RRD RR Donnelley & Sons Co

Risks

• Global market and economic conditions, as well as the effects of these conditions on our clients’ businesses, may adversely affect us.
• Changes in customer preferences have reduced, and may continue to reduce, demand for our products and services in certain markets. In addition, failure to manage changes in our relationships with our significant clients may have an adverse effect on our results of operations.
• Our business is dependent upon brand reputation and the quality of our client support and services offerings. If we fail to offer effective client support and services, our brand reputation could be harmed and clients may not use our products and services, which may have an adverse effect on our results of operations.
• Our operations are subject to political and regulatory risks in the countries in which we operate.
• We are subject to taxation related risks in multiple jurisdictions.
• Adverse financial market conditions, our operating performance and our creditworthiness may limit our ability to obtain future financing and the cost of any such capital may be higher than in past periods.
• Our ABL Credit Agreement limits our borrowing capacity to the value of certain of our assets. In addition, our obligations under our ABL Credit Agreement and Term Loan Credit Agreement are secured by substantially all of the assets of the Company and our material domestic subsidiaries and lenders may exercise remedies against the collateral if an event of default occurs.
• Restrictive covenants in our ABL Credit Agreement and Term Loan Credit Agreement could limit our financial and operating flexibility.
• An increase in interest rates could have a material adverse effect on our business.
• We may be adversely affected by a decline in the availability of raw materials or by fluctuations in the costs of paper, ink, energy and other raw materials.
• We may be unable to improve our operating efficiency rapidly enough to meet market conditions.
• A decline in our Company’s or our individual reporting units’ expected profitability may result in the impairment of assets, including goodwill, other long-lived assets and deferred tax assets.
• Our services depend on the reliability of computer systems we and our vendors maintain. If our systems fail or are unreliable, our operations may be adversely affected.
• We may suffer a material data breach of sensitive information. If our efforts to protect the security of such information are unsuccessful, any such material failures may result in significant costs to investigate and remediate the data-breach, private litigation expense and costly government enforcement actions and penalties, and may have an adverse effect on our operations and reputation.
• We have in the past acquired, and intend in the future to acquire, other businesses, and we may be unable to successfully integrate the operations of these businesses and may not achieve the cost savings and increased net sales anticipated as a result of these acquisitions.
• The trend of increasing costs to provide health care and other benefits to our employees and retirees may continue.
• Changes in market conditions or lower returns on assets may increase required pension and OPEB plan contributions in future periods.
• We may be more vulnerable to adverse events and trends associated with operations outside the U.S.
• We are exposed to significant risks related to potential adverse changes in currency exchange rates.
• Catastrophic events may damage or destroy our factories, distribution centers or other facilities, which may disrupt our business.
• Changes in rules and regulations to which we are subject may increase our costs, which may adversely affect us.
• Changes in postal rates, regulations and delivery structure may adversely affect demand for our products and services.
• Increased transportation costs and changes in the relationships with independent shipping companies may have an adverse effect on our business.
• Undetected errors or failures found in our products and services may result in loss of or delay in market acceptance of our products and services that may seriously harm our business.
• We may be contingently liable for various LSC Communications, Inc. and Donnelley Financial Solutions, Inc. operating leases.
• The spinoff transactions of LSC and Donnelley Financial in October 2016 could result in significant tax liability.