Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 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.

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ora smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company” and ~~“smaller reporting~~“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 not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of October ~~27, 2017, 70.1~~28, 2019, 70.9 million shares of common stock were outstanding.

	September 30,			December 31,			September 30,			December 31,
	2017			2016			2019			2018
ASSETS
Cash and cash equivalents	$	225.8		$	317.5		$	144.7		$	370.6
Receivables, less allowances for doubtful accounts of $33.0 in 2017 (2016 - $35.9)		1,382.9			1,331.3
Inventories (Note 4)		457.1			386.8
Receivables, less allowances for doubtful accounts of $23.5 in 2019 (2018 - $25.9)								1,248.9			1,298.3
Inventories (Note 3)								338.7			329.7
Prepaid expenses and other current assets		152.8			136.7			111.7			101.1
Investment in LSC and Donnelley Financial (Note 2)		—			328.7
Total current assets		2,218.6			2,501.0			1,844.0			2,099.7
Property, plant and equipment-net (Note 5)		624.6			650.3
Goodwill (Note 6)		587.6			602.0
Other intangible assets-net (Note 6)		150.5			171.9
Property, plant and equipment-net (Note 4)								513.6			531.3
Goodwill (Note 5)								554.9			553.4
Other intangible assets-net (Note 5)								105.6			113.3
Deferred income taxes		123.2			108.9			57.4			66.9
Operating lease assets (Note 13)								197.1			—
Other noncurrent assets		252.2			234.7			267.9			276.2
Total assets	$	3,956.7		$	4,268.8		$	3,540.5		$	3,640.8
LIABILITIES
Accounts payable	$	996.5		$	985.3		$	803.2		$	987.3
Accrued liabilities		463.9			541.7
Short-term and current portion of long-term debt (Note 15)		17.9			8.2
Accrued liabilities and other								348.8			347.4
Short-term operating lease liabilities (Note 13)								67.8			—
Short-term and current portion of long-term debt (Note 14)								100.6			216.2
Total current liabilities		1,478.3			1,535.2			1,320.4			1,550.9
Long-term debt (Note 15)		2,232.2			2,379.2
Long-term debt (Note 14)								1,928.5			1,875.3
Pension liabilities		103.2			119.4			87.9			97.9
Other postretirement benefits plan liabilities		130.2			134.1			66.2			67.8
Long-term income tax liability								76.2			91.1
Long-term operating lease liabilities (Note 13)								133.1			—
Other noncurrent liabilities		175.8			193.1			205.1			203.2
Total liabilities		4,119.7			4,361.0			3,817.4			3,886.2
Commitments and Contingencies (Note 14)
EQUITY (Note 10)
Commitments and Contingencies (Note 13)
EQUITY (Note 9)
RRD stockholders' equity
Preferred stock, $1.00 par value
Authorized: 2.0 shares; Issued: None		—			—			—			—
Common stock, $0.01 par value
Authorized: 165.0 shares;
Issued: 89.0 shares in 2017 and 2016		0.9			0.9
Issued: 89.0 shares in 2019 and 2018								0.9			0.9
Additional paid-in-capital		3,450.7			3,468.5			3,357.3			3,404.0
Accumulated deficit		(2,160.6	)		(2,155.4	)		(2,244.7	)		(2,225.7	)
Accumulated other comprehensive loss		(126.5	)		(55.7	)		(173.9	)		(153.8	)
Treasury stock, at cost, 19.0 shares in 2017 (2016 - 19.1 shares)		(1,341.4	)		(1,364.0	)
Treasury stock, at cost, 18.2 shares in 2019 (2018 - 18.6 shares)								(1,230.4	)		(1,285.5	)
Total RRD stockholders' equity		(176.9	)		(105.7	)		(290.8	)		(260.1	)
Noncontrolling interests		13.9			13.5			13.9			14.7
Total equity		(163.0	)		(92.2	)		(276.9	)		(245.4	)
Total liabilities and equity	$	3,956.7		$	4,268.8		$	3,540.5		$	3,640.8

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Products net sales

$
1,322.0

$
1,327.8

$
3,830.9

$
3,772.5

Services net sales

412.9

397.8

1,182.9

1,201.6

Total net sales

1,734.9

1,725.6

5,013.8

4,974.1

Products cost of sales (exclusive of depreciation and amortization)

1,064.1

1,030.7

3,065.7

2,958.1

Services cost of sales (exclusive of depreciation and amortization)

346.4

330.7

992.8

1,002.9

Total cost of sales

1,410.5

1,361.4

4,058.5

3,961.0

Products gross profit

257.9

297.1

765.2

814.4

Services gross profit

66.5

67.1

190.1

198.7

Total gross profit

324.4

364.2

955.3

1,013.1

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

207.7

218.1

643.6

681.0

Restructuring, impairment and other charges-net (Note 7)

33.8

10.8

46.7

24.3

Depreciation and amortization

47.0

51.0

143.1

153.5

Other operating expense (income)

—

0.3

—

(12.0
)
Income from operations

35.9

84.0

121.9

166.3

Interest expense-net

43.5

48.8

137.3

150.6

Investment and other income -net

(2.8
)

(1.0
)

(47.2
)

(0.4
)
Loss on debt extinguishments

6.5

—

20.1

—

(Loss) earnings before income taxes

(11.3
)

36.2

11.7

16.1

Income tax (benefit) expense

(3.5
)

13.9

(7.4
)

12.9

Net (loss) earnings from continuing operations

(7.8
)

22.3

19.1

3.2

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

—

(29.1
)

—

15.8

Net (loss) earnings

(7.8
)

(6.8
)

19.1

19.0

Less: Income attributable to noncontrolling interests

0.2

0.3

0.7

0.8

Net (loss) earnings attributable to RRD common stockholders

$
(8.0
)

$
(7.1
)

$
18.4

$
18.2

Basic net (loss) earnings per share attributable to RRD common stockholders (Note 11):

Continuing operations

$
(0.11
)

$
0.31

$
0.26

$
0.03

Discontinued operations

—

(0.41
)

—

0.23

Net (loss) earnings attributable to RRD stockholders

(0.11
)

(0.10
)

0.26

0.26

Diluted net (loss) earnings per share attributable to RRD common stockholders (Note 11):

Continuing operations

$
(0.11
)

$
0.31

$
0.26

$
0.03

Discontinued operations

—

(0.41
)

—

0.23

Net (loss) earnings attributable to RRD

(0.11
)

(0.10
)

0.26

0.26

Dividends declared per common share

$
0.14

$
0.78

$
0.42

$
2.34

Weighted average number of common shares outstanding:

Basic

70.2

70.0

70.1

70.0

Diluted

70.2

70.5

70.3

70.5

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Products net sales	$	1,328.8		$	1,329.8		$	3,774.4		$	3,881.6
Services net sales		290.6			319.7			875.6			1,155.2
Total net sales		1,619.4			1,649.5			4,650.0			5,036.8

Products cost of sales (exclusive of depreciation and amortization)		1,073.5			1,076.8			3,076.4			3,167.7
Services cost of sales (exclusive of depreciation and amortization)		235.0			257.3			706.2			968.4
Total cost of sales		1,308.5			1,334.1			3,782.6			4,136.1

Products gross profit		255.3			253.0			698.0			713.9
Services gross profit		55.6			62.4			169.4			186.8
Total gross profit		310.9			315.4			867.4			900.7
Selling, general and administrative expenses (exclusive of depreciation and amortization)		190.5			203.8			589.1			626.4
Restructuring and other (income) expense-net (Note 6)		(2.3	)		11.0			30.8			22.8
Depreciation and amortization		43.5			44.2			126.2			137.5
Other operating expense (income)		5.4			(4.5	)		3.3			(4.6	)
Income from operations		73.8			60.9			118.0			118.6
Interest expense-net		37.4			42.0			115.6			125.7
Investment and other income-net		(4.6	)		(5.5	)		(11.3	)		(14.7	)
Loss on debt extinguishment		0.8			—			0.8			0.1
Income before income taxes		40.2			24.4			12.9			7.5
Income tax expense (benefit)		27.3			(10.4	)		15.9			(5.4	)
Net income (loss)		12.9			34.8			(3.0	)		12.9
Less: income attributable to noncontrolling interests		0.3			0.5			0.2			1.2
Net income (loss) attributable to RRD common stockholders	$	12.6		$	34.3		$	(3.2	)	$	11.7

Net income (loss) per share attributable to RRD common stockholders (Note 10):
Basic net income (loss) per share	$	0.18		$	0.49		$	(0.04	)	$	0.17
Diluted net income (loss) per share	$	0.18		$	0.49		$	(0.04	)	$	0.17

Weighted average number of common shares outstanding:
Basic		71.4			70.6			71.2			70.5
Diluted		71.4			70.7			71.2			70.8

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net (loss) earnings

$
(7.8
)

$
(6.8
)

$
19.1

$
19.0

Other comprehensive income (loss), net of tax (Note 12):

Translation adjustments

17.7

(4.4
)

46.8

(9.0
)
Adjustment for available-for-sale securities

(1.8
)

—

(119.3
)

—

Adjustment for net periodic pension and postretirement benefits plan cost

0.7

(19.4
)

2.1

(13.3
)
Other comprehensive income (loss)

16.6

(23.8
)

(70.4
)

(22.3
)
Comprehensive income (loss)

8.8

(30.6
)

(51.3
)

(3.3
)
Less: comprehensive income attributable to noncontrolling interests

0.3

0.3

1.1

1.0

Comprehensive income (loss) attributable to RRD common stockholders

$
8.5

$
(30.9
)

$
(52.4
)

$
(4.3
)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Net income (loss)	$	12.9		$	34.8		$	(3.0	)	$	12.9

Other comprehensive loss, net of tax (Note 11):
Translation adjustments		(19.9	)		(8.4	)		(21.9	)		(31.1	)
Adjustments for net periodic pension and postretirement benefits plan cost		(0.2	)		1.6			(0.6	)		5.9
Other		0.6			—			2.1			—
Other comprehensive loss		(19.5	)		(6.8	)		(20.4	)		(25.2	)
Comprehensive (loss) income		(6.6	)		28.0			(23.4	)		(12.3	)
Less: comprehensive (loss) income attributable to noncontrolling interests		(0.1	)		0.1			(0.1	)		0.7
Comprehensive (loss) income attributable to RRD common stockholders	$	(6.5	)	$	27.9		$	(23.3	)	$	(13.0	)

Nine Months Ended

September 30,

2017

2016

OPERATING ACTIVITIES

Net earnings

$
19.1

$
19.0

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

Impairment charges - net

21.8

0.8

Depreciation and amortization

143.1

312.5

Provision for doubtful accounts receivable

1.7

20.4

Share-based compensation

6.4

13.4

Deferred income taxes

(10.1
)

(33.5
)
Changes in uncertain tax positions

0.7

(0.4
)
Gain on investments and other assets - net

(2.8
)

(13.0
)
Realized gain on disposition of available-for-sale securities - net

(42.4
)

—

Loss on debt extinguishments

20.1

85.3

Net pension and other postretirement benefits plan income

(11.0
)

(55.1
)
Net loss on pension and other postretirement benefits plan settlements and curtailments (Note 8)

—

78.8

Other

14.7

9.6

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

Accounts receivable - net

(26.3
)

(122.4
)
Inventories

(62.5
)

(60.0
)
Prepaid expenses and other current assets

(6.3
)

(9.2
)
Accounts payable

(18.9
)

(160.8
)
Income taxes payable and receivable

(11.4
)

(35.6
)
Accrued liabilities and other

(36.1
)

(23.4
)
Pension and other postretirement benefits plan contributions

(12.4
)

(18.6
)
Net cash (used in) provided by operating activities

(12.6
)

7.8

INVESTING ACTIVITIES

Capital expenditures

(77.2
)

(147.9
)
Acquisitions of businesses, net of cash acquired

—

(47.5
)
Disposition of businesses

—

13.7

Proceeds from sales of investments and other assets

127.6

3.7

Transfers (to) from restricted cash

(2.4
)

13.7

Other investing activities

—

(3.6
)
Net cash provided by (used in) investing activities

48.0

(167.9
)
FINANCING ACTIVITIES

Net change in short-term debt

10.2

5.7

Payments of current maturities and long-term debt

(200.9
)

(786.6
)
Proceeds from issuances of long-term debt

—

1,164.0

Payments on Credit Agreement borrowings

(1,000.0
)

—

Proceeds from Credit Agreement borrowings

1,165.0

—

Proceeds from termination of interest rate swaps

—

2.5

Debt issuance costs

(4.4
)

(37.5
)
Dividends paid

(29.4
)

(163.2
)
Net transfer of cash and cash equivalents to LSC and Donnelley Financial

(78.0
)

—

Other financing activities

(1.6
)

2.5

Net cash (used in) provided by financing activities

(139.1
)

187.4

Effect of exchange rate on cash and cash equivalents

12.0

(5.1
)
Net (decrease) increase in cash and cash equivalents

(91.7
)

22.2

Cash and cash equivalents at beginning of year

317.5

389.6

Cash and cash equivalents at end of period

$
225.8

$
411.8

SUPPLEMENTAL NON-CASH DISCLOSURE:

Assumption of warehousing equipment related to customer contract

$
—

$
8.8

Debt-for-equity exchange

132.9

—

Debt-for-debt exchanges, including debt issuance costs of $5.5 million in 2016

—

300.0

	Nine Months Ended
	September 30,
	2019			2018
OPERATING ACTIVITIES
Net (loss) income	$	(3.0	)	$	12.9
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		126.2			137.5
Provision for doubtful accounts receivable		6.9			10.6
Share-based compensation		9.3			6.4
Deferred income taxes		9.8			7.3
Net pension and other postretirement benefits plan income		(12.1	)		(15.9	)
Other		(3.1	)		(5.9	)
Changes in operating assets and liabilities:
Accounts receivable-net		17.7			(5.7	)
Inventories		(21.1	)		(16.6	)
Prepaid expenses and other current assets		(11.4	)		(5.9	)
Accounts payable		(172.3	)		(150.7	)
Current income taxes		(41.1	)		(26.7	)
Accrued liabilities and other		11.5			2.3
Pension and other postretirement benefits plan contributions		(5.1	)		(13.5	)
Net cash used in operating activities		(87.8	)		(63.9	)
INVESTING ACTIVITIES
Capital expenditures		(107.4	)		(72.7	)
Acquisition of business		(3.0	)		—
Proceeds from sales of investments and other assets		32.8			49.9
Disposition of businesses		10.4			50.5
Payments related to company-owned life insurance		(1.3	)		(1.8	)
Net cash (used in) provided by investing activities		(68.5	)		25.9
FINANCING ACTIVITIES
Proceeds from other short-term debt		—			56.5
Payments on other short-term debt		(8.0	)		(12.2	)
Payments of current maturities and long-term debt		(221.6	)		(0.2	)
Proceeds from credit facility borrowings		1,061.8			975.1
Payments on credit facility borrowings		(897.8	)		(949.1	)
Dividends paid		(6.4	)		(21.8	)
Payments of withholding taxes on share-based compensation		(0.9	)		(0.7	)
Other financing activities		(1.0	)		(0.9	)
Net cash (used in) provided by financing activities		(73.9	)		46.7
Effect of exchange rate on cash, cash equivalents and restricted cash		(6.3	)		(14.0	)
Net decrease in cash, cash equivalents and restricted cash		(236.5	)		(5.3	)
Cash, cash equivalents and restricted cash at beginning of year		403.6			301.5
Cash, cash equivalents and restricted cash at end of period	$	167.1		$	296.2

The accompanying unaudited condensed consolidated interim financial statements include the accounts of R.R. Donnelley & Sons Company and its subsidiaries ~~(the “Company” or “RRD”~~(“RRD,” the “Company,” “we,” “us,” and “our”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods and should be read in conjunction with the consolidated financial statements and the related notes thereto included in ~~the Company’s~~our latest Annual Report on Form 10-K for the year ended December 31, ~~2016~~2018 filed with the SEC on February ~~28, 2017.~~27, 2019. Operating results for the nine months ended September 30, ~~2017~~2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, ~~2017.~~2019. All significant intercompany transactions have been eliminated in consolidation. These unaudited condensed consolidated interim financial statements include estimates and assumptions of management that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these estimates.

~~On October 1, 2016, the Company completed the separation~~The following table provides a reconciliation of ~~its financial communications~~cash, cash equivalents and ~~data services business (“Donnelley Financial Solutions, Inc.” or “Donnelley Financial”)~~restricted cash at September 30, 2019 and the publishing and retail-centric print services and office products business (“LSC Communications, Inc.” or “LSC”) into two separate publicly-traded companies (the "Separation"). The Company completed the tax-free distribution of 80.75% of the outstanding common stock of each Donnelley Financial and LSC to the Company’s stockholders of record on September 23, 2016 who received one share of each Donnelley Financial and LSC for every eight shares of RRD common stock owned as of the record date (the “Distribution”). The Company retained 19.25% of the outstanding common stock of each Donnelley Financial and LSC. The historical financial results of Donnelley Financial and LSC prior to the Separation, are presented as discontinued operations onDecember 31, 2018 reported within the Condensed Consolidated ~~Statements~~Balance Sheets that sum to the total of ~~Operations and, as~~the same such ~~have been excluded from both continuing operations and segment results~~amounts shown in the Condensed Consolidated Statement of Cash Flows.

Cash payments for ~~all periods presented.~~income Sales from RRD to Donnelley Financial and LSC previously eliminated in consolidation have been recast and are now shown as external sales within the financial results of continuing operations. These net salestaxes were ~~$72.5~~$54.5 million and ~~$150.4~~$28.4 million for the ~~three and~~ nine months ended September 30, ~~2016, respectively.~~2019 and 2018, respectively. Cash refunds for income taxes were $7.7 million and $14.0 million ~~Unless indicated otherwise,~~for the ~~information~~nine months ended September 30, 2019 and 2018, respectively. Income taxes receivable of $25.5 million and $11.7 million as of September 30, 2019 and December 31, 2018, respectively, are included within Prepaid expenses and other current assets.

On January 1, 2018, we adopted ASC Topic 606, “Revenue from Contracts with Customers” using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. All revenue recognized in the ~~Notes~~Condensed Statements of Operations is considered to ~~Condensed Consolidated Financial Statements relates~~be revenue from contracts with clients.

We recorded a net increase to opening retained earnings of $12.9 million as of January 1, 2018 due to the ~~Company's continuing operations. Prior periods have~~cumulative impact of adopting Topic 606, with the impact primarily related to the timing of revenue recognition for certain inventory that had been ~~recast to reflect the Company's current segment reporting structure. See Note 2,~~ ~~Discontinued Operations, for more information on the Separation.~~

Immediately following the Distribution on October 1, 2016, the Company affected a one-for-three reverse stock split for RRD common stock (the “Reverse Stock Split”). The Reverse Stock Split was approved by the Company’s Board of Directors on September 14, 2016 and previously approved by the Company’s stockholders at the annual meeting on May 19, 2016. As a result of the Reverse Stock Split, the number of issued and outstanding and treasury shares of the Company’s common stock was reduced proportionally based on the Reverse Stock Split ratio of one share for every three shares of common stock held before the Reverse Stock Split.billed but not yet shipped.

During the third quarter of 2017, the Company identified an error in the accounting for certain contracts with an inventory buy-back option within the Asia reporting unit, which is in the International segment. As a result, the error, which was determined by management to be immaterial to the previously issued financial statements, has been corrected herein from the amounts previously reported. There was no impact to net earnings (loss) or net earnings (loss) per share, or the Consolidated Statements of Comprehensive Income or Stockholders’ Equity. The following table presents the impact of the revision on net sales and cost of sales:

As Reported

Adjustments

As Revised

Three months ended March 31, 2016

Products net sales
$
1,242.7

$
13.1

$
1,229.6

Total net sales

1,645.6

13.1

1,632.5

Products cost of sales

971.9

13.1

958.8

Total cost of sales

1,313.1

13.1

1,300.0

Three months ended June 30, 2016

Products net sales
$
1,231.7

$
16.6

$
1,215.1

Total net sales

1,632.6

16.6

1,616.0

Products cost of sales

985.2

16.6

968.6

Total cost of sales

1,316.2

16.6

1,299.6

Three months ended September 30, 2016

Products net sales
$
1,343.4

$
15.6

$
1,327.8

Total net sales

1,741.2

15.6

1,725.6

Products cost of sales

1,046.3

15.6

1,030.7

Total cost of sales

1,377.0

15.6

1,361.4

Three months ended December 31, 2016

Products net sales
$
1,470.3

$
17.4

$
1,452.9

Total net sales

1,876.3

17.4

1,858.9

Products cost of sales

1,161.0

17.4

1,143.6

Total cost of sales

1,512.6

17.4

1,495.2

Three months ended March 31, 2017

Products net sales
$
1,288.9

$
17.4

$
1,271.5

Total net sales

1,676.3

17.4

1,658.9

Products cost of sales

1,024.3

17.4

1,006.9

Total cost of sales

1,348.5

17.4

1,331.1

Three months ended June 30, 2017

Products net sales
$
1,263.4

$
26.0

$
1,237.4

Total net sales

1,646.0

26.0

1,620.0

Products cost of sales

1,020.7

26.0

994.7

Total cost of sales

1,342.9

26.0

1,316.9

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Products
Commercial print	$	442.9	$	496.4	$	1,278.8	$	1,421.3
Direct marketing		193.5		142.7		479.0		424.1
Packaging		182.1		179.7		484.2		474.0
Statements		134.0		133.5		417.1		436.4
Labels		124.0		118.8		364.1		355.5
Digital print and fulfillment		122.5		113.5		347.2		332.6
Supply chain management		69.8		81.5		222.4		242.2
Forms		60.0		63.7		181.6		195.5
Total products net sales	$	1,328.8	$	1,329.8	$	3,774.4	$	3,881.6
Services
Logistics	$	204.6	$	229.1	$	614.3	$	880.3
Business process outsourcing		58.6		60.5		181.0		183.1
Digital and creative solutions		27.4		30.1		80.3		91.8
Total services net sales	$	290.6	$	319.7	$	875.6	$	1,155.2
Total net sales	$	1,619.4	$	1,649.5	$	4,650.0	$	5,036.8

Our products revenue is primarily recognized at a point in time. We generally recognize revenue for products upon the ~~impact~~transfer of control of the ~~related balance sheet revision on~~products to the ~~December 31, 2016 Condensed Consolidated Balance Sheet:~~client which typically occurs upon transfer of title and risk of ownership, which is generally upon shipment to the client. For certain products, we are able to recognize revenue for completed inventory billed but not yet shipped at the client’s direction.

The ~~September 30, 2016 Consolidated Statement~~following is a description of ~~Cash Flows has also been revised~~our products:

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.

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.

We generate revenue by providing packaging solutions, ranging from rigid boxes to ~~reflect the impact of the above balance sheet revision.~~in-box print materials, for clients in consumer electronics, life sciences, cosmetics and consumer packaged goods industries.

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.

~~Immediately following~~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.

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 ~~Distribution,~~trade name Motif^TM, we also create custom photobooks.

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

We generate revenue by producing a variety of forms including invoices, order forms and business forms that support both the ~~Company held approximately 6.2 million shares~~private and public sectors for clients in financial, government, retail, healthcare and business services industries.

Our services revenue is recognized both at a point in time and over time. Our logistics revenue is primarily recognized over time as the performance obligation is completed. Due to the short transit period of ~~Donnelley Financial common stock~~logistics performance obligations, the timing of revenue recognition does not require significant judgment. Our business process outsourcing and ~~approximately 6.2 million shares~~digital and creative solutions revenue is recognized over time or at a point in time, depending on the nature of ~~LSC common stock. The Company~~the service which could be either recurring or project-based.

We generate revenue by providing specialized transportation and distribution services using our third party logistics solutions. These services are comprised of freight services, including truckload, less-than-truckload, intermodal and international freight forwarding; international mail and parcel distribution; and courier services, including same day and next day delivery. As discussed in Note 16, Dispositions, we sold our Print Logistics business on July 2, 2018. Print Logistics services included the distribution of retail and newsstand printed materials.

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.

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.

