10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2016

OR

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

Commission File Number 1-37728

Donnelley Financial Solutions, Inc.

(Exact name of registrant as specified in its charter)

Delaware	36-4829638
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
35 West Wacker Drive, Chicago, Illinois	60601
(Address of principal executive offices)	(Zip code)

(844) 866-4337

(Registrant’s telephone number, including area code)

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.

Yes   ☐    No ☒* 

*The registrant became subject to such requirements on September 20, 2016 and it has filed all reports so required since that date.

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

Yes  ☒    No  ☐

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

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

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

Yes  ☐    No  ☒

As of November 4, 2016, 32.6 million shares of common stock were outstanding.  

1

DONNELLEY FINANCIAL SOLUTIONS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016

TABLE OF CONTENTS

Part I
FINANCIAL INFORMATION		Page
Item 1:	Condensed Combined Financial Statements (unaudited)	3
	Condensed Combined Statements of Operations for the three and nine months ended September 30, 2016 and 2015	3
	Condensed Combined Statements of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015	4
	Condensed Combined Balance Sheets as of September 30, 2016 and December 31, 2015	5
	Condensed Combined Statements of Cash Flows for the nine months ended September 30, 2016 and 2015	6
	Notes to Condensed Combined Financial Statements	7
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3:	Quantitative and Qualitative Disclosure About Market Risk	33
Item 4:	Controls and Procedures	33

Part II
OTHER INFORMATION		Page
Item 1:	Legal Proceedings	34
Item 1A:	Risk Factors	34
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 4:	Mine Safety Disclosures	34
Item 6:	Exhibits	35
Signatures		37

2

Donnelley Financial Solutions, Inc.

Condensed Combined Statements of Operations

For the Three and Nine Months Ended September 30, 2016 and 2015

(in millions, except per share data)

(UNAUDITED)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2016			2015		2016		2015
Services net sales	$	139.4		$	142.1	$	454.1	$	479.9
Products net sales		85.0			89.5		308.4		331.0
Total net sales		224.4			231.6		762.5		810.9
Services cost of sales (exclusive of depreciation and amortization)		64.2			71.1		214.6		222.4
Services cost of sales with RRD affiliates (exclusive of depreciation and amortization)		8.7			9.3		29.4		31.5
Products cost of sales (exclusive of depreciation and amortization)		62.0			50.9		179.9		177.5
Products cost of sales with RRD affiliates (exclusive of depreciation and amortization)		11.5			12.9		48.6		58.4
Total cost of sales		146.4			144.2		472.5		489.8
Selling, general and administrative expenses (exclusive of depreciation and    amortization)		48.5			47.5		156.8		151.2
Restructuring, impairment and other charges-net		1.7			1.4		3.6		3.3
Depreciation and amortization		9.8			10.3		30.1		32.0
Income from operations		18.0			28.2		99.5		134.6
Interest (income) expense-net		(0.1	)		0.3		0.3		0.9
Earnings before income taxes		18.1			27.9		99.2		133.7
Income tax expense		7.9			11.1		39.3		52.6
Net earnings	$	10.2		$	16.8	$	59.9	$	81.1
Net earnings per share (Note 8):
Basic and diluted net earnings per share	$	0.31		$	0.52	$	1.85	$	2.50
Basic and diluted common shares outstanding		32.4			32.4		32.4		32.4

See Notes to Unaudited Condensed Combined Financial Statements

3

Donnelley Financial Solutions, Inc.

Condensed Combined Statements of Comprehensive Income

For the Three and Nine Months Ended September 30, 2016 and 2015

(in millions)

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Net earnings	$	10.2		$	16.8		$	59.9		$	81.1
Other comprehensive (loss) income, net of tax:
Translation adjustments		0.2			(4.3	)		4.2			(7.0	)
Adjustment for net periodic pension plan cost		(0.2	)		5.5			(0.4	)		16.3
Other comprehensive income		—			1.2			3.8			9.3
Comprehensive income	$	10.2		$	18.0		$	63.7		$	90.4

See Notes to Unaudited Condensed Combined Financial Statements

4

Donnelley Financial Solutions, Inc.

Condensed Combined Balance Sheets

As of September 30, 2016 and December 31, 2015

(in millions, except per share data)

(UNAUDITED)

	September 30,			December 31,
	2016			2015
ASSETS
Cash and cash equivalents	$	53.0		$	15.1
Receivables, less allowances for doubtful accounts of $5.4 in 2016 (2015 - $4.6)		198.5			146.2
Inventories		25.1			22.2
Prepaid expenses and other current assets		13.6			7.3
Total current assets		290.2			190.8
Property, plant and equipment-net		32.8			33.0
Goodwill		446.8			446.8
Other intangible assets-net		58.4			69.3
Software-net		45.1			43.4
Deferred income taxes		11.8			10.6
Other noncurrent assets		28.9			23.7
Total assets	$	914.0		$	817.6
LIABILITIES
Accounts payable	$	60.2		$	39.5
Accrued liabilities		84.8			75.4
Short-term debt		17.1			8.8
Total current liabilities		162.1			123.7
Long-term debt (Note 11)		619.4			—
Note payable with an RRD affiliate		—			29.2
Deferred compensation liabilities		29.4			28.5
Other noncurrent liabilities		14.5			12.7
Total liabilities		825.4			194.1
Commitments and Contingencies (Note 12)
EQUITY
Accumulated other comprehensive loss		(12.2	)		(16.0	)
Net parent company investment		100.8			639.5
Total equity		88.6			623.5
Total liabilities and equity	$	914.0		$	817.6

See Notes to Unaudited Condensed Combined Financial Statements

5

Donnelley Financial Solutions, Inc.

Condensed Combined Statements of Cash Flows

For the Nine Months Ended September 30, 2016 and 2015

(in millions)

(UNAUDITED)

	Nine Months Ended
	September 30,
	2016			2015
OPERATING ACTIVITIES
Net earnings	$	59.9		$	81.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		30.1			32.0
Provision for doubtful accounts receivable		1.7			0.8
Share-based compensation		1.2			1.3
Deferred income taxes		(1.0	)		7.2
Other		0.7			0.2
Changes in operating assets and liabilities - net of acquisitions:
Accounts receivable - net		(54.6	)		(40.4	)
Inventories		(2.9	)		(2.1	)
Prepaid expenses and other current assets		(6.3	)		0.6
Accounts payable		17.9			2.9
Income taxes payable and receivable		(0.6	)		0.4
Accrued liabilities and other		10.7			(25.0	)
Net cash provided by operating activities		56.8			59.0
INVESTING ACTIVITIES
Capital expenditures		(14.0	)		(16.9	)
Purchases of investments		(3.5	)		—
Other investing activities		0.5			—
Net cash used in investing activities		(17.0	)		(16.9	)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt		348.2			—
Net change in short-term debt		(8.8	)		(18.9	)
Debt issuance costs		(9.3	)		—
Other financing activities		—			(14.8	)
Net transfers to Parent and affiliates		(336.2	)		(20.9	)
Net cash used in financing activities		(6.1	)		(54.6	)
Effect of exchange rate on cash and cash equivalents		4.2			(2.6	)
Net increase (decrease) in cash and cash equivalents		37.9			(15.1	)
Cash and cash equivalents at beginning of year		15.1			28.6
Cash and cash equivalents at end of period	$	53.0		$	13.5
Supplemental non-cash disclosure:
Debt exchange with RR Donnelley, including $5.5 million of debt issuance costs	$	300.0		$	—
Settlement of intercompany note payable		29.6			—
Accrued debt issuance costs		1.6			—

See Notes to Unaudited Condensed Combined Financial Statements

6

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

Note 1. Overview and Basis of Presentation

Description of Business and Separation

Donnelley Financial Solutions, Inc. (“Donnelley Financial,” “the Company” and “we”) is a financial communications services company that supports global capital markets compliance and transaction needs for its corporate clients and their advisors (such as law firms and investment bankers) and global investment markets compliance and analytics needs for mutual fund companies, variable annuity providers and broker/dealers. With proprietary technology such as data storage and workflow collaboration tools, deep subject matter expertise and a global footprint, Donnelley Financial produces, manages, stores, distributes and translates documents and electronic communications in order to deliver timely financial communications to investors and documents in a manner that complies with regulatory commissions.

Donnelley Financial’s Registration Statement on Form 10, as amended (“Form 10), was declared effective by the U.S. Securities and Exchange Commission (“SEC”) on September 20, 2016. On October 1, 2016, Donnelley Financial became an independent publicly traded company through the distribution by R.R. Donnelley & Sons Company (“RRD”) of approximately 26.2 million shares, or 80.75%, of Donnelley Financial common stock to RRD shareholders (the “Separation”). Holders of RRD common stock received one share of Donnelley Financial common stock for every eight shares of RRD common stock held on September 23, 2016. RRD retained approximately 6.2 million shares of Donnelley Financial common stock, or a 19.25% interest in Donnelley Financial, as part of the Separation, but expects to dispose of the common stock that it retained in the 12-month period following the Separation. Donnelley Financial’s common stock began regular-way trading under the ticker symbol “DFIN” on the New York Stock Exchange on October 3, 2016.  On October 1, 2016, RRD also completed the previously announced separation of LSC Communications, Inc. (“LSC”), its publishing and retail-centric print services and office products business.

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

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

The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients.

Basis of Presentation

The accompanying unaudited condensed combined interim financial statements have been prepared on a stand-alone basis and are derived from RRD’s consolidated financial statements and accounting records.  The unaudited condensed combined financial statements include the financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  

7

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

The financial data presented herein is unaudited and should be read in conjunction with the audited combined financial statements and accompanying notes for the year ended December 31, 2015 included in our Form 10. In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented.  Results of interim periods should not be considered indicative of the results of the full year. These unaudited condensed combined interim financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed combined financial statements. Actual results could differ from these estimates.

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

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

The income tax amounts in these unaudited condensed combined financial statements have been calculated based on a separate income tax return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions.

RRD maintains various benefit and share-based compensation plans at a corporate level.  Donnelley Financial employees participated in those programs and a portion of the cost of those plans is included in Donnelley Financial’s unaudited condensed combined financial statements.  However, Donnelley Financial’s unaudited condensed combined balance sheets do not include any equity related to share-based compensation plans.  On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. Refer to Note 5, Retirement Plans, for further details regarding the Company’s pension and other postretirement benefit plans. Refer to Note 6, Share Based Compensation, for further details regarding the Company’s share-based compensation plans.

Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Included in the unaudited condensed combined financial statements are net revenues from intercompany sales of $1.1 million and $1.9 million for the three months ended September 30, 2016 and September 30, 2015, respectively, and $3.6 million and $5.8 million for the nine months ended September 30, 2016 and September 30, 2015, respectively. Donnelley Financial utilizes RRD for freight and logistics, production of certain printed products and outsourced business services functions. Included in the unaudited condensed combined financial statements are cost of sales to RRD and affiliates of $20.2 million and $22.2 million for the three months ended September 30, 2016 and September 30, 2015, respectively, and $78.0 million and $89.9 million for the nine months ended September 30, 2016 and September 30, 2015, respectively.  Intercompany receivables and payables with RRD are reflected within net parent company investment in the accompanying unaudited condensed combined financial statements. See Note13, Related Parties, for a further description of related party transactions.

8

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

Note 2. Inventories

The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at September 30, 2016 and December 31, 2015 were as follows:

	September 30,		December 31,
	2016		2015
Raw materials and manufacturing supplies	$	8.1	$	8.0
Work in process		11.2		9.6
Finished goods		5.8		4.6
Total	$	25.1	$	22.2

Note 3. Property, Plant and Equipment

The components of the Company’s property, plant and equipment at September 30, 2016 and December 31, 2015 were as follows:

	September 30,			December 31,
	2016			2015
Land	$	10.0		$	10.0
Buildings		44.5			44.7
Machinery and equipment		105.7			121.4
		160.2			176.1
Less: Accumulated depreciation		(127.4	)		(143.1	)
Total	$	32.8		$	33.0

Depreciation expense was $1.4 million and $1.9 million for the three months ended September 30, 2016 and 2015, respectively, and $6.1 million and $6.8 million for the nine months ended September 30, 2016 and 2015, respectively.

Note 4. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2016 were as follows:

	U.S.		International		Total
Net book value as of December 31, 2015	$	429.2	$	17.6	$	446.8
Foreign exchange and other adjustments		—		—		—
Net book value as of September 30, 2016	$	429.2	$	17.6	$	446.8

The components of other intangible assets at September 30, 2016 and December 31, 2015 were as follows:

	September 30, 2016							December 31, 2015
	Gross							Gross
	Carrying		Accumulated			Net Book		Carrying		Accumulated			NetBook
	Amount		Amortization			Value		Amount		Amortization			Value
Customer relationships	$	139.8	$	(82.3	)	$	57.5	$	140.2	$	(71.8	)	$	68.4
Trade names		6.3		(5.5	)		0.8		6.3		(5.5	)		0.8
Trademarks, licenses and agreements		3.2		(3.1	)		0.1		6.2		(6.1	)		0.1
Total other intangible assets	$	149.3	$	(90.9	)	$	58.4	$	152.7	$	(83.4	)	$	69.3

Amortization expense for other intangible assets was $3.6 million and $3.9 million for the three months ended September 30, 2016 and 2015, respectively, and $10.8 million and $11.7 million for the nine months ended September 30, 2016 and 2015, respectively.

9

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

The following table outlines the estimated annual amortization expense related to other intangible assets as of September 30, 2016:

For the year ending December 31,	Amount
2016	$	14.4
2017		14.4
2018		13.8
2019		13.8
2020		12.4
2021 and thereafter		0.4
Total	$	69.2

Note 5. Retirement Plans

Donnelley Financial’s Pension Plans

RRD maintained a defined benefit plan (the “plan”) for certain current and former U.S. employees of RRD. Effective December 31, 2013, RRD merged the plan into a separate defined benefit pension plan for Donnelley Financial to create a combined defined benefit pension plan (the “combined plan”). During 2015, the sponsorship of the combined plan was transferred to RRD, which became the legal obligor of the combined plan. Accordingly, the obligations of the combined plan are not reflected in the condensed combined balance sheet of Donnelley Financial as of December 31, 2015.

The components of the estimated net pension plan expense (income) for Donnelley Financial’s pension plans for the three and nine months ended September 30, 2016 and 2015 were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Pension expense (income)
Interest cost	$	—		$	36.9		$	—		$	110.5
Expected return on assets		—			(52.7	)		—			(158.0	)
Amortization, net		(0.2	)		9.1			(0.4	)		27.3
Net pension income	$	(0.2	)	$	(6.7	)	$	(0.4	)	$	(20.2	)
Less: income allocated to RRD affiliates		—			6.4			—			18.7
Net periodic benefit income, net of allocation	$	(0.2	)	$	(0.3	)	$	(0.4	)	$	(1.5	)

On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. The Company’s primary defined benefit plan is frozen. No new employees will be permitted to enter the Company’s frozen plan and participants will earn no additional benefits. Benefits are generally based upon years of service and compensation. These defined benefit retirement income plans are funded in conformity with the applicable government regulations. The Company funds at least the minimum amount required for all funded plans using actuarial cost methods and assumptions acceptable under government regulations.

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

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

10

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

Donnelley Financial’s condensed combined statements of operations include expense allocations for these benefits. These allocations were funded through intercompany transactions with RRD which are reflected within net parent company investment in Donnelley Financial. Total RRD pension and postretirement benefit plan net income allocated to Donnelley Financial, related to pension cost and postretirement benefits, was $1.3 million and $1.0 million in the three months ended September 30, 2016 and 2015, respectively, and $4.2 million and $3.0 million in the nine months ended September 30, 2016 and 2015, respectively. Included in these is an allocation for other postretirement benefit plans for $0.3 million and $0.5 million in the three months ended September 30, 2016 and 2015, respectively, and $1.0 million and $1.5 million in the nine months ended September 30, 2016 and 2015, respectively.  These allocations are reflected in the Company’s cost of sales and selling, general and administrative expenses.  

Note 6. Share Based Compensation

RRD maintained an incentive stock program for the benefit of its officers, directors and certain employees, including certain Donnelley Financial employees.  The following disclosures represent the portion of RRD’s program in which Donnelley Financial’s employees and directors participated.  RRD’s share-based compensation programs in which Donnelley Financial employees participated included restricted stock units (“RSUs”).  

Share-based compensation expense includes expense attributable to the Company based on the award terms previously granted to the Company’s employees and an allocation of compensation expense for RRD’s corporate and shared functional employees.  As the share-based compensation plans are RRD’s plans, the amounts have been recognized through net parent company investment on the condensed combined balance sheets.  Total compensation expense related to all share based compensation plans was $0.2 million and $0.3 million for the three months ended September 30, 2016 and 2015, respectively, and $1.2 million and $1.3 million for the nine months ended September 30, 2016 and 2015, respectively.

In connection with the Separation, as of October 1, 2016 employee stock options and restricted stock units were adjusted and converted into new equity awards using a 10-day volume weighted average share price of Donnelley Financial, RRD and LSC, as described in the Separation and Distribution Agreement. Upon the Separation on October 1, 2016, holders of certain RRD stock options and RSUs received awards in Donnelley Financial, RRD and LSC pursuant to the Separation and Distribution Agreement. Converted awards retained the same vesting schedule and expiration date of the original awards.

On October 1, 2016, the Company awarded 156,169 shares of restricted stock and 60,748 RSUs to certain employees under the Donnelley Financial Solutions Performance Incentive Plan. 50% of each of the awards of restricted stock and RSUs will vest two years from the grant date and 50% will vest three years from the grant date. Vesting of the restricted stock awards is also subject to performance metrics. Both the restricted stock and RSU 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. On October 1, 2016, the Company also granted 16,620 restricted stock units to members of the Board of Directors, as a pro-rata portion of their annual equity retainer.

Note 7. Equity

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

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

11

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

Net transfers to parent company during the nine months ended September 30, 2016 included the transfer of $340.2 million of proceeds from borrowings under the Company’s $350.0 million senior secured term loan B facility and a $300.0 million debt exchange with RRD, partially offset by a $29.6 million non-cash settlement of an intercompany note payable and other transfers from RRD. Refer to Note 11, Debt, for further details regarding these transactions.

