RR DONNELLEY
v3.8.0.1
Document and Entity Information - shares
shares in Millions
9 Months Ended
Sep. 30, 2017
Oct. 27, 2017
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2017  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q3  
Trading Symbol RRD  
Entity Registrant Name RR Donnelley & Sons Co  
Entity Central Index Key 0000029669  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Common Stock, Shares Outstanding   70.1
v3.8.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Sep. 30, 2017
Dec. 31, 2016
ASSETS    
Cash and cash equivalents $ 225.8 $ 317.5
Receivables, less allowances for doubtful accounts of $33.0 in 2017 (2016 - $35.9) 1,382.9 1,331.3
Inventories (Note 4) 457.1 386.8
Prepaid expenses and other current assets 152.8 136.7
Investment in LSC and Donnelley Financial (Note 2)   328.7
Total current assets 2,218.6 2,501.0
Property, plant and equipment-net (Note 5) 624.6 650.3
Goodwill (Note 6) 587.6 602.0
Other intangible assets-net (Note 6) 150.5 171.9
Deferred income taxes 123.2 108.9
Other noncurrent assets 252.2 234.7
Total assets 3,956.7 4,268.8
LIABILITIES    
Accounts payable 996.5 985.3
Accrued liabilities 463.9 541.7
Short-term and current portion of long-term debt (Note 15) 17.9 8.2
Total current liabilities 1,478.3 1,535.2
Long-term debt (Note 15) 2,232.2 2,379.2
Pension liabilities 103.2 119.4
Other postretirement benefits plan liabilities 130.2 134.1
Other noncurrent liabilities 175.8 193.1
Total liabilities 4,119.7 4,361.0
Commitments and Contingencies (Note 14)
RRD stockholders' equity    
Preferred stock, $1.00 par value Authorized: 2.0 shares; Issued: None
Common stock, $0.01 par value Authorized: 165.0 shares; Issued: 89.0 shares in 2017 and 2016 0.9 0.9
Additional paid-in-capital 3,450.7 3,468.5
Accumulated deficit (2,160.6) (2,155.4)
Accumulated other comprehensive loss (126.5) (55.7)
Treasury stock, at cost, 19.0 shares in 2017 (2016 - 19.1 shares) (1,341.4) (1,364.0)
Total RRD stockholders' equity (176.9) (105.7)
Noncontrolling interests 13.9 13.5
Total equity (163.0) (92.2)
Total liabilities and equity $ 3,956.7 $ 4,268.8
v3.8.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Sep. 30, 2017
Dec. 31, 2016
Statement Of Financial Position [Abstract]    
Receivables, allowance for doubtful accounts $ 33.0 $ 35.9
Preferred stock, par value $ 1.00 $ 1.00
Preferred stock, authorized 2,000,000 2,000,000
Preferred stock, Issued 0 0
Common stock, par value $ 0.01 $ 0.01
Common stock, Authorized 165,000,000 165,000,000
Common stock, Issued 89,000,000 89,000,000
Treasury stock, shares 19,000,000 19,100,000
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Millions, $ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Statement [Abstract]        
Products net sales $ 1,322.0 $ 1,327.8 $ 3,830.9 $ 3,772.5
Services net sales 412.9 397.8 1,182.9 1,201.6
Total net sales 1,734.9 1,725.6 5,013.8 4,974.1
Products cost of sales (exclusive of depreciation and amortization) 1,064.1 1,030.7 3,065.7 2,958.1
Services cost of sales (exclusive of depreciation and amortization) 346.4 330.7 992.8 1,002.9
Total cost of sales 1,410.5 1,361.4 4,058.5 3,961.0
Products gross profit 257.9 297.1 765.2 814.4
Services gross profit 66.5 67.1 190.1 198.7
Total gross profit 324.4 364.2 955.3 1,013.1
Selling, general and administrative expenses (exclusive of depreciation and amortization) 207.7 218.1 643.6 681.0
Restructuring, impairment and other charges-net (Note 7) 33.8 10.8 46.7 24.3
Depreciation and amortization 47.0 51.0 143.1 153.5
Other operating expense (income)   0.3   (12.0)
Income from operations 35.9 84.0 121.9 166.3
Interest expense-net 43.5 48.8 137.3 150.6
Investment and other income -net (2.8) (1.0) (47.2) (0.4)
Loss on debt extinguishments 6.5   20.1 85.3
(Loss) earnings before income taxes (11.3) 36.2 11.7 16.1
Income tax (benefit) expense (3.5) 13.9 (7.4) 12.9
Net (loss) earnings from continuing operations (7.8) 22.3 19.1 3.2
(Loss) income from discontinued operations, net of tax (Note 2)   (29.1)   15.8
Net (loss) earnings (7.8) (6.8) 19.1 19.0
Less: Income attributable to noncontrolling interests 0.2 0.3 0.7 0.8
Net (loss) earnings attributable to RRD common stockholders $ (8.0) $ (7.1) $ 18.4 $ 18.2
Basic net (loss) earnings per share attributable to RRD common stockholders (Note 11):        
