Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | DFIN | |
Entity Registrant Name | Donnelley Financial Solutions, Inc. | |
Entity Central Index Key | 1,669,811 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,700,000 |
Condensed Consolidated and Comb
Condensed Consolidated and Combined Statements of Operations (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |||
Services net sales | $ 140.3 | $ 139.4 | $ 471.4 | $ 454.1 | ||
Products net sales | 82.3 | 85 | 308.7 | 308.4 | ||
Total net sales | 222.6 | 224.4 | 780.1 | 762.5 | ||
Services cost of sales (exclusive of depreciation and amortization) | 81.7 | 64.2 | 240.2 | 214.6 | ||
Products cost of sales (exclusive of depreciation and amortization) | 58.9 | 62 | 190.7 | 179.9 | ||
Total cost of sales | 140.6 | 146.4 | 482.7 | 472.5 | ||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 54 | 48.5 | 171.2 | 156.8 | ||
Restructuring, impairment and other charges-net | (0.6) | 1.7 | 6.4 | 3.6 | ||
Depreciation and amortization | 10.6 | 9.8 | 31.7 | 30.1 | ||
Income from operations | 18 | 18 | 88.1 | 99.5 | ||
Interest expense (income)-net | 10.6 | (0.1) | 32.7 | 0.3 | ||
Earnings before income taxes | 7.4 | 18.1 | 55.4 | 99.2 | ||
Income tax expense | 2.1 | 7.9 | 22 | 39.3 | ||
Net earnings | $ 5.3 | $ 10.2 | $ 33.4 | $ 59.9 | ||
Net earnings per share (Note 8): | ||||||
Basic net earnings per share | $ 0.16 | $ 0.31 | $ 1.01 | $ 1.85 | ||
Diluted net earnings per share | $ 0.16 | $ 0.31 | $ 1.01 | $ 1.85 | ||
Weighted average number of common shares outstanding | ||||||
Basic | 33.6 | 32.4 | 33 | 32.4 | ||
Diluted | 33.8 | 32.4 | 33.2 | 32.4 | ||
R.R. Donnelley Affiliates | ||||||
Total net sales | $ 1.1 | $ 3.6 | ||||
Services cost of sales (exclusive of depreciation and amortization) | [1] | $ 0 | 8.7 | $ 19.5 | [2] | 29.4 |
Products cost of sales (exclusive of depreciation and amortization) | [1] | $ 0 | $ 11.5 | $ 32.3 | [2] | $ 48.6 |
[1] | Beginning in the quarter ended September 30, 2017, R.R. Donnelley & Sons Company ("RRD") no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. | |||||
[2] | Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. |
Condensed Consolidated and Com3
Condensed Consolidated and Combined Statements of Comprehensive Income (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net earnings | $ 5.3 | $ 10.2 | $ 33.4 | $ 59.9 |
Other comprehensive income (loss), net of tax: | ||||
Translation adjustments | 2.2 | 0.2 | 4.6 | 4.2 |
Adjustment for net periodic pension and other postretirement benefits plan cost | 0.3 | (0.2) | 1 | (0.4) |
Other comprehensive income, net of tax | 2.5 | 0 | 5.6 | 3.8 |
Comprehensive income | $ 7.8 | $ 10.2 | $ 39 | $ 63.7 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (UNAUDITED) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | |
ASSETS | |||
Cash and cash equivalents | $ 32.2 | $ 36.2 | |
Receivables, less allowances for doubtful accounts of $8.7 in 2017 (2016 - $6.4) | 219.3 | 156.2 | |
Inventories | 23.6 | 24.1 | |
Prepaid expenses and other current assets | 15.1 | 17.1 | |
Total current assets | 290.2 | 329.6 | |
Property, plant and equipment-net | 34.7 | 35.5 | |
Goodwill | 447.5 | 446.4 | |
Other intangible assets-net | 44.2 | 54.3 | |
Software-net | 41.9 | 41.6 | |
Deferred income taxes | 36.6 | 37 | |
Other noncurrent assets | 38.6 | 34.5 | |
Total assets | 933.7 | 978.9 | |
LIABILITIES | |||
Accounts payable | 74.4 | 85.3 | |
Accrued liabilities | 110.1 | 100.7 | |
Total current liabilities | 184.5 | 186 | |
Long-term debt (Note 11) | 488.4 | 587 | |
Deferred compensation liabilities | 24.6 | 24.4 | |
Pension and other postretirement benefits plan liabilities | 51.4 | 56.4 | |
Other noncurrent liabilities | 11.2 | 14 | |
Total liabilities | 760.1 | 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: 33.7 shares in 2017 (2016 - 32.6 shares) | 0.3 | 0.3 | |
Treasury stock, at cost: less than 0.1 shares in 2017 | (0.9) | ||
Additional paid-in-capital | 204.3 | 179.9 | |
Retained earnings (deficit) | 32.6 | (0.8) | |
Accumulated other comprehensive loss | (62.7) | (68.3) | |
Total equity | 173.6 | 111.1 | |
Total liabilities and equity | 933.7 | 978.9 | |
R.R. Donnelley & Sons Company | |||
ASSETS | |||
Receivables from R.R. Donnelley | [1] | $ 0 | $ 96 |
[1] | Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables, allowance for doubtful accounts | $ 8.7 | $ 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 | 33,800,000 | 32,600,000 |
Maximum | ||
Treasury stock, Shares | 100,000 |
Condensed Consolidated and Com6
Condensed Consolidated and Combined Statements of Cash Flows (UNAUDITED) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
OPERATING ACTIVITIES | ||
Net earnings | $ 33.4 | $ 59.9 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Impairment charges | 0.2 | 0 |
Depreciation and amortization | 31.7 | 30.1 |
Provision for doubtful accounts receivable | 4.3 | 1.7 |
Share-based compensation | 5.2 | 1.2 |
Deferred income taxes | (2.7) | (1) |
Change in uncertain tax positions | (0.2) | 0 |
Net pension and other postretirement benefits plan income | (2.5) | (0.4) |
Other | 1.7 | 0.7 |
Changes in operating assets and liabilities - net of acquisitions: | ||
Accounts receivable - net | (36.6) | (54.6) |
Inventories | 0.6 | (2.9) |
Prepaid expenses and other current assets | (2) | (6.3) |
Accounts payable | (11.7) | 17.9 |
Income taxes payable and receivable | 3.7 | (0.6) |
Accrued liabilities and other | 10.3 | 12.2 |
Pension and other postretirement benefits plan contributions | (1.7) | (1.1) |
Net cash provided by operating activities | 33.7 | 56.8 |
INVESTING ACTIVITIES | ||
Capital expenditures | (20) | (14) |
Purchases of investments | (3.4) | (3.5) |
Other investing activities | 0.3 | 0.5 |
Net cash used in investing activities | (23.1) | (17) |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 230 | 0 |
Payments on revolving facility borrowings | (230) | 0 |
Payments on long-term debt | (100) | 0 |
Debt issuance costs | (1.5) | (9.3) |
Separation-related payment from R.R. Donnelley | 68 | 0 |
Proceeds from issuance of common stock | 18.8 | 0 |
Proceeds from issuance of long-term debt | 0 | 348.2 |
Net change in short-term debt | 0 | (8.8) |
Net transfers to Parent and affiliates | 0 | (336.2) |
Treasury stock repurchases | (0.9) | 0 |
Other financing activities | 0.4 | 0 |
Net cash used in financing activities | (15.2) | (6.1) |
Effect of exchange rate on cash and cash equivalents | 0.6 | 4.2 |
Net (decrease) increase in cash and cash equivalents | (4) | 37.9 |
Cash and cash equivalents at beginning of year | 36.2 | 15.1 |
Cash and cash equivalents at end of period | 32.2 | 53 |
Supplemental non-cash disclosure: | ||
Debt exchange with R.R. Donnelley, including $5.5 million of debt issuance costs | 0 | 300 |
Settlement of intercompany note payable | 0 | 29.6 |
Accrued debt issuance costs | $ 0 | $ 1.6 |
Condensed Consolidated and Com7
Condensed Consolidated and Combined Statements of Cash Flows (UNAUDITED) (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Statement Of Cash Flows [Abstract] | |
Debt issuance costs | $ 5.5 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 9 Months Ended |
Sep. 30, 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. As part of the Separation, RRD retained approximately 6.2 million shares of Donnelley Financial common stock, or a 19.25% interest in Donnelley Financial. 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. As a result, beginning in the quarter ended June 30, 2017, LSC is no longer an affiliate of the Company. On September 14, 2016, 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 RRD’s common stockholders (the “Separation and Distribution Agreement”). 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. At the time of the Separation, 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 makes available to all of its clients. 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 Registration Statement on Form S-1, as amended, was declared effective by the SEC on June 13, 2017. On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. Upon the consummation of the offering, RRD retained approximately 0.1 million shares of the Company’s common stock which were subsequently sold by RRD on August 1, 2017. In conjunction with the underwritten public offering, the underwriters exercised their option to purchase approximately 0.9 million of the Company’s shares (the “Option Shares”). The Company received approximately $18.8 million in net proceeds from the sale of the Option Shares, after deducting estimated underwriting discounts and commissions. The proceeds were used to reduce outstanding debt under the Revolving Facility (as defined in Note 11, Debt ). Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore amounts disclosed related to RRD are presented through June 30, 2017 only. 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 were historically held at the RRD corporate level but which were 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 pension plan asset allocation from RRD was finalized on June 30, 2017, which resulted in a $0.7 million decrease 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. Refer to Note 6, Retirement Plans Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Included in the unaudited condensed combined financial statements are net revenues from sales to RRD and affiliates of $1.1 million and $3.6 million for the three months and nine months ended September 30, 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 combined financial statements are cost of sales to RRD and affiliates of $20.2 million and $78.0 million for the three and nine months ended September 30, 2016, respectively. Intercompany receivables and payables with RRD are reflected within net parent company investment in the accompanying unaudited condensed combined financial statements for periods prior to the Separation. See Note Related Parties, |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 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 September 30, 2017 and December 31, 2016 were as follows: September 30, 2017 December 31, 2016 Raw materials and manufacturing supplies $ 6.4 $ 7.6 Work in process 11.4 10.8 Finished goods 5.8 5.7 Total $ 23.6 $ 24.1 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 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 September 30, 2017 and December 31, 2016 were as follows: September 30, 2017 December 31, 2016 Land $ 10.0 $ 10.0 Buildings 43.7 44.4 Machinery and equipment 104.4 109.2 158.1 163.6 Less: Accumulated depreciation (123.4 ) (128.1 ) Total $ 34.7 $ 35.5 Depreciation expense was $1.9 million and $1.4 million for the three months ended September 30, 2017 and 2016, respectively, and $5.0 million and $6.1 million for the nine months ended September 30, 2017 and 2016, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 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 — 1.1 1.1 Net book value as of September 30, 2017 $ 429.2 $ 18.3 $ 447.5 The components of other intangible assets at September 30, 2017 and December 31, 2016 were as follows: September 30, 2017 December 31, 2016 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Amount Amortization Value Amount Amortization Value Customer relationships $ 140.6 $ (97.1 ) $ 43.5 $ 138.8 $ (85.3 ) $ 53.5 Trade names 6.3 (5.6 ) 0.7 6.3 (5.5 ) 0.8 Trademarks, licenses and agreements 3.2 (3.2 ) — 3.2 (3.2 ) — Total other intangible assets $ 150.1 $ (105.9 ) $ 44.2 $ 148.3 $ (94.0 ) $ 54.3 Amortization expense for other intangible assets was $3.6 million and $3.6 million for the three months ended September 30, 2017 and 2016, respectively, and $10.7 million and $10.8 million for the nine months ended September 30, 2017 and 2016, respectively. The following table outlines the estimated annual amortization expense related to other intangible assets as of September 30, 2017: For the year ending December 31, Amount 2017 $ 14.3 2018 13.9 2019 13.9 2020 12.5 2021 0.1 2022 and thereafter 0.2 Total $ 54.9 |
