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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549



FORM 20-F

o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934ORý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
from                                    toORo

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Date of event requiring this shell company report

For the transition period
from                             to

Commission file number 1-14118

QUEBECOR WORLD INC. (Exact name of Registrant as specified in its charter)Canada (Jurisdiction of incorporation or organization)999 de Maisonneuve West, Suite 1100
Montréal, Québec, Canada H3A 3L4 (Address of principal executive offices)


Securities
registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class

Name of each exchange on which registered


Securities registered or to be registered pursuant to Section 12(g) of the Act.

Subordinate Voting Shares (Title of Class)


Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None (Title of Class)


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Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the
annual report.

154,642,240 Subordinate Voting Shares
46,687,120 Multiple Voting Shares
12,000,000 6.152% Cumulative Redeemable First Preferred Shares, Series 3
1,696,428 6.90% Cumulative Redeemable First Preferred Shares, Series 5


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes    ý No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.

o Yes    ý No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.

ý Yes    o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer
and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý


Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP o

International Financial Reporting Standards
as issued by the International
Accounting Standards Board o

Other ý


If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected
to follow.

ý Item 17    o Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes    ý No

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TABLE OF CONTENTS



PageExplanatory Notes

1Presentation of Financial Information

1Forward-Looking Statements

1PART IItem 1Identity of Directors, Senior Management and Advisers

3Item 2Offer Statistics and Expected Timetable

3Item 3Key Information

3Item 4Information on the Corporation

17Item 4AUnresolved Staff Comments

27Item 5Operating and Financial Review and Prospects

28Item 6Directors, Senior Management and Employees

61Item 7Major Shareholders And Related Party Transactions

73Item 8Financial Information

79Item 9The Offer and Listing

80Item 10Additional Information

84Item 11Quantitative and Qualitative Disclosures about Market Risk

99Item 12Description of Securities other than Equity Securities

100PART IIItem 13Defaults, Dividend Arrearages and Delinquencies

101Item 14Material Modifications to the Rights of Security Holders and Use of
Proceeds

102Item 15Controls and Procedures

102Item 16[Reserved]

104Item 16AAudit Committee Financial Expert

104Item 16BCode of Ethics

104Item 16CPrincipal Accountant Fees and Services

105Item 16DExemptions from the Listing Standards for Audit Committees

106Item 16EPurchases of Equity Securities by the Issuer and Affiliated
Purchasers

106Item 16FChanges in Registrant's Certifying Accountant

107Item 16GCorporate Governance

107PART IIIItem 17Financial Statements

108Item 18Financial Statements

108Item 19Exhibits

108Signatures

110Index to Consolidated Financial Statements

F-1


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EXPLANATORY NOTES

In this annual report on Form 20-F, unless the context otherwise requires, the terms "we", "us", "our", "Quebecor
World" and the "Corporation" refer to Quebecor World Inc. on a consolidated basis, including its partnerships, subsidiaries and divisions and their respective predecessors.

PRESENTATION OF FINANCIAL INFORMATION

On January 21, 2008 Quebecor World obtained an order from the Quebec Superior Court granting creditor protection under the Companies' Creditors Arrangement
Act(Canada) for itself and for 53 U.S. subsidiaries. On the same date, the U.S. subsidiaries
filed a petition under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Pursuant to these insolvency proceedings,
the applicants are provided with the authority to, among other things, continue operating their businesses, subject to court approval for certain activities, with a view to an orderly restructuring of
the business and financial affairs of Quebecor World.

Our
consolidated financial statements included in this annual report have been prepared using the same accounting principles generally accepted in Canada, or Canadian GAAP, as applied by
the Corporation prior to the insolvency proceedings. While the applicants have filed for and been granted creditor protection, our financial statements continue to be prepared using the going concern
concept, which assumes that the Corporation will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. Our financial statements do
not purport to reflect or provide for the consequences of the insolvency proceedings.

For
a discussion of the principal differences between Canadian GAAP and accounting principles generally accepted in the United States, or U.S. GAAP, as they relate to our
financial statements, see Note 30 to our audited consolidated financial statements for the years ended December 31, 2008, 2007 and 2006 included under
"Item 17.Financial Statements."

We
state our financial statements in U.S. dollars. In this annual report, references to Canadian dollars, Cdn$ or CA$ are to the currency of Canada and references to
U.S. dollars or US$ are to the currency of the United States. Unless otherwise indicated, financial information and operating data provided in this annual report is as of
December 31, 2008, and all other information is provided as of March 24, 2009.

FORWARD-LOOKING STATEMENTS

To the extent any statements made in this annual report on Form 20-F contain information that is not historical,
these statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and may be forward-looking information within the meaning of the "safe harbor" provisions of applicable Canadian securities legislation (collectively "forward-looking statements"). These
forward-looking statements relate to, among other things, prospects of our industry and our objectives, goals, strategies, beliefs, intentions, plans, estimates and outlook, and can generally be
identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "plan," "foresee," "believe" or "continue" or the negatives of these terms, variations on them and
other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. We have
based these forward-looking statements on our current expectations about future events. Forward-looking statements do not take into account the effect of transactions or other items announced or
occurring after the statements are made. For example, they do not include the effect of dispositions, acquisitions, other business transactions, asset write-downs or other charges announced or
occurring after the forward-looking statements are made.

Although
we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct,
and

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forward-looking
statements inherently involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making
forward-looking statements, including, but not limited to, factors and assumptions relating to our ability to emerge from the insolvency proceedings, and actual results may differ materially from
those expressed or implied in such forward-looking statements.

Important
factors that could cause actual results to differ materially from these expectations include, among other things:



These
and other risks, as well as our ability to anticipate and manage the risks associated with the foregoing, are detailed from time to time in our filings with the U. S. Securities
and Exchange Commission ("SEC") and the securities regulatory authorities in Canada, available at www.sec.gov and www.sedar.com (copies of which are also available on www.quebecorworld.com).
Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found in the body of this annual report on Form 20-F,
and in particular under
"Item 3.Risk Factors." We caution that the foregoing list of important factors that could affect future results is not exhaustive. Investors and others should carefully consider
the foregoing factors and other uncertainties and potential events when relying on our forward-looking statements to make decisions with respect to the Corporation.

In
light of the insolvency proceedings to which we and our U.S. subsidiaries are subject, it is unlikely that our existing Multiple Voting Shares, Redeemable First Preferred
Shares and Subordinate Voting Shares will have any material value following the approval, if any, of a final plan of reorganization, compromise or arrangement.

Unless
mentioned otherwise, the forward-looking statements in this annual report reflect our expectations as of March 24, 2009, and are subject to change after this date. We
expressly disclaim any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable
securities laws.

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PART I

ITEM 1IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3KEY INFORMATION

ASelected Financial Data

The following table presents selected consolidated financial and operating information. This selected consolidated financial and
operating information should be read together with "Item 5.Operating and Financial Review and Prospects" and our consolidated financial statements and the notes thereto that are
included elsewhere in this annual report.

The
selected consolidated financial information as at and for each of the five years ended December 31, 2004 through 2008 are extracted or derived from our consolidated financial
statements and the notes thereto, which have been audited by KPMG LLP, except for the 2004 earnings data which have been adjusted to exclude the effects of discontinued operations in
subsequent years.

Our
consolidated financial statements have been prepared in accordance with Canadian GAAP. For a discussion of the principal differences between Canadian GAAP and U.S. GAAP as
they relate to our consolidated financial statements, see Note 30 to our consolidated financial statements included elsewhere in this annual report.

Quebecor World Inc.
Selected Consolidated Financial Data

Canadian GAAP Data

Year Ended December 31,(US$ in millions, except per share data)

2008(1)

2007(1)

2006

2005

2004(2)Operating revenues

$
4,016.9

$
4,654.5

$
5,060.9

$
5,120.4

$
5,042.1Operating income (loss)


(462.2
)

(1,887.2
)

195.6


346.0


348.1Net income (loss) from continuing operations


(943.9
)

(1,837.4
)

118.8


179.6


163.2Net income (loss)


(1,659.3
)

(2,200.4
)

28.3


(162.6
)

143.7Earnings (loss) per sharebasic and dilutedContinuing operations


(5.26
)

(14.10
)

0.65


1.06


0.95Net income (loss)


(9.18
)

(16.85
)

(0.04
)

(1.53
)

0.80Number of shares


182.6


131.9


131.4


131.8


132.4Dividends on equity shares (per share)








0.30


0.56


0.52Total assets(3)


2,820.4


4,163.0


5,823.4


5,700.4


6,265.3Net assets(3)


(1,554.7
)

(433.0
)

1,882.2


1,896.3


2,268.8Capital stock


1,595.2


1,457.4


1,452.4


1,444.5


1,461.2


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U.S. GAAP Data

Year Ended December 31,(US$ in millions, except per share data)

2008

2007

2006

2005

2004(2)Operating revenues

$
4,016.9

$
4,654.5

$
5,060.3

$
5,104.9

$
5,034.5Operating income (loss)


(462.7
)

(1,887.6
)

195.0


330.5


341.4Net income (loss) from continuing operations


(936.4
)

(1,861.4
)

117.8


172.7


161.0Net income (loss)


(1,552.9
)

(2,224.4
)

29.8


(169.5
)

141.5Earnings (loss) per sharebasic and dilutedContinuing operations


(5.25
)

(14.36
)

0.64


1.01


0.93Net income (loss)


(8.63
)

(17.11
)

(0.03
)

(1.59
)

0.78Number of shares


182.6


131.9


131.4


131.8


132.4Dividends on equity shares (per share)








0.30


0.56


0.52Total assets(3)


2,732.7


4,135.8


5,743.9


5,757.3


6,358.4Net assets(3)


(1,875.3
)

(450.0
)

165.8


1,713.4


2,137.0Capital stock


1,545.3


1,543.0


1,538.0


1,658.3


1,674.3


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Exchange Rate Information

The following table sets forth, for the periods indicated, the average, high, low and end of period noon buying rates in the City of
New York for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York, or the noon buying rate. Such rates are set forth as
U.S. dollars per CA$1.00 and are the inverse of rates quoted by the Federal Reserve Bank of New York for Canadian dollars per US$1.00. On March 20, 2009, the inverse of the noon
buying rate was CA$1.00 equals US$0.8084. We do not make any representation that Canadian dollars could have been converted into U.S. dollars at the rates shown or at any other rate.

Year Ended:

Average(1)

High

Low

Period EndDecember 31, 2008


0.9381


1.0291


0.7710


0.8170December 31, 2007


0.9309


1.0908


0.8437


1.0120December 31, 2006


0.8818


0.9100


0.8528


0.8582December 31, 2005


0.8254


0.8690


0.7872


0.8579December 31, 2004


0.7682


0.8493


0.7158


0.8309


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Month Ended:

Average(2)

High

Low

Period EndMarch 2009 (through March 20, 2009)


0.7834


0.8106


0.7695


0.8084February 28, 2009


0.8031


0.8203


0.7868


0.7868January 31, 2009


0.8159


0.8459


0.7844


0.8087December 31, 2008


0.8106


0.8360


0.7710


0.8170November 30, 2008


0.8216


0.8694


0.7782


0.8091October 31, 2008


0.8441


0.9428


0.7727


0.8225September 30, 2008


0.9450


0.9673


0.9262


0.9437


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BCapitalization and Indebtedness

Not applicable.

CReasons for the Offer and Use of Proceeds

Not applicable.

DRisk Factors

We urge all current and potential investors to carefully consider the risks described below, the other
information contained in this annual report and other information and documents filed by us with the securities regulatory authorities before making any investment decision with respect to any of our
securities. The risks and uncertainties described below are not the only ones we may face. Additional risks and uncertainties that we are unaware of, or that we currently deem to be immaterial, may
also become important factors that affect us. If any of the following risks actually occurs, our business, cash flow, financial condition and/or results of operations could be materially adversely
affected.

PRIMARY RISK FACTORS

We and many of our subsidiaries are currently subject to creditor protection and restructuring proceedings in both Canada and the United States and if we fail to
implement a plan of reorganization, arrangement or compromise and obtain sufficient exit financing within the time granted by the Courts, substantially all of our debt obligations will become due and
payable immediately, or subject to immediate acceleration, which would in all likelihood lead to the liquidation of our assets. In any event, it is unlikely that our existing Multiple Voting
Shares, Subordinate Voting Shares and Preferred Shares will have any material value.

On January 21, 2008 (the "Filing Date"), we obtained an order (the "Initial Order") from the Quebec Superior Court
(the "Court") granting creditor protection under theCompanies' Creditors Arrangement Act(Canada) (the "CCAA") for ourselves and for 53
of our U.S. Subsidiaries (collectively, the "Applicants"). On the same date, those same U.S. Subsidiaries filed a petition under Chapter 11 of the U.S. Bankruptcy Code("Chapter 11") in the U.S. Bankruptcy Court for the Southern District of New York
(the "U.S. Bankruptcy Court"). The proceedings under the CCAA are referred to in this annual report as the "Canadian Proceedings", the proceedings under Chapter 11 are referred to
as the "U.S. Proceedings" and the Canadian Proceedings and the U.S. Proceedings are collectively referred to as the "Insolvency Proceedings." Our Latin American subsidiaries are not
subject to the Insolvency Proceedings.

Pursuant
to the Initial Order, the Applicants are provided with the authority to, among other things, file with the Court and submit to their creditors a plan of reorganization,
compromise or arrangement under the CCAA and operate an orderly restructuring of their business and financial

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affairs,
in accordance with the terms of the Initial Order. Ernst & Young Inc. (the "Monitor") has been appointed by the Court as monitor in the Canadian Proceedings. Pursuant to
the terms of the Initial Order, the Monitor was appointed to monitor the business and financial affairs of the Applicants and, in connection with such role, the Initial Order imposes a number of
duties and functions on the Monitor, including, but not limited to, assisting the Applicants in connection with their restructuring and reporting to the Court on the state of the business and
financial affairs of the Applicants and on developments in the Insolvency Proceedings, as the Monitor considers appropriate.

Chapter 11
provides for all actions and proceedings against the U.S. Subsidiaries to be stayed during the continuation of the U.S. Proceedings. The Initial Order
also provides for a general stay, which has been extended in Canada at various times since it was first rendered and is subject to further extensions as the Court may deem appropriate. The current
expiration of the stay period in Canada is May 31, 2009. The applicable stays generally preclude parties from taking any actions against the Applicants. The purpose of the stay period and the
Insolvency Proceedings is to provide the Applicants the opportunity to stabilize their operations and businesses and to develop a business plan, all with a view to proposing a Plan. Any such Plan will
be subject to approval by affected creditors, as well as the Court.

On
March 26, 2009, the U.S. Bankruptcy Court extended the period during which the U.S. Subsidiaries have the exclusive right to file a Plan or Plans until
April 27, 2009, and the exclusive period during which the U.S. Subsidiaries have the exclusive right to solicit acceptance of such Plan or Plans until June 26, 2009. There can be
no assurance that the U.S. Bankruptcy Court will grant any further extension of these periods. In addition, the U.S. Bankruptcy Court has the power to terminate such periods, and, in all
events, the U.S. Bankruptcy Code provides for maximum exclusivity periods of 18 months and 20 months from the Filing Date, respectively, to file and solicit acceptance of a Plan
or Plans.

In
light of the Insolvency Proceedings, it is unlikely that our existing Multiple Voting Shares, Subordinate Voting Shares and Preferred Shares will have any material value in, and
following the approval of, a plan of reorganization, arrangement or compromise, and there is a risk such shares could be cancelled. There is also a risk that if we fail to successfully implement a
plan of reorganization, arrangement or compromise and obtain sufficient exit financing within the time granted by the Court and before the expiration on July 21, 2009 of the credit agreement
entered into by us as of January 21, 2008 with our debtor-in-possession (DIP) lenders, as amended (the "DIP Credit Agreement"), substantially all of our debt
obligations will become due and payable immediately, or subject to immediate acceleration, which would in all likelihood lead to the liquidation of the Applicants' assets.

Our ability to manage our business is restricted during the Insolvency Proceedings and all steps or actions in connection therewith may, in certain circumstances, require
the approval of our DIP lenders, the Monitor, the Official Committee of Unsecured Creditors and/or the Courts, which steps or actions may be delayed or even refused.

Our DIP Credit Agreement provides for various restrictions on, among other things, our ability to incur additional debt, secure such
debt, make investments, dispose of our assets (including pursuant to sale and leaseback transactions and sales of receivables under securitization programs) and make capital expenditures. Each of
these transactions would require the consent of our DIP lenders if they exceed certain thresholds set forth in the DIP Credit Agreement, and may, in certain cases, require the consent of the Monitor,
the Official Committee of Unsecured Creditors and/or the Courts, which steps or actions may be delayed or even refused. As a result, our ability to respond to changing business and economic conditions
may be significantly restricted, and we may be prevented from engaging in transactions that might otherwise be considered beneficial or advantageous to us.

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We may not achieve our operating goals and may not be in compliance with debt covenants.

Under the terms of our DIP Credit Agreement, we are required to comply with various terms and conditions, including compliance with
financial ratios on a monthly basis. Although to date we have been in compliance, there can be no assurance that we will be able to comply with such terms and conditions in the future. In the event
that we default under the DIP Credit Agreement and the DIP Credit Agreement is terminated, there can be no assurance that sufficient alternative financing arrangements will be available. Furthermore,
in the event that cash flows, together with available borrowings under the DIP Credit Agreement or alternative financing arrangements, are not sufficient to meet our cash requirements, we may be
required to reduce planned capital expenditures, sell additional assets and seek other sources of capital. We can provide no assurance that such actions will be sufficient to cover any cash
shortfalls. The need to comply with the terms of our other debt obligations may also limit our ability to obtain additional financing and our flexibility in planning for or reacting to changes in our
business and the industry. In addition, if we are unable to achieve the goals of our going-forward business plan and operational restructuring strategy, we may be forced to sell all or parts of our
business, develop and implement further restructuring plans or become subject to further insolvency or bankruptcy proceedings.

The Insolvency Proceedings may negatively impact our operations.

While we have not yet experienced any significant disruption in our relationships with our suppliers or vendors, we may have difficulty
maintaining existing relationships, or creating new relationships with suppliers or vendors as a result of the Insolvency Proceedings. Our suppliers and vendors could stop providing supplies or
services to us or provide such supplies or services only on terms such as 'cash on delivery,' 'cash on order,' or other terms that could have an adverse impact on our short-term cash
flows. In addition, the Insolvency Proceedings may adversely affect our ability to retain existing customers, attract new customers and maintain contracts that are critical to our operations.

We may not be able to raise additional capital in the future.

We may need to obtain additional financing to fund our business, including in connection with any emergence from the Insolvency
Proceedings, and we cannot assure you that financing will be available in amounts or on terms acceptable to us. The current recessionary global market and economic conditions, as well as the
continuing difficulties in the credit and capital markets, may make it even more difficult for us to obtain additional financing in the future. In addition, if funds are raised by incurring further
debt, our operations and finances may become subject
to further restrictions and we may be required to limit or cease our operations or capital expenditure activities, or otherwise modify our business strategy. If we fail to comply with financial or
other covenants required in connection with any such financing, our creditors may be able to exercise remedies that could substantially impair our ability to operate. In addition, if we obtain
additional funds by selling any of our equity securities or if we issue equity derivative securities in connection with obtaining debt financing, the percentage ownership of our then existing
shareholders will be reduced, shareholders may experience additional dilution, or the equity securities may have rights, preferences or privileges senior to our common equity.

The above Primary Risk Factors relating to us and the Insolvency Proceedings should be borne in mind when reading each of the additional risk factors set
forth below.

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OTHER RISK FACTORS

Risks Relating to Our Business

Our revenue is subject to cyclical and seasonal variations and prices of, and demand for, our printing services may fluctuate significantly based on factors outside of
our control.

The business in which we operate is sensitive to general economic cycles and may be adversely affected by the cyclical nature of the
markets we serve, as well as by local, regional, national and global economic conditions. Our business operations are seasonal, with the majority of our historical operating income during the past
five financial years being recognized in the third and fourth quarters of the financial year, primarily as a result of the higher number of magazine pages, new product launches and
back-to-school, retail and holiday
catalog promotions. Within any year, this seasonality could adversely affect our cash flows and results of operations.

We
are unable to predict market conditions and only have a limited ability to affect changes in market conditions for printing services. Pricing and demand for printing services have
fluctuated significantly in the past and each has declined significantly in recent years. Prices and demand for printing services may continue to decline from current levels. Further increases in the
supply of printing services or decreases in demand could cause prices to continue to decline, and prolonged periods of low prices, weak demand and/or excess supply could have a material adverse effect
on our business growth, results of operations and liquidity.

The current recessionary global market and economic conditions, as well as the effects of these conditions on our customers' businesses, may adversely affect our results
of operations.

Global economic conditions affect our customers' businesses and the markets they serve. Demand for advertising tends to correlate with
changes in the level of economic activity in the markets our customers serve. Since a part of our business relies on our customers' advertising spending, a prolonged downturn in the global economy and
an uncertain economic outlook may reduce the demand for printing and related services that we provide these customers. Economic weakness and constrained advertising spending has resulted, and may
result in the future, in decreased revenue, gross margin, earnings or growth rates and collection of customer receivables. In addition, customer difficulties have resulted, and could result in the
future, in increases in bad debt write-offs and to our allowance for doubtful accounts receivable. Economic downturns may also result in restructuring actions and associated expenses and
impairment of long-lived assets, including goodwill and other intangibles. Uncertainty about future economic conditions makes it difficult for us to forecast operating results and to make
decisions about future investments.

We operate in a highly competitive industry.

The industry in which we operate is highly competitive. Competition is largely based on price, quality, range of services offered,
distribution capabilities, customer service, availability of printing time on appropriate equipment and state-of-the-art technology. We compete for commercial
business not only with large national printers, but also with smaller regional printers. In certain circumstances, due primarily to factors such as freight rates and customer preference for local
services, printers with better access to certain regions of a given country may have a competitive advantage in such regions. Since 2001, the printing industry has experienced a reduction in demand
for printed materials and excess capacity. Some of the industries that we service have been subject to consolidation efforts, leading to a smaller number of potential customers. Furthermore, if our
smaller customers are consolidated with larger companies utilizing other printing companies, we could lose our customers to competing printing companies. Primarily as a result of this excess capacity
and customer consolidation, there have been, and may continue to be, downward pricing pressures and increased competition in the printing industry. Any failure on our part to compete effectively in
the markets we serve could have a material adverse

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effect
on the results of our operations, financial condition or cash flows and could require changes to the way we conduct our business or reassess strategic alternatives involving
our operations.

We will be required to make capital expenditures to maintain our facilities and may be required to make significant capital expenditures to remain technologically and
economically competitive, which may significantly increase our costs or disrupt our operations.

Because production technologies continue to evolve, we must make capital expenditures to maintain our facilities and may be required to
make significant capital expenditures to remain technologically and economically competitive. We may therefore be required to invest significant capital in improving production technologies. If we
cannot obtain adequate capital or do not respond adequately to the need to integrate changing technologies in a timely manner, our operating results, financial condition or cash flows may be adversely
affected.

The
installation of new technology and equipment may also cause temporary disruption of operations and losses from operational inefficiencies. The impact on operational efficiency is
affected by the length of the period of remediation.

A significant portion of our revenues is derived from long-term contracts with important customers, which may not be renewed on similar terms and conditions or
may not be renewed at all. The failure to renew or be awarded such contracts could significantly adversely affect our operating results, financial condition and cash flows.

We derive a significant portion of our revenues from long-term contracts with important customers. If we are unable to
renew such contracts on similar terms and conditions, or at all, or if we are not awarded new long-term contracts with important customers in the future, our operating results, financial
condition and cash flows may be adversely affected.

We may be adversely affected by increases in our operating costs, including the cost and availability of raw materials and labor-related costs.

We use paper and ink as our primary raw materials. The price of such raw materials has been volatile over time and may cause
significant fluctuations in our net sales and cost of sales. Although we use our purchasing power as one of the major buyers in the printing industry to obtain favorable prices, terms, quality control
and service, we may nonetheless experience increases in the costs of our raw materials in the future, as prices in the overall paper and ink markets are beyond our control. In general, we have been
able to pass along increases in the cost of paper and ink to many of our customers. If we are unable to continue to pass any price increases on to our customers, future increases in the price of paper
and ink would adversely affect our margins and profits.

Due
to the significance of paper in our business, we are dependent upon the availability of paper. In periods of high demand, certain paper grades have been in short supply, including
grades used in our business. In addition, during periods of tight supply, many paper producers allocate shipments of paper based upon historical purchase levels of customers. Although we generally
have not experienced significant difficulty in obtaining adequate quantities of paper, unforeseen developments in the overall paper markets could result in a decrease in the supply of paper and could
cause either or both of our revenues or profits to decline.

Labor
represents a significant component of our cost structure. Increases in wages, salaries and benefits, such as medical, dental, pension and other post-retirement
benefits, may impact our financial performance. Changes in interest rates, investment returns or the regulatory environment may impact the amounts we are required to contribute to the pension plans
that we sponsor and may affect the solvency of our pension plans.

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Our defined benefit pension plans have significant deficits that could grow in the future and cause us to incur additional costs.

We
have defined benefit pension plans for employees in the United States and Canada. The majority of our assets in our defined benefit pension plans are held in North American and
global equities and fixed income or debt securities. Our current asset allocation is approximately 60% equities and 40% debt securities.

Following
the recent declines in global equity markets, we had, as at December 31, 2008, unfunded pension liabilities of approximately US$240 million for our
U.S. qualified defined benefit plans (the "U.S. Plans"). Under current U.S. pension law, funding deficits are generally required to be funded over a seven-year
period. Over the next two financial years, contribution requirements for our U.S. Plans are expected to be approximately US$110 million under current U.S. pension law. It is
possible that Congress will change U.S. pension law to provide some degree of funding relief to sponsors of U.S. defined benefit pension plans; however, no assurances can be given that
any such relief will be enacted. In the event we are forced into liquidation, we would likely be required to terminate
the U.S. Plans. In the event that the U.S. Plans are terminated, we would, under current U.S. law, have liability to the Pension Benefit Guaranty Corporation for the then unfunded
pension liabilities of the U.S. Plan.

Following
the recent declines in global equity markets, we had, as at December 31, 2008, a solvency deficiency (the excess of windup benefit obligations over the fair value
of plan assets) of approximately CA$80 million in our Canadian defined benefit pension plans (the "Canadian Plans"). Under current Canadian legislation, pension solvency deficits are
required to be funded over a five-year period. It has been recently announced that provincial governments are currently preparing legislation to extend from five to ten years the period of
time within which solvency deficits must be eliminated through funding contributions. Under the current funding rules in Canada, contribution requirements for these plans are expected to be
approximately CA$19 million over the next two financial years. In the event we are forced into liquidation and compelled to terminate the Canadian Plans, the Canadian Plans' members would
receive a percentage of their accrued benefits based on such plans' solvency ratio as at the liquidation date.

Our
pension deficits may increase or decrease depending on changes in the levels of interest rates, pension plan investment performance, pension legislation and other factors. Additional
significant declines in global, and in particular North American, equity markets would increase, and possibly significantly increase, our potential pension funding obligations. Any significant
increase in our required contributions could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Our
funding obligations under our various pension plans and the benefits payable to the participants thereunder are affected by and will be dealt with in the context of the Insolvency
Proceedings. Please refer to "Item 4.Information on the CorporationHistory and Development of the Corporation," for a detailed description of the Insolvency
Proceedings.

The demand for our products and services may be adversely affected by technological changes.

Technological changes continue to increase the accessibility and quality of electronic alternatives to traditional delivery of printed
documents through the online distribution and hosting of media content and the electronic distribution of documents and data. The acceleration of consumer acceptance of such electronic media, as an
alternative to print materials, may decrease the demand for our printed products or result in reduced pricing for our printing services.

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We may be adversely affected by strikes and other labor protests.

As at December 31, 2008, we had 42 separate collective bargaining agreements in North America. Furthermore, eight
collective agreements covering approximately 890 employees are currently in negotiation. Of these, four collective agreements covering approximately 680 employees expired in 2008 and two
collective agreements covering approximately 200 employees expired in 2007. In addition, two collective agreements covering approximately 195 employees will expire in 2009.

As
at December 31, 2008, we employed approximately 20,000 people in North America, of which approximately 5,600 or approximately 28% are unionized. As at
December 31, 2008, 65 of our plants and related facilities in North America were non-unionized.

As
at December 31, 2008, we also employed approximately 2,400 people in Latin America, the majority of which are either governed by agreements that apply
industry-wide or by a collective agreement.

While
relations with our employees have been stable to date and there has not been any material disruption in operations resulting from labor disputes, we cannot be certain that we will
be able to maintain a productive and efficient labor environment. We cannot predict the outcome of any future negotiations relating to the renewal of the collective bargaining agreements, nor can we
assure with certainty that work stoppages, strikes or other forms of labor protests pending the outcome of any future negotiations will not occur. Any strikes or other forms of labor protests in the
future could materially disrupt our operations and result in a material adverse impact on our financial condition, operating results and cash flows, which could force us to reassess our strategic
alternatives involving certain of our operations.

We may be adversely affected by interest rates, foreign exchange rates and commodity prices.

We are exposed to market risks associated with fluctuations in foreign currency exchange rates, interest rates and commodity prices.
Because a portion of our operations are outside the United States, significant revenues and expenses will be denominated in local currencies. Although operating in local currencies may limit
the impact of currency rate fluctuations on the operating results of our non-U.S. subsidiaries and business units, fluctuations in such rates may affect the translation of these
results into our financial statements. Prior to the Insolvency Proceedings, we used derivative financial instruments, such as foreign exchange forward contracts, cross-currency swaps, interest rate
swap agreements and commodity swap agreements to manage certain market risks, however all of our derivative contracts were terminated in the first quarter of 2008 as a direct result of the Insolvency
Proceedings. In the fourth quarter of 2008, we partially resumed our hedging activities to manage our exposure to such market risks until June 2009. Consequently, we are now partially exposed
to the market risks associated with movements in foreign currency exchange rates, interest rates and commodity prices.

Increases in fuel and other energy costs may have a negative impact on our financial results.

Fuel and other energy costs represent a significant portion of our overall costs. We may not be able to pass along a substantial
portion of the rise in the price of fuel and other energy costs directly to our customers. In that instance, increases in fuel and other energy costs could adversely affect operating costs or customer
demand and thereby negatively impact our operating results, financial condition or cash flows.

Our printing and other facilities are subject to environmental laws and regulations, which may subject us to material liability or require us to incur material costs.

We use various materials in our operations that contain constituents considered hazardous or toxic under environmental laws and
regulations. In addition, our operations are subject to a variety of

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environmental
laws and regulations relating to, among other things, air emissions, wastewater discharges and the generation, handling, storage, transportation and disposal of solid waste. Further, we
are subject to laws and regulations designed to reduce the probability of spills and leaks; however, in the event of a release, we are also subject to environmental regulation requiring an appropriate
response to such an event. Permits are required for the operation of certain of our businesses, and these permits are subject to renewal, modification and, in some circumstances, revocation.

Our
operations generate wastes that are disposed of off-site. Under certain environmental laws, we may be liable for cleanup costs and damages relating to contamination at
these off-site disposal locations, or at our existing or former facilities, whether or not we knew of, or were responsible for, the presence of such contamination. The remediation costs
and other costs required to clean up or treat contaminated sites can be substantial. Contamination on and from our current or former locations may subject us to liability to third parties or
governmental authorities for injuries to persons, property or natural resources and may adversely affect our ability to sell or rent our properties or to borrow money using such properties
as collateral.

We
expect to incur ongoing capital and operating costs to maintain compliance with environmental laws, including monitoring our facilities for environmental conditions. We take reserves
on our financial statements to cover potential environmental remediation and compliance costs as we consider appropriate. However, there can be no assurance that the liabilities for which we have
taken reserves are the only environmental liabilities relating to our current and former locations, that material environmental conditions not known to us do not exist, that future laws or regulations
will not impose material environmental liability on us, or cause us to incur significant capital and operating expenditures, or that our actual environmental liabilities will not exceed our reserves.
In addition, failure to comply with any environmental regulations or an increase in regulations could adversely affect our operating results and financial condition.

In the past two years, we have taken significant goodwill impairment charges and write-downs of the value of our long-lived assets, and we may in the future be
required to take additional write-downs of the value of our long-lived assets.

The series of events that led to the Insolvency Proceedings and the events since then have triggered impairment tests for the
Corporation's property, plant and equipment, and goodwill impairment charges. We may be required to take additional write-downs on the value of our long-lived assets. In the event we are
required to take additional asset write-downs, our financial results as well as the trading prices of our various outstanding securities could be adversely affected.

We could be adversely affected by health and safety requirements.

We are subject to requirements of Canadian, U.S. and other foreign occupational health and safety laws and regulations at the federal,
state, provincial and local levels. These requirements are complex, constantly changing and have tended to become more stringent over time. It is possible that these requirements may change or
liabilities may arise in the future in a manner that could have a material adverse effect on our financial condition or results of operations. We cannot assure you that we have been or that we will be
at all times in complete compliance with all such requirements or that we will not incur material costs or liabilities in connection with those requirements in the future.

Changes in postal rates and postal regulations may adversely impact demand for our products and services.

Postal costs are a significant component of many of our customers' cost structures and postal rate changes can influence the number of
pieces that our customers are willing to mail. Any resulting decline in print volumes mailed could have an adverse effect on our business.

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We have identified a material weakness in our internal control over financial reporting and we concluded that those controls, as well as our disclosure controls and
procedures, were not effective as of December 31, 2008. If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial
results.

As an SEC registrant, we are required to comply with Section 404 of the Sarbanes-Oxley Act. There are similar requirements under
applicable Canadian securities laws. In any given year, we cannot be certain as to the timing of completion of our internal control evaluation, testing and remediation actions or of their impact on
our operations. Upon completion of this process, we may identify control deficiencies of varying degrees of severity under applicable SEC rules and regulations that remain unremediated. As a public
company, we are required to report, among other things, control deficiencies that constitute material weaknesses or changes in internal control that, or that are reasonably likely to, materially
affect internal control over financial reporting. A "material weakness" is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis. If we fail to comply with the requirements of
Section 404 or report a material weakness, we might be subject to regulatory sanction and investors may lose confidence in our financial statements, which may be inaccurate if we fail to
remedy such material weakness.

