Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | LKSD | |
Entity Registrant Name | LSC Communications, Inc. | |
Entity Central Index Key | 1,669,812 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,941,977 |
CONDENSED CONSOLIDATED AND COMB
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 89 | $ 95 |
Receivables, less allowances for doubtful accounts of $10 in 2017 (2016: $10) | 627 | 667 |
Inventories (Note 3) | 199 | 193 |
Prepaid expenses and other current assets | 21 | 21 |
Total current assets | 936 | 976 |
Property, plant and equipment-net (Note 4) | 595 | 608 |
Goodwill (Note 5) | 87 | 84 |
Other intangible assets-net (Note 5) | 127 | 131 |
Deferred income taxes | 53 | 57 |
Other noncurrent assets | 94 | 96 |
Total assets | 1,892 | 1,952 |
LIABILITIES | ||
Accounts payable | 283 | 294 |
Accrued liabilities | 235 | 237 |
Short-term and current portion of long-term debt (Note 14) | 15 | 52 |
Total current liabilities | 533 | 583 |
Long-term debt (Note 14) | 729 | 742 |
Pension liabilities | 263 | 279 |
Deferred income taxes | 2 | 2 |
Other noncurrent liabilities | 102 | 106 |
Total liabilities | 1,629 | 1,712 |
Commitments and Contingencies (Note 13) | ||
EQUITY (Note 9) | ||
Common stock, $0.01 par value Authorized: 65,000,000 shares; Issued: 33,472,273 shares in 2017 (2016: 32,449,669) | 0 | 0 |
Additional paid-in-capital | 791 | 770 |
(Accumulated deficit) retained earnings | (8) | 1 |
Accumulated other comprehensive loss | (519) | (531) |
Treasury stock, at cost: 34,727 shares in 2017 | (1) | 0 |
Total equity | 263 | 240 |
Total liabilities and equity | $ 1,892 | $ 1,952 |
CONDENSED CONSOLIDATED AND COM3
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 10 | $ 10 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, Authorized | 65,000,000 | 65,000,000 |
Common stock, Issued | 33,472,273 | 32,449,669 |
Treasury stock, shares | 34,727 |
CONDENSED CONSOLIDATED AND COM4
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Net sales | $ 821 | $ 880 |
Cost of sales | 692 | 722 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 65 | 62 |
Restructuring, impairment and other charges-net (Note 6) | 6 | 3 |
Depreciation and amortization | 40 | 46 |
Income from operations | 18 | 47 |
Interest expense | 17 | 0 |
Income before income taxes | 1 | 47 |
Income tax expense | 2 | 16 |
Net (loss) income | $ (1) | $ 31 |
Net (loss) earnings per common share (Note 10): | ||
Basic net (loss) earnings per share | $ (0.02) | $ 0.95 |
Diluted net (loss) earnings per share | (0.02) | 0.95 |
Dividends declared per common share | $ 0.25 | $ 0 |
Weighted average number of common shares outstanding: | ||
Basic | 32.6 | 32.4 |
Diluted | 32.6 | 32.4 |
CONDENSED CONSOLIDATED AND COM5
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net (loss) income | $ (1) | $ 31 |
Other comprehensive income (loss), net of tax (Note 11) | ||
Translation adjustments | 9 | 10 |
Adjustments for net periodic pension plan cost | 3 | (4) |
Other comprehensive income | 12 | 6 |
Comprehensive income | $ 11 | $ 37 |
CONDENSED CONSOLIDATED AND COM6
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows from Operating Activities | ||
Net (loss) income | $ (1) | $ 31 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 40 | 46 |
Provision for doubtful accounts receivable | 1 | 1 |
Share-based compensation | 3 | 1 |
Deferred income taxes | 1 | (8) |
Other | 1 | (1) |
Changes in operating assets and liabilities - net of acquisitions: | ||
Accounts receivable - net | 40 | 45 |
Inventories | (4) | (20) |
Prepaid expenses and other current assets | (1) | (3) |
Accounts payable | 3 | (58) |
Income taxes payable and receivable | (1) | 3 |
Accrued liabilities and other | (18) | (23) |
Net cash provided by operating activities | 64 | 14 |
Cash Flows from Investing Activities | ||
Capital expenditures | (21) | (12) |
Acquisitions of businesses, net of cash acquired | (4) | 0 |
Proceeds from sales of other assets | 0 | 1 |
Net cash used in investing activities | (25) | (11) |
Cash Flows from Financing Activities | ||
Payments of current maturities and long-term debt | (51) | (1) |
Proceeds from issuance of common stock | 18 | 0 |
Dividends paid | (8) | 0 |
Payments to RRD - net | (7) | 0 |
Net transfers to Parent and affiliates | 0 | (21) |
Net cash used in financing activities | (48) | (22) |
Effect of exchange rate on cash and cash equivalents | 3 | 1 |
Net decrease in cash and cash equivalents | (6) | (18) |
Cash and cash equivalents at beginning of year | 95 | 95 |
Cash and cash equivalents at end of period | 89 | 77 |
Supplemental non-cash disclosure: | ||
Assumption of warehousing equipment related to customer contract | $ 0 | $ 9 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Overview and Basis of Presentation | Note 1. Overview and Basis of Presentation Description of Business and Separation The principal business of LSC Communications, Inc., a Delaware corporation, and its direct or indirect wholly-owned subsidiaries (“LSC Communications,” “the Company,” “we,” “our” and “us”) is to offer a broad scope of traditional and digital print, print-related services and office products. The Company serves the needs of publishers, merchandisers and retailers worldwide with a service offering that includes e-services, warehousing and fulfillment and supply chain management. The Company utilizes a broad portfolio of technology capabilities coupled with consultative attention to clients' needs to increase speed to market, reduce costs, provide postal savings to customers and improve efficiencies. On October 1, 2016 (the “separation date”), R. R. Donnelley & Sons Company (“RRD” or the “Parent”) completed the previously announced separation (the “separation”) into three separate independent publicly-traded companies: (i) its publishing and retail-centric print services and office products business (“LSC Communications”); (ii) its financial communications services business (“Donnelley Financial Solutions, Inc.” or “Donnelley Financial”) and (iii) a global, customized multichannel communications management company, which is the business of RRD after the separation. To effect the separation, RRD undertook a series of transactions to separate net assets and legal entities. RRD completed the distribution (the “distribution”) of 80.75%, of the outstanding common stock of LSC Communications and Donnelley Financial to RRD shareholders on October 1, 2016. RRD retained a 19.25% ownership stake in both LSC Communications and Donnelley Financial. On October 1, 2016, RRD shareholders of record as of the close of business on September 23, 2016 received one share of LSC Communications common stock and one share of Donnelley Financial common stock for every eight shares of RRD common stock held as of the record date. In March 2017, RRD completed the sale of 6.2 million shares of LSC Communications common stock, representing its entire 19.25% retained ownership . In connection with the over-allotment option granted to the underwriters as part of the secondary sale by RRD, LSC Communications also sold 0.9 million shares of common stock, receiving proceeds of $18 million, which were used for general corporate purposes. In connection with the separation, LSC Communications, RRD and Donnelley Financial entered into commercial arrangements, transition services agreements and various other agreements related to the separation that remain in effect. Final copies of such agreements are filed as exhibits to this quarterly report on Form 10-Q. Basis of Presentation The accompanying condensed consolidated and combined financial statements reflect the consolidated balance sheets and results of operations of the Company as an independent, publicly traded company for the period after the separation, and the condensed combined balance sheets and results of operations of the Company as a combined reporting entity of RRD for the periods prior to the separation. The condensed consolidated and combined financial statements include the balance sheets, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). These unaudited condensed consolidated and combined interim financial statements include estimates and assumptions of management that affect the amounts reported in the condensed consolidated and combined financial statements. Actual results could differ from these estimates. On October 1, 2016, the Company recorded certain separation-related adjustments primarily for certain assets and liabilities that were distributed as part of the separation from RRD. The adjustments primarily related to the assumption of certain pension obligations and plan assets in single employer plans for the Company’s employees and certain former employees and retirees of RRD. Additional separation-related adjustments may be recorded in future periods. LSC Communications generates a portion of its net sales from sales to RRD’s subsidiaries. Additionally, LSC Communications utilizes RRD for freight and logistics when shipping finished goods to its customers, premedia services and printing products. Refer to Note 15, Related Parties Prior to the Separation The condensed combined financial statements were prepared on a stand-alone basis and were derived from RRD’s consolidated financial statements and accounting records. They include certain expenses of RRD which were allocated to LSC Communications for certain corporate functions, including healthcare and pension benefits, information technology, finance, legal, human resources, internal audit, treasury, tax, investor relations and executive oversight. These expenses were allocated to the Company on the basis of direct usage, when available, with the remainder allocated on a pro rata basis by revenue, employee headcount, or other measures. The Company considered the allocation methodologies and results to be reasonable for all periods presented; however, these allocations may not be indicative of the actual expenses that LSC Communications would have incurred as an independent public company or the costs it may incur in the future. The income tax amounts in these combined financial statements were calculated based on a separate income tax return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions. All intercompany transactions and accounts have been eliminated. All intracompany transactions between LSC Communications, RRD and Donnelley Financial are considered to be effectively settled in the condensed consolidated and combined financial statements at the time the transaction is recorded. The total net effect of the settlement of these intracompany transactions is reflected in the condensed combined statement of cash flows as a financing activity. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Note 2. Business Combinations 2017 Acquisition On March 1, 2017, the Company acquired HudsonYards Studios (“HudsonYards”), a leading digital and print premedia production company that provides high-quality creative retouching, computer-generated imagery, mechanical creation, press-ready file preparation, and interactive production services. The acquisition enhances the Company’s digital and premedia capabilities. The purchase price for HudsonYards was $2 million, of which $1 million was recorded in goodwill. For the three months ended March 31, 2017, the Company recorded a de minimis amount of acquisition-related expenses associated with completed and contemplated acquisitions within selling, general and administrative expenses in the condensed consolidated and combined results of operations. 