10-Q 1 vrtv-20220930.htm 10-Q vrtv-20220930
000159948912/312022Q3falsehttp://fasb.org/us-gaap/2022#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2022#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2022#OtherAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2022#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2022#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2022#DebtCurrenthttp://fasb.org/us-gaap/2022#DebtCurrenthttp://fasb.org/us-gaap/2022#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2022#LongTermDebtAndCapitalLeaseObligations00015994892022-01-012022-09-3000015994892022-11-01xbrli:shares00015994892022-07-012022-09-30iso4217:USD00015994892021-07-012021-09-3000015994892021-01-012021-09-30iso4217:USDxbrli:shares00015994892022-09-3000015994892021-12-3100015994892020-12-3100015994892021-09-300001599489us-gaap:CommonStockMember2021-12-310001599489us-gaap:AdditionalPaidInCapitalMember2021-12-310001599489us-gaap:RetainedEarningsMember2021-12-310001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001599489us-gaap:TreasuryStockCommonMember2021-12-310001599489us-gaap:RetainedEarningsMember2022-01-012022-03-3100015994892022-01-012022-03-310001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001599489us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001599489us-gaap:CommonStockMember2022-01-012022-03-310001599489us-gaap:TreasuryStockCommonMember2022-01-012022-03-310001599489us-gaap:CommonStockMember2022-03-310001599489us-gaap:AdditionalPaidInCapitalMember2022-03-310001599489us-gaap:RetainedEarningsMember2022-03-310001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001599489us-gaap:TreasuryStockCommonMember2022-03-3100015994892022-03-310001599489us-gaap:RetainedEarningsMember2022-04-012022-06-3000015994892022-04-012022-06-300001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001599489us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001599489us-gaap:CommonStockMember2022-04-012022-06-300001599489us-gaap:TreasuryStockCommonMember2022-04-012022-06-300001599489us-gaap:CommonStockMember2022-06-300001599489us-gaap:AdditionalPaidInCapitalMember2022-06-300001599489us-gaap:RetainedEarningsMember2022-06-300001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001599489us-gaap:TreasuryStockCommonMember2022-06-3000015994892022-06-300001599489us-gaap:RetainedEarningsMember2022-07-012022-09-300001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001599489us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001599489us-gaap:CommonStockMember2022-07-012022-09-300001599489us-gaap:TreasuryStockCommonMember2022-07-012022-09-300001599489us-gaap:CommonStockMember2022-09-300001599489us-gaap:AdditionalPaidInCapitalMember2022-09-300001599489us-gaap:RetainedEarningsMember2022-09-300001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001599489us-gaap:TreasuryStockCommonMember2022-09-300001599489us-gaap:CommonStockMember2020-12-310001599489us-gaap:AdditionalPaidInCapitalMember2020-12-310001599489us-gaap:RetainedEarningsMember2020-12-310001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001599489us-gaap:TreasuryStockCommonMember2020-12-310001599489us-gaap:RetainedEarningsMember2021-01-012021-03-3100015994892021-01-012021-03-310001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001599489us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001599489us-gaap:CommonStockMember2021-01-012021-03-310001599489us-gaap:TreasuryStockCommonMember2021-01-012021-03-310001599489us-gaap:CommonStockMember2021-03-310001599489us-gaap:AdditionalPaidInCapitalMember2021-03-310001599489us-gaap:RetainedEarningsMember2021-03-310001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001599489us-gaap:TreasuryStockCommonMember2021-03-3100015994892021-03-310001599489us-gaap:RetainedEarningsMember2021-04-012021-06-3000015994892021-04-012021-06-300001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001599489us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001599489us-gaap:CommonStockMember2021-04-012021-06-300001599489us-gaap:TreasuryStockCommonMember2021-04-012021-06-300001599489us-gaap:CommonStockMember2021-06-300001599489us-gaap:AdditionalPaidInCapitalMember2021-06-300001599489us-gaap:RetainedEarningsMember2021-06-300001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001599489us-gaap:TreasuryStockCommonMember2021-06-3000015994892021-06-300001599489us-gaap:RetainedEarningsMember2021-07-012021-09-300001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001599489us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001599489us-gaap:CommonStockMember2021-07-012021-09-300001599489us-gaap:TreasuryStockCommonMember2021-07-012021-09-300001599489us-gaap:CommonStockMember2021-09-300001599489us-gaap:AdditionalPaidInCapitalMember2021-09-300001599489us-gaap:RetainedEarningsMember2021-09-300001599489us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001599489us-gaap:TreasuryStockCommonMember2021-09-300001599489vrtv:FitzMarkLLCMember2022-09-012022-09-010001599489us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMembervrtv:FitzMarkLLCMember2022-09-012022-09-010001599489vrtv:FitzMarkLLCMember2022-09-01vrtv:employee0001599489vrtv:VeritivCanadaIncMember2022-04-012022-06-300001599489vrtv:VeritivCanadaIncMember2022-07-012022-09-300001599489vrtv:VeritivCanadaIncMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2022-05-022022-05-020001599489vrtv:VeritivCanadaIncMember2022-05-020001599489us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-09-30xbrli:pure00015994892022-10-012022-09-300001599489srt:MinimumMember2022-01-012022-09-300001599489srt:MaximumMember2022-01-012022-09-300001599489srt:MinimumMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembervrtv:TenLargestCustomersMember2022-01-012022-09-300001599489us-gaap:CustomerConcentrationRiskMembersrt:MaximumMemberus-gaap:SalesRevenueNetMembervrtv:TenLargestCustomersMember2022-01-012022-09-300001599489us-gaap:GeographicConcentrationRiskMembercountry:USus-gaap:SalesRevenueNetMember2022-01-012022-09-300001599489us-gaap:GeographicConcentrationRiskMembercountry:CAus-gaap:SalesRevenueNetMember2022-01-012022-05-02vrtv:segment0001599489country:USus-gaap:OperatingSegmentsMembervrtv:PackagingAndFacilitySolutionsMember2021-12-310001599489us-gaap:OperatingSegmentsMembercountry:CAvrtv:PackagingAndFacilitySolutionsMember2021-12-310001599489vrtv:PrintSolutionsMembercountry:USus-gaap:OperatingSegmentsMemberus-gaap:RiskLevelHighMember2021-12-310001599489vrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMembercountry:CAus-gaap:RiskLevelHighMember2021-12-310001599489vrtv:RiskLevelLowMediumMembervrtv:PrintSolutionsMembercountry:USus-gaap:OperatingSegmentsMember2021-12-310001599489vrtv:RiskLevelLowMediumMembervrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMembercountry:CA2021-12-310001599489us-gaap:OperatingSegmentsMembervrtv:AllOtherCountriesMember2021-12-310001599489us-gaap:CorporateNonSegmentMembercountry:US2021-12-310001599489country:USus-gaap:OperatingSegmentsMembervrtv:PackagingAndFacilitySolutionsMember2022-01-012022-09-300001599489us-gaap:OperatingSegmentsMembercountry:CAvrtv:PackagingAndFacilitySolutionsMember2022-01-012022-09-300001599489vrtv:PrintSolutionsMembercountry:USus-gaap:OperatingSegmentsMemberus-gaap:RiskLevelHighMember2022-01-012022-09-300001599489vrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMembercountry:CAus-gaap:RiskLevelHighMember2022-01-012022-09-300001599489vrtv:RiskLevelLowMediumMembervrtv:PrintSolutionsMembercountry:USus-gaap:OperatingSegmentsMember2022-01-012022-09-300001599489vrtv:RiskLevelLowMediumMembervrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMembercountry:CA2022-01-012022-09-300001599489us-gaap:OperatingSegmentsMembervrtv:AllOtherCountriesMember2022-01-012022-09-300001599489us-gaap:CorporateNonSegmentMembercountry:US2022-01-012022-09-300001599489country:USus-gaap:OperatingSegmentsMembervrtv:PackagingAndFacilitySolutionsMember2022-09-300001599489us-gaap:OperatingSegmentsMembercountry:CAvrtv:PackagingAndFacilitySolutionsMember2022-09-300001599489vrtv:PrintSolutionsMembercountry:USus-gaap:OperatingSegmentsMemberus-gaap:RiskLevelHighMember2022-09-300001599489vrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMembercountry:CAus-gaap:RiskLevelHighMember2022-09-300001599489vrtv:RiskLevelLowMediumMembervrtv:PrintSolutionsMembercountry:USus-gaap:OperatingSegmentsMember2022-09-300001599489vrtv:RiskLevelLowMediumMembervrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMembercountry:CA2022-09-300001599489us-gaap:OperatingSegmentsMembervrtv:AllOtherCountriesMember2022-09-300001599489us-gaap:CorporateNonSegmentMembercountry:US2022-09-30vrtv:distribution_center0001599489us-gaap:RealEstateMember2022-09-300001599489vrtv:NonRealEstateMember2022-09-300001599489us-gaap:EmployeeSeveranceMembervrtv:VeritivRestructuringPlanMember2022-01-012022-09-300001599489us-gaap:OtherRestructuringMembervrtv:VeritivRestructuringPlanMember2022-01-012022-09-300001599489vrtv:VeritivRestructuringPlanMembervrtv:RestructuringCostNonCashItemsMember2022-01-012022-09-300001599489vrtv:RestructuringChargesIncludingNonCashItemsMembervrtv:VeritivRestructuringPlanMember2022-01-012022-09-300001599489us-gaap:EmployeeSeveranceMembervrtv:VeritivRestructuringPlanMember2022-09-300001599489us-gaap:OtherRestructuringMembervrtv:VeritivRestructuringPlanMember2022-09-300001599489vrtv:VeritivRestructuringPlanMembervrtv:RestructuringCostNonCashItemsMember2022-09-300001599489vrtv:RestructuringChargesIncludingNonCashItemsMembervrtv:VeritivRestructuringPlanMember2022-09-300001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2021-12-310001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2021-12-310001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2021-12-310001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2022-01-012022-03-310001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2022-01-012022-03-310001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2022-01-012022-03-310001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2022-03-310001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2022-03-310001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2022-03-310001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2022-04-012022-06-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2022-04-012022-06-300001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2022-04-012022-06-300001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2022-06-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2022-06-300001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2022-06-300001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2022-07-012022-09-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2022-07-012022-09-300001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2022-07-012022-09-300001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2022-09-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2022-09-300001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2022-09-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2022-01-012022-09-300001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2020-12-310001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2020-12-310001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2020-12-310001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2021-01-012021-03-310001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2021-01-012021-03-310001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2021-01-012021-03-310001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2021-03-310001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2021-03-310001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2021-03-310001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2021-04-012021-06-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2021-04-012021-06-300001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2021-04-012021-06-300001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2021-06-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2021-06-300001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2021-06-300001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2021-07-012021-09-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2021-07-012021-09-300001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2021-07-012021-09-300001599489us-gaap:EmployeeSeveranceMembervrtv:A2020RestructuringPlanMember2021-09-300001599489vrtv:A2020RestructuringPlanMemberus-gaap:OtherRestructuringMember2021-09-300001599489vrtv:A2020RestructuringPlanMembervrtv:RestructuringChargesExcludingNonCashItemsMember2021-09-300001599489vrtv:A2020RestructuringPlanMember2021-07-012021-09-300001599489vrtv:A2020RestructuringPlanMember2021-01-012021-09-300001599489vrtv:VeritivRestructuringPlanMembervrtv:RestructuringCostsExcludingNonCashRestructuringGainsLossesMember2022-09-300001599489vrtv:VeritivRestructuringPlanMembervrtv:RestructuringCostsExcludingNonCashRestructuringGainsLossesMember2021-12-310001599489us-gaap:LineOfCreditMembervrtv:AssetBackedLendingFacilityMember2022-09-300001599489us-gaap:LineOfCreditMembervrtv:AssetBackedLendingFacilityMember2021-12-310001599489vrtv:CommercialCardProgramMember2022-09-300001599489vrtv:CommercialCardProgramMember2021-12-310001599489vrtv:VendorBasedFinancingAgreementMember2022-09-300001599489vrtv:VendorBasedFinancingAgreementMember2021-12-310001599489us-gaap:InterestRateCapMembervrtv:AssetBackedLendingFacilityMember2022-09-13vrtv:Derivative0001599489vrtv:AssetBackedLendingFacilityMember2022-09-300001599489vrtv:VendorBasedFinancingAgreementMember2022-01-012022-09-300001599489country:CA2022-01-012022-09-300001599489country:US2022-07-012022-09-300001599489country:CA2022-07-012022-09-300001599489country:US2021-07-012021-09-300001599489country:CA2021-07-012021-09-300001599489country:US2022-01-012022-09-300001599489country:US2021-01-012021-09-300001599489country:CA2021-01-012021-09-300001599489vrtv:PackagingMember2022-09-300001599489vrtv:PackagingAndFacilitySolutionsMember2022-09-300001599489vrtv:VeritivCanadaIncMember2022-03-310001599489us-gaap:DisposalGroupHeldForSaleOrDisposedOfBySaleNotDiscontinuedOperationsMember2022-09-300001599489us-gaap:DisposalGroupHeldForSaleOrDisposedOfBySaleNotDiscontinuedOperationsMember2021-12-310001599489vrtv:A2022SharesRepurchaseProgramMember2022-03-010001599489vrtv:A2022SharesRepurchaseProgramMember2022-07-012022-09-300001599489vrtv:A2022SharesRepurchaseProgramMember2022-01-012022-09-300001599489vrtv:A2021SharesRepurchaseProgramMember2021-03-030001599489vrtv:A2021SharesRepurchaseProgramMember2021-05-310001599489vrtv:A2021SharesRepurchaseProgramMembervrtv:UWWHoldingsLLCMember2021-03-122021-03-120001599489vrtv:A2021SharesRepurchaseProgramMember2021-07-012021-09-300001599489vrtv:A2021SharesRepurchaseProgramMember2021-01-012021-09-300001599489us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310001599489us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-310001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-03-310001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-03-310001599489us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-03-310001599489us-gaap:AccumulatedTranslationAdjustmentMember2022-04-012022-06-300001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-04-012022-06-300001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-04-012022-06-300001599489us-gaap:AccumulatedTranslationAdjustmentMember2022-06-300001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-06-300001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-06-300001599489us-gaap:AccumulatedTranslationAdjustmentMember2022-07-012022-09-300001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-07-012022-09-300001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-07-012022-09-300001599489us-gaap:AccumulatedTranslationAdjustmentMember2022-09-300001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-09-300001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-09-300001599489us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-310001599489us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-310001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-03-310001599489us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-03-310001599489us-gaap:AccumulatedTranslationAdjustmentMember2021-04-012021-06-300001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-04-012021-06-300001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-04-012021-06-300001599489us-gaap:AccumulatedTranslationAdjustmentMember2021-06-300001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-06-300001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-06-300001599489us-gaap:AccumulatedTranslationAdjustmentMember2021-07-012021-09-300001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-07-012021-09-300001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-07-012021-09-300001599489us-gaap:AccumulatedTranslationAdjustmentMember2021-09-300001599489us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-09-300001599489us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-09-300001599489us-gaap:PensionPlansDefinedBenefitMembervrtv:MinneapolisFoodDistributorsIndPensionPlanMemberus-gaap:WithdrawalFromMultiemployerDefinedBenefitPlanMember2021-12-310001599489us-gaap:PensionPlansDefinedBenefitMembervrtv:MinneapolisFoodDistributorsIndPensionPlanMemberus-gaap:WithdrawalFromMultiemployerDefinedBenefitPlanMember2022-01-012022-09-300001599489vrtv:WesternPennsylvaniaTeamstersandEmployersPensionPlanMemberus-gaap:PensionPlansDefinedBenefitMembervrtv:CompleteWithdrawalMemberus-gaap:WithdrawalFromMultiemployerDefinedBenefitPlanMember2022-09-300001599489vrtv:WesternPennsylvaniaTeamstersandEmployersPensionPlanMemberus-gaap:PensionPlansDefinedBenefitMemberus-gaap:WithdrawalFromMultiemployerDefinedBenefitPlanMember2022-09-300001599489vrtv:WesternPennsylvaniaTeamstersandEmployersPensionPlanMemberus-gaap:PensionPlansDefinedBenefitMemberus-gaap:WithdrawalFromMultiemployerDefinedBenefitPlanMember2022-01-012022-09-300001599489vrtv:PackagingMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300001599489us-gaap:OperatingSegmentsMembervrtv:FacilitySolutionsMember2022-07-012022-09-300001599489vrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300001599489us-gaap:OperatingSegmentsMember2022-07-012022-09-300001599489us-gaap:CorporateNonSegmentMember2022-07-012022-09-300001599489vrtv:PackagingMemberus-gaap:OperatingSegmentsMember2021-07-012021-09-300001599489us-gaap:OperatingSegmentsMembervrtv:FacilitySolutionsMember2021-07-012021-09-300001599489vrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMember2021-07-012021-09-300001599489us-gaap:OperatingSegmentsMember2021-07-012021-09-300001599489us-gaap:CorporateNonSegmentMember2021-07-012021-09-300001599489vrtv:PackagingMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300001599489us-gaap:OperatingSegmentsMembervrtv:FacilitySolutionsMember2022-01-012022-09-300001599489vrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300001599489us-gaap:OperatingSegmentsMember2022-01-012022-09-300001599489us-gaap:CorporateNonSegmentMember2022-01-012022-09-300001599489vrtv:PackagingMemberus-gaap:OperatingSegmentsMember2021-01-012021-09-300001599489us-gaap:OperatingSegmentsMembervrtv:FacilitySolutionsMember2021-01-012021-09-300001599489vrtv:PrintSolutionsMemberus-gaap:OperatingSegmentsMember2021-01-012021-09-300001599489us-gaap:OperatingSegmentsMember2021-01-012021-09-300001599489us-gaap:CorporateNonSegmentMember2021-01-012021-09-3000015994892021-02-012021-02-2800015994892021-02-012022-09-30iso4217:CAD00015994892021-03-312021-03-310001599489us-gaap:SubsequentEventMember2022-11-072022-11-07


