Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
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 | 32,800,000 |
Condensed Consolidated and Comb
Condensed Consolidated and Combined Statements of Operations (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Services net sales | $ 154 | $ 139.8 |
Products net sales | 113.3 | 100.3 |
Total net sales | 267.3 | 240.1 |
Services cost of sales (exclusive of depreciation and amortization) | 77.7 | 71.9 |
Products cost of sales (exclusive of depreciation and amortization) | 63 | 55 |
Total cost of sales | 169.4 | 158.5 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 56.7 | 49 |
Restructuring, impairment and other charges-net | 3.8 | 0.6 |
Depreciation and amortization | 10.2 | 9.5 |
Income from operations | 27.2 | 22.5 |
Interest expense-net | 11.1 | 0.3 |
Earnings before income taxes | 16.1 | 22.2 |
Income tax expense | 6.8 | 8.8 |
Net earnings | $ 9.3 | $ 13.4 |
Net earnings per share (Note 8): | ||
Basic net earnings per share | $ 0.29 | $ 0.41 |
Diluted net earnings per share | $ 0.28 | $ 0.41 |
Weighted average number of common shares outstanding | ||
Basic | 32.6 | 32.4 |
Diluted | 32.8 | 32.4 |
R.R. Donnelley Affiliates | ||
Services cost of sales (exclusive of depreciation and amortization) | $ 9.9 | $ 11.2 |
Products cost of sales (exclusive of depreciation and amortization) | $ 18.8 | $ 20.4 |
Condensed Consolidated and Com3
Condensed Consolidated and Combined Statements of Comprehensive Income (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net earnings | $ 9.3 | $ 13.4 |
Other comprehensive income (loss), net of tax: | ||
Translation adjustments | 0.1 | 3 |
Adjustment for net periodic pension and other postretirement benefits plan cost | 0.4 | (0.2) |
Other comprehensive income, net of tax | 0.5 | 2.8 |
Comprehensive income | $ 9.8 | $ 16.2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (UNAUDITED) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 12.3 | $ 36.2 |
Receivables, less allowances for doubtful accounts of $7.5 in 2017 (2016 - $6.4) | 233.3 | 156.2 |
Receivables from R.R. Donnelley | 84.2 | 96 |
Inventories | 27.5 | 24.1 |
Prepaid expenses and other current assets | 17.3 | 17.1 |
Total current assets | 374.6 | 329.6 |
Property, plant and equipment-net | 36 | 35.5 |
Goodwill | 446.5 | 446.4 |
Other intangible assets-net | 50.9 | 54.3 |
Software-net | 39.3 | 41.6 |
Deferred income taxes | 39.1 | 37 |
Other noncurrent assets | 38.2 | 34.5 |
Total assets | 1,024.6 | 978.9 |
LIABILITIES | ||
Accounts payable | 101.3 | 85.3 |
Accrued liabilities | 99.8 | 100.7 |
Total current liabilities | 201.1 | 186 |
Long-term debt (Note 11) | 607.5 | 587 |
Deferred compensation liabilities | 23.1 | 24.4 |
Pension and other postretirement benefits plan liabilities | 55 | 56.4 |
Other noncurrent liabilities | 13.4 | 14 |
Total liabilities | 900.1 | 867.8 |
Commitments and Contingencies (Note 12) | ||
EQUITY | ||
Preferred stock, $0.01 par value Authorized: 1.0 shares; Issued: None | 0 | 0 |
Common stock, $0.01 par value Authorized: 65.0 shares; Issued: 32.8 shares in 2017 (2016 – 32.6 shares) | 0.3 | 0.3 |
Additional paid-in-capital | 183.5 | 179.9 |
Retained earnings (deficit) | 8.5 | (0.8) |
Accumulated other comprehensive loss | (67.8) | (68.3) |
Total equity | 124.5 | 111.1 |
Total liabilities and equity | $ 1,024.6 | $ 978.9 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 7.5 | $ 6.4 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, Issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, Authorized | 65,000,000 | 65,000,000 |
Common stock, Issued | 32,800,000 | 32,600,000 |
Condensed Consolidated and Com6
Condensed Consolidated and Combined Statements of Cash Flows (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net earnings | $ 9.3 | $ 13.4 |
Adjustments to reconcile net earnings to net cash used in operating activities: | ||
Depreciation and amortization | 10.2 | 9.5 |
Provision for doubtful accounts receivable | 1.8 | 0.2 |
Share-based compensation | 1.1 | 0.3 |
Deferred income taxes | (2.2) | (0.3) |
Net pension and other postretirement benefits plan income | (0.8) | (0.2) |
Other | 0.4 | 0 |
Changes in operating assets and liabilities - net of acquisitions: | ||
Accounts receivable - net | (66.7) | (52.8) |
Inventories | (3.4) | (2.9) |
Prepaid expenses and other current assets | (4.4) | (0.5) |
Accounts payable | 15 | 4.5 |
Income taxes payable and receivable | 7.7 | (0.3) |
Accrued liabilities and other | (6.1) | (13.5) |
Pension and other postretirement benefits plan contributions | (0.1) | (1.1) |
Net cash used in operating activities | (38.2) | (43.7) |
INVESTING ACTIVITIES | ||
Capital expenditures | (4.3) | (8.5) |
Purchase of investment | (3.4) | 0 |
Other investing activities | 0.2 | 2.4 |
Net cash used in investing activities | (7.5) | (6.1) |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 57 | 0 |
Payments on revolving facility borrowings | (37) | 0 |
Debt issuance costs | (1.5) | 0 |
Net transfers related to the Separation | 3.1 | 0 |
Net change in short-term debt | 0 | 6.9 |
Net transfers from Parent and affiliates | 0 | 39.7 |
Other financing activities | 0 | 0.2 |
Net cash provided by financing activities | 21.6 | 46.8 |
Effect of exchange rate on cash and cash equivalents | 0.2 | 2.9 |
Net decrease in cash and cash equivalents | (23.9) | (0.1) |
Cash and cash equivalents at beginning of year | 36.2 | 15.1 |
Cash and cash equivalents at end of period | $ 12.3 | $ 15 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Overview and Basis of Presentation | Note 1. Overview and Basis of Presentation Description of Business Donnelley Financial Solutions, Inc. (the Donnelley Financial’s Registration Statement on Form 10, as amended, was declared effective by the U.S. Securities and Exchange Commission (the “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 (as of the Separation date) in Donnelley Financial, as part of 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. On March 28, 2017, RRD completed the sale of 6.2 million shares of LSC common stock (RRD’s remaining ownership stake in LSC) in an underwritten public offering. On March 24, 2017, pursuant to the Stockholder and Registration Rights Agreement, dated as of September 30, 2016, by and between the Company and RRD, the Company filed a Registration Statement on Form S-1 to register the offering and sale of shares of the Company’s common stock retained by RRD. 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, premedia 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 consolidated and combined financial statements reflect the consolidated financial position and consolidated results of operations of the Company as an independent, publicly traded company for the periods after the Separation and the combined financial position and combined results of operations for the periods prior to the Separation. Prior to the Separation, the combined financial statements were prepared on a stand-alone basis and were derived from RRD’s consolidated financial statements and accounting records. The unaudited condensed consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The financial data presented herein should be read in conjunction with the audited consolidated and combined financial statements and accompanying notes included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 28, 2017. 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 for the full year. These unaudited condensed consolidated and combined interim financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed consolidated and combined financial statements. Actual results could differ from these estimates. For periods prior to the Separation, the unaudited condensed consolidated and 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 consolidated and 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 consolidated and combined statements of cash flows as a financing activity and in the unaudited condensed consolidated and 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. Prior to the Separation, the unaudited condensed consolidated and 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 were 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. For periods prior to the Separation, the income tax amounts in the unaudited condensed consolidated and combined financial statements were 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 maintained 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 condensed consolidated and combined financial statements for periods prior to the Separation. 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 also recorded a net other postretirement benefit liability of $1.5 million, as a result of the transfer of an other postretirement benefit plan from RRD to the Company. 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 consolidated and combined financial statements are net revenues from sales to RRD and affiliates of $4.0 million and $1.4 million for the three months ended March 31, 2017 and 2016, respectively. Donnelley Financial utilizes RRD for freight and logistics, production of certain printed products and outsourced business services functions. Included in the unaudited condensed consolidated and combined financial statements are cost of sales to RRD and affiliates of $28.7 million and $31.6 million for the three months ended March 31, 2017 and 2016, respectively. Intercompany receivables and payables with RRD are reflected within net parent company investment in the accompanying unaudited condensed consolidated and combined financial statements for periods prior to the Separation. See Note Related Parties, |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and December 31, 2016 were as follows: March 31, 2017 December 31, 2016 Raw materials and manufacturing supplies $ 9.7 $ 7.6 Work in process 11.3 10.8 Finished goods 6.5 5.7 Total $ 27.5 $ 24.1 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and December 31, 2016 were as follows: March 31, 2017 December 31, 2016 Land $ 10.0 $ 10.0 Buildings 44.5 44.4 Machinery and equipment 109.0 109.2 163.5 163.6 Less: Accumulated depreciation (127.5 ) (128.1 ) Total $ 36.0 $ 35.5 During |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
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 three months ended March 31, 2017 were as follows: U.S. International Total Net book value as of December 31, 2016 $ 429.2 $ 17.2 $ 446.4 Foreign exchange and other adjustments — 0.1 0.1 Net book value as of March 31, 2017 $ 429.2 $ 17.3 $ 446.5 The components of other intangible assets at March 31, 2017 and December 31, 2016 were as follows: March 31, 2017 December 31, 2016 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Amount Amortization Value Amount Amortization Value Customer relationships $ 139.2 $ (89.1 ) $ 50.1 $ 138.8 $ (85.3 ) $ 53.5 Trade names 6.3 (5.5 ) 0.8 6.3 (5.5 ) 0.8 Trademarks, licenses and agreements 3.2 (3.2 ) — 3.2 (3.2 ) — Total other intangible assets $ 148.7 $ (97.8 ) $ 50.9 $ 148.3 $ (94.0 ) $ 54.3 Amortization expense for other intangible assets was $3.6 million for both the three months ended March 31, 2017 and 2016. The following table outlines the estimated annual amortization expense related to other intangible assets as of March 31, 2017: For the year ending December 31, Amount 2017 $ 13.9 2018 13.7 2019 13.7 2020 12.4 2021 0.5 2022 and thereafter 0.3 Total $ 54.5 |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 5. Retirement Plans 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 unaudited condensed consolidated and combined balance sheets. Donnelley Financial’s unaudited condensed consolidated and 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 $1.4 million in the three months ended March 31, 2016. Included in these amounts is an allocation for other postretirement benefit plans for $0.3 million in the three months ended March 31, 2016. These allocations are reflected in the Company’s cost of sales and selling, general and administrative expenses. Donnelley Financial’s Pension and Postretirement Benefit 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. The pension plan asset allocation from RRD is expected to be finalized during the second quarter of 2017. The final asset allocation will result in an adjustment to the fair value of plan assets transferred to the Company from RRD. The Company also recorded a net other postretirement benefit liability of $1.5 million, as a result of the transfer of an other postretirement benefit plan from RRD to the Company. The components of the estimated net pension plan income for Donnelley Financial’s pension plans for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 2016 Pension expense (income) Interest cost $ 2.7 $ — Expected return on assets (4.0 ) — Amortization, net 0.5 (0.2 ) Net pension income $ (0.8 ) $ (0.2 ) |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Share Based Compensation [Abstract] | |