2016 Acquisition On December 2, 2016, the Company acquired Continuum Management Company, LLC (“Continuum”), a print procurement and management business. The acquisition enhanced the Company’s print management’s capabilities. The Company paid $7 million in cash in 2016. An additional $2 million was paid during the three months ended March 31, 2017 as part of a final working capital adjustment for a total purchase price of $9 million, of which $5 million was recorded in goodwill. There were no acquisition-related expenses during the three months ended March 31, 2016. Pro forma results The following unaudited pro forma financial information for the three months ended March 31, 2017 and 2016 presents the condensed consolidated and combined statements results of operations of the Company and the acquisitions described above, as if the acquisitions had occurred as of January 1 of the year prior to the acquisitions. The unaudited pro forma financial information is not intended to represent or be indicative of the Company’s condensed consolidated and combined results of operations that would have been reported had these acquisitions been completed as of the beginning of the period presented and should not be taken as indicative of the Company’s future condensed consolidated results of operations. Three Months Ended March 31, 2017 2016 Net sales $ 822 $ 894 Net (loss) income (1 ) 31 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 and December 31, 2016 were as follows: March 31, December 31, 2017 2016 Raw materials and manufacturing supplies $ 101 $ 100 Work in process 63 58 Finished goods 93 93 LIFO reserve (58 ) (58 ) Total $ 199 $ 193 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 and December 31, 2016 were as follows: March 31, December 31, 2017 2016 Land $ 42 $ 42 Buildings 766 762 Machinery and equipment 4,199 4,173 5,007 4,977 Accumulated depreciation (4,412 ) (4,369 ) Total $ 595 $ 608 During the three months ended March 31, 2017 and 2016, depreciation expense was |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 5. Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill for the three months ended March 31, 2017 were as follows: Office Products Total Net book value as of December 31, 2016 Goodwill $ 852 $ 109 $ 961 Accumulated impairment losses (798 ) (79 ) (877 ) Total 54 30 84 Acquisitions 3 — 3 Net book value as of March 31, 2017 Goodwill 859 109 968 Accumulated impairment losses (802 ) (79 ) (881 ) Total $ 57 $ 30 $ 87 The components of other intangible assets at March 31, 2017 and December 31, 2016 were as follows: March 31, 2017 December 31, 2016 Gross Carrying Accumulated Net Book Gross Carrying Accumulated Net Book Amount Amortization Value Amount Amortization Value Customer relationships $ 205 $ (112 ) $ 93 $ 205 $ (109 ) $ 96 Trade names 5 (3 ) 2 5 (2 ) 3 Total amortizable other intangible assets 210 (115 ) 95 210 (111 ) 99 Indefinite-lived trade names 32 — 32 32 — 32 Total other intangible assets $ 242 $ (115 ) $ 127 $ 242 $ (111 ) $ 131 During the three months ended March 31, 2017 and 2016, amortization expense for other intangible assets was $4 million and $5 million, respectively. The following table outlines the estimated annual amortization expense related to other intangible assets as of March 31, 2017: For the year ending December 31, Amount 2017 $ 16 2018 11 2019 10 2020 10 2021 9 2022 and thereafter 43 Total $ 99 |
Restructuring, Impairment and O
Restructuring, Impairment and Other Charges | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Restructuring, Impairment and Other Charges | Note 6. Restructuring, Impairment and Other Charges For the three months ended March 31, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges: Three Months Ended March 31, 2017 Employee Terminations Other Restructuring Charges Total Restructuring Charges Impairment Other Charges Total $ 3 $ 1 $ 4 $ — $ 1 $ 5 Office Products 1 — 1 — — 1 Total $ 4 $ 1 $ 5 $ — $ 1 $ 6 Three Months Ended March 31, 2016 Employee Terminations Other Restructuring Charges Total Restructuring Charges Impairment Other Charges Total $ — $ 2 $ 2 $ — $ 1 $ 3 Total $ — $ 2 $ 2 $ — $ 1 $ 3 Restructuring and Impairment Charges For the three months ended March 31, 2017, the Company incurred employee-related restructuring charges of $4 million for an aggregate of 198 employees, of whom 161 were terminated as of or prior to March 31, 2017. These charges primarily related to the reorganization of certain business units and corporate functions. For the three months ended March 31, 2016, the Company incurred lease termination and other restructuring charges of $2 million. The Company also recorded de minimis amounts for employee terminations and net impairment charges for the three months ended March 31, 2016. Other Charges For the three months ended March 31, 2017, the Company recorded other charges of $1 million for multi-employer pension plan withdrawal obligations unrelated to facility closures. The total liability for the withdrawal obligations associated with the Company’s decision to withdraw from certain multi-employer pension plans included in accrued liabilities and other noncurrent liabilities are $6 million and $39 million, respectively, at March 31, 2017. The Company’s withdrawal liabilities could be affected by the financial stability of other employers participating in such plans and any decisions by those employers to withdraw from such plans in the future. While it is not possible to quantify the potential impact of future events or circumstances, reductions in other employers’ participation in multi-employer pension plans, including certain plans from which the Company has previously withdrawn, could have a material effect on the Company’s previously estimated withdrawal liabilities and condensed consolidated and combined balance sheets, results of operations or cash flows. For the three months ended March 31, 2016, the Company recorded other charges of $1 million for multi-employer pension plan withdrawal obligations unrelated to facility closures. Restructuring Reserve The restructuring reserve as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017, were as follows: December 31, 2016 Restructuring Charges Foreign Exchange and Other Cash Paid March 31, 2017 Employee terminations $ 8 $ 4 $ — $ (2 ) $ 10 Multi-employer pension plan withdrawal obligations 18 — — (1 ) 17 Lease terminations and other 2 1 — (1 ) 2 Total $ 28 $ 5 $ — $ (4 ) $ 29 The current portion of restructuring reserves of $15 million at March 31, 2017 was included in accrued liabilities, while the long-term portion of $14 million, which primarily related to multi-employer pension plan withdrawal obligations related to facility closures and lease termination costs, was included in other noncurrent liabilities at March 31, 2017. The Company anticipates that payments associated with the employee terminations reflected in the above table will be substantially completed by March 2018. Payments on all of the Company’s multi-employer pension plan withdrawal obligations are scheduled to be completed by 2034. Changes based on uncertainties in these estimated withdrawal obligations could affect the ultimate charges related to multi-employer pension plan withdrawals. The restructuring liabilities classified as “lease terminations and other” consisted of lease terminations and other facility closing costs. Payments on certain of the lease obligations are scheduled to continue until 2018. 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, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 7. Retirement Plans The Company is the sole sponsor of certain defined benefit pension plans, which have been reflected in the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016. At the separation date, the Company assumed and recorded certain pension obligations and plan assets in single employer plans for the Company’s employees and certain former employees and retirees. The Company recorded a net benefit plan obligation of $358 million as of October 1, 2016 related to these plans. Additionally, the Company’s United Kingdom pension plan was transferred to RRD at the separation date, and as a result, the Company recorded a reduction in its net benefit plan assets of $7 million as of October 1, 2016. The components of the estimated net pension benefits plan income for the three months ended March 31, 2017 and 2016 are disclosed in the table below. Amounts shown for the three months ended March 31, 2017 include pension income for the Qualified and Non-Qualified plans, certain plans in Mexico and from the acquisitions of Esselte Corporation and Courier. Amounts shown for the three months ended March 31, 2016 include pension income for certain plans in the United Kingdom and Mexico and from the acquisitions of Esselte Corporation and Courier. Prior to the separation, certain employees of the Company participated in certain pension and postretirement healthcare plans sponsored by RRD. For RRD-sponsored defined benefit and post-employment plans, the Company recorded net pension and postretirement income of $10 million for the three months ended March 31, 2016 in addition to the amounts disclosed below. Three Months Ended March 31, 2017 2016 Qualified Non-Qualified & International Qualified Non-Qualified & International Interest cost $ 22 $ 1 $ 2 $ 2 Expected return on plan assets (38 ) — (3 ) (3 ) Amortization, net 4 — — — Net periodic benefit income $ (12 ) $ 1 $ (1 ) $ (1 ) |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Share Based Compensation [Abstract] | |
Share-Based Compensation | Note 8. Share-Based Compensation Prior to the separation, RRD maintained an incentive stock program for the benefit of its officers, directors, and certain employees, including the Company’s employees. A portion of the Company’s employees have participated in RRD’s incentive stock program which included stock options, restricted stock units (“RSUs”) and performance share units (“PSUs”). Share-based compensation expense included expense attributable to the Company based on the award terms previously granted to the Company’s employees and an allocation of compensation expense associated with RRD’s corporate and shared functional employees. As the share-based compensation plans were RRD’s plans, the amounts were recognized through net parent company investment on the condensed combined balance sheets. In connection with the separation, outstanding RRD stock options, RSUs and PSUs previously issued under RRD’s incentive stock program were adjusted and converted into awards at a participant’s new employer or into a basket of awards of each of the Company, RRD and Donnelley Financial using a formula designed to preserve the intrinsic value and fair value of the awards immediately prior to the separation. In periods after the separation, the Company records share-based compensation expense held by its employees, officers and directors relating to LSC Communications, RRD and Donnelley Financial awards. As the separation date, the outstanding RRD options related to the 2009, 2010, 2011, and 2012 grants were modified and converted into stock options in all three companies at a conversion rate outlined in the separation and distribution agreement. The outstanding shares related to the 2013 and 2014 RRD RSUs were modified and converted into RSUs in all three companies as outlined in the separation and distribution agreement. The outstanding shares related to the 2015 and 2016 RRD RSUs were converted into RSUs in the company that the grantees were employed by at the separation date. Modifications were made to the RRD PSUs so that as of the separation date, the performance period for the 2014 and 2015 PSU grants ended. The applicable performance was measured as of the separation date against revised cumulative free cash flow targets approved by the RRD Board of Directors. The 2014 PSUs converted into RSUs in all three companies in accordance with the separation and distribution agreement. The 2015 PSUs converted into RSUs in the company that the grantees were employed by at the separation date. Total compensation expense related to all share-based compensation plans for the Company’s employees, officers and directors was $3 million for the three months ended March 31, 2017. The Company was allocated share-based compensation