UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 22, 2019

 

 

LSC COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-37729   36-4829580

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

191 N. Wacker Drive, Suite 1400, Chicago IL 60606

(Address of principal executive offices, including zip code)

(773) 272-9200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange

on which registered

Common stock, par value $0.01 per share   LKSD   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 1.01

Entry into a Material Definitive Agreement.

The disclosure set forth below under Item 1.02 of this Current Report on Form 8-K is incorporated by reference herein.

 

Item 1.02

Termination of a Material Definitive Agreement.

As previously disclosed, on October 30, 2018, LSC Communications, Inc. (“LSC”) entered into that certain Agreement and Plan of Merger (the “Merger Agreement”), by and among Quad/Graphics, Inc. (“Quad”), QLC Merger Sub, Inc. and LSC, pursuant to which, subject to the satisfaction or waiver of certain conditions, LSC would be merged with and into QLC Merger Sub, Inc., and become a wholly-owned subsidiary of Quad.

On July 22, 2019, Quad and LSC entered into a letter agreement (the “Letter Agreement”), pursuant to which the parties agreed to terminate the Merger Agreement. Pursuant to the letter agreement Quad agreed to pay LSC the Regulatory Approval Reverse Termination Fee (as defined in the Merger Agreement) of $45 million in cash on the business day following the date of the Letter Agreement. Except for certain indemnification obligations of Quad related to LSC assisting Quad with the financing under the Merger Agreement, the parties also agreed to release each other from any and all claims, counterclaims, demands, proceedings, actions, causes of action, orders, obligations, damages, debts, costs, expenses and other liabilities whatsoever and howsoever arising pursuant to or in connection with the Merger Agreement or the transactions provided for in the Merger Agreement.

The foregoing descriptions of the Merger Agreement and the Letter Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Merger Agreement, which was filed as an exhibit to LSC’s Current Report on Form 8-K filed on October 31, 2018, and the Letter Agreement, which is attached hereto as Exhibit 10.1 and which is incorporated by reference herein. A description of the material terms of the Merger Agreement can be found in LSC’s Current Report on Form 8-K filed on October 31, 2018, which is incorporated by reference herein.

 

Item 2.02

Results of Operations and Financial Condition.

On July 23, 2019, LSC issued a press release reporting LSC’s preliminary results for the second quarter ended June 30, 2019. The press release is attached hereto as Exhibit 99.1, and the financial information therein is incorporated by reference herein.

 

Item 8.01

Other Events.

In the same press release described in Item 2.02 above, LSC announced that its Board of Directors has determined to suspend LSC’s quarterly cash dividend.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits

 

Exhibit

Number

  

Description

10.1    Letter Agreement, dated July 22, 2019, by and between Quad/Graphics, Inc. and LSC Communications, Inc.
99.1    Press Release, dated as of July 23, 2019, issued by LSC Communications, Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    LSC Communications, Inc.
Date: July 23, 2019     By:  

/s/ Suzanne S. Bettman

    Name:   Suzanne S. Bettman
    Title:   Secretary; Chief Compliance Officer; General Counsel

Exhibit 10.1

Quad/Graphics, Inc.

N61 W23044 Harry’s Way

Sussex, Wisconsin 53089-3995

Via Electronic Mail and FedEx

 

  

July 22, 2019

LSC Communications, Inc.

191 N. Wacker Drive, Suite 1400

Chicago, Illinois 60606

Attention: Suzanne S. Bettman

Email: sue.bettman@lsccom.com

Ladies and Gentlemen:

Reference is made to that certain Agreement and Plan of Merger, dated as of October 30, 2018 (the “ Merger Agreement ”), by and among Quad/Graphics, Inc., a Wisconsin corporation (“ Quad ”), QLC Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Quad, and LSC Communications, Inc., a Delaware corporation (“ LSC ”). Each of Quad and LSC is a “ Party ” and, collectively, the “ Parties .” This letter agreement constitutes the mutual written consent of Quad and LSC, by action of their respective board of directors, to terminate the Merger Agreement effective as of the date hereof. Any capitalized terms used herein but not defined shall have the respective meanings ascribed to such terms in the Merger Agreement.

Quad and LSC hereby agree that the termination of the Merger Agreement pursuant to this letter agreement shall have the same effect as a termination pursuant to Section 8.1(f) of the Merger Agreement at the time of which termination the conditions set forth in Sections 7.1(b) or 7.1(d) of the Merger Agreement shall not have been satisfied.

