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•	The impact of decreasing demand for printed materials and significant overcapacity in the highly competitive commercial printing industry creates downward pricing pressures;

•	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 impact of the various covenants in the Company's debt facilities that impose restrictions may affect the Company's ability to operate its business;

•	The failure of clients to perform under contracts or to renew contracts with clients on favorable terms or at all;

•	The impact of fluctuations in costs (including labor and labor-related costs, energy costs, freight rates and raw materials) and the impact of fluctuations in the availability of raw materials;

•	The impact of changes in postal rates, service levels or regulations;

•	The failure to successfully identify, manage, complete and integrate acquisitions and investments;

•	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 cyber-security, privacy and environmental laws;

•	The impact of an other than temporary decline in operating results and enterprise value that could lead to non-cash impairment charges due to the impairment of property, plant and equipment and other intangible assets;

•	The impact on the holders of Quad/Graphics' class A common stock of a limited active market for such shares and the inability to independently elect directors or control decisions due to the voting power of the class B common stock;

•	Significant capital expenditures may be needed to maintain the Company's platform and processes and to remain technologically and economically competitive; and

•	The impact of risks associated with the operations outside of the United States, including costs incurred or reputational damage suffered due to improper conduct of its employees, contractors or agents.

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Item 1.	Business

•	Print. Including retail inserts, publications, catalogs, special interest publications, journals, direct mail, books, directories, in-store marketing and promotion, packaging, newspapers, custom print products, other commercial and specialty printed products and global paper procurement.

•	Logistics. Including mailing solutions, postal consultation, delivery optimization and hygiene services, delivery monitoring and tracking, and distribution, logistics and transportation services.

•	Digital. Including email, social, mobile (activated print, apps, websites), digital publishing and beacon technology.

•	Strategy. Including brand, campaign, and media planning and placement.

•	Data. Including data insights, segmentation and response analysis.

•	Creative. Including concept and design, page layout and production, copywriting, photography, retouching, mobile, video production and optimization.

•	Workflow. Including content management, process management, production and facilities management services, color management, and digital file processing and proofing.

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•

Leading marketers and brand owners include American Eagle Outfitters, American Girl, Best Buy Co., Inc., Bluestem Brands, Charter Communications, Colony Brands, ConAgra Foods, Inc., CVS Health Corporation, Eddie Bauer LLC, Hanesbrands, Inc., Menards, Inc., Mylan N.V., Publishers Clearing House, Inc., Publix Super Markets, Inc., Sprouts Farmers Market, Inc., Tractor Supply Company, Walgreen Co., and Weight Watchers International, Inc.

•	Leading publishers include Condé Nast, Harlequin Enterprises Limited, Hearst Magazines, hibu plc, McGraw-Hill Education, Meredith Corporation, National Geographic Partners LLC, Rodale Inc., Simon & Schuster, Inc., TEN: The Enthusiast Network LLC, Time Inc., Wenner Media LLC, Yellow Pages Digital and Media Solutions Limited.

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1.	Strengthen the core;

2.	Grow the business profitably;

3.	Walk in the shoes of our clients;

4.	Engage employees; and

5.	Enhance financial strength and create shareholder value.

•	Commercial Lithographic Printing. Commercial lithographic printing accounts for approximately 55% of industry revenue with primary end uses including advertising, publications, periodicals, catalogs, directories, financial and legal printing, and labels and wrappers.

•	Commercial Screen Printing. Commercial screen printing accounts for approximately 9% of industry revenue and derives its revenue from printing on apparel in addition to revenue from advertisers, label printing, and printing decals.

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•	Commercial Flexographic Printing. Commercial flexographic printing accounts for approximately 8% of industry revenue and is mainly used for packaging, labels and wrappers.

•	Digital Printing. Digital printing accounts for approximately 7% of industry revenue and, since it does not require printing plates and requires less initial setup than many of the other forms of commercial printing, it is very cost effective for small print runs.

•	Book Printing. Book printing accounts for approximately 5% of industry revenue and involves printing and binding books and pamphlets.

•	Commercial Gravure Printing. Commercial gravure printing accounts for approximately 4% of industry revenue with primary end uses including advertising, catalogs, directories, publications, periodicals, stationery, and labels.

•	Quick Printing. Quick printing accounts for approximately 3% of industry revenue and is primarily a business-to-business service that is characterized by its short-run printing and fast copying speeds.

•	Other Printing. Other printing accounts for approximately 9% of industry revenue and includes printing blank books, loose leaf binders and business forms.

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1.	Strengthen the Core

2.	Grow the Business Profitably

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3.	Walk in the Shoes of our Clients

4.	Engage Employees

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5.	Enhance Financial Strength and Create Shareholder Value

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•	the implementation of sustainable reductions in non-labor and indirect labor spending areas;

•	a disciplined approach to improving capacity utilization and productivity across the entire platform; and

•	a focused effort to take out direct costs through a variety of means, including the maximization of labor mix and the expansion of continuous improvement programs to reduce waste, eliminate redundancies and shorten cycle times.

