Separate Financial Information of Subsidiary Guarantors of Indebtedness

On April 28, 2014, Quad/Graphics completed an offering of the Senior Unsecured Notes. Each of the Company's existing and future domestic subsidiaries that is a borrower or guarantees indebtedness under the Company's Senior Secured Credit Facility or that guarantees certain of the Company's other indebtedness or indebtedness of the Company's restricted subsidiaries (other than intercompany indebtedness) fully and unconditionally guarantee or, in the case of future subsidiaries, will guarantee, on a joint and several basis, the Senior Unsecured Notes (the "Guarantor Subsidiaries"). All of the current Guarantor Subsidiaries are 100% owned by the Company. Guarantor Subsidiaries will be automatically released from these guarantees upon the occurrence of certain events, including the following:


•	the designation of any of the Guarantor Subsidiaries as an unrestricted subsidiary;


•	the release or discharge of any guarantee or indebtedness that resulted in the creation of the guarantee of the Senior Unsecured Notes by any of the Guarantor Subsidiaries; or


•	the sale or disposition, including the sale of substantially all the assets, of any of the Guarantor Subsidiaries.

The following condensed consolidating financial information reflects the summarized financial information of Quad/Graphics, the Company's Guarantor Subsidiaries on a combined basis and the Company's non-guarantor subsidiaries on a combined basis.

Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, 2016



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	420.5		$	584.7		$	119.5		$	(92.4	)	$	1,032.3
Cost of sales	315.0			502.1			96.3			(92.4		)	821.0
Selling, general and administrative expenses	69.5			30.6			12.9			—			113.0
Depreciation and amortization	44.3			24.6			8.7			—			77.6
Restructuring, impairment and transaction-related charges	7.5			(1.6		)	1.5			—			7.4
Total operating expenses	436.3			555.7			119.4			(92.4		)	1,019.0
Operating income (loss)	$	(15.8	)	$	29.0		$	0.1		$	—		$	13.3
Interest expense (income)	18.9			(1.3		)	1.0			—			18.6
Earnings (loss) before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities	(34.7		)	30.3			(0.9		)	—			(5.3		)
Income tax expense (benefit)	(2.3		)	3.0			0.3			—			1.0
Earnings (loss) before equity in (earnings) loss of consolidated and unconsolidated entities	(32.4		)	27.3			(1.2		)	—			(6.3		)
Equity in (earnings) loss of consolidated entities	(24.7		)	(1.8		)	—			26.5			—
Equity in (earnings) loss of unconsolidated entities	—			—			1.4			—			1.4
Net earnings (loss)	$	(7.7	)	$	29.1		$	(2.6	)	$	(26.5	)	$	(7.7	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended June 30, 2016



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net earnings (loss)	$	(7.7	)	$	29.1		$	(2.6	)	$	(26.5	)	$	(7.7	)
Other comprehensive income (loss), net of tax	(1.3		)	(0.2		)	(1.0		)	1.2			(1.3		)
Total comprehensive income (loss)	$	(9.0	)	$	28.9		$	(3.6	)	$	(25.3	)	$	(9.0	)

Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, 2015



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	398.5		$	656.2		$	104.8		$	(99.5	)	$	1,060.0
Cost of sales	305.4			563.6			88.2			(99.5		)	857.7
Selling, general and administrative expenses	63.6			36.0			10.8			—			110.4
Depreciation and amortization	44.9			30.0			8.5			—			83.4
Restructuring, impairment and transaction-related charges	1.7			7.9			24.7			—			34.3
Total operating expenses	415.6			637.5			132.2			(99.5		)	1,085.8
Operating income (loss)	$	(17.1	)	$	18.7		$	(27.4	)	$	—		$	(25.8	)
Interest expense (income)	20.8			(0.5		)	1.3			—			21.6
Earnings (loss) before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities	(37.9		)	19.2			(28.7		)	—			(47.4		)
Income tax expense (benefit)	(11.2		)	5.2			2.2			—			(3.8		)
Earnings (loss) before equity in (earnings) loss of consolidated and unconsolidated entities	(26.7		)	14.0			(30.9		)	—			(43.6		)
Equity in (earnings) loss of consolidated entities	18.4			1.2			—			(19.6		)	—
Equity in (earnings) loss of unconsolidated entities	—			—			1.5			—			1.5
Net earnings (loss)	$	(45.1	)	$	12.8		$	(32.4	)	$	19.6		$	(45.1	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended June 30, 2015



