##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007,oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File
    No. 1-5842
  Bowne & Co.,
    Inc.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

13-2618477(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)   55 Water Street
    New York, New York


10041(Address of principal executive
    offices)


(Zip code
)   (212) 924-5500
  (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, Par Value $.01

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
 (Title of class)
  o þ
  þ o
  o þ
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o (Do
    not check if a smaller reporting company)
  Rule 12b-2).  Yes o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K:
  Items 10-12




---



##### 





TABLE OF
    CONTENTS
  Form 10-KItem No.

Name of Item

PagePART IItem 1.


Business


2Item 1A.


Risk Factors


10Item 1B.


Unresolved Staff Comments


15Item 2.


Properties


16Item 3.


Legal Proceedings


17Item 4.


Submission of Matters to a Vote of Security
    Holders


17Supplemental Item. Executive Officers of the
    Registrant


17PART IIItem 5.


Market for Registrants Common Equity and
    Related Stockholder Matters


18Item 6.


Selected Financial Data


21Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


22Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


45Item 8.


Financial Statements and Supplementary Data


47Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


94Item 9A.


Controls and Procedures


94Item 9B.


Other Information


97PART IIIItem 10.


Directors and Executive Officers of the
    Registrant


98Item 11.


Executive  Compensation


98Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


98Item 13.


Certain Relationships and Related Transactions


99Item 14.


Principal Accountant Fees and Services


99PART IVItem 15.


Exhibits and Financial Statement Schedules


100Signatures


103CertificationsEX-21: SUBSIDIARIES OF THE COMPANYEX-23.1: CONSENT OF KPMG LLPEX-24: POWERS OF ATTORNEYEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   1




---



##### Table of Contents



PART I  Item 1.
    Business          Financial Communications
    Marketing & Business Communications
 2




---



##### Table of Contents



apps tm tm
        2
 3




---



##### Table of Contents



Industry
    Overview
      The
    Company
  Financial
    Communications
  ® 8-K tm 6-K tm. tm tm
 4




---



##### Table of Contents



tm
        
    The Company developed
    BowneFaxtm
    to replace its network of standard fax machines. While a
    standard fax machine simply transmits a page from one location
    to another,
    BowneFaxtm
    creates a digital file at high resolution and speeds and
    facilitates work-sharing. In terms of speed,
    BowneFaxtm
    shortens turnaround time because pages are read and processed
    five to ten times faster than standard faxes. In terms of
    service,
    BowneFaxtm
    reduces the time the Company and its clients need to clarify
    unclear copy changes and significantly enhances accuracy through
    reduction of editing errors and page tracking.
    Bowne was recognized by InfoWorld magazine in 2005 for its
    pioneering role in XBRL-based solutions and for being the first
    company to file earnings information through the SECs
    voluntary pilot program to test this new data tagging
    technology. Bowne continues to participate in the SECs
    voluntary filing program. During 2006, the Company formed a
    strategic relationship with
    Rivet®
    Software to provide SEC filing companies with a complete
    interactive data solution, including the creation, management,
    submission and analysis of XBRL documents, related consulting
    services, and software support and maintenance. In 2007, the
    strategic relationship with Rivet was expanded to include the
    Canadian market.
    In 2006, the Company completed the implementation of its newest
    proprietary composition system, ACE (Advanced Composition
    Engine). ACE has significantly improved productivity, accuracy
    and page turnaround, and substantially shortened training
    cycles, giving the Company greater flexibility and
    responsiveness to its clients.
    Advances in technology have permitted Bowne to centralize the
    majority of its composition operations into six Centers of
    Excellence, to reduce its composition workforce and to
    outsource the more routine and less critical composition work at
    a lower cost than performing it in-house. 5




---



##### Table of Contents




    In 2007, the Company created a Compliance Service Assistance
    center that will transition a majority of the labor-intensive
    task of work order creation and project coordination of several
    EDGAR-only compliance documents
    (8-Ks,
    6-Ks, and
    Schedule 13s). This will free up capacity in the
    Companys Customer Service centers, enabling project
    coordinators to better manage the relationship side of these
    transactions and increase their focus on projects that require
    greater
    one-on-one
    communication with our clients.
    XMarktm,
    another of the Companys proprietary technologies, takes
    input from clients in a variety of formats and allows conversion
    personnel to produce near-perfect conversions in a single cycle,
    standardizes the document format, and then produces output in a
    variety of formats. In terms of speed,
    XMarktm
    reduces data conversion and composition production time in the
    range of 50 to 90 percent.
    E2
    Expresstm,
    a proprietary technology using
    XMarktm
    as the underlying component, streamlines the process of
    converting
    Microsoft®
    Word, Excel, and PowerPoint files to standardized SEC compliant
    HTML. By standardizing the style elements of typical SEC
    compliance documents such as
    8-Ks and
    10-Qs, a
    significant amount of automation has been added to the
    conversion process. E2 Express reduces the conversion time by
    approximately 30 percent.
    Based upon technology acquired from PLUM Computer Consulting
    Inc. during 2006, the Company announced the launch of a content
    management system,
    FundAligntm,
    that provides mutual fund and investment management firms with
    the means to collaborate throughout the process of creating,
    composing and distributing critical communications such as
    prospectuses and shareholder reports. The system combines a
    Microsoft®
    interface with a network of composing systems.
    Bowne was named to the 2007 Information Week 500, the annual
    ranking of the nations most innovative Information
    Technology companies. Bowne was recognized for investments in
    innovative technology infrastructure and its client facilities
    with an advanced telecommunications and information technology
    infrastructure and state-of-the-art amenities.  Marketing &
    Business Communication
      
    Clients are provided with web-based tools to edit and manage
    their document content repository and order documents for
    delivery, with an electronic library of the clients
    documents that can be edited in real-time by the clients
    sales, marketing, legal and other authorized users.
    Extensive business logic provides for automated customization
    and personalization of each document based on an individual
    clients needs.
    Production and distribution methods are flexible to match the
    needs of our clients with a mix of capabilities for digital
    print and electronic delivery that can be managed at the
    document level.
    Automated controls incorporated throughout the system, using
    barcode technology, provide for speed, quality, and audit
    capabilities for a unique document to be tracked anywhere in the
    system.   6




---



##### Table of Contents



Other
    Information
    Years EndedDecember 31,Type of Service

2007


2006


2005Transactional services


36
%


36
%


37
%Compliance reporting services


22



21



25Mutual fund services


19



19



24Commercial printing services


6



7



6Other


3



2



2Financial Communications


86



85



94Marketing & Business Communications


14



15



6100
%


100
%


100
%         On-site
  (212) 924-5500.
  Competition
   7




---



##### Table of Contents



Cyclical,
    Seasonal and Other Factors Affecting the Companys
    Business
          Research
    and Development
         8




---



##### Table of Contents



Patents
    and Other Rights
  ® sm sm tm ® ® tm tm 8-K tm 6-K tm tm ® ® ® tm tm tm tm apps tm tm tm tm tm tm
  Sales and
    Marketing
    Customers
    and Backlog of Orders
      Employees
   9




---



##### Table of Contents



Suppliers
    International
    Sales
    Item 1A.
    Risk
    Factors  Form 10-K.
  Our
    strategy to increase revenue through introducing new products
    and services and acquiring businesses that complement our
    existing businesses may not be successful, which could adversely
    affect results and may negatively affect earnings.
    
    the pace of technological changes affecting our business
    segments and our clients needs could accelerate, and our
    products and services could become obsolete before we have
    recovered the cost of developing them or obtained the desired
    return on our investment; and
    product innovations and effectively serving our clients requires
    a large investment in personnel and training. The market for
    sales and technical staff is competitive, and we may not be able
    to attract and retain a sufficient number of qualified personnel.   10




---



##### Table of Contents



Revenue
    from printed shareholder documents is subject to regulatory
    changes and volatility in demand, which could adversely affect
    our operating results.
          The
    environment in which we compete is highly competitive, which
    creates adverse pricing pressures and may harm our business and
    operating results if we cannot compete
    effectively.
       11




---



##### Table of Contents



The
    market for our marketing and business communications services is
    relatively new and we may not realize the anticipated benefits
    of our investment.
        Our
    business could be harmed if we do not successfully manage the
    integration of businesses that we acquire.
    
    the difficulty of integrating the operations and personnel of
    the acquired businesses into our ongoing operations;
    the potential disruption of our ongoing business and distraction
    of management;
    the difficulty in incorporating acquired technology and rights
    into our products and technology;
    unanticipated expenses and delays relating to completing
    acquired development projects and technology integration;
    a potential increase in our indebtedness and contingent
    liabilities, which could restrict our ability to access
    additional capital when needed or to pursue other important
    elements of our business strategy;
    the management of geographically remote units;
    the establishment and maintenance of uniform standards,
    controls, procedures and policies;
    the impairment of relationships with employees and clients as a
    result of any integration of new management personnel;
    risks of entering markets or types of businesses in which we
    have either limited or no direct experience;
    the potential loss of key employees or clients of the acquired
    businesses; and
    potential unknown liabilities, such as liability for hazardous
    substances, or other difficulties associated with acquired
    businesses.    We are
    exposed to risks associated with operations outside of the
    United States.
   12




---



##### Table of Contents




    costs of customizing products and services for foreign countries;
    difficulties in managing and staffing international operations;
    increased infrastructure costs including legal, tax, accounting
    and information technology;
    reduced protection for intellectual property rights in some
    countries;
    exposure to currency exchange rate fluctuations;
    potentially greater difficulties in collecting accounts
    receivable, including currency conversion and cash repatriation
    from foreign jurisdictions;
    increased licenses, tariffs and other trade barriers;
    potentially adverse tax consequences;
    increased burdens of complying with a wide variety of foreign
    laws, including employment-related laws, which may be more
    stringent than U.S. laws;
    unexpected changes in regulatory requirements; and
    political and economic instability.    We do
    not have long-term service agreements in the transactional
    services business, which may make it difficult for us to achieve
    steady earnings growth on a quarterly basis and lead to adverse
    movements in the price of our common stock.
    If we
    are unable to retain our key employees and attract and retain
    other qualified personnel, our business could
    suffer.
  and/or
 13




---



##### Table of Contents



If we
    fail to keep our clients information confidential or if we
    handle their information improperly, our business and reputation
    could be significantly and adversely affected.
    Our
    services depend on the reliability of our computer systems and
    our ability to implement and maintain information technology and
    security measures.
    Our
    services depend on third-parties to provide or support some of
    our services and our business and reputation could suffer if
    these third-parties fail to perform
    satisfactorily.
    We
    must adapt to rapid changes in technology and client
    requirements to remain competitive.
    
    technological change;
    frequent product and service introductions; and
    evolving client requirements.    
    enhance our existing products and services;
    successfully develop new products and services that meet
    increasing client requirements; and
    gain market acceptance. 14




---



##### Table of Contents




    have sufficient resources to make these investments;
    be successful in developing product and service enhancements or
    new products and services on a timely basis, if at all; or
    be able to market successfully these enhancements and new
    products once developed.    The
    inability to identify, obtain and retain important intellectual
    property rights to technology could harm our
    business.
    Fluctuations
    in the costs of paper, ink, energy, and other raw materials may
    adversely impact the Company.
    Item 1B.
    Unresolved
    Staff Comments  Form 10-K,
 15




---



##### Table of Contents



Item 2.
    Properties    YearLease




SquareLocation

Expires


Description

Footage5 Henderson Drive 
    West Caldwell, NJ


2014


Digital printing plant and general office space.