expense from RRD of $1 million related to all share-based compensation plans for the three months ended March 31, 2016. Stock Options There were no options granted during the three months ended March 31, 2017 or 2016. A summary of the Company’s stock option activity for LSC Communications, RRD and Donnelley Financial employees, officers and directors as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares Under Option (thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (millions) Outstanding at December 31, 2016 299 $ 25.32 3.3 $ 2 Outstanding at March 31, 2017 299 25.32 3.1 1 Vested and expected to vest at March 31, 2017 299 25.32 3.1 1 Exercisable at March 31, 2017 299 $ 25.32 3.1 $ 1 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on March 31, 2017 and December 31, 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on March 31, 2017 and December 31, 2016. This amount will change in future periods based on the fair market value of LSC Communications stock and the number of options outstanding. Total intrinsic value of options exercised for the three months ended March 31, 2017 was de minimis. There was a de minimis amount of excess tax benefits for the three months ended March 31, 2017. There was no compensation expense related to stock options for the three months ended March 31, 2017. Restricted Stock Units A summary of the Company’s RSU activity for LSC Communications, RRD and Donnelley Financial employees and officers who hold LSC Communications RSUs as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares (thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 652 $ 28.39 Granted 150 26.72 Vested (86 ) 27.22 Nonvested at March 31, 2017 716 $ 28.18 During the three months ended March 31, 2017, 150,290 RSUs were granted to certain executive officers and senior management. The shares are subject to time-based vesting and will cliff vest on March 2, 2020. The total potential payout for the awards is 150,290 shares. The fair value of these awards was determined based on the Company’s stock price on the grant date reduced by the present value of expected dividends through the vesting period. These awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death, permanent disability or retirement of the grantee or change of control of the Company. Compensation expense related to LSC Communications, RRD and Donnelley Financial RSUs held by Company employees, officers and directors was $2 million for the three months ended March 31, 2017. As of March 31, 2017, there was $12 million of unrecognized share-based compensation expense related to approximately 0.7 million RSUs, with a weighted-average grant date fair value of $28.10, that are expected to vest over a weighted average period of 2.1 Restricted Stock Awards A summary of restricted stock award (“RSA”) activity for the Company’s employees related to awards granted after the separation as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares (thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 159 $ 26.26 Nonvested at March 31, 2017 159 $ 26.26 Compensation expense related to RSAs for the three months ended March 31, 2017 was de minimis. As of March 31, 2017, there was $3 million of unrecognized compensation expense related to RSAs, which is expected to be recognized over a weighted average period of 2.5 years. Performance Restricted Stock A summary of performance restricted stock (“PRS”) activity for the Company’s employees related to awards granted after the separation as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares (thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 266 $ 26.26 Granted 45 28.94 Nonvested at March 31, 2017 311 $ 26.65 During the three months ended March 31, 2017, 44,760 shares of PRS were granted to certain executive officers, payable upon the achievement of certain established performance targets. The performance period for the shares is January 1, 2017 to December 31, 2017. In addition to being subject to achievement of the performance target, the shares are also subject to time-based vesting on March 2, 2020. Both the performance-based vesting and the time-based vesting must be met for the PRS to vest. The fair value of these awards was determined on the date of grant based on the Company’s stock price. These awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death, permanent disability or retirement of the grantee or change of control of the Company. Compensation expense for the awards granted during the three months ended March 31, 2017 is being recognized based on an estimated payout of 37,300 shares. Compensation expense for the awards granted during the three months ended December 31, 2016 is being recognized based on an estimated payout of 266,072 shares. Compensation expense related to PRS for the three months ended March 31, 2017 was $1 million. As of March 31, 2017, there was $7 million of unrecognized compensation expense related to PRS, which is expected to be recognized over a weighted average period of 2.6 Performance Share Units A summary of PSU activity for the Company’s employees related to awards granted after the separation as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares (thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 — $ — Granted 29 26.72 Nonvested at March 31, 2017 29 $ 26.72 During the three months ended March 31, 2017, 28,520 PSUs were granted to certain members of senior management, payable upon the achievement of certain established performance targets. The performance period for the shares is January 1, 2017 to December 31, 2017. In addition to being subject to achievement of the performance target, the shares are also subject to time-based vesting on March 2, 2020. Both the performance-based vesting and the time-based vesting must be met for the PSUs to vest. The fair value of these awards was determined based on the Company’s stock price on the grant date reduced by the present value of expected dividends through the vesting period. These awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death, permanent disability or retirement of the grantee or change of control of the Company. Compensation expense for the awards granted during the three months ended March 31, 2017 is being recognized based on an estimated payout of 28,520 shares. Compensation expense related to PSUs for the three months ended March 31, 2017 was de minimis. As of March 31, 2017, there was $1 million of unrecognized compensation expense related to PSUs, which is expected to be recognized over a weighted average period of 2.9 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Equity | Note 9. Equity The Company’s equity as of December 31, 2016 and March 31, 2017 and changes during the three months ended March 31, 2017 were as follows: Total Equity Balance at December 31, 2016 $ 240 Net loss (1 ) Other comprehensive income 12 Share-based compensation 3 Issuance of share-based awards, net of withholdings and other (1 ) Cash dividends paid (8 ) Issuance of common stock 18 Balance at March 31, 2017 $ 263 During the three months ended March 31, 2017, in connection with the over-allotment option granted to the underwriters as part of the secondary sale by RRD, LSC Communications also sold 0.9 million shares of common stock. The Company’s equity as of December 31, 2015 and March 31, 2016 and changes during the three months ended March 31, 2016 were as follows: Total Equity Balance at December 31, 2015 $ 1,277 Net income 31 Net transfers to parent company (27 ) Other comprehensive income 6 Balance at March 31, 2016 $ 1,287 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 10. Earnings Per Share On October 1, 2016, RRD distributed approximately 26.2 million shares of LSC Communications common stock to RRD shareholders and retained 6.2 million shares. In March 2017, RRD completed the sale of its 6.2 million shares of LSC Communications common stock. For the period after the separation, During the three months ended March 31, 2017, in connection with the over-allotment option granted to the underwriters as part of the secondary sale by RRD, LSC Communications also sold 0.9 million shares of common stock. During the three months ended March 31, 2017, no shares of common stock were purchased by the Company; however, shares were withheld for tax liabilities upon vesting of equity awards. The following table shows the calculation of basic and diluted EPS, as well as a reconciliation of basic shares to diluted shares: Three Months Ended March 31, 2017 2016 Net (loss) earnings per common share: Basic $ (0.02 ) $ 0.95 Diluted $ (0.02 ) $ 0.95 Dividends declared per common share $ 0.25 $ — Numerator: Net (loss) income $ (1 ) $ 31 Denominator: Weighted average number of common shares outstanding 32.6 32.4 Dilutive options and awards — — Diluted weighted average number of common shares outstanding 32.6 32.4 |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Comprehensive Income | Note 11. Comprehensive Income The components of other comprehensive income and income tax expense allocated to each component for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 Before Tax Amount Income Tax Expense Net of Tax Amount Translation adjustments $ 9 $ — $ 9 Adjustment for net periodic pension plan cost 4 1 3 Other comprehensive income $ 13 $ 1 $ 12 Three Months Ended March 31, 2016 Before Tax Amount Income Tax Expense Net of Tax Amount Translation adjustments $ 10 $ — $ 10 Adjustment for net periodic pension plan cost — 4 (4 ) Other comprehensive income $ 10 $ 4 $ 6 During the three months ended March 31, 2016, translation adjustments and income tax expense on pension plan cost were adjusted to reflect previously recorded deferred taxes at their historical exchange rates. Accumulated other comprehensive loss by component as of December 31, 2016 and March 31, 2017 and changes during the three months ended March 31, 2017 were as follows: Pension Plan Cost Translation Adjustments Total Balance at December 31, 2016 $ (462 ) $ (69 ) $ (531 ) Other comprehensive income before reclassifications — 9 9 Amounts reclassified from accumulated other comprehensive loss 3 — 3 Net change in accumulated other comprehensive loss 3 9 12 Balance at March 31, 2017 $ (459 ) $ (60 ) $ (519 ) Accumulated other comprehensive loss by component as of December 31, 2015 and March 31, 2016 and changes during the three months ended March 31, 2016, were as follows: Pension Plan Cost Translation Adjustments Total Balance at December 31, 2015 $ (46 ) $ (159 ) $ (205 ) Other comprehensive income before reclassifications — 10 10 Amounts reclassified from accumulated other comprehensive loss (4 ) — (4 ) Net change in accumulated other comprehensive loss (4 ) 10 6 Balance at March 31, 2016 $ (50 ) $ (149 ) $ (199 ) Reclassification from accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, Classification in the Condensed Consolidated & Combined 2017 2016 Statements of Operations Amortization of pension plan cost: Net actuarial loss $ 4 $ — (a) Reclassifications before tax 4 — Income tax expense 1 4 Reclassifications, net of tax $ 3 $ (4 ) (a) These accumulated other comprehensive income components are included in the calculation of net periodic pension plan (income) expense recognized substantially all in selling, general and administrative expenses in the condensed consolidated and combined results of operations (see Note 7, Retirement Plans |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Note 12. Segment Information The Company’s segment and product and service offerings are summarized below: Print The Print segment produces magazines, catalogs, retail inserts, books, and directories. The segment also provides supply-chain management and certain other print-related services, including mail-list management and sortation, e-book formatting and distribution. The segment has operations in the U.S., Europe and Mexico. The Print segment is divided into the magazines, catalog and retail inserts, book, Europe and directories reporting units. Office Products The Office Products segment manufactures and sells branded and private label products in five core categories: filing products, note-taking products, binder products, forms and envelopes. Corporate Corporate consists of unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, communications, certain facility costs and LIFO inventory provisions. In addition, certain costs and earnings of employee benefit plans, such as pension benefit plan income and share-based compensation, are included in Corporate and not allocated to the operating segments. Prior to the separation, many of these costs were based on allocations from RRD; however, the Company has incurred such costs directly after the separation. 