Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected 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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of the shares of registrant’s common stock held by non-affiliates based on the sale price of the common stock on June 30, 2021 was $440,834,717.

As of February ~~18,~~21, 2022, 75,212,238 shares of common stock were outstanding.

~~Information required in~~Item 10 of Part III of this ~~Annual Report on~~ Form ~~10-K~~ ~~is incorporated herein~~10-K/A incorporates by reference to ~~our definitive proxy statement or amendment to~~the registrant’s Form 10-K for the fiscal year ended December 31, 2021, filed on February 24, 2022. Item 12 of Part III of this Form ~~10-K~~10-K/A incorporates by reference to bethe registrant’s Form 8-K filed ~~with the SEC no later than May 2, 2022.~~on December 17, 2021.

R.R. Donnelley & Sons Company (“RRD,” the “Company,” “we,” “us,” and “our”), a Delaware corporation, helps organizations communicate more effectively by working to create, manage, produce, distribute and process content on behalf of our clients. We assist clients in developing and executing multichannel communication strategies that engage audiences, reduce costs, drive revenues and enhance compliance. Our innovative content management offering, production platform, supply chain management, outsourcing capabilities and customized consultative expertise assists our clients in the delivery of integrated messages across multiple media to highly targeted audiences at optimal times to their customers in virtually every private and public sector. We have strategically located operations that provide local service and responsiveness while leveraging the economic, geographic and technological advantages of a global organization.

On December 14, 2021, we entered into a definitive merger agreement under which we agreed to be acquired by affiliates of Chatham Asset Management, LLC (“Chatham”), a leading private investment firm. Under the terms of the merger agreement, an affiliate of Chatham will acquire all of the outstanding shares of RRD common stock not already owned by Chatham, and RRD stockholders will receive $10.85 per share in cash for each share of RRD common stock. All regulatory approvals have been obtained and at a special meeting on February 23, 2022, RRD’s stockholders approved the proposed merger. The merger with Chatham is expected to close on February 25, 2022. Upon completion of the transaction, RRD’s shares will no longer trade on the New York Stock Exchange and RRD will become a private company.

~~Our key strategic focus areas, which leverage our long-standing client relationships and comprehensive portfolio of capabilities, are as follows:~~

Business Services provides customized solutions at scale to help clients inform, service and transact with their customers. The segment’s primary product and service offerings include commercial print, packaging, labels, statement printing, supply chain management, forms and business process outsourcing. This segment also includes all of our operations in Asia, Europe, Canada and Latin America. ~~In 2021, our Business Services segment accounted for 78.8% of our consolidated net sales.~~

~~We provide various commercial printing products and offer a full range of branded materials including manuals, publications, brochures, business cards, flyers, post cards, posters and promotional items. Commercial print accounted for 39.3% of our Business Services segment’s net sales for the fiscal year ended December 31, 2021.~~

~~We provide packaging solutions, ranging from rigid boxes to in-box print materials, for clients in consumer electronics, life sciences, cosmetics and consumer packaged goods industries.~~ ~~Packaging accounted for 19.7% of our Business Services segment’s net sales for the fiscal year ended December 31, 2021.~~

We produce custom labels for clients across multiple industries including warehouse and distribution, retail, pharmaceutical, manufacturing and consumer packaging. We offer distribution and shipping labels, healthcare and durable goods labels, promotional labels and consumer product goods packaging labels. ~~Labels accounted for 13.6% of our Business Services segment’s net sales for the fiscal year ended December 31, 2021.~~

We create critical business communications, including customer billings, financial statements, healthcare communications and insurance documents. Our capabilities include design and composition, variable imaging, email, archival and digital mail interaction, as well as our innovative RRDigital solution set. ~~Statements accounted for 11.0% of our Business Services segment’s net sales for the fiscal year ended December 31, 2021.~~

We provide workflow design to assembly, configuration, kitting and fulfillment for clients in life sciences and healthcare, consumer electronics, telecommunications, cosmetics, education and industrial industries. During 2020 and 2021, we experienced a significant increase in demand for our kitting services driven by COVID-19-related orders. ~~Supply chain management accounted for 7.2% of our Business Services segment’s net sales for the fiscal year ended December 31, 2021.~~

We produce a variety of forms including invoices, order forms and other business forms that support both the private and public sectors for clients in financial, government, retail, healthcare and business services industries. ~~Forms accounted for 5.0% of our Business Services segment’s net sales for the fiscal year ended December 31, 2021.~~

We provide outsourcing services including creative services, research and analytics, financial management and other services for legal providers, insurance, telecommunications, utilities, retail and financial services companies. ~~Business process outsourcing accounted for 4.2% of our Business Services segment’s net sales for the fiscal year ended December 31, 2021.~~

Marketing Solutions leverages an integrated portfolio of data analytics, creative services and multichannel execution to deliver comprehensive, end-to-end solutions. The segment’s primary product and service offerings include direct marketing, in-store marketing, digital print, kitting, fulfillment, digital and creative solutions and list services. ~~In 2021, our Marketing Solutions segment accounted for 21.2% of our consolidated net sales.~~

~~We provide audience segmentation, creative development, program testing, print production, postal optimization and performance analytics for large-scale personalized direct mail programs. Direct marketing accounted for 50.7% of our Marketing Solutions segment’s net sales for the fiscal year ended December 31, 2021.~~

Using digital and offset production capabilities, we provide in-store marketing materials, including signage and point-of-purchase materials, as well as custom marketing kits that require multiple types of marketing collateral. Under the trade name Motif^TM~~, we also create custom photobooks. Digital print and fulfillment accounted for 41.0% of our Marketing Solutions segment’s net sales for the fiscal year ended December 31, 2021.~~

We help clients manage their customer data in order to better understand their customers and guide more effective marketing communications efforts. In addition, we create, edit and manage content for delivery across multiple marketing communications channels including print and digital advertising, direct marketing and mail, packaging, sales collateral, in-store marketing and social media~~. Digital and creative solutions accounted for 8.3% of our Marketing Solutions segment’s net sales for the year ended December 31, 2021.~~

Our Corporate segment consists of unallocated general and administrative activities and associated expenses including, in part, executive, legal, finance, communications, certain facility costs and last-in-first-out inventory provisions. In addition, certain costs and earnings of employee benefit plans, such as pension and other postretirement benefits (“OPEB”) plan expense (income) and share-based compensation, are included in Corporate and not allocated to the operating segments. Corporate also manages our cash pooling structures, which enables participating international locations to draw on our international cash resources to meet local liquidity needs.

In 2020, to focus on our core product and service offerings, we completed our plan to exit our Logistics Business. This business included Print Logistics, which was disposed of on July 2, 2018; Courier Logistics, which was disposed of on March 2, 2020; DLS Worldwide, which was disposed of November 2, 2020; and International Logistics which was disposed of on November 3, 2020. These businesses were included in the Business Services segment and primarily provided logistics services to a broad range of clients in the United States and globally. The financial results of these businesses have been excluded from continuing operations and segment results for all periods presented unless otherwise noted. Refer to ~~Note 2 –Discontinued Operations~~ ~~to our Consolidated Financial Statements for additional information.~~

On October 25, 2019, we completed the sale of substantially all of the Global Document Solutions (“GDS”) business within the Business Services segment. GDS primarily provided statements and print management services in Europe. Additionally, during the ~~year ended December 31, 2019, we sold the R&D business and our~~ subsidiary, RR Donnelley Editora e Grafica Ltda. (“RRD Brazil”), filed for bankruptcy liquidation in bankruptcy court in Brazil. The operations of these three businesses were included in the Business Services segment.

The print and related services industry, in general, continues to have excess capacity and remains highly competitive and fragmented. Our clients operate in an evolving and ever-changing market. While the market is large and fragmented, there are tremendous changes occurring in how organizations need to create, manage, deliver and measure their communications. Some of the key factors facing our clients include regulatory changes, sensitivity to economic conditions, raw material pricing volatility and United States Postal Service (“USPS”) actions. In addition, technological changes, including the electronic distribution of documents and data, online distribution and hosting of media content, and advances in digital printing, print-on-demand and internet technologies, continue to impact the market for many of our products and services.

We believe that, across our range of products and services, competition is based primarily on quality and the ability to service the special needs of clients at a competitive price. Therefore, we believe we need to continue to differentiate our product and service offerings and aggressively manage our cost structure to remain competitive. Our business is differentiated by the wide array of quality communications products and services, including print and content management, we provide for our clients. We work with our clients to create, manage, deliver and optimize their multichannel communications strategies by providing innovative solutions to meet increasing customer demands in light of the large and evolving marketplace. We also continue to develop our creative and design, content management, digital and print production, supply chain management and distribution services to address our clients’ ~~evolving needs while supporting the strategic objective of becoming a leading global provider of integrated communication products and services.~~

~~Refer to Part I Item 1A “Risk Factors” and Part II Item 7 ‑Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~for additional information regarding the impact of COVID-19 on our business.~~

Advertising and consumer spending trends affect demand in several of the end-markets we serve. As such, we have some seasonality in our business, mostly in the second half of the year, despite the breadth of our product and service offerings.

The primary raw materials we use in our print businesses are paper and ink. We negotiate with leading suppliers to maximize our purchasing efficiencies. Some of the paper we use is supplied directly by clients. During 2021, we have seen price increases from nearly all of our material suppliers in all categories. Notably, paper products have seen significant price increases primarily caused by supply shortages from key suppliers. The supply shortages have been caused in part by manufacturing capacity reductions, labor shortages and other supply chain disruptions. We, and our suppliers, have also experienced labor shortages and increased wage pressure for manufacturing workers due to current market conditions. Further, we experienced supply chain disruptions and shipping delays caused by container shortages in key domestic and international ports, including China. We expect these factors to continue for the foreseeable future.

To mitigate the effect of raw material shortages, inflationary pressures and other supply chain disruptions, we have offered our clients product alternatives, new formats, and in some cases secured new suppliers. We have also implemented price increases to pass inflationary costs along to our clients. Generally, clients directly absorb the impact of changing prices on client-supplied paper. With respect to paper we purchase, we have historically passed most changes in price through to our clients although in many cases there is a delay based on terms within individual client contracts. We believe contractual arrangements and industry practice will support our continued ability to pass on any future paper price increases, but there is no assurance that market conditions will continue to enable us to successfully do so.

In addition, we are working closely with transportation suppliers and increasing inventory levels to help ensure product availability, and we continue to aggressively pursue cost reductions across the Company to offset inflationary pressures. However, ~~variations in the cost and supply of raw materials used in the manufacturing process and rising labor costs, may affect our consolidated financial results.~~

We continue to monitor the impact of changes in the price of crude oil and other energy costs, which impact our ink suppliers and manufacturing costs. Crude oil, energy prices and market cost of transportation continue to be volatile. We generally cannot pass on to clients the impact of higher energy prices on our manufacturing costs. We cannot predict sudden changes in energy prices and the impact that possible future changes in energy prices might have upon either future operating costs or client demand or the related impact either will have on our consolidated annual results of operations, financial position or cash flows.

We do not believe that our business is dependent upon any single patent or group of patents. We actively monitor the registrations of our trademark and patent portfolio to ensure that our intellectual property is appropriately protected and maintained.

Our products are distributed to end-users through U.S. and foreign postal services, through retail channels, electronically or by direct shipment to client facilities. In cooperation with trusted logistics vendors, we manage the distribution of most client products we print in the U.S. and Canada to maximize efficiency and reduce costs for clients.

As a leading mail-service-provider of both First-Class Mail and USPS Marketing mail, we are ranked by the USPS as one of the largest preparers of mailings in the U.S. We work closely with our clients and the USPS to offer innovative products and mail preparation services to minimize postage costs. While we do not directly absorb the impact of higher postage rates on our clients’ mailings, demand for products distributed through the U.S. or foreign postal services has been negatively impacted by increases in postage rates, as postal costs are a significant component of many clients’ cost structures.

In accordance with the 2006 Postal Accountability and Enhancement Act (“PAEA”), the Postal Regulatory Commission (“PRC”) adjusted and approved USPS filings for a CPI based average price increase of 1.5% to 1.8% depending on the major class of mail. The new prices took effect on January 24, 2021.

Additionally, as required on the 10-year anniversary of PAEA, the PRC initiated a comprehensive review of its regulations on December 20, 2016, to determine if the current system for regulating rates and classes for market-dominant products is still achieving the original objectives of the law. After multiple years of deliberation the PRC concluded that the current system was not meeting all of PAEA’s original objectives and issued its final ruling on November 30, 2020, The ruling expanded USPS pricing authority to consider: 1) the higher cost implications caused by the declining average of the number of mail pieces delivered per delivery point, and 2) the congressionally mandated contributions by the Postal Service to fund future employee retirement benefits, respectively referred to as the “Density Adder”, and the “Retirement Adder ”. These additional price adders plus CPI percentage increases will in total determine the overall price increase allowed for the market dominant mail classes. The Postal Service then used and applied its expanded pricing authority and imposed a second increase during 2021 ranging from 6.8 to 8.8%, which became effective on August 29, 2021.

We have approximately 25,000 clients worldwide, including 92% of the Fortune 100, 79% of the Fortune 500 and 67% of the Fortune 1000. Our products and services enable some of the world’s largest companies to create, manage and deliver comprehensive and cost-effective multi-channel communications around the world. ~~For each of the years ended December 31, 2021, 2020 and 2019, no single client accounted for 10% or more of consolidated net sales.~~

Our cybersecurity program is designed for needs and expectations of our clients who entrust us with highly sensitive information. Furthermore, our healthcare and insurance printing businesses are subject to industry-specific data regulations, including the Health Care Insurance Portability and Accountability Act of 1996, which could subject us and our clients to liability should sensitive client or patient information be publicly disclosed. Our infrastructure and technology, highly-trained global workforce and comprehensive security and compliance program enable us to safely process, store and protect client information in compliance with relevant regulations.

Our infrastructure and technology security capabilities are bolstered by our relationship with a leading data center services provider. Furthermore, we employ a highly skilled IT workforce to implement our cybersecurity programs and to handle specific security responsibilities. As a result of annual mandatory security awareness training, our IT workforce is trained to address security and compliance-related issues as they arise. Additionally, our IT employees are carefully screened, undergo a thorough background check and are bound by a nondisclosure agreement that details such employee’s security and legal responsibilities with regard to information handling.

In December 2021, we identified a systems intrusion in our technical environment. In response, we promptly implemented a series of containment measures to address the situation, including activating our incident response protocols, shutting down servers and systems and commencing a forensic investigation. We also engaged cybersecurity experts to examine the incident and oversee the implementation of appropriate remedial actions. However, we became aware in mid-January 2022 that certain of our corporate data, the nature of which is continuing to be actively examined, was accessed and exfiltrated. To the extent any confidential client data is found in this data, the Company has and will continue to inform impacted clients within a reasonable time. We also notified and continue to work with appropriate law enforcement authorities. As a precautionary measure, we isolated a portion of our technical environment in an effort to contain the intrusion.

At this time, we have restored the affected systems and returned to normal levels of operations, and believe that the steps taken to isolate and remediate the identified threat have been effective. While we do not currently believe that this security event has or will result in a material adverse impact to the Company, data review and assessment related to this event remain ongoing, and we may determine in the future that such event had or will have a material adverse impact on our business, results of operations, financial condition or cash flows.

Our policy is to conduct our global operations in accordance with all applicable laws, regulations and other requirements. It is not possible to quantify with certainty the impact of potential failures regarding our compliance with these laws and regulations, including environmental matters and resulting remediation and other compliance efforts that we may undertake in the future. However, in our opinion, compliance with present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material adverse effect on our consolidated annual results of operations, financial position or cash flows.

RRD’s approximately 32,000 employees worldwide represent our most important asset. We are committed to prioritizing a diverse, equitable and inclusive workplace, which allows us to attract and, importantly, retain high quality talent. Our laser focus on the health, safety and well-being of our employees helps us to maintain our qualified workforce and develop leaders for the future.

We are committed to diversity, equity and inclusion from the membership of the Board of Directors through all layers of our employee ranks. Women represent 50% of our independent directors on the Board of Directors and 25% of our executive leadership team. Our priorities and the signing of the Parity Pledge in 2017 reflect our commitment to increasing the percentage of women in leadership roles across our company.

We are also focused on representation by historically underrepresented groups including, racial minorities and LGBTQ employees in our U.S. businesses. We are committed to diversifying our workforce and increasing representation of all underrepresented groups in our Board and leadership teams.

In 2020, we launched a new committee, the purpose of which is to focus on and formalize diversity, equity and inclusion initiatives for the Company, communicate broadly, and ensure that every employee feels respected and appreciated and can contribute to their fullest potential.

To ensure RRD’s continued focus on diversity, equity and inclusion, executive team members are expected to consider at least one woman and one racial/ethnic minority in hiring for open positions on their teams. The Board receives ongoing updates on these priorities as well as on the hiring by the executive leadership team. In 2021, our CEO and CHRO were given a goal that all new hires or promotions into Director or higher levels at the Company must be at least 50% women or racially diverse candidates. The Company met that goal in 2021 despite a challenging labor market.

In January 2022, we announced that we received a score of 95 out of 100 on the Human Rights Campaign Foundations 2022 Corporate Equality Index, the nation’s foremost benchmarking survey and report measuring corporate policies and procedures related to LGBTQ+ workplace equality.

We are committed to paying employees equally for like work, at like levels, in like geographical areas, with similar years of experience, regardless of an employee’s gender, race, ethnicity, sexual orientation, or other personal characteristics. We have reviewed a variety of positions to ensure pay equity and made adjustments where needed. We regularly review our compensation process and, at this time, we have not identified any specific, significant systemic issues in our compensation process.

In 2020 and 2021, we were diligent in surveying our employees throughout the impact of COVID-19 to ensure that employees understood what resources were available to them, how to request assistance (including through our Employee Assistance Program), and how to navigate novel work environments in an unprecedented time. On the whole, the organization pivoted and adapted efficiently and without significant issues in a rapidly changing landscape. Essentially all of our manufacturing facilities were deemed to be essential by applicable government agencies, and as a result our employees have continued to work throughout the pandemic. As such, when COVID-19 hit our facilities in the U.S. and abroad, we immediately implemented rigorous cleaning procedures, mandated the wearing of masks, and required physical distancing where possible. If an employee disclosed a positive COVID-19 test, we deep cleaned areas the employee had visited and engaged in contact tracing.

Because of our successful performance and the extraordinary engagement of our essential employees, in December 2020, we were able to pay a year-end bonus to employees not otherwise eligible for a bonus. This employee group included full-time hourly workers, managers, supervisors, facility workers and other non-sales employees who are not eligible for the annual incentive plan or commissions that are available to certain managers, directors, vice presidents and other executives. Throughout 2021, we were able to increase hourly wages at a number of our facilities based on the continued extraordinary efforts of our employees.

We also maintain a robust open door process to capture, investigate and timely respond to employee concerns. Throughout 2020 and 2021, we listened carefully as employees raised new issues during these unprecedented times and responded with due speed.

Finally, we provided our workforce with engagement opportunities, including through our Global Women’s Business Resource Group, inclusion councils, and dialogues hosted by our diversity, equity and inclusion leadership team.

A critical component of our investment in our employees is the provision of virtual and self-directed learning and development. This training covers topics from sexual harassment prevention, ADA awareness, IT security and a wide variety of anti-corruption and compliance programs. In 2021, 99.7% of employees timely completed their required training.

~~In addition to compliance related training, we also offer leadership and job skills training in order to continue to grow and develop our diverse workforce.~~

In 2021, the Company engaged a vendor to train the Executive Leadership Team ("ELT") in diversity in hiring and retention at the Company. Since the Company prioritizes diversity in its hiring at all levels and understands that diversity in leadership will lead to more diversity throughout the Company, it has made continued education and heightened awareness of these issues a top priority for the ELT and for all leaders at the Company, including those on the Human Resources Team.

As a manufacturing company, operations in our facilities continue to represent our greatest safety and health risks for our employees. Managing and mitigating risks at our facilities is the top priority for the executive team and every employee around the world. Safety has routinely been a part of our performance metrics for leadership in our facilities and one indicator of success in this area is our recordable case rate, which is at the lowest level since becoming a stand-alone company in 2016.

We are continually evolving our policies and procedures to adhere to the latest best practices being provided by the Centers for Disease Control (“CDC”) and World Health Organization (“WHO”). Our cross-functional COVID Task Force created at the onset of the pandemic has developed safety measures, policies, and procedures for our workplace. We have implemented flexible working policies, including telecommuting and staggered shifts, while allowing for voluntary leaves of absence. We have encouraged vaccinations and have begun to welcome employees back into our offices on a voluntary basis using a cautious approach. We continue to enforce social distancing policies within all of our facilities, follow local and state guidelines concerning face coverings, and provide training for adherence to personal hygiene best practices in line with CDC and WHO guidelines.

We maintain an Internet website at www.rrd.com where our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available without charge, as soon as reasonably practicable following the time they are filed with, or furnished to, the Securities and Exchange Commission (“SEC”)~~. Reports, proxy and information statements and other information that is filed electronically with the SEC are also available on our website the SEC’s website atwww.sec.gov~~.

The Principles of Corporate Governance of our Board of Directors, the Charters of the Audit, Human Resources and Corporate Responsibility & Governance Committees of the Board of Directors and our Principles of Ethical Business Conduct are also available on the Investor Relations portion of ~~www.rrd.com~~, and will be provided, free of charge, to any stockholder who requests a copy. References to our website address do not constitute incorporation by reference of the information contained on the website, and the information contained on the website is not incorporated by reference into this Annual Report on Form 10-K.

~~This Annual Report on Form 10-K and any documents incorporated by reference contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.~~ These statements are subject to risks and uncertainties and are based on our beliefs and assumptions. Generally, forward-looking statements include information concerning our possible or assumed future actions, events, or results of operations. These statements may include, or be preceded or followed by, the words “may,” “will,” “should,” “might,” “could,” “would,” “potential,” “possible,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “hope” or similar expressions and their negative variations. We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all forward-looking statements.

Forward-looking statements are not guarantees of performance. The factors identified below are believed to be significant factors, but not necessarily all of the significant factors, that could cause actual results to differ materially from those expressed in any forward-looking statement. Unpredictable or unknown factors could also have material effects on us.

The following important factors, in addition to those discussed elsewhere in this Annual Report on Form 10-K, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. There may be other risks and uncertainties that we are unable to identify at this time or that we do not currently expect to have a material impact on the business. Undue reliance should not be placed on such statements, which speak only as of the date of this document or the date of any document that may be incorporated by reference into this document.

Consequently, readers of this Annual Report on Form 10-K should consider these forward-looking statements only as our current plans, estimates and beliefs. We undertake no obligation to update or revise any forward-looking statements in this Annual Report on Form 10-K to reflect any new events or any change in conditions or circumstances.

Our consolidated results of operations, financial position and cash flows can be adversely affected by various risks. These risks include the principal factors listed below and the other matters set forth in this Annual Report on Form 10-K. You should carefully consider all of these risks.

~~The pendency of our merger agreement with Chatham Asset Management, LLC could have an adverse effect on our business.~~

On December 14, 2021, we entered into a definitive merger agreement under which we agreed to be acquired by affiliates of Chatham Asset Management, LLC (“Chatham”). Under the terms of the merger agreement, an affiliate of Chatham will acquire all of the outstanding shares not already owned by Chatham, and RRD stockholders will received $10.85 per share in cash for each share of RRD common stock. All regulatory approvals have been obtained and at a special meeting on February 23, 2022, RRD’s stockholders approved the proposed merger. The merger with Chatham is expected to close on February 25, 2022.

The announcement and pendency of the merger could cause disruption in our business, including the potential loss or disruption of commercial relationships prior to the completion of the merger. For example, parties with which we do business may be uncertain as to the effects on them of the merger, including with respect to their current or future business relationships with us. These relationships may be subject to disruption as clients, suppliers and other persons with whom we have a business relationship may delay or defer certain business decisions or might decide to terminate, change or renegotiate their relationships with us or consider entering into business relationships with other parties. These disruptions could have an adverse effect on the results of our operations, cash flows and financial position. The announcement and pendency of the merger could also have a potential negative effect on our ability to retain management, sales and other key personnel.

The merger agreement generally requires us to operate our business in the ordinary course of business pending consummation of the merger, but includes certain contractual restrictions on the conduct of our business prior to completion of the merger. These restrictions may prevent us from taking certain specified actions or otherwise pursuing business opportunities during the pendency of the merger that may be beneficial to us. In addition, matters relating to the merger (including integration planning) will require substantial commitments of time and resources by our management, which could divert their time and attention. We have also incurred, and will continue to incur, significant non-recurring costs in connection with the merger that we may be unable to recover.

The risk, and adverse effect, of any disruption could be exacerbated by a delay in completion of the merger or termination of the merger agreement. Completion of the merger is subject to the satisfaction or waiver of a number of conditions, many of which are not within our control. The failure to satisfy all of the required conditions could delay the completion of the merger for a significant period of time or prevent it from occurring. We cannot provide assurance that our pending merger with Chatham will be completed. Failure to complete the merger could also negatively affect our stock price and our future business and financial results.

Transactions like the merger are frequently the subject of litigation or other legal proceedings, including actions alleging that either our board of directors breached their respective fiduciary duties to their stockholders by entering into the merger agreement, by failing to obtain a greater value in the transaction for their stockholders or otherwise. Some stockholder litigation has been filed in connection with the planned merger, and additional claims could be filed in the future. We believe that such litigation, claims or proceedings are without merit and we will defend against them, but we might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on our business, results of operation or financial position, including through the possible diversion of either company’s resources or distraction of key personnel.

~~All of the matters described above, alone or in combination, could materially and adversely affect our business, financial condition, results of operations and stock price.~~

Global market and economic conditions, which have been significantly affected by the COVID-19 pandemic, as well as the effects of these conditions on our clients’ businesses, may adversely affect us.

In general, demand for our products and services is highly correlated with general economic conditions. Because a significant part of our business relies on our clients’ advertising spending, which is driven in part by economic conditions and customer spending, a prolonged downturn in the global economy and an uncertain economic outlook may further reduce the demand for printing and related services that we provide to these clients. Delays or reductions in clients’ spending could have an adverse effect on demand for our products and services which may adversely affect our results of operations, financial position and cash flows. Economic weakness and constrained advertising spending may result in decreased revenue, operating margin, earnings and growth rates and difficulty in managing inventory levels and collecting accounts receivable. In addition, client difficulties may result in increases in bad debt write-offs and allowances for credit losses. Economic downturns may also result in restructuring actions and associated expenses and impairment of long-lived assets, including goodwill and other intangibles. Uncertainty about future economic conditions makes it difficult for us to forecast operating results and to make decisions about future investments.

As the COVID-19 pandemic spread across the globe during 2020 and 2021, it strained the global economy which resulted in decreased demand for certain of our products and services, and created tremendous business challenges for us and many of our clients and suppliers. We have taken a number of proactive measures to manage through the impact of the ongoing pandemic. The extent to which the pandemic continues to impact our operations and the operations of our suppliers and our clients will depend on future developments, which remain uncertain at this time, including the duration of the pandemic, the development and distribution of effective treatments and vaccines, and the degree and ultimate success of government intervention in stabilizing economies around the world. While we continue to identify and capitalize on pandemic-related opportunities, including producing pandemic-related orders, and we continue to implement cost-cutting measures to mitigate the effects of the pandemic, the decreased demand has adversely affected our business, operating results, financial condition and cash flows. Depending on the severity and duration of the global economic decline, revenue declines from decreased client demand has and could continue to materially adversely affect our business, operating results, financial condition and cash flows. Additionally, declining operating results and cash flows may also cause impairments of tangible and intangible assets and an increase in allowance for credit losses as a result of our inability to collect customer accounts receivable balances.

Changes in customer preferences have reduced, and may continue to reduce, demand for our products and services in certain markets. In addition, failure to manage changes in our relationships with our significant clients may have an adverse effect on our results of operations.

Many of the end markets in which our clients compete are experiencing changes due to technological progress and changes in customer preferences. In order to grow and remain competitive, we will need to continue to adapt to future changes in technology, enhance our existing offerings and introduce new offerings to address the changing demands of clients. If we are unable to continue to utilize new and existing technologies to adapt to new distribution methods and address changing customer preferences, our business may be adversely affected.

Technological developments and changing demands of clients may require additional investment in new equipment and technologies. We monitor changes in our clients’ markets and develop new solutions to meet clients’ needs. The development of such solutions may be costly and there is no assurance that these solutions will be accepted by our clients. If we are unable to adapt to technological changes on a timely basis or at an acceptable cost, clients’ demand for our products and services may be adversely affected.

In addition, electronic delivery of documents and data, including the online distribution and hosting of media content, offer alternatives to traditional delivery of printed documents. Customers continue to accept electronic substitution in statement printing and forms while online and digital advertising is impacting clients’ printed advertising spend. The extent to which customers will continue to accept electronic delivery is uncertain and it is difficult to predict future acceptance of these alternatives. Electronic delivery has adversely affected our products, such as forms and statement printing. To the extent that our clients and our client’s customers and regulators continue to accept these alternatives, demand for our products and services may be further adversely affected.

~~During 2021, our five largest clients accounted for 12.9% of our net sales in the aggregate. There can be~~ no assurance that our clients will continue to purchase our products in the same mix or quantities or on the same terms as in the past. The loss of or disruptions related to significant clients may result in a reduction in sales or change in the mix of products we sell to significant clients. This may adversely affect our results of operations, financial condition and cash flows.

~~Additionally, disputes with significant suppliers, including those related to pricing or performance, may adversely affect our ability to supply products~~ ~~to our clients and also our results of operations, financial condition and cash flows.~~

Our business is dependent upon brand reputation and the quality of our client support and services offerings. If we fail to offer effective client support and services, our brand reputation could be harmed and clients may not use our products and services, which may have an adverse effect on our results of operations.

A high level of client support and service is critical for the successful marketing and sale of our solutions and the maintenance and enhancement of our brand reputation. If we are unable to provide a level of client support and service to meet or exceed the expectations of our clients, we may experience a loss of clients and market share and a decline in our brand reputation which may result in reduced client demand for our products and services. Furthermore, our brand reputation may be impacted by a wide range of factors, some of which are out of our control, including actions of our competitors and third party providers and positive or negative publicity, any or all of which could adversely affect our operations.

~~We may be adversely affected by rising inflation, a decline in the availability of raw materials, supply chain disruptions, and labor shortages.~~

~~We are dependent on the availability of paper, ink, other raw materials, and labor to support our operations.~~ During 2021, we have seen price increases from nearly all of our material suppliers in all categories. Notably, paper products have seen significant price increases primarily caused by supply shortages from key suppliers. The supply shortages have been caused in part by manufacturing capacity reductions, labor shortages and other supply chain disruptions. We, and our suppliers, have also experienced labor shortages and increased wage pressure for manufacturing workers due to current market conditions. Further, we experienced supply chain disruptions and shipping delays caused by container shortages in key domestic and international ports, including China. We expect these factors to continue for the foreseeable future.

Increases in the costs of our raw materials and labor may increase our costs and we may not be able to pass these costs on to clients through higher prices. Increases in the cost of materials may adversely affect clients’ demand for our printing and related services. Other unforeseen developments in these markets may result in a decrease in the supply of paper, ink or other raw materials which may adversely affect our results of operations, financial position and cash flows.

~~The highly competitive market for our products and industry consolidation may continue to create adverse price pressures.~~

The markets for the majority of our product categories are highly fragmented and we have a large number of competitors. We believe excess capacity in our markets has caused downward price pressure and this trend is likely to continue. In addition, consolidation in the markets in which we compete may increase competitive price pressures due to competitors lowering prices.

We believe that selectively pursuing acquisitions is an important strategy for us. If our competitors are able to successfully combine with one another or otherwise consolidate, the competitive landscape would be significantly altered. Such consolidation may create stronger competitors with greater financial resources and broader manufacturing and distribution capabilities than our own, and, if we are not successful with our own efforts to consolidate or adapt effectively to increased competition, the resulting increase in competitive pressures may adversely affect our results of operations, financial position and cash flows.

~~Undetected errors or failures found in our products and services may result in loss of or delay in market acceptance of our products and services that may seriously harm our business.~~

Our products and services may contain undetected errors or scalability limitations at any point, but particularly when first introduced or as new versions are released. We frequently release new versions of our products and different aspects of our platform are in various stages of development. Despite testing by us and by current and potential clients, errors may not be found in new products and services until after commencement of commercial availability or use, resulting in a loss of or a delay in market acceptance, damage to our reputation, client dissatisfaction and reductions in net sales and margins, any of which may have an adverse effect on our results of operations, financial condition and cash flows.

Adverse financial market conditions, our operating performance and our creditworthiness may limit our ability to obtain future financing and the cost of any such capital may be higher than in past periods.

We have a substantial amount of outstanding debt which could adversely affect our business, results of operations, financial condition and cash flows. Uncertainty and volatility in global financial markets, including from impacts of the COVID-19 pandemic, may cause financial institutions to fail, lenders to reduce lending or investors to reinvest in assets that are considered less risky. The failure of a financial institution that is a lender under our existing senior secured asset-based revolving credit facility (the “ABL Credit Facility”) would reduce its size unless another financial institution was willing to replace such commitments. Future capital markets transactions are dependent on our financial performance as well as market conditions, which may result in receiving financing on terms less favorable to us than our existing financings. In addition, our access to future financing and our ability to refinance existing debt will depend on a variety of factors such as our financial performance, the general availability of credit, our credit ratings and credit capacity at the time we pursue such financing.

Our current corporate credit ratings are below investment grade and, as a result, our financing costs may further increase and our ability to obtain financing may be limited. If adequate capital is not available to us on reasonable terms and our internal sources of liquidity prove to be insufficient, or if future financings require more restrictive covenants, such a combination of events could adversely affect our ability to (i) acquire new businesses or enter new markets, (ii) service or refinance our existing debt, (iii) pay dividends on common stock, (iv) make necessary capital investments, and (v) make other expenditures necessary for the ongoing conduct of our business.

Our ABL Credit Agreement limits our borrowing capacity to the value of certain of our U.S. assets. In addition, our obligations under our ABL Credit Agreement and Term Loan Credit Agreement along with our Secured Notes are secured by substantially all of the assets of the Company and our material domestic subsidiaries and lenders may exercise remedies against the collateral if an event of default occurs.

Our borrowing capacity under our ABL Credit Agreement is equal to the lesser of (i) $650.0 million and (ii) a borrowing base formula based on the amount of U.S. accounts receivable, inventory, machinery, equipment and, if we were to so elect in the future, subject to the satisfaction of certain conditions, fee-owned real estate of the Company and our material domestic subsidiaries that are guarantors under the ABL Credit Agreement, subject to certain eligibility criteria and advance rates (collectively, the “Borrowing Base”). In the event of any material decrease in the amount of or appraised value of the assets in the Borrowing Base, our borrowing capacity would similarly decrease, which could adversely affect our business and liquidity.

If an event of a default occurs under our ABL Credit Agreement, the lenders’ commitment to extend further credit under our ABL Credit Agreement could be terminated, our outstanding obligations under the ABL Credit Agreement, our credit agreement for the $550 million senior secured Term Loan B (the “Term Loan Agreement”)(collectively, the “Credit Agreements”) and the 6.125% Secured Notes due 2026 (the “Secured Notes”) could become immediately due and payable, outstanding letters of credit issued under our ABL Credit Agreement may be required to be cash collateralized, and remedies may be exercised against the collateral securing either or both of the Credit Agreements and the Secured Notes. If we are unable to borrow under our ABL Credit Agreement, we may not have the necessary cash resources to fund our operations or to meet scheduled repayments of other outstanding indebtedness and, if any event of default occurs under either Credit Agreement or the indenture for the Secured Notes, there is no assurance that we would have the cash resources available to repay such accelerated obligations, refinance such indebtedness on commercially reasonable terms, or at all, or cash collateralize our letters of credit issued under the ABL Credit Agreement, which would have a material adverse effect on our business, financial condition, results of operations and liquidity.

~~Restrictive covenants in our ABL Credit Agreement, Term Loan Credit Agreement, and the indenture for our Secured Notes could limit our financial and operating flexibility.~~

Our ABL Credit Agreement, Term Loan Credit Agreement, and the indenture for our Secured Notes contain various affirmative and negative covenants applicable to us and our subsidiaries. Certain restrictions on operations become applicable if our borrowing availability under the ABL Credit Agreement falls below certain thresholds. These restrictions could impose significant operating and financial limitations and restrictions on us, including restrictions on our ability to enter into particular transactions and to engage in other actions that we may believe are advisable or necessary for our business.