Certain clients may receive volume-based rebates or early payment discounts, which are accounted for as variable consideration. We estimate these ~~investments as available-for-sale equity securities. In March 2017,~~amounts based on the ~~Company sold~~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 ~~6.2 million shares~~nature of ~~LSC common stock it retained upon spinoff for net proceeds~~our products and the history of $121.4 million, resulting in a realized loss of $51.6 million, which was recorded within investment and other income-net in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2017. In June 2017, the Company completed a non-cash debt-for-equity exchange in which RRD exchanged 6,143,208 of its retained shares of Donnelley Financial common stock for the extinguishment of $111.6 million in aggregate principal amount of RRD indebtedness. In August 2017, the Company disposed of its remaining 99,594 shares of Donnelley Financial common stock in exchange for the extinguishment of $1.9 million in aggregate principal amount of RRD indebtedness. See Note 15, ~~Debt, for additional details of these debt-for-equity transactions. As of September 30, 2017, the Company no longer held any shares of LSC or Donnelley Financial.~~

~~The significant non-cash items and capital expenditures of discontinued operations were as follows:~~

In connection with the Separation, the Company entered into transition services agreements with Donnelley Financial and LSC under which the companies will provide one another with certain services to help ensure an orderly transition following the Separation (the “Transition Services Agreements”). The charges for these servicesreturns, product returns are intended to allow the companies, as applicable, to recover the direct and indirect costs incurred in providing such services. The Transition Services Agreements generally provide for a term of services starting at the Separation date and continuing for a period of up to twenty-four months following the Separation. During the three and nine months ended September 30, 2017, the Company recognized $1.4 million and $6.4 million, respectively, as a reduction of costs within selling, general and administrative expenses within the Condensed Consolidated Statements of Operations from the Transition Services Agreement.

The Company also entered into various commercial agreements which govern sales transactions between the companies. Under these commercial agreements, the Company recognized the following transactions with LSC and Donnelley Financial during the three and nine months ended September 30, 2017:Contract Balances

The ~~Company also recognized $83.0~~ ~~million of net cash inflow~~following table provides information about contract assets and liabilities from ~~Donnelley Financial and LSC within operating activities in the Condensed Consolidated Statements of Cash Flows during the nine months ended~~ S~~eptember 30, 2017.~~contracts with clients:

~~3. Acquisitions and Dispositions~~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.

On August 4, 2016, the Company acquired Precision Dialogue Holdings, LLC (“Precision Dialogue”), a provider of email marketing, direct mail marketing and other services with operations in the United States for a purchase price, net of cash acquired, of approximately $59.2 million. The acquisition expanded the Company’s ability to help its customers measure communications effectiveness and audience engagement. ~~During the three and nine months ended September 30, 2017,~~ Precision Dialogue contributed $17.0 million and $44.5 million, respectively, in net sales and earnings before income taxes of $2.9 million and $4.4 million, respectively. During both the three and nine months ended September 30, 2016, Precision Dialogue contributed $8.4 million in net sales and earnings before income taxes of $0.6 million. Precision Dialogue is ~~included within the operating results of the Variable Print and Strategic Services segments.~~

O~~n January 11, 2016, the Company sold two entities within the business process outsourcing reporting unit for net proceeds of $13.4 million. This resulted in a net gain of $12.3 million~~Revenue recognized during the nine months ended September 30, ~~2016, which~~2019 from amounts included in contract liabilities at the beginning of the period was ~~recorded in other operating income in~~approximately $14.0 million. During the Condensed Consolidated Statements of Operations. Additionally, in the third quarter of 2016, the Company sold three immaterial entities in the International segment, which resulted in a net loss of $0.3 million during the three and nine months ended September 30, ~~2016.~~2019, we reclassified $2.7 million of contract assets to receivables as a result of the completion of the performance obligation and the right to the consideration becoming unconditional.

The components of ~~the Company’s~~ inventories, net of excess and obsolescence reserves for raw materials and finished goods, at September 30, ~~2017~~2019 and December 31, ~~2016~~2018 were as follows:

The components of property, plant and equipment at September 30, 2019 and December 31, 2018 were as follows:

During the three and nine months ended September 30, 2019 depreciation expense was $30.2 million and $85.4 million, respectively. During the three and nine months ended September 30, 2018 depreciation expense was $30.9 million and $96.5 million, respectively.

~~The components of the Company’s property, plant and equipment at September 30, 2017 and December 31, 2016 were as follows:~~

During the three and nine months ended September 30, 2017, depreciation expense was $34.6 million and $105.2 million, respectively. During the three and nine months ended September 30, 2016, depreciation expense was $37.6 million and $116.2 million, respectively.

The ~~changes in the~~ carrying amount of goodwill ~~for the nine months ended~~at September 30, ~~2017~~2019 and December 31, 2018 were as follows:

	Variable			Strategic									Business Services			Marketing Solutions			Total
	Print			Services			International			Total
Net book value as of December 31, 2016
Net book value as of December 31, 2018
Goodwill	$	1,823.0		$	365.2		$	1,017.9		$	3,206.1		$	2,604.3		$	519.5		$	3,123.8
Accumulated impairment losses		(1,550.5	)		(148.7	)		(904.9	)		(2,604.1	)		(2,316.3	)		(254.1	)		(2,570.4	)
Total		272.5			216.5			113.0			602.0			288.0			265.4			553.4
Foreign exchange and other adjustments		—			—			6.9			6.9
Impairment charges		—			(21.3	)		—			(21.3	)
Net book value as of September 30, 2017
Acquisition														4.1			—			4.1
Foreign exchange														(2.6	)		—			(2.6	)

Net book value as of September 30, 2019
Goodwill		1,824.1			365.2			1,090.3			3,279.6			2,598.2			519.5			3,117.7
Accumulated impairment losses		(1,551.6	)		(170.0	)		(970.4	)		(2,692.0	)		(2,308.7	)		(254.1	)		(2,562.8	)
Total	$	272.5		$	195.2		$	119.9		$	587.6		$	289.5		$	265.4		$	554.9

~~During the third quarter of 2017, the Company recorded non-cash charges of $21.3 million to reflect the impairment of goodwill in the Strategic Services segment. See Note 7,~~ ~~Restructuring, Impairment and Other Charges, for further information.~~

The components of other intangible assets at September 30, ~~2017~~2019 and December 31, ~~2016~~2018 were as follows:

	September 30, 2017							December 31, 2016							September 30, 2019							December 31, 2018
	Gross							Gross							Gross							Gross
	Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book
	Amount		Amortization			Value		Amount		Amortization			Value		Amount		Amortization			Value		Amount		Amortization			Value

Customer relationships	$	532.9	$	(404.8	)	$	128.1	$	517.9	$	(370.7	)	$	147.2
Client relationships															$	518.3	$	(429.1	)	$	89.2	$	520.3	$	(425.5	)	$	94.8
Patents		2.0		(2.0	)		—		2.0		(2.0	)		—		2.0		(2.0	)		—		2.0		(2.0	)		—
Trademarks, licenses and agreements		26.2		(24.9	)		1.3		26.2		(24.4	)		1.8		24.6		(24.4	)		0.2		25.7		(25.2	)		0.5
Trade names		36.8		(15.7	)		21.1		36.8		(13.9	)		22.9		31.8		(15.6	)		16.2		34.6		(16.6	)		18.0
Total other intangible assets	$	597.9	$	(447.4	)	$	150.5	$	582.9	$	(411.0	)	$	171.9	$	576.7	$	(471.1	)	$	105.6	$	582.6	$	(469.3	)	$	113.3

Amortization expense for other intangible assets was ~~$7.1~~$5.9 million and ~~$21.6~~$18.1 million for the three and nine months ended September 30, ~~2017, respectively. Amortization expense for other intangible assets~~2019, respectively, and was ~~$8.0~~$6.8 million and ~~$25.7~~$20.7 million for the three and nine months ended September 30, ~~2016,~~2018, respectively.

For the three months ended September 30, 2019 and 2018, we recorded the following net restructuring and other (income) expenses:

~~Restructuring, Impairment and Other Charges Recognized in Results of Operations~~

~~For the three months ended September 30, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges:~~

Three Months Ended

Employee

Other
Restructuring

Total
Restructuring

Other

September 30, 2016

Terminations

Charges

Charges

Impairment

Charges

Total

Variable Print

$
1.1

$
0.3

$
1.4

$
—

$
0.5

$
1.9

Strategic Services

1.2

—

1.2

—

0.1

1.3

International

0.9

0.2

1.1

—

—

1.1

Corporate

6.5

0.1

6.6

(0.1
)

—

6.5

Total

$
9.7

$
0.6

$
10.3

$
(0.1
)

$
0.6

$
10.8

	Three Months Ended
	September 30, 2018
	Employee		Other Restructuring		Multi-Employer Pension Plan
	Terminations		Charges		Charges		Other		Total
Business Services	$	2.7	$	3.4	$	0.6	$	0.4	$	7.1
Marketing Solutions		0.1		—		0.1		—		0.2
Corporate		—		3.0		—		0.7		3.7
Total	$	2.8	$	6.4	$	0.7	$	1.1	$	11.0

For the nine months ended September 30, ~~2017~~2019 and ~~2016, the Company~~2018, we recorded the following net restructuring ~~impairment~~ and other ~~charges:~~expenses (income):

Nine Months Ended

Employee

Other
Restructuring

Total
Restructuring

Other

September 30, 2017

Terminations

Charges

Charges

Impairment

Charges

Total

Variable Print

$
4.0

$
0.9

$
4.9

$
(0.1
)

$
1.4

$
6.2

Strategic Services

1.8

0.3

2.1

21.8

0.3

24.2

International

6.4

2.2

8.6

—

—

8.6

Corporate

7.3

0.4

7.7

—

—

7.7

Total

$
19.5

$
3.8

$
23.3

$
21.7

$
1.7

$
46.7

	Nine Months Ended
	September 30, 2019
	Employee		Other Restructuring		Multi-Employer Pension Plan
	Terminations		Charges		Charges		Other			Total
Business Services	$	17.6	$	7.0	$	1.9	$	(4.6	)	$	21.9
Marketing Solutions		0.4		0.1		0.3		—			0.8
Corporate		1.5		6.6		—		—			8.1
Total	$	19.5	$	13.7	$	2.2	$	(4.6	)	$	30.8

Nine Months Ended

Employee

Other
Restructuring

Total
Restructuring

Other

September 30, 2016

Terminations

Charges

Charges

Impairment

Charges

Total

Variable Print

$
1.5

$
1.5

$
3.0

$
0.3

$
1.4

$
4.7

Strategic Services

1.7

—

1.7

—

0.3

2.0

International

7.4

1.3

8.7

(2.5
)

—

6.2

Corporate

10.1

0.1

10.2

1.2

—

11.4

Total

$
20.7

$
2.9

$
23.6

$
(1.0
)

$
1.7

$
24.3

	Nine Months Ended
	September 30, 2018
	Employee		Other Restructuring		Multi-Employer Pension Plan
	Terminations		Charges		Charges		Other			Total
Business Services	$	8.8	$	5.2	$	1.9	$	(4.3	)	$	11.6
Marketing Solutions		1.9		—		0.3		1.5			3.7
Corporate		0.5		6.3		—		0.7			7.5
Total	$	11.2	$	11.5	$	2.2	$	(2.1	)	$	22.8

For the three and nine months ended September 30, 2019, we recorded net restructuring charges of $0.6 million and $19.5 million, respectively, 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 $1.0 million and $13.7 million for the three and nine months ended September 30, 2019 are primarily comprised of increased reserves for employee termination litigation, environmental matters and lease terminations. Additionally, we recorded net gains of $4.7 million and $4.6 million on the sale of restructured facilities for the three and nine months ended September 30, 2019, respectively.

For the three and nine months ended September 30, 2018, we recorded net restructuring charges of $2.8 million and $11.2 million, respectively, for employee termination costs. These charges primarily related to the reorganization of selling, general and administrative functions across each segment and three facility closures in the Business Services segment. We also incurred charges for lease termination and other restructuring of $6.4 million and $11.5 million and multi-employer pension plan (“MEPP”) withdrawal obligations of $0.7 million and $2.2 million for the three and nine months ended September 30, 2018, respectively. Additionally, we recorded a $5.4 million net gain on the sale of previously impaired assets in the Business Services segment for the nine months ended September 30, 2018. These assets were impaired in 2015. We also recorded impairment charges related to facility closures of $3.3 million for the nine months ended September 30, 2018.

~~For~~Restructuring and MEPP reserves as of December 31, 2018 and September 30, 2019, and changes during the ~~three and~~ nine months ended September 30, ~~2017,~~2019, were as follows:

The current portion of restructuring reserves of $17.8 million at September 30, 2019 was included in Accrued liabilities and other, while the ~~Company recorded net restructuring charges~~long-term portion of ~~$10.7~~$38.7 million, primarily related to MEPP withdrawal obligations, employee terminations in litigation, environmental matters and lease liabilities related to restructured facilities, was included in Other noncurrent liabilities at September 30, 2019. 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 $6.6 million and ~~$19.5~~$34.9 million, respectively, as of September 30, 2019.

We anticipate that payments associated with the employee terminations reflected in the above table will be substantially completed by September 2020, excluding employee terminations in litigation within the Business Services segment.

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.

The restructuring liabilities classified as “other” primarily consisted of reserves for employee termination ~~costs. These charges primarily relate to the reorganization of selling, general~~litigation, environmental matters and administrative functions primarily within the Corporate, International and Variable Print segments, the termination of the Company’s relationship in a joint venture within the International segment and a facility closure in the Strategic Services segment. For the three and nine months ended September 30, 2017, the Company recorded net impairment charges of $21.5 million and $21.7 million, respectively, primarilylease liabilities related to ~~the $21.3 million impairment~~restructured facilities. Any potential recoveries or additional charges could affect amounts reported in our consolidated financial statements.

Components of ~~the goodwill for the digital~~net pension and ~~creative solutions~~other postretirement benefits plan (“~~DCS”~~OPEB”) reporting unit, which is included within the Strategic Services segment. The goodwill impairment charge in the DCS reporting unit was due to the notification from a major customer that they will be transitioning their business away from DCS beginning in the fourth quarter of 2017 as well as declines in sales with other existing customers which resulted in lower expectations of future revenues, profitability and cash flows compared to expectations as of the October 31, 2016 annual goodwill impairment test. As of September 30, 2017, the DCS reporting unit had no remaining goodwill. The goodwill impairment charges were determined using Level 3 inputs, including comparable marketplace fair value data and a ~~discounted cash flow analysis. The remaining impairment charges recorded~~income for the three and nine months ended September 30, ~~2017, were primarily due to the impairment of equipment associated with the facility closure in the Strategic Services segment. Additionally, the Company incurred lease termination~~2019 and ~~other restructuring charges of $1.1 million and $3.8 million, respectively, for the three and nine months ended September 30, 2017.~~

For the three and nine months ended September 30, 2016, the Company recorded net restructuring charges of $9.7 million and $20.7 million, respectively, for employee termination costs. These charges primarily related to two facility closures in the International segment and the reorganization of certain administrative functions and operations. Additionally, the Company incurred lease termination and other restructuring charges of $0.6 million and $2.9 million for the three and nine months ended September 30, 2016, respectively. For the three and nine months ended September 30, 2016, the Company recognized $0.1 million and $1.0 million, respectively, of net gains on the sale of previously impaired assets, partially offset by impairment charges related to buildings and machinery and equipment associated with facility closures.

For the three and nine months ended September 30, 2017 and 2016, the Company recorded other charges of $0.5 million and $1.7 million and $0.6 million and $1.7 million, respectively, for multi-employer pension plan withdrawal obligations unrelated to facility closures. The total liabilities for the withdrawal obligations associated with the Company’s decision to withdraw from multi-employer pension plans included in accrued liabilities and other noncurrent liabilities are $5.1 million and $32.4 million, respectively, as of September 30, 2017.

The Company’s multi-employer pension plan withdrawal liabilities could be affected by the financial stability of other employers participating in the plans and any decisions by those employers to withdraw from the plans in the future. While it is not possible to quantify the potential impact of future events or circumstances, reductions in other employers’ participation in multi-employer pension plans, including certain plans from which the Company has previously withdrawn, could have a material impact on the Company’s previously estimated withdrawal liabilities, consolidated results of operations, financial position or cash flows.

~~The restructuring reserve as of December 31, 2016 and September 30, 2017, and changes during the nine months ended September 30, 2017,~~2018 were as follows:

Foreign

December 31,

Restructuring

Exchange and

Cash

September 30,

2016

Charges

Other

Paid

2017

Employee terminations

$
7.6

$
19.5

$
—

$
(13.5
)

$
13.6

Multi-employer pension withdrawal obligations

11.8

0.6

(0.1
)

(1.1
)

11.2

Lease terminations and other

1.6

3.2

1.2

(2.8
)

3.2

Total

$
21.0

$
23.3

$
1.1

$
(17.4
)

$
28.0

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Pension expense (income):
Service cost	$	0.2		$	0.1		$	0.7		$	0.5
Interest cost		8.2			7.7			24.9			23.4
Expected return on plan assets		(11.5	)		(12.4	)		(34.7	)		(37.6	)
Amortization, net		1.6			2.0			4.6			5.9
Settlements		—			0.2			—			1.5
Net pension income	$	(1.5	)	$	(2.4	)	$	(4.5	)	$	(6.3	)

OPEB expense (income):
Service cost	$	—		$	(0.3	)	$	—		$	0.5
Interest cost		2.7			2.5			7.7			7.7
Expected return on plan assets		(3.3	)		(3.5	)		(9.9	)		(10.5	)
Amortization, net		(1.9	)		(0.8	)		(5.4	)		(2.2	)
Other		—			(5.1	)		—			(5.1	)
Net OPEB income	$	(2.5	)	$	(7.2	)	$	(7.6	)	$	(9.6	)

The current portion of restructuring reserves of $14.4 million at September 30, 2017 was included in accrued liabilities, while the long-term portion of $13.6 million, primarily related to multi-employer pension plan withdrawal obligations related to facility closures, was included in other noncurrent liabilities at September 30, 2017.

~~The Company anticipates that payments associated with~~During the ~~employee terminations reflected~~nine months ended September 30, 2019 and 2018, we contributed $5.1 million and $13.5 million, respectively, to our retirement plans.

Other OPEB income during the three and nine months ended September 30, 2018 reflects the change in one of our OPEB liabilities due to a revision to participant demographic data utilized in the ~~above table will be substantially completed by September 2018.~~

Payments on all of the Company’s multi-employer pension plan withdrawal obligations are scheduled to be completed by 2036. Changes based on uncertainties in these estimated withdrawal obligations could affect the ultimate charges related to multi-employer pension plan withdrawals.

The restructuring liabilities classified as “lease terminations and other” consisted of lease terminations, other facility closing costs and contract termination costs. Payments on certain of the lease obligations are scheduled to continue until 2020. Market conditions and the Company’s ability to sublease these properties could affect the ultimate charges related to the lease obligations. Any potential recoveries or additional charges could affect amounts reported in the Company’s financial statements.

~~The components of the estimated net pension~~Share-based compensation expense was $2.6 million and ~~other postretirement benefits plan income~~$9.3 million for the three and nine months ended September 30, ~~2017~~2019, respectively, and ~~2016 were as follows:~~

The Company expects to make cash contributions of approximately $17.0 million to its pension and other postretirement benefit plans in 2017. During the nine months ended September 30, 2017, the Company contributed $12.4 million to its benefit plans.

In the fourth quarter of 2015, the Company communicated to certain former employees the option to receive a lump-sum pension payment or annuity with payments computed in accordance with statutory requirements, beginning in the second quarter of 2016. Payments to eligible participants who elected to receive a lump-sum pension payment or annuity were funded from existing pension plan assets and liabilities were remeasured as of the payout date. The discount rates and actuarial assumptions used to calculate the payouts were determined in accordance with federal regulations. The company recorded total non-cash settlement charges of $1.6was $2.2 million and ~~$98.0~~$6.4 million of which $0.3 million and $20.7 million is included within selling, general and administrative expenses and $1.3 million and $77.3 million is included within income from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2016,~~2018, respectively. ~~These charges resulted from~~

In March 2019, we awarded our annual share-based compensation grants, which consisted of 0.6 million restricted stock units with a grant date fair value of $4.77 per unit and 0.6 million performance share units also with a grant date fair value of $4.77 per unit. The restricted stock units are subject to a three year graded vesting period and the ~~recognition~~performance share units are subject to a 34 month cliff vesting period. Dividends are not paid on restricted stock units.

In addition, in ~~earnings~~March 2019 we granted 1.3 million cash-settled restricted stock units (“phantom restricted stock units”) and 0.4 million cash-settled performance stock units (“phantom performance stock units”). Our share price on the date of grant was $5.03. The phantom restricted stock units vest and are payable in three equal installments over a ~~portion~~period of three years after the grant date. The phantom performance stock units are subject to a 34 month cliff vesting period. 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. Phantom 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 ~~actuarial losses recorded in accumulated other comprehensive loss based on the proportion~~grantee, termination of the ~~obligation settled.~~

~~During~~grantee’s employment under certain circumstances or a change in control of the ~~third quarter~~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 Condensed Consolidated Balance Sheets. Compensation expense for these awards is measured based upon the fair value of ~~2016,~~ the ~~Company announced~~awards at the ~~discontinuation~~end of ~~retiree medical, prescription drug and life insurance benefits for individuals retiring~~each reporting period. Dividends are not paid on or after October 1, 2016. This change was accounted for as a significant plan amendment and the other postemployment benefit plan obligations were remeasured as of September 30, 2016. This remeasurement resulted in a curtailment gain of $16.4 million within cost of sales and $3.3 million in selling, general and administrative expenses during the three and nine months ended September 30, 2016. phantom stock units.

~~Share-based compensation expense from continuing operations totaled $2.1 million for both~~Our equity as of December 31, 2018 and September 30, 2019, and changes during the three ~~months ended September 30, 2017~~ and ~~2016, respectively, and $6.4 million and $7.9 million for the~~ nine months ended September 30, 2019, were as follows:

	Common		Additional Paid-in-			Treasury			Accumulated			Accumulated Other Comprehensive			Total RRD's Stockholders'			Noncontrolling			Total
	Stock		Capital			Stock			Deficit			Loss			Equity			Interests			Equity
Balance at December 31, 2018	$	0.9	$	3,404.0		$	(1,285.5	)	$	(2,225.7	)	$	(153.8	)	$	(260.1	)	$	14.7		$	(245.4	)
Net (loss) income										(8.8	)					(8.8	)		0.3			(8.5	)
Other comprehensive income													1.4			1.4			0.2			1.6
Share-based compensation				3.4												3.4						3.4
Issuance of share-based awards, net of withholdings and other				(54.7	)		53.8									(0.9	)					(0.9	)
Cash dividends paid										(2.1	)					(2.1	)					(2.1	)
Cumulative impact of adopting ASU 2016-02, net of tax										2.6						2.6						2.6
Distributions to noncontrolling interests																—			(0.7	)		(0.7	)
Balance at March 31, 2019	$	0.9	$	3,352.7		$	(1,231.7	)	$	(2,234.0	)	$	(152.4	)	$	(264.5	)	$	14.5		$	(250.0	)
Net loss										(7.0	)					(7.0	)		(0.4	)		(7.4	)
Other comprehensive loss													(2.4	)		(2.4	)		(0.1	)		(2.5	)
Share-based compensation				3.3												3.3						3.3
Issuance of share-based awards, net of withholdings and other				(0.5	)		0.5									—						—
Cash dividends paid										(2.2	)					(2.2	)					(2.2	)
Spinoff adjustments										(12.0	)					(12.0	)					(12.0	)
Balance at June 30, 2019	$	0.9	$	3,355.5		$	(1,231.2	)	$	(2,255.2	)	$	(154.8	)	$	(284.8	)	$	14.0		$	(270.8	)
Net income										12.6						12.6			0.3			12.9
Other comprehensive loss													(19.1	)		(19.1	)		(0.4	)		(19.5	)
Share-based compensation				2.6												2.6						2.6
Issuance of share-based awards, net of withholdings and other				(0.8	)		0.8									—						—
Cash dividends paid										(2.1	)					(2.1	)					(2.1	)
Distributions to noncontrolling interests																—						—
Balance at September 30, 2019	$	0.9	$	3,357.3		$	(1,230.4	)	$	(2,244.7	)	$	(173.9	)	$	(290.8	)	$	13.9		$	(276.9	)

On October 1, 2016, we completed the separation of LSC Communications, Inc. and Donnelley Financial Solutions, Inc. (“Spin Companies”) into two separate publicly-traded companies. The distribution of the Spin Companies was recorded as a reduction in Stockholder's Equity during the fourth quarter of 2016. During the second quarter of 2019, we identified an error in the accounting for the distribution of the Spin Companies. As a result, the error, which was determined by management to be immaterial to the previously issued Consolidated Financial Statements, has been corrected herein by increasing Accumulated Deficit by $12.0 million.

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 one one-thousandth of a newly issued share of Series A Junior Participating Preferred Stock at an exercise price of $12, 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 10% (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, 2020, unless redeemed, exchanged or terminated earlier by the Company. At any time until 10 business days following the Stock Acquisition Date, the Company may redeem the rights for $0.001 per right.