For
the financial year ended December 31, 2007, we identified three material weaknesses in our internal control over financial reporting, and while throughout 2008 we implemented
several remediation actions that we believe materially improved, in the aggregate, our internal control over financial reporting, one material weakness continued to impact the operating effectiveness
of our internal control over financial reporting. As disclosed in "Item 15.Controls and Procedures," we have identified a material weakness in our internal control over
financial reporting and we concluded that those controls were not effective as of December 31, 2008. Based on that evaluation, we concluded that our disclosure controls and procedures were not
effective as of December 31, 2008. More particularly, we did not maintain effective processes and controls over the accounting for and reporting of complex and non-routine
transactions. Specifically, we determined that there was a lack of sufficient accounting and finance personnel to perform in-depth analysis and review of complex accounting matters within
the timeframes set by us for filing our consolidated financial statements. This deficiency resulted in certain adjustments to the amounts or disclosures of the following items: inventories, claims and
liabilities subject to compromise, financial instruments, pension expense and income taxes. In order to remedy the weakness, we have undertaken to hire additional qualified resources and we continue
to make progress in executing the remediation plans we have established in order to further improve our internal control in general and to address these weaknesses. The failure to do so, or to do so
within a reasonable time frame, could adversely impact the accuracy of the reports and filings we make with the SEC and the Canadian securities regulatory authorities. See
"Item 15.Controls and Procedures."

We are dependent on the experience and industry knowledge of our executive officers and other key employees to execute our business plans. If we were to experience any
turnover in leadership, our business, results from operations and financial condition could be materially adversely affected.

We are dependent on the experience and industry knowledge of our executive officers and other key employees to execute our business
plans. If we were to experience any turnover in leadership, our business, results from operations and financial condition could be materially adversely affected. Additionally, and particularly while
subject to the Insolvency Proceedings, we may be unable to attract and retain additional qualified executives as needed in the future.

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There are risks associated with our operations outside the United States and Canada.

We have operations outside the United States and Canada. Revenues from our operations outside the United States and
Canada accounted for approximately 7.3% of our revenues for the year ended December 31, 2008, excluding revenues generated by our European operations that were sold on June 26, 2008
(see "Item 4.Information on the CorporationHistory and Development of the Corporation"). As a result, we are subject to the risks inherent in conducting
business outside the United States and Canada, including the impact of economic and political instability and being subject to different legal and regulatory regimes that may preclude or make
more costly certain initiatives or the implementation of certain elements of our business strategy.

Acquisitions have contributed to growth in the industry in which we operate and will continue to do so, making us vulnerable to financing risks and the challenges of
integrating new operations into our own.

Due to fragmentation in the commercial printing industry, growth in the industry in which we operate has and may continue to depend, in
part, upon acquisitions, and we may consider making strategic or opportunistic acquisitions in the future. We cannot assure you that future
acquisition opportunities will exist on acceptable terms, that any newly acquired companies will be successfully integrated into our operations or that we will fully realize the intended results of
any acquisitions. We may incur additional long-term indebtedness in order to finance all or a portion of the consideration to be paid in future acquisitions. We cannot assure you that we
will be able to obtain any such financing upon acceptable terms. While we continuously evaluate opportunities to make strategic or opportunistic acquisitions, we have no present commitments or
agreements with respect to any material acquisitions.

Risks Relating to our Various Outstanding Securities

Canadian and U.S. bankruptcy and insolvency laws impair the enforcement of creditors' remedies under our various outstanding notes, debentures and other debt
securities and the guarantees of such securities.

The rights of the holders of our debt securities are suspended by the Insolvency Proceedings. A restructuring proposal, if accepted by
the requisite majorities of each affected class of creditors, and if approved by the relevant courts, would be binding on all creditors within each affected class, including those creditors that did
not vote to accept the proposal. Moreover, the Insolvency Proceedings permit us to retain possession and administration of our property, subject to court oversight, even though we may be in default
under our debt securities, during the period that the stay against proceedings remains in place.

Further,
we may not make any payments during the Insolvency Proceedings on any of our pre-filing debt instruments and securities, and holders of our debt instruments and securities may
not be compensated for any delays in payment of principal, interest and costs, if any, including the fees and disbursements of the relevant trustees.

In addition to the Insolvency Proceedings, our outstanding secured indebtedness, DIP Credit Agreement and related interest and principal payment obligations could
prevent us from fulfilling our obligations under our various outstanding notes, debentures and other debt securities and adversely affect our ability to conduct our business.

We and our consolidated subsidiaries have secured indebtedness, indebtedness under our DIP Credit Agreement and related interest
and principal payment obligations. Excluding debt and other liabilities subject to compromise under the Insolvency Proceedings, as of December 31, 2008, we and our consolidated subsidiaries had
a total indebtedness of US$646.6 million. Our DIP lenders and the Court could permit us or our consolidated subsidiaries to incur or guarantee additional indebtedness, including secured
indebtedness in certain circumstances. To the extent we incur additional indebtedness, the risks discussed below will increase.

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Our
degree of leverage could have significant consequences, including the following:



Our various unsecured notes, debentures and other debt securities are effectively subordinated to our partially secured pre-filing debt and the fully secured indebtedness
under our DIP Credit Agreement.

Our various unsecured notes, debentures and other debt instruments, including our unsecured pre-filing (i.e. that existed prior
to the Insolvency Proceedings) credit facilities (excluding the portions of such credit facilities that are secured in the manner set forth below), and the guarantees of such notes, debentures and
other debt instruments and credit facilities will be effectively subordinated to any secured indebtedness that we may incur to the extent of the assets securing such indebtedness. In the event of a
bankruptcy or similar proceeding with respect to us, the assets which serve as collateral for any of our secured indebtedness will be available to satisfy the obligations under the secured
indebtedness before any payments are made on our unsecured notes, debentures and other debt instruments and credit facilities. Excluding debt and other liabilities subject to compromise under the
Insolvency Proceedings, as of December 31, 2008, we and our consolidated subsidiaries had a total indebtedness of US$646.6 million.

In
terms of pre-filing secured debt, we have granted liens on certain of our North American assets as partial security for our indebtedness under a syndicated credit facility made
available to us by a bank syndicate led by Royal Bank of Canada and an equipment financing provided to us by Société Générale (Canada).
These liens secure such indebtedness up to a maximum aggregate amount of US$170 million and have not been primed by our DIP lenders. In addition, as of December 31, 2008, we had
US$63.6 million of capital leases.

Our
DIP Credit Agreement is fully guaranteed and secured by all personal and real property of Quebecor World Inc., Quebecor World (USA) Inc., all of our material
subsidiaries located in North America (including the Applicants) and certain material subsidiaries located in Latin America.

All
of our other debt instruments are subordinated to the secured debt described above.

There is a risk that the Toronto Stock Exchange (the "TSX") may seek to de-list our currently listed Subordinate Voting Shares, Series 3 Preferred
Shares and Series 5 Preferred Shares.

Our Subordinate Voting Shares, 6.152% Cumulative Redeemable First Preferred Shares, Series 3 (the "Series 3
Preferred Shares") and 6.90% Cumulative Redeemable First Preferred Shares, Series 5 (the "Series 5 Preferred Shares") are currently listed on the TSX, and our Subordinate Voting
Shares are traded and quoted on the OTC Bulletin Board. We are required to satisfy continued listing requirements pursuant to the TSX rules in order for the Subordinate Voting Shares, Series 3
Preferred Shares and Series 5 Preferred Shares to remain eligible for such listing. The OTC Bulletin Board is a quotation medium for subscribing members and not a stock exchange or a listing
service. We have not taken any steps to have our securities traded on the OTC Bulletin Board. There is no relationship,

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whether
contractual or otherwise, between us and the OTC Bulletin Board, and the OTC Bulletin Board exercises no regulatory oversight over us.

On
January 16, 2008, the TSX announced that it was reviewing the securities of Quebecor World with respect to meeting the requirements for continued listing and that Quebecor
World was being granted 30 days in which to regain compliance with these requirements, pursuant to the TSX's Remedial Review Process. However, following the publication of the Court's Initial
Order under the Insolvency Proceedings on January 21, 2008, Quebecor World was informed that the TSX's review of the listing of its Subordinate Voting Shares, Series 3 Preferred Shares
and Series 5 Preferred Shares had been stayed until February 20, 2008 or such later date as the Court may order, pursuant to the Initial Order. There can be no assurance, however, that
the TSX will continue to take the position that, in light of the ongoing Insolvency Proceedings, it should not seek to de-list our Subordinate Voting Shares, Series 3 Preferred
Shares or Series 5 Preferred Shares in the event one or more of our listed series or classes of securities fails to comply with the TSX's listing requirements.

If
we fail to meet any of the TSX's continued listing requirements and the TSX attempts to enforce compliance with such requirements, our Subordinate Voting Shares, Series 3
Preferred Shares or Series 5 Preferred Shares may be de-listed from the TSX. In such event, there can be no
assurance that trading in our currently listed securities will continue, through the OTC Bulletin Board or otherwise. Any de-listing of our Subordinate Voting Shares, Series 3
Preferred Shares or Series 5 Preferred Shares may adversely affect a holder's ability to dispose of, or to obtain quotations as to the market value of, such securities.

An active trading market for our debt securities may not develop.

Our various notes, debentures and other debt securities are not listed on any U.S. or foreign securities exchange. Some of our debt
securities have been rendered eligible for trading in the Private Offerings, Resale and Trading through Automatic Linkages, or PORTALSM, Market. The market-makers of our various notes,
debentures and other debt securities that are eligible for trading on the PORTALSM Market may cease their market-making at any time without notice. Accordingly, we cannot provide any
assurance with respect to the liquidity of the market for such debt securities or the prices at which investors may be able to sell our debt securities. In addition, the market for
non-investment grade debt has historically been subject to disruptions that caused volatility in prices. It is possible that the market for our various notes, debentures and other debt
securities will be subject to disruptions. Any such disruptions may have a negative effect on the ability of investors to sell such debt securities regardless of our prospects and financial
performance.

U.S. investors in our securities may have difficulties enforcing certain civil liabilities.

Quebecor World is governed by the laws of Canada and a number of our subsidiaries are governed by the laws of a jurisdiction outside of
the United States. Moreover, our controlling persons and a majority of our directors and officers are residents of Canada or other jurisdictions outside of the United States and all or a
substantial portion of their assets and a significant portion of our assets are located outside of the United States. As a result, it may be difficult for our securityholders to effect service
of process upon us or such persons within the United States or to enforce, against us or them in the United States, judgments of courts of the United States predicated upon the
civil liability provisions of U.S. federal or state securities laws or other laws of the United States. There is doubt as to the enforceability, in certain jurisdictions outside the
United States, of liabilities predicated solely upon U.S. federal or state securities laws against us, our controlling persons, directors and officers who are not residents of the
United States, in original actions or in actions for enforcements of judgments of U.S. courts.

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ITEM 4INFORMATION ON THE CORPORATION

AHistory and Development of the Corporation

History of the Corporation

We were incorporated on February 23, 1989 pursuant to theCanada Business Corporations
Act(the "CBCA") under the name "Quebecor Printing Inc." ("Quebecor Printing"). On January 1, 1990, our predecessor, Quebecor Printing, Quebecor Printing
Group Inc., Quebecor Printing (Canada) Inc., 166599 Canada Inc., Ronalds Printing Atlantic Limited and 148461 Canada Inc. amalgamated under the name "Quebecor
Printing Inc." pursuant to the CBCA. This corporate reorganization was undertaken in order to consolidate the assets of the printing sector of Quebecor Inc., our controlling shareholder,
which, prior to such reorganization, consisted of a number of divisions and subsidiaries.

On
October 8, 1999, Quebecor Printing acquired all of the outstanding shares of World Color Press, Inc. by way of merger and, on April 25, 2000, Quebecor Printing
changed its name to "Quebecor World Inc." by filing articles of amendment under the CBCA.

Our
head office is located at 999 de Maisonneuve Boulevard West, Suite 1100, Montreal, Quebec, Canada, H3A 3L4. Our telephone number at our head office is
(514) 954-0101. Our fax number is (514) 954-9624 and our web site is www.quebecorworld.com. Any information or documents on our website are not, however, included
in, nor shall any of such information or documents be deemed to be incorporated by reference into, this annual report.

Creditor Protection and Restructuring

On January 21, 2008, or the Filing Date, we obtained the Initial Order from the Court granting creditor protection under the
CCAA for the Applicants. On the same date, the U.S. Subsidiaries filed a petition under Chapter 11 in the U.S. Bankruptcy Court. Our Latin American subsidiaries are not subject to
the Insolvency Proceedings and, prior to their disposition as discussed below under "Other Significant Events", nor were our European subsidiaries. Pursuant to the Insolvency Proceedings,
the Applicants are provided with the authority, among other things, to continue operating the Applicants' businesses (subject to court approval for certain activities), file with the Court and submit
to creditors a Plan and operate an orderly restructuring of the Applicants' businesses and financial affairs, in accordance with the terms of the Initial Order. Ernst & Young Inc. has
been appointed by the Court as Monitor in the Canadian Proceedings. Pursuant to the terms of the orders made in the Insolvency Proceedings, as amended, the Monitor was appointed to monitor the
business and financial affairs of the Applicants and, in connection with such role, the Initial Order imposes a number of duties and functions on the Monitor, including, but not limited to, assisting
the Applicants in connection with their restructuring and reporting to the Court on the state of the business and financial affairs of the Applicants and on developments in the Insolvency Proceedings,
as the Monitor considers appropriate. Reference should be made to the Initial Order (available on Quebecor World's website at www.quebecorworld.com) for a more complete description of the duties and
functions of the Monitor.

Chapter 11
provides for all actions and proceedings against the U.S. Subsidiaries to be stayed during the continuation of the U.S. Proceedings. The Initial Order
also provides for a general stay, which has been extended in Canada at various times since it was first rendered and is subject to further extensions as the Court may deem appropriate. The current
expiration of the stay period in Canada is May 31, 2009. The applicable stays generally preclude parties from taking any actions against the Applicants. The purpose of the stay period and the
Insolvency Proceedings is to provide the Applicants the opportunity to stabilize their operations and businesses and to develop a business plan, all with a view to proposing a Plan. Any such Plan will
be subject to approval by affected creditors, as well as the approval of the Court.

On
March 26, 2009, the U.S. Bankruptcy Court extended the period during which the U.S. Subsidiaries have the exclusive right to file a Plan or Plans until
April 27, 2009, and the exclusive

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period
during which the U.S. Subsidiaries have the exclusive right to solicit acceptance of such Plan or Plans until June 26, 2009. There can be no assurance that the
U.S. Bankruptcy Court will grant any further extension of these periods. In addition, the U.S. Bankruptcy Court has the power to terminate such periods, and, in all events, the
U.S. Bankruptcy Code provides for maximum exclusivity periods of 18 months and 20 months from the Filing Date, respectively, to file and solicit acceptance of a Plan or Plans.

Note 1
to our audited consolidated financial statements included elsewhere in this annual report provides further details regarding the current status of the Insolvency
Proceedings, including the status of the claims review process and the preparation of our five-year business plan, the factors that contributed to the Insolvency Proceedings, our DIP
Credit Agreement and other related matters.

Other Significant Recent Events

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BBusiness Overview

Our Business

We are a leader in providing high-value, complete market solutions, including pre-print, print and
post-print services to leading retailers, branded goods companies, catalogers as well as to leading publishers of magazines, books, directories and other printed media. We are also one of
the few commercial printers able to serve customers on a regional, national and international basis. We are a leader in most of the services that we offer in our principal geographic markets. Our
market-leading positions have been established through a combination of building long-term partnerships with the world's leading print media customers, investing in key strategic
technologies and expanding operations through acquisitions.

We
have 87 printing and related facilities located in North America and Latin America. In the United States, we are the second largest commercial printer with
67 facilities in 26 states, and we are a leader in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. We are the second largest commercial printer
in Canada with 13 facilities in five provinces through which we offer a diversified mix of printed products and related value-added services to the Canadian market and internationally. We are
also the largest commercial printer in Latin America, with seven facilities operating in Argentina, Brazil, Chile, Colombia, Mexico and Peru. We operate both rotogravure and web offset presses in our
various facilities, which provide our customers long-run, short-run and multi-versioning options as well as a variety of other value-added services, and which also enable us to
print simultaneously for our customers in multiple facilities reducing cycle time and transportation costs.

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The
following table summarizes the location of our printing and related facilities:

LOCATION

# OF
FACILITIESUnited States(Arkansas, California, Colorado, Connecticut, Florida, Georgia, Illinois, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania,
Tennessee, Texas, Virginia and West Virginia)


67Canada(Alberta, British Columbia, Nova Scotia, Ontario and Quebec)


13Latin America(Argentina, Brazil, Chile, Colombia, Mexico and Peru)


7Total:


87


The primary print services we offer in North America relate to the production of retail inserts, catalogs, Sunday magazines and direct mail, which
we refer to as marketing solutions services, and to the production of book, magazine and directories, which we refer to as publishing services. We also offer to our U.S. and Canadian clients various
other print-related services, which we refer to as pre-media and logistics services. These services are described in more detail below.

Our
customers include many of the largest publishers, retailers and catalogers in the geographic areas in which we operate. With respect to retail inserts, our customers include Sears,
JC Penney, Kohl's, Albertson's, Comp USA and Wal-Mart. We print catalogs for customers such as Williams-Sonoma, Bass Pro, Redcats and Victoria's Secret. Our book publishing customers
include Reader's Digest Association, McGraw-Hill, Scholastic, Harlequin Enterprises, Thomas Nelson, Simon & Schuster and Imagitas, Inc. We print magazines for publishers
including Time, Hearst, Hachette, Source Interlink Media, Wenner Media, Meister Media Worldwide, Amos Publishing, Reader's Digest Association and Affinity Group Inc. Our directories customers
include Dex Media, Yellow Book USA and Yellow Pages Group (Canada).

We
also offer a range of marketing solutions services and publishing services in Latin America to marketers, retailers and publishers in their respective geographical areas.

Overview of our Industry

Commercial printing is a highly fragmented, capital-intensive industry. The North American and Latin American printing industries are
very competitive in most product categories and geographic regions. We believe that the ten largest competitors in the North American commercial printing market have less than 25% of the total share
of each of their respective markets. In 2006, in the United States alone, there were approximately 30,700 commercial printers.

Commercial
printers tend to compete within each product category based on price, quality, range of services offered, distribution capabilities, customer service, availability of printing
time on appropriate equipment and state-of-the-art technology. Small competitors are generally limited to servicing customers for a specific product category within
a regional market. Larger and more diversified commercial printers with greater geographic coverage, such as us, have the ability to serve national and international customers across multiple print
service categories.

We
believe that the trend towards consolidation will continue as larger commercial printers displace medium-size printers and regional competitors. Industry trends in Latin
America, which are mirroring historical developments in North America, indicate that this market may also undergo consolidation.

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In addition, technological changes continue to increase the accessibility and quality of electronic alternatives to traditional delivery of printed documents
through the increased use of the Internet and the electronic distribution of media content, documents and data. While the acceleration of consumer acceptance of such electronic media will probably
continue to increase, we believe that the value and role of printed media should continue to play a strong role in marketing, advertising and publishing because, in our view, print media is an
efficient and effective vehicle to market and advertise products. We believe that in a multichannel marketing strategy, print should continue to play a key and important role. We further believe that
a significant percentage of the purchases over the Internet are based upon a buying decision based upon a catalog or retail insert, and that print plays a synergistic role with many of the new
technologies.

Description of Business Segments and Print Services

We operate in the commercial print media segment of the printing industry and our business segments are located in two main
geographical regions: North America and Latin America. In North America, our print and print-related services are offered by four business groups: the Marketing Solutions Group, the Publishing
Services Group, the Pre-Media and Logistics Group and the Canada Group.

Our
Latin American business group offers the same broad range of print services as its North American counterparts, other than direct mail products.

Marketing Solutions Services

Retail Inserts

Our major retail insert customers include some of the largest retailers in North America and Latin America, such as CVS (Consumer Value
Stores), JC Penney, Kohl's, Sears, Wal-Mart and Walgreens. We believe that we are the leading retail insert printer in North America, where our unique
coast-to-coast rotogravure and web offset network provides retailers with a dual-process option for long-run and multi-versioned advertising campaigns.

Catalogs

We are one of the largest printers of catalogs in North America. Our catalog customer base includes Williams-Sonoma, Oriental Trading
Company, Victoria's Secret, Cabela's, Bass Pro, Redcats and many others. We offer special catalog services, such as list services, to help customers compile effective lists for distribution,
co-mailing, co-stitching and selective-binding capacity, as well as providing ink-jet addressing and messaging to personalize messages for each recipient. These and
other value-added services allow our customers to vary catalog content to meet their customers' demographic and purchase patterns. Our geographic reach also allows us to offer our customers
one-stop shopping for all of their catalog needs.

Sunday Magazines

We believe that we are the industry leader in the production of the major weekend newspaper magazines, ParadeandUSA Weekend, as well as locally edited and distributed titles. These are
four-color magazines inserted in major-market weekend newspapers.

Direct Mail

We are a North American industry leader in direct mail production. Two of our facilities, located in Atlanta, GA and Effingham, IL, are
direct mail mega-facilities that provide complete direct mail production services from the data programming stages through to bulk mailing. We can produce

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everything
from traditional direct mail packages to complex personalized in-line finished packages. Approximately 90% of the manufacturing (except for conventional envelopes) is done
in-house thereby streamlining the production process and reducing cycle time and transportation costs. Our sophisticated inkjet imaging technology allows us to apply variable messages in
up to sixteen different locations on a single printed piece and in virtually any font or color with resolutions of up to 240 dpi.

Furthermore,
we have the capability to combine and co-ordinate all the pieces of multi-component marketing materials in virtually one pass through the press. By combining
these features with our highly complex in-line imaging capability, we can provide clients with more targeted and personalized marketing vehicles.

Publishing Services

Books

We are a North American industry leader in book manufacturing. We print books for many of the world's leading publishers, including
McGraw-Hill, Scholastic, Harlequin Enterprises, Simon & Schuster, Thomas Nelson, Time-Warner, Reader's Digest Association, Imagitas and Pearson Education. We are an
industry leader in the application of new technologies for book production, including electronic pre-media, information networking and digital printing. With facilities in North America
and Latin America, we serve more than 750 book publishing customers internationally.

Our
Latin American platform serves as a competitive alternative to Asia in the printing of books. It is also well positioned to service North American book publishers in the printing of
books for which time-to-market is not as significant a factor.

In
keeping with our full-service approach, we also provide on-demand digital printing services for small quantities of books, brochures, technical documents and
similar products to be produced quickly and at a relatively low cost.

Magazines

We are one of the leading printers of consumer magazines in the United States. We print more than 1,000 magazine titles,
including industry leading titles such asEllefor Hachette-Fillipachi Magazines US,Cosmopolitanand Good
housekeepingfor Hearst Corp.,Maximfor Alpha Media Publishing, Forbesfor Forbes Inc.,ESPN The
Magazinefor Walt Disney Corp.,In Touch
Weeklyfor Bauer Publishing USA,Family HandymanandWeekly Readerfor Reader's
Digest Association andRolling Stone,US WeeklyandMen's
Journalfor Wenner Media. We operate an international print platform with operations in the United States, Canada and Latin America. As the industry leader in weekly
publishing, we produce more than 15 magazine titles for Time, Inc., includingTime, Sports Illustrated, People, Entertainment Weekly, Time For Kids. We also produce magazine titles such asFortune, Money, Southern Living, Cooking Light, Coastal Living, Southern
AccentsandPeople en Español.

We
have invested in pre-media and post-press technology to enhance our ability to service this market by providing publishers with before and after print
services. Our co-mailing and other logistics services help publishers reduce costs and improve distribution. For the production of medium to long-run magazines, we believe that
we are at an advantage because our facilities have selective-binding and ink-jet-imaging capabilities and can utilize our mail analysis system.

Directories

We are the largest directory printer in Canada and one of the leading directory printers in the United States and Latin America.
We print directories for some of the largest directory publishers in the world, including Dex Media, Yellow Book USA, RH Donnelley, Windstream and Frontier in the United States, the Yellow
Pages Group in Canada, as well as Telmex and Telefonica in Latin America.

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Pre-Media and Logistics Services

Pre-Media Services

We are a leader in the transition from conventional pre-press to an all-digital workflow, providing a complete
spectrum of film and digital preparation services, from traditional creative services and color separation to state-of-the-art, all-digital
pre-media, as well as digital photography and digital archiving. Such pre-media services include the color electronic pre-media system, which takes art work from
concept to final product, and desktop publishing, giving the customer greater control over the finished product. These pre-media services are especially helpful to smaller customers, who
may not have the capital to employ such equipment or who may have to rely on third-party vendors, which may result in coordination and delay problems. Our specialized digital and pre-media
facilities, which are strategically located close to and, in certain cases, onsite at, customers' facilities, provide our customers high-quality, 24-hour preparatory services
linked directly to our various printing facilities. In addition, our computer systems enable us to electronically exchange both images and textual material directly between our facilities and our
customers' business locations. We believe that our integrated pre-media operations provide us with competitive advantages over traditional pre-press shops that are not able to
provide the same level of integrated services. Our
pre-media services bring together the full range of digital technologies and pre-media assets within our corporate group that allows us to focus on providing a more
comprehensive range of solutions to our customer base.

Logistics Services

Other value-added services, including mail list, shipping and distribution expertise, ink-jet personalizing,
customer-targeted binding and creative services, are increasingly demanded by our customers.

Quebecor
World Logistics ("QWL") provides logistics and mail list services for both Quebecor World as well as third-party customers, managing distribution and mailing
services for catalogs, direct mail, magazine (subscriber copies and newsstand), newspaper inserts, books and bulk printed products. QWL uses scale to consolidate volume and a comprehensive menu of
electronic tracking options to efficiently plan all deliveries. QWL provides customized, flexible mailing strategies based on customers' specific in-home delivery requirements.

See
"Item 5.Operating and Financial Review and Prospects" for certain financial information and results on a geographic and segmented basis.

Manufacturing and Technology

Description of Manufacturing Processes and Equipment

We
use principally two types of printing processes, rotogravure and offset, which are the most commonly used commercial printing processes. Both processes have
undergone substantial technological advances over the past decade, resulting in significant improvements in both speed and print quality.

Rotogravure

The
rotogravure process uses a copper-coated printing cylinder that is mechanically engraved using high-precision, computer-controlled and
diamond-cutting heads. Although the engraving of the printing cylinder is relatively expensive, the printing cylinder itself is extremely durable and cost-effective per long run. The
rotogravure process has an excellent reputation for the quality of its four-color reproductions on various grades of paper and the very high speed at which it is capable of running.
Rotogravure also provides the advantage of offering multiple cut-off sizes. With 60 rotogravure presses, we are one of the largest world-wide printers using the
rotogravure process.

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The
rotogravure process is well suited to long-run printing of retail inserts and circulars, weekend newspaper magazines and other high-circulation magazines and
catalogs. We believe that our coast-to-coast network of rotogravure facilities in North America offers both the capacity and broad geographic presence required by large
retailers and publishers. Our advanced ability in rotogravure digital pre-media also ensures more efficient and accurate production of the same insert simultaneously in multiple locations,
thereby offering the customer the efficiency and cost savings of manufacturing and distribution closer to its end-use markets in reduced time frames.

Offset

In
the offset process, ink is transferred from rollers to a thick metal plate and then to a rubber blanket, which in turn transfers the image to the web
(paper). There are several types of offset printing processes: sheetfed and web; and heatset and coldset. Sheetfed presses print on sheets of paper, whereas web presses print on rolls of paper.
Short-run printing is generally best served by sheetfed offset, whereas web offset is generally the best process for longer runs.

Heatset
web offset involves a press which uses an oven to instantly set or dry the oil-based inks. This permits high speed and better quality and is best suited for printing
on glossier papers (coated paper). Heatset web offset is used to print retail inserts, magazines, catalogs and books. We operate 270 heatset web offset presses.

Coldset
web offset involves a press that does not use an oven to dry the ink, instead using oil-based inks that are absorbed into the paper and dried by oxidation. Coldset
web offset is used mainly to print newspapers, books, directories and some retail inserts. We operate 37 coldset web offset presses.

We
also operate 62 sheetfed offset presses, which print books, promotional material, covers and direct-mail products.

Technology

We
cooperate with large suppliers in the area of research and development of new printing technologies, materials and processes. Our capital-improvement
programs include adding, replacing and upgrading existing equipment.

In
the past several years, we have invested in faster, more efficient and higher quality presses. In July 2004, we announced, as part of our retooling program, our intention to
purchase latest generation web offset presses targeted for the magazine, catalog, retail and book platforms of our U.S. operations. This allowed us to further improve efficiency and meet the
needs of both publishers and retailers. Since July 2004, we have installed 20 new presses, due mainly to our retooling program.

As
part of our restructuring process, we may re-allocate, re-purpose, move and de-commission a certain number of our presses with a view to maximizing
the efficient use of our equipment and technology.

Pre-media
has continued to adapt to ever changing technology advancements and embrace web-enabled digital workflows as part of our offerings to customers. The
latest hardware and software solutions help drive the services upstream in the creative process and downstream to print and web media options. We have deployed content management systems and services
to bridge the information to multiple media channels. We have been an industry leader in bringing new on-line imaging services in conjunction with traditional pre-media
services and color management, which streamline the production of pages for print. We have pioneered the digital engraving process for gravure and early adoption to
computer-to-plate process for offset printing to optimize the color quality and consistency on our presses. Migration to a complete portable data format, also known as PDF,
workflow simplifies and standardizes the process. We also believe that we have established one of the industry's most

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efficient
virtual private data communications network (or VPN), capable of transmitting customer files from our pre-media centers to multiple print facility locations. Virtual Soft
Proofing technology has allowed viewing of images and pages across the Internet that will ultimately improve schedules and enable last-minute changes.

We
have also upgraded our U.S. rotogravure network with a view to improving efficiency and service to our magazine, catalog, retail insert and weekend newspaper magazine
customers. We were one of the first commercial printers in North America to install short cut-off tabloid offset presses. These presses print more pages at faster speeds and use less paper
than do conventional tabloid presses. We have also invested in new and emerging digital and web-based technologies to improve services, reduce costs and expand our range
of products.

We
operate a North American-wide telecommunications network, which enhances our ability to move digital files between our facilities and customers quickly, share work among
facilities, and expand distribution and printing operations.

Sales and Marketing

Our sales and marketing activities are highly integrated and reflect an increasingly international approach to meeting customers' needs
that are complemented by product-specific sales efforts. Sales representatives are located in facilities or in regional offices throughout North America and Latin America, generally close to their
customers and prospects. Each sales representative has the ability to sell into any facility in our network. This enables the customer to coordinate simultaneous printing throughout our network
through one sales representative. Some larger customers prefer to centralize the purchase of printing services and, in this regard, our ability to provide broad geographical services is clearly an
advantage over smaller regional competitors.

Purchasing and Raw Materials

The principal raw materials used in our products are paper and ink. In 2008, we spent approximately US$1.4 billion on raw
materials (excluding materials with respect to our European operations that we disposed of in June 2008). We exercise our purchasing power to obtain pricing, terms, quality, quality control and
service in line with our status as one of the largest industry customers.

For
most of our purchases, we negotiate with a limited number of suppliers to maximize our purchasing power, but we do not rely on any single supplier. Purchasing activity at both the
local plant and corporate level is coordinated in order to increase and benefit from economies of scale. Inventory-control operations are also integrated into our purchasing functions, which has
resulted in improvements in inventory turnover. Inventories are also managed and tracked on a regional basis, increasing the utilization of existing inventories.

We
take pride in offering world-wide procurement services to our customers. We believe that our global procurement practices provide us with a competitive advantage, which
allows us to reduce administrative costs, standardize procurement and provide customers with assured supply at attractive prices.

Competitive Environment

The commercial printing business is highly competitive in most product categories and geographic segments. Industry analysts consider
most of the industry's markets to be currently oversupplied, and competition is significant. Competition is largely based on price, quality, range of services offered, distribution capabilities,
customer service, availability of printing time on appropriate equipment and state-of-the-art technology.

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Seasonality of the Corporation's Business

Operations in the print business are seasonal, with the majority of our historical operating income during the past five financial
years being realized in the second half of the financial year, primarily due to the higher number of magazine pages, new product launches and back-to-school, retail and holiday
catalog promotions.

Government Regulations

Environment

We
are subject to various laws, regulations and government policies relating to the generation, storage, transportation, and disposal of solid waste, to noise,
air and water releases of various substances into the environment, and to the protection of the environment in general. We believe we are in compliance with applicable laws and requirements in all
material respects.

We
are also subject to various laws and regulations, which allow regulatory authorities to compel (or seek reimbursement for) the cleanup of environmental contamination at our own
sites and at off-site facilities where waste is or has been disposed of. We have established a provision for expenses associated with environmental remediation obligations, as well as
other environmental matters, when such amounts can be reasonably estimated. The amount of the provision is adjusted as new information is known. We believe the provision is adequate to cover the
potential costs associated with the remediation of environmental contamination found on-site and off-site as well as other environmental matters.

We
expect to incur ongoing capital and operating costs to maintain compliance with existing and future applicable environmental laws and requirements, as well as to address equipment and
process upgrades over the next few years as part of an overall environmental compliance plan. Furthermore, we do not anticipate that maintaining compliance with existing environmental statutes will
have a material adverse effect upon our competitive or consolidated financial position.

We
believe we have internal controls and personnel dedicated to compliance with all applicable environmental laws and that we provide for adequate monitoring and management of the
environmental risk related to our operations. As of the date of this annual report, we believe that there are no new environmental matters (environmental incident, promulgation of new environmental
laws and regulations, soil and groundwater contamination discovery, etc.) to be reported that could have a material impact on our operations.