The Company’s equity as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows:

				Accumulated
	Net Parent			Other
	Company			Comprehensive			Total
	Investment			Loss			Equity
Balance at December 31, 2014	$	1,025.2		$	(673.7	)	$	351.5
Net earnings		81.1			—			81.1
Transfers to parent company, net		(15.5	)		—			(15.5	)
Other comprehensive income		—			9.3			9.3
Balance at September 30, 2015	$	1,090.8		$	(664.4	)	$	426.4

Note 8. Earnings per Share

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net earnings	$	10.2	$	16.8	$	59.9	$	81.1
Basic and diluted net earnings per share	$	0.31	$	0.52	$	1.85	$	2.50
Basic and diluted common shares outstanding		32.4		32.4		32.4		32.4

Note 9. Comprehensive Income

The components of other comprehensive income and income tax expense allocated to each component for the three and nine months ended September 30, 2016 and 2015 were as follows:

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

12

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

	Three Months Ended								Nine Months Ended
	September 30, 2015								September 30, 2015
	Before Tax			Income Tax		Net of Tax			Before Tax			Income Tax		Net of Tax
	Amount			Expense		Amount			Amount			Expense		Amount
Translation adjustments	$	(4.3	)	$	—	$	(4.3	)	$	(7.0	)	$	—	$	(7.0	)
Adjustment for net periodic pension plan cost		9.1			3.6		5.5			27.3			11.0		16.3
Other comprehensive income	$	4.8		$	3.6	$	1.2		$	20.3		$	11.0	$	9.3

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

	Pension Plan Cost			Translation Adjustments			Total
Balance at December 31, 2015	$	—		$	(16.0	)	$	(16.0	)
Other comprehensive income before reclassifications		—			4.2			4.2
Amounts reclassified from accumulated other comprehensive loss		(0.4	)		—			(0.4	)
Net change in accumulated other comprehensive loss		(0.4	)		4.2			3.8
Balance at September 30, 2016	$	(0.4	)	$	(11.8	)	$	(12.2	)

Accumulated other comprehensive loss by component as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows:

	Pension Plan Cost			Translation Adjustments			Total
Balance at December 31, 2014	$	(665.2	)	$	(8.5	)	$	(673.7	)
Other comprehensive loss before reclassifications		—			(7.0	)		(7.0	)
Amounts reclassified from accumulated other comprehensive loss		16.3			—			16.3
Net change in accumulated other comprehensive loss		16.3			(7.0	)		9.3
Balance at September 30, 2015	$	(648.9	)	$	(15.5	)	$	(664.4	)

Reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2016 and 2015 were as follows:  

	Three Months Ended					Nine Months Ended					Classification in the
	September 30,					September 30,					Condensed Combined
	2016			2015		2016			2015		Statements of Operations
Amortization of pension plan cost:
Net actuarial (loss) income	$	(0.2	)	$	9.1	$	(0.4	)	$	27.3	(a)
Reclassifications before tax		(0.2	)		9.1		(0.4	)		27.3
Income tax expense		—			3.6		—			11.0
Reclassifications, net of tax	$	(0.2	)	$	5.5	$	(0.4	)	$	16.3

(a) These accumulated other comprehensive (loss) income components are included in the calculation of net periodic pension (income) expense, a component of which was allocated to Donnelley Financial, and recognized in cost of sales and selling, general and administrative expenses in the condensed combined statements of operations (see Note 5, Retirement Plans).

13

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

Note 10. Segment Information

The Company’s segments are summarized below:

United States

The U.S. segment serves capital market and investment market clients in the U.S. by delivering products and services to help create, manage, and deliver, accurate and timely financial communications to investors and regulators. The Company also provides virtual data rooms to facilitate the deal management requirements of capital markets and mergers and acquisitions transactions, and provides data and analytics services that help professionals uncover intelligence from disclosures contained within public filings made with the SEC. The U.S segment also includes language solutions capabilities, through which the Company can translate documents and create content in up to 140 different languages for its clients, and commercial print.

International

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

Corporate

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

Information by Segment

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

								Income(Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Three Months Ended September 30, 2016
U.S.	$	193.6	$	(1.3	)	$	192.3	$	18.7		$	8.5	$	1.3
International		33.2		(1.1	)		32.1		1.1			1.1		—
Total operating segments		226.8		(2.4	)		224.4		19.8			9.6		1.3
Corporate		—		—			—		(1.8	)		0.2		0.4
Total operations	$	226.8	$	(2.4	)	$	224.4	$	18.0		$	9.8	$	1.7

								Income(Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Three Months Ended September 30, 2015
U.S.	$	203.3	$	(1.7	)	$	201.6	$	28.2		$	9.1	$	5.7
International		30.6		(0.6	)		30.0		0.2			1.1		0.4
Total operating segments		233.9		(2.3	)		231.6		28.4			10.2		6.1
Corporate		—		—			—		(0.2	)		0.1		—
Total operations	$	233.9	$	(2.3	)	$	231.6	$	28.2		$	10.3	$	6.1

14

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

								Income(Loss)					Depreciation
	Total		Intersegment			Net		from			Assets of		and		Capital
	Sales		Sales			Sales		Operations			Operations		Amortization		Expenditures
Nine Months Ended September 30, 2016
U.S.	$	666.4	$	(4.0	)	$	662.4	$	100.0		$	714.2	$	26.2	$	10.2
International		103.9		(3.8	)		100.1		7.2			99.9		3.2		1.2
Total operating segments		770.3		(7.8	)		762.5		107.2			814.1		29.4		11.4
Corporate		—		—			—		(7.7	)		99.9		0.7		2.6
Total operations	$	770.3	$	(7.8	)	$	762.5	$	99.5		$	914.0	$	30.1	$	14.0

								Income(Loss)					Depreciation
	Total		Intersegment			Net		from			Assets of		and		Capital
	Sales		Sales			Sales		Operations			Operations		Amortization		Expenditures
Nine Months Ended September 30, 2015
U.S.	$	708.8	$	(6.6	)	$	702.2	$	128.6		$	693.5	$	28.4	$	16.1
International		110.5		(1.8	)		108.7		10.0			92.7		3.3		0.8
Total operating segments		819.3		(8.4	)		810.9		138.6			786.2		31.7		16.9
Corporate		—		—			—		(4.0	)		200.4		0.3		—
Total operations	$	819.3	$	(8.4	)	$	810.9	$	134.6		$	986.6	$	32.0	$	16.9

Note 11. Debt

On September 30, 2016, in connection with the Separation, the Company entered into a $350.0 million senior secured term loan B facility (the “Term Loan Credit Facility”) and a $300.0 million senior secured revolving credit facility (the “Revolving Facility,” and, together with the Term Loan Credit Facility, the “Credit Agreement”). The Credit Agreement is subject to a number of covenants, including a minimum Interest Coverage Ratio and a maximum Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $15.0 million in aggregate. As of September 30, 2016, there were no borrowings under the Revolving Facility.

On September 30, 2016, also in connection with the Separation, the Company issued $300.0 million of 8.25% senior unsecured notes due October 15, 2024 (the “Notes”). Interest on the Notes is payable semi-annually on April 15 and October 15, commencing on April 15, 2017. The issuance of the Notes was part of a debt exchange that resulted in the settlement of certain of RRD's bonds.Borrowings under the Term Loan Credit Facility were used to provide $340.2 million of cash to RRD, pursuant to the Separation Agreement, as of September 30, 2016. The remainder of the net proceeds was used for general corporate purposes.

In connection with the offering of the Notes, the Company entered into a registration rights agreement, dated as of September 30, 2016 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the SEC with respect to an offer to exchange the Notes for registered notes which will have terms identical in all material respects to the Notes except that the registered notes will not contain terms that provide for restrictions on transfer, and use its reasonable best efforts to cause the exchange offer registration statement to be declared effective by the SEC by June 27, 2017. In certain circumstances, the Company may be required to file a shelf registration statement with the SEC registering the resale of the Notes by the holders thereof, in lieu of an exchange offer to such holders. The Company will be required to pay specified additional interest on the Notes if it fails to comply with its registration obligations under the Registration Rights Agreement.

During the third quarter of 2016, the Company settled an intercompany note payable with RRD. Refer to Note 13, Related Parties for further details.

15

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

The Company’s debt as of September 30, 2016 and December 31, 2015 consisted of the following:

	September 30,			December 31,
	2016			2015
Term Loan Credit Facility	$	348.2		$	—
8.25% senior notes due October 15, 2024		300.0		—
Other	—				8.8
Unamortized debt issuance costs		(11.7	)	—
Total debt		636.5			8.8
Less: current portion		(17.1	)		(8.8	)
Long-term debt	$	619.4		$	—

The fair value of the senior notes, which was determined using the market approach based upon interest rates available to the Company for borrowings with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. As of September 30, 2016, the fair value of the Company’s debt was equivalent to its book value.

Note 12. Commitments and Contingencies

Litigation

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

Note 13.  Related Parties

Transition Services Agreements

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

Commercial Arrangements

The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients.

16

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

Stockholder and Registration Rights Agreement

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

Allocations from RRD

RRD provided Donnelley Financial with certain services, which include, but are not limited to information technology, finance, legal, human resources, internal audit, treasury, tax, investor relations and executive oversight. The financial information in these condensed combined financial statements does not necessarily include all the expenses that would have been incurred had Donnelley Financial been a separate, standalone entity for all periods presented. RRD charges Donnelley Financial for these services based on direct usage when possible. When specific identification is not practicable, the pro rata basis of revenue or employee headcount, or some other measure is used. These allocations were reflected as follows in the condensed combined financial statements:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Costs of goods sold allocation	$	8.3	$	9.5	$	28.0	$	29.2
Selling, general and administrative allocation		38.3		38.9		129.4		126.9
Depreciation and amortization		5.3		5.2		15.2		16.7
Total allocations from RRD	$	51.9	$	53.6	$	172.6	$	172.8

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

Related Party Revenues

Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Net revenues from intercompany sales of $1.1 million and $1.9 million for three months ended September 30, 2016 and 2015, respectively, and $3.6 million and $5.8 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statement of operations.

Related Party Purchases

Donnelley Financial utilizes RRD for freight and logistics and services as well as certain production of printed products.  Cost of sales of $11.5 million and $12.9 million for the three months ended September 30, 2016 and 2015, respectively, and $48.6 million and $58.4 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statements of operations for these purchases.

Donnelley Financial also utilizes RRD’s business process outsourcing business for certain composition, XBRL and other functions.  Cost of sales of $8.7 million and $9.3 million for the three months ended September 30, 2016 and 2015, respectively, and $29.4 million and $31.5 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statements of operations for these purchases. 

Intercompany payables with RRD and affiliates for these purchases are reflected within net parent company investment in the condensed combined financial statements.

17

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

Share-Based Compensation

Certain Donnelley Financial employees participate in RRD’s share-based compensation plans, the costs of which have been allocated to Donnelley Financial and recorded in selling, general and administrative expenses in the condensed combined statements of operations. Share-based compensation costs allocated to the Company were $0.2 million and $0.3 million for the three months ended September 30, 2016 and 2015, respectively, and $1.2 million and $1.3 million for the nine months ended September 30, 2016 and 2015, respectively.

Retirement Plans

Donnelley Financial employees participated in pension and other postretirement plans sponsored by RRD.  These costs are reflected in the Company’s cost of sales and selling, general and administrative expenses in the condensed combined statements of operations.  These costs were funded through intercompany transactions with RRD which are reflected within the net parent company investment.

On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. Refer to Note 5, Retirement Plans, for further details regarding the Company’s pension and other postretirement benefit plans.

Cash and Cash Equivalents

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

In accordance with the Separation and Distribution Agreement, there will be a cash adjustment payable to or receivable from RRD for the September 30, 2016 cash balance greater or less than an agreed-upon target cash balance of $50.0 million as defined in the Separation and Distribution Agreement. The Separation and Distribution Agreement also includes a provision for RRD to make a future cash payment of $68.0 million to Donnelley Financial no later than April 1, 2017. The $68.0 million receivable was recorded as of October 1, 2016.

Debt

RRD’s third party debt and related interest expense have not been allocated to the Company for any of the periods presented as the Company was not the legal obligor of the debt and the borrowings were not directly related to the Company’s business. An intercompany note payable with RRD at December 31, 2015 is presented in the accompanying condensed combined balance sheets. During the third quarter of 2016, the Company recorded a $29.6 million non-cash settlement related to this intercompany note payable.

Note 14. New Accounting Pronouncements  

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting. For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and direct financing leases. The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted; however the Company plans to adopt the standard in the first quarter of 2019. The Company is evaluating the impact of ASU 2016-02.

18

Donnelley Financial Solutions, Inc.

Notes to the Unaudited Condensed Combined Financial Statements

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

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which outlines a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 also requires additional quantitative and qualitative disclosures. In August 2015, the FASB issued Accounting Standards Update No. 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date of ASU 2014-09 to January 1, 2018. Early adoption of ASU 2014-09 is permitted in the first quarter of 2017.  However, the Company plans to adopt the standard in the first quarter of 2018. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or a modified retrospective adoption, meaning the standard is applied only to the most current period. The Company is evaluating the impact of the provisions of ASU 2014-09 and currently anticipates applying the modified retrospective approach when adopting the standard.

The following standards were effective for and adopted by the Company in 2016. The adoption of these standards did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows:

• Accounting Standards Update No. 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments”

• Accounting Standards Update No. 2015-07 “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”

• Accounting Standards Update No. 2015-04 “Compensation—Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets”

• Accounting Standards Update No. 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis”

• Accounting Standards Update No. 2015-01 “Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”

19

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

Company Overview

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

• United States. The United States segment is comprised of three reporting units: capital markets, investment markets, and language solutions and other. The Company services capital market and investment market clients in the United States by delivering products and services to help create, manage and deliver financial communications to investors and regulators. The Company provides capital market and investment market clients with communication tools and services to allow them to comply with their ongoing regulatory filings. In addition, the U.S. segment provides clients with communications services to create, manage and deliver registration statements, prospectuses, proxies and other communications to regulators and investors. The U.S. segment also includes language solutions and commercial printing capabilities.

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

• Corporate. The Company reports certain unallocated selling, general and administrative activities and associated expenses within Corporate, including, in part, executive, legal, finance, communications and certain facility costs. In addition, certain costs and earnings of employee benefit plans, such as pension and other postretirement benefits plan expense and share-based compensation, are included in Corporate and are not allocated to the reportable segments. Prior to the Separation, many of these costs were based on allocations from RR Donnelley & Sons Company (“RRD”); however, beginning October 1, 2016, the Company will incur such costs directly.

Products and Services

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

Spin-off Transaction

On October 1, 2016, Donnelley Financial became an independent publicly traded company through the distribution by RRD of approximately 26.2 million shares, or 80.75%, of Donnelley Financial common stock to RRD shareholders (the “Separation”). Holders of RRD common stock received one share of Donnelley Financial common stock for every eight shares of RRD common stock held on September 23, 2016. RRD retained approximately 6.2 million shares of Donnelley Financial common stock, or a 19.25% interest in Donnelley Financial, as part of the Separation, but expects to dispose of the common stock that it retained in the 12-month period following the Separation. Donnelley Financial’s Registration Statement on Form 10, as amended (“Form 10), was declared effective by the U.S. Securities and Exchange Commission (“SEC”) on September 20, 2016. Donnelley Financial’s common stock began regular-way trading under the ticker symbol “DFIN” on the New York Stock Exchange on October 3, 2016. On October 1, 2016, RRD also completed the previously announced separation of LSC Communications, Inc. (“LSC”), its publishing and retail-centric print services and office products business.

Executive Overview

Third Quarter Overview

Net sales decreased by $7.2 million, or 3.1%, for the third quarter of 2016 compared to the same period in the prior year. There was a $1.1 million, or 0.5%, decrease due to changes in foreign exchange rates. In addition to the impact of foreign exchange rates, the decrease in net sales was due to lower capital markets transactions and compliance volume, partially offset by an increase in virtual data room and translation services.

20

On September 30, 2016, in connection with the Separation, the Company entered into a $350.0 million senior secured term loan B facility (the “Term Loan Credit Facility”) and a $300.0 million senior secured revolving credit facility(the “Revolving Facility,” and, together with the Term Loan Credit Facility, the “Credit Agreement”).On September 30, 2016, also in connection with the Separation, the Company issued $300.0 million of 8.25% senior unsecured notes due October 15, 2024. The issuance of the notes was part of a debt exchange that resulted in the settlement of certain of RRD's bonds.Borrowings under the Term Loan Credit Facility were used to provide $340.2 million of cash to RRD, pursuant to the Separation agreement, as of September 30, 2016.

On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. Refer to Note 5, Retirement Plans, to the Condensed Combined Financial Statements for further details regarding the Company’s pension and other postretirement benefit plans.

Non-GAAP Measures

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

Non-GAAP adjusted EBITDA excludes restructuring, impairment and other charges-net.  A reconciliation of GAAP net earnings to Non-GAAP adjusted EBITDA for the three and nine months ended September 30, 2016 and 2015 for these adjustments is presented in the following table:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
	(in millions)
Net earnings	$	10.2		$	16.8	$	59.9	$	81.1
Restructuring, impairment and other charges—net		1.7			1.4		3.6		3.3
Depreciation and amortization		9.8			10.3		30.1		32.0
Interest (income) expense—net		(0.1	)		0.3		0.3		0.9
Income tax expense		7.9			11.1		39.3		52.6
Non-GAAP adjusted EBITDA	$	29.5		$	39.9	$	133.2	$	169.9

Three Months Ended September 30, 2016

2016 Restructuring, impairment and other charges—net. The three months ended September 30, 2016 included $1.3 million for employee termination costs and $0.4 million of lease termination and other restructuring costs.

Three Months Ended September 30, 2015

2015 Restructuring, impairment and other charges—net. The three months ended September 30, 2015 included $0.9 million for employee termination costs and $0.5 million of lease termination and other restructuring costs.

Nine Months Ended September 30, 2016

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

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Nine Months Ended September 30, 2015

2015 Restructuring, impairment and other charges—net. The nine months ended September 30, 2015 included $1.7 million for employee termination costs, $1.5 million of lease termination and other restructuring costs and $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate.