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 with the condensed consolidated and combined financial statements. Net Sales Income (Loss) from Operations Assets of Operations Depreciation and Amortization Capital Expenditures Three months ended March 31, 2017 $ 710 $ 12 $ 1,470 $ 35 $ 20 Office Products 111 9 312 4 — Total operating segments 821 21 1,782 39 20 Corporate — (3 ) 110 1 1 Total operations $ 821 $ 18 $ 1,892 $ 40 $ 21 Net Sales Income from Operations Assets of Operations Depreciation and Amortization Capital Expenditures Three months ended March 31, 2016 $ 752 $ 32 $ 1,583 $ 41 $ 8 Office Products 128 14 334 4 1 Total operating segments 880 46 1,917 45 9 Corporate — 1 25 1 3 Total operations $ 880 $ 47 $ 1,942 $ 46 $ 12 Restructuring, impairment and other charges by segment for the three months ended March 31, 2017 and 2016 are disclosed in Note 6, Restructuring, Impairment and Other Charges. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13. Commitments and Contingencies The Company is subject to laws and regulations relating to the protection of the environment. The Company accrues for expenses associated with environmental remediation obligations when such amounts are probable and can be reasonably estimated. Such accruals are adjusted as new information develops or circumstances change and are generally not discounted. The Company has been designated as a potentially responsible party or has received claims in nine active federal and state Superfund and other multiparty remediation sites. In addition to these sites, the Company may also have the obligation to remediate four other previously and currently owned facilities. At the Superfund sites, the Comprehensive Environmental Response, Compensation and Liability Act provides that the Company’s liability could be joint and several, meaning that the Company could be required to pay an amount in excess of its proportionate share of the remediation costs. The Company’s understanding of the financial strength of other potentially responsible parties at the multiparty sites and of other liable parties at the previously owned facilities has been considered, where appropriate, in the determination of the Company’s estimated liability. The Company established reserves, recorded in accrued liabilities and other noncurrent liabilities, that it believes are adequate to cover its share of the potential costs of remediation at each of the multiparty sites and the previously and currently owned facilities. It is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that the Company may undertake in the future. However, in the opinion of management, compliance with the present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material effect on the Company’s condensed consolidated and combined balance sheets, results of operations and cash flows. 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 condensed consolidated and combined balance sheets, results of operations and cash flows. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 14. Debt The Company’s debt at March 31, 2017 and December 31, 2016 consisted of the following: March 31, 2017 December 31, 2016 Term Loan Facility due September 30, 2022 (a) $ 303 $ 353 8.75% Senior Secured Notes due October 15, 2023 450 450 Capital lease obligations 5 6 Unamortized debt issuance costs (14 ) (15 ) Total debt 744 794 Less: current portion (15 ) (52 ) Long-term debt $ 729 $ 742 (a) The borrowings under the Term Loan Facility are subject to a variable interest rate. As of March 31, 2017 and December 31, 2016, the interest rate was 7.00%. __________________________________ The fair values of the Senior Notes and Term Loan Facility, which were determined using the market approach based upon interest rates available to the Company for borrowings with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. The fair value of the Company’s debt was greater than its book value by approximately $23 million and $22 million at March 31, 2017 and December 31, 2016, respectively. On September 30, 2016, the Company issued $450 million of 8.75% Senior Secured Notes (the “Senior Notes”) due October 15, 2023. Interest on the Senior Notes is due semi-annually on April 15 and October 15, commencing on April 15, 2017. Net proceeds from the offering of the Senior Notes (“the Notes Offering”) were distributed to RRD in the form of a dividend. The Company did not retain any proceeds from the Notes Offering. The Senior Notes were issued pursuant to an indenture where certain wholly-owned domestic subsidiaries of the Company guarantee the Senior Notes (the “Guarantors”). The Senior Notes are fully and unconditionally guaranteed, on a senior secured basis, jointly and severally, 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. The Senior Notes are not guaranteed by the Company’s foreign subsidiaries or unrestricted subsidiaries. The Senior Notes and the related guarantees are secured on a first-priority lien basis by the collateral, subject to certain exceptions and permitted liens. The Indenture governing the Senior 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. On September 30, 2016 the Company entered into a credit agreement (the “Credit Agreement”) which provides for (i) a new senior secured term loan B facility in an aggregate principal amount of $375 million (the “Term Loan Facility”) and (ii) a new senior secured revolving credit facility in an aggregate principal amount of $400 million (the “Revolving Credit Facility,”). The interest rate per annum applicable to the Term Loan Facility is equal to, at the Company’s option, either a base rate plus a margin of 5.00% or LIBOR plus a margin of 6.00%. The LIBOR rate is subject to a “floor” of 1%. The interest rate per annum applicable to the Revolving Credit Facility is equal to a base rate plus a margin ranging from 1.75% to 2.25%, or LIBOR plus a margin ranging from 2.75% to 3.25%, in either case based upon the Consolidated Leverage Ratio of the Company and its restricted subsidiaries. Interest on the Credit Agreement is due at least quarterly and commenced on December 31, 2016. The Term Loan Facility will amortize in quarterly installments of $13 million for the first eight quarters and $11 million for subsequent quarters. The debt issuance costs and original issue discount are being amortized over the life of the facilities using the effective interest method. The Term Loan Facility will mature on September 30, 2022 and the Revolving Credit Facility will mature on September 30, 2021. The proceeds of any collection or other realization of collateral received in connection with the exercise of remedies and any distribution in respect of collateral in any bankruptcy proceeding will be applied first to repay amounts due under the Revolving Credit Facility before the lenders under the Term Loan Facility or the holders of the Senior Notes receive such proceeds. The Credit Agreement is subject to a number of covenants, including, but not limited to, a minimum Interest Coverage Ratio and the Consolidated 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 $50 million in aggregate, though additional dividends may be allowed subject to certain conditions. Each of these covenants is subject to important exceptions and qualifications. The Company used the net proceeds from the Term Loan Facility to fund a cash dividend to RRD in connection with the spin off and to pay fees and expenses related to the spin off from RRD in 2016. The Company intends to use any additional borrowings under the Credit Facilities for general corporate purposes, including the financing of permitted investments. On February 2, 2017, the Company paid in advance the full amount of required amortization payments, $50 million, for the year ended December 31, 2017 for the Term Loan Facility. There were de minimis amounts of interest income during the three months ended March 31, 2017 and 2016. There were no borrowings under the Revolving Credit Facility as of March 31, 2017 and December 31, 2016. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 15: Related Parties In March 2017, RRD completed the sale of 6.2 million shares of LSC Communications common stock, representing its entire 19.25% retained ownership. Prior to the separation, the Company had not historically operated as a stand-alone business. After the separation, the Company has entered into commercial arrangements with RRD. Under the terms of the commercial arrangements, RRD continues to provide, among other things, logistics, premedia, production and sales services to LSC Communications. In addition, LSC Communications continues to provide sales support services to RRD’s Asia and Mexico print and graphics management businesses in order to facilitate the importing of books and related products to the U.S. RRD also provides LSC Communications certain global outsourcing, technical support and other services. Allocations from RRD Prior to the separation, RRD provided LSC Communications certain services, which included, but were not limited to, information technology, finance, legal, human resources, internal audit, treasury, tax, investor relations and executive oversight. RRD charged the Company for these services based on direct usage, when available, with the remainder allocated on a pro rata basis by revenue, headcount, or other measures. These allocations were reflected as follows in the condensed combined financial statements for the three months ended March 31, 2016: Three Months Ended March 31, 2016 Costs of goods sold $ 22 Selling, general and administrative 32 Depreciation and amortization 2 Total allocations from RRD $ 56 The Company considered the expense methodologies and financial results to be reasonable for all periods presented. However, these allocations may not be indicative of the actual expenses that may have been incurred as an independent public company or the costs LSC Communications may incur in the future. After the separation, the Company no longer receives or records allocations from RRD. The Company records transactions with RRD as external arms-length transactions in the Company’s condensed consolidated financial statements. Transactions with RR Donnelley Receivables and Payables As of March 31, 2017, the Company had $55 million and $45 million of trade receivables and payables, respectively, with RRD. In addition, receivables as of March 31, 2017 and December 31, 2016 included a $10 million non-trade receivable owed by RRD that was paid in April 2017. As of December 31, 2016, the Company had $62 million and $56 million of trade receivables and payables, respectively, with RRD. Revenues and Purchases LSC Communications generates a portion of net revenue from sales to RRD’s subsidiaries. Net revenues from related party sales were $32 million and $10 million for the three months ended March 31, 2017 and 2016, respectively. These amounts are included in the condensed consolidated and combined results of operations. LSC Communications utilizes RRD for freight, logistics and premedia services. Included in the condensed consolidated and combined financial statements were costs of sales related to freight, logistics and premedia services purchased from RRD of $51 million and $47 million for the three months ended March 31, 2017 and 2016, respectively. