2. 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 integration of the sales force, 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.
May 7, 2008
2
3. 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.
May 7, 2008
3
4. Presenters
Tom Quinlan President and CEO
Miles McHugh EVP, CFO
Dan Leib SVP, Treasurer
Jenny Wong VP, Assistant Treasurer
May 7, 2008
4
5. Agenda
I. Executive Summary
II. Industry Dynamics
Consolidation
RR Donnelley’s Strategy
Impact of Distressed Printers
III. Financial Review
Q1 2008 Performance
2008 Guidance
IV. Deployment of Capital
Credit Metrics and Ratings Commitment
May 7, 2008
5
6. Executive Summary
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
Strong cash flow generation in a challenging price environment
Financial Growth rate has been greater than the broader print market; largest
opportunity is with existing clients
Success in managing, acquiring and integrating core print acquisitions
Financial discipline and productivity gains drive margin improvement
Operational / productivity focus
The Way
Continue targeted M&A activities
Forward
Maintain strong investment grade credit metrics
May 7, 2008
6
7. Financial Strength
EBITDA (1) )
Net Revenue – ’07 6%+
’07) (’03 32 %
(’03 – $12,350 growth
29% R:
US$ in millions
US$ in millions
$1,752
CAG
GR: to
CA $1,420
$11,587 $12,450 $1,304
$9,317
$8,430 $1,033
$7,156
$576
$4,183
2003 2004 2005 2006 2007 2008G
2003 2004 2005 2006 2007 2008G
PF Sales 4.1% 4.7% 2.5%
Growth
EBITDA - Capex 15%+
EPS (1) 7)
)
– ’07 – ’0 growth
(’03
35%
$3.08 to (’03
US$ in millions
: 22% R: $1,270
AGR $2.94 $3.15
AG
C C
$2.55 $1,046
$2.29
$833
$768
$1.65
$1.31
$383
2003 2004 2005 2006 2007 2008G 2003 2004 2005 2006 2007 2008G
(1) Excludes restructuring, impairment, integration charges and other one-time items.
May 7, 2008
7
8. Business Generates Substantial Cash Flow
Cash Flow from Continuing Ops (CFFCO) CAGR
$ in millions
CFFCO - Capex 33%
$1,177
1,200
$972
1,000
$904
$759
800
$695
39%
600 $530
$501
$494
$376
400
$183
200
0
2003 2004 2005 2006 2007
May 7, 2008
8
9. Credit Metrics / Importance of Investment Grade
2007
$ in millions Actual
EBITDA 1,752
Cash 379
Total Debt 4,327
Net Debt 3,948
Total Debt / EBITDA 1 2.5x
EBITDA / Interest 7.7x
Standard and Poor’s: BBB+
Moody’s: Baa2
Fitch: BBB
(1) The Cardinal Brands acquisition closed on 12/27/2007, as such no material impact to EBITDA in 2007.
(2) EBITDA represents “Operating income (loss) excluding restructuring and impairment charges” plus “Depreciation and amortization” as reported in
the company’s press release.
May 7, 2008
9
10. Agenda
I. Purpose of the Meeting
II. Industry Dynamics
Consolidation
RR Donnelley’s Strategy
Impact of Distressed Printers
III. Financial Review
Q1 2008 Performance
2008 Guidance
IV. Deployment of Capital
Credit Metrics and Ratings Commitment
May 7, 2008
10
11. Trends Shaping Industry
Pricing pressure & excess capacity
Consolidation
Industry fragmentation
(Printers, Suppliers
& Customers)
Large / diversified printers are better positioned to be successful
Total System Printers who are able to offer lowest total print / document
Cost Focus management cost and higher ROI are advantaged
Customer Shift toward variable (customized), higher value-add print
Relationship
IT / data management capabilities increasingly important
Management
to customers
Trends generally continuing at same pace
Electronic
Substitution Impact differs by print sector: results in new products / services
Positive and negative implications
Regulatory
Changes Printers’ ability to offer compliance assurance / secure
environment increasingly important
May 7, 2008
11
12. Consolidating Industry*
RR Donnelley Quebecor World Cenveo Vertis Consolidated Graphics
1980 Banta Moore RR Donnelley World Color Quebecor Cadmus Mail Well Big Flower Consolidated Graphics
Bushman Quality Color American InLine Graphics Alden Press Pendell Waverly Press American Envelope Treasure Chest AGS Custom Graphics