OUTLOOK

Competition

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

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

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

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

Market Volatility/Cyclicality

The Company is subject to market volatility in the United States and world economy, as the success of the transactional offering is largely dependent on the global market for IPOs, secondary offerings, mergers and acquisitions, public and private debt offerings, leveraged buyouts, spinouts and additional miscellaneous transactions. The Company mitigates some of that risk by offering services in higher demand during a down market, like document management tools for the bankruptcy/restructuring process, and also moving upstream from the filing process with products like Venue, the Company’s data room solution. The Company also attempts to balance this volatility through supporting the quarterly/annual public company reporting process through its EDGAR filing services and ActiveDisclosure product, its investment markets regulatory and shareholder communications offering and continues to expand into adjacent growth businesses like language solutions and data and analytics, which have recurring revenues and are not as susceptible to market volatility and cycles. This quarterly/annual public company reporting process work also subjects the Company to filing seasonality shortly after the end of each fiscal quarter, with peak periods during the course of the year that have operational implications. Such operational implications include the need to increase staff during peak periods through a combined strategy of hiring additional full-time and temporary personnel, increasing the premium time of existing staff, and outsourcing production for a number of services. The International segment is particularly susceptible to capital market volatility as most of the International business is capital markets transaction focused. Additionally, clients and their financial advisors have begun to increasingly rely on web-based services which allow clients to autonomously file and distribute compliance documents with regulatory agencies, such as the SEC. While the Company believes that its ActiveDisclosure and FundSuiteArc solutions are competitive in this space, competitors are continuing to develop technologies that aim to improve clients’ ability to autonomously produce and file documents to meet their regulatory obligations. The Company continues to remain focused on driving recurring revenue in order to mitigate market volatility.

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Raw Materials

The primary raw materials used in the Company’s printed products are paper and ink. The paper and ink supply is sourced from a small set of select suppliers in order to ensure quality consistency that meets the Company’s performance expectations and provides for continuity of supply. The Company believes that the risk of incurring material losses as a result of a shortage in raw materials is unlikely and that the losses, if any, would not have a materially negative impact on the business.

Financial Review

In the financial review that follows, the Company discusses its condensed combined results of operations, cash flows and certain other information. The Company has not previously operated as an independent, stand-alone company, but rather as a part of RRD. There are limitations inherent in the preparation of all carve out financial statements due to the fact that the Company’s business was previously part of a larger organization. This discussion should be read in conjunction with the Company’s condensed combined financial statements and the related notes.

Results of Operations for the Three Months Ended September 30, 2016 as Compared to the Three Months Ended September 30, 2015

The following table shows the results of operations for the three months ended September 30, 2016 and 2015:

	2016		2015		$ Change			% Change
	(in millions, except percentages)
Services net sales	$	139.4	$	142.1	$	(2.7	)		(1.9	%)
Products net sales		85.0		89.5		(4.5	)		(5.0	%)
Net sales		224.4		231.6		(7.2	)		(3.1	%)
Services cost of sales (exclusive of depreciation and amortization)		64.2		71.1		(6.9	)		(9.7	%)
Services cost of sales with RRD affiliates (exclusive of depreciation and amortization)		8.7		9.3		(0.6	)		(6.5	%)
Products cost of sales (exclusive of depreciation and amortization)		62.0		50.9		11.1			21.8	%
Products cost of sales with RRD affiliates (exclusive of depreciation and amortization)		11.5		12.9		(1.4	)		(10.9	%)
Cost of sales		146.4		144.2		2.2			1.5	%
Selling, general and administrative expenses (exclusive of    depreciation and amortization)		48.5		47.5		1.0			2.1	%
Restructuring, impairment and other charges-net		1.7		1.4		0.3			21.4	%
Depreciation and amortization		9.8		10.3		(0.5	)		(4.9	%)
Income from operations	$	18.0	$	28.2	$	(10.2	)		(36.2	%)

Combined

Net sales of services for the three months ended September 30, 2016 decreased $2.7 million, or 1.9%, to $139.4 million, versus the three months ended September 30, 2015, including a $1.0 million, or 0.7%, decrease due to changes in foreign exchange rates. Net sales of services decreased due to lower capital markets transactions and compliance volumes, partially offset by increased volume in translation and virtual data room services.

Net sales of products for the three months ended September 30, 2016 decreased $4.5 million, or 5.0%, to $85.0 million versus the three months ended September 30, 2015, including a $0.1 million, or 0.1%, decrease due to changes in foreign exchange rates. Net sales of products decreased due to lower volume in capital markets transactions, mutual funds print, commercial print and compliance.

Services cost of sales decreased $7.5 million, or 9.3%, for the three months ended September 30, 2016, versus the same period in the prior year. Services cost of sales decreased due to lower capital markets transactions and compliance volumes and cost control initiatives, partially offset by wage and other inflationary increases. As a percentage of net sales, services cost of sales decreased 4.3% due to favorable mix and cost control initiatives, partially offset by wage and other inflation.

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Products cost of sales increased $9.7 million, or 15.2%, for the three months ended September 30, 2016, versus the same period in the prior year. Products cost of sales increased primarily due to unfavorable print mix and wage and other inflationary increases.  As a percentage of net sales, products cost of sales increased15.2% primarily due to unfavorable print mix, price pressures and wage and other inflation.

Selling, general and administrative expenses increased $1.0 million, or 2.1%, to $48.5 million, for the three months ended September 30, 2016, as compared to the three months ended September 30, 2015, primarily due to an increase in selling expenses and information technology and employee costs related to the Separation. As a percentage of net sales, selling, general, and administrative expenses increased from 20.5% for the three months ended September 30, 2015 to 21.6% for the three months ended September 30, 2016 due to lower net sales and increased costs related to the Separation.

For the three months ended September 30, 2016, the Company recorded net restructuring, impairment and other charges of $1.7 million, as compared to $1.4 million for the three months ended September 30, 2015. In 2016, these charges included $1.3 million of employee termination costs for 22 employees and $0.4 million of lease termination and other restructuring costs. In 2015, these charges included $0.9 million of employee termination costs for 17 employees and $0.5 million of lease termination and other restructuring costs.

Depreciation and amortization decreased $0.5 million, or 4.9%, to $9.8 million for the three months ended September 30, 2016 compared to the three months ended September 30, 2015.  Depreciation and amortization included $3.6 million and $3.9 million of amortization of other intangible assets related to customer relationships, trade names and non-compete agreements for the three months ended September 30, 2016 and 2015, respectively.

Income from operations for the three months ended September 30, 2016 decreased $10.2 million, or 36.2%, to $18.0 million versus the three months ended September 30, 2015, due to lower capital markets transactions, capital markets compliance and mutual funds print volume and an increase in selling expenses and costs related to the Separation, partially offset by an increase in virtual data room and translation services.

	2016			2015		$ Change			% Change
	(in millions, except percentages)
Interest (income) expense-net	$	(0.1	)	$	0.3	$	(0.4	)		(133.3	%)

Net interest expense decreased $0.4 million for the three months ended September 30, 2016 versus the same period in 2015, primarily due to the settlement of an intercompany note payable during the third quarter of 2016.

	2016			2015			$ Change			% Change
	(in millions, except percentages)
Earnings before income taxes	$	18.1		$	27.9		$	(9.8	)		(35.1	%)
Income tax expense		7.9			11.1			(3.2	)		(28.8	%)
Effective income tax rate		43.6	%		39.8	%

The effective income tax rate was 43.6% for the three months ended September 30, 2016 compared to 39.8% for the three months ended September 30, 2015. The September 30, 2016 effective income tax rate reflected additional tax reserves and accrual of interest.

Information by Segment

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

U.S.

	Three Months Ended September 30,
	2016			2015
	(in millions, except percentages)
Net sales	$	192.3		$	201.6
Income from operations		18.7			28.2
Operating margin		9.7	%		14.0	%
Restructuring, impairment and other charges-net		1.4			1.1

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	Net Sales for the Three Months
	Ended September 30,
Reporting unit	2016		2015		$ Change			% Change
	(in millions, except percentages)
Capital Markets	$	98.4	$	102.3	$	(3.9	)		(3.8	%)
Investment Markets		84.1		87.6		(3.5	)		(4.0	%)
Language Solutions and other		9.8		11.7		(1.9	)		(16.2	%)
Total U.S.	$	192.3	$	201.6	$	(9.3	)		(4.6	%)

Net sales for the U.S. segment for the three months ended September 30, 2016 were $192.3 million, a decrease of $9.3 million, or 4.6%, compared to the three months ended September 30, 2015.  Net sales decreased due to lower capital markets transactions and compliance volumes, lower commercial print and mutual funds volume, partially offset by an increase in virtual data room services. An analysis of net sales by reporting unit follows:

• Capital Markets: Sales decreased due to lower transaction and compliance volumes, partially offset by an increase in virtual data room services.

• Investment Markets: Sales decreased due to lower mutual funds and healthcare volumes and price pressures.

• Language Solutions and other: Sales decreased due to lower commercial print volume.

U.S. segment income from operations decreased $9.5 million, or 33.7%, for the three months ended September 30, 2016 as compared to the three months ended September 30, 2015, primarily due to decreases in capital markets volumes, lower mutual funds volume and increased selling expenses, partially offset by an increase in virtual data room services.

Operating margins decreased from 14.0% for the three months ended September 30, 2015 to 9.7% for the three months ended September 30, 2016 due to unfavorable mix, price pressures in investment markets and increased selling expenses, partially offset by cost control initiatives.    

International

	Three Months Ended June 30,
	2016			2015
	(in millions, except percentages)
Net sales	$	32.1		$	30.0
Income from operations		1.1			0.2
Operating margin		3.4	%		0.7	%
Restructuring, impairment and other charges-net		0.3			0.3

Net sales for the International segment for the three months ended September 30, 2016 were $32.1 million, an increase of $2.1 million, or 7.0%, compared to the three months ended September 30, 2015 including a $1.1 million, or 3.7%, decrease due to changes in foreign exchange rates. Net sales increased due to an increase in translation and funds services, partially offset by lower capital markets compliance volume.

International segment income from operations increased $0.9 million compared to the three months ended September 30, 2015, due to an increase in translation and funds services.

Operating margins increased from 0.7% for the three months ended September 30, 2015 to 3.4% for the three months ended September 30, 2016 due to the increase in translation and funds services.

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Corporate

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

	Three Months Ended
	September 30,
	2016		2015
	(in millions)
Operating expenses	$	1.8	$	0.2

Corporate operating expenses for the three months ended September 30, 2016 increased $1.6 million versus the same period in 2015 due to costs related to the Separation and an increase in bad debt expense.

Results of Operations for the Nine Months Ended September 30, 2016 as Compared to the Nine Months Ended September 30, 2015

The following table shows the results of operations for the nine months ended September 30, 2016 and 2015:

	2016		2015		$ Change			% Change
	(in millions, except percentages)
Services net sales	$	454.1	$	479.9	$	(25.8	)		(5.4	%)
Products net sales		308.4		331.0		(22.6	)		(6.8	%)
Net sales		762.5		810.9		(48.4	)		(6.0	%)
Services cost of sales (exclusive of depreciation and amortization)		214.6		222.4		(7.8	)		(3.5	%)
Services cost of sales with RRD affiliates (exclusive of depreciation and amortization)		29.4		31.5		(2.1	)		(6.7	%)
Products cost of sales (exclusive of depreciation and amortization)		179.9		177.5		2.4			1.4	%
Products cost of sales with RRD affiliates (exclusive of depreciation and amortization)		48.6		58.4		(9.8	)		(16.8	%)
Cost of sales		472.5		489.8		(17.3	)		(3.5	%)
Selling, general and administrative expenses (exclusive of depreciation and amortization)		156.8		151.2		5.6			3.7	%
Restructuring, impairment and other charges-net		3.6		3.3		0.3			9.1	%
Depreciation and amortization		30.1		32.0		(1.9	)		(5.9	%)
Income from operations	$	99.5	$	134.6	$	(35.1	)		(26.1	%)

Combined

Net sales of services for the nine months ended September 30, 2016 decreased $25.8 million, or 5.4%, to $454.1 million, versus the nine months ended September 30, 2015 including a $1.9 million, or 0.4%, decrease due to changes in foreign exchange rates. Additionally, net sales of services decreased due to lower capital markets transactions and compliance volume, partially offset by increased volume in virtual data room services, translation services and mutual fund content management services.

Net sales of products for the nine months ended September 30, 2016 decreased $22.6 million, or 6.8%, to $308.4 million versus the nine months ended September 30, 2015, including a $1.5 million, or 0.5%, decrease due to changes in foreign exchange rates. Additionally, net sales of products decreased due to lower volume in capital markets transactions, compliance, mutual funds print and commercial print and price pressures in investment markets.

Services cost of sales decreased $9.9 million, or 3.9%, for the nine months ended September 30, 2016, versus the same period in the prior year. Services cost of sales decreased due to lower capital markets transactions and compliance volume and cost control initiatives, partially offset by wage and other inflationary increases. As a percentage of net sales, services cost of sales increased 0.8% primarily due to unfavorable mix and wage and other inflation, partially offset by cost control initiatives.

Products cost of sales decreased $7.4 million, or 3.1%, for the nine months ended September 30, 2016, versus the same period in the prior year. Products cost of sales decreased primarily due to lower print volumes and cost control initiatives, partially offset by wage and other inflationary increases.  As a percentage of net sales, products cost of sales increased 2.8% primarily due to price pressures and wage and other inflation.

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Selling, general and administrative expenses increased $5.6 million, or 3.7%, to $156.8 million, for the nine months ended September 30, 2016, as compared to the nine months ended September 30, 2015, primarily due to an increase in selling expenses and consulting, information technology and employee costs related to the Separation. As a percentage of net sales, selling, general, and administrative expenses increased from 18.6% for the nine months ended September 30, 2015 to 20.6% for the nine months ended September 30, 2016 due to lower volume and costs related to the Separation.

For the nine months ended September 30, 2016, the Company recorded net restructuring, impairment and other charges of $3.6 million compared to $3.3 million for the nine months ended September 30, 2015. For the nine months ended September 30, 2016, these charges included $2.3 million of employee termination costs for 74 employees, $1.2 million of lease termination and other restructuring costs and $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate. For the nine months ended September 30, 2015, these charges included $1.7 million of employee termination costs for 52 employees, $1.5 million of lease termination and other restructuring costs and $0.1 million for other charges associated with the Company’s decision to withdraw in 2013 from certain multi-employer pension plans serving facilities that continued to operate.

Depreciation and amortization decreased $1.9 million, or 5.9%, to $30.1 million for the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015.  Depreciation and amortization included $10.8 million and $11.7 million of amortization of other intangible assets related to customer relationships, trade names and non-compete agreements for the nine months ended September 30, 2016 and 2015, respectively.

Income from operations for the nine months ended September 30, 2016 decreased $35.1 million, or 26.1%, to $99.5 million versus the nine months ended September 30, 2015, due to a decrease in capital markets transactions and lower compliance and mutual funds print volume, partially offset by an increase in virtual data room, translation and mutual fund content management services and cost control initiatives.

	2016		2015		$ Change			% Change
	(in millions, except percentages)
Interest expense-net	$	0.3	$	0.9	$	(0.6	)		(66.7	%)

Net interest expense decreased by $0.6 million for the nine months ended September 30, 2016 versus the same period in 2015, primarily due to a decrease in average outstanding debt with an RRD affiliate.

	2016			2015			$ Change			% Change
	(in millions, except percentages)
Earnings before income taxes	$	99.2		$	133.7		$	(34.5	)		(25.8	%)
Income tax expense		39.3			52.6			(13.3	)		(25.3	%)
Effective income tax rate		39.6	%		39.3	%

The effective income tax rate was 39.6% for the nine months ended September 30, 2016 compared to 39.3% for the nine months ended September 30, 2015.

Information by Segment

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

U.S.

	Nine Months Ended September 30,
	2016			2015
	(in millions, except percentages)
Net sales	$	662.4		$	702.2
Income from operations		100.0			128.6
Operating margin		15.1	%		18.3	%
Restructuring, impairment and other charges-net		3.1			2.9

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	Net Sales for the Nine Months
	Ended September 30,
Reporting unit	2016		2015		$ Change			% Change
	(in millions, except percentages)
Capital Markets	$	369.5	$	403.4	$	(33.9	)		(8.4	%)
Investment Markets		263.7		268.8		(5.1	)		(1.9	%)
Language Solutions and other		29.2		30.0		(0.8	)		(2.7	%)
Total U.S.	$	662.4	$	702.2	$	(39.8	)		(5.7	%)

Net sales for the U.S. segment for the nine months ended September 30, 2016 were $662.4 million, a decrease of $39.8 million, or 5.7%, compared to the nine months ended September 30, 2015.  Net sales decreased primarily due to lower compliance and capital markets transactions volume, lower mutual funds and commercial print volume and price pressures in investment markets, partially offset by an increase in virtual data room, translation and mutual fund content management services. An analysis of net sales by reporting unit follows:

• Capital Markets: Sales decreased due to lower compliance and transactional volumes, partially offset by an increase in virtual data room services.

• Investment Markets: Sales decreased due to lower mutual funds volume and price pressures, partially offset by an increase in content management services.

• Language Solutions and other: Sales decreased due to lower commercial print volume, mostly offset by higher translations services volume.

U.S. segment income from operations decreased $28.6 million, or 22.2%, for the nine months ended September 30, 2016 as compared to the nine months ended September 30, 2015, primarily due to decreases in capital markets volumes, price pressures in investment markets and wage and other inflation, partially offset by an increase in virtual data room, translation and mutual fund content management services and cost control initiatives.

Operating margins decreased from 18.3% for the nine months ended September 30, 2015 to 15.1% for the nine months ended September 30, 2016 due to unfavorable mix driven by lower capital markets transactions, partially offset by cost control initiatives.    