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 one 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 March 2017, the Company awarded its annual share-based compensation grants, which consisted of 569,594 restricted stock units with a grant date fair value of $16.30 per unit~~September 30, 2018, and ~~304,425 performance share units with a grant date fair value of $16.30 per unit. The restricted stock units are subject to a~~changes during three ~~year graded vesting period. The performance share units are subject to a 34 month cliff vesting period. Additionally, during the~~and nine months ended September 30, ~~2017, the Company awarded 102,191 restricted stock units with a weighted average grant date fair value of $11.77 per share and a weighted average vesting period of 1.5 years.~~

~~The Company’s equity as of December 31, 2016 and September 30, 2017, and changes during the nine months ended September 30, 2017,~~2018, were as follows:

RRD

Stockholders'

Noncontrolling

Equity

Interest

Total Equity

Balance at December 31, 2016

$
(105.7
)

$
13.5

$
(92.2
)
Net earnings

18.4

0.7

19.1

Other comprehensive (loss) income

(70.8
)

0.4

(70.4
)
Share-based compensation

6.4

—

6.4

Spinoff adjustments

5.9

—

5.9

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

(1.7
)

—

(1.7
)
Cash dividends paid

(29.4
)

—

(29.4
)
Distributions to noncontrolling interests

—

(0.7
)

(0.7
)
Balance at September 30, 2017

$
(176.9
)

$
13.9

$
(163.0
)

	Common		Additional Paid-in-			Treasury			Accumulated			Accumulated Other Comprehensive			Total RRD's Stockholders'			Noncontrolling			Total
	Stock		Capital			Stock			Deficit			Loss			Equity			Interests			Equity
Balance at December 31, 2017	$	0.9	$	3,444.0		$	(1,333.1	)	$	(2,225.7	)	$	(103.7	)	$	(217.6	)	$	14.7		$	(202.9	)
Net (loss) income										(9.6	)					(9.6	)		0.3			(9.3	)
Other comprehensive income													21.0			21.0			0.5			21.5
Share-based compensation				1.2												1.2						1.2
Issuance of share-based awards, net of withholdings and other				(32.7	)		31.9			(0.1	)					(0.9	)					(0.9	)
Cash dividends paid										(9.8	)					(9.8	)					(9.8	)
Cumulative impact of adopting ASU 2014-09, net of tax										12.9						12.9						12.9
Distributions to noncontrolling interests																—			(1.0	)		(1.0	)
Balance at March 31, 2018	$	0.9	$	3,412.5		$	(1,301.2	)	$	(2,232.3	)	$	(82.7	)	$	(202.8	)	$	14.5		$	(188.3	)
Net (loss) income										(13.0	)					(13.0	)		0.4			(12.6	)
Other comprehensive loss													(39.3	)		(39.3	)		(0.6	)		(39.9	)
Share-based compensation				3.0												3.0						3.0
Issuance of share-based awards, net of withholdings and other				(4.5	)		4.5			0.1						0.1						0.1
Cash dividends paid										(9.8	)					(9.8	)					(9.8	)
Balance at June 30, 2018	$	0.9	$	3,411.0		$	(1,296.7	)	$	(2,255.0	)	$	(122.0	)	$	(261.8	)	$	14.3		$	(247.5	)
Net income										34.3						34.3			0.5			34.8
Other comprehensive loss													(6.4	)		(6.4	)		(0.4	)		(6.8	)
Share-based compensation				2.2												2.2						2.2
Issuance of share-based awards, net of withholdings and other				(0.9	)		0.9									—						—
Cumulative impact of adopting ASU 2018-02, net of tax										22.1			(22.1	)		—						—
Cash dividends paid										(2.2	)					(2.2	)					(2.2	)
Balance at September 30, 2018	$	0.9	$	3,412.3		$	(1,295.8	)	$	(2,200.8	)	$	(150.5	)	$	(233.9	)	$	14.4		$	(219.5	)

During the nine months ended September 30, 2017, the Company recorded certain spinoff related adjustments within equity primarily resulting from the final pension asset valuation as required by the Separation and Distribution Agreement.

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 ~~considered anti-dilutive and~~ 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 ~~the Company’s~~our stock price during the applicable period. In periods when ~~the Company is~~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 anti-dilutive effect.

During the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, no shares of common stock were purchased by ~~the Company;~~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 three and nine months ended September 30, 2017 and 2016 was as follows:

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

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

Continuing operations

$
(0.11
)

$
0.31

$
0.26

$
0.03

Discontinued operations

—

(0.41
)

—

0.23

Net (loss) earnings attributable to RRD stockholders

$
(0.11
)

$
(0.10
)

$
0.26

$
0.26

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

Continuing operations

$
(0.11
)

$
0.31

$
0.26

$
0.03

Discontinued operations

—

(0.41
)

—

0.23

Net (loss) earnings attributable to RRD stockholders

$
(0.11
)

$
(0.10
)

$
0.26

$
0.26

Numerator

Net (loss) earnings attributable to RRD common stockholders - continuing operations

$
(8.0
)

$
22.0

$
18.4

$
2.4

Net (loss) earnings from discontinued operations, net of income taxes

—

(29.1
)

—

15.8

Net (loss) earnings attributable to RRD common stockholders

$
(8.0
)

$
(7.1
)

$
18.4

$
18.2

Denominator:

Weighted average number of common shares outstanding

70.2

70.0

70.1

70.0

Dilutive options and awards

—

0.5

0.2

0.5

Diluted weighted average number of common shares outstanding

70.2

70.5

70.3

70.5

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

Stock options

1.3

0.8

1.0

0.7

Performance share units

0.3

0.2

0.3

0.2

Restricted stock units

1.1

0.3

0.7

—

Total

2.7

1.3

2.0

0.9

Dividends declared per common share

$
0.14

$
0.78

$
0.42

$
2.34

~~The components of other comprehensive income (loss) and income tax (benefit) expense allocated to each component for the three and nine months ended September 30, 2017 and 2016 were as follows:~~

~~During~~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 three and nine months ended September 30, ~~2016, translation adjustments~~2019 and 2018 were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018			2019			2018
Net income (loss) per share attributable to RRD common stockholders:
Basic	$	0.18	$	0.49	$	(0.04	)	$	0.17
Diluted	$	0.18	$	0.49	$	(0.04	)	$	0.17

Numerator:
Net income (loss) attributable to RRD common stockholders	$	12.6	$	34.3	$	(3.2	)	$	11.7

Denominator:
Basic weighted average number of common shares outstanding		71.4		70.6		71.2			70.5
Dilutive options and awards		—		0.1		—			0.3
Diluted weighted average number of common shares outstanding		71.4		70.7		71.2			70.8

Weighted average number of anti-dilutive share-based awards:
Stock options		0.4		0.7		0.5			0.9
Restricted stock units		1.3		0.5		1.0			0.6
Total		1.7		1.2		1.5			1.5

Dividends declared per common share	$	0.03	$	0.03	$	0.09		$	0.31

The components of other comprehensive loss and income tax (benefit) expense ~~on pension~~allocated to each component for the three and ~~other postretirement benefits plan cost were adjusted to reflect previously recorded deferred taxes at their historical exchange rates.~~

~~Accumulated other comprehensive loss by component as of December 31, 2016 and September 30, 2017, and changes during the~~ nine months ended September 30, ~~2017,~~2019 and 2018 were as follows:

~~Accumulated other comprehensive loss by component as of December 31, 2015 and September 30, 2016, and changes during the nine months ended September 30, 2016, were as follows:~~

Accumulated other comprehensive (loss) income by component as of December 31, 2018 and September 30, 2019, and changes during the nine months ended September 30, 2019, were as follows:

Accumulated other comprehensive (loss) income by component as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018, were as follows:

Reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Classification in the Condensed Consolidated	Three Months Ended September 30,						Nine Months Ended September 30,						Classification in the Condensed
	2017			2016			2017			2016			Statements of Operations	2019			2018			2019			2018			Consolidated Statements of Operations
Translation Adjustments:	Translation Adjustments:
Net realized loss	$	2.8			—		$	2.8			—		Selling, general and administrative expenses
Reclassifications before tax		2.8			—			2.8			—
Income tax benefit		—			—			—			—
Net realized gain, before tax														$	—		$	—		$	(4.5	)	$	—		Other operating expense (income)
Reclassification, net of tax	$	2.8		$	—		$	2.8		$	—			$	—		$	—		$	(4.5	)	$	—
Amortization of pension and other postretirement benefits plan cost:

Amortization of pension and OPEB cost:
Net actuarial loss	$	1.9		$	7.8		$	5.4		$	23.5		Cost of sales; Selling, general and administrative expenses	$	1.1		$	2.0		$	3.3		$	5.9		Investment and other income-net
Net prior service credit		(0.7	)		(4.0	)		(2.2	)		(12.0	)	Cost of sales; Selling, general and administrative expenses		(1.4	)		(0.8	)		(4.1	)		(2.2	)	Investment and other income-net
Settlements		—			1.6			—			98.5		Cost of sales; Selling, general and administrative expenses		—			0.2			—			1.5		Investment and other income-net
Curtailments		—			(19.7	)		—			(19.7	)	Cost of sales; Selling, general and administrative expenses
Reclassifications before tax		1.2			(14.3	)		3.2			90.3
Income tax expense (benefit)		0.5			(7.9	)		1.1			35.1
Reclassification, net of tax	$	0.7		$	(6.4	)	$	2.1		$	55.2
Available-for-sale securities:
Net realized gain on equity securities		(1.8	)		—			(52.8	)		—		Investment and other income-net
Reclassifications before tax		(1.8	)		—			(52.8	)		—				(0.3	)		1.4			(0.8	)		5.2
Income tax benefit		—			—			18.0			—				(0.1	)		0.4			(0.2	)		1.1
Reclassification, net of tax		(1.8	)		—			(70.8	)		—				(0.2	)		1.0		$	(0.6	)	$	4.1
Total reclassifications, net of tax	$	1.7		$	(6.4	)	$	(65.9	)	$	55.2			$	(0.2	)	$	1.0		$	(5.1	)	$	4.1

~~The Company’s segments and their product and service offerings are summarized below:~~

This segment includes the Company’s U.S. short-run and transactional printing operations. This segment’s primary product offerings include commercial and digital print, direct mail, labels, statement printing, forms and packaging.

~~This segment includes the Company’s logistics services, print management offerings and digital and creative solutions.~~

This segment includes the Company’s non-U.S. printing operations in Asia, Latin America, Canada and Europe. This segment’s primary product and service offerings include packaging, books, catalogs, magazines, retail inserts, statement printing, commercial and digital print, forms, labels, logistics services, directories, digital and creative solutions, and direct mail. Additionally, this segment includes the Company’s business process outsourcing and Global Turnkey Solutions operations. Business process outsourcing provides transactional print and outsourcing services, statement printing, direct mail and print management offerings through its operations in Europe, Asia and North America. Global Turnkey Solutions provides outsourcing capabilities, including product configuration, customized kitting and order fulfillment for technology, medical device and other companies around the world through its operations in Europe, North America and Asia.

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, logistics, 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.

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

~~The Company has~~We have disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by ~~the Company’s~~our chief operating decision-maker and is most consistent with the presentation of profitability reported within the Condensed Consolidated Financial Statements.

Income (Loss)

Depreciation

Total

Intersegment

Net

from

and

Capital

Sales

Sales

Sales

Operations

Amortization

Expenditures

Three Months Ended September 30, 2017

Variable Print

$
771.7

$
(4.2
)

$
767.5

$
39.3

$
28.5

$
6.3

Strategic Services

483.5

(39.8
)

443.7

(14.8
)

3.8

(0.2
)
International

532.6

(8.9
)

523.7

20.6

13.7

11.9

Total operating segments

1,787.8

(52.9
)

1,734.9

45.1

46.0

18.0

Corporate

—

—

—

(9.2
)

1.0

5.0

Total operations

$
1,787.8

$
(52.9
)

$
1,734.9

$
35.9

$
47.0

$
23.0

	Three Months Ended
	September 30, 2019
															Assets of
								Income (Loss)			Depreciation				Operations
	Total		Intersegment			Net		from			and		Capital		As of
	Sales		Sales			Sales		Operations			Amortization		Expenditures		September 30, 2019
Business Services	$	1,303.0	$	(27.0	)	$	1,276.0	$	80.6		$	26.2	$	17.6	$	2,533.2
Marketing Solutions		352.0		(8.6	)		343.4		24.4			14.7		8.0		766.7
Total operating segments		1,655.0		(35.6	)		1,619.4		105.0			40.9		25.6		3,299.9
Corporate		—		—			—		(31.2	)		2.6		5.4		240.6
Total operations	$	1,655.0	$	(35.6	)	$	1,619.4	$	73.8		$	43.5	$	31.0	$	3,540.5

Income (Loss)

Depreciation

Total

Intersegment

Net

from

and

Capital

Sales

Sales

Sales

Operations

Amortization

Expenditures

Three Months Ended September 30, 2016

Variable Print

$
796.8

$
(6.5
)

$
790.3

$
50.1

$
30.5

$
15.0

Strategic Services

486.9

(41.9
)

445.0

13.3

4.3

-

International

501.5

(11.2
)

490.3

36.0

14.8

6.3

Total operating segments

1,785.2

(59.6
)

1,725.6

99.4

49.6

21.3

Corporate

—

—

—

(15.4
)

1.4

7.4

Total operations

$
1,785.2

$
(59.6
)

$
1,725.6

$
84.0

$
51.0

$
28.7

	Three Months Ended
	September 30, 2018
															Assets of
								Income (Loss)			Depreciation				Operations
	Total		Intersegment			Net		from			and		Capital		As of
	Sales		Sales			Sales		Operations			Amortization		Expenditures		December 31, 2018
Business Services	$	1,385.7	$	(22.5	)	$	1,363.2	$	74.8		$	31.5	$	14.6	$	2,764.5
Marketing Solutions		295.6		(9.3	)		286.3		11.8			11.7		2.7		674.6
Total operating segments		1,681.3		(31.8	)		1,649.5		86.6			43.2		17.3		3,439.1
Corporate		—		—			—		(25.7	)		1.0		7.4		201.7
Total operations	$	1,681.3	$	(31.8	)	$	1,649.5	$	60.9		$	44.2	$	24.7	$	3,640.8

Income (Loss)

Depreciation

Total

Intersegment

Net

from

and

Capital

Sales

Sales

Sales

Operations

Amortization

Expenditures

Nine Months Ended September 30, 2016

Variable Print

$
2,326.3

$
(14.5
)

$
2,311.8

$
144.0

$
90.5

$
45.5

Strategic Services

1,343.9

(114.3
)

1,229.6

25.3

14.0

13.1

International

1,465.7

(33.0
)

1,432.7

101.8

46.7

23.8

Total operating segments

5,135.9

(161.8
)

4,974.1

271.1

151.2

82.4

Corporate

—

—

—

(104.8
)

2.3

16.5

Total operations

$
5,135.9

$
(161.8
)

$
4,974.1

$
166.3

$
153.5

$
98.9

	Nine Months Ended
	September 30, 2019
								Income (Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Business Services	$	3,812.7	$	(69.2	)	$	3,743.5	$	150.8		$	82.1	$	60.4
Marketing Solutions		930.9		(24.4	)		906.5		38.9			38.2		31.6
Total operating segments		4,743.6		(93.6	)		4,650.0		189.7			120.3		92.0
Corporate		—		—			—		(71.7	)		5.9		15.4
Total operations	$	4,743.6	$	(93.6	)	$	4,650.0	$	118.0		$	126.2	$	107.4

	Nine Months Ended
	September 30, 2018
								Income (Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Business Services	$	4,265.4	$	(77.1	)	$	4,188.3	$	152.9		$	98.7	$	51.6
Marketing Solutions		876.2		(27.7	)		848.5		32.7			35.3		8.1
Total operating segments		5,141.6		(104.8	)		5,036.8		185.6			134.0		59.7
Corporate		—		—			—		(67.0	)		3.5		13.0
Total operations	$	5,141.6	$	(104.8	)	$	5,036.8	$	118.6		$	137.5	$	72.7

Net restructuring and other ~~charges~~(income) expenses by segment are described in Note 7,6, Restructuring ~~Impairment~~ and Other ~~Charges~~.

~~The Company is~~We are subject to laws and regulations relating to the protection of the environment. ~~The Company provides~~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. ~~The Company has~~We have been designated as a potentially responsible party or ~~has~~have received claims in ~~three~~two active federal and state Superfund and other multiparty remediation sites. In addition to these sites, ~~the Company~~we may also have the obligation to remediate ~~seven~~six other previously and currently owned facilities. At the Superfund sites, the Comprehensive Environmental Response, Compensation and Liability Act provides that ~~the Company’s~~our liability could be joint and several, meaning that ~~the Company~~we could be required to pay an amount in excess of ~~its~~our proportionate share of the remediation costs.

~~The Company’s~~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 ~~the Company’s~~our estimated liability. ~~The Company established~~We believe that our recorded reserves, recorded in ~~accrued~~Accrued liabilities and other and Other noncurrent liabilities, ~~that it believes~~ are adequate to cover ~~its~~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 ~~the Company~~we may undertake in the future. However, in ~~the~~our opinion, ~~of management,~~ compliance with the present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material effect on ~~the Company’s~~our consolidated results of operations, financial position or cash flows.

From time to time, ~~the Company’s customers~~our clients and others file voluntary petitions for reorganization under United States bankruptcy laws. In such cases, certain pre-petition payments received by ~~the Company~~us from these parties could be considered preference items and subject to return. In addition, ~~the Company~~we may be party to certain litigation arising in the ordinary course of business. ~~Management believes~~We believe that the final resolution of these preference items and litigation will not have a material effect on ~~the Company’s~~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 DOJ has informed us that the Brazil authorities are also investigating the matter.

~~The Company’s debt~~We determine if an arrangement is a lease at ~~September 30, 2017~~inception. Operating leases are recorded in Operating lease assets, Short-term operating lease liabilities and ~~December 31, 2016 consisted of~~Long-term operating lease liabilities on the ~~following:~~

~~The fair values of~~Condensed Consolidated Balance Sheets. Operating lease assets represent our right to use an underlying asset for the ~~senior notes~~lease term and ~~debentures, which were determined using~~lease liabilities represent our obligation to make lease payments arising from the ~~market approach~~lease. Operating lease assets and liabilities are recognized at the lease commencement date based ~~upon interest rates available to~~on the ~~Company for borrowings with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. The fair~~present value of lease payments over the ~~Company’s debt was greater than its book~~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 ~~approximately $38.9 million and $4.3 million at September 30, 2017 and December 31, 2016, respectively.~~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 initial 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.

~~On September 29, 2017, t~~he Company entered into an asset-based revolving credit facility pursuant to the second amended and restated credit agreement (the “Credit Agreement”) which amended and restated the Company’s $800.0 million senior secured revolving credit facility dated September 30, 2016. The Credit Agreement provides for a senior secured asset-based revolving credit facility of up to $800.0 million subject to a borrowing base. The amount available to be borrowed under the Credit Agreement is equal to the lesser of (a) $800.0 million and (b) the aggregate amount of accounts receivable, inventory, machinery and equipment and fee-ownedOur most significant leases are real estate ~~of the Company~~leases for plants, warehouses, storage facilities, offices and ~~certain of its domestic subsidiaries (the “Guarantors”)~~ ~~(collectively, the “Borrowing Base”), subject to certain eligibility criteria and advance rates. The aggregate amount of~~other facilities. For real estate ~~machinery~~leases, we elected the practical expedient permitted under Topic 842 to combine lease and ~~equipment that can be included in the Borrowing Base cannot exceed $200.0 million.~~ 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 ~~amendment,~~asset and rental payments adjusted periodically for inflation. Pass-through charges, payments due to change in usage of the ~~Company recognized a $6.2 million loss related~~asset and payments due to ~~unamortized debt issuance costs and other expenses~~changes in inflation are included within ~~loss on debt extinguishments in the Condensed Consolidated Statements~~variable rent expense.

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

The components of ~~Operations~~lease expense for the three and nine months ended September 30, ~~2017. Additionally,~~2019 were as follows:

Supplemental cash flow information related to leases for the ~~Company had approximately $0.6 million of accrued financing fees as of~~ nine months ended September 30, ~~2017~~ ~~related to this transaction.~~2019 was as follows:

~~The Credit Agreement is scheduled to mature on September 29, 2022, at which time all outstanding amounts under the Credit Agreement will be due and payable.~~ ~~The proceeds of the loans under the Credit Agreement may be used for working capital and general corporate purposes.~~

Any borrowings under the Credit Agreement will bear interest at a rate dependent on the average quarterly availability under the Credit Agreement and will be calculated according to a base rate or a Eurocurrency rate plus an applicable margin. The applicable margin for base rate loans ranges from 0.25% to 0.50% and the applicable margin for Eurocurrency loans ranges from 1.25% to 1.50%. In addition, an unused line fee is payable quarterly on the unused portion of the amount available to be borrowed under the Credit Agreement. The unused line fee accrues at a rate of either 0.250% or 0.375% depending upon the average usage of the facility.

The Company’s obligations under the Credit Agreement are guaranteed by the Guarantors and are secured by a security interest in certain assets of the Company and its domestic subsidiaries, including accounts receivable, inventory, deposit accounts, securities

~~accounts, investment property, machinery~~As of September 30, 2019, the future lease payments under operating leases were as follows:

Rent expense for facilities in use and equipment ~~and, to the extent related to the foregoing, general intangibles, documents, instruments and chattel paper, as well as 65% of the equity interests of their first-tier foreign subsidiaries.~~

The Credit Agreement contains customary restrictive covenants, including a covenant which requires the Company to maintain a minimum fixed charge coverage ratio under certain circumstances. In addition, the Company’s ability to undertake certain actions, including, among other things, prepay certain junior debt, incur additional unsecured indebtedness and make certain restricted payments depends on satisfaction of certain conditions, including, among other things, meeting minimum availability thresholds under the Credit Agreement.

~~The weighted average interest rate on borrowings under the credit facilities~~ was ~~3.7% and 2.2% during the nine months ended September 30, 2017 and 2016, respectively.~~

On June 7, 2017, the Company repurchased $41.7 million of the 6.625% debentures due April 15, 2029, $59.4 million of the 6.50% senior notes due November 15, 2023 and $101.7 million of the 6.00% senior notes due April 1, 2024 using borrowings under the prior credit agreement. The repurchases resulted in a net gain of $0.8 million which was recognized within loss on debt extinguishments ~~in the Condensed Consolidated Statements of Operations~~ for the nine months ended September 30, 2017 related to the difference between the fair value of the debt repurchased and the principal outstanding, partially offset by the premiums paid, unamortized debt issuance costs and other expenses.

On May 22, 2017, certain third party financial institutions (such financial institutions collectively, the “Third Party Purchasers”), launched cash tender offers for certain of the Company’s outstanding debt securities, including the Company’s 7.625% senior notes due June 15, 2020 and 7.875% senior notes due March 15, 2021. On June 7, 2017, the Third Party Purchasers purchased $111.6 million in aggregate principal amount of the 7.625% senior notes due June 15, 2020 (the “Third Party Purchase Notes”). On June 21, 2017, the Company exchanged 6,143,208 of its retained shares of Donnelley Financial for the Third Party Purchase Notes. The Company cancelled the Third Party Purchase Notes on June 21, 2017. As a result, the Company recognized a $14.4 million loss on debt extinguishment ~~in the Condensed Consolidated Statements of Operations~~ ~~during the nine months ended~~ ~~September 30, 2017~~ related to premiums paid, unamortized debt issuance costs and other expenses. In addition, the Company recognized a net realized gain of $92.4 million resulting from the disposition of these retained shares of Donnelley Financial common stock within investment and other income-net ~~in the Condensed Consolidated Statements of Operations~~ ~~during the nine months ended~~ ~~September 30, 2017.~~

On August 4, 2017, the Company disposed of its remaining 99,594 shares of Donnelley Financial common stock in exchange for $1.9 million in aggregate principal of the Company’s 7.875% senior notes due March 15, 2021 which were cancelled. As a result, the Company recognized a $0.3 million loss on debt extinguishments in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2017, related to premiums paid, unamortized debt issuance costs and other expenses. In addition, the Company recognized a net realized gain of $1.6 million resulting from the disposition of these retained shares of Donnelley Financial common stock within investment and other income-net in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2017.

~~Interest income was $0.8~~$26.3 million and ~~$2.3~~$83.7 million for the three and nine months ended September 30, ~~2017, respectively, and $1.9 million and $3.8 million for the three and nine months ended September 30, 2016, respectively~~.

~~The Company’s effective~~2018, respectively. Sublease rental income ~~tax rate was 31.0% and 38.4% for the three months ended September 30, 2017 and 2016, respectively and (63.2%) and 80.1%~~ for the nine months ended September 30, ~~2017 and 2016, respectively. The effective income tax rate for the nine months ended September 30, 2017 reflects the impact~~2018 was not significant.

