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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003.

Commission file number 1-8014.

MOORE WALLACE INCORPORATED

(Exact name of registrant as specified in its charter)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (905) 362-3100

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

TITLE OF EACH CLASS

Common Shares

NAME OF EACH EXCHANGE ON WHICH REGISTERED:

New York Stock Exchange

The Toronto Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

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 such filing requirements for the past 90 days.  x  YES  ¨  NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge in definitive proxy or information statements incorporated by reference, in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).  x  YES  ¨  NO

The aggregate market value of the voting common shares without par value held by non-affiliates of the registrant as computed by reference to the closing price on the New York Stock Exchange on June 30, 2003 was $2,319,187,110.

The number of common shares outstanding as of February 25, 2004 was 162,014,775.

DOCUMENTS INCORPORATED BY REFERENCE: None

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

INTRODUCTORY STATEMENT

On November 8, 2003, Moore Wallace Incorporated (the “Corporation”) entered into a combination agreement with R.R. Donnelley & Sons Company (“RR Donnelley”) under which each common share of the Corporation will be exchanged for 0.63 of a share of common stock of RR Donnelley (the “Combination”). On February 23, 2004, the shareholders of each corporation approved the Combination and, on February 25, 2004, the Ontario Superior Court of Justice issued a final order approving the Combination. This Annual Report on Form 10-K was prepared and signed prior to the consummation of the Combination, which occurred on February 27, 2004, and is being filed after the consummation of the Combination.

The impact of the Combination is not reflected in the results of the Corporation, except for $3.2 million in direct acquisition expenses that were recognized in the Corporate segment in the fourth quarter of 2003. The preliminary strategy for the new organization is focused on establishing improved returns, lower costs and increased profitability, increased financial strength and enhanced revenue opportunities. While the detailed plan to execute this strategy has not yet been finalized, management believes that the Combination will impact operating segment results in future periods through cross-selling initiatives, expanded production platforms, reduced overhead costs and increased purchasing power. Where possible, the expected impact of the Combination, including the preliminary strategies to execute the Corporation’s business plan, is referenced in the discussions to follow.

CAUTIONARY STATEMENT

We have made forward-looking statements in this Annual Report on Form 10-K that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management. Generally, forward-looking statements include information concerning possible or assumed future actions, events or results of operations of Moore Wallace or its pending combination with RR Donnelley. Forward-looking statements include, among other things, statements in this document, and in documents that may be incorporated by reference into this document, regarding:

These statements may include, or be preceded or followed by, the words “may,” “will,” “should,” “potential,” “possible,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “hope” or similar expressions. We claim the protection of the Safe Harbor for Forward-Looking Statements contained in the Private Securities Litigation Reform Act of 1995 for all forward-looking statements.

Forward-looking statements are not guarantees of performance. You should understand that the following important factors, in addition to those discussed elsewhere in this Form 10-K, could affect the future results of the Corporation and its Combination with RR Donnelley after the completion of the combination transaction with RR Donnelley and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

CAUTIONARY STATEMENT (continued)

Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on such statements, which speak only as of the date of this document or the date of any document which may be incorporated by reference into this document.

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Except to the extent required by applicable law or regulation, we do not undertake and we hereby disclaim any obligation to release any revisions to such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

UNLESS OTHERWISE INDICATED, ALL DOLLAR AMOUNTS IN THIS ANNUAL REPORT ON FORM 10-K ARE EXPRESSED IN UNITED STATES CURRENCY AND ALL REFERENCES TO “MOORE WALLACE” OR THE “CORPORATION” IN THIS ANNUAL REPORT ON FORM 10-K REFER TO MOORE WALLACE INCORPORATED AND ITS SUBSIDIARIES.

PART I.

