8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 30, 2007

R. R. DONNELLEY & SONS COMPANY

(Exact name of Registrant as Specified in Its Charter)

Delaware	1-4694	36-1004130
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
111 South Wacker Drive, Chicago, Illinois		60606
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (312) 326-8000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On May 1, 2007, R.R. Donnelley & Sons Company (the "Company") issued a press release reporting the Company’s results for the first quarter ended March 31, 2007.

Information in this Item 2.02 and Exhibit 99.1 of Item 9.01 below shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act except as otherwise expressly stated in such a filing.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(b) As previously reported in the Company's Current Report on Form 8-K dated March 19, 2007 and filed on March 23, 2007, on March 19, 2007, the Company announced that Mark A. Angelson, Chief Executive Officer and a director, advised the Board of Directors (the "Board") of his decision to retire from the Company following an orderly transition. Mr. Angelson's retirement from such positions became effective on April 30, 2007.

(c) Upon Mr. Angelson's retirement, Thomas J. Quinlan, III assumed the positions of President and Chief Executive Officer of the Company and will continue, until a replacement is named, as Chief Financial Officer of the Company. The Board also appointed Mr. Quinlan a director of the Company effective upon Mr. Angelson's retirement and in connection therewith Mr. Quinlan and the Company entered into an indemnification agreement in the form previously filed by the Company. In addition, upon Mr. Angelson's retirement John R. Paloian assumed the position of Chief Operating Officer of the Company.

(f) In connection with his assumption of the positions described above, Mr. Quinlan entered into a new employment agreement (the "Employment Agreement") with the Company.

Under the terms of the Employment Agreement:

— Mr. Quinlan's base salary was increased to $900,000 per year; and

— Mr. Quinlan will be eligible to receive an annual bonus with a target bonus opportunity of 150% of base salary.

The Employment Agreement provides that if the Company terminates Mr. Quinlan's employment without Cause (as defined in the Employment Agreement) or Mr. Quinlan terminates his employment for Good Reason (as defined in the Employment Agreement):

— the Company will pay Mr. Quinlan an amount equal to 200% of his base salary and target annual bonus over a period of 24 months;

— Mr. Quinlan will be entitled to continuation of all benefits for 24 months; and

— all outstanding equity grants previously issued to Mr. Quinlan will vest 100% as of the date of termination, except that performance awards will vest in accordance with their terms.

The Employment Agreement further provides that if, following a Change in Control (as defined in the Employment Agreement), the Company terminates Mr. Quinlan's employment without Cause or Mr. Quinlan terminates his employment for Good Reason:

— the Company will pay Mr. Quinlan an amount equal to 300% of his base salary and target annual bonus in a lump sum;

— Mr. Quinlan will be entitled to continuation of all benefits for 36 months;

— Mr. Quinlan will be entitled to additional tax gross-up payments if applicable;

— all outstanding equity grants previously issued to Mr. Quinlan will vest 100% as of the date of termination, except that performance awards will vest in accordance with their terms; and

— Mr. Quinlan will be entitled to a pro rata bonus for the year in which the termination occurs.

Mr. Paloian's salary was also increased to $700,000 per year in connection with his assumption of the position of Chief Operating Officer of the Company.

Item 9.01. Financial Statements and Exhibits

10.1 Employment Agreement between Thomas J. Quinlan III and the Company amended and restated as of April 30, 2007.

99.1 Press Release issued by R.R. Donnelley & Sons Company on May 1, 2007 reporting results for the first quarter ended March 31, 2007.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	R. R. DONNELLEY & SONS COMPANY
Date: May 1, 2007
	By:	/S/ SUZANNE S. BETTMAN
		Suzanne S. Bettman
		Executive Vice President, General Counsel & Secretary

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EXHIBIT INDEX

Exhibit Number	Description
10.1	Employment Agreement between Thomas J. Quinlan III and the Company amended and restated as of April 30, 2007.
99.1	Press Release issued by R.R. Donnelley & Sons Company on May 1, 2007 reporting results for the first quarter ended March 31, 2007.

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EX-10.1

Exhibit 10.1

R.R. Donnelley & Sons Company

111 South Wacker Drive

Chicago, IL 60606-4301

Amended and Restated as of April 30, 2007

Mr. Thomas J. Quinlan III

18 Sunset Hill Drive

Staten Island, NY 10301

Dear Tom:

The purpose of this letter is to amend and restate in its entirety the Employment Agreement, dated as of November 5, 2002 and amended as of April 25, 2005, between you and R.R. Donnelley & Sons Company (the “Company”). You are currently the Group President, RR Donnelley Global Services and Chief Financial Officer of the Company and, effective April 30, 2007, you shall serve as President and Chief Executive Officer of the Company in accordance with the terms and provisions of this Agreement as well as any employment and other policies applicable to employees of the Company and its subsidiaries from time to time during the term of your employment. All capitalized terms used but not defined in the text of this letter shall have the meanings assigned to such terms in Annex A.

We and you hereby acknowledge that your employment with the Company constitutes “at-will” employment and that either party may terminate this Agreement at any time, upon written notice of termination within a reasonable period of time before the effective date of the termination. With respect to the terms of your employment with the Company, you will have the customary duties, responsibilities and authorities of a president and chief executive officer at a corporation of a similar size and nature. You will report to the board of directors of the Company (the “Board”).

