Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 26, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | LKSD | |
Entity Registrant Name | LSC Communications, Inc. | |
Entity Central Index Key | 0001669812 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 33,510,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 13 | $ 21 |
Receivables, less allowances for doubtful accounts of $16 in 2019 (2018 - $14) | 616 | 617 |
Inventories (Note 5) | 221 | 197 |
Income tax receivable | 8 | 4 |
Prepaid expenses and other current assets | 26 | 28 |
Total current assets | 884 | 867 |
Property, plant and equipment-net (Note 6) | 502 | 508 |
Goodwill (Note 7) | 103 | 103 |
Other intangible assets-net (Note 7) | 151 | 156 |
Right-of-use assets for operating leases | 192 | 0 |
Deferred income taxes | 25 | 27 |
Other noncurrent assets | 90 | 93 |
Total assets | 1,947 | 1,754 |
LIABILITIES | ||
Accounts payable | 330 | 372 |
Accrued liabilities | 235 | 199 |
Short-term debt and current portion of long-term debt (Note 10) | 175 | 108 |
Short-term operating lease liabilities | 45 | 0 |
Total current liabilities | 785 | 679 |
Long-term debt (Note 10) | 649 | 659 |
Pension liabilities | 113 | 132 |
Restructuring and multi-employer pension liabilities (Note 8) | 44 | 45 |
Long-term operating lease liabilities | 153 | 0 |
Other noncurrent liabilities | 50 | 61 |
Total liabilities | 1,794 | 1,576 |
Commitments and contingencies (Note 9) | ||
EQUITY | ||
Common stock, $0.01 par value Authorized: 65,000,000 Issued: 35,542,151 shares in 2019 (2018: 35,029,565) | 0 | 0 |
Additional paid-in capital | 831 | 828 |
Accumulated deficit | (177) | (42) |
Accumulated other comprehensive loss (Note 13) | (476) | (584) |
Treasury stock, at cost: 2,032,134 shares in 2019 (2018: 1,888,205) | (25) | (24) |
Total equity | 153 | 178 |
Total liabilities and equity | $ 1,947 | $ 1,754 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 16 | $ 14 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, Authorized | 65,000,000 | 65,000,000 |
Common stock, Issued | 35,542,151 | 35,029,565 |
Treasury stock, shares | 2,032,134 | 1,888,205 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 845 | $ 929 |
Type of Revenue [Extensible List] | lksd:ProductAndServicesMember | lksd:ProductAndServicesMember |
Cost of sales | $ 735 | $ 808 |
Type of Cost, Good or Service [Extensible List] | lksd:ProductAndServicesMember | lksd:ProductAndServicesMember |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | $ 85 | $ 83 |
Restructuring, impairment and other charges-net (Note 8) | 13 | 6 |
Depreciation and amortization | 31 | 38 |
(Loss) from operations | (19) | (6) |
Interest expense-net (Note 10) | 19 | 20 |
Settlement of retirement benefit obligations (Note 12) | 135 | 0 |
Investment and other (income)-net | (10) | (11) |
(Loss) before income taxes | (163) | (15) |
Income tax (benefit) | (37) | (4) |
Net (loss) | $ (126) | $ (11) |
Net (loss) per common share (Note 11) | ||
Basic net (loss) per share | $ (3.79) | $ (0.32) |
Diluted net (loss) per share | $ (3.79) | $ (0.32) |
Weighted-average number of common shares outstanding: | ||
Basic | 33.3 | 34.7 |
Diluted | 33.3 | 34.7 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net (loss) | $ (126) | $ (11) |
Other comprehensive income, net of tax (Note 13): | ||
Translation adjustments | 1 | 5 |
Adjustment for net periodic pension plan cost, net of tax expense of $36 million and $1 million for the three months ended March 31, 2019 and 2018, respectively | 107 | 4 |
Other comprehensive income | 108 | 9 |
Comprehensive (loss) | $ (18) | $ (2) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Adjustments for net pension plan cost, tax expense | $ 36 | $ 1 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net (loss) | $ (126) | $ (11) |
Adjustments to reconcile net (loss) to net cash (used in) operating activities: | ||
Impairment charges | 2 | 0 |
Depreciation and amortization | 31 | 38 |
Provision for doubtful accounts receivable | 3 | 2 |
Share-based compensation | 3 | 3 |
Deferred income taxes | (34) | 3 |
Settlement of retirement benefit obligations | 135 | 0 |
Other | 1 | 2 |
Changes in operating assets and liabilities - net of acquisitions: | ||
Accounts receivable-net | (2) | 56 |
Inventories | (24) | (33) |
Prepaid expenses and other current assets | 3 | 1 |
Accounts payable | (33) | (75) |
Income taxes receivable | (4) | (8) |
Accrued liabilities and other | 21 | (2) |
Net cash (used in) operating activities | (24) | (24) |
Cash Flows from Investing Activities | ||
Capital expenditures | (28) | (20) |
Acquisitions of businesses, net of cash acquired | (3) | 1 |
Net cash (used in) investing activities | (31) | (19) |
Cash Flows from Financing Activities | ||
Payments of current maturities and long-term debt | (11) | (13) |
Net proceeds from credit facility borrowings | 67 | 55 |
Dividends paid | (9) | (9) |
Other financing activities | (1) | (2) |
Net cash provided by financing activities | 46 | 31 |
Effect of exchange rate on cash and cash equivalents | 1 | 1 |
Net (decrease) in cash, cash equivalents and restricted cash | (8) | (11) |
Cash, cash equivalents and restricted cash at beginning of year | 24 | 35 |
Cash, cash equivalents and restricted cash at end of period | $ 16 | $ 24 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Mar. 31, 2018 |
Reconciliation to the Condensed Consolidated Balance Sheets | ||
Cash and cash equivalents | $ 13 | $ 21 |
Restricted cash included in prepaid expenses and other current assets | $ 3 | $ 3 |
Restricted Cash Equivalents, Current, Asset, Statement of Financial Position [Extensible List] | us-gaap:PrepaidExpenseAndOtherAssetsCurrent | us-gaap:PrepaidExpenseAndOtherAssetsCurrent |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 16 | $ 24 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) Income |
Balance at Dec. 31, 2017 | $ 248 | $ 0 | $ 816 | $ (2) | $ (90) | $ (476) |
Balance (in shares) at Dec. 31, 2017 | 35 | 0 | ||||
Net (loss) | (11) | $ 0 | 0 | $ 0 | (11) | 0 |
Revenue recognition adjustments | 9 | 0 | 0 | 0 | 9 | 0 |
Reclassification of tax rate change to accumulated deficit (Note 13) | 0 | 0 | 0 | 0 | 97 | (97) |
Issuance of share-based awards, net of withholdings and other | (2) | $ 0 | 0 | $ (2) | 0 | 0 |
Issuance of share-based awards, net of withholdings and other (in shares) | 0 | 0 | ||||
Share-based compensation | 3 | $ 0 | 3 | $ 0 | 0 | 0 |
Cash dividends paid | (9) | 0 | 0 | 0 | (9) | 0 |
Other comprehensive income | 9 | 0 | 0 | 0 | 0 | 9 |
Balance at Mar. 31, 2018 | 247 | $ 0 | 819 | $ (4) | (4) | (564) |
Balance (in shares) at Mar. 31, 2018 | 35 | 0 | ||||
Balance at Dec. 31, 2018 | 178 | $ 0 | 828 | $ (24) | (42) | (584) |
Balance (in shares) at Dec. 31, 2018 | 35 | 2 | ||||
Net (loss) | (126) | $ 0 | 0 | $ 0 | (126) | 0 |
Issuance of share-based awards, net of withholdings and other | (1) | $ 0 | 0 | $ (1) | 0 | 0 |
Issuance of share-based awards, net of withholdings and other (in shares) | 1 | 0 | ||||
Share-based compensation | 3 | $ 0 | 3 | $ 0 | 0 | 0 |
Cash dividends paid | (9) | 0 | 0 | 0 | (9) | 0 |
Other comprehensive income | 108 | 0 | 0 | 0 | 0 | 108 |
Balance at Mar. 31, 2019 | $ 153 | $ 0 | $ 831 | $ (25) | $ (177) | $ (476) |
Balance (in shares) at Mar. 31, 2019 | 36 | 2 |
CONDENSED CONSOLIDATED STATEM_7
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity adjustments | $ 9 | |
Dividends declared per common share | $ 0.26 | $ 0.26 |
ASU 2014-09 | ||
Equity adjustments | $ 9 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Overview and Basis of Presentation | Description of Business 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, logistics, warehousing and fulfillment and supply chain management services. 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. Merger Agreement On October 30, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Quad/Graphics, Inc. (“Quad/Graphics”), and QLC Merger Sub, Inc., a direct, wholly-owned subsidiary of Quad/Graphics (“Merger Sub”). Pursuant to the Merger Agreement, subject to the terms and conditions therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation. Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of the Company’s common stock issued and outstanding immediately prior to the Effective Time, will be converted into the right to receive 0.625 shares of class A common stock of Quad/Graphics, without interest and subject to adjustment as provided in the Merger Agreement. The Company and Quad/Graphics have made customary representations, warranties and covenants in the Merger Agreement. Subject to certain exceptions outlined in the Merger Agreement, the Company has agreed to covenants relating to the Company’s business during the period between the execution of the Merger Agreement and the consummation of the Merger, including restrictions on its ability to issue any shares of its capital stock, repurchase any shares of its capital stock and incur additional indebtedness outside the ordinary course of business. The Merger Agreement allows the Company to continue paying a regular quarterly dividend up to $0.26 per share. On February 25, 2019, Quad/Graphics announced that its shareholders had voted to approve the issuance of Quad/Graphics’ class A common stock in the Merger on February 22, 2019. On February 22, 2019, the Company held a Special Meeting of Stockholders in connection with the Merger. At the special meeting, the Company’s stockholders voted to adopt the Merger Agreement. The Company and Quad/Graphics filed notification and report forms in connection with the transactions contemplated by the Merger Agreement with the U.S. Department of Justice (the “DOJ”) and the U.S. Federal Trade Commission pursuant to the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the “HSR Act”) on November 13, 2018. On December 13, 2018, the Company and Quad/Graphics each received a request for additional information and documentary material (the “Second Request”) from the DOJ in connection with the DOJ’s review of the transactions contemplated by the Merger Agreement. The HSR Act provides that the issuance of the Second Request extends the waiting period under the HSR Act until either 30 days after both the Company and Quad/Graphics have substantially complied with the Second Request or such later time as agreed to by the parties with the DOJ, unless the waiting period is terminated earlier by the DOJ. The Company continues to expect the Merger to be consummated in mid-2019. Consummation of the Merger remains subject to the expiration of the waiting period under the HSR Act and other required regulatory approvals, and the satisfaction or waiver of the other closing conditions specified in the Merger Agreement. Basis of Presentation The condensed consolidated financial statements include the balance sheets, statements of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). All intercompany transactions have been eliminated in consolidation. These unaudited condensed consolidated interim financial statements include estimates and assumptions of management that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these estimates. During the third quarter of 2018, management changed the Company’s reportable segments and reporting units. Consequently, prior year amounts were restated to conform to the new segment structure. Refer to Note 15, Segment Information |
Business Combination and Dispos
