Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 27, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | DFIN | |
Entity Registrant Name | Donnelley Financial Solutions, Inc. | |
Entity Central Index Key | 1,669,811 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,900,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Services net sales | $ 159.5 | $ 154 | |
Products net sales | 95.7 | 113.3 | |
Total net sales | 255.2 | 267.3 | |
Services cost of sales (exclusive of depreciation and amortization) | 85.9 | 77.7 | |
Products cost of sales (exclusive of depreciation and amortization) | 72.7 | 63 | |
Total cost of sales | 158.6 | 169.4 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 66.1 | 57.5 | |
Restructuring, impairment and other charges-net | 0.7 | 3.8 | |
Depreciation and amortization | 10.4 | 10.2 | |
Income from operations | 19.4 | 26.4 | |
Interest expense-net | 9 | 11.1 | |
Investment and other income-net | (0.8) | (0.8) | |
Earnings before income taxes | 11.2 | 16.1 | |
Income tax expense | 3.5 | 6.8 | |
Net earnings | $ 7.7 | $ 9.3 | |
Net earnings per share (Note 11): | |||
Basic net earnings per share | $ 0.23 | $ 0.29 | |
Diluted net earnings per share | $ 0.23 | $ 0.28 | |
Weighted average number of common shares outstanding | |||
Basic | 33.7 | 32.6 | |
Diluted | 33.9 | 32.8 | |
R.R. Donnelley Affiliates | |||
Services cost of sales (exclusive of depreciation and amortization) | [1] | $ 0 | $ 9.9 |
Products cost of sales (exclusive of depreciation and amortization) | [1] | $ 0 | $ 18.8 |
[1] | Beginning in the quarter ended June 30, 2017, LSC Communications, Inc. (“LSC”) no longer qualified as a related party, therefore the amounts disclosed related to LSC are only presented for the three months ended March 31, 2017. 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 only presented for the three months ended March 31, 2017. |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net earnings | $ 7.7 | $ 9.3 |
Other comprehensive income, net of tax: | ||
Translation adjustments | 0.7 | 0.1 |
Adjustment for net periodic pension and other postretirement benefits plan cost | 0.5 | 0.4 |
Other comprehensive income, net of tax | 1.2 | 0.5 |
Comprehensive income | $ 8.9 | $ 9.8 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (UNAUDITED) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 12.1 | $ 52 |
Receivables, less allowances for doubtful accounts of $7.7 in 2018 (2017 - $7.3) | 239 | 165.2 |
Inventories | 18.5 | 23.3 |
Prepaid expenses and other current assets | 28.2 | 29.6 |
Total current assets | 297.8 | 270.1 |
Property, plant and equipment-net | 33.1 | 34.7 |
Goodwill | 447.3 | 447.4 |
Other intangible assets-net | 36.5 | 39.9 |
Software-net | 41.8 | 41.1 |
Deferred income taxes | 21 | 22.2 |
Other noncurrent assets | 37.7 | 38.1 |
Total assets | 915.2 | 893.5 |
LIABILITIES | ||
Accounts payable | 87.7 | 67.8 |
Accrued liabilities | 91.5 | 119.2 |
Total current liabilities | 179.2 | 187 |
Long-term debt (Note 14) | 478.8 | 458.3 |
Deferred compensation liabilities | 21.8 | 22.8 |
Pension and other postretirement benefits plan liabilities | 51 | 52.5 |
Other noncurrent liabilities | 22.8 | 23.5 |
Total liabilities | 753.6 | 744.1 |
Commitments and Contingencies (Note 15) | ||
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: 33.9 shares in 2018 (2017 - 33.8 shares) | 0.3 | 0.3 |
Treasury stock, at cost: 0.1 shares in 2018 (2017 - less than 0.1 shares) | (1.7) | (0.9) |
Additional paid-in-capital | 208.9 | 205.7 |
Retained earnings | 17.5 | 8.9 |
Accumulated other comprehensive loss | (63.4) | (64.6) |
Total equity | 161.6 | 149.4 |
Total liabilities and equity | $ 915.2 | $ 893.5 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Receivables, allowance for doubtful accounts | $ 7.7 | $ 7.3 |
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 | 34,000,000 | 33,800,000 |
Treasury stock, Shares | 100,000 | |
Maximum | ||
Treasury stock, Shares | 100,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
OPERATING ACTIVITIES | ||
Net earnings | $ 7.7 | $ 9.3 |
Adjustments to reconcile net earnings to net cash used in operating activities: | ||
Depreciation and amortization | 10.4 | 10.2 |
Provision for doubtful accounts receivable | 1 | 1.8 |
Share-based compensation | 1.8 | 1.1 |
Deferred income taxes | 0.6 | (2.2) |
Net pension plan income | (0.8) | (0.8) |
Other | 0.5 | 0.4 |
Changes in operating assets and liabilities - net of acquisitions: | ||
Accounts receivable - net | (65.4) | (66.7) |
Inventories | (5.8) | (3.4) |
Prepaid expenses and other current assets | (0.2) | (4.4) |
Accounts payable | 20.3 | 15 |
Income taxes payable and receivable | 0.6 | 7.7 |
Accrued liabilities and other | (23.1) | (6.1) |
Pension and other postretirement benefits plan contributions | (1.2) | (0.1) |
Net cash used in operating activities | (53.6) | (38.2) |
INVESTING ACTIVITIES | ||
Capital expenditures | (6.4) | (4.3) |
Purchase of investment | 0 | (3.4) |
Other investing activities | 0 | 0.2 |
Net cash used in investing activities | (6.4) | (7.5) |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 88 | 57 |
Payments on revolving facility borrowings | (68) | (37) |
Debt issuance costs | 0 | (1.5) |
Net transfers related to the Separation | 0 | 3.1 |
Proceeds from issuance of common stock | 1.2 | 0 |
Treasury stock repurchases | (0.8) | 0 |
Net cash provided by financing activities | 20.4 | 21.6 |
Effect of exchange rate on cash and cash equivalents | (0.3) | 0.2 |
Net decrease in cash and cash equivalents | (39.9) | (23.9) |
Cash and cash equivalents at beginning of year | 52 | 36.2 |
Cash and cash equivalents at end of period | $ 12.1 | $ 12.3 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
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 no longer qualified as a related party of the Company. 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 4, 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 14, 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 only for the three months ended March 31, 2017 Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Donnelley Financial Solutions, Inc. (the |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue | Note 2. Revenue Revenue Recognition The Company manages highly-customized data and materials, such as Exchange Act, Securities Act and Investment Company Act filings with the SEC on behalf of our customers, manages virtual data rooms and performs XBRL and related services. Clients are provided with EDGAR filing services, XBRL compliance services and translation, editing, interpreting, proof-reading and multilingual typesetting services, among others. Our software-as-a-service solutions (“SaaS”) include the Venue Virtual Data Room, the FundSuiteArc software platform, ActiveDisclosure and data and analytics, among others. Substantially all of the Company’s revenue is derived from contracts with an initial expected duration of one year or less. Generally, customer payment is due within ten days upon invoicing. Revenue is recognized upon transfer of control of promised services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The Company’s arrangements with customers often include promises to transfer multiple services or products to a customer. Determining whether services and products are considered distinct performance obligations that should be accounted for separately requires significant judgement. Certain customer arrangements have multiple performance obligations as certain promises are both capable of being distinct and are distinct within the context of the contract. Other customer arrangements have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts, and therefore are not distinct. Revenue for the Company’s services and products is recognized either over time or at a point in time, as outlined below. Over time The Company recognizes revenue for certain services over time. • The Company’s SaaS solutions, including the Venue Virtual Data Room, the FundSuiteArc software platform, ActiveDisclosure, data and analytics and others, are generally provided on a subscription basis and allow customers access to use the products over the contract period. As a result, revenue for SaaS solutions are recognized ratably over time as the customer receives the benefit throughout the contract period. The timing of invoicing varies, however the customer may be invoiced before the end of the contract period, resulting in a deferred revenue balance. • Revenue for warehousing services are recognized ratably over time as the customer receives the benefit throughout the storage period. Point in time All remaining revenue arrangements are generally recognized at a point in time and are primarily invoiced upon completion of all services or upon shipment to the customer. • Certain of these arrangements include multiple performance obligations and revenue is recognized upon completion of each performance obligation, such as when a document is filed with a regulatory agency and upon completion of printing the related document. For arrangements with multiple performance obligations, the transaction price is allocated to the separate performance obligations. The Company provides customer specific solutions and as such, observable standalone selling price is rarely available. Standalone selling price is more frequently determined using an estimate of the standalone selling price of each distinct service or product, taking into consideration historical selling price by customer for each distinct service or product. These estimates may vary from the final amounts invoiced to the customer and are adjusted upon completion of all performance obligations. Customers may be invoiced subsequent to the recognition of revenue for completed performance obligations , resulting in contract asset balances. • Revenue for arrangements which include assisting customers in completing regulatory filings for transactions, such as mergers and acquisitions or other public capital market transactions, is recognized upon completion of all promises, including the services performed and printing of the related document, if applicable. • Revenue for arrangements without a regulatory filing generally have a single performance obligation, as the services and products provided are not distinct within the context of the contract, and are recognized upon completion of the services performed or upon completion of printing of the related product . • Warehousing, fulfillment services and shipping and handling are each separate performance obligations. As a result, when the Company provides warehousing and future fulfillment services, revenue for the composition services performed and printing of the product is recognized upon completion of the performance obligation(s), as control of the inventory has transferred to the customer and the inventory is being stored at the customer’s request. Because substantially all of the Company’s products are customized, product returns are not significant; however, the Company accrues for the estimated amount of customer credits at the time of sale. The Company records deferred revenue when amounts are invoiced but the revenue recognition criteria are not yet met. Such revenue is recognized when all criteria are subsequently met. Certain revenues earned by the Company require significant judgment to determine if revenue should be recorded gross, as a principal, or net of related costs, as an agent. Billings for shipping and handling costs as well as certain postage costs, and out-of-pocket expenses are recorded gross. Revenue is not recognized for customer-supplied postage. The Company’s printing operations process paper that may be supplied directly by customers or may be purchased by the Company from third parties and sold to customers. Revenue is not recognized for customer-supplied paper, however revenues for Company-supplied paper are recognized on a gross basis. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to authorities. Adoption of ASU 2014-09 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. On January 1, 2018, the Company adopted the standard and all related amendments, using the modified retrospective approach applied to contracts that were not completed as of January 1, 2018. The Company recognized the cumulative effect of applying the standard as an opening transition adjustment to retained earnings. The comparative periods have not been restated and continue to be reported under the accounting standards in effect for those periods (“Previous Revenue Standard”). As a result of the adoption of ASU 2014-09, revenue recognition has been accelerated for certain arrangements with multiple performance obligations as revenue is now recognized upon the completion of each performance obligation rather than upon completion of all services and shipment of the related document, if applicable. Revenue has also been accelerated for certain inventory which has been invoiced but not yet shipped at the customer’s request. Additionally, certain revenues related to virtual data room services have been deferred to be recognized over the term of the contract. As substantially all of the Company’s revenue is derived from contracts with an initial expected duration of one year or less, the Company has applied the practical expedient for performance obligations related to contracts with an initial duration of less than one year and is therefore not required to disclose information regarding remaining performance obligations at the end of the reporting period. The Company has also elected the practical expedient to recognize costs to obtain the contract, primarily commissions, as incurred. The cumulative effect of the changes made to the Company’s consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09 were as follows: Balance at December 31, 2017 Adoption of ASU 2014-09 Balance at January 1, 2018 Assets Receivables, less allowances for doubtful accounts $ 165.2 $ 8.9 $ 174.1 Inventories 23.3 (10.6 ) 12.7 Deferred income taxes 22.2 (0.5 ) 21.7 Total assets 893.5 (2.2 ) 891.3 Liabilities Accrued liabilities 119.2 (3.1 ) 116.1 Equity Retained earnings 8.9 0.9 9.8 Total liabilities and equity $ 893.5 $ (2.2 ) $ 891.3 The impact of the adoption of ASU 2014-09 on the Company’s condensed consolidated statement of operations and condensed consolidated balance sheet was as follows: Three Months Ended March 31, 2018 Previous Revenue Standard Adoption of ASU 2014-09 As Reported Services net sales $ 156.9 $ 2.6 $ 159.5 Products net sales 96.7 (1.0 ) 95.7 Total net sales 253.6 1.6 255.2 Services cost of sales (exclusive of depreciation and amortization) 85.5 0.4 85.9 Products costs of sales (exclusive of depreciation and amortization) 74.1 (1.4 ) 72.7 Total cost of sales 159.6 (1.0 ) 158.6 Selling, general and administrative expenses (exclusive of depreciation and amortization) 65.8 0.3 66.1 Income tax expense 2.8 0.7 3.5 Net earnings $ 6.1 $ 1.6 $ 7.7 Earnings per share Basic 0.18 0.05 0.23 Diluted 0.18 0.05 0.23 March 31, 2018 Previous Revenue Standard Adoption of ASU 2014-09 As Reported Assets Receivables, less allowances for doubtful accounts $ 228.3 $ 10.7 $ 239.0 Inventories 27.8 (9.3 ) 18.5 Deferred income taxes 21.5 (0.5 ) 21.0 Total assets 914.3 0.9 915.2 Liabilities Accrued liabilities 93.0 (1.5 ) 91.5 Other noncurrent liabilities 22.9 (0.1 ) 22.8 Equity Retained earnings 15.0 2.5 17.5 Total liabilities and equity $ 914.3 $ 0.9 $ 915.2 Disaggregation of revenue The following table disaggregates revenue by reporting unit and timing of revenue recognition: Three Months Ended March 31, 2018 Point in time Over time Total U.S. Capital Markets $ 93.5 $ 24.0 $ 117.5 Investment Markets 71.1 13.5 84.6 Language Solutions and other 11.0 — 11.0 Total U.S. 175.6 37.5 213.1 International 37.9 4.2 42.1 Total net sales $ 213.5 $ 41.7 $ 255.2 Contract Balances Contract assets represent revenue recognized for performance obligations completed before an unconditional right to payment exists, and therefore invoicing has not yet occurred. Contract assets were $11.2 million and $9.0 million at March 31, 2018 and January 1, 2018, respectively. Generally, the contract assets balance is impacted by the recognition of additional contract assets, offset by amounts invoiced to customers. For the three months ended March 31, 2018, final amounts invoiced to customers exceeded estimates of standalone selling price as of January 1, 2018 for the related arrangements by approximately $0.7 million. Contract liabilities consist of deferred revenue and progress billings which are included in accrued liabilities on the condensed consolidated balance sheet. Changes in contract liabilities were as follows: Balance at January 1, 2018 $ 14.2 Deferral of revenue 9.4 Revenue recognized (10.5 ) Balance at March 31, 2018 $ 13.1 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3. Inventories The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Raw materials and manufacturing supplies $ 4.2 $ 3.3 Work in process 14.3 13.7 Finished goods — 6.3 Total $ 18.5 $ 23.3 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note 4. Property, Plant and Equipment The components of the Company’s property, plant and equipment at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Land $ 10.0 $ 10.0 Buildings 36.3 36.1 Machinery and equipment 104.1 104.0 150.4 150.1 Less: Accumulated depreciation (117.3 ) (115.4 ) Total $ 33.1 $ 34.7 During |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 5. Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill by segment for the three months ended March 31, 2018 were as follows: U.S. International Total Net book value as of December 31, 2017 $ 429.2 $ 18.2 $ 447.4 Foreign exchange and other adjustments — (0.1 ) (0.1 ) Net book value as of March 31, 2018 $ 429.2 $ 18.1 $ 447.3 The components of other intangible assets at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Amount Amortization Value Amount Amortization Value Customer relationships $ 140.9 $ (104.4 ) $ 36.5 $ 140.6 $ (100.7 ) $ 39.9 Trade names 2.9 (2.9 ) — 2.9 (2.9 ) — Total other intangible assets $ 143.8 $ (107.3 ) $ 36.5 $ 143.5 $ (103.6 ) $ 39.9 Amortization expense for other intangible assets was $3.4 million and $3.6 million for the three months ended March 31, 2018 and 2017, respectively. The following table outlines the estimated annual amortization expense related to other intangible assets as of March 31, 2018: For the year ending December 31, Amount 2018 $ 13.8 2019 13.8 2020 12.3 2021 — 2022 — 2023 and thereafter — Total $ 39.9 |