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•	leveraging its integrated data analytics, finishing technology and logistics operations, which allow clients to create and track customized and relevant communications across channels on a cost-effective basis, with the objective of delivering higher response rates at a lower cost;

•	consulting with clients on marketing strategies to integrate personalized, targeted print communications (including in-store signage and point-of-purchase displays), with other media channels including mobile, email, the Web, tablets and e-readers, video and social media to drive higher response rates;

•	improving the cost-effectiveness of local advertising investments through an improved understanding of customers' shopping behavior, messaging preferences and media consumption habits;

•	developing workflow solutions to help clients streamline content management across multiple channels;

•

deploying its interactive media capabilities, including planning, executing and monitoring interactive print campaigns, email, personalized URLs, mobile solutions and digital editions, and creating and maintaining microsites in support of effective, cross-channel marketing campaigns to connect print with mobile technologies—such as smartphones and tablets—to create compelling calls to action that drive business results; and

•	continuing to invest in leading-edge technologies and capabilities to ensure it can provide the most desirable and effective cross-channel solutions to marketers and publishers as technologies and user preferences change.

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•	Strategic Fit. The Company conducts a thorough review process to ensure a potential acquisition will be a good strategic fit.

•	Economics Make Sense. The Company ensures that the economics make sense and will create value through an enhanced range of products and services, revenue-generating solutions and increased efficiencies. Key economics include the negotiated purchase price, targeted efficiencies from integrating the companies together and the necessary cost to achieve those synergies.

•	Executable Integration Plan. The Company makes certain that the integration plan is executable in a timely manner and without risk of significant client disruption. The Company has a holistic approach to integration and measures success with four key elements: financial metrics, client retention and satisfaction, employee integration, and IT and platform integration.

•	Balance Sheet Integrity. The Company ensures that post-acquisition, it retains the financial strength and flexibility it had prior to the acquisition.

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•	total price of printing, materials and distribution;

•	quality;

•	range of services offered, including the ability to provide multichannel marketing campaigns;

•	marketing expertise;

•	distribution capabilities;

•	customer service;

•	access to a highly skilled workforce;

•	availability to schedule work on appropriate equipment;

•	on-time production and delivery; and

•	state-of-the-art technology to meet a client's business objectives, including the ability to adopt new technology quickly.

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•	The Company completed the acquisition of Specialty, a full-service paperboard folding carton manufacturer and logistics provider located in Omaha, Nebraska, on August 25, 2015.

•	The Company completed the acquisition of Copac, a leading international provider of innovative packaging and supply chain solutions, including turnkey packaging design, production and fulfillment services across a range of end markets headquartered in Spartanburg, South Carolina, on April 14, 2015.

•	The Company completed the acquisition of Marin's, a worldwide leader in the point-of-sale display industry headquartered in Paris, France, on February 3, 2015.

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Item 1A.	Risk Factors

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•	Property, plant and equipment of $1,675.8 million; and

•	Other intangible assets, primarily representing the value of customer relationships acquired, of $110.5 million.

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•	that a majority of the Company's board of directors consist of independent directors, as defined under the rules of the NYSE;

•	that the Company have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

•	that the Company have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities.

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Item 1B.	Unresolved Staff Comments

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Item 2.	Properties

Item 3.	Legal Proceedings

Item 4.	Mine Safety Disclosures

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Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

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Item 6.	Selected Financial Data

(1)	Includes restructuring, impairment and transaction-related charges of $164.9 million, $67.3 million, $95.3 million, $118.3 million and $114.0 million for the years ended December 31, 2015, 2014, 2013, 2012 and 2011, respectively. Includes goodwill impairment charges of $808.3 million ($542.4 million, net of tax) for the year ended December 31, 2015.

(2)

The results of operations of the Company's Canadian operations have been reported as discontinued operations for all periods presented. Loss from discontinued operations, net of tax, decreased $35.4 million during the year ended December 31, 2012, to a $3.2 million loss, which primarily reflects the sale of the Company's Canadian operations on March 1, 2012, and the effect of reporting two months of activity as opposed to twelve months for the year ended December 31, 2011. This $3.2 million loss was offset by a gain on disposal of discontinued operations, net of tax, of $34.0 million, resulting in $30.8 million of earnings from discontinued operations for the year ended December 31, 2012.

(3)

Long-term debt and capital lease obligations (excluding current portion) and total assets presented includes the retrospective adoption of new accounting guidance on the balance sheet presentation of debt issuance costs and deferred taxes issued by the Financial Accounting Standards Board ("FASB") in April 2015 and November 2015, respectively, and accordingly, the amounts have been restated for all periods presented. See Note 25, "New Accounting Pronouncements," to the consolidated financial statements in Item 8 "Financial Statements and Supplementary Data" for further information.

(4)	Dividends per share of common stock in 2012 includes a special dividend of $2.00 per share, which was declared and paid in December 2012. Excludes aggregate tax distributions declared to S corporation shareholders of $2.7 million for the year ended December 31, 2011. There were no tax distributions declared to S corporation shareholders for the years ended December 31, 2015, 2014, 2013 and 2012.

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Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations

•	Overview. This section includes a general description of the Company's business and segments, an overview of key performance metrics the Company's management measures and utilizes to evaluate business performance, and an overview of trends affecting the Company, including management's actions related to the trends.