A) GENERAL DEVELOPMENT OF BUSINESS

Moore Wallace Incorporated, a corporation continued under the Canada Business Corporations Act, was established in 1882. The Corporation is a leading single-source provider of print management and outsourced communications, delivering one of the widest arrays of products and services. Moore Wallace’s broad platform of integrated print solutions, combined with the ability to manage a customer’s print logistics and supply chain, work together to increase efficiencies and reduce costs. We offer our products and services principally in the United States and Canada, but we also have operations in Latin America, primarily in Mexico and Brazil, and in Europe.

Our business is organized into three segments: Forms and Labels, Outsourcing, and Commercial.

In 2003, Moore Wallace recorded net sales of $2,872.8 million and had approximately 17,100 employees worldwide. Moore Wallace has its registered office at 6100 Vipond Drive, Mississauga, Ontario, Canada L5T 2X1, and its executive offices are located at 375 Park Avenue, New York, New York 10152. The Moore Wallace internet address is www.moorewallace.com. You may view our filings with the United States and Canadian securities regulatory authorities, including our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments thereto, as well as other regulatory filings, free of charge through our website located at www.moorewallace.com. The Corporation’s United States regulatory filings are also available at www.sec.gov, and our Canadian regulatory filings are also available at www.sedar.com.

In late 2000, a new executive management team, with extensive operating, printing industry and financial experience and expertise and the proven ability to turn around distressed organizations, assumed leadership of the Corporation. Their primary objective was to implement a new business strategy that would return the Corporation to profitability and increase revenues. The key elements of this strategy were to:

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

A) GENERAL DEVELOPMENT OF BUSINESS (continued)

Over the next two years, the Corporation successfully executed this strategy by realigning employee compensation and performance incentives with shareholder objectives, applying rigorous financial discipline around capital expenditures and corporate spending, divesting assets and operations that no longer met strategic goals or performance targets, consolidating purchasing with a few key suppliers to improve pricing and payment terms, launching a “one-stop shopping” strategy to targeted corporate accounts, and pursuing acquisitions that expanded our product and service offerings or achieved operating efficiencies.

On May 15, 2003, we acquired Wallace Computer Services, Inc. (“Wallace”), which further enhanced our competitive position in the printing industry and established the Corporation as a leading provider of integrated print management solutions. The acquisition also provided further opportunity to improve overall profitability, achieve significant cost synergies, leverage complementary products and services, and augment cross-selling opportunities across a more diverse platform.

Since the merger with Wallace, we have identified—and in large part, recognized—the additional cost savings and other benefits of this strategy through reductions in workforce and elimination of duplicative administrative and infrastructure costs, rationalization of manufacturing plants and equipment, manufacturing process efficiencies, procurement savings, and continued rigorous financial discipline. Other strategic acquisitions since December 2000 include the addition of Document Management Services, The Nielsen Company and Payment Processing Solutions, Inc.

In November 2003, we announced that we had entered into a definitive agreement to combine with RR Donnelley. The transaction brings together two industry leaders with highly complementary products and services to create the world’s premier full-service global provider and the largest printing company in North America. The preliminary strategy of the combined company will be to create shareholder value through:

The combined company will retain the RR Donnelley name and the Corporation will cease to exist as a separate publicly traded entity, although the Moore and Wallace names will continue to be used as tradenames for marketing products.

B) FINANCIAL INFORMATION ABOUT SEGMENTS

The Corporation operates in the printing industry with three distinct operating segments based on the way management regularly assesses information for decision-making purposes. The three segments are Forms and Labels, Outsourcing and Commercial. These segments market print and print related products and services to a geographically diverse customer base. Management has aggregated divisions within the reportable segments due to strong similarities in the economic characteristics, nature of products and services, production processes, class of customer and distribution methods used.

Wallace historically reported in two operating segments, Forms and Labels and Integrated Graphics. The principal products within the Forms and Labels segment included paper-based forms, electronic data processing and packaging labels and a standard line of office products. The principal products within the Integrated Graphics segment included commercial print and direct mail. After the Acquisition, the Corporation classified the Wallace Forms and Labels operations within the Forms and Labels segment and the Integrated Graphics operations within the Commercial segment. The segment information in the table below includes Wallace from the acquisition date.

