RR Donnelley & Sons (RRD) 10-Q 4 Nov 09 2009 Q3 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Dec. 31, 2008
ASSETS
Cash and cash equivalents	414.9	$324
Restricted cash equivalents	0	7.9
Receivables, less allowance for doubtful accounts of $80.1 in 2009 (2008-$80.5)	1772.4	1903.2
Income taxes receivable	51.6	189.4
Inventories (Note 3)	563.1	695.7
Prepaid expenses and other current assets	104.7	104.6
Deferred income taxes	59.7	56.2
Total current assets	2966.4	3,281
Property, plant and equipment-net (Note 4)	2332.7	2,564
Goodwill (Note 5)	2457.9	2425.9
Other intangible assets-net (Note 5)	773	831.1
Other noncurrent assets	390.8	392.3
Total assets	8920.8	9494.3
LIABILITIES
Accounts payable	863.4	767.6
Accrued liabilities	843.6	795.7
Short-term and current portion of long-term debt (Note 14)	431.9	923.5
Total current liabilities	2138.9	2486.8
Long-term debt (Note 14)	2982.4	3203.3
Pension liability	461.7	491.5
Postretirement benefits	298.3	291.9
Deferred income taxes	242.8	260.9
Other noncurrent liabilities	468.3	418
Total liabilities	6592.4	7152.4
Commitments and Contingencies (Note 13)	-	-
RR Donnelley shareholders' equity
Preferred stock, $1.00 par value Authorized: 2.0 shares; Issued: None	0	0
Common stock, $1.25 par value Authorized: 500.0 shares; Issued: 243.0 shares in 2009 and 2008	303.7	303.7
Additional paid-in capital	2905.1	2885.7
Retained earnings	795.9	903.8
Accumulated other comprehensive loss	-506.8	-580.7
Treasury stock, at cost, 37.3 shares in 2009 (2008-37.2 shares)	-1195.7	(1,194)
Total RR Donnelley shareholders' equity	2302.2	2318.5
Noncontrolling interests	26.2	23.4
Total equity	2328.4	2341.9
Total liabilities and equity	8920.8	9494.3

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Per Share data	Sep. 30, 2009	Dec. 31, 2008
Receivables, allowance for doubtful accounts	80.1	80.5
Preferred stock, par value	$1	$1
Preferred stock, Authorized	2	2
Preferred stock, Issued	0	0
Common stock, par value	1.25	1.25
Common stock, Authorized	500	500
Common stock, Issued	243	243
Treasury stock, shares	37.3	37.2

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net sales	2463.1	2864.6	7274.3	8785.3
Cost of sales (exclusive of depreciation and amortization shown below)	1841.4	2090.3	5480.5	6,452
Selling, general and administrative expenses (exclusive of depreciation and amortization shown below)	251.6	279.8	807.2	947.9
Restructuring and impairment charges-net (Note 6)	131.7	23.4	234.1	46.5
Depreciation and amortization	145	164.7	436.7	486.5
Total operating expenses	2369.7	2558.2	6958.5	7932.9
Income from continuing operations	93.4	306.4	315.8	852.4
Interest expense-net	59.6	56.2	178.7	171
Investment and other income (expense)-net	-13.6	-1.1	-14.9	7
Earnings from continuing operations before income taxes	20.2	249.1	122.2	688.4
Income tax expense	5.6	79.7	65	189.5
Net earnings from continuing operations	14.6	169.4	57.2	498.9
Income from discontinued operations, net of tax	0	0	0	1.7
Net earnings	14.6	169.4	57.2	500.6
Less: Income attributable to noncontrolling interests	-1.5	-1.2	(5)	-3.6
Net earnings attributable to RR Donnelley common shareholders	13.1	168.2	52.2	497
Basic:
Net earnings from continuing operations	0.06	0.8	0.25	2.33
Income from discontinued operations, net of tax	$0	$0	$0	0.01
Net earnings attributable to RR Donnelley common shareholders	0.06	0.8	0.25	2.34
Diluted:
Net earnings from continuing operations	0.06	0.8	0.25	2.33
Income from discontinued operations, net of tax	$0	$0	$0	0.01
Net earnings attributable to RR Donnelley common shareholders	0.06	0.8	0.25	2.34
Dividends declared per common share	0.26	0.26	0.78	0.78
Weighted average number of common shares outstanding (Note 9):
Basic	205.3	209.1	205.2	212
Diluted	208.5	209.7	207.7	212.5
Amounts attributable to RR Donnelley common shareholders:
Net earnings from continuing operations	13.1	168.2	52.2	495.3
Income from discontinued operations, net of tax	0	0	0	1.7
Net earnings attributable to RR Donnelley common shareholders	13.1	168.2	52.2	$497