Continuing operations $ (0.11) $ 0.31 $ 0.26 $ 0.03
Discontinued operations   (0.41)   0.23
Net (loss) earnings attributable to RRD stockholders (0.11) (0.10) 0.26 0.26
Diluted net (loss) earnings per share attributable to RRD common stockholders (Note 11):        
Continuing operations (0.11) 0.31 0.26 0.03
Discontinued operations   (0.41)   0.23
Net (loss) earnings attributable to RRD (0.11) (0.10) 0.26 0.26
Dividends declared per common share $ 0.14 $ 0.78 $ 0.42 $ 2.34
Weighted average number of common shares outstanding:        
Basic 70.2 70.0 70.1 70.0
Diluted 70.2 70.5 70.3 70.5
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]        
Net (loss) earnings $ (7.8) $ (6.8) $ 19.1 $ 19.0
Other comprehensive income (loss), net of tax (Note 12):        
Translation adjustments 17.7 (4.4) 46.8 (9.0)
Adjustment for available-for-sale securities (1.8)   (119.3)  
Adjustment for net periodic pension and postretirement benefits plan cost 0.7 (19.4) 2.1 (13.3)
Other comprehensive income (loss) 16.6 (23.8) (70.4) (22.3)
Comprehensive income (loss) 8.8 (30.6) (51.3) (3.3)
Less: comprehensive income attributable to noncontrolling interests 0.3 0.3 1.1 1.0
Comprehensive income (loss) attributable to RRD common stockholders $ 8.5 $ (30.9) $ (52.4) $ (4.3)
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
OPERATING ACTIVITIES    
Net earnings $ 19.1 $ 19.0
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:    
Impairment charges - net 21.8 0.8
Depreciation and amortization 143.1 312.5
Provision for doubtful accounts receivable 1.7 20.4
Share-based compensation 6.4 13.4
Deferred income taxes (10.1) (33.5)
Changes in uncertain tax positions 0.7 (0.4)
Gain on investments and other assets - net (2.8) (13.0)
Realized gain on disposition of available-for-sale securities - net (42.4)  
Loss on debt extinguishments 20.1 85.3
Net pension and other postretirement benefits plan income (11.0) (55.1)
Net loss on pension and other postretirement benefits plan settlements and curtailments (Note 8)   78.8
Other 14.7 9.6
Changes in operating assets and liabilities - net of dispositions and acquisitions:    
Accounts receivable - net (26.3) (122.4)
Inventories (62.5) (60.0)
Prepaid expenses and other current assets (6.3) (9.2)
Accounts payable (18.9) (160.8)
Income taxes payable and receivable (11.4) (35.6)
Accrued liabilities and other (36.1) (23.4)
Pension and other postretirement benefits plan contributions (12.4) (18.6)
Net cash (used in) provided by operating activities (12.6) 7.8
INVESTING ACTIVITIES    
Capital expenditures (77.2) (147.9)
Acquisitions of businesses, net of cash acquired   (47.5)
Disposition of businesses   13.7
Proceeds from sales of investments and other assets 127.6 3.7
Transfers (to) from restricted cash (2.4) 13.7
Other investing activities   (3.6)
Net cash provided by (used in) investing activities 48.0 (167.9)
FINANCING ACTIVITIES    
Net change in short-term debt 10.2 5.7
Payments of current maturities and long-term debt (200.9) (786.6)
Proceeds from issuances of long-term debt   1,164.0
Payments on Credit Agreement borrowings (1,000.0)  
Proceeds from Credit Agreement borrowings 1,165.0  
Proceeds from termination of interest rate swaps   2.5
Debt issuance costs 4.4 37.5
Dividends paid (29.4) (163.2)
Net transfer of cash and cash equivalents to LSC and Donnelley Financial (78.0)  
Other financing activities (1.6) 2.5
Net cash (used in) provided by financing activities (139.1) 187.4
Effect of exchange rate on cash and cash equivalents 12.0 (5.1)
Net (decrease) increase in cash and cash equivalents (91.7) 22.2
Cash and cash equivalents at beginning of year 317.5 389.6
Cash and cash equivalents at end of period 225.8 411.8
SUPPLEMENTAL NON-CASH DISCLOSURE:    
Assumption of warehousing equipment related to customer contract   8.8
Debt-for-equity exchange $ 132.9  
Debt-for-debt exchanges, including debt issuance costs of $5.5 million in 2016   $ 300.0
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)
$ in Millions
9 Months Ended
Sep. 30, 2016
USD ($)
Statement Of Cash Flows [Abstract]  
Debt-for-debt exchanges, debt issuance costs $ 5.5
v3.8.0.1
Basis of Presentation
9 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Basis of Presentation

1. Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of R.R. Donnelley & Sons Company and its subsidiaries (the “Company” or “RRD”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods and should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 28, 2017. Operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017. All significant 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.

Spinoff Transactions

On October 1, 2016, the Company completed the separation of its financial communications and data services business (“Donnelley Financial Solutions, Inc.” or “Donnelley Financial”) and the publishing and retail-centric print services and office products business (“LSC Communications, Inc.” or “LSC”) into two separate publicly-traded companies (the "Separation"). The Company completed the tax-free distribution of 80.75% of the outstanding common stock of each Donnelley Financial and LSC to the Company’s stockholders of record on September 23, 2016 who received one share of each Donnelley Financial and LSC for every eight shares of RRD common stock owned as of the record date (the “Distribution”). The Company retained 19.25% of the outstanding common stock of each Donnelley Financial and LSC. The historical financial results of Donnelley Financial and LSC prior to the Separation, are presented as discontinued operations on the Condensed Consolidated Statements of Operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Sales from RRD to Donnelley Financial and LSC previously eliminated in consolidation have been recast and are now shown as external sales within the financial results of continuing operations. These net sales were $72.5 million and $150.4 million for the three and nine months ended September 30, 2016, respectively. Unless indicated otherwise, the information in the Notes to Condensed Consolidated Financial Statements relates to the Company's continuing operations. Prior periods have been recast to reflect the Company's current segment reporting structure. See Note 2, Discontinued Operations, for more information on the Separation.

Reverse Stock Split

Immediately following the Distribution on October 1, 2016, the Company affected a one-for-three reverse stock split for RRD common stock (the “Reverse Stock Split”). The Reverse Stock Split was approved by the Company’s Board of Directors on September 14, 2016 and previously approved by the Company’s stockholders at the annual meeting on May 19, 2016. As a result of the Reverse Stock Split, the number of issued and outstanding and treasury shares of the Company’s common stock was reduced proportionally based on the Reverse Stock Split ratio of one share for every three shares of common stock held before the Reverse Stock Split.  

Revision of Net Sales and Cost of Sales

During the third quarter of 2017, the Company identified an error in the accounting for certain contracts with an inventory buy-back option within the Asia reporting unit, which is in the International segment. As a result, the error, which was determined by management to be immaterial to the previously issued financial statements, has been corrected herein from the amounts previously reported. There was no impact to net earnings (loss) or net earnings (loss) per share, or the Consolidated Statements of Comprehensive Income or Stockholders’ Equity. The following table presents the impact of the revision on net sales and cost of sales:  

 

As Reported

 

Adjustments

 

As Revised

 

Three months ended March 31, 2016

 

Products net sales

$

1,242.7

 

$

13.1

 

$

1,229.6

 

Total net sales

 

1,645.6

 

 

13.1

 

 

1,632.5

 

Products cost of sales

 

971.9

 

 

13.1

 

 

958.8

 

Total cost of sales

 

1,313.1

 

 

13.1

 

 

1,300.0

 