	Quad/Graphics, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net earnings (loss)	$	(45.1	)	$	12.8	$	(32.4	)	$	19.6		$	(45.1	)
Other comprehensive income (loss), net of tax	1.8			0.1		1.3			(1.4		)	1.8
Total comprehensive income (loss)	$	(43.3	)	$	12.9	$	(31.1	)	$	18.2		$	(43.3	)

Condensed Consolidating Statement of Operations

For the Six Months Ended June 30, 2016



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	859.0		$	1,172.6		$	224.5		$	(181.3	)	$	2,074.8
Cost of sales	623.9			1,003.3			178.6			(181.3		)	1,624.5
Selling, general and administrative expenses	138.8			69.3			23.9			—			232.0
Depreciation and amortization	89.7			49.8			16.2			—			155.7
Restructuring, impairment and transaction-related charges	18.9			15.3			2.1			—			36.3
Total operating expenses	871.3			1,137.7			220.8			(181.3		)	2,048.5
Operating income (loss)	$	(12.3	)	$	34.9		$	3.7		$	—		$	26.3
Interest expense (income)	39.7			(2.4		)	2.0			—			39.3
Gain on debt extinguishment	(14.1		)	—			—			—			(14.1		)
Earnings (loss) before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities	(37.9		)	37.3			1.7			—			1.1
Income tax expense (benefit)	5.8			(3.3		)	0.2			—			2.7
Earnings (loss) before equity in (earnings) loss of consolidated and unconsolidated entities	(43.7		)	40.6			1.5			—			(1.6		)
Equity in (earnings) loss of consolidated entities	(39.8		)	(3.3		)	—			43.1			—
Equity in (earnings) loss of unconsolidated entities	—			—			2.3			—			2.3
Net earnings (loss)	$	(3.9	)	$	43.9		$	(0.8	)	$	(43.1	)	$	(3.9	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Six Months Ended June 30, 2016



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net earnings (loss)	$	(3.9	)	$	43.9		$	(0.8	)	$	(43.1	)	$	(3.9	)
Other comprehensive income (loss), net of tax	7.1			(1.3		)	5.6			(4.3		)	7.1
Total comprehensive income (loss)	$	3.2		$	42.6		$	4.8		$	(47.4	)	$	3.2

Condensed Consolidating Statement of Operations

For the Six Months Ended June 30, 2015



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	850.6		$	1,297.3		$	199.7		$	(199.6	)	$	2,148.0
Cost of sales	646.2			1,118.0			168.5			(199.6		)	1,733.1
Selling, general and administrative expenses	123.0			79.1			18.0			—			220.1
Depreciation and amortization	89.7			59.5			15.5			—			164.7
Restructuring, impairment and transaction-related charges	(6.3		)	23.6			27.1			—			44.4
Goodwill impairment	—			—			23.3			—			23.3
Total operating expenses	852.6			1,280.2			252.4			(199.6		)	2,185.6
Operating income (loss)	$	(2.0	)	$	17.1		$	(52.7	)	$	—		$	(37.6	)
Interest expense (income)	42.1			(0.7		)	2.7			—			44.1
Earnings (loss) before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities	(44.1		)	17.8			(55.4		)	—			(81.7		)
Income tax expense (benefit)	(7.6		)	0.4			2.4			—			(4.8		)
Earnings (loss) before equity in (earnings) loss of consolidated and unconsolidated entities	(36.5		)	17.4			(57.8		)	—			(76.9		)
Equity in (earnings) loss of consolidated entities	43.8			2.2			—			(46.0		)	—
Equity in (earnings) loss of unconsolidated entities	—			—			3.4			—			3.4
Net earnings (loss)	$	(80.3	)	$	15.2		$	(61.2	)	$	46.0		$	(80.3	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Six Months Ended June 30, 2015