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
OPERATING ACTIVITIES
Net earnings	57.2	500.6
Adjustments to reconcile net earnings to cash provided by operating activities:
Income from discontinued operations	0	-1.7
Impairment charges	22.9	2.6
Depreciation and amortization	436.7	486.5
Provision for doubtful accounts receivable	12.4	26.3
Share-based compensation	19.3	20.2
Deferred taxes	-19.7	-41.2
Reversal of tax reserves	-2.6	-46.3
(Gain) loss on disposal of property, plant and equipment	1.8	-11.2
Loss on debt extinguishment	10.3	0
Other	31.7	23.3
Changes in operating assets and liabilities of continuing operations-net of acquisitions:
Accounts receivable-net	148.3	29.2
Inventories	141.7	-82.6
Prepaid expenses and other current assets	19.1	5.8
Accounts payable	74.8	-67.8
Income taxes payable and receivable	129.8	4.1
Accrued liabilities and other	14.8	-155.3
Net cash provided by operating activities of continuing operations	1098.5	692.5
Net cash used in operating activities of discontinued operations	0	-0.8
Net cash provided by operating activities	1098.5	691.7
INVESTING ACTIVITIES
Capital expenditures	-132.9	-238.7
Acquisition of businesses, net of cash acquired	-26.6	-121.5
Proceeds from return of capital and sale of investments and other assets	0.4	42.9
Purchases of other investments	(4)	0
Transfers from restricted cash	6.1	40.5
Net cash used in investing activities	(157)	-276.8
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	750	0
Net change in short-term debt	-304.3	191.7
Payments of current maturities and long-term debt	-1051.9	-5.1
Payments of credit facility borrowings	(700)	(400)
Proceeds from credit facility borrowings	590	275
Debt issuance costs	-5.9	0
Issuance of common stock	0	2.2
Acquisition of common stock	0	-245.4
Dividends paid	-160.1	-165.8
Distributions to noncontrolling interests	-2.2	-2.1
Net cash used in financing activities	-884.4	-349.5
Effect of exchange rate on cash and cash equivalents	33.8	-8.7
Net increase in cash and cash equivalents	90.9	56.7
Cash and cash equivalents at beginning of period	324	379
Cash and cash equivalents at end of period	414.9	435.7
Supplemental non-cash disclosure:
Use of restricted cash to fund obligations associated with deferred compensation plans	0.5	$25

1. BASIS OF PRESENTATION

1. BASIS OF PRESENTATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1. BASIS OF PRESENTATION	1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated interim financial statements include the accounts of R.R. Donnelley Sons Company and its subsidiaries (the Company or RR Donnelley) and have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the SEC). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. These unaudited condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Companys latest Annual Report on Form 10-K for the year ended December31, 2008 filed with the SEC on February25, 2009. Operating results for the three and nine months ended September30, 2009 are not necessarily indicative of the results that may be expected for the fiscal year ending December31, 2009. All significant intercompany transactions have been eliminated in consolidation. These unaudited condensed consolidated interim financial statements include estimates and assumptions of management that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these estimates. The Company evaluated and disclosed material subsequent events in the accompanying condensed consolidated interim financial statements and footnotes through November4, 2009, the date of issuance of its Form 10-Q for the quarter ended September30, 2009.

2. ACQUISITIONS

2. ACQUISITIONS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
2. ACQUISITIONS	2. ACQUISITIONS 2009 Acquisition On June18, 2009, the Company acquired Prospectus Central, LLC (Prospectus), an e-delivery company located in Fitzgerald, Georgia. The purchase price for Prospectus was $3.0 million. Prospectuss operations are included in the U.S. Print and Related Services segment. On January2, 2009, the Company acquired the assets of PROSA, a web printing company located in Santiago, Chile. The purchase price for PROSA was approximately $23.6 million. PROSAs operations are included in the International segment. The operations of these acquired businesses are complementary to the Companys existing products and services. As a result, the addition of these businesses is expected to improve the Companys ability to serve customers, increase capacity utilization, and reduce management, procurement and manufacturing costs. The PROSA and Prospectus acquisitions were recorded by allocating the cost of the acquisitions to the assets acquired, including intangible assets, based on their estimated fair values at the acquisition date. The excess of the cost of the acquisitions over the net amounts assigned to the fair value of the assets acquired was recorded as goodwill, none of which is tax deductible. Based on the valuations, the final purchase price allocation for these 2009 acquisitions is as follows: Accounts receivable $ 2.4 Property, plant and equipment 9.2 Amortizable intangible assets 11.6 Goodwill 6.5 Accounts payable and accrued liabilities (2.5 ) Deferred taxesnet (0.6 ) Net cash paid $ 26.6 The fair values of property, plant and equipment, goodwill and intangible assets associated with the acquisitions of PROSA and Prospectus were determined to be Level 3 under the fair value hierarchy. Property, plant and equipment values were estimated based on discussions with machinery and equipment brokers, dealer quotes, and internal expertise related to the equipment and current marketplace conditions. Intangible asset values, including customer relationships and a non-compete agreement, were estimated based on future cash flows and customer attrition rates discounted using an estimated weighted-average cost of capital. 2008 Acquisitions On March14, 2008, the Company acquired Pro Line Printing, Inc. (Pro Line), a multi-facility, privately held producer of newspaper inserts headquartered in Irving, Texas. The purchase price for Pro Line was approximately $122.2 million, net of cash acquired of $1.7 million and including acquisition costs of $4.3 million. Pro Lines operations are included in the U.S. Print and Related Services segment. The operations of Pro Line are complementary to the Companys existing retail insert product line. As a result, this acquisition is expected to improve the Companys ability to serve customers, increase capacity utilization, and reduce management, procurement and manufacturing costs. The Pro Line and another immaterial printing-company acquisition were recorded by allocating the cost of the acquisitions to the assets acquired, including intangible assets and liabilities assumed, based on

