Quad/Graphics Reports Second Quarter and Year-to-Date June 2013 Results

  Quad/Graphics Reports Second Quarter and Year-to-Date June 2013 Results

Company Generates $86Million in Recurring Free Cash Flow in the Quarter and
Reaffirms 2013 Annual Guidance

Second Quarter Highlights:

  *Generated net sales of $1.1billion.
  *Achieved Adjusted EBITDA of $111million.
  *Produced Recurring Free Cash Flow of $86million.
  *Continued disciplined integration of Vertis Holdings, Inc. ("Vertis").
  *Reaffirms 2013 annual guidance of $4.8billion to $5.0billion in revenue,
    $580million to $610million in Adjusted EBITDA, and Recurring Free Cash
    Flow in excess of $360million.

Business Wire

SUSSEX, Wis. -- August 6, 2013

Quad/Graphics, Inc. (NYSE: QUAD) (“Quad/Graphics” or the “Company”) today
reported results for its second quarter ending June 30, 2013. The reported
results include Vertis from the day of acquisition on January 16, 2013. Prior
year financial results do not include the acquisition of Vertis. For full
financial results, including reconciliations of non-GAAP financial measures,
please see the accompanying information.

“Our second quarter results were consistent with our expectations and we
remain on track to achieve our 2013 objectives,” said Joel Quadracci,
Quad/Graphics Chairman, President & CEO. “We continue to be pleased with the
Vertis acquisition and remain focused on integrating operations and driving
future cost-savings, and improving efficiency and productivity in our
platform. As always, we are committed to our priorities to maintain a strong
and flexible balance sheet; invest in our business, which includes the pursuit
of profitable investment opportunities; and create long-term value for our
shareholders and clients.”

Net sales for the second quarter 2013 increased to $1.1billion versus
$934million for the same period in 2012 due to the Vertis acquisition. Second
quarter 2013 Adjusted EBITDA was $111million as compared to $112million for
the same period in 2012. Recurring Free Cash Flow was $86million versus
$60million for the same period in 2012.

For the first six months of 2013, net sales were $2.2billion versus
$1.9billion for the same period in 2012, representing a 16% increase due to
the Vertis acquisition. Year-to-date Adjusted EBITDA was $225million versus
$238million in 2012. Recurring Free Cash Flow was $206million for the first
six months of 2013 compared to $167million for the same period in 2012,
continuing a track record of solid cash flow generation.

“Our Adjusted EBITDA and Adjusted EBITDA margin of 10.0% were in line with our
expectations and reflect Vertis' lower margin profile and increased
seasonality, and ongoing industry pricing and volume pressures,” said John
Fowler, Quad/Graphics Executive Vice President and Chief Financial Officer.
“We are pleased with our Recurring Free Cash Flow of $86 million, which was
generated during a quarter that normally reflects lower volumes due to
industry seasonality. Recurring Free Cash Flow is the foundation of our strong
balance sheet and provides us with the flexibility and confidence to invest in
our business and pursue value-added opportunities as they arise to ensure
strong future cash flow.”

Quad/Graphics' quarterly dividend of $0.30 per share will be payable on
September20, 2013, to shareholders of record as of September9, 2013.

Quarterly Conference Call

Quad/Graphics (NYSE: QUAD) will hold a conference call at 10 a.m. ET / 9 a.m.
CT on Wednesday, August 7, to discuss second quarter 2013 results. To access
the conference call, it is recommended that you listen via computer at:
http://us.meeting-stream.com/quadgraphics_080713.

If for any reason you are unable to stream, you can listen to the audio via
the telephone by calling:

  *Toll-Free: (877) 217-9946 (US/Canada)
  *Toll: (702) 696-4824 (International)
  *Conference ID: 13701303

The replay will be available for 30 days following the conference call. To
access the replay via phone, please call (855) 859-2056 or (404) 537-3406 and
enter the Conference ID number 13701303. To access the replay via the
internet, please use the following link:
http://us.meeting-stream.com/quadgraphics_080713. Registration is required for
replay.

