What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-27 · 225 added, 319 removed, 1215 unchanged (31% of the section changed)

3 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Quad/Graphics, Inc.

(the Company) as of December 31, 2022, and the related consolidated statement of operations, comprehensive income, cash flows, and shareholders’ equity in the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Quad/Graphics, Inc.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

2 unchanged sentences

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

2 unchanged sentences

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Table o f Contents

Measurement of accrued liabilities for workers’ compensation claims

2 unchanged sentences

The IBNR calculation utilizes a variety of assumptions, including but not limited to selected loss development factors, loss trend rates, increased limit factors and loss rates.

The accrued liabilities for workers’ claims are based upon an actuarial analysis performed annually by actuarial specialists as of October 31st and are adjusted by the actuarially determined losses and actual claims payments to update through year end.

The accrued liabilities for workers’ claims are based upon an actuarial analysis performed annually by actuarial specialists as of October 31 and are adjusted by the actuarially determined losses and actual claims payments to update through year end.

Auditing management’s estimate of the IBNR was especially challenging due to the various assumptions and the complexity of the actuarial analysis.

7 unchanged sentences

February 21, 2024

Table o f Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Quad/Graphics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Quad/Graphics, Inc.

and subsidiaries (the “Company”) as of December 31, 2021, the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows, for the year ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Milwaukee, Wisconsin

February 23, 2022

We began serving as the Company’s auditor in 2002.

In 2022 we became the predecessor auditor.

Table o f Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Quad/Graphics, Inc.

Opinion on Internal Control Over Financial Reporting

2 unchanged sentences

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2022 and the related consolidated statement of operations, comprehensive income, cash flows, and shareholders’ equity in the year ended December 31, 2022, and the related notes listed in the accompanying index and our report dated February 24, 2023 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes and our report dated February 21, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

17 unchanged sentences

February 21, 2024

Table o f Contents

QUAD/GRAPHICS, INC.

11 unchanged sentences

Selling, general and administrative expenses 344.5 358.6

Gains from sale and leaseback — ( 24.5 )

Depreciation and amortization 128.8 141.3

4 unchanged sentences

Net pension income ( 1.7 ) ( 12.6 )

Loss on debt extinguishment — 0.7

Earnings before income taxes and equity in earnings of unconsolidated entity 17.7 47.0

Earnings (loss) before income taxes ( 42.6 ) 17.7

Income tax expense 12.8 8.4

Earnings before equity in earnings of unconsolidated entity 9.3 37.5

Equity in earnings of unconsolidated entity — ( 0.3 )

Net earnings $ 9.3 $ 37.8

Earnings per share

Basic $ 0.18 $ 0.74

Diluted $ 0.18 $ 0.71

Net earnings (loss) $ ( 55.4 ) $ 9.3

Earnings (loss) per share

Basic and Diluted $ ( 1.14 ) $ 0.18

Weighted average number of common shares outstanding

2 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

Table o f Contents

QUAD/GRAPHICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

Year Ended December 31,

Net earnings $ 9.3 $ 37.8

Net earnings (loss) $ ( 55.4 ) $ 9.3

Other comprehensive income

5 unchanged sentences

Reclassification of foreign currency translation adjustments — 27.3

Interest rate swap adjustments 3.4 7.1

Pension benefit plan adjustments

Net gain (loss) arising during period ( 30.7 ) 20.4

Settlement charge on pension benefit plans included in net earnings — 0.9

Total pension benefit plan adjustments ( 30.7 ) 21.3

Interest rate derivative adjustments 2.5 3.4

Net loss arising from pension benefit plans during period ( 5.4 ) ( 30.7 )

Other comprehensive income, before tax 10.2 27.1

1 unchanged sentence

Other comprehensive income, net of tax 10.7 32.9

Total comprehensive income $ 42.2 $ 47.9

Total comprehensive income (loss) $ ( 44.7 ) $ 42.2

See accompanying Notes to Consolidated Financial Statements.

Table o f Contents

QUAD/GRAPHICS, INC.

47 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

Table o f Contents

QUAD/GRAPHICS, INC.

3 unchanged sentences

OPERATING ACTIVITIES

Net earnings $ 9.3 $ 37.8

Adjustments to reconcile net earnings to net cash provided by operating activities:

Net earnings (loss) $ ( 55.4 ) $ 9.3

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

Depreciation and amortization 128.8 141.3

Impairment charges 25.2 2.2

Reclassification of foreign currency translation adjustments — ( 2.7 )

Settlement charges on pension plan — 0.9

Amortization of debt issuance costs and original issue discount 2.0 2.2

Loss on debt extinguishment — 0.7

Stock-based compensation 5.6 6.0

Gain on the sale or disposal of property, plant and equipment ( 2.3 ) ( 49.0 )

(Gain) loss on the sale of a business 23.1 ( 20.9 )

Gain from a property insurance claim — ( 13.4 )

Gain on the sale or disposal of property, plant and equipment, net ( 10.9 ) ( 2.3 )

Loss on the sale of a business — 23.1

Deferred income taxes ( 3.7 ) 2.4

Equity in earnings of unconsolidated entity — ( 0.3 )

Changes in operating assets and liabilities—net of acquisitions and divestitures:

9 unchanged sentences

Proceeds from the sale of property, plant and equipment 31.7 4.6

Proceeds from the sale of a business — 39.7

Proceeds from a property insurance claim — 15.0

Acquisition of a business ( 2.6 ) —

Loan to an unconsolidated entity ( 0.6 ) —

Acquisitions of businesses ( 1.5 ) ( 2.6 )

Other investing activities ( 4.5 ) 1.1

Net cash (used in) provided by investing activities ( 60.5 ) 129.4

Net cash used in investing activities ( 46.4 ) ( 60.5 )

FINANCING ACTIVITIES

4 unchanged sentences

Proceeds from issuance of long-term debt 0.6 3.1

Payments of debt issuance costs and financing fees — ( 5.9 )

Change in ownership of noncontrolling interests — ( 1.9 )

Purchases of treasury stock ( 12.6 ) ( 10.0 )

8 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

Table o f Contents

QUAD/GRAPHICS, INC.

6 unchanged sentences

Loss Quad’s Shareholders’

Equity Noncontrolling

Shares Amount Shares Amount

1 unchanged sentence

Net earnings — — — — — 9.3 — 9.3

Change in ownership of noncontrolling interests — — ( 0.9 ) — — — — ( 0.9 ) ( 0.7 )

Foreign currency translation adjustments — — — — — — 27.2 27.2

Reclassification of foreign currency translation adjustments — — — — — — 27.3 27.3

Pension benefit plan liability adjustments, net of tax — — — — — — 16.8 16.8 —

Pension benefit plan liability adjustments, net of $ 6.5 million tax benefit

— — — — — — ( 24.2 ) ( 24.2 )

Interest rate swap adjustments, net of tax — — — — — — 2.6 2.6

Accrual reversal for cash dividends declared — — — — — 0.4 — 0.4 —

Stock-based compensation — — 5.8 — — — — 5.8

Purchases of treasury stock — — — ( 3.1 ) ( 10.0 ) — — ( 10.0 )

Issuance of share-based awards, net of other activity 0.9 — ( 3.3 ) 1.0 3.9 — — 0.6

1 unchanged sentence

Balance at December 31, 2022 56.6 $ 1.4 $ 841.8 ( 3.9 ) $ ( 23.5 ) $ ( 518.5 ) $ ( 128.3 ) $ 172.9

Net earnings — — — — — 9.3 — 9.3 —

Net loss — — — — — ( 55.4 ) — ( 55.4 )

Foreign currency translation adjustments — — — — — — 13.1 13.1

Reclassification of foreign currency translation adjustments — — — — — — 27.3 27.3 —

Pension benefit plan liability adjustments, net of $ 1.0 million tax benefit

11 unchanged sentences

Basis of Presentation and Summary of Significant Accounting Policies

Nature of Operations —Quad is a global marketing experience company that gives brands a more streamlined, impactful, flexible and frictionless way to go to market and reach consumers.

The Company leverages its three key competitive advantages — integrated marketing platform excellence, ongoing innovation, and culture and social purpose — to create a better way for its clients, employees and communities.

With a marketing platform intentionally built for integrated marketing execution, Quad helps brands reduce the complexity of working with multiple agency partners and vendors;

increase marketing process efficiency;

and maximize marketing effectiveness.

