Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | DFIN | |
Entity Registrant Name | Donnelley Financial Solutions, Inc. | |
Entity Central Index Key | 1,669,811 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,600,000 |
Condensed Combined Statements o
Condensed Combined Statements of Operations (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Services net sales | $ 139.4 | $ 142.1 | $ 454.1 | $ 479.9 |
Products net sales | 85 | 89.5 | 308.4 | 331 |
Total net sales | 224.4 | 231.6 | 762.5 | 810.9 |
Services cost of sales (exclusive of depreciation and amortization) | 64.2 | 71.1 | 214.6 | 222.4 |
Products cost of sales (exclusive of depreciation and amortization) | 62 | 50.9 | 179.9 | 177.5 |
Total cost of sales | 146.4 | 144.2 | 472.5 | 489.8 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 48.5 | 47.5 | 156.8 | 151.2 |
Restructuring, impairment and other charges-net | 1.7 | 1.4 | 3.6 | 3.3 |
Depreciation and amortization | 9.8 | 10.3 | 30.1 | 32 |
Income from operations | 18 | 28.2 | 99.5 | 134.6 |
Interest (income) expense-net | (0.1) | 0.3 | 0.3 | 0.9 |
Earnings before income taxes | 18.1 | 27.9 | 99.2 | 133.7 |
Income tax expense | 7.9 | 11.1 | 39.3 | 52.6 |
Net earnings | $ 10.2 | $ 16.8 | $ 59.9 | $ 81.1 |
Net earnings per share (Note 8): | ||||
Basic and diluted net earnings per share | $ 0.31 | $ 0.52 | $ 1.85 | $ 2.50 |
Basic and diluted common shares outstanding | 32.4 | 32.4 | 32.4 | 32.4 |
RRD Affiliates | ||||
Services cost of sales (exclusive of depreciation and amortization) | $ 8.7 | $ 9.3 | $ 29.4 | $ 31.5 |
Products cost of sales (exclusive of depreciation and amortization) | $ 11.5 | $ 12.9 | $ 48.6 | $ 58.4 |
Condensed Combined Statements 3
Condensed Combined Statements of Comprehensive Income (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net earnings | $ 10.2 | $ 16.8 | $ 59.9 | $ 81.1 |
Other comprehensive (loss) income, net of tax: | ||||
Translation adjustments | 0.2 | (4.3) | 4.2 | (7) |
Adjustment for net periodic pension plan cost | (0.2) | 5.5 | (0.4) | 16.3 |
Other comprehensive income | 0 | 1.2 | 3.8 | 9.3 |
Comprehensive income | $ 10.2 | $ 18 | $ 63.7 | $ 90.4 |
Condensed Combined Balance Shee
Condensed Combined Balance Sheets (UNAUDITED) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 53 | $ 15.1 |
Receivables, less allowances for doubtful accounts of $5.4 in 2016 (2015 - $4.6) | 198.5 | 146.2 |
Inventories | 25.1 | 22.2 |
Prepaid expenses and other current assets | 13.6 | 7.3 |
Total current assets | 290.2 | 190.8 |
Property, plant and equipment-net | 32.8 | 33 |
Goodwill | 446.8 | 446.8 |
Other intangible assets-net | 58.4 | 69.3 |
Software-net | 45.1 | 43.4 |
Deferred income taxes | 11.8 | 10.6 |
Other noncurrent assets | 28.9 | 23.7 |
Total assets | 914 | 817.6 |
LIABILITIES | ||
Accounts payable | 60.2 | 39.5 |
Accrued liabilities | 84.8 | 75.4 |
Short-term debt | 17.1 | 8.8 |
Total current liabilities | 162.1 | 123.7 |
Long-term debt (Note 11) | 619.4 | |
Note payable with an RRD affiliate | 0 | 29.2 |
Deferred compensation liabilities | 29.4 | 28.5 |
Other noncurrent liabilities | 14.5 | 12.7 |
Total liabilities | 825.4 | 194.1 |
Commitments and Contingencies (Note 12) | ||
EQUITY | ||
Accumulated other comprehensive loss | (12.2) | (16) |
Net parent company investment | 100.8 | 639.5 |
Total equity | 88.6 | 623.5 |
Total liabilities and equity | $ 914 | $ 817.6 |
Condensed Combined Balance She5
Condensed Combined Balance Sheets (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 5.4 | $ 4.6 |
Condensed Combined Statements 6
Condensed Combined Statements of Cash Flows (UNAUDITED) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net earnings | $ 59.9 | $ 81.1 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 30.1 | 32 |
Provision for doubtful accounts receivable | 1.7 | 0.8 |
Share-based compensation | 1.2 | 1.3 |
Deferred income taxes | (1) | 7.2 |
Other | 0.7 | 0.2 |
Changes in operating assets and liabilities - net of acquisitions: | ||
Accounts receivable - net | (54.6) | (40.4) |
Inventories | (2.9) | (2.1) |
Prepaid expenses and other current assets | (6.3) | 0.6 |
Accounts payable | 17.9 | 2.9 |
Income taxes payable and receivable | (0.6) | 0.4 |
Accrued liabilities and other | 10.7 | (25) |
Net cash provided by operating activities | 56.8 | 59 |
INVESTING ACTIVITIES | ||
Capital expenditures | (14) | (16.9) |
Purchases of investments | (3.5) | 0 |
Other investing activities | 0.5 | 0 |
Net cash used in investing activities | (17) | (16.9) |
FINANCING ACTIVITIES | ||
Proceeds from issuance of long-term debt | 348.2 | 0 |
Net change in short-term debt | (8.8) | (18.9) |
Debt issuance costs | (9.3) | 0 |
Other financing activities | 0 | (14.8) |
Net transfers to Parent and affiliates | (336.2) | (20.9) |
Net cash used in financing activities | (6.1) | (54.6) |
Effect of exchange rate on cash and cash equivalents | 4.2 | (2.6) |
Net increase (decrease) in cash and cash equivalents | 37.9 | (15.1) |
Cash and cash equivalents at beginning of year | 15.1 | 28.6 |
Cash and cash equivalents at end of period | 53 | 13.5 |
Supplemental non-cash disclosure: | ||
Debt exchange with RR Donnelley, including $5.5 million of debt issuance costs | 300 | 0 |
Settlement of intercompany note payable | 29.6 | 0 |
Accrued debt issuance costs | $ 1.6 | $ 0 |
Condensed Combined Statements 7
Condensed Combined Statements of Cash Flows (UNAUDITED) (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Statement Of Cash Flows [Abstract] | |
Debt issuance costs | $ 5.5 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Overview and Basis of Presentation | Note 1. Overview and Basis of Presentation Description of Business and Separation Donnelley Financial Solutions, Inc. (“Donnelley Financial,” “the Company” and “we”) is a financial communications services company that supports global capital markets compliance and transaction needs for its corporate clients and their advisors (such as law firms and investment bankers) and global investment markets compliance and analytics needs for mutual fund companies, variable annuity providers and broker/dealers. With proprietary technology such as data storage and workflow collaboration tools, deep subject matter expertise and a global footprint, Donnelley Financial produces, manages, stores, distributes and translates documents and electronic communications in order to deliver timely financial communications to investors and documents in a manner that complies with regulatory commissions. Donnelley Financial’s Registration Statement on Form 10, as amended (“Form 10), was declared effective by the U.S. Securities and Exchange Commission (“SEC”) on September 20, 2016. On October 1, 2016, Donnelley Financial became an independent publicly traded company through the distribution by R.R. Donnelley & Sons Company (“RRD”) of approximately 26.2 million shares, or 80.75%, of Donnelley Financial common stock to RRD shareholders (the “Separation”). Holders of RRD common stock received one share of Donnelley Financial common stock for every eight shares of RRD common stock held on September 23, 2016. RRD retained approximately 6.2 million shares of Donnelley Financial common stock, or a 19.25% interest in Donnelley Financial, as part of the Separation, but expects to dispose of the common stock that it retained in the 12-month period following the Separation. Donnelley Financial’s common stock began regular-way trading under the ticker symbol “DFIN” on the New York Stock Exchange on October 3, 2016. On October 1, 2016, RRD also completed the previously announced separation of LSC Communications, Inc. (“LSC”), its publishing and retail-centric print services and office products business. The Company and LSC entered into a Separation and Distribution Agreement with RRD to effect the distribution of the Company’s and LSC’s common stock to R.R. Donnelley’s common stockholders. This agreement governs the Company’s relationship with RRD and LSC with respect to pre-Separation matters and provides for the allocation of employee benefit, litigation and other liabilities and obligations attributable to periods prior to the Separation. The Separation and Distribution Agreement also includes an agreement that the Company, RRD and LSC will provide each other with appropriate indemnities with respect to liabilities arising out of the businesses being distributed and retained by RRD in the Separation. The Separation and Distribution Agreement also addresses employee compensation and benefit matters. In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company and the Company agrees to provide certain services to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization. The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients. Basis of Presentation The accompanying unaudited condensed combined interim financial statements have been prepared on a stand-alone basis and are derived from RRD’s consolidated financial statements and accounting records. The unaudited condensed combined financial statements include the financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The financial data presented herein is unaudited and should be read in conjunction