~~An increase in interest rates could have a material adverse effect on our business.~~

Borrowings under our Credit Agreements bear interest at rates that are calculated based on the London Interbank Offered Rate (LIBOR) or a base rate plus, in each case, an applicable margin which, in the case of the ABL Credit Agreement, is dependent on the average quarterly borrowing availability under our ABL Credit Agreement. As a result, we are exposed to risks associated with fluctuations in interest rates, including if the U.S. Federal Reserve raises its benchmark interest rate. We may utilize derivative financial instruments, such as interest rate swaps, to manage our interest rate risk. There can be no assurance, however, that increases in interest rates will not adversely affect our business, financial position and results of operations by causing an increase in interest expense. Significantly higher interest rates may also, among other things, reduce the availability and increase the cost of obtaining new debt and refinancing existing indebtedness, as well as negatively impact the market price of our common stock.

In July 2017 the United Kingdom Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced that the FCA intended to stop compelling banks to submit rates for the calculation of LIBOR after 2021. On December 31, 2021, the ICE Benchmark Administration (IBA), which administers LIBOR, ceased publication of one-week and two-month U.S. dollar (USD) LIBOR. The IBA has indicated that it expects to continue publishing other USD LIBOR tenors until June 2023. The Federal Reserve Board, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency also required banks to cease entering into new contracts that use USD LIBOR as a reference rate after December 31, 2021. The potential cessation of USD LIBOR could cause market volatility or disruption, which could adversely affect our floating rate debt obligations, including obligations under our ABL Credit Agreement and Term Loan Agreement, our outstanding derivative financial instrument that utilizes LIBOR, and our overall cost of funding.

~~We may not be able to reduce or extinguish our material indebtedness, and as a result we may have increased financial leverage, which may adversely affect our business.~~

We have substantial indebtedness and our interest and principal payments are significant. In addition, our Term Loan Credit Agreement and the indenture for our Secured Notes require us to make prepayments with excess cash flow and asset sale proceeds in certain circumstances. If we are unable to reduce this indebtedness, we may continue to have increased financial leverage, which may limit or restrict our ability to operate our business. In addition, our ability to make payments on, repay or refinance, such debt, will depend largely upon our future operating performance.

~~We may be contingently liable for certain liabilities related to the spin-off of~~ ~~LSC~~ ~~and~~ ~~DFIN~~

Subsequent to the spinoff of LSC and Donnelley Financial, we may be contingently liable for obligations under various operating leases for office, warehouse and manufacturing locations of LSC and Donnelley Financial. In the event that LSC or Donnelley Financial, or any successor lessee, fail to make lease payments or fail to pay other obligations under these lease agreements, we may be required to satisfy those obligations to the lessor. Our exposure to these potential contingent liabilities decreases over time as LSC and successor lessees and Donnelley Financial pay monthly lease obligations and as the leases expire. As of December 31, 2021, these potential contingent lease obligations were $29.0 million and $1.2 million for LSC and Donnelley Financial, respectively.

On April 13, 2020, LSC announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. LSC was subsequently acquired by a third party buyer (“the Buyer”). The Buyer assumed the majority of LSC’s existing leases. We will continue to be contingently liable for these leases until their termination or renewal.

~~We may be also liable for liabilities where we share joint and several liability with LSC and other members of the control group including certain environmental liabilities. Refer to Footnote 8 –~~ ~~Commitments and Contingencies~~ ~~to the Consolidated Financial Statements for further details.~~

~~The spinoff transactions of LSC and Donnelley Financial in October 2016 could result in significant tax liability.~~

We obtained an opinion from our outside legal counsel substantially to the effect that, among other things, the distributions in connection with the spinoff transactions qualify as tax-free distributions under the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The opinion will not be binding on the IRS or the courts. Additionally, we have received a private letter ruling from the IRS concluding that certain limited aspects of the distributions will not prevent the distributions from satisfying certain requirements for tax-free treatment under the Code. The opinion and the private letter ruling rely on customary factual representations and assumptions, which if incorrect or inaccurate may jeopardize the ability to rely on such opinion and letter ruling.

If either or both of the distributions do not qualify for tax-free treatment for U.S. federal income tax purposes, then, in general, we would be subject to tax as if we had sold the common stock of such spun-off entity in a taxable sale for its fair value. In that case, we expect that RRD stockholders would be subject to tax as if they had received a distribution equal to the fair value of the spun-off entity’s common stock that was distributed to them, which generally would be treated first as a taxable dividend to the extent of our earnings and profits, then as a non-taxable return of capital to the extent of each holder’s tax basis in its Company common stock, and thereafter as capital gain with respect to any remaining value. We expect that the amount of any such taxes to RRD stockholders and us would be substantial if this were to occur.

~~Our operations are subject to political and regulatory risks in the countries in which we operate.~~

Our operations may be substantially affected by both domestic and international political or regulatory risk including general political conditions in the countries in which we operate; unexpected legal, regulatory or tax changes; governmental actions which have the effect of restriction on our business or opportunities or make it more expensive for us to operate in those jurisdictions; and changes in tax laws that would reduce net income due to withholding requirements or the imposition of tariffs or other restrictions.

In addition, potential political uncertainty in our developed markets, or the perception of such uncertainty, has had and may continue to have an adverse effect on global economic conditions and the stability of global financial markets. This may reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Any of these factors may adversely affect our results of operations, financial position and cash flows. Our success will depend, in part, on our ability to effectively anticipate and manage these and other risks associated with our domestic and international operations.

~~Changes in rules and regulations to which we are subject may increase our costs, which may adversely affect us.~~

We are subject to numerous rules and regulations, including, but not limited to, product safety, environmental and health and welfare benefit regulations. These rules and regulations may be changed by local, state or federal governments in countries in which we operate. Changes in these regulations may result in a significant increase in our costs to comply. Compliance with changes in rules and regulations may require increases to our workforce, increased cost for compensation and benefits, or investments in new or upgraded equipment. In addition, growing concerns about climate change, including the impact of global warming, may result in new regulations, including with respect to greenhouse gas emissions (including carbon dioxide) and/or “cap and trade” legislation. Compliance with new rules and regulations or changes in existing rules and regulations, as well as the need to address any violations thereof, may result in additional costs, which may adversely affect our results of operations, financial condition and cash flows.

Many of our clients are subject to rules and regulations requiring certain printed or electronic communications, governing the form of such communications and protecting the privacy of customers. For instance, our healthcare and insurance printing businesses are subject to such regulations. Changes in these regulations may impact clients’ business practices and may reduce demand for our products and services. Changes in such regulations may eliminate the need for certain types of communications altogether or may impact the quantity or format of such communications.

We are a U.S.-based global company subject to tax in multiple U.S. and foreign tax jurisdictions. Significant judgment is required in determining our global provision for income taxes, deferred tax assets and liabilities and in evaluating our tax positions on a worldwide basis. While we believe our tax positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be overturned by jurisdictional tax authorities, which may have a significant impact on our global provision for income taxes.

Many countries are actively considering changes to existing tax laws that, if enacted, could increase our tax obligations in countries where we do business. If U.S. or other foreign tax authorities change applicable tax laws, our overall taxes could increase, which may adversely affect our business, results of operations, financial position and cash flows.

~~We may be unable to improve our operating efficiency rapidly enough to meet market conditions.~~

Because the markets in which we operate are highly competitive, we must continue to improve our operating efficiency in order to maintain or improve our profitability. There is no assurance that we will be able to do so in the future. In addition, the need to reduce ongoing operating costs may result in significant up-front costs to reduce workforce, close or consolidate facilities, or upgrade equipment and technology.

~~A decline in our Company’s or our individual reporting units’ expected profitability may result in the impairment of assets, including goodwill, other long-lived assets and deferred tax assets.~~

In prior years we have recorded significant goodwill and other long-lived asset impairments and continue to hold goodwill, other long-lived assets and deferred tax assets on our balance sheet. A decline in expected profitability may call into question the recoverability of our remaining goodwill, other long-lived tangible and intangible assets or deferred tax assets and require the write down or write off of these assets or, in the case of deferred tax assets, recognition of a valuation allowance through a charge to income. Such events have had and may continue to have an adverse effect on our results of operations and financial position.

~~Catastrophic events may damage or destroy our factories, distribution centers or other facilities, which may disrupt our business.~~

Natural disasters, conflicts, wars, terrorist attacks, fires or other catastrophic events may cause damage or disruption to our factories, distribution centers or other facilities, which may adversely affect our ability to manage logistics, cause delays in the delivery of products and services to our clients, and create inefficiencies in our supply chain. An event of this nature may also prevent us from maintaining ongoing operations and performing critical business functions. While we maintain backup systems and operate out of multiple facilities to reduce the potentially adverse effect of these types of events, a catastrophic event that results in the destruction of any of our major factories, distribution centers or other facilities would affect our ability to conduct normal business operations, which may adversely affect our results of operations, financial position and cash flows.

~~We may be unable to hire and retain talented employees, including management.~~

Our success depends, in part, on our general ability to attract, develop, motivate and retain highly skilled and diverse workforce. The loss of a significant number of our employees or the inability to attract, hire, develop, train and retain skilled personnel, particularly during strong economic periods, may have an adverse effect on us. Various locations may encounter competition with other manufacturers for skilled labor. Many of these competitors may be able to offer significantly greater compensation and benefits or more attractive lifestyle choices than we offer. In addition, many members of our management team have significant industry experience that is valuable to our competitors. We enter into non-solicitation and, as appropriate, non-competition agreements with certain of our executive officers, prohibiting them contractually from soliciting our clients and employees and from leaving and joining a competitor within a specified period. Our inability to hire and retain talented employees or the loss of senior members of our senior management team may result in challenges or temporary difficulty in managing our business, which may adversely affect our results of operations, financial condition or cash flows.

~~The trend of increasing costs to provide health care and other benefits to our employees and retirees may continue.~~

We provide health care and other benefits to employees and retirees. Costs for health care have increased more rapidly than general inflation in the U.S. economy. If this trend in health care costs continues, our cost to provide such benefits may increase, adversely affecting our profitability. Changes to health care regulations in the U.S. may also increase our cost of providing such benefits.

~~Changes in market conditions or lower returns on assets may increase required pension and OPEB plan contributions in future periods.~~

The funded status of our pension and OPEB plans is dependent upon many factors, including returns on invested assets and the level of certain market interest rates. Market conditions may lead to changes in the discount rates used to value the year-end benefit obligations of the plans, which may partially mitigate or worsen the effects of lower asset returns. If adverse market conditions were to continue for an extended period of time, our costs and required cash contributions associated with pension and OPEB plans may substantially increase in future periods, adversely impacting our financial condition.

~~Our services depend on the reliability of computer systems we and our vendors maintain. If our systems fail or are unreliable, our operations may be adversely affected.~~

We depend on our information technology and data processing systems to operate our business, and a significant malfunction or disruption in the operation of our systems may disrupt our business and adversely affect our ability to operate and compete in the markets we serve. These systems include systems that we own and operate, as well as those systems of our vendors. Such systems are susceptible to malfunctions and interruptions due to equipment damage and power outages and a range of other hardware, software and network problems, as well as human error, employee misconduct, hacking and cybercrime. We also periodically upgrade and install new systems, which if installed or programmed incorrectly, may cause significant disruptions. If a disruption, such as the security event identified in December 2021 described elsewhere in this Annual Report, occurs, we may incur further losses and costs for interruption of our operations, which may adversely affect our results of operations, financial condition and cash flows.

We have suffered and may in the future suffer a systems intrusion in our technical environment. If our efforts to protect the security of corporate information are unsuccessful, any such further failures may result in significant costs to us to investigate and remediate the data-breach, to defend against private litigation or government enforcement actions or to pay penalties. Any such failures may have a material adverse effect on our results of operations, financial condition, cash flows and reputation.

~~Maintaining the confidentiality, integrity and availability of our systems, software and solutions is an issue of critical importance for us and our clients and~~ users, who rely on us to protect the confidentiality of certain information they provide us, particularly as a significant number of our employees continue to work from home during the COVID-19 pandemic. Many of our clients’ industries are highly regulated and have established standards and requirements for safeguarding the confidentiality, integrity and availability of information relating to their businesses and clients. Confidential and sensitive information stored in our systems are susceptible to cybercrime, or threats of intentional disruption, which are increasing in sophistication and frequency. Exposure of the information maintained on our systems due to human error, breach of our systems through hacking or cybercrime, a leak of confidential information due to employee misconduct or other such events may damage our reputation, subject us to regulatory enforcement action and cause significant reputational harm for our clients, all of which may materially affect our results of operations, financial condition and cash flows. In addition, as security threats continue to evolve and increase in terms of sophistication, we may invest additional resources in the security of our systems. The level of investment could also adversely affect our results of operations, financial condition and cash flows.

We have in the past acquired, and intend in the future to acquire, other businesses, and we may be unable to successfully integrate the operations of these businesses and may not achieve the cost savings and increased net sales anticipated as a result of these acquisitions.

Achieving the anticipated benefits of acquisitions will depend in part upon our ability to integrate these businesses in an efficient and effective manner. The integration of companies that have previously operated independently may result in significant challenges, and we may be unable to accomplish the integration smoothly or successfully. In particular, the coordination of geographically dispersed organizations with differences in corporate cultures and management philosophies may increase the difficulties of integration. The integration of acquired businesses may also require the dedication of significant management resources, which may temporarily distract management’s attention from our day-to-day operations. In addition, the process of integrating operations may cause an interruption of, or loss of momentum in, the activities of one or more of our businesses and the loss of our key personnel or the acquired businesses. Further, employee uncertainty and lack of focus during the integration process may disrupt our operations or the operations of the acquired businesses. Our strategy is, in part, predicated on our ability to realize cost savings and to increase net sales through the acquisition of businesses that add to the breadth and depth of our products and services. Achieving these cost savings and net sales increases is dependent upon a number of factors, many of which are beyond our control. In particular, we may not be able to realize the benefits of more comprehensive product and service offerings, anticipated integration of sales forces, asset rationalization and systems integration.

~~We may be more vulnerable to adverse events and trends associated with operations outside the U.S.~~

~~We have significant operations outside the U.S. Conducting business outside the U.S. subjects us to a number of additional risks and challenges, including:~~

These factors, individually or in combination, may impair our ability to effectively deliver our products and services, result in unexpected expenses, or cause an unexpected decline in the demand for our products in certain countries or regions. Specifically with respect to our operations in China, our financial performance may be adversely impacted as a result of the following risks, among others, regulation of foreign investment and business activities by the Chinese government, including scrutiny of foreign companies, may limit our ability to expand our business in China; uncertainties with respect to the legal system in China may limit the legal protections available to us in China; government restrictions on the remittance of currency out of China may limit the ability of any subsidiary we may establish in China to pay dividends and make other distributions to us; unfavorable results of ongoing trade negotiations between the U.S. and China, including potential unfavorable taxes and tariffs may limit our operations in China or make them more costly.

~~We are exposed to significant risks related to potential adverse changes in currency exchange rates.~~

We are exposed to the impact of foreign currency fluctuations based on our global operations. Although the results in our Consolidated Financial Statements are reported in U.S. dollars, we also earn revenues, pay expenses, own assets and incur liabilities in various foreign currencies. Fluctuations in currency exchange rates have had, and will continue to have, an impact on our results expressed in U.S. dollars. We may enter into derivative instruments, such as foreign currency forward contracts, to hedge certain exposures to exchange rate fluctuations. There can be no assurance, however, that our efforts at hedging will be successful and that currency exchange rate fluctuations will not adversely affect our results of operations, financial position and cash flows.

We also face risks arising from the imposition of exchange controls, which may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls.

~~Changes in postal rates, regulations and delivery structure may adversely affect demand for our products and services.~~

Postal costs are a significant component of many of our clients’ cost structure and postal rate changes can influence the number of pieces and types of mailings that our clients mail. In accordance with the 2006 PAEA, ~~the PRC approved a USPS filing for a CPI based average price increase of 1.5% on average for the Market Dominant mail classes, which took effect January 24, 2021.~~

Additionally, as required on the 10-year anniversary of PAEA, the PRC initiated a comprehensive review of PAEA on December 20, 2016, to determine if the current system for regulating rates and classes for market-dominant products is still achieving the original objectives of the law. Accordingly, the PRC concluded that the current system was not meeting all of PAEA’s original objectives and after careful consideration of mailing industry stakeholder input, issued its final order on November 30, 2020. The final PRC order provides the USPS with additional discretionary rate-making authority, above CPI, estimated at 5.5 %, that was used during 2021 and could continue to be used during 2022.

The impact of any restructuring of the USPS, which may require legislative action, cannot currently be estimated. If implemented, certain changes may impact our clients’ ability or willingness to communicate by mail. Declines in print volumes mailed would have an adverse effect on our results of operations, financial condition and cash flows.

~~Increased transportation costs and changes in the relationships with independent shipping companies may have an adverse effect on our business.~~

We rely upon third party carriers for timely delivery of our product shipments. As a result, we are subject to carrier disruptions and increased costs due to factors that are beyond our control, including employee strikes, inclement weather and increased fuel costs. Any failure to deliver products to our clients in a timely and accurate manner may damage our reputation and brand and may cause us to lose clients. If our relationship with any of these third party carriers is terminated or impaired, or if any of these third parties are unable to ship products for us, we would be required to use alternative, and possibly more expensive, carriers for the shipment of products. We may be unable to engage alternative carriers on a timely basis or on terms favorable to us, if at all, which may have an adverse effect on our results of operations, financial condition and cash flows.

Furthermore, shipping costs represent a significant operational expense for us. Changes in shipping terms, or the inability of these third party shippers to perform effectively (whether as a result of mechanical failure, casualty loss, labor stoppage, or any other reason), may have an adverse effect on our results of operations, financial condition and cash flows. Additionally, deterioration of the financial condition of these third-party carriers may have an adverse effect on our shipping costs. Any future increases in shipping rates may have an adverse effect on our results of operations, financial condition and cash flows, particularly if we are unable to pass on these higher costs to our clients.

In addition, the onset of COVID-19 and the resulting rapid increase in eCommerce, especially residential delivery, caused significant increases in demand for both small parcel and trucking transportation services across all markets. Capacity and service challenges for the USPS and all other carriers, created an operating environment that included transit delays, suspension of guaranteed services, peak season surcharges, increased spot rates and allocated or restricted shipping. We expect high demand will continue to be a challenge to transportation providers in the future.~~Increased cost and order fulfillment limitations may~~ ~~have an adverse effect on our results of operations, financial condition and cash flows.~~

~~We have no unresolved written comments from the SEC staff regarding our periodic or current reports under the Securities Exchange Act of 1934.~~

Our corporate office is located in leased office space in Chicago, Illinois. As of December 31, 2021, we leased or owned 119 U.S. facilities, some of which had multiple buildings and warehouses, and these U.S. facilities encompassed approximately 12.7 million square feet. We leased or owned 57 international facilities, some of which had multiple buildings and warehouses, encompassing approximately 5.2 million square feet primarily in Asia, Canada, Europe and Latin America. Of our U.S. and international facilities, approximately 7.4 million square feet of space was owned, while the remaining 10.5 million square feet of space was leased.

From time to time, our clients and others file voluntary petitions for reorganization under United States bankruptcy laws. In such cases, certain pre-petition payments we received from these parties could be considered preference items and subject to return. In addition, we are party to certain litigation arising in the ordinary course of business. We believe that the final resolution of these preference items and litigation will not have a material effect on our consolidated results of operations, financial position or cash flows.

~~For a discussion of certain litigation involving us, see Note 8,~~ ~~Commitments and Contingencies,~~ ~~to the Consolidated Financial Statements.~~

~~Our common stock is listed and traded on the New York Stock Exchange (NYSE) under the symbol “RRD”. As of February 18, 2022, there were 3,373 stockholders of record of our common stock.~~

~~For information regarding equity compensation plans, see Item 12 of Part III of this Annual Report on Form 10-K.~~

The graph below compares five-year returns of our common stock with those of the S&P SmallCap 600 and the S&P 1500 Industrials Index. The comparison assumes an initial investment of $100 on December 31, 2016 and that all dividends have been reinvested.

The following discussion of our financial condition and results of operations should be read together with the Consolidated Financial Statements and Notes to those statements included in Item 15 of Part IV of

RR Donnelley & Sons Company (the “Company,” “RRD,” “our,” “us” or “we”) is filing this ~~Annual Report~~Amendment No. 1 on Form ~~10-K.~~

~~For a description of our business, segments and product and service offerings, see Item 1,~~ ~~Business, of Part I of this Annual Report on Form 10-K.~~

Our product and service offerings primarily consist of commercial print, packaging, statements, direct marketing, labels, digital print and fulfillment, supply chain management, forms, business process outsourcing, and digital and creative solutions.

~~On December 14, 2021, we entered into a definitive merger agreement under which we agreed to be acquired by affiliates of Chatham Asset Management, LLC (“Chatham”~~10-K/A (this “Amendment No. 1”), a leading private investment firm. Under the terms of the merger agreement, an affiliate of Chatham will acquire all of the outstanding shares of RRD common stock not already owned by Chatham, and RRD stockholders will receive $10.85 per share in cash for each share of RRD common stock. All regulatory approvals have been obtained and at a special meeting on February 23, 2022, RRD’s stockholders approved the proposed merger. The merger with Chatham is expected to close on February 25, 2022. Upon completion of the transaction, RRD’s shares will no longer trade on the New York Stock Exchange and RRD will become a private company.

On November 2, 2020, we sold DLS Worldwide and on November 3, 2020 we sold International Logistics, which represented the remaining parts of the broader Logistics business and were components of the Business Services reporting segment, for a cash purchase price of $225.0 million and $13.0 million respectively, subject to customary working capital adjustments. These transactions are part of our strategy to optimize our portfolio and reduce debt. As part of our plan, we previously sold the Print Logistics business in July 2018 and the Courier Logistics business in March 2020. Accordingly, we have reflected the Print Logistics business, Logistics Courier business, the DLS Worldwide business, and the International Logistics business as discontinued operations. The financial results of these businesses have been excluded from continuing operations and segment results for all periods presented unless otherwise noted. Refer to ~~Note 2 –Discontinued Operations~~ to our ~~Consolidated Financial Statements for additional information.~~

During 2021 and 2020, the COVID-19 pandemic created, and continues to create, significant business challenges for companies around the world, including many of our clients across the broad number of industries we serve. In response to the pandemic, we established a formal operating plan that we are utilizing to manage our business through this challenging global business environment. Our operating plan consists of three clear priorities: to protect the health and safety of our employees, to sustain operational and supply chain continuity, and to effectively manage our business performance and liquidity throughout this very volatile period.

We are continually evolving our policies and procedures to adhere to the latest best practices being provided by the Centers for Disease Control (“CDC”) and World Health Organization (“WHO”). Our cross-functional COVID Task Force created at the onset of the pandemic has developed safety measures, policies, and procedures for our workplace. We have implemented flexible working policies, including telecommuting and staggered shifts, while allowing for voluntary leaves of absence. We have encouraged vaccinations and recently have begun to welcome employees back into our offices using a cautious approach. We continue to enforce social distancing policies within all of our facilities, follow local and state guidelines concerning face coverings, and provide training for adherence to personal hygiene best practices in line with CDC and WHO guidelines.

We have activated our business continuity plans and are leveraging our strong supply chain partnerships to continue to meet the ongoing needs of our 25,000 global clients. We remain fully operational across the 28 countries in which we operate.

Although the COVID-19 pandemic continued to create challenges in 2021, we believe that there are three primary factors that are helping mitigate the top line impact from the pandemic. These factors include our diverse portfolio of products and services, the lack of client concentration, and the products and services we have introduced to meet the evolving needs of our clients.

The extent to which the pandemic will continue to impact our business, results of operations, financial position and cash flows will depend on future developments which remain highly uncertain and cannot be fully predicted or estimated at this time. However, amidst the global uncertainty posed by COVID-19, we are positioning the Company to weather economic uncertainty and protect the short and long-term interests of our stakeholders. Continuing into 2022, we remain laser-focused on lowering our cost structure and on maintaining a sufficient level of liquidity.

Net sales for the year ended December 31, 2021 were $4,963.7 million, an increase of $197.4 million, or 4.1%, compared to the year ended December 31, 2020. Net sales increased $50.0 million due to favorable changes in foreign exchange rates and were unfavorably impacted by $6.5 million due to the Chile business closure in 2020. Net sales also increased due to ~~higher volume reflectingstrengthening demand for many of our products and services and higher prices as we attempt to recover inflationary cost increases. Notably, higher demand for books and trading cards contributed to thegrowth in our Commercial Print and Packaging products~~. The increase also reflects continued recovery from the COVID-19 pandemic, partially offset by large, non-recurring pandemic-related orders in 2020 and the Census project, which was fully completed in the third quarter of 2020.

~~Income from operations for the year ended December 31, 2021 was $163.5 million, an increase of $55.4 million compared to the year ended December 31, 2020. T~~he increase was primarily driven by higher sales, cost control initiatives and lower restructuring and impairment expenses, partially offset by merger related expenses and an unfavorable impact of foreign exchange rates on expenses.

~~We continue to assess opportunities to reduce our cost structure and enhance productivity throughout the business. During the year ended December 31, 2021,~~ we realized significant cost savings from recent and previous restructuring activities including the reorganization of administrative and support functions across all segments, several facility consolidations, and asset rationalization. These savings were partially offset by higher variable incentive compensation and the effect of unfavorable exchange rates on expenses. Selling, general and administrative expenses (exclusive of depreciation and amortization) increased by $3.1 million, or 0.5%, for the twelve months ended December 31, 2021 compared to the same period in 2020 reflecting higher sales and increased compensation expense, partially offset by cost control initiatives.

~~Net cash provided by operating activities for the year ended December 31, 2021 was $92.1million as compared to $149.8 million for the year ended December 31, 2020.~~ The decrease in operating cash flow in 2021 was primarily driven by $44.2 million of merger related cash payments including accelerated incentive compensation, the payment of a break fee and other professional fees. Operating cash flow was also impacted by $31.1 million of LSC bankruptcy related payments primarily associated with lump sum settlements of two MEPP plans, and a $17.5 million repayment of payroll taxes that were deferred in 2020 as part of the CARES Act. Operating cash flow also decreased due to working capital investments, particularly inventory, higher incentive compensation payments, and a $9.2 million payment to terminate certain interest rate swaps, partially offset by lower restructuring, tax and interest payments.

We work with our clients to create, manage, deliver and optimize their multichannel communications strategies. We have and will continue to develop our creative and design, content management, digital and print production, supply chain management and distribution services to address our clients’ evolving needs.

Our global platform provides differentiated solutions for our clients through our broad range of complementary communications services and innovative leadership in both conventional print and digital technologies. This platform has enabled RRD to develop strong client relationships, and we are focused on expanding these relationships to a broader range of our offerings. The flexibility of our platforms enhances the value we deliver to our clients and we intend to expand our capabilities in order to make it easier for clients to manage their full range of communication needs.

We believe productivity improvements and cost reductions are critical to our competitiveness. We continue to implement strategic initiatives across each of our segments to reduce our overall cost structure and enhance productivity primarily through restructuring which includes consolidations, reorganizations and integrations of operations, streamlining of administrative and support activities, and asset rationalization.

We seek to deploy our capital using a balanced approach in order to ensure financial flexibility and provide returns to stockholders. Our near-term priority for capital deployment is principal and interest payments on our debt obligations. We believe that a strong financial condition is important to clients focused on establishing or growing long-term relationships.

We use several key indicators to gauge progress toward achieving these objectives. These indicators include organic sales growth, operating margins, cash flow from operations and capital expenditures. We target long-term net sales growth, while improving operating margins by achieving productivity improvements that offset the impact of price declines and cost inflation. Cash flows from operations are targeted to be stable over time, but in any given year can be significantly impacted by the timing of non-recurring or infrequent receipts and expenditures, the level of required pension and OPEB plan contributions, the timing of tax payments and the impact of working capital changes.

~~We face many challenges and risks as a result of competing in highly competitive global markets. Refer to Item 1A,~~ ~~Risk Factors,~~ ~~of Part I of this~~ Annual Report on Form 10-K for ~~further discussion.~~the fiscal year ended December 31, 2021 (the “Form 10-K”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 24, 2022, to provide the information required by Part III of Form 10-K. This information was previously omitted from the Form 10-K in reliance on General Instruction G(3) to Form 10-K, which permits the information in Part III to be incorporated in the Form 10-K by reference from our definitive proxy statement if such statement is filed no later than 120 days after end of our fiscal year. We are filing this Amendment No. 1 to include Part III information in our Form 10-K because we will not file a definitive proxy statement containing this information within 120 days after the end of the fiscal year covered by the Form 10-K. This Amendment No. 1 amends and restates in their entirety Items 10, 11, 12, 13 and 14 of Part III of the Form 10-K.

~~RESULTS~~In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 12b-15 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, updated certifications of the Company’s principal executive officer and principal financial officer are included as Exhibits 31.3 and 31.4 hereto. Because no financial statements have been included in this Amendment No. 1 and this Amendment No. 1 does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4, and 5 of the certifications have been omitted. We are not including the certifications under Section 906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment No. 1.

No other changes have been made to the Form 10-K other than those described above. This Amendment No. 1 does not reflect subsequent events occurring after the original filing date of the Form 10-K or modify or update in any way the financial statements, consents or any other items disclosures made in the Form 10-K in any way other than as required to reflect the amendments discussed above. Accordingly, this Amendment No. 1 should be read in conjunction with the Form 10-K and the Company’s other filings with the SEC subsequent to the filing of the Form 10-K.

Set forth below is certain information regarding each of the Company’s current directors as of December 31, 2021, ~~AS COMPARED TO THE YEAR ENDED DECEMBER 31, 2020~~including the qualifications, experience and selected other biographical information for each director. Directors are elected annually to serve until their successors are duly elected and qualified or until their earlier death, disqualification, resignation or removal from office. There are no arrangements or understandings between a director and any other person pursuant to which such director was or is to be selected as a director or nominee.

Certain information with respect to executive officers of the ~~results~~Company is set forth under the heading “Executive Officers of ~~operations~~the Registrant” in Part I, Item 1 of the Company’s Annual Report on Form 10-K for the ~~years~~fiscal year ended December 31, 2021, and ~~2020:~~is hereby incorporated in this Part III, Item 10 by reference. There are no arrangements or understandings between an executive officer and any other person pursuant to which such executive officer was or is to be selected as an officer.

There are no family relationships among any of our directors and executive officers.

Based solely upon our review of the Forms 3, 4 and 5 filed pursuant to Section 16(a) of the Exchange Act, as amended, during (or with respect to) our most recent fiscal year and written representations from our officers and directors that no other reports were required, we believe that all of our directors, officers and beneficial owners of more than 10% of the Company’s common stock have filed all such reports on a timely basis during 2021, except that one Form 3 for each of Mr. DuPont and Mr. Houck and a Form 4 for each of Mr. Pecaric, Ms. Steiner and Mr. Sharp were not timely filed due to administrative difficulties.

The Company maintains its Principles of Ethical Business Conduct and the policies referred to therein which are applicable to all directors and employees of the Company. In addition, the Company has adopted a Code of Ethics that applies to the chief executive officer and senior financial officers. The Principles of Ethical Business Conduct and the Code of Ethics cover all areas of professional conduct, including, but not limited to, conflicts of interest, disclosure obligations, insider trading and confidential information, as well as compliance with all laws, rules and regulations applicable to our business. The Company strongly encourages all employees, officers and directors to promptly report any violations of any of the Company’s policies. In the event that an amendment to, or a waiver from, a provision of the Code of Ethics is necessary, the Company intends to post such information on its website. The full text of each of the Principles of Ethical Business Conduct and our Code of

Ethics is available through the Corporate Governance link on the Investors page of the Company’s web site at the following address: www.rrd.com and a print copy is available upon request.

In 2021, the Board met 30 times. Each director of the Company during 2021 attended at least 75% of the total number of meetings of the Board and those committees of which the director was a member during the period he or she served as a director.

The Board has three standing committees. The members of those committees and the committees’ responsibilities are described below. Each committee operates under a written charter that is reviewed annually and is posted on the Company’s website at the following address: www.rrd.com. A print copy of each charter is available upon request.

The table below reflects the membership of the committees and their primary responsibilities.

The Board is actively involved in oversight of risks inherent in the operation of the Company’s businesses and the implementation of its strategic plan. The Board performs this oversight role by using several different levels of review. In connection with its reviews of the operations of the Company’s business units and corporate functions, the Board addresses the primary risks associated with those units and functions, including IT and cybersecurity risks. In addition, the Board reviews the key risks associated with the Company’s strategic plan annually and regularly throughout the year as part of its consideration of the strategic direction of the Company as well as reviewing the output of the Company’s risk management process each year.

The Board has delegated to the Audit Committee oversight of the Company’s risk management process. Among its duties, the Audit Committee reviews with management (a) Company policies with respect to risk assessment and management of risks that may be material to the Company, (b) the Company’s system of disclosure controls and system of internal controls

over financial reporting, and (c) the Company’s compliance with legal and regulatory requirements, provided that the Board overseas IT and cyber security risks.

Each of the other Board committees also oversees the management of Company risks that fall within such committee’s areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors, and each committee reports back to the full Board. The Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process, other financial matters, certain compliance issues and accounting and legal matters. The Audit Committee, along with the Corporate Responsibility & Governance Committee, is also responsible for reviewing certain major legislative and regulatory developments that could materially impact the Company’s contingent liabilities and risks. The Corporate Responsibility & Governance Committee also oversees risks related to the Company’s governance structure and processes, related person transactions, certain compliance issues and Board and committee structure to ensure appropriate oversight of risk. The HR Committee considers risks related to the attraction and retention of key management and employees and risks relating to the design of compensation programs and arrangements, the Company’s diversity strategy, and developmental and succession planning for possible successors to the position of chief executive officer and planning for other key senior management positions.

The Company’s non-management directors meet regularly in executive sessions without management. Executive sessions are led by the Chair of the Board. An executive session is held in conjunction with each regularly scheduled Board meeting. Each committee of the Board also meets in executive session without management in conjunction with each regularly scheduled committee meeting and such sessions are led by the committee Chair.

The Company’s Principles of Corporate Governance provide that the Board must be composed of a majority of independent directors. No director qualifies as independent unless the Board affirmatively determines that the director has no relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has determined that each of Ms. Esteves, Ms. Gianinno, Mr. McLevish, Ms. Moldafsky, Mr. Phipps, Mr. Pope and Mr. Ray are independent in accordance with NYSE requirements and SEC standards. The Board took into account all relevant facts and circumstances in making this determination.

This Compensation Discussion & Analysis (this “CD&A”) will describe the material components of the executive compensation program applicable to our named executive officers (our “NEOs”). While the discussion in the CD&A is focused on our NEOs, many of our executive compensation programs apply broadly across our executive ranks.

The table below sets forth the key decisions that impacted the compensation of our NEOs in 2021. These decisions were made by our HR Committee and were guided by our compensation philosophy, our actual performance, market pay practices and advice from the HR Committee’s independent compensation consultant.

In consideration of individual annual performance, skills, experience, and job responsibilities, each of our current NEOs received base salary increases in 2021.

Payouts under our AIP were based on achievement of our corporate financial target, which was $220.0 million for non-GAAP Adjusted Income from Operations.⁽¹ For financial reporting purposes, we achieved Adjusted Income from Operations of $256.3 million. Based on RRD’s performance against the corporate financial target, the AIP plan was funded at 128.0% of target. With the funding percentage as a baseline payout of each NEO’s target AIP payment (e.g., 128.0% of target AIP opportunity), the following AIP decisions were made. Mr. Knotts exceeded his individual performance goals, resulting in an AIP payout of 134%. For the other NEOs the baseline payout was slightly increased ~~$197.4 million,~~based upon their individual performance, resulting in AIP payouts ranging from 100% to 134% of their individual AIP target opportunity.

Equity grants made under our long-term incentive plan in 2021 continued to more closely align NEO compensation with the interests of our stockholders. 50% of the target value were granted as performance stock units (“PSUs”) and the remaining 50% were granted as restricted stock units (“RSUs”). The RSUs issued in March 2021 vest ratably over a three-year period while the PSUs have a three-year performance period which measures the Company’s performance against pre-determined non-GAAP Adjusted Cumulative Free Cash Flow. Due to grant limitations in our Performance Incentive Plan of 2017, only the executive officers received PSU and RSUs that settle in RRD stock. A portion of the executive officer awards were made with phantom PSUs and phantom RSUs that may be settled in RRD stock or ~~4.1%~~a cash payment equal to the stock price of units vesting. Except where a portion of this CD&A speaks specifically to stock-vesting RSUs and PSUs, all references to RSUs and PSU awards in this CD&A include and describe such phantom awards.