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Pronouncements | Note 16. New Accounting Pronouncements In March 2017, the Financial Standards Accounting Board (“FASB”) issued Accounting Standards Update No. 2017-07 “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”). This ASU requires entities to disaggregate the service cost component from other components of net benefit cost and present it with other employee compensation costs. All other components of net benefit cost will need to be presented elsewhere on the income statement outside of income from operations. Only the service cost component would be eligible for capitalization into inventory. The standard is effective in the first quarter 2018. As a result of the adoption of ASU 2017-07, the Company expects to reclassify approximately $46 million and $45 million related to the years ended December 31, 2017 and 2016, respectively, of net pension income out of income from operations to a line item outside of income from operations, resulting in no net impact to net income. In January 2017, the FASB issued Accounting Standards Update No. 2017-04 “Intangibles – Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The standard eliminates Step 2 of the goodwill impairment test, and instead, recognizes an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value not to exceed the total amount of goodwill allocated. The standard is effective in the first quarter 2020, with early adoption permitted on testing dates after January 1, 2017. The Company is evaluating the impact of ASU 2017-04. In January 2017, the FASB issued Accounting Standards Update No. 2017-01 "Business Combinations (Topic 805): Clarifying the Definition of a Business" (“ASU 2017-01”) in order to clarify the definition of a business as it relates to whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard becomes effective in the first quarter of 2018. The Company plans to adopt the standard in the first quarter of 2018. The impact is not expected to be material. In August 2016, the FASB issued Accounting Standards Update No. 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU2016-15”), which provided guidance on eight specific cash flow classification issues to reduce existing diversity in practice. The standard becomes effective in the first quarter of 2018. Early adoption of ASU 2016-15 is permitted; however the Company plans to adopt the standard in the first quarter of 2018. The Company does not expect a significant impact to presentation on its condensed consolidated and combined statements of cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 “Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory withholding requirements, as well as the classification of share-based payment transactions on the statement of cash flows. The standard became effective in the first quarter of 2017. As early adoption of ASU 2016-09 is permitted, the Company adopted the standard in the fourth quarter of 2016. The election to early adopt ASU 2016-09 requires any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption, to be reflected. The requirements of ASU 2016-09 did not have a material impact to any of the periods presented. In February 2016, the FASB issued Accounting Standards Update No. 2016-02 “Leases (Topic 842) Section A—Leases: Amendments to the FASB Accounting Standards Codification” (“ASU 2016-02”), which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting. For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and direct financing leases. The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted; however the Company plans to adopt the standard in the first quarter of 2019. The Company is evaluating the impact of ASU 2016-02. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which outlines a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 also requires additional quantitative and qualitative disclosures. In August 2015, the FASB issued Accounting Standards Update No. 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date of ASU 2014-09 to January 1, 2018. Early adoption of ASU 2014-09 is permitted in the first quarter of 2017. The Company plans to adopt the standard in the first quarter of 2018. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or a modified retrospective adoption approach, meaning the standard is applied only to the most current period. The Company currently anticipates adopting the standard using the modified retrospective adoption approach. While the Company is continuing to assess all potential impacts of the standard, the Company currently believes the most significant impacts relate to: • Whether the accounting for the revenue of customized products is over time or at a point in time. Currently, the Company’s Print operating segment produces a substantial amount of customized product. Under current revenue recognition guidance, revenue is recognized when the products are completed and shipped to the customer (dependent upon specific shipping terms). The Company is currently evaluating whether, under the new guidance, revenue would be recognized over the time the goods are produced and not necessarily dependent upon shipment to the customer. Should the Company conclude that revenue should be recognized over time, rather than at a point in time under current guidance, this could have a material impact on the timing of revenue recognition and might require significant changes in internal processes and controls. However, the Company anticipates that this would not impact the timing of cash flows, given that invoicing and payment thereof is usually associated with the delivery of product. • The accounting for inventory billed but not yet shipped. Under current guidance, the Company defers revenue for inventory billed but not yet shipped. Under the new standard, in certain situations the Company may be able to recognize revenue for inventory billed but not yet shipped, which could accelerate the timing, but not the total amount, of revenue recognized and would not impact the timing of cash flows, given that invoicing and payment thereof is usually associated with the delivery of product. Due to the complexity of certain of the Company’s contracts, the actual revenue recognition treatment required under the new standard will be dependent on contract specific terms. The Company anticipates it will be able to complete its analysis of the above items, implement any system and process changes that might be necessary and educate the appropriate employees with respect to the new standard in order to effectively adopt the standard beginning in the first quarter of 2018. |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Pro Forma Financial Information | The unaudited pro forma financial information is not intended to represent or be indicative of the Company’s condensed consolidated and combined results of operations that would have been reported had these acquisitions been completed as of the beginning of the period presented and should not be taken as indicative of the Company’s future condensed consolidated results of operations. Three Months Ended March 31, 2017 2016 Net sales $ 822 $ 894 Net (loss) income (1 ) 31 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Components of the Company's Inventories | The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at March 31, 2017 and December 31, 2016 were as follows: March 31, December 31, 2017 2016 Raw materials and manufacturing supplies $ 101 $ 100 Work in process 63 58 Finished goods 93 93 LIFO reserve (58 ) (58 ) Total $ 199 $ 193 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Components of the Company's Property, Plant and Equipment | The components of the Company’s property, plant and equipment at March 31, 2017 and December 31, 2016 were as follows: March 31, December 31, 2017 2016 Land $ 42 $ 42 Buildings 766 762 Machinery and equipment 4,199 4,173 5,007 4,977 Accumulated depreciation (4,412 ) (4,369 ) Total $ 595 $ 608 |
Goodwill and Other Intangible26
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2017 were as follows: Office Products Total Net book value as of December 31, 2016 Goodwill $ 852 $ 109 $ 961 Accumulated impairment losses (798 ) (79 ) (877 ) Total 54 30 84 Acquisitions 3 — 3 Net book value as of March 31, 2017 Goodwill 859 109 968 Accumulated impairment losses (802 ) (79 ) (881 ) Total $ 57 $ 30 $ 87 |
Components of Other Intangible Assets | The components of other intangible assets at March 31, 2017 and December 31, 2016 were as follows: March 31, 2017 December 31, 2016 Gross Carrying Accumulated Net Book Gross Carrying Accumulated Net Book Amount Amortization Value Amount Amortization Value Customer relationships $ 205 $ (112 ) $ 93 $ 205 $ (109 ) $ 96 Trade names 5 (3 ) 2 5 (2 ) 3 Total amortizable other intangible assets 210 (115 ) 95 210 (111 ) 99 Indefinite-lived trade names 32 — 32 32 — 32 Total other intangible assets $ 242 $ (115 ) $ 127 $ 242 $ (111 ) $ 131 |
Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets | The following table outlines the estimated annual amortization expense related to other intangible assets as of March 31, 2017: For the year ending December 31, Amount 2017 $ 16 2018 11 2019 10 2020 10 2021 9 2022 and thereafter 43 Total $ 99 |
Restructuring, Impairment and27
Restructuring, Impairment and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Net Restructuring, Impairment and Other Charges | For the three months ended March 31, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges: Three Months Ended March 31, 2017 Employee Terminations Other Restructuring Charges Total Restructuring Charges Impairment Other Charges Total $ 3 $ 1 $ 4 $ — $ 1 $ 5 Office Products 1 — 1 — — 1 Total $ 4 $ 1 $ 5 $ — $ 1 $ 6 Three Months Ended March 31, 2016 Employee Terminations Other Restructuring Charges Total Restructuring Charges Impairment Other Charges Total $ — $ 2 $ 2 $ — $ 1 $ 3 Total $ — $ 2 $ 2 $ — $ 1 $ 3 |
Schedule of Changes in the Restructuring Reserve | December 31, 2016 Restructuring Charges Foreign Exchange and Other Cash Paid March 31, 2017 Employee terminations $ 8 $ 4 $ — $ (2 ) $ 10 Multi-employer pension plan withdrawal obligations 18 — — (1 ) 17 Lease terminations and other 2 1 — (1 ) 2 Total $ 28 $ 5 $ — $ (4 ) $ 29 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Estimated Net Pension Benefits Plan Income | The components of the estimated net pension benefits plan income for the three months ended March 31, 2017 and 2016 are disclosed in the table below. Amounts shown for the three months ended March 31, 2017 include pension income for the Qualified and Non-Qualified plans, certain plans in Mexico and from the acquisitions of Esselte Corporation and Courier. Amounts shown for the three months ended March 31, 2016 include pension income for certain plans in the United Kingdom and Mexico and from the acquisitions of Esselte Corporation and Courier. Prior to the separation, certain employees of the Company participated in certain pension and postretirement healthcare plans sponsored by RRD. For RRD-sponsored defined benefit and post-employment plans, the Company recorded net pension and postretirement income of $10 million for the three months ended March 31, 2016 in addition to the amounts disclosed below. Three Months Ended March 31, 2017 2016 Qualified Non-Qualified & International Qualified Non-Qualified & International Interest cost $ 22 $ 1 $ 2 $ 2 Expected return on plan assets (38 ) — (3 ) (3 ) Amortization, net 4 — — — Net periodic benefit income $ (12 ) $ 1 $ (1 ) $ (1 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Stock Option Activity | A summary of the Company’s stock option activity for LSC Communications, RRD and Donnelley Financial employees, officers and directors as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares Under Option (thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (millions) Outstanding at December 31, 2016 299 $ 25.32 3.3 $ 2 Outstanding at March 31, 2017 299 25.32 3.1 1 Vested and expected to vest at March 31, 2017 299 25.32 3.1 1 Exercisable at March 31, 2017 299 $ 25.32 3.1 $ 1 |