Danbury Printing Nielsen Ringier (SR) Ringier Eusey Press Lancaster Press Supermex Retail Graphics Eastwood Printing
Greenfield Wallace Meredith/Burda Brown (Franklin) Arcata Mack Printing Graphic Art Center Laser Tech Kelmscott
Astron 9 Commercial Co's ASG RX Label Tech Webcraft Litho Graphix
Asia Printers Group Petty Commercial Envelope County Pub Global Group
Poligrafia Maxwell Rex Corporation KTB Electricity Printing
Spencer Press Diversified Print Co Nies/Artcraft
AdPlex (Charlestown) Alco Gravure Riverside Graphcom
OfficeTiger Kable Pacific Color Annan & Bird
Perry Judd's Providence Colorstream Hennegan
Von Hoffmann Web Cyril Scott
Cardinal Brands Pikes Peak Lithographing
Pro Line Printing
Banta Moore Wallace RR Donnelley World Color Quebecor Cadmus Cenveo
Moore Wallace World Color Cadmus
Banta
2008 RR Donnelley Quebecor World Cenveo Vertis Consolidated Graphics
•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
May 7, 2008
12
13. Consolidating Supplier and Customer Base
Supplier Consolidation
• Paper companies
• Ink companies
Consolidation Runs Across Business Spectrum
• Media Companies
• Retailers
• Catalogers
• Directory Publishers
• Magazine and Book Publishers
• Pharmaceuticals
• Automotive
• Bank/Financial Institutions
• Food Industry
May 7, 2008
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14. The Evolution of Print Relationships
Customer Relationships
Clients focus on print supply
chain, not just print
Total Cost of
Process/Procurement
Function
RRD reaches across total value
chain
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 2008+
2000 2006 Time
Source: Derived from InfoTrends/Cap Ventures
May 7, 2008
14
15. Print Relationships Driven by Cost Drivers in the Print
Supply Chain
• Return • Printed
• Printed
Analysis
Product
Product
• Administration 14%
14% • External /
Internal Creative
• Postage
• Internal Document
Prep / Review
86%
86%
• Fulfillment /
Distribution
• Warehousing /
• Inventory Archiving
Obsolescence
Source: Derived from InfoTrends/CAP Ventures, December 10, 2004.
May 7, 2008
15
16. A Large, Highly Fragmented Market Opportunity
2006 The global print Industry grew 2% in 2006 to $374
Total U.S. Printing Industry billion
$171.5 Bn • Forecast of $422.7 billion in 2011; 2.5% CAGR
Commercial
Printing
The US print market grew 3.3% in 2006 to $171.5
Newspaper 22% billion
• Forecast of continued growth of 2-3% through 2010
45% Despite some recent consolidation, the industry
remains highly fragmented
16% • In the EU25 states, estimate of 120,000 printing
Packaging
companies; mean of 8 employees
• Top 400 printers in the US account for less than 30%
7% of the market
4% 6%
Forms, Labels
RR Donnelley is the largest printer in the world and
Specialty, Trade
the US
Greeting Services
(PreMedia)
Growth: 3.3% (2005 – 2006)
Source: Datamonitor, Global Commercial Printing, March 2007
Source: PIA/GATF, Economic & Print Market Flash Report, April
3, 2007
May 7, 2008
16
17. Scale and Breadth
$ in Billions
SELECTED PRINTERS – 2007E REVENUE
$15.0
$10.0
$11.6
$5.0
$8.0
$6.3 $5.7
$1.4 $1.1 $0.9 $0.8 $0.7
$2.3 $2.1 $2.0 $1.6
$0.0
(b)
(a) (c)
PRODUCT AND SERVICE OFFERING
MCR & Forms and Statement
Company Commercial Direct Marketing Directories Books Labels Financial Print Outsourcing Document BPO
Quebecor World
Quad Graphics
Brown Printing (Bertelsmann)
Cenveo
Toppan Printing
Transcontinental
Vertis
Deluxe Corp
Bowne & Co.
Dai Nippon Printing
Merrill
Standard Register
Consolidated Graphics
Workflow
DST
Williams Lea
Xerox
Pitney Bowes
ADP
Innerworkings
Note: Vertis is LTM revenue. Quad Graphics is reported annual sales per Quad’s website as of 4/30/08.
(a) Estimated revenue for Information Network segment only. Total revenue is estimated to be $15.1 billion.
(b) Estimated revenue for Information Communication segment only. Total revenue is estimated to be $14.7 billion.
(c) Estimated revenue of ~$700 million reflect Brown Printing and Arvato.
