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 March 31, 2017



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	422.3		$	563.4		$	101.4		$	(88.5	)	$	998.6
Cost of sales	303.1			483.6			81.7			(87.3		)	781.1
Selling, general and administrative expenses	60.2			29.1			7.9			(1.2		)	96.0
Depreciation and amortization	27.5			25.9			5.3			—			58.7
Restructuring, impairment and transaction-related charges	11.4			(3.0		)	0.8			—			9.2
Total operating expenses	402.2			535.6			95.7			(88.5		)	945.0
Operating income (loss)	$	20.1		$	27.8		$	5.7		$	—		$	53.6
Interest expense (income)	17.3			—			0.9			—			18.2
Loss (gain) on debt extinguishment	2.6			—			—			—			2.6
Earnings (loss) before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities	0.2			27.8			4.8			—			32.8
Income tax expense (benefit)	(2.8		)	13.8			(4.3		)	—			6.7
Earnings (loss) before equity in (earnings) loss of consolidated and unconsolidated entities	3.0			14.0			9.1			—			26.1
Equity in (earnings) loss of consolidated entities	(22.4		)	(0.5		)	—			22.9			—
Equity in (earnings) loss of unconsolidated entity	—			—			0.7			—			0.7
Net earnings (loss)	$	25.4		$	14.5		$	8.4		$	(22.9	)	$	25.4

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended March 31, 2017



	Quad/Graphics, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
Net earnings (loss)	$	25.4	$	14.5	$	8.4	$	(22.9	)	$	25.4
Other comprehensive income (loss), net of tax	8.1		0.4		7.4		(7.8		)	8.1
Total comprehensive income (loss)	$	33.5	$	14.9	$	15.8	$	(30.7	)	$	33.5

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2016



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	438.5		$	587.9		$	105.0		$	(88.9	)	$	1,042.5
Cost of sales	308.9			501.2			82.3			(88.9		)	803.5
Selling, general and administrative expenses	69.3			38.7			11.0			—			119.0
Depreciation and amortization	45.4			25.2			7.5			—			78.1
Restructuring, impairment and transaction-related charges	11.4			16.9			0.6			—			28.9
Total operating expenses	435.0			582.0			101.4			(88.9		)	1,029.5
Operating income (loss)	$	3.5		$	5.9		$	3.6		$	—		$	13.0
Interest expense (income)	20.8			(1.1		)	1.0			—			20.7
Loss (gain) on debt extinguishment	(14.1		)	—			—			—			(14.1		)
Earnings (loss) before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities	(3.2		)	7.0			2.6			—			6.4
Income tax expense (benefit)	8.1			(6.3		)	(0.1		)	—			1.7
Earnings (loss) before equity in (earnings) loss of consolidated and unconsolidated entities	(11.3		)	13.3			2.7			—			4.7
Equity in (earnings) loss of consolidated entities	(15.1		)	(1.5		)	—			16.6			—
Equity in (earnings) loss of unconsolidated entity	—			—			0.9			—			0.9
Net earnings (loss)	$	3.8		$	14.8		$	1.8		$	(16.6	)	$	3.8

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended March 31, 2016



	Quad/Graphics, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Total
Net earnings (loss)	$	3.8	$	14.8		$	1.8	$	(16.6	)	$	3.8
Other comprehensive income (loss), net of tax	8.4		(1.1		)	6.6		(5.5		)	8.4
Total comprehensive income (loss)	$	12.2	$	13.7		$	8.4	$	(22.1	)	$	12.2

Condensed Consolidating Balance Sheet

As of March 31, 2017



	Quad/Graphics, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
Cash and cash equivalents	$	0.2	$	0.8	$	5.5	$	—		$	6.5
Receivables, less allowances for doubtful accounts	382.3		39.1		83.7		—			505.1
Intercompany receivables	—		729.8		—		(729.8		)	—
Inventories	98.1		128.5		42.4		—			269.0
Other current assets	29.3		13.3		12.1		—			54.7
Total current assets	509.9		911.5		143.7		(729.8		)	835.3

Property, plant and equipment—net	757.9		569.3		160.0		—			1,487.2
Investment in consolidated entities	1,320.5		9.7		—		(1,330.2		)	—
Intangible assets—net	10.7		33.1		11.6		—			55.4
Intercompany loan receivable	106.5		—		—		(106.5		)	—
Other long-term assets	48.7		10.0		34.3		—			93.0
Total assets	$	2,754.2	$	1,533.6	$	349.6	$	(2,166.5	)	$	2,470.9

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	172.2	$	74.6	$	57.6	$	—		$	304.4
Intercompany accounts payable	710.4		—		19.4		(729.8		)	—
Short-term debt and current portion of long-term debt and capital lease obligations	67.8		2.5		8.5		—			78.8
Other current liabilities	193.9		71.4		26.3		—			291.6
Total current liabilities	1,144.3		148.5		111.8		(729.8		)	674.8

Long-term debt and capital lease obligations	1,009.3		2.2		12.5		—			1,024.0
Intercompany loan payable	—		40.0		66.5		(106.5		)	—
Other long-term liabilities	139.9		157.3		14.2		—			311.4
Total liabilities	2,293.5		348.0		205.0		(836.3		)	2,010.2

Total shareholders' equity	460.7		1,185.6		144.6		(1,330.2		)	460.7
Total liabilities and shareholders' equity	$	2,754.2	$	1,533.6	$	349.6	$	(2,166.5	)	$	2,470.9