•

Results of Operations. This section contains an analysis of the Company's results of operations by comparing the results for (1) the year ended December 31, 2015, to the year ended December 31, 2014; and (2) the year ended December 31, 2014, to the year ended December 31, 2013. The comparability of the Company's results of operations between periods was impacted by acquisitions, including the 2013 acquisitions of Vertis, Novia, Proteus and Transpak Corporation ("Transpak"); 2014 acquisitions of Brown Printing and UniGraphic, Inc. ("UniGraphic"); and the 2015 acquisitions of Marin's, Copac and Specialty. The results of operations of all acquisitions are included in the Company's consolidated results prospectively from their respective acquisition dates. Forward-looking statements providing a general description of recent and projected industry and Company developments that are important to understanding the Company's results of operations are included in this section. This section also provides a discussion of EBITDA and EBITDA margin, financial measures that the Company uses to assess the performance of its business that are not prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

•

Liquidity and Capital Resources. This section provides an analysis of the Company's capitalization, cash flows, a statement about off-balance sheet arrangements, and a discussion and table of outstanding debt and commitments. Forward-looking statements important to understanding the Company's financial condition are also included in this section. This section also provides a discussion of Free Cash Flow and Debt Leverage Ratio, non-GAAP financial measures that the Company uses to assess liquidity and capital allocation and deployment.

•

Critical Accounting Policies and Estimates. This section contains a discussion of the accounting policies that the Company's management believes are important to the Company's financial condition and results of operations, as well as allowances and reserves that require significant judgment and estimates on the part of the Company's management. In addition, all of the Company's significant accounting policies, including critical accounting policies, are summarized in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies," to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K.

•	New Accounting Pronouncements. This section provides a discussion of new accounting pronouncements and the anticipated impact of those accounting pronouncements to the Company's consolidated financial statements.

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•	Print. Including retail inserts, publications, catalogs, special interest publications, journals, direct mail, books, directories, in-store marketing and promotion, packaging, newspapers, custom print products, other commercial and specialty printed products and global paper procurement.

•	Logistics. Including mailing solutions, postal consultation, delivery optimization and hygiene services, delivery monitoring and tracking, and distribution, logistics and transportation services.

•	Digital. Including email, social, mobile (activated print, apps, websites), digital publishing and beacon technology.

•	Strategy. Including brand, campaign, and media planning and placement.

•	Data. Including data insights, segmentation and response analysis.

•	Creative. Including concept and design, page layout and production, copywriting, photography, retouching, mobile, video production and optimization.

•	Workflow. Including content management, process management, production and facilities management services, color management, and digital file processing and proofing.

•

Strengthen the Core. Quad/Graphics core print categories—retail inserts, publications, catalogs, books and directories—have been under pressure in recent years, but remain foundational to most marketers' and publishers' business strategies and generate a significant amount of cash flow for the Company. Quad/Graphics utilizes a disciplined return on capital framework and historically has made significant investments in its print manufacturing platform and data management capabilities that have resulted in what it believes is one of the most integrated, automated, efficient and modern manufacturing platforms in the industry. The Company's ability to maintain the strength of its core product lines promotes sustainable cash flow and continued value creation to support future growth opportunities.

•

Grow the Business Profitably. The Company believes it is well positioned to grow the business profitably through ongoing innovation, organic growth and disciplined acquisitions that expand the business into new product categories and geographies, transform an existing product line, or create value-driven industry consolidation. Helping clients use print in combination with other media channels, including digital, mobile, social and signage, to increase response rates and deliver high levels of marketing ROI is of particular focus. The Company is adept at leveraging existing client relationships in key vertical industries to drive innovation and develop complementary products and services that help brand owners market their products, services and content more efficiently and effectively across media channels. The Company will look to grow through compelling, ongoing investments in its platform as well as through acquisitions that

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•

Walk in the Shoes of our Clients. The Company is focused on creating a client experience that creates loyalty to the Quad/Graphics brand by partnering with our clients to fully understand their internal processes, marketing strategies and challenges so the Company can better deliver the solutions that will help them achieve their business objectives. Quad/Graphics examines everything from clients' marketing strategy—including how clients manage their customer data—to production and marketing workflow processes. Through a consultative approach, the Company's goal is to become an invaluable strategic partner to its clients—a partner who is focused on helping each client successfully navigate today's changing media landscape.

•

Engage Employees. Quad/Graphics looks to engage employees through the Company's distinct corporate culture, which encourages employees to take pride and ownership in their work; take advantage of continuous learning, apprentice and job-advancement opportunities; share knowledge by mentoring others; and innovate solutions. Quad/Graphics believes one of the most important ways it can drive employee engagement is by acting on a continuous employee feedback loop. Quad/Graphics believes in transparent and regular two-way communication with employees and provides the opportunity for all employees to have a voice or share an opinion through a number of different channels, including surveys and open forums at Company town hall and department meetings.

•

Enhance Financial Strength and Create Shareholder Value. Quad/Graphics follows a disciplined approach to maintaining and enhancing financial strength to create shareholder value, which is essential given ongoing industry challenges. This key strategic goal is centered on the Company's ability to maximize Free Cash Flow, net earnings and EBITDA; maintain consistent financial policies to ensure a strong balance sheet and liquidity level; and retain the financial flexibility needed to strategically allocate and deploy capital as circumstances change.

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•	The Company completed the acquisition of Specialty on August 25, 2015, for a net purchase price of $62 million, excluding acquired cash. Specialty is a full-service paperboard folding carton manufacturer and logistics provider located in Omaha, Nebraska.

•

The Company completed the acquisition of Copac on April 14, 2015, for a net purchase price of $59 million, excluding acquired cash. Copac is a leading international provider of innovative packaging and supply chain solutions, including turnkey packaging design, production and fulfillment services across a range of end markets headquartered in Spartanburg, South Carolina. Copac manufactures products such as folding cartons, labels, inserts, tags and specialty envelopes, and has production facilities in Spartanburg and Santo Domingo, Dominican Republic, as well as strategically sourcing packaging product manufacturing over multiple end markets in Central America and Asia, giving it a global footprint.