In 2021, we continued our practice of engaging with stockholders about various corporate governance topics including executive compensation. Telephonic meetings were held or offered with significant institutional investors to, among other things, gather additional feedback on our compensation programs. In general, the feedback received from stockholders during these meetings with regard to executive compensation was positive and RRD received 95.6% vote in support of its executive compensation programs in the 2020 Say-on-Pay advisory vote.

Based on our stockholder engagement feedback, as well as our Say-on-Pay advisory vote results, we believe our overall executive compensation program was well received by our stockholders as it is tailored to our business strategies, aligned with our pay for performance philosophy and designed to create long-term value for stockholders.

Our executive compensation program is designed to align the interests of our stockholders and executive officers while providing a total compensation package that enables us to attract talent, reward existing talent for past performance, retain talent, and motivate future performance. The HR Committee seeks to ensure that the compensation of our executive officers is tied to the achievement of both short-term and long-term performance objectives intended to drive stockholder value.

Our compensation philosophy and the resulting compensation programs incorporate the following best practices:

On an annual basis, the HR Committee directs its compensation consultant, Meridian Compensation Partners (“Meridian”), to ~~$4,963.7 million versus~~review the ~~same~~Company’s compensation peer group. Our 2021 peer group consists of the following 18 companies:

Based on the assessment of both our peer group and market data, the HR Committee determines whether the overall executive compensation program is consistent with our business strategy and objectives and promotes RRD’s compensation philosophy. In general, compensation levels for our NEOs are targeted at the 50^th percentile of target market and peer group data, but the HR Committee also takes into account the performance, experience, skills, level of responsibility and future potential of each NEO rather than adhering to a specific benchmarked percentage for any of our NEOs.

The table below sets forth the elements of our 2021 compensation program for our NEOs.

The compensation program for our NEOs is primarily focused on incentive compensation, putting a significant portion of total compensation at risk. Consistent with our philosophy of aligning the compensation of our executive officers with creating long-term value for our stockholders, heaviest weighting is on long-term incentive compensation.

The base salaries of our NEOs were reviewed in ~~2020. Net sales increased $50.0 million d~~February 2021, and certain increases in salary proposed by our CEO were approved by the HR Committee. In approving these adjustments, the HR Committee, with guidance from our compensation consultant, considered each NEO’s then-current base salary against the base salaries of executives in similar positions in our peer group, market data, and each NEO’s individual performance, experience, skills, levels of responsibility and future potential.

Consistent with our compensation philosophy, the HR Committee set the corporate financial targets under the AIP for 2021 with the goal of motivating our executive team to ~~favorable~~meet operational and financial targets to enhance long-term stockholder value. The targets, along with individual performance goals, were set by the HR Committee at the beginning of the year following the presentation of the annual operating budget. The corporate financial targets determine the funding level of the AIP. Corporate financial targets were lower in 2021 than in 2020 to account for lower anticipated Income from Operations on account of the unfavorable impact from foreign exchange rates on portions of our cost structure. However, after adjusting for the impact on changes in foreign exchange rates, the corporate financial targets were higher than in the prior year.

The corporate financial target under the AIP for 2021 was Adjusted Income from Operations. The minimum and maximum payout levels range from 0% to 200% of target, with no payout for performance below 70% of the corporate financial target. NEOs do not receive a payout for achievement of individual performance goals unless the threshold corporate financial target is achieved. Thereafter, individual performance goals can modify an NEO’s AIP payout upward or downward based on achievement of such goals.

Adjusted Income from Operations is a non-GAAP measure defined as Income from Operations adjusted for specified items including, for example, restructuring and impairment charges, business acquisitions and divestitures and the adoption of new accounting principles. The HR Committee believes the use of these non-GAAP adjustments for calculating the corporate financial target appropriately aligns AIP payouts with performance expectations under RRD’s annual operating budget. The initial performance levels were set by the HR Committee at the beginning of the year after thorough discussion with management regarding the Company’s past targets as well as its historic and forecasted performance, and were ~~unfavorably impacted by $6.5 million due~~challenging goals.

The table below sets forth a description of these targets, as well as 2021 achievement levels.

⁽¹⁾Our corporate financial performance target is based on a non-GAAP financial measure. Please see Appendix A for a reconciliation of GAAP to non-GAAP amounts.

In 2021, with guidance from our compensation consultant, the HR Committee considered each NEO’s then-current AIP Target against the AIP Targets of executives in similar positions in our peer group, market data, and each NEO’s individual performance, experience, skills, levels of responsibility and future potential. Based on this review, the HR Committee increased Mr. Pecaric’s AIP Target from 80% to 85%. AIP target percentages and actual 2021 payouts based on the performance described above are shown in the table below:

In 2021, 50% of the target value of our long-term incentive grants were PSUs and 50% were RSUs. Our PSUs were designed to more closely align the interests of our NEOs with our stockholders, while our RSUs were designed to promote retention of our key executives. The HR Committee determines long-term incentive awards to our NEOs based on a review of grants to executives in similar positions in RRD’s peer group, market data, and each NEO’s individual performance, experience, skills, level of responsibility and future potential. RSUs and PSUs are settled in shares.

To limit usage of shares available for grant under our Amended and Restated Performance Incentive Plan of 2017, the HR Committee again rationed equity awards in 2021. A portion of the awards of RSUs and PSUs in 2021 to NEOs were phantom awards (phantom RSUs and phantom PSUs) that may be settled in cash or shares in the HR Committee’s discretion. Such phantom awards were granted in the same proportion and with the same vesting terms as the RSU and PSU grants. Except as provided herein, all references to RSUs and PSU awards in this section include and describe such phantom awards. In 2021, approximately, 50% of all equity awards to RRD’s executive leadership team were phantom RSUs and PSUs that are expected to be settled in cash.

The PSUs have a three-year performance period which measures the Company’s performance against pre-determined cumulative free cash flow targets. Cumulative free cash flow is a non-GAAP metric defined as cash flow from continuing operations (excluding LSC bankruptcy payments, plus all investing cash flows (e.g., proceeds from facility sales, business dispositions and monetizing investments) less capital expenditures and certain other adjustments. We continue to use cumulative free cash flow as a metric because we believe it appropriately aligns our executive’s focus on improving our balance sheet flexibility with investing in our business to drive profitable growth. PSUs can pay out at a range from 0% to 150% of target with no shares earned for performance below 75% of target. The RSUs issued vest ratably over a three-year period.

PSUs granted in 2019 completed their three-year performance period in 2021. The Company achieved Adjusted Cumulative Free Cash Flow of 136.2% of target during the performance period, resulting in vesting of 150% of the target award amount.

In 2021, the HR Committee approved the following grants to our NEOs under our long-term incentive program:

The Company’s benefit programs were established based upon an assessment of competitive market factors and a determination of what was needed to retain high-caliber executives. For 2021, our primary benefits for executives included participation in broad-based plans at the same benefit levels as other employees. These plans included: savings plans, health and dental programs and various insurance programs, including disability and life insurance. In addition, certain executives, including certain of our NEOs, are provided with the following benefits:

Additionally, certain of our executives, including our NEOs, participated in the following retirement programs, which have been terminated or frozen as described below:

Each of our NEOs entered into an employment agreement with RRD in connection with the assumption of his or her position. In 2019, the Company entered into restated employment letters and change in control agreements with each of its executive officers, including each of the NEOs (other than Mr. Knotts). Each employment agreement sets forth, among other things, the NEO’s base salary, target annual bonus opportunity, entitlement to participate in the Company’s benefit plans, equity awards, certain perquisites and provisions with respect to certain payments and other benefits upon termination of employment under certain circumstances (such as an involuntary separation from service, as set forth in the respective employment agreement). Mr. Knotts is also entitled to enhanced benefits in the event he is terminated without “cause” or terminates employment for “good reason” in connection with a “change in control” (each as defined in the applicable employment agreement). Please see Potential Payments Upon a Termination or Change in Control in this Form 10-K/A for a description of the foregoing provisions.

The HR Committee establishes and monitors RRD’s overall compensation strategy to ensure that our executive compensation program supports our business objectives and specifically establishes the compensation of the CEO, other senior officers and key management employees.

The HR Committee, with the assistance of Meridian, works to analyze competitive market data to determine appropriate base salary levels, annual incentive target levels, and long-term incentive target levels for our executives. In conducting market comparisons, the HR Committee seeks to establish compensation levels that approximate the median of the applicable surveys and peer group. The CEO is not a member of the HR Committee and does not vote on matters concerning executive pay.

With respect to our CEO’s pay, the HR Committee conducts an annual performance assessment of the CEO and determines appropriate adjustments to all elements of his pay based on his individual performance and the Company’s performance.

For the other executive officers, the CEO makes recommendations to the ~~Chile business closure~~HR Committee for all elements of pay based on individual performance, market data from our peer group and published survey data. The HR Committee reviews, discusses, modifies, and approves, as appropriate, these recommendations.

The diagram below summarizes the HR Committee’s annual process for setting executive pay, which begins in ~~2020.~~ July and concludes the following February.

At each of its regularly scheduled meetings throughout the year, the HR Committee reviews the Company’s performance under outstanding annual and long-term incentive plans.

Compensation of executive officers was overseen by the HR Committee, which appointed and engaged Meridian as its executive compensation consultant to provide objective analysis, advice and recommendations on executive officer compensation and related matters in connection with the HR Committee’s decision-making process. Meridian, or Willis Towers Watson (“WTW”) until April 2021, attended all HR Committee meetings, and reported directly to the HR Committee, not to management, on matters relating to compensation for the executive officers.

WTW and Meridian provided additional services to RRD not under the direction of the HR Committee, whose services were pre-approved by the HR Committee. The HR Committee reviewed the work and services provided by WTW and Meridian and it determined that (a) such services were provided on an independent basis and (b) no conflicts of interest existed. Factors considered by the HR Committee in its assessment include:

Management, including the CEO and other executive officers, developed preliminary recommendations regarding compensation matters with respect to all executive officers other than the CEO, and provided these recommendations to the HR Committee. The HR Committee then reviewed management’s preliminary recommendations and made final compensation decisions, with advice from WTW, or, after the first half of 2021, Meridian, as appropriate. The management team was responsible for the administration of the compensation programs once the HR Committee’s decisions were finalized.

In ~~addition~~2021, the HR Committee, with the assistance of WTW, reviewed and evaluated our executive and employee compensation practices and concluded, based on this review, that any risks associated with such practices are not reasonably likely to have a material adverse effect on the Company. The determination primarily took into account the balance of cash and equity payouts, the balance of annual and long-term incentives, the type of performance metrics used, incentive plan payout leverage, possibility that the plan designs could be structured in ways that might encourage gamesmanship, avoidance of uncapped rewards, multi-year vesting for equity awards, use of stock ownership requirements for senior management and the HR Committee’s oversight of all executive compensation programs.

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) generally limits to $1 million annually the federal income tax deduction that that a publicly held corporation like RRD may claim for compensation payable to certain of its respective current and former executive officers. The HR Committee prioritize its primary goals of structuring compensation programs to attract, motivate and retain executives as well as ensuring that pay aligns with performance and is in the best interests of RRD and its stockholders. Accordingly, achieving these ~~factors, net sales increased due~~goals may have resulted (and may continue to ~~higher volume reflectingstrengthening demand~~result) in compensation that, in certain cases, is not deductible for ~~many~~federal income tax purposes.

The HR Committee has established stock ownership guidelines for all NEOs and certain other executives. Consistent with our compensation philosophy, these guidelines are designed to require the Company’s executives to have a meaningful equity ownership in RRD, and thereby link their interests with those of our ~~products~~stockholders. These stock ownership guidelines provide that within three years of hire or promotion, all of our NEOs, other than our CEO, must own and ~~services. Notably, higher demand for e-commerce~~retain Company capital stock having a fair market value of 3x their salary and that our CEO must own and retain Company stock having a fair market value of 5x his salary. In the event a NEO does not achieve or make progress toward the required stock ownership level, the HR Committee has the discretion to take appropriate action. As a result of the decline in the Company’s stock price over the past five years, Dan Knotts and Terry Peterson, but not the other NEOs, have achieved their required stock ownership level. No executive subject to stock ownership guidelines has attempted or requested to sell their capital stock.

The Board of Directors believes that hedging transactions that allow holders to own the Company’s securities without the full risks and rewards of ownership separate the holder’s interest from those of other stockholders. Accordingly, with respect to RRD securities, the Board adopted a policy forbidding directors, officers, and employees of the Company or its subsidiaries from pledging, holding in a “margin account” at a broker-dealer, short sales, ~~have contributed~~trading in publicly traded options, puts or calls, hedging or any similar transactions or arrangements.

The HR Committee of the Board of Directors of R. R. Donnelley & Sons Company, on behalf of the Board, establishes and monitors the Company’s overall compensation strategy to ensure that executive compensation supports the~~growth~~ business objectives. In fulfilling its oversight responsibilities, the HR Committee reviewed and discussed with management the Compensation Discussion & Analysis set forth in ~~our Packaging~~this Amendment No. 1 on Form 10-K/A.

In reliance on the review and ~~Labels products and higher demand for books and cards have contributed~~discussions referred to above, the HR Committee recommended to the ~~growth of our Commercial Print and Packaging products~~. ~~The increase also reflects continued recovery from~~Board that the ~~COVID-19 pandemic, partially offset by the Census project, which was fully completed~~Compensation Discussion & Analysis be incorporated in the ~~third quarter of 2020. Higher prices from our efforts to recover inflationary cost increases also contributed to~~Annual Report on Form 10-K for the ~~net sales increase.~~

~~Cost of sales increased $205.7 million, or 5.4%, for the~~fiscal year ended December 31, 2021, ~~versus the same period in 2020, primarily due to higher volume and higher cost~~as amended.

The HR Committee of ~~raw materials. As a percentage of net sales, cost of sales increased slightly for the twelve months ended~~ ~~December 31, 2021~~ ~~versus the same period in~~ ~~2020~~.R. R. Donnelley & Sons Company

~~Gross profit decreased $8.3 million to $968.8 million for the year ended December 31, 2021 versus the same period in 2020. Gross margin decreased from 20.5% to 19.5%~~ ~~for the twelve months ended~~ ~~December 31, 2021~~ ~~versus the same period in~~ ~~2020, primarily reflecting the impact of unfavorable foreign exchange rates on expenses and rising costs of raw materials.~~

~~Selling, general and administrative expenses increased $3.1 million to $600.6 million for the year ended December 31, 2021 versus the same period in 2020,~~primarily as a result of higher volume, higher incentive compensation expense, partially due to the merger and the impact of a higher stock price on certain cash-settled incentive awards, and the impact of unfavorable exchange rates on expenses, partially offset by cost control initiatives. ~~As a percentage of net sales, selling, general and administrative expenses decreased from 12.5% in the prior year to 12.1% in 2021.~~Irene M. Esteves, Chair

~~For the year ended December 31, 2021, net restructuring, impairment and other charges decreased $66.7 million to $33.3 million versus the year ended December 31, 2020.~~ Susan M. Gianinno

The decrease was primarily driven by lower restructuring activity, gains on sale of several facilities, including the Chile facility, which was sold in the fourth quarter of 2021, and lower expenses related to LSC MEPP liabilities.

~~Depreciation and amortization decreased $15.2 million to $130.5 million for the year ended December 31, 2021 versus the same period in 2020,~~ ~~primarily due to lower capital spending in recent years compared to historical levels~~. Depreciation and amortization included $18.9 million and $19.3 million of amortization of other intangible assets related to client relationships, trade names, trademarks, licenses and agreements for the twelve months ended December 31, 2021 and 2020, respectively.

~~Other operating expense for the year ended December 31,~~ ~~2021~~ ~~was $40.9 million compared to $25.8 million for the same period in~~ ~~2020~~. ~~Other operating expenses in~~ ~~2021~~ ~~primarily included expenses related to the ongoing SEC and DOJ investigations, as well as a $12.0 million merger agreement break fee paid to~~ ~~Atlas River Parent Inc. (“Atlas”) and other professional fees related to the planned merger. The prior year included expenses related to the ongoing SEC and DOJ investigations, as well as a $2.9 million loss on a business disposition.~~

~~Income from operations for the year ended December 31, 2021 increased $55.4 million from 2020 to $163.5 million as a result of the factors discussed above.~~

~~Net interest expense decreased by $7.5 million to $127.6 million for the year ended December 31, 2021 versus the same period in 2020.~~Net interest expense included $9.2 million related to the termination of certain interest rate swaps in the second quarter of 2021. Excluding the effects of the swap termination, our interest expense decreased approximately $16.7 million, primarily due to prior repurchases and repayment of higher interest rate debt and lower average borrowings and interest rates on the ABL Credit Facility.

~~Investment and other income, net for the years ended December 31, 2021 and 2020 was $19.9 million~~ ~~and $14.1 million, respectively, and is principally comprised of net pension and OPEB income~~.

~~Loss on debt extinguishment for the year ended December 31, 2021 was $7.1 million primarily~~ ~~due to costs related to the partial repayment of the Term Loan in the second quarter of 2021. Loss on debt extinguishment for the year ended December 31, 2020 was $3.0 million. See Note 11,~~ ~~Debt, to the Consolidated Financial Statements for further discussion.~~

For 2021, we continue to report the tax impact of limitations on our interest expense deduction. Non-deductible interest expense will be carried forward as a deferred tax asset; however, it is more likely than not that the benefit of the deferred tax asset will not be fully realized and a full valuation allowance was recorded. Also included in 2021 is the tax impact of non-deductible compensation.

Included in 2020 is the impact from the surrender of corporate owned life insurance policies as well as tax benefits from additional interest expense deductions as result of the CARES Act and additional tax guidance issued in 2020.

~~Net income from discontinued operations was $0.6 million for the twelve months ended~~ ~~December 31, 2021~~ ~~compared to $124.9 million for the twelve months ended~~ ~~December 31, 2020~~. ~~The net income from discontinued operations for the~~ ~~twelve months ended~~ ~~December 31, 2021~~ reflects the settlement of certain contingencies associated with the business divestitures and final net working capital adjustments. Net income from discontinued operations in 2020 includes an after-tax net gain of $127.4 million (tax of $10.6 million) recorded on the sale of three Logistics businesses sold during 2020, partially offset by a $20.6 million non-cash charge related to impairment of goodwill recorded in the first quarter of 2020.Executive Compensation

The Summary Compensation Table provides compensation information about our principal executive officer, principal financial officer, and the ~~year ended~~three most highly compensated executive officers other than the principal executive officer and principal financial officer as of December 31, ~~2021 was $3.7 million compared to $98.5 million for the year ended December 31, 2020.~~

~~Net sales for the Business Services segment for the year ended December 31, 2021 were $3,909.5 million, an increase of $224.3 million, or 6.1%, compared to 2020.~~ Net sales increased $50.0 million due to favorable changes in foreign exchange rates and were unfavorably impacted by $6.5 million due to the Chile business closure in 2020. Net sales also increased due to higher volume and higher prices reflecting~~strengthening demand for many of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in our Packaging and Labels products and higher demand for books and cards have contributed to the growth of our Commercial Print products~~. The increase also reflects continued recovery from the COVID-19 pandemic, partially offset by one-time pandemic related orders in 2020, primarily within our Supply chain management offerings and continued low demand of Statement printing partially resulting from secular decline accelerated by the COVID-19 pandemic. ~~The following table summarizes net sales by products and services in the Business Services segment:~~2021.

~~Business Services segment income from operations increased $64.5 million to $292.4 million for the year ended December 31, 2021 compared to the same period in 2020,~~ primarily due to increased volume, increased prices, cost reductions and lower restructuring, impairment and other expenses, partially offset by the impact of unfavorable foreign exchange rates on expenses of $29.5 million and inflation.

The following table shows additional information regarding: (i) the threshold, target and maximum level of annual cash incentive awards for our NEOs for performance during 2021 under our AIP; and (ii) RSUs and PSUs (including phantom awards) granted in March 2021 that were awarded to help focus their attention on building stockholder value.

The following table shows certain information about unexercised options and unvested stock awards at December 31, 2021. All amounts below have been adjusted to give effect to the 1-for-3 reverse stock split that was effective October 1, 2016.

The following table shows information regarding the value of options exercised and RSUs and PSUs that vested during 2021.

To mitigate the potential impact of Sections 280G and 4999 of the Code on RRD and its applicable executive officers, effective December 17, 2021, the Board approved the acceleration into December 2021 of the vesting and payment of certain equity awards, equity-based awards and cash-based awards, as applicable, that otherwise would have been payable to Mr. Knotts, Mr. Pecaric, Mr. Peterson, Mr. Sharp and Ms. Steiner on or prior to the closing of the Merger, as described further under Part III, Item 12, “Change in Control.”. These actions are intended to preserve compensation-related corporate income tax deductions for RRD that might otherwise be disallowed through the operation of Section 280G of the Code and to mitigate or eliminate the amount of excise tax that may be payable by the Executives pursuant to Section 4999 of the Code in connection with Section 280G of the Code in certain circumstances. In approving the accelerated vesting and payment of such awards, the Board considered, among other things, the projected value of the corporate income tax deductions that might otherwise be lost as a result of the effect of Section 280G of the Code and the benefits to RRD of reducing the potential tax burden on the affected NEOs.

Accelerated vesting and payments took one or more of the following forms, to the extent applicable to each affected NEO (i) accelerated vesting and settlement in shares of RRD Common Stock of certain RRD RSUs that would otherwise have vested in 2022, 2023 or 2024, as applicable (“Accelerated RSUs”); (ii) accelerated vesting and settlement in shares of RRD Common Stock of certain non-phantom RRD PSUs granted in 2019, 2020 and 2021, assuming vesting at 150%, 150% and 100% performance levels, respectively (“Accelerated PSUs”); (iii) accelerated vesting and payout of RRD Phantom RSUs in cash that would otherwise have vested in 2022, 2023 and 2024 (“Accelerated Phantom RSUs”); and (iv) accelerated vesting and payout in cash of phantom RRD PSUs granted in 2019 and 2020, in each case assuming vesting at 150% performance levels, respectively (“Accelerated Phantom PSUs”). The Accelerated RSUs, Accelerated PSUs, Accelerated Phantom RSUs and Accelerated Phantom PSUs (collectively, the “Accelerated Amounts”) will offset the corresponding payments or amounts each Executive would have otherwise been entitled to receive upon the consummation of the Merger, precluding duplication of payments. All Accelerated Amounts will be reduced by applicable tax withholdings.

In connection with the accelerated equity and equity-based award vesting and payment described above, each affected NEO has signed an Acceleration and Clawback Acknowledgement. Each Acceleration and Clawback Acknowledgement provides that the Executive’s accelerated payments are subject to certain repayment and true-up conditions. Specifically, if an affected NEO voluntarily terminates their employment with RRD or their employment is terminated for “cause” (as defined in the Knotts Employment Agreement or the affected NEO’s Change in Control Agreement, as applicable) prior to the closing of the Merger, or, if earlier, prior to the date on which the applicable payment would have been made but for the payment of the Accelerated Amounts, and such termination otherwise would result in forfeiture of any portion of the Accelerated RSUs, Accelerated Phantom RSUs, Accelerated PSUs or Accelerated Phantom PSUs that constitute Accelerated Amounts, as applicable, then the Executive is required to repay to RRD the applicable number of shares of RRD Common Stock underlying Accelerated RSUs and Accelerated PSUs in connection with the Accelerated Amounts and the applicable cash amount underlying the Accelerated Phantom RSUs and Accelerated Phantom PSUs, in each case that constitute Accelerated Amounts, as applicable, received by the Executive on a net after-tax basis.

Generally, effective December 31, 2011, the Company froze benefit accruals under all of its then-existing Federal income tax qualified U.S. defined benefit pension plans (collectively referred to as the Qualified Retirement Plans) that were still open to accruals. Therefore, beginning January 1, 2012, participants generally ceased earning additional benefits under the Qualified Retirement Plans. Thereafter, the Qualified Retirement Plans were merged into one Qualified Retirement Plan and generally no new participants will enter this plan. Before the Qualified Retirement Plans were frozen, accrual rates varied based on age and service. Accruals for the plans were calculated using compensation that generally included salary and annual cash bonus awards. The Qualified Retirement Plan is funded entirely by the Company with contributions made to a trust fund from which the benefits of participants are paid.

The amount of annual earnings that may be considered in calculating benefits under a Federal income tax qualified pension plan is limited by law. The U.S. Internal Revenue Code also places other limitations on pensions that can accrue under tax qualified plans. Prior to being frozen, to the extent an employee’s pension would have accrued under one of the Qualified Retirement Plans if it were not for such limitations, the additional benefits were accrued under an unfunded supplemental pension plan (referred to as the “SERP”). On December 31, 2021, approximately 153 individuals were covered by the SERP as active employees or terminated employees with vested benefits who did not receive payments in 2021, and in 2021 approximately 159 individuals received payments from the SERP. Prior to a change in control of the Company, the SERP is unfunded and provides for payments to be made out of the Company’s general assets. Because the Company froze the Qualified Retirement Plans as of December 31, 2011, generally no additional benefits will accrue under the Qualified Retirement Plan or the related SERP.

Some participants in the Qualified Retirement Plan, including those that have a cash balance or pension equity benefit, can elect to receive either a life annuity or a lump sum amount upon termination. Other participants will receive their Qualified Retirement Plan benefit in the form of a life annuity. Under a life annuity benefit, benefits are paid monthly after retirement for the life of the participant or, if the participant is married or chooses an optional benefit form, generally in a reduced amount for the lives of the participant and spouse or other named beneficiary.

Mr. Peterson, Mr. Sharp and Ms. Steiner were hired after the Qualified Retirement Plan was frozen and thus they are not participants in the Qualified Retirement Plan or the SERP. For Mr. Knotts and Mr. Pecaric, the table below shows the present value of their accumulated benefit under the Qualified Retirement Plan and the SERP as of December 31, 2021.

See Note 9 to the Consolidated Financial Statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2021 for a discussion of the relevant assumptions used in calculating the present value of the current accrued benefit with respect to each NEO under the Qualified Retirement Plan and the SERP set forth in the table below.

The Company entered into an employment agreement with Mr. Knotts in 2016 (the “Knotts Employment Agreement”) in connection with his appointment as President and CEO. The agreement provides for severance in the event Mr. Knott’s employment is terminated by the Company without “Cause” or by Mr. Knotts for “Good Reason” (in each case, as defined in Mr. Knott’s agreement).

All of our NEOs (other than Mr. Knotts) entered into restated employment letters with the Company in 2019 entitling them to receive severance under the terms of the Company’s Senior Leadership Separation Pay Plan (“SLSPP”). For each NEO other than Mr. Knotts, the SLSPP provides for payments of certain benefits, as described below, upon termination of employment.

The purpose of the SLSPP is to provide certain severance benefits to key employees of the Company, including the NEOs, other than Mr. Knotts. Under the SLSPP, if an eligible employee is terminated without cause or if an eligible employee resigns for good reason (in each case, as defined in the SLSPP), each a “Qualifying Termination,” then, the eligible employee is eligible to receive the following benefits:

In addition, the executive officer must execute and comply with a separation agreement, which, among other things, will include restrictive covenants, such as an 18-month post-termination noncompete, an 18-month post termination customer non-solicit, a 24-month post-termination employee non-solicit and a perpetual confidentiality clause.

The benefits to be provided to each NEO in each of those situations are described in the tables below, which assume that the termination took place on December 31, 2021.

As previously disclosed, on December 17, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Chatham Delta Parent, Inc., a Delaware corporation (“Parent”), and Chatham Delta Acquisition Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent (“Acquisition Sub”), providing for the merger of Acquisition Sub with and into the Company pursuant to the General Corporation Law of the State of Delaware (the “DGCL”), upon the terms and subject to the conditions set forth in the Merger Agreement (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent and Acquisition Sub are affiliates of Chatham Asset Management, LLC (“CAM”). Information regarding payments in connection with the Merger, which constitutes a Change in Control, is set forth in the table below under the heading “Resignation for Good Reason or Termination without Cause after a Change in Control.”

The Knotts Employment Agreement provides for severance benefits in the event Mr. Knott’s employment is terminated by the Company without “Cause” or by Mr. Knotts for “Good Reason” (in each case, as defined in the Knotts Employment Agreement) following a Change in Control (as defined in the Knotts Employment Agreement). Mr. Knotts is not entitled to tax gross-ups upon a termination after a Change in Control (as defined in his employment agreement). The Knotts Employment Agreement provides that, if an excise tax is triggered, his Change in Control payments will be reduced below the threshold triggering the excise tax if the net, after-tax benefit to Mr. Knotts is higher.

Each NEO, other than Mr. Knotts, is a party to a Change in Control Agreement, which provides for enhanced severance upon a qualifying termination in connection with a change in control (as defined in the change in control agreements). Specifically, in the event of a termination by the Company for reasons other than cause or on account of the executive officer’s death, or if the executive officer resigns for good reason (in each case, as defined in the Change in Control Agreement) during the 24-month period following the date of a change in control, the executive officer is eligible to receive:

Potential Payment Obligations Under Employment Agreements upon Termination of Employment

The following tables set forth our payment obligations under Mr. Knott’s employment agreement and each other NEO’s rights under the SLSPP upon a termination of the employment of our NEOs. The tables do not include payments or benefits that do not discriminate in scope, terms or operation in favor of the NEOs and are generally available to all salaried employees, or pension payments that are discussed in the Pension Benefits section in this Form 10-K/A.

Unless otherwise noted, the descriptions of the payments below are applicable to all of the tables relating to potential payments upon termination or termination after a change in control.

Disability or Death—To the extent that a NEO participates in our pension plan, such NEO could be entitled to pension benefits upon death or disability according to the terms of the pension plan. The employment agreements provide that in the event of disability or death, in addition to payments under the Company’s disability benefits plan or life insurance program, as applicable, and each as available to all salaried employees, each NEO is entitled to benefits paid under a supplemental disability insurance policy or supplemental life insurance policy, as applicable, maintained by the Company for the NEO’s benefit. Pursuant to the terms of the Company’s AIP, each NEO is also entitled to his or her pro-rated annual bonus for the year in which the disability or death occurs, payable at the same time as and to the extent that all other annual bonuses are paid and as available to all salaried employees.

Additionally, all unvested equity awards held by each NEO will immediately vest upon disability or death pursuant to the terms of the applicable award agreements.

Equity Acceleration—Pursuant to the terms of the SLSPP, equity awards for all NEOs other than Mr. Knotts are treated in accordance with the underlying equity award agreements. All agreements for awards through 2018 specify that all equity awards are forfeited in the event of termination by the Company for any reason (other than death, disability or following a change of control) or in the event of the resignation of the NEO. Agreements for awards made after 2018 specify that the NEOs will receive a pro rata portion of their award in the event of a retirement or if the NEO is terminated by the Company without Cause or for Good Reason. In all other cases (other than death, disability or following a change of control), the awards will be forfeited. With respect to Mr. Knotts, all outstanding equity awards will vest in the event Mr. Knotts employment is terminated by the Company without Cause or if Mr. Knotts resigns for Good Reason. All NEOs, including Mr. Knotts, are generally entitled to immediate vesting of all outstanding equity awards upon termination following a change of control (as defined in the applicable performance incentive plan) under the terms of such performance incentive plan.

Value of accelerated RSUs is the fair market value on the date of termination. Value of accelerated PSUs is the fair market value on the date of termination. For purposes of the tables, fair market value is the closing price on December 31, 2021 (the last trading day of the fiscal year) of $11.26 and, based upon the terms of the Merger Agreement, $10.85 for resignations or terminations without Cause after a Change in Control.

Health Care Benefits—The SLSPP provides that, after resignation for good reason or termination without cause, the Company will continue providing medical (including the executive officer physical program), dental, and vision coverage to the NEO that the NEO was eligible to receive immediately prior to such termination for a period of time under COBRA subsidized by the Company at active employee rates. For Mr. Knotts, this period is 24 months after such resignation or termination before a Change in Control, and the last day of the second calendar year following the calendar year in which such termination occurs after a Change in Control. For Mr. Peterson, Mr. Pecaric, Mr. Ryan and Ms. Steiner this period is 18 months after such resignation or termination. In the event of resignation other than for good reason or termination with Cause, the NEO is entitled to the same benefits as all other employees would be entitled to after termination. Benefits payable upon disability or death are described above in “Disability or Death.”

280G Tax Treatment—Upon a change in control (as defined in Section 4999) of the Company, an NEO may be subject to certain excise taxes under Section 4999 of the Internal Revenue Code with respect to payments that are treated as excess

parachute payments under Section 280G. With respect to Mr. Knotts, the Company will reduce the amount of the payments the NEO would otherwise be entitled to receive to below the threshold triggering the excise taxes under Section 4999, provided that the net, after-tax benefit to the NEO is higher.

Mr. Knotts, the Company’s President and Chief Executive Officer, would be entitled to the following:

Mr. Peterson, the Company’s Executive Vice President and Chief Financial Officer, would be entitled to the following:

Mr. Pecaric, the Company’s President, RRD Business Services, would be entitled to the following:

Mr. Ryan, the Company’s former President, RRD Marketing Solutions, received $1,485,000, representing 1.5x the sum of his base salary and target annual bonus if all targets and objectives had been met, paid over the applicable severance period in connection with the termination of his employment. Mr. Ryan is also entitled to a pro-rated AIP payment of $234,538 in connection with his termination of employment, which is payable in 2022. He is also entitled to the following continuing benefits and perquisites: (1) Post-Termination Health Care ($34,121), Supplemental Life Insurance ($10,493), Supplemental Disability Insurance ($14,561) ,and Financial Planning ($18,000). Mr. Ryan also received pro-rated vesting of his restricted stock units valued at $402,635 at the time of vesting. Mr. Ryan’s performance stock units were pro-rated over their performance periods through his termination date but were not vested or paid in 2021. Mr. Ryan’s PSUs (73,460 shares) will vest under the terms of the Merger Agreement with a 150% performance factor for a total payout of $1,195,562.

Mr. Sharp, the Company’s Executive Vice President and Chief Accounting Officer, would be entitled to the following:

Ms. Steiner, the Company’s Executive Vice President and General Counsel, would be entitled to the following:

Pursuant to the Company’s director compensation program, each non-employee director receives an annual cash retainer of $105,000 and an annual equity retainer of RSUs with a fair market value of $140,000. In addition, each director will also receive, as applicable, the following additional cash and equity retainers:

•$20,000, for serving as Chair of the Corporate Responsibility & Governance Committee

Director RSUs cliff vest on the first anniversary of grant. In the event of termination of service on the Board prior to a vesting date, all RSUs will vest. Dividend equivalents on the awards are deferred (credited with interest quarterly at the same rate as five-year U.S. government bonds) and paid out in cash with the corresponding RSU.

Fair market value is defined as the closing price of the Company’s stock on the date of grant.

With the assistance of the its compensation consultant, the foregoing compensation program is reviewed annually by the Company’s HR Committee, taking into account the compensation and practices of the Company’s peer group. Based on this review, no changes were made to the director compensation program in 2021 from the prior year.

The Board has established stock ownership guidelines for all non-employee directors. These guidelines are designed to encourage the Board to have a meaningful equity ownership in the Company, thereby linking their interests with those of our stockholders. Pursuant to the stock ownership guideline, which was updated at the Human Resources Committee meeting in July 2021, each non-employee director is expected to own and retain 5x their annual cash retainer in shares of capital stock or equivalents in the Company within five years from the annual meeting at which he or she is elected to the Board. For those non-employee directors who do not meet the guideline, it is expected that progress will be made towards the goal on an annual basis. The HR Committee monitors compliance with the guidelines and conducts a formal review on an annual basis.

Directors who are our employees receive no additional fee for service as a director. Non-employee directors receive compensation as described above.

(2)

The amounts shown in this column constitute restricted stock units granted under the Company’s 2017 PIP awarded as payment of non-employee director annual equity retainers and the equity award for serving as Chair of the Board or a Chair of committees calculated as set forth above. The grant date fair value with respect to the restricted stock units is determined in accordance with ASC Topic 718. See Note 10~~, Income Taxes,~~15 to the Consolidated Financial Statements ~~for further discussion). We expect to be able to meet these obligations using our cash flow from operations, cash balances, and availability under our ABL Credit Facility.~~

Cash and cash equivalents were $280.2 million as of December 31, 2021, a decrease of $8.6 million compared to December 31, 2020. Included in Cash and cash equivalents at December 31, 2021 were $1.9 million of short-term investments, which primarily consisted of short-term deposits and money market funds. These investments are held at institutions with sound credit ratings and are highly liquid.