Business Combination and Disposition | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations and Disposition | Note 2. Business Combination and Disposition 2018 Acquisition On July 2, 2018, the Company completed the acquisition of R. R. Donnelley & Sons Company’s (“RRD”) Print Logistics business (“Print Logistics”), an integrated logistics services provider to the print industry with an expansive distribution network. The acquisition enhanced the Company’s logistics service offering and is included in the Magazines, Catalogs and Logistics segment. The original total purchase price was $58 million in cash, which was reduced to $52 million as a result of a $6 million net working capital settlement in the fourth quarter of 2018. Of the final total purchase price, $21 million was recorded in goodwill related to this acquisition. 2018 Disposition On September 28, 2018, the Company completed the sale of its European printing business, which included web offset manufacturing facilities, a logistics and warehousing site and a location dedicated to premedia services, for proceeds of $47 million. The Company recorded a $25 million non-cash provision primarily for the write-off of a deferred tax asset associated with the disposition. The European printing business was included in the Europe segment, which was disclosed as part of the Other segment grouping. Acquisition Information The acquisition of Print Logistics was recorded by allocating the cost of the acquisition to the assets acquired, including other intangible assets, based on their estimated fair values at the acquisition date. The excess of the cost of the acquisition over the net amounts assigned to the fair value of the assets acquired was recorded in goodwill. The goodwill is primarily attributable to the synergies expected to arise as a result of the acquisition. The tax deductible goodwill related to Print Logistics was $25 million. The purchase price allocation for Print Logistics was final as of December 31, 2018. There were no changes to the purchase price allocation for the acquisition as of March 31, 2019 compared to the disclosed purchase price allocation in the Company’s annual report on Form 10-K for the year ended December 31, 2018. The final purchase price allocation for Print Logistics was as follows: Accounts Receivable $ 40 Prepaid expenses and other current assets 1 Property, plant and equipment 8 Other intangible assets 17 Goodwill 21 Accounts payable and accrued liabilities (35 ) Purchase price and net cash paid $ 52 The fair values of goodwill, other intangible assets and property, plant and equipment associated with Print Logistics were determined to be Level 3 under the fair value hierarchy, which included discounted cash flow analyses and comparable marketplace fair value data. Property, plant and equipment values were estimated using either the cost or market approach, if a secondhand market existed. The following table presents the fair value, valuation techniques and related unobservable inputs for these Level 3 measurements associated with Print Logistics: Fair Value Valuation Technique Unobservable Input Value Customer relationships $ 17 Multi-period excess earnings method Existing customer growth rate (3.5%) Attrition rate 7.5% Discount rate 18.0% For the three months ended March 31, 2019 and 2018, the Company recorded a de minimis amount and $1 million of acquisition-related expenses, respectively, associated with the completed and contemplated acquisitions within selling, general and administrative expenses in the condensed consolidated statements of operations. Pro forma results The following unaudited pro forma financial information for the three months ended March 31, 2019 and 2018 presents the condensed consolidated statements of operations of the Company and the acquisition of Print Logistics, as if the acquisition had occurred as of January 1 of the year prior to the acquisition. The unaudited pro forma financial information is not intended to represent or be indicative of the Company’s condensed consolidated statements 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 statements of operations. Pro forma adjustments are tax-effected at the applicable statutory tax rates. Three Months Ended March 31, 2019 2018 Net sales $ 845 $ 973 Net (loss) (126 ) (12 ) The following table outlines unaudited pro forma financial information for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 Amortization of purchased intangibles $ 5 $ 5 There were no nonrecurring pro forma adjustments affecting net (loss) for the three months ended March 31, 2019 and 2018. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Note 3. Revenue Recognition Disaggregated Revenue The following tables provide information about disaggregated revenue by major products/service lines and timing of revenue recognition, and include a reconciliation of the disaggregated revenue with reportable segments for the three months ended March 31, 2019 and 2018. Three Months Ended March 31, 2019 Magazines, Catalogs and Office Logistics Book Products Other Total Major Products / Service Lines Book (a) $ — $ 260 $ — $ — $ 260 Magazines and Catalogs (b) $ 319 $ — $ — $ 44 $ 363 North America 319 — — 44 363 Europe — — — — — Logistics $ 84 $ — $ — $ — $ 84 Directories $ — $ — $ — $ 19 $ 19 North America — — — 19 19 Europe — — — — — Office Products $ — $ — $ 119 $ — $ 119 Total $ 403 $ 260 $ 119 $ 63 $ 845 Timing of Revenue Recognition Products and services transferred at a point in time $ 288 $ 228 $ 119 $ 43 $ 678 Products and services transferred over time 115 32 — 20 167 Total $ 403 $ 260 $ 119 $ 63 $ 845 Three Months Ended March 31, 2018 Magazines, Catalogs and Office Logistics Book Products Other Total Major Products / Service Lines Book (a) $ — $ 249 $ — $ — $ 249 Magazines and Catalogs (b) $ 400 $ — $ — $ 99 $ 499 North America 400 — — 41 441 Europe — — — 58 58 Logistics $ 27 $ — $ — $ — $ 27 Directories $ — $ — $ — $ 31 $ 31 North America — — — 27 27 Europe — — — 4 4 Office Products $ — $ — $ 123 $ — $ 123 Total $ 427 $ 249 $ 123 $ 130 $ 929 Timing of Revenue Recognition Products and services transferred at a point in time $ 369 $ 221 $ 123 $ 112 $ 825 Products and services transferred over time 58 28 — 18 104 Total $ 427 $ 249 $ 123 $ 130 $ 929 (a) Includes e-book formatting and supply chain management associated with book production (b) Includes premedia and co-mail Contract Balances The following table provides changes in contract assets and liabilities during the three months ended March 31, 2019: Short-Term Contract Assets Long-Term Contract Assets Contract Liabilities Beginning Balance, January 1, 2019 $ 44 $ 30 $ 16 Additions to unbilled accounts receivable 31 — — Unbilled accounts receivable recognized in trade receivables (29 ) — — Amortization of contract acquisition costs — (3 ) — Revenue recognized that was included in contract liabilities as of January 1, 2019 — — (8 ) Increases due to cash received — — 6 Ending Balance, March 31, 2019 $ 46 $ 27 $ 14 The trade receivables balance was $487 million and $488 million as of March 31, 2019 and December 31, 2018, respectively. Accounts Receivable Transactions affecting the allowances for doubtful accounts receivable balance during the three months ended March 31, 2019 were as follows: March 31, 2019 Balance, beginning of year $ 14 Provisions charged to expense 3 Write-offs and other (1 ) Balance, end of year $ 16 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 4. Leases Financial Statement Impact of Adopting Accounting Standards Update No. 2016-02 “Leases (Topic 842)” (“ASU 2016-02” or “ASC 842”) The Company adopted ASU 2016-02 on January 1, 2019 using the modified retrospective adoption method. The reported results for 2019 reflect the adoption of ASC 842 guidance while the reported results for 2018 were prepared and continue to be reported under the guidance of ASC 840, Leases, referred to herein as “previous guidance.” In adopting ASC 842, the Company applied certain available practical expedients, including electing to combine lease and non-lease components of a contract and electing to apply the practical expedient “package” permitted under ASU 2016-02. This election allowed the Company to use the lease classification (operating or finance) previously determined at the start of a lease contract for any expired or existing leases as of the date of adoption. The Company performed an analysis of all lease contracts existing as of January 1, 2019. Upon adoption of ASC 842, the Company added $206 million of right-of-use (“ROU”) assets and lease liabilities to its balance sheet related to operating leases. There were no changes to assets or liabilities relating to finance leases. Based upon the balances that existed as of December 31, 2018, the Company recorded adjustments to the following accounts as of January 1, 2019: As Reported Adjustments Adjusted December 31, 2018 Adoption of ASU 2016-02 January 1, 2019 Assets ROU assets for operating leases $ — $ 201 $ 201 Liabilities Accrued liabilities (a) $ 199 $ (1 ) $ 198 Short-term operating lease liabilities — 52 52 Long-term operating lease liabilities — 154 154 Other noncurrent liabilities (a) 61 (4 ) 57 (a) The total $5 adjustment relates to straight-line rent accruals that were reclassified to ROU assets for operating leases. Accounting Policy Under ASC 842, the Company determines if a contract contains a lease at the inception of the contract. A contract contains a lease if it conveys to the Company the right to control the use of specified assets. Operating leases are included in ROU assets and in other current liabilities and other non-current liabilities. Finance lease assets are included in property, plant, and equipment, and liabilities are included in short-term and long-term debt. ROU assets and lease liabilities are recognized at the present value of future lease payments. The discount rate used to measure the amount recognized is the Company’s incremental borrowing rate, if an implicit rate is not determinable from the lease contract. Operating lease cost is recognized on a straight-line basis over the term of the lease. The Company leases land, production facilities, office space, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Further, the Company has elected not to separate lease and non-lease components of contracts for any asset classes, but rather to account for non-lease components together with their related lease components. For leases that include renewal options that the Company is reasonably certain to exercise, the Company includes the renewal period in its initial classification of the lease. Renewal options range from 1 year to 5 years. The Company’s variable lease payments do not depend on a published index or rate, and therefore, are expensed as incurred. The components of total net lease cost were as follows: Three Months Ended March 31, 2019 Operating lease cost $ 17 Sublease (income) (2 ) Variable lease cost 3 Total net lease cost $ 18 During the three months ended March 31, 2019, the Company incurred a de minimis amount of finance lease cost, consisting of finance lease ROU asset amortization and interest on finance lease liabilities, and a de minimis amount of cost associated with short-term leases. Supplemental non-cash information related to leases is included below: Three Months Ended March 31, 2019 ROU assets acquired in exchange for lease obligations: ROU assets Operating leases $ 2 Lease obligations Operating leases $ 2 During the three months ended March 31, 2019, the Company recorded $16 million of operating cash outflows from operating leases. During the three months ended March 31, 2019, the Company recorded a de minimis amount of cash flows from financing leases. No finance lease ROU assets or obligations were acquired during the three months ended March 31, 2019. Supplemental information related to leases is included below: March 31, 2019 Weighted Average Remaining Lease Term (years) Operating leases 5.5 Financing leases 2.4 Weighted Average Discount Rate Operating leases 8.3 % Financing leases 6.7 % The annual maturities of lease liabilities as of March 31, 2019 were as follows: Operating Leases 2019 $ 44 2020 51 2021 43 2022 34 2023 24 2024 & thereafter 47 Total undiscounted lease payments 243 Imputed interest (47 ) Total lease liabilities $ 196 During the three months ended March 31, 2019, the Company recorded a de minimis amount of maturities for finance lease liabilities. As of March 31, 2019, the Company has additional operating leases that have not commenced for an undiscounted amount of $9 million. These operating leases will commence during 2019 with lease terms of 4 years to 5 years. The Company also has land and building subleases for certain locations resulting from the acquisition of businesses or disposition of components. Some of these leases have variable payments, either because payments are structured to follow the head lease (where the Company is the lessee) or because the sublease includes reimbursement for utilities and other expenses. We recognize the rent-related portion of lease payments, including changes based on a published index or rate, on a straight-line basis and the variable portion related to utilities and other expenses in the period incurred. Our subleases have various renewal and termination options whereby the sublease can be renewed for 6 months to 5 years, or the sublease can be terminated by providing 90 days’ notice. Sublessees have full discretion to exercise renewal or termination options. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 5. Inventories The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at March 31, 2019 and December 31, 2018 were as follows: March 31, December 31, 2019 2018 Raw materials and manufacturing supplies $ 132 $ 119 Work in process 56 50 Finished goods 84 80 Last in, first out reserve (51 ) (52 ) Total $ 221 $ 197 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note 6. Property, Plant and Equipment The components of the Company’s property, plant and equipment at March 31, 2019 and December 31, 2018 were as follows: March 31, December 31, 2019 2018 Land $ 43 $ 43 Buildings 712 709 Machinery and equipment 3,614 3,759 4,369 4,511 Less: Accumulated depreciation (3,867 ) (4,003 ) Total $ 502 $ 508 During the three months ended March 31, 2019 and 2018, depreciation expense was Restructuring, Impairment and Other Charges Assets Held for Sale Primarily as a result of restructuring actions, certain facilities and equipment are considered held for sale. The net book value of assets held for sale was $3 million at March 31, 2019 and December 31, 2018. These assets were included in prepaid expenses and other current assets in the condensed consolidated balance sheets at the lower of their historical net book value or their estimated fair value, less estimated costs to sell. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 7. Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill for the three months ended March 31, 2019 were as follows: Magazines, Catalogs and Logistics Book Office Products Other Total Net book value as of December 31, 2018 Goodwill $ 523 $ 354 $ 110 $ 5 $ 992 Accumulated impairment losses (502 ) (303 ) (79 ) (5 ) (889 ) Total 21 51 31 — 103 Net book value as of March 31, 2019 Goodwill 523 354 110 5 992 Accumulated impairment losses (502 ) (303 ) (79 ) (5 ) (889 ) Total $ 21 $ 51 $ 31 $ — $ 103 The components of other intangible assets at March 31, 2019 and December 31, 2018 were as follows: March 31, 2019 December 31, 2018 Gross Carrying Accumulated Net Book Gross Carrying Accumulated Net Book Amount Amortization Value Amount Amortization Value Customer relationships $ 268 $ (141 ) $ 127 $ 268 $ (137 ) $ 131 Trade names 30 (7 ) 23 9 (6 ) 3 Total amortizable other intangible assets 298 (148 ) 150 277 (143 ) 134 Indefinite-lived trade names 1 — 1 22 — 22 Total other intangible assets $ 299 $ (148 ) $ 151 $ 299 $ (143 ) $ 156 On January 1, 2019, all of Office Products’ tradenames (net book value of $21 million) were changed from indefinite-lived tradenames to definite-lived tradenames with a useful life of 15 years, as management determined that it was not possible to conclude the tradenames will generate cash flows for an indefinite period of time due to secular industry decline and changes in the usage of branded products. During each of the three months ended March 31, 2019 and 2018, amortization expense for other intangible assets was $5 million. The following table outlines the estimated annual amortization expense related to all amortizable intangible assets: For the year ending December 31, Amount 2019 $ 19 2020 19 2021 17 2022 16 2023 15 2024 and thereafter 69 Total $ 155 |
Restructuring, Impairment and O
Restructuring, Impairment and Other Charges | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring And Related Activities [Abstract] | |
Restructuring, Impairment and Other Charges | Note 8. Restructuring, Impairment and Other Charges For the three months ended March 31, 2019 and 2018, the Company recorded the following net restructuring, impairment and other charges: Other Total Three Months Ended Employee Restructuring Restructuring Other March 31, 2019 Terminations Charges Charges Impairment Charges Total Magazines, Catalogs and Logistics $ 5 $ 4 $ 9 $ 2 $ — $ 11 Book — 1 1 — — 1 Corporate — 1 1 — — 1 Total $ 5 $ 6 $ 11 $ 2 $ — $ 13 Other Total Three Months Ended Employee Restructuring Restructuring Other March 31, 2018 Terminations Charges Charges Impairment Charges Total Magazines, Catalogs and Logistics $ 3 $ 2 $ 5 $ (1 ) $ — $ 4 Book — 1 1 — — 1 Office Products 1 — 1 — — 1 Total $ 4 $ 3 $ 7 $ (1 ) $ — $ 6 Restructuring and Impairment Charges For the three months ended March 31, 2019, the Company incurred charges of $5 million for an aggregate of 240 employees, of whom 16 were terminated as of or prior to March 31, 2019, primarily related to the closure of one facility in the Magazines, Catalogs and Logistics segment. million of net impairment charges related to machinery and equipment associated with facility closings in the Magazines, Catalogs and Logistics segment. For the three months ended March 31, 2018, the Company incurred employee-related restructuring charges of $4 million for an aggregate of 196 employees, substantially all of whom were terminated as of or prior to March 31, 2019. These charges primarily related to the closure of one facility in the Magazines, Catalogs and Logistics segment and the reorganization of certain business units. The Company incurred other restructuring charges of $3 million for the three months ended March 31, 2018 for facility costs and pension withdrawal obligations related to facility closures. As a result of a $1 million adjustment of previously recorded goodwill associated with the 2017 acquisitions, there was a reduction of $1 million of goodwill impairment charges during the three months ended March 31, 2018. Other Charges For each of the three months ended March 31, 2019 and 2018, the Company recorded a de minimis amount of other charges for multiemployer 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 multiemployer pension plans included $3 million in accrued liabilities and $19 million in restructuring and multiemployer pension plan liabilities at March 31, 2019. 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 multiemployer 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 balance sheets, statements of operations and cash flows. Restructuring Reserve The restructuring reserve as of December 31, 2018 and March 31, 2019, and changes during the three months ended March 31, 2019 were as follows: December 31, Restructuring Cash March 31, 2018 Charges Other Paid 2019 Employee terminations $ 8 $ 5 $ — $ — $ 13 Multiemployer pension plan withdrawal obligations 32 1 — (2 ) 31 Other 1 5 — (2 ) 4 Total $ 41 $ 11 $ — $ (4 ) $ 48 The current portion of restructuring reserves of $23 million at March 31, 2019 was included in accrued liabilities, while the long-term portion of $25 million, which primarily related to multiemployer pension plan withdrawal obligations related to facility closures, was included in restructuring and multiemployer pension liabilities at March 31, 2019. The Company anticipates that payments associated with the employee terminations reflected in the above table will be substantially completed by March 31, 2020. Payments on all of the Company’s multiemployer 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 multiemployer pension plan withdrawal obligations. The restructuring liabilities classified as “other” consisted of other facility closing costs. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9. 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 ten active federal and state Superfund and other multiparty remediation sites. In addition to these sites, the Company may also have the obligation to remediate three 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 balance sheets, statements 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 balance sheets, statements of operations and cash flows. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 10. Debt The Company’s debt at March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 Borrowings under the Revolving Credit Facility $ 133 $ 64 Term Loan Facility due September 30, 2022 (a ) 249 260 8.75% Senior Secured Notes due October 15, 2023 450 450 Capital lease and other obligations 2 4 Unamortized debt issuance costs (10 ) (11 ) Total debt 824 767 Less: current portion (175 ) (108 ) Long-term debt $ 649 $ 659 (a) The borrowings under the Term Loan Facility are subject to a variable interest rate. As of March 31, 2019 and December 31, 2018, the interest rate was 8.00% and 8.02%, respectively. __________________________________ On September 30, 2016, the Company issued $450 million of Senior Secured Notes (the “Senior Notes”). On September 30, 2016 the Company entered into a credit agreement (the “Credit Agreement”) that provides for (i) a senior secured term loan B facility in an aggregate principal amount of $375 million (the “Term Loan Facility”) and (ii) a senior secured revolving credit facility in an aggregate principal amount of $400 million (the “Revolving Credit Facility”). The debt issuance costs and original issue discount are being amortized over the life of the facilities using the effective interest method. The Credit Agreement is subject to a number of covenants, including, but not limited to, a minimum Interest Coverage Ratio and a 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 the aggregate, though additional dividends may be allowed subject to certain conditions. Each of these covenants is subject to important exceptions and qualifications. Credit Agreement On December 20, 2018, the Company amended the Credit Agreement to, among other things, defer certain changes to the minimum Interest Coverage Ratio and the maximum Consolidated Leverage Ratio. As a result, the maximum Consolidated Leverage Ratio will be reduced to 3.00 to 1.00 with respect to any fiscal quarter ending on or after March 31, 2020, as opposed to March 31, 2019, as originally contemplated in the Credit Agreement. The minimum Interest Coverage Ratio will be increased to 3.50 to 1.00 with respect to any test period ending on or after March 31, 2020, as opposed to March 31, 2019, as originally contemplated in the Credit Agreement. Other terms, including the outstanding principal, maturity date and other debt covenants remain the same. Additional Debt Issuances Information The fair values of the Senior Notes and Term Loan Facility that 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 $30 million and $22 million at March 31, 2019 and December 31, 2018, respectively. There were $133 million and $64 million of borrowings under the Revolving Credit Facility as of March 31, 2019 and December 31, 2018, respectively. The weighted-average interest rate on borrowings under the Company’s Revolving Credit Facility was 5.76% during the three months ended March 31, 2019. There were $19 million and $20 million of net interest expense during the three months ended March 31, 2019 and 2018, respectively. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 11. Earnings Per Share During the three months ended March 31, 2019 and 2018 , no shares of common stock were purchased by the Company, however, Basic earnings per share (“EPS”) is calculated by dividing net earnings attributable to the Company’s stockholders by the weighted average number of common shares outstanding for the period. In computing diluted EPS, basic EPS is adjusted for the assumed issuance of all potentially dilutive share-based awards, including stock options, restricted stock, restricted stock units (“RSUs”), and performance share units (“PSUs”). 