Restructuring, Impairment and O
Restructuring, Impairment and Other Charges | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring, Impairment and Other Charges | Note 6. Restructuring, Impairment and Other Charges Restructuring, Impairment and Other Charges recognized in Results of Operations For the three months ended March 31, 2018 and 2017, the Company recorded the following net restructuring, impairment and other charges: Three Months Ended Employee Other Restructuring Total Restructuring Other March 31, 2018 Terminations Charges Charges Charges Total U.S. $ 0.1 $ 0.5 $ 0.6 $ 0.1 $ 0.7 International (0.1 ) — (0.1 ) — (0.1 ) Corporate 0.1 — 0.1 — 0.1 Total $ 0.1 $ 0.5 $ 0.6 $ 0.1 $ 0.7 Three Months Ended Employee Other Restructuring Total Restructuring Other March 31, 2017 Terminations Charges Charges Charges Total U.S. $ 2.0 $ 0.4 $ 2.4 $ 0.1 $ 2.5 International 0.7 — 0.7 — 0.7 Corporate 0.6 — 0.6 — 0.6 Total $ 3.3 $ 0.4 $ 3.7 $ 0.1 $ 3.8 Restructuring and Impairment Charges For the three months ended March 31, 2018, the Company recorded net restructuring charges of $0.5 million for lease termination and other restructuring costs, $0.1 For the three months ended March 31, 2017, the Company recorded net restructuring charges of $3.3 million for employee termination costs for 87 employees. These charges primarily related to the reorganization of certain operations. Additionally, the Company incurred $0.4 million of lease termination and other restructuring charges and $0.1 million of 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, 2017 and March 31, 2018, and changes during the three months ended March 31, 2018, were as follows: December 31, 2017 Restructuring Charges Reversals Cash Paid March 31, 2018 Employee terminations $ 1.3 $ 0.3 $ (0.2 ) $ (0.6 ) $ 0.8 Lease terminations and other 2.1 0.5 — (0.4 ) 2.2 Total $ 3.4 $ 0.8 $ (0.2 ) $ (1.0 ) $ 3.0 The current portion of restructuring reserves of $2.2 million at March 31, 2018 was included in accrued liabilities, while the long-term portion of $0.8 million, primarily related to lease termination costs, was included in other noncurrent liabilities at March 31, 2018. The Company anticipates that payments associated with the employee terminations reflected in the above table will be substantially completed by September 30, 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 2021. 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 | 3 Months Ended |
Mar. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 7. Retirement Plans The components of the estimated net pension plan income for Donnelley Financial’s pension plans for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended March 31, 2018 2017 Pension expense (income) Interest cost $ 2.6 $ 2.7 Expected return on assets (4.0 ) (4.0 ) Amortization, net 0.6 0.5 Net pension income $ (0.8 ) $ (0.8 ) During the three months ended March 31, 2018, the Company adopted 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 are 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 was adopted on a retrospective basis. The adoption of ASU 2017-07 resulted in the presentation of net pension income within investment and other income in the condensed consolidated statement of operations instead of selling, general and administrative expenses. Prior period net pension income was also reclassified. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8. Income Taxes The Company’s provision for income taxes for the three months ended March 31, 2018 and 2017 is based on the estimated annual effective tax rate, plus discrete items. The following table presents the provision for income taxes and the effective tax rates for the three months ended March 31, 2018 and 2017: 2018 2017 $ Change % Change (in millions, except percentages) Earnings before income taxes $ 11.2 $ 16.1 $ (4.9 ) (30.4 %) Income tax expense 3.5 6.8 (3.3 ) (48.5 %) Effective income tax rate 31.3 % 42.2 % Cash payments for income taxes for U.S. states and foreign jurisdictions were $2.2 million and $1.3 million for the three months ended March 31, 2108 and 2017, respectively. The decrease in the effective income tax rate to 31.3% for the three months ended March 31, 2018 compared to 42.2% for the three months ended March 31, 2017 was primarily due to changes in U.S. corporate tax law pursuant to the enactment of the U.S. Federal Tax Cut and Jobs Act (“the Tax Act”) on December 22, 2017. The Tax Act, effective January 1, 2018, reduced the corporate income tax rate from a maximum 35% to a flat 21% rate, broadened the tax base and created a territorial tax system, while subjecting U.S. shareholders to tax on certain earnings of foreign subsidiaries considered to be Global Intangible Low-Taxed Income Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company made reasonable estimates of the tax effects and recorded provisional amounts in its consolidated financial statements for the year ended December 31, 2017. Staff Accounting Bulletin No. 118 (“SAB 118”) provided a measurement period of one year from the Tax Act enactment date for companies to complete their accounting for the enactment-date effects of the Tax Act that were considered provisional estimates at December 31, 2017. The following provides an update on the effects of the Tax Act that at December 31, 2017 were either incomplete, but the Company was able to determine a reasonable estimate and therefore recorded provisional amounts in its December 31, 2017 consolidated financial statements, or were incomplete and the Company was unable to determine a reasonable estimate, and therefore no provisional amounts were recorded in the December 31, 2017 consolidated financial statements. Deemed Repatriation Transition Tax Due to the transition to a territorial tax system under the Tax Act, the Company was deemed to repatriate and pay a mandatory tax on its foreign subsidiaries’ untaxed accumulated earnings as of December 31, 2017 (“the transition tax”). The Company was able to reasonably estimate the transition tax and recorded an initial provisional liability of $14.2 million along with a corresponding adjustment of $14.2 million to income tax expense in its consolidated financial statements for the year ended December 31, 2017. Upon further analysis of the deemed repatriation tax impact in the various U.S. states in which the Company files income tax returns, the Company recognized a measurement period adjustment of $0.4 million to decrease the transition tax liability with a corresponding $0.4 million state income tax benefit in its condensed consolidated financial statements for the three months ended March 31, 2018. The Company continues to gather additional information to more precisely compute the amount of its transition tax obligation and the accounting for this item is not yet complete due to potential refinement of the Company’s foreign untaxed accumulated earnings and foreign taxes paid, as well as guidance and regulations that may be issued by the Department of the U.S. Treasury Internal Revenue Service (“IRS”) and/or U.S state government taxing authorities and actions the Company may take as a result. The Company expects to finalize its accounting within the prescribed measurement period. Re-measurement of Deferred Tax Assets and Liabilities As a result of the reduction in the U.S. corporate income tax rate from 35% to 21%, the Company was required to re-measure its U.S. net deferred tax assets at December 31, 2017. The Company estimated a reduction in the value of its net deferred tax asset of approximately $8.2 million, which was recorded as additional deferred income tax expense in the Company’s consolidated statement of operations for the year ended December 31, 2017. No incremental measurement adjustments were recognized during the three months ended March 31, 2018; however, the Company continues to gather additional information in order to finalize the accounting for this item and expects to finalize the accounting within the prescribed measurement period. GILTI Accounting Policy Election Along with the change to a territorial tax system, the Tax Act created the GILTI provision which taxes certain foreign income in excess of a deemed return on tangible assets of U.S. multi-nationals’ foreign subsidiary corporations. The Company may have GILTI in a given year, and the determination of whether the Company is subject to the GILTI provision will be an annual analysis of several factors under the provision, including the amount of foreign income generated by the Company’s foreign subsidiaries and whether that income is considered GILTI in such year. In addition to the immediate taxation of GILTI, the Tax Act allows a U.S. corporation a deduction for 37.5% of foreign-derived intangible income (“FDII”) and a 50% deduction of GILTI. Companies may make an accounting policy election to either account for deferred taxes related to GILTI or to treat taxes on GILTI as period costs. The Company has elected to recognize resulting tax on GILTI as a period expense in the period the tax is incurred and expects to incur such tax for the year ended December 31, 2018. Accordingly, the Company has included an estimate of approximately $0.4 million of tax on net GILTI (net of deduction for FDII) in its 2018 estimated annual effective tax rate. The Company has made sufficient progress with its GILTI and FDII provision calculations; however, Indefinite Reinvestment Assertion Earnings generated by a foreign subsidiary are presumed to ultimately be transferred to the parent company. Therefore, the establishment of deferred taxes may be required with respect to the excess of the investment value for financial reporting over the tax basis of investments in those foreign subsidiaries (also referred to as book-over-tax outside basis differences). A company may overcome this presumption and forgo recording a deferred tax liability in its financial statements if it can assert that management has the intent and ability to indefinitely reinvest the earnings of its foreign subsidiaries. Prior to the year ended December 31, 2017, the Company did not provide deferred U.S., foreign or local income taxes on the book-over-tax outside basis differences of its foreign subsidiaries because such excess was considered to be indefinitely reinvested in the local country businesses. As a result of the transition tax that the Company has incurred pursuant to the Tax Act, the Company now has the ability to repatriate to the U.S. parent the foreign cash associated with the foreign earnings subject to the transition tax, as these earnings have already been subject to U.S. federal taxes. The Company is currently analyzing its global working capital and cash requirements in order to determine the amount of excess cash at its foreign subsidiaries that can be repatriated to the U.S., but has not yet determined whether the Company plans to change its assertion of indefinite reinvestment on all foreign earnings and other outside basis differences. As the Company has not completed its analysis, the Company has not recorded any deferred taxes attributable to the book-over-tax outside basis differences in its foreign subsidiaries as of March 31, 2018. The Company will record the tax effects of any change in the Company’s assertion in the period that it completes its analysis; however, the Company does not anticipate incurring material foreign and/or local country taxes upon repatriation of foreign subsidiary earnings to the U.S. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Share Based Compensation [Abstract] | |
Share-Based Compensation | Note 9. Share Based Compensation Share-based compensation expense For all share-based awards granted to employees and directors following the Separation, including stock options, restricted stock units (“RSUs”), performance based restricted stock and performance share units (“PSUs”), the Company recognizes compensation expense based on estimated grant date fair values based on certain assumptions as of the grant date. The Company estimates the number of awards expected to vest based, in part, on historical forfeiture rates and also based on management’s expectations of employee turnover within the specific employee groups receiving each type of award. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods, if actual forfeitures differ from those estimates. The Company recognizes compensation costs for RSUs expected to vest, on a straight-line basis over the requisite service period of the award, which is generally the vesting term of three years. Compensation expense for performance based restricted stock awards granted in 2016, which vest on a graded basis, is recognized utilizing a graded vesting schedule. Compensation expense for performance based restricted stock awards granted in 2017, which cliff vest, is recognized on a straight-line basis over the performance period of the award. The Company recognizes compensation costs for PSUs, which cliff vest, on a straight-line basis over the performance period of the award. Compensation expense for stock options is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of four years. The stock options, RSUs, performance based restricted stock and PSUs granted during 2017 and 2018 are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death or permanent disability of the grantee or a change in control of the Company. In addition, upon a change in control of the Company, PSUs will be measured for attainment of the performance metrics as of the end of the Company’s fiscal quarter ending immediately prior to the fiscal quarter in which the change in control took place and the performance based restricted stock will be measured at 100% attainment of the target performance metrics. Both awards will remain subject to time based vesting until the end of the vesting period; provided that the award will vest in full if, within three months prior to or two years after the date of the change in control of the Company, the grantee’s employment is terminated without cause by the Company or for good reason by the grantee. Total compensation expense related to all share based compensation plans was $1.8 million and $1.1 million for the three months ended March 31, 2018 and 2017, respectively. Stock Options The Company granted 324,500 options, with a weighted-average grant date fair market value of $5.83, during the three months ended March 31, 2018. The fair market value of each stock option award was estimated using the Black-Scholes-Merton option pricing model and the Company used the following methods to determine its underlying assumptions: • Expected volatility was estimated based on a weighted-average of historical volatilities for the Company’s peer group • The risk-free interest rate was based on the U.S Treasury yield curve in effect on the date of grant • The expected term was based on the simplified method of using the mid-point between