Therefore, in accordance with Section 8.4(a) of the Merger Agreement, Quad shall pay to LSC, on the business day following the date of this letter agreement, a fee in an amount equal to $45,000,000 (the “ Termination Fee ”) by wire transfer of immediately available federal funds, free of costs and charges, to an account designated in writing by the Company concurrently with termination of the Merger Agreement.

Section 9.5 of the Merger Agreement shall apply to this letter agreement and any action or proceeding in respect of any claim arising out of, related to or arising under this letter agreement.

Except for the indemnity obligations of Parent pursuant to the second sentence of Section 6.12(c) and Quad’s obligation to pay the Termination Fee pursuant to this letter agreement, effective from and after the termination of the Merger Agreement as provided for above, each of Quad and LSC, for themselves and on behalf of their respective Affiliates, successors and assigns (each, a “ Releasor ”) acknowledge and agree that, except as otherwise provided in this letter agreement, each such Releasor hereby fully, finally, irrevocably and unconditionally (a) waives, releases and discharges the other Party and its Affiliates, successors and assigns, and each of their respective current and former directors,

managers, officers, employees, agents, representatives, direct or indirect equityholders, heirs, executors, and administrators (collectively, the “ Releasees ”), from any and all claims, counterclaims, demands, proceedings, actions, causes of action, orders, obligations, damages, debts, costs, expenses and other liabilities whatsoever and howsoever arising, whether known or unknown, suspected or unsuspected, contingent or actual, both at law and in equity, which such Releasor now has, has ever had or may hereafter claim to have or against any Releasee or its assets, liabilities or operations pursuant to, in connection with or arising out of the Merger Agreement, including, without limitation, the representations, warranties and covenants in the Merger Agreement and the transactions provided for in the Merger Agreement (collectively, “ Released  Claims ”); and (b) agrees not to assert or institute any proceeding with respect to any Released Claim. Each of the Releasees shall be an intended third-party beneficiary of the release contained in this paragraph and shall be entitled to enforce the release provisions of this letter agreement to the same extent that such person could enforce such provisions if such person were a party hereto.

This letter agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, legal representatives and permitted assigns. This letter agreement may be executed in any number of counterparts, each such counterpart (including any facsimile or electronic document transmission of such counterpart) being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement.

[ The remainder of this page is intentionally left blank ]

Very truly yours,
QUAD/GRAPHICS, INC.
a Wisconsin corporation
By:  

/s/ Joel Quadracci

  Name: Joel Quadracci
  Title: Chairman, President & CEO

[ Signature Page to Letter Agreement ]

Accepted and agreed to as of the date first written above:
LSC COMMUNICATIONS, INC.
a Delaware corporation
By:  

/s/ Thomas J. Quinlan

  Name: Thomas J. Quinlan, III
  Title: Chairman, Chief Executive Officer and President

cc:

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Attention:     Audra D. Cohen

Email:          cohena@sullcrom.com

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

Attention:    Patrick G. Quick

          Russell E. Ryba

Email:         pgquick@foley.com

          rryba@foley.com

[ Signature Page to Letter Agreement ]

Exhibit 99.1

 

LOGO

LSC COMMUNICATIONS ANNOUNCES

TERMINATION OF MERGER AGREEMENT WITH QUAD/GRAPHICS

PROVIDES PRELIMINARY RESULTS FOR SECOND QUARTER 2019 AND UPDATES FULL

YEAR 2019 GUIDANCE

BOARD DETERMINES TO SUSPEND DIVIDEND

Chicago, July  23, 2019 – LSC Communications, Inc. (NYSE: LKSD) (“LSC”) today announced that LSC and Quad/Graphics, Inc. (NYSE: QUAD) (“Quad”) have mutually agreed to terminate the merger agreement (the “Agreement”) pursuant to which Quad/Graphics would acquire LSC in an all-stock transaction valued at approximately $1.4 billion. In accordance with the Agreement, in connection with the termination, Quad will pay LSC a termination fee of $45 million. The Agreement was previously announced on October 31, 2018. On June 20, 2019, the U.S. Department of Justice (the “DOJ”) announced that it had filed a lawsuit in the United States District Court for the Northern District of Illinois to enjoin Quad’s proposed acquisition of LSC.