May 7, 2008
17
18. RRD is Positioned to Meet Changing Needs
Buying Patterns/Needs RRD Strategic Selling Proposition
• Cost Compression/Synergy • Diversified Global Platform
• Total System Cost Approach • Scale Across All Operations
• Economies of Scale Required • Differentiated Logistics/Fulfillment Offering
• ROI Management Focus • Complete Print Management Services
• Product Reengineering • Linkage With ALL Media Types
• Personalization/Variability • Ability To Expand With Customers
• Outsourcing Print Procurement
Ma
ste
r Pla
n
May 7, 2008
18
19. Master Plan
Multi-year plan drives:
• Customer targeting
• Capital allocation
• M&A priorities
End market analysis
• Growth
• Costs
• Investments
May 7, 2008
19
20. 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)
Move quickly to restructure as pricing and demand changes
May 7, 2008
20
21. 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
Advance planning for major cost
Organic Investment
takeout actions
Acquisitions
May 7, 2008
21
22. Blue Chip Customer Relationships
Total of 40,000 customers
• 155 customers with revenue > $10
million (1)
• 980 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
(1) Revenue in 2007
May 7, 2008
22
23. Platform Optimization - Asset Utilization
Off peak (1H) growth has exceeded peak (2H) growth from 2004 to 2007
EBITDA (3)
2nd Half
2nd Half
61%
52%
1st Half
1st Half
48%
39%
2007(2)
2004 (1)
(1) 2004 includes pro forma results of Moore Wallace for Q1 as reported in Form 8-K (6/17/04) and 3 quarters of as reported results for Q2 – Q4 2004.
(2) 2007 represents full-year results as reported.
(3) EBITDA represents “Operating income (loss) excluding restructuring and impairment charges” plus “Depreciation and amortization” as reported in the
company’s press release.
May 7, 2008
23
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
May 7, 2008
24
25. Acquisition Criteria
Does the acquisition candidate:
1. Help our existing customers?
2. Have capacity where we are constrained?
3. Have synergy opportunities?
May 7, 2008
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26. Acquisitions (Core Print)
Previous core print acquisitions’ overlap allows for straightforward integration:
• Conservatively estimate savings
• Considerable cost-savings available through reduction in corporate expense and
improved operational efficiencies (utilization; procurement)
• Open capacity of acquired companies allows for reduced RRD capital investment
in future
Significant depth of experience integrating acquisitions and restructuring
companies:
• Successfully restructured Moore in late 2000
• Successfully integrated Wallace Computer Services in 2003
• Successfully integrated RRD/MWI in 2004
• Successfully integrated Banta, Perry Judd’s and Von Hoffmann in 2007
• Successfully integrating Cardinal and Pro Line in 2008
May 7, 2008
26
27. The Impact of Distressed Printers
Aggressive pricing began several years ago
Quebecor filed for creditor protection under the Companies’ Creditors
Arrangement Act (CCAA) in Canada and Chapter 11 of the U.S.
Bankruptcy Code in the U.S. on 1/21/08
Market rumors of liquidity issues at other printers
Differences
• Management & culture
• Breadth of product offering
• Workforce relations
• Ownership structure
Opportunities for RRD
• Brand strength
• Financial strength
• Multiple products & services
May 7, 2008
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28. Agenda
I. Purpose of the Meeting
II. Industry Dynamics
Consolidation
RR Donnelley’s Strategy
Impact of Distressed Printers
III. Financial Review
2008 Q1 Performance
2008 Guidance
IV. Deployment of Capital
Credit Metrics and Ratings Commitment
May 7, 2008
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29. Q1 Performance
Non-GAAP EPS (1)
Net Sales ($ in millions)
$0.69
$0.66
$2,997
$0.57
$2,793 $0.54
$2,267
+7.3%*
$1,927
2005 2006 2007 2008
2007 2008
2006
2005
(1) Excludes restructuring, integration and impairment expenses and ‘one-time’ items
* Revenue, proforma for acquisitions, grew 1% from Q1:2007 to Q1:2008
May 7, 2008
29 (a) Includes synergies in forecasted periods.
30. 2008 Guidance (Non-GAAP)
Revenue; $12.35 to $12.45 billion; low single-digit growth pro forma for
acquisitions
Operating margin (non-GAAP) slight expansion over 2007’s 10%(1)
Depreciation and amortization; ~ $640 million, includes ~ $130 million of
purchase accounting amortization
Interest expense – net; ~ $235 million
Effective tax rate (non-GAAP); ~ 33% to 34%
Non-GAAP EPS (fully diluted) = $3.08 to $3.15(1)
Capex = ~$400 million
EBITDA – Capex = Growth 15%+
(1) Assumes no additional shares repurchased. Excludes, if any, restructuring and impairment charges and the resolution of certain tax
items and other items that are not currently determinable, but may be significant. For that reason, the Company is unable to
provide full-year GAAP net earnings and operating margin estimates at this time.
