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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected 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, 33.7 million~~April 28, 2023, 29,428,414 shares of common stock were outstanding.

Donnelley ~~Financi~~alFinancial Solutions, Inc. and ~~Subsidiaries~~subsidiaries (“~~Donnelley Financial”~~DFIN” or the “Company”) has made forward-looking statements in this Quarterly Report on Form 10-Q (the “Quarterly Report”) within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of the Company. Generally, forward-looking statements include information concerning possible or assumed future actions, events, or results of operations of the Company. These statements may include words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “continues,” “believes,” “may,” “will,” “goals” and variations of such words and similar expressions are intended to identify forward-looking statements.

~~Condensed Consolidated~~Forward-looking statements are not guarantees of future performance. These forward-looking statements are subject to a number of important factors, including those factors discussed in detail in Part I, Item 1A. Risk Factors of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 21, 2023 (the “Annual Report”), in addition to those discussed elsewhere in this Quarterly Report, that could cause the Company’s actual results to differ materially from those indicated in any such forward-looking statements. These factors include, but are not limited to:

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.

~~For~~Consequently, readers of the ~~Three~~Quarterly Report should consider these forward-looking statements only as the Company’s current plans, estimates and ~~Nine Months Ended September 30, 2017~~beliefs. Except to the extent required by law, the Company does not undertake and ~~2016~~specifically declines 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 no obligation to update or revise any forward-looking statements in this Quarterly Report to reflect any new events or any change in conditions or circumstances other than to the extent required by law.

~~See Notes to Unaudited Condensed Consolidated and Combined Financial Statements~~

Donnelley Financial Solutions, Inc. and Subsidiaries (“~~Donnelley Financial”~~DFIN”)

Condensed Consolidated ~~and Combined~~ Statements of ~~Comprehensive Income~~Operations

See Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements

Donnelley Financial Solutions, Inc. and Subsidiaries (“~~Donnelley Financial”~~DFIN”)

See Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements

‘Donnelley Financial Solutions, Inc. and Subsidiaries (“~~Donnelley Financial”~~DFIN”)

See ~~Notes to Unaudited Condensed Consolidated and Combined Financial Statements~~

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements

Note 1. Overview, ~~and~~ Basis of Presentation and Significant Accounting Policies

Description of Business

~~Donnelley Financial Solutions, Inc. (the “Company” or “Donnelley Financial” )~~DFIN is a ~~financial communications~~leading global risk and compliance solutions company. The Company provides regulatory filing and deal solutions via its software, technology-enabled services ~~company that supports global~~and print and distribution solutions to public and private companies, mutual funds and other regulated investment firms, to serve its clients’ regulatory and compliance needs. DFIN helps its clients comply with applicable regulations where and how they want to work in a digital world, providing numerous solutions tailored to each client’s precise needs. The prevailing trend is toward clients choosing to utilize the Company’s software solutions, in conjunction with its tech-enabled services, to meet their document and filing needs, while at the same time shifting away from physical print and distribution of documents, except for cases where it is still regulatorily required or requested by investors.

The Company serves its clients’ regulatory and compliance needs throughout their respective life cycles. For its capital markets ~~compliance and transaction needs for its corporate~~ clients, ~~and their advisors (such as law firms and investment bankers) and global investment markets compliance and analytics needs for mutual fund~~the Company offers solutions that allow public companies variable annuity providers and broker/dealers. With proprietary technology such as data storage and workflow collaboration tools, deep subject matter expertise and a global footprint, Donnelley Financial produces, manages, stores, distributes, and translates documents and electronic communications in order to ~~deliver timely financial communications to investors and documents in a manner that complies~~comply with ~~regulatory commissions.~~

~~Donnelley Financial’s Registration Statement on Form 10, as amended, was declared effective by the~~applicable U.S. Securities and Exchange Commission ~~(the “SEC”~~(“SEC”) ~~on September 20, 2016. On October 1, 2016, Donnelley Financial became an independent publicly traded company through~~regulations including filing agent services, digital document creation and online content management tools that support their corporate financial transactions and regulatory reporting; solutions to facilitate clients’ communications with their investors; and virtual data rooms and other deal management solutions. For investment companies, including mutual fund, insurance-investment and alternative investment companies, the ~~distribution by R.R. Donnelley & Sons~~ Company ~~(“RRD”)~~provides solutions for creating, compiling and filing regulatory communications as well as solutions for investors designed to improve the access to and accuracy of ~~approximately 26.2 million shares, or 80.75%,~~their investment information.

Services and Products

The Company separately reports its net sales and related cost of ~~Donnelley Financial common stock to RRD shareholders (the “Separation”). Holders of RRD common stock received one share of Donnelley Financial common stock~~sales for every eight shares of RRD common stock held on September 23, 2016. As part of the Separation, RRD retained approximately 6.2 million shares of Donnelley Financial common stock, or a 19.25% interest in Donnelley Financial. Donnelley Financial’s common stock began regular-way trading under the ticker symbol “DFIN” on the New York Stock Exchange on October 3, 2016. On October 1, 2016, RRD also completed the previously announced separation of LSC Communications, Inc. (“LSC”), its ~~publishing and retail-centric print~~software solutions, tech-enabled services and ~~office products business. On March 28, 2017, RRD completed the sale~~print and distribution offerings. The Company’s software solutions consist of 6.2 million shares of LSC common stock (RRD’s remaining ownership stake in LSC) in an underwritten public offering. As a result, beginning in the quarter ended June 30, 2017, LSC is no longer an affiliate of the Company.

On September 14, 2016, the Company and LSC entered into a Separation and Distribution Agreement with RRD to effect the distribution of the Company’s and LSC’s common stock to RRD’s common stockholders (the “Separation and Distribution Agreement”Venue® Virtual Data Room (“Venue”). This agreement governs the Company’s relationship with RRD and LSC with respect to pre-Separation matters and provides for the allocation of employee benefit, litigation and other liabilities and obligations attributable to periods prior to the Separation. The Separation and Distribution Agreement also includes an agreement that the Company, RRD and LSC will provide each other with appropriate indemnities with respect to liabilities arising out of the businesses being distributed and retained by RRD in the Separation. The Separation and Distribution Agreement also addresses employee compensation and benefit matters.

In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company, ActiveDisclosure®, eBrevia and the ~~Company agrees to provide certain~~Arc Suite® software platform ("Arc Suite"), among others. The Company’s tech-enabled services ~~to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll~~offerings consist of document composition, compliance-related SEC Electronic Data Gathering, Analysis, and ~~other financial and administrative~~Retrieval (“EDGAR”) filing services and ~~functions.~~ ~~These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization.~~

At the time of the Separation, the Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition, premedia and access to technology.transaction solutions. The ~~Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will~~Company’s print and ~~bind~~distribution offerings primarily consist of conventional and digital printed products ~~for the Company.~~ and related shipping.

Basis of Presentation

The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company makes available to all of its clients.

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the~~accompanying Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements

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

~~On March 24, 2017, pursuant to~~ include the ~~Stockholder~~accounts of DFIN and ~~Registration Rights Agreement, dated as of September 30, 2016, by~~all majority-owned subsidiaries and between the Company and RRD, the Company filed a Registration Statement on Form S-1 to register the offering and sale of shares of the Company’s common stock retained by RRD. The Registration Statement on Form S-1, as amended, was declared effective by the SEC on June 13, 2017. On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. Upon the consummation of the offering, RRD retained approximately 0.1 million shares of the Company’s common stock which were subsequently sold by RRD on August 1, 2017. In conjunction with the underwritten public offering, the underwriters exercised their option to purchase approximately 0.9 million of the Company’s shares (the “Option Shares”). The Company received approximately $18.8 million in net proceeds from the sale of the Option Shares, after deducting estimated underwriting discounts and commissions. ~~The proceeds were used to reduce outstanding debt under the Revolving Facility (as defined in Note 11,~~ ~~Debt). Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore amounts disclosed related to RRD are presented through June 30, 2017 only.~~

~~Basis of Presentation~~

The accompanying unaudited condensed consolidated and combined financial statements reflect the consolidated financial position and consolidated results of operations of the Company as an independent, publicly traded company for the periods after the Separation and the combined financial position and combined results of operations for the periods prior to the Separation. Prior to the Separation, the combined financial statements were prepared on a stand-alone basis and were derived from RRD’s consolidated financial statements and accounting records.

~~The unaudited condensed consolidated and combined financial statements~~ have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The financial data presented herein should be read in conjunction with the audited ~~consolidated and combined financial statements~~Consolidated Financial Statements and accompanying notes included in the ~~Company’s~~Company's latest Annual ~~Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 28, 2017.~~Report. In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results of interim periods should not be considered indicative of the results for the full year. ~~These unaudited condensed consolidated and combined interim~~

Significant Accounting Policies

Use of Estimates—The preparation of financial statements ~~include~~in conformity with GAAP requires the extensive use of management’s estimates and assumptions ~~of management~~ that affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities as of the date of the financial statements and the reported inamounts of revenue and expenses during the ~~unaudited condensed consolidated and combined financial statements.~~reporting periods. Actual results could differ from these estimates.

~~For periods prior to the Separation, the unaudited condensed consolidated~~ The Company’s significant accounting policies and combined financial statements include the allocation of certain assets and liabilities that were historically held at the RRD corporate level but which were specifically identifiable or attributable to the Company. Cash and cash equivalents held by RRD were not allocated to Donnelley Financial unless they were held in a legal entity that was transferred to Donnelley Financial. All intercompany transactions and accounts within Donnelley Financial have been eliminated. All intracompany transactions between RRD and Donnelley Financialcritical accounting estimates are ~~considered to be effectively settled~~disclosed in the unaudited condensed consolidated and combined financial statements at the time the transaction is recorded. The total net effect of the settlement of these intracompany transactions is reflected in the unaudited condensed consolidated and combined statements of cash flows as a financing activity and in the unaudited condensed consolidated and combined balance sheets as net parent company investment. Net parent company investment is primarily impacted by contributions from RRD which are the result of treasury activities and net funding provided by or distributed to RRD. Annual Report.

Prior to the Separation, the unaudited condensed consolidated and combined financial statements include certain expenses of RRD which were allocated to Donnelley Financial for certain functions, including general corporate expenses related to information technology, finance, legal, human resources, internal audit, treasury, tax, investor relations and executive oversight. These expenses were allocated to the Company on the basis of direct usage, when available, with the remainder allocated on the pro rata basis of revenue, employee headcount, or other measures. We consider the expense methodology and results to be reasonable for all periods presented. However these allocations may not be indicative of the actual expenses that would have been incurred as an independent public company or the costs that may be incurred in the future.

For periods prior to the Separation, the income tax amounts in the unaudited condensed consolidated and combined financial statements were calculated based on a separate income tax return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions.

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

~~RRD maintained various benefit and share-based compensation plans at a corporate level. Donnelley Financial employees participated in those programs and a portion of~~Allowances for Expected Losses—Transactions affecting the cost of those plans is included in Donnelley Financial’s condensed consolidated and combined financial statements for periods prior to the Separation. On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. The pension plan asset allocation from RRD was finalized on June 30, 2017, which resulted in a $0.7 million decrease to the fair value of plan assets transferred to the Company from RRD. The Company also recorded a net other postretirement benefit liability of $1.5 million, as a result of the transfer of an other postretirement benefit plan from RRD to the Company. Refer to Note 6, ~~Retirement Plans, for further details regarding the Company’s pension and other postretirement benefit plans.~~

Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Included in the unaudited condensed combined financial statements are net revenues from sales to RRD and affiliates of $1.1 million and $3.6 million forcurrent expected credit loss (“CECL”)reserve during the three months ended March 31, 2023 and ~~nine months ended September 30, 2016, respectively. Donnelley Financial utilizes RRD~~2022 were as follows:


	March 31,
	2023			2022
Balance, beginning of year (a)	$	17.1		$	12.7
Provisions charged to expense		3.6			2.3
Write-offs, reclassifications and other		(2.6	)		(0.5	)
Balance, end of period (a)	$	18.1		$	14.5

(a)

As of March 31, 2023, the CECL reserve balance is comprised of a $17.2 million provision for ~~freight~~accounts receivable and logistics, production of certain printed products and outsourced business services functions. Included in the unaudited condensed combined financial statements are cost of sales to RRD and affiliates of $20.2a $0.9 million ~~and $78.0 million~~provision for ~~the three and nine months ended September 30, 2016, respectively. Intercompany~~unbilled receivables and ~~payables with RRD are reflected within net parent company investment in~~contract assets. As of December 31, 2022, the ~~accompanying unaudited condensed combined financial statements~~CECL reserve balance was comprised of a $16.5 million provision for ~~periods prior to the Separation. See Note 13,~~ ~~Related Parties,~~accounts receivable and a $0.6 million provision for ~~a further description~~unbilled receivables and contract assets.

Assets Held for Sale—As of ~~related party transactions.~~

~~Note 2. Inventories~~

~~The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at September 30, 2017~~March 31, 2023 and December 31, ~~2016 were as follows:~~ 2022, the Company had land held for sale with a carrying value of $2.6 million. On August 30, 2022, the Company entered into an agreement to sell the land for $13.0 million. The closing of this transaction is subject to a due diligence period, a period to obtain needed entitlements and customary closing conditions and there is no assurance that the sale will be completed.

September 30, 2017

December 31, 2016

Raw materials and manufacturing supplies
$
6.4

$
7.6

Work in process

11.4

10.8

Finished goods

5.8

5.7

Total
$
23.6

$
24.1

~~Note 3.~~ Property, Plant and Equipment,

net—The components of the Company’s property, plant and equipment, net at ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022 were as follows:

September 30, 2017

December 31, 2016

Land
$
10.0

$
10.0

Buildings

43.7

44.4

Machinery and equipment

104.4

109.2

158.1

163.6

Less: Accumulated depreciation

(123.4
)

(128.1
)
Total
$
34.7

$
35.5


	March 31, 2023			December 31, 2022
Land	$	0.3		$	0.3
Buildings		20.2			20.2
Machinery and equipment		68.5			66.8
		89.0			87.3
Less: Accumulated depreciation		(70.8	)		(69.7	)
Total	$	18.2		$	17.6

Depreciation expense was ~~$1.9~~$1.9 million and ~~$1.4~~$1.6 million for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016, respectively, and $5.0~~2022, respectively.

Software, net—Capitalized software development costs are amortized over their estimated useful life using the straight-line method, up to a maximum of three years. Amortization expense related to internally-developed software, excluding amortization expense related to other intangible assets, was $10.3 million and ~~$6.1~~$8.9 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively.

~~Note 4. Goodwill~~Investments—The carrying value of the Company’s investments in equity securities was $6.3 million and ~~Other Intangible Assets~~

$8.5 million at March 31, 2023 and December 31, 2022, respectively. The Company measures its equity securities that do not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in ~~the carrying amount of goodwill by segment~~orderly transactions for the ~~nine~~identical or a similar investment of the same issuer. The Company performs an assessment on a quarterly basis to determine whether triggering events for impairment exist and to identify any observable price changes. During the three months ended ~~September 30, 2017~~March 31, 2023, there were no events or changes in circumstances that suggested an impairment or an observable price change.

During the three months ended March 31, 2023, the Company sold an investment in an equity security and received proceeds of $11.8 million, including $8.9 million of cash and common stock of the acquiror. The sale resulted in a net realized gain of $6.7 million, which is included in investment and other income, net, on the Unaudited Condensed Consolidated Statements of Operations within Corporate.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, as ~~follows:~~if it had originated the contracts, rather than at fair value. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company adopted the standard prospectively on January 1, 2023. The adoption of this standard did not have a material impact on the Company's Unaudited Condensed Consolidated Financial Statements.

U.S.

International

Total

Net book value as of December 31, 2016
$
429.2

$
17.2

$
446.4

Foreign exchange and other adjustments

—

1.1

1.1

Net book value as of September 30, 2017
$
429.2

$
18.3

$
447.5

910

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Note 2. Revenue

Revenue Recognition

The Company manages highly-customized data and materials to enable filings with the SEC on behalf of its customers as well as performs eXtensible Business Reporting Language (“XBRL”) and other services. Clients are provided with EDGAR filing services, XBRL compliance services and translation, editing, interpreting, proof-reading and multilingual typesetting services, among other services. The Company provides software solutions to public and private companies, mutual funds and other regulated investment firms to serve their regulatory and compliance needs, including Venue, Arc Suite, ActiveDisclosure, among others, and provides digital document creation, online content management and print and distribution solutions.

Revenue is recognized upon transfer of control of promised services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The Company’s services include software solutions and tech-enabled services whereas the Company’s products are comprised of print and distribution offerings. The Company’s arrangements with customers often include promises to transfer multiple services or products to a customer. Determining whether services and products are considered distinct performance obligations that should be accounted for separately requires significant judgment. Certain customer arrangements have multiple performance obligations as certain promises are both capable of being distinct and are distinct within the context of the contract. Other customer arrangements have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts, and therefore is not distinct. Revenue for the Company’s tech-enabled services, software solutions and print and distribution offerings is recognized either over time or at a point in time, as further disclosed in the Annual Report.

Disaggregation of Revenue

The following table disaggregates revenue between tech-enabled services, software solutions and print and distribution by reportable segment:


	Three Months Ended March 31,
	2023								2022
	Tech-enabled Services		Software Solutions		Print and Distribution		Total		Tech-enabled Services		Software Solutions		Print and Distribution		Total
Capital Markets - Software Solutions	$	—	$	43.7	$	—	$	43.7	$	—	$	44.7	$	—	$	44.7
Capital Markets - Compliance and Communications Management		60.7		—		33.4		94.1		71.1		—		32.5		103.6
Investment Companies - Software Solutions		—		26.4		—		26.4		—		25.1		—		25.1
Investment Companies - Compliance and Communications Management		17.7		—		16.7		34.4		20.6		—		17.0		37.6
Total net sales	$	78.4	$	70.1	$	50.1	$	198.6	$	91.7	$	69.8	$	49.5	$	211.0

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Unbilled Receivables and Contract Balances

The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract assets, unbilled receivables or contract liabilities. Contract assets represent revenue recognized for performance obligations completed before an unconditional right to payment exists and therefore invoicing has not yet occurred. The Company generally estimates contract assets based on the historical selling price adjusted for its current experience and expected resolution of the variable consideration of the completed performance obligation. When the Company's contracts contain variable consideration, the variable consideration is recognized only to the extent that it is probable that a significant revenue reversal will not occur in a future period. As a result, the estimated revenue and contract assets may be constrained until the uncertainty associated with the variable consideration is resolved, which generally occurs in less than one year. Determining whether there will be a significant revenue reversal in the future and the determination of the amount of the constraint requires significant judgment.

Contract assets were $38.9 million and $20.1 million at March 31, 2023 and December 31, 2022, respectively. Generally, the contract assets balance is impacted by the recognition of additional revenue, amounts invoiced to customers and changes in the level of constraint applied to variable consideration. Amounts recognized as revenue exceeded the estimates for performance obligations satisfied in previous periods by approximately $11.7 million and $3.2 million for the three months ended March 31, 2023 and 2022, respectively, primarily due to changes in the Company’s estimate of variable consideration and the application of the constraint.

Unbilled receivables are recorded when there is an unconditional right to payment and invoicing has not yet occurred. The Company estimates the value of unbilled receivables based on a combination of historical customer selling price and management’s assessment of realizable selling price. Unbilled receivables were $52.2 million and $33.2 million at March 31, 2023 and December 31, 2022, respectively. Unbilled receivables and contract assets are included in receivables, less allowances for expected losses on the Unaudited Condensed Consolidated Balance Sheets.

Most of the Company's contracts with significant remaining performance obligations have an initial expected duration of one year or less. As of March 31, 2023, the future estimated revenue related to unsatisfied or partially satisfied performance obligations under contracts with an original contractual term in excess of one year was approximately $120.1 million, of which approximately 46% is expected to be recognized as revenue over the succeeding twelve months, and the remainder recognized thereafter.

Contract liabilities consist of deferred revenue and progress billings which are included in accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets. The Company recognized $17.7 million and $16.1 million of revenue during the three months ended March 31, 2023 and 2022, respectively, that was included in the deferred revenue balances at the beginning of the respective periods. Changes in contract liabilities were as follows:


Balance at January 1, 2023	$	46.1
Deferral of revenue		41.5
Revenue recognized		(34.6	)
Balance at March 31, 2023	$	53.0


Balance at January 1, 2022	$	36.0
Deferral of revenue		34.2
Revenue recognized		(27.9	)
Balance at March 31, 2022	$	42.3

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Note 3. Goodwill and Other Intangible Assets, net

Goodwill—The goodwill balances by reportable segment were as follows:


	Gross book value at December 31, 2022		Accumulated impairment charges at December 31, 2022			Net book value at December 31, 2022		Foreign exchange and other adjustments		Net book value at March 31, 2023
Capital Markets - Software Solutions	$	100.1	$	—		$	100.1	$	—	$	100.1
Capital Markets - Compliance and Communications Management		252.7		—			252.7		—		252.7
Investment Companies - Software Solutions		53.0		—			53.0		—		53.0
Investment Companies - Compliance and Communications Management		40.6		(40.6	)		—		—		—
Total	$	446.4	$	(40.6	)	$	405.8	$	—	$	405.8

Other Intangible Assets, net—The components of other intangible assets at ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022 were as follows:

September 30, 2017

December 31, 2016

Gross

Gross

Carrying

Accumulated

Net Book

Carrying

Accumulated

Net Book

Amount

Amortization

Value

Amount

Amortization

Value

Customer relationships
$
140.6

$
(97.1
)

$
43.5

$
138.8

$
(85.3
)

$
53.5

Trade names

6.3

(5.6
)

0.7

6.3

(5.5
)

0.8

Trademarks, licenses and agreements

3.2

(3.2
)

—

3.2

(3.2
)

—

Total other intangible assets
$
150.1

$
(105.9
)

$
44.2

$
148.3

$
(94.0
)

$
54.3


	March 31, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value
Customer relationships (useful life of 15 years)	$	10.4	$	(3.0	)	$	7.4	$	10.4	$	(2.8	)	$	7.6
Trade names (useful life of 5 years)		1.0		(0.8	)		0.2		1.0		(0.8	)		0.2
Total other intangible assets	$	11.4	$	(3.8	)	$	7.6	$	11.4	$	(3.6	)	$	7.8

~~Amortization expense~~The weighted-average remaining useful life for ~~other~~the unamortized intangible assets was $3.6 million and $3.6 million for the three months ended September 30, 2017 and 2016, respectively, and $10.7 million and $10.8 million for the nine months ended September 30, 2017 and 2016, respectively.

as of March 31, 2023 is approximately eleven years. The following table outlines the estimated annual amortization expense related to other intangible ~~assets as~~assets:


For the year ending December 31,	Amount
2023 (excluding the three months ended March 31, 2023)	$	0.7
2024		0.7
2025		0.7
2026		0.7
2027		0.7
2028 and thereafter		4.1
Total	$	7.6

Note 4. Leases

The Company has operating leases for certain service centers, office space, warehouses and equipment. The Company made payments of ~~September 30, 2017:~~

For the year ending December 31,
Amount

2017
$
14.3

2018

13.9

2019

13.9

2020

12.5

2021

0.1

2022 and thereafter

0.2

Total
$
54.9

~~Note 5. Restructuring, Impairment~~$4.5 million and ~~Other Charges~~

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

~~For~~$5.5 million for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively, related to its operating lease liabilities.

The Company has finance leases primarily related to certain IT equipment. The Company made payments of $0.6 million and $0.4 million for the ~~Company recorded the following net restructuring, impairment~~three months ended March 31, 2023 and ~~other charges:~~2022, respectively, related to its finance lease liabilities.

Three Months Ended

Employee

Other
Restructuring

Total
Restructuring

September 30, 2017

Terminations

Charges

Charges

Total

U.S.

$
0.2

$
(1.0
)

$
(0.8
)

$
(0.8
)
International

0.1

—

0.1

0.1

Corporate

0.1

—

0.1

0.1

Total

$
0.4

$
(1.0
)

$
(0.6
)

$
(0.6
)

Three Months Ended

Employee

Other
Restructuring

Total
Restructuring

September 30, 2016

Terminations

Charges

Charges

Total

U.S.