3. INVENTORIES

3. INVENTORIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
3. INVENTORIES	3. INVENTORIES September30, 2009 December31, 2008 Raw materials and manufacturing supplies $ 226.9 $ 311.3 Work-in-process 194.9 183.2 Finished goods 221.9 296.6 LIFO reserve (80.6 ) (95.4 ) Total $ 563.1 $ 695.7

4. PROPERTY, PLANT AND EQUIPMEN

4. PROPERTY, PLANT AND EQUIPMENT
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
4. PROPERTY, PLANT AND EQUIPMENT	4. PROPERTY, PLANT AND EQUIPMENT September30, 2009 December31, 2008 Land $ 89.3 $ 91.6 Buildings 1,138.4 1,143.1 Machinery and equipment 6,002.1 5,935.3 7,229.8 7,170.0 Less: Accumulated depreciation (4,897.1 ) (4,606.0 ) Total $ 2,332.7 $ 2,564.0 Assets Held for Sale Primarily as a result of recent restructuring actions, certain facilities and equipment are considered held for sale. The net book value of assets held for sale was $15.2 million at September30, 2009 and $5.9 million at December31, 2008. These assets are included in other current assets in the Condensed Consolidated Balance Sheets at the lower of their historical net book value or their estimated fair value, less estimated costs to sell.

5. GOODWILL AND OTHER INTANGIBL

5. GOODWILL AND OTHER INTANGIBLE ASSETS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
5. GOODWILL AND OTHER INTANGIBLE ASSETS	5. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at September30, 2009 and December31, 2008 was as follows: Goodwill U.S.Printand RelatedServices International Total Net book value at December31, 2008 $ 2,193.4 $ 232.5 $ 2,425.9 Acquisitions 6.5 6.5 Foreign exchange and other adjustments (0.2 ) 25.7 25.5 Net book value at September30, 2009 $ 2,193.2 $ 264.7 $ 2,457.9 The components of other intangible assets at September30, 2009 and December31, 2008 were as follows: Other Intangible Assets September30, 2009 December31, 2008 Gross Carrying Amount(1) Accumulated Amortization(1) NetBook Value Gross Carrying Amount(1) Accumulated Amortization(1) NetBook Value Trademarks, licenses and agreements $ 25.6 $ (22.1 ) $ 3.5 $ 21.9 $ (21.9 ) $ Patents 98.3 (68.3 ) 30.0 98.3 (59.1 ) 39.2 Customer relationship intangibles 1,125.7 (418.6 ) 707.1 1,106.2 (347.1 ) 759.1 Trade names 21.4 (7.1 ) 14.3 19.4 (4.7 ) 14.7 Total amortizable purchased intangible assets 1,271.0 (516.1 ) 754.9 1,245.8 (432.8 ) 813.0 Indefinite-lived trade names 18.1 18.1 18.1 18.1 Total purchased intangible assets $ 1,289.1 $ (516.1 ) $ 773.0 $ 1,263.9 $ (432.8 ) $ 831.1 (1) Includes foreign exchange. Certain prior year amounts have been reclassified to reflect the Companys current presentation of intangible assets. During the nine months ended September30, 2009 and the year ended December31, 2008, the Company recorded additions to intangible assets of $11.6 million and $17.3 million, respectively. The components of other intangible assets acquired during the nine months ended September30, 2009 and the year ended December31, 2008, were as follows: Nine months ended September30, 2009 Year ended December31, 2008 Amount Weighted Average Amortization Period Amount Weighted Average Amortization Period Trademarks, licenses and agreements $ 3.6 5.5 $ Customer relationship intangibles 8.0 8.0 15.6 6.4 Indefinite-lived trade names 1.7 Total additions $ 11.6 $ 17.3 Amortization expense for other intangibles was $25.7 million and $32.2 million for the three months ended September30, 2009 and 2008, respectively, and $74.4 million and $97.2 million for the nine months ended September30, 2009 and 2008, respectively. The estimated annual amortization expense related to intangible assets as of September30, 2009 is as follows: Amount For the year ending December31, 2009 $ 99.2 2010 99.1 2011 98.2 2012 85.5 2013 83.2 2014 and thereafter 364.1 Total $

