Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of July ~~31, 2020, 33,829,165~~30, 2021, 33,606,833 shares of common stock were outstanding.

Donnelley Financial Solutions, Inc. and ~~Subsidiaries~~subsidiaries (“DFIN” or the “Company”) has made forward-looking statements in this Quarterly Report on Form 10-Q (the “Quarterly Report”) within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of the Company. Generally, forward-looking statements include information concerning possible or assumed future actions, events, or results of operations of the Company. These statements may include words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “continues,” “believes,” “may,” “will,” “goals” and variations of such words and similar expressions are intended to identify the Company’s forward-looking statements.

~~Condensed Consolidated Statements~~Forward-looking statements are not guarantees of ~~Operations~~future performance. These forward-looking statements are subject to a number of important factors, including those factors discussed in detail in “Item 1A: Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021 (the “Annual Report”), in addition to those discussed elsewhere in this Quarterly Report, that could cause the Company’s actual results to differ materially from those indicated in any such forward-looking statements. These factors include, but are not limited to:

Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Undue reliance should not be placed on such statements, which speak only as of the date of this document or the date of any document that may be incorporated by reference into this document.

(Consequently, readers of the Quarterly Report should consider these forward-looking statements only as the Company’s current plans, estimates and beliefs. Except to the extent required by law, the Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. The Company undertakes no obligation to update or revise any forward-looking statements in ~~millions, except per share data)~~this Quarterly Report to reflect any new events or any change in conditions or circumstances other than to the extent required by law.

Condensed Consolidated Statements of ~~Changes in Stockholders’ Equity~~Operations

Depreciation expense was ~~$4.1~~$1.7 million and ~~$1.8~~$4.1 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$5.8~~$3.1 million and ~~$3.3~~$5.8 million for the six months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively.

Assets Held for Sale—As of June 30, 2021 and December 31, ~~2019,~~2020, the Company had one real estate property, primarily consisting of land and an office building, held for sale with a carrying value of ~~$5.6~~$5.5 million. In the second quarter of 2020, the Company suspended the sale process due to uncertainties in the real estate market as a result of the coronavirus pandemic and reclassified assets held for sale back into its respective property, plant and equipment categories.

Software—Capitalized software development costs are amortized over their estimated useful life using the straight-line method, up to a maximum of of three ~~years.~~years. Amortization expense related to internally-developed software, excluding amortization expense related to other intangible assets, was ~~$7.3~~$8.1 million and ~~$6.6~~$7.3 million for the three months ended June 30, ~~2020~~2021 and ~~2019~~,2020, respectively, and ~~$14.6~~$16.3 million and ~~$13.5~~$14.6 million for the six months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively.

Investments—The carrying value of the Company’s investments in equity securities was ~~$12.3~~$13.3 million and ~~$25.2~~$13.4 million at June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. ~~During the three months ended June 30, 2020, the Company sold one of its investments in equity securities for $12.8 million, which approximated the carrying value of the investment.~~ The Company measures its equity securities that do not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company performs an assessment on a quarterly basis to determine whether triggering events for impairment exist and to identify any observable price changes. During the six months ended June 30, ~~2020, there were no events or changes in circumstances that suggested~~2021, the Company recorded an ~~impairment or~~unrealized loss of $0.2 million resulting from an observable price change of ~~any of these investments resulting from~~an investment due to an orderly transaction for the identical or a similar investment.

~~Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)~~

~~Notes to~~Current Expected Credit Loss Reserve—Transactions affecting the ~~Unaudited Condensed Consolidated Financial Statements (continued)~~

~~(in millions, except per share data, unless otherwise indicated)~~

~~Share-based Compensation~~current expected credit loss (“CECL”)~~—Share-based compensation expense was $3.1 million and $3.6 million for the three months ended June 30, 2020 and 2019, respectively, and $5.4 million and $5.1 million for~~reserve during the six months ended June 30, 2021 and 2020 ~~and 2019, respectively. The income tax benefit related to share-based compensation expense was $0.5 million and $0.9 million for the three months ended~~were as follows:


	June 30, 2021			June 30, 2020
Balance, beginning of year (a)	$	10.5		$	7.7
Adoption of ASU 2016-13 (b)		0			0.5
Provisions charged to expense and reclassifications		3.4			4.3
Write-offs and other		(0.5	)		(1.0	)
Balance, end of period (a)	$	13.4		$	11.5

(a)

As of June 30, 2021, the CECL reserve balance is comprised of a $12.2 million provision for accounts receivable and a $1.2 million provision for unbilled receivables and contract assets. As of December 31, 2020, the CECL reserve balance was comprised of a $10.1 million provision for accounts receivable and ~~2019, respectively,~~a $0.4 million provision for unbilled receivables and ~~$0.6 million and $1.3 million for~~contract assets.

(b)

On January 1, 2020, the ~~six months ended June 30, 2020 and 2019, respectively.~~

~~Recently Adopted Accounting~~ ~~Pronouncements~~

~~In June 2016, the Financial Accounting Standards Board (“FASB”) issued an~~Company adopted Accounting Standards Update (“ASU”) ~~No.~~ 2016-13, Financial Instruments -– Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, ~~(“ASU 2016-13”), which replaces the incurred loss model with~~and recorded a current expected credit loss (“CECL”) model and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. This standard applies to financial assets, measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases and trade accounts receivable. The guidance must be adopted using a modified retrospective transition method through a$0.5 million cumulative-effect adjustment to retained earnings, as further disclosed in the ~~period of adoption.~~Annual Report.

On January 1, 2020, the Company adopted the standard and recorded a $0.5 million cumulative-effect adjustment to retained earnings. The Company’s credit loss reserves primarily relate to trade receivables, unbilled receivables and contract assets. The Company establishes provisions at differing rates, which are region or country-specific, and are based upon the age of the trade receivable, the Company’s historical collection experience in each region or country and lines of business, where appropriate. Provisions for unbilled receivables and contract assets are established based on rates which management believes to be appropriate considering its historical experience. Specific customer provisions are made when a review of significant outstanding amounts, utilizing information about customer creditworthiness and current economic trends, indicates that collection is doubtful.

~~Transactions affecting the current expected credit loss reserve during the six months ended June 30, 2020 were as follows:~~

June 30, 2020

Balance, beginning of year
$
7.7

Adoption of ASU 2016-13

0.5

Provisions charged to expense and reclassifications

4.3

Write-offs and other

(1.0
)
Balance, end of period (a)
$
11.5

~~(a)~~

As of June 30, 2020, the CECL reserve balance is comprised of a $10.7 million provision for accounts receivable and a $0.8 million provision for unbilled receivables and contract assets, all of which are included in receivables, net on the Unaudited Condensed Consolidated Balance Sheet. As of December 31, 2019, prior to the adoption of ASU 2016-13, the reserve balance was comprised of a $7.7 million allowance for doubtful accounts.

I11n August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).” The standard requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as an asset related to the service contract and to expense the capitalized implementation costs over the term of the hosting arrangement. The standard is effective for fiscal years beginning after December 15, 2019, and the interim periods within those fiscal years. The Company adopted the standard prospectively on January 1, 2020. The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements.

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited period of time to use optional expedients and exceptions for applying U.S. GAAP to contracts and other transactions affected by reference rate reform, if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts and other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. Generally, the expedients and exceptions provided by ASU 2020-04 would only be allowed for contract modifications made prior to December 31, 2022. The Company adopted the standard prospectively in the second quarter of 2020. The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements.

Recently ~~Issued~~Adopted Accounting Pronouncements

In December 2019, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies ~~ASC~~Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. ASU 2019-12 also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for ~~tax~~ goodwill and allocating taxes to members of a consolidated group. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. ~~Early adoption is permitted.~~ The Company ~~is currently evaluating~~adopted the ~~impact the~~standard prospectively on January 1, 2021. The adoption of this standard ~~will~~did not have a material impact on ~~its condensed consolidated financial statements.~~the Company’s Unaudited Condensed Consolidated Financial Statements.

Note 2. Revenue

Revenue Recognition

The Company manages highly-customized data and materials ~~such as~~to enable filings with the SEC on behalf of its customers ~~pursuant to the Securities Act of 1933,~~ as ~~amended (the “Securities Act”), the Securities Exchange Act of 1934,~~well as ~~amended (the “Exchange Act”), and the Investment Company Act of 1940, as amended (the “Investment Act”),~~ manages virtual data rooms and performs eXtensible Business Reporting Language (“XBRL”) and ~~related~~other services. Clients are provided with EDGAR filing services, XBRL compliance services and translation, editing, interpreting, proof-reading and multilingual typesetting services, among ~~others.~~other services. The Company’s software solutions include Venue, the ~~FundSuiteArc~~Arc Suite software platform, ActiveDisclosure and data and analytics, among others. The Company also provides digital document creation, online content management and print and distribution solutions to public and private companies, mutual funds and other regulated investment firms to serve their regulatory and compliance needs.

~~Substantially all of the Company’s revenue is derived from contracts with an initial expected duration of one year or less. Generally, customer payment is due within ten days upon invoicing.~~

Revenue is recognized upon transfer of control of promised services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The Company’s services include software solutions and tech-enabled services whereas the Company’s products are comprised of print and distribution offerings. The Company’s arrangements with customers often include promises to transfer multiple services or products to a customer. Determining whether services and products are considered distinct performance obligations that should be accounted for separately requires significant judgment. Certain customer arrangements have multiple performance obligations as certain promises are both capable of being distinct and are distinct within the context of the contract. Other customer arrangements have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts, and therefore are not distinct.

Revenue for the Company’s tech-enabled services, software solutions and print and distribution offerings is recognized either over time or at a point in time, as ~~outlined below.~~further disclosed in the Annual Report.

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

~~Over time~~

~~The Company recognizes revenue for certain services over time:~~

•

The Company’s software solutions, including Venue, the FundSuiteArc software platform, ActiveDisclosure, data and analytics and others, are generally provided on a subscription basis and allow customers access to use the products over the contract period. As a result, software solutions revenue is predominantly recognized ratably over time as the customer receives the benefit throughout the contract period. ~~The timing of invoicing varies, however, the customer may be invoiced before the end of the contract period, resulting in a deferred revenue balance.~~

~~Point in time~~

Certain revenue arrangements, primarily for tech-enabled services and print and distribution offerings, are recognized at a point in time and are primarily invoiced upon completion of all services or upon shipment to the customer.

•

Certain arrangements include multiple performance obligations and revenue is recognized upon completion of each performance obligation, such as when a document is filed with a regulatory agency and upon completion of printing the related document. For arrangements with multiple performance obligations, the transaction price is allocated to the separate performance obligations. The Company provides customer specific solutions and as such, observable standalone selling price is rarely available. Standalone selling price is determined using an estimate of the standalone selling price of each distinct service or product, taking into consideration historical selling price by customer for each distinct service or product. These estimates may vary from the final amounts invoiced to the customer and are adjusted upon completion of all performance obligations. Customers may be invoiced subsequent to the recognition of revenue for completed performance obligations~~, resulting~~ ~~in contract asset balances.~~

•

Revenue for arrangements which include assisting customers in completing regulatory filings for transactions, such as mergers and acquisitions or other public capital market transactions, is recognized upon completion of all obligations, including the services performed and printing of the related document, if applicable.

•

Revenue for arrangements without a regulatory filing generally have a single performance obligation. As the services and products provided are not distinct within the context of the contract, the revenue is recognized upon completion of the services performed or upon completion of printing of the related product.

•

~~Warehousing, fulfillment services and shipping and handling are each separate performance obligations. As a result, when~~ the Company provides warehousing and future fulfillment services, revenue for the composition services performed and printing of the product is recognized upon completion of the performance obligation(s), as control of the inventory has transferred to the customer and the inventory is being stored at the customer’s request.

Because substantially all of the Company’s products are customized, product returns are not significant; however, the Company accrues for the estimated amount of customer credits at the time of sale.

~~The Company records deferred revenue when amounts are invoiced but the revenue recognition criteria are not yet met. Such revenue is recognized when all criteria are subsequently met.~~

Certain revenues earned by the Company require significant judgment to determine if revenue should be recorded gross, as a principal, or net of related costs, as an agent. Billings for shipping and handling costs as well as certain postage costs, and out-of-pocket expenses are recorded gross. Revenue is not recognized for customer-supplied postage. The Company’s printing operations process paper that may be supplied directly by customers or may be purchased by the Company from third parties and sold to customers. Revenue is not recognized for customer-supplied paper, however, revenues for Company-supplied paper are recognized on a gross basis. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to authorities. The Company expenses the costs to obtain the contract, primarily commissions, as incurred.

~~Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)~~

~~Notes to the Unaudited Condensed Consolidated Financial Statements (continued)~~

~~(in millions, except per share data, unless otherwise indicated)~~

Disaggregation of ~~revenue~~Revenue

The following table disaggregates revenue between tech-enabled services, software solutions and print and distribution by reportable segment:


	Three Months Ended June 30,
	2021								2020
	Tech-enabled Services		Software Solutions		Print and Distribution		Total		Tech-enabled Services		Software Solutions		Print and Distribution		Total
Capital Markets - Software Solutions	$	0	$	43.8	$	0	$	43.8	$	0	$	31.8	$	0	$	31.8
Capital Markets - Compliance and Communications Management		113.8		0		39.3		153.1		87.9		0		32.9		120.8
Investment Companies - Software Solutions		0		22.8		0		22.8		0		15.8		0		15.8
Investment Companies - Compliance and Communications Management		20.2		0		27.6		47.8		27.5		0		58.1		85.6
Total net sales	$	134.0	$	66.6	$	66.9	$	267.5	$	115.4	$	47.6	$	91.0	$	254.0


	Six Months Ended June 30,
	2021								2020
	Tech-enabled Services		Software Solutions		Print and Distribution		Total		Tech-enabled Services		Software Solutions		Print and Distribution		Total
Capital Markets - Software Solutions	$	0	$	82.3	$	0	$	82.3	$	0	$	63.0	$	0	$	63.0
Capital Markets - Compliance and Communications Management		209.8		0		81.8		291.6		145.8		0		74.1		219.9
Investment Companies - Software Solutions		0		44.6		0		44.6		0		31.9		0		31.9
Investment Companies - Compliance and Communications Management		42.7		0		51.6		94.3		51.5		0		108.4		159.9
Total net sales	$	252.5	$	126.9	$	133.4	$	512.8	$	197.3	$	94.9	$	182.5	$	474.7

Three Months Ended June 30,

2020

2019

Tech-enabled Services

Software Solutions

Print and Distribution

Total

Tech-enabled Services

Software Solutions

Print and Distribution

Total

Capital Markets - Software Solutions
$
—

$
31.8

$
—

$
31.8

$
—

$
32.2

$
—

$
32.2

Capital Markets - Compliance and Communications Management

87.9

—

32.9

120.8

81.8

—

45.4

127.2

Investment Companies - Software Solutions

—

15.8

—

15.8

—

15.6

—

15.6

Investment Companies - Compliance and Communications Management

27.5

—

58.1

85.6

31.6

—

52.3

83.9

Total net sales
$
115.4

$
47.6

$
91.0

$
254.0

$
113.4

$
47.8

$
97.7

$
258.9

Six Months Ended June 30,

2020

2019

Tech-enabled Services

Software Solutions

Print and Distribution

Total

Tech-enabled Services

Software Solutions

Print and Distribution

Total

Capital Markets - Software Solutions
$
—

$
63.0

$
—

$
63.0

$
—

$
62.7

$
—

$
62.7

Capital Markets - Compliance and Communications Management

145.8

—

74.1

219.9

141.3

—

87.9

229.2

Investment Companies - Software Solutions

—

31.9

—

31.9

—

29.8

—

29.8

Investment Companies - Compliance and Communications Management

51.5

—

108.4

159.9

55.3

—

111.5

166.8

Total net sales
$
197.3

$
94.9

$
182.5

$
474.7

$
196.6

$
92.5

$
199.4

$
488.5

Unbilled Receivables and Contract Balances

The timing of revenue recognition may differ from the timing of invoicing customers and these timing differences result in unbilled receivables, contract assets or contract liabilities. Contract assets represent revenue recognized for performance obligations completed before an unconditional right to payment exists, and therefore invoicing has not yet occurred. The Company generally estimates contract assets based on historical selling price adjusted for its current experience and expected resolution of the variable consideration of the completed performance obligation. When the Company’s contracts contain variable consideration, the variable consideration is recognized only to the extent that it is probable that a significant revenue reversal will not occur in a future period. As a result, estimated revenue and contract assets may be constrained until the uncertainty associated with the variable consideration is resolved, which generally occurs in less than one year. Contract assets were $31.0 million and $18.5 million at June 30, 2021 and December 31, 2020, respectively. Generally, the contract assets balance is impacted by the recognition of additional revenue, amounts invoiced to customers and changes in the level of the constraint applied to variable consideration. Unbilled receivables are recorded when there is an unconditional right to payment and invoicing has not yet occurred. The Company estimates the value of unbilled receivables based on a combination of historical customer selling price and management’s assessment of realizable selling price. Unbilled receivables were ~~$73.3~~$92.9 million and $39.1 million at June 30, ~~2020~~2021 and ~~$33.5 million at~~ December 31, ~~2019. Contract assets were $10.4 million at June 30,~~ 2020, ~~and $8.9 million at December 31, 2019,~~ respectively. Generally, the contract assets balance is impacted by the recognition of additional contract assets, offset by amounts invoiced to customers. For the six months ended June 30, 2020, final amounts invoiced to customers exceeded estimates of standalone selling price as of December 31, 2019 for the related arrangements by approximately $0.1 million. Unbilled receivables and contract assets are included in accounts receivable on the Unaudited Condensed Consolidated Balance Sheets.

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

For the six months ended June 30, 2021, amounts recognized as revenue exceeded the estimates for performance obligations satisfied as of December 31, 2020 by approximately $22.0 million, primarily due to changes in the Company’s estimate of variable consideration and the application of the constraint.

Substantially all of the Company’s contracts with significant remaining performance obligations have an initial expected duration of one year or less.

Contract liabilities consist of deferred revenue and progress billings which are included in accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets. Changes in contract liabilities ~~for the six months ended June 30, 2020 and 2019, respectively,~~ were as follows:


Balance at January 1, 2021	$	21.7
Deferral of revenue		59.4
Revenue recognized		(48.7	)
Balance at June 30, 2021	$	32.4


Balance at January 1, 2020	$	13.1
Deferral of revenue		22.9
Revenue recognized		(21.0	)
Balance at June 30, 2020	$	15.0

~~Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)~~

~~Notes to the Unaudited Condensed Consolidated Financial Statements (continued)~~

~~(in millions, except per share data, unless otherwise indicated)~~

Balance at January 1, 2019
$
12.0

Deferral of revenue

25.1

Revenue recognized

(25.2
)
Balance at June 30, 2019
$
11.9

Note 3. Goodwill and Other Intangible Assets

~~As discussed in~~ ~~Note 1, Overview, Basis of Presentation and Significant Accounting Policies, during the first quarter of 2020, management realigned the Company’s operating segments. DFIN’s~~ 4 operating segments are the same as its reporting units: CM-SS; CM-CCM; IC-SS; IC-CCM (“Current Structure”). The Company previously had 3 reporting units: Capital Markets, Investment Markets and International (“Previous Structure”), that each had goodwill.

As a result of the new segmentation, a goodwill impairment analysis was completed for the Previous Structure during the first quarter of 2020, before the reallocation of goodwill to the Current Structure. Each of the reporting units under the Previous Structure was reviewed for impairment using a quantitative assessment, where the estimated fair value of each reporting unit was compared to its carrying amount, including goodwill. The Company did not recognize any goodwill impairment as the estimated fair values of all reporting units exceeded their respective carrying amounts. In addition to the impairment analysis under the Previous Structure, a goodwill impairment analysis was completed under the Current Structure during the first quarter of 2020 and 0 goodwill impairment was recognized as the estimated fair values of all reporting units exceeded their respective carrying amounts. ~~Goodwill was reassigned to the Current Structure using a relative fair value approach.~~

The balances of goodwill by ~~segment~~reporting unit are presented below:


	Gross book value at December 31, 2020		Accumulated impairment charges at December 31, 2020			Net book value at December 31, 2020		Foreign exchange and other adjustments		Net book value at June 30, 2021
Capital Markets - Software Solutions	$	103.7	$	0		$	103.7	$	0	$	103.7
Capital Markets - Compliance and Communications Management		253.0		0			253.0		0.2		253.2
Investment Companies - Software Solutions		53.2		0			53.2		0		53.2
Investment Companies - Compliance and Communications Management		40.6		(40.6	)		0		0		0
Total	$	450.5	$	(40.6	)	$	409.9	$	0.2	$	410.1

Net book value at March 31, 2020

Foreign exchange and other adjustments

Net book value at June 30, 2020

Capital Markets - Software Solutions
$
103.6

$
—

$
103.6

Capital Markets - Compliance and Communication
Management

252.5

—

252.5

Investment Companies - Software Solutions

53.0

0.2

53.2

Investment Companies - Compliance and Communication
Management

40.6

—

40.6

Total
$
449.7

$
0.2

$
449.9

The components of other intangible assets at June 30, ~~2020~~2021 and December 31, ~~2019~~2020 were as follows:

	June 30, 2020										December 31, 2019
	Gross Carrying Amount		Accumulated Impairment Charges			Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Impairment Charges			Accumulated Amortization			Net Book Value		June 30, 2021							December 31, 2020
Customer relationships (useful life of 10-15 years)	$	149.0	$	(1.0	)	$	(133.6	)	$	14.4	$	149.8	$	(1.0	)	$	(127.7	)	$	21.1
Trade names (useful life of 5 years)		3.9		—			(3.2	)		0.7		3.9		—			(3.1	)		0.8
Software license (useful life of 3 years)		0.3		—			—			0.3		—		—			—			—
																					Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value
Customer relationships (useful life of 15 years)																					$	10.4	$	(1.7	)	$	8.7	$	10.4	$	(1.4	)	$	9.0
Trade names (useful life of 5 years)																						1.0		(0.5	)		0.5		1.0		(0.4	)		0.6
Software license (useful life of 3 years)																						0.3		(0.2	)		0.1		0.3		(0.1	)		0.2
Total other intangible assets	$	153.2	$	(1.0	)	$	(136.8	)	$	15.4	$	153.7	$	(1.0	)	$	(130.8	)	$	21.9	$	11.7	$	(2.4	)	$	9.3	$	11.7	$	(1.9	)	$	9.8

Amortization expense for other intangible assets was ~~$3.3~~$0.3 million and ~~$3.6~~$3.3 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$6.7~~$0.5 million and ~~$7.3~~$6.7 million for the six months ended June 30, 2021 and 2020, ~~and 2019.~~respectively. The weighted-average remaining useful life of the unamortized intangible assets as of June 30, ~~2020~~2021 is approximately ~~nine years.~~ twelve years.