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, 2019 2018 Net (loss) per common share: Basic $ (3.79 ) $ (0.32 ) Diluted $ (3.79 ) $ (0.32 ) Numerator: Net (loss) $ (126 ) $ (11 ) Denominator: Weighted average number of common shares outstanding 33.3 34.7 Dilutive options and awards — — Diluted weighted average number of common shares outstanding 33.3 34.7 |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 12. Retirement Plans The Company is the sole sponsor of certain defined benefit pension plans that are included in the condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018. The assets and certain obligations of the defined benefit pension plans includes plans qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “U.S. Qualified Plan”) and related non-qualified benefits (the “Non-Qualified Plan”). The components of the estimated net pension loss (income) for the three months ended March 31, 2019 and 2018 were as follows: Three Months Ended March 31, 2019 Qualified Non-Qualified & International Total Interest cost $ 20 $ 1 $ 21 Expected return on plan assets (33 ) — (33 ) Amortization of actuarial loss 3 — 3 Settlement of retirement obligations 135 — 135 Net periodic benefit loss $ 125 $ 1 $ 126 Three Months Ended March 31, 2018 Qualified Non-Qualified & International Total Interest cost $ 21 $ 1 $ 22 Expected return on plan assets (39 ) — (39 ) Amortization of actuarial loss 5 — 5 Net periodic benefit (income) loss $ (13 ) $ 1 $ (12 ) In the first quarter of 2019, the Company completed a partial settlement of its retirement benefit obligations related to the U.S. Qualified Plan by purchasing a group annuity contract for certain retirees and beneficiaries from a third-party insurance company. As a result, the Company’s pension assets and liabilities were remeasured as of the settlement date. As of the remeasurement date, the reduction in the reported pension obligation for the participants under the annuity contract was $477 million, and the reduction in plan assets was $466 million. The Company recorded a non-cash settlement charge of $135 million in settlement of retirement benefit obligations in the condensed consolidated statement of operations in the first quarter of 2019. This charge results from the recognition in earnings of a portion of the actuarial losses recorded in accumulated other comprehensive loss based on the proportion of the obligation settled. The long-term rate of return remained at 6.50% for the U.S. Qualified pension plan and did not change as a result of the settlement. The discount rate used to determine the net obligation for the U.S. Qualified pension plan at the settlement date was 4.3%, 10 basis points lower than the discount rate as of December 31, 2018. Settlement of retirement obligations is disclosed separately in the condensed consolidated statements of operations, while the remaining net periodic (loss) income for the three months ended March 31, 2019 and 2018 is included in the investment and other (income)-net. |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Comprehensive Income | Note 13. Comprehensive Income The following table summarizes accumulated other comprehensive loss by component as of December 31, 2018 and March 31, 2019 and changes during the three months ended March 31, 2019. Pension Translation Plan Cost Adjustments Total Balance at December 31, 2018 $ (529 ) $ (55 ) $ (584 ) Other comprehensive income before reclassifications 105 1 106 Amounts reclassified from accumulated other comprehensive loss 2 — 2 Net change in accumulated other comprehensive loss 107 1 108 Balance at March 31, 2019 $ (422 ) $ (54 ) $ (476 ) In the first quarter of 2019, the Company completed a partial settlement of its retirement benefit obligations and, as a result, the Company’s pension assets and liabilities were remeasured as of the settlement date. The impact, net of tax, to the Company’s accumulated other comprehensive loss was a decrease of $105 million. Refer to Note 12, Retirement Plans , for more information. The following table summarizes accumulated other comprehensive loss by component as of December 31, 2017 and March 31, 2018 and changes during the three months ended March 31, 2018. Pension Translation Plan Cost Adjustments Total Balance at December 31, 2017 $ (428 ) $ (48 ) $ (476 ) Other comprehensive income before reclassifications — 5 5 Amounts reclassified from accumulated other comprehensive loss 4 — 4 Reclassification to accumulated deficit (97 ) — (97 ) Net change in accumulated other comprehensive loss (93 ) 5 (88 ) Balance at March 31, 2018 $ (521 ) $ (43 ) $ (564 ) The Company adopted ASU 2018-02 “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”) in the first quarter of 2018. As a result of applying this standard in the period of adoption, the Company reclassified $97 million relating to the change in tax rate from accumulated other comprehensive loss to accumulated deficit in the Company’s condensed consolidated balance sheet during the three months ended March 31, 2018. Refer to the condensed consolidated statements of comprehensive income for the components of comprehensive (loss) income for the three months ended March 31, 2019 and 2018. Reclassifications from accumulated other comprehensive loss for the three months ended March 31, 2019 and 2018 were as follows: Three Months Ended March 31, 2019 2018 Amortization of pension plan cost: Net actuarial loss (a) $ 3 $ 5 Reclassifications before tax 3 5 Income tax expense 1 1 Reclassifications, net of tax $ 2 $ 4 (a) Amortization of pension plan cost is included in the calculation of net periodic pension plan (income) expense that is recognized all in investment and other income-net in the condensed consolidated statements of operations (see Note 12, Retirement Plans |
Stock and Incentive Programs
Stock and Incentive Programs | 3 Months Ended |
Mar. 31, 2019 | |
Share Based Compensation [Abstract] | |
Stock and Incentive Programs | Note 14. Stock and Incentive Programs The Company’s employees participate in the Company’s 2016 Performance Incentive Plan (the “2016 PIP”). Under the 2016 PIP, the Company may grant cash or bonus awards, stock options, stock appreciation rights, restricted stock awards (“RSAs”), RSUs, performance awards or combinations thereof to certain officers, directors and key employees. Total compensation expense related to all share based compensation plans for the Company’s employees, officers and directors was $3 million for each of the three months ended March 31, 2019 and 2018. There was a de minimis amount of excess tax benefits for each of the three months ended March 31, 2019 and 2018. There was no significant activity related to stock options, RSAs, performance restricted stock, and PSUs during the three months ended March 31, 2019. Restricted Stock Units A summary of the Company’s RSU activity for LSC Communications employees, officers and directors as of December 31, 2018 and March 31, 2019, and changes during the three months ended March 31, 2019 is presented below. Weighted Shares Average Grant (thousands) Date Fair Value Nonvested at December 31, 2018 897 $ 19.65 Granted 927 6.28 Vested (338 ) 25.59 Forfeited (2 ) 17.62 Nonvested at March 31, 2019 1,484 $ 9.94 During the three months ended March 31, 2019, 926,870 RSUs were granted to certain senior management of the Company. The shares are subject to time-based vesting and will cliff vest on February 25, 2022. As of March 31, 2019, the total potential payout for the awards granted during the three months ended March 31, 2019 is 926,870 RSUs. 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 $1 million and $2 million for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019 there was $10 million of unrecognized share-based compensation expense related to approximately 1.5 million RSUs outstanding, with a weighted-average grant date fair value of $9.94, that are expected to vest over a weighted-average period of 2.5 years. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Note 15. Segment Information During the third quarter of 2018, the Company realigned the reportable segments and reporting units to reflect its evolution since its separation from RRD in 2016, as well as changes from recent acquisition and disposal activity. All prior year amounts have been reclassified to conform to the Company’s current reporting structure. The Company’s segment and product and service offerings are summarized below: Magazines, Catalogs and Logistics The Magazines, Catalogs and Logistics segment primarily produces magazines and catalogs, as well as provides logistics services to the Company and other third-parties. The segment also provides certain other print-related services, including mail-list management and sortation. The segment has operations primarily in the U.S. The Magazines, Catalogs and Logistics segment is divided into two reporting units: magazines and catalogs; and logistics. Book The Book segment produces books for publishers primarily in the U.S. The segment also provides supply-chain management services, warehousing and fulfillment services, as well as e-book formatting for book publishers. Office Products The Office Products segment manufactures and sells branded and private label products in five core categories: filing products, envelopes, note-taking products, binder products, and forms. Other The Other grouping consists of the following non-reportable segments: Europe, Directories, Mexico, and Print Management. Europe produced magazines, catalogs and directories, as well as provided packaging and pre-media services. The Company disposed of its European printing business in the third quarter of 2018 (refer to Note 2, Business Combination and Disposition , for more information). Mexico produces magazines, catalogs, statements, forms, and labels. Print Management provides outsourced print procurement and management services. 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, share-based compensation expense is included in Corporate and not allocated to the operating segments. Information by Segment The Company has disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Company’s chief operating decision-maker and is most consistent with the presentation of profitability reported with the condensed consolidated financial statements. Income (Loss) Depreciation Three Months Ended Net from Assets of and Capital March 31, 2019 Sales Operations Operations Amortization Expenditures Magazines, Catalogs and Logistics $ 403 $ (31 ) $ 795 $ 15 $ 10 Book 260 13 647 12 17 Office Products 119 8 329 3 — Total reportable segments 782 (10 ) 1,771 30 27 Other 63 4 90 1 1 Corporate — (13 ) 86 — — Total operations $ 845 $ (19 ) $ 1,947 $ 31 $ 28 Income (Loss) Depreciation Three Months Ended Net from Assets of and Capital March 31, 2018 Sales Operations Operations Amortization Expenditures Magazines, Catalogs and Logistics $ 427 $ (14 ) $ 742 $ 16 $ 9 Book 249 9 565 14 9 Office Products 123 2 372 4 — Total reportable segments 799 (3 ) 1,679 34 18 Other 130 7 194 4 1 Corporate — (10 ) 84 — 1 Total operations $ 929 $ (6 ) $ 1,957 $ 38 $ 20 Restructuring, impairment and other charges by segment for the three months ended March 31, 2019 and 2018 are disclosed in Note 8, Restructuring, Impairment and Other Charges. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Pronouncements | Note 16. New Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update No. 2018-15 “ Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the accounting for implementation costs for cloud computing arrangements with the accounting for costs involved in implementing an internal-use software license. ASU 2018-15 is effective in the first quarter of 2020; however, as early adoption is permitted, the Company adopted ASU 2018-15 in the first quarter of 2019. The adoption did not have a material impact in the first quarter of 2019. |
Business Combination and Disp_2
Business Combination and Disposition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Acquisition [Line Items] | |