6. RESTRUCTURING AND IMPAIRMENT

6. RESTRUCTURING AND IMPAIRMENT CHARGES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
6. RESTRUCTURING AND IMPAIRMENT CHARGES	6. RESTRUCTURING AND IMPAIRMENT CHARGES Restructuring and Impairment Costs Charged to Results of Operations For the three months ended September30, 2009 and 2008, the Company recorded the following net restructuring and impairment charges: Three Months Ended September30, 2009 Three Months Ended September30, 2008 Employee Terminations Other Charges Impairment Total Employee Terminations Other Charges Impairment Total U.S. Print and Related Services $ 2.0 $ 2.3 $ (0.7 ) $ 3.6 $ 16.3 $ $ 0.4 $ 16.7 International 5.6 119.0 2.7 127.3 4.2 0.7 0.1 5.0 Corporate 0.8 0.8 1.1 0.6 1.7 Total $ 7.6 $ 122.1 $ 2.0 $ 131.7 $ 21.6 $ 1.3 $ 0.5 $ 23.4 For the nine months ended September30, 2009 and 2008, the Company recorded the following net restructuring and impairment charges: Nine Months Ended September30, 2009 Nine Months Ended September30, 2008 Employee Terminations Other Charges Impairment Total Employee Terminations Other Charges Impairment Total U.S. Print and Related Services $ 33.4 $ 16.3 $ 12.6 $ 62.3 $ 21.4 $ 2.4 $ 2.1 $ 25.9 International 35.2 121.0 10.3 166.5 14.6 2.3 0.2 17.1 Corporate 2.8 2.5 5.3 0.6 2.6 0.3 3.5 Total $ 71.4 $ 139.8 $ 22.9 $ 234.1 $ 36.6 $ 7.3 $ 2.6 $ 46.5 For the three and nine months ended September30, 2009, the Company recorded net restructuring and impairment charges, discounted for future cash payments, of $117.3 million for the termination of a significant long-term customer contract in the business process outsourcing reporting unit within the International segment, of which $116.4 million, $0.8 million and $0.1 million are reflected in other charges, impairment and employee terminations, respectively. In addition, for the three and nine months ended September30, 2009, the Company recorded net restructuring charges of $7.5 million and $71.3 million, respectively, for employee termination costs for 3,635 employees, of whom 3,438 were terminated as of September30, 2009, associated with actions resulting from the reorganization of certain operations. These actions included the closings of two magazine, catalog and retail insert manufacturing facilities, two book manufacturing facilities and one digital solutions facility within the U.S. Print and Related Services segment, as well as the closing of one Global Turnkey Solutions manufacturing facility, one business process outsourcing facility, one Latin America manufacturing facility and one European manufacturing facility within the International segment. Additionally, the Company incurred other restructuring charges of $5.7 million and $23.4 million for the three and nine months e

7. EMPLOYEE BENEFITS

7. EMPLOYEE BENEFITS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
7. EMPLOYEE BENEFITS	7. EMPLOYEE BENEFITS The components of the estimated pension and postretirement benefits expense for the three and nine months ended September30, 2009 and 2008 were as follows: ThreeMonthsEnded September30, NineMonthsEnded September30, 2009 2008 2009 2008 Pension expense Service cost $ 17.5 $ 21.5 $ 52.4 $ 64.4 Interest cost 44.5 42.1 132.9 126.2 Expected return on assets (64.2 ) (66.7 ) (191.7 ) (199.9 ) Amortization, net (1.2 ) 3.6 (3.5 ) Settlement (0.1 ) Net pension benefit $ (2.2 ) $ (4.3 ) $ (2.8 ) $ (12.9 ) Postretirement benefits expense Service cost $ 2.6 $ 3.1 $ 7.7 $ 9.3 Interest cost 7.7 7.6 23.1 22.7 Expected return on assets (3.9 ) (4.1 ) (11.7 ) (12.2 ) Amortization, net (4.3 ) (3.6 ) (12.9 ) (10.9 ) Net postretirement benefits expense $ 2.1 $ 3.0 $ 6.2 $ 8.9