•

The Company completed the acquisition of Marin's on February 3, 2015, for a net purchase price of $21 million, excluding acquired cash. Marin's is a worldwide leader in the point of sale display industry and specializes in the research and design of display solutions headquartered in Paris, France. Marin's products are produced by a global network of licensees, including Quad/Graphics, as well as one wide-format digital print, kitting and fulfillment facility in Paris. Marin's uses its own European–based sales force and the global licensees to sell its patented product portfolio.

•	The Company announced its plan to invest in multiple high-speed color digital web presses on January 14, 2015, as part of a three-year strategy to transform the Company's book platform to the widest, most productive digital web presses available in the marketplace today. As of December 31, 2015, seven digital web presses have been installed.

•	The Company completed the acquisition of Brown Printing on May 30, 2014, for a net purchase price of $98 million, excluding acquired cash. Brown Printing provides magazine and catalog printing, distribution services and integrated media solutions to magazine publishers and catalog marketers in the United States.

•

The Company completed the acquisition of UniGraphic on February 5, 2014, for a net purchase price of $11 million, excluding acquired cash. UniGraphic is a commercial and specialty printing company based in the Boston metro area, offers commercial and specialty printing, in-store marketing, digital and fulfillment solutions for a wide variety of industries including arts and entertainment, education, financial, food, healthcare, mass media, pharmaceutical and retail. The acquisition expands Quad/Graphics' capabilities in the commercial and specialty printing market and strengthens the Company's ability to service national retailers' large-format and in-store marketing needs, adding an East Coast presence to Quad/Graphics existing Midwest and West Coast locations.

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The Company completed the acquisition of Wisconsin-based Proteus, as well as its sister company Transpak, on December 18, 2013, for $49 million. Proteus is a designer and manufacturer of high-end paperboard packaging, offering packaging solutions for a wide variety of industries, including automotive, biotechnology, food, beverage, personal care, pharmaceuticals, software and electronics. Transpak is a full-service industrial packaging company, offering crating, packaging, warehousing, distribution and logistics services to destinations worldwide. Through the acquisition of the two companies, Quad/Graphics expanded its capabilities to serve the packaging market.

•	The Company completed the acquisition of Novia on November 7, 2013, for $13 million. Novia is a healthcare solutions company that develops and manages onsite and shared primary care clinics for small to medium sized companies and the public sector, such as school districts and city and county governments, and is located in Indianapolis, Indiana.

•

The Company completed its acquisition of substantially all of the assets of Vertis on January 16, 2013, for $265 million, including $95 million for current assets that were in excess of normalized working capital requirements. Vertis is a provider of retail advertising inserts, direct marketing and in-store marketing solutions. The Company believes the acquisition of Vertis strengthened its client offering with an enhanced range of products and services, and also increased manufacturing flexibility and distribution efficiencies from an extended geographic footprint in the United States.

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(1)	Restructuring, impairment and transaction-related charges of $164.9 million incurred during the year ended December 31, 2015, included:

a.	$42.1 million of employee termination charges related to workforce reductions through facility consolidations and involuntary separation programs;

b.

$95.3 million of impairment charges including: (1) $54.7 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations including Atlanta, Georgia; Augusta, Georgia; Dickson, Tennessee; East Greenville, Pennsylvania; Loveland, Colorado; and Queretaro, Mexico, as well as other capacity reduction restructuring initiatives; (2) $18.6 million of investment-related impairment charges, primarily related to $16.7 million of impairment charges to reduce the book value of the Company's equity method investment in Quad/Graphics Chile S.A. ("Chile") to fair value (see Note 8, "Equity Method Investments in Unconsolidated Entities," to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K, for additional details related to the impairment of the Company's equity method investment in Chile); (3) $12.7 million of land and building impairment charges primarily related to the Augusta, Georgia and East Greenville, Pennsylvania plant closures; (4) $7.1 million of customer relationship intangible asset impairments; and (5) $2.2 million of impairment charges primarily related to the restructuring proceedings in Argentina for the Company's Argentina subsidiaries, Anselmo L. Morvillo S.A. ("Morvillo") and World Color Argentina, S.A. (the "Argentina Subsidiaries") for land, building, machinery and equipment and other intangible assets;

c.

$(6.7) million of transaction-related charges (income) including a $10.0 million non-recurring gain as a result of Courier Corporation's ("Courier") termination of the agreement pursuant to which Quad/Graphics was to acquire Courier, partially offset by $3.3 million of professional service fees including fees for the terminated acquisition of Courier and the acquisitions of Marin's, Copac and Specialty;

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d.	$5.1 million of acquisition-related integration costs primarily related to preparing existing 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; and

e.	$29.1 million of various other restructuring charges, including a $6.0 million non-cash and nondeductible expense to recognize accumulated foreign exchange losses on the sale of the Chile equity method investment, lease exit charges related to closed facilities, as well as other costs to maintain and exit closed facilities.

(2)	Restructuring, impairment and transaction-related charges of $67.3 million incurred during the year ended December 31, 2014, included:

a.	$30.6 million of employee termination charges related to workforce reductions through facility consolidations and involuntary separation programs;

b.