Three months ended June 30, 2016

 

Products net sales

$

1,231.7

 

$

16.6

 

$

1,215.1

 

Total net sales

 

1,632.6

 

 

16.6

 

 

1,616.0

 

Products cost of sales

 

985.2

 

 

16.6

 

 

968.6

 

Total cost of sales

 

1,316.2

 

 

16.6

 

 

1,299.6

 

Three months ended September 30, 2016

 

Products net sales

$

1,343.4

 

$

15.6

 

$

1,327.8

 

Total net sales

 

1,741.2

 

 

15.6

 

 

1,725.6

 

Products cost of sales

 

1,046.3

 

 

15.6

 

 

1,030.7

 

Total cost of sales

 

1,377.0

 

 

15.6

 

 

1,361.4

 

Three months ended December 31, 2016

 

Products net sales

$

1,470.3

 

$

17.4

 

$

1,452.9

 

Total net sales

 

1,876.3

 

 

17.4

 

 

1,858.9

 

Products cost of sales

 

1,161.0

 

 

17.4

 

 

1,143.6

 

Total cost of sales

 

1,512.6

 

 

17.4

 

 

1,495.2

 

Three months ended March 31, 2017

 

Products net sales

$

1,288.9

 

$

17.4

 

$

1,271.5

 

Total net sales

 

1,676.3

 

 

17.4

 

 

1,658.9

 

Products cost of sales

 

1,024.3

 

 

17.4

 

 

1,006.9

 

Total cost of sales

 

1,348.5

 

 

17.4

 

 

1,331.1

 

Three months ended June 30, 2017

 

Products net sales

$

1,263.4

 

$

26.0

 

$

1,237.4

 

Total net sales

 

1,646.0

 

 

26.0

 

 

1,620.0

 

Products cost of sales

 

1,020.7

 

 

26.0

 

 

994.7

 

Total cost of sales

 

1,342.9

 

 

26.0

 

 

1,316.9

 

The following table presents the impact of the related balance sheet revision on the December 31, 2016 Condensed Consolidated Balance Sheet:

 

As Reported

 

Adjustments

 

As Revised

 

Receivables, less allowance for doubtful accounts

$

1,354.4

 

$

(23.1

)

$

1,331.3

 

Inventories

 

379.6

 

 

7.2

 

 

386.8

 

Accounts payable

 

1,001.2

 

 

(15.9

)

 

985.3

 

The September 30, 2016 Consolidated Statement of Cash Flows has also been revised to reflect the impact of the above balance sheet revision.

v3.8.0.1
Discontinued Operations
9 Months Ended
Sep. 30, 2017
Discontinued Operations And Disposal Groups [Abstract]  
Discontinued Operations

2. Discontinued Operations

Immediately following the Distribution, the Company held approximately 6.2 million shares of Donnelley Financial common stock and approximately 6.2 million shares of LSC common stock. The Company accounted for these investments as available-for-sale equity securities. In March 2017, the Company sold the 6.2 million shares of LSC common stock it retained upon spinoff for net proceeds of $121.4 million, resulting in a realized loss of $51.6 million, which was recorded within investment and other income-net in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2017. In June 2017, the Company completed a non-cash debt-for-equity exchange in which RRD exchanged 6,143,208 of its retained shares of Donnelley Financial common stock for the extinguishment of $111.6 million in aggregate principal amount of RRD indebtedness. In August 2017, the Company disposed of its remaining 99,594 shares of Donnelley Financial common stock in exchange for the extinguishment of $1.9 million in aggregate principal amount of RRD indebtedness.  See Note 15, Debt, for additional details of these debt-for-equity transactions. As of September 30, 2017, the Company no longer held any shares of LSC or Donnelley Financial.  

 

The following details the financial results of discontinued operations:

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 2016

 

September 30, 2016

 

 

Net sales

$

1,122.6

 

$

3,303.4

 

 

Cost of sales

 

879.1

 

 

2,534.7

 

 

Operating expenses (a)

 

170.0

 

 

592.0

 

 

Interest and other expense net (b)

 

104.0

 

 

139.5

 

 

(Loss) earnings before income taxes

 

(30.5

)

 

37.2

 

 

Income tax (benefit) expense

 

(1.4

)

 

21.4

 

 

Net (loss) earnings from discontinued operations

$

(29.1

)

$

15.8

 

 

 

(a)

Includes spinoff transaction costs incurred of $27.0 million and $57.3 million during the three and nine month periods ended September 30, 2016, respectively.  