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COrganizational Structure

The following organizational chart shows our principal subsidiaries, along with their governing jurisdiction and our ownership interest
in each such subsidiary. Subsidiaries whose total assets and revenues represented (a) individually, less than 10% of our consolidated assets and revenues as at and for the financial year ended
December 31, 2008 and (b) in the aggregate, less than 20% of our consolidated assets and revenues as at and for the financial year ended December 31, 2008, have not been included.
We completed the sale of our European operations on June 26, 2008 (see "Item 4.Information on the CorporationHistory and Development of the Corporation")
and, consequently, our European holding company, Quebecor World European Holding S.A., is not presented in the corporate chart below.

GRAPHIC

DProperty, Plants and Equipment

Our corporate offices, comprising 38,181 square feet, are located in a leased space at 999 de Maisonneuve
Boulevard West, Montreal, Quebec, Canada, H3A 3L4. In addition, we own or lease 67 facilities in the United States, 13 facilities in Canada and 7 facilities in Latin
America. Many of these facilities have multiple buildings and warehouses. Our facilities occupy approximately 16.0 million square feet of premises in the United States,
approximately 2.0 million square feet in Canada and approximately 1.3 million square feet in Latin America.

Our
DIP Credit Agreement is secured by a charge over all of our assets and those of our subsidiaries.

See
also "Item 4.Information on the CorporationBusiness OverviewManufacturing and Technology" for a description of the rotogravure and
offset presses operated by us.

ITEM 4AUNRESOLVED STAFF COMMENTS

None.

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ITEM 5OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following operating and financial review provides information concerning our operating results and
financial condition. This discussion should be read in conjunction with our consolidated financial statements and accompanying notes included under "Item 17.Financial Statements"
in this annual report. It also contains forward-looking statements, which are subject to a variety of factors that could cause actual results to differ materially from those contemplated by these
statements. See "Forward-Looking Statements" and "Item 3.Key InformationRisk Factors."

A.    Operating Results

The following is a discussion of the consolidated financial condition and results of operations of Quebecor World Inc. for the years ended
December 31, 2008 and 2007, and for the three-month periods then ended, and it should be read together with our consolidated financial statements. All references made to "Notes" in this
discussion correspond to the Notes to the consolidated financial statements for the year ended December 31, 2008. Our consolidated financial statements have been prepared in accordance with
Canadian GAAP. For a discussion of the principal differences between Canadian GAAP and U.S. GAAP, see Note 30.

Basis of Presentation

On January 21, 2008, Quebecor World Inc. obtained an order from the Quebec Superior Court granting creditor protection
under theCompanies' Creditors Arrangement Act(Canada) for itself and for 53 U.S. subsidiaries. On the same date, these
U.S. subsidiaries filed a petition under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Pursuant to these
Insolvency Proceedings, we are provided with the authority to, among other things, continue operating our business without interruption as debtor-in-possession, subject to
court approval for certain activities, with a view to an orderly restructuring of our business and financial affairs through the implementation of a plan of compromise or arrangement. For further
information regarding the Insolvency Proceedings, see Note 1.

Our
consolidated financial statements have been prepared using the same Canadian GAAP as applied by us prior to these Insolvency Proceedings, and continue to be prepared using the going
concern concept, which assumes that we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. It is not possible to predict the
outcome of the Insolvency Proceedings and, as such, realization of assets and discharge of liabilities is subject to significant uncertainty. If the going concern basis were to cease being
appropriate, adjustments would be necessary to the carrying amounts and/or classification of assets and liabilities, and to the expenses in the consolidated financial statements.

If
a restructuring occurs and there is substantial realignment of the equity and non-equity interests in Quebecor World, we will be required, under Canadian GAAP, to adopt
"fresh start" reporting. Under fresh start reporting, we would undertake a comprehensive re-evaluation of our assets and liabilities based on the reorganization value as established and
confirmed in the plan of reorganization.

Overview

Quebecor World operates in the commercial print media segment of the printing industry, serving our customers on a regional, national
and international basis. We are a leader in providing high-value, complete market solutions, including pre-print, print and post-print services, to leading
retailers, branded goods companies, catalogers as well as to leading publishers of magazines, books, directories and other printed media.

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Quebecor
World has two business segments: North America and Latin America. The primary print services that we offer in North America relate to the production of retail inserts, catalogs,
Sunday magazines and direct mail, referred to as marketing solutions services, and to the production of books, magazines and directories, referred to as publishing services. We also offer our U.S. and
Canadian clients various other print-related services, referred to as pre-media and logistics services. In Latin America, we offer a range of marketing solutions services and publishing
services to marketers, retailers and publishers in several countries.

Review of Operating Results

Our financial performance has suffered in the past few years, especially with respect to our European operations, which were funded, in
part, with cash flows generated by the North American operations, as a result of a combination of factors, including declining prices and sales volume, and temporary disturbances and inefficiencies
caused by a major retooling and restructuring of our printing operations initiated in 2004. The combination of significant capital investments and continued operating losses, principally as a result
of our European operations, resulted in increased financing needs. During the last quarter of 2007, it was also necessary for us to repurchase certain senior notes in order to avoid breaching certain
financial ratios, while also facing a reduction in amounts available under our revolving bank facility.

Other
events further hindered our efforts to improve our balance sheet and financial position. First, on November 20, 2007, we announced the withdrawal of a refinancing plan
previously announced on November 13, 2007 due to adverse financial market conditions. Second, on December 13, 2007, we announced that we would not be able to consummate a previously
announced transaction to sell/merge our European operations, which otherwise would have resulted in proceeds being paid to us.

On
December 31, 2007, we obtained a waiver from our bank syndicate lenders and from the sponsors of our North American securitization program, subject to the satisfaction of
certain conditions and refinancing milestones, including obtaining $125 million in new financing by January 15, 2008. On January 16, 2008, we failed to satisfy the conditions and
refinancing milestones set by the bank syndicate lenders, which resulted in us and certain of our subsidiaries being in default of our obligations under our revolving bank facility, our equipment
financing credit facility and our North American securitization program.

As
a result of our unsuccessful efforts to obtain new financing, the inability at the time to conclude the first proposed sale of our European operations and the operational demands of
the Corporation, by mid-January 2008, we were experiencing a severe lack of liquidity and concluded we no longer had the ability to meet obligations which were falling due. Thus, on
January 21, Quebecor World Inc. and 53 of our U.S. Subsidiaries sought and obtained protection from our creditors. Under the Insolvency Proceedings, we continue to operate our
business without interruption as debtor-in-possession under the jurisdiction of the Court, the Monitor and the U.S. Bankruptcy Court. Our Latin American subsidiaries are
not subject to these Insolvency Proceedings. For further information regarding the Insolvency Proceedings, see Note 1.

In
2008, we allocated, and will continue to allocate in 2009, a substantial amount of resources to financial restructuring with a view to negotiating a plan of reorganization that will
be supported by our creditors and confirmed by the Court and the U.S. Bankruptcy Court. Should such a plan be consummated, it is unlikely that Quebecor World's existing Multiple Voting Shares,
Redeemable First Preferred Shares and Subordinate Voting Shares will have any material value, and holders of those securities will likely receive no recovery. Failure to implement a plan and obtain
sufficient exit financing within the time granted by the Court and the U.S. Bankruptcy Court will result in substantially all of the Applicants' debt obligations becoming due and payable
immediately, and will in all likelihood lead to the liquidation of the Applicants' assets.

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Industry Trends and Outlook

Global economic conditions affect our customers' businesses and the markets they serve. The credit crisis and global economic weakness
has resulted in constrained advertising spending and, in certain cases, customer financial difficulties in our North American segment. This has put significant downward pressure on both volumes and,
to a lesser degree, on price, across nearly all of North America's printing and related services, particularly in the fourth quarter of 2008.

During
2008 and continuing in 2009, we undertook various initiatives to adapt our cost structure to the rapidly changing economic environment including:



The
current North American recession is expected to continue to put downward pressure on volumes and prices as retailers and publishers further adjust their budgets for printing
services. Competition in the industry remains intense as the industry is still in the process of consolidating and is still suffering from overcapacity. Under these conditions, we are focusing on
improving our product and segment mix, adding customer value through initiatives, such as our new integrated multi-channel solutions and improving productivity through continuous improvement projects
and technology. We are also aggressively aligning our cost structure to mitigate the impact of the economic downturn.

Latin
America has not been, nor is it expected to be, as affected by the global economic difficulties as North America. With planned investments in new capacity, this segment's revenues
are forecast to increase in line with expected growth from an existing customer base.

Results of Operations

The tables in the following discussion present selected consolidated financial information and operating data for the
three-year period ended December 31, 2008. The annual financial information in the tables was derived from our consolidated financial statements and related Notes included elsewhere
in this annual report, and the fourth quarter financial information was derived from our consolidated financial statements. The information in the tables should be read in conjunction with such
consolidated financial statements. Certain comparative information has been reclassified on a basis consistent with the 2008 presentation.

Management
assesses the Corporation's performance based on, among other measures, operating income and Adjusted EBIT. Certain of these measures are not defined by Canadian GAAP. A
reconciliation of non-GAAP measures to their respective closest GAAP measures, together with a discussion of their use, is provided below (Figure 5).

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The
following financial review focuses only on continuing operations; discontinued operations are treated separately under "Discontinued Operations".

GRAPHIC

Figure 1

Selected Annual Information (Continuing Operations)
($ millions, except per share data)

Years ended December 31,2008

2007

2006Consolidated ResultsRevenues

$
4,016.9

$
4,654.5

$
5,060.9Adjusted EBITDA


379.4


479.5


545.6Adjusted EBIT


121.0


169.3


261.8IAROC


242.1


223.6


66.2Goodwill impairment charge


341.1


1,832.9


Operating income (loss)


(462.2
)

(1,887.2
)

195.6Net income (loss) from continuing operations


(943.9
)

(1,837.4
)

118.8Net income (loss)


(1,659.3
)

(2,200.4
)

28.3Financial PositionTotal assets


2,820.4


4,163.0


5,823.4Total indebtedness(1)


646.6


2,890.9


2,132.4Per Share DataEarnings (loss) per share from continuing operationsBasic and diluted


(5.26
)

(14.10
)

0.65Adjusted diluted


(2.06
)

0.31


0.97Earnings (loss) per shareBasic and diluted


(9.18
)

(16.85
)

(0.04
)Dividends on preferred shares





1.44


1.46Dividends declared on preferred shares liability





1.77


Dividends on equity shares








0.30


Figure 2

IAROC: Impairment of assets, restructuring and other charges

Adjusted
earnings (loss) per share exclude the following items: IAROC, goodwill impairment charge, and reorganization items net of tax (Figure 5)

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Impact of Foreign Currency and Paper Sales
($ millions)

Periods ended
December 31, 2008Three months

Twelve monthsForeign currency favorable (unfavorable) impact on revenues

$
(47.9
)
$
10.7Paper Sales favorable (unfavorable) impact on revenues

$
(53.1
)
$
(225.2
)Foreign currency (unfavorable) impact on operating income

$
1.0

$
(2.1
)


Figure 3

Fiscal Year ended December 31, 2008 Compared to Fiscal Year ended December 31, 2007

Revenues

Our consolidated revenues for 2008 were $4.0 billion, a 13.7% decrease when compared to $4.7 billion for 2007 and down
9.1% excluding the impact of currency translation and paper sales (Figure 3). The decrease in revenues resulted primarily from lower volumes due to the North American recession, plant closures,
lower paper sales, and to a lesser extent, the impact of the Insolvency Proceedings. Despite negative competitive price pressures, overall revenues per number of impressions appeared stable, primarily
due to improvements in product mix. More details are provided under "Segment Results".

Paper
sales, excluding the effect of currency translation, decreased by 17.5% during 2008 compared to 2007. The decrease in paper sales is mostly explained by lower production volumes.
Although the variance in paper sales has an impact on revenues, it has little impact on operating income because the cost is generally passed on to the customer. Most of our long-term
contracts with our customers include price-adjustment clauses based on the cost of materials in order to minimize the effects of paper price fluctuations.

Operating Income and Adjusted EBIT

Adjusted EBIT decreased to $121.0 million, compared to $169.3 million in 2007. Adjusted EBIT margin was 3.0% for 2008,
compared to 3.6% for 2007. The reduction of adjusted EBIT results from the reduction in revenues, but was partially offset by the decrease in cost of sales, selling, general and administrative
expenses and securitization fees.

Cost
of sales decreased by 13.1% to $3.5 billion, compared to $4.1 billion in 2007. Excluding depreciation and amortization of $229.4 million in 2008 and
$238.7 million in 2007, cost of sales decreased by 13.7%. It is in line with reduced volumes in addition to a reduction in labor costs. Excluding depreciation and amortization, gross profit
margin was 17.5% in 2008, virtually unchanged from 2007.

Selling,
general and administrative expenses were $351.4 million in 2008, compared with $390.5 million in 2007. Excluding depreciation and amortization expenses of
$10.3 million in 2008 and $11.4 million in 2007, selling, general and administrative expenses decreased by 10.0%, compared to the same period in 2007. The favorable variance is mostly
explained by various workforce reduction initiatives as well as lower professional fees. This was partly offset by additional bad debt expense due to certain customers filing for creditor protection
given the exceptionally difficult economic environment. 2008 specific charges affecting selling, general and administrative expenses were

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$5.1 million,
and included losses on disposal of assets partially offset by a net gain on the sale of a corporate aircraft compared to $18.0 million in 2007, of which
$10.8 million was related to net losses on disposals of fixed assets.

Securitization
fees were nil in 2008, down from $15.1 million in 2007, explained by the termination of the North American program as of January 23, 2008.

The
total depreciation and amortization included in cost of sales and selling, general and administrative expenses above were $239.7 million in 2008, compared with
$250.1 million in 2007. Excluding the unfavorable impact of currency translation of $0.9 million, depreciation and amortization expenses decreased 4.5%, compared to 2007.

Overall,
adjusted EBIT was impacted by specific charges that are not normally ongoing costs of operations. These specific charges were $24.5 million in 2008 and related mainly to
accelerated depreciation of fixed assets and losses on disposal of assets, partially offset by a gain on sale of a corporate aircraft of $9.9 million. This compared to specific charges of
$50.3 million in 2007 which related primarily to accelerated depreciation of fixed assets, net losses on sale and leaseback of equipment and disposal of assets as well as losses on guarantees
provided on equipment leases. The 2007 adjusted EBIT was also negatively affected by a non-cash charge of $38.6 million for accelerated amortization of contract
acquisition costs.

Operating
loss in 2008 was $462.2 million, compared to $1,887.2 million in 2007, largely explained by the significant asset and goodwill impairment charges in 2007,
discussed below.

Other Items

During 2008, we recorded IAROC of $242.1 million, compared to $223.6 million in 2007. The charge for 2008 was mainly
related to the impairment of long-lived assets, the closure and consolidation of facilities in North America as well as workforce reductions. These measures are described below under
"Impairment of Assets and Restructuring Initiatives".

During
2008, we recorded a goodwill impairment charge of $341.1 million compared with $1.8 billion in 2007. See below under "Impairment of Goodwill" for additional
information.

Financial
expenses were $409.9 million in 2008, compared to $178.9 million in 2007. The increase of $231.0 million is explained by several factors, the most
significant of which was a foreign exchange loss of $127.7 million on U.S. dollar denominated debt in the Canadian dollar functional currency of the parent company. Because of the
Insolvency Proceedings, we had to liquidate our currency hedging position in January 2008 and therefore were unable to offset this loss. The remainder of the variance is due primarily to
increased debt levels, largely the DIP financing and the related issuance costs. A portion of the DIP financing was used to assume the North American receivables. The 2007 financial expenses included
a one-time premium on the early repayment of our senior notes of $53.1 million.

We
recorded reorganization items which represent post-filing expenses, gains and losses, and provisions for losses that can be directly associated with the reorganization and
restructuring of the Applicants. The total expense for 2008 was $105.9 million. The cash outflow amounted to $66.6 million and related primarily to professional fees.

Income
tax recovery was $39.3 million for 2008, compared to $238.2 million in 2007. Income tax expense before IAROC and goodwill impairment charge was $53.9 million
for 2008, compared to an income tax recovery of $82.3 million for the same period in 2007. The effective tax rate in 2008 was 4.0% compared to a statutory rate of 31.1%. The difference of 27.1%
was mainly explained by a reserve in relation to the non-deductibility of interest on pre-petition U.S. debts, the goodwill impairment charge that is mostly
non-deductible, as well as an increase in valuation allowance on losses from operations.

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Net Loss

We reported a net loss from continuing operations of $943.9, representing a loss per share of $5.26, compared to a net loss from
continuing operations of $1,837.4 million, representing a loss per share of $14.10 in 2007. These results incorporated IAROC and goodwill impairment charges, net of income taxes, of
$490.0 million or $2.68 per share, compared with $1,900.5 million or $14.41 per share in 2007. Adjusted diluted loss per share was $2.06 for 2008, compared with adjusted diluted earnings
per share of $0.31 in the same period of 2007.

Fiscal Year ended December 31, 2007 Compared to Fiscal Year ended December 31, 2006

Revenues

Our consolidated revenues for 2007 were $4.7 billion, down 8.0% from $5.1 billion in 2006. Excluding the favorable impact
of currency translation, revenues were down 9.3% compared to 2006. The situation is due mainly to decrease in volumes, paper sales and continued price pressures, as further discussed in the "Segment
results" section.

Paper
sales, excluding the effect of currency translation, decreased by 17.7% in 2007, compared to 2006. Variance in paper sales has an impact on revenues, but it has little impact on
operating income because the cost is generally passed on to the customer.

Operating Income and Adjusted EBIT

In 2007, Adjusted EBIT was $169.3 million, down 35.3% from $261.8 million in 2006. Adjusted EBIT margin was 3.6% for
2007, down from 5.2% in 2006.

Adjusted
EBIT was impacted by specific charges that are not normally ongoing costs of operations and which are mainly non-cash. These specific charges were
$50.3 million in 2007 and related primarily to accelerated depreciation on fixed assets, net losses on sale and leaseback of equipment and disposal of assets as well as losses on guarantees
provided on leased equipment. This compared to specific charges of $15.2 million in 2006, which related mainly to accelerated depreciation on fixed assets. The 2007 adjusted EBIT was also
negatively affected by a non-cash charge of $38.6 million for accelerated amortization of contract acquisition costs.

Cost
of sales for 2007 was $4.1 billion, a 7.8% decrease compared to $4.4 billion in 2006. Excluding depreciation and amortization expenses of $238.7 million in 2007
and $239.3 million in 2006, cost of sales decreased by 8.2%. The decrease is explained mostly by lower paper sales, as a result of large clients that began supplying their own paper and a
decrease in labor costs. Excluding depreciation and amortization, gross profit margin was 17.5% for 2007, compared to 17.3% in 2006. Currency translation had a slight positive impact on gross profit
margin for the year 2007.

Selling,
general and administrative expenses for 2007 were $390.5 million, higher by 12.9% compared to $345.9 million in 2006. Excluding depreciation and amortization
expenses of $11.4 million in 2007 and $14.9 million in 2006 and excluding the unfavorable impact of currency translation of $7.0 million, selling, general and administrative
expenses increased by 12.4% compared to the previous year. The increase is due in part to investments in continuous improvement programs, charges related to strategic initiatives as well as financial
advisory fees incurred to find solutions to the Corporation's liquidity challenges.

Securitization
fees decreased by $9.5 million, for a total of $15.1 million for 2007, compared to $24.6 million in 2006. The decrease was mainly due to lower usage
of the programs and the securitization and factoring programs fees presented in financial expenses following the inclusion of the secured financing on the balance sheet, partially offset by higher
interest rates underlying the program fees. Servicing revenues and expenses did not have a significant impact on our results.

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The
total depreciation and amortization included in cost of sales and selling, general and administrative expenses above were $250.1 million in 2007, compared with
$254.2 million in 2006. Excluding the impact of currency translation, depreciation and amortization remained essentially flat in 2007 compared to the previous year. The replacement and
decommissioning of underperforming assets by investments in state-of-the-art printing technology has mostly offset the decrease in depreciation and amortization
expenses caused by plant closures, impairment of long-lived assets as well as sale and leaseback agreements on buildings and equipments.

Operating
loss in 2007 was $1,887.2 million compared to operating income of $195.6 million in 2006, explained by significant asset and goodwill impairment charges
in 2007.

Other Items

For the year 2007, we recorded IAROC of $223.6 million, compared to $66.2 million in 2006. The charge was mainly related
to the impairment of long-lived assets in North America and to the closure and consolidation of facilities in North America as well as workforce reductions. We also recorded pension
settlement charges related to prior year initiatives. These measures are described below under "Impairment of Assets and Restructuring Initiatives".

In
the fourth quarter of 2007, our unsuccessful efforts to obtain new financing and our inability to conclude a proposed sale of our European operations combined with a decline in our
stock price triggered a requirement for a goodwill impairment test related to our reporting units. As a result, we concluded that the goodwill was impaired and a total impairment charge of
$1,832.9 million was recorded for the North American and Latin American reporting units. See below under "Impairment of Goodwill" for additional information.

On
a full year basis, financial expenses were $178.9 million, compared to $114.0 million in 2006. The variance of $64.9 million is partly explained by a one time
prepayment premium of $53.1 million, in the third quarter, for the early redemption of our outstanding 8.42% Senior Notes, Series A, due July 15, 2010, 8.52% Senior Notes,
Series B, due July 15, 2012, 8.54% Senior Notes, Series C, due September 15, 2015 and 8.69% Senior Notes, Series D, due September 15, 2020. The variance is
also explained by a lower amount of interest capitalized to the cost of equipment due to the finalization of our retooling plan as well as the premium paid and loss incurred on the redemption of our
6.00% Convertible senior subordinated notes during the second quarter of 2007. In addition to those elements, the increase was also caused by higher interest rates, a higher average level of debt and
the depreciation of the U.S. currency against other major currencies.

Income
tax recovery was $238.2 million in 2007, compared to $38.0 million in 2006. Income tax recovery before IAROC and goodwill impairment charge was $82.3 million
for 2007, compared to $14.1 million for the same period in 2006. The income tax recovery in 2007 was mainly due to the long-lived asset write-down, the deductible
components of goodwill impairment charge, the higher foreign tax rates and higher financial expenses.

The
effective annual tax rate in 2007 was 11.5%, compared to a statutory rate of 33.1%. The difference of 21.6% was mainly explained by the goodwill impairment charge that is mostly
non-deductible.

Net Loss

Net loss from continuing operations of $1,837.4, representing a loss per share of $14.10 for 2007, compared to net income from
continuing operations of $118.8, representing earnings per share of $0.65 in 2006. These results incorporated impairment of assets, restructuring and other charges and goodwill impairment charge, net
of income taxes, of $1,900.5 million, or $14.41 per share compared with $42.3 million, or $0.32 per share in 2006. Excluding the effect of impairment of assets, restructuring

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and
other charges and goodwill impairment charge, adjusted diluted loss per share was $0.31 in 2007, compared with adjusted diluted earnings per share of $0.97 in 2006.

Three Months ended December 31, 2008 Compared to Three Months ended December 31, 2007

Revenues

Our consolidated revenues for the fourth quarter of 2008 were $1.03 billion, a 16.1% decrease when compared to
$1.23 billion for the same period in 2007. Excluding the negative impact of currency translation and paper sales (Figure 3), revenues were down 7.9% compared to the same period in 2007.
The decrease in revenues resulted primarily from lower volumes mostly due to the North American recession, plant closures, lower paper sales, and, to a lesser extent, the impact of the Insolvency
Proceedings. Despite negative price pressures, overall revenues per number of impressions appeared stable, primarily due to improvements in product mix. More details are provided in the "Segment
results" section.

Paper
sales, excluding the effect of currency translation, decreased by 14.9% for the fourth quarter of 2008, compared to the same period in 2007. The decrease in paper sales is mostly
explained by lower volumes. As discussed above, variance in paper sales has an impact on revenues, but it has little impact on operating income because the cost is generally passed on to
the customer.

Operating Income and Adjusted EBIT

In the fourth quarter of 2008, Adjusted EBIT increased to $50.3 million compared to $24.9 million for the same period in
2007. Adjusted EBIT margin was 4.9% for the fourth quarter of 2008, compared to 2.0% for the same period in 2007. The reduction in revenues was more than compensated by a reduction in specific charges
of $14.7 million, a non-cash charge of $38.6 million recorded in the fourth quarter of 2007 for accelerated amortization of contract acquisition costs, as well as a reduction
in labor costs, as we had successfully and rapidly aligned our workforce to our sales volume.

The
above-mentioned specific charges were $17.5 million for the fourth quarter of 2008 and related mainly to accelerated depreciation of fixed assets. This compared to specific
charges of $32.2 million for the same period in 2007, which related mainly to net losses on sale and leaseback of equipment and disposal of assets, as well as accelerated depreciation
of assets.

Cost
of sales for the fourth quarter of 2008 (excluding depreciation and amortization expenses of $60.3 million) decreased by 19.4% to $834.5 million compared to
$1.04 billion (excluding depreciation and amortization expenses of $66.2 million) for the corresponding period in 2007. Excluding depreciation and amortization, gross profit margin was
19.2% in the fourth quarter of 2008 compared to 15.9% in 2007, which is mostly explained by lower variable costs, particularly labor costs.

Selling,
general and administrative expenses for the fourth quarter of 2008 were $88.9 million, lower by 16.7% compared to $106.7 million for the same period in 2007.
Excluding depreciation and amortization expenses of $3.1 million in the fourth quarter of 2008 and $2.9 million for the same period in 2007 and excluding the favorable impact of currency
translation of $6.8 million, selling, general and administrative expenses decreased by 10.8%, compared to the same period in 2007. The variance is mostly explained by the reduction in specific
charges. 2007 selling, general and administrative expenses included specific charges of $14.3 million for net losses on disposals of assets while there were no such charges in 2008. The
favorable variance is also explained by various workforce reduction initiatives as well as lower professional fees, partly offset by additional bad debt expense mostly due to certain customers filing
for creditor protection given the exceptionally difficult economic environment.

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Securitization
fees were nil for the fourth quarter of 2008, compared to income of $0.6 million for the fourth quarter of 2007. The variance is explained by the termination of the
North American program as of January 23, 2008.

The
total depreciation and amortization included in cost of sales and selling, general and administrative expenses above were $63.4 million in the fourth quarter of 2008, compared
to $69.1 million for the same period in 2007.

Operating
loss for the quarter ended December 31, 2008 was $478.6 million compared to operating loss of $1,929.8 for the quarter ended December 31, 2007, explained
mainly by significant asset and goodwill impairment charges in 2007.

Other Items

During the fourth quarter of 2008, we recorded IAROC of $187.8 million, compared to $121.8 million for the same period in
2007. The charge for the quarter was mainly related to the impairment of long-lived assets and workforce reductions in North America. These measures are described below under "Impairment
of Assets and Restructuring Initiatives".

During
the fourth quarter of 2008, we recorded a goodwill impairment charge of $341.1 million compared with $1.8 billion in 2007. See below under "Impairment of Goodwill"
for additional information.

Financial
expenses were $198.6 million in the fourth quarter of 2008, compared to $30.3 million for the same period in 2007. The variance of $168.3 million is mainly
explained by a loss on foreign exchange and to a lesser extent a higher level of debt, due to the addition of the DIP financing.

We
recorded reorganization items which represent post-filing expenses, gains and losses, and provisions for losses that can be directly associated with the reorganization and
restructuring of the Applicants. The total expense for the fourth quarter of 2008 was $37.7 million.

Income
tax recovery was $61.5 million in the fourth quarter of 2008, compared to a recovery of $161.6 million for the same period in 2007. Income tax expense before IAROC
and goodwill impairment charge was $25.2 million in the fourth quarter of 2008, compared to an income tax recovery of $41.4 million for the same period in 2007. Compared to 2007, the
income tax recovery is lower in the fourth quarter of 2008 and is mainly attributable to a tax reserve in relation to the
non-deductibility of interest on pre-petition U.S. debts and the additional valuation allowance.

Net Loss

For the fourth quarter ended December 31, 2008, we reported a net loss of $654 million, representing a loss per share
from continuing operations of $3.26, compared to a net loss from continuing operations of $1,802.6 million, representing a loss per share of $13.69 for the same period in 2007. These results
incorporated IAROC and goodwill impairment charge, net of income taxes of $442.2 million or $2.19 per share, compared with $1,834.5 million or $13.88 per share for the same period in
2007. Adjusted diluted loss per share was $0.91 in the fourth quarter of 2008, compared to adjusted diluted earnings per share of $0.20 in the same period of 2007.

Segment Results

The following is a review of activities by segment which, except as otherwise indicated, focuses only on continuing operations.

During
the second quarter of 2008, management modified Quebecor World's reportable segments to reflect the sale of the European operations (Note 9). The revised reporting
structure includes two

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segments,
North America and Latin America. All prior periods have been reclassified to conform to this current reporting structure.

Segment Results of Continuing Operations
Selected Performance Indicators
($ millions)

North America

Latin America

Inter-Segment
and Others

Total2008

2007

2008

2007

2008

2007

2008

2007Three months ended December 31Revenues

$
957.2

$
1,148.8

$
76.8

$
82.5

$
(0.7
)
$
(0.3
)
$
1,033.3

$
1,231.0Adjusted EBITDA


104.7


139.4


11.9


9.2


1.7


(10.7
)

118.3


137.9Adjusted EBIT


39.8


29.9


9.3


5.7


1.2


(10.7
)

50.3


24.9IAROC


185.8


120.0


0.8


1.8


1.2





187.8


121.8Goodwill impairment charge


341.1


1,823.2





9.7








341.1


1,832.9Operating income (loss)


(487.1
)

(1,913.3
)

8.5


(5.8
)




(10.7
)

(478.6
)

(1,929.8
)Adjusted EBITDA margin


10.9
%

12.1
%

15.5
%

11.1
%







11.4
%

11.2
%Adjusted EBIT margin


4.1
%

2.6
%

12.1
%

6.7
%







4.9
%

2.0
%Operating margin


(50.9
)%

(166.5
)%

11.1
%

(7.0
)%







(46.3
)%

(156.8
)%Capital expenditures(1)

$
25.5

$
110.4

$
3.7

$
0.7

$
0.1

$
12.7

$
29.3

$
123.8Change in non-cash balances related to operations, cash flow (outflow)(1)


(95.7
)

(4.0
)

(0.7
)

(6.0
)

108.4


(111.1
)

12.0


(121.1
)Twelve months ended December 31Revenues

$
3,723.0

$
4,373.7

$
294.6

$
284.8

$
(0.7
)
$
(4.0
)
$
4,016.9

$
4,654.5Adjusted EBITDA


354.7


477.8


29.8


26.2


(5.1
)

(24.5
)

379.4


479.5Adjusted EBIT


109.8


180.9


16.9


13.2


(5.7
)

(24.8
)

121.0


169.3IAROC


238.5


221.7


2.0


1.9


1.6





242.1


223.6Goodwill impairment charge


341.1


1,823.2





9.7








341.1


1,832.9Operating income (loss)


(469.8
)

(1,864.0
)

14.9


1.6


(7.3
)

(24.8
)

(462.2
)

(1,887.2
)Adjusted EBITDA margin


9.5
%

10.9
%

10.1
%

9.2
%







9.4
%

10.3
%Adjusted EBIT margin


2.9
%

4.1
%

5.7
%

4.6
%







3.0
%

3.6
%Operating margin


(12.6
)%

(42.6
)%

5.1
%

0.6
%







(11.5
)%

(40.5
)%Capital expenditures(1)

$
92.2

$
251.5

$
8.3

$
3.5

$
8.2

$
66.0

$
108.7

$
321.0Change in non-cash balances related to operations, cash flow (outflow)(1)


(63.1
)

(19.1
)

(9.5
)

(11.8
)

198.4


(115.0
)

125.8


(145.9
)


Figure 4

IAROC: Impairment of assets, restructuring and other charges.

Adjusted: Defined as before IAROC and before goodwill impairment charge.

North America

Prior to the second quarter of 2008, the North American segment was comprised of the following business groups: Magazine; Retail,
Catalog & Sunday Magazines; Book & Directory; Direct; Canada; Logistics; Premedia and other value added services.

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On
June 16, 2008, we announced the merging of our Retail, Catalog & Sunday Magazine division with the Direct Mail division to form a new integrated Marketing
Solutions Group to better serve the marketing and advertising needs of our customers in multiple markets including retail, direct marketing, Sunday magazine, agency and financial services.

Subsequently,
on June 17, 2008, we further announced the integration of our U.S. Magazine, Book and Directory divisions into the Publishing Services Group. The new
Publishing Services Group is intended to streamline our operations, improve services, and better serve existing and new publishing customers. We also merged the Premedia and Logistics divisions into
one operating structure.

North
American revenues for the fourth quarter of 2008 were $957 million, down 16.7% from $1,149 million in 2007 and $3,723 million for the twelve-month period ended
December 2008, down 14.9% from $4,374 million for the same period in 2007. Excluding the effect of currency translation and the unfavorable impact of paper sales, revenues decreased by
8.8% in the fourth quarter of 2008, compared to the same period in 2007 and 9.8% on a year-to-date basis. Revenues in the North American segment continued to be principally
impacted by volume declines. Despite negative price pressures, overall revenues per number of impressions appeared stable, primarily due to improvements in product mix. Volume in North America
decreased during the fourth quarter and the twelve-month period ending December 31, 2008 as a result of the North American recession and, to a lesser extent, due to the impact of the Insolvency
Proceedings as well as the restructuring initiatives in the Publishing Services and Canada Groups. Furthermore, volumes in the Publishing Services and in the Marketing Solutions Groups have been
affected by the non-renewal in 2007 of contracts with three large customers.