I. Compensation

You will receive the following compensation and benefits, from which the Company may withhold any amounts required by applicable law:

(i) The Company will pay you a base salary (“Base Salary”) at the rate of $900,000 per year. This Base Salary will be paid in accordance with the normal payroll practices of the Company.

(ii) You will be eligible to receive an annual bonus (the “Annual Bonus”) at a target level of 150% of Base Salary in respect of each fiscal year of the Company in accordance with the Company’s annual incentive compensation plan and payable if the Company achieves the performance objectives set forth by the Board (or any designated committee thereof) from time to time. The Annual Bonus shall be approved by the Board.

(iii) In addition, you will continue to be eligible to participate in any nonqualified pension plans and qualified plans in the same manner as you currently participate or may elect to participate from time to time after the date of this Agreement.

(iv) You shall be eligible for four (4) weeks vacation annually.

(v) You shall be eligible for a car allowance pursuant to policies applicable to senior officers of the Company from time to time during the term of your employment.

(vi) You shall be eligible for an allowance for financial planning (including tax advice and legal fees related thereto) pursuant to policies applicable to senior officers of the Company from time to time during the term of your employment.

(vii) You shall be eligible for supplemental term life insurance benefits and supplemental long-term disability benefits pursuant to policies applicable to senior officers of the Company from time to time during the term of your employment, provided that you are insurable in accordance with standard underwriting requirements (including passing any physical exams and providing any information necessary to obtain such insurance coverage).

II. Severance

(i) Termination Not Following a Change in Control

If, prior to a Change in Control, the Company terminates your employment as President and Chief Executive Officer without Cause or if you terminate your employment for Good Reason:

(A) the Company will pay you an amount equal to two times your Annualized Total Compensation, subject to the execution by you of a customary release, which amount shall be payable in equal installments over the twenty-four (24) months following the date your employment with the Company is terminated (the “Termination Date”);

(B) the Company will provide to you a continuation of all benefits, including a car allowance and other related benefits, if any, which you were eligible to receive immediately prior to such termination, for the twenty-four (24) months following the Termination Date; and

(C) all outstanding stock options, restricted stock or restricted stock unit awards or other equity grants (other than performance shares or performance share units) issued to you will vest 100% immediately as of the Termination Date.

Upon any termination of your employment prior to a Change in Control, any performance shares or performance share units will vest in accordance with the applicable award agreement. Your rights of indemnification under the Company’s and any of its subsidiaries organizational documents, any plan or agreement at law or otherwise and your rights thereunder to director’s and officer’s liability insurance coverage for, in both cases, actions as an officer and director of the Company and its affiliates shall survive any termination of your employment. In the event of any termination, you agree to resign as an officer and director of the Company and its subsidiaries and affiliates.

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(ii) Termination Following a Change in Control

If, following a Change in Control, the Company terminates your employment as President and Chief Executive Officer without Cause or if you terminate your employment for Good Reason:

(A) the Company will pay you an amount equal to three times your Annualized Total Compensation, subject to the execution by you of a customary release, which amount shall be paid to you in a lump sum as soon as is reasonably practicable following the Termination Date;

(B) the Company will provide to you a continuation of all benefits, including a car allowance and other related benefits, if any, which you were eligible to receive immediately prior to such termination, for the thirty-six (36) months following the Termination Date;

(C) the Company will make the additional payments provided in Annex B, if applicable;

(D) all outstanding stock options, restricted stock or restricted stock unit awards or other equity grants (other than performance shares or performance share units) issued to you will vest 100% immediately as of the Termination Date and any performance shares or performance share units will vest in accordance with the applicable award agreement; and

(E) you shall be entitled to a pro rata bonus under the Company’s annual bonus program in effect for the year in which the Termination Date occurs, which pro rata bonus shall be paid at the same time as annual bonuses for such year are paid to the Company’s senior executives and shall be equal to the amount, if any, which you would have received under such plan (without regard to any executive-specific objectives), on the basis of the Company’s actual performance for the year, had your employment not terminated, multiplied by a fraction, the numerator of which is the number of days in the year elapsed prior to the Termination Date and the denominator of which is 365.

Your rights of indemnification under the Company’s and any of its subsidiaries organizational documents, any plan or agreement at law or otherwise and your rights thereunder to director’s and officer’s liability insurance coverage for, in both cases, actions as an officer and director of the Company and its affiliates shall survive any termination of your employment. In the event of any termination, you agree to resign as an officer and director of the Company and its subsidiaries and affiliates.

Notwithstanding the foregoing, any termination by the Company without Cause or termination by you for Good Reason which takes place within six (6) months prior to a Change in Control, shall be, presumptively, a termination following a Change in Control.