Pro Forma Financial Information | The unaudited pro forma financial information is not intended to represent or be indicative of the Company’s condensed consolidated statements 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 statements of operations. Pro forma adjustments are tax-effected at the applicable statutory tax rates. Three Months Ended March 31, 2019 2018 Net sales $ 845 $ 973 Net (loss) (126 ) (12 ) The following table outlines unaudited pro forma financial information for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 Amortization of purchased intangibles $ 5 $ 5 |
2018 Acquisition | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation for Acquisitions | The final purchase price allocation for Print Logistics was as follows: Accounts Receivable $ 40 Prepaid expenses and other current assets 1 Property, plant and equipment 8 Other intangible assets 17 Goodwill 21 Accounts payable and accrued liabilities (35 ) Purchase price and net cash paid $ 52 |
Fair Values, Valuation Techniques and Related Unobservable Inputs of Level Three | The following table presents the fair value, valuation techniques and related unobservable inputs for these Level 3 measurements associated with Print Logistics: Fair Value Valuation Technique Unobservable Input Value Customer relationships $ 17 Multi-period excess earnings method Existing customer growth rate (3.5%) Attrition rate 7.5% Discount rate 18.0% |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregated Revenue | The following tables provide information about disaggregated revenue by major products/service lines and timing of revenue recognition, and include a reconciliation of the disaggregated revenue with reportable segments for the three months ended March 31, 2019 and 2018. Three Months Ended March 31, 2019 Magazines, Catalogs and Office Logistics Book Products Other Total Major Products / Service Lines Book (a) $ — $ 260 $ — $ — $ 260 Magazines and Catalogs (b) $ 319 $ — $ — $ 44 $ 363 North America 319 — — 44 363 Europe — — — — — Logistics $ 84 $ — $ — $ — $ 84 Directories $ — $ — $ — $ 19 $ 19 North America — — — 19 19 Europe — — — — — Office Products $ — $ — $ 119 $ — $ 119 Total $ 403 $ 260 $ 119 $ 63 $ 845 Timing of Revenue Recognition Products and services transferred at a point in time $ 288 $ 228 $ 119 $ 43 $ 678 Products and services transferred over time 115 32 — 20 167 Total $ 403 $ 260 $ 119 $ 63 $ 845 Three Months Ended March 31, 2018 Magazines, Catalogs and Office Logistics Book Products Other Total Major Products / Service Lines Book (a) $ — $ 249 $ — $ — $ 249 Magazines and Catalogs (b) $ 400 $ — $ — $ 99 $ 499 North America 400 — — 41 441 Europe — — — 58 58 Logistics $ 27 $ — $ — $ — $ 27 Directories $ — $ — $ — $ 31 $ 31 North America — — — 27 27 Europe — — — 4 4 Office Products $ — $ — $ 123 $ — $ 123 Total $ 427 $ 249 $ 123 $ 130 $ 929 Timing of Revenue Recognition Products and services transferred at a point in time $ 369 $ 221 $ 123 $ 112 $ 825 Products and services transferred over time 58 28 — 18 104 Total $ 427 $ 249 $ 123 $ 130 $ 929 (a) Includes e-book formatting and supply chain management associated with book production (b) Includes premedia and co-mail |
Schedule of Changes in the Contract Assets and Liabilities | The following table provides changes in contract assets and liabilities during the three months ended March 31, 2019: Short-Term Contract Assets Long-Term Contract Assets Contract Liabilities Beginning Balance, January 1, 2019 $ 44 $ 30 $ 16 Additions to unbilled accounts receivable 31 — — Unbilled accounts receivable recognized in trade receivables (29 ) — — Amortization of contract acquisition costs — (3 ) — Revenue recognized that was included in contract liabilities as of January 1, 2019 — — (8 ) Increases due to cash received — — 6 Ending Balance, March 31, 2019 $ 46 $ 27 $ 14 |
Schedule of Transactions Affecting Allowance for Doubtful Accounts Receivable | Transactions affecting the allowances for doubtful accounts receivable balance during the three months ended March 31, 2019 were as follows: March 31, 2019 Balance, beginning of year $ 14 Provisions charged to expense 3 Write-offs and other (1 ) Balance, end of year $ 16 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Components of Total Net Lease Cost | The components of total net lease cost were as follows: Three Months Ended March 31, 2019 Operating lease cost $ 17 Sublease (income) (2 ) Variable lease cost 3 Total net lease cost $ 18 |
Supplemental Non-cash Information Related to Leases | Supplemental non-cash information related to leases is included below: Three Months Ended March 31, 2019 ROU assets acquired in exchange for lease obligations: ROU assets Operating leases $ 2 Lease obligations Operating leases $ 2 |
Supplemental Information Related to Leases | Supplemental information related to leases is included below: March 31, 2019 Weighted Average Remaining Lease Term (years) Operating leases 5.5 Financing leases 2.4 Weighted Average Discount Rate Operating leases 8.3 % Financing leases 6.7 % |
Schedule of Annual Maturities of Lease Liabilities | The annual maturities of lease liabilities as of March 31, 2019 were as follows: Operating Leases 2019 $ 44 2020 51 2021 43 2022 34 2023 24 2024 & thereafter 47 Total undiscounted lease payments 243 Imputed interest (47 ) Total lease liabilities $ 196 |
ASU 2016-02 | |
Impact of Adopting Accounting Standards Update Adjustment to Accounts | Based upon the balances that existed as of December 31, 2018, the Company recorded adjustments to the following accounts as of January 1, 2019: As Reported Adjustments Adjusted December 31, 2018 Adoption of ASU 2016-02 January 1, 2019 Assets ROU assets for operating leases $ — $ 201 $ 201 Liabilities Accrued liabilities (a) $ 199 $ (1 ) $ 198 Short-term operating lease liabilities — 52 52 Long-term operating lease liabilities — 154 154 Other noncurrent liabilities (a) 61 (4 ) 57 (a) The total $5 adjustment relates to straight-line rent accruals that were reclassified to ROU assets for operating leases. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 and December 31, 2018 were as follows: March 31, December 31, 2019 2018 Raw materials and manufacturing supplies $ 132 $ 119 Work in process 56 50 Finished goods 84 80 Last in, first out reserve (51 ) (52 ) Total $ 221 $ 197 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Components of Company's Property, Plant and Equipment | The components of the Company’s property, plant and equipment at March 31, 2019 and December 31, 2018 were as follows: March 31, December 31, 2019 2018 Land $ 43 $ 43 Buildings 712 709 Machinery and equipment 3,614 3,759 4,369 4,511 Less: Accumulated depreciation (3,867 ) (4,003 ) Total $ 502 $ 508 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 were as follows: Magazines, Catalogs and Logistics Book Office Products Other Total Net book value as of December 31, 2018 Goodwill $ 523 $ 354 $ 110 $ 5 $ 992 Accumulated impairment losses (502 ) (303 ) (79 ) (5 ) (889 ) Total 21 51 31 — 103 Net book value as of March 31, 2019 Goodwill 523 354 110 5 992 Accumulated impairment losses (502 ) (303 ) (79 ) (5 ) (889 ) Total $ 21 $ 51 $ 31 $ — $ 103 |
Components of Other Intangible Assets | The components of other intangible assets at March 31, 2019 and December 31, 2018 were as follows: March 31, 2019 December 31, 2018 Gross Carrying Accumulated Net Book Gross Carrying Accumulated Net Book Amount Amortization Value Amount Amortization Value Customer relationships $ 268 $ (141 ) $ 127 $ 268 $ (137 ) $ 131 Trade names 30 (7 ) 23 9 (6 ) 3 Total amortizable other intangible assets 298 (148 ) 150 277 (143 ) 134 Indefinite-lived trade names 1 — 1 22 — 22 Total other intangible assets $ 299 $ (148 ) $ 151 $ 299 $ (143 ) $ 156 |
Schedule of Estimated Annual Amortization Expense Related to all Amortizable Intangible Assets | The following table outlines the estimated annual amortization expense related to all amortizable intangible assets: For the year ending December 31, Amount 2019 $ 19 2020 19 2021 17 2022 16 2023 15 2024 and thereafter 69 Total $ 155 |
Restructuring, Impairment and_2
Restructuring, Impairment and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Net Restructuring, Impairment and Other Charges | For the three months ended March 31, 2019 and 2018, the Company recorded the following net restructuring, impairment and other charges: Other Total Three Months Ended Employee Restructuring Restructuring Other March 31, 2019 Terminations Charges Charges Impairment Charges Total Magazines, Catalogs and Logistics $ 5 $ 4 $ 9 $ 2 $ — $ 11 Book — 1 1 — — 1 Corporate — 1 1 — — 1 Total $ 5 $ 6 $ 11 $ 2 $ — $ 13 Other Total Three Months Ended Employee Restructuring Restructuring Other March 31, 2018 Terminations Charges Charges Impairment Charges Total Magazines, Catalogs and Logistics $ 3 $ 2 $ 5 $ (1 ) $ — $ 4 Book — 1 1 — — 1 Office Products 1 — 1 — — 1 Total $ 4 $ 3 $ 7 $ (1 ) $ — $ 6 |
Schedule of Changes in the Restructuring Reserve | The restructuring reserve as of December 31, 2018 and March 31, 2019, and changes during the three months ended March 31, 2019 were as follows: December 31, Restructuring Cash March 31, 2018 Charges Other Paid 2019 Employee terminations $ 8 $ 5 $ — $ — $ 13 Multiemployer pension plan withdrawal obligations 32 1 — (2 ) 31 Other 1 5 — (2 ) 4 Total $ 41 $ 11 $ — $ (4 ) $ 48 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of the Company's Debt | The Company’s debt at March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 Borrowings under the Revolving Credit Facility $ 133 $ 64 Term Loan Facility due September 30, 2022 (a ) 249 260 8.75% Senior Secured Notes due October 15, 2023 450 450 Capital lease and other obligations 2 4 Unamortized debt issuance costs (10 ) (11 ) Total debt 824 767 Less: current portion (175 ) (108 ) Long-term debt $ 649 $ 659 (a) The borrowings under the Term Loan Facility are subject to a variable interest rate. As of March 31, 2019 and December 31, 2018, the interest rate was 8.00% and 8.02%, respectively. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 2018 Net (loss) per common share: Basic $ (3.79 ) $ (0.32 ) Diluted $ (3.79 ) $ (0.32 ) Numerator: Net (loss) $ (126 ) $ (11 ) Denominator: Weighted average number of common shares outstanding 33.3 34.7 Dilutive options and awards — — Diluted weighted average number of common shares outstanding 33.3 34.7 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Estimated Net Pension Loss (Income) | The components of the estimated net pension loss (income) for the three months ended March 31, 2019 and 2018 were as follows: Three Months Ended March 31, 2019 Qualified Non-Qualified & International Total Interest cost $ 20 $ 1 $ 21 Expected return on plan assets (33 ) — (33 ) Amortization of actuarial loss 3 — 3 Settlement of retirement obligations 135 — 135 Net periodic benefit loss $ 125 $ 1 $ 126 Three Months Ended March 31, 2018 Qualified Non-Qualified & International Total Interest cost $ 21 $ 1 $ 22 Expected return on plan assets (39 ) — (39 ) Amortization of actuarial loss 5 — 5 Net periodic benefit (income) loss $ (13 ) $ 1 $ (12 ) |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Loss | The following table summarizes accumulated other comprehensive loss by component as of December 31, 2018 and March 31, 2019 and changes during the three months ended March 31, 2019. Pension Translation Plan Cost Adjustments Total Balance at December 31, 2018 $ (529 ) $ (55 ) $ (584 ) Other comprehensive income before reclassifications 105 1 106 Amounts reclassified from accumulated other comprehensive loss 2 — 2 Net change in accumulated other comprehensive loss 107 1 108 Balance at March 31, 2019 $ (422 ) $ (54 ) $ (476 ) In the first quarter of 2019, the Company completed a partial settlement of its retirement benefit obligations and, as a result, the Company’s pension assets and liabilities were remeasured as of the settlement date. The impact, net of tax, to the Company’s accumulated other comprehensive loss was a decrease of $105 million. Refer to Note 12, Retirement Plans , for more information. The following table summarizes accumulated other comprehensive loss by component as of December 31, 2017 and March 31, 2018 and changes during the three months ended March 31, 2018. Pension Translation Plan Cost Adjustments Total Balance at December 31, 2017 $ (428 ) $ (48 ) $ (476 ) Other comprehensive income before reclassifications — 5 5 Amounts reclassified from accumulated other comprehensive loss 4 — 4 Reclassification to accumulated deficit (97 ) — (97 ) Net change in accumulated other comprehensive loss (93 ) 5 (88 ) Balance at March 31, 2018 $ (521 ) $ (43 ) $ (564 ) |