the vesting term and the original contractual term • The expected dividend yield was based on the Company’s current dividend rate The assumptions used to determine the fair market value of the stock options granted during the three months ended March 31, 2018 were as follows: 2018 Expected volatility 27.75 % Risk-free interest rate 2.71 % Expected life (years) 6.25 Expected dividend yield 0.00 % Stock outstanding Weighted Average Weighted Average Remaining Contractual Aggregate Intrinsic Shares Under Option Exercise Term Value (thousands) Price (years) (millions) Outstanding at December 31, 2017 459 $ 22.13 5.1 $ 0.8 Granted 324 17.91 9.9 Exercised (104 ) 11.95 Outstanding at March 31, 2018 679 21.67 7.9 0.0 Vested and expected to vest at March 31, 2018 649 $ 21.77 7.8 0.0 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on March 31, 2018 and December 31, 2017, respectively, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on March 31, 2018 and December 31, 2017. This amount will change in future periods based on the fair market value of the Company’s stock and the number of options outstanding. Total intrinsic value of options exercised was $1.0 million for the three months ended March 31, 2018 and was de minimis for the three months ended March 31, 2017. There were no excess tax benefits on stock option exercises for the three months ended March 31, 2018 and 2017. Compensation was $0.1 million and de minimis for the three months ended March $2.8 million of total Restricted Stock Units Nonvested Weighted Shares Average Grant (Thousands) Date Fair Value Nonvested at December 31, 2017 598 $ 23.48 Granted 339 17.65 Vested (142 ) Forfeited (9 ) 22.35 Nonvested at March 31, 2018 786 $ 20.02 Compensation expense related to RSUs was $0.9 million and $0.6 million for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, there was $10.2 million of unrecognized share-based compensation expense related to 0.8 million restricted stock unit awards, with a weighted-average grant date fair value of $20.02, that are expected to vest over a weighted-average period of 2.4 years. The fair value of these awards was determined based on the Company’s stock price on the grant date, as the Company currently does not anticipate paying any cash dividends in the foreseeable future. Restricted Stock There were no restricted stock awards granted during the three months ended March 31, 2018. Compensation expense for the restricted stock awards is currently being recognized based on 100% attainment of the targeted performance metrics for the restricted stock awards granted in 2017 and is being recognized based on 100% actual achievement of the performance metrics for the restricted stock awards granted in 2016. The total potential payout for awards granted during 2017 range from zero to 129,400 shares, should certain performance targets be achieved. The maximum payout of 156,159 shares was achieved as of December 31, 2017 for the restricted stock awards granted during 2016. Compensation expense for restricted stock awards was $0.6 million and $0.5 million for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, there was $2.7 million of unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted average period of 1.7 years. Performance Share Units Nonvested performance share units as of December 31, 2017 and March 31, 2018, and changes during the three months ended March 31, 2018, were as follows: Weighted Shares Average Grant (Thousands) Date Fair Value Nonvested at December 31, 2017 37 $ 22.41 Granted 232 17.65 Nonvested at March 31, 2018 269 $ 18.31 During the three months ended March 31, 2018, 232,300 performance share units were granted to certain executive officers and senior management, payable upon the achievement of certain established performance targets. The performance period for the shares awarded is January 1, 2018 through December 31, 2020. Distributions under these awards are payable at the end of the performance period in common stock or cash, at the Company’s discretion. The total potential payout for awards granted during the three months ended March 31, 2018 range from zero to 348,450 shares, should certain performance targets be achieved. The fair value of these awards was determined based on the Company’s stock price on the grant date. Compensation expense for the PSUs granted in 2018 and 2017 is currently being recognized based on 100% attainment of the targeted performance metrics or 232,300 and 37,100 shares, for each respective period. Compensation expense related to PSUs was $0.2 million for the three months ended March 31, 2018 and was de minimis for the three months ended March 31, 2017. As of March 31, 2018, there was $4.4 million of unrecognized compensation expense related to PSUs, which is expected to be recognized over a weighted average period of 2.8 years. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Equity | Note 10. Equity The Company’s equity as of December 31, 2017 and March 31, 2018, and changes during the three months ended March 31, 2018, were as follows: Total Equity Balance at December 31, 2017 $ 149.4 Net earnings 7.7 Other comprehensive income 1.2 Adoption of ASU 2014-09 0.9 Share-based compensation 1.8 Issuance of share-based awards, net of withholdings and other 0.6 Balance at March 31, 2018 $ 161.6 The Company’s equity as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017, were as follows: Total Equity Balance at December 31, 2016 $ 111.1 Net earnings 9.3 Other comprehensive income 0.5 Separation-related adjustments 3.1 Share-based compensation 1.1 Issuance of share-based awards, net of withholdings and other (0.6 ) Balance at March 31, 2017 $ 124.5 Separation-related adjustments primarily relate to the settlement of balances due to or from RRD for activity prior to the Separation. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 11. 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. The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive share-based awards for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended March 31, 2018 2017 Net earnings per share: Basic $ 0.23 $ 0.29 Diluted $ 0.23 $ 0.28 Numerator: Net earnings $ 7.7 $ 9.3 Denominator: Weighted average number of common shares outstanding 33.7 32.6 Dilutive awards 0.2 0.2 Diluted weighted average number of common shares outstanding 33.9 32.8 Weighted average number of anti-dilutive share-based awards: Restricted stock units 0.1 0.1 Stock options 0.5 0.1 Total 0.6 0.2 |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Comprehensive Income | Note 12. Comprehensive Income The components of other comprehensive income and income tax expense allocated to each component for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended March 31, 2018 Before Tax Income Tax Net of Tax Amount Expense Amount Translation adjustments $ 0.7 $ — $ 0.7 Adjustment for net periodic pension plan and other postretirement benefits plan cost 0.6 0.1 0.5 Other comprehensive income $ 1.3 $ 0.1 $ 1.2 Three Months Ended March 31, 2017 Before Tax Income Tax Net of Tax Amount Expense Amount Translation adjustments $ 0.1 $ — $ 0.1 Adjustment for net periodic pension plan and other postretirement benefits plan cost 0.5 0.1 0.4 Other comprehensive income $ 0.6 $ 0.1 $ 0.5 Accumulated other comprehensive loss by component as of December 31, 2017 and March 31, 2018 were as follows: Pension and Other Postretirement Benefits Plan Cost Translation Adjustments Total Balance at December 31, 2017 $ (52.9 ) $ (11.7 ) $ (64.6 ) Other comprehensive income before reclassifications — 0.7 0.7 Amounts reclassified from accumulated other comprehensive loss 0.5 — 0.5 Net change in accumulated other comprehensive loss 0.5 0.7 1.2 Balance at March 31, 2018 $ (52.4 ) $ (11.0 ) $ (63.4 ) Accumulated other comprehensive loss by component as of December 31, 2016 and March 31, 2017 as follows: Pension and Other Postretirement Benefits Plan Cost Translation Adjustments Total Balance at December 31, 2016 $ (52.2 ) $ (16.1 ) $ (68.3 ) Other comprehensive income before reclassifications — 0.1 0.1 Amounts reclassified from accumulated other comprehensive loss 0.4 — 0.4 Net change in accumulated other comprehensive loss 0.4 0.1 0.5 Balance at March 31, 2017 $ (51.8 ) $ (16.0 ) $ (67.8 ) Reclassifications from accumulated other comprehensive loss for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended Classification in the March 31, Condensed Consolidated 2018 2017 Statements of Operations Amortization of pension and other postretirement benefits plan cost: Net actuarial income $ 0.6 $ 0.5 (a) Reclassifications before tax 0.6 0.5 Income tax expense 0.1 0.1 Reclassifications, net of tax $ 0.5 $ 0.4 (a) These accumulated other comprehensive loss components are included in the calculation of net periodic pension and other postretirement benefits plan income recognized in investment and other income in the unaudited condensed consolidated statements of operations (see Note 7, Retirement Plans |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Note 13. 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 general and administrative activities and associated expenses including, in part, executive, legal, finance, communications and certain facility costs. In addition, certain costs and earnings of employee benefit plans, such as pension and other postretirement benefit plan expense (income) and allocated costs for share-based compensation, are included in Corporate and not allocated to the operating segments. Information by Segment The Company has disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Company’s chief operating decision-maker and is most consistent with the presentation of profitability reported within the condensed consolidated financial statements. Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Three Months Ended March 31, 2018 U.S. $ 214.6 $ (1.5 ) $ 213.1 $ 26.4 $ 714.8 $ 8.9 $ 6.1 International 42.7 (0.6 ) 42.1 2.5 95.9 1.4 0.1 Total operating segments 257.3 (2.1 ) 255.2 28.9 810.7 10.3 6.2 Corporate — — — (9.5 ) 104.5 0.1 0.2 Total operations $ 257.3 $ (2.1 ) $ 255.2 $ 19.4 $ 915.2 $ 10.4 $ 6.4 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Three Months Ended March 31, 2017 U.S. $ 232.9 $ (2.5 ) $ 230.4 $ 37.0 $ 740.2 $ 8.8 $ 3.9 International 37.3 (0.4 ) 36.9 0.2 94.6 1.4 0.4 Total operating segments 270.2 (2.9 ) 267.3 37.2 834.8 10.2 4.3 Corporate — — — (10.8 ) 189.8 — — Total operations $ 270.2 $ (2.9 ) $ 267.3 $ 26.4 $ 1,024.6 $ 10.2 $ 4.3 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Note 14. Debt The Company’s debt as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, 2018 2017 8.25% senior notes due October 15, 2024 $ 300.0 $ 300.0 Term Loan Credit Facility 168.7 168.6 Borrowings under the Revolving Facility 20.0 — Unamortized debt issuance costs (9.9 ) (10.3 ) Total debt 478.8 458.3 Less: current portion — — Long-term debt $ 478.8 $ 458.3 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 $319.0 million and $321.5 million at March 31, 2018 and December 31, 2017, respectively. The Company has a Credit Agreement (“the Credit Agreement”) which provides for a $350.0 million senior secured term loan B facility (the “Term Loan Credit Facility”) and a $300.0 million senior secured revolving credit facility (the “Revolving Facility”, and, together with the Term Loan Credit Facility, the “Credit Facilities”). The Credit Agreement contains a number of covenants, including a minimum Interest Coverage Ratio and a maximum Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $15.0 million in the aggregate. As of March 31, 2018, there was $20.0 million in outstanding borrowings under the Revolving Facility. The weighted average interest rate on borrowings under the Revolving Facility was 4.8% and 4.2% for the three months ended March 31, 2018 and 2017, respectively. Interest paid was $2.2 million and $3.8 million for the three months ended March 31, 2018 and 2017, respectively. The Company’s 8.25% senior unsecured notes due October 15, 2024 (the “Notes”) were issued pursuant to an indenture where certain wholly-owned domestic subsidiaries of the Company guarantee the Notes (the “Guarantors”). The Notes are jointly and severally guaranteed, on an unsecured basis, by the Guarantors, which are comprised of each of the Company’s existing and future direct and indirect wholly-owned U.S. subsidiaries that guarantee the Company’s obligations under the Credit Facilities. The Notes are not guaranteed by the Company’s foreign subsidiaries or unrestricted subsidiaries. The Notes and the related guarantees will be the Company and the Guarantors’, respective, senior unsecured obligations and will rank equally in right of payment to all present and future senior debt, including the obligations under the Company’s Credit Facilities, senior in right of payment to all present and future subordinated debt, and effectively subordinated in right of payment to any of the Company and the Guarantors’ secured debt, to the extent of the value of the assets securing such debt. The indenture governing the Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and (9) designations of unrestricted subsidiaries. Each of these covenants is subject to important exceptions and qualifications. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15. 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 results of operations, financial position or cash flows. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 16. 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 no longer qualified as a related party of the Company and the amounts disclosed related to LSC are only presented for the three months ended March 31, 2017. 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 4, 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 only presented for the three months ended March 31, 2017. 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 terms of the arrangements with RRD do not exceed 36 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize SaaS solutions and services that the Company provides to all of its clients. 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. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Pronouncements | Note 17. New Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the FASB issued 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 deferred the effective date of ASU 2014-09 to January 1, 2018. The Company adopted the standard on January 1, 2018 using the modified retrospective approach. The Company recognized the cumulative effect of applying the standard as an opening transition adjustment to retained earnings. The comparative periods have not been restated and continue to be reported under the accounting standards in effect for those periods. Refer to Note 2, Revenue In March 2017, the FASB issued ASU 2017-07, which the Company adopted retrospectively in the first quarter of 2018. Refer to Note 7, Retirement Plans , for further information. The following standards were also effective for and adopted by the Company in 2018. The adoption of these standards did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows: • Accounting Standards Update No. 2017-09 “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting” • Accounting Standards Update No. 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business” • Accounting Standards Update No. 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash” • Accounting Standards Update No. 2016-15 “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments” • Accounting Standards Update No. 2016-01 “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” Recently Issued Accounting Pronouncements In February 2018, the FASB issued Accounting Standards Update No. 2018-02 “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Income Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”), which provides entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the Tax Act to retained earnings. ASU 2018-02 may be applied either in the period of adoption or retrospectively to each period in which the effect of the Tax Act is recognized. ASU 2018-02 is effective in the first quarter of 2019. Early adoption is permitted. The Company is evaluating the impact of ASU 2018-02. 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. |
Guarantor Financial Information