$
1.0

$
0.4

$
1.4

$
1.4

International

0.3

—

0.3

0.3

Corporate

—

—

—

—

Total

$
1.3

$
0.4

$
1.7

$
1.7

1013

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

The components of lease expense were as follows:


	Three Months Ended March 31,
	2023			2022
Operating lease expense:
Operating lease expense	$	3.9		$	4.5
Sublease income		(1.1	)		(1.1	)
Net operating lease expense	$	2.8		$	3.4

Finance lease expense:
Amortization of ROU assets	$	0.6		$	0.4
Interest on lease liabilities		0.1			0.1
Total finance lease expense	$	0.7		$	0.5

The Company’s finance leases are presented on the Company’s Unaudited Condensed Consolidated Balance Sheets as follows:


	March 31, 2023		December 31, 2022
Property, plant and equipment, net	$	8.9	$	7.1

Accrued liabilities	$	2.5	$	2.0
Other noncurrent liabilities		6.6		5.1
Total	$	9.1	$	7.1

Other information related to finance leases as of and for the three months ended March 31, 2023 were as follows:


	March 31, 2023
Non-cash disclosure:
Increase in finance lease liabilities due to new ROU assets	$	2.5
Weighted-average remaining lease term	3.7 years
Weighted-average discount rate		3.4	%

Note 5. Restructuring, Impairment and Other Charges, net

Restructuring, Impairment and Other Charges, net recognized in Results of Operations

The Company records restructuring charges associated with management-approved restructuring plans, which could include the elimination of job functions, closure or relocation of facilities, reorganization of operations, changes in management structure, workforce reductions or other actions. Restructuring charges may include ongoing and enhanced termination benefits related to employee separations, contract termination costs and other related costs associated with exit or disposal activities.

For the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, the Company recorded the following ~~net~~ restructuring, impairment and other ~~charges:~~charges, net by reportable segment:


	Employee Terminations			Other Charges		Total
Three Months Ended March 31, 2023
Capital Markets - Software Solutions	$	2.0		$	—	$	2.0
Capital Markets - Compliance and Communications Management		8.2			0.1		8.3
Investment Companies - Software Solutions		(0.1	)		—		(0.1	)
Investment Companies - Compliance and Communications Management		0.2			—		0.2
Corporate		0.5			—		0.5
Total	$	10.8		$	0.1	$	10.9

Nine Months Ended

Employee

Other
Restructuring

Total
Restructuring

Other

September 30, 2017

Terminations

Charges

Charges

Impairment

Charges

Total

U.S.

$
3.2

$
0.9

$
4.1

$
0.2

$
0.1

$
4.4

International

1.3

—

1.3

—

—

1.3

Corporate

0.7

—

0.7

—

—

0.7

Total

$
5.2

$
0.9

$
6.1

$
0.2

$
0.1

$
6.4

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)


	Employee Terminations		Other Charges		Total
Three Months Ended March 31, 2022
Capital Markets - Software Solutions	$	0.8	$	—	$	0.8
Capital Markets - Compliance and Communications Management		0.3		0.1		0.4
Investment Companies - Software Solutions		0.1		—		0.1
Investment Companies - Compliance and Communications Management		0.4		—		0.4
Corporate		—		0.1		0.1
Total	$	1.6	$	0.2	$	1.8

Nine Months Ended

Employee

Other
Restructuring

Total
Restructuring

Other

September 30, 2016

Terminations

Charges

Charges

Impairment

Charges

Total

U.S.

$
1.8

$
1.2

$
3.0

$
—

$
0.1

$
3.1

International

0.5

—

0.5

—

—

0.5

Corporate

—

—

—

—

—

—

Total

$
2.3

$
1.2

$
3.5

$
—

$
0.1

$
3.6

~~Restructuring and Impairment Charges~~

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2023, the Company recorded net restructuring charges of ~~$0.4~~$10.8 million ~~and $5.2 million, respectively, for~~related to employee termination costs for ~~169~~approximately 150 employees, substantially all of whom will be terminated by December 31, 2023. The restructuring actions were primarily related to reorganization of certain capital markets operations.

For the three months ended March 31, 2022, the Company recorded net restructuring charges of $1.6 million related to employee termination costs for approximately 60 employees, substantially all of whom were terminated as of ~~September 30, 2017. These charges~~December 31, 2022. The restructuring actions were primarily related to the reorganization of certain capital markets operations and ~~certain administrative functions. Additionally,~~ the ~~Company recognized~~relocation of a ~~net reversal of $1.0 million of other restructuring charges~~digital print facility.

Restructuring Reserve – Employee Terminations

The Company’s employee terminations liability is included in accrued liabilities on the Company’s Unaudited Condensed Consolidated Balance Sheets. Changes in the accrual for employee terminations during the three months ended September 30, 2017 primarily due to the reversal of previously recognized lease termination costs associated with a facility that the Company began using during the third quarter of 2017. The Company incurred net lease termination and other restructuring charges of $0.9 million for the nine months ended September 30, 2017. For the nine months ended September 30, 2017, the Company also recorded $0.2 million of net impairment charges primarily related to leasehold improvements associated with facility closures. The nine months ended September 30, 2017 includes $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate.

For the three and nine months ended September 30, 2016, the Company recorded net restructuring charges of $1.3 million and $2.3 million, respectively, for employee termination costs for 22 employees. These charges primarily related to the reorganization of certain administrative functions. Additionally, the Company incurred lease termination and other restructuring charges of $0.4 million and $1.2 million, respectively, for the three and nine months ended September 30, 2016. The nine months ended September 30, 2016, includes $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate.

~~Restructuring Reserve~~

~~The restructuring reserve as of December~~March 31, ~~2016 and September 30, 2017, and changes during the nine months ended September 30, 2017,~~2023 were as follows:


	Employee Terminations
Balance at December 31, 2022	$	5.1
Restructuring charges		10.9
Reversals of restructuring charges		(0.1	)
Cash paid		(2.6	)
Balance at March 31, 2023	$	13.3

Foreign

December 31,

Restructuring

Exchange and

Cash

September 30,

2016

Charges

Other

Paid

2017

Employee terminations
$
1.6

$
5.2

$
0.1

$
(5.3
)

$
1.6

Lease terminations and other

3.8

0.9

0.2

(1.5
)

3.4

Total
$
5.4

$
6.1

$
0.3

$
(6.8
)

$
5.0

The current portion of restructuring reserves of $3.2 million at September 30, 2017 was included in accrued liabilities, while the long-term portion of $1.8 million, primarily related to lease termination costs, was included in other noncurrent liabilities at September 30, 2017.

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~The Company anticipates that payments associated with the employee terminations reflected in the above table will be substantially completed by March 31, 2018.~~

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 2026. 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.

Note 6. Retirement Plans

~~Donnelley Financial’s Participation in RRD’s Pension and Postretirement Benefit Plans~~

RRD provided pension and other postretirement healthcare benefits to certain current and former employees of Donnelley Financial. Prior to the Separation, RRD was responsible for the net benefit plan obligations associated with these plans, and as such, these liabilities are not reflected in Donnelley Financial’s unaudited condensed consolidated and combined balance sheets.

Donnelley Financial’s unaudited condensed consolidated and combined statements of operations include expense allocations for these benefits. These allocations were funded through intercompany transactions with RRD which are reflected within net parent company investment in Donnelley Financial. Total RRD pension and postretirement benefit plan net income allocated to Donnelley Financial, related to pension cost and postretirement benefits, was $1.3 million and $4.2 million in the three and nine months ended September 30, 2016, respectively. Included in these amounts is an allocation for other postretirement benefit plans for $0.3 million and $1.0 million in the three and nine months ended September 30, 2016, respectively. These allocations are reflected in the Company’s cost of sales and selling, general and administrative expenses.

~~Donnelley Financial’s Pension and Postretirement Benefit Plans~~

On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. The pension plan asset allocation from RRD was finalized on June 30, 2017, which resulted in a $0.7 million decrease to the fair value of plan assets transferred to the Company from RRD. The Company also recorded a net other postretirement benefit liability of $1.5 million, as a result of the transfer of an other postretirement benefit plan from RRD to the Company.

The components of ~~the~~ estimated net pension plan income for ~~Donnelley Financial’s pension plans for~~ the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022 were as follows:


	Three Months Ended March 31,
	2023			2022
Interest cost	$	2.9		$	1.8
Expected return on assets		(3.3	)		(2.8	)
Amortization, net		0.2			0.8
Net pension plan income	$	(0.2	)	$	(0.2	)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Pension expense (income)

Interest cost
$
2.6

$
—

$
7.9

$
—

Expected return on assets

(4.0
)

—

(12.0
)

—

Amortization, net

0.6

(0.2
)

1.6

(0.4
)
Net pension income
$
(0.8
)

$
(0.2
)

$
(2.5
)

$
(0.4
)

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

Note 7. ~~Equity~~

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

Total

Equity

Balance at December 31, 2016
$
111.1

Net earnings

33.4

Other comprehensive income

5.6

Separation-related adjustments

0.2

Share-based compensation

5.2

Issuance of common stock

18.8

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

(0.7
)
Balance at September 30, 2017
$
173.6

Separation-related adjustments primarily relate to adjustments arising from the finalization of tax returns for periods prior to the Separation as well as settlement of balances due to or from RRD for activity prior to the Separation.

On June 21, 2017, the Company issued stock in conjunction with the underwritten public offering of the sale of the Company’s shares retained by RRD. The underwriters exercised their option to purchase approximately 0.9 million Option Shares. The Company received approximately $18.8 million in net proceeds from the sale of the Option Shares, after deducting estimated underwriting discounts and commissions. Refer to Note 1, ~~Overview and Basis of Presentation,~~ ~~for further details.~~

~~The Company’s equity as of December 31, 2015 and September 30, 2016, and changes during the nine months ended September 30, 2016, were as follows:~~

Accumulated

Net Parent

Other

Company

Comprehensive

Total

Investment

Loss

Equity

Balance at December 31, 2015
$
639.5

$
(16.0
)

$
623.5

Net earnings

59.9

—

59.9

Transfers from parent company, net

(598.6
)

—

(598.6
)
Other comprehensive income

—

3.8

3.8

Balance at September 30, 2016
$
100.8

$
(12.2
)

$
88.6

~~Note 8. Earnings per Share~~

Basic earnings per share is calculated by dividing net earnings 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 restricted stock units and restricted stock.

On October 1, 2016, RRD distributed approximately 26.2 million shares of Donnelley Financial common stock to RRD shareholders in connection with the spin-off of Donnelley Financial, with RRD retaining approximately 6.2 million shares of Donnelley Financial common stock. Holders of RRD common stock received one share of Donnelley Financial for every eight shares of RRD common stock held on September 23, 2016. Basic and diluted earnings per common share and the average number of common shares outstanding were retrospectively restated for the number of Donnelley Financial shares outstanding immediately following this transaction. For periods prior to the Separation, basic and diluted earnings per share were calculated using the number of shares distributed and retained by RRD, totaling 32.4 million. The same number of shares was used to calculate basic and diluted earnings per share since there were no Donnelley Financial equity awards outstanding prior to the spin-off.

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. Upon consummation of the offering, RRD retained approximately 0.1 million shares of the Company’s common stock which were subsequently sold by RRD on August 1, 2017. Refer to Note 1, ~~Overview and Basis of Presentation, for further details.~~

As a result of the Company adopting Accounting Standards Update 2016-09 “Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” beginning in the first quarter of 2017, excess tax benefits and tax deficiencies are excluded from the calculation of assumed proceeds when using the treasury stock method in calculating diluted earnings per share.

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, 2017 and 2016 were as follows:

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net earnings per share:

Basic
$
0.16

$
0.31

$
1.01

$
1.85

Diluted
$
0.16

$
0.31

$
1.01

$
1.85

Numerator:

Net earnings
$
5.3

$
10.2

$
33.4

$
59.9

Denominator:

Weighted average number of common shares outstanding

33.6

32.4

33.0

32.4

Dilutive awards

0.2

—

0.2

—

Diluted weighted average number of common shares outstanding

33.8

32.4

33.2

32.4

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

Restricted stock units

—

—

0.2

—

Stock options

0.4

—

0.3

—

Total

0.4

—

0.5

—

~~Note 9. Comprehensive Income~~

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

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2017

Before Tax

Income Tax

Net of Tax

Before Tax

Income Tax

Net of Tax

Amount

Expense

Amount

Amount

Expense

Amount

Translation adjustments
$
2.2

$
—

$
2.2

$
4.6

$
—

$
4.6

Adjustment for net periodic pension plan and other postretirement benefits plan cost

0.6

0.3

0.3

1.6

0.6

1.0

Other comprehensive income
$
2.8

$
0.3

$
2.5

$
6.2

$
0.6

$
5.6

Three Months Ended

Nine Months Ended

September 30, 2016

September 30, 2016

Before Tax

Income Tax

Net of Tax

Before Tax

Income Tax

Net of Tax

Amount

Expense

Amount

Amount

Expense

Amount

Translation adjustments
$
0.2

$
—

$
0.2

$
4.2

$
—

$
4.2

Adjustment for net periodic pension plan and other postretirement benefits plan cost

(0.2
)

—

(0.2
)

(0.4
)

—

(0.4
)
Other comprehensive income
$
—

$
—

$
—

$
3.8

$
—

$
3.8

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~Accumulated other comprehensive loss by component as of December 31, 2016 and September 30, 2017 were as follows:~~

Pension and Other Postretirement Benefits Plan Cost

Translation Adjustments

Total

Balance at December 31, 2016
$
(52.2
)

$
(16.1
)

$
(68.3
)
Other comprehensive income before reclassifications

—

4.6

4.6

Amounts reclassified from accumulated other comprehensive loss

1.0

—

1.0

Net change in accumulated other comprehensive loss

1.0

4.6

5.6

Balance at September 30, 2017
$
(51.2
)

$
(11.5
)

$
(62.7
)

~~Accumulated other comprehensive loss by component as of December 31, 2015 and September 30, 2016 as follows:~~

Pension and Other Postretirement Benefits Plan Cost

Translation Adjustments

Total

Balance at December 31, 2015
$
—

$
(16.0
)

$
(16.0
)
Other comprehensive income before reclassifications

—

4.2

4.2

Amounts reclassified from accumulated other comprehensive loss

(0.4
)

—

(0.4
)
Net change in accumulated other comprehensive loss

(0.4
)

4.2

3.8

Balance at September 30, 2016
$
(0.4
)

$
(11.8
)

$
(12.2
)

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

Three Months Ended

Nine Months Ended

Classification in the Condensed

September 30,

September 30,

Consolidated and Combined

2017

2016

2017

2016

Statements of Operations
Amortization of pension and other postretirement benefits plan cost:

Net actuarial income (loss)
$
0.6

$
(0.2
)

$
1.6

$
(0.4
)
_(a)

Reclassifications before tax

0.6

(0.2
)

1.6

(0.4
)

Income tax expense

0.3

—

0.6

—

Reclassifications, net of tax
$
0.3

$
(0.2
)

$
1.0

$
(0.4
)

~~(a)~~

These accumulated other comprehensive loss components are included in the calculation of net periodic pension and other postretirement benefits plan (income) expense, a component of which was allocated to Donnelley Financial in periods prior to the Separation, and recognized in cost of sales and selling, general and administrative expenses in the unaudited condensed consolidated and combined statements of operations (see Note 6, ~~Retirement Plans~~).

~~Note 10. Segment Information~~

~~The Company’s segments are summarized below:~~

~~United States~~

The U.S. segment serves capital market and investment market clients in the U.S. by delivering products and services to help create, manage, and deliver, accurate and timely financial communications to investors and regulators. The Company also provides virtual data rooms to facilitate the deal management requirements of capital markets and mergers and acquisitions transactions, and provides data and analytics services that help professionals uncover intelligence from disclosures contained within public filings made with the SEC. The U.S. segment also includes language solutions capabilities, through which the Company can translate documents and create content in up to 190 different languages for its clients, and commercial print.

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~International~~

The International segment includes the Company’s operations in Asia, Europe, Canada and Latin America. The international business is primarily focused on working with international capital markets clients on capital markets offerings and regulatory compliance related activities into or within the United States. In addition, the international segment provides language translation services and shareholder communication services to investment market clients.

~~Corporate~~

Corporate consists of unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, communications and certain facility costs. In addition, certain costs and earnings of employee benefit plans, such as pension and other postretirement benefit plan expense (income) and allocated costs for share-based compensation, are included in Corporate and not allocated to the operating segments.

~~Information by Segment~~

The Company has disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Company’s chief operating decision-maker and is most consistent with the presentation of profitability reported within the consolidated and combined financial statements.

Income (Loss)

Depreciation

Total

Intersegment

Net

from

and

Capital

Sales

Sales

Sales

Operations

Amortization

Expenditures

Three Months Ended
September 30, 2017

U.S.
$
188.9

$
(2.8
)

$
186.1

$
22.4

$
9.2

$
7.7

International

37.1

(0.6
)

36.5

1.5

1.4

0.1

Total operating segments

226.0

(3.4
)

222.6

23.9

10.6

7.8

Corporate

—

—

—

(5.9
)

—

0.2

Total operations
$
226.0

$
(3.4
)

$
222.6

$
18.0

$
10.6

$
8.0

Income (Loss)

Depreciation

Total

Intersegment

Net

from

and

Capital

Sales

Sales

Sales

Operations

Amortization

Expenditures

Three Months Ended
September 30, 2016

U.S.
$
193.6

$
(1.3
)

$
192.3

$
18.7

$
8.5

$
1.3

International

33.2

(1.1
)

32.1

1.1

1.1

—

Total operating segments

226.8

(2.4
)

224.4

19.8

9.6

1.3

Corporate

—

—

—

(1.8
)

0.2

0.4

Total operations
$
226.8

$
(2.4
)

$
224.4

$
18.0

$
9.8

$
1.7

Income (Loss)

Depreciation

Total

Intersegment

Net

from

Assets of

and

Capital

Sales

Sales

Sales

Operations

Operations

Amortization

Expenditures

Nine Months Ended
September 30, 2017

U.S.
$
665.8

$
(7.6
)

$
658.2

$
107.5

$
715.3

$
27.5

$
18.1

International

124.8

(2.9
)

121.9

7.6

96.0

4.2

0.8

Total operating segments

790.6

(10.5
)

780.1

115.1

811.3

31.7

18.9

Corporate

—

—

—

(27.0
)

122.4

—

1.1

Total operations
$
790.6

$
(10.5
)

$
780.1

$
88.1

$
933.7

$
31.7

$
20.0

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

Income (Loss)

Depreciation

Total

Intersegment

Net

from

Assets of

and

Capital

Sales

Sales

Sales

Operations

Operations

Amortization

Expenditures

Nine Months Ended
September 30, 2016

U.S.
$
666.4

$
(4.0
)

$
662.4

$
100.0

$
714.2

$
26.2

$
10.2

International

103.9

(3.8
)

100.1

7.2

99.9

3.2

1.2

Total operating segments

770.3

(7.8
)

762.5

107.2

814.1

29.4

11.4

Corporate

—

—

—

(7.7
)

99.9

0.7

2.6

Total operations
$
770.3

$
(7.8
)

$
762.5

$
99.5

$
914.0

$
30.1

$
14.0

~~Note 11. Debt~~

On September 30, 2016, in connection with the Separation, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement provides for (i) a new senior secured term loan B facility in an aggregate principal amount of $350.0 million (the “Term Loan Credit Facility”) and (ii) a new first lien senior secured revolving credit facility in an aggregate principal amount of $300.0 million (the “Revolving Facility”, and, together with the Term Loan Credit Facility, the “Credit Facilities”). The Credit Agreement contains a number of covenants, including a minimum Interest Coverage Ratio and a maximum Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $15.0 million in the aggregate. As of September 30, 2017, there were no outstanding borrowings under the Revolving Facility.

Borrowings under the Term Loan Credit Facility were used to provide $340.2 million of cash to RRD, pursuant to the Separation Agreement, as of September 30, 2016. The remainder of the net proceeds was used for general corporate purposes.

~~Pursuant to the Separation and Distribution~~ A~~greement, the Company received a cash payment of $68.0 million from RRD on April 3, 2017. The proceeds were used to reduce outstanding debt under the Term Loan Credit Facility.~~

On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. Upon the consummation of the offering, RRD retained approximately 0.1 million shares of the Company’s common stock of the offering which were subsequently sold by RRD on August 1, 2017. In conjunction with the underwritten public offering, the underwriters exercised their option to purchase approximately 0.9 million Option Shares. The Company received approximately $18.8 million in net proceeds from the sale of the Option Shares, after deducting estimated underwriting discounts and commissions. ~~The proceeds were used to reduce outstanding debt under the Revolving Facility.~~

On October 2, 2017, the Company repriced the Term Loan Credit Facility. As a result, the interest rate was reduced by 100 basis points to LIBOR plus 3.0% and the LIBOR floor was reduced by 25 basis points to .75%. Additionally, under the amended Credit Agreement, principal payments are due on a quarterly basis. Other terms, including the outstanding principal, maturity date, and debt covenants such as the minimum Interest Coverage Ratio and the maximum Leverage Ratio are consistent with the original Credit Agreement.

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

On September 30, 2016, also in connection with the Separation, the Company issued $300.0 million of 8.25% senior unsecured notes due October 15, 2024 (the “Notes”). Interest on the Notes is payable semi-annually on April 15 and October 15, commencing on April 15, 2017. The issuance of the Notes was part of a debt exchange that resulted in the settlement of certain of RRD's bonds.The Notes were issued pursuant to an indenture where certain wholly-owned domestic subsidiaries of the Company guarantee the Notes (the “Guarantors”). The Notes are jointly and severally guaranteed, on an unsecured basis, by the Guarantors, which are comprised of each of the Company’s existing and future direct and indirect wholly-owned U.S. subsidiaries that guarantee the Company’s obligations under the Credit Facilities. The Notes are not guaranteed by the Company’s foreign subsidiaries or unrestricted subsidiaries. The Notes and the related guarantees will be the Company and the Guarantors’, respective, senior unsecured obligations and will rank equally in right of payment to all present and future senior debt, including the obligations under the Company’s Credit Facilities, senior in right of payment to all present and future subordinated debt, and effectively subordinated in right of payment to any of the Company and the Guarantors’ secured debt, to the extent of the value of the assets securing such debt. The indenture governing the Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and (9) designations of unrestricted subsidiaries. Each of these covenants is subject to important exceptions and qualifications.

In connection with the offering of the Notes, the Company entered into a registration rights agreement, dated as of September 30, 2016 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the SEC with respect to an offer to exchange the Notes for registered notes. In certain circumstances, the Company may be required to file a shelf registration statement with the SEC registering the resale of the Notes by the holders thereof, in lieu of an exchange offer to such holders. On March 10, 2017, the Company filed a Registration Statement on Form S-4 (as amended, the “Exchange Offer Registration Statement”) to offer to exchange the Notes for registered notes which have terms identical in all material respects to the Notes except that the registered notes are not subject to transfer restrictions or registration rights. The Exchange Offer Registration Statement was declared effective by the SEC on March 22, 2017. An exchange offer for the Notes was launched on March 22, 2017 and settled on April 25, 2017, resulting in the exchange of $299.9 million aggregate principal amount of outstanding Notes for registered notes.

~~The Company’s debt as of September 30, 2017 and December 31, 2016 consisted of the following:~~

September 30,

December 31,

2017

2016

8.25% senior notes due October 15, 2024
$
300.0

$
300.0

Term Loan Credit Facility

198.5

298.3

Borrowings under the Revolving Facility

—

—

Unamortized debt issuance costs

(10.1
)

(11.3
)
Total debt

488.4

587.0

Less: current portion

—

—

Long-term debt
$
488.4

$
587.0

The fair value of the senior notes, which was determined using the market approach based upon interest rates available to the Company for borrowings with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. The fair value of the Company’s senior notes was $322.2 million and $307.1 million at September 30, 2017 and December 31, 2016, respectively.

