net sales	5.8		%		5.6		%			20 bps

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)	~~2021~~2022 vs. ~~2020~~2021
Volume	$	~~(61.2)~~39.8
Foreign currency	~~3.6~~ (3.6)
Price/Mix	~~4.0~~ (12.9)


Total change	$	~~(53.6)~~23.3

Comparison of the Three Months Ended March 31, ~~2021~~2022 and March 31, ~~2020~~2021

Net sales ~~decreased $53.6~~increased $23.3 million, or ~~20.6%~~11.3%, as compared to the same period in ~~2020.~~2021. The net sales ~~decrease~~increase was primarily attributable to ~~decreased~~increased sales of towels and tissues, ~~skin products,~~ food service products and can liners primarily driven by ~~the negative impact on~~overall demand ~~from~~improvements as compared to prior year, partially offset by lower market prices and unfavorable foreign currency impacts. As the COVID-19 ~~pandemic. Partially offsetting~~pandemic restrictions were lifted, demand improved during the ~~decline in net sales~~first quarter of 2022 as away-from-home activity resumed across the broader market place including at large entertainment and hospitality venues. This was ~~strong~~partially offset by declining demand for the product categories of personal protective equipment, wipers and ~~hygiene-related products. Negative impacts~~chemicals which experienced strong demand in 2021 due to customer demand have included business and school temporary closures, travel restrictions, constraints on large venues hosting sporting, conventions and entertainment events as well as extended work-from-home measures.COVID-19. Management expects the facility solutions future growth to follow the broader facility solutions away-from-home market throughout 2022.

Adjusted EBITDA increased ~~$2.5~~$1.9 million, or ~~27.8%~~16.5%, as compared to the same period in ~~2020.~~2021. The increase in Adjusted EBITDA was primarily attributable to higher net sales, partially offset by (i) ~~a $6.8 million decrease in selling and administrative expenses, (ii) a $5.1 million decrease in distribution expenses and (iii)~~ cost of products sold ~~decreasing~~increasing at a faster rate than net sales, ~~partially offset by~~(ii) a ~~decline~~$1.4 million increase in ~~net sales.~~distribution expenses and (iii) a $0.9 million increase in professional fees expense. The ~~decrease in selling and administrative expenses was primarily driven by a $6.4 million decrease in personnel expenses. The decrease~~increase in distribution expenses was primarily driven by ~~(i)~~ a ~~$3.6~~$2.2 million ~~decrease in personnel expenses and (ii) a $1.0 million decrease~~increase in freight and logistics expense ~~primarily driven~~partially offset by ~~third-party freight~~a $0.9 million decrease in facility and ~~fuel expenses.~~equipment rent expense.

2729

Table of Contents

Print Solutions

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


		Three Months Ended March 31,						Increase (Decrease)				Three Months Ended March 31,					Increase (Decrease)
(in millions)	(in millions)	2021			2020			$		%			(in millions)	2022				2021			$		%
Net sales	Net sales	$	323.2		$	452.2		$	(129.0)	(28.5)	%		Net sales	$	596.6			$	471.3		$	125.3	26.6	%
Adjusted EBITDA	Adjusted EBITDA	12.3			11.2			1.1		9.8	%		Adjusted EBITDA	54.6				17.4			37.2		213.8	%
Adjusted EBITDA as a % of net sales	Adjusted EBITDA as a % of net sales	3.8		%	2.5		%			130 bps			Adjusted EBITDA as a % of net sales	9.2		%		3.7		%			550 bps

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)	~~2021~~2022 vs. ~~2020~~2021
Volume	$	~~(120.7)~~26.8
Foreign currency	~~2.4~~ (2.4)
Price/Mix	~~(10.7)~~100.9


Total change	$	~~(129.0)~~125.3

Comparison of the Three Months Ended March 31, ~~2021~~2022 and March 31, ~~2020~~2021

Net sales ~~decreased $129.0~~increased $125.3 million, or ~~28.5%~~26.6%, as compared to the same period in ~~2020.~~2021. The net sales ~~decrease~~increase was primarily attributable to ~~(i) the continued secular decline in the paper industry in addition to managing risk in the segment through strategic adjustments~~higher market prices driven by strong demand compared to the ~~Company's customer base and (ii) the~~prior year period when there was a significant negative impact on demand ~~from~~due to COVID-19 as well as increased sales volume, partially offset by unfavorable foreign currency impacts. Market demand for coated and uncoated paper grades was strong in the ~~COVID-19 pandemic.~~first quarter of 2022. Management expects the demand and supply imbalance to continue throughout 2022.