The Company’s holistic, multichannel, through-the-line marketing solutions include strategy and consulting, data and analytics, technology solutions, media services, creative and content solutions, and managed services.

With unmatched scale for client-based, on-site services and highly qualified talent with expansive subject matter expertise, the Company has the resources and knowledge to help a wide variety of clients across multiple verticals, including those in industries such as retail, publishing, consumer packaged goods, financial services, healthcare, insurance and direct-to-consumer.

Nature of Operations —Quad is a global marketing experience (MX) company that helps brands make direct consumer connections, from household to in-store to online.

The Company is focused on providing a better marketing experience for its clients, so they can focus on delivering the best customer experience to theirs.

Quad does this with a suite of marketing solutions that is flexible, scalable and connected.

Supported by state-of-the-art technology and data-driven intelligence, these solutions are designed to streamline the complexities of marketing and remove friction from wherever it occurs in the marketing journey.

Quad tailors its solutions to its clients’ objectives, driving cost efficiencies, improving speed to market, strengthening marketing effectiveness, and delivering value on their investments.

The Company supports a diverse base of clients, including industry-leading blue-chip companies that serve both businesses and consumers across multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods and direct-to-consumer;

financial services;

Principles of Consolidation and Basis of Presentation —The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned controlled subsidiaries and have been prepared in accordance with GAAP.

6 unchanged sentences

Translation adjustments resulting from fluctuations in exchange rates are recorded as a separate component of accumulated other comprehensive income (loss) on the consolidated statements of shareholders’ equity, while transaction gains and losses are recorded in selling, general and administrative expenses on the consolidated statements of operations.

Foreign exchange transactions resulted in losses of $ 2.1 million and $ 2.9 million during the years ended December 31, 2022 and 2021, respectively.

The Company had a 49 % interest in Plural, a commercial printer based in São Paulo, Brazil, as of December 31, 2021 and through the date of the Company’s sale of the investment in Plural in January 2022.

The Company accounted for this entity using the equity method of accounting.

The Company’s equity in the earnings of Plural’s operations was recorded in equity in earnings of unconsolidated entity in the Company’s consolidated statements of operations, and was included within the International segment.

As a result of the planned sale, the Company recorded a $ 32.1 million impairment charge during the year ended December 31, 2021.

Quad has no unconsolidated entities as of December 31, 2022.

Foreign exchange transactions resulted in gains of $ 4.4 million during the year ended December 31, 2023 and losses of $ 2.1 million during the year ended December 31, 2022.

Use of Estimates —The preparation of consolidated financial statements requires the use of management’s estimates and assumptions that affect the reported assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods.

2 unchanged sentences

allowances for doubtful accounts, inventory obsolescence, asset valuations and useful lives, pension benefits, self-insurance reserves, stock-based compensation, taxes, restructuring and other provisions and contingencies.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Revenue Recognition —The Company recognizes its products and services revenue based on when the transfer of control passes to the customer or when the service is completed and accepted by the customer.

3 unchanged sentences

however, the Company accrues for the estimated amount of customer allowances at the time of sale based on historical experience and known trends.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Revenue from services is recognized as services are performed.

18 unchanged sentences

Research and Development —Research and development costs related to the development of new products or the adaptation of existing products are expensed as incurred, included in cost of sales and totaled $ 3.1 million and $ 3.3 million during the years ended December 31, 2023 and 2022, respectively.

Cash and Cash Equivalents and Restricted Cash —The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

QUAD/GRAPHICS, INC.

1 unchanged sentence

(In millions, except share and per share data and unless otherwise indicated)

Cash and Cash Equivalents and Restricted Cash —The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Receivables —Receivables are stated net of allowances for credit losses.

No single customer comprised more than 5 % of the Company’s consolidated net sales in 2023 or 2022, or 5 % of the Company’s consolidated receivables as of December 31, 2023 or 2022.

In accordance with ASC 326— Financial Instruments — Credit Losses (“ASC 326”), the Company measures expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions and reasonable forecasts.

In accordance with Accounting Standards Codification (“ASC”) 326— Financial Instruments — Credit Losses (“ASC 326”), the Company measures expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions and reasonable forecasts.

See Note 5, “Receivables,” for further discussion on the transactions affecting the allowances for doubtful accounts.

17 unchanged sentences

Impairment of Long-Lived and Other Intangible Assets —The Company evaluates long-lived assets and other intangible assets (of which the most significant are property, plant and equipment;

right-of-use assets and customer relationship intangible assets) whenever events and circumstances have occurred that indicate the carrying value of an asset may not be recoverable.

right-of-use assets;

and customer relationship intangible assets) whenever events and circumstances have occurred that indicate the carrying value of an asset may not be recoverable.

Determining whether impairment has occurred typically requires various estimates and assumptions, including determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount and the asset’s residual value, if any.

1 unchanged sentence

If impairment is determined to exist, any related impairment loss is calculated based on the difference in the fair value and carrying value of the asset.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Goodwill —Goodwill is reviewed annually for impairment as of October 31, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying value.

3 unchanged sentences

See Note 4, “Goodwill and Other Intangible Assets,” for further discussion.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Workers’ Compensation —The Company is self-insured for a significant portion of its expected workers’ compensation program.

51 unchanged sentences

(In millions, except share and per share data and unless otherwise indicated)

COVID-19 Pandemic Impacts and Response— Throughout the COVID-19 pandemic, the Company implemented cost reduction and cash conservation initiatives in response to the pandemic’s adverse impact on its business, financial condition, cash flows, results of operations, supply chain and raw materials availability.

With ongoing advancements against the COVID-19 pandemic, the effects on the Company have lessened from previous periods, particularly from the heavily impacted year of 2020.

The COVID-19 pandemic weakened demand for the Company’s products and services, disrupted the Company’s supply chain and resulted in rising inflationary cost and labor pressures, distribution challenges, recessionary concerns and other evolving macroeconomic conditions.

The Company continues to evaluate the current economic environment and may implement additional cost reduction measures as necessary.

Supplemental Cash Flow Information —The following table summarizes certain supplemental cash flow information for the years ended December 31, 2023 and 2022:

4 unchanged sentences

Non-cash operating lease additions 18.9 17.6

Acquisition of a business:

Acquisitions of businesses:

Fair value of assets acquired 0.2 5.0

Liabilities assumed ( 15.3 ) ( 2.4 )

Acquisition of a business $ 2.6 $ —

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Goodwill 16.6 —

Acquisitions of businesses $ 1.5 $ 2.6

Revenue Recognition

21 unchanged sentences

Total Net Sales $ 2,794.7 $ 422.3 $ 3,217.0

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Nature of Products and Services

3 unchanged sentences

The services offering also includes revenues related to the Company’s marketing services operations, which include data and analytics, technology solutions, media services, creative and content solutions, managed services and execution in non-print channels (e.g., digital and broadcast), as well as medical services.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Performance Obligations

19 unchanged sentences

In these cases, the Company is acting as an agent and billings are recorded on a net basis in net sales.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Significant Payment Terms

4 unchanged sentences

As such, when the timing of the Company’s delivery of products and services differs from the timing of payment, the Company will record either a contract asset or a contract liability.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Variable Consideration

6 unchanged sentences

Costs to Obtain Contracts

In accordance with ASC 606 — Revenue from Contracts with Customers (“ASC 606”), the Company capitalizes certain sales incentives of the sales compensation packages for costs that are directly attributed to being awarded a client contract or renewal and would not have been incurred had the contract not been obtained.

The Company also defers certain contract acquisition costs paid to the client at contract inception.

In accordance with ASC 606 — Revenue from Contracts with Customers (“ASC 606”), the Company defers certain contract acquisition costs paid to the client at contract inception.

The Company also capitalizes certain sales incentives of the sales compensation packages for costs that are directly attributed to being awarded a client contract or renewal and would not have been incurred had the contract not been obtained.

Costs to obtain contracts with a duration of less than one year are expensed as incurred.

13 unchanged sentences

The Company had no volume commitments in contracts that extend beyond one year as of December 31, 2023.

• The Company expenses costs to obtain contracts as incurred when the contract duration is less than one year.

• The transaction amount is not adjusted for a significant financing component as the period between transfer of the products or services and payment is less than one year.

