2. Today’s Schedule
Time Topic Speaker
11:00 - 11:30am Registration & Display of
RR Donnelley Offerings
11:30 - 11:45am Welcome and Introduction Dan Leib
11:45 - 12:00pm One RR Donnelley Tom Quinlan
12:00 - 1:00pm Industry Dynamics & John Paloian
RR Donnelley Strategy Dan Knotts
1:00 - 1:30pm Financial Review Dan Leib
Tom Quinlan
Q&A
June 21, 2007
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3. Safe Harbor Statement
Use of Forward-Looking Statements
This presentation contains quot;forward-looking statementsquot; as defined in 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 presentation 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. The company does not undertake to 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 statement or to reflect the occurrence of anticipated or unanticipated events.
The factors that could cause material differences in the expected results of RR Donnelley include, without limitation, the
following: the successful execution and integration of acquisitions and the performance of the company's businesses
following acquisitions; the ability to implement comprehensive plans for the execution of cross-selling, cost containment,
asset rationalization and other key strategies; competitive pressures in all markets in which the company operates; factors
that affect customer demand, including changes in postal rates and postal regulations, changes in the capital markets,
changes in advertising markets, the rate of migration from paper-based forms to digital format, customers' budgetary
constraints and customers' changes in short-range and long-range plans; shortages or changes in availability, or increases
in costs of, key materials (such as ink, paper and fuel); and other risks and uncertainties described in RR Donnelley's
periodic filings with the Securities and Exchange Commission (SEC). Readers are strongly encouraged to read the full
cautionary statements contained in RR Donnelley's filings with the SEC. RR Donnelley disclaims any obligation to update
or revise any forward-looking statements.
June 21, 2007
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4. Non-GAAP Financial Information
The company believes that certain non-GAAP measures, when presented in conjunction with comparable GAAP measures,
are useful because that information is an appropriate measure for evaluating the company’s operating performance.
Internally, the company uses this non-GAAP information as an indicator of business performance, and evaluates
management’s effectiveness with specific reference to these indicators. These measures should be considered in addition
to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
A reconciliation of GAAP net earnings to non-GAAP net earnings and further descriptions are presented in the tables
attached to our Earnings Releases, which are available in the investors section of our website, rrdonnelley.com. Also
available in the investors section of our website, rrdonnelley.com, is a description of additional non-GAAP financial
measures referred to in this presentation.
Twelve Months Ended December 31,
In $ millions, except EPS 2003 2004 2005 2006
Income from Income from Income from Income from
Cont. Ops EPS Cont. Ops EPS Cont. Ops EPS Cont. Ops EPS
$292.7 $1.54 $459.2 $0.88 $450.4 $0.63 $750.7 $1.83
GAAP results
Adjustments
Restructuring and impairments - net 12.5 0.07 107.4 0.31 419.8 1.83 206.1 0.79
Integration charges - - 80.8 0.23 8.3 0.02 - -
Income Tax adjustment - (0.44) - (0.16) - - - (0.11)
Net (income) from Discontinued Operations - 0.13 - 0.39 - (0.19) - 0.01
Cumulative effect of change in accounting principle - - - 0.03 - - - -
Other non-GAAP adjustments - 0.01 - (0.03) - - - 0.03
Total Adjustment 12.5 (0.23) 188.2 0.77 428.1 1.66 206.1 0.72
305.2 $1.31 647.4 $1.65 878.5 $2.29 956.8 $2.55
Non-GAAP results
Depreciation and amortization 270.3 385.5 425.0 463.3
$575.5 $1,032.9 $1,303.5 $1,420.1
EBITDA (non-GAAP)
June 21, 2007
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6. Building RR Donnelley to Succeed
May 2003
February 2004
Divestitures Acquisitions(1)
June 2005
October 2004
Package Logistics
July 2005
Sept 2005
Poligrafia
December 2005 April 2006
January 2007
May 2007
Note: (1) In addition, RRD completed the acquisition of Ad-Plex Rhodes Charlestown facility in August, 2005, Spencer Press in November, 2005, CMCS in December, 2005 and
Canadian Bank Note in October, 2006
June 21, 2007
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7. Product and Related Services Opportunity
PREPARE PRODUCE DELIVER
Print Logistics
Premedia Services Broadest Product Portfolio
Print Distribution
Studio Photography Catalogs
Fulfillment and
Color Services Magazines
Kitting
Page Layout & Processing Retail Inserts
Expedited Services
Facilities Management Directories
Ad Management Books
Digital Asset Management Commercial
Offshore Service Offering Direct Mail
Statements
Financial
Forms
Labels
BPO
Gravure, Offset and Digital Capabilities
2006: $374 Billion Print Market Worldwide, $172 Billion in the U.S.