Adjusted EBITDA increased ~~$1.1~~$37.2 million, or ~~9.8%~~213.8%, as compared to the same period in ~~2020.~~2021. The Adjusted EBITDA increase was primarily attributable to (i) ~~an $11.7 million decrease in selling~~cost of products sold increasing at a slower rate than net sales, (ii) higher net sales and ~~administrative expenses and (ii)~~(iii) a ~~$10.7~~$1.5 million decrease in distribution expenses, partially offset by a ~~decline in net sales. The decrease~~$4.0 million increase in selling and ~~administration expenses was primarily driven by (i) a $9.2 million decrease in personnel expenses and (ii) a $1.9 million decrease in bad debt expense.~~administrative expenses. The decrease in distribution expenses was primarily driven by ~~(i)~~ a ~~$4.5 million decrease in personnel expenses, (ii) a $4.2~~$2.8 million decrease in facility ~~and equipment~~ rent expense, ~~primarily driven~~offset by ~~consolidation of the Company's facilities and (iii)~~ a ~~$1.2~~$1.3 million ~~decrease~~increase in freight and logistics ~~expense,~~expense. The increase in selling and administrative expenses was primarily driven by a ~~decrease~~$3.1 million increase in ~~third-party freight and fuel expenses.~~personnel expenses, due to increased commission expense.

~~Publishing~~Corporate & Other

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

Three Months Ended March 31, Increase (Decrease)
(in millions) 2021 2020 $ %
Net sales $ 148.1 $ 166.7 $ (18.6) (11.2) %
Adjusted EBITDA 5.1 3.6 1.5 41.7 %
Adjusted EBITDA as a % of net sales 3.4 % 2.2 % 120 bps

~~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)~~	~~2021 vs. 2020~~
~~Volume~~	$	~~(14.5)~~
~~Foreign currency~~	—
~~Price/Mix~~	~~(4.1)~~


~~Total change~~	$	~~(18.6)~~


	Three Months Ended March 31,				Increase (Decrease)
(in millions)	2022		2021		$		%
Net sales	$	29.0	$	27.3	$	1.7	6.2	%
Adjusted EBITDA	(45.9)		(47.4)		1.5		3.2	%

Comparison of the Three Months Ended March 31, ~~2021~~2022 and March 31, ~~2020~~2021

Net sales ~~decreased $18.6~~increased $1.7 million, or ~~11.2%~~6.2%, as compared to the same period in ~~2020.~~2021. The net sales ~~decrease~~increase was primarily attributable to ~~(i)~~an increase in the ~~continued secular~~price of freight brokerage services, partially offset by a decline in ~~the paper industry and changes in order patterns due to customer consolidation, digital advertising and other factors and (ii) the negative impact on demand from the COVID-19 pandemic.~~volume.

Adjusted EBITDA increased $1.5 million, or ~~41.7%~~3.2%, as compared to the same period in ~~2020.~~2021. The Adjusted EBITDA increase was primarily ~~attributable to~~driven by (i) a ~~$2.7~~$1.3 million decrease in selling and administrative expenses, ~~partially offset by~~(ii) cost of products sold increasing at a ~~decline in~~slower rate than net sales and (iii) higher net sales. The decrease in selling and administrative expenses was primarily driven by ~~(i)~~ a ~~$1.9 million~~ decrease in ~~bad debt expense and (ii) a $0.7 million decrease in personnel expenses.~~

~~Corporate & Other~~

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

Three Months Ended March 31, Increase (Decrease)
(in millions) 2021 2020 $ %
Net sales $ 27.3 $ 26.1 $ 1.2 4.6 %
Adjusted EBITDA (47.4) (47.2) (0.2) (0.4) %