~~Liquidity~~

~~Our cash balances are held in numerous locations throughout the world, including substantial amounts held outside of the United States. Cash and cash equivalents as of December 31, 2021~~ included $14.1 million in the U.S. and $266.1 million at international locations. We maintain cash pooling structures that enable participating international locations to draw on our international cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce our short-term borrowing costs or for other purposes. ~~During the year ended December 31,~~ ~~2021, we transferred approximately $64 million of cash held in international jurisdictions to the U.S. which was used to reduce debt outstanding. In future years~~ ~~we have further opportunities to repatriate foreign cash, primarily generated from current year earnings, in a tax efficient manner.~~

As of December 31, 2021, we were in compliance with the covenants under our debt agreements and expect to remain in compliance based on our estimates of operating and financial results for 2022 and the foreseeable future. As of December 31, 2021, we met all the conditions required to borrow under the ABL Credit Agreement and we expect to continue to meet the borrowing conditions.

~~As of December 31, 2021, we had $32.0 million of outstanding borrowings and $67.3 million of letters of credit issued under the ABL Credit Facility.~~ ~~Based on the Borrowing Base as of December 31,~~ ~~2021~~ ~~and outstanding letters of credit, we had $550.7 million of borrowing capacity available under the ABL Credit Facility.~~ We also had $143.4 million in other uncommitted credit facilities, primarily outside the U.S., of which we had $111.9 million in outstanding letters of credit, bank guarantees and bank acceptance drafts.

~~The current availability under the ABL Credit Facility as of December 31, 2021 is shown in the table below:~~

December 31, 2021

Availability

(in millions)

ABL Credit Facility

$
650.0

Usage

Borrowings under the ABL Credit Facility

$
32.0

Outstanding letters of credit

67.3

$
99.3

Current availability at December 31, 2021

$
550.7

Cash and cash equivalents

280.2

Total available liquidity^(a)

$
830.9

~~(a)~~

~~Total available liquidity does not include credit facilities of non-U.S. subsidiaries, which are uncommitted facilities.~~

On April 16, 2021, we amended the ABL Credit Facility to, among other things, extend the maturity date from September 29, 2022 to April 16, 2026 and reduce the aggregate commitments from $800 million to $650 million.

The failure of a financial institution supporting the ABL Credit Facility would reduce the amount of underlying commitments unless a replacement institution was added. Currently, the ABL Credit Facility is supported by eight U.S. financial institutions.

On November 4, 2021, Moody’s Investors Service, Inc. (“Moody’s) placed our credit ratings under review for potential downgrade in connection with the initial announcement of a merger transaction. Our credit ratings from Moody’s and S&P Global Ratings (“S&P”) as of ~~December 31, 2021~~ ~~are shown in the table below~~:

	~~S&P~~	~~Moody's~~
~~Long-term corporate credit rating~~	~~B (stable)~~	~~B2 (under review)~~
~~Senior unsecured debt~~	B-	B3
~~Term Loan~~	B+	B1

At the request of Chatham, we amended our Term Loan Credit Agreement on February 7, 2022. The Term Loan Credit Agreement amendment provides, among other things, to permit the Chatham merger transaction, refinance $150 million of the existing term loans, provide for a tranche of $600 million of new incremental term loans, extend the maturity date of all the term loans to November 1, 2026 and change the reference rate to be based on the secured overnight financing rate (SOFR). Jefferies will also be appointed as the administrative agent under the Term Loan Credit Agreement and certain covenants and other provisions will be modified. The effectiveness of the term loan amendment is conditioned upon the consummation of the Chatham merger transaction.

Also at the request of Chatham, we amended our existing ABL Credit Agreement in February 2022. Upon the effectiveness of the amendment, the ABL Credit Agreement will be amended to, among other things, permit the Chatham merger transaction and change the reference rate for U.S. Dollar borrowings to SOFR, for Sterling borrowings to SONIA and for Yen borrowings to TIBOR. Wells Fargo will also be appointed as the administrative agent under the ABL Credit Agreement and certain negative covenants will be modified to permit the Chatham merger transaction. The effectiveness of the ABL amendment is conditioned upon the consummation of the Chatham merger transaction.

~~Critical Accounting Policies and Estimates~~

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our most critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations, and which require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We have identified the following as our most critical accounting policies and judgments. Although we believe that our estimates and assumptions are reasonable, they are based upon information available when they are made, and therefore, actual results may differ from these estimates under different assumptions or conditions.

~~Revenue Recognition~~

~~All revenue recognized in the Consolidated Statements of Operations is considered to be revenue from contracts with clients.~~

Our products revenue is primarily recognized at a point in time. We generally recognize revenue for products upon the transfer of control of the products to the client which typically occurs upon transfer of title and risk of ownership, which is generally upon shipment to the client. For certain products, w~~e are able to recognize revenue for completed inventory billed but not yet shipped at the client’s direction.~~

Our services revenue is recognized both at a point in time as well as over time. Our business process outsourcing and digital and creative solutions revenue is recognized over time or at a point in time, depending on the nature of the service which could be either recurring or project-based.

~~Goodwill and Other Long-Lived Assets~~

Our methodology for allocating the purchase price of acquisitions is based on established valuation techniques, and when appropriate, includes valuations performed by management or third-party appraisers. Based on our current organization structure, we have identified 14 reporting units for which cash flows are determinable and to which goodwill may be allocated. Goodwill is either assigned to a specific reporting unit or allocated between reporting units based on the relative excess fair value of each reporting unit.

We perform our goodwill impairment tests annually as of October 31 or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value, indicating a possible impairment may exist.

As of October 31, 2021, seven reporting units had goodwill. The commercial print, digital print and fulfillment, forms, content and creative services, business process outsourcing, Latin America and Canada reporting units had no goodwill as of October 31, 2021. In the impairment test for goodwill, the estimated fair value of each reporting unit is compared to its carrying value, including goodwill. If the carrying value of a reporting unit exceeds the estimated fair value, an impairment loss is recognized equal to the excess, limited to the total amount of goodwill allocated to that reporting unit.

~~Qualitative Assessment for Impairment~~

For all of our reporting units with goodwill, in 2021, we performed a qualitative assessment to determine whether it was more likely than not that the fair value of the reporting unit was less than its carrying value. In performing this analysis, we considered various factors, including the effect of market or industry changes and the reporting unit’s actual results compared to projected results. In addition, we considered how other key assumptions used in the prior annual goodwill impairment test could be impacted by changes in market conditions and economic events, including the impact of COVID-19.

As part of the qualitative review of impairment, we analyzed the potential change in fair value of the reporting units based on their operating results for the ten months ended October 31, 2021 compared to expected results. Based on our qualitative assessment, we concluded that as of October 31, 2021, it was more likely than not that the fair value of each of the reporting units was greater than its carrying value.

~~Other Long-Lived Assets~~

We evaluate the recoverability of other long-lived assets, including property, plant and equipment and certain identifiable intangible assets, whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Factors which could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for the overall business, a significant decrease in the market value of the assets or significant negative industry or economic trends. When we determine that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the indicators, the assets are assessed for impairment based on the estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the carrying value of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying value over its fair value.

~~Pension and OPEB Plans~~

~~We record an~~nual income and expense amounts and our year-end obligations relating to our pension and OPEB plans based on calculations which include various actuarial methods and assumptions, including discount rates, mortality, utilization rates of retiree health care accounts, and healthcare cost trend rates, among others. We review our actuarial assumptions on an annual basis as of December 31 (or more frequently if a significant event requiring re-measurement occurs) and makes modification to the assumptions based on current rates and trends when it deems it appropriate to do so. The effect of modifications of actuarial assumptions on the value of the pension and OPEB obligations is recognized within other comprehensive income (loss) and amortized into earnings over future periods. We believe that the assumptions utilized in recording our obligations under our plans are reasonable based on our experience, market conditions and input from our actuaries and investment advisors. The discount rates for pension benefits at December 31, 2021 and 2020 were 2.7% and 2.4%, respectively. The discount rates for OPEB plans were 2.7% and 2.2% at December 31, 2021 and 2020, respectively.

We use the full yield curve approach in the estimation of the interest components of net pension and OPEB plan expense (income) by applying the specific spot rates along the yield curve used in the determination of the projected benefit obligation to the relevant projected cash flows.

~~A one-percentage point change in the discount rates at December 31, 2021 would have the following effects on the accumulated benefit obligation and projected benefit obligation:~~

~~Pension Plans~~

1.0%
Increase

1.0%
Decrease

(in millions)

Accumulated benefit obligation
$
(133.6
)

$
161.7

Projected benefit obligation

(134.7
)

162.9

~~OPEB~~

1.0%
Increase

1.0%
Decrease

(in millions)

Accumulated benefit obligation
$
(16.8
)

$
18.8

The majority of our pension plans are frozen and we have transitioned to a risk management approach for our U.S. pension plan assets. The overall investment objective of this approach is to further reduce the risk of significant decreases in the plan’s funded status by allocating a larger portion of the plan’s assets to investments expected to hedge the impact of interest rate risks on the plan’s obligation. Over time, the target asset allocation percentage for the pension plan is expected to decrease for equity and other “return seeking” investments and increase for fixed income and other “hedging” investments. The assumed long-term rate of return for plan assets, which is determined annually, is likely to decrease as the asset allocation shifts over time.

The expected long-term rate of return for plan assets is based upon many factors including expected asset allocations, historical asset returns, current and expected future market conditions and risk. In addition, we considered the impact of the current interest rate environment on the expected long-term rate of return for certain asset classes, particularly fixed income. The target asset allocation percentage for the primary U.S. pension plan was approximately 15.0% for return seeking investments and approximately 85.0% for hedging investments. The expected long-term rate of return on plan assets assumption used to calculate net pension and OPEB plan expense in 2021 was 5.00% and 5.75% for major U.S. pension and OPEB plans, respectively. The expected long-term rates of return on plan assets assumption that will be used to calculate net pension and OPEB plan expense (income) in 2022 are 3.75% and 5.25% for our major U.S. pension and OPEB plans, respectively.

~~A 0.25% change in the expected long-term rate of return on plan assets at December 31, 2021 would have the following effects on 2022 pension and OPEB plan (income)/expense:~~

0.25%
Increase

0.25%
Decrease

(in millions)

U.S. pension plans
$
(1.4
)

$
1.4

OPEB

(0.5
)

0.5

We also maintain several pension plans in international locations. The expected returns on plan assets and discount rates for those plans are determined based on each plan’s investment approach, local interest rates and plan participant profiles.

~~Accounting for Income Taxes~~

Significant judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities and any valuation allowances recorded against deferred tax assets. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, our tax returns are subject to audit by various U.S. and foreign tax authorities. We recognize a tax position in our ~~financial statements when it is more likely than not (i.e~~., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. This recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Although we believe that our estimates are reasonable, the final outcome of uncertain tax positions may be materially different from that which is reflected in our historical financial statements.

We have recorded deferred tax assets related to future deductible items, including domestic and foreign tax loss and credit carryforwards. We evaluate these deferred tax assets by tax jurisdiction. The utilization of these tax assets is limited by the amount of taxable income expected to be generated within the allowable carryforward period and other factors. Accordingly, we have recorded a valuation allowance to reduce certain of these deferred tax assets when we have concluded that, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be fully realized. If actual results differ from these estimates, or the estimates are adjusted in future periods, adjustments to the valuation allowance might need to be recorded. As of December 31, 2021 and 2020, valuation allowances of $200.7 million and $195.7 million, respectively, were recorded in our Consolidated Balance Sheet.

Deferred U.S. income taxes and foreign taxes have historically not been provided on the excess of the investment value for financial reporting over the tax basis of investments in those foreign subsidiaries for which such excess is considered to be permanently reinvested in those operations.

~~See Note 10,~~ ~~Income Taxes, to the Consolidated Financial Statements for further discussion.~~

~~OTHER INFORMATION~~

~~Environmental, Health and Safety~~

~~For a discussion of certain environmental, health and safety issues involving us, see Note 8,~~ ~~Commitments and Contingencies,~~ ~~to the Consolidated Financial Statements.~~

~~Litigation and Contingent Liabilities~~

~~For a discussion of certain litigation involving us, see Note 8,~~ ~~Commitments and Contingencies,~~ ~~to the Consolidated Financial Statements.~~

~~New Accounting Pronouncements~~

~~Recently issued accounting standards and their estimated effect on our Consolidated Financial Statements are also described in Note 18,~~ ~~New Accounting Pronouncements, to the Consolidated Financial Statements.~~

~~ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

~~Market Risk~~

~~We are exposed to interest rate risk on our variable-rate debt and price risk on our fixed-rate debt. At December 31, 2021, we had $182.0 million of variable-rate debt.~~ ~~Including the effect of the floating-to-fixed interest rate swaps (see Note 12,~~ ~~Derivatives, to the Consolidated Financial Statements),~~ ~~approximately 95% of our outstanding debt was comprised of fixed-rate debt as of December 31, 2021.~~

We assess market risk based on changes in interest rates utilizing a sensitivity analysis that measures the potential loss in earnings, fair values and cash flows based on a hypothetical 10% change in interest rates. Using this sensitivity analysis, such changes would not have a material effect on interest income or expense and cash flows and would change the fair values of fixed-rate debt at December 31, 2021 and 2020 by $8.7 million and $23.7 million, respectively.

We are exposed to the impact of foreign currency fluctuations based on our global operations. Foreign currency fluctuations affect the U.S. dollar value of revenues earned and expenses incurred in foreign currencies. We are also exposed to currency risk to the extent we own assets or incur liabilities, or enter into other transactions that are not in the functional currency of the subsidiary in which we operate. We employ different practices to manage these risks, including where appropriate the use of derivative instruments, such as foreign currency forwards. As of December 31, 2021 and 2020, the aggregate notional amount of outstanding foreign currency contracts was $236.4 million and $220.7 million, respectively (see Note 12, ~~Derivatives~~, to the Consolidated Financial Statements). The net unrealized gains from these foreign currency contracts were $2.6 million and $3.6 million as of December 31, 2021 and 2020, respectively. We do not use derivative financial instruments for trading or speculative purposes.

~~Credit Risk~~

We are exposed to credit risk on accounts receivable balances. This risk is mitigated due to our large, diverse client base, dispersed over various geographic regions and industrial sectors. No single client comprised more than 10% of our consolidated net sales in 2021, 2020 or 2019. We maintain provisions for potential credit losses and such losses to date have normally been within our expectations. We evaluate the solvency of our clients on an ongoing basis to determine if additional allowances for credit losses need to be recorded. Significant economic disruptions or a slowdown in the economy could result in significant additional charges.

~~Commodities~~

The primary raw materials used by us are paper and ink. To reduce price risk caused by market fluctuations, we have incorporated price adjustment clauses in certain sales contracts. We believe a hypothetical 10% change in the price of paper and other raw materials would not have a significant effect on our consolidated annual results of operations or cash flows because these costs are generally passed through to our clients, although there may be contractual delays in our ability to pass along these increases.

~~ITEM 8.~~

~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~

~~The financial information required by Item 8 is contained in Item 15 of Part IV of this~~ Annual Report on Form ~~10-K.~~

~~ITEM 9.~~

~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~

~~None.~~

~~ITEM 9A.~~

~~CONTROLS AND PROCEDURES~~

~~Disclosure Controls and Procedures~~

As required by Rule 13a-15(b) and Rule 15d-15(e) of the Securities Exchange Act of 1934, our management, including the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As of December 31, 2021, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures as of December 31, 2021 were effective in ensuring information required to be disclosed in our SEC reports was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information was accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Changes in Internal Control Over Financial Reporting~~

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Report of Management on Internal Control Over Financial Reporting~~

The management of the Company, including the Company’s Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

Management of the Company, including the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. Management based this assessment on criteria for effective internal control over financial reporting described in the “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

~~Based on this assessment, management determined that, as of December 31, 2021, the Company maintained effective internal control over financial reporting.~~

~~Deloitte & Touche LLP, an independent registered public accounting firm, who audited the consolidated financial statements of the Company included in this Annual Report on Form~~ 10-K ~~has also audited the effectiveness of the Company’s internal control over financial reporting as stated in its report appearing below.~~

~~February 24, 2022~~

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~To the stockholders and the Board of Directors of~~

~~R.R. Donnelley & Sons Company~~

~~Opinion on Internal Control over Financial Reporting~~

~~We have audited the internal control over financial reporting of R.R. Donnelley & Sons Company and subsidiaries (the “Company”) as of December 31, 2021, based on criteria established in~~ ~~Internal Control — Integrated Framework (2013)~~ issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in ~~Internal Control — Integrated Framework (2013)~~ ~~issued by COSO.~~

~~We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and~~ for the year ended December 31, 2021 for a discussion of the ~~Company~~relevant assumptions used in calculating grant date fair value pursuant to ASC Topic 718. The aggregate number of restricted stock units and ~~our report dated February 24, 2022 expressed an unqualified opinion on those financial statements~~phantom restricted stock units held by each non-employee director as of fiscal year end included: 106,588 for Ms. Esteves, 135,048 for Ms. Gianinno, 131,084 for Mr. McLevish, 111,068 for Ms. Moldafsky, 184,165 for Mr. Phipps, and ~~included an explanatory paragraph regarding the Company’s adoption of a new accounting standard.~~

~~Basis~~216,415 for ~~Opinion~~

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

~~Definition and Limitations of Internal Control over Financial Reporting~~

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~/s/ DELOITTE & TOUCHE LLP~~

~~Chicago, Illinois~~

~~February 24, 2022~~

~~ITEM 9B.~~Mr. Pope.

~~OTHER INFORMATION~~

~~None.~~

~~ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS~~

~~Not applicable.~~

~~PART III~~

~~ITEM 10.~~

~~DIRECTORS AND EXECUTIVE OFFICERS OF R. R. DONNELLEY & SONS COMPANY AND CORPORATE GOVERNANCE~~

~~The information required by Item 10 is incorporated herein by reference to our definitive proxy statement or amendment to this Form 10-K to be filed with the SEC no later than~~ ~~May 2, 2022. Information with respect to our executive officers is included as a supplemental item at the end of Part I of this Annual Report on Form 10-K under the caption “Information About Our Executive Officers~~.”

~~We have adopted a policy statement entitled~~ ~~Code of Ethics~~ ~~that applies to our chief executive officer and senior financial officers which we make available on our web site,~~ ~~www.rrd.com. In the event that an amendment to, or a waiver from, a provision of the~~ ~~Code of Ethics~~ ~~is made or granted, we intend to post such information on our web site.~~

~~ITEM 11.~~

~~EXECUTIVE COMPENSATION~~

~~The information required by Item 11 is incorporated herein by reference to our definitive proxy statement or amendment to this Form 10-K to be filed with the SEC no later than May 2, 2022.~~

~~ITEM 12.~~

~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~

The information required by Item 12 relating to the security ownership of certain beneficial owners and management is incorporated herein by reference to our definitive proxy statement or amendment to this Form 10-K to be filed with the SEC no later than May 2, 2022

~~ITEM 13.~~

~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE~~

~~The information required by Item 13 is incorporated herein by reference to our definitive proxy statement or amendment to this Form 10-K to be filed with the SEC no later than May 2, 2022.~~

~~ITEM 14.~~

~~PRINCIPAL ACCOUNTING FEES AND SERVICES~~

~~The information required by Item 14 is incorporated herein by reference to our definitive proxy statement or amendment to this Form 10-K to be filed with the SEC no later than May 2, 2022.~~

~~PART IV~~

~~ITEM 15.~~

~~EXHIBITS, FINANCIAL STATEMENT SCHEDULES~~

~~(a)~~

~~1. Financial Statements~~

~~The financial statements listed in the accompanying index (page F-1) to the financial statements are filed as part of this Annual Report on Form 10-K.~~

~~(b)~~

~~Exhibits~~

~~The exhibits listed in the Exhibit Index on the following page are filed or incorporated by reference as part of this Annual Report on Form 10-K.~~

~~(c)~~

~~Financial Statement Schedules omitted~~

(3)	Includes interest accrued on dividend equivalents on restricted stock awards credited to each director’s account.

(4) Mr. Phipps resigned from the Board effective July 28, 2021.

(5) Mr. Ray was appointed to the Board effective February 26, 2021, as such, his total retainer and stock award grant includes the standard annual amount plus a proration of compensation prior to his election by shareholders at the 2021 annual meeting of shareholders.

CEO Pay Ratio Disclosure

In accordance with Item 402(u) of Regulation S-K, public companies are required to disclose the ratio of the median annual total compensation of all employees other than the CEO to the annual total compensation of the CEO. In accordance with this rule, we are providing the following information about the relationship of the median annual total compensation of our employees and the annual total compensation of Daniel L. Knotts, our CEO.

For the fiscal year ended December 31, 2021, the annual total compensation of our previously identified median employee was $27,981 and the annual total compensation of Mr. Knotts as set forth in the summary compensation table in this Form 10-K/A was $9,146,449. Based on this information, the ratio of the annual total compensation of Mr. Knotts to the median of the annual total compensation of all employees was estimated to be 327 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on payroll and employment records and the methodologies described below. Annual total compensation was calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. With respect to the CEO, we used the amount reported as total compensation in the summary compensation table included in this Form 10-K/A.

To identify our median employee we pulled annual base salary and hourly wages (including overtime) for approximately 31,700 employees as of December 31, 2020, excluding the employees described below. No cost-of-living adjustment was applied and we used an exchange rate based on the monthly average for December 2020 to convert salaries and wages to comparable US dollar amounts.

In accordance with SEC rules and interpretations, for purposes of this calculation, we excluded 1,653 employees from the following countries based on the small number of employees in each such country: Barbados (112 employees), Chile (27 employees), Costa Rica (14 employees), Czech Republic (298 employees), Grenada (6 employees), Guatemala (12 employees), Honduras (35 employees), Hungary (391 employees), Philippines (367 employees), Saint Lucia (7 employees), Sri Lanka (364 employees) and Trinidad and Tobago (20 employees).

This process resulted in a representative employee selected in accordance with SEC guidance. Our resulting median employee is located in Asia. As of December 31, 2021, there has been no change in the Company’s employee population or employee compensation arrangements that the Company believes would significantly impact the pay ratio disclosure.

The SEC’s rules for identifying our median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions to reflect the employee population and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio determined above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

APPENDIX A -RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

Reconciliation of GAAP to Non-GAAP Income from Operations

For the Twelve Months Ended December 31, 2019

(UNAUDITED)

(in millions)

~~Certain schedules have been omitted because~~

For the ~~required information is included in the Consolidated Financial Statements and Notes thereto or because they are not applicable or not required.~~

~~ITEM 16.~~

~~FORM 10-K SUMMARY~~

~~None.~~

Twelve Months Ended

~~INDEX TO EXHIBITS~~

~~2.1~~	Separation and Distribution Agreement, dated as of September 14, 2016, by and among R.R. Donnelley & Sons Company, LSC Communications, Inc. and Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on 8-K filed October 3, 2016).December 31, 2021

~~2.2~~	Tax Disaffiliation Agreement, dated as of September 14, 2016, between LSC Communications, Inc. and R.R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.4 to the Company’s Current Report on 8-K filed October 3, 2016).

~~2.3~~	Tax Disaffiliation Agreement, dated as of September 14, 2016, between Donnelley Financial Solutions, Inc. and R.R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.5 to the Company’s Current Report on Form 8-K filed October 3, 2016).

~~2.4~~	Asset Purchase Agreement, dated as of September 14, 2020, among R. R. Donnelley & Sons Company, Donnelley Logistics Services Worldwide, Inc., TForce Worldwide, Inc. and TForce Holdings USA, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 15, 2020).

~~3.1~~	Restatement of Certificate of Incorporation of R.R. Donnelley & Sons Company (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed on October 30, 2019).

~~3.2~~	~~Amended and Restated By-Laws of R.R. Donnelley & Sons Company (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed on October 3, 2016).~~

~~4.1~~	~~Description of Securities (filed herewith)~~

~~4.2~~	Instruments, other than those defining the rights of holders of long-term debt not registered under the Securities Exchange Act of 1934 of the registrant and of all subsidiaries for which consolidated or unconsolidated financial statements are required to be filed are being omitted pursuant to paragraph (4)(iii)(A) of Item 601 of Regulation S-K. Registrant agrees to furnish a copy of any such instrument to the Commission upon request.

~~4.3~~	~~Indenture dated as of November 1, 1990 between the Company and Citibank, N.A., as Trustee (incorporated by reference to Exhibit 4 filed with the Company’s Form SE filed on March 26, 1992) (P)~~

~~4.4~~	Indenture dated as of January 3, 2007 between the Company and LaSalle Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 filed on January 3, 2007)

~~4.5~~		Indenture, dated as of June 18, 2020, between the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 19, 2020).

~~4.6~~	Indenture, dated as of March 30, 2020, between the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 3, 2020).

~~4.7~~	Rights Agreement, dated as of August 28, 2019, between R.R. Donnelley & Sons Company and Computershare Trust Company, N.A., as rights agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K/A filed August 29, 2019).

~~4.8~~	First Amendment to Rights Agreement, dated as of August 17, 2020, between R. R. Donnelley & Sons Company and Computershare Trust Company, N.A., as rights agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed August 18, 2020).

~~10.1~~	Amended and Restated 2017 Performance Incentive Plan (incorporated by reference to Appendix B to the Company’s Annual Proxy Statement on Schedule 14A, filed on April 8, 2019)*

~~10.2~~	2012 Performance Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, filed on July 30, 2013)*

~~10.3~~	2004 Performance Incentive Plan (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 25, 2009)*

~~10.4~~	Amended and Restated R.R. Donnelley & Sons Company Unfunded Supplemental Benefit Plan (incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, filed on November 3, 2010)*

~~10.5~~	Amendment to Amended and Restated R.R. Donnelley & Sons Company Unfunded Supplemental Benefit Plan (incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, filed on November 3, 2010)*

~~10.6~~
GAAP basis measure		Employment Agreement, dated as of October 1, 2016, between Daniel L. Knotts and R.R. Donnelley & Sons Company (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on 8-K filed on October 3, 2016)*
	$ 163.5
Non-GAAP adjustments:
Restructuring, impairment and other charges-net⁽¹⁾		33.3
Merger-related expenses ⁽²⁾		40.8
All other⁽³⁾		18.7
Total Non-GAAP adjustments		92.8
Non-GAAP measure		256.3
~~10.7~~		Form of Restated Employment Letter for Executive Officers (other than CEO) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on March 5, 2019)*

	(1)	Restructuring, impairment and other charges-net: includes $21.9 million in other restructuring charges, primarily lease terminations and environmental costs. It also includes $10.7 million for multi-employer pension plan charges, primarily related to the final liability apportionment of the LSC MEPP between RRD and Donnelley Financial, and $8.4 million for employee termination costs, partially offset by net gains on the sale of restructured facilities.

~~10.8~~			Senior Leadership Separation Pay Plan Form of Restated Employment Letter for Executive Officers (other than CEO) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on March 5, 2019)*

~~10.9~~			Form of Change in Control Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed March 5, 2019)*

~~10.10~~			Amended and Restated Annual Incentive Plan (incorporated by reference to Exhibit 10.32 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed on May 7, 2015)*

~~10.11~~			Form of Option Agreement for Executive Officers (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.12~~			Form of Option Agreement for Executive Officers (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.13~~			Form of Performance Stock Unit Award Agreement for Executive Officers (2018) (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.14~~			Form of Performance Stock Unit Award Agreement for Executive Officers (2019) (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.15~~			Form of Phantom Performance Stock Unit Award Agreement for Executive Officers (2019) (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.16~~			Form of Restricted Stock Unit Award Agreement for Executive Officers (2018) (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.17~~			Form of Restricted Stock Unit Award Agreement for Executive Officers (2019) (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.18~~			Form of Phantom Restricted Stock Unit Award Agreement for Executive Officers (2018) (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.19~~			Form of Phantom Restricted Stock Unit Award Agreement for Executive Officers (2019) (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 26, 2020)*

~~10.20~~			Form of Long-Term Incentive Cash Award Agreement (incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed on February 27, 2019)*

~~10.21~~			Form of Phantom Restricted Stock Unit Award Agreement for Directors (filed herewith)*

~~10.22~~			Form of Restricted Stock Unit Award Agreement for Directors (filed herewith)*

~~10.23~~			R.R. Donnelley & Sons Company Non-Employee Director Compensation Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on 8-K filed on October 3, 2016).*

~~10.24~~			Form of Amended and Restated Indemnification Agreement for directors (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed on February 26, 2014)*

~~10.25~~			Form of Indemnification Agreement for directors (incorporated by reference to Exhibit 10.36 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 31, 2016, filed on November 2, 2016)*

~~10.26~~			Second Amended and Restated Credit Agreement, dated as of September 29, 2017, among R.R. Donnelley & Sons Company, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on 8-K filed on October 3, 2017).

				(2)	Merger-related expenses: includes $17.9 million of GAAP-only incentive compensation, a $12 million break fee paid to Atlas Holdings and other professional fees incurred in connection with the planned merger with Chatham.
~~10.27~~			Credit Agreement, dated as of October 15, 2018, among R. R. Donnelley and Sons Company, the lenders party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 15, 2018)

	(3)	All other: Primarily includes expenses related to the ongoing SEC and DOJ investigations and costs related to the investigation by Brazil regulators.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the ownership of RRD Common Stock as of January 31, 2022 by the persons or groups of stockholders that are known to us to be the beneficial owners of more than 5% of the shares of RRD Common Stock as of January 31, 2022 (using the number of shares outstanding on that date for calculating the percentage). The information regarding beneficial owners of more than 5% of RRD Common Stock is based solely on public filings made by such owners with the SEC.


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Chatham Asset Management, LLC⁽¹⁾	10,927,100⁽²⁾	14.53%
BlackRock Inc.⁽³⁾	5,176,405⁽⁴⁾	6.88%
Barclays PLC⁽⁵⁾	5,084,781⁽⁶⁾	6.76%
HG Vora Capital Management, LLC⁽⁷⁾	5,000,000⁽⁸⁾	6.65%
~~10.28~~			Amendment No. 1 to Credit Agreement, dated as of October 15, 2018, among R. R. Donnelley and Sons Company, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 15, 2018)

(1)

In the jointly-filed Schedule 13D, as amended (most recently prior to December 16, 2021 by Amendment No. 7 filed with the SEC on December 15, 2021), of CAM, Chatham Asset High Yield Master Fund, Ltd. and Anthony Melchiorre (the “Chatham 13D”), CAM lists its principal business address as 26 Main Street, Suite 204, Chatham, New Jersey 07928.

				(2)	Represents shares of RRD Common Stock beneficially owned as of December 15, 2021, based on the Chatham 13D. The Chatham 13D discloses that CAM has shared investment and voting authority over 10,927,100 shares, that Chatham Asset High Yield Master Fund, Ltd. beneficially owns 4,538,973 shares over which it has shared investment and voting authority and that Mr. Melchiorre beneficially owns 10,927,100 shares over which he has shared investment and voting authority.
21			~~Subsidiaries of the Company (filed herewith)~~

(3)

In the Schedule 13D filed by BlackRock Inc. on February 4, 2022 (the “BlackRock 13D”), BlackRock Inc. lists its principal business address as 55 East 52nd Street, New York, New York 10055.

				(4)	Represents shares of RRD Common Stock beneficially owned as of December 31, 2021, based on the BlackRock 13D. In the BlackRock 13D, BlackRock Inc. indicates that it has sole investment authority over 5,176,405 shares and sole voting authority over 4,963,941 shares.
23			~~Consent of Deloitte & Touche LLP (filed herewith)~~

(5)

In the Schedule 13G/A filed by Barclays PLC on February 11, 2022 (the “Barclays 13G”), Barclays PLC lists its principal business address as 1 Churchill Place, London, E14 5HP, England.

				(6)	Represents shares of RRD Common Stock beneficially owned as of December 31, 2021, based on the Barclays 13G. In the Barclays 13G, Barclays PLC indicates that it has sole investment and voting authority over 5,084,781 shares and sole voting authority over 4,963,941 shares.
24			~~Power of Attorney (filed herewith)~~

(7)

In the Form 13F filed by HG Vora Capital Management, LLC on November 15, 2021 (the “HG Vora Capital Management 13F”), HG Vora Capital Management, LLC lists its principal address as 330 Madison Avenue, 20th Floor, New York, New York 10017.

				(8)	Represents shares of RRD Common Stock beneficially owned as of September 30, 2021, based on the HG Vora Capital Management 13F. In the HG Vora Capital Management 13F, HG Vora Capital Management, LLC indicates that it has sole investment and voting authority over 5,000,000 shares.
~~31.1~~			~~Certification by Daniel L. Knotts, President and Chief Executive Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)~~

The following table sets forth the total number of shares of RRD Common Stock beneficially owned and the percentage of the outstanding shares of RRD Common Stock so owned as of January 31, 2022 by:

•

each director;

•

each named executive officer; and

~~31.2~~

•

all directors and executive officers as a group.


	Amount and Nature of Beneficial Ownership
Name of Beneficial Owner	Shares of RRD Common Stock	Restricted Stock Units⁽¹⁾	Stock Options Exercisable on or Prior to April 1, 2022	Total	Percent of Class
Directors and Named Executive Officers
John C. Pope	216,415	—	—	216,415	*
Irene M. Esteves	106,588	—	—	106,588	*
Susan M. Gianinno	135,048	—	—	135,048	*
Timothy R. McLevish	131,084	—	—	131,084	*
Jamie Moldafsky	111,068	—	—	111,068	*
James Ray, Jr	—	—	—	—	*
Daniel L. Knotts	2,655,009	—	14,500	2,669,509	3.55%
Terry D. Peterson	642,223	—	—	642,223	*
John P. Pecaric	298,384	—	—	298,384	*
Douglas D. Ryan⁽²⁾	55,223	—	—	55,223	*
Michael J. Sharp	25,337	—	—	25,337	*
Deborah L. Steiner	274,549	—	—	274,549	*
All Directors and Executive Officers as a Group (13 Persons)	4,659,692	—	15,500	4,674,192	6.21%

*Less than 1%.

(1)

Includes only executive officer restricted stock units that have vested or are scheduled to vest on or prior to April 1, 2022. Does not include outside director restricted stock units. Outside director restricted stock units are payable in shares of RRD Common Stock or cash, as determined by RRD, upon the applicable director’s termination from the Board and thus do not confer any right to ownership of the underlying shares.

(2)	Mr. Ryan terminated employment with RRD effective June 1, 2021.

Except as otherwise indicated above, each of the persons named in each of the above tables has sole voting and investment power with respect to all RRD Common Stock beneficially owned set forth opposite their name.

Change in Control

As previously disclosed, on December 17, 2021, the Company entered into the Merger Agreement, by and among the Company, Parent, and Acquisition Sub, providing for the merger of Acquisition Sub with and into the Company pursuant to the DGCL, upon the terms and subject to the conditions set forth in the Merger Agreement, with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent and Acquisition Sub are affiliates of CAM.

As a result of the Merger, each share of Common Stock, par value $0.01 per share, of the Company (“Company Common Stock”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than Company Common Stock (i) held by the Company (including shares held as treasury shares) or any of its subsidiaries or Parent, Acquisition Sub or any of their wholly owned subsidiaries (including the shares contributed to Parent by certain affiliates of CAM in accordance with the capital commitment letter entered into in connection with the Merger Agreement (as described below)), and (ii) held by stockholders who have properly exercised appraisal rights pursuant to Delaware law) shall be converted into the right to receive $10.85 per share in cash, without interest (the “Merger Consideration”). On February 23, 2022, at a special meeting of stockholders, the Company’s stockholders approved the Merger and the Merger is expected to close on February 25, 2022.

Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time:

•

each Company stock option (“Company Option”) (whether or not vested) that is outstanding immediately prior to the Effective Time will automatically vest (if unvested) and be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the excess, if any, of (A) the Merger Consideration over (B) the per-share exercise price for such Company Option multiplied by (ii) the total number of shares of Company Common Stock underlying such Company Option, provided that if the exercise price per share of Company Common Stock of such Company Option is equal to or greater than the Merger Consideration, such Company Option will be cancelled without any cash payment or other consideration being made in respect thereof;

•

each Company time-based restricted stock unit (“Company RSU”) that is outstanding immediately prior to the Effective Time will automatically vest (if unvested) and be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the total number of shares of Company Common Stock underlying such Company RSU multiplied by (ii) the Merger Consideration, provided that any Company RSUs granted between the date of the Merger Agreement and the Effective Time (the “Interim Period”) will vest on a pro-rata basis based on the number of days in the award period preceding the closing of the Merger, and any such Company RSUs that do not so vest will be forfeited for no consideration;

•

each Company time-based phantom restricted stock unit (“Company Phantom RSU”) award that is outstanding immediately prior to the Effective Time will automatically vest (if unvested) and be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the number of Company Phantom RSUs underlying the award multiplied by (ii) the Merger Consideration, provided that any Company Phantom RSUs granted during the Interim Period will vest on a pro-rated basis based on the number of days in the award period preceding the closing of the Merger, and any such Company Phantom RSUs that do not so vest will be forfeited for no consideration; and

•

each Company performance stock unit or phantom performance stock unit (“Company PSU”) that is outstanding immediately prior to the Effective Time will automatically be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the number of shares of Company Common Stock underlying such Company PSU attributable to the percentage of the Company PSUs that vest as of immediately prior to the Effective Time (with vesting determined based on the attainment of the applicable performance metrics at the greater of target and actual level of performance for any awards in respect of which the performance period has not expired as of the Effective Time and based on actual level of performance for any awards in respect of which the performance period has expired prior to the Effective Time, in each case, as determined in good faith consistent with past practice by the Board or a committee thereof) multiplied by (ii) the Merger Consideration, provided that any Company PSUs granted during the Interim Period will vest on a pro-rated basis based on the number of days in the award period preceding the closing of the Merger (with vesting based on target-level performance), and any such Company PSUs that do not so vest will be forfeited for no consideration.