• The Company accounts for shipping and handling activities, which includes postage, that occur after control of the related products or services transfers to the customer as fulfillment activities and are therefore recognized at time of shipping.

QUAD/GRAPHICS, INC.

1 unchanged sentence

(In millions, except share and per share data and unless otherwise indicated)

• The Company expenses costs to obtain contracts as incurred when the contract duration is less than one year.

• The transaction amount is not adjusted for a significant financing component as the period between transfer of the products or services and payment is less than one year.

• The Company excludes from its transaction price any amounts collected from customers for sales taxes.

14 unchanged sentences

• Integration costs are incurred primarily for the integration of acquired companies.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

• Other restructuring charges are presented net of the gains or losses on the sale of facilities and businesses.

During the year ended December 31, 2021, the Company recognized gains from the sale of the facilities located in Riverside, California, Oklahoma City, Oklahoma, and Fernley, Nevada.

The Company also recognized a $ 20.9 million gain on the sale of a business and a $ 2.7 million gain from the reclassification of foreign currency translation adjustments during the year ended December 31, 2021, which are included within other restructuring activities below.

During the year ended December 31, 2023, the Company recognized a gain from the sale of the facility located in Merced, California.

The components of other restructuring charges consisted of the following during the years ended December 31, 2023 and 2022:

2 unchanged sentences

Equipment and infrastructure removal costs 0.9 0.7

Gains on the sale of facilities — ( 24.8 )

Gain on the sale of a facility ( 9.2 ) —

Loss on the sale of Argentina print business — 23.1

1 unchanged sentence

Other restructuring charges $ 12.0 $ 32.6

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The restructuring charges recorded were based on plans that have been committed to by management and were, in part, based upon management’s best estimates of future events.

2 unchanged sentences

Impairment Charges

The Company recognized impairment charges of $ 2.2 million during the year ended December 31, 2022, primarily for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction and strategic divestiture activities.

The Company recognized impairment charges of $ 34.9 million during the year ended December 31, 2021, which consisted of $ 2.8 million for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction and strategic divestiture activities, including $ 32.1 million of impairment charges related to the Company’s investment in Plural, which was sold in January 2022.

The Company recognized impairment charges of $ 25.2 million during the year ended December 31, 2023, which consisted of $ 17.5 million for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities, $ 4.1 million for software licensing and related implementation costs from a terminated project and $ 3.6 million for right-of-use assets.

The fair values of the impaired assets were determined by the Company to be Level 3 under the fair value hierarchy (see Note 13, “Financial Instruments and Fair Value Measurements,” for the definition of Level 3 inputs) and were estimated based on broker quotes, internal expertise related to current marketplace conditions and estimated future discounted cash flows.

4 unchanged sentences

Transaction-related charges of $ 4.2 million and $ 2.0 million were recorded during the years ended December 31, 2023 and 2022, respectively.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Restructuring Reserves

2 unchanged sentences

Charges Transaction-Related

Charges (Income) Integration

Charges Integration

Restructuring

1 unchanged sentence

Balance at January 1, 2022 $ 4.7 $ — $ 0.4 $ — $ 50.2 $ 55.3

Expense (income), net 9.9 34.9 0.6 — ( 26.5 ) 18.9

Expense, net 7.3 2.2 2.0 0.7 32.6 44.8

Cash payments, net ( 4.1 ) — ( 0.9 ) ( 0.7 ) ( 15.7 ) ( 21.4 )

5 unchanged sentences

Balance at December 31, 2023 $ 17.6 $ — $ 2.5 $ — $ 11.8 $ 31.9

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The Company’s restructuring reserves at December 31, 2023, included a short-term and a long-term component.

4 unchanged sentences

Goodwill is assigned to specific reporting units and is tested annually for impairment as of October 31, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying value.

Due to the Company’s decision to sell its third-party logistics business on June 30, 2021, goodwill included in the carrying amount of the third-party logistics business sold of $ 16.6 million was determined based on the relative fair value of the third-party logistics business and the portion of the Core Print and Related Services reporting unit retained.

When only a portion of goodwill is allocated to a business to be sold, an interim goodwill impairment test was completed on the remaining $ 86.4 million of goodwill in the Core Print and Related Services reporting unit.

No impairment was recorded as a result of the 2021 interim impairment test.

The Company completed its annual impairment test as of October 31, 2023, and identified no indicators of impairment in any of the Company's reporting units during the year ended December 31, 2023.

3 unchanged sentences

This fair value determination was categorized as Level 3 in the fair value hierarchy (see Note 13, “Financial Instruments and Fair Value Measurements,” for the definition of Level 3 inputs).

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

No goodwill impairment charges were recorded during the years ended December 31, 2023 or 2022.

The accumulated goodwill impairment losses and the carrying value of goodwill at December 31, 2023 and 2022, were as follows:

United States Print and Related Services International Total

December 31, 2023 December 31, 2022

United States Print and Related Services International Total United States Print and Related Services International Total

Goodwill $ 881.3 $ 30.0 $ 911.3 $ 864.7 $ 30.0 $ 894.7

1 unchanged sentence

Goodwill, net of accumulated goodwill impairment loss $ 103.0 $ — $ 103.0 $ 86.4 $ — $ 86.4

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

There was no activity impacting goodwill for the year ended December 31, 2022.

Activity impacting goodwill for the year ended December 31, 2023, was as follows:

2 unchanged sentences

Balance at January 1, 2023 $ 86.4 $ — $ 86.4

Sale of third-party logistics business ( 16.6 ) — ( 16.6 )

Acquisition of a business 16.6 — 16.6

Balance at December 31, 2023 $ 103.0 $ — $ 103.0

In December 2023, the Company completed the acquisition of DART Innovation, an in-store digital media solutions provider.

The acquisition expands and integrates into the Company’s suite of products and services, enabling brands and marketers to more effectively reach consumers.

As of December 31, 2023, the preliminary purchase price includes $ 16.6 million of goodwill.

There was no activity impacting goodwill for the year ended December 31, 2022.

Other Intangible Assets

11 unchanged sentences

Total finite-lived intangible assets $ 646.2 $ ( 624.4 ) $ 21.8 $ 652.2 $ ( 605.3 ) $ 46.9

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Other intangible assets are evaluated for potential impairment whenever events or circumstances indicate that the carrying value may not be recoverable.

3 unchanged sentences

Amortization Expense

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

2028 and Thereafter 0.3

Prior to granting credit, the Company evaluates each client in an underwriting process, taking into consideration the prospective client’s financial condition, past payment experience, credit bureau information and other financial and qualitative factors that may affect the client’s ability to pay.

12 unchanged sentences

Balance at December 31, $ 25.7 $ 26.4

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The components of inventories at December 31, 2023 and 2022, were as follows:

3 unchanged sentences

Total $ 178.8 $ 260.7

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Property, Plant and Equipment

9 unchanged sentences

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

The Company recorded impairment charges of $ 2.2 million and $ 2.8 million during the years ended December 31, 2022 and 2021, respectively, to reduce the carrying amounts of certain property, plant and equipment no longer utilized in production, or due to other capacity reduction and strategic divestiture activities, to fair value (see Note 3, “Restructuring, Impairment and Transaction-Related Charges,” for further discussion on impairment charges).

The Company recorded impairment charges of $ 17.5 million and $ 2.2 million during the years ended December 31, 2023 and 2022, respectively, to reduce the carrying amounts of certain property, plant and equipment no longer utilized in production, or due to other capacity reduction, to fair value (see Note 3, “Restructuring, Impairment and Transaction-Related Charges,” for further discussion on impairment charges).

The Company recognized depreciation expense of $ 100.9 million and $ 110.4 million for the years ended December 31, 2023 and 2022, respectively.

Gains from Sale and Leaseback

On June 29, 2021, the Company executed a sale and leaseback of its Chalfont, Pennsylvania facility for net proceeds of $ 20.0 million, which resulted in a $ 13.7 million gain.

The leaseback is for a term of seven years and was determined to be an operating lease.

As of December 31, 2022, the leaseback consisted of an $ 8.2 million asset included in the operating lease right of use assets - net, current operating lease obligation of $ 1.3 million and operating lease obligation of $ 7.1 million in the consolidated balance sheet.