1514

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

The following table outlines the estimated annual amortization expense related to other intangible assets:


For the year ending December 31,	Amount
2021 (excluding the six months ended June 30, 2021)	$	0.5
2022		1.0
2023		0.9
2024		0.7
2025		0.7
2026 and thereafter		5.5
Total	$	9.3

The Company has operating leases for certain service centers, office space, warehouses and equipment. The Company ~~paid $6.1~~made payments of $5.7 million and ~~$7.1~~$6.1 million ~~related to its operating lease liabilities~~ for ~~the~~ three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$12.9~~$12.0 million and ~~$13.7~~$12.9 million for the six months ended June 30, 2021 and 2020, respectively, related to its operating lease liabilities.

The Company has finance leases, primarily related to certain IT equipment. Finance lease right-of-use ("ROU") assets and ~~2019, respectively.~~ finance lease liabilities are recognized based on the present value of the minimum lease payments over the lease term at commencement date. As the finance leases were effective on June 30, 2021, 0 expense was recognized in the Company's Unaudited Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2021 and 2020.

The components of lease expense for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Operating lease expense	$	7.2		$	6.4		$	13.9		$	13.2		$	4.8		$	7.2		$	9.7		$	13.9
Sublease income		(0.9	)		(1.7	)		(2.2	)		(2.5	)		(1.1	)		(0.9	)		(2.2	)		(2.2	)
Net lease expense	$	6.3		$	4.7		$	11.7		$	10.7		$	3.7		$	6.3		$	7.5		$	11.7

~~The~~The Company’s ~~lease liabilities~~finance leases are presented within the Company’s Unaudited Condensed Consolidated Balance Sheets as follows:


	June 30, 2021
Property, plant and equipment, net	$	7.8

Accrued liabilities	$	1.5
Other noncurrent liabilities		6.3
Total	$	7.8

Other information related to finance leases as of and for the six months ended June 30, 2021 were as follows:


	June 30, 2021
Non-cash disclosure
Increase in finance lease liabilities due to new ROU assets	$	7.8
Weighted-average remaining lease term	5.0 years
Weighted-average discount rate		2.25	%

~~As further disclosed in Note 5,~~ ~~Restructuring, Impairment and Other Charges,~~ ~~during the second quarter of 2020, the Company recorded impairment charges of $12.1 million on operating lease right-of-use (“ROU”) assets in certain locations.~~

The Company records restructuring charges associated with management-approved restructuring plans, which could include the elimination of job functions, closure or relocation of facilities, reorganization of operations, changes in management structure, workforce reductions or other actions. Restructuring charges may include ongoing and enhanced termination benefits related to employee separations, contract termination costs, impairment of certain assets and other related costs associated with exit or disposal activities. Severance benefits are provided to employees primarily under the Company’s ongoing benefit arrangements. These severance costs are accrued once management commits to a plan of termination and it becomes probable that employees will be separated and entitled to benefits at amounts that can be reasonably estimated. In some instances, the Company enhances its ongoing termination benefits with one-time termination benefits and employee severance costs to be incurred in relation to these restructuring activities are recognized when employees are notified of their enhanced termination benefits.

~~Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)~~

~~Notes to the Unaudited Condensed Consolidated Financial Statements (continued)~~

~~(in millions, except per share data, unless otherwise indicated)~~

For the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, the Company recorded the following net restructuring and other charges by segment:


Three Months Ended June 30, 2021	Employee Terminations		Other Charges		Total
Capital Markets - Software Solutions	$	0.1	$	0	$	0.1
Capital Markets - Compliance and Communications Management		0.5		0.1		0.6
Investment Companies - Software Solutions		0.1		0		0.1
Investment Companies - Compliance and Communications Management		1.9		0		1.9
Corporate		0.1		0		0.1
Total	$	2.7	$	0.1	$	2.8


Three Months Ended June 30, 2020	Employee Terminations		Impairment Charges		Other Charges		Total		Employee Terminations		Impairment Charges		Other Charges		Total
Capital Markets - Software Solutions	$	0.5	$	—	$	—	$	0.5	$	0.5	$	0	$	0	$	0.5
Capital Markets - Compliance and Communication Management		4.7		12.1		0.1		16.9
Capital Markets - Compliance and Communications Management										4.7		12.1		0.1		16.9
Investment Companies - Software Solutions		0.1		—		—		0.1		0.1		0		0		0.1
Investment Companies - Compliance and Communication Management		4.8		—		—		4.8
Investment Companies - Compliance and Communications Management										4.8		0		0		4.8
Corporate		2.2		—		0.6		2.8		2.2		0		0.6		2.8
Total	$	12.3	$	12.1	$	0.7	$	25.1	$	12.3	$	12.1	$	0.7	$	25.1

Three Months Ended June 30, 2019

Total

Capital Markets - Software Solutions

$
0.7

Capital Markets - Compliance and Communication Management

2.5

Investment Companies - Software Solutions

—

Investment Companies - Compliance and Communication Management

0.5

Corporate

0.1

Total

$
3.8

For the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, the Company recorded the following net restructuring and other charges by segment:

Six Months Ended June 30, 2020	Employee Terminations		Impairment Charges		Other Charges		Total

Six Months Ended June 30, 2021									Employee Terminations		Other Restructuring Charges		Other Charges		Total
Capital Markets - Software Solutions	$	0.8	$	—	$	—	$	0.8	$	0.1	$	0	$	0	$	0.1
Capital Markets - Compliance and Communication Management		5.1		12.1		0.2		17.4
Capital Markets - Compliance and Communications Management										0.5		0		0.1		0.6
Investment Companies - Software Solutions		0.4		—		—		0.4		0.1		0		0		0.1
Investment Companies - Compliance and Communication Management		5.2		—		—		5.2
Investment Companies - Compliance and Communications Management										2.0		0.6		0		2.6
Corporate		2.4		—		2.0		4.4		0.2		0		0		0.2
Total	$	13.9	$	12.1	$	2.2	$	28.2	$	2.9	$	0.6	$	0.1	$	3.6

Six Months Ended June 30, 2019

Employee Terminations

Other Charges

Total

Capital Markets - Software Solutions

$
1.0

$
—

$
1.0

Capital Markets - Compliance and Communication Management

3.3

0.1

3.4

Investment Companies - Software Solutions

0.1

—

0.1

Investment Companies - Compliance and Communication Management

0.9

—

0.9

Corporate

0.5

—

0.5

Total

$
5.8

$
0.1

$
5.9

1716

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)


Six Months Ended June 30, 2020	Employee Terminations		Impairment Charges		Other Charges		Total
Capital Markets - Software Solutions	$	0.8	$	0	$	0	$	0.8
Capital Markets - Compliance and Communications Management		5.1		12.1		0.2		17.4
Investment Companies - Software Solutions		0.4		0		0		0.4
Investment Companies - Compliance and Communications Management		5.2		0		0		5.2
Corporate		2.4		0		2.0		4.4
Total	$	13.9	$	12.1	$	2.2	$	28.2

For the three and six months ended June 30, 2021, the Company recorded net restructuring charges of $2.7 million and $2.9 million, respectively, for employee termination costs for approximately 170 employees for both the three and six months ended June 30, 2021, substantially all of whom will be terminated by December 31, 2021. The restructuring actions were primarily the result of the implementation of SEC Rule 30e-3 and amendments to SEC Rule 498A.

For the three and six months ended June 30, 2020, the Company recorded net restructuring charges of ~~$12.3~~$12.3 million and ~~$13.9~~$13.9 million, respectively, for employee termination costs for approximately 460 and 510 employees, ~~respectively.~~respectively, substantially all of whom were terminated as of December 31, 2020. The restructuring actions were primarily the result of the ~~upcoming~~ implementation of SEC Rule 30e-3 and amendments to SEC Rule 498A ~~both of which will significantly reduce print volumes beginning January 1, 2021,~~ and the reorganization of certain capital markets operations as well as selling and administrative functions. ~~Although some employees were terminated as of June 30, 2020, the majority of employees will continue to provide services at least through December 31, 2020.~~

For the three and six months ended June 30, 2019, the Company recorded net restructuring charges of $3.8 million and $5.8 million for employee termination costs for approximately 95 and 165 employees, respectively, substantially all of whom were terminated as of June 30, 2019. These charges primarily related to the reorganization of certain operations.

The Company abandoned certain operating leases during the second quarter of 2020 with the intent to sublease. As the fair value of the ROU assets was less than the carrying value, the Company recognized impairments of ROU assets of ~~$12.1~~$12.1 million for both the three and six months ended June 30, 2020, reducing the carrying value of the ROU assets to an estimated combined fair value of ~~$2.4~~$2.4 million. The Company recognized further impairments related to these ROU assets of $2.1 million in the fourth quarter of 2020. The fair value of these assets was estimated utilizing inputs from market comparables in order to estimate future cash flows expected from sublease income over the remaining lease terms. Future changes in the estimated amount or timing of sublease arrangements could result in further impairment charges.

For the three and six months ended June 30, 2020, the Company also incurred ~~$0.7~~$0.7 million and ~~$2.2~~$2.2 million, respectively, of other charges, primarily related to the realignment of the Company’s operating ~~segments, as further described in~~ ~~Note 12, Segment Information~~segments.

The Company’s employee terminations liability is included in accrued liabilities in the Company’s Unaudited Condensed Consolidated Balance Sheets. Changes in the accrual for employee terminations during the six months ended June 30, ~~2020,~~2021, were as follows:


	December 31, 2020		Restructuring Charges		Reversals			Cash Paid			June 30, 2021
Employee terminations	$	8.5	$	3.0	$	(0.1	)	$	(5.7	)	$	5.7

December 31, 2019

Restructuring Charges

Reversals

Cash Paid

June 30, 2020

Employee terminations
$
1.9

$
14.0

$
(0.1
)

$
(3.5
)

$
12.3

The components of the estimated net ~~pension plan~~periodic benefit income for the Company’s pension plans for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Interest cost	$	2.2		$	2.7		$	4.4		$	5.5		$	1.5		$	2.2		$	3.1		$	4.4
Expected return on assets		(3.5	)		(3.7	)		(7.0	)		(7.4	)		(3.6	)		(3.5	)		(7.1	)		(7.0	)
Amortization, net		0.8			0.5			1.6			0.9			1.0			0.8			1.9			1.6
Net pension income	$	(0.5	)	$	(0.5	)	$	(1.0	)	$	(1.0	)	$	(1.1	)	$	(0.5	)	$	(2.1	)	$	(1.0	)

Note 7. Commitments and Contingencies

Litigation

From time to time, the Company’s customers and others file voluntary petitions for reorganization under United States bankruptcy laws. In such cases, certain pre-petition payments received by the Company from these parties could be considered preference items and subject to return. In addition, the Company may be party to certain litigation arising in the ordinary course of business. Management believes that the final resolution of these preference items and litigation will not have a material effect on the Company’s consolidated results of operations, financial position or cash flows.

Multiemployer Pension Plans Obligation

On April 13, 2020, LSC Communications, Inc. (“LSC”) announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code (“LSC Chapter 11 Filing”). LSC and the Company separated from R. R. Donnelley & Sons Company (“RRD”) in a tax-free distribution to shareholders effective October 1, 2016 (the “Separation”). In the second quarter of 2020, the Company became aware that, subsequent to the LSC Chapter 11 Filing, LSC failed to make certain required monthly and quarterly withdrawal liability payments to multiemployer pension plans from which RRD had withdrawn prior to the Separation. Responsibility for ~~the~~certain pre-Separation withdrawal liability obligations, resulting in such monthly and quarterly payment obligations (the ~~“MEPP~~“LSC MEPP Liabilities”), had been assigned to LSC pursuant to the September 14, 2016 Separation and Distribution Agreement among the Company, RRD and LSC (the “Separation Agreement”), however, the Company and RRD remained jointly and severally liable for the LSC MEPP Liabilities pursuant to laws and regulations governing multiemployer pension plans. The Company believes the total undiscounted LSC MEPP Liabilities for which LSC iswas responsible ~~are~~at the time of the LSC Chapter 11 Filing were approximately ~~$103~~$103 million (or approximately ~~$57~~$57 million on a discounted basis, assuming a blended discount rate of approximately ~~10%~~10%) and ~~are~~were payable over approximately a 15-year period (through 2034), with annual payments ranging from ~~$1.6~~$1.6 million to ~~$8.5 million.~~ $8.5 million at the time.

On July 24, 2020, the Company and RRD signed an agreement agreeing to submit to mediation and, if required, arbitration to determine the final liability allocation between the Company and RRD with respect to the LSC MEPP Liabilities. DFIN and RRD also agreed to share all required monthly and quarterly withdrawal liability payment obligations that become due during the mediation/arbitration period, with an adjustment and repayment to be made for any such payments according to the final allocation. The Company and RRD were unable to agree upon the final liability allocation in mediation and on March 22, 2021 submitted the matter to arbitration pursuant to the terms of the Separation Agreement, which is expected to take place in the second half of 2021.

The Company is required to record a liability when it is probable that a loss has been incurred and the amount can be reasonably estimated. ~~As of June 30,~~In 2020, the Company recorded a ~~contingent liability~~charge of ~~$10.2~~$19.0 million and had $15.2 million accrued as of December 31, 2020 for its ~~potential~~estimated payments ~~in respect of~~related to the LSC MEPP Liabilities, ~~representing~~including the Company’s low end of the range of potential ~~outcomes.~~outcomes as well as the Company’s estimated shared payments until a final allocation is determined.

In March 2021 and April 2021, the Company and RRD reached settlements with two of the LSC multiemployer pension plan funds, which represented approximately $59 million of the estimated $103 million total undiscounted LSC MEPP Liabilities at the time of the LSC Chapter 11 filing. The Company and RRD each made lump sum payments in the second quarter of 2021 to settle all obligations related to these funds. An adjustment and repayment will be made, as needed, based on the final allocation of the LSC MEPP Liabilities between the Company and RRD.

As of June 30, 2021, the Company had $5.9 million accrued related to the remaining contingent liability and the Company’s estimated share of required payments until a final allocation is determined. The Company is not able to reasonably estimate the maximum potential loss due to the uncertainty related to the outcome of the final allocation of the LSC MEPP Liabilities between the Company and RRD. ~~The Company also recorded an additional $2.1 million for the Company’s estimated share of obligations until a final allocation is determined.~~ The expense associated with this liability has been recorded in selling, general and administrative expense ("SG&A&A") expense within the Corporate segment in the Company’s Unaudited Condensed Consolidated Statements of ~~Operations for~~Operations.

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the ~~three and six months ended June 30, 2020.~~Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

There can be no assurance that the Company’s actual future liabilities relating to the LSC MEPP Liabilities will not differ materially from the contingency amount recorded ~~during~~in the ~~second quarter of 2020.~~Company’s Unaudited Condensed Consolidated Financial Statements. The Company’s outstanding LSC MEPP Liabilities could also be affected by the financial stability of other employers participating in such plans and decisions by those employers to withdraw from such plans in the ~~future.~~future, including the financial stability of RRD.

Non-income Taxes

~~Donnelley Financial Solutions, Inc.~~The Company does not collect sales, use or similar taxes on all amounts invoiced in all jurisdictions in which the Company has sales based on its understanding that certain transactions are not subject to tax. Sales, use and ~~Subsidiaries (“DFIN”)~~

~~Notes~~similar tax laws vary greatly by jurisdiction and may require judgment to determine the applicability to the Company’s transactions. In 2020, the Company identified certain jurisdictions where the Company has not historically collected or remitted sales tax on certain services and that the Company believes it is probable that the jurisdiction would assess sales tax. As of June 30, 2021 and December 31, 2020, the Company accrued a contingent liability of $4.1 million and $5.2 million, respectively, for certain estimated sales tax exposures. The income statement impact associated with this liability is recorded in SG&A expense in the Company’s Unaudited Condensed Consolidated ~~Financial~~ Statements ~~(continued)~~

(of Operations. Although management believes its estimates are reasonable, the resolution of the Company’s tax matters could result in ~~millions, except per share data, unless otherwise indicated)~~tax liabilities that are higher or lower than what has been estimated by the Company.

Note 8. Debt

The Company’s debt as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 consisted of the following:

	June 30, 2020			December 31, 2019
8.25% senior notes due October 15, 2024	$	233.5		$	300.0
							June 30, 2021			December 31, 2020
8.25% senior notes due October 15, 2024							$	233.0		$	233.0
Borrowings under the Revolving Facility		120.0			—			10.0			0
Unamortized debt issuance costs		(2.8	)		(4.0	)		(2.1	)		(2.5	)
Total debt	$	350.7		$	296.0
Less: current portion (a)		0.5			—
Total long-term debt	$	350.2		$	296.0		$	240.9		$	230.5

~~(a)~~

Maturities

~~On July 2, 2020, the Company purchased and retired $0.5 million (notional amount) of the Notes at an average price of 98.75.~~

~~Maturities~~—At June 30, ~~2020,~~2021, the Company’s long-term debt was comprised of the ~~8.25%~~8.25% senior unsecured notes due October 15, 2024 (“Notes”) and borrowings under the Revolving Facility, as defined below.

Fair Value—The fair value of the Notes, which was determined using the market approach based upon interest rates available to the Company for borrowings with similar terms and maturities, was determined to be Level 2 under the fair value hierarchy. The fair value of the Company’s Notes was ~~$230.3~~$242.2 million and ~~$308.4~~$247.5 million atas of June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The fair value of the Company’s borrowings under the Revolving Facility (as defined below) is classified as Level 2 under the fair value hierarchy and approximates its carrying value as of June 30, 2021, as the Revolving Facility carries a variable rate of interest reflecting current market rates.

~~8.25%~~8.25% Senior Notes Due 2024—In the first quarter of 2020, the Company purchased and retired ~~$66.5~~$66.5 million (notional amount) of the Notes at an average price of 95.25 and recognized a pre-tax gain on the extinguishment of debt of ~~$2.3~~$2.3 million, which was net of unamortized debt issuance costs, and is recorded within interest expense, net in the Unaudited Condensed Consolidated Statements of Operations. The Company may redeem the Notes, in whole or in part, on or after October 15, 2021, but prior to October 14, 2022 at the redemption price of 102.063%, and at the redemption price of 100.000% beginning on October 15, 2022 and thereafter, in each case, plus accrued and unpaid interest, if any.

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

The Company’s Notes, with interest payable semi-annually on April 15 and October 15, were issued pursuant to an indenture where certain wholly-owned domestic subsidiaries of the Company guarantee the Notes (the “Guarantors”). The Notes are jointly and severally guaranteed, on an unsecured basis, by the Guarantors, which are comprised of each of the Company’s existing and future direct and indirect wholly-owned U.S. subsidiaries that guarantee the Company’s obligations under the Credit Facilities. The Notes are not guaranteed by the Company’s foreign subsidiaries or unrestricted subsidiaries. The Notes and the related guarantees will be the Company and the Guarantors’, respective, senior unsecured obligations and rank equally in right of payment to all present and future senior debt, including the obligations under the Company’s Credit Facilities, senior in right of payment to all present and future subordinated debt, and effectively subordinated in right of payment to any of the Company and the Guarantors’ secured debt, to the extent of the value of the assets securing such debt. The indenture governing the Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and (9) designations of unrestricted subsidiaries. Each of these covenants is subject to important exceptions and qualifications.

Credit Agreement—On May 27, 2021, the Company amended and restated its credit agreement dated as of September 30, 2016 (as in effect prior to such amendment and restatement, the ~~Company entered into a~~“Credit Agreement,” and the Credit Agreement, as so amended (“and restated, the “Amended and Restated Credit Agreement”), by and among the Company, the lenders party thereto from time to time and ~~JP Morgan~~JPMorgan Chase Bank, N.A., as administrative ~~agent. The Credit Agreement provides~~agent and collateral agent, to, among other things, provide for a $~~350.0~~200 million ~~senior secured~~delayed-draw term loan BA facility (the ~~“Term~~“Delayed-Draw Term Loan ~~Credit~~A Facility”) ~~and a~~, extend the maturity of the $~~300.0~~300 million ~~senior secured~~ revolving ~~credit~~ facility (the ~~“Revolving Facility”,~~"Revolving Facility") to May 27, 2026 and ~~together with~~modify the financial maintenance and negative covenants in the Credit Agreement. The proceeds of the Delayed-Draw Term Loan ~~Credit~~A Facility may only be used to redeem or repurchase the ~~“Credit Facilities”)~~Company’s 8.25% Senior Notes due 2024 which become redeemable, in whole or in part, on or after October 15, 2021 at the redemption price of 102.063%, plus accrued and unpaid interest, if any. The commitments under the Delayed-Draw Term Loan A Facility will expire on November 1, 2021. The principal amount of loans under the Delayed-Draw Term Loan A Facility will be due and payable in equal quarterly installments of 1.25% of the original principal amount of the loans during the first three years after funding of the loans, and 2.50% of the original principal amount of the loans thereafter. The entire unpaid principal amount of the loans will be due and payable in full on May 27, 2026.