If the Merger is consummated, the Company Common Stock will be delisted from the New York Stock Exchange on the closing date and deregistered under the Securities Exchange Act of 1934 as promptly as practicable after the Effective Time.

The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 to the Current Report on Form 8-K filed on December 17, 2021, and is incorporated herein by reference.

Equity Compensation Plan Information

Plan Category

Number of Securities

to Be Issued upon

Exercise of

Outstanding Options,

Warrants and Rights

(in thousands)

(1)

Weighted-Average

Exercise Price of

Outstanding Options,

Warrants and

Rights^(b)

(2)

Number of Securities

Remaining Available for

Future Issuance under

Equity Compensation Plans

(Excluding Securities

Reflected in Column (1))

(in thousands)

(3)

Equity compensation plans approved by security holders ^(a)(c)

756.0

21.47

7,444.8

(a)	Includes 493,532 shares issuable upon the vesting of restricted stock units, 177,058 shares issuable upon the vesting of performance stock units, and 85,411 shares issuable upon the exercise of stock options.

(b)Restricted stock units were excluded when determining the weighted-average exercise price of outstanding options, warrants and rights.

(c)

All of these shares are available for issuance under the 2017 Performance Incentive Plan. The 2012 Performance Incentive Plan (the “2012 PIP”), which was frozen effective May 18, 2017, allowed grants in the form of cash or bonus awards, stock options, stock appreciation rights, restricted stock, stock units or combinations thereof. The maximum number of shares of common stock that could have been granted under the 2012 PIP with respect to bonus awards, including performance awards or fixed awards in the form of restricted stock or other form, was 10,000,000 in the aggregate, or 3,333,333 adjusted for the reverse stock split. The 2017 Performance Incentive Plan (the “2017 PIP”) allows grants in the form of cash or bonus awards, stock options, stock appreciation rights, restricted stock, stock units or combinations thereof. The maximum number of shares of common stock that may be granted under the 2017 PIP with respect to bonus awards, including performance awards or fixed awards in the form of restricted stock or other form, is 15,050,000 in the aggregate, of which 7,444,833 remained available for issuance as of December 31, 2021.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Information regarding director independence is incorporated herein by reference from the material under the headings “The Board’s Committees and Their Functions” and “Independence of Directors” under Item 10 of this Form 10-K/A.

Certain Transactions

The Company has a written policy relating to approval or ratification of all transactions involving an amount in excess of $120,000 in which the Company is a participant and in which a related person has or will have a direct or indirect material interest, including without limitation any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships, subject to certain enumerated exclusions. Under the policy, such related person transactions must be approved or ratified by (i) the Corporate Responsibility & Governance Committee or (ii) if the Corporate Responsibility & Governance Committee determines that the approval or ratification of such transaction should be considered by all of the disinterested members of the Board, such disinterested members of the Board by a majority vote. Related persons include any of our directors or certain executive officers, certain of our stockholders and their immediate family members.

In considering whether to approve or ratify any related person transaction, the Corporate Responsibility & Governance Committee or such disinterested directors, as applicable, may consider all factors that they deem relevant to the transaction, including, but not limited to, the size of the transaction and the amount payable to or receivable from a related person, the nature of the interest of the related person in the transaction, whether the transaction may involve a conflict of interest, and whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties.

To identify related person transactions, at least once a year all directors and executive officers of the Company are required to complete questionnaires seeking, among other things, disclosure with respect to such transactions of which such director or executive officer may be aware. In addition, each executive officer of the Company is required to advise the Chair of the Corporate Responsibility & Governance Committee of any related person transaction of which he or she becomes aware.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Pre-Approval Policy

The Audit Committee has policies and procedures that require the approval by the Audit Committee of all services performed by, and as necessary, fees paid to the Company’s independent registered public accounting firm. The Audit Committee approves the proposed services, including the scope of services contemplated and the related fees, associated with the current year audit. In addition, Audit Committee pre-approval is also required for those engagements that may arise during the course of the year that are outside the scope of the initial services and fees pre-approved by the Audit Committee. The Audit Committee pre-approves, up to an aggregate dollar amount and individual dollar amount per engagement, certain permitted non-audit services anticipated to be provided by the Company’s independent registered public accounting firm. In the event permitted non-audit service amounts exceed the thresholds established under the pre-approval policy, the Audit Committee must specifically approve such excess amounts. The Audit Committee Chair has the authority to approve any services outside the specific pre-approved non-audit services and must report any such approval at the next meeting of the Audit Committee.

Pursuant to the Sarbanes-Oxley Act of 2002, the fees and services provided as noted below were authorized and approved by the Audit Committee in compliance with the pre-approval policies and procedures described above.

Type of Fee	Fiscal 2021			Fiscal 2020

Audit Fees		$	4,196,000		$	4,402,000
Audit-Related Fees		$	196,000		$	715,000
Tax Fees		$	182,000		$	33,000
All Other Fees		$	—		$	150,000
Total		$	4,574,000		$	5,300,000

Audit Fees—Deloitte & Touche LLP (Deloitte) was the Company’s independent registered public accounting firm for the years ended December 31, 2021 and 2020. Audit Fees primarily include the audit of the Company’s annual financial statements included in the Company’s Forms 10-K and the review of the Company’s quarterly financial statements included in the Company’s Forms 10-Q, and statutory audits of certain of the Company’s international subsidiaries. Lastly, Audit Fees include fees for issuance of comfort letters, consents, and AT101 attestation reports over IT controls during 2021 and 2020.

Audit-Related Fees—Total fees paid to Deloitte for audit-related services rendered during 2021 and 2020 were $196,000 and $715,000, respectively. Audit-related fees paid to Deloitte in 2021 include fees associated with due diligence services and audits of certain of the Company’s employee benefit plans.

Tax Fees—Total fees paid to Deloitte for tax services rendered during 2021 and 2020 were $182,000 and $33,000, respectively, primarily related to acquisition advisory tax services and international tax compliance.

All Other Fees— All other fees paid to Deloitte in 2020 related to fees associated with an operations-related consulting engagement at one of the Company's international locations.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(b)Exhibits

The exhibits listed in the Exhibit Index on the following page are filed or incorporated by reference as part of this Form 10-K/A.

ITEM 16. FORM 10-K SUMMARY

None.

EXHIBIT INDEX


31.3	Certification by Daniel L. Knotts, President and Chief Executive Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)
31.4	Certification by Terry D. Peterson, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)

~~32.1~~		Certification by Daniel L. Knotts, President and Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith)

~~32.2~~		~~Certification~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 24^th day of February 2022.


R. R. DONNELLEY & SONS COMPANY

By:	/ S / Terry D. Peterson Executive Vice President and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith)

~~101.INS~~		~~Inline XBRL Instance Document~~

~~101.SCH~~		~~Inline XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~		~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~		~~Inline XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~		~~Inline XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~		~~Inline XBRL Taxonomy Extension Presentation Linkbase Document~~
~~104~~		~~Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)~~

*	~~Management contract or compensatory plan or arrangement.~~

~~SIGNATURES~~

~~R. R. DONNELLEY~~ ~~& SONS~~ C~~OMPANY~~

~~By:~~		/ S ~~/ Terry~~ ~~D. Peterson~~
		Terry D. Peterson Executive Vice President and Chief Financial Officer (Principal Financial Officer)

~~Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated, on the 24~~^th ~~day of February 2022.~~


	~~Signatureand Title~~		~~Signatureand Title~~

/ S ~~/ DANIEL~~ ~~L. KNOTTS~~		/ S ~~/ TIMOTHY~~ ~~R. MCLEVISH~~ *
~~Daniel L. Knotts~~ ~~President and Chief Executive Officer, Director~~ ~~(Principal Executive Officer)~~		~~Timothy R. Mclevish~~ ~~Director~~

/ S / T~~erry~~ ~~D. Peterson~~		/ S ~~/ JAMIE~~ M~~OLDAFSKY~~ *
~~Terry D. Peterson~~ ~~Executive Vice President and Chief Financial Officer~~ ~~(Principal Financial Officer)~~		~~Jaime Moldafsky~~ ~~Director~~

/ S ~~/ MICHAEL~~ ~~J. SHARP~~		/ S ~~/ JOHN~~ ~~C. POPE~~ *
~~Michael J. Sharp~~ ~~Senior Vice President and Chief Accounting Officer~~ ~~(Principal Accounting Officer)~~		~~John C. Pope~~ ~~Chairman of the Board, Director~~

/ S / JAMES RAY *		/ S ~~/ IRENE~~ ~~M. ESTEVES~~ *
~~James Ray~~ ~~Director~~		~~Irene M. Esteves~~ ~~Director~~

/ S ~~/ SUSAN~~ ~~M. GIANINNO~~ *
~~Susan M. Gianinno~~ ~~Director~~

~~By:~~

/ S /D~~eborah~~ ~~L. Steiner~~

~~Deborah L. Steiner~~

~~As Attorney-in-Fact~~

*	~~By Deborah L. Steiner as Attorney-in-Fact pursuant to Powers of Attorney executed by the directors listed above, which Powers of Attorney have been filed with the Securities and Exchange Commission.~~

~~ITEM 15(a). INDEX TO FINANCIAL STATEMENTS~~

	~~Page~~
~~Consolidated Statements of Operations for each of the three years in the period ended December 31, 2021~~	F–	2
~~Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the period ended December 31, 2021~~	F–	3
~~Consolidated Balance Sheets as of December 31, 2021 and 2020~~	F–	4
~~Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2021~~	F–	5
~~Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2021~~	F–	6
~~Notes to Consolidated Financial Statements~~	F–	7
~~Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)~~	F–	40

~~R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES (“RRD”)~~

~~CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(in millions, except per share data)~~

Year Ended December 31,

2021

2020

2019

Net sales

4,963.7

4,766.3

5,473.2

Cost of sales

3,994.9

3,789.2

4,389.3

Gross profit

968.8

977.1

1,083.9

Selling, general and administrative expenses (exclusive of depreciation and amortization)

600.6

597.5

687.7

Restructuring, impairment and other charges-net (Note 5)

33.3

100.0

36.7

Depreciation and amortization

130.5

145.7

162.6

Other operating expense

40.9

25.8

11.6

Income from operations

163.5

108.1

185.3

Interest expense-net (Note 11)

127.6

135.1

150.6

Investment and other income-net

(19.9
)

(14.1
)

(16.7
)
Loss on debt extinguishment

7.1

3.0

0.8

Income (loss) from continuing operations before income taxes

48.7

(15.9
)

50.6

Income tax expense (Note 10)

44.9

10.0

54.9

Net income (loss) from continuing operations

3.8

(25.9
)

(4.3
)
Gain on sale of discontinued operations, net of tax

0.6

127.4

—

Loss from discontinued operations, net of tax (Note 2)

—

(2.5
)

(88.4
)
Net income (loss) from discontinued operations

0.6

124.9

(88.4
)
Net income (loss)

4.4

99.0

(92.7
)
Less: income attributable to noncontrolling interests

0.7

0.5

0.5

Net income (loss) attributable to RRD common stockholders
$
3.7

$
98.5

$
(93.2
)

Basic net earnings (loss) per share attributable to RRD common stockholders (Note 13):

Continuing operations
$
0.04

$
(0.37
)

$
(0.07
)
Discontinued operations

0.01

1.73

(1.24
)
Net earnings (loss) attributable to RRD common stockholders

0.05

1.36

(1.31
)
Diluted net earnings (loss) per share attributable to RRD common stockholders (Note 13):

Continuing operations
$
0.04

$
(0.37
)

$
(0.07
)
Discontinued operations

0.01

1.73

(1.24
)
Net earnings (loss) attributable to RRD common stockholders

0.05

1.36

(1.31
)
Weighted average number of common shares outstanding:

Basic

73.2

72.3

71.2

Diluted

74.5

72.3

71.2

~~See accompanying Notes to Consolidated Financial Statements.~~

~~R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES (“RRD”)~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)~~

~~(in millions)~~

Year Ended December 31,

2021

2020

2019

Net income (loss)
$
4.4

$
99.0

$
(92.7
)

Other comprehensive (loss) income, net of tax (Note 14):

Translation adjustments

(11.1
)

27.8

7.0

Adjustment for net periodic pension and other postretirement benefits plan cost

91.7

7.2

(30.5
)
Changes in fair value of derivatives

10.1

(12.0
)

1.0

Other comprehensive income (loss)

90.7

23.0

(22.5
)
Comprehensive income (loss)

95.1

122.0

(115.2
)
Less: comprehensive income attributable to noncontrolling interests

0.6

1.2

0.4

Comprehensive income (loss) attributable to RRD common stockholders
$
94.5

$
120.8

$
(115.6
)

~~See accompanying Notes to Consolidated Financial Statements.~~

~~R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES (“RRD”)~~

~~CONSOLIDATED BALANCE SHEETS~~

~~(in millions, except per share data)~~

December 31,

2021

2020

ASSETS

Cash and cash equivalents
$
280.2

$
288.8

Receivables, less allowances for credit losses of $8.7 in 2021 (2020 - $15.9) (Note 1)

1,063.4

1,009.2

Inventories (Note 1)

352.7

302.1

Assets held-for-sale

9.2

23.1

Prepaid expenses and other current assets

101.3

133.4

Total current assets

1,806.8

1,756.6

Property, plant and equipment-net (Note 1)

408.4

438.8

Goodwill (Note 6)

405.4

410.6

Other intangible assets-net (Note 6)

49.8

68.8

Deferred income taxes (Note 10)

34.6

78.5

Operating lease assets (Note 8)

214.5

223.8

Other noncurrent assets

211.9

153.8

Total assets
$
3,131.4

$
3,130.9

LIABILITIES

Accounts payable
$
895.3

$
804.5

Accrued liabilities and other (Note 7)

352.9

351.2

Short-term operating lease liabilities (Note 8)

70.8

73.4

Short-term and current portion of long-term debt (Note 11)

—

61.1

Total current liabilities

1,319.0

1,290.2

Long-term debt (Note 11)

1,466.3

1,442.0

Pension liabilities (Note 9)

62.5

89.5

Other postretirement benefits plan liabilities (Note 9)

—

55.8

Long-term income tax liability (Note 10)

60.3

68.3

Long-term operating lease liabilities (Note 8)

149.9

156.9

Other noncurrent liabilities

238.3

272.0

Total liabilities

3,296.3

3,374.7

Commitments and Contingencies (Note 8)

EQUITY

RRD stockholders' equity

Preferred stock, $1.00 par value

Authorized: 2.0 shares; Issued: NaN

—

—

Common stock, $0.01 par value

Authorized: 165.0 shares;

Issued: 89.0 shares in 2021 and 2020

0.9

0.9

Additional paid-in-capital

2,686.9

3,263.6

Accumulated deficit

(2,237.0
)

(2,240.7
)
Accumulated other comprehensive loss

(63.1
)

(153.9
)
Treasury stock, at cost, 13.8 shares in 2021 (2020 - 17.6 shares)

(566.4
)

(1,127.6
)
Total RRD stockholders' equity
$
(178.7
)

$
(257.7
)
Noncontrolling interests

13.8

13.9

Total equity

(164.9
)

(243.8
)
Total liabilities and equity
$
3,131.4

$
3,130.9

~~See accompanying Notes to Consolidated Financial Statements.~~

~~R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES (“RRD”)~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(in millions)~~

Year Ended December 31,

2021

2020

2019

OPERATING ACTIVITIES

Net income (loss)
$
4.4

$
99.0

$
(92.7
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Impairment charges-net

1.9

25.8

99.3

Depreciation and amortization

130.5

150.3

169.2

(Benefit) provision for credit losses

(4.0
)

6.7

7.4

Share-based compensation

7.1

8.1

10.9

Deferred income taxes

12.9

(14.7
)

21.5

Changes in uncertain tax positions

(7.3
)

(3.6
)

(0.9
)
Gains from sales of property, plant and equipment

(12.4
)

(148.0
)

(15.1
)
Loss on debt extinguishments

7.1

3.0

0.8

Net pension and other postretirement benefits plan income

(18.9
)

(13.8
)

(16.1
)
Other

12.1

20.9

15.1

Changes in operating assets and liabilities - net of dispositions and acquisitions:

Accounts receivable-net

(42.4
)

16.1

72.2

Inventories

(50.9
)

5.8

15.2

Prepaid expenses and other current assets

(5.1
)

(5.2
)

(9.2
)
Accounts payable

79.1

3.5

(96.4
)
Income taxes payable and receivable

0.7

(25.6
)

(27.1
)
Accrued liabilities and other

(17.7
)

31.0

(6.2
)
Pension and other postretirement benefits plan contributions

(5.0
)

(9.5
)

(8.6
)
Net cash provided by operating activities

92.1

149.8

139.3

INVESTING ACTIVITIES

Capital expenditures

(73.3
)

(85.6
)

(138.8
)
Acquisition of business

—

—

(3.0
)
Dispositions of businesses, net of cash disposed

(1.4
)

247.6

50.6

Proceeds from sales of property, plant and equipment

19.2

43.0

65.4

Proceeds related to life insurance policies

0.2

100.0

—

Net cash (used in) provided by investing activities

(55.3
)

305.0

(25.8
)
FINANCING ACTIVITIES

Proceeds from issuance of long-term debt

451.1

—

—

Payments on other short-term debt

—

—

(37.9
)
Payments of current maturities and long-term debt

(524.8
)

(281.0
)

(223.0
)
Proceeds from credit facility borrowings

1,168.0

633.0

1,250.8

Payments on credit facility borrowings

(1,136.0
)

(675.0
)

(1,267.8
)
Debt issuance costs

(8.2
)

—

(0.3
)
Dividends paid

—

(2.1
)

(8.5
)
Payments of withholding taxes on share-based compensation

(22.6
)

(0.6
)

(1.1
)
Other financing activities

(2.8
)

(3.6
)

(1.6
)
Net cash used in financing activities

(75.3
)

(329.3
)

(289.4
)
Effect of exchange rate on cash, cash equivalents and restricted cash

1.2

8.3

(3.9
)
Net (decrease) increase in cash, cash equivalents and restricted cash

(37.3
)

133.8

(179.8
)
Cash, cash equivalents and restricted cash at beginning of year

357.6

223.8

403.6

Cash, cash equivalents and restricted cash at end of period
$
320.3

$
357.6

$
223.8

Supplemental cash flow disclosures:

Operating cash flows (used in) provided by discontinued operations
$
—

$
(1.4
)

$
20.7

Investing cash flows provided by (used in) discontinued operations
$
—

$
239.5

$
(2.8
)

~~See accompanying Notes to Consolidated Financial Statements.~~

~~R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES (“RRD”)~~

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

~~(in millions)~~

Common Stock

Additional
Paid-in-

Treasury Stock

Accumulated

Accumulated
Other
Comprehensive

Total RRD's
Stockholders'

Noncontrolling

Total

Shares

Amount

Capital

Shares

Amount

Deficit

Loss

Equity

Interests

Equity

Balance at January 1, 2019

89.0

$
0.9

$
3,404.0

(18.6
)

$
(1,285.5
)

$
(2,225.7
)

$
(153.8
)

$
(260.1
)

$
14.7

$
(245.4
)
Net (loss) income

(93.2
)

(93.2
)

0.5

(92.7
)
Other comprehensive loss

(22.4
)

(22.4
)

(0.1
)

(22.5
)
Share-based compensation

10.9

10.9

10.9

Issuance of share-based awards, net of withholdings and other

(66.9
)

0.5

65.9

(1.0
)

(1.0
)
Cash dividends paid

(8.5
)

(8.5
)

(8.5
)
Spinoff adjustments

(12.0
)

(12.0
)

(12.0
)
Cumulative impact of adopting ASU 2016-02, net of tax

2.6

2.6

2.6

Distributions to noncontrolling interests

—

(1.7
)

(1.7
)
Balance at December 31, 2019

89.0

$
0.9

$
3,348.0

(18.1
)

$
(1,219.6
)

$
(2,336.8
)

$
(176.2
)

$
(383.7
)

$
13.4

$
(370.3
)
Net income

98.5

98.5

0.5

99.0

Other comprehensive income

22.3

22.3

0.7

23.0

Share-based compensation

8.1

8.1

8.1

Issuance of share-based awards, net of withholdings and other

(92.5
)

0.5

92.0

(0.5
)

(0.5
)
Cash dividends paid

(2.1
)

(2.1
)

(2.1
)
Cumulative impact of adopting ASU 2016-13, net of tax

(0.3
)

(0.3
)

(0.3
)
Distributions to noncontrolling interests

—

(0.7
)

(0.7
)
Balance at December 31, 2020

89.0

$
0.9

$
3,263.6

(17.6
)

$
(1,127.6
)

$
(2,240.7
)

$
(153.9
)

$
(257.7
)

$
13.9

$
(243.8
)
Net income

3.7

3.7

0.7

4.4

Other comprehensive income (loss)

90.8

90.8

(0.1
)

90.7

Share-based compensation

7.1

7.1

7.1

Issuance of share-based awards, net of withholdings and other

(583.8
)

3.8

561.2

(22.6
)

(22.6
)
Distributions to noncontrolling interests

—

(0.7
)

(0.7
)
Balance at December 31, 2021

89.0

$
0.9

$
2,686.9

(13.8
)

$
(566.4
)

$
(2,237.0
)

$
(63.1
)

$
(178.7
)

$
13.8

$
(164.9
)

~~See accompanying Notes to Consolidated Financial Statements~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)~~

~~Note 1. Basis of Presentation and Summary of Significant Accounting Policies~~

~~Basis of Presentation~~ —The accompanying consolidated financial statements include the accounts of R. R. Donnelley & Sons Company and its subsidiaries (the “Company” or “RRD”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany transactions have been eliminated in consolidation.

~~Merger Agreement~~ —On December 14, 2021, we entered into a definitive merger agreement under which we agreed to be acquired by affiliates of Chatham Asset Management, LLC (“Chatham”), a leading private investment firm. Under the terms of the merger agreement, Chatham will acquire all of the outstanding shares of RRD common stock not already owned by Chatham, and RRD stockholders will receive $10.85 per share in cash for each share of RRD common stock. All regulatory approvals have been obtained and at a special meeting on February 23, 2022, RRD’s stockholders approved the proposed merger. The merger with Chatham is expected to close on February 25, 2022~~. Upon completion of the transaction, RRD’s shares will no longer trade on the New York Stock Exchange and RRD will become a private company.~~

In connection with the merger agreement, Chatham paid a $20 million termination fee that was due under the previous November 3 agreement and plan of Merger with Atlas River Parent Inc. (“Atlas”). In addition, we paid $12 million to Atlas that was due under the same previous merger agreement.

~~Nature of Operations~~ —RRD is a global, integrated communications provider enabling organizations to create, manage, deliver and optimize their multichannel marketing and business communications. We have a flexible and comprehensive portfolio of integrated communications solutions that allows our clients to engage audiences, reduce costs and drive revenues. Our innovative content management offering, production platform, supply chain management, outsourcing capabilities and customized consultative expertise assist our clients in the delivery of integrated messages across multiple media to highly targeted audiences at optimal times for clients in virtually every private and public sector.

~~Use of Estimates~~ —The preparation of consolidated financial statements, in conformity with GAAP, requires the extensive use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. Estimates are used when accounting for items and matters including, but not limited to, allowance for credit losses, inventory obsolescence, asset valuations and useful lives, employee benefits, self-insurance reserves, taxes, restructuring and other provisions and contingencies.

~~Foreign Operations~~ —Assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rates existing at the respective balance sheet dates. Income and expense items are translated at the average rates during the respective periods. Translation adjustments resulting from fluctuations in exchange rates are recorded as a separate component of other comprehensive income (loss) while transaction gains and losses are recorded in net income (loss). Deferred taxes are not provided on cumulative foreign currency translation adjustments when we expect foreign earnings to be permanently reinvested.

~~Fair Value Measurements —~~Certain assets and liabilities are required to be recorded at fair value on a recurring basis. Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. We record the fair value of our foreign currency contracts, interest rate swaps, pension plan assets and other postretirement benefits (“OPEB”) plan assets on a recurring basis. Assets measured at fair value on a nonrecurring basis include long-lived assets held and used, long-lived assets held for sale, goodwill and other intangible assets. The fair value of cash, cash equivalents, restricted cash, accounts receivable, short-term debt and accounts payable approximate their carrying values. The three-tier value hierarchy, which prioritizes valuation methodologies based on the reliability of the inputs, is:

~~Level 1~~ —~~Valuations based on quoted prices for identical assets and liabilities in active markets.~~

~~Level 2~~ —Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

~~Level 3~~ —~~Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.~~

~~Cash, Cash Equivalents and Restricted Cash~~

Cash and cash equivalents —We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Short-term securities consist of investment grade instruments of governments, financial institutions and corporations.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Restricted cash —Restricted cash primarily includes amounts related to letters of credit and bank acceptance drafts.~~

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows.

December 31,

2021

2020

Cash and cash equivalents
$
280.2

$
288.8

Restricted cash - current^(a)

40.1

62.6

Restricted cash - noncurrent^(b)

—

6.2

Total cash, cash equivalents and restricted cash
$
320.3

$
357.6

~~(a)~~

~~Included within Prepaid expenses and other current assets within the Consolidated Balance Sheets.~~

~~(b)~~

~~Included within Other noncurrent assets within the Consolidated Balance Sheets.~~

~~Receivables and Allowance for Credit Losses —~~Receivables are stated net of allowances for credit losses and primarily include trade receivables, notes receivable and miscellaneous receivables from suppliers. NaN single client comprised more than 10% of our consolidated net sales in 2021, 2020 or 2019. We recognize an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on credit losses expected to arise over the life of the asset’s contractual term, which includes consideration of prepayments. Assets are written off when we determine that such financial assets are deemed uncollectible and are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the necessary reserve at the balance sheet date. We pool financial assets based on similar risk characteristics to estimate expected credit losses. We estimate expected credit losses on financial assets individually when those assets do not share similar risk characteristics.

~~We have considered the current and expected economic and market conditions as a result of COVID-19 in determining credit loss expense for the period ended~~ ~~December 31,~~ ~~2021 and 2020.~~

Transactions affecting the allowance for credit losses for financial instruments during the years ended December 31, 2021 and 2020 were as follows. Recoveries were immaterial for the years ended December 31, 2021 and 2020.

2021

2020

Balance, beginning of year
$
15.9

$
14.3

Additional allowance recognized due to adoption of Topic ASC 326

—

0.3

Credit loss expense

(3.9
)

5.7

Write-offs and other

(3.3
)

(4.4
)

Balance, end of year
$
8.7

$
15.9

~~Inventories~~ —Inventories include material, labor and factory overhead and are stated at the lower of cost or market and net of excess and obsolescence reserves for raw materials and finished goods. Provisions for excess and obsolete inventories are made at differing rates, utilizing historical data and current economic trends, based upon the age and type of the inventory. Specific excess and obsolescence provisions are also made when a review of specific balances indicates that the inventories will not be utilized in production or sold. The cost of 37.5% and 36.6% of the inventories at December 31, 2021 and 2020, respectively, has been determined using the Last-In, First-Out (LIFO) method. This method is intended to reflect the effect of inventory replacement costs within results of operations; accordingly, charges to cost of sales generally reflect recent costs of material, labor and factory overhead. We use an external-index method of valuing LIFO inventories. The remaining inventories, primarily related to certain acquired and international operations, are valued using the First-In, First-Out or specific identification methods.

~~The components of inventories, net of excess and obsolescence reserves for raw materials and finished goods, at December 31, 2021 and 2020 were as follows:~~

2021

2020

Raw materials and manufacturing supplies
$
183.5

$
147.3

Work in process

77.6

64.8

Finished goods

116.0

107.9

LIFO reserve

(24.4
)

(17.9
)
Total
$
352.7

$
302.1

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Long-Lived Assets~~ —We assess potential impairments to our long-lived assets if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impaired asset is written down to its estimated fair value based upon the most recent information available. Estimated fair value is generally measured by discounting estimated future cash flows. Long-lived assets, other than goodwill and other intangible assets, which are held for sale, are recorded at the lower of the carrying value or the fair value less the estimated cost to sell.

~~Property, Plant and Equipment~~ —Property, plant and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. Useful lives range from 15 to 40 years for buildings, the lesser of 7 years or the lease term for leasehold improvements and generally from 3 to 15 years for machinery and equipment. Maintenance and repair costs are charged to expense as incurred. Major overhauls that extend the useful lives of existing assets are capitalized. When properties are retired or disposed, the costs and accumulated depreciation are eliminated and the resulting profit or loss is recognized in the results of operations.

~~The components of property, plant and equipment at December 31, 2021 and 2020 were as follows:~~

2021

2020

Land
$
35.5

$
38.2

Buildings

365.6

361.0

Machinery and equipment

1,674.6

1,703.1

2,075.7

2,102.3

Accumulated depreciation

(1,667.3
)

(1,663.5
)
Total
$
408.4

$
438.8

~~During the years ended December 31, 2021, 2020 and 2019, depreciation expense was $89.6 million, $100.8 million, and $115.5 million, respectively.~~

~~During the fourth quarter of 2017, we entered into an agreement to sell a printing facility in Shenzhen, China and transfer the related land use rights. As of December 31,~~ ~~2021, we have received deposits in accordance with the terms of the agreement of approximately $123.3 million~~ ~~which are recorded in other noncurrent liabilities on the Consolidated Balance Sheets. As of December 31,~~ ~~2021, the carrying cost of the building and land use rights is recorded in other noncurrent assets and is not material.~~ In accordance with the agreement, additional scheduled deposits are required to be paid to us with the final payment due in 2022. Gross proceeds from the sale are expected to be approximately $250.0 million, subject to changes in the exchange rate. If the buyer fails to comply with terms of the agreement or terminates for any reason, the Company is entitled to retain 30% of the purchase price as liquidated damages.

The buyer missed the required scheduled deposit payment in the third quarter of 2021. As a result, we are taking necessary actions to preserve our rights under the agreement, which may include terminating the agreement.

~~Goodwill~~ —Goodwill is reviewed for impairment annually as of October 31 or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying value.

In accordance to our policy and appropriate guidance, when certain conditions are met, we may perform a qualitative, rather than quantitative, assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In performing this qualitative analysis, we consider various factors, including the excess of prior year estimates of fair value compared to carrying value, the effect of market or industry changes and the reporting units’ actual results compared to projected results. Based on this qualitative analysis, if we determine that it is more likely than not that the fair value of the reporting unit is greater than its carrying value, no further impairment testing is performed.

If a quantitative test is necessary for any of our reporting units, we compare each reporting unit’s fair value, estimated based on comparable company market valuations and expected future discounted cash flows to be generated by the reporting unit, to its carrying value. In 2021, a quantitative assessment was not performed for any of our reporting units given the absence of impairment triggers.~~See Note 6,~~ ~~Goodwill and Other Intangible Assets, for further discussion.~~

~~Amortization~~ —Certain costs to acquire and develop internal-use computer software are capitalized and amortized over their estimated useful life using the straight-line method, up to a maximum of five years. Amortization expense, primarily related to internally-developed software and excluding amortization expense related to other intangible assets, was $22.0 million, $26.1 million and $29.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Deferred debt issuance costs are amortized over the term of the related debt. Other intangible assets are recognized separately from goodwill and are amortized over their estimated useful lives. See Note 6, ~~Goodwill and Other Intangible Assets, for further discussion of other intangible assets and the related amortization expense.~~

~~Financial Instruments~~ ~~—We use derivative financial instruments to hedge exposures to foreign exchange fluctuations in the ordinary course of business and to hedge the interest rate exposure on certain floating-rate debt.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

All derivatives are recorded as other current or noncurrent assets or other current or noncurrent liabilities on the balance sheet at their respective fair values with unrealized gains and losses recorded in other comprehensive income (loss), net of applicable income taxes, or in the results of operations, depending on the purpose for which the derivative is held. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in the results of operations. Changes in the fair value of derivatives that do not meet the criteria for designation as a hedge at inception, or fail to meet the criteria thereafter, are recognized currently in the results of operations. At inception of a hedge transaction, we formally document the hedge relationship and the risk management objective for undertaking the hedge. In addition, we assess, both at inception of the hedge and on an ongoing basis, whether the derivative in the hedging transaction has been highly effective in offsetting changes in fair value of the hedged item and whether the derivative is expected to continue to be highly effective. The impact of any ineffectiveness is recognized currently in the results of operations.

~~Our foreign currency contracts and interest rate swaps are subject to master netting agreements that allow us to settle positive and negative positions with the respective counterparties.~~Under these master netting agreements, net settlement generally permits us or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. See Note 12, ~~Derivatives, for additional information.~~

~~Share-Based Compensation~~ —We recognize share-based compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options, restricted stock units and performance share units. We recognize compensation expense for share-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value. See Note 15, ~~Stock and Incentive Programs for Employees and Directors, for further discussion.~~

~~Preferred Stock~~ —We have 2 million shares of $1.00 par value preferred stock authorized for issuance. The Board of Directors may divide the preferred stock into one or more series and fix the redemption, dividend, voting, conversion, sinking fund, liquidation and other rights. We have no present plans to issue any preferred stock. ~~We have reserved 0.2 million preferred stock shares for issuance under the Stockholder Rights Plan discussed in Note 16.~~

~~Pension and OPEB Plans~~ —We record annual income and expense amounts relating to our pension and OPEB plans based on calculations which include various actuarial assumptions, including discount rates, mortality, utilization rates of retiree health care accounts, assumed rates of return, compensation increases, turnover rates and healthcare cost trend rates. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so. The effect of modifications on the value of plan obligations and assets is recognized immediately within other comprehensive income (loss) and amortized into operating earnings over future periods. We believe that the assumptions utilized in recording our obligations under our plans are reasonable based on our experience, market conditions and input from our actuaries and investment advisors. See Note 9~~, Retirement Plans, for additional information.~~

~~Taxes on Income~~ —Deferred taxes are provided using an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

We recognize deferred tax liabilities related to taxes on certain foreign earnings that were not considered to be permanently reinvested. No deferred tax liabilities were recognized for foreign earnings that were considered to be permanently reinvested. We regularly evaluate whether foreign earnings are expected to be permanently reinvested. This evaluation requires judgment about our future operating and liquidity needs. Changes in economic and business conditions, foreign or U.S. tax laws, or our financial situation could result in changes to these judgments and the need to record additional tax liabilities.

We are regularly audited by foreign and domestic tax authorities. These audits occasionally result in proposed assessments where the ultimate resolution might result in us owing additional taxes, including in some cases, penalties and interest. We recognize a tax position in our financial statements when it is more likely than not (~~i.e.,~~ a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. This recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Although we believe that our estimates are reasonable, the final outcome of uncertain tax positions may be materially different from that which is reflected in our financial statements. We adjust such reserves upon changes in circumstances that would cause a change to the estimate of the ultimate liability, upon effective settlement or upon the expiration of the statute of limitations, in the period in which such event occurs. See Note 10, ~~Income Taxes, for further discussion.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Note2. 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.

~~Note 3. Dispositions~~

~~2019 Dispositions~~

On October 25, 2019, we completed the sale of substantially all of the Global Document Solutions (“GDS”) business for approximately $53.7 million. GDS primarily provided statements and print management services in Europe. The disposition resulted in a loss of $3.8 million during 2019, which was recorded in Other operating expense (income) in the Consolidated Statements of Operations.