Adjusted
EBITDA in North America decreased in the fourth quarter of 2008 and on a year-to-date basis compared to the same period in 2007. The Adjusted EBITDA
margin decreased in the fourth quarter of 2008 to 10.9% compared to 12.1% for the same period of 2007, and decreased on a year-to-date basis to 9.5% in 2008 from 10.9% in 2007.
Adjusted EBITDA in North America continues to be impacted by challenging market conditions. The decrease in volume, as discussed above, was partly offset by profit improvement initiatives and
efficiencies realized through productivity gains, mainly in the Publishing Services Group.

During
2008, the North American workforce was reduced by 2,953 employees, down 13.8%, mainly explained by the various restructuring initiatives, including the closure of the
Islington facility in Ontario, which was completed in the fourth quarter of 2008, the closure of the North Haven, CT facility, which was completed in the second quarter of 2008 and the closure of the
Magog facility in Quebec, which was completed in the first quarter of 2008. We also reduced our workforce in most of our other facilities, including our corporate offices, in order to align ourselves
with current market conditions.

Latin America

Latin America operates mainly in the Book, Directory, Magazine, Catalog and Retail Markets. Latin America's revenues for the fourth
quarter of 2008 were $76.8 million, down 6.9% from $82.5 million for the same period in 2007 primarily due to the unfavorable impact of foreign currency. On a
year-to-date basis, revenues were $294.6 million, up 3.5% from $284.8 million for the same period in 2007. Excluding the impact of foreign currency and paper
sales, revenues for the fourth quarter of 2008 were up 5.7%, compared to 2007 and 1.4% on a year-to date basis. Overall, quarterly adjusted EBITDA was up 29.3% compared to the same period
in 2007 while year-to-date adjusted EBITDA was up 13.7% compared to 2007. These positive results are mostly explained by an improvement in product mix as well as efficiencies
generated from continuous improvements and investment initiatives.

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Impairment of Assets and Restructuring Initiatives

Impairment of Assets

We re-assess the recoverability of property, plant and equipment whenever there is a significant change in circumstances or
a material event occurs that may indicate that the carrying value of an asset is not recoverable, such as a material change in any of: the current or projected operating results, the use of the
assets, the strategic direction of the businesses, the market value of the assets or industry and economic trends. If management believes that the assets may not be recoverable based on one or more of
these material changes, the assets are reviewed for impairment based on the expected undiscounted future cash flows from the use of the assets and their eventual disposition. Impairment testing is
performed at the lowest level of an asset group at which identifiable cash flows are largely independent, which is generally at the individual plant level. If the carrying value of an asset or a group
of assets exceeds the expected undiscounted future cash flows, an impairment charge is recorded based on the amount by which the carrying value of the asset or group of assets exceeds its fair value.
Fair value is determined using prices for similar assets in the marketplace (market approach) or discounted future cash flows (income approach). Although we believe our estimates of undiscounted
future cash flows, for impairment testing purposes, and of fair values are reasonable, actual financial results could differ from these estimates due to the inherent uncertainty in making such
estimates, particularly with a continued deterioration in the global economy, which could result in an additional impairment of asset charge in the future.

During
the first three quarters of 2008, we recorded impairment charges related to long lived assets in North America totaling $16.7 million on certain machinery and equipment,
largely based on change in use of these assets.

In
the fourth quarter of 2008, we updated our 5-year business plan and impairment tests on specific components of long-lived assets were triggered due to industry
overcapacity and economic market conditions, that resulted in downward pressure on both volumes and prices of printing services in North America. As a result, we concluded that the carrying amount of
certain long-lived assets was not fully recoverable and non-cash asset impairment charges of $161.8 million in North America were recorded to write down the value of the
long-lived assets to their estimated fair value. The impairment charge is mainly related to machinery and equipment.

During
the year 2008, we recorded a net loss on financial assets of $4.9 million ($16.0 million in 2007 and nil in 2006).

During
the first three quarters of 2007, impairment tests were triggered in North America, as a result of the retooling plan and the relocation of existing presses into fewer, but larger
and more efficient facilities and we recorded impairment charges of $71.7 million mainly on machinery and equipment.

In
the fourth quarter of 2007, we completed our 2008 budget, and impairment tests on specific components of long-lived assets were triggered due to industry conditions, namely continued
price pressure and volume declines. As a result, we concluded that the carrying amount of certain long lived assets was not fully recoverable and non-cash asset impairment charges of
$99.3 million in North America and $1.0 million in Latin America were recorded to write down the value of the long lived assets to the estimated fair value. The impairment charge was
mainly related to machinery and equipment.

Restructuring Initiatives

We have undertaken various restructuring initiatives in order to ensure facilities are producing optimal pressroom efficiencies and
higher returns. Restructuring costs relate largely to plant closures

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and
workforce reductions related to current and prior years' initiatives. A description of these initiatives is provided in Note 6.

The
2008 restructuring initiatives affected a total of 2,576 employees, of which 2,121 positions have been eliminated as of December 31, 2008 and 455 are
expected to be eliminated. However, we estimate that
351 new jobs should be created in other facilities with respect to the 2008 initiatives. During 2008, the execution of prior years' initiatives resulted in the elimination of
244 positions with 5 positions still to be eliminated.

As
at December 31, 2008, the balance of the restructuring reserve was $25.9 million. The total cash disbursement related to this reserve is expected to be
$25.4 million in 2009. Finally, we expect to record a charge of $5.9 million in 2009 for the restructuring initiatives that have already been announced as at
December 31, 2008.

Impairment of Goodwill

In the fourth quarter of 2008, we recorded a non-cash charge of $341.1 million to reflect impairment of the
remaining goodwill in the North American reporting unit. The printing services industry continues to be challenged by difficult market trends, largely declining volumes, overcapacity and intense price
competition and, most recently, by the recession, causing expected results for this reporting unit to fall short of expectations. The estimated future cash flows for our North American reporting unit
reflect forward revenue and margin expectations which were revised in the fourth quarter of 2008 to incorporate these trends, at least in the short term. The resulting fair value of the reporting unit
was below its carrying amount including goodwill and we performed our second step of the impairment test to determine the amount of any impairment loss. We engaged a third-party appraisal firm to
determine the overall fair value of the reporting unit, in part based on estimates of future cash flows developed by management, as well as to value the significant tangible and intangible
long-lived assets of the reporting unit as part of this impairment calculation.

In
the fourth quarter of 2007, the unsuccessful efforts of the Corporation to obtain new financing and our inability to conclude a proposed sale of our European operations combined with
a decline in our stock price triggered a requirement for a goodwill impairment test related to our reporting units. As a result, we concluded that the goodwill was impaired and a total impairment
charge of $1,832.9 million was recorded for the North American and Latin America reporting units.

During
our 2007 annual test, we completed our annual goodwill impairment testing in the third quarter of 2007. Management determined that the carrying value of goodwill for our European
reporting unit was not recoverable after taking into account financial information such as the potential sale/merger of the European operations. The resulting impairment of such goodwill amounted to
its entire carrying value of $166.0 million.

Discontinued Operations

On November 20, 2008, we sold our interest in TEJ Quebecor Printing Limited which operates a printing facility located in India.
The transaction resulted in a total net consideration payable to us of $0.1 million, and a gain on disposal of $0.7 million, including the impact from the cumulative translation
adjustment.

On
June 26, 2008, we sold our European operations to a subsidiary of HHBV. The total consideration for Quebecor World was €52.2 million
($82.1 million) in cash and a €21.5 million five-year note bearing interest at 7% per year, which is carried in other assets at its fair value of
€14.1 million ($22.3 million). The net cash proceeds were mainly used by us to repay a portion of the DIP Term Loan. This transaction resulted in a loss on disposal of
$653.3 million, including the

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cumulative
translation adjustment impact and is presented as part of the net loss from discontinued operations.

On
January 28, 2008, we abandoned our UK subsidiary, Quebecor World PLC ("QWP"), based in Corby, and placed it into administration. As a result, we ceased to have control
or significant influence over QWP as the ability to determine strategic, operating, investing and financing policies was transferred to the administrators. The administrators ceased to operate QWP on
February 15, 2008, and all of QWP's long-lived assets, primarily buildings and machinery and equipment, started to be liquidated by the administrators. We are an unsecured creditor
for our intercompany receivable of $28.0 million from QWP and, as of December 31, 2008, we had written down the receivable to its estimated amount recoverable of $3.0 million. As
a result, we recorded a net loss from discontinued operations of $32.0 million (including the write-down of the intercompany receivable).

In
2007, we sold our investments in two facilities of our French operations for nominal cash consideration resulting in a net loss on disposal of $12.7 million, included within
the discontinued operations.

Reconciliation of non-GAAP measures
($ millions, except per share data)

Years ended December 31,2008

2007

2006Free cash flow(1)Cash provided by operating activities

$
89.6

$
68.0

$
236.0Dividends on preferred shares





(17.6
)

(43.1
)Additions to property, plant and equipment


(108.7
)

(321.0
)

(313.8
)Net proceeds from disposal of assets


25.4


101.4


82.5Net proceeds from business disposals


43.5





28.5Free cash flow

$
49.8

$
(169.2
)
$
(9.9
)


Figure 5



42

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Table of Contents

Reconciliation of non-GAAP measures
($ millions, except per share data)

Years ended December 31,2008

2007

2006Operating income (loss) from continuing operationsadjustedOperating income (loss)

$
(462.2
)
$
(1,887.2
)
$
195.6Impairment of assets, restructuring and other charges ("IAROC")


242.1


223.6


66.2Goodwill impairment charge


341.1


1,832.9


Adjusted EBIT(1)

$
121.0

$
169.3

$
261.8Operating income (loss)

$
(462.2
)
$
(1,887.2
)
$
195.6Depreciation of property, plant and equipment(2)


261.7


311.4


308.4Amortization of other assets(2)


18.8


60.4


30.0Less depreciation and amortization from discontinued operations


(22.1
)

(61.6
)

(54.6
)Operating income (loss) before depreciation and amortization ("EBITDA")

$
(203.8
)
$
(1,577.0
)
$
479.4IAROC


242.1


223.6


66.2Goodwill impairment charge


341.1


1,832.9


Adjusted EBITDA(1)

$
379.4

$
479.5

$
545.6Earnings (loss) per share from continuing operationsNet income (loss) from continuing operations

$
(943.9
)
$
(1,837.4
)
$
118.8IAROC(3)


165.9


157.2


42.3Goodwill impairment charge(4)


324.1


1,743.4


Reorganization items(5)


95.2





Adjusted net income (loss) from continuing operations

$
(358.7
)
$
63.2

$
161.1Net income allocated to holders of preferred shares


17.4


22.2


34.0Adjusted net income (loss) from continuing operations available to holders of equity shares

$
(376.1
)
$
41.0

$
127.1Diluted average number of equity shares outstanding (in millions)


182.6


131.9


131.4Earnings (loss) per share from continuing operationsDiluted

$
(5.26
)
$
(14.10
)
$
0.65Adjusted diluted(6)

$
(2.06
)
$
0.31

$
0.97


Figure 5



43

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Table of Contents

Reconciliation of non-GAAP measures
($ millions, except per share data)

Three months ended
December 31,2008

2007Operating income (loss) from continuing operationsadjustedOperating income (loss)

$
(478.6
)
$
(1,929.8
)Impairment of assets, restructuring and other charges ("IAROC")


187.8


121.8Goodwill impairment charge


341.1


1,832.9Adjusted EBIT(1)

$
50.3

$
24.9Operating income (loss)

$
(478.6
)
$
(1,929.8
)Depreciation of property, plant and equipment(2)


63.4


84.5Amortization of other assets(2)


4.6


44.0Less depreciation and amortization from discontinued operations





(15.5
)Operating income (loss) before depreciation and amortization ("EBITDA")

$
(410.6
)
$
(1,816.8
)IAROC


187.8


121.8Goodwill impairment charge


341.1


1,832.9Adjusted EBITDA(1)

$
118.3

$
137.9Earnings (loss) per share from continuing operationsNet loss from continuing operations

$
(654.0
)
$
(1,802.6
)IAROC(3)


118.1


91.1Goodwill impairment charge(4)


324.1


1,743.4Reorganization items(5)


32.8


Adjusted net income (loss) from continuing operations

$
(179.0
)
$
31.9Net income allocated to holders of preferred shares


3.8


5.5Adjusted net income (loss) from continuing operations available to holders of equity shares

$
(182.8
)
$
26.4Diluted average number of equity shares outstanding (in millions)


201.5


132.1Earnings (loss) per share from continuing operationsDiluted

$
(3.26
)
$
(13.69
)Adjusted diluted(6)

$
(0.91
)
$
0.20


Figure 5



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Critical Accounting Estimates

The rules of the Canadian securities regulatory authorities define critical accounting estimates as those requiring assumptions made
about matters that are highly uncertain at the time the estimate is made, and when the use of different reasonable estimates or changes to the accounting estimates would have a material impact on a
corporation's financial condition or results of operations.

As
disclosed in Note 2(b), the preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the
reporting periods. The Insolvency Proceedings materially affect the degree of uncertainty associated with the measurement of many amounts in the financial statements. More specifically, it could
impact the recoverability tests and fair value assumptions used in the impairment test of property, plant and equipment and goodwill, the valuation of future income tax assets and of contract
acquisition costs.

In
addition, we made assumptions regarding expected revenue growth, maintaining our customer base and achieving costs reductions, in order to estimate the future cash flows expected from
the use of our assets. These estimates and assumptions are based on management's best estimates taking into consideration historical experience and other factors including the current economic
situation, as well as industry and business environments, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances
dictate. The combined impact of the Insolvency Proceedings described in Note 1, difficult credit markets, volatile equity and foreign currency markets and decreases in customer spending
increase the uncertainty inherent in such assumptions and estimates. As future events and their effects cannot be determined with precision, actual results could differ significantly from these
estimates. Changes in these estimates will be reflected in the financial statements in future periods. The credit crisis and economic weakness has resulted and may continue to result in decreased
revenue, gross margin and earnings. In addition, customers' difficulties have resulted in certain cases, and could result in the future, in increases in bad debt expenses. Continued economic weakness
may also result in restructuring actions and associated expenses and in further impairment of long-lived assets.

The
critical accounting estimates which affect the consolidated statements of income and consolidated balance sheets line items are summarized below:

Going Concern

Our financial statements have been prepared using the same Canadian GAAP as applied by us prior to the Insolvency Proceedings. While
the Applicants have filed for and been granted creditor protection, the financial statements continue to be prepared using the going concern concept, which assumes that we will be able to realize our
assets and discharge our liabilities in the normal course of business for the foreseeable future. The Insolvency Proceedings provide us with a period of time to stabilize our operations and financial
condition and develop a Plan. During the period, Debtor-In-Possession ("DIP") financing has been approved by the Court and the U.S. Bankruptcy Court and is available,
subject to borrowing conditions. Management believes that these actions make the going concern basis appropriate. However, it is not possible to predict the outcome of these Insolvency Proceedings
and, as such, realization of assets and discharge of liabilities is subject to significant uncertainty. Accordingly, substantial doubt exists as to whether Quebecor World will be able to continue as a
going concern. Further, it is not possible to predict whether the actions taken in any restructuring will result in improvements to the financial condition of the Corporation sufficient to allow us to
continue as a going concern. If the going concern basis were to cease being appropriate, adjustments would be necessary to the carrying amounts and/or classification of assets and liabilities, and to
the expenses in these financial statements.

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Goodwill

Goodwill is tested for impairment annually for all of our reporting units, or more frequently if events or changes in circumstances
indicate that the asset might be impaired. The impairment test is carried out in two steps. In the first step, the carrying amount of the reporting unit is compared to its fair value. When the fair
value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is considered not to be impaired and the second step is not required. The second step of the impairment test
is carried out when the carrying amount of a reporting unit exceeds its fair value, in which case the implied fair value of the reporting unit's goodwill is compared to its carrying amount to measure
the amount of the impairment, if any. When the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment is recognized in an amount equal to the
excess and is presented as a separate item in the Consolidated Statements of Income.

Based
on the results of the latest impairment test performed as of December 31, 2008, we recorded a goodwill impairment charge of $341.1 million in 2008 ($1,832.9 in 2007).
Subsequent to this impairment charge, there is no remaining goodwill in our consolidated balance sheet as at December 31, 2008.

Impairment of Long-Lived Assets

Assessing the impairment of long-lived assets requires us to make important estimates and assumptions including, but not
limited to, the expected future cash flows that the assets will generate, how the assets will be used based on the strategic direction of business, their remaining useful life, and their fair value on
an open market. Considerable judgment is also applied in incorporating the potential impact of the current economy on customer demand and selling prices, the cost of production, the limited activity
on secondary markets for our assets and the cost of capital. Given the current economic weakness, there is a significant risk that customer demand and pricing will be lower than expected. Although we
believe our estimates of undiscounted future cash flows, for impairment testing purposes, and of fair values are reasonable, actual financial results could differ from these estimates due to the
inherent uncertainty in making such estimates, particularly given the deterioration in the global economy, and actual results may trigger additional asset impairment charges in the future.

We
recorded a total impairment charge of $183.4 million in the year ended December 31, 2008 based on the results of the above tests ($188.0 million in 2007).
Although management concluded that at December 31, 2008 no further impairment charges were required other than those discussed above, we continue to monitor groups of assets to identify any new
events or changes in circumstances that could indicate that their carrying values are not recoverable, particularly in light of an expected decline in profitability that may result with a continued
deterioration in the global economy. In the event that
such a situation is identified or that actual results differ from management's estimates, an additional impairment charge could be necessary.

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Pension and Other Postretirement Benefits

Weighted average assumptions used in the measurement of Quebecor World's pension benefits

2008

2007Accrued benefit obligation as of December 31:Discount rate


7.4%


6.0%Rate of compensation increase


3.5%


3.4%Benefit costs for years ended December 31:Discount rate


6.0%


5.6%Expected return on plan assets


7.5%


7.5%Rate of compensation increase


3.4%


3.4%Figure 6


We
maintain defined benefit plans and postretirement benefits for our employees and ensure that contributions are sustained at a level sufficient to cover benefits. Actuarial valuations
of our various pension plans were performed during the last three years or more frequently where required by law. Plan assets are measured at fair value and consist of equity securities, corporate and
government fixed income securities and cash or cash equivalents. Pension and other postretirement costs and obligations are based on various economic and demographic assumptions determined with the
help of actuaries
and are reviewed each year. Key assumptions include the discount rate, the expected long-term rate of return on plan assets, the rate of compensation increase (Figure 6)
and the health care cost trend rate.

The
discount rate assumption used to calculate the present value of the plans' projected benefit payments was determined using a measurement date of September 30, 2008 and based
on yields of long-term high-quality fixed income investments.

The
expected long-term rate of return on pension plan assets was obtained by calculating a weighted average rate based on targeted asset allocations of the plans. The
expected returns of each asset class are based on a combination of historical performance analyses and forward-looking views of the financial markets. The targeted asset allocation of the plans is
approximately 63% for equity and 37% for fixed income securities and cash.

The
rate of compensation increase is used to project current plan earnings in order to estimate pension benefits at future dates. This assumption was determined based on historical pay
increases, forecast of salary budgets, collective bargaining influence and competitive factors.

The
unfunded status of all of the pension plans of $171.4 million was based on a measurement date of September 30, 2008. If we had used a measurement date of
December 31, 2008, the impact of the fourth quarter decline in global equity markets would have increased the unfunded status by $154.0 million to $325.4 million.

Changes
in market conditions may affect the fair value of plan assets, the expected return on plan assets, as well as the discount rate used in calculations for future periods, which
would result in a change in the amount of benefit obligation, impacting the periodic benefit costs and the unfunded status of the pension plans. As a result, amounts relating to these items above
could be materially different if further changes in market conditions occur.

We
believe that the assumptions are reasonable based on information currently available; however, in the event that actual outcome differs from management's estimates, the provision for
pension and postretirement benefit expenses and obligations may be adjusted.

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Healthcare Costs

Quebecor World provides health care benefits to employees in North America and we actively manage our health care spending with our
vendors to maximize discounts in an attempt to limit the cost escalation experienced over the past years. Health care costs and liabilities are estimated with the help of actuaries. Health care costs
continued to increase in 2008, consistent with the trend in North America. Trend assumption is the most important factor in estimating future costs. We used the most recent twelve months of claims
trended forward to estimate the next year's liability. A one percentage point change in assumed health care cost trend would have the following effects:

Postretirement BenefitsSensitivity analysis

1% increase

1% decreaseEffect on service and interest costs

$
0.5

$
(0.4
)Effect on benefit obligation


3.7


(3.3
)


Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for expected losses from customers who are unable to pay their debts. The allowance is
reviewed periodically and is based on an analysis of specific significant accounts outstanding, the age of the receivable, customer creditworthiness and historical collection experience. In addition,
we maintain an allowance to cover a fixed percentage of all accounts for customers who have filed for bankruptcy protection under Chapter 11 or CCAA and other critical accounts. These
accounts may take several years to reach settlement. The allowance is reassessed on a quarterly basis.

Global
economic conditions affect our customers' businesses and the markets they serve. The credit crisis and global economic weakness has resulted in constrained advertising spending
and in certain cases, customer financial difficulties in North America which could hinder our ability to collect amounts owed by customers. This credit exposure may increase to the extent that there
is a continued lack of liquidity in the capital markets and sustained period of difficult economic conditions. This increase in exposure could result in increases in our bad debt expenses.

Income Taxes

Management believes that it has adequately provided for income taxes based on all of the information that is currently available.

The
provision for income taxes is calculated based on the expected tax treatment of transactions recorded in our consolidated statements. In determining our provision for income taxes,
we interpret tax legislation in a variety of jurisdictions and make assumptions about the expected timing of the reversal of future tax assets and liabilities. Income tax assets and liabilities, both
current and future, are measured according to enacted income tax legislation that is expected to apply when the asset is realized or the liability is settled. We regularly review the recognized and
unrecognized future income tax assets to determine if a valuation allowance is required or needs to be adjusted. Our future income tax assets are recognized only to the extent that, in our opinion, it
is more likely than not that the future income tax assets will be realized. This opinion is based on certain estimates, assumptions and judgments in assessing the potential for future recoverability,
while at the same time considering past experience. If these estimates, assumptions or judgments change in the future, we could be required to reduce or increase the value of the future income tax
assets or liabilities resulting in income tax expense or recovery. Our tax legislation interpretations could differ from those of tax authorities and our tax filings are subject to government audits,
which could materially change the amount of both current and future income tax assets and liabilities. Any change would be recorded as a charge or a credit to income tax expense.

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In
addition, we have not recognized a future tax liability for the undistributed earnings of our subsidiaries in the current and prior years because we do not expect those unremitted
earnings to reverse and become taxable in the foreseeable future.

Worker's Compensation

U.S. workers' compensation claims tend to be relatively low in value on a case-by-case basis, and we
self-insure against the majority of such claims. The liability provision of such self-insurance is estimated based on reserves for claims that are established by an independent
administrator and the provision is adjusted annually to reflect the estimated future development of the claims using specific factors provided by our actuaries. The adjustment is recorded in income
or expense.

While
we believe that the assumptions used are appropriate, in the event that actual outcome differs from management's estimates, the provision for U.S. workers' compensation
costs may be adjusted.

We
also maintain third-party insurance coverage against U.S. workers' compensation claims which could be unusually large in nature as discussed in "Item 3.Key
InformationRisk Factors."

Changes in Accounting Standards and Adoption of New Accounting Policies

Changes in Accounting Policies

Effective January 1, 2008, we adopted the Canadian Institute of Chartered Accountants (CICA) Handbook Section 1535,
Capital Disclosures, Section 3862, Financial InstrumentsDisclosures, Section 3863 Financial InstrumentsPresentation and Section 3031, Inventories.
Changes in accounting policies in conformity with these new accounting standards are as follows:

Capital Disclosures

Section 1535 which requires the disclosure of both qualitative and quantitative information that enables users of financial
statements to evaluate the entity's objectives, policies and processes for managing capital. The adoption of this section requires disclosure of information on capital management, which is included in
Note 25, Capital and Liquidity Management.

Financial Instruments

Section 3862, Financial InstrumentsDisclosures, and Section 3863, Financial
InstrumentsPresentation, which require additional disclosures relating to financial instruments. The adoption of these sections required disclosure of risks associated with financial
instruments to which we are exposed, including sensitivity analysis and how we manage those risks. This information is included in Note 24, Financial Instruments.

Inventories

Section 3031, Inventories, provides more extensive guidance on the recognition and measurement of inventories, and related
disclosures. The main features of the new Section are: measurement of inventories at the lower of cost and net realizable value; guidance on the determination of cost, including allocation of
overheads and other costs to inventory; allocation of fixed production overhead based on normal capacity levels; and reversal of previous write-downs to net realizable value when there is a subsequent
increase in the value of inventories.

Upon
adoption of this new section, in accordance with the transition rules, we reclassified $32.9 million of spare parts inventories to property, plant and equipment and recorded
accumulated depreciation of $25.7 million, with the difference (net of taxes of $4.0 million) being recorded as an

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adjustment
to opening deficit, without restating comparative figures of prior years. We also remeasured our work in process to allocate fixed overhead, resulting in an adjustment of
$4.3 million to opening deficit. The following is a summary of the adjustments recorded in the consolidated financial statements as at January 1, 2008:



Future Changes in Accounting Standards

Goodwill and Intangible Assets

In February 2008, the CICA issued Section 3064, "Goodwill and Intangible Assets", replacing Section 3062,
"Goodwill and Other Intangible Assets". The new section clarifies the requirements for recognizing intangible assets on costs that may only be deferred when they relate to an item that meets
the definition of an asset. Section 3064 effectively converges Canadian GAAP for intangible assets with International Financial Reporting Standards ("IFRS"). This standard is effective for the
Corporation for the first quarter of 2009. We are currently assessing the impact of the adoption of this new section on our financial statements.

IFRS

The Canadian AcSB requires all public companies to adopt IFRS for interim and annual financial statements relating to fiscal years
beginning on or after January 1, 2011. Early adoption is permitted if certain conditions are met. Companies will be required to provide IFRS comparative information for the previous
fiscal year.

Furthermore,
in May 2008, the Canadian Securities Administrators issued Staff Notice 52-320, which provides guidance on the disclosure of changes in expected
accounting polices related to the change over to IFRS. In accordance with the notice, we are required to provide an update of our IFRS conversion plan in each financial reporting period prior
to conversion.

We
expect that the transition from Canadian GAAP to IFRS will be applicable for the Corporation for the first quarter of 2011 when we will prepare both the current and comparative
financial information using IFRS. We expect the transition to IFRS to impact financial reporting, business processes and information systems.

In
2008, we launched an internal initiative to govern the conversion process and we are currently in the process of evaluating the potential impact of the conversion to IFRS on our
financial statements. Our project consists of 3 phases: (1) diagnostic; (2) development; and (3) implementation. We completed the awareness and initial assessment phase,
during the second quarter of 2008, which involved a high level review of the major differences between current Canadian GAAP and IFRS. We have started completing a more detailed assessment which
involves detailed systematic gap analyses of accounting and disclosure differences between Canadian GAAP and IFRS, and conducting an analysis of the available accounting choices to be made to address
these differences and options available under IFRS. However, as the assessment will be impacted by our future structure, given the current uncertainties described in Note 1, we cannot at this
time reasonably estimate the impact of adopting IFRS on our future financial position and results of operations.

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Business Combinations, Consolidated Financial Statements and Non-controlling Interests

The CICA issued three new accounting standards in January 2009: section 1582, Business Combinations, section 1601,
Consolidated Financial Statements, and section 1602, Non-controlling interests. These new standards will be effective for fiscal years beginning on or after January 1, 2011.
We are in the process of evaluating the requirements of the new standards.

Section 1582
replaces section 1581, and establishes standards for the accounting for a business combination. It provides the Canadian equivalent to International Financial
Reporting Standard IFRS 3Business Combinations. The section applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after January 1, 2011.

Sections 1601
and 1602 together replace 1600Consolidated Financial Statements. Section 1601, establishes standards for the preparation of consolidated
financial statements. Section 1601 applies to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011.

Section 1602
establishes standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business
combination. It is equivalent to the corresponding provisions of International Financial Reporting Standard
IAS 27Consolidated and Separate Financial Statements and applies to interim and annual consolidated financial statements relating to fiscal years beginning on or after
January 1, 2011.

Credit risk and the fair value of financial assets and financial liabilities

On January 20, 2009, the Emerging Issues Committee (EIC) of the Canadian Accounting Standards Board (AcSB) issued EIC Abstract
173, Credit Risk and Fair Value of Financial Assets and Financial Liabilities, which establishes that an entity's own credit risk and the credit risk of the counterparty should be taken into account
in determining the fair value of financial assets and financial liabilities, including derivative instruments. We took into consideration such credit risks in determining the fair value of our
financial assets and financial liabilities as of December 31, 2008. Therefore, this change will not have any impact on our financial statements in 2009.

B.    Liquidity and Capital Resources

To the extent the matters described below relate to future events or expectations, they may be significantly affected by the Insolvency Proceedings. The
Insolvency Proceedings will involve, or may result in, various restrictions on our activities, limitations on financing, the need to obtain Court or Monitor approval for various matters, the discharge
of certain obligations and uncertainty as to relationships with vendors, suppliers, customers and others with whom we may conduct or seek to conduct business.

DIP Financing

On January 21, 2008, the Court approved a Senior Secured Superpriority DIP Credit Agreement (as subsequently amended by
amendments dated January 25, 2008, February 26, 2008, March 27, 2008 and August 5, 2008, the "DIP Credit Agreement") between Quebecor World Inc. and Quebecor World
(USA) Inc., a debtor-in-possession under the U.S. Proceedings and a petitioner under the Canadian Proceedings, as Borrowers, Credit Suisse, as Administrative
Agent, Initial Issuing Bank and Initial Swing Line Lender, General Electric Capital Corporation and GE Canada Finance Holding Company, as Collateral Agent, Morgan Stanley Senior Funding, Inc.,
and Wells Fargo Foothill, LLC, as Co-Syndication Agents, and Wachovia Bank, N.A., as Documentation Agent.

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The
DIP financing is comprised of both a revolving credit facility with sub-facilities for Canadian dollar borrowings, swing line loans and issuance of letters of credit for
an aggregate maximum commitment of the lenders of $400 million (the "Revolving DIP Facility") bearing interest at variable rates based on Base rate, or Eurodollar rate, Canadian Banker's
Acceptance rate or Canadian prime rate, plus applicable margins and a $600 million term loan ("DIP Term Loan"), bearing interest at variable rates based on Base rate, or Eurodollar rate,
plus applicable margins, which was fully drawn immediately following the Initial Order and the interim order of the U.S. Bankruptcy Court, dated January 23, 2008 (the "Interim DIP
Order"). Amounts borrowed under the DIP Term Loan and repaid or prepaid may not be re-borrowed. Under the Revolving DIP Facility, the availability of funds is determined by a borrowing
base based on percentages of eligible receivables and inventory. The unused portion of the Revolving DIP Facility is subject to a commitment fee of 0.50% per annum. From the date of the Interim DIP
Order up to the date of the final order of the U.S. Bankruptcy Court dated April 1, 2008 (the "Final DIP Order"), the maximum availability under the Revolving DIP Facility was
$150 million. By the entry of the Final DIP Order by the U.S. Bankruptcy Court, the maximum availability under the Revolving DIP Facility became $400 million. On June 30,
2008, the Corporation repaid $74.5 million on the DIP Term Loan. As at March 24, 2009 the Corporation had drawn an aggregate amount of $557.0 million on the DIP Term Loan and
Revolving DIP Facility.

Quebecor
World and certain of its subsidiaries have granted irrevocable standby letters of credit to third parties to indemnify them in the event we do not perform our contractual
obligations. As of March 24, 2009, the guarantee instruments issued under the DIP Credit Agreement amounted to $16.1 million, maturing at various dates in 2009. These
guarantee instruments reduce the availability under the Revolving DIP Facility.

The
Revolving DIP Facility and DIP Term Loan are secured by a perfected lien on, and security interest in, all present and after-acquired property of Quebecor World, the
U.S. Subsidiaries subject to the U.S. Proceedings and certain subsidiaries in Latin America. The liens are junior to the liens securing our syndicated revolving bank facility with Royal
Bank of Canada as administrative agent and our equipment financing credit facility with Société Générale (Canada) as lender up to an
aggregate amount of $170 million, which were granted prior to the Filing Date, to the extent such liens are valid, perfected and not voidable. The Revolving DIP Facility and DIP Term Loan are
also guaranteed by substantially all of our direct and indirect North American subsidiaries and Latin American subsidiaries.

The
Revolving DIP Facility and DIP Term Loan mature on the earliest to occur of (a) July 21, 2009 and (b) the substantial consummation of a Plan. The DIP Credit
Agreement may be prepaid or accelerated upon the occurrence of an event of default and contains mandatory prepayments including, among other things, the net proceeds of certain asset sales, issuance
of certain debt and certain extraordinary receipts.

The
DIP Credit Agreement provides for various restrictions on, among other things, the ability of the Corporation and our subsidiaries to incur additional debt, secure such debt, make
investments, dispose of assets (including pursuant to sale and leaseback transactions and sales of receivables under securitization programs) and make capital expenditures. Each of these transactions
would require the consent of a majority of our DIP lenders if they exceed certain thresholds set forth in the DIP Credit Agreement, and may, in certain cases, require the consent of the Monitor and/or
the Court or the U.S. Bankruptcy Court.

The
DIP Credit Agreement also contains certain restrictive financial covenants such as requirements to maintain a minimum level of consolidated Earnings before Interest, Taxes,
Depreciation, Amortization and Restructuring ("EBITDAR"), as defined in the agreement, and minimum liquidity. In addition, under the terms of the DIP Credit Agreement, we are required to comply with
various other terms and conditions. As of December 31, 2008 and up to the date of

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completion
of the consolidated financial statements on March 26, 2009, we are in compliance with the financial covenants of the DIP Credit Agreement. Although to date we have been in compliance
with such financial covenants, there can be no assurance that we will be able to comply with those covenants in the future, particularly given the unknown evolution of the economy and possible
additional downward pressures on volumes in North America beyond March 2009. Any such non-compliance would constitute an event of default

Should
the Insolvency Proceedings be dismissed or orders granting relief from the stays provided for thereunder be entered, an event of default would also occur under the DIP Credit
Agreement. Alternatively, should we experience a delay in implementing a Plan or Plans prior to July 21, 2009, we would need to extend the maturity date of the Revolving DIP Facility and DIP
Term Loan, or obtain a replacement debtor-in-possession financing.