~~The weighted average interest rate on borrowings under the Revolving Facility was 4.4% at September 30, 2017.~~

~~Note 12.~~ Commitments and Contingencies

Litigation

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

1815

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Note ~~13. Related Parties~~8. Debt

The Company’s debt as of March 31, 2023 and December 31, 2022 consisted of the following:


	March 31, 2023			December 31, 2022
Term Loan A Facility	$	125.0		$	125.0
Borrowings under the Revolving Facility		110.5			45.0
Unamortized debt issuance costs		(0.7	)		(0.8	)
Total long-term debt	$	234.8		$	169.2

Credit Agreement—On ~~March 28, 2017, RRD completed~~May 27, 2021 (the “Restatement Effective Date”), the ~~sale~~Company amended and restated its credit agreement dated as of ~~6.2~~September 30, 2016 (as in effect prior to such amendment and restatement, the “Credit Agreement,” and the Credit Agreement, as so amended and restated, the “Amended and Restated Credit Agreement”), by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, to, among other things, provide for a $200.0 million ~~shares~~delayed-draw term loan A facility (the “Term Loan A Facility”) (bearing interest at a rate equal to the sum of ~~LSC common stock (RRD’s remaining ownership stake in LSC) in an underwritten public offering. As~~the London Interbank Offered Rate (“LIBOR”) plus a ~~result, beginning~~margin ranging from 2.00% to 2.50% based upon the Company's Consolidated Net Leverage Ratio), extend the maturity of the $300.0 million revolving credit facility (the “Revolving Facility”) to May 27, 2026 and modify the financial maintenance and negative covenants in the ~~quarter ended June 30, 2017, LSC is no longer an affiliate of the Company.~~

On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock. RRD retained approximately 0.1 million shares of the Company’s common stock which RRD sold on August 1, 2017. Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related partyCredit Agreement. The Amended and ~~the amounts disclosed related to RRD are presented through June 30, 2017 only.~~

~~Transition Services Agreements~~

In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company and the Company agrees to provide certain services to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. ~~These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization.~~

~~Commercial Arrangements~~

~~The Company entered into~~Restated Credit Agreement contains a number of ~~commercial~~covenants, including a minimum Interest Coverage Ratio and ~~other arrangements with RRD~~the Consolidated Net Leverage Ratio, as defined in and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients.

~~Stockholder and Registration Rights Agreement~~

The Company and RRD entered into a Stockholder and Registration Rights Agreement with respect to the Company’s common stock retained by RRD pursuant to which the Company agrees that, upon the request of RRD, the Company will use its reasonable best efforts to effect the registration under applicable federal and state securities laws of the shares of the Company’s common stock retained by RRD after the Separation. In addition, RRD granted the Company a proxy to vote the shares of the Company’s common stock that RRD retained immediately after the Separation in proportion to the votes cast by the Company’s other stockholders. This proxy, however, will be automatically revoked as to a particular share upon any sale or transfer of such share from RRD to a person other than RRD, and neither the voting agreement nor the proxy will limit or prohibit any such sale or transfer.

~~On March 24, 2017,~~calculated pursuant to the ~~Stockholder~~Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and ~~Registration Rights~~consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $20.0 million in the ~~Company filed a Registration Statement on Form S-1 to register the offering and sale~~aggregate.

Term Loan A Facility—The unpaid principal amount of the ~~Company’s common stock retained by RRD. The Registration Statement~~Term Loan A Facility is due and payable in full on ~~Form S-1, as amended, was declared effective by the SEC on June 13, 2017. On June 21, 2017, RRD completed the sale of approximately 6.1 million shares~~May 27, 2026. Voluntary prepayments of the ~~Company’s common stock in an underwritten public offering. Upon consummation~~Term Loan A Facility are permitted at any time without premium or penalty. The weighted-average interest rate on borrowings under the Term Loan A Facility was 6.0% and 2.3% for the three months ended March 31, 2023 and 2022, respectively. The fair value of the ~~offering, RRD retained approximately 0.1~~Term Loan A Facility was $121.3 million ~~shares~~and $121.6 million as of March 31, 2023 and December 31, 2022, respectively, and was determined to be Level 2 under the fair value hierarchy.

Revolving Facility—As of March 31, 2023 and December 31, 2022, there were $110.5 million and $45.0 million, respectively, of borrowings outstanding under the Revolving Facility. The weighted average interest rate on borrowings under the Revolving Facility was 6.9% and 3.7% for the three months ended March 31, 2023 and 2022, respectively. The fair value of the ~~Company’s common stock which were subsequently sold by RRD on August 1, 2017.~~

~~Sublease Agreement~~

In connection with the Separation, the Company assumed an operating lease through 2024 for the Company’s headquarters. There is a related non-cancelable sublease rental to RRD for the same period. The Company remains secondarily liable under this lease in the event that the sub-lessee defaultsCompany's borrowings under the ~~sublease terms.~~ Revolving Facility is classified as Level 2 under the fair value hierarchy and approximated its carrying value as of March 31, 2023 and December 31, 2022, as the Revolving Facility carries a variable rate of interest reflecting current market rates.

The ~~Company does not believe that material payments will be required as a result~~following table summarizes interest expense, net included on the Unaudited Condensed Consolidated Statements of ~~the secondary liability provisions of the primary lease agreement.~~Operations:


	Three Months Ended March 31,
	2023			2022
Interest incurred	$	4.0		$	1.6
Less: Interest income		(0.5	)		(0.1	)
Interest expense, net	$	3.5		$	1.5

1916

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Note 9. Earnings per Share

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 months ended March 31, 2023 and 2022 were as follows:

~~Related Party Receivables/Payables~~


	Three Months Ended March 31,
	2023		2022
Net earnings per share:
Basic	$	0.54	$	0.80
Diluted	$	0.52	$	0.77
Numerator:
Net earnings	$	15.8	$	26.4
Denominator:
Basic weighted average number of common shares outstanding		29.2		32.9
Dilutive awards		1.3		1.5
Diluted weighted average number of common shares outstanding		30.5		34.4

Note 10. Share-based Compensation

~~Pursuant~~The Company’s share-based compensation plan under which it may grant future awards, the Donnelley Financial Solutions, Inc. Amended and Restated 2016 Performance Incentive Plan (as amended, the “2016 PIP”), was approved by the Company's Board of Directors (the “Board”) and the Company’s stockholders and provides incentives to t~~he Separation and Distribution~~ A~~greement,~~key employees of the ~~Company received a cash payment of $68.0 million from RRD on April 3, 2017. The proceeds were used to reduce outstanding debt~~Company. Awards under the ~~Term Loan Credit Facility.~~ 2016 PIP may include cash or stock bonuses, stock options, stock appreciation rights, restricted stock, PSUs, performance cash awards or RSUs. In addition, non-employee members of the Board may receive awards under the 2016 PIP. At March 31, 2023, there were 2.9 million remaining shares of common stock authorized and available for grant under the 2016 PIP. Increases to the shares of common stock available for issuance under the 2016 PIP requires stockholder approval.

The Company ~~has other amounts due to or from RRD in the normal course of business. The Company had $96.0 million of receivables from RRD and $27.1 million of payables to RRD included~~ ~~in the condensed consolidated balance sheet~~ ~~at December 31, 2016.~~

~~Allocations from RRD~~

Prior to the Separation RRD provided Donnelley Financial with certain services, which include, but are not limited to information technology, finance, legal, human resources, internal audit, treasury, tax, investor relations and executive oversight. The financial information in these consolidated and combined financial statements does not necessarily include all the expenses that would have been incurred had Donnelley Financial been a separate, standalone entityrecognizes compensation expense for ~~all periods presented. Prior to the Separation RRD charged Donnelley Financial for these services~~share-based awards based on ~~direct usage when possible. When specific identification was not practicable, the pro rata basis of revenue or employee headcount, or some other measure was used. These allocations were reflected~~estimated grant date fair values as ~~follows~~well as certain assumptions, as further disclosed in ~~the unaudited condensed consolidated and combined financial statements:~~

Three Months Ended

Nine Months Ended

September 30, 2016

September 30, 2016

Costs of goods sold allocation
$
8.3

$
28.0

Selling, general and administrative allocation

38.3

129.4

Depreciation and amortization

5.3

15.2

Total allocations from RRD
$
51.9

$
172.6

~~The Company considers the expense methodology and results to be reasonable for all periods presented. However, these allocations may not be indicative~~Note 12, Share-based Compensation, of the ~~actual expenses that the Company would have incurred as an independent public company or the costs it may incur in the future.~~Annual Report.

~~Related Party Revenues~~

~~Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Net revenues from sales to RRD and affiliates of $1.1~~Total share-based compensation expense was $4.3 million and ~~$3.6~~$3.6 million for the three ~~and nine~~ months ended ~~September 30, 2016, respectively, were included in the unaudited condensed combined statement of operations.~~

~~Related Party Purchases~~

~~Donnelley Financial utilizes RRD for freight~~March 31, 2023 and ~~logistics and services as well as certain production of printed products. Cost of sales of $11.5~~2022, respectively. The income tax benefit related to share-based compensation expense was $4.1 million and ~~$48.6~~$2.8 million for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2023 and 2022, respectively. As of March 31, 2023, $40.9 million of total unrecognized compensation expense related to share-based compensation awards is expected to be recognized over a weighted-average period of 2.0 years.

Stock Options

There were ~~included in the unaudited condensed combined statement of operations for these purchases.~~

~~Donnelley Financial also utilizes RRD’s business process outsourcing business for certain composition, XBRL and other functions. Cost of sales of $8.7 million and $29.4 million for~~no stock options granted during the three ~~and nine~~ months ended ~~September 30, 2016, respectively, were included in the unaudited condensed combined statement~~March 31, 2023. A summary of ~~operations for these purchases.~~

~~For periods prior~~activity and weighted-average exercise prices related to the Separation, intercompany payables with RRD and affiliates for these purchases are reflected within net parent company investment in the unaudited condensed consolidated and combined financial statements.stock options were as follows:


	Shares Under Option (thousands)			Weighted-Average Exercise Price
Outstanding at December 31, 2022		524		$	18.19
Exercised		(61	)		18.93
Outstanding at March 31, 2023		463		$	18.09
Vested and expected to vest at March 31, 2023		463		$	18.09
Vested and exercisable at March 31, 2023		463		$	18.09

~~Share-Based Compensation Prior to Separation~~

~~Prior to the Separation, certain Donnelley Financial employees participated in RRD’s share-based compensation plans, the costs~~ of which have been allocated to Donnelley Financial and recorded in selling, general and administrative expenses in the unaudited condensed combined statement of operations. Share-based compensation costs allocated to the Company were ~~$0.2 million and $1.2 million for the three and nine months ended September 30, 2016, respectively.~~

2017

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Restricted Stock Units

RSUs outstanding as of March 31, 2023 and December 31, 2022, and changes during the three months ended March 31, 2023, were as follows:


	Shares (thousands)			Weighted-Average Grant Date Fair Value
Nonvested at December 31, 2022		989		$	23.91
Granted		296			41.85
Vested		(455	)		18.71
Forfeited		(3	)		29.62
Nonvested at March 31, 2023		827		$	33.16

As of March 31, 2023, $22.6 million of unrecognized share-based compensation expense related to RSUs is expected to be recognized over a weighted-average period of 2.3 years.

Performance Share Units

~~Retirement Plans Prior~~PSUs outstanding as of March 31, 2023 and December 31, 2022, and changes during the three months ended March 31, 2023, were as follows:


	Shares (thousands)			Weighted-Average Grant Date Fair Value
Nonvested at December 31, 2022		903		$	22.31
Granted		412			30.13
Vested		(443	)		8.97
Forfeited		(25	)		8.98
Nonvested at March 31, 2023		847		$	33.47

During the three months ended March 31, 2023, 412 thousand PSUs were granted to ~~Separation~~

~~Prior to the Separation, Donnelley Financial employees participated in pension~~certain executive officers and ~~other postretirement plans sponsored by RRD. These costs are reflected in the Company’s cost~~senior management, 265 thousand of sales and selling, general and administrative expenses in the unaudited condensed consolidated and combined statements of operations. These costs were funded through intercompany transactions with RRD which ~~are reflected within the net parent company investment.~~

On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. The pension plan asset allocation from RRD was finalized on June 30, 2017, which resulted in a $0.7 million decrease to the fair value of plan assets transferred to the Company from RRD. Refer to Note 6~~, Retirement Plans, for further details regarding the Company’s pension and other postretirement benefit plans.~~

~~Centralized Cash Management Prior to Separation~~

RRD used a centralized approach to cash management and financing of operations. Prior to the Separation, the majority of the Company’s foreign subsidiaries were party to RRD’s international cash pooling arrangements to maximize the availability of cash for general operating and investing purposes. As part of RRD’s centralized cash management process, cash balances were swept regularly from the Company’s accounts. Cash transfers to and from RRD’s cash concentration accounts and the resulting balances at the end of each reporting period prior to the Separation are reflected in net parent company investment in the ~~consolidated~~ ~~balance sheet.~~

~~Debt~~

RRD’s third party debt and related interest expense have not been allocated to the Company for any of the periods presented as the Company was not the legal obligor of the debt and the borrowings were not directly related to the ~~Company’s business.~~

~~Note 14. New Accounting Pronouncements~~

~~In March 2017, the Financial Accounting Standards Board (“FASB”)~~2023 performance grant and 147 thousand of which related to additional shares issued Accounting Standards Update No. 2017-07 “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”), which requires an employer to report the service cost component of net periodic benefit cost in the same line item(s) as other employee compensation costs arising from services rendered during the ~~period. The other components~~three months ended March 31, 2023 due to the achievement of net periodic benefit cost will be presented in the income statement separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. ASU 2017-07 must be applied retrospectively and is effective in the first quarter of 2018. Early adoption is permitted; however the Company plans to adopt the standard in the first quarter of 2018. Refer to Note 6, ~~Retirement Plans, for disclosure of pension income~~certain targets for the ~~nine~~year ended December 31, 2022. The total potential payout for 2023 awards granted during the three months ended ~~September 30, 2017~~March 31, 2023 is payable upon the achievement of certain established performance targets and ~~2016which would be reclassified~~ranges from zero to ~~other income upon adoption of the standard.~~530 thousand shares.

~~In January 2017, the FASB~~ ~~issued Accounting Standards Update No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying~~ the Test for Goodwill Impairment” (“ASU 2017-04”), which simplifies the accounting for goodwill impairment. ASU 2017-04 requires entities to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 under the current impairment test). The standard eliminates Step 2 from the current goodwill impairment test, which included determining the implied fair value of goodwill and comparing it with the carrying amount of that goodwill. ASU 2017-04 must be applied prospectively and is effective in the first quarter of 2020. Early adoption is permitted. The Company early adopted the standard in the first quarter of 2017.

~~In February 2016, the FASB~~ issued Accounting Standards Update No. 2016-02 “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to put most leases on 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 and the accounting for sales-type and direct financing leases. The standard 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 evaluating the impact of ASU 2016-02.

2118

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

PSU awards consist of four performance periods, including three annual performance periods and one three-year cumulative performance period.


Year Granted	Performance/ Service Period	Estimated or Actual Attainment	PSUs Outstanding as of March 31, 2023 (Thousands)		Estimated PSU Attainment or Actual PSUs Earned (Thousands)
2023	2023	146% (a)		66		96
2023	2024	(b)		66		—
2023	2025	(b)		66		—
2023	2023-2025	100% (c)		67		67
				265		163

2022	2022	140% (d)		68		95
2022	2023	43% (a)		68		29
2022	2024	(b)		69		—
2022	2022-2024	100% (c)		69		69
				274		193

2021	2021	200% (d)		77		154
2021	2022	87% (d)		77		67
2021	2023	72% (a)		77		56
2021	2021-2023	172% (a)		77		133
				308		410

~~In May 2014,~~

(a)

Amounts represent estimated attainment and estimated PSUs.

(b)

As the ~~FASB issued Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which outlines a single comprehensive model~~performance period has not yet commenced, expense is not being recognized.

(c)

Expense 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. In August 2015, the ~~FASB issued Accounting Standards Update No. 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral~~cumulative performance/service period is recognized at 100% of the ~~Effective Date” (“ASU 2015-14”), which defers~~estimated attainment until the ~~effective~~end of the second service year.

(d)

Amounts represent actual attainment and actual PSUs earned as the performance period is complete.

As of March 31, 2023, $18.3 million of unrecognized share-based compensation expense related to PSUs is expected to be recognized over a weighted-average period of 1.7 years.

Note 11. Capital Stock

The Company has authorized for issuance 65 million shares of $0.01 par value common stock and one million shares of $0.01 par value preferred stock. The Board may divide the preferred stock into one or more series and fix the redemption, dividend, voting, conversion, sinking fund, liquidation and other rights. The Company has no present plans to issue any preferred stock.

Common Stock Repurchases—On February 17, 2022, the Board authorized an increase to its previously approved stock repurchase program to bring the total remaining available repurchase authorization for shares on or after February 17, 2022 to $150 million and extended the expiration date of ~~ASU 2014-09~~the repurchase program through December 31, 2023. On August 17, 2022, the Board authorized an increase to ~~January 1, 2018. Early adoption~~the stock repurchase program approved in February 2022 to bring the total remaining available repurchase authorization for shares on or after August 17, 2022 to $150 million. The expiration date of ~~ASU 2014-09 is permitted~~the repurchase program remains through December 31, 2023.

The stock repurchase program may be suspended or discontinued at any time. The timing and amount of any shares repurchased are determined by the Company based on its evaluation of market conditions and other factors and may be completed from time to time in one or more transactions on the open market or in privately negotiated purchases in accordance with all applicable securities laws and regulations and all repurchases in the ~~first quarter~~open market will be made in compliance with Rule 10b-18 under the Securities Exchange Act of ~~2017. However,~~1934, as amended (the "Exchange Act"). Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company plans to adopt the standard in the first quarter of 2018. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or a modified retrospective adoption, meaning the standard is applied only to the most current period. The Company is evaluating the impact of the provisions of ASU 2014-09 and currently anticipates applying the modified retrospective approach when adopting the standard.might otherwise be precluded from doing so.

2219

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

~~Note 15. Guarantor Financial Information~~

~~As described in Note 11,~~ ~~Debt, on September 30, 2016,~~For the three months ended March 31, 2023, the Company ~~issued~~repurchased 33,568 shares for $1.3 million at an average price of $38.82 per share. As of March 31, 2023, the ~~Notes.~~ remaining authorized amount was $123.0 million. For the three months ended March 31, 2022, the Company repurchased 1,227,303 shares for $42.1 million at an average price of $34.26 per share.

Note 12. Comprehensive Income

The ~~Guarantors~~components of ~~the Notes, Donnelley Financial, LLC~~other comprehensive income and ~~DFS International Holding, Inc., entered into an agreement pursuant~~income tax expense allocated to ~~which~~ each ~~agreed to guarantee the Company’s obligations under the Notes. All guarantees are full and unconditional and joint and several. The Guarantors are 100% directly owned subsidiaries of the Company.~~

The guarantee of the Notes by a subsidiary guarantor will be automatically released under certain situations, including upon the sale or disposition of such subsidiary guarantor to a person that is not Donnelley Financial or a subsidiary guarantor of the notes, the liquidation or dissolution of such subsidiary guarantor, and if such subsidiary guarantor is released from its guarantee obligations under the Company’s Credit Facilities.

~~The following tables set forth condensed consolidating statements of income~~component for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016, condensed consolidating statements of financial position~~2022 were as ~~of September 30, 2017 and December 31, 2016, and condensed consolidating and combined statements of cash flows~~follows:


	Three Months Ended March 31, 2023
	Before Tax		Income Tax		Net of Tax
Translation adjustments	$	0.2	$	—	$	0.2
Adjustment for net periodic pension and other postretirement benefits plans		0.2		0.1		0.1
Other comprehensive income	$	0.4	$	0.1	$	0.3


	Three Months Ended March 31, 2022
	Before Tax		Income Tax		Net of Tax
Translation adjustments	$	0.1	$	—	$	0.1
Adjustment for net periodic pension and other postretirement benefits plans		0.8		0.2		0.6
Other comprehensive income	$	0.9	$	0.2	$	0.7

The following table summarizes changes in accumulated other comprehensive loss by component for the ~~nine~~three months ended September 30, 2017 and 2016. The principal consolidating adjustments are to eliminate the investment in subsidiaries and intercompany balances and transactions. For purposes of the tables below, the Company is referred to as “Parent” and the Guarantors are referred to as “Guarantor Subsidiaries.”March 31, 2023:


	Pension and Other Postretirement Benefits Plans Cost			Translation Adjustments			Total
Balance at December 31, 2022	$	(67.9	)	$	(15.3	)	$	(83.2	)
Other comprehensive income before reclassifications		—			0.2			0.2
Amounts reclassified from accumulated other comprehensive loss		0.1			—			0.1
Net change in accumulated other comprehensive loss		0.1			0.2			0.3
Balance at March 31, 2023	$	(67.8	)	$	(15.1	)	$	(82.9	)

2320

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

The following table summarizes changes in accumulated other comprehensive loss by component for the three months ended March 31, 2022:


	Pension and Other Postretirement Benefits Plans Cost			Translation Adjustments			Total
Balance at December 31, 2021	$	(64.4	)	$	(13.9	)	$	(78.3	)
Other comprehensive income before reclassifications		—			0.1			0.1
Amounts reclassified from accumulated other comprehensive loss		0.6			—			0.6
Net change in accumulated other comprehensive loss		0.6			0.1			0.7
Balance at March 31, 2022	$	(63.8	)	$	(13.8	)	$	(77.6	)

Reclassifications from accumulated other comprehensive loss for the three months ended March 31, 2023 and 2022 were as follows:


	Three Months Ended March 31,
	2023		2022
Amortization of pension and other postretirement benefits plans cost:
Net actuarial loss (a)	$	0.2	$	0.8
Reclassifications before tax		0.2		0.8
Income tax expense		0.1		0.2
Reclassifications, net of tax	$	0.1	$	0.6

(a)

These accumulated other comprehensive loss components are included in the calculation of net periodic pension and other postretirement benefits plans income recognized in investment and other income, net on the Unaudited Condensed ~~Consolidating~~Consolidated Statements of Operations

~~For the Three Months Ended September 30, 2017~~

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Eliminations

Consolidated

Services net sales
$
—

$
112.3

$
30.1

$
(2.1
)

$
140.3

Products net sales

—

76.6

7.0

(1.3
)

82.3

Total net sales

—

188.9

37.1

(3.4
)

222.6

Services cost of sales (exclusive of depreciation and amortization)

—

63.6

20.1

(2.0
)

81.7

Products cost of sales (exclusive of depreciation and amortization)

—

56.0

4.3

(1.4
)

58.9

Total cost of sales

—

119.6

24.4

(3.4
)

140.6

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

—

44.2

9.8

—

54.0

Restructuring, impairment and other charges-net

—

(0.7
)

0.1

—

(0.6
)
Depreciation and amortization

—

9.2

1.4

—

10.6

Income from operations

—

16.6

1.4

—

18.0

Interest expense-net

10.2

0.4

—

—

10.6

Earnings (loss) before income taxes and equity in net income of subsidiaries

(10.2
)

16.2

1.4

—

7.4

Income tax (benefit) expense

(5.1
)

8.4

(1.2
)

—

2.1

Earnings (loss) before equity in net income of subsidiaries

(5.1
)

7.8

2.6

—

5.3

Equity in net income of subsidiaries

10.4

2.6

—

(13.0
)

—

Net earnings (loss)
$
5.3

$
10.4

$
2.6

$
(13.0
)

$
5.3

Comprehensive income (loss)
$
7.8

$
12.9

$
4.8

$
(17.7
)

$
7.8

(see Note 6, Retirement Plans).