8. SHARE-BASED COMPENSATION

8. SHARE-BASED COMPENSATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
8. SHARE-BASED COMPENSATION	8. SHARE-BASED COMPENSATION The Company recognizes compensation expense, based on estimated fair values, for all share-based awards made to employees and directors, including stock options, restricted stock units and performance share units. The total compensation expense related to all share-based compensation plans was $5.5 million and $19.3 million for the three and nine months ended September30, 2009, respectively. The total compensation expense related to all share-based compensation plans was $6.4 million and $20.2 million for the three and nine months ended September30, 2008, respectively. Stock Options The Company granted 1,520,468 and 754,000 stock options during the nine months ended September30, 2009 and 2008, respectively. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes-Merton Formula. The fair value of these stock options was determined using the following assumptions: NineMonthsEnded September30,2009 NineMonthsEnded September30,2008 Expected volatility 29.67 % 22.78 % Risk-free interest rate 2.27 % 2.96 % Expected life (years) 6.25 6.25 Expected dividend yield 3.63 % 3.31 % The weighted average grant date fair value of these options was $1.47 and $5.63 per stock option for the grants in the first nine months of 2009 and 2008, respectively. The following table is a summary of the Companys stock option activity: Shares Under Option (thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate IntrinsicValue (millions) Outstanding at December31, 2008 3,624 $ 28.76 5.1 $ 0.7 Granted 1,520 7.09 9.4 Exercised (4 ) 15.96 Cancelled/forfeited/expired (419 ) 31.05 Outstanding at September30, 2009 4,721 21.60 6.4 $ 24.3 Exercisable at September30, 2009 905 $ 18.24 2.2 $ 2.7 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Companys closing stock price on September30, 2009 and December31, 2008, respectively, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September30, 2009 and December31, 2008. This amount will change in future periods based on the fair market value of the Companys stock and the number of options outstanding. Total intrinsic value of options exercised for the three and nine months ended September30, 2009 was less than $0.1 million in each period. Total intrinsic value of options exercised for the three and nine months ended September30, 2008 was $0.2 million and $1.0 million, respectively. Compensation expense recognized related to stock options for the three and nine months ended September30, 2009 was $0.6 million and $1.8 million, respectively. Compensation expense recognized related to stock options for the three and nine months ended September30, 2008 was $0.7 million a

9. EARNINGS PER SHARE ATTRIBUTA

9. EARNINGS PER SHARE ATTRIBUTABLE TO RR DONNELLEY COMMON SHAREHOLDERS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
9. EARNINGS PER SHARE ATTRIBUTABLE TO RR DONNELLEY COMMON SHAREHOLDERS	9. EARNINGS PER SHARE ATTRIBUTABLE TO RR DONNELLEY COMMON SHAREHOLDERS ThreeMonthsEnded September30, NineMonthsEnded September30, 2009 2008 2009 2008 Numerator: Net earnings attributable to RR Donnelley common shareholders $ 13.1 $ 168.2 $ 52.2 $ 497.0 Denominator: Weighted average number of common shares outstanding 205.3 209.1 205.2 212.0 Dilutive options and awards(a) 3.2 0.6 2.5 0.5 Diluted weighted average number of common shares outstanding 208.5 209.7 207.7 212.5 Net earnings per share attributable to RR Donnelley common shareholders: Basic $ 0.06 $ 0.80 $ 0.25 $ 2.34 Diluted $ 0.06 $ 0.80 $ 0.25 $ 2.34 Cash dividends paid per common share $ 0.26 $ 0.26 $ 0.78 $ 0.78 (a) Diluted net earnings per share attributable to RR Donnelley common shareholders takes into consideration the dilution of certain unvested restricted stock awards and unexercised stock option awards. For the three and nine months ended September30, 2009, common stock equivalents of 7.0million and 7.9million, respectively, were excluded as their effect would be anti-dilutive. For the three and nine months ended September30, 2009, restricted stock units of 2.8million and 3.4million, respectively, were excluded as their effect would be anti-dilutive. For the three and nine months ended September30, 2009, options to purchase 4.2million shares and 4.5million shares, respectively, were anti-dilutive because the option exercise price exceeded the fair value of the stock. For the three and nine months ended September30, 2008, common stock equivalents of 4.8million and 4.9million, respectively, were excluded as their effect would be anti-dilutive. For the three and nine months ended September30, 2008, restricted stock units of 1.4million and 1.5million, respectively, were excluded as their effect would be anti-dilutive. For the three and nine months ended September30, 2008, options to purchase 3.4million shares were anti-dilutive because the option exercise price exceeded the fair value of stock.