As a result of acquiring the remaining interest in Quality Color Press, Inc. in May 2002 (see Note 3 to the financial statements), management has reclassified this business from the Commercial segment to the Forms and Labels segment in order to reflect the business synergies and integration plans. Certain other minor operations were transferred from the Outsourcing segment to the Forms and Labels segment.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

B) FINANCIAL INFORMATION ABOUT SEGMENTS (continued)

OPERATING SEGMENTS

Years ended December 31,

Expressed in thousands of U.S. Dollars

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

C) NARRATIVE DESCRIPTION OF BUSINESS

On May 15, 2003, the Corporation acquired all of the outstanding shares of Wallace Computer Services, Inc. (“Wallace”), a leading provider of printed products and print management services. Wallace historically reported in two operating segments, Forms and Labels and Integrated Graphics. The principal products within the Forms and Labels segment included paper-based forms, electronic data processing and packaging labels and a standard line of office products. The principal products within the Integrated Graphics segment included commercial print and direct mail. After the Acquisition, the Corporation classified the Wallace Forms and Labels operations within the Forms and Labels segment and the Integrated Graphics operations within the Commercial segment. The segment information in the table below includes Wallace from the acquisition date.

FORMS AND LABELS

Overview

Our Forms and Labels segment composes, manufactures, warehouses and delivers a wide range of printed and electronic communications and print related services, including print fulfillment, print-on-demand, warehousing, kitting and fulfillment services. This segment is comprised of four products: Forms, Labels, Supplies and Print Fulfillment. This segment had $1,534.5 million, or 53%, of consolidated net sales in 2003 (2002 - 56%; 2001 - 56%). We seek to be a single-source supplier of a customized, “one-stop shopping” solution for our customers’ print and digital communication needs through a multi-site, state-of-the-art print distribution and warehousing network. Our Forms and Labels segment has historically accounted for the largest portion of our net sales.

We offer a range of value-added services, which include warehousing and distribution capabilities, print management services and fulfillment and kitting services, in which we assemble various print and non-print items in a customized package for delivery to our customers, or directly to consumers. The importance of fulfillment and distribution capabilities in the U.S. market has increased significantly in recent years as customers have sought printing services companies, such as Moore Wallace, that have broad geographical coverage and sufficient manufacturing capacity to satisfy customers’ requirements on short notice.

Products and Services

Many of the products and services that we offer in this segment have evolved to reflect the efficiency of the internet as a means of business-to-business communication. For example, we provide our customers with print-enabling solutions, including e-procurement, inventory management, personalized printing (such as business cards and stationery products), variable imaging and integrated print fulfillment services. Our proprietary digital content management system allows us to manage our customers’ electronic data in a fully integrated and secure digital repository. We have coupled our ability to manage our customers’ data with a capability to customize the “front-end” applications viewed by consumers to provide a readily accessible platform for automated document production. Using this approach, we are able to deliver to our customers a high quality product at a low cost. Specifically, our products include:

Forms

We are recognized as a leading manufacturer of forms and forms-related products. The forms business produces pressure seal forms, tax forms, custom continuous forms, Speediset(R) multi-part forms, and dual purpose bond and custom printed laser cut sheets. In 2003, forms in the United States, Canada, Mexico and Latin America comprised approximately 48% of total net sales for this segment.

Labels

We are a leading provider of thermal and cut sheet labels. Cut sheet labels are a combination of a liner, glue and paper and are die cut in a variety of ways. Cut sheet labels are fed through a laser printer and come in paper and film. Our thermal label business is focused on servicing the inventory tracking, shipping/receiving and other industries that use bar code information. In 2003, labels comprised approximately 18% of total net sales for this segment.