 

(b)

Includes the related interest expense of the corporate level debt which was retired in connection with the Separation totaling $17.8 million and $53.6 million for the three and nine months ended September 30, 2016, respectively. Also includes the losses on the extinguishment of corporate level debt executed in conjunction with the spinoff transactions totaling $85.3 million, for the three and nine months ended September 30, 2016.  

  

The significant non-cash items and capital expenditures of discontinued operations were as follows:

 

Nine Months Ended

 

 

September 30, 2016

 

Depreciation and amortization

$

159.0

 

Pension settlement charges

 

77.7

 

Impairment charges

 

1.5

 

Loss on debt extinguishments

 

85.3

 

Assumption of warehousing equipment related to customer contract

 

8.8

 

Purchase of property, plant and equipment

 

49.0

 

 

In connection with the Separation, the Company entered into transition services agreements with Donnelley Financial and LSC under which the companies will provide one another with certain services to help ensure an orderly transition following the Separation (the “Transition Services Agreements”). The charges for these services are intended to allow the companies, as applicable, to recover the direct and indirect costs incurred in providing such services. The Transition Services Agreements generally provide for a term of services starting at the Separation date and continuing for a period of up to twenty-four months following the Separation. During the three and nine months ended September 30, 2017, the Company recognized $1.4 million and $6.4 million, respectively, as a reduction of costs within selling, general and administrative expenses within the Condensed Consolidated Statements of Operations from the Transition Services Agreement.

 

The Company also entered into various commercial agreements which govern sales transactions between the companies. Under these commercial agreements, the Company recognized the following transactions with LSC and Donnelley Financial during the three and nine months ended September 30, 2017:

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2017

 

September 30, 2017

 

Net sales to LSC and Donnelley Financial

$

67.2

 

$

236.3

 

Purchases from LSC and Donnelley Financial

 

36.2

 

 

105.2

 

The Company also recognized $83.0 million of net cash inflow from Donnelley Financial and LSC within operating activities in the Condensed Consolidated Statements of Cash Flows during the nine months ended September 30, 2017.

v3.8.0.1
Acquisitions and Dispositions
9 Months Ended
Sep. 30, 2017
Business Combinations [Abstract]  
Acquisitions and Dispositions

3. Acquisitions and Dispositions

2016 Acquisition

On August 4, 2016, the Company acquired Precision Dialogue Holdings, LLC (“Precision Dialogue”), a provider of email marketing, direct mail marketing and other services with operations in the United States for a purchase price, net of cash acquired, of approximately $59.2 million. The acquisition expanded the Company’s ability to help its customers measure communications effectiveness and audience engagement. During the three and nine months ended September 30, 2017, Precision Dialogue contributed $17.0 million and $44.5 million, respectively, in net sales and earnings before income taxes of $2.9 million and $4.4 million, respectively. During both the three and nine months ended September 30, 2016, Precision Dialogue contributed $8.4 million in net sales and earnings before income taxes of $0.6 million. Precision Dialogue is included within the operating results of the Variable Print and Strategic Services segments.

 2016 Dispositions

On January 11, 2016, the Company sold two entities within the business process outsourcing reporting unit for net proceeds of $13.4 million. This resulted in a net gain of $12.3 million during the nine months ended September 30, 2016, which was recorded in other operating income in the Condensed Consolidated Statements of Operations. Additionally, in the third quarter of 2016, the Company sold three immaterial entities in the International segment, which resulted in a net loss of $0.3 million during the three and nine months ended September 30, 2016.

v3.8.0.1
Inventories
9 Months Ended
Sep. 30, 2017
Inventory Disclosure [Abstract]  
Inventories

4. Inventories

The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at September 30, 2017 and December 31, 2016 were as follows:

 

 

September 30,

 

 

December 31,

 

 

 

2017

 

 

2016

 

Raw materials and manufacturing supplies

 

$

168.6

 

 

$

141.0

 

Work in process

 

 

114.7

 

 

 

84.4

 

Finished goods

 

 

190.1

 

 

 

179.4

 

LIFO reserve

 