211,00055 Water Street 
    New York, NY


2026


Customer service center, general office space, and corporate
    headquarters.


143,0002130-2134
    French Settlement 
    Dallas, TX 75212


2009


Digital printing plant and general office space.


99,200111 Lehigh Drive 
    Fairfield, NJ


2014


Warehouse space.


93,60060 Gervais Drive 
    Don Mills (Toronto), 
    Ontario, Canada


2010


Customer service center, printing plant, and general office
    space.


71,00013527 Orden Drive 
    Santa Fe Springs, CA


2011


Digital printing plant and general office space.


60,0001570 Northside Drive 
    Atlanta, GA


2009


Customer service center, composition, printing plant and general
    office space.


51,0005 Cornell Place 
    Wilmington, MA


2011


Digital printing plant and general office space.


49,50018050 Central Avenue 
    Carson, CA


2014


Printing plant and general office space.


40,000500 West Madison Avenue 
    Chicago, IL


2016


Customer service center and general office space.


36,0001 London Wall 
    London, England


2021


Customer service center and general office space.


16,5005021 Nimtz Parkway 
    South Bend, IN


Owned


Digital and offset printing plant and general office space.


127,000215 County Avenue 
    Secaucus, NJ


Owned


Printing plant and general office space.


125,0001200 Oliver Street 
    Houston, TX


Owned


Customer service center, composition, printing plant and general
    office space.


110,000411 D Street 
    Boston, MA


Owned


Customer service center, composition, printing plant and general
    office space.


73,0001241 Superior Avenue 
    Cleveland, OH


Owned


Customer service center, composition and general office space.


73,0001931 Market Center Blvd. 
    Dallas, TX


Owned


Customer service center, composition and general office space.


68,0001500 North Central Avenue 
    Phoenix, AZ


Owned


Customer service center, composition and general office space.


53,000    16




---



##### Table of Contents



Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Supplemental
    Item.
    Executive
    Officers of the Registrant  Form 10-K.
  Name

Principal Occupation During Past Five Years

AgeDavid J. Shea

Chairman and Chief Executive Officer since November 2007,
    previously served as Chairman, President, and Chief Executive
    Officer from January 2007 to November 2007, President and Chief
    Operating Officer since October 2004. Also served as Senior Vice
    President, Bowne & Co., Inc., and Senior Vice
    President and Chief Executive Officer, Bowne Business Solutions
    and Bowne Enterprise Solutions since November 2003; and as
    Senior Vice President of the Company and President of Bowne
    Business Solutions since May 2002.


52William P. Penders

President since November 2007, previously served as Senior Vice
    President and President of Bowne Financial Communications since
    August 2006; Chief Operating Officer of Bowne Financial
    Communications since December 2005, and served as President of
    Bowne International and President of the Eastern Region of Bowne
    Financial Communications since 2003.


47Elaine Beitler

Senior Vice President, Business Integration, Manufacturing and
    Chief Information Officer since November 2007; previously served
    as Senior Vice President since March 2007 and President of Bowne
    Marketing & Business Communications since December
    2005. Also served as General Manager of Bowne Enterprise
    Solutions since 2004 and Senior Vice President of Client
    Services and Operations for Bowne Enterprise Solutions from
    2003, and Chief Technology Officer for Bowne Technology
    Enterprise since 1998.


48Susan W. Cummiskey

Senior Vice President, Human Resources since December 1998.


55Suzanne Grey

Senior Vice President, Marketing and Strategy since April 2007;
    previously, served as Vice President, Corporate Integration at
    CA, Inc. (formerly Computer Associates International Inc.) from
    December 2005 to March 2007 and Vice President, Global
    Enterprise Solutions at Pitney Bowes, Inc. from February 2001 to
    May 2005.


57Scott L. Spitzer

Senior Vice President, General Counsel and Corporate Secretary
    since May 2004; served as Vice President, Associate General
    Counsel and Corporate Secretary since March 2002; served as Vice
    President and Associate General Counsel from April 2001.


56John J. Walker

Senior Vice President and Chief Financial Officer since
    September 2006; previously, served as Senior Vice President,
    Chief Financial Officer and Treasurer for Loews Cineplex
    Entertainment Corporation since 1990.


55Richard Bambach, Jr.

Chief Accounting Officer of the Company since May 2002 and Vice
    President, Corporate Controller since August 2001; served as
    Interim Chief Financial Officer of the Company from April 2006
    to September 2006.


43William J. Coote

Vice President and Treasurer since December 1998.


53    17




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity and Related Stockholder
    Matters  Share
    Prices
    DividendsPerHigh


Low


Share2007Fourth quarter

$
18.59


$
15.89


$
0.055Third quarter


20.46



14.07



0.055Second quarter


20.09



15.50



0.055First quarter


16.17



14.35



0.055Calendar year


20.46



14.07


$
0.222006Fourth quarter

$
16.47


$
14.07


$
0.055Third quarter


15.90



13.05



0.055Second quarter


17.00



13.10



0.055First quarter


16.67



13.99



0.055Calendar year


17.00



13.05


$
0.22    18




---



##### Table of Contents



Comparison
    of Five-Year Cumulative Return
        
  BasePeriodCompany/Index

12/31/02

12/31/03

12/31/04

12/31/05

12/31/06

12/31/07Bowne & Co., Inc.

$
100


$
115.48


$
140.50


$
130.19


$
141.88


$
158.68S&P 500 Index

$
100


$
128.68


$
142.69


$
149.70


$
173.34


$
182.86S&P 500 Diversified Commercial & Professional
    Services

$
100


$
151.99


$
157.38


$
139.35


$
143.77


$
126.02   Stock
    Repurchase
   19




---



##### Table of Contents



10b5-1
      TotalNumber of


ApproximateShares


Dollar Value ofPurchased as


Shares thatPart of


May Yet BeTotal


Average


Publicly


PurchasedNumber


Price


Announced


Under theof Shares


Paid Per


Plans or


Plans orPeriod

Purchased


Share


Programs


Programs(In thousands, except per share data)October 1, 2007 to October 31, 2007


251


$
17.25



251


$
7,300November 1, 2007 to November 30, 2007


379


$
16.79



379


$
900December 1, 2007 to December 31, 2007


54


$
17.62



54


$
Total


684


$
17.02



684  20




---



##### Table of Contents



Item 6.
    Selected
    Financial Data  Five-Year
    Financial Summary
  Years Ended December 31,2007


2006


2005


2004


2003(In thousands)Operating DataRevenue

$
850,617


$
833,734


$
668,667


$
639,402


$
593,198Expenses:Cost of revenue


(531,230
)


(543,502
)


(429,302
)


(398,704
)


(368,687
)Selling and administrative


(242,118
)


(224,011
)


(187,151
)


(193,195
)


(177,435
)Depreciation


(27,205
)


(25,397
)


(25,646
)


(25,372
)


(29,178
)Amortization


(1,638
)


(534
)










Restructuring charges, integration costs and asset impairment
    charges


(17,001
)


(14,159
)


(10,410
)


(7,738
)


(14,471
)Gain on sale of building














896



Purchased in-process research and development






(958
)










Operating income


31,425



25,173



16,158



15,289



3,427Interest expense


(5,433
)


(5,477
)


(5,154
)


(10,435
)


(11,200
)Loss on extinguishment of debt














(8,815
)


(Loss) gain on sale of marketable securities










(7,890
)






1,022Gain on sale of equity investment


9,210















Other income (expense), net


1,127



3,340



1,537



(39
)


(1,626
)Income (loss) from continuing operations before income taxes


36,329



23,036



4,651



(4,000
)


(8,377
)Income tax (expense) benefit


(9,002
)


(10,800
)


(4,501
)


20



(1,998
)Income (loss) from continuing operations

$
27,327


$
12,236


$
150


$
(3,980
)

$
(10,375
)  21




---



##### Table of Contents



Years Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share data and current ratio)Balance Sheet DataCurrent assets

$
310,222


$
298,291


$
369,995


$
308,299


$
266,000Current liabilities

$
201,273


$
128,527


$
139,100


$
157,387


$
179,088Working capital

$
108,949


$
169,764


$
230,895


$
150,912


$
86,912Current ratio


1.54:1



2.32:1



2.66:1



1.96:1



1.49:1Plant and equipment, net

$
121,848


$
132,784


$
106,944


$
93,997


$
108,452Total assets

$
509,417


$
516,243


$
564,092


$
662,624


$
729,521Total debt

$
77,758


$
77,509


$
75,780


$
75,000


$
138,000Stockholders equity

$
250,479


$
235,235


$
310,256


$
378,631


$
360,511Per Share DataEarnings (loss) per share from continuing operations:Basic

$
0.97


$
0.39


$
0.00


$
(0.11
)

$
(0.31
)Diluted

$
0.90


$
0.39


$
0.00


$
(0.11
)

$
(0.31
)Dividends

$
0.22


$
0.22


$
0.22


$
0.22


$
0.22       Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations 
    (In thousands, except per share information and where
    noted)  Cautionary
    Statement Concerning Forward Looking Statements
     22