with the audited combined financial statements and accompanying notes for the year ended December 31, 2015 included in our Form 10. In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results of interim periods should not be considered indicative of the results of the full year. These unaudited condensed combined interim financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed combined financial statements. Actual results could differ from these estimates. The unaudited condensed combined financial statements include the allocation of certain assets and liabilities that have historically been held at the RRD corporate level but which are specifically identifiable or attributable to the Company. Cash and cash equivalents held by RRD were not allocated to Donnelley Financial unless they were held in a legal entity that was transferred to Donnelley Financial. All intercompany transactions and accounts within Donnelley Financial have been eliminated. All intracompany transactions between RRD and Donnelley Financial are considered to be effectively settled in the unaudited condensed combined financial statements at the time the transaction is recorded. The total net effect of the settlement of these intracompany transactions is reflected in the unaudited condensed combined statements of cash flows as a financing activity and in the unaudited condensed combined balance sheets as net parent company investment. Net parent company investment is primarily impacted by contributions from RRD which are the result of treasury activities and net funding provided by or distributed to RRD. The unaudited condensed combined financial statements include certain expenses of RRD which were allocated to Donnelley Financial for certain functions, including general corporate expenses related to information technology, finance, legal, human resources, internal audit, treasury, tax, investor relations and executive oversight. These expenses have been allocated to the Company on the basis of direct usage, when available, with the remainder allocated on the pro rata basis of revenue, employee headcount, or other measures. We consider the expense methodology and results to be reasonable for all periods presented. However these allocations may not be indicative of the actual expenses that would have been incurred as an independent public company or the costs that may be incurred in the future. The income tax amounts in these unaudited condensed combined financial statements have been calculated based on a separate income tax return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions. RRD maintains various benefit and share-based compensation plans at a corporate level. Donnelley Financial employees participated in those programs and a portion of the cost of those plans is included in Donnelley Financial’s unaudited condensed combined financial statements. However, Donnelley Financial’s unaudited condensed combined balance sheets do not include any equity related to share-based compensation plans. On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. Refer to Note 5, Retirement Plans Share Based Compensation Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Included in the unaudited condensed combined financial statements are net revenues from intercompany sales of $1.1 million and $1.9 million for the three months ended September 30, 2016 and September 30, 2015, respectively, and $3.6 million and $5.8 million for the nine months ended September 30, 2016 and September 30, 2015, respectively. Donnelley Financial utilizes RRD for freight and logistics, production of certain printed products and outsourced business services functions. Included in the unaudited condensed combined financial statements are cost of sales to RRD and affiliates of $20.2 million and $22.2 million for the three months ended September 30, 2016 and September 30, 2015, respectively, and $78.0 million and $89.9 million for the nine months ended September 30, 2016 and September 30, 2015, respectively. Intercompany receivables and payables with RRD are reflected within net parent company investment in the accompanying unaudited condensed combined financial statements. See Note Related Parties, |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 2. Inventories The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at September 30, 2016 and December 31, 2015 were as follows: September 30, December 31, 2016 2015 Raw materials and manufacturing supplies $ 8.1 $ 8.0 Work in process 11.2 9.6 Finished goods 5.8 4.6 Total $ 25.1 $ 22.2 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note 3. Property, Plant and Equipment The components of the Company’s property, plant and equipment at September 30, 2016 and December 31, 2015 were as follows: September 30, December 31, 2016 2015 Land $ 10.0 $ 10.0 Buildings 44.5 44.7 Machinery and equipment 105.7 121.4 160.2 176.1 Less: Accumulated depreciation (127.4 ) (143.1 ) Total $ 32.8 $ 33.0 Depreciation expense was $1.4 million and $1.9 million for the three months ended September 30, 2016 and 2015, respectively, and $6.1 million and $6.8 million for the nine months ended September 30, 2016 and 2015, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 4. Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2016 were as follows: U.S. International Total Net book value as of December 31, 2015 $ 429.2 $ 17.6 $ 446.8 Foreign exchange and other adjustments — — — Net book value as of September 30, 2016 $ 429.2 $ 17.6 $ 446.8 The components of other intangible assets at September 30, 2016 and December 31, 2015 were as follows: September 30, 2016 December 31, 2015 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Amount Amortization Value Amount Amortization Value Customer relationships $ 139.8 $ (82.3 ) $ 57.5 $ 140.2 $ (71.8 ) $ 68.4 Trade names 6.3 (5.5 ) 0.8 6.3 (5.5 ) 0.8 Trademarks, licenses and agreements 3.2 (3.1 ) 0.1 6.2 (6.1 ) 0.1 Total other intangible assets $ 149.3 $ (90.9 ) $ 58.4 $ 152.7 $ (83.4 ) $ 69.3 Amortization expense for other intangible assets was $3.6 million and $3.9 million for the three months ended September 30, 2016 and 2015, respectively, and $10.8 million and $11.7 million for the nine months ended September 30, 2016 and 2015, respectively. The following table outlines the estimated annual amortization expense related to other intangible assets as of September 30, 2016: For the year ending December 31, Amount 2016 $ 14.4 2017 14.4 2018 13.8 2019 13.8 2020 12.4 2021 and thereafter 0.4 Total $ 69.2 |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 5. Retirement Plans Donnelley Financial’s Pension Plans RRD maintained a defined benefit plan (the “plan”) for certain current and former U.S. employees of RRD. Effective December 31, 2013, RRD merged the plan into a separate defined benefit pension plan for Donnelley Financial to create a combined defined benefit pension plan (the “combined plan”). During 2015, the sponsorship of the combined plan was transferred to RRD, which became the legal obligor of the combined plan. Accordingly, the obligations of the combined plan are not reflected in the condensed combined balance sheet of Donnelley Financial as of December 31, 2015. The components of the estimated net pension plan expense (income) for Donnelley Financial’s pension plans for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Pension expense (income) Interest cost $ — $ 36.9 $ — $ 110.5 Expected return on assets — (52.7 ) — (158.0 ) Amortization, net (0.2 ) 9.1 (0.4 ) 27.3 Net pension income $ (0.2 ) $ (6.7 ) $ (0.4 ) $ (20.2 ) Less: income allocated to RRD affiliates — 6.4 — 18.7 Net periodic benefit income, net of allocation $ (0.2 ) $ (0.3 ) $ (0.4 ) $ (1.5 ) On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. The Company’s primary defined benefit plan is frozen. No new employees will be permitted to enter the Company’s frozen plan and participants will earn no additional benefits. Benefits are generally based upon years of service and compensation. These defined benefit retirement income plans are funded in conformity with the applicable government regulations. The Company funds at least the minimum amount required for all funded plans using actuarial cost methods and assumptions acceptable under government regulations. Donnelley Financial’s Participation in RRD’s Pension and Postretirement Benefit Plans RRD provided pension and other postretirement healthcare benefits to certain current and former employees of Donnelley Financial. Prior to the Separation, RRD was responsible for the net benefit plan obligations associated with these plans, and as such, these liabilities are not reflected in Donnelley Financial’s condensed combined balance sheets. Donnelley Financial’s condensed combined statements of operations include expense allocations for these benefits. These allocations were funded through intercompany transactions with RRD which are reflected within net parent company investment in Donnelley Financial. Total RRD pension and postretirement benefit plan net income allocated to Donnelley Financial, related to pension cost and postretirement benefits, was $1.3 million and $1.0 million in the three months ended September 30, 2016 and 2015, respectively, and $4.2 million and $3.0 million in the nine months ended September 30, 2016 and 2015, respectively. Included in these is an allocation for other postretirement benefit plans for $0.3 million and $0.5 million in the three months ended September 30, 2016 and 2015, respectively, and $1.0 million and $1.5 million in the nine months ended September 30, 2016 and 2015, respectively. These allocations are reflected in the Company’s cost of sales and selling, general and administrative expenses. |