Condensed Consolidating Balance Sheet

As of December 31, 2016



	Quad/Graphics, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
Cash and cash equivalents	$	0.3	$	1.9	$	6.8	$	—		$	9.0
Receivables, less allowances for doubtful accounts	439.7		37.7		86.2		—			563.6
Intercompany receivables	—		720.5		—		(720.5		)	—
Inventories	102.2		115.9		47.3		—			265.4
Other current assets	40.6		15.7		8.3		—			64.6
Total current assets	582.8		891.7		148.6		(720.5		)	902.6

Property, plant and equipment—net	777.3		577.9		164.7		—			1,519.9
Investment in consolidated entities	1,288.9		61.8		—		(1,350.7		)	—
Intangible assets—net	12.0		20.3		27.4		—			59.7
Intercompany loan receivable	104.2		—		—		(104.2		)	—
Other long-term assets	43.5		10.1		34.3		—			87.9
Total assets	$	2,808.7	$	1,561.8	$	375.0	$	(2,175.4	)	$	2,570.1

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	159.3	$	98.5	$	65.7	$	—		$	323.5
Intercompany accounts payable	711.2		—		9.3		(720.5		)	—
Short-term debt and current portion of long-term debt and capital lease obligations	79.5		2.9		9.7		—			92.1
Other current liabilities	253.9		76.2		28.9		—			359.0
Total current liabilities	1,203.9		177.6		113.6		(720.5		)	774.6

Long-term debt and capital lease obligations	1,022.0		2.4		14.3		—			1,038.7
Intercompany loan payable	—		39.9		64.3		(104.2		)	—
Other long-term liabilities	141.3		150.0		24.0		—			315.3
Total liabilities	2,367.2		369.9		216.2		(824.7		)	2,128.6

Total shareholders' equity	441.5		1,191.9		158.8		(1,350.7		)	441.5
Total liabilities and shareholders' equity	$	2,808.7	$	1,561.8	$	375.0	$	(2,175.4	)	$	2,570.1

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2017



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
OPERATING ACTIVITIES
Net cash from operating activities	$	63.9		$	(1.6	)	$	1.0		$	—		$	63.3

INVESTING ACTIVITIES
Purchases of property, plant and equipment	(4.3		)	(16.6		)	(2.5		)	—			(23.4		)
Intercompany investing activities	(5.3		)	3.2			0.4			1.7			—
Other investing activities	(3.9		)	18.9			0.1			—			15.1
Net cash from (used in) investing activities	(13.5		)	5.5			(2.0		)	1.7			(8.3		)

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	375.0			—			—			—			375.0
Payments of long-term debt and capital lease obligations	(383.3		)	(0.8		)	(2.0		)	—			(386.1		)
Borrowings on revolving credit facilities	65.1			—			1.9			—			67.0
Payments on revolving credit facilities	(80.5		)	—			(3.3		)	—			(83.8		)
Payment of cash dividends	(16.8		)	—			—			—			(16.8		)
Intercompany financing activities	(0.8		)	—			2.5			(1.7		)	—
Other financing activities	(9.2		)	(4.1		)	—			—			(13.3		)
Net cash from (used in) financing activities	(50.5		)	(4.9		)	(0.9		)	(1.7		)	(58.0		)

Effect of exchange rates on cash and cash equivalents	—			(0.1		)	0.6			—			0.5
Net increase (decrease) in cash and cash equivalents	(0.1		)	(1.1		)	(1.3		)	—			(2.5		)
Cash and cash equivalents at beginning of period	0.3			1.9			6.8			—			9.0
Cash and cash equivalents at end of period	$	0.2		$	0.8		$	5.5		$	—		$	6.5

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2016



	Quad/Graphics, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
OPERATING ACTIVITIES
Net cash from operating activities	$	78.6		$	25.2		$	8.8		$	—		$	112.6

INVESTING ACTIVITIES
Purchases of property, plant and equipment	(12.4		)	(6.9		)	(6.9		)	—			(26.2		)
Intercompany investing activities	14.5			(17.4		)	(0.1		)	3.0			—
Other investing activities	0.6			0.4			1.5			—			2.5
Net cash from (used in) investing activities	2.7			(23.9		)	(5.5		)	3.0			(23.7		)

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	—			—			18.4			—			18.4
Payments of long-term debt and capital lease obligations	(115.8		)	(0.9		)	—			—			(116.7		)
Borrowings on revolving credit facilities	273.8			—			19.8			—			293.6
Payments on revolving credit facilities	(238.5		)	—			(20.0		)	—			(258.5		)
Purchases of treasury stock	(8.8		)	—			—			—			(8.8		)
Payment of cash dividends	(15.4		)	—			—			—			(15.4		)
Intercompany financing activities	25.5			0.1			(22.6		)	(3.0		)	—
Other financing activities	(2.1		)	—			—			—			(2.1		)
Net cash from (used in) financing activities	(81.3		)	(0.8		)	(4.4		)	(3.0		)	(89.5		)

Effect of exchange rates on cash and cash equivalents	—			—			0.1			—			0.1
Net increase (decrease) in cash and cash equivalents	—			0.5			(1.0		)	—			(0.5		)
Cash and cash equivalents at beginning of period	2.3			2.8			5.7			—			10.8
Cash and cash equivalents at end of period	$	2.3		$	3.3		$	4.7		$	—		$	10.3