---



##### Table of Contents




    general economic or capital market conditions affecting the
    demand for transactional financial printing or the
    Companys other services;
    competition based on pricing and other factors;
    fluctuations in the cost of paper, other raw materials and
    utilities;
    changes in air and ground delivery costs and postal rates and
    regulations;
    seasonal fluctuations in overall demand for the Companys
    services;
    changes in the printing market;
    the Companys ability to integrate the operations of
    acquisitions into its operations;
    the financial condition of the Companys clients;
    the Companys ability to continue to obtain improved
    operating efficiencies;
    the Companys ability to continue to develop services for
    its clients;
    changes in the rules and regulations to which the Company is
    subject;
    changes in the rules and regulations to which the Companys
    clients are subject;
    the effects of war or acts of terrorism affecting the overall
    business climate;
    loss or retirement of key executives or employees; and
    natural events and acts of God such as earthquakes, fires or
    floods.    Overview
       23




---



##### Table of Contents



2
 24




---



##### Table of Contents




    Financial Communications:  Revenue increased
    approximately $23.2 million, or 3%, to approximately
    $729.1 million for 2007 compared to 2006 and segment profit
    increased $17.9 million, or 17%, to approximately
    $120.3 million for 2007 as compared to 2006. The results
    for the year ended December 31, 2007 reflect increases in
    transactional and non-transactional services, specifically the
    increases in compliance reporting services, mutual fund services
    activity and revenue from our Virtual Dataroom services. Revenue
    from our non-transactional services increased 4% and revenue
    from our transactional services increased 2% for the year ended
    December 31, 2007 as compared to 2006.
    Marketing & Business
    Communications:  This segment reported revenue of
    $121.5 million for the year ended December 31, 2007,
    as compared to revenue of $127.8 million for the year ended
    December 31, 2006. The decrease in revenue is primarily the
    result of approximately $11.6 million of revenue from
    (i) Vestcom International Inc.s (Vestcom)
    retail customers that transferred back to Vestcom as part of our
    transition services agreement, (ii) non-recurring revenue
    related to the initial rollout of the Medicare Part D open
    enrollment program and (iii) other non-recurring Vestcom
    transition revenue. Segment profit for 2007 was
    $0.2 million, compared to a loss of $0.6 million in
    2006. The improvement in segment profit is primarily due to the
    integration of the workforces of Vestcoms Marketing and
    Business Communications business with Bowne and the
    elimination of costs as a result of the consolidation of
    production facilities. The results for this segment include the
    operations of Alliance Data Mail Services since its acquisition
    in November 2007, which consisted of approximately
    $4.8 million of revenue and segment loss of approximately
    $0.8 million. Management expects Alliance Data Mail
    Services to make a positive contribution to segment profit in
    2008 as we expect to realize approximately $10.0 million of
    annualized synergies from the consolidation of manufacturing
    facilities and back office operations. Excluding the results of
    Alliance Data Mail Services, segment profit for 2007 was
    $1.0 million.    Items Affecting
    Comparability
      2007


2006


2005(In thousands, except per share data)Financial Communications

$
13,455


$
3,330


$
6,114Marketing & Business Communications


3,099



10,114



415Corporate/Other


447



715



3,881Total

$
17,001


$
14,159


$
10,410After tax impact

$
10,476


$
8,701


$
6,933Diluted per share impact

$
0.32


$
0.28


$
0.20    25




---



##### Table of Contents



Results
    of Operations
     26




---



##### Table of Contents



Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
  Financial
    Communications
  Years Ended December 31,


Year Over Year% of





% of


Favorable/(Unfavorable)Financial Communications Results:

2007


Revenue


2006


Revenue


$ Change


% Change(Dollars in thousands)Revenue:Transactional services

$
304,432



42
%

$
298,362



42
%

$
6,070



2
%Compliance reporting services


186,005



26



175,186



25



10,819



6Mutual fund services


161,369



22



157,235



22



4,134



3Commercial printing services


51,063



7



56,643



8



(5,580
)


(10
)Other


26,256



3



18,515



3



7,741



42Total revenue


729,125



100



705,941



100



23,184



3Cost of revenue


(447,606
)


(61
)


(452,619
)


(64
)


5,013



1Gross margin


281,519



39



253,322



36



28,197



11Selling and administrative


(161,223
)


(23
)


(150,921
)


(21
)


(10,302
)


(7
)Segment profit

$
120,296



16
%

$
102,401



15
%

$
17,895



17
%Other Items:Depreciation

$
(17,899
)


(2
)%

$
(16,714
)


(2
)%

$
(1,185
)


(7
)%Restructuring, integration and asset impairment charges

$
(13,455
)


(2
)%

$
(3,330
)


(0
)%

$
(10,125
)


(304
)%        27




---



##### Table of Contents



Marketing &
    Business Communications
  Years Ended December 31,


Year Over Year% of





% of


Favorable/(Unfavorable)Marketing & Business Communications Results:

2007


Revenue


2006


Revenue


$ Change


% Change(Dollars in thousands)Revenue

$
121,492



100
%

$
127,793



100
%

$
(6,301
)


(5
)%Cost of revenue


(102,996
)


(85
)


(109,236
)


(85
)


6,240



6Gross margin


18,496



15



18,557



15



(61
)


(0
)Selling and administrative


(18,306
)


(15
)


(19,197
)


(16
)


891



5Segment profit (loss)

$
190



0
%

$
(640
)


(1
)%

$
830



130
%Other Items:Depreciation

$
(8,582
)


(7
)%

$
(7,340
)


(6
)%

$
(1,242
)


(17
)%Restructuring, integration and asset impairment charges

$
(3,099
)


(3
)%

$
(10,114
)


(8
)%

$
7,015



69
%    28




---



##### Table of Contents



Summary
     29




---



##### Table of Contents



30




---



##### Table of Contents



Domestic
    Versus International Results of Operations
    Years Ended December 31,2007


2006Domestic (United States)

$
58,339


$
39,703International


21,207



18,873Shared corporate expenses and other costs not directly
    attributable to the segments


(43,217
)


(35,540
)Income from continuing operations before taxes

$
36,329


$
23,036    31




---



##### Table of Contents



Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Financial
    Communications
  Years Ended December 31,


Year Over Year% of





% of


Favorable/(Unfavorable)Financial Communications Results:

2006


Revenue


2005


Revenue


$ Change


% Change(Dollars in thousands)Revenue:Transactional services

$
298,362



42
%

$
251,754



40
%

$
46,608



19
%Compliance reporting services


175,186



25



164,426



27



10,760



7Mutual fund services


157,235



22



159,254



25



(2,019
)


(1
)Commercial printing services


56,643



8



39,470



6



17,173



44Other


18,515



3



11,957



2



6,558



55Total revenue


705,941



100



626,861



100



79,080



13Cost of revenue


(452,619
)


(64
)


(405,515
)


(65
)


(47,104
)


(12
)Gross margin


253,322



36



221,346



35



31,976



14Selling and administrative


(150,921
)


(21
)


(133,322
)


(21
)


(17,599
)


(13
)Segment profit

$
102,401



15
%

$
88,024



14
%

$
14,377



16
%Other Items:Depreciation

$
(16,714
)


(2
)%

$
(20,078
)


(3
)%

$
3,364



17
%Restructuring, integration and asset impairment charges

$
(3,330
)


(0
)%

$
(6,114
)


(1
)%

$
2,784



46
%        32




---



##### Table of Contents



Marketing &
    Business Communications
  Years Ended December 31,


Year Over Year% of





% of


Favorable/(Unfavorable)Marketing & Business Communications Results:

2006


Revenue


2005


Revenue


$ Change


% Change(Dollars in thousands)Revenue

$
127,793



100
%

$
41,806



100
%

$
85,987



206
%Cost of revenue


(109,236
)


(85
)


(41,538
)


(99
)


(67,698
)


(163
)Gross margin


18,557



15



268



1



18,289



6,824Selling and administrative


(19,197
)


(16
)


(7,350
)


(18
)


(11,847
)


(161
)Segment loss

$
(640
)


(1
)%

$
(7,082
)


(17
)%

$
6,442



91
%Other Items:Depreciation

$
(7,340
)


(6
)%

$
(2,499
)


(6
)%

$
(4,841
)


(194
)%Restructuring, integration, and asset impairment charges

$
(10,114
)


(8
)%

$
(415
)


(1
)%

$
(9,699
)


(2,337
)%    33




---



##### Table of Contents



Summary
             34




---



##### Table of Contents



Domestic
    Versus International Results of Operations
    Years Ended December 31,2006


2005Domestic (United States)

$
39,703


$
26,552International


18,873



6,827Shared corporate expenses and other costs not directly
    attributable to the segments


(35,540
)


(28,728
)Income from continuing operations before taxes

$
23,036


$
4,651    35




---



##### Table of Contents



2008
    Outlook
    Full Year 2008Revenues:

$845 to $920 millionTransactional services

$245 to $275 millionNon-transactional services

$600 to $645 millionSegment profit

$70 to $100 millionIntegration, restructuring and impairment charges

$7 to $10 millionDepreciation and amortization

$29 to $31 millionInterest expense

$6 to $6.5 millionDiluted earnings per share from continuing operations

$0.70 to $1.25Diluted earnings per share from continuing operations, excluding
    integration, restructuring and impairment charges and non-cash
    LTEIP expense

$0.88 to $1.43Diluted shares

32.4 millionCapital expenditures

$19 to $21 million   Liquidity
    and Capital Resources
  Liquidity and Cash Flow information:

2007


2006


2005Working capital

$
108,949


$
169,764


$
230,895Current ratio


1.54 to 1



2.32 to 1



2.66 to 1Net cash provided by operating activities

$
98,399


$
3,574


$
17,806Net cash (used in) provided by investing activities

$
(30,224
)

$
6,128


$
51,170Net cash used in financing activities

$
(46,220
)

$
(63,555
)

$
(33,359
)Capital expenditures

$
(20,756
)

$
(28,668
)

$
(39,724
)Proceeds from the sale of subsidiaries (2005 includes the
    proceeds received from the sale of Lionbridge common stock)

$



$
19,447


$
164,282Purchases of treasury stock

$
(51,749
)

$
(68,558
)

$
(33,970
)Acquisitions, net of cash acquired

$
(25,791
)

$
(32,923
)

$
Average days sales outstanding


68



73



70      36




---



##### Table of Contents



37




---



##### Table of Contents



Cash
    Flows
       38




---



##### Table of Contents



Contractual
    Obligations, Commercial Commitments, and Off-Balance Sheet
    Arrangements
            Payments Due by YearContractual Obligations