 

(16.3

)

 

 

(18.0

)

Total

 

$

457.1

 

 

$

386.8

 

 

  

v3.8.0.1
Property, Plant and Equipment
9 Months Ended
Sep. 30, 2017
Property Plant And Equipment [Abstract]  
Property, Plant and Equipment

5. Property, Plant and Equipment

The components of the Company’s property, plant and equipment at September 30, 2017 and December 31, 2016 were as follows:

 

September 30,

 

 

December 31,

 

 

 

2017

 

 

2016

 

Land

 

$

56.1

 

 

$

56.0

 

Buildings

 

 

415.0

 

 

 

403.0

 

Machinery and equipment

 

 

1,869.2

 

 

 

1,805.4

 

 

 

 

2,340.3

 

 

 

2,264.4

 

Less: Accumulated depreciation

 

 

(1,715.7

)

 

 

(1,614.1

)

Total

 

$

624.6

 

 

$

650.3

 

 

During the three and nine months ended September 30, 2017, depreciation expense was $34.6 million and $105.2 million, respectively.  During the three and nine months ended September 30, 2016, depreciation expense was $37.6 million and $116.2 million, respectively.  

v3.8.0.1
Goodwill and Other Intangible Assets
9 Months Ended
Sep. 30, 2017
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets

6. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the nine months ended September 30, 2017 were as follows:  

 

 

Variable

 

 

Strategic

 

 

 

 

 

 

 

 

 

 

 

Print

 

 

Services

 

 

International

 

 

Total

 

Net book value as of December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

1,823.0

 

 

$

365.2

 

 

$

1,017.9

 

 

$

3,206.1

 

Accumulated impairment losses

 

 

(1,550.5

)

 

 

(148.7

)

 

 

(904.9

)

 

 

(2,604.1

)

Total

 

 

272.5

 

 

 

216.5

 

 

 

113.0

 

 

 

602.0

 

Foreign exchange and other adjustments

 

 

 

 

 

 

 

 

6.9

 

 

 

6.9

 

Impairment charges

 

 

 

 

 

(21.3

)

 

 

 

 

 

(21.3

)

Net book value as of September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

1,824.1

 

 

 

365.2

 

 

 

1,090.3

 

 

 

3,279.6

 

Accumulated impairment losses

 

 

(1,551.6

)

 

 

(170.0

)

 

 

(970.4

)

 

 

(2,692.0

)

Total

 

$

272.5

 

 

$

195.2

 

 

$

119.9

 

 

$

587.6

 

During the third quarter of 2017, the Company recorded non-cash charges of $21.3 million to reflect the impairment of goodwill in the Strategic Services segment. See Note 7, Restructuring, Impairment and Other Charges, for further information.

The components of other intangible assets at September 30, 2017 and December 31, 2016 were as follows:

 

 

September 30, 2017

 

 

December 31, 2016

 

 

 

Gross

 

 

 

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

 

 

 

 

 

Carrying

 

 

Accumulated

 

 

Net Book

 

 

Carrying

 

 

Accumulated

 

 

Net Book

 

 

 

Amount

 

 

Amortization

 

 

Value

 

 

Amount

 

 

Amortization

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

532.9

 

 

$

(404.8

)

 

$

128.1

 

 

$

517.9

 

 

$

(370.7

)

 

$

147.2

 

Patents

 

 

2.0

 

 

 

(2.0

)

 

 

 

 

 

2.0

 

 

 

(2.0

)

 

 

 

Trademarks, licenses and agreements

 

 

26.2

 

 

 

(24.9

)

 

 

1.3

 

 

 

26.2

 

 

 

(24.4

)

 

 

1.8

 

Trade names

 

 

36.8

 

 

 

(15.7

)

 

 

21.1

 

 

 

36.8

 

 

 

(13.9

)

 

 

22.9

 

Total other intangible assets

 

$

597.9

 

 

$

(447.4

)

 

$

150.5

 

 

$

582.9

 

 

$

(411.0

)

 

$

171.9

 

Amortization expense for other intangible assets was $7.1 million and $21.6 million for the three and nine months ended September 30, 2017, respectively. Amortization expense for other intangible assets was $8.0 million and $25.7 million for the three and nine months ended September 30, 2016, respectively.