International

	Nine Months Ended September 30,
	2016			2015
	(in millions, except percentages)
Net sales	$	100.1		$	108.7
Income from operations		7.2			10.0
Operating margin		7.2	%		9.2	%
Restructuring, impairment and other charges-net		0.5			0.4

Net sales for the International segment for the nine months ended September 30, 2016 were $100.1 million, a decrease of $8.6 million, or 7.9%, compared to the nine months ended September 30, 2015 including a $3.4 million, or 3.1%, decrease due to changes in foreign exchange rates. Additionally, net sales decreased primarily due to lower capital markets transactions and compliance volumes, partially offset by an increase in translations and virtual data room services.

International segment income from operations decreased $2.8 million, or 28.0%, compared to the nine months ended September 30, 2015, primarily due to the decline in capital markets transactions and compliance volumes and wage and other inflation increases, partially offset by cost control initiatives and lower incentive compensation expense.

Operating margins decreased from 9.2% for the nine months ended September 30, 2015 to 7.2% for the nine months ended September 30, 2016 due to lower capital markets transactions, partially offset by cost control initiatives and lower incentive compensation expense.

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Corporate

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

	Nine Months Ended
	September 30,
	2016		2015
	(in millions)
Operating expenses	$	7.7	$	4.0

Corporate operating expenses for the nine months ended September 30, 2016 increased $3.7 million versus the same period in 2015 due to an increase in costs related to the Separation and an increase in bad debt expense.

Liquidity and Capital Resources  

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

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

The following describes the Company’s cash flows for the nine months ended September 30, 2016 and 2015.

Cash Flows From Operating Activities

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

Net cash provided by operating activities was $56.8 million for the nine months ended September 30, 2016 compared to $59.0 million for the same period in 2015. The decrease in net cash provided by operating activities reflected a decrease in pension plan income allocations and timing of payments for employee-related liabilities and suppliers, partially offset by timing of cash collections.

Cash Flows Used For Investing Activities

Net cash used in investing activities was $17.0 million for the nine months ended September 30, 2016 compared to $16.9 million for the same period in 2015.  Capital expenditures were $14.0 million during the nine months ended September 30, 2016, a decrease of $2.9 million as compared to the same period of 2015. Net cash used in investing activities for the nine months ended September 30, 2016 also included $3.5 million used for the purchase of investments.

Cash Flows Used For Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2016 was $6.1 million compared to $54.6 million for the nine months ended September 30, 2015. The decrease in net cash used in financing activities reflected $348.2 million of proceeds from the issuance of long-term debt, offset by a $315.3 million increase in net transfers to RRD and its affiliates in connection with the Separation.

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Contractual Cash Obligations and Other Commitments and Contingencies

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

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

In connection with the Separation, the Company assumed an operating lease through 2024 for the Company’s headquarters, with a total commitment of $14.1 million at October 1, 2016.  There is a related non-cancelable sublease rental to RRD of approximately $6.2 million for the same period.  The Company remains secondarily liable under this lease in the event that the sub-lessee defaults under the sublease terms. The Company does not believe that material payments will be required as a result of the secondary liability provisions of the primary lease agreement.

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

Liquidity

On September 30, 2016, in connection with the Separation, the Company entered into a $350.0 million senior secured term loan B facility (the “Term Loan Credit Facility”) and the Revolving Facility.  

On September 30, 2016, also in connection with the Separation, the Company issued $300.0 million of 8.25% senior unsecured notes due October 15, 2024 (the “Notes”). Interest on the Notes is payable semi-annually on April 15 and October 15, commencing on April 15, 2017. The issuance of the Notes was part of a debt exchange that resulted in the settlement of certain of RRD's bonds.Borrowings under the Term Loan Credit Facility were used to provide $340.2 million of cash to RRD, pursuant to the Separation agreement, as of September 30, 2016. In connection with the offering of the Notes, the Company entered into a registration rights agreement, dated as of September 30, 2016 (the “Registration Rights Agreement”). The Company will be required to pay specified additional interest on the Notes if it fails to comply with its registration obligations under the Registration Rights Agreement.

In accordance with the Separation and Distribution Agreement, there will be a cash adjustment payable to or receivable from RRD for the September 30, 2016 cash balance greater or less than an agreed-upon target cash balance of $50.0 million as defined in the Separation and Distribution Agreement. The Separation and Distribution Agreement also includes a provision for RRD to make a future cash payment of $68.0 million to Donnelley Financial no later than April 1, 2017.

The Company’s debt maturities as of September 30, 2016 are shown in the table below:

	Debt Maturity Schedule
	Total		2016		2017		2018		2019		2020		Thereafter
Borrowings under the Term Loan Credit Facility (a)	$	350.0	$	4.4	$	17.5	$	17.5	$	17.5	$	17.5	$	275.6
Senior notes (b)		300.0		—		—		—		—		—		300.0
Total	$	650.0	$	4.4	$	17.5	$	17.5	$	17.5	$	17.5	$	575.6

(a) Excludes unamortized debt issuance costs of $5.0 million and a discount of $1.8 million which do not represent contractual commitments with a fixed amount or maturity date.

(b) Excludes unamortized debt issuance costs of $6.7 million which do not represent contractual commitments with a fixed amount or maturity date.

The Credit Agreement is subject to a number of covenants, including a minimum Interest Coverage Ratio and a maximum Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $15.0 million in aggregate.

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The Notes are also subject to a number of covenants that restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers, consolidations and acquisitions, make dividend payments and other distributions, make restricted payments and dispose of certain assets. In addition, many of the restrictive covenants will not apply to the Company and its restricted subsidiaries during any period when the Notes are rated investment grade by both Standard & Poor’s Ratings Services (”S&P”) and Moody’s Investor Services, Inc. (“Moody’s”), or, in certain circumstances, another rating agency selected by the Company, provided at such time no default under the Indenture has occurred and is continuing.

As of September 30, 2016, there were no borrowings under the Revolving Facility. Accordingly, at September 30, 2016, $300.0 million of borrowing capacity was available for the purposes permitted by the Credit Agreement.

The failure of a financial institution supporting the Revolving Facility would reduce the size of the Company’s committed facility unless a replacement institution was added. Currently, the Revolving Facility is supported by seventeen U.S. and international financial institutions.

The Company’s liquidity may be affected by its credit ratings. The Company’s S&P and Moody’s credit ratings as of September 30, 2016 are shown in the table below:

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

Cash and cash equivalents of $53.0 million at September 30, 2016 included $27.4 million in the U.S. and $25.6 million at international locations. The Company has not recognized deferred tax liabilities related to taxes on foreign earnings as foreign earnings are considered to be permanently reinvested. Certain cash balances of foreign subsidiaries may be subject to U.S. or local country taxes if repatriated to the U.S. In addition, repatriation of some foreign cash balances is further restricted by local laws. Management regularly evaluates whether foreign earnings are expected to be permanently reinvested. This evaluation requires judgment about the future operating and liquidity needs of the Company and its foreign subsidiaries. Changes in economic and business conditions, foreign or U.S. tax laws, or the Company’s financial situation could result in changes to these judgments and the need to record additional tax liabilities.

OTHER INFORMATION

Litigation and Contingent Liabilities

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

New Accounting Pronouncements and Pending Accounting Standards

Recently issued accounting standards and their estimated effect on the Company’s combined financial statements are described in Note 14, New Accounting Pronouncements, to the Condensed Combined Financial Statements.

CAUTIONARY STATEMENT

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

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

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Forward-looking statements are not guarantees of performance. These forward-looking statements are subject to a number of important factors, including those factors discussed in detail in “Part II--Item 1A: Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, that could cause our actual results to differ materially from those indicated in any such forward-looking statements. These factors include, but are not limited to:

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

• failure to offer high quality customer support and services;

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

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

• our inability to maintain client referrals;

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

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

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

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

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

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

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

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

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

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

• failure to protect our proprietary technology;

• failure to successfully integrate acquired businesses into our business;

• availability to maintain our brands and reputation;

• the retention of existing, and continued attraction of, key employees;

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

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

• lack of market for our common stock;

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

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

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

Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Undue reliance should not be placed on such statements, which speak only as of the date of this document or the date of any document that may be incorporated by reference into this document.

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

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

The Company is exposed to the impact of foreign currency fluctuations in certain countries in which it operates. The Company discusses risk management in various places throughout this document, including discussions concerning liquidity and capital resources.

Credit Risk

The Company is exposed to credit risk on accounts receivable balances. This risk is mitigated due to the Company’s large, diverse customer base, dispersed over various geographic regions and industrial sectors. No single customer comprised more than 10% of the Company’s combined net sales in the nine months ended September 30, 2016. The Company maintains provisions for potential credit losses and such losses to date have normally been within the Company’s expectations. The Company evaluates the solvency of its customers on an ongoing basis to determine if additional allowances for doubtful accounts receivable need to be recorded. Significant economic disruptions or a slowdown in the economy could result in significant additional charges.

Commodities

The primary raw materials used by the Company are paper and ink. To reduce price risk caused by market fluctuations, the Company has incorporated price adjustment clauses in certain sales contracts. Management believes a hypothetical 10% change in the price of paper and other raw materials would not have a significant effect on the Company’s combined annual results of operations or cash flows as these costs are generally passed through to its customers. However, such an increase could have an impact on our customers’ demand for printed products, and we are not able to quantify the impact of such potential change in demand on our combined annual results of operations or cash flows.

Item 4. Controls and Procedures

(a) Disclosure controls and procedures.

Management, together with the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(b) and Rule 15d-15(e) of the Securities Exchange Act of 1934) as of September 30, 2016. Based on that evaluation the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2016.

(b) Changes in internal control over financial reporting.

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

During the third quarter of 2016, under the supervision of and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company completed preparations and implementations for a series of changes to its information technology environment, which includes financial reporting systems, to support its separate financial reporting requirements. There were no other changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended September 30, 2016 that had materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting. 

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in the Company’s Information Statement included as Exhibit 99.1 to the Company’s effective Registration Statement on Form-10, as filed with the SEC on September 20, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 6. Exhibits

2.1	Separation and Distribution Agreement, dated as of September 14, 2016, by and among R. R. Donnelley & Sons Company, LSC Communications, Inc. and Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
2.2	Transition Services Agreement, dated as of September 14, 2016, between Donnelley Financial Solutions, Inc. and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
2.3	Transition Services Agreement, dated as of September 14, 2016, between LSC Communications, Inc. and Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
2.4	Tax Disaffiliation Agreement, dated as of September 14, 2016, between Donnelley Financial Solutions, Inc. and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
2.5	Patent Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.5 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
2.6	Trademark Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.6 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
2.7	Data Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.7 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
2.8	Software, Copyright and Trade Secret Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 2.8 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
3.1	Amended and Restated Certificate of Incorporation of Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
3.2	Amended and Restated By-laws of Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
4.1	Stockholder and Registration Rights Agreement, dated as of September 14, 2016, between Donnelley Financial Solutions, Inc. and R. R. Donnelley & Sons Company (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
4.2	Indenture, dated as of September 30, 2016, among Donnelley Financial Solutions, Inc., the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
4.3	Registration Rights Agreement, dated as of September 30, 2016, by and among Donnelley Financial Solutions, Inc., the subsidiary guarantors party thereto and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and MUFG Securities Americas Inc., as Representatives (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
8.1	Tax Opinion of Sullivan & Cromwell LLP, dated as of September 29, 2016 (incorporated by reference to Exhibit 8.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)
10.1	Credit Agreement, dated as of September 30, 2016, among Donnelley Financial Solutions, Inc., as Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*
10.2	2016 Donnelley Financial Solutions, Inc. Performance Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*
10.3	Donnelley Financial Solutions, Inc. Non-Employee Director Compensation Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

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10.4	Donnelley Financial Solutions, Inc. Nonqualified Deferred Compensation Plan, dated as of September 22, 2016 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*
10.5	Assignment of Employment Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and Daniel N. Leib (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*
10.6	Amendment to Employment Agreement between the Company and Daniel N. Leib dated October 26, 2016 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated October 26, 2016, filed on October 27, 2016)*
10.7	Assignment of Employment Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and Thomas F. Juhase (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*
10.8	Assignment of Employment Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and David A. Gardella (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*
10.9	Assignment of Severance Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and Jennifer B. Reiners (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*
10.10	Form of Director Indemnification Agreement (filed herewith)
31.1	Certification by Daniel N. Leib, President and Chief Executive Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)
31.2	Certification by David A. Gardella, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)
32.1	Certification by Daniel N. Leib, President and Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith)
32.2	Certification by David A. Gardella, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Management contract or compensatory plan or arrangement.

36

SIGNATURES

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.

DONNELLEY FINANCIAL SOLUTIONS, INC.
By:	/s/ DAVID A. GARDELLA
	David A. Gardella
	Executive Vice President and Chief Financial Officer

Date: November 9, 2016

37

EX-10.10

Exhibit 10.10

DONNELLEY FINANCIAL SOLUTIONS, INC.

INDEMNIFICATION AGREEMENT

THIS AGREEMENT (this “Agreement”) is entered into, effective as of _________________, 2016, between Donnelley Financial Solutions, Inc., a Delaware corporation (the “Company”) and ___________ (“Indemnitee”).

WHEREAS, it is essential to the Company to retain and attract as directors the most capable persons available;

WHEREAS, Indemnitee is a director of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors of corporations; and

WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal liability in order to enhance Indemnitee’s continued and effective service to the Company, and in order to induce Indemnitee to provide continued services to the Company as a director, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement and for the coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.

NOW, THEREFORE, in consideration of the above premises and of Indemnitee’s continuing to serve as a director of the Company and intending to be legally bound hereby, the parties agree as follows:

1.Certain Definitions:

(a)Board:  The Board of Directors of the Company.  

(b)Change in Control:  

(i)any “person,” as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”), as modified and used in Section 13(d) and 14(d) thereof (but not including (a) the Company or any of its subsidiaries, (b) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (c) an underwriter temporarily holding securities pursuant to an offering of such securities, or (d) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) (hereinafter a “Person”) is or becomes the beneficial owner, as defined in Rule 13d-3 of the Exchange Act, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates, excluding an acquisition resulting from the exercise of a conversion or exchange privilege in respect of

outstanding convertible or exchangeable securities) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

(ii)during any period of two consecutive years beginning on the date hereof, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a Person who has entered into any agreement with the Company to effect a transaction described in Clause (i), (iii) or (iv) of this Section) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (each such director, a “Continuing Director”), cease for any reason to constitute a majority thereof; or

(iii)the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (a) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or acquiring entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company, at least 50% of the combined voting power of the voting securities of the Company or such surviving or acquiring entity outstanding immediately after such merger or consolidation, or (b) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than 50% of the combined voting power of the Company's then outstanding securities; or

(iv)the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.

(c)Disinterested Director:  A director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(d)Expenses:  Any reasonable expense, including without limitation, attorneys’ fees, retainers, court costs, transcript costs, fees and expenses of experts, including accountants and other advisors, travel expenses, duplicating costs, postage, delivery service fees, filing fees, and all other disbursements or expenses of the types typically paid or incurred in connection with investigating, defending, being a witness in, or participating (including on appeal), or preparing for any of the foregoing, in any Proceeding (including Indemnitee’s counterclaims that directly respond to and negate the affirmative claim made against Indemnitee (“Permitted Counterclaims”) in such Proceeding), but shall exclude the costs of (a) any of Indemnitee’s counterclaims, other than Permitted Counterclaims, (b) the costs of acquiring and maintaining an appeal or supersedeas bond or similar instrument or (c) the fees and costs of enforcing a right to indemnification or advance payment or reimbursement under any of Sections 2, 4 or 5 of this Agreement, in each case, to the extent reasonable.

2

(e)Indemnifiable Costs: Any and all Expenses, liability or loss, judgments, fines and amounts paid in settlement and any interest, assessments, or other charges imposed thereon, and any federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement.

(f)Indemnifiable Event:  Any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director of the Company, or while a director is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise or related to anything done or not done by Indemnitee in any such capacity, whether or not the basis of the Proceeding is alleged action in an official capacity as a director of the Company, or in any other capacity, as described above.

(g)Independent Counsel:  Means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past three years has been, retained to represent: (i) the Company or any of its subsidiaries or affiliates, (ii) the Indemnitee or (iii) any other party to the Proceeding giving rise to a claim for indemnification or Expense Advances hereunder, in any matter (other than with respect to matters relating to indemnification and advancement of expenses).  No law firm or lawyer shall qualify to serve as Independent Counsel if that person would, under the applicable standards of professional conduct then prevailing, have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The Company shall select a law firm or lawyer to serve as Independent Counsel, subject to the consent of the Indemnitee, which consent shall not be unreasonably withheld.

(h)Proceeding:  Any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, internal, administrative or investigative that relates to an Indemnifiable Event.

(i)Reviewing Party:  Reviewing Party shall have the meaning ascribed to such term in Section 3.

2.Agreement to Indemnify.

(a)General Agreement regarding Indemnification.  In the event Indemnitee was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against Indemnifiable Costs, to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto); provided that the Company’s commitment set forth in this Section 2(a) to indemnify the Indemnitee shall be subject to the limitations and procedural requirements set forth in this Agreement.  

(b)Partial Indemnification.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Indemnifiable Costs,

3

but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

(c)Advancement of Expenses.  If so requested by Indemnitee, the Company shall advance to Indemnitee, to the fullest extent permitted by applicable law, any and all Expenses incurred by Indemnitee (an “Expense Advance” or an “Advance”) within 21 calendar days after the receipt by the Company of a request from Indemnitee for an Advance, whether prior to or after final disposition of any Proceeding; provided that the Company shall not advance any expenses to Indemnitee unless and until it shall have received a request and  undertaking substantially in the form attached hereto as Exhibit A.  Any request for an Expense Advance shall be accompanied by an itemization, in reasonable detail, of the Expenses for which advancement is sought; provided however that Indemnitee need not submit to the Company any information that counsel for Indemnitee deems is privileged and exempt from compulsory disclosure in any proceeding.  Advances shall be made without regard to Indemnitee’s ability to repay the Expenses.  If Indemnitee has commenced legal proceedings in a court of competent jurisdiction in the State of Delaware to secure a determination that Indemnitee should be indemnified under applicable law, as provided in Section 4, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed). Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.  

(d)Exception to Obligation to Indemnify and Advance Expenses.  Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification or advancement pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding; or (ii) the Proceeding is one to enforce indemnification rights under Section 5.