~~Comparison of the Three Months Ended March 31, 2021 and March 31, 2020~~

~~Net sales increased $1.2 million, or 4.6%, as compared to the same period in 2020. The net sales increase was primarily attributable to an increase~~ ~~in freight brokerage services.~~

Adjusted EBITDA decreased $0.2 million, or 0.4%, as compared to the same period in 2020. The Adjusted EBITDA decrease was primarily driven by a $0.8 million increase in selling and administrative expenses. The increase in selling and administrative expenses was primarily driven by a $3.7 million increase in incentive compensation expense driven by the Company outperforming incentive targets,wages, partially offset by ~~(i) a $1.7 million decrease in professional fees expense and (ii) a $1.1 million decrease in travel and entertainment~~higher incentive compensation expense.

Table of Contents

Liquidity and Capital Resources

The cash requirements of the Company are 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 regarding the Company's debt position.

~~Table of Contents~~

The following table sets forth a summary of cash flows:

Three Months Ended March 31,
(in millions) 2021 2020
Net cash provided by (used for):
Operating activities $ 13.2 $ 84.8
Investing activities 1.7 (8.2)
Financing activities (26.1) (39.2)


	Three Months Ended March 31,
(in millions)	2022		2021
Net cash provided by (used for):
Operating activities	$	(5.9)	$	13.2
Investing activities	(7.1)		1.7
Financing activities	7.4		(26.1)

Analysis of Cash Flows

Operating Activities

Net cash ~~provided by~~from operating activities ~~decreased~~was lower by ~~$71.6~~$19.1 million as compared to the prior ~~year,~~year. The decrease was primarily ~~as a result of an increase in inventory levels,~~ due ~~primarily~~ to the payment of $10.1 million of payroll taxes in the first quarter of 2022, which were previously deferred under the CARES Act. The remaining net unfavorable changes in the Company's ~~rebuilding of its stock levels from pandemic~~accounts receivable, accounts payable and inventory, which were driven ~~lows in 2020,~~by revenue growth and other normal business activities, were partially offset by ~~improvements in~~improved operating results.

Investing Activities

Net cash from investing activities ~~increased~~was lower by ~~$9.9~~$8.8 million as compared to the prior year, primarily due to the cash proceeds received from the sale of a business in ~~March~~the first quarter of 2021, ~~for which the Company received net cash proceeds of~~totaling approximately $7.5 million, ~~and slightly lower~~exceeding the proceeds received from asset sales in the current year period. Additionally, the Company's higher capital expenditures in the current year ~~period.~~period were partially offset by the current year receipt of $2.1 million in insurance proceeds, which represented coverage for the structural damage sustained to one of its properties in the prior year.

Financing Activities

Net cash ~~used for~~from financing activities was ~~a lower use of cash~~higher by ~~$13.1~~$33.5 million as compared to the prior ~~year,~~year. The increase was primarily due to ~~lower net repayments under the Company's ABL Facility and~~ a favorable change in book overdrafts, due to the timing of payments, lower net repayments under the Company's ABL Facility and lower common stock repurchases, which were partially offset by higher tax withholdings on share-based compensation. During the month ended March 31, 2022, the Company repurchased 78,025 shares of its common stock ~~repurchases.~~at a cost of $10.4 million under its 2022 Share Repurchase Program. During the first quarter of 2021, the Company repurchased 586,003 shares of its common stock at a cost of $24.6 million under its 2021 Share Repurchase Program. ~~During~~

At March 31, 2022, in conjunction with the ~~first quarter~~announced sale of ~~2020, the Company repurchased 383,972 shares~~Veritiv Canada, Inc., $9.9 million of ~~its common stock at a cost of $3.5 million under its 2020 Share Repurchase Program. See~~ ~~Part II, Item 2~~ ~~of this report for additional information~~cash and cash equivalents was reclassified to assets-held-for-sale on the ~~Company's share repurchase programs.~~Condensed Consolidated Balance Sheet.

Funding and Liquidity Strategy

Table of Contents

2022, 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.