Supplies

We also offer our customer base such products as business cards, envelopes, stationery and computer paper that we do not manufacture. In 2003, supplies comprised approximately 18% of total net sales for this segment.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

C) NARRATIVE DESCRIPTION OF BUSINESS (continued)

Print Fulfillment

Our print fulfillment services business offers a value added business solution that incorporates technology, re-engineering and outsourcing to address key supply chain issues and emerging business trends. One component of this business is the storage and distribution of products, such as documents, brochures, binders, CDs and related items. We assemble these items into a single custom kit which is then shipped to a customer or stored for future distribution. Examples of kit packaging include health maintenance organization or financial enrollment kits, new employee kits, training courses and sales kits. We also produce digital documents that may be printed “on demand” by the customer at the times and in the quantities that it deems appropriate from time to time. In 2003, print fulfillment comprised approximately 16% of total net sales for this segment.

Customers

Our customer base in this segment is highly diversified. No customer accounted for more than 5% of our net sales in this segment for 2003. Approximately 1,040 salespersons service this segment, with a view to cross-selling our full array of products and services. While we continue to focus our sales efforts on key Fortune 500 companies, we believe that middle market companies are an underserved market. We have increased our sales efforts to this market, where we believe we can achieve significant increases in net sales.

Contracts in this segment tend to be longer-term, generally of three to five years in duration. Most of these contracts have fixed pricing schedules subject to adjustment based on an index published in Pulp and Paper Weekly, an independent publication serving the printing industry, and the consumer price index in the case of contracts solely for production of forms; specified sub-indices of the producer price index (in the U.S. and Canada) in the case of contracts for label production; or the consumer price index (in the U.S. and Canada) in the case of print fulfillment contracts and print management services. Our contracts typically do not provide for volume discounts and are generally subject to minimum order quantities. The typical sales cycle is approximately 30 days in the case of orders for forms or labels, and four to six months in the case of print fulfillment and print management contracts. Most of our contracts in this segment are terminable at will, by us or our customers, upon specified notice.

Facilities

We own 27 significant locations (i.e., more than 35,000 square feet in size) that are used in our Forms and Labels segment in the United States, five in Canada, four in Brazil, two in Mexico, and one in each of Venezuela, El Salvador and Costa Rica. We also lease 11 material locations in the United States and five in Canada, as well as one in El Salvador. Most of these locations include both production and warehousing facilities.

OUTSOURCING

Overview

Our Outsourcing segment includes principally the operations of Moore Business Communications Services (BCS), which provides high quality, customized, variably-imaged customer communications, primarily for financial services, telecommunications, insurance and healthcare companies in North America. BCS had $342.2 million of net sales or 12% of consolidated net sales in 2003 (2002 - 15%; 2001 - 15%). We believe that outsourcing will represent an increasing proportion of our consolidated net sales, as customers seek cost efficiencies through the elimination of in-house printing facilities. We continue to look to expand this segment through strategic acquisitions, such as our December 2003 acquisition of Payment Processing Solutions, Inc.

Products and Services

Our product and service offering in this segment permits our customers the ability to reach consumers using multiple communication methods, including print, mail, e-mail, facsimile, CD-ROM and internet-based and other wireless solutions. Examples of our products and services include daily securities transaction confirmations, periodic account statements, checks, consumer invoices, insurance policies, stored value cards such as prepaid telephone and gift cards, enrollment kits for financial services, insurance and health care companies, periodic mailings of privacy and similar notices and periodic tax reporting statements. In some cases, we acquire customer equipment and/or facilities in connection with a new customer contract.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

C) NARRATIVE DESCRIPTION OF BUSINESS (continued)

Customers

As in the case of our other operating segments, our Outsourcing customers are highly diversified, with no customer accounting for more than 5% of our net sales in this segment for 2003 other than one customer, which accounted for approximately 15% of net sales in 2003. Outsourcing relationships involve a high degree of coordination with our customers and this segment is supported by industry-focused project managers, programmers, customer service and sales professionals who manage customer projects from inception to completion. Through this total management approach, we seek to provide our customers with significant flexibility, enabling them to modify their requirements as rapidly as consumer preferences or market demands may dictate.