III. Compliance with Section 409A of the Internal Revenue Code.

All payments and benefits pursuant to this letter shall be subject to the provisions of this Section III. If you are a “Specified Employee” of the Company for purposes of Internal Revenue Code Section 409A (“Code Section 409A”) at the time of a payment event set forth in this letter,

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then no severance or other payments or benefits pursuant to this letter shall be made to you by the Company until the amount of time has passed that is necessary to avoid incurring excise taxes under Code Section 409A. Should this Section III result in a delay of payments to you, on the first day any such payments may be made without incurring a penalty pursuant to Code Section 409A (the “409A Payment Date”), the Company shall begin to make such payments as provided for in this letter, provided that any amounts that would have been payable earlier but for the application of this Section III, shall be paid in lump-sum on the 409A Payment Date. For purposes of this provision, the term Specified Employee shall have the meaning set forth in Section 409A(2)(B)(i) of the Internal Revenue Code of 1986, as amended or any successor provision and the treasury regulations and rulings issued thereunder. If any compensation or benefits provided by this letter may result in the application of Code Section 409A, the Company shall, in consultation with you, modify this letter in the least restrictive manner necessary in order to exclude such compensation from the definition of “deferred compensation” within the meaning of such Code Section 409A or in order to comply with the provisions of Code Section 409A of the Code and without any diminution in the value of the payments or benefits to you.

IV. General

You agree (i) that at all times both during and after your employment, you will respect the confidentiality of Company’s and its subsidiaries and affiliates’ confidential information and will not disparage the Company and its subsidiaries and affiliates or their officers, directors or employees, and (ii) during your employment and for twenty-four (24) months thereafter, you will not (a) accept a position with, or provide material services to, an entity that competes with a portion of the Company’s business representing more than $25 million of the Company’s revenues on the date of your departure, (b) solicit or hire, or assist others in the solicitation or hiring of, the Company’s employees or (c) interfere with the Company’s business relationships with any material customers or suppliers.

All notices or communications under this Agreement must be in writing, addressed; (i) if to the Company, to the attention of the Chief Human Resources Officer at the Company’s address first written above and (ii) if to you, at your address first written above (or to any other addresses as either party may designate in a notice duly delivered as described in this paragraph). Any notice or communication shall be delivered by telecopy, by hand or by courier. Notices and communications may also be sent by certified or registered mail, return receipt requested, postage prepaid, addressed as above and the third business day after the actual date of mailing shall constitute the time at which notice was given.

Any controversy or claim arising out of or relating to this Agreement or the breach of this Agreement that cannot be resolved by you and the Company, including any dispute as to the calculation of any payments hereunder, and the terms of this Agreement, shall be determined by a single arbitrator in Chicago, Illinois, in accordance with the rules of the American Arbitration Association. The decision of the arbitrator shall be final and binding and may be entered in any court of competent jurisdiction. The arbitrator may award the party he determines has prevailed in the arbitration any legal fees and other fees and expenses that may be incurred in respect of enforcing its respective rights under this Agreement. This Agreement shall be interpreted in accordance with the laws of Illinois.

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This Agreement sets forth the entire agreement between us with respect to the matters set forth herein, and fully supersedes any prior agreements or understandings between us. This Agreement may be executed in counterparts. This Agreement may not be modified or terminated orally.

If the foregoing terms and conditions are acceptable and agreed to by you, please sign on the line provided below to signify such acceptance and agreement and return the executed copy to the Chief Human Resources Officer of the Company, at the Company’s address first written above.

	R.R. Donnelley & Sons Company
	By:	/s/ Suzanne S. Bettman
	Name:	Suzanne S. Bettman
	Title:	EVP, General Counsel
Accepted and Agreed as of this 30th day of April, 2007
/s/ Thomas J. Quinlan III
Thomas J. Quinlan III

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Annex A

Definitions

a. “Annualized Total Compensation” means Base Salary plus Annual Bonus (as if all necessary targets and objectives were met at target level) for one year at the rate in effect immediately before the Termination Date.

b. “Cause” means (i) the willful and continued failure of Executive to perform substantially his duties with the Company (other than any such failure resulting from Executive’s incapacity due to physical or mental illness or any such failure subsequent to Executive being delivered a notice of termination without Cause by the Company or delivering a notice of termination for Good Reason to the Company) after a written demand for substantial performance is delivered to Executive by the Chairman or the Board that specifically identifies the manner in which the Chairman or the Board believes that Executive has not substantially performed Executive’s duties, (ii) the willful engaging by Executive in illegal conduct or misconduct which is demonstrably and materially injurious (monetarily or otherwise) to the Company or its subsidiaries and affiliates, (iii) conviction of or the pleading of nolo contendere with regard to, a felony or any crime involving fraud, dishonesty or moral turpitude, or (iv) refusal or failure to attempt in good faith to follow the written direction of the Chairman or the Board (provided that such written direction is consistent with Executive’s duty and station) promptly upon receipt of such written direction. A termination for Cause after a Change in Control shall be based only on events occurring after such Change in Control; provided, however, the foregoing limitation shall not apply to an event constituting Cause which was not discovered by the Company prior to a Change in Control. For purpose of this paragraph (a), no act or failure to act by Executive shall be considered “willful” unless done or omitted to be done by Executive in bad faith and without reasonable belief that Executive’s action or omission was in the best interests of the Company or its subsidiaries and affiliates. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Company shall provide Executive a reasonable amount of time, after a notice and demand for substantial performance is delivered to Executive, to cure any failure to perform, and if such failure is so cured within a reasonable amount of time thereafter, such failure shall not be deemed to have occurred.

c. “Change in Control” means the occurrence of any one of the following events:

(i) individuals who, on the date of this Agreement, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date of this Agreement, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

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(ii) any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the “Company Voting Securities”); provided, however, that the event described in this paragraph (ii) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by the Company or any subsidiary, (B) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary, (C) by any underwriter temporarily holding securities pursuant to an offering of such securities, or (D) pursuant to a Non-Qualifying Transaction (as defined in paragraph (iii);

(iii) the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its Subsidiaries that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination: (A) more than 50% of the total voting power of (x) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (B) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of 35% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) other than persons set forth in (A) through (F) of paragraph (ii) and (C) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”);

(iv) the closing of a sale of all or substantially all of the Company’s assets, other than to an entity or in a manner where the voting securities immediately prior to such sale represent directly or indirectly after such sale at least 50% of the voting securities of the entity acquiring such assets in approximately the same proportion as prior to such sale; or

(v) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.