Thomas J. Quinlan III, LSC’s Chairman, Chief Executive Officer and President, said, “We disagree with the DOJ’s conclusion regarding our transaction, especially in the context of industry trends. However, we and Quad recognize the significant additional time and resources that would be required to challenge the DOJ’s complaint and have therefore decided mutually that it is in the best interests of our respective companies to terminate the merger agreement. The LSC Board of Directors and senior management are confident that LSC has strong capabilities to innovate and further develop our leadership position in the industry. We are incredibly grateful to all of our employees for their work throughout the process. We are as dedicated as ever to serving our clients’ needs with the same level of service, innovation and industry-leading solutions that they have come to expect. Moving forward, we will continue to drive shareholder value.”

LSC Preliminary Second Quarter 2019 Results

LSC also today announced that it currently expects the following estimated financial results for the second-quarter 2019:

  ●  

Total net sales of $865 to $875 million

  ●  

GAAP net loss of $22 to $26 million

  ●  

Non-GAAP adjusted EBITDA of $51 to $55 million

  ●  

Net cash provided by operating activities of $25 to $29 million

  ●  

Non-GAAP free cash flow of $4 to $8 million

Mr. Quinlan stated, “While our Book and Office Products segments performed in line with expectations during the second quarter, we have seen an unprecedented drop in demand in our Magazines, Catalogs and Logistics segment. This faster pace of decline in demand in the MCL segment results primarily from the accelerated impact of digital disruption of demand for printed materials. As a result, we are updating our 2019 full year guidance and expect our year end reported leverage to be approximately 3x.”

Mr. Quinlan concluded, “In light of lower expectations for earnings and cash flows, the Board of Directors has suspended dividend payments in order to allocate greater capital to LSC’s debt reduction and ongoing operational restructuring programs. We believe our ongoing operational restructuring programs, the $45 million break-up fee being paid by Quad and the suspension of the dividend provide LSC with stable financial ground to move forward in our increasingly competitive and evolving industry.”

Page 2 of 6

 

LSC’s consolidated financial statements for the three and six months ended June 30, 2019 are not yet available. The following expectations regarding LSC’s results for this period are preliminary, based solely upon management estimates based on currently available information, and subject to completion of financial and operating closing procedures as of and for the three months ended June 30, 2019. Accordingly, you should not place undue reliance on these estimates. All of these estimates constitute “forward-looking statements” as described below in “Forward Looking Statements.”

LSC’s independent registered public accounting firm, Deloitte & Touche LLP, has not audited, reviewed or performed any procedures with respect to this preliminary financial data and, accordingly, does not express an opinion or any other form of assurance with respect to this data.

Updated 2019 Guidance

LSC’s updated full-year guidance for 2019 in the table below reflects the impact of the expectation for the continued negative trends in the MCL segment in the second half of the year.

 

    

Updated Guidance

  

Previous Guidance

Net sales    $3.45 to $3.55 billion    $3.55 to $3.65 billion
Non-GAAP adjusted EBITDA    $200 to $240 million    $250 to $290 million
Net pension income    $35 million    $35 million
Non-GAAP adjusted EBITDA excluding net pension income    $165 to $205 million    $215 to $255 million
Depreciation and amortization    $115 to $125 million    $115 to $125 million
Interest expense    $75 to $79 million    $75 to $79 million
Non-GAAP effective tax rate    30% to 35%    27% to 31%
Capital expenditures    $75 to $85 million    $75 to $85 million
Free cash flow (1)    $60 to $100 million    $60 to $100 million
Diluted share count    34 to 35 million    34 to 35 million

 

(1)

Free cash flow is defined as net cash provided by operating activities less capital expenditures. The 2019 Free Cash Flow Guidance includes $45 million of gross proceeds received in connection with the Merger Agreement termination fee, less estimated transaction costs of approximately $20 to $25 million.

Certain components of the guidance given in the table above are provided on a non-GAAP basis only, without providing a reconciliation to guidance provided on a GAAP basis. Information is presented in this manner, consistent with SEC rules, because the preparation of such a reconciliation could not be accomplished without “unreasonable efforts.” LSC does not have access to certain information that would be necessary to provide such a reconciliation, including non-recurring items that are not indicative of LSC’s ongoing operations. Such items include, but are not limited to, restructuring charges, impairment charges, pension settlement charges, acquisition-

Page 3 of 6

 

related expenses, gains or losses on investments and business disposals, losses on debt extinguishment, merger-related expenses and other similar gains or losses not reflective of LSC’s ongoing operations. LSC does not believe that excluding such items is likely to be significant to an assessment of LSC’s ongoing operations, given that such excluded items are not the indicators of business performance focused on by management in assessing LSC’s operations.

