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 every Interactive Data File required to be submitted 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 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 26, 2020, 71.4~~August 2, 2021, 72.8 million shares of common stock were outstanding.

	September 30,			December 31,			June 30,			December 31,
	2020			2019			2021			2020
ASSETS
Cash and cash equivalents	$	414.8		$	191.9		$	237.2		$	288.8
Receivables, less allowances for credit losses of $17.3 in 2020 (2019 - $14.3)		971.1			1,041.0
Receivables, less allowances for credit losses of $10.7 in 2021 (2020 - $15.9)								926.3			1,009.2
Inventories (Note 4)		323.7			301.8			348.7			302.1
Assets held-for-sale		149.2			200.6			21.0			23.1
Prepaid expenses and other current assets		144.4			95.6			156.5			133.4
Total current assets		2,003.2			1,830.9			1,689.7			1,756.6
Property, plant and equipment-net (Note 5)		438.0			499.4			420.0			438.8
Goodwill (Note 6)		407.5			404.5			408.4			410.6
Other intangible assets-net (Note 6)		73.8			88.8			59.2			68.8
Deferred income taxes		67.0			57.8			73.5			78.5
Operating lease assets		218.1			196.7			210.2			223.8
Other noncurrent assets		220.3			252.0			139.9			153.8
Total assets	$	3,427.9		$	3,330.1		$	3,000.9		$	3,130.9
LIABILITIES
Accounts payable	$	707.0		$	798.9		$	734.4		$	804.5
Accrued liabilities and other		333.2			311.3			304.4			351.2
Short-term operating lease liabilities		71.3			64.6			68.9			73.4
Short-term and current portion of long-term debt (Note 15)		144.4			71.2			79.3			61.1
Liabilities held-for-sale		81.1			92.1
Total current liabilities		1,337.0			1,338.1			1,187.0			1,290.2
Long-term debt (Note 15)		1,876.9			1,747.2			1,462.6			1,442.0
Pension liabilities		100.7			113.6			80.3			89.5
Other postretirement benefits plan liabilities		57.7			61.7			52.2			55.8
Long-term income tax liability		68.2			75.8			60.3			68.3
Long-term operating lease liabilities		153.0			136.4			147.8			156.9
Other noncurrent liabilities		289.2			227.6			254.5			272.0
Total liabilities		3,882.7			3,700.4			3,244.7			3,374.7
Commitments and Contingencies (Note 14)
EQUITY (Note 10)
RRD stockholders' equity
Preferred stock, $1.00 par value
Authorized: 2.0 shares; Issued: NaN		—			—			—			—
Common stock, $0.01 par value
Authorized: 165.0 shares;
Issued: 89.0 shares in 2020 and 2019		0.9			0.9
Issued: 89.0 shares in 2021 and 2020								0.9			0.9
Additional paid-in-capital		3,262.5			3,348.0			3,030.0			3,263.6
Accumulated deficit		(2,418.3	)		(2,336.8	)		(2,251.4	)		(2,240.7	)
Accumulated other comprehensive loss		(182.9	)		(176.2	)		(142.9	)		(153.9	)
Treasury stock, at cost, 17.6 shares in 2020 (2019 - 18.1 shares)		(1,130.2	)		(1,219.6	)
Treasury stock, at cost, 16.2 shares in 2021 (2020 - 17.6 shares)								(893.9	)		(1,127.6	)
Total RRD stockholders' equity		(468.0	)		(383.7	)		(257.3	)		(257.7	)
Noncontrolling interests		13.2			13.4			13.5			13.9
Total equity		(454.8	)		(370.3	)		(243.8	)		(243.8	)
Total liabilities and equity	$	3,427.9		$	3,330.1		$	3,000.9		$	3,130.9

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Net sales		1,191.3			1,417.2			3,417.7			4,044.0			1,145.6			1,009.6			2,318.7			2,226.5
Cost of sales		943.6			1,132.9			2,729.4			3,259.4			928.1			817.3			1,877.1			1,785.9
Gross profit		247.7			284.3			688.3			784.6			217.5			192.3			441.6			440.6
Selling, general and administrative expenses (exclusive of depreciation and amortization)		138.0			168.2			436.7			522.7			143.8			138.8			297.1			298.7
Restructuring, impairment and other expense (income) -net (Note 7)		54.2			(2.3	)		93.8			30.7
Restructuring, impairment and other expense -net (Note 7)														9.7			28.4			15.5			39.6
Depreciation and amortization		36.2			42.0			112.3			121.5			32.9			36.9			66.7			76.1
Other operating expense		3.4			5.4			15.5			3.3			2.9			7.2			9.0			12.1
Income from operations		15.9			71.0			30.0			106.4
Income (loss) from operations														28.2			(19.0	)		53.3			14.1
Interest expense-net		34.3			37.4			102.7			115.6			38.5			34.6			69.0			68.5
Loss on debt extinguishment														6.2			0.4			6.2			0.2
Investment and other income-net		(3.6	)		(4.6	)		(10.8	)		(11.3	)		(4.9	)		(3.4	)		(9.7	)		(7.2	)
Loss on debt extinguishment		0.2			0.8			0.4			0.8
(Loss) income from continuing operations before income taxes		(15.0	)		37.4			(62.3	)		1.3
Loss from continuing operations before income taxes														(11.6	)		(50.6	)		(12.2	)		(47.4	)
Income tax (benefit) expense		(5.9	)		44.3			(3.0	)		9.2			(2.4	)		6.6			(1.3	)		2.8
Net loss from continuing operations		(9.1	)		(6.9	)		(59.3	)		(7.9	)		(9.2	)		(57.2	)		(10.9	)		(50.2	)
Loss on sale of discontinued operations, net of tax		—			—			(6.9	)		—
Income (loss) from discontinued operations, net of tax (Note 2)		0.4			19.8			(12.6	)		4.9
Net income (loss) from discontinued operations		0.4			19.8			(19.5	)		4.9
Net (loss) income		(8.7	)		12.9			(78.8	)		(3.0	)
(Loss) gain on sale of discontinued operations, net of tax														—			(1.3	)		0.6			(6.3	)
Gain (loss) from discontinued operations, net of tax														—			1.3			—			(13.6	)
Net income (loss) from discontinued operations (Note 2)														—			—			0.6			(19.9	)
Net loss														(9.2	)		(57.2	)		(10.3	)		(70.1	)
Less: income attributable to noncontrolling interests		0.2			0.3			0.3			0.2			0.2			—			0.4			0.1
Net (loss) income attributable to RRD common stockholders	$	(8.9	)	$	12.6		$	(79.1	)	$	(3.2	)
Net loss attributable to RRD common stockholders													$	(9.4	)	$	(57.2	)	$	(10.7	)	$	(70.2	)

Basic net (loss) earnings per share attributable to RRD common stockholders (Note 11):
Basic and diluted net (loss) earnings per share attributable to RRD common stockholders (Note 11):
Continuing Operations	$	(0.13	)	$	(0.10	)	$	(0.83	)	$	(0.11	)	$	(0.13	)	$	(0.79	)	$	(0.16	)	$	(0.70	)
Discontinued Operations	$	0.01		$	0.28		$	(0.27	)	$	0.07		$	—		$	—		$	0.01		$	(0.28	)
Net (loss) earnings attributable to RR Donnelley stockholders	$	(0.12	)	$	0.18		$	(1.10	)	$	(0.04	)

Diluted net (loss) earnings per share attributable to RRD common stockholders (Note 11):
Continuing Operations	$	(0.13	)	$	(0.10	)	$	(0.83	)	$	(0.11	)
Discontinued Operations	$	0.01		$	0.28		$	(0.27	)	$	0.07
Net (loss) earnings attributable to RR Donnelley stockholders	$	(0.12	)	$	0.18		$	(1.10	)	$	(0.04	)
Net loss attributable to RR Donnelley stockholders													$	(0.13	)	$	(0.79	)	$	(0.15	)	$	(0.98	)

Weighted average number of common shares outstanding:
Basic		72.4			71.4			72.1			71.2			73.3			72.2			73.0			71.9
Diluted		72.4			71.4			72.1			71.2			73.3			72.2			73.0			71.9

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Net (loss) income	$	(8.7	)	$	12.9		$	(78.8	)	$	(3.0	)
Net loss													$	(9.2	)	$	(57.2	)	$	(10.3	)	$	(70.1	)

Other comprehensive income (loss), net of tax (Note 12):
Translation adjustments		17.4			(19.9	)		4.2			(21.9	)		10.0			6.8			(0.2	)		(13.2	)
Adjustments for net periodic pension and postretirement benefits plan cost		0.8			(0.2	)		2.3			(0.6	)		1.0			0.7			2.1			1.5
Changes in fair value of derivatives		0.3			—			(13.0	)		—			6.5			(1.3	)		9.0			(13.3	)
Other		—			0.6			—			2.1
Other comprehensive income (loss)		18.5			(19.5	)		(6.5	)		(20.4	)		17.5			6.2			10.9			(25.0	)
Comprehensive income (loss)		9.8			(6.6	)		(85.3	)		(23.4	)		8.3			(51.0	)		0.6			(95.1	)
Less: comprehensive income (loss) attributable to non-controlling interests		0.6			(0.1	)		0.5			(0.1	)		0.3			—			0.3			(0.1	)
Comprehensive income (loss) attributable to RRD common stockholders	$	9.2		$	(6.5	)	$	(85.8	)	$	(23.3	)	$	8.0		$	(51.0	)	$	0.3		$	(95.0	)

	Nine Months Ended						Six Months Ended
	September 30,						June 30,
	2020			2019			2021			2020
OPERATING ACTIVITIES
Net loss	$	(78.8	)	$	(3.0	)	$	(10.3	)	$	(70.1	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment charges and other-net		22.3			0.5			1.4			20.8
Depreciation and amortization		116.6			126.2			66.7			79.0
Provision for credit losses		7.4			6.9
(Benefit) provision for credit losses								(3.2	)		5.9
Share-based compensation		4.5			9.3			2.6			3.2
Deferred income taxes		(3.9	)		9.8			4.9			(3.1	)
Net pension and other postretirement benefits plan income		(10.1	)		(12.1	)		(9.4	)		(6.7	)
Loss (gain) on disposition of businesses and other assets		9.3			(15.3	)
(Gain) loss on disposition of businesses and other assets								(4.2	)		9.4
Loss on debt extinguishment								6.2			0.2
Other		6.5			11.7			5.9			1.1
Changes in operating assets and liabilities:
Accounts receivable-net		57.7			17.7			86.2			174.6
Inventories		(21.7	)		(21.1	)		(45.7	)		(9.1	)
Prepaid expenses and other current assets		(6.5	)		(11.4	)		(11.8	)		(4.0	)
Accounts payable		(91.3	)		(172.3	)		(76.5	)		(188.6	)
Current income taxes		(18.8	)		(41.1	)		(29.1	)		(4.8	)
Accrued liabilities and other		38.3			11.5			(45.9	)		(47.8	)
Pension and other postretirement benefits plan contributions		(6.3	)		(5.1	)		(2.6	)		(4.2	)
Net cash provided by (used in) operating activities		25.2			(87.8	)
Net cash used in operating activities								(64.8	)		(44.2	)
INVESTING ACTIVITIES
Capital expenditures		(54.4	)		(107.4	)		(29.9	)		(38.1	)
Acquisition of business		—			(3.0	)
Disposition of businesses		16.8			10.4			(1.4	)		16.1
Proceeds from sales of investments and other assets		29.7			32.8
Proceeds (payments) related to company-owned life insurance		4.4			(1.3	)
Proceeds from sales of property, plant and equipment								7.5			4.7
Proceeds related to company-owned life insurance								0.1			3.1
Net cash used in investing activities		(3.5	)		(68.5	)		(23.7	)		(14.2	)
FINANCING ACTIVITIES
Payments on other short-term debt		—			(8.0	)
Payments of current maturities and long-term debt		(168.8	)		(221.6	)		(444.6	)		(152.7	)
Proceeds from issuances of long-term debt								451.1			—
Proceeds from credit facility borrowings		578.0			1,061.8			578.0			578.0
Payments on credit facility borrowings		(210.0	)		(897.8	)		(548.0	)		(210.0	)
Debt issuance costs								(7.6	)		—
Dividends paid		(2.1	)		(6.4	)		—			(2.1	)
Payments of withholding taxes on share-based compensation		(0.6	)		(0.9	)		(2.5	)		(0.6	)
Other financing activities		(1.7	)		(1.0	)		(1.2	)		(1.5	)
Net cash provided by (used in) financing activities		194.8			(73.9	)
Net cash provided by financing activities								25.2			211.1
Effect of exchange rate on cash, cash equivalents and restricted cash		2.1			(6.3	)		1.9			(4.3	)
Net increase (decrease) in cash, cash equivalents and restricted cash		218.6			(236.5	)
Net (decrease) increase in cash, cash equivalents and restricted cash								(61.4	)		148.4
Cash, cash equivalents and restricted cash at beginning of year		223.8			403.6			357.6			223.8
Cash, cash equivalents and restricted cash at end of period	$	442.4		$	167.1		$	296.2		$	372.2

Supplemental cash flow disclosures:

Operating cash flows provided by discontinued operations	$	15.7		$	10.5		$	—	$	16.4
Investing cash flows used in discontinued operations	$	(1.3	)	$	(2.8	)	$	—	$	(0.9	)

The accompanying unaudited condensed consolidated interim financial statements include the accounts of R.R. Donnelley & Sons Company and its subsidiaries (“RRD,” the “Company,” “we,” “us,” and “our”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods and should be read in conjunction with the consolidated financial statements and the related notes thereto included in our latest Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 filed with the SEC on February ~~26, 2020.~~24, 2021. Operating results for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 are not ~~necessarily~~ indicative of the results that may be expected for the fiscal year ending December 31, ~~2020.~~2021. All significant intercompany transactions have been eliminated in consolidation. These unaudited condensed consolidated interim financial statements include estimates and assumptions of management that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these estimates.

~~Due~~In 2020, to the relationship of our various jurisdictional projections of full-year pre-tax earnings and income tax expense, as well as the projected impact of permanent tax differences and other items, our historic approach of using an estimated full-year world-wide effective income tax rate to determine interim period tax expense produced an income tax provision for the current year-to-date period that was not meaningful because tax expense calculated under the historical approach was not reflective of what taxes would be due and payable based on nine-month year to date pre-tax earnings. Accordingly, we calculated year-to-date fiscal 2020 tax expense based on domestic year-to-date earnings before tax to determine an estimate of the actual U.S. tax liability while using an estimated full-year international effective income tax ratefocus on our ~~international year-to-date earnings~~core product and service offerings, we completed our plan to ~~determine interim period tax expense for~~exit our ~~international jurisdictions. The third quarter tax expense is the fiscal year-to-date tax expense computed as~~Logistics Business. This business included Print Logistics, which was disposed of ~~September 30, 2020 less tax expense recognized through the second quarter~~.

~~Beginning~~on July 2, 2018; Courier Logistics, which was disposed of on March 2, 2020; DLS Worldwide, which was disposed of November 2, 2020; and International Logistics which was disposed of on November 3, 2020. These businesses were included in the ~~third quarter~~Business Services segment and primarily provided logistics services to a broad range of ~~2020, we~~clients in the United States and globally. The financial results of these businesses have ~~reflected the Logistics Courier business (through the date of sale), the DLS Worldwide business,~~been excluded from continuing operations and ~~the International Logistics business as discontinued operations~~segment results for all periods presented ~~in the Condensed Consolidated Statements of Operations. Unless~~unless otherwise ~~noted, amounts and disclosures throughout these Notes~~noted. Refer toNote 2 –Discontinued Operations to our Condensed Consolidated Financial Statements ~~relate to the Company's continuing operations.~~

~~We have historically presented Sales and Cost of Sales~~ for products and services separately in the Condensed Consolidated Statement of Operations and related disclosures. Sales from services became immaterial in relation to Net Sales in the current quarter when adjusted by the effect of the activity of the Logistics business now presented in discontinued operations. Accordingly, beginning in the third quarter, we have presented sales from products and services together within Net Sales in the Condensed Consolidated Statement of Operations and related disclosures. additional information.

The following table provides a reconciliation of cash, cash equivalents and restricted cash at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows.

	September 30, 2020		December 31, 2019		June 30, 2021		December��31, 2020
Cash and cash equivalents	$	414.8	$	191.9	$	237.2	$	288.8
Restricted cash - current^(a)		27.4		32.9		58.9		62.6
Restricted cash - noncurrent^(b)		0.2		0.1		0.1		6.2
Total cash, cash equivalents and restricted cash	$	442.4	$	224.9	$	296.2	$	357.6

Cash payments for income taxes were ~~$29.5~~$26.3 million and ~~$54.5~~$14.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Cash refunds for income taxes were ~~$4.6~~$0.6 million and ~~$7.7~~$2.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Income taxes receivable of ~~$16.3~~$35.9 million and ~~$12.0~~$16.3 million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, are included within Prepaid expenses and other current assets.

We recognize an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on credit losses expected to arise over the life of the asset’s contractual term, which includes consideration of prepayments. Assets are written off when we determine that such financial assets are deemed uncollectible and are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the necessary reserve at the balance sheet date. We pool financial assets based on similar risk characteristics to estimate expected credit losses. We estimate expected credit losses on financial assets individually when those assets do not share similar risk characteristics. We closely monitor our accounts receivable including timely account reconciliations, detailed reviews of past due accounts, updated credit limits, and monthly analysis of the adequacy of our reserve for credit losses.