3.Reviewing Party.

(a)Definition of Reviewing Party. Other than as contemplated by Section 3(b), the person, persons or entity  who shall determine whether Indemnitee is entitled to indemnification in the first instance (“the Reviewing Party”) shall be (i) the Board of Directors of the Company acting by a majority vote of a quorum of Disinterested Directors or (ii) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel in a written determination to the Board of Directors, a copy of which shall be delivered to Indemnitee.

(b)Reviewing Party Following Change in Control. After a Change in Control (other than a Change in Control approved by a majority of the Continuing Directors), the Reviewing Party shall be the Independent Counsel.  With respect to all matters arising from such a Change in Control concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or under applicable law or the Company’s Restated Certificate of Incorporation or Amended and Restated By-laws now or

4

hereafter in effect relating to indemnification for Indemnifiable Events, the Company shall seek legal advice only from the Independent Counsel.    Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent the Indemnitee should be permitted to be indemnified under applicable law.  The Company agrees to pay the reasonable fees of the Independent Counsel and to indemnify fully such counsel against any and all expenses (including attorneys’ fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the engagement of Independent Counsel pursuant hereto.

4.Indemnification Process and Appeal.

(a)Indemnification Payment.  

(i)The determination with respect to Indemnitee’s entitlement to indemnification shall, to the extent practicable, be made by the Reviewing Party not later than 30 calendar days after receipt by the Company of a written demand on the Company for indemnification (which written demand shall include such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification).  The Reviewing Party making the determination with respect to Indemnitee’s entitlement to indemnification shall notify Indemnitee of such written determination no later than two business days thereafter.  

(ii)Unless the Reviewing Party has provided a written determination to the Company that Indemnitee is not entitled to indemnification under applicable law, Indemnitee shall be entitled to indemnification of Indemnifiable Costs, and shall receive payment thereof, from the Company in accordance with this Agreement within 10 business days after the Reviewing Party has made its determination with respect to Indemnitee’s entitlement to indemnification.

(b)Suit to Enforce Rights.  If (i) no determination of entitlement to indemnification shall have been made within the time limitation for such a determination set forth in Section 4(a)(i), (ii) payment of indemnification pursuant to Section 4(a)(ii) is not made within the period permitted for such payment by such section, (iii) the Reviewing Party determines pursuant to Section 4(a) that Indemnitee is not entitled to indemnification under this Agreement, or (iv) Indemnitee has not received advancement of Expenses within the time period permitted for such advancement by Section 2(c), then Indemnitee shall have the right to enforce the indemnification and advancement rights granted under this Agreement by commencing litigation in any court of competent jurisdiction in the State of Delaware seeking an initial determination by the court or challenging any determination by the Reviewing Party or any aspect thereof.  The Company hereby consents to service of process and to appear in any such proceeding.  Any determination by the Reviewing Party not challenged by the Indemnitee within six months of the date of the Reviewing Party’s determination shall be binding on the Company and Indemnitee.  The remedy provided for in this Section 4 shall be in addition to any other remedies available to Indemnitee in law or equity.

(c)Defense to Indemnification, Burden of Proof, and Presumptions.

5

(i)To the maximum extent permitted by applicable law in making a determination with respect to entitlement to indemnification (or payment of Expense Advances) hereunder, the Reviewing Party shall presume that an Indemnitee is entitled to indemnification (or payment of Expense Advances) under this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by the Reviewing Party of any determination contrary to that presumption.

(ii)It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed.

(iii)For purposes of this Agreement, the termination of any claim, action, suit, or proceeding, by judgment, order, settlement (whether with or without court approval and whether with or without an admission of liability on the part of the Indemnitee), conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

(iv)  For purposes of any determination under this Agreement, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Company, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Company in the course of their duties, or on the advice of legal counsel for the Company or on information or records given or reports made to the Company by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Company. The provisions of this Section 4(c)(iv) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(v)The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

5.Indemnification for Expenses Incurred in Enforcing Rights.  The Company shall indemnify Indemnitee against any and all Expenses to the fullest extent permitted by law and, if requested by Indemnitee pursuant to the procedures set forth in Section 2(c), shall advance such Expenses to Indemnitee, that are incurred by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for:

(i)enforcement of this Agreement;

(ii)indemnification of Indemnifiable Costs or Expense Advances by the Company under this Agreement or any other agreement or under applicable law or the

6

Company’s Restated Certificate of Incorporation or Amended and Restated By-laws now or hereafter in effect relating to indemnification for Indemnifiable Events; and/or

(iii)recovery under directors’ and officers’ liability insurance policies maintained by the Company.

6.Notification and Defense of Proceeding.

(a)Notice.  Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee will, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof.  The failure to notify or promptly notify the Company shall not relieve the Company from any liability which it may have to the Indemnitee otherwise than under this Agreement, and shall not relieve the Company from liability hereunder except to the extent the Company has been prejudiced or as further provided in Section 6(c).

(b)Defense.  With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company will be entitled to participate in the Proceeding at its own expense and except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel selected by the Company.  After notice from the Company to Indemnitee of its election to assume the defense of any Proceeding, the Company will not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with the defense of such Proceeding other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ separate counsel in such Proceeding, but all Expenses related thereto incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s expense unless: (i) the employment of counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding, (iii) after a Change in Control, the employment of counsel by Indemnitee has been approved by the Independent Counsel, or (iv) the Company shall not within 60 calendar days in fact have employed counsel to assume the defense of such Proceeding, in each of which case all Expenses of the Proceeding shall be borne by the Company.  If the Company has selected counsel to represent Indemnitee and other current and former directors, officers or employees of the Company in the defense of a Proceeding, and a majority of such persons, including Indemnitee, reasonably object to such counsel selected by the Company pursuant to the first sentence of this Section 6(b), then such persons, including Indemnitee, shall be permitted to employ one additional counsel of their choice and the reasonable fees and expenses of such counsel shall be at the expense of the Company; provided, however, that such counsel shall be chosen from amongst the list of counsel, if any, approved by any company with which the Company obtains or maintains insurance.  In the event separate counsel is retained by a group of persons including Indemnitee pursuant to this Section 6(b), the Company shall cooperate with such counsel with respect to the defense of the Proceeding, including making documents, witnesses and other reasonable information related to the defense available to such separate counsel pursuant to joint-defense agreements or confidentiality agreements, as appropriate.  The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the determination provided for in (ii) above.

7

(c)Settlement of Claims.  The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent.  The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent.  Neither the Company nor the Indemnitee will unreasonably withhold their consent to any proposed settlement.  The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action; the Company’s liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement.

7.Non-Exclusivity.  The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the laws of the State of Delaware, the Company’s Restated Certificate of Incorporation, Amended and Restated By-laws, applicable law, or otherwise.  To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Company’s Restated Certificate of Incorporation, Amended and Restated By-laws, applicable law, or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change.

8.Liability Insurance.  To the extent the Company maintains an insurance policy or policies providing directors’ or officers’ liability insurance, Indemnitee, if a director of the Company, shall be covered by such policy or policies, in accordance with its or their terms.

9.Amendment of this Agreement.  No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.  Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

10.Subrogation.  In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

11.No Duplication of Payments.  The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (whether under the Company’s Restated Certificate of Incorporation, the Company’s Amended and Restated By-laws, any insurance policy, by law, or otherwise) of the amounts otherwise indemnifiable hereunder.

12.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and

8

legal representatives.  The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director of the Company or of any other enterprise at the Company’s request.

13.Severability.  If any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void, or otherwise unenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void, or unenforceable.

14.Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to the principles of conflicts of laws.

15.Entire Agreement.  Subject to Section 7 hereof, this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written, and implied, including the Prior Agreement, between the parties hereto with respect to the subject matter hereof.  

16.Notices.  All notices, demands, and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed

to the Company at:

35 W. Wacker Drive

Chicago, IL  60601

Attention:  General Counsel

and

to Indemnitee at:

The address on file for such Indemnitee with the Company’s Corporate Secretary

Notice of change of address shall be effective only when done in accordance with this Section.  All notices complying with this Section shall be deemed to have been received on the date of delivery or on the third business day after mailing.

*       *       *

9

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day specified above.

COMPANY:	DONNELLEY FINANCIAL SOLUTIONS, INC. By:  ______________________________________        Jennifer Reiners        Corporate Secretary
INDEMNITEE:	[NAME] ______________________________________

10

Exhibit A

REQUEST AND UNDERTAKING

Donnelley Financial Solutions, Inc.

35 W. Wacker Drive

Chicago, IL  60601

Attn: General Counsel

To Whom It May Concern:

I request, pursuant to Section 2(c) of the Indemnification Agreement, dated as of _________, 2016 (the “Indemnification Agreement”), between Donnelley Financial Solutions, Inc. (the “Company”) and me, that the Company advance Expenses (as such term is defined in the Indemnification Agreement) incurred in connection with [describe Proceeding] (the “Proceeding”).   I have attached an itemization, in reasonable detail, of the Expenses for which advancement is sought.

I undertake and agree to repay to the Company any funds advanced to me or paid on my behalf if it shall ultimately be determined that I am not entitled to indemnification.  I shall make any such repayment promptly following written notice of any such determination.

I agree that payment by the Company of my expenses in connection with the Proceeding in advance of the final disposition thereof shall not be deemed an admission by the Company that it shall ultimately be determined that I am entitled to indemnification.  

______________________

[Name]

Date: _________________

 

11

EX-31.1

Exhibit 31.1

Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a)

of the Securities Exchange Act of 1934

I, Daniel N. Leib, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Donnelley Financial Solutions, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	not applicable;
	(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2016

/s/    DANIEL N. LEIB

Daniel N. Leib

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a)

of the Securities Exchange Act of 1934

I, David A. Gardella, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Donnelley Financial Solutions, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	not applicable;
	(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2016

/s/    DAVID A. GARDELLA

David A. Gardella

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

CERTIFICATION PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b)

AND SECTION 1350 OF CHAPTER 63 OF TITLE 18

OF THE UNITED STATES CODE (18 U.S.C. 1350),

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Donnelley Financial Solutions, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel N. Lieb, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 9, 2016

/s/  DANIEL N. LEIB

Daniel N. Leib

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

CERTIFICATION PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b)

AND SECTION 1350 OF CHAPTER 63 OF TITLE 18

OF THE UNITED STATES CODE (18 U.S.C. 1350),

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Donnelley Financial Solutions, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David A. Gardella, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 9, 2016

/s/  DAVID A. GARDELLA

David A. Gardella

Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 04, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Trading Symbol	DFIN
Entity Registrant Name	Donnelley Financial Solutions, Inc.
Entity Central Index Key	0001669811
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		32,600,000

XML

Condensed Combined Statements of Operations (UNAUDITED) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Services net sales	$ 139.4	$ 142.1	$ 454.1	$ 479.9
Products net sales	85.0	89.5	308.4	331.0
Total net sales	224.4	231.6	762.5	810.9
Services cost of sales (exclusive of depreciation and amortization)	64.2	71.1	214.6	222.4
Products cost of sales (exclusive of depreciation and amortization)	62.0	50.9	179.9	177.5
Total cost of sales	146.4	144.2	472.5	489.8
Selling, general and administrative expenses (exclusive of depreciation and amortization)	48.5	47.5	156.8	151.2
Restructuring, impairment and other charges-net	1.7	1.4	3.6	3.3
Depreciation and amortization	9.8	10.3	30.1	32.0
Income from operations	18.0	28.2	99.5	134.6
Interest (income) expense-net	(0.1)	0.3	0.3	0.9
Earnings before income taxes	18.1	27.9	99.2	133.7
Income tax expense	7.9	11.1	39.3	52.6
Net earnings	$ 10.2	$ 16.8	$ 59.9	$ 81.1
Net earnings per share (Note 8):
Basic and diluted net earnings per share	$ 0.31	$ 0.52	$ 1.85	$ 2.50
Basic and diluted common shares outstanding	32.4	32.4	32.4	32.4
RRD Affiliates
Services cost of sales (exclusive of depreciation and amortization)	$ 8.7	$ 9.3	$ 29.4	$ 31.5
Products cost of sales (exclusive of depreciation and amortization)	$ 11.5	$ 12.9	$ 48.6	$ 58.4

XML

Condensed Combined Statements of Comprehensive Income (UNAUDITED) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
Net earnings	$ 10.2	$ 16.8	$ 59.9	$ 81.1
Other comprehensive (loss) income, net of tax:
Translation adjustments	0.2	(4.3)	4.2	(7.0)
Adjustment for net periodic pension plan cost	(0.2)	5.5	(0.4)	16.3
Other comprehensive income	0.0	1.2	3.8	9.3
Comprehensive income	$ 10.2	$ 18.0	$ 63.7	$ 90.4

XML

Condensed Combined Balance Sheets (UNAUDITED) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents	$ 53.0	$ 15.1
Receivables, less allowances for doubtful accounts of $5.4 in 2016 (2015 - $4.6)	198.5	146.2
Inventories	25.1	22.2
Prepaid expenses and other current assets	13.6	7.3
Total current assets	290.2	190.8
Property, plant and equipment-net	32.8	33.0
Goodwill	446.8	446.8
Other intangible assets-net	58.4	69.3
Software-net	45.1	43.4
Deferred income taxes	11.8	10.6
Other noncurrent assets	28.9	23.7
Total assets	914.0	817.6
LIABILITIES
Accounts payable	60.2	39.5
Accrued liabilities	84.8	75.4
Short-term debt	17.1	8.8
Total current liabilities	162.1	123.7
Long-term debt (Note 11)	619.4
Note payable with an RRD affiliate	0.0	29.2
Deferred compensation liabilities	29.4	28.5
Other noncurrent liabilities	14.5	12.7
Total liabilities	825.4	194.1
Commitments and Contingencies (Note 12)
EQUITY
Accumulated other comprehensive loss	(12.2)	(16.0)
Net parent company investment	100.8	639.5
Total equity	88.6	623.5
Total liabilities and equity	$ 914.0	$ 817.6

XML

Condensed Combined Balance Sheets (UNAUDITED) (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Receivables, allowance for doubtful accounts	$ 5.4	$ 4.6

XML

Condensed Combined Statements of Cash Flows (UNAUDITED) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
OPERATING ACTIVITIES
Net earnings	$ 59.9	$ 81.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	30.1	32.0
Provision for doubtful accounts receivable	1.7	0.8
Share-based compensation	1.2	1.3
Deferred income taxes	(1.0)	7.2
Other	0.7	0.2
Changes in operating assets and liabilities - net of acquisitions:
Accounts receivable - net	(54.6)	(40.4)
Inventories	(2.9)	(2.1)
Prepaid expenses and other current assets	(6.3)	0.6
Accounts payable	17.9	2.9
Income taxes payable and receivable	(0.6)	0.4
Accrued liabilities and other	10.7	(25.0)
Net cash provided by operating activities	56.8	59.0
INVESTING ACTIVITIES
Capital expenditures	(14.0)	(16.9)
Purchases of investments	(3.5)	0.0
Other investing activities	0.5	0.0
Net cash used in investing activities	(17.0)	(16.9)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	348.2	0.0
Net change in short-term debt	(8.8)	(18.9)
Debt issuance costs	(9.3)	0.0
Other financing activities	0.0	(14.8)
Net transfers to Parent and affiliates	(336.2)	(20.9)
Net cash used in financing activities	(6.1)	(54.6)
Effect of exchange rate on cash and cash equivalents	4.2	(2.6)
Net increase (decrease) in cash and cash equivalents	37.9	(15.1)
Cash and cash equivalents at beginning of year	15.1	28.6
Cash and cash equivalents at end of period	53.0	13.5
Supplemental non-cash disclosure:
Debt exchange with RR Donnelley, including $5.5 million of debt issuance costs	300.0	0.0
Settlement of intercompany note payable	29.6	0.0
Accrued debt issuance costs	$ 1.6	$ 0.0

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Condensed Combined Statements of Cash Flows (UNAUDITED) (Parenthetical) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($)
Statement Of Cash Flows [Abstract]
Debt issuance costs	$ 5.5

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Overview and Basis of Presentation

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Overview and Basis of Presentation

Note 1. Overview and Basis of Presentation

Description of Business and Separation

Donnelley Financial Solutions, Inc. (“Donnelley Financial,” “the Company” and “we”) is a financial communications services company that supports global capital markets compliance and transaction needs for its corporate clients and their advisors (such as law firms and investment bankers) and global investment markets compliance and analytics needs for mutual fund companies, variable annuity providers and broker/dealers. With proprietary technology such as data storage and workflow collaboration tools, deep subject matter expertise and a global footprint, Donnelley Financial produces, manages, stores, distributes and translates documents and electronic communications in order to deliver timely financial communications to investors and documents in a manner that complies with regulatory commissions.

Donnelley Financial’s Registration Statement on Form 10, as amended (“Form 10), was declared effective by the U.S. Securities and Exchange Commission (“SEC”) on September 20, 2016. On October 1, 2016, Donnelley Financial became an independent publicly traded company through the distribution by R.R. Donnelley & Sons Company (“RRD”) of approximately 26.2 million shares, or 80.75%, of Donnelley Financial common stock to RRD shareholders (the “Separation”). Holders of RRD common stock received one share of Donnelley Financial common stock for every eight shares of RRD common stock held on September 23, 2016. RRD retained approximately 6.2 million shares of Donnelley Financial common stock, or a 19.25% interest in Donnelley Financial, as part of the Separation, but expects to dispose of the common stock that it retained in the 12-month period following the Separation. Donnelley Financial’s common stock began regular-way trading under the ticker symbol “DFIN” on the New York Stock Exchange on October 3, 2016.  On October 1, 2016, RRD also completed the previously announced separation of LSC Communications, Inc. (“LSC”), its publishing and retail-centric print services and office products business.

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

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

The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients.

Basis of Presentation

The accompanying unaudited condensed combined interim financial statements have been prepared on a stand-alone basis and are derived from RRD’s consolidated financial statements and accounting records.  The unaudited condensed combined financial statements include the financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  

The financial data presented herein is unaudited and should be read in conjunction with the audited combined financial statements and accompanying notes for the year ended December 31, 2015 included in our Form 10. In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented.  Results of interim periods should not be considered indicative of the results of the full year. These unaudited condensed combined interim financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed combined financial statements. Actual results could differ from these estimates.