Veritiv's management expects that the Company's primary future cash needs will be for working capital, capital expenditures, contractual commitments, share repurchases 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 ~~operations~~capital and operating needs on acceptable terms and conditions, the 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. To preserve liquidity, particularly during the COVID-19 pandemic, the Company may invest a portion of its cash in highly-liquid investments with original maturities to the Company of three months or less that are readily convertible

~~Table of Contents~~

into known amounts of cash. As of March 31, 2021, the Company held $75.0 million in these cash equivalents. The Company also elected to defer the payment of $19.1 million in payroll taxes incurred through December 31, 2020, as provided by the CARES Act, until December 2021 and 2022.

~~Veritiv's management expects that the Company's primary future cash needs will be for working capital, capital expenditures, contractual commitments, share repurchases and strategic investments.~~ The ~~Company currently estimates it will incur total restructuring~~2020 Restructuring Plan was substantially complete as of December 31, 2021, with remaining charges of ~~between $70~~approximately $4 million ~~and $87 million in connection with~~expected to be incurred through the ~~2020 Restructuring Plan.~~end of 2022. See Note 4 of the Notes to Condensed Consolidated Financial Statements for additional information onregarding the Company's restructuring efforts. ~~Management expects~~The Company currently estimates that ~~cash on hand, cash~~during 2022 it will spend approximately $30 million for capital expenditures covering both maintenance and strategic investments. As provided by ~~operating activities~~the CARES Act, in response to the COVID-19 pandemic the Company deferred $19.1 million of payroll taxes, which it had incurred through December 31, 2020. In January 2022 the Company paid $10.1 million of the deferred payroll taxes and currently expects to pay the ~~available capacity under~~remaining amount in December 2022. See Note 3 of the ~~ABL Facility will provide sufficient funds~~Notes to ~~operate~~Condensed Consolidated Financial Statements for information regarding the ~~business and meet other liquidity needs.~~

~~Off-Balance Sheet Arrangements~~

~~Veritiv does not have any off-balance sheet arrangements as of March 31, 2021, other than~~Company's lease commitments, including leases that have not yet ~~commenced and the letters of credit under the ABL Facility (see~~ ~~Note 3~~ ~~and~~commenced. See Note 5 of the Notes to Condensed Consolidated Financial Statements ~~respectively,~~ for ~~additional~~ information on these items). The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

~~Contractual Obligations~~

~~There have been no material changes to~~regarding the Company's ~~contractual obligations from those disclosed in Veritiv's Annual Report on Form 10-K~~use of vendor-based financing arrangements. See Note 13 and Note 14 of the Notes to Condensed Consolidated Financial Statements for information regarding the ~~year ended December 31, 2020.~~sale of Veritiv Canada, Inc.

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.

Critical Accounting ~~Policies and~~ Estimates

There have been no material changes to the Company's critical accounting ~~policies and~~ estimate methodologies from those disclosed in Veritiv's Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. 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 additional information becomes available. See the "Use of Estimates" section of Note 1 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the Company's estimates.

Recently Issued Accounting Standards

See Note 1 of the Notes to 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, ~~2020.~~2021.

Table of Contents

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The 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 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 disclosure controls and procedures were effective as of March 31, ~~2021.~~2022.

~~Table of Contents~~

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 March 31, ~~2021~~2022 that ~~has~~have materially affected, or isare reasonably likely to materially affect, the Company's internal control over financial reporting.

~~Table of Contents~~

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to Note 1211 of the Notes to 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, ~~2020.~~

2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On March ~~3, 2021,~~1, 2022, Veritiv announced that its Board of Directors authorized ~~the $50.0~~a $200 million ~~2021~~share repurchase program (the "2022 Share Repurchase ~~Program. Under this program~~Program"). The 2022 Share Repurchase Program authorizes the Company, ~~may~~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 ~~for the share repurchase program replaces the 2020 Share Repurchase Program and~~ may be suspended, terminated, increased or decreased by the Board of Directors at any time.

During the first quarter of 2020, the Company repurchased 383,972 shares of its common stock at a cost of $3.5 million under its 2020 Share Repurchase Program, prior to its suspension as of March 27, 2020.