$14.4 million of impairment charges including: (1) $8.0 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations including Atlanta, Georgia; Dickson, Tennessee; Mexico City, Mexico; Pomona, California; and St. Cloud, Minnesota, as well as other capacity reduction restructuring initiatives and (2) $6.4 million of land and building impairment charges primarily related to the Bristol, Pennsylvania and Dickson, Tennessee plant closures;

c.	$2.6 million of transaction-related charges consisting of professional service fees for business acquisition and divestiture activities, which primarily includes professional service fees for the acquisitions of Brown Printing and UniGraphic;

d.	$11.2 million of acquisition-related integration costs primarily related to preparing existing 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; and

e.	$8.5 million of other restructuring charges, including costs to maintain and exit closed facilities, as well as lease exit charges, presented net of a $4.9 million gain from the termination of the postretirement medical benefit plan.

(3)	Pre-tax non-cash goodwill impairment charges of $808.3 million ($542.4 million, net of tax) were recorded during the year ended December 31, 2015, of which $778.3 million related to the United States Print and Related Services segment and $30.0 million related to the International segment.

(4)	Interest expense decreased $4.5 million ($2.7 million, net of tax) during the year ended December 31, 2015, to $88.4 million. This change was due to a lower weighted average interest rate on borrowings and lower average debt levels in 2015 as compared to 2014.

(5)	A non-recurring $7.2 million loss on debt extinguishment ($4.3 million, net of tax) was recognized during the year ended December 31, 2014, primarily related to the $1.9 billion debt financing arrangements completed on April 28, 2014. The $7.2 million represents certain debt issuance costs that were expensed.

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(6)

The decrease in income tax benefit of $14.4 million as calculated in the following table is primarily due to $10.4 million in reduced tax benefits in 2015 from a reversal of the liability for unrecognized tax benefits in 2014 based on the expiration of statutes of limitations and $5.6 million related to losses in foreign jurisdictions in 2015 in excess of 2014 where the Company does not receive a tax benefit. See Note 14, "Income Taxes," to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on income taxes.

(7)

The decrease attributable to investments in unconsolidated entities and noncontrolling interests, net of tax, of $3.9 million during the year ended December 31, 2015, was primarily due to a $2.8 million increase in losses from unconsolidated entities at the Company's investment in Plural Industria Gráfica Ltda ("Plural"), the Company's Brazilian joint venture and a $0.9 million increase in losses at the Company's investment in Chile that was sold on July 31, 2015.

(8)

Operating income (loss), excluding restructuring, impairment and transaction-related charges and goodwill impairment charges, decreased $65.4 million ($39.2 million, net of tax) primarily due to: (1) a 3.8% reduction in net sales predominantly from ongoing industry volume and pricing pressures; (2) higher labor costs associated with lower productivity; (3) a $10.8 million charge to reduce a vendor receivable due to collectability concerns; and (4) $6.1 million in net gains in 2014 related to favorable legal and bankruptcy settlements. These declines were partially offset by: (1) operating results from the additional earnings from the sales attributed to recent acquisitions; (2) a $4.5 million increase in net gains on the sale of property, plant and equipment; (3) a $4.5 million decrease in foreign currency losses; (4) $4.0 million in lower vacation expense due to a change in the vacation policy; (5) a $2.5 million gain on the sale of a cost method investment; and (6) a $1.1 million favorable impact from the resolution of certain acquisition related contingencies. The following discussion provides additional details.

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(1)	Net earnings (loss) attributable to Quad/Graphics common shareholders includes the following effects:

a.	Restructuring, impairment and transaction-related charges of $164.9 million and $67.3 million for the years ended December 31, 2015 and 2014, respectively;

b.	Non-cash goodwill impairment charge of $808.3 million for the year ended December 31, 2015; and

c.	Loss on debt extinguishment of $7.2 million for the year ended December 31, 2014.

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(1)	Restructuring, impairment and transaction-related charges of $67.3 million incurred during the year ended December 31, 2014, included:

a.	$30.6 million of employee termination charges related to workforce reductions through facility consolidations and involuntary separation programs;

b.

$14.4 million of impairment charges including: (1) $8.0 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations including Atlanta, Georgia; Dickson, Tennessee; Mexico City, Mexico; Pomona, California; and St. Cloud, Minnesota, as well as other capacity reduction restructuring initiatives; and (2) $6.4 million of land and building impairment charges primarily related to the Bristol, Pennsylvania and Dickson, Tennessee plant closures;

c.	$2.6 million of transaction-related charges consisting of professional service fees for business acquisition and divestiture activities, which primarily includes professional service fees for the acquisitions of Brown Printing and UniGraphic;

d.	$11.2 million of acquisition-related integration costs primarily related to preparing existing 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; and

e.	$8.5 million of other restructuring charges, including costs to maintain and exit closed facilities, as well as lease exit charges, presented net of a $4.9 million gain from the termination of the postretirement medical benefit plan.

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(2)	Restructuring, impairment and transaction-related charges of $95.3 million incurred during the year ended December 31, 2013, included:

a.	$15.7 million of employee termination charges related to workforce reductions through facility consolidations and involuntary separation programs;

b.

$21.8 million of impairment charges including: (1) $11.7 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations including Dubuque, Iowa; Jonesboro, Arkansas; Pittsburg, California and Vancouver, British Columbia, Canada, as well as other capacity reduction restructuring initiatives; and (2) $10.1 million of land and building impairment charges primarily related to the Corinth, Mississippi; Marengo, Iowa and Mexico City, Mexico plant closures;

c.	$4.0 million of transaction-related charges consisting of professional service fees for business acquisition and divestiture activities, which primarily includes professional service fees for the acquisitions of Vertis, Proteus and Transpak;

d.	$25.2 million of acquisition-related integration costs primarily related to preparing existing 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; and

e.	$28.6 million of other restructuring charges, including costs to maintain and exit closed facilities, as well as lease exit charges, presented net of a $2.1 million pension plan settlement gain.