We utilize a loss rate approach to determine lifetime expected credit losses for our financial assets. This method is used for calculating an estimate of losses based primarily on our historical loss experience. In determining loss rates, we evaluate information related to historical losses, adjusted for current conditions and further adjusted for the period of time that we can reasonably forecast. We have concluded that we can reasonably support a forecast period for the contractual life of our financial assets. Qualitative and quantitative adjustments related to current conditions and the reasonable and supportable forecast period consider the following: the customer or vendor’s creditworthiness, changes in our policy and procedures to establish customer credit limits, changes in the payment terms of receivables, existence and effect of any concentration of credit and changes in the level of such concentrations, and the effects of other external forces such as the current and forecasted direction of the economic and business environment. We have considered the current and expected economic and market conditions as a result of COVID-19 in determining credit loss expense for the period ended ~~September 30, 2020~~.

~~The allowance for credit losses as of December 31, 2019 and September 30, 2020, was as follows:~~

~~Recoveries, notes receivables and rebates from vendors in the~~ ~~nine months ended September 30, 2020~~ ~~were immaterial.~~

~~On September 14,~~In the fourth quarter of 2020, we ~~entered into a definitive agreement~~completed our plan to ~~sell DLS Worldwide, which is a portion of~~exit our ~~broader~~ Logistics business, ~~and~~which was a component of the Business Services reporting ~~segment for $225 million cash, subject~~segment. The Logistics business was comprised of DLS Worldwide, International Logistics, Print Logistics and Courier Logistics. In November 2020, we sold our DLS Worldwide and International Logistics businesses as part of our strategic shift to ~~a customary~~exit non-core businesses in order to pursue portfolio optimization and to reduce debt. As part of this strategic shift, we previously sold Print Logistics in July 2018 and Courier Logistics in March 2020. During the six months ended June 30, 2021, we finalized working capital ~~adjustment~~adjustments and ~~an escrow~~settled certain other contingencies related to the divested businesses, the impact of ~~$22.5 million. We expect that the transaction will close~~which is included in the ~~fourth quarter~~Gain on sale of ~~2020 after completion~~the discontinued operations, net of ~~certain closing conditions. We expect to enter~~tax.

As part of the divestitures, we entered into ~~a transaction support agreement~~transition services agreements with the ~~buyer~~buyers to assist them in the transition of certain functions, including, but not limited to, information technology, finance, and ~~HR.~~human resources. Further, we ~~plan to enter a~~entered into several commercial ~~agreement~~agreements whereby we ~~will~~ continue to receive logistics services from the divested business.

~~The sale of DLS Worldwide~~Our involvement with the divested businesses is part of our strategy to exit non-core businesses in order to pursue portfolio optimization and to reduce debt. As part of our plan, we previously sold Print Logistics in July 2018 and Courier Logistics in March 2020. In October 2020 we reached agreement to sell our International Logistics product line and expect to close by December 31, 2020. This will complete the exit of our Logistics business.

~~During the third quarter of 2020, we classified the assets and liabilities of DLS Worldwide and International Logistics as held for sale on the Condensed Consolidated Balance Sheet.~~

~~Beginning~~not material in the ~~third quarter of 2020, we~~three or six-month periods ended June 30, 2021.

We have reflected the Courier Logistics ~~Courier~~ business, ~~(through the date of sale),~~ the DLS Worldwide business, and the International Logistics business, as discontinued operations for all periods presented in the Condensed Consolidated Statements of Operations.

Results of discontinued operations for the three and six months ended June 30, 2020 were as follows:

	Three Months Ended						Nine Months Ended						Three Months Ended			Six Months Ended
	September 30,						September 30,						June 30,			June 30,
	2020			2019			2020			2019			2020			2020
Net sales	$	190.5		$	217.3		$	558.5		$	652.1		$	163.1		$	368.0
Cost of sales		(164.1	)		(190.7	)		(484.1	)		(569.3	)		(140.6	)		(320.0	)
Selling, general, administrative and other operating expenses		(21.3	)		(23.8	)		(69.7	)		(71.1	)		(18.5	)		(39.3	)
Restructuring, impairment and other expense		(0.2	)		(0.1	)		(21.0	)		(0.1	)		(0.1	)		(20.8	)
Operating income (loss) from discontinued operations		4.9			2.7			(16.3	)		11.6			3.9			(12.1	)
Income tax expense (benefit)		4.5			(17.1	)		3.2			6.7
Net income (loss) from discontinued operations	$	0.4		$	19.8		$	(19.5	)	$	4.9
Income tax expense														(2.6	)		(1.5	)
Net gain (loss) from discontinued operations													$	1.3		$	(13.6	)

~~Sales~~Net sales includes sales from the Logistics ~~business~~businesses to RRD which were previously eliminated in consolidation and have been ~~recasted~~recast and are now shown as external sales within the financial results of discontinued operations above. ~~The~~These net sales were ~~$11.0~~$10.6 million and ~~$33.8~~$22.8 million ~~and $15.2 million and $46.1 million respectively~~ for the three and ~~nine~~six months ended ~~September~~June 30, 2020, respectively.

~~Assets and liabilities~~other expenses included $20.6 million of ~~discontinued operations presented~~non-cash charges related to impairment of goodwill recorded in the ~~Condensed Consolidated Balance Sheets as of September~~six months ended June 30, ~~2020 and December 31, 2019 include the following:~~

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

	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Commercial print		347.7	$	442.9	$	986.6	$	1,278.8		340.3	$	275.5	$	676.8	$	638.9
Packaging		193.6		182.1		459.1		484.2		179.7		150.4		354.1		265.5
Labels										131.3		113.7		260.0		235.3
Direct marketing		125.9		193.5		416.8		479.0		113.6		108.0		244.5		290.8
Labels		124.7		123.9		359.9		364.1
Digital print and fulfillment		104.4		122.5		302.6		347.2		101.7		84.7		199.2		198.3
Statements		104.3		134.0		333.1		417.1		99.3		101.9		217.8		228.8
Supply chain management		77.4		69.8		212.0		222.4		67.3		64.9		140.0		134.6
Forms		48.2		60.0		149.2		181.6		48.8		48.6		97.6		101.0
Business process outsourcing		40.9		61.1		125.5		189.3		42.9		40.6		85.4		84.6
Digital and creative solutions		24.2		27.4		72.9		80.3		20.7		21.3		43.3		48.7
Total net sales	$	1,191.3	$	1,417.2	$	3,417.7	$	4,044.0	$	1,145.6	$	1,009.6	$	2,318.7	$	2,226.5

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

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

Contract liabilities primarily relate to client advances received prior to completion of performance obligations. Reductions in contract liabilities are a result of our completion of performance obligations.

Revenue recognized during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 from amounts included in contract liabilities at the beginning of the period was approximately ~~$16.6~~$11.5 million.

The components of inventories, net of excess and obsolescence reserves for raw materials and finished goods, at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 were as follows:

	September 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
Raw materials and manufacturing supplies	$	150.2		$	139.4		$	166.2		$	147.3
Work in process		71.1			64.6			72.6			64.8
Finished goods		119.4			116.4			128.9			107.9
LIFO reserve		(17.0	)		(18.6	)		(19.0	)		(17.9	)
Total inventories	$	323.7		$	301.8		$	348.7		$	302.1

The components of property, plant and equipment at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 were as follows:

	September 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
Land	$	38.0		$	47.8		$	37.2		$	38.2
Buildings		361.8			379.5			364.4			361.0
Machinery and equipment		1,671.2			1,702.0			1,688.0			1,703.1
		2,071.0			2,129.3			2,089.6			2,102.3
Less: Accumulated depreciation		(1,633.0	)		(1,629.9	)		(1,669.6	)		(1,663.5	)
Total property, plant and equipment-net	$	438.0		$	499.4		$	420.0		$	438.8

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 depreciation expense was ~~$24.1~~$22.6 million and ~~$77.8~~$46.0 million, respectively. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 depreciation expense was ~~$30.0~~$25.4 million and ~~$85.2~~$53.6 million, ~~respectively.~~

We include assets held for sale for continuing operations in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. The assets held for sale balance was $21.9 million and $1.5 million as of September 30, 2020 and December 31, 2019, respectively.

During the fourth quarter of 2017, we entered into an agreement to sell a printing facility in Shenzhen, China and transfer the related land use rights. As of ~~September~~June 30, ~~2020~~2021, we have received deposits in accordance with the terms of the agreement of approximately ~~$122.3~~$123.3 million which isare recorded in other noncurrent liabilities on the Condensed Consolidated Balance Sheets. As of ~~September~~June 30, ~~2020,~~2021, the carrying ~~cost~~value of the building and land use rights is recorded in other noncurrent assets and is not material. ~~Additional~~In accordance with the agreement, additional scheduled deposits ~~will~~are required to be paid to us ~~in accordance~~ with the ~~agreement.~~final payment due in 2022. The closing date of the final sales transaction is uncertain at this time due to the uncertainty around the timing of the regulatory process including government approvals. Gross proceeds from the sale are expected to be approximately $250.0 million, subject to changes in the exchange ~~rate,~~rate.~~and we expect the transaction to close in 2022 after closing conditions are satisfied and government approvals are obtained.~~ ~~Our contract with the buyer requires them to pay the final installment in 2022 even if the government’s approval is further delayed.~~ If the buyer fails to comply with terms of the agreement or terminates for any reason, the Company is entitled to retain 30% of the purchase price as liquidated damages.

The carrying amount of goodwill at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 were as follows:

	Business Services			Marketing Solutions			Total			Business Services			Marketing Solutions			Total
Net book value as of December 31, 2019
Net book value as of December 31, 2020
Goodwill	$	2,059.1		$	519.5		$	2,578.6		$	2,076.1		$	519.5		$	2,595.6
Accumulated impairment losses		(1,920.0	)		(254.1	)		(2,174.1	)		(1,930.9	)		(254.1	)		(2,185.0	)
Total		139.1			265.4			404.5			145.2			265.4			410.6
Foreign exchange		3.0			—			3.0			(2.2	)		—			(2.2	)
Net book value as of September 30, 2020
Net book value as of June 30, 2021
Goodwill		2,054.6			519.5			2,574.1			2,080.1			519.5			2,599.6
Accumulated impairment losses		(1,912.5	)		(254.1	)		(2,166.6	)		(1,937.1	)		(254.1	)		(2,191.2	)
Total	$	142.1		$	265.4		$	407.5		$	143.0		$	265.4		$	408.4

The components of other intangible assets at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 were as follows:

	September 30, 2020							December 31, 2019							June 30, 2021							December 31, 2020
	Gross							Gross							Gross							Gross
	Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book
	Amount		Amortization			Value		Amount		Amortization			Value		Amount		Amortization			Value		Amount		Amortization			Value

Client relationships	$	413.4	$	(353.3	)	$	60.1	$	410.2	$	(337.1	)	$	73.1	$	414.7	$	(367.3	)	$	47.4	$	417.0	$	(361.1	)	$	55.9
Trade names		30.7		(17.0	)		13.7		31.5		(15.8	)		15.7		28.5		(16.7	)		11.8		29.1		(16.2	)		12.9
Trademarks, licenses and agreements		23.5		(23.5	)		—		23.5		(23.5	)		—		23.2		(23.2	)		—		23.2		(23.2	)		—
Patents		2.0		(2.0	)		—		2.0		(2.0	)		—		2.0		(2.0	)		—		2.0		(2.0	)		—
Total amortizable other intangible assets		469.6		(395.8	)		73.8		467.2		(378.4	)		88.8		468.4		(409.2	)		59.2		471.3		(402.5	)		68.8

Amortization expense for other intangible assets was $4.8 million and ~~$14.5~~$9.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, respectively,~~2021 and was ~~$5.3~~$4.8 million and ~~$16.6~~$9.7 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019, respectively.~~2020.

For the three and six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, we recorded the following net restructuring, impairment and other expenses:

	Three Months Ended										Three Months Ended
	September 30, 2020										June 30, 2020
	Employee		Other Restructuring		Multi-Employer Pension Plan		Impairment and				Employee	Other Restructuring	Multi-Employer Pension Plan	Impairment and
	Terminations		Charges		Charges		Other		Total		Terminations	Charges	Charges	Other	Total
Business Services	$	4.6	$	2.2	$	0.1	$	0.1	$	7.0	$6.4	$1.8	$1.1	$0.4	$9.7
Marketing Solutions		2.2		1.3		0.1		1.1		4.7	1.6	0.5	0.1	—	2.2
Corporate		2.2		3.2		37.1		0		42.5	4.8	11.7	—	—	16.5
Total	$	9.0	$	6.7	$	37.3	$	1.2	$	54.2	$12.8	$14.0	$1.2	$0.4	$28.4

	Three Months Ended														Six Months Ended
	September 30, 2019														June 30, 2020
	Employee			Other Restructuring			Multi-Employer Pension Plan		Impairment and						Employee		Other Restructuring		Multi-Employer Pension Plan		Impairment and
	Terminations			Charges			Charges		Other			Total			Terminations		Charges		Charges		Other			Total
Business Services	$	(0.4	)	$	(0.7	)	$	0.7	$	(4.7	)	$	(5.1	)	$	12.2	$	2.8	$	1.7	$	(1.3	)	$	15.4
Marketing Solutions		(0.1	)		0.1			0.1		—			0.1			2.0		0.5		0.2		—			2.7
Corporate		1.0			1.7			—		—			2.7			6.7		14.8		—		—			21.5
Total	$	0.5		$	1.1		$	0.8	$	(4.7	)	$	(2.3	)	$	20.9	$	18.1	$	1.9	$	(1.3	)	$	39.6

~~For the nine months ended September 30, 2020 and 2019, we recorded the following net restructuring, impairment and other expenses:~~

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, we recorded net restructuring charges of ~~$9.0~~$2.3 million and ~~$29.9~~$3.8 million ~~respectively,~~ for employee termination costs. These charges primarily relate to ~~the closure of the Chilean operations, other~~ announced facility closures and the reorganization of selling, general and administrative functions across each segment. We also incurred ~~$6.7~~$7.6 million and ~~$24.8~~$11.6 million of other restructuring charges ~~primarily consulting charges, and $37.3 million and $39.2 million of multi-employer pension plan (“MEPP”) withdrawal obligation charges~~ during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, respectively. The MEPP charges during the three~~2021, comprised of lease terminations and ~~nine months ended September 30, 2020 included $34.5 million which represents our current estimate of payments we believe we will be required to make with respect to LSC’s MEPP liabilities. Refer to~~ ~~Note 14, Commitment and Contingencies~~ ~~for further discussion.~~environmental costs. We recorded net gains of ~~$0.3~~$1.8 million and ~~$1.8~~$1.4 million on the sale of restructured facilities for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we recorded net restructuring charges of ~~$0.5~~$12.8 million and ~~$19.4~~$20.9 million for employee termination costs. These charges primarily related to the ~~planned relocation~~closure of ~~a printing facility in Shenzhen, China,~~the Chilean operations and other facility closures in the Business Services segment and the reorganization of selling, general and administrative functions across each segment. We also incurred other restructuring charges of ~~$1.1~~$14.0 million and ~~$13.7 million and MEPP withdrawal obligation charges of $0.8 million and $2.2~~$18.1 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019. Additionally, we~~2020 and recorded a net ~~gains~~loss of ~~$4.7~~$0.2 million and ~~$4.6~~a net gain of $1.5 million on the sale of restructured facilities for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

Restructuring and MEPP reserves as of December 31, ~~2019~~2020 and ~~September~~June 30, ~~2020,~~2021, and changes during the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, were as follows:

			Restructuring		Foreign									Restructuring		Foreign
	December 31,		and Other		Exchange and		Cash			September 30,		December 31,		and Other		Exchange and		Cash			June 30,
	2019		Charges		Other		Paid			2020		2020		Charges		Other		Paid			2021
Employee terminations	$	3.5	$	29.9	$	0	$	(24.0	)	$	9.4	$	6.2	$	3.7	$	0.1	$	(4.1	)	$	5.9
MEPP withdrawal obligations		40.5		39.2		0		(7.5	)		72.2		70.2		0.2		—		(21.6	)		48.8
Other		8.5		24.8		0.8		(24.6	)		9.5		12.2		11.6		0.2		(9.2	)		14.8
Total	$	52.5	$	93.9	$	0.8	$	(56.1	)	$	91.1	$	88.6	$	15.5	$	0.3	$	(34.9	)	$	69.5

The current portion of restructuring reserves of ~~$31.0~~$24.3 million at ~~September~~June 30, ~~2020~~2021 was included in Accrued liabilities and other while the long-term portion of ~~$60.1~~$45.2 million, primarily related to MEPP withdrawal obligations, employee terminations in litigation and other, was included in Other noncurrent liabilities at ~~September~~June 30, ~~2020.~~2021. The liabilities for the withdrawal obligations associated with our previous decision to withdraw from all MEPPs included in Accrued liabilities and other and Other noncurrent liabilities are ~~$15.1~~$6.9 million and ~~$57.1~~$41.9 million, respectively, as of ~~September~~June 30, ~~2020~~2021.

We anticipate that payments associated with the employee terminations reflected in the above table will be fully completed by September 2021, excluding employee terminations in litigation within the Business Services segment.

Payments on ~~all of~~ our MEPP withdrawal obligations are scheduled to be substantially completed by 2034. Changes based on uncertainties in these estimated withdrawal obligations could affect the ultimate charges related to MEPP withdrawals. Refer to Note 14 – Commitment and Contingencies to our Condensed Consolidated Financial Statements for further details.

The restructuring liabilities classified as “other” primarily consisted of reserves for employee termination litigation and environmental matters. Any potential recoveries or additional charges could affect amounts reported in our condensed consolidated financial statements.