Share Based Compensation
Share Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Share Based Compensation [Abstract] | |
Share Based Compensation | Note 6. Share Based Compensation RRD maintained an incentive stock program for the benefit of its officers, directors and certain employees, including certain Donnelley Financial employees. The following disclosures represent the portion of RRD’s program in which Donnelley Financial’s employees and directors participated. RRD’s share-based compensation programs in which Donnelley Financial employees participated included restricted stock units (“RSUs”). Share-based compensation expense includes expense attributable to the Company based on the award terms previously granted to the Company’s employees and an allocation of compensation expense for RRD’s corporate and shared functional employees. As the share-based compensation plans are RRD’s plans, the amounts have been recognized through net parent company investment on the condensed combined balance sheets. Total compensation expense related to all share based compensation plans was $0.2 million and $0.3 million for the three months ended September 30, 2016 and 2015, respectively, and $1.2 million and $1.3 million for the nine months ended September 30, 2016 and 2015, respectively. In connection with the Separation, as of October 1, 2016 employee stock options and restricted stock units were adjusted and converted into new equity awards using a 10-day volume weighted average share price of Donnelley Financial, RRD and LSC, as described in the Separation and Distribution Agreement. Upon the Separation on October 1, 2016, holders of certain RRD stock options and RSUs received awards in Donnelley Financial, RRD and LSC pursuant to the Separation and Distribution Agreement. Converted awards retained the same vesting schedule and expiration date of the original awards. On October 1, 2016, the Company awarded 156,169 shares of restricted stock and 60,748 RSUs to certain employees under the Donnelley Financial Solutions Performance Incentive Plan. 50% of each of the awards of restricted stock and RSUs will vest two years from the grant date and 50% will vest three years from the grant date. Vesting of the restricted stock awards is also subject to performance metrics. Both the restricted stock and RSU awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death or permanent disability of the grantee, termination of the grantee’s employment under certain circumstances or a change in control of the Company. On October 1, 2016, the Company also granted 16,620 restricted stock units to members of the Board of Directors, as a pro-rata portion of their annual equity retainer. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Equity | Note 7. Equity The Company’s equity as of December 31, 2015 and September 30, 2016, and changes during the nine months ended September 30, 2016, were as follows: Accumulated Net Parent Other Company Comprehensive Total Investment Loss Equity Balance at December 31, 2015 $ 639.5 $ (16.0 ) $ 623.5 Net earnings 59.9 — 59.9 Transfers to parent company, net (598.6 ) — (598.6 ) Other comprehensive income — 3.8 3.8 Balance at September 30, 2016 $ 100.8 $ (12.2 ) $ 88.6 Net transfers to parent company during the nine months ended September 30, 2016 included the transfer of $340.2 million of proceeds from borrowings under the Company’s $350.0 million senior secured term loan B facility and a $300.0 million debt exchange with RRD, partially offset by a $29.6 million non-cash settlement of an intercompany note payable and other transfers from RRD. Refer to Note 11, Debt The Company’s equity as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows: Accumulated Net Parent Other Company Comprehensive Total Investment Loss Equity Balance at December 31, 2014 $ 1,025.2 $ (673.7 ) $ 351.5 Net earnings 81.1 — 81.1 Transfers to parent company, net (15.5 ) — (15.5 ) Other comprehensive income — 9.3 9.3 Balance at September 30, 2015 $ 1,090.8 $ (664.4 ) $ 426.4 |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 8. Earnings per Share On October 1, 2016, RRD distributed approximately 26.2 million shares of Donnelley Financial common stock to RRD shareholders in connection with the spin-off of Donnelley Financial, with RRD retaining approximately 6.2 million shares of Donnelley Financial common stock. Holders of RRD common stock received one share of Donnelley Financial for every eight shares of RRD common stock held on September 23, 2016. Basic and diluted earnings per common share and the average number of common shares outstanding were retrospectively restated for the number of Donnelley Financial shares outstanding immediately following this transaction. The same number of shares was used to calculate basic and diluted earnings per share since there were no Donnelley Financial equity awards outstanding prior to the spin-off. Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net earnings $ 10.2 $ 16.8 $ 59.9 $ 81.1 Basic and diluted net earnings per share $ 0.31 $ 0.52 $ 1.85 $ 2.50 Basic and diluted common shares outstanding 32.4 32.4 32.4 32.4 |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Comprehensive Income | Note 9. Comprehensive Income The components of other comprehensive income and income tax expense allocated to each component for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Before Tax Income Tax Net of Tax Before Tax Income Tax Net of Tax Amount Expense Amount Amount Expense Amount Translation adjustments $ 0.2 $ — $ 0.2 $ 4.2 $ — $ 4.2 Adjustment for net periodic pension plan cost (0.2 ) — (0.2 ) (0.4 ) — (0.4 ) Other comprehensive income $ — $ — $ — $ 3.8 $ — $ 3.8 Three Months Ended Nine Months Ended September 30, 2015 September 30, 2015 Before Tax Income Tax Net of Tax Before Tax Income Tax Net of Tax Amount Expense Amount Amount Expense Amount Translation adjustments $ (4.3 ) $ — $ (4.3 ) $ (7.0 ) $ — $ (7.0 ) Adjustment for net periodic pension plan cost 9.1 3.6 5.5 27.3 11.0 16.3 Other comprehensive income $ 4.8 $ 3.6 $ 1.2 $ 20.3 $ 11.0 $ 9.3 Accumulated other comprehensive loss by component as of December 31, 2015 and September 30, 2016, and changes during the nine months ended September 30, 2016, were as follows: Pension Plan Cost Translation Adjustments Total Balance at December 31, 2015 $ — $ (16.0 ) $ (16.0 ) Other comprehensive income before reclassifications — 4.2 4.2 Amounts reclassified from accumulated other comprehensive loss (0.4 ) — (0.4 ) Net change in accumulated other comprehensive loss (0.4 ) 4.2 3.8 Balance at September 30, 2016 $ (0.4 ) $ (11.8 ) $ (12.2 ) Accumulated other comprehensive loss by component as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows: Pension Plan Cost Translation Adjustments Total Balance at December 31, 2014 $ (665.2 ) $ (8.5 ) $ (673.7 ) Other comprehensive loss before reclassifications — (7.0 ) (7.0 ) Amounts reclassified from accumulated other comprehensive loss 16.3 — 16.3 Net change in accumulated other comprehensive loss 16.3 (7.0 ) 9.3 Balance at September 30, 2015 $ (648.9 ) $ (15.5 ) $ (664.4 ) Reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended Nine Months Ended Classification in the September 30, September 30, Condensed Combined 2016 2015 2016 2015 Statements of Operations Amortization of pension plan cost: Net actuarial (loss) income $ (0.2 ) $ 9.1 $ (0.4 ) $ 27.3 (a) Reclassifications before tax (0.2 ) 9.1 (0.4 ) 27.3 Income tax expense — 3.6 — 11.0 Reclassifications, net of tax $ (0.2 ) $ 5.5 $ (0.4 ) $ 16.3 (a) These accumulated other comprehensive (loss) income components are included in the calculation of net periodic pension (income) expense, a component of which was allocated to Donnelley Financial, and recognized in cost of sales and selling, general and administrative expenses in the condensed combined statements of operations (see Note 5, Retirement Plans |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Note 10. Segment Information The Company’s segments are summarized below: United States The U.S. segment serves capital market and investment market clients in the U.S. by delivering products and services to help create, manage, and deliver, accurate and timely financial communications to investors and regulators. The Company also provides virtual data rooms to facilitate the deal management requirements of capital markets and mergers and acquisitions transactions, and provides data and analytics services that help professionals uncover intelligence from disclosures contained within public filings made with the SEC. The U.S segment also includes language solutions