2421

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Note 13. Segment Information

~~Condensed Consolidating Statements of Operations~~

~~For the Nine Months Ended September 30, 2017~~

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Eliminations

Consolidated

Services net sales
$
—

$
386.7

$
91.2

$
(6.5
)

$
471.4

Products net sales

—

279.1

33.6

(4.0
)

308.7

Total net sales

—

665.8

124.8

(10.5
)

780.1

Services cost of sales (exclusive of depreciation and amortization)

—

186.9

59.2

(5.9
)

240.2

Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)*

—

18.4

1.1

—

19.5

Products cost of sales (exclusive of depreciation and amortization)

—

174.6

20.7

(4.6
)

190.7

Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)*

—

30.1

2.2

—

32.3

Total cost of sales

—

410.0

83.2

(10.5
)

482.7

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

—

142.6

28.6

—

171.2

Restructuring, impairment and other charges-net

—

5.1

1.3

—

6.4

Depreciation and amortization

—

27.5

4.2

—

31.7

Income from operations

—

80.6

7.5

—

88.1

Interest expense-net

32.7

—

—

—

32.7

Earnings (loss) before income taxes and equity in net income of subsidiaries

(32.7
)

80.6

7.5

—

55.4

Income tax (benefit) expense

(14.4
)

35.0

1.4

—

22.0

Earnings (loss) before equity in net income of subsidiaries

(18.3
)

45.6

6.1

—

33.4

Equity in net income of subsidiaries

51.7

6.1

—

(57.8
)

—

Net earnings
$
33.4

$
51.7

$
6.1

$
(57.8
)

$
33.4

Comprehensive income
$
39.0

$
57.3

$
10.7

$
(68.0
)

$
39.0

*	~~Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only.~~

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~Condensed Consolidating Statements of Operations~~

~~For the Three Months Ended September 30, 2016~~

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Eliminations

Consolidated

Services net sales
$
—

$
115.5

$
25.5

$
(1.6
)

$
139.4

Products net sales

—

78.1

7.7

(0.8
)

85.0

Total net sales

—

193.6

33.2

(2.4
)

224.4

Services cost of sales (exclusive of depreciation and amortization)

—

49.3

16.4

(1.5
)

64.2

Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)

—

8.2

0.5

—

8.7

Products cost of sales (exclusive of depreciation and amortization)

—

57.7

5.2

(0.9
)

62.0

Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)

—

11.5

—

—

11.5

Total cost of sales

—

126.7

22.1

(2.4
)

146.4

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

—

39.9

8.6

—

48.5

Restructuring, impairment and other charges-net

—

1.4

0.3

—

1.7

Depreciation and amortization

—

8.7

1.1

—

9.8

Income from operations

—

16.9

1.1

—

18.0

Interest expense (income) –net

—

(0.2
)

0.1

—

(0.1
)
Earnings before income taxes and equity in net income of subsidiaries

—

17.1

1.0

—

18.1

Income tax (benefit) expense

—

9.5

(1.6
)

—

7.9

Earnings before equity in net income of subsidiaries

—

7.6

2.6

—

10.2

Equity in net income of subsidiaries

10.2

2.6

—

(12.8
)

—

Net earnings
$
10.2

$
10.2

$
2.6

$
(12.8
)

$
10.2

Comprehensive income
$
10.2

$
10.2

$
2.8

$
(13.0
)

$
10.2

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~Condensed Consolidating Statements of Operations~~

~~For the Nine Months Ended September 30, 2016~~

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Eliminations

Consolidated

Services net sales
$
—

$
381.9

$
77.3

$
(5.1
)

$
454.1

Products net sales

—

284.5

26.6

(2.7
)

308.4

Total net sales

—

666.4

103.9

(7.8
)

762.5

Services cost of sales (exclusive of depreciation and amortization)

—

170.0

49.4

(4.8
)

214.6

Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)

—

27.8

1.6

—

29.4

Products cost of sales (exclusive of depreciation and amortization)

—

164.6

18.3

(3.0
)

179.9

Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)

—

48.6

—

—

48.6

Total cost of sales

—

411.0

69.3

(7.8
)

472.5

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

—

133.1

23.7

—

156.8

Restructuring, impairment and other charges-net

—

3.1

0.5

—

3.6

Depreciation and amortization

—

26.9

3.2

—

30.1

Income from operations

—

92.3

7.2

—

99.5

Interest expense-net

—

0.2

0.1

—

0.3

Earnings before income taxes and equity in net income of subsidiaries

—

��

92.1

7.1

—

99.2

Income tax expense

—

38.6

0.7

—

39.3

Earnings before equity in net income of subsidiaries

—

53.5

6.4

—

59.9

Equity in net income of subsidiaries

59.9

6.4

—

(66.3
)

—

Net earnings
$
59.9

$
59.9

$
6.4

$
(66.3
)

$
59.9

Comprehensive income
$
63.7

$
63.7

$
10.6

$
(74.3
)

$
63.7

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~Condensed Consolidating Balance Sheet~~

~~As of September 30, 2017~~

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Eliminations

Consolidated

ASSETS

Cash and cash equivalents
$
0.2

$
21.3

$
10.7

$
—

$
32.2

Receivables, less allowances

—

177.7

41.6

—

219.3

Intercompany receivables

—

80.5

—

(80.5
)

—

Intercompany short-term note receivable

—

—

35.0

(35.0
)

—

Inventories

—

21.2

2.4

—

23.6

Prepaid expenses and other current assets

7.3

7.1

3.6

(2.9
)

15.1

Total current assets

7.5

307.8

93.3

(118.4
)

290.2

Property, plant and equipment-net

—

31.4

3.3

—

34.7

Goodwill

—

429.2

18.3

—

447.5

Other intangible assets-net

—

35.2

9.0

—

44.2

Software-net

—

41.5

0.4

—

41.9

Deferred income taxes

—

32.6

4.0

—

36.6

Other noncurrent assets

3.7

30.2

4.7

—

38.6

Investments in consolidated subsidiaries

750.3

85.2

—

(835.5
)

—

Total assets
$
761.5

$
993.1

$
133.0

$
(953.9
)

$
933.7

LIABILITIES AND EQUITY

Accounts payable
$
—

$
61.5

$
12.9

$
—

$
74.4

Intercompany payable

64.5

—

16.0

(80.5
)

—

Intercompany short-term note payable

35.0

—

—

(35.0
)

—

Accrued liabilities

—

97.9

15.1

(2.9
)

110.1

Total current liabilities

99.5

159.4

44.0

(118.4
)

184.5

Long-term debt

488.4

—

—

—

488.4

Deferred compensation liabilities

—

24.6

—

—

24.6

Pension and other postretirement benefits plan liabilities

—

50.2

1.2

—

51.4

Other noncurrent liabilities

—

8.6

2.6

—

11.2

Total liabilities

587.9

242.8

47.8

(118.4
)

760.1

Total equity

173.6

750.3

85.2

(835.5
)

173.6

Total liabilities and equity
$
761.5

$
993.1

$
133.0

$
(953.9
)

$
933.7

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~Condensed Consolidating Balance Sheet~~

~~As of December 31, 2016~~

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Eliminations

Consolidated

ASSETS

Cash and cash equivalents
$
—

$
21.8

$
16.8

$
(2.4
)

$
36.2

Receivables, less allowances

—

119.9

36.3

—

156.2

Receivables from R.R. Donnelley

68.0

28.0

—

—

96.0

Intercompany receivables

—

63.0

—

(63.0
)

—

Intercompany short-term note receivable

—

—

15.3

(15.3
)

—

Inventories

—

22.7

1.4

—

24.1

Prepaid expenses and other current assets

4.3

8.1

4.7

—

17.1

Total current assets

72.3

263.5

74.5

(80.7
)

329.6

Property, plant and equipment-net

—

32.4

3.1

—

35.5

Goodwill

—

429.2

17.2

—

446.4

Other intangible assets-net

—

44.0

10.3

—

54.3

Software-net

—

41.0

0.6

—

41.6

Deferred income taxes

—

34.2

2.8

—

37.0

Other noncurrent assets

4.4

27.7

2.4

—

34.5

Investments in consolidated subsidiaries

692.2

65.1

—

(757.3
)

—

Total assets
$
768.9

$
937.1

$
110.9

$
(838.0
)

$
978.9

LIABILITIES AND EQUITY

Accounts payable
$
3.4

$
72.8

$
11.5

$
(2.4
)

$
85.3

Intercompany payable

43.9

—

18.6

(62.5
)

—

Intercompany short-term note payable

15.3

—

—

(15.3
)

—

Accrued liabilities

8.2

81.4

11.6

(0.5
)

100.7

Total current liabilities

70.8

154.2

41.7

(80.7
)

186.0

Long-term debt

587.0

—

—

—

587.0

Deferred compensation liabilities

—

24.4

—

—

24.4

Pension and other postretirement benefits plan liabilities

—

55.3

1.1

—

56.4

Other noncurrent liabilities

—

11.0

3.0

—

14.0

Total liabilities

657.8

244.9

45.8

(80.7
)

867.8

Total equity

111.1

692.2

65.1

(757.3
)

111.1

Total liabilities and equity
$
768.9

$
937.1

$
110.9

$
(838.0
)

$
978.9

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~Condensed Consolidating Statements of Cash Flows~~

~~For the Nine Months Ended September 30, 2017~~

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Eliminations

Consolidated

OPERATING ACTIVITIES

Net cash (used in) provided by operating activities
$
(4.3
)

$
21.8

$
13.8

$
2.4

$
33.7

INVESTING ACTIVITIES

Capital expenditures

—

(19.2
)

(0.8
)

—

(20.0
)
Purchase of investment

—

(3.4
)

—

—

(3.4
)
Intercompany note receivable

—

—

(19.7
)

19.7

—

Other investing activities

—

0.3

—

—

0.3

Net cash provided by (used in) investing activities

—

(22.3
)

(20.5
)

19.7

(23.1
)
FINANCING ACTIVITIES

Revolving facility borrowings

230.0

—

—

—

230.0

Payments on revolving facility borrowings

(230.0
)

—

—

—

(230.0
)
Payments on long-term debt

(100.0
)

—

—

—

(100.0
)
Debt issuance costs

(1.5
)

—

—

—

(1.5
)
Separation-related payment from R.R. Donnelley

68.0

—

—

—

68.0

Proceeds from the issuance of common stock

18.8

—

—

—

18.8

Treasury stock repurchases

(0.9
)

—

—

—

(0.9
)
Intercompany note payable

19.7

—

—

(19.7
)

—

Other financing activities

0.4

—

—

—

0.4

Net cash provided by (used in) financing activities

4.5

—

—

(19.7
)

(15.2
)
Effect of exchange rate on cash and cash equivalents

—

—

0.6

—

0.6

Net (decrease) increase in cash and cash equivalents

0.2

(0.5
)

(6.1
)

2.4

(4.0
)
Cash and cash equivalents at beginning of year

—

21.8

16.8

(2.4
)

36.2

Cash and cash equivalents at end of period
$
0.2

$
21.3

$
10.7

$
—

$
32.2

~~Donnelley Financial Solutions, Inc.~~

~~Notes to the Unaudited Condensed Consolidated and Combined Financial Statements~~

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

~~Condensed Consolidating Statements of Cash Flows~~

~~For the Nine Months Ended September 30, 2016~~

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Eliminations

Consolidated

OPERATING ACTIVITIES

Net cash provided by operating activities
$
—

$
52.6

$
4.2

$
—

$
56.8

INVESTING ACTIVITIES

Capital expenditures

—

(12.8
)

(1.2
)

—

(14.0
)
Purchase of investment

—

(3.5
)

—

—

(3.5
)
Other investing activities

—

—

0.5

—

0.5

Net cash used in investing activities

—

(16.3
)

(0.7
)

—

(17.0
)
FINANCING ACTIVITIES

Debt issuance costs

(9.3
)

—

—

—

(9.3
)
Proceeds from issuance of long-term debt

348.2

—

—

—

348.2

Net change in short-term debt

—

—

(8.8
)

—

(8.8
)
Net transfers to Parent and affiliates

(338.9
)

(9.1
)

11.8

—

(336.2
)
Net cash (used in) provided by financing activities

—

(9.1
)

3.0

��

—

(6.1
)
Effect of exchange rate on cash and cash equivalents

—

—

4.2

—

4.2

Net increase in cash and cash equivalents

—

27.2

10.7

—

37.9

Cash and cash equivalents at beginning of year

—

0.1

15.0

—

15.1

Cash and cash equivalents at end of period
$
—

$
27.3

$
25.7

$
—

$
53.0

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

~~Company Overview~~

Donnelley Financial Solutions, Inc. (“Donnelley Financial,” or the “Company”) is a financial communications services company that supports global capital markets compliance and transaction needs for its corporate clients and their advisors (such as law firms and investment bankers) and global investment management compliance and analytics needs for mutual fund companies, variable annuity providers and broker/dealers. The Company provides content management, multi-channel content distribution, data management and analytics services, collaborative workflow and business reporting tools, and translations and other language services in support of its clients’ communications requirements. The Company operates ~~in two~~its business through four operating and reportable segments:

~~United States. The U.S.~~ Capital Markets – Software Solutions, Capital Markets – Compliance and Communications Management, Investment Companies – Software Solutions and Investment Companies – Compliance and Communications Management. Corporate is not an operating segment ~~is comprised~~and consists primarily of three reporting units: capital markets, investment markets, and language solutions and other. The Company services capital market and investment market clients in the U.S by delivering products and services to help create, manage and deliver financial communications to investors and regulators. The Company provides capital market and investment market clients with communication tools and services to allow them to comply with their ongoing regulatory filings. In addition, the U.S. segment provides clients with communications services to create, manage and deliver registration statements, prospectuses, proxies and other communications to regulators and investors. The U.S. segment also includes language solutions and commercial printing capabilities.

~~International~~. The International segment includes operations in Asia, Europe, Canada and Latin America. The international business is primarily focused on working with international capital markets clients on capital markets offerings and regulatory compliance related activities within the United States. In addition, the International segment provides services to international investment market clients to allow them to comply with applicable U.S. Securities and Exchange Commission (“SEC”) regulations, as well as language solutions to international clients.

~~The Company reports certain~~ unallocated ~~selling, general and administrative~~SG&A activities and associated expenses ~~within “Corporate”,~~ including, in part, executive, legal, finance ~~marketing~~ and certain facility costs. In addition, certain costs and earnings of employee ~~benefit~~benefits plans, such as pension ~~income~~ and other postretirement benefits plans expense (income) as well as share-based compensation expense, are included in Corporate and ~~are~~ not allocated to the ~~reportable~~operating segments. ~~Prior~~

Capital Markets

The Company provides software solutions, tech-enabled services and print and distribution solutions to public and private companies for deal solutions and compliance to companies that are, or are preparing to become, subject to the ~~Separation (as defined below)~~filing and reporting requirements of the Securities Act of 1933, as amended (the "Securities Act"), ~~many of these costs were based on allocations from R.R. Donnelley & Sons Company (“RRD”); however,~~and the ~~Company now incurs such costs directly.~~

~~For~~Exchange Act. Capital markets clients leverage the Company’s ~~financial results~~software offerings, proprietary technology, deep industry expertise and experience to successfully navigate the ~~presentation of certain other financial information by segment, see Note 10,~~ ~~Segment Information, to~~SEC’s specified file formats when submitting compliance documents through the ~~Unaudited Condensed Consolidated~~EDGAR system for their transactional and ~~Combined Financial Statements.~~

~~Products and Services~~

ongoing compliance needs. The Company ~~separately reports~~assists its net sales and related cost of sales for its products and services offerings. The Company’s services offerings consist of all non-print offerings, including document composition, compliance related EDGAR filing services, transaction solutions, data and analytics, content storage services and language solutions. The Company’s product offerings primarily consist of conventional and digital printed products and related distribution costs.

~~Spin-off Transaction~~

On October 1, 2016, Donnelley Financial became an independent publicly traded company through the distribution by RRD of approximately 26.2 million shares, or 80.75%, of Donnelley Financial common stock to RRD shareholders (the “Separation”). Holders of RRD common stock received one share of Donnelley Financial common stock for every eight shares of RRD common stock held on September 23, 2016. RRD retained approximately 6.2 million shares of Donnelley Financial common stock, or a 19.25% interest (as of the Separation date) in Donnelley Financial, as part of the Separation.

Donnelley Financial’s common stock began regular-way trading under the ticker symbol “DFIN” on the New York Stock Exchange on October 3, 2016. On October 1, 2016, RRD also completed the previously announced separation of LSC Communications, Inc. (“LSC”), its publishing and retail-centric print services and office products business. On March 28, 2017, RRD completed the sale of 6.2 million shares of LSC common stock (RRD’s remaining ownership stake in LSC) in an underwritten public offering. As a result, beginning in the quarter ended June 30, 2017, LSC is no longer an affiliate of the Company.

On March 24, 2017, pursuant to the Stockholder and Registration Rights Agreement, the Company filed a Registration Statement on Form S-1 to register the offering and sale of the Company’s common stock retained by RRD. The Registration Statement on Form S-1, as amended, was declared effective by the SEC on June 13, 2017. On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. RRD retained approximately 0.1 million shares of the Company’s common stock upon consummation of the offering which were subsequently sold by RRD on August 1, 2017. In conjunction with the underwritten public offering, the underwriters exercised their option to purchase approximately 0.9 million of the Company’s shares (the “Option Shares”). The Company received approximately $18.8 million in net proceeds from the sale of the Option Shares, after deducting estimated underwriting discounts and commissions. ~~The proceeds were used to reduce outstanding debt under the Revolving Facility (as defined in~~ ~~Liquidity and Capital Resources~~).

~~Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore amounts disclosed related to RRD are presented through June 30, 2017 only.~~

~~Executive Overview~~

~~Third Quarter Overview~~

Net sales decreased by $1.8 million, or 0.8%, for the third quarter of 2017 compared to the same period in the prior year. There was a $0.3 million, or 0.1%, increase due to changes in foreign exchange rates. Net sales decreased primarily due to lower volumes in capital markets transactions, partially offset by higher volumes in mutual fund print and print-related services and capital markets compliance.

~~Non-GAAP Measures~~

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

Non-GAAP adjusted EBITDA is not presented in accordance with GAAP and has important limitations as an analytical tool. These measures should not be considered as a substitute for analysis of the Company’s results as reported under GAAP. In addition, these measures are defined differently by different companies in our industry and, accordingly, such measures may not be comparable to similarly-titled measures of other companies.

~~In addition to the factors listed above, the following items are excluded from Non-GAAP adjusted EBITDA:~~

~~Share-based compensation expense~~. Although share-based compensation is a key incentive offered to certain of the Company’s employees, business performance is evaluated excluding share-based compensation expenses. Depending upon the size, timing and the terms of grants, non-cash compensation expense may vary but will recur in future periods. Prior periods have been revised to reflect this adjustment.

~~Spin-off related transaction expenses.~~ The Company has incurred expenses related to the Separation to operate as a standalone publicly traded company. These expenses include third-party consulting fees, employee retention payments, legal fees and other costs related to the Separation. Management does not believe that these expenses are reflective of ongoing operating results. This adjustment does not include expenses incurred prior to the Separation.

~~A reconciliation of GAAP net earnings to Non-GAAP adjusted EBITDA for the three and nine months ended September 30, 2017 and 2016 for these adjustments is presented in the following table:~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(in millions)

Net earnings
$
5.3

$
10.2

$
33.4

$
59.9

Restructuring, impairment and other charges—net

(0.6
)

1.7

6.4

3.6

Share-based compensation expense

1.7

0.2

5.2

1.2

Spin-off related transaction expenses

2.6

—

9.8

—

Depreciation and amortization

10.6

9.8

31.7

30.1

Interest expense (income)—net

10.6

(0.1
)

32.7

0.3

Income tax expense

2.1

7.9

22.0

39.3

Non-GAAP adjusted EBITDA
$
32.3

$
29.7

$
141.2

$
134.4

~~2017 Restructuring, impairment and other charges—net~~. The three months ended September 30, 2017 included $0.4 million for employee termination costs and a $1.0 million net reversal of other restructuring charges, primarily related to the reversal of previously recognized lease termination costs associated with a facility that the Company began using during the third quarter of 2017. The nine months ended September 30, 2017 included $5.2 million for employee termination costs, $0.9 million of net lease termination and other restructuring costs, $0.2 million of net impairment charges of long-lived assets and $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate.

~~2016 Restructuring, impairment and other charges—net~~. The three months ended September 30, 2016 included $1.3 million for employee termination costs and $0.4 million of lease termination and other restructuring costs. The nine months ended September 30, 2016 included $2.3 million for employee termination costs, $1.2 million of lease termination and other restructuring costs and $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate.

~~Share-based compensation expense.~~ Included pre-tax charges of $1.7 million and $0.2 million for the three months ended September 30, 2017 and 2016, respectively, and $5.2 million and $1.2 million for the nine months ended September 30, 2017 and 2016, respectively.

~~Spin-off related transaction expenses.~~ Included pre-tax charges of $2.6 million and $9.8 million related to third-party consulting fees, legal fees and other costs related to the Separation for the three months and nine months ended September 30, 2017, respectively.

~~OUTLOOK~~

~~Competition~~

Technological and regulatory changes, including the electronic distribution of documents and data hosting of media content, continue to impact the market for our products and services. One of the Company’s competitive strengths is that it offers a wide array of communications products, compliance services and technologies, a global platform, exceptional sales and service and regulatory domain expertise, which provide differentiated solutions for its clients.

The financial communications services industry, in general, is highly competitive and barriers to entry have decreased as a result of technology innovation. Despite some consolidation in recent years, the industry remains highly fragmented in the United States and even more so internationally with many in-country alternative providers. The Company expects competition to increase from existing competitors, as well as new and emerging market entrants. In addition, as the Company expands its product and service offerings, it may face competition from new and existing competitors. The Company competes primarily on product quality and functionality, service levels, subject matter regulatory expertise, security and compliance characteristics, price and reputation.

The impact of digital technologies has been felt in many print products, most acutely in the Company’s mutual fund, variable annuity and public company compliance business offerings. Historically, the Company has been a high-touch, service oriented business. Technology changes have provided alternatives to the Company’s clients that allow them to manage more of the financial disclosure process themselves through collaborative document management solutions. For years, the Company has invested in its own applications, ActiveDisclosure, FundSuiteArc and Venue to serve clients and increase retention and has invested to expand capabilities and address new market sectors. The future impact of technology on the business is difficult to predict and could result in additional expenditures to restructure impacted operations or develop new technologies. In addition, the Company has made targeted acquisitions and investments in its existing business to offer clients innovative services and solutions, including acquisitions of EDGAR Online and MultiCorpora and investments in Soxhub, Mediant, Peloton and eBrevia that further solidify the Company’s position as a technology service leader in the industry.

~~The Company’s competitors for SEC filing services for~~ capital markets clients include full service financial communications providers, technology point solution providers focused on financial communications and general technology providers. The Company’s competitors for SEC filing services for investment markets clients include full service traditional providers, small niche technology providers and local and regional print providers that bid againstthroughout the ~~Company for printing, mailing and fulfillment services. Language solutions competes with global and local language service providers and language/globalization software vendors.~~

~~Market Volatility/Cyclicality~~

~~The Company is subject to market volatility in the United States and world economy, as the success~~course of ~~the transactional offering is largely dependent on the global market for IPOs,~~initial public offerings, secondary offerings, mergers and acquisitions, public and private debt offerings, leveraged buyouts, spinouts, special purpose acquisition company ("SPAC") and de-SPAC transactions and other similar transactions. In addition, the Company provides clients with compliance solutions to prepare their ongoing required Exchange Act filings that are compatible with the SEC’s EDGAR system, most notably Form 10-K, Form 10-Q, Form 8-K and proxy filings. The ~~International~~Company’s operating segments associated with its capital markets services and product offerings are as follows:

Capital Markets – Software Solutions—The Company provides Venue, ActiveDisclosure, eBrevia and other solutions to public and private companies to help manage public and private transactional and compliance processes; extract data and analyze contracts; collaborate; and tag, validate and file SEC documents.

Capital Markets – Compliance & Communications Management—The Company provides tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements.

