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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994MARCH 31, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-4694
R. R. DONNELLEY & SONS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-1004130
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
77 WEST WACKER DRIVE, CHICAGO,
ILLINOIS 60601
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER (312) 326-8000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days.
X
Yes------- No -------
NUMBER OF SHARES OF COMMON STOCK
OUTSTANDING
AS OF OCTOBER 31, 1994 153,398,170APRIL 30, 1995 153,501,871
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PAGE
INDEX NUMBER(S)
----- ---------
Condensed Consolidated Statements of Income (Unaudited) for
the three months ended March 31, 1995 and nine month periods ended September 30, 1994 and
1993..........................................................1994............... 3
Condensed Consolidated Balance Sheets as of March 31, 1995
(Unaudited) at September
30, 1994 and December 31, 1993................................1994............................ 4-5
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the ninethree months ended September 30, 1994March 31, 1995 and 1993.............1994........... 6
Notes to Condensed Consolidated Financial Statements (Unau-
dited)............................................................................................................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations--Comparison of ThirdFirst Quarter and1995 to
First Nine Months 1994 to 1993......................................Quarter 1994........................................... 8
Changes in Financial Condition................................. 8-9Condition................................ 8
2
R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES
----------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31
(THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
THIRD QUARTER YEAR TO DATE
----------------------- -----------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------- -----------------------1995 1994 1993 1994 1993
----------- -----------
----------- -----------
Net sales....................sales.............................................. $ 1,242,9731,318,089 $ 1,123,848 $ 3,431,188 $ 3,078,1531,070,877
Cost of sales................ 987,927 891,826 2,764,470 2,475,945
----------- -----------sales.......................................... 1,088,274 877,024
----------- -----------
Gross profit................. 255,046 232,022 666,718 602,208profit........................................... 229,815 193,853
Selling and administrative expenses.................... 122,848 110,156 356,118 319,441
Restructuring charge......... -- -- -- 90,000
----------- -----------135,355 115,150
----------- -----------
Earnings from operations..... 132,198 121,866 310,600 192,767operations............................... 94,460 78,703
Interest expense........... 13,569 11,149 37,768 33,613expense....................................... 22,584 11,728
Other (income) expense,
net....................... 880 (1,945) 6,356 1,065
----------- ----------- ----------- -----------
Total other expense........ 14,449 9,204 44,124 34,678
----------- -----------expense--net..................................... 2,991 4,040
----------- -----------
Earnings before income taxes
and cumulative effect of
accounting changes.......... 117,749 112,662 266,476 158,089taxes........................... 68,885 62,935
Provision for income taxes... 37,679 43,211 85,272 57,975
----------- -----------taxes............................. 22,043 20,139
----------- -----------
Net income from operations
before cumulative effect of
accounting changes.......... 80,070 69,451 181,204 100,114
Cumulative effect of change
in accounting for
postretirement benefits
other than pensions
(net of $80.1 million in tax
benefits)................... -- -- -- (127,700)
Cumulative effect of change
in accounting for
income taxes................ -- -- -- 58,200
----------- ----------- ----------- -----------
Net income...................income............................................. $ 80,07046,842 $ 69,451 $ 181,204 $ 30,61442,796
=========== ===========
=========== ===========
Income (charge) perPer common share:
Operations before
cumulative effect of
accounting changes........Net income........................................... $ 0.520.31 $ 0.45 $ 1.18 $ 0.65
Cumulative effect of change
in accounting for
postretirement benefits
other than pensions (net
of tax benefits).......... -- -- -- (0.82)
Cumulative effect of change
in accounting for income
taxes..................... -- -- -- 0.37
----------- ----------- ----------- -----------
Net income................. $ 0.52 $ 0.45 $ 1.18 $ 0.20
=========== ===========0.28
=========== ===========
Cash dividends.............dividends....................................... $ 0.16 $ 0.14
$ 0.44 $ 0.40
=========== =========== =========== ===========
Average shares outstanding... 153,816,000 154,474,000 154,117,000 154,684,000
=========== ===========outstanding............................. 153,123,000 154,275,000
=========== ===========
See accompanying Notes to Condensed Consolidated Financial Statements.