Board Determines to Suspend Dividend

LSC announced that its Board of Directors has decided not to declare a quarterly dividend on its common stock in the third quarter of 2019, making the dividend paid in June 2019 the last dividend that will be paid for the foreseeable future. Suspending the dividend will allow LSC to redeploy approximately $35 million in cash annually.

Second-Quarter 2019 Results and Conference Call

LSC now plans to release its complete report on second-quarter 2019 results on Thursday, August 8, 2019. In light of the termination of the merger agreement, LSC will resume quarterly conference calls to discuss its earnings. The conference call and live webcast will begin at 8:30 am Eastern Time. The live webcast will be accessible on LSC’s website, www.lsccom.com , or through this link .

Individuals wishing to dial in to the call or access the live webcast must register in advance at this link. After registering, participants will receive dial-in numbers, a passcode, and a link to access the live event.

A webcast replay will be archived on LSC’s web site for 90 days after the call.

About LSC Communications

With a rich history of industry experience, innovative solutions and service reliability, LSC Communications (NYSE: LKSD) is a global leader in print and digital media solutions. Our traditional and digital print-related services and office products serve the needs of publishers, merchandisers and retailers around the world. With advanced technology and a consultative approach, our supply chain solutions meet the needs of each business by getting their content into the right hands as efficiently as possible.

For more information about LSC Communications, visit  www.lsccom.com .

Investor Contact

Janet M. Halpin, Senior Vice President, Treasurer & Investor Relations

E-mail: investor.relations@lsccom.com

773-272-9275

Media Contact

Steve Frankel / Jamie Moser / Adam Pollack

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

Use of non-GAAP Information

This news release contains certain non-GAAP measures. LSC believes that these non-GAAP measures, such as non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP effective tax rate and free cash flow, when presented in conjunction with comparable GAAP

Page 4 of 6

 

measures, provide useful information about LSC’s operating results and liquidity and enhance the overall ability to assess LSC’s financial performance. LSC uses these measures, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. Non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP effective tax rate and free cash flow allow investors to make a more meaningful comparison between LSC’s core business operating results over different periods of time. LSC believes that non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP effective tax rate and free cash flow, when viewed with LSC’s results under GAAP and the accompanying reconciliations, provides useful information about LSC’s business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by factors such as depreciation and amortization methods, historic cost and age of assets, financing and capital structures, taxation positions or regimes, restructuring, impairment and other charges and gain or loss on certain equity investments and asset sales, LSC believes that non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA margin and non-GAAP effective tax rate can provide useful additional basis for comparing the current performance of the underlying operations being evaluated. By adjusting for the level of capital investment in operations, LSC believes that free cash flow can provide useful additional basis for understanding LSC’s ability to generate cash after capital investment and provides a comparison to peers with differing capital intensity.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of federal securities laws regarding LSC. These forward-looking statements relate to, among other things, the proposed transaction between LSC and Quad/Graphics and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of LSC. In accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, these statements may include, or be preceded or followed by, the words “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “continues,” “believes,” “may,” “will,” “goals” or variations of such words and similar expressions. Examples of forward-looking statements include, but are not limited to, statements, beliefs and expectations regarding our business strategies, market potential, future financial performance, dividends, costs to be incurred in connection with the separation, results of pending legal matters, our goodwill and other intangible assets, price volatility and cost environment, our liquidity, our funding sources, expected pension contributions, capital expenditures and funding, our financial covenants, repayments of debt, off-balance sheet arrangements and contractual obligations, our accounting policies, general views about future operating results and other events or developments that we expect or anticipate will occur in the future. These forward-looking statements are subject to a number of important factors, including those factors disclosed in “Item 1A Risk Factors” in Part I in LSC’s annual report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on February 19, 2019, that could cause our actual results to differ materially from those indicated in any such forward-looking statements. Additional factors include, but are not limited to: (1) disruption from the abandoned transaction making it more difficult to maintain relationships with customers, employees or suppliers; (2) the competitive market for our products and industry fragmentation affecting our prices; (3) inability to improve operating efficiency to meet changing market conditions; (4) changes in technology, including electronic substitution and migration of paper based documents to digital data formats; (5) the volatility and disruption of the capital and credit markets, and adverse changes in the global economy; (6) the effects of global market and economic conditions on our customers; (7) the effect of economic weakness and constrained advertising; (8) uncertainty about future economic conditions; (9) increased competition as a result of consolidation among our competitors; (10) our ability to successfully integrate recent and future acquisitions; (11) factors that affect customer