Guarantor Financial Information | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Guarantor Financial Information | Note 18. Guarantor Financial Information The Guarantors of the Notes, Donnelley Financial, LLC and DFS International Holding, Inc., entered into an agreement pursuant to which each agreed to guarantee the Company’s obligations under the Notes. All guarantees are full and unconditional and joint and several. The Guarantors are 100% directly owned subsidiaries of the Company. Refer to Note 14, Debt The guarantee of the Notes by a subsidiary guarantor will be automatically released under certain situations, including upon the sale or disposition of such subsidiary guarantor to a person that is not Donnelley Financial or a subsidiary guarantor of the notes, the liquidation or dissolution of such subsidiary guarantor, and if such subsidiary guarantor is released from its guarantee obligations under the Company’s Credit Facilities. The following tables set forth condensed consolidating statements of income for the three months ended March 31, 2018 and 2017, condensed consolidating statements of financial position as of March 31, 2018 and December 31, 2017, and condensed consolidating statements of cash flows for the three months ended March 31, 2018 and 2017. The principal consolidating adjustments are to eliminate the investment in subsidiaries and intercompany balances and transactions. For purposes of the tables below, the Company is referred to as “Parent” and the Guarantors are referred to as “Guarantor Subsidiaries.” Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 2018 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 128.7 $ 32.1 $ (1.3 ) $ 159.5 Products net sales — 85.9 10.6 (0.8 ) 95.7 Total net sales — 214.6 42.7 (2.1 ) 255.2 Services cost of sales (exclusive of depreciation and amortization) — 67.5 19.6 (1.2 ) 85.9 Products cost of sales (exclusive of depreciation and amortization) — 65.1 8.5 (0.9 ) 72.7 Total cost of sales — 132.6 28.1 (2.1 ) 158.6 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 55.3 10.8 — 66.1 Restructuring, impairment and other charges-net — 0.8 (0.1 ) — 0.7 Depreciation and amortization — 9.0 1.4 — 10.4 Income from operations — 16.9 2.5 — 19.4 Interest expense (income)-net 9.2 (0.2 ) — — 9.0 Intercompany interest (income) expense-net (6.6 ) 6.6 — — — Investment and other income-net — (0.8 ) — — (0.8 ) Earnings (loss) before income taxes and equity in net income of subsidiaries (2.6 ) 11.3 2.5 — 11.2 Income tax (benefit) expense (0.8 ) 3.5 0.8 — 3.5 Earnings (loss) before equity in net income of subsidiaries (1.8 ) 7.8 1.7 — 7.7 Equity in net income of subsidiaries 9.5 1.7 — (11.2 ) — Net earnings $ 7.7 $ 9.5 $ 1.7 $ (11.2 ) $ 7.7 Comprehensive income $ 8.9 $ 10.8 $ 2.4 $ (13.2 ) $ 8.9 Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 128.6 $ 27.0 $ (1.6 ) $ 154.0 Products net sales — 104.3 10.3 (1.3 ) 113.3 Total net sales — 232.9 37.3 (2.9 ) 267.3 Services cost of sales (exclusive of depreciation and amortization) — 61.3 17.9 (1.5 ) 77.7 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* — 9.4 0.5 — 9.9 Products cost of sales (exclusive of depreciation and amortization) — 57.0 7.4 (1.4 ) 63.0 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 18.7 0.1 — 18.8 Total cost of sales — 146.4 25.9 (2.9 ) 169.4 Selling, general and administrative expenses (exclusive of depreciation and amortization)* — 48.4 9.1 — 57.5 Restructuring, impairment and other charges-net — 3.1 0.7 — 3.8 Depreciation and amortization — 8.8 1.4 — 10.2 Income from operations — 26.2 0.2 — 26.4 Interest expense (income)-net 11.3 (0.2 ) — — 11.1 Investment and other income-net — (0.8 ) — — (0.8 ) Earnings (loss) before income taxes and equity in net income of subsidiaries (11.3 ) 27.2 0.2 — 16.1 Income tax (benefit) expense (4.7 ) 11.4 0.1 — 6.8 Earnings (loss) before equity in net income of subsidiaries (6.6 ) 15.8 0.1 — 9.3 Equity in net income of subsidiaries 15.9 0.1 — (16.0 ) — Net earnings (loss) $ 9.3 $ 15.9 $ 0.1 $ (16.0 ) $ 9.3 Comprehensive income (loss) $ 9.8 $ 16.4 $ 0.2 $ (16.6 ) $ 9.8 *Beginning in the quarter ended June 30, 2017, LSC Communications, Inc. (“LSC”) no longer qualified as a related party, therefore the amounts disclosed related to LSC are only presented for the three months ended March 31, 2017. 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 only presented for the three months ended March 31, 2017. Condensed Consolidating Balance Sheet As of March 31, 2018 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 3.5 $ 8.6 $ — $ 12.1 Receivables, less allowances — 195.7 43.3 — 239.0 Intercompany receivables — 117.6 — (117.6 ) — Intercompany short-term note receivable-net — — 32.0 (32.0 ) — Inventories — 13.9 4.6 — 18.5 Prepaid expenses and other current assets 34.5 14.4 3.5 (24.2 ) 28.2 Total current assets 34.5 345.1 92.0 (173.8 ) 297.8 Property, plant and equipment-net — 29.9 3.2 — 33.1 Goodwill — 429.2 18.1 — 447.3 Other intangible assets-net — 29.6 6.9 — 36.5 Software-net — 41.4 0.4 — 41.8 Deferred income taxes 0.4 40.0 4.4 (23.8 ) 21.0 Intercompany long-term note receivable, net 376.0 — — (376.0 ) — Other noncurrent assets 3.2 29.7 4.8 — 37.7 Investments in consolidated subsidiaries 366.2 86.2 — (452.4 ) — Total assets $ 780.3 $ 1,031.1 $ 129.8 $ (1,026.0 ) $ 915.2 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ — $ 73.1 $ 14.6 $ — $ 87.7 Intercompany payables 107.9 — 9.7 (117.6 ) — Intercompany short-term note payable-net 32.0 — — (32.0 ) — Accrued liabilities — 99.8 15.9 (24.2 ) 91.5 Total current liabilities 139.9 172.9 40.2 (173.8 ) 179.2 Long-term debt 478.8 — — — 478.8 Intercompany long-term note payable, net — 376.0 — (376.0 ) — Deferred compensation liabilities — 21.8 — — 21.8 Pension and other postretirement benefits plan liabilities — 49.9 1.1 — 51.0 Other noncurrent liabilities — 44.3 2.3 (23.8 ) 22.8 Total liabilities 618.7 664.9 43.6 (573.6 ) 753.6 Total equity 161.6 366.2 86.2 (452.4 ) 161.6 Total liabilities and equity $ 780.3 $ 1,031.1 $ 129.8 $ (1,026.0 ) $ 915.2 Condensed Consolidating Balance Sheet As of December 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 8.3 $ 27.9 $ 15.8 $ — $ 52.0 Receivables, less allowances — 131.3 33.9 — 165.2 Intercompany receivables — 146.4 — (146.4 ) — Intercompany short-term note receivable-net — — 30.0 (30.0 ) — Inventories — 21.3 2.0 — 23.3 Prepaid expenses and other current assets 37.1 14.8 2.8 (25.1 ) 29.6 Total current assets 45.4 341.7 84.5 (201.5 ) 270.1 Property, plant and equipment-net — 31.2 3.5 — 34.7 Goodwill — 429.2 18.2 — 447.4 Other intangible assets-net — 32.4 7.5 — 39.9 Software-net — 40.6 0.5 — 41.1 Deferred income taxes — 40.5 3.4 (21.7 ) 22.2 Other noncurrent assets 3.4 30.0 4.7 — 38.1 Investments in consolidated subsidiaries 728.4 85.2 — (813.6 ) — Total assets $ 777.2 $ 1,030.8 $ 122.3 $ (1,036.8 ) $ 893.5 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ — $ 57.9 $ 9.9 $ — $ 67.8 Intercompany payable 139.5 — 6.9 (146.4 ) — Intercompany short-term note payable-net 30.0 — — (30.0 ) — Accrued liabilities — 127.6 16.7 (25.1 ) 119.2 Total current liabilities 169.5 185.5 33.5 (201.5 ) 187.0 Long-term debt 458.3 — — — 458.3 Deferred compensation liabilities — 22.8 — — 22.8 Pension and other postretirement benefits plan liabilities — 51.3 1.2 — 52.5 Other noncurrent liabilities — 42.8 2.4 (21.7 ) 23.5 Total liabilities 627.8 302.4 37.1 (223.2 ) 744.1 Total equity 149.4 728.4 85.2 (813.6 ) 149.4 Total liabilities and equity $ 777.2 $ 1,030.8 $ 122.3 $ (1,036.8 ) $ 893.5 Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2018 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash used in operating activities $ (30.7 ) $ (18.1 ) $ (4.8 ) $ — $ (53.6 ) INVESTING ACTIVITIES Capital expenditures — (6.3 ) (0.1 ) — (6.4 ) Intercompany note receivable, net — — (2.0 ) 2.0 — Net cash used in investing activities — (6.3 ) (2.1 ) 2.0 (6.4 ) FINANCING ACTIVITIES Revolving facility borrowings 88.0 — — — 88.0 Payments on revolving facility borrowings (68.0 ) — — — (68.0 ) Intercompany note payable, net 2.0 — — (2.0 ) — Proceeds from issuance of common stock 1.2 — — — 1.2 Treasury stock repurchases (0.8 ) — — — (0.8 ) Net cash provided by financing activities 22.4 — — (2.0 ) 20.4 Effect of exchange rate on cash and cash equivalents — — (0.3 ) — (0.3 ) Net decrease in cash and cash equivalents (8.3 ) (24.4 ) (7.2 ) — (39.9 ) Cash and cash equivalents at beginning of year 8.3 27.9 15.8 — 52.0 Cash and cash equivalents at end of period $ — $ 3.5 $ 8.6 $ — $ 12.1 Supplemental non-cash disclosure: Intercompany debt allocation $ (376.0 ) $ 376.0 $ — $ — $ — Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (27.3 ) $ 4.5 $ (0.6 ) $ (14.8 ) $ (38.2 ) INVESTING ACTIVITIES Capital expenditures — (3.9 ) (0.4 ) — (4.3 ) Purchase of investment — (3.4 ) — — (3.4 ) Other investing activities — 0.2 — — 0.2 Net cash used in investing activities — (7.1 ) (0.4 ) — (7.5 ) FINANCING ACTIVITIES Revolving facility borrowings 57.0 — — — 57.0 Payments on revolving facility borrowings (37.0 ) — — — (37.0 ) Debt issuance costs (1.5 ) — — — (1.5 ) Intercompany note payable (receivable) 5.7 — (5.7 ) — — Net transfers related to the Separation 3.1 — — — 3.1 Net cash provided by (used in) financing activities 27.3 — (5.7 ) — 21.6 Effect of exchange rate on cash and cash equivalents — — 0.2 — 0.2 Net decrease in cash and cash equivalents — (2.6 ) (6.5 ) (14.8 ) (23.9 ) Cash and cash equivalents at beginning of year — 21.8 16.8 (2.4 ) 36.2 Cash and cash equivalents at end of period $ — $ 19.2 $ 10.3 $ (17.2 ) $ 12.3 |
Overview and Basis of Present25
Overview and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The Company manages highly-customized data and materials, such as Exchange Act, Securities Act and Investment Company Act filings with the SEC on behalf of our customers, manages virtual data rooms and performs XBRL and related services. Clients are provided with EDGAR filing services, XBRL compliance services and translation, editing, interpreting, proof-reading and multilingual typesetting services, among others. Our software-as-a-service solutions (“SaaS”) include the Venue Virtual Data Room, the FundSuiteArc software platform, ActiveDisclosure and data and analytics, among others. Substantially all of the Company’s revenue is derived from contracts with an initial expected duration of one year or less. Generally, customer payment is due within ten days upon invoicing. Revenue is recognized upon transfer of control of promised services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The Company’s arrangements with customers often include promises to transfer multiple services or products to a customer. Determining whether services and products are considered distinct performance obligations that should be accounted for separately requires significant judgement. Certain customer arrangements have multiple performance obligations as certain promises are both capable of being distinct and are distinct within the context of the contract. Other customer arrangements have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts, and therefore are not distinct. Revenue for the Company’s services and products is recognized either over time or at a point in time, as outlined below. Over time The Company recognizes revenue for certain services over time. • The Company’s SaaS solutions, including the Venue Virtual Data Room, the FundSuiteArc software platform, ActiveDisclosure, data and analytics and others, are generally provided on a subscription basis and allow customers access to use the products over the contract period. As a result, revenue for SaaS solutions are recognized ratably over time as the customer receives the benefit throughout the contract period. The timing of invoicing varies, however the customer may be invoiced before the end of the contract period, resulting in a deferred revenue balance. • Revenue for warehousing services are recognized ratably over time as the customer receives the benefit throughout the storage period. Point in time All remaining revenue arrangements are generally recognized at a point in time and are primarily invoiced upon completion of all services or upon shipment to the customer. • Certain of these arrangements include multiple performance obligations and revenue is recognized upon completion of each performance obligation, such as when a document is filed with a regulatory agency and upon completion of printing the related document. For arrangements with multiple performance obligations, the transaction price is allocated to the separate performance obligations. The Company provides customer specific solutions and as such, observable standalone selling price is rarely available. Standalone selling price is more frequently determined using an estimate of the standalone selling price of each distinct service or product, taking into consideration historical selling price by customer for each distinct service or product. These estimates may vary from the final amounts invoiced to the customer and are adjusted upon completion of all performance obligations. Customers may be invoiced subsequent to the recognition of revenue for completed performance obligations , resulting in contract asset balances. • Revenue for arrangements which include assisting customers in completing regulatory filings for transactions, such as mergers and acquisitions or other public capital market transactions, is recognized upon completion of all promises, including the services performed and printing of the related document, if applicable. • Revenue for arrangements without a regulatory filing generally have a single performance obligation, as the services and products provided are not distinct within the context of the contract, and are recognized upon completion of the services performed or upon completion of printing of the related product . • Warehousing, fulfillment services and shipping and handling are each separate performance obligations. As a result, when the Company provides warehousing and future fulfillment services, revenue for the composition services performed and printing of the product is recognized upon completion of the performance obligation(s), as control of the inventory has transferred to the customer and the inventory is being stored at the customer’s request. Because substantially all of the Company’s products are customized, product returns are not significant; however, the Company accrues for the estimated amount of customer credits at the time of sale. The Company records deferred revenue when amounts are invoiced but the revenue recognition criteria are not yet met. Such revenue is recognized when all criteria are subsequently met. Certain revenues earned by the Company require significant judgment to determine if revenue should be recorded gross, as a principal, or net of related costs, as an agent. Billings for shipping and handling costs as well as certain postage costs, and out-of-pocket expenses are recorded gross. Revenue is not recognized for customer-supplied postage. The Company’s printing operations process paper that may be supplied directly by customers or may be purchased by the Company from third parties and sold to customers. Revenue is not recognized for customer-supplied paper, however revenues for Company-supplied paper are recognized on a gross basis. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to authorities. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Impact of Adoption of ASU on Condensed Consolidated Statement of Operations and Condensed Consolidated Balance Sheet | The cumulative effect of the changes made to the Company’s consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09 were as follows: Balance at December 31, 2017 Adoption of ASU 2014-09 Balance at January 1, 2018 Assets Receivables, less allowances for doubtful accounts $ 165.2 $ 8.9 $ 174.1 Inventories 23.3 (10.6 ) 12.7 Deferred income taxes 22.2 (0.5 ) 21.7 Total assets 893.5 (2.2 ) 891.3 Liabilities Accrued liabilities 119.2 (3.1 ) 116.1 Equity Retained earnings 8.9 0.9 9.8 Total liabilities and equity $ 893.5 $ (2.2 ) $ 891.3 The impact of the adoption of ASU 2014-09 on the Company’s condensed consolidated statement of operations and condensed consolidated balance sheet was as follows: Three Months Ended March 31, 2018 Previous Revenue Standard Adoption of ASU 2014-09 As Reported Services net sales $ 156.9 $ 2.6 $ 159.5 Products net sales 96.7 (1.0 ) 95.7 Total net sales 253.6 1.6 255.2 Services cost of sales (exclusive of depreciation and amortization) 85.5 0.4 85.9 Products costs of sales (exclusive of depreciation and amortization) 74.1 (1.4 ) 72.7 Total cost of sales 159.6 (1.0 ) 158.6 Selling, general and administrative expenses (exclusive of depreciation and amortization) 65.8 0.3 66.1 Income tax expense 2.8 0.7 3.5 Net earnings $ 6.1 $ 1.6 $ 7.7 Earnings per share Basic 0.18 0.05 0.23 Diluted 0.18 0.05 0.23 March 31, 2018 Previous Revenue Standard Adoption of ASU 2014-09 As Reported Assets Receivables, less allowances for doubtful accounts $ 228.3 $ 10.7 $ 239.0 Inventories 27.8 (9.3 ) 18.5 Deferred income taxes 21.5 (0.5 ) 21.0 Total assets 914.3 0.9 915.2 Liabilities Accrued liabilities 93.0 (1.5 ) 91.5 Other noncurrent liabilities 22.9 (0.1 ) 22.8 Equity Retained earnings 15.0 2.5 17.5 Total liabilities and equity $ 914.3 $ 0.9 $ 915.2 |