Summary of Restricted Stock Units Activity | A summary of the Company’s RSU activity for LSC Communications, RRD and Donnelley Financial employees and officers who hold LSC Communications RSUs as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares (thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 652 $ 28.39 Granted 150 26.72 Vested (86 ) 27.22 Nonvested at March 31, 2017 716 $ 28.18 |
Summary of Restricted Stock Award Activity for Employees | Restricted Stock Awards A summary of restricted stock award (“RSA”) activity for the Company’s employees related to awards granted after the separation as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares (thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 159 $ 26.26 Nonvested at March 31, 2017 159 $ 26.26 |
Performance Restricted Stock | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Performance Activity for Employees | A summary of performance restricted stock (“PRS”) activity for the Company’s employees related to awards granted after the separation as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares (thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 266 $ 26.26 Granted 45 28.94 Nonvested at March 31, 2017 311 $ 26.65 |
Performance Share Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Performance Activity for Employees | A summary of PSU activity for the Company’s employees related to awards granted after the separation as of December 31, 2016 and March 31, 2017, and changes during the three months ended March 31, 2017 is presented below. Shares (thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 — $ — Granted 29 26.72 Nonvested at March 31, 2017 29 $ 26.72 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of the Company's Equity Activity | The Company’s equity as of December 31, 2016 and March 31, 2017 and changes during the three months ended March 31, 2017 were as follows: Total Equity Balance at December 31, 2016 $ 240 Net loss (1 ) Other comprehensive income 12 Share-based compensation 3 Issuance of share-based awards, net of withholdings and other (1 ) Cash dividends paid (8 ) Issuance of common stock 18 Balance at March 31, 2017 $ 263 The Company’s equity as of December 31, 2015 and March 31, 2016 and changes during the three months ended March 31, 2016 were as follows: Total Equity Balance at December 31, 2015 $ 1,277 Net income 31 Net transfers to parent company (27 ) Other comprehensive income 6 Balance at March 31, 2016 $ 1,287 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted EPS as Well as Reconciliation of Basic Shares to Diluted Shares | The following table shows the calculation of basic and diluted EPS, as well as a reconciliation of basic shares to diluted shares: Three Months Ended March 31, 2017 2016 Net (loss) earnings per common share: Basic $ (0.02 ) $ 0.95 Diluted $ (0.02 ) $ 0.95 Dividends declared per common share $ 0.25 $ — Numerator: Net (loss) income $ (1 ) $ 31 Denominator: Weighted average number of common shares outstanding 32.6 32.4 Dilutive options and awards — — Diluted weighted average number of common shares outstanding 32.6 32.4 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of Components of Other Comprehensive Income and Income Tax Expense Allocated to Each Component | The components of other comprehensive income and income tax expense allocated to each component for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 Before Tax Amount Income Tax Expense Net of Tax Amount Translation adjustments $ 9 $ — $ 9 Adjustment for net periodic pension plan cost 4 1 3 Other comprehensive income $ 13 $ 1 $ 12 Three Months Ended March 31, 2016 Before Tax Amount Income Tax Expense Net of Tax Amount Translation adjustments $ 10 $ — $ 10 Adjustment for net periodic pension plan cost — 4 (4 ) Other comprehensive income $ 10 $ 4 $ 6 |
Schedule of Changes in Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss by component as of December 31, 2016 and March 31, 2017 and changes during the three months ended March 31, 2017 were as follows: Pension Plan Cost Translation Adjustments Total Balance at December 31, 2016 $ (462 ) $ (69 ) $ (531 ) Other comprehensive income before reclassifications — 9 9 Amounts reclassified from accumulated other comprehensive loss 3 — 3 Net change in accumulated other comprehensive loss 3 9 12 Balance at March 31, 2017 $ (459 ) $ (60 ) $ (519 ) Accumulated other comprehensive loss by component as of December 31, 2015 and March 31, 2016 and changes during the three months ended March 31, 2016, were as follows: Pension Plan Cost Translation Adjustments Total Balance at December 31, 2015 $ (46 ) $ (159 ) $ (205 ) Other comprehensive income before reclassifications — 10 10 Amounts reclassified from accumulated other comprehensive loss (4 ) — (4 ) Net change in accumulated other comprehensive loss (4 ) 10 6 Balance at March 31, 2016 $ (50 ) $ (149 ) $ (199 ) |
Schedule of Reclassification From Accumulated Other Comprehensive Loss | Reclassification from accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, Classification in the Condensed Consolidated & Combined 2017 2016 Statements of Operations Amortization of pension plan cost: Net actuarial loss $ 4 $ — (a) Reclassifications before tax 4 — Income tax expense 1 4 Reclassifications, net of tax $ 3 $ (4 ) (a) These accumulated other comprehensive income components are included in the calculation of net periodic pension plan (income) expense recognized substantially all in selling, general and administrative expenses in the condensed consolidated and combined results of operations (see Note 7, Retirement Plans |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The Company has disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Company’s chief operating decision-maker and is most consistent with the presentation of profitability reported with the condensed consolidated and combined financial statements. Net Sales Income (Loss) from Operations Assets of Operations Depreciation and Amortization Capital Expenditures Three months ended March 31, 2017 $ 710 $ 12 $ 1,470 $ 35 $ 20 Office Products 111 9 312 4 — Total operating segments 821 21 1,782 39 20 Corporate — (3 ) 110 1 1 Total operations $ 821 $ 18 $ 1,892 $ 40 $ 21 Net Sales Income from Operations Assets of Operations Depreciation and Amortization Capital Expenditures Three months ended March 31, 2016 $ 752 $ 32 $ 1,583 $ 41 $ 8 Office Products 128 14 334 4 1 Total operating segments 880 46 1,917 45 9 Corporate — 1 25 1 3 Total operations $ 880 $ 47 $ 1,942 $ 46 $ 12 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of the Company's Debt | The Company’s debt at March 31, 2017 and December 31, 2016 consisted of the following: March 31, 2017 December 31, 2016 Term Loan Facility due September 30, 2022 (a) $ 303 $ 353 8.75% Senior Secured Notes due October 15, 2023 450 450 Capital lease obligations 5 6 Unamortized debt issuance costs (14 ) (15 ) Total debt 744 794 Less: current portion (15 ) (52 ) Long-term debt $ 729 $ 742 (a) The borrowings under the Term Loan Facility are subject to a variable interest rate. As of March 31, 2017 and December 31, 2016, the interest rate was 7.00%. |
Related Parties (Tables)
Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Allocation of Expense Reflected in the Condensed Combined Financial Statements | These allocations were reflected as follows in the condensed combined financial statements for the three months ended March 31, 2016: Three Months Ended March 31, 2016 Costs of goods sold $ 22 Selling, general and administrative 32 Depreciation and amortization 2 Total allocations from RRD $ 56 |
Overview and Basis of Present36
Overview and Basis of Presentation - Narrative (Detail) $ in Millions | Oct. 02, 2016Entity | Mar. 31, 2017shares | Mar. 31, 2017USD ($)shares | Oct. 01, 2016shares |
Overview And Basis Of Presentation [Line Items] | ||||
Percentage of distribution of common shares during spinoff | 80.75% | |||
Number of subsidiary shares sold by parent company | 6,200,000 | |||
Issuance of common stock, value | $ | $ 18 | |||
Over-allotment Option | ||||
Overview And Basis Of Presentation [Line Items] | ||||
Issuance of common stock, shares | 900,000 | |||
Issuance of common stock, value | $ | $ 18 | |||
Donnelley Financial Solutions | ||||
Overview And Basis Of Presentation [Line Items] | ||||
Percentage of distribution of common shares during spinoff | 80.75% | |||
RRD | ||||
Overview And Basis Of Presentation [Line Items] | ||||
Ownership percentage | 19.25% | 19.25% | ||
Ownership percentage in Donnelley Financial solutions by related party | 19.25% | |||
Number of subsidiary shares sold by parent company | 6,200,000 | |||
RR Donnelley | ||||
Overview And Basis Of Presentation [Line Items] | ||||
Number of entities resulted from spinoff of an entity | Entity | 3 | |||
Number of share distributed to each stockholder in spinoff transaction in Donnelley Financial solutions by related party | 0.125 | |||
Number of share distributed to each stockholder in spinoff transaction | 0.125 |
Business Combinations - Narrati
Business Combinations - Narrative (Detail) - USD ($) | Mar. 01, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 87,000,000 | $ 84,000,000 | ||
Acquisition-related expenses | $ 0 | |||
HudsonYards | ||||
Business Acquisition [Line Items] | ||||
Purchase price of acquisition, cash | $ 2,000,000 | |||
Goodwill | $ 1,000,000 | |||
Continuum | ||||
Business Acquisition [Line Items] | ||||
Purchase price of acquisition, cash | 2,000,000 | $ 7,000,000 | ||
Goodwill | 5,000,000 | |||
Aggregate purchase price of acquisition | $ 9,000,000 |
Business Combinations - Pro For
Business Combinations - Pro Forma Financial Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Business Combinations [Abstract] | ||
Net sales | $ 822 | $ 894 |
Net (loss) income | $ (1) | $ 31 |
Inventories - Components of the
Inventories - Components of the Company's Inventories (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Net [Abstract] | ||
Raw materials and manufacturing supplies | $ 101 | $ 100 |
Work in process | 63 | 58 |
Finished goods | 93 | 93 |
LIFO reserve | (58) | (58) |
Total | $ 199 | $ 193 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of the Company's Property, Plant and Equipment (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Abstract] | ||
Land | $ 42 | $ 42 |
Buildings | 766 | 762 |
Machinery and equipment | 4,199 | 4,173 |
Property, plant and equipment, gross | 5,007 | 4,977 |
Accumulated depreciation | (4,412) | (4,369) |
Total | $ 595 | $ 608 |
Property, Plant and Equipment41
Property, Plant and Equipment - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 35 | $ 39 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets - Schedule of Changes in the Carrying Amount of Goodwill (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Mar. 31, 2017 | |
Goodwill [Line Items] | ||
Goodwill gross | $ 961 | $ 968 |
Accumulated impairment losses | (877) | (881) |
Goodwill | 84 | 87 |
Acquisitions | 3 | |
Goodwill [Line Items] | ||
Goodwill gross | 852 | 859 |
Accumulated impairment losses | (798) | (802) |
Goodwill | 54 | 57 |
Acquisitions | 3 | |
Office Products | ||
Goodwill [Line Items] | ||
Goodwill gross | 109 | 109 |
Accumulated impairment losses | (79) | (79) |
Goodwill | 30 | $ 30 |
Acquisitions | $ 0 |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule Of Other Intangible Assets [Line Items] | ||
Gross Carrying Amount, amortizable intangible assets | $ 210 | $ 210 |
Accumulated Amortization, amortizable intangible assets | (115) | (111) |