On September 28, 2021, the Company executed a sale and leaseback of its West Allis, Wisconsin facility for net proceeds of $ 31.9 million, which resulted in a $ 10.8 million gain.

The leaseback is for a term of ten years and was determined to be an operating lease.

As of December 31, 2022, the leaseback consisted of a $ 20.8 million asset included in the operating lease right of use assets - net, current operating lease obligation of $ 1.8 million and operating lease obligation of $ 19.3 million in the consolidated balance sheet.

QUAD/GRAPHICS, INC.

15 unchanged sentences

Interest and rent liabilities 0.7 — 0.7 0.4 — 0.4

Interest rate swap liabilities — — — 0.7 4.4 5.1

Other 38.1 28.1 66.2 49.4 14.5 63.9

21 unchanged sentences

Revolving credit facility 7.57 % — —

Senior unsecured notes 7.00 % — 211.5

International term loans 17.63 % 1.8 5.2

International revolving credit facilities 6.28 % 3.7 8.4

Other — % — 1.4

Debt issuance costs ( 4.9 ) ( 6.9 )

13 unchanged sentences

The Senior Secured Credit Facility was amended to (a) reduce the aggregate amount of the existing revolving credit facility from $ 500.0 million to $ 432.5 million, and extend the maturity of a portion of the revolving credit facility such that $ 90.0 million under the revolving credit facility is due on the existing maturity date of January 31, 2024 (the “Existing Maturity Date”) and $ 342.5 million under the revolving credit facility is due on November 2, 2026 (the “Extended Maturity Date”);

(b) extend the maturity of a portion of the existing term loan facility such that $ 91.5 million of such term loan facility is due on the Existing Maturity Date and $ 483.9 million is due on the Extended Maturity Date;

(b) extend the maturity of a portion of the existing term loan facility such that $ 91.5 million (of which a principal payment of $ 87.7 million was due upon maturity on January 31, 2024) of such term loan facility is due on the Existing Maturity Date and $ 483.9 million is due on the Extended Maturity Date;

(c) make certain adjustments to pricing, including an increase of 0.50 % to the interest rate margin applicable to the loans maturing on the Extended Maturity Date;

4 unchanged sentences

(In millions, except share and per share data and unless otherwise indicated)

Borrowings under the revolving credit facility and Term Loan A made under the Senior Secured Credit Facility bear interest at 2.75 % in excess of reserve adjusted LIBOR, or 1.75 % in excess of an alternate base rate with a LIBOR floor of 0.75 % for the extended tranche and bear interest at 2.50 % in excess of reserve adjusted LIBOR, or 1.50 % in excess of an alternate base rate with a LIBOR floor of 0.75 % for the non-extending tranche.

The Company completed the sixth amendment to the Senior Secured Credit Facility on March 25, 2022, which expanded the number of currencies available for letters of credit.

The Company completed the seventh amendment to the Senior Secured Credit Facility on January 24, 2023, which transitioned the Company’s reference rate from LIBOR to SOFR effective February 1, 2023.

The Company elected the practical expedient outlined in ASU 2020-04 and ASU 2021-01 which allowed the Company to prospectively adjust the effective interest rate after the reference rate change.

The transition from LIBOR to SOFR did not have a material impact on the condensed consolidated financial statements.

The Company completed the eighth amendment to the Senior Secured Credit Facility on January 4, 2024, which added an additional $ 25.0 million principal value to the Term Loan A (under the Extended Maturity Date).

On January 31, 2024, the Company used liquidity available under its revolving credit facility and available cash on hand to fund the repayment on maturity of $ 87.7 million aggregate principal amount, outstanding at the time, of its Term Loan A.

Additionally, due to a portion of the revolving credit facility maturing on January 31, 2024, the total capacity under the revolving credit facility was reduced to $ 342.5 million as of this date.

Borrowings under the revolving credit facility and Term Loan A made under the Senior Secured Credit Facility bear interest at 2.75 % in excess of reserve adjusted SOFR, or 1.75 % in excess of an alternate base rate with a SOFR floor of 0.75 % for the extended tranche and bear interest at 2.50 % in excess of reserve adjusted SOFR, or 1.50 % in excess of an alternate base rate with a SOFR floor of 0.75 % for the non-extending tranche.

At December 31, 2023, the Company had no outstanding borrowings on the revolving credit facility, and had $ 31.1 million of issued letters of credit, leaving up to $ 401.4 million available for future borrowings.

The amount available for future borrowings is reduced to $ 353.8 million under the Company’s most restrictive debt covenants.

The Senior Secured Credit Facility is secured by substantially all of the unencumbered assets of the Company.

The Senior Secured Credit Facility also requires the Company to provide additional collateral to the lend ers in certain limited circumstances.

The Company completed the sixth amendment to the Senior Secured Credit Facility on March 25, 2022, which expanded the number of currencies available for letters of credit.

The Company completed the seventh amendment to the Senior Secured Credit Facility on January 24, 2023, which transitioned the Company’s reference rate from LIBOR to SOFR effective February 1, 2023.

The transition from LIBOR to SOFR does not have a material impact on the consolidated financial statements.

Senior Unsecured Notes

1 unchanged sentence

During the first quarter of 2022, the Company repurchased $ 2.4 million of its outstanding Senior Unsecured Notes in the open market.

During the year ended December 31, 2021, the Company repurchased $ 27.2 million of its outstanding Senior Unsecured Notes in the open market, resulting in a net loss on debt extinguishment of $ 0.5 million.

All repurchased Senior Unsecured Notes were canceled.

3 unchanged sentences

International Debt Obligations

The Company has two fixed rate, Euro denominated, international term loans for purposes of financing certain capital expenditures and general business needs.

The first international term loan in the amount of $ 21.7 million was entered into on December 28, 2015, was fully funded during 2016 with a term of six years , and matured on December 28, 2021.

The second international term loan in the amount of $ 12.8 million was entered into on December 21, 2018, bears interest at 1.96 % and has a term of five years , maturing on December 31, 2023.

As of December 31, 2022, $ 2.5 million remained outstanding on the second international term loan.

In addition, there are $ 2.7 million of term loans in Colombia and Peru.

The Company had one fixed rate, Euro denominated, international term loan for purposes of financing certain capital expenditures and general business needs.

The international term loan in the amount of $ 12.8 million was entered into on December 21, 2018, at a 1.96 % interest rate, with a term of five years , and matured on December 31, 2023.

In addition, as of December 31, 2023, there is $ 1.8 million outstanding on a term loan in Colombia.

QUAD/GRAPHICS, INC.

5 unchanged sentences

The first multicurrency international revolving credit facility expires on October 29, 2024, and bears interest at the aggregate of the Warsaw Interbank Offered Rate (“WIBOR”) plus 1.40 % for any Polish Zloty denominated borrowings, the aggregate of Euro Interbank Offered Rate (“EURIBOR”) plus 1.45 % for any Euro denominated borrowings or the aggregate of British pound sterling LIBOR plus 1.45 % for any British pound sterling denominate borrowings.

The second multicurrency international revolving credit facility expires on December 15, 2023, and bears interest at the aggregate of WIBOR plus 1.00 % for any Polish Zloty denominated borrowings or the aggregate of EURIBOR plus 1.00 % for any Euro denominated borrowings.

The second multicurrency international revolving credit facility expires on January 14, 2025, and bears interest at the aggregate of WIBOR plus 1.00 % for any Polish Zloty denominated borrowings or the aggregate of EURIBOR plus 1.00 % for any Euro denominated borrowings.

Fair Value of Debt

8 unchanged sentences

Balance at January 1, 2022 $ 9.1

Debt issuance costs from November 2, 2021 debt financing arrangement 5.2

Write off of debt issuance costs from Term Loan A pre-payments ( 0.4 )

Amortization expense ( 2.2 )

2 unchanged sentences

Balance at December 31, 2023 $ 4.9

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Loss on Debt Extinguishment

2021 Loss on Debt Extinguishment

The loss on debt extinguishment recorded during the year ended December 31, 2021, was comprised of the following:

2021 Loss on Debt Extinguishment

Debt issuance costs from November 2, 2021 debt financing arrangement 0.2

Loss on debt extinguishment from Senior Unsecured Note Repurchases 0.5

Covenants and Compliance

3 unchanged sentences

On a rolling twelve-month basis, the Total Leverage Ratio, defined as consolidated total indebtedness to consolidated EBITDA, shall not exce ed 3.75 to 1.00 (for the twelve months ended December 31, 2023, the Company’s Total Leverage Ratio was 2.18 to 1.00).