(3)	Interest expense increased $7.4 million ($4.4 million, net of tax) during the year ended December 31, 2014, to $92.9 million. This change was due to a higher weighted average interest rate on borrowings due to the debt financing arrangements completed on April 28, 2014, and increased debt levels in 2014 as compared to 2013, primarily related to acquisitions.

(4)	A non-recurring $7.2 million loss on debt extinguishment ($4.3 million, net of tax) was recognized during the year ended December 31, 2014, primarily related to the $1.9 billion debt financing arrangements completed on April 28, 2014. The $7.2 million represents certain debt issuance costs that were expensed.

(5)

The incremental income tax expense of $3.1 million above the normalized amount as calculated in the following table is primarily due to the following: (1) $6.8 million of income tax expense recorded in 2014 to establish a valuation allowance for certain operations in Mexico; (2) a $5.2 million decrease in domestic deductions; and (3) $1.6 million of one-time foreign benefits in 2013, partially offset by (4) a $10.5 million tax benefit from reversal of reserves for unrecognized tax benefits related to audit settlements or the expiration of the applicable statutes of limitations.

(6)

The decrease attributable to investments in unconsolidated entities and noncontrolling interests, net of tax, of $1.5 million during the year ended December 31, 2014, was primarily due to a decrease of $1.3 million of excluded noncontrolling interest loss in the Company's consolidated statements of operations related to the Company's ownership in Argentina due to the Company increasing its ownership share from 85% to 100%.

(7)

Operating income, excluding restructuring, impairment and transaction-related charges, decreased $28.9 million ($17.4 million, net of tax) primarily due to a decline in earnings from ongoing industry volume and pricing pressures, as well as $9.5 million in net gains in 2013 that did not repeat in 2014 related to favorable legal, environmental and bankruptcy related settlements and a gain on the sale of Quad/Graphics' Brazilian operations in January 2013 to the Company's existing Brazilian joint venture with

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(1)	Net earnings attributable to Quad/Graphics common shareholders includes the following effects:

a.	Restructuring, impairment and transaction-related charges of $67.3 million and $95.3 million for the years ended December 31, 2014, and 2013, respectively; and

b.	Loss on debt extinguishment of $7.2 million for the year ended December 31, 2014.

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(1)	Free Cash Flow of $291.6 million in 2013 includes an estimated $90 million one-time benefit realized from the restoration of normalized working capital levels following the 2013 acquisition of Vertis. Excluding this $90 million one-time benefit, Free Cash Flow would have been $201.6 million for the year ended December 31, 2013.

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(1)

As permitted by the Senior Secured Credit Facility, certain pro forma financial information related to the acquisition of Brown Printing was included when calculating the Debt Leverage Ratio as of December 31, 2014. As the acquisition of Brown Printing was completed on May 30, 2014, the $5.2 million pro forma EBITDA as adjusted for purposes of calculating the Debt Leverage Ratio represents the period from January 1, 2014 to May 29, 2014. Pro forma EBITDA as adjusted for purposes of calculating the Debt Leverage Ratio for Brown Printing was calculated in a consistent manner with the calculation above for Quad/Graphics. Brown Printing's financial information subsequent to the May 30, 2014 acquisition has been included within the Quad/Graphics EBITDA as adjusted for purposes of calculating the Debt Leverage Ratio as the results of Brown Printing have been consolidated with Quad/Graphics' financial results since that date. If the five months of pro forma EBITDA as adjusted for purposes of calculating the Debt Leverage Ratio for Brown Printing was not included in the calculation, the Company's Debt Leverage Ratio would have been 2.59x as of December 31, 2014.

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•	$1.9 Billion Debt Financing Arrangements which includes the following:

◦	Senior Secured Credit Facility:

▪	$850.0 million revolving credit facility ($70.8 million outstanding as of December 31, 2015);

▪	$450.0 million Term Loan A ($410.6 million outstanding as of December 31, 2015); and

▪	$300.0 million Term Loan B ($293.2 million outstanding as of December 31, 2015);

◦	Senior Unsecured Notes ($300.0 million outstanding as of December 31, 2015);

•	Master Note and Security Agreement ($260.4 million outstanding as of December 31, 2015).

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•

Senior Secured Credit Facility. The Senior Secured Credit Facility consists of three different loan facilities. The first facility is a revolving credit facility in the amount of $850.0 million with a term of five years maturing on April 27, 2019. The second facility is a Term Loan A in the aggregate amount of $450.0 million with a term of five years maturing on April 27, 2019, subject to certain required amortization. The third facility is a Term Loan B in the amount of $300.0 million with a term of seven years maturing on April 27, 2021, subject to certain required amortization.

•	Senior Unsecured Notes. The Company received $294.8 million in net proceeds from the sale of the $300.0 million Senior Unsecured Notes, after deducting the initial purchasers' discounts and commissions. The Senior Unsecured Notes bear interest at 7.0% and interest is payable semi-annually. The Senior Unsecured Notes are due May 1, 2022.