Customer contracts in this segment are typically longer-term, generally of three to five years in duration. These contracts generally have one-year automatic renewal provisions and permit termination for cause, subject to an obligation to provide the customer with transition support services. Most of these contracts contain fixed pricing schedules subject to adjustment based on the U.S. producer price index and the Statistics Canada Industrial Product Price, Pulp and Paper Index, or fixed volume of products and services purchased. Because our services in this segment are highly tailored to customer requirements, the sales cycle tends to be significant, generally ranging up to nine months. Our sales force of approximately 60 people is engaged both in marketing our services and providing ongoing relationship management and coordination with our print professionals.

Facilities

BCS has ten significant production facilities in the United States. These facilities are strategically located to provide geographic production and distribution access for our customers. Of these ten facilities, seven are owned and three are leased.

COMMERCIAL

Overview

Our Commercial segment serves the printing, direct marketing, delivery and warehouse management requirements of a highly diversified, international customer base. This segment had $996.1 million of net sales or, 35% of consolidated net sales, in 2003 (2002 - 29%; 2001 - 29%). We plan to expand our Commercial segment through internal growth as well as through opportunistic acquisitions, such as our January 2002 acquisition of The Nielsen Company. This acquisition allowed us to expand our product line to include high quality, multi-color annual reports and a wide variety of marketing materials. Nielsen’s commercial print capabilities have also enabled us to attract customers who want a single source for all their printing needs.

Products and Services

Our product and service offering in this segment typically involves highly customized, variably-imaged print communications. Examples of these print products include glossy annual reports, corporate image and product brochures, catalogs and marketing inserts, as well as pharmaceutical inserts and other marketing, retail point-of-sale and promotional materials and technical publications.

Our Commercial segment includes Moore Wallace Response Marketing Services (“RMS”). RMS’s business involves highly customized direct mail communications as a significant component. We believe that direct mail marketing services will constitute an increasing proportion of the marketing expenditures of our customers as they seek to maximize the impact of their marketing efforts. Using proprietary imaging technology and data provided by our customers, RMS is able to create personalized direct mail offers designed to achieve a higher response rate from targeted consumer segments. These offers may take the form, for example, of product advertisements printed directly on a consumer’s invoice that reflect that consumer’s historical purchasing profile. We assist our customers in designing these communications. We are able to produce more than a billion pieces of secure, personalized direct mail communications annually.

Through our Publications and Directory group, we also provide print products and digital services for customers who produce data-intensive publications such as business-to-business catalogs, parts and price lists, telephone directories and professional, reference and trade books.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

C) NARRATIVE DESCRIPTION OF BUSINESS (continued)

Customers

Our customer base in this segment is highly diversified with no customer accounting for more than 5% of our net sales in this segment for 2003. Due to the project-oriented nature of this business, our customer base may vary significantly from year to year and depend on the number, size and complexity of a customer’s projects in a given period, as well as the customer’s overall printing and marketing budgets. Our customer relationships tend to be highly service-oriented, with a focus on the production and timely delivery of a high quality product. Because these services require a high degree of interaction with our customers, our sales force of approximately 285 people not only solicits business, but, along with approximately 185 sales support employees, coordinates ongoing execution of each customer order.

Customer contracts in this segment are typically entered into on a project-by-project basis, although we are seeking to enter into master contracts with customers who regularly engage our services. These master contracts typically prescribe all of the terms, including price that will govern any particular printing project, without any volume commitments.

Facilities

We own 18 significant locations that are used by our Commercial segment in the United States and one in Belgium. We also lease 12 material locations in the United States and one in France. All of these locations include both production and warehousing facilities.