Total


2008


2009


2010


2011


2012


ThereafterLong-term debt obligations(1)

$
75,000


$
75,000


$



$



$



$



$
Operating lease obligations(2)


207,540



34,410



27,846



20,952



17,258



13,921



93,153Capital lease obligations


2,758



923



734



556



318



227



Unconditional purchase obligations(3)


39,000



11,500



12,000



7,500



8,000







Total contractual cash obligations

$
324,298


$
121,833


$
40,580


$
29,008


$
25,576


$
14,148


$
93,153     (1)
    
    The Companys convertible subordinated debentures issued in
    September 2003 are classified as a current obligation in the
    above table since the debentures may be redeemed by the Company,
    or the holders of the debentures may require the Company to
    repurchase the debentures on October 1, 2008, as further
    described in Note 11 to the Consolidated Financial
    Statements. The Company believes it would be able to refinance
    the debentures on similar terms or could borrow under its
    revolving credit facility (which expires in May 2010), if the
    debentures are redeemed by the Company or repurchased from the
    holders in October 2008.(2)
    
    The operating lease obligations shown in the table have not been
    reduced by minimum non-cancelable sublease rentals aggregating
    approximately $10.1 million throughout the terms of the
    leases. The Company remains secondarily liable under these
    leases in the event that the sub-lessee defaults under the
    sublease terms. The Company does not believe that material
    payments will be required as a result of the secondary liability
    provisions of the primary lease agreements.(3)
    
    Unconditional purchase obligations represent commitments for
    outsourced services.   39




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
   40




---



##### Table of Contents



Accounting for Goodwill and Intangible Assets
  and/or
         41




---



##### Table of Contents



Revenue Recognition No. 06-3
  Allowance for Doubtful Accounts and Sales
    Credits
  Accounting for Income Taxes
     42




---



##### Table of Contents



Accounting for Pensions
        Restructuring Accrual
 43




---



##### Table of Contents



Recent
    Accounting Pronouncements
    FIN 48-1, FIN 48-1). FIN 48-1 FIN 48-1
  No. FAS 157-2 FAS 157-2), FAS 157-2.
     44




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk    Interest
    Rate Risk
      Foreign
    Exchange Rates
    Equity
    Price Risk
     45




---



##### Table of Contents



46




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
             
    47




---



##### Table of Contents



BOWNE &
    CO., INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Years Ended December 31,2007


2006


2005(In thousands, except per share information)Revenue

$
850,617


$
833,734


$
668,667Expenses:Cost of revenue


(531,230
)


(543,502
)


(429,302
)Selling and administrative


(242,118
)


(224,011
)


(187,151
)Depreciation


(27,205
)


(25,397
)


(25,646
)Amortization


(1,638
)


(534
)


Restructuring charges, integration costs and asset impairment
    charges


(17,001
)


(14,159
)


(10,410
)Purchased in-process research and development






(958
)


(819,192
)


(808,561
)


(652,509
)Operating income


31,425



25,173



16,158Interest expense


(5,433
)


(5,477
)


(5,154
)Loss on sale of marketable securities










(7,890
)Gain on sale of equity investment


9,210







Other income, net


1,127



3,340



1,537Income from continuing operations before income taxes


36,329



23,036



4,651Income tax expense


(9,002
)


(10,800
)


(4,501
)Income from continuing operations


27,327



12,236



150Discontinued operations:Gain on sale of subsidiaries, net of tax






3,831



671Loss from discontinued operations, net of tax


(223
)


(17,835
)


(1,425
)Net loss from discontinued operations


(223
)


(14,004
)


(754
)Net income (loss)

$
27,104


$
(1,768
)

$
(604
)Earnings per share from continuing operations:Basic

$
0.97


$
0.39


$
0.00Diluted

$
0.90


$
0.39


$
0.00Loss per share from discontinued operations:Basic

$
(0.01
)

$
(0.45
)

$
(0.02
)Diluted

$
(0.01
)

$
(0.45
)

$
(0.02
)Total earnings (loss) per share:Basic

$
0.96


$
(0.06
)

$
(0.02
)Diluted

$
0.89


$
(0.06
)

$
(0.02
)    48




---



##### Table of Contents



BOWNE &
    CO., INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In thousands, except share information)ASSETSCurrent assets:Cash and cash equivalents

$
64,941


$
42,986Marketable securities


38,805



42,628Accounts receivable, less allowances of $4,302 (2007) and
    $6,431 (2006)


134,489



153,169Inventories


28,789



25,591Prepaid expenses and other current assets


43,198



33,917Total current assets


310,222



298,291Property, plant and equipment at cost, less accumulated
    depreciation of $248,372 (2007) and $231,576 (2006)


121,848



132,784Other noncurrent assets:Goodwill


35,835



33,131Intangible assets, less accumulated amortization of $2,203
    (2007) and $552 (2006)


9,616



4,494Deferred income taxes


24,906



37,430Other


6,990



10,113Total assets

$
509,417


$
516,243LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt and capital lease obligations

$
75,923


$
1,017Accounts payable


36,136



43,411Employee compensation and benefits


41,092



38,226Accrued expenses and other obligations


48,122



45,873Total current liabilities


201,273



128,527Other liabilities:Long-term debt and capital lease obligations  net of
    current portion


1,835



76,492Deferred employee compensation


36,808



52,509Deferred rent


18,497



22,199Other


525



1,281Total liabilities


258,938



281,008Commitments and contingenciesStockholders equity:Preferred stock:Authorized 1,000,000 shares, par value $.01 Issuable in
    series  none issued






Common stock:Authorized 60,000,000 shares, par value $.01 Issued and
    outstanding 43,165,282 shares (2007) and
    42,537,617 shares (2006)


432



425Additional paid-in capital


120,791



98,113Retained earnings


353,613



332,002Treasury stock, at cost 16,858,575 shares (2007) and
    14,030,907 shares (2006)


(225,751
)


(177,901
)Accumulated other comprehensive income (loss), net


1,394



(17,404
)Total stockholders equity


250,479



235,235Total liabilities and stockholders equity

$
509,417


$
516,243    49




---



##### Table of Contents



BOWNE &
    CO., INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended December 31,2007


2006


2005(In thousands)Cash flows from operating activities:Net income (loss)

$
27,104


$
(1,768
)

$
(604
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Net loss from discontinued operations


223



14,004



754Depreciation


27,205



25,397



25,646Amortization


1,638



534



Purchased in-process research and development






958



Asset impairment charges


6,588



2,550



3,523Gain on sale of equity investment


(9,210
)






Loss on sale of marketable securities










7,890Provision for doubtful accounts


838



1,419



2,755Non-cash stock compensation


13,064



3,175



1,171Deferred income tax provision


4,638



(485
)


(3,260
)Tax benefit of stock option exercises


1,806



999



1,075Excess tax benefits from stock based compensation


(846
)


(184
)


Other


1,763



(295
)


(3,194
)Changes in other assets and liabilities, net of acquisitions:Accounts receivable


30,046



(14,079
)


(17,029
)Inventories


497



2,686



(5,399
)Prepaid expenses and other current assets


(3,170
)


(3,213
)


1,465Accounts payable


(8,095
)


5,018



484Employee compensation and benefits


7,094



(9,039
)


(12,218
)Accrued expenses and other obligations


1,291



(21,768
)


15,236Net cash used in operating activities of discontinued operations


(4,075
)


(2,335
)


(489
)Net cash provided by operating activities


98,399



3,574



17,806Cash flows from investing activities:Purchase of property, plant and equipment


(20,756
)


(28,668
)


(39,724
)Purchase of marketable securities


(57,400
)


(61,100
)


(154,272
)Proceeds from sales of marketable securities


61,200



109,314



139,357Proceeds from the sale of fixed assets


222



248



234Proceeds from the sale of subsidiaries, net






6,738



108,910Acquisition of businesses, net of cash acquired


(25,791
)


(32,923
)


Proceeds from the sale of equity investment


10,817







Net cash provided by (used in) investing activities of
    discontinued operations


1,484



12,519



(3,335
)Net cash (used in) provided by investing activities


(30,224
)


6,128



51,170Cash flows from financing activities:Proceeds from borrowings, net of financing costs


1,000







33,503Payment of debt and capital lease obligations


(1,948
)


(821
)


(34,100
)Proceeds from stock options exercised


11,714



12,533



9,868Payment of dividends


(6,083
)


(6,680
)


(7,386
)Purchase of treasury stock


(51,749
)


(68,558
)


(33,970
)Excess tax benefits from stock based compensation


846



184



Other






(113
)


Net cash used in financing activities of discontinued operations






(100
)


(1,274
)Net cash used in financing activities


(46,220
)


(63,555
)


(33,359
)Net increase (decrease) in cash and cash equivalents


21,955



(53,853
)


35,617Cash and Cash Equivalents  Beginning of year


42,986



96,839



61,222Cash and Cash Equivalents  End of year

$
64,941


$
42,986


$
96,839    50




---



##### Table of Contents



BOWNE &
    CO., INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
    AND COMPREHENSIVE INCOME (LOSS)
  Years Ended December 31, 2007, 2006 and 2005AccumulatedOtherAdditional





ComprehensiveCommon


Paid-In


Retained


Income


TreasuryStock


Capital


Earnings


(Loss)


Stock


Total(In thousands, except per share information)Balance at December 31, 2004

$
414


$
79,550


$
348,440


$
35,847


$
(85,620
)

$
378,631Comprehensive income (loss):Net loss










(604
)










(604
)Foreign currency translation adjustment














(14,573
)






(14,573
)Pension liability adjustment (net of tax)














(1,338
)






(1,338
)Comprehensive loss






















(16,515
)Reclassification adjustment for the recognized foreign currency
    translation gains relating to the sale of subsidiary














(22,617
)






(22,617
)Cash dividends ($0.22 per share)










(7,386
)










(7,386
)Purchase of treasury stock


















(33,970
)


(33,970
)Non-cash stock compensation and deferred stock conversions






272











899



1,171Deferred stock compensation






(994
)










994



Exercise of stock options


5



5,818











4,045



9,868Tax benefit of stock option exercises






1,075















1,075Balance at December 31, 2005

$
419


$
85,721


$
340,450


$
(2,681
)

$
(113,652
)

$
310,257Comprehensive income (loss):Net loss










(1,768
)