Investment Companies

The Company provides software solutions, tech-enabled services and print, distribution and fulfillment solutions to its investment companies clients that are subject to the filing and reporting requirements of the Investment Company Act of 1940, as amended (the “Investment Company Act”), primarily mutual fund companies, alternative investment companies, insurance companies and third-party fund administrators. The Company’s suite of solutions enables its investment companies clients to comply with applicable ongoing SEC regulations, as well as to create, manage and deliver accurate and timely financial communications to investors and regulators. Investment companies clients leverage the Company’s proprietary technology, deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents through the EDGAR system. The Company’s operating segments associated with its investment companies services and products offerings are as follows:

Investment Companies – Software Solutions—The Company provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcReporting, ArcPro and ArcRegulatory, as well as services that enable storage and management of compliance and regulatory information in a self-service, central repository so that documents can be easily accessed, assembled, edited, tagged, translated, rendered and submitted to regulators and investors.

Investment Companies – Compliance & Communications Management—The Company provides its investment companies clients tech-enabled services to prepare, file and distribute registration forms, as well as XBRL-formatted filings pursuant to the Investment Company Act, through the SEC’s EDGAR system. In addition, the Company provides print and distribution solutions for its clients to communicate with their investors.

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Information by Segment

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


	Net Sales		(Loss) Income from Operations			Assets(a)		Depreciation and Amortization		Capital Expenditures
Three Months Ended March 31, 2023
Capital Markets - Software Solutions	$	43.7	$	(0.6	)	$	189.7	$	6.2	$	5.5
Capital Markets - Compliance and Communications Management		94.1		16.6			415.3		1.8		1.1
Investment Companies - Software Solutions		26.4		5.0			103.3		3.3		3.5
Investment Companies - Compliance and Communications Management		34.4		8.1			43.6		1.1		0.3
Total operating segments		198.6		29.1			751.9		12.4		10.4
Corporate		—		(14.3	)		119.4		—		0.2
Total	$	198.6	$	14.8		$	871.3	$	12.4	$	10.6


Three Months Ended March 31, 2022
Capital Markets - Software Solutions	$	44.7	$	4.3		$	189.9	$	5.1	$	5.3
Capital Markets - Compliance and Communications Management		103.6		28.9			437.2		1.5		0.7
Investment Companies - Software Solutions		25.1		6.2			99.4		2.9		3.0
Investment Companies - Compliance and Communications Management		37.6		8.1			53.1		1.1		0.6
Total operating segments		211.0		47.5			779.6		10.6		9.6
Corporate		—		(12.2	)		92.0		0.1		0.3
Total	$	211.0	$	35.3		$	871.6	$	10.7	$	9.9

(a)

Certain assets are recorded within a segment based on predominant usage, however, as they benefit more than one segment, the related operating expenses are allocated between segments.

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

As used in this management’s discussion and analysis, unless otherwise specified or the context otherwise requires, the “Company,” “DFIN,” “we,” “our,” and “us” refer to Donnelley Financial Solutions, Inc.and its consolidated subsidiaries. This discussion and analysis should be read together with the Company’s Unaudited Condensed Consolidated Financial Statements and the related notes thereto, as well as the Company’s audited Consolidated Financial Statements for the year ended December 31, 2022.

Company Overview

DFIN is a leading global risk and compliance solutions company. The Company provides regulatory filing and deal solutions via its software, technology-enabled services and print and distribution solutions to public and private companies, mutual funds and other regulated investment firms, to serve its clients’ regulatory and compliance needs. DFIN helps its clients comply with applicable regulations where and how they want to work in a digital world, providing numerous solutions tailored to each client’s precise needs. The prevailing trend is toward clients choosing to utilize the Company’s software solutions, in conjunction with its tech-enabled services, to meet their document and filing needs, while at the same time shifting away from physical print and distribution of documents, except for cases where it is still regulatorily required or requested by investors.

The Company serves its clients’ regulatory and compliance needs throughout their respective life cycles. For its capital markets clients, the Company offers solutions that allow public companies to comply with applicable U.S. Securities and Exchange Commission (“SEC”) regulations including filing agent services, digital document creation and online content management tools that support their corporate financial transactions and regulatory reporting; solutions to facilitate clients’ communications with their investors; and virtual data rooms and other deal management solutions. For investment companies, including mutual fund, insurance-investment and alternative investment companies, the Company provides solutions for creating, compiling and filing regulatory communications as well as solutions for investors designed to improve the access to and accuracy of their investment information.

Technological advancements, regulatory changes, and evolving workflow preferences have led to the Company’s clients managing more of the financial disclosure process themselves, changing the marketplace for the Company’s services and products. DFIN’s strategy in its Software Solutions segments (CM-SS and IC-SS, as defined below) aligns with the changing marketplace by focusing the Company’s investments and resources in its advanced software solutions, primarily ActiveDisclosure®, Arc Suite® software platform ("Arc Suite") and Venue® Virtual Data Room (“Venue”), while making targeted investments, such as the Company’s acquisition of Guardum Holdings Limited in 2021, to further enhance product features. In its Compliance & Communications Management segments (CM-CCM and IC-CCM, as defined below), the Company’s strategy focuses on maintaining its market-leading position by offering a high-touch, service-oriented experience, using its unique combination of tech-enabled services and print and distribution capabilities.

Market Volatility/Cyclicality and Seasonality

The Company’s Capital Markets segments (CM-SS and CM-CCM), in particular, are subject to market volatility in the United States and world economies, as ~~most~~the success of the ~~International business~~transactional and Venue offerings is ~~capital~~largely dependent on the global market for initial public offerings ("IPOs"), secondary offerings, mergers and acquisitions ("M&A"), public and private debt offerings, leveraged buyouts, spinouts, special purpose acquisition company ("SPAC") and de-SPAC transactions and other similar transactions. A variety of factors impact the global markets ~~transaction focused.~~for transactions, including economic activity levels, interest rates, market volatility, the regulatory and political environment, geopolitical and civil unrest and global pandemics, among others. Due to the significant net sales and profitability derived from transactional and Venue offerings, market volatility can lead to uneven financial performance when comparing to previous periods. U.S. IPOs, M&A transactions and public debt offerings were also previously disrupted by U.S. federal government shutdowns, and any future government shutdowns could result in additional volatility. The Company mitigates a portion of this volatility through its compliance offerings, supporting the quarterly and annual public company reporting processes through its filing services and ActiveDisclosure, as well as its Investment Companies segments (IC-SS and IC-CCM) regulatory and stockholder communications offerings, including Arc Suite. The Company also mitigates some of ~~that~~the risk by offering services in higher demand during a down market, ~~like~~such as document management tools for the bankruptcy/restructuring process and ~~also~~by moving upstream ~~from~~in the filing process with products like ~~Venue, the Company’s data room solution.~~ Venue.

The Company also attempts to balance this volatility through supporting the quarterly/annual public company reporting process through its EDGAR filing services and ActiveDisclosure product, its investment markets regulatory and shareholder communications offering and continues to expand into adjacent growth businesses like language solutions and data and analytics, which have recurring revenues and are not as susceptible to market volatility and cycles. This quarterly/annual public company reporting process work ~~also~~ subjects the Company to filing seasonality which peaks shortly after the end of each fiscal ~~quarter, with peak periods~~quarter. Additionally, investment companies clients require the Company to manage the financial and regulatory reporting and filing for mutual funds on a semi-annual basis as well as annual prospectus filings, which peaks during the ~~course of the year that have operational implications. Such~~second fiscal quarter. The seasonality and associated operational implications include the need to increase staff during peak periods through a combined strategy of hiring ~~additional full-time and~~ temporary personnel, increasing the premium time of existing staff and outsourcing production for a number of services. Additionally, clients and their financial advisors have begun to increasingly rely on web-based services which allow clients to autonomously file and distribute compliance documents with regulatory agencies, such as the SEC. While the Company believes that its ActiveDisclosure and ~~FundSuiteArc~~Arc Suite solutions are competitive in this space, competitors are also continuing to develop technologies that aim to improve clients’ ability to autonomously produce and file documents to meet their regulatory obligations. The Company ~~continues to remain~~remains focused on driving annual recurring revenue ~~in order~~ to mitigate market volatility.

~~Raw Materials~~Services and Products

The ~~primary raw materials used~~Company separately reports its net sales and related cost of sales for its software solutions, tech-enabled services and print and distribution offerings. The Company’s software solutions consist of Venue, ActiveDisclosure, eBrevia and Arc Suite, among others. The Company’s tech-enabled services offerings consist of document composition, compliance-related SEC Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) filing services and transaction solutions. The Company’s print and distribution offerings primarily consist of conventional and digital printed products and related shipping.

Government Regulations and Regulatory Impact

The SEC is adopting new as well as amending existing rules and forms to modernize the reporting and disclosure of information under the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Investment Company Act of 1940, as amended (the “Investment Company Act”). These actions, primarily within the Investment Companies business, are driving significant regulatory changes which impact the Company’s customers, and have enabled the Company to accelerate its transition from print and distribution to software solutions.

On October 26, 2022, the SEC announced that it adopted the Tailored Shareholder Reports (“TSR”) for Mutual Funds and Exchange-Traded Funds rule which requires certain investment companies to complete a new concise and visually engaging annual and semi-annual TSR that highlights key information that is particularly important for retail investors to assess and monitor their investments. The TSR, which can be printed and mailed or delivered electronically upon request of the investor, replaces Rule 30e-3 for open-ended funds and ETFs registered under Form N-1A and will require iXBRL tagging. While the rule was effective January 24, 2023, due to an 18-month transition period, compliance is not required until July 24, 2024. As a result, the Company is expecting an increase in revenue from Arc Suite software and related regulatory filings beginning in the second half of 2024.

Segments

The Company’s four operating and reportable segments are: Capital Markets – Software Solutions (“CM-SS”), Capital Markets – Compliance and Communications Management (“CM-CCM”), Investment Companies – Software Solutions (“IC-SS”) and Investment Companies – Compliance and Communications Management (“IC-CCM”). Corporate is not an operating segment and consists primarily of unallocated selling, general and administrative (“SG&A”) activities and associated expenses including, in part, executive, legal, finance and certain facility costs. In addition, certain costs and earnings of employee benefits plans, such as pension and other postretirement benefits plans expense (income) as well as share-based compensation expense, are included in Corporate and not allocated to the operating segments.

Capital Markets

The Company provides software solutions, tech-enabled services and print and distribution solutions to public and private companies for deal solutions and compliance to companies that are, or are preparing to become, subject to the filing and reporting requirements of the Securities Act and the Exchange Act. The Company’s operating segments associated with its capital markets services and products offerings are as follows:

Capital Markets – Software Solutions—The CM-SS segment provides Venue, ActiveDisclosure, eBrevia and other solutions to public and private companies to help manage public and private transactional and compliance processes; extract data and analyze contracts; collaborate; and tag, validate and file SEC documents.

Capital Markets – Compliance & Communications Management—The CM-CCM segment provides tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The Company's private conference facilities offer around-the-clock services to support the transaction process, production platform and service delivery model for a fully-virtual experience while replicating the in-person experience. The Company has seen clients utilizing the range of options available to them, including a hybrid approach with working group members working both virtually and in-person during drafting sessions for their transactions. While the Company has significantly reduced its private conferencing footprint, the service helps clients maintain confidentiality in deal negotiations and provides clients a place to host in-person working groups to meet, strategize and prepare documents for transactions.

Investment Companies

The Company provides software solutions, tech-enabled services and print, distribution and fulfillment solutions to its investment companies clients that are subject to the filing and reporting requirements of the Investment Company Act, primarily mutual fund companies, alternative investment companies, insurance companies and third-party fund administrators. The Company’s operating segments associated with its investment companies services and products offerings are as follows:

Investment Companies – Software Solutions—The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcReporting, ArcPro and ArcRegulatory as well as services that enable storage and management of compliance and regulatory information in a self-service, central repository so that documents can be easily accessed, assembled, edited, tagged, translated, rendered and submitted to regulators and investors.

Investment Companies – Compliance & Communications Management—The IC-CCM segment provides clients with tech-enabled solutions for creating, filing and distributing regulatory communications and solutions for investor communications, as well as XBRL-formatted filings pursuant to the Investment Company Act, through the SEC EDGAR system. The IC-CCM segment also provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, stockholder meeting review and expert support.

Executive Overview

First Quarter Overview

Net sales for the three months ended March 31, 2023 decreased by $12.4 million, or 5.9%, to $198.6 million from $211.0 million for the three months ended March 31, 2022, including a $1.6 million, or 0.8%, decrease due to the disposition of the EdgarOnline ("EOL") business and a $1.5 million, or 0.7%, decrease due to changes in foreign currency exchange rates. Net sales decreased primarily due to lower capital markets transactional volumes.

Income from operations for the three months ended March 31, 2023 decreased by $20.5 million, or 58.1%, to $14.8 million from $35.3 million for the three months ended March 31, 2022, primarily due to higher restructuring, impairment, and other charges, net, lower sales volumes, an unfavorable sales mix and higher technology infrastructure expense, partially offset by cost control initiatives.

Financial Review

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires the extensive use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities as well as disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s significant accounting policies and critical estimates are disclosed in the Company’s ~~printed products are paper and ink. The paper and ink supply is sourced from a small set of select suppliers in order to ensure consistent quality that meets~~Annual Report on Form 10-K for the ~~Company’s performance expectations and provides for continuity of supply. The Company believes that~~year ended December 31, 2022, as filed with the ~~risk of incurring material losses as a result of a shortage in raw materials is unlikely and that the losses, if any, would not have a materially negative impact~~SEC on ~~the Company’s business.~~February 21, 2023 (the “Annual Report”).

~~Distribution~~

The Company’s products are distributed to end-users through the U.S or foreign postal services, through retail channels, electronically or by direct shipment to customer facilities. Postal costs are a significant component of many customers’ cost structures and postal rate changes can influence the number of pieces that the Company’s customers are willing to print and mail.

~~Financial Review~~

In the financial review that follows, the Company discusses its unaudited condensed consolidated ~~and combined~~ results of operations, cash flows and certain other information. In periods prior to the Separation, the combined financial statements were prepared on a stand-alone basis and were derived from RRD’s consolidated financial statements and accounting records. There are limitations inherent in the preparation of all carve out financial statements due to the fact that the Company’s business was previously part of a larger organization. This discussion should be read in conjunction with the Company’s ~~unaudited condensed consolidated and combined financial statements~~Unaudited Condensed Consolidated Financial Statements and the related ~~notes.~~notes thereto.

Results of Operations for the Three Months Ended ~~September 30, 2017~~March 31, 2023 as Compared to the Three Months Ended ~~September 30, 2016~~March 31, 2022

The following table shows the results of operations for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016 :~~2022:


	Three Months Ended March 31,
	2023			2022			$ Change			% Change
	(in millions, except percentages)
Net sales
Tech-enabled services	$	78.4		$	91.7		$	(13.3	)		(14.5	%)
Software solutions		70.1			69.8			0.3			0.4	%
Print and distribution		50.1			49.5			0.6			1.2	%
Total net sales		198.6			211.0			(12.4	)		(5.9	%)
Cost of sales (a)
Tech-enabled services		33.3			37.7			(4.4	)		(11.7	%)
Software solutions		28.4			27.5			0.9			3.3	%
Print and distribution		28.6			33.7			(5.1	)		(15.1	%)
Total cost of sales		90.3			98.9			(8.6	)		(8.7	%)
Selling, general and administrative expenses (a)		70.5			64.3			6.2			9.6	%
Depreciation and amortization		12.4			10.7			1.7			15.9	%
Restructuring, impairment and other charges, net		10.9			1.8			9.1		nm
Other operating income, net		(0.3	)		—			(0.3	)	nm
Income from operations		14.8			35.3			(20.5	)		(58.1	%)
Interest expense, net		3.5			1.5			2.0		nm
Investment and other income, net		(6.9	)		(0.2	)		(6.7	)	nm
Earnings before income taxes		18.2			34.0			(15.8	)		(46.5	%)
Income tax expense		2.4			7.6			(5.2	)		(68.4	%)
Net earnings	$	15.8		$	26.4		$	(10.6	)		(40.2	%)

2017

2016

$ Change

% Change

(in millions, except percentages)

Services net sales
$
140.3

$
139.4

$
0.9

0.6
%
Products net sales

82.3

85.0

(2.7
)

(3.2
%)
Net sales

222.6

224.4

(1.8
)

(0.8
%)
Services cost of sales (exclusive of depreciation and amortization)

81.7

64.2

17.5

27.3
%
Services cost of sales with RRD affiliates (exclusive of depreciation and amortization)*

—

8.7

(8.7
)

(100.0
%)
Products cost of sales (exclusive of depreciation and amortization)

58.9

62.0

(3.1
)

(5.0
%)
Products cost of sales with RRD affiliates (exclusive of depreciation and amortization)*

—

11.5

(11.5
)

(100.0
%)
Cost of sales

140.6

146.4

(5.8
)

(4.0
%)
Selling, general and administrative expenses (exclusive of depreciation and amortization)

54.0

48.5

5.5

11.3
%
Restructuring, impairment and other charges-net

(0.6
)

1.7

(2.3
)

(135.3
%)
Depreciation and amortization

10.6

9.8

0.8

8.2
%
Income from operations
$
18.0

$
18.0

$
-

0.0
%
(a)

Exclusive of depreciation and amortization

*	~~Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only.~~

nm – Not meaningful

Consolidated ~~and Combined~~

Three Months Ended March 31, 2023 compared to the Three Months Ended March 31, 2022

Net sales of tech-enabled services of $78.4 million for the three months ended ~~September 30, 2017 increased $0.9~~March 31, 2023 decreased $13.3 million, or ~~0.6%~~14.5%, as compared to ~~$140.3 million, versus~~ the three months ended ~~September 30, 2016, including a $0.2 million, or 0.1%, increase due to changes in foreign exchange rates.~~March 31, 2022. Net sales of tech-enabled services ~~increased~~decreased primarily due to ~~higher mutual fund print-related services and virtual data room services, partially offset by~~ lower ~~volumes in both~~ capital markets ~~transactions~~transactional and investment companies compliance ~~and mutual fund content management~~ volumes.

Net sales of ~~products~~software solutions of $70.1 million for the three months ended ~~September 30, 2017 decreased $2.7~~March 31, 2023 increased $0.3 million, or ~~3.2%~~0.4%, as compared to ~~$82.3 million versus~~ the three months ended ~~September 30, 2016, including a $0.1 million, or 0.1%, increase due to changes in foreign exchange rates.~~March 31, 2022. Net sales of ~~products decreased~~software solutions increased primarily due to ~~lower capital markets transactions~~higher ArcPro volumes and ~~healthcare print volumes,~~higher ActiveDisclosure pricing, partially offset by ~~higher capital markets compliance volumes.~~the disposition of the EOL business, which was sold in the fourth quarter of 2022.

~~Services cost~~Net sales of ~~sales increased $8.8~~print and distribution of $50.1 million ~~or 12.1%,~~ for the three months ended ~~September 30, 2017, versus~~March 31, 2023 increased $0.6 million, or 1.2%, as compared to the three months ended ~~September 30, 2016. Services~~March 31, 2022. Net sales of print and distribution increased primarily due to higher capital markets compliance volumes.

Tech-enabled services cost of sales of $33.3 million for the three months ended March 31, 2023 decreased $4.4 million, or 11.7%, as compared to the three months ended March 31, 2022. Tech-enabled services cost of sales decreased primarily due to lower sales volumes and cost control initiatives, partially offset by an unfavorable sales mix. As a percentage of tech-enabled services net sales, tech-enabled services cost of sales increased 1.4%, primarily driven by an unfavorable sales mix, partially offset by cost control initiatives.

Software solutions cost of sales of $28.4 million for the three months ended March 31, 2023 increased $0.9 million, or 3.3%, as compared to the three months ended March 31, 2022. Software solutions cost of sales increased primarily due to higher ~~volumes in mutual fund print-related services, an increase in~~product development costs, partially offset by cost control initiatives. As a percentage of software solutions net sales, software solutions cost of sales increased 1.1%, primarily driven by higher product development costs, partially offset by cost control initiatives.

Print and distribution cost of sales of $28.6 million for the three months ended March 31, 2023 decreased $5.1 million, or 15.1%, as compared to the three months ended March 31, 2022. Print and distribution cost of sales decreased primarily due to cost control initiatives. As a percentage of print and distribution net sales, print and distribution cost of sales decreased 11.0%, primarily driven by cost control initiatives.

SG&A expenses of $70.5 million for the three months ended March 31, 2023 increased $6.2 million, or 9.6%, as compared to the three months ended March 31, 2022. SG&A expenses increased primarily due to a higher allocation of ~~information technology~~technology-related expense, higher incentive compensation and employee-related expenses ~~from selling, general~~driven by additional headcount in areas that support the Company’s transformation initiatives, higher consulting expense and ~~administrative expenses to cost of sales,~~higher bad debt expense, partially offset by cost control initiatives. As a percentage of net sales, ~~services cost of sales~~SG&A expenses increased ~~5.9% primarily due~~ to ~~unfavorable mix from lower capital markets transaction volumes and increased information technology expenses.~~

~~Products cost of sales decreased $14.6 million, or 19.9%,~~35.5% for the three months ended ~~September 30, 2017, versus~~March 31, 2023 from 30.5% for the three months ended ~~September 30, 2016. As a percentage of net sales, products cost of sales decreased 14.9%. Products cost of sales decreased~~March 31, 2022, primarily due to a ~~favorable mix~~higher allocation of ~~products sales~~technology-related expense, higher incentive compensation and employee-related expenses, higher consulting expense and higher bad debt expense, partially offset by cost control initiatives.

~~Selling, general~~Depreciation and ~~administrative expenses increased $5.5 million, or 11.3%, to $54.0~~amortization of $12.4 million for the three months ended ~~September 30, 2017,~~March 31, 2023 increased $1.7 million, or 15.9%, as compared to the three months ended ~~September 30, 2016,~~March 31, 2022, primarily due to an increase in expenses incurred to operate as an independent public company, including employee compensation costs and spin-off related transaction expenses, partially offset by an increase in the allocation of information technology expenses from selling, general and administrative expenses to cost of sales. As a percentage of net sales, selling, general, and administrative expenses increased from 21.6% for the three months ended September 30, 2016 to 24.3% for the three months ended September 30, 2017 due to increased costs of operating as an independent public company.higher software amortization expense.

For the three months ended September 30, 2017, the Company recorded a net restructuring reversal of $0.6 million, as compared to $1.7 million in expense for the three months ended September 30, 2016. In 2017, the net restructuring reversal included a $1.0 million net restructuring reversal of other restructuring charges, primarily related to the reversal of previously recognized lease termination charges associated with a facility that the Company began using during the third quarter of September 30, 2017 partially offset by $0.4 million of employee termination costs for 21 employees. In 2016, these charges included $1.3 million of employee termination costs for 22 employees and $0.4 million of lease terminationRestructuring, impairment and other ~~restructuring costs.~~

~~Depreciation and amortization increased $0.8 million, or 8.2%, to $10.6~~charges, net of $10.9 million for the three months ended September 30, 2017 compared to the three months ended September 30, 2016. Depreciation and amortization included $3.6 million and $3.6 million of amortization of other intangible assets related to customer relationships, trade names and non-compete agreements for the three months ended September 30, 2017 and 2016, respectively.

~~Income from operations for the three months ended September 30, 2017 was consistent at $18.0~~March 31, 2023 increased $9.1 million as compared to the three months ended September 30, 2016, due to cost control initiatives and higher volumes in capital markets compliance, mutual fund print-related services and virtual data room services, partially offset by lower volumes in capital markets transactions and healthcare print, an increase in expenses incurred to operate as an independent public company, includingMarch 31, 2022. In 2023, these charges included $10.8 million of employee ~~compensation~~termination costs ~~and spin-off related transaction expenses.~~for approximately 150 employees. In 2022, these charges included $1.6 million of employee termination costs for approximately 60 employees.