10. COMPREHENSIVE INCOME

10. COMPREHENSIVE INCOME
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
10. COMPREHENSIVE INCOME	10. COMPREHENSIVE INCOME ThreeMonthsEnded September30, NineMonthsEnded September30, 2009 2008 2009 2008 Net earnings $ 14.6 $ 169.4 $ 57.2 $ 500.6 Translation adjustments 39.4 (37.7 ) 84.1 20.4 Unrealized loss on investments, net of tax (1.4 ) Adjustment for net periodic pension and postretirement benefit cost, net of tax (0.4 ) (2.8 ) (12.5 ) (6.6 ) Change in fair value of derivatives, net of tax 1.8 (19.3 ) 2.2 10.2 Comprehensive income 55.4 109.6 131.0 523.2 Less: comprehensive income attributable to noncontrolling interests (1.4 ) (1.1 ) (5.0 ) (4.1 ) Comprehensive income attributable to RR Donnelley common shareholders $ 54.0 $ 108.5 $ 126.0 $ 519.1 For the three and nine months ended September30, 2009, the changes in other comprehensive income were net of tax provisions of $1.1 million and $1.4 million, respectively, related to the change in fair value of derivatives and tax benefits of $1.8 million and $4.4 million, respectively, for the adjustment for net periodic pension and postretirement benefit costs. For the three and nine months ended September30, 2008, the changes in other comprehensive income were net of tax provisions of $8.3 million and $9.8 million, respectively, related to unrealized foreign currency gains, net of tax benefits of $12.2 million and tax provisions of $7.4 million, respectively, related to changes in the fair value of derivatives and hedge reclassifications and net of tax benefits of $1.7 million and $6.4 million, respectively, related to the adjustment for net periodic pension and postretirement benefit cost.

11. EQUITY

11. EQUITY
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
11. EQUITY	11. EQUITY The following table summarizes the Companys equity activity for the nine months ended September30, 2009: RR Donnelley Shareholders Equity Noncontrolling Interests Total Equity Balance at December31, 2008 $ 2,318.5 $ 23.4 $ 2,341.9 Net earnings 52.2 5.0 57.2 Other comprehensive income 73.8 73.8 Share-based compensation 19.3 19.3 Withholdings for share-based awards and other (1.5 ) (1.5 ) Cash dividends paid (160.1 ) (160.1 ) Distributions to noncontrolling interests (2.2 ) (2.2 ) Balance at September30, 2009 $ 2,302.2 $ 26.2 $ 2,328.4 The following table summarizes the Companys equity activity for the nine months ended September30, 2008: RR Donnelley Shareholders Equity Noncontrolling Interests Total Equity Balance at December31, 2007 $ 3,907.3 $ 19.0 $ 3,926.3 Net earnings 497.0 3.6 500.6 Other comprehensive income 22.1 0.5 22.6 Share-based compensation 20.2 20.2 Withholdings for share-based awards and other (3.6 ) (3.6 ) Acquisition of common stock (278.8 ) (278.8 ) Cash dividends paid (165.8 ) (165.8 ) Distributions to noncontrolling interests (2.1 ) (2.1 ) Other (0.2 ) (0.2 ) Balance at September30, 2008 $ 3,998.4 $ 20.8 $ 4,019.2

12. SEGMENT INFORMATION

12. SEGMENT INFORMATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
12. SEGMENT INFORMATION	12. SEGMENT INFORMATION The Company operates primarily in the printing industry, with related service offerings designed to offer customers complete solutions for communicating their messages to target audiences. The Companys reportable segments reflect the management reporting structure of the organization and the manner in which the chief operating decision-maker regularly assesses information for decision-making purposes, including the allocation of resources. The Companys segments and their products and service offerings are summarized below: U.S. Print and Related Services The U.S. Print and Related Services segment includes the Companys U.S. printing operations, managed as one integrated platform, along with related logistics, premedia and print-management services. This segments products and related service offerings include magazines, catalogs, retail inserts, books, directories, financial print, direct mail, forms, labels, office products, premedia and logistics services. International The International segment includes the Companys non-U.S. printing operations in Asia, Europe, Latin America and Canada. Additionally, this segment includes the Companys business process outsourcing and Global Turnkey Solutions operations. Business process outsourcing provides transactional print and outsourcing services, statement printing, direct mail and print management services through its operations in Europe, Asia and North America. Global Turnkey Solutions provides outsourcing capabilities, including product configuration, customized kitting and order fulfillment for technology, medical device and other companies around the world through its operations in Europe, North America and Asia. Corporate Corporate consists of unallocated general and administrative activities and associated expenses including, in part, executive, legal, finance, information technology, human resources, certain facility costs and LIFO inventory provisions. In addition, certain costs and earnings of employee benefit plans, primarily components of net pension and postretirement benefits expense other than service cost, are included in Corporate and not allocated to operating segments. The Company has disclosed income (loss) from continuing operations as the primary measure of segment earnings (loss). This is the measure of profitability used by the Companys chief operating decision-maker and is most consistent with the presentation of profitability reported within the condensed consolidated financial statements. TotalSales Intersegment Sales Net Sales Income(Loss) from Continuing Operations Depreciation and Amortization Capital Expenditures Three months ended September30,2009 U.S. Print and Related Services $ 1,829.8 $ (5.0 ) $ 1,824.8 $ 164.9 $ 106.4 $ 27.8 International 651.0 (12.7 ) 638.3 (72.3 ) 30.6 8.7 Total operating segments 2,480.8 (17.7 ) 2,463.1 92.6 137.0 36.5 Corporate 0.8 8.0 4.3