If
any of the aforementioned events occur, there can be no assurance that sufficient alternative financing would be available, particularly given the current state of the financial
markets. Failure to obtain such alternative financing would, in all likelihood, lead to the liquidation of the Applicants' assets.

Under
the Insolvency Proceedings, the amount of funding available for our Latin American subsidiaries is limited to $10 million, in addition to a $5 million amount for
other subsidiaries that are not Applicants. As of March 24, 2009, substantially all of these amounts were used to fund Latin American and other non-Applicant subsidiaries. We are
considering the future needs of our subsidiaries and will request additional funding flexibility from our creditors, if required.

Management
believes our liquidity and capital resources are sufficient to successfully restructure and reorganize the Corporation as well as to fund our operating activities.

Other Debt

On January 16, 2008, since we had not obtained the $125.0 million of new financing, as had been required under the terms
of the revolving bank facility and North American securitization program waivers, we became in default under our revolving bank facility, our equipment financing facility and our North American
securitization program. Upon filing for creditor protection in the Insolvency Proceedings on January 21, 2008, we became in default under substantially all of our other debt agreements and
instruments.

For
more information on our indebtedness, interest rates and debt maturity dates as at December 31, 2008, see Notes 17 and 18.

Cash Flow

The following describes our cash flow including the discontinued operations for the year ended December 31, 2008
and 2007.

Operating Activities

Years ended December 31,($ millions)

2008

2007Cash provided by operating activities

$
89.6

$
68.0


Net
cash used by operating activities of discontinued operations was $9.5 million in 2008 compared to $19.2 million in 2007, excluding net changes in inter company
advances.

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The
increase in cash flow from operating activities generated largely in the fourth quarter of 2008, compared to the same period in 2007, is mainly due to divestiture of Europe, which in
2007 and part of 2008 generated a net cash outflow, and favorable changes in working capital.

The
working capital deficiency was $2,767.3 million as at December 31, 2008, compared to $1,085.5 million as at December 31, 2007. The change is mainly due to
the reclassification of the long-term debt to liabilities subject to compromise.

Financing Activities

Years ended December 31,($ millions)

2008

2007Cash provided by financing activities

$
160.6

$
282.5


Net
cash provided by financing activities of discontinued operations was $8.5 million in 2008 compared to $68.4 million in 2007.

In
the first quarter of 2008, we received the DIP Term Loan proceeds of $556.5 million, net of issuance costs, and repaid our North American securitization program for
$413.0 million, which was terminated as a result of the Insolvency Proceedings.

On
June 30, 2008, we repaid $74.5 million on the DIP Term Loan, using proceeds from the sale of our European operations.

Drawings
on the Revolving DIP Facility were CA$31.0 million ($29.1 million) as at December 31, 2008.

No
dividends on preferred shares have been paid since the fourth quarter of 2007 ($17.6 million was paid in 2007).

During
the pendency of the Insolvency Proceedings, and as debtor in possession, we are generally able to exercise control over the conduct of our business and that of our subsidiaries in
the normal course. However, we are subject to various restrictions on our ability to pay dividends and to make inter-company transfers of funds in the form of loans and advances. The Corporation and
the U.S. Subsidiaries are also precluded from servicing or paying interest on their outstanding pre-petition debt under each of the Court and U.S. Bankruptcy Court orders, as
well as under the DIP Credit Agreement.

Investing Activities

Years ended December 31,($ millions)

2008

2007Cash used in investing activities

$
(86.2
)
$
(229.9
)


Net
cash used in investing activities related to discontinued operations was $5.7 million in 2008 compared to $49.4 million in 2007.



In
the fourth quarter of 2008, we invested $29.3 million in capital projects, compared to $123.8 million during the same period in 2007. On a
year-to-date basis, $108.7 million has been invested in capital projects in 2008, compared to $321.0 million in 2007. Of that amount, approximately 58% was for
organic growth, including expenditures for new capacity requirements and productivity

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improvement.
The remaining portion was spent on the maintenance of our existing structure. In 2007, the organic growth spending amounted to 79%. Additions to property, plant and equipment are expected
to be approximately $100 million in 2009.



As
at December 31, 2008, our wholly-owned captive insurance company had pledged $56.3 million ($54.9 million as at December 31,
2007) of cash as collateral for standby letters of credit issued and in trust in favour of a third party insurer for future estimated claims relating to U.S. Workers' Compensation. The standby
letters of credit and the corresponding pledge agreements
are renewable annually. The cash pledged against the letters of credit is intended for future use and is presented as restricted cash under long-term assets in our consolidated
balance sheet.

During
2008, we set up a cash collateral account, with a balance of $32.3 million at year-end, in order to use Quebecor World Memphis Corporation inventories. In
addition, we provided CA$10.0 million ($8.3 million) in cash collateral to a major Canadian financial institution in order to maintain Canadian cash management services. The total amount
of restricted cash is held in various liquid investments such as non money market funds, mutual funds, treasuries and bank deposits.



During
2008, proceeds on disposal of assets amounted to $25.4 million compared to $101.4 million in 2007. These proceeds came mainly from the
disposal of an aircraft, a property and other machinery and equipment in the North American platform. In the fourth quarter of 2008, we sold our interest in TEJ Quebecor Printing Limited in India for
$0.1 million. In 2007, proceeds were mainly related to the sale and leaseback of machinery and equipment and land and buildings in North America.



On
June 26, 2008, we sold our European operations to a subsidiary of HHBV, renamed CirclePrinters Holding B.V. The total consideration for the
Corporation was €52.2 million ($82.1 million) in cash and a €21.5 million five-year note bearing interest at 7% per year, which is
carried in other assets at its fair value of €14.1 million ($22.3 million). The net cash proceeds were mainly used by us to repay the DIP Term Loan. This transaction
resulted in a loss on disposal of $653.3 million, including the cumulative translation adjustment impact and is presented as part of the net loss from discontinued operations.

Free Cash Flow

Years ended December 31,($ millions)

2008

2007Free cash flow

$
49.8

$
(169.2
)


Free
cash flow is a non-GAAP measure. See Figure 5 for a reconciliation of free cash flow to cash flow from operations which is the closest GAAP measure. Investors
should be cautioned that free cash flow as reported by Quebecor World may not be comparable in all instances to free cash flow as reported by other companies.

The
increase in free cash flow was due mainly to higher cash flows provided by operating activities for the fourth quarter and a significant reduction in additions to property, plant and
equipment on a year over year basis.

55

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Credit ratings

None of our debt is currently rated by any credit rating agency.

C.    Research and Development, Patents and Licenses

We have no research and development nor patents or licenses of significance.

D.    Trend Information

See information provided in Item 5.A and Item 5.H of the annual report.

E.    Off-Balance Sheet Arrangements

Guarantees

Significant guarantees Quebecor World has provided to third parties include the following:

Business and real estate disposals

In connection with certain dispositions of businesses or real estate, we have provided customary representations and warranties whose
terms range in duration and may not be explicitly defined. We have also retained certain liabilities for events occurring prior to sale, relating to tax, environmental, litigation and other matters.
Generally, we have indemnified the purchasers in the event that a third party asserts a claim against the purchaser that relates to a liability retained by the Corporation.

These
types of indemnification guarantees typically extend for a number of years. The nature of these indemnification agreements prevents us from estimating the maximum potential
liability that we could be required to pay to guaranteed parties. These amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at
this time. Historically, we have not made any significant indemnification payments under such agreements and no amount has been accrued in the consolidated balance sheets with respect to these
indemnification guarantees as at
December 31, 2008. We continue to monitor the conditions that are subject to guarantees and indemnifications to identify whether it is probable that a loss has occurred and it would recognize
any such losses under any guarantees or indemnifications when those losses are probable and estimable.

Debt agreements

Under the terms of certain debt agreements, we have guaranteed the obligation of some of our U.S. subsidiaries. In this context,
we would have to indemnify the other parties against changes in regulation relative to withholding taxes, which would occur only if we were to make the payments on behalf of some of our
U.S. subsidiaries. These indemnifications extend for the term of the related financings and do not provide any limit on the maximum potential liabilities. The nature of the indemnification
agreements prevents us from estimating the maximum potential liability we could be required to pay. However, the majority of the obligations to which such guarantees apply contain
make-whole provisions which effectively limit the exposure associated with such an occurrence. Moreover, within the structure of the transactions, we are not currently exposed to such
liabilities. As such, we have not accrued any amount in the consolidated balance sheet with respect to this item.

Financial instruments

We use a number of financial instruments including: cash and cash equivalents, accounts receivable, restricted cash, bank indebtedness,
trade payables, accrued liabilities, long-term debt and preferred shares. The carrying amounts of these financial instruments, except for long-term debt and

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preferred
shares, approximate their fair values due to their short-term nature. The fair values of long-term debt and preferred shares are estimated based on discounted cash
flows using period-end market yields of similar instruments with the same maturity.

2008

2007Book Value

Fair Value

Book Value

Fair ValueFinancial liabilitiesLong-term debt(1)

$
644.0

$
614.9

$
2,337.3

$
2,018.7Preferred shares


35.1


0.2


178.5


112.4Figure 7






The
carrying amounts of derivative financial instruments are equal to their fair value.

We
use derivative financial instruments to manage our exposure to fluctuations in commodity prices and foreign exchange rates. We do not hold or use any derivative instruments for
speculative purposes and we adhere to a financial risk management policy.

Following
the commencement of the Insolvency Proceedings on January 21, 2008, substantially all derivative contracts were terminated by their counterparties. The amount of any
gains and losses associated with derivative contracts designated as hedging items that had previously been recognized in other comprehensive income as a result of applying hedge accounting will be
carried forward to be recognized in net income in the same periods during which the hedged forecast transaction will occur.

Thereafter,
from time to time, we entered into commodities swap contracts to manage certain future identifiable energy price exposures related to the purchases of natural gas. Contracts
outstanding at December 31, 2008 covered a notional quantity of 250,000 gigajoules in Canada and 1,964,000 MMBTU in the United States and expire between January 2009
and June 2009. The change in the contracts' fair values that was recorded as derivative gains or losses amounted to a loss of $0.7 million for 2008 (a loss of $1.7 million
for 2007).

In
addition, we enter into foreign exchange forward contracts to manage our exposure to change in the currency exchange rate between the Canadian and the US dollar on the settlement of
foreign denominated sales and related receivables. Contracts outstanding at December 31, 2008 covered a notional quantity of $13.4 million in Canada and expire between
January 2009 and June 2009.

During
the year, we reclassified a net gain of $8.2 million from accumulated other comprehensive income (loss) to earnings related to derivative financial instruments for which
cash flow hedge accounting was terminated in a prior period. A net gain of $33.7 million was recorded during the year (a net loss of $76.0 million in 2007 and a net loss of
$32.6 million in 2006) on derivative financial instruments for which hedge accounting was not used and embedded derivatives not closely related to their host contracts, of which
$11.2 million is presented as Reorganization items.

F.     Contractual Obligations

Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due or the risk that these financial obligations be met at
excessive cost. We have been under creditor protection since January 21, 2008 (Note 1).

As
of December 31, 2008, material contractual obligations related to financial instruments included capital repayment and interest on long-term debt and obligations
related to the DIP financing, as described in Note 1, which is collateralized by substantially all of our assets. Since the Insolvency

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Table of Contents

Proceedings,
we have ceased to make payments of interest and principal on compromised debt obligations. The obligations and their maturities, excluding the liabilities subject to compromise in the
amount of $2,882.5 million at December 31, 2008, were as follows:

Contractual Cash Obligations
($ millions)

2009

2010

2011

2012

2013

2014 and
thereafter

TotalLong-term debt

$
573.3


3.7


1.4


1.0


1.0




$
580.4Capital leases


9.9


9.8


10.0


10.9


11.9


11.1


63.6Interest payments on long-term debt, and capital leases(1)


31.4


4.3


3.4


2.5


1.5


0.5


43.6Operating leases


60.1


40.0


26.6


23.5


20.5


81.5


252.2Capital asset purchase commitments


61.8


1.0














62.8Total contractual cash obligations

$
736.5


58.8


41.4


37.9


34.9


93.1

$
1,002.6Figure 8


---

We have major operating leases pursuant to which we have the option to purchase the underlying equipment (presses and binders) at the end of the
term. Whether the equipment will be acquired at the end of the lease term will depend on circumstances prevailing at the time the option is available. The total terminal value of these operating
leases expiring between 2009 and 2015 is approximately $35.1 million.

During
2008, we made contributions to our pension plans of $38.5 million ($56.5 million for the same period in 2007), which were in accordance with the minimum required
contributions as determined by our actuaries. Minimum required contributions are estimated at $28.8 million for 2009. Considering the downturn in the capital markets in the last quarter of
2008, additional contributions will be required mainly in 2010 and beyond for our defined benefit pension plans, and in the absence of a reversal in
capital markets conditions or changes in pension legislation, are estimated to be in the range of $70 to $100 million per year, given reduced current plan asset values caused by the recent
economic recession.

G.    Contingencies

Our financial statements do not purport to reflect or provide for the consequences of the Insolvency Proceedings. In particular, such financial statements do not
purport to show: (a) as to assets, their realizable value on a liquidation basis or their availability to satisfy liabilities; (b) as to liabilities subject to compromise, the amounts
that may be allowed for claims or contingencies, or the status and priority thereof; (c) as to shareholders' accounts, the effect of any changes that may be made in the capitalization of the
Corporation; or (d) as to operations, the effect of any changes that may be made in our business.

While
we are subject to the Insolvency Proceedings, we will make adjustments to the financial statements to isolate assets, liabilities, revenues, and expenses related to the
reorganization and restructuring activities so as to distinguish these events and transactions from those associated with the ongoing operation of the business. Further, claims allowed arising under
the Insolvency Proceedings may be recorded as liabilities and presented separately on the consolidated balance sheets. If a

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restructuring
occurs and there is substantial realignment of the equity and non-equity interests in the Corporation, we will be required, under Canadian GAAP, to adopt "fresh start"
reporting. Under fresh start reporting, we would undertake a comprehensive re-evaluation of our assets and liabilities based on the reorganization value as established and confirmed in the
Plan. The financial statements do not present any adjustments that may be required under fresh start reporting.

In
the normal course of our business activities, we are subject to a number of claims and legal actions that may be made by customers, suppliers and others. Given the Insolvency
Proceedings, the final outcome with respect to actions outstanding or pending as at December 31, 2008 cannot be predicted with certainty.

H.    Quarterly Trends

Selected Quarterly Financial Data (Continuing Operations)
($ millions, except per share data)

2008

2007Q4

Q3

Q2

Q1

Q4

Q3

Q2

Q1Consolidated ResultsRevenues

$
1,033.3

$
993.6

$
975.5

$
1,014.5

$
1,231.0

$
1,172.1

$
1,111.3

$
1,140.1Adjusted EBITDA


118.3


94.2


92.7


74.2


137.9


123.5


113.1


105.0Adjusted EBIT


50.3


33.7


27.8


9.2


24.9


57.9


48.0


38.5IAROC


187.8


6.7


11.0


36.6


121.8


55.2


28.8


17.8Goodwill impairment charge


341.1











1,832.9








Operating income (loss)


(478.6
)

27.0


16.8


(27.4
)

(1,929.8
)

2.7


19.2


20.7Operating margin


(46.3
)%

2.7
%

1.7
%

(2.7
)%

(156.8
)%

0.2
%

1.7
%

1.8
%Adjusted EBITDA margin


11.4
%

9.5
%

9.5
%

7.3
%

11.2
%

10.5
%

10.2
%

9.2
%Adjusted EBIT margin


4.9
%

3.4
%

2.8
%

0.9
%

2.0
%

4.9
%

4.3
%

3.4
%Net income (loss) from continuing operations

$
(654.0
)
$
(63.6
)
$
(77.7
)
$
(148.6
)
$
(1,802.6
)
$
(55.3
)
$
10.8

$
9.7Net income (loss)


(654.0
)

(64.2
)

(751.1
)

(190.0
)

(1,826.1
)

(315.1
)

(21.1
)

(38.1
)Per Share DataEarnings (loss) per share from continuing operations
Basic and diluted

$
(3.26
)
$
(0.35
)
$
(0.44
)
$
(1.04
)
$
(13.69
)
$
(0.45
)
$
0.05

$
0.02Adjusted diluted

$
(0.91
)
$
(0.20
)
$
(0.27
)
$
(0.70
)
$
0.20

$
(0.18
)
$
0.19

$
0.11Earnings (loss) per share
Basic and diluted

$
(3.26
)
$
(0.35
)
$
(4.05
)
$
(1.32
)
$
(13.87
)
$
(2.42
)
$
(0.20
)
$
(0.34
)Figure 9


IAROC: Impairment of assets, restructuring and other charges

Adjusted earnings (loss) per share exclude the following items: IAROC, goodwill impairment charge, and reorganization
items net of tax (Figure 5).

Adjusted EBITDA trend

Adjusted EBITDA for the twelve months of 2008 was lower than 2007 mainly due to volume declines, which more than offset the
year-over-year improvements resulting from the retooling initiatives that were completed in 2007, as well as restructuring and continuous improvement initiatives. In addition
to volume declines, overall performance for the previous eight quarters was affected by operational inefficiencies mainly in plants involved in the installation of new equipment or press shutdowns, as
well as plant closures.

In
all four quarters of 2008, we continued to face challenging market conditions, resulting in price erosion and decreased volume in most of our markets. The restructuring initiatives,
largely in North America and the corporate office, are intended to help reverse this negative trend.

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Seasonal impact

Revenues generated by Quebecor World are seasonal with, historically, a greater part of volume being realized in the second half of the
fiscal year, primarily due to the higher number of magazine pages, new product launches, back-to-school ads, marketing by retailers, increased catalog activity, and holiday
promotions. Therefore, an analysis of the consecutive quarters is not a true measurement of the revenue trend (Figure 9). However, in 2008, revenues were not materially greater in the second
half of the year, as the economic downturn has been more severe during this part of the year, leading to volume reductions in most of our markets.

IAROC impact

Significant IAROC have resulted from our focus on profit improvement and retooling activities undertaken during the previous years that
involved a reduction in workforce, closure or downsizing of facilities, decommissioning of under-performing assets, lowering of overhead expenses, consolidating corporate functions, relocating sales
and administrative offices into plants, rationalization of management structure and integration of business units with common activities to facilitate synergies. This determined focus on profit
improvement has reduced our long-term cost structure and is expected to improve efficiency across the platform. For the year ended December 31, 2008, we recorded IAROC of
$242.1 million relating to our North American and Latin American platforms. Of that amount, $183.4 million was related to an impairment charge on long-lived assets in North
America, $50.0 million related to restructuring charges incurred in 2008 for the reduction in work force and the closure of North American facilities and the continuation of prior year
initiatives, $0.4 million related to pension settlements and curtailments and $8.3 million related to multiemployer pension plans charge. See Note 6 for further detail on these
restructuring initiatives.

Goodwill impairment charge impact

In the fourth quarter of 2008, the printing services industry continued to be challenged by difficult market trends, largely declining
volumes, overcapacity and intense price competition, causing expected results for the North American reporting unit to fall short of expectations. We recorded a non-cash charge of
$341.1 million to reflect impairment of the goodwill in this reporting unit. See Item 5A. for more details.

In
the fourth quarter of 2007, our unsuccessful efforts to obtain new financing and our inability to conclude the previously announced sale/merger of our European operations combined
with a decline in our stock price triggered a requirement for a goodwill impairment test related to our reporting units. As a result, we recorded a total impairment charge of $1,832.9 million
related to our American and Latin American reporting units.

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Table of Contents

ITEM 6DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

ADirectors and Senior Management

Our Directors

Our Board of Directors is currently composed of six members. The term of office of each director expires upon the election of his or
her successor unless the director resigns from office or his or her office becomes vacant by death, removal or other cause. The following table sets forth, as at March 24, 2009, the names,
places of residence and principal occupations of the directors, the year of their appointment, the committees on which each director serves as a member, as the case may be, the number of Subordinate
Voting Shares held by each of them as well as the directorships they hold on other public companies.

All
the information in this Item has been provided to us by the persons concerned.

Name and Place of Residence

Principal Occupation

Director
Since

Number of
Subordinate
Voting
Shares Held

Other DirectorshipsDOUGLAS G. BASSETT, O.C., O. ONT.(AC)(NCGC)(PC)(EC)
Ontario, Canada

Chairman and President of Windward Investments (private investment company)


2007



 White Raven Capital CorporationANDRÉ CAILLÉ(AC)(HRCC)(PC)(EC)(RC)(IC)
Quebec, Canada

Corporate Director


2005



 National Bank of Canada
 Junex Inc.MICHÈLE DESJARDINS(HRCC)(NCGC)(PC)(RC)(IC)
Quebec, Canada

President, Koby Consulting Inc. (management consultant firm)


2007



None.JACQUES MALLETTE(RC)
Quebec, Canada

President and Chief Executive Officer of Quebecor World Inc.


2008

(1)

None.THE RIGHT HONOURABLE BRIAN MULRONEY(EC)
Quebec, Canada

Chairman of the Board of Quebecor World Inc. and Senior Partner of Ogilvy RenaultLLP(law firm)


1997

(2)

 Quebecor Inc.
 Archer-Daniels-Midland Company
 Barrick Gold Corporation
 Blackstone Group L.P.
 Wyndham Worldwide Corporation
 Independent News and Media plcALAIN RHÉAUME(AC)(HRCC)(NCGC)(EC)(IC)(RC)
Quebec, Canada

Lead Director of Quebecor World Inc. and Managing Partner of Trio Capital (private investment firm specialized in telecommunications)


1997



 Boralex Income Fund
 Kangaroo Media Inc.
 DiagnoCure Inc.


(AC)

Member of our Audit Committee.(HRCC)

Member of our Human Resources and Compensation Committee.


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(NCGC)

Member of our Nominating and Corporate Governance Committee.(PC)

Member of our Pension Committee.(EC)

Member of our Executive Committee.(RC)

Member of our Restructuring Committee.(IC)

Member of our Independent Committee.


Except as stated below, each of the aforementioned directors has, during the past five years, carried on his or her current occupation or held
other management positions with the same or other associated companies or firms, including affiliates and predecessors, indicated opposite his or her name.



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Our Executive Officers

The following table sets forth, as at March 24, 2009, the names, positions with Quebecor World as well as the number of
Subordinate Voting Shares and options to purchase Subordinate Voting shares held by each of them.

Name and Place of Residence

Position with Quebecor World

Number of Subordinate Voting
Shares Held

Number of Options to Purchase Subordinate Voting
Shares HeldJACQUES MALLETTEQuebec (Canada)

Director, President and Chief Executive Officer





224,000JEREMY ROBERTSQuebec (Canada)

Chief Financial Officer


2,577


30,384RÉGIS RÉHELQuebec (Canada)

President, Quebecor World Canada





GUY TRAHANBuenos Aires (Argentina)

President, Latin America





173,528DAVID BLAIROntario (Canada)

Senior Vice President, Operations, Technology and Continuous Improvement


6,484


201,175MICHÈLE BOLDUCQuebec (Canada)

Senior Vice President, Legal Affairs and General Counsel





10,000SYLVAIN LEVERTQuebec (Canada)

Senior Vice President, Corporate Services


2,646


2,859BEN SCHWARTZQuebec (Canada)

Senior Vice President, Human Resources





MARIO D'ARIENZOQuebec (Canada)

Vice President, Real Estate


1,127


DIANE DUBÉQuebec (Canada)

Vice President, Corporate Controller


1,963


15,779JO-ANN LONGWORTHQuebec (Canada)

Chief Accounting Officer





ROLAND RIBOTTIQuebec (Canada)

Vice President, Corporate Finance and Treasurer


336


8,000TONY ROSSQuebec (Canada)

Vice President, Communications


2,834


8,148MARIE-ÉLIZABETH CHLUMECKYQuebec (Canada)

Corporate Secretary





LUCIE DESJARDINSQuebec (Canada)

Assistant Corporate Secretary








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All
of our officers have held the positions and principal occupations indicated above or other occupations within the Quebecor Group of companies for the past five years, except as
otherwise indicated below:



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BCompensation

Compensation of Directors

The director's compensation program is designed to attract and retain the most qualified people to serve on the Board and its
committees. Annual retainers and attendance fees are paid to the members of the Board who do not serve in any management function for the Corporation, its subsidiaries or its controlling shareholder,
Quebecor Inc. The Corporation currently pays its non-management directors compensation in accordance with the schedule below:

Directors' Compensation Schedule

FeeBoard Chair Retainer


US$300,000Board Retainer


US$100,000Lead Director


US$10,000Committee Chair RetainerAudit Committee


US$10,000Other Committees


US$8,000Meeting Attendance Fees (per meeting)


US$2,500


Up until February 2008, directors were required to receive at least 50% of their annual retainer in the form of deferred share units
("DSUs") under a Directors' Deferred Share Unit Plan (the "DDSU Plan"), with the option of being able to elect to receive up to 100% of their annual retainer in the form of DSUs. The value of
DSUs corresponded to the value of the Subordinate Voting Shares as listed on the New York Stock Exchange ("NYSE"). However, in light of the Insolvency Proceedings, the delisting of the
Subordinate Voting Shares from the NYSE and the significant drop in the market price of the Subordinate Voting Shares, the Corporation terminated the DDSU Plan in February 2008. Consequently,
all directors' remuneration as described above is now paid by the Corporation entirely in cash.

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Compensation of Executive Officers

The following table shows certain selected compensation information for the President and Chief Executive Officer ("CEO") and the Chief
Financial Officer of the Corporation during the Corporation's most recently completed financial year and the three other most highly compensated executive officers of the Corporation who were serving
as such as at December 31, 2008 and whose total salary and bonus exceeded CA$150,000 in the most recently completed financial year (collectively, the "Named Executive Officers"), in each case
for services rendered in all capacities during the financial year ended December 31, 2008.

SUMMARY COMPENSATION TABLE

Non-equity incentive
plan compensationName and principal position

Year

Salary
(CA$)

Share-
based
awards
(CA$)

Option-
based
awards
(CA$)

Annual
incentive
plans
(CA$)(1)

Long-term
incentive
plans
(CA$)(1)

Pension
value
(CA$)(2)

All other
compensation
(CA$)(3)

Total
compensation
(CA$)Jacques Mallette
President and Chief Executive Officer(4)


2008


1,000,000








1,431,076











2,431,076Jeremy Roberts(4)
Chief Financial Officer


2008


280,902








309,447











590,349Guy Trahan
President
Latin America


2008


472,917(5)








490,442(5)











963,359Ben Schwartz
Senior Vice President, Human Resources


2008


317,254








304,147








223,752(5)(6)


845,153David Blair
Senior Vice President, Operations, Technologies and Continuous Improvement


2008


332,514








361,678











694,192


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Aggregate Compensation

During the financial year ended December 31, 2008, the Corporation paid an aggregate of CA$9,304,822 to all of its directors and
executive officers in salary, bonus, perquisites and benefits in kind. No stock options were granted to any director or executive officer during the financial year ended
December 31, 2008.

In
addition, the Corporation and its subsidiaries set aside or accrued an aggregate of CA$1,458,398 for all pension, retirement or similar benefits that may be payable to its directors
and executive officers.

Executive Compensation Policy

The Human Resources and Compensation Committee is currently composed of three directors, namely André
Caillé (Chairman), Michèle Desjardins and Alain Rhéaume, and it assists the Corporation's Board of Directors in fulfilling its governance responsibilities
for the Corporation's human resources policies and practices. As part of its mandate, the Human Resources and Compensation Committee reviews the Corporation's compensation principles, policies and
plans and reports to the Board on the Corporation's executive compensation.

The
philosophy underlying the Corporation's executive compensation policy is to attract and retain senior management able to lead the Corporation, reward management performance and
reinforce business strategies and corporate priorities. The recruitment and retention of senior management who are performance-oriented and capable of dealing with the challenges facing the
Corporation is fundamental to achieving the Corporation's mission and long-term objectives.

The
Corporation's policy is for overall compensation paid to its executive officers to reflect average compensation levels based on general industry market data provided by external
compensation consultants and taking into account the management position level occupied by our executive officers with a view to ensuring that specific compensation packages are both appropriate and
equitable. For
the purposes of assisting the Human Resources and Compensation Committee, the Corporation employs from time to time the services of external compensation consultants, who advise the Corporation with
respect to its compensation policies and provide comparator compensation data upon request by the committee.

Ordinarily,
our executives' salaries are reviewed annually with adjustments made to reflect the criteria discussed above.

Historically,
the executive compensation package has been composed of three major components: (i) base salary and benefits; (ii) short-term incentive
compensation; and (iii) long-term incentive compensation.

The
relative weight attributed to each component of compensation varies according to the level and nature of the executive's position with the Corporation. In general, the higher the
position, the greater will be the component of compensation that is variable and at risk. The Corporation believes that this system serves to better align an executive's degree of influence and the
Corporation's operational results. The relative weight attributed to each component of the remuneration is determined according to market figures and takes into account the Corporation's internal
policies and performance. Prior to the Insolvency Proceedings, the compensation structure for the most highly ranked executives approved by the Human Resources and Compensation Committee attributed a
weight ranging from 20% to 35% to base compensation and 65% to 80% to incentive compensation and for other executives a weight ranging from 45% to 70% was attributed to incentive compensation.

For
2009, the annual base salary of the President and Chief Executive Officer as well as all executive officers who report directly to the President and Chief Executive Officer and
certain other

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executive
officers was reduced by 5% as part of a voluntary senior management initiative in light of current economic and market conditions.

Future
decisions affecting executive compensation levels and programs in 2009 may also reflect and take into consideration the unique and continuously changing nature of the Insolvency
Proceedings, as well as deteriorating economic and market conditions.

Compensation of the President and Chief Executive Officer

As
part of its mandate, the Human Resources and Compensation Committee reviewed the total compensation package of Jacques Mallette who succeeded Wes W. Lucas
as our President and Chief Executive Officer on December 17, 2007. Considering the international nature of the Corporation's operations, for 2008, the target value of the Chief Executive
Officer's compensation components were determined to be in line with the median of the U.S. market (in local currency), which is in line with the upper quartile of the Canadian market.
These compensation components are as follows:



Short-term and Long-Term Incentive Compensation

Prior
to the commencement of the Insolvency Proceedings, we maintained a short-term incentive plan (referred to as the "Management Incentive
Compensation Plan" or the "MICP") for the senior management of the Corporation and its subsidiaries, which provided for the payment of cash bonuses to executives and managers whose business units
(printing service groups or divisions) attained results in line with the annual financial and strategic targets
approved by the Corporation, and additional bonuses if the operating results surpassed these financial and strategic targets. Our short-term incentive plan focused on the achievement of
key financial and strategic performance indicators, such as earnings before interest and tax ("EBIT"), return on capital employed ("ROCE"), cost of capital, earnings per share ("EPS"), return on
equity ("ROE"), strategic initiatives, corporate development, capability building and cost reduction targets. The specific amount of these payments were approved by the Human Resources and
Compensation Committee. In the case of the Named Executive Officers, incentive bonuses varied in proportion to base salary, depending primarily on the level of responsibilities and whether or not the
specified financial and strategic objectives are attained. When such objectives were exceeded, bonuses are higher; when objectives are not attained, the incentive bonuses are lower or nil, depending
on the circumstances. In connection with the Insolvency Proceedings, the Corporation decided to completely overhaul its MICP.

Also,
prior to the Insolvency Proceedings, the long-term incentive component was comprised of (i) the Corporation's Executive Stock Option Plan (the "ESOP"), which
provided for the issuance of stock options to executive officers to purchase Subordinate Voting Shares, and (ii) a Deferred Performance Share Unit Plan (the "DPSUP").

The
ESOP was initially adopted in April 23, 1992 as a performance incentive for certain key employees of the Corporation. In furtherance of a general goal of encouraging the
Corporation's

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development
and growth, the ESOP was implemented in order to create direct links between executive compensation and increased value for shareholders. In addition, the ESOP was also conceived with a
view to developing each eligible executive's sense of ownership in the Corporation, while aligning their compensation to meaningful and measurable performance goals reinforced through the inclusion of
performance targets. The Corporation granted stock options to executives as a long-term incentive intended with a view to enhancing both retention and attraction.

The
purpose of the DPSUP was to (i) promote a better alignment of the interests of the Corporation's shareholders and key executives, (ii) provide a
tax-deferred capital accumulation opportunity to key executives through deferral of compensation, and (iii) provide the Corporation with a method of rewarding and retaining select
executives. Participation in the DPSUP had been mandatory for all members of "Senior Management", being all employees of the Corporation whose compensation was directly approved by the Human Resources
and Compensation Committee.

However,
with the Insolvency Proceedings initiated in January 2008, the Corporation terminated the ESOP for all future incentive grants. In addition, the DPSUP, which was
originally implemented effective January 1, 2005, and which had already been suspended for the 2006 and 2007 financial years, was also terminated in December 2008.

On
July 9, 2008, the Quebec Superior Court (the "Court") authorized the implementation and continuation by Quebecor World of the MICP. Our objective was to implement for
2008 and the first half of 2009 a redesigned MICP, which existed prior to the Insolvency Proceedings, and the parameters of which have now been modified and enhanced to take into account the
challenges related to the Insolvency Proceedings and to drive employee performance during this critical time period.