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Notwithstanding the foregoing, a Change in Control of the Company shall not be deemed to occur solely because any person acquires beneficial ownership of more than 35% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding; provided, that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in Control of the Company shall then occur.

d. “Good Reason” means, without Executive’s express written consent, the occurrence of any of the following events:

(i) a change in the Executive’s duties or responsibilities (including reporting responsibilities) that taken as a whole represents a material and adverse diminution of the Executive’s duties, responsibilities or status with the Company (other than a temporary change that results from or relates to the incapacitation of the Executive due to physical or mental illness);

(ii) a reduction by the Company in Executive’s rate of annual base salary or annual target bonus opportunity (including any material and adverse change in the formula for such annual bonus target) as the same may be increased from time to time thereafter;

(iii) any requirement of the Company that Executive’s office be more than seventy-five (75) miles from Executive’s place of residence as of the date of this Agreement; or

(iv) any material breach of the Agreement by the Company.

Notwithstanding the foregoing, a Good Reason event shall not be deemed to have occurred if the Company cures such action, failure or breach within ten (10) days after receipt of notice thereof given by Executive. Executive’s right to terminate employment for Good Reason shall not be affected by Executive’s incapacities due to mental or physical illness and Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason; provided, however, that Executive must provide notice of termination of employment within ninety (90) days following Executive’s knowledge of an event constituting Good Reason or such event shall not constitute Good Reason under this Agreement.

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Annex B

Gross-Up Payments

(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of Executive (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Annex B) (the “Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Company shall pay to Executive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. For purposes of determining the amount of the Gross-up Payment, the Executive shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-up Payment is to be made, and (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. Notwithstanding the foregoing provisions of this Annex B, if it shall be determined that Executive is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as “parachute payments” under Section 280G of the Code, then the amounts payable to Executive under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), and no Gross-Up Payment shall be made to Executive. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section I(a)(ii), unless an alternative method of reduction is elected by Executive. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision.

(b) Subject to the provisions of paragraph (a) of this Annex B, all determinations required to be made under this Annex B, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from the Company or the Executive that there has been a Payment, or such earlier time as is requested by the Company (collectively, the “Determination”). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in

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Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-up Payment under this Annex B with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Executive with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”) or Gross-up Payments are made by the Company which should not have been made (“Overpayment”), consistent with the calculations required to be made hereunder. In the event that the Executive thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Executive. In the event the amount of the Gross-up Payment exceeds the amount necessary to reimburse the Executive for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Executive (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Executive shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax and the Executive shall permit the Company to control issues related to the Excise Tax (at its expense) to permit a representative of the Company to accompany the Executive to any conference with any taxing authority and to promptly deliver to the Company copies of any written communications and summaries of any verbal communications with any taxing authority regarding the Excise Tax.

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EX-99.1

Exhibit 99.1

RR DONNELLEY REPORTS FIRST-QUARTER 2007 RESULTS

Highlights:

• First-Quarter 2007 GAAP net earnings from continuing operations of $138.9 million or $0.63 per diluted share vs. $114.2 million or $0.52 per diluted share in the first quarter of 2006

• First-Quarter 2007 Non-GAAP net earnings from continuing operations of $145.9 million or $0.66 per diluted share vs. $124.4 million or $0.57 per diluted share in the first quarter of 2006

• Reaffirms full-year, 2007 Non-GAAP net earnings per diluted share from continuing operations guidance of $2.70 to $2.75, but trending toward the high end of the range

• Investor Meeting to be held in New York on Thursday, June 21, 2007

CHICAGO, May 1, 2007 — R.R. Donnelley & Sons Company (NYSE: RRD) today reported first-quarter 2007 net earnings from continuing operations of $138.9 million or $0.63 per diluted share on net sales of $2.8 billion compared to net earnings from continuing operations of $114.2 million or $0.52 per diluted share on net sales of $2.3 billion in the first quarter of 2006. The first-quarter net earnings from continuing operations included, in 2007, pre-tax charges for restructuring ($11.3 million) and impairment ($0.1 million) totaling $11.4 million and in 2006, pre-tax charges for restructuring ($16.2 million) and impairment ($0.4 million) totaling $16.6 million, substantially all associated with the reorganization of certain operations and the exiting of certain business operations. The company’s effective tax rate decreased to 32.8% in the first quarter of 2007 from 35.5% in the first quarter of 2006, primarily reflecting an increased benefit from the domestic manufacturing deduction and the benefit from a larger proportion of taxable income being generated in lower tax jurisdictions in 2007. The company recorded a loss from discontinued operations of $0.1 million in the first quarter of 2007 and $2.3 million in the first quarter of 2006. Including discontinued operations, net earnings were $138.8 million or $0.63 per diluted share in the first quarter of 2007 and $111.9 million or $0.51 per diluted share in the first quarter of 2006.

