RRD Sends Letter of Response to Chatham Asset Management

R.R. Donnelley & Sons Company RRD ("RRD" or the "Company") today announced that RRD has sent a letter to Chatham Asset Management, LLC in response to Chatham's February 28, 2020 letter to RRD's Board Chair and President and Chief Executive Officer.

Following is a full text of the letter that was sent on March 2, 2020:

Chatham Asset Management, LLC
26 Main Street, Suite 204
Chatham, New Jersey 07928
Attention: Anthony Melchiorre, Managing Member

Dear Mr. Melchiorre:

We are in receipt of your letter dated February 28, 2020.

As was the case in August 2019 when the Board of Directors of R. R. Donnelley & Sons Company (the "Company") adopted the Company's stockholder rights plan (the "Rights Plan"), to which you make reference in your letter, the Board continues to believe that it is in the best interests of the Company's stockholders that no one person or group acquire undue influence or control through purchases of the Company's stock. The Board will continue to make decisions concerning the need for a Rights Plan and other matters in the best interests of stockholders.

Regarding application of the Rights Plan to Chatham Asset Management ("Chatham"), we previously informed you on Feb 10 that Chatham was misreading the Rights Plan. In particular, under the terms of the Rights Plan, Chatham was not an Ordinary Course Institutional Investor, and the recent commencement by Chatham of reporting on Schedule 13D does not give rise to the "untenable dilemma" referenced in your letter. We refer you specifically to Section 1(a) of the Rights Plan, where the terms Acquiring Person and Ordinary Course Institutional Investor are defined. Because Chatham filed its Schedule 13G pursuant to Rule 13d-1(c) under the Securities Exchange Act of 1934, it was not an Ordinary Course Institutional Investor, and Chatham's commencement of reporting on Schedule 13D does not affect Chatham's ability to continue to qualify as an Exempt Person (as defined in Section 1(t) of the Rights Plan). If you have further questions regarding the operation of the Rights Plan, we will set up a call among counsel to again explain it.

We continue to be interested in engaging constructively with Chatham, and have sent multiple requests to do so, including two such requests on February 27. We have yet to hear back from you regarding a meeting. Moreover, neither in your letters nor on your previous calls with us have you identified debt opportunities that we have not evaluated. In fact, we included several messages regarding our debt outstanding and future plans in our press release dated February 25 and our conference call on February 26, including the following:

• the Company paid down $273 million in debt in 2019 bringing our total reduction since 2016 to $569 million;
• we have increased our availability under our credit facility to $634 million, which is the highest level of availability since October 2016;
• the availability under our credit facility is sufficient to retire all upcoming maturities in 2020 and 2021;
• we plan to continue to increase our capacity to pay down additional debt through positive cash flow, additional asset sales and potential business dispositions;
• during the fourth quarter and continuing into January, the Company has reduced the effective interest rate on the Term Loan by entering into interest rate swap agreements with a notional value of $400 million;
• we will continue to evaluate opportunities to extend our capital structure and improve our cost of capital, maturity profile and execution costs; and
• the Company re-affirmed that focusing on actions to reduce its debt outstanding is a top priority, which has also been stated in most quarterly conference calls and investor presentations regularly for the last three years.

As we have expressed multiple times, we have been and remain open to constructive dialogue, but must tell you that your letters containing erroneous descriptions of the Rights Plan, false statements about the Rights Plan's implications for Chatham, and ignoring critical strategic steps taken by Management and the Board are not constructive.

cc. Terry Peterson, EVP, CFO

About RRD

RRD is a leading global provider of multichannel business communications services and marketing solutions. With more than 50,000 clients and 36,400 employees across 29 countries, RRD offers the industry's most comprehensive offering of solutions designed to help companies—from Main Street to Wall Street—optimize customer engagement and streamline business operations across the complete customer journey. RRD offers a comprehensive portfolio of capabilities, experience and scale that enables organizations around the world to create, manage, deliver, and optimize their marketing and business communications strategies.

For more information, visit the Company's web site at www.rrd.com.

Use of Forward-Looking Statements

This news release may contain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the date of this news release and are based on current expectations and involve a number of assumptions, risks, and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Readers are strongly encouraged to read the full cautionary statements contained in RRD's filings with the SEC. RRD disclaims any obligation to update or revise any forward-looking statements.

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