Share-Based Compensation | Note 6. Share Based Compensation Share-based compensation expense For all share-based awards granted to employees and directors following the Separation, including stock options, restricted stock units (“RSUs”), performance based restricted stock and performance share units (“PSUs”), the Company recognizes compensation expense based on estimated grant date fair values. The Company estimates the fair value of share-based awards based on assumptions as of the grant date. The Company recognizes compensation costs for RSUs expected to vest, on a straight-line basis over the requisite service period of the award, which is generally the vesting term of three years. Compensation expense for performance based restricted stock awards granted in 2016, which vest on a graded basis, is recognized utilizing a graded vesting schedule. Compensation expense for performance based restricted stock awards and PSUs granted in 2017, which cliff vest, is recognized on a straight-line basis over the performance period of the award. Compensation expense for stock options is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of four years. The Company estimates the number of awards expected to vest based, in part, on historical forfeiture rates and also based on management’s expectations of employee turnover within the specific employee groups receiving each type of award. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods, if actual forfeitures differ from those estimates. The stock options, RSUs, performance based restricted stock and PSUs granted during the three months ended March 31, 2017 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 or a change in control of the Company. In addition, upon a change in control of the Company, the performance based restricted stock and PSU awards will be measured at target performance and will remain subject to time based vesting until the end of the performance period; provided that the award will vest in full if, within three months prior to or two years after the date of the change in control of the Company, the grantee’s employment is terminated without cause by the Company or for good reason by the grantee. In periods prior to the Separation, 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 those share-based compensation plans are RRD’s plans, the amounts have been recognized through net parent company investment on the combined balance sheets. Total compensation expense was $1.1 million and $0.3 million for the three months ended March 31, 2017 and 2016, respectively. During the three months ended March 31, 2017, the Company adopted Accounting Standards Update 2016-09 “Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09)”, which identifies areas of simplification for several aspects of accounting for share-based payment transactions. The adoption of ASU 2016-09 represents a change in accounting principle. The Company has adopted all applicable aspects of this guidance on a prospective basis. ASU 2016-09 requires all excess tax benefits and tax deficiencies to be recognized as discrete items within income tax expense or benefit in the income statement in the reporting period in which they occur. ASU 2016-09 allows an employer with a statutory income tax withholding obligation to withhold shares with a fair value up to the amount of tax owed using the maximum statutory tax rate in the employee’s applicable jurisdiction(s). ASU 2016-09 requires companies to apply this guidance to outstanding liability awards at the date of adoption using a modified retrospective transition method, with a cumulative-effect adjustment to retained earnings. The Company does not have any outstanding share-based awards classified as liabilities. As such, no adjustment is required. ASU 2016-09 requires cash paid by an employer to taxing authorities when directly withholding shares for tax withholding purposes to be classified as a financing activity on the statement of cash flows. The change in classification is to be applied retrospectively. However, an adjustment to prior periods is not required because the Company did not have such tax withholding obligations during the prior periods. ASU 2016-09 requires a company to make an accounting policy election to account for forfeitures of share-based payments by either estimating the number of awards expected to vest or recognizing forfeitures when they occur. In accordance with ASU 2016-09, the Company has made an accounting policy election to estimate forfeitures and recognize compensation expense based on the number of awards expected to vest. Stock Options The Company granted 169,800 options, with a grant date fair market value of $7.77, during the three months ended March 31, 2017. There were no options granted during the three months ended March 31, 2016. The fair market value of each stock option award was estimated using the Black-Scholes-Merton option pricing model and the Company used the following methods to determine its underlying assumptions: • Expected volatility was estimated based on a weighted-average of historical volatilities for certain of the Company’s competitors • The risk-free interest rate was based on the U.S Treasury yield curve in effect on the date of grant • The expected term of options granted was based on the simplified method of using the mid-point between the vesting term and the original contractual term • The expected dividend yield was based on the Company’s current dividend rate The assumptions used to determine the fair market value of the stock options granted during the three months ended March 31, 2017 were as follows: 2017 Expected volatility 30.73 % Risk-free interest rate 2.18 % Expected life (years) 6.25 Expected dividend yield 0.00 % Stock outstanding Weighted Average Weighted Remaining Aggregate Shares Under Average Contractual Intrinsic Option Exercise Term Value (thousands) Price (years) (millions) Outstanding at December 31, 2016 299 $ 21.48 3.5 $ 1.4 Granted 170 22.35 9.9 Outstanding at March 31, 2017 469 21.80 5.6 0.9 Vested and expected to vest at March 31, 2017 458 21.78 5.5 0.9 Exercisable at March 31, 2017 119 $ 11.95 1.9 0.9 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on March 31, 2017 and December 31, 2016, respectively, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on March 31, 2017 and December 31, 2016. This amount will change in future periods based on the fair market value of the Company’s stock and the number of options outstanding. Total intrinsic value of options exercised for the three months ended March 31, 2017 and 2016 was de minimis. Excess tax benefits on stock option exercises, shown as operating cash inflows in the unaudited condensed consolidated and combined cash flows were de minimus for the three months ended March 31, 2017. There were no excess tax benefits on stock option exercises for the three months ended March 31, 2016. Compensation and March $1.3 million of total Restricted Stock Units Nonvested Weighted Shares Average Grant (Thousands) Date Fair Value Nonvested at December 31, 2016 436 $ 25.28 Granted 220 22.35 Vested (86 ) Nonvested at March 31, 2017 570 $ 23.52 Compensation expense related to RSUs was $0.6 million and $0.3 million for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, there was $7.8 million of unrecognized share-based compensation expense related to 0.6 million restricted stock unit awards, with a weighted-average grant date fair value of $23.52, that are expected to vest over a weighted-average period of 2.5 years. The fair value of these awards was determined based on the Company’s stock price on the grant date reduced by the present value of expected dividends through the vesting period. Restricted Stock Nonvested Weighted Shares Average Grant (Thousands) Date Fair Value Nonvested at December 31, 2016 156 $ 24.75 Granted 129 22.35 Nonvested at March 31, 2017 285 $ 23.66 During the three months ended March 31, 2017, the Company granted 129,400 shares of restricted stock to certain executives, payable upon the achievement of certain performance metrics. The fair value of these awards was determined based on the Company’s stock price on the grant date. The performance period for the restricted stock awarded is January 1, 2017 through December 31, 2019. The total potential payout for awards granted during the three months ended March 31, 2017 range from zero to 129,400 shares, should certain performance targets be achieved. Compensation expense for the restricted stock awards granted in 2017 and 2016 is currently being recognized based on 100% attainment of the targeted performance metrics for each award. Compensation expense for restricted stock awards was $0.5 million for the three months ended March 31, 2017. As of March 31, 2017, there was $5.0 million of unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted average period of 2.7 years. Performance Share Units During the three months ended March 31, 2017, 31,900 performance share units were granted to certain executive officers and senior management, payable upon the achievement of certain established performance targets. The performance period for the shares awarded is January 1, 2017 through December 31, 2019. Distributions under these awards are payable at the end of the performance period in common stock or cash, at the Company’s discretion. The total potential payout for awards granted during the three months ended March 31, 2017 range from zero to 47,850 shares, should certain performance targets be achieved. The fair value of these awards was determined based on the Company’s stock price on the grant date. Compensation expense for the PSUs granted in 2017 is currently being recognized based on 100% attainment of the targeted performance metrics or 31,900 shares. Compensation expense related to PSUs for the three months ended March 31, 2017 was de minimus. As of March 31, 2017, there was $0.7 million of unrecognized compensation expense related to PSUs, which is expected to be recognized over a weighted average period of 2.9 years. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Equity | Note 7. Equity The Company’s equity as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017, were as follows: Total Equity Balance at December 31, 2016 $ 111.1 Net earnings 9.3 Other comprehensive income 0.5 Separation-related adjustments 3.1 Share-based compensation 1.1 Issuance of share-based awards, net of withholdings and other (0.6 ) Balance at March 31, 2017 $ 124.5 Separation-related adjustments primarily relate to the settlement of balances due to or from RRD for activity prior to the Separation. The Company’s equity as of December 31, 2015 and March 31, 2016, and changes during the three months ended March 31, 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 13.4 — 13.4 Transfers to parent company, net 43.9 — 43.9 Other comprehensive income — 2.8 2.8 Balance at March 31, 2016 $ 696.8 $ (13.2 ) $ 683.6 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 8. Earnings per Share Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding for the period. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of all potentially dilutive share-based awards, including restricted stock units and restricted stock. 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. For periods prior to the Separation, basic and diluted earnings per share were calculated using the number of shares distributed and retained by RRD, totaling 32.4 million. 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. As discussed in Note 6, Share-based Compensation The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive share-based awards for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 2016 Net earnings per share: Basic $ 0.29 $ 0.41 Diluted $ 0.28 $ 0.41 Numerator: Net earnings $ 9.3 $ 13.4 Denominator: Weighted average number of common shares outstanding 32.6 32.4 Dilutive awards 0.2 — Diluted weighted average number of common shares outstanding 32.8 32.4 Weighted average number of anti-dilutive share-based awards: Restricted stock units 0.1 — Stock options 0.1 — Total 0.2 — |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Mar. 31, 2017 | |