~~On May~~ 8~~, 2019, we sold the R&D business within the Business Services segment for net proceeds of $11.6~~ ~~million. The disposition resulted in a gain of $6.1 million during 2019, which was recorded in Other operating expense (income) in the Consolidated Statements of Operations.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

On March 31, 2019, our subsidiary, RR Donnelley Editora e Grafica Ltda. (“RRD Brazil”), filed for bankruptcy liquidation in bankruptcy court in Brazil. The bankruptcy petition was approved by the court shortly thereafter and a bankruptcy trustee was appointed. As a result of the bankruptcy liquidation, we recorded a gain of $4.0 million in Other operating expense (income) during 2019, primarily reflecting the reclassification of cumulative currency translation adjustments into earnings and ongoing expenses associated with the bankruptcy proceedings. Subsequent to March 31, 2019, the operating results of RRD Brazil are no longer included in our consolidated results of operations except for legal fees associated with the bankruptcy proceedings. The operations of RRD Brazil had been included in the Business Services segment.

~~Note 4. Revenue Recognition~~

~~All revenue recognized in the Consolidated Statements of Operations is considered to be revenue from contracts with clients according to Subtopic 606.~~

~~Disaggregation of Revenue~~

~~The following table presents net sales disaggregated by products and services:~~

2021

2020

2019

Commercial print
$
1,535.5

$
1,357.7

$
1,694.5

Packaging

770.5

687.6

668.5

Direct marketing

534.4

555.4

676.7

Labels

532.9

496.6

497.4

Digital print and fulfillment

431.8

425.7

492.1

Statements

430.0

441.6

545.4

Supply chain management

279.7

329.9

298.7

Forms

195.3

202.4

244.3

Business process outsourcing

165.6

169.4

243.9

Digital and creative solutions

88.0

100.0

111.7

Total net sales
$
4,963.7

$
4,766.3

$
5,473.2

Revenue for commercial print, direct marketing, packaging, statements, labels, digital print and fulfillment, supply chain management and forms is primarily recognized at a point in time. We generally recognize revenue for these products upon the transfer of control of the products to the client which typically occurs upon transfer of title and risk of ownership, which is generally upon shipment to the client. For certain products, w~~e are able to recognize revenue for completed inventory billed but not yet shipped at the client’s direction.~~ Revenue for business process outsourcing and digital and creative solutions is recognized over time or at a point in time, depending on the nature of the service which could be either recurring or project-based.

~~The following is a description of our products and services:~~

~~Commercial Print~~

We generate revenue by providing various commercial printing products and offer a full range of branded materials including manuals, publications, brochures, business cards, flyers, post cards, posters and promotional items.

~~Packaging~~

~~We generate revenue by providing~~ ~~packaging solutions, ranging from rigid boxes to in-box print materials,~~ ~~for clients in healthcare and life sciences, consumer electronics, cosmetics and consumer packaged goods industries.~~

~~Direct Marketing~~

~~We generate revenue by providing~~ ~~audience segmentation, creative development, program testing, print production, postal optimization and performance analytics for large-scale personalized direct mail programs~~.

~~Labels~~

We generate revenue by producing custom labels for clients across multiple industries including warehouse and distribution, retail, pharmaceutical, manufacturing and consumer packaging. We offer distribution and shipping labels, healthcare and durable goods labels, promotional labels and consumer product goods packaging labels.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Digital Print and Fulfillment~~

~~We generate revenue by providing~~ ~~in-store marketing materials, including signage and point-of-purchase materials, as well as custom marketing kits that require multiple types of marketing collateral. Under the trade name Motif~~^TM~~, we also create custom photobooks~~.

~~Statements~~

We generate revenue by creating critical business communications, including customer billings, financial statements, healthcare communications and insurance documents. Our capabilities include design and composition, variable imaging, email, archival and digital mail interaction, as well as our innovative RRDigital solution set.

~~Supply Chain Management~~

We generate revenue by providing workflow design to assembly, configuration, kitting and fulfillment for clients in life sciences and healthcare, consumer electronics, telecommunications, cosmetics, education and industrial industries.

~~Forms~~

We generate revenue by producing a variety of forms including invoices, order forms and business forms that support both the private and public sectors for clients in financial, government, retail, healthcare and business services industries.

~~Business Process Outsourcing~~

We generate revenue by providing outsourcing services including creative services, research and analytics, financial management and other services for legal providers, insurance, telecommunications, utilities, retail and financial services companies.

~~Digital and Creative Solutions~~

~~We generate revenue by creating and managing content~~ ~~for delivery across multiple marketing communications channels including print and digital advertising, direct marketing and mail, packaging, sales collateral, in-store marketing and social media~~.

~~Variable Consideration~~

Certain clients may receive volume-based rebates or early payment discounts, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be earned by our clients and reduce revenue accordingly. We do not expect significant changes to estimates of variable consideration. Given the nature of our products and the history of returns, product returns are not significant.

~~Contract Balances~~

~~The following table provides information about contract assets and liabilities from contracts with clients:~~

Contract Liabilities

Short-Term

Balance at January 1, 2021
$
15.6

Balance at December 31, 2021

17.1

Contract liabilities primarily relate to client advances received prior to completion of performance obligations. Reductions in contract liabilities are a result of our completion of performance obligations. ~~Revenue recognized during the year ended December 31, 2021 from amounts included in contract liabilities at the beginning of the period was approximately $13.9 million.~~

~~Practical Expedients and Exemptions~~

~~As part of the adoption of Topic 606, we have elected practical expedients and exemptions allowable under the guidance.~~

We account for shipping and handling activities performed after the control of a good has been transferred to the client as a fulfillment cost. We accrue for the costs of shipping and handling activities if revenue is recognized before contractually agreed shipping and handling activities occur.

We apply Topic 606 to a portfolio of contracts (or performance obligations) with similar characteristics as we reasonably expect that the effects on the financial statements of applying this guidance to the portfolio would not differ significantly from applying this guidance to the individual contracts (or performance obligations) within that portfolio.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

When the output method for measure of progress is determined appropriate, we recognize revenue in the amount for which we have the right to invoice for revenue that is recognized over time and for which we can demonstrate that the invoiced amount corresponds directly with the value to the client for the performance completed to date.

We generally expense sales commissions and other costs to obtain a contract when incurred, because the amortization period would have been one year or less. These costs are recorded within Selling, general and administrative expenses.

~~We exclude sales taxes and other similar taxes from the measurement of the transaction price. We do not disclose the value of unsatisfied performance obligations, nor do we disclose the timing of revenue recognition~~ ~~for contracts with an original expected length of one year or less~~.

~~Note 5. Restructuring, Impairment and Other Charges~~

~~For the year ended December 31, 2021, we recorded the following net restructuring, impairment and other charges:~~

Employee
Terminations

Other Restructuring Charges

Impairment and Other

Multi-Employer Pension Plan Charges

Total

Business Services
$
5.3

$
7.8

$
(8.6
)

$
2.5

$
7.0

Marketing Solutions

0.3

5.9

0.9

0.4

7.5

Corporate

2.8

8.2

—

7.8

18.8

Total
$
8.4

$
21.9

$
(7.7
)

$
10.7

$
33.3

~~For the year ended December 31, 2021, we recorded restructuring charges of $8.4 million for employee termination costs.~~ ~~These charges primarily relate to announced facility closures and the reorganization of selling, general and administrative functions across each segment. We also incurred $21.9 million of~~ ~~other restructuring charges~~ ~~during the twelve months ended December 31, 2021,~~ ~~comprised of lease terminations and environmental costs~~ and $10.7 million of multi-employer pension plan (“MEPP”) withdrawal obligation charges, including $7.1 million to reflect the final apportionment of the LSC multi-employer pension plans between us and Donnelley Financial.

~~Additionally, we recorded net gains of $9.7 million on the sale of restructured facilities and equipment for the year ended December 31,~~ ~~2021~~.

~~For the year ended December 31, 2020, we recorded the following net restructuring, impairment and other charges:~~

Employee
Terminations

Other Restructuring Charges

Impairment and Other

Multi-Employer Pension Plan Charges

Total

Business Services
$
18.0

$
8.7

$
(7.8
)

$
2.5

$
21.4

Marketing Solutions

4.6

3.7

1.2

0.4

9.9

Corporate

10.2

21.4

—

37.1

68.7

Total
$
32.8

$
33.8

$
(6.6
)

$
40.0

$
100.0

For the year ended December 31, 2020, we recorded net restructuring charges of $32.8 million for employee termination costs. These charges primarily relate to the closure of the Chilean operations and other announced facility closures in the Business Services segment and the reorganization of selling, general and administrative functions across each segment. We also incurred other restructuring charges of $33.8 million, primarily comprised of consulting charges, lease terminations and other, and $40.0 million of MEPP charges during the twelve months ended December 31, 2020. The MEPP charges during the twelve months ended December 31, 2020 included $37.1 million representing our estimate of payments we believe we will be required to make with respect to LSC’s MEPP liabilities. Refer to Note 8~~, Commitment and Contingencies~~ ~~for further discussion.~~

~~Additionally, we recorded net gains of $11.8 million on the sale of restructured facilities and equipment for the year ended~~ ~~December 31, 2020~~.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~For the year ended December 31, 2019, we recorded the following net restructuring, impairment and other charges:~~

Employee
Terminations

Other Restructuring Charges

Impairment and Other

Multi-Employer Pension Plan Charges

Total

Business Services
$
20.1

$
7.4

$
(5.0
)

$
2.5

$
25.0

Marketing Solutions

0.5

0.1

—

0.4

1.0

Corporate

1.6

9.1

—

—

10.7

Total
$
22.2

$
16.6

$
(5.0
)

$
2.9

$
36.7

~~For the year ended December 31, 2019, we recorded net restructuring charges of $22.2 million for employee termination costs.~~ ~~These charges primarily relate to the relocation of a printing facility in Shenzhen, China, other announced facility closures in the Business Services segment, and~~ ~~the reorganization of selling, general and administrative functions across each segment.~~ ~~Other restructuring charges of $16.6 million for the year ended~~ ~~December 31, 2019~~ ~~are primarily comprised of environmental matters, lease terminations and other.~~

~~Additionally, we recorded a net gain of $5.7 million on the sale of restructured facilities and equipment.~~

~~Restructuring Reserve~~

~~The restructuring reserve as of December 31, 2021 and 2020, and changes during the year ended December 31, 2021, were as follows:~~

December 31, 2020

Restructuring and Other
Charges

Foreign
Exchange and
Other

Cash
Paid

December 31, 2021

Employee terminations
$
6.2

$
8.4

$
—

$
(9.3
)

$
5.3

MEPP withdrawal obligations

70.2

10.7

—

(31.9
)

49.0

Other

12.2

21.9

(0.4
)

(18.6
)

15.1

Total
$
88.6

$
41.0

$
(0.4
)

$
(59.8
)

$
69.4

The current portion of restructuring reserves of $25.6 million at December 31, 2021 was included in Accrued liabilities and other, while the long-term portion of $43.8 million, primarily related to MEPP withdrawal obligations, employee terminations in litigation, environmental reserves and lease termination costs, was included in Other noncurrent liabilities at December 31, 2021. ~~The liabilities for the withdrawal obligations associated with our decision to withdraw from all MEPPs included in Accrued liabilities and other and Other noncurrent liabilities are~~ ~~$7.6 million and $41.4 million, respectively, as of~~ ~~December 31, 2021~~. ~~See Note 9,~~ ~~Retirement Plans, and Note 8 –~~ ~~Commitment and Contingencies, for further discussion of MEPPs.~~

Payments on all of our MEPP withdrawal obligations are scheduled to be substantially completed by 2034. Changes based on uncertainties in these estimated withdrawal obligations could affect the ultimate charges related to MEPP withdrawals. See Note 9, ~~Retirement Plans, for further discussion on MEPPs.~~

The restructuring liabilities classified as “other” consisted of reserves for employee terminations in litigation, environmental matters and lease liabilities related to restructured facilities. Any potential recoveries or additional charges could affect amounts reported in our consolidated financial statements.

~~The restructuring reserve as of December 31, 2020 and 2019, and changes during the year ended December 31, 2020, were as follows:~~

December 31, 2019

Restructuring and Other
Charges

Foreign
Exchange and
Other

Cash
Paid

December 31, 2020

Employee terminations
$
3.5

$
32.8

$
—

$
(30.1
)

$
6.2

MEPP withdrawal obligations

40.5

40.0

—

(10.3
)

70.2

Other

8.5

33.8

1.4

(31.5
)

12.2

Total
$
52.5

$
106.6

$
1.4

$
(71.9
)

$
88.6

The current portion of restructuring reserves of $33.3 million at December 31, 2020 was included in Accrued liabilities and other, while the long-term portion of $55.3 million, primarily related to MEPP withdrawal obligations, employee terminations in litigation and lease termination costs, was included in Other noncurrent liabilities at December 31, 2020. The liabilities for the withdrawal obligations associated with our decision to withdraw from all MEPPs included in Accrued liabilities and other and Other noncurrent liabilities are $17.8 million and $52.4 million, respectively, as of December 31, 2020. Note 9, ~~Retirement Plans, for further discussion of MEPPs.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

Payments associated with the employee terminations reflected in the above table were substantially completed by December 2021, excluding employee terminations in litigation within the Business Services segment.

~~Note 6. Goodwill and Other Intangible Assets~~

~~The changes in the carrying amount of goodwill for the years ended December 31, 2021 and 2020 were as follows:~~

Business Services

Marketing Solutions

Total

Net book value as of January 1, 2020

Goodwill

2,059.1

519.5

2,578.6

Accumulated impairment losses

(1,920.0
)

(254.1
)

(2,174.1
)
Total
$
139.1

$
265.4

$
404.5

Foreign exchange and other adjustments

6.1

—

6.1

Net book value as of December 31, 2020

Goodwill

2,076.1

519.5

2,595.6

Accumulated impairment losses

(1,930.9
)

(254.1
)

(2,185.0
)
Total
$
145.2

$
265.4

$
410.6

Foreign exchange and other adjustments

(5.2
)

—

(5.2
)
Net book value as of December 31, 2021

Goodwill

2,064.2

519.5

2,583.7

Accumulated impairment losses

(1,924.2
)

(254.1
)

(2,178.3
)
Total
$
140.0

$
265.4

$
405.4

~~The components of other intangible assets at December 31, 2021 and 2020 were as follows:~~

December 31, 2021

December 31, 2020

Gross Carrying Amount

Accumulated Amortization

Net Book Value

Gross Carrying Amount

Accumulated Amortization

Net Book Value

Client relationships
$
411.0

$
(372.2
)

$
38.8

$
417.0

$
(361.1
)

$
55.9

Patents

2.0

(2.0
)

—

2.0

(2.0
)

—

Trademarks, licenses and agreements

23.2

(23.2
)

—

23.2

(23.2
)

—

Trade names

28.5

(17.5
)

11.0

29.1

(16.2
)

12.9

Total other intangible assets
$
464.7

$
(414.9
)

$
49.8

$
471.3

$
(402.5
)

$
68.8

~~Amortization expense for other intangible assets was $18.9 million, $19.3 million and $21.6 million for the years ended December 31, 2021, 2020 and 2019, respectively.~~

~~The following table outlines the estimated annual amortization expense related to other intangible assets as of December 31, 2021:~~

Amount

2022
$
18.7

2023

18.7

2024

2.9

2025

1.4

2026

1.2

2027 and thereafter

6.9

Total
$
49.8

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Note 7. Accrued Liabilities and Other~~

~~The components of accrued liabilities and other at December 31, 2021 and 2020 were as follows:~~

2021

2020

Employee-related liabilities
$
152.9

$
145.1

Deferred revenue

17.1

15.6

Restructuring liabilities and MEPP

25.6

33.3

Other

157.3

157.2

Total accrued liabilities and other
$
352.9

$
351.2

Employee-related liabilities consist primarily of payroll, sales commission, incentive compensation, employee benefit accruals and workers’ compensation. Incentive compensation accruals include amounts earned pursuant to our primary employee incentive compensation plans. Other accrued liabilities include miscellaneous operating accruals, other client-related liabilities, interest expense accruals and income and other tax liabilities.

~~Note 8. Commitments and Contingencies~~

We are subject to laws and regulations relating to the protection of the environment. We provide for expenses associated with environmental remediation obligations when such amounts are probable and can be reasonably estimated. Such accruals are adjusted as new information develops or circumstances change and are generally not discounted. We have been designated as a potentially responsible party or have received claims in 4 active federal and state Superfund and other multiparty remediation sites. In addition to these sites, we may also have the obligation to remediate 6 other previously and currently owned facilities. At the Superfund sites, the Comprehensive Environmental Response, Compensation and Liability Act provides that our liability could be joint and several, meaning that we could be required to pay an amount in excess of our proportionate share of the remediation costs.

Our understanding of the financial strength of other potentially responsible parties at the multiparty sites and of other liable parties at the previously owned facilities has been considered, where appropriate, in the determination of our estimated liability. We believe that our recorded reserves, recorded in Accrued liabilities and other and Other noncurrent liabilities, are adequate to cover our share of the potential costs of remediation at each of the multiparty sites and the previously and currently owned facilities. It is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that we may undertake in the future. However, in our opinion, compliance with the present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material effect on our consolidated results of operations, financial position or cash flows.

In April 2019, we received a subpoena from the SEC related to previous business dealings with the Brazilian Ministry of Education. The SEC and Department of Justice (“DOJ”) are investigating the matter, and we are cooperating as they conduct their investigations.

~~In addition, the Brazil authorities are also investigating the matter and~~ in June 2021 the Company learned that Brazil's Comptroller General of the Union ("CGU") issued an administrative enforcement notice with charges related to previous business dealings between an administrative body of the Brazilian Ministry of Education and the Company's former Brazilian subsidiary, RR Donnelley Editora e Gráfica (“RRD-Brazil”). The administrative enforcement notice forms the basis of an administrative proceeding against the former Brazilian subsidiary (which filed for bankruptcy liquidation in March 2019) and its immediate parent, RR Donnelley Holdings B.V. The Company also is named as a party in this proceeding. The administrative enforcement notice alleges that former employees of RRD-Brazil engaged in anticompetitive and other business misconduct in connection with services provided to the Ministry of Education. We are pursuing our defenses in this matter and analyzing potential courses of action with local legal counsel.

From time to time, our clients and others file voluntary petitions for reorganization under United States bankruptcy laws. In such cases, certain pre-petition payments received by us from these parties could be considered preference items and subject to return.

We also regularly investigate matters reported to our whistleblower hotline and are currently investigating matters in certain foreign locations. In addition, we may be party to litigation arising in the ordinary course of business.

While these matters are subject to inherent uncertainties, we believe that the final resolution of these preference items, investigations, and litigation will not have a material effect on our consolidated results of operations, financial position or cash flows.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Leases~~

We determine if an arrangement is a lease at inception. Operating leases are recorded in Operating lease assets, Short-term operating lease liabilities and Long-term operating lease liabilities on the Consolidated Balance Sheets. Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date. Operating lease assets also include any lease payments made and are reduced by any lease incentives received. Our lease terms may include options to extend or not terminate the lease when we are reasonably certain that we will exercise any such options. Leases with an expected term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the expected lease term.

Our most significant leases are real estate leases for plants, warehouses, storage facilities, offices and other facilities. For real estate leases, we elected the practical expedient permitted under Topic 842 to combine lease and non-lease components. As a result, non-lease components, such as common area maintenance charges, are accounted for as a single lease element. Our remaining operating leases are primarily comprised of leases of machinery and technology equipment. Finance leases are not material.

Certain of our operating lease agreements include variable payments that are passed-through by the landlord, such as insurance, taxes and common area maintenance, payments based on the usage of the asset and rental payments adjusted periodically for inflation. Pass-through charges, payments due to change in usage of the asset and payments due to changes in inflation are included within variable rent expense.

~~Our lease agreements do not contain material residual value guarantees, restrictions or covenants.~~

~~The components of lease expense for the year ended December 31, 2021 and 2020 were as follows:~~

Years Ended December 31,

2021

2020

Operating lease cost
$
84.8

$
89.3

Variable lease cost

31.9

32.7

Sublease income

(1.6
)

(1.7
)
Total lease cost
$
115.1

$
120.3

~~Short-term lease cost is not material for the year ended December 31, 2021 and 2020 respectively.~~

~~Supplemental cash flow information related to leases for the year ended December 31, 2021 and 2020 was as follows:~~

Years Ended December 31,

2021

2020

Cash paid for amounts included in the measurement of lease liabilities

Operating cash outflows
$
79.2

$
81.8

Right-of-use assets obtained in exchange for lease obligations

Operating leases
$
62.5

$
109.0

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~As of December 31, 2021, the future lease payments under operating leases were as follows:~~

Twelve Months Ended

2021

Year Ended December 31

Operating Leases

2022

$
72.5

2023

60.2

2024

40.4

2025

28.7

2026

20.9

2027 and thereafter

37.8

Total lease payments

260.5

Less: Amount representing interest

39.8

Present value of lease obligation

$
220.7

Weighted average remaining lease term

5.1 years

Weighted average discount rate

6.6
%

~~Contingencies related to LSC Communication, Inc. and Subsidiaries (“LSC”) and Donnelley Financial Solutions, Inc. (“Donnelley Financial”)~~

As a result of the spinoff of LSC Communications, Inc. and Subsidiaries (“LSC”) and Donnelley Financial Solutions, Inc. (“Donnelley Financial”) on October 1, 2016, we are contingently liable for obligations under various operating leases for office, warehouse and manufacturing locations of LSC and Donnelley Financial. In the event that LSC or Donnelley Financial, or any successor lessee, fail to make lease payments or fail to pay other obligations under these lease agreements, we may be required to satisfy those obligations to the lessor. Our exposure to these potential contingent liabilities decreases over time as LSC and Donnelley Financial pay monthly lease obligations and as the leases expire. As of ~~December 31, 2021~~ ~~these potential contingent obligations were $29.0 million and $1.2 million for LSC and Donnelley Financial, respectively.~~

On April 13, 2020, LSC announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. In September 2020, a third-party (the “Buyer”) purchased the assets and assumed certain obligations of LSC. Although the Buyer assumed the majority of LSC’s existing leases, we continue to be contingently liable for these leases until their termination or renewal.

In May and June 2020 we became aware that LSC failed to make required monthly contributions to certain of their multiemployer pension plans (“MEPP”). In accordance with laws and regulations governing multiemployer pension plans, we and Donnelley Financial, as former members of the control group, are contingently liable on a joint and several liability basis for LSC’s MEPP obligations. During the third quarter of 2020, we commenced negotiations with Donnelley Financial concerning how the obligation will be apportioned between the parties. As such, the parties agreed to enter into mediation, and then arbitration, after an agreement was not reached through the mediation process. The arbitration proceedings were concluded in the fourth quarter of 2021, with two-thirds of the LSC MEPP liabilities assigned to us and the remaining one-third assigned to Donnelley Financial.

During the year ended December 31, 2021, we recorded a $9.1 million expense within restructuring expense primarily representing the change in estimate resulting from the conclusion of the arbitration proceedings.

In 2021, we, and Donnelley Financial, commenced negotiations with each of the three MEPPs to settle the MEPP liabilities and, we successfully negotiated and executed settlements with two of the three plans. As of December 31, 2021 our remaining liability related to the unsettled plan was $15.6 million. Scheduled payments to the remaining plan are scheduled to conclude on December 1, 2033.

Cash payments made by us during the twelve months ended December 31, 2021 for the LSC MEPP and other obligations were $31.1 million, including $18.4 million related to the settlement of the two MEPP plans and $7.1 million paid to Donnelley Financial as a result of the arbitration decision.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Cybersecurity Attack~~

~~Note 9. Retirement Plans~~

We sponsor various defined benefit retirement income pension plans in the U.S., U.K., Canada and certain other international locations, including both funded and unfunded arrangements. Our primary defined benefit plans are frozen. No new employees will be permitted to enter our frozen plans and participants will earn no additional benefits. Benefits are generally based upon years of service and compensation. These defined benefit retirement income plans are funded in conformity with the applicable government regulations. We fund at least the minimum amount required for all funded plans using actuarial cost methods and assumptions acceptable under government regulations.

~~We made contributions of $5.0 million to our pension plans during the year ended December 31, 2021. We expect to make cash contributions of approximately $4.3 million to our pension plans in 2022.~~

~~In addition to the pension plans, we sponsor a 401(k) savings plan, which is a defined contribution retirement income plan.~~

Certain former employees are entitled to healthcare and life insurance benefits provided they have met certain eligibility requirements. Generally, these former employees became eligible for these retiree healthcare benefits if they met all of the following requirements at the time of termination: (a) attained at least 55 or more points (full years of service and age combined), (b) were at least fifty years of age, (c) had at least two years of continuous, regular, full-time, benefits-eligible service and (d) completed at least two or more years of continuous service with a participating employer, which ended on their termination date. Different requirements need to be met in order to receive subsidized medical and life insurance coverage. This plan was frozen in 2016. Certain of the plan expenses are paid through a tax-exempt trust. Most of the assets of the trust are invested in trust-owned life insurance policies covering certain current and former employees of ours. The underlying assets of the policies are invested primarily in marketable equity, corporate fixed income and government securities.

We operate a prescription drug program for certain Medicare-eligible retirees under a group-based Company-sponsored Medicare Part D program, or Employer Group Waiver Program (“EGWP”). The EGWP subsidies provided to or for the benefit of this program are used to reduce our net retiree medical and prescription drug costs on a group by group basis until such net costs of ours for such group are eliminated, and any EGWP subsidies received in excess of the amount necessary to offset such net costs are used to reduce the included group of retirees’ premiums.

We also maintain several pension and OPEB plans in certain international locations. The expected returns on plan assets and discount rates for these plans are determined based on each plan’s investment approach, local interest rates and plan participant profiles.

~~The pension and OPEB plan obligations are calculated using generally accepted actuarial methods and are measured as of December 31.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~The components of the net periodic benefit expense, (income) and total (income) were as follows:~~

Pension Benefits

OPEB

2021

2020

2019

2021

2020

2019

Service cost
$
1.2

$
1.0

$
1.0

$
0

$
0

$
0

Interest cost

20.4

27.4

33.3

$
4.2

7.3

10.1

Expected return on plan assets

(38.2
)

(40.8
)

(46.3
)

(11.9
)

(12.6
)

(13.2
)
Amortization of prior service credit

0.1

0.1

—

(5.5
)

(5.4
)

(5.4
)
Amortization of actuarial loss (gain)

11.5

10.0

6.1

(0.7
)

(0.7
)

(1.7
)
Settlements and curtailments

0.4

1.4

(0.1
)

—

—

—

Net periodic income
$
(4.6
)

$
(0.9
)

$
(6.0
)

$
(13.9
)

$
(11.4
)

$
(10.2
)

Weighted average assumption used to calculate net periodic benefit expense:

Discount rate

2.4
%

3.0
%

4.0
%

2.2
%

3.0
%

4.2
%
Expected return on plan assets

4.0
%

4.6
%

5.2
%

5.8
%

6.3
%

6.5
%

Pension Benefits

OPEB

2021

2020

2021

2020

Benefit obligation at beginning of year
$
1,138.0

$
1,060.7

$
293.4

$
289.8

Service cost

1.2

1.0

0

0

Interest cost

20.4

27.4

4.2

7.3

Plan participants' contributions

0

0

6.2

7.8

Medicare reimbursements

0

0

7.2

7.9

Actuarial (gain) loss

(31.8
)

86.0

(70.6
)

8.1

Plan amendments and other

2.6

0.1

0

0

Settlements

(2.9
)

(6.6
)

0

0

Foreign currency translation

(2.0
)

15.0

0

0

Benefits paid

(47.6
)

(45.6
)

(25.9
)

(27.5
)
Benefit obligation at end of year
$
1,077.9

$
1,138.0

$
214.5

$
293.4

Fair value of plan assets at beginning of year
$
1,090.2

$
985.6

$
237.2

$
227.7

Actual return on assets

44.8

132.1

22.9

21.0

Settlements

(2.9
)

(6.6
)

0

0

Employer contributions

5.0

9.2

0

7.2

Company reimbursements

0

0

0

(6.9
)
Medicare reimbursements

0

0

7.2

7.9

Plan participants' contributions

0

0

6.2

7.8

Foreign currency translation

(2.6
)

15.5

0

0

Benefits paid

(47.6
)

(45.6
)

(25.9
)

(27.5
)
Fair value of plan assets at end of year
$
1,086.9

$
1,090.2

$
247.6

$
237.2

Total net pension and OPEB asset (liability) recognized as of December 31
$
9.0

$
(47.8
)

$
33.1

$
(56.2
)

~~The accumulated benefit obligation for all defined benefit pension plans was $1,068.6 million and $1,126.2~~ ~~million at December 31, 2021 and 2020, respectively.~~

Actuarial gains and losses result from changes in actuarial assumptions, such as changes in the discount rate and revised mortality rates. Actuarial gains in 2021 primarily relate to an increase in discount rates, and for the OPEB plan, to changes in assumptions concerning the expected usage of certain benefits within the U.S plan to more closely align with historical usage. Actuarial losses in 2020 related primarily to a reduction in discount rates.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Amounts recognized in the Consolidated Balance Sheets as of December 31, 2021 and 2020 were as follows:~~

Pension Benefits

OPEB

2021

2020

2021

2020

Prepaid pension cost (included in other noncurrent assets)
$
73.9

$
44.2

$
0

$
0

Prepaid OPEB cost (included in other noncurrent assets)

0

0

33.1

0

Accrued benefit cost (included in accrued liabilities)

(2.4
)

(2.5
)

0

(0.4
)
Pension liabilities

(62.5
)

(89.5
)

0

0

OPEB plan liabilities

0

0

0

(55.8
)
Net liabilities recognized in the Consolidated Balance Sheets
$
9.0

$
(47.8
)

$
33.1

$
(56.2
)

~~The amounts included in accumulated other comprehensive loss in the Consolidated Balance Sheets, excluding tax effects, at December 31, 2021 and 2020 were as follows:~~

Pension Benefits

OPEB

2021

2020

2021

2020

Accumulated other comprehensive (loss) income

Net actuarial (loss) gain
$
(262.3
)

$
(312.3
)

$
112.0

$
31.1

Net prior service credit

(5.3
)

(2.9
)

41.7

47.2

Total
$
(267.6
)

$
(315.2
)

$
153.7

$
78.3

~~The pre-tax amounts recognized in other comprehensive income in 2021 as components of net periodic benefit costs were as follows:~~

Pension
Benefits

OPEB

Amortization of:

Net actuarial loss (gain)
$
11.5

$
(0.7
)
Net prior service credit

0.1

(5.5
)
Amounts arising during the period:

Net actuarial loss

38.5

81.7

Net prior service credit

(2.6
)

0

Settlements

0.4

0

Foreign currency loss

(0.3
)

(0.1
)
Total
$
47.6

$
75.4

Actuarial gains and losses in excess of 10.0% of the greater of the projected benefit obligation or the market-related value of plan assets were recognized as a component of net periodic benefit costs over the average remaining service period of a plan’s active employees. As a result of the plan freezes, the actuarial gains and losses are recognized as a component of net periodic benefit costs over the average remaining life of a plan’s active employees. Unrecognized prior service costs or credits are also recognized as a component of net periodic benefit cost over the average remaining service period of a plan’s active employees. ~~For plans that are frozen or primarily inactive, unrecognized prior service costs or credits are recognized over the average life expectancy of the plan’s participants.~~

~~The weighted average assumptions used to determine the benefit obligation at the measurement date were as follows:~~

Pension Benefits

OPEB

2021

2020

2021

2020

Discount rate

2.7
%

2.4
%

2.7
%

2.2
%
Health care cost trend:

Current

Pre-Age 65

—

—

5.0
%

6.2
%
Post-Age 65

—

—

5.0
%

6.2
%
Ultimate

—

—

4.0
%

4.5
%
Interest crediting rate for cash balance plans

2.3
%

2.4
%

—

—

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~The following table provides a summary of under-funded or unfunded pension benefit plans with projected benefit obligations in excess of plan assets as of December 31, 2021 and 2020:~~

Pension Benefits

2021

2020

Projected benefit obligation
$
215.0

$
872.0

Fair value of plan assets

150.1

780.0

~~The following table provides a summary of pension plans with accumulated benefit obligations in excess of plan assets as of December 31, 2021 and 2020:~~

Pension Benefits

2021

2020

Accumulated benefit obligation
$
205.6

$
860.1

Fair value of plan assets

150.1

780.0

We determine our assumption for the discount rate to be used for purposes of computing interest costs based on an index of high-quality corporate bond yields and matched-funding yield curve analysis as of the measurement date.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 included a prescription drug benefit under Medicare Part D, as well as a federal subsidy that began in 2006, to sponsors of retiree health care plans that provide a benefit that is at least actuarially equivalent, as defined in the Act, to Medicare Part D. Two of our retiree health care plans were at least actuarially equivalent to Medicare Part D and were eligible for the federal subsidy. During the years ended December 31, 2021 and 2020, Medicare Part D subsidies received by us were negligible.

~~During the year ended December 31, 2021 and 2020, we received approximately $7.2 million and $7.9 million in EGWP subsidies, respectively.~~

~~Benefit payments are expected to be paid as follows:~~

Pension
Benefits

OPEB-Gross

Estimated Subsidy
Reimbursements

2022

49.0

$
19.1

$
0.9

2023

49.9

18.7

0.9

2024

51.4

18.1

0.9

2025

52.1

17.4

0.9

2026

52.9

16.7

0.8

2027-2031

273.8

73.6

3.7

~~Plan Assets~~

Our U.S. pension plans are frozen and we utilize a risk management approach for our U.S. pension plan assets. The overall investment objective of this approach is to further reduce the risk of significant decreases in the plan’s funded status by allocating a larger portion of the plan’s assets to investments expected to hedge the impact of interest rate risks on the plan’s obligation. Over time, the target asset allocation percentage for the pension plan is expected to decrease for equity and other “return seeking” investments and increase for fixed income and other “hedging” investments. The assumed long-term rate of return for plan assets, which is determined annually, is likely to decrease as the asset allocation shifts over time. The expected long-term rate of return for plan assets is based upon many factors including asset allocations, historical asset returns, current and expected future market conditions, risk and active management premiums. The target asset allocation percentage as of December 31, 2021, for the primary U.S. pension plan was approximately 15% for return seeking investments and approximately 85% for hedging investments.

We segregated our plan assets by the following major categories and levels for determining their fair value as of December 31, 2021 and 2020. All plan assets that are valued using the net asset value per share (“NAV”) practical expedient have not been included within the fair value hierarchy but are separately disclosed.

~~Cash and cash equivalents—~~ Carrying value approximates fair value. As such, these assets were classified as Level 1. We also invest in certain short-term investments which are valued at their unit value per share available to eligible participants at the measurement date. As such, these assets were classified as Level 2.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Equity—~~ The values of individual equity securities were based on quoted prices in active markets. As such, these assets are classified as Level 1. Additionally, this category includes underlying securities in trust owned life insurance policies which are invested in certain equity securities. These investments are not quoted on active markets; therefore, they are classified as Level 2. Additionally, we invest in certain equity funds that are valued at calculated NAV.

~~Fixed income—~~ The values of certain fixed income securities were based on quoted prices in active markets. As such, these assets are classified as Level 1. The remaining fixed income securities are typically priced based on a valuation model rather than a last trade basis and are not exchange-traded. These valuation models involve utilizing dealer quotes, analyzing market information, estimating prepayment speeds and evaluating underlying collateral to equate an NAV. Accordingly, we classified these fixed income securities as Level 2. We also invest in certain fixed income funds and securities in trust owned life insurance policies which are valued at NAV and included as Level 2.

~~Real estate—The fair market value of real estate investment trusts is based on NAV.~~

For Level 2 plan assets, as applicable, we review significant investments on a quarterly basis including investigation of unusual fluctuations in price or returns and obtaining an understanding of the pricing methodology to assess the reliability of third-party pricing estimates.

The valuation methodologies described above may generate a fair value calculation that may not be indicative of net realizable value or future fair values. While we believe the valuation methodologies used are appropriate, the use of different methodologies or assumptions in calculating fair value could result in different amounts. We invest in various assets in which valuation is determined by NAV. We believe that the NAV is representative of fair value at the reporting date, as there are no significant restrictions on redemption of these investments or other reasons to indicate that the investment would be redeemed at an amount different than the NAV.

