DFIN 2017 Annual Report

Notes to the Consolidated and Combined Financial Statements (in millions, except per share data, unless otherwise indicated) Condensed Consolidating Statements of Operations Year Ended December 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Services net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $518.5 $121.7 $ (8.1) $ 632.1 Products net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 338.1 39.1 (4.4) 372.8 Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 856.6 160.8 (12.5) 1,004.9 Services cost of sales (exclusive of depreciation and amortization) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 257.3 78.8 (7.4) 328.7 Services cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* . . . . . . . . . — 18.4 1.1 — 19.5 Products cost of sales (exclusive of depreciation and amortization) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 221.5 24.5 (5.1) 240.9 Products cost of sales with R.R. Donnelley affiliates (exclusive of depreciation and amortization)* . . . . . . . . . — 30.1 2.2 — 32.3 Total cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 527.3 106.6 (12.5) 621.4 Selling, general and administrative expenses (exclusive of depreciation and amortization) . . . . . . . . . . . . . . . . . . . . . . . . . — 194.1 38.8 — 232.9 Restructuring, impairment and other charges-net . . . . . . . . . . . . — 4.9 2.2 — 7.1 Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . — 38.2 6.3 — 44.5 Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 92.1 6.9 — 99.0 Interest expense (income)-net . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 (0.1) (0.1) — 42.9 Investment and other income-net . . . . . . . . . . . . . . . . . . . . . . . . . — — (0.1) — (0.1) Earnings (loss) before income taxes and equity in net income of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43.1) 92.2 7.1 — 56.2 Income tax (benefit) expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16.7) 60.6 2.6 — 46.5 Earnings (loss) before equity in net income of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26.4) 31.6 4.5 — 9.7 Equity in net income of subsidiaries . . . . . . . . . . . . . . . . . . . . . . 36.1 4.5 — (40.6) 0.0 Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9.7 $ 36.1 $ 4.5 $(40.6) $ 9.7 Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13.4 $ 39.8 $ 8.9 $(48.7) $ 13.4 *Beginning in the quarter ended June 30, 2017, 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, RRD no longer qualified as a related party, therefore the amounts disclosed related to RRD are presented through June 30, 2017 only. F-40