Restructuring, Impairment and O
Restructuring, Impairment and Other Charges | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring And Related Activities [Abstract] | |
Restructuring, Impairment and Other Charges | Note 5. Restructuring, Impairment and Other Charges Restructuring, Impairment and Other Charges recognized in Results of Operations For the three months ended September 30, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges: Three Months Ended Employee Other Restructuring Total Restructuring September 30, 2017 Terminations Charges Charges Total U.S. $ 0.2 $ (1.0 ) $ (0.8 ) $ (0.8 ) International 0.1 — 0.1 0.1 Corporate 0.1 — 0.1 0.1 Total $ 0.4 $ (1.0 ) $ (0.6 ) $ (0.6 ) Three Months Ended Employee Other Restructuring Total Restructuring September 30, 2016 Terminations Charges Charges Total U.S. $ 1.0 $ 0.4 $ 1.4 $ 1.4 International 0.3 — 0.3 0.3 Corporate — — — — Total $ 1.3 $ 0.4 $ 1.7 $ 1.7 For the nine months ended September 30, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges: Nine Months Ended Employee Other Restructuring Total Restructuring Other September 30, 2017 Terminations Charges Charges Impairment Charges Total U.S. $ 3.2 $ 0.9 $ 4.1 $ 0.2 $ 0.1 $ 4.4 International 1.3 — 1.3 — — 1.3 Corporate 0.7 — 0.7 — — 0.7 Total $ 5.2 $ 0.9 $ 6.1 $ 0.2 $ 0.1 $ 6.4 Nine Months Ended Employee Other Restructuring Total Restructuring Other September 30, 2016 Terminations Charges Charges Impairment Charges Total U.S. $ 1.8 $ 1.2 $ 3.0 $ — $ 0.1 $ 3.1 International 0.5 — 0.5 — — 0.5 Corporate — — — — — — Total $ 2.3 $ 1.2 $ 3.5 $ — $ 0.1 $ 3.6 Restructuring and Impairment Charges For the three and nine months ended September 30, 2017, the Company recorded net restructuring charges of $0.4 million and $5.2 million, respectively, for employee termination costs for 169 employees, substantially all of whom were terminated as of September 30, 2017. These charges primarily related to the reorganization of certain operations and certain administrative functions. Additionally, the Company recognized a net reversal of $1.0 million of other restructuring charges during the three months ended September 30, 2017 primarily due to the reversal of previously recognized lease termination costs associated with a facility that the Company began using during the third quarter of 2017. The Company incurred net lease termination and other restructuring charges of $0.9 million for the nine months ended September 30, 2017. For the nine months ended September 30, 2017, the Company also recorded $0.2 million of net impairment charges primarily related to leasehold improvements associated with facility closures. The nine months ended September 30, 2017 includes $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate. For the three and nine months ended September 30, 2016, the Company recorded net restructuring charges of $1.3 million and $2.3 million, respectively, for employee termination costs for 22 employees. These charges primarily related to the reorganization of certain administrative functions. Additionally, the Company incurred lease termination and other restructuring charges of $0.4 million and $1.2 million, respectively, for the three and nine months ended September 30, 2016. The nine months ended September 30, 2016, includes $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate. Restructuring Reserve The restructuring reserve as of December 31, 2016 and September 30, 2017, and changes during the nine months ended September 30, 2017, were as follows: Foreign December 31, Restructuring Exchange and Cash September 30, 2016 Charges Other Paid 2017 Employee terminations $ 1.6 $ 5.2 $ 0.1 $ (5.3 ) $ 1.6 Lease terminations and other 3.8 0.9 0.2 (1.5 ) 3.4 Total $ 5.4 $ 6.1 $ 0.3 $ (6.8 ) $ 5.0 The current portion of restructuring reserves of $3.2 million at September 30, 2017 was included in accrued liabilities, while the long-term portion of $1.8 million, primarily related to lease termination costs, was included in other noncurrent liabilities at September 30, 2017. The Company anticipates that payments associated with the employee terminations reflected in the above table will be substantially completed by March 31, 2018. The restructuring liabilities classified as “lease terminations and other” consisted of lease terminations, other facility closing costs and contract termination costs. Payments on certain of the lease obligations are scheduled to continue until 2026. Market conditions and the Company’s ability to sublease these properties could affect the ultimate charges related to the lease obligations. Any potential recoveries or additional charges could affect amounts reported in the Company’s financial statements. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 6. 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 $1.3 million and $4.2 million in the three and nine months ended September 30, 2016, respectively. Included in these amounts is an allocation for other postretirement benefit plans for $0.3 million and $1.0 million in the three and nine months ended September 30, 2016, respectively. 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 was finalized on June 30, 2017, which resulted in a $0.7 million decrease 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 and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Pension expense (income) Interest cost $ 2.6 $ — $ 7.9 $ — Expected return on assets (4.0 ) — (12.0 ) — Amortization, net 0.6 (0.2 ) 1.6 (0.4 ) Net pension income $ (0.8 ) $ (0.2 ) $ (2.5 ) $ (0.4 ) |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Equity | Note 7. Equity The Company’s equity as of December 31, 2016 and September 30, 2017, and changes during the nine months ended September 30, 2017, were as follows: Total Equity Balance at December 31, 2016 $ 111.1 Net earnings 33.4 Other comprehensive income 5.6 Separation-related adjustments 0.2 Share-based compensation 5.2 Issuance of common stock 18.8 Issuance of share-based awards, net of withholdings and other (0.7 ) Balance at September 30, 2017 $ 173.6 Separation-related adjustments primarily relate to adjustments arising from the finalization of tax returns for periods prior to the Separation as well as settlement of balances due to or from RRD for activity prior to the Separation. On June 21, 2017, the Company issued stock in conjunction with the underwritten public offering of the sale of the Company’s shares retained by RRD. The underwriters exercised their option to purchase approximately 0.9 million Option Shares. The Company received approximately $18.8 million in net proceeds from the sale of the Option Shares, after deducting estimated underwriting discounts and commissions. Refer to Note 1, Overview and Basis of Presentation, The Company’s equity as of December 31, 2015 and September 30, 2016, and changes during the nine months ended September 30, 2016, were as follows: Accumulated Net Parent Other Company Comprehensive Total Investment Loss Equity Balance at December 31, 2015 $ 639.5 $ (16.0 ) $ 623.5 Net earnings 59.9 — 59.9 Transfers from parent company, net (598.6 ) — (598.6 ) Other comprehensive income — 3.8 3.8 Balance at September 30, 2016 $ 100.8 $ (12.2 ) $ 88.6 |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 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. On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. Upon consummation of the offering, RRD retained approximately 0.1 million shares of the Company’s common stock which were subsequently sold by RRD on August 1, 2017. Refer to Note 1, Overview and Basis of Presentation As a result of the Company adopting Accounting Standards Update 2016-09 “Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” beginning in the first quarter of 2017, excess tax benefits and tax deficiencies are excluded from the calculation of assumed proceeds when using the treasury stock method in calculating diluted earnings per share. 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 and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net earnings per share: Basic $ 0.16 $ 0.31 $ 1.01 $ 1.85 Diluted $ 0.16 $ 0.31 $ 1.01 $ 1.85 Numerator: Net earnings $ 5.3 $ 10.2 $ 33.4 $ 59.9 Denominator: Weighted average number of common shares outstanding 33.6 32.4 33.0 32.4 Dilutive awards 0.2 — 0.2 — Diluted weighted average number of common shares outstanding 33.8 32.4 33.2 32.4 Weighted average number of anti-dilutive share-based awards: Restricted stock units — — 0.2 — Stock options 0.4 — 0.3 — Total 0.4 — 0.5 — |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended September 30, 2017 September 30, 2017 Before Tax Income Tax Net of Tax Before Tax Income Tax Net of Tax Amount Expense Amount Amount Expense Amount Translation adjustments $ 2.2 $ — $ 2.2 $ 4.6 $ — $ 4.6 Adjustment for net periodic pension plan and other postretirement benefits plan cost 0.6 0.3 0.3 1.6 0.6 1.0 Other comprehensive income $ 2.8 $ 0.3 $ 2.5 $ 6.2 $ 0.6 $ 5.6 Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Before Tax Income Tax Net of Tax Before Tax Income Tax Net of Tax Amount Expense Amount Amount Expense Amount Translation adjustments $ 0.2 $ — $ 0.2 $ 4.2 $ — $ 4.2 Adjustment for net periodic pension plan and other postretirement benefits plan cost (0.2 ) — (0.2 ) (0.4 ) — (0.4 ) Other comprehensive income $ — $ — $ — $ 3.8 $ — $ 3.8 Accumulated other comprehensive loss by component as of December 31, 2016 and September 30, 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 — 4.6 4.6 Amounts reclassified from accumulated other comprehensive loss 1.0 — 1.0 Net change in accumulated other comprehensive loss 1.0 4.6 5.6 Balance at September 30, 2017 $ (51.2 ) $ (11.5 ) $ (62.7 ) Accumulated other comprehensive loss by component as of December 31, 2015 and September 30, 2016 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 — 4.2 4.2 Amounts reclassified from accumulated other comprehensive loss (0.4 ) — (0.4 ) Net change in accumulated other comprehensive loss (0.4 ) 4.2 3.8 Balance at September 30, 2016 $ (0.4 ) $ (11.8 ) $ (12.2 ) Reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended Classification in the Condensed September 30, September 30, Consolidated and Combined 2017 2016 2017 2016 Statements of Operations Amortization of pension and other postretirement benefits plan cost: Net actuarial income (loss) $ 0.6 $ (0.2 ) $ 1.6 $ (0.4 ) (a) Reclassifications before tax 0.6 (0.2 ) 1.6 (0.4 ) Income tax expense 0.3 — 0.6 — Reclassifications, net of tax $ 0.3 $ (0.2 ) $ 1.0 $ (0.4 ) (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 6, Retirement Plans |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 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 190 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 and Capital Sales Sales Sales Operations Amortization Expenditures Three Months Ended September 30, 2017 U.S. $ 188.9 $ (2.8 ) $ 186.1 $ 22.4 $ 9.2 $ 7.7 International 37.1 (0.6 ) 36.5 1.5 1.4 0.1 Total operating segments 226.0 (3.4 ) 222.6 23.9 10.6 7.8 Corporate — — — (5.9 ) — 0.2 Total operations $ 226.0 $ (3.4 ) $ 222.6 $ 18.0 $ 10.6 $ 8.0 Income Depreciation Total Intersegment Net from and Capital Sales Sales Sales Operations Amortization Expenditures Three Months Ended September 30, 2016 U.S. $ 193.6 $ (1.3 ) $ 192.3 $ 18.7 $ 8.5 $ 1.3 International 33.2 (1.1 ) 32.1 1.1 1.1 — Total operating segments 226.8 (2.4 ) 224.4 19.8 9.6 1.3 Corporate — — — (1.8 ) 0.2 0.4 Total operations $ 226.8 $ (2.4 ) $ 224.4 $ 18.0 $ 9.8 $ 1.7 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Nine Months Ended September 30, 2017 U.S. $ 665.8 $ (7.6 ) $ 658.2 $ 107.5 $ 715.3 $ 27.5 $ 18.1 International 124.8 (2.9 ) 121.9 7.6 96.0 4.2 0.8 Total operating segments 790.6 (10.5 ) 780.1 115.1 811.3 31.7 18.9 Corporate — — — (27.0 ) 122.4 — 1.1 Total operations $ 790.6 $ (10.5 ) $ 780.1 $ 88.1 $ 933.7 $ 31.7 $ 20.0 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Nine Months Ended September 30, 2016 U.S. $ 666.4 $ (4.0 ) $ 662.4 $ 100.0 $ 714.2 $ 26.2 $ 10.2 International 103.9 (3.8 ) 100.1 7.2 99.9 3.2 1.2 Total operating segments 770.3 (7.8 ) 762.5 107.2 814.1 29.4 11.4 Corporate — — — (7.7 ) 99.9 0.7 2.6 Total operations $ 770.3 $ (7.8 ) $ 762.5 $ 99.5 $ 914.0 $ 30.1 $ 14.0 |