The Amended and Restated Credit Agreement contains a number of covenants, including a minimum Interest Coverage Ratio and ~~a maximum~~the Consolidated Net Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $20.0 million in the aggregate. ~~As of December 31, 2019, the Company paid off its Term Loan Credit Facility.~~

~~Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)~~

~~Notes to the Unaudited Condensed Consolidated Financial Statements (continued)~~

~~(in millions, except per share data, unless otherwise indicated)~~

Revolving Credit Facility—~~On December 18, 2018, the Company entered into a second amendment to the Credit Agreement which extended the maturity date of the Revolving Facility to December 18, 2023.~~ As of June 30, ~~2020,~~2021, there was $~~$120.0~~10.0 million of borrowings outstanding under the Revolving Facility. The weighted average interest rate on borrowings under the Revolving Facility was ~~2.7%~~2.6% and ~~5.0%~~2.7% for the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

The following table summarizes interest expense, net included in the Unaudited Condensed Consolidated Statements of ~~Operations~~Operations::


	Three Months Ended June 30,					Six Months Ended June 30,
	2021			2020		2021			2020
Interest incurred	$	6.1		$	6.3	$	11.5		$	13.2
Less: Gain on debt extinguishment and other interest income		(0.2	)		0		(0.3	)		(2.3	)
Interest expense, net	$	5.9		$	6.3	$	11.2		$	10.9

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

Interest incurred
$
6.3

$
9.1

$
13.2

$
18.0

Less: Gain on debt extinguishment

—

—

(2.3
)

—

Interest expense, net
$
6.3

$
9.1

$
10.9

$
18.0

Basic earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average number of common shares outstanding for the period. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of all potentially dilutive share-based awards, including stock options, restricted stock units, performance share units and restricted stock.

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive share-based awards for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:


	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020
Net earnings (loss) per share:
Basic	$	1.27	$	(0.04	)	$	2.32	$	0.08
Diluted	$	1.24	$	(0.04	)	$	2.26	$	0.08
Numerator:
Net earnings (loss)	$	42.9	$	(1.3	)	$	78.1	$	2.8
Denominator:
Weighted average number of common shares outstanding		33.7		34.0			33.6		34.1
Dilutive awards		0.8		0			0.9		0
Diluted weighted average number of common shares outstanding		34.5		34.0			34.5		34.1
Weighted average number of anti-dilutive share-based awards:
Restricted stock units		0		1.3			0.3		1.1
Stock options		0		0.7			0		0.8
Total		0		2.0			0.3		1.9

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

Net (loss) earnings per share:

Basic
$
(0.04
)

$
0.51

$
0.08

$
0.47

Diluted
$
(0.04
)

$
0.51

$
0.08

$
0.47

Numerator:

Net (loss) earnings
$
(1.3
)

$
17.3

$
2.8

$
15.9

Denominator:

Weighted average number of common shares outstanding

34.0

34.1

34.1

34.0

Dilutive awards

—

0.1

—

0.1

Diluted weighted average number of common shares outstanding

34.0

34.2

34.1

34.1

Weighted average number of anti-dilutive share-based awards:

Restricted stock units

1.3

0.3

1.1

0.4

Stock options

0.7

0.8

0.8

0.8

Total

2.0

1.1

1.9

1.2

The Company has 65 million shares of ~~$0.01~~$0.01 par value common stock authorized for issuance. DFIN’s common stock is currently traded under the ticker symbol “DFIN” on the New York Stock Exchange.

The Company has 1 million shares of ~~$0.01~~$0.01 par value preferred stock authorized for issuance. The Board may divide the preferred stock into one or more series and fix the redemption, dividend, voting, conversion, sinking fund, liquidation and other rights. The Company has no present plans to issue any preferred stock.

~~Notes to the Unaudited Condensed Consolidated Financial Statements (continued)~~

Common Stock ~~Repurchase~~Repurchases—On February 4, 2020, the Board authorized a stock repurchase program, under which the Company is authorized to repurchase up to ~~$25.0~~$25.0 million of its outstanding common stock from time to time in one or more transactions on the open market or in privately negotiated purchases in accordance with all applicable securities laws. During 2020, the Company repurchased 1,149,489 shares in open market transactions for $10.3 million at an average price of $8.92 per share. As of December 31, 2020, the remaining authorized amount under the authorization was $14.7 million.

On February 18, 2021, the Board authorized an increase to its stock repurchase program to bring the total remaining available repurchase authorization for shares on or after February 18, 2021 to $50.0 million and extended the expiration date of the repurchase program through December 31, 2022. The stock repurchase program may be suspended or discontinued at any time. The timing and amount of any shares repurchased are determined by the Company based on its evaluation of market conditions and other factors and may be completed from time to time in one or more transactions on the open market or in privately negotiated purchases in accordance with all applicable securities laws and regulations and all repurchases in the open market will be made in compliance with Rule 10b-18 under the Securities Exchange ~~Act. The timing and amount~~Act of ~~any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors.~~1934, as amended (the “Exchange Act”). Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing ~~so under insider trading laws. The stock repurchase program will be effective through December 31, 2021, however, it may be suspended or discontinued at any time.~~so.

During the first quarter of ~~2020,~~2021, the Company repurchased ~~615,896~~126,682 shares in open market transactions for ~~$3.8~~$3.4 million at an average price of ~~$6.19~~$26.92 per share. During the second quarter of ~~2020,~~2021, the Company ~~did 0t repurchase any shares.~~repurchased 250,567 shares in open market transactions for $7.1 million at an average price of $28.19 per share. As of June 30, ~~2020,~~2021, the remaining authorized amount under the ~~current~~ authorization was ~~approximately $21.2~~$39.6 million.

Note 11. Comprehensive Income

The components of other comprehensive income (loss) and income tax expense allocated to each component for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:


	Three Months Ended June 30, 2021								Six Months Ended June 30, 2021
	Before Tax			Income Tax		Net of Tax			Before Tax		Income Tax		Net of Tax
Translation adjustments	$	(0.3	)	$	0.1	$	(0.4	)	$	0.7	$	0.2	$	0.5
Adjustment for net periodic pension plan and other postretirement benefits plan		1.0			0.2		0.8			1.9		0.5		1.4
Other comprehensive income	$	0.7		$	0.3	$	0.4		$	2.6	$	0.7	$	1.9


	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	Before Tax		Income Tax		Net of Tax		Before Tax			Income Tax		Net of Tax
Translation adjustments	$	1.1	$	0	$	1.1	$	(1.7	)	$	0	$	(1.7	)
Adjustment for net periodic pension plan and other postretirement benefits plan		0.8		0.3		0.5		1.6			0.5		1.1
Other comprehensive income (loss)	$	1.9	$	0.3	$	1.6	$	(0.1	)	$	0.5	$	(0.6	)

Three Months Ended June 30, 2020

Six Months Ended June 30, 2020

Before Tax Amount

Income Tax Expense

Net of Tax Amount

Before Tax Amount

Income Tax Expense

Net of Tax Amount

Translation adjustments
$ 1.1

$
—

$
1.1

$
(1.7
)

$
—

$
(1.7
)
Adjustment for net periodic pension plan and other postretirement benefits plan
0.8

0.3

0.5

1.6

0.5

1.1

Other comprehensive income (loss)
$
1.9

$
0.3

$
1.6

$
(0.1
)

$
0.5

$
(0.6
)

Three Months Ended June 30, 2019

Six Months Ended June 30, 2019

Before Tax Amount

Income Tax Expense

Net of Tax Amount

Before Tax Amount

Income Tax Expense

Net of Tax Amount

Translation adjustments
$
0.5

$
—

$
0.5

$
2.7

$
—

$
2.7

Adjustment for net periodic pension plan and other postretirement benefits plan

0.4

0.1

0.3

1.0

0.3

0.7

Other comprehensive income
$
0.9

$
0.1

$
0.8

$
3.7

$
0.3

$
3.4

~~Accumulated~~The following table summarizes changes in accumulated other comprehensive loss by component ~~as of December 31, 2019 and~~for the six months ended June 30, ~~2020 were as follows:~~2021:

	Pension and Other Postretirement Benefits Plan Cost			Translation Adjustments			Total
Balance at December 31, 2019	$	(70.9	)	$	(13.7	)	$	(84.6	)
										Pension and Other Postretirement Benefits Plan Cost			Translation Adjustments			Total
Balance at December 31, 2020										$	(67.6	)	$	(13.2	)	$	(80.8	)
Other comprehensive income before reclassifications		—			(1.7	)		(1.7	)		0			0.9			0.9
Amounts reclassified from accumulated other comprehensive loss		1.1			—			1.1			1.4			(0.4	)		1.0
Net change in accumulated other comprehensive loss		1.1			(1.7	)		(0.6	)		1.4			0.5			1.9
Balance at June 30, 2020	$	(69.8	)	$	(15.4	)	$	(85.2	)
Balance at June 30, 2021										$	(66.2	)	$	(12.7	)	$	(78.9	)

The following table summarizes changes in accumulated other comprehensive loss by component for the six months ended June 30, 2020:


	Pension and Other Postretirement Benefits Plan Cost			Translation Adjustments			Total
Balance at December 31, 2019	$	(70.9	)	$	(13.7	)	$	(84.6	)
Other comprehensive loss before reclassifications		0			(1.7	)		(1.7	)
Amounts reclassified from accumulated other comprehensive loss		1.1			0			1.1
Net change in accumulated other comprehensive loss		1.1			(1.7	)		(0.6	)
Balance at June 30, 2020	$	(69.8	)	$	(15.4	)	$	(85.2	)

~~Accumulated other comprehensive loss by component as of December 31, 2018 and June 30, 2019 were as follows:~~

Note 12. Segment Information

In the first quarter of 2020, management realigned the Company’s operating segments to reflect changes in the manner in which the chief operating decision maker assesses information for decision-making purposes. All prior year amounts related to segments have been reclassified to conform to the Company’s current reporting structure. There is no impact on the Company’s previously reported consolidated statements of operations, statements of comprehensive income, balance sheets, statements of cash flows or statements of changes in stockholders’ equity as a result of the new segmentation.

The Company operates its business through 4 operating and reportable segments: Capital Markets – Software Solutions, Capital Markets – Compliance and Communications Management, Investment Companies – Software Solutions and Investment Companies – Compliance and Communications Management. Corporate is not an operating segment and consists primarily of unallocated SG&A activities and associated expenses including, in part, executive, legal, finance and certain facility costs. In addition, certain costs and earnings of employee benefit plans, such as ~~further described below.~~pension and other postretirement benefit plan expense (income) as well as share-based compensation expense, are included in Corporate and not allocated to the operating segments.

Capital Markets

The Company provides software solutions, ~~technology-enabled~~tech-enabled services and print and distribution solutions to public and private companies for deal solutions and compliance to companies that are, or are preparing to become, subject to the filing and reporting requirements of the Securities Act of 1933, as amended (the “Securities Act”) and the Exchange Act. Capital markets’ clients leverage the Company’s software offerings, proprietary technology, deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents through the EDGAR system for their transactional and ongoing compliance needs. The Company assists its capital markets clients throughout the course of public and private business transactions; mergers and acquisitions, initial public offerings (“IPOs”), debt offerings and other similar transactions. In addition, the Company provides clients with compliance solutions to prepare their ongoing required Exchange Act filings that are compatible with the SEC’s EDGAR system, most notably Form 10-K, Form 10-Q, Form 8-K and Proxy Form DEF 14A. The Company’s operating segments associated with its capital markets services and products offerings are as follows:

Capital Markets – Software Solutions—The Company provides software solutions to public and private companies to help manage public and private transaction processes; extract data and analyze contracts; collaborate; and tag, validate and file SEC documents.

Capital Markets – Compliance & Communications Management—The Company provides ~~technology-enabled~~tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements.

Investment Companies

The Company provides software solutions, ~~technology-enabled~~tech-enabled services and print, distribution and fulfillment solutions to its investment companies clients that are subject to the filing and reporting requirements of the Investment Company Act of 1940, as amended (the “Investment Company Act”), primarily mutual fund companies, alternative investment companies, insurance companies and third-party fund administrators. The Company’s suite of solutions enables its investment company clients to comply with applicable ongoing SEC regulations, as well as to create, manage, and deliver accurate and timely financial communications to investors and regulators. The Company also provides pre- and post-enrollment information to healthcare providers. Investment company clients leverage the Company’s proprietary technology, deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents through the EDGAR system. The Company’s operating segments associated with its investment companies services and products offerings are as follows:

Investment Companies – Software Solutions—The Company provides software solutions that enable clients to store and manage compliance and regulatory information in a self-service, central repository for documents to be easily accessed, assembled, edited, translated, rendered and submitted to regulators.

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)

Investment Companies – Compliance & Communications Management—The Company provides its investment company clients ~~technology-enabled solutions~~tech-enabled services to prepare and file registration forms, as well as XBRL-formatted filings pursuant to the Investment Company Act, through the SEC’s EDGAR system. In addition, the Company provides print and distribution solutions for its clients to communicate with their investors.

~~Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)~~

~~Notes to the Unaudited Condensed Consolidated Financial Statements (continued)~~

~~(in millions, except per share data, unless otherwise indicated)~~

~~Corporate~~

Corporate consists of unallocated SG&A activities and associated expenses including, in part, executive, legal, finance, marketing, communications and certain facility costs. In addition, certain costs and earnings of employee benefit plans, such as pension and other postretirement benefit plan expense (income) and share-based compensation, are included in Corporate and are not allocated to the operating segments.

Information by Segment

The Company has disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Company’s chief operating decision maker and is most consistent with the presentation of profitability reported within the ~~condensed consolidated financial statements.~~Unaudited Condensed Consolidated Financial Statements.

	Total Net Sales		Income (Loss) from Operations			Depreciation and Amortization		Capital Expenditures
Three Months Ended June 30, 2020
										Net Sales		Income (Loss) from Operations			Depreciation and Amortization		Capital Expenditures
Three Months Ended June 30, 2021
Capital Markets - Software Solutions	$	31.8	$	1.0		$	3.6	$	3.7	$	43.8	$	9.3		$	4.1	$	4.5
Capital Markets - Compliance and Communication Management		120.8		29.3			4.0		1.4
Capital Markets - Compliance and Communications Management											153.1		64.6			1.5		0.7
Investment Companies - Software Solutions		15.8		0.4			3.2		2.7		22.8		3.5			3.2		2.7
Investment Companies - Compliance and Communication Management		85.6		2.0			2.6		1.0
Investment Companies - Compliance and Communications Management											47.8		2.1			1.2		0.8
Total operating segments		254.0		32.7			13.4		8.8		267.5		79.5			10.0		8.7
Corporate		—		(28.8	)		1.3		—		0		(17.5	)		0.1		1.0
Total operations	$	254.0	$	3.9		$	14.7	$	8.8
Total										$	267.5	$	62.0		$	10.1	$	9.7

	Total Net Sales		Income (Loss) from Operations			Depreciation and Amortization		Capital Expenditures
Three Months Ended June 30, 2019
										Net Sales		Income (Loss) from Operations			Depreciation and Amortization		Capital Expenditures
Three Months Ended June 30, 2020
Capital Markets - Software Solutions	$	32.2	$	3.4		$	3.0	$	4.1	$	31.8	$	1.0		$	3.6	$	3.7
Capital Markets - Compliance and Communication Management		127.2		38.3			3.8		2.1
Capital Markets - Compliance and Communications Management											120.8		29.3			4.0		1.4
Investment Companies - Software Solutions		15.6		(2.5	)		3.0		4.2		15.8		0.4			3.2		2.7
Investment Companies - Compliance and Communication Management		83.9		5.8			2.2		0.5
Investment Companies - Compliance and Communications Management											85.6		2.0			2.6		1.0
Total operating segments		258.9		45.0			12.0		10.9		254.0		32.7			13.4		8.8
Corporate		—		(11.6	)		—		0.2		0		(28.8	)		1.3		0
Total operations	$	258.9	$	33.4		$	12.0	$	11.1
Total										$	254.0	$	3.9		$	14.7	$	8.8

	Total Net Sales		Income (Loss) from Operations			Assets⁽¹⁾		Depreciation and Amortization		Capital Expenditures
Six Months Ended June 30, 2020
												Net Sales		Income (Loss) from Operations			Assets(1)		Depreciation and Amortization		Capital Expenditures
Six Months Ended June 30, 2021
Capital Markets - Software Solutions	$	63.0	$	2.8		$	165.6	$	6.7	$	7.0	$	82.3	$	15.8		$	178.0	$	7.8	$	8.2
Capital Markets - Compliance and Communication Management		219.9		50.7			452.1		8.0		1.6
Capital Markets - Compliance and Communications Management													291.6		123.7			466.2		3.0		1.3
Investment Companies - Software Solutions		31.9		0.5			97.4		6.1		5.5		44.6		5.5			92.3		6.8		4.5
Investment Companies - Compliance and Communication Management		159.9		4.1			149.8		5.0		1.0
Investment Companies - Compliance and Communications Management													94.3		8.4			68.9		2.2		1.3
Total operating segments		474.7		58.1			864.9		25.8		15.1		512.8		153.4			805.4		19.8		15.3
Corporate		—		(42.3	)		98.9		1.3		0.6		0		(40.5	)		126.1		0.1		2.4
Total	$	474.7	$	15.8		$	963.8	$	27.1	$	15.7	$	512.8	$	112.9		$	931.5	$	19.9	$	17.7

Donnelley Financial Solutions, Inc. and Subsidiaries (“DFIN”)

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

(in millions, except per share data, unless otherwise indicated)


	Net Sales		Income (Loss) from Operations			Assets(1)			Depreciation and Amortization		Capital Expenditures
Six Months Ended June 30, 2020
Capital Markets - Software Solutions	$	63.0	$	2.8		$	165.6		$	6.7	$	7.0
Capital Markets - Compliance and Communications Management		219.9		50.7			452.1			8.0		1.6
Investment Companies - Software Solutions		31.9		0.5			97.4			6.1		5.5
Investment Companies - Compliance and Communications Management		159.9		4.1			149.8			5.0		1.0
Total operating segments		474.7		58.1			864.9			25.8		15.1
Corporate		0		(42.3	)		98.9	��		1.3		0.6
Total	$	474.7	$	15.8		$	963.8		$	27.1	$	15.7

(1) Certain assets are recorded within a segment based on predominant usage, however, as they benefit more than one segment, the related operating expenses are allocated between segments.

Total Net Sales

Income (Loss) from Operations

Assets⁽¹⁾

Depreciation and Amortization

Capital Expenditures

Six Months Ended June 30, 2019

Capital Markets - Software Solutions
$
62.7

$
3.5

$
163.2

$
6.1

$
7.4

Capital Markets - Compliance and Communication Management

229.2

53.0

483.2

7.3

3.8

Investment Companies - Software Solutions

29.8

(6.2
)

104.9

6.4

8.3

Investment Companies - Compliance and Communication Management

166.8

12.5

168.0

4.3

6.4

Total operating segments

488.5

62.8

919.3

24.1

25.9

Corporate

—

(22.8
)

89.8

—

0.3

Total
$
488.5

$
40.0

$
1,009.1

$
24.1

$
26.2

~~(1)~~

~~Certain assets are recorded within a segment based on predominant usage, however, as they benefit more than one segment, the related operating expenses are allocated between segments.~~

~~Corporate assets primarily consisted of the following items:~~25

June 30, 2020

December 31, 2019

Cash and cash equivalents
$
37.4

$
17.2

Prepaid expenses and other current assets

11.0

11.7

Right-of-use assets

10.5

11.5

Deferred income taxes, net of valuation allowance

13.3

9.0

Other noncurrent assets

21.6

34.2

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used in this management’s discussion and analysis, unless otherwise specified or the context otherwise requires, the “Company,” “DFIN,” “we,” “our,” and “us” refer to Donnelley Financial Solutions, Inc. and its consolidated subsidiaries. This discussion and analysis should be read ~~in conjunction~~together with the Company’s Unaudited Condensed Consolidated Financial Statements and ~~accompanying~~the notes thereto, as well as the Company’s audited ~~consolidated financial statements~~Consolidated Financial Statements for the year ended December 31, ~~2019.~~2020.

Company Overview

DFIN is a leading global risk and compliance solutions company. The Company provides regulatory filing and deal solutions via its software, technology-enabled services and print and distribution solutions to public and private companies, mutual funds and other regulated investment firms, to serve its clients’ regulatory and compliance needs. DFIN helps its clients comply with applicable regulations where and how they want to work in a digital world, providing numerous solutions tailored to each client’s precise needs. The prevailing trend is toward clients choosing to utilize the Company’s software solutions, in conjunction with its tech-enabled services, to meet their document and filing needs, while at the same time shifting away from physical print and distribution of documents, except for cases where it is still regulatorily required or requested by shareholders.

The Company serves its clients’ regulatory and compliance needs throughout their respective life cycles. For ~~corporate clients within~~ its capital markets ~~offerings,~~clients, the Company offers solutions that allow ~~U.S.~~ public companies to comply with applicable U.S. Securities and Exchange Commission (“SEC”) regulations including filing agent services, digital document creation and online content management tools that support their corporate financial transactions and regulatory reporting; solutions to facilitate clients’ communications with their shareholders; and virtual data rooms and other deal management solutions. For ~~the~~ investment companies, including mutual fund, insurance-investment and alternative investment companies, the Company provides solutions for creating, compiling and filing ~~high-quality~~ regulatory ~~documents~~communications as well as solutions for investors designed to improve the ~~speed~~access to and accuracy of their ~~access to~~ investment information. ~~The Company serves its clients’ regulatory and compliance needs throughout their respective life cycles.~~

Technological advancements, regulatory changes, and evolving workflow preferences have led to the Company’s clients managing more of the financial disclosure process themselves, changing the marketplace for the Company’s services and products. DFIN’s strategy in its Software Solutions segments (CM-SS and IC-SS, as defined below) aligns with the changing marketplace by focusing the Company’s investments and resources in its advanced software solutions, primarily ~~ActiveDisclosure, FundSuiteArc~~ActiveDisclosure®, Arc Suite and Venue® Virtual Data Room (“Venue”), while making targeted investments, such as the Company’s acquisition of eBrevia, Inc. (“eBrevia”) to further broaden its solution set. In its Compliance & Communications Management segments (CM-CCM and IC-CCM, as defined below), the Company’s strategy focuses on maintaining its market-leading position by offering a high-touch, service-oriented experience, using its unique combination of tech-enabled services and print and distribution capabilities.