Page 5 of 6

 

demand, including changes in postal rates, postal regulations, delivery systems and service levels, changes in advertising markets and customers’ budgetary constraints; (12) vulnerability to adverse events as a result of becoming a stand-alone company after separation from R. R. Donnelley & Sons Company (“RRD”), including the inability to obtain as favorable of terms from third-party vendors; (13) our ability to access debt and the capital markets due to adverse credit market conditions; (14) the effects of seasonality on our core businesses; (15) the effects of increases in capital expenditures; (16) changes in the availability or costs of key materials (such as paper, ink, energy, and other raw materials) or in prices received for the sale of by-products; (17) performance issues with key suppliers; (18) our ability to maintain our brands and reputation; (19) the retention of existing, and continued attraction of additional customers and key employees, including management; (20) the effect of economic and political conditions on a regional, national or international basis; (21) the effects of operating in international markets, including fluctuations in currency exchange rates; (22) changes in environmental laws and regulations affecting our business; (23) the ability to gain customer acceptance of our new products and technologies; (24) the effect of a material breach of or disruption to the security of any of our or our vendors’ systems; (25) the failure to properly use and protect customer and employee information and data; (26) the effect of increased costs of providing health care and other benefits to our employees; (27) the effect of catastrophic events; (28) potential tax liability of the separation; (29) the impact of the U.S. Tax Cuts and Jobs Act (“Tax Act”); (30) lack of history as an operating company and costs and other issues associated with being an independent company; (31) failure to achieve certain intended benefits of the separation; (32) failure of RRD or Donnelley Financial Solutions, Inc. to satisfy their respective obligations under agreements entered into in connection with the separation; (33) increases in requirements to fund or pay withdrawal costs or required contributions related to LSC’s pension plans and (24) the factors set forth in “Item 1A Risk Factors” in Part I in LSC’s annual report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on February 19, 2019. We have based our forward-looking statements on our current expectations, estimates and projections about our industry. We caution that these statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties, and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.

Page 6 of 6

 

Reconciliations of EBITDA, Non-GAAP EBITDA and Free Cash Flow

For the Three Months Ended June 30, 2019 and 2018

(Unaudited)

(in millions)

 

     Three Months Ended
     June 30,
     2019   2018  
     Low   High   Actual  

Net (loss) income

     $ (26 )     $ (22 )      $ 8  

Interest expense-net

     19       19       18  

Income tax (benefit) expense

     (2 )      (4 )      5  

Depreciation and amortization

     31       31       34  

Restructuring, impairment and other charges (a)

     24       25       11  

Settlement of retirement benefit obligations (b)

     1       1       -  

Expenses related to acquisitions and the Merger (c)

     4       5       1  
  

 

 

 

 

 

 

 

Non-GAAP EBITDA

     $           51      $           55       $             77  
  

 

 

 

 

 

 

 

Free Cash Flow Reconciliation

      

Net cash provided by (used in) operating activities

     $ 25      $ 29       $ (2 ) 

Capital expenditures

     (21 )      (21 )      (17 ) 
  

 

 

 

 

 

 

 

Free cash flow

     $ 4      $ 8       $ (19 ) 
  

 

 

 

 

 

 

 

 

(a) Restructuring, impairment and other charges-net: Restructuring charges for employee termination costs, other costs, multiemployer pension plan withdrawal obligations, and impairment charges for intangible assets and other long-lived assets.

 

(b) Settlement of retirement benefit obligations: There were lump-sum settlements that we expect will result in an immaterial non-cash settlement charge during the three months ended June 30, 2019.

 

 

(c) Expenses related to acquisitions and the Merger: The three months ended June 30, 2019 included charges primarily related to costs associated with the Merger. The three months ended June 30, 2018 included charges related to legal, accounting and other expenses associated with completed and contemplated acquisitions.