~~The fair values of our pension plan assets at December 31, 2021 and 2020, by asset category were as follows:~~

December 31, 2021

December 31, 2020

Asset Category
Total

Level 1

Level 2

Total

Level 1

Level 2

Cash and cash equivalents
$
17.2

$
10.2

$
7.0

$
18.9

$
12.5

$
6.4

Equity

13.3

13.2

0.1

52.1

52.0

0.1

Fixed income

607.4

196.2

411.2

446.6

232.2

214.4

Other

14.5

0.2

14.3

10.9

0.2

10.7

Subtotal
$
652.4

$
219.8

$
432.6

$
528.5

$
296.9

$
231.6

Plan assets measured at NAV

Equity funds
$
243.2

$
372.6

Fixed income

157.9

145.5

Hedge funds and other

19.7

30.4

Real estate

13.7

13.2

Total plan assets measured at NAV
$
434.5

$
561.7

Total
$
1,086.9

$
1,090.2

~~The fair values of our OPEB plan assets at December 31, 2021 and 2020, by asset category were as follows:~~

December 31, 2021

December 31, 2020

Asset Category
Total

Level 1

Level 2

Total

Level 1

Level 2

Cash and cash equivalents
$
54.2

$
—

$
54.2

$
37.0

$
—

$
37.0

Fixed income

31.2

—

31.2

31.3

—

31.3

Other

—

—

—

1.4

1.4

—

Subtotal
$
85.4

$
—

$
85.4

$
69.7

$
1.4

$
68.3

Investments measured at NAV

Equity funds
$
159.6

$
164.9

Fixed income funds

2.6

2.6

Total investments measured at NAV
$
162.2

$
167.5

Total
$
247.6

$
237.2

~~Employee 401(k) Savings Plan~~ — For the benefit of most of our U.S. employees, we maintain a defined contribution retirement savings plan that is intended to be qualified under Section 401(a) of the Internal Revenue Code. Under this plan, employees may contribute a percentage of eligible compensation on both a before-tax and after-tax basis. We may provide a 401(k) discretionary match to participants, but did not during the years ended December 31, 2021, 2020 and 2019.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~MEPPs~~ — MEPPs receive contributions from two or more unrelated employers pursuant to one or more collective bargaining agreements and the assets contributed by one employer may be used to fund the benefits of all employees covered within the plan. The risk and level of uncertainty related to participating in these MEPPs differs significantly from the risk associated with the Company-sponsored defined benefit plans. For example, investment decisions are made by parties unrelated to us and the financial stability of other employers participating in a plan may affect our obligations under the plan.

During each of the years ended December 31, 2021, 2020 and 2019, we recorded $10.7 million, $40.0 million and $2.9 million for MEPP withdrawal obligations, respectively. These charges were recorded as net restructuring, impairment and other charges and represent our best estimate of the expected settlement of these withdrawal liabilities. Total contributions to these plans for the years ended December 31, 2021 and 2020 were $31.9 million and $10.3 million, respectively. See Note 5, ~~Restructuring, Impairment and Other Charges, for further discussion on MEPP.~~

~~Note 10. Income Taxes~~

~~The components of income (loss) before income taxes for the years ended December 31, 2021, 2020 and 2019 were as follows:~~

2021

2020

2019

U.S.
$
(75.8
)

$
(123.8
)

$
(65.1
)
Foreign

124.5

107.9

115.7

Total
$
48.7

$
(15.9
)

$
50.6

~~The components of income tax expense for the years ended December 31, 2021, 2020 and 2019 were as follows:~~

2021

2020

2019

U.S. Federal:

Current
$
6.5

$
(4.8
)

$
7.7

Deferred

7.0

(5.3
)

6.3

State:

Current

(2.3
)

(0.7
)

0.4

Deferred

2.4

(5.2
)

7.6

Foreign:

Current

27.8

27.3

24.4

Deferred

3.5

(1.3
)

8.5

Total
$
44.9

$
10.0

$
54.9

~~The following is a reconciliation of income tax expense at the U.S. federal statutory tax rate for the years ended December 31, 2021, 2020 and 2019:~~

2021

2020

2019

Income taxes at the U.S. federal statutory tax rate
$
10.3

$
(3.3
)

$
10.6

Change in valuation allowances

(3.2
)

(3.7
)

8.1

Interest limitation valuation allowance

18.8

(8.0
)

27.8

State and local income taxes, net of U.S. federal income tax benefit

5.5

4.7

(7.3
)
Foreign tax

2.9

(2.1
)

5.1

Adjustment of uncertain tax positions and interest

(5.6
)

1.1

(0.6
)
Foreign tax rate differential

(0.3
)

(0.8
)

(0.5
)
Tax impact of net gain on sale of Donnelley Financial and LSC shares

—

—

0.5

Global intangible low-taxed income

5.0

3.5

5.2

Corporate owned life insurance policies

—

17.3

—

Non-deductible compensation
9.1

—

—

Other

2.4

1.3

6.0

Total
$
44.9

$
10.0

$
54.9

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Deferred income taxes~~

~~The significant deferred tax assets and liabilities at December 31, 2021 and 2020 were as follows:~~

2021

2020

Deferred tax assets:

Pension and OPEB plan liabilities
$
—

$
29.1

Net operating losses and other tax carryforwards

189.5

195.6

Interest limitation carryforward

38.6

21.4

Accrued liabilities

37.7

48.6

Foreign depreciation

8.2

19.4

Operating lease liabilities

55.9

59.4

Other

14.1

16.7

Total deferred tax assets

344.0

390.2

Valuation allowances

(200.7
)

(195.7
)
Net deferred tax assets
$
143.3

$
194.5

Deferred tax liabilities:

Accelerated depreciation
$
(36.3
)

$
(50.0
)
Other intangible assets

(6.4
)

(8.1
)
Inventories

(10.4
)

(8.6
)
Operating lease assets

(54.6
)

(58.1
)
Pension and OPEB plan liabilities

(10.3
)

—

Other

(8.3
)

(5.7
)
Total deferred tax liabilities

(126.3
)

(130.5
)

Total net deferred tax assets
$
17.0

$
64.0

~~Transactions affecting the valuation allowances on deferred tax assets during the years ended December 31, 2021, 2020 and 2019 were as follows:~~

2021

2020

2019

Balance, beginning of year
$
195.7

$
237.5

$
255.9

Current year expense-net

13.3

(44.8
)

34.5

Write-offs

—

—

(50.1
)
Foreign exchange and other

(8.3
)

3.0

(2.8
)
Balance, end of year
$
200.7

$
195.7

$
237.5

As of December 31, 2021, we had domestic and foreign net operating loss and other tax credit carryforwards of approximately $120.5 million and $69.0 million ($126.8 million and $68.8 million, respectively, at December 31, 2020), of which $110.0 million expires between 2022 and 2031. Limitations on the utilization of these deferred tax assets may apply therefore we have provided valuation allowances of $162.1 million on these deferred tax assets as of December 31, 2021 ($174.4 million at December 31, 2020).

We are not permanently reinvested on certain foreign earnings yet remain permanently reinvested on all other foreign earnings and other outside basis differences. We have recognized deferred tax liabilities of $5.0 million, $4.5 million and $6.7 million as of December 31, 2021, 2020 and 2019, respectively, related to local taxes on certain foreign earnings which are not considered to be permanently reinvested.

Cash payments for income taxes were $43.0 million, $68.7 million and $73.1 million during the years ended December 31, 2021, 2020 and 2019, respectively. Cash refunds for income taxes were $3.8 million, $7.2 million and $12.1 million during the years ended December 31, 2021, 2020 and 2019, respectively.

~~Our income taxes payable for federal and state purposes has been reduced by the tax benefits associated with the vesting of stock based compensation awards.~~

As a result of the Tax Cuts and Jobs Act of 2017, in our 2017 (and adjusted in 2018) results of operations, a one-time transition tax on foreign earnings was recorded and such liability is payable over a period of eight years. The long-term income tax liability is $60.3 million and $68.3 million at December 31, 2021 and 2020, respectively.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~See Note 14,~~ ~~Other Comprehensive Loss, for details of the income tax expense or benefit allocated to each component of other comprehensive loss.~~

~~Uncertain tax positions~~

~~Changes in unrecognized tax benefits at December 31, 2021, 2020 and 2019 were as follows:~~

2021

2020

2019

Balance at beginning of year
$
20.7

$
23.1

$
25.0

Additions for tax positions of the current year

—

—

0.1

Additions for tax positions of prior years

—

4.1

—

Reductions for tax positions of prior years

—

(2.1
)

—

Settlements during the year

(3.9
)

(2.9
)

(0.4
)
Lapses of applicable statutes of limitations

(2.8
)

(1.5
)

(1.6
)
Balance at end of year
$
14.0

$
20.7

$
23.1

As of December 31, 2021, 2020 and 2019, we had $14.0 million, $20.7 million and $23.1 million, respectively, of unrecognized tax benefits. Unrecognized tax benefits of $6.0 million as of December 31, 2021, if recognized, would decrease income taxes.

As of December 31, 2021, it is reasonably possible that the total amount of unrecognized tax benefits will decrease within twelve months by as much as $6.9 million due to the resolution of audits or expirations of statutes of limitations related to U.S. federal, state and international tax positions.

We classify interest expense and any related penalties related to income tax uncertainties as a component of income tax expense. The total interest (benefit) expense related to tax uncertainties recognized in the Consolidated Statements of Operations were insignificant for the years ended December 31, 2021, 2020 and 2019, respectively. There were 0 benefits from the reversal of accrued penalties for the years ended December 31, 2021, 2019 and 2019. Accrued interest of $2.1 million and $3.7 million related to income tax uncertainties are reported in Other noncurrent liabilities in the Consolidated Balance Sheets at December 31, 2021 and 2020, respectively. There were 0 accrued penalties related to income tax uncertainties for the years ended December 31, 2021 and 2020.

~~We have tax years from 2010 and thereafter that remain open and subject to examination by the IRS, certain state taxing authorities or certain foreign tax jurisdictions.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Note 11. Debt~~

~~Debt at December 31, 2021 and 2020 consisted of the following:~~

2021

2020

Borrowings under the ABL Credit Facility
$
32.0

$
—

8.875% debentures due April 15, 2021

—

55.6

7.000% notes due February 15, 2022

—

79.3

6.500% notes due November 15, 2023

75.0

75.0

Term Loan due January 15, 2024 ^(a)

149.4

535.8

6.000% notes due April 1, 2024

61.7

61.7

6.125% notes due November 1, 2026

451.0

—

8.250% notes due July 1, 2027

245.8

245.8

6.625% debentures due April 15, 2029

103.4

103.4

8.500% notes due April 15, 2029

303.5

301.6

8.820% debentures due April 15, 2031

54.5

54.5

Unamortized debt issuance costs

(10.0
)

(9.6
)
Total debt

1,466.3

1,503.1

Less: current portion

61.1

Long-term debt
$
1,466.3

$
1,442.0

~~(a)~~

~~As of December 31, 2021 and 2020, the interest rate on the Term Loan due January 15, 2024 was 5.10% and 5.15%, respectively.~~

The fair values of the senior notes and debentures, which were determined using the market approach based upon quoted prices or interest rates available to us for debt obligations with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. The fair value of our total debt was greater than its book value by approximately $339.8 million and $142.9 million at December 31, 2021 and 2020, respectively.

On December 15, 2021, we redeemed the remaining $79.3 million aggregate principal outstanding of the 7.00% notes due 2022 (the “2022 Notes”) using borrowings under our ABL Credit Facility. The redemption price included a premium of $0.8 million.

On April 28, 2021, we completed an offering of $400.0 million aggregate principal amount of 6.125% senior secured notes due 2026 (the “Secured Notes”) at par. On May 10, 2021, we completed an additional $50.0 million offering of the Secured Notes that were issued at a $1.1 million premium, increasing the aggregate principal amount of the Secured Notes to $450.0 million. The Secured Notes are general senior secured obligations of the Company and are guaranteed by our domestic, wholly-owned subsidiaries that are guarantors of the ABL Credit Facility and Term Loan (the “Guarantors”). Interest on the Secured Notes is payable semi-annually on May 1 and November 1 of each year, commencing on November 1, 2021. The Secured Notes mature on November 1, 2026. The proceeds from the offerings of the Secured Notes were used to repay $387.6 million of principal outstanding under our Term Loan and to reduce the outstanding balance under our senior secured asset-based revolving credit facility (the “ABL Credit Facility”), including the amount borrowed for repayment of the $55.6 million principal outstanding of the 8.875% Debentures that matured on April 15, 2021.

On April 16, 2021, we amended our ABL Credit Facility to, among other things, extend the maturity date from September 29, 2022 to April 16, 2026 and reduce the aggregate commitments from $800.0 million to $650.0 million.

~~During the year ended December 31, 2020, we~~ executed various transactions that reduced our near-term maturities and extended our debt maturity profile. During this period, we repurchased on the open market $98.5 million aggregate principal of debt maturing in 2020, 2021, and 2022, including $1.3 million of the 7.625% notes due 2020 (the “2020 Notes”), $67.6 million aggregate principal of 7.875% notes due 2021 (the “2021 Notes”), $1.3 million aggregate principal of the 8.875% debentures due 2021 (the “2021 Debentures”), and $28.3 million aggregate principal of the 2022 Notes using available cash. These repurchases included a cumulative premium of $0.9 million.

On December 4, 2020, we redeemed the remaining $83.3 million aggregate principal outstanding of the 2021 Notes using a combination of available cash and a borrowing under our ABL Credit Facility. The redemption price included a premium of $1.7 million.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

On June 18, 2020, we completed a public exchange transaction in which we exchanged $246.2 million aggregate principal amount of the Company’s debt held by various investors maturing between 2021 and 2024 (the “Old Debt”) for $244.9 million aggregate principal amount of newly issued unsecured 8.25% notes due 2027 (the “New 2027 Notes”). The Old Debt that was exchanged consisted of $16.4 million of the 2021 Notes; $3.3 million of the 2021 Debentures; $25.8 million of the 2022 Notes; $161.6 million of the 6.500% notes due 2023 (the “2023 Notes”); and $39.1 million of the 6.000% of notes due 2024 (the “2024 Notes”). Other than the interest rate, the terms of the New 2027 Notes are substantially similar to the terms of the Old Debt. We treated the transaction as a debt modification, which resulted in a premium on the New 2027 Notes of approximately $1.0 million.

In March 2020, we entered into privately negotiated agreements with the largest holder of our outstanding notes (the “Holder”) to extend a significant portion of the Company’s 2023 and 2024 maturities. The agreements included the exchange of $277.0 million aggregate principal amount of notes owned by the Holder, consisting of $54.0 million of the 2023 Notes, $177.4 million of the 2024 Notes, and $45.6 million of the 6.625% debentures due 2029 (the “2029 Debentures”) for $297.0 million aggregate principal amount of newly issued unsecured 8.50% notes due 2029 (the “New 2029 Notes”). Other than the interest rate, the terms of the New 2029 Notes are substantially similar to the terms of the 2029 Debentures. We treated the transaction as a debt modification, which resulted in a discount on the New 2029 Notes of approximately $20 million, inclusive of approximately $0.3 million of fees paid to the Holder. The exchange was executed in a series of transactions that were completed on April 8, 2020. The agreements also included the repurchase of $6.6 million of the 2022 Notes and $20.0 million of the 2024 Notes. These repurchases were completed in March and were funded with a draw from our ABL Credit Facility. We recorded a gain of $0.2 million on these repurchases.

In May 2020, we entered into an additional agreement with the Holder in which the Holder agreed to exchange approximately $9.0 million aggregate principal amount of the 2029 Debentures and $14.5 million aggregate principal amount of 8.820% Debentures due 2031 for approximately $21.2 million aggregate principal amount of New 2029 Notes. This transaction was completed on June 19, 2020. We treated the transaction as a debt modification, which resulted in a premium on the New 2029 Notes of approximately $2.1 million, inclusive of $0.2 million of fees paid to the Holder.

During the year ended December 31, 2019, we repurchased on the open market $23.4 million and $20.7 million in aggregate principal amount of the 2021 Notes and 2021 Debentures, respectively. We recorded a loss on debt extinguishment of $0.8 million in 2019 on these repurchases.

The amount available to be borrowed under the ABL Credit Facility is equal to the lesser of (a) $650.0 million and (b) a borrowing base formula based on the amount of accounts receivable, inventory, machinery, equipment and, if we were to so elect in the future subject to the satisfaction of certain conditions, fee-owned real estate of ours and our material domestic subsidiaries, subject to certain eligibility criteria and advance rates (collectively, the “Borrowing Base”). The aggregate amount of real estate, machinery and equipment that can be included in the Borrowing Base formula cannot exceed $175.0 million.

Borrowings under the ABL Credit Facility bear interest at a rate dependent on the average quarterly availability and is calculated according to a base rate (except in certain circumstances, based on the prime rate) or a Eurocurrency rate (except in certain circumstances, based on LIBOR) plus an applicable margin. The applicable margin for base rate loans ranges from 0.25% to 0.75% and the applicable margin for Eurocurrency loans ranges from 1.25% to 1.75%. In addition, a fee is payable quarterly on the unused portion of the total commitments. This fee accrues at a rate of either 0.25% or 0.375% depending upon the average usage of the facility. Borrowings under the ABL Credit Facility may be used for working capital and general corporate purposes.

~~Based on our Borrowing Base as of~~ ~~December 31, 2021~~ and existing borrowings, we had approximately $550.7 million of borrowing capacity available under the ABL Credit Facility. The weighted average interest rate on borrowings under our ABL Credit Facility was 1.5%, 1.7%, 3.7% for the years ended ~~December 31, 2021~~, ~~2020~~ ~~and 2019, respectively.~~

Our obligations under the ABL Credit Facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of ours and the Guarantors, including, only to the extent included in the Borrowing Base, real property, in each case subject to certain exceptions and exclusions. The assets of ours and the Guarantors consisting of accounts receivable, inventory, deposit accounts, securities accounts, machinery and equipment and, to the extent related to the foregoing, general intangibles, documents and instruments, as well as 65% of the equity interests of our first-tier foreign subsidiaries (collectively, the “ABL Priority Collateral”), secure our obligations and the obligations of the Guarantors under the ABL Credit Facility and the related guarantees on a first-priority basis, and all other collateral other than the ABL Priority Collateral secures our obligations and the obligations of the Guarantors under the ABL Credit Facility on a second-priority basis, in each case, subject to permitted liens.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

Our obligations under the Term Loan Credit Agreement and the Secured Notes are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of ours and the Guarantors, including certain material real property, subject to certain exceptions and exclusions. The ABL Priority Collateral secures our obligations and the obligations of the Guarantors under the Term Loan Credit Agreement and the Secured Notes and related guarantees on a second-priority basis, and all other collateral other than the ABL Priority Collateral secures our obligations and the obligations of the Guarantors under the Term Loan Credit Agreement and the Secured Notes and related guarantees on a first-priority basis, in each case, subject to permitted liens.

~~The credit agreements for our ABL Credit Facility (the “ABL Credit Agreement”)~~ ~~and Term Loan (the "Term Loan Credit Agreement")~~, and the indenture for the Secured Notes (the “Secured Notes Indenture”) contain customary affirmative and negative covenants including negative covenants restricting, among other things, our ability to incur or guarantee debt, or issue preferred stock, make certain loans or investments, make certain restricted payments (including payments on certain other debt, external dividends, and stock repurchases), incur liens securing other debt, consummate certain fundamental transactions, enter into certain transactions with affiliates and consummate asset sales. The ABL Credit Agreement contains a covenant which requires us to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 if availability under the ABL Credit Facility declines below certain levels. The Term Loan Credit Agreement and the Secured Notes Indenture require that the net cash proceeds of significant asset sales be used to prepay the Term Loan and purchase the Secured Notes to the extent that the net cash proceeds are not used for reinvestment in assets useful to our business, certain acquisitions and investments, repayment of certain borrowings under our ABL Credit Facility or to reduce, prepay, repay or purchase certain indebtedness, in each case, subject to certain restrictions and limitations set forth in the Term Loan Credit Agreement and the Secured Notes Indenture.

As of December 31, 2021, we had $32.0 million of outstanding borrowings and $67.3 million of letters of credit issued under the ABL Credit Facility. We also had $143.4 million in other uncommitted credit facilities, primarily outside the U.S. (the “Other Facilities”), of which we had $111.9 million in outstanding letters of credit, bank guarantees and bank acceptance drafts.

~~At December 31, 2021, the future maturities of debt were as follows:~~

Amount

2022

—

2023

75.0

2024

211.7

2025

—

2026

482.0

2027 and thereafter

721.3

Total ^(a)
$
1,490.0

~~(a)~~

~~Excludes unamortized debt issuance costs of $10.0 million and $13.7 million of bond discount which do not represent contractual commitments with a fixed amount or maturity date.~~

~~Interest expense~~

~~The following table summarizes interest expense included in the Consolidated Statements of Operations:~~

2021

2020

2019

Interest incurred
$
130.9

$
138.6

$
155.7

Less: interest income

1.5

1.5

2.7

Less: interest capitalized as property, plant and equipment

1.8

2.0

2.4

Interest expense, net
$
127.6

$
135.1

$
150.6

~~Interest paid was $114.4 million, $125.8 million and $158.6 million for the years ended December 31, 2021, 2020 and 2019, respectively.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Note 12. Derivatives~~

We are exposed to the impact of foreign currency fluctuations based on our global operations. Foreign currency fluctuations affect the U.S. dollar value of revenues earned and expenses incurred in foreign currencies. We are also exposed to currency risk to the extent we own assets or incur liabilities, or enter into other transactions that are not in the functional currency of the subsidiary in which we operate. We employ different practices to manage these risks, including where appropriate the use of derivative instruments, such as foreign currency forward contracts. To the extent the gains and losses associated with the fair values of foreign currency derivatives are recognized in the Consolidated Statements of Operations, they are generally offset by gains and losses on underlying payables, receivables and net investments in foreign subsidiaries. We do not use derivative financial instruments for trading or speculative purposes. The aggregate notional value of the forward contracts at December 31, 2021 and 2020 was $236.4 million and $220.7 million, respectively. The fair values of foreign currency contracts were determined to be Level 2 under the fair value hierarchy and are valued using market exchange rates.

~~In 2019 and 2020~~, we entered into interest rate swap agreements to manage interest rate risk exposure, effectively changing the interest rate on $400.0 million of our floating-rate Term Loan based on LIBOR to a fixed-rate. The interest rate swaps, with a notional value of $400.0 million, were designated as cash flow hedges against the variability of cash flows associated with our Term Loan scheduled to mature on January 15, 2024, which are attributable to changes in the benchmark interest rate. In the second quarter of 2021, we terminated interest rate swap agreements with a notional value of $300.0 million in conjunction with the partial repayment of our Term Loan. The termination of these agreements resulted in a loss of $9.2 million recorded within interest expense on the Consolidated Statement of Operations for the twelve months ended ~~December 31, 2021~~.

The fair value of the remaining $100.0 million interest rate swap was determined to be Level 2 under the fair value hierarchy and was developed using the market standard methodology of netting the discounted future variable cash payments and the discounted expected fixed cash receipts. Credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair value to account for potential nonperformance risk. We evaluate the credit value adjustments of the interest rate swap agreement, which take into account the possibility of counterparty and our own default, on at least a quarterly basis.

We manage credit risk for our derivative positions on a counterparty-by-counterparty basis, considering the net portfolio exposure with each counterparty, consistent with our risk management strategy for such transactions. Our agreements with each of our counterparties contain a provision where we could be declared in default on our derivative obligations if we either default or, in certain cases, are capable of being declared in default of any of our indebtedness greater than specified thresholds. These agreements also contain a provision where we could be declared in default subsequent to a merger or restructuring type event if the creditworthiness of the resulting entity is materially weakened.

~~As of December 31, 2021 and 2020, the fair values of our derivative financial instruments and their classifications on the Consolidated Balance Sheets were as follows:~~

Classification on Consolidated Balance Sheets

2021

2020

Derivative assets

Foreign currency contracts:

Not designated as hedging instruments
Prepaid expenses and other current assets

$
2.6

$
5.9

Derivative liabilities

Foreign currency contracts:

Not designated as hedging instruments
Accrued liabilities and other

$
—

$
2.3

Interest rate swap agreements:

Designated as cash flow hedges
Accrued liabilities and other

$
0.9

$
5.0

Designated as cash flow hedges
Other noncurrent liabilities

$
0.2

$
9.6

~~The pre-tax (gains) losses recognized on derivative financial instruments in the Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 were as follows:~~

Classification of (Gain) Loss Recognized in the Consolidated Statements of Operations

2021

2020

2019

Derivatives not designated as hedges

Foreign currency contracts
Selling, general and administrative expenses

$
(11.8
)

$
(13.6
)

$
1.5

Derivatives designated as cash flow hedges

Interest rate swap agreements
Interest expense, net

11.9

3.4

(0.1
)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~The pre-tax (gains) losses recognized on derivative financial instruments in the Consolidated Statements of Comprehensive Loss for the years ended December 31, 2021, 2020 and 2019 were as follows:~~

2021

2020

2019

Derivatives designated as cash flow hedges

Interest rate swap agreements

$
(1.6
)

$
19.0

$
(1.1
)

~~Note 13. Earnings per Share~~

Basic earnings per share is calculated by dividing net earnings attributable to RRD common stockholders by the weighted average number of common shares outstanding for the period. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of all potentially dilutive share-based awards, including stock options, restricted stock units and performance share units. Performance share units are excluded if the performance targets upon which the issuance of the shares is contingent have not been achieved and the respective performance period has not been completed as of the end of the current period. Additionally, stock options are considered anti-dilutive when the exercise price exceeds the average market value of our stock price during the applicable period. In periods when we are in a net loss from continuing operations, share-based awards are excluded from the calculation of earnings per share as their inclusion would have an antidilutive effect.

~~During the years ended December 31, 2021, 2020 and 2019, 0 shares of common stock were purchased by us, however, shares were withheld for tax liabilities upon the vesting of equity awards.~~

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive share-based awards for the years ended December 31, 2021, 2020 and 2019 were as follows:

2021

2020

2019

Basic net earnings (loss) per share attributable to RRD common stockholders:

Continuing operations
$
0.04

$
(0.37
)

$
(0.07
)
Discontinued operations
$
0.01

1.73

(1.24
)
Net earnings (loss) attributable to RRD stockholders
$
0.05

$
1.36

$
(1.31
)

Diluted net earnings (loss) per share attributable to RRD common stockholders:

Continuing operations
$
0.04

$
(0.37
)

$
(0.07
)
Discontinued operations
$
0.01

1.73

(1.24
)
Net earnings (loss) attributable to RRD stockholders
$
0.05

$
1.36

$
(1.31
)

Numerator:

Net income (loss) from continuing operations
$
3.1

$
(26.4
)

$
(4.8
)
Net income (loss) from discontinued operations
$
0.6

124.9

(88.4
)
Net income (loss) attributable to RRD stockholders
$
3.7

$
98.5

$
(93.2
)

Denominator:

Basic and diluted weighted average number of common shares outstanding

73.2

72.3

71.2

Dilutive options and awards

1.3

—

—

Diluted weighted average number of common shares outstanding

74.5

72.3

71.2

Weighted average number of anti-dilutive share-based awards:

Stock options

0.2

0.3

0.5

Restricted stock units

—

1.1

1.0

Total

0.2

1.4

1.5

Dividends declared per common share
$
—

$
0.03

$
0.12

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Note 14. Other Comprehensive Income (Loss)~~

~~The components of other comprehensive income (loss) and income tax expense allocated to each component for the years ended December 31, 2021, 2020 and 2019 were as follows:~~

2021

2020

2019

Before
Tax
Amount

Income Tax

Net of
Tax
Amount

Before
Tax
Amount

Income Tax

Net of
Tax
Amount

Before
Tax
Amount

Income Tax

Net of
Tax
Amount

Translation adjustments
$
(11.1
)

$
—

$
(11.1
)

$
27.8

$
—

$
27.8

$
7.0

$
—

$
7.0

Adjustment for net periodic pension and OPEB plan cost

123.0

31.3

91.7

10.3

3.1

7.2

(39.8
)

(9.3
)

(30.5
)
Changes in fair value of derivatives

13.5

3.4

10.1

(15.6
)

(3.6
)

(12.0
)

1.0

—

1.0

Other comprehensive income (loss)
$
125.4

$
34.7

$
90.7

$
22.5

$
(0.5
)

$
23.0

$
(31.8
)

$
(9.3
)

$
(22.5
)

~~The following table summarizes changes in accumulated other comprehensive loss by component for the years ended December 31, 2021, 2020 and 2019:~~

Changes in the Fair Value of Derivatives

Pension and OPEB Plan Cost

Translation Adjustments

Total

Balance at January 1, 2019
$
—

$
(155.2
)

$
1.4

$
(153.8
)
Other comprehensive income (loss) before reclassifications

1.1

(29.7
)

3.0

(25.6
)
Amounts reclassified from accumulated other comprehensive loss

(0.1
)

(0.8
)

4.1

3.2

Net change in accumulated other comprehensive loss

1.0

(30.5
)

7.1

(22.4
)
Balance at December 31, 2019
$
1.0

$
(185.7
)

$
8.5

$
(176.2
)
Other comprehensive income (loss) before reclassifications

(15.4
)

2.8

27.1

14.5

Amounts reclassified from accumulated other comprehensive loss

3.4

4.4

—

7.8

Net change in accumulated other comprehensive loss

(12.0
)

7.2

27.1

22.3

Balance at December 31, 2020
$
(11.0
)

$
(178.5
)

$
35.6

$
(153.9
)
Other comprehensive (loss) income before reclassifications

(1.8
)

87.3

(11.0
)

74.5

Amounts reclassified from accumulated other comprehensive loss

11.9

4.4

—

16.3

Net change in accumulated other comprehensive loss

10.1

91.7

(11.0
)

90.8

Balance at December 31, 2021
$
(0.9
)

$
(86.8
)

$
24.6

$
(63.1
)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Reclassifications from accumulated other comprehensive loss for the year ended December 31, 2021, 2020 and 2019 were as follows:~~

2021

2020

2019

Classification in the
Consolidated Statements of Operations
Translation Adjustments:

Net realized loss
$
—

$
—

$
4.1

(a)
Reclassifications, net of tax
$
—

$
—

$
4.1

Amortization of pension and OPEB plan cost:

Net actuarial loss
$
10.8

$
9.3

$
4.4

(b)
Net prior service credit

(5.4
)

(5.3
)

(5.4
)

(b)
Curtailments and settlements

0.4

1.4

(0.1
)

(b)
Reclassifications before tax

5.8

5.4

(1.1
)

Income tax benefit (expense)

1.4

1.0

(0.3
)

Reclassifications, net of tax
$
4.4

$
4.4

$
(0.8
)

Derivatives:

Net realized loss (gain)
$
11.9

$
3.4

$
(0.1
)

(c)
Reclassifications, net of tax
$
11.9

$
3.4

$
(0.1
)

Total reclassifications, net of tax
$
16.3

$
7.8

$
3.2

~~(a)~~

~~Included within selling, general and administrative expenses in the Consolidated Statements of Operations.~~

~~(b)~~

These accumulated other comprehensive (loss) income components are included in the calculation of net periodic pension and OPEB plan (income) expense recognized in cost of sales and net investment and other income in the Consolidated Statements of Operations (see Note 9, ~~Retirement Plans~~).

~~(c)~~

~~Included within net interest expense in the Consolidated Statements of Operations.~~

~~Note 15. Stock and Incentive Programs for Employees and Directors~~

We recognize compensation expense based on estimated grant date fair values for all share-based awards issued to employees and directors, including stock options, restricted stock units and performance share units. We estimate the fair value of share-based awards based on assumptions as of the grant date. We recognize compensation expenses for those awards expected to vest, on a straight-line basis over the requisite service period of the award, which is generally the vesting term of three years for restricted stock awards and stock options and the performance period for performance share units. For those awards in which there is no requisite service period, we immediately recognize the compensation expense. We recognize forfeitures as they occur as a reduction of compensation expense.

~~Share-Based Compensation Expense~~

The total share-based compensation expense was $7.1 million, $8.1 million and $10.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, $6.4 million of unrecognized compensation expense related to share-based compensation plans is expected to be recognized over a weighted-average period of 1.9 years.

~~Share-Based Compensation Plans~~

~~We have 1 share-based compensation plan under which we may grant future awards, as described below, and 1 terminated share-based compensation plan under which awards remain outstanding.~~

The 2017 Performance Incentive Plan (“2017 PIP”) was approved by stockholders to provide incentives to our key employees. Awards under the 2017 PIP are generally not restricted to any specific form or structure and could include, without limitation, stock options, stock units, restricted stock awards, cash or stock bonuses and stock appreciation rights. There were 15.1 million shares of common stock reserved and authorized for issuance under the 2017 PIP. At December 31, 2021, there were 7.4 million shares of common stock authorized and available for grant under the 2017 PIP.

~~General Terms of Awards~~

Under various incentive plans, we have granted certain employees non-qualified stock options, restricted stock units, performance share units and cash-settled stock units (“phantom stock units”). The Human Resources Committee of the Board of Directors has discretion to establish the terms and conditions for grants, including the number of shares, vesting and required service or other performance criteria. The maximum term of any award under the 2017 PIP and previous plans is ten years.

The exercise price of a stock option is equal to the closing price of our common stock on the option grant date and generally vest over four years. Options generally expire ten years from the date of grant or five years after the date of retirement, whichever is earlier.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

The rights granted to the recipient of restricted stock unit awards generally accrue ratably over the restriction or vesting period, which is generally three years. We have also granted restricted stock unit awards which cliff vest three years from the grant date. Restricted stock unit awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death or permanent disability of the grantee, termination of the grantee’s employment under certain circumstances or a change in control of the Company. We record compensation expense of restricted stock unit awards based on the fair value of the awards at the date of grant ratably over the period during which the restrictions lapse. Dividends are not paid on restricted stock units.

Awards that may be paid in cash are classified as liability awards due to their expected settlement in cash, and are included in Accrued liabilities and other in the Consolidated Balance Sheets. Compensation expense for these awards is measured based upon the fair value of the awards at the end of each reporting period. Awards payable only in shares are classified as equity awards due to their expected settlement in common stock. Compensation expense for these awards is measured based upon the fair value of the awards at the date of grant. Dividend equivalents are accrued for shares awarded to the Board of Directors and paid in the form of cash.

We have granted performance share unit awards to certain executive officers and senior management. Distributions under these awards are payable at the end of their respective performance periods in common stock or cash, at our discretion. The number of share units that vest can range from zero to 150% for the 2021, 2020 and 2019 awards, depending on achievement of a targeted performance metric for a performance period of three years inclusive of the year in which the award was granted. These awards are subject to forfeiture upon termination under certain circumstances prior to vesting. We expense the cost of the performance share unit awards based on the fair value of the awards at the date of grant and the estimated achievement of the performance metric, ratably over the performance period of three years.

~~In addition, we have granted phantom restricted and performance stock units to certain members of senior management.~~ ~~Phantom restricted stock units vest and are payable in three equal installments over a period of three years after the grant date. Phantom performance stock units~~ vest at the end of their respective performance periods. The number of phantom performance share units that vest can range from zero to 150% for the 2021, 2020 and 2019 awards, depending on achievement of a targeted performance metric for a performance period of three years inclusive of the year in which the award was granted. Phantom stock units are not shares of our common stock and therefore the recipients of these awards do not receive ownership interest in the Company or stockholder voting rights. These awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death or permanent disability of the grantee, termination of the grantee’s employment under certain circumstances or a change in control of the Company. All phantom stock unit awards are classified as liability awards due to their expected settlement in cash, and are included in Accrued liabilities and other in the Consolidated Balance Sheets. Compensation expense for these awards is measured based upon the fair value of the awards at the end of each reporting period and, for Phantom performance shares, ~~the estimated achievement of the performance metric. Dividends are not paid on phantom stock units.~~ ~~Total compensation expense for phantom awards was $33.3 million, $3.1 million and $3.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.~~

~~Acceleration of Vesting of Certain Awards~~

In connection with the Merger, certain executive officers of the Company may become entitled to payments and benefits that may be treated as excess parachute payments within the meaning of 280G of the Internal Revenue Code of 1986, as amended ( “Section 280G” and the “Code”, respectively ). To mitigate the potential impact of Section 280G and Section 4999 of the Code on the Company and its applicable executive officers, effective December 17, 2021 the Company’s Board of Directors approved the acceleration into December 2021 of the vesting and payment of certain restricted stock units, performance share units, phantom stock units and cash awards that otherwise would have been payable to the executive officers on or prior to the closing of the Merger. These actions were intended to preserve compensation-related corporate income tax deductions for the Company that might otherwise be disallowed through the operation of Section 280G and to mitigate or eliminate the amount of excise tax that may be payable by the executive pursuant to Section 4999 of the Code in connection with Section 280G in certain circumstances.