Net Book Value, amortizable intangible assets | 95 | 99 |
Gross Carrying Amount, total other intangible assets | 242 | 242 |
Net Book Value, total other intangible assets | 127 | 131 |
Trade Names | ||
Schedule Of Other Intangible Assets [Line Items] | ||
Net Book Value, indefinite-lived trade names | 32 | 32 |
Customer Relationships | ||
Schedule Of Other Intangible Assets [Line Items] | ||
Gross Carrying Amount, amortizable intangible assets | 205 | 205 |
Accumulated Amortization, amortizable intangible assets | (112) | (109) |
Net Book Value, amortizable intangible assets | 93 | 96 |
Trade Names | ||
Schedule Of Other Intangible Assets [Line Items] | ||
Gross Carrying Amount, amortizable intangible assets | 5 | 5 |
Accumulated Amortization, amortizable intangible assets | (3) | (2) |
Net Book Value, amortizable intangible assets | $ 2 | $ 3 |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense for other intangible assets | $ 4 | $ 5 |
Goodwill and Other Intangible45
Goodwill and Other Intangible Assets - Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets (Detail) $ in Millions | Mar. 31, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,017 | $ 16 |
2,018 | 11 |
2,019 | 10 |
2,020 | 10 |
2,021 | 9 |
2022 and thereafter | 43 |
Total | $ 99 |
Restructuring, Impairment and46
Restructuring, Impairment and Other Charges - Schedule of Net Restructuring, Impairment and Other Charges (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | $ 4 | $ 0 |
Other Restructuring Charges | 1 | 2 |
Total Restructuring Charges | 5 | 2 |
Impairment | 0 | 0 |
Other Charges | 1 | 1 |
Total | 6 | 3 |
Total Operating Segments | Print | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | 3 | 0 |
Other Restructuring Charges | 1 | 2 |
Total Restructuring Charges | 4 | 2 |
Impairment | 0 | 0 |
Other Charges | 1 | 1 |
Total | 5 | $ 3 |
Total Operating Segments | Office Products | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | 1 | |
Other Restructuring Charges | 0 | |
Total Restructuring Charges | 1 | |
Impairment | 0 | |
Other Charges | 0 | |
Total | $ 1 |
Restructuring, Impairment and47
Restructuring, Impairment and Other Charges - Narrative (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)Employee | Mar. 31, 2016USD ($) | |
Restructuring And Related Activities [Abstract] | ||
Other Restructuring Charges | $ | $ 1 | $ 2 |
Employee-related termination costs | $ | $ 4 | $ 0 |
Number of employees used to determine employee termination costs | Employee | 198 | |
Number of employees who were terminated as of date | Employee | 161 |
Restructuring, Impairment and48
Restructuring, Impairment and Other Charges - Other Charges - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Restructuring Cost And Reserve [Line Items] | |||
Other Charges | $ 1 | $ 1 | |
Accrued liabilities | 235 | $ 237 | |
Other noncurrent liabilities | 102 | $ 106 | |
Multi-employer pension plan withdrawal obligations | |||
Restructuring Cost And Reserve [Line Items] | |||
Other Charges | 1 | $ 1 | |
Accrued liabilities | 6 | ||
Other noncurrent liabilities | $ 39 |
Restructuring, Impairment and49
Restructuring, Impairment and Other Charges - Schedule of Changes in the Restructuring Reserve (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restructuring Cost And Reserve [Line Items] | ||
Balance at the beginning | $ 28 | |
Restructuring Charges | 5 | $ 2 |
Foreign Exchange and Other | 0 | |
Cash Paid | (4) | |
Balance at the end | 29 | |
Employee terminations | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at the beginning | 8 | |
Restructuring Charges | 4 | |
Foreign Exchange and Other | 0 | |
Cash Paid | (2) | |
Balance at the end | 10 | |
Lease terminations and other | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at the beginning | 2 | |
Restructuring Charges | 1 | |
Foreign Exchange and Other | 0 | |
Cash Paid | (1) | |
Balance at the end | 2 | |
Multi-employer pension plan withdrawal obligations | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at the beginning | 18 | |
Restructuring Charges | 0 | |
Foreign Exchange and Other | 0 | |
Cash Paid | (1) | |
Balance at the end | $ 17 |
Restructuring, Impairment and50
Restructuring, Impairment and Other Charges - Restructuring Reserve - Narrative (Detail) $ in Millions | Mar. 31, 2017USD ($) |
Restructuring And Related Activities [Abstract] | |
Current restructuring reserve (included in accrued liabilities) | $ 15 |
Noncurrent restructuring reserve (included in noncurrent liabilities) | $ 14 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Detail) - USD ($) $ in Millions | Oct. 02, 2016 | Mar. 31, 2016 | Oct. 01, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Net benefit plan obligation assumed | $ 358 | ||
Reduction in net benefit plan assets | $ 7 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net pension and postretirement income | $ 10 |
Retirement Plans - Components o
Retirement Plans - Components of Estimated Net Pension Benefits Plan Income (Detail) - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Qualified | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 22 | $ 2 |
Expected return on plan assets | (38) | (3) |
Amortization, net | 4 | 0 |
Net periodic benefit income | (12) | (1) |
Non-Qualified & International | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 1 | 2 |
Expected return on plan assets | 0 | (3) |
Amortization, net | 0 | 0 |
Net periodic benefit income | $ 1 | $ (1) |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Detail) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Oct. 01, 2016Entity | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Number of entities outstanding RRD options related to 2009, 2010, 2011, and 2012 grants modified and converted into stock options | 3 | ||
Number of entities outstanding shares related to 2013 and 2014 RRD RSUs modified and converted to RSU | 3 | ||
Number of entities PSUs for 2014 converted to RSUs | 3 | ||
Share-based compensation | $ | $ 3 | $ 1 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options - Narrative (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock options granted | 0 | 0 |
Share-based compensation | $ 3,000,000 | $ 1,000,000 |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | $ 0 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Shares Under Option | ||
Outstanding shares | 299 | 299 |
Vested and expected to vest at end of period | 299 | |
Exercisable at end of period | 299 | |
Weighted Average Exercise Price | ||
Outstanding | $ 25.32 | $ 25.32 |
Vested and expected to vest at end of period | 25.32 | |
Exercisable at end of period | $ 25.32 | |
Weighted Average Remaining Contractual Term (years) | ||
Outstanding | 3 years 1 month 6 days | 3 years 3 months 18 days |
Vested and expected to vest at end of period | 3 years 1 month 6 days | |
Exercisable at end of period | 3 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 1 | $ 2 |
Vested and expected to vest at end of period | 1 | |
Exercisable at end of period | $ 1 |
Share-Based Compensation - Su56
Share-Based Compensation - Summary of Restricted Stock Units Activity (Detail) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Shares | |
Nonvested at beginning of period, Shares | shares | 652,000 |
Granted, Shares | shares | 150,290 |
Vested, Shares | shares | (86,000) |
Nonvested at end of period, Shares | shares | 716,000 |
Weighted Average Grant Date Fair Value | |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 28.39 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 26.72 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 27.22 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 28.18 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Units - Narrative (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | $ 3 | $ 1 |
LSC Communications, RRD and Donnelley Financial Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares granted to certain executive officers and senior management | 150,290 | |
Potential payout for awards | 150,290 | |
LSC Communications, RRD and Donnelley Financial Restricted Stock Units | Employees, Officers and Directors | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | $ 2 | |
Unrecognized share-based compensation cost | $ 12 | |
Equity instruments other than options expected to vest, Shares | 700,000 | |
Equity instruments other than options expected to vest, weighted-average grant date fair value | $ 28.10 | |
Unrecognized compensation expense, weighted average period of recognition | 2 years 1 month 6 days |
Share-Based Compensation - Su58
Share-Based Compensation - Summary of Restricted Stock Award Activity for Employees (Detail) - Restricted Stock Award shares in Thousands | Mar. 31, 2017$ / sharesshares |
Shares | |
Nonvested at beginning of period, Shares | shares | 159 |
Nonvested at end of period, Shares | shares | 159 |
Weighted Average Grant Date Fair Value | |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 26.26 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 26.26 |
Share-Based Compensation - Re59
Share-Based Compensation - Restricted Stock Awards - Narrative (Detail) - Restricted Stock Award $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized share-based compensation cost | $ 3 |
Unrecognized compensation expense, weighted average period of recognition | 2 years 6 months |
Share-Based Compensation - Su60
Share-Based Compensation - Summary of Performance Restricted Stock Activity for Employees (Detail) - Performance Restricted Stock | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Shares | |
Nonvested at beginning of period, Shares | shares | 266,000 |
Granted, Shares | shares | 44,760 |
Nonvested at end of period, Shares | shares | 311,000 |
Weighted Average Grant Date Fair Value | |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 26.26 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 28.94 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 26.65 |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Restricted Stock - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation | $ 3 | $ 1 | |
Performance Restricted Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Shares granted to certain executive officers | 44,760 | ||
Potential payout for awards | 37,300 | 266,072 | |
Share-based compensation | $ 1 | ||
Unrecognized share-based compensation cost | $ 7 | ||
Unrecognized compensation expense, weighted average period of recognition | 2 years 7 months 6 days |
Share-Based Compensation - Su62
Share-Based Compensation - Summary of Performance Share Units Activity for Employees (Detail) - Performance Share Units | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Shares | |
Nonvested at beginning of period, Shares | shares | 0 |
Granted, Shares | shares | 28,520 |
Nonvested at end of period, Shares | shares | 29,000 |
Weighted Average Grant Date Fair Value | |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 0 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 26.72 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 26.72 |
Share-Based Compensation - Pe63
Share-Based Compensation - Performance Share Units - Narrative (Detail) - Performance Share Units $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares granted to certain members of senior management | 28,520 |
Potential payout for awards | 28,520 |
Unrecognized share-based compensation cost | $ | $ 1 |
Unrecognized compensation expense, weighted average period of recognition | 2 years 10 months 24 days |
Equity - Schedule of the Compan
Equity - Schedule of the Company's Equity Activity (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Equity [Abstract] | ||
Balance | $ 240 | $ 1,277 |
Net (loss) income | (1) | 31 |
Net transfers to parent company | (27) | |
Other comprehensive income | 12 | 6 |
Share-based compensation | 3 | |
Issuance of share-based awards, net of withholdings and other | (1) | |
Cash dividends paid | (8) | |
Issuance of common stock | 18 | |