Forward-Looking Statements

This press release contains certain “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements regarding, among other things,
our current expectations about the Company's future results, financial
condition, goals, strategies, revenue, earnings, free cash flow, margins,
prospects and/or outlook and are indicated by words or phrases such as
“anticipate,” “estimate,” “expect,” “project,” “believe” and similar words or
phrases. These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results to be
materially different from those expressed in or implied by such
forward-looking statements. Forward-looking statements are based largely on
the Company's expectations and judgments and are subject to a number of risks
and uncertainties, many of which are unforeseeable and beyond our control.

The factors that could cause actual results to materially differ include,
among others: the impact of significant overcapacity in the highly competitive
commercial printing industry, which creates downward pricing pressure and
fluctuating demand for printing services; the inability of the Company to
reduce costs and improve operating efficiency rapidly enough to meet market
conditions; the impact of electronic media and similar technological changes
including digital substitution by consumers; the impact of changing future
economic conditions; the failure to renew long-term contracts with clients on
favorable terms or at all; the failure of clients to perform under long-term
contracts due to financial or other reasons or due to client consolidation;
the failure to successfully identify, manage, complete and integrate
acquisitions and investments, including the integration of the operations of
Vertis Holdings, Inc.; the impact of changes in postal rates, service levels
or regulations; the impact of fluctuations in costs and the availability of
raw materials; the impact of increased business complexity as a result of the
Company's entry into additional markets; the impact of regulatory matters and
legislative developments or changes in laws, including changes in privacy and
environmental laws; the ability of the Company to make the significant capital
expenditures needed to remain technologically and economically competitive;
the impact on Quad/Graphics class A common shareholders of a limited active
market for Quad/Graphics common stock and the inability to independently elect
directors or control decisions due to the class B common stock voting rights;
and the other risk factors identified in the Company's most recent Annual
Report on Form 10-K, as such may be amended or supplemented by subsequent
Quarterly Reports on Form 10-Q or other reports filed with theSecurities and
Exchange Commission.

Except as required by the federal securities laws, the Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

About Quad/Graphics

Quad/Graphics (NYSE: QUAD), a leading global printer and media channel
integrator, is redefining print in today's multichannel media world by helping
marketers and publishers capitalize on print's ability to complement and
connect with other media channels. With consultative ideas, worldwide
capabilities, leading-edge technology and single-source simplicity,
Quad/Graphics has the resources and knowledge to help its clients maximize the
revenue they derive from their marketing spend through channel integration,
and minimize their total cost of production and distribution through a fully
integrated national distribution network. The Company provides a diverse range
of print solutions, media solutions and logistics services from multiple
locations throughout North America, Latin America and Europe.



QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2013 and 2012
(in millions, except per share data)
(UNAUDITED)
                                                
                                                   Three Months Ended June 30,
                                                   2013            2012
Net sales                                          $  1,110.8        $ 934.2
                                                                     
Cost of sales                                      893.8             740.8
Selling, general and administrative expenses       105.1             80.6
Depreciation and amortization                      87.9              84.7
Restructuring, impairment and                      29.2             37.7    
transaction-related charges
Total operating expenses                           1,116.0           943.8
                                                                     
Operating loss                                     $  (5.2     )     $ (9.6  )
                                                                     
Interest expense                                   21.3             20.7    
                                                                     
Loss before income taxes and equity in loss of     (26.5       )     (30.3   )
unconsolidated entities
                                                                     
Income tax benefit                                 (0.6        )     (10.3   )
                                                                     
Loss before equity in loss of unconsolidated       (25.9       )     (20.0   )
entities
                                                                     
Equity in loss of unconsolidated entities          (1.7        )     (0.8    )
                                                                     
Net loss                                           $  (27.6    )     $ (20.8 )
                                                                     
Net loss attributable to noncontrolling            0.4              —       
interests
                                                                     
Net loss attributable to Quad/Graphics common      $  (27.2    )     $ (20.8 )
shareholders
                                                                     
Loss per share attributable to Quad/Graphics
common shareholders:
Basic and diluted                                  $  (0.59    )     $ (0.44 )
                                                                     
Weighted average number of common shares
outstanding:
Basic and diluted                                  46.9             46.8    
                                                                             


QUAD/GRAPHICS,INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2013 and 2012
(in millions, except per share data)
(UNAUDITED)
                                                
                                                   Six Months Ended June 30,
                                                   2013          2012
Net sales                                          $ 2,240.3       $ 1,923.8
                                                                   