Schedule of Disaggregation of Revenue by Reporting Unit and Timing of Revenue Recognition | Disaggregation of revenue The following table disaggregates revenue by reporting unit and timing of revenue recognition: Three Months Ended March 31, 2018 Point in time Over time Total U.S. Capital Markets $ 93.5 $ 24.0 $ 117.5 Investment Markets 71.1 13.5 84.6 Language Solutions and other 11.0 — 11.0 Total U.S. 175.6 37.5 213.1 International 37.9 4.2 42.1 Total net sales $ 213.5 $ 41.7 $ 255.2 |
Changes in Contract Liabilities | Contract liabilities consist of deferred revenue and progress billings which are included in accrued liabilities on the condensed consolidated balance sheet. Changes in contract liabilities were as follows: Balance at January 1, 2018 $ 14.2 Deferral of revenue 9.4 Revenue recognized (10.5 ) Balance at March 31, 2018 $ 13.1 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Raw materials and manufacturing supplies $ 4.2 $ 3.3 Work in process 14.3 13.7 Finished goods — 6.3 Total $ 18.5 $ 23.3 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Components of Company's Property, Plant and Equipment | The components of the Company’s property, plant and equipment at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Land $ 10.0 $ 10.0 Buildings 36.3 36.1 Machinery and equipment 104.1 104.0 150.4 150.1 Less: Accumulated depreciation (117.3 ) (115.4 ) Total $ 33.1 $ 34.7 |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill by segment for the three months ended March 31, 2018 were as follows: U.S. International Total Net book value as of December 31, 2017 $ 429.2 $ 18.2 $ 447.4 Foreign exchange and other adjustments — (0.1 ) (0.1 ) Net book value as of March 31, 2018 $ 429.2 $ 18.1 $ 447.3 |
Components of Other Intangible Assets | The components of other intangible assets at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Amount Amortization Value Amount Amortization Value Customer relationships $ 140.9 $ (104.4 ) $ 36.5 $ 140.6 $ (100.7 ) $ 39.9 Trade names 2.9 (2.9 ) — 2.9 (2.9 ) — Total other intangible assets $ 143.8 $ (107.3 ) $ 36.5 $ 143.5 $ (103.6 ) $ 39.9 |
Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets | The following table outlines the estimated annual amortization expense related to other intangible assets as of March 31, 2018: For the year ending December 31, Amount 2018 $ 13.8 2019 13.8 2020 12.3 2021 — 2022 — 2023 and thereafter — Total $ 39.9 |
Restructuring, Impairment and30
Restructuring, Impairment and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Restructuring, Impairment and Other Charges Recognized in Results of Operations | For the three months ended March 31, 2018 and 2017, the Company recorded the following net restructuring, impairment and other charges: Three Months Ended Employee Other Restructuring Total Restructuring Other March 31, 2018 Terminations Charges Charges Charges Total U.S. $ 0.1 $ 0.5 $ 0.6 $ 0.1 $ 0.7 International (0.1 ) — (0.1 ) — (0.1 ) Corporate 0.1 — 0.1 — 0.1 Total $ 0.1 $ 0.5 $ 0.6 $ 0.1 $ 0.7 Three Months Ended Employee Other Restructuring Total Restructuring Other March 31, 2017 Terminations Charges Charges Charges Total U.S. $ 2.0 $ 0.4 $ 2.4 $ 0.1 $ 2.5 International 0.7 — 0.7 — 0.7 Corporate 0.6 — 0.6 — 0.6 Total $ 3.3 $ 0.4 $ 3.7 $ 0.1 $ 3.8 |
Schedule of Changes in the Restructuring Reserve | The restructuring reserve as of December 31, 2017 and March 31, 2018, and changes during the three months ended March 31, 2018, were as follows: December 31, 2017 Restructuring Charges Reversals Cash Paid March 31, 2018 Employee terminations $ 1.3 $ 0.3 $ (0.2 ) $ (0.6 ) $ 0.8 Lease terminations and other 2.1 0.5 — (0.4 ) 2.2 Total $ 3.4 $ 0.8 $ (0.2 ) $ (1.0 ) $ 3.0 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Estimated Net Pension Plan Income | The components of the estimated net pension plan income for Donnelley Financial’s pension plans for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended March 31, 2018 2017 Pension expense (income) Interest cost $ 2.6 $ 2.7 Expected return on assets (4.0 ) (4.0 ) Amortization, net 0.6 0.5 Net pension income $ (0.8 ) $ (0.8 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes and Effective Tax Rates | The following table presents the provision for income taxes and the effective tax rates for the three months ended March 31, 2018 and 2017: 2018 2017 $ Change % Change (in millions, except percentages) Earnings before income taxes $ 11.2 $ 16.1 $ (4.9 ) (30.4 %) Income tax expense 3.5 6.8 (3.3 ) (48.5 %) Effective income tax rate 31.3 % 42.2 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Share Based Compensation [Abstract] | |
Summary of Assumptions Used to Determine Fair Market Value of Stock Options Granted | The assumptions used to determine the fair market value of the stock options granted during the three months ended March 31, 2018 were as follows: 2018 Expected volatility 27.75 % Risk-free interest rate 2.71 % Expected life (years) 6.25 Expected dividend yield 0.00 % |
Summary of Stock Options Activity | Stock outstanding Weighted Average Weighted Average Remaining Contractual Aggregate Intrinsic Shares Under Option Exercise Term Value (thousands) Price (years) (millions) Outstanding at December 31, 2017 459 $ 22.13 5.1 $ 0.8 Granted 324 17.91 9.9 Exercised (104 ) 11.95 Outstanding at March 31, 2018 679 21.67 7.9 0.0 Vested and expected to vest at March 31, 2018 649 $ 21.77 7.8 0.0 |
Summary of Restricted Stock Units | Nonvested Weighted Shares Average Grant (Thousands) Date Fair Value Nonvested at December 31, 2017 598 $ 23.48 Granted 339 17.65 Vested (142 ) Forfeited (9 ) 22.35 Nonvested at March 31, 2018 786 $ 20.02 |
Summary of Performance Share Units | Nonvested performance share units as of December 31, 2017 and March 31, 2018, and changes during the three months ended March 31, 2018, were as follows: Weighted Shares Average Grant (Thousands) Date Fair Value Nonvested at December 31, 2017 37 $ 22.41 Granted 232 17.65 Nonvested at March 31, 2018 269 $ 18.31 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of the Company's Equity Activity | The Company’s equity as of December 31, 2017 and March 31, 2018, and changes during the three months ended March 31, 2018, were as follows: Total Equity Balance at December 31, 2017 $ 149.4 Net earnings 7.7 Other comprehensive income 1.2 Adoption of ASU 2014-09 0.9 Share-based compensation 1.8 Issuance of share-based awards, net of withholdings and other 0.6 Balance at March 31, 2018 $ 161.6 The Company’s equity as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017, were as follows: Total Equity Balance at December 31, 2016 $ 111.1 Net earnings 9.3 Other comprehensive income 0.5 Separation-related adjustments 3.1 Share-based compensation 1.1 Issuance of share-based awards, net of withholdings and other (0.6 ) Balance at March 31, 2017 $ 124.5 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator of Basic and Diluted Earnings per Share Calculation and Anti-dilutive Share-based Awards | The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive share-based awards for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended March 31, 2018 2017 Net earnings per share: Basic $ 0.23 $ 0.29 Diluted $ 0.23 $ 0.28 Numerator: Net earnings $ 7.7 $ 9.3 Denominator: Weighted average number of common shares outstanding 33.7 32.6 Dilutive awards 0.2 0.2 Diluted weighted average number of common shares outstanding 33.9 32.8 Weighted average number of anti-dilutive share-based awards: Restricted stock units 0.1 0.1 Stock options 0.5 0.1 Total 0.6 0.2 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Components of Other Comprehensive Income and Income Tax Expense Allocated to Each Component | The components of other comprehensive income and income tax expense allocated to each component for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended March 31, 2018 Before Tax Income Tax Net of Tax Amount Expense Amount Translation adjustments $ 0.7 $ — $ 0.7 Adjustment for net periodic pension plan and other postretirement benefits plan cost 0.6 0.1 0.5 Other comprehensive income $ 1.3 $ 0.1 $ 1.2 Three Months Ended March 31, 2017 Before Tax Income Tax Net of Tax Amount Expense Amount Translation adjustments $ 0.1 $ — $ 0.1 Adjustment for net periodic pension plan and other postretirement benefits plan cost 0.5 0.1 0.4 Other comprehensive income $ 0.6 $ 0.1 $ 0.5 |
Schedule of Changes in Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss by component as of December 31, 2017 and March 31, 2018 were as follows: Pension and Other Postretirement Benefits Plan Cost Translation Adjustments Total Balance at December 31, 2017 $ (52.9 ) $ (11.7 ) $ (64.6 ) Other comprehensive income before reclassifications — 0.7 0.7 Amounts reclassified from accumulated other comprehensive loss 0.5 — 0.5 Net change in accumulated other comprehensive loss 0.5 0.7 1.2 Balance at March 31, 2018 $ (52.4 ) $ (11.0 ) $ (63.4 ) Accumulated other comprehensive loss by component as of December 31, 2016 and March 31, 2017 as follows: Pension and Other Postretirement Benefits Plan Cost Translation Adjustments Total Balance at December 31, 2016 $ (52.2 ) $ (16.1 ) $ (68.3 ) Other comprehensive income before reclassifications — 0.1 0.1 Amounts reclassified from accumulated other comprehensive loss 0.4 — 0.4 Net change in accumulated other comprehensive loss 0.4 0.1 0.5 Balance at March 31, 2017 $ (51.8 ) $ (16.0 ) $ (67.8 ) |
Reclassifications from Accumulated Other Comprehensive Loss, Amortization of Pension Plan Cost | Reclassifications from accumulated other comprehensive loss for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended Classification in the March 31, Condensed Consolidated 2018 2017 Statements of Operations Amortization of pension and other postretirement benefits plan cost: Net actuarial income $ 0.6 $ 0.5 (a) Reclassifications before tax 0.6 0.5 Income tax expense 0.1 0.1 Reclassifications, net of tax $ 0.5 $ 0.4 (a) These accumulated other comprehensive loss components are included in the calculation of net periodic pension and other postretirement benefits plan income recognized in investment and other income in the unaudited condensed consolidated statements of operations (see Note 7, Retirement Plans |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The Company has disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Company’s chief operating decision-maker and is most consistent with the presentation of profitability reported within the condensed consolidated financial statements. Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Three Months Ended March 31, 2018 U.S. $ 214.6 $ (1.5 ) $ 213.1 $ 26.4 $ 714.8 $ 8.9 $ 6.1 International 42.7 (0.6 ) 42.1 2.5 95.9 1.4 0.1 Total operating segments 257.3 (2.1 ) 255.2 28.9 810.7 10.3 6.2 Corporate — — — (9.5 ) 104.5 0.1 0.2 Total operations $ 257.3 $ (2.1 ) $ 255.2 $ 19.4 $ 915.2 $ 10.4 $ 6.4 Income Depreciation Total Intersegment Net from Assets of and Capital Sales Sales Sales Operations Operations Amortization Expenditures Three Months Ended March 31, 2017 U.S. $ 232.9 $ (2.5 ) $ 230.4 $ 37.0 $ 740.2 $ 8.8 $ 3.9 International 37.3 (0.4 ) 36.9 0.2 94.6 1.4 0.4 Total operating segments 270.2 (2.9 ) 267.3 37.2 834.8 10.2 4.3 Corporate — — — (10.8 ) 189.8 — — Total operations $ 270.2 $ (2.9 ) $ 267.3 $ 26.4 $ 1,024.6 $ 10.2 $ 4.3 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of the Company's Debt | The Company’s debt as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, 2018 2017 8.25% senior notes due October 15, 2024 $ 300.0 $ 300.0 Term Loan Credit Facility 168.7 168.6 Borrowings under the Revolving Facility 20.0 — Unamortized debt issuance costs (9.9 ) (10.3 ) Total debt 478.8 458.3 Less: current portion — — Long-term debt $ 478.8 $ 458.3 |
Guarantor Financial Informati39
Guarantor Financial Information - (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Guarantor Financial Information Condensed Consolidating Statements of Operations | Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 2018 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 128.7 $ 32.1 $ (1.3 ) $ 159.5 Products net sales — 85.9 10.6 (0.8 ) 95.7 Total net sales — 214.6 42.7 (2.1 ) 255.2 Services cost of sales (exclusive of depreciation and amortization) — 67.5 19.6 (1.2 ) 85.9 Products cost of sales (exclusive of depreciation and amortization) — 65.1 8.5 (0.9 ) 72.7 Total cost of sales — 132.6 28.1 (2.1 ) 158.6 Selling, general and administrative expenses (exclusive of depreciation and amortization) — 55.3 10.8 — 66.1 Restructuring, impairment and other charges-net — 0.8 (0.1 ) — 0.7 Depreciation and amortization — 9.0 1.4 — 10.4 Income from operations — 16.9 2.5 — 19.4 Interest expense (income)-net 9.2 (0.2 ) — — 9.0 Intercompany interest (income) expense-net (6.6 ) 6.6 — — — Investment and other income-net — (0.8 ) — — (0.8 ) Earnings (loss) before income taxes and equity in net income of subsidiaries (2.6 ) 11.3 2.5 — 11.2 Income tax (benefit) expense (0.8 ) 3.5 0.8 — 3.5 Earnings (loss) before equity in net income of subsidiaries (1.8 ) 7.8 1.7 — 7.7 Equity in net income of subsidiaries 9.5 1.7 — (11.2 ) — Net earnings $ 7.7 $ 9.5 $ 1.7 $ (11.2 ) $ 7.7 Comprehensive income $ 8.9 $ 10.8 $ 2.4 $ (13.2 ) $ 8.9 Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales $ — $ 128.6 $ 27.0 $ (1.6 ) $ 154.0 Products net sales — 104.3 10.3 (1.3 ) 113.3 Total net sales — 232.9 37.3 (2.9 ) 267.3 Services cost of sales (exclusive of depreciation and amortization) — 61.3 17.9 (1.5 ) 77.7 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* — 9.4 0.5 — 9.9 Products cost of sales (exclusive of depreciation and amortization) — 57.0 7.4 (1.4 ) 63.0 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization) — 18.7 0.1 — 18.8 Total cost of sales — 146.4 25.9 (2.9 ) 169.4 Selling, general and administrative expenses (exclusive of depreciation and amortization)* — 48.4 9.1 — 57.5 Restructuring, impairment and other charges-net — 3.1 0.7 — 3.8 Depreciation and amortization — 8.8 1.4 — 10.2 Income from operations — 26.2 0.2 — 26.4 Interest expense (income)-net 11.3 (0.2 ) — — 11.1 Investment and other income-net — (0.8 ) — — (0.8 ) Earnings (loss) before income taxes and equity in net income of subsidiaries (11.3 ) 27.2 0.2 — 16.1 Income tax (benefit) expense (4.7 ) 11.4 0.1 — 6.8 Earnings (loss) before equity in net income of subsidiaries (6.6 ) 15.8 0.1 — 9.3 Equity in net income of subsidiaries 15.9 0.1 — (16.0 ) — Net earnings (loss) $ 9.3 $ 15.9 $ 0.1 $ (16.0 ) $ 9.3 Comprehensive income (loss) $ 9.8 $ 16.4 $ 0.2 $ (16.6 ) $ 9.8 *Beginning in the quarter ended June 30, 2017, LSC Communications, Inc. (“LSC”) no longer qualified as a related party, therefore the amounts disclosed related to LSC are only presented for the three months ended March 31, 2017. 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 only presented for the three months ended March 31, 2017. |
Guarantor Financial Information Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet As of March 31, 2018 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 3.5 $ 8.6 $ — $ 12.1 Receivables, less allowances — 195.7 43.3 — 239.0 Intercompany receivables — 117.6 — (117.6 ) — Intercompany short-term note receivable-net — — 32.0 (32.0 ) — Inventories — 13.9 4.6 — 18.5 Prepaid expenses and other current assets 34.5 14.4 3.5 (24.2 ) 28.2 Total current assets 34.5 345.1 92.0 (173.8 ) 297.8 Property, plant and equipment-net — 29.9 3.2 — 33.1 Goodwill — 429.2 18.1 — 447.3 Other intangible assets-net — 29.6 6.9 — 36.5 Software-net — 41.4 0.4 — 41.8 Deferred income taxes 0.4 40.0 4.4 (23.8 ) 21.0 Intercompany long-term note receivable, net 376.0 — — (376.0 ) — Other noncurrent assets 3.2 29.7 4.8 — 37.7 Investments in consolidated subsidiaries 366.2 86.2 — (452.4 ) — Total assets $ 780.3 $ 1,031.1 $ 129.8 $ (1,026.0 ) $ 915.2 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ — $ 73.1 $ 14.6 $ — $ 87.7 Intercompany payables 107.9 — 9.7 (117.6 ) — Intercompany short-term note payable-net 32.0 — — (32.0 ) — Accrued liabilities — 99.8 15.9 (24.2 ) 91.5 Total current liabilities 139.9 172.9 40.2 (173.8 ) 179.2 Long-term debt 478.8 — — — 478.8 Intercompany long-term note payable, net — 376.0 — (376.0 ) — Deferred compensation liabilities — 21.8 — — 21.8 Pension and other postretirement benefits plan liabilities — 49.9 1.1 — 51.0 Other noncurrent liabilities — 44.3 2.3 (23.8 ) 22.8 Total liabilities 618.7 664.9 43.6 (573.6 ) 753.6 Total equity 161.6 366.2 86.2 (452.4 ) 161.6 Total liabilities and equity $ 780.3 $ 1,031.1 $ 129.8 $ (1,026.0 ) $ 915.2 Condensed Consolidating Balance Sheet As of December 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 8.3 $ 27.9 $ 15.8 $ — $ 52.0 Receivables, less allowances — 131.3 33.9 — 165.2 Intercompany receivables — 146.4 — (146.4 ) — Intercompany short-term note receivable-net — — 30.0 (30.0 ) — Inventories — 21.3 2.0 — 23.3 Prepaid expenses and other current assets 37.1 14.8 2.8 (25.1 ) 29.6 Total current assets 45.4 341.7 84.5 (201.5 ) 270.1 Property, plant and equipment-net — 31.2 3.5 — 34.7 Goodwill — 429.2 18.2 — 447.4 Other intangible assets-net — 32.4 7.5 — 39.9 Software-net — 40.6 0.5 — 41.1 Deferred income taxes — 40.5 3.4 (21.7 ) 22.2 Other noncurrent assets 3.4 30.0 4.7 — 38.1 Investments in consolidated subsidiaries 728.4 85.2 — (813.6 ) — Total assets $ 777.2 $ 1,030.8 $ 122.3 $ (1,036.8 ) $ 893.5 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ — $ 57.9 $ 9.9 $ — $ 67.8 Intercompany payable 139.5 — 6.9 (146.4 ) — Intercompany short-term note payable-net 30.0 — — (30.0 ) — Accrued liabilities — 127.6 16.7 (25.1 ) 119.2 Total current liabilities 169.5 185.5 33.5 (201.5 ) 187.0 Long-term debt 458.3 — — — 458.3 Deferred compensation liabilities — 22.8 — — 22.8 Pension and other postretirement benefits plan liabilities — 51.3 1.2 — 52.5 Other noncurrent liabilities — 42.8 2.4 (21.7 ) 23.5 Total liabilities 627.8 302.4 37.1 (223.2 ) 744.1 Total equity 149.4 728.4 85.2 (813.6 ) 149.4 Total liabilities and equity $ 777.2 $ 1,030.8 $ 122.3 $ (1,036.8 ) $ 893.5 |