May 7, 2008
30
31. 2008 Priorities
• Leverage “One RR Donnelley” platform and relationships
Continue to • Employ integrated sales approach across RRD platform
Continue to
Capture Share • Target significant Print Management opportunities; gain
Capture Share
additional 100% positions
• Focus on filling off-peak capacity
• Finalize integration of Banta, Perry Judd’s and Von Hoffmann
Integration • Cardinal Brands and Pro Line integration underway
Integration
• Direct IT investments to facilitate integration
• Continue to pursue niche core print targets that meet changing
M&A Activity
M&A Activity customer demands, serve our capacity needs and have cost
savings opportunities
May 7, 2008
31
32. Operational and Financial Flexibility
Committed available liquidity and cash of $1.5 billion
Structural and financial flexibility to react to market conditions
• Manage capital deployment
– Capital spending
– Share repurchase
– M&A activities
• Variable cost reduction
– Incentive compensation
– Workforce reduction
– Plant closures
Much more diversification in our business portfolio than in the past
Experienced management team with proven track record
May 7, 2008
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33. Revenue Distribution by End-Markets Is Much More
Diversified Now
2000 Revenue: $5.8 Billion 2007 Revenue: $11.6 Billion
3% 15%
6%
24%
2%
4%
11%
37%
7%
1%
12% 5%
14%
5%
7%
10%
8%
29%
MagCatRetail Book/Dir Var. Print F&L
MagCatRetail Book/Dir Logistics Fin Print
Com Print Logistics Fin Print Digital Sol
Digital Sol Int'l Var Print BPO GTS Int'l
May 7, 2008
33
34. Liquidity as of 3/31/2008
Total Amount Outstanding Available
$ in millions
$398 $- $398
Cash
2,000
Committed Revolver/CP Market
1 Year – Due August ’08 1 300
9 Months – Due May ’08 1 50
517
Commercial Paper
$2,000 $867 $1,133
Total Committed Revolver/CP Market
$2,398 $867 $1,531
Available Liquidity
(1) Replaced $400mm commercial paper balance with drawings under the $2 billion revolver in August 2007, $50mm of which was
repaid in February 2008.
May 7, 2008
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35. Strong Liquidity Profile
$2 billion in commercial paper program backstopped by revolver
committed through January 8, 2012
• Maintained flexibility during market liquidity crunch in August 2007
• Replaced a portion of CP balance with bank debt
– $350 million bank debt maturing in May and August
• CP balance at 3/31/2008 was $517 million
Financial covenants of revolver:
• Interest coverage ratio of not less than 3:1
• Leverage ratio of not higher than 4:1
• In compliance with the covenants at 3/31/2008
May 7, 2008
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36. Pro Forma Long-Term Debt Maturity Profile
Weighted average interest rate of ~5.50% on existing long-term debt
$ in millions
$1,200
970
$1,000
$800
624 599
$600 499 499
400
$400
$200
$0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017+
Interest Rate 3.75% 4.95% 5.63% 4.95% 5.50% 6.65%
May 7, 2008
36
37. Agenda
I. Purpose of the Meeting
II. Industry Dynamics
Consolidation
RR Donnelley’s Strategy
Impact of Distressed Printers
III. Financial Review
Q1 2008 Performance
2008 Guidance
IV. Deployment of Capital
Credit Metrics and Ratings Commitment
May 7, 2008
37
38. Prudent Capital Deployment
Dividend
• Quarterly dividend has remained at $0.26 per share since July 2003
Capital expenditures
• Capital investment is approximately $400mm for 2008. Reduction of
approximately $82mm from 2007
M&A
• Focus on core print opportunities
Share repurchases
• 7.7 million shares repurchased in 2007
• Replenished in February 2008 authorization back to 10 million shares
• 2.7 million shares repurchased in 2008
May 7, 2008
38
39. Our Commitment to Investment Grade Metrics
Standard and Poor’s: BBB+
Moody’s: Baa2
Fitch: BBB
RRD has emerged as the leader in the commercial printing industry
• Unparalleled scale in highly competitive industry
• Broadest portfolio of products and services
• Financial results have consistently exceeded expectations over the last four years
We are committed to strong investment grade metrics
May 7, 2008
39