13. COMMITMENTS AND CONTINGENCI

13. COMMITMENTS AND CONTINGENCIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
13. COMMITMENTS AND CONTINGENCIES	13. COMMITMENTS AND CONTINGENCIES The Company is subject to laws and regulations relating to the protection of the environment. The Company provides for expenses associated with environmental remediation obligations when such amounts are probable and can be reasonably estimated. Such accruals are adjusted as new information develops or circumstances change and are not discounted. The Company has been designated as a potentially responsible party in twelve federal and state Superfund sites. In addition to the Superfund sites, the Company may also have the obligation to remediate five other previously owned facilities and three other currently owned facilities. At the Superfund sites, the Comprehensive Environmental Response, Compensation and Liability Act provides that the Companys liability could be joint and several, meaning that the Company could be required to pay an amount in excess of its proportionate share of the remediation costs. The Companys understanding of the financial strength of other potentially responsible parties at the Superfund sites and of other liable parties at the previously owned facilities has been considered, where appropriate, in the determination of the Companys estimated liability. The Company established reserves, recorded in accrued liabilities and other noncurrent liabilities, that it believes are adequate to cover its share of the potential costs of remediation at each of the Superfund sites and the previously and currently owned facilities. While it is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that the Company may undertake in the future, in the opinion of management, compliance with the present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material adverse effect on the Companys consolidated annual results of operations, financial position or cash flows. From time to time, the Companys customers and others file voluntary petitions for reorganization under United States bankruptcy laws. In such cases, certain pre-petition payments received by the Company could be considered preference items and subject to return to the bankruptcy administrator. In addition, the Company may be party to certain litigation arising in the ordinary course of business. Management believes that the final resolution of these preference items and litigation will not have a material adverse effect on the Companys consolidated annual results of operations, financial position or cash flows.

14. DEBT

14. DEBT
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
14. DEBT	14. DEBT The Companys debt consists of the following: September30, 2009 December31, 2008 Commercial paper $ $ 289.8 Credit facility borrowings 90.0 200.0 3.75% senior notes due April1, 2009 400.0 4.95% senior notes due May15, 2010 325.6 499.6 5.625% senior notes due January15, 2012 158.5 624.5 4.95% senior notes due April1, 2014 598.9 598.8 5.50% senior notes due May15, 2015 499.5 499.5 8.60% senior notes due August15, 2016 345.2 6.125% senior notes due January15, 2017 621.4 621.0 11.25% debentures due February1, 2019 400.0 8.875% debentures due April15, 2021 80.9 80.9 6.625% debentures due April15, 2029 199.3 199.2 8.820% debentures due April15, 2031 68.9 68.9 Other, including capital leases 26.1 44.6 Total debt 3,414.3 4,126.8 Less: current portion (431.9 ) (923.5 ) Long-term debt $ 2,982.4 $ 3,203.3 The fair value of debt was determined to be Level 2 under the fair value hierarchy and based upon the interest rates available to the Company for borrowings with similar terms and maturities, the fair value of the Companys debt was greater than its book value by $22.3 million at September30, 2009 and lower by $556.2 million at December31, 2008. On January14, 2009, the Company issued $400.0 million of 11.25% senior notes due February1, 2019. The net proceeds from the offering were used to pay down short-term debt. On August26, 2009, the Company issued $350.0 million of 8.60% senior notes due August15, 2016. The net proceeds from the offering, along with borrowings under the credit facility and cash on hand, were used to repurchase $466.4 million of the 5.625% senior notes due January15, 2012 and $174.2 million of the 4.95% senior notes due May15, 2010. These repurchases resulted in a pre-tax loss on debt extinguishment of $10.3 million, which is reflected in investment and other expense on the condensed consolidated statements of operations for the three and nine months ended September30, 2009.