v3.8.0.1
Restructuring, Impairment and Other Charges
9 Months Ended
Sep. 30, 2017
Restructuring And Related Activities [Abstract]  
Restructuring, Impairment and Other Charges

7. Restructuring, Impairment and Other Charges

Restructuring, Impairment and Other Charges Recognized in Results of Operations

For the three months ended September 30, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges:  

Three Months Ended

 

Employee

 

 

Other

Restructuring

 

 

Total

Restructuring

 

 

 

 

 

 

Other

 

 

 

 

 

September 30, 2017

 

Terminations

 

 

Charges

 

 

Charges

 

 

Impairment

 

 

Charges

 

 

Total

 

Variable Print

 

$

3.0

 

 

$

0.6

 

 

$

3.6

 

 

$

0.2

 

 

$

0.4

 

 

$

4.2

 

Strategic Services

 

 

0.7

 

 

 

 

 

 

0.7

 

 

 

21.3

 

 

 

0.1

 

 

 

22.1

 

International

 

 

1.9

 

 

 

0.3

 

 

 

2.2

 

 

 

 

 

 

 

 

 

2.2

 

Corporate

 

 

5.1

 

 

 

0.2

 

 

 

5.3

 

 

 

 

 

 

 

 

 

5.3

 

Total

 

$

10.7

 

 

$

1.1

 

 

$

11.8

 

 

$

21.5

 

 

$

0.5

 

 

$

33.8

 

 

Three Months Ended

 

Employee

 

 

Other

Restructuring

 

 

Total

Restructuring

 

 

 

 

 

 

Other

 

 

 

 

 

September 30, 2016

 

Terminations

 

 

Charges

 

 

Charges

 

 

Impairment

 

 

Charges

 

 

Total

 

Variable Print

 

$

1.1

 

 

$

0.3

 

 

$

1.4

 

 

$

 

 

$

0.5

 

 

$

1.9

 

Strategic Services

 

 

1.2

 

 

 

 

 

 

1.2

 

 

 

 

 

 

0.1

 

 

 

1.3

 

International

 

 

0.9

 

 

 

0.2

 

 

 

1.1

 

 

 

 

 

 

 

 

 

1.1

 

Corporate

 

 

6.5

 

 

 

0.1

 

 

 

6.6

 

 

 

(0.1

)

 

 

 

 

 

6.5

 

Total

 

$

9.7

 

 

$

0.6

 

 

$

10.3

 

 

$

(0.1

)

 

$

0.6

 

 

$

10.8

 

For the nine months ended September 30, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges:

Nine Months Ended

 

Employee

 

 

Other

Restructuring

 

 

Total

Restructuring

 

 

 

 

 

 

Other

 

 

 

 

 

September 30, 2017

 

Terminations

 

 

Charges

 

 

Charges

 

 

Impairment

 

 

Charges

 

 

Total

 

Variable Print

 

$

4.0

 

 

$

0.9

 

 

$

4.9

 

 

$

(0.1

)

 

$

1.4

 

 

$

6.2

 

Strategic Services

 

 

1.8

 

 

 

0.3

 

 

 

2.1

 

 

 

21.8

 

 

 

0.3

 

 

 

24.2

 

International

 

 

6.4

 

 

 

2.2

 

 

 

8.6

 

 

 

 

 

 

 

 

 

8.6

 

Corporate

 

 

7.3

 

 

 

0.4

 

 

 

7.7

 

 

 

 

 

 

 

 

 

7.7

 

Total

 

$

19.5

 

 

$

3.8

 

 

$

23.3

 

 

$

21.7

 

 

$

1.7

 

 

$

46.7

 

 

Nine Months Ended

 

Employee

 

 

Other

Restructuring

 

 

Total

Restructuring

 

 

 

 

 

 

Other

 

 

 

 

 

September 30, 2016

 

Terminations

 

 

Charges

 

 

Charges

 

 

Impairment

 

 

Charges

 

 

Total

 

Variable Print

 

$

1.5

 

 

$

1.5

 

 

$

3.0

 

 

$

0.3

 

 

$

1.4

 

 

$

4.7

 

Strategic Services

 

 

1.7

 

 

 

 

 

 

1.7

 

 

 

 

 

 

0.3

 

 

 

2.0

 

International