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 months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 Before Tax Income Tax Net of Tax Amount Expense Amount Translation adjustments $ 0.1 $ — $ 0.1 Adjustment for net periodic pension plan and other postretirement benefits plan cost 0.5 0.1 0.4 Other comprehensive income $ 0.6 $ 0.1 $ 0.5 Three Months Ended March 31, 2016 Before Tax Income Tax Net of Tax Amount Expense Amount Translation adjustments $ 3.0 $ — $ 3.0 Adjustment for net periodic pension plan and other postretirement benefits plan cost (0.2 ) — (0.2 ) Other comprehensive income $ 2.8 $ — $ 2.8 Accumulated other comprehensive loss by component as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017, were as follows: Pension and Other Postretirement Benefits Plan Cost Translation Adjustments Total Balance at December 31, 2016 $ (52.2 ) $ (16.1 ) $ (68.3 ) Other comprehensive income before reclassifications — 0.1 0.1 Amounts reclassified from accumulated other comprehensive loss 0.4 — 0.4 Net change in accumulated other comprehensive loss 0.4 0.1 0.5 Balance at March 31, 2017 $ (51.8 ) $ (16.0 ) $ (67.8 ) Accumulated other comprehensive loss by component as of December 31, 2015 and March 31, 2016 were as follows: Pension and Other Postretirement Benefits Plan Cost Translation Adjustments Total Balance at December 31, 2015 $ — $ (16.0 ) $ (16.0 ) Other comprehensive income before reclassifications — 3.0 3.0 Amounts reclassified from accumulated other comprehensive loss (0.2 ) — (0.2 ) Net change in accumulated other comprehensive loss (0.2 ) 3.0 2.8 Balance at March 31, 2016 $ (0.2 ) $ (13.0 ) $ (13.2 ) Reclassifications from accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended Classification in the Condensed March 31, Consolidated and Combined 2017 2016 Statements of Operations Amortization of pension and other postretirement benefits plan cost: Net actuarial income (loss) $ 0.5 $ (0.2 ) (a) Reclassifications before tax 0.5 (0.2 ) Income tax expense 0.1 — Reclassifications, net of tax $ 0.4 $ (0.2 ) (a) These accumulated other comprehensive loss components are included in the calculation of net periodic pension and other postretirement benefits plan (income) expense, a component of which was allocated to Donnelley Financial in periods prior to the Separation, and recognized in cost of sales and selling, general and administrative expenses in the unaudited condensed consolidated and combined statements of operations (see Note 5, Retirement Plans |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
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, Canada and Latin America. 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 and shareholder communication services to investment market clients. 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 consolidated and combined financial statements. Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Three Months Ended March 31, 2017 U.S. $ 232.9 $ (2.5 ) $ 230.4 $ 37.0 $ 740.2 $ 8.8 $ 3.9 International 37.3 (0.4 ) 36.9 0.2 94.6 1.4 0.4 Total operating segments 270.2 (2.9 ) 267.3 37.2 834.8 10.2 4.3 Corporate — — — (10.0 ) 189.8 — — Total operations $ 270.2 $ (2.9 ) $ 267.3 $ 27.2 $ 1,024.6 $ 10.2 $ 4.3 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Three Months Ended March 31, 2016 U.S. $ 209.6 $ (1.5 ) $ 208.1 $ 22.0 $ 713.0 $ 8.3 $ 5.6 International 32.7 (0.7 ) 32.0 3.0 92.7 1.1 0.3 Total operating segments 242.3 (2.2 ) 240.1 25.0 805.7 9.4 5.9 Corporate — — — (2.5 ) 69.9 0.1 2.6 Total operations $ 242.3 $ (2.2 ) $ 240.1 $ 22.5 $ 875.6 $ 9.5 $ 8.5 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 11. Debt On September 30, 2016, in connection with the Separation, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement provides for (i) a new senior secured term loan B facility in an aggregate principal amount of $350.0 million (the “Term Loan Credit Facility”) and (ii) a new first lien senior secured revolving credit facility in an aggregate principal amount of $300.0 million (the “Revolving Facility,” and, together with the Term Loan Credit Facility, the “Credit Facilities”). The Credit Agreement contains 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 the aggregate. As of March 31, 2017, there were $20.0 million of outstanding borrowings under the Revolving Facility. Borrowings under the Term Loan Credit Facility were used to provide $340.2 million of cash to RRD, pursuant to the Separation Agreement, as of September 30, 2016. The remainder of the net proceeds was used for general corporate purposes. 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. 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. On March 10, 2017, the Company filed a Registration Statement on Form S-4 (as amended, the “Exchange Offer Registration Statement”) to offer to exchange the Notes for registered notes which have terms identical in all material respects to the Notes except that the registered notes are not subject to transfer restrictions or registration rights. The Exchange Offer Registration Statement was declared effective by the SEC on March 22, 2017. An exchange offer for the Notes was launched on March 22, 2017 and settled on April 25, 2017, resulting in the exchange of $299.9 million aggregate principal amount of outstanding Notes for registered notes. The Company’s debt as of March 31, 2017 and December 31, 2016 consisted of the following: March 31, December 31, 2017 2016 Term Loan Credit Facility $ 298.4 $ 298.3 8.25% senior notes due October 15, 2024 300.0 300.0 Borrowings under the Revolving Facility 20.0 — Unamortized debt issuance costs (10.9 ) (11.3 ) Total debt 607.5 587.0 Less: current portion — — Long-term debt $ 607.5 $ 587.0 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. The fair value of the Company’s debt was greater than its book value by approximately $5.5 million and $7.1 million at March 31, 2017 and December 31, 2016, respectively. The weighted average interest rate on borrowings under the Revolving Facility was 4.2% at March 31, 2017. Pursuant to t he Separation and Distribution A greement, the Company received a cash payment of $68.0 million from RRD on April 3, 2017. The proceeds were used to reduce outstanding debt under the Term Loan Credit Facility. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
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 | 3 Months Ended |
Mar. 31, 2017 | |
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. On March 24, 2017, pursuant to the Stockholder and Registration Rights Agreement, the Company filed a Registration Statement on Form S-1 to register the offering and sale of the Company’s common stock retained by RRD. Sublease Agreement In connection with the Separation, the Company assumed an operating lease through 2024 for the Company’s headquarters. There is a related non-cancelable sublease rental to RRD for the same period. The Company remains secondarily liable under this lease in the event that the sub-lessee defaults under the sublease terms. The Company does not believe that material payments will be required as a result of the secondary liability provisions of the primary lease agreement. Related Party Receivables/Payables Pursuant to t he Separation and Distribution A greement, the Company received a cash payment of $68.0 million from RRD on April 3, 2017. The proceeds were used to reduce outstanding debt under the Term Loan Credit Facility. The Company has other amounts due to or from RRD and LSC in the normal course of business. March 31, 2017 December 31, 2016 Receivable from RRD $ 84.2 $ 96.0 Receivable from LSC 0.8 0.8 Due from related parties 85.0 96.8 Payable to RRD $ 23.4 $ 27.1 Payable to LSC 4.4 2.5 Due to related parties 27.8 29.6 Allocations from RRD Prior to the Separation 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 consolidated and 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. Prior to the Separation RRD charged Donnelley Financial for these services based on direct usage when possible. When specific identification was not practicable, the pro rata basis of revenue or employee headcount, or some other measure was used. These allocations were reflected as follows in the unaudited condensed consolidated and combined financial statements: Three Months Ended March 31, 2016 Costs of goods sold allocation $ 10.3 Selling, general and administrative allocation 39.3 Depreciation and amortization 4.8 Total allocations from RRD $ 54.4 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 sales to RRD and affiliates of $4.0 million and $1.4 million for the three months ended March 31, 2017 and 2016, respectively, were included in the unaudited condensed consolidated and 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 $18.8 million and $20.4 million for the three months ended March 31, 2017 and 2016, respectively, were included in the unaudited condensed consolidated and 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 $9.9 million and $11.2 million for the three months ended March 31, 2017 and 2016, respectively, were included in the unaudited condensed consolidated and combined statements of operations for these purchases. For periods prior to the Separation, intercompany payables with RRD and affiliates for these purchases are reflected within net parent company investment in the unaudited condensed consolidated and combined financial statements. Share-Based Compensation Prior to Separation Prior to the Separation, certain Donnelley Financial employees participated 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 unaudited condensed combined statements of operations. Share-based compensation costs allocated to the Company were $0.3 million for the three months ended March 31, 2016. Retirement Plans Prior to Separation Prior to the Separation, 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 unaudited condensed consolidated and 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 Centralized Cash Management Prior to Separation RRD uses a centralized approach to cash management and financing of operations. Prior to the Separation, 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 consolidated and 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. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Pronouncements | Note 14. New Accounting Pronouncements In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2017-07 “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”), which requires an employer to report the service cost component of net periodic benefit cost in the same line item(s) as other employee compensation costs arising from services rendered during the period. The other components of net periodic benefit cost will be presented in the income statement separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. ASU 2017-07 must be applied retrospectively and is effective in the first quarter of 2018. Early adoption is permitted; however the Company plans to adopt the standard in the first quarter of 2018. Refer to Note 5, Retirement Plans , for disclosure of pension income for the three months ended March 31, 2017 and 2016 which would be reclassified to other income upon adoption of the standard. In January 2017, the FASB issued Accounting Standards Update No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying In February 2016, the 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 2017. 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. 2016-17 “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control” • Accounting Standards Update No. 2016-09 “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” • Accounting Standards Update No. 2016-07 Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting” • Accounting Standards Update No. 2016-06 “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments” • Accounting Standards Update No. 2016-05 “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” • Accounting Standards Update No. 2015-11 “Inventory (Topic 330): Simplifying the Measurement of Inventory” |
Guarantor Financial Information