Schedule of Reclassifications From Accumulated Other Comprehensive Loss | Reclassifications from accumulated other comprehensive loss for the three months ended March 31, 2019 and 2018 were as follows: Three Months Ended March 31, 2019 2018 Amortization of pension plan cost: Net actuarial loss (a) $ 3 $ 5 Reclassifications before tax 3 5 Income tax expense 1 1 Reclassifications, net of tax $ 2 $ 4 (a) Amortization of pension plan cost is included in the calculation of net periodic pension plan (income) expense that is recognized all in investment and other income-net in the condensed consolidated statements of operations (see Note 12, Retirement Plans |
Stock and Incentive Programs (T
Stock and Incentive Programs (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share Based Compensation [Abstract] | |
Summary of Restricted Stock Units Activity | A summary of the Company’s RSU activity for LSC Communications employees, officers and directors as of December 31, 2018 and March 31, 2019, and changes during the three months ended March 31, 2019 is presented below. Weighted Shares Average Grant (thousands) Date Fair Value Nonvested at December 31, 2018 897 $ 19.65 Granted 927 6.28 Vested (338 ) 25.59 Forfeited (2 ) 17.62 Nonvested at March 31, 2019 1,484 $ 9.94 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 financial statements. Income (Loss) Depreciation Three Months Ended Net from Assets of and Capital March 31, 2019 Sales Operations Operations Amortization Expenditures Magazines, Catalogs and Logistics $ 403 $ (31 ) $ 795 $ 15 $ 10 Book 260 13 647 12 17 Office Products 119 8 329 3 — Total reportable segments 782 (10 ) 1,771 30 27 Other 63 4 90 1 1 Corporate — (13 ) 86 — — Total operations $ 845 $ (19 ) $ 1,947 $ 31 $ 28 Income (Loss) Depreciation Three Months Ended Net from Assets of and Capital March 31, 2018 Sales Operations Operations Amortization Expenditures Magazines, Catalogs and Logistics $ 427 $ (14 ) $ 742 $ 16 $ 9 Book 249 9 565 14 9 Office Products 123 2 372 4 — Total reportable segments 799 (3 ) 1,679 34 18 Other 130 7 194 4 1 Corporate — (10 ) 84 — 1 Total operations $ 929 $ (6 ) $ 1,957 $ 38 $ 20 |
Overview and Basis of Present_2
Overview and Basis of Presentation - Narrative (Detail) - Merger Agreement | Oct. 30, 2018$ / shares |
Maximum | |
Overview And Basis Of Presentation [Line Items] | |
Dividends payable per share | $ 0.26 |
Class A Common Stock | |
Overview And Basis Of Presentation [Line Items] | |
Business combination, common stock conversion ratio | 0.625 |
Business Combination and Disp_3
Business Combination and Disposition - Narrative (Detail) - USD ($) | Sep. 28, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 103,000,000 | $ 103,000,000 | |||
Acquisition-related expenses | $ 1,000,000 | ||||
Business acquisition nonrecurring pro forma adjustments affecting net (loss) | 0 | $ 0 | |||
Other | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 0 | 0 | |||
Other | Europe | |||||
Business Acquisition [Line Items] | |||||
Proceeds from sale of business | $ 47,000,000 | ||||
Income tax non-cash provision recorded | 25,000,000 | ||||
Print Logistics | |||||
Business Acquisition [Line Items] | |||||
Purchase price of acquisition, cash | 52,000,000 | $ 58,000,000 | |||
Net working capital settlement | $ 6,000,000 | ||||
Goodwill | 21,000,000 | ||||
2018 Acquisition | |||||
Business Acquisition [Line Items] | |||||
Tax deductible goodwill | $ 25,000,000 |
Business Combination and Disp_4
Business Combination and Disposition - Schedule of Purchase Price Allocation for Acquisitions (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Goodwill | $ 103 | $ 103 |
Print Logistics | ||
Business Acquisition [Line Items] | ||
Accounts Receivable | 40 | |
Prepaid expenses and other current assets | 1 | |
Property, plant and equipment | 8 | |
Other intangible assets | 17 | |
Goodwill | 21 | |
Accounts payable and accrued liabilities | (35) | |
Purchase price and net cash paid | $ 52 |
Business Combination and Disp_5
Business Combination and Disposition - Fair Values, Valuation Techniques and Related Unobservable Inputs of Level Three (Detail) - Customer Relationships - Fair Value, Inputs, Level 3 - Fair Value, Measurements, Nonrecurring $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Existing Customer Growth Rate | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Unobservable Input | (3.5) |
Attrition Rate | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Unobservable Input | 7.5 |
Discount Rate | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Unobservable Input | 18 |
Multi-period excess earnings method | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair Value | $ 17 |
Business Combination and Disp_6
Business Combination and Disposition - Pro Forma Financial Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Combinations [Abstract] | ||
Net sales | $ 845 | $ 973 |
Net (loss) | (126) | (12) |
Amortization of purchased intangibles | $ 5 | $ 5 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 845 | $ 929 |
Book | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 260 | 249 |
Magazines and Catalogs | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 363 | 499 |
Magazines and Catalogs | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 363 | 441 |
Magazines and Catalogs | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 58 |
Logistics | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 84 | 27 |
Directories | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 19 | 31 |
Directories | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 19 | 27 |
Directories | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 4 |
Office Products | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 119 | 123 |
Major Products/Service Lines | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 845 | 929 |
Magazines, Catalogs and Logistics | Book | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Magazines, Catalogs and Logistics | Magazines and Catalogs | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 319 | 400 |
Magazines, Catalogs and Logistics | Magazines and Catalogs | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 319 | 400 |
Magazines, Catalogs and Logistics | Magazines and Catalogs | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Magazines, Catalogs and Logistics | Logistics | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 84 | 27 |
Magazines, Catalogs and Logistics | Directories | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Magazines, Catalogs and Logistics | Directories | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Magazines, Catalogs and Logistics | Directories | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Magazines, Catalogs and Logistics | Office Products | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Magazines, Catalogs and Logistics | Major Products/Service Lines | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 403 | 427 |
Book | Book | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 260 | 249 |
Book | Magazines and Catalogs | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Book | Magazines and Catalogs | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Book | Magazines and Catalogs | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Book | Logistics | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Book | Directories | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Book | Directories | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Book | Directories | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Book | Office Products | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Book | Major Products/Service Lines | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 260 | 249 |
Office Products | Book | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Office Products | Magazines and Catalogs | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Office Products | Magazines and Catalogs | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Office Products | Magazines and Catalogs | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Office Products | Logistics | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Office Products | Directories | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Office Products | Directories | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Office Products | Directories | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Office Products | Office Products | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 119 | 123 |
Office Products | Major Products/Service Lines | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 119 | 123 |
Other | Book | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Other | Magazines and Catalogs | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 44 | 99 |
Other | Magazines and Catalogs | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 44 | 41 |
Other | Magazines and Catalogs | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 58 |
Other | Logistics | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Other | Directories | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 19 | 31 |
Other | Directories | North America | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 19 | 27 |
Other | Directories | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 4 |
Other | Office Products | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Other | Major Products/Service Lines | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 63 | 130 |
Products and Services Transferred at a Point in Time | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 678 | 825 |
Products and Services Transferred at a Point in Time | Magazines, Catalogs and Logistics | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 288 | 369 |
Products and Services Transferred at a Point in Time | Book | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 228 | 221 |
Products and Services Transferred at a Point in Time | Office Products | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 119 | 123 |
Products and Services Transferred at a Point in Time | Other | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 43 | 112 |
Products and Services Transferred Over Time | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 167 | 104 |
Products and Services Transferred Over Time | Magazines, Catalogs and Logistics | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 115 | 58 |
Products and Services Transferred Over Time | Book | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 32 | 28 |
Products and Services Transferred Over Time | Office Products | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Products and Services Transferred Over Time | Other | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 20 | 18 |
Timing of Revenue Recognition | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 845 | 929 |
Timing of Revenue Recognition | Magazines, Catalogs and Logistics | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 403 | 427 |
Timing of Revenue Recognition | Book | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 260 | 249 |
Timing of Revenue Recognition | Office Products | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 119 | 123 |
Timing of Revenue Recognition | Other | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 63 | $ 130 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Changes in the Contract Assets and Liabilities (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Contract Liabilities | |
