Paul Masterton was named president of R.R. Donnelley Financial in November 1998 and is based at the group’s offices in New York City.

Paul joined R.R. Donnelley & Sons in 1983 as a sales representative and has been with Donnelley Financial since its inception. He has held numerous senior positions with a variety of responsibilities including sales management, business development and operations. Prior to his appointment as president, Paul served as senior vice president and director of operations, overseeing eight printing and distribution divisions, as well as service centers around the world, including 40 in the United States.

Paul was a principal contributor to Donnelley Financial’s strategic plan to achieve growth through the development of new markets, including customized communications solutions for the investment management and healthcare industries. In addition, he was instrumental in establishing the group’s international business, including the London operation. Among his other responsibilities, he has managed sales and business development for Donnelley Financial Investment Company Communications.

Paul is chair of the High Performance Culture Committee for the R.R. Donnelley corporation, has been a Big Brother mentor to inner-city school students and is a board member for Big Brothers Big Sisters of New York. He earned a Bachelor of Science degree in Geology at King’s College in London in 1979 and has completed the Advanced Management Program at Harvard Business School.

Paul, many may not understand how Donnelley Financial fits into the overall structure of R.R. Donnelley. Tell us about the division and it’s contribution to Donnelley’s bottom line.

Let’s start with the big picture -- R.R. Donnelley Financial is the around-the-world and around-the-clock provider of Financial Printing and Customized Communications Solutions to the capital markets, investment management and healthcare industries. For the year 2000, we exceeded revenues of $650 million.

Financial Printing and Customized Communications solutions represent two differentiated service models based on the distinct service needs of our clients. So let me speak a little about each.

Donnelley Customized Communications Solutions (CCS) serves our clients by helping them communicate more effectively with their customers. Starting with our client’s business objective, CCS designs, creates and delivers communication solutions, and then measures the effectiveness of these communications, helping our clients understand the return on investment for their communications spend. CCS does this by integrating a suite of capabilities including information and data management, content management, digital and traditional printing, multiple-media delivery and closed-loop marketing, to deliver the right message, to the right person, at the right time.

As a single-source solution, we can help our clients:

• Develop longer-lasting relationships with their customers through improved, targeted communications.
• Expand market share and share of customer.
• Generate client awareness and higher response rates.
• Understand customers’ individual needs and buying patterns.
• Translate content to reach wider, more diversified audiences.
• Gain cross-selling opportunities and outsell the competition.
• Differentiate their product and extend brand equity.
• Improve profitability.

Our growing investment in customized communications capabilities will continue as we deepen existing customer relationships, penetrate profitable new audiences and provide additional services that help our clients sell to, educate and communicate more effectively with their customers.

Donnelley Financial Printing helps our clients create, manage and deliver complex, time-sensitive, regulatory information to the capital markets and investment management communities. These services – offered in comfortable, state-of-the-art Donnelley service centers worldwide -- include document creation, content and project management, EDGAR filing, print and bind manufacturing and distribution services to the capital markets and investment management communities. This immediate-response, confidential and high service business is provided globally 24 x 7 x 52.

What’s the largest job that Donnelley Financial Printing has ever done?

We have handled some of the largest financial transactions in history – the five largest US M&A’s of the 1990’s; the most complex financial settlement ever undertaken where 71.5 million documents were printed and distributed to 8 million people; the largest initial and global offerings transacted by German and French multinationals; and the largest IPO ever-listed on the NYSE – as well the recent Prudential demutualization where over 30 million documents were delivered to policy holders that equate to 1 in every 10 US households.

What impact does the new $300 million initiative announced recently have on the Financial Division?

While the investment will directly benefit magazine, catalog and retail customers of R.R. Donnelley's traditional long-run printing businesses, there will also be significant benefits to all clients, including ours. This investment will allow us to support a broader range of our clients’ needs and make more capacity available, with quicker turnaround times and higher quality. Tapping the strength of the entire Donnelley organization provides great benefits to our clients.

As you know, we have numerous print buyers who subscribe to our site. Many are involved in securing custom and mass financial print. What can RR Donnelley offer above and beyond the "print?"

As our communications menu extends significantly beyond print, there are a variety of opportunities available for these professionals in areas such as project management, creative design, communications programs, document storage and retrieval, and multiple-media delivery.

Visiting our web site at www.rrdfin.com will introduce your subscribers to our range of services.

Describe the make-up of a typical R.R. Donnelley Financial client in terms of volume and industry types.

Few if any of our clients are "typical." Similarly deals and projects we work on -- the IPOs, M&As and communications programs -- are all very different. The common element though is a need for outstanding service and attention to detail.

Our clients on the Financial Printing side include the senior levels of corporations, investment banks, securities law firms and investment management firms – with the volume and the type of transaction mix varying based on the stock market, worldwide economic forecasts and business trends. The only constant are corporations and investment management firms who must regularly file compliance documents and issue proxy reports.

Our CCS clients are more likely to be marketing or customer communications directors for financial services firms – such as insurance companies, mutual funds, retirement services enterprises, banks or brokerage firms – or from the healthcare community – including managed care organizations or pharmaceutical firms.