Market Volatility/Cyclicality

The Company’s Capital Markets segments (CM-SS and ~~CM-CCM)~~CM-CCM, as defined below), in particular, are subject to market volatility in the United States and world economy, as the success of the transactional and Venue offerings is ~~highly~~largely dependent on the global market for initial public offerings (“IPOs”), secondary offerings, mergers and acquisitions (“M&A”), public and private debt offerings, leveraged buyouts, spinouts and other transactions. A variety of factors impact the global markets for transactions, including economic activity levels, market volatility, the regulatory and political environment, civil unrest and global pandemics, amongst others. ~~The global transactional markets have been and continue to be disrupted due to the COVID-19 pandemic and its impacts to the overall economy and market volatility.~~ Due to the significant net sales and profitability derived from transactional and Venue offerings, market volatility can lead to uneven financial performance when comparing to previous periods. The Company mitigates a portion of this volatility through its compliance offerings, supporting the quarterly and annual public company reporting processes through its filing services and ActiveDisclosure, as well as its ~~investment companies~~Investment Companies segments (IC-SS and IC-CCM, as defined below) regulatory and shareholder communications offerings, including ~~FundSuiteArc.~~Arc Suite. The Company also mitigates some of that risk by offering services in higher demand during a down market, such as document management tools for the bankruptcy/restructuring process and by moving upstream in the filing process with products like Venue.

The quarterly/annual public company reporting process work subjects the Company to filing seasonality shortly after the end of each fiscal quarter, with peak periods during the course of the year. Additionally, investment companies clients require the Company to manage the financial and regulatory reporting and filing for mutual funds on an annual basis as well as annual prospectus filings, which peaks during the second fiscal quarter. The seasonality and associated operational implications include the need to increase staff during peak periods through a combined strategy of hiring temporary personnel, increasing the premium time of existing staff and outsourcing production for a number of services.

Services and Products

The Company separately reports its net sales and related cost of sales for its software solutions, tech-enabled services and print and distribution offerings. The Company’s software solutions consist of Venue, ActiveDisclosure, eBrevia, ~~FundSuiteArc,~~Arc Suite, and others. The Company’s tech-enabled services offerings consist of document composition, compliance-related ~~SEC’s~~SEC Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) filing services and transaction solutions. The Company’s print and distribution offerings primarily consist of conventional and digital printed products ~~and the related shipping.~~

~~Regulatory Developments~~

~~The SEC is adopting new~~ as well as amending existing rules and forms to modernize the reporting and disclosure of information by registered investment companies. These changes are driving significant regulatory changes which impact the Company’s customers within its Investment Companies business. As further disclosed in the Company’s Annual Report, on October 13, 2016, the SEC adopted a new N-PORT filing requirement, which requires certain registered investment companies to report information about their portfolio in XML, a structured data format, on a monthly basis, replacing what was previously a quarterly filing requirement. This rule also includes an annual N-CEN filing in XML, replacing a semi-annual filing requirement. The first N-PORT filing deadlines began in April 2019 for larger funds with over $1 billion in assets and, beginning in April 2020, smaller funds began filing N-PORT on a quarterly basis. The Company’s ArcFiling software solution supports both filings.related shipping.

Regulatory Developments

On June 5, 2018, the SEC adopted Rule 30e-3 which provides certain registered investment companies with an option to electronically deliver shareholder reports and other materials rather than providing such reports in paper. Investors who prefer to receive reports in paper will continue to receive them in that format. While Rule 30e-3 was effective January 1, 2019, default electronic distribution pursuant to the rule ~~will begin~~began on January 1, 2021 due to a 24-month transition period, during which registered investment companies ~~must notify~~notified investors of the upcoming change in transmission format of shareholder reports. The Company expects a significant decline in the volume of printed annual and semi-annual shareholder reports in 2021 and beyond as a result of Rule 30e-3.

~~On June 28, 2018,~~ Based on the ~~SEC announced that it was adopting amendments to require the use~~requirements of the ~~Inline XBRL (“iXBRL”) format for~~rule, the submission of operating company financial statement information and fund risk/return summary information to improve the data’s usefulness, timeliness and quality, benefiting investors, other market participants and other data users and decreasing, over time, the cost of preparing data for submission to the SEC. On September 17, 2020, large fund groups, defined as fund groups with net assets of $1 billion or more as of the end of their most recent fiscal year, will become subject to the iXBRL requirements. The Company ~~expects~~is expecting an increase in revenue ~~associated with~~ ~~eXtensible Business Reporting~~ ~~Language (“XBRL”) compliance services for~~from the ~~IC-SS segment (as defined below).~~ArcDigital software solution during 2021.

On March 11, 2020, the SEC announced that it has adopted a new rule 498A under the Securities Act of 1933, as amended (the “Securities Act”) and related regulatory amendments permitting variable annuity and variable life insurance contracts to use a more concise summary prospectus to provide disclosures to investors. More detailed information about the variable annuity or variable life insurance contract will be available online, and an investor can now choose to have that information delivered on paper. The new rule and related form amendments became effective on July 1, 2020 with compliance required by January 1, 2022. The Company expects ~~the majority of its insurance customers will adopt the rule by early 2021. As a result, the Company expects~~ a decline in printed prospectus volume in 2021 and beyond. Based on the requirements of the rule, the Company is also expecting an increase in revenue from the ArcPro software ~~solution~~solutions and related regulatory filings.

Segments

In the first quarter of 2020, management realigned the Company’s operating segments to reflect changes in the manner in which the chief operating decision maker assesses information for decision-making purposes. The ~~Company’s~~Company operates its business through four operating and reportable ~~segments are:~~segments: Capital Markets – Software Solutions (“CM-SS”), Capital Markets – Compliance and Communications Management (“CM-CCM”), Investment Companies – Software Solutions (“IC-SS”), and Investment Companies – Compliance and Communications Management (“IC-CCM”). Corporate is not an operating segment and consists primarily of unallocated selling, general and administrative (“expenses ("SG~~&A”~~&A") activities and associated expenses including, in part, executive, legal, finance and certain facility costs. In addition, certain costs and earnings of employee benefit plans, such as ~~further described below.~~

~~All prior year amounts related to segments have been reclassified to conform~~pension and other postretirement benefit plan expense (income) as well as share-based compensation expense, are included in Corporate and not allocated to the Company’s current reporting structure. There is no impact on the Company’s previously reported consolidated statements of operations, statements of comprehensive income, balance sheets, statements of cash flows or statements of changes in stockholders’ equity as a result of the new segmentation. For the Company’s financial results and the presentation of certain other financial information by segment, see Note 12~~, Segment Information, to the Unaudited Condensed Consolidated Financial Statements.~~operating segments.

Capital Markets

The Company provides software solutions, ~~technology-enabled~~tech-enabled services and print and distribution solutions to public and private companies for deal solutions and compliance to companies that are, or are preparing to become, subject to the filing and reporting requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Capital markets’ clients leverage the Company’s software offerings, proprietary technology, deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents through the EDGAR system for their transactional and ongoing compliance needs. The Company assists its capital markets clients throughout the course of public and private business transactions; M&A, IPOs, debt offerings and other similar transactions. In addition, the Company provides clients with compliance solutions to prepare their ongoing required Exchange Act filings that are compatible with the SEC’s EDGAR system, most notably Form 10-K, Form 10-Q, Form 8-K and Proxy Form DEF 14A. The Company’s operating segments associated with its capital markets services and products offerings are as follows:

Capital Markets – Software ~~Solutions—~~Solutions—The ~~Company~~CM-SS segment provides ~~software~~Venue, ActiveDisclosure, eBrevia and EDGAR Online solutions to its capital markets clients through its CM-SS segment. The Company’s Venue solution is a highly secure data room platform that allows clients to share confidential information in real-time throughout the transaction lifecycle. Clients can maintain control over sensitive data when conducting due diligence for M&A, raising capital for an IPO or developing a document repository. Specifically,public and private companies have used Venue to securely organize, manage, distribute and track corporate governance, financing, legal and other documents in an online workspace accessible to internal and outside advisors. Via integration with the Company’s eBrevia solution, Venue can use artificial intelligence to analyze documents to help ~~clients better understand their content~~manage public and ~~make informed decisions.~~

~~The Company’s cloud-based ActiveDisclosure platform provides clients with end-to-end solutions to collaborate,~~private transaction processes, extract data and analyze contracts; collaborate; and tag, validate and file ~~with the~~ SEC efficiently. By leveraging its browser-enabled platform, ActiveDisclosure brings teams together across departments, functions and geographies in real time to create and edit Word, Excel or PowerPoint documents across devices, simultaneously. When combined with ActiveLink, a synchronous updating tool, ActiveDisclosure seamlessly flows changes throughout an entire document automatically, reducing risk and providing additional assurance to clients.documents.

The Company’s EDGAR® Online solution delivers intelligent solutions in financial disclosures, creating and distributing company data and public filings for equities, mutual funds and other publicly traded assets.27

Capital Markets – Compliance & Communications ~~Management—~~Management—The CM-CCM segment provides ~~technology-enabled~~tech-enabled services and print and distribution solutions to public and private companies for ~~its capital markets clients.~~deal solutions and SEC compliance requirements. In addition, the Company offers clients the use of private conferencing facilities in ~~most~~ major ~~cities in the U.S. and international jurisdictions to~~global cities. This service helps clients maintain confidentiality in deal negotiations and provide clients a place to host in-person working groups to meet, strategize and prepare documents for the ~~transactional~~transaction deal stream. Due to the COVID-19 pandemic, the Company transformed its production platform and service delivery model for a fully-virtual experience while replicating the in-person experience. The Company anticipates that in the future, clients will utilize the range of options available to them, including a hybrid approach with working group members working both virtually and in-person during drafting sessions for their transactions.

Investment Companies

Investment Companies – Software Solutions—The ~~Company provides software products to its investment companies clients through its~~ IC-SS ~~segment. The Company’s proprietary FundSuiteArc software platform~~segment provides clients with the proprietary Arc Suite platform that contains a comprehensive suite of cloud-based solutions and services that ~~store~~enable storage and ~~manage~~management of compliance and regulatory information in a self-service, central repository ~~for compliance and regulatory~~so that documents tocan be easily accessed, assembled, edited, translated, rendered and submitted to regulators. FundSuiteArc offers cloud-based solutions featuring automation and single-source data validation that streamlines processes and drives efficiency for clients. FundSuiteArc includes ArcFiling, ArcReporting, ArcPro, and ArcRegulatory.

Investment Companies – Compliance & Communications Management—~~Through its~~The IC-CCM segment ~~the Company~~ provides ~~its investment companies~~ clients with ~~technology-enabled solutions~~tech-enabled services for creating and filing ~~high-quality~~ regulatory ~~documents~~communications and solutions for investor communications, as well as ~~XBRL-formatted~~eXtensible Business Reporting Language (“XBRL”) formatted filings pursuant to the Investment Company Act, through the ~~SEC’s~~SEC EDGAR system.

The IC-CCM segment also provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, shareholder meeting review and expert support.

~~Corporate~~

~~The Company reports certain unallocated SG&A activities and associated expenses within~~ ~~Corporate~~, including, in part, executive, legal, finance, marketing, communications and certain facility costs. In addition, certain costs and earnings of employee benefit plans, such as pension and other postretirement benefit plan expense (income) and share-based compensation, are included in Corporate and are not allocated to the operating segments.

Executive Overview

Second Quarter Overview

Net sales ~~decreased~~for the three months ended June 30, 2021 increased by ~~$4.9~~$13.5 million, or ~~1.9%~~5.3%, to ~~$254.0~~$267.5 million from ~~$258.9~~$254.0 million for the ~~second quarter of~~three months ended June 30, 2020, ~~compared to the same period in the prior year,~~ including a ~~$0.6~~$2.9 million, or ~~0.2%~~1.1%, ~~decrease~~increase due to changes in foreign exchange rates. Net sales ~~decreased~~increased primarily due to ~~a decline~~higher capital markets transactional and compliance volumes and higher software solutions volumes in ~~print~~Venue, Arc Suite and ActiveDisclosure, partially offset by lower mutual funds compliance volumes as a result of ~~lower capital markets transactions~~the impact of SEC Rule 30e-3 and ~~compliance and commercial print volumes partially offset by higher tech-enabled services for capital markets transactions and higher mutual fund transactional print volumes.~~498A on the Company's business.

Income from operations for the ~~second quarter of 2020 decreased~~three months ended June 30, 2021 increased by ~~$29.5~~$58.1 million ~~or 88.3%,~~ to ~~$3.9~~$62.0 million from ~~$33.4~~$3.9 million for the three months ended June 30, ~~2019,~~2020, primarily due to ~~higher~~a decrease in restructuring, impairment and other charges, ~~along with increased SG&A expense driven by the $12.3~~net, a $12.1 million ~~accrual for~~decrease in the LSC multiemployer pension ~~plans~~plan obligation expense, higher sales volumes, a~~s further disclosed in Note 7,~~ ~~Commitments~~ favorable sales mix and ~~Contingencies,~~ ~~to the Unaudited Condensed Consolidated Financial Statements and discussed below~~,cost control initiatives, partially offset by ~~the impact from cost control initiatives.~~higher incentive compensation expense and higher selling expense as a result of increased sales volume.

Year-to-Date Overview

Net sales ~~decreased~~for the six months ended June 30, 2021 increased by ~~$13.8~~$38.1 million, or ~~2.8%~~8.0%, to ~~$474.7~~$512.8 million from ~~$488.5~~$474.7 million for the six months ended June 30, 2020, ~~compared to the same period in the prior year,~~ including a ~~$1.1~~$4.4 million, or ~~0.2%~~0.9%, ~~decrease~~increase due to changes in foreign exchange rates. Net sales ~~decreased~~increased primarily due to higher capital markets transactional volumes and higher software solutions volumes in Venue, Arc Suite and ActiveDisclosure, partially offset by lower mutual ~~fund~~funds compliance ~~volume, a decline in print~~volumes as a result of ~~lower capital markets transactional~~the impact of SEC Rule 30e-3 and compliance print volumes and a decrease in Venue dataroom volumes, partially offset by higher tech-enabled services for capital markets transactions and higher ActiveDisclosure and FundSuiteArc volumes.498A on the Company's business.

Income from operations for the six months ended June 30, ~~2020 decreased~~2021 increased by ~~$24.2~~$97.1 million ~~or 60.5%,~~ to ~~$15.8~~$112.9 million from ~~$40.0~~$15.8 million for the six months ended June 30, ~~2019,~~2020, primarily due to ~~higher~~a decrease in restructuring, impairment and other charges, ~~increased SG&A expense driven by the~~net, higher sales volumes, a favorable sales mix, cost control initiatives and a $4.8 million decrease in LSC multiemployer pension ~~plans~~plan obligation ~~and the impact of the lower sales volumes,~~expense, partially offset by higher incentive compensation expense and higher selling expense a result of increased sales volume.

Credit Agreement Amendment and Restatement

On May 27, 2021, the ~~impact from cost control initiatives.~~Company amended and restated its credit agreement dated as of September 30, 2016 (as in effect prior to such amendment and restatement, the "Credit Agreement," and the Credit Agreement, as so amended and restated, the "Amended and Restated Credit Agreement") to, among other things, provide for a $200 million delayed-draw term loan A facility (the "Delayed-Draw Term Loan A Facility"), extend the maturity of the $300 million Revolving Facility (as defined below) to May 27, 2026 as well as modify the financial maintenance and negative covenants in the Credit Agreement. The proceeds of the Delayed-Draw Term Loan A Facility may only be used to redeem or repurchase the Company's Notes (as defined below) which become redeemable, in whole or in part, on or after October 15, 2021, at the redemption price of 102.063%, plus accrued and unpaid interest, if any. The commitments under the Delayed-Draw Term Loan A Facility will expire on November 1, 2021.

COVID-19

In December 2019, a novel strain of coronavirus, ~~currently~~ known as COVID-19 (“COVID-19”), was identified in China and has since extensively impacted the global health and economic environment. On March 11, 2020, the World Health Organization ~~(“WHO”)~~ characterized COVID-19 as a pandemic. Although COVID-19 has adversely impacted the Company’s financial condition, results of operations and overall financial performance, the extent of that impact is currently uncertain and depends on factors including the impact on the Company’s customers, employees and vendors.

The COVID-19 pandemic has had and may continue to have a material adverse impact on certain of the Company’s customers’ financial results, which has and may continue to force ~~the Company’s~~those clients to alter their plans for purchasing the Company’s services and products. In addition, the global markets ~~have been and continue to be~~were disrupted due to the COVID-19 pandemic, which ~~has~~ negatively impacted the Company’s transactional ~~offerings~~offerings. This stabilized in the third quarter of 2020 and ~~that negative impact is expected~~the Company continues to ~~continue.~~experience an increase in transactional offerings. However, there remains uncertainty for future periods with the possibility of a resurgence of the COVID-19 pandemic, including potentially new strains of COVID-19, resulting in renewal of mitigation measures, including targeted shutdowns. Some of this volatility is mitigated through the Company’s compliance offerings, supporting the quarterly and annual public company reporting processes, as well as its investment companies regulatory and shareholder communications offerings. If the Company’s customers reduce, defer or cancel their spending with DFIN, it would materially adversely impact the Company’s business, results of operations and overall financial performance.

Some of the Company’s operations also have been affected by a range of external factors related to the COVID-19 pandemic that are not within the Company’s control. For example, many jurisdictions ~~have~~ imposed a wide range of restrictions on the physical movement of the Company’s employees and vendors to limit the spread of ~~COVID-19.~~COVID-19, although many of these restrictions have been rescinded, in whole or in part. If any of these external factors or widespread geographic shutdowns are renewed, or if the COVID-19 pandemic ~~has~~and related mitigation measures otherwise have a substantial impact on the Company’s or vendors’ employee attendance or productivity, the Company’s operations are expected to be adversely affected, and in turn the Company’s business, results of operations, liquidity and overall financial performance would be harmed. Furthermore, the Company’s insurance costs may increase.

The Company has taken numerous steps, and will continue to take further actions as needed, in its response to the COVID-19 pandemic. The Company has implemented business continuity plans, ~~and~~ has instructed all employees that can work from home to do so while allowing for voluntary return to the office in some locations, has implemented travel restrictions and has conducted virtual customer and employee meetings. These decisions may delay or reduce sales and harm productivity and collaboration. The Company ~~has also~~continues to reevaluate these measures on an ongoing basis. Incremental expenses incurred ~~$1.9 million of incremental expenses, net of sales surcharges, as a result of~~related to the COVID-19 pandemic ~~during the six months ended June 30, 2020. Incremental expenses incurred~~ included incremental vendor costs and premium wages paid to certain employees as well as costs to clean and disinfect the Company’s facilities more frequently. As a result of ~~these~~the incremental expenses, starting in the second quarter of 2020, the Company invoiced certain customers COVID-19-related sales surcharges to recoup some of the expenses. In the second half of 2020, the Company also received certain government subsidies in connection with COVID-19, primarily related to employee wages at certain international locations. The Company ~~expects to~~could continue to incur such costs in future periods, however, the impact of such costs on the Company’s ~~financial condition,~~business, results of operations, liquidity and overall financial performance cannot be predicted at this time. The Company isrecorded COVID-19 recoveries, net of $1.0 million, related to an insurance reimbursement for COVID-19 expenses, and incurred $1.9 million of incremental expense, net of sales surcharges, during the six months ended June 30, 2021 and 2020, respectively. The Company also ~~working~~continues to work closely with its clients to support them as they implement their own contingency plans, helping them access the Company’s services and products and continue to meet their regulatory requirements.

The Company believes that implementing cost reduction efforts ~~will help~~helped mitigate the impact that reduced revenues ~~will have~~in the first half of 2020 had on ~~2020~~ income from operations. The Company has reduced expenses and may take further actions that alter its business operations as the situation evolves. The ultimate impact of the COVID-19 pandemic and the effects on the Company’s business, ~~financial condition,~~results of operations, liquidity and overall financial ~~results~~performance cannot be predicted at this time.

Multiemployer Pension Plans Obligation

On April 13, 2020, LSC Communications, Inc. (“LSC”) announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code (“LSC Chapter 11 Filing”). LSC and the Company separated from R. R. Donnelley & Sons Company (“RRD”) in a tax-free distribution to shareholders effective October 1, 2016 (the “Separation”). In the second quarter of 2020, the Company became aware that, subsequent to the LSC Chapter 11 Filing, LSC failed to make certain required monthly and quarterly withdrawal liability payments to multiemployer pension plans from which RRD had withdrawn prior to the Separation. Responsibility for ~~the~~certain pre-Separation withdrawal liability obligations, resulting in such monthly and quarterly payment obligations (the ~~“MEPP~~“LSC MEPP Liabilities”), had been assigned to LSC pursuant to the September 14, 2016 Separation and Distribution Agreement among the Company, RRD and LSC (the “Separation Agreement”), however, the Company and RRD remained jointly and severally liable for the LSC MEPP Liabilities pursuant to laws and regulations governing multiemployer pension plans. The Company believes the total undiscounted LSC MEPP Liabilities for which LSC iswas responsible ~~are~~at the time of the LSC Chapter 11 Filing were approximately $103 million (or approximately $57 million on a discounted basis, assuming a blended discount rate of approximately 10%) and ~~are~~were payable over approximately a 15-year period (through 2034), with annual payments ranging from $1.6 million to $8.5 ~~million.~~million at the time.

On July 24, 2020, the Company and RRD signed an agreement agreeing to submit to mediation and, if required, arbitration to determine the final liability allocation between the Company and RRD with respect to the LSC MEPP Liabilities. DFIN and RRD also agreed to share all required monthly and quarterly withdrawal liability payment obligations that become due during the mediation/arbitration period, with an adjustment and repayment to be made for any such payments according to the final allocation. The Company and RRD were unable to agree on the final liability allocation in mediation and on March 22, 2021 submitted the matter to arbitration pursuant to the terms of the Separation Agreement, which is expected to take place in the second half of 2021.

Financial Review

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires the extensive use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities as well as disclosures of contingent assets and liabilities atas of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s significant accounting policies and critical estimates are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, as filed with the SEC on February ~~26, 2020~~25, 2021 (the “Annual Report”).

In the financial review that follows, the Company discusses its unaudited condensed consolidated results of operations, cash flows and certain other information. This discussion should be read in conjunction with the Company’s Unaudited Condensed Consolidated Financial Statements and the related notes.