Guarantor Financial Information | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Guarantor Financial Information | Note 15. Guarantor Financial Information As described in Note 11, Debt The guarantee of the Notes by a subsidiary guarantor will be automatically released under certain situations, including upon the sale or disposition of such subsidiary guarantor to a person that is not Donnelley Financial or a subsidiary guarantor of the notes, the liquidation or dissolution of such subsidiary guarantor, and if such subsidiary guarantor is released from its guarantee obligations under the Company’s Credit Facilities. The following tables set forth condensed consolidating statements of income for the three months ended March 31, 2017 and 2016, condensed consolidating statements of financial position as of March 31, 2017 and December 31, 2016, and condensed consolidating statements of cash flows for the three months ended March 31, 2017 and 2016. The principal consolidating adjustments are to eliminate the investment in subsidiaries and intercompany balances and transactions. For purposes of the tables below, the Company is referred to as “Parent” and the Guarantors are referred to as “Guarantor Subsidiaries.” Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 128.6 $ 27.0 $ (1.6 ) $ 154.0 Products net sales — 104.3 10.3 (1.3 ) 113.3 Total net sales — 232.9 37.3 (2.9 ) 267.3 Services cost of sales (exclusive of depreciation and amortization) — 61.3 17.9 (1.5 ) 77.7 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 9.4 0.5 — 9.9 Products cost of sales (exclusive of depreciation and amortization) — 57.0 7.4 (1.4 ) 63.0 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 18.7 0.1 — 18.8 Total cost of sales — 146.4 25.9 (2.9 ) 169.4 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 47.6 9.1 — 56.7 Restructuring, impairment and other charges-net — 3.1 0.7 — 3.8 Depreciation and amortization — 8.8 1.4 — 10.2 Income from operations — 27.0 0.2 — 27.2 Interest expense (income)-net 11.3 (0.2 ) — — 11.1 Earnings (loss) before income taxes and equity in net income of subsidiaries (11.3 ) 27.2 0.2 — 16.1 Income tax (benefit) expense (4.7 ) 11.4 0.1 — 6.8 Earnings (loss) before equity in net income of subsidiaries (6.6 ) 15.8 0.1 — 9.3 Equity in net income of subsidiaries 15.9 0.1 — (16.0 ) — Net earnings (loss) $ 9.3 $ 15.9 $ 0.1 $ (16.0 ) $ 9.3 Comprehensive income (loss) $ 9.8 $ 16.4 $ 0.2 $ (16.6 ) $ 9.8 Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 117.2 $ 23.9 $ (1.3 ) $ 139.8 Products net sales — 92.4 8.8 (0.9 ) 100.3 Total net sales — 209.6 32.7 (2.2 ) 240.1 Services cost of sales (exclusive of depreciation and amortization) — 58.2 14.9 (1.2 ) 71.9 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 10.6 0.6 — 11.2 Products cost of sales (exclusive of depreciation and amortization) — 49.8 6.2 (1.0 ) 55.0 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 20.4 — — 20.4 Total cost of sales — 139.0 21.7 (2.2 ) 158.5 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 42.1 6.9 — 49.0 Restructuring, impairment and other charges-net — 0.6 — — 0.6 Depreciation and amortization — 8.4 1.1 — 9.5 Income from operations — 19.5 3.0 — 22.5 Interest expense-net — 0.3 — — 0.3 Earnings before income taxes and equity in net income of subsidiaries — 19.2 3.0 — 22.2 Income tax expense — 7.6 1.2 — 8.8 Earnings before equity in net income of subsidiaries — 11.6 1.8 — 13.4 Equity in net income of subsidiaries 13.4 1.8 — (15.2 ) — Net earnings (loss) $ 13.4 $ 13.4 $ 1.8 $ (15.2 ) $ 13.4 Comprehensive income (loss) $ 16.2 $ 16.2 $ 4.8 $ (21.0 ) $ 16.2 Condensed Consolidating Balance Sheet As of March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 19.2 $ 10.3 $ (17.2 ) $ 12.3 Receivables, less allowances — 193.1 40.2 — 233.3 Receivables from R.R. Donnelley 68.0 14.9 1.3 — 84.2 Intercompany receivables — 34.1 — (34.1 ) — Intercompany short-term note receivable — — 21.0 (21.0 ) — Inventories — 25.5 2.0 — 27.5 Prepaid expenses and other current assets 4.5 14.4 5.1 (6.7 ) 17.3 Total current assets 72.5 301.2 79.9 (79.0 ) 374.6 Property, plant and equipment-net — 32.8 3.2 — 36.0 Goodwill — 429.2 17.3 — 446.5 Other intangible assets-net — 41.1 9.8 — 50.9 Software-net — 38.8 0.5 — 39.3 Deferred income taxes — 35.4 3.7 — 39.1 Other noncurrent assets 4.2 30.9 3.1 — 38.2 Investments in consolidated subsidiaries 711.3 66.0 — (777.3 ) — Total assets $ 788.0 $ 975.4 $ 117.5 $ (856.3 ) $ 1,024.6 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 17.2 $ 91.2 $ 12.0 $ (19.1 ) $ 101.3 Intercompany payable 10.0 — 22.2 (32.2 ) — Intercompany short-term note payable 21.0 — — (21.0 ) — Accrued liabilities 7.8 85.0 13.7 (6.7 ) 99.8 Total current liabilities 56.0 176.2 47.9 (79.0 ) 201.1 Long-term debt 607.5 — — — 607.5 Deferred compensation liabilities — 23.1 — — 23.1 Pension and other postretirement benefits plan liabilities — 53.9 1.1 — 55.0 Other noncurrent liabilities — 10.9 2.5 — 13.4 Total liabilities 663.5 264.1 51.5 (79.0 ) 900.1 Total equity 124.5 711.3 66.0 (777.3 ) 124.5 Total liabilities and equity $ 788.0 $ 975.4 $ 117.5 $ (856.3 ) $ 1,024.6 Condensed Consolidating Balance Sheet As of December 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 21.8 $ 16.8 $ (2.4 ) $ 36.2 Receivables, less allowances — 119.9 36.3 — 156.2 Receivables from R.R. Donnelley 68.0 28.0 — — 96.0 Intercompany receivables — 63.0 — (63.0 ) — Intercompany short-term note receivable — — 15.3 (15.3 ) — Inventories — 22.7 1.4 — 24.1 Prepaid expenses and other current assets 4.3 8.1 4.7 — 17.1 Total current assets 72.3 263.5 74.5 (80.7 ) 329.6 Property, plant and equipment-net — 32.4 3.1 — 35.5 Goodwill — 429.2 17.2 — 446.4 Other intangible assets-net — 44.0 10.3 — 54.3 Software-net — 41.0 0.6 — 41.6 Deferred income taxes — 34.2 2.8 — 37.0 Other noncurrent assets 4.4 27.7 2.4 — 34.5 Investments in consolidated subsidiaries 692.2 65.1 — (757.3 ) — Total assets $ 768.9 $ 937.1 $ 110.9 $ (838.0 ) $ 978.9 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 3.4 $ 72.8 $ 11.5 $ (2.4 ) $ 85.3 Intercompany payable 43.9 — 18.6 (62.5 ) — Intercompany short-term note payable 15.3 — — (15.3 ) — Accrued liabilities 8.2 81.4 11.6 (0.5 ) 100.7 Total current liabilities 70.8 154.2 41.7 (80.7 ) 186.0 Long-term debt 587.0 — — — 587.0 Deferred compensation liabilities — 24.4 — — 24.4 Pension and other postretirement benefits plan — 55.3 1.1 — 56.4 Other noncurrent liabilities — 11.0 3.0 — 14.0 Total liabilities 657.8 244.9 45.8 (80.7 ) 867.8 Total equity 111.1 692.2 65.1 (757.3 ) 111.1 Total liabilities and equity $ 768.9 $ 937.1 $ 110.9 $ (838.0 ) $ 978.9 Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (27.3 ) $ 4.5 $ (0.6 ) $ (14.8 ) $ (38.2 ) INVESTING ACTIVITIES Capital expenditures — (3.9 ) (0.4 ) — (4.3 ) Purchase of investment — (3.4 ) — — (3.4 ) Other investing activities — 0.2 — — 0.2 Net cash used in investing activities — (7.1 ) (0.4 ) — (7.5 ) FINANCING ACTIVITIES Revolving facility borrowings 57.0 — — — 57.0 Payments on revolving facility borrowings (37.0 ) — — — (37.0 ) Debt issuance costs (1.5 ) — — — (1.5 ) Intercompany note payable (receivable) 5.7 — (5.7 ) — — Net transfers related to the Separation 3.1 — — — 3.1 Net cash provided by (used in) financing activities 27.3 — (5.7 ) — 21.6 Effect of exchange rate on cash and cash equivalents — — 0.2 — 0.2 Net decrease in cash and cash equivalents — (2.6 ) (6.5 ) (14.8 ) (23.9 ) Cash and cash equivalents at beginning of year — 21.8 16.8 (2.4 ) 36.2 Cash and cash equivalents at end of period $ — $ 19.2 $ 10.3 $ (17.2 ) $ 12.3 Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash used in operating activities $ — $ (41.0 ) $ (2.7 ) $ — $ (43.7 ) INVESTING ACTIVITIES Capital expenditures — (8.2 ) (0.3 ) — (8.5 ) Other investing activities — 2.0 0.4 — 2.4 Net cash (used in) provided by investing activities — (6.2 ) 0.1 — (6.1 ) FINANCING ACTIVITIES Net change in short-term debt — — 6.9 — 6.9 Other financing activities — 0.2 — — 0.2 Net transfers from Parent and affiliates — 47.1 (7.4 ) — 39.7 Net cash provided by (used in) financing activities — 47.3 (0.5 ) — 46.8 Effect of exchange rate on cash and cash equivalents — — 2.9 — 2.9 Net increase (decrease) in cash and cash equivalents — 0.1 (0.2 ) — (0.1 ) Cash and cash equivalents at beginning of year — 0.1 15.0 — 15.1 Cash and cash equivalents at end of period $ — $ 0.2 $ 14.8 $ — $ 15.0 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and December 31, 2016 were as follows: March 31, 2017 December 31, 2016 Raw materials and manufacturing supplies $ 9.7 $ 7.6 Work in process 11.3 10.8 Finished goods 6.5 5.7 Total $ 27.5 $ 24.1 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Components of Company's Property, Plant and Equipment | The components of the Company’s property, plant and equipment at March 31, 2017 and December 31, 2016 were as follows: March 31, 2017 December 31, 2016 Land $ 10.0 $ 10.0 Buildings 44.5 44.4 Machinery and equipment 109.0 109.2 163.5 163.6 Less: Accumulated depreciation (127.5 ) (128.1 ) Total $ 36.0 $ 35.5 |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 three months ended March 31, 2017 were as follows: U.S. International Total Net book value as of December 31, 2016 $ 429.2 $ 17.2 $ 446.4 Foreign exchange and other adjustments — 0.1 0.1 Net book value as of March 31, 2017 $ 429.2 $ 17.3 $ 446.5 |
Components of Other Intangible Assets | The components of other intangible assets at March 31, 2017 and December 31, 2016 were as follows: March 31, 2017 December 31, 2016 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Amount Amortization Value Amount Amortization Value Customer relationships $ 139.2 $ (89.1 ) $ 50.1 $ 138.8 $ (85.3 ) $ 53.5 Trade names 6.3 (5.5 ) 0.8 6.3 (5.5 ) 0.8 Trademarks, licenses and agreements 3.2 (3.2 ) — 3.2 (3.2 ) — Total other intangible assets $ 148.7 $ (97.8 ) $ 50.9 $ 148.3 $ (94.0 ) $ 54.3 |
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 March 31, 2017: For the year ending December 31, Amount 2017 $ 13.9 2018 13.7 2019 13.7 2020 12.4 2021 0.5 2022 and thereafter 0.3 Total $ 54.5 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Estimated Net Pension Plan Income | The components of the estimated net pension plan income for Donnelley Financial’s pension plans for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 2016 Pension expense (income) Interest cost $ 2.7 $ — Expected return on assets (4.0 ) — Amortization, net 0.5 (0.2 ) Net pension income $ (0.8 ) $ (0.2 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Share Based Compensation [Abstract] | |
Summary of Assumptions Used to Determine Fair Market Value of Stock Options Granted | The assumptions used to determine the fair market value of the stock options granted during the three months ended March 31, 2017 were as follows: 2017 Expected volatility 30.73 % Risk-free interest rate 2.18 % Expected life (years) 6.25 Expected dividend yield 0.00 % |
Summary of Stock Option Awards Outstanding Activity | Stock outstanding Weighted Average Weighted Remaining Aggregate Shares Under Average Contractual Intrinsic Option Exercise Term Value (thousands) Price (years) (millions) Outstanding at December 31, 2016 299 $ 21.48 3.5 $ 1.4 Granted 170 22.35 9.9 Outstanding at March 31, 2017 469 21.80 5.6 0.9 Vested and expected to vest at March 31, 2017 458 21.78 5.5 0.9 Exercisable at March 31, 2017 119 $ 11.95 1.9 0.9 |
Summary of Nonvested Restricted Stock Unit Awards | Nonvested Weighted Shares Average Grant (Thousands) Date Fair Value Nonvested at December 31, 2016 436 $ 25.28 Granted 220 22.35 Vested (86 ) Nonvested at March 31, 2017 570 $ 23.52 |
Summary of Nonvested Restricted Stock Awards | Nonvested Weighted Shares Average Grant (Thousands) Date Fair Value Nonvested at December 31, 2016 156 $ 24.75 Granted 129 22.35 Nonvested at March 31, 2017 285 $ 23.66 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of the Company's Equity Activity | The Company’s equity as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017, were as follows: Total Equity Balance at December 31, 2016 $ 111.1 Net earnings 9.3 Other comprehensive income 0.5 Separation-related adjustments 3.1 Share-based compensation 1.1 Issuance of share-based awards, net of withholdings and other (0.6 ) Balance at March 31, 2017 $ 124.5 The Company’s equity as of December 31, 2015 and March 31, 2016, and changes during the three months ended March 31, 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 13.4 — 13.4 Transfers to parent company, net 43.9 — 43.9 Other comprehensive income — 2.8 2.8 Balance at March 31, 2016 $ 696.8 $ (13.2 ) $ 683.6 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator of Basic and Diluted Earnings per Share Calculation and Anti-dilutive Share-based Awards | The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive share-based awards for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 2016 Net earnings per share: Basic $ 0.29 $ 0.41 Diluted $ 0.28 $ 0.41 Numerator: Net earnings $ 9.3 $ 13.4 Denominator: Weighted average number of common shares outstanding 32.6 32.4 Dilutive awards 0.2 — Diluted weighted average number of common shares outstanding 32.8 32.4 Weighted average number of anti-dilutive share-based awards: Restricted stock units 0.1 — Stock options 0.1 — Total 0.2 — |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 Before Tax Income Tax Net of Tax Amount Expense Amount Translation adjustments $ 0.1 $ — $ 0.1 Adjustment for net periodic pension plan and other postretirement benefits plan cost 0.5 0.1 0.4 Other comprehensive income $ 0.6 $ 0.1 $ 0.5 Three Months Ended March 31, 2016 Before Tax Income Tax Net of Tax Amount Expense Amount Translation adjustments $ 3.0 $ — $ 3.0 Adjustment for net periodic pension plan and other postretirement benefits plan cost (0.2 ) — (0.2 ) Other comprehensive income $ 2.8 $ — $ 2.8 |