Guarantor Financial Information Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2018 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash used in operating activities $ (30.7 ) $ (18.1 ) $ (4.8 ) $ — $ (53.6 ) INVESTING ACTIVITIES Capital expenditures — (6.3 ) (0.1 ) — (6.4 ) Intercompany note receivable, net — — (2.0 ) 2.0 — Net cash used in investing activities — (6.3 ) (2.1 ) 2.0 (6.4 ) FINANCING ACTIVITIES Revolving facility borrowings 88.0 — — — 88.0 Payments on revolving facility borrowings (68.0 ) — — — (68.0 ) Intercompany note payable, net 2.0 — — (2.0 ) — Proceeds from issuance of common stock 1.2 — — — 1.2 Treasury stock repurchases (0.8 ) — — — (0.8 ) Net cash provided by financing activities 22.4 — — (2.0 ) 20.4 Effect of exchange rate on cash and cash equivalents — — (0.3 ) — (0.3 ) Net decrease in cash and cash equivalents (8.3 ) (24.4 ) (7.2 ) — (39.9 ) Cash and cash equivalents at beginning of year 8.3 27.9 15.8 — 52.0 Cash and cash equivalents at end of period $ — $ 3.5 $ 8.6 $ — $ 12.1 Supplemental non-cash disclosure: Intercompany debt allocation $ (376.0 ) $ 376.0 $ — $ — $ — Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (27.3 ) $ 4.5 $ (0.6 ) $ (14.8 ) $ (38.2 ) INVESTING ACTIVITIES Capital expenditures — (3.9 ) (0.4 ) — (4.3 ) Purchase of investment — (3.4 ) — — (3.4 ) Other investing activities — 0.2 — — 0.2 Net cash used in investing activities — (7.1 ) (0.4 ) — (7.5 ) FINANCING ACTIVITIES Revolving facility borrowings 57.0 — — — 57.0 Payments on revolving facility borrowings (37.0 ) — — — (37.0 ) Debt issuance costs (1.5 ) — — — (1.5 ) Intercompany note payable (receivable) 5.7 — (5.7 ) — — Net transfers related to the Separation 3.1 — — — 3.1 Net cash provided by (used in) financing activities 27.3 — (5.7 ) — 21.6 Effect of exchange rate on cash and cash equivalents — — 0.2 — 0.2 Net decrease in cash and cash equivalents — (2.6 ) (6.5 ) (14.8 ) (23.9 ) Cash and cash equivalents at beginning of year — 21.8 16.8 (2.4 ) 36.2 Cash and cash equivalents at end of period $ — $ 19.2 $ 10.3 $ (17.2 ) $ 12.3 |
Overview and Basis of Present40
Overview and Basis of Presentation - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Aug. 04, 2017 | Jun. 21, 2017 | Mar. 28, 2017 | Oct. 01, 2016 | Mar. 31, 2018 | Mar. 31, 2017 |
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 | |||||
Proceeds from the issuance of common stock | $ 1.2 | $ 0 | ||||
R.R. Donnelley & Sons Company | ||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Number of common stock retained | 0.1 | 6.2 | ||||
Ownership percentage | 19.25% | |||||
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 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Jan. 01, 2018 | |
Revenue Recognition [Abstract] | ||
Period due on customer payment upon invoicing | 10 days | |
Contract assets | $ 11.2 | $ 9 |
Invoiced to customers amount that exceeded estimates of standalone selling price | $ 0.7 |
Revenue - Cumulative Effect of
Revenue - Cumulative Effect of Changes Made to Consolidated Balance Sheet for Adoption of ASU (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
ASSETS | ||||
Receivables, less allowances for doubtful accounts | $ 239 | $ 174.1 | $ 165.2 | |
Inventories | 18.5 | 12.7 | 23.3 | |
Deferred income taxes | 21 | 21.7 | 22.2 | |
Total assets | 915.2 | 891.3 | 893.5 | $ 1,024.6 |
LIABILITIES | ||||
Accrued liabilities | 91.5 | 116.1 | 119.2 | |
EQUITY | ||||
Retained earnings | 17.5 | 9.8 | 8.9 | |
Total liabilities and equity | 915.2 | 891.3 | 893.5 | |
Adoption of ASU 2014-09 | ||||
ASSETS | ||||
Receivables, less allowances for doubtful accounts | 10.7 | 8.9 | ||
Inventories | (9.3) | (10.6) | ||
Deferred income taxes | (0.5) | (0.5) | ||
Total assets | 0.9 | (2.2) | ||
LIABILITIES | ||||
Accrued liabilities | (1.5) | (3.1) | ||
EQUITY | ||||
Retained earnings | 2.5 | 0.9 | ||
Total liabilities and equity | $ 0.9 | $ (2.2) | ||
Previously Reported | ||||
ASSETS | ||||
Receivables, less allowances for doubtful accounts | 165.2 | |||
Inventories | 23.3 | |||
Deferred income taxes | 22.2 | |||
Total assets | 893.5 | |||
LIABILITIES | ||||
Accrued liabilities | 119.2 | |||
EQUITY | ||||
Retained earnings | 8.9 | |||
Total liabilities and equity | $ 893.5 |
Revenue - Impact of Adoption of
Revenue - Impact of Adoption of ASU on Condensed Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Services net sales | $ 159.5 | $ 154 |
Products net sales | 95.7 | 113.3 |
Total net sales | 255.2 | 267.3 |
Services cost of sales (exclusive of depreciation and amortization) | 85.9 | 77.7 |
Products cost of sales (exclusive of depreciation and amortization) | 72.7 | 63 |
Total cost of sales | 158.6 | 169.4 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 66.1 | 57.5 |
Income tax expense | 3.5 | 6.8 |
Net earnings | $ 7.7 | $ 9.3 |
Earnings per share | ||
Basic net earnings per share | $ 0.23 | $ 0.29 |
Diluted net earnings per share | $ 0.23 | $ 0.28 |
Previous Revenue Standard | ||
Services net sales | $ 156.9 | |
Products net sales | 96.7 | |
Total net sales | 253.6 | |
Services cost of sales (exclusive of depreciation and amortization) | 85.5 | |
Products cost of sales (exclusive of depreciation and amortization) | 74.1 | |
Total cost of sales | 159.6 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 65.8 | |
Income tax expense | 2.8 | |
Net earnings | $ 6.1 | |
Earnings per share | ||
Basic net earnings per share | $ 0.18 | |
Diluted net earnings per share | $ 0.18 | |
Adoption of ASU 2014-09 | ||
Services net sales | $ 2.6 | |
Products net sales | (1) | |
Total net sales | 1.6 | |
Services cost of sales (exclusive of depreciation and amortization) | 0.4 | |
Products cost of sales (exclusive of depreciation and amortization) | (1.4) | |
Total cost of sales | (1) | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 0.3 | |
Income tax expense | 0.7 | |
Net earnings | $ 1.6 | |
Earnings per share | ||
Basic net earnings per share | $ 0.05 | |
Diluted net earnings per share | $ 0.05 |
Revenue - Impact of Adoption 44
Revenue - Impact of Adoption of ASU on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
ASSETS | ||||
Receivables, less allowances for doubtful accounts | $ 239 | $ 174.1 | $ 165.2 | |
Inventories | 18.5 | 12.7 | 23.3 | |
Deferred income taxes | 21 | 21.7 | 22.2 | |
Total assets | 915.2 | 891.3 | 893.5 | $ 1,024.6 |
LIABILITIES | ||||
Accrued liabilities | 91.5 | 116.1 | 119.2 | |
Other noncurrent liabilities | 22.8 | 23.5 | ||
EQUITY | ||||
Retained earnings | 17.5 | 9.8 | 8.9 | |
Total liabilities and equity | 915.2 | 891.3 | $ 893.5 | |
Previous Revenue Standard | ||||
ASSETS | ||||
Receivables, less allowances for doubtful accounts | 228.3 | |||
Inventories | 27.8 | |||
Deferred income taxes | 21.5 | |||
Total assets | 914.3 | |||
LIABILITIES | ||||
Accrued liabilities | 93 | |||
Other noncurrent liabilities | 22.9 | |||
EQUITY | ||||
Retained earnings | 15 | |||
Total liabilities and equity | 914.3 | |||
Adoption of ASU 2014-09 | ||||
ASSETS | ||||
Receivables, less allowances for doubtful accounts | 10.7 | 8.9 | ||
Inventories | (9.3) | (10.6) | ||
Deferred income taxes | (0.5) | (0.5) | ||
Total assets | 0.9 | (2.2) | ||
LIABILITIES | ||||
Accrued liabilities | (1.5) | (3.1) | ||
Other noncurrent liabilities | (0.1) | |||
EQUITY | ||||
Retained earnings | 2.5 | 0.9 | ||
Total liabilities and equity | $ 0.9 | $ (2.2) |
Disclosure - Revenue - Schedule
Disclosure - Revenue - Schedule of Disaggregation of Revenue by Reporting Unit and Timing of Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total net sales | $ 255.2 | $ 267.3 |
Point in time | ||
Total net sales | 213.5 | |
Over time | ||
Total net sales | 41.7 | |
U.S. | ||
Total net sales | 213.1 | |
U.S. | Capital Markets | ||
Total net sales | 117.5 | |
U.S. | Investment Markets | ||
Total net sales | 84.6 | |
U.S. | Language Solutions and other | ||
Total net sales | 11 | |
U.S. | Point in time | ||
Total net sales | 175.6 | |
U.S. | Point in time | Capital Markets | ||
Total net sales | 93.5 | |
U.S. | Point in time | Investment Markets | ||
Total net sales | 71.1 | |
U.S. | Point in time | Language Solutions and other | ||
Total net sales | 11 | |
U.S. | Over time | ||
Total net sales | 37.5 | |
U.S. | Over time | Capital Markets | ||
Total net sales | 24 | |
U.S. | Over time | Investment Markets | ||
Total net sales | 13.5 | |
U.S. | Over time | Language Solutions and other | ||
Total net sales | 0 | |
International | ||
Total net sales | 42.1 | |
International | Point in time | ||
Total net sales | 37.9 | |
International | Over time | ||
Total net sales | $ 4.2 |
Revenue - Changes in Contract L
Revenue - Changes in Contract Liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Contract liabilities | |
Balance beginning | $ 14.2 |
Deferral of revenue | 9.4 |
Revenue recognized | (10.5) |
Balance ending | $ 13.1 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventory Net [Abstract] | |||
Raw materials and manufacturing supplies | $ 4.2 | $ 3.3 | |
Work in process | 14.3 | 13.7 | |
Finished goods | 0 | 6.3 | |
Total | $ 18.5 | $ 12.7 | $ 23.3 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Company's Property, Plant and Equipment (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 150.4 | $ 150.1 |
Less: Accumulated depreciation | (117.3) | (115.4) |
Total | 33.1 | 34.7 |
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 | 36.3 | 36.1 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 104.1 | $ 104 |
Property, Plant and Equipment49
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 1.9 | $ 1.3 |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets - Schedule of Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Line Items] | |
Goodwill net book value, beginning balance | $ 447.4 |
Foreign exchange and other adjustments | (0.1) |
Goodwill net book value, ending balance | 447.3 |
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 | 18.2 |
Foreign exchange and other adjustments | (0.1) |
Goodwill net book value, ending balance | $ 18.1 |
Goodwill and Other Intangible51
Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 143.8 | $ 143.5 |
Accumulated Amortization | (107.3) | (103.6) |
Net Book Value | 36.5 | 39.9 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 140.9 | 140.6 |
Accumulated Amortization | (104.4) | (100.7) |
Net Book Value | 36.5 | 39.9 |
Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2.9 | 2.9 |
Accumulated Amortization | (2.9) | (2.9) |
Net Book Value | $ 0 | $ 0 |
Goodwill and Other Intangible52
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense for other intangible assets | $ 3.4 | $ 3.6 |
Goodwill and Other Intangible53
Goodwill and Other Intangible Assets - Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets (Detail) $ in Millions | Mar. 31, 2018USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,018 | $ 13.8 |
2,019 | 13.8 |
2,020 | 12.3 |
2,021 | 0 |
2,022 | 0 |
2023 and thereafter | 0 |
Total | $ 39.9 |
Restructuring, Impairment and54
Restructuring, Impairment and Other Charges - Schedule of Restructuring, Impairment and Other Charges Recognized in Results of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | $ 0.1 | $ 3.3 |
Other Restructuring Charges | 0.5 | 0.4 |
Total Restructuring Charges | 0.6 | 3.7 |
Other Charges | 0.1 | 0.1 |
Total | 0.7 | 3.8 |
U.S. | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | 0.1 | 2 |
Other Restructuring Charges | 0.5 | 0.4 |
Total Restructuring Charges | 0.6 | 2.4 |
Other Charges | 0.1 | 0.1 |
Total | 0.7 | 2.5 |
International | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | (0.1) | 0.7 |
Other Restructuring Charges | 0 | 0 |
Total Restructuring Charges | (0.1) | 0.7 |
Other Charges | 0 | 0 |
Total | (0.1) | 0.7 |
Corporate | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | 0.1 | 0.6 |
Other Restructuring Charges | 0 | 0 |
Total Restructuring Charges | 0.1 | 0.6 |
Other Charges | 0 | 0 |
Total | $ 0.1 | $ 0.6 |
Restructuring, Impairment and55
Restructuring, Impairment and Other Charges - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($)Employee | |
Restructuring And Related Activities [Abstract] | ||
Employee termination costs | $ 0.1 | $ 3.3 |
Other restructuring charges | 0.5 | 0.4 |
Other charges | $ 0.1 | $ 0.1 |
Number of employees used to determine employee termination costs | Employee | 87 |
Restructuring, Impairment and56
Restructuring, Impairment and Other Charges - Schedule of Changes in the Restructuring Reserve (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Balance at the beginning | $ 3.4 |
Restructuring Charges | 0.8 |
Reversals | (0.2) |
Cash Paid | (1) |
Balance at the end | 3 |
Employee terminations | |
Restructuring Cost And Reserve [Line Items] | |
Balance at the beginning | 1.3 |
Restructuring Charges | 0.3 |
Reversals | (0.2) |
Cash Paid | (0.6) |
Balance at the end | 0.8 |
Lease terminations and other | |
Restructuring Cost And Reserve [Line Items] | |
Balance at the beginning | 2.1 |
Restructuring Charges | 0.5 |
Reversals | 0 |
Cash Paid | (0.4) |
Balance at the end | $ 2.2 |
Restructuring, Impairment and57
Restructuring, Impairment and Other Charges - Restructuring Reserve - Additional Information (Details) $ in Millions | Mar. 31, 2018USD ($) |
Accrued Liabilities | |
Restructuring Cost And Reserve [Line Items] | |
Current restructuring reserve (included in accrued liabilities) | $ 2.2 |
Contract Termination | Other Noncurrent Liabilities | |
Restructuring Cost And Reserve [Line Items] | |
Noncurrent restructuring reserve (included in noncurrent liabilities) | $ 0.8 |
Retirement Plans - Components o
Retirement Plans - Components of Estimated Net Pension Plan Income (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension expense (income) | ||
Net pension income | $ (0.8) | $ (0.8) |
Pension Plan | ||
Pension expense (income) | ||
Interest cost | 2.6 | 2.7 |
Expected return on assets | (4) | (4) |
Amortization, net | 0.6 | 0.5 |
Net pension income | $ (0.8) | $ (0.8) |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes and Effective Tax Rates (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Earnings before income taxes | $ 11.2 | $ 16.1 |
Income tax expense | $ 3.5 | $ 6.8 |
Effective income tax rate | 31.30% | 42.20% |
Earnings before income taxes, $ Change | $ (4.9) | |
Income tax expense, $ Change | $ (3.3) | |
Earnings before income taxes, % Change | (30.40%) | |
Income tax expense, % Change | (48.50%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Cash payments for income taxes | $ 2,200,000 | $ 1,300,000 | |
Effective income tax rate | 31.30% | 42.20% | |
Income tax rate | 21.00% | 35.00% | |
Provisional income tax expense | $ 0 | ||
Transition tax, recorded initial provisional liability | 14,200,000 | ||
Measurement period adjustment to decrease transition tax liability | $ 400,000 | ||
State income tax benefit | 400,000 | ||
Reduction of net deferred tax asset recorded as additional deferred income tax expense | 8,200,000 | ||
Incremental measurement adjustments recognized | 0 | ||
Tax on net GILTI | $ 400,000 | ||
Percentage of deduction on foreign-derived intangible income | 37.50% | ||
Percentage of deduction on GILTI | 50.00% | ||
Federal and State | |||