capabilities, through which the Company can translate documents and create content in up to 140 different languages for its clients, and commercial print. International The International segment includes the Company’s operations in Asia, Europe, Latin America, Australia and Canada. The international business is primarily focused on working with international capital markets clients on capital markets offerings and regulatory compliance related activities into or within the United States. In addition, the international segment provides language translation services. Corporate Corporate consists of unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, communications and certain facility costs. In addition, certain costs and earnings of employee benefit plans, such as pension and other postretirement benefit plan expense (income) and allocated costs for share-based compensation, are included in Corporate and not allocated to the operating segments. Information by Segment The Company has disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Company’s chief operating decision-maker and is most consistent with the presentation of profitability reported within the condensed combined financial statements. Income Depreciation Total Intersegment Net from and Capital Sales Sales Sales Operations Amortization Expenditures Three Months Ended September 30, 2016 U.S. $ 193.6 $ (1.3 ) $ 192.3 $ 18.7 $ 8.5 $ 1.3 International 33.2 (1.1 ) 32.1 1.1 1.1 — Total operating segments 226.8 (2.4 ) 224.4 19.8 9.6 1.3 Corporate — — — (1.8 ) 0.2 0.4 Total operations $ 226.8 $ (2.4 ) $ 224.4 $ 18.0 $ 9.8 $ 1.7 Income Depreciation Total Intersegment Net from and Capital Sales Sales Sales Operations Amortization Expenditures Three Months Ended September 30, 2015 U.S. $ 203.3 $ (1.7 ) $ 201.6 $ 28.2 $ 9.1 $ 5.7 International 30.6 (0.6 ) 30.0 0.2 1.1 0.4 Total operating segments 233.9 (2.3 ) 231.6 28.4 10.2 6.1 Corporate — — — (0.2 ) 0.1 — Total operations $ 233.9 $ (2.3 ) $ 231.6 $ 28.2 $ 10.3 $ 6.1 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Nine Months Ended September 30, 2016 U.S. $ 666.4 $ (4.0 ) $ 662.4 $ 100.0 $ 714.2 $ 26.2 $ 10.2 International 103.9 (3.8 ) 100.1 7.2 99.9 3.2 1.2 Total operating segments 770.3 (7.8 ) 762.5 107.2 814.1 29.4 11.4 Corporate — — — (7.7 ) 99.9 0.7 2.6 Total operations $ 770.3 $ (7.8 ) $ 762.5 $ 99.5 $ 914.0 $ 30.1 $ 14.0 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Nine Months Ended September 30, 2015 U.S. $ 708.8 $ (6.6 ) $ 702.2 $ 128.6 $ 693.5 $ 28.4 $ 16.1 International 110.5 (1.8 ) 108.7 10.0 92.7 3.3 0.8 Total operating segments 819.3 (8.4 ) 810.9 138.6 786.2 31.7 16.9 Corporate — — — (4.0 ) 200.4 0.3 — Total operations $ 819.3 $ (8.4 ) $ 810.9 $ 134.6 $ 986.6 $ 32.0 $ 16.9 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Note 11. Debt On September 30, 2016, in connection with the Separation, the Company entered into a $350.0 million senior secured term loan B facility (the “Term Loan Credit Facility”) and a $300.0 million senior secured revolving credit facility (the “Revolving Facility,” and, together with the Term Loan Credit Facility, the “Credit Agreement”). The Credit Agreement is subject to a number of covenants, including a minimum Interest Coverage Ratio and a maximum Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $15.0 million in aggregate. As of September 30, 2016, there were no borrowings under the Revolving Facility. On September 30, 2016, also in connection with the Separation, the Company issued $300.0 million of 8.25% senior unsecured notes due October 15, 2024 (the “Notes”). Interest on the Notes is payable semi-annually on April 15 and October 15, commencing on April 15, 2017. The issuance of the Notes was part of a debt exchange that resulted in the settlement of certain of RRD's bonds. In connection with the offering of the Notes, the Company entered into a registration rights agreement, dated as of September 30, 2016 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the SEC with respect to an offer to exchange the Notes for registered notes which will have terms identical in all material respects to the Notes except that the registered notes will not contain terms that provide for restrictions on transfer, and use its reasonable best efforts to cause the exchange offer registration statement to be declared effective by the SEC by June 27, 2017. In certain circumstances, the Company may be required to file a shelf registration statement with the SEC registering the resale of the Notes by the holders thereof, in lieu of an exchange offer to such holders. The Company will be required to pay specified additional interest on the Notes if it fails to comply with its registration obligations under the Registration Rights Agreement. During the third quarter of 2016, the Company settled an intercompany note payable with RRD. Refer to Note 13, Related Parties The Company’s debt as of September 30, 2016 and December 31, 2015 consisted of the following: September 30, December 31, 2016 2015 Term Loan Credit Facility $ 348.2 $ — 8.25% senior notes due October 15, 2024 300.0 — Other — 8.8 Unamortized debt issuance costs (11.7 ) — Total debt 636.5 8.8 Less: current portion (17.1 ) (8.8 ) Long-term debt $ 619.4 $ — The fair value of the senior notes, which was determined using the market approach based upon interest rates available to the Company for borrowings with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. As of September 30, 2016, the fair value of the Company’s debt was equivalent to its book value. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Litigation From time to time, the Company’s customers and others file voluntary petitions for reorganization under United States bankruptcy laws. In such cases, certain pre-petition payments received by the Company from these parties could be considered preference items and subject to return. In addition, the Company may be party to certain litigation arising in the ordinary course of business. Management believes that the final resolution of these preference items and litigation will not have a material effect on the Company’s combined results of operations, financial position or cash flows. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 13. Related Parties Transition Services Agreements In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company and the Company agrees to provide certain services to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization. Commercial Arrangements The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients. Stockholder and Registration Rights Agreement The Company and RRD entered into a Stockholder and Registration Rights Agreement with respect to the Company’s common stock retained by RRD pursuant to which the Company agrees that, upon the request of RRD, the Company will use its reasonable best efforts to effect the registration under applicable federal and state securities laws of the shares of the Company’s common stock retained by RRD after the Separation. In addition, RRD granted the Company a proxy to vote the shares of the Company’s common stock that RRD retained immediately after the Separation in proportion to the votes cast by the Company’s other stockholders. This proxy, however, will be automatically revoked as to a particular share upon any sale or transfer of such share from RRD to a person other than RRD, and neither the voting agreement nor the proxy will limit or prohibit any such sale or transfer. Allocations from RRD RRD provided Donnelley Financial with certain services, which include, but are not limited to information technology, finance, legal, human resources, internal audit, treasury, tax, investor relations and executive oversight. The financial information in these condensed combined financial statements does not necessarily include all the expenses that would have been incurred had Donnelley Financial been a separate, standalone entity for all periods presented. RRD charges Donnelley Financial for these services based on direct usage when possible. When specific identification is not practicable, the pro rata basis of revenue or employee headcount, or some other measure is used. These allocations were reflected as follows in the condensed combined financial statements: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Costs of goods sold allocation $ 8.3 $ 9.5 $ 28.0 $ 29.2 Selling, general and administrative allocation 38.3 38.9 129.4 126.9 Depreciation and amortization 5.3 5.2 15.2 16.7 Total allocations from RRD $ 51.9 $ 53.6 $ 172.6 $ 172.8 The Company considers the expense methodology and results to be reasonable for all periods presented. However, these allocations may not be indicative of the actual expenses that the Company would have incurred as an independent public company or the costs it may incur in the future. Related Party Revenues Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Net revenues from intercompany sales of $1.1 million and $1.9 million for three months ended September 30, 2016 and 2015, respectively, and $3.6 million and $5.8 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statement of operations. Related Party