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 September 30, 2022
or
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

vrtv-20220930_g1.jpg

VERITIV CORPORATION
(Exact name of registrant as specified in its charter)
Delaware46-3234977
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
1000 Abernathy Road NE
Building 400, Suite 1700
                           Atlanta,Georgia30328
(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 classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par valueVRTVNew 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 filerAccelerated filer
Non-accelerated filerSmaller 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 November 1, 2022 was 13,483,303.




TABLE OF CONTENTS





Page



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
September 30,
Nine Months Ended
September 30,
2022202120222021
Net sales$1,804.1 $1,767.8 $5,482.9 $4,985.7 
Cost of products sold (exclusive of depreciation and amortization shown separately below)1,388.3 1,402.1 4,254.6 3,959.2 
Distribution expenses93.4 103.4 303.8 308.9 
Selling and administrative expenses194.9 189.7 573.5 537.0 
Gain on sale of businesses(18.6) (28.6)(3.1)
Depreciation and amortization10.8 13.3 34.6 42.1 
Restructuring charges, net1.4 2.5 5.5 12.0 
Operating income (loss)133.9 56.8 339.5 129.6 
Interest expense, net4.8 3.8 12.3 13.4 
Other (income) expense, net0.0 (1.1)(7.2)(3.8)
Income (loss) before income taxes129.1 54.1 334.4 120.0 
Income tax expense (benefit)32.4 14.1 68.1 32.3 
Net income (loss)$96.7 $40.0 $266.3 $87.7 
Earnings (loss) per share:
Basic$6.98 $2.69 $18.49 $5.68 
Diluted$6.86 $2.54 $18.04 $5.40 
Weighted-average shares outstanding:
Basic13.85 14.86 14.40 15.44 
Diluted14.10 15.76 14.76 16.24 