Debt
Debt | 9 Months Ended |
Sep. 30, 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 September 30, 2017, there were no 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. 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. On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. Upon the consummation of the offering, RRD retained approximately 0.1 million shares of the Company’s common stock of the offering which were subsequently sold by RRD on August 1, 2017. In conjunction with the underwritten public offering, the underwriters exercised their option to purchase approximately 0.9 million Option Shares. The Company received approximately $18.8 million in net proceeds from the sale of the Option Shares, after deducting estimated underwriting discounts and commissions. The proceeds were used to reduce outstanding debt under the Revolving Facility. On October 2, 2017, the Company repriced the Term Loan Credit Facility. As a result, the interest rate was reduced by 100 basis points to LIBOR plus 3.0% and the LIBOR floor was reduced by 25 basis points to .75%. Additionally, under the amended Credit Agreement, principal payments are due on a quarterly basis. Other terms, including the outstanding principal, maturity date, and debt covenants such as the minimum Interest Coverage Ratio and the maximum Leverage Ratio are consistent with the original Credit Agreement. 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 September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, 2017 2016 8.25% senior notes due October 15, 2024 $ 300.0 $ 300.0 Term Loan Credit Facility 198.5 298.3 Borrowings under the Revolving Facility — — Unamortized debt issuance costs (10.1 ) (11.3 ) Total debt 488.4 587.0 Less: current portion — — Long-term debt $ 488.4 $ 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 senior notes was $322.2 million and $307.1 million at September 30, 2017 and December 31, 2016, respectively. The weighted average interest rate on borrowings under the Revolving Facility was 4.4% at September 30, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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 consolidated and combined results of operations, financial position or cash flows. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 13. Related Parties 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. As a result, beginning in the quarter ended June 30, 2017, LSC is no longer an affiliate of the Company. On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock. RRD retained approximately 0.1 million shares of the Company’s common stock which RRD sold on August 1, 2017. Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party and the amounts disclosed related to RRD are presented through June 30, 2017 only. 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. The Registration Statement on Form S-1, as amended, was declared effective by the SEC on June 13, 2017. On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. Upon consummation of the offering, RRD retained approximately 0.1 million shares of the Company’s common stock which were subsequently sold by RRD on August 1, 2017. 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 in the normal course of business. The Company had $96.0 million of receivables from RRD and $27.1 million of payables to RRD included at December 31, 2016. 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 Nine Months Ended September 30, 2016 September 30, 2016 Costs of goods sold allocation $ 8.3 $ 28.0 Selling, general and administrative allocation 38.3 129.4 Depreciation and amortization 5.3 15.2 Total allocations from RRD $ 51.9 $ 172.6 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 $1.1 million and $3.6 million for the three and nine months ended September 30, 2016, respectively, were included in the unaudited condensed combined statement of operations. Related Party Purchases Donnelley Financial utilizes RRD for freight and logistics and services as well as certain production of printed products. Cost of sales of $11.5 million and $48.6 million for the three and nine months ended September 30, 2016, respectively, were included in the unaudited condensed combined statement of operations for these purchases. Donnelley Financial also utilizes RRD’s business process outsourcing business for certain composition, XBRL and other functions. Cost of sales of $8.7 million and $29.4 million for the three and nine months ended September 30, 2016, respectively, were included in the unaudited condensed combined statement 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 statement of operations. Share-based compensation costs allocated to the Company were 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. The pension plan asset allocation from RRD was finalized on June 30, 2017, which resulted in a $0.7 million decrease to the fair value of plan assets transferred to the Company from RRD. Refer to Note 6 , Retirement Plans Centralized Cash Management Prior to Separation RRD used 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 prior to the Separation are reflected in net parent company investment in the consolidated 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 | 9 Months Ended |
Sep. 30, 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 6, Retirement Plans , for disclosure of pension income for the nine months ended September 30, 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. |
Guarantor Financial Information
Guarantor Financial Information | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2017 and 2016, condensed consolidating statements of financial position as of September 30, 2017 and December 31, 2016, and condensed consolidating and combined statements of cash flows for the nine months ended September 30, 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 September 30, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 112.3 $ 30.1 $ (2.1 ) $ 140.3 Products net sales — 76.6 7.0 (1.3 ) 82.3 Total net sales — 188.9 37.1 (3.4 ) 222.6 Services cost of sales (exclusive of depreciation and amortization) — 63.6 20.1 (2.0 ) 81.7 Products cost of sales (exclusive of depreciation and amortization) — 56.0 4.3 (1.4 ) 58.9 Total cost of sales — 119.6 24.4 (3.4 ) 140.6 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 44.2 9.8 — 54.0 Restructuring, impairment and other charges-net — (0.7 ) 0.1 — (0.6 ) Depreciation and amortization — 9.2 1.4 — 10.6 Income from operations — 16.6 1.4 — 18.0 Interest expense-net 10.2 0.4 — — 10.6 Earnings (loss) before income taxes and equity in net income of subsidiaries (10.2 ) 16.2 1.4 — 7.4 Income tax (benefit) expense (5.1 ) 8.4 (1.2 ) — 2.1 Earnings (loss) before equity in net income of subsidiaries (5.1 ) 7.8 2.6 — 5.3 Equity in net income of subsidiaries 10.4 2.6 — (13.0 ) — Net earnings (loss) $ 5.3 $ 10.4 $ 2.6 $ (13.0 ) $ 5.3 Comprehensive income (loss) $ 7.8 $ 12.9 $ 4.8 $ (17.7 ) $ 7.8 Condensed Consolidating Statements of Operations For the Nine Months Ended September 30, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 386.7 $ 91.2 $ (6.5 ) $ 471.4 Products net sales — 279.1 33.6 (4.0 ) 308.7 Total net sales — 665.8 124.8 (10.5 ) 780.1 Services cost of sales (exclusive of depreciation and amortization) — 186.9 59.2 (5.9 ) 240.2 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* — 18.4 1.1 — 19.5 Products cost of sales (exclusive of depreciation and amortization) — 174.6 20.7 (4.6 ) 190.7 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* — 30.1 2.2 — 32.3 Total cost of sales — 410.0 83.2 (10.5 ) 482.7 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 142.6 28.6 — 171.2 Restructuring, impairment and other charges-net — 5.1 1.3 — 6.4 Depreciation and amortization — 27.5 4.2 — 31.7 Income from operations — 80.6 7.5 — 88.1 Interest expense-net 32.7 — — — 32.7 Earnings (loss) before income taxes and equity in net income of subsidiaries (32.7 ) 80.6 7.5 — 55.4 Income tax (benefit) expense (14.4 ) 35.0 1.4 — 22.0 Earnings (loss) before equity in net income of subsidiaries (18.3 ) 45.6 6.1 — 33.4 Equity in net income of subsidiaries 51.7 6.1 — (57.8 ) — Net earnings $ 33.4 $ 51.7 $ 6.1 $ (57.8 ) $ 33.4 Comprehensive income $ 39.0 $ 57.3 $ 10.7 $ (68.0 ) $ 39.0 * Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. Condensed Consolidating Statements of Operations For the Three Months Ended September 30, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 115.5 $ 25.5 $ (1.6 ) $ 139.4 Products net sales — 78.1 7.7 (0.8 ) 85.0 Total net sales — 193.6 33.2 (2.4 ) 224.4 Services cost of sales (exclusive of depreciation and amortization) — 49.3 16.4 (1.5 ) 64.2 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 8.2 0.5 — 8.7 Products cost of sales (exclusive of depreciation and amortization) — 57.7 5.2 (0.9 ) 62.0 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 11.5 — — 11.5 Total cost of sales — 126.7 22.1 (2.4 ) 146.4 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 39.9 8.6 — 48.5 Restructuring, impairment and other charges-net — 1.4 0.3 — 1.7 Depreciation and amortization — 8.7 1.1 — 9.8 Income from operations — 16.9 1.1 — 18.0 Interest expense (income) –net — (0.2 ) 0.1 — (0.1 ) Earnings before income taxes and equity in net income of subsidiaries — 17.1 1.0 — 18.1 Income tax (benefit) expense — 9.5 (1.6 ) — 7.9 Earnings before equity in net income of subsidiaries — 7.6 2.6 — 10.2 Equity in net income of subsidiaries 10.2 2.6 — (12.8 ) — Net earnings $ 10.2 $ 10.2 $ 2.6 $ (12.8 ) $ 10.2 Comprehensive income $ 10.2 $ 10.2 $ 2.8 $ (13.0 ) $ 10.2 Condensed Consolidating Statements of Operations For the Nine Months Ended September 30, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 381.9 $ 77.3 $ (5.1 ) $ 454.1 Products net sales — 284.5 26.6 (2.7 ) 308.4 Total net sales — 666.4 103.9 (7.8 ) 762.5 Services cost of sales (exclusive of depreciation and amortization) — 170.0 49.4 (4.8 ) 214.6 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 27.8 1.6 — 29.4 Products cost of sales (exclusive of depreciation and amortization) — 164.6 18.3 (3.0 ) 179.9 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 48.6 — — 48.6 Total cost of sales — 411.0 69.3 (7.8 ) 472.5 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 133.1 23.7 — 156.8 Restructuring, impairment and other charges-net — 3.1 0.5 — 3.6 Depreciation and amortization — 26.9 3.2 — 30.1 Income from operations — 92.3 7.2 — 99.5 Interest expense-net — 0.2 0.1 — 0.3 Earnings before income taxes and equity in net income of subsidiaries — 92.1 7.1 — 99.2 Income tax expense — 38.6 0.7 — 39.3 Earnings before equity in net income of subsidiaries — 53.5 6.4 — 59.9 Equity in net income of subsidiaries 59.9 6.4 — (66.3 ) — Net earnings $ 59.9 $ 59.9 $ 6.4 $ (66.3 ) $ 59.9 Comprehensive income $ 63.7 $ 63.7 $ 10.6 $ (74.3 ) $ 63.7 Condensed Consolidating Balance Sheet As of September 30, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 0.2 $ 21.3 $ 10.7 $ — $ 32.2 Receivables, less allowances — 177.7 41.6 — 219.3 Intercompany receivables — 80.5 — (80.5 ) — Intercompany short-term note receivable — — 35.0 (35.0 ) — Inventories — 21.2 2.4 — 23.6 Prepaid expenses and other current assets 7.3 7.1 3.6 (2.9 ) 15.1 Total current assets 7.5 307.8 93.3 (118.4 ) 290.2 Property, plant and equipment-net — 31.4 3.3 — 34.7 Goodwill — 429.2 18.3 — 447.5 Other intangible assets-net — 35.2 9.0 — 44.2 Software-net — 41.5 