Purchases Donnelley Financial utilizes RRD for freight and logistics and services as well as certain production of printed products. Cost of sales of $11.5 million and $12.9 million for the three months ended September 30, 2016 and 2015, respectively, and $48.6 million and $58.4 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statements of operations for these purchases. Donnelley Financial also utilizes RRD’s business process outsourcing business for certain composition, XBRL and other functions. Cost of sales of $8.7 million and $9.3 million for the three months ended September 30, 2016 and 2015, respectively, and $29.4 million and $31.5 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statements of operations for these purchases. Intercompany payables with RRD and affiliates for these purchases are reflected within net parent company investment in the condensed combined financial statements. Share-Based Compensation Certain Donnelley Financial employees participate in RRD’s share-based compensation plans, the costs of which have been allocated to Donnelley Financial and recorded in selling, general and administrative expenses in the combined statements of operations. Share-based compensation costs allocated to the Company were $1.2 million and $1.3 million for the nine months ended Retirement Plans Donnelley Financial employees participated in pension and other postretirement plans sponsored by RRD. These costs are reflected in the Company’s cost of sales and selling, general and administrative expenses in the condensed combined statements of operations. These costs were funded through intercompany transactions with RRD which are reflected within the net parent company investment. On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. Refer to Note 5 , Retirement Plans Cash and Cash Equivalents RRD uses a centralized approach to cash management and financing of operations. The majority of the Company’s foreign subsidiaries were party to RRD’s international cash pooling arrangements to maximize the availability of cash for general operating and investing purposes. As part of RRD’s centralized cash management process, cash balances were swept regularly from the Company’s accounts. Cash transfers to and from RRD’s cash concentration accounts and the resulting balances at the end of each reporting period are reflected in net parent company investment in the condensed In accordance with the Separation and Distribution Agreement, there will be a cash adjustment payable to or receivable from RRD for the September 30, 2016 cash balance greater or less than an agreed-upon target cash balance of $50.0 million as defined in the Separation and Distribution Agreement. The Separation and Distribution A Debt RRD’s third party debt and related interest expense have not been allocated to the Company for any of the periods presented as the Company was not the legal obligor of the debt and the borrowings were not directly related to the Company’s business. An intercompany note payable with RRD at December 31, 2015 is presented in the accompanying condensed combined balance sheets. During the third quarter of 2016, the Company recorded a $29.6 million non-cash settlement related to this intercompany note payable. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Pronouncements | Note 14. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting. For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and direct financing leases. The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted; however the Company plans to adopt the standard in the first quarter of 2019. The Company is evaluating the impact of ASU 2016-02. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which outlines a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 also requires additional quantitative and qualitative disclosures. In August 2015, the FASB issued Accounting Standards Update No. 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date of ASU 2014-09 to January 1, 2018. Early adoption of ASU 2014-09 is permitted in the first quarter of 2017. However, the Company plans to adopt the standard in the first quarter of 2018. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or a modified retrospective adoption, meaning the standard is applied only to the most current period. The Company is evaluating the impact of the provisions of ASU 2014-09 and currently anticipates applying the modified retrospective approach when adopting the standard. The following standards were effective for and adopted by the Company in 2016. The adoption of these standards did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows: • Accounting Standards Update No. 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” • Accounting Standards Update No. 2015-07 “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” • Accounting Standards Update No. 2015-04 “Compensation—Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets” • Accounting Standards Update No. 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis” • Accounting Standards Update No. 2015-01 “Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at September 30, 2016 and December 31, 2015 were as follows: September 30, December 31, 2016 2015 Raw materials and manufacturing supplies $ 8.1 $ 8.0 Work in process 11.2 9.6 Finished goods 5.8 4.6 Total $ 25.1 $ 22.2 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property Plant And Equipment [Abstract] | |
Components of Company's Property, Plant and Equipment | The components of the Company’s property, plant and equipment at September 30, 2016 and December 31, 2015 were as follows: September 30, December 31, 2016 2015 Land $ 10.0 $ 10.0 Buildings 44.5 44.7 Machinery and equipment 105.7 121.4 160.2 176.1 Less: Accumulated depreciation (127.4 ) (143.1 ) Total $ 32.8 $ 33.0 |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2016 were as follows: U.S. International Total Net book value as of December 31, 2015 $ 429.2 $ 17.6 $ 446.8 Foreign exchange and other adjustments — — — Net book value as of September 30, 2016 $ 429.2 $ 17.6 $ 446.8 |
Components of Other Intangible Assets | The components of other intangible assets at September 30, 2016 and December 31, 2015 were as follows: September 30, 2016 December 31, 2015 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Amount Amortization Value Amount Amortization Value Customer relationships $ 139.8 $ (82.3 ) $ 57.5 $ 140.2 $ (71.8 ) $ 68.4 Trade names 6.3 (5.5 ) 0.8 6.3 (5.5 ) 0.8 Trademarks, licenses and agreements 3.2 (3.1 ) 0.1 6.2 (6.1 ) 0.1 Total other intangible assets $ 149.3 $ (90.9 ) $ 58.4 $ 152.7 $ (83.4 ) $ 69.3 |
Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets | The following table outlines the estimated annual amortization expense related to other intangible assets as of September 30, 2016: For the year ending December 31, Amount 2016 $ 14.4 2017 14.4 2018 13.8 2019 13.8 2020 12.4 2021 and thereafter 0.4 Total $ 69.2 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Estimated Net Pension Plan Expense (Income) | The components of the estimated net pension plan expense (income) for Donnelley Financial’s pension plans for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Pension expense (income) Interest cost $ — $ 36.9 $ — $ 110.5 Expected return on assets — (52.7 ) — (158.0 ) Amortization, net (0.2 ) 9.1 (0.4 ) 27.3 Net pension income $ (0.2 ) $ (6.7 ) $ (0.4 ) $ (20.2 ) Less: income allocated to RRD affiliates — 6.4 — 18.7 Net periodic benefit income, net of allocation $ (0.2 ) $ (0.3 ) $ (0.4 ) $ (1.5 ) |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of the Company's Equity Activity | The Company’s equity as of December 31, 2015 and September 30, 2016, and changes during the nine months ended September 30, 2016, were as follows: Accumulated Net Parent Other Company Comprehensive Total Investment Loss Equity Balance at December 31, 2015 $ 639.5 $ (16.0 ) $ 623.5 Net earnings 59.9 — 59.9 Transfers to parent company, net (598.6 ) — (598.6 ) Other comprehensive income — 3.8 3.8 Balance at September 30, 2016 $ 100.8 $ (12.2 ) $ 88.6 The Company’s equity as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows: Accumulated Net Parent Other Company Comprehensive Total Investment Loss Equity Balance at December 31, 2014 $ 1,025.2 $ (673.7 ) $ 351.5 Net earnings 81.1 — 81.1 Transfers to parent company, net (15.5 ) — (15.5 ) Other comprehensive income — 9.3 9.3 Balance at September 30, 2015 $ 1,090.8 $ (664.4 ) $ 426.4 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings per Common Share and the Average Number of Common Shares Outstanding | Basic and diluted earnings per common share and the average number of common shares outstanding were retrospectively restated for the number of Donnelley Financial shares outstanding immediately following this transaction. The same number of shares was used to calculate basic and diluted earnings per share since there were no Donnelley Financial equity awards outstanding prior to the spin-off. Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net earnings $ 10.2 $ 16.8 $ 59.9 $ 81.1 Basic and diluted net earnings per share $ 0.31 $ 0.52 $ 1.85 $ 2.50 Basic and diluted common shares outstanding 32.4 32.4 32.4 32.4 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of Components of Other Comprehensive Income and Income Tax Expense Allocated to Each Component | The components of other comprehensive income and income tax expense allocated to each component for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Before Tax Income Tax Net of Tax Before Tax Income Tax Net of Tax Amount Expense Amount Amount Expense Amount Translation adjustments $ 0.2 $ — $ 0.2 $ 4.2 $ — $ 4.2 Adjustment for net periodic pension plan cost (0.2 ) — (0.2 ) (0.4 ) — (0.4 ) Other comprehensive income $ — $ — $ — $ 3.8 $ — $ 3.8 Three Months Ended Nine Months Ended September 30, 2015 September 30, 2015 Before Tax Income Tax Net of Tax Before Tax Income Tax Net of Tax Amount Expense Amount Amount Expense Amount Translation adjustments $ (4.3 ) $ — $ (4.3 ) $ (7.0 ) $ — $ (7.0 ) Adjustment for net periodic pension plan cost 9.1 3.6 5.5 27.3 11.0 16.3 Other comprehensive income $ 4.8 $ 3.6 $ 1.2 $ 20.3 $ 11.0 $ 9.3 |