Results of Operations for the Three and Six Months Ended June 30, ~~2020~~2021 as Compared to the Three and Six Months Ended June 30, ~~2019~~2020

The following table shows the results of operations for the three and six months ended June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three Months Ended June 30,												Six Months Ended June 30,
	2021			2020			$ Change			% Change			2021			2020			$ Change			% Change
	(in millions, except percentages)
Net sales
Tech-enabled services	$	134.0		$	115.4		$	18.6			16.1	%	$	252.5		$	197.3		$	55.2			28.0	%
Software solutions		66.6			47.6			19.0			39.9	%		126.9			94.9			32.0			33.7	%
Print and distribution		66.9			91.0			(24.1	)		(26.5	%)		133.4			182.5			(49.1	)		(26.9	%)
Total net sales		267.5			254.0			13.5			5.3	%		512.8			474.7			38.1			8.0	%
Cost of sales (1)
Tech-enabled services		42.7			47.5			(4.8	)		(10.1	%)		83.7			90.3			(6.6	)		(7.3	%)
Software solutions		25.1			23.7			1.4			5.9	%		49.6			48.5			1.1			2.3	%
Print and distribution		49.7			66.3			(16.6	)		(25.0	%)		94.5			135.0			(40.5	)		(30.0	%)
Total cost of sales		117.5			137.5			(20.0	)		(14.5	%)		227.8			273.8			(46.0	)		(16.8	%)
Selling, general and administrative expenses (1)		75.1			72.8			2.3			3.2	%		148.6			129.8			18.8			14.5	%
Depreciation and amortization		10.1			14.7			(4.6	)		(31.3	%)		19.9			27.1			(7.2	)		(26.6	%)
Restructuring, impairment and other charges, net		2.8			25.1			(22.3	)		(88.8	%)		3.6			28.2			(24.6	)		(87.2	%)
Income from operations		62.0			3.9			58.1		nm				112.9			15.8			97.1		nm
Interest expense, net		5.9			6.3			(0.4	)		(6.3	%)		11.2			10.9			0.3			2.8	%
Investment and other income, net		(1.5	)		(0.5	)		(1.0	)	nm				(2.3	)		(0.9	)		(1.4	)	nm
Earnings (loss) before income taxes		57.6			(1.9	)		59.5		nm				104.0			5.8			98.2		nm
Income tax expense (benefit)		14.7			(0.6	)		15.3		nm				25.9			3.0			22.9		nm
Net earnings (loss)	$	42.9		$	(1.3	)	$	44.2		nm			$	78.1		$	2.8		$	75.3		nm

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

$ Change

% Change

2020

2019

$ Change

% Change

(in millions, except percentages)

Net sales

Tech-enabled services
$
115.4

$
113.4

$
2.0

1.8
%

$
197.3

$
196.6

$
0.7

0.4
%
Software solutions

47.6

47.8

(0.2
)

(0.4
%)

94.9

92.5

2.4

2.6
%
Print and distribution

91.0

97.7

(6.7
)

(6.9
%)

182.5

199.4

(16.9
)

(8.5
%)
Total net sales

254.0

258.9

(4.9
)

(1.9
%)

474.7

488.5

(13.8
)

(2.8
%)
Cost of sales ⁽¹⁾

Tech-enabled services

47.5

50.6

(3.1
)

(6.1
%)

90.3

99.4

(9.1
)

(9.2
%)
Software solutions

23.7

25.0

(1.3
)

(5.2
%)

48.5

51.6

(3.1
)

(6.0
%)
Print and distribution

66.3

73.4

(7.1
)

(9.7
%)

135.0

151.9

(16.9
)

(11.1
%)
Total cost of sales

137.5

149.0

(11.5
)

(7.7
%)

273.8

302.9

(29.1
)

(9.6
%)
Selling, general and administrative expenses ⁽¹⁾

72.8

57.9

14.9

25.7
%

129.8

112.8

17.0

15.1
%
Depreciation and amortization

14.7

12.0

2.7

22.5
%

27.1

24.1

3.0

12.4
%
Restructuring, impairment and other charges, net

25.1

3.8

21.3

nm

28.2

5.9

22.3

nm

Other operating loss

—

2.8

(2.8
)

(100.0
%)

—

2.8

(2.8
)

(100.0
%)
Income from operations

3.9

33.4

(29.5
)

(88.3
%)

15.8

40.0

(24.2
)

(60.5
%)
Interest expense, net

6.3

9.1

(2.8
)

(30.8
%)

10.9

18.0

(7.1
)

(39.4
%)
Investment and other income, net

(0.5
)

(0.5
)

—

0.0
%

(0.9
)

(1.1
)

0.2

(18.2
%)
(Loss) earnings before income taxes

(1.9
)

24.8

(26.7
)

nm

5.8

23.1

(17.3
)

(74.9
%)
Income tax (benefit) expense

(0.6
)

7.5

(8.1
)

nm

3.0

7.2

(4.2
)

(58.3
%)
Net (loss) earnings
$
(1.3
)

$
17.3

$
(18.6
)

nm

$
2.8

$
15.9

$
(13.1
)

(82.4
%)
(1)

Exclusive of depreciation and amortization.

~~(1)~~

~~Exclusive of depreciation and amortization.~~

nm – Not meaningful

Consolidated

Three Months Ended June 30, 2021 compared to the Three Months Ended June 30, 2020 ~~compared to Three Months Ended June 30, 2019~~

Net sales of tech-enabled services of $134.0 million for the three months ended June 30, ~~2020~~2021 increased ~~$2.0~~$18.6 million, or ~~1.8%~~16.1%, as compared to ~~$115.4 million versus~~ the three months ended June 30, ~~2019.~~2020. Net sales of tech-enabled services increased primarily due to increased capital markets transactional volumes, partially offset by lower mutual funds compliance and transactional ~~and compliance~~ volumes.

Net sales of software solutions of $66.6 million for the three months ended June 30, ~~2020 decreased $0.2~~2021 increased $19.0 million, or ~~0.4%~~39.9%, as compared to ~~$47.6 million versus~~ the three months ended June 30, ~~2019.~~2020. Net sales of software solutions ~~decreased~~increased primarily due to ~~lower~~increased Venue, ~~dataroom volumes, partially offset by higher~~ArcDigital, ActiveDisclosure ~~volumes~~ and ~~price increases in other software compliance solutions.~~ArcPro volumes.

Net sales of print and distribution of $66.9 million for the three months ended June 30, ~~2020~~2021 decreased ~~$6.7~~$24.1 million, or ~~6.9%~~26.5%, as compared to ~~$91.0 million versus~~ the three months ended June 30, ~~2019.~~2020. Net sales of print and distribution decreased primarily due to lower ~~capital markets transactional~~mutual funds compliance volumes as a result of the impact of SEC Rule 30e-3 and ~~compliance print volumes,~~498A on the Company's business, partially offset by higher ~~mutual fund~~capital markets transactional print volumes.

Tech-enabled services cost of sales of $42.7 million for the three months ended June 30, ~~2020~~2021 decreased ~~$3.1~~$4.8 million, or ~~6.1%~~10.1%, as compared to ~~$47.5 million versus~~ the three months ended June 30, ~~2019,~~2020. Tech-enabled services cost of sales decreased primarily due to ~~the impact of~~a favorable sales mix and cost control initiatives, partially offset by the impact of higher sales ~~volumes.~~volumes and higher incentive compensation expense. As a percentage of tech-enabled services net sales, tech-enabled services ~~costs~~cost of sales decreased ~~3.4% as~~9.3%, primarily driven by a ~~result of~~favorable sales mix and cost control ~~initiatives.~~initiatives, partially offset by higher incentive compensation expense.

Software solutions cost of sales ~~decreased $1.3 million, or 5.2%, to $23.7~~of $25.1 million for the three months ended June 30, ~~2020 versus~~2021 increased $1.4 million, or 5.9%, as compared to the three months ended June 30, ~~2019,~~2020. Software solutions cost of sales increased primarily due to ~~the impact of~~increased sales volume, partially offset by cost control ~~initiatives.~~initiatives and a favorable sales mix. As a percentage of software solutions net sales, software solutions cost of sales decreased ~~2.5%~~12.1%, primarily ~~as a result of~~driven by cost control ~~initiatives.~~initiatives and a favorable sales mix.

Print and distribution cost of sales ~~decreased $7.1 million, or 9.7%, to $66.3~~of $49.7 million for the three months ended June 30, ~~2020 versus~~2021 decreased $16.6 million, or 25.0%, as compared to the three months ended June 30, ~~2019,~~2020. Print and distribution cost of sales decreased primarily due to the impact of lower sales volumes as a result of the impact of SEC Rule 30e-3 and 498A on the Company's business, cost ~~control initiatives~~savings as a result of the consolidation of the print platform and a lower ~~volume.~~allocation of overhead costs, partially offset by higher incentive compensation expense. As a percentage of print and distribution net sales, print and distribution cost of sales ~~decreased 2.2%~~increased 1.4%, primarily ~~as a result~~driven by lower sales volumes and higher incentive compensation expense, partially offset by the print platform consolidations savings and lower allocation of ~~cost control initiatives.~~overhead costs.

SG&A ~~expense increased $14.9 million, or 25.7%, to $72.8~~expenses of $75.1 million for the three months ended June 30, ~~2020~~2021 increased $2.3 million, or 3.2%, as compared to the three months ended June 30, ~~2019,~~2020. SG&A expenses increased primarily due to ~~the $12.3~~higher incentive compensation expense and higher selling expenses as a result of increased sales volume, partially offset by a $12.1 million ~~accrual for the~~decrease in LSC multiemployer pension ~~plans obligation.~~plan obligation expense. As a percentage of net sales, SG&A expenses ~~increased from 22.4%~~decreased 0.6% to 28.1% for the three months ended June 30, ~~2019~~2021, as compared to 28.7% for the three months ended June 30, 2020, primarily due to the ~~accrual for the~~decrease in LSC multiemployer pension ~~plans obligation.~~plan obligation expense, partially offset by increased incentive compensation expense.

Depreciation and amortization ~~increased $2.7 million, or 22.5%, to $14.7~~of $10.1 million for the three months ended June 30, ~~2020~~2021 decreased $4.6 million, or 31.3%, as compared to the three months ended June 30, ~~2019,~~2020. Depreciation and amortization decreased primarily due to intangible assets that were fully amortized by the ~~acceleration~~end of ~~depreciation as the result of a change in the estimated useful lives of certain assets.~~fiscal year 2020. Depreciation and amortization included ~~$3.3~~$0.3 million and ~~$3.6~~$3.3 million of amortization of other intangible assets related to customer relationships and a tradename for the three months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively.

Restructuring, impairment and other charges, net ~~for the three months ended June 30, 2020, were $25.1 million, as compared to $3.8~~of $2.8 million for the three months ended June 30, ~~2019.~~2021 decreased $22.3 million compared to $25.1 million for the three months ended June 30, 2020. In 2021, these charges included $2.7 million of employee termination costs for approximately 170 employees. In 2020, these charges included $12.3 million of employee termination costs for approximately 460 employees, $12.1 million of impairment charges ~~of $12.1 million~~ relating to operating lease right-of-use ~~(“ROU”~~("ROU") assets and $0.7 million for other charges, primarily related to the realignment of the Company’s operating segments. ~~In 2019, these charges included $3.8 million of employee termination costs for approximately 95 employees.~~

~~Other operating loss for the three months ended June 30, 2019, of $2.8 million, related to the estimated payment of amounts related to the disposition of the Language Solutions business.~~

Income from operations for the three months ended June 30, 2020 decreased $29.5 million, or 88.3%, to $3.9 million versus the three months ended June 30, 2019, primarily due to higher restructuring, impairment and other charges and the $12.3 million accrual for the LSC multiemployer pension plans obligation, partially offset by cost control initiatives.

~~Interest expense, net decreased $2.8 million to $6.3~~of $62.0 million for the three months ended June 30, ~~2020 versus the same period for 2019 due~~2021 increased $58.1 million as compared to the payoff of the Company’s term loan credit facility in 2019 as well as the Company’s purchase and retirement of $66.5 million (notional amount) of the Notes (as defined below) in the first quarter of 2020, partially replaced by the Revolving Facility (as defined below) that carries a lower interest rate.

~~Investment and other income, net for both~~ the three months ended June 30, 2020, primarily due to a decrease in restructuring, impairment and other charges, net, a $12.1 million decrease in the LSC multiemployer pension plan obligation expense, higher sales volumes, a favorable sales mix and cost control initiatives, partially offset by higher incentive compensation expense and higher selling expense as a result of increased sales volume.

Interest expense, net of $5.9 million for the three months ended June 30, ~~2019~~2021 decreased $0.4 million as compared to the three months ended June 30, 2020, primarily ~~consisted~~due to a lower Revolving Facility (as defined below) balance as of June 30, 2021 as compared to June 30, 2020.

Investment and other income, net of $1.5 million for the three months ended June 30, 2021 increased $1.0 million primarily due to an increase in net pension plan income and ~~totaled $0.5 million for both periods.~~other income.

The effective income tax rate was 25.5% for the three months ended June 30, 2021 compared to 31.6% for the three months ended June 30, ~~2020 compared to 30.2% for~~2020. The decrease in the effective income tax rate was primarily driven by the favorable impact of a discrete adjustment associated with the vesting of the Company's equity awards during the three months ended June 30, ~~2019. The increase~~2021 along with lower earnings in ~~the effective income tax rate for the three months ended~~2020.

Six Months Ended June 30, ~~2020 was primarily driven by~~2021 compared to the Company’s inability to recognize a tax benefit on certain losses and the impact of discrete tax adjustments on lower quarter to date earnings, partially offset by a lower forecasted annual effective tax rate.

Six Months Ended June 30, 2020 ~~compared to Six Months Ended June 30, 2019~~

Net sales of tech-enabled services of $252.5 million for the six months ended June 30, ~~2020~~2021 increased ~~$0.7~~$55.2 million, or ~~0.4%~~28.0%, as compared to ~~$197.3 million, versus~~ the six months ended June 30, ~~2019.~~2020. Net sales of tech-enabled services increased primarily due to ~~higher~~increased capital markets transactional ~~volumes,~~volume, partially offset by lower mutual ~~fund~~funds compliance and transactional volumes.

Net sales of software solutions of $126.9 million for the six months ended June 30, ~~2020~~2021 increased ~~$2.4~~$32.0 million, or ~~2.6%~~33.7%, as compared to ~~$94.9 million versus~~ the six months ended June 30, ~~2019.~~2020. Net sales of software solutions increased primarily due to ~~higher~~Venue, ArcDigital, ActiveDisclosure, and ~~FundSuiteArc volumes and price increases in other software compliance solutions, partially offset by lower Venue dataroom volume.~~ArcPro volumes.

Net sales of print and distribution of $133.4 million for the six months ended June 30, ~~2020~~2021 decreased ~~$16.9~~$49.1 million, or ~~8.5%~~26.9%, ~~to $182.5 million versus the six months ended June 30, 2019, due to lower capital markets transactional, mutual fund compliance and capital markets compliance print volumes.~~

~~Tech-enabled services cost of sales for the six months ended June 30, 2020 decreased $9.1 million, or 9.2%, to $90.3 million,~~as compared to the six months ended June 30, ~~2019,~~2020. Net sales of print and distribution decreased primarily due to lower mutual funds compliance volumes as a result of the impact of SEC Rule 30e-3 and 498A on the Company's business, partially offset by higher capital markets transactional print volumes.

Tech-enabled services cost of sales of $83.7 million for the six months ended June 30, 2021 decreased $6.6 million, or 7.3%, as compared to the six months ended June 30, 2020. Tech-enabled services cost of sales decreased primarily due to a favorable sales mix and cost control ~~initiatives.~~initiatives, partially offset by the impact of higher sales volumes, a higher allocation of overhead costs and higher incentive compensation expense. As a percentage of tech-enabled services net sales, tech-enabled services cost of sales decreased ~~4.8%~~12.7%, primarily as a result of a favorable sales mix and cost control ~~initiatives.~~initiatives, partially offset by a higher allocation of overhead costs and higher incentive compensation expense.

Software solutions cost of sales ~~decreased $3.1 million, or 6.0%, to $48.5~~of $49.6 million for the six months ended June 30, ~~2020 versus~~2021 increased $1.1 million, or 2.3%, as compared to the six months ended June 30, ~~2019,~~2020. Software solutions cost of sales increased primarily due to ~~cost control initiatives,~~increased sales volume, a higher allocation of overhead costs and higher incentive compensation expense, partially offset by ~~the impact of increased volumes.~~a favorable sales mix and cost control initiatives. As a percentage of software solutions net sales, software solutions cost of sales decreased ~~4.7%~~12.0%, primarily as a result ofa favorable sales mix and cost control ~~initiatives.~~initiatives, partially offset by a higher allocation of overhead costs and higher incentive compensation expense.

Print and distribution cost of sales ~~decreased $16.9 million, or 11.1%, to $135.0~~of $94.5 million for the six months ended June 30, ~~2020 versus~~2021 decreased $40.5 million, or 30.0%, as compared to the six months ended June 30, ~~2019.~~2020. Print and distribution cost of sales decreased primarily due to the impact of lower sales volumes as a result of the impact of SEC Rule 30e-3 and 498A on the Company's business, cost ~~control initiatives.~~savings as a result of the consolidation of the print platform and a lower allocation of overhead costs, partially offset by higher incentive compensation expense. As a percentage of print and distribution net sales, print and distribution cost of sales decreased ~~2.2%~~3.2%, primarily as a result of cost ~~control initiatives.~~savings as a result of the consolidation of the print platform and a lower allocation of overhead costs, partially offset by higher incentive compensation expense.

SG&A expenses ~~increased $17.0 million, or 15.1%, to $129.8~~of $148.6 million for the six months ended June 30, ~~2020,~~2021 increased $18.8 million, or 14.5%, as compared to the six months ended June 30, ~~2019,~~2020. SG&A expenses increased primarily due to ~~the $12.3~~higher selling expenses as a result of increased sales volume and higher incentive compensation expense, partially offset by a $4.8 million ~~accrual for the~~decrease in LSC multiemployer pension ~~plans~~plan obligation ~~and higher healthcare benefit claims.~~expense. As a percentage of net sales, SG&A expenses increased ~~from 23.1%~~to 29.0% for the six months ended June 30, ~~2019 to~~2021 from 27.3% for the six months ended June 30, 2020, primarily due to ~~the~~higher incentive compensation expense, partially offset by a decrease in LSC multiemployer pension ~~plans~~plan obligation ~~and higher healthcare benefit claims.~~expense.

Depreciation and amortization ~~increased $3.0 million, or 12.4%, to $27.1~~of $19.9 million for the six months ended June 30, ~~2020~~2021 decreased $7.2 million, or 26.6%, as compared to the six months ended June 30, ~~2019,~~2020. Depreciation and amortization decreased primarily due to intangible assets that were fully amortized by the ~~acceleration~~end of ~~depreciation as the result of a change in the estimated useful lives of certain assets.~~fiscal year 2020. Depreciation and amortization included ~~$6.7~~$0.5 million and ~~$7.3~~$6.7 million of amortization of other intangible assets related primarily to customer relationships and a tradename for the six months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively.

Restructuring, impairment and other charges, net ~~for the six months ended June 30, 2020, were $28.2 million, as compared to $5.9~~of $3.6 million for the six months ended June 30, ~~2019.~~2021 decreased $24.6 million as compared to the six months ended June 30, 2020. In 2021, these charges included $2.9 million of employee termination costs for approximately 170 employees and $0.6 million of other restructuring charges. In 2020, these charges included $13.9 million of employee termination costs for approximately 510 employees, impairment charges of $12.1 million ~~relating~~related to operating lease ROU assets and $2.2 million offor other charges, primarily related to the realignment of the Company’s operating segments. ~~In 2019, these charges included $5.8 million of employee termination costs for approximately 165 employees.~~

~~Other operating loss for the six months ended June 30, 2019, of $2.8 million, related to the estimated payment of amounts related to the disposition of the Language Solutions business.~~

Income from operations for the six months ended June 30, 2020 decreased $24.2 million, or 60.5%, to $15.8 million versus the six months ended June 30, 2019, primarily due to higher restructuring, impairment and other charges, the increase in SG&A as noted above and the impact of ~~lower volumes, partially offset by cost control initiatives.~~

~~Interest expense, net decreased $7.1 million to $10.9~~$112.9 million for the six months ended June 30, ~~2020 versus~~2021 increased $97.1 million as compared to the ~~same period in 2019,~~six months ended June 30, 2020, primarily due to a decrease in restructuring, impairment and other charges, net, higher sales volume, a favorable sales mix, cost control initiatives and a $4.8 million decrease in LSC multiemployer pension plan obligation expense, partially offset by higher incentive compensation expense and higher selling expenses as a result of increased sales volume.

Interest expense, net of $11.2 million for the ~~payoff of~~six months ended June 30, 2021 increased $0.3 million as compared to the ~~Company’s term loan credit facility in 2019 and~~six months ended June 30, 2020. Interest expense, net increased primarily due to the $2.3 million gain on debt extinguishment recorded during the six months ended June 30, 2020, as further described in Note 8, Debt,, to the Unaudited Condensed Consolidated Financial Statements, partially ~~replaced~~offset by ~~the~~a lower Revolving Facility (as defined below) ~~that carries a lower interest rate.~~balance as of June 30, 2021 as compared to June 30, 2020.

Investment and other income, net of $2.3 million for ~~both~~ the six months ended June 30, ~~2020~~2021 increased $1.4 million primarily due to an increase in net pension plan income and other income.

The effective income tax rate was 24.9% for the six months ended June 30, ~~2019primarily consisted of net pension plan income and totaled $0.9 million and $1.1 million, respectively.~~

~~The effective income tax rate was~~2021, as compared to 51.7% for the six months ended June 30, ~~2020 compared to 31.2% for the six months ended June 30, 2019.~~2020. The ~~increase~~decrease in the effective income tax rate for the six months ended June 30, ~~2020~~2021 was primarily driven by the ~~Company’s~~favorable impact of a discrete adjustment associated with the vesting of the Company's equity awards during the six months ended June 30, 2021, along with lower earnings in 2020 and an inability to recognize a tax benefit on certain losses ~~and~~during the ~~impact of discrete tax adjustments on lower year to date earnings, partially offset by a lower forecasted annual effective tax rate.~~six months ended June 30, 2020.

Information by Segment

The following tables summarize net sales, income (loss) from operations, operating margin and certain items impacting comparability within each of the Company's operating segments and Corporate.