(1,768
)Foreign currency translation adjustment














737







737Pension liability adjustment (net of tax)














34







34Comprehensive loss






















(997
)Cash dividends ($0.22 per share)










(6,680
)










(6,680
)Purchase of treasury stock


















(68,558
)


(68,558
)Non-cash stock compensation and deferred stock conversions






1,923











1,252



3,175Reclassification of deferred stock compensation






1,349











(1,349
)


Exercise of stock options


6



8,121











4,406



12,533Tax benefit of stock option exercises






999















999Adjustment to initially adopt the provisions of SFAS 158
    (net of tax)














(15,494
)






(15,494
)Balance at December 31, 2006

$
425


$
98,113


$
332,002


$
(17,404
)

$
(177,901
)

$
235,235Adjustment to initially adopt the provisions of FIN 48










590











590Comprehensive income (loss):Net income










27,104











27,104Foreign currency translation adjustment














7,579







7,579Pension liability adjustment (net of tax)














11,223







11,223Unrealized loss on marketable securities (net of tax)














(4
)






(4
)Comprehensive income






















45,902Cash dividends ($0.22 per share)










(6,083
)










(6,083
)Purchase of treasury stock


















(51,749
)


(51,749
)Non-cash stock compensation and deferred stock conversions






12,106











958



13,064Exercise of stock options


7



8,766











2,941



11,714Tax benefit of stock option exercises






1,806















1,806Balance at December 31, 2007

$
432


$
120,791


$
353,613


$
1,394


$
(225,751
)

$
250,479    51




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES
 (In thousands, except share and per share information and
    where noted)
  Note 1 
    Summary
    of Significant Accounting Policies    Principles
    of Consolidation
    Revenue
    Recognition
    No. 06-3
    Inventories
  work-in-process (first-in,
 52




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  Property,
    Plant and Equipment
    December 31,2007


2006Land and buildings

$
61,776


$
62,282Machinery and plant equipment


84,992



78,086Computer equipment and software


126,042



123,327Furniture, fixtures and vehicles


36,921



35,845Leasehold improvements


60,489



64,820370,220



364,360Less accumulated depreciation


(248,372
)


(231,576
)Net

$
121,848


$
132,784     Buildings

10 - 40 yearsMachinery and plant equipment

3 -
    121/2
    yearsComputer equipment and software

2 - 5 yearsFurniture and fixtures

3 -
    121/2
    yearsLeasehold improvements

Shorter of useful life or term of lease   No. 98-1, (SOP 98-1). SOP 98-1
  SOP No. 98-1
  Intangible
    Assets
    Customer relationships

6 - 10 yearsCovenants not-to-compete

3 years  53




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  Stock-Based
    Compensation
    2007


2006


2005Stock options from continuing operations

Grants


Grants


GrantsExpected dividend yield


1.3
%


1.5
%


1.5
%Expected stock price volatility


32.4
%


34.9
%


33.9
%Risk-free interest rate


4.3
%


4.7
%


4.3
%Expected life of options


4 years



5 years



5 yearsWeighted-average fair value

$
4.92


$
5.23


$
4.20        54




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Income (loss) from continuing operations:As reported

$
150Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related pro forma tax effects


(1,199
)Pro forma loss from continuing operations

$
(1,049
)As reported income per share from continuing operations:Basic

$
0.00Diluted

$
0.00Pro forma loss per share from continuing operations:Basic

$
(0.03
)Diluted

$
(0.03
)Loss from discontinued operations:As reported

$
(754
)Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related pro forma tax effects


Pro forma loss from discontinued operations

$
(754
)As reported loss per share from discontinued operations:Basic

$
(0.02
)Diluted

$
(0.02
)Pro forma loss per share from discontinued operations:Basic

$
(0.02
)Diluted

$
(0.02
)Net loss:As reported

$
(604
)Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related pro forma tax effects


(1,199
)Pro forma net loss

$
(1,803
)As reported loss per share:Basic

$
(0.02
)Diluted

$
(0.02
)Pro forma loss per share:Basic

$
(0.05
)Diluted

$
(0.05
)   Income
    Taxes
   55




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  Earnings
    (Loss) Per Share
  No. 04-08, (EITF 04-08) EITF 04-08
    Years Ended December 31,2007


2006


2005Average shares outstanding  basic


28,160,707



31,143,466



34,250,598Potential dilutive effect of stock-based awards


822,333



307,355



448,501Potential dilutive effect of shares issued to settle the
    convertible subordinated debentures


4,058,445







Average shares outstanding  diluted


33,041,485



31,450,821



34,699,099   Foreign
    Currency Translation
    Fair
    Value of Financial Instruments
   56




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  Use of
    Estimates
    Comprehensive
    Income
    Segment
    Information
    Recent
    Accounting Pronouncements
    FIN 48-1, FIN 48-1). FIN 48-1 FIN 48-1
   57




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  No. FAS 157-2 FAS 157-2), FAS 157-2.
          Note 2 
    Acquisitions  Alliance
    Data Mail Services
    No. 95-03, (EITF 95-03),
 58




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
      Accounts receivable, net

$
6,688Inventory


3,155Other current assets


6,675Total current assets


16,518Property, plant and equipment


146Deferred tax assets


963Other noncurrent assets


330Total assets acquired


17,957Accrued expenses and other current obligations


(5,610
)Total liabilities assumed


(5,610
)Net assets acquired

$
12,347     Years Ended December 31,2007


2006Revenue

$
885,295


$
871,486Income from continuing operations


22,161



8,407Net income (loss)


21,938



(5,597
)Earnings per share from continuing operations:Basic

$
0.79


$
0.27Diluted

$
0.74


$
0.27Total earnings (loss) per share:Basic

$
0.78


$
(0.18
)Diluted

$
0.73


$
(0.18
)     St
    Ives Financial
   59




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    EITF 95-03,
      Cash and cash equivalents

$
356Accounts receivable, net


2,548Inventory


539Other current assets


1,061Total current assets


4,504Property, plant and equipment


1,368Goodwill


4,177Intangible assets


6,700Other noncurrent assets


20Total assets acquired


16,769Current liabilities


(4,565
)Noncurrent liabilities


(2,260
)Total liabilities assumed


(6,825
)Net assets acquired

$
9,944   apps tm
  PLUM
    Computer Consulting, Inc.
   60




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Vestcom
    International, Inc.s Marketing and Business Communications
    Division
      EITF 95-03,
  Note 3 
    Discontinued
    Operations and Assets Held for Sale  ® ®
     61




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
      18-month
      Years Ended December 31,2006


2005Revenue

$
15,201


$
27,279Loss from discontinued operations before income taxes

$
(20,149
)

$
(1,629
)     Form 10-K
 62




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Year EndedDecember 31,2005Revenue

$
163,350Loss from discontinued operations before income taxes

$
(10,749
)   Form 10-K
  Note 4 
    Cash and
    Cash Equivalents    Note 5 
    Marketable
    Securities    A-AAA,
  Note 6 
    Inventories    December 31,2007


2006Raw materials

$
11,641


$
6,185Work-in-process


17,148



19,406$
28,789


$
25,591  63




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  Note 7 
    Goodwill
    and Intangible Assets      MarketingFinancial


& BusinessCommunications


Communications


TotalBalance at January 1, 2006

$
16,686


$
2,615


$
19,301Goodwill associated with the MBC acquisition






11,132



11,132Goodwill associated with the PLUM acquisition


2,784







2,784Foreign currency translation adjustment


(86
)






(86
)Balance at December 31, 2006

$
19,384


$
13,747


$
33,131Goodwill associated with the St Ives Financial acquisition


4,177







4,177Goodwill impairment related to JFS business


(2,100
)






(2,100
)Foreign currency translation adjustment


627







627Balance at December 31, 2007

$
22,088


$
13,747


$
35,835     December 31, 2007


December 31, 2006Accumulated





AccumulatedGross Amount


Amortization


Gross Amount


AmortizationAmortizable intangible assets:Customer relationships

$
11,794


$
2,190


$
5,021


$
548Covenants not-to-compete


25



13



25



4$
11,819


$
2,203


$
5,046


$
552      64




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    2008

$
1,6842009

$
1,6842010

$
1,6772011

$
1,6752012

$
1,675   Note 8 
    Gain on
    Sale of Assets    Note 9 
    Accrued
    Restructuring, Integration and Asset Impairment
    Charges         65




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
          SeveranceandPersonnel-


Occupancy





AssetRelated Costs


Costs


Other


Impairments


TotalFinancial Communications

$
2,656


$
3,324


$
1,103


$
6,372


$
13,455Marketing & Business Communications


2,015



224



860







3,099Corporate/Other


15







216



216



447Total

$
4,686


$
3,548


$
2,179


$
6,588


$
17,001     66




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  SeveranceandPersonnel-


OccupancyRelated Costs


Costs


Other


TotalBalance at January 1, 2005

$
1,109


$
4,881


$
27


$
6,0172005 expenses


5,675



1,212







6,887Paid in 2005


(2,761
)


(1,321
)


(27
)


(4,109
)Balance at December 31, 2005


4,023



4,772







8,7952006 expenses


3,660



2,805



5,144



11,609Paid in 2006


(6,032
)


(5,372
)


(4,934
)


(16,338
)Balance at December 31, 2006


1,651



2,205



210



4,0662007 expenses


4,686



3,548



2,179



10,413Paid in 2007


(4,655
)


(4,424
)


(2,389
)


(11,468
)Balance at December 31, 2007

$
1,682


$
1,329


$



$
3,011     EITF 95-03,
  Note 10 
    Income
    Taxes    Years Ended December 31,2007


2006


2005Current:U.S. federal

$
(2,557
)

$
4,364


$
6,697Foreign


5,535



4,863



584State and local


1,386



2,058



480$
4,364


$
11,285


$
7,761Deferred:U.S. federal

$
3,492


$
(988
)

$
(4,454
)Foreign


1,044



126



2,034State and local


102



377



(840
)$
4,638


$
(485
)

$
(3,260
)  67




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Years Ended December 31,2007


2006


2005Continuing operations

$
9,002


$
10,800


$
4,501Discontinued operations


7



(6,145
)


9,873$
9,009


$
4,655


$
14,374     Years Ended December 31,2007


2006


2005Domestic (United States)

