DFS Annual Report

Net Sales for the Year Ended December 31, Reporting unit 2016 2015 $ Change % Change (in millions, except percentages) Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $466.1 $517.4 $(51.3) (9.9%) Investment Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . 336.1 339.3 (3.2) (0.9%) Language Solutions and other . . . . . . . . . . . . . . . . . . . 43.0 44.1 (1.1) (2.5%) Total U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $845.2 $900.8 $(55.6) (6.2%) Net sales for the U.S. segment for the year ended December 31, 2016 were $845.2 million, a decrease of $55.6 million, or 6.2%, compared to the year ended December 31, 2015. Net sales decreased primarily due to lower capital markets transactions and compliance volume, lower commercial and mutual funds 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 for the U.S segment by reporting unit follows: • Capital Markets: Sales decreased due to lower transactional and compliance volumes, partially offset by an increase in virtual data room services. • Investment Markets: Sales decreased slightly due to lower mutual funds print 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 for the year ended December 31, 2016 decreased $41.9 million, or 26.1%, as compared to the year ended December 31, 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 17.8% for the year ended December 31, 2015 to 14.0% for the year ended December 31, 2016 due to unfavorable mix driven by lower capital markets transactions, partially offset by cost control initiatives. International Year Ended December 31, 2016 2015 (in millions, except percentages) Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $138.3 $148.7 Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 15.3 Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9% 10.3% Restructuring, impairment and other charges-net . . . . . . . . . . . . . . . 0.6 0.9 Net sales for the International segment for the year ended December 31, 2016 were $138.3 million, a decrease of $10.4 million, or 7.0%, compared to the year ended December 31, 2015 including a $5.4 million, or 3.6%, 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 for the year ended December 31, 2016 decreased $5.7 million, or 37.3%, compared to the year ended December 31, 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 10.3% for the year ended December 31, 2015 to 6.9% for the year ended December 31, 2016 due to lower capital markets transactions, partially offset by cost control initiatives and lower incentive compensation expense. 34