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

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

The income tax amounts in these unaudited condensed combined financial statements have been calculated based on a separate income tax return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions.

RRD maintains various benefit and share-based compensation plans at a corporate level.  Donnelley Financial employees participated in those programs and a portion of the cost of those plans is included in Donnelley Financial’s unaudited condensed combined financial statements.  However, Donnelley Financial’s unaudited condensed combined balance sheets do not include any equity related to share-based compensation plans.  On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. Refer to Note 5, Retirement Plans, for further details regarding the Company’s pension and other postretirement benefit plans. Refer to Note 6, Share Based Compensation, for further details regarding the Company’s share-based compensation plans.

Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Included in the unaudited condensed combined financial statements are net revenues from intercompany sales of $1.1 million and $1.9 million for the three months ended September 30, 2016 and September 30, 2015, respectively, and $3.6 million and $5.8 million for the nine months ended September 30, 2016 and September 30, 2015, respectively. Donnelley Financial utilizes RRD for freight and logistics, production of certain printed products and outsourced business services functions. Included in the unaudited condensed combined financial statements are cost of sales to RRD and affiliates of $20.2 million and $22.2 million for the three months ended September 30, 2016 and September 30, 2015, respectively, and $78.0 million and $89.9 million for the nine months ended September 30, 2016 and September 30, 2015, respectively.  Intercompany receivables and payables with RRD are reflected within net parent company investment in the accompanying unaudited condensed combined financial statements. See Note13, Related Parties, for a further description of related party transactions.

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Inventories

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Note 2. Inventories

The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at September 30, 2016 and December 31, 2015 were as follows:

	September 30,		December 31,
	2016		2015
Raw materials and manufacturing supplies	$	8.1	$	8.0
Work in process		11.2		9.6
Finished goods		5.8		4.6
Total	$	25.1	$	22.2

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Property, Plant and Equipment

9 Months Ended

Sep. 30, 2016

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

Note 3. Property, Plant and Equipment

The components of the Company’s property, plant and equipment at September 30, 2016 and December 31, 2015 were as follows:

	September 30,			December 31,
	2016			2015
Land	$	10.0		$	10.0
Buildings		44.5			44.7
Machinery and equipment		105.7			121.4
		160.2			176.1
Less: Accumulated depreciation		(127.4	)		(143.1	)
Total	$	32.8		$	33.0

Depreciation expense was $1.4 million and $1.9 million for the three months ended September 30, 2016 and 2015, respectively, and $6.1 million and $6.8 million for the nine months ended September 30, 2016 and 2015, respectively.

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 4. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2016 were as follows:

	U.S.		International		Total
Net book value as of December 31, 2015	$	429.2	$	17.6	$	446.8
Foreign exchange and other adjustments		—		—		—
Net book value as of September 30, 2016	$	429.2	$	17.6	$	446.8

The components of other intangible assets at September 30, 2016 and December 31, 2015 were as follows:

	September 30, 2016							December 31, 2015
	Gross							Gross
	Carrying		Accumulated			Net Book		Carrying		Accumulated			NetBook
	Amount		Amortization			Value		Amount		Amortization			Value
Customer relationships	$	139.8	$	(82.3	)	$	57.5	$	140.2	$	(71.8	)	$	68.4
Trade names		6.3		(5.5	)		0.8		6.3		(5.5	)		0.8
Trademarks, licenses and agreements		3.2		(3.1	)		0.1		6.2		(6.1	)		0.1
Total other intangible assets	$	149.3	$	(90.9	)	$	58.4	$	152.7	$	(83.4	)	$	69.3

Amortization expense for other intangible assets was $3.6 million and $3.9 million for the three months ended September 30, 2016 and 2015, respectively, and $10.8 million and $11.7 million for the nine months ended September 30, 2016 and 2015, respectively.

The following table outlines the estimated annual amortization expense related to other intangible assets as of September 30, 2016:

For the year ending December 31,	Amount
2016	$	14.4
2017		14.4
2018		13.8
2019		13.8
2020		12.4
2021 and thereafter		0.4
Total	$	69.2

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Retirement Plans

9 Months Ended

Sep. 30, 2016

Compensation And Retirement Disclosure [Abstract]

Retirement Plans

Note 5. Retirement Plans

Donnelley Financial’s Pension Plans

RRD maintained a defined benefit plan (the “plan”) for certain current and former U.S. employees of RRD. Effective December 31, 2013, RRD merged the plan into a separate defined benefit pension plan for Donnelley Financial to create a combined defined benefit pension plan (the “combined plan”). During 2015, the sponsorship of the combined plan was transferred to RRD, which became the legal obligor of the combined plan. Accordingly, the obligations of the combined plan are not reflected in the condensed combined balance sheet of Donnelley Financial as of December 31, 2015.

The components of the estimated net pension plan expense (income) for Donnelley Financial’s pension plans for the three and nine months ended September 30, 2016 and 2015 were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Pension expense (income)
Interest cost	$	—		$	36.9		$	—		$	110.5
Expected return on assets		—			(52.7	)		—			(158.0	)
Amortization, net		(0.2	)		9.1			(0.4	)		27.3
Net pension income	$	(0.2	)	$	(6.7	)	$	(0.4	)	$	(20.2	)
Less: income allocated to RRD affiliates		—			6.4			—			18.7
Net periodic benefit income, net of allocation	$	(0.2	)	$	(0.3	)	$	(0.4	)	$	(1.5	)

On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. The Company’s primary defined benefit plan is frozen. No new employees will be permitted to enter the Company’s frozen plan and participants will earn no additional benefits. Benefits are generally based upon years of service and compensation. These defined benefit retirement income plans are funded in conformity with the applicable government regulations. The Company funds at least the minimum amount required for all funded plans using actuarial cost methods and assumptions acceptable under government regulations.

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

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

Donnelley Financial’s condensed combined statements of operations include expense allocations for these benefits. These allocations were funded through intercompany transactions with RRD which are reflected within net parent company investment in Donnelley Financial. Total RRD pension and postretirement benefit plan net income allocated to Donnelley Financial, related to pension cost and postretirement benefits, was $1.3 million and $1.0 million in the three months ended September 30, 2016 and 2015, respectively, and $4.2 million and $3.0 million in the nine months ended September 30, 2016 and 2015, respectively. Included in these is an allocation for other postretirement benefit plans for $0.3 million and $0.5 million in the three months ended September 30, 2016 and 2015, respectively, and $1.0 million and $1.5 million in the nine months ended September 30, 2016 and 2015, respectively.  These allocations are reflected in the Company’s cost of sales and selling, general and administrative expenses.  

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Share Based Compensation

9 Months Ended

Sep. 30, 2016

Share Based Compensation [Abstract]

Share Based Compensation

Note 6. Share Based Compensation

RRD maintained an incentive stock program for the benefit of its officers, directors and certain employees, including certain Donnelley Financial employees.  The following disclosures represent the portion of RRD’s program in which Donnelley Financial’s employees and directors participated.  RRD’s share-based compensation programs in which Donnelley Financial employees participated included restricted stock units (“RSUs”).  

Share-based compensation expense includes expense attributable to the Company based on the award terms previously granted to the Company’s employees and an allocation of compensation expense for RRD’s corporate and shared functional employees.  As the share-based compensation plans are RRD’s plans, the amounts have been recognized through net parent company investment on the condensed combined balance sheets.  Total compensation expense related to all share based compensation plans was $0.2 million and $0.3 million for the three months ended September 30, 2016 and 2015, respectively, and $1.2 million and $1.3 million for the nine months ended September 30, 2016 and 2015, respectively.

In connection with the Separation, as of October 1, 2016 employee stock options and restricted stock units were adjusted and converted into new equity awards using a 10-day volume weighted average share price of Donnelley Financial, RRD and LSC, as described in the Separation and Distribution Agreement. Upon the Separation on October 1, 2016, holders of certain RRD stock options and RSUs received awards in Donnelley Financial, RRD and LSC pursuant to the Separation and Distribution Agreement. Converted awards retained the same vesting schedule and expiration date of the original awards.

On October 1, 2016, the Company awarded 156,169 shares of restricted stock and 60,748 RSUs to certain employees under the Donnelley Financial Solutions Performance Incentive Plan. 50% of each of the awards of restricted stock and RSUs will vest two years from the grant date and 50% will vest three years from the grant date. Vesting of the restricted stock awards is also subject to performance metrics. Both the restricted stock and RSU 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. On October 1, 2016, the Company also granted 16,620 restricted stock units to members of the Board of Directors, as a pro-rata portion of their annual equity retainer.

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Equity

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Equity

Note 7. Equity

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

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

Net transfers to parent company during the nine months ended September 30, 2016 included the transfer of $340.2 million of proceeds from borrowings under the Company’s $350.0 million senior secured term loan B facility and a $300.0 million debt exchange with RRD, partially offset by a $29.6 million non-cash settlement of an intercompany note payable and other transfers from RRD. Refer to Note 11, Debt, for further details regarding these transactions.

The Company’s equity as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows:

				Accumulated
	Net Parent			Other
	Company			Comprehensive			Total
	Investment			Loss			Equity
Balance at December 31, 2014	$	1,025.2		$	(673.7	)	$	351.5
Net earnings		81.1			—			81.1
Transfers to parent company, net		(15.5	)		—			(15.5	)
Other comprehensive income		—			9.3			9.3
Balance at September 30, 2015	$	1,090.8		$	(664.4	)	$	426.4

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Earnings per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings per Share

Note 8. Earnings per Share

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net earnings	$	10.2	$	16.8	$	59.9	$	81.1
Basic and diluted net earnings per share	$	0.31	$	0.52	$	1.85	$	2.50
Basic and diluted common shares outstanding		32.4		32.4		32.4		32.4

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Comprehensive Income

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Comprehensive Income

Note 9. Comprehensive Income

The components of other comprehensive income and income tax expense allocated to each component for the three and nine months ended September 30, 2016 and 2015 were as follows:

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

	Three Months Ended								Nine Months Ended
	September 30, 2015								September 30, 2015
	Before Tax			Income Tax		Net of Tax			Before Tax			Income Tax		Net of Tax
	Amount			Expense		Amount			Amount			Expense		Amount
Translation adjustments	$	(4.3	)	$	—	$	(4.3	)	$	(7.0	)	$	—	$	(7.0	)
Adjustment for net periodic pension plan cost		9.1			3.6		5.5			27.3			11.0		16.3
Other comprehensive income	$	4.8		$	3.6	$	1.2		$	20.3		$	11.0	$	9.3

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

	Pension Plan Cost			Translation Adjustments			Total
Balance at December 31, 2015	$	—		$	(16.0	)	$	(16.0	)
Other comprehensive income before reclassifications		—			4.2			4.2
Amounts reclassified from accumulated other comprehensive loss		(0.4	)		—			(0.4	)
Net change in accumulated other comprehensive loss		(0.4	)		4.2			3.8
Balance at September 30, 2016	$	(0.4	)	$	(11.8	)	$	(12.2	)

Accumulated other comprehensive loss by component as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows:

	Pension Plan Cost			Translation Adjustments			Total
Balance at December 31, 2014	$	(665.2	)	$	(8.5	)	$	(673.7	)
Other comprehensive loss before reclassifications		—			(7.0	)		(7.0	)
Amounts reclassified from accumulated other comprehensive loss		16.3			—			16.3
Net change in accumulated other comprehensive loss		16.3			(7.0	)		9.3
Balance at September 30, 2015	$	(648.9	)	$	(15.5	)	$	(664.4	)

Reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2016 and 2015 were as follows:  

	Three Months Ended					Nine Months Ended					Classification in the
	September 30,					September 30,					Condensed Combined
	2016			2015		2016			2015		Statements of Operations
Amortization of pension plan cost:
Net actuarial (loss) income	$	(0.2	)	$	9.1	$	(0.4	)	$	27.3	(a)
Reclassifications before tax		(0.2	)		9.1		(0.4	)		27.3
Income tax expense		—			3.6		—			11.0
Reclassifications, net of tax	$	(0.2	)	$	5.5	$	(0.4	)	$	16.3

(a) These accumulated other comprehensive (loss) income components are included in the calculation of net periodic pension (income) expense, a component of which was allocated to Donnelley Financial, and recognized in cost of sales and selling, general and administrative expenses in the condensed combined statements of operations (see Note 5, Retirement Plans).

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Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

Note 10. Segment Information

The Company’s segments are summarized below:

United States

The U.S. segment serves capital market and investment market clients in the U.S. by delivering products and services to help create, manage, and deliver, accurate and timely financial communications to investors and regulators. The Company also provides virtual data rooms to facilitate the deal management requirements of capital markets and mergers and acquisitions transactions, and provides data and analytics services that help professionals uncover intelligence from disclosures contained within public filings made with the SEC. The U.S segment also includes language solutions capabilities, through which the Company can translate documents and create content in up to 140 different languages for its clients, and commercial print.

International

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

Corporate

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

Information by Segment

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

								Income(Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Three Months Ended September 30, 2016
U.S.	$	193.6	$	(1.3	)	$	192.3	$	18.7		$	8.5	$	1.3
International		33.2		(1.1	)		32.1		1.1			1.1		—
Total operating segments		226.8		(2.4	)		224.4		19.8			9.6		1.3
Corporate		—		—			—		(1.8	)		0.2		0.4
Total operations	$	226.8	$	(2.4	)	$	224.4	$	18.0		$	9.8	$	1.7

								Income(Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Three Months Ended September 30, 2015
U.S.	$	203.3	$	(1.7	)	$	201.6	$	28.2		$	9.1	$	5.7
International		30.6		(0.6	)		30.0		0.2			1.1		0.4
Total operating segments		233.9		(2.3	)		231.6		28.4			10.2		6.1
Corporate		—		—			—		(0.2	)		0.1		—
Total operations	$	233.9	$	(2.3	)	$	231.6	$	28.2		$	10.3	$	6.1

								Income(Loss)					Depreciation
	Total		Intersegment			Net		from			Assets of		and		Capital
	Sales		Sales			Sales		Operations			Operations		Amortization		Expenditures
Nine Months Ended September 30, 2016
U.S.	$	666.4	$	(4.0	)	$	662.4	$	100.0		$	714.2	$	26.2	$	10.2
International		103.9		(3.8	)		100.1		7.2			99.9		3.2		1.2
Total operating segments		770.3		(7.8	)		762.5		107.2			814.1		29.4		11.4
Corporate		—		—			—		(7.7	)		99.9		0.7		2.6
Total operations	$	770.3	$	(7.8	)	$	762.5	$	99.5		$	914.0	$	30.1	$	14.0

								Income(Loss)					Depreciation
	Total		Intersegment			Net		from			Assets of		and		Capital
	Sales		Sales			Sales		Operations			Operations		Amortization		Expenditures
Nine Months Ended September 30, 2015
U.S.	$	708.8	$	(6.6	)	$	702.2	$	128.6		$	693.5	$	28.4	$	16.1
International		110.5		(1.8	)		108.7		10.0			92.7		3.3		0.8
Total operating segments		819.3		(8.4	)		810.9		138.6			786.2		31.7		16.9
Corporate		—		—			—		(4.0	)		200.4		0.3		—
Total operations	$	819.3	$	(8.4	)	$	810.9	$	134.6		$	986.6	$	32.0	$	16.9

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Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Debt

Note 11. Debt

On September 30, 2016, in connection with the Separation, the Company entered into a $350.0 million senior secured term loan B facility (the “Term Loan Credit Facility”) and a $300.0 million senior secured revolving credit facility (the “Revolving Facility,” and, together with the Term Loan Credit Facility, the “Credit Agreement”). The Credit Agreement is subject to a number of covenants, including a minimum Interest Coverage Ratio and a maximum Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $15.0 million in aggregate. As of September 30, 2016, there were no borrowings under the Revolving Facility.

On September 30, 2016, also in connection with the Separation, the Company issued $300.0 million of 8.25% senior unsecured notes due October 15, 2024 (the “Notes”). Interest on the Notes is payable semi-annually on April 15 and October 15, commencing on April 15, 2017. The issuance of the Notes was part of a debt exchange that resulted in the settlement of certain of RRD's bonds.Borrowings under the Term Loan Credit Facility were used to provide $340.2 million of cash to RRD, pursuant to the Separation Agreement, as of September 30, 2016. The remainder of the net proceeds was used for general corporate purposes.

In connection with the offering of the Notes, the Company entered into a registration rights agreement, dated as of September 30, 2016 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the SEC with respect to an offer to exchange the Notes for registered notes which will have terms identical in all material respects to the Notes except that the registered notes will not contain terms that provide for restrictions on transfer, and use its reasonable best efforts to cause the exchange offer registration statement to be declared effective by the SEC by June 27, 2017. In certain circumstances, the Company may be required to file a shelf registration statement with the SEC registering the resale of the Notes by the holders thereof, in lieu of an exchange offer to such holders. The Company will be required to pay specified additional interest on the Notes if it fails to comply with its registration obligations under the Registration Rights Agreement.

During the third quarter of 2016, the Company settled an intercompany note payable with RRD. Refer to Note 13, Related Parties for further details.

The Company’s debt as of September 30, 2016 and December 31, 2015 consisted of the following:

	September 30,			December 31,
	2016			2015
Term Loan Credit Facility	$	348.2		$	—
8.25% senior notes due October 15, 2024		300.0		—
Other	—				8.8
Unamortized debt issuance costs		(11.7	)	—
Total debt		636.5			8.8
Less: current portion		(17.1	)		(8.8	)
Long-term debt	$	619.4		$	—

The fair value of the senior notes, which was determined using the market approach based upon interest rates available to the Company for borrowings with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. As of September 30, 2016, the fair value of the Company’s debt was equivalent to its book value.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 12. Commitments and Contingencies

Litigation

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

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Related Parties

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Related Parties

Note 13.  Related Parties

Transition Services Agreements

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

Commercial Arrangements

The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients.