Schedule of Changes in Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss by component as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017, were as follows: Pension and Other Postretirement Benefits Plan Cost Translation Adjustments Total Balance at December 31, 2016 $ (52.2 ) $ (16.1 ) $ (68.3 ) Other comprehensive income before reclassifications — 0.1 0.1 Amounts reclassified from accumulated other comprehensive loss 0.4 — 0.4 Net change in accumulated other comprehensive loss 0.4 0.1 0.5 Balance at March 31, 2017 $ (51.8 ) $ (16.0 ) $ (67.8 ) Accumulated other comprehensive loss by component as of December 31, 2015 and March 31, 2016 were as follows: Pension and Other Postretirement Benefits Plan Cost Translation Adjustments Total Balance at December 31, 2015 $ — $ (16.0 ) $ (16.0 ) Other comprehensive income before reclassifications — 3.0 3.0 Amounts reclassified from accumulated other comprehensive loss (0.2 ) — (0.2 ) Net change in accumulated other comprehensive loss (0.2 ) 3.0 2.8 Balance at March 31, 2016 $ (0.2 ) $ (13.0 ) $ (13.2 ) |
Reclassifications from Accumulated Other Comprehensive Loss, Amortization of Pension Plan Cost | Reclassifications from accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended Classification in the Condensed March 31, Consolidated and Combined 2017 2016 Statements of Operations Amortization of pension and other postretirement benefits plan cost: Net actuarial income (loss) $ 0.5 $ (0.2 ) (a) Reclassifications before tax 0.5 (0.2 ) Income tax expense 0.1 — Reclassifications, net of tax $ 0.4 $ (0.2 ) (a) These accumulated other comprehensive loss components are included in the calculation of net periodic pension and other postretirement benefits plan (income) expense, a component of which was allocated to Donnelley Financial in periods prior to the Separation, and recognized in cost of sales and selling, general and administrative expenses in the unaudited condensed consolidated and combined statements of operations (see Note 5, Retirement Plans |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 consolidated and combined financial statements. Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Three Months Ended March 31, 2017 U.S. $ 232.9 $ (2.5 ) $ 230.4 $ 37.0 $ 740.2 $ 8.8 $ 3.9 International 37.3 (0.4 ) 36.9 0.2 94.6 1.4 0.4 Total operating segments 270.2 (2.9 ) 267.3 37.2 834.8 10.2 4.3 Corporate — — — (10.0 ) 189.8 — — Total operations $ 270.2 $ (2.9 ) $ 267.3 $ 27.2 $ 1,024.6 $ 10.2 $ 4.3 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Three Months Ended March 31, 2016 U.S. $ 209.6 $ (1.5 ) $ 208.1 $ 22.0 $ 713.0 $ 8.3 $ 5.6 International 32.7 (0.7 ) 32.0 3.0 92.7 1.1 0.3 Total operating segments 242.3 (2.2 ) 240.1 25.0 805.7 9.4 5.9 Corporate — — — (2.5 ) 69.9 0.1 2.6 Total operations $ 242.3 $ (2.2 ) $ 240.1 $ 22.5 $ 875.6 $ 9.5 $ 8.5 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of the Company's Debt | The Company’s debt as of March 31, 2017 and December 31, 2016 consisted of the following: March 31, December 31, 2017 2016 Term Loan Credit Facility $ 298.4 $ 298.3 8.25% senior notes due October 15, 2024 300.0 300.0 Borrowings under the Revolving Facility 20.0 — Unamortized debt issuance costs (10.9 ) (11.3 ) Total debt 607.5 587.0 Less: current portion — — Long-term debt $ 607.5 $ 587.0 |
Related Parties (Tables)
Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Summary of Amount in Unaudited Condensed Consolidated and Combined Balance Sheet Due or From Related Parties | The following is a summary of the amounts in the unaudited condensed consolidated and combined balance sheet due to or from RRD and LSC as of the three months ended March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Receivable from RRD $ 84.2 $ 96.0 Receivable from LSC 0.8 0.8 Due from related parties 85.0 96.8 Payable to RRD $ 23.4 $ 27.1 Payable to LSC 4.4 2.5 Due to related parties 27.8 29.6 |
Schedule of Allocation of Expenses Reflected in Unaudited Condensed Consolidated and Combined Financial Statements | These allocations were reflected as follows in the unaudited condensed consolidated and combined financial statements: Three Months Ended March 31, 2016 Costs of goods sold allocation $ 10.3 Selling, general and administrative allocation 39.3 Depreciation and amortization 4.8 Total allocations from RRD $ 54.4 |
Guarantor Financial Informati33
Guarantor Financial Information - (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Guarantor Financial Information Condensed Consolidating Statements of Operations | Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 128.6 $ 27.0 $ (1.6 ) $ 154.0 Products net sales — 104.3 10.3 (1.3 ) 113.3 Total net sales — 232.9 37.3 (2.9 ) 267.3 Services cost of sales (exclusive of depreciation and amortization) — 61.3 17.9 (1.5 ) 77.7 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 9.4 0.5 — 9.9 Products cost of sales (exclusive of depreciation and amortization) — 57.0 7.4 (1.4 ) 63.0 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 18.7 0.1 — 18.8 Total cost of sales — 146.4 25.9 (2.9 ) 169.4 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 47.6 9.1 — 56.7 Restructuring, impairment and other charges-net — 3.1 0.7 — 3.8 Depreciation and amortization — 8.8 1.4 — 10.2 Income from operations — 27.0 0.2 — 27.2 Interest expense (income)-net 11.3 (0.2 ) — — 11.1 Earnings (loss) before income taxes and equity in net income of subsidiaries (11.3 ) 27.2 0.2 — 16.1 Income tax (benefit) expense (4.7 ) 11.4 0.1 — 6.8 Earnings (loss) before equity in net income of subsidiaries (6.6 ) 15.8 0.1 — 9.3 Equity in net income of subsidiaries 15.9 0.1 — (16.0 ) — Net earnings (loss) $ 9.3 $ 15.9 $ 0.1 $ (16.0 ) $ 9.3 Comprehensive income (loss) $ 9.8 $ 16.4 $ 0.2 $ (16.6 ) $ 9.8 Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 117.2 $ 23.9 $ (1.3 ) $ 139.8 Products net sales — 92.4 8.8 (0.9 ) 100.3 Total net sales — 209.6 32.7 (2.2 ) 240.1 Services cost of sales (exclusive of depreciation and amortization) — 58.2 14.9 (1.2 ) 71.9 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 10.6 0.6 — 11.2 Products cost of sales (exclusive of depreciation and amortization) — 49.8 6.2 (1.0 ) 55.0 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 20.4 — — 20.4 Total cost of sales — 139.0 21.7 (2.2 ) 158.5 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 42.1 6.9 — 49.0 Restructuring, impairment and other charges-net — 0.6 — — 0.6 Depreciation and amortization — 8.4 1.1 — 9.5 Income from operations — 19.5 3.0 — 22.5 Interest expense-net — 0.3 — — 0.3 Earnings before income taxes and equity in net income of subsidiaries — 19.2 3.0 — 22.2 Income tax expense — 7.6 1.2 — 8.8 Earnings before equity in net income of subsidiaries — 11.6 1.8 — 13.4 Equity in net income of subsidiaries 13.4 1.8 — (15.2 ) — Net earnings (loss) $ 13.4 $ 13.4 $ 1.8 $ (15.2 ) $ 13.4 Comprehensive income (loss) $ 16.2 $ 16.2 $ 4.8 $ (21.0 ) $ 16.2 |
Guarantor Financial Information Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet As of March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 19.2 $ 10.3 $ (17.2 ) $ 12.3 Receivables, less allowances — 193.1 40.2 — 233.3 Receivables from R.R. Donnelley 68.0 14.9 1.3 — 84.2 Intercompany receivables — 34.1 — (34.1 ) — Intercompany short-term note receivable — — 21.0 (21.0 ) — Inventories — 25.5 2.0 — 27.5 Prepaid expenses and other current assets 4.5 14.4 5.1 (6.7 ) 17.3 Total current assets 72.5 301.2 79.9 (79.0 ) 374.6 Property, plant and equipment-net — 32.8 3.2 — 36.0 Goodwill — 429.2 17.3 — 446.5 Other intangible assets-net — 41.1 9.8 — 50.9 Software-net — 38.8 0.5 — 39.3 Deferred income taxes — 35.4 3.7 — 39.1 Other noncurrent assets 4.2 30.9 3.1 — 38.2 Investments in consolidated subsidiaries 711.3 66.0 — (777.3 ) — Total assets $ 788.0 $ 975.4 $ 117.5 $ (856.3 ) $ 1,024.6 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 17.2 $ 91.2 $ 12.0 $ (19.1 ) $ 101.3 Intercompany payable 10.0 — 22.2 (32.2 ) — Intercompany short-term note payable 21.0 — — (21.0 ) — Accrued liabilities 7.8 85.0 13.7 (6.7 ) 99.8 Total current liabilities 56.0 176.2 47.9 (79.0 ) 201.1 Long-term debt 607.5 — — — 607.5 Deferred compensation liabilities — 23.1 — — 23.1 Pension and other postretirement benefits plan liabilities — 53.9 1.1 — 55.0 Other noncurrent liabilities — 10.9 2.5 — 13.4 Total liabilities 663.5 264.1 51.5 (79.0 ) 900.1 Total equity 124.5 711.3 66.0 (777.3 ) 124.5 Total liabilities and equity $ 788.0 $ 975.4 $ 117.5 $ (856.3 ) $ 1,024.6 Condensed Consolidating Balance Sheet As of December 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 21.8 $ 16.8 $ (2.4 ) $ 36.2 Receivables, less allowances — 119.9 36.3 — 156.2 Receivables from R.R. Donnelley 68.0 28.0 — — 96.0 Intercompany receivables — 63.0 — (63.0 ) — Intercompany short-term note receivable — — 15.3 (15.3 ) — Inventories — 22.7 1.4 — 24.1 Prepaid expenses and other current assets 4.3 8.1 4.7 — 17.1 Total current assets 72.3 263.5 74.5 (80.7 ) 329.6 Property, plant and equipment-net — 32.4 3.1 — 35.5 Goodwill — 429.2 17.2 — 446.4 Other intangible assets-net — 44.0 10.3 — 54.3 Software-net — 41.0 0.6 — 41.6 Deferred income taxes — 34.2 2.8 — 37.0 Other noncurrent assets 4.4 27.7 2.4 — 34.5 Investments in consolidated subsidiaries 692.2 65.1 — (757.3 ) — Total assets $ 768.9 $ 937.1 $ 110.9 $ (838.0 ) $ 978.9 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 3.4 $ 72.8 $ 11.5 $ (2.4 ) $ 85.3 Intercompany payable 43.9 — 18.6 (62.5 ) — Intercompany short-term note payable 15.3 — — (15.3 ) — Accrued liabilities 8.2 81.4 11.6 (0.5 ) 100.7 Total current liabilities 70.8 154.2 41.7 (80.7 ) 186.0 Long-term debt 587.0 — — — 587.0 Deferred compensation liabilities — 24.4 — — 24.4 Pension and other postretirement benefits plan — 55.3 1.1 — 56.4 Other noncurrent liabilities — 11.0 3.0 — 14.0 Total liabilities 657.8 244.9 45.8 (80.7 ) 867.8 Total equity 111.1 692.2 65.1 (757.3 ) 111.1 Total liabilities and equity $ 768.9 $ 937.1 $ 110.9 $ (838.0 ) $ 978.9 |
Guarantor Financial Information Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (27.3 ) $ 4.5 $ (0.6 ) $ (14.8 ) $ (38.2 ) INVESTING ACTIVITIES Capital expenditures — (3.9 ) (0.4 ) — (4.3 ) Purchase of investment — (3.4 ) — — (3.4 ) Other investing activities — 0.2 — — 0.2 Net cash used in investing activities — (7.1 ) (0.4 ) — (7.5 ) FINANCING ACTIVITIES Revolving facility borrowings 57.0 — — — 57.0 Payments on revolving facility borrowings (37.0 ) — — — (37.0 ) Debt issuance costs (1.5 ) — — — (1.5 ) Intercompany note payable (receivable) 5.7 — (5.7 ) — — Net transfers related to the Separation 3.1 — — — 3.1 Net cash provided by (used in) financing activities 27.3 — (5.7 ) — 21.6 Effect of exchange rate on cash and cash equivalents — — 0.2 — 0.2 Net decrease in cash and cash equivalents — (2.6 ) (6.5 ) (14.8 ) (23.9 ) Cash and cash equivalents at beginning of year — 21.8 16.8 (2.4 ) 36.2 Cash and cash equivalents at end of period $ — $ 19.2 $ 10.3 $ (17.2 ) $ 12.3 Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash used in operating activities $ — $ (41.0 ) $ (2.7 ) $ — $ (43.7 ) INVESTING ACTIVITIES Capital expenditures — (8.2 ) (0.3 ) — (8.5 ) Other investing activities — 2.0 0.4 — 2.4 Net cash (used in) provided by investing activities — (6.2 ) 0.1 — (6.1 ) FINANCING ACTIVITIES Net change in short-term debt — — 6.9 — 6.9 Other financing activities — 0.2 — — 0.2 Net transfers from Parent and affiliates — 47.1 (7.4 ) — 39.7 Net cash provided by (used in) financing activities — 47.3 (0.5 ) — 46.8 Effect of exchange rate on cash and cash equivalents — — 2.9 — 2.9 Net increase (decrease) in cash and cash equivalents — 0.1 (0.2 ) — (0.1 ) Cash and cash equivalents at beginning of year — 0.1 15.0 — 15.1 Cash and cash equivalents at end of period $ — $ 0.2 $ 14.8 $ — $ 15.0 |
Overview and Basis of Present34
Overview and Basis of Presentation - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Mar. 28, 2017 | Oct. 01, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Distribution of common shares during spinoff | 26.2 | |||
Percentage of distribution of common shares during spinoff | 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 | $ 267.3 | $ 240.1 | ||