Cost of sales                                      1,803.6         1,513.7
Selling, general and administrative expenses       211.0           172.6
Depreciation and amortization                      176.7           169.3
Restructuring, impairment and                      55.1           75.9      
transaction-related charges
Total operating expenses                           2,246.4         1,931.5
                                                                   
Operating loss from continuing operations          $ (6.1    )     $ (7.7    )
                                                                   
Interest expense                                   43.2           42.1      
                                                                   
Loss from continuing operations before income
taxes and equity in earnings (loss) of             (49.3     )     (49.8     )
unconsolidated entities
                                                                   
Income tax benefit                                 (9.1      )     (44.1     )
                                                                   
Loss from continuing operations before equity      (40.2     )     (5.7      )
in earnings (loss) of unconsolidated entities
                                                                   
Equity in earnings (loss) of unconsolidated        (1.5      )     0.3       
entities
                                                                   
Net loss from continuing operations                $ (41.7   )     $ (5.4    )
                                                                   
Loss from discontinued operations, net of tax      —               (3.2      )
(1)
Gain on disposal of discontinued operations,       —              35.3      
net of tax
                                                                   
Net earnings (loss)                                $ (41.7   )     $ 26.7
                                                                   
Net (earnings) loss attributable to                0.5            (0.1      )
noncontrolling interests
                                                                   
Net earnings (loss) attributable to                $ (41.2   )     $ 26.6    
Quad/Graphics common shareholders
                                                                   
Earnings (loss) per share attributable to
Quad/Graphics common shareholders:
Basic and diluted:
Continuing operations                              $ (0.89   )     $ (0.12   )
Discontinued operations                            —              0.69      
Earnings (loss) per share attributable to          $ (0.89   )     $ 0.57    
Quad/Graphics common shareholders
                                                                   
Weighted average number of common shares
outstanding:
Basic and diluted                                  46.9           46.8      

______________________________

        Includes the results of the Canadian operations prior to the March 1,
(1)   2012 sale. Net loss from continuing operations and its components
        exclude the Canadian operations.



QUAD/GRAPHICS,INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2013 and December 31, 2012
(in millions)
(UNAUDITED)
                                                             
                                                  June 30,        December 31,
                                                  2013            2012
ASSETS
Cash and cash equivalents                         $ 11.7          $  16.9
Receivables, less allowances for doubtful         601.1           585.1
accounts
Inventories                                       302.8           242.9
Prepaid expenses and other current assets         49.4            74.6
Deferred income taxes                             77.9            55.7
Short-term restricted cash                        7.5            14.8       
Total current assets                              1,050.4        990.0      
                                                                  
Property, plant and equipment—net                 1,974.4         1,926.4
Goodwill                                          766.4           768.6
Other intangible assets—net                       220.1           229.9
Long-term restricted cash                         48.7            45.7
Equity method investments in unconsolidated       60.9            72.0
entities
Other long-term assets                            66.0           66.3       
Total assets                                      $ 4,186.9      $  4,098.9 
                                                                  
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable                                  $ 380.1         $  285.8
Amounts owing in satisfaction of bankruptcy       2.5             9.3
claims
Accrued liabilities                               333.4           334.0
Short-term debt and current portion of            136.7           113.3
long-term debt
Current portion of capital lease obligations      10.7           10.4       
Total current liabilities                         863.4          752.8      
                                                                  
Long-term debt                                    1,309.0         1,211.7
Unsecured notes to be issued                      18.3            23.8
Capital lease obligations                         12.3            15.3
Deferred income taxes                             376.3           363.9
Other long-term liabilities                       454.7          495.7      
Total liabilities                                 3,034.0         2,863.2
                                                                  
Quad/Graphics common stock and other equity
Preferred stock                                   —               —
Common stock                                      1.4             1.4
Additional paid-in capital                        977.9           985.6
Treasury stock, at cost                           (260.6    )     (279.3     )
Retained earnings                                 515.9           588.1
Accumulated other comprehensive loss              (81.5     )     (60.4      )
                                                                  
Quad/Graphics common stock and other equity       1,153.1         1,235.4
                                                                  
Noncontrolling interests                          (0.2      )     0.3        
                                                                  
Total common stock and other equity and           1,152.9        1,235.7    
noncontrolling interests
                                                                  