June 21, 2007
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8. The World’s Premier Print and Related Services Company
Strategic Operational Financial
Serve > 90% Recurring
Over 40,000
of the Revenue
Customers
Fortune 500
Over 600
Low Cost
Brand locations in
Provider
Strength 35+ countries
Platform
Product
Financial
Flexibility
Line
Flexibility
Breadth
Scale Delivers on
Distinct Service Advantages Promises
Offering
June 21, 2007
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9. Simplified Branding
Rebrand Moore Wallace and certain other trade names as
RR Donnelley
Effective Q3 2007, we will realign the management and
reporting structure
Simplifies client and internal interactions
Results in an approximately $315 million non-cash
impairment charge
June 21, 2007
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10. Deep Customer Relationships
Blue Chip Customer
Total of 40,000 Customers
Relationships
125 customers with revenue > $10 million (1)
950 customers with revenue > $1 million (1)
Serve over 90% of Fortune 500 and have
approximately 15% of their print spend
• Opportunity to continue to grow our
Fortune 500 Relationships
10
And many others…
(1) Includes only revenue generated in North America
June 21, 2007
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11. Plenty of Opportunity to Expand Relationships
We offer 15 core products and services
150 customers purchase 7 or more products/services
Multi-offering purchasers
66
70
60
# of Customers
50
38
40
27
30
20
10
6
10 5
0
7 8 9 10 11 12+
# of products/services purchased from RR Donnelley
(1) Includes only products/services provided in North America
June 21, 2007
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12. A Simple Story
Largest player in a highly fragmented market
Scale Differentiating front-end and logistics capabilities
Cost advantage driven by platform flexibility and economies in procurement,
production and distribution
Blue chip customer relationships; single source provider opportunities
Breadth & Broadest offering of industry leading products and services
Depth Industry experienced executive and senior management teams
Growth rate has been greater than the broader print market; largest
opportunity is with existing clients
Financial
Success in managing, acquiring and integrating acquisitions in a challenging
price environment
Financial discipline and operational focus on productivity
Strong cash flow generation
The Way Operational / productivity focus
Forward Continue M&A activities and/or return cash to shareholders
Integration of Banta, Perry Judd’s and Von Hoffmann proceeding well
June 21, 2007
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14. Trends Shaping Industry
Pricing pressure
Consolidation
(Printers, Suppliers
Large / diversified printers are better positioned to be successful
& Customers)
Private equity presence changing buying dynamics
Total System
Printers who are able to offer lowest total print / document
Cost Focus
management cost and higher ROI are advantaged
Shift toward variable (customized), higher value-add print
Customer
Relationship
IT / data management capabilities increasingly important
Management
to customers
Trends generally continuing at same pace
Electronic
Impact differs by print sector: results in new products / services
Substitution
Positive and negative implications
Regulatory
Changes Printers’ ability to offer compliance assurance / secure
environment increasingly important
June 21, 2007
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15. Consolidating Industry*
*Sample representation – estimated total of 39,088 printing facilities in the United States at the end of 2006 (PIA/GATF, April 3, 2007).