Components of net pension and other postretirement benefits plan (“OPEB”) income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Pension income:
Service cost	$	0.2		$	0.2		$	0.7		$	0.7		$	0.3		$	0.2		$	0.6		$	0.5
Interest cost		6.8			8.2			20.5			24.9			5.1			6.8			10.2			13.7
Expected return on plan assets		(10.2	)		(11.5	)		(30.4	)		(34.7	)		(9.6	)		(10.0	)		(19.1	)		(20.2	)
Amortization, net		2.5			1.6			7.5			4.6			3.0			2.5			5.9			5.0
Net pension income	$	(0.7	)	$	(1.5	)	$	(1.7	)	$	(4.5	)	$	(1.2	)	$	(0.5	)	$	(2.4	)	$	(1.0	)

OPEB income:
Interest cost		1.9			2.7			5.5			7.7			1.0			1.8			2.1			3.6
Expected return on plan assets		(3.1	)		(3.3	)		(9.4	)		(9.9	)		(2.9	)		(3.1	)		(5.9	)		(6.3	)
Amortization, net		(1.5	)		(1.9	)		(4.5	)		(5.4	)		(1.7	)		(1.5	)		(3.2	)		(3.0	)
Net OPEB income	$	(2.7	)	$	(2.5	)	$	(8.4	)	$	(7.6	)	$	(3.6	)	$	(2.8	)	$	(7.0	)	$	(5.7	)

During the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, we contributed ~~$6.3~~$2.6 million and ~~$5.1~~$4.2 million, respectively, to our retirement plans.

Share-based compensation expense was $1.3 million and $4.5 million for the three and nine months ended September 30, 2020, respectively, and was $2.6 million and $9.3 million for the three and nine months ended September 30, 2019, respectively.

In March ~~2020,~~2021, we awarded our annual share-based compensation grants, which consisted of 0.8 million restricted stock units with a grant date fair value of ~~$1.61~~$4.52 per unit and 0.8 million performance share units also with a grant date fair value of ~~$1.61~~$4.52 per unit. The restricted stock units are subject to a three year ~~graded~~ratable vesting period and the performance share units are subject to a ~~34 month cliff vesting~~three year performance period. Dividends are 0t paid on restricted stock units.As of June 30, 2021, there were 1.5 million and 2.2 million outstanding restricted shares and performance restricted shares, respectively.

In addition, in March ~~2020~~2021 we granted ~~1.5~~0.9 million cash-settled restricted stock units (“phantom restricted stock units”) and ~~1.5~~0.9 million cash-settled performance stock units (“phantom performance stock units”). Our share price on the date of grant was ~~$1.88.~~$4.52. The phantom restricted stock units vest and are payable in three equal installments over a period of three years after the grant date. The phantom performance stock units are subject to a ~~34 month cliff vesting~~three year performance period. Phantom stock units are not shares of our common stock and therefore the recipients of these awards do not receive ownership interest in the Company or stockholder voting rights. Phantom stock unit awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death or permanent disability of the grantee, termination of the grantee’s employment under certain circumstances or a change in control of the Company. All phantom stock unit awards are classified as liability awards due to their expected settlement in cash and are included in Accrued liabilities and other in the Condensed Consolidated Balance Sheets. Compensation expense for these awards is measured based upon the fair value of the awards at the end of each reporting period. Dividends are 0t paid on phantom stock units.As of June 30, 2021, there were 2.1 million and 2.4 million outstanding cash-settled phantom and performance cash-settled phantom shares, respectively.

Compensation expense for these plans was $9.4 million and $16.2 million for the three and six months ended June 30, 2021 and $2.8 million and $3.1 million for the three and six months ended June 30, 2020, respectively.

Our equity as of December 31, ~~2019~~2020 and ~~September~~June 30, ~~2020,~~2021, and changes during the three and ~~nine~~six months ended ~~September~~June 30, 2021, were as follows:

	Common		Additional Paid-in-			Treasury			Accumulated			Accumulated Other Comprehensive			Total RRD's Stockholders'			Noncontrolling			Total
	Stock		Capital			Stock			Deficit			Loss			Equity			Interests			Equity
Balance at December 31, 2020	$	0.9	$	3,263.6		$	(1,127.6	)	$	(2,240.7	)	$	(153.9	)	$	(257.7	)	$	13.9		$	(243.8	)
Net (loss) income										(1.3	)					(1.3	)		0.2			(1.1	)
Other comprehensive loss													(6.4	)		(6.4	)		(0.2	)		(6.6	)
Share-based compensation				0.2												0.2						0.2
Issuance of share-based awards, net of withholdings and other				(158.4	)		156.0									(2.4	)					(2.4	)
Distributions to noncontrolling interests																—			(0.7	)		(0.7	)
Balance at March 31, 2021	$	0.9	$	3,105.4		$	(971.6	)	$	(2,242.0	)	$	(160.3	)	$	(267.6	)	$	13.2		$	(254.4	)
Net (loss) income										(9.4	)					(9.4	)		0.2			(9.2	)
Other comprehensive income													17.4			17.4			0.1			17.5
Share-based compensation				2.4												2.4						2.4
Issuance of share-based awards, net of withholdings and other				(77.8	)		77.7									(0.1	)					(0.1	)
Balance at June 30, 2021	$	0.9	$	3,030.0		$	(893.9	)	$	(2,251.4	)	$	(142.9	)	$	(257.3	)	$	13.5		$	(243.8	)

On May 17, 2021, our Board of Directors approved an amendment to the Stockholder Rights Agreement. The amendment raises from 10% to 15% the level of beneficial ownership of RRD common stock the acquisition of which by a person or group (other than certain passive institutional investors) would result in the rights becoming exercisable.

Our equity as of December 31, 2019 and June 30, 2020, and changes during three and six months ended June 30, 2020, were as follows:

	Common		Additional Paid-in-			Treasury			Accumulated			Accumulated Other Comprehensive			Total RRD's Stockholders'			Noncontrolling			Total			Common		Additional Paid-in-			Treasury			Accumulated			Accumulated Other Comprehensive			Total RRD's Stockholders'			Noncontrolling			Total
	Stock		Capital			Stock			Deficit			Loss			Equity			Interests			Equity			Stock		Capital			Stock			Deficit			Loss			Equity			Interests			Equity
Balance at December 31, 2019	$	0.9	$	3,348.0		$	(1,219.6	)	$	(2,336.8	)	$	(176.2	)	$	(383.7	)	$	13.4		$	(370.3	)	$	0.9	$	3,348.0		$	(1,219.6	)	$	(2,336.8	)	$	(176.2	)	$	(383.7	)	$	13.4		$	(370.3	)
Net (loss) income										(13.0	)					(13.0	)		0.1			(12.9	)										(13.0	)					(13.0	)		0.1			(12.9	)
Other comprehensive loss													(31.0	)		(31.0	)		(0.2	)		(31.2	)
Other comprehensive income																																				(31.0	)		(31.0	)		(0.2	)		(31.2	)
Share-based compensation				1.4												1.4						1.4					1.4												1.4						1.4
Issuance of share-based awards, net of withholdings and other				(82.3	)		81.8									(0.5	)					(0.5	)				(82.3	)		81.8									(0.5	)					(0.5	)
Cash dividends paid										(2.1	)					(2.1	)					(2.1	)										(2.1	)					(2.1	)					(2.1	)
Cumulative impact of adopting ASU 2016-03										(0.3	)					(0.3	)					(0.3	)
Cumulative impact of adopting ASU 2016-03, net of tax																																	(0.3	)					(0.3	)					(0.3	)
Distributions to noncontrolling interests																—			(0.7	)		(0.7	)																—			(0.7	)		(0.7	)
Balance at March 31, 2020	$	0.9	$	3,267.1		$	(1,137.8	)	$	(2,352.2	)	$	(207.2	)	$	(429.2	)	$	12.6		$	(416.6	)	$	0.9	$	3,267.1		$	(1,137.8	)	$	(2,352.2	)	$	(207.2	)	$	(429.2	)	$	12.6		$	(416.6	)
Net loss										(57.2	)					(57.2	)					(57.2	)										(57.2	)					(57.2	)					(57.2	)
Other comprehensive income													6.2			6.2						6.2														6.2			6.2						6.2
Share-based compensation				1.8												1.8						1.8					1.8												1.8						1.8
Issuance of share-based awards, net of withholdings and other				(7.7	)		7.6									(0.1	)					(0.1	)				(7.7	)		7.6									(0.1	)					(0.1	)
Balance at June 30, 2020	$	0.9	$	3,261.2		$	(1,130.2	)	$	(2,409.4	)	$	(201.0	)	$	(478.5	)	$	12.6		$	(465.9	)	$	0.9	$	3,261.2		$	(1,130.2	)	$	(2,409.4	)	$	(201.0	)	$	(478.5	)	$	12.6		$	(465.9	)
Net (loss) income										(8.9	)					(8.9	)		0.2			(8.7	)
Other comprehensive income													18.1			18.1			0.4			18.5
Share-based compensation				1.3												1.3						1.3
Balance at September 30, 2020	$	0.9	$	3,262.5		$	(1,130.2	)	$	(2,418.3	)	$	(182.9	)	$	(468.0	)	$	13.2		$	(454.8	)

~~Our equity as of December 31, 2018 and September 30, 2019, and changes during three and nine months ended September 30, 2019, were as follows:~~

Common

Additional
Paid-in-

Treasury

Accumulated

Accumulated
Other
Comprehensive

Total RRD's
Stockholders'

Noncontrolling

Total

Stock

Capital

Stock

Deficit

Loss

Equity

Interests

Equity

Balance at December 31, 2018
$
0.9

$
3,404.0

$
(1,285.5
)

$
(2,225.7
)

$
(153.8
)

$
(260.1
)

$
14.7

$
(245.4
)
Net (loss) income

(8.8
)

(8.8
)

0.3

(8.5
)
Other comprehensive income

1.4

1.4

0.2

1.6

Share-based compensation

3.4

3.4

3.4

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

(54.7
)

53.8

(0.9
)

(0.9
)
Cash dividends paid

(2.1
)

(2.1
)

(2.1
)
Cumulative impact of adopting ASU 2016-02, net of tax

2.6

2.6

2.6

Distributions to noncontrolling interests

—

(0.7
)

(0.7
)
Balance at March 31, 2019
$
0.9

$
3,352.7

$
(1,231.7
)

$
(2,234.0
)

$
(152.4
)

$
(264.5
)

$
14.5

$
(250.0
)
Net loss

(7.0
)

(7.0
)

(0.4
)

(7.4
)
Other comprehensive loss

(2.4
)

(2.4
)

(0.1
)

(2.5
)
Share-based compensation

3.3

3.3

3.3

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

(0.5
)

0.5

—

—

Cash dividends paid

(2.2
)

(2.2
)

(2.2
)
Spinoff adjustments

(12.0
)

(12.0
)

(12.0
)
Balance at June 30, 2019
$
0.9

$
3,355.5

$
(1,231.2
)

$
(2,255.2
)

$
(154.8
)

$
(284.8
)

$
14.0

$
(270.8
)
Net income

12.6

12.6

0.3

12.9

Other comprehensive loss

(19.1
)

(19.1
)

(0.4
)

(19.5
)
Share-based compensation

2.6

2.6

2.6

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

(0.8
)

0.8

—

—

Cash dividends paid

(2.1
)

(2.1
)

(2.1
)
Balance at September 30, 2019
$
0.9

$
3,357.3

$
(1,230.4
)

$
(2,244.7
)

$
(173.9
)

$
(290.8
)

$
13.9

$
(276.9
)

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

During the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, 0 shares of common stock were purchased by us; however, shares were withheld for tax liabilities upon the vesting of equity awards.

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive share-based awards for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2020			2019				2020			2019		2021			2020				2021			2020
Basic net (loss) earnings per share attributable to RRD common stockholders:
Basic and diluted net (loss) earnings per share attributable to RRD common stockholders:
Continuing operations	$	(0.13	)	$	(0.10	)	$	(0.83	)	$	(0.11	)	$	(0.13	)	$	(0.79	)	$	(0.16	)	$	(0.70	)
Discontinued operations	$	0.01		$	0.28		$	(0.27	)	$	0.07		$	—		$	—		$	0.01		$	(0.28	)
Net (loss) earnings attributable to RR Donnelley stockholders	$	(0.12	)	$	0.18		$	(1.10	)	$	(0.04	)

Diluted net (loss) earnings per share attributable to RRD common stockholders:
Continuing operations	$	(0.13	)	$	(0.10	)	$	(0.83	)	$	(0.11	)
Discontinued operations	$	0.01		$	0.28		$	(0.27	)	$	0.07
Net (loss) earnings attributable to RR Donnelley stockholders	$	(0.12	)	$	0.18		$	(1.10	)	$	(0.04	)
Net loss attributable to RR Donnelley stockholders													$	(0.13	)	$	(0.79	)	$	(0.15	)	$	(0.98	)

Numerator:
Net (loss) earnings attributable to RRD common stockholders - continuing operations	$	(9.3	)	$	(7.2	)	$	(59.6	)	$	(8.1	)
Net loss attributable to RRD common stockholders - continuing operations													$	(9.4	)	$	(57.2	)	$	(11.3	)	$	(50.3	)
Net earnings (loss) from discontinued operations, net of income taxes		0.4			19.8			(19.5	)		4.9			—			—			0.6			(19.9	)
Net (loss) earnings attributable to RRD common stockholders	$	(8.9	)	$	12.6		$	(79.1	)	$	(3.2	)
Net loss attributable to RRD common stockholders													$	(9.4	)	$	(57.2	)	$	(10.7	)	$	(70.2	)

Denominator:
Weighted average number of common shares outstanding - Basic and Diluted		72.4			71.4			72.1			71.2			73.3			72.2			73.0			71.9

Weighted average number of anti-dilutive share-based awards:
Stock options		0.3			0.4			0.3			0.5			0.2			0.3			0.2			0.3
Restricted stock units		1.5			1.3			1.1			1.0			0.6			1.5			0.7			1.1
Total		1.8			1.7			1.4			1.5			0.8			1.8			0.9			1.4

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

The components of other comprehensive income (loss) and income tax expense (benefit) allocated to each component for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:

	Three Months Ended						Nine Months Ended									Three Months Ended						Six Months Ended
	September 30, 2020						September 30, 2020									June 30, 2021						June 30, 2021
	Before				Net of		Before						Net of			Before				Net of		Before					Net of
	Tax		Income		Tax		Tax			Income			Tax			Tax		Income		Tax		Tax			Income		Tax
	Amount		Tax		Amount		Amount			Tax			Amount			Amount		Tax		Amount		Amount			Tax		Amount
Translation adjustments	$	17.4	$	—	$	17.4	$	4.2		$	—		$	4.2		$	10.0	$	—	$	10.0	$	(0.2	)	$	—	$	(0.2	)
Adjustments for net periodic pension and OPEB cost		1.0		0.2		0.8		3.0			0.7			2.3			1.3		0.3		1.0		2.7			0.6		2.1
Change in fair value of derivatives		0.5		0.2		0.3		(17.0	)		(4.0	)		(13.0	)		8.7		2.2		6.5		12.1			3.1		9.0
Other comprehensive income (loss)	$	18.9	$	0.4	$	18.5	$	(9.8	)	$	(3.3	)	$	(6.5	)
Other comprehensive income																$	20.0	$	2.5	$	17.5	$	14.6		$	3.7	$	10.9

~~(in millions, except per share data, unless otherwise indicated)~~Accumulated other comprehensive loss by component as of December 31, 2020 and June 30, 2021, and changes during the six months ended June 30, 2021, were as follows:

Three Months Ended

Nine Months Ended

September 30, 2019

September 30, 2019

Before

Net of

Before

Net of

Tax

Income

Tax

Tax

Income

Tax

Amount

Tax

Amount

Amount

Tax

Amount

Translation adjustments
$
(19.9
)

$
—

$
(19.9
)

$
(21.9
)

$
—

$
(21.9
)
Adjustments for net periodic pension and OPEB cost

(0.3
)

(0.1
)

(0.2
)

(0.8
)

(0.2
)

(0.6
)
Other

—

(0.6
)

0.6

—

(2.1
)

2.1

Other comprehensive loss
$
(20.2
)

$
(0.7
)

$
(19.5
)

$
(22.7
)

$
(2.3
)

$
(20.4
)

	Changes in the Fair Value of Derivatives			Pension and OPEB Cost			Translation Adjustments			Total
Balance at December 31, 2020	$	(11.0	)	$	(178.5	)	$	35.6		$	(153.9	)
Other comprehensive loss before reclassifications		(2.2	)		—			(0.1	)		(2.3	)
Amounts reclassified from accumulated other comprehensive loss		11.2			2.1			—			13.3
Net change in accumulated other comprehensive loss		9.0			2.1			(0.1	)		11.0
Balance at June 30, 2021	$	(2.0	)	$	(176.4	)	$	35.5		$	(142.9	)

Accumulated other comprehensive loss by component as of December 31, 2019 and ~~September~~June 30, 2020, and changes during the ~~nine~~six months ended ~~September~~June 30, 2020, were as follows:

	Changes in the Fair Value of Derivatives			Pension and OPEB Cost			Translation Adjustments		Total			Changes in the Fair Value of Derivatives			Pension and OPEB Cost			Translation Adjustments			Total
Balance at December 31, 2019	$	1.0		$	(185.7	)	$	8.5	$	(176.2	)	$	1.0		$	(185.7	)	$	8.5		$	(176.2	)
Other comprehensive loss before reclassifications		(15.1	)		—			4.0		(11.1	)		(14.1	)		—			(13.0	)		(27.1	)
Amounts reclassified from accumulated other comprehensive loss		2.1			2.3			—		4.4			0.8			1.5			—			2.3
Net change in accumulated other comprehensive loss		(13.0	)		2.3			4.0		(6.7	)		(13.3	)		1.5			(13.0	)		(24.8	)
Balance at September 30, 2020	$	(12.0	)	$	(183.4	)	$	12.5	$	(182.9	)
Balance at June 30, 2020												$	(12.3	)	$	(184.2	)	$	(4.5	)	$	(201.0	)

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

Reclassifications from accumulated other comprehensive loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Classification in the Condensed	Three Months Ended June 30,						Six Months Ended June 30,						Classification in the Condensed
	2020			2019			2020			2019			Consolidated Statements of Operations
Translation Adjustments:
Net realized gain, before tax	$	—		$	—		$	—		$	(4.5	)	Other operating expense (income)
Reclassification, net of tax	$	—		$	—		$	—		$	(4.5	)
														2021			2020			2021			2020			Consolidated Statements of Operations
Amortization of pension and OPEB cost:
Net actuarial loss	$	3.9		$	1.1		$	6.9		$	3.3		Investment and other income-net	$	2.6		$	1.4		$	5.4		$	3.0		Investment and other income-net
Net prior service credit		(2.9	)		(1.4	)		(3.9	)		(4.1	)	Investment and other income-net		(1.3	)		(0.4	)		(2.7	)		(1.0	)	Investment and other income-net
Reclassifications before tax		1.0			(0.3	)		3.0			(0.8	)			1.3			1.0			2.7			2.0
Income tax expense (benefit)		0.2			(0.1	)		0.7			(0.2	)
Income tax benefit															0.3			0.3			0.6			0.5
Reclassification, net of tax		0.8			(0.2	)	$	2.3		$	(0.6	)			1.0			0.7		$	2.1		$	1.5

Derivatives:
Net realized loss	$	1.3		$	—		$	2.1		$	—		Interest expense-net	$	9.9		$	1.0		$	11.2		$	0.8		Interest expense-net
Reclassification, net of tax		1.3			—			2.1			—				9.9			1.0			11.2			0.8
Total reclassifications, net of tax	$	2.1		$	(0.2	)	$	4.4		$	(5.1	)		$	10.9		$	1.7		$	13.3		$	2.3

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

Marketing Solutions leverages an integrated portfolio of data analytics, creative services and multichannel execution to deliver comprehensive, end-to-end solutions. The segment’s primary product and service offerings include direct marketing, in-store marketing, digital print, kitting, fulfillment, digital and creative solutions and list services.