The
2008/2009 MICP, as approved by the Court, has been simplified to focus on (i) attaining and surpassing specified adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA") targets as measured over the 18-month loan period provided for under our DIP Credit Agreement and (ii) creating value for stakeholders. Bonuses granted under
the MICP are expressed, as in the past, as a percentage of a participant's base salary. For a majority of the participants, that percentage will be the same as it was in 2007. In addition, some MICP
participants will be eligible for enhancements to their 2008 MICP award. The enhanced portion of the MICP is intended to provide competitive compensation to employees who have been identified as being
particularly critical to our successful emergence from the Insolvency Proceedings, as well as to better align their interests with those of the Corporation and its stakeholders. The eligible employees
have been identified by our senior management based on the following factors and objectives: the nature of their job requirements; the importance of their role in the management of specific operations
and their ability to influence the success of our restructuring efforts; meeting customized performance objectives; and ensuring that the Corporation meets its overall restructuring goals. We
currently have 239 participants in the MICP, of which 81 are eligible for enhancements to their 2008 MICP awards and 11 currently participate solely in the enhanced portion of the
MICP.

Awards
under the 2008/2009 MICP will be determined using two measuring periods: (i) the 2008 calendar year, for which awards are payable no later than March 31, 2009; and
(ii) the first six months of 2009, for which awards are payable no later than September 30, 2009. For divisional participants, the performance metric of adjusted EBITDA will be broken
down into two components: (1) 75% will be based on the employees' divisional adjusted EBITDA; and (2) 25% will be based on consolidated corporate adjusted EBITDA. With respect to
corporate participants, the performance metric of adjusted EBITDA will be: (1) 75% of adjusted EBITDA of each division on a weighted basis; and (2) 25% of consolidated adjusted EBITDA.
For each participant, there will be a threshold level of adjusted EBITDA (corresponding to an award of one-third of the maximum award), a target level (corresponding to an award of
two-thirds of the maximum award) and a maximum level (corresponding to the maximum award). MICP awards will be forfeited if a participant leaves the Corporation

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voluntarily
(excluding retirement) before the payout date. In the event of retirement, death or termination other than for cause, the participant will receive a pro-rated award based on
the Corporation's performance through the full award period and payable on the scheduled payout date. It is currently estimated that the total cost of the 2008/2009 MICP over 18 months
(including the enhanced portion) will be between $12 million and $35 million.

Despite
the termination of the ESOP for all future option grants, the ESOP remains in force for all options that were outstanding at the time of termination. As at March 24, 2009,
the maximum number
of Subordinate Voting Shares that were authorized to be issued under the ESOP was 11,000,000, of which 1,817,766 have been exercised and 9,182,234 Subordinate Voting Shares remained
reserved for plan participants, representing 0.89% and 4.48%, respectively, of all issued and outstanding Multiple Voting Shares and Subordinate Voting Shares combined as at March 24, 2009.
From this reserve, at March 24, 2009, a total of 4,667,923 options to purchase Subordinate Voting Shares were outstanding (i.e. unexercised options that have neither expired nor
been cancelled), representing 2.28% of all issued and outstanding Multiple Voting Shares and Subordinate Voting Shares combined. Furthermore, an additional 65,000 options had been granted
outside the reserve under the ESOP as inducement options to an officer of the Corporation. In light of the Insolvency Proceedings and the termination of the ESOP for all future option grants, we
withdrew our application to the TSX to list the additional 2,000,000 Subordinate Voting Shares approved at our annual meeting of shareholders held in May 2007.

Options granted in 2008

No
options to purchase Subordinate Voting Shares were granted to the Named Executive Officers during the financial year ended December 31, 2008.

Employment Agreements

The Corporation has entered into employment agreements with each of the Named Executive Officers. Pursuant to their employment
agreements, each Named Executive Officer is entitled to participate in the Corporation's short-term incentive plan and to receive other benefits commensurate with his position. The
employment agreements are for an indefinite term

Only
Mr. Mallette's and Mr. Schwartz's employment agreements provide for benefits payable upon termination of employment. In the event Mr. Mallette's employment is
terminated without cause, he will be entitled to a reasonable severance payment, while Mr. Schwartz would be entitled to a severance payment equal to a minimum of twelve months' of his then
prevailing annual base salary upon termination without cause as well as a proportionate amount of his MICP payments for such 12-month period. Mr. Mallette's agreement also provides
that if a change of control of the Corporation occurs and (i) his employment is terminated without cause or (ii) he resigns for a serious reason, he will be entitled to a
lump-sum payment equal to 18 months of his then prevailing annual base salary and benefits, being his annual target bonus and the value of his annual benefits related to automobile
and group insurance policy, excluding the short-term and long-term disability coverage.

CBoard Practices

Reference is made to "Our Directors" and "Our Executive Officers" above for the current term of office, if
applicable, and the period during which our directors and senior management have served in that office.

Our
Board of Directors has an Audit Committee and a Human Resources and Compensation Committee.

The
Corporation's Statement of Corporate Governance Practices is set out at Exhibit 15.3 to this annual report.

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Audit Committee

Composition and Mandate of Audit Committee

Our
Board of Directors believes that the composition of the Audit Committee reflects a high level of financial literacy and expertise. Messrs. Alain
Rhéaume (Chairman), Douglas G. Bassett and André Caillé are the current members of our Audit Committee, each of whom is independent within the meaning of
the applicable U.S. securities laws and regulations as well as Canadian Multilateral Instrument 52-110Audit
Committees(including Form 52-110F1Audit Committee Information Required in an AIF)
("MI 52-110").

The
Audit Committee oversees the integrity of the accounting and financial reporting process and systems of internal control through discussions with our management, the external
auditors and the internal auditors. The Audit Committee is responsible for reviewing annual and quarterly financial statements, annual and quarterly Management's Discussion and Analysis, financial and
earnings press releases and certain other disclosure and offering documents, prior to their approval by the Board of Directors and their public disclosure and filing with the applicable regulatory
authorities. The Audit Committee is also responsible for reviewing the compliance of management certification of financial reports in accordance with applicable legislation. The Audit Committee
reviews its processes on a regular basis and uses the expertise of external advisors when necessary or advisable. The Audit Committee holdsin camerasessions after each regular meeting and more often, if it deems it necessary. The Audit Committee's role and oversight responsibility is described in the Mandate of the Audit Committee, which is
available on the Corporation's website at www.quebecorworld.com under the "Investors" Tab and filed as Exhibit 15.1 to this annual report.

Education and Experience of Audit Committee Members

The
education and experience of each of the members of the Audit Committee that is relevant to the performance by such members of their responsibilities on
such Committee is described below.

Alain
Rhéaume (Chairman)Mr. Rhéaume has a degree in Business Administration from Université Laval. He has served as
managing partner of Trio Capital since January 2006. He served as Chief Financial Officer of Microcell Telecommunications Inc. from 1996 until his appointment as President and Chief
Executive Officer of Microcell PCS in February 2001. Between 1992 and 1996, Mr. Rhéaume was the Deputy Minister of Finance of the Province of Quebec.
Mr. Rhéaume has served on the board of directors and audit committee of a number of public companies, some of which are registrants with the SEC and are required to reconcile
their financial statements between Canadian and U.S. generally accepted accounting principles.

Douglas
G. BassettMr. Bassett has served as Chairman and President of Windward Investments (a private investment company) since 2000. Previously, he was
Vice-Chairman of CTV Inc. from 1998 to 2000, and President and Chief Executive Officer of Baton Broadcasting Inc. from 1990 until 1996. The University of New Brunswick
awarded Mr. Bassett an honorary degree of Doctor of Laws,honoriscausa in 1988. He has been a
director of Quebecor World since May 2007 and serves as the Chairman of our Executive Committee and our Pension Committee and a member of our Audit Committee and our Nominating and Corporate
Governance Committee. Mr. Bassett is also a director of White Raven Capital Corporation.

André
CailléMr. Caillé has a Bachelor's degree in specialized chemistry as well as Master's and Doctorate degrees in
physical chemistry. He has been a member of the Audit and Risk Management Committee of National Bank of Canada since October 2005. He was President and Chief Executive Officer and a member of
the board of directors of Hydro-Quebec from 1996 to 2005 and served as Chairman of Hydro-Quebec from April to September 2005. From 1987 to 1996, Mr. Caillé was President
and Chief Executive Officer of Gaz Métro Inc. and, from 1974 to 1982, Deputy Minister of

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the
Environment of Quebec. Mr. Caillé has been a member of our Audit Committee since December 2008.

Human Resources and Compensation Committee

The Human Resources and Compensation Committee is currently composed of three directors, each of whom is independent:
André Caillé (Chairman), Alain Rhéaume and Michèle Desjardins.

The
Committee's responsibilities include: (i) succession planning for the members of senior management; (ii) hiring and appointment, as well as the assessment of members of
senior management and approving the compensation of senior management or, in the case of the Corporation's five most senior ranking executive officers, recommending their compensation to the Board;
(iii) reviewing the CEO's corporate goals and objectives and assessing his performance in light of such goals and objectives; and (iv) ensuring that appropriate human resources systems
are in place, so that the Corporation can attract, motivate and retain executives and personnel who exhibit high standards of integrity, as well as competence in order to meet its business objectives.
The Mandate of the Committee is available on the Corporation's website at www.quebecorworld.com under the "Investors" Tab.

DEmployees

As at December 31, 2008, we employed approximately 20,000 people in North America, of which approximately 5,600 or
approximately 28% are unionized. As at December 31, 2008, 65 of our plants and related facilities in North America were non-unionized. As at December 31, 2008, we had
42 separate collective bargaining agreements in North America. Furthermore, eight collective agreements covering approximately 890 employees are currently in negotiation. Of these, four
collective agreements covering approximately 680 employees expired in 2008
and two collective agreements covering approximately 200 employees expired in 2007. In addition, two collective agreements covering approximately 195 employees will expire
in 2009.

As
at December 31, 2008, we also employed approximately 2,400 people in Latin America, the majority of which are either governed by agreements that apply
industry-wide or by a collective agreement.

EShare Ownership

Reference is made to "Our Directors andOur Executive Officers" above for the number of Subordinate Voting
Shares and options to purchase Subordinate Voting Shares, as the case may be, held by each of our directors and executive officers and to "Compensation of our Directors and Executive
Officers" for a description of our management incentive compensation plan.

ITEM 7MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

AMajor Shareholders

As at March 24, 2009, there were 46,987,120 Multiple Voting Shares and 158,178,460 Subordinate Voting Shares issued and
outstanding.

The
Subordinate Voting Shares, each of which carries the right to one vote, are restricted securities (within the meaning of Canadian regulations respecting securities) in that they do
not carry equal voting rights to the Multiple Voting Shares, each of which carries the right to ten votes. As of March 24, 2009, 25.19% of all voting rights in the Corporation were attached to
the Subordinate Voting Shares.

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Principal Shareholders

Quebecor Inc., directly or through a wholly-owned subsidiary, namely 4032667 Canada Inc., is the majority
shareholder of the Corporation. As at March 24, 2009, Quebecor Inc. held a total of 46,911,277 Multiple Voting Shares, representing 99.84% of the issued and outstanding Multiple
Voting Shares and 74.69% of all the voting rights in the Corporation. A trust established for the benefit of Érik Péladeau and Pierre Karl Péladeau has
voting control of Quebecor Inc., the Corporation's controlling shareholder, with 17,508,964 Class A Multiple Voting Shares and 19,800 Class B Subordinate Voting
Shares of Quebecor Inc., representing 67.09% of all voting interests in Quebecor Inc. Thus, in principle, and subject to the discussion below, Quebecor Inc. possesses sufficient
voting power to exercise significant influence over our business and affairs and to determine many matters requiring shareholder approval, including the election of directors and the approval of
significant corporate transactions and changes to our organizational documents. The interests of Quebecor Inc. may conflict with the interests of other holders of our equity and debt
securities. However, the Court has exempted us from the requirement to hold an annual meeting of shareholders in 2009 until such time as we emerge from the Insolvency Proceedings, and any fundamental
transaction or proposed change to our organizational documents would require Court approval. Consequently, even though Quebecor Inc. currently holds 74.69% of the Corporation's outstanding
voting interests, it is unlikely that Quebecor Inc. would in fact be able to exercise its votes during the Insolvency Proceedings in order to change the composition of the Board of Directors or
cause fundamental changes in the affairs and organizational documents of the Corporation.

In
the event we successfully implement a plan of reorganization pursuant to the Insolvency Proceedings, our various creditors will, in all likelihood, hold a majority of the outstanding
voting interests in the Corporation and it is possible that one or more of such creditors or groups of related creditors may exercise control over a significant number of our voting shares at
such time.

To
the knowledge of the directors and officers of the Corporation as of February 17, 2009, based on the filings with the SEC and the Canadian securities regulatory authorities,
the persons who, as at December 31, 2008, beneficially owned or exercised control or direction over more than 5% of the Subordinate Voting Shares are as follows:

Name and Address of Beneficial Owner

Number of
Subordinate Voting Shares Owned
or Controlled

Percent of Class

Total Voting
PowerFranklin Resources, Inc.
One Franklin Parkway, San Mateo, CA 94403-1906


13,371,564


8.45%


2.13%Elm Ridge Capital Management, LLC
3 West Main Street, 3rd Floor, Irvington, NY 10533


7,552,055


4.77%


1.20%AIM Funds Management Inc.
5140 Yonge Street, Suite 900
Toronto, Ontario M2N 6X7


7,090,200


4.48%


1.13%Avenue Capital Management II, L.P.
535 Madison Ave., 15th Floor, New York, NY 10022


5,518,000


3.49%


0.88%


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Details of Significant Changes in the Percentage Ownership held by Major Beneficial Owners

The table below presents the significant changes in the percentage ownership of the major beneficial owners of our Subordinate Voting
Shares during the past three years:

2008-2009

2007-2008

2006-2007Name of Beneficial Owner

Number of
Subordinate
Voting Shares

%

Number of
Subordinate
Voting Shares

%

Number of
Subordinate
Voting Shares

%Beutel, Goodman & Company Ltd.



(1)


(1)

6,654,329
(2)

7.82
(2)

4,958,954
(3)

5.86
(3)Brandes Investment Partners, L.P.



(4)


(4)

8,530,772
(5)

10.03
(5)

11,098,601
(6)

13.12
(6)Alliance Bernstein L.P.


36,300
(7)

0.02
(7)

36,300
(7)

0.04
(7)

9,916,465
(8)

11.66
(8)


---

United States Shareholders

As of December 31, 2008, there were a total of 406 holders of record of our Subordinate Voting Shares, of which
91 were registered with addresses in the United States. We believe that the number of beneficial owners is substantially greater than the number of record holders, because a large
portion of our Subordinate Voting Shares are held of record in broker "street names." As of December 31, 2008, United States holders of record held approximately 3.3% of our outstanding
Subordinate Voting Shares. To the knowledge of the directors and officers of the Corporation, all of the Corporation's Multiple Voting Shares were held of record in Canada as at
December 31, 2008.

Trust Agreement

Our articles of amalgamation and our various articles of amendment (collectively, the "Articles") do not contain any rights or
provisions applicable to holders of our Subordinate Voting Shares where a take-over bid (or tender offer) is made for the Multiple Voting Shares. Furthermore, under applicable
Canadian securities laws, an offer to purchase Multiple Voting Shares would not necessarily require that an offer be made to purchase Subordinate Voting Shares. However, our significant shareholder,
Quebecor Inc., has provided undertakings in favour of the holders of Subordinate Voting Shares in certain circumstances where a take-over bid is made for the Multiple Voting Shares.
In fact, in compliance with the rules of the TSX, Quebecor Inc. entered into an agreement (the "Trust Agreement") with Computershare Trust Company of Canada (the "Trustee"),
4032667 Canada Inc. (a corporation wholly-owned by Quebecor Inc.) and the Corporation, pursuant to which Quebecor Inc. has undertaken not to sell, directly or
indirectly, any Multiple Voting Shares owned by it pursuant to a take-over bid (or tender offer), as defined by applicable securities legislation, under circumstances

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where
such securities legislation would have required that the same offer be made to holders of Subordinate Voting Shares, as if such holders were holders of Multiple Voting Shares. Under current
rules, this would include a sale of Multiple Voting Shares by Quebecor Inc. at a price per share in excess of 115% of the market price of the Subordinate Voting Shares as determined under such
legislation (generally the twenty-day average trading price of such shares prior to a bid). This undertaking does not apply if: (a) such sale is made pursuant to an offer to
purchase Multiple Voting Shares made to all holders of Multiple Voting Shares and an offer with terms at least as favorable as the terms of the offer to purchase Multiple Voting Shares is made
concurrently to all holders to purchase Subordinate Voting Shares at a price per share at least as high as the highest price per share paid in connection with the take-over bid for the
Multiple Voting Shares, which offer has no condition attached other than the right not to take up and pay for the Subordinate Voting Shares tendered if no shares are purchased pursuant to the offer
for Multiple Voting Shares, or (b) there is a concurrent unconditional offer, of which all its terms are at least as favorable to purchase all of the Subordinate Voting Shares at a price per
share at least as high as the highest price per share paid in connection with the take-over bid for the Multiple Voting Shares.

The
Trust Agreement permits, subject to compliance with applicable securities legislation, certain indirect sales resulting from the acquisition of shares of a corporation which,
directly or indirectly, controls Quebecor World, or controls or is controlled by Quebecor Inc. where (i) the transferor and transferee are each members of the "Péladeau
Family" (except that any indirect sale within the "Péladeau Family", other than to descendants in direct line, will not be permitted), and (ii) no such transferee is a party to
any arrangement under which any other person would participate in the ownership of, or have control or direction over more than 10% of the votes or 50% of the equity of such corporation,
Quebecor Inc. or the Corporation. The term "Péladeau Family" means collectively (i) any descendants, born or to be born, of the late Pierre Péladeau,
founder of Quebecor Inc., (ii) any existing or future trust primarily for one or several descendants, born or to be born, of the late Pierre Péladeau and their existing or
future spouses in fact or in law, and (iii) any and all existing or future corporations where at
least 90% of the votes attached to all outstanding Voting Shares and at least 50% of all outstanding equity shares are controlled, directly or indirectly, by any one or more of the foregoing.

Under
the Trust Agreement, a take-over bid for Quebecor Inc. is not deemed to be a take-over bid for Multiple Voting Shares for purposes of the Trust
Agreement, if the total assets of Quebecor World, as a result of the consolidation of the assets of Quebecor World in the books of Quebecor Inc., are not greater than 80% of the total assets of
Quebecor Inc. on a consolidated basis. The foregoing shall not be construed to limit any rights of the holders of Subordinate Voting Shares under applicable securities legislation.
Quebecor Inc. has publicly disclosed that it ceased consolidating the results and assets of Quebecor World into the results and assets of Quebecor as of January 21, 2008.

Under
the Trust Agreement, any disposition of Multiple Voting Shares (including a transfer to a pledge as security) or of securities convertible into Multiple Voting Shares by a holder
of Multiple Voting Shares party to the agreement or any person or company which it controls (a "Disposition") is conditional upon the transferee becoming a party to an agreement on
substantially similar terms and conditions as are contained in the Trust Agreement. The conversion of Multiple Voting Shares into Subordinate Voting Shares, whether or not such Subordinate Voting
Shares are subsequently sold, shall not constitute a Disposition for purposes of the Trust Agreement.

The
Trust Agreement provides that if a person or company carries out a sale (including an indirect sale) in respect of any Multiple Voting Shares in contravention of the Trust Agreement
and, following such sale, such Multiple Voting Shares are still owned by Quebecor Inc., Quebecor Inc. shall neither from the time such sale becomes effective nor thereafter:
(a) dispose of any of such Multiple Voting Shares or convert them into Subordinate Voting Shares, in either case without the prior written consent of the Trustee; or (b) exercise any
voting rights attaching to such Multiple Voting Shares except in

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accordance
with the written instructions of the Trustee. The Trustee may attach conditions to any consent the Trustee gives in exercising its rights and shall exercise such rights (i) in the
best interest of the holders of the Subordinate Voting Shares, other than Quebecor Inc. and holders who, in the opinion of the Trustee, participated directly or indirectly in the transaction
that triggered the operation of this provision (ii) in accordance with the CBCA and the applicable securities legislation. Notwithstanding a sale of shares of Quebecor Inc. which
constitutes an indirect sale of Multiple Voting Shares in contravention of the Trust Agreement, Quebecor Inc. shall have no liability under the Trust Agreement in respect of such sale, provided
that Quebecor Inc. is in compliance with all other provisions of the Trust Agreement including, without limitation, the foregoing provision.

The
Trust Agreement contains provisions for the authorization of action by the Trustee to enforce the rights thereunder on behalf of the holders of the Subordinate Voting Shares. The
obligation of the Trustee to take such action will be conditional on Quebecor World, a holder of Multiple Voting Shares alleged to be in default or holders of the Subordinate Voting Shares providing
such funds and indemnity as the Trustee may require. No holder of Subordinate Voting Shares will have the right,
other than through the Trustee, to institute any action or proceeding or to exercise any other remedy to enforce any rights arising under the Trust Agreement unless the Trustee fails to act on a
request authorized by holders of not less than 10% of the then outstanding Subordinate Voting Shares within thirty (30) days after provision of reasonable funds and indemnity to
the Trustee.

The
Trust Agreement provides that it may not be amended, and no provision thereof may be waived, except with the approval of: (a) the holders of Multiple Voting Shares who are
party to the Agreement; and (b) at least two-thirds of the votes cast by the holders of Subordinate Voting Shares present or represented at a meeting duly called for the purpose of
considering such amendment or waiver, which two-thirds majority shall include a simple majority of the votes cast by holders of Subordinate Voting Shares, excluding the holders of Multiple
Voting Shares party to the Agreement and their affiliates and any persons who have an agreement to purchase Multiple Voting Shares on terms which would constitute a sale for purposes of the Trust
Agreement other than as permitted thereby, prior to giving effect to such amendment or waiver.

No
provision of the Trust Agreement shall limit the right of any holder of Subordinate Voting Shares under applicable securities legislation.

A
copy of the Trust Agreement is filed as Exhibit 3.1 to this annual report.

BRelated Party Transactions

2008

2007

2006Companies then under common control:Revenues

$
41.8

$
56.3

$
66.3Selling, general and administrative expenses


20.4


25.0


13.6Management fees billed by Quebecor Inc.





5.0


4.8


Quebecor Inc.
("Quebecor"), directly and through a wholly-owned subsidiary, holds 75.1% of the outstanding voting interests in Quebecor World. Quebecor had the power to determine
many matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions. However, the Court has exempted Quebecor World from the
requirement to hold an annual meeting of shareholders until such time as the Corporation emerges from the Insolvency Proceedings. In addition, any fundamental transaction or proposed change to
Quebecor World's organizational documents would require Court approval. Consequently, even though Quebecor currently holds 75.1% of the Corporation's outstanding voting interests, it is unlikely that
Quebecor will be able to exercise its votes during the Insolvency Proceedings in order to change the composition of our Board of Directors or cause fundamental changes in our affairs and
organizational documents.

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In
addition, subsequent to the resignation of four Quebecor Directors from our Board of Directors on December 17, 2008, Quebecor no longer has significant influence over the
affairs of Quebecor World and therefore is no longer a related party as defined under GAAP. Accordingly all transactions between Quebecor and Quebecor World subsequent to that event are considered
third party transactions.

On
October 1, 2008, as part of our review of contracts (see Note 4 to our consolidated financial statements included elsewhere in this annual report), we repudiated a
10-year manufacturing agreement with subsidiaries of Quebecor Media Inc. that was entered into during October of 2007 for the printing of directories.

As
part of the Canadian claims procedure, we have received claims from the Quebecor Group, including a claim related to the repudiation indicated above. These claims were analyzed as
part of the claims process described in Note 4 to our consolidated financial statements included elsewhere in this annual report.

During
the financial year ended December 31, 2008, we have done business with Quebecor and other companies within the Quebecor Group.

During
the second quarter of 2008, we acquired all rights, title and interest to an aircraft previously leased by us from a third party and subsequently sold it to a wholly-owned
subsidiary of Quebecor Media Inc. The transaction was concluded at fair value based on two independent appraisals; we received a cash consideration of $20.3 million, resulting in a gain
on disposal of $9.9 million recorded in selling general and administrative expenses.

In
October 2007, we sold our participation in Nurun Inc. to Quebecor Media Inc, both companies then under common control, for a cash consideration of CA$1.7 million
($1.7 million), resulting in a gain of CA$1.2 million ($1.2 million). The transaction was realized at fair value.

In
October 2007, we sold a property to a company then under common control, Quebecor Media Inc., for consideration of CA$62.5 million ($64.0 million).
Simultaneously, we entered into a long-term lease of 17 years with Quebecor Media Inc., to rent a portion of the property sold. Consideration for the two transactions was
settled by a cash receipt of CA$43.9 million ($44.9 million) on the date of the transactions and we assumed a net balance of sale, including interest,
of CA$7.0 million ($7.2 million) receivable in 2013. The disposal of the property generated a gain of CA$4.0 million ($4.1 million) which was deferred and is being
amortized over the lease term.

In
June 2007, a real estate property was sold to a shareholder of Quebecor at fair value of $1.3 million, established based on an independent estimate, resulting in a gain
on disposal of $1.0 million which is included in selling, general and administrative expenses.

In
2006, we transferred the benefit of a deduction for tax under Part VI.I of theIncome Tax Act(Canada) to a company then under
common control for a consideration of CA$6.4 million ($5.5 million), recorded in receivables from related parties. This reduced our available future income tax assets by
CA$7.6 million ($6.5 million), and decreased the contributed surplus by CA$1.2 million ($1.0 million). The transaction was recorded at the carrying amount. The 2006
transaction has been adjusted in 2007, resulting in an increase of CA$0.4 million ($0.4 million) recorded in contributed surplus.

CInterests of Experts and Counsel

Not applicable.

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ITEM 8FINANCIAL INFORMATION

AConsolidated Statements and Other Financial Information

Our consolidated balance sheets as at December 31, 2008 and 2007 and our consolidated statements of income (loss), comprehensive
income (loss), shareholders' equity (deficit) and cash flows for the years ended December 31, 2008, 2007 and 2006, including the notes thereto and together with the auditors' report thereon,
are presented under "Item 17.Financial Statements."

Legal Proceedings

We are currently subject to the Insolvency Proceedings. See the notes to the consolidated financial statements included in "Item
17.Financial Statements," in particular Notes 1 and 4, as well as "Item 7.Major Shareholders and Related Party TransactionsRelated Party
Transactions."

In
addition, in the normal course of business, we are involved in various legal proceedings and claims, the outcome of which cannot be predicted with certainty in light of the ongoing
Insolvency Proceedings.

Dividend Policy and Reductions of Paid-Up Capital

Between October 23, 1992 and 1998, we declared and paid semi-annual dividends, and between 1998 and 2007, quarterly
dividends. The following table presents the annual dividends that we have declared and paid on all of our shares since January 1, 2006:

Period/Date

Multiple Voting
Shares and
Subordinate
Voting Shares

Series 2
Preferred
Shares

Series 3
Preferred
Shares

Series 4
Preferred
Shares

Series 5
Preferred
Shares2006

CA$0.30

N/A


CA$1.5380

CA$0.485590


CA$1.72502007

Nil

N/A


CA$0.769

N/A


CA$0.86252008

Nil

N/A


Nil

N/A


Nil


On January 18, 2006, our Board of Directors, in light of our capital spending at such time, approved a reduction of the quarterly dividend,
if, and when declared, on our Subordinate Voting Shares and our Multiple Voting Shares, from CA$0.14 per share to CA$0.10 per share, which reduction was applied as of and from the quarterly dividend
declared on our Subordinate Voting Shares and our Multiple Voting Shares on January 18, 2006, which was paid on March 1, 2006.

On
November 7, 2006, concurrently with the release of our results for the third quarter of 2006, we announced that our Board of Directors had suspended the payment of dividends on
our Subordinate Voting Shares and Multiple Voting Shares.

On
November 26, 2007, our Board of Directors also suspended dividend payments on our Series 3 Preferred Shares and Series 5 Preferred Shares.

In
light of the continuing Insolvency Proceedings, the Corporation has no current intention of declaring dividends on any of its outstanding shares for the foreseeable future.

BSignificant Changes

As of March 24, 2009, except as otherwise disclosed in this annual report, no significant change has occurred since the date of
the consolidated financial statements included in this annual report.

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ITEM 9THE OFFER AND LISTING

AOffer and Listing Details

Not applicable, except for Item 9.A.4.

Our
Subordinate Voting Shares, Series 3 Preferred Shares and Series 5 Preferred Shares are listed and posted for trading on the TSX. Our Subordinate Voting Shares
were also listed and traded on the NYSE up until January 23, 2008, when the NYSE suspended trading in the Subordinate Voting Shares due to a determination by NYSE that such shares were
no longer suitable for continued listing and
trading on such exchange. The Subordinate Voting Shares were removed from listing and registration on the NYSE at the opening of business on March 13, 2008.

The
following tables set forth the market price range of our listed shares for each of the five most recent financial years, for each of the eight most recent financial quarters, and for
each of the six most recent months. The high and low prices reflect the highest and lowest prices at which a board lot trade was executed in a trading session.

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TSXSUBORDINATE VOTING SHARES
Symbol: "IQW.TO"

Yearly Highs and Lows

High
(CA$)

Low
(CA$)2008


1.84


0.0052007


17.25


1.182006


15.99


10.672005


30.20


15.392004


31.05


23.01


Quarterly Highs and Lows

High
(CA$)

Low
(CA$)Q4 2008


0.095


0.005Q3 2008


0.195


0.05Q2 2008


0.33


0.14Q1 2008


1.84


0.095Q4 2007


9.98


1.18Q3 2007


13.82


8.79Q2 2007


15.85


12.50Q1 2007


17.25


12.91


Monthly Highs and Lows

High
(CA$)

Low
(CA$)February 2009


0.04


0.025January 2009


0.04


0.02December 2008


0.06


0.005November 2008


0.07


0.04October 2008


0.095


0.06September 2008


0.15


0.05


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NYSESUBORDINATE VOTING SHARES
Symbol: "IQW"

Yearly Highs and Lows

High
(US$)

Low
(US$)2008


1.75


0.102007


14.79


1.172006


13.74


9.362005


24.50


13.252004


23.59


16.92


Quarterly Highs and Lows

High
(US$)

Low
(US$)Q4 2008Q3 2008

- Trading Suspended on January 23, 2008 -Q2 2008Q1 2008

1.75

0.10Q4 2007

10.05

1.17Q3 2007

13.24

8.525Q2 2007

14.11

11.70Q1 2007

14.79

11.01


Monthly Highs and Lows

High
(US$)

Low
(US$)February 2009January 2009December 2008November 2008

- Trading Suspended on January 23, 2008 -October 2008September 2008


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TSXSERIES 3 PREFERRED SHARES
Symbol: "IQW-PD.TO"

Yearly Highs and Lows

High
(CA$)

Low
(CA$)2008


5.25


0.0052007


18.35


3.502006


17.90


15.002005


26.80


16.032004


25.90


24.25


Quarterly Highs and Lows

High
(CA$)

Low
(CA$)Q4 2008


0.24


0.005Q3 2008


0.65


0.005Q2 2008


1.00


0.31Q1 2008


5.25


0.15Q4 2007


13.85


3.50Q3 2007


17.00


12.02Q2 2007


17.20


16.50Q1 2007


18.35


15.11


Monthly Highs and Lows

High
(CA$)

Low
(CA$)February 2009


0.08


0.06January 2009


0.15


0.05December 2008


0.095


0.02November 2008


0.24


0.005October 2008


0.18


0.04September 2008


0.45


0.005


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TSXSERIES 5 PREFERRED SHARES
Symbol: "IQW-PC.TO"

Yearly Highs and Lows

High
(CA$)

Low
(CA$)2008


16.00


0.052007


25.45


11.952006


25.25


22.402005


28.50


22.252004


28.00


26.25


Quarterly Highs and Lows

High
(CA$)

Low
(CA$)Q4 2008


0.70


0.05Q3 2008


2.00


0.25Q2 2008


2.50


0.90Q1 2008


16.00


0.50Q4 2007


25.20


11.95Q3 2007


24.97


21.00Q2 2007


25.40


24.50Q1 2007


25.45


24.35


Monthly Highs and Lows

High
(CA$)

Low
(CA$)February 2009


0.19


0.125January 2009


0.285


0.09December 2008


0.28


0.05November 2008


0.30


0.10October 2008


0.70


0.155September 2008


1.15


0.25


BPlan of Distribution

Not applicable.

CMarkets

See above under "Offer and Listing Details".

ITEM 10ADDITIONAL INFORMATION

AShare Capital

Not applicable.

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BMemorandum and Articles of Association

The Corporation is governed by its Articles under the CBCA and by its bylaws (the "bylaws"). The Corporation's Articles are on
file with the Corporations Directorate of Industry Canada under Corporation Number 256168-9 and are filed as Exhibit 1.1 to this annual report. The Articles do
not include a stated purpose and do not place any restrictions on the business that the Corporation may carry on. Amended and Restated By-Law One is filed as Exhibit 1.2
to this annual report and By-Law Number 58 is filed as Exhibit 1.3 to this annual report.

Inspection Rights of Shareholders

Under the CBCA, shareholders are entitled to be provided with a copy of the list of registered shareholders of the Corporation. In
order to obtain the shareholder list, the Corporation must be provided with an affidavit including, among other things, a statement that the list will only be used for the purposes permitted by the
CBCA. These permitted purposes include an effort to influence the voting of shareholders of the Corporation, an offer to acquire securities of the Corporation and any other matter relating to the
affairs of the Corporation. The Corporation is entitled to charge a reasonable fee for the provision of the shareholder list and must deliver that list no more than ten days after receipt of the
affidavit described above.

Under
the CBCA, shareholders of the Corporation have the right to inspect certain corporate records, including its Articles and bylaws and minutes of meetings and resolutions of the
shareholders. Shareholders have no statutory right to inspect minutes of meetings and resolutions of directors of the Corporation. Shareholders of the Corporation have the right to certain financial
information respecting the Corporation. In addition to the annual and quarterly financial statements required to be filed under applicable securities laws, under the CBCA, the Corporation is required
to place before every annual meeting of shareholders its audited comparative annual financial statements. In addition, shareholders have the right to examine the financial statements of each of its
subsidiaries and any other corporate entity whose accounts are consolidated in the financial statements of the Corporation. On February 26, 2009, the Court ordered that the Corporation be
relieved of its obligation to call and hold an annual meeting of shareholders on or before June 30, 2009 and directed us to hold an annual meeting of shareholders within three months of the
final Court order approving a Plan and ending the Canadian Proceedings.