0.4 — 41.9 Deferred income taxes — 32.6 4.0 — 36.6 Other noncurrent assets 3.7 30.2 4.7 — 38.6 Investments in consolidated subsidiaries 750.3 85.2 — (835.5 ) — Total assets $ 761.5 $ 993.1 $ 133.0 $ (953.9 ) $ 933.7 LIABILITIES AND EQUITY Accounts payable $ — $ 61.5 $ 12.9 $ — $ 74.4 Intercompany payable 64.5 — 16.0 (80.5 ) — Intercompany short-term note payable 35.0 — — (35.0 ) — Accrued liabilities — 97.9 15.1 (2.9 ) 110.1 Total current liabilities 99.5 159.4 44.0 (118.4 ) 184.5 Long-term debt 488.4 — — — 488.4 Deferred compensation liabilities — 24.6 — — 24.6 Pension and other postretirement benefits plan liabilities — 50.2 1.2 — 51.4 Other noncurrent liabilities — 8.6 2.6 — 11.2 Total liabilities 587.9 242.8 47.8 (118.4 ) 760.1 Total equity 173.6 750.3 85.2 (835.5 ) 173.6 Total liabilities and equity $ 761.5 $ 993.1 $ 133.0 $ (953.9 ) $ 933.7 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 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 liabilities — 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 Nine Months Ended September 30, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (4.3 ) $ 21.8 $ 13.8 $ 2.4 $ 33.7 INVESTING ACTIVITIES Capital expenditures — (19.2 ) (0.8 ) — (20.0 ) Purchase of investment — (3.4 ) — — (3.4 ) Intercompany note receivable — — (19.7 ) 19.7 — Other investing activities — 0.3 — — 0.3 Net cash provided by (used in) investing activities — (22.3 ) (20.5 ) 19.7 (23.1 ) FINANCING ACTIVITIES Revolving facility borrowings 230.0 — — — 230.0 Payments on revolving facility borrowings (230.0 ) — — — (230.0 ) Payments on long-term debt (100.0 ) — — — (100.0 ) Debt issuance costs (1.5 ) — — — (1.5 ) Separation-related payment from R.R. Donnelley 68.0 — — — 68.0 Proceeds from the issuance of common stock 18.8 — — — 18.8 Treasury stock repurchases (0.9 ) — — — (0.9 ) Intercompany note payable 19.7 — — (19.7 ) — Other financing activities 0.4 — — — 0.4 Net cash provided by (used in) financing activities 4.5 — — (19.7 ) (15.2 ) Effect of exchange rate on cash and cash equivalents — — 0.6 — 0.6 Net (decrease) increase in cash and cash equivalents 0.2 (0.5 ) (6.1 ) 2.4 (4.0 ) Cash and cash equivalents at beginning of year — 21.8 16.8 (2.4 ) 36.2 Cash and cash equivalents at end of period $ 0.2 $ 21.3 $ 10.7 $ — $ 32.2 Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash provided by operating activities $ — $ 52.6 $ 4.2 $ — $ 56.8 INVESTING ACTIVITIES Capital expenditures — (12.8 ) (1.2 ) — (14.0 ) Purchase of investment — (3.5 ) — — (3.5 ) Other investing activities — — 0.5 — 0.5 Net cash used in investing activities — (16.3 ) (0.7 ) — (17.0 ) FINANCING ACTIVITIES Debt issuance costs (9.3 ) — — — (9.3 ) Proceeds from issuance of long-term debt 348.2 — — — 348.2 Net change in short-term debt — — (8.8 ) — (8.8 ) Net transfers to Parent and affiliates (338.9 ) (9.1 ) 11.8 — (336.2 ) Net cash (used in) provided by financing activities — (9.1 ) 3.0 — (6.1 ) Effect of exchange rate on cash and cash equivalents — — 4.2 — 4.2 Net increase in cash and cash equivalents — 27.2 10.7 — 37.9 Cash and cash equivalents at beginning of year — 0.1 15.0 — 15.1 Cash and cash equivalents at end of period $ — $ 27.3 $ 25.7 $ — $ 53.0 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2017 and December 31, 2016 were as follows: September 30, 2017 December 31, 2016 Raw materials and manufacturing supplies $ 6.4 $ 7.6 Work in process 11.4 10.8 Finished goods 5.8 5.7 Total $ 23.6 $ 24.1 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2017 and December 31, 2016 were as follows: September 30, 2017 December 31, 2016 Land $ 10.0 $ 10.0 Buildings 43.7 44.4 Machinery and equipment 104.4 109.2 158.1 163.6 Less: Accumulated depreciation (123.4 ) (128.1 ) Total $ 34.7 $ 35.5 |
Goodwill and Other Intangible25
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 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 — 1.1 1.1 Net book value as of September 30, 2017 $ 429.2 $ 18.3 $ 447.5 |
Components of Other Intangible Assets | The components of other intangible assets at September 30, 2017 and December 31, 2016 were as follows: September 30, 2017 December 31, 2016 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Amount Amortization Value Amount Amortization Value Customer relationships $ 140.6 $ (97.1 ) $ 43.5 $ 138.8 $ (85.3 ) $ 53.5 Trade names 6.3 (5.6 ) 0.7 6.3 (5.5 ) 0.8 Trademarks, licenses and agreements 3.2 (3.2 ) — 3.2 (3.2 ) — Total other intangible assets $ 150.1 $ (105.9 ) $ 44.2 $ 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 September 30, 2017: For the year ending December 31, Amount 2017 $ 14.3 2018 13.9 2019 13.9 2020 12.5 2021 0.1 2022 and thereafter 0.2 Total $ 54.9 |
Restructuring, Impairment and26
Restructuring, Impairment and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Restructuring, Impairment and Other Charges Recognized in Results of Operations | For the three months ended September 30, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges: Three Months Ended Employee Other Restructuring Total Restructuring September 30, 2017 Terminations Charges Charges Total U.S. $ 0.2 $ (1.0 ) $ (0.8 ) $ (0.8 ) International 0.1 — 0.1 0.1 Corporate 0.1 — 0.1 0.1 Total $ 0.4 $ (1.0 ) $ (0.6 ) $ (0.6 ) Three Months Ended Employee Other Restructuring Total Restructuring September 30, 2016 Terminations Charges Charges Total U.S. $ 1.0 $ 0.4 $ 1.4 $ 1.4 International 0.3 — 0.3 0.3 Corporate — — — — Total $ 1.3 $ 0.4 $ 1.7 $ 1.7 For the nine months ended September 30, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges: Nine Months Ended Employee Other Restructuring Total Restructuring Other September 30, 2017 Terminations Charges Charges Impairment Charges Total U.S. $ 3.2 $ 0.9 $ 4.1 $ 0.2 $ 0.1 $ 4.4 International 1.3 — 1.3 — — 1.3 Corporate 0.7 — 0.7 — — 0.7 Total $ 5.2 $ 0.9 $ 6.1 $ 0.2 $ 0.1 $ 6.4 Nine Months Ended Employee Other Restructuring Total Restructuring Other September 30, 2016 Terminations Charges Charges Impairment Charges Total U.S. $ 1.8 $ 1.2 $ 3.0 $ — $ 0.1 $ 3.1 International 0.5 — 0.5 — — 0.5 Corporate — — — — — — Total $ 2.3 $ 1.2 $ 3.5 $ — $ 0.1 $ 3.6 |
Schedule of Changes in the Restructuring Reserve | The restructuring reserve as of December 31, 2016 and September 30, 2017, and changes during the nine months ended September 30, 2017, were as follows: Foreign December 31, Restructuring Exchange and Cash September 30, 2016 Charges Other Paid 2017 Employee terminations $ 1.6 $ 5.2 $ 0.1 $ (5.3 ) $ 1.6 Lease terminations and other 3.8 0.9 0.2 (1.5 ) 3.4 Total $ 5.4 $ 6.1 $ 0.3 $ (6.8 ) $ 5.0 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Pension expense (income) Interest cost $ 2.6 $ — $ 7.9 $ — Expected return on assets (4.0 ) — (12.0 ) — Amortization, net 0.6 (0.2 ) 1.6 (0.4 ) Net pension income $ (0.8 ) $ (0.2 ) $ (2.5 ) $ (0.4 ) |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of the Company's Equity Activity | The Company’s equity as of December 31, 2016 and September 30, 2017, and changes during the nine months ended September 30, 2017, were as follows: Total Equity Balance at December 31, 2016 $ 111.1 Net earnings 33.4 Other comprehensive income 5.6 Separation-related adjustments 0.2 Share-based compensation 5.2 Issuance of common stock 18.8 Issuance of share-based awards, net of withholdings and other (0.7 ) Balance at September 30, 2017 $ 173.6 The Company’s equity as of December 31, 2015 and September 30, 2016, and changes during the nine months ended September 30, 2016, were as follows: Accumulated Net Parent Other Company Comprehensive Total Investment Loss Equity Balance at December 31, 2015 $ 639.5 $ (16.0 ) $ 623.5 Net earnings 59.9 — 59.9 Transfers from parent company, net (598.6 ) — (598.6 ) Other comprehensive income — 3.8 3.8 Balance at September 30, 2016 $ 100.8 $ (12.2 ) $ 88.6 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net earnings per share: Basic $ 0.16 $ 0.31 $ 1.01 $ 1.85 Diluted $ 0.16 $ 0.31 $ 1.01 $ 1.85 Numerator: Net earnings $ 5.3 $ 10.2 $ 33.4 $ 59.9 Denominator: Weighted average number of common shares outstanding 33.6 32.4 33.0 32.4 Dilutive awards 0.2 — 0.2 — Diluted weighted average number of common shares outstanding 33.8 32.4 33.2 32.4 Weighted average number of anti-dilutive share-based awards: Restricted stock units — — 0.2 — Stock options 0.4 — 0.3 — Total 0.4 — 0.5 — |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended September 30, 2017 September 30, 2017 Before Tax Income Tax Net of Tax Before Tax Income Tax Net of Tax Amount Expense Amount Amount Expense Amount Translation adjustments $ 2.2 $ — $ 2.2 $ 4.6 $ — $ 4.6 Adjustment for net periodic pension plan and other postretirement benefits plan cost 0.6 0.3 0.3 1.6 0.6 1.0 Other comprehensive income $ 2.8 $ 0.3 $ 2.5 $ 6.2 $ 0.6 $ 5.6 Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Before Tax Income Tax Net of Tax Before Tax Income Tax Net of Tax Amount Expense Amount Amount Expense Amount Translation adjustments $ 0.2 $ — $ 0.2 $ 4.2 $ — $ 4.2 Adjustment for net periodic pension plan and other postretirement benefits plan cost (0.2 ) — (0.2 ) (0.4 ) — (0.4 ) Other comprehensive income $ — $ — $ — $ 3.8 $ — $ 3.8 |
Schedule of Changes in Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss by component as of December 31, 2016 and September 30, 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 — 4.6 4.6 Amounts reclassified from accumulated other comprehensive loss 1.0 — 1.0 Net change in accumulated other comprehensive loss 1.0 4.6 5.6 Balance at September 30, 2017 $ (51.2 ) $ (11.5 ) $ (62.7 ) Accumulated other comprehensive loss by component as of December 31, 2015 and September 30, 2016 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 — 4.2 4.2 Amounts reclassified from accumulated other comprehensive loss (0.4 ) — (0.4 ) Net change in accumulated other comprehensive loss (0.4 ) 4.2 3.8 Balance at September 30, 2016 $ (0.4 ) $ (11.8 ) $ (12.2 ) |
Reclassifications from Accumulated Other Comprehensive Loss, Amortization of Pension Plan Cost | Reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended Classification in the Condensed September 30, September 30, Consolidated and Combined 2017 2016 2017 2016 Statements of Operations Amortization of pension and other postretirement benefits plan cost: Net actuarial income (loss) $ 0.6 $ (0.2 ) $ 1.6 $ (0.4 ) (a) Reclassifications before tax 0.6 (0.2 ) 1.6 (0.4 ) Income tax expense 0.3 — 0.6 — Reclassifications, net of tax $ 0.3 $ (0.2 ) $ 1.0 $ (0.4 ) (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 6, Retirement Plans |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 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 and Capital Sales Sales Sales Operations Amortization Expenditures Three Months Ended September 30, 2017 U.S. $ 188.9 $ (2.8 ) $ 186.1 $ 22.4 $ 9.2 $ 7.7 International 37.1 (0.6 ) 36.5 1.5 1.4 0.1 Total operating segments 226.0 (3.4 ) 222.6 23.9 10.6 7.8 Corporate — — — (5.9 ) — 0.2 Total operations $ 226.0 $ (3.4 ) $ 222.6 $ 18.0 $ 10.6 $ 8.0 Income Depreciation Total Intersegment Net from and Capital Sales Sales Sales Operations Amortization Expenditures Three Months Ended September 30, 2016 U.S. $ 193.6 $ (1.3 ) $ 192.3 $ 18.7 $ 8.5 $ 1.3 International 33.2 (1.1 ) 32.1 1.1 1.1 — Total operating segments 226.8 (2.4 ) 224.4 19.8 9.6 1.3 Corporate — — — (1.8 ) 0.2 0.4 Total operations $ 226.8 $ (2.4 ) $ 224.4 $ 18.0 $ 9.8 $ 1.7 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Nine Months Ended September 30, 2017 U.S. $ 665.8 $ (7.6 ) $ 658.2 $ 107.5 $ 715.3 $ 27.5 $ 18.1 International 124.8 (2.9 ) 121.9 7.6 96.0 4.2 0.8 Total operating segments 790.6 (10.5 ) 780.1 115.1 811.3 31.7 18.9 Corporate — — — (27.0 ) 122.4 — 1.1 Total operations $ 790.6 $ (10.5 ) $ 780.1 $ 88.1 $ 933.7 $ 31.7 $ 20.0 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Nine Months Ended September 30, 2016 U.S. $ 666.4 $ (4.0 ) $ 662.4 $ 100.0 $ 714.2 $ 26.2 $ 10.2 International 103.9 (3.8 ) 100.1 7.2 99.9 3.2 1.2 Total operating segments 770.3 (7.8 ) 762.5 107.2 814.1 29.4 11.4 Corporate — — — (7.7 ) 99.9 0.7 2.6 Total operations $ 770.3 $ (7.8 ) $ 762.5 $ 99.5 $ 914.0 $ 30.1 $ 14.0 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of the Company's Debt | The Company’s debt as of September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, 2017 2016 8.25% senior notes due October 15, 2024 $ 300.0 $ 300.0 Term Loan Credit Facility 198.5 298.3 Borrowings under the Revolving Facility — — Unamortized debt issuance costs (10.1 ) (11.3 ) Total debt 488.4 587.0 Less: current portion — — Long-term debt $ 488.4 $ 587.0 |