Balance | $ 263 | $ 1,287 |
Equity - Narrative (Detail)
Equity - Narrative (Detail) shares in Millions | 3 Months Ended |
Mar. 31, 2017shares | |
Over-allotment Option | |
Equity [Line Items] | |
Issuance of common stock, shares | 0.9 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Detail) - shares | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2017 | Oct. 01, 2016 | |
Earnings Per Share [Line Items] | |||
Number of subsidiary shares distributed to parent company stockholders | 26,200,000 | ||
Number of subsidiary shares retained by parent company | 6,200,000 | ||
Number of subsidiary shares sold by parent company | 6,200,000 | ||
Treasury stock, shares acquired | 0 | ||
Over-allotment Option | |||
Earnings Per Share [Line Items] | |||
Issuance of common stock, shares | 900,000 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Basic and Diluted EPS as Well as Reconciliation of Basic Shares to Diluted Shares (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net (loss) earnings per common share: | ||
Basic | $ (0.02) | $ 0.95 |
Diluted | (0.02) | 0.95 |
Dividends declared per common share | $ 0.25 | $ 0 |
Numerator: | ||
Net (loss) income | $ (1) | $ 31 |
Denominator: | ||
Weighted average number of common shares outstanding | 32.6 | 32.4 |
Dilutive options and awards | 0 | 0 |
Diluted weighted average number of common shares outstanding | 32.6 | 32.4 |
Comprehensive Income - Schedule
Comprehensive Income - Schedule of Components of Other Comprehensive Income and Income Tax Expense Allocated to Each Component (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive income, Before Tax Amount | $ 13 | $ 10 |
Other comprehensive income, Income Tax Expense | 1 | 4 |
Other comprehensive income | 12 | 6 |
Translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive income, Before Tax Amount | 9 | 10 |
Other comprehensive income, Income Tax Expense | 0 | 0 |
Other comprehensive income | 9 | 10 |
Pension Plan Cost | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive income, Before Tax Amount | 4 | 0 |
Other comprehensive income, Income Tax Expense | 1 | 4 |
Other comprehensive income | $ 3 | $ (4) |
Comprehensive Income - Schedu69
Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | $ 240 | $ 1,277 |
Other comprehensive income before reclassifications | 9 | 10 |
Amounts reclassified from accumulated other comprehensive loss | 3 | (4) |
Net change in accumulated other comprehensive loss | 12 | 6 |
Balance | 263 | 1,287 |
Pension Plan Cost | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (462) | (46) |
Other comprehensive income before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 3 | (4) |
Net change in accumulated other comprehensive loss | 3 | (4) |
Balance | (459) | (50) |
Translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (69) | (159) |
Other comprehensive income before reclassifications | 9 | 10 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Net change in accumulated other comprehensive loss | 9 | 10 |
Balance | (60) | (149) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (531) | (205) |
Balance | $ (519) | $ (199) |
Comprehensive Income - Schedu70
Comprehensive Income - Schedule of Reclassification From Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Amortization of Pension Plan Cost: Net Actuarial Loss | |||
Reclassification from Accumulated Other Comprehensive Loss | |||
Reclassifications before tax | [1] | $ 4 | $ 0 |
Accumulated Defined Benefit Plans Adjustment | |||
Reclassification from Accumulated Other Comprehensive Loss | |||
Reclassifications before tax | 4 | 0 | |
Income tax expense | 1 | 4 | |
Reclassifications, net of tax | $ 3 | $ (4) | |
[1] | These accumulated other comprehensive income components are included in the calculation of net periodic pension plan (income) expense recognized substantially all in selling, general and administrative expenses in the condensed consolidated and combined results of operations (see Note 7, Retirement Plans). |
Segment Information - Narrative
Segment Information - Narrative (Detail) | 3 Months Ended |
Mar. 31, 2017Category | |
Office Products | |
Segment Reporting Information [Line Items] | |
Number of core product categories | 5 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Net Sales | $ 821 | $ 880 |
Income (Loss) from Operations | 18 | 47 |
Assets of Operations | 1,892 | 1,942 |
Depreciation and Amortization | 40 | 46 |
Capital Expenditures | 21 | 12 |
Total Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 821 | 880 |
Income (Loss) from Operations | 21 | 46 |
Assets of Operations | 1,782 | 1,917 |
Depreciation and Amortization | 39 | 45 |
Capital Expenditures | 20 | 9 |
Total Operating Segments | Print | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 710 | 752 |
Income (Loss) from Operations | 12 | 32 |
Assets of Operations | 1,470 | 1,583 |
Depreciation and Amortization | 35 | 41 |
Capital Expenditures | 20 | 8 |
Total Operating Segments | Office Products | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 111 | 128 |
Income (Loss) from Operations | 9 | 14 |
Assets of Operations | 312 | 334 |
Depreciation and Amortization | 4 | 4 |
Capital Expenditures | 0 | 1 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 0 | 0 |
Income (Loss) from Operations | (3) | 1 |
Assets of Operations | 110 | 25 |
Depreciation and Amortization | 1 | 1 |
Capital Expenditures | $ 1 | $ 3 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Detail) | Mar. 31, 2017Facility |
Commitments And Contingencies Disclosure [Abstract] | |
Number of sites cited as potentially responsible party | 9 |
Number of previously and currently owned sites with potential remediation obligations | 4 |
Debt - Schedule of the Company'
Debt - Schedule of the Company's Debt Obligations (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Capital lease obligations | $ 5 | $ 6 | ||
Unamortized debt issuance costs | (14) | (15) | ||
Total debt | 744 | 794 | ||
Less: current portion | (15) | (52) | ||
Long-term debt | 729 | 742 | ||
Term Loan Facility due September 30, 2022 | ||||
Debt Instrument [Line Items] | ||||
Term Loan Facility | [1] | 303 | 353 | |
8.75% Senior Secured Notes due October 15, 2023 | ||||
Debt Instrument [Line Items] | ||||
Senior Secured Notes | $ 450 | $ 450 | $ 450 | |
[1] | The borrowings under the Term Loan Facility are subject to a variable interest rate. As of March 31, 2017 and December 31, 2016, the interest rate was 7.00%. |
Debt - Schedule of the Compan75
Debt - Schedule of the Company's Debt (Parenthetical) (Detail) | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | |
Term Loan Facility due September 30, 2022 | |||
Debt Instrument [Line Items] | |||
Debt instrument, maturity date | Sep. 30, 2022 | ||
Debt instrument, variable interest rate | 7.00% | 7.00% | |
8.75% Senior Secured Notes due October 15, 2023 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 8.75% | 8.75% | |
Debt instrument, maturity date | Oct. 15, 2023 |
Debt - Narrative (Detail)
Debt - Narrative (Detail) - USD ($) | Feb. 02, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||||
Amount of difference between fair value and book value | $ 23,000,000 | $ 22,000,000 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility borrowings | $ 0 | 0 | |||
Credit Agreements | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest payment terms | Interest on the Credit Agreement is due at least quarterly and commenced on December 31, 2016. | ||||
Debt instrument, frequency of periodic interest payment | quarterly | ||||
Debt instrument, initial date of interest payment | Dec. 31, 2016 | ||||
Allowable annual dividend payment under credit agreement | $ 50,000,000 | ||||
Credit Agreements | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Sep. 30, 2021 | ||||
Debt instrument, principal amount | $ 400,000,000 | ||||
Credit Agreements | Base Rate | Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, applicable margin rate | 1.75% | ||||
Credit Agreements | Base Rate | Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, applicable margin rate | 2.25% | ||||
Credit Agreements | LIBOR Rate | Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, applicable margin rate | 2.75% | ||||
Credit Agreements | LIBOR Rate | Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, applicable margin rate | 3.25% | ||||
8.75% Senior Secured Notes due October 15, 2023 | |||||
Debt Instrument [Line Items] | |||||
Senior Secured Notes | $ 450,000,000 | $ 450,000,000 | 450,000,000 | ||
Debt instrument, interest rate | 8.75% | 8.75% | |||
Debt instrument, maturity date | Oct. 15, 2023 | ||||
Debt instrument, interest payment terms | Interest on the Senior Notes is due semi-annually on April 15 and October 15, commencing on April 15, 2017. | ||||
Debt instrument, frequency of periodic interest payment | semi-annually | ||||
Debt instrument, initial date of interest payment | Apr. 15, 2017 | ||||
Senior Secured Term Loan B Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Sep. 30, 2022 | ||||
Amortization payments paid in advance | $ 50,000,000 | ||||
Credit facility borrowings | [1] | $ 303,000,000 | $ 353,000,000 | ||
Senior Secured Term Loan B Facility | Credit Agreements | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Sep. 30, 2022 | ||||
Debt instrument, principal amount | $ 375,000,000 | ||||
LIBOR floor rate | 1.00% | ||||
Senior Secured Term Loan B Facility | Credit Agreements | Quarterly Installment for First Eight Quarters | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, amortize in quarterly installment | $ 13,000,000 | ||||
Senior Secured Term Loan B Facility | Credit Agreements | Quarterly Installment for Subsequent Quarters | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, amortize in quarterly installment | $ 11,000,000 | ||||
Senior Secured Term Loan B Facility | Credit Agreements | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, applicable margin rate | 5.00% | ||||
Senior Secured Term Loan B Facility | Credit Agreements | LIBOR Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, applicable margin rate | 6.00% | ||||
[1] | The borrowings under the Term Loan Facility are subject to a variable interest rate. As of March 31, 2017 and December 31, 2016, the interest rate was 7.00%. |
Related Parties - Narrative (De
Related Parties - Narrative (Detail) - USD ($) shares in Millions, $ in Millions | Oct. 02, 2016 | Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | |||||
Number of common stock shares sold | 6.2 | ||||
RRD | |||||
Related Party Transaction [Line Items] | |||||
Number of common stock shares sold | 6.2 | ||||
Ownership percentage | 19.25% | 19.25% | |||
Related party, trade receivables | $ 55 | $ 55 | $ 62 | ||
Related party, trade payables | 45 | 45 | 56 | ||
Related party, non-trade receivables | $ 10 | 10 | $ 10 | ||
Freight, logistics and premedia services purchased | 51 | $ 47 | |||
RRD’s subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Net revenues from related party sales | $ 32 | $ 10 |
Related Parties - Allocation of
Related Parties - Allocation of Expense Reflected in the Condensed Combined Financial Statements (Detail) - RRD $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |
Total allocations from RRD | $ 56 |
Costs of Goods Sold | |
Related Party Transaction [Line Items] | |
Total allocations from RRD | 22 |
Selling, General and Administrative Expenses | |
Related Party Transaction [Line Items] | |
Total allocations from RRD | 32 |
Depreciation and Amortization | |
Related Party Transaction [Line Items] | |
Total allocations from RRD | $ 2 |
New Accounting Pronouncements -
New Accounting Pronouncements - Narrative (Detail) - ASU 2017-07 - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Expected net pension income upon adoption of accounting standard | $ 45 | |
Scenario Forecast | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Expected net pension income upon adoption of accounting standard | $ 46 |