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

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

Three Months Ended

September 30, 2020

Assets of

Income (Loss)

Depreciation

Operations

Total

Intersegment

Net

from

and

Capital

As of

Sales

Sales

Sales

Operations

Amortization

Expenditures

September 30, 2020

Business Services

$
953.0

$
(16.2
)

$
936.8

$
69.1

$
23.5

$
10.2

$
2,308.1

Marketing Solutions

258.7

(4.2
)

254.5

10.3

11.4

2.6

649.1

Total operating segments

1,211.7

(20.4
)

1,191.3

79.4

34.9

12.8

2,957.2

Corporate

—

—

—

(63.5
)

1.3

3.5

470.7

Total operations

$
1,211.7

$
(20.4
)

$
1,191.3

$
15.9

$
36.2

$
16.3

$
3,427.9

	Three Months Ended																Three Months Ended
	September 30, 2019																June 30, 2021
															Assets of
								Income (Loss)			Depreciation				Operations					Income (Loss)	Depreciation
	Total		Intersegment			Net		from			and		Capital		As of		Total	Intersegment	Net	from	and	Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures		December 31, 2019		Sales	Sales	Sales	Operations	Amortization	Expenditures
Business Services	$	1,097.3	$	(23.5	)	$	1,073.8	$	77.5		$	24.8	$	17.7	$	2,328.9	$924.7	$(15.1)	$909.6	$55.2	$22.3	$12.5
Marketing Solutions		352.0		(8.6	)		343.4		24.4			14.7		8.0		748.1	241.0	(5.0)	236.0	9.0	8.1	1.6
Total operating segments		1,449.3		(32.1	)		1,417.2		101.9			39.5		25.7		3,077.0	1,165.7	(20.1)	1,145.6	64.2	30.4	14.1
Corporate		—		—			—		(30.9	)		2.5		5.3		253.1	—	—	—	(36.0)	2.5	2.8
Total operations	$	1,449.3	$	(32.1	)	$	1,417.2	$	71.0		$	42.0	$	31.0	$	3,330.1	$1,165.7	$(20.1)	$1,145.6	$28.2	$32.9	$16.9

															Six Months Ended
	Nine Months Ended														June 30, 2021
	September 30, 2020																												Assets of
								Income (Loss)			Depreciation											Income (Loss)			Depreciation				Operations
	Total		Intersegment			Net		from			and		Capital		Total		Intersegment			Net		from			and		Capital		As of
	Sales		Sales			Sales		Operations			Amortization		Expenditures		Sales		Sales			Sales		Operations			Amortization		Expenditures		June 30, 2021
Business Services	$	2,667.4	$	(42.0	)	$	2,625.4	$	123.9		$	71.7	$	30.0	$	1,860.7	$	(29.0	)	$	1,831.7	$	108.4		$	45.3	$	20.3	$	2,181.6
Marketing Solutions		808.4		(16.1	)		792.3		33.4			37.6		9.0		496.6		(9.6	)		487.0		22.8			16.1		4.6		630.3
Total operating segments		3,475.8		(58.1	)		3,417.7		157.3			109.3		39.0		2,357.3		(38.6	)		2,318.7		131.2			61.4		24.9		2,811.9
Corporate		—		—			—		(127.3	)		3.0		15.4		—		—			—		(77.9	)		5.3		5.0		189.0
Total operations	$	3,475.8	$	(58.1	)	$	3,417.7	$	30.0		$	112.3	$	54.4	$	2,357.3	$	(38.6	)	$	2,318.7	$	53.3		$	66.7	$	29.9	$	3,000.9

															Six Months Ended
	Nine Months Ended														June 30, 2020
	September 30, 2019																												Assets of
								Income (Loss)			Depreciation											Income (Loss)			Depreciation				Operations
	Total		Intersegment			Net		from			and		Capital		Total		Intersegment			Net		from			and		Capital		As of
	Sales		Sales			Sales		Operations			Amortization		Expenditures		Sales		Sales			Sales		Operations			Amortization		Expenditures		December 31, 2020
Business Services	$	3,196.9	$	(59.4	)	$	3,137.5	$	140.6		$	77.4	$	60.4	$	1,714.5	$	(25.8	)	$	1,688.7	$	54.8		$	48.2	$	19.8	$	2,220.9
Marketing Solutions		930.9		(24.4	)		906.5		38.9			38.2		31.6		549.7		(11.9	)		537.8		23.1			26.2		6.4		674.3
Total operating segments		4,127.8		(83.8	)		4,044.0		179.5			115.6		92.0		2,264.2		(37.7	)		2,226.5		77.9			74.4		26.2		2,895.2
Corporate		—		—			—		(73.1	)		5.9		15.4		—		—			—		(63.8	)		1.7		11.9		235.7
Total operations	$	4,127.8	$	(83.8	)	$	4,044.0	$	106.4		$	121.5	$	107.4	$	2,264.2	$	(37.7	)	$	2,226.5	$	14.1		$	76.1	$	38.1	$	3,130.9

Net restructuring, impairment and other expenses by segment are described in Note 7, Restructuring, Impairment and Other.

We are subject to laws and regulations relating to the protection of the environment. We provide for expenses associated with environmental remediation obligations when such amounts are probable and can be reasonably estimated. Such accruals are adjusted as new information develops or circumstances change and are generally not discounted. We have been designated as a potentially responsible party or have received claims in 34 active federal and state Superfund and other multiparty remediation sites. In addition to these sites, we may also have the obligation to remediate 6 other previously and currently owned facilities. At the Superfund sites, the Comprehensive Environmental Response, Compensation and Liability Act provides that our liability could be joint and several, meaning that we could be required to pay an amount in excess of our proportionate share of the remediation costs.

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

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

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

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

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

We believe that the final resolution of these preference items, investigations, and litigation will not have a material effect on our consolidated results of operations, financial position or cash flows.

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

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

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

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

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

Subsequent to the spinoff of LSC Communications, Inc. and Subsidiaries (“LSC”) and Donnelley Financial Solutions, Inc. (“Donnelley Financial”) on October 1, 2016, we may be contingently liable for obligations under various operating leases for office, warehouse and manufacturing locations of LSC and Donnelley Financial. In the event that LSC or Donnelley Financial, or any successor lessee, fail to make lease payments or fail to pay other obligations under these lease agreements, we may be required to satisfy those obligations to the lessor. Under various agreements executed at the time of the spinoff, LSC and Donnelley Financial agreed to fully indemnify us in the event that we would be required to make a payment on their behalf; however, there can be no assurance that the indemnities from LSC and Donnelley Financial will be sufficient to satisfy the full amount of any such contingent obligations. Our exposure to these potential contingent liabilities ~~will decrease~~decreases over time as LSC and Donnelley Financial pay monthly lease obligations and as the leases expire. As of ~~September~~June 30, ~~2020 and December 31, 2019,~~2021 these potential contingent obligations were ~~approximately $58.7~~$41.2 million and ~~$78.8~~$1.8 million ~~respectively,~~ forLSC and ~~$3.4 million and $5.5 million, respectively for~~ Donnelley ~~Financial.~~ Financial, respectively.

On April 13, 2020, LSC announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. In September 2020, a third-party (the “Buyer”) offered to buy the assets and assume certain obligations of LSC. WeAlthough the buyer assumed the majority of LSC’s existing leases, we continue to ~~monitor the proceedings and at the time of this filing, are aware that certain~~be contingently liable for these leases ~~in which we have exposure have been rejected by LSC and the Buyer. As of September 30, 2020, we have recorded a $0.4 million contingent liability related to these leases.~~until their termination or renewal.

In May and June 2020 we became aware that LSC failed to make required monthly contributions to certain of their multiemployer pension plans (“MEPP”). In accordance with laws and regulations governing multiemployer pension plans, we believe that we and Donnelley Financial, as former members of the control group, are contingently liable on a joint and several liability basis for LSC’s MEPP obligations. We believe that the total undiscounted MEPP obligations for which LSC iswas responsible iswas approximately ~~$100.0~~$100 million and iswas payable over an average ~~13 year~~13-year period. The amount of our ultimate liability related to LSC's MEPP obligations is contingent upon the outcome of our negotiations with Donnelley Financial concerning how the obligations would be apportioned between us and Donnelley Financial. ~~As part of its offer to purchase certain assets and assume certain liabilities of LSC, the Buyer is not expected to assume LSC’s MEPP liabilities. During~~These negotiations commenced during the third quarter ~~we commenced negotiations with Donnelley Financial related to how~~of 2020, when the ~~MEPP liabilities would be apportioned between the two~~ parties ~~and~~ agreed to enter into mediation, and then arbitration, ~~if the parties do not reach~~after an agreement inwas not reached though the mediation process. During the ~~third~~first quarter of 2021, Donnelley Financial filed notice to commence the arbitration process, although no arbitration date has been set. In 2020, we recorded a contingent liability of approximately ~~$34.5~~$37.1 million representing our ~~current~~ estimate of the aggregate payments we believe we will be required to make with respect to LSC’s MEPP liabilities. This amount however could be adjusted in the future based on the final allocation as a result of ~~either~~ the ~~mediation process or arbitration. We expect~~arbitration process. Payments to ~~make annual payments through~~settle this liability are scheduled to be completed by 2034.

~~In addition~~During the six months ended June 30, 2021, we and Donnelley Financial commenced negotiations with each of the three MEPPs to settle the MEPP liabilities and, we successfully negotiated a settlement with two of the three plans. As a result of these settlements, in the same period, we recorded a $2.2 million gain in restructuring, impairment and other expense on the Condensed Consolidated Statement of Operations reflecting our estimated share of the reduced liability. Cash payments made by us during the second quarter of 2021 were approximately $18.4 million and primarily related to the ~~aforementioned contingent obligations, we may be contingently liable for other claims arising out~~settlement of the ~~LSC bankruptcy. In October 2020,~~two MEPP plans. As of June 30, 2021, we ~~received a demand notice from a law firm~~have $13.4 million accrued representing ~~more than 30 individuals whose accrued supplemental non-qualified pension benefits were transferred to LSC at the time~~our estimate for our share of the spin. The law firm is asserting that these accrued supplemental non-qualified pension benefits were incorrectly or not appropriately transferred to LSC at the time of the spin, and as a result we remain responsible to pay the remaining accrued vested benefits under the plan. We may also be contingently liable for other liabilities that were assumed or assigned to LSC at the time of the spin, and other general unsecured or secured creditors of LSC may make a claim against us. We intend to vigorously defend ourselves against all claims, and at this time cannot estimate the amount, if any, we would be required to pay.liability.

Debt at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 consisted of the following:

	September 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
Borrowings under the ABL Credit Facility	$	410.0		$	42.0		$	30.0		$	—
7.625% notes due June 15, 2020		—			65.8
7.875% notes due March 15, 2021		83.3			167.1
8.875% debentures due April 15, 2021		55.6			60.2			—			55.6
7.000% notes due February 15, 2022		104.3			140.0			79.3			79.3
6.500% notes due November 15, 2023		75.0			290.6			75.0			75.0
Term Loan due January 15, 2024 ^(a)		536.9			540.3			149.2			535.8
6.000% notes due April 1, 2024		61.7			298.3			61.7			61.7
6.125% secured notes due November 1, 2026								451.1			—
8.250% notes due July 1, 2027		245.9			—			245.8			245.8
6.625% debentures due April 15, 2029		103.4			157.9			103.4			103.4
8.500% notes due April 15, 2029		301.1			—			302.5			301.6
8.820% debentures due April 15, 2031		54.5			69.0			54.5			54.5
Unamortized debt issuance costs		(10.4	)		(12.8	)		(10.6	)		(9.6	)
Total debt		2,021.3			1,818.4			1,541.9			1,503.1
Less: current portion		144.4			71.2			79.3			61.1
Long-term debt	$	1,876.9		$	1,747.2		$	1,462.6		$	1,442.0

~~Total cash, cash equivalents and restricted cash was $442.4 million and $224.9 million at September 30, 2020 and December 31, 2019, respectively.~~

The fair values of the notes and debentures, which were determined using the market approach based upon quoted prices or interest rates available to us for debt obligations with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. The fair value of our total debt at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was greater than its book value by approximately ~~$24.2~~$182.2 million and ~~$29.3~~$142.9 million, respectively.

~~During the third quarter of 2020, we repurchased on the open market $11.2 million aggregate principal of 7.875% notes due~~On April 28, 2021, (the “2021 Notes”) and $3.3 million aggregate principal of the 7.000% notes due in 2022 (the “2022 Notes”) using available cash. During the nine months ended September 30, 2020 we repurchased on the open market $70.2 million aggregate principal of debt maturing in 2020 and 2021, including $1.3 million of the 7.625% notes due 2020, $67.6 million of the 2021 Notes, and $1.3 million of the 8.875% debentures due 2021 (the “2021 Debentures”).

~~On October 27, 2020, we notified the holders of our 2021 Notes that we will redeem the remaining $83.3 million aggregate principal outstanding on December 4, 2020. The redemption price will be based~~ ~~on the terms of the notes and related indenture~~ ~~and will include a premium along with unpaid interest to the redemption date. We plan to use available cash to fund the redemption.~~

~~During the first and second quarters of 2020, we executed various transactions that reduced our near-term maturities and extended our debt maturity profile. On June 18, 2020,~~ we completed ~~a public exchange transaction in which we exchanged $246.2~~an offering of $400.0 million aggregate principal amount of ~~the Company’s debt held by various investors maturing between 2021 and 2024 (the “Old Debt”) for $244.9 million aggregate principal amount of newly issued unsecured 8.25%~~6.125% senior secured notes due ~~2027~~2026 (the ~~“New 2027~~“2026 Notes”)~~. The Old Debt that was exchanged consisted of $16.4~~ at par. On May 10, 2021, we completed an additional $50.0 million offering of the 2021 Notes; $3.3 million of the 2021 Debentures; $25.8 million of the 2022 Notes; $161.6 million of the 6.500% notes due 2023 (the “2023 Notes”); and $39.1 million of the 6.000% of notes due 2024 (the “2024 Notes”). Other than the interest rate, the terms of the New 20272026 Notes ~~are substantially similar to the terms of the Old Debt. We treated the transaction as a debt modification, which resulted in a premium on the New 2027 Notes of approximately $1.0 million.~~

In March 2020, we entered into privately negotiated agreements with the largest holder of our outstanding notes (the “Holder”) to extend a significant portion of the Company’s 2023 and 2024 maturities. The agreements included the exchange of $277.0 million aggregate principal amount of notes owned by the Holder, consisting of $54.0 million of the 2023 Notes, $177.4 million of the 2024 Notes, and $45.6 million of the 6.625% debentures due 2029 (the “2029 Debentures”) for $297.0 million aggregate principal amount of newly issued unsecured 8.50% notes due 2029 (the “New 2029 Notes”). Other than the interest rate, the terms of the New 2029 Notes are substantially similar to the terms of the 2029 Debentures. We treated the transaction as a debt modification, which resulted in a discount on the New 2029 Notes of approximately $20 million, inclusive of approximately $0.3 million of fees paid to the Holder. The exchange was executed in a series of transactions that were ~~completed on April 8, 2020. The agreements also included~~issued at a $1.1 million premium, increasing the repurchase of $6.6 million of the 2022 Notes and $20.0 million of the 2024 Notes. These repurchases were completed in March and were funded with a draw from our ABL Credit Facility. We recorded a gain of $0.2 million on these repurchases.