$
21,962


$
8,929


$
39International


14,367



14,107



4,612Total income from continuing operations before taxes

$
36,329


$
23,036


$
4,651     Years Ended December 31,2007


2006


2005Continuing operations

$
4,277


$
12,396


$
9,097Discontinued operations


211



1,082



1,528$
4,488


$
13,478


$
10,625     Years Ended December 31,2007


2006


2005Income tax expense based upon U.S. statutory tax rate

$
12,715


$
8,063


$
1,628State income tax expense (benefit), net of federal benefit


968



1,006



(265
)Effect of foreign taxes


(1,115
)


(1,195
)


776Permanent differences, primarily non-deductible meals and
    entertainment expenses


3,168



2,276



1,904Refunds


(3,595
)






Recognition of previously unrecognized tax benefits


(2,341
)






Other, net


(798
)


650



458Total income tax expense attributable to continuing operations

$
9,002


$
10,800


$
4,501      68




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
        2007


2006Deferred tax assets:Operating loss carry-forwards

$
4,838


$
4,642Deferred compensation and benefits


23,205



28,750Allowance for doubtful accounts


1,111



1,916Property, plant and equipment






1,919Tax credits


966



4,180Accrued expenses


8,295



9,712Other, net


3,641



3,322Gross deferred tax assets


42,056



54,441Deferred tax liabilities:Lease obligations






(2,306
)Property, plant and equipment


(1,408
)


Intangible assets


(2,748
)


(725
)Gross deferred tax liabilities


(4,156
)


(3,031
)Deferred tax asset valuation allowance


(1,946
)


(2,221
)Net deferred tax asset

$
35,954


$
49,189     2007


2006Current deferred tax asset included in other current assets

$
11,048


$
11,759Noncurrent deferred tax asset


24,906



37,430$
35,954


$
49,189  69




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
          UnrecognizedTax BenefitsBalance at January 1, 2007

$
10,369Additions based on tax positions related to the current year


346Additions for tax positions of prior years


668Reductions for tax positions of prior years


(2,257
)Settlements


(570
)Statutes of limitation expirations


(58
)8,498Interest, penalties and net state tax benefit


785Balance at December 31, 2007

$
9,283     FIN 48-1, FIN 48-1). FIN 48-1 FIN 48-1
 70




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
      Note 11 
    Debt    December 31,2007


2006Convertible subordinated debentures

$
75,000


$
75,000Other


2,758



2,509$
77,758


$
77,509        71




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
        Note 12 
    Employee
    Benefit Plans  Pension
    Plans
  10-year
   72




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Pension Plan


SERPYears Ended


Years EndedDecember 31,


December 31,Change in Benefit Obligation

2007


2006


2007


2006Projected benefit obligation at beginning of year

$
137,295


$
127,044


$
17,433


$
23,048Service cost


5,897



6,628



344



310Interest cost


7,846



7,533



1,123



1,150Amendments


(23,100
)


724



677



(350
)Actuarial loss


1,623



2,898



4,913



1,352Benefits paid


(6,648
)


(7,532
)


(3,201
)


(8,077
)Projected benefit obligation at end of year

$
122,913


$
137,295


$
21,289


$
17,433   Pension Plan


SERPYears Ended


Years EndedDecember 31,


December 31,Change in Plan Assets

2007


2006


2007


2006Fair value of plan assets at beginning of year

$
114,164


$
96,955


$



$
Actual return on plan assets


9,254



14,541







Employer contributions prior to measurement date


3,300



10,200



3,201



8,077Benefits paid


(6,648
)


(7,532
)


(3,201
)


(8,077
)Fair value of plan assets at end of year


120,070



114,164







Unfunded status

$
(2,843
)

$
(23,131
)

$
(21,289
)

$
(17,433
)     Pension Plan


SERPYears Ended


Years EndedDecember 31,


December 31,2007


2006


2007


2006Accumulated benefit obligation

$
122,913


$
111,704


$
16,896


$
15,274     Pension Plan


SERPYears Ended


Years EndedDecember 31,


December 31,2007


2006


2007


2006Current liabilities

$



$



$
(2,372
)

$
(3,200
)Noncurrent liabilities


(2,843
)


(23,131
)


(18,917
)


(14,233
)Net amount recognized

$
(2,843
)

$
(23,131
)

$
(21,289
)

$
(17,433
)    73




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    PensionPlan


SERPNet actuarial loss

$
19,387


$
12,600Prior service (credit) cost


(19,922
)


2,399Unrecognized net initial asset


(595
)


Total (before tax effects)

$
(1,130
)

$
14,999Total net of tax effects

$
(686
)

$
9,107       Pension Plan


SERPDecember 31,


December 31,2007


2006


2007


2006Discount rate


6.00
%


6.00
%


6.00
%


6.00
%Projected future salary increase


4.00
%


4.00
%


4.00
%


4.00
%     Pension Plan


SERPYears Ended December 31,


Years Ended December 31,2007


2006


2005


2007


2006


2005Service cost

$
5,897


$
6,628


$
6,361


$
344


$
310


$
418Interest cost


7,846



7,533



6,792



1,123



1,150



1,429Expected return on plan assets


(9,570
)


(8,158
)


(7,315
)










Recognized net initial (asset) obligation


(321
)


(321
)


(321
)


31



101



101Recognized prior service (credit) cost


(126
)


318



318



1,468



1,541



1,541Recognized actuarial loss


368



1,482



508



1,029



884



873Net periodic benefit cost


4,094



7,482



6,343



3,995



3,986



4,362Union plans


312



337



358











Other retirement plans


1,943



1,675



1,458











Total cost

$
6,349


$
9,494


$
8,159


$
3,995


$
3,986


$
4,362  74




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Pension Plan


SERPYears Ended


Years EndedDecember 31,


December 31,2007


2006


2007


2006Net actuarial loss (gain)

$
1,939


$
(3,486
)

$
4,913


$
1,352Recognized actuarial gain


(368
)


(1,482
)


(1,029
)


(884
)Prior service (credit) cost


(23,100
)


724



677



(350
)Recognized prior service credit (cost)


126



(318
)


(1,468
)


(1,541
)Recognized net initial asset (obligation)


321







(31
)


Total recognized in other comprehensive income (before tax
    effects)

$
(21,082
)

$
(4,562
)

$
3,062


$
(1,423
)Total recognized in other comprehensive income, net of tax
    effects

$
(12,967
)

$
(2,783
)

$
1,883


$
(868
)Total recognized in net benefit cost and other comprehensive
    income (before tax effects)

$
(16,988
)

$
2,920


$
7,057


$
2,563Total recognized in net benefit cost and other comprehensive
    income, net of tax effects

$
(10,448
)

$
1,781


$
4,340


$
1,563         PensionPlan


SERPLoss recognition

$
624


$
1,219Prior service (credit) cost recognition


(1,649
)


917Net initial (asset) recognition


(321
)


  75




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Pension Plan


SERPYears Ended


Years EndedDecember 31,


December 31,2007


2006


2005


2007


2006


2005Discount rate


6.25
%


5.75
%


6.00
%


6.25
%


5.75
%


6.00
%Expected asset return


8.50
%


8.50
%


8.50
%


N/A



N/A



N/ASalary scale


4.00
%


4.00
%


4.00
%


4.00
%


4.00
%


4.00
%Average future working lifetime (in years)


11.38



11.57



11.62



8.59



7.00



6.75           December 31,Asset Category

2007


2006


2005Equity securities


79
%


80
%


80
%Fixed income securities


18



19



19Other


3



1



1Total


100
%


100
%


100
%      76




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  and/or 5-year and/or 5-year
        Asset Classes

RangesEquities


65-85
%Domestic


55-75
%Large Cap Core


28-38
%Large Cap Value


15-25
%Small Cap


10-20
%International


5-15
%Fixed Income


15-35
%Alternatives


5-15
%    77




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    
    Option trading is limited to writing covered options.
    Letter stock.
    Bowne & Co., Inc. common stock.
    Commodities.
    Direct real estate or mortgages.
    Security loans.
    Risky or volatile derivative securities as commonly defined by
    the financial industry.
    Manager portfolios may hold no greater than two times (2X) their
    respective index sector weights, up to a maximum of 30%.
    No position greater than two (2) weeks average
    trading volume.
    No more than 4.99% of the outstanding shares of any company may
    be owned in the portfolio.
    Unless authorized in specific manager guidelines, managers may
    not sell securities short, buy securities on margin, buy private
    or direct placements or restricted securities, borrow money or
    pledge assets, nor buy or sell commodities or annuities.      Year

Pension Plan


SERP2008

$
4,599


$
2,4422009


3,498



1,9442010


6,314



9302011


4,397



1,4412012


7,907



2,9342013 - 2017


40,410



12,672    78




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  Other
    Postretirement Benefit Plan
          December 31,2007


2006Current liabilities

$
(62
)

$
Noncurrent liabilities


(1,316
)


(2,355
)Net amount

$
(1,378
)

$
(2,355
)       Years Ended December 31,2007


2006


2005Service cost

$
131


$
140


$
108Interest cost


135



129



110Net periodic cost of defined benefit plans

$
266


$
269


$
218  79




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    December 31,Change in Benefit Obligation

2007


2006Projected benefit obligation at beginning of year

$
2,742


$
2,532Service cost


131



140Interest cost


135



129Prior service cost


(1,706
)


Actuarial gain


(232
)


Benefits paid


(57
)


(49
)Foreign currency


365



(10
)Projected benefit obligation at end of period

$
1,378


$
2,742         Year2008

$
602009


672010


722011


752012


812013 - 2017


548   Defined
    Contribution Plans
   80




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Health
    Plan
    Note 13 
    Deferred
    Employee Compensation    December 31,2007


2006Pension and other retirement costs, long-term

$
4,159


$
25,486Supplemental retirement, long-term


19,192



14,387Deferred compensation and other long-term benefits


13,457



12,636$
36,808


$
52,509   Note 14 
    Other
    Income (Expense)    Years Ended December 31,2007


2006


2005Interest income

$
2,775


$
3,673


$
2,112Foreign currency losses


(1,526
)


(27
)


(196
)Other expense


(122
)


(306
)


(379
)Total other income

$
1,127


$
3,340


$
1,537   Note 15 
    Commitments
    and Contingencies  Lease
    commitments
     81




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    2008

$
34,4102009


27,8462010


20,9522011


17,2582012


13,9212013 - 2026


93,153Total

$
207,540         Purchase
    Commitments
    Contingencies
    Note 16 
    Stockholders
    Equity     82




