Acquisitions and Dispositions (Tables)

3 Months Ended

Mar. 31, 2014

The unaudited pro forma financial information is not intended to represent or be indicative of the Company’s consolidated results of operations or financial condition that would have been reported had these acquisitions been completed as of the beginning of the periods presented and should not be taken as indicative of the Company’s future consolidated results of operations or financial condition. Pro forma adjustments are tax-effected at the applicable statutory tax rates.


	Three Months Ended March 31,
	2014			2013
Net sales	$	2,826.6		$	2,858.6
Net earnings (loss) attributable to RR Donnelley common shareholders		(17.7	)		8.7
Net earnings (loss) per share attributable to RR Donnelley common shareholders:
Basic	$	(0.09	)	$	0.04
Diluted	$	(0.09	)	$	0.04

Pro Forma Adjustments Affecting Net Earnings (Loss)

The unaudited pro forma financial information for the three months ended March 31, 2014 and 2013 includes $20.5 million and $21.5 million, respectively, for the amortization of purchased intangibles. The unaudited pro forma financial information includes restructuring, impairment and other charges from operations of $30.1 million and $39.0 million for the three months ended March 31, 2014 and 2013, respectively. Additionally, the pro forma adjustments affecting net earnings (loss) attributable to RR Donnelley common shareholders for the three months ended March 31, 2014 and 2013 were as follows:


	Three Months Ended March 31,
	2014			2013
Depreciation and amortization of purchased assets, pre-tax	$	(0.2	)	$	(1.9	)
Acquisition-related expenses, pre-tax		18.6			(16.6	)
Restructuring, impairment and other charges, pre-tax		17.1			(16.2	)
Inventory fair value adjustments, pre-tax		12.1			(14.3	)
Other pro forma adjustments, pre-tax		(10.6	)		9.9
Income taxes		(10.2	)		18.4

Consolidated Graphics, Esselte and MultiCorpora

Schedule of Purchase Price Allocation for Acquisitions

Based on the current valuations, the preliminary purchase price allocations for these acquisitions were as follows:

Accounts receivable	$	241.1
Inventories		89.8
Prepaid expenses and other current assets		14.0
Property, plant and equipment		341.4
Other intangible assets		205.3
Other noncurrent assets		7.4
Goodwill		298.8
Accounts payable and accrued liabilities		(211.2	)
Other noncurrent liabilities		(56.6	)
Deferred taxes-net		(94.4	)
Total purchase price-net of cash acquired		835.6
Less: debt assumed		118.4
Less: value of common stock issued		319.0
Less: gain on the bargain purchase		16.6
Net cash paid	$	381.6

Fair Value, Valuation Techniques and Related Unobservable Inputs of Level Three

The fair values of other intangible assets and goodwill associated with the acquisitions of Esselte, MultiCorpora and Consolidated Graphics were determined to be Level 3 under the fair value hierarchy. The following table presents the fair value, valuation techniques and related unobservable inputs for these Level 3 measurements:

	Fair Value		Valuation Technique	Unobservable Input	Range
Customer relationships	$	178.1	Excess earnings	Discount rate Attrition rate	19.0% - 21.0% 5.0%

Trade names		26.5	Relief-from-royalty method	Discount rate Royalty rate (after-tax)	19.0% 0.5% - 1.5%