See accompanying Notes to Condensed Consolidated Financial Statements.
1

VERITIV CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions, unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Net income (loss)$96.7 $40.0 $266.3 $87.7 
Other comprehensive income (loss):
Foreign currency translation adjustments(1.8)(4.0)(3.7)(1.3)
Reclassification of foreign currency translation adjustments due to sale of a business, net of tax (1)
  9.5  
Change in fair value of cash flow hedge, net of tax (1)
0.0 0.0 0.1 0.1 
Pension liability adjustments, net of tax (1)
0.0 0.1 6.4 0.1 
Reclassification adjustment on settlement of a pension plan, net of tax (1)
  (7.0) 
Other comprehensive income (loss)(1.8)(3.9)5.3 (1.1)
Total comprehensive income (loss)$94.9 $36.1 $271.6 $86.6 
(1) Amounts shown are net of tax impacts, if any, which for the nine months ended September 30, 2022 were $2.0 million for the reclassification of foreign currency translation adjustments due to sale of a business, $2.2 million for pension liability adjustments and $(4.0) million for the reclassification adjustment on settlement of a pension plan.

See accompanying Notes to Condensed Consolidated Financial Statements.



2

VERITIV CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions, except par value, unaudited)
September 30, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$33.8 $49.3 
Accounts receivable, less allowances of $28.6 and $34.4, respectively
962.3 1,011.2 
Inventories449.2 

484.5 
Other current assets138.7 

132.7 
Total current assets1,584.0 1,677.7 
Property and equipment (net of accumulated depreciation and amortization of $317.8 and $332.4, respectively)
131.3 

162.9 
Goodwill96.3 

99.6 
Other intangibles, net36.7 

42.7 
Deferred income tax assets53.8 

47.1 
Other non-current assets337.5 

408.4 
Total assets$2,239.6 $2,438.4 
Liabilities and shareholders' equity
Current liabilities:
Accounts payable$543.2 $561.9 
Accrued payroll and benefits84.9 110.0 
Other accrued liabilities157.7 185.7 
Current portion of debt13.8 

16.0 
Total current liabilities799.6 873.6 
Long-term debt, net of current portion389.9 

499.7 
Defined benefit pension obligations4.2 

7.2 
Other non-current liabilities360.8 

422.1 
Total liabilities1,554.5 1,802.6 
Commitments and contingencies (Note 11)

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

 
Common stock, $0.01 par value, 100.0 million shares authorized; shares issued - 17.5 million and 17.0 million, respectively; shares outstanding - 13.5 million and 14.6 million, respectively
0.2 

0.2 
Additional paid-in capital611.5 

633.8 
Accumulated earnings (deficit)409.5 

143.2 
Accumulated other comprehensive loss(19.0)

(24.3)
Treasury stock at cost - 4.0 million and 2.4 million shares, respectively
(317.1)(117.1)
Total shareholders' equity685.1 635.8 
Total liabilities and shareholders' equity$2,239.6 $2,438.4 

See accompanying Notes to Condensed Consolidated Financial Statements.
3

VERITIV CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions, unaudited)
Nine Months Ended September 30,
20222021
Operating activities
Net income (loss)$266.3 $87.7 
Depreciation and amortization34.6 42.1 
Amortization and write-off of deferred financing fees1.2 1.1 
Net (gains) losses on disposition of assets and sale of businesses(33.7)(9.1)
Provision for expected credit losses2.6 4.6 
Deferred income tax provision (benefit)(6.7)(0.3)
Stock-based compensation7.7 5.7 
Other non-cash items, net(7.5)1.3 
Changes in operating assets and liabilities
Accounts receivable(66.1)(120.1)
Inventories(51.5)(20.4)
Other current assets(5.5)(5.8)
Accounts payable40.5 97.7 
Accrued payroll and benefits(19.0)10.3 
Other accrued liabilities(1.3)(11.6)
Other(2.7)8.4 
Net cash provided by (used for) operating activities158.9 91.6 
Investing activities
Property and equipment additions(18.1)(14.1)
Proceeds from asset sales and sale of businesses, net of cash transferred158.2 15.8 
Proceeds from insurance related to property and equipment3.3  
Net cash provided by (used for) investing activities143.4 1.7 
Financing activities
Change in book overdrafts12.3 (0.9)
Borrowings of long-term debt4,713.1 4,353.6 
Repayments of long-term debt(4,799.4)(4,401.1)
Payments under right-of-use finance leases(9.1)(10.2)
Payments under vendor-based financing arrangements(3.2) 
Deferred financing fees (3.3)
Purchase of treasury stock(200.0)(100.0)
Impact of tax withholding on share-based compensation(30.0)(8.4)
Other(0.2)0.2 
Net cash provided by (used for) financing activities(316.5)(170.1)
Effect of exchange rate changes on cash(1.3)(0.4)
Net change in cash and cash equivalents(15.5)(77.2)
Cash and cash equivalents at beginning of period49.3 120.6 
Cash and cash equivalents at end of period$33.8 $43.4 
Supplemental cash flow information
Cash paid for income taxes, net of refunds$78.7 $37.2 
Cash paid for interest10.7 11.9 
Non-cash investing and financing activities
Non-cash additions to property and equipment for right-of-use finance leases and vendor-based financing arrangements$18.6 $1.9 
Non-cash additions to other non-current assets for right-of-use operating leases38.7 59.3 