Related Parties (Tables)
Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
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 Nine Months Ended September 30, 2016 September 30, 2016 Costs of goods sold allocation $ 8.3 $ 28.0 Selling, general and administrative allocation 38.3 129.4 Depreciation and amortization 5.3 15.2 Total allocations from RRD $ 51.9 $ 172.6 |
Guarantor Financial Informati34
Guarantor Financial Information - (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 112.3 $ 30.1 $ (2.1 ) $ 140.3 Products net sales — 76.6 7.0 (1.3 ) 82.3 Total net sales — 188.9 37.1 (3.4 ) 222.6 Services cost of sales (exclusive of depreciation and amortization) — 63.6 20.1 (2.0 ) 81.7 Products cost of sales (exclusive of depreciation and amortization) — 56.0 4.3 (1.4 ) 58.9 Total cost of sales — 119.6 24.4 (3.4 ) 140.6 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 44.2 9.8 — 54.0 Restructuring, impairment and other charges-net — (0.7 ) 0.1 — (0.6 ) Depreciation and amortization — 9.2 1.4 — 10.6 Income from operations — 16.6 1.4 — 18.0 Interest expense-net 10.2 0.4 — — 10.6 Earnings (loss) before income taxes and equity in net income of subsidiaries (10.2 ) 16.2 1.4 — 7.4 Income tax (benefit) expense (5.1 ) 8.4 (1.2 ) — 2.1 Earnings (loss) before equity in net income of subsidiaries (5.1 ) 7.8 2.6 — 5.3 Equity in net income of subsidiaries 10.4 2.6 — (13.0 ) — Net earnings (loss) $ 5.3 $ 10.4 $ 2.6 $ (13.0 ) $ 5.3 Comprehensive income (loss) $ 7.8 $ 12.9 $ 4.8 $ (17.7 ) $ 7.8 Condensed Consolidating Statements of Operations For the Nine Months Ended September 30, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 386.7 $ 91.2 $ (6.5 ) $ 471.4 Products net sales — 279.1 33.6 (4.0 ) 308.7 Total net sales — 665.8 124.8 (10.5 ) 780.1 Services cost of sales (exclusive of depreciation and amortization) — 186.9 59.2 (5.9 ) 240.2 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* — 18.4 1.1 — 19.5 Products cost of sales (exclusive of depreciation and amortization) — 174.6 20.7 (4.6 ) 190.7 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* — 30.1 2.2 — 32.3 Total cost of sales — 410.0 83.2 (10.5 ) 482.7 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 142.6 28.6 — 171.2 Restructuring, impairment and other charges-net — 5.1 1.3 — 6.4 Depreciation and amortization — 27.5 4.2 — 31.7 Income from operations — 80.6 7.5 — 88.1 Interest expense-net 32.7 — — — 32.7 Earnings (loss) before income taxes and equity in net income of subsidiaries (32.7 ) 80.6 7.5 — 55.4 Income tax (benefit) expense (14.4 ) 35.0 1.4 — 22.0 Earnings (loss) before equity in net income of subsidiaries (18.3 ) 45.6 6.1 — 33.4 Equity in net income of subsidiaries 51.7 6.1 — (57.8 ) — Net earnings $ 33.4 $ 51.7 $ 6.1 $ (57.8 ) $ 33.4 Comprehensive income $ 39.0 $ 57.3 $ 10.7 $ (68.0 ) $ 39.0 * Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. Condensed Consolidating Statements of Operations For the Three Months Ended September 30, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 115.5 $ 25.5 $ (1.6 ) $ 139.4 Products net sales — 78.1 7.7 (0.8 ) 85.0 Total net sales — 193.6 33.2 (2.4 ) 224.4 Services cost of sales (exclusive of depreciation and amortization) — 49.3 16.4 (1.5 ) 64.2 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 8.2 0.5 — 8.7 Products cost of sales (exclusive of depreciation and amortization) — 57.7 5.2 (0.9 ) 62.0 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 11.5 — — 11.5 Total cost of sales — 126.7 22.1 (2.4 ) 146.4 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 39.9 8.6 — 48.5 Restructuring, impairment and other charges-net — 1.4 0.3 — 1.7 Depreciation and amortization — 8.7 1.1 — 9.8 Income from operations — 16.9 1.1 — 18.0 Interest expense (income) –net — (0.2 ) 0.1 — (0.1 ) Earnings before income taxes and equity in net income of subsidiaries — 17.1 1.0 — 18.1 Income tax (benefit) expense — 9.5 (1.6 ) — 7.9 Earnings before equity in net income of subsidiaries — 7.6 2.6 — 10.2 Equity in net income of subsidiaries 10.2 2.6 — (12.8 ) — Net earnings $ 10.2 $ 10.2 $ 2.6 $ (12.8 ) $ 10.2 Comprehensive income $ 10.2 $ 10.2 $ 2.8 $ (13.0 ) $ 10.2 Condensed Consolidating Statements of Operations For the Nine Months Ended September 30, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 381.9 $ 77.3 $ (5.1 ) $ 454.1 Products net sales — 284.5 26.6 (2.7 ) 308.4 Total net sales — 666.4 103.9 (7.8 ) 762.5 Services cost of sales (exclusive of depreciation and amortization) — 170.0 49.4 (4.8 ) 214.6 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 27.8 1.6 — 29.4 Products cost of sales (exclusive of depreciation and amortization) — 164.6 18.3 (3.0 ) 179.9 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 48.6 — — 48.6 Total cost of sales — 411.0 69.3 (7.8 ) 472.5 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 133.1 23.7 — 156.8 Restructuring, impairment and other charges-net — 3.1 0.5 — 3.6 Depreciation and amortization — 26.9 3.2 — 30.1 Income from operations — 92.3 7.2 — 99.5 Interest expense-net — 0.2 0.1 — 0.3 Earnings before income taxes and equity in net income of subsidiaries — 92.1 7.1 — 99.2 Income tax expense — 38.6 0.7 — 39.3 Earnings before equity in net income of subsidiaries — 53.5 6.4 — 59.9 Equity in net income of subsidiaries 59.9 6.4 — (66.3 ) — Net earnings $ 59.9 $ 59.9 $ 6.4 $ (66.3 ) $ 59.9 Comprehensive income $ 63.7 $ 63.7 $ 10.6 $ (74.3 ) $ 63.7 |
Guarantor Financial Information Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet As of September 30, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 0.2 $ 21.3 $ 10.7 $ — $ 32.2 Receivables, less allowances — 177.7 41.6 — 219.3 Intercompany receivables — 80.5 — (80.5 ) — Intercompany short-term note receivable — — 35.0 (35.0 ) — Inventories — 21.2 2.4 — 23.6 Prepaid expenses and other current assets 7.3 7.1 3.6 (2.9 ) 15.1 Total current assets 7.5 307.8 93.3 (118.4 ) 290.2 Property, plant and equipment-net — 31.4 3.3 — 34.7 Goodwill — 429.2 18.3 — 447.5 Other intangible assets-net — 35.2 9.0 — 44.2 Software-net — 41.5 0.4 — 41.9 Deferred income taxes — 32.6 4.0 — 36.6 Other noncurrent assets 3.7 30.2 4.7 — 38.6 Investments in consolidated subsidiaries 750.3 85.2 — (835.5 ) — Total assets $ 761.5 $ 993.1 $ 133.0 $ (953.9 ) $ 933.7 LIABILITIES AND EQUITY Accounts payable $ — $ 61.5 $ 12.9 $ — $ 74.4 Intercompany payable 64.5 — 16.0 (80.5 ) — Intercompany short-term note payable 35.0 — — (35.0 ) — Accrued liabilities — 97.9 15.1 (2.9 ) 110.1 Total current liabilities 99.5 159.4 44.0 (118.4 ) 184.5 Long-term debt 488.4 — — — 488.4 Deferred compensation liabilities — 24.6 — — 24.6 Pension and other postretirement benefits plan liabilities — 50.2 1.2 — 51.4 Other noncurrent liabilities — 8.6 2.6 — 11.2 Total liabilities 587.9 242.8 47.8 (118.4 ) 760.1 Total equity 173.6 750.3 85.2 (835.5 ) 173.6 Total liabilities and equity $ 761.5 $ 993.1 $ 133.0 $ (953.9 ) $ 933.7 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 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 liabilities — 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 Nine Months Ended September 30, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (4.3 ) $ 21.8 $ 13.8 $ 2.4 $ 33.7 INVESTING ACTIVITIES Capital expenditures — (19.2 ) (0.8 ) — (20.0 ) Purchase of investment — (3.4 ) — — (3.4 ) Intercompany note receivable — — (19.7 ) 19.7 — Other investing activities — 0.3 — — 0.3 Net cash provided by (used in) investing activities — (22.3 ) (20.5 ) 19.7 (23.1 ) FINANCING ACTIVITIES Revolving facility borrowings 230.0 — — — 230.0 Payments on revolving facility borrowings (230.0 ) — — — (230.0 ) Payments on long-term debt (100.0 ) — — — (100.0 ) Debt issuance costs (1.5 ) — — — (1.5 ) Separation-related payment from R.R. Donnelley 68.0 — — — 68.0 Proceeds from the issuance of common stock 18.8 — — — 18.8 Treasury stock repurchases (0.9 ) — — — (0.9 ) Intercompany note payable 19.7 — — (19.7 ) — Other financing activities 0.4 — — — 0.4 Net cash provided by (used in) financing activities 4.5 — — (19.7 ) (15.2 ) Effect of exchange rate on cash and cash equivalents — — 0.6 — 0.6 Net (decrease) increase in cash and cash equivalents 0.2 (0.5 ) (6.1 ) 2.4 (4.0 ) Cash and cash equivalents at beginning of year — 21.8 16.8 (2.4 ) 36.2 Cash and cash equivalents at end of period $ 0.2 $ 21.3 $ 10.7 $ — $ 32.2 Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash provided by operating activities $ — $ 52.6 $ 4.2 $ — $ 56.8 INVESTING ACTIVITIES Capital expenditures — (12.8 ) (1.2 ) — (14.0 ) Purchase of investment — (3.5 ) — — (3.5 ) Other investing activities — — 0.5 — 0.5 Net cash used in investing activities — (16.3 ) (0.7 ) — (17.0 ) FINANCING ACTIVITIES Debt issuance costs (9.3 ) — — — (9.3 ) Proceeds from issuance of long-term debt 348.2 — — — 348.2 Net change in short-term debt — — (8.8 ) — (8.8 ) Net transfers to Parent and affiliates (338.9 ) (9.1 ) 11.8 — (336.2 ) Net cash (used in) provided by financing activities — (9.1 ) 3.0 — (6.1 ) Effect of exchange rate on cash and cash equivalents — — 4.2 — 4.2 Net increase in cash and cash equivalents — 27.2 10.7 — 37.9 Cash and cash equivalents at beginning of year — 0.1 15.0 — 15.1 Cash and cash equivalents at end of period $ — $ 27.3 $ 25.7 $ — $ 53.0 |
Overview and Basis of Present35
Overview and Basis of Presentation - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Aug. 01, 2017 | Jun. 21, 2017 | Mar. 28, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 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. | ||||||||
Number of common stock sold | 6.1 | ||||||||
Proceeds from the issuance of common stock | $ 18.8 | $ 0 | |||||||
Net Sales | $ 222.6 | $ 224.4 | $ 780.1 | 762.5 | |||||
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 | At the time of the Separation, 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 makes available 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 | 0.1 | 6.2 | 0.1 | 0.1 | |||||
Ownership percentage | 19.25% | ||||||||
Net pension plan liabilities | $ 68.3 | ||||||||
Total benefit plan liability | 317 | ||||||||
Decrease to the fair value of plan assets | $ (0.7) | ||||||||
Plan assets, fair market value | 248.7 | ||||||||
Net other postretirement benefit liability | $ 1.5 | ||||||||
RRD and Affiliates | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Net Sales | 1.1 | 3.6 | |||||||
Cost of sales | $ 20.2 | $ 78 | |||||||
Underwritten Public Offering | R.R. Donnelley & Sons Company | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Number of common stock sold | 0.1 | 6.1 | 6.2 | ||||||
Proceeds from the issuance of common stock | $ 18.8 | ||||||||
Underwritten Public Offering | R.R. Donnelley & Sons Company | Common Stock | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Stock issued upon exercise of underwriters options | 0.9 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Net [Abstract] | ||
Raw materials and manufacturing supplies | $ 6.4 | $ 7.6 |
Work in process | 11.4 | 10.8 |
Finished goods | 5.8 | 5.7 |
Total | $ 23.6 | $ 24.1 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Company's Property, Plant and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 158.1 | $ 163.6 |
Less: Accumulated depreciation | (123.4) | (128.1) |