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
          Note 17 
    Stock Option Plans
     83




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
          Number of Securities


Weighted-Averageto be Issued Upon


Exercise Price ofExercise/Conversion


Outstanding OptionsPlans approved by shareholders:Stock options


1,873,605


$
14.30Restricted stock and deferred stock units


231,079



(a
)Restricted stock units(1)


938,000



(a
)Plan not approved by shareholders:Stock options


488,625


$
12.27Deferred stock units


444,123



(a
)Total


3,975,432     (1)
    
    The restricted stock units to be issued upon conversion reflect
    the accelerated payout of the awards at the 200% performance
    level, which is expected to occur in March 2008.(a)
    
    Not applicable      Plans approved by shareholders


1,121,435Plan not approved by shareholders


184,754Total


1,306,189  84




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
      Weighted-Average


AggregateNumber of


Exercise


IntrinsicOptions


Price


ValueOutstanding as of January 1, 2007


3,285,920


$
13.95Granted


47,275


$
16.77Exercised


(856,665
)

$
13.67Cancellations/Forfeitures


(114,300
)

$
18.55Outstanding as of December 31, 2007


2,362,230


$
13.88


$
8,953Exercisable as of December 31, 2007


1,852,955


$
13.48


$
7,798       Options Outstanding


Options ExercisableWeighted-


Weighted-





Weighted-Average


Average





AverageRange of

Number


Remaining


Exercise


Number


ExerciseExercise Prices

Outstanding


Life


Price


Exercisable


Price$  8.84 - $10.31


195,614



3 years


$
9.36



195,614


$
9.36$10.32 - $11.99


163,782



3 years


$
10.61



163,782


$
10.61$12.00 - $14.00


948,244



3 years


$
13.28



911,244


$
13.26$14.01 - $15.77


909,670



6 years


$
15.23



462,961


$
15.14$15.78 - $22.50


144,920



3 years


$
19.15



119,354


$
19.462,362,230



4 years


$
13.88



1,852,955


$
13.48  85




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Weighted-AverageNumber of


Grant-DateOptions


Fair ValueNonvested stock options as of January 1, 2007


682,500


$
4.97Granted


47,275


$
4.92Vested


(214,500
)

$
4.92Forfeited


(6,000
)

$
4.61Nonvested stock options as of December 31, 2007


509,275


$
4.99     Deferred
    Stock Awards
        Restricted
    Stock Awards
   86




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Weighted-AverageNumber of


Grant-DateShares


Fair ValueNonvested restricted stock as of January 1, 2007


44,669


$
15.09Granted






Vested


(20,669
)

$
14.94Forfeited






Nonvested restricted stock as of December 31, 2007


24,000


$
15.22     Long-Term
    Equity Incentive Plan and Restricted Stock Units
       87




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Weighted-AverageNumber of


Grant-DateShares


Fair ValueNonvested RSUs as of January 1, 2007


432,500


$
13.86Granted


44,000


$
17.05Vested





$
Forfeited


(7,500
)

$
13.77Nonvested RSUs as of December 31, 2007


469,000


$
14.16     Note 18 
    Comprehensive Income (Loss)
    December 31,2007


2006


2005Foreign currency translation adjustment

$
9,863


$
2,284


$
1,547Pension liability adjustment (net of tax effect)


(8,445
)


(19,668
)


(4,208
)Unrealized losses on marketable securities (net of tax effect)


(24
)


(20
)


(20
)$
1,394


$
(17,404
)

$
(2,681
)         Note 19 
    Segment Information
   88




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Financial Communications
  Marketing & Business Communications
 89




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
    Years Ended December 31,2007


2006


2005Revenue from external customers:Financial Communications

$
729,125


$
705,941


$
626,861Marketing & Business Communications


121,492



127,793



41,806$
850,617


$
833,734


$
668,667Segment profit (loss):Financial Communications

$
120,296


$
102,401


$
88,024Marketing & Business Communications


190



(640
)


(7,082
)Corporate/Other (see detail below)


(49,881
)


(47,317
)


(45,491
)70,605



54,444



35,451Depreciation


(27,205
)


(25,397
)


(25,646
)Amortization


(1,638
)


(534
)


Interest


(5,433
)


(5,477
)


(5,154
)Income (loss) from continuing operations before income taxes

$
36,329


$
23,036


$
4,651Corporate/Other (by type):Shared corporate expenses and other costs not directly
    attributable to the segments

$
(31,979
)

$
(34,079
)

$
(28,728
)Non-cash LTEIP expense


(11,238
)


(1,461
)


Other income (expense), net


1,127



3,340



1,537Gain on sale of equity investment


9,210







Loss on sale of marketable securities










(7,890
)Restructuring charges, integration costs and asset impairment
    charges


(17,001
)


(14,159
)


(10,410
)Purchased in-process research and development






(958
)


$
(49,881
)

$
(47,317
)

$
(45,491
)  90




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  Years Ended December 31,2007


2006Assets:Financial Communications

$
311,258


$
327,057Marketing & Business Communications


88,701



69,317Corporate/Other


109,458



119,869$
509,417


$
516,243   Years Ended December 31,2007


2006


2005Capital spending:Financial Communications

$
15,357


$
17,559


$
36,071Marketing & Business Communications


4,700



10,133



3,031Corporate/Other


699



976



622$
20,756


$
28,668


$
39,724     Years Ended December 31,2007


2006


2005Revenue by source:United States

$
664,464


$
651,158


$
538,559Canada


82,736



89,349



68,004Other international, primarily Europe and Asia


103,417



93,227



62,104$
850,617


$
833,734


$
668,667   Years Ended December 31,2007


2006Long-lived assets, net:United States

$
157,320


$
165,507Canada


10,580



10,516Other international, primarily Europe and Asia


6,389



4,499$
174,289


$
180,522  91




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  BOWNE &
    CO., INC. AND SUBSIDIARIES  (Continued)
 (In
    thousands, except share and per share information and where
    noted)
  Note 20 
    Subsequent event
  2
 92




---



##### Table of Contents



BOWNE &
    CO., INC. AND SUBSIDIARIES
  SUMMARY
    OF QUARTERLY DATA
 (In
    thousands, except share and per share information,
    unaudited)
    First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter


Full YearYear Ended December 31, 2007Revenue

$
212,022


$
262,198


$
181,678


$
194,719


$
850,617Gross margin


82,124



100,282



63,081



73,900



319,387Income (loss) from continuing operations before income taxes


11,437



23,100



(586
)


2,378



36,329Income tax (expense) benefit


(1,253
)


(7,267
)


1,534



(2,016
)


(9,002
)Income from continuing operations


10,184



15,833



948



362



27,327Income (loss) from discontinued operations, net of tax


495



(136
)


(144
)


(438
)


(223
)Net income (loss)

$
10,679


$
15,697


$
804


$
(76
)

$
27,104Earnings per share from continuing operations:Basic

$
0.35


$
0.56


$
0.03


$
0.01


$
0.97Diluted

$
0.32


$
0.49


$
0.03


$
0.01


$
0.90Earnings (loss) per share from discontinued operations:Basic

$
0.02


$
(0.00
)

$
(0.00
)

$
(0.01
)

$
(0.01
)Diluted

$
0.02


$
(0.00
)

$
(0.00
)

$
(0.01
)

$
(0.01
)Total earnings per share:Basic

$
0.37


$
0.56


$
0.03


$
0.00


$
0.96Diluted

$
0.34


$
0.49


$
0.03


$
0.00


$
0.89Average shares outstanding:Basic


28,757



28,384



28,309



27,166



28,161Diluted


33,253



33,171



28,933



28,050



33,041  93




---



##### Table of Contents



BOWNE &
    CO., INC. AND SUBSIDIARIES
  SUMMARY
    OF QUARTERLY DATA  (Continued)
 (In
    thousands, except share and per share information,
    unaudited)
  First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter


Full YearYear Ended December 31, 2006Revenue

$
206,169


$
260,652


$
175,551


$
191,362


$
833,734Gross margin


70,707



93,722



59,476



66,327



290,232Income (loss) from continuing operations before income taxes


3,563



20,188



(460
)


(255
)


23,036Income tax (expense) benefit


(2,052
)


(10,026
)


848



430



(10,800
)Income from continuing operations


1,511



10,162



388



175



12,236Income (loss) from discontinued operations, net of tax


26



(3,929
)


(12,160
)


2,059



(14,004
)Net income (loss)

$
1,537


$
6,233


$
(11,772
)

$
2,234


$
(1,768
)Earnings per share from continuing operations:Basic

$
0.05


$
0.32


$
0.01


$
0.01


$
0.39Diluted

$
0.05


$
0.30


$
0.01


$
0.01


$
0.39Earnings (loss) per share from discontinued operations:Basic

$
0.00


$
(0.12
)

$
(0.40
)

$
0.07


$
(0.45
)Diluted

$
0.00


$
(0.11
)

$
(0.39
)

$
0.06


$
(0.45
)Total earnings (loss) per share:Basic

$
0.05


$
0.20


$
(0.39
)

$
0.08


$
(0.06
)Diluted

$
0.05


$
0.19


$
(0.38
)

$
0.07


$
(0.06
)Average shares outstanding:Basic


32,523



32,191



30,375



29,487



31,143Diluted


32,904



36,553



30,596



29,954



31,451     Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure Controls and
    Procedures.
 94




---



##### Table of Contents



Rule 13a-15(e) 15d-15(e) 10-K
  Managements Annual Report on Internal Control
    Over Financial Reporting. Rules 13a-15(f).
      Form 10-K,
  Changes in Internal Control Over Financial
    Reporting.
 95




---



##### Table of Contents



Report of Independent Registered Public Accounting
    Firm.
  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control -
    Integrated Framework
        Internal Control  Integrated
    Framework
        96




---



##### Table of Contents



Item 9B.
    Other
    Information   97




---



##### Table of Contents



PART III  Item 10.
    Directors
    and Executive Officers of the Registrant          Rule 10A-3
  (www.bowne.com)
  (www.bowne.com)
  Form 10-Qs Form 10-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   98




---



##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accounting Fees and Services   99




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Documents filed as part of this Report:
    Page NumberIn This ReportReport of Independent Registered Public Accounting Firm


47Consolidated Statements of Operations  Years Ended
    December 31, 2007, 2006 and 2005