As of ~~the disposition of the Donnelley Financial and LSC retained shares. The retained shares of Donnelley Financial~~December 31, 2018, future minimum rental commitments under operating leases were ~~disposed in non-taxable debt-for-equity exchanges during the three and nine months ended September 30, 2017. See Note 15,~~ ~~Debt~~, for additional details regarding the dispositions of the Donnelley Financial retained shares of common stock. The sale of LSC shares generated a capital loss which will be carried forward; however, it is more likely than not that the benefit of such deferred tax asset will not be realized and a valuation allowance was recorded. See Note 2, ~~Discontinued Operations~~, for additional information regarding the sale of the LSC retained shares. The effective income tax rate for the three months ended September 30, 2017 reflects the impact of the impairment of goodwill in the DCS reporting unit and the inability to recognize a tax benefit on certain losses. The effective income tax rate for the three and nine months ended September 30, 2016 reflects the impact of income generated in higher taxing jurisdictions and the inability to recognize a tax benefit on certain losses.as follows:

The fair values of the senior notes and debentures, which were determined using the market approach based upon interest rates available to us for borrowings with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. The fair value of our total debt was higher than its book value by approximately $10.1 million and less than its book value by approximately $14.4 million at September 30, 2019 and December 31, 2018, respectively.

During the three months ended September 30, 2019, we repurchased on the open market $23.4 million and $20.7 million in aggregate principal amount of the 7.875% senior notes due 2021 and 8.875% debentures due 2021, respectively. We recorded a loss on debt extinguishment of $0.8 million in the third quarter of 2019 on the repurchase of the bonds.

On February 1, 2019, we retired the $172.2 million 11.25% senior notes using availability under our asset-based revolving credit facility (the “ABL Credit Agreement”).

On October 15, 2018, we entered into a $550.0 million senior secured Term Loan B credit facility pursuant to a credit agreement (the “Term Loan Credit Agreement”). Proceeds from the Term Loan Credit Agreement, net of a $5.5 million discount, were used to repurchase certain senior notes, pay transaction fees and repay a portion of borrowings under the ABL Credit Agreement.

Our obligations under the Term Loan Credit Agreement are guaranteed by our material domestic subsidiaries (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 (as defined below) secures our obligations and the obligations of the Guarantors under the Term Loan Credit Agreement 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 related guarantees on a first-priority basis, in each case, subject to permitted liens.

The Term Loan Credit Agreement contains customary affirmative and negative covenants including negative covenants restricting, among other things, our ability to incur debt, make investments, make certain restricted payments (including payments on certain other debt and external dividends), incur liens securing other debt, consummate certain fundamental transactions, enter into transactions with affiliates and consummate asset sales. The Term Loan Credit Agreement requires that the net cash proceeds of significant asset sales be used to prepay borrowings under the Term Loan Credit Agreement, except in certain circumstances, including the reinvestment of net cash proceeds in assets useful to our business, repayment of borrowings under our ABL Credit Agreement or the funding of debt tenders, in each case, subject to certain restrictions and limitations set forth in the Term Loan Credit Agreement.

The Term Loan Credit Agreement is scheduled to mature on January 15, 2024, at which time all amounts outstanding under the Term Loan Credit Agreement will be due and payable. Principal payments of $1.4 million are due quarterly. Borrowings will bear interest at a Eurocurrency rate plus a margin of 5% or a base rate plus a margin of 4%.

On October 15, 2018, we repurchased $172.6 million and $257.4 million in aggregate principal amount of the 7.625% senior notes due 2020 and 7.875% senior notes due 2021, respectively, pursuant to a tender offer. We recorded a loss on debt extinguishment of $32.3 million in the fourth quarter of 2018 on the repurchase of the bonds, representing tender premiums paid of $29.0 million, write-off of unamortized debt issuance costs of $1.5 million and fees and expenses of $1.8 million.

On September 29, 2017, we entered into the ABL Credit Agreement which amended and restated our prior $800.0 million senior secured revolving credit facility dated September 30, 2016. The ABL Credit Agreement provides for a senior secured asset-based revolving credit facility of up to $800.0 million. The amount available to be borrowed under the ABL Credit Agreement is equal to the lesser of (a) $800.0 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 the Guarantors, 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 cannot exceed $200.0 million.

On October 15, 2018, we entered into Amendment No. 1 to the ABL Credit Agreement, which amended the ABL Credit Agreement to, among other things, permit (i) the incurrence of the debt pursuant to the Term Loan Credit Agreement and (ii) the incurrence of a lien on the ABL Priority Collateral to secure our obligations under the Term Loan Credit Agreement and related guarantees on a second-priority basis.

Our obligations under the ABL Credit Agreement 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 Agreement 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 Agreement on a second-priority basis, in each case, subject to permitted liens.

The ABL Credit Agreement contains customary restrictive covenants, including a covenant which requires us to maintain a minimum fixed charge coverage ratio under certain circumstances. In addition, our ability to undertake certain actions, including, among other things, prepay certain junior debt, incur additional indebtedness and make certain restricted payments (including external dividends) depends on satisfaction of certain conditions, including, among other things, meeting minimum borrowing availability thresholds under the ABL Credit Agreement.

Borrowings under the ABL Credit Agreement bear interest at a rate dependent on the average quarterly availability under the ABL Credit Agreement 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 London Inter-bank Offered Rate or “LIBOR”) plus an applicable margin. The applicable margin for base rate loans ranges from 0.25% to 0.50% and the applicable margin for Eurocurrency loans ranges from 1.25% to 1.50%. In addition, a fee is payable quarterly on the unused portion of the amount available to be borrowed under the ABL Credit Agreement. The fee accrues at a rate of either 0.25% or 0.375% depending upon the average usage of the facility.

The ABL Credit Agreement is scheduled to mature on September 29, 2022, at which time all outstanding amounts under the ABL Credit Agreement will be due and payable. Borrowings under the ABL Credit Agreement may be used for working capital and general corporate purposes.

Based on our borrowing base as of September 30, 2019 and existing borrowings, we had approximately $438.6 million borrowing capacity available under the ABL Credit Agreement.

The weighted average interest rate on borrowings under our current facility was 3.7% and 3.4% during the nine months ended September 30, 2019 and 2018, respectively.

Interest paid, net of interest capitalized, was $27.0 million and $112.5 million for the three and nine months ended September 30, 2019, respectively, and $38.2 million and $120.0 million for the three and nine months ended September 30, 2018, respectively.

Interest income was $0.6 million and $2.3 million for the three and nine months ended September 30, 2019, respectively, and $0.8 million and $2.0 million for the three and nine months ended September 30, 2018, respectively.

All derivatives are recorded as other current or noncurrent assets or other current or noncurrent liabilities in the Condensed Consolidated Balance Sheets at their respective fair values. Unrealized gains and losses related to derivatives are recorded in the Condensed Consolidated Statements of Operations, or in other comprehensive income (loss), net of applicable income taxes, ~~or in the Condensed Consolidated Statements of Operations,~~ depending on the purpose for which the derivative is held. For derivatives designated and that qualify as cash flow hedges, the effective portion of the unrealized gain or loss related to the derivatives are generally recorded in other comprehensive income (loss) until the transaction affects earnings. 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 Condensed Consolidated Statements 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 Condensed Consolidated Statements of Operations. At the inception of a hedge transaction, ~~the Company~~we formally ~~documents~~document the hedge relationship and the risk management objective for undertaking the hedge. In addition, ~~the Company assesses~~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 or cash flows of the hedged item and whether the derivative is expected to continue to be highly effective. The impact of any ineffectiveness is also recognized ~~currently~~ in the Condensed Consolidated Statements of Operations.

~~The Company is~~We are exposed to the impact of foreign currency fluctuations ~~in certain countries in which it operates.~~based on our global operations. The exposure to foreign currency movements within many countries is limited ~~in many countries~~ because the operating revenues and expenses of ~~its~~our various subsidiaries and business units are substantially in the local currency of the country in which they operate. To the extent borrowings, sales, purchases, revenues, expenses or other transactions are not in the local currency of the subsidiary or operating unit, ~~the Company is~~we are exposed to currency risk. Periodically, ~~the Company uses~~we use foreign exchange spot ~~forward~~ and ~~swap~~forward contracts to hedge exposures resulting from foreign exchange fluctuations. ~~Accordingly,~~To the extent the gains and losses associated with the fair values of foreign currency exchange contracts are recognized ~~currently~~ in the Condensed Consolidated Statements of Operations, ~~and~~they are generally offset by gains and losses on underlying payables, receivables ~~borrowings~~ and net investments in foreign subsidiaries. ~~The Company does~~We do not use derivative financial instruments for trading or speculative purposes. The aggregate notional value of the ~~foreign currency~~forward contracts at September 30, ~~2017~~2019 and December 31, ~~2016~~2018 was ~~$136.7~~$144.4 million and ~~$172.2~~$170.8 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.

On March 13, 2012, the Company entered into interest rate swap agreements to manage interest rate risk exposure, effectively changing the interest rate on $400.0 million of its fixed-rate senior notes to a floating-rate based on LIBOR plus a basis point spread. The interest rate swaps, with a notional value of $400.0 million at inception, were designated as fair value hedges against changes in the value of the Company’s $450.0 million 8.25% senior notes due March 15, 2019, which were attributable to changes in the benchmark interest rate. During 2014, the Company repurchased $211.1 million of the 8.25% senior notes due March 15, 2019, and related interest rate swaps with a notional amount of $210.0 million were terminated, resulting in payments of $4.2 million for the fair value of the interest rate swaps. During the three months ended September 30, 2016, in connection with the tender of the Company’s 8.25% senior notes due March 15, 2019, the Company terminated the remaining $190.0 million notional value of the interest rate swap agreements which resulted in cash received of $2.5 million for the fair value of the interest rate swaps.

The fair values of interest rate swaps were determined to be Level 2 under the fair value hierarchy and were developed using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates derived from observed market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk. On at least a quarterly basis, the Company evaluates the credit value adjustments of the interest rate swap agreements, which take into account the possibility of counterparty and the Company’s own default.

The Company’s foreign currency contracts and interest rate swaps are subject to enforceable master netting agreements that allow the Company to settle positive and negative positions with the respective counterparties. The Company settles foreign currency contracts on a net basis when possible. Foreign currency contracts that can be settled on a net basis are presented net in the Condensed Consolidated Balance Sheets. Interest rate swaps were settled on a gross basis and presented gross in the Condensed Consolidated Balance Sheets.

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

~~At September 30, 2017 and December 31, 2016, the~~ total fair value of ~~the Company’s~~our foreign currency contracts, which were the only derivatives not designated as hedges, ~~along with~~included in Prepaid expenses and other current assets at September 30, 2019 and December 31, 2018, was $0.2 million and $0.9 million, respectively. In addition, there was $3.0 million and $0.3 million of these derivatives included in Accrued liabilities and other at September 30, 2019 and December 31, 2018, respectively.

On August 1, 2019, we completed an acquisition within the ~~accounts~~Business Services segment for a purchase price of $14.6 million consisting of $3.0 million in cash paid at closing, a $3.0 million note payable due January 1, 2020 and $8.6 million in contingent consideration based on the ~~Condensed Consolidated Balance Sheets in which~~future performance of the acquired business. The cost of the acquisition is primarily allocated to intangible assets related to client relationships based on the fair value ~~amounts were included, was as follows:~~

~~The pre-tax losses related to derivatives not designated as hedges recognized in~~at the ~~Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016 were as follows:~~

For derivatives designated as fair value hedges, the pre-tax (gains) losses related to the hedged items attributable to changes in the hedged benchmark interest rate and the offsetting (gain) loss on the related interest rate swaps for the three and nine months ended September 30, 2017 and 2016 were as follows:

The Company also recognized a net reduction to interest expense of $0.2 million and $1.0 million for the three and nine months ended September 30, 2016, respectively, related to the Company’s fair value hedges, which included interest accruals on the derivatives and amortization of the basis in the hedged items.

Certain assets and liabilities are required to be recorded at fair value on a recurring basis. The following tables summarize the bases used to measure financial assets and liabilities that are carried at fair value on a recurring basis in the Condensed Consolidated Balance Sheets:

As of September 30, 2017, the Company no longer held investments in LSC or Donnelley Financial common stock. As of December 31, 2016, the Company’s investment in LSC and Donnelley Financial common stock were categorized as Level 2 securities as these shares were not registered and were valued based upon the closing stock price on the balance sheet date as they represented an identical equity instrument registered under the Securities Act of 1933, as amended.

~~In March 2017, the Financial Accounting Standards Board (“FASB”) issued~~ Accounting Standards Update (“ASU”) No. 2017-07 “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which changes the presentation of net periodic pension and postretirement benefit cost (net benefit cost) within the Statement of Operations. Under the current guidance, net benefit cost is reported as an employee cost within operating income. The amendment requires the bifurcation of net benefit cost, with the service cost component to be presented with other employee compensation costs in operating income while the other components will be reported separately outside of income from operations. ASU No. 2017-07 will be effective in the first quarter of 2018 and is required to be retrospectively adopted. Had this guidance been adopted as of January 1, 2017, income from operations within the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 would have been lower by $4.2 million and $12.5 million, respectively, and other non-operating income would have increased $4.2 million and $12.5 million, respectively.

~~In January 2017, the FASB issued~~ ~~ASU No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,”~~ ~~which~~ eliminates Step 2 from the current goodwill impairment test, including determining the implied fair value of goodwill and comparing it with the carrying amount of that goodwill. The standard requires entities to record impairment charges based on the excess of a reporting unit’s carrying amount over its fair value. ~~ASU No. 2017-04 will be effective in the first quarter of 2020; however early adoption is permitted for interim and annual goodwill impairment tests performed after January 1, 2017~~. The adoption of ASU 2017-04 may impact the results of future goodwill impairment tests and therefore could impact the Company’s consolidated financial position and results of operations. The Company has elected to early adopt this guidance and will apply this guidance to all impairment analyses performed after January 1, 2017.acquisition date.

~~In November 2016,~~On May 8, 2019, we sold our R&D business within the ~~FASB issued ASU No. 2016-18 “Statement~~Business Services segment for net proceeds of ~~Cash Flows (Topic 230): Restricted Cash.” This update requires that restricted cash and cash equivalents be included as components~~$11.7 million, which was received during the nine months ended September 30, 2019. The disposition of ~~total cash and cash equivalents as presented on~~this business resulted in a net gain of $6.2 million during the statement of cash flows. ASU No. 2016-18 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and a retrospective transition method is required. Early adoption is permitted, including adoptionnine months ended September 30, 2019, which was recorded in ~~an interim period.~~ ~~The Company currently presents changes in restricted cash and cash equivalents~~Other operating expense (income) in the ~~investing section of its~~ Condensed ~~Consolidated Statement of Cash Flows. The new guidance will not impact financial results, but will result in a change in the presentation of restricted cash and restricted cash equivalents within the~~ ~~Condensed~~ Consolidated Statements of ~~Cash Flows~~.Operations.

~~In August 2016,~~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 ~~FASB issued ASU No. 2016-15 “Statement~~court shortly thereafter and a bankruptcy trustee was appointed. As a result of ~~Cash Flows (Topic 230): Classification~~the bankruptcy liquidation, we recorded a gain of ~~Certain Cash Receipts~~$4.0 million in Other operating expense (income) for the nine months ended September 30, 2019, primarily reflecting the reclassification of cumulative currency translation adjustments into earnings and ~~Cash Payments.” This update addresses whether~~ongoing expenses associated with the bankruptcy proceedings. Subsequent to ~~present certain specific~~March 31, 2019, the operating results of RRD Brazil are no longer included in our consolidated results of operations. RRD Brazil had net sales of $8.8 million for the three months ended March 31, 2019and $12.4 million and $43.2 million for the three and nine months ended September 30, 2018, respectively. RRD Brazil had a loss before income taxes of $4.1 million for the three months ended March 31, 2019and $4.1 million and $15.6 million for the three and nine months ended September 30, 2018, respectively. The operations of RRD Brazil were included in the Business Services segment.

On July 2, 2018, we completed the sale of our Print Logistics business for $60.0 million cash, ~~flow items as~~of which we received $43.9 million after transaction costs, working capital adjustments and $4.9 million of cash which was included in the disposition. Net proceeds from the sale were used to reduce borrowings outstanding on our ABL Credit Agreement. The disposition resulted in a pre-tax gain of $3.6 million in the third quarter of 2018, which was recorded in Other operating ~~investing or financing activities. The amendments~~expense (income) in this update are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and are required to be retroactively adopted. Early adoption is permitted, including adoption in an interim period. ~~The Company is currently evaluating~~ the ~~impact of ASU No. 2016-15~~ ~~on its~~ Condensed Consolidated Statements of ~~Cash Flows.~~

~~In March 2016, the FASB issued~~ ~~ASU~~ ~~No. 2016-09 “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.”~~ Under the new guidance, when awards vest or are settled, the excess tax benefits and tax deficiencies are recorded as income tax expense or benefit in the income statement instead of within additional paid-in capital. This guidance will be applied prospectively. Furthermore, the guidance requires excess tax benefits to be presented as an operating activity on the statement of cash flows rather thanOperations. Income taxes paid as a ~~financing activity, which can be applied retrospectively or prospectively. Under~~result of the ~~new guidance, an election can be made regarding whether~~sale were insignificant due to ~~account~~the utilization of capital loss carryforwards to offset the taxable gain. Prior to the sale, operating results for ~~forfeitures~~the Print Logistics business were reported as services within the Business Services segment.

On October 25, 2019, we completed the sale of ~~share-based payments by recognizing forfeitures~~substantially all of ~~awards as they occur or estimate~~our Global Document Solutions (“GDS”) business for approximately $42.3 million, subject to a working capital adjustment. GDS primarily provides statements and print management services in Europe and reported net sales of $185.1 million and $207.2 million during the ~~number~~nine months ended September 30, 2019 and 2018, respectively, and $272.8 million during the year ended December 31, 2018. As of ~~awards expected to be forfeited, as is currently required. This guidance is to be applied using a modified retrospective transition method, with a cumulative adjustment to retained earnings. The Company has adopted this guidance as of January 1, 2017. The adoption had an immaterial impact on the Company’s Condensed Consolidated financial statements.~~ September 30, 2019, net assets sold, excluding currency translation adjustments, were approximately $21.0 million.

In February ~~2016,~~2018, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standards Update (“ASU”) No. ~~2016-02 “Leases~~2018-02 “Income Statement—Reporting Comprehensive Income (Topic ~~842)~~220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which ~~requires lessees~~permits the reclassification of tax effects stranded in accumulated other comprehensive income to ~~put most leases on~~retained earnings as a result of the ~~balance sheet but recognize expense on the income statement in a manner similar to current accounting. For lessors, ASU 2016-02 also modifies the classification criteria~~Tax Cuts and ~~the accounting for sales-type and direct financing leases.~~Jobs Act of 2017 (the “Tax Act”). The standard also requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted; however the Company plans to adopt the standard in the first quarter of 2019. The Company is currently evaluating the impact of ASU 2016-02.

~~In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model for~~ entities to ~~use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 also requires additional quantitative and qualitative disclosures.~~ ~~During 2016,~~disclose whether or not they elected to reclassify the ~~FASB issued ASU 2016-08~~ ~~“Revenue~~tax effects related to the Tax Act from ~~Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),”~~ ~~ASU 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,”~~ ~~and ASU 2016-12~~ ~~“Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,”~~ which clarify the revenue recognition implementation guidance on principal versus agent considerations, identifying performance obligations, determining whether an entity's promise to grant a license provides a customer with either a right to use or a right to access the entity's intellectual property, assessing the collectability criteria, presentation of sales and similar taxes, noncash consideration and variousaccumulated other ~~items. The amendments in these ASUs affect the guidance in ASU 2014-09, and the effective date and transition requirements are the same as those for ASU 2014-09 which, as amended by ASU~~ ~~2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” will be effective for the Company on January 1, 2018.~~comprehensive income. The standard allows the option of applying either a ~~full~~ retrospective adoption, meaning the standard is applied to all periods ~~presented,~~in which the effect of the Tax Act is recognized, or ~~a modified retrospective~~applying the amendments in the period of adoption, meaning an adjustment is made to stockholders’ equity as of the ~~standard is applied only~~beginning of the reporting period. ASU 2018-02 was effective in the first quarter of 2019; however, early adoption was permitted for interim and annual periods, including the reporting period in which the Tax Act was enacted. As of July 1, 2018, we adopted the provisions of ASU 2018-02, which resulted in a decrease to Accumulated deficit and increase to Accumulated other comprehensive loss of $22.0 million.

In January 2018, the ~~most~~FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provisions in the Tax Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or treating any taxes on GILTI inclusions as period costs are both acceptable methods subject to an accounting policy election. During the fourth quarter of 2018, we elected to treat the tax effect of GILTI as a current ~~period.~~period expense when incurred.

~~Based upon preliminary results~~In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842)” which requires lessees to record most leases on the balance sheet. Topic 842 was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those reporting periods, with early adoption permitted. The new standard requires a lessee to recognize a right-of use (“ROU”) asset and lease liability on the balance sheet for all leases with a term longer than 12 months and requires additional disclosures. For lessors, Topic 842 also modifies the classification criteria and the accounting for sales-type and direct financing leases. Topic 842 was subsequently amended by ASU No. 2018-01 “Land Easement Practical Expedient for Transition to Topic 842”; ASU No. 2018-10 “Codification Improvements to Topic 842, Leases”; ASU No. 2018-11 “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”); ASU No. 2018-20 “Narrow-Scope Improvements for Lessors”; and ASU No. 2019-01 “Leases (Topic 842): Codification Improvements”. ASU 2018-11 provides clarity on separating components of ~~management’s evaluation,~~a lease contract and includes an option to not restate comparative periods in transition and elect to use the ~~most impactful aspects~~effective date of Topic 842 as the date of initial application.

We adopted the guidance as of January 1, 2019 using the effective date as the date of initial application. Results for the three and nine months ended September 30, 2019 are presented under Topic 842. Information prior to the effective date continues to be presented in accordance with the previous lease guidance, “Leases (Topic 840)”.

We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification of those leases in place as of December 31, 2018.

In August 2018, the FASB issued ASU No. 2018-15 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 will be effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, however early adoption is permitted. We are currently evaluating the impact of ASU 2018-15 on the consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14 “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018-14”), which removes certain disclosures that are no longer cost beneficial and also includes additional disclosures to improve the overall usefulness of the ~~guidance relate~~disclosure requirements to ~~the timing of recognition~~financial statement users. ASU 2018-14 will be effective for the revenue from customized products over time versus at a point in time, as well as inventory billed but not yet shipped. The Company has amounts of customized products in the Variable Print and International segments whichpublic entities for fiscal years beginning after December 15, 2020, however early adoption is permitted. We are currently ~~recognized when~~evaluating the ~~products are completed~~impact of ASU 2018-14 on the consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes the impairment model for most financial assets and ~~shipped to the customer. Currently, the Company defers revenue for inventory billed but not yet shipped which under~~certain other instruments. Under the new ~~revenue standard, the Company may be able to recognize revenue for certain inventory billed but not yet shipped. The actual revenue recognition treatment required under this new standard~~guidance, entities will be ~~dependent~~required to measure expected credit losses for financial instruments, including trade receivables, based on ~~contract specific terms. The Company is still in~~historical experience, current conditions and reasonable forecasts. ASU 2016-13 will be effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We are currently evaluating the ~~process of evaluating and designing~~impact ASU 2016-13 will have on the ~~necessary changes to its business processes, systems and controls to support recognition and disclosure under the new standard.The Company will adopt the standard in the first quarter of 2018 and currently anticipates applying the modified retrospective approach.~~consolidated financial statements.

I~~tem~~Item 2. Management’s ~~Discussion~~Discussion and Analysis of Financial Condition and Results of Operations

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 ~~customers.~~clients. We assist ~~customers~~clients in developing and executing multichannel communication strategies that engage audiences, reduce costs, drive revenues and ~~increase~~enhance compliance. Our innovative content management offering, production platform, logistics services, supply chain management, outsourcing capabilities and customized consultative expertise assists our ~~customers~~clients in the delivery of integrated messages across multiple media to highly targeted audiences at optimal times ~~for~~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 October 1, 2016, we completed the previously announced separation of our financial communications and data services business (“Donnelley Financial Solutions, Inc.” or “Donnelley Financial”) and our publishing and retail-centric print services and office products business (“LSC Communications, Inc.” or “LSC”) into two separate publicly-traded companies (the "Separation"). We completed the tax free distribution of approximately 26.2 million shares, or 80.75%, of the outstanding common stock of Donnelley Financial and 26.2 million shares, or 80.75%, of the outstanding common stock of LSC, to RRD stockholders (the “Distribution”). The Distribution was made to RRD stockholders of record as of the close of business on September 23, 2016, who received one share of Donnelley Financial common stock and one share of LSC common stock for every eight shares of RRD common stock held as of the record date. As a result of the Distribution, Donnelley Financial and LSC are now independent public companies trading under the symbols “DFIN” and “LKSD”, respectively, on the New York Stock Exchange. Immediately following the Distribution, we held 6.2 million shares of Donnelley Financial common stock and 6.2 million shares of LSC common stock. As of September 30, 2017, we no longer held any shares of LSC or Donnelley Financial common stock.