Provisional income tax expense | $ 14,200,000 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation | $ 1,800,000 | $ 1,100,000 | |
Stock options granted | 324,000 | ||
Restricted stock awards granted | $ 0 | ||
RSUs | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation award, vesting period | 3 years | ||
Share-based compensation | $ 900,000 | 600,000 | |
Unrecognized share-based compensation expense | $ 10,200,000 | ||
Unrecognized share-based compensation expense, vest over weighted-average period | 2 years 4 months 24 days | ||
Unrecognized share-based compensation expense, expected to vest, Shares | 800,000 | ||
Unrecognized share-based compensation expense, weighted-average grant date fair value | $ 20.02 | ||
Share-based compensation award, granted | 339,000 | ||
Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation award, vesting period | 4 years | ||
Share-based compensation | $ 100,000 | ||
Stock options granted | 324,500 | ||
Share-based compensation award, weighted-average grant date fair market value | $ 5.83 | ||
Intrinsic value of options exercised | $ 1,000,000 | ||
Excess tax benefit on stock options exercises, shown as operating cash inflows | 0 | 0 | |
Unrecognized share-based compensation expense | $ 2,800,000 | ||
Unrecognized share-based compensation expense, vest over weighted-average period | 3 years 7 months 6 days | ||
Restricted Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation | $ 600,000 | $ 500,000 | |
Unrecognized share-based compensation expense | $ 2,700,000 | ||
Unrecognized share-based compensation expense, vest over weighted-average period | 1 year 8 months 12 days | ||
Share-based compensation expense, targeted performance percentage | 100.00% | ||
Share-based compensation expense, actual performance percentage | 100.00% | ||
Maximum payout for awards | 156,159 | ||
Restricted Stock | Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Potential payout for awards | 0 | ||
Restricted Stock | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Potential payout for awards | 129,400 | ||
Performance Share Units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation | $ 200,000 | ||
Unrecognized share-based compensation expense | $ 4,400,000 | ||
Unrecognized share-based compensation expense, vest over weighted-average period | 2 years 9 months 18 days | ||
Share-based compensation expense, targeted performance percentage | 100.00% | 100.00% | |
Share-based compensation award, granted | 232,000 | ||
Performance Share Units | Certain Executive Officers And Senior Management | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation award, granted | 232,300 | 37,100 | |
Performance Share Units | Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Potential payout for awards | 0 | ||
Performance Share Units | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Potential payout for awards | 348,450 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Assumptions Used to Determine Fair Market Value of Stock Options Granted (Details) - Stock Options | 3 Months Ended |
Mar. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected volatility | 27.75% |
Risk-free interest rate | 2.71% |
Expected life (years) | 6 years 3 months |
Expected dividend yield | 0.00% |
Share-Based Compensation - Su63
Share-Based Compensation - Summary of Stock Option Awards Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Outstanding at beginning of period | 459 | |
Stock options granted | 324 | |
Exercised | (104) | |
Outstanding at end of period | 679 | 459 |
Vested and expected to vest at end of period | 649 | |
Outstanding at beginning of period | $ 21.67 | $ 22.13 |
Granted | 17.91 | |
Exercised | 11.95 | |
Vested and expected to vest at end of period | $ 21.77 | |
Outstanding at beginning of period | 7 years 10 months 24 days | 5 years 1 month 6 days |
Granted | 9 years 10 months 24 days | |
Exercised | 0 years | |
Vested and expected to vest at end of period | 7 years 9 months 18 days | |
Outstanding at beginning of period | $ 0.8 | |
Outstanding at end of period | 0 | $ 0.8 |
Vested and expected to vest at end of period | $ 0 |
Share-Based Compensation - Su64
Share-Based Compensation - Summary of Nonvested Restricted Stock Unit Awards (Details) - RSUs shares in Thousands | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Nonvested at beginning of period, Shares | shares | 598 |
Granted, Shares | shares | 339 |
Vested, Shares | shares | (142) |
Forfeited, Shares | shares | (9) |
Nonvested at end of period, Shares | shares | 786 |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 23.48 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 17.65 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 0 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 22.35 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 20.02 |
Share-Based Compensation - Su65
Share-Based Compensation - Summary of Nonvested Performance Share Units (Details) - Performance Share Units shares in Thousands | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Nonvested at beginning of period, Shares | shares | 37 |
Granted, Shares | shares | 232 |
Nonvested at end of period, Shares | shares | 269 |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 22.41 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 17.65 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 18.31 |
Equity - Schedule of the Compan
Equity - Schedule of the Company's Equity Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity [Abstract] | ||
Balance | $ 149.4 | $ 111.1 |
Net earnings | 7.7 | 9.3 |
Other comprehensive income | 1.2 | 0.5 |
Adoption of ASU 2014-09 | 0.9 | |
Separation-related adjustments | 3.1 | |
Share-based compensation | 1.8 | 1.1 |
Issuance of share-based awards, net of withholdings and other | 0.6 | (0.6) |
Balance | $ 161.6 | $ 124.5 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation of Numerator and Denominator of Basic and Diluted Earnings per Share Calculation and Anti-dilutive Share-based Awards (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share Basic And Diluted [Line Items] | ||
Basic | $ 0.23 | $ 0.29 |
Diluted | $ 0.23 | $ 0.28 |
Net earnings | $ 7.7 | $ 9.3 |
Weighted average number of common shares outstanding | 33.7 | 32.6 |
Dilutive awards | 0.2 | 0.2 |
Diluted weighted average number of common shares outstanding | 33.9 | 32.8 |
Total weighted average number of anti-dilutive share-based awards | 0.6 | 0.2 |
Restricted stock units | ||
Earnings Per Share Basic And Diluted [Line Items] | ||
Total weighted average number of anti-dilutive share-based awards | 0.1 | 0.1 |
Stock options | ||
Earnings Per Share Basic And Diluted [Line Items] | ||
Total weighted average number of anti-dilutive share-based awards | 0.5 | 0.1 |
Comprehensive Income - Schedule
Comprehensive Income - Schedule of Components of Other Comprehensive Income and Income Tax Expense Allocated to Each Component (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive (loss) income, Before Tax Amount | $ 1.3 | $ 0.6 |
Other comprehensive (loss) income, Income Tax Expense | 0.1 | 0.1 |
Other comprehensive income, net of tax | 1.2 | 0.5 |
Translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive (loss) income, Before Tax Amount | 0.7 | 0.1 |
Other comprehensive (loss) income, Income Tax Expense | 0 | 0 |
Other comprehensive income, net of tax | 0.7 | 0.1 |
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 | 0.5 |
Other comprehensive (loss) income, Income Tax Expense | 0.1 | 0.1 |
Other comprehensive income, net of tax | $ 0.5 | $ 0.4 |
Comprehensive Income - Schedu69
Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | $ 149.4 | $ 111.1 |
Balance | 161.6 | 124.5 |
Pension and Other Postretirement Benefits Plan Cost | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (52.9) | (52.2) |
Other comprehensive income before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0.5 | 0.4 |
Net change in accumulated other comprehensive loss | 0.5 | 0.4 |
Balance | (52.4) | (51.8) |
Translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (11.7) | (16.1) |
Other comprehensive income before reclassifications | 0.7 | 0.1 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Net change in accumulated other comprehensive loss | 0.7 | 0.1 |
Balance | (11) | (16) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (64.6) | (68.3) |
Other comprehensive income before reclassifications | 0.7 | 0.1 |
Amounts reclassified from accumulated other comprehensive loss | 0.5 | 0.4 |
Net change in accumulated other comprehensive loss | 1.2 | 0.5 |
Balance | $ (63.4) | $ (67.8) |
Comprehensive Income - Reclassi
Comprehensive Income - Reclassifications from Accumulated Other Comprehensive Loss Amortization of Pension Plan Cost (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
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 | $ 0.5 |
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 | 0.5 | |
Income tax expense | 0.1 | 0.1 | |
Reclassifications, net of tax | $ 0.5 | $ 0.4 | |
[1] | These accumulated other comprehensive loss components are included in the calculation of net periodic pension and other postretirement benefits plan income recognized in investment and other income in the unaudited condensed consolidated statements of operations (see Note 7, Retirement Plans |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net Sales | $ 255.2 | $ 267.3 | ||
Income (Loss) from Operations | 19.4 | 26.4 | ||
Assets of Operations | 915.2 | 1,024.6 | $ 891.3 | $ 893.5 |
Depreciation and amortization | 10.4 | 10.2 | ||
Capital Expenditures | 6.4 | 4.3 | ||
Total Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 257.3 | 270.2 | ||
Income (Loss) from Operations | 28.9 | 37.2 | ||
Assets of Operations | 810.7 | 834.8 | ||
Depreciation and amortization | 10.3 | 10.2 | ||
Capital Expenditures | 6.2 | 4.3 | ||
Intersegment Sales | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | (2.1) | (2.9) | ||
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Income (Loss) from Operations | (9.5) | (10.8) | ||
Assets of Operations | 104.5 | 189.8 | ||
Depreciation and amortization | 0.1 | 0 | ||
Capital Expenditures | 0.2 | 0 | ||
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 213.1 | 230.4 | ||
U.S. | Total Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 214.6 | 232.9 | ||
Income (Loss) from Operations | 26.4 | 37 | ||
Assets of Operations | 714.8 | 740.2 | ||
Depreciation and amortization | 8.9 | 8.8 | ||
Capital Expenditures | 6.1 | 3.9 | ||
U.S. | Intersegment Sales | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | (1.5) | (2.5) | ||
International | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 42.1 | 36.9 | ||
International | Total Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 42.7 | 37.3 | ||
Income (Loss) from Operations | 2.5 | 0.2 | ||
Assets of Operations | 95.9 | 94.6 | ||
Depreciation and amortization | 1.4 | 1.4 | ||
Capital Expenditures | 0.1 | 0.4 | ||
International | Intersegment Sales | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | $ (0.6) | $ (0.4) |
Debt - Schedule of the Company'
Debt - Schedule of the Company's Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (9.9) | $ (10.3) |
Total debt | 478.8 | 458.3 |
Less: current portion | 0 | 0 |
Long-term debt | 478.8 | 458.3 |
8.25% Senior Notes Due October 15, 2024 | ||
Debt Instrument [Line Items] | ||
Senior Unsecured notes | 300 | 300 |
Senior Secured Term Loan B Facility | ||
Debt Instrument [Line Items] | ||
Credit facility | 168.7 | 168.6 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 20 | $ 0 |
Debt - Schedule of the Compan73
Debt - Schedule of the Company's Debt (Parenthetical) (Details) - 8.25% Senior Notes Due October 15, 2024 | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 8.25% | 8.25% |
Maturity date | Oct. 15, 2024 | Oct. 15, 2024 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Interest paid | $ 2,200,000 | $ 3,800,000 | |
Senior Secured Term Loan B Facility | |||
Debt Instrument [Line Items] | |||
Credit facility | 350,000,000 | ||
Borrowings | 168,700,000 | $ 168,600,000 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility | 300,000,000 | ||
Borrowings | $ 20,000,000 | $ 0 | |
Weighted average interest rate on borrowings | 4.80% | 4.20% | |
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Allowable annual dividend payment under credit agreement | $ 15,000,000 | ||
8.25% Senior Notes Due October 15, 2024 | |||
Debt Instrument [Line Items] | |||
Fair value of senior notes | $ 319,000,000 | $ 321,500,000 |
Related Parties - Additional In
Related Parties - Additional Information (Details) - shares shares in Millions | Aug. 04, 2017 | Jun. 21, 2017 | Mar. 28, 2017 | Mar. 31, 2018 |
Transition Services Agreements | ||||
Related Party Transaction [Line Items] | ||||
Intercompany agreements, description | In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company and the Company agrees to provide certain services to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization. | |||
Term of agreement | 24 months | |||
Commercial and Other Arrangements | ||||
Related Party Transaction [Line Items] | ||||
Intercompany agreements, description | The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The terms of the arrangements with RRD do not exceed 36 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize SaaS solutions and services that the Company provides to all of its clients. | |||
Term of agreement | 36 months | |||
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. 4, 2017 |
Guarantor Financial Informati76
Guarantor Financial Information - Additional Information (Details) | Mar. 31, 2018 |
Guarantor Subsidiaries | |
Condensed Income Statements Captions [Line Items] | |
Percentage of ownership in directly owned subsidiaries | 100.00% |
Guarantor Financial Informati77
Guarantor Financial Information - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Condensed Income Statements Captions [Line Items] | |||
Services net sales | $ 159.5 | $ 154 | |
Products net sales | 95.7 | 113.3 | |
Total net sales | 255.2 | 267.3 | |
Services cost of sales (exclusive of depreciation and amortization) | 85.9 | 77.7 | |
Products cost of sales (exclusive of depreciation and amortization) | 72.7 | 63 | |
Total cost of sales | 158.6 | 169.4 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 66.1 | 57.5 | |
Restructuring, impairment and other charges-net | 0.7 | 3.8 | |
Depreciation and amortization | 10.4 | 10.2 | |
Income from operations | 19.4 | 26.4 | |
Interest expense (income)-net | 9 | 11.1 | |
Intercompany interest (income) expense-net | 0 | ||
Investment and other income-net | (0.8) | (0.8) | |
Earnings (loss) before income taxes and equity in net income of subsidiaries | 11.2 | 16.1 | |
Income tax expense | 3.5 | 6.8 | |
Earnings (loss) before equity in net income of subsidiaries | 7.7 | 9.3 | |
Equity in net income of subsidiaries | 0 | 0 | |
Net earnings | 7.7 | 9.3 | |
Comprehensive income | 8.9 | 9.8 | |
R.R. Donnelley Affiliates | |||
Condensed Income Statements Captions [Line Items] | |||
Services cost of sales (exclusive of depreciation and amortization) | [1] | 0 | 9.9 |
Products cost of sales (exclusive of depreciation and amortization) | [1] | 0 | 18.8 |
Eliminations | |||
Condensed Income Statements Captions [Line Items] | |||
Services net sales | (1.3) | (1.6) | |
Products net sales | (0.8) | (1.3) | |
Total net sales | (2.1) | (2.9) | |
Services cost of sales (exclusive of depreciation and amortization) | (1.2) | (1.5) | |
Products cost of sales (exclusive of depreciation and amortization) | (0.9) | (1.4) | |
Total cost of sales | (2.1) | (2.9) | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 0 | 0 | |
Restructuring, impairment and other charges-net | 0 | 0 | |
Depreciation and amortization | 0 | 0 | |
Income from operations | 0 | 0 | |
Interest expense (income)-net | 0 | 0 | |
Intercompany interest (income) expense-net | 0 | ||
Investment and other income-net | 0 | 0 | |
Earnings (loss) before income taxes and equity in net income of subsidiaries | 0 | 0 | |
Income tax expense | 0 | 0 | |
Earnings (loss) before equity in net income of subsidiaries | 0 | 0 | |
Equity in net income of subsidiaries | (11.2) | (16) | |
Net earnings | (11.2) | (16) | |
Comprehensive income | (13.2) | (16.6) | |
Eliminations | R.R. Donnelley Affiliates | |||
Condensed Income Statements Captions [Line Items] | |||
Services cost of sales (exclusive of depreciation and amortization) | 0 | ||
Products cost of sales (exclusive of depreciation and amortization) | 0 | ||
Parent | |||
Condensed Income Statements Captions [Line Items] | |||
Services net sales | 0 | 0 | |
Products net sales | 0 | 0 | |
Total net sales | 0 | 0 | |
Services cost of sales (exclusive of depreciation and amortization) | 0 | 0 | |