COMPETITION

We compete on the basis of product quality, service and price, the range of products offered, distribution capabilities, customer relationships and customer service.

The environment in each operating segment in which we operate is highly competitive, both in terms of product category and geographic region, as customers focus on cost reduction, vendor reduction and improved total cost of ownership for print communications programs. Consolidation in other industries has also led to increased purchasing power among our customers, which has increased downward pricing pressure in the industry. We encounter competition from both larger and smaller companies that offer the same or similar products and services. Some of our competitors are larger than we are and have greater financial and technical resources. In some areas, due primarily to factors including freight rates and customer preferences for local providers, regional printers may have a competitive advantage. While we have a large number of competitors in each operating segment, the markets in which each of our operating segments operates are highly fragmented and the majority of our competitors compete with us in only one business segment.

RAW MATERIALS

The primary raw materials required in our operations are paper and ink. The price of paper and ink represents a significant portion of our cost of sales. Increases in price or a lack of availability of these raw materials could have a material adverse effect on our consolidated financial position and results of operations.

While we generally pass on increases and decreases in the cost of paper and ink to our customers, these adjustments take place only at certain times during the year and are subject to certain limitations. We have reduced the number of our paper and ink suppliers in order to leverage our purchasing power and have negotiated long-term supply contracts that we believe provide favorable price, terms, quality and service.

We have not experienced any difficulties in obtaining supplies of any raw material in any recent period and we believe that our long-term supply contracts for paper and strong relationships with our paper suppliers will enable us to receive adequate supplies in the event of tight markets; however, there can be no assurance that we will not be adversely affected by a tight paper market.

INTELLECTUAL PROPERTY

Moore Wallace is the holder of a significant number of patents in the United States and throughout the world as well as a large number of patent applications in process. In the Forms and Labels segment, we believe that our pressure seal-related patents, linerless label-related patents and our radio frequency identification-related patents are material to the segment. We also believe that our XLO and Midax variable imaging-related patents are material to our Outsourcing segment as well as to the direct mail business of the Commercial segment. The duration of these patents range from between 17 and 20 years. Other than as set forth below, there are no material patents that will expire within the next five years.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

C) NARRATIVE DESCRIPTION OF BUSINESS (continued)

We are the exclusive licensee of U.S. patent No. 4,918,128 relating to TN-124 and TN124F pressure seal cohesive, which is material to our pressure seal business. This patent expires in 2008. We developed, and in 2002 received a patent for, a new and improved formulation of pressure seal cohesive that we believe will offset any adverse impact that may result from the expiration of the `128 patent.

Moore Wallace also has a large number of trademarks in the United States and throughout the world. The “Moore Wallace(R)” and Moore Wallace Logo(R) trademarks are material to each of our operating segments.

BACKLOG

At December 31, 2003, the backlog of firm customer orders to be handled in the next 120 days was approximately $120.0 million. The backlog was approximately $100.0 million at December 31, 2002.

EMPLOYEES

At December 31, 2003, Moore Wallace employed approximately 17,100 employees. Of these, approximately 1,700 are covered by collective bargaining agreements with eleven unions (four in Canada, one in Mexico, one in Venezuela, one in Barbados and four in Brazil). These agreements expire on various dates between 2004 and 2007. There have been no significant interruptions or curtailments of our operations in recent years due to labor disputes.

ENVIRONMENTAL REGULATIONS

Moore Wallace is subject to laws and regulations relating to the protection of the environment. We accrue for expenses associated with the 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. While it is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that our subsidiaries may undertake in the future, in the opinion of management, compliance with present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material adverse effect upon our consolidated results of operations or financial condition. See also, “Legal Proceedings” below.