~~Stock Options~~

~~There were 0 options granted during the years ended December 31, 2021, 2020 and 2019.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Stock option awards as of December 31, 2021 and 2020, and changes during the year ended December 31, 2021 were as follows:~~

Shares Under Option
(thousands)

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term
(years)

Aggregate
Intrinsic
Value
(millions)

Outstanding at December 31, 2020

276

23.59

0.9

$
—

Cancelled/forfeited/expired

(191
)

24.53

Outstanding at December 31, 2021

85

21.47

0.2

—

Vested and exercisable at December 31, 2021

85

$
21.47

0.2

$
—

~~There was 0 unrecognized compensation expense related to stock options as of December 31, 2021.~~

~~Restricted Stock Units~~

~~Nonvested restricted stock unit awards as of December 31, 2021 and 2020, and changes during the year ended December 31, 2021 were as follows:~~

Shares
(thousands)

Weighted
Average Grant
Date Fair Value

Nonvested at December 31, 2020

1,440

$
3.18

Granted

1,042

4.73

Vested

(2,370
)

3.84

Forfeited

(112
)

3.67

Nonvested at December 31, 2021

—

$
—

Included above are 1,486 shares of restricted stock units that were accelerated vested into December 2021. As of December 31, 2021, there was $3.2 million in unrecognized share-based compensation related to restricted stock units, which is expected to be recognized over a weighted-average period of 1.9 years. The fair value of these awards was determined based on our stock price on the grant date reduced by the present value of expected dividends through the vesting period.

~~Performance Share Units~~

~~Nonvested performance share unit awards as of December 31, 2021 and 2020, and changes during the year ended December 31, 2021, were as follows:~~

Shares
(thousands)

Weighted
Average Grant
Date Fair Value

Nonvested at December 31, 2020

2,076

$
3.94

Granted

850

4.52

Performance adjustment

649

3.11

Vested

(3,291
)

3.99

Forfeited

(107
)

3.61

Nonvested at December 31, 2021

177

$
2.93

Included above are 1,726 of performance share units that were accelerated vested into December 2021. As of December 31, 2021, there was $3.2 million of unrecognized compensation expense related to performance share unit awards, which is expected to be recognized over a weighted-average period of 1.8 years.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Phantom Stock Units~~

~~Phantom stock unit awards as of December 31, 2021 and 2020, and changes during the year ended December 31, 2021, were as follows:~~

Shares
(thousands)

Weighted
Average Grant
Date Fair Value

Nonvested at December 31, 2020

4,603

$
3.25

Granted

1,719

3.26

Performance adjustment

208

3.54

Vested

(3,465
)

3.27

Forfeited

(708
)

3.22

Nonvested at December 31, 2021

2,357

$
3.26

Included above are 1,762 shares of phantom stock units that were accelerated vested into December 2021. As of December 31, 2021, there was $24.0 million of unrecognized compensation expense related to phantom stock unit awards based on ~~the price of our common stock on that date, which is expected to be recognized over a weighted-average period of 1.5 years.~~

~~Note 16. Stockholder Rights Plan~~

On August 28, 2019, our Board of Directors approved a Stockholder Rights Agreement (the “Rights Agreement”). Under the terms of the Rights Agreement, each share of our common stock is accompanied by one right; each right entitles the stockholder to purchase from the Company 1 ~~one-thousandth~~ ~~of a newly issued share of Series A Junior Participating Preferred Stock at an exercise price of $12 per share, subject to adjustment.~~

~~Subject to certain exceptions, the rights become exercisable 10 business days following a public announcement that a person (the “Acquiring Person”) has acquired beneficial ownership of 15%~~ ~~(or 20% in certain circumstances )~~ or more of the outstanding shares of common stock of the Company (the “Stock Acquisition Date”). The rights will expire on August 28, 2022, unless redeemed, exchanged or terminated earlier by the Company. The Rights Agreement can be amended by our Board of Directors allowing for an extension of the expiration date. At any time until 10 business days following the Stock Acquisition Date, the Company may redeem the rights for $0.001 per right.

Subject to the Chatham Rights Plan Amendment described below, in the event a person becomes an Acquiring Person, each holder of a right, other than the Acquiring Person, will have the right to receive common stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the right.

In the event that we are acquired in a merger or other business combination as defined in the Rights Agreement, or 50% or more of our assets or earnings power is sold, each right entitles the holders to purchase common stock of the acquiring company having a value equal to two times the exercise price of the right.

At any time after a person becomes an Acquiring Person and prior to the acquisition by any person or group of 50% or more of the outstanding common stock, the Board of Directors may exchange the rights (other than rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of 1 share of common stock, or ~~one one-thousandth~~ ~~of a share of Series A Preferred Stock (or of a share of a class or series of the Company’s preferred stock having equivalent rights, preferences and privileges), per right, subject to adjustment.~~

In connection with the definitive merger agreement with Chatham, the Company entered into an amendment to the Rights Agreement (the “Chatham Rights Plan Amendment”) to provide that none of (i) the approval, adoption, execution, delivery or amendment of the Chatham merger agreement, (ii) the public announcement or public disclosure of the Chatham merger agreement or any of the transactions contemplated thereby, or (iii) the performance or consummation of any of the transactions contemplated by the Chatham merger agreement will cause the rights under the Rights Agreement to become exercisable and to provide that the rights under the Rights Agreement will expire no later than immediately prior to the effective time of the merger under the Chatham merger agreement (if such effective time occurs).

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Note 17. Segment and Geographic Area Information~~

~~Our segments and their product and service offerings are summarized below:~~

~~Business Services~~

Business Services provides customized solutions at scale to help clients inform, service and transact with their customers. The segment’s primary product and service offerings include commercial print, statement printing, labels, packaging, supply chain management, forms and business process outsourcing. This segment also includes all of our operations in Asia, Europe, Canada and Latin America.

~~Marketing Solutions~~

~~Corporate~~

Corporate consists of unallocated general and administrative activities and associated expenses including, in part, executive, legal, finance, communications, certain facility costs and last-in-first-out inventory provisions that are not directly attributable to our operating segments. In addition, certain costs and earnings of employee benefit plans, such as pension and OPEB expense (income) and share-based compensation, are included in Corporate and not allocated to the operating segments. Corporate also manages our cash pooling structures, which enables participating international locations to draw on our international cash resources to meet local liquidity needs.

~~Information by Segment~~

We have disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by our chief operating decision-maker and is most consistent with the presentation of profitability reported within the consolidated financial statements.

Total
Sales

Intersegment
Sales

Net
Sales

Income
(Loss)
from
Operations

Assets of
Operations

Depreciation
and
Amortization

Capital
Expenditures

Year ended December 31, 2021

Business Services
$
3,969.3

$
(59.8
)

$
3,909.5

$
292.4

$
2,306.7

$
89.2

$
49.8

Marketing Solutions

1,072.6

(18.4
)

1,054.2

61.5

663.8

31.3

10.1

Total operating segments

5,041.9

(78.2
)

4,963.7

353.9

2,970.5

120.5

59.9

Corporate

—

—

—

(190.4
)

160.9

10.0

13.4

Total operations
$
5,041.9

$
(78.2
)

$
4,963.7

$
163.5

$
3,131.4

$
130.5

$
73.3

Year ended December 31, 2020

Business Services
$
3,743.6

$
(58.4
)

$
3,685.2

$
227.9

$
2,220.9

$
95.1

$
48.9

Marketing Solutions

1,103.1

(22.0
)

1,081.1

56.3

674.3

47.2

16.3

Total operating segments

4,846.7

(80.4
)

4,766.3

284.2

2,895.2

142.3

65.2

Corporate

—

—

—

(176.1
)

235.7

3.4

20.4

Total operations
$
4,846.7

$
(80.4
)

$
4,766.3

$
108.1

$
3,130.9

$
145.7

$
85.6

Year ended December 31, 2019

Business Services
$
4,276.9

$
(84.2
)

$
4,192.7

$
220.0

$
2,328.9

$
101.6

$
79.8

Marketing Solutions

1,314.3

(33.8
)

$
1,280.5

67.0

748.1

53.9

36.5

Total operating segments

5,591.2

(118.0
)

5,473.2

287.0

3,077.0

155.5

116.3

Corporate

—

—

—

(101.7
)

253.1

7.1

22.5

Total operations
$
5,591.2

$
(118.0
)

$
5,473.2

$
185.3

$
3,330.1

$
162.6

$
138.8

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~Corporate assets consisted of the following items at December 31, 2021, 2020 and 2019:~~

2021

2020

2019

Cash and cash equivalents
$
(70.0
)

$
(10.9
)

$
(47.6
)
Deferred income tax assets, net of valuation allowances

3.9

43.9

29.4

Software, net

33.6

34.7

43.8

Deferred compensation plan and Company owned life insurance assets

—

0.2

93.9

Property, plant and equipment, net

24.7

28.6

32.2

Other

168.7

139.2

101.4

Total Corporate assets
$
160.9

$
235.7

$
253.1

~~Net restructuring, impairment and other charges by segment for the years ended December 31, 2021, 2020 and 2019 are described in Note 5,~~ ~~Restructuring, Impairment and Other Charges~~.

~~Information by Geographic Area~~

~~The following table presents net sales by geographic region for the years ended December 31, 2021, 2020 and 2019.~~ ~~Net sales by geographic region are based upon the sales location.~~

2021

2020

2019

U.S.
$
3,438.6

$
3,451.3

$
3,851.9

Asia

1,074.6

868.9

907.8

Europe

229.3

224.5

435.2

Other

221.2

221.6

278.3

Consolidated net sales
$
4,963.7

$
4,766.3

$
5,473.2

~~The following table presents long-lived assets by geographic region at December 31, 2021, 2020 and 2019.~~ ~~Long-lived assets include net property, plant and equipment, operating lease assets, noncurrent deferred tax assets and other noncurrent assets.~~

2021

2020

2019

U.S.
$
572.9

$
608.1

$
733.6

Asia

175.3

160.8

138.9

Europe

68.9

63.3

57.4

Other

52.3

62.7

76.0

Consolidated long-lived assets
$
869.4

$
894.9

$
1,005.9

~~Note 18. New Accounting Pronouncements~~

~~Recently Adopted Accounting Pronouncements~~

In December 2019, the FASB issued ASU No. 2019-12 “Simplifying the Accounting for Income Taxes (Topic 740)” (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification (“ASC”) 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 was effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, however early adoption was permitted. We adopted ASU 2019-12 on January 1, 2021 and the changes did not have a material impact on our income tax provision.

~~Accounting Pronouncements Issued and Not Yet Adopted~~

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, which provides companies with optional guidance, including expedients and exceptions for applying generally accepted accounting principles to contracts and other transactions affected by reference rate reform, such as LIBOR, was effective upon issuance and will be applied to future contracts with changes to the reference rate. To date, we have had no such modification to any of our contracts. We are currently evaluating the prospective impact of the standard, and we will adopt ASU 2020-04 upon such contract modification. The impact of the standard is not expected to be material to our Consolidated Financial Statements.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~To the stockholders and the Board of Directors of~~

~~R.R. Donnelley & Sons Company~~

~~Opinion on the Financial Statements~~

We have audited the accompanying consolidated balance sheets of R.R. Donnelley & Sons Company and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in ~~Internal Control — Integrated Framework (2013)~~ issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2022 expressed an unqualified opinion on the Company's internal control over financial reporting.

~~Change in Accounting Principle~~

~~As discussed in Note 8 to the financial statements, effective January 1, 2019, the Company adopted FASB Accounting Standards Update 2016-02, “Leases (Topic 842)”, using the modified retrospective approach.~~

~~Basis for Opinion~~

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~Critical Audit Matter~~

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

~~Retirement Plans — Valuation of pension and other postretirement employee benefit (OPEB) obligations - Refer to Notes 1 and 9 to the financial statements~~

~~Critical Audit Matter Description~~

As discussed in Note 9 to the consolidated financial statements, the Company sponsors various defined benefit retirement income pension plans and postretirement benefit plans providing healthcare and life insurance benefits. The estimated projected benefit obligation for the Company’s pension plans and the estimated accumulated postretirement benefit obligation for the Company’s postretirement benefit plans were $1,077.9 million and $214.5 million, respectively, as of December 31, 2021.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In millions, except per share data and unless otherwise indicated)-(Continued)~~

The Company records its pension and OPEB plan obligations based on calculations which include various actuarial methods and assumptions, including discount rates, mortality, utilization rates of retiree health care accounts, and healthcare cost trend rates, among others. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it deems it appropriate to do so. The effect of modifications of actuarial assumptions on the value of the pension and OPEB obligations is recognized within other comprehensive income (loss) and amortized into earnings over future periods.

We identified the valuation of the Company’s pension and OPEB plan obligations as a critical audit matter. This was due to the significant auditor judgment and specialized skills and knowledge required to evaluate the actuarial methods used by the Company to determine the obligations, and to evaluate the discount rates and assumed utilization rates of retiree health care accounts used in the measurement process. These assumptions have a significant effect on the recorded obligations.

~~How the Critical Audit Matter Was Addressed in the Audit~~

~~Our audit procedures related to the actuarial models and assumptions used to determine the pension and OPEB obligations included the following, among others:~~

•	We tested the effectiveness of controls over management’s review of the pension and OPEB plan obligations, including the review of estimates and assumptions underlying the measurement of the obligations.

•	~~We evaluated the professional qualifications of management’s actuarial expert.~~

•

With the assistance of our actuarial specialists, we reviewed the significant actuarial assumptions discussed above and the underlying data used by management and management’s actuarial experts to assess the reasonableness of these assumptions under generally accepted actuarial standards. Specifically, we:

~~Read the supporting analyses for the discount rate.~~

~~Assessed the reasonableness of the discount rate assumption as follows:~~

▪

Performed an independent cash flow analysis to validate the discount rate selected by management and verified that the cash flows reflect the same assumptions and are consistent with the reported benefit obligation, including that projections of expected benefit payments are based on the plan’s population and plan provisions.

▪

~~Corroborated the results of the cash flows analysis from management’s actuarial expert through consideration of a yield curve analysis based on publicly available yield curves.~~

▪

Verified that the spot rates used by management’s actuarial expert and the prices, rates and ratings of the bonds underlying management’s actuarial expert’s yield curve analysis are as of the measurement date and that the bonds underlying the yield curve analysis are rated “high quality”.

Evaluated the percentage of future retirees assumed to elect health care coverage under the OPEB plan and the process used by management’s actuarial expert to develop per capita claims costs. We assessed the reasonableness of these assumptions as follows:

▪

~~Reviewed the benefits provided to retirees and any historical and future expected changes to the benefits and any limits on the Company’s benefit costs.~~

▪

Reviewed management’s actuarial expert’s description of its methodology and assumptions used to calculate per capita claims trended to future years and benefit participation, and evaluated these assumptions by comparing to prior claims experience, results of relevant experience studies, and industry trends.

Verified that current benefit cost limits are administered consistent with management’s actuarial expert’s valuation, and that any impact of the COVID-19 pandemic on recent experience was considered in setting the claims cost, trend, and plan participation assumptions.

~~/s/ DELOITTE & TOUCHE LLP~~

~~Chicago, Illinois~~

~~February 24, 2022~~

~~We have served as the Company's auditor since 2002.~~

~~F-41~~

Delaware		36-1004130
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
35 West Wacker Drive, Chicago, Illinois		60601
(Address of principal executive offices)		(ZIP Code)

	Form 10-K Item No.	~~Name of Item~~	~~Page~~
~~Part I~~
	~~Item 1.~~	~~Business~~		3
	~~Item 1A.~~	~~Risk Factors~~		10
	~~Item 1B.~~	~~Unresolved Staff Comments~~		19
	~~Item 2.~~	~~Properties~~		20
	~~Item 3.~~	~~Legal Proceedings~~		20
	~~Item 4.~~	~~Mine Safety Disclosures~~		20
		~~Information About Our Executive Officers~~		21
~~Part II~~
	~~Item 5.~~	~~Market for R. R. Donnelley & Sons Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~		22
	~~Item 7.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~		24
	~~Item 7A.~~	~~Quantitative and Qualitative Disclosures about Market Risk~~		35
	~~Item 8.~~	~~Financial Statements and Supplementary Data~~		36
	~~Item 9.~~	~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~		36
	~~Item 9A.~~	~~Controls and Procedures~~		36
	~~Item 9B.~~	~~Other Information~~		39
	~~Item 9C.~~	~~Disclosure Regarding Foreign Jurisdictions that Prevent Inspections~~		39
~~Part III~~
	~~Item 10.~~	~~Directors and Executive Officers of R. R. Donnelley & Sons Company and Corporate Governance~~		39
	~~Item 11.~~	~~Executive Compensation~~		39
	~~Item 12.~~	~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~		39
	~~Item 13.~~	~~Certain Relationships and Related Transactions, and Director Independence~~		39
	~~Item 14.~~	~~Principal Accounting Fees and Services~~		39
~~Part IV~~
	~~Item 15.~~	~~Exhibits, Financial Statement Schedules~~		39
	~~Item 16.~~	~~Form 10-K Summary~~		40
		~~Signatures~~		44

~~Name and~~ ~~Positions with the Company~~	~~Age~~		~~Business Experience~~
~~Daniel L. Knotts~~ ~~President and Chief Executive Officer~~		57	~~Since October 2016, Mr. Knotts has served as the Chief Executive Officer of RRD and a member of our board of directors.~~

~~Al R. Dupont~~ ~~Executive Vice President and Chief Commercial Officer~~		56	Since June 2021, Mr. Dupont has served as RRD’s Executive Vice President, Chief Commercial Officer. Prior to this, Mr. Dupont was our Group President of National Sales from January 2018 to May 2021, and prior to that was Senior Vice President of Enterprise Sales from October 2016 to December 2017.

~~David M. Houck~~ ~~Executive Vice President and Chief Information Officer~~		53	Since July 2021, Mr. Houck has served as RRD’s Executive Vice President, Chief Information Officer. Prior to joining RRD in April 2021, Mr. Houck served as Chief Information Officer at LSC Communications, Inc. from 2016 to December 2020.

~~John Pecaric~~ ~~President, RRD Business Services and Marketing Solutions~~		59	Since May 2021, Mr. Pecaric has served as President, RRD Business Services and Marketing Solutions. Prior to that, Mr. Pecaric served as President of RRD Business Services from 2018 to May 2021 and prior to this, Mr. Pecaric was our Executive Vice President, Chief Commercial Officer and President of International from 2016 to 2018.

~~Terry D. Peterson~~ ~~Executive Vice President and Chief Financial Officer~~		57	~~Since October 2016, Mr. Peterson has served as RRD’s Executive Vice President and Chief Financial Officer.~~

~~Michael J. Sharp~~ ~~Senior Vice President, Controller and Chief Accounting Officer~~		60	Since November 2017, Mr. Sharp has served as RRD’s Senior Vice President, Controller and Chief Accounting Officer. Prior to joining RRD, Mr. Sharp served in various capacities at AAR Corporation including Vice President and Chief Financial Officer from 2015 to 2016.

~~Deborah L. Steiner~~ ~~Executive Vice President, Chief Administrative Officer, General Counsel, Secretary and Chief Compliance Officer~~		51	Since April 2020, Ms. Steiner has served as RRD’s Executive Vice President, Chief Administrative Officer, General Counsel, Secretary and Chief Compliance Officer. Prior to this, Ms. Steiner was our Executive Vice President, General Counsel, Secretary and Chief Compliance Officer from October 2016 to April 2020.

Period	Total Number of Shares Purchased (a)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
October 1, 2021 - October 31, 2021		—	$	―		—	$	―
November 1, 2021 - November 30, 2021		—		—		—		—
December 1, 2021 - December 31, 2021		1,831,374		10.72		—		—
Total		1,831,374			—

	Base Period	Fiscal Years Ended December 31,
Company Name/Index	2016	2017		2018		2019		2020		2021
RR Donnelley	100		60.03		26.95		27.94		16.14		80.42
S&P SmallCap 600	100		113.23		103.63		127.24		141.60		179.58
S&P 1500 Industrials Index	100		121.06		104.87		136.12		152.03		185.75


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2021


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	RRD	New York Stock Exchange
Preferred Stock Purchase Rights		New York Stock Exchange


		Page
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	1
Item 11.	Executive Compensation	9
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	37
Item 13.	Certain Relationships and Related Transactions, and Director Independence	40
Item 14.	Principal Accountant Fees and Services	41
PART IV
Item 15.	Exhibits and Financial Statement Schedules	42
Item 16.	Form 10-K Summary	42

Exhibit Index

	Year Ended December 31,
	2021		2020		$ Change			% Change
	(in millions, except percentages)
Net sales		4,963.7		4,766.3		197.4			4.1	%
Cost of sales		3,994.9		3,789.2		205.7			5.4	%
Gross profit		968.8		977.1		(8.3	)		(0.8	%)
Selling, general and administrative expenses (exclusive of depreciation and amortization)		600.6		597.5		3.1			0.5	%
Restructuring, impairment and other charges-net		33.3		100.0		(66.7	)		(66.7	%)
Depreciation and amortization		130.5		145.7		(15.2	)		(10.4	%)
Other operating expense		40.9		25.8		15.1			58.5	%
Income from operations	$	163.5	$	108.1	$	55.4			51.2	%

AUDIT COMMITTEE		Number of Meetings in 2021: 12

Members	Primary Responsibilities		Independence
Timothy R. McLevish (Chair) Irene M. Esteves John C. Pope James Ray, Jr.	• Assists the Board in its oversight of: (1) the integrity of the Company’s financial statements and the Company’s accounting and financial reporting processes, internal controls and financial statement audits, (2) the Company’s compliance with legal and regulatory requirements, (3) the qualifications and independence of the Company’s independent registered public accounting firm, (4) the performance of the Company’s internal audit department and the independent registered public accounting firm, and (5) management’s risk management policies with respect to risk assessment and management’s action plans to mitigate such risks • The committee selects, determines fees for, evaluates and, when appropriate, replaces the Company’s independent registered public accounting firm		As required by its charter, each member of the Audit Committee is independent of the Company, as such term is defined for purposes of the NYSE listing rules and the federal securities laws. The Board has determined that each of Ms. Esteves, Mr. McLevish and Mr. Pope is an “audit committee financial expert” as such term is defined under the federal securities laws and the NYSE listing rules. Pursuant to its charter, the Audit Committee is authorized to obtain advice and assistance from internal or external legal, accounting or other advisors and to retain third-party consultants, and has the authority to engage independent auditors for special audits, reviews and other procedures.

CORPORATE RESPONSIBILITY AND GOVERNANCE COMMITTEE		Number of Meetings in 2021: 5

Members	Primary Responsibilities		Independence
Susan M. Gianinno (Chair) Jamie Moldafsky Jack C. Pope James Ray, Jr.	• Makes recommendations to the Board regarding nominees for election to the Board and recommends policies governing matters affecting the Board and its committees • Develops and implements governance principles for the Company, the Board and its committees • Conducts the regular review of the performance of the Board, its committees and its members • Oversees the Company’s responsibilities to its employees • Oversees the Company’s responsibilities related to the environmental, social and governance matters		As required by its charter, each member of the Corporate Responsibility & Governance Committee is independent of the Company, as such term is defined for purposes of the NYSE listing rules and the federal securities laws. Pursuant to its charter, the Corporate Responsibility & Governance Committee is authorized to obtain advice and assistance from outside advisors and to retain third-party consultants. In addition, it has the sole authority to approve the terms and conditions under which it engages director search firms.

HUMAN RESOURCES COMMITTEE		Number of Meetings in 2021: 5

Members	Primary Responsibilities		Independence
Irene M. Esteves (Chair) Susan M. Gianinno Timothy R. McLevish Jamie Moldafsky	• Establishes the Company’s overall compensation strategy • Establishes the compensation of the Company’s chief executive officer, other senior officers and key management employees • Adopts amendments to, and approves terminations of, certain Company employee benefit plans • Reviews and recommends to the Board the compensation of outside directors		As required by its charter, each member of the Human Resources Committee (the “HR Committee”) is independent of the Company, as such term is defined for purposes of the NYSE listing rules and the federal securities laws. In addition, in accordance with NYSE listing rules, the Board considered all factors specifically relevant to determining whether a director has a relationship to the Company which is material to that director’s ability to be independent from management in connection with the duties of a HR Committee member to affirmatively determine each member of the HR Committee is independent. Pursuant to its charter, the HR Committee is authorized to obtain advice and assistance from internal or external legal or other advisors and has the sole authority to engage counsel, experts or consultants in matters related to the compensation of the chief executive officer and other executive officers of the Company (with sole authority to approve any such firm’s fees and other retention terms).

Clawback Policy		• Awards granted under our time-based restricted stock units, cash incentive plans, stock option grants and performance shares or other performance-based awards are subject to forfeiture in the case of (i) fraud, or willing, knowing or intentional misconduct, (ii) the willful, knowing or intentional violation of RRD’s rules or applicable legal or regulatory requirements in the course of an executive officer’s employment, or (iii) conduct which results in the achievement of financial results that were subsequently restated due to RRD’s material noncompliance with any financial reporting requirement as a result of misconduct by any executive officer.

No Tax Gross-Ups		• No NEO is entitled to receive gross-ups for excise taxes or gross-ups on any supplemental benefits or perquisites.

No Dividends or Dividend Equivalents		• We do not pay or accrue for dividends on performance share units or restricted stock units.

Limited Perquisites		• We provide limited perquisites to executive officers.

Stock Ownership Guidelines		• We have meaningful stock ownership guidelines for the executive officers to further strengthen the alignment of management and stockholder interests.

No Repricing		• Our equity plans do not permit option re-pricing or option grants below fair market value.


Alliance Data Systems Corporation	Automatic Data Processing, Inc.	Avery Dennison Corporation
Domtar Corporation	Expeditors International of Washington, Inc.	Fidelity National Information Services, Inc.
Graphic Packaging Holding Company	Hub Group Inc.	News Corporation
Packaging Corporation of America	Pitney Bowes Inc.	Quad/Graphics, Inc.
Sealed Air Corporation	Sonoco Products Co.	The Interpublic Group of Companies, Inc.
Thomson Reuters Corporation	Veritiv Corporation	Xerox Corporation

Name	Dec. 31, 2020		Dec. 31, 2021		% Change

Daniel L. Knotts		$978,500		$1,135,000	16%
Terry D. Peterson		$575,000		$600,000	4%
John P. Pecaric		$525,000		$550,000	5%
Douglas D. Ryan		$550,000		$550,000	0%
Michael J. Sharp		$325,000		$345,000	6%
Deborah L. Steiner		$475,000		$515,000	8%

Name	AIP Target (%)		AIP Payout at Target ($)		Actual Payout as % of Target (%)⁽¹⁾⁽²⁾		Actual Payout ($)⁽²⁾

Daniel L. Knotts		135%		$1,532,250		134%	$2,059,344
Terry D. Peterson		90%		$540,000		134%	$725,760
John P. Pecaric		85%		$467,500		133%	$620,840
Douglas D. Ryan		80%		$234,538		100%	$234,538
Michael J. Sharp		50%		$172,500		131%	$226,320
Deborah L. Steiner		80%		$412,000		134%	$553,728

Name	Grant (# of PSUs)		Grant (# of RSUs)

Daniel L. Knotts		911,465		911,465
Terry D. Peterson		206,135		206,135
John P. Pecaric		143,405		143,405
Douglas D. Ryan		120,629		120,629
Michael J. Sharp		47,623		47,623
Deborah L. Steiner		138,229		138,229


July		Review and discuss timeline for setting executive pay
October		Review market competitive data including applicable compensation surveys and peer comparisons
December		Evaluate overall executive pay program • Approve proposed annual incentive plan design • Review proposed long-term incentive designs

	Year Ended December 31,
Products and Services	2021		2020		$ Change			% Change
	(in millions, except percentages)
Commercial print	$	1,535.5	$	1,357.7	$	177.8			13.1	%
Packaging	$	770.5		687.6		82.9			12.1	%
Labels	$	532.9		496.6		36.3			7.3	%
Statements	$	430.0		441.6		(11.6	)		(2.6	%)
Supply chain management	$	279.7		329.9		(50.2	)		(15.2	%)
Forms	$	195.3		202.4		(7.1	)		(3.5	%)
Business process outsourcing	$	165.6		169.4		(3.8	)		(2.2	%)
Total Business Services	$	3,909.5	$	3,685.2	$	224.3			6.1	%

Name and Principal Position	Year		Salary ($)		Bonus ($)⁽¹⁾		Stock Awards ($)⁽²⁾		Non-Equity Incentive Plan Compensation ($)⁽³⁾		Change in Pension Value ($)⁽⁴⁾		All Other Compensation ($)⁽⁵⁾		Total ($)


Daniel L. Knotts		2021		1,135,000				8,239,641		2,059,344				36,292	11,470,277
President and		2020		978,500				4,495,017		1,398,913		138,171		41,209	7,051,809
Chief Executive Officer		2019		978,500				4,328,794		973,608		229,200		37,806	6,547,908

Terry D. Peterson		2021		600,000				1,863,460		725,760				37,982	3,227,202
Executive Vice President		2020		575,000				1,007,372		548,033				42,047	2,172,452
and Chief Financial Officer		2019		575,000				1,029,128		377,145		—		35,777	2,017,050

John P. Pecaric		2021		550,000				1,296,380		620,840				39,737	2,506,958
President—RRD Business		2020		525,000				697,412		444,780		29,243		39,637	1,736,072
Services and Marketing Solutions		2019		518,750				684,302		318,941		73,546		39,637	1,635,176

Douglas D. Ryan⁽⁶⁾		2021		231,250				1,090,485		234,538				1,509,564	3,065,837
Former President—RRD		2020		550,000				615,616		465,960		—		36,390	1,667,966
Marketing Solutions		2019		550,000				511,845		350,590		—		33,890	1,446,325

Michael J. Sharp		2021		345,000				430,509		226,320				3,194	1,005,023
Senior Vice President and
Chief Accounting Officer

Deborah L. Steiner		2021		515,000				1,249,586		553,728				28,756	2,347,070
Executive Vice President,		2020		475,000				684,888		402,420		—		28,006	1,590,314
Chief Administrative Officer		2019		462,500		40,000		589,395		311,554		—		28,284	1,431,733
and General Counsel

Named Executive Officer		Corporate Automobile Allowance ($)	Personal Tax/ Financial Advice ($)		Supplemental Life Insurance Premium ($)		Supplemental Disability Insurance Premium ($)		Imputed Income from Company Provided Life Insurance ($)		Other ($)	Total ($)

Daniel L. Knotts	2021	16,800		2,606		2,050		14,449		387	—	36,292
Terry D. Peterson	2021	16,800		4,485		10,215		6,095		387	—	37,982
John P. Pecaric	2021	16,800		625		12,415		9,510		387	—	39,737
Douglas D. Ryan	2021	7,700		—		6,995		9,708		161	—	24,564
Michael J. Sharp	2021	—		2,600		—		—		594	—	3,194
Deborah L. Steiner	2021	16,800		1,675		3,935		6,139		207	—	28,756

			Estimated Future Payouts Under Non-Equity Incentive Plan Awards⁽¹⁾					Estimated Future Payouts Under Equity Incentive Plan Awards⁽²⁾						All Other Stock Awards: Number of Shares of	Grant Date Fair Value of Stock
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)		Stocks or Units (#)⁽³⁾	and Option Awards⁽⁴⁾


Daniel L. Knotts	—		306,450		1,532,250		3,064,500		—		—		—	—	—
	3/2/2021		—		—		—		455,732		911,465		1,367,197	—	4,119,821
	3/2/2021		—		—		—		—		—		—	911,465	4,119,821

Terry D. Peterson	—		108,000		540,000		1,080,000		—		—		—	—	—
	3/2/2021		—		—		—		103,067		206,135		309,202	—	931,730
	3/2/2021		—		—		—		—		—		—	206,135	931,730

John P. Pecaric	—		93,500		467,500		935,000		—		—		—	—	—
	3/2/2021		—		—		—		71,702		143,405		215,107	—	648,190
	3/2/2021		—		—		—		—		—		—	143,405	648,190

Douglas D. Ryan	—		46,908		234,538		469,076		—		—		—	—	—
	3/2/2021		—		—		—		60,314		120,629		180,943	—	545,242
	3/2/2021		—		—		—		—		—		—	120,629	545,242

Michael J. Sharp	—		34,500		172,500		345,000		—		—		—	—	—
	3/2/2021		—		—		—		23,811		47,623		71,434	—	215,255
	3/2/2021		—		—		—		—		—		—	47,623	215,255

Deborah L. Steiner	—		82,400		412,000		824,000		—		—		—	—	—
	3/2/2021		—		—		—		69,114		138,229		207,343	—	624,793
	3/2/2021		—		—		—		—		—		—	138,229	624,793

	Option Awards								Stock Awards


Name	Number of Securities Underlying Unexercised Options (#) Exercisable⁽¹⁾		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)⁽²⁾		Market Value of Shares or Units of Stock That Have Not Vested ($)⁽³⁾		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)⁽²⁾⁽⁴⁾		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)⁽³⁾
Daniel L. Knotts		14,500		—		21.48		3/1/2022		—		—		—		—
		—		—		—		—		—		—		925,237		10,418,169
Terry D. Peterson		—		—		—		—		86,849		977,920		235,805		2,655,164
John P. Pecaric		—		—		—		—		75,599		851,245		309,005		3,479,396
Douglas D. Ryan		—		—		—		—		—		—		73,460		827,160
Michael J. Sharp		—		—		—		—		—		—		59,752		672,808
Deborah L. Steiner		—		—		—		—		—		—		105,445		1,187,311

Vesting Date	Knotts		Peterson		Pecaric		Ryan		Sharp		Steiner

3/2/2023		523,292		201,450		220,119		73,460		12,129		44,487
3/2/2024		401,945		121,204		164,485		—		47,623		60,958

Name	Plan Name	Number of Years Credited Service (#)		Present Value of Accumulated Benefit ($)⁽¹⁾		Payments During Last Fiscal Year ($)

Daniel L. Knotts	Pension Plan		25		$538,832		—
	SERP		25		$897,696		—
John P. Pecaric	Pension Plan		26		$620,079		—
	SERP		26		$168,687		—

	Resignation for Good Reason or Termination Without Cause ($)			Resignation for other than Good Reason or Termination With Cause ($)	Resignation for Good Reason or Termination Without Cause after Change in Control ($)		Disability ($)			Death ($)
Cash:
Base Salary		2,270,000	⁽¹⁾	—	3,393,650	⁽³⁾		—	⁽³⁾		—
Bonus		3,064,500	⁽¹⁾	—	4,581,428	⁽³⁾		—	⁽⁴⁾		—	⁽⁴⁾
Lump Sum		—		—	75,000			—			—

Equity:⁽⁵⁾
Restricted Stock Units⁽⁶⁾		—		—	—			—			—
Performance Stock Units⁽⁷⁾		13,364,303		—	12,877,681			13,364,303			13,364,303

Benefits and Perquisites:⁽⁸⁾
Post-Termination Health Care		23,410		—	23,410			—			—
Supplemental Life Insurance		4,100		—	4,100			—			2,000,000	⁽⁹⁾
Supplemental Disability Insurance		28,898		—	28,898			3,365,380	⁽¹⁰⁾		—
Financial Planning		24,000		—	24,000			—			—
Car Allowance		33,600		—	33,600			—			—
Total:		18,812,811		—	21,041,766			16,729,683			15,364,303

	Termination Without Cause ($)			Termination With Cause ($)	Termination Without Cause after a Change in Control ($)			Disability ($)			Death ($)
Cash:
Base Salary		900,000	⁽¹⁾	—		1,200,000	⁽²⁾		—	⁽³⁾		—
Bonus		810,000	⁽¹⁾	—		1,080,000	⁽²⁾		—	⁽⁴⁾		—	⁽⁴⁾

Equity:⁽⁵⁾
Restricted Stock Units⁽⁶⁾		977,920		—		942,312			977,920			977,920
Performance Stock Units⁽⁷⁾		3,470,963		—		3,344,578			3,470,963			3,470,963

Benefits and Perquisites:⁽⁸⁾
Post-Termination Health Care		33,662		—		33,662			—			—
Supplemental Life Insurance⁽⁹⁾		15,323		—		20,430			—			2,000,000
Supplemental Disability Insurance⁽¹⁰⁾		9,142		—		12,189			2,091,335			—
Financial Planning		18,000		—		24,000			—			—
Car Allowance		—		—		—			—			—
Total:		6,235,009		—		6,657,170			6,540,217			6,448,882

Name	Fees Earned or Paid in Cash ($)⁽¹⁾		Stock Awards ($)		All Other Compensation ($)⁽²⁾⁽³⁾		Total ($)

Irene M. Esteves		130,000		140,000		4,527		274,527
Susan M. Gianinno		125,000		140,000		4,527		269,527
Timothy R. McLevish		130,000		140,000		4,527		274,527
Jamie Moldafsky		105,000		140,000		4,527		249,527
P. Cody Phipps⁽⁴⁾		105,000		140,000		8,926		253,926
John C. Pope		180,000		215,000		6,953		401,953
James Ray, Jr.⁽⁵⁾		128,877		171,836		—		300,713