Total | 34.7 | 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 | 43.7 | 44.4 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 104.4 | $ 109.2 |
Property, Plant and Equipment38
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation expense | $ 1.9 | $ 1.4 | $ 5 | $ 6.1 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets - Schedule of Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Line Items] | |
Goodwill net book value, beginning balance | $ 446.4 |
Foreign exchange and other adjustments | 1.1 |
Goodwill net book value, ending balance | 447.5 |
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 | 1.1 |
Goodwill net book value, ending balance | $ 18.3 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 150.1 | $ 148.3 |
Accumulated Amortization | (105.9) | (94) |
Net Book Value | 44.2 | 54.3 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 140.6 | 138.8 |
Accumulated Amortization | (97.1) | (85.3) |
Net Book Value | 43.5 | 53.5 |
Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6.3 | 6.3 |
Accumulated Amortization | (5.6) | (5.5) |
Net Book Value | 0.7 | 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 Intangible41
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for other intangible assets | $ 3.6 | $ 3.6 | $ 10.7 | $ 10.8 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets - Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets (Detail) $ in Millions | Sep. 30, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,017 | $ 14.3 |
2,018 | 13.9 |
2,019 | 13.9 |
2,020 | 12.5 |
2,021 | 0.1 |
2022 and thereafter | 0.2 |
Total | $ 54.9 |
Restructuring, Impairment and43
Restructuring, Impairment and Other Charges - Schedule of Restructuring, Impairment and Other Charges Recognized in Results of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost And Reserve [Line Items] | ||||
Employee Terminations | $ 0.4 | $ 1.3 | $ 5.2 | $ 2.3 |
Other Restructuring Charges | (1) | 0.4 | 0.9 | 1.2 |
Total Restructuring Charges | (0.6) | 1.7 | 6.1 | 3.5 |
Impairment | 0.2 | 0 | ||
Other Charges | 0.1 | 0.1 | ||
Total | (0.6) | 1.7 | 6.4 | 3.6 |
U.S. | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Employee Terminations | 0.2 | 1 | 3.2 | 1.8 |
Other Restructuring Charges | (1) | 0.4 | 0.9 | 1.2 |
Total Restructuring Charges | (0.8) | 1.4 | 4.1 | 3 |
Impairment | 0.2 | 0 | ||
Other Charges | 0.1 | 0.1 | ||
Total | (0.8) | 1.4 | 4.4 | 3.1 |
International | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Employee Terminations | 0.1 | 0.3 | 1.3 | 0.5 |
Other Restructuring Charges | 0 | 0 | 0 | 0 |
Total Restructuring Charges | 0.1 | 0.3 | 1.3 | 0.5 |
Impairment | 0 | 0 | ||
Other Charges | 0 | 0 | ||
Total | 0.1 | 0.3 | 1.3 | 0.5 |
Corporate | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Employee Terminations | 0.1 | 0 | 0.7 | 0 |
Other Restructuring Charges | 0 | 0 | 0 | 0 |
Total Restructuring Charges | 0.1 | 0 | 0.7 | 0 |
Impairment | 0 | 0 | ||
Other Charges | 0 | 0 | ||
Total | $ 0.1 | $ 0 | $ 0.7 | $ 0 |
Restructuring, Impairment and44
Restructuring, Impairment and Other Charges - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)Employee | Sep. 30, 2016USD ($)Employee | Sep. 30, 2017USD ($)Employee | Sep. 30, 2016USD ($)Employee | |
Restructuring And Related Activities [Abstract] | ||||
Employee termination costs | $ 0.4 | $ 1.3 | $ 5.2 | $ 2.3 |
Number of employees used to determine employee termination costs | Employee | 169 | 22 | 169 | 22 |
Net reversal of other restructuring charges | $ 1 | |||
Other restructuring charges | $ (1) | $ 0.4 | $ 0.9 | $ 1.2 |
Impairment charges | 0.2 | 0 | ||
Other charges | $ 0.1 | $ 0.1 |
Restructuring, Impairment and45
Restructuring, Impairment and Other Charges - Schedule of Changes in the Restructuring Reserve (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost And Reserve [Line Items] | ||||
Balance at the beginning | $ 5.4 | |||
Restructuring Charges | $ (0.6) | $ 1.7 | 6.1 | $ 3.5 |
Foreign Exchange and Other | 0.3 | |||
Cash Paid | (6.8) | |||
Balance at the end | 5 | 5 | ||
Employee terminations | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Balance at the beginning | 1.6 | |||
Restructuring Charges | 5.2 | |||
Foreign Exchange and Other | 0.1 | |||
Cash Paid | (5.3) | |||
Balance at the end | 1.6 | 1.6 | ||
Lease terminations and other | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Balance at the beginning | 3.8 | |||
Restructuring Charges | 0.9 | |||
Foreign Exchange and Other | 0.2 | |||
Cash Paid | (1.5) | |||
Balance at the end | $ 3.4 | $ 3.4 |
Restructuring, Impairment and46
Restructuring, Impairment and Other Charges - Restructuring Reserve - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restructuring And Related Activities [Abstract] | |
Current restructuring reserve (included in accrued liabilities) | $ 3.2 |
Noncurrent restructuring reserve (included in noncurrent liabilities) | $ 1.8 |
Employee termination payments expected completion date | Mar. 31, 2018 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Details) - R.R. Donnelley & Sons Company - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2016 | Oct. 01, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension cost and other postretirement benefits | $ 1.3 | $ 4.2 | ||
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 | |||
Decrease in fair value of plan assets | $ (0.7) | |||
Other Postretirement Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension cost and other postretirement benefits | $ 0.3 | $ 1 |
Retirement Plans - Components o
Retirement Plans - Components of Estimated Net Pension Plan Income (Detail) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension expense (income) | ||||
Interest cost | $ 2.6 | $ 0 | $ 7.9 | $ 0 |
Expected return on assets | (4) | 0 | (12) | 0 |
Amortization, net | 0.6 | (0.2) | 1.6 | (0.4) |
Net pension income | $ (0.8) | $ (0.2) | $ (2.5) | $ (0.4) |
Equity - Schedule of the Compan
Equity - Schedule of the Company's Equity Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Equity [Line Items] | ||||
Beginning Balance | $ 111.1 | $ 623.5 | ||
Net earnings | $ 5.3 | $ 10.2 | 33.4 | 59.9 |
Transfers from parent company, net | (598.6) | |||
Other comprehensive income | 2.5 | 0 | 5.6 | 3.8 |
Separation-related adjustments | 0.2 | |||
Share-based compensation | 5.2 | |||
Issuance of share-based awards, net of withholdings and other | (0.7) | |||
Ending Balance | 173.6 | 88.6 | 173.6 | 88.6 |
Common Stock | ||||
Equity [Line Items] | ||||
Issuance of common stock | 18.8 | |||
Net Parent Company Investment | ||||
Equity [Line Items] | ||||
Beginning Balance | 639.5 | |||
Net earnings | 59.9 | |||
Transfers from parent company, net | (598.6) | |||
Other comprehensive income | 0 | |||
Ending Balance | 100.8 | 100.8 | ||
Accumulated Other Comprehensive Loss | ||||
Equity [Line Items] | ||||
Beginning Balance | (68.3) | (16) | ||
Net earnings | 0 | |||
Transfers from parent company, net | 0 | |||
Other comprehensive income | 3.8 | |||
Ending Balance | $ (62.7) | $ (12.2) | $ (62.7) | $ (12.2) |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | Jun. 21, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Equity [Line Items] | |||
Proceeds from the issuance of common stock | $ 18.8 | $ 0 | |
Underwritten Public Offering | R.R. Donnelley & Sons Company | |||
Equity [Line Items] | |||
Proceeds from the issuance of common stock | $ 18.8 | ||
Underwritten Public Offering | Common Stock | R.R. Donnelley & Sons Company | |||
Equity [Line Items] | |||
Stock issued upon exercise of underwriters options | 0.9 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) shares in Millions | Aug. 01, 2017shares | Jun. 21, 2017shares | Mar. 28, 2017shares | Oct. 01, 2016shares | Sep. 30, 2017shares | Sep. 30, 2016shares |
Earnings Per Share [Line Items] | ||||||
Distribution of common shares during spinoff | 26.2 | |||||
Number of common stock sold | 6.1 | |||||
R.R. Donnelley & Sons Company | ||||||
Earnings Per Share [Line Items] | ||||||
Distribution of common shares during spinoff | 26.2 | |||||
Number of common stock retained | 0.1 | 6.2 | 0.1 | |||
Basic and diluted common shares outstanding | 32.4 | |||||
R.R. Donnelley & Sons Company | Underwritten Public Offering | ||||||
Earnings Per Share [Line Items] | ||||||
Number of common stock sold | 0.1 | 6.1 | 6.2 | |||
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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share Basic And Diluted [Line Items] | ||||
Basic | $ 0.16 | $ 0.31 | $ 1.01 | $ 1.85 |
Diluted | $ 0.16 | $ 0.31 | $ 1.01 | $ 1.85 |
Net earnings | $ 5.3 | $ 10.2 | $ 33.4 | $ 59.9 |
Weighted average number of common shares outstanding | 33.6 | 32.4 | 33 | 32.4 |
Dilutive awards | 0.2 | 0 | 0.2 | 0 |
Diluted weighted average number of common shares outstanding | 33.8 | 32.4 | 33.2 | 32.4 |
Total weighted average number of anti-dilutive share-based awards | 0.4 | 0 | 0.5 | 0 |
Restricted stock units | ||||
Earnings Per Share Basic And Diluted [Line Items] | ||||
Total weighted average number of anti-dilutive share-based awards | 0 | 0 | 0.2 | 0 |
Stock options | ||||
Earnings Per Share Basic And Diluted [Line Items] | ||||
Total weighted average number of anti-dilutive share-based awards | 0.4 | 0 | 0.3 | 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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income, Before Tax Amount | $ 2.8 | $ 0 | $ 6.2 | $ 3.8 |
Other comprehensive (loss) income, Income Tax Expense | 0.3 | 0 | 0.6 | 0 |
Other comprehensive income, net of tax | 2.5 | 0 | 5.6 | 3.8 |
Translation adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive (loss) income, Before Tax Amount | 2.2 | 0.2 | 4.6 | 4.2 |
Other comprehensive (loss) income, Income Tax Expense | 0 | 0 | 0 | 0 |
Other comprehensive income, net of tax | 2.2 | 0.2 | 4.6 | 4.2 |
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 | 0.6 | (0.2) | 1.6 | (0.4) |
Other comprehensive (loss) income, Income Tax Expense | 0.3 | 0 | 0.6 | 0 |
Other comprehensive income, net of tax | $ 0.3 | $ (0.2) | $ 1 | $ (0.4) |
Comprehensive Income - Schedu54
Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | $ 111.1 | $ 623.5 | ||
Other comprehensive income before reclassifications | 4.6 | 4.2 | ||
Amounts reclassified from accumulated other comprehensive loss | 1 | (0.4) | ||
Other comprehensive income, net of tax | $ 2.5 | $ 0 | 5.6 | 3.8 |
Ending Balance | 173.6 | 88.6 | 173.6 | 88.6 |
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 | 1 | (0.4) | ||
Other comprehensive income, net of tax | 0.3 | (0.2) | 1 | (0.4) |
Ending Balance | (51.2) | (0.4) | (51.2) | (0.4) |
Translation adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (16.1) | (16) | ||
Other comprehensive income before reclassifications | 4.6 | 4.2 | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Other comprehensive income, net of tax | 2.2 | 0.2 | 4.6 | 4.2 |
Ending Balance | (11.5) | (11.8) | (11.5) | (11.8) |
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (68.3) | (16) | ||
Other comprehensive income, net of tax | 3.8 | |||
Ending Balance | $ (62.7) | $ (12.2) | $ (62.7) | $ (12.2) |
Comprehensive Income - Reclassi
Comprehensive Income - Reclassifications from Accumulated Other Comprehensive Loss Amortization of Pension Plan Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 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] | $ 0.6 | $ (0.2) | $ 1.6 | $ (0.4) |
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 | 0.6 | (0.2) | 1.6 | (0.4) | |
Income tax expense | 0.3 | 0 | 0.6 | 0 | |
Reclassifications, net of tax | $ 0.3 | $ (0.2) | $ 1 | $ (0.4) | |
[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 6, Retirement Plans). |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 222.6 | $ 224.4 | $ 780.1 | $ 762.5 | |
Income (Loss) from Operations | 18 | 18 | 88.1 | 99.5 | |
Assets of Operations | 933.7 | 914 | 933.7 | 914 | $ 978.9 |