Source: RR Donnelley management estimates
June 21, 2007
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16. Consolidating Supplier Base
Paper Suppliers Ink Suppliers
1980
Stora/Enso Dai Nippon/Sun
INX/Acme + Midland
Bowater/Avenor
Domtar/Weyerhaeuser Flint/NAPIC + Continental BASF Graphics
Abitibi/Bowater + Alper Ink Group
Mead/Westvaco + SICPA
UPM/Kymmene + Day
IP/Champion
Flint acquired by XSYS European
Georgia Pacific/Ft. James
2007
Source: RR Donnelley management estimates
June 21, 2007
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17. Consolidation Runs Across Business Spectrum
Media Companies
Retailers
Catalogers
Magazine & Book Publishers
Pharmaceuticals
Automotive
Bank/Financial Institutions
Food Industry
June 21, 2007
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18. Private Equity Impact on Customer Consolidations
Evercore & TH Lee JP Morgan Partners Wasserstein Publishing Holdings
1999 Evercore acquires AMI American Lawyer
Retail
1999 AMI acquires Globe 1-800-Flowers.com The Deal LLC
2003 AMI acquires Weider Cabela’s Real Estate Media
2003 AMI recapitalized by Evercore/THL Cornerstone Brands New York Magazine
Crosstown Traders Primedia B to B
Vitamin Shoppe Industries Hanley Wood (20% share with JPM)
Penton
Publishing
Golden Gate Capital
Appleseed’s Ascend Media
Norm Thompson Hanley Wood
Haband Bear Stearns
Express TransAmerican Auto Parts
Eddie Bauer Playcore Inc.
Sun Capital
Draper’s & Damon’s Mervyn’s NY & Co
Outfitters Shopko Harlem Furniture
Newport News Lillian Vernon Everything But Water
Spiegel Eddie Bauer Francesca’s
Balducci’s
Stuart Weitzman
June 21, 2007
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19. Change in Ownership has Driven Change in Buying
Dynamics
From… To…
Fragmented print procurement Consolidated print procurement,
across different functions / centrally managed
divisions / geographies
Focus on lowest print cost Focus on lowest total document
management costs and also on achieving
highest ROI
Outsourcing non-core processes
In-house print / document management
including print / document process
management
Transactional relationships Contractual relationship
June 21, 2007
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20. The Evolution of Print Relationships
Customer Relationships
Client’s focus on print supply
chain, not just print
Total Cost of
Process/Procurement
Function
RRD reaches across total value
chain
Outsourced print and
Value-Added Services
Ability to bring scale
100% of Core
Product(s)
• Procurement
• Distribution
• Production
Multiple Product
Relationships
Leverage the relationship
• 100% Positions
Single Product
• Trust in place
Relationships
• Vested Interest
1864 2007+
2000 2006 Time
Source: Derived from InfoTrends/Cap Ventures
June 21, 2007
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21. The Evolution of RR Donnelley’s Strategy
Put “World Class” team together
Management
Built support infrastructure
• Admin/Finance/Ops
Developed and implemented new strategy
Investment
Built, through organic investments and acquisitions, flexible
full-service platform
Focused on continual productivity improvements
Operational
Absorbed equipment installs
Absorbed and integrated acquisitions
Asserted disciplines/metrics (cost compression culture)
June 21, 2007
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22. The RR Donnelley Strategy – Profitable Growth
Targeted sales strategy
• Winners/consolidators in their space
• Contractual opportunities – opening the window
• 100% positions
Disciplined investment approach
• Organic investment
• Targeted acquisitions
Trade-off with capital expenditures
Productivity and waste reduction
Building a Global Platform for Global Customer Needs
June 21, 2007
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23. The RR Donnelley Strategy – A Disciplined Approach
Key Elements
Market / platform versus business unit approach
Window of opportunity - prioritization
Standardized capital investment approach
Flexibility to adapt to evolving customer needs
June 21, 2007