The company believes that certain non-GAAP measures, when presented in conjunction with comparable GAAP (Generally Accepted Accounting Principles) 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.

Non-GAAP net earnings from continuing operations totaled $145.9 million or $0.66 per diluted share in the first quarter of 2007 compared to $124.4 million or $0.57 per diluted share in the first quarter of 2006. Non-GAAP net earnings from continuing operations exclude restructuring and impairment charges in the first quarter of both 2007 and 2006. For non-GAAP comparison purposes, the effective tax rate decreased to 33.1% in the first quarter of 2007 from 35.8% in the first quarter of 2006, primarily reflecting an increased benefit from the domestic manufacturing deduction and the benefit from a larger proportion of taxable income being generated in lower tax jurisdictions in 2007. A reconciliation of GAAP net earnings to non-GAAP net earnings for these adjustments is presented in the attached tables.

RR DONNELLEY REPORTS FIRST QUARTER 2007 RESULTS

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“We are pleased by the strong operating results in the first quarter,” said Tom Quinlan, RR Donnelley’s President and Chief Executive Officer. “Our integration of Banta Corporation and Perry Judd’s, both of which were acquired in the first quarter, has been seamless to customers and has begun to deliver the promised synergy benefits. As we began to manage the assets and workload from each legacy company as one RR Donnelley, we loaded our platform very efficiently in the quarter. Our Global Print Solutions segment continued to deliver strong results with good revenue growth and, while Banta and Perry Judd’s carried a lower operating margin pre-acquisition, solid integration efforts and strong performance in our legacy business began to close the margin gap. Our Global Services segment, led by our financial print offering, posted solid operating performance, improving profitability significantly from the fourth-quarter of 2006. Cash from continuing operations was strong in the seasonally lighter first quarter.”

Quinlan added, “We want to thank Mark Angelson for his guidance and leadership. Under his direction, the company made great progress over the past three years. Our leadership team and our exceptionally talented employees will continue to execute our proven strategy for serving customers with the broadest range of products and services, maintaining intense financial discipline, and striving to be the highest quality and lowest cost producer in each sector that we serve.”

Business Review (Continuing Operations)

The company reports its results in two reportable segments, 1) Global Print Solutions and 2) Global Services, and Corporate.

Summary

During the first quarter of 2007, we acquired Banta Corporation and Perry Judd’s, both of which had a lower operating margin historically. Our proven financial discipline and approach to achieving productivity increases already have had a positive margin impact in these operations, and we see opportunities for continued improvement.

Net sales in the quarter were $2.8 billion, up 23.2% from the first quarter of 2006. The increase was due to acquisitions as well as new customer wins and increased volume with existing customers and favorable foreign exchange comparisons, offset in part by continued price pressure. The gross margin rate decreased to 26.4% in the first quarter of 2007 from 26.7% in the first quarter of 2006 reflecting the inclusion of the historically lower-margin Banta and Perry Judd’s operations that more than offset the benefits from higher sales volume and our productivity efforts. SG&A expense as a percentage of net sales was 11.6% in the first quarter of both 2007 and 2006. Operating margin, which was negatively impacted by charges for impairment and restructuring totaling $11.4 million in the first quarter of 2007 and $16.6 million in the first quarter of 2006, was 9.3% in the first quarter of both 2007 and 2006.

Excluding charges for restructuring and impairment, non-GAAP operating income increased 18.1% to $269.9 million in the first quarter of 2007 compared to the first quarter of 2006. Non-GAAP operating margin in the first quarter of 2007 was 9.7% compared to 10.1% in the first quarter of 2006 reflecting the inclusion of the historically lower-margin Banta and Perry Judd’s operations that more than offset the benefits from higher sales volume and our productivity efforts. Reconciliations of GAAP operating income and margin to non-GAAP operating income and margin are presented in the attached tables.

RR DONNELLEY REPORTS FIRST QUARTER 2007 RESULTS

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Segments

Net sales for the Global Print Solutions segment increased 32.8% to $1.8 billion from the first quarter of 2006 due to the Banta and Perry Judd’s acquisitions as well as sales increases in our international operations, short-run commercial print, book and logistics offerings and favorable foreign exchange comparisons. The segment’s operating margin, which was negatively impacted by restructuring charges of $4.3 million in the first quarter of 2007 and $5.2 million in the first quarter of 2006, decreased to 12.4% in the first quarter of 2007 from 12.9% in the first quarter of 2006. Excluding restructuring charges, the segment’s non-GAAP operating income increased 26.0% to $229.8 million. Non-GAAP operating margin in the first quarter of 2007 decreased to 12.6% from 13.3% in the first quarter of 2006 reflecting the inclusion of the historically lower-margin Banta and Perry Judd’s operations that more than offset the benefits of our productivity initiatives.