2017

2016

$ Change

% Change

(in millions, except percentages)
Interest expense (income)-net
$
10.6

$
(0.1
)

$
10.7

nm

~~Net interest expense increased $10.7~~Income from operations of $14.8 million for the three months ended ~~September 30, 2017 versus~~March 31, 2023 decreased $20.5 million, or 58.1%, as compared to the ~~same period in 2016,~~three months ended March 31, 2022, primarily due to higher restructuring, impairment, and other charges, net, lower sales volumes, an unfavorable sales mix and higher technology infrastructure expense, partially offset by cost control initiatives.

Interest expense, net of $3.5 million for the ~~issuance~~three months ended March 31, 2023 increased $2.0 million, as compared to the three months ended March 31, 2022. Interest expense, net increased primarily due to higher average Revolving Facility (as defined below) borrowings during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 and a higher variable interest rate on the Company's outstanding debt facilities.

Investment and other income, net of ~~debt~~$6.9 million for the three months ended March 31, 2023 increased $6.7 million, as compared to the three months ended March 31, 2022, primarily due to a net realized gain on the sale of an investment in ~~connection with the Separation.~~an equity security.

2017

2016

$ Change

% Change

(in millions, except percentages)

Earnings before income taxes
$
7.4

$
18.1

$
(10.7
)

(59.1
%)
Income tax expense

2.1

7.9

(5.8
)

(73.4
%)
Effective income tax rate

28.4
%

43.6
%

The effective income tax rate was ~~28.4%~~13.2% for the three months ended ~~September 30, 2017~~March 31, 2023, as compared to ~~43.6%~~22.4% for the three months ended ~~September 30, 2016. For the quarter ended September 30, 2017,~~March 31, 2022. The decrease in the effective income tax rate ~~is lower due to a decrease in~~for the ~~estimated full-year income tax rate, which~~three months ended March 31, 2023 was primarily driven by alower pre-tax earnings and the net favorable ~~change in jurisdictional mix~~impact of ~~income, as well as the positive settlement of previous years’ tax disputes.~~discrete adjustments.

Information by Segment

The following tables summarize net sales, income (loss) from operations, operating margin and certain items impacting comparability within each of the operating segments and Corporate.

~~U.S.~~Capital Markets – Software Solutions

Three Months Ended September 30,

2017

2016

(in millions, except percentages)

Net sales
$
186.1

$
192.3

Income from operations

22.4

18.7

Operating margin

12.0
%

9.7
%
Restructuring, impairment and other charges-net

(0.8
)

1.4

Spin-off related transaction expenses

2.2

—


	Three Months Ended March 31,
	2023			2022			$ Change			% Change
	(in millions, except percentages)
Net sales	$	43.7		$	44.7		$	(1.0	)		(2.2	%)
(Loss) income from operations		(0.6	)		4.3			(4.9	)	nm
Operating margin		(1.4	%)		9.6	%
Items impacting comparability
Restructuring, impairment and other charges, net		2.0			0.8			1.2		nm
Non-income tax, net		(0.2	)		(0.2	)		—			—

Net Sales for the Three Months

Ended September 30,

Reporting unit
2017

2016

$ Change

% Change

(in millions, except percentages)

Capital Markets
$
93.8

$
98.4

$
(4.6
)

(4.7
%)
Investment Markets

81.7

84.1

(2.4
)

(2.9
%)
Language Solutions and other

10.6

9.8

0.8

8.2
%
Total U.S.
$
186.1

$
192.3

$
(6.2
)

(3.2
%)

nm – Not meaningful

Three Months Ended March 31, 2023 compared to the Three Months Ended March 31, 2022

Net sales ~~for the U.S. segment~~of $43.7 million for the three months ended ~~September 30, 2017 were $186.1 million, a decrease of $6.2~~March 31, 2023 decreased $1.0 million, or ~~3.2%~~2.2%, compared to the three months ended September 30, 2016. Net sales decreased due to lower volumes in capital markets transactions and healthcare print, partially offset by higher capital markets compliance volumes, mutual fund print-related services, and virtual data room services. An analysis of net sales by reporting unit follows:

~~Capital Markets:~~ ~~Sales decreased due to lower transactions volumes, partially offset by higher compliance volumes, and virtual data room services.~~

~~Investment Markets:~~ ~~Sales decreased due to lower healthcare and content management volumes partially offset by higher mutual fund print-related services.~~

~~Language Solutions and other:~~ ~~Sales increased primarily due to higher volumes in commercial print.~~

~~U.S. segment income from operations increased $3.7 million, or 19.8%, for the three months ended September 30, 2017~~ as compared to the three months ended ~~September 30, 2016,~~March 31, 2022. Net sales decreased $1.6 million due to the disposition of the EOL business, which was sold in the fourth quarter of 2022, partially offset by higher ActiveDisclosure pricing.

Loss from operations of $0.6 million for the three months ended March 31, 2023 decreased $4.9 million, as compared to income from operations of $4.3 million for the three months ended March 31, 2022, primarily due to ~~an increase in capital markets compliance volumes, mutual fund print-related services, cost control initiatives, and lower~~a higher allocation of overhead costs, higher restructuring, impairment and other charges, net, higher depreciation and amortization expense and the disposition of the EOL business, partially offset by ~~lower volumes in capital markets transactions, spin-off related transaction expenses~~price increases and ~~lower healthcare volumes.~~ cost control initiatives.

Operating ~~margins increased~~margin decreased from ~~9.7%~~9.6% for the three months ended ~~September 30, 2016~~March 31, 2022 to ~~12.0%~~a negative margin of 1.4% for the three months ended ~~September 30, 2017~~March 31, 2023, primarily due to a higher allocation of overhead costs, higher restructuring, impairment and other charges, net, which had a negative impact on operating margin of 2.7%, and higher depreciation and amortization expense, partially offset by price increases and cost control initiatives.

Capital Markets – Compliance and Communications Management


	Three Months Ended March 31,
	2023			2022			$ Change			% Change
	(in millions, except percentages)
Net sales	$	94.1		$	103.6		$	(9.5	)		(9.2	%)
Income from operations		16.6			28.9			(12.3	)		(42.6	%)
Operating margin		17.6	%		27.9	%
Items impacting comparability
Restructuring, impairment and other charges, net		8.3			0.4			7.9		nm
Accelerated rent expense		0.5			—			0.5		nm
Gain on sale of long-lived assets		(0.3	)		—			(0.3	)	nm
Non-income tax, net		—			(0.1	)		0.1			(100.0	%)

nm – Not meaningful

Three Months Ended March 31, 2023 compared to the Three Months Ended March 31, 2022

Net sales of $94.1 million for the three months ended March 31, 2023 decreased $9.5 million, or 9.2%, as compared to the three months ended March 31, 2022. Net sales decreased primarily due to lower transactional volumes.

Income from operations of $16.6 million for the three months ended March 31, 2023 decreased $12.3 million, or 42.6%, as compared to the three months ended March 31, 2022, primarily due to higher restructuring, impairment and other charges, net, lower transactional sales volumes, an unfavorable sales mix and higher bad debt expense, partially offset by cost control initiatives, a lower allocation of overhead costs and price increases.

Operating margin decreased from 27.9% for the three months ended March 31, 2022 to 17.6% for the three months ended March 31, 2023, primarily due to higher restructuring, impairment and other charges, net, which had a negative impact on operating margin of 8.4%, lower transactional sales volumes, an unfavorable sales mix and higher bad debt expense, partially offset by cost control initiatives, a lower allocation of overhead costs and price increases.

Investment Companies – Software Solutions


	Three Months Ended March 31,
	2023			2022			$ Change			% Change
	(in millions, except percentages)
Net sales	$	26.4		$	25.1		$	1.3			5.2	%
Income from operations		5.0			6.2			(1.2	)		(19.4	%)
Operating margin		18.9	%		24.7	%
Items impacting comparability
Restructuring, impairment and other charges, net		(0.1	)		0.1			(0.2	)	nm

nm – Not meaningful

Three Months Ended March 31, 2023 compared to the Three Months Ended March 31, 2022

Net sales of $26.4 million for the three months ended March 31, 2023 increased $1.3 million, or 5.2%, as compared to the three months ended March 31, 2022. Net sales increased primarily due to higher ArcPro volumes.

Income from operations of $5.0 million for the three months ended March 31, 2023 decreased $1.2 million, or 19.4%, as compared to the three months ended March 31, 2022, primarily due to higher product development costs.

Operating margin decreased from 24.7% for the three months ended March 31, 2022 to 18.9% for the three months ended March 31, 2023, primarily due to higher product development costs.

Investment Companies – Compliance and Communications Management


	Three Months Ended March 31,
	2023			2022			$ Change			% Change
	(in millions, except percentages)
Net sales	$	34.4		$	37.6		$	(3.2	)		(8.5	%)
Income from operations		8.1			8.1			—			—
Operating margin		23.5	%		21.5	%
Items impacting comparability
Restructuring, impairment and other charges, net		0.2			0.4			(0.2	)		(50.0	%)

Three Months Ended March 31, 2023 compared to the Three Months Ended March 31, 2022

Net sales of $34.4 million for the three months ended March 31, 2023 decreased $3.2 million, or 8.5%, as compared to the three months ended March 31, 2022. Net sales decreased primarily due to lower compliance volumes.

Income from operations of $8.1 million for the three months ended March 31, 2023 was flat compared to the three months ended March 31, 2022, primarily due to lower sales volumes and a higher allocation of overhead costs, offset by cost control initiatives.

Operating margin increased from 21.5% for the three months ended March 31, 2022 to 23.5% for the three months ended March 31, 2023, primarily due to cost control initiatives, partially offset by ~~an increase in selling expenses and incentive compensation expense.~~ a higher allocation of overhead costs.

~~International~~30

Three Months Ended September 30,

2017

2016

(in millions, except percentages)

Net sales
$
36.5

$
32.1

Income from operations

1.5

1.1

Operating margin

4.1
%

3.4
%
Restructuring, impairment and other charges-net

0.1

0.3

Corporate

Net sales for the International segment for the three months ended September 30, 2017 were $36.5 million, an increase of $4.4 million, or 13.7%, compared to the three months ended September 30, 2016 including a $0.3 million, or 0.9%, increase due to changes in foreign exchange rates. Net sales increased due to higher mutual fund print-related services and translation services.

International segment income from operations increased $0.4 million, or 36.4%, for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016, due to an increase in mutual fund print-related services and translation services and lower restructuring, impairment and other charges, partially offset by an increase in allocated expenses, including information technology expenses.

Operating margins increased from 3.4% for the three months ended September 30, 2016 to 4.1% for the three months ended September 30, 2017 due to an increase in overall sales volume for the segment, partially offset by an increase in allocated expenses, including information technology expenses.

~~Corporate~~

The following table summarizes unallocated operating expenses and certain items impacting comparability within the activities presented as Corporate:


	Three Months Ended March 31,
	2023		2022
	(in millions)
Operating expenses	$	14.3	$	12.2
Items impacting comparability
Share-based compensation expense		4.3		3.6
Restructuring, impairment and other charges, net		0.5		0.1

Three Months Ended March 31, 2023 compared to the Three Months Ended March 31, 2022

Three Months Ended September 30,

2017

2016

(in millions)

Operating expenses
$
5.9

$
1.8

Spin-off related transaction expenses

0.4

—

Share-based compensation expense

1.7

0.2

Restructuring, impairment and other charges-net

0.1

—

Corporate operating expenses for the three months ended ~~September 30, 2017~~March 31, 2023 increased ~~$4.1~~$2.1 million ~~versus~~as compared to the ~~same period in 2016~~three months ended March 31, 2022, primarily due to higher ~~employee compensation costs incurred to operate as an independent public company, an increase in share-based compensation~~consulting expense and ~~spin-off related transaction expenses.~~

~~Results of Operations for the Nine Months Ended September 30, 2017 as Compared to the Nine Months Ended September 30, 2016~~

~~The following table shows the results of operations for the nine months ended September 30, 2017 and 2016 :~~

2017

2016

$ Change

% Change

(in millions, except percentages)

Services net sales
$
471.4

$
454.1

$
17.3

3.8
%
Products net sales

308.7

308.4

0.3

0.1
%
Net sales

780.1

762.5

17.6

2.3
%
Services cost of sales (exclusive of depreciation and amortization)

240.2

214.6

25.6

11.9
%
Services cost of sales with RRD affiliates (exclusive of depreciation and amortization)*

19.5

29.4

(9.9
)

(33.7
%)
Products cost of sales (exclusive of depreciation and amortization)

190.7

179.9

10.8

6.0
%
Products cost of sales with RRD affiliates (exclusive of depreciation and amortization)*

32.3

48.6

(16.3
)

(33.5
%)
Cost of sales

482.7

472.5

10.2

2.2
%
Selling, general and administrative expenses (exclusive of depreciation and amortization)

171.2

156.8

14.4

9.2
%
Restructuring, impairment and other charges-net

6.4

3.6

2.8

77.8
%
Depreciation and amortization

31.7

30.1

1.6

5.3
%
Income from operations
$
88.1

$
99.5

$
(11.4
)

(11.5
%)

*	~~Beginning in the quarter ended September 30, 2017, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only.~~

~~Consolidated and Combined~~

Net sales of services for the nine months ended September 30, 2017 increased $17.3 million, or 3.8%, to $471.4 million, versus the nine months ended September 30, 2016, including a $2.4 million, or 0.5%, decrease due to changes in foreign exchange rates. Net sales of services increased due to higher volumes in mutual fund print-related services, virtual data room services and content management,additional headcount, partially offset by lower ~~capital markets transactions~~healthcare expense.

Non-GAAP Measures

The Company believes that certain non-GAAP measures, such as non-GAAP adjusted EBITDA (“Adjusted EBITDA”), provide useful information about the Company’s operating results and ~~compliance volumes.~~

~~Net sales~~enhance the overall ability to assess the Company’s financial performance. The Company uses these measures, together with other measures of ~~products for~~performance prepared in accordance with GAAP, to compare the ~~nine months ended September 30, 2017 increased $0.3 million, or 0.1%,~~relative performance of operations in planning, budgeting and reviewing the performance of its business. Adjusted EBITDA allows investors to ~~$308.7 million versus~~make a more meaningful comparison between the ~~nine months ended September 30, 2016, including a $1.0 million, or 0.3%, decrease due to changes in foreign exchange rates. Net sales~~Company’s core business operating results over different periods of ~~products increased due to higher capital markets compliance and mutual fund print-volumes, partially offset by lower capital markets transactions volumes and healthcare volumes.~~

~~Services cost of sales increased $15.7 million, or 6.4%, for~~time. The Company believes that Adjusted EBITDA, when viewed with the nine months ended September 30, 2017, versus the nine months ended September 30, 2016. Services cost of sales increased due to higher mutual fund print-related services, and content management volumes, an increase in the allocation of information technology expenses from selling, general and administrative expenses to cost of sales and an increase in incentive compensation expense, partially offset by cost control initiatives. As a percentage of net sales, services cost of sales increased 1.4% due to unfavorable mixCompany’s results under GAAP and the ~~increased~~accompanying reconciliations, provides useful information ~~technology expense.~~

~~Products~~about the Company’s business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by factors such as historic cost and age of sales decreased $5.5 million, or 2.4%, for the nine months ended September 30, 2017, versus the nine months ended September 30, 2016. As a percentage of net sales, products cost of sales decreased 1.9%. Products cost of sales decreased due to a favorable mix of product sales and cost control initiatives.

Selling, general and administrative expenses increased $14.4 million, or 9.2%, to $171.2 million, for the nine months ended September 30, 2017, as compared to the nine months ended September 30, 2016, primarily due to an increase in expenses incurred to operate as an independent public company, including selling expenses, employee compensation costs and spin-off related transaction expenses, partially offset by an increase in the allocation of information technology expenses from selling, general and administrative expenses to cost of sales. As a percentage of net sales, selling, general, and administrative expenses increased from 20.6% for the nine months ended September 30, 2016 to 21.9% for the nine months ended September 30, 2017 primarily due to increased costs of operating as an independent public company, including spin-off related transaction expenses.

~~For the nine months ended September 30, 2017, the Company recorded net~~assets, restructuring, impairment and other charges, net, non-income tax, net, gain on investment as well as other items, as described below, the Company believes that Adjusted EBITDA can provide a useful additional basis for comparing the current performance of ~~$6.4~~the underlying operations being evaluated.

Adjusted EBITDA is not presented in accordance with GAAP and has important limitations as an analytical tool. These measures should not be considered as a substitute for analysis of the Company’s results as reported under GAAP. In addition, these measures are defined differently by different companies and, accordingly, such measures may not be comparable to similarly-titled measures of other companies. In addition to the factors listed above, share-based compensation expense is excluded from Adjusted EBITDA. Although share-based compensation is a key incentive offered to certain of the Company’s employees, business performance is evaluated excluding share-based compensation expenses. Depending upon the size, timing and the terms of grants, share-based compensation expense may vary but will recur in future periods.

A reconciliation of net earnings to Adjusted EBITDA for the three months ended March 31, 2023 and 2022 is presented in the following table:


		Three Months Ended March 31,
		2023			2022
	(in millions)
Net earnings		$	15.8		$	26.4
Restructuring, impairment and other charges, net			10.9			1.8
Share-based compensation expense			4.3			3.6
Accelerated rent expense			0.5			—
Gain on investment in an equity security			(6.7	)		—
Gain on sale of long-lived assets			(0.3	)		—
Non-income tax, net			(0.2	)		(0.3	)
Depreciation and amortization			12.4			10.7
Interest expense, net			3.5			1.5
Investment and other income, net			(0.2	)		(0.2	)
Income tax expense			2.4			7.6
Adjusted EBITDA		$	42.4		$	51.1

Restructuring, impairment and other charges, net—The three months ended March 31, 2023 included employee termination costs of $10.8 million. The three months ended March 31, 2022 included employee termination costs of $1.6 million. Refer to Note 5, Restructuring, Impairment and Other Charges, net, for additional information.

Share-based compensation expense—Included charges of $4.3 million ~~as compared to~~and $3.6 million for the ~~nine~~three months ended ~~September 30, 2016. In 2017, these~~March 31, 2023 and 2022, respectively.

Accelerated rent expense—Includes charges ~~included $5.2 million~~ of employee termination costs for 169 employees, $0.9 million of lease termination and other restructuring costs, $0.2 million of impairment charges for long-lived assets, and $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate. In 2016, these charges included $2.3 million of employee termination costs for 74 employees, $1.2 million of lease termination and other restructuring costs and $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate.

~~Depreciation and amortization increased $1.6 million, or 5.3%, to $31.7~~$0.5 million for the ~~nine~~three months ended ~~September 30, 2017 compared~~March 31, 2023 related to the ~~nine~~acceleration of rent expense associated with abandoned operating leases.

Gain on investment in an equity security—Included a net realized gain of $6.7 million on the sale of an investment in an equity security for the three months ended ~~September 30, 2016. Depreciation~~March 31, 2023. Refer to Note 1, Overview, Basis of Presentation and ~~amortization included $10.7 million and $10.8 million~~Significant Accounting Policies, for additional information.

Gain on sale of ~~amortization~~long-lived assets—Included a gain of ~~other intangible assets related to customer relationships, trade names and non-compete agreements for the nine months ended September 30, 2017 and 2016, respectively.~~

Income from operations for the nine months ended September 30, 2017 decreased $11.4 million, or 11.5%, to $88.1 million versus the nine months ended September 30, 2016, due to lower volumes in capital markets transactions and healthcare print and an increase in expenses incurred to operate as an independent public company, including selling expenses, employee compensation costs and spin-off related transaction expenses, partially offset by cost control initiatives and higher volumes in mutual funds print-related, capital markets compliance, mutual fund print, virtual data room services, and content management.

2017

2016

$ Change

% Change

(in millions, except percentages)
Interest expense-net
$
32.7

$
0.3

$
32.4

nm

~~Net interest expense increased $32.4~~$0.3 million for the ~~nine~~three months ended ~~September 30, 2017 versus the same period in 2016, due~~March 31, 2023 related to ~~the issuance of debt in connection with the Separation.~~

2017

2016

$ Change

% Change

(in millions, except percentages)

Earnings before income taxes
$
55.4

$
99.2

$
(43.8
)

(44.2
%)
Income tax expense

22.0

39.3

(17.3
)

(44.0
%)
Effective income tax rate

39.7
%

39.6
%

~~The effective income tax rate was 39.7%~~non-refundable deposits on an agreement for the ~~nine months ended September 30, 2017 compared to 39.6% for the nine months ended September 30, 2016.~~

~~Information by Segment~~pending sale of land.

~~The following tables summarize~~Non-income tax, net ~~sales,~~—Included income ~~(loss) from operations and certain items impacting comparability within each~~ of ~~the operating segments and Corporate.~~

~~U.S.~~

Nine Months Ended September 30,

2017

2016

(in millions, except percentages)

Net sales
$
658.2

$
662.4

Income from operations

107.5

100.0

Operating margin

16.3
%

15.1
%
Restructuring, impairment and other charges-net

4.4

3.1

Spin-off related transaction expenses

4.0

—

Net Sales for the Nine Months

Ended September 30,

Reporting unit
2017

2016

$ Change

% Change

(in millions, except percentages)

Capital Markets
$
349.8

$
369.5

$
(19.7
)

(5.3
%)
Investment Markets

276.0

263.7

12.3

4.7
%
Language Solutions and other

32.4

29.2

3.2

11.0
%
Total U.S.
$
658.2

$
662.4

$
(4.2
)

(0.6
%)

Net sales for the U.S. segment for the nine months ended September 30, 2017 were $658.2 million, a decrease of $4.2 million, or 0.6%, compared to the nine months ended September 30, 2016. Net sales decreased due to lower capital markets transactions and healthcare volumes partially offset by higher volumes in capital markets compliance, mutual fund print-related services, mutual fund print volumes, virtual data room services and content management. An analysis of net sales by reporting unit follows:

~~Capital Markets:~~ ~~Sales decreased due to lower transactions volumes, partially offset by increased compliance volumes and virtual data room services.~~

~~Investment Markets:~~ ~~Sales increased due to higher mutual fund print and print-related services, mutual fund print, and content management volumes, partially offset by lower healthcare volumes.~~

~~Language Solutions and other:~~ ~~Sales increased primarily due to higher volumes in commercial print.~~

U.S. segment income from operations increased $7.5 million, or 7.5%, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, due to cost control initiatives and higher volumes in capital markets compliance, mutual fund print-related services, mutual fund print volumes, virtual data room services and content management, partially offset by lower capital markets transactions and healthcare volumes and an increase in selling expenses, spin-off related transaction expenses, incentive compensation expense, and restructuring, impairment and other charges.

Operating margins increased from 15.1% for the nine months ended September 30, 2016 to 16.3% for the nine months ended September 30, 2017 due to cost control initiatives. The increase in operating margins was partially offset by spin-off related transaction expenses and higher restructuring, impairment and other charges which impacted margins by 0.6 and 0.2 percentage points, respectively, and an increase in selling expenses and incentive compensation expense.

~~International~~

Nine Months Ended September 30,

2017

2016

(in millions, except percentages)

Net sales
$
121.9

$
100.1

Income from operations

7.6

7.2

Operating margin

6.2
%

7.2
%
Restructuring, impairment and other charges-net

1.3

0.5

Net sales for the International segment for the nine months ended September 30, 2017 were $121.9 million, an increase of $21.8 million, or 21.8%, compared to the nine months ended September 30, 2016 including a $3.4 million, or 3.4%, decrease due to changes in foreign exchange rates. Net sales increased due to higher volumes in capital markets transactions, mutual funds, virtual data room, and translation services.

~~International segment income from operations was $7.6~~$0.2 million and ~~$7.2~~$0.3 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively, ~~due~~related to certain estimated non-income tax exposures previously accrued by the increase from the higher volumes in capital markets transactions, mutual funds, virtual data room and translation services and cost control initiatives, mostly offset by an increase in allocated expenses, including information technology expenses and an increase in incentive compensation expense and restructuring, impairment and other charges.Company.

Operating margins decreased from 7.2% for the nine months ended September 30, 2016 to 6.2% for the nine months ended September 30, 2017 of which 0.6 percentage points were due to higher restructuring, impairment and other charges. Operating margins were also impacted by an increase in allocated expenses, including information technology expenses partially offset by cost control initiatives.