See accompanying Notes to Condensed Consolidated Financial Statements.
4

VERITIV CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in millions, unaudited)
2022
Common Stock IssuedAdditional Paid-in CapitalAccumulated Earnings (Deficit)
AOCL (1)
Treasury StockTotal
SharesAmountSharesAmount
Balance at December 31, 202117.0 $0.2 $633.8 $143.2 $(24.3)(2.4)$(117.1)$635.8 
Net income (loss)78.5 78.5 
Other comprehensive income (loss)2.6 2.6 
Stock-based compensation2.8 2.8 
Issuance of common stock, net of stock received for minimum tax withholdings0.5 0.0 (29.5)(29.5)
Treasury stock purchases(0.1)(10.4)(10.4)
Balance at March 31, 202217.5 $0.2 $607.1 $221.7 $(21.7)(2.5)$(127.5)$679.8 
Net income (loss)91.1 91.1 
Other comprehensive income (loss)4.5 4.5 
Stock-based compensation3.1 3.1 
Issuance of common stock, net of stock received for minimum tax withholdings0.0 0.0 (0.2)(0.2)
Treasury stock purchases(0.7)(94.4)(94.4)
Balance at June 30, 202217.5 $0.2 $610.0 $312.8 $(17.2)(3.2)$(221.9)$683.9 
Net income (loss)96.7 96.7 
Other comprehensive income (loss)(1.8)(1.8)
Stock-based compensation1.8 1.8 
Issuance of common stock, net of stock received for minimum tax withholdings0.0 0.0 (0.3)(0.3)
Treasury stock purchases(0.8)(95.2)(95.2)
Balance at September 30, 202217.5 $0.2 $611.5 $409.5 $(19.0)(4.0)$(317.1)$685.1 
(1) Accumulated other comprehensive loss.

5

2021
Common Stock IssuedAdditional Paid-in CapitalAccumulated Earnings (Deficit)
AOCL (1)
Treasury StockTotal
SharesAmountSharesAmount
Balance at December 31, 202016.6 $0.2 $634.9 $(1.4)$(33.5)(0.7)$(17.1)$583.1 
Net income (loss)21.3 21.3 
Other comprehensive income (loss)(0.3)(0.3)
Stock-based compensation1.2 1.2 
Issuance of common stock, net of stock received for minimum tax withholdings0.2 0.0 (3.3)(3.3)
Treasury stock purchases(0.6)(24.6)(24.6)
Balance at March 31, 202116.8 $0.2 $632.8 $19.9 $(33.8)(1.3)$(41.7)$577.4 
Net income (loss)26.4 26.4 
Other comprehensive income (loss)3.1 3.1 
Stock-based compensation3.5 3.5 
Issuance of common stock, net of stock received for minimum tax withholdings0.2 0.0 (5.0)(5.0)
Treasury stock purchases(0.4)(25.8)(25.8)
Balance at June 30, 202117.0 $0.2 $631.3 $46.3 $(30.7)(1.7)$(67.5)$579.6 
Net income (loss)40.0 40.0 
Other comprehensive income (loss)(3.9)(3.9)
Stock-based compensation1.0 1.0 
Issuance of common stock, net of stock received for minimum tax withholdings0.0 0.0 (0.1)(0.1)
Treasury stock purchases(0.7)(49.6)(49.6)
Balance at September 30, 202117.0 $0.2 $632.2 $86.3 $(34.6)(2.4)$(117.1)$567.0 
(1) Accumulated other comprehensive loss.

See accompanying Notes to Condensed Consolidated Financial Statements.

6


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 and print-based products and services. Veritiv was established in 2014, following the merger of International Paper Company's xpedx distribution solutions business and UWW Holdings, Inc., the parent company of Unisource Worldwide, Inc. ("Unisource"). Veritiv operates primarily throughout the United States ("U.S.") and Mexico.

On September 1, 2022, the Company sold its logistics solutions business, which provided transportation and warehousing solutions to customers in the U.S., to FitzMark, LLC. The Company recognized an initial pre-tax gain of approximately $10.3 million. The Company received initial net cash proceeds of approximately $18.3 million. The gain and cash proceeds are subject to customary working capital adjustments. The Company used the proceeds to support the 2022 Share Repurchase Program, to pay down outstanding debt and to fund capital priorities and growth initiatives. The sale did 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. Upon closing of the sale, Veritiv’s approximately 60 employees in its logistics solutions business became employees of FitzMark, LLC. See Note 13, Divestitures, for additional information regarding the sale of the logistics solutions business.

On May 2, 2022, the Company completed the sale of its Veritiv Canada, Inc. business to Imperial Dade Canada Inc. The Company recognized an initial pre-tax gain of approximately $10.0 million in the second quarter of 2022. In the third quarter of 2022, the Company recognized an additional pre-tax gain of approximately $8.3 million related to finalizing the post-closing working capital adjustment. Veritiv received initial net cash proceeds of approximately $147.4 million. The Company used the proceeds to support the 2022 Share Repurchase Program, to pay down outstanding debt and to fund capital priorities and growth initiatives. The sale included 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 did 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. Upon closing of the sale, Veritiv’s approximately 900 employees in Canada became employees of Imperial Dade Canada Inc. See Note 13, Divestitures, for additional information regarding the sale of Veritiv Canada, Inc.

