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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                  -----------
 
                                   FORM 10-Q
 
                                  -----------
 
  (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 ---------- ---------- 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 ---------- ---------- Total current liabilities............................ 817,834 685,441liabilities...................... 815,761 801,850 ---------- ---------- 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) ---------- ---------- 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 --------- --------- 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 ------------ 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