Capital Markets – Software Solutions


	Three Months Ended June 30,												Six Months Ended June 30,												Three Months Ended June 30,												Six Months Ended June 30,
	2020			2019			$ Change			% Change			2020			2019			$ Change			% Change			2021			2020			$ Change			% Change			2021			2020			$ Change			% Change
	(in millions, except percentages)																								(in millions, except percentages)
Net sales	$	31.8		$	32.2		$	(0.4	)		(1.2	%)	$	63.0		$	62.7		$	0.3			0.5	%	$	43.8		$	31.8		$	12.0			37.7	%	$	82.3		$	63.0		$	19.3			30.6	%
Income from operations		1.0			3.4			(2.4	)		(70.6	%)		2.8			3.5			(0.7	)		(20.0	%)		9.3			1.0			8.3		nm				15.8			2.8			13.0		nm
Operating margin		3.1	%		10.6	%								4.4	%		5.6	%								21.2	%		3.1	%								19.2	%		4.4	%
Items impacting comparability
Restructuring, impairment and other charges, net		0.5			0.7			(0.2	)		(28.6	%)		0.8			1.0			(0.2	)		(20.0	%)		0.1			0.5			(0.4	)		(80.0	%)		0.1			0.8			(0.7	)		(87.5	%)
Accelerated rent expense		0.1			—			0.1		nm				0.1			—			0.1		nm				—			0.1			(0.1	)		(100.0	%)		—			0.1			(0.1	)		(100.0	%)
Non-income tax, net																										(0.8	)		—			(0.8	)	nm				(0.7	)		—			(0.7	)	nm

nm – Not meaningful

Three ~~months ended~~Months Ended June 30, ~~2020~~2021 compared to the Three ~~months ended~~Months Ended June 30, ~~2019~~2020

Net sales for the three months ended June 30, ~~2020~~2021 were ~~$31.8~~$43.8 million, ~~a decrease~~an increase of ~~$0.4~~$12.0 million, or ~~1.2%~~37.7%, as compared to the three months ended June 30, ~~2019.~~2020. Net sales ~~decreased~~increased primarily due to ~~lower~~higher Venue, ~~dataroom volumes, partially offset by higher~~ ActiveDisclosure ~~volumes~~ and ~~price increases in~~ other compliance software ~~compliance solutions.~~solutions volumes.

Income from operations ~~decreased $2.4~~increased $8.3 million ~~or 70.6%,~~ to ~~$1.0~~$9.3 million for the three months ended June 30, ~~2020~~2021 as compared to ~~$3.4~~$1.0 million ~~for the three months ended June 30, 2019, primarily due to higher commission costs and an unfavorable sales mix.~~

~~Operating margins decreased from 10.6% for the three months ended June 30, 2019 to 3.1%~~ for the three months ended June 30, 2020, primarily due to higher ~~commission costs~~sales volumes, a favorable sales mix and ~~an unfavorable~~cost savings initiatives, partially offset by higher marketing expense.

Operating margins increased from 3.1% for the three months ended June 30, 2020 to 21.2% for the three months ended June 30, 2021, primarily due to higher sales ~~mix.~~volumes, a favorable sales mix and cost savings initiatives, partially offset by higher marketing expense.

Six Months Ended June 30, ~~2020~~2021 compared to the Six Months Ended June 30, ~~2019~~2020

Net sales for the six months ended June 30, ~~2020~~2021 were ~~$63.0~~$82.3 million, an increase of ~~$0.3~~$19.3 million, or ~~0.5%~~30.6%, as compared to the six months ended June 30, ~~2019.~~2020. Net sales increased primarily due to higher Venue, ActiveDisclosure ~~volumes~~ and ~~price increases in~~ other compliance software ~~compliance~~ solutions ~~partially offset by lower Venue dataroom~~ volumes.

Income from operations ~~decreased $0.7~~increased $13.0 million ~~or 20.0%,~~to $15.8 million for the six months ended June 30, 2021 as compared to $2.8 million for the six months ended June 30, 2020, ~~as compared to $3.5 million for the six months ended June 30, 2019,~~ primarily due to higher sales volumes, a favorable sales mix and cost savings initiatives, partially offset by higher selling and marketing expense, a higher allocation of overhead costs, higher incentive compensation expense and an ~~unfavorable sales mix.~~increase in depreciation and amortization expense.

Operating margins ~~decreased~~increased from ~~5.6% for the six months ended June 30, 2019 to~~ 4.4% for the six months ended June 30, 2020 to 19.2% for the six months ended June 30, 2021, primarily due to higher sales volumes, a favorable sales mix and cost savings initiatives, partially offset by higher selling and marketing expense, a higher allocation of overhead costs, higher incentive compensation expense and an ~~unfavorable sales mix.~~increase in depreciation and amortization expense.

Capital Markets – Compliance and ~~Communication~~Communications Management


	Three Months Ended June 30,												Six Months Ended June 30,												Three Months Ended June 30,												Six Months Ended June 30,
	2020			2019			$ Change			% Change			2020			2019			$ Change			% Change			2021			2020			$ Change			% Change			2021			2020			$ Change			% Change
	(in millions, except percentages)																								(in millions, except percentages)
Net sales	$	120.8		$	127.2		$	(6.4	)		(5.0	%)	$	219.9		$	229.2		$	(9.3	)		(4.1	%)	$	153.1		$	120.8		$	32.3			26.7	%	$	291.6		$	219.9		$	71.7			32.6	%
Income from operations		29.3			38.3			(9.0	)		(23.5	%)		50.7			53.0			(2.3	)		(4.3	%)		64.6			29.3			35.3		nm				123.7			50.7			73.0		nm
Operating margin		24.3	%		30.1	%								23.1	%		23.1	%								42.2	%		24.3	%								42.4	%		23.1	%
Items impacting comparability
Restructuring, impairment and other charges, net		16.9			2.5			14.4		nm				17.4			3.4			14.0		nm				0.6			16.9			(16.3	)		(96.4	%)		0.6			17.4			(16.8	)		(96.6	%)
COVID-19 related sales surcharges and expenses, net		(1.1	)		—			(1.1	)	nm				(0.8	)		—			(0.8	)	nm
COVID-19 related recoveries, net																										(0.1	)		(1.1	)		1.0			(90.9	%)		(0.3	)		(0.8	)		0.5			(62.5	%)
Accelerated rent expense		0.2			—			0.2		nm				0.2			—			0.2		nm				—			0.2			(0.2	)		(100.0	%)		—			0.2			(0.2	)		(100.0	%)
Non-income tax, net																										(0.1	)		—			(0.1	)	nm				(0.1	)		—			(0.1	)	nm

nm – Not meaningful

Three ~~months ended~~Months Ended June 30, ~~2020~~2021 compared to the Three ~~months ended~~Months Ended June 30, ~~2019~~2020

Net sales for the three months ended June 30, ~~2020~~2021 were ~~$120.8~~$153.1 million, ~~a decrease~~an increase of ~~$6.4~~$32.3 million, or ~~5.0%~~26.7%, as compared to the three months ended June 30, ~~2019.~~2020. Net sales ~~decreased~~increased primarily due to ~~lower~~higher transactional and compliance volumes.

Income from operations ~~decreased $9.0~~increased $35.3 million ~~or 23.5%,~~ to ~~$29.3~~$64.6 million ~~compared to the three months ended June 30, 2019, primarily due increased restructuring, impairment and other charges and lower volumes, partially offset by cost control initiatives.~~

~~Operating margins decreased from 30.1%~~ for the three months ended June 30, ~~2019~~2021 as compared to ~~24.3%~~$29.3 million for the three months ended June 30, 2020, primarily due to ~~the increased~~a decrease in restructuring, impairment and other charges, net, higher sales volumes, a favorable sales mix, cost savings initiatives and a decrease in depreciation and amortization expense,partially offset by higher selling expense as a result of increased sales volume and higher incentive compensation expense.

Operating margins increased from 24.3% for the three months ended June 30, 2020 to 42.2% for the three months ended June 30, 2021, primarily due to a decrease in restructuring, impairment and other charges, net, which ~~negatively impacted~~had a positive impact on the change in operating margin ~~by 12.0%~~of 10.6%, favorable sales mix, cost savings initiatives and a decrease in depreciation and amortization expense, partially offset by ~~cost control initiatives.~~higher selling expense and higher incentive compensation expense.

Six Months Ended June 30, ~~2020~~2021 compared to the Six Months Ended June 30, ~~2019~~2020

Net sales for the six months ended June 30, ~~2020~~2021 were ~~$219.9~~$291.6 million, ~~a decrease~~an increase of ~~$9.3~~$71.7 million, or ~~4.1%~~32.6%, ~~compared to the six months ended June 30, 2019, primarily due to lower transactional and compliance volumes.~~

~~Income from operations decreased $2.3 million, or 4.3%, to $50.7 million~~as compared to the six months ended June 30, 2020, primarily due to higher transactional and compliance volumes.

Income from operations increased $73.0 million to $123.7 million for the six months ended June 30, 2021 as compared to $50.7 million for the six months ended June 30, 2020, primarily due to a decrease in restructuring, impairment and other charges, net, higher sales volumes, a favorable sales mix,cost savings initiatives and ~~lower volumes,~~a decrease in depreciation and amortization expense, partially offset by ~~cost control initiatives.~~higher selling expense as a result of increased sales volume, a higher allocation of overhead costs and higher incentive compensation expense.

Operating margins ~~stayed consistent at~~increased from 23.1% for the six months ended June 30, 2020 ~~and 2019, as increased~~to 42.4% for the six months ended June 30, 2021, primarily due to a decrease in restructuring, impairment and other charges, net, which ~~negatively impacted~~had a positive impact on the change in operating margin ~~by 6.4%~~of 5.8%, ~~were~~a favorable sales mix, cost savings initiatives and a decrease in depreciation and amortization expense, partially offset by ~~cost control initiatives.~~higher selling expense, a higher allocation of overhead costs and higher incentive compensation expense.

Investment Companies – Software Solutions


	Three Months Ended June 30,											Six Months Ended June 30,											Three Months Ended June 30,												Six Months Ended June 30,
	2020			2019			$ Change		% Change			2020			2019			$ Change		% Change			2021			2020			$ Change			% Change			2021			2020			$ Change			% Change
	(in millions, except percentages)																						(in millions, except percentages)
Net sales	$	15.8		$	15.6		$	0.2		1.3	%	$	31.9		$	29.8		$	2.1		7.0	%	$	22.8		$	15.8		$	7.0			44.3	%	$	44.6		$	31.9		$	12.7			39.8	%
Income (loss) from operations		0.4			(2.5	)		2.9	nm				0.5			(6.2	)		6.7	nm
Income from operations																								3.5			0.4			3.1		nm				5.5			0.5			5.0		nm
Operating margin		2.5	%		(16.0	%)							1.6	%		(20.8	%)							15.4	%		2.5	%								12.3	%		1.6	%
Items impacting comparability
Restructuring, impairment and other charges, net		0.1			—			0.1	nm				0.4			0.1			0.3	nm				0.1			0.1			—			—			0.1			0.4			(0.3	)		(75.0	%)
Non-income tax, net																								(0.1	)		—			(0.1	)	nm				(0.1	)		—			(0.1	)	nm

nm – Not meaningful

Three ~~months ended~~Months Ended June 30, ~~2020~~2021 compared to the Three ~~months ended~~Months Ended June 30, ~~2019~~2020

Net sales for the three months ended June 30, ~~2020~~2021 were ~~$15.8~~$22.8 million, an increase of ~~$0.2~~$7.0 million, or ~~1.3%~~44.3%, as compared to the three months ended June 30, ~~2019.~~2020. Net sales increased primarily due to ~~increased FundSuiteArc~~higher ArcDigital and ArcPro volumes.

Income from operations increased ~~$2.9~~$3.1 million to ~~$0.4 million compared to an operating loss of $2.5~~$3.5 million for the three months ended June 30, ~~2019, primarily due~~2021 as compared to ~~cost control initiatives.~~

~~Operating margins increased from a negative margin of 16.0%~~$0.4 million for the three months ended June 30, ~~2019~~2020, primarily due to higher sales volumes.

Operating margins increased from 2.5% for the three months ended June 30, 2020 to 15.4% for the three months ended June 30, 2021, primarily due to higher sales volumes.

Six Months Ended June 30, 2021 compared to the Six Months Ended June 30, 2020

Net sales for the six months ended June 30, 2021 were $44.6 million, an increase of $12.7 million, or 39.8%, as compared to the six months ended June 30, 2020, primarily due to higher ArcDigital and ArcPro volumes.

Income from operations increased $5.0 million to $5.5 million for the six months ended June 30, 2021, as compared to $0.5 million for the six months ended June 30, 2020, primarily due to higher sales volumes, partially offset by higher selling expense as a result of increased sales volume, higher incentive compensation expense and a higher allocation of overhead costs.

Operating margins increased from 1.6% for the six months ended June 30, 2020 to 12.3% for the six months ended June 30, 2021, primarily due to higher sales volumes, partially offset by higher selling expense, higher incentive compensation expense and a higher allocation of overhead costs.

Investment Companies – Compliance and Communications Management


	Three Months Ended June 30,												Six Months Ended June 30,
	2021			2020			$ Change			% Change			2021			2020			$ Change			% Change
	(in millions, except percentages)
Net sales	$	47.8		$	85.6		$	(37.8	)		(44.2	%)	$	94.3		$	159.9		$	(65.6	)		(41.0	%)
Income from operations		2.1			2.0			0.1			5.0	%		8.4			4.1			4.3		nm
Operating margin		4.4	%		2.3	%								8.9	%		2.6	%
Items impacting comparability
Restructuring, impairment and other charges, net		1.9			4.8			(2.9	)		(60.4	%)		2.6			5.2			(2.6	)		(50.0	%)
COVID-19 related expenses (recoveries), net		—			2.1			(2.1	)		(100.0	%)		(0.7	)		2.6			(3.3	)	nm
Accelerated rent expense		—			0.3			(0.3	)		(100.0	%)		—			0.3			(0.3	)		(100.0	%)

nm – Not meaningful

Three Months Ended June 30, 2021 compared to the Three Months Ended June 30, 2020

Net sales for the three months ended June 30, 2021 were $47.8 million, a decrease of $37.8 million, or 44.2%, as compared to the three months ended June 30, 2020. Net sales decreased primarily due to lower mutual funds compliance volumes as a result of SEC Rule 30e-3 and 498A eliminating print requirements and lower transactional volumes.

Income from operations increased $0.1 million, or 5.0%, to $2.1 million for the three months ended June 30, 2021 as compared to $2.0 million for the three months ended June 30, 2020, primarily due to cost ~~control initiatives.~~savings as a result of the print platform consolidation, a decrease in restructuring, impairment and other charges, net, a decrease in COVID-19 related expenses, net, lower allocations of overhead costs and a reduction in depreciation and amortization expense, partially offset by lower sales volume and higher incentive compensation expense.

Operating margins increased from 2.3% for the three months ended June 30, 2020 to 4.4% for the three months ended June 30, 2021, primarily due to a decrease in restructuring, impairment and other charges, net, a decrease in COVID-19 related expenses, net, which combined to have a positive impact on the change in operating margin of 10.5%, cost savings as a result of the print platform consolidation, lower allocations of overhead costs and a reduction in depreciation and amortization expense, partially offset by lower sales volume and higher incentive compensation expense.

Six Months Ended June 30, ~~2020~~2021 compared to the Six Months Ended June 30, ~~2019~~2020

Net sales for the six months ended June 30, ~~2020~~2021 were ~~$31.9~~$94.3 million, ~~an increase~~a decrease of ~~$2.1~~$65.6 million, or ~~7.0%~~41.0%, as compared to the six months ended June 30, ~~2019,~~2020, primarily due to ~~increased FundSuiteArc~~lower mutual funds compliance volumes as a result of SEC Rule 30e-3 and 498A eliminating print requirements and lower transactional volumes.

Income from operations increased ~~$6.7~~$4.3 million to ~~$0.5 million compared to an operating loss of $6.2~~$8.4 million for the six months ended June 30, ~~2019, primarily due to cost control initiatives and higher sales volumes.~~

~~Operating margins increased from a negative margin of 20.8% for the six months ended June 30, 2019 to 1.6% for the three months ended June 30, 2020, primarily due to cost control initiatives.~~

~~Investment Companies – Compliance and Communication Management~~

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

$ Change

% Change

2020

2019

$ Change

% Change

(in millions, except percentages)

Net sales

$
85.6

$
83.9

$
1.7

2.0
%

$
159.9

$
166.8

$
(6.9
)

(4.1
%)
Income from operations

2.0

5.8

(3.8
)

(65.5
%)

4.1

12.5

(8.4
)

(67.2
%)
Operating margin

2.3
%

6.9
%

2.6
%

7.5
%

Items impacting comparability

Restructuring, impairment and other charges, net

4.8

0.5

4.3

nm

5.2

0.9

4.3

nm

COVID-19 related sales surcharges and expenses, net

2.1

—

2.1

nm

2.6

—

2.6

nm

Accelerated rent expense

0.3

—

0.3

nm

0.3

—

0.3

nm

~~nm – Not meaningful~~

~~Three months ended June 30, 2020~~2021, as compared to ~~the Three months ended June 30, 2019~~

Net sales for the three months ended June 30, 2020 were $85.6 million, an increase of $1.7 million, or 2.0%, compared to the three months ended June 30, 2019, primarily due to increased mutual fund transactional print volumes, partially offset by lower commercial and compliance print volumes.

Income from operations decreased $3.8 million, or 65.5%, to $2.0 million compared to the three months ended June 30, 2019, primarily due to increased restructuring, impairment and other charges and COVID-19 related net charges, partially offset by cost control initiatives.

Operating margins decreased from 6.9% for the three months ended June 30, 2019 to 2.3% for the three months ended June 30, 2020, primarily due to the increased restructuring, impairment and other charges and COVID-19 related net charges, which combined to negatively impact the change in operating margin by 7.5%, partially offset by cost control initiatives.

~~Six Months Ended June 30, 2020 compared to the Six Months Ended June 30, 2019~~

Net sales for the six months ended June 30, 2020 were $159.9 million, a decrease of $6.9 million, or 4.1%, compared to the six months ended June 30, 2019, primarily due to lower mutual fund compliance and commercial print volumes, partially offset by increased mutual fund transactional print volumes.

~~Income from operations decreased $8.4 million, or 67.2%, to~~ $4.1 million compared to the six months ended June 30, 2019, primarily due to the increased restructuring, impairment and other charges, COVID-19 related net charges and lower sales volume, partially offset by cost control initiatives.

~~Operating margins decreased from 7.5% for the six months ended June 30, 2019 to 2.6%~~ for the six months ended June 30, 2020, primarily due to cost savings as a result of the ~~increased~~consolidation of the print platform, lower allocations of overhead costs, a decrease in COVID-19 related expenses, net, a decrease in depreciation and amortization expense and a decrease in restructuring, impairment and other charges, net, partially offset by lower sales volume and higher incentive compensation expense.

Operating margins increased from 2.6% for the six months ended June 30, 2020 to 8.9% for the six months ended June 30, 2021, primarily due to a decrease in COVID-19 related expenses, net, a decrease in restructuring, impairment and other charges, net, which combined to ~~negatively~~have a positive impact on the change in operating margin ~~by 4.3%~~of 6.3%, cost savings as a result of the consolidation of the print platform consolidation, lower allocations of overhead costs and a decrease in depreciation and amortization expense, partially offset by ~~cost control initiatives.~~lower sales volume and higher incentive compensation expense.

Corporate

The following table summarizes unallocated operating expenses and certain items impacting comparability within the activities presented as Corporate:


	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020			2019		2021		2020		2021		2020
	(in millions)									(in millions)
Operating expenses	$	28.8	$	11.6	$	42.3		$	22.8	$	17.5	$	28.8	$	40.5	$	42.3
Items impacting comparability
Share-based compensation expense		3.1		3.6		5.4			5.1		5.9		3.1		9.0		5.4
Restructuring, impairment and other charges, net		2.8		0.1		4.4			0.5		0.1		2.8		0.2		4.4
LSC multiemployer pension plans obligation		12.3		—		12.3			—		0.2		12.3		7.5		12.3
COVID-19 related sales surcharges and expenses, net		0.1		—		0.1			—
COVID-19 related expenses, net											—		0.1		—		0.1
eBrevia contingent consideration		—		—		(0.4	)		—		—		—		—		(0.4	)
Loss on sale of Language Solutions business		—		2.8		—			2.8
Investor-related expenses		—		0.5		—			1.5
Spin-off related transaction expenses		—		—		—			0.4

Three ~~months ended~~Months Ended June 30, ~~2020~~2021 compared to the Three ~~months ended~~Months Ended June 30, ~~2019~~2020

Corporate operating expenses for the three months ended June 30, ~~2020 increased $17.2~~2021 decreased $11.3 million ~~versus~~as compared to the ~~same period of 2019,~~three months ended June 30, 2020, primarily due to ~~the~~a decrease in LSC multiemployer pension ~~plans~~plan obligation ~~increased~~expense, a decrease in restructuring, impairment and other charges, net and ~~higher healthcare benefit claims,~~a decrease in depreciation and amortization expense, partially offset by ~~the loss on sale of the Language Solutions business recorded in the second quarter of 2019.~~higher incentive compensation expense and higher share-based compensation expense.

Six Months Ended June 30, ~~2020~~2021 compared to the Six Months Ended June 30, ~~2019~~2020

Corporate operating expenses for the six months ended June 30, ~~2020 increased $19.5~~2021 decreased $1.8 million ~~or 85.5%, versus~~as compared to the ~~same period in 2019,~~six months ended June 30, 2020, primarily due to ~~the~~a decrease in LSC multiemployer pension ~~plans obligation, increased~~plan obligations expense, a decrease in restructuring, impairment and other charges, net and ~~higher healthcare benefit claims,~~a decrease in depreciation and amortization expense, partially offset by ~~the loss on sale of the Language Solutions business recorded in the second quarter of 2019~~higher incentive compensation expense and ~~lower investor-related expenses.~~higher share-based compensation expense.