3
R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES
----------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 1994MARCH 31, 1995 AND DECEMBER 31, 19931994
(THOUSANDS OF DOLLARS)
ASSETS
1995 1994 1993
---------- ----------
Cash and equivalents...................................equivalents............................... $ 21,46014,511 $ 10,71620,569
Receivables, less allowance for doubtful accounts
of $17,414$20,170 and $14,795$19,168 at September 30, 1994March 31, 1995 and
December 31, 1993,
respectively.......................................... 946,279 825,2071994, respectively................... 987,890 987,520
Inventories, principally at LIFO cost.................. 302,594 243,714cost.............. 365,072 311,237
Prepaid expenses....................................... 27,349 30,277expenses................................... 74,028 34,004
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Total current assets............................... 1,297,682 1,109,914assets............................. 1,441,501 1,353,330
---------- ----------
Property, plant and equipment, at cost................. 3,679,823 3,361,255cost............. 3,804,477 3,708,844
Accumulated depreciation............................... (1,835,820) (1,686,779)depreciation........................... 1,919,839 1,852,084
---------- ----------
Net property, plant and equipment.................. 1,844,003 1,674,476
Goodwill--net.......................................... 540,780 493,672
Other.................................................. 429,478 375,964equipment................ 1,884,638 1,856,760
Goodwill and other intangibles--net................ 884,660 887,071
Other noncurrent assets............................ 402,803 354,982
---------- ----------
Total assets....................................... $4,111,943 $3,654,026assets..................................... $4,613,602 $4,452,143
========== ==========
See accompanying Notes to Condensed Consolidated Financial Statements.
4
R.R.R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES
----------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 1994MARCH 31, 1995 AND DECEMBER 31, 19931994
(THOUSANDS OF DOLLARS)
LIABILITIES AND SHAREHOLDERS' EQUITY
1995 1994 1993
---------- ----------
Accounts payable.......................................payable................................. $ 398,053414,043 $ 333,862422,703
Accrued compensation................................... 87,263 78,284compensation............................. 78,238 107,167
Short-term debt........................................ 37,400 37,428debt.................................. 32,400 32,400
Current and deferred income taxes...................... 66,213 40,698taxes................ 83,298 46,912
Other accrued liabilities.............................. 228,905 195,169liabilities........................ 207,782 192,668
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Total current liabilities............................ 817,834 685,441liabilities...................... 815,761 801,850
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Long-term debt......................................... 876,389 673,422debt................................... 1,327,510 1,212,332
Deferred income taxes.................................. 258,875 272,959taxes............................ 292,448 286,904
Other noncurrent liabilities........................... 213,776 178,213liabilities..................... 175,533 172,688
Shareholders' equity:
Common stock, at stated value........................value.................. 330,612 330,612
Retained earnings, includingnet of cumulative
translation adjustments of ($5,497)$24,223 and ($13,140)$18,235
at September
30, 1994March 31, 1995 and December 31, 1993, respectively........ 1,753,600 1,629,6731994,
respectively.................................. 1,823,164 1,802,777
Reacquired common stock, at cost..................... (139,143) (116,294)cost............... (151,426) (155,020)
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Total shareholders' equity......................... 1,945,069 1,843,991equity................. 2,002,350 1,978,369
---------- ----------
Total liabilities and shareholders' equity......... $4,111,943 $3,654,026equity. $4,613,602 $4,452,143
========== ==========
See accompanying Notes to Condensed Consolidated Financial Statements.
5
R.R.R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES
----------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINETHREE MONTHS ENDED SEPTEMBER 30MARCH 31
(THOUSANDS OF DOLLARS)
1995 1994 1993
--------- ---------
Cash flows provided by (used in) operating activities:
Net income from operations before cumulative effect of
accounting changes....................................income............................................. $ 181,20446,842 $ 100,11442,796
Depreciation and amortization.......................... 232,599 203,88192,178 76,124
Net change in assets and liabilities................... (47,395) (56,879)(100,835) (70,370)
Other.................................................. 5,598 6,562(7,239) 1,951
--------- ---------
Net cash provided by operating activities............ 372,006 253,678activities................ 30,946 50,501
--------- ---------
Cash flows used for investing activities:
Capital expenditures................................... (338,584) (233,318)(107,683) (113,922)
Other investments including acquisitions, net of cash
acquired.............................................. (104,860) (106,501)(21,184) (13,112)
--------- ---------
Net cash used for investing activities............... (443,444) (339,819)activities................... (128,867) (127,034)
--------- ---------
Cash flows from (used for) financing activities:
Net increase in borrowings............................. 170,008 177,326115,178 96,976
Disposition of reacquired common stock................. 18,689 13,03020,836 16,270
Acquisition of common stock............................ (38,637) (40,086)(13,233) (6,696)
Cash dividends on common stock......................... (67,821) (61,887)(24,476) (21,588)
--------- ---------
Net cash from financing activities................... 82,239 88,383activities....................... 98,305 84,962
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Effect of exchange rate changes on cash and equivalents.. (57) (1,486)(6,442) 2,425
--------- ---------
Net increase (decrease) in cash and equivalents..................... 10,744 756equivalents.......... (6,058) 10,854
Cash and equivalents at beginning of period.............. 20,569 10,716 12,348
--------- ---------
Cash and equivalents at end of period.................... $ 21,46014,511 $ 13,10421,570
========= =========
See accompanying Notes to Condensed Consolidated Financial Statements.