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24. One RR Donnelley (Illustrative)
Sales and Marketing
Directory
Book
Magazine Healthcare Financial Retail
Publisher
Publisher
Publisher
Internal Process (Pricing, Production Planning)
One Global Platform
PREPARE PRODUCE DELIVER
Gravure Offset Bindery
Sheetfed Digital
June 21, 2007
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25. The RR Donnelley Strategy - Driving Profitable Growth
Sales growth targets
Platform optimization
• Asset utilization
• Productivity focus
Organic investment
• Expand and upgrade base platform
• Equipment balance
Acquisitions
• Targeted for customers, equipment, capacity, capabilities, people
• Disciplined analysis
June 21, 2007
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26. Platform Optimization - Asset Utilization
Off peak (1H) growth has exceeded peak (2H) growth by over $100 million from 2004 to 2006
% of Revenue Growth (2004 – 2006)*
36%
64%
1st Half 2nd Half
* 2004-06 growth in most historically seasonal offerings (magazines, catalogs, retail inserts, books and directories)
June 21, 2007
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27. Platform Optimization – Productivity Focus
Leverage RR Donnelley scale
• Supply chain
• Shared services
• One platform
Targeted investment
• Quality and service
• Waste, throughput and cost takeout
June 21, 2007
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28. Organic Investment
Capacity investment
• 50+ presses and binding lines installed
• Assortment of standardized asset types to optimize platform
• Overall increase in capacity utilization
Capability investment
• Targeted to meet market and customer requirements
• Standardization to drive flexibility
Productivity / Compliance / Maintenance investment
• Relentless approach to cost takeout and waste reduction
• Safety focused
• Infrastructure requirements
June 21, 2007
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29. The RR Donnelley Strategy – A Living Process
Keys to Success
Sales Growth Targets
Industry and market knowledge
Sales planning
Platform Optimization Leveraging scale as one platform
Investment prioritization
Organic Investment
Acquisitions
June 21, 2007
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30. RR Donnelley - An Unmatched Portfolio
Labels &
Direct Mail eCommerce Tools
Label Systems
Retail Inserts
Books Forms
Premedia Financial
Magazines
Directories Services Services
2006: $374 Billion Market Worldwide,
$172 Billion in the U.S.
Logistics/Fulfillment
Statements
Services
In-Box & BPO & Document
Commercial Global Turnkey Management
Printing
Catalogs Solutions
June 21, 2007
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32. New Customers and Expansion of Relationships
Since February 2004, the contract value of our largest new business
wins and renewals…
Totals over $6.5 billion
June 21, 2007
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34. RR Donnelley is Differentiated to Drive Growth
Comprehensive global printing & print-related services platform
• Reaches across total value chain
• Allows for maximum cost compression
Global outsourcing / procurement capability
Scale associated with leveraged buying
• Materials
• Logistics
Leveraging long-term customer relationships/contracts
• 100% positions in place
• Trust is already earned
• “Vested interest”
Financial strength and stability
June 21, 2007
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36. Strong Sales Growth
Proforma Revenue Growth*
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0% 1Q05 2Q05 3Q05 4Q05 FY05 1Q06 2Q06 3Q06 4Q06 FY06 1Q07
3.4% 3.3% 4.2% 1.8% 3.2% 5.6% 2.6% 2.0% 2.5% 3.3% 1.3%
GDP
5.4% 4.8% 6.1% 4.1% 5.5% 6.5% 6.8% 3.3% 1.9% 4.7% 3.6%
RRD
NA NA NA NA 3.0% NA NA NA NA 2.0% NA
Global Industry
*Proforma for acquisitions as presented in quarterly earnings releases; growth rate stated as if the acquisition took place at the beginning of the period in
which it occurred (and the comparable prior year period). Not adjusted for Fx and paper prices.
GDP is expressed in real terms. Industry growth from Datamonitor.