Directors

The Corporation's Articles provide that the minimum number of directors of the Corporation is three and the maximum number is 15. In
accordance with the Corporation's bylaws and the CBCA, a majority of its directors must be residents of Canada. In order to serve as a director, a person must be a natural person at least
18 years of age, of sound mind, not bankrupt, and must not be prohibited by any court from holding the office of director. For as long as the Corporation is a company that publicly distributes
its securities, at least two-thirds of its directors must not be officers or employees of the Corporation or its subsidiaries. Neither the Articles, bylaws, nor the CBCA impose any
mandatory retirement requirements for directors.

The
directors are elected by a majority of the votes cast at the annual meeting at which an election of directors is required, to hold office until the election of their successors
except in the case of resignations or if their offices become vacant by death or otherwise. Subject to the provisions of the Corporation's bylaws, all directors may, if still qualified to serve as
directors, stand for re-election. The Board of Directors is not replaced at staggered intervals but is elected annually. On February 26, 2009, the Court ordered that the Corporation
be relieved of its obligation to call and hold an annual meeting of shareholders on or before June 30, 2009 and directed us to hold an annual meeting of shareholders within three months of the
final Court order approving a Plan and ending the Canadian Proceedings.

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The
directors are entitled to remuneration as shall from time to time be determined by the Board of Directors or by a committee to which the Board of Directors may delegate the power to
do so. Under the mandate of the Corporation's Nominating and Corporate Governance Committee, such committee, comprised of a majority of independent directors, is tasked with making recommendations to
the Board of Directors with respect to directors' remuneration.

The
CBCA provides that a director who is a party to, or who is a director or officer of, or has a material interest in, any person who is a party to a material contract or transaction or
proposed material contract or transaction with the Corporation must disclose to the Corporation the nature and extent of his or her interest at the time and in the manner provided by the CBCA, or
request that same be entered in the minutes of the meetings of the Board of Directors, even if such contract, in connection with the normal business activity of the Corporation, does not require the
approval of either the directors or the shareholders. The CBCA prohibits interested directors from voting on any
resolution to approve the contract or transaction unless the contract or transaction:



The
CBCA provides that the Board of Directors may, on behalf of the Corporation and without authorization of its shareholders:



The
shareholders have the ability to restrict such powers through the Corporation's Articles or bylaws (or through a unanimous shareholder agreement), but no such restrictions are
in place.

The
CBCA prohibits the giving of a guarantee to any shareholder, director, officer or employee of the Corporation or of an affiliated corporation or to an associate of any such person
for any purpose or to any person for the purpose of or in connection with a purchase of a share issued or to be issued by the Corporation or its affiliates, where there are reasonable grounds for
believing that the Corporation is or, after giving the guarantee, would be unable to pay its liabilities as they become due, or the realizable value of the Corporation's assets in the form of assets
pledged or encumbered to secure a guarantee, after giving the guarantee, would be less than the aggregate of the Corporation's liabilities and stated capital of all classes. These borrowing powers may
be varied by the Corporation's bylaws or its Articles. However, the Corporation's Articles and bylaws do not contain any restrictions on or variations of these borrowing powers.

Pursuant
to the CBCA, the directors of the Corporation manage, or supervise the management of, the business and affairs of the Corporation and exercise all such powers and authority as
the Corporation is authorized to exercise pursuant to the CBCA, the Articles and the bylaws. The general duties of a director or officer of the Corporation under the CBCA are to act honestly and in
good faith with a view to the best interests of the Corporation and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Any breach of
these duties may lead to liability to the Corporation and its shareholders for breach of fiduciary duty. In addition, a breach of certain provisions of the CBCA, including, for example, the improper
payment of dividends

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or
the improper purchase or redemption of shares, will render the directors who authorized such action liable to account to the Corporation for any amounts improperly paid or distributed.

The
CBCA provides that the Board of Directors may, from time to time, appoint from amongst their number committees of the Board of Directors, and delegate to any such committee any of
the powers of the Board of Directors except those which pursuant to the CBCA a committee of the Board of Directors has no authority to exercise. As such, the Board of Directors has seven standing
committees: the Audit Committee, the Nominating and Corporate Governance Committee; the Human Resources and Compensation Committee; the Pension Committee; the Executive Committee; the Independent
Committee; and the Restructuring Committee.

The
Corporation's bylaws provide that the Corporation shall, to the full extent permitted by law, including the CBCA, indemnify a director or an officer of the Corporation, a former
director or officer of the Corporation or a person who acts or acted at the Corporation's request as a director or officer of a body corporate of which the Corporation is or was a shareholder or
creditor, and his or her heirs and legal representatives, against all costs, losses, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by
him or her in respect of any civil, criminal
or administrative action or proceeding to which he or she is made a party by reason of having been a director or officer of the Corporation or such body corporate.

The
directors of the Corporation are authorized to indemnify from time to time any director or other person who has assumed or is about to assume in the normal course of business any
liability for the Corporation or for any corporation controlled by the Corporation, and to secure such director or other person against any loss by the pledge of all or part of the movable or
immovable property of the Corporation through the creation of a hypothec or any other real right in all or part of such property or in any other manner.

Share Capitalization

Our authorized share capital consists of an unlimited number of Subordinate Voting Shares, an unlimited number of Multiple Voting
Shares and an unlimited number of Cumulative Redeemable First Preferred Shares issuable in series (the "Preferred Shares"), all without par value. The rights, preferences and restrictions
attaching to our Subordinate Voting Shares, our Multiple Voting Shares and our Preferred Shares are summarized below.

Subordinate Voting Shares

Our
Subordinate Voting Shares carry one (1) vote per share. Holders of Subordinate Voting Shares are entitled to receive dividends in such amounts and
payable at such time as the directors determine, subject always to the rights of the holders of any Preferred Shares. Our Subordinate Voting Shares are restricted shares (within the meaning of the
relevant Canadian regulations respecting securities) in that they do not carry equal voting rights to those attached to the Multiple Voting Shares. In the aggregate, all of the voting rights
associated with the Subordinate Voting Shares represented, as at March 24, 2009, 25.19% of the voting rights attached to all of our issued and outstanding voting securities.

Multiple Voting Shares

Our
Multiple Voting Shares carry ten (10) votes per share. Holders of Multiple Voting Shares are entitled to receive dividends in such amounts and they
are payable at such time as the directors determine, subject always to the rights of the holders of any Preferred Shares.
They are convertible at any time into Subordinate Voting Shares on a one-for-one basis. They are not publicly traded. Refer to Item 7A. of this annual report, "Major
Shareholders and Related Party TransactionsMajor ShareholdersTrust Agreement," for a detailed summary of the Trust Agreement entered into among us, the holders of our
Multiple Voting Shares and the Trustee appointed thereunder.

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Preferred Shares

The
number of Preferred Shares in each series and the related characteristics, rights and privileges are to be determined by the Board of Directors prior to
each issue. All the Preferred Shares are generally non-voting and they participate in priority to the Subordinate Voting Shares and Multiple Voting Shares in the event of liquidation,
dissolution, winding-up or other distribution of our assets. Each series of Preferred Shares rankspari passuwith every other series
of our Preferred Shares.

Series 2 Preferred Shares

The Series 2 Cumulative Redeemable First Preferred Shares (the "Series 2 Preferred Shares") were converted into
Series 3 Preferred Shares in December 2002.

Series 3 Preferred Shares

Holders of the Series 3 Preferred Shares were entitled to a fixed cash dividend of 6.152% per annum for the
five-year period that commenced on December 1, 2002 and that ended on November 30, 2007 and 6.130% per annum for the five-year period commencing on
December 1, 2007. On December 1, 2007 and at every fifth anniversary thereafter, our Series 3 Preferred Shares may be converted into Series 2 Preferred Shares under certain
conditions. These preferred shares were also redeemable, in whole or in part, at the Corporation's option, on December 1, 2007.

On
November 19, 2007, we announced that none of our 12,000,000 issued and outstanding Series 3 Preferred Shares would be converted into Series 2 Preferred
Shares. Starting December 1, 2007 and until November 31, 2012, holders of Series 3 Preferred Shares will be entitled to receive quarterly fixed dividends at an annual rate of
6.13% subject to being declared by our Board of Directors and as permitted by applicable law.

Series 4 Preferred Shares

On April 18, 2006, we redeemed, in accordance with the rights, privileges, restrictions and conditions attaching thereto, all
8,000,000 of our then issued and outstanding Series 4 Cumulative Redeemable First Preferred Shares (the "Series 4 Preferred Shares") at the applicable redemption price of CA$25.00
per share for an aggregate redemption price of CA$200 million. At the same time, we also paid all accrued and unpaid dividends on the Series 4 Preferred Shares up to
April 18, 2006.

Series 5 Preferred Shares

Our Series 5 Preferred Shares are entitled to a fixed cumulative preferential cash dividend of CA$1.725 per share per annum,
payable quarterly, if declared. On and after December 1, 2007, the Series 5 Preferred Shares are redeemable at our option at a price of CA$25.00 per share, or with regulatory approval,
the Series 5 Preferred Shares may be converted into Subordinate Voting Shares by us. On and after March 1, 2008, these Series 5 Preferred Shares may be converted at the option of
the holder into Subordinate Voting Shares, subject to our right prior to the conversion date to redeem for cash or find substitute purchasers for such Series 5 Preferred Shares.

Effective
March 1, 2008, 3,975,663 of our Series 5 Preferred Shares were converted into 51,410,291 Subordinate Voting Shares that were listed on the TSX. Effective
June 1, 2008, 517,184 of our Series 5 Preferred Shares were converted into 6,799,353 Subordinate Voting Shares that were listed on the TSX. Effective September 1, 2008,
744,124 of our issued and outstanding Series 5 Preferred Shares were converted into 9,943,356 Subordinate Voting Shares that were listed on the TSX. Effective December 1, 2008,
66,601 of our issued and outstanding Series 5 Preferred Shares were converted into 904,316 Subordinate Voting Shares that were listed on the TSX. Effective March 2, 2009, 256,364
of

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our
issued and outstanding Series 5 Preferred Shares were converted into 3,536,220 Subordinate Voting Shares that were also listed on the TSX.

Outstanding Share Data

The table below discloses our outstanding share data as at March 24, 2009:

Outstanding Share Data($ in millions and shares in thousands)

As at March 24, 2009Issued and
outstanding shares

Book valueMultiple Voting Shares


46,987

$
93.5Subordinate Voting Shares


158,178


1,294.7Series 3 Preferred SharesClassified as equity


12,000


212.5Series 5 Preferred SharesClassified as liability


1,440


28.3


Shareholder Actions

The CBCA provides that shareholders of the Corporation may, with leave of a court, bring an action in the name of and on behalf of the
Corporation for the purpose of prosecuting, defending or discontinuing an action on behalf of the Corporation. In order to grant leave to permit such an action, the CBCA provides that the court must
be satisfied that the directors of the Corporation were given adequate notice of the application, the shareholder is acting in good faith and that it appears to be in the Corporation's best interests
that the action be brought.

Action Necessary to Change Rights of Shareholders

In order to change the rights of its shareholders, the Corporation would need to amend its Articles to effect the change. Such an
amendment would require the approval of
holders of two-thirds of the issued and outstanding shares cast at a duly called special meeting. For certain amendments such as those creating a class of Preferred Shares, a shareholder
is entitled under the CBCA to dissent in respect of such a resolution amending the Articles and, if the resolution is adopted and the Corporation implements such changes, demand payment of the fair
value of its shares. Under the CBCA, certain amendments to Articles, including amendments that would generally prejudice the holders of a particular class or series of shares, require an additional
two-thirds approval on a class or series vote.

Disclosure of Share Ownership

In general, under applicable securities regulation in Canada, a person or company who beneficially owns, directly or indirectly, voting
securities of an issuer or who exercises control or direction over voting securities of an issuer or a combination of both, carrying more than ten percent of the voting rights attached to all the
issuer's outstanding voting securities is an insider and must, within ten days of becoming an insider, file a report in the required form effective the date on which the person became an
insider, disclosing any direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer. Additionally, securities regulation in Canada provides for the
filing of a report by an insider of a reporting issuer whose holdings change, which report must be filed within ten days from the day on which the change takes place.

Section 13
of theUnited States Securities Exchange Act of 1934(the "Exchange Act") imposes reporting requirements
on persons who acquire beneficial ownership (as such term is defined in the Rule 13d-3 under the Exchange Act) of more than five percent of a class of an equity
security

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registered
under Section 12 of the Exchange Act. The Corporation's Subordinate Voting Shares are so registered. In general, such persons must file, within ten days after such acquisition, a
report of beneficial ownership with the SEC containing the information prescribed by the regulations under Section 13 of the Exchange Act. This information is also required to be sent to the
issuer of the securities and to each exchange where the securities are traded.

Meeting of Shareholders

An annual meeting of shareholders is held each year for the purpose of considering the financial statements and reports, electing
directors, appointing auditors and authorizing the Board of Directors to determine their remuneration and for the transaction of other business as
may properly come before a meeting of shareholders. Any annual meeting may also constitute a special meeting to take cognizance and dispose of any matter of which a special meeting may take cognizance
and dispose. On February 26, 2009, the Court ordered that the Corporation be relieved of its obligation to call and hold an annual meeting of shareholders on or before June 30, 2009 and
directed us to hold an annual meeting of shareholders within three months of the final Court order approving a Plan and ending the Canadian Proceedings.

The
CBCA provides that the holders of not less than five percent of the outstanding voting shares of the Corporation may requisition the directors of the Corporation to call a meeting of
shareholders for the purpose stated in the requisition. Except in limited circumstances, including where a meeting of shareholders has already been called and a notice of meeting already given or
where it is clear that the primary purpose of the requisition is to redress a personal grievance against the Corporation or its directors, officers or shareholders, the directors of the Corporation,
on receipt of such requisition, must call a meeting of shareholders. If the directors fail to call a meeting of shareholders within twenty-one days after receiving the requisition, any
shareholder who signed the requisition may call the meeting of shareholders and, unless the shareholders resolve otherwise at the meeting, the Corporation shall reimburse the shareholders for the
expenses reasonably incurred by them in requisitioning, calling and holding the meeting of shareholders.

The
CBCA also provides that, except in limited circumstances, a resolution in writing signed by all of the shareholders entitled to vote on that resolution at a meeting of shareholders
is as valid as if it had been passed at a meeting of shareholders.

A
quorum of shareholders is present at an annual or special meeting of shareholders, regardless of the number of persons present in person at the meeting, if the holder or holders of
shares representing at least ten percent of the outstanding voting shares at such meeting are present in person or represented in accordance with the Corporation's bylaws.

Notice
of the time and place of each annual or special meeting of shareholders must be given not less than twenty-one days, nor more than fifty days, before the date of each
meeting to each director, to the auditor and to each shareholder entitled to vote thereat. If the address of any shareholder, director or auditor does not appear in the books of the Corporation, the
notice may be sent to such address as the person sending the notice may consider to be most likely to reach such shareholder, director or auditor promptly. Every person who, by operation of the CBCA,
transfers or by any other means whatsoever, becomes entitled to any share, shall be bound by every notice given in respect of such share which, prior to the entry of his or her name and address on the
register of the Corporation, is given to the person whose name appears on the register at the time such notice is sent. Notice of meeting of shareholders called for any other purpose other than
consideration of the financial statements and auditor's report, election of directors and reappointment of the incumbent auditor, must state the nature of the business in sufficient detail to permit
the shareholder to form a reasoned judgment on and must state the text of any special resolution or bylaw to be submitted to the meeting.

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Limitations on Right to Own Securities

Neither Canadian law nor the Corporation's Articles or bylaws limit the right of a non-resident to hold or vote Multiple
Voting Shares or Subordinate Voting Shares of the Corporation (collectively, the "Equity Shares"), other than as provided in the Investment Canada Act (the "Investment Act"). The Investment Act
prohibits implementation of certain direct reviewable investments by an individual, government or agency thereof, corporation, partnership, trust or joint venture that is not a "Canadian," as defined
in the Investment Act (a "non-Canadian"), unless, after review, the minister responsible for the Investment Act is satisfied or is deemed to be satisfied that the investment is
likely to be of net benefit to Canada. An investment in the Equity Shares of the Corporation by a non-Canadian (other than a "WTO Investor," as defined below) would be reviewable under the
Investment Act if it were an investment to acquire direct control of the Corporation, and the book value of the assets of the Corporation were Cdn$5.0 million or more (provided that immediately
prior to the implementation of the investment the Corporation was not controlled by WTO Investors). Subject to the Amendments (as defined below), an investment in Equity Shares of the Corporation by a
WTO Investor would be reviewable under the Investment Act if it were an investment to acquire direct control of the Corporation and the value of the assets of the Corporation equalled or exceeded
CA$312 million (for 2009). A non-Canadian, whether a WTO Investor or otherwise, would be deemed to acquire control of the Corporation for purposes of the Investment Act if he
or she acquired a majority of the Equity Shares of the Corporation. The acquisition of less than a majority, but at least one-third of the shares, would be presumed to be an acquisition of
control of the Corporation, unless it could be established that the Corporation was not controlled in fact by the acquirer through the ownership of the shares. In general, an individual is a WTO
Investor if he or she is a "national" of a country (other than Canada) that is a member of the World Trade Organization ("WTO Member") or has a right of permanent residence in a WTO Member. A
corporation or other entity will be a "WTO Investor" if it is a "WTO Investor-controlled entity," pursuant to detailed rules set out in the Investment Act. The United States is a WTO Member.
Certain transactions involving the Equity Shares would be exempt from the Investment Act, including: (a) an acquisition of the shares if the acquisition were made in the ordinary course of that
person's business as a trader or dealer in securities; (b) an acquisition of control of the Corporation in connection with the realization of a security interest granted for a loan or other
financial assistance and not for any purpose related to the provisions of the Investment Act; and (c) an acquisition of control of the Corporation by reason of an amalgamation, merger,
consolidation or corporate reorganization, following which the ultimate direct or indirect control in fact of the Corporation, through the ownership of voting interests, remains unchanged.

The
Canadian Federal Government has recently adopted certain amendments (the "Amendments") to the Investment Act. Some of the Amendments, which came into force on
February 6, 2009, introduce a national security test and review process, authorizing the Canadian Minister of Industry to review
investments that "could be injurious to national security", regardless of the size of the transaction. Some of the other Amendments will come into force on a day to be fixed by order of the Canadian
Governor in Council, including the increase to the thresholds that trigger governmental review for WTO Investors. Therefore, the thresholds for the review of direct acquisitions of control by WTO
Investors would increase from the current CA$312 million (based on book value) to CA$600 million (to be based on the "enterprise value" of the Canadian business) for the two years
after such Amendments come into force, to CA$800 million in the following two years and then to CA$1 billion for the next two years. Thereafter, the thresholds are to be adjusted to
account for inflation. A number of the Amendments still require additional definition and details, which will be set forth in regulations promulgated under the Investment Act.

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CMaterial Contracts

The following is a summary of each material contract or amendment to each material contract, other than contracts entered into in the
ordinary course of business, to which Quebecor World or any member of the Quebecor World group is a party and that were entered into in the two years immediately preceding the date of this annual
report. All of such material contracts and amendments thereto are filed as exhibits to this annual report. Current and potential investors are urged to consult such agreements as filed with the SEC
and the Canadian securities regulatory authorities, and the summary descriptions of such agreements contained in this annual report are qualified entirely by reference to the text of the agreements as
filed with such authorities.

DIP Credit Agreement dated as of January 21, 2008, as amended

The DIP Credit Agreement of Quebecor World and Quebecor World (USA), referred to collectively as the "DIP Borrowers" for the purposes
of this Item, has been entered into in the context of the Insolvency Proceedings further detailed in Item 4A. of this annual report, "Information on the CorporationHistory and
Development of the Corporation." It provides for US$1 billion credit facilities that mature in July 2009 unless we complete a plan of reorganization under Chapter 11 or a
plan of compromise or arrangement under the CCAA prior thereto. The DIP credit facilities consist of a term loan facility of US$600 million and a revolving credit facility of
US$400 million made available to each of the DIP Borrowers. Under the DIP Credit Agreement, the availability of the funds is determined by a formula based on a percentage of eligible assets
available as security.

Approximately
US$418 million, including fees, of the proceeds of the term loan facility were used to repay amounts owing under our North American securitization program, which we
terminated on January 24, 2008, with the balance of the credit facilities to be used for working capital and other general corporate purposes and to pay fees and expenses in connection with the
Insolvency Proceedings.

The
credit facilities are fully guaranteed and secured by Quebecor Printing Holding Company ("QPHC"), the DIP Borrowers and all of our material subsidiaries located in North America and
certain of our material subsidiaries located in Latin America (QPHC, the DIP Borrowers and all such material subsidiaries being collectively referred to as the "DIP Loan Parties" for the purposes of
this Item).

The
DIP Credit Agreement contains restrictive covenants and financial ratios as well as events of default that are customary for a debtor-in-possession credit
agreement, including the non-payment of principal, interest or other amounts owing thereunder, the making by the DIP Loan Parties of any materially incorrect or misleading representation
or warranty, the breach by a DIP Loan Party of any other term, covenant or agreement contained in the DIP Credit Agreement, a default by a DIP Loan Party in respect of any other indebtedness of at
least US$10 million, the rendering of a final judgment or order against a DIP Loan Party in excess of US$10 million, the invalidity or unenforceability of any provision of any document
relating to the DIP Credit Agreement, certain defaults under theEmployee Retirement Income Security Act of 1974(ERISA) of the United States of
America, certain defaults relating to the Chapter 11 or the CCAA proceedings, a change of control of either of the DIP Borrowers, the bankruptcy of any DIP Loan Party (other than the DIP
Borrowers and the other entities that have filed for protection under Chapter 11 or the CCAA) and the existence of certain claims against the DIP Loan Parties that rank prior to or pari passuwith the liens securing the DIP Credit Agreement.

Amended and Restated Credit Agreement dated as of December 15, 2005, as amended

The credit agreement of Quebecor World and Quebecor World (USA) (referred to collectively as the "Borrowers" for the purposes of this
Item), as amended, provides for US$750 million revolving

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credit
facilities that mature in January 2009. Such credit facilities contain certain restrictive covenants and financial ratios as well as customary events of default, including the
non-payment of principal, interest, fees or other amounts owing thereunder, the making by the Borrowers or by certain direct and indirect subsidiaries of Quebecor World (USA),
(collectively the "Loan Parties" for the purposes of this Item) of any materially incorrect or misleading representation or warranty, the breach
by a Borrower of any other term, covenant, condition or agreement contained in the credit agreement, the bankruptcy of a Borrower or any Restricted Entity (as such term is defined in the credit
agreement), certain defaults under theEmployeeRetirement IncomeSecurityAct of1974 (ERISA) of the United States of America, the
rendering of a final judgment or order
against a Borrower or any Restricted Entity in excess of US$25 million, the invalidity or unenforceability of any material provision of the documents relating to the credit facilities, a
default by a Loan Party or any Restricted Entity in respect of any indebtedness in excess of US$25 million, the failure by a Borrower, any Restricted Entity or their affiliates to obtain or
maintain environmental permits necessary for the operation of their business and the occurrence of any event or circumstance which has a material adverse effect on Quebecor World or any Restricted
Entity or a material impairment in the ability of a Borrower to perform its obligations under the documents relating to the credit facilities or in the validity or enforceability of
such documents.

In
light of the continuing Insolvency Proceedings, these prepetition revolving credit facilities are no longer a relevant source of financing for the Corporation, although we and certain
of our subsidiaries remain debtors thereunder.

Share Purchase Agreement relating to the sale and purchase of the shares of Quebecor World European Holding S.A. dated May 29, 2008

Reference is made to "Item 4A.Information on the CorporationHistory and Development of the
Corporation," for a description of this agreement, which is filed as Exhibit 4.9 to this annual report.

DExchange Controls

There are currently no laws, decrees, regulations or other legislation in Canada that restricts the export or import of capital, or
affects the remittance of dividends, interest or other payments to non-resident holders of our securities, other than withholding tax requirements.

There
is no limitation imposed by Canadian law or by the Articles, bylaws or our other charter documents on the right of a non-resident to hold our Subordinate Voting Shares,
other than as provided by the Investment Act, as amended by theNorth American Free Trade Agreement Implementation Act(Canada), and the World Trade Organization (WTO) Agreement
Implementation Act. The Investment Act requires notification and, in certain cases, advance review and approval
by the Government of Canada of the acquisition by a "non-Canadian" of "control of a Canadian business", all as defined in the Investment Act. Generally, the threshold for review will be
higher in monetary terms for a member of the WTO or NAFTA. See "Item 10B.Additional InformationMemorandum and Articles of AssociationLimitations on Right
to Own Securities."

ETaxation

THE FOLLOWING SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO
ANY PARTICULAR HOLDER. CONSEQUENTLY, HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS FOR ADVICE AS TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE SUBORDINATE VOTING SHARES HAVING REGARD TO THEIR
PARTICULAR CIRCUMSTANCES.

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Certain Canadian Federal Income Tax Considerations

The following summary describes the principal Canadian federal income tax consequences to a purchaser who acquires Subordinate Voting
Shares (a "holder") who, for the purposes of the Canadian federalIncome Tax Act, R.S.C. 1985, as amended
(The "Tax Act"), deals at arm's length with, and is not affiliated with, the Corporation and holds Subordinate Voting Shares as capital property. The Subordinate Voting Shares will
generally be considered to be capital property for this purpose unless either the holder holds such Subordinate Voting Shares in the course of carrying on a business, or the holder has held or
acquired such Subordinate Voting Shares in a transaction or transactions considered to be an adventure in the nature of trade.

This
summary is not applicable to a holder an interest in which is a "tax shelter investment" as defined in the Tax Act, or to a holder which is a "financial institution" as
defined in the Tax Act subject to the "mark-to-market" rules set out therein. Such holders should consult their own tax advisors.

This
summary is based upon the current provisions of the Tax Act and the regulations thereunder and the Corporation's understanding of the current published administrative
practices and policies of the
Canada Revenue Agency ("CRA"). It also takes into account all proposed amendments to the Tax Act and the regulations publicly released by the Minister of Finance (Canada)
("Tax Proposals"), and assumes that all such Tax Proposals will be enacted as currently proposed. No assurance can be given that the Tax Proposals will be enacted in the form proposed or at
all. This summary does not otherwise take into account or anticipate any changes in law, whether by way of legislative, judicial or administrative action or interpretation, nor does it address any
provincial, territorial or foreign tax considerations.

Holders Not Resident in Canada

The following discussion applies to a holder of Subordinate Voting Shares who, at all relevant times, for purposes of the
Tax Act and any applicable income tax treaty or convention, is neither resident nor deemed to be resident in Canada and does not, and is not deemed to, use or hold Subordinate Voting Shares, in
carrying on a business or part of a business in Canada (a "Non-Resident holder"). In addition, this discussion does not apply to an insurer who carries on an insurance business in
Canada and elsewhere or to an authorized foreign bank (as defined in the Tax Act).

Disposition of Subordinate Voting Shares

A Non-Resident holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such
Non-Resident holder on a disposition of Subordinate Voting Shares unless the Subordinate Voting Shares constitute "taxable Canadian property" (as defined in the Tax Act) of
the Non-Resident holder at the time of disposition and the holder is not entitled to relief under the applicable income tax treaty or convention. As long as the Subordinate Voting Shares
are then listed on a "designated stock exchange" (which currently includes the TSX), the Subordinate Voting Shares generally will not constitute taxable Canadian property of a Non-Resident
holder, unless at any time during the 60-month period immediately preceding the disposition, the Non-Resident holder, persons with whom the Non-Resident holder did
not deal at arm's length, or the Non-Resident holder together with all such persons, owned 25% or more of the issued shares of any class or series of shares of the capital stock of the
Corporation. If the Subordinate Voting Shares were to cease being listed on the TSX or another "recognized stock exchange", a Non-Resident holder who disposes of Subordinate Voting Shares
that are taxable Canadian property may not be required to fulfill the requirements of section 116 of the Tax Act. An exemption from such requirements is available on the disposition of
treaty-protected property, which is property any income or gain on the disposition of which is exempt from tax under Part I of the Tax Act as a result of an applicable income tax treaty
or convention.

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Taxation of Dividends on Subordinate Voting Shares

Dividends paid or credited or deemed to be paid or credited on the Subordinate Voting Shares to a Non-Resident holder will
be subject to a Canadian withholding tax in the amount of 25%. Such withholding tax may be reduced by virtue of the provisions of an income tax treaty or convention between Canada and the country of
which the Non-Resident holder is a resident. Under the Canada-United States Income Tax Convention, the rate of withholding tax in respect of dividends or deemed dividends
beneficially owned by a resident of the United States is generally reduced to 15%.

Holders Resident in Canada

The following discussion applies to a holder of Subordinate Voting Shares who, at all relevant times, for purposes of the
Tax Act and any applicable income tax treaty or convention, is resident in Canada (a "Canadian holder"). Certain Canadian holders whose Subordinate Voting Shares might not otherwise
qualify as capital property may, in certain circumstances, treat the Subordinate Voting Shares and other "Canadian securities" as defined in the Tax Act, as capital property by making an
irrevocable election provided by subsection 39(4) of the Tax Act.

Taxation of Dividends on Subordinate Voting Shares

Dividends received or deemed to be received on the Subordinate Voting Shares will be included in a Canadian holder's income for
purposes of the Tax Act. Such dividends received or deemed to be received by a Canadian holder that is an individual (other than certain trusts) will be subject to the gross-up and
dividend tax credit rules generally applicable under the Tax Act in respect of dividends received on shares of taxable Canadian corporations. Generally, a dividend will be eligible to the
enhanced gross-up and dividend tax credit if the recipient receives written notice from the corporation designating the dividend as an "eligible dividend" (within the meaning of the
Tax Act). There may be limitations on the ability of the Corporation to designate dividends as eligible dividends. A Canadian holder that is a corporation will include such dividends in
computing its income and will generally be entitled to deduct the amount of such dividends in computing its taxable income. A Canadian holder that is a "private corporation" or a "subject corporation"
(as such terms are defined in the Tax Act), may be liable under Part IV of the Tax Act to pay a refundable tax of 331/3% on dividends received or deemed to
be received on the Subordinate Voting Shares to the extent such dividends are deductible in computing the holder's taxable income.

Disposition of Subordinate Voting Shares

A disposition, or a deemed disposition, of a Subordinate Voting Share by a Canadian holder will generally give rise to a capital gain
(or a capital loss) equal to the amount by which the proceeds of disposition of the share, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of
the share to the holder. Such capital gain (or capital loss) will be subject to the treatment described below under "Taxation of Capital Gains and Capital Losses."

Additional Refundable Tax

A Canadian holder that is a "Canadian-controlled private corporation" (as such term is defined in the Tax Act) may be
liable to pay an additional refundable tax of 62/3% on certain investment income including amounts in respect of "Taxable Capital Gains", as defined below.

Taxation of Capital Gains and Capital Losses

In general, one half of any capital gain (a "Taxable Capital Gain") realized by a Canadian holder in a taxation year will be
included in the holder's income in the year. Subject to and in accordance with the provisions of the Tax Act, one half of any capital loss (an "Allowable Capital Loss") realized by a

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Canadian
holder in a taxation year must be deducted from Taxable Capital Gains realized by the holder in the year and Allowable Capital Losses in excess of Taxable Capital Gains may be carried back
and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years. The amount of any
capital loss realized by a Canadian holder that is a corporation on the disposition of a Subordinate
Voting Share may be reduced by the amount of dividends received or deemed to be received by it on such Subordinate Voting Share (or on a share for which the Subordinate Voting Share has been
substituted) to the extent and under the circumstances prescribed by the Tax Act. Similar rules may apply where a corporation is a member of a partnership or a beneficiary of a trust that owns
Subordinate Voting Shares, directly or indirectly, through a partnership or a trust. A Taxable Capital Gain realized by a Canadian holder who is an individual may give rise to liability for
alternative minimum tax.

Certain U.S. Federal Income Tax Considerations

The following discussion is a summary of certain U.S. federal income tax consequences applicable to the ownership and
disposition of Subordinate Voting Shares ("Shares") by a U.S. Holder (as defined below), but does not purport to be a complete analysis of all potential U.S. federal income tax
effects. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), U.S. Treasury regulations promulgated thereunder, Internal Revenue Service ("IRS") rulings
and judicial decisions in effect on the date hereof. All of these are subject to change or differing interpretations at any time, which change or interpretation may apply retroactively and could
affect the continued validity of this summary.

This
summary does not address all aspects of U.S. federal income taxation that may be relevant to particular U.S. Holders in light of their specific circumstances
(for example, U.S. Holders subject to the alternative minimum tax provisions of the Code) or to holders that may be subject to special rules under U.S. federal income tax law.
This summary also does not discuss any aspect of state, local or non-U.S. law, or U.S. federal estate or gift tax law as applicable to U.S. Holders. In addition, this
discussion is limited to U.S. Holders holding Shares as capital assets. U.S. Holders should consult their own tax advisors as to the U.S. federal income tax consequences of the
ownership and disposition of Shares, and the possible application of state, local, non-U.S. or other tax laws.

For
purposes of this summary, "U.S. Holder" means a beneficial holder of Shares who or that for U.S. federal income tax purposes is:



If
a partnership or other entity or arrangement classified as a partnership for U.S. federal income tax purposes holds Shares, the U.S. federal income tax treatment of a
partner generally will depend on the status of the partner and the activities of the partnership.

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Dividends

Subject to the passive foreign investment company ("PFIC") rules discussed below, distributions, if any, paid by the Corporation out of
current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), before reduction for any Canadian withholding tax paid with respect thereto, will
generally be taxable to a U.S. Holder as foreign source dividend income, and will not be eligible for the dividends received deduction generally allowed to corporations. Distributions in excess
of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder's adjusted tax basis in the Shares and thereafter
as capital gain. However, the Corporation does not maintain calculations of its earnings and profits in accordance with U.S. federal income tax accounting principles. U.S. Holders should
therefore assume that any distribution by the Corporation with respect to Shares will constitute ordinary dividend income.