Total liabilities and shareholders' equity        $ 4,186.9      $  4,098.9 
                                                                             


QUAD/GRAPHICS,INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2013 and 2012
(in millions)
(UNAUDITED)
                                                  
                                                     Six Months Ended June 30,
                                                     2013           2012
OPERATING ACTIVITIES
Net earnings (loss)                                  $  (41.7  )      $ 26.7
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation and amortization                        176.7            169.3
Impairment charges                                   9.7              14.1
Deferred income taxes                                (10.0     )      (25.5  )
Gain on disposal of discontinued operations, net     —                (35.3  )
of tax
Other non-cash adjustments to net earnings           18.4             9.0
(loss)
Changes in operating assets and liabilities—net      63.8            12.2   
of acquisitions
                                                                      
Net Cash Provided by Operating Activities            216.9           170.5  
                                                                      
INVESTING ACTIVITIES
Purchases of property, plant and equipment           (69.7     )      (54.2  )
Cost investment in unconsolidated entities           (2.5      )      (18.1  )
Proceeds from the sale of property, plant and        6.2              10.0
equipment
Transfers from restricted cash                       4.3              11.4
Deposit refunded related to business exchange        —                50.0
transaction
Purchase price payments on business exchange         —                (4.2   )
transaction
Acquisition of Vertis—net of cash acquired           (235.4    )      —
Acquisition of other businesses—net of cash          (1.5      )      (6.6   )
acquired
                                                                      
Net Cash Used in Investing Activities                (298.6    )      (11.7  )
                                                                      
FINANCING ACTIVITIES
Payments of long-term debt                           (44.0     )      (35.9  )
Payments of capital lease obligations                (4.8      )      (15.9  )
Borrowings on revolving credit facilities            805.1            65.1
Payments on revolving credit facilities              (645.7    )      (142.6 )
Bankruptcy claim payments on unsecured notes to      (4.3      )      (11.1  )
be issued
Proceeds from issuance of common stock               1.7              —
Payment of cash dividends                            (28.1     )      (23.4  )
                                                                      
Net Cash Provided by (Used in) Financing             79.9            (163.8 )
Activities
                                                                      
Effect of exchange rates on cash and cash            (3.4      )      (3.0   )
equivalents
                                                                      
Net Decrease in Cash and Cash Equivalents            (5.2      )      (8.0   )
                                                                      
Cash and Cash Equivalents at Beginning of Period     16.9            25.6   
                                                                      
Cash and Cash Equivalents at End of Period           $  11.7         $ 17.6 
                                                                             

The condensed consolidated statements of cash flows include the cash flows of
the Canadian operations prior to the March1, 2012 sale.



QUAD/GRAPHICS,INC.
SEGMENT FINANCIAL INFORMATION
For the Three and Six Months Ended June 30, 2013 and 2012
(in millions)
(UNAUDITED)
                                                   
                                                           Restructuring,
                                                           Impairment and
                                         Operating         Transaction-Related
                         Net Sales       Income/(Loss)     Charges
Three months ended
June 30, 2013
United States
Print and Related        $ 1,005.9       $    25.9         $        14.8
Services
International            104.9          (7.7       )      3.9
Total operating          1,110.8         18.2              18.7
segments
Corporate                —              (23.4      )      10.5
Total                    $ 1,110.8      $    (5.2  )      $        29.2
                                                           
Three months ended
June 30, 2012
United States
Print and Related        $ 808.6         $    22.7         $        18.1
Services
International            125.6          (9.8       )      7.6
Total operating          934.2           12.9              25.7
segments
Corporate                —              (22.5      )      12.0
Total                    $ 934.2        $    (9.6  )      $        37.7
                                                           
Six months ended
June 30, 2013
United States
Print and Related        $ 2,015.1       $    48.0         $        30.5
Services
International            225.2          (7.2       )      5.0
Total operating          2,240.3         40.8              35.5
segments
Corporate                —              (46.9      )      19.6
Total                    $ 2,240.3      $    (6.1  )      $        55.1
                                                           
Six months ended
June 30, 2012
United States
Print and Related        $ 1,671.9       $    56.4         $        32.4
Services
International            251.9          (18.0      )      18.1
Total operating          1,923.8         38.4              50.5
segments
Corporate                —              (46.1      )      25.4
Total                    $ 1,923.8      $    (7.7  )      $        75.9
                                                                    

Results from the Canadian operations sold on March1, 2012 are excluded from
the segment financial information presented above.