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

• Liquidity, defined as unrestricted cash and permitted investments of the Company and its subsidiaries (subject to certain conditions) plus the aggregate amount of the unused revolving credit facility commitments, shall not be less than $ 181.6 million at any time during the period commencing December 15, 2023 and ending when all obligations owed under the Senio r Secured Credit Facility to lenders that are not extending lenders are paid in full.

4 unchanged sentences

On a rolling twelve-month basis, the Interest Coverage Ratio, defined as consolidated EBITDA to cash consolidated interest expense, shall not be less than 3.00 to 1.00 (for the twelve months ended December 31, 2023, the Company’s Interest Coverage Ratio was 4.10 to 1.00).

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

In addition to those covenants, the Senior Secured Credit Facility also includes certain limitations on acquisitions, indebtedness, liens, dividends and repurchases of capital stock.

6 unchanged sentences

The limitations described above are currently not applicable, as the Company’s Senior Secured Leverage Ratio was 1.99 to 1.00 and Total Net Leverage Ratio was 1.99 to 1.00, as of December 31, 2023 .

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Estimated Principal Payments

2 unchanged sentences

Total $ 519.1

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The Company determines if an arrangement is or contains a lease at contract inception.

13 unchanged sentences

Amortization of the ROU asset is recognized and presented separately from interest expense on the lease liability.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The Company’s ROU assets for both operating and finance leases are reviewed for impairment losses on a quarterly basis in line with ASC 360-10 — Property, Plant, and Equipment — Overall.

The Company has not recognized any impairment losses to date.

The Company recorded impairment charges of $ 3.6 million for the year ended December 31, 2023 to reduce the carrying value of certain ROU assets.

There was no ROU impairment recorded for the year ended December 31, 2022.

The Company also monitors its leases for events or changes in circumstances that require a reassessment of the lease.

2 unchanged sentences

Finance leases are included in property and equipment—net, current portion of finance lease obligations, and finance lease obligations in the consolidated balance sheets.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have an original lease term of twelve months or less.

58 unchanged sentences

Long-term lease liability $ 77.2 $ 6.0

Income taxes have been based on the following components of earnings before income taxes and equity in earnings of unconsolidated entity for the years ended December 31, 2022 and 2021:

Income taxes have been based on the following components of earnings (loss) before income taxes for the years ended December 31, 2023 and 2022:

United States $ ( 65.8 ) $ ( 13.9 )

14 unchanged sentences

Federal statutory rate $ ( 8.9 ) $ 3.7

Loss on the sale of Argentina print business ( 5.1 ) —

Adjustment of uncertain tax positions and audit assessments 10.4 ( 0.3 )

Adjustment to valuation allowances 4.7 3.1

Executive compensation limitation 2.3 2.9

Foreign rate differential 2.0 —

Other permanent tax differences 1.4 —

Credits ( 1.2 ) ( 1.5 )

Impact from foreign branches 0.6 1.9

Adjustment of deferred tax liabilities 0.3 1.5

Credits ( 1.5 ) —

State taxes, net of federal benefit 0.3 1.1

Adjustment of uncertain tax positions ( 0.3 ) 0.2

Impairment on investment in Plural — 6.2

Foreign rate differential — ( 1.9 )

Loss on the sale of Argentina print business — ( 5.1 )

Other 0.9 1.1

Income tax expense $ 12.8 $ 8.4

The $ 4.7 million adjustment to valuation allowance in 2023 primarily relates to adjusting reserves related to deferred tax assets for interest limitation, credits and other deferred tax assets that are not expected to be realized in the future for federal income tax purposes.

The $ 3.1 million adjustment to valuation allowance in 2022 primarily relates to increasing reserves related to deferred tax assets for credits and interest limitation that are not expected to be realized in the future for federal income tax purposes.

The $ 17.1 million adjustment to valuation allowance in 2021 primarily relates to releasing reserves related to deferred tax assets for net operating losses and interest limitation.

The $ 0.3 million effective rate reconciling item for State taxes, net of federal benefit, in 2023 includes a $ 3.1 million adjustment for partial release of valuation allowance reserves.

9 unchanged sentences

Pension and workers compensation benefits 23.0 23.9

Interest limitation 12.8 11.5

Accrued liabilities 13.3 9.4

Research or experimental expenditures 12.6 8.0

Interest limitation 11.3 12.8

Accrued compensation 6.0 7.6

8 unchanged sentences

Total deferred tax liabilities ( 79.3 ) ( 92.9 )

Net deferred tax assets (liabilities) $ 2.2 $ ( 0.1 )

Net deferred tax assets $ 7.3 $ 2.2

The Company has recorded deferred income tax liabilities of $ 5.1 million and $ 9.3 million as of December 31, 2023 and 2022, respectively, which were included in deferred income taxes in the consolidated balance sheets.

1 unchanged sentence

At December 31, 2023, the Company had the following gross amounts of tax-related carryforwards:

• Net operating loss carryforwards of $ 3.8 million, $ 32.6 million and $ 567.9 million for federal, foreign and state, respectively.

The federal net operating loss carryforward was generated in 2020 and is available without expiration.

• Net operating loss carryforwards of $ 27.9 million and $ 516.5 million for foreign and state, respectively.

Of the foreign net operating loss carryforwards, $ 8.7 million is available without expiration, while the remainder expires through 2043.

15 unchanged sentences

As of December 31, 2023, $ 5.3 million of unrecognized tax benefits would impact the Company’s effective tax rate, if recognized.

Of that amount, it is reasonably possible that $ 4.4 million of the total amount of unrecognized tax benefits will decrease within the next twelve months due to resolution of income tax audits or statute expirations.

The Company classified interest income and any related refunds related to income tax uncertainties as a component of income tax expense.

It is reasonably possible that $ 6.7 million of the total amount of unrecognized tax benefits will decrease within the next twelve months due to resolution of income tax audits or statute expirations.

The Company classified interest expense (income) and any related penalties (refunds) related to income tax uncertainties as a component of income tax expense.

The following table summarizes the Company’s interest income related to tax uncertainties and refunds recognized during the years ended December 31, 2023 and 2022:

Interest income $ ( 0.1 ) $ ( 0.5 )

Refunds — ( 0.1 )

Interest expense (income) $ 3.3 $ ( 0.1 )

Penalties (refunds) 1.6 —

Accrued interest and penalties related to income tax uncertainties are reported as components of other current liabilities and other long-term liabilities in the consolidated balance sheets.

7 unchanged sentences

Tax years from 2013 through 2023 remain open and subject to examination in the Company’s various major state jurisdictions within the United States.

Tax years 2011 and 2016 through 2023 remain open and subject to examination or litigation in the Company’s major foreign jurisdictions.

QUAD/GRAPHICS, INC.

5 unchanged sentences

The Company does not have significant prior year untaxed, undistributed earnings from its foreign operations at December 31, 2023, and the Company does not provide for, nor expect to incur, any significant, additional taxes which could become payable upon repatriation of such amounts.

Reform of International Taxation

The Organization for Economic Co-operation and Development’s reform of international taxation known as Pillar Two Global Anti-Base Erosion Rules is effective for the Company starting in 2024.

The Company is closely monitoring developments and evaluating the impacts that the new Pillar 2 minimum tax may have on its tax rate, including eligibility to qualify for safe harbor rules that would eliminate or reduce the Pillar 2 minimum tax.

Based upon preliminary calculations for calendar year 2024, the Company anticipates it will meet the safe harbor rules in most jurisdictions, and any remaining tax under Pillar 2 should be immaterial.

Financial Instruments and Fair Value Measurements

6 unchanged sentences

There we re no Level 3 recurring measurements of assets or liabilities as of December 31, 2023.

Interest Rate Swaps

The Company currently holds one active interest rate swap contract.

Another previously held interest rate swap, effective on February 28, 2017, terminated on February 28, 2022.

The purpose of entering into the contracts was to reduce the variability of cash flows from interest payments related to a portion of Quad’s variable-rate debt.

