Our Values

Our print capabilities remain the foundation of our company, and we serve a "Who's Who" of customers in the following markets:

• Magazines, catalogs and retail inserts: We are a leader in the North American magazine, catalog and advertising insert markets. Our U.S. customers include the majority of the top 10 magazine titles, and a majority of the largest consumer catalog companies and retailers.
• Telecommunications: We are the global leader in telephone directory printing. In the United States, we print 1,400 directories totaling 330 billion pages a year. We also serve leading directory publishers in global markets, and we produce manuals for cellular phones and other electronic devices.
• Books: We are the leader in the North American book market, serving most of the top 10 U.S. book publishers, and we typically print more than 50 percent of The New York Times best-seller titles and about one-third of all U.S. textbooks.
• Financial markets: We work with corporations, investment banks and securities law firms on some of the world's largest financial transactions. We also provide compliance and marketing communications for financial services companies.
• Direct mail: We are a leading provider of direct mail services in the United States, offering a range of services for large and complex direct mail jobs.

International Markets
RR Donnelley has a strong presence in North America, and we also serve key markets in Europe, Latin America and Asia through our international operations. We focus on emerging markets where our experience and expertise in print manufacturing and related services can have a significant impact on communication.

In all our plants around the world, we follow the same high standards for ethics, environmental care and employee safety. We are particularly proud of the Shenzhen Donnelley Bright Sun printing plant in Shenzhen, China, which has achieved more than 5 million work-hours without any employees missing a day of work due to injury.

Meredith Corporation Renews Multi-Year Contract

Transformation
In the last couple of years, we've been transforming our print operations to give customers more reasons to do business with RR Donnelley. When phase one is complete in 2003, we will have standardized and streamlined our operations into an integrated technology platform. We're seeing significant productivity and service quality benefits from these programs already–programs that will pay dividends for years to come.

As part of our transformation, we've implemented continuous improvement, service quality and cost-reduction initiatives, and we're developing strong marketing practices. We also have a high-performance culture that embraces teamwork and accountability. The result is that we are able to provide more than just print and bind. By getting closer to our customers and better understanding their needs, we are able to provide solutions that help our customers save more and sell more. We are dedicated to creating compelling service solutions for customers in industries served by our print business.

Our financial services business has been adversely affected by the economy in the last couple of years, and we've taken strong actions to restructure that business. When we are done, we will have solutions that clearly differentiate us from our competitors, with greater operating flexibility, a lower cost structure and superior customer service.

Supply Chain Management: Raising the Bar on Quality

Continuous Improvement
A key element of our transformation in printing has been the adoption of numerous continuous improvement tools and standards.

Over the last two years, we have brought best practices in manufacturing concepts, analytical techniques and process management to our industry. The result has been significant increases in print capacity, quality and safety. Listed below are examples of the tools and standards we use:

• Six Sigma methodology is particularly useful in identifying opportunities and problems and in analyzing solutions, thereby improving processes.
• Process Variability Reduction (PVR) is an approach to improving the process by reducing variability. The goal is to develop a more dependable, predictable and consistent process.
• Transactional PVR takes the concept of PVR from manufacturing and applies it to transactions with customers.
• Total Productive Maintenance (TPM) is the effective management of business assets in order to produce the highest yield and utilization on a continuous basis.
• 5S standards–sort, set in order, shine, standardize and sustain–help ensure a clean and safe work environment.
• International Standards Organization (ISO) guidelines are used to manage product and service quality. We are certifying quality processes under ISO9000, and environmental processes under ISO14001.