Beginning Balance | $ 16 |
Revenue recognized that was included in contract liabilities as of January 1, 2019 | (8) |
Increases due to cash received | 6 |
Ending Balance | 14 |
Short-Term Contract Assets | |
Contract Assets | |
Beginning Balance | 44 |
Additions to unbilled accounts receivable | 31 |
Unbilled accounts receivable recognized in trade receivables | (29) |
Amortization of contract acquisition costs | 0 |
Ending Balance | 46 |
Long-Term Contract Assets | |
Contract Assets | |
Beginning Balance | 30 |
Additions to unbilled accounts receivable | 0 |
Unbilled accounts receivable recognized in trade receivables | 0 |
Amortization of contract acquisition costs | (3) |
Ending Balance | $ 27 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Disaggregation Of Revenue [Abstract] | ||
Trade receivables | $ 487 | $ 488 |
Recenue Recognition - Schedule
Recenue Recognition - Schedule of Transactions Affecting Allowance for Doubtful Accounts Receivable (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | ||
Balance, beginning of year | $ 14 | |
Provisions charged to expense | 3 | $ 2 |
Write-offs and other | (1) | |
Balance, end of year | $ 16 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Lessee Lease Description [Line Items] | |||
Operating lease, right-of-use asset | $ 192,000,000 | $ 201,000,000 | $ 0 |
Operating lease, liability | $ 196,000,000 | ||
Initial lease term | 12 months | ||
Operating cash outflows from operating leases | $ 16,000,000 | ||
Finance lease ROU assets or obligations acquired | 0 | ||
Additional operating leases not commenced, undiscounted amount | $ 9,000,000 | ||
Sublease termination notice period | 90 days | ||
Minimum | |||
Lessee Lease Description [Line Items] | |||
Renewal period | 1 year | ||
Operating leases commenced, lease terms | 4 years | ||
Sublease renewal period | 6 months | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Renewal period | 5 years | ||
Operating leases commenced, lease terms | 5 years | ||
Sublease renewal period | 5 years | ||
ASU 2016-02 | |||
Lessee Lease Description [Line Items] | |||
Operating lease, right-of-use asset | 206,000,000 | ||
Operating lease, liability | $ 206,000,000 |
Leases - Impact of Adopting Acc
Leases - Impact of Adopting Accounting Standards Update Adjustment to Accounts (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
ROU assets for operating leases | $ 192 | $ 201 | $ 0 |
Liabilities | |||
Accrued liabilities | 235 | 198 | 199 |
Short-term operating lease liabilities | 45 | 52 | 0 |
Long-term operating lease liabilities | 153 | 154 | 0 |
Other noncurrent liabilities | $ 50 | 57 | 61 |
As Reported | |||
Assets | |||
ROU assets for operating leases | 0 | ||
Liabilities | |||
Accrued liabilities | 199 | ||
Short-term operating lease liabilities | 0 | ||
Long-term operating lease liabilities | 0 | ||
Other noncurrent liabilities | $ 61 | ||
ASU 2016-02 | |||
Assets | |||
ROU assets for operating leases | 206 | ||
ASU 2016-02 | Adjustments | |||
Assets | |||
ROU assets for operating leases | 201 | ||
Liabilities | |||
Accrued liabilities | (1) | ||
Short-term operating lease liabilities | 52 | ||
Long-term operating lease liabilities | 154 | ||
Other noncurrent liabilities | $ (4) |
Leases - Impact of Adopting A_2
Leases - Impact of Adopting Accounting Standards Update Adjustment to Accounts (Parenthetical) (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Straight line rent accruals adjustments | $ 5 |
Leases - Components of Total Ne
Leases - Components of Total Net Lease Cost (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 17 |
Sublease (income) | (2) |
Variable lease cost | 3 |
Total net lease cost | $ 18 |
Leases - Supplemental Non-cash
Leases - Supplemental Non-cash Information Related to Leases (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
ROU assets acquired in exchange for lease obligations: | |
ROU assets, Operating leases | $ 2 |
Lease obligations, Operating leases | $ 2 |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Detail) | Mar. 31, 2019 |
Weighted Average Remaining Lease Term (years) | |
Operating leases | 5 years 6 months |
Financing leases | 2 years 4 months 24 days |
Weighted Average Discount Rate | |
Operating leases | 8.30% |
Financing leases | 6.70% |
Leases - Schedule of Annual Mat
Leases - Schedule of Annual Maturities of Lease Liabilities (Detail) $ in Millions | Mar. 31, 2019USD ($) |
Operating Leases | |
2019 | $ 44 |
2020 | 51 |
2021 | 43 |
2022 | 34 |
2023 | 24 |
2024 & thereafter | 47 |
Total undiscounted lease payments | 243 |
Imputed interest | (47) |
Total lease liabilities | $ 196 |
Inventories - Components of the
Inventories - Components of the Company's Inventories (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Net [Abstract] | ||
Raw materials and manufacturing supplies | $ 132 | $ 119 |
Work in process | 56 | 50 |
Finished goods | 84 | 80 |
Last in, first out reserve | (51) | (52) |
Total | $ 221 | $ 197 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Company's Property, Plant and Equipment (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Abstract] | ||
Land | $ 43 | $ 43 |
Buildings | 712 | 709 |
Machinery and equipment | 3,614 | 3,759 |
Property, plant and equipment, gross | 4,369 | 4,511 |
Less: Accumulated depreciation | (3,867) | (4,003) |
Total | $ 502 | $ 508 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 24 | $ 31 | |
Prepaid expenses and other current assets | |||
Property Plant And Equipment [Line Items] | |||
Net book value of assets held for sale | $ 3 | $ 3 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Changes in the Carrying Amount of Goodwill (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill [Line Items] | ||
Goodwill gross | $ 992 | $ 992 |
Accumulated impairment losses | (889) | (889) |
Goodwill | 103 | 103 |
Magazines, Catalogs and Logistics | ||
Goodwill [Line Items] | ||
Goodwill gross | 523 | 523 |
Accumulated impairment losses | (502) | (502) |
Goodwill | 21 | 21 |
Book | ||
Goodwill [Line Items] | ||
Goodwill gross | 354 | 354 |
Accumulated impairment losses | (303) | (303) |
Goodwill | 51 | 51 |
Office Products | ||
Goodwill [Line Items] | ||
Goodwill gross | 110 | 110 |
Accumulated impairment losses | (79) | (79) |
Goodwill | 31 | 31 |
Other | ||
Goodwill [Line Items] | ||
Goodwill gross | 5 | 5 |
Accumulated impairment losses | (5) | (5) |
Goodwill | $ 0 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Schedule Of Other Intangible Assets [Line Items] | |||
Gross Carrying Amount, amortizable intangible assets | $ 298 | $ 277 | |
Accumulated Amortization, amortizable intangible assets | (148) | (143) | |
Net Book Value, amortizable intangible assets | 150 | 134 | |
Gross Carrying Amount, total other intangible assets | 299 | 299 | |
Net Book Value, total other intangible assets | 151 | 156 | |
Trade Names | |||
Schedule Of Other Intangible Assets [Line Items] | |||
Net Book Value, indefinite-lived trade names | 1 | 22 | |
Customer Relationships | |||
Schedule Of Other Intangible Assets [Line Items] | |||
Gross Carrying Amount, amortizable intangible assets | 268 | 268 | |
Accumulated Amortization, amortizable intangible assets | (141) | (137) | |
Net Book Value, amortizable intangible assets | 127 | 131 | |
Trade Names | |||
Schedule Of Other Intangible Assets [Line Items] | |||
Gross Carrying Amount, amortizable intangible assets | 30 | 9 | |
Accumulated Amortization, amortizable intangible assets | (7) | (6) | |
Net Book Value, amortizable intangible assets | $ 23 | $ 21 | $ 3 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Detail) - USD ($) $ in Millions | Jan. 01, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Schedule Of Other Intangible Assets [Line Items] | ||||
Definite-lived tradenames, net book value | $ 150 | $ 134 | ||
Amortization expense for other intangible assets | 5 | $ 5 | ||
Trade Names | ||||
Schedule Of Other Intangible Assets [Line Items] | ||||
Definite-lived tradenames, net book value | $ 21 | $ 23 | $ 3 | |
Definite-lived tradenames, useful life | 15 years |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Estimated Annual Amortization Expense Related to all Amortizable Intangible Assets (Detail) $ in Millions | Mar. 31, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2019 | $ 19 |
2020 | 19 |
2021 | 17 |
2022 | 16 |
2023 | 15 |
2024 and thereafter | 69 |
Total | $ 155 |
Restructuring, Impairment and_3
Restructuring, Impairment and Other Charges - Schedule of Net Restructuring, Impairment and Other Charges (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | $ 5 | $ 4 |
Other Restructuring Charges | 6 | 3 |
Total Restructuring Charges | 11 | 7 |
Impairment | 2 | (1) |
Other Charges | 0 | 0 |
Total | 13 | 6 |
Magazines, Catalogs and Logistics | ||
Restructuring Cost And Reserve [Line Items] | ||
Impairment | 2 | |
Total Operating Segments | Magazines, Catalogs and Logistics | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | 5 | 3 |
Other Restructuring Charges | 4 | 2 |
Total Restructuring Charges | 9 | 5 |
Impairment | 2 | (1) |
Other Charges | 0 | 0 |
Total | 11 | 4 |
Total Operating Segments | Book | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | 0 | 0 |
Other Restructuring Charges | 1 | 1 |
Total Restructuring Charges | 1 | 1 |
Impairment | 0 | 0 |
Other Charges | 0 | 0 |
Total | 1 | 1 |
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 | |
Corporate | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee Terminations | 0 | |
Other Restructuring Charges | 1 | |
Total Restructuring Charges | 1 | |
Impairment | 0 | |
Other Charges | 0 | |
Total | $ 1 |
Restructuring, Impairment and_4
Restructuring, Impairment and Other Charges - Narrative (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($)EmployeeFacility | Mar. 31, 2018USD ($)EmployeeFacility | |
Restructuring Cost And Reserve [Line Items] | ||
Employee-related termination costs | $ 5 | $ 4 |
Number of employees used to determine employee termination costs | Employee | 240 | 196 |
Other restructuring charges, net | $ 6 | $ 3 |
Impairment charges related to machinery and equipment | $ 2 | (1) |
Adjustment of previously recorded goodwill | 1 | |
Reduction of goodwill impairment charges | $ 1 | |
Magazines, Catalogs and Logistics | ||
Restructuring Cost And Reserve [Line Items] | ||
Number of facilities closed | Facility | 1 | 1 |
Impairment charges related to machinery and equipment | $ 2 | |
Termination One | ||
Restructuring Cost And Reserve [Line Items] | ||
Number of employees who were terminated as of date | Employee | 16 |
Restructuring, Impairment and_5
Restructuring, Impairment and Other Charges - Other Charges - Narrative (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Restructuring Cost And Reserve [Line Items] | |||
Accrued liabilities | $ 235 | $ 198 | $ 199 |
Other noncurrent liabilities | 50 | $ 57 | $ 61 |
Multiemployer pension plan withdrawal obligations | |||
Restructuring Cost And Reserve [Line Items] | |||
Accrued liabilities | 3 | ||
Other noncurrent liabilities | $ 19 |
Restructuring, Impairment and_6
Restructuring, Impairment and Other Charges - Schedule of Changes in the Restructuring Reserve (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Balance at the beginning | $ 41 |
Restructuring Charges | 11 |
Other | 0 |
Cash Paid | (4) |
Balance at the end | 48 |
Employee terminations | |
Restructuring Cost And Reserve [Line Items] | |
Balance at the beginning | 8 |
Restructuring Charges | 5 |
Other | 0 |
Cash Paid | 0 |
Balance at the end | 13 |
Other | |
Restructuring Cost And Reserve [Line Items] | |
Balance at the beginning | 1 |
Restructuring Charges | 5 |
Other | 0 |
Cash Paid | (2) |
Balance at the end | 4 |
Multiemployer pension plan withdrawal obligations | |
Restructuring Cost And Reserve [Line Items] | |
Balance at the beginning | 32 |
Restructuring Charges | 1 |
Other | 0 |
Cash Paid | (2) |
Balance at the end | $ 31 |
Restructuring, Impairment and_7