Depreciation and amortization | 10.6 | 9.8 | 31.7 | 30.1 | |
Capital Expenditures | 8 | 1.7 | 20 | 14 | |
Total Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 226 | 226.8 | 790.6 | 770.3 | |
Income (Loss) from Operations | 23.9 | 19.8 | 115.1 | 107.2 | |
Assets of Operations | 811.3 | 814.1 | 811.3 | 814.1 | |
Depreciation and amortization | 10.6 | 9.6 | 31.7 | 29.4 | |
Capital Expenditures | 7.8 | 1.3 | 18.9 | 11.4 | |
Intersegment Sales | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | (3.4) | (2.4) | (10.5) | (7.8) | |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Income (Loss) from Operations | (5.9) | (1.8) | (27) | (7.7) | |
Assets of Operations | 122.4 | 99.9 | 122.4 | 99.9 | |
Depreciation and amortization | 0 | 0.2 | 0 | 0.7 | |
Capital Expenditures | 0.2 | 0.4 | 1.1 | 2.6 | |
U.S. | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 186.1 | 192.3 | 658.2 | 662.4 | |
U.S. | Total Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 188.9 | 193.6 | 665.8 | 666.4 | |
Income (Loss) from Operations | 22.4 | 18.7 | 107.5 | 100 | |
Assets of Operations | 715.3 | 714.2 | 715.3 | 714.2 | |
Depreciation and amortization | 9.2 | 8.5 | 27.5 | 26.2 | |
Capital Expenditures | 7.7 | 1.3 | 18.1 | 10.2 | |
U.S. | Intersegment Sales | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | (2.8) | (1.3) | (7.6) | (4) | |
International | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 36.5 | 32.1 | 121.9 | 100.1 | |
International | Total Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 37.1 | 33.2 | 124.8 | 103.9 | |
Income (Loss) from Operations | 1.5 | 1.1 | 7.6 | 7.2 | |
Assets of Operations | 96 | 99.9 | 96 | 99.9 | |
Depreciation and amortization | 1.4 | 1.1 | 4.2 | 3.2 | |
Capital Expenditures | 0.1 | 0 | 0.8 | 1.2 | |
International | Intersegment Sales | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | $ (0.6) | $ (1.1) | $ (2.9) | $ (3.8) |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) shares in Millions | Oct. 02, 2017 | Aug. 01, 2017 | Jun. 21, 2017 | Apr. 03, 2017 | Mar. 28, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Apr. 25, 2017 | Oct. 01, 2016 |
Debt Instrument [Line Items] | |||||||||||
Number of common stock sold | 6.1 | ||||||||||
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 | $ 299,900,000 | ||||||
Interest rate, stated percentage | 8.25% | 8.25% | 8.25% | 8.25% | |||||||
Maturity date | Oct. 15, 2024 | Oct. 15, 2024 | Oct. 15, 2024 | ||||||||
Fair value of senior notes | $ 322,200,000 | $ 307,100,000 | |||||||||
R.R. Donnelley & Sons Company | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of debt | $ 340,200,000 | ||||||||||
Number of common stock retained | 0.1 | 0.1 | 6.2 | ||||||||
R.R. Donnelley & Sons Company | Underwritten Public Offering | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of common stock sold | 0.1 | 6.1 | 6.2 | ||||||||
Stock issued upon exercise of underwriters options | 0.9 | ||||||||||
Proceeds from sale of options exercised | $ 18,800,000 | ||||||||||
R.R. Donnelley & Sons Company | 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 | $ 198,500,000 | 298,300,000 | |||||||||
Senior Secured Term Loan B Facility | LIBOR | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument interest rate basis spread on variable rate decrease | 1.00% | ||||||||||
Debt instrument, basis spread on variable rate | 3.00% | ||||||||||
Debt instrument, interest rate basis spread on floor rate decrease | 0.25% | ||||||||||
Debt instrument floor rate | 0.75% | ||||||||||
Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility | 300,000,000 | 300,000,000 | |||||||||
Outstanding borrowings | $ 0 | $ 0 | |||||||||
Weighted average interest rate on borrowings | 4.40% | ||||||||||
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 ($) | Sep. 30, 2017 | Apr. 25, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ (10,100,000) | $ (11,300,000) | ||
Total debt | 488,400,000 | 587,000,000 | ||
Less: current portion | 0 | 0 | ||
Long-term debt (Note 11) | 488,400,000 | 587,000,000 | ||
8.25% Senior Notes Due October 15, 2024 | ||||
Debt Instrument [Line Items] | ||||
Senior notes | 300,000,000 | $ 299,900,000 | 300,000,000 | $ 300,000,000 |
Senior Secured Term Loan B Facility | ||||
Debt Instrument [Line Items] | ||||
Credit facility | 198,500,000 | 298,300,000 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Credit facility | $ 0 | $ 0 |
Debt - Schedule of the Compan59
Debt - Schedule of the Company's Debt (Parenthetical) (Details) - 8.25% Senior Notes Due October 15, 2024 | Sep. 30, 2016 | Sep. 30, 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 ($) shares in Millions, $ in Millions | Aug. 01, 2017 | Jun. 21, 2017 | Apr. 03, 2017 | Mar. 28, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Oct. 01, 2016 | ||
Related Party Transaction [Line Items] | |||||||||||||
Number of common stock sold | 6.1 | ||||||||||||
Sale of common stock transaction date | Jun. 21, 2017 | ||||||||||||
Common stock shares issued retained | 0.1 | ||||||||||||
Net Sales | $ 222.6 | $ 224.4 | $ 780.1 | $ 762.5 | |||||||||
Products cost of sales (exclusive of depreciation and amortization) | 58.9 | 62 | 190.7 | 179.9 | |||||||||
Services cost of sales (exclusive of depreciation and amortization) | 81.7 | 64.2 | $ 240.2 | 214.6 | |||||||||
Share-based compensation costs | 0.2 | 1.2 | |||||||||||
Outsourcing Business | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Services cost of sales (exclusive of depreciation and amortization) | 8.7 | 29.4 | |||||||||||
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 | At the time of the Separation, 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 makes available to all of its clients. | ||||||||||||
Term of agreement | 24 months | ||||||||||||
R.R. Donnelley & Sons Company | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Receivable from related parties | [1] | 0 | $ 0 | $ 96 | |||||||||
Payables to related parties | $ 27.1 | ||||||||||||
Net pension plan liabilities | $ 68.3 | ||||||||||||
Total benefit plan liability | 317 | ||||||||||||
Plan assets, fair market value | $ 248.7 | ||||||||||||
Decrease to the fair value of plan assets | $ (0.7) | ||||||||||||
R.R. Donnelley & Sons Company | Separation and Distribution Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Cash payment received from RR Donnelley | $ 68 | ||||||||||||
R.R. Donnelley & Sons Company | Freight and Logistics and Services | Printed Products | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Products cost of sales (exclusive of depreciation and amortization) | 11.5 | 48.6 | |||||||||||
R.R. Donnelley & Sons Company | Underwritten Public Offering | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Number of common stock sold | 0.1 | 6.1 | 6.2 | ||||||||||
Sale of common stock transaction date | Aug. 1, 2017 | ||||||||||||
R.R. Donnelley Affiliates | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Net Sales | 1.1 | 3.6 | |||||||||||
Products cost of sales (exclusive of depreciation and amortization) | [2] | 0 | 11.5 | 32.3 | [1] | 48.6 | |||||||
Services cost of sales (exclusive of depreciation and amortization) | [2] | $ 0 | $ 8.7 | $ 19.5 | [1] | $ 29.4 | |||||||
[1] | Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. | ||||||||||||
[2] | Beginning in the quarter ended September 30, 2017, R.R. Donnelley & Sons Company ("RRD") no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. |
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 - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Related Party Transaction [Line Items] | ||
Total allocations from RRD | $ 51.9 | $ 172.6 |
Costs of goods sold | ||
Related Party Transaction [Line Items] | ||
Total allocations from RRD | 8.3 | 28 |
Selling, general and administrative | ||
Related Party Transaction [Line Items] | ||
Total allocations from RRD | 38.3 | 129.4 |
Depreciation and amortization | ||
Related Party Transaction [Line Items] | ||
Total allocations from RRD | $ 5.3 | $ 15.2 |
Guarantor Financial Informati62
Guarantor Financial Information - Additional Information (Details) | Sep. 30, 2017 |
Guarantor Subsidiaries | |
Condensed Income Statements Captions [Line Items] | |
Percentage of ownership in directly owned subsidiaries | 100.00% |
Guarantor Financial Informati63
Guarantor Financial Information - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |||
Condensed Income Statements Captions [Line Items] | ||||||
Services net sales | $ 140.3 | $ 139.4 | $ 471.4 | $ 454.1 | ||
Products net sales | 82.3 | 85 | 308.7 | 308.4 | ||
Total net sales | 222.6 | 224.4 | 780.1 | 762.5 | ||
Services cost of sales (exclusive of depreciation and amortization) | 81.7 | 64.2 | 240.2 | 214.6 | ||
Products cost of sales (exclusive of depreciation and amortization) | 58.9 | 62 | 190.7 | 179.9 | ||
Total cost of sales | 140.6 | 146.4 | 482.7 | 472.5 | ||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 54 | 48.5 | 171.2 | 156.8 | ||
Restructuring, impairment and other charges-net | (0.6) | 1.7 | 6.4 | 3.6 | ||
Depreciation and amortization | 10.6 | 9.8 | 31.7 | 30.1 | ||
Income from operations | 18 | 18 | 88.1 | 99.5 | ||
Interest expense (income)-net | 10.6 | (0.1) | 32.7 | 0.3 | ||
Earnings (loss) before income taxes and equity in net income of subsidiaries | 7.4 | 18.1 | 55.4 | 99.2 | ||
Income tax (benefit) expense | 2.1 | 7.9 | 22 | 39.3 | ||
Earnings (loss) before equity in net income of subsidiaries | 5.3 | 10.2 | 33.4 | 59.9 | ||
Net earnings | 5.3 | 10.2 | 33.4 | 59.9 | ||
Comprehensive income (loss) | 7.8 | 10.2 | 39 | 63.7 | ||
R.R. Donnelley Affiliates | ||||||
Condensed Income Statements Captions [Line Items] | ||||||
Total net sales | 1.1 | 3.6 | ||||
Services cost of sales (exclusive of depreciation and amortization) | [1] | 0 | 8.7 | 19.5 | [2] | 29.4 |
Products cost of sales (exclusive of depreciation and amortization) | [1] | 0 | 11.5 | 32.3 | [2] | 48.6 |
Eliminations | ||||||
Condensed Income Statements Captions [Line Items] | ||||||
Services net sales | (2.1) | (1.6) | (6.5) | (5.1) | ||
Products net sales | (1.3) | (0.8) | (4) | (2.7) | ||
Total net sales | (3.4) | (2.4) | (10.5) | (7.8) | ||
Services cost of sales (exclusive of depreciation and amortization) | (2) | (1.5) | (5.9) | (4.8) | ||
Products cost of sales (exclusive of depreciation and amortization) | (1.4) | (0.9) | (4.6) | (3) | ||
Total cost of sales | (3.4) | (2.4) | (10.5) | (7.8) | ||
Equity in net income of subsidiaries | (13) | (12.8) | (57.8) | (66.3) | ||
Net earnings | (13) | (12.8) | (57.8) | (66.3) | ||
Comprehensive income (loss) | (17.7) | (13) | (68) | (74.3) | ||
Parent | ||||||
Condensed Income Statements Captions [Line Items] | ||||||
Interest expense (income)-net | 10.2 | 32.7 | ||||
Earnings (loss) before income taxes and equity in net income of subsidiaries | (10.2) | (32.7) | ||||
Income tax (benefit) expense | (5.1) | (14.4) | ||||
Earnings (loss) before equity in net income of subsidiaries | (5.1) | (18.3) | ||||
Equity in net income of subsidiaries | 10.4 | 10.2 | 51.7 | 59.9 | ||
Net earnings | 5.3 | 10.2 | 33.4 | 59.9 | ||
Comprehensive income (loss) | 7.8 | 10.2 | 39 | 63.7 | ||
Guarantor Subsidiaries | ||||||
Condensed Income Statements Captions [Line Items] | ||||||
Services net sales | 112.3 | 115.5 | 386.7 | 381.9 | ||
Products net sales | 76.6 | 78.1 | 279.1 | 284.5 | ||
Total net sales | 188.9 | 193.6 | 665.8 | 666.4 | ||
Services cost of sales (exclusive of depreciation and amortization) | 63.6 | 49.3 | 186.9 | 170 | ||
Products cost of sales (exclusive of depreciation and amortization) | 56 | 57.7 | 174.6 | 164.6 | ||
Total cost of sales | 119.6 | 126.7 | 410 | 411 | ||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 44.2 | 39.9 | 142.6 | 133.1 | ||
Restructuring, impairment and other charges-net | (0.7) | 1.4 | 5.1 | 3.1 | ||
Depreciation and amortization | 9.2 | 8.7 | 27.5 | 26.9 | ||
Income from operations | 16.6 | 16.9 | 80.6 | 92.3 | ||