6
R. R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. The condensed consolidated financial statements included herein are
unaudited (although the balance sheet at December 31, 19931994 is condensed from
the audited balance sheet at that date) and have been prepared by the company
to conform with the requirements applicable to this quarterly report on Form
10-Q. Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting
principles, have been omitted as permitted by such requirements. However, the
company believes that the disclosures made are adequate to make the information
presented not misleading. These condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and
the related notes included in the company's 19931994 annual report on Form 10-K.
The condensed consolidated financial statements included herein reflect, in
the opinion of the company, all adjustments (which include only normal,
recurring adjustments) necessary to present fairly the financial information
for such periods.
Note 2. Components of the company's inventories at September 30, 1994March 31, 1995 and
December 31, 19931994 were as follows:
(THOUSANDS OF
DOLLARS)
--------------------------
SEPTEMBER 30,----------------------
MARCH DECEMBER 31,
31, 1995 1994
1993
--------------------- ------------
Raw materials........................................ $148,613 $142,739materials............................................ $207,486 $165,615
Work in process...................................... 239,883 154,477process.......................................... 188,743 182,914
Operating supplies................................... 39,183 32,192supplies....................................... 54,791 51,372
Progress billings.................................... (75,939) (40,299)billings........................................ (41,307) (45,523)
LIFO reserve......................................... (49,146) (45,395)reserve............................................. (44,641) (43,141)
-------- --------
Total inventories................................ $302,594 $243,714inventories.................................... $365,072 $311,237
======== ========
Note 3. The following provides supplemental cash flow information:
(THOUSANDS OF
DOLLARS)
--------------------------
NINE----------------------
THREE MONTHS ENDED
SEPTEMBER 30
--------------------------MARCH 31
----------------------
1995 1994
1993
--------------------- ------------
Interest paid, net of capitalized interest...........interest............... $ 30,79712,314 $ 23,2015,731
Income taxes paid....................................paid........................................ $ 65,9455,496 $ 46,49310,424
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS--COMPARISON OF THIRDFIRST QUARTER 19941995 TO THIRDFIRST QUARTER 19931994
Net sales increased 10.6% above23.1% from the prior year reflecting increased material
sales, strong demand across most business units and continued growth in foreign
operations. Approximately one-half of the first quarter revenue growth was
related to higher materials sales, mainly paper provided to customers. Higher
volume in the quarter was also attributed to increased demand in
telecommunications, primarily from new productsthe start-up of the recently announced
Southwestern Bell contract, and services, new customers, recent expansions and acquisitions.in book publishing services. Net sales from
internationalforeign operations were 39% above70% higher than the prior year and represented over 11%more
than 13% of total companyconsolidated sales in the quarter. InternationalThe growth in foreign sales
growth includedreflected volume increases and new operations in Europe, Asia and Latin
America, including the
recent acquisition of a 51% interestAmerica. Strong growth in Chilean-based Editorial Lord Cochrane,
which was fully consolidated in operating results beginning July 1, 1994.foreign sales is expected to continue throughout
1995.
