Acquisitions and Dispositions (Tables)

9 Months Ended

Sep. 30, 2016

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 period 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 September 30,		Nine Months Ended September 30,
	2015		2015
Net sales	$	2,828.0	$	8,445.5
Net earnings attributable to RR Donnelley common stockholders		22.5		118.0
Net earnings per share attributable to RR Donnelley common stockholders:
Basic	$	0.32	$	1.69
Diluted	$	0.32	$	1.68

The following table outlines unaudited pro forma financial information for the three and nine months ended September 30, 2015:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2015		2015
Amortization of purchased intangibles	$	20.4	$	63.0
Restructuring, impairment and other charges		48.4		76.7

Pro Forma Adjustments Affecting Net Earnings (Loss)

Additionally, the pro forma adjustments affecting net earnings attributable to RR Donnelley common stockholders for the three and nine months ended September 30, 2015 were as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2015			2015
Depreciation and amortization of purchased assets, pre-tax	$	2.0		$	2.4
Acquisition-related expenses, pre-tax		0.2			18.8
Restructuring, impairment and other charges, pre-tax		4.5			28.6
Inventory fair value adjustment, pre-tax		6.7			9.9
Other pro forma adjustments, pre-tax		—			1.2
Income taxes		(4.8	)		(15.0	)

Precision Dialogue Holdings, LLC

Business Acquisition [Line Items]

Schedule of Final Purchase Price Allocation for Acquisitions

Based on the valuation, the preliminary purchase price allocation for the Precision Dialogue acquisition was as follows:


Accounts receivable	$	11.8
Inventories		0.4
Prepaid expenses and other current assets		1.0
Property, plant and equipment		6.9
Other intangible assets		14.7
Other noncurrent assets		1.2
Goodwill		41.0
Accounts payable and accrued liabilities		(11.1	)
Deferred taxes--net		(7.3	)
Total purchase price-net of cash acquired		58.6
Less: debt assumed		11.1
Net cash paid	$	47.5

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

The purchase price allocation is preliminary as the Company is still in the process of obtaining data to finalize the estimated fair values of certain intangible assets.

The fair values of other intangible assets, technology and goodwill associated with the Precision Dialogue acquisition 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	$	11.6	Excess earnings	Discount rate Attrition rate	16.0% 7.0% - 8.0%
Trade names		1.4	Relief-from-royalty method	Discount rate Royalty rate (pre-tax)	16.0% 0.75% - 1.25%
Technology		0.6	Relief-from-royalty method	Discount rate Royalty rate (pre-tax) Obsolescence factor	16.0% 15.0% 0.0% - 40.0%
Non-compete agreements		1.7	With and without method	Discount rate		16.0%

Courier Corporation

Business Acquisition [Line Items]

Schedule of Final Purchase Price Allocation for Acquisitions

Based on the valuations, the final purchase price allocation for the 2015 acquisitions was as follows:

Accounts receivable	$	36.2
Inventories		59.0
Prepaid expenses and other current assets		38.8
Property, plant and equipment		163.8
Other intangible assets		108.8
Other noncurrent assets		7.9
Goodwill		66.3
Accounts payable and accrued liabilities		(24.6	)
Other noncurrent liabilities		(10.5	)
Deferred taxes--net		(83.7	)
Total purchase price-net of cash acquired		362.0
Less: debt assumed		80.2
Less: settlement of accounts receivable for acquisition of a business		8.6
Less: value of common stock issued		155.2
Net cash paid	$	118.0

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

The fair values of other intangible assets, technology and goodwill associated with the acquisition of Courier 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	$	98.4	Excess earnings	Discount rate Attrition rate	14.0% - 17.0% 0.0% - 7.5%
Trade names		10.1	Relief-from-royalty method	Discount rate Royalty rate (pre-tax)	12.0% 0.3% - 1.0%
Technology		1.6	Relief-from-royalty method	Discount rate Royalty rate (pre-tax)	11.0% 15.0%
Non-compete agreement	0.3		Excess earnings	Discount rate		17.0%