The following table presents information with respect to purchases made by the Company of its common stock during the three months ended March 31, ~~2021~~2022 (shares are in whole units):


Period	Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of the Publicly Announced Program (2)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Publicly Announced Program	Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of the Publicly Announced Program (2)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Publicly Announced Program
January 1-31	January 1-31	35,116	$20.83	—	50,000,000	January 1-31	31,323	$122.57	—	$—
February 1-28	February 1-28	64	$20.79	—	50,000,000	February 1-28	18,677	$94.30	—	$—
March 1-31	March 1-31	655,082	$41.24	586,003	25,439,001	March 1-31	270,743	$126.73	78,025	$189,570,387

(1) The total number of shares purchased includes: (i) shares purchased pursuant to the ~~2021~~2022 Share Repurchase Program (if any) and (ii) shares surrendered to the

Company to satisfy tax withholding obligations in connection with the vesting of stock units issued as part of the Company's equity-based incentive plans.

(2) This column discloses the number of shares purchased pursuant to the ~~2021~~2022 Share Repurchase Program during the indicated periods.

Table of Contents

ITEM 6. EXHIBITS


Exhibit No.						Description

2.1†						Stock Purchase Agreement, dated March 17, 2022, among Paper Corporation of North America, Veritiv Canada, Inc., solely for purposes of Section 8.9 (and Article I and Article XI to the extent applicable to Section 8.9) of the Purchase Agreement, Veritiv Operating Company, Imperial Dade Canada Inc. and Imperial Bag & Paper Co. LLC, incorporated by reference from Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on March 18, 2022.

10.1*						Veritiv Corporation Executive Severance Plan, as amended and restated, effective September 30, 2020, and as further amended effective February 22, 2022.

10.2*						Offer Letter, dated as of October 28, 2020 between Veritiv Operating Company and Karen Renner.

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 - 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)

† The schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601.
* Filed herewith

Table of Contents

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 ~~5, 2021~~9, 2022	By: /s/ Stephen J. Smith
		Name: Stephen J. Smith
		Title: Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

Date:	May ~~5, 2021~~9, 2022	By: /s/ ~~Andrew E. Magley~~Lance D. Gebert
		Name: ~~Andrew E. Magley~~Lance D. Gebert
		Title: ~~Chief Accounting Officer~~Corporate Controller
		(Principal Accounting Officer)


	Packaging and Facility Solutions				Print - High Risk				Print - Medium/Low Risk
(in millions)	U.S.		Canada		U.S.		Canada		U.S.		Canada		Publishing(1)		Rest of world		Corporate & Other(1)		Total
Ending balance, December 31, 2020	$	14.4	$	0.5	$	10.2	$	0.7	$	2.2	$	0.0	$	1.6	$	1.0	$	0.8	$	31.4
Add / (Deduct):
Provision for expected credit losses	1.9		0.1		(0.8)		0.0		0.3		0.0		(0.7)		0.0		0.1		0.9
Write-offs charged against the allowance	(1.3)		0.0		(0.2)		0.0		0.0		0		0		0.0		(0.1)		(1.6)
Recoveries of amounts previously written off	0.0		0		0.0		0		0.0		0		0		0		0		0.0
Other adjustments(2)	0		0.0		1.4		0.0		(1.4)		0.0		0		0.0		0		0.0
Ending balance, March 31, 2021	$	15.0	$	0.6	$	10.6	$	0.7	$	1.1	$	0.0	$	0.9	$	1.0	$	0.8	$	30.7


	Three Months Ended March 31, 2021				Three Months Ended March 31, 2020
(in millions)	U.S.		Canada		U.S.		Canada
Components of net periodic benefit cost (credit):
Service cost	$	0.6	$	0.1	$	0.6	$	0.1

Interest cost	$	0.3	$	0.5	$	0.4	$	0.6
Expected return on plan assets	(1.1)		(1.0)		(1.0)		(0.9)



Total other components	$	(0.8)	$	(0.5)	$	(0.6)	$	(0.3)
Net periodic benefit cost (credit)	$	(0.2)	$	(0.4)	$	0.0	$	(0.2)