Gross profit increased 9.9%18.6%, reflecting higher volume partially offset by
higher depreciation and amortization, increased start-up expenses associated
with recent capital expenditures and the impact of higher paper costs, which
are generally recovered, but at low margins. Tight market conditions for
certain grades of paper are expected to continue for the remainder of 1995, but
are not expected to have a higher
LIFO provision.significant impact on the company due to guaranteed
quantity allocations from suppliers coupled with the company's production
efficiencies and ability to substitute different grades of paper. Selling and
administrative expenses were 11.5% above17.5% higher than the prior year, due to the higher
volume, recent expansions and new operations. OtherEarnings from operations
increased 20% over the prior year, reflecting the slightly lower ratio of
selling and administrative expenses to gross profit. Interest expense increased
$5.2$10.9 million reflectingresulting from both higher interest expense (duedebt balances to larger commercial paper balancesfund acquisitions and
expansions and higher interest rates)rates. Net income grew 9.5%, lower investment
income andprimarily due to
volume increases, partially offset by higher minority interest expense. The effective tax rate of 32% in
1994 was lower than the 1993 rate reflecting benefits associated with life
insurance programs, credits associated with affordable housing investment
programs and the one-time impact on the deferred income tax provision in the
third quarter of 1993, related to the federal tax rate increase. As a result of
the volume increase and the lower effective tax rate, net income increased
15.3%, which exceeded the growth in sales. Earnings per
share were $0.52,$0.31, up 15.6%10.7%, reflecting net income growth and fewer average
shares outstanding.
RESULTS OF OPERATIONS--COMPARISON OF FIRST NINE MONTHS 1994 TO FIRST NINE
MONTHS 1993
Net sales increased 11.5% aboveOn April 21, 1995, the prior year reflecting higher volume from
new productscompany merged its Global Software Services business
unit with Corporate Software Inc. to form Stream International Inc. ("Stream"),
the world's largest manufacturer and services, new customers, recent expansionsreseller of computer software and acquisitions.
Net sales from international operations were 31% aboverelated
services. The company owns approximately 80% of Stream and will account for the
prior year and
represented approximately 11% of total companymerger as a purchase. The merger will add an estimated $400 million to
consolidated net sales in the first nine months
of 1994. International sales growth included new operations in Europe, Asia1995 and Latin America, including the recent acquisition of a 51% interest in Chilean-
based Editorial Lord Cochrane, which was fully consolidated in operating
results beginning July 1, 1994.
Gross profit increased 10.7%, reflecting higher sales volume partially offset
by higher depreciation and amortization, increased start-up expenses and a
higher LIFO provision. Selling and administrative expenses increased 11.5% dueis expected to the higher volume, recent expansions and new operations. Other expense
increased $9.4 million reflecting higher interest expense (due to larger
commercial paper balances and higher interest rates), lower investment income
and higher minority interest expense. The effective tax rate of 32% in 1994 was
lower than the 1993 rate reflecting benefits associated with life insurance
programs, credits associated with affordable housing investment programs and
the one-timehave no material impact on
the deferred income tax provision in the third quarter
of 1993, related to the federal tax rate increase. As a result of the volume
increase and the lower effective tax rate,consolidated net income increased 12.6% over
1993, excludingin 1995. Management expects the restructuring chargemerger to have a
positive effect on consolidated sales and accounting changes reflected in
the first quarter of 1993. Earnings per share of $1.18 increased 13.5%,
excluding the one-time items, reflecting net income growth and fewer average
shares outstanding.in 1996.
CHANGES IN FINANCIAL CONDITION
With the growth in cash flow and the credit facilities and shelf registration
discussed below, management believes the company has the financial strength and
flexibility to fund current operations and growth. Net income from operations
plus depreciation
and amortization was $413.8$139.0 million, up 13.4%16.9% from the prior year, excluding the restructuring charge recorded in the first quarter of 1993.year.
Capital investmentexpenditures during the first ninethree months totaled $443.4$107.7 million,
including purchases of new equipment to meet the growing needs of present and
new customers;customers and expansion of manufacturing plants; and
8
acquisitions and joint venture investments.plants. Full year capital spending
is estimatedexpected to be $525$400 million. Working capital increased $55.4$74.3 million from
December 31, 1993 primarily from1994, due to increased receivablesinventories to support business growth and
inventories
reflecting recent acquisitionshigher paper prices, higher prepaid expenses (relating to VEBA payments and
increased volumedeposits for paper) and lower accrued compensation (reflecting higher year-end
commission and bonus accruals), which were partially offset by higher accounts payable balances.deferred
tax liabilities.
At September 30, 1994,March 31, 1995, the company continues to have twohad an unused revolving credit facilities totalingfacility of
$550 million with a number of banks. TheseThis credit facilities providefacility provides support for
the issuance of commercial paper and other credit needs. At September 30, 1994,March 31, 1995, the
company had an effective shelf registration statementsstatement permitting it to issue,
from time to time, up to $300 million of debt securities in the form of medium-
term notes. The company also had an effective shelf registration statement
permitting it to issue, from time to time, up to an additional $500 million inof
debt securities. UnderThe company has no current intention to issue debt securities
under the shelflatter registration statements, the
company issued $200 million of medium term notes during October and early
November, 1994. The notes bear interest rates between 7.01% and 7.96% (with a
weighted average interest rate of 7.55%) with maturity dates ranging from 1997
to 1999. The proceeds from these issues were used to retire commercial paper
debt.