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•	Total Leverage Ratio. On a rolling twelve-month basis, the total leverage ratio, defined as total consolidated debt to consolidated EBITDA, shall not exceed 3.75 to 1.00 (for the twelve months ended December 31, 2015, the Company's total leverage ratio was 2.89 to 1.00).

•	Senior Secured Leverage Ratio. On a rolling twelve-month basis, the senior secured leverage ratio, defined as senior secured debt to consolidated EBITDA, shall not exceed 3.50 to 1.00 (for the twelve months ended December 31, 2015, the Company's senior secured leverage ratio was 2.26 to 1.00).

•	Minimum Interest Coverage Ratio. On a rolling twelve-month basis, the minimum interest coverage ratio, defined as consolidated EBITDA to consolidated cash interest expense, shall not be less than 3.50 to 1.00 (for the twelve months ended December 31, 2015, the Company's minimum interest coverage ratio was 5.66 to 1.00).

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•	If the Company's total leverage ratio is greater than 3.00 to 1.00 (as defined in the Senior Secured Credit Facility), the Company is prohibited from making greater than $120.0 million of annual dividend payments, capital stock repurchases and certain other payments. If the total leverage ratio is less than 3.00 to 1.00, there are no such restrictions.

•

If the Company's senior secured leverage ratio is greater than 3.00 to 1.00 or the Company's total leverage ratio is greater than 3.50 to 1.00 (these ratios as defined in the Senior Secured Credit Facility), the Company is prohibited from voluntarily prepaying any of the Senior Unsecured Notes and from voluntarily prepaying any other unsecured or subordinated indebtedness, with certain exceptions (including any mandatory prepayments on the Senior Unsecured Notes or any other unsecured or subordinated debt). If the senior secured leverage ratio is less than 3.00 to 1.00 and the total leverage ratio is less than 3.50 to 1.00, there are no such restrictions.

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(1)

Debt obligations include $321.7 million for anticipated future interest payments, and exclude $16.1 million and $2.2 million for future amortization of debt issuance costs and original issue discount, respectively. With respect to the variable interest rate portions of the debt, the interest amounts were calculated by applying the December 31, 2015, weighted-average interest rate to determine the value of future interest payments. For the Master Note and Security Agreement, the weighted-average interest rate of the notes was applied to the average principal balance outstanding for each time period. Amounts included in "Thereafter" include principal payments and estimated interest expense through April 2031.

(2)

For the pension benefits, contributions and benefit payments to be funded from Company assets included in the table have been actuarially estimated over a five year period. While benefit payments under these benefit plans are expected to continue beyond 2020, the Company believes that an estimate beyond this period is unreasonable. The contractual obligations table above does not include a $47.6 million estimated withdrawal liability for the United States World Color Press MEPPs due to the uncertainty with the amount and timing of any potential withdrawal liability payment. During 2016, the Company is scheduled to make minimum payments of $11.1 million, pending no settlement or conclusion to the litigation with the MEPPs' trustees. See Note 17, "Employee Retirement Plans," to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K for further discussion of the withdrawal from the MEPPs.

(3)	Capital lease obligations include $0.5 million for anticipated future interest payments.

(4)	Purchase obligations consist primarily of $14.9 million in firm commitments to purchase press and finishing equipment, as well as $1.6 million of other purchase obligations.

(5)

The contractual obligations table above does not include reserves for uncertain tax positions recorded in accordance with the accounting guidance on uncertainties in income taxes. The Company has taken tax positions for which the ultimate amount and the year(s) any necessary payments will be made that pertain to those tax positions is uncertain. The reserve for uncertain tax positions prior to interest and penalties is $29.8 million as of December 31, 2015. The Company has also recorded accruals for interest and penalties related to uncertain tax positions of $4.8 million and $0.4 million, respectively, as of December 31, 2015.

(6)	The contractual obligations table above does not include the share repurchase program as no repurchases are required under the program. See the "Share Repurchase Program" section above for further discussion, including the maximum potential cash payments under the program.

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Item 7A.	Quantitative and Qualitative Disclosures About Market Risk

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Item 8.	Financial Statements and Supplementary Data

(1)

Reflects results of acquired businesses from the relevant acquisition dates, primarily related to acquisitions of Brown Printing on May 30, 2014, Marin's on February 3, 2015, Copac on April 14, 2015, and Specialty on August 25, 2015, (see Note 2, "Acquisitions and Strategic Investments," to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on the acquisitions).

(2)	Reflects pre-tax non-cash goodwill impairment charges of $808.3 million ($542.4 million, net of tax) recorded during the year ended December 31, 2015.

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•	The unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting under existing GAAP. The Company is the acquirer for accounting purposes.

•	The unaudited pro forma condensed combined financial information does not reflect any operating cost synergy savings that the combined companies may achieve as a result of the acquisition, the costs necessary to achieve these operating synergy savings or additional charges necessary as a result of the integration.

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•	Employee termination charges of $42.1 million were recorded by the Company as a result of workforce reductions through facility consolidations and involuntary separation programs.

•	Integration costs of $5.1 million were recorded by the Company primarily related to preparing existing facilities to meet new production requirements resulting from work transferring from closed plants, as well as other costs related to the integration of acquired companies.

•

Other restructuring charges of $29.1 million were recorded by the Company, which consisted of: (1) $11.7 million of vacant facility carrying costs; (2) $2.8 million of equipment and infrastructure removal costs from closed plants; and (3) $8.6 million of lease exit charges primarily related to the closure of the Atlanta, Georgia and Loveland, Colorado facilities. The Company also recorded a $6.0 million non-cash expense to recognize accumulated foreign exchange losses on the sale of the Chile equity method investment (see Note 8, "Equity Method Investments in Unconsolidated Entities," for additional details).

