XML 31 R9.htm IDEA: XBRL DOCUMENT v3.22.0.1
Discontinued Operations
12 Months Ended
Dec. 31, 2021
Discontinued Operations And Disposal Groups [Abstract]  
Discontinued Operations

Note 2. Discontinued Operations

On November 2, 2020, we sold DLS Worldwide, which was part of our broader Logistics business and a component of the Business Services reporting segment for $225.0 million cash, subject to a customary working capital adjustment and an escrow of $22.5 million. We entered into several commercial agreements whereby we continue to receive logistics services from the divested business.  Sales from the Logistics business to RRD previously eliminated in consolidation have been recast and are now shown as external sales within the financial results of discontinued operations below. The net sales were $38.7 million and $62.7 million, respectively, for the twelve months ended December 31, 2020 and 2019.

On November 3, 2020 we sold International Logistics, also a portion of our broader Logistics business and a component of the Business Services reporting segment for $13.0 million cash, subject to a customary working capital adjustment.

The sale of these businesses is part of our strategy to exit non-core businesses in order to pursue portfolio optimization and to reduce debt. As part of this strategic shift, we previously sold Print Logistics in July 2018 and Courier Logistics in March 2020.

The after-tax net gain on sale of discontinued operations of $127.4 million for the period ended December 31, 2020 reflects the net gain on sale of DLS Worldwide, Courier, and International Logistics.

Beginning in the third quarter of 2020, we have reflected the Print Logistics business, the Logistics Courier business, the DLS Worldwide business, and the International Logistics business, as discontinued operations for all periods presented in the Consolidated Statements of Operations.

During the year ended December 31, 2021 and 2020, we purchased $58.2 million and $8.9 million of logistics-related services from the Disposal group, respectively.

Results of discontinued operations were as follows:

 

Twelve Months Ended

 

 

December 31,

 

 

2020

 

 

2019

 

Net sales

$

632.5

 

 

$

865.7

 

Cost of sales

 

(548.6

)

 

 

(758.7

)

Selling, general, administrative and other operating expenses

 

(66.2

)

 

 

(95.1

)

Restructuring, impairment and other expense

 

(21.1

)

 

 

(98.6

)

Operating loss from discontinued operations

 

(3.4

)

 

 

(86.7

)

Income tax (benefit) expense

 

(0.9

)

 

 

1.7

 

Net loss from discontinued operations

$

(2.5

)

 

$

(88.4

)

 

Restructuring, impairment, and other expenses included $20.6 million and $98.5 million of non-cash charges related to impairment of goodwill recorded in 2020 and 2019 respectively.

During the first quarter of 2020, we identified a triggering event at our Logistics reporting unit. We determined that the fair value of our Logistics reporting unit was lower than its carrying value, resulting in a goodwill impairment charge of $20.6 million. The goodwill impairment charge resulted from reductions in the estimated fair value for this reporting unit based on lower expectations for future revenue, profitability and cash flows driven by expected reduced demand due to the COVID-19 pandemic. The goodwill impairment charge was determined using discounted cash flow analysis and comparable marketplace fair value data which utilized Level 3 inputs including forecasted future revenue and the selection of the discount rate.