D.) FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS

Years ended December 31,

Expressed in thousands of U.S. Dollars

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

At December 31, 2003, the Corporation owned or leased facilities for manufacturing, distribution and sales offices in 46 states and 21 foreign countries. Management believes that the Corporation’s facilities are suitable and adequate for its business. Management continually evaluates the Corporation’s facilities to ensure they are consistent with the Corporation’s needs and business strategy. Certain of these facilities listed below are shared between operating segments, but have been presented within the segment which predominately utilizes the facility.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

A summary of significant locations (over 35,000 square feet) that are owned by the Corporation and its subsidiaries is set forth below:

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

A summary of significant locations (over 35,000 square feet) that are leased by the Corporation and its subsidiaries are set forth below:

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

In the normal course of business, Moore Wallace is involved in various lawsuits, claims and administrative proceedings. While the outcome of these matters is subject to future resolution, management’s evaluation and analysis of such matters indicates that, individually and in the aggregate, the probable ultimate resolution of such matters will not have a material effect on Moore Wallace’s consolidated financial condition and results of operations.

The Corporation has been identified as a Potentially Responsible Party (“PRP”) at the Dover, New Hampshire Municipal Landfill, a United States Environmental Protection Agency Superfund Site. The Corporation has been participating with a group of approximately 26 other PRPs to fund the study of and implement remedial activities at the site. Remediation at the site has been on-going and is anticipated to continue for at least several years. The total cost of the remedial activity was estimated to be approximately $26.0 million. The Corporation’s share is not expected to exceed $1.5 million. We believe our reserves are sufficient based on the present facts and recent tests performed at this site. We will continue to monitor this exposure.

On February 9, 2004, the Corporation announced that Mark Hiltwein, its Executive Vice President and Chief Financial Officer, had been suspended with pay. This suspension resulted from actions Mr. Hiltwein took in providing a misdated document to PricewaterhouseCoopers LLP (“PwC”) in connection with an investigation they were conducting. Early in January, PwC had been retained to conduct an investigation into allegations in an anonymous letter received by the Corporation in late December 2003 alleging misuse of acquisition-related restructuring charges, together with vague assertions of other accounting actions. When it was received, the anonymous letter was immediately forwarded to the Audit Committee of the Board of Directors for any action it deemed appropriate and was also forwarded to the United States Securities and Exchange Commission, the Ontario Securities Commission and the New York Stock Exchange. On February 12, 2004, the Corporation received a document subpoena from the United States Attorney’s Office for the District of Connecticut in connection with this matter. The Corporation is cooperating with these governmental authorities. On February 17, 2004, the Corporation announced that PwC completed its independent investigation into allegations of accounting misconduct made in the anonymous letter. PwC reported to the Corporation’s Audit Committee that PwC found no support for the allegations of misconduct contained in the anonymous letter. The PwC report made recommendations for improved documentation around restructuring charges, most importantly noting that there was no centrally documented plan for corporate restructuring activities. The Corporation intends to incorporate those recommendations into its practices. The delivery of the PwC report and the Audit Committee’s acceptance of that report concluded the investigation by the Audit Committee into the allegations made in the anonymous letter.

There were no matters submitted to a vote of the shareholders of the Corporation during the fourth quarter of 2003.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

PART II.

There were 4,262 shareholders of record at December 31, 2003. As described above, in connection with the Combination, each of the Corporation’s common shares is being exchanged for 0.63 of a share of common stock of RR Donnelley.

The principal markets for the common shares are The Toronto Stock Exchange and the New York Stock Exchange.

The following table sets forth the high and low prices of the common shares of the Corporation on The Toronto Stock Exchange and the New York Stock Exchange.

RECENT SALES OF UNREGISTERED SECURITIES

On December 31, 2003, the Corporation issued 1,580,213 unregistered common shares in connection with its acquisition of Payment Processing Solutions, Inc. No underwriters were involved and there were no underwriting discounts or commissions. The securities were issued in reliance upon the exemption from registration provided under Section 4(2) of the Securities Act based on the fact that the common shares were sold by the issuer in a transaction not involving a public offering.