•	Employee termination charges of $30.6 million were recorded by the Company as a result of workforce reductions through facility consolidations and involuntary separation programs.

•	Integration costs of $11.2 million were recorded by the Company primarily related to preparing existing facilities to meet new production requirements resulting from work transferring from closed plants, as well as other costs related to the integration of acquired companies.

•

Other restructuring charges of $8.5 million were recorded by the Company, which consisted of: (1) $7.7 million of vacant facility carrying costs; (2) $2.4 million of legal fees; (3) $1.8 million of equipment and infrastructure removal costs from closed plants; and (4) $1.5 million of lease exit charges. Other restructuring charges were presented net of a $4.9 million gain from the termination of the postretirement medical benefit plan (see Note 17, "Employee Retirement Plans," for further details on the postretirement medical benefit plan termination).

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•	Employee termination charges of $15.7 million were recorded by the Company as a result of workforce reductions through facility consolidations and involuntary separation programs.

•	Integration costs of $25.2 million were recorded by the Company primarily related to preparing existing facilities to meet new production requirements resulting from work transferring from closed plants, as well as other costs related to the integration of acquired companies.

•

Other restructuring charges of $28.6 million were recorded by the Company, which consisted of: (1) $14.4 million of vacant facility carrying costs; (2) $6.2 million of equipment and infrastructure removal costs from closed plants; and (3) $10.1 million of lease exit charges. Other restructuring charges were presented net of a $2.1 million pension plan settlement gain (see Note 17, "Employee Retirement Plans," for further details on the pension plan settlement gain).

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(1)	Other consists of computer equipment, vehicles, furniture and fixtures, leasehold improvements and communication related equipment.

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•	Total Leverage Ratio. On a rolling twelve-month basis, the total leverage ratio, defined as total consolidated debt to consolidated EBITDA, shall not exceed 3.75 to 1.00 (for the twelve months ended December 31, 2015, the Company's total leverage ratio was 2.89 to 1.00).

•	Senior Secured Leverage Ratio. On a rolling twelve-month basis, the senior secured leverage ratio, defined as senior secured debt to consolidated EBITDA, shall not exceed 3.50 to 1.00 (for the twelve months ended December 31, 2015, the Company's senior secured leverage ratio was 2.26 to 1.00).

•	Minimum Interest Coverage Ratio. On a rolling twelve-month basis, the minimum interest coverage ratio, defined as consolidated EBITDA to consolidated cash interest expense, shall not be less than 3.50 to 1.00 (for the twelve months ended December 31, 2015, the Company's minimum interest coverage ratio was 5.66 to 1.00).

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•	If the Company's total leverage ratio is greater than 3.00 to 1.00 (as defined in the Senior Secured Credit Facility), the Company is prohibited from making greater than $120.0 million of annual dividend payments, capital stock repurchases and certain other payments. If the total leverage ratio is less than 3.00 to 1.00, there are no such restrictions.

•

If the Company's senior secured leverage ratio is greater than 3.00 to 1.00 or the Company's total leverage ratio is greater than 3.50 to 1.00 (these ratios as defined in the Senior Secured Credit Facility), the Company is prohibited from voluntarily prepaying any of the Senior Unsecured Notes and from voluntarily prepaying any other unsecured or subordinated indebtedness, with certain exceptions (including any mandatory prepayments on the Senior Unsecured Notes or any other unsecured or subordinated debt). If the senior secured leverage ratio is less than 3.00 to 1.00 and the total leverage ratio is less than 3.50 to 1.00, there are no such restrictions.

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Level 1:	Quoted prices in active markets for identical assets or liabilities.

Level 2:	Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3:	Unobservable inputs for the asset or liability. There are no Level 3 recurring measurements of assets or liabilities as of December 31, 2015.

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•	Assets contributed to the MEPPs by one company may be used to provide benefits to employees of other participating companies.

•	If a participating company stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating companies.

•	If the Company stops participating in some or all of its MEPPs, and continues in business, the Company would be required to pay an amount, referred to as a withdrawal liability, based on the unfunded status of the plan.

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•	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.

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Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.	Controls and Procedures

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Item 9B.	Other Information

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Item 10.	Directors, Executive Officers and Corporate Governance

Item 11.	Executive Compensation

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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(1)	Consists of the Company's 2010 Omnibus Incentive Plan. Awards under the Omnibus Plan may consist of incentive awards, stock options, stock appreciation rights, performance shares, performance share units, shares of class A stock, restricted stock, restricted stock units, deferred stock units or other stock-based awards as determined by the Company's board of directors.

(2)	The weighted-average exercise price of outstanding options, warrants and rights only includes stock options.

Item 13.	Certain Relationships and Related Transactions, and Director Independence

Item 14.	Principal Accountant Fees and Services

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Item 15.	Exhibits and Financial Statement Schedules

1.	Consolidated financial statements—The consolidated financial statements listed in the accompanying index to consolidated financial statements are filed as part of this Annual Report on Form 10-K.

2.	Financial statement schedule—All financial statement schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements and notes thereto.

3.	Exhibits—The exhibits listed in the accompanying "Exhibit Index" are filed as part of this Annual Report on Form 10-K.

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++	A management contract or compensatory plan or arrangement.