	Quad/Graphics, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations		Total
Net earnings (loss)	$	(80.3	)	$	15.2	$	(61.2	)	$	46.0	$	(80.3	)
Other comprehensive income (loss), net of tax	(23.1		)	—		(24.0		)	24.0		(23.1		)
Total comprehensive income (loss)	$	(103.4	)	$	15.2	$	(85.2	)	$	70.0	$	(103.4	)

Condensed Consolidating Balance Sheet

As of June 30, 2016



	Quad/Graphics, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
Cash and cash equivalents	$	2.6	$	1.8	$	4.3	$	—		$	8.7
Receivables, less allowances for doubtful accounts	388.2		44.2		91.9		—			524.3
Intercompany receivables	—		1,085.3		—		(1,085.3		)	—
Inventories	98.5		127.2		44.2		—			269.9
Other current assets	28.9		23.0		7.7		—			59.6
Total current assets	518.2		1,281.5		148.1		(1,085.3		)	862.5

Property, plant and equipment—net	813.4		591.4		170.2		—			1,575.0
Investment in consolidated entities	1,732.8		59.6		—		(1,792.4		)	—
Intangible assets—net	14.6		23.6		31.5		—			69.7
Intercompany loan receivable	95.9		—		—		(95.9		)	—
Other long-term assets	37.3		6.4		32.4		—			76.1
Total assets	$	3,212.2	$	1,962.5	$	382.2	$	(2,973.6	)	$	2,583.3

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	174.8	$	75.4	$	69.9	$	—		$	320.1
Intercompany accounts payable	1,084.0		—		1.3		(1,085.3		)	—
Short-term debt and current portion of long-term debt and capital lease obligations	82.8		3.4		5.0		—			91.2
Other current liabilities	220.2		74.4		28.0		—			322.6
Total current liabilities	1,561.8		153.2		104.2		(1,085.3		)	733.9

Long-term debt and capital lease obligations	1,084.1		3.7		16.9		—			1,104.7
Intercompany loan payable	—		39.3		56.6		(95.9		)	—
Other long-term liabilities	170.9		158.5		19.9		—			349.3
Total liabilities	2,816.8		354.7		197.6		(1,181.2		)	2,187.9

Total shareholders' equity	395.4		1,607.8		184.6		(1,792.4		)	395.4
Total liabilities and shareholders' equity	$	3,212.2	$	1,962.5	$	382.2	$	(2,973.6	)	$	2,583.3

Condensed Consolidating Balance Sheet

As of December 31, 2015



	Quad/Graphics, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
Cash and cash equivalents	$	2.3	$	2.8	$	5.7	$	—		$	10.8
Receivables, less allowances for doubtful accounts	507.5		53.3		87.9		—			648.7
Intercompany receivables	—		1,007.7		—		(1,007.7		)	—
Inventories	95.8		138.5		45.8		—			280.1
Other current assets	24.7		20.0		7.0		—			51.7
Total current assets	630.3		1,222.3		146.4		(1,007.7		)	991.3

Property, plant and equipment—net	849.6		652.8		173.4		—			1,675.8
Investment in consolidated entities	1,676.6		57.8		—		(1,734.4		)	—
Intangible assets—net	46.9		27.1		36.5		—			110.5
Intercompany loan receivable	125.8		—		—		(125.8		)	—
Other long-term assets	27.8		8.5		33.6		—			69.9
Total assets	$	3,357.0	$	1,968.5	$	389.9	$	(2,867.9	)	$	2,847.5

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	203.7	$	85.4	$	69.7	$	—		$	358.8
Intercompany accounts payable	997.4		—		10.3		(1,007.7		)	—
Short-term debt and current portion of long-term debt and capital lease obligations	95.6		3.5		0.6		—			99.7
Other current liabilities	223.4		94.3		31.2		—			348.9
Total current liabilities	1,520.1		183.2		111.8		(1,007.7		)	807.4