~~Corporate~~

~~The following table summarizes unallocated operating expenses and certain items impacting comparability within the activities presented as Corporate:~~

Nine Months Ended September 30,

2017

2016

(in millions)

Operating expenses
$
27.0

$
7.7

Spin-off related transaction expenses

5.8

—

Share-based compensation expense

5.2

1.2

Restructuring, impairment and other charges-net

0.7

—

Corporate operating expenses for the nine months ended September 30, 2017 increased $19.3 million versus the same period in 2016 due to higher employee compensation costs incurred to operate as an independent public company, spin-off related transaction expenses and an increase in share-based compensation and bad debt expense.

Liquidity and Capital Resources

Prior to the Separation, RRD provided financing, cash management and other treasury services to Donnelley Financial. The Company’s cash balances were swept by RRD and the Company received funding from RRD for operating and investing needs. Cash transferred to and from RRD was recorded as intercompany payables and receivables which are reflected in the net parent company investment in the consolidated and combined financial statements. Subsequent to the Separation, the Company no longer participates in cash management and funding arrangements with RRD.

The Company believes it has sufficient liquidity to support its ongoing operations and to invest in future growth to create value for its ~~shareholders.~~investors. Cash on hand, operating cash flows and the Company’s ~~$300.0 million senior secured revolving credit facility (the “Revolving Facility”)~~Revolving Facility are the primary sources of liquidity and are expected to be used for, among other things, payment of interest and principal on the Company’s debt obligations, capital expenditures necessary to support productivity improvement and growth, ~~acquisitions~~ and completion of restructuring programs.

The Company maintains cash pooling structures that enable participating international locations to draw on the pools’ cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce the Company’s short-term borrowing costs or for other purposes. The Company has the ability to repatriate foreign cash, associated with foreign earnings previously subjected to U.S. tax, with minimal additional tax consequences. The Company maintains its assertion of indefinite reinvestment on all foreign earnings and other outside basis differences to indicate that the Company remains indefinitely reinvested in operations outside of the U.S., with the exception of the previously taxed foreign earnings already subject to U.S. tax. The Company did not repatriate excess cash at its foreign subsidiaries to the U.S. during the year ended December 31, 2022. The Company is evaluating whether to make any cash repatriations in the future.

On August 16, 2022, President Biden signed the Inflation Reduction Act (“IRA”) into law, which included enactment of a 15% corporate minimum tax effective in 2023 and imposes a 1% excise tax on share repurchases that occur after December 31, 2022. The Company currently does not expect the IRA to have a material impact on its financial results.

Cash and cash equivalents were $28.8 million at March 31, 2023, which included $4.0 million in the U.S. and $24.8 million at international locations.

The following describes the Company’s cash flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016.~~2022:


	Three Months Ended March 31,
	2023			2022
	(in millions)
Net cash used in operating activities	$	(51.5	)	$	(52.2	)
Net cash used in investing activities		(1.7	)		(9.9	)
Net cash provided by financing activities		47.7			17.3
Effect of exchange rate on cash and cash equivalents		0.1			0.7
Net decrease in cash and cash equivalents	$	(5.4	)	$	(44.1	)

Cash Flows Used ~~For~~In Operating Activities

Operating cash inflows and outflows are largely attributable to sales of the Company’s services and ~~products. Operating cash outflows are largely attributable to~~products as well as recurring expenditures for labor, rent, raw materials and other operating activities. For periods prior to the Separation, allocations of operating expenses from RRD are also reflected as operating cash inflows or outflows, including those for pension costs and current income taxes payable.

Net cash ~~provided by~~used in operating activities was ~~$33.7~~$51.5 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~$56.8~~$52.2 million for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2022. The decrease in ~~net~~ cash ~~provided by~~used in operating activities ~~reflected higher~~was primarily due to lower incentive compensation and commissions payments ~~related~~in 2023, partially offset by unfavorable changes in accounts receivable and accounts payable, a decrease in net earnings and an increase in interest paid. Accrued liabilities and other decreased operating cash flows by $33.1 million for the three months ended March 31, 2023, as compared to ~~interest~~$81.1 million for the three months ended March 31, 2022, primarily due to lower incentive compensation and commissions payments in 2023, as a result of the Company's 2022 operating results. Accounts receivable decreased operating cash flows by $39.7 million for the three months ended March 31, 2023, as compared to $22.2 million for the three months ended March 31, 2022, primarily due to timing of collections. Accounts payable increased operating cash flows by $0.6 million for the three months ended March 31, 2023, as compared to $16.4 million for the three months ended March 31, 2022, primarily due to the timing of supplier payments. The Company's interest payments increased by $3.2 million to $4.1 million for ~~suppliers~~the three months ended March 31, 2023 from $0.9 million, due to higher average borrowings on the Revolving Facility (as defined below) and ~~employee-related liabilities, offset by the timing of customer payments.~~higher interest rates.

Cash Flows Used ~~For~~in Investing Activities

Net cash used in investing activities was ~~$23.1~~$1.7 million for the ~~nine~~three months ended ~~September 30, 2017 compared~~March 31, 2023, which consisted of $10.6 million of capital expenditures, substantially all related to ~~$17.0~~investments in software development, partially offset by $8.9 million ~~for~~of proceeds from the ~~nine months ended September 30, 2016. Capital expenditures were $20.0 million during the nine months ended September 30, 2017,~~sale of an ~~increase of $6.0 million as compared to the nine months ended September 30, 2016.~~investment in an equity security. The Company expects that capital expenditures for ~~2017~~the full year ended December 31, 2023 will be approximately ~~$30.0 million to $35.0 million, compared to $26.2 million in 2016.~~$60 million.

~~Cash Flows Provided By Financing Activities~~

Net cash used in ~~financing~~investing activities ~~for the nine months ended September 30, 2017~~ was ~~$15.2 million compared to $6.1~~$9.9 million for the ~~nine~~three months ended ~~September 30, 2016. The increase~~March 31, 2022, which consisted of capital expenditures, mostly driven by investments in ~~net~~software development.

Cash Flows Provided by Financing Activities

Net cash ~~used in~~provided by financing activities ~~reflected $100.0~~was $47.7 million ~~in payments on long-term debt partially offset by a $68.0 million Separation-related payment from RRD and $18.8~~for the three months ended March 31, 2023. During the three months ended March 31, 2023, the Company received $99.0 million of proceeds from the ~~issuance~~Revolving Facility borrowings, partially offset by $33.5 million of payments on the Revolving Facility borrowings. The Company's common stock ~~as compared to $348.2~~repurchases for the three months ended March 31, 2023 totaled $18.4 million, which included $17.0 million associated with vesting of the Company employee's equity awards and $1.4 million of repurchases under the stock repurchase program.

Net cash provided by financing activities was $17.3 million for the three months ended March 31, 2022. During the three months ended March 31, 2022, the Company received $113.0 million of proceeds from ~~issuance~~the Revolving Facility borrowings, offset by $43.0 million of ~~long-term debt during~~payments on the ~~nine~~Revolving Facility borrowings. The Company’s common stock repurchases for the three months ended ~~September 30, 2016, mostly offset by $336.2~~March 31, 2022 totaled $52.6 million, ~~in net transfers from RRD and its affiliates in connection with the Separation.~~

~~Contractual Cash Obligations and Other Commitments and Contingencies~~

In connection with the Separation, the Company entered into transition services agreements with RRD, covering certain support and back office services that the Company has historically received from RRD. Under the termswhich included $40.7 million of the agreements, RRD will provide various services, including information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. The Company also entered into a transition services agreement with LSC, pursuant to which LSC will provide certain services to the Company. The servicesrepurchases under the ~~transition services agreements generally extend for up to 24 months following the Separation.~~

~~The Company entered into a number of commercial~~stock repurchase program and ~~other arrangements~~$11.9 million associated with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months.

~~See discussion in Liquidity related to the Company's debt obligations.~~

~~Liquidity~~

Cash and cash equivalents of $32.2 million at September 30, 2017 included $21.5 million in the U.S. and $10.7 million at international locations. The Company has not recognized deferred tax liabilities related to taxes on foreign earnings as foreign earnings are considered to be indefinitely reinvested. Certain cash balances of foreign subsidiaries may be subject to U.S. or local country taxes if repatriated to the U.S. In addition, repatriation of some foreign cash balances is further restricted by local laws. Management regularly evaluates whether foreign earnings are expected to be indefinitely reinvested. This evaluation requires judgment about the future operating and liquidity needsvesting of the Company and its foreign subsidiaries. Changes in economic and business conditions, foreign or U.S. tax laws, or the Company’s financial situation could result in changes to these judgments and the need to record additional tax liabilities.employees' equity awards.

On June 21, 2017, RRD completed the sale of approximately 6.1 million shares of the Company’s common stock in an underwritten public offering. RRD retained approximately 0.1 million shares of the Company’s common stock upon consummation of the offering which were subsequently sold by RRD on August 1, 2017. In conjunction with the underwritten public offering, the underwriters exercised their option to purchase approximately 0.9 million Option Shares. The Company received approximately $18.8 million in net proceeds from the sale of the Option Shares, after deducting estimated underwriting discounts and commissions. The proceeds were used to reduce outstanding debt under the Revolving Facility.Debt

The Company’s debt ~~maturity schedule~~as of March 31, 2023 and December 31, 2022 consisted of the following (in millions):


	March 31, 2023			December 31, 2022
Term Loan A Facility	$	125.0		$	125.0
Borrowings under the Revolving Facility		110.5			45.0
Unamortized debt issuance costs		(0.7	)		(0.8	)
Total long-term debt	$	234.8		$	169.2

Credit Agreement—On May 27, 2021 (the “Restatement Effective Date”), the Company amended and restated its credit agreement dated as of September 30, ~~2017 is shown~~2016 (as in effect prior to such amendment and restatement, the “Credit Agreement,” and the Credit Agreement, as so amended and restated, the “Amended and Restated Credit Agreement”), by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, to, among other things, provide for a $200.0 million delayed-draw term loan A facility (the “Term Loan A Facility”) (bearing interest at a rate equal to the sum of the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from 2.00% to 2.50% based upon the Company's Consolidated Net Leverage Ratio), extend the maturity of the $300.0 million Revolving Facility to May 27, 2026 and modify the financial maintenance and negative covenants in the ~~table below:~~

Debt Maturity Schedule

Total

2017

2018

2019

2020

2021

Thereafter

Notes ^(a)
$
300.0

$
—

$
—

$
—

$
—

$
—

$
300.0

Borrowings under the Term Loan Credit Facility ^(b)

200.0

—

—

—

—

—

200.0

Borrowings under the Revolving Facility

—

—

—

—

—

—

—

Total
$
500.0

$
—

$
—

$
—

$
—

$
—

$
500.0

~~(a)~~

~~Excludes unamortized debt issuance costs~~Credit Agreement. The unpaid principal amount of ~~$5.8 million which do not represent contractual commitments with a fixed amount or maturity date.~~

~~(b)~~

~~Excludes unamortized debt issuance costs of $4.3 million and a discount of $1.5 million which do not represent contractual commitments with a fixed amount or maturity date.~~

~~On October 2, 2017, the Company repriced~~ the Term Loan ~~Credit Facility. As a result, the interest rate was reduced by 100 basis points to LIBOR plus 3.0%~~A Facility is due and ~~the LIBOR floor was reduced by 25 basis points to .75%. Additionally, under the amended Credit Agreement, principal payments are due~~payable in full on a quarterly basis. Other terms, including the outstanding principal, maturity date, and debt covenants such as the minimum interest coverage ratio and the maximum leverage ratio are consistent with the original Credit Agreement. ~~If the debt maturity schedule above as~~May 27, 2026. Voluntary prepayments of ~~September 30, 2017 reflected the impact of the amended Credit Agreement, the Company would reflect the following amounts for Borrowings under~~ the Term Loan ~~Credit Facility:~~A Facility are permitted at any time without premium or penalty.

Total

2017

2018

2019

2020

2021

Thereafter

Borrowings under the Term Loan Credit Facility
$
200.0

$
2.5

$
9.7

$
9.2

$
8.8

$
8.3

$
161.5

The Amended and Restated Credit Agreement contains a number of covenants, including ~~but not limited to,~~ a minimum Interest Coverage Ratio and the Consolidated Net Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the ~~Company’s~~Company's ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to ~~$15.0~~$20.0 million in the aggregate, though additional dividends may be allowed subject to certain conditions. Each of these covenants is subject to important exceptions and qualifications.

The indenture governing the Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and (9) designations of unrestricted subsidiaries. Each of these covenants is subject to important exceptions and qualifications.

As of ~~September 30, 2017,~~March 31, 2023, there ~~were no~~was $110.5 million of borrowings outstanding ~~borrowings~~under the Revolving Facility as well as $2.6 million in outstanding letters of credit and bank guarantees and none of the outstanding letters of credit reduced the availability under the Revolving Facility. Based on the Company’s results of operations for the twelve months ended ~~September 30, 2017~~March 31, 2023 and existing debt, the Company would have had the ability to utilize ~~$261.0~~the remaining $189.5 million of the ~~$300.0 million~~ Revolving Facility and not have been in violation of the terms of the agreement.

The current availability under the Revolving Facility and net available liquidity as of ~~September 30, 2017~~March 31, 2023 is shown in the table below:


	September 30, 2017			March 31, 2023
Availability	(in millions)			(in millions)
Revolving Facility	$	300.0		$	300.0
Availability reduction from covenants		(39.0	)		—
	$	261.0		$	300.0
Usage
Borrowings under the Revolving Facility		—		$	110.5
Impact on availability related to outstanding letters of credit		—
	$	—

Current availability at September 30, 2017	$	261.0
Cash		32.2
Current availability at March 31, 2023				$	189.5
Cash and cash equivalents					28.8
Net Available Liquidity	$	293.2		$	218.3

The Company was in compliance with its debt covenants as of ~~September 30, 2017,~~March 31, 2023, and expects to remain in compliance based on management’s estimates of operating and financial results for ~~2017~~fiscal year 2023 and the foreseeable future. However, declines in market and economic conditions or demand for certain of the Company’s ~~products~~services and ~~services~~products could impact the Company’s ability to remain in compliance with its debt covenants in future periods. ~~As of September 30, 2017, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.~~

The failure of a financial institution supporting the Revolving Facility would reduce the size of the Company’s committed facility unless a replacement institution was added. As of ~~September 30, 2017,~~March 31, 2023, the Revolving Facility is supported by ~~seventeen~~fifteen U.S. and international financial institutions.

As of ~~September 30, 2017,~~March 31, 2023, the Company ~~had $4.2 million in outstanding letters of credit and bank guarantees, of which there was no reduction~~met all the conditions required to ~~the availability~~borrow under the Revolving ~~Facility.~~

~~The Company’s liquidity may be affected by its credit ratings. The Company’s S&P~~Facility, and ~~Moody’s credit ratings as of September 30, 2017 are shown in the table below:~~

	~~S&P~~	~~Moody's~~
~~Ratings~~
~~Long-term corporate credit rating~~	~~BB-~~	B1
~~Senior unsecured debt~~	B	B3
~~Credit Agreement~~	~~BB+~~	~~Ba2~~
~~Outlook~~	~~Stable~~	~~Stable~~

~~Debt Issuances~~

~~On September 30, 2016,~~management expects the Company ~~entered into~~to continue to meet the Credit Agreement, which provided for the Term Loan Credit Facility and the Revolving Facility. The Term Loan Facility will mature on September 30, 2023 and the Revolving Credit Facility will mature on September 30, 2021.applicable borrowing conditions.

On September 30, 2016, the Company issued $300.0 million of 8.250% Senior Notes (the “Notes”) due October 15, 2024. Interest on the Notes is due semi-annually on April 15 and October 15, commencing on April 15, 2017. 34

The Notes were issued pursuant to an indenture where certain wholly-owned domestic subsidiaries of the Company guarantee the Notes (the “Guarantors”). In connection with the offering of the Notes, the Company entered into a registration rights agreement, dated as of September 30, 2016 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the SEC with respect to an offer to exchange the Notes for registered notes. On March 10, 2017, the Company filed a Registration Statement on Form S-4 (as amended, the “Exchange Offer Registration Statement”) to offer to exchange the Notes for registered notes which have terms identical in all material respects to the Notes except that the registered notes are not subject to transfer restrictions or registration rights. The Exchange Offer Registration Statement was declared effective by the SEC on March 22, 2017. An exchange offer for the Notes was launched on March 22, 2017 and settled on April 25, 2017, resulting in the exchange of $299.9 million aggregate principal amount of outstanding Notes for registered notes.

~~Risk Management~~

~~The Company is exposed to interest rate risk on its variable debt. At September 30, 2017, the Company’s exposure to rate fluctuations on variable-interest borrowings was $198.5 million.~~

The Company assesses 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. A hypothetical 10% change in yield would change the fair values of fixed-rate debt at September 30, 2017 by approximately $11.7 million, or 3.9%.

The Company is exposed to the impact of foreign currency fluctuations in certain countries in which it operates. The exposure to foreign currency movements is limited in many countries because the operating revenues and expenses of its 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 exposed to currency risk and may enter into foreign exchange spot and forward contracts to hedge the currency risk. The Company does not use derivative financial instruments for trading or speculative purposes.

OTHER INFORMATION

Litigation and Contingent Liabilities

For a discussion of certain litigation involving the Company, see Note ~~12,~~ 7, Commitments and Contingencies, to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements.

Critical Accounting Estimates

There were no changes to critical accounting estimates from those disclosed in the Annual Report.

New Accounting Pronouncements ~~and Pending Accounting Standards~~

Recently ~~issued~~adopted accounting standards and their estimated effect on the Company’s ~~combined financial statements~~Unaudited Condensed Consolidated Financial Statements are described in Note ~~14,~~ ~~New~~1, Overview, Basis of Presentation and Significant Accounting ~~Pronouncements~~Policies, to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements.

~~CAUTIONARY STATEMENT~~

The Company has made forward-looking statements in this Quarterly Report on Form 10-Q within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of the Company. Generally, forward-looking statements include information concerning possible or assumed future actions, events, or results of operations of the Company.

These statements may include words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “continues,” “believes,” “may,” “will,” “goals” and variations of such words and similar expressions are intended to identify our forward-looking statements.

Forward-looking statements are not guarantees of performance. The following important factors, in addition to those discussed elsewhere in this Quarterly Report on Form 10-Q, that could cause our actual results to differ materially from those indicated in any such forward-looking statements. These factors include, but are not limited to:

~~the volatility of the global economy and financial markets, and its impact on transactional volume;~~

~~failure to offer high quality customer support and services;~~

~~the retention of existing, and continued attraction of additional clients and key employees;~~

~~the growth of new technologies with which we may be able to adequately compete;~~

~~our inability to maintain client referrals;~~

~~vulnerability to adverse events as a result of becoming a stand-alone company following the Separation from RRD, including the inability to obtain as favorable of terms from third-party vendors;~~

~~the competitive market for our products and industry fragmentation affecting our prices;~~

~~the ability to gain client acceptance of our new products and technologies;~~

~~delay in market acceptance of our products and services due to undetected errors or failures found in our products and services;~~

~~failure to maintain the confidentiality, integrity and availability of our systems, software and solutions;~~

~~failure to properly use and protect client and employee information and data;~~

~~the effect of a material breach of security or other performance issues of any of our or our vendors’ systems;~~

~~factors that affect client demand, including changes in economic conditions, national or international regulations and clients’ budgetary constraints;~~

~~our ability to access debt and the capital markets due to adverse credit market conditions;~~

~~the effect of increasing costs of providing healthcare and other benefits to our employees~~

~~changes in the availability or costs of key materials (such as ink and paper) or in prices received for the sale of by-products;~~

~~failure to protect our proprietary technology;~~

~~failure to successfully integrate acquired businesses into our business;~~

~~availability to maintain our brands and reputation;~~

•

~~the retention of existing, and continued attraction of, key employees, including management;~~

~~the effects of operating in international markets, including fluctuations in currency exchange rates;~~

~~the effect of economic and political conditions on a regional, national or international basis;~~

~~lack of market for our common stock;~~

~~lack of history as an operating company and costs associated with being an independent company;~~

~~failure to achieve certain intended benefits of the Separation; and~~

~~failure of RRD or LSC to satisfy their respective obligations under transition services agreements or other agreements entered into in connection with the Separation.~~

Consequently, readers of the Quarterly Report on Form 10-Q should consider these forward looking statements only as the Company’s current plans, estimates and beliefs. The Company does not undertake and specifically declines 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 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Refer to Item 2 of Part I under “Risk Management.”~~ There have been no significant changes to the Company’s market risk ~~since December 31, 2016. For a discussion of exposure to market risk, refer to Part II, Item 7A – Quantitative and Qualitative Disclosures about Market Risk, of~~disclosed in the ~~Company’s~~ Annual ~~Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on February 28, 2017.~~Report.

Item 4. Controls and Procedures

~~(a)~~

~~Disclosure controls and procedures.~~

(a)

Disclosure controls and procedures.

Management, together with the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules ~~13a-15(e)~~13a-15(b) and Rule 15d-15(e) of the ~~Securities~~ Exchange ~~Act of 1934)~~Act) as of ~~September 30, 2017.~~March 31, 2023. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of ~~September 30, 2017.~~March 31, 2023.

~~(b)~~

(b)

Changes in ~~internal control over financial reporting.~~

Under the rules and regulations of the Securities and Exchange Commission, Donnelley Financial is not required to comply with the requirements of Section 404 of the Sarbanes Oxley Act of 2002 until its Annual Report on Form 10-K for the year ending December 31, 2017. In its Annual Report on Form 10-K for the year ending December 31, 2017, management and the Company’s independent registered public accounting firm will be required to provide an assessment as to the effectiveness of the Company’s internal control over financial reporting.

There ~~have not been any~~were no changes in the Company’s 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~~Act) during the quarter ended ~~September 30, 2017~~March 31, 2023 that ~~had~~have materially affected or ~~were~~are reasonably likely to materially affect, the Company’s internal control over financial reporting.

For a discussion of certain litigation involving the Company, see Note ~~12,~~ 7, Commitments and Contingencies, to the Unaudited Condensed Consolidated ~~and Combined~~ Financial Statements.

There ~~have been~~were no material changes during the three months ended March 31, 2023 to the risk factors ~~disclosed~~identified in the ~~Company’s~~ Annual ~~Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on February 28, 2017.~~Report.