~~The financial results of Donnelley Financial and LSC for periods prior to the Distribution have been reflected within the disclosures of this~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~as discontinued operations. Additionally, sales from RRD to Donnelley Financial and LSC previously eliminated in consolidation have been recast and are now shown as external sales of RRD within the financial results of continuing operations.~~ ~~The Company’s cash flows for all periods prior to the October 1, 2016 Distribution include the impact of LSC and Donnelley Financial. See Note 1,~~ ~~Basis of Presentation, and Note 2,~~ ~~Discontinued Operations, to these Condensed Consolidated Financial Statements for additional information.~~

Immediately following the Distribution on October 1, 2016, we affected a one-for-three reverse stock split for RRD common stock (the “Reverse Stock Split”). The Reverse Stock Split was approved by our Board of Directors on September 14, 2016 and previously approved by our stockholders at the annual meeting on May 19, 2016. As a result of the Reverse Stock Split, the number of issued and outstanding and treasury shares of our common stock was reduced proportionally based on the Reverse Stock Split ratio of one share for every three shares of common stock held before the Reverse Stock Split. Refer to Note 1, ~~Basis of Presentation, to the Condensed Consolidated Financial Statements for additional information regarding the Reverse Stock Split.~~

During the third quarter of 2017, the Company identified an error in the accounting for certain contracts with an inventory buy-back option within the Asia reporting unit, which is in the International segment. As a result, the error, which was determined by management to be immaterial to the previously issued financial statements, has been corrected herein from the amounts previously reported. Refer to Note 1, ~~Basis of Presentation, to the Condensed Consolidated Financial Statements for additional information regarding the revision.~~

Our segments and their ~~respective~~ product and service offerings are summarized below:

This segment includes our U.S. short-run and transactional printing operations. This segment’s primary product offerings include commercial and digital print, direct mail, labels, statement printing, forms and packaging.

~~This segment includes our logistics services, print management offerings~~Business Services provides customized solutions at scale to help clients inform, service and ~~digital and creative solutions.~~

~~This segment includes our non-U.S. printing operations in Asia, Latin America, Canada and Europe. This~~transact with their customers. The segment’s primary product and service offerings include ~~packaging, books, catalogs, magazines, retail inserts,~~commercial print, logistics, statement printing, ~~commercial~~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 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, ~~forms, labels, logistics services, directories,~~kitting, fulfillment, digital and creative solutions and direct mail. Additionally, this segment includes our business process outsourcing business and Global Turnkey Solutions operations. Business process outsourcing provides transactional print and outsourcing services, statement printing, direct mail and print management offerings through its operations in Europe, Asia and North America. Global Turnkey Solutions provides outsourcing capabilities, including product configuration, customized kitting and order fulfillment for technology, medical device and other companies around the world through its operations in Europe, North America and Asia.list services.

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

We separately report our net sales, related costs of sales and gross profit for our product and service offerings. Our product offerings primarily consist of commercial ~~and~~print, statements, direct marketing, packaging, labels, digital print ~~statement printing, direct mail, packaging, labels, forms, magazines, catalogs, retail inserts, books, directories, manuals~~ and ~~other related products procured through our print~~fulfillment, supply chain management ~~offering.~~and forms. Our service offerings primarily consist of logistics, ~~certain~~ business process outsourcing ~~services~~ and digital and creative solutions.

~~On August 4, 2016, the Company acquired Precision Dialogue, a provider of email marketing, direct mail marketing and other services with operations in the United States.~~

~~On January 11, 2016, the Company sold two entities within the business process outsourcing reporting unit.~~

~~For further information on the above acquisitions and dispositions, see Note 3,~~ ~~Acquisitions and Dispositions, to the Condensed Consolidated Financial Statements.~~

Net sales ~~increased~~decreased by ~~$9.3~~$30.1 million, or ~~0.5%~~1.8%, for the ~~third quarter of 2017~~three months ended September 30, 2019 compared to the same period in 2018. Net sales decreased $13.4 million due to recent business dispositions, primarily the ~~prior year. There was a $5.3~~bankruptcy liquidation of RRD Brazil, and $10.5 million ~~or 0.3%, increase~~ due to changes in foreign exchange rates. ~~After including the impact of changes in foreign exchange rates, the increase in net~~Net sales ~~was~~also decreased due to ~~increased~~lower volume inwithin the ~~International~~Business Services segment, ~~driven by the Asia reporting unit,~~ partially offset by ~~lower~~higher volume inwithin the ~~Variable Print segment, lower postage pass-through sales in the Strategic Services segment and price pressures across the segments.~~Marketing Solutions segment.

~~The Company continues~~We continue to ~~strategically~~ assess opportunities to reduce ~~its~~our cost structure and enhance productivity throughout the business. During the ~~nine~~three months ended September 30, ~~2017, the Company~~2019, we realized cost savings from previous restructuring activities including the reorganization of administrative and support functions across all segments, as well as facility consolidations.

Net cash used in operating activities for the nine months ended September 30, ~~2017~~2019 was ~~$12.6~~$87.8 million as compared to ~~cash provided by operating activities of $7.8~~$63.9 million for the nine months ended September 30, ~~2016.~~2018. The ~~decrease~~change in net cash flow from operating activities ~~was driven by lower cash earnings,~~ ~~partially offset by the timing of supplier and customer payments and lower interest, spinoff-related transaction and~~related primarily to higher tax ~~payments~~.

The changes in the Company’s income from operations, operating margin, net earnings (loss) attributable to RRD common stockholders and net earnings (loss) attributable to RRD common stockholders per diluted share for the three months ended September 30, 2017, from the three months ended September 30, 2016, were due to the following:

~~2017 restructuring, impairment and other charges - net:~~ included pre-tax charges of $21.3 million for the impairment of goodwill in the digital and creative solutions reporting unit within the Strategic Services segment; $10.7 million for employee termination costs; $1.1 million of lease termination and other restructuring costs; $0.5 million for multi-employer pension plan withdrawal obligations unrelated to facility closures; and $0.2 million impairment charges of other long-lived assets related to facility closures. See Note 7,~~Restructuring, Impairment and Other Charges~~, ~~to the Condensed Consolidated Financial Statements for additional details.~~payments.

~~2016 restructuring, impairment and other charges - net:~~ included pre-tax charges of $9.7 million for employee termination costs; $0.1 million for a net gain on the sale of previously impaired other long-lived assets; $0.6 million of lease termination and other restructuring costs; and $0.6 million of other charges for multi-employer pension plan withdrawal obligations unrelated to facility closures. See Note 7,~~Restructuring, Impairment and Other Charges~~, ~~to the Condensed Consolidated Financial Statements for additional details.~~28

~~Other postretirement benefit plan obligation (OPEB) curtailment gains:~~ ~~included a pretax gain of $19.7 million ($12.2 million after-tax) as a result of curtailments of the Company’s OPEB plans during the three months ended September 30, 2016.~~

~~Pension settlement charges:~~ ~~included pre-tax charges of $0.3 million ($0.3 million after-tax) for the three months ended September 30, 2016, related to lump-sum pension settlement payments.~~

~~Acquisition-related expenses:~~ included pre-tax charges of $0.7 million ($0.4 million after-tax) related to legal, accounting and other expenses for the three months ended September 30, 2016 associated with contemplated or completed acquisitions.

~~Loss on dispositions of businesses:~~ ~~included a pre-tax loss on the sale of entities of $0.3 million ($0.1 million after-tax) for the three months ended September 30, 2016.~~

~~Loss on debt extinguishments:~~ included a pre-tax net loss of $6.5 million ($4.3 million after-tax) for the three months ended September 30, 2017 related to unamortized debt issuance costs, tender premiums and other expenses associated with the amendment and restatement of the credit agreement and the debt-for-equity exchange of senior notes during the three months ended September 30, 2017. See Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~Net gain on investments:~~ included a pre-tax non-cash net realized gain of $1.6 million ($1.7 million after-tax) for the three months ended September 30, 2017, resulting from the debt-for-equity exchange of the remaining portion of the Company’s retained shares of Donnelley Financial for certain outstanding senior notes. See Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details of the debt-for-equity exchange.~~

~~Operations:~~ reflected lower volume in certain reporting units within the International and Variable Print segments, price pressures, start-up costs within the Asia reporting unit and higher transactional foreign currency expense, partially offset by lower corporate and other overhead costs related to our operations prior to the Separation, higher volume in the Asia reporting unit, lower healthcare and depreciation and amortization expense and cost control initiatives. See further details in the review of operating results by segment that follows below.

The changes in the Company’s income from operations, operating margin, net earnings (loss) attributable to RRD common stockholders and net earnings (loss) attributable to RRD common stockholders per diluted share for the nine months ended September 30, 2017, from the nine months ended September 30, 2016, were due to the following:

~~2017 restructuring, impairment and other charges - net:~~ included pre-tax charges of $21.3 million for the impairment of goodwill in the digital and creative solutions reporting unit within the Strategic Services segment; $19.5 million for employee termination costs; $3.8 million of lease termination and other restructuring costs; $1.7 million for multi-employer pension plan withdrawal obligations unrelated to facility closures; and $0.4 million of net impairment charges of long-lived assets. See Note 7,~~Restructuring, Impairment and Other Charges~~, ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~2016 restructuring, impairment and other charges - net:~~ included pre-tax charges of $20.7 million for employee termination costs; $1.0 million for a net gain on the sale of previously impaired other long-lived assets, partially offset by impairment charges related to buildings and machinery and equipment associated with facility closures; $2.9 million of lease termination and other restructuring costs; and $1.7 million of other charges for multi-employer pension plan withdrawal obligations unrelated to facility closures. See Note 7,~~Restructuring, Impairment and Other Charges~~, ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~Spinoff-related transaction expenses:~~ included pre-tax charges of $3.3 million ($2.1 million after-tax) related to consulting and other expenses for the nine months ended September 30, 2017 associated with the Separation and Distribution.

~~Other postretirement benefit plan obligation (OPEB) curtailment gains:~~ ~~included a pre-tax gain of $19.7 million ($12.2 million after-tax) as a result of curtailments of the Company’s OPEB plans during the nine months ended September 30, 2016.~~

~~Pension settlement charges:~~ ~~included pre-tax charges of $20.7 million ($12.3 million after-tax) for the nine months ended September 30, 2016 related to lump-sum pension settlement payments.~~

~~Acquisition-related expenses:~~ included pre-tax charges of $2.7 million ($1.8 million after-tax) related to legal, accounting and other expenses for the nine months ended September 30, 2016 associated with contemplated or completed acquisitions.

~~Net gain on disposal of businesses:~~ ~~included a pre-tax gain on the sale of entities in the International segment of $12.0 million ($12.2 million after-tax) for the nine months ended September 30, 2016.~~

~~Loss on debt extinguishments:~~ included a pre-tax net loss of $20.1 million ($12.8 million after-tax) related to the premiums paid in connection with the tenders, unamortized debt issuance costs and other expenses due to the debt-for-equity exchange of senior notes, the repurchase of debentures and senior notes and the amendment and restatement of the credit agreement during the nine months ended September 30, 2017. See Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~Net gain on investments:~~ included a pre-tax non-cash net realized gain of $94.0 million ($96.1 million after-tax) resulting from the debt-for-equity exchange of the Company’s retained shares of Donnelley Financial for certain outstanding senior notes and a pre-tax gain of $1.3 million ($0.7 million after-tax) resulting from the sale of certain of the Company’s affordable housing investments, partially offset by a pre-tax loss of $51.6 million ($51.6 million after-tax) resulting from the sale of the Company’s retained shares in LSC during the nine months ended September 30, 2017. The nine months ended September 30, 2016 included pre-tax gain of $0.1 million ($0.1 million after-tax) resulting from the sale of certain of the Company’s affordable housing investments.

~~Operations:~~ reflected lower volume in certain reporting units within the International and Variable Print segments, price pressures and higher transactional foreign currency expense, partially offset by lower corporate and other overhead costs related to our operations prior to the Separation, higher volume in the Asia reporting unit, reduced bad debt, legal and depreciation and amortization expenses and cost control initiatives.

Our customers are in an evolving 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. Key factors facing our customers include regulatory changes, sensitivity to economic conditions, raw material pricing volatility and 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 some of our products and services, such as statement printing and forms.

We work with our customers 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. One of our competitive strengths is that we offer a wide array of communications products and services, including print and content management, which provide differentiated solutions for our customers. We are also able to manage the storage and distribution of products for our customers by offering warehousing and inventory management solutions that allow customers to store printed materials and to efficiently ship them using our platform. Our logistics business offers our customers access to our proprietary technology that is designed to determine the most efficient and cost-effective method of shipping depending on our customers’ needs. We believe our breadth of offerings provides us with a distinct competitive advantage. We have and will continue to develop and expand our creative and design, content management, digital and print production, supply chain management and distribution services to address our customers’ evolving needs while supporting the strategic objective of becoming a leading global provider of integrated communication products and services.

~~The print and related services industry, in general, continues to have excess capacity and remains highly competitive and fragmented.~~

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 customers 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.

We also operate in a highly competitive and fragmented market for commercial freight transportation and third-party logistics services. Primary competitors to our services include other national non-asset based third-party logistics companies, as well as regional or niche freight brokerages, asset-based carriers offering brokerage and/or logistics services, wholesale intermodal transportation service providers and rail carriers. In addition, we may from time to time compete against carriers’ internal sales forces or shippers’ internal transportation departments.

Advertising and consumer spending trends affect demand in several of the end-markets we serve. As such, we have some seasonality in the second half of the year in our business, despite the breadth of our product and services 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 customers. Variations in the cost and supply of certain paper grades and ink formulations used in the manufacturing process may affect the Company’s consolidated financial results. Paper prices fluctuated during the first nine months of 2017 and volatility in the future is expected. Generally, customers directly absorb the impact of changing prices on customer-supplied paper. With respect to paper we purchase, we have historically passed most changes in price through to our customers. 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. We believe that the paper supply is consolidating, and there may be shortfalls in the future in supplies necessary to meet the demands of the entire marketplace. Higher paper prices and tight paper supplies may have an impact on customers’ demand for printed products. We resell waste paper and other print-related by-products. We also have undertaken various strategic initiatives to mitigate any foreseeable supply disruptions with respect to our ink requirements. We may be impacted by changes in prices for these by-products in the future.

We continue to monitor the impact of changes in the price of crude oil and other energy costs, which impact our ink suppliers, logistics operations and manufacturing costs. Crude oil, energy prices and market cost of transportation continue to be volatile. We believe our logistics operations will continue to be able to pass a substantial portion of any increases in fuel prices directly to our customers in order to offset the impact of related cost increases. Decreases in fuel prices are also passed on to customers which negatively impact sales and income from operations. However, our logistics operations is restricted in its ability to pass on increased cost of transportation costs to some customers in the short term. Therefore, increases in the market cost of transportation will negatively impact income from operations. We generally cannot pass on to customers 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 customer demand or the related impact either will have on our consolidated annual results of operations, financial position or cash flows.

Our products are distributed to end-users through U.S. and foreign postal services, through retail channels, electronically or by direct shipment to customer facilities. Through our logistics operations, we manage the distribution of most customer products we print in the U.S. and Canada to maximize efficiency and reduce costs for customers.

As a leading provider of print logistics and among the largest mailers of Standard Mail in the U.S., we work closely with our customers 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 postal rates on our customers’ mailings, demand for products distributed through the U.S. or foreign postal services has been negatively impacted by increases in postal rates, as postal costs are a significant component of many customers’ cost structures.

Under the 2006 Postal Accountability and Enhancement Act (“PAEA”), it had been anticipated that postage for market dominant mail categories would increase annually by an amount equal to or slightly less than the Consumer Price Index (the “CPI”). On April 10, 2016, the USPS removed the exigent surcharge, which was approved in December 2013, resulting in a 4.3% decrease in postage rates for all significant mail categories.

The USPS implemented a CPI postage increase on January 22, 2017 of approximately 1.0%. In addition, there is a pending bi-partisan legislative proposal that seeks to stabilize the financial condition of the USPS, which among other things calls for restoring a 2.15% increase (approximately half of the exigent surcharge) on market-dominant mail products. Absent such legislative changes, the USPS filed with the Postal Regulatory Commission on October 6, 2017 for a price increase of 1.905% for First-Class Mail, 1.908% for Marketing Mail (aka Standard Mail), 1.924% for Periodicals Mail, 1.960% for Package Services Mail and 1.986% for Special Services to become effective January 21, 2018.

Additionally, as required by PAEA, the Postal Regulatory Commission began a comprehensive review of the law on December 20, 2016, its 10 year anniversary, to determine if the current system for regulating rates and classes for market-dominant products is achieving the original objectives of the law. The study still in process and their recommendations are due by the end of 2017. The impact of these actions cannot currently be estimated.

~~Mail transportation services to the USPS facilities across the country accounted for approximately 31% of the Company’s logistics revenues during the nine months ended September 30, 2017.~~

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. As part of ~~its~~our interim review for indicators of impairment, ~~management~~we analyzed potential changes in ~~the~~ value of individual reporting units with goodwill based on each reporting unit’s operating results for the nine months ended September 30, ~~2017~~2019 compared to expected results. In addition, ~~management~~we considered how other key assumptions, including discount rates and expected long-term growth rates, used in the last fiscal year’s impairment analysis, could be impacted by changes in market conditions and economic events.

~~Management~~We considered trends in these factors when performing ~~its~~our assessment of whether an interim impairment review was required for any reporting unit. During the third quarter of 2017, the Company recognized a non-cash charge of $21.3 million for the impairment of goodwill in the digital and creative solutions reporting unit which is included within the Strategic Services segment. The goodwill impairment charge in the digital and creative solutions reporting unit was due to the notification from a major customerBased on this interim assessment, we concluded that ~~they will be transitioning their business away from digital and creative solutions beginning in the fourth quarter of 2017,~~ as well as declines in sales with other existing customers which resulted in lower expectations of future revenues, profitability and cash flows as compared to the expectations as of the October 31, 2016 annual goodwill impairment test. As of September 30, 2017, the digital and creative solutions reporting unit had no remaining goodwill. Based on the September 30, 2017 interim assessment, management concluded that other than the goodwill impairment recognized in the digital and creative solutions reporting unit,2019, no events or changes in circumstances indicated that it was more likely than not that the fair value for any reporting unit had declined below its carrying value. Nevertheless, significant changes in economic and market conditions could result in changes to expectations of future financial results and key valuation assumptions. Such changes could result in revisions of ~~management’s~~our estimates of the fair value of ~~the Company’s~~our reporting units and could result in a material impairment of goodwill in a future interim period or as of October 31, ~~2017, the Company’s~~2019, our next annual measurement date.

The funded status of our pension and other postretirement benefits plans is dependent upon many factors, including returns on invested assets and the level of certain market interest rates. Market conditions may lead to changesIn particular, we had one reporting unit in the discount rates (used to value the year-end benefit obligations of the plans) and the market value of the securities held by the plans, which could significantly increase or decrease the funded status of the plans. We review the actuarial assumptions on an annual basis as of December 31. Based on current estimates, we expect to make cash contributions of approximately $17.0 million to our pension and other postretirement benefits plans for the full year 2017, of which $12.4 million has been contributedBusiness Services segment experience a decline in sales during the nine months ended September 30, ~~2017.~~

2019. Continued negative trends could impact the estimated fair value of this reporting unit and could result in a future impairment charge. As of ~~December~~the October 31, ~~2016~~2018 annual goodwill impairment test, the ~~Company had~~fair value of this reporting unit exceeded its book value by approximately ~~$70.0~~29%. As of September 30, 2019, $151.8 million of ~~U.S. deferred tax assets which at~~goodwill was allocated to this time, we believe is more likely than not that we will realize these deferred tax assets. However, in the next twelve months we may be required to establish a valuation allowance to reduce the carrying value of certain U.S. deferred tax assets.

In the financial review that follows, we discuss our consolidated results of operations, financial position, cash flows and certain other information. This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and related notes.reporting unit.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, ~~2017~~2019 AS COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, ~~2016~~2018

The following table shows the results of ~~continuing~~ operations for the three months ended September 30, ~~2017~~2019 and ~~2016, which reflects the results of acquired businesses from the relevant acquisition dates:~~2018:

	Three Months Ended September 30,										Three Months Ended
	2017		2016		$ Change			% Change			September 30,
	(in millions, except percentages)										2019			2018			$ Change			% Change
											(in millions, except percentages)
Products net sales	$	1,322.0	$	1,327.8	$	(5.8	)		(0.4	%)	$	1,328.8		$	1,329.8		$	(1.0	)		(0.1	%)
Services net sales		412.9		397.8		15.1			3.8	%		290.6			319.7			(29.1	)		(9.1	%)
Total net sales		1,734.9		1,725.6		9.3			0.5	%		1,619.4			1,649.5			(30.1	)		(1.8	%)
Products cost of sales (exclusive of depreciation and amortization)		1,064.1		1,030.7		33.4			3.2	%		1,073.5			1,076.8			(3.3	)		(0.3	%)
Services cost of sales (exclusive of depreciation and amortization)		346.4		330.7		15.7			4.7	%		235.0			257.3			(22.3	)		(8.7	%)
Total cost of sales		1,410.5		1,361.4		49.1			3.6	%		1,308.5			1,334.1			(25.6	)		(1.9	%)
Products gross profit		257.9		297.1		(39.2	)		(13.2	%)		255.3			253.0			2.3			0.9	%
Services gross profit		66.5		67.1		(0.6	)		(0.9	%)		55.6			62.4			(6.8	)		(10.9	%)
Total gross profit		324.4		364.2		(39.8	)		(10.9	%)		310.9			315.4			(4.5	)		(1.4	%)
Selling, general and administrative expenses (exclusive of depreciation and amortization)		207.7		218.1		(10.4	)		(4.8	%)		190.5			203.8			(13.3	)		(6.5	%)
Restructuring, impairment and other charges-net		33.8		10.8		23.0		nm
Restructuring and other (income) expense-net												(2.3	)		11.0			(13.3	)	nm
Depreciation and amortization		47.0		51.0		(4.0	)		(7.8	%)		43.5			44.2			(0.7	)		(1.6	%)
Other operating expense		—		0.3		(0.3	)	nm
Other operating expense (income)												5.4			(4.5	)		9.9		nm
Income from operations	$	35.9	$	84.0	$	(48.1	)		(57.3	%)	$	73.8		$	60.9		$	12.9			21.2	%

Net sales of products for the three months ended September 30, ~~2017~~2019 decreased ~~$5.8~~$1.0 million, or ~~0.4%~~0.1%, to ~~$1,322.0~~$1,328.8 million versus the same period in ~~2016, including~~2018. The third quarter of 2019 included a ~~$5.1~~$13.4 million ~~or 0.4%, increase~~decrease due to recent business dispositions and a $9.4 million decrease due to changes in foreign exchange rates. Net sales of products also decreased due to ~~higher volume within the Asia reporting unit, partially offset by~~ lower volume in commercial print due to ongoing secular pressure and continued planned reduction in low margin sales, offset by higher volume in direct marketing primarily attributable to the ~~Variable Print and Strategic Services segments and certain other reporting units within the International segment, as well as price pressures.~~2020 Census contract.

Net sales from services for the three months ended September 30, ~~2017 increased $15.1~~2019 decreased $29.1 million, or ~~3.8%~~9.1%, to ~~$412.9~~$290.6 million versus the same period in ~~2016, including a $0.2 million, or 0.1%, increase due to changes in foreign exchange rates.~~2018. Net sales ~~increased~~from services decreased due primarily ~~due~~ to ~~higher volume as well as increased fuel surcharges in logistics, partially offset by lower postage pass-through sales within logistics,~~ lower volume in ~~business process outsourcing and price pressures.~~our logistics business.