Net sales for the Global Services segment increased 8.5% to $970.8 million from the first quarter of 2006 due to the acquisitions of OfficeTiger in April, 2006 and Banta as well as sales growth in financial print and favorable foreign exchange comparisons, offset in part by lower sales of statement printing. The segment’s operating margin, which was negatively impacted by charges for restructuring and impairment totaling $3.0 million in the first quarter of 2007 and $5.4 million in the first quarter of 2006, decreased to 9.0% in the first quarter of 2007 from 9.3% in the first quarter of 2006. Non-GAAP operating margin decreased to 9.3% in the first quarter of 2007 from 9.9% in the first quarter of 2006. This decrease was due to continued price pressure and the performance of statement printing.

Corporate operating expenses increased to $54.3 million in the first quarter of 2007 from $48.4 million in the first quarter of 2006. Excluding restructuring charges of $4.1 million in the first quarter of 2007 and $6.0 million in the first quarter of 2006, corporate operating expenses increased $7.8 million to $50.2 million from the first quarter of the prior year reflecting the acquisitions of Banta and Perry Judd’s that more than offset the benefit of our productivity initiatives and a $5.8 million reversal of post-retirement expenses related to the voluntary retirement of Mark Angelson.

Outlook—2007 Full-Year Non-GAAP EPS from Continuing Operations

For the full year of 2007, RR Donnelley is projecting non-GAAP net earnings per diluted share from continuing operations to be in the range of $2.70 to $2.75, but trending toward the high end of the range. This guidance includes the impact of the previously announced acquisitions and assumes no shares repurchased under the authorization available to the company. The non-GAAP effective tax rate for 2007 is expected to be approximately 33.7%.

GAAP net earnings per diluted share from continuing operations in 2007 may include restructuring, impairment and integration charges, 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 estimates at this time.

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Investor Meeting to be held June 21, 2007 in New York City

An Investor Meeting will be held in New York City on Thursday, June 21, 2007 from 10:00 AM – 1:30 PM (Eastern Time). The company plans to provide an overview of its product and service offerings and discuss its business initiatives, financial outlook, and priorities for capital deployment. A management presentation will be followed by a question and answer session. This meeting will be webcast and details will be posted in advance on the company’s website, www.rrdonnelley.com.

Conference Call RR Donnelley will host a conference call and simultaneous webcast to discuss its first-quarter results today, Tuesday, May 1, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). The live webcast will be accessible on RR Donnelley’s web site: http://www.rrdonnelley.com. Individuals wishing to participate can join the conference call by dialing 706.634.1139. A webcast replay will be archived on the Company’s web site for 30 days after the call. In addition, a telephonic replay of the call will be available for seven days at 706.645.9291, passcode 5969650.

About RR Donnelley

RR Donnelley (NYSE: RRD) is the world’s premier full-service provider of print and related services, including business process outsourcing. Founded more than 140 years ago, the company provides solutions in commercial printing, direct mail, financial printing, print fulfillment, labels, forms, logistics, call centers, transactional print-and-mail, print management, online services, digital photography, color services, and content and database management to customers in the publishing, healthcare, advertising, retail, technology, financial services and many other industries. The largest companies in the world and others rely on RR Donnelley’s scale, scope and insight through a comprehensive range of online tools, variable printing services and market-specific solutions. For more information, visit the company’s web site at www.rrdonnelley.com.

Contact Information
Media:	Investors:
Doug Fitzgerald	Dan Leib
EVP, Marketing & Communications	SVP, Finance
312-326-7740	312-326-7710
doug.fitzgerald@rrd.com	dan.leib@rrd.com

Use of Forward-Looking Statements

This news release contains “forward-looking statements” 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 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. 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

RR DONNELLEY REPORTS FIRST QUARTER 2007 RESULTS

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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.

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R. R. Donnelley & Sons Company

Consolidated Balance Sheets

As of March 31, 2007 and December 31, 2006

(UNAUDITED)

(In millions, except per share data)

	March 31, 2007			December 31, 2006
Assets
Current Assets
Cash and cash equivalents	$	299.6		$	211.4
Restricted cash equivalents		34.8			—
Receivables, less allowance for doubtful accounts		2,010.9			1,638.6
Inventories		626.0			501.8
Prepaid expenses and other current assets		89.5			70.4
Deferred income taxes		124.4			94.8
Total Current Assets		3,185.2			2,517.0
Property, plant and equipment - net		2,556.8			2,142.3
Goodwill		3,565.5			2,886.8
Other intangible assets - net		1,485.8			1,119.8
Prepaid pension cost		763.9			638.6
Other noncurrent assets		438.7			331.3
Total Assets	$	11,995.9		$	9,635.8
Liabilities
Current Liabilities
Accounts payable		918.7			749.1
Accrued liabilities		965.0			839.2
Short-term debt and current portion of long-term debt		348.5			23.5
Total Current Liabilities		2,232.2			1,611.8
Long-term debt		3,601.8			2,358.6
Postretirement benefit obligations		292.8			288.0
Deferred income taxes		860.0			604.1
Other noncurrent liabilities		730.1			645.4
Liabilities from discontinued operations		2.9			3.2
Total Liabilities	$	7,719.8		$	5,511.1
Shareholders’ Equity
Preferred stock, $1.00 par value		—			—
Authorized shares: 2.0; Issued: None
Common stock, $1.25 par value
Authorized shares: 500.0 Issued shares: 243.0 in 2007 and 2006		303.7			303.7
Additional paid-in capital		2,831.3			2,871.8
Retained earnings		1,669.0			1,615.0
Accumulated other comprehensive income		140.7			62.1
Treasury stock, at cost, 22.3 shares in 2007 (2006 - 24.2 shares)		(668.6	)		(727.9	)
Total Shareholders’ Equity	$	4,276.1		$	4,124.7
Total Liabilities and Shareholders’ Equity	$	11,995.9		$	9,635.8