Interest expense (income)-net | 0.4 | (0.2) | 0.2 | |||
Earnings (loss) before income taxes and equity in net income of subsidiaries | 16.2 | 17.1 | 80.6 | 92.1 | ||
Income tax (benefit) expense | 8.4 | 9.5 | 35 | 38.6 | ||
Earnings (loss) before equity in net income of subsidiaries | 7.8 | 7.6 | 45.6 | 53.5 | ||
Equity in net income of subsidiaries | 2.6 | 2.6 | 6.1 | 6.4 | ||
Net earnings | 10.4 | 10.2 | 51.7 | 59.9 | ||
Comprehensive income (loss) | 12.9 | 10.2 | 57.3 | 63.7 | ||
Guarantor Subsidiaries | R.R. Donnelley Affiliates | ||||||
Condensed Income Statements Captions [Line Items] | ||||||
Services cost of sales (exclusive of depreciation and amortization) | 8.2 | 18.4 | [2] | 27.8 | ||
Products cost of sales (exclusive of depreciation and amortization) | 11.5 | 30.1 | [2] | 48.6 | ||
Non-guarantor Subsidiaries | ||||||
Condensed Income Statements Captions [Line Items] | ||||||
Services net sales | 30.1 | 25.5 | 91.2 | 77.3 | ||
Products net sales | 7 | 7.7 | 33.6 | 26.6 | ||
Total net sales | 37.1 | 33.2 | 124.8 | 103.9 | ||
Services cost of sales (exclusive of depreciation and amortization) | 20.1 | 16.4 | 59.2 | 49.4 | ||
Products cost of sales (exclusive of depreciation and amortization) | 4.3 | 5.2 | 20.7 | 18.3 | ||
Total cost of sales | 24.4 | 22.1 | 83.2 | 69.3 | ||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 9.8 | 8.6 | 28.6 | 23.7 | ||
Restructuring, impairment and other charges-net | 0.1 | 0.3 | 1.3 | 0.5 | ||
Depreciation and amortization | 1.4 | 1.1 | 4.2 | 3.2 | ||
Income from operations | 1.4 | 1.1 | 7.5 | 7.2 | ||
Interest expense (income)-net | 0.1 | 0.1 | ||||
Earnings (loss) before income taxes and equity in net income of subsidiaries | 1.4 | 1 | 7.5 | 7.1 | ||
Income tax (benefit) expense | (1.2) | (1.6) | 1.4 | 0.7 | ||
Earnings (loss) before equity in net income of subsidiaries | 2.6 | 2.6 | 6.1 | 6.4 | ||
Net earnings | 2.6 | 2.6 | 6.1 | 6.4 | ||
Comprehensive income (loss) | $ 4.8 | 2.8 | 10.7 | 10.6 | ||
Non-guarantor Subsidiaries | R.R. Donnelley Affiliates | ||||||
Condensed Income Statements Captions [Line Items] | ||||||
Services cost of sales (exclusive of depreciation and amortization) | $ 0.5 | 1.1 | [2] | $ 1.6 | ||
Products cost of sales (exclusive of depreciation and amortization) | [2] | $ 2.2 | ||||
[1] | Beginning in the quarter ended September 30, 2017, R.R. Donnelley & Sons Company ("RRD") no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. | |||||
[2] | Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. |
Guarantor Financial Informati64
Guarantor Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
ASSETS | |||||
Cash and cash equivalents | $ 32.2 | $ 36.2 | $ 53 | $ 15.1 | |
Receivables, less allowances | 219.3 | 156.2 | |||
Inventories | 23.6 | 24.1 | |||
Prepaid expenses and other current assets | 15.1 | 17.1 | |||
Total current assets | 290.2 | 329.6 | |||
Property, plant and equipment-net | 34.7 | 35.5 | |||
Goodwill | 447.5 | 446.4 | |||
Other intangible assets-net | 44.2 | 54.3 | |||
Software-net | 41.9 | 41.6 | |||
Deferred income taxes | 36.6 | 37 | |||
Other noncurrent assets | 38.6 | 34.5 | |||
Total assets | 933.7 | 978.9 | 914 | ||
LIABILITIES AND EQUITY | |||||
Accounts payable | 74.4 | 85.3 | |||
Accrued liabilities | 110.1 | 100.7 | |||
Total current liabilities | 184.5 | 186 | |||
Long-term debt | 488.4 | 587 | |||
Deferred compensation liabilities | 24.6 | 24.4 | |||
Pension and other postretirement benefits plan liabilities | 51.4 | 56.4 | |||
Other noncurrent liabilities | 11.2 | 14 | |||
Total liabilities | 760.1 | 867.8 | |||
Total equity | 173.6 | 111.1 | 88.6 | 623.5 | |
Total liabilities and equity | 933.7 | 978.9 | |||
R.R. Donnelley & Sons Company | |||||
ASSETS | |||||
Receivables from R.R. Donnelley | [1] | 0 | 96 | ||
Eliminations | |||||
ASSETS | |||||
Cash and cash equivalents | (2.4) | ||||
Intercompany receivables | (80.5) | (63) | |||
Intercompany short-term note receivable | (35) | (15.3) | |||
Prepaid expenses and other current assets | (2.9) | ||||
Total current assets | (118.4) | (80.7) | |||
Investments in consolidated subsidiaries | (835.5) | (757.3) | |||
Total assets | (953.9) | (838) | |||
LIABILITIES AND EQUITY | |||||
Accounts payable | (2.4) | ||||
Intercompany payable | (80.5) | (62.5) | |||
Intercompany short-term note payable | (35) | (15.3) | |||
Accrued liabilities | (2.9) | (0.5) | |||
Total current liabilities | (118.4) | (80.7) | |||
Total liabilities | (118.4) | (80.7) | |||
Total equity | (835.5) | (757.3) | |||
Total liabilities and equity | (953.9) | (838) | |||
Parent | |||||
ASSETS | |||||
Cash and cash equivalents | 0.2 | ||||
Prepaid expenses and other current assets | 7.3 | 4.3 | |||
Total current assets | 7.5 | 72.3 | |||
Other noncurrent assets | 3.7 | 4.4 | |||
Investments in consolidated subsidiaries | 750.3 | 692.2 | |||
Total assets | 761.5 | 768.9 | |||
LIABILITIES AND EQUITY | |||||
Accounts payable | 3.4 | ||||
Intercompany payable | 64.5 | 43.9 | |||
Intercompany short-term note payable | 35 | 15.3 | |||
Accrued liabilities | 8.2 | ||||
Total current liabilities | 99.5 | 70.8 | |||
Long-term debt | 488.4 | 587 | |||
Total liabilities | 587.9 | 657.8 | |||
Total equity | 173.6 | 111.1 | |||
Total liabilities and equity | 761.5 | 768.9 | |||
Parent | R.R. Donnelley & Sons Company | |||||
ASSETS | |||||
Receivables from R.R. Donnelley | 68 | ||||
Guarantor Subsidiaries | |||||
ASSETS | |||||
Cash and cash equivalents | 21.3 | 21.8 | 27.3 | 0.1 | |
Receivables, less allowances | 177.7 | 119.9 | |||
Intercompany receivables | 80.5 | 63 | |||
Inventories | 21.2 | 22.7 | |||
Prepaid expenses and other current assets | 7.1 | 8.1 | |||
Total current assets | 307.8 | 263.5 | |||
Property, plant and equipment-net | 31.4 | 32.4 | |||
Goodwill | 429.2 | 429.2 | |||
Other intangible assets-net | 35.2 | 44 | |||
Software-net | 41.5 | 41 | |||
Deferred income taxes | 32.6 | 34.2 | |||
Other noncurrent assets | 30.2 | 27.7 | |||
Investments in consolidated subsidiaries | 85.2 | 65.1 | |||
Total assets | 993.1 | 937.1 | |||
LIABILITIES AND EQUITY | |||||
Accounts payable | 61.5 | 72.8 | |||
Accrued liabilities | 97.9 | 81.4 | |||
Total current liabilities | 159.4 | 154.2 | |||
Deferred compensation liabilities | 24.6 | 24.4 | |||
Pension and other postretirement benefits plan liabilities | 50.2 | 55.3 | |||
Other noncurrent liabilities | 8.6 | 11 | |||
Total liabilities | 242.8 | 244.9 | |||
Total equity | 750.3 | 692.2 | |||
Total liabilities and equity | 993.1 | 937.1 | |||
Guarantor Subsidiaries | R.R. Donnelley & Sons Company | |||||
ASSETS | |||||
Receivables from R.R. Donnelley | 28 | ||||
Non-guarantor Subsidiaries | |||||
ASSETS | |||||
Cash and cash equivalents | 10.7 | 16.8 | $ 25.7 | $ 15 | |
Receivables, less allowances | 41.6 | 36.3 | |||
Intercompany short-term note receivable | 35 | 15.3 | |||
Inventories | 2.4 | 1.4 | |||
Prepaid expenses and other current assets | 3.6 | 4.7 | |||
Total current assets | 93.3 | 74.5 | |||
Property, plant and equipment-net | 3.3 | 3.1 | |||
Goodwill | 18.3 | 17.2 | |||
Other intangible assets-net | 9 | 10.3 | |||
Software-net | 0.4 | 0.6 | |||
Deferred income taxes | 4 | 2.8 | |||
Other noncurrent assets | 4.7 | 2.4 | |||
Total assets | 133 | 110.9 | |||
LIABILITIES AND EQUITY | |||||
Accounts payable | 12.9 | 11.5 | |||
Intercompany payable | 16 | 18.6 | |||
Accrued liabilities | 15.1 | 11.6 | |||
Total current liabilities | 44 | 41.7 | |||
Pension and other postretirement benefits plan liabilities | 1.2 | 1.1 | |||
Other noncurrent liabilities | 2.6 | 3 | |||
Total liabilities | 47.8 | 45.8 | |||
Total equity | 85.2 | 65.1 | |||
Total liabilities and equity | $ 133 | $ 110.9 | |||
[1] | Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. |
Guarantor Financial Informati65
Guarantor Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
OPERATING ACTIVITIES | ||||
Net cash (used in) provided by operating activities | $ 33.7 | $ 56.8 | ||
INVESTING ACTIVITIES | ||||
Capital expenditures | $ (8) | $ (1.7) | (20) | (14) |
Purchase of investment | (3.4) | (3.5) | ||
Other investing activities | 0.3 | 0.5 | ||
Net cash used in investing activities | (23.1) | (17) | ||
FINANCING ACTIVITIES | ||||
Revolving facility borrowings | 230 | 0 | ||
Payments on revolving facility borrowings | (230) | 0 | ||
Payments on long-term debt | (100) | 0 | ||
Debt issuance costs | (1.5) | (9.3) | ||
Separation-related payment from R.R. Donnelley | 68 | 0 | ||
Proceeds from the issuance of common stock | 18.8 | 0 | ||
Proceeds from issuance of long-term debt | 0 | 348.2 | ||
Treasury stock repurchases | (0.9) | 0 | ||
Other financing activities | 0.4 | 0 | ||
Net change in short-term debt | 0 | (8.8) | ||
Net transfers to Parent and affiliates | 0 | (336.2) | ||
Net cash used in financing activities | (15.2) | (6.1) | ||
Effect of exchange rate on cash and cash equivalents | 0.6 | 4.2 | ||
Net (decrease) increase in cash and cash equivalents | (4) | 37.9 | ||
Cash and cash equivalents at beginning of year | 36.2 | 15.1 | ||
Cash and cash equivalents at end of period | 32.2 | 53 | 32.2 | 53 |
Eliminations | ||||
OPERATING ACTIVITIES | ||||
Net cash (used in) provided by operating activities | 2.4 | |||
INVESTING ACTIVITIES | ||||
Intercompany note receivable | 19.7 | |||
Net cash used in investing activities | 19.7 | |||
FINANCING ACTIVITIES | ||||
Intercompany note payable | (19.7) | |||
Net cash used in financing activities | (19.7) | |||
Net (decrease) increase in cash and cash equivalents | 2.4 | |||
Cash and cash equivalents at beginning of year | (2.4) | |||
Parent | ||||
OPERATING ACTIVITIES | ||||
Net cash (used in) provided by operating activities | (4.3) | |||
FINANCING ACTIVITIES | ||||
Revolving facility borrowings | 230 | |||
Payments on revolving facility borrowings | (230) | |||
Payments on long-term debt | (100) | |||
Debt issuance costs | (1.5) | (9.3) | ||
Separation-related payment from R.R. Donnelley | 68 | |||
Proceeds from the issuance of common stock | 18.8 | |||
Proceeds from issuance of long-term debt | 348.2 | |||
Treasury stock repurchases | (0.9) | |||
Intercompany note payable | 19.7 | |||
Other financing activities | 0.4 | |||
Net transfers to Parent and affiliates | (338.9) | |||
Net cash used in financing activities | 4.5 | |||
Net (decrease) increase in cash and cash equivalents | 0.2 | |||
Cash and cash equivalents at end of period | 0.2 | 0.2 | ||
Guarantor Subsidiaries | ||||
OPERATING ACTIVITIES | ||||
Net cash (used in) provided by operating activities | 21.8 | 52.6 | ||
INVESTING ACTIVITIES | ||||
Capital expenditures | (19.2) | (12.8) | ||
Purchase of investment | (3.4) | (3.5) | ||
Other investing activities | 0.3 | |||
Net cash used in investing activities | (22.3) | (16.3) | ||
FINANCING ACTIVITIES | ||||
Net transfers to Parent and affiliates | (9.1) | |||
Net cash used in financing activities | (9.1) | |||
Net (decrease) increase in cash and cash equivalents | (0.5) | 27.2 | ||
Cash and cash equivalents at beginning of year | 21.8 | 0.1 | ||
Cash and cash equivalents at end of period | 21.3 | 27.3 | 21.3 | 27.3 |
Non-guarantor Subsidiaries | ||||
OPERATING ACTIVITIES | ||||
Net cash (used in) provided by operating activities | 13.8 | 4.2 | ||
INVESTING ACTIVITIES | ||||
Capital expenditures | (0.8) | (1.2) | ||
Intercompany note receivable | (19.7) | |||
Other investing activities | 0.5 | |||
Net cash used in investing activities | (20.5) | (0.7) | ||
FINANCING ACTIVITIES | ||||
Net change in short-term debt | (8.8) | |||
Net transfers to Parent and affiliates | 11.8 | |||
Net cash used in financing activities | 3 | |||
Effect of exchange rate on cash and cash equivalents | 0.6 | 4.2 | ||
Net (decrease) increase in cash and cash equivalents | (6.1) | 10.7 | ||
Cash and cash equivalents at beginning of year | 16.8 | 15 | ||
Cash and cash equivalents at end of period | $ 10.7 | $ 25.7 | $ 10.7 | $ 25.7 |