Schedule of Changes in Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss by component as of December 31, 2015 and September 30, 2016, and changes during the nine months ended September 30, 2016, were as follows: Pension Plan Cost Translation Adjustments Total Balance at December 31, 2015 $ — $ (16.0 ) $ (16.0 ) Other comprehensive income before reclassifications — 4.2 4.2 Amounts reclassified from accumulated other comprehensive loss (0.4 ) — (0.4 ) Net change in accumulated other comprehensive loss (0.4 ) 4.2 3.8 Balance at September 30, 2016 $ (0.4 ) $ (11.8 ) $ (12.2 ) Accumulated other comprehensive loss by component as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows: Pension Plan Cost Translation Adjustments Total Balance at December 31, 2014 $ (665.2 ) $ (8.5 ) $ (673.7 ) Other comprehensive loss before reclassifications — (7.0 ) (7.0 ) Amounts reclassified from accumulated other comprehensive loss 16.3 — 16.3 Net change in accumulated other comprehensive loss 16.3 (7.0 ) 9.3 Balance at September 30, 2015 $ (648.9 ) $ (15.5 ) $ (664.4 ) |
Reclassifications from Accumulated Other Comprehensive Loss, Amortization of Pension Plan Cost | Reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended Nine Months Ended Classification in the September 30, September 30, Condensed Combined 2016 2015 2016 2015 Statements of Operations Amortization of pension plan cost: Net actuarial (loss) income $ (0.2 ) $ 9.1 $ (0.4 ) $ 27.3 (a) Reclassifications before tax (0.2 ) 9.1 (0.4 ) 27.3 Income tax expense — 3.6 — 11.0 Reclassifications, net of tax $ (0.2 ) $ 5.5 $ (0.4 ) $ 16.3 (a) These accumulated other comprehensive (loss) income components are included in the calculation of net periodic pension (income) expense, a component of which was allocated to Donnelley Financial, and recognized in cost of sales and selling, general and administrative expenses in the condensed combined statements of operations (see Note 5, Retirement Plans |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The Company has disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Company’s chief operating decision-maker and is most consistent with the presentation of profitability reported within the condensed combined financial statements. Income Depreciation Total Intersegment Net from and Capital Sales Sales Sales Operations Amortization Expenditures Three Months Ended September 30, 2016 U.S. $ 193.6 $ (1.3 ) $ 192.3 $ 18.7 $ 8.5 $ 1.3 International 33.2 (1.1 ) 32.1 1.1 1.1 — Total operating segments 226.8 (2.4 ) 224.4 19.8 9.6 1.3 Corporate — — — (1.8 ) 0.2 0.4 Total operations $ 226.8 $ (2.4 ) $ 224.4 $ 18.0 $ 9.8 $ 1.7 Income Depreciation Total Intersegment Net from and Capital Sales Sales Sales Operations Amortization Expenditures Three Months Ended September 30, 2015 U.S. $ 203.3 $ (1.7 ) $ 201.6 $ 28.2 $ 9.1 $ 5.7 International 30.6 (0.6 ) 30.0 0.2 1.1 0.4 Total operating segments 233.9 (2.3 ) 231.6 28.4 10.2 6.1 Corporate — — — (0.2 ) 0.1 — Total operations $ 233.9 $ (2.3 ) $ 231.6 $ 28.2 $ 10.3 $ 6.1 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Nine Months Ended September 30, 2016 U.S. $ 666.4 $ (4.0 ) $ 662.4 $ 100.0 $ 714.2 $ 26.2 $ 10.2 International 103.9 (3.8 ) 100.1 7.2 99.9 3.2 1.2 Total operating segments 770.3 (7.8 ) 762.5 107.2 814.1 29.4 11.4 Corporate — — — (7.7 ) 99.9 0.7 2.6 Total operations $ 770.3 $ (7.8 ) $ 762.5 $ 99.5 $ 914.0 $ 30.1 $ 14.0 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Nine Months Ended September 30, 2015 U.S. $ 708.8 $ (6.6 ) $ 702.2 $ 128.6 $ 693.5 $ 28.4 $ 16.1 International 110.5 (1.8 ) 108.7 10.0 92.7 3.3 0.8 Total operating segments 819.3 (8.4 ) 810.9 138.6 786.2 31.7 16.9 Corporate — — — (4.0 ) 200.4 0.3 — Total operations $ 819.3 $ (8.4 ) $ 810.9 $ 134.6 $ 986.6 $ 32.0 $ 16.9 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of the Company's Debt | The Company’s debt as of September 30, 2016 and December 31, 2015 consisted of the following: September 30, December 31, 2016 2015 Term Loan Credit Facility $ 348.2 $ — 8.25% senior notes due October 15, 2024 300.0 — Other — 8.8 Unamortized debt issuance costs (11.7 ) — Total debt 636.5 8.8 Less: current portion (17.1 ) (8.8 ) Long-term debt $ 619.4 $ — |
Related Parties (Tables)
Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Allocation of Expenses Reflected in Condensed Combined Financial Statements | These allocations were reflected as follows in the condensed combined financial statements: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Costs of goods sold allocation $ 8.3 $ 9.5 $ 28.0 $ 29.2 Selling, general and administrative allocation 38.3 38.9 129.4 126.9 Depreciation and amortization 5.3 5.2 15.2 16.7 Total allocations from RRD $ 51.9 $ 53.6 $ 172.6 $ 172.8 |
Overview and Basis of Present32
Overview and Basis of Presentation - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Oct. 01, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Distribution of common shares during spinoff | 26.2 | 26.2 | |||
Percentage of distribution of common shares during spinoff | 80.75% | 80.75% | |||
Description of distribution of common shares during spinoff | Holders of RRD common stock received one share of Donnelley Financial common stock for every eight shares of RRD common stock held on September 23, 2016. | ||||
Net Sales | $ 224.4 | $ 231.6 | $ 762.5 | $ 810.9 | |
Transition Services Agreements | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Intercompany agreements, description | In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company and the Company agrees to provide certain services to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization. | ||||
Term of agreement | 24 months | ||||
Commercial and Other Arrangements | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Intercompany agreements, description | The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients. | ||||
Term of agreement | 24 months | ||||
R.R. Donnelley & Sons Company | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Net Sales | 1.1 | 1.9 | $ 3.6 | 5.8 | |
R.R. Donnelley & Sons Company | Subsequent Event | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Distribution of common shares during spinoff | 26.2 | ||||
Number of common stock retained | 6.2 | ||||
Ownership percentage | 19.25% | ||||
Net pension plan liabilities | $ 68.3 | ||||
Total benefit plan liability | 317 | ||||
Plan assets, fair market value | $ 248.7 | ||||
RRD Affiliates | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Cost of sales to RRD and affiliates | $ 20.2 | $ 22.2 | $ 78 | $ 89.9 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Net [Abstract] | ||
Raw materials and manufacturing supplies | $ 8.1 | $ 8 |
Work in process | 11.2 | 9.6 |
Finished goods | 5.8 | 4.6 |
Total | $ 25.1 | $ 22.2 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Company's Property, Plant and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Property Plant And Equipment [Abstract] | ||
Land | $ 10 | $ 10 |
Buildings | 44.5 | 44.7 |
Machinery and equipment | 105.7 | 121.4 |
Property, plant and equipment, gross | 160.2 | 176.1 |
Less: Accumulated depreciation | (127.4) | (143.1) |
Total | $ 32.8 | $ 33 |
Property, Plant and Equipment35
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation expense | $ 1.4 | $ 1.9 | $ 6.1 | $ 6.8 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets - Schedule of Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Line Items] | |
Goodwill net book value, beginning balance | $ 446.8 |
Foreign exchange and other adjustments | 0 |
Goodwill net book value, ending balance | 446.8 |
U.S. | |
Goodwill [Line Items] | |
Goodwill net book value, beginning balance | 429.2 |
Foreign exchange and other adjustments | 0 |
Goodwill net book value, ending balance | 429.2 |
International | |
Goodwill [Line Items] | |
Goodwill net book value, beginning balance | 17.6 |
Foreign exchange and other adjustments | 0 |
Goodwill net book value, ending balance | $ 17.6 |
Goodwill and Other Intangible37
Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 149.3 | $ 152.7 |
Accumulated Amortization | (90.9) | (83.4) |