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, premedia 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] | ||||
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 | |||
Net other postretirement benefit liability | $ 1.5 | |||
Net Sales | $ 4 | 1.4 | ||
RRD Affiliates | ||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Cost of sales to RRD and affiliates | $ 28.7 | $ 31.6 | ||
Underwritten Public Offering [Member] | R.R. Donnelley & Sons Company | ||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Number of common stock sold | 6.2 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Net [Abstract] | ||
Raw materials and manufacturing supplies | $ 9.7 | $ 7.6 |
Work in process | 11.3 | 10.8 |
Finished goods | 6.5 | 5.7 |
Total | $ 27.5 | $ 24.1 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Company's Property, Plant and Equipment (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 163.5 | $ 163.6 |
Less: Accumulated depreciation | (127.5) | (128.1) |
Total | 36 | 35.5 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 10 | 10 |
Buildings | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 44.5 | 44.4 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 109 | $ 109.2 |
Property, Plant and Equipment37
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 1.3 | $ 1.9 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets - Schedule of Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill [Line Items] | |
Goodwill net book value, beginning balance | $ 446.4 |
Foreign exchange and other adjustments | 0.1 |
Goodwill net book value, ending balance | 446.5 |
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 | 17.2 |
Foreign exchange and other adjustments | 0.1 |
Goodwill net book value, ending balance | $ 17.3 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 148.7 | $ 148.3 |
Accumulated Amortization | (97.8) | (94) |
Net Book Value | 50.9 | 54.3 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 139.2 | 138.8 |
Accumulated Amortization | (89.1) | (85.3) |
Net Book Value | 50.1 | 53.5 |
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 | 3.2 |
Accumulated Amortization | (3.2) | (3.2) |
Net Book Value | $ 0 | $ 0 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense for other intangible assets | $ 3.6 | $ 3.6 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets - Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets (Detail) $ in Millions | Mar. 31, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,017 | $ 13.9 |
2,018 | 13.7 |
2,019 | 13.7 |
2,020 | 12.4 |
2,021 | 0.5 |
2022 and thereafter | 0.3 |
Total | $ 54.5 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Details) - R.R. Donnelley & Sons Company - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Oct. 01, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Pension cost and other postretirement benefits | $ 1.4 | |
Net pension plan liabilities | $ 68.3 | |
Total benefit plan liability | 317 | |
Plan assets, fair market value | 248.7 | |
Net other postretirement benefit liability | $ 1.5 | |
Other Postretirement Benefit Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pension cost and other postretirement benefits | $ 0.3 |
Retirement Plans - Components o
Retirement Plans - Components of Estimated Net Pension Plan Income (Detail) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Pension expense (income) | ||
Interest cost | $ 2.7 | $ 0 |
Expected return on assets | (4) | 0 |
Amortization, net | 0.5 | (0.2) |
Net pension income | $ (0.8) | $ (0.2) |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | $ 1,100,000 | $ 300,000 |
Stock options granted | 170,000 | |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation award, vesting period | 4 years | |
Stock options granted | 169,800 | 0 |
Share-based compensation award, grant date fair market value | $ 7.77 | |
Excess tax benefit on stock options exercises, shown as operating cash inflows | $ 0 | |
Unrecognized share-based compensation expense | $ 1,300,000 | |
Unrecognized share-based compensation expense, vest over weighted-average period | 3 years 10 months 24 days | |
RSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation award, vesting period | 3 years | |
Share-based compensation | $ 600,000 | $ 300,000 |
Unrecognized share-based compensation expense | $ 7,800,000 | |
Unrecognized share-based compensation expense, vest over weighted-average period | 2 years 6 months | |
Unrecognized share-based compensation expense, expected to vest, Shares | 600,000 | |
Unrecognized share-based compensation expense, weighted-average grant date fair value | $ 23.52 | |
Share-based compensation award, granted | 220,000 | |
Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | $ 500,000 | |
Unrecognized share-based compensation expense | $ 5,000,000 | |
Unrecognized share-based compensation expense, vest over weighted-average period | 2 years 8 months 12 days | |
Share-based compensation award, granted | 129,000 | |
Share-based compensation expense, targeted performance percentage | 100.00% | |
Restricted Stock | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Potential payout for awards | 0 | |
Restricted Stock | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Potential payout for awards | 129,400 | |
Restricted Stock | Certain Executives | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation award, granted | 129,400 | |
Performance Share Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized share-based compensation expense | $ 700,000 | |
Unrecognized share-based compensation expense, vest over weighted-average period | 2 years 10 months 24 days | |
Share-based compensation expense, targeted performance percentage | 100.00% | |
Performance Share Units | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Potential payout for awards | 0 | |
Performance Share Units | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Potential payout for awards | 47,850 | |
Performance Share Units | Certain Executive Officers and Senior Management | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation award, granted | 31,900 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Assumptions Used to Determine Fair Market Value of Stock Options Granted (Details) - Stock Options | 3 Months Ended |
Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected volatility | 30.73% |
Risk-free interest rate | 2.18% |
Expected life (years) | 6 years 3 months |
Expected dividend yield | 0.00% |
Share-Based Compensation - Su46
Share-Based Compensation - Summary of Stock Option Awards Outstanding Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Shares Under Option | ||
Outstanding at beginning of period | 299 | |
Granted | 170 | |
Outstanding at end of period | 469 | 299 |
Vested and expected to vest at end of period | 458 | |
Exercisable at end of period | 119 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of period | $ 21.48 | |
Granted | 22.35 | |
Outstanding at end of period | 21.80 | $ 21.48 |
Vested and expected to vest at end of period | 21.78 | |
Exercisable at end of period | $ 11.95 | |
Weighted Average Remaining Contractual Term (years) | ||
Outstanding at beginning of period | 5 years 7 months 6 days | 3 years 6 months |
Granted | 9 years 10 months 24 days | |
Vested and expected to vest at end of period | 5 years 6 months | |
Exercisable at end of period | 1 year 10 months 24 days | |
Aggregate Intrinsic Value | ||
Outstanding at beginning of period | $ 1.4 | |
Outstanding at end of period | 0.9 | $ 1.4 |
Vested and expected to vest at end of period | 0.9 | |
Exercisable at end of period | $ 0.9 |
Share-Based Compensation - Nonv
Share-Based Compensation - Nonvested Restricted Stock Unit Awards (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
RSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Nonvested at beginning of period, Shares | shares | 436 |
Granted, Shares | shares | 220 |
Vested, Shares | shares | (86) |
Nonvested at end of period, Shares | shares | 570 |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 25.28 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 22.35 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 0 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 23.52 |
Restricted Stock | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Nonvested at beginning of period, Shares | shares | 156 |
Granted, Shares | shares | 129 |
Nonvested at end of period, Shares | shares | 285 |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 24.75 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 22.35 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 23.66 |
Equity - Schedule of the Compan
Equity - Schedule of the Company's Equity Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Equity [Line Items] | ||
Beginning Balance | $ 111.1 | $ 623.5 |
Net earnings | 9.3 | 13.4 |
Transfers to parent company, net | 43.9 | |
Other comprehensive income | 0.5 | 2.8 |
Separation-related adjustments | 3.1 | |
Share-based compensation | 1.1 | |
Issuance of share-based awards, net of withholdings and other | (0.6) | |
Ending Balance | 124.5 | 683.6 |
Net Parent Company Investment | ||
Equity [Line Items] | ||
Beginning Balance | 639.5 | |
Net earnings | 13.4 | |
Transfers to parent company, net | 43.9 | |
Other comprehensive income | 0 | |
Ending Balance | 696.8 | |
Accumulated Other Comprehensive Loss | ||
Equity [Line Items] | ||
Beginning Balance | (68.3) | (16) |
Net earnings | 0 | |
Transfers to parent company, net | 0 | |
Other comprehensive income | 2.8 | |
Ending Balance | $ (67.8) | $ (13.2) |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) shares in Millions | Oct. 01, 2016shares | Mar. 31, 2017shares | Sep. 30, 2016shares |
Earnings Per Share [Line Items] | |||
Distribution of common shares during spinoff | 26.2 | ||
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 | ||
Basic and diluted common shares outstanding | 32.4 | ||
R.R. Donnelley & Sons Company | Spinoff | |||
Earnings Per Share [Line Items] | |||
Number of common stock retained | 6.2 | ||
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. | ||
Conversion ratio of common stock received during spinoff | 0.125 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation of Numerator and Denominator of Basic and Diluted Earnings per Share Calculation and Anti-dilutive Share-based Awards (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share Basic And Diluted [Line Items] | ||
Basic | $ 0.29 | $ 0.41 |
Diluted | $ 0.28 | $ 0.41 |
Net earnings | $ 9.3 | $ 13.4 |
Weighted average number of common shares outstanding | 32.6 | 32.4 |
Dilutive awards | 0.2 | 0 |
Diluted weighted average number of common shares outstanding | 32.8 | 32.4 |
Total weighted average number of anti-dilutive share-based awards | 0.2 | 0 |
Restricted stock units | ||
Earnings Per Share Basic And Diluted [Line Items] | ||
Total weighted average number of anti-dilutive share-based awards | 0.1 | 0 |
Stock options | ||
Earnings Per Share Basic And Diluted [Line Items] | ||
Total weighted average number of anti-dilutive share-based awards | 0.1 | 0 |
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 | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive (loss) income, Before Tax Amount | $ 0.6 | $ 2.8 |
Other comprehensive (loss) income, Income Tax Expense | 0.1 | 0 |
Other comprehensive income, net of tax | 0.5 | 2.8 |
Translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive (loss) income, Before Tax Amount | 0.1 | 3 |
Other comprehensive (loss) income, Income Tax Expense | 0 | 0 |
Other comprehensive income, net of tax | 0.1 | 3 |
Adjustment for Net Periodic Pension Plan and Other Postretirement Benefits Plan Cost | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive (loss) income, Before Tax Amount | 0.5 | (0.2) |
Other comprehensive (loss) income, Income Tax Expense | 0.1 | 0 |
Other comprehensive income, net of tax | $ 0.4 | $ (0.2) |
Comprehensive Income - Schedu52
Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ 111.1 | $ 623.5 |
Ending Balance | 124.5 | 683.6 |
Pension and Other Postretirement Benefits Plan Cost | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (52.2) | 0 |
Other comprehensive income before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0.4 | (0.2) |
Net change in accumulated other comprehensive loss | 0.4 | (0.2) |
Ending Balance | (51.8) | (0.2) |
Translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (16.1) | (16) |
Other comprehensive income before reclassifications | 0.1 | 3 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Net change in accumulated other comprehensive loss | 0.1 | 3 |
Ending Balance | (16) | (13) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (68.3) | (16) |