Stockholder and Registration Rights Agreement

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

Allocations from RRD

RRD provided Donnelley Financial with certain services, which include, but are not limited to information technology, finance, legal, human resources, internal audit, treasury, tax, investor relations and executive oversight. The financial information in these condensed combined financial statements does not necessarily include all the expenses that would have been incurred had Donnelley Financial been a separate, standalone entity for all periods presented. RRD charges Donnelley Financial for these services based on direct usage when possible. When specific identification is not practicable, the pro rata basis of revenue or employee headcount, or some other measure is used. These allocations were reflected as follows in the condensed combined financial statements:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Costs of goods sold allocation	$	8.3	$	9.5	$	28.0	$	29.2
Selling, general and administrative allocation		38.3		38.9		129.4		126.9
Depreciation and amortization		5.3		5.2		15.2		16.7
Total allocations from RRD	$	51.9	$	53.6	$	172.6	$	172.8

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

Related Party Revenues

Donnelley Financial generates a portion of net revenue from sales to RRD’s subsidiaries. Net revenues from intercompany sales of $1.1 million and $1.9 million for three months ended September 30, 2016 and 2015, respectively, and $3.6 million and $5.8 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statement of operations.

Related Party Purchases

Donnelley Financial utilizes RRD for freight and logistics and services as well as certain production of printed products.  Cost of sales of $11.5 million and $12.9 million for the three months ended September 30, 2016 and 2015, respectively, and $48.6 million and $58.4 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statements of operations for these purchases.

Donnelley Financial also utilizes RRD’s business process outsourcing business for certain composition, XBRL and other functions.  Cost of sales of $8.7 million and $9.3 million for the three months ended September 30, 2016 and 2015, respectively, and $29.4 million and $31.5 million for the nine months ended September 30, 2016 and 2015, respectively, were included in the condensed combined statements of operations for these purchases. 

Intercompany payables with RRD and affiliates for these purchases are reflected within net parent company investment in the condensed combined financial statements.

Share-Based Compensation

Certain Donnelley Financial employees participate in RRD’s share-based compensation plans, the costs of which have been allocated to Donnelley Financial and recorded in selling, general and administrative expenses in the condensed combined statements of operations. Share-based compensation costs allocated to the Company were $0.2 million and $0.3 million for the three months ended September 30, 2016 and 2015, respectively, and $1.2 million and $1.3 million for the nine months ended September 30, 2016 and 2015, respectively.

Retirement Plans

Donnelley Financial employees participated in pension and other postretirement plans sponsored by RRD.  These costs are reflected in the Company’s cost of sales and selling, general and administrative expenses in the condensed combined statements of operations.  These costs were funded through intercompany transactions with RRD which are reflected within the net parent company investment.

On October 1, 2016, Donnelley Financial recorded net pension plan liabilities of $68.3 million (consisting of a total benefit plan liability of $317.0 million, net of plan assets having fair market value of $248.7 million), as a result of the transfer of certain pension plan liabilities and assets from RRD to the Company upon the legal split of those plans. Refer to Note 5, Retirement Plans, for further details regarding the Company’s pension and other postretirement benefit plans.

Cash and Cash Equivalents

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

In accordance with the Separation and Distribution Agreement, there will be a cash adjustment payable to or receivable from RRD for the September 30, 2016 cash balance greater or less than an agreed-upon target cash balance of $50.0 million as defined in the Separation and Distribution Agreement. The Separation and Distribution Agreement also includes a provision for RRD to make a future cash payment of $68.0 million to Donnelley Financial no later than April 1, 2017. The $68.0 million receivable was recorded as of October 1, 2016.

Debt

RRD’s third party debt and related interest expense have not been allocated to the Company for any of the periods presented as the Company was not the legal obligor of the debt and the borrowings were not directly related to the Company’s business. An intercompany note payable with RRD at December 31, 2015 is presented in the accompanying condensed combined balance sheets. During the third quarter of 2016, the Company recorded a $29.6 million non-cash settlement related to this intercompany note payable.

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New Accounting Pronouncements

9 Months Ended

Sep. 30, 2016

Accounting Changes And Error Corrections [Abstract]

New Accounting Pronouncements

Note 14. New Accounting Pronouncements  

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting. For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and direct financing leases. The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted; however the Company plans to adopt the standard in the first quarter of 2019. The Company is evaluating the impact of ASU 2016-02.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which outlines a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 also requires additional quantitative and qualitative disclosures. In August 2015, the FASB issued Accounting Standards Update No. 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date of ASU 2014-09 to January 1, 2018. Early adoption of ASU 2014-09 is permitted in the first quarter of 2017.  However, the Company plans to adopt the standard in the first quarter of 2018. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or a modified retrospective adoption, meaning the standard is applied only to the most current period. The Company is evaluating the impact of the provisions of ASU 2014-09 and currently anticipates applying the modified retrospective approach when adopting the standard.

The following standards were effective for and adopted by the Company in 2016. The adoption of these standards did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows:

• Accounting Standards Update No. 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments”

• Accounting Standards Update No. 2015-07 “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”

• Accounting Standards Update No. 2015-04 “Compensation—Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets”

• Accounting Standards Update No. 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis”

• Accounting Standards Update No. 2015-01 “Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”

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Inventories (Tables)

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Components of Inventories

The components of the Company’s inventories, net of excess and obsolescence reserves for raw materials and finished goods, at September 30, 2016 and December 31, 2015 were as follows:

	September 30,		December 31,
	2016		2015
Raw materials and manufacturing supplies	$	8.1	$	8.0
Work in process		11.2		9.6
Finished goods		5.8		4.6
Total	$	25.1	$	22.2

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Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2016

Property Plant And Equipment [Abstract]

Components of Company's Property, Plant and Equipment

The components of the Company’s property, plant and equipment at September 30, 2016 and December 31, 2015 were as follows:

	September 30,			December 31,
	2016			2015
Land	$	10.0		$	10.0
Buildings		44.5			44.7
Machinery and equipment		105.7			121.4
		160.2			176.1
Less: Accumulated depreciation		(127.4	)		(143.1	)
Total	$	32.8		$	33.0

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Changes in the Carrying Amount of Goodwill by Segment

The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2016 were as follows:

	U.S.		International		Total
Net book value as of December 31, 2015	$	429.2	$	17.6	$	446.8
Foreign exchange and other adjustments		—		—		—
Net book value as of September 30, 2016	$	429.2	$	17.6	$	446.8

Components of Other Intangible Assets

The components of other intangible assets at September 30, 2016 and December 31, 2015 were as follows:

	September 30, 2016							December 31, 2015
	Gross							Gross
	Carrying		Accumulated			Net Book		Carrying		Accumulated			NetBook
	Amount		Amortization			Value		Amount		Amortization			Value
Customer relationships	$	139.8	$	(82.3	)	$	57.5	$	140.2	$	(71.8	)	$	68.4
Trade names		6.3		(5.5	)		0.8		6.3		(5.5	)		0.8
Trademarks, licenses and agreements		3.2		(3.1	)		0.1		6.2		(6.1	)		0.1
Total other intangible assets	$	149.3	$	(90.9	)	$	58.4	$	152.7	$	(83.4	)	$	69.3

Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets

The following table outlines the estimated annual amortization expense related to other intangible assets as of September 30, 2016:

For the year ending December 31,	Amount
2016	$	14.4
2017		14.4
2018		13.8
2019		13.8
2020		12.4
2021 and thereafter		0.4
Total	$	69.2

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Retirement Plans (Tables)

9 Months Ended

Sep. 30, 2016

Compensation And Retirement Disclosure [Abstract]

Components of Estimated Net Pension Plan Expense (Income)

The components of the estimated net pension plan expense (income) for Donnelley Financial’s pension plans for the three and nine months ended September 30, 2016 and 2015 were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Pension expense (income)
Interest cost	$	—		$	36.9		$	—		$	110.5
Expected return on assets		—			(52.7	)		—			(158.0	)
Amortization, net		(0.2	)		9.1			(0.4	)		27.3
Net pension income	$	(0.2	)	$	(6.7	)	$	(0.4	)	$	(20.2	)
Less: income allocated to RRD affiliates		—			6.4			—			18.7
Net periodic benefit income, net of allocation	$	(0.2	)	$	(0.3	)	$	(0.4	)	$	(1.5	)

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Equity (Tables)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Schedule of the Company's Equity Activity

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

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

The Company’s equity as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows:

				Accumulated
	Net Parent			Other
	Company			Comprehensive			Total
	Investment			Loss			Equity
Balance at December 31, 2014	$	1,025.2		$	(673.7	)	$	351.5
Net earnings		81.1			—			81.1
Transfers to parent company, net		(15.5	)		—			(15.5	)
Other comprehensive income		—			9.3			9.3
Balance at September 30, 2015	$	1,090.8		$	(664.4	)	$	426.4

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings per Common Share and the Average Number of Common Shares Outstanding

Basic and diluted earnings per common share and the average number of common shares outstanding were retrospectively restated for the number of Donnelley Financial shares outstanding immediately following this transaction. The same number of shares was used to calculate basic and diluted earnings per share since there were no Donnelley Financial equity awards outstanding prior to the spin-off.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net earnings	$	10.2	$	16.8	$	59.9	$	81.1
Basic and diluted net earnings per share	$	0.31	$	0.52	$	1.85	$	2.50
Basic and diluted common shares outstanding		32.4		32.4		32.4		32.4

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Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Schedule of Components of Other Comprehensive Income and Income Tax Expense Allocated to Each Component

The components of other comprehensive income and income tax expense allocated to each component for the three and nine months ended September 30, 2016 and 2015 were as follows:

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

	Three Months Ended								Nine Months Ended
	September 30, 2015								September 30, 2015
	Before Tax			Income Tax		Net of Tax			Before Tax			Income Tax		Net of Tax
	Amount			Expense		Amount			Amount			Expense		Amount
Translation adjustments	$	(4.3	)	$	—	$	(4.3	)	$	(7.0	)	$	—	$	(7.0	)
Adjustment for net periodic pension plan cost		9.1			3.6		5.5			27.3			11.0		16.3
Other comprehensive income	$	4.8		$	3.6	$	1.2		$	20.3		$	11.0	$	9.3

Schedule of Changes in Accumulated Other Comprehensive Loss

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

	Pension Plan Cost			Translation Adjustments			Total
Balance at December 31, 2015	$	—		$	(16.0	)	$	(16.0	)
Other comprehensive income before reclassifications		—			4.2			4.2
Amounts reclassified from accumulated other comprehensive loss		(0.4	)		—			(0.4	)
Net change in accumulated other comprehensive loss		(0.4	)		4.2			3.8
Balance at September 30, 2016	$	(0.4	)	$	(11.8	)	$	(12.2	)

Accumulated other comprehensive loss by component as of December 31, 2014 and September 30, 2015, and changes during the nine months ended September 30, 2015, were as follows:

	Pension Plan Cost			Translation Adjustments			Total
Balance at December 31, 2014	$	(665.2	)	$	(8.5	)	$	(673.7	)
Other comprehensive loss before reclassifications		—			(7.0	)		(7.0	)
Amounts reclassified from accumulated other comprehensive loss		16.3			—			16.3
Net change in accumulated other comprehensive loss		16.3			(7.0	)		9.3
Balance at September 30, 2015	$	(648.9	)	$	(15.5	)	$	(664.4	)

Reclassifications from Accumulated Other Comprehensive Loss, Amortization of Pension Plan Cost

Reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2016 and 2015 were as follows:  

	Three Months Ended					Nine Months Ended					Classification in the
	September 30,					September 30,					Condensed Combined
	2016			2015		2016			2015		Statements of Operations
Amortization of pension plan cost:
Net actuarial (loss) income	$	(0.2	)	$	9.1	$	(0.4	)	$	27.3	(a)
Reclassifications before tax		(0.2	)		9.1		(0.4	)		27.3
Income tax expense		—			3.6		—			11.0
Reclassifications, net of tax	$	(0.2	)	$	5.5	$	(0.4	)	$	16.3

(a) These accumulated other comprehensive (loss) income components are included in the calculation of net periodic pension (income) expense, a component of which was allocated to Donnelley Financial, and recognized in cost of sales and selling, general and administrative expenses in the condensed combined statements of operations (see Note 5, Retirement Plans).

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

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

								Income(Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Three Months Ended September 30, 2016
U.S.	$	193.6	$	(1.3	)	$	192.3	$	18.7		$	8.5	$	1.3
International		33.2		(1.1	)		32.1		1.1			1.1		—
Total operating segments		226.8		(2.4	)		224.4		19.8			9.6		1.3
Corporate		—		—			—		(1.8	)		0.2		0.4
Total operations	$	226.8	$	(2.4	)	$	224.4	$	18.0		$	9.8	$	1.7

								Income(Loss)			Depreciation
	Total		Intersegment			Net		from			and		Capital
	Sales		Sales			Sales		Operations			Amortization		Expenditures
Three Months Ended September 30, 2015
U.S.	$	203.3	$	(1.7	)	$	201.6	$	28.2		$	9.1	$	5.7
International		30.6		(0.6	)		30.0		0.2			1.1		0.4
Total operating segments		233.9		(2.3	)		231.6		28.4			10.2		6.1
Corporate		—		—			—		(0.2	)		0.1		—
Total operations	$	233.9	$	(2.3	)	$	231.6	$	28.2		$	10.3	$	6.1

								Income(Loss)					Depreciation
	Total		Intersegment			Net		from			Assets of		and		Capital
	Sales		Sales			Sales		Operations			Operations		Amortization		Expenditures
Nine Months Ended September 30, 2016
U.S.	$	666.4	$	(4.0	)	$	662.4	$	100.0		$	714.2	$	26.2	$	10.2
International		103.9		(3.8	)		100.1		7.2			99.9		3.2		1.2
Total operating segments		770.3		(7.8	)		762.5		107.2			814.1		29.4		11.4
Corporate		—		—			—		(7.7	)		99.9		0.7		2.6
Total operations	$	770.3	$	(7.8	)	$	762.5	$	99.5		$	914.0	$	30.1	$	14.0

								Income(Loss)					Depreciation
	Total		Intersegment			Net		from			Assets of		and		Capital
	Sales		Sales			Sales		Operations			Operations		Amortization		Expenditures
Nine Months Ended September 30, 2015
U.S.	$	708.8	$	(6.6	)	$	702.2	$	128.6		$	693.5	$	28.4	$	16.1
International		110.5		(1.8	)		108.7		10.0			92.7		3.3		0.8
Total operating segments		819.3		(8.4	)		810.9		138.6			786.2		31.7		16.9
Corporate		—		—			—		(4.0	)		200.4		0.3		—
Total operations	$	819.3	$	(8.4	)	$	810.9	$	134.6		$	986.6	$	32.0	$	16.9

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Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Schedule of the Company's Debt

The Company’s debt as of September 30, 2016 and December 31, 2015 consisted of the following:

	September 30,			December 31,
	2016			2015
Term Loan Credit Facility	$	348.2		$	—
8.25% senior notes due October 15, 2024		300.0		—
Other	—				8.8
Unamortized debt issuance costs		(11.7	)	—
Total debt		636.5			8.8
Less: current portion		(17.1	)		(8.8	)
Long-term debt	$	619.4		$	—

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Related Parties (Tables)

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Schedule of Allocation of Expenses Reflected in Condensed Combined Financial Statements

These allocations were reflected as follows in the condensed combined financial statements:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Costs of goods sold allocation	$	8.3	$	9.5	$	28.0	$	29.2
Selling, general and administrative allocation		38.3		38.9		129.4		126.9
Depreciation and amortization		5.3		5.2		15.2		16.7
Total allocations from RRD	$	51.9	$	53.6	$	172.6	$	172.8

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Overview and Basis of Presentation - Additional Information (Details) - USD ($) shares in Millions, $ in Millions		3 Months Ended		9 Months Ended
	Oct. 01, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Distribution of common shares during spinoff		26.2		26.2
Percentage of distribution of common shares during spinoff		80.75%		80.75%
Description of distribution of common shares during spinoff				Holders of RRD common stock received one share of Donnelley Financial common stock for every eight shares of RRD common stock held on September 23, 2016.
Net Sales		$ 224.4	$ 231.6	$ 762.5	$ 810.9
Transition Services Agreements
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Intercompany agreements, description				In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company and the Company agrees to provide certain services to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization.
Term of agreement				24 months
Commercial and Other Arrangements
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Intercompany agreements, description				The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients.
Term of agreement				24 months
R.R. Donnelley & Sons Company
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Net Sales		1.1	1.9	$ 3.6	5.8
R.R. Donnelley & Sons Company | Subsequent Event
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Distribution of common shares during spinoff	26.2
Number of common stock retained	6.2
Ownership percentage	19.25%
Net pension plan liabilities	$ 68.3
Total benefit plan liability	317.0
Plan assets, fair market value	$ 248.7
RRD Affiliates
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Cost of sales to RRD and affiliates		$ 20.2	$ 22.2	$ 78.0	$ 89.9

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Inventories - Components of Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Inventory Net [Abstract]
Raw materials and manufacturing supplies	$ 8.1	$ 8.0
Work in process	11.2	9.6
Finished goods	5.8	4.6
Total	$ 25.1	$ 22.2

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Property, Plant and Equipment - Components of Company's Property, Plant and Equipment (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Property Plant And Equipment [Abstract]
Land	$ 10.0	$ 10.0
Buildings	44.5	44.7
Machinery and equipment	105.7	121.4
Property, plant and equipment, gross	160.2	176.1
Less: Accumulated depreciation	(127.4)	(143.1)
Total	$ 32.8	$ 33.0

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Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Property Plant And Equipment [Abstract]
Depreciation expense	$ 1.4	$ 1.9	$ 6.1	$ 6.8

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Goodwill and Other Intangible Assets - Schedule of Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($)
Goodwill [Line Items]
Goodwill net book value, beginning balance	$ 446.8
Foreign exchange and other adjustments	0.0
Goodwill net book value, ending balance	446.8
U.S.
Goodwill [Line Items]
Goodwill net book value, beginning balance	429.2
Foreign exchange and other adjustments	0.0
Goodwill net book value, ending balance	429.2
International
Goodwill [Line Items]
Goodwill net book value, beginning balance	17.6
Foreign exchange and other adjustments	0.0
Goodwill net book value, ending balance	$ 17.6