Restructuring, impairment and transaction-related charges are included in
Operating Income/(Loss) above.



QUAD/GRAPHICS,INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin
For the Three Months Ended June 30, 2013 and 2012
(in millions)
(UNAUDITED)
                                               
                                                   Three Months Ended June 30,
                                                   2013            2012
Net loss attributable to Quad/Graphics             $  (27.2  )       $ (20.8 )
common shareholders
                                                                     
Interest expense                                   21.3              20.7
Income tax benefit                                 (0.6      )       (10.3   )
Depreciation and amortization                      87.9             84.7    
                                                                     
EBITDA (Non-GAAP)                                  $  81.4           $ 74.3
EBITDA Margin (Non-GAAP)                           7.3       %       8.0     %
                                                                     
Restructuring, impairment and                      29.2             37.7    
transaction-related charges (1)
                                                                     
Adjusted EBITDA (Non-GAAP)                         $  110.6         $ 112.0 
Adjusted EBITDA Margin (Non-GAAP)                  10.0      %       12.0    %

______________________________

        Operating results for the three months ended June 30, 2013 and 2012
(1)   were affected by the following restructuring, impairment and
        transaction-related charges:

                                               
                                                   Three Months Ended June 30,
                                                   2013             2012
Employee termination charges (a)                   $   4.3            $  10.2
Impairment charges (b)                             6.0                5.7
Transaction-related charges (c)                    0.2                0.8
Integration costs (d)                              9.7                11.2
Other restructuring charges, net (e)               9.0               9.8
Restructuring, impairment and                      $   29.2          $  37.7
transaction-related charges

______________________________

            Employee termination charges were related to workforce reductions
  (a)   through facility consolidations and involuntary separation
            programs.
            Impairment charges were for certain buildings and equipment no
    (b)     longer being utilized in production as a result of facility
            consolidations.
    (c)     Transaction-related charges consisted of professional service fees
            related to business acquisition and divestiture activities.
            Integration costs were primarily related to preparing existing
    (d)     facilities to meet new production requirements resulting from work
            transferring from closed plants, as well as other costs related to
            the integration of the acquired companies.
            Other restructuring charges, net, were primarily from costs to
    (e)     maintain and exit closed facilities, as well as lease exit
            charges.
            

In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this earnings announcement also
contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin,
Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow and Adjusted
Diluted Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they are
important measures by which Quad/Graphics assesses the profitability and
liquidity of its business. These measures should not be considered
alternatives to net earnings (loss) as a measure of operating performance or
to cash flows provided by operating activities as a measure of liquidity.



QUAD/GRAPHICS,INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin
For the Six Months Ended June 30, 2013 and 2012
(in millions)
(UNAUDITED)
                                                 
                                                     Six Months Ended June 30,
                                                     2013          2012
Net earnings (loss) attributable to                  $  (41.2  )     $ 26.6
Quad/Graphics common shareholders
                                                                     
Interest expense                                     43.2            42.1
Income tax benefit                                   (9.1      )     (44.1   )
Depreciation and amortization                        176.7          169.3   
                                                                     
EBITDA (Non-GAAP)                                    $  169.6        $ 193.9
EBITDA Margin (Non-GAAP)                             7.6       %     10.1    %
                                                                     
Restructuring, impairment and                        55.1            75.9
transaction-related charges (1)
Loss from discontinued operations, net of tax        —               3.2
Gain on disposal of discontinued operations,         —              (35.3   )
net of tax
                                                                     
Adjusted EBITDA from continuing operations           $  224.7       $ 237.7 
(Non-GAAP)
Adjusted EBITDA Margin from continuing               10.0      %     12.4    %
operations (Non-GAAP)

______________________________

        Operating results from continuing operations for the six months ended
(1)   June 30, 2013 and 2012 were affected by the following restructuring,
        impairment and transaction-related charges:

                                                  
                                                     Six Months Ended June 30,
                                                     2013           2012
Employee termination charges (a)                     $  7.7           $ 20.6
Impairment charges (b)                               9.7              14.1
Transaction-related charges (c)                      3.2              2.3
Integration costs (d)                                15.1             23.1
Gain on collection of note receivable (e)            —                (2.4   )
Other restructuring charges, net (f)                 19.4            18.2   
Restructuring, impairment and
transaction-related charges from continuing          $  55.1         $ 75.9 
operations