~~In May 2020, we entered into an additional agreement with the Holder in which the Holder agreed to exchange approximately $9.0 million~~ aggregate principal amount of the ~~2029 Debentures~~2026 Notes to $450.0 million. The 2026 Notes are general senior secured obligations of the Company and ~~$14.5 million aggregate principal amount~~are guaranteed by our domestic, wholly-owned subsidiaries that are guarantors of ~~8.820% Debentures due 2031 for approximately $21.2 million aggregate principal amount of New 2029 Notes. This transaction was completed on June 19, 2020. We treated~~ the ~~transaction as a debt modification, which resulted in a premium~~ABL Credit Facility and Term Loan. Interest on the ~~New 2029~~2026 Notes is payable semi-annually on May 1 and November 1 of ~~approximately $2.1 million, inclusive~~each year, commencing on November 1, 2021. The 2026 Notes mature on November 1, 2026. The proceeds from the offerings of ~~$0.2~~the 2026 Notes were used to repay $387.6 million of ~~fees paid to the Holder.~~

~~On October 15, 2018, we entered into a $550.0 million senior secured term loan B (the “Term Loan”) pursuant to a credit agreement (the “Term Loan Credit Agreement”). The~~principal outstanding under our Term Loan ~~is scheduled~~and to ~~mature on January 15, 2024, at which time~~reduce the ~~remaining~~ outstanding balance under our ABL Credit Facility, including the ~~Term Loan will be due and payable. Principal payments~~amount borrowed for repayment of ~~$1.4~~the $55.6 million ~~are due quarterly. The Term Loan bears interest based~~principal outstanding of the 8.875% Debentures that matured on ~~the London Interbank Offered Rate (LIBOR) plus a margin of 5% or a base rate plus a margin of 4%.~~April 15, 2021.

~~We entered into an $800.0 million~~On April 16, 2021, we amended our senior secured asset-based revolving credit facility (the “ABL Credit Facility”) ~~on September 29, 2017, pursuant~~ to, a credit agreement (the “ABL Credit Agreement”), which replaced our prior $800.0 million senior secured revolving credit facility dated September 30, 2016. The ABL Credit Facility is scheduled to mature onamong other things, extend the maturity date from September 29, 2022 ~~at which time all outstanding amounts under~~to April 16, 2026 and reduce the ~~ABL Credit Facility will be due and payable.~~aggregate commitments from $800.0 million to $650.0 million.

The amount available to be borrowed under the ABL Credit Facility is equal to the lesser of (a) ~~$800.0~~$650.0 million and (b) a borrowing base formula based on the amount of accounts receivable, inventory, machinery, equipment and, if we were to so elect in the future subject to the satisfaction of certain conditions, fee-owned real estate of ours and our material domestic subsidiaries, subject to certain eligibility criteria and advance rates (collectively, the “Borrowing Base”). The aggregate amount of real estate, machinery and equipment that can be included in the Borrowing Base formula ~~cannot exceed $200.0~~is limited to $175.0 million.

Borrowings under the ABL Credit Facility bear interest at a rate dependent on the average quarterly availability and is calculated according to a base rate (except in certain circumstances, based on the prime rate) or a Eurocurrency rate (except in certain circumstances, based on LIBOR) plus an applicable margin. The applicable margin for base rate loans ranges from 0.25% to ~~0.50%~~0.75% and the applicable margin for Eurocurrency loans ranges from 1.25% to ~~1.50%~~1.75%. In addition, a fee is payable quarterly on the unused portion of the total commitments. This fee accrues at a rate of either 0.25% or 0.375% depending upon the average usage of the facility. Borrowings under the ABL Credit Facility may be used for working capital and general corporate purposes.

During the first quarter of 2020, we increased our borrowings under the ABL Credit Facility to $450 million as a proactive measure in response to the COVID-19 pandemic. The amount of the borrowings under the ABL Credit Facility was subsequently reduced to $410 million at the end of the second quarter.

Based on our Borrowing Base as of ~~September~~June 30, ~~2020~~2021 and ~~outstanding borrowings,~~letters of credit, we had approximately ~~$127.8~~$462.0 million borrowing capacity available under the ABL Credit Facility. The weighted average interest rate on borrowings under our ABL Credit Facility was ~~1.8%~~1.5% and ~~3.7%~~1.9% during the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, respectively. There was $30 million of outstanding borrowings on our ABL Credit Facility as of June 30, 2021 and ~~2019, respectively.~~0 outstanding borrowings as of December 31, 2020.

~~R.R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES (“RRD”~~During the second quarter of 2021, we utilized proceeds from the offerings of the 2026 Notes to repay $387.6 million of principal outstanding on our term loan B (the “Term Loan”)

(, which we entered into on October 15, 2018 and is scheduled to mature on January 15, 2024. The repayment was applied to eliminate the quarterly principal payments that were previously required. The Term Loan bears interest based on the London Interbank Offered Rate (LIBOR) plus a margin of 5% or a base rate plus a margin of 4%. Debt extinguishment costs in ~~millions, except per share data, unless otherwise indicated)~~

conjunction with the partial repayment of the Term Loan were $6.2 million, which included unamortized debt issuance costs and discount and is recorded in Loss on debt extinguishment for three months ended June 30, 2021 on the Condensed Consolidated Statement of Operations.

The credit agreements for our ABL Credit Facility (the “ABL Credit Agreement”)and Term Loan (the "Term Loan Credit ~~Agreement~~Agreement"), and the indenture for the 2026 Notes (the “2026 Notes Indenture”) contain customary affirmative and negative covenants including negative covenants restricting, among other things, our ability to incur or guarantee debt, or issue preferred stock, make certain loans or investments, make certain restricted payments (including payments on certain other debt, external dividends, and ~~external dividends)~~stock repurchases), incur liens securing other debt, consummate certain fundamental transactions, enter into certain transactions with affiliates and consummate asset sales. The ABL Credit Agreement contains a covenant which requires us to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 if availability under the ABL Credit Facility declines below certain levels. The Term Loan Credit Agreement ~~requires~~and the 2026 Notes Indenture require that the net cash proceeds of significant asset sales be used to prepay the Term Loan and purchase the 2026 Notes to the extent that the net cash proceeds are not used for reinvestment in assets useful to our business, certain acquisitions and investments, repayment of certain borrowings under our ABL Credit Facility or ~~the funding of debt repayments, redemptions~~to reduce, prepay, repay or ~~tenders of~~purchase certain ~~existing notes maturing prior to the maturity of the Term Loan,~~indebtedness, in each case, subject to certain restrictions and limitations set forth in the Term Loan Credit ~~Agreement.~~Agreement and the 2026 Notes Indenture.

Interest paid was ~~$18.6~~$31.7 million and ~~$86.4~~$54.6 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, respectively,~~2021 and ~~$27.0~~$44.3 million and ~~$112.5~~$67.8 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019, respectively.~~2020.

Interest income was ~~$0.2~~$0.3 million and ~~$1.1~~$0.7 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, respectively,~~2021 and ~~$0.6~~$0.4 million and ~~$2.3~~$0.9 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019, respectively.~~2020.

All derivatives are recorded as other current or noncurrent assets or other current or noncurrent liabilities in the Condensed Consolidated Balance Sheets at their respective fair values. Unrealized gains and losses related to derivatives are recorded in the Condensed Consolidated Statements of Operations, or in other comprehensive income (loss), net of applicable income taxes, depending on the purpose for which the derivative is held. At the inception of a hedge transaction, we formally document the hedge relationship and the risk management objective for undertaking the hedge. In addition, we assess both at inception of the hedge and on an ongoing basis, whether the derivative in the hedging transaction has been highly effective in offsetting changes in fair value or cash flows of the hedged item and whether the derivative is expected to continue to be highly effective. The impact of any ineffectiveness is also recognized in the Condensed Consolidated Statements of Operations.

We are exposed to the impact of foreign currency fluctuations based on our global operations. Foreign currency fluctuations affect the U.S. dollar value of revenues earned and expenses incurred in foreign currencies. We are also exposed to currency risk to the extent we own assets or incur liabilities, or enter into other transactions that are not in the functional currency of the subsidiary in which we operate. We employ different practices to manage these risks, including where appropriate the use of derivative instruments, such as foreign currency forwards. To the extent the gains and losses associated with the fair values of foreign currency derivatives are recognized in the Consolidated Statements of Operations, they are generally offset by gains and losses on underlying payables and receivables. We do not use derivative financial instruments for trading or speculative purposes. The aggregate notional value of the forward contracts at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$274.4~~$268.7 million and ~~$179.9~~$220.7 million, respectively. The fair values of foreign currency contracts were determined to be Level 2 under the fair value hierarchy and are valued using market exchange rates.

In 2019 and 2020, we entered into interest rate swap agreements to manage interest rate risk exposure, effectively changing the interest rate on $400.0 million of our floating-rate Term Loan based on LIBOR to a fixed-rate. The interest rate swaps, with a notional value of $400.0 million, were designated as cash flow hedges against the variability of cash flows associated with our Term Loan scheduled to mature on January 15, 2024, which are attributable to changes in the benchmark interest rate. In the second quarter of 2021, we terminated interest rate swap agreements with a notional value of $300.0 million in conjunction with the partial repayment of our Term Loan. The termination of these agreements resulted in a loss of $9.2 million recorded within interest expense on the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2021.

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

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

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

As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the fair values of our derivative financial instruments and their classifications on the Condensed Consolidated Balance Sheets were as follows:

	Classification on Consolidated Balance Sheets	September 30, 2020		December 31, 2019		Classification on Consolidated Balance Sheets	June 30, 2021		December 31, 2020
Derivative assets
Foreign currency contracts:
Not designated as hedging instruments	Prepaid expenses and other current assets	$	5.3	$	0.9	Prepaid expenses and other current assets	$	1.9	$	5.9
Interest rate swap agreements:
Designated as cash flow hedges	Other noncurrent assets		—		1.0

Derivative liabilities
Foreign currency contracts:
Not designated as hedging instruments	Accrued liabilities and other	$	0.7	$	0.1	Accrued liabilities and other	$	—	$	2.3
Interest rate swap agreements:
Designated as cash flow hedges	Accrued liabilities and other		4.9		—	Accrued liabilities and other		1.3		5.0
Designated as cash flow hedges	Other noncurrent liabilities		11.1		—	Other noncurrent liabilities		1.3		9.6

The pre-tax losses (gains) recognized on derivative financial instruments in the Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:

		Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	Classification of Loss (Gain) Recognized in the Consolidated Statements of Operations	2020			2019		2020			2019		Classification of Loss (Gain) Recognized in the Consolidated Statements of Operations	2021			2020			2021			2020
Derivatives not designated as hedges
Foreign currency contracts	Selling, general and administrative expenses	$	(6.3	)	$	4.3	$	(5.2	)	$	2.8	Selling, general and administrative expenses	$	(7.4	)	$	(0.1	)	$	(5.0	)	$	1.1
Derivatives designated as cash flow hedges
Interest rate swap agreements	Interest expense, net		1.3			—		2.1			—	Interest expense, net		9.9			1.0			11.2			0.8

The pre-tax (gains) losses recognized on derivative financial instruments in the Condensed Consolidated Statements of Comprehensive Loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019		2021		2020		2021			2020
Derivatives designated as cash flow hedges
Interest rate swap agreements	$	0.9	$	—	$	19.1	$	—	$	1.2	$	2.7	$	(0.9	)	$	18.2

On March 2, 2020, we sold our Logistics Courier business within the Business Services segment for net proceeds of $10.4 million. The disposition of this business resulted in a pre-tax loss of $9.1 million during the nine months ended September 30, 2020, which was recorded in Loss from the sale of discontinued operations in the Condensed Consolidated Statements of Operations.

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

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

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

In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes the impairment model for most financial assets and certain other instruments. Under the new guidance, entities are required to measure expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions and reasonable forecasts. ASU 2016-13 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We established a cross-functional implementation team to analyze the effect of Topic 326. The analysis included identifying pools of receivables, developing and assessing estimation methodologies, policy elections, and evaluating our business processes and internal controls to meet the accounting, reporting and disclosure requirements. On January 1, 2020, we adopted and applied Topic 326 using the modified retrospective method. The cumulative adjustment to retained earnings was $0.3 million.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, which provides companies with optional guidance, including expedients and exceptions for applying generally accepted accounting principles to contracts and other transactions affected by reference rate reform, such as LIBOR. This new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. We are currently evaluating the impact of ASU 2020-04 on the consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12 “Simplifying the Accounting for Income Taxes (Topic 740)” (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification (“ASC”) 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 ~~will be~~is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, however early adoption iswas permitted. We adopted ASU 2019-12 on January 1, 2021 and the changes did not have a material impact on our income tax provision.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, which provides companies with optional guidance, including expedients and exceptions for applying generally accepted accounting principles to contracts and other transactions affected by reference rate reform, such as LIBOR, was effective upon issuance and will be applied to future contracts with changes to the reference rate. To date, we have had no such modification to any of our contracts. We are currently evaluating the prospective impact of ~~ASU 2019-12 on~~ the ~~consolidated financial statements.~~

In August 2018, the FASB issued ASU No. 2018-14 “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018-14”), which removes certain disclosures that are no longer cost beneficialstandard, and also includes additional disclosures to improve the overall usefulness of the disclosure requirements to financial statement users. ASU 2018-14 will be effective for public entities for fiscal years beginning after December 15, 2020, however early adoption is permitted. Wewe will adopt ASU ~~2018-14 in~~2020-04 upon such contract modification. The impact of the ~~first quarter of 2021.~~standard is not expected to be material to our Consolidated Financial Statements.

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

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

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

~~On September 14,~~In the fourth quarter of 2020, we ~~entered into a definitive agreement to sell~~sold DLS Worldwide ~~Inc.~~and International Logistics which ~~is a portion of the broader~~completed our plan to exit our Logistics business, ~~and~~ a component of the Business Services reporting ~~segment, for a cash purchase price~~segment. The Logistics business was comprised of ~~$225 million, subject to a customary working capital adjustment~~DLS Worldwide, International Logistics, Print Logistics and an escrow of $22.5 million. We received regulatory approval for the sale on September 30, 2020 and expect that the transaction will close in November after completing other closing conditions. This transaction isCourier Logistics. These transactions are part of our strategy to optimize our portfolio and reduce debt. As part of our plan, we previously sold the Print Logistics business in July 2018 and the Courier Logistics business in March 2020. ~~In October 2020 we reached agreement to sell our International Logistics product line and expect to close by December 31, 2020.~~ Accordingly, we have reflected the Print Logistics business, Courier Logistics business, ~~(through the date of sale),~~ the DLS Worldwide business, and the International Logistics business as discontinued operations. The financial results of these businesses have been excluded from continuing operations and segment results for all periods presented unless otherwise ~~noted~~.noted. Refer to Note 2 –Discontinued Operations to our Condensed Consolidated Financial Statements for additional information.

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

~~We have activated our business continuity plans and are leveraging our strong supply chain partnerships to continue to meet the ongoing needs of our 50,000 global clients.We remain fully operational across the 29 countries and all of our printing and distribution operations remain open.~~

We are continually evolving our policies and procedures to adhere to the latest best practices being provided by the Centers for Disease Control (“CDC”) and World Health Organization (“WHO”). Our cross-functional COVID Task Force created at the onset of the pandemic has developed safety measures, policies, and procedures for our workplace. We have implemented flexible working policies, including telecommuting and staggered shifts, while allowing for voluntary leaves of absence. ~~Currently, approximately 10,000~~We recently have begun to welcome employees ~~including those providing essential services are working from home. For~~back into our offices ~~we have developed~~in a cautious and phased ~~approach for slowly and cautiously ending remote work arrangements when deemed practical.~~approach. We ~~are also enforcing~~continue to enforce social distancing policies within all of our facilities, require unvaccinated employees to wear face coverings, and ~~we are providing~~provide training for adherence to personal hygiene best practices in line with CDC and WHO guidelines.

~~In response~~We have activated our business continuity plans and are leveraging our strong supply chain partnerships to continue to meet the ~~CDC recommendation that all individuals~~ongoing needs of our 30,000 global clients. We remain fully operational across the 28 countries in ~~the U.S. wear face masks,~~which we are supplying our essential employees with a combination of disposable and cloth masks, as well as face shields, to ensure their safety and protection. With personal protective equipment in short supply around the world, our teams have exercised ingenuity and leadership to develop protective equipment within our own operations using our own equipment.operate.

Although the COVID-19 pandemic significantly impacted the Company’s financial results in 2020, and continues to create some challenges in 2021, we believe that there are three primary factors that are helping mitigate the top line impact from the pandemic. These factors include our diverse portfolio of products and services, the lack of client concentration, ~~across industries,~~ and the products and services we have introduced to meet the evolving needs of our clients.

The extent to which the ~~outbreak~~pandemic will ~~ultimately~~continue to impact our business, results of operations, financial position and cash flows will depend on future developments which remain highly uncertain and cannot be fully predicted or estimated at this time. However, amidst the global uncertainty posed by COVID-19, we are positioning the ~~company~~Company to weather ~~the~~ economic ~~downturn~~uncertainty and protect the short and long-term interests of our stakeholders. ~~These decisions are difficult but critical to preserving the short-term financial flexibility~~Continuing into 2021, we remain laser-focused on lowering our cost structure and on maintaining a sufficient level of the Company as COVID-19 presents increasing challenges across the industries we serve. We are freeing up capital to ensure we are prepared for the range of scenarios we may experience as a result of the virus. As a result, we implemented several business actions, including the implementation of an employee furlough program with RRD paid medical benefits. We had temporarily closed those production facilities most heavily impacted by client volume decreases, shifting that production to other facilities to lower costs while continuing to meet client requirements. By the end of the third quarter, facilities which were temporarily shut down have either resumed operations or were permanently closed. We suspended all 2020 employee merit increases. We accelerated cost reduction initiatives, and will continue to assess opportunities for further reduction, and have delayed capital projects and reduced consulting and other discretionary spend. We suspended our quarterly dividend effective April 6, 2020.liquidity.