Net Book Value | 58.4 | 69.3 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 139.8 | 140.2 |
Accumulated Amortization | (82.3) | (71.8) |
Net Book Value | 57.5 | 68.4 |
Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6.3 | 6.3 |
Accumulated Amortization | (5.5) | (5.5) |
Net Book Value | 0.8 | 0.8 |
Trademarks, Licenses and Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3.2 | 6.2 |
Accumulated Amortization | (3.1) | (6.1) |
Net Book Value | $ 0.1 | $ 0.1 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for other intangible assets | $ 3.6 | $ 3.9 | $ 10.8 | $ 11.7 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets - Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets (Detail) $ in Millions | Sep. 30, 2016USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,016 | $ 14.4 |
2,017 | 14.4 |
2,018 | 13.8 |
2,019 | 13.8 |
2,020 | 12.4 |
2021 and thereafter | 0.4 |
Total | $ 69.2 |
Retirement Plans - Components o
Retirement Plans - Components of Estimated Net Pension and Other Postretirement Benefit Plan Expense (Income) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension expense (income) | ||||
Interest cost | $ 0 | $ 36.9 | $ 0 | $ 110.5 |
Expected return on assets | 0 | (52.7) | 0 | (158) |
Amortization, net | (0.2) | 9.1 | (0.4) | 27.3 |
Net pension income | (0.2) | (6.7) | (0.4) | (20.2) |
Less: income allocated to RRD affiliates | 0 | 6.4 | 0 | 18.7 |
Net periodic benefit income, net of allocation | $ (0.2) | $ (0.3) | $ (0.4) | $ (1.5) |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Details) - R.R. Donnelley & Sons Company - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Oct. 01, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension cost and other postretirement benefits | $ 1.3 | $ 1 | $ 4.2 | $ 3 | |
Other Postretirement Benefit Plan | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension cost and other postretirement benefits | $ 0.3 | $ 0.5 | $ 1 | $ 1.5 | |
Subsequent Event | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Net pension plan liabilities | $ 68.3 | ||||
Total benefit plan liability | 317 | ||||
Plan assets, fair market value | $ 248.7 |
Share Based Compensation - Addi
Share Based Compensation - Additional Information (Details) - USD ($) $ in Millions | Oct. 01, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation | $ 0.2 | $ 0.3 | $ 1.2 | $ 1.3 | |
Share-based compensation award, description | In connection with the Separation, as of October 1, 2016 employee stock options and restricted stock units were adjusted and converted into new equity awards using a 10-day volume weighted average share price of Donnelley Financial, RRD and LSC, as described in the Separation and Distribution Agreement. Upon the Separation on October 1, 2016, holders of certain RRD stock options and RSUs received awards in Donnelley Financial, RRD and LSC pursuant to the Separation and Distribution Agreement. Converted awards retained the same vesting schedule and expiration date of the original awards. | ||||
Subsequent Event | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, volume weighted average share price, measurement period | 10 days | ||||
Subsequent Event | Restricted Stock | Performance Incentive Plan | Share-based Compensation Award, Tranche One | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, vesting percentage | 50.00% | ||||
Share-based compensation award, vesting period | 2 years | ||||
Subsequent Event | Restricted Stock | Performance Incentive Plan | Share-based Compensation Award, Tranche Two | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, vesting percentage | 50.00% | ||||
Share-based compensation award, vesting period | 3 years | ||||
Subsequent Event | Restricted Stock | Performance Incentive Plan | Certain Employees | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, granted | 156,169 | ||||
Subsequent Event | RSUs | Performance Incentive Plan | Share-based Compensation Award, Tranche One | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, vesting percentage | 50.00% | ||||
Share-based compensation award, vesting period | 2 years | ||||
Subsequent Event | RSUs | Performance Incentive Plan | Share-based Compensation Award, Tranche Two | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, vesting percentage | 50.00% | ||||
Share-based compensation award, vesting period | 3 years | ||||
Subsequent Event | RSUs | Performance Incentive Plan | Certain Employees | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, granted | 60,748 | ||||
Subsequent Event | RSUs | Performance Incentive Plan | Board of Directors | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, granted | 16,620 |
Equity - Schedule of the Compan
Equity - Schedule of the Company's Equity Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity [Line Items] | ||||
Beginning Balance | $ 623.5 | $ 351.5 | ||
Net earnings | $ 10.2 | $ 16.8 | 59.9 | 81.1 |
Transfers to parent company, net | (598.6) | (15.5) | ||
Other comprehensive income | 0 | 1.2 | 3.8 | 9.3 |
Ending Balance | 88.6 | 426.4 | 88.6 | 426.4 |
Net Parent Company Investment | ||||
Equity [Line Items] | ||||
Beginning Balance | 639.5 | 1,025.2 | ||
Net earnings | 59.9 | 81.1 | ||
Transfers to parent company, net | (598.6) | (15.5) | ||
Other comprehensive income | 0 | 0 | ||
Ending Balance | 100.8 | 1,090.8 | 100.8 | 1,090.8 |
Accumulated Other Comprehensive Loss | ||||
Equity [Line Items] | ||||
Beginning Balance | (16) | (673.7) | ||
Net earnings | 0 | 0 | ||
Transfers to parent company, net | 0 | 0 | ||
Other comprehensive income | 3.8 | 9.3 | ||
Ending Balance | $ (12.2) | $ (664.4) | $ (12.2) | $ (664.4) |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Equity [Line Items] | ||
Net transfers to parent company, exchange of debt | $ 300,000,000 | $ 0 |
Non-cash settlement of intercompany note payable and other transfers | 29,600,000 | $ 0 |
Senior Secured Term Loan B Facility | ||
Equity [Line Items] | ||
Net transfers to parent company, credit facility | 350,000,000 | |
R.R. Donnelley & Sons Company | ||
Equity [Line Items] | ||
Net transfers to parent company, exchange of debt | 300,000,000 | |
Non-cash settlement of intercompany note payable and other transfers | 29,600,000 | |
R.R. Donnelley & Sons Company | Senior Secured Term Loan B Facility | ||
Equity [Line Items] | ||
Net transfers to parent company, borrowings | $ 340,200,000 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) shares in Millions | Oct. 01, 2016shares | Sep. 30, 2016shares |
Earnings Per Share [Line Items] | ||
Distribution of common shares during spinoff | 26.2 | |
R.R. Donnelley & Sons Company | Spinoff | ||
Earnings Per Share [Line Items] | ||
Common stock received during spinoff, description | Holders of RRD common stock received one share of Donnelley Financial for every eight shares of RRD common stock held on September 23, 2016. | |
Subsequent Event | R.R. Donnelley & Sons Company | ||
Earnings Per Share [Line Items] | ||
Distribution of common shares during spinoff | 26.2 | |
Number of common stock retained | 6.2 | |
Subsequent Event | R.R. Donnelley & Sons Company | Spinoff | ||
Earnings Per Share [Line Items] | ||
Number of common stock retained | 6.2 | |
Conversion ratio of common stock received during spinoff | 0.125 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Basic and Diluted Earnings per Common Share and the Average Number of Common Shares Outstanding (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 10.2 | $ 16.8 | $ 59.9 | $ 81.1 |
Basic and diluted net earnings per share | $ 0.31 | $ 0.52 | $ 1.85 | $ 2.50 |
Basic and diluted common shares outstanding | 32.4 | 32.4 | 32.4 | 32.4 |
Comprehensive Income - Schedule
Comprehensive Income - Schedule of Components of Other Comprehensive Income and Income Tax Expense Allocated to Each Component (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income, Before Tax Amount | $ 0 | $ 4.8 | $ 3.8 | $ 20.3 |
Other comprehensive (loss) income, Income Tax Expense | 0 | 3.6 | 0 | 11 |
Other comprehensive income | 0 | 1.2 | 3.8 | 9.3 |
Translation adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income, Before Tax Amount | 0.2 | (4.3) | 4.2 | (7) |
Other comprehensive (loss) income, Income Tax Expense | 0 | 0 | 0 | 0 |
Other comprehensive income | 0.2 | (4.3) | 4.2 | (7) |
Adjustment for net periodic pension plan cost | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income, Before Tax Amount | (0.2) | 9.1 | (0.4) | 27.3 |
Other comprehensive (loss) income, Income Tax Expense | 0 | 3.6 | 0 | 11 |
Other comprehensive income | $ (0.2) | $ 5.5 | $ (0.4) | $ 16.3 |
Comprehensive Income - Schedu48
Comprehensive Income - Schedule of Components of Other Comprehensive (Loss) Income and Income Tax Expense Allocated to Each Component (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income, Before Tax Amount | $ 0 | $ 4.8 | $ 3.8 | $ 20.3 |
Other comprehensive (loss) income, Income Tax Expense | 0 | 3.6 | 0 | 11 |
Other comprehensive income | 0 | 1.2 | 3.8 | 9.3 |
Translation adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income, Before Tax Amount | 0.2 | (4.3) | 4.2 | (7) |
Other comprehensive (loss) income, Income Tax Expense | 0 | 0 | 0 | 0 |