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 related to 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, 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. During the third quarter of 2022, the Company reclassified its gains from the sale of businesses from the selling and administrative expenses line to the gain on sale of businesses line on the Condensed Consolidated Statements of Operations for the periods presented. The operating results for the interim periods are not necessarily indicative of results for the full year, particularly in light of the Company's recent divestitures
7

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, goodwill and other intangible asset valuations. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, actual results may ultimately differ from these estimates and assumptions.

Primarily beginning in April 2020, the COVID-19 pandemic has affected Veritiv's operational and financial 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 and deferred tax valuation allowances. The extent to which the COVID-19 pandemic 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 uncertain and 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, measures adopted or recommended by local and federal governments or health authorities in response to the pandemic, the availability, adoption and effectiveness of vaccines 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. Estimates are revised as additional information becomes available.

Accounting Pronouncements

Recently Adopted Accounting Standards

Effective January 1, 2022, the Company adopted Accounting Standards Update ("ASU") 2021-10, Government Assistance (Topic 832) on a prospective basis. This standard increases the transparency of government assistance provided to entities by including disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance and (3) the effect of the assistance on an entity's financial statements. The amendments in this update are effective for annual periods beginning after December 15, 2021. An entity should apply the amendments in this update either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The adoption did not materially impact the Company's consolidated financial statements and disclosures.

Recently Issued Accounting Standards Not Yet Adopted

ASU 2022-04, Liabilities- Supplier Finance Programs (Subtopic 405-50). This standard requires disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. The amendments in this update do not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. The amendments in this update are effective for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose rollforward information, which is effective prospectively for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating the timing of adoption and the related impact on its related disclosures.

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, 2024. The Company has long-term debt for which existing payments are based on LIBOR. The Company's Asset-Based Lending Facility includes certain
8

provisions, which are not yet in effect, to facilitate the 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. 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 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 September 30, 2022 and December 31, 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 on the Condensed Consolidated Balance Sheets. Veritiv expects to satisfy these remaining performance obligations and recognize the related revenues upon delivery of the goods 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 balance:
Customer Contract Liabilities
(in millions)20222021
Balance at January 1,$21.8 $12.2 
    Payments received39.7 38.3 
    Revenue recognized from beginning of year balance(17.2)(10.4)
    Revenue recognized from current year receipts(24.3)(25.0)
    Other adjustments (1)
(0.9) 
Balance at September 30,$19.1 $15.1 
(1) Reflects liabilities removed as part of the sale of a business. See Note 13, Divestitures, for information related to the Company's recent divestitures.

Historically, the Company's ten largest customers have generated approximately 10% - 15% of its consolidated annual net sales. Veritiv's principal markets are concentrated primarily across North America. Approximately 92% of its reported net sales for the nine months ended September 30, 2022 were generated in the U.S. Prior to the divestiture, Veritiv's Canadian business represented approximately 10% of its reported net sales. 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 three reportable segments, organized by major product category. This segment structure is consistent with the way the Chief Operating Decision Maker, who is Veritiv's Chief Executive Officer, makes operating decisions
9

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. Prior to its divestiture in September 2022, the Company's logistics solutions business, which provided transportation and warehousing solutions, was also included in Corporate & Other.

Packaging – The Packaging segment provides custom and standard packaging solutions for customers based in North America and in key global markets. This segment services its customers with a full spectrum of packaging product materials within flexible, corrugated and fiber, ancillary packaging, rigid and equipment categories. The business is strategically focused on higher growth industry sectors including manufacturing, food and beverage, wholesale and retail, healthcare and transportation, as well as specialty sectors based on 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 in product categories that include towels and tissues, food service, personal protective equipment, cleaning chemicals and skincare, primarily in North America. Additionally, the Company offers total cost of ownership solutions with re-merchandising, budgeting and compliance reporting and inventory management.

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

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

Credit Losses and Other Allowances

The components of the accounts receivable allowances were as follows:
(in millions)September 30, 2022December 31, 2021
Allowance for credit losses$19.4 $23.7 
Other allowances(1)
9.2 10.7 
Total accounts receivable allowances$28.6 $34.4 
(1) Includes amounts reserved for credit memos, customer discounts, customer short pays and other miscellaneous items.

10

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

Packaging and Facility SolutionsPrint Solutions - High RiskPrint Solutions - Medium/Low Risk
(in millions)U.S.CanadaU.S.Canada
U.S.(1)
CanadaRest 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 losses3.0 0.1 (0.3)0.0 0.3 0.0 (0.1)0.3 3.3 
Write-offs charged against the allowance(1.7) (1.2) (0.1)  (0.2)(3.2)
Recoveries of amounts previously written off0.2  0.3  0.1   0.0 0.6 
Other adjustments(3)
(0.9)(1.1)(1.6)(0.5) 0.0 (0.1)(0.8)(5.0)
Balance at September 30, 2022$13.2 $ $3.4 $ $2.0 $ $0.8 $0.0 $19.4 
(1) Reflects the combined results for print and publishing operations.
(2) Corporate & Other has only U.S. operations.
(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. These adjustments may also include accounts receivable allowances recorded in connection with acquisitions and divestitures.