The interest rate swaps were previously designated as cash flow hedges as they effectively converted the notional value of the Company’s variable rate debt based on one-month LIBOR to a fixed rate, including a spread on underlying debt, and a monthly reset in the variable interest rate.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Interest Rate Swap

The Company currently holds one interest rate swap contract.

The purpose of entering into the contract was to reduce the variability of cash flows from interest payments related to a portion of Quad’s variable-rate debt.

The interest rate swap was previously designated as cash flow hedges as it effectively converted the notional value of the Company’s variable rate debt based on one-month LIBOR to a fixed rate, including a spread on underlying debt, and a monthly reset in the variable interest rate.

However, the Company amended its Senior Secured Credit Facility during the second quarter of 2020, which added a 0.75 % LIBOR floor to the Company’s variable rate debt, changing the critical terms of the hedged instrument.

Due to this change in critical terms, the Company has elected to de-designate the swaps as cash flow hedges, resulting in future changes in fair value being recognized in interest expense.

The balance of the accumulated other comprehensive loss attributable to the interest rate swaps as of June 30, 2020 was then amortized to interest expense on a straight-line basis over the remaining lives of the swap contracts.

The Company expects to reclassify $ 2.7 million of this balance to interest expense over the next twelve months.

Due to this change in critical terms, the Company elected to de-designate the swap as a cash flow hedge, resulting in future changes in fair value being recognized in interest expense.

The balance of the accumulated other comprehensive loss attributable to the interest rate swap as of June 30, 2020 was then amortized to interest expense on a straight-line basis over the remaining lives of the swap contracts.

The Company expects to reclassi fy $ 0.7 million of this balance to interest expense over the next twelve months.

Due to the Company’s transition from LIBOR to SOFR during the first quarter of 2023, the interest rate swap’s fixed swap rate was amended to be based on one-month term SOFR.

March 19, 2019

4 unchanged sentences

Fixed swap rate 2.40 %

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The Company classifies interest rate swaps as Level 2 because the inputs into the valuation model are observable or can be derived or corroborated utilizing observable market data at commonly quoted intervals.

2 unchanged sentences

Interest rate swap assets Prepaid expenses and other current assets $ 0.9 $ 3.8

Interest rate swap liabilities Other current liabilities — ( 0.7 )

Interest rate swap liabilities Other long-term liabilities — ( 4.4 )

Prior to the Company’s de-designation of the interest rate swaps as a cash flow hedge, the interest rate swaps were considered highly effective, with no a mount of ineffectiveness recorded into earnings.

The change in the fair value of the interest rate swaps are recorded as an adjustment to interest expense in the consolidated statements of operations.

The cash flows associated with the interest rate swaps have been recognized as an adjustment to interest expense in the consolidated statements of operations:

Prior to the Company’s de-designation of the interest rate swap as a cash flow hedge, the interest rate swap was considered highly effective, with no a mount of ineffectiveness recorded into earnings.

The change in the fair value of the interest rate swap is recorded as an adjustment to interest expense in the consolidated statements of operations.

The cash flows associated with the interest rate swap have been recognized as an adjustment to interest expense in the consolidated statements of operations:

Year Ended December 31,

Cash Flow Impacts

Net interest paid $ 1.7 $ 7.6

Net interest paid (received) $ ( 3.4 ) $ 1.7

Impacts with Swaps as Nonhedging Instruments

Income recognized in interest expense excluded from hedge effectiveness assessments $ ( 9.0 ) $ ( 9.3 )

(Income) loss recognized in interest expense excluded from hedge effectiveness assessments $ 2.9 $ ( 9.0 )

Amounts reclassified out of accumulated other comprehensive loss to interest expense 2.7 3.4

1 unchanged sentence

Total impact of swaps to interest expense $ 2.2 $ ( 3.9 )

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Interest Rate Collars

12 unchanged sentences

Ceiling Rate 5.00 % 5.00 %

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The Company classifies interest rate collars as Level 2 because the inputs into the valuation model are observable or can be derived or corroborated utilizing observable market data at commonly quoted intervals.

The fair value of the interest rate collars classified as Level 2 as of December 31, 2023 and 2022, were as follows:

Balance Sheet Location December 31, 2023 December 31, 2022

Interest rate collar liabilities Other long-term liabilities ( 0.2 ) —

The interest rate collars were highly effective as of December 31, 2023.

No amount of ineffectiveness has been recorded into earnings related to these cash flow hedges.

The cash flows associated with the interest rate collars have been recognized as an adjustment to interest expense in the condensed consolidated statements of operations, and t he changes in the fair value of the interest rate collars have been included in other comprehensive income (loss) in the condensed consolidated statements of comprehensive income (loss):

Year Ended December 31,

Net interest received $ ( 0.2 ) $ —

Gain recognized in other comprehensive income (loss) $ ( 0.2 ) $ —

Foreign Exchange Contracts

2 unchanged sentences

Gains or losses on net foreign currency hedges are intended to offset losses or gains on the underlying net exposures in an effort to reduce the earnings volatility resulting from fluctuating foreign currency exchange rates.

As of December 31, 2022, there were six open foreign currency exchange contracts designated as cash flow hedges, with a total notional value of $ 7.7 million .

As of December 31, 2023, there were no open foreign currency exchange contracts designated as cash flow hedges.

Natural Gas Forward Contracts

1 unchanged sentence

The Company’s commodity contracts qualified for the exception related to normal purchases and sales during the years ended December 31, 2023 and 2022, as the Company takes delivery in the normal course of business.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

The Company measures fair value on its debt instruments using interest rates available to the Company for borrowings with similar terms and maturities and is categorized as Level 2.

See Note 10, “Debt,” for the fair value of the Company’s debt as of December 31, 2023 and 2022.

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company is required to record certain assets and liabilities at fair value on a nonrecurring basis, generally as a result of acquisitions or the remeasurement of assets resulting in impairment charges, which are categorized as Level 3.

Other Estimated Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company is required to record certain assets and liabilities at fair value on a nonrecurring basis, generally as a result of acquisitions or the remeasurement of assets that may result in impairment charges, which are categorized as Level 3.

See Note 3, “Restructuring, Impairment and Transaction-Related Charges”;

Note 4, “Goodwill and Other Intangible Assets”;

and Note 7, “Property, Plant and Equipment” for further discussion on impairment charges recorded as a result of the remeasurement of certain long-lived assets.

Other Estimated Fair Value Measurements

Note 7, “Property, Plant and Equipment”;

and Note 11, “Leases” for further discussion on fair value remeasurements.

See Note 3, “Restructuring, Impairment and Transaction-Related Charges” for impairment charges recorded as a result of the remeasurement of certain long-lived assets.

The Company records the fair value of its forward contracts and pension plan assets on a recurring basis.

1 unchanged sentence

See Note 14, “Employee Retirement Plans,” for the details of Level 1 and Level 2 inputs related to employee retirement plans.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Employee Retirement Plans

3 unchanged sentences

Company 401(k) matching contributions were $ 16.1 million and $ 16.8 million for the years ended December 31, 2023 and 2022, respectively.

The Company’s ESOP holds profit sharing contributions of Company stock, which are made at the discretion of the Company’s Board of Directors.

The Company’s Employee Stock Ownership Plan holds profit sharing contributions of Company stock, which are made at the discretion of the Company’s Board of Directors.

There were no profit sharing contributions for the years ended December 31, 2023 and 2022.

8 unchanged sentences

Expected return on plan assets 19.9 22.3

Net periodic pension income 12.6 15.4

Settlement charge — ( 0.9 )

Amortization of actuarial loss ( 0.6 ) —

Net pension income $ 1.7 $ 12.6

The Company made $ 1.0 million in benefit payments to its non-qualified defined benefit pension plans and made no contributions to its qualified defined benefit pension plans during the year ended December 31, 2022.

The Company incurred non-cash settlement charges of $ 0.9 million during the year ended December 31, 2021 due to the significance of lump sum payments made in 2021.

The non-cash settlement charges result in accelerated recognition of actuarial losses on the consolidated statement of operations.

QUAD/GRAPHICS, INC.

1 unchanged sentence

(In millions, except share and per share data and unless otherwise indicated)

The Company made $ 0.7 million in benefit payments to its non-qualified defined benefit pension plans and made no contributions to its qualified defined benefit pension plans during the year ended December 31, 2023.

The underfunded pension obligations are calculated using generally accepted actuarial methods and are measured annually as of December 31.