While we have long-term relationships in both businesses, Financial Printing focuses on individual deals and is project based, while Customized Communications Solutions are typically ongoing or periodic multiple-media communications over a long period of time.

Your sales force - do they need a financial background?

The most important sales need is "customer intimacy." By this, I mean for a sales representative -- as well as all other functional areas -- to be expert in what is important to a client’s business, to know and deliver on their needs for today and tomorrow, and to have a relationship based on trust and respect. A financial background is not necessary, but our best representatives develop broad skills in this area, including understanding the workings of the financial markets and the requirements with which issuers must comply. We hire Sales representatives from a range of service-based industries, including our target markets of mutual funds, healthcare, the law and financial services.

Tell us about the expertise a prospect can expect by working with your reps.

Our Sales representatives – given their understanding of your specific needs, expertise in the process and document or content knowledge – act as the "quarterback" in leading the project or communication end-to-end.

As "quarterbacks" -- and working closely with our dedicated customer service team -- they help to ensure communications processes are streamlined, logistics and timing are appropriately scheduled, and all the pieces are in the right place at the time. The sales representative also acts as the client’s central point of contact to ensure no miscues, no mixed messages. In this sense, our sales representatives are the "voice of the client" inside Donnelley.

The pressure on your employees must be tremendous. How do you keep them motivated?

Good question, given our client’s mandate for accuracy, speed and quality. I see four keys here.

1. An established culture focusing on service excellence, and supported by the values of truth, accountability, support, trust and energy.
2. A substantial investment in training our employees to continuously enhance or add new skill sets while providing opportunities for growth and development.
3. Internal communications – whether via Intranet sites or interactive quarterly meetings – that keep employees up-to-date and well informed on what’s happening in their area of business, throughout Donnelley and across the industry.
4. And, of course, rewards for success.

We have reported on some of the investments you have made in new equipment. What other investments have you recently made?

While our expenditures are confidential for competitive reasons, I can tell you that we are investing for the future in the following areas:

• Service enhancements – including the ongoing application of continuous improvement methodologies, such as Six Sigma and ISO – that develop consistent and high-quality service standards for our clients while enhancing the efficiency and effectiveness of our network.
• Expanding on the growth and success of our Customized Communications Solutions business, including digital technology.
• Developing services and technology to support capital markets workgroup collaboration.

Obviously, a booming economy would increase financial print needs. With the slowing economy, what are clients telling you about their spending for the rest of 2001?

In capital markets, this has been a challenging year due to the turbulence in the stock markets and very low deal activity. Looking forward, our clients indicate there are a lot of transaction deals in the pipeline just waiting for the markets to improve and stabilize. At the same time, we have seen a few big deals in the past month or so – including a very large demutualization and the second largest IPO in US history.

From the CCS perspective, we are seeing a trend towards increased budget allocations to marketing communications campaigns, but with an increasing need to understand the value that these communications are creating. This is, at least in some part, the result of:

• Research indications that target marketing positively impacts client relationships, response rates, retention and revenue.
• The continuing growth and application of Customer Relationship Management (CRM) philosophies and approaches.

You recently expanded in the Southwest with the new Phoenix location. What other domestic areas look attractive for future expansion?

We have broad coverage already in the US and internationally, but continue to evaluate new areas such as Phoenix. Any future expansion will be based on in-depth market analysis.

Our competition would like to know the answer to this question as well – so I’ll stop here.

Last year, you purchased EVACO. How has that acquisition helped besides the additional presence in the Southeast?

The Southeast – with its rapidly expanding financial service community – was a part of our long-term expansion strategies. The opportunities of the Cademus Financial acquisition in 1999 and EVACO in 2000 allowed us to gain an earlier than planned stronghold with a quicker return on investment than if we had to build our client base from scratch.

Our increased presence in the Southeast has led to new revenue streams from financial printing for capital markets and investment management company financial printing as well as from customized communications solutions for the areas banks and financial services firms.

How did RealCorporateLawyer.com develop? Is it for customers only?

RealCorporateLawyer.com was developed – and is managed -- by a director of capital markets for R.R. Donnelley Financial who has extensive legal practice background, including private practice, assistant general counsel for a Fortune 500 company and SEC counselor.

RealCorporateLawyer.com -- which provides up-to-date information on SEC rules and regulations as well as a Cyberlaw Center and a monthly Ezine – is a value-added educational resource open to anyone, clients, students and the interested public.

We encourage your readers to visit the site at www.RealCorporateLawyer.com to find out more.

The "All about EDGAR" portion of your web site - how does that help clients?

The launch of this site was timed to help our clients – and the capital markets and investment management community – stay abreast of the SEC’s modernization of EDGAR. The site helps visitors:

• Learn more about EDGAR.
• Remain updated on EDGAR rule changes and anticipated worldwide applications.
• Find EDGAR reference materials, forms and templates, with link directly to in-depth background details and other EDGAR resources.

The EDGAR site is located at www.rrdfin.com/EDGAR.