______________________________

            Employee termination charges were related to workforce reductions
  (a)   through facility consolidations and involuntary separation
            programs.
            Impairment charges were for certain buildings and equipment no
    (b)     longer being utilized in production as a result of facility
            consolidations.
    (c)     Transaction-related charges consisted of professional service fees
            related to business acquisition and divestiture activities.
            Integration costs were primarily related to preparing existing
    (d)     facilities to meet new production requirements resulting from work
            transferring from closed plants, as well as other costs related to
            the integration of the acquired companies.
            Gain on the collection of a note receivable for the six months
    (e)     ended June 30, 2012 was related to a settlement of a disputed
            pre-acquisition Worldcolor note receivable. This non-recurring
            gain was excluded from the calculation of Adjusted EBITDA.
            Other restructuring charges, net, were primarily from costs to
    (f)     maintain and exit closed facilities, as well as lease exit
            charges.
            

In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this earnings announcement also
contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin,
Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow and Adjusted
Diluted Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they are
important measures by which Quad/Graphics assesses the profitability and
liquidity of its business. These measures should not be considered
alternatives to net earnings (loss) as a measure of operating performance or
to cash flows provided by operating activities as a measure of liquidity.



QUAD/GRAPHICS,INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
RECURRING FREE CASH FLOW
For the Six Months Ended June 30, 2013 and 2012
(in millions)
(UNAUDITED)
                                                 
                                                     Six Months Ended June 30,
                                                     2013          2012
Net cash provided by operating activities            $  216.9        $ 170.5
                                                                     
Add back non-recurring payments:
Restructuring payments, net (1)                      51.0            43.1
Worldcolor bankruptcy payments                       7.7            7.9     
                                                                     
Recurring cash flows provided by operating           275.6           221.5
activities
                                                                     
Less: purchases of property, plant and               (69.7     )     (54.2   )
equipment
                                                                     
Recurring Free Cash Flow                             $  205.9       $ 167.3 

______________________________

        Restructuring payments are shown net of cash receipts related to
        non-recurring restructuring transactions. For the six months ended
        June 30, 2013, restructuring payments were $51.0 million. For the six
(1)   months ended June 30, 2012, restructuring payments were $57.8 million
        (consisting of $56.9 million in payments for continuing operations and
        $0.9 million for Canadian discontinued operations) and were reduced
        for a $14.7 million non-recurring collection of a disputed
        pre-acquisition Worldcolor note receivable.
        

Recurring Free Cash Flow includes the cash flows of the Canadian operations
prior to the March1, 2012 sale.

In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this earnings announcement also
contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin,
Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow and Adjusted
Diluted Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they are
important measures by which Quad/Graphics assesses the profitability and
liquidity of its business. These measures should not be considered
alternatives to net earnings (loss) as a measure of operating performance or
to cash flows provided by operating activities as a measure of liquidity.



QUAD/GRAPHICS,INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
Adjusted Diluted Earnings Per Share
For the Three Months Ended June 30, 2013 and 2012
(in millions, except per share data)
(UNAUDITED)
                                                
                                                   Three Months Ended June 30,
                                                   2013            2012
Loss before income taxes and equity in loss of     $  (26.5  )       $ (30.3 )
unconsolidated entities
                                                                     
Restructuring, impairment and                      29.2             37.7    
transaction-related charges
                                                   2.7               7.4
                                                                     
Income tax expense at 40% normalized tax rate      1.1              3.0     
                                                   1.6               4.4
                                                                     
Equity in loss of unconsolidated entities          (1.7      )       (0.8    )
Net loss attributable to noncontrolling            0.4              —       
interests
                                                                     
Adjusted net earnings (Non-GAAP)                   $  0.3           $ 3.6   
                                                                     
Basic weighted average number of common shares     46.9              46.8
outstanding
Plus: effect of dilutive equity incentive          0.8              0.1     
instruments (Non-GAAP)
Diluted weighted average number of common          47.7             46.9    
shares outstanding (Non-GAAP)
                                                                     
Adjusted Diluted Earnings Per Share (Non-GAAP)     $  0.01          $ 0.08  
(1)
                                                                     