The following table provides a reconciliation of the projected benefit obligation, fair value of plan assets and the funded status of the pension plans as of December 31, 2022 and 2021:

The following table provides a reconciliation of the projected benefit obligation, fair value of plan assets and the underfunded status of the pension plans as of December 31, 2023 and 2022:

Pension Benefits

2 unchanged sentences

Interest cost ( 17.6 ) ( 9.7 )

Actuarial gain 86.1 23.1

Actuarial gain (loss) ( 12.4 ) 86.1

Benefits paid 36.6 37.0

Liability benefit from settlement — 1.1

Projected benefit obligation, end of year ( 342.7 ) ( 349.3 )

1 unchanged sentence

Fair value of plan assets, beginning of year 313.0 443.5

Actual return on plan assets ( 94.5 ) 20.4

Actual gain (loss) on plan assets 26.2 ( 94.5 )

Employer contributions 0.7 1.0

1 unchanged sentence

Fair value of plan assets, end of year 303.3 313.0

Funded status $ ( 36.3 ) $ ( 19.2 )

The net underfunded defined benefit plan obligations increased by $ 17.1 million during the year ended December 31, 2022.

This increase was primarily due to an overall decrease in pension plan assets due to a negative actual return on pension plan assets of ( 21.76 )% during the year ended December 31, 2022, which was below the expected return on plan assets assumption of 5.25 %.

This decrease in plan assets was partially offset by a decrease in overall pension obligations due to a 269 basis point increase in the pension discount rate from 2.77 % at December 31, 2021, to 5.46 % at December 31, 2022 and $ 1.0 million of benefit payments.

Underfunded status $ ( 39.4 ) $ ( 36.3 )

The underfunded defined benefit plan obligations increased by $ 3.1 million during the year ended December 31, 2023.

This increase in the underfunded status was primarily due to an overall decrease of $ 9.7 million in pension plan assets from $ 36.6 million in benefits paid, offset by an actual gain on pension plan assets of $ 26.2 million or 10.67 % during the year ended December 31, 2023, which was above the expected return on plan assets assumption of 6.75 %, and employer contributions of $ 0.7 million.

This decrease in plan assets was partially offset by a decrease in overall pension obligations of $ 6.6 million from $ 36.6 million in benefits paid, offset by a $ 17.6 million increase in interest cost due to a 35 basis point decrease in the pension discount rate from 5.46 % at December 31, 2022, to 5.11 % at December 31, 2023 and $ 12.4 million from an actuarial loss.

Amounts recognized on the consolidated balance sheets as of December 31, 2023 and 2022, were as follows:

10 unchanged sentences

Amount arising during the period ( 30.7 )

Impact of pension plan settlement charge included in net loss 0.9

Balance at December 31, 2022 ( 47.6 )

Amount arising during the period ( 6.0 )

Amortization included in net loss 0.6

Balance at December 31, 2023 $ ( 53.0 )

During 2023, the Company provided the option to receive a lump-sum pension payment to a select group of in-service and terminated vested participants.

Total lump sum payments of $ 8.0 million were paid during 2023, of which $ 2.0 million was paid under the lump-sum program and $ 1.4 million was paid under the in-service withdrawal program in December 2023.

Payments to eligible participants who elected to receive a lump-sum pension payment were funded from existing pension plan assets and constituted a settlement of the Company’s pension liabilities with respect to these participants.

Actuarial gains and losses in excess of 10% of the greater of the projected benefit obligation or the market-related value of plan assets are recognized as a component of net periodic benefit costs over the average remaining service period of a plan’s active employees.

9 unchanged sentences

Estimated Company Contributions and Benefit Payments

In 2023, the Company does no t expect to make any cash contributions to its qualified defined benefit pension plans and expects to make estimated benefit payments of $ 1.5 million to its non-qualified defined benefit pension plans.

In 2024, the Company expects to make cash contributions of $ 4.2 million to its qualified defined benefit pension plans and expects to make estimated benefit payments of $ 1.7 million to its non-qualified defined benefit pension plans.

The actual pension contributions may differ based on the funding calculations, and the Company may choose to make additional discretionary contributions.

95 unchanged sentences

The GCC Plan is a defined benefit plan that provides retirement benefits, disability benefits, and early retirement benefits for the participating union employees of the Company.

The funded status of the GCC Plan is classified as critical based on the GCC Plan’s 2022 certification to the United States Department of Labor, improved from critical and declining status because it received Special Financial Assistance from the Pension Benefit Guaranty Corporation in 2022.

The plan is still projected to become insolvent in 2037.

As a result, the GCC Plan implemented a rehabilitation plan to improve the plan’s funded status.

The funded status of the GCC Plan is classified as critical based on the GCC Plan’s 2023 certification to the Internal Revenue Service.

While the GCC Plan has no projected insolvency for the next 20 years, it will be deemed in critical status through April 30, 2051, regardless of its funded status as a result of having received special financial assistance from the Pension Benefit Guaranty Corporation.

In 2016, the Company and the GCC reached a settlement agreement for all claims, with scheduled payments until February 2024.

1 unchanged sentence

The Company has reserved $ 24.0 million as the total MEPPs withdrawal liability as of December 31, 2023, of which $ 21.5 million was recorded in other long-term liabilities and $ 2.5 million was recorded in other current liabilities in the consolidated balance sheets.

Earnings Per Share

Basic earnings per share is computed as net earnings divided by the basic weighted average common shares outstanding.

The calculation of diluted earnings per share includes the effect of any dilutive equity incentive instruments.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed as net earnings (loss) divided by the basic weighted average common shares outstanding.

The calculation of diluted earnings (loss) per share includes the effect of any dilutive equity incentive instruments.

The Company uses the treasury stock method to calculate the effect of outstanding dilutive equity incentive instruments, which requires the Company to compute total proceeds as the sum of the amount the employee must pay upon exercise of the award and the amount of unearned stock-based compensation costs attributable to future services.

Equity incentive instruments for which the total employee proceeds from exercise exceed the average fair value of the same equity incentive instrument over the period have an anti-dilutive effect on earnings per share during periods with net earnings, and accordingly, the Company excludes them from the calculation.

Anti-dilutive equity instruments excluded from the computation of diluted net earnings per shares were 0.2 million and 0.4 million class A common shares for the year ended December 31, 2022 and 2021, respectively.

Due to the net loss incurred during the year ended December 31, 2023, the assumed exercise of all equity incentive instruments was anti-dilutive and therefore, not included in the diluted loss per share calculation.

Anti-dilutive equity instruments excluded from the computation of diluted net earnings per shares were 0.2 million class A common shares for the year ended December 31, 2022.

QUAD/GRAPHICS, INC.

2 unchanged sentences

Reconciliations of the numerator and the denominator of the basic and diluted per share computations for the Company’s common stock for the years ended December 31, 2023 and 2022, are summarized as follows:

Net earnings $ 9.3 $ 37.8

Net earnings (loss) $ ( 55.4 ) $ 9.3

Basic weighted average number of common shares outstanding for all classes of common stock 48.4 50.7

1 unchanged sentence

Diluted weighted average number of common shares outstanding for all classes of common shares 48.4 52.5

Earnings per share:

Basic $ 0.18 $ 0.74

Diluted $ 0.18 $ 0.71

Earnings (loss) per share:

Basic and Diluted $ ( 1.14 ) $ 0.18

Equity Incentive Programs

29 unchanged sentences

Estimated future compensation expense is $ 4.2 million for 2024, $ 2.4 million for 2025 and $ 0.3 million for 2026.

Stock Options

Options vested over four years, with no vesting in the first year and one-third vesting upon the second, third and fourth anniversary dates.

Options expire no later than the tenth anniversary of the grant date and are not credited with dividend declarations.

Stock options were only to be granted to employees.

There were no stock options granted, and no compensation expense was recognized related to stock options during the years ended December 31, 2022 and 2021.

There is no future compensation expense for stock options granted as of December 31, 2022.

The following table is a summary of the stock option activity for the year ended December 31, 2022:

Option Weighted

Price Weighted

(years) Aggregate

Outstanding and exercisable at December 31, 2021 56,034 $ 14.14 0.0 $ —

Exercised — —

Canceled/forfeited/expired ( 56,034 ) 14.14

Outstanding and exercisable at December 31, 2022 — $ — 0.0 $ —

The intrinsic value of options outstanding and exercisable as of December 31, 2021 was based on the fair value of the stock price.