15. DERIVATIVES

15. DERIVATIVES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
15. DERIVATIVES	15. DERIVATIVES All derivatives are recorded as other assets or other liabilities on the condensed consolidated balance sheets at their respective fair values with unrealized gains and losses recorded in other comprehensive income (loss), net of applicable income taxes, or in the condensed consolidated statements of operations, depending on the purpose for which the derivative is held. Changes in the fair value of derivatives that do not meet the criteria for designation as a hedge at inception, or fail to meet the criteria thereafter, are recognized currently in the condensed consolidated statements of operations. At the inception of a hedge transaction, the Company formally documents the hedge relationship and the risk management objective for undertaking the hedge. In addition, the Company assesses both at inception of the hedge and on an ongoing basis, whether the derivative in the hedging transaction has been highly effective in offsetting changes in fair value or cash flows of the hedged item and whether the derivative is expected to continue to be highly effective. The impact of any ineffectiveness is recognized currently in the condensed consolidated statements of operations. The Company is exposed to the impact of foreign currency fluctuations in certain countries in which it operates. The exposure to foreign currency movements is limited in most countries, because the operating revenues and expenses of its various subsidiaries and business units are substantially in the local currency of the country in which they operate. To the extent borrowings, sales, purchases, revenues, expenses or other transactions are not in the local currency of the operating unit, the Company is exposed to currency risk. Periodically, the Company uses foreign exchange forward contracts and cross-currency swaps to hedge exposures resulting from foreign exchange fluctuations. Accordingly, the implied gains and losses associated with the fair values of foreign currency exchange contracts and cross-currency interest rate swaps are generally offset by gains and losses on underlying payables, receivables, and net investments in foreign subsidiaries. The Company does not use derivative financial instruments for trading or speculative purposes. The Company has entered into foreign exchange forward contracts in order to manage the currency exposure of certain receivables and liabilities. The foreign exchange forward contracts were not designated as hedges, and accordingly, the fair value gains or losses from these foreign currency derivatives are recognized currently in the condensed consolidated statements of operations, generally offsetting the foreign exchange gains or losses on the exposures being managed. The aggregate notional value of the forward contracts at September30, 2009 and December31, 2008 was $322.0 million and $299.4 million, respectively. The fair values of foreign exchange forward contracts were determined to be Level 2 under the fair value hierarchy and are valued using market exchange rates. At September30, 2009 and December31, 2008, the total fair value of the Companys forward contracts and the accounts in the condensed consolida

16. NEW ACCOUNTING PRONOUNCEMEN

16. NEW ACCOUNTING PRONOUNCEMENTS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
16. NEW ACCOUNTING PRONOUNCEMENTS	16. NEW ACCOUNTING PRONOUNCEMENTS In June 2009, the Financial Accounting Standards Board (FASB) issued The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (GAAP) (Codification). The Codification is the single official source of authoritative U.S. accounting and reporting standards applicable for all nongovernmental entities, with the exception of guidance issued by the SEC. The Codification did not change GAAP, but organized it into an online research system sorted by individual accounting Topics, which are further divided into Subtopics. The FASB now issues new standards in the form of Accounting Standards Updates. The Codification is effective for financial statements issued for periods ending after September15, 2009. The adoption of the Codification did not have a material impact on the Companys consolidated financial position, annual results of operations or cash flows. In September 2006, the FASB issued Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820), which was adopted in the first quarter of 2008 for financial assets and the first quarter of 2009 for non-financial assets. This Topic clarified the definition of fair value, established a framework for measuring fair value and expanded the disclosures on fair value measurements. The adoption of ASC 820 did not have a material impact on the Companys consolidated financial position, annual results of operations or cash flows. In December 2007, the FASB issued Accounting Standards Codification 805 Business Combinations (ASC 805), which the Company adopted January1, 2009. ASC 805 retained the requirement that the acquisition method of accounting (formerly known as the purchase method) be used for all business combinations and changed the accounting treatment for certain acquisition related costs, restructuring activities, and acquired contingencies, among other changes. It continued to require the identification and recognition of intangible assets separate from goodwill and was required to be adopted for acquisitions consummated after December31, 2008, with certain provisions applied to earlier acquisitions. The impact of adopting ASC 805 did not have a material impact on the Companys consolidated financial position, annual results of operations or cash flows. The Company expects that its adoption will reduce the Companys operating earnings due to required recognition of acquisition and restructuring costs through operating earnings. The magnitude of this impact will be dependent on the number, size and nature of acquisitions in periods subsequent to adoption. In December 2007, the FASB issued Accounting Standards Codification 810-10-65-1 (ASC 810-10-65-1) within the Consolidation Topic, which amended the accounting for and disclosure of the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This guidance clarified the definition and classification of a noncontrolling interest, revised the presentation of noncontrolling interests in the consolidated income statement, established a single method of accounting for changes in a parents ownership interest

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 30, 2009
Entity [Text Block]
Trading Symbol	RRD
Entity Registrant Name	RR Donnelley & Sons Co
Entity Central Index Key	0000029669
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		205,300,000