To protect liquidity, we continue to hold more cash than has been typical and borrowings under our credit facility remain temporarily elevated. As of September 30, 2020 borrowings under our ABL Credit Facility are $410.0 million and cash and cash equivalents on our Condensed Consolidated Balance Sheet is $414.8 million.

Net sales ~~decreased~~increased by ~~$225.9~~$136.0 million, or ~~15.9%~~13.5%, for the three months ended ~~September~~June 30, ~~2020~~2021 compared to the same period in ~~2019. Net~~2020. Second quarter net sales ~~decreased $62.9~~were favorably impacted by $21.7 million due to ~~business dispositions, primarily the Global Document Solutions (“GDS��) business.~~changes in foreign exchange rates. Net sales also ~~decreased~~increased due to ~~lower volumes resulting~~higher volume reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in our Packaging and Labels products. The increase also reflects continued recovery from the COVID-19 pandemic, partially offset by last year’s Census project, which was completed in mid-2020.

Income from operations for the three months ended June 30, 2021 was $28.2 million, an increase of $47.2 million compared to a loss of $19.0 million for the prior year period. The increase was primarily driven by higher sales, cost control initiatives and lower ~~pricing,~~restructuring and impairment expenses, partially offset by ~~new pandemic-related product orders in certain of our businesses.~~unfavorable foreign exchange rates and higher incentive compensation.

We continue to assess opportunities to reduce our cost structure and enhance productivity throughout the business. During the three months ended ~~September~~June 30, ~~2020,~~2021, we realized significant cost savings from recent and previous restructuring activities including the reorganization of administrative and support functions across all segments, several facility consolidations, and asset rationalization. ~~Selling, general and administrative expenses (exclusive~~These savings were partially offset by the effect of depreciation and amortization) decreased by $30.2 million, or 18.0%, for the three months ended September 30, 2020 compared to the same period in 2019 reflecting business dispositions and cost control initiatives.unfavorable exchange rates.

Net cash ~~provided by~~used in operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$25.2~~$64.8 million as compared to ~~$87.8~~$44.2 million used ~~for~~in operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The ~~significant improvement is~~increase in 2021 was primarily driven by ~~working capital improvements and lower~~$23.9 million of LSC bankruptcy related payments primarily associated with lump sum settlements of two MEPP plans, higher tax and incentive compensation payments, and a $9.2 million payment to terminate certain interest ~~payments versus~~rates swaps, partially offset by lower restructuring and interest payments.

While client demand for our products and services continues to strengthen, ongoing challenges including labor shortages, supply chain disruption, inflationary increases and shipping delays caused by container shortages in key ports including China, remain. These issues, combined with the ~~prior year.~~ongoing uncertainty related to the COVID-19 pandemic, create added challenges when predicting future business performance. Excluding the unpredictability related to these factors, we now expect net sales for 2021 to be up by 1% to 3% taking into consideration reductions from the ending of the 2020 Census project and one-time pandemic related projects completed in 2020 offset by further economic recovery as the year progresses.

Our outlook assumes that the U.S. economy and the economies of the foreign countries in which we ~~have a diversified client base with limited concentration, we do have clients that~~ operate ~~in industries hard-hit by~~will continue to recover from the economic effects of COVID-19, ~~including airlines, hotel chains, cruise lines, and restaurants. During~~although the ~~third quarter, we continued to see some cancellations of programmatic projects from these clients as they worked to mitigate~~recovery may be uneven given the ~~impact~~uncertainty of the ~~virus~~pandemic. Our outlook also assumes that we will be able to pass on to our clients a substantial majority of material price increases, and that we will not experience any substantial operational outages related to labor shortages and supply chain interruptions. We continue to leverage our client relationships in order to provide a larger share of their ~~business.~~

~~Outlook~~communications needs. In addition, we expect to continue cost control and productivity initiatives, including selected facility consolidations and asset rationalizations.

~~The Company continues~~We initiated several restructuring actions during the past three years to ~~aggressively accelerate both permanent~~further reduce our overall cost structure. These restructuring actions included the closures of manufacturing facilities as well as the reorganization and ~~temporary~~consolidation of certain operations. These and future cost reduction actions are expected to ~~lessen the~~have a positive impact ~~from lower sales volume as a result of the COVID-19 pandemic.~~on operating earnings in 2021 and in future years. In addition, ~~the Company is also receiving pandemic-related orders~~we expect to implement other cost reduction opportunities, which may result in many parts of its business, including special notification letters, government mailings, product packaging, labels, signage, mail-in ballots, test kit assembly, emergency kits, protective face shields, digital creative and COVID-19 specific consumer research and analytics.additional restructuring charges. These ~~orders further mitigate the impact~~restructuring actions will be funded by cash generated from ~~COVID-19. The extent the pandemic will ultimately impact our business, results of~~ operations ~~financial position~~ and cash ~~flows will depend~~ on ~~future developments which are highly uncertain and cannot be fully predicted~~hand or, estimated at this time. In the nearer term, the Company expects fourth quarter sales to be lower than the prior year reflecting the continued impact from the COVID-19 pandemic, census work in the prior year period that will not repeat, and a modest decline due to recent business dispositions.if necessary, by utilizing our credit facilities.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2020~~2021 AS COMPARED TO THE THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2019~~2020

The following table shows the results of operations for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended											Three Months Ended
	September 30,											June 30,
	2020		2019			$ Change			% Change			2021		2020			$ Change			% Change
	(in millions, except percentages)											(in millions, except percentages)
Net sales		1,191.3		1,417.2			(225.9	)		(15.9	%)		1,145.6		1,009.6			136.0			13.5	%
Cost of sales		943.6		1,132.9			(189.3	)		(16.7	%)		928.1		817.3			110.8			13.6	%
Gross profit		247.7		284.3			(36.6	)		(12.9	%)		217.5		192.3			25.2			13.1	%
Selling, general and administrative expenses (exclusive of depreciation and amortization)		138.0		168.2			(30.2	)		(18.0	%)		143.8		138.8			5.0			3.6	%
Restructuring, impairment and other expense (income) -net		54.2		(2.3	)		56.5		nm
Restructuring, impairment and other-net													9.7		28.4			(18.7	)		(65.8	%)
Depreciation and amortization		36.2		42.0			(5.8	)		(13.8	%)		32.9		36.9			(4.0	)		(10.8	%)
Other operating expense		3.4		5.4			(2.0	)	nm				2.9		7.2			(4.3	)		(59.7	%)
Income from operations	$	15.9	$	71.0		$	(55.1	)		(77.6	%)
Income (loss) from operations												$	28.2	$	(19.0	)	$	47.2		nm

Net sales for the three months ended ~~September~~June 30, ~~2020 decreased $225.9~~2021 increased $136.0 million, or ~~15.9%~~13.5%, to ~~$1,191.3~~$1,145.6 million versus the same period in ~~2019. The third quarter of 2020 included a $62.9~~2020. Net sales increased by $21.7 million ~~decrease in sales~~ due to ~~business dispositions.~~favorable changes in foreign exchange rates. Net sales also ~~decreased~~increased due to ~~lower~~higher volume ~~as a result~~reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in our Packaging and Labels products. The increase also reflects continued recovery from the COVID-19 pandemic, ~~including reduced orders from clients in industries especially hard-hit such as airlines, lodging, restaurants, non-essential retailers, and education, and lower pricing. The sales decline was~~ partially offset by ~~pandemic-related orders.~~ last year’s Census project, which was completed in mid-2020.

Cost of sales for the three months ended ~~September~~June 30, ~~2020 decreased $189.3~~2021 increased $110.8 million, or ~~16.7%~~13.6%, to ~~$943.6~~$928.1 million versus the same period in ~~2019.~~2020. Total cost of sales ~~decreased~~increased primarily due to ~~business dispositions, cost control initiatives, and lower volumes~~higher volume across ~~certain~~most of our products and ~~services.~~services and higher cost of raw materials, partially offset by the favorable impact of cost reduction activities. As a percentage of net sales, cost of sales ~~improved 0.7 percentage points~~remained relatively unchanged for the three months ended ~~September~~June 30, ~~2020~~2021 versus the same period in ~~2019.~~2020.

Gross profit ~~decreased $36.6~~increased $25.2 million to ~~$247.7~~$217.5 million for the three months ended ~~September~~June 30, ~~2020~~2021 versus the same period in ~~2019, primarily due to lower volume. Total gross margin increased from 20.1% in 2019 to 20.8% in~~ 2020, primarily due to ~~cost control initiatives.~~higher volume. Our gross margin percentage remained relatively unchanged for the three months ended June 30, 2021 versus the same period in 2020.

Selling, general and administrative expenses ~~decreased $30.2~~increased $5.0 million to ~~$138.0~~$143.8 million for the three months ended ~~September~~June 30, ~~2020~~2021 versus the same period in ~~2019 reflecting business dispositions~~2020 primarily as a result of increased incentive compensation expense, largely attributable to the increase in our stock price and unfavorable exchange rates, partially offset by cost control initiatives. As a percentage of net sales, selling, general and administrative expenses decreased from ~~11.9%~~13.7% to ~~11.6%~~12.6% for the three months ended ~~September~~June 30, ~~2020~~2021 versus the same period in ~~2019.~~2020, reflecting the benefit of restructuring actions and other costs control initiatives.

For the three months ended ~~September~~June 30, ~~2020,~~2021, net restructuring, impairment and other charges ~~of $54.2~~decreased $18.7 million ~~included $37.3~~to $9.7 million. The decrease was primarily driven by lower restructuring activity, including a $10.5 million ~~for multi-employer pension plan charges, primarily to record a $34.5 million contingent liability related to LSC’s MEPP obligations, and $9.0 million for~~reduction in employee termination ~~costs.~~costs, and lower consulting costs compared to the prior year. See Note 7, Restructuring, Impairment and Other, and Note 14, Commitment and Contingencies, within the Notes to the Condensed Consolidated Financial Statements for further discussion.

Depreciation and amortization decreased ~~$5.8~~$4.0 million to ~~$36.2~~$32.9 million for the three months ended ~~September~~June 30, ~~2020~~2021 compared to the same period in ~~2019.~~2020. Depreciation and amortization included $4.8 ~~million and $5.3~~ million of amortization of other intangible assets related to client relationships and trade names ~~trademarks, licenses and agreements~~ for each of the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019, respectively.~~2020.

Other operating expense for the three months ended ~~September~~June 30, ~~2020~~2021 was ~~$3.4~~$2.9 million compared to ~~$5.4~~$7.2 million in the same period in ~~2019. Other operating expenses in both periods~~2020. The decrease was primarily ~~included~~the result of lower expenses related to the ~~ongoing~~ SEC and DOJ ~~investigations.~~investigations and the prior year included a $2.9 million loss on a business disposition which did not occur in the current period.

Income from operations for the three months ended ~~September~~June 30, ~~2020~~2021 was ~~$15.9~~$28.2 million, ~~a decrease~~an increase of ~~$55.1~~$47.2 million compared to ~~the three months ended September 30, 2019.~~

~~Net interest expense decreased by $3.1 million to $34.3~~a loss of $19.0 million for the three months ended ~~September~~June 30, ~~2020~~2020.

Net interest expense increased by $3.9 million to $38.5 million for the three months ended June 30, 2021 versus the same period in ~~2019,~~2020. Net interest expense included $9.2 million related to the termination of certain interest rate swaps. Refer to Note 16 – Derivatives within the Notes to the Condensed Consolidated Financial Statements for further discussion. Excluding the effects of the swap termination, our interest expense decreased approximately $5 million primarily due to prior repurchases and repayment of higher interest rate debt and lower average borrowings and interest rates on the ABL Credit ~~Facility~~Facility.

The loss on debt extinguishment in the three month period ended June 30, 2021 primarily resulted from the write-off of debt issuance costs and discount related to the Term Loan.

Investment and other ~~income, net~~income-net for the three months ended ~~September~~June 30, 2021 and 2020 ~~and 2019~~ was ~~$3.6~~$4.9 million and ~~$4.6~~$3.4 million respectively, ~~and principally~~primarily comprised of net OPEB and pension income.

The ~~effective~~ income tax ~~rate~~benefit and expense for the three months ended ~~September~~June 30, 2021 and 2020 ~~was a benefit of 39.3%~~ were primarily driven by the mix of earnings, the tax impact of our interest expense, and ~~favorable~~ changes in tax ~~law.~~laws.

Net income from discontinued operations was $0.4 million and $19.8 million in the three-months ended September 30, 2020 and 2019 respectively. Income in the three months ended September 30, 2019 included a tax benefit of $17.0 million which did not occur in the current quarter.

Net loss attributable to RRD common stockholders was ~~$8.9~~$9.4 million for the three months ended ~~September~~June 30, ~~2020~~2021 compared to ~~income~~a loss of ~~$12.6~~$57.2 million for the three months ended ~~September~~June 30, ~~2019~~2020.

	Three Months Ended						Three Months Ended
	September 30,						June 30,
	2020			2019			2021			2020
	(in millions, except percentages)						(in millions, except percentages)
Net sales	$	936.8		$	1,073.8		$	909.6		$	795.6
Income from operations		69.1			77.5			55.2			17.1
Operating margin		7.4	%		7.2	%		6.1	%		2.1	%
Restructuring, impairment and other expense (income)-net		7.0			(5.1	)
Restructuring, impairment and other-net								3.3			9.7

Net sales for the Business Services segment for the three months ended ~~September~~June 30, ~~2020~~2021 were ~~$936.8~~$909.6 million, ~~a decrease~~an increase of ~~$137.0~~$114.0 million, or ~~12.8%~~14.3%, compared to the same period in ~~2019.~~2020. Net sales ~~decreased $62.9~~increased $21.7 million due to ~~business dispositions, primarily the GDS business.~~favorable changes in exchange rates. Net sales also ~~decreased~~increased due to ~~lower~~higher volume ~~as a result~~reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in our Packaging and Labels products. The increase also reflects continued recovery from the COVID-19 ~~pandemic, and lower pricing, partially offset by pandemic-related orders particularly within our packaging and supply chain management services.~~pandemic. The following table summarizes net sales by products and services in the Business Services segment:

	Three Months Ended										Three Months Ended
	September 30,										June 30,
Products and Services	2020		2019		$ Change			% Change			2021		2020		$ Change			% Change
	(in millions, except percentages)										(in millions, except percentages)
Commercial print	$	347.7	$	442.9	$	(95.2	)		(21.5	%)	$	340.3	$	275.5	$	64.8			23.5	%
Packaging		193.6		182.1		11.5			6.3	%		179.7		150.4		29.3			19.5	%
Labels		124.7		123.9		0.8			0.6	%		131.3		113.7		17.6			15.5	%
Statements		104.3		134.0		(29.7	)		(22.2	%)		99.3		101.9		(2.6	)		(2.6	%)
Supply chain management		77.4		69.8		7.6			10.9	%		67.3		64.9		2.4			3.7	%
Forms		48.2		60.0		(11.8	)		(19.7	%)		48.8		48.6		0.2			0.4	%
Business process outsourcing		40.9		61.1		(20.2	)		(33.1	%)		42.9		40.6		2.3			5.7	%
Total Business Services	$	936.8	$	1,073.8	$	(137.0	)		(12.8	%)	$	909.6	$	795.6	$	114.0			14.3	%

Business Services segment income from operations ~~decreased $8.4~~increased $38.1 million to ~~$69.1~~$55.2 million for the three months ended ~~September~~June 30, ~~2020,~~2021, primarily due to higher volume, cost control initiatives and lower ~~volume related to the COVID-19 pandemic,~~restructuring, impairment and other expenses, partially offset by ~~cost control initiatives.~~unfavorable foreign exchange rates of approximately $10.0 million.

	Three Months Ended						Three Months Ended
	September 30,						June 30,
	2020			2019			2021			2020
	(in millions, except percentages)						(in millions, except percentages)
Net sales	$	254.5		$	343.4		$	236.0		$	214.0
Income from operations		10.3			24.4
Income (loss) from operations								9.0			(1.8	)
Operating margin		4.0	%		7.1	%		3.8	%		(0.8	%)
Restructuring and other expense-net		4.7			0.1
Restructuring and other-net								2.5			2.2

Net sales for the Marketing Solutions segment for the three months ended ~~September~~June 30, ~~2020~~2021 were ~~$254.5~~$236.0 million, ~~a decrease~~an increase of ~~$88.9~~$22.0 million, or ~~25.9%~~10.3%, compared to the same period in ~~2019.~~2020. Net sales ~~decreased~~increased primarily due to ~~lower~~higher volume ~~in direct marketing attributable to~~and higher prices, partially offset by the effects of the 2020 Census contract, which was substantially completed by June 30, ~~2020, and lower orders of promotional material from financial institutions as a result of the COVID-19 pandemic.~~2020.