June 21, 2007
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38. 2006 Profitability and Cost Detail
100%
% of Revenue
0%
Revenue Cost of Sales SG&A D&A Earnings from
Cont. Ops
Materials Labor Other Semi-variable Fixed D&A
June 21, 2007
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39. Material and Commodities
Paper
• Primarily contractual pass-through
• Relationships vary among:
RR Donnelley supplied
Customer directed
Customer supplied
Other commodities
• Ink
• Fuel
• Natural Gas
• Electricity
June 21, 2007
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40. Historically, D&A has exceeded Capital Expenditures
Capital expenditure as a % of Revenue is expected to decrease in 2008
$ in Millions
700
Platform refresh
Depreciation & Amortization 595
investments
600
Capex
Capex as % Revenue
500 471 450-475
463
425
386
400 374
300 270 265
193
200
5.6%
4.6%
4.0% 4.0%
100 3.7%
0
2003 2004 2005 2006 2007
2008 capex expected to decrease to 3.5% to 4.0% of revenue
June 21, 2007
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41. Strong Non-GAAP Earnings per Share Growth
Non-GAAP EPS Dilutive Impact of Purchasing Accounting
$3.50
CAGR = 20%
CAGR = 24%, adjusted for purchasing accounting amortization
$3.00 $0.35
$0.23 $2.70 - 2.75
$2.50
$2.55
$0.18
$2.29
$2.00
$0.11
$1.65
$1.50
$0.00
$1.31
$1.00
$0.50
$0.00
2003 2004 2005 2006 2007
Note: Dilutive impact of Purchase Accounting amortization calculated using amortization of intangibles, tax effected at the company’s non-GAAP effective tax rate.
June 21, 2007
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43. Debt Maturity Profile
Weighted average interest rate of ~5.50% on existing long-term debt
• Most outstanding debt at fixed rate
Few near-term maturities
$ in millions
$1,200
969
$1,000
$800
624 598
$600 499 499
400
$400
$200
$0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016+
Interest Rate 3.75% 4.95% 5.63% 4.95% 5.50% 6.65%
June 21, 2007
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44. Multiple Avenues to Value Creation
• Topline growth in line with GDP
• Productivity to offset price
• Cash flow and capital allocated to
Cash drive value
Internal Share
Dividend Acquisition Debt Repay
Investment Buyback
• ST cash
• Furthers customer
• Investor
• Organic Growth • Discount to
management
relationship
preference for
intrinsic value
• Cost Management
distribution • Strong credit
• Cost synergies
• Accretive use of
• Maintenance metrics
cash • Excess capacity
June 21, 2007
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45. Balanced Capital Deployment
Very strong balance sheet and cash position
Strong investment grade credit ratings
• Moody’s = Baa2
• S&P = BBB+
Prioritization of cash flows
• Dividend maintained at $1.04 per share/year
• Internal capital to support growth/productivity
• Continued M&A and/or return cash to shareholders
June 21, 2007
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46. Long-term Targets
Revenue growth* in line with GDP
• Acquisitions drive additional topline
Productivity savings offset pricing pressure
• Margin enhancement opportunities from incremental sales and
acquisition integration
Strong cash flow generation and credit metrics
Balanced capital deployment
Financial flexibility and levers to pull
* Pro forma for acquisitions
June 21, 2007
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47. Financial Strength
US$ in millions
5%
US$ in millions
R: 3 $1,420
CAG $1,304
31%
AGR:
C $9,317 $1,033
$8,430
$7,156
$576
$4,183
2003 2004 2005 2006
2003 2004 2005 2006
Revenue EBITDA (2)
0%
US$ in millions
R: 4 $1,046
% AG
R: 25 C
CAG $2.55 $833
$2.29 $768
$1.65
$1.31
$383
2003 2004 2005 2006 2003 2004 2005 2006
Non-GAAP EPS (2) EBITDA-Capex
(1) Proforma for acquisitions as presented in quarterly earnings releases. Not adjusted for Fx and paper prices.
(2) Excludes restructuring, impairment, integration charges and other one-time items.
June 21, 2007
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48. The RR Donnelley Opportunity
Industry leadership
Stable, Diversified
Deep, scalable customer relationships
Cash Generating
Experienced management team
Platform
Economies of scale in procurement, production and distribution
Platform refresh and ongoing capital investment drives platform
Low-Cost
flexibility
Advantages
Future opportunities for continued productivity
Premedia & front-end
Distinct Non-Price
Differentiators Logistics
Proven track record of producing results
Strong Financial Strong liquidity and balance sheet
Position
Financial flexibility
June 21, 2007
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