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RR Donnelley CEO Urges Congress To Keep Postal Rates Low For Commercial Customers

Press release from the issuing company

CHICAGO--March 10, 2004-- Mark A. Angelson, the new Chief Executive Officer of R.R. Donnelley & Sons Company joined with Ann S. Moore, Chairman and Chief Executive Officer of Time Inc., one of RR Donnelley's largest customers, in testifying yesterday before the U.S. Senate Committee on Governmental Affairs in support of congressional legislation that would reform the U.S. Postal Service (USPS) and ensure steady and more predictable postal rates. Postal reform legislation is expected to be introduced in Congress later this year. "It costs our customers more to mail a catalogue or magazine than it does for us to manufacture it," said Mr. Angelson in his testimony. "We put nearly 9 billion pieces of printed material into the mail on behalf of our customers each year. Every single day, our employees and our customers see, feel and experience the economic consequences of a postal service in need of reform. If our customers have stable rates, they will print more." Ms. Moore added, "Give us predictable rates, and we'll give the postal service more volume. But if I cannot predict the future cost of mail and the long-term cost of a new launch, the risk of building a new magazine is simply too great." Mr. Angelson and Ms. Moore focused their testimony on four key areas where they believe there is significant room for improvement. They are: Stable and predictable rate setting; Enhanced worksharing opportunities; Optimization of the postal network; and Resolution of the Civil Service Retirement Issues. According to the Presidential Commission Report, the USPS operates under a 30-year-old model, has unfunded liabilities and is currently $7.3 billion in debt to the U.S. government. Postmaster General John E. Potter recently reported that, in the last two years, the volume of first class mail has decreased by over 3.5 billion pieces while, at the same time, 1.7 million new addresses were added annually - pushing up delivery costs while revenue declined. "We have a real opportunity now to make the necessary changes to ensure that the USPS and the mailing industry remain healthy and viable," concluded Mr. Angelson.