Products cost of sales ~~increased $33.4 million, or 3.2%,~~ for the three months ended September 30, ~~2017~~2019 decreased $3.3 million, or 0.3%, to $1,073.5 million versus the same period in ~~the prior year,~~2018. Products cost of sales decreased primarily due to ~~higher volume and start-up costs within the Asia reporting unit as well as cost inflation, partially offset by lower volume~~changes in ~~the Variable Print segment and certain reporting units within the International segment, along with~~foreign exchange rates, cost control initiatives across both segments and lower volume in commercial print, partially offset by cost inflation and higher volume in direct marketing primarily attributable to the ~~organization.~~2020 Census contract. As a percentage of net sales, products cost of sales ~~increased 2.9~~decreased 0.2 percentage points for the three months ended September 30, ~~2017~~2019 versus the same period in ~~2016, primarily due to an unfavorable mix across the segments.~~2018.

Services cost of sales ~~increased $15.7~~decreased $22.3 million, or ~~4.7%~~8.7%, for the three months ended September 30, ~~2017~~2019 versus the same period in ~~the prior year. Services cost of sales increased~~2018, primarily due to ~~higher~~lower volume in ~~freight brokerage~~our logistics business and ~~higher costs of transportation in the logistics reporting unit,~~cost control initiatives, partially offset by ~~lower postage pass-through sales within logistics and reduced business process outsourcing volume.~~cost inflation. As a percentage of net sales, services cost of sales increased ~~0.8~~0.4 percentage points for the three months ended September 30, ~~2017~~2019 versus the same period in ~~2016, primarily due to unfavorable revenue mix in business process outsourcing.~~2018.

Products gross profit ~~decreased $39.2~~increased $2.3 million to ~~$257.9~~$255.3 million for the three months ended September 30, ~~2017~~2019 versus the same period in ~~2016~~2018, primarily due to ~~price pressures~~favorable product mix, changes in foreign exchange rates and ~~an unfavorable mix in the Variable Print and International segments, partially offset by~~ cost control ~~initiatives. Products gross margin decreased from 22.4% to 19.5%, driven~~initiatives, partially offset by price pressures and ~~an unfavorable revenue mix within the International and Variable Print segment, partially offset by~~ cost ~~control initiatives.~~inflation. Products gross margin increased from 19.0% in 2018 to 19.2% in 2019.

Services gross profit decreased ~~$0.6~~$6.8 million to ~~$66.5~~$55.6 million for the three months ended September 30, ~~2017~~2019 versus the same period in ~~2016~~2018, primarily due to ~~decreased~~lower volume in ~~the~~our logistics business ~~processing outsourcing reporting unit, an unfavorable revenue mix~~ and ~~higher~~

~~costs of transportation in the logistics reporting unit and price pressures, partially offset by increased fuel surcharges in the logistics reporting unit.~~cost inflation. Services gross margin decreased from ~~16.9%~~19.5% in 2018 to ~~16.1%, reflecting an unfavorable revenue mix and price pressures.~~19.1% in 2019.

Selling, general and administrative expenses decreased ~~$10.4~~$13.3 million to ~~$207.7~~$190.5 million for the three months ended September 30, ~~2017~~2019 versus the same period in ~~2016~~2018 reflecting ~~lower corporate and other overhead costs related to our operations prior to the Separation, lower healthcare costs and~~ cost control initiatives ~~partially offset by higher transactional foreign currency expense~~ and ~~higher variable incentive compensation.~~recent business dispositions. As a percentage of net sales, selling, general and administrative expenses decreased from ~~12.6%~~12.4% to ~~12.0%~~11.8% for the three months ended September 30, ~~2017~~2019 versus the same period in ~~2016, due to the impact of the aforementioned expenses.~~2018.

For the three months ended September 30, ~~2017, the Company~~2019, we recorded net restructuring ~~impairment~~ and other ~~charges~~income of ~~$33.8 million. These charges included a non-cash charge~~$2.3 million versus net restructuring and other expense of ~~$21.3~~$11.0 million ~~for the impairment of goodwill~~ in the ~~digital~~same period in 2018. Net restructuring and ~~creative solutions reporting unit within the Strategic Services segment. The charges also~~other income included ~~$10.7~~$0.6 million for employee termination costs ~~which were related to the reorganization~~ ~~of selling, general and administrative functions primarily within the~~ ~~Corporate and International segments. The Company also incurred lease termination~~ and other restructuring ~~costs~~charges of ~~$1.1~~$1.0 million ~~and net impairment charges~~ for ~~other long-lived assets of $0.2 million primarily related to the impairment of equipment in the Variable Print segment during~~ the three months ended September 30, ~~2017.~~2019. Additionally, we recorded a $4.7 million net gain on the ~~Company recorded $0.5 million~~sale of ~~other charges~~restructured facilities for ~~multi-employer pension plan withdrawal obligations unrelated to facility closures. Refer to~~three months ended September 30, 2019. See Note 7,6, Restructuring ~~Impairment~~ and Other ~~Charges~~, within the Notes to the Condensed Consolidated Financial Statements for ~~additional information.~~

For the three months ended September 30, 2016, the Company recorded net restructuring, impairment and other charges of $10.8 million. The Company recorded $9.7 million of employee termination costs, primarily related to the reorganization of certain administrative functions and operations. The Company also recorded lease termination and other restructuring charges of $0.6 million and $0.6 million of other charges related to multi-employer pension plan withdrawal obligations unrelated to facility closures for the three months ended September 30, 2016. Additionally, the Company recorded $0.1 million of net gains related to buildings and machinery and equipment associated with facility closures. Refer to Note 7, ~~Restructuring, Impairment and Other Charges, within the Notes to the Condensed Consolidated Financial Statements for additional information.~~further discussion.

Depreciation and amortization decreased ~~$4.0~~$0.7 million to ~~$47.0~~$43.5 million for the three months ended September 30, ~~2017~~2019 compared to the same period in 2016 primarily due to lower capital spending in recent years compared to historical levels and certain International customer relationship intangible assets becoming fully amortized since the prior year.2018. Depreciation and amortization included ~~$7.1~~$5.9 million and ~~$8.0~~$6.8 million of amortization of other intangible assets related to ~~customer~~client relationships, trade names, trademarks, licenses and agreements for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

~~For~~Other operating expense for the three months ended September 30, ~~2016,~~2019 was $5.4 million compared to other operating income of $4.5 million in the same period in 2018. The expense ~~was $0.3 million, which consisted~~in 2019 primarily related to the ongoing SEC and DOJ investigations and the ongoing bankruptcy liquidation of RRD Brazil. The prior year amount related to a ~~net loss~~pre-tax gain on the sale of ~~entities~~our Print Logistics business in ~~the International segment.~~July 2018.

Income from operations for the three months ended September 30, ~~2017~~2019 was ~~$35.9~~$73.8 million, ~~a decrease~~an increase of ~~$48.1~~$12.9 million, or ~~57.3%~~21.2%, compared to the three months ended September 30, 2016. The decrease was due to higher restructuring, impairment and other charges, the prior year OPEB curtailment gains, lower volume in certain reporting units within the International and Variable Print segments, price pressures, start-up costs within the Asia reporting unit and higher transactional foreign currency expense, partially offset by lower corporate and other overhead costs related to our operations prior to the Separation, higher volume in the Asia reporting unit, lower healthcare costs and depreciation and amortization expense and cost control initiatives.2018.

Net interest expense decreased by ~~$5.3~~$4.6 million for the three months ended September 30, ~~2017~~2019 versus the same period in ~~2016,~~2018, primarily due to ~~a decrease in~~lower average ~~senior notes outstanding.~~interest rates and lower average debt outstanding during the three months ended September 30, 2019.

Investment and other ~~income-net~~income, net for the three months ended September 30, ~~2017~~2019 and ~~2016~~2018 was ~~$2.8~~$4.6 million and ~~$1.0~~$5.5 million, ~~respectively. During~~respectively, and principally comprised of net OPEB and pension income.

Loss on debt extinguishment for the three months ended September 30, ~~2017,~~2019 was $0.8 million which related to the ~~Company recognized a non-cash net realized gain~~repurchase of ~~$1.6 million on the retained shares of Donnelley Financial exchanged for certain of the Company’s~~ senior notes ~~outstanding.~~and debentures. See Note ~~15,~~14, Debt, within the Notes to the Condensed Consolidated Financial Statements for ~~additional details of the debt-for-equity exchange.~~further discussion.

Loss on debt extinguishments for the three months ended September 30, 2017 was $6.5 million which related to unamortized debt issuance costs, premiums paid and other expenses associated with the amendment and restatement of the credit agreement as well as the debt-for-equity exchange of senior notes during the three months ended September 30, 2017. Refer to Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details.~~

The effective income tax rate for the three months ended September 30, ~~2017~~2019 was ~~31.0% compared~~an expense of 67.9% and was higher than the Federal statutory rate primarily due to ~~38.4% in~~limitations on the ~~same period in 2016.~~ interest expense deduction as a result of the Tax Act. The~~The~~ effective income tax rate for the ~~period~~three months ended September 30, ~~2017~~ ~~reflects~~2018 was a benefit of 42.6% which included adjustments to the ~~impact~~provisional amounts related to the Tax Act, the release of a valuation allowance utilized due to the ~~impairment~~gain on the sale of ~~goodwill in the digital and creative solutions~~ ~~reporting unit~~our Print Logistics business and the inability to recognize a tax benefit on certain ~~losses. The~~ losses~~income tax provision for the period ended September 30, 2016 reflects the impact of income generated in higher taxing jurisdictions and the inability to recognize a tax benefit on certain losses.~~.

Income attributable to noncontrolling interests was ~~$0.2~~$0.3 million and ~~$0.3~~$0.5 million for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

~~The net loss from continuing operations, excluding the impact from non-controlling interests,~~Net income attributable to RRD common stockholders ~~for the three months ended September 30, 2017~~ was ~~$8.0~~$12.6 million ~~or $0.11 per diluted share, compared to net earnings of $22.0 million, or $0.31 per diluted share, for the three months ended September 30, 2016.~~

~~The following tables summarize net sales, income (loss) from operations~~ and certain items impacting comparability within each of the operating segments and Corporate. The descriptions of the reporting units generally reflect the primary products or services provided by each reporting unit. Included in these net sales amounts are sales of other products or services that may be produced within a reporting unit to meet customer needs and improve operating efficiency.

Net sales for the Variable Print segment for the three months ended September 30, 2017 were $767.5 million, a decrease of $22.8 million, or 2.9%, compared to 2016, including a $0.3 million increase due to changes in foreign exchange rates. Net sales

decreased due to lower volume primarily in commercial and digital print, direct mail and forms and price pressures, partially offset by higher volume in statement printing and labels. An analysis of net sales by reporting unit follows:

~~Variable Print segment income from operations decreased $10.8~~$34.3 million for the three months ended September 30, ~~2017, primarily due to lower volume~~2019 and ~~unfavorable mix within commercial and digital print and price pressures, partially offset~~2018, respectively.

Information by a favorable mix within statement printing. Operating margins decreased from 6.3% for the three months ended September 30, 2016 to 5.1% for the three months ended September 30, 2017 due to an unfavorable mix within commercial and digital print and price pressures, partially offset by cost control initiatives and a favorable mix within statement printing. Higher restructuring, impairment and other charges unfavorably impacted operating margins by 0.3 percentage points.Segment

Net sales for the ~~Strategic~~Business Services segment for the three months ended September 30, ~~2017~~2019 were ~~$443.7~~$1,276.0 million, a decrease of ~~$1.3~~$87.2 million, or ~~0.3%~~6.4%, compared to ~~2016.~~2018. Net sales decreased $13.4 million due to business dispositions, primarily our Brazil business, and $10.5 million due to changes in foreign exchange rates. The remaining decrease in net sales was primarily due to lower ~~postage pass-through sales in logistics, lower~~ volume in sourcing and digital and creative solutions and price pressures, partially offset by higher volume in freight brokerage and increased fuel surcharges in logistics. An analysis of net sales by reporting unit follows:

~~Digital~~pressures across the segment. The following table summarizes net sales by products and ~~creative solutions: Sales increased slightly due to incremental revenue from~~services in the ~~acquisition of Precision Dialogue in August 2016, partially offset by lower photo and prepress volume.~~Business Services segment:

	Three Months Ended
	September 30,
Products and Services	2019		2018		$ Change			% Change
	(in millions, except percentages)
Commercial print	$	442.9	$	496.4	$	(53.5	)		(10.8	%)
Logistics		204.6		229.1		(24.5	)		(10.7	%)
Packaging		182.1		179.7		2.4			1.3	%
Statements		134.0		133.5		0.5			0.4	%
Labels		124.0		118.8		5.2			4.4	%
Supply chain management		69.8		81.5		(11.7	)		(14.4	%)
Forms		60.0		63.7		(3.7	)		(5.8	%)
Business process outsourcing		58.6		60.5		(1.9	)		(3.1	%)
Total Business Services	$	1,276.0	$	1,363.2	$	(87.2	)		(6.4	%)

~~Strategic~~

Business Services segment income from operations ~~decreased $28.1~~increased $5.8 million to $80.6 million for the three months ended September 30, ~~2017, mainly~~2019, primarily due to lower restructuring expense mostly attributable to net gains on the ~~$21.3 million impairment~~sale of ~~goodwill~~restructured facilities, lower depreciation and amortization expense and cost control initiatives, including the closure of our operation in ~~the digital and creation solutions reporting unit, an unfavorable revenue mix, higher cost of transportation and price pressures within logistics and lower volume in digital and creative solutions,~~Brazil, partially offset by ~~increased fuel surcharges. Operating margins decreased from 3.0% to (3.3%), primarily due to higher restructuring, impairment and other charges, an unfavorable revenue mix within the segment and~~lower volume, price pressures ~~partially offset by favorable fuel surcharges in logistics, productivity~~ and cost ~~control initiatives. Higher restructuring, impairment and other charges favorably impacted operating margins by 4.7 percentage points.~~inflation.

Marketing Solutions

~~International~~

Three Months Ended

September 30,

2017

2016

(in millions, except percentages)

Net sales

$
523.7

$
490.3

Income from operations

20.6

36.0

Operating margin

3.9
%

7.3
%
Gain on sale of businesses

—

(0.3
)
OPEB curtailment gain

—

(0.1
)
Restructuring, impairment and other charges-net

2.2

1.1

Net Sales for the Three Months Ended

September 30,

Reporting unit

2017

2016

$ Change

% Change

(in millions, except percentages)

Asia

$
228.2

$
183.1

$
45.1

24.6
%
Global Turnkey Solutions

119.7

128.1

(8.4
)

(6.6
%)
Business process outsourcing

96.1

99.8

(3.7
)

(3.7
%)
Canada

45.2

46.2

(1.0
)

(2.2
%)
Latin America

34.5

33.1

1.4

4.2
%
Total International

$
523.7

$
490.3

$
33.4

6.8
%

	Three Months Ended
	September 30,
	2019			2018
	(in millions, except percentages)
Net sales	$	343.4		$	286.3
Income from operations		24.4			11.8
Operating margin		7.1	%		4.1	%
Restructuring and other-net		0.1			0.2

Net sales infor the ~~International~~Marketing Solutions segment for the three months ended September 30, ~~2017~~2019 were ~~$523.7~~$343.4 million, an increase of ~~$33.4~~$57.1 million, or ~~6.8%~~19.9%, compared to ~~the same period in 2016, inclusive of a $5.0 million, or 1.0%, increase due to changes in foreign exchange rates.~~2018. Net sales increased primarily due to higher volume in ~~Asia, partially offset by lower volume in Global Turnkey Solutions, business process outsourcing and Canada, as well as price pressures. An analysis of~~direct marketing attributable to the 2020 Census contract. The following table summarizes net sales by ~~reporting unit follows:~~products and services in the Marketing Solutions segment:

~~Asia: Sales increased due to higher volume primarily in packaging and book products, partially offset by price pressures.~~

~~Global Turnkey Solutions: Sales decreased primarily due to lower volume in supply chain, books and packaging, partially offset by favorable changes in foreign exchange rates.~~

~~Business process outsourcing: Sales decreased due to lower volume and price pressures.~~

~~Canada: Sales decreased due to lower volume in commercial print and statement printing, partially offset by favorable changes in foreign exchange rates.~~

~~Latin America: Sales increased primarily due to favorable changes in foreign exchange rates across the region and higher volume.~~

	Three Months Ended
	September 30,
Products and Services	2019		2018		$ Change			% Change
	(in millions, except percentages)
Direct marketing	$	193.5	$	142.7	$	50.8			35.6	%
Digital print and fulfillment		122.5		113.5		9.0			7.9	%
Digital and creative solutions		27.4		30.1		(2.7	)		(9.0	%)
Total Marketing Solutions	$	343.4	$	286.3	$	57.1			19.9	%

~~International~~Marketing Solutions segment income from operations ~~decreased $15.4~~increased $12.6 million ~~primarily due~~ to lower volume in Global Turnkey Solutions and business process outsourcing, cost inflation, higher transactional foreign currency expense, price pressures and start-up costs in Asia, partially offset by increased volume in Asia. Operating margins decreased from 7.3% to 3.9%, driven by lower volume in Global Turnkey Solutions and business process outsourcing, higher transactional foreign currency expense, price pressures, start-up costs in Asia and higher restructuring, impairment and other charges, partially offset by increased volume in Asia. Higher restructuring, impairment and other charges unfavorably impacted operating margins by 0.2 percentage points.

~~Corporate~~

Three Months Ended

September 30,

2017

2016

(in millions)

Operating expenses

$
(9.2
)

$
(15.4
)
Pension settlement

—

0.3

Restructuring, impairment and other charges-net

5.3

6.5

OPEB curtailment gain

—

(19.6
)
Loss on the sale of businesses

—

0.6

Acquisition-related expenses

—

0.7

~~Corporate operating expenses in~~$24.4 million for the three months ended September 30, ~~2017~~2019, primarily due to higher volume in direct marketing attributable to the 2020 Census contract.

Corporate

Corporate operating expenses during the three months ended September 30, 2019 were ~~$9.2~~$31.2 million, ~~a decrease~~an increase of ~~$6.2~~$5.5 million compared to the same period in ~~2016.~~2018. The ~~decrease~~increase was primarily driven by ~~lower corporate and~~higher other ~~overhead costs~~operating expense related to the ~~pre-Separation combined entity, cost control initiatives~~ongoing SEC and ~~lower healthcare costs, partially offset by~~DOJ investigations and the ~~prior year OPEB curtailment gains~~ongoing bankruptcy liquidation of RRD Brazil. The following table summarizes unallocated operating expenses and ~~lower pension and postretirement plan income.~~certain items impacting comparability within the activities presented as Corporate:

	Three Months Ended
	September 30,
	2019		2018
	(in millions)
Operating expenses	$	31.2	$	25.7
Restructuring and other-net		2.7		3.7
Other operating expense		5.4		—
Acquisition-related expenses		0.3		—

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2019 AS COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, ~~2016~~2018

The following table shows the results of operations for the nine months ended September 30, ~~2017~~2019 and ~~2016, which reflects the results of acquired businesses from the relevant acquisition dates:~~2018:

	Nine Months Ended September 30,											Nine Months Ended
	2017		2016			$ Change			% Change			September 30,
	(in millions, except percentages)											2019		2018			$ Change			% Change
												(in millions, except percentages)
Products net sales	$	3,830.9	$	3,772.5		$	58.4			1.5	%	$	3,774.4	$	3,881.6		$	(107.2	)		(2.8	%)
Services net sales		1,182.9		1,201.6			(18.7	)		(1.6	%)		875.6		1,155.2			(279.6	)		(24.2	%)
Total net sales		5,013.8		4,974.1			39.7			0.8	%		4,650.0		5,036.8			(386.8	)		(7.7	%)
Products cost of sales (exclusive of depreciation and amortization)		3,065.7		2,958.1			107.6			3.6	%		3,076.4		3,167.7			(91.3	)		(2.9	%)
Services cost of sales (exclusive of depreciation and amortization)		992.8		1,002.9			(10.1	)		(1.0	%)		706.2		968.4			(262.2	)		(27.1	%)
Total cost of sales		4,058.5		3,961.0			97.5			2.5	%		3,782.6		4,136.1			(353.5	)		(8.5	%)
Products gross profit		765.2		814.4			(49.2	)		(6.0	%)		698.0		713.9			(15.9	)		(2.2	%)
Services gross profit		190.1		198.7			(8.6	)		(4.3	%)		169.4		186.8			(17.4	)		(9.3	%)
Total gross profit		955.3		1,013.1			(57.8	)		(5.7	%)		867.4		900.7			(33.3	)		(3.7	%)
Selling, general and administrative expenses (exclusive of depreciation and amortization)		643.6		681.0			(37.4	)		(5.5	%)		589.1		626.4			(37.3	)		(6.0	%)
Restructuring, impairment and other charges-net		46.7		24.3			22.4			92.2	%
Restructuring and other-net													30.8		22.8			8.0			35.1	%
Depreciation and amortization		143.1		153.5			(10.4	)		(6.8	%)		126.2		137.5			(11.3	)		(8.2	%)
Other operating income		—		(12.0	)		12.0		nm
Other operating expense (income)													3.3		(4.6	)		7.9		nm
Income from operations	$	121.9	$	166.3		$	(44.4	)		(26.7	%)	$	118.0	$	118.6		$	(0.6	)		(0.5	%)

Net sales of products for the nine months ended September 30, ~~2017 increased $58.4~~2019 decreased $107.2 million, or ~~1.5%~~2.8%, to ~~$3,830.9~~$3,774.4 million versus the ~~prior year~~same period ~~including~~in 2018. The nine months ended September 30, 2019 included a ~~$7.9~~$45.0 million ~~or 0.2%,~~ decrease due to changes in foreign exchange ~~rates.~~rates and a $26.7 million decrease due to the bankruptcy liquidation of RRD Brazil. Net sales of products ~~increased~~also decreased due to ~~higher volume within the Asia and sourcing reporting units, partially offset by~~ lower volume in ~~the Variable Print segment~~commercial print due to ongoing secular pressure and ~~certain other reporting units within the International segment,~~continued planned reduction in low margin sales, as well as price ~~pressures.~~ pressure, partially offset by higher volume in direct marketing primarily attributable to the 2020 Census contract.

Net sales from services for the nine months ended September 30, ~~2017~~2019 decreased ~~$18.7~~$279.6 million, or 24.2%, to ~~$1,182.9~~$875.6 million versus the same period in ~~2016, including an $8.2~~2018. Net sales from services decreased $205.0 million ~~or 0.7%, decrease~~ due to ~~change in foreign exchange rates.~~business dispositions, primarily our Print Logistics business. Net sales from services also decreased ~~primarily~~ due to lower ~~postage pass-through sales within logistics, lower~~ volume in ~~business process outsourcing and price pressures, partially offset by higher volume in freight brokerage and courier services as well as increased fuel surcharges within~~ the remaining logistics ~~reporting unit.~~ business.

Products cost of sales ~~increased $107.6~~for the nine months ended September 30, 2019 decreased $91.3 million, or ~~3.6%~~2.9%, to $3,076.4 million versus the same period in 2018 primarily due to the reduction in net sales.

Services cost of sales decreased $262.2 million, or 27.1%, for the nine months ended September 30, ~~2017~~2019 versus the same period in ~~the prior year,~~2018, primarily due to ~~higher volume within~~ the ~~Asia and sourcing reporting units as well as cost inflation, partially offset by lower volume in the Variable~~disposition of our Print ~~segment and certain reporting units within the International segment~~Logistics business and cost control initiatives across the organization. As a percentage of net sales, products cost of sales increased 1.6% for the nine months ended September 30, 2017 versus the same period in the prior year, primarily due to an unfavorable mix across the segments.

Services cost of sales decreased $10.1 million, or 1.0%, for the nine months ended September 30, 2017 versus the same period in the prior year. Services cost of sales decreased primarily due to lower postage pass-through sales within logistics and reduced business process outsourcing volume, partially offset by higher volume in freight brokerage and courier services and higher costs of transportation in the logistics reporting unit.initiatives. As a percentage of net sales, services cost of sales ~~increased 0.4%~~decreased 3.1 percentage points for the nine months ended September 30, ~~2017~~2019 versus the same period in ~~the prior year driven by an unfavorable revenue mix in business process outsourcing and the logistics reporting unit.~~2018.

Products gross profit decreased ~~$49.2~~$15.9 million to ~~$765.2~~$698.0 million for the nine months ended September 30, ~~2017~~2019 versus the same period in ~~2016~~2018, primarily due to ~~price pressures and~~ lower volume, ~~in certain International reporting units~~unfavorable product mix, cost inflation and ~~the Variable Print segment,~~price pressures, partially offset by ~~higher volume~~changes in ~~the Asia reporting unit~~foreign exchange rates and cost control initiatives. Products gross margin ~~decreased~~increased from ~~21.6%~~18.4% to ~~20.0%, driven by price pressures and an unfavorable revenue mix within much of~~18.5% for the ~~International and Variable Print segments and~~nine months ended September 30, 2019 versus the ~~sourcing reporting unit, partially offset by cost control initiatives.~~ same period in 2018.