The following table summarizes net sales by products and services in the Marketing Solutions segment:

	Three Months Ended										Three Months Ended
	September 30,										June 30,
Products and Services	2020		2019		$ Change			% Change			2021		2020		$ Change			% Change
	(in millions, except percentages)										(in millions, except percentages)
Direct marketing	$	125.9	$	193.5	$	(67.6	)		(34.9	%)	$	113.6	$	108.0	$	5.6			5.2	%
Digital print and fulfillment		104.4		122.5		(18.1	)		(14.8	%)		101.7		84.7		17.0			20.1	%
Digital and creative solutions		24.2		27.4		(3.2	)		(11.7	%)		20.7		21.3		(0.6	)		(2.8	%)
Total Marketing Solutions	$	254.5	$	343.4	$	(88.9	)		(25.9	%)	$	236.0	$	214.0	$	22.0			10.3	%

Marketing Solutions segment income from operations for the three months ended ~~September~~June 30, ~~2020~~2021 was ~~$10.3~~$9.0 million, ~~a decrease~~an increase of ~~$14.1~~$10.8 million compared to a loss of $1.8 million for the same period in ~~2019,~~2020, primarily due to ~~lower~~higher volume ~~attributable to the 2020 Census contract and lower volume related to~~reflective of continued recovery from the COVID-19 pandemic and cost control initiatives, partially offset by ~~cost control initiatives.~~the Census contract which was substantially completed by mid-2020.

Corporate operating expenses during the three months ended ~~September~~June 30, ~~2020~~2021 were ~~$63.5~~$36.0 million, an increase of ~~$32.6~~$1.7 million compared to the same period in ~~2019.~~2020. The increase is primarily driven by ~~$34.5 million recorded~~increased incentive compensation expense, largely attributable to an increase in ~~restructuring and other expense-net to reflect a contingent liability related to LSC’s MEPP obligations,~~our stock price, partially offset by lower other selling, generally and administrative expenses. ~~Other operating expenses primarily relate to the SEC and DOJ investigations in both quarters presented.~~ ~~The following table summarizes unallocated operating expenses and certain items impacting comparability within the activities presented as Corporate:~~

RESULTS OF OPERATIONS FOR THE ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2020~~2021 AS COMPARED TO THE ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2019~~2020

The following table shows the results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:

	Nine Months Ended										Six Months Ended
	September 30,										June 30,
	2020		2019		$ Change			% Change			2021		2020		$ Change			% Change
	(in millions, except percentages)										(in millions, except percentages)
Net sales		3,417.7		4,044.0		(626.3	)		(15.5	%)		2,318.7		2,226.5		92.2			4.1	%
Cost of sales		2,729.4		3,259.4		(530.0	)		(16.3	%)		1,877.1		1,785.9		91.2			5.1	%
Gross profit		688.3		784.6		(96.3	)		(12.3	%)		441.6		440.6		1.0			0.2	%
Selling, general and administrative expenses (exclusive of depreciation and amortization)		436.7		522.7		(86.0	)		(16.5	%)		297.1		298.7		(1.6	)		(0.5	%)
Restructuring, impairment and other-net		93.8		30.7		63.1		nm				15.5		39.6		(24.1	)		(60.9	%)
Depreciation and amortization		112.3		121.5		(9.2	)		(7.6	%)		66.7		76.1		(9.4	)		(12.4	%)
Other operating expense		15.5		3.3		12.2		nm				9.0		12.1		(3.1	)		(25.6	%)
Income from operations	$	30.0	$	106.4	$	(76.4	)		(71.8	%)	$	53.3	$	14.1	$	39.2		nm

Net sales for the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased $626.3~~2021 increased $92.2 million, or ~~15.5%~~4.1%, to ~~$3,417.7~~$2,318.7 million versus the same period in ~~2019. The nine months ended September 30, 2020 included a $205.2~~2020. Net sales increased $36.2 million ~~decrease~~ due to ~~business dispositions and a $14.4 million decrease due to unfavorable~~favorable changes in foreign exchange ~~rates. Net~~rates and were unfavorably impacted by $6.5 million due to the Chile business closure in 2020. In addition to these factors, net sales also ~~decreased~~increased due to ~~lower~~higher volume ~~as a result~~reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in our Packaging and Labels products. The increase also reflects continued recovery from the COVID-19 pandemic, ~~including reduced orders from customers~~partially offset by the Census project, which was completed in ~~industries especially hard-hit such as airlines, lodging, restaurants, non-essential retailers and education, and lower pricing.~~mid-2020.

Cost of sales for the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased $530.0~~2021 increased $91.2 million, or ~~16.3%~~5.1%, to ~~$2,729.4~~$1,877.1 million versus the same period in ~~2019~~2020, primarily due to ~~lower~~higher volume ~~business dispositions,~~ and higher cost ~~control initiatives.~~of raw materials.

Gross profit ~~decreased $96.3~~increased $1.0 million to ~~$688.3~~$441.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 versus the same period in ~~2019,~~2020, primarily due to ~~lower~~higher volume. Gross margin ~~increased~~percentage decreased from ~~19.4%~~19.8% to ~~20.1%~~19.0% for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 versus the same period in ~~2019~~2020, primarily reflecting ~~a favorable product mix~~the impact of unfavorable foreign exchange rates and ~~cost control initiatives.~~ rising costs of raw materials.

Selling, general and administrative expenses decreased ~~$86.0~~$1.6 million to ~~$436.7~~$297.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 versus the same period in ~~2019~~2020, reflecting ~~business dispositions and~~ cost control ~~initiatives.~~initiatives, partially offset by unfavorable foreign exchange rates and higher incentive compensation expense. As a percentage of net sales, selling, general and administrative expenses ~~decreased from 12.9% to~~was 12.8% for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 versus 13.4% in the same period in ~~2019.~~2020.

For the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, net restructuring, impairment and other expense ~~increased~~decreased by ~~$63.1~~$24.1 million to ~~$93.8~~$15.5 million versus the same period in ~~2019.~~2020. The ~~increase~~decrease was primarily driven by ~~$34.5 million recorded to reflect a contingent liability~~lower restructuring activity, gains on sale of several facilities, and modest gains related to ~~LSC’s~~the settlement of certain LSC MEPP ~~obligations, $29.9 million for employee termination costs, and $24.8 million for other restructuring charges.~~liabilities. See Note 7, Restructuring, Impairment, and Other, and Note 14, Commitment and Contingencies within the Notes to the Condensed Consolidated Financial Statements for further discussion.

Depreciation and amortization decreased ~~$9.2~~$9.4 million to ~~$112.3~~$66.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to the same period in ~~2019.~~2020. Depreciation and amortization included ~~$14.5~~$9.5 million and ~~$16.6~~$9.7 million of amortization of other intangible assets related to client relationships and trade names ~~trademarks, licenses and agreements~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Other operating expense for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$15.5~~$9.0 million compared to ~~$3.3~~$12.1 million for the same period in ~~2019. The current year amount includes $12.3 million of legal~~2020. Other operating expenses in both periods primarily included expenses related to the ongoing SEC and DOJ investigations.~~The prior year amount~~ primarily included an increase in reserves for an unfavorable state sales tax matter and expenses related to the ongoing SEC and DOJ investigations, partially offset by a net gain on the sale of our R&D business and the bankruptcy liquidation of RRD Brazil.

Income from operations for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$30.0~~$53.3 million, ~~a decrease~~an increase of ~~$76.4~~$39.2 million ~~or 71.8%,~~ compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

	Nine Months Ended												Six Months Ended
	September 30,												June 30,
	2020			2019			$ Change			% Change			2021			2020			$ Change		% Change
	(in millions, except percentages)												(in millions, except percentages)
Interest expense-net	$	102.7		$	115.6		$	(12.9	)		(11.2	%)	$	69.0		$	68.5		$	0.5		0.7	%
Investment and other income-net		(10.8	)		(11.3	)		(0.5	)		(4.4	%)		(9.7	)		(7.2	)		2.5		34.7	%
Loss on debt extinguishment		0.4			0.8			(0.4	)	nm				6.2			0.2			6.0	nm

Net interest expense ~~decreased by $12.9~~increased $0.5 million to ~~$102.7~~$69.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 versus the same period in ~~2019,~~2020. Net interest expense included $9.2 million related to the termination of certain interest rate swaps in the second quarter of 2021. See Note 16 – Derivatives within the Notes to the Condensed Consolidated Financial Statements for further discussion. Excluding the effects of the swap termination, our interest expense decreased approximately $9 million, primarily due to prior repurchases and repayment of higher interest rate debt ~~combined with~~and lower average borrowings and interest rates on the newly amended ABL Credit ~~Facility and Term Loan, partially offset by the debt exchange transactions.~~Facility.

Investment and other income, net for the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020 ~~and 2019~~ was ~~$10.8~~$9.7 million and ~~$11.3~~$7.2 million, respectively, and principally comprised of net pension and OPEB income.

The ~~effective~~ income tax ~~rate~~benefit and expense for the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020 ~~was a benefit of 4.8%~~were primarily driven by the mix of earnings, the tax impact of our interest expense and ~~favorable~~ changes in tax ~~law.~~ laws.

Net ~~loss~~income from discontinued operations was ~~$19.5~~$0.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020 as~~2021 compared to ~~net income~~a loss of ~~$4.9~~$19.9 million in the same period in ~~2019.~~ 2020. The net income from discontinued operations for the six months ended June 30, 2021 reflects the settlement of certain contingencies associated with the business divestitures and final net working capital adjustments. The net loss from discontinued operations in the ~~nine months ended September 30,~~first half of 2020 ~~includes~~was primarily driven by a $20.6 million non-cash charge related to impairment of goodwill and $9.1 million pre-tax loss on the sale of our Courier ~~business in the first quarter of 2020~~.

Net loss attributable to RRD common stockholders ~~$79.1~~was $10.7 million and ~~$3.2~~$70.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

	Nine Months Ended						Six Months Ended
	September 30,						June 30,
	2020			2019			2021			2020
	(in millions, except percentages)						(in millions, except percentages)
Net sales	$	2,625.4		$	3,137.5		$	1,831.7		$	1,688.7
Income from operations		123.9			140.6			108.4			54.8
Operating margin		4.7	%		4.5	%		5.9	%		3.2	%
Restructuring, impairment and other-net		22.3			21.8			6.7			15.4
Other operating expense (income)		0.2			(0.2	)
Other operating expense								—			0.2

Net sales for the Business Services segment for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were ~~$2,625.4~~$1,831.7 million, ~~a decrease~~an increase of ~~$512.1~~$143.0 million, or ~~16.3%~~8.5%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. Net sales ~~decreased $205.2~~increased $36.2 million due to ~~business dispositions, primarily the GDS business, and $14.4 million due to unfavorable~~favorable changes in foreign exchange ~~rates.~~rates and were unfavorably impacted by $6.5 million due to the Chile business closure in 2020. Net sales also ~~decreased~~increased due to ~~lower~~higher volume ~~as result~~reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in our Packaging and Labels products. The increase also reflects continued recovery from the COVID-19 ~~pandemic, including those clients in industries especially hard-hit such as airlines, lodging, restaurants, non-essential retailers, and education, and lower pricing.~~pandemic. The following table summarizes net sales by products and services in the Business Services segment:

	Nine Months Ended										Six Months Ended
	September 30,										June 30,
Products and Services	2020		2019		$ Change			% Change			2021		2020		$ Change			% Change
	(in millions, except percentages)										(in millions, except percentages)
Commercial print	$	986.6	$	1,278.8	$	(292.2	)		(22.8	%)	$	676.8	$	638.9	$	37.9			5.9	%
Packaging		459.1		484.2		(25.1	)		(5.2	%)		354.1		265.5		88.6			33.4	%
Labels		359.9		364.1		(4.2	)		(1.2	%)		260.0		235.3		24.7			10.5	%
Statements		333.1		417.1		(84.0	)		(20.1	%)		217.8		228.8		(11.0	)		(4.8	%)
Supply chain management		212.0		222.4		(10.4	)		(4.7	%)		140.0		134.6		5.4			4.0	%
Forms		149.2		181.6		(32.4	)		(17.8	%)		97.6		101.0		(3.4	)		(3.4	%)
Business process outsourcing		125.5		189.3		(63.8	)		(33.7	%)		85.4		84.6		0.8			0.9	%
Total Business Services	$	2,625.4	$	3,137.5	$	(512.1	)		(16.3	%)	$	1,831.7	$	1,688.7	$	143.0			8.5	%

Business Services segment income from operations ~~decreased $16.7~~increased $53.6 million to ~~$123.9~~$108.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, primarily due to increased volume, increased prices, cost reductions and lower ~~volume~~restructuring, impairment and other expenses, partially offset by ~~lower compensation expense, lower depreciation expense and cost control initiatives.~~the impact of unfavorable foreign exchange rates of approximately $20 million.

	Nine Months Ended						Six Months Ended
	September 30,						June 30,
	2020			2019			2021			2020
	(in millions, except percentages)						(in millions, except percentages)
Net sales	$	792.3		$	906.5		$	487.0		$	537.8
Income from operations		33.4			38.9			22.8			23.1
Operating margin		4.2	%		4.3	%		4.7	%		4.3	%
Restructuring and other-net		7.5			0.8			4.7			2.7

Net sales for the Marketing Solutions segment for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were ~~$792.3~~$487.0 million, a decrease of ~~$114.2~~$50.8 million compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. Net sales decreased ~~primarily~~ due to lower volume ~~as a result of~~in direct marketing attributable to the 2020 Census contract, which was substantially completed in mid-2020, partially offset by higher order volume from several existing customers reflecting continued recovery from the COVID-19 ~~pandemic and lower pricing.~~ pandemic.The following table summarizes net sales by products and services in the Marketing Solutions segment:

	Nine Months Ended										Six Months Ended
	September 30,										June 30,
Products and Services	2020		2019		$ Change			% Change			2021		2020		$ Change			% Change
	(in millions, except percentages)										(in millions, except percentages)
Direct marketing	$	416.8	$	479.0	$	(62.2	)		(13.0	%)	$	244.5	$	290.8	$	(46.3	)		(15.9	%)
Digital print and fulfillment		302.6		347.2		(44.6	)		(12.8	%)		199.2		198.3		0.9			0.5	%
Digital and creative solutions		72.9		80.3		(7.4	)		(9.2	%)		43.3		48.7		(5.4	)		(11.1	%)
Total Marketing Solutions	$	792.3	$	906.5	$	(114.2	)		(12.6	%)	$	487.0	$	537.8	$	(50.8	)		(9.4	%)

Marketing Solutions segment income from operations decreased ~~$5.5~~$0.3 million to ~~$33.4~~$22.8 million for the ~~nine~~six months ended ~~September~~June 30, 2021 as a result of the 2020 ~~primarily due to lower volume.~~Census contract which was substantially completed in mid-2020, partially offset by cost control initiatives.

Corporate operating expenses during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were ~~$127.3~~$77.9 million, compared to $63.8 million for the six months ended June 30, 2021, an increase of ~~$54.2 million compared to the same period in 2019.~~$14.1 million. The increase iswas primarily ~~related to higher restructuring expenses, including $34.5 million related to LSC’s MEPP obligations, and~~ ~~higher other operating expenses which are related to the ongoing SEC and DOJ investigations, partially offset~~driven by ~~lower~~increased incentive compensation expense, ~~and cost control initiatives~~. ~~The following table summarizes unallocated operating expenses and certain items impacting comparability within the activities presented as Corporate:~~largely attributable to an increase in our stock price.

We believe that we have sufficient liquidity to support our ongoing operations and to invest in future growth to create value for our stockholders. Our operating cash flows, existing cash balances and available capacity under our asset-based senior secured revolving credit facility (the “ABL Credit Facility”) are our primary sources of liquidity and are expected to be used for, among other things, capital expenditures, ~~necessary to support productivity,~~ completion of restructuring programs and payment of interest and principal on our long-term debt obligations.

The following describes our cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020.

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

Net cash ~~provided by~~used in operating activities was ~~$25.2~~$64.8 million compared to ~~a use of cash of $87.8~~$44.2 million in ~~2019.~~2020. The ~~improvement~~increase in 2021 was driven by $23.9 million of LSC bankruptcy related payments primarily ~~due to working capital improvements in addition to lower~~associated with lump sum settlements of two MEPP plans, higher tax and ~~interest~~incentive compensation payments, and ~~cash deferrals of the employer portion of payroll tax of approximately $23.3~~a $9.2 million ~~as part of the CARES Act. We expect~~payment to ~~repay one-half of the full year deferrals in the fourth quarter of 2021~~terminate certain interest rates swaps, partially offset by lower restructuring and ~~the remaining one-half in the fourth quarter of 2022.~~ ~~Operating cash flows provided by discontinued operations was $15.7 million and $10.5 million for the nine months ending September 30, 2020 and 2019, respectively.~~

interest payments. Included in net cash ~~provided by (used in)~~used in operating activities were the following operating cash outflows:

	Nine Months Ended							Six Months Ended
	September 30,							June 30,
	2020		2019		$ Change			2021		2020		$ Change
	(in millions)							(in millions)
Income tax payments, net of tax refunds	$	24.9	$	46.8	$	(21.9	)	$	25.7	$	11.4	$	14.3
Interest payments		86.4		110.2		(23.8	)		54.6		67.8		(13.2	)
Performance-based compensation payments		41.3		43.7		(2.4	)		56.6		41.4		15.2
Restructuring and MEPP payments		56.1		32.8		23.3
Restructuring payments									16.5		34.5		(18.0	)
Payments on interest rate swap terminations									9.2		—		9.2
Pension and other postretirement benefits plan contributions		6.3		5.1		1.2			2.6		4.2		(1.6	)
LSC bankruptcy related payments including MEPP									23.9		—		23.9

Significant cash (outflows) inflows included in investing and financing activities for each period were as follows:

	Nine Months Ended									Six Months Ended
	September 30,									June 30,
	2020			2019			$ Change			2021			2020			$ Change
	(in millions)									(in millions)
Capital expenditures	$	(54.4	)	$	(107.4	)	$	53.0		$	(29.9	)	$	(38.1	)	$	8.2
Acquisition of business		—			(3.0	)		3.0
Proceeds from sale of investments and other assets		29.7			32.8			(3.1	)
Proceeds from issuances of long-term debt											451.1			—			451.1
Proceeds from sale of property, plant and equipment											7.5			4.7			2.8
Disposition of businesses		16.8			10.4			6.4			(1.4	)		16.1			(17.5	)
Payments of current maturities and long-term debt		(168.8	)		(221.6	)		52.8			(444.6	)		(152.7	)		(291.9	)
Net borrowings under credit facilities		368.0			164.0			204.0			30.0			368.0			(338.0	)
Dividends paid		(2.1	)		(6.4	)		4.3			—			(2.1	)		2.1

Proceeds from disposition of businesses in 2020 principally reflect the sale of the Courier Logistics ~~Courier business and a working capital adjustment received in 2020~~business.