Non-GAAP Measures

The Company believes that certain Non-GAAP measures, such as Non-GAAP adjusted EBITDA (“Adjusted EBITDA”), provide useful information about the Company’s operating results and enhance the overall ability to assess the Company’s financial performance. The Company uses these measures, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. Adjusted EBITDA allows investors to make a more meaningful comparison between the Company’s core business operating results over different periods of time. The Company believes that Adjusted EBITDA, when viewed with the Company’s results under GAAP and the accompanying reconciliations, provides useful information about the Company’s business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by factors such as ~~depreciation and amortization methods,~~ historic cost and age of assets, restructuring, impairment and other charges ~~acquisition-related expenses, gain or loss on certain equity investments and asset sales~~ as well as other items, as described below, the Company believes that Adjusted EBITDA can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated.

Adjusted EBITDA is not presented in accordance with GAAP and has important limitations as an analytical tool. These measures should not be considered as a substitute for analysis of the Company’s results as reported under GAAP. In addition, these measures are defined differently by different companies and, accordingly, such measures may not be comparable to similarly-titled measures of other companies.

In addition to the factors listed above, the following items are excluded from Adjusted EBITDA:

•



Share-based compensation expense. Although share-based compensation is a key incentive offered to certain of the Company’s employees, business performance is evaluated excluding share-based compensation expenses. Depending upon the size, timing and the terms of grants, non-cash compensation expense may vary but will recur in future periods.

A reconciliation of ~~GAAP~~ net earnings (loss) to Adjusted EBITDA for the three and six months ended June 30, ~~2020~~2021 and ~~2019 for these adjustments~~2020 is presented in the following table:

Restructuring, impairment and other charges, net—The three months ended June 30, 2021 included $2.7 million of employee termination costs. The six months ended June 30, 2021 included $2.9 million of employee termination costs and $0.6 million for other restructuring charges. The three months ended June 30, 2020 included $12.3 million of employee termination costs, impairment charges of $12.1 million on operating lease ROU assets in certain locations and $0.7 million for other ~~charges~~restructuring costs, primarily related to the realignment of the ~~Company’s~~Company's operating segments. The six months ended June 30, 2020 included $13.9 million of employee termination costs, impairment charges of $12.1 million on operating lease ROU assets in certain locations and $2.2 million for other charges, primarily related to the realignment of the Company’s operating segments. ~~The three and six months ended June 30, 2019, primarily included employee termination costs of $3.8 million and $5.8 million, respectively.~~

Share-based compensation expense—Included charges of ~~$3.1~~$5.9 million and ~~$3.6~~$3.1 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$5.4~~$9.0 million and ~~$5.1~~$5.4 million for the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

LSC multiemployer pension plans obligation—Included charges of $0.2 million and $7.5 million for the three and six months ended June 30, 2021, respectively, and a charge of $12.3 million for both the three and six months ended June 30, 2020 for the ~~Company’s~~Company's accrual related to ~~LSC’s~~the LSC MEPP Liabilities. Refer to Note 7, Commitments and Contingencies, for additional information.

~~COVID-19 related sales surcharges and expenses, net—~~Loss on equity investment—Included ~~net charges~~an unrealized loss of ~~$1.1~~$0.2 million for the six months ended June 30, 2021.

Non-income tax, net—Included income of $1.0 million and ~~$1.9~~$0.9 million for the three and six months ended June 30, 2021, respectively, as a result of a decrease in the Company’s accrual for certain estimated non-income tax exposures. Refer to Note 7, Commitments and Contingencies, for additional information.

COVID-19 related (recoveries) expenses, net—The three and six months ended June 30, 2021 included recoveries of $0.1 million and $1.0 million, respectively, primarily related to an insurance reimbursement of COVID-19 related expenses. The three and six months ended June 30, 2020 included charges of $1.1 million and $1.9 million, respectively, primarily related to incremental vendor costs, premium wages and incentive compensation paid to certain employees, net of COVID-19 related sales surcharges invoiced to certain customers.

Accelerated rent expense—Included charges of $0.6 million for both the three and six months ended June 30, 2020 for the acceleration of rent expense associated with ~~leases~~ abandoned ~~during the second quarter of 2020.~~operating leases.

eBrevia contingent consideration—Included a gain of $0.4 million for the six months ended June 30, 2020 as a result of a decrease in the ~~estimated~~ contingent consideration to be paid to the former owners of eBrevia.

~~Loss on sale of Language Solutions business—Included charges of $2.8 million for both the three and six months ended June 30, 2019 for the estimated payment of amounts related to the July 2018 disposition of the Language Solutions business.~~

~~Investor-related expenses—~~Included charges of $0.5 million and $1.5 million for the three and six months ended June 30, 2019, respectively, primarily related to third-party advisory, consulting and legal fees related to non-routine investor matters.

~~Spin-off related transaction expenses—Included charges of $0.4 million for the six months ended June 30, 2019 primarily related to third-party consulting fees.~~

The Company believes it has sufficient liquidity to support its ongoing operations and to invest in future growth to create value for its shareholders. Cash on hand, operating cash flows and the Company’s $300.0 million senior secured revolving credit facility (the “Revolving Facility”) are the primary sources of liquidity and are expected to be used for, among other things, payment of interest and principal on the Company’s debt obligations, capital expenditures necessary to support productivity improvement and growth, acquisitions and completion of restructuring programs.

The Company maintains cash pooling structures that enable participating international locations to draw on the pools’ cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce the Company’s short-term borrowing costs or for other purposes. The Company has the ability to repatriate any previously taxed foreign cash associated with the foreign earnings subject to the U.S. parent with minimal tax consequences. The Company maintains its assertion of indefinite reinvestment on all foreign earnings and other outside basis differences to indicate that the Company remains indefinitely reinvested in operations outside of the U.S., with the exception of the previously taxed foreign cash already subject to U.S. tax. The Company ~~repatriated excess~~did not make cash ~~at its~~ ~~foreign subsidiaries to the U.S.~~repatriations during ~~the year ended December 31, 2019~~2020 and does not plan to make any cash repatriations during ~~2020.~~2021.

Cash and cash equivalents ~~of $37.4~~were $39.9 million at June 30, ~~2020~~2021, which included ~~$32.7~~$33.2 million in the U.S. and ~~$4.7~~$6.7 million at international locations.

The following describes the Company’s cash flows for the six months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

Operating cash inflows and outflows are largely attributable to sales of the Company’s services and products as well as recurring expenditures for labor, rent, raw materials and other operating activities.

Net cash used in operating activities was ~~$23.9~~$7.7 million for the six months ended June 30, ~~2020~~2021 compared to ~~$65.3~~$23.9 million used in the six months ended June 30, 2020. The decrease in cash used in operating activities was primarily due to the significant increase in net earnings, partially offset by a cash outflow for accrued liabilities and other as well as prepaid expenses and other current assets and an increase in income taxes paid. Accounts payable and accrued liabilities and other decreased operating cash flows by $15.3 million for the six months ended June 30, 2019. The decrease in cash used in operating activities of $41.4 million was primarily due to a decrease in income taxes paid and timing of supplier payments. Cash paid for income taxes, net of refunds, decreased by $16.4 million to $1.2 million for the six months ended June 30, 2020, from $17.6 million for the six months ended June 30, 2019 due primarily to deferrals of 2020 tax payments provided under the Coronavirus Aid, Relief, and Economic Security Act and increased 2019 tax payments on the gain from the 2018 sale of the Language Solution business. ~~Accounts payable and accrued liabilities and other~~ ~~increased operating cash flows by $20.7 million for the six months ended June 30, 2020,~~2021, as compared to a ~~$14.3~~$20.7 million ~~decrease~~increase in operating cash flows for the six months ended June 30, ~~2019.~~2020, primarily due to higher incentive compensation and commission payments and payments related to the LSC MEPP liability. The Company's income tax payments increased by $23.1 million to $24.3 million for the six months ended June 30, 2021 from $1.2 million, primarily due to federal and state income tax payments made in the six months ended June 30, 2021. Prepaid expense and other current assets decreased operating cash flows by $5.3 million for the six months ended June 30, 2021, as compared to $1.6 million for the six months ended June 30, 2020 due to timing of payments. The Company's interest payments decreased by $3.1 million to $10.6 million for the six months ended June 30, 2021 from $13.7 million, primarily due to a reduction in interest payments subsequent to the Company's partial repurchase and retirement of the Notes during the six months ended June 30, 2020.

Net cash used in investing activities was $17.7 million for the six months ended June 30, 2021, which consisted of capital expenditures of $17.7 million, primarily driven by investments in software development. The Company expects that capital expenditures for 2021 will be approximately $45 million.

Net cash used in investing activities was $4.2 million for the six months ended June 30, 2020,~~, and~~ which primarily consisted of capital expenditures of $15.7 million, mostly driven by ~~investment~~investments in software development, partially offset by $12.8 million of proceeds from the sale of one of the ~~Company’s~~Company's investments in equity securities. ~~The Company expects that capital expenditures for 2020 will be approximately $30 million.~~

Net cash used in ~~investing~~financing activities was ~~$28.7~~$9.9 million for the six months ended June 30, ~~2019~~,2021. During the six months ended June 30, 2021, the Company received $228.0 million of proceeds from the Revolving Facility borrowings, partially offset by $218.0 million of payments on the Revolving Facility borrowings. The Company’s common stock repurchases for the six months ended June 30, 2021 totaled $19.1 million, which included $10.5 million of repurchases under the stock repurchase program and ~~primarily consisted~~$8.6 million associated with vesting of ~~capital expenditures of $26.2 million, mostly driven by an investment in digital printers and investments in software development.~~

~~Cash Flows Provided by Financing Activities~~the Company employees’ equity awards.

Net cash provided by financing activities was $49.5 million for the six months ended June 30, 2020. During the six months ended June 30, 2020, ~~was $49.5 million. During the~~ ~~six months ended June 30, 2020~~,the Company received $240.5 million of proceeds from the Revolving Facility borrowings, partially offset by $120.5 million of payments on the Revolving Facility borrowings, as well as utilized $63.3 million for the purchase and retirement of certain of the Company’s Notes. The Company’s common stock repurchases for the six months ended June 30, 2020 totaled $5.3 million.

~~Net cash provided by financing activities was $54.0 million for the~~ ~~six months ended June 30, 2019. During the~~ ~~six months ended June 30, 2019~~, the Company received $337.0 million of proceeds from the Revolving Facility borrowings, partially offset by $281.5 million of payments on the Revolving Facility borrowings. The Company’s common stock repurchases for the ~~six months ended June 30, 2019~~ ~~totaled $1.3 million.~~

The following table quantifies the Company's future payments related to its total debt and interest expense, which were impacted by the purchase and retirement of $66.5 million of Senior Notes in the first quarter of 2020, as further described below, as well as the Company's borrowings under the Revolving Facility in the normal course of business. The Company’s debt maturity schedule and related interest amounts as of June 30, 2020 are shown in the table below:

The Company’s debt as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 consisted of the following (in millions):

8.25% Senior Notes Due 2024— On September 30, 2016, DFIN (the “Parent”) issued $300.0 million of 8.25% senior unsecured notes due October 15, 2024 (the “Notes”). The Company’s Notes, with interest payable semi-annually on April 15 and October 15, were issued pursuant to an indenture (the “Indenture”) where certain wholly-owned domestic subsidiaries of the Company guarantee the Notes (the “Guarantors”). In the first quarter of 2020, the Company purchased and retired $66.5 million (notional amount) of the Notes at an average price of 95.25 and recognized a pre-tax gain on the extinguishment of debt of $2.3 million, which was net of unamortized debt issuance costs, and is recorded within interest expense, net in the Unaudited Condensed Consolidated Statements of Operations. The Company may redeem the Notes, in whole or in part, on or after October 15, 2021, but prior to October 14, 2022 at the redemption price of 102.063%, and at the redemption price of 100.000% beginning on October 15, 2022 and thereafter, in each case, plus accrued and unpaid interest, if any.

The Notes are fully and unconditionally as well as jointly and severally guaranteed, on an unsecured basis, by the Guarantors, which are comprised of each of the Company’s existing and future direct and indirect wholly-owned U.S. subsidiaries that guarantee the Company’s obligations under the Credit Facilities, including Donnelley Financial, LLC and DFS International Holding, Inc. The Notes are not guaranteed by the Company’s foreign subsidiaries or unrestricted subsidiaries (“Nonguarantors”). The Indenture governing the Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and (9) designations of unrestricted subsidiaries. Each of these covenants is subject to important exceptions and qualifications.

The Notes and the related guarantees are the Company and the Guarantors’, respective, senior unsecured obligations and rank equally in right of payment to all present and future senior debt, including the obligations under the Company’s Credit Facilities, senior in right of payment to all present and future subordinated debt, and effectively subordinated in right of payment to any of the Company and the Guarantors’ secured debt, to the extent of the value of the assets securing such debt.

The guarantee of the Notes by a subsidiary guarantor will be automatically released under certain situations, including upon the sale or disposition of such subsidiary guarantor to a person that is not DFIN or a subsidiary guarantor of the notes, the liquidation or dissolution of such subsidiary guarantor, and if such subsidiary guarantor is released from its guarantee obligations under the Company’s Credit Facilities.

The following summarized financial information of both the Parent and the Guarantors is presented on a combined basis; intercompany balances and transactions between the Parent and the Guarantors have been eliminated and the summarized financial information does not reflect investments of the Parent or the Guarantors in Nonguarantors. The Parent’s or Guarantor’s amounts due from, amounts due to, and transactions with Nonguarantor are disclosed below:

During the six months ended June 30, ~~2020,~~2021, Nonguarantors intercompany revenue and cost of sales totaled ~~$3.4~~$4.8 million each. As of June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, an intercompany short-term note receivable due to Nonguarantors from the Parent totaled ~~$3.5~~$33.0 million and ~~$12.0~~$27.5 million, respectively, and an intercompany accounts receivable due to Parent from Nonguarantors totaled $2.6 million and $3.6 million, respectively.

Credit Agreement—On May 27, 2021, the Company completed the Amended and Restated Credit Agreement to, among other things, extend the maturity of the $300 million Revolving Facility to May 27, 2026 and modify certain financial maintenance and negative covenants in the Credit Agreement. The Amended and Restated Credit Agreement provides for a $200 million Delayed-Draw Term Loan A Facility. The proceeds may only be used to redeem or repurchase the Company's Notes, which become redeemable, in whole or in part, on or after October 15, 2021, at the redemption price of 102.063%, plus accrued and unpaid interest, if any.

The Credit Agreement contains a number of covenants, including, but not limited to, a minimum Interest Coverage Ratio and the Consolidated Net Leverage Ratio, as defined in and calculated pursuant to the Credit Agreement, that, in part, restrict the Company’s ability to incur additional indebtedness, create liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Credit Agreement generally allows annual dividend payments of up to $20.0 million in aggregate, though additional dividends may be allowed subject to certain conditions. Each of these covenants is subject to important exceptions and qualifications. Refer to Note 8, Debt, for additional information.

As of June 30, ~~2020,~~2021, there was $10.0 million of borrowings outstanding ~~borrowings~~ under the Revolving Facility ~~totaled $120.0 million. The maturity date~~and $2.3 million of outstanding letters of credit that reduced the availability under the Revolving ~~Facility is December 18, 2023~~Facility.. Based on the Company’s results of operations for the twelve months ended June 30, ~~2020~~2021 and existing debt, the Company would have had the ability to utilize ~~an incremental $180.0~~the remaining $287.7 million of the $300.0 million Revolving Facility and not have been in violation of the terms of the agreement.

The current availability under the Revolving Facility and net available liquidity as of June 30, ~~2020~~2021 is shown in the table below:

The Company was in compliance with its debt covenants as of June 30, ~~2020,~~2021, and expects to remain in compliance based on management’s estimates of operating and financial results for ~~2020~~2021 and the foreseeable future. However, declines in market and economic conditions or demand for certain of the Company’s services and products could impact the Company’s ability to remain in compliance with its debt covenants in future periods.

The failure of a financial institution supporting the Revolving Facility would reduce the size of the Company’s committed facility unless a replacement institution was added. As of June 30, ~~2020,~~2021, the Revolving Facility is supported by ~~sixteen~~fifteen U.S. and international financial institutions. As of June 30, ~~2020,~~2021, the Company had ~~$3.6~~$3.4 million in outstanding letters of credit and bank ~~guarantees, of which none reduced the availability under the Revolving Facility.~~ guarantees.

As of June 30, ~~2020,~~2021, the Company met all the conditions required to borrow under the Revolving Facility, and management expects the Company to continue to meet the applicable borrowing conditions.

The Company’s acquisition of eBrevia closed on December 18, 2018. During the year ended December 31, 2019, the Company paid $4.5 million related to the acquisition of eBrevia. An additional $1.9 million of the purchase price, which was held in the event of potential claims, was paid during the ~~three months~~year ended ~~June 30,~~December 31, 2020 pursuant to the terms of the acquisition agreement.

For a discussion of certain litigation involving the Company, see Note 7, Commitments and Contingencies, to the Unaudited Condensed Consolidated Financial Statements.

~~The Company has updated its accounting policies related to valuation reserves associated with accounts receivable in conjunction with the adoption of ASU 2016-13, as further described in Note 1,~~ ~~Overview, Basis of Presentation and Significant Accounting Policies, to the Unaudited Condensed Consolidated Financial Statements. Except for the adoption of ASU 2016-13, there~~There were no ~~other~~ changes to critical accounting policies and estimates from those disclosed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” of the Annual Report.

The Company performs its goodwill impairment tests annually as of October 31 or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company also performs an interim review for indicators of impairment each quarter to assess whether an interim impairment review is required for any reporting unit.43

As part of its interim reviews, management analyzed potential changes in the value of individual reporting units based on each reporting unit’s operating results for the period compared to expected results used in the previous impairment test. In addition, management considers how other key assumptions, including discount rates

Recently adopted accounting standards and ~~expected long-term growth rates, used in the last annual impairment test, could be impacted by changes in market conditions and economic events. Based~~their effect on the qualitative interim assessment in the second quarter of 2020, management concluded that as of June 30, 2020, no events or changes in circumstances indicated that it was more likely than not that the fair value for any reporting unit had declined below its carrying amount.

~~As discussed~~Company’s Unaudited Condensed Consolidated Financial Statements are described in Note 1, Overview, Basis of Presentation and Significant Accounting Policies to the Unaudited Condensed Consolidated Financial Statements, during the first quarter of 2020, management realigned the Company’s operating segments. DFIN’s four operating and reportable segments are the same as its reporting units: CM-SS; CM-CCM; IC-SS; and IC-CCM (“Current Structure”). The Company previously had three reporting units: Capital Markets, Investment Markets and International (“Previous Structure”), that each had goodwill.

As a result of the new segmentation, a goodwill impairment analysis was completed for the Previous Structure during the first quarter of 2020, before the reallocation of goodwill to the Current Structure. Each of the reporting units under the Previous Structure were reviewed for impairment as of March 31, 2020 using a quantitative assessment, where the estimated fair value of each reporting unit was compared to its carrying amount, including goodwill. If the carrying amount (“book value”) of a reporting unit exceeds its estimated fair value, an impairment loss is generally recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. As a result of the March 31, 2020 goodwill impairment analysis under the Previous Structure, the Company did not recognize any goodwill impairment as the estimated fair values of all reporting units exceeded their respective carrying amounts.

In addition to the impairment analysis under the Previous Structure, a goodwill impairment analysis was completed during the first quarter under the Current Structure. Goodwill was also reassigned within the Current Structure using a relative fair value approach.

~~Quantitative Assessment~~—The analysis performed during the first quarter of 2020 included estimating the fair value of each reporting unit using both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipating future cash flows, discount rates and the allocation of shared or corporate items. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry grouping. The Company weighted both the income and market approach equally to estimate the concluded fair value of each reporting unit.

The determination of fair value in the quantitative assessment requires the Company to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies; the discount rate; terminal growth rates; and forecasts of revenue; operating income; depreciation and amortization; restructuring charges and capital expenditures.

~~Goodwill Impairment Assumptions~~—Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting units, the amount of goodwill impairment charge, or both.

One measure of the sensitivity of the amount of goodwill impairment charges to key assumptions is the amount by which each reporting unit “passed” (fair value exceeds carrying amount, a “cushion”) or “failed” (the carrying amount exceeds fair value) the quantitative assessment.

As a result of the March 31, 2020 goodwill impairment analysis under the Current Structure, the Company did not recognize any goodwill impairment as the estimated fair values of all reporting units exceeded their respective carrying amounts. CM-SS, CM-CCM and IC-SS all had fair values far in excess of book values; however, the IC-CCM reporting unit’s fair value exceeded its book value by approximately 3%. The small amount of cushion between book value and fair value of the IC-CCM reporting unit is primarily driven by the projected negative impact of regulatory developments for certain services and products. As of March 31, 2020 and June 30, 2020, goodwill allocated to the IC-CCM reporting unit was $40.6 million.

Generally, changes in estimates of expected future cash flows would have a similar effect on the estimated fair value of the reporting unit. That is, a 1.0% decrease in estimated annual future cash flows would decrease the estimated fair value of the reporting unit by approximately 1.0%. The estimated long-term net sales growth rate can have a significant impact on the estimated future cash flows, and therefore, the fair value of each reporting unit. Holding all other assumptions constant, a 1.0% decrease in the long-term net sales growth rate would not have resulted in an impairment loss for any of the Company’s reporting units. Of the other key assumptions that impact the estimated fair values, most reporting units have the greatest sensitivity to changes in the estimated discount rate. The discount rate for the IC-CCM reporting unit was 12.0%. Holding all other assumptions constant, a 1.0% increase in the estimated discount rate would have resulted in the fair value of the IC-CCM reporting unit approximating its book value. A 1.0% increase in the discount rate would not have resulted in an impairment for any of the other reporting units under the Current Structure.

The Company believes its estimates of future cash flows and discount rates are reasonable, but future changes in the underlying assumptions could occur due to the inherent uncertainty in making such estimates. Additionally, the COVID-19 pandemic has created significant uncertainty in the macroeconomic and business outlook. Further price deterioration, lower volumes, additional unfavorable regulatory developments or lower than expected profitability of software products still in development could have a significant impact on the fair values of the reporting units. Further declines in the Company’s operating results due to challenging economic conditions, an unfavorable industry or macroeconomic development or other adverse changes in market conditions could change one of the critical assumptions or estimates the Company uses to calculate the fair value of its reporting units which could result in a decrease in fair value and require the Company to record a goodwill impairment charge in future periods.

