Revenue Recognition (Notes)

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

The Company recognizes its products and services revenue based on when the transfer of control passes to the customer or when the service is completed and accepted by the customer.

The adoption of ASC 606 in the year ended December 31, 2018, did not have a material effect on the consolidated financial statements. In adopting ASC 606, the timing of recognition changed for certain variable consideration paid to customers and costs to obtain contracts with customers.

Revenue Disaggregation

The following table provides information about disaggregated revenue by the Company’s operating segments and major products and services offerings for the years ended December 31, 2019, 2018 and 2017:



	United States Print and Related Services		International		Total
Year ended December 31, 2019
Catalog, publications, retail inserts and directories	$	2,014.7	$	301.0	$	2,315.7
Direct mail and other printed products	681.6		83.7		765.3
Other	17.0		0.3		17.3
Total Products	2,713.3		385.0		3,098.3
Logistics services	429.4		17.0		446.4
Imaging, marketing services and other services	378.3		0.4		378.7
Total Services	807.7		17.4		825.1
Total Net Sales	$	3,521.0	$	402.4	$	3,923.4

Year ended December 31, 2018
Catalog, publications, retail inserts and directories	$	2,154.8	$	297.8	$	2,452.6
Direct mail and other printed products	633.7		70.3		704.0
Other	27.4		0.4		27.8
Total Products	2,815.9		368.5		3,184.4
Logistics services	429.0		18.6		447.6
Imaging, marketing services and other services	353.8		—		353.8
Total Services	782.8		18.6		801.4
Total Net Sales	$	3,598.7	$	387.1	$	3,985.8

Year ended December 31, 2017
Catalog, publications, retail inserts and directories	$	2,245.0	$	298.4	$	2,543.4
Direct mail and other printed products	675.1		72.8		747.9
Other	56.6		0.9		57.5
Total Products	2,976.7		372.1		3,348.8
Logistics services	398.9		19.2		418.1
Imaging, marketing services and other services	184.3		—		184.3
Total Services	583.2		19.2		602.4
Total Net Sales	$	3,559.9	$	391.3	$	3,951.2

Nature of Products and Services

The products offering is predominantly comprised of the Company’s print operations which includes retail inserts, publications, catalogs, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, newspapers, custom print products, other commercial and specialty printed products and global paper procurement.

The Company considers its logistic operations as services, which include the delivery of printed material. The Services offering also includes revenues related to the Company’s imaging operations, which include digital content management, photography, color services, page production, marketing services, media planning and placement, facilities management and medical services.

Performance Obligations

At contract inception, the Company assesses the products and services promised in its contracts with customers and identifies performance obligations for each promise to transfer to the customer a product or service that is distinct. To identify the performance obligations, the Company considers the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company determined that the following distinct products and services represent separate performance obligations:

•Pre-Press Services

•Print

•Other Services

For Pre-Press and Other Services, the Company recognizes revenue at point-in-time upon completion of the performed service and acceptance by the customer. The Company considers transfer of control to occur once the service is performed as the Company has right to payment and the customer has legal title and risk and reward of ownership.

The Company recognizes its Print revenues upon transfer of title and the passage of risk of loss, which is point-in-time upon shipment to the customer, and when there is a reasonable assurance as to collectability. Revenues related to the Company’s logistics operations, which includes the delivery of printed material, are included in the Print performance obligation and are also recognized at point-in-time as services are completed. Under agreements with certain customers, products may be stored by the Company for future delivery. In these situations, the Company may receive warehouse management fees for the services it provides. Revenue from warehouse management fees was immaterial for the years ended December 31, 2019, 2018 and 2017.

Certain revenues earned by the Company require judgment to determine if revenue should be recorded gross as principal or net of related costs as an agent. Billings for third-party shipping and handling costs, primarily in the Company’s logistics operations, and out-of-pocket expenses are recorded gross in net sales and cost of sales in the consolidated statements of operations. Many of the Company’s operations process materials, primarily paper, that may be supplied directly by customers or may be purchased by the Company and sold to customers. No revenue is recognized for customer-supplied paper. Revenues for the Company-supplied paper are recognized on a gross basis. In some cases, the Company will print items that are mailed to consumers and bill the customer for postage. In these cases, the Company is acting as an agent and billings are recorded on a net basis in net sales.

Significant Payment Terms

Payment terms and conditions for contracts with customers vary. The Company typically offers standard terms of net 30 days. It is not the Company’s standard business practice to offer extended payment terms longer than one year. The Company may offer cash discounts or prepayment and extended terms depending on certain facts and circumstances. As such, when the timing of the Company’s delivery of products and services differs from the timing of payment, the Company will record either a contract asset or a contract liability.

Variable Consideration

When evaluating the transaction price, the Company analyzes on a contract by contract basis all applicable variable considerations and non-cash consideration and also performs a constraint analysis. The nature of the Company’s contracts give rise to variable consideration, including, volume rebates, credits, discounts, and other similar items that generally decrease the transaction price. These variable amounts generally are credited to the customer, based on achieving certain levels of sales activity, when contracts are signed, or making payments within specific terms.

Product returns are not significant because the products are customized; however, the Company accrues for the estimated amount of customer allowances at the time of sale based on historical experience and known trends.

When the transaction price requires allocation to multiple performance obligations, the Company uses the estimated stand-alone selling prices using the adjusted market assessment approach.

Costs to Obtain Contracts

In accordance with ASC 606, the Company capitalizes certain sales incentives of the sales compensation packages for costs that are directly attributed to being awarded a customer contract or renewal and would not have been incurred had the contract not been obtained. The Company also defers certain contract acquisition costs paid to the customer at contract inception. Costs to obtain contracts with a duration of less than one year are expensed as incurred. For all contract costs with contracts over one year, the Company amortizes the costs to obtain contracts on a straight-line basis over the estimated life of the contract and reviews quarterly for impairment. Activity impacting costs to obtain contracts for the year ended December 31, 2019, was as follows:



	Costs to Obtain Contracts
Balance at January 1, 2019	$	14.6
Costs to obtain contracts	5.0
Amortization of costs to obtain contracts	(6.9		)
Balance at December 31, 2019	$	12.7

Practical Expedients

The Company has elected to apply the following practical expedients allowed under ASC 606:

•

For certain performance obligations related to print contracts, the Company has elected not to disclose the value of unsatisfied performance obligations for the following: (1) contracts that have an original expected length of one year or less; (2) contracts where revenue is recognized as invoiced; or (3) contracts with variable consideration related to unsatisfied performance obligations. The Company had approximately $21.7 million in volume commitments in contracts that extend beyond one year as of December 31, 2019. The Company expects to recognize approximately 55% of these volume commitments in contracts as revenue by the end of 2020, and the remaining 45% by the end of 2021.


•	The Company expenses costs to obtain contracts as incurred when the contract duration is less than one year.


•	The transaction amount is not adjusted for a significant financing component as the period between transfer of the products or services and payment is less than one year.


•	The Company accounts for shipping and handling activities, which includes postage, that occur after control of the related products or services transfers to the customer as fulfillment activities and are therefore recognized at time of shipping.

•

The Company excludes from its transaction price any amounts collected from customers for sales taxes.