Services gross profit decreased ~~$8.6~~$17.4 million to ~~$190.1~~$169.4 million for the nine months ended September 30, ~~2017~~2019 versus the same period in ~~2016~~2018, primarily due to lower ~~business process outsourcing~~ volume ~~and price pressures, partially offset by increased fuel surcharges within the~~in our logistics ~~reporting unit.~~business. Services gross margin ~~decreased~~increased from ~~16.5%~~16.2% in 2018 to ~~16.1%, primarily reflecting an unfavorable revenue mix.~~19.3% in 2019.

Selling, general and administrative expenses decreased ~~$37.4~~$37.3 million to ~~$643.6~~$589.1 million for the nine months ended September 30, ~~2017~~2019 versus the same period in ~~2016, due to the pension settlement charge in the prior year period, lower corporate and other overhead costs related to our operations prior to the Separation, lower bad debt and legal expenses and~~2018 reflecting cost control initiatives ~~partially offset by higher transactional foreign currency expense, higher variable incentive compensation expense~~ and ~~lower pension and other post-retirement benefits income.~~the recent dispositions. As a percentage of net sales, selling, general and administrative expenses ~~decreased~~increased from ~~13.7%~~12.4% to ~~12.8%~~12.7% for the nine months ended September 30, ~~2017~~2019 versus the same period in ~~2016, due to the impact of the aforementioned expenses.~~ 2018.

For the nine months ended September 30, ~~2017, the Company recorded~~2019, net restructuring ~~impairment~~ and other ~~charges~~expense of ~~$46.7 million.~~$30.8 million increased $8.0 million versus the same period in 2018. These ~~charges~~expenses included ~~a non-cash charge of $21.3 million for the impairment of goodwill in the digital and creative solutions reporting unit within the Strategic Services segment as well as~~ $19.5 million ~~of employee termination costs, which were related to~~ the reorganization of selling, general and administrative functions primarily within the Corporate, International and Variable Print segments, ceasing the Company’s relationship in a joint venture within the International segment and one facility closure in the Strategic Services segment. ~~The Company also incurred lease termination and other restructuring charges of $3.8 million and net impairment charges~~ for other long-lived assets of $0.4 million for impairment of equipment primarily related to a facility closure in the Strategic Services segment, partially offset by a net gain recognized on the sale of previously impaired equipment during the nine months ended September 30, 2017. Additionally, the Company recorded $1.7 million of other charges for multi-employer pension plan withdrawal obligations unrelated to facility closures. Refer to Note 7, ~~Restructuring, Impairment and Other~~ ~~Charges, within the Notes to the Condensed Consolidated Financial Statements for additional information.~~

~~For the nine months ended September 30, 2016, the Company recorded net restructuring, impairment and other charges of $24.3 million. The Company recorded $20.7 million of~~ employee termination costs, primarily ~~due~~related to ~~two~~the relocation of a printing facility ~~closures~~ in ~~the International segment~~Shenzhen, China and ~~the reorganization of certain administrative functions and operations. The Company also recorded lease termination and~~$13.7 million for other restructuring charges ~~of $2.9 million and $1.7 million of other charges related to multi-employer pension plan withdrawal obligations unrelated to facility closures~~ for the nine months ended September 30, ~~2016.~~2019. Additionally, ~~the Company~~we recorded ~~$1.0~~a $4.6 million of net ~~gains~~gain on the sale of ~~previously impaired assets, partially offset by impairment charges related to buildings~~restructured facilities for the nine months ended September 30, 2019. See Note 6, Restructuring and ~~machinery and equipment associated with facility closures. Refer to Note 7,~~ Other~~Restructuring, Impairment and Other Charges~~, within the Notes to the Condensed Consolidated Financial Statements for ~~additional information.~~ further discussion.

Depreciation and amortization decreased ~~$10.4~~$11.3 million to ~~$143.1~~$126.2 million for the nine months ended September 30, ~~2017~~2019 compared to the same period in ~~2016~~2018 primarily due to lower capital spending in recent years compared to historical ~~levels and certain International customer relationship intangible assets becoming fully amortized since the prior year quarter.~~levels. Depreciation and amortization included ~~$21.6~~$18.1 million and ~~$25.7~~$20.7 million of amortization of other intangible assets related to ~~customer~~client relationships, trade names, trademarks, licenses and agreements for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

~~For~~Other operating expense for the nine months ended September 30, ~~2016,~~2019 was $3.3 million compared to other operating income of $4.6 million for the same period in 2018. The expense in 2019 was ~~$12.0~~primarily related to the ongoing SEC and DOJ investigations, an increase in reserves for an unfavorable state sales tax matter and expenses related to the ongoing bankruptcy liquidation of RRD Brazil, partially offset by the gains from the recent dispositions. The prior year amount primarily included a $4.5 million ~~which consisted of a net~~pre-tax gain on the sale of ~~entities~~our Print Logistics business in ~~the International segment.~~July 2018.

Income from operations for the nine months ended September 30, ~~2017~~2019 was ~~$121.9~~$118.0 million, a decrease of ~~$44.4~~$0.6 million, or ~~26.7%~~0.5%, compared to the nine months ended September 30, 2016. The decrease was due to lower volume in certain reporting units within the International and Variable Print segments, price pressures, higher restructuring, impairment and other charges, the prior year OPEB curtailment gains, the prior year net gain on the sale of entities in the International segment and higher transactional foreign currency expense, partially offset by the prior year pension settlement charge, lower corporate and other overhead costs related to our operations prior to the Separation, higher volume in the Asia reporting unit, reduced bad debt, legal and depreciation and amortization expenses and cost control initiatives.2018.

Net interest expense decreased by ~~$13.3~~$10.1 million for the nine months ended September 30, ~~2017~~2019 versus the same period in ~~2016,~~2018, primarily due to lower average borrowings and ~~a lower weighted average~~ interest ~~rate~~rates during ~~the~~ nine months ended September 30, ~~2017.~~ 2019.

~~Net investment~~Investment and other ~~income-net~~income, net for the nine months ended September 30, ~~2017~~2019 and ~~2016 of $47.2~~2018 was $11.3 million and ~~$0.4~~$14.7 million, ~~respectively. For the nine months ended September 30, 2017, the Company recorded a non-cash~~respectively, and principally comprised of net ~~realized gain of $94.0 million on the retained shares of Donnelley Financial exchanged for certain of the Company’s senior notes outstanding~~pension and a gain of $1.3 million resulting from the sale of certain of the Company’s affordable housing investments, partially offset by a net realized loss of $51.6 million resulting from the sale of the Company’s retained shares of LSC. OPEB income.

Loss on debt ~~extinguishments~~extinguishment for the nine months ended September 30, ~~2017~~2019 was ~~$20.1~~$0.8 million which related to ~~premiums paid in connection with~~ the ~~tenders, unamortized debt issuance costs and other expenses associated with the debt-for-equity exchange~~repurchase of senior notes and debentures. See Note 14, Debt, within the ~~repurchase of debentures and senior notes and the amendment and restatement of the credit agreement. Refer to Note 15,~~ ~~Debt,~~Notes to the Condensed Consolidated Financial Statements for ~~additional details.~~further discussion.

The effective income tax rate for the nine months ended September 30, ~~2017~~2019 was ~~(63.2%) compared~~an expense of 123.3% and was higher than the Federal statutory rate primarily due to 80.1% in the same period in 2016. The income tax rate for the period ended nine months ended September 30, 2017 reflects the impact of impairment of goodwill in the digital and creative solutions reporting unit, the inability to recognize a tax benefit on certain losses and limitations on the ~~impact~~interest expense deduction as a result of the ~~net gain on the disposition of investments.~~Tax Act. The Donnelley Financial retained shares were disposed in a non-taxable debt-for-equity exchange. The sale of the LSC retained shares generated a capital loss which will be carried forward; however, it is more likely than not that the benefit of such deferred tax asset will not be fully realized and a valuation allowance was recorded. The effective income tax ~~provision~~rate for the nine months ended September 30, ~~2016 reflects~~2018 was a benefit of 72.0% which included adjustments to the ~~impact~~provisional amounts related to the Tax Act, the release of ~~income generated in higher taxing jurisdictions~~a valuation allowance utilized due to the gain on the sale of our Print Logistics business and the inability to recognize a tax benefit on certain ~~losses.~~losses.

Income attributable to noncontrolling interests was ~~$0.7~~$0.2 million and ~~$0.8~~$1.2 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

Net ~~earnings from continuing operations, excluding the impact from non-controlling interests,~~(loss) income attributable to RRD common stockholders ~~for the nine months ended September 30, 2017~~ was ~~$18.4~~a loss of $3.2 million ~~or $0.26 per diluted share, compared to $2.4 million, or $0.03 per diluted share, for the nine months ended September 30, 2016.~~

~~The following tables summarize net sales,~~and income ~~(loss) from operations and certain items impacting comparability within each~~ of the operating segments and Corporate. The descriptions of the reporting units generally reflect the primary products or services provided by each reporting unit. Included in these net sales amounts are sales of other products or services that may be produced within a reporting unit to meet customer needs and improve operating efficiency.

Net sales for the Variable Print segment for the nine months ended September 30, 2017 were $2,279.6 million, a decrease of $32.2 million, or 1.4%, compared to 2016, including a $0.2 million increase due to changes in foreign exchange rates. Net sales decreased due to lower volume primarily in commercial and digital print, direct mail, forms and price pressures, partially offset by the incremental sales from the Precision Dialogue acquisition. An analysis of net sales by reporting unit follows:

~~Variable Print segment income from operations decreased $29.8~~$11.7 million for the nine months ended September 30, ~~2017 primarily due to lower volume within commercial~~2019 and digital print and direct mail, price pressures and higher variable incentive compensation, partially offset by a favorable mix within statement printing, labels and forms. Operating margins decreased from 6.2% for the nine months ended September 30, 2016 to 5.0% for the nine months ended September 30, 2017 due to lower volume and an unfavorable mix within commercial and digital print and direct mail and price pressures, partially offset by cost control initiatives and a favorable mix within statement printing, labels and forms. Higher restructuring, impairment and other charges unfavorably impacted operating margins by 0.1 percentage points.2018, respectively.

Net sales for the ~~Strategic~~Business Services segment for the nine months ended September 30, ~~2017~~2019 were ~~$1,274.3~~$3,743.5 million, a decrease of $444.8 million, or 10.6%, compared to the nine months ended September 30, 2018. Net sales decreased $231.7 million due to business dispositions, primarily our Print Logistics business, and $49.3 million due to changes in foreign exchange rates. The remaining decrease in net sales was primarily due to lower volume in commercial print due to ongoing secular pressure and continued planned reduction in low margin sales, lower volume in the remaining logistics business and price pressures across the segment. The following table summarizes net sales by products and services in the Business Services segment:

Business Services segment income from operations decreased $2.1 million for the nine months ended September 30, 2019, primarily due to higher restructuring expense, lower volume, price pressures and cost inflation, partially offset by changes in foreign exchange rates, lower depreciation and amortization expense and cost control initiatives.

Net sales for the Marketing Solutions segment for the nine months ended September 30, 2019 were $906.5 million, an increase of ~~$44.7~~$58.0 million ~~or 3.6%,~~ compared to ~~2016.~~the nine months ended September 30, 2018. Net sales increased primarily due to higher volume in ~~sourcing, freight brokerage and courier services and increased fuel surcharges in logistics, partially offset by lower postage pass-through sales in logistics. An analysis of~~direct marketing attributable to the 2020 Census contract. The following table summarizes net sales by ~~reporting unit follows:~~products and services in the Marketing Solutions segment:

~~Strategic Services~~Marketing Solutions segment income from operations ~~decreased $32.3~~increased $6.2 million to $38.9 million for the nine months ended September 30, ~~2017, mainly~~2019, primarily due to ~~the impairment of goodwill in digital and creative solutions, lower~~higher volume in print logistics and digital and creative solutions, price pressures, higher costs of transportation in logistics and higher variable incentive compensation, partially offset by increased fuel surcharges within logistics and productivity and cost control initiatives. Operating margins decreased from 2.1% fordirect marketing attributable to the 2020 Census contract.

Corporate operating expenses during the nine months ended September 30, 2016 to (0.5%) for the nine months ended September 30, 2017 primarily due to higher restructuring, impairment and other charges, unfavorable mix within the segment, price pressures and higher variable incentive compensation, partially offset by favorable fuel surcharges in logistics, increased productivity and cost control initiatives. Higher restructuring, impairment and other charges negatively impacted operating margins by 1.7 percentage points.

~~Net sales in the International segment for the nine months ended September 30, 2017~~2019 were ~~$1,459.9~~$71.7 million, an increase of $27.2 million, or 1.9%, compared to the same period in 2016, inclusive of a $16.3 million, or 1.1%, decrease due to changes in foreign exchange rates. Net sales increased due to higher volume in Asia, partially offset by lower volume in Global Turnkey Solutions, business process outsourcing and Canada, as well as price pressures. An analysis of net sales by reporting unit follows:

International segment income from operations decreased $48.0 million primarily due to lower volume in Global Turnkey Solutions, Canada and business process outsourcing, the prior year $12.6 million gain recognized on the sale of businesses, higher costs of transactional foreign exchange expense, as well as price pressures, higher restructuring, impairment and other charges and higher variable incentive compensation, partially offset by increased volume in Asia and lower bad debt expense. Operating margins decreased from 7.1% for the nine months ended September 30, 2016 to 3.7% for the nine months ended September 30, 2017, driven by the prior year $12.6 million gain recognized on the sale of businesses, lower volume in Global Turnkey Solutions, Canada and business process outsourcing, higher transactional foreign exchange expense, price pressures, higher restructuring, impairment and other charges and higher variable incentive compensation, partially offset by increased packaging volume in Asia and lower bad debt expense. The prior year gain on the sale of businesses and higher restructuring, impairment and other charges negatively impacted operating margins by 0.9 and 0.2 percentage points, respectively.

~~Corporate operating expenses in the nine months ended September 30, 2017 were $39.1 million, a decrease of $65.7~~$4.7 million compared to the same period in ~~2016.~~ 2018. The ~~decrease was primarily driven by~~following table summarizes unallocated operating expenses and certain items impacting comparability within the prior year pension settlement charge, lower corporate and other overhead costs related to the pre-Separation combined entity, lower legal and bad debt expenses, cost control initiatives and lower restructuring, impairment and other charges-net, partially offset by the prior year OPEB curtailment gain, lower pension and postretirement plan income, higher variable incentive compensation and spinoff-related transaction expenses.activities presented as Corporate:

~~The Company believes it has~~We believe that we have sufficient liquidity to support ~~its~~our ongoing operations and to invest in future growth to create value for ~~its~~our stockholders. ~~Operating~~Our operating cash flows, existing cash balances and available capacity under ~~the Company’s $800.0 million~~our asset-based senior secured revolving credit facility (the ~~“Credit~~“ABL Credit Agreement”) are ~~the Company’s~~our primary sources of liquidity and are expected to be used for, among other things, ~~payment of interest and principal on the Company’s long-term debt obligations, distributions to stockholders that may be approved by the Board of Directors, acquisitions,~~ capital expenditures necessary to support productivity improvement and growth, ~~and~~ completion of restructuring ~~programs.~~programs, payment of interest and principal on our long-term debt obligations, acquisitions and distributions to stockholders that require approval by the Board of Directors.

The following describes ~~the Company’s~~our cash flows for the nine months ended September 30, ~~2017~~2019 and ~~2016. The Company’s cash flows for all periods prior to the October 1, 2016 Distribution include the impact of LSC and Donnelley Financial. Refer to Note 2,~~ ~~Discontinued Operations, to the Condensed Consolidated Financial Statements for information on the significant non-cash items, capital expenditures and depreciation and amortization related to LSC and Donnelley Financial.~~2018.

Operating cash inflows are largely attributable to sales of ~~the Company’s~~our products and services. Operating cash outflows are largely attributable to recurring expenditures for raw materials, labor, rent, interest, taxes and other operating activities.

Net cash used in operating activities ~~was $12.6 million~~ for the nine months ended September 30, ~~2017, compared to net cash provided by operating activities of $7.8~~2019 was $23.9 million ~~during~~higher than in the same period in ~~2016.~~ 2018, primarily due to higher tax payments.

~~The decrease~~Included in net cash ~~provided by~~used in operating activities ~~was driven by lower~~were the following operating cash ~~earnings,~~ outflows:~~partially offset by~~ ~~the~~ ~~timing of supplier~~

Significant cash (outflows) inflows included in investing and ~~customer payments and lower interest, spinoff-related transaction and tax payments~~.financing activities for each period were as follows:

~~Net cash provided by investing activities~~Capital expenditures for the nine months ended September 30, ~~2017 was $48.0~~2019 were $34.7 million ~~compared~~higher than the same period in 2018, primarily due to ~~net~~ investments associated with building a new facility following the expected sale and relocation of a printing facility in Shenzhen, China and additional investments related to the 2020 Census contract.

Proceeds from sale of investments and other assets for the nine months ended September 30, 2019 primarily included $23.7 million cash ~~used~~received as a deposit for the expected sale of a printing facility in ~~investing activities~~Shenzhen, China and cash proceeds from the sale of ~~$167.9 million~~two restructured facilities of $8.1 million. Proceeds from sale of investments and other assets for the nine months ended September 30, ~~2016. Capital expenditures were $77.2~~2018 included $32.1 million ~~during~~cash received as a deposit for the ~~first nine months~~expected sale of ~~2017,~~ a ~~decrease of $70.7 million as compared to the same period of 2016 primarily driven by LSC~~printing facility in Shenzhen, China and ~~Donnelley Financial capital expenditures in the prior year period of $49.0 million. For the nine months ended September 30, 2017,~~ cash ~~provided by investing activities included net~~ proceeds ~~of $121.4 million~~ from the sale of the Company’s retained interest in LSC. For the nine months ended September 30, 2016, the Company paid $47.5 million to acquire Precision Dialogue. Additionally, for the nine months ended September 30, 2016, cash used in investing activities included $13.7 millioninvestments and other assets of ~~proceeds primarily from business dispositions in the International segment.~~$17.8 million.

Net cash used in financing activities for the nine months ended September 30, 2017 was $139.1 million compared to net cash provided by financing activities of $187.4 million in the same period in 2016. During the nine months ended September 30, 2017, the

Company had $1,000.0 million and $1,165.0 million of payments and borrowings, respectively, under the Company’s credit facilities, compared to none in the prior year period. During the nine months ended September 30, 2017, the Company paid approximately $200.4 million to repurchase certain senior notes and debentures outstanding through borrowings under the Company’s credit facilities. During the nine months ended September 30, 2016, the Company repurchased $503.6 million of aggregate principal of senior notes using the proceeds from the issuance of senior notes and senior secured term loan B facilities of $450.0 million and $725.0 million, respectively, issued by its formerly, wholly-owned subsidiaries LSC and Donnelley Financial, which proceeds were received as distributions by the Company immediately prior to the Separation. Additionally, during the nine months ended September 30, 2016, cash on hand and the borrowings under the prior credit agreement were used to pay $219.8 million of the 8.60% senior notes that matured on August 15, 2016.

Additionally, dividends paid decreased $133.8 million from $163.2 million during the nine months ended September 30, 2016 to $29.4 million during the nine months ended September 30, 2017. During the nine months ended September 30, 2017, the Company paid the final spinoff cash settlement of $78.0 million to LSC and Donnelley Financial as required by the Separation and Distribution agreement.

Cash and cash equivalents of ~~$225.8~~$144.7 million as of September 30, ~~2017~~2019 included ~~$41.2~~$21.6 million in the U.S. and ~~$184.6~~$123.1 million at international locations. ~~The Company’s foreign subsidiaries are expected to make payments of approximately $17.9 million during the remainder of 2017 in satisfaction of intercompany obligations. The Company has~~We have recognized deferred tax liabilities of ~~$5.7~~$6.6 million as of September 30, ~~2017~~2019 related to local taxes on certain foreign earnings that are not considered to be permanently reinvested. Certain other cash balances of foreign subsidiaries, ~~may be subject to U.S. or local country taxes~~ if repatriated to the U.S., may be subject to additional tax which would depend on income tax laws and circumstances at the time of distribution. In addition, repatriation of some foreign cash balances is further restricted by local laws. ~~Management~~We regularly ~~evaluates~~evaluate whether foreign earnings are expected to be permanently reinvested. This evaluation requires judgment about ~~the~~our future operating and liquidity ~~needs of the Company and its foreign subsidiaries.~~needs. Changes in economic and business conditions, foreign or U.S. tax laws, or ~~the Company’s~~our financial situation could result in changes to these judgments and the need to record additional tax ~~liabilities.~~liabilities.

Included in ~~cash~~Cash and cash equivalents at September 30, ~~2017~~2019 were ~~$23.8~~$12.2 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 expected to be highly liquid.

~~In March 2017,~~During the Company sold the 6,242,802 common shares it retained upon the spinoff of LSC for net proceeds of $121.4 million. The proceeds of this sale were used to repay a portion of the outstanding borrowings under the Company’s credit facility. In June 2017, the Company exchanged 6,143,208 of the 6,242,802 shares of Donnelley Financial retained upon the spinoff for $111.6 million of aggregate principal of certain outstanding senior notes. In August 2017, the Company disposed of its remaining retained shares in Donnelley Financial via a second debt-for-equity exchange, pursuant to which the Company exchanged 99,594 shares of Donnelley Financial’s common stock for $1.9 million of aggregate principal of certain outstanding senior notes. Such debt obligations were cancelled and discharged upon delivery to the Company. As of September 30, 2017, the Company no longer held any shares of LSC or Donnelley Financial common stock.

~~The Company’s debt maturities as of September 30, 2017 are shown in the following table:~~

On June 7, 2017, the Company repurchased $41.7 million of the 6.625% debentures due April 15, 2029, $59.4 million of the 6.50% senior notes due November 15, 2023 and $101.7 million of the 6.00% senior notes due April 1, 2024 using borrowings under the prior credit agreement. The repurchases resulted in a net gain of $0.8 million which was recognized within loss on debt extinguishments in the Condensed Consolidated Statements of Operations during the ninethree months ended September 30, ~~2017 related to~~2019, we repurchased on the ~~difference between the fair value of the debt repurchased~~open market $23.4 million and ~~the principal outstanding, partially offset by premiums paid, unamortized debt issuance costs and other expenses.~~

On February 1, 2019, we retired the $172.2 million 11.25% senior notes using availability under our ABL Credit Agreement.

On October 15, 2018, we repurchased $172.6 million and $257.4 million in aggregate principal amount of the 7.625% senior notes due ~~June 15,~~ 2020 ~~(the “Third Party Purchase Notes”)~~and 7.875% senior notes due 2021, respectively, pursuant to a tender offer. On June 21, 2017, the Company exchanged 6,143,208 of its retained shares of Donnelley Financial for the Third Party Purchase Notes. The Company cancelled the Third Party Purchase Notes on June 21, 2017. AsWe recorded a ~~result, the Company recognized a~~ ~~$14.4 million~~ loss on debt extinguishment of $32.3 million in the ~~Condensed Consolidated Statements~~fourth quarter of ~~Operations during~~2018 on the ~~nine months ended September 30, 2017 related to~~repurchase of the bonds, representing tender premiums paid of $29.0 million, write-off of unamortized debt issuance costs of $1.5 million and ~~other expenses. In addition, the Company recognized a net realized gain~~fees and expenses of ~~$92.4 million~~ resulting from the disposition of the retained shares of Donnelley Financial common stock within investment and other income-net in the Condensed Consolidated Statements of Operations during the nine months ended September 30, 2017.

As described above, on August 4, 2017, the Company disposed of its remaining 99,594 shares of Donnelley Financial common stock in exchange for the extinguishment of $1.9 million in aggregate principal of the Company’s 7.875% senior notes due March 15, 2021. As a result, the Company recognized a $0.3 million loss on debt extinguishments in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2017, related to premiums paid, unamortized debt issuance costs and other expenses. In addition, the Company recognized a net realized gain of $1.6 million resulting from the disposition of these retained shares of Donnelley Financial common stock within investment and other income-net in the Condensed Consolidated Statements of Operations during the ~~three and nine months ended~~ ~~September 30, 2017~~.$1.8 million.