                                                                     
Diluted Loss Per Share (GAAP)                      $  (0.59  )       $ (0.44 )
Restructuring, impairment and                      0.61              0.80
transaction-related charges per share
Income tax benefit from condensed consolidated     (0.01     )       (0.22   )
statement of operations per share
Income tax expense at 40% normalized tax rate      (0.02     )       (0.06   )
per share
Allocation to participating securities per         0.01              —
share (2)
GAAP to Non-GAAP diluted impact per share          0.01             —       
Adjusted Diluted Earnings Per Share (Non-GAAP)     $  0.01          $ 0.08  
(1)

______________________________

        Adjusted Diluted Earnings Per Share excludes: (i) restructuring,
(1)   impairment and transaction-related charges and (ii) discrete income
        tax items.
        
        Represents the impact of dividends distributed to non-vested stock
(2)     option holders in accordance with the two-class method of calculating
        GAAP earnings per share.
        

In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this earnings announcement also
contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin,
Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow and Adjusted
Diluted Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they are
important measures by which Quad/Graphics assesses the profitability and
liquidity of its business. These measures should not be considered
alternatives to net earnings (loss) as a measure of operating performance or
to cash flows provided by operating activities as a measure of liquidity.



QUAD/GRAPHICS,INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
Adjusted Diluted Earnings Per Share
For the Six Months Ended June 30, 2013 and 2012
(in millions, except per share data)
(UNAUDITED)
                                                  
                                                     Six Months Ended June 30,
                                                     2013          2012
Loss from continuing operations before income
taxes and equity in earnings (loss) of               $  (49.3  )     $ (49.8 )
unconsolidated entities
                                                                     
Restructuring, impairment and                        55.1           75.9    
transaction-related charges
                                                     5.8             26.1
                                                                     
Income tax expense at 40% normalized tax rate        2.3            10.4    
                                                     3.5             15.7
                                                                     
Equity in earnings (loss) of unconsolidated          (1.5      )     0.3
entities
Net (earnings) loss attributable to                  0.5            (0.1    )
noncontrolling interests
                                                                     
Adjusted net earnings from continuing operations     $  2.5         $ 15.9  
(Non-GAAP)
                                                                     
Basic weighted average number of common shares       46.9            46.8
outstanding
Plus: effect of dilutive equity incentive            0.8            0.2     
instruments (Non-GAAP)
Diluted weighted average number of common shares     47.7           47.0    
outstanding (Non-GAAP)
                                                                     
Adjusted Diluted Earnings Per Share From             $  0.05        $ 0.34  
Continuing Operations (Non-GAAP) (1)
                                                                     
                                                                     
Diluted Loss Per Share From Continuing               $  (0.89  )     $ (0.12 )
Operations (GAAP)
Restructuring, impairment and                        1.16            1.61
transaction-related charges per share
Income tax benefit from condensed consolidated       (0.19     )     (0.94   )
statement of operations per share
Income tax expense at 40% normalized tax rate        (0.05     )     (0.22   )
per share
Allocation to participating securities per share     0.01            —
(2)
GAAP to Non-GAAP diluted impact per share            0.01           0.01    
Adjusted Diluted Earnings Per Share From             $  0.05        $ 0.34  
Continuing Operations (Non-GAAP) (1)

______________________________

        Adjusted Diluted Earnings Per Share excludes: (i) the results of the
(1)   Canadian discontinued operations, (ii) the gain on disposal of the
        Canadian discontinued operations, (iii) restructuring, impairment and
        transaction-related charges and (iv) discrete income tax items.
        
        Represents the impact of dividends distributed to non-vested stock
(2)     option holders in accordance with the two-class method of calculating
        GAAP earnings per share.
        

In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this earnings announcement also
contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin,
Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow and Adjusted
Diluted Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they are
important measures by which Quad/Graphics assesses the profitability and
liquidity of its business. These measures should not be considered
alternatives to net earnings (loss) as a measure of operating performance or
to cash flows provided by operating activities as a measure of liquidity.

Contact:

Investor Relations Contact:
Quad/Graphics
Kelly Vanderboom
Vice President & Treasurer
414-566-2464
Kelly.Vanderboom@qg.com
or
Media Contact:
Quad/Graphics
Claire Ho
Director of Corporate Communications
414-566-2955
Claire.Ho@qg.com