9statement in 1995.
8
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In January, 1995, an administrative complaint by the U.S. Environmental
Protection Agency Region V ("Region V") seeking $304,500 in penalties was filed
against the company's Warsaw, Indiana facility alleging violations of the
Resource Conservation and Recovery Act. The complaint alleges that filtercake
from wastewater treatment operations was mischaracterized by the company as
non-hazardous waste. The complaint also alleges failure to give certain land
disposal restriction notices. The company subsequently submitted evidence to
Region V that the proper notifications were given in all but two instances, and
Region V has requested that the allegations relating to those notices be
dropped. Region V has also filed a Motion for Accelerated Decision.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The company held its Annual Meeting of Stockholders on March 23, 1995.
(b) The following matters were voted upon at the Annual Meeting of
Stockholders:
1. The election of the nominees for Directors of the First Class who will
serve for a term to expire at the Annual Meeting of Stockholders to be held
in 1998 was voted on by the stockholders. The nominees, all of whom were
elected, were: Martha Layne Collins, Charles C. Haffner III, Richard M.
Morrow, H. Blair White and Stephen M. Wolf. The Inspectors of Election
certified the following vote tabulations:
FOR WITHHELD NON-VOTES
----------- -------- ---------
Martha Layne Collins....................... 131,663,241 939,602 0
Charles C. Haffner III..................... 131,653,126 949,717 0
Richard M. Morrow.......................... 131,684,025 918,818 0
H. Blair White............................. 131,681,694 921,149 0
Stephen M. Wolf............................ 131,603,406 999,437 0
2. The 1995 Stock Incentive Plan proposed by the company was approved by
the stockholders. The Inspectors of Election certified the following vote
tabulations:
FOR AGAINST ABSTAIN NON-VOTES
--- ------- ------- ---------
108,513,928 23,570,297 518,618 0
3. A stockholder proposal requesting that the company endorse the
Coalition for Environmentally Responsible Economies (CERES) Principles was
rejected by the stockholders. The Inspectors of Election certified the
following vote tabulations:
FOR AGAINST ABSTAIN NON-VOTES
--- ------- ------- ---------
10,877,180 104,259,327 8,913,048 8,553,288
4. A stockholder proposal regarding the company's maquiladora operations
was rejected by the stockholders. The Inspectors of Election certified the
following vote tabulations:
FOR AGAINST ABSTAIN NON-VOTES
--- ------- ------- ---------
9,669,154 103,476,477 10,903,924 8,553,288
9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3(ii)(a)By-Laws
3(ii)(b)Amendment
2 Contribution Agreement, dated as of April 21, 1995, among
R. R. Donnelley & Sons Company, R. R. Donnelley Global
Software Services Corp., and Software Holdings, Inc.*
12 Statement of Computation of Ratio of Earnings to Fixed
Charges
27 Financial Data Schedule.
- --------
*The company agrees to By-Laws adopted October 27, 1994
10 1993 Stock Purchase Plan, as amended
12 Statementfurnish copies of Computation of Ratio of Earningsomitted exhibits and schedules to Fixed Charges
27 Financial Data Schedulethe
Securities and Exchange Commission upon request.
(b) No CurrentA current Report on Form 8-K was filed during the thirdfirst quarter of 1994.1995.
The Report was dated February 21, 1995 and included item 5, "Other Events," and
item 7, "Financial Statements, Pro Forma Financial Information and Exhibits,"
including the following financial statements:
R. R. Donnelley & Sons Company--Certain Financial Information as of and
for the Year Ended December 31, 1994:
--Consolidated Statements of Income
--Consolidated Balance Sheets
--Consolidated Statements of Cash Flows
--Consolidated Statements of Shareholders' Equity
--Notes to Consolidated Financial Statements
--Report of Independent Public Accountants
--Management's Discussion and Analysis of Results of Operations
--Management's Discussion and Analysis of Financial Condition
10
SIGNATURE
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
/s/ William L. WhitePeter F. Murphy
By __________________________________
William L. WhitePeter F. Murphy
Controller
(Authorized Officer and
Chief Accounting Officer)
November 14, 1994May 12, 1995
Date __________________________
11