~~Recently issued accounting standards and their estimated effect on the Company’s condensed consolidated financial statements are described in Note 1,~~ ~~Overview, Basis of Presentation and Significant Accounting Policies~~, to the Unaudited Condensed Consolidated Financial Statements.

The Company has made forward-looking statements in this Quarterly Report on Form 10-Q within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of the Company. Generally, forward-looking statements include information concerning possible or assumed future actions, events, or results of operations of the Company.

These statements may include words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “continues,” “believes,” “may,” “will,” “goals” and variations of such words and similar expressions are intended to identify the Company’s forward-looking statements.

Forward-looking statements are not guarantees of performance. The following important factors, in addition to those discussed elsewhere in this Quarterly Report on Form 10-Q, could cause the Company’s actual results to differ materially from those indicated in any such forward-looking statements. These factors include, but are not limited to:

Consequently, readers of the Quarterly Report on Form 10-Q should consider these forward-looking statements only as the Company’s current plans, estimates and beliefs. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. The Company undertakes no obligation to update or revise any forward-looking statements in this Quarterly Report on Form 10-Q to reflect any new events or any change in conditions or circumstances.

There have been no significant changes to the Company’s market risk previously disclosed in the ~~Company’s~~ Annual Report.

Management, together with the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(b) and Rule 15d-15(e) of the ~~Securities~~ Exchange ~~Act of 1934)~~Act) as of June 30, ~~2020.~~2021. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, ~~2020.~~2021.

There were no changes in the Company’s internal control over financial reporting (as defined in ~~Rule~~Rules 13a-15(f) and 15d-15(f) ~~under~~of the Exchange Act) during the quarter ended June 30, ~~2020~~2021 that have materially affected or are reasonably likely to materially affect, ~~our~~the Company’s internal control over financial reporting.

For a discussion of certain litigation involving the Company, see Note 7, Commitments and Contingencies, to the Unaudited Condensed Consolidated Financial Statements.

There were no material changes during the three months ended June 30, ~~2020~~,2021 to the risk factors identified in the ~~Company’s~~ Annual ~~Report as well as in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as filed with the SEC on May 7, 2020, except as noted below.~~Report.

~~The Company may become liable for funding obligations arising from multi-employer pension plan obligations of the Company’s former affiliates.~~

On April 13, 2020, LSC announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. LSC and the Company separated from RRD in a tax-free distribution to shareholders of RRD effective October 1, 2016. In the second quarter of 2020, the Company became aware that, subsequent to the LSC Chapter 11 Filing, LSC failed to make certain required monthly and quarterly withdrawal liability payments to multiemployer pension plans from which RRD had withdrawn prior to the Separation. Responsibility for the pre-Separation withdrawal liability obligations, resulting in such monthly and quarterly payment obligations, had been assigned to LSC pursuant to the Separation Agreement, while RRD retained responsibility for certain other pre-Separation withdrawal liability assessments against RRD, however, the Company and RRD remain jointly and severally liable for the LSC MEPP Liabilities pursuant to laws and regulations governing multiemployer pension plans and the Company remains jointly and severally liable for the RRD MEPP Liabilities. If LSC and RRD fail to make required payments in respect of the LSC MEPP Liabilities or RRD fails to make required payments in respect of the RRD MEPP Liabilities, the Company may become obligated to make such payments, which payment obligations may negatively impact the Company’s cash flows and results of operations. In addition, the Company’s MEPP Liabilities could also be affected by the financial stability of other employers participating in such plans and decisions by those employers to withdraw from such plans in the future. See Note 7, ~~Commitments and Contingencies~~44~~, to the Unaudited Condensed Consolidated Financial Statements for more information about these potential MEPP Liabilities.~~


Delaware		36-4829638
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

35 West Wacker Drive, Chicago, Illinois		60601
(Address of principal executive offices)		(Zip code)


Title of each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (Par Value $0.01)	DFIN	NYSE


~~Part I~~
~~FINANCIAL INFORMATION~~		Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		3
Part I
FINANCIAL INFORMATION
Item 1:	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020	34
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020	45
	Condensed Consolidated Balance Sheets as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020	56
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, ~~2020~~2021 and ~~2019~~2020	67
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020	78
	Notes to Condensed Consolidated Financial Statements	910
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2726
Item 3:	Quantitative and Qualitative Disclosure About Market Risk	4844
Item 4:	Controls and Procedures	4844


Part II
OTHER INFORMATION
Item 1:	Legal Proceedings	4844
Item 1A:	Risk Factors	4844
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	4945
Item 3:	Defaults Upon Senior Securities	4945
Item 4:	Mine Safety Disclosures	4945
Item 5:	Other Information	4945
Item 6:	Exhibits	5046
Signatures		5450


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	June 30, 2020			December 31, 2019
ASSETS
Cash and cash equivalents	$	37.4		$	17.2
Receivables, less allowances for expected losses of $11.5 in 2020 (2019 - $7.7)		250.4			161.4
Inventories		11.0			11.1
Prepaid expenses and other current assets		16.5			15.9
Assets held for sale		—			5.6
Total current assets		315.3			211.2
Property, plant and equipment, net		19.0			17.5
Right-of-use assets		68.0			80.7
Software, net		54.9			55.0
Goodwill		449.9			450.3
Other intangible assets, net		15.4			21.9
Deferred income taxes, net		13.3			9.0
Other noncurrent assets		28.0			41.3
Total assets	$	963.8		$	886.9
LIABILITIES
Accounts payable	$	54.3		$	58.5
Accrued liabilities		136.7			121.0
Short-term debt		0.5			—
Total current liabilities		191.5			179.5
Long-term debt		350.2			296.0
Deferred compensation liabilities		19.7			20.0
Pension and other postretirement benefits plan liabilities		55.7			58.8
Noncurrent lease liabilities		59.8			57.9
Other noncurrent liabilities		16.5			6.1
Total liabilities		693.4			618.3
Commitments and Contingencies (Note 7)
EQUITY
Preferred stock, $0.01 par value
Authorized: 1.0 shares; Issued: NaN		—			—
Common stock, $0.01 par value
Authorized: 65.0 shares;
Issued and outstanding: 34.9 shares and 33.8 shares in 2020 (2019 - 34.5 shares and 34.2 shares)		0.3			0.3
Treasury stock, at cost: 1.1 shares in 2020 (2019 - 0.3 shares)		(9.5	)		(4.2	)
Additional paid-in capital		230.6			225.2
Retained earnings		134.2			131.9
Accumulated other comprehensive loss		(85.2	)		(84.6	)
Total equity		270.4			268.6
Total liabilities and equity	$	963.8		$	886.9

	Common Stock				Treasury Stock					Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Equity
	Shares		Amount		Shares		Amount
Balance at March 31, 2020		34.8	$	0.3		1.0	$	(9.4	)	$	227.5	$	135.5		$	(86.8	)	$	267.1
Net loss		—		—		—		—			—		(1.3	)		—			(1.3	)
Other comprehensive income		—		—		—		—			—		—			1.6			1.6
Share-based compensation		—		—		—		—			3.1		—			—			3.1
Issuance of share-based awards, net of withholdings and other		0.1		—		0.1		(0.1	)		—		—			—			(0.1	)
Balance at June 30, 2020		34.9	$	0.3		1.1	$	(9.5	)	$	230.6	$	134.2		$	(85.2	)	$	270.4

	Common Stock				Treasury Stock					Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss			Total Equity
	Shares		Amount		Shares		Amount
Balance at March 31, 2019		34.4	$	0.3		0.2	$	(3.6	)	$	218.0	$	92.9	$	(80.1	)	$	227.5
Net earnings		—		—		—		—			—		17.3		—			17.3
Other comprehensive income		—		—		—		—			—		—		0.8			0.8
Share-based compensation		—		—		—		—			3.6		—		—			3.6
Issuance of share-based awards, net of withholdings and other		0.1		—		—		(0.1	)		—		—		—			(0.1	)
Balance at June 30, 2019		34.5	$	0.3		0.2	$	(3.7	)	$	221.6	$	110.2	$	(79.3	)	$	249.1

	June 30, 2020		December 31, 2019
Raw materials and manufacturing supplies	$	4.2	$	3.9
Work in process		6.8		7.2
Total	$	11.0	$	11.1

	June 30, 2020
Balance, beginning of year	$	7.7
Adoption of ASU 2016-13		0.5
Provisions charged to expense and reclassifications		4.3
Write-offs and other		(1.0	)
Balance, end of period (a)	$	11.5

Balance at January 1, 2019	$	12.0
Deferral of revenue		25.1
Revenue recognized		(25.2	)
Balance at June 30, 2019	$	11.9

	Net book value at March 31, 2020		Foreign exchange and other adjustments		Net book value at June 30, 2020
Capital Markets - Software Solutions	$	103.6	$	—	$	103.6
Capital Markets - Compliance and Communication Management		252.5		—		252.5
Investment Companies - Software Solutions		53.0		0.2		53.2
Investment Companies - Compliance and Communication Management		40.6		—		40.6
Total	$	449.7	$	0.2	$	449.9

For the year ending December 31,	Amount
2020 (excluding the six months ended June 30, 2020)	$	5.7
2021		1.0
2022		1.0
2023		0.9
2024		0.7
2025 and thereafter		6.1
Total	$	15.4

Six Months Ended June 30, 2019	Employee Terminations		Other Charges		Total
Capital Markets - Software Solutions	$	1.0	$	—	$	1.0
Capital Markets - Compliance and Communication Management		3.3		0.1		3.4
Investment Companies - Software Solutions		0.1		—		0.1
Investment Companies - Compliance and Communication Management		0.9		—		0.9
Corporate		0.5		—		0.5
Total	$	5.8	$	0.1	$	5.9

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	Before Tax Amount		Income Tax Expense		Net of Tax Amount		Before Tax Amount			Income Tax Expense		Net of Tax Amount
Translation adjustments	$ 1.1		$	—	$	1.1	$	(1.7	)	$	—	$	(1.7	)
Adjustment for net periodic pension plan and other postretirement benefits plan	0.8		0.3			0.5		1.6			0.5	1.1
Other comprehensive income (loss)	$	1.9	$	0.3	$	1.6	$	(0.1	)	$	0.5	$	(0.6	)

	Three Months Ended June 30,				Six Months Ended June 30,				Classification in the Condensed Consolidated Statements of Operations
	2020		2019		2020		2019
Amortization of pension and other postretirement benefits plan cost:
Net actuarial loss	$	0.8	$	0.5	$	1.6	$	0.9	(a)
Reclassifications before tax		0.8		0.5		1.6		0.9
Income tax expense		0.3		0.2		0.5		0.3
Reclassifications, net of tax	$	0.5	$	0.3	$	1.1	$	0.6

	Payments Due In
	Total		2020 (c)		2021		2022		2023		2024		2025 and thereafter
	(in millions)
Debt (a)	$	353.5	$	0.5	$	—	$	—	$	120.0	$	233.0	$	—
Interest due on debt (b)		98.2		11.2		22.6		22.6		22.6		19.2		—
Total	$	451.7	$	11.7	$	22.6	$	22.6	$	142.6	$	252.2	$	—


	Six Months Ended		Six Months Ended
	June 30, 2020		June 30, 2021
	(in millions)		(in millions)
Total net sales	$	424.9	$	448.1
Total cost of sales		243.3		193.8
Income from operations		16.0		100.9
Net earnings		3.0		68.8


	June 30, 2020		June 30, 2021
Availability	(in millions)		(in millions)
Revolving Facility	$	300.0	$	300.0
Availability reduction from covenants		—		—
	$	300.0	$	300.0
Usage
Borrowings under the Revolving Facility		120.0		10.0
Impact on availability related to outstanding letters of credit		—		2.3
	$	120.0	$	12.3

Current availability	$	180.0	$	287.7
Cash		37.4		39.9
Net Available Liquidity	$	217.4	$	327.6


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (a)
April 1, 2021 - April 30, 2021		157,781	$	28.96		157,781	$	42,121,768
May 1, 2021 - May 31, 2021		93,024		26.78		89,986		39,712,156
June 1, 2021 - June 30, 2021		8,817		31.04		2,800		39,628,331
Total		259,622	$	28.25		250,567

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased (a)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b)
April 1, 2020 - April 30, 2020		—	$	—		—	$	21,190,644
May 1, 2020 - May 31, 2020		3,297	$	7.29		—	$	21,190,644
June 1, 2020 - June 30, 2020		7,294	$	8.25		—	$	21,190,644
Total		10,591	$	7.95		—	$	21,190,644


3.1			Amended and Restated Certificate of Incorporation of Donnelley Financial Solutions, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

3.2			Amended and Restated By-laws of Donnelley Financial Solutions, Inc. ~~(incorporated~~(incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

4.1			Indenture, dated as of September 30, 2016, among Donnelley Financial Solutions, Inc., the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as Trustee ~~(incorporated~~(incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)

4.2			Description of the Donnelley Financial Solutions, Inc. Securities Registered under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K dated December 31, 2019, filed on February 26, 2020)

10.1			Amended and Restated Credit Agreement dated as of ~~September 30, 2016,~~May 27, 2021, by and among Donnelley Financial Solutions, Inc.~~, as Borrower,~~ the lenders party thereto and JPMorgan Chase Bank, N.A., as ~~Administrative Agent~~ (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.2~~			~~Amendment No. 1 to Credit Agreement, dated as of October 2, 2017, among Donnelley Financial Solutions, Inc., as Borrower, the lenders party thereto,~~administrative agent and ~~JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q dated September 30, 2017, filed on November 2, 2017)~~

~~10.3~~			Amendment No. 2 to Credit Agreement, dated as of December 18, 2018, by and among Donnelley Financial Solutions, Inc., the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrativecollateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated ~~December 18, 2018,~~May 27, 2021, filed on ~~December 18, 2018)~~June 1, 2021)

~~10.4~~10.2			2016 Donnelley Financial Solutions, Inc. Performance Incentive Plan ~~(incorporated~~(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.5~~10.3			Amended and Restated Donnelley Financial Solutions, Inc. 2016 Performance Incentive Plan ~~(incorporated~~(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 18, 2017, filed on May 23, 2017)*

~~10.6~~10.4			Amendment to the Donnelley Financial Solutions, Inc. Amended and Restated 2016 Performance Incentive Plan dated May 20, 2019 (incorporated herein by reference to Appendix A of the Company’s definitive proxy statement on Schedule 14A (file No. 001-37728) filed April 22, 2019)*

~~10.7~~10.5			Amendment to Amended and Restated Donnelley Financial Solutions, Inc. 2016 Performance Incentive Plan dated June 27, 2019 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 10-Q dated June 30, 2019, filed on August 1, 2019)*

~~10.8~~10.6			Donnelley Financial Solutions, Inc. Non-Employee Director Compensation Plan ~~(incorporated~~(incorporated by reference to Exhibit ~~10.5~~10.8 to the Company’s Annual Report on Form 10-K dated December 31, ~~2017,~~2020, filed on February ~~28, 2018)~~25, 2021)*

~~10.9~~10.7			Policy on Retirement Benefits, Phantom Stock Grants and Stock Options for Directors (incorporated by reference to Exhibit 10.1 to R.R Donnelley & Sons Company Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, filed on August 6, 2008)*

~~10.10~~10.8			Donnelley Financial Solutions, Inc. Nonqualified Deferred Compensation Plan, dated as of September 22, 2016 ~~(incorporated~~(incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.11~~10.9			Donnelley Financial Unfunded Supplemental Pension Plan effective October 1, 2016 (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.12~~10.10			Donnelley Financial Solutions, Inc. Amended and Restated Executive Severance Plan ~~(incorporated~~(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 15, 2020, filed on July 20, 2020)*


10.11	Letter Agreement to Employment Agreement, dated as of April 20, 2018, between the Company and Daniel N. Leib (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 10, 2018, filed on April 16, 2018)*

~~10.14~~10.12	Amended and Restated Employment Agreement, dated as of July 13, 2017, between the Company and Daniel N. Leib (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 13, 2017, filed on July 14, 2017)*
~~10.15~~10.13	Amendment dated as of July 15, 2020 to Amended and Restated Employment Agreement dated as of July 13, 2017 between the Company and Daniel N. Leib (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated July 15, 2020, filed on July 20, 2020)*

~~10.16~~10.14	Assignment of Employment Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and Thomas F. Juhase ~~(incorporated~~(incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.17~~10.15	Waiver of Severance Benefits, dated as of June 1, 2017, by and between Thomas F. Juhase and the Company ~~(incorporated~~(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated May 30, 2017, filed on June 5, 2017)*

~~10.18~~10.16	Agreement dated June 26, 2020, between Donnelley Financial Solutions, ~~Inc~~Inc. and Thomas F. Juhase (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 26, 2020, filed on June 26, 2020)*

~~10.19~~10.17	Assignment of Employment Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and David A. Gardella (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.20~~10.18	Waiver of Severance Benefits, dated as of June 1, 2017, by and between David A. Gardella and the Company ~~(incorporated~~(incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated May 30, 2017, filed on June 5, 2017)*

~~10.21~~10.19	Assignment of Severance Agreement and Acceptance of Assignment, dated as of September 29, 2016, between Donnelley Financial Solutions, Inc., R. R. Donnelley & Sons Company and Jennifer B. Reiners (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K dated September 30, 2016, filed on October 3, 2016)*

~~10.22~~10.20	Waiver of Severance Benefits, dated as of June 1, 2017, by and between Jennifer B. Reiners and the Company ~~(incorporated~~(incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated May 30, 2017, filed on June 5, 2017)*

~~10.23~~10.21	Donnelley Financial Solutions Annual Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated March 2, 2018, filed on March 13, 2018)*

~~10.24~~10.22	Form of Performance Restricted Stock Award Agreement (for 2017) (incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2017, filed on May 4, 2017)*

~~10.25~~		Form of Amendment to Performance Restricted Stock Award Agreement (for 2017) (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated May 30, 2017, filed on June 5, 2017)*

~~10.26~~		Form of Performance Share Unit Award Agreement (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K dated December 31, 2017, filed on February 28, 2018)*

~~10.27~~10.23	Form of Performance Share Unit Award Agreement (for 2017) (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2017, filed on May 4, 2017)*

~~10.28~~		Form of Performance Share Unit Award Agreement (for 2019) (incorporated by reference to Exhibit 10.25 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2018, filed on May 2, 2019)*

~~10.29~~10.24	Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2017, filed on May 4, 2017)*

~~10.30~~10.25	Form of Restricted Stock Unit Award (2021) (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K dated December 31, 2020, filed on February 25, 2021)*

10.26	Form of Stock Option Award Agreement (incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2017, filed on May 4, 2017)*


~~10.31~~10.27		Form of Performance Cash Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 2, 2020, filed on March 6, 2020)*

~~10.32~~10.28		Form of Performance Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit ~~10.1~~10.2 to the Company’s Current Report on Form 8-K dated March 2, 2020, filed on March 6, 2020)*



~~10.33~~10.29		Form of Performance Restricted Stock Unit Award Agreement (2021) (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K dated December 31, 2020, filed on February 25, 2021)*

10.30		Form of Director Restricted Stock Unit Award (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)*

~~10.34~~10.31		Form of Restricted Stock Unit Award Agreement for directors converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.21 to the R.R. Donnelley & Sons Company Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed on March 14, 2005)*

~~10.35~~10.32		Form of Restricted Stock Unit Award Agreement for directors converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.25 to the R.R. Donnelley & Sons Company Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed on February 27, 2008)*

~~10.36~~10.33		Form of Restricted Stock Unit Award Agreement for directors converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.23 to the R.R. Donnelley & Sons Company Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed on February 25, 2009)*

~~10.37~~10.34		Form of Amendment to Director Restricted Stock Unit Awards converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.22 to the R.R. Donnelley & Sons Company Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed on February 25, 2009)*

~~10.38~~10.35		Form of Amendment to Director Restricted Stock Unit Awards dated May 21, 2009 converted from R.R. Donnelley & Sons Company to the Company pursuant to the Separation Agreement (incorporated by reference to Exhibit 10.23 to the R.R. Donnelley & Sons Company Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, filed on August 5, 2009)*

~~10.39~~10.36		Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q dated September 30, 2016, filed on November 9, 2016)

~~10.40~~10.37		Agreement, dated February 17, 2019, by and among the Company, Simcoe Capital Management, LLC and, solely for purposes of Section 2(g) thereof, Jeffrey Jacobowitz (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 17, 2019, filed on February 19, 2019)

~~10.41~~10.38		Amended and Restated Agreement of Sale and Purchase, dated as of September 6, 2019, between Donnelley Financial, LLC and SECA-NJ, LLC (incorporated by reference to Exhibit 10.39 to the Company’s Quarterly Report on Form 10-Q dated September 30, 2019, filed on November 5, 2019)

~~10.42~~10.39		First Amendment to Amended and Restated Agreement of Sale and Purchase, dated as of September 25, 2019, between Donnelley Financial, LLC and SECA-NJ, LLC (incorporated by reference to Exhibit 10.40 to the Company’s Quarterly Report on Form 10-Q dated September 30, 2019, filed on November 5, 2019)

~~10.43~~10.40		Second Amendment to Amended and Restated Agreement of Sale and Purchase, dated as of September 26, 2019, between Donnelley Financial, LLC and SECA-NJ, LLC (incorporated by reference to Exhibit 10.41 to the Company’s Quarterly Report on Form 10-Q dated September 30, 2019, filed on November 5, 2019)

14.1		Code of Ethics for the Chief Executive Officer and Senior Financial Officers (incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K dated December 31, 2016, filed on February 28, 2017)

22.1		Guarantor subsidiaries of the Registrant of the Registrant’s 8.25% Senior Notes due October 15, 2024 (incorporated by reference to Exhibit 22.1 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2020, filed on May 7, 2020)

31.1		Certification by Daniel N. Leib, President and Chief Executive Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)

31.2		Certification by David A. Gardella, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)


32.1		Certification by Daniel N. Leib, President and Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith)

32.2		Certification by David A. Gardella, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith)

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101


	DONNELLEY FINANCIAL SOLUTIONS, INC.

	By:		/s/ DAVID A. GARDELLA
			David A. Gardella
			Executive Vice President and Chief Financial Officer

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Emerging growth company