Other comprehensive income | 0.2 | (4.3) | 4.2 | (7) |
Adjustment for net periodic pension plan cost | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income, Before Tax Amount | (0.2) | 9.1 | (0.4) | 27.3 |
Other comprehensive (loss) income, Income Tax Expense | 0 | 3.6 | 0 | 11 |
Other comprehensive income | $ (0.2) | $ 5.5 | $ (0.4) | $ 16.3 |
Comprehensive Income - Schedu49
Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | $ 623.5 | $ 351.5 | ||
Other comprehensive income | $ 0 | $ 1.2 | 3.8 | 9.3 |
Ending Balance | 88.6 | 426.4 | 88.6 | 426.4 |
Pension Plan Cost | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | 0 | (665.2) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | (0.4) | 16.3 | ||
Other comprehensive income | (0.2) | 5.5 | (0.4) | 16.3 |
Ending Balance | (0.4) | (648.9) | (0.4) | (648.9) |
Translation adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (16) | (8.5) | ||
Other comprehensive income (loss) before reclassifications | 4.2 | (7) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Other comprehensive income | 0.2 | (4.3) | 4.2 | (7) |
Ending Balance | (11.8) | (15.5) | (11.8) | (15.5) |
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (16) | (673.7) | ||
Other comprehensive income (loss) before reclassifications | 4.2 | (7) | ||
Amounts reclassified from accumulated other comprehensive loss | (0.4) | 16.3 | ||
Other comprehensive income | 3.8 | 9.3 | ||
Ending Balance | $ (12.2) | $ (664.4) | $ (12.2) | $ (664.4) |
Comprehensive Income - Reclassi
Comprehensive Income - Reclassifications from Accumulated Other Comprehensive Loss Amortization of Pension Plan Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Accumulated Defined Benefit Plans Adjustment, Net Actuarial (Loss) Income | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of pension and other postretirement benefits plan cost: Reclassifications before tax | [1] | $ (0.2) | $ 9.1 | $ (0.4) | $ 27.3 |
Pension Plan Cost | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of pension and other postretirement benefits plan cost: Reclassifications before tax | (0.2) | 9.1 | (0.4) | 27.3 | |
Income tax expense | 0 | 3.6 | 0 | 11 | |
Reclassifications, net of tax | $ (0.2) | $ 5.5 | $ (0.4) | $ 16.3 | |
[1] | These accumulated other comprehensive (loss) income components are included in the calculation of net periodic pension (income) expense, a component of which was allocated to Donnelley Financial, and recognized in cost of sales and selling, general and administrative expenses in the condensed combined statements of operations (see Note 5, Retirement Plans). |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 224.4 | $ 231.6 | $ 762.5 | $ 810.9 | |
Income (Loss) from Operations | 18 | 28.2 | 99.5 | 134.6 | |
Assets of Operations | 914 | 986.6 | 914 | 986.6 | $ 817.6 |
Depreciation and amortization | 9.8 | 10.3 | 30.1 | 32 | |
Capital Expenditures | 1.7 | 6.1 | 14 | 16.9 | |
Total Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 226.8 | 233.9 | 770.3 | 819.3 | |
Income (Loss) from Operations | 19.8 | 28.4 | 107.2 | 138.6 | |
Assets of Operations | 814.1 | 786.2 | 814.1 | 786.2 | |
Depreciation and amortization | 9.6 | 10.2 | 29.4 | 31.7 | |
Capital Expenditures | 1.3 | 6.1 | 11.4 | 16.9 | |
Intersegment Sales | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | (2.4) | (2.3) | (7.8) | (8.4) | |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Income (Loss) from Operations | (1.8) | (0.2) | (7.7) | (4) | |
Assets of Operations | 99.9 | 200.4 | 99.9 | 200.4 | |
Depreciation and amortization | 0.2 | 0.1 | 0.7 | 0.3 | |
Capital Expenditures | 0.4 | 0 | 2.6 | 0 | |
U.S. | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 192.3 | 201.6 | 662.4 | 702.2 | |
U.S. | Total Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 193.6 | 203.3 | 666.4 | 708.8 | |
Income (Loss) from Operations | 18.7 | 28.2 | 100 | 128.6 | |
Assets of Operations | 714.2 | 693.5 | 714.2 | 693.5 | |
Depreciation and amortization | 8.5 | 9.1 | 26.2 | 28.4 | |
Capital Expenditures | 1.3 | 5.7 | 10.2 | 16.1 | |
U.S. | Intersegment Sales | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | (1.3) | (1.7) | (4) | (6.6) | |
International | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 32.1 | 30 | 100.1 | 108.7 | |
International | Total Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 33.2 | 30.6 | 103.9 | 110.5 | |
Income (Loss) from Operations | 1.1 | 0.2 | 7.2 | 10 | |
Assets of Operations | 99.9 | 92.7 | 99.9 | 92.7 | |
Depreciation and amortization | 1.1 | 1.1 | 3.2 | 3.3 | |
Capital Expenditures | 0 | 0.4 | 1.2 | 0.8 | |
International | Intersegment Sales | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | $ (1.1) | $ (0.6) | $ (3.8) | $ (1.8) |
Debt - Additional Information (
Debt - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Senior Notes | |
Debt Instrument [Line Items] | |
Interest payment period | semi-annually |
Commencement of interest payment | Apr. 15, 2017 |
8.25% Senior Notes Due October 15, 2024 | |
Debt Instrument [Line Items] | |
Senior notes | $ 300,000,000 |
Interest rate, stated percentage | 8.25% |
Maturity date | Oct. 15, 2024 |
R.R. Donnelley & Sons Company | |
Debt Instrument [Line Items] | |
Repayments of debt | $ 340,200,000 |
Senior Secured Term Loan B Facility | |
Debt Instrument [Line Items] | |
Credit facility | 350,000,000 |
Borrowings | 348,200,000 |
Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Credit facility | 300,000,000 |
Borrowings | 0 |
Credit Agreement | |
Debt Instrument [Line Items] | |
Allowable annual dividend payment under credit agreement | $ 15,000,000 |
Debt - Schedule of the Company'
Debt - Schedule of the Company's Debt (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Other | $ 8.8 | |
Unamortized debt issuance costs | $ (11.7) | |
Total debt | 636.5 | 8.8 |
Less: current portion | (17.1) | $ (8.8) |
Long-term debt (Note 11) | 619.4 | |
8.25% Senior Notes Due October 15, 2024 | ||
Debt Instrument [Line Items] | ||
Senior notes | 300 | |
Senior Secured Term Loan B Facility | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 348.2 |
Debt - Schedule of the Compan54
Debt - Schedule of the Company's Debt (Parenthetical) (Details) - 8.25% Senior Notes Due October 15, 2024 | 9 Months Ended |
Sep. 30, 2016 | |
Debt Instrument [Line Items] | |
Interest rate, stated percentage | 8.25% |
Maturity date | Oct. 15, 2024 |
Related Parties - Additional In
Related Parties - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Oct. 01, 2016 | |
Related Party Transaction [Line Items] | |||||
Net Sales | $ 224.4 | $ 231.6 | $ 762.5 | $ 810.9 | |
Cost of sales | 62 | 50.9 | 179.9 | 177.5 | |
Share-based compensation costs | 0.2 | 0.3 | 1.2 | 1.3 | |
Non-cash settlement related to intercompany note payable | 29.6 | 0 | |||
Outsourcing Business | |||||
Related Party Transaction [Line Items] | |||||
Cost of sales | 8.7 | 9.3 | 29.4 | 31.5 | |
R.R. Donnelley & Sons Company | |||||
Related Party Transaction [Line Items] | |||||
Net Sales | 1.1 | 1.9 | $ 3.6 | 5.8 | |
Non-cash settlement related to intercompany note payable | 29.6 | ||||
R.R. Donnelley & Sons Company | Subsequent Event | |||||
Related Party Transaction [Line Items] | |||||
Net pension plan liabilities | $ 68.3 | ||||
Total benefit plan liability | 317 | ||||
Plan assets, fair market value | 248.7 | ||||
Transition Services Agreements | |||||
Related Party Transaction [Line Items] | |||||
Intercompany agreements, description | In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company and the Company agrees to provide certain services to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization. | ||||
Term of agreement | 24 months | ||||
Commercial and Other Arrangements | |||||
Related Party Transaction [Line Items] | |||||
Intercompany agreements, description | The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients. | ||||
Term of agreement | 24 months | ||||
Freight and Logistics and Services | R.R. Donnelley & Sons Company | Printed Products | |||||
Related Party Transaction [Line Items] | |||||
Cost of sales | 11.5 | $ 12.9 | $ 48.6 | $ 58.4 | |
Separation and Distribution Agreement | R.R. Donnelley & Sons Company | |||||
Related Party Transaction [Line Items] | |||||
Target cash balance | $ 50 | $ 50 | |||
Separation and Distribution Agreement | R.R. Donnelley & Sons Company | Subsequent Event | |||||
Related Party Transaction [Line Items] | |||||
Receivable from related party | $ 68 |
Related Parties - Schedule of A
Related Parties - Schedule of Allocation of Expenses Reflected in Condensed Combined Financial Statements (Details) - R.R. Donnelley & Sons Company - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | ||||
Total allocations from RRD | $ 51.9 | $ 53.6 | $ 172.6 | $ 172.8 |
Costs of goods sold | ||||
Related Party Transaction [Line Items] | ||||
Total allocations from RRD | 8.3 | 9.5 | 28 | 29.2 |
Selling, general and administrative | ||||
Related Party Transaction [Line Items] | ||||
Total allocations from RRD | 38.3 | 38.9 | 129.4 | 126.9 |
Depreciation and amortization | ||||
Related Party Transaction [Line Items] | ||||
Total allocations from RRD | $ 5.3 | $ 5.2 | $ 15.2 | $ 16.7 |