Products cost of sales (exclusive of depreciation and amortization) | 0 | 0 | |
Total cost of sales | 0 | 0 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 0 | 0 | |
Restructuring, impairment and other charges-net | 0 | 0 | |
Depreciation and amortization | 0 | 0 | |
Income from operations | 0 | 0 | |
Interest expense (income)-net | 9.2 | 11.3 | |
Intercompany interest (income) expense-net | (6.6) | ||
Investment and other income-net | 0 | 0 | |
Earnings (loss) before income taxes and equity in net income of subsidiaries | (2.6) | (11.3) | |
Income tax expense | (0.8) | (4.7) | |
Earnings (loss) before equity in net income of subsidiaries | (1.8) | (6.6) | |
Equity in net income of subsidiaries | 9.5 | 15.9 | |
Net earnings | 7.7 | 9.3 | |
Comprehensive income | 8.9 | 9.8 | |
Parent | R.R. Donnelley Affiliates | |||
Condensed Income Statements Captions [Line Items] | |||
Services cost of sales (exclusive of depreciation and amortization) | 0 | ||
Products cost of sales (exclusive of depreciation and amortization) | 0 | ||
Guarantor Subsidiaries | |||
Condensed Income Statements Captions [Line Items] | |||
Services net sales | 128.7 | 128.6 | |
Products net sales | 85.9 | 104.3 | |
Total net sales | 214.6 | 232.9 | |
Services cost of sales (exclusive of depreciation and amortization) | 67.5 | 61.3 | |
Products cost of sales (exclusive of depreciation and amortization) | 65.1 | 57 | |
Total cost of sales | 132.6 | 146.4 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 55.3 | 48.4 | |
Restructuring, impairment and other charges-net | 0.8 | 3.1 | |
Depreciation and amortization | 9 | 8.8 | |
Income from operations | 16.9 | 26.2 | |
Interest expense (income)-net | (0.2) | (0.2) | |
Intercompany interest (income) expense-net | 6.6 | ||
Investment and other income-net | (0.8) | (0.8) | |
Earnings (loss) before income taxes and equity in net income of subsidiaries | 11.3 | 27.2 | |
Income tax expense | 3.5 | 11.4 | |
Earnings (loss) before equity in net income of subsidiaries | 7.8 | 15.8 | |
Equity in net income of subsidiaries | 1.7 | 0.1 | |
Net earnings | 9.5 | 15.9 | |
Comprehensive income | 10.8 | 16.4 | |
Guarantor Subsidiaries | R.R. Donnelley Affiliates | |||
Condensed Income Statements Captions [Line Items] | |||
Services cost of sales (exclusive of depreciation and amortization) | 9.4 | ||
Products cost of sales (exclusive of depreciation and amortization) | 18.7 | ||
Non-guarantor Subsidiaries | |||
Condensed Income Statements Captions [Line Items] | |||
Services net sales | 32.1 | 27 | |
Products net sales | 10.6 | 10.3 | |
Total net sales | 42.7 | 37.3 | |
Services cost of sales (exclusive of depreciation and amortization) | 19.6 | 17.9 | |
Products cost of sales (exclusive of depreciation and amortization) | 8.5 | 7.4 | |
Total cost of sales | 28.1 | 25.9 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 10.8 | 9.1 | |
Restructuring, impairment and other charges-net | (0.1) | 0.7 | |
Depreciation and amortization | 1.4 | 1.4 | |
Income from operations | 2.5 | 0.2 | |
Interest expense (income)-net | 0 | 0 | |
Intercompany interest (income) expense-net | 0 | ||
Investment and other income-net | 0 | 0 | |
Earnings (loss) before income taxes and equity in net income of subsidiaries | 2.5 | 0.2 | |
Income tax expense | 0.8 | 0.1 | |
Earnings (loss) before equity in net income of subsidiaries | 1.7 | 0.1 | |
Equity in net income of subsidiaries | 0 | 0 | |
Net earnings | 1.7 | 0.1 | |
Comprehensive income | $ 2.4 | 0.2 | |
Non-guarantor Subsidiaries | R.R. Donnelley Affiliates | |||
Condensed Income Statements Captions [Line Items] | |||
Services cost of sales (exclusive of depreciation and amortization) | 0.5 | ||
Products cost of sales (exclusive of depreciation and amortization) | $ 0.1 | ||
[1] | Beginning in the quarter ended June 30, 2017, LSC Communications, Inc. (“LSC”) no longer qualified as a related party, therefore the amounts disclosed related to LSC are only presented for the three months ended March 31, 2017. 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 only presented for the three months ended March 31, 2017. |
Guarantor Financial Informati78
Guarantor Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | |||||
Cash and cash equivalents | $ 12.1 | $ 52 | $ 12.3 | $ 36.2 | |
Receivables, less allowances | 239 | $ 174.1 | 165.2 | ||
Intercompany receivables | 0 | 0 | |||
Intercompany short-term note receivable-net | 0 | 0 | |||
Inventories | 18.5 | 12.7 | 23.3 | ||
Prepaid expenses and other current assets | 28.2 | 29.6 | |||
Total current assets | 297.8 | 270.1 | |||
Property, plant and equipment-net | 33.1 | 34.7 | |||
Goodwill | 447.3 | 447.4 | |||
Other intangible assets-net | 36.5 | 39.9 | |||
Software-net | 41.8 | 41.1 | |||
Deferred income taxes | 21 | 21.7 | 22.2 | ||
Intercompany long-term note receivable, net | 0 | ||||
Other noncurrent assets | 37.7 | 38.1 | |||
Investments in consolidated subsidiaries | 0 | 0 | |||
Total assets | 915.2 | 891.3 | 893.5 | 1,024.6 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable | 87.7 | 67.8 | |||
Intercompany payables | 0 | 0 | |||
Intercompany short-term note payable-net | 0 | 0 | |||
Accrued liabilities | 91.5 | 116.1 | 119.2 | ||
Total current liabilities | 179.2 | 187 | |||
Long-term debt (Note 14) | 478.8 | 458.3 | |||
Intercompany long-term note payable, net | 0 | ||||
Deferred compensation liabilities | 21.8 | 22.8 | |||
Pension and other postretirement benefits plan liabilities | 51 | 52.5 | |||
Other noncurrent liabilities | 22.8 | 23.5 | |||
Total liabilities | 753.6 | 744.1 | |||
Total equity | 161.6 | 149.4 | 124.5 | 111.1 | |
Total liabilities and equity | 915.2 | $ 891.3 | 893.5 | ||
Eliminations | |||||
ASSETS | |||||
Cash and cash equivalents | 0 | 0 | (17.2) | (2.4) | |
Receivables, less allowances | 0 | 0 | |||
Intercompany receivables | (117.6) | (146.4) | |||
Intercompany short-term note receivable-net | (32) | (30) | |||
Inventories | 0 | 0 | |||
Prepaid expenses and other current assets | (24.2) | (25.1) | |||
Total current assets | (173.8) | (201.5) | |||
Property, plant and equipment-net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Other intangible assets-net | 0 | 0 | |||
Software-net | 0 | 0 | |||
Deferred income taxes | (23.8) | (21.7) | |||
Intercompany long-term note receivable, net | (376) | ||||
Other noncurrent assets | 0 | 0 | |||
Investments in consolidated subsidiaries | (452.4) | (813.6) | |||
Total assets | (1,026) | (1,036.8) | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable | 0 | 0 | |||
Intercompany payables | (117.6) | (146.4) | |||
Intercompany short-term note payable-net | (32) | (30) | |||
Accrued liabilities | (24.2) | (25.1) | |||
Total current liabilities | (173.8) | (201.5) | |||
Long-term debt (Note 14) | 0 | 0 | |||
Intercompany long-term note payable, net | (376) | ||||
Deferred compensation liabilities | 0 | 0 | |||
Pension and other postretirement benefits plan liabilities | 0 | 0 | |||
Other noncurrent liabilities | (23.8) | (21.7) | |||
Total liabilities | (573.6) | (223.2) | |||
Total equity | (452.4) | (813.6) | |||
Total liabilities and equity | (1,026) | (1,036.8) | |||
Parent | |||||
ASSETS | |||||
Cash and cash equivalents | 0 | 8.3 | 0 | 0 | |
Receivables, less allowances | 0 | 0 | |||
Intercompany receivables | 0 | 0 | |||
Intercompany short-term note receivable-net | 0 | 0 | |||
Inventories | 0 | 0 | |||
Prepaid expenses and other current assets | 34.5 | 37.1 | |||
Total current assets | 34.5 | 45.4 | |||
Property, plant and equipment-net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Other intangible assets-net | 0 | 0 | |||
Software-net | 0 | 0 | |||
Deferred income taxes | 0.4 | 0 | |||
Intercompany long-term note receivable, net | 376 | ||||
Other noncurrent assets | 3.2 | 3.4 | |||
Investments in consolidated subsidiaries | 366.2 | 728.4 | |||
Total assets | 780.3 | 777.2 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable | 0 | 0 | |||
Intercompany payables | 107.9 | 139.5 | |||
Intercompany short-term note payable-net | 32 | 30 | |||
Accrued liabilities | 0 | 0 | |||
Total current liabilities | 139.9 | 169.5 | |||
Long-term debt (Note 14) | 478.8 | 458.3 | |||
Intercompany long-term note payable, net | 0 | ||||
Deferred compensation liabilities | 0 | 0 | |||
Pension and other postretirement benefits plan liabilities | 0 | 0 | |||
Other noncurrent liabilities | 0 | 0 | |||
Total liabilities | 618.7 | 627.8 | |||
Total equity | 161.6 | 149.4 | |||
Total liabilities and equity | 780.3 | 777.2 | |||
Guarantor Subsidiaries | |||||
ASSETS | |||||
Cash and cash equivalents | 3.5 | 27.9 | 19.2 | 21.8 | |
Receivables, less allowances | 195.7 | 131.3 | |||
Intercompany receivables | 117.6 | 146.4 | |||
Intercompany short-term note receivable-net | 0 | 0 | |||
Inventories | 13.9 | 21.3 | |||
Prepaid expenses and other current assets | 14.4 | 14.8 | |||
Total current assets | 345.1 | 341.7 | |||
Property, plant and equipment-net | 29.9 | 31.2 | |||
Goodwill | 429.2 | 429.2 | |||
Other intangible assets-net | 29.6 | 32.4 | |||
Software-net | 41.4 | 40.6 | |||
Deferred income taxes | 40 | 40.5 | |||
Intercompany long-term note receivable, net | 0 | ||||
Other noncurrent assets | 29.7 | 30 | |||
Investments in consolidated subsidiaries | 86.2 | 85.2 | |||
Total assets | 1,031.1 | 1,030.8 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable | 73.1 | 57.9 | |||
Intercompany payables | 0 | 0 | |||
Intercompany short-term note payable-net | 0 | 0 | |||
Accrued liabilities | 99.8 | 127.6 | |||
Total current liabilities | 172.9 | 185.5 | |||
Long-term debt (Note 14) | 0 | 0 | |||
Intercompany long-term note payable, net | 376 | ||||
Deferred compensation liabilities | 21.8 | 22.8 | |||
Pension and other postretirement benefits plan liabilities | 49.9 | 51.3 | |||
Other noncurrent liabilities | 44.3 | 42.8 | |||
Total liabilities | 664.9 | 302.4 | |||
Total equity | 366.2 | 728.4 | |||
Total liabilities and equity | 1,031.1 | 1,030.8 | |||
Non-guarantor Subsidiaries | |||||
ASSETS | |||||
Cash and cash equivalents | 8.6 | 15.8 | $ 10.3 | $ 16.8 | |
Receivables, less allowances | 43.3 | 33.9 | |||
Intercompany receivables | 0 | 0 | |||
Intercompany short-term note receivable-net | 32 | 30 | |||
Inventories | 4.6 | 2 | |||
Prepaid expenses and other current assets | 3.5 | 2.8 | |||
Total current assets | 92 | 84.5 | |||
Property, plant and equipment-net | 3.2 | 3.5 | |||
Goodwill | 18.1 | 18.2 | |||
Other intangible assets-net | 6.9 | 7.5 | |||
Software-net | 0.4 | 0.5 | |||
Deferred income taxes | 4.4 | 3.4 | |||
Intercompany long-term note receivable, net | 0 | ||||
Other noncurrent assets | 4.8 | 4.7 | |||
Investments in consolidated subsidiaries | 0 | 0 | |||
Total assets | 129.8 | 122.3 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable | 14.6 | 9.9 | |||
Intercompany payables | 9.7 | 6.9 | |||
Intercompany short-term note payable-net | 0 | 0 | |||
Accrued liabilities | 15.9 | 16.7 | |||
Total current liabilities | 40.2 | 33.5 | |||
Long-term debt (Note 14) | 0 | 0 | |||
Intercompany long-term note payable, net | 0 | ||||
Deferred compensation liabilities | 0 | 0 | |||
Pension and other postretirement benefits plan liabilities | 1.1 | 1.2 | |||
Other noncurrent liabilities | 2.3 | 2.4 | |||
Total liabilities | 43.6 | 37.1 | |||
Total equity | 86.2 | 85.2 | |||
Total liabilities and equity | $ 129.8 | $ 122.3 |
Guarantor Financial Informati79
Guarantor Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | $ (53.6) | $ (38.2) |
INVESTING ACTIVITIES | ||
Capital expenditures | (6.4) | (4.3) |
Intercompany note receivable, net | 0 | |
Purchase of investment | 0 | (3.4) |
Other investing activities | 0 | 0.2 |
Net cash used in investing activities | (6.4) | (7.5) |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 88 | 57 |
Payments on revolving facility borrowings | (68) | (37) |
Intercompany note payable, net | 0 | |
Proceeds from issuance of common stock | 1.2 | 0 |
Treasury stock repurchases | (0.8) | 0 |
Debt issuance costs | 0 | (1.5) |
Intercompany note payable (receivable) | 0 | |
Net transfers related to the Separation | 0 | 3.1 |
Net cash provided by financing activities | 20.4 | 21.6 |
Effect of exchange rate on cash and cash equivalents | (0.3) | 0.2 |
Net decrease in cash and cash equivalents | (39.9) | (23.9) |
Cash and cash equivalents at beginning of year | 52 | 36.2 |
Cash and cash equivalents at end of period | 12.1 | 12.3 |
Supplemental non-cash disclosure: | ||
Intercompany debt allocation | 0 | |
Eliminations | ||
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | 0 | (14.8) |
INVESTING ACTIVITIES | ||
Capital expenditures | 0 | 0 |
Intercompany note receivable, net | 2 | |
Purchase of investment | 0 | |
Other investing activities | 0 | |
Net cash used in investing activities | 2 | 0 |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 0 | 0 |
Payments on revolving facility borrowings | 0 | 0 |
Intercompany note payable, net | (2) | |
Proceeds from issuance of common stock | 0 | |
Treasury stock repurchases | 0 | |
Debt issuance costs | 0 | |
Intercompany note payable (receivable) | 0 | |
Net transfers related to the Separation | 0 | |
Net cash provided by financing activities | (2) | 0 |
Effect of exchange rate on cash and cash equivalents | 0 | 0 |
Net decrease in cash and cash equivalents | 0 | (14.8) |
Cash and cash equivalents at beginning of year | 0 | (2.4) |
Cash and cash equivalents at end of period | 0 | (17.2) |
Supplemental non-cash disclosure: | ||
Intercompany debt allocation | 0 | |
Parent | ||
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | (30.7) | (27.3) |
INVESTING ACTIVITIES | ||
Capital expenditures | 0 | 0 |
Intercompany note receivable, net | 0 | |
Purchase of investment | 0 | |
Other investing activities | 0 | |
Net cash used in investing activities | 0 | 0 |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 88 | 57 |
Payments on revolving facility borrowings | (68) | (37) |
Intercompany note payable, net | 2 | |
Proceeds from issuance of common stock | 1.2 | |
Treasury stock repurchases | (0.8) | |
Debt issuance costs | (1.5) | |
Intercompany note payable (receivable) | 5.7 | |
Net transfers related to the Separation | 3.1 | |
Net cash provided by financing activities | 22.4 | 27.3 |
Effect of exchange rate on cash and cash equivalents | 0 | 0 |
Net decrease in cash and cash equivalents | (8.3) | 0 |
Cash and cash equivalents at beginning of year | 8.3 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Supplemental non-cash disclosure: | ||
Intercompany debt allocation | (376) | |
Guarantor Subsidiaries | ||
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | (18.1) | 4.5 |
INVESTING ACTIVITIES | ||
Capital expenditures | (6.3) | (3.9) |
Intercompany note receivable, net | 0 | |
Purchase of investment | (3.4) | |
Other investing activities | 0.2 | |
Net cash used in investing activities | (6.3) | (7.1) |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 0 | 0 |
Payments on revolving facility borrowings | 0 | 0 |
Intercompany note payable, net | 0 | |
Proceeds from issuance of common stock | 0 | |
Treasury stock repurchases | 0 | |
Debt issuance costs | 0 | |
Intercompany note payable (receivable) | 0 | |
Net transfers related to the Separation | 0 | |
Net cash provided by financing activities | 0 | 0 |
Effect of exchange rate on cash and cash equivalents | 0 | 0 |
Net decrease in cash and cash equivalents | (24.4) | (2.6) |
Cash and cash equivalents at beginning of year | 27.9 | 21.8 |
Cash and cash equivalents at end of period | 3.5 | 19.2 |
Supplemental non-cash disclosure: | ||
Intercompany debt allocation | 376 | |
Non-guarantor Subsidiaries | ||
OPERATING ACTIVITIES | ||
Net cash (used in) provided by operating activities | (4.8) | (0.6) |
INVESTING ACTIVITIES | ||
Capital expenditures | (0.1) | (0.4) |
Intercompany note receivable, net | (2) | |
Purchase of investment | 0 | |
Other investing activities | 0 | |
Net cash used in investing activities | (2.1) | (0.4) |
FINANCING ACTIVITIES | ||
Revolving facility borrowings | 0 | 0 |
Payments on revolving facility borrowings | 0 | 0 |
Intercompany note payable, net | 0 | |
Proceeds from issuance of common stock | 0 | |
Treasury stock repurchases | 0 | |
Debt issuance costs | 0 | |
Intercompany note payable (receivable) | (5.7) | |
Net transfers related to the Separation | 0 | |
Net cash provided by financing activities | 0 | (5.7) |
Effect of exchange rate on cash and cash equivalents | (0.3) | 0.2 |
Net decrease in cash and cash equivalents | (7.2) | (6.5) |
Cash and cash equivalents at beginning of year | 15.8 | 16.8 |
Cash and cash equivalents at end of period | 8.6 | $ 10.3 |
Supplemental non-cash disclosure: | ||
Intercompany debt allocation | $ 0 |