Other comprehensive income before reclassifications | 0.1 | 3 |
Amounts reclassified from accumulated other comprehensive loss | 0.4 | (0.2) |
Net change in accumulated other comprehensive loss | 0.5 | 2.8 |
Ending Balance | $ (67.8) | $ (13.2) |
Comprehensive Income - Reclassi
Comprehensive Income - Reclassifications from Accumulated Other Comprehensive Loss Amortization of Pension Plan Cost (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Accumulated Defined Benefit Plans Adjustment, Net Actuarial Income | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Amortization of pension and other postretirement benefits plan cost: Reclassifications before tax | [1] | $ 0.5 | $ (0.2) |
Pension and Other Postretirement Benefits Plan Cost | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Amortization of pension and other postretirement benefits plan cost: Reclassifications before tax | 0.5 | (0.2) | |
Income tax expense | 0.1 | 0 | |
Reclassifications, net of tax | $ 0.4 | $ (0.2) | |
[1] | These accumulated other comprehensive loss components are included in the calculation of net periodic pension and other postretirement benefits plan (income) expense, a component of which was allocated to Donnelley Financial in periods prior to the Separation, and recognized in cost of sales and selling, general and administrative expenses in the unaudited condensed consolidated and 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 | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Net Sales | $ 267.3 | $ 240.1 | |
Income (Loss) from Operations | 27.2 | 22.5 | |
Assets of Operations | 1,024.6 | 875.6 | $ 978.9 |
Depreciation and amortization | 10.2 | 9.5 | |
Capital Expenditures | 4.3 | 8.5 | |
Total Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 270.2 | 242.3 | |
Income (Loss) from Operations | 37.2 | 25 | |
Assets of Operations | 834.8 | 805.7 | |
Depreciation and amortization | 10.2 | 9.4 | |
Capital Expenditures | 4.3 | 5.9 | |
Intersegment Sales | |||
Segment Reporting Information [Line Items] | |||
Net Sales | (2.9) | (2.2) | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Income (Loss) from Operations | (10) | (2.5) | |
Assets of Operations | 189.8 | 69.9 | |
Depreciation and amortization | 0 | 0.1 | |
Capital Expenditures | 0 | 2.6 | |
U.S. | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 230.4 | 208.1 | |
U.S. | Total Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 232.9 | 209.6 | |
Income (Loss) from Operations | 37 | 22 | |
Assets of Operations | 740.2 | 713 | |
Depreciation and amortization | 8.8 | 8.3 | |
Capital Expenditures | 3.9 | 5.6 | |
U.S. | Intersegment Sales | |||
Segment Reporting Information [Line Items] | |||
Net Sales | (2.5) | (1.5) | |
International | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 36.9 | 32 | |
International | Total Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 37.3 | 32.7 | |
Income (Loss) from Operations | 0.2 | 3 | |
Assets of Operations | 94.6 | 92.7 | |
Depreciation and amortization | 1.4 | 1.1 | |
Capital Expenditures | 0.4 | 0.3 | |
International | Intersegment Sales | |||
Segment Reporting Information [Line Items] | |||
Net Sales | $ (0.4) | $ (0.7) |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Apr. 03, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Apr. 25, 2017 |
Debt Instrument [Line Items] | ||||||
Amount of difference between fair value and book value | $ 5,500,000 | $ 7,100,000 | ||||
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 | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | ||
Interest rate, stated percentage | 8.25% | 8.25% | 8.25% | 8.25% | ||
Maturity date | Oct. 15, 2024 | Oct. 15, 2024 | Oct. 15, 2024 | |||
8.25% Senior Notes Due October 15, 2024 | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes | $ 299,900,000 | |||||
R.R. Donnelley & Sons Company | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 340,200,000 | |||||
R.R. Donnelley & Sons Company | Subsequent Event | Separation and Distribution Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Cash payment received from RR Donnelley | $ 68,000,000 | |||||
Senior Secured Term Loan B Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility | $ 350,000,000 | 350,000,000 | ||||
Outstanding borrowings | $ 298,400,000 | $ 298,300,000 | ||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility | 300,000,000 | 300,000,000 | ||||
Outstanding borrowings | $ 20,000,000 | $ 0 | ||||
Weighted average interest rate on borrowings | 4.20% | |||||
Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Allowable annual dividend payment under credit agreement | $ 15,000,000 | $ 15,000,000 |
Debt - Schedule of the Company'
Debt - Schedule of the Company's Debt (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (10.9) | $ (11.3) | |
Total debt | 607.5 | 587 | |
Less: current portion | 0 | 0 | |
Long-term debt (Note 11) | 607.5 | 587 | |
8.25% Senior Notes Due October 15, 2024 | |||
Debt Instrument [Line Items] | |||
Senior notes | 300 | 300 | $ 300 |
Senior Secured Term Loan B Facility | |||
Debt Instrument [Line Items] | |||
Credit facility | 298.4 | 298.3 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 20 | $ 0 |
Debt - Schedule of the Compan57
Debt - Schedule of the Company's Debt (Parenthetical) (Details) - 8.25% Senior Notes Due October 15, 2024 | Sep. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 8.25% | 8.25% | 8.25% |
Maturity date | Oct. 15, 2024 | Oct. 15, 2024 | Oct. 15, 2024 |
Related Parties - Additional In
Related Parties - Additional Information (Details) - USD ($) $ in Millions | Apr. 03, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Oct. 01, 2016 |
Related Party Transaction [Line Items] | ||||
Net Sales | $ 267.3 | $ 240.1 | ||
Cost of sales | 63 | 55 | ||
Share-based compensation costs | 0.3 | |||
Outsourcing Business | ||||
Related Party Transaction [Line Items] | ||||
Cost of sales | 9.9 | 11.2 | ||
R.R. Donnelley & Sons Company | ||||
Related Party Transaction [Line Items] | ||||
Net Sales | $ 4 | 1.4 | ||
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, premedia 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 | |||
Separation and Distribution Agreement | R.R. Donnelley & Sons Company | Subsequent Event | ||||
Related Party Transaction [Line Items] | ||||
Cash payment received from RR Donnelley | $ 68 | |||
Freight and Logistics and Services | R.R. Donnelley & Sons Company | Printed Products | ||||
Related Party Transaction [Line Items] | ||||
Cost of sales | $ 18.8 | $ 20.4 |
Related Parties - Summary of Am
Related Parties - Summary of Amount in Unaudited Condensed Consolidated and Combined Balance Sheet Due or From Related Parties (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due from related parties | $ 84.2 | $ 96 |
R.R. Donnelley & Sons Company | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 84.2 | 96 |
Due to related parties | 23.4 | 27.1 |
LSC Communications, Inc | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 0.8 | 0.8 |
Due to related parties | 4.4 | 2.5 |
R.R. Donnelley Affiliates | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 85 | 96.8 |
Due to related parties | $ 27.8 | $ 29.6 |
Related Parties - Schedule of A
Related Parties - Schedule of Allocation of Expenses Reflected in Unaudited Condensed Consolidated and Combined Financial Statements (Details) - R.R. Donnelley & Sons Company $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |
Total allocations from RRD | $ 54.4 |
Costs of goods sold | |
Related Party Transaction [Line Items] | |
Total allocations from RRD | 10.3 |
Selling, general and administrative | |
Related Party Transaction [Line Items] | |
Total allocations from RRD | 39.3 |
Depreciation and amortization | |
Related Party Transaction [Line Items] | |
Total allocations from RRD | $ 4.8 |
Guarantor Financial Informati61
Guarantor Financial Information - Additional Information (Details) | Mar. 31, 2017 |
Guarantor Subsidiaries | |
Condensed Income Statements Captions [Line Items] | |
Percentage of ownership in directly owned subsidiaries | 100.00% |
Guarantor Financial Informati62
Guarantor Financial Information - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Condensed Income Statements Captions [Line Items] | ||
Services net sales | $ 154 | $ 139.8 |
Products net sales | 113.3 | 100.3 |
Total net sales | 267.3 | 240.1 |
Services cost of sales (exclusive of depreciation and amortization) | 77.7 | 71.9 |
Products cost of sales (exclusive of depreciation and amortization) | 63 | 55 |
Total cost of sales | 169.4 | 158.5 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 56.7 | 49 |
Restructuring, impairment and other charges-net | 3.8 | 0.6 |
Depreciation and amortization | 10.2 | 9.5 |
Income from operations | 27.2 | 22.5 |
Interest expense-net | 11.1 | 0.3 |
Earnings (loss) before income taxes and equity in net income of subsidiaries | 16.1 | 22.2 |
Income tax (benefit) expense | 6.8 | 8.8 |
Earnings (loss) before equity in net income of subsidiaries | 9.3 | 13.4 |
Equity in net income of subsidiaries | 0 | 0 |
Net earnings | 9.3 | 13.4 |
Comprehensive income (loss) | 9.8 | 16.2 |
Eliminations | ||
Condensed Income Statements Captions [Line Items] | ||
Services net sales | (1.6) | (1.3) |
Products net sales | (1.3) | (0.9) |
Total net sales | (2.9) | (2.2) |
Services cost of sales (exclusive of depreciation and amortization) | (1.5) | (1.2) |
Products cost of sales (exclusive of depreciation and amortization) | (1.4) | (1) |
Total cost of sales | (2.9) | (2.2) |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 0 | 0 |
Restructuring, impairment and other charges-net | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Income from operations | 0 | 0 |
Interest expense-net | 0 | 0 |
Earnings (loss) before income taxes and equity in net income of subsidiaries | 0 | 0 |
Income tax (benefit) expense | 0 | 0 |
Earnings (loss) before equity in net income of subsidiaries | 0 | 0 |
Equity in net income of subsidiaries | (16) | (15.2) |
Net earnings | (16) | (15.2) |
Comprehensive income (loss) | (16.6) | (21) |
Parent | ||
Condensed Income Statements Captions [Line Items] | ||
Services net sales | 0 | 0 |
Products net sales | 0 | 0 |
Total net sales | 0 | 0 |
Services cost of sales (exclusive of depreciation and amortization) | 0 | 0 |
Products cost of sales (exclusive of depreciation and amortization) | 0 | 0 |
Total cost of sales | 0 | 0 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 0 | 0 |
Restructuring, impairment and other charges-net | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Income from operations | 0 | 0 |
Interest expense-net | 11.3 | 0 |
Earnings (loss) before income taxes and equity in net income of subsidiaries | (11.3) | 0 |
Income tax (benefit) expense | (4.7) | 0 |
Earnings (loss) before equity in net income of subsidiaries | (6.6) | 0 |
Equity in net income of subsidiaries | 15.9 | 13.4 |
Net earnings | 9.3 | 13.4 |
Comprehensive income (loss) | 9.8 | 16.2 |
Guarantor Subsidiaries | ||
Condensed Income Statements Captions [Line Items] | ||
Services net sales | 128.6 | 117.2 |
Products net sales | 104.3 | 92.4 |
Total net sales | 232.9 | 209.6 |
Services cost of sales (exclusive of depreciation and amortization) | 61.3 | 58.2 |
Products cost of sales (exclusive of depreciation and amortization) | 57 | 49.8 |
Total cost of sales | 146.4 | 139 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 47.6 | 42.1 |
Restructuring, impairment and other charges-net | 3.1 | 0.6 |
Depreciation and amortization | 8.8 | 8.4 |
Income from operations | 27 | 19.5 |
Interest expense-net | (0.2) | 0.3 |
Earnings (loss) before income taxes and equity in net income of subsidiaries | 27.2 | 19.2 |
Income tax (benefit) expense | 11.4 | 7.6 |
Earnings (loss) before equity in net income of subsidiaries | 15.8 | 11.6 |
Equity in net income of subsidiaries | 0.1 | 1.8 |
Net earnings | 15.9 | 13.4 |
Comprehensive income (loss) | 16.4 | 16.2 |
Non-guarantor Subsidiaries | ||
Condensed Income Statements Captions [Line Items] | ||
Services net sales | 27 | 23.9 |
Products net sales | 10.3 | 8.8 |
Total net sales | 37.3 | 32.7 |
Services cost of sales (exclusive of depreciation and amortization) | 17.9 | 14.9 |
Products cost of sales (exclusive of depreciation and amortization) | 7.4 | 6.2 |
Total cost of sales | 25.9 | 21.7 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 9.1 | 6.9 |
Restructuring, impairment and other charges-net | 0.7 | 0 |
Depreciation and amortization | 1.4 | 1.1 |
Income from operations | 0.2 | 3 |
Interest expense-net | 0 | 0 |
Earnings (loss) before income taxes and equity in net income of subsidiaries | 0.2 | 3 |