Restructuring, Impairment and Other Charges - Restructuring Reserve - Narrative (Detail) $ in Millions | Mar. 31, 2019USD ($) |
Restructuring And Related Activities [Abstract] | |
Current restructuring reserve | $ 23 |
Noncurrent restructuring reserve | $ 25 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Detail) | Mar. 31, 2019Facility |
Commitments And Contingencies Disclosure [Abstract] | |
Number of sites cited as potentially responsible party | 10 |
Number of previously and currently owned sites with potential remediation obligations | 3 |
Debt - Schedule of the Company'
Debt - Schedule of the Company's Debt (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Capital lease and other obligations | $ 2 | $ 4 | ||
Unamortized debt issuance costs | (10) | (11) | ||
Total debt | 824 | 767 | ||
Less: current portion | (175) | (108) | ||
Long-term debt | 649 | 659 | ||
Borrowings under the Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Term Loan Facility | 133 | 64 | ||
Term Loan Facility due September 30, 2022 | ||||
Debt Instrument [Line Items] | ||||
Term Loan Facility | [1] | 249 | 260 | |
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, 2019 and December 31, 2018, the interest rate was 8.00% and 8.02%, respectively. |
Debt - Schedule of the Compan_2
Debt - Schedule of the Company's Debt (Parenthetical) (Detail) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Term Loan Facility due September 30, 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument, maturity date | Sep. 30, 2022 | |
Debt instrument, variable interest rate | 8.00% | 8.02% |
8.75% Senior Secured Notes due October 15, 2023 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 8.75% | |
Debt instrument, maturity date | Oct. 15, 2023 |
Debt - Narrative (Detail)
Debt - Narrative (Detail) | 3 Months Ended | |||||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 20, 2018 | Sep. 30, 2016USD ($) | ||
Debt Instrument [Line Items] | ||||||
Amount of difference between fair value and book value | $ 30,000,000 | $ 22,000,000 | ||||
Weighted average interest rate on borrowings | 5.76% | |||||
Net interest expense | $ 19,000,000 | $ 20,000,000 | ||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowings | $ 133,000,000 | 64,000,000 | ||||
Credit Agreements | ||||||
Debt Instrument [Line Items] | ||||||
Allowable annual dividend payment under credit agreement | $ 50,000,000 | |||||
Credit Agreements | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, principal amount | 400,000,000 | |||||
Amended Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Covenant description | On December 20, 2018, the Company amended the Credit Agreement to, among other things, defer certain changes to the minimum Interest Coverage Ratio and the maximum Consolidated Leverage Ratio. As a result, the maximum Consolidated Leverage Ratio will be reduced to 3.00 to 1.00 with respect to any fiscal quarter ending on or after March 31, 2020, as opposed to March 31, 2019, as originally contemplated in the Credit Agreement. The minimum Interest Coverage Ratio will be increased to 3.50 to 1.00 with respect to any test period ending on or after March 31, 2020, as opposed to March 31, 2019, as originally contemplated in the Credit Agreement. Other terms, including the outstanding principal, maturity date and other debt covenants remain the same. | |||||
Maximum consolidated leverage reduced ratio | 3 | |||||
Minimum interest coverage increased ratio | 3.50 | |||||
Senior Secured Notes | ||||||
Debt Instrument [Line Items] | ||||||
Senior secured notes | $ 450,000,000 | 450,000,000 | 450,000,000 | |||
Term Loan Facility due September 30, 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowings | [1] | $ 249,000,000 | $ 260,000,000 | |||
Term Loan Facility due September 30, 2022 | Credit Agreements | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, principal amount | $ 375,000,000 | |||||
[1] | The borrowings under the Term Loan Facility are subject to a variable interest rate. As of March 31, 2019 and December 31, 2018, the interest rate was 8.00% and 8.02%, respectively. |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Detail) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Repurchase of common stock, shares | 0 | 0 |
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, 2019 | Mar. 31, 2018 | |
Net (loss) per common share: | ||
Basic | $ (3.79) | $ (0.32) |
Diluted | $ (3.79) | $ (0.32) |
Numerator: | ||
Net (loss) | $ (126) | $ (11) |
Denominator: | ||
Weighted average number of common shares outstanding | 33.3 | 34.7 |
Dilutive options and awards | 0 | 0 |
Diluted weighted average number of common shares outstanding | 33.3 | 34.7 |
Retirement Plans - Components o
Retirement Plans - Components of Estimated Net Pension (Income) Loss (Detail) - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 21 | $ 22 |
Expected return on plan assets | (33) | (39) |
Amortization of actuarial loss | 3 | 5 |
Settlement of retirement obligations | 135 | |
Net periodic benefit (income) loss | 126 | (12) |
Qualified | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 20 | 21 |
Expected return on plan assets | (33) | (39) |
Amortization of actuarial loss | 3 | 5 |
Settlement of retirement obligations | 135 | |
Net periodic benefit (income) loss | 125 | (13) |
Non-Qualified & International | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 1 | 1 |
Expected return on plan assets | 0 | 0 |
Amortization of actuarial loss | 0 | 0 |
Settlement of retirement obligations | 0 | |
Net periodic benefit (income) loss | $ 1 | $ 1 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Reduction in pension obligation under the annuity contract | $ 477 |
Reduction in net benefit plan asset | 466 |
Pension non-cash settlement expense | $ 135 |
U.S. Qualified Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Long-term rate of return at the time of settlement | 6.50% |
Discount rate at the time of settlement | 4.30% |
Decrease in discount rate at the time settlement | 0.010 |
Comprehensive Income - Schedule
Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | $ 178 | $ 248 |
Balance | 153 | 247 |
Pension Plan Cost | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (529) | (428) |
Other comprehensive income before reclassifications | 105 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 2 | 4 |
Reclassification to accumulated deficit | (97) | |
Net change in accumulated other comprehensive loss | 107 | (93) |
Balance | (422) | (521) |
Translation Adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (55) | (48) |
Other comprehensive income before reclassifications | 1 | 5 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Reclassification to accumulated deficit | 0 | |
Net change in accumulated other comprehensive loss | 1 | 5 |
Balance | (54) | (43) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (584) | (476) |
Other comprehensive income before reclassifications | 106 | 5 |
Amounts reclassified from accumulated other comprehensive loss | 2 | 4 |
Reclassification to accumulated deficit | (97) | |
Net change in accumulated other comprehensive loss | 108 | (88) |
Balance | $ (476) | $ (564) |
Comprehensive Income - Addition
Comprehensive Income - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
ASU 2018-02 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Cummulative effect on equity or net asset upon adoption of accounting standard | $ 97 | |
Pension Plan Cost | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Net impact to accumulated other comprehensive loss | $ 105 | 0 |
Cummulative effect on equity or net asset upon adoption of accounting standard | $ 97 |
Comprehensive Income - Schedu_2
Comprehensive Income - Schedule of Reclassifications From Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Amortization of Pension Plan Cost: Net Actuarial Loss | |||
Reclassification from Accumulated Other Comprehensive Loss | |||
Reclassifications before tax | [1] | $ 3 | $ 5 |
Accumulated Defined Benefit Plans Adjustment | |||
Reclassification from Accumulated Other Comprehensive Loss | |||
Reclassifications before tax | 3 | 5 | |
Income tax expense | 1 | 1 | |
Reclassifications, net of tax | $ 2 | $ 4 | |
[1] | Amortization of pension plan cost is included in the calculation of net periodic pension plan (income) expense that is recognized all in investment and other income-net in the condensed consolidated statements of operations (see Note 12, Retirement Plans). |
Stock and Incentive Programs -
Stock and Incentive Programs - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Share-based compensation | $ 3 | $ 3 |
Stock and Incentive Programs _2
Stock and Incentive Programs - Summary of Restricted Stock Units Activity (Detail) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Shares | |
Nonvested at beginning of period, Shares | shares | 897,000 |
Granted, Shares | shares | 926,870 |
Vested, Shares | shares | (338,000) |
Forfeited, Shares | shares | (2,000) |
Nonvested at end of period, Shares | shares | 1,484,000 |
Weighted Average Grant Date Fair Value | |
Nonvested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares | $ 19.65 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 6.28 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 25.59 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 17.62 |
Nonvested at end of period, Weighted Average Grant Date Fair Value | $ / shares | $ 9.94 |
Stock and Incentive Programs _3
Stock and Incentive Programs - Restricted Stock Units - Narrative (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | $ 3 | $ 3 |
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 | 926,870 | |
Potential payout for awards | 926,870 | |
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 | $ 1 | $ 2 |
Unrecognized share-based compensation cost | $ 10 | |
Equity instruments other than options expected to vest, Shares | 1,500,000 | |
Equity instruments other than options expected to vest, weighted-average grant date fair value | $ 9.94 | |
Unrecognized compensation expense, weighted average period of recognition | 2 years 6 months |
Segment Information - Narrative
Segment Information - Narrative (Detail) | 3 Months Ended |
Mar. 31, 2019SegmentCategory | |
Magazines, Catalogs and Logistics | |
Segment Reporting Information [Line Items] | |
Number of reporting units | Segment | 2 |
Office Products | |
Segment Reporting Information [Line Items] | |
Number of core product categories | Category | 5 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Net Sales | $ 845 | $ 929 |
Income (Loss) from Operations | (19) | (6) |
Assets of Operations | 1,947 | 1,957 |
Depreciation and Amortization | 31 | 38 |
Capital Expenditures | 28 | 20 |
Other | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 63 | 130 |
Income (Loss) from Operations | 4 | 7 |
Assets of Operations | 90 | 194 |
Depreciation and Amortization | 1 | 4 |
Capital Expenditures | 1 | 1 |
Total Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 782 | 799 |
Income (Loss) from Operations | (10) | (3) |
Assets of Operations | 1,771 | 1,679 |
Depreciation and Amortization | 30 | 34 |
Capital Expenditures | 27 | 18 |
Total Operating Segments | Magazines, Catalogs and Logistics | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 403 | 427 |
Income (Loss) from Operations | (31) | (14) |
Assets of Operations | 795 | 742 |
Depreciation and Amortization | 15 | 16 |
Capital Expenditures | 10 | 9 |
Total Operating Segments | Book | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 260 | 249 |
Income (Loss) from Operations | 13 | 9 |
Assets of Operations | 647 | 565 |
Depreciation and Amortization | 12 | 14 |
Capital Expenditures | 17 | 9 |
Total Operating Segments | Office Products | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 119 | 123 |
Income (Loss) from Operations | 8 | 2 |
Assets of Operations | 329 | 372 |
Depreciation and Amortization | 3 | 4 |
Capital Expenditures | 0 | 0 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 0 | 0 |
Income (Loss) from Operations | (13) | (10) |
Assets of Operations | 86 | 84 |
Depreciation and Amortization | 0 | 0 |
Capital Expenditures | $ 0 | $ 1 |