DFIN 2017 Annual Report

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. Year Ended December 31, 2017 2016 (in millions, except percentages) Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $847.9 $845.2 Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127.6 118.4 Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.0% 14.0% Restructuring, impairment and other charges-net . . . . . . . . . . . . . 3.9 4.7 Spin-off related transaction expenses . . . . . . . . . . . . . . . . . . . . . . 10.0 0.3 Net Sales for the Year Ended December 31, Reporting unit 2017 2016 $ Change % Change (in millions, except percentages) Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $455.4 $466.1 $(10.7) (2.3%) Investment Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . 345.4 336.1 9.3 2.8% Language Solutions and other . . . . . . . . . . . . . . . . . . . 47.1 43.0 4.1 9.5% Total U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $847.9 $845.2 $ 2.7 0.3% Net sales for the U.S. segment for the year ended December 31, 2017 were $847.9 million, an increase of $2.7 million, or 0.3%, compared to the year ended December 31, 2016. Net sales increased due to higher volumes in capital markets compliance, mutual fund print-related services, virtual data room services, mutual fund print volumes and content management, partially offset by lower capital markets transactions and healthcare volumes. An analysis of net sales by reporting unit follows: • Capital Markets: Sales decreased due to lower transactions volumes, partially offset by increased compliance volumes and virtual data room services. • Investment Markets: Sales increased due to higher volumes in mutual fund print-related services, mutual fund print and content management, partially offset by lower healthcare volumes and price pressures. • Language Solutions and other: Sales increased primarily due to higher volumes in commercial print. U.S. segment income from operations for the year ended December 31, 2017 increased $9.2 million, or 7.8%, as compared to the year ended December 31, 2016, due to cost control initiatives and higher volumes in capital markets compliance, mutual fund print-related services, virtual data room services, mutual fund print volumes and content management, partially offset by lower capital markets transactions and healthcare volumes and an increase in selling expenses, spin-off related transaction expenses and incentive compensation expense. Operating margins increased from 14.0% for the year ended December 31, 2016 to 15.0% for the year ended December 31, 2017 due to cost control initiatives. The increase in operating margins was partially offset by spin-off related transaction expenses which impacted margins by 1.2 percentage points and an increase in selling expenses and incentive compensation expense. International Year Ended December 31, 2017 2016 (in millions, except percentages) Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $157.0 $138.3 Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 9.6 Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6% 6.9% Restructuring, impairment and other charges-net . . . . . . . . . . . . . . . 2.2 0.6 35