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		36-4829638
(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	Name of each exchange on which registered
Common Stock (Par Value $0.01)	DFIN	NYSE


~~Part I~~
~~FINANCIAL INFORMATION~~			Page
~~Item 1:~~		~~Condensed Consolidated and Combined Financial Statements (unaudited)~~SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		3
					Part I
FINANCIAL INFORMATION
Item 1:	Condensed Consolidated ~~and Combined~~Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2017~~ March 31, 2023and ~~2016~~2022		34

	Condensed Consolidated ~~and Combined~~ Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022		45

	Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022		56

	Condensed Consolidated ~~and Combined~~ Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022		67
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2023 and 2022		8
	Notes to Condensed Consolidated ~~and Combined~~ Financial Statements		79

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations		3224

Item 3:	Quantitative and Qualitative Disclosure About Market Risk		4735
Item 4:	Controls and Procedures		35

~~Part II~~
~~OTHER INFORMATION~~ Item 1:	Legal Proceedings	~~Page~~	35
Item 1:1A:	~~Legal Proceedings~~Risk Factors		4835

Item ~~1A:~~2:	~~Risk Factors~~		48

~~Item 2:~~	Unregistered Sales of Equity Securities and Use of Proceeds		4836
Item 3:	Defaults Upon Senior Securities		36
Item 4:	Mine Safety Disclosures		4836
Item 5:	Other Information		36
Item 6:	Exhibits		49
			37
Signatures			5341


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Part II
~~Item 4:~~	~~Controls and Procedures~~OTHER INFORMATION	47

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017		2016

Services net sales	$	140.3		$	139.4		$	471.4	$	454.1
Products net sales		82.3			85.0			308.7		308.4
Total net sales		222.6			224.4			780.1		762.5
Services cost of sales (exclusive of depreciation and amortization)		81.7			64.2			240.2		214.6
Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)*		—			8.7			19.5		29.4
Products cost of sales (exclusive of depreciation and amortization)		58.9			62.0			190.7		179.9
Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)*		—			11.5			32.3		48.6
Total cost of sales		140.6			146.4			482.7		472.5
Selling, general and administrative expenses (exclusive of depreciation and amortization)		54.0			48.5			171.2		156.8
Restructuring, impairment and other charges-net		(0.6	)		1.7			6.4		3.6
Depreciation and amortization		10.6			9.8			31.7		30.1
Income from operations		18.0			18.0			88.1		99.5
Interest expense (income)-net		10.6			(0.1	)		32.7		0.3
Earnings before income taxes		7.4			18.1			55.4		99.2
Income tax expense		2.1			7.9			22.0		39.3
Net earnings	$	5.3		$	10.2		$	33.4	$	59.9

Net earnings per share (Note 8):
Basic net earnings per share		0.16			0.31			1.01		1.85
Diluted net earnings per share		0.16			0.31			1.01		1.85
Weighted average number of common shares outstanding
Basic		33.6		32.4				33.0	32.4
Diluted		33.8		32.4				33.2	32.4

	September 30,			December 31,
	2017			2016
ASSETS
Cash and cash equivalents	$	32.2		$	36.2
Receivables, less allowances for doubtful accounts of $8.7 in 2017 (2016 - $6.4)		219.3			156.2
Receivables from R.R. Donnelley*		—			96.0
Inventories		23.6			24.1
Prepaid expenses and other current assets		15.1			17.1
Total current assets		290.2			329.6
Property, plant and equipment-net		34.7			35.5
Goodwill		447.5			446.4
Other intangible assets-net		44.2			54.3
Software-net		41.9			41.6
Deferred income taxes		36.6			37.0
Other noncurrent assets		38.6			34.5
Total assets	$	933.7		$	978.9
LIABILITIES
Accounts payable	$	74.4		$	85.3
Accrued liabilities		110.1			100.7
Total current liabilities		184.5			186.0
Long-term debt (Note 11)		488.4			587.0
Deferred compensation liabilities		24.6			24.4
Pension and other postretirement benefits plan liabilities		51.4			56.4
Other noncurrent liabilities		11.2			14.0
Total liabilities		760.1			867.8
Commitments and Contingencies (Note 12)
EQUITY
Preferred stock, $0.01 par value
Authorized: 1.0 shares; Issued: None		—			—
Common stock, $0.01 par value
Authorized: 65.0 shares;
Issued: 33.8 shares in 2017 (2016 - 32.6 shares)		0.3			0.3
Treasury stock, at cost: less than 0.1 shares in 2017		(0.9	)		—
Additional paid-in-capital		204.3			179.9
Retained earnings (deficit)		32.6			(0.8	)
Accumulated other comprehensive loss		(62.7	)		(68.3	)
Total equity		173.6			111.1
Total liabilities and equity	$	933.7		$	978.9


	Common Stock				Treasury Stock					Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss			Total Equity
	Shares		Amount		Shares		Amount
Balance at December 31, 2022		36.9	$	0.4		8.0	$	(221.8	)	$	280.2	$	353.9	$	(83.2	)	$	329.5
Net earnings		—		—		—		—			—		15.8		—			15.8
Other comprehensive income		—		—		—		—			—		—		0.3			0.3
Share-based compensation expense		—		—		—		—			4.3		—		—			4.3
Common stock repurchases		—		—		—		(1.3	)		—		—		—			(1.3	)
Issuance of share-based awards, net of withholdings and other		1.0		—		0.4		(17.0	)		1.1		—		—			(15.9	)
Balance at March 31, 2023		37.9	$	0.4		8.4	$	(240.1	)	$	285.6	$	369.7	$	(82.9	)	$	332.7

	September 30, 2017		December 31, 2016
Raw materials and manufacturing supplies	$	6.4	$	7.6
Work in process		11.4		10.8
Finished goods		5.8		5.7
Total	$	23.6	$	24.1

	U.S.		International		Total
Net book value as of December 31, 2016	$	429.2	$	17.2	$	446.4
Foreign exchange and other adjustments		—		1.1		1.1
Net book value as of September 30, 2017	$	429.2	$	18.3	$	447.5

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

Customer relationships	$	140.6	$	(97.1	)	$	43.5	$	138.8	$	(85.3	)	$	53.5
Trade names		6.3		(5.6	)		0.7		6.3		(5.5	)		0.8
Trademarks, licenses and agreements		3.2		(3.2	)		—		3.2		(3.2	)		—
Total other intangible assets	$	150.1	$	(105.9	)	$	44.2	$	148.3	$	(94.0	)	$	54.3

Three Months Ended	Employee		Other Restructuring			Total Restructuring
September 30, 2017	Terminations		Charges			Charges			Total
U.S.	$	0.2	$	(1.0	)	$	(0.8	)	$	(0.8	)
International		0.1		—			0.1			0.1
Corporate		0.1		—			0.1			0.1
Total	$	0.4	$	(1.0	)	$	(0.6	)	$	(0.6	)

					Foreign
	December 31,		Restructuring		Exchange and		Cash			September 30,
	2016		Charges		Other		Paid			2017
Employee terminations	$	1.6	$	5.2	$	0.1	$	(5.3	)	$	1.6
Lease terminations and other		3.8		0.9		0.2		(1.5	)		3.4
Total	$	5.4	$	6.1	$	0.3	$	(6.8	)	$	5.0

	Total
	Equity
Balance at December 31, 2016	$	111.1
Net earnings		33.4
Other comprehensive income		5.6
Separation-related adjustments		0.2
Share-based compensation		5.2
Issuance of common stock		18.8
Issuance of share-based awards, net of withholdings and other		(0.7	)
Balance at September 30, 2017	$	173.6

				Accumulated
	Net Parent			Other
	Company			Comprehensive			Total
	Investment			Loss			Equity
Balance at December 31, 2015	$	639.5		$	(16.0	)	$	623.5
Net earnings		59.9			—			59.9
Transfers from parent company, net		(598.6	)		—			(598.6	)
Other comprehensive income		—			3.8			3.8
Balance at September 30, 2016	$	100.8		$	(12.2	)	$	88.6

	Three Months Ended								Nine Months Ended
	September 30, 2016								September 30, 2016
	Before Tax			Income Tax		Net of Tax			Before Tax			Income Tax		Net of Tax
	Amount			Expense		Amount			Amount			Expense		Amount
Translation adjustments	$	0.2		$	—	$	0.2		$	4.2		$	—	$	4.2
Adjustment for net periodic pension plan and other postretirement benefits plan cost		(0.2	)		—		(0.2	)		(0.4	)		—		(0.4	)
Other comprehensive income	$	—		$	—	$	—		$	3.8		$	—	$	3.8

	Three Months Ended					Nine Months Ended					Classification in the Condensed
	September 30,					September 30,					Consolidated and Combined
	2017		2016			2017		2016			Statements of Operations
Amortization of pension and other postretirement benefits plan cost:
Net actuarial income (loss)	$	0.6	$	(0.2	)	$	1.6	$	(0.4	)	_(a)
Reclassifications before tax		0.6		(0.2	)		1.6		(0.4	)
Income tax expense		0.3		—			0.6		—
Reclassifications, net of tax	$	0.3	$	(0.2	)	$	1.0	$	(0.4	)

								Income (Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Three Months Ended September 30, 2017
U.S.	$	188.9	$	(2.8	)	$	186.1	$	22.4		$	9.2	$	7.7
International		37.1		(0.6	)		36.5		1.5			1.4		0.1
Total operating segments		226.0		(3.4	)		222.6		23.9			10.6		7.8
Corporate		—		—			—		(5.9	)		—		0.2
Total operations	$	226.0	$	(3.4	)	$	222.6	$	18.0		$	10.6	$	8.0

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated

Services net sales	$	—		$	112.3		$	30.1		$	(2.1	)	$	140.3
Products net sales		—			76.6			7.0			(1.3	)		82.3
Total net sales		—			188.9			37.1			(3.4	)		222.6
Services cost of sales (exclusive of depreciation and amortization)		—			63.6			20.1			(2.0	)		81.7
Products cost of sales (exclusive of depreciation and amortization)		—			56.0			4.3			(1.4	)		58.9
Total cost of sales		—			119.6			24.4			(3.4	)		140.6
Selling, general and administrative expenses (exclusive of depreciation and amortization)		—			44.2			9.8			—			54.0
Restructuring, impairment and other charges-net		—			(0.7	)		0.1			—			(0.6	)
Depreciation and amortization		—			9.2			1.4			—			10.6
Income from operations		—			16.6			1.4			—			18.0
Interest expense-net		10.2			0.4			—			—			10.6
Earnings (loss) before income taxes and equity in net income of subsidiaries		(10.2	)		16.2			1.4			—			7.4
Income tax (benefit) expense		(5.1	)		8.4			(1.2	)		—			2.1
Earnings (loss) before equity in net income of subsidiaries		(5.1	)		7.8			2.6			—			5.3
Equity in net income of subsidiaries		10.4			2.6			—			(13.0	)		—
Net earnings (loss)	$	5.3		$	10.4		$	2.6		$	(13.0	)	$	5.3
Comprehensive income (loss)	$	7.8		$	12.9		$	4.8		$	(17.7	)	$	7.8

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017		2016
	(in millions)
Net earnings	$	5.3		$	10.2		$	33.4	$	59.9
Restructuring, impairment and other charges—net		(0.6	)		1.7			6.4		3.6
Share-based compensation expense		1.7			0.2			5.2		1.2
Spin-off related transaction expenses		2.6			—			9.8		—
Depreciation and amortization		10.6			9.8			31.7		30.1
Interest expense (income)—net		10.6			(0.1	)		32.7		0.3
Income tax expense		2.1			7.9			22.0		39.3
Non-GAAP adjusted EBITDA	$	32.3		$	29.7		$	141.2	$	134.4

	Net Sales for the Three Months
	Ended September 30,
Reporting unit	2017		2016		$ Change			% Change
	(in millions, except percentages)
Capital Markets	$	93.8	$	98.4	$	(4.6	)		(4.7	%)
Investment Markets		81.7		84.1		(2.4	)		(2.9	%)
Language Solutions and other		10.6		9.8		0.8			8.2	%
Total U.S.	$	186.1	$	192.3	$	(6.2	)		(3.2	%)

	Net Sales for the Nine Months
	Ended September 30,
Reporting unit	2017		2016		$ Change			% Change
	(in millions, except percentages)
Capital Markets	$	349.8	$	369.5	$	(19.7	)		(5.3	%)
Investment Markets		276.0		263.7		12.3			4.7	%
Language Solutions and other		32.4		29.2		3.2			11.0	%
Total U.S.	$	658.2	$	662.4	$	(4.2	)		(0.6	%)

	Debt Maturity Schedule
	Total		2017		2018		2019		2020		2021		Thereafter
Notes ^(a)	$	300.0	$	—	$	—	$	—	$	—	$	—	$	300.0
Borrowings under the Term Loan Credit Facility ^(b)		200.0		—		—		—		—		—		200.0
Borrowings under the Revolving Facility		—		—		—		—		—		—		—
Total	$	500.0	$	—	$	—	$	—	$	—	$	—	$	500.0


Period	Total Number of Shares Purchased		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 (a)
January 1, 2023 - January 31, 2023		7,854	$	39.46		7,854		123,982,246
February 1, 2023 - February 28, 2023		2,828		38.32		2,828		123,873,889
March 1, 2023 - March 31, 2023		429,849		41.54		22,886		122,989,125
Total		440,531	$	41.48		33,568


~~2.1~~ 3.1			~~Separation and Distribution Agreement, dated as of September 14, 2016, by and among R. R. Donnelley & Sons Company, LSC Communications, Inc. and Donnelley Financial Solutions, Inc.~~ ~~(the “Separation Agreement”) (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)~~

~~2.2~~			Transition Services Agreement, dated as of September 14, 2016, between Donnelley Financial Solutions, Inc. and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

~~2.3~~			~~Transition Services Agreement, dated as of September 14, 2016, between LSC Communications, Inc. and Donnelley Financial Solutions, Inc.~~ ~~(incorporated by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)~~

~~2.4~~			Tax Disaffiliation Agreement, dated as of September 14, 2016, between Donnelley Financial Solutions, Inc. and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

~~2.5~~			~~Patent Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons Company~~ ~~(incorporated by reference to Exhibit 2.5 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)~~

~~2.6~~			~~Trademark Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons Company~~ ~~(incorporated by reference to Exhibit 2.6 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)~~

~~2.7~~			Data Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.7 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

~~2.8~~			~~Software, Copyright and Trade Secret Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons Company~~ ~~(incorporated by reference to Exhibit 2.8 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)~~

~~3.1~~			Amended and Restated Certificate of Incorporation of Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

3.2			Amended and Restated By-laws of Donnelley Financial Solutions, Inc. ~~(incorporated~~(incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

4.1			~~Stockholder and Registration Rights Agreement, dated as of September 14, 2016, between Donnelley Financial Solutions, Inc. and R. R. Donnelley & Sons Company~~ ~~(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)~~

~~4.2~~			Indenture, dated as of September 30, 2016, among Donnelley Financial Solutions, Inc., the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as Trustee ~~(incorporated~~(incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

~~4.3~~ 4.2			~~Registration Rights~~Description of the Donnelley Financial Solutions, Inc. Securities Registered under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K dated December 31, 2019, filed on February 26, 2020)

10.1			Amended and Restated Credit Agreement dated as of ~~September 30, 2016,~~May 27, 2021, by and among Donnelley Financial Solutions, Inc., the subsidiary guarantors party thereto and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and MUFG Securities Americas Inc., as Representatives (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

~~10.1~~			~~Credit Agreement, dated as of September 30, 2016, among Donnelley Financial Solutions, Inc., as Borrower,~~ the lenders party thereto and JPMorgan Chase Bank, N.A., as ~~Administrative Agent~~ ~~(incorporated~~administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated ~~September 30, 2016,~~May 27, 2021, filed on October 3, 2016)*June 1, 2021)
~~10.2~~			Amendment No. 1 to Credit Agreement, dated as of October 2, 2017, among Donnelley Financial Solutions, Inc., as Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (filed herewith)
~~10.3~~10.2			2016 Donnelley Financial Solutions, Inc. Performance Incentive Plan ~~(incorporated~~(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.4~~10.3			Amended and Restated Donnelley Financial Solutions, Inc. 2016 Performance Incentive Plan ~~(incorporated~~(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 18, 2017, filed on May 23, 2017)*
~~10.5~~
10.4			Amendment to the Donnelley Financial Solutions, Inc. Amended and Restated 2016 Performance Incentive Plan dated May 20, 2019 (incorporated herein by reference to Appendix A of the Company’s definitive proxy statement on Schedule 14A (file No. 001-37728) filed on April 22, 2019)*

10.5			Amendment to Amended and Restated Donnelley Financial Solutions, Inc. 2016 Performance Incentive Plan dated June 27, 2019 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 10-Q dated June 30, 2019, filed on August 1, 2019)*

10.6			Donnelley Financial Solutions, Inc. Non-Employee Director Compensation Plan ~~(incorporated~~(incorporated by reference to Exhibit ~~10.3~~10.6 to the ~~Company’s Current~~Company's Annual Report on Form ~~8-K~~10-K dated ~~September 30, 2016,~~December 31, 2021, filed on ~~October 3, 2016)~~February 22, 2022)*
~~10.6~~
10.7			Policy on Retirement Benefits, Phantom Stock Grants and Stock Options for Directors (incorporated by reference to Exhibit 10.1 to R.R Donnelley & Sons Company Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, filed on August 6, 2008)*

~~10.7~~10.8			Donnelley Financial Solutions, Inc. Nonqualified Deferred Compensation Plan, dated as of September 22, 2016 ~~(incorporated~~(incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.8~~10.9			Donnelley Financial Unfunded Supplemental Pension Plan effective October 1, 2016 (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.9~~10.10			Donnelley Financial Solutions, Inc. Amended and Restated Executive Severance Plan ~~(incorporated~~(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated ~~May 30, 2017,~~July 15, 2020, filed on ~~June 5, 2017)~~July 20, 2020)*
~~10.10~~


10.11	Letter Agreement to Employment Agreement, dated as of April 20, 2018, between the Company and Daniel N. Leib (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 10, 2018, filed on April 16, 2018)*

10.12	Amended and Restated Employment Agreement, dated as of July 13, 2017, between the Company and Daniel N. Leib (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 13, 2017, filed on July 14, 2017)*
10.13
~~10.11~~		~~Assignment of Employment Agreement and Acceptance of Assignment,~~Amendment dated as of ~~September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company~~July 15, 2020 to Amended and ~~Thomas F. Juhase~~ (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.12~~		~~Waiver of Severance Benefits,~~Restated Employment Agreement dated as of ~~June 1,~~July 13, 2017 ~~by and~~ between ~~Thomas F. Juhase and~~ the Company ~~(incorporated~~and Daniel N. Leib (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated ~~May 30, 2017,~~July 15, 2020, filed on ~~June 5, 2017)~~July 20, 2020)*
~~10.13~~
10.14	Assignment of Employment Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and David A. Gardella (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.14~~10.15	Waiver of Severance Benefits, dated as of June 1, 2017, by and between David A. Gardella and the Company ~~(incorporated~~(incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated May 30, 2017, filed on June 5, 2017)*
~~10.15~~
10.16	Assignment of Severance Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and Jennifer B. Reiners (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.16~~10.17	Employment Agreement, dated as of March 21, 2016, between R.R. Donnelley & Sons Company and Craig Clay (incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K dated December 31, 2021, filed on February 22, 2022)*

10.18	Waiver of Severance Benefits, dated as of June 16, 2017, by and between Craig Clay and Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K dated December 31, 2021, filed on February 22, 2022)*

10.19	Employment Agreement, dated as of June 9, 2010, between R.R. Donnelley & Sons Company and Eric Johnson (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K dated December 31, 2021, filed on February 22, 2022)*

10.20	Waiver of Severance Benefits, dated as of June 19, 2017, by and between Eric Johnson and Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K dated December 31, 2021, filed on February 22, 2022)*

10.21	Waiver of Severance Benefits, dated as of June 1, 2017, by and between Jennifer B. Reiners and the Company ~~(incorporated~~(incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated May 30, 2017, filed on June 5, 2017)*
~~10.17~~		Written Description of the 2016 Annual Incentive Plan of the Company with respect to the period from October 1, 2016 to December 31, 2016 (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.18~~10.22	~~2017~~Donnelley Financial Solutions Annual Incentive Plan (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.19~~		~~Form~~10.1 of Founders Award (Restricted Stock) Agreement (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.20~~		Form of Performance Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2017, filed on May 4, 2017)*

~~10.21~~		~~Form of Amendment to Performance Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.5 to~~ the Company’s Current Report on Form 8-K dated ~~May 30, 2017,~~March 2, 2018, filed on ~~June 5, 2017)~~March 13, 2018)*
~~10.22~~
10.23	Form of Performance Share Unit Award Agreement (incorporated by reference to Exhibit ~~10.17~~10.22 to the Company’s Annual Report on Form 10-K dated December 31, 2017, filed on February 28, 2018)*

10.24	Form of Performance Share Unit Award Agreement (for 2019) (incorporated by reference to Exhibit 10.25 to the Company’s Quarterly Report on Form 10-Q dated March 31, ~~2017,~~2019, filed on May ~~4, 2017)~~2, 2019)*


~~10.23~~
10.25	Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2017, filed on May 4, 2017)*

~~10.24~~10.26	Form of Restricted Stock Unit Award (2021) (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K dated December 31, 2020, filed on February 25, 2021)*

10.27	Form of Stock Option Award Agreement (incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2017, filed on May 4, 2017)*

10.28
~~10.25~~		Form of Performance ~~Share Unit~~Cash Award ~~Agreement (for 2015) converted from R. R. Donnelley & Sons Company to the Company pursuant to the Separation~~ Agreement (incorporated by reference to Exhibit ~~10.19~~10.1 to the ~~R.R. Donnelley & Sons Company Quarterly~~Company’s Current Report on Form ~~10-Q for the quarter ended~~8-K dated March ~~31, 2015,~~2, 2020, filed on ~~May 7, 2015)~~March 6, 2020)*



10.29
~~10.26~~		Form of Performance Restricted Stock Unit Award Agreement ~~for certain executive officers (for 2015 and 2016) converted from R. R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement~~(2021) (incorporated by reference to Exhibit 10.12 to the R.R. Donnelley & Sons Company Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed on May 7, 2015)*

~~10.27~~		~~Form of Cash Award Agreement (for 2014) converted from R. R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.21~~10.31 to the Company’s Annual Report on Form 10-K dated December 31, ~~2016,~~2020, filed on February ~~28, 2017)~~25, 2021)*

~~10.28~~10.30	Form of ~~Cash~~Director Restricted Stock Unit Award ~~Agreement (for 2015) converted from R. R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement~~(deferral election) (incorporated by reference to Exhibit ~~10.22~~10.30 to the ~~Company’s~~Company's Annual Report on Form 10-K dated December 31, ~~2016,~~2021, filed on February ~~28, 2017)~~22, 2022)*

~~10.29~~10.31	Form of Cash Award Agreement (for 2016) converted from R. R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.30~~		Form of Amendment to Cash Retention Awards (for 2014) converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.1 to the R.R. Donnelley & Sons Company Current Report on Form 8-K dated March 2, 2016, filed on March 2, 2016)*

~~10.31~~		Agreement regarding title and retention bonus for Thomas Juhase dated March 21, 2016 converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.32~~		Form of Director Restricted Stock Unit Award (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.33~~10.32	Form of Restricted Stock Unit Award Agreement for directors converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.21 to the R.R. Donnelley & Sons Company Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed on March 14, 2005)*

~~10.34~~10.33	Form of Restricted Stock Unit Award Agreement for directors converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.25 to the R.R. Donnelley & Sons Company Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed on February 27, 2008)*

~~10.35~~10.34	Form of Restricted Stock Unit Award Agreement for directors converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.23 to the R.R. Donnelley & Sons Company Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed on February 25, 2009)*

~~10.36~~10.35	Form of Amendment to Director Restricted Stock Unit Awards converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.22 to the R.R. Donnelley & Sons Company Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed on February 25, 2009)*

~~10.37~~10.36	Form of Amendment to Director Restricted Stock Unit Awards dated May 21, 2009 converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.23 to the R.R. Donnelley & Sons Company Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, filed on August 5, 2009)*

~~10.38~~10.37	Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q dated September 30, 2016, filed on November 9, 2016)

~~14.1~~10.38	Real Estate Sale Agreement, dated as of August 30, 2022, between Donnelley Financial, LLC and Aspirant Partners, LLC (incorporated by reference to Exhibit 10.42 to the Company's Quarterly Report on Form 10-Q dated September 30, 2022, filed on November 2, 2022)

10.39	First Amendment to Real Estate Sale Agreement, dated as of November 28, 2022, between Donnelley Financial, LLC and Aspirant Partners, LLC (incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K dated December 31, 2022, filed on February 21, 2023)

10.40	Second Amendment to Real Estate Sale Agreement, dated as of January 9, 2023, between Donnelley Financial, LLC and Aspirant Partners, LLC (incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K dated December 31, 2022, filed on February 21, 2023)

14.1	Code of Ethics for the Chief Executive Officer and Senior Financial Officers (incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)

~~21.1~~		~~Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)~~
31.1
~~31.1~~		Certification by Daniel N. Leib, President and Chief Executive Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)

31.2	Certification by David A. Gardella, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)

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


32.2		Certification by David A. Gardella, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith)

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101


	DONNELLEY FINANCIAL SOLUTIONS, INC.

~~By:~~	By:	/s/ DAVID A. GARDELLA
		David A. Gardella
		Executive Vice President and Chief Financial Officer

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