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Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 149.3	$ 152.7
Accumulated Amortization	(90.9)	(83.4)
Net Book Value	58.4	69.3
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	139.8	140.2
Accumulated Amortization	(82.3)	(71.8)
Net Book Value	57.5	68.4
Trade Names
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	6.3	6.3
Accumulated Amortization	(5.5)	(5.5)
Net Book Value	0.8	0.8
Trademarks, Licenses and Agreements
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	3.2	6.2
Accumulated Amortization	(3.1)	(6.1)
Net Book Value	$ 0.1	$ 0.1

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Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense for other intangible assets	$ 3.6	$ 3.9	$ 10.8	$ 11.7

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Goodwill and Other Intangible Assets - Schedule of Estimated Annual Amortization Expense Related to Other Intangible Assets (Detail) $ in Millions	Sep. 30, 2016 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2016	$ 14.4
2017	14.4
2018	13.8
2019	13.8
2020	12.4
2021 and thereafter	0.4
Total	$ 69.2

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Retirement Plans - Components of Estimated Net Pension and Other Postretirement Benefit Plan Expense (Income) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Pension expense (income)
Interest cost	$ 0.0	$ 36.9	$ 0.0	$ 110.5
Expected return on assets	0.0	(52.7)	0.0	(158.0)
Amortization, net	(0.2)	9.1	(0.4)	27.3
Net pension income	(0.2)	(6.7)	(0.4)	(20.2)
Less: income allocated to RRD affiliates	0.0	6.4	0.0	18.7
Net periodic benefit income, net of allocation	$ (0.2)	$ (0.3)	$ (0.4)	$ (1.5)

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Retirement Plans - Additional Information (Details) - R.R. Donnelley & Sons Company - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Oct. 01, 2016
Defined Benefit Plan Disclosure [Line Items]
Pension cost and other postretirement benefits	$ 1.3	$ 1.0	$ 4.2	$ 3.0
Other Postretirement Benefit Plan
Defined Benefit Plan Disclosure [Line Items]
Pension cost and other postretirement benefits	$ 0.3	$ 0.5	$ 1.0	$ 1.5
Subsequent Event
Defined Benefit Plan Disclosure [Line Items]
Net pension plan liabilities					$ 68.3
Total benefit plan liability					317.0
Plan assets, fair market value					$ 248.7

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Share Based Compensation - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Oct. 01, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation		$ 0.2	$ 0.3	$ 1.2	$ 1.3
Share-based compensation award, description				In connection with the Separation, as of October 1, 2016 employee stock options and restricted stock units were adjusted and converted into new equity awards using a 10-day volume weighted average share price of Donnelley Financial, RRD and LSC, as described in the Separation and Distribution Agreement. Upon the Separation on October 1, 2016, holders of certain RRD stock options and RSUs received awards in Donnelley Financial, RRD and LSC pursuant to the Separation and Distribution Agreement. Converted awards retained the same vesting schedule and expiration date of the original awards.
Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation award, volume weighted average share price, measurement period	10 days
Subsequent Event | Restricted Stock | Performance Incentive Plan | Share-based Compensation Award, Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation award, vesting percentage	50.00%
Share-based compensation award, vesting period	2 years
Subsequent Event | Restricted Stock | Performance Incentive Plan | Share-based Compensation Award, Tranche Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation award, vesting percentage	50.00%
Share-based compensation award, vesting period	3 years
Subsequent Event | Restricted Stock | Performance Incentive Plan | Certain Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation award, granted	156,169
Subsequent Event | RSUs | Performance Incentive Plan | Share-based Compensation Award, Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation award, vesting percentage	50.00%
Share-based compensation award, vesting period	2 years
Subsequent Event | RSUs | Performance Incentive Plan | Share-based Compensation Award, Tranche Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation award, vesting percentage	50.00%
Share-based compensation award, vesting period	3 years
Subsequent Event | RSUs | Performance Incentive Plan | Certain Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation award, granted	60,748
Subsequent Event | RSUs | Performance Incentive Plan | Board of Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation award, granted	16,620

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Equity - Schedule of the Company's Equity Activity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Equity [Line Items]
Beginning Balance			$ 623.5	$ 351.5
Net earnings	$ 10.2	$ 16.8	59.9	81.1
Transfers to parent company, net			(598.6)	(15.5)
Other comprehensive income	0.0	1.2	3.8	9.3
Ending Balance	88.6	426.4	88.6	426.4
Net Parent Company Investment
Equity [Line Items]
Beginning Balance			639.5	1,025.2
Net earnings			59.9	81.1
Transfers to parent company, net			(598.6)	(15.5)
Other comprehensive income			0.0	0.0
Ending Balance	100.8	1,090.8	100.8	1,090.8
Accumulated Other Comprehensive Loss
Equity [Line Items]
Beginning Balance			(16.0)	(673.7)
Net earnings			0.0	0.0
Transfers to parent company, net			0.0	0.0
Other comprehensive income			3.8	9.3
Ending Balance	$ (12.2)	$ (664.4)	$ (12.2)	$ (664.4)

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Equity - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Equity [Line Items]
Net transfers to parent company, exchange of debt	$ 300,000,000	$ 0
Non-cash settlement of intercompany note payable and other transfers	29,600,000	$ 0
Senior Secured Term Loan B Facility
Equity [Line Items]
Net transfers to parent company, credit facility	350,000,000
R.R. Donnelley & Sons Company
Equity [Line Items]
Net transfers to parent company, exchange of debt	300,000,000
Non-cash settlement of intercompany note payable and other transfers	29,600,000
R.R. Donnelley & Sons Company | Senior Secured Term Loan B Facility
Equity [Line Items]
Net transfers to parent company, borrowings	$ 340,200,000

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Earnings per Share - Additional Information (Detail) shares in Millions		9 Months Ended
	Oct. 01, 2016 shares	Sep. 30, 2016 shares
Earnings Per Share [Line Items]
Distribution of common shares during spinoff		26.2
R.R. Donnelley & Sons Company | Spinoff
Earnings Per Share [Line Items]
Common stock received during spinoff, description		Holders of RRD common stock received one share of Donnelley Financial for every eight shares of RRD common stock held on September 23, 2016.
Subsequent Event | R.R. Donnelley & Sons Company
Earnings Per Share [Line Items]
Distribution of common shares during spinoff	26.2
Number of common stock retained	6.2
Subsequent Event | R.R. Donnelley & Sons Company | Spinoff
Earnings Per Share [Line Items]
Number of common stock retained	6.2
Conversion ratio of common stock received during spinoff	0.125

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Earnings per Share - Schedule of Basic and Diluted Earnings per Common Share and the Average Number of Common Shares Outstanding (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Net earnings	$ 10.2	$ 16.8	$ 59.9	$ 81.1
Basic and diluted net earnings per share	$ 0.31	$ 0.52	$ 1.85	$ 2.50
Basic and diluted common shares outstanding	32.4	32.4	32.4	32.4

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Comprehensive Income - Schedule of Components of Other Comprehensive Income and Income Tax Expense Allocated to Each Component (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive (loss) income, Before Tax Amount	$ 0.0	$ 4.8	$ 3.8	$ 20.3
Other comprehensive (loss) income, Income Tax Expense	0.0	3.6	0.0	11.0
Other comprehensive income	0.0	1.2	3.8	9.3
Translation adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive (loss) income, Before Tax Amount	0.2	(4.3)	4.2	(7.0)
Other comprehensive (loss) income, Income Tax Expense	0.0	0.0	0.0	0.0
Other comprehensive income	0.2	(4.3)	4.2	(7.0)
Adjustment for net periodic pension plan cost
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive (loss) income, Before Tax Amount	(0.2)	9.1	(0.4)	27.3
Other comprehensive (loss) income, Income Tax Expense	0.0	3.6	0.0	11.0
Other comprehensive income	$ (0.2)	$ 5.5	$ (0.4)	$ 16.3

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Comprehensive Income - Schedule of Components of Other Comprehensive (Loss) Income and Income Tax Expense Allocated to Each Component (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive (loss) income, Before Tax Amount	$ 0.0	$ 4.8	$ 3.8	$ 20.3
Other comprehensive (loss) income, Income Tax Expense	0.0	3.6	0.0	11.0
Other comprehensive income	0.0	1.2	3.8	9.3
Translation adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive (loss) income, Before Tax Amount	0.2	(4.3)	4.2	(7.0)
Other comprehensive (loss) income, Income Tax Expense	0.0	0.0	0.0	0.0
Other comprehensive income	0.2	(4.3)	4.2	(7.0)
Adjustment for net periodic pension plan cost
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive (loss) income, Before Tax Amount	(0.2)	9.1	(0.4)	27.3
Other comprehensive (loss) income, Income Tax Expense	0.0	3.6	0.0	11.0
Other comprehensive income	$ (0.2)	$ 5.5	$ (0.4)	$ 16.3

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Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance			$ 623.5	$ 351.5
Other comprehensive income	$ 0.0	$ 1.2	3.8	9.3
Ending Balance	88.6	426.4	88.6	426.4
Pension Plan Cost
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance			0.0	(665.2)
Other comprehensive income (loss) before reclassifications			0.0	0.0
Amounts reclassified from accumulated other comprehensive loss			(0.4)	16.3
Other comprehensive income	(0.2)	5.5	(0.4)	16.3
Ending Balance	(0.4)	(648.9)	(0.4)	(648.9)
Translation adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance			(16.0)	(8.5)
Other comprehensive income (loss) before reclassifications			4.2	(7.0)
Amounts reclassified from accumulated other comprehensive loss			0.0	0.0
Other comprehensive income	0.2	(4.3)	4.2	(7.0)
Ending Balance	(11.8)	(15.5)	(11.8)	(15.5)
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance			(16.0)	(673.7)
Other comprehensive income (loss) before reclassifications			4.2	(7.0)
Amounts reclassified from accumulated other comprehensive loss			(0.4)	16.3
Other comprehensive income			3.8	9.3
Ending Balance	$ (12.2)	$ (664.4)	$ (12.2)	$ (664.4)

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Comprehensive Income - Reclassifications from Accumulated Other Comprehensive Loss Amortization of Pension Plan Cost (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Defined Benefit Plans Adjustment, Net Actuarial (Loss) Income
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amortization of pension and other postretirement benefits plan cost: Reclassifications before tax	[1]	$ (0.2)	$ 9.1	$ (0.4)	$ 27.3
Pension Plan Cost
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amortization of pension and other postretirement benefits plan cost: Reclassifications before tax		(0.2)	9.1	(0.4)	27.3
Income tax expense		0.0	3.6	0.0	11.0
Reclassifications, net of tax		$ (0.2)	$ 5.5	$ (0.4)	$ 16.3

[1] These accumulated other comprehensive (loss) income components are included in the calculation of net periodic pension (income) expense, a component of which was allocated to Donnelley Financial, and recognized in cost of sales and selling, general and administrative expenses in the condensed combined statements of operations (see Note 5, Retirement Plans).

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Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Net Sales	$ 224.4	$ 231.6	$ 762.5	$ 810.9
Income (Loss) from Operations	18.0	28.2	99.5	134.6
Assets of Operations	914.0	986.6	914.0	986.6	$ 817.6
Depreciation and amortization	9.8	10.3	30.1	32.0
Capital Expenditures	1.7	6.1	14.0	16.9
Total Operating Segments
Segment Reporting Information [Line Items]
Net Sales	226.8	233.9	770.3	819.3
Income (Loss) from Operations	19.8	28.4	107.2	138.6
Assets of Operations	814.1	786.2	814.1	786.2
Depreciation and amortization	9.6	10.2	29.4	31.7
Capital Expenditures	1.3	6.1	11.4	16.9
Intersegment Sales
Segment Reporting Information [Line Items]
Net Sales	(2.4)	(2.3)	(7.8)	(8.4)
Corporate
Segment Reporting Information [Line Items]
Income (Loss) from Operations	(1.8)	(0.2)	(7.7)	(4.0)
Assets of Operations	99.9	200.4	99.9	200.4
Depreciation and amortization	0.2	0.1	0.7	0.3
Capital Expenditures	0.4	0.0	2.6	0.0
U.S.
Segment Reporting Information [Line Items]
Net Sales	192.3	201.6	662.4	702.2
U.S. | Total Operating Segments
Segment Reporting Information [Line Items]
Net Sales	193.6	203.3	666.4	708.8
Income (Loss) from Operations	18.7	28.2	100.0	128.6
Assets of Operations	714.2	693.5	714.2	693.5
Depreciation and amortization	8.5	9.1	26.2	28.4
Capital Expenditures	1.3	5.7	10.2	16.1
U.S. | Intersegment Sales
Segment Reporting Information [Line Items]
Net Sales	(1.3)	(1.7)	(4.0)	(6.6)
International
Segment Reporting Information [Line Items]
Net Sales	32.1	30.0	100.1	108.7
International | Total Operating Segments
Segment Reporting Information [Line Items]
Net Sales	33.2	30.6	103.9	110.5
Income (Loss) from Operations	1.1	0.2	7.2	10.0
Assets of Operations	99.9	92.7	99.9	92.7
Depreciation and amortization	1.1	1.1	3.2	3.3
Capital Expenditures	0.0	0.4	1.2	0.8
International | Intersegment Sales
Segment Reporting Information [Line Items]
Net Sales	$ (1.1)	$ (0.6)	$ (3.8)	$ (1.8)

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Debt - Additional Information (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)
Senior Notes
Debt Instrument [Line Items]
Interest payment period	semi-annually
Commencement of interest payment	Apr. 15, 2017
8.25% Senior Notes Due October 15, 2024
Debt Instrument [Line Items]
Senior notes	$ 300,000,000
Interest rate, stated percentage	8.25%
Maturity date	Oct. 15, 2024
R.R. Donnelley & Sons Company
Debt Instrument [Line Items]
Repayments of debt	$ 340,200,000
Senior Secured Term Loan B Facility
Debt Instrument [Line Items]
Credit facility	350,000,000
Borrowings	348,200,000
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility	300,000,000
Borrowings	0
Credit Agreement
Debt Instrument [Line Items]
Allowable annual dividend payment under credit agreement	$ 15,000,000

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Debt - Schedule of the Company's Debt (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Other		$ 8.8
Unamortized debt issuance costs	$ (11.7)
Total debt	636.5	8.8
Less: current portion	(17.1)	$ (8.8)
Long-term debt (Note 11)	619.4
8.25% Senior Notes Due October 15, 2024
Debt Instrument [Line Items]
Senior notes	300.0
Senior Secured Term Loan B Facility
Debt Instrument [Line Items]
Credit facility	$ 348.2

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Debt - Schedule of the Company's Debt (Parenthetical) (Details) - 8.25% Senior Notes Due October 15, 2024	9 Months Ended
	Sep. 30, 2016
Debt Instrument [Line Items]
Interest rate, stated percentage	8.25%
Maturity date	Oct. 15, 2024

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Related Parties - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Oct. 01, 2016
Related Party Transaction [Line Items]
Net Sales	$ 224.4	$ 231.6	$ 762.5	$ 810.9
Cost of sales	62.0	50.9	179.9	177.5
Share-based compensation costs	0.2	0.3	1.2	1.3
Non-cash settlement related to intercompany note payable			29.6	0.0
Outsourcing Business
Related Party Transaction [Line Items]
Cost of sales	8.7	9.3	29.4	31.5
R.R. Donnelley & Sons Company
Related Party Transaction [Line Items]
Net Sales	1.1	1.9	$ 3.6	5.8
Non-cash settlement related to intercompany note payable	29.6
R.R. Donnelley & Sons Company | Subsequent Event
Related Party Transaction [Line Items]
Net pension plan liabilities					$ 68.3
Total benefit plan liability					317.0
Plan assets, fair market value					248.7
Transition Services Agreements
Related Party Transaction [Line Items]
Intercompany agreements, description			In connection with the Separation, the Company entered into transition services agreements separately with RRD and LSC, under which, in exchange for the fees specified in the arrangements, RRD and LSC agree to provide certain services to the Company and the Company agrees to provide certain services to RRD, respectively, for up to 24 months following the Separation. These services include, but are not limited to, information technology, accounts receivable, accounts payable, payroll and other financial and administrative services and functions. These agreements facilitate the separation by allowing the Company to operate independently prior to establishing stand-alone back office systems across its organization.
Term of agreement			24 months
Commercial and Other Arrangements
Related Party Transaction [Line Items]
Intercompany agreements, description			The Company entered into a number of commercial and other arrangements with RRD and its subsidiaries. These include, among other things, arrangements for the provision of services, including global outsourcing and logistics services, printing and binding, digital printing, composition and access to technology. The Company also entered into a number of commercial and other arrangements with LSC and its subsidiaries, pursuant to which LSC will print and bind products for the Company. The terms of the arrangements with RRD and LSC do not exceed 24 months. Subsequent to the Separation, RRD and LSC are clients of the Company and expect to utilize financial communication software and services that the Company provides to all of its clients.
Term of agreement			24 months
Freight and Logistics and Services | R.R. Donnelley & Sons Company | Printed Products
Related Party Transaction [Line Items]
Cost of sales	11.5	$ 12.9	$ 48.6	$ 58.4
Separation and Distribution Agreement | R.R. Donnelley & Sons Company
Related Party Transaction [Line Items]
Target cash balance	$ 50.0		$ 50.0
Separation and Distribution Agreement | R.R. Donnelley & Sons Company | Subsequent Event
Related Party Transaction [Line Items]
Receivable from related party					$ 68.0

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Related Parties - Schedule of Allocation of Expenses Reflected in Condensed Combined Financial Statements (Details) - R.R. Donnelley & Sons Company - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Related Party Transaction [Line Items]
Total allocations from RRD	$ 51.9	$ 53.6	$ 172.6	$ 172.8
Costs of goods sold
Related Party Transaction [Line Items]
Total allocations from RRD	8.3	9.5	28.0	29.2
Selling, general and administrative
Related Party Transaction [Line Items]
Total allocations from RRD	38.3	38.9	129.4	126.9
Depreciation and amortization
Related Party Transaction [Line Items]
Total allocations from RRD	$ 5.3	$ 5.2	$ 15.2	$ 16.7