On September 29, 2017, ~~the Company~~we entered into ~~an asset-based revolving credit facility pursuant to~~ the ~~second amended and restated credit agreement (the “Credit Agreement”)~~ABL Credit Agreement which amended and restated ~~the Company’s~~our prior $800.0 million senior secured revolving credit facility dated September 30, 2016. The ABL Credit Agreement provides for a senior secured asset-based revolving credit facility of up to $800.0 ~~million subject to a borrowing base.~~million. The amount available to be borrowed under the ABL Credit Agreement is equal to the lesser of (a) $800.0 million and (b) a borrowing base formula based on the ~~aggregate~~ amount of accounts receivable, inventory, machinery, ~~and~~ 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 the ~~Company and certain of its domestic subsidiaries (the “Guarantors”) (collectively, the “Borrowing Base”),~~Guarantors, subject to certain eligibility criteria and advance ~~rates.~~rates (collectively, the “Borrowing Base”). The aggregate amount of real estate, machinery and equipment that can be included in the Borrowing Base cannot exceed $200.0 million. ~~As a result of entering~~

On October 15, 2018, we entered into Amendment No. 1 to the ABL Credit Agreement, which amended the ~~Company recognized~~ABL Credit Agreement to, among other things, permit (i) the incurrence of the debt pursuant to the Term Loan Credit Agreement and (ii) the incurrence of a ~~$6.2 million loss~~lien on the ABL Priority Collateral to secure our obligations under the Term Loan Credit Agreement and related guarantees on a second-priority basis.

Our obligations under the ABL Credit Agreement 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 ~~unamortized~~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 Agreement 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 Agreement on a second-priority basis, in each case, subject to permitted liens.

The ABL Credit Agreement contains customary restrictive covenants, including a covenant which requires us to maintain a minimum fixed charge coverage ratio under certain circumstances. In addition, our ability to undertake certain actions, including, among other things, prepay certain junior debt, ~~issuance costs~~incur additional indebtedness and make certain restricted payments (including external dividends) depends on satisfaction of certain conditions, including, among other ~~expenses within loss on debt extinguishments in~~things, meeting minimum borrowing availability thresholds under the ~~Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017.~~ABL Credit Agreement.

Borrowings under the ABL Credit Agreement bear interest at a rate dependent on the average quarterly availability under the ABL Credit Agreement and ~~will be~~are 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 0.50% and the applicable margin for Eurocurrency loans ranges from 1.25% to 1.50%. In addition, ~~an unused line~~a fee is payable quarterly on the unused portion of the amount available to be borrowed under the ABL Credit Agreement. The ~~unused line~~ fee accrues at a rate of either ~~0.250%~~0.25% or 0.375% depending upon the average usage of the facility.

~~Proceeds of~~The ABL Credit Agreement is scheduled to mature on September 29, 2022, at which time all outstanding amounts under the ~~loans~~ABL Credit Agreement will be due and payable. Borrowings under the ABL Credit Agreement may be used for working capital and general corporate purposes. ~~The Company’s obligations under the Credit Agreement are guaranteed by its material and certain domestic subsidiaries and are~~ secured by a security interest in certain assets of the Company and its domestic subsidiaries, including accounts receivable, inventory, deposit accounts, securities accounts, investment property, 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 its first-tier foreign subsidiaries.

~~The Credit Agreement is subject to~~ customary restrictive covenants, including a covenant which requires the Company to maintain a minimum fixed charge coverage ratio under certain circumstances. In addition, the Company’s ability to undertake certain actions, including, among other things, prepay certain junior debt, incur additional unsecured indebtedness and make certain restricted payments depends on satisfaction of certain conditions, including, among other things, meeting minimum availability thresholds under the Credit Agreement.

There were ~~$350.0~~$223.0 million of borrowings under the ABL Credit Agreement as of September 30, ~~2017.~~2019. Based on ~~the Company’s~~our borrowing base as of September 30, ~~2017~~2019 and existing borrowings, we had approximately $438.6 million borrowing capacity available under the ~~Company had the ability to utilize approximately $384.9 million of the $800.0 million~~ABL Credit Agreement.

The current availability under the ABL Credit Agreement as of September 30, ~~2017~~2019 is shown in the table below:

During the nine months ended September 30, 2019, we transferred approximately $256 million of cash held in international jurisdictions to the U.S. which was used to reduce debt outstanding. Based on current regulations and process requirements, we expect to transfer additional cash held in international jurisdictions to the U.S. in the fourth quarter of 2019.

As of September 30, ~~2017, the Company was~~2019, we were in compliance with the debt covenants under the ABL Credit Agreement and ~~expects~~expect to remain in compliance based on ~~management’s~~our estimates of operating and financial results for ~~2017~~2019 and the foreseeable future. However, declines in market and economic conditions or demand for certain of the Company’s products and services could impact the Company’s ability to remain in compliance with its debt covenants in future periods. As of September 30, ~~2017, the Company~~2019, we met all the conditions required to borrow under the ABL Credit Agreement and ~~management expects the Company~~we expect to continue to meet the borrowing conditions.

The failure of a financial institution supporting the ABL Credit Agreement would reduce the size of ~~the Company’s~~our committed facility unless a replacement institution was added. Currently, the ABL Credit Agreement is supported by eight U.S. financial institutions.

As of September 30, ~~2017, the Company~~2019, we had ~~$176.7~~$144.4 million in other uncommitted credit facilities, primarily outside the U.S. (the “Other Facilities”). There were ~~$103.3~~$107.6 million in outstanding letters of credit, bank guarantees and bank acceptance drafts ~~which reduced availability,~~ of which ~~$29.7~~$39.1 million were issued, and reduced availability, under the ABL Credit Agreement. Total borrowings under the ABL Credit Agreement and the Other Facilities (the “Combined Facilities”) were ~~$367.6~~$252.4 million as of September 30, ~~2017.~~2019.

~~The Company’s liquidity may be affected by its~~Our credit ~~ratings. The Company’s Standard & Poor Rating Services~~ratings from Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global Ratings (“S&P”) ~~and Moody’s credit ratings~~ as of September 30, ~~2017~~2019 are shown in the table below:

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 September 30, 2019, we have received non-refundable deposits in accordance with the terms of the agreement of approximately $68.3 million which is recorded in Other noncurrent liabilities on the Condensed Consolidated Balance Sheets. Additional deposits will be paid to us in accordance with the agreement. Gross proceeds from the sale, including non-refundable deposits, are expected to be approximately $250.0 million, subject to changes in the exchange rate,and we expect the transaction to close in 2021 after closing conditions are satisfied and government approvals are obtained. As of September 30, 2019, the carrying cost of the building and land use rights is recorded in Other noncurrent assets and is not material.

During the nine months ended September 30, ~~2017, the Company~~2019, we paid cash dividends of ~~$29.4~~$6.4 million. On October ~~25, 2017,~~24, 2019, the Board of Directors of the Company declared a quarterly cash dividend of ~~$0.14~~$0.03 per common share, payable on December ~~1, 2017~~2, 2019 to ~~RRD~~ stockholders of record on November 15, ~~2017.~~2019.

During the nine months ended September 30, 2016, the Company paid $47.5 million, net of cash acquired, to acquire Precision Dialogue. Additionally, during the nine months ended September 30, 2016, the Company sold immaterial entities within the International segment for net proceeds of $13.7 million.

On September 30, 2016, the Company’s then wholly-owned subsidiary Donnelley Financial issued senior notes and incurred a senior secured term loan B facility with total aggregate principals of $300.0 million and $350.0 million, respectively. Additionally on September 30, 2016, the Company’s then wholly-owned subsidiary LSC issued senior notes and incurred a senior secured term loan B facility with total aggregate principal of $450.0 million and $375.0 million, respectively. All of the related net proceeds were distributed to the Company or exchanged for debt in connection with the Separation. After the Separation, RR Donnelley has no obligations as it relates to these senior notes, senior secured term loan B facilities or any other LSC or Donnelley Financial indebtedness.

~~The Company is~~We are exposed to interest rate risk on ~~its~~our variable debt and price risk on ~~its~~our fixed-rate debt. At September 30, ~~2017, the Company’s~~2019, our variable-interest borrowings were ~~$367.6~~$798.3 million. Approximately ~~83.8%~~61.0% of ~~the Company’s~~our outstanding debt was comprised of fixed-rate debt as of September 30, ~~2017.~~2019.

~~The Company assesses~~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 September 30, ~~2017~~2019 and December 31, ~~2016~~2018 by approximately ~~$50.2~~$28.2 million and ~~$69.6~~$35.4 million, respectively.

~~The Company is~~We are exposed to the impact of foreign currency fluctuations ~~in certain countries in which it operates.~~based on our global operations. The exposure to foreign currency movements within many countries is limited ~~in many countries~~ because the operating revenues and expenses of ~~its~~our various subsidiaries and business units are substantially in the local currency of the country in which they operate. To the extent that borrowings, sales, purchases, revenues, expenses or other transactions are not in the local currency of the subsidiary, ~~the Company is~~we are exposed to currency risk and may enter into foreign ~~currency~~exchange contracts to hedge the currency risk. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the aggregate notional amount of outstanding foreign currency contracts was approximately ~~$136.7~~$144.4 million and ~~$172.2~~$170.8 million, respectively (see Note ~~17,~~15, Derivatives, to the Condensed Consolidated Financial Statements). Net unrealized (losses) gains from these foreign currency contracts were ~~$0.5~~losses of $2.8 million at September 30, ~~2017~~2019 and ~~$0.2~~gains of $0.6 million at December 31, ~~2016. The Company does~~2018. We do not use derivative financial instruments for trading or speculative purposes.

For a discussion of certain litigation, ~~involving the Company,~~ see Note ~~14,~~13, Commitments and Contingencies, to the Condensed Consolidated Financial Statements.

Recently issued accounting standards and their estimated effect on ~~the Company’s~~our consolidated financial statements are described in Note ~~19,~~18, New Accounting Pronouncements, to the Condensed Consolidated Financial Statements.

~~The Company has made forward-looking statements in this~~This Quarterly Report on Form 10-Q ~~that~~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. These statements~~uncertainties and are based on ~~the~~our beliefs and ~~assumptions of the Company.~~assumptions. Generally, forward-looking statements include information concerning possible or assumed future actions, events, or results of operations of ~~the Company.~~

ours. 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. ~~The Company claims~~We claim the protection of the ~~Safe Harbor~~safe harbor for ~~Forward-Looking Statements~~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 Quarterly Report on Form 10-Q and under the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, could affect ~~the~~our future results ~~of the Company~~ 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. 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 Quarterly Report on Form 10-Q should consider these forward-looking statements only as ~~the Company’s~~our current plans, estimates and beliefs. ~~The Company does~~We do not undertake and specifically ~~declines~~disclaims any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. ~~The Company undertakes~~We undertake no obligation to update or revise any forward-looking statements in this Quarterly Report on Form 10-Q to reflect any new events or any change in conditions or circumstances.

See Item 2 of Part I under “Management of Market Risk.” There have been no significant changes to ~~the Company’s~~our market risk since December 31, ~~2016.~~2018. For a discussion of exposure to market risk, refer to Part II, Item 7A – Quantitative and Qualitative Disclosures about Market Risk, set forth in ~~the Company’s 2016~~our 2018 Form 10-K.

As required by Rule 13a-15(b) and Rule 15d-15(e) of the Securities Exchange Act of 1934, the Company’s 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 September 30, ~~2017,~~2019, 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 the Company’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures as of September 30, ~~2017~~2019 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 our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in ~~the Company’s~~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 September 30, ~~2017~~2019 that had materially affected, or were reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

For a discussion of certain litigation, ~~involving the Company,~~ see Note ~~14,~~13, Commitments and Contingencies, to the Condensed Consolidated Financial Statements.

Each of ~~up to $60.0 million in aggregate, though additional dividends may be allowed subject to certain conditions. For more detail refer to the~~our ABL Credit Agreement and ~~its amendments filed as exhibits~~Term Loan Credit Agreement limit our ability to ~~this Quarterly Report on Form 10-Q.~~

make restricted payments, including dividends and share repurchases, subject to specified exceptions.

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

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)

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

Large Accelerated filer	☒☐	Accelerated filer	☐☒

Non-Accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐

~~Emerging growth company~~	☐		Emerging growth company	☐

		Page
	PART I
~~FINANCIAL INFORMATION~~

Item 1:	~~Condensed Consolidated Financial Statements (unaudited)~~	3

1.	Condensed Consolidated Balance Sheets as of September 30, ~~2017~~2019 and December 31, ~~2016~~2018	3

	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018	4

	Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018	5

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2017~~2019 and ~~2016~~2018	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2:2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3:3.	Quantitative and Qualitative Disclosures About Market Risk	52
		42
Item 4:4.	Controls and Procedures	5242

	PART II

~~OTHER INFORMATION~~

Item 1:1.	Legal Proceedings	53
		43
Item 2:2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
		43
Item 4:4.	Mine Safety Disclosures	53
		43
Item 6:6.	Exhibits	5444

Signatures		5545

	September 30, 2019			December 31, 2018
Land	$	47.8		$	51.0
Buildings		380.7			389.5
Machinery and equipment		1,778.4			1,797.1
		2,206.9			2,237.6
Less: Accumulated depreciation		(1,693.3	)		(1,706.3	)
Total property, plant and equipment-net	$	513.6		$	531.3

	As Reported		Adjustments		As Revised
Three months ended March 31, 2016
Products net sales	$	1,242.7	$	13.1	$	1,229.6
Total net sales		1,645.6		13.1		1,632.5
Products cost of sales		971.9		13.1		958.8
Total cost of sales		1,313.1		13.1		1,300.0
Three months ended June 30, 2016
Products net sales	$	1,231.7	$	16.6	$	1,215.1
Total net sales		1,632.6		16.6		1,616.0
Products cost of sales		985.2		16.6		968.6
Total cost of sales		1,316.2		16.6		1,299.6
Three months ended September 30, 2016
Products net sales	$	1,343.4	$	15.6	$	1,327.8
Total net sales		1,741.2		15.6		1,725.6
Products cost of sales		1,046.3		15.6		1,030.7
Total cost of sales		1,377.0		15.6		1,361.4
Three months ended December 31, 2016
Products net sales	$	1,470.3	$	17.4	$	1,452.9
Total net sales		1,876.3		17.4		1,858.9
Products cost of sales		1,161.0		17.4		1,143.6
Total cost of sales		1,512.6		17.4		1,495.2
Three months ended March 31, 2017
Products net sales	$	1,288.9	$	17.4	$	1,271.5
Total net sales		1,676.3		17.4		1,658.9
Products cost of sales		1,024.3		17.4		1,006.9
Total cost of sales		1,348.5		17.4		1,331.1
Three months ended June 30, 2017
Products net sales	$	1,263.4	$	26.0	$	1,237.4
Total net sales		1,646.0		26.0		1,620.0
Products cost of sales		1,020.7		26.0		994.7
Total cost of sales		1,342.9		26.0		1,316.9

	Three Months Ended			Nine Months Ended
	September 30, 2016			September 30, 2016
Net sales	$	1,122.6		$	3,303.4
Cost of sales		879.1			2,534.7
Operating expenses ^(a)		170.0			592.0
Interest and other expense net^(b)		104.0			139.5
(Loss) earnings before income taxes		(30.5	)		37.2
Income tax (benefit) expense		(1.4	)		21.4
Net (loss) earnings from discontinued operations	$	(29.1	)	$	15.8

	Contract Assets		Contract Liabilities
	Short-Term		Short-Term		Long-Term
Balance at December 31, 2018	$	2.7	$	16.5	$	0.6
Balance at September 30, 2019		3.1		24.9		0.5

			Restructuring		Foreign
	December 31,		and Other		Exchange and			Cash			September 30,
	2018		Charges		Other			Paid			2019
Employee terminations	$	4.8	$	19.5	$	(1.2	)	$	(18.4	)	$	4.7
MEPP withdrawal obligations		44.2		2.2		(0.1	)		(4.8	)		41.5
Other		6.2		13.7		—			(9.6	)		10.3
Total	$	55.2	$	35.4	$	(1.3	)	$	(32.8	)	$	56.5

	RRD
	Stockholders'			Noncontrolling
	Equity			Interest			Total Equity
Balance at December 31, 2016	$	(105.7	)	$	13.5		$	(92.2	)
Net earnings		18.4			0.7			19.1
Other comprehensive (loss) income		(70.8	)		0.4			(70.4	)
Share-based compensation		6.4			—			6.4
Spinoff adjustments		5.9			—			5.9
Issuance of share-based awards, net of withholdings and other		(1.7	)		—			(1.7	)
Cash dividends paid		(29.4	)		—			(29.4	)
Distributions to noncontrolling interests		—			(0.7	)		(0.7	)
Balance at September 30, 2017	$	(176.9	)	$	13.9		$	(163.0	)

	Changes in the Fair Value of Available-for-Sale Securities			Pension and Other Postretirement Benefits Plan Cost			Translation Adjustments			Total
Balance at December 31, 2016	$	119.3		$	(159.5	)	$	(15.5	)	$	(55.7	)
Other comprehensive (loss) income before reclassifications		(48.5	)		—			43.6			(4.9	)
Amounts reclassified from accumulated other comprehensive loss		(70.8	)		2.1			2.8			(65.9	)
Net change in accumulated other comprehensive loss		(119.3	)		2.1			46.4			(70.8	)
Balance at September 30, 2017	$	—		$	(157.4	)	$	30.9		$	(126.5	)

	Pension and OPEB Cost			Translation Adjustments			Other		Total
Balance at December 31, 2018	$	(155.2	)	$	1.4		$	—	$	(153.8	)
Other comprehensive (loss) income before reclassifications		—			(17.1	)		2.1		(15.0	)
Amounts reclassified from accumulated other comprehensive (loss) income		(0.6	)		(4.5	)		—		(5.1	)
Net change in accumulated other comprehensive (loss) income		(0.6	)		(21.6	)		2.1		(20.1	)
Balance at September 30, 2019	$	(155.8	)	$	(20.2	)	$	2.1	$	(173.9	)

	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	26.2		$	73.4
Variable lease cost		9.9			28.6
Short-term lease cost		0.1			2.4
Sublease income		(0.3	)		(0.9	)
Total lease cost	$	35.9		$	103.5

	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows	$	64.8
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	26.6

Year Ended December 31	Operating Leases
2019 (excluding the nine months ended September 30, 2019)	$	21.6
2020		69.0
2021		52.4
2022		34.1
2023		23.8
2024 and thereafter		32.9
Total lease payments		233.8
Less: Amount representing interest		32.9
Present value of lease obligation	$	200.9

Weighted average remaining lease term	4.1 years
Weighted average discount rate		6.6	%

	September 30, 2017		December 31, 2016
Derivatives not designated as hedges
Prepaid expenses and other current assets	$	1.5	$	1.7
Accrued liabilities		1.0		1.5

		Three Months Ended				Nine Months Ended
	Classification of (Gain) Loss Recognized in the	September 30,				September 30,
	Condensed Consolidated Statements of Operations	2017		2016		2017		2016
Derivatives not designated as hedges
Foreign currency contracts	Selling, general and administrative expenses	$	0.5	$	0.8	$	1.1	$	3.4

			Basis of Fair Value Measurement
	Balance as of September 30, 2017		Significant Other Observable Inputs (Level 2)
Assets
Foreign currency contracts	$	1.5	$	1.5
Total assets	$	1.5	$	1.5
Liabilities
Foreign currency contracts		1.0		1.0
Total liabilities	$	1.0	$	1.0

			Basis of Fair Value Measurement
	Balance as of December 31, 2016		Significant Other Observable Inputs (Level 2)
Assets
Foreign currency contracts	$	1.7	$	1.7
Available-for-sale securities	328.7		328.7
Total assets	$	330.4	$	330.4
Liabilities
Foreign currency contracts	1.5		1.5
Total liabilities	$	1.5	$	1.5

	Income from Operations			Operating Margin			Net Earnings (Loss) From Continuing Operations Attributable to RRD Common Stockholders			Net Earnings (Loss) Attributable to RRD Stockholders Per Diluted Share
	(in millions, except margin and per share data)
For the Three Months Ended September 30, 2016	$	84.0			4.9	%	$	22.0		$	0.31
2017 restructuring, impairment and other charges - net		(33.8	)		(1.9	%)		(26.5	)		(0.37	)
2016 restructuring, impairment and other charges - net		10.8			0.6	%		2.2			0.03
OPEB curtailment gains		(19.7	)		(1.1	%)		(12.2	)		(0.17	)
Pension settlement charges		0.3			—			0.3			—
Acquisition-related expenses		0.7			—			0.4			0.01
Loss on disposition of businesses		0.3			—			0.1			—
Loss on debt extinguishments		—			—			(4.3	)		(0.06	)
Net gain on investments		—			—			1.7			0.02
Operations, including the impact of foreign exchange		(6.7	)		(0.4	%)		8.3			0.12
For the Three Months Ended September 30, 2017	$	35.9			2.1	%	$	(8.0	)	$	(0.11	)

	Net Sales for the Three Months Ended
	September 30,
Reporting unit	2017		2016		$ Change			% Change
	(in millions, except percentages)
Commercial and digital print	$	395.9	$	414.9	$	(19.0	)		(4.6	%)
Direct mail		139.5		144.5		(5.0	)		(3.5	%)
Statement printing		90.2		85.9		4.3			5.0	%
Labels		101.2		98.7		2.5			2.5	%
Forms		40.7		46.3		(5.6	)		(12.1	%)
Total Variable Print	$	767.5	$	790.3	$	(22.8	)		(2.9	%)

	Net Sales for the Nine Months Ended
	September 30,
Reporting unit	2017		2016		$ Change			% Change
	(in millions, except percentages)
Commercial and digital print	$	1,178.8	$	1,201.8	$	(23.0	)		(1.9	%)
Direct mail		392.0		395.8		(3.8	)		(1.0	%)
Statement printing		286.1		283.6		2.5			0.9	%
Labels		293.4		293.8		(0.4	)		(0.1	%)
Forms		129.3		136.8		(7.5	)		(5.5	%)
Total Variable Print	$	2,279.6	$	2,311.8	$	(32.2	)		(1.4	%)

	Debt Maturity Schedule
	Total		2017		2018		2019		2020		2021		Thereafter
	(in millions)
Senior notes and debentures and borrowings under the Credit Agreement _(a)	$	2,245.8	$	—	$	—	$	172.2	$	238.4	$	529.1	$	1,306.1
Miscellaneous debt obligations		17.9		17.9	—		—		—		—		—
Total	$	2,263.7	$	17.9	$	—	$	172.2	$	238.4	$	529.1	$	1,306.1

	September 30, 2017		September 30, 2019
Availability	(in millions)		(in millions)
Committed Credit Agreement	$	800.0
ABL Credit Agreement			$	800.0
Availability reduction due to available borrowing base		35.4		99.3
	$	764.6	$	700.7
Usage
Borrowings under the Credit Agreement		350.0
Borrowings under the ABL Credit Agreement			$	223.0
Outstanding letters of credit		29.7		39.1
		379.7	$	262.1
Current availability at September 30, 2017	$	384.9

Current availability at September 30, 2019			$	438.6
Cash and cash equivalents				144.7
Total available liquidity ^(a)			$	583.3

	S&P	Moody's
Long-term corporate credit rating	~~B+, Stable~~B, Neg	~~B1,~~B2, Stable
Senior unsecured debt	B-	B3
Term Loan Credit Agreement	B+	B2
~~Credit Agreement~~	BB	~~Ba1~~B1

ISSUER PURCHASES OF EQUITY SECURITIES	ISSUER PURCHASES OF EQUITY SECURITIES								ISSUER PURCHASES OF EQUITY SECURITIES

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			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
July 1, 2017 - July 30, 2017			102	$	11.97	—	$	—
August 1, 2017 - August 31, 2017		—		—		—	$	—
September 1, 2017 - September 30, 2017			—	—		—	$	—
July 1, 2019 - July 31, 2019											3,906	$	2.06	—	$	—
August 1, 2019 - August 31, 2019										—		—		—	$	—
September 1, 2019 - September 30, 2019											—		—	—	$	—
Total			102	$	11.97	—					3,906	$	2.06	—

~~10.1~~
3.1*		~~Second Amended and Restated Credit Agreement, dated as~~Restatement of ~~September 29, 2017, among~~Certificate of Incorporation of 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 10.1 to the Company’s Current Report on Form 8-K filed October 3, 2017)
~~10.2~~
4.1		~~Employment Offer Letter~~Rights Agreement, dated ~~October 25, 2017~~as of August 28, 2019, between R.R. Donnelley & Sons Company and ~~Michael J. Sharp~~Computershare Trust Company, N.A., as rights agent (incorporated by reference to ~~Exhibit10.1~~Exhibit 4.1 to the Company’s Current Report ~~on Form 8-K~~8-K/A filed ~~October 30, 2017)~~August 29, 2019).
31.1*
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

31.2*		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

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

32.2**		Certification by 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

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

R.R. DONNELLEY & SONS COMPANY

By:		/s/ TERRY D. PETERSON
		Terry D. Peterson
		Executive Vice President and Chief Financial Officer