Proceeds from issuances of long-term debt during the ~~sale~~six months ended June 30, 2021 reflects the issuance of ~~GDS which occurred in~~$450 million of 6.125% senior secured notes due 2026 during the ~~fourth quarter of 2019.~~

second quarter. Payments of current maturities and long-term debt in the first ~~three quarters~~half of 2021 primarily reflects the repayment of $387.6 million of principal on the Term Loan and the repayment of $55.6 million of the debentures that matured on April 15, 2021. Payments of current maturities and long-term debt in the first half of 2020 ~~primarily reflect~~represent repurchases of outstanding debt with maturities from 2020 to 2024 along with the repayment of the remaining ~~$64.5 million~~ balance onof the notes that matured on June 15, 2020. ~~The debt payments during the same period in 2019 primarily reflect the repayment of $172.2~~We had $30 million of ~~outstanding notes at maturity and repurchases of outstanding debt maturing in 2021. Net borrowing~~borrowings under our ABL Credit Facility at the end of the second quarter of 2021. In the first half of 2020, we increased ~~as compared to~~our borrowings under the ~~same period in 2019. The additional borrowings are part of an effort~~ABL Credit Facility to retain financial flexibility in light of the emerging COVID-19 pandemic. ~~See Item 2Management’s Discussion and Analysis of Financial Condition and Results of Operations, Executive Overview,~~ ~~Response to COVID-~~19~~section and~~ ~~Note 15 - Debt~~ ~~to the Condensed Consolidated Financial Statements for further discussion~~

~~During the nine months of 2020, we executed various debt transactions that reduced our near-term maturities and extended our debt maturity profile. Refer to~~ ~~Note 15 – Debt~~ ~~to the Condensed Consolidated Financial Statements for further discussion.~~

Cash and cash equivalents of ~~$414.8~~$237.2 million as of ~~September~~June 30, ~~2020~~2021 included ~~$164.1~~$24.3 million in the U.S. and ~~$250.7~~$212.9 million at international locations. As a result of the Tax Act, we have opportunities to repatriate foreign cash, primarily generated from current year earnings, in a tax efficient manner. The previously taxed earnings from the transition tax and annual GILTI inclusion, as well as certain foreign earnings that receive a one hundred percent dividends received deduction may be repatriated with minimal additional tax consequences. As such, we are no longer permanently reinvested on certain foreign earnings yet remain permanently reinvested on all other foreign earnings and other outside basis differences. We record foreign withholding tax liabilitiesrelated to the certain foreign earnings for repatriation. We have recognized deferred tax liabilities of $6.7 million as of September 30, 2020 related to local taxes on certain foreign earnings which are not considered to be permanently reinvested.

Included in Cash and cash equivalents at ~~September~~June 30, ~~2020~~2021 were ~~$8.8~~$23.4 million of short-term investments, which primarily consisted of short-term deposits and money market funds. These investments are held at institutions with sound credit ratings and are expected to be highly liquid. We maintain cash pooling structures that enable participating international locations to draw on our international cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce our short-term borrowing costs or for other purposes. As a result of the Tax Act, we have opportunities to repatriate foreign cash, primarily generated from current year earnings, in a tax efficient manner.

The current availability under the ABL Credit Facility as of ~~September~~June 30, ~~2020~~2021 is shown in the table below:

	September 30, 2020		June 30, 2021
Availability	(in millions)		(in millions)
ABL Credit Facility	$	800.0
Availability reduction due to available borrowing base		203.1
Borrowing base			$	555.3
	$	596.9
Usage
Borrowings under the ABL Credit Facility	$	410.0	$	30.0
Outstanding letters of credit		59.1	$	63.3
	$	469.1

Current availability at September 30, 2020	$	127.8
Current availability at June 30, 2021			$	462.0
Cash and cash equivalents		414.8		237.2
Total available liquidity ^(a)	$	542.6	$	699.2

The failure of a financial institution supporting the ABL Credit Facility would reduce the size of our committed facility unless a replacement institution was added. ~~Currently,~~At June 30, 2021, the ABL Credit Facility iswas supported by eight U.S. financial institutions.

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

During the fourth quarter of 2017, we entered into an agreement to sell a printing facility in Shenzhen, China and transfer the related land use rights. As of ~~September~~June 30, ~~2020,~~2021, we have received deposits in accordance with the terms of the agreement of approximately ~~$122.3~~$123.3 million. These deposits are recorded in Other noncurrent liabilities on the Condensed Consolidated Balance Sheets. In accordance with the agreement, additional scheduled deposits are required to be paid to us with the final payment due in 2022. The ~~buyer continues~~closing date of the final sales transaction is uncertain at this time due to ~~work to obtain~~ the ~~necessary approvals from~~uncertainty around the timing of the regulatory process including government ~~regarding their plans to redevelop the site.~~approvals. Gross proceeds from the sale are expected to be approximately $250.0 million, subject to changes in the exchange ~~rate,~~rate.~~and we expect the transaction to close in 2022 after closing conditions are satisfied and government approvals are obtained.~~ ~~Our contract with the buyer requires them to pay the final installment in 2022 even if the government’s approval is further delayed.~~ If the buyer fails to comply with terms of the agreement or terminates for any reason, we are entitled to retain 30% of the purchase price as liquidated damages. As of ~~September~~June 30, ~~2020,~~2021, the carrying cost of the building and land use rights is recorded in Other noncurrent assets and is not material.

~~During the nine months ended September 30, 2020, we paid cash dividends of $2.1 million.~~ On April 6, 2020, the Board of Directors of the Company made a decision to suspend all dividends payments as part of the Company’s response to the COVID-19 pandemic. ~~See Item 2~~. ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, Executive Overview, Response to COVID-19~~ ~~Section for further discussion.~~

We are exposed to interest rate risk on our variable debt and price risk on our fixed-rate debt. Including the effect of the floating-to-fixed interest rate swaps (see Note 16, Derivatives, to the Condensed Consolidated Financial Statements), approximately ~~73.2%~~95.0% of our outstanding debt was comprised of fixed-rate debt as of ~~September~~June 30, ~~2020.~~2021.

We assess market risk based on changes in interest rates utilizing a sensitivity analysis that measures the potential loss in earnings, fair values and cash flows based on a hypothetical 10% change in interest rates. Using this sensitivity analysis, such changes would not have a material effect on interest income or expense and cash flows and would change the fair values of fixed-rate debt at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 by approximately ~~$36.2~~$30.7 million and ~~$25.8~~$23.7 million, respectively.

We are exposed to the impact of foreign currency fluctuations based on our global operations. Foreign currency fluctuations affect the U.S. dollar value of revenues earned and expenses incurred in foreign currencies. We are also exposed to currency risk to the extent we own assets or incur liabilities, or enter into other transactions that are not in the functional currency of the subsidiary in which we operate. We employ different practices to manage these risks, including where appropriate the use of derivative instruments, such as foreign currency forwards. As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the aggregate notional amount of outstanding foreign currency contracts was approximately ~~$274.4~~$268.7 million and ~~$179.9~~$220.7 million, respectively (see Note 16, Derivatives, to the Condensed Consolidated Financial Statements). ~~Net~~The net unrealized ~~gains~~gain from these foreign currency contracts ~~were $4.6~~was $1.9 million at ~~September~~June 30, ~~2020~~2021 and ~~$0.8~~$3.6 million at December 31, ~~2019.~~2020. We do not use derivative financial instruments for trading or speculative purposes.

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

Recently issued accounting standards and their estimated effect on our condensed consolidated financial statements are described in Note ~~18,~~17, New Accounting Pronouncements, to the Condensed Consolidated Financial Statements.

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

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

The following important factors, in addition to those discussed elsewhere in this Quarterly Report on Form 10-Q and under the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019,~~2020, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

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

Consequently, readers of this Quarterly Report on Form 10-Q should consider these forward-looking statements only as our current plans, estimates and beliefs. We do not undertake and specifically disclaims any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We undertake no obligation to update or revise any forward-looking statements in this Quarterly Report on Form 10-Q to reflect any new events or any change in conditions or circumstances.

See Item 2 of Part I under “Management of Market Risk.” ~~Other than COVID-19 discussed in Part 2 –~~ ~~Risk Factors, Section 1A, there~~There have been no significant changes to our market risk since December 31, ~~2019.~~2020. For a discussion of exposure to market risk, refer to Part II, Item 7A – Quantitative and Qualitative Disclosures about Market Risk, set forth in our ~~2019~~2020 Form 10-K.

As required by Rule 13a-15(b) and Rule 15d-15(e) of the Securities Exchange Act of 1934, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As of ~~September~~June 30, ~~2020,~~2021, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures as of ~~September~~June 30, ~~2020~~2021 were effective in ensuring information required to be disclosed in our SEC reports was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended ~~September~~June 30, ~~2020~~2021 that had materially affected, or were reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the impact of the COVID-19 pandemic on our internal controls to ensure they remain effective.

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

There is no material change in the information reported under "Part 1 ~~-Items~~-Item 1A Risk Factors" contained in our annual Report on Form 10-K for the fiscal year ended December 31, ~~2019 with the exception of the following:~~2020.

In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, during and subsequent to the first quarter of 2020, COVID-19 continued to spread across the globe at an increasing rate including a significant outbreak in the U.S. The outbreak in the U.S and most other countries forced governments to close non-essential businesses and substantially restrict the lives of most people. Measures taken by various governmental authorities, including the U.S government, to limit the spread of this virus has created tremendous business challenges for us and for other companies around the world, including many of our clients and suppliers. We have taken a number of proactive measures to manage through the impact of the growing pandemic. The extent to which the coronavirus continues to impact our operations and the operations of our suppliers and our customers will depend on future developments, which continue to be highly uncertain at this time, including the duration of the outbreak, the degree and ultimate success of government intervention in stabilizing economies around the world, and other actions to contain the coronavirus or treat its impact, among others. The continued spread of COVID-19 and ongoing governmental efforts to contain the pandemic has significantly impacted the global economy, resulting in decreased demand for some of our products and services. While the Company continues to implement measures to mitigate the effects of COVID-19, this decreased demand has adversely affected our business, operating results, financial condition and cash flows and we expect such adverse impacts to continue for the foreseeable future. Depending on the severity and duration of the global economic decline, revenue declines from decreased client demand could materially adversely affect our business, operating results, financial condition and cash flows. Additionally, declining operating results and cash flows may also cause impairments of tangible and intangible assets and an increase in allowance for doubtful accounts as a result of our inability to collect customer accounts receivable balances.

Subsequent to the spinoff of LSC Communications, Inc. and Subsidiaries (“LSC”) and Donnelley Financial Solutions, Inc. (“Donnelley Financial”), we may be contingently liable for obligations under various operating leases for office, warehouse and manufacturing locations of LSC and Donnelley Financial. In the event that LSC or Donnelley Financial, or any successor lessee, fail to make lease payments or fail to pay other obligations under these lease agreements, we may be required to satisfy those obligations to the lessor. Under various agreements executed at the time of the spinoff, LSC and Donnelley Financial agreed to fully indemnify us in the event that we would be required to make a payment on their behalf; however, there can be no assurance that the indemnities from LSC and Donnelley Financial will be sufficient to satisfy the full amount of any such contingent obligations. Our exposure to these potential contingent liabilities will decrease over time as LSC and Donnelley Financial pay monthly lease obligations and as the leases expire. As of September 30, 2020, these potential contingent obligations were approximately $58.7 million and $3.4 million for LSC and Donnelley Financial, respectively. On April 13, 2020, LSC announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. As a result, we may be liable for portions of liabilities where we share joint and several liability with LSC and other members of the control group including LSC’s frozen multiemployer pension plan (“MEPP”) liabilities and certain environmental liabilities.

We believe that the total undiscounted MEPP obligations for which LSC is responsible is approximately $100.0 million and is payable over an average 13-year period. The amount of our ultimate liability related to LSC's MEPP obligations is contingent upon whether LSC or a successor company will be required to make full or partial required contributions to their MEPPs as determined by the bankruptcy court, as well as the outcome of our negotiations with Donnelley Financial concerning how the obligations would be apportioned between us and Donnelley Financial. As part of its offer to purchase certain assets and assume certain liabilities of LSC, the Buyer is not expected to assume LSC’s MEPP liabilities. During the third quarter, we commenced negotiations with Donnelley Financial related to how the MEPP liabilities would be apportioned between the two parties, and agreed to enter into mediation, and then arbitration if an agreement is not reached though the mediation process. During the third quarter of 2020, we recorded a contingent liability of approximately $34.5 million representing our current estimate of the payments we believe we will be required to make with respect to LSC’s MEPP liabilities. This amount however could be adjusted in the future based on the final allocation as a result of the mediation process or arbitration. We will be required to make annual payments through 2034.

In addition to the aforementioned contingent obligations, we may be contingently liable for other claims arising out of the LSC bankruptcy. In October 2020, we received a demand notice from a law firm representing more than 30 individuals whose accrued supplemental non-qualified pension benefits were transferred to LSC at the time of the spin. The law firm is asserting that these accrued supplemental non-qualified pension benefits were incorrectly or not appropriately transferred to LSC at the time of the spin, and as a result we remain responsible to pay the remaining accrued vested benefits under the plan. We may also be contingently liable for other liabilities that were assumed or assigned to LSC at the time of the spin, and other general unsecured or secured creditors of LSC may make a claim against us. We intend to vigorously defend ourselves against all claims, and at this time cannot estimate the amount, if any, we would be required to pay. However, if we are required to make payments in connection with these contingent liabilities, it may adversely affect our results of operations, financial condition or cash flows.

There were no issuer purchases of equity securities during the three months ended ~~September~~June 30, ~~2020~~2021.

The ABL Credit Agreement and Term Loan Credit Agreement contain customary affirmative and negative covenants including negative covenants restricting, among other things, our ability to incur debt, make investments, make certain restricted payments (including payments on certain other debt and external dividends), incur liens securing other debt, consummate certain fundamental transactions, enter into transactions with affiliates and consummate asset sales.

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

Delaware		36-1004130
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

35 West Wacker Drive, Chicago, Illinois		60601
(Address of principal executive offices)		(Zip code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	RRD	New York Stock Exchange
Preferred Stock Purchase Rights		New York Stock Exchange

Large Accelerated filer	☐	Accelerated filer	☒

Non-Accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

		Page
	PART I

Item 1.	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020	3
	Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	5
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2923
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4235
Item 4.	Controls and Procedures	4235

	PART II

Item 1.	Legal Proceedings	4336
Item 1A.	Risk Factors	4336
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
~~Item 4.~~	~~Mine Safety Disclosures~~	4436
Item 6.	Exhibits	4537

Signatures		4638

		Beginning Balance December 31, 2019				Additional Allowance Recognized Due to Adoption of Topic ASC326				Credit Loss Expense for the Period				Write offs During the Period				Ending Balance September 30, 2020
Trade receivables		$	14.3				0.2				5.5				(2.7	)		$	17.3

	September 30, 2020		December 31, 2019
Receivables, net of allowance	$	101.2	$	120.6
Operating lease right-of-use assets		2.8		8.8
Goodwill		28.7		53.3
Intangible assets, net		8.8		10.9
Other assets		7.7		7.0
Total assets of discontinued operations	$	149.2	$	200.6


Accounts payable	$	52.5	$	53.3
Accrued expenses and other liabilities		28.6		38.8
Total liabilities of discontinued operations	$	81.1	$	92.1

	Contract Liabilities
	Short-Term		Long-Term
Balance at December 31, 2019	$	18.9	$	0.2
Balance at September 30, 2020		12.6		—


4.1		Indenture, dated as of April 28, 2021, among R.R. Donnelley & Sons Company, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee and as notes collateral agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed April 29, 2021).

4.2		Form of 6.125% Senior Secured Notes due 2026 (included in Exhibit 4.1).

4.3		Supplemental Indenture No. 1, dated as of May 10, 2021, among R.R. Donnelley & Sons Company, the subsidiary guarantors party thereto, solely for the purposes of Article III, Section 4.1, Section 4.7, Section 4.8 and Section 4.13 of Supplemental Indenture No. 1, RRD Netherlands LLC, as specified pledgor, and U.S. Bank National Association, as trustee and as notes collateral agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed May 11, 2021).

4.4		Second Amendment to Rights Agreement, dated as of May 17, 2021, between R. R. Donnelley & Sons Company and Computershare Trust Company, N.A., as rights agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed May 18, 2021).

10.1		Amendment No. 2 to Credit Agreement, dated as of April 16, 2021, among R. R. Donnelley and Sons Company, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 19, 2021).

31.1*		Certification by Daniel L. Knotts, President and Chief Executive Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934

31.2*		Certification by Terry D. Peterson, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934

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

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

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R.R. DONNELLEY & SONS COMPANY

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