Long-term debt and capital lease obligations	1,242.5		5.3		1.8		—			1,249.6
Intercompany loan payable	—		38.8		87.0		(125.8		)	—
Other long-term liabilities	170.5		175.9		20.2		—			366.6
Total liabilities	2,933.1		403.2		220.8		(1,133.5		)	2,423.6

Total shareholders' equity	423.9		1,565.3		169.1		(1,734.4		)	423.9
Total liabilities and shareholders' equity	$	3,357.0	$	1,968.5	$	389.9	$	(2,867.9	)	$	2,847.5

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2016



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
OPERATING ACTIVITIES
Net cash from operating activities	$	138.6		$	79.7		$	1.3		$	—		$	219.6

INVESTING ACTIVITIES
Purchases of property, plant and equipment	(18.8		)	(12.3		)	(9.5		)	—			(40.6		)
Acquisition related investing activities—net of cash acquired	(0.9		)	—			—			—			(0.9		)
Intercompany investing activities	(0.8		)	(71.7		)	25.3			47.2			—
Other investing activities	(6.2		)	5.1			2.0			—			0.9
Net cash from investing activities	(26.7		)	(78.9		)	17.8			47.2			(40.6		)

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	—			—			19.7			—			19.7
Payments of long-term debt and capital lease obligations	(149.5		)	(1.7		)	—			—			(151.2		)
Borrowings on revolving credit facilities	449.3			—			39.0			—			488.3
Payments on revolving credit facilities	(460.1		)	—			(39.0		)	—			(499.1		)
Purchases of treasury stock	(8.8		)	—			—			—			(8.8		)
Payment of cash dividends	(29.5		)	—			—			—			(29.5		)
Intercompany financing activities	86.8			0.1			(39.7		)	(47.2		)	—
Other financing activities	0.2			(0.2		)	—			—			—
Net cash from financing activities	(111.6		)	(1.8		)	(20.0		)	(47.2		)	(180.6		)

Effect of exchange rates on cash and cash equivalents	—			—			(0.5		)	—			(0.5		)
Net increase (decrease) in cash and cash equivalents	0.3			(1.0		)	(1.4		)	—			(2.1		)
Cash and cash equivalents at beginning of period	2.3			2.8			5.7			—			10.8
Cash and cash equivalents at end of period	$	2.6		$	1.8		$	4.3		$	—		$	8.7

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2015



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
OPERATING ACTIVITIES
Net cash from operating activities	$	78.4		$	31.7		$	13.3		$	—		$	123.4

INVESTING ACTIVITIES
Purchases of property, plant and equipment	(29.8		)	(46.6		)	(6.9		)	—			(83.3		)
Acquisition related investing activities—net of cash acquired	—			(1.7		)	(78.2		)	—			(79.9		)
Intercompany investing activities	(85.0		)	(92.3		)	(0.2		)	177.5			—
Other investing activities	(1.1		)	6.3			0.1			—			5.3
Net cash from investing activities	(115.9		)	(134.3		)	(85.2		)	177.5			(157.9		)

FINANCING ACTIVITIES
Payments of long-term debt and capital lease obligations	(45.4		)	(1.6		)	—			—			(47.0		)
Borrowings on revolving credit facilities	764.8			—			28.4			—			793.2
Payments on revolving credit facilities	(651.4		)	—			(27.1		)	—			(678.5		)
Payment of cash dividends	(30.1		)	—			—			—			(30.1		)
Intercompany financing activities	(1.0		)	103.0			75.5			(177.5		)	—
Other financing activities	2.2			(0.1		)	—			—			2.1
Net cash from financing activities	39.1			101.3			76.8			(177.5		)	39.7

Effect of exchange rates on cash and cash equivalents	—			—			(1.2		)	—			(1.2		)
Net increase (decrease) in cash and cash equivalents	1.6			(1.3		)	3.7			—			4.0
Cash and cash equivalents at beginning of period	1.9			5.6			2.1			—			9.6
Cash and cash equivalents at end of period	$	3.5		$	4.3		$	5.8		$	—		$	13.6