DFIN 2017 Annual Report

Changes in market conditions, changes in discount rates, or lower returns on assets may increase required pension and other post-retirement benefits plan contributions in future periods. The funded status of our pension and other post-retirement benefits plans is dependent upon many factors, including returns on invested assets and the level of certain interest rates. As experienced in prior years, declines in the market value of the securities held by the plans coupled with historically low interest rates have substantially reduced, and in the future could further reduce, the funded status of the plans. These reductions may increase the level of expected required pension and other post- retirement benefits plan contributions in future years. Various conditions may lead to changes in the discount rates used to value the year-end benefit obligations of the plans, which could partially mitigate, or worsen, the effects of lower asset returns. If adverse conditions were to continue for an extended period of time, our costs and required cash contributions associated with pension and other post-retirement benefits plans may substantially increase in future periods. We are exposed to risks related to potential adverse changes in currency exchange rates. We are exposed to market risks resulting from changes in the currency exchange rates of the currencies in the countries in which we do business. Although operating in local currencies may limit the impact of currency rate fluctuations on the operating results of our non-U.S. activities, fluctuations in such rates may affect the translation of these results into our financial statements. To the extent borrowings, sales, purchases, net sales and expenses or other transactions are not in the applicable local currency, we may enter into foreign currency spot and forward contracts to hedge the currency risk. Management cannot be sure, however, that our efforts at hedging will be successful, and such efforts could, in certain circumstances, lead to losses. There are risks associated with operations outside the United States. We have operations outside the United States. We work with capital markets clients around the world, and in 2017 our International segment accounted for 16% of our consolidated net sales. Our operations outside of the United States are primarily focused in Europe, Asia, Canada and Latin America. As a result, we are subject to the risks inherent in conducting business outside the United States, including: • costs of customizing products and services for foreign countries; • difficulties in managing and staffing international operations; • increased infrastructure costs including legal, tax, accounting and information technology; • reduced protection for intellectual property rights in some countries; • potentially greater difficulties in collecting accounts receivable, including currency conversion and cash repatriation from foreign jurisdictions; • increased licenses, tariffs and other trade barriers; • potentially adverse tax consequences; • increased burdens of complying with a wide variety of foreign laws, including employment-related laws, which may be more stringent than U.S. laws; • unexpected changes in regulatory requirements; • political and economic instability; and • compliance with applicable anti-corruption and sanction laws and regulations. We cannot be sure that our investments or operations in other countries will produce desired levels of net sales or that one or more of the factors listed above will not affect our global business. Our reliance on strategic partnerships as part of our business strategy may adversely affect the development of our business in those areas. Our business strategy includes pursuing and maintaining strategic partnerships in order to facilitate our entry into adjacent lines of business. This approach may expose us to risk of conflict with our strategic arrangement partners and the need to divert management resources to oversee these partnership arrangements. Further, as these arrangements require cooperation with third party partners, these strategic arrangements may not be able to make decisions as quickly as we would if we were operating on our own or may take actions that are different from what we would do on a standalone basis in light of the need to consider our partners’ interests. As a result, we may be less able to respond timely to changes in market dynamics, which could have a material adverse effect on our business, financial condition and results of operations. 19