DFIN 2017 Annual Report

Donnelley Financial Solutions, Inc. and Subsidiaries (“Donnelley Financial”) Consolidated and Combined Statements of Operations (in millions, except per share data) Year Ended December 31, 2017 2016 2015 Services net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 632.1 $598.6 $ 628.6 Products net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372.8 384.9 420.9 Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,004.9 983.5 1,049.5 Services cost of sales (exclusive of depreciation and amortization) . . . . . . . . . . . . . . . . . . . . 328.7 297.1 291.9 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.5 37.8 40.4 Products cost of sales (exclusive of depreciation and amortization) . . . . . . . . . . . . . . . . . . . . 240.9 226.2 230.9 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.3 57.9 68.3 Total cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621.4 619.0 631.5 Selling, general and administrative expenses (exclusive of depreciation and amortization) . . . . . . 232.9 209.8 199.2 Restructuring, impairment and other charges-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 5.4 4.4 Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.5 43.3 41.7 Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.0 106.0 172.7 Interest expense-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.9 11.7 1.1 Investment and other income-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1) — (0.1) Earnings before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.2 94.3 171.7 Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.5 35.2 67.4 Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9.7 $ 59.1 $ 104.3 Net earnings per share (Note 13): Basic net earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.29 $ 1.81 $ 3.22 Diluted net earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.29 $ 1.80 $ 3.22 Weighted average number to common shares outstanding Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.1 32.6 32.4 Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.3 32.8 32.4 *Beginning in the quarter ended June 30, 2017, LSC Communications, Inc. (“LSC”) no longer qualified as a related party, therefore the 2017 amounts disclosed related to LSC are presented through March 31, 2017 only. Beginning in the quarter ended September 30, 2017, R.R. Donnelley & Sons Company (“RRD”) no longer qualified as a related party, therefore the 2017 amounts disclosed related to RRD are presented through June 30, 2017 only. See Notes to the Consolidated and Combined Financial Statements F-2