48Consolidated Balance Sheets as of December 31, 2007 and 2006


49Consolidated Statements of Cash Flows  Years Ended
    December 31, 2007, 2006 and 2005


50Consolidated Statements of Stockholders Equity and
    Comprehensive Income (Loss)  Years 
         Ended December 31, 2007, 2006
    and 2005


51Notes to Consolidated Financial Statements


52(2) Financial Statement Schedule  Years Ended
    December 31, 2007, 2006 and 2005Schedule II  Valuation and Qualifying Accounts


S-1All other schedules are omitted because they are not applicable     ExhibitNumber



Description3.1



Certificate of Incorporation (incorporated by reference to
    Exhibit 3 to the Companys current report on
    Form 8-K
    dated June 23, 1998)3.2



Certificate of Designations (incorporated by reference to
    Exhibit 2 to the Companys current report on
    Form 8-K
    dated June 23, 1998)3.5



By-Laws (incorporated by reference to Exhibit 4 to the
    Companys current report on
    Form 8-K
    dated June 23, 1998)4.1



Rights Agreement dated June 19, 1998 (incorporated by
    reference to Exhibit 5 to the Companys current report
    on
    Form 8-K
    dated June 23, 1998)4.2



Indenture, dated as of September 24, 2003 among
    Bowne & Co., Inc. and the Bank of New York as Trustee
    (incorporated by reference to Exhibit 4.2 to
    Bowne & Co., Inc.s Registration Statement on
    Form S-3
    filed on October 17, 2003, File
    No. 333-109810)10.1



Amended and Restated 1981 Stock Option Plan (incorporated by
    reference to the Companys definitive Proxy Statement dated
    January 30, 1985)10.2



Amendment to 1981 Stock Option Plan (incorporated by reference
    to the Companys Post-Effective Amendment No. 1 on
    Form S-8
    relating to the Companys Stock Option Plan dated
    April 16, 1987)10.3



Amendment to 1981 Stock Option Plan (incorporated by reference
    to the Companys Post-Effective Amendment No. 2 on
    Form S-8
    relating to the Companys Stock Option Plan dated
    October 19, 1988)10.4



1992 Stock Option Plan (incorporated by reference to
    Exhibit 10.4 to the Companys annual report on
    Form 10-K
    for the year ended December 31, 2002)10.5



1997 Stock Incentive Plan (incorporated by reference to
    Exhibit A to the Companys definitive Proxy Statement
    dated February 6, 1997)10.6



1999 Incentive Compensation Plan as amended and restated
    May 25, 2006 (incorporated by reference to Exhibit A
    to the Companys definitive proxy statement dated
    April 11, 2006)10.7



Supplemental Executive Retirement Plan effective as of
    January 1, 1999 (incorporated by reference to
    Exhibit 10.7 to the Companys annual report on
    Form 10-K
    for the year ended December 31, 1999; amendments to the
    Plan are further described in Item 9B of the Companys
    annual report on
    Form 10-K
    for the year ended December 31, 2004) 100




---



##### Table of Contents



ExhibitNumber



Description10.8



Form of Termination Protection Agreement for selected key
    Employees providing for a possible change in ownership or
    control of the Company (incorporated by reference to
    Exhibit 10.8 to the Companys annual report on
    Form 10-K
    for the year ended October 31, 1995)10.9



Revised Termination Protection Agreement as of August 23,
    1995 (incorporated by reference to Exhibit 10.9 to the
    Companys annual report on
    Form 10-K
    for the year ended December 31, 2000)10.10



Letter agreement dated January 29, 1996 between the Company
    and Robert M. Johnson relating to restricted stock and certain
    compensation and benefits matters (incorporated by reference to
    Exhibit 10.10 to the Companys annual report on
    Form 10-K/A
    for the year ended December 31, 1997)10.11



Amendment dated September 1, 1998 to the letter agreement
    in Exhibit 10.9 above (incorporated by reference to
    Exhibit 10.13 in the Companys annual report on
    Form 10-K
    for the year ended December 31, 1998)10.12



2000 Stock Incentive Plan (incorporated by reference to
    Exhibit 10.12 in the Companys annual report on
    Form 10-K
    for the year ended December 31, 2003)10.13



Long-Term Performance Plan (incorporated by reference to
    Exhibit 10.13 in the Companys annual report on
    Form 10-K
    for the year ended December 31, 2003)10.14



Deferred Award Plan (incorporated by reference to
    Exhibit 10.14 in the Companys annual report on
    Form 10-K
    for the year ended December 31, 2003)10.15



Amended and Restated Stock Plan for Directors (incorporated by
    reference to Exhibit 10.15 in the Companys annual
    report on
    Form 10-K
    for the year ended December 31, 2004)10.16



Base Salaries and Other Compensation of Named Executive Officers
    of the Registrant (incorporated by reference to
    Exhibit 10.16 in the Companys annual report on
    Form 10-K
    for the year ended December 31, 2004)10.17



Credit Agreement, dated as of May 11, 2005, related to
    $150 million revolving credit facility (incorporated by
    reference to Exhibit 99.1 in the Companys current
    report on
    Form 8-K
    dated May 13, 200510.18



Form of Stock Option Agreement under the 1999 Incentive
    Compensation Plan (incorporated by reference to
    Exhibit 10.26 in the Companys quarterly report on
    Form 10-Q
    for the period ended September 30, 2004)10.19



Form of Restricted Stock Agreement under the 1999 Incentive
    Compensation Plan (incorporated by reference to
    Exhibit 10.27 in the Companys quarterly report on
    Form 10-Q
    for the period ended September 30, 2004)10.20



Lease agreement between New Water Street Corp. and
    Bowne & Co. Inc. dated February 25, 2005 relating
    to the lease of office space at 55 Water Street, New York, New
    York (incorporated by reference to Exhibit 99.1 to the
    Companys current report on
    Form 8-K
    dated February 28, 2005)10.21



Lease agreement between The London Wall Limited Partnership and
    Bowne & Co. Inc. dated February 8, 2006 relating
    to the lease of office space at 1 London Wall, London
    (incorporated by reference to Exhibit 99.2 to the
    Companys current report on
    Form 8-K
    dated February 9, 2006)10.22



Form of Long-Term Equity Incentive Award Agreement under the
    1999 Amended and Restated Incentive Compensation Plan
    (incorporated by reference to Exhibit 10.22 to the
    Companys annual report on
    Form 10-K
    for the year ended December 31, 2006)10.23



Amendment to Long-Term Equity Incentive Award Agreement under
    the 1999 Amended and Restated Incentive Compensation Plan
    (incorporated by reference to Exhibit 10.23 to the
    Companys annual report on
    Form 10-K
    for the year ended December 31, 2006)10.24



Consulting agreement dated December 14, 2006, between the
    Company and Carl J. Crosetto (incorporated by reference to
    Exhibit 10.24 to the Companys annual report on
    Form 10-K
    for the year ended December 31, 2006)21



Subsidiaries of the Company23.1



Consent of KPMG LLP, Independent Registered Public Accounting
    Firm24



Powers of Attorney 101




---



##### Table of Contents



ExhibitNumber



Description31.1



Certification pursuant to section 302 of the Sarbanes-Oxley
    Act of 2002, signed by David J. Shea, Chairman of the Board and
    Chief Executive Officer31.2



Certification pursuant to section 302 of the Sarbanes-Oxley
    Act of 2002, signed by John J. Walker, Senior Vice President and
    Chief Financial Officer32.1



Certification pursuant to 18 U.S.C. Section 1350 as
    adopted pursuant to section 906 of the Sarbanes-Oxley Act
    of 2002, signed by David J. Shea, Chairman of the Board and
    Chief Executive Officer32.2



Certification pursuant to 18 U.S.C. Section 1350 as
    adopted pursuant to section 906 of the Sarbanes-Oxley Act
    of 2002, signed by John J. Walker, Senior Vice President and
    Chief Financial Officer  102




---



##### Table of Contents



SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of
    the Securities Exchange Act of 1934, the Registrant has duly
    caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
  Bowne & Co.,
    Inc.
  By:
    /s/  David
    J. Shea   Chairman of the Board and
 Chief Executive Officer
 (Principal Executive Officer)
  Dated:
    March 12, 2008
    Signature

Title

Date/s/  David
    J. Shea(David
    J. Shea)

Chairman of the Board and
    Chief Executive Officer

March 12, 2008/s/  John
    J. Walker(John
    J. Walker)

Senior Vice President and
    Chief Financial Officer
    (Principal Financial Officer)

March 12, 2008/s/  Richard
    Bambach, Jr.(Richard
    Bambach, Jr.)

Vice President and
    Corporate Controller
    (Principal Accounting Officer)

March 12, 2008/s/  Carl
    J. Crosetto(Carl
    J. Crosetto)

Director

March 12, 2008/s/  Douglas
    B. Fox(Douglas
    B. Fox)

Director

March 12, 2008/s/  Marcia
    J. Hooper(Marcia
    J. Hooper)

Director

March 12, 2008/s/  Philip
    E. Kucera(Philip
    E. Kucera)

Director

March 12, 2008/s/  Stephen
    V. Murphy(Stephen
    V. Murphy)

Director

March 12, 2008/s/  Gloria
    M. Portela(Gloria
    M. Portela)

Director

March 12, 2008 103




---



##### Table of Contents



Signature

Title

Date/s/  H.
    Marshall Schwarz(H.
    Marshall Schwarz)

Director

March 12, 2008/s/  Lisa
    A. Stanley(Lisa
    A. Stanley)

Director

March 12, 2008/s/  Vincent
    Tese(Vincent
    Tese)

Director

March 12, 2008/s/  Richard
    R. West(Richard
    R. West)

Director

March 12, 2008  104




---



##### Table of Contents



BOWNE &
    CO., INC. AND SUBSIDIARIES
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
  Column A

Column B


Column C


Column D


Column EAdditionsBalance at


Charged to





Balance atBeginning of


Costs and


(Deductions)/


End ofDescription

Period


Expenses


Additions


Period(In thousands)Allowance for doubtful accounts and sales credits:Year Ended December 31, 2007

$
6,431


$
13,239


$
(15,368
)

$
4,302Year Ended December 31, 2006

$
8,569


$
10,864


$
(13,002
)

$
6,431Year Ended December 31, 2005

$
8,705


$
16,288


$
(16,424
)

$
8,569  S-1