As of January 1, 2007, the Company adopted FIN 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109”. Upon adoption, the Company recorded increases to other noncurrent liabilities, goodwill, and other noncurrent assets of $82.8 million, $27.6 million, and $1.4 million, respectively, and decreases to accrued liabilities and noncurrent deferred income tax liabilities of $15.1 million and $13.8 million, respectively. The net effect of these changes to assets and liabilities of $24.9 million was recorded as a cumulative effect adjustment to retained earnings.

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R. R. Donnelley & Sons Company

Consolidated Statements of Operations

Three Months Ended March 31, 2007 and 2006

(In millions, except per share data)

(UNAUDITED)

	Three months ended March 31,
	2 0 0 7 GAAP			ADJUSTMENTS TO NON-GAAP			2 0 0 7 NON-GAAP		2 0 0 6			ADJUSTMENTS TO NON-GAAP			2 0 0 6 NON-GAAP
Net sales	$	2,792.6		$	—		$	2,792.6	$	2,266.9		$	—		$	2,266.9
Cost of sales (exclusive of depreciation and amortization shown below)		2,056.0			—			2,056.0		1,661.5			—			1,661.5
Selling, general and administrative expenses (exclusive of depreciation and amortization shown below)		324.5			—			324.5		262.1			—			262.1
Restructuring and impairment charges - net		11.4			(11.4	)		—		16.6			(16.6	)		—
Depreciation and amortization		142.2			—			142.2		114.8			—			114.8
Total operating expenses		2,534.1			(11.4	)		2,522.7		2,055.0			(16.6	)		2,038.4
Income from continuing operations		258.5			11.4			269.9		211.9			16.6			228.5
Interest expense - net		53.4			—			53.4		34.8			—			34.8
Investment and other income (expense) - net		2.2			—			2.2		(0.8	)		—			(0.8	)
Earnings from continuing operations before income taxes and minority interest		207.3			11.4			218.7		176.3			16.6			192.9
Income tax expense		67.9			4.4			72.3		62.6			6.4			69.0
Minority interest		0.5			—			0.5		(0.5	)		—			(0.5	)
Net earnings from continuing operations		138.9			7.0			145.9		114.2			10.2			124.4
Income (loss) from discontinued operations - net of tax		(0.1	)		0.1			—		(2.3	)		2.3			—
Net earnings	$	138.8		$	7.1		$	145.9	$	111.9		$	12.5		$	124.4
Earnings per share:
Basic:
Net earnings from continuing operations	$	0.64					$	0.67	$	0.53					$	0.57
Loss from discontinued operations, net of tax		—						—		(0.01	)					—
Net earnings	$	0.64					$	0.67	$	0.52					$	0.57
Diluted:
Net earnings from continuing operations	$	0.63					$	0.66	$	0.52					$	0.57
Loss from discontinued operations, net of tax		—						—		(0.01	)					—
Net earnings	$	0.63					$	0.66	$	0.51					$	0.57
Weighted average common shares outstanding:
Basic		218.5						218.5		216.5						216.5
Diluted		220.5						220.5		217.8						217.8

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 this indicator. These measures should be considered in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

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R.R. Donnelley & Sons Company

Reconciliation of GAAP to Non-GAAP Measures

IN MILLIONS, EXCEPT PER SHARE AND MARGIN DATA

(UNAUDITED)

	Three months ended March 31, 2007								Three months ended March 31, 2006
	Income from continuing operations		Operating margin		Net earnings		Net earnings per diluted share		Income from continuing operations		Operating margin		Net earnings		Net earnings per diluted share
GAAP basis measures	$	258.5	9.3	%	$	138.8	$	0.63	$	211.9	9.3	%	$	111.9	$	0.51
Non-GAAP adjustments:
Restructuring and impairment charges, net (1)		11.4	0.4	%		7.0		0.03		16.6	0.8	%		10.2		0.05
Net loss from discontinued operations (2)		—	—			0.1		—		—	—			2.3		0.01
Total non-GAAP adjustments		11.4	0.4	%		7.1		0.03		16.6	0.8	%		12.5		0.06
Non-GAAP measures	$	269.9	9.7	%	$	145.9	$	0.66	$	228.5	10.1	%	$	124.4	$	0.57

(1) Restructuring and impairment (pre-tax): Operating results for the three months ended March 31, 2007 and 2006, respectively, were affected by the following restructuring and impairment charges:

- $9.3 million and $13.5 million for employee termination costs, substantially all of which were associated with restructuring actions resulting from the reorganization of certain operations and the exiting of certain business activities; $2.0 million and $2.7 million of other restructuring costs, including lease termination and other facility closure costs; and $0.1 million and $0.4 million of impairment of other long-lived assets.

