RRD Reports $849M Loss; to Offer Senior Notes
CHICAGO—RR Donnelley reported a 2012 fourth-quarter net loss attributable to common shareholders of $849 million, or $4.70 per diluted share, on net sales of $2.7 billion compared to a net loss of $326.7 million, or $1.78 per diluted share, on net sales of $2.7 billion in the fourth quarter of 2011. The fourth-quarter net loss attributable to common shareholders included pre-tax net charges, primarily related to non-cash impairment, totaling $1.0 billion in 2012 and $483.9 million in 2011. The non-cash impairment charges followed its annual impairment test of indefinite-lived assets.
The company believes that certain non-GAAP measures, when presented in conjunction with comparable GAAP (Generally Accepted Accounting Principles) measures, are useful because that information is an appropriate measure for evaluating the company's operating performance. Internally, the company uses this non-GAAP information as an indicator of business performance, and evaluates management's effectiveness with specific reference to these indicators. These measures should be considered in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Non-GAAP net earnings attributable to common shareholders totaled $78.1 million, or $0.43 per diluted share, in the fourth quarter of 2012 compared to $85.2 million, or $0.46 per diluted share, in the fourth quarter of 2011. Fourth-quarter non-GAAP net earnings attributable to common shareholders exclude impairment and restructuring charges, gains on pension curtailment, losses on debt extinguishment, acquisition-related expenses and certain income tax adjustments in both years, as well as contingent compensation on a prior acquisition in the fourth quarter of 2011. For non-GAAP comparison purposes, the effective tax rate increased to 33.0 percent in the fourth quarter of 2012 from 18.8 percent in the fourth quarter of 2011, primarily due to certain state tax matters in the fourth quarter of 2011. A reconciliation of GAAP net earnings attributable to common shareholders to non-GAAP net earnings attributable to common shareholders is presented in the attached schedules.