On February 25, 2004, the Corporation issued 2,233,989 unregistered common shares also in connection with its acquisition of Payment Processing Solutions, Inc. No underwriters were involved and there were no underwriting discounts or commissions. The securities were issued in reliance upon the exemption from registration provided under Section 4(2) of the Securities Act based on the fact that the common shares were sold by the issuer in a transaction not involving a public offering.

See “Item 12. Security Ownership of Certain Beneficial Owners and Management-Securities Authorized for Issuance under Equity Compensation Plans” for a description of equity securities authorized for issuance under the Corporation’s compensation plans.

DIVIDENDS

In the first quarter of 2001, the Corporation paid a dividend of $0.05 per common share. On April 25, 2001, the Board of Directors decided to suspend future dividends.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

CANADIAN CAPITAL IMPORT—EXPORT AND WITHHOLDING TAX REGULATIONS

There are no charter or contractual provisions expressly limiting either the amount of cash dividends which the Corporation may declare and pay on its common shares or the right of non-residents of Canada, as such, to hold or vote any of the common shares of the Corporation. There are, however, certain restraints on the holding of the Corporation’s voting equity securities. The Investment Canada Act (the “Act”) limits the number of common shares of the Corporation which may be acquired by a non-Canadian without approval under the Act. The effect of the Act is to prohibit the acquisition of control by a non-Canadian of certain Canadian businesses, such as the Corporation, unless such acquisition is found by the responsible Minister of the Government of Canada to be of net benefit to Canada.

Canadian federal tax legislation, in conjunction with applicable tax treaties, generally requires a 15% withholding from dividends paid to the Corporation’s shareholders resident in the United States, the United Kingdom and most western European countries. Similarly, depending upon applicable tax treaties, dividends paid to other non-residents of Canada are subject to a withholding tax at a maximum rate of 25%. Stock dividends paid to non-residents of Canada will be subject to withholding tax at the same rate as cash dividends. The amount of a stock dividend (for tax purposes) would generally be equal to the amount by which the stated capital of the Corporation has increased by reason of the payment of such dividend. The Corporation will furnish additional tax information to shareholders in the event of such dividend. Interest payable on the Corporation’s debt securities held by non-Canadian residents may also be subject to Canadian withholding tax, depending upon the terms and provisions of such securities and any applicable tax treaties. Under regulations presently in effect in the United States, the Corporation is generally not subject to United States backup withholding rules, which would require withholding at a rate of 31% on dividends and interest paid to certain United States persons who have not provided the Corporation with a taxpayer identification number.

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

The following information summarizes certain selected consolidated financial data that should be read in conjunction with “Management’s Discussion and Analysis of Financial Results of Operations and Financial Condition” and our consolidated financial statements and related notes included elsewhere herein. Differences between Canadian and U.S. generally accepted accounting principles are disclosed in Note 24 to the Consolidated Financial Statements.

FIVE-YEAR SUMMARY

Years ended December 31,

Expressed in thousands of U.S. Dollars,

Except share and per share data

On January 1, 2002, the Corporation adopted the recommendations of CICA Handbook Section 3062, Goodwill and Other Intangible Assets. Under this standard, goodwill from acquisitions subsequent to July 1, 2001 is not amortized but is subject to an annual impairment test. Effective January 1, 2002, all goodwill ceased to be amortized and is subject to an annual impairment test.

Previously, goodwill from acquisitions prior to July 1, 2001 was amortized on a straight-line basis over its useful life, not to exceed 40 years, or was written down when a permanent impairment in value occurred.

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The table below provides a reconciliation of the reported net loss for 2001 to the pro forma net loss, which excludes previously recorded goodwill amortization, on goodwill outstanding at December 31, 2001:

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MOORE WALLACE INCORPORATED

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2003

SELECTED FINANCIAL DATA REQUIRED AND ADJUSTED FOR U.S. GAAP

Years ended December 31,

Expressed in thousands of U.S. Dollars,

Except per share data