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 nine months ended September 30, 2022 and 2021, the Company recognized $(0.7) million and $0.1 million, respectively, in the provision for expected credit losses related to these notes receivable. At September 30, 2022 and December 31, 2021, the Company held $0.1 million and $0.5 million, respectively, in notes receivable, which is reflected within other non-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 September 30, 2022, the Company operated from approximately 95 distribution centers of which approximately 90 were leased. These facilities are strategically located throughout the U.S. and Mexico in order to efficiently serve the customer base in the surrounding areas while also facilitating expedited delivery services for special orders. The Company also leases various office spaces for corporate and sales functions.

11

The components of lease expense were as follows:
(in millions)Three Months Ended
September 30,
Nine Months Ended
September 30,
Lease ClassificationFinancial Statement Classification2022202120222021
Short-term lease expense(1)
Operating expenses$0.8 $1.2 $2.4 $3.0 
Operating lease expense(2)
Operating expenses$21.2 $25.0 $69.3 $76.0 
Finance lease expense:
Amortization of right-of-use assets
Depreciation and amortization$2.6 $3.7 $9.1 $11.0 
Interest expense
Interest expense, net0.4 0.7 1.5 2.1 
Total finance lease expense
$3.0 $4.4 $10.6 $13.1 
Total Lease Cost
$25.0 $30.6 $82.3 $92.1 
(1) Short-term lease expense is comprised of expenses related to leases with a term of twelve months or less, which includes expenses related to month-to-month leases.
(2) Sublease income and variable lease expense are not included in the above table as the amounts were not significant for the periods presented.

Supplemental balance sheets and other information were as follows:
(in millions, except weighted-average data)September 30, 2022December 31, 2021
Lease ClassificationFinancial Statement Classification
Operating Leases:
Operating lease right-of-use assetsOther non-current assets$314.8 $375.6 
Operating lease obligations - currentOther accrued liabilities$70.2 $80.2 
Operating lease obligations - non-currentOther non-current liabilities275.9 329.3 
Total operating lease obligations
$346.1 $409.5 
Weighted-average remaining lease term in years6.06.2
Weighted-average discount rate4.6 %4.5 %
Finance Leases:
Finance lease right-of-use assetsProperty and equipment$29.6 $66.3 
Finance lease obligations - currentCurrent portion of debt$8.9 $13.9 
Finance lease obligations - non-currentLong-term debt, net of current portion24.0 58.9 
Total finance lease obligations
$32.9 $72.8 
Weighted-average remaining lease term in years3.86.4
Weighted-average discount rate4.0 %3.7 %

12

Cash paid for amounts included in the measurement of lease liabilities was as follows:
(in millions)Nine Months Ended September 30,
Lease ClassificationFinancial Statement Classification20222021
Operating Leases:
Operating cash flows from operating leases
Operating activities$70.3 $78.2 
Finance Leases:
Operating cash flows from finance leases
Operating activities$1.5 $2.1 
Financing cash flows from finance leases
Financing activities9.1 10.2 

Lease Commitments

Future minimum lease payments at September 30, 2022 were as follows:
(in millions)Finance Leases
Operating Leases (1)
2022 (excluding the nine months ended September 30, 2022)$3.0 $22.4 
20239.4 80.5 
20247.9 67.8 
20257.2 55.9 
20264.6 51.2 
20272.4 44.5 
Thereafter1.6 75.2 
Total future minimum lease payments36.1 397.5 
    Amount representing interest(3.2)(51.4)
Total future minimum lease payments, net of interest$32.9 $346.1 
(1) Future sublease income of $2.5 million is excluded from the operating leases amount in the table above.

Total future minimum lease payments at September 30, 2022 for finance and operating leases, including the amount representing interest, are comprised of $393.5 million for real estate leases and $40.1 million for non-real estate leases.

4. RESTRUCTURING CHARGES

2020 Restructuring Plan

During 2020, the Company initiated a restructuring plan (the "2020 Restructuring Plan") to (1) respond to the impact of the COVID-19 pandemic on its business operations, (2) address the ongoing secular changes in its print and publishing operations and (3) further align its cost structure with ongoing business needs as the Company executes on its stated corporate strategy. As of September 30, 2022, the 2020 Restructuring Plan was substantially complete.
Other direct costs reported in the tables below include facility closing costs and other incidental costs associated with the development, communication, administration and implementation of these initiatives; unless otherwise indicated, 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 nine months ended September 30, 2022 and the cumulative amounts since the initiatives began:
(in millions)Severance and Related CostsOther Direct Costs(Gain) Loss on Sale of Assets and Other (non-cash portion)Total
2022$0.6 $5.2 $(0.3)$5.5 
Cumulative41.4 35.9 (4.2)73.1 
13



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

(in millions)Severance and Related CostsOther Direct CostsTotal
Balance at December 31, 2021$4.7 $3.7 $8.4 
Costs incurred0.4 1.4 1.8