(2) Net loss from discontinued operations: Net loss from discontinued operations included costs of $0.1 million and $2.3 million for the three months ended March 31, 2007 and 2006, respectively, which primarily reflect costs resulting from a subtenant bankruptcy related to a facility previously occupied by the Company’s package logistics business.

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R. R. Donnelley & Sons Company

Segment GAAP to Non-GAAP Operating Income and Margin Reconciliation

For the three months ended March 31, 2007 and 2006

$ IN MILLIONS

(UNAUDITED)

	Global Print Solutions			Global Services			Corporate			Consolidated
Three Months Ended March 31, 2007
Net Sales	$	1,821.8		$	970.8		$	—		$	2,792.6
Operating Expense		1,596.3			883.5			54.3			2,534.1
Operating Income (Loss)		225.5			87.3			(54.3	)		258.5
Operating Margin %		12.4	%		9.0	%		nm			9.3	%
Non-GAAP Adjustments
Restructuring charges		4.3			2.9			4.1			11.3
Impairment charges		—			0.1			—			0.1
Integration charges		—			—			—			—
Total Non-GAAP Adjustments		4.3			3.0			4.1			11.4
Operating income (loss) excluding restructuring, impairment and integration charges	$	229.8		$	90.3		$	(50.2	)	$	269.9
Operating margin before restructuring, impairment and integration charges %		12.6	%		9.3	%		nm			9.7	%
Depreciation and amortization		90.9			42.6			8.7			142.2
Capital expenditures		90.8			14.4			4.2			109.4
Three Months Ended March 31, 2006
Net Sales	$	1,371.8		$	895.1		$	—		$	2,266.9
Operating Expense		1,194.6			812.0			48.4			2,055.0
Operating Income (Loss)		177.2			83.1			(48.4	)		211.9
Operating Margin %		12.9	%		9.3	%		nm			9.3	%
Non-GAAP Adjustments
Restructuring charges		5.2			5.0			6.0			16.2
Impairment charges		—			0.4			—			0.4
Integration charges		—			—			—			—
Total Non-GAAP Adjustments		5.2			5.4			6.0			16.6
Operating income (loss) excluding restructuring, impairment and integration	$	182.4		$	88.5		$	(42.4	)	$	228.5
Operating margin before restructuring, impairment and integration charges %		13.3	%		9.9	%		nm			10.1	%
Depreciation and amortization		67.6			39.4			7.8			114.8
Capital expenditures		76.4			11.2			3.3			90.9

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R. R. Donnelley & Sons Company

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2007 and 2006

IN MILLIONS

(UNAUDITED)

	2007			2006
Operating Activities
Net earnings	$	138.8		$	111.9
Net loss from discontinued operations		0.1			2.3
Adjustment to reconcile net earnings to cash provided by operating activities		153.6			142.0
Changes in operating assets and liabilities		(70.8	)		(146.6	)
Net cash provided by operating activities of continuing operations		221.7			109.6
Net cash used in operating activities of discontinued operations		(0.3	)		(0.6	)
Net cash provided by operating activities		221.4			109.0
Net cash used in investing activities of continuing operations		(1,654.9	)		(90.1	)
Net cash used in investing activities of discontinued operations		—			—
Net cash used in investing activities		(1,654.9	)		(90.1	)
Net cash provided by (used in) financing activities of continuing operations		1,519.2			(65.8	)
Net cash used in financing activities of discontinued operations		—			—
Net cash provided by (used in) financing activities		1,519.2			(65.8	)
Effect of exchange rate on cash and cash equivalents		2.5			0.9
Net increase (decrease) in cash and cash equivalents		88.2			(46.0	)
Cash and cash equivalents at beginning of period		211.4			366.7
Cash and cash equivalents at end of period	$	299.6		$	320.7

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R.R. Donnelley & Sons Company

Revenue Reconciliation Reported to Pro Forma

For the three months ended March 31, 2007 and 2006

$ IN MILLIONS

(UNAUDITED)

	Reported net sales			Adjustment for net sales of acquired businesses		Pro forma net sales
Three Months Ended March 31, 2007
Global Print Solutions	$	1,821.8		$	48.6	$	1,870.4
Global Services		970.8			1.5		972.3
Consolidated	$	2,792.6		$	50.1	$	2,842.7
Three Months Ended March 31, 2006
Global Print Solutions	$	1,371.8		$	434.7	$	1,806.5
Global Services		895.1			43.4		938.5
Consolidated	$	2,266.9		$	478.1	$	2,745.0
Net sales change
Global Print Solutions		32.8	%				3.5	%
Global Services		8.5	%				3.6	%
Consolidated		23.2	%				3.6	%

The reported results of the company include the results of acquired businesses from the acquisition date forward. The company has provided this schedule to reconcile reported net sales for the three months ended March 31, 2007 and 2006 to pro forma net sales as if the acquisitions took place at the beginning of the respective periods.

For the three months ended March 31, 2007, the adjustment for net sales of acquired businesses reflects the net sales of Banta Corporation (acquired January 9, 2007) and Perry Judd’s Holdings Incorporated (acquired January 24, 2007).

For the three months ended March 31, 2006 the adjustment for net sales of acquired businesses reflects the net sales of OfficeTiger Holdings, Inc. (acquired April 27, 2006), Banta Corporation (acquired January 9, 2007) and Perry Judd’s Holdings Incorporated (acquired January 24, 2007).