Income tax (benefit) expense | 0.1 | 1.2 |
Earnings (loss) before equity in net income of subsidiaries | 0.1 | 1.8 |
Equity in net income of subsidiaries | 0 | 0 |
Net earnings | 0.1 | 1.8 |
Comprehensive income (loss) | 0.2 | 4.8 |
R.R. Donnelley Affiliates | ||
Condensed Income Statements Captions [Line Items] | ||
Services cost of sales (exclusive of depreciation and amortization) | 9.9 | 11.2 |
Products cost of sales (exclusive of depreciation and amortization) | 18.8 | 20.4 |
R.R. Donnelley Affiliates | Eliminations | ||
Condensed Income Statements Captions [Line Items] | ||
Services cost of sales (exclusive of depreciation and amortization) | 0 | 0 |
Products cost of sales (exclusive of depreciation and amortization) | 0 | 0 |
R.R. Donnelley Affiliates | Parent | ||
Condensed Income Statements Captions [Line Items] | ||
Services cost of sales (exclusive of depreciation and amortization) | 0 | 0 |
Products cost of sales (exclusive of depreciation and amortization) | 0 | 0 |
R.R. Donnelley Affiliates | Guarantor Subsidiaries | ||
Condensed Income Statements Captions [Line Items] | ||
Services cost of sales (exclusive of depreciation and amortization) | 9.4 | 10.6 |
Products cost of sales (exclusive of depreciation and amortization) | 18.7 | 20.4 |
R.R. Donnelley Affiliates | Non-guarantor Subsidiaries | ||
Condensed Income Statements Captions [Line Items] | ||
Services cost of sales (exclusive of depreciation and amortization) | 0.5 | 0.6 |
Products cost of sales (exclusive of depreciation and amortization) | $ 0.1 | $ 0 |
Guarantor Financial Informati63
Guarantor Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 12.3 | $ 36.2 | $ 15 | $ 15.1 |
Receivables, less allowances | 233.3 | 156.2 | ||
Receivables from R.R. Donnelley | 84.2 | 96 | ||
Intercompany receivables | 0 | 0 | ||
Intercompany short-term note receivable | 0 | 0 | ||
Inventories | 27.5 | 24.1 | ||
Prepaid expenses and other current assets | 17.3 | 17.1 | ||
Total current assets | 374.6 | 329.6 | ||
Property, plant and equipment-net | 36 | 35.5 | ||
Goodwill | 446.5 | 446.4 | ||
Other intangible assets-net | 50.9 | 54.3 | ||
Software-net | 39.3 | 41.6 | ||
Deferred income taxes | 39.1 | 37 | ||
Other noncurrent assets | 38.2 | 34.5 | ||
Investments in consolidated subsidiaries | 0 | 0 | ||
Total assets | 1,024.6 | 978.9 | 875.6 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Accounts payable | 101.3 | 85.3 | ||
Intercompany payable | 0 | 0 | ||
Intercompany short-term note payable | 0 | 0 | ||
Accrued liabilities | 99.8 | 100.7 | ||
Total current liabilities | 201.1 | 186 | ||
Long-term debt | 607.5 | 587 | ||
Deferred compensation liabilities | 23.1 | 24.4 | ||
Pension and other postretirement benefits plan liabilities | 55 | 56.4 | ||
Other noncurrent liabilities | 13.4 | 14 | ||
Total liabilities | 900.1 | 867.8 | ||
Total equity | 124.5 | 111.1 | 683.6 | 623.5 |
Total liabilities and equity | 1,024.6 | 978.9 | ||
Eliminations | ||||
ASSETS | ||||
Cash and cash equivalents | (17.2) | (2.4) | 0 | 0 |
Receivables, less allowances | 0 | 0 | ||
Receivables from R.R. Donnelley | 0 | 0 | ||
Intercompany receivables | (34.1) | (63) | ||
Intercompany short-term note receivable | (21) | (15.3) | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | (6.7) | 0 | ||
Total current assets | (79) | (80.7) | ||
Property, plant and equipment-net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets-net | 0 | 0 | ||
Software-net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other noncurrent assets | 0 | 0 | ||
Investments in consolidated subsidiaries | (777.3) | (757.3) | ||
Total assets | (856.3) | (838) | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Accounts payable | (19.1) | (2.4) | ||
Intercompany payable | (32.2) | (62.5) | ||
Intercompany short-term note payable | (21) | (15.3) | ||
Accrued liabilities | (6.7) | (0.5) | ||
Total current liabilities | (79) | (80.7) | ||
Long-term debt | 0 | 0 | ||
Deferred compensation liabilities | 0 | 0 | ||
Pension and other postretirement benefits plan liabilities | 0 | 0 | ||
Other noncurrent liabilities | 0 | 0 | ||
Total liabilities | (79) | (80.7) | ||
Total equity | (777.3) | (757.3) | ||
Total liabilities and equity | (856.3) | (838) | ||
Parent | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Receivables, less allowances | 0 | 0 | ||
Receivables from R.R. Donnelley | 68 | 68 | ||
Intercompany receivables | 0 | 0 | ||
Intercompany short-term note receivable | 0 | 0 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 4.5 | 4.3 | ||
Total current assets | 72.5 | 72.3 | ||
Property, plant and equipment-net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets-net | 0 | 0 | ||
Software-net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other noncurrent assets | 4.2 | 4.4 | ||
Investments in consolidated subsidiaries | 711.3 | 692.2 | ||
Total assets | 788 | 768.9 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Accounts payable | 17.2 | 3.4 | ||
Intercompany payable | 10 | 43.9 | ||
Intercompany short-term note payable | 21 | 15.3 | ||
Accrued liabilities | 7.8 | 8.2 | ||
Total current liabilities | 56 | 70.8 | ||
Long-term debt | 607.5 | 587 | ||
Deferred compensation liabilities | 0 | 0 | ||
Pension and other postretirement benefits plan liabilities | 0 | 0 | ||
Other noncurrent liabilities | 0 | 0 | ||
Total liabilities | 663.5 | 657.8 | ||
Total equity | 124.5 | 111.1 | ||
Total liabilities and equity | 788 | 768.9 | ||
Guarantor Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 19.2 | 21.8 | 0.2 | 0.1 |
Receivables, less allowances | 193.1 | 119.9 | ||
Receivables from R.R. Donnelley | 14.9 | 28 | ||
Intercompany receivables | 34.1 | 63 | ||
Intercompany short-term note receivable | 0 | 0 | ||
Inventories | 25.5 | 22.7 | ||
Prepaid expenses and other current assets | 14.4 | 8.1 | ||
Total current assets | 301.2 | 263.5 | ||
Property, plant and equipment-net | 32.8 | 32.4 | ||
Goodwill | 429.2 | 429.2 | ||
Other intangible assets-net | 41.1 | 44 | ||
Software-net | 38.8 | 41 | ||
Deferred income taxes | 35.4 | 34.2 | ||
Other noncurrent assets | 30.9 | 27.7 | ||
Investments in consolidated subsidiaries | 66 | 65.1 | ||
Total assets | 975.4 | 937.1 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Accounts payable | 91.2 | 72.8 | ||
Intercompany payable | 0 | 0 | ||
Intercompany short-term note payable | 0 | 0 | ||
Accrued liabilities | 85 | 81.4 | ||
Total current liabilities | 176.2 | 154.2 | ||
Long-term debt | 0 | 0 | ||
Deferred compensation liabilities | 23.1 | 24.4 | ||
Pension and other postretirement benefits plan liabilities | 53.9 | 55.3 | ||
Other noncurrent liabilities | 10.9 | 11 | ||
Total liabilities | 264.1 | 244.9 | ||
Total equity | 711.3 | 692.2 | ||
Total liabilities and equity | 975.4 | 937.1 | ||
Non-guarantor Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 10.3 | 16.8 | $ 14.8 | $ 15 |
Receivables, less allowances | 40.2 | 36.3 | ||
Receivables from R.R. Donnelley | 1.3 | 0 | ||
Intercompany receivables | 0 | 0 | ||
Intercompany short-term note receivable | 21 | 15.3 | ||
Inventories | 2 | 1.4 | ||
Prepaid expenses and other current assets | 5.1 | 4.7 | ||
Total current assets | 79.9 | 74.5 | ||
Property, plant and equipment-net | 3.2 | 3.1 | ||
Goodwill | 17.3 | 17.2 | ||
Other intangible assets-net | 9.8 | 10.3 | ||
Software-net | 0.5 | 0.6 | ||
Deferred income taxes | 3.7 | 2.8 | ||
Other noncurrent assets | 3.1 | 2.4 | ||
Investments in consolidated subsidiaries | 0 | 0 | ||
Total assets | 117.5 | 110.9 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Accounts payable | 12 | 11.5 | ||
Intercompany payable | 22.2 | 18.6 | ||
Intercompany short-term note payable | 0 | 0 | ||
Accrued liabilities | 13.7 | 11.6 | ||
Total current liabilities | 47.9 | 41.7 | ||
Long-term debt | 0 | 0 | ||
Deferred compensation liabilities | 0 | 0 | ||
Pension and other postretirement benefits plan liabilities | 1.1 | 1.1 | ||
Other noncurrent liabilities | 2.5 | 3 | ||
Total liabilities | 51.5 | 45.8 | ||
Total equity | 66 | 65.1 | ||
Total liabilities and equity | $ 117.5 | $ 110.9 |
Guarantor Financial Informati64
Guarantor Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | $ (38.2) | $ (43.7) |
INVESTING ACTIVITIES | ||
Capital expenditures | (4.3) | (8.5) |
Purchase of investment | (3.4) | 0 |
Other investing activities | 0.2 | 2.4 |
Net cash used in investing activities | (7.5) | (6.1) |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 57 | 0 |
Payments on revolving facility borrowings | (37) | 0 |
Net change in short-term debt | 0 | 6.9 |
Debt issuance costs | (1.5) | 0 |
Intercompany note payable (receivable) | 0 | |
Net transfers related to the Separation | 3.1 | 0 |
Other financing activities | 0 | 0.2 |
Net transfers from Parent and affiliates | 0 | 39.7 |
Net cash provided by financing activities | 21.6 | 46.8 |
Effect of exchange rate on cash and cash equivalents | 0.2 | 2.9 |
Net decrease in cash and cash equivalents | (23.9) | (0.1) |
Cash and cash equivalents at beginning of year | 36.2 | 15.1 |
Cash and cash equivalents at end of period | 12.3 | 15 |
Eliminations | ||
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | (14.8) | 0 |
INVESTING ACTIVITIES | ||
Capital expenditures | 0 | 0 |
Purchase of investment | 0 | |
Other investing activities | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 0 | |
Payments on revolving facility borrowings | 0 | |
Net change in short-term debt | 0 | |
Debt issuance costs | 0 | |
Intercompany note payable (receivable) | 0 | |
Net transfers related to the Separation | 0 | |
Other financing activities | 0 | |
Net transfers from Parent and affiliates | 0 | |
Net cash provided by financing activities | 0 | 0 |
Effect of exchange rate on cash and cash equivalents | 0 | 0 |
Net decrease in cash and cash equivalents | (14.8) | 0 |
Cash and cash equivalents at beginning of year | (2.4) | 0 |
Cash and cash equivalents at end of period | (17.2) | 0 |
Parent | ||
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | (27.3) | 0 |
INVESTING ACTIVITIES | ||
Capital expenditures | 0 | 0 |
Purchase of investment | 0 | |
Other investing activities | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 57 | |
Payments on revolving facility borrowings | (37) | |
Net change in short-term debt | 0 | |
Debt issuance costs | (1.5) | |
Intercompany note payable (receivable) | 5.7 | |
Net transfers related to the Separation | 3.1 | |
Other financing activities | 0 | |
Net transfers from Parent and affiliates | 0 | |
Net cash provided by financing activities | 27.3 | 0 |
Effect of exchange rate on cash and cash equivalents | 0 | 0 |
Net decrease in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of year | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Guarantor Subsidiaries | ||
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | 4.5 | (41) |
INVESTING ACTIVITIES | ||
Capital expenditures | (3.9) | (8.2) |
Purchase of investment | (3.4) | |
Other investing activities | 0.2 | 2 |
Net cash used in investing activities | (7.1) | (6.2) |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 0 | |
Payments on revolving facility borrowings | 0 | |
Net change in short-term debt | 0 | |
Debt issuance costs | 0 | |
Intercompany note payable (receivable) | 0 | |
Net transfers related to the Separation | 0 | |
Other financing activities | 0.2 | |
Net transfers from Parent and affiliates | 47.1 | |
Net cash provided by financing activities | 0 | 47.3 |
Effect of exchange rate on cash and cash equivalents | 0 | 0 |
Net decrease in cash and cash equivalents | (2.6) | 0.1 |
Cash and cash equivalents at beginning of year | 21.8 | 0.1 |
Cash and cash equivalents at end of period | 19.2 | 0.2 |
Non-guarantor Subsidiaries | ||
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | (0.6) | (2.7) |
INVESTING ACTIVITIES | ||
Capital expenditures | (0.4) | (0.3) |
Purchase of investment | 0 | |
Other investing activities | 0 | 0.4 |
Net cash used in investing activities | (0.4) | 0.1 |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 0 | |
Payments on revolving facility borrowings | 0 | |
Net change in short-term debt | 6.9 | |
Debt issuance costs | 0 | |
Intercompany note payable (receivable) | (5.7) | |
Net transfers related to the Separation | 0 | |
Other financing activities | 0 | |
Net transfers from Parent and affiliates | (7.4) | |
Net cash provided by financing activities | (5.7) | (0.5) |
Effect of exchange rate on cash and cash equivalents | 0.2 | 2.9 |
Net decrease in cash and cash equivalents | (6.5) | (0.2) |
Cash and cash equivalents at beginning of year | 16.8 | 15 |
Cash and cash equivalents at end of period | $ 10.3 | $ 14.8 |