There were no stock options exercised for the years ended December 31, 2022 and 2021.

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Restricted Stock and Restricted Stock Units

19 unchanged sentences

Nonvested at December 31, 2023 3,990,018 $ 4.01 1.4 147,980 $ 4.00 1.4

In the first quarter of 2019, the Company issued RSU awards in connection with the acquisition of Periscope, Inc.

that were accounted for as liability awards and vested on March 1, 2022.

The awards were recorded at fair value on the initial issuance date and were remeasured to fair value at each reporting period, with the change in fair value being recorded in selling, general and administrative expense in the consolidated statements of operations.

The change in fair value of the awards classified as liabilities resulted in $ 0.2 million of expense for the year ended December 31, 2022.

The fair value of the RSU awards classified as liabilities was $ 0.5 million as of the year ended December 31, 2021.

In general, RS and RSU awards will vest on the third anniversary of the grant date, provided the holder of the share is continuously employed by the Company until the vesting date.

40 unchanged sentences

The program may be suspended or discontinued at any time.

During the year ended December 31, 2022, the Company repurchased 3,093,662 shares of its Class A common stock at a weighted average price of $ 3.21 per share for a total purchase price of $ 9.9 million ($ 10.0 million, including commissions).

There were no shares repurchased during the year ended December 31, 2021.

The following repurchases occurred during the years ended December 31, 2023 and 2022:

Shares of Class A common stock 2,852,501 3,093,662

Weighted average price per share $ 4.40 $ 3.21

Total repurchases during the period (in millions) (1)

$ 12.6 $ 10.0

______________________________

(1) Excluding commissions, total repurchases were $ 12.6 million and $ 9.9 million during the years ended December 31, 2023 and 2022.

As of December 31, 2023, there were $ 77.5 million of authorized repurchases remaining under the program.

In accordance with the Articles of Incorporation, dividends are paid equally for all three classes of common shares.

Due to uncertainty in client demand as a result of the COVID-19 pandemic, the Company’s Board of Directors proactively suspended the Company’s quarterly dividends beginning in the second quarter of 2020.

Beginning in the second quarter of 2020, the Company’s Board of Directors proactively suspended the Company’s quarterly dividends.

On February 15, 2024, the Board of Directors reinstated the Company’s quarterly dividends.

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2023 and 2022, were as follows:

Translation Adjustments Interest Rate Swap Adjustments Pension Benefit Plan Adjustments Total

Translation Adjustments Interest Rate Derivative Adjustments Pension Benefit Plan Adjustments Total

Balance at January 1, 2022 $ ( 143.1 ) $ ( 6.7 ) $ ( 11.4 ) $ ( 161.2 )

4 unchanged sentences

Other comprehensive income (loss) before reclassifications 13.1 ( 0.2 ) ( 4.4 ) 8.5

Amounts reclassified from accumulated other comprehensive loss to net earnings 27.3 2.6 — 29.9

Amounts reclassified from accumulated other comprehensive loss to net loss — 2.2 — 2.2

Net other comprehensive income (loss) 13.1 2.0 ( 4.4 ) 10.7

3 unchanged sentences

(In millions, except share and per share data and unless otherwise indicated)

The details about the reclassifications from accumulated other comprehensive loss to net earnings for the years ended December 31, 2022 and 2021, were as follows:

The details about the reclassifications from accumulated other comprehensive loss to net earnings (loss) for the years ended December 31, 2023 and 2022, were as follows:

Details about Accumulated Other

6 unchanged sentences

Reclassification of foreign currency translation adjustments, net of tax — 27.3

Plan settlements on pension benefit plans — 0.9 Pension income

Impact of income taxes — ( 0.2 ) Income tax expense

Plan settlements on pension benefit plans, net of tax — 0.7

Total reclassifications for the period, net of tax $ 2.2 $ 29.9

Segment Information

Quad is a global marketing experience company that gives brands a more streamlined, impactful, flexible and frictionless way to go to market and reach consumers.

Quad is a global MX company that helps brands make direct consumer connections, from household to in-store to online.

The Company’s mission is to provide a better marketing experience for its clients, so they can focus on delivering the best customer experience to theirs.

The Company’s operating and reportable segments are aligned with how the chief operating decision maker of the Company currently manages the business.

4 unchanged sentences

The United States Print and Related Services segment is predominantly comprised of the Company’s United States printing operations and is managed as one integrated platform.

This includes print execution and logistics for retail inserts, catalogs, long-run publications, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, newspapers, custom print products, as well as other commercial and specialty printed products, along with global paper procurement, and marketing and other complementary services, such as data and analytics, technology solutions, media services, creative and content solutions, managed services and execution in non-print channels (e.g., digital and broadcast).

This includes print execution and logistics for retail inserts, catalogs, long-run publications, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, newspapers, custom print products, as well as other commercial and specialty printed products, along with global paper procurement, and marketing and other complementary services, such as data intelligence and analytics, technology solutions, media planning, placement and optimization, creative strategy and content creation, as well as execution in non-print channels (e.g., digital and broadcast).

This segment also includes the manufacture of ink.

International

The International segment consists of the Company’s printing operations in Europe and Latin America, including operations in England, France, Germany, Poland, Colombia, Mexico and Peru.

This segment provides printed products and marketing and other complementary services consistent with the United States Print and Related Services segment.

QUAD/GRAPHICS, INC.

1 unchanged sentence

(In millions, except share and per share data and unless otherwise indicated)

International

The International segment consists of the Company’s printing operations in Europe and Latin America, including operations in England, France, Germany, Poland, Argentina, Colombia, Mexico and Peru, as well as investments in printing operations in India.

This segment provides printed products and marketing and other complementary services consistent with the United States Print and Related Services segment.

Corporate consists of unallocated general and administrative activities and associated expenses including, in part, executive, legal and finance, as well as certain expenses and income from frozen employee retirement plans, such as pension benefit plans.

16 unchanged sentences

Restructuring, impairment and transaction-related charges for the years ended December 31, 2023 and 2022, are further described in Note 3, “Restructuring, Impairment and Transaction-Related Charges,” and are included in the operating income (loss) results by segment above.

A reconciliation of operating income to earnings before income taxes and equity in earnings of unconsolidated entity as reported in the consolidated statements of operations for the years ended December 31, 2022 and 2021, was as follows:

A reconciliation of operating income to earnings (loss) before income taxes as reported in the consolidated statements of operations for the years ended December 31, 2023 and 2022, was as follows:

Operating income $ 25.7 $ 53.5

1 unchanged sentence

net pension income ( 1.7 ) ( 12.6 )

loss on debt extinguishment — 0.7

Earnings before income taxes and equity in earnings of unconsolidated entity $ 17.7 $ 47.0

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Earnings (loss) before income taxes $ ( 42.6 ) $ 17.7

Total assets by segment at December 31, 2023 and 2022, are shown in the following table:

4 unchanged sentences

Total $ 1,509.7 $ 1,701.8

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

Geographic Area Information

14 unchanged sentences

Other long-term assets 67.8 7.4 5.1 0.5 80.8

QUAD/GRAPHICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except share and per share data and unless otherwise indicated)

New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2020-04 “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform.

Additionally, ASU 2020-04 permits entities to apply certain expedients and exceptions for contracts, hedging relationships, and other transactions impacted by the anticipated transition away from the use of LIBOR or other interbank offered rates to alternative reference rates.

ASU 2020-04 was further updated by Accounting Standards Update 2021-01 “Reference Rate Reform (Topic 848)” (“ASU 2021-01”) which further clarified the scope of Topic 848.

As amended in ASU 2022-06, this optional guidance is effective as of March 12, 2020, through December 31, 2024.

The Company expects to elect the practical expedient outlined in ASU 2020-04 and ASU 2021-01 which allows the Company to prospectively adjust the effective interest rate after a reference rate change.

Reference rate reform is not expected to have a material impact on the consolidated financial statements upon the transition from LIBOR to SOFR as the Company’s reference rate, effective February 1, 2023.

Subsequent Events

Declaration of Quarterly Dividend

On February 15, 2024, the Company declared a quarterly dividend of $ 0.05 per share, which will be paid on March 12, 2024, to shareholders of record as of February 27, 2024.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data