For
taxable years beginning before January 1, 2011, dividends paid by the Corporation should be taxable to a non-corporate U.S. Holder at the special reduced
rate normally applicable to long-term capital gains, provided that certain conditions are satisfied. A U.S. Holder will not be able to claim the reduced rate for any year in which
the Corporation is treated as a PFIC. See "Passive Foreign Investment Company Considerations" below.

Under
current law, payments of dividends by the Corporation to non-Canadian investors are generally subject to a 25 percent Canadian withholding tax. The rate of
withholding tax applicable to U.S. Holders that are eligible for benefits under the Canada-United States Tax Convention (1980) ("the Treaty") is reduced to a maximum of
15 percent.

Dividends
paid in Canadian dollars will be included in income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the dividends are received
by the U.S. Holder, regardless of whether the Canadian dollars are converted into U.S. dollars at that time. If dividends received in Canadian dollars are converted into
U.S. dollars on the day they are received, the U.S. Holder generally will not be required to recognise foreign currency gain or loss in respect of the dividend income.

A
U.S. Holder will generally be entitled, subject to certain limitations, to a credit against its U.S. federal income tax liability, or a deduction in computing its
U.S. federal taxable income, for Canadian income taxes withheld by the Corporation.

Sale or Other Taxable Disposition

Subject to the PFIC rules discussed below, upon a sale or other taxable disposition of Shares, a U.S. Holder generally will
recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount realized on the sale or other taxable disposition and the
U.S. Holder's adjusted tax basis in the Shares.

This
capital gain or loss will be long-term capital gain or loss if the U.S. Holder's holding period in the Shares exceeds one year. Long-term capital
gains of non-corporate U.S. Holders are currently eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any gain or loss will
generally be U.S. source for U.S. foreign tax credit purposes.

Passive Foreign Investment Company Considerations

A non-U.S. corporation will be classified as a PFIC for any taxable year in which, after taking into account the
income and assets of the corporation and certain subsidiaries pursuant to applicable "look-through rules," either (i) at least 75 percent of
its gross income is "passive income" or (ii) at least 50 percent of the average value of its assets is attributable to assets which produce passive income or are held for the production
of passive income.

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If
the Corporation is classified as a PFIC for any taxable year during which a U.S. Holder owns Shares, the U.S. Holder, absent certain elections (including a
mark-to-market election), will generally be subject to adverse rules (regardless of whether the Corporation continues to be classified as a PFIC) with respect to (i) any
"excess distributions" (generally, any distributions received by the U.S. Holder on Shares in a taxable year that are greater than 125 percent of the average annual distributions
received by the U.S. Holder in the three preceding taxable years or, if shorter, the U.S. Holder's holding period for the Shares) and (ii) any gain realized on the sale or other
disposition of Shares.

Under
these adverse rules (i) the excess distribution or gain will be allocated rateably over the U.S. Holder's holding period, (ii) the amount allocated to the
current taxable year and any taxable year prior to the first taxable year in which the Corporation is classified as a PFIC will be taxed as ordinary income, and (iii) the amount allocated to
each of the other taxable years during which the Corporation was classified as a PFIC will be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year and
an interest charge will be imposed with respect to the resulting tax attributable to each such other taxable year.

The
Corporation believes it was not a PFIC for the 2008 taxable year. However, since the fair market value of the Corporation's assets may be determined in large part by the market price
of the Shares, which is likely to fluctuate, and the composition of the Corporation's income and assets will be affected by how, and how quickly, the Corporation spends any cash that is raised in any
financing transaction, no assurance can be provided that the Corporation would not be classified as a PFIC for the 2008 taxable year and for any future taxable year.

Information Reporting and Backup Tax Withholding

The proceeds of a sale or other disposition, as well as dividends paid with respect to Shares by a U.S. payor, generally will be
reported to the IRS and to the U.S. Holder as required under applicable regulations. Backup tax withholding may apply to these payments if the U.S. Holder fails to timely provide an
accurate taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup tax withholding requirements. Certain U.S. Holders (including, among
others, corporations) are not subject to the information reporting or
backup tax withholding requirements described herein. Backup tax withholding is not an additional tax and may be refunded (or credited against the U.S. Holder's U.S. federal
income tax liability, if any), provided that certain required information is furnished to the IRS. The information reporting requirements may apply regardless of whether withholding
is required.

FDividends And Paying Agents

Not applicable.

GStatement By Experts

Not applicable.

HDocuments on Display

We file periodic reports and other information with the SEC. These reports include certain financial and statistical information about
us and may be accompanied by exhibits. You may read and copy this information at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549,
or obtain copies of this information by mail from the public reference room at the prescribed rates. You may call the SEC at 1-800-SEC-0330 for
further information on the SEC's Public Reference Room. The SEC also maintains an Internet website that contains reports and other information about issuers like us who file electronically with the
SEC. The URL of that website is

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http://www.sec.gov.
Any documents referred to in this annual report may also be inspected at our offices at 999 de Maisonneuve Boulevard West, Suite 1100, Montreal, Quebec, Canada,
H3A 3L4.

ISubsidiary Information

Our significant subsidiaries are discussed under "Item 4. Information on the CorporationOrganizational Structure."

ITEM 11QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Qualitative Information

As described in Note 1 to our audited consolidated financial statements for the financial year ended December 31,
2008 included elsewhere in this annual report, we obtained an Initial Order from the Court granting creditor protection. Subsequent to the Insolvency Proceedings and under provisions of the signed
International Swap and Derivatives Association ("ISDA") agreements, the counterparties to our derivative financial instruments exercised their contractual right to terminate substantially all of the
foreign exchange forward contracts; interest rate swap and commodity swap agreements in place on that date. We have since entered into commodity swap and foreign exchange forward contract agreements
in an effort to manage risks.

The
effective management of the risks arising from financial instruments described below portrays the strategy in place prior to the Insolvency Proceedings. Where such risk management
procedures were in place as at December 31, 2008, they are identified below as such.

Interest rate risk

We
are exposed to interest rate fluctuations as a result of our long-term debt, including the DIP financing. As at December 31, 2008, the
floating rate
portion of our long-term debt represented approximately 48% of the total debt, including debt subject to compromise.

Prior
to the Insolvency Proceedings, we managed our interest rate risk by having a balanced schedule of debt maturities, as well as a combination of fixed and floating interest rate
obligations. In addition, we entered into interest rate swaps to manage our exposure to fluctuations in interest rates on our long-term debt; however, all derivative contracts were
terminated in the first quarter of 2008 as a direct result of the Insolvency Proceedings.

Foreign exchange risk

Quebecor
World has operations in Canada, the United States and Latin America and, as such, we have foreign denominated sales and related receivables,
payables, equipment purchases, debt and other assets and liabilities. A change in the currency exchange rate between the Canadian and the US dollar could have material effect on our consolidated
results of operations, financial position or cash flow.

We
mitigate our foreign exchange risk by entering into foreign exchange forward contracts.

Commodity risk

We
are exposed to natural gas prices fluctuations. We manage a portion of our North American natural gas exposure through commodity swap agreements.

We
are also exposed to paper and ink prices fluctuations. To reduce this risk, the contracts with our largest customers generally include price adjustment clauses based on the costs of
paper and ink.

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Quantitative Information

Interest rate risk

Assuming
all other variables remain constant, a 100 base points increase on all the interest rates during 2008 would have had an unfavorable impact of
$9 million on net income and other comprehensive income, while a 100 base points decrease in interest would have resulted in an equally favorable impact on net income, with no impact
from derivative instruments.

Foreign exchange risk

With
regard to U.S. dollar denominated monetary balances, and assuming all other variables remain constant, a 5% strengthening of the US dollar over the
Canadian dollar on the U.S. denominated monetary balances would have resulted in a net unfavorable impact of $27.7 million on net income (loss), while a 5% decrease would have resulted
in an equally favorable impact on net income (loss).

Commodity risk

With
regard to commodity swap agreements in place, and assuming all other variables remain constant, a $1 increase or decrease in the price of natural gas
would have had no material impact on net income (loss) and other comprehensive income (loss).

ITEM 12DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

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PART II

ITEM 13DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

On December 31, 2007, we obtained a temporary waiver from our bank syndicate lenders and from the sponsors of our North American
securitization program from compliance with certain financial ratios and covenants, subject to the satisfaction of certain conditions and refinancing milestones, including us obtaining
US$125 million in new financing by January 15, 2008. On January 16, 2008, we failed to satisfy the conditions and refinancing milestones set by the bank syndicate lenders, which
resulted in the Corporation and certain of our subsidiaries being in default of our obligations under our revolving bank facility, our equipment financing credit facility and our North American
securitization program (see Note 1 to our audited consolidated financial statements for the financial year ended December 31, 2008 presented in
"Item 17.Financial Statements").

As
a result of our unsuccessful efforts to obtain new financing, the inability at the time to conclude the proposed sale of our European operations and our operational demands, by
mid-January 2008, we were experiencing a severe lack of liquidity and concluded we no longer had the ability to meet obligations which were falling due.

On
January 21, 2008, we obtained the Initial Order from the Court granting creditor protection under the CCAA for the Applicants and, on the same date, the
U.S. Subsidiaries filed a petition under Chapter 11 in the U.S. Bankruptcy Court. Quebecor World and the other Applicants remain subject to the Insolvency Proceedings as of the
date of this annual report. The filing for creditor protection by the Applicants in the Insolvency Proceedings caused us and certain of our subsidiaries to be in default of substantially all of our
outstanding debt instruments, obligations, agreements and securities.

The
table below summarizes the amount of the default and interest arrearage, as of February 28, 2009, under each of our material debt instruments, obligations, agreements
and securities:

Description of debt instrument, obligation,
agreement or security

Principal Amount in Default

Amount of Interest in ArrearsSyndicated bank credit facility (prepetition)


US$711,029,606


US$81,253,694Equipment financing credit facility


US$121,772,153


US$7,020,4324.875% Senior Notes due November 15, 2008


US$200,000,000


US$12,824,7226.125% Senior Notes due November 15, 2013


US$400,000,000


US$32,412,1598.75% Senior Notes due March 15, 2016


US$450,000,000


US$59,854,8109.75% Senior Notes due January 15, 2015


US$400,000,000


US$66,771,5546.50% Senior Notes due 2027


US$3,213,000


US$340,990Total:


US$2,286,014,759


US$260,478,361


We
also have outstanding 12,000,000 Series 3 Preferred Shares and 1,440,064 Series 5 Preferred Shares. On November 26, 2007, our Board of Directors
suspended all dividend payments on our outstanding Preferred Shares. As of February 28, 2009, an aggregate of CA$27,727,000 in accrued dividends was unpaid on our Series 3 Preferred
Shares and an aggregate of CA$4,389,000 in accrued dividends was unpaid on our Series 5 Preferred Shares.

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ITEM 14MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Material Modifications to the Rights of Security Holders

There have been no material modifications to the rights of security holders.

Use of Proceeds

Not applicable.

ITEM 15CONTROLS AND PROCEDURES

Overview

There were a number of significant events that occurred during the year ended December 31, 2007, including the proposed sale and
merger of European operations, as well as various financing activities and bankruptcy protection measures, which were undertaken during the preparation of the 2007 year-end
financial statements.

These
significant events were carried forward in the current year, as the sale and merger of European operations was completed in June 2008 and the requirements of the bankruptcy
protection measures became more demanding with the claims process and other Insolvency Proceedings-related activities, e.g. the preparation of business plans and due diligence for creditors.
Combined with the recent global economic weakness, this served to create an environment of substantial work overload and time constraint, which led to changes in and lack of sufficient personnel.
While in 2008 we implemented several remediation actions that we believe materially improved our internal control over financial reporting as discussed below, in the aggregate, these factors continued
to impact the operating effectiveness of our internal control over financial reporting.

Notwithstanding
these significant events described above, management has concluded that the consolidated financial statements included in this annual report fairly present the
consolidated financial position and consolidated results of operations of Quebecor World as of and for the year ended December 31, 2008. Our independent registered public accounting firm has
issued an unqualified audit report on these consolidated financial statements that are included elsewhere in this annual report.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to provide reasonable assurance that the
information required to be disclosed in reports filed or submitted under the Canadian and US securities rules and forms, is (1) recorded, processed, summarized and reported within the time
periods specified in the Canadian and US securities laws and (2) accumulated and communicated to management, including the President and Chief Executive Officer and the Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.

Members
of management, at the direction (and with the participation) of the President and Chief Executive Officer and the Chief Financial Officer, performed an evaluation of the
effectiveness of the design and operation of the disclosure controls and procedures (as defined in Rule 13a-15(e) under the US Securities Exchange Act of 1934 and in National
Instrument 52-109 adopted by the Canadian Securities Administrators), as of December 31, 2008. Based on that evaluation, the President and Chief Executive Officer and
the Chief Financial Officer concluded that, because of the material weakness in our internal control over financial reporting discussed below, disclosure controls and procedures were not effective as
of December 31, 2008.

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Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in
Rule 13a-15(f) under the US Securities Exchange Act of 1934.

The
Corporation's internal control over financial reporting is designed to provide reasonable assurance as to the reliability of our financial reporting and the preparation of financial
statements in accordance with Canadian GAAP and reconciled to US GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Moreover,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

As
of December 31, 2008, management conducted an evaluation of the effectiveness of the internal control over financial reporting based upon the framework in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. During this process, management identified a material weakness in internal
control over financial reporting as described below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of a company's annual financial statements will not be prevented or detected on a timely basis.

Given
the circumstances and events faced by Quebecor World, we did not maintain effective processes and controls over the accounting for and reporting of complex and
non-routine transactions. Specifically, we determined that there was a lack of sufficient accounting and finance personnel to perform in-depth analysis and review of complex
accounting matters within the timeframes set by us for filing our consolidated financial statements. This deficiency resulted in certain adjustments to the amounts or disclosures of the following
items: inventories, claims and liabilities subject to compromise, financial instruments, pension expense and income taxes. Because of this deficiency, which is pervasive in nature, there is a
reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

Because
of the material weakness described above, management concluded that the system of internal control over financial reporting is not effective as of December 31, 2008.
Notwithstanding the above-mentioned weakness, management has concluded that the consolidated financial statements included in this annual report fairly present our consolidated financial position and
consolidated results of our operations, as of and for the year ending December 31, 2008.

Our
independent registered public accounting firm that audited the financial statements included in this annual report on Form 20-F, has issued an attestation report
expressing an adverse opinion on the effectiveness of internal control over financial reporting as at December 31, 2008, which report is included on page F-5 of the consolidated
financial statements as at and for the year ended December 31, 2008 included elsewhere in this annual report.

Changes in Internal Control over Financial Reporting

During the year, particularly in the fourth quarter, we implemented several remediation actions that we believe materially improved our
internal control over financial reporting. These changes, which are related to remedial actions that addressed the three material weaknesses previously reported in our annual report on
Form 40-F for the year ended December 31, 2007, are as follows:



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Remediation Plans

In response to the material weakness identified above for the year ended December 31, 2008 and in addition to the changes in
internal control over financial reporting described above, we will continue remediation efforts to address the material weakness, by taking the following actions:



ITEM 16[RESERVED]

ITEM 16AAUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Mr. Alain Rhéaume is an "audit committee financial expert"
(as defined in Item 16A of Form 20-F) serving on our Audit Committee. Our Board of Directors has determined that Mr. Rhéaume is an "independent"
director as defined under the independence standards of the New York Stock Exchange.

ITEM 16BCODE OF ETHICS

We have adopted a Code of Business Conduct, which is a code of ethics as defined in Item 16B of Form 20-F,
which governs the behavior of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons
performing similar functions. The code is given to all the employees of the Corporation and its

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subsidiaries.
Upon being hired, all employees must sign a declaration confirming that they have read the code and undertaking to comply therewith.

The
code provides that concerns of employees regarding any potential or real wrongdoing in terms of accounting or auditing matters may be submitted confidentially through an ethics line
or other internal mechanism. The Senior Director, Internal Audit provides reports, on a regular basis, to the Audit Committee on departures from the code that have been brought to his attention
through the whistleblower program (i.e. the confidential ethics line and secured website that is operated by an independent third party) or through such other internal mechanisms described in
the code and the steps taken by the Corporation to deal with the non-compliance issues. The Chairman of the Audit Committee informs the Board thereof at each regular meeting of the Board.
In addition, an annual attestation process exists to ensure that management throughout the organization respects the code.

In
March 2009, our Board of Directors adopted a Specific Code of Ethics Governing Financial Officers (the "Specific Code of Ethics"), which applies to the principal
executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Specific Code of Ethics supplements, but does not replace, the
Code of Business Conduct by emphasizing
certain standards applicable to financial officers, particularly with respect to the integrity of the Corporation's financial documents. Violations of the Specific Code of Ethics may be reported
either through the whistleblowing service or up the hierarchy of authority to the Chief Financial Officer, who would then be required to report all such violations to the Audit Committee.

Also,
complaints about accounting, internal accounting controls or auditing matters can be confidentially submitted to the Corporation.

Copies
of both the Code of Business Conduct and the Specific Code of Ethics are available on the Corporation's web site at www.quebecorworld.com under the "Investors" Tab. Paper copies
are also available without charge upon request from the Corporate Secretary of the Corporation.

ITEM 16CPRINCIPAL ACCOUNTANT FEES AND SERVICES

KPMG LLP served as our independent registered public accounting firm for the fiscal years ended December 31, 2008, 2007
and 2006. The audited financial statements for each of the fiscal years in the three-year period ended December 31, 2008 are included in this annual report on
Form 20-F.

In
addition to performing the audit of our consolidated financial statements, KPMG LLP provided us with other services and they billed us the following fees for each of our two
most recently completed financial years as summarized in the following table:

FEES

FINANCIAL YEAR ENDED
DECEMBER 31, 2008

FINANCIAL YEAR ENDED
DECEMBER 31, 2007Audit Fees(1)


US$6,930,000


US$7,637,000Audit-Related Fees(2)


US$1,418,000


US$2,176,000Tax Fees(3)


US$2,483,000


US$2,125,000All other Fees(4)


US$161,000


US$278,000TOTAL FEES:


US$10,992,000


US$12,216,000


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Pre-approval Policies and Procedures

The Mandate of the Audit Committee provides that it is such Committee's responsibility to:



The
Audit Committee has established a list of non-audit services that are deemed inconsistent with the independence of auditors under applicable laws and regulations in
respect of which we may not engage our external auditors. The Audit Committee has also adopted an "Approval Policy for Services Provided by the External Auditor" (the "Approval Policy")
pursuant to which, subject to certain limitations, the Audit Committee may retain our external auditors for certain audit and non-audit services that have been pre-approved by
the Audit Committee (the "Pre-Approved Services"), provided, however, that the external auditors' estimated fees for the Pre-Approved Services may not exceed $250,000.
The Chairman of the Audit Committee reports to the Audit Committee, on a quarterly basis, on all projects approved under the Approval Policy. The Approval Policy and the list of
Pre-Approved Services are reviewed by the Audit Committee on an annual basis.

ITEM 16DEXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16EPURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

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ITEM 16FCHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16GCORPORATE GOVERNANCE

Not applicable.

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PART III

ITEM 17FINANCIAL STATEMENTS

Our consolidated balance sheets as at December 31, 2008 and 2007 and our consolidated statements of income (loss), comprehensive
income (loss), shareholders' equity (deficit) and cash flows for the years ended December 31, 2008, 2007 and 2006, including the notes thereto and together with the reports of the independent
registered public accounting firm thereon, appear on pages F-3 to F-6 of this annual report.

ITEM 18FINANCIAL STATEMENTS

Not applicable.

ITEM 19EXHIBITS

The following documents are filed as exhibits to this annual report on Form 20-F:

1.1

Articles of Amalgamation of the registrant dated February 23, 1989, as amended on December 7, 1990, December 14, 1990, February 24, 1992, April 10, 1992, April 25, 1994,
April 25, 1996, November 5, 1997, April 25, 2000, February 21, 2001 and August 10, 2001.1.2

Amended and Restated By-Law One adopted by the Board of Directors of the registrant on March 22, 2004 and ratified by the registrant's shareholders on May 5, 20041.3

By-Law Number 58 adopted by the Board of Directors of the registrant on April 10, 19923.1

Trust agreement dated as of March 28, 2003 among the registrant, the holders of its Multiple Voting Shares and Computershare Trust Company of Canada, as trustee4.1

Senior secured superpriority debtor-in-possession credit agreement dated as of January 21, 2008 (incorporated by reference to the registrant's current report on Form 6-K furnished to the
U.S. Securities and Exchange Commission on February 1, 2008)4.2

Amendment No.1 dated as of January 25, 2008 to the registrant's senior secured superpriority debtor-in-possession credit agreement dated as of January 21, 2008 (incorporated by
reference to the registrant's current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on April 25, 2008)4.3

Amended and Restated Amendment No. 2 dated as of February 26, 2008 to the registrant's senior secured superpriority debtor-in-possession credit agreement dated as of January 21, 2008
(incorporated by reference to the registrant's current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on April 25, 2008)4.4

Amendment No. 3 dated as of March 27, 2008 to the registrant's senior secured superpriority debtor-in-possession credit agreement dated as of January 21, 2008 (incorporated by reference
to the registrant's current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on April 25, 2008)4.5

Amendment No. 4 dated as of August 5, 2008 to the registrant's senior secured super priority debtor-in-possession credit agreement dated as of January 21, 2008 (incorporated by
reference to the registrant's current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on September 4, 2008)4.6

Amended and restated credit agreement dated as of December 15, 2005 (incorporated by reference to the registrant's current report on Form 6-K furnished to the U.S. Securities and
Exchange Commission on March 13, 2006)


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4.7

Fourth amending agreement dated as of September 28, 2007 to the registrant's amended and restated credit agreement dated as of December 15, 2005 (incorporated by reference to the registrant's
current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on October 12, 2007)4.8

Fifth amending agreement dated as of December 31, 2007 to the registrant's amended and restated credit agreement dated as of December 15, 2005 (incorporated by reference to the registrant's
current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on January 11, 2008)4.9

Share Purchase Agreement dated May 29, 2008 relating to the sale and purchase of shares of Quebecor World European Holding S.A. (incorporated by reference to the registrant's current report
on Form 6-K furnished to the U.S. Securities and Exchange Commission on June 10, 2008)4.10

Indenture dated as of November 3, 2003 among Quebecor World Capital Corporation, as issuer, the registrant, as guarantor, and Citibank, N.A., as trustee (incorporated by reference to
Exhibit 4.3 of the registrant's registration statement on Form F-9 filed with the U.S. Securities and Exchange Commission on January 12, 2004)4.11

Indenture dated as of March 6, 2006 among the registrant, as issuer, Quebecor World (USA) Inc., Quebecor World Capital LLC and Quebecor World Capital ULC, as guarantors, and
Wilmington Trust Company, as trustee (incorporated by reference to the registrant's current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on March 13, 2006)4.12

Indenture dated as of December 18, 2006 among Quebecor World Capital ULC, as issuer, the registrant, Quebecor World (USA) Inc. and Quebecor World Capital LLC, as guarantors, and
Citibank, N.A., as trustee (incorporated by reference to the registrant's current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on March 30, 2007)8.1

List of subsidiaries and jurisdictions of incorporation12.1

Certification of Jacques Mallette, President and Chief Executive Officer of the registrant, pursuant to 15 U.S.C. Section 78(m)(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.12.2

Certification of Jeremy Roberts, Chief Financial Officer of the registrant, pursuant to 15 U.S.C. Section 78(m)(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.13.1

Certification of Jacques Mallette, President and Chief Executive Officer of the registrant, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.13.2

Certification of Jeremy Roberts, Chief Financial Officer of the registrant, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.15.1

Mandate of the registrant's Audit Committee15.2

Mandate of the registrant's Board of Directors15.3

Registrant's Statement of Corporate Governance Practices15.4

Consent of Independent Registered Public Accounting Firm


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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.

QUEBECOR WORLD INC.By:

/s/ MARIE-É. CHLUMECKY Name: Marie-É. Chlumecky
Title:  Corporate Secretary


Dated:
March 27, 2009

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Quebecor World Inc.Annual Consolidated Financial Statements as at December 31, 2008 and 2007 and for the Years Ended December 31, 2008, 2007 and
2006Management's Responsibility for Financial Statements


F-2Reports of Independent Registered Public Accounting Firm


F-3Consolidated Statements of Income (Loss) for the years ended December 31, 2008, 2007 and 2006


F-7Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2008, 2007 and 2006


F-8Consolidated Statements of Shareholders' Equity (Deficit) for the years ended December 31, 2008, 2007 and 2006


F-9Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006


F-10Consolidated Balance Sheets as at December 31, 2008 and 2007


F-11Notes to Consolidated Financial Statements for the years ended December 31, 2008, 2007 and 2006


F-12


F-1

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MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of Quebecor World Inc. is responsible for the preparation, presentation and integrity of the accompanying
consolidated financial statements of Quebecor World Inc. and its subsidiaries, the Management's Discussion and Analysis (MD&A) and all other information in Quebecor World Inc.'s annual
report on Form 20-F. These financial statements have been prepared by management in conformity with Canadian generally accepted accounting principles and include amounts that are
based on best estimates and judgments. To provide reasonable assurance that relevant and reliable financial information is produced, management is responsible for the development of internal controls
over financial reporting process. Management has developed and maintained a system of internal controls and supports a program of internal audit.

The
Board of Directors (the "Board") carries out its responsibility for the financial statements principally through its Audit Committee, consisting solely of independent
directors. The Board is responsible for reviewing and approving the consolidated financial statements and the MD&A for inclusion in Quebecor World Inc.'s annual report on
Form 20-F based on the review and recommendation of the Audit Committee. The Board is also responsible for overseeing management's responsibilities for the preparation and
presentation of financial information, maintenance of appropriate internal controls and compliance with legal and regulatory requirements.

The
Audit Committee is responsible for recommending the independent auditors for appointment by the shareholders. The Audit Committee meets regularly with senior and financial
management, internal auditors and the independent auditors to discuss internal controls, auditing activities and financial reporting matters. The independent auditors and internal auditors have full
access to the Audit Committee, with and without management being present.

These
financial statements have been audited by the auditors appointed by the shareholders, KPMG LLP, chartered accountants, and their report is presented hereafter.

/s/Brian Mulroney

/s/Jacques Mallette

/s/Jeremy RobertsThe Right Honourable

Jacques Mallette

Jeremy RobertsBrian Mulroney

President and

Chief Financial OfficerChairman of the Board

Chief Executive Officer


Montreal,
Canada
March 26, 2009

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors of Quebecor World Inc.

We
have audited the accompanying consolidated balance sheets of Quebecor World Inc. (the "Corporation") and subsidiaries as of December 31, 2008 and 2007 and the
related consolidated statements of income (loss), comprehensive income (loss), shareholders' equity (deficit) and cash flows for each of the years in the three-year period ended
December 31, 2008. These consolidated financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Corporation and subsidiaries as of
December 31, 2008 and 2007 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008 in conformity with
Canadian generally accepted accounting principles.

As
discussed in Note 1, Quebecor World Inc. obtained, on January 21, 2008, an order from the Quebec Superior Court granting creditor protection under the Companies'
Creditors Arrangement Act for itself and 53 of its U.S. subsidiaries and filed under Chapter 11 of the United States Bankruptcy Code for 53 of its U.S. subsidiaries
(together the "Insolvency Proceedings"). The accompanying financial statements do not purport to reflect or provide for the consequences of the Insolvency Proceedings. In particular, such financial
statements do not purport to show (a) as to assets, their realizable value on a liquidation basis or their availability to satisfy liabilities; (b) as to shareholders' accounts, the
effect of any changes that may be made in the capitalization of the Corporation; or (c) as to operations, the effect of any changes that may ultimately be required in its business.

The
accompanying financial statements have been prepared assuming that the Corporation will continue as a going concern. As discussed in Note 1, as a result of the contributing
factors having led to the Insolvency Proceedings and the Insolvency Proceedings, realization of assets and discharge of liabilities, without substantial adjustments and/or changes in ownership, are
subject to significant uncertainty and raise substantial doubt about the Corporation's ability to continue as a going concern. Management's plan concerning these matters is also discussed in
Note 1. The financial statements do not include adjustments that might result from the outcome of this uncertainty.

Canadian
generally accepted accounting principles vary in certain significant respects from US generally accepted accounting principles. Information relating to the nature and effect of
such differences is presented in Note 30 to the consolidated financial statements.

F-3

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We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Corporation's internal control over financial
reporting as of December 31, 2008, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO), and our report dated March 26, 2009 expressed an adverse opinion on the effectiveness of the Corporation's internal control over financial reporting.

/s/
KPMG LLP(1)
Chartered Accountants
Montreal, Canada
March 26, 2009

---

F-4

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors of Quebecor World Inc.

We
have audited Quebecor World Inc.'s (the "Corporation") internal control over financial reporting as of December 31, 2008, based on the criteria established in
Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Corporation's management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying "Management's Report on
Internal Control over Financial Reporting" presented under "Item 15.Controls and Procedures" of the annual report on Form 20-F. Our responsibility is to express an opinion
on the Corporation's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
corporation's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A corporation's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the corporation; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the corporation are being made only in accordance with authorizations of management and directors of the corporation; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the corporation's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of the corporation's annual financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management's
assessment: the Corporation did not maintain effective processes and controls over accounting for and reporting of non-routine transactions and complex accounting matters. We also have
audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2008 consolidated financial statements of the Corporation. This material weakness
was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2008 consolidated financial statements, and this report does not affect our report dated
March 26, 2009, which expressed an unqualified opinion on those consolidated financial statements.

F-5

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Table of Contents

In
our opinion, because of the effect of the aforementioned material weakness on the achievement of the objectives of the control criteria, Quebecor World Inc. has not maintained
effective internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).

/s/
KPMG LLP(1)
Chartered Accountants
Montreal, Canada
March 26, 2009

---

F-6

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Table of Contents

CONSOLIDATED STATEMENTS OF INCOME (LOSS)        (Under Creditor Protection as of January 21, 2008Note 1)        Years ended December 31
(In millions of US dollars, except per share amounts)

Note

2008

2007

2006Operating revenues




$
4,016.9

$
4,654.5

$
5,060.9Operating expenses:Cost of sales





3,545.2


4,080.8


4,426.4Selling, general and administrative





351.4


390.5


345.9Loss (gain) on business disposals





(0.7
)

(1.2
)

2.2Securitization fees


11





15.1


24.6Impairment of assets, restructuring and other charges


6


242.1


223.6


66.2Goodwill impairment charge


15


341.1


1,832.9


4,479.1


6,541.7


4,865.3Operating income (loss)





(462.2
)

(1,887.2
)

195.6Financial expenses


7


409.9


178.9


114.0Dividends on preferred shares classified as liability


20


5.2


9.8


Reorganization items


3


105.9





Income (loss) from continuing operations before income taxes





(983.2
)

(2,075.9
)

81.6Income taxes


8


(39.3
)

(238.2
)

(38.0
)Income (loss) from continuing operations before minority interest





(943.9
)

(1,837.7
)

119.6Minority interest








(0.3
)

0.8Net income (loss) from continuing operations





(943.9
)

(1,837.4
)

118.8Loss from discontinued operations (net of tax)


9


(715.4
)

(363.0
)

(90.5
)Net income (loss)




$
(1,659.3
)
$
(2,200.4
)
$
28.3Net income allocated to holders of preferred shares





17.4


22.2


34.0Loss available to holders of equity shares




$
(1,676.7
)
$
(2,222.6
)
$
(5.7
)Earnings (loss) per share:


10Basic and diluted:Continuing operations




$
(5.26
)
$
(14.10
)
$
0.65Discontinued operations





(3.92
)

(2.75
)

(0.69
)$
(9.18
)
$
(16.85
)
$
(0.04
)Weighted-average number of equity shares outstanding:


10(in millions)Basic and diluted





182.6


131.9


131.4


See
accompanying Notes to Consolidated Financial Statements.

F-7

---



Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)        (Under Creditor Protection as of January 21, 2008Note 1)        Years ended
December 31  (In millions of US dollars)

Note

2008

2007

2006Net income (loss)




$
(1,659.3
)
$
(2,200.4
)
$
28.3Other comprehensive income (loss), net of income tax:


22, 23Unrealized gain (loss) on foreign currency translation adjustment





149.8


(104.8
)

17.5Portion of foreign currency translation adjustment recognized in income as a result of business disposals


9


273.7





Portion of foreign currency translation adjustment recognized in income as a result of a reduction in self-sustaining foreign operations











2.5Unrealized net gain (loss) on derivative financial instruments related to cash flow hedges





(0.1
)

10.4


Reclassification of realized net loss (gain) on derivative financial instruments to the statements of income





(7.3
)

4.8


Comprehensive income (loss)




$
(1,243.2
)
$
(2,290.0
)
$
48.3


See
accompanying Notes to Consolidated Financial Statements.

F-8

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Table of Contents

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)        (Under Creditor Protection as of January 21, 2008Note 1)        Years ended
December 31  (In millions of US dollars)

Note

Capital
stock
(Note 20)

Contributed
surplus

Retained
earnings
(deficit)

Accumulated
other
comprehensive
income (loss)

Total
shareholders'
equity
(deficit)Balance, December 31, 2005




$
1,444.5

$
110.6

$
443.8

$
(102.6
)
$
1,896.3Net income











28.3





28.3Other comprehensive income, net of income taxes


22











20.0


20.0Equity shares issued from stock plans


20


7.9











7.9Related party transactions


12





(1.0
)







(1.0
)Stock-based compensation


21





4.5








4.5Dividends on equity shares











(39.8
)




(39.8
)Dividends on preferred shares











(34.0
)




(34.0
)Balance, December 31, 2006




$
1,452.4

$
114.1

$
398.3

$
(82.6
)
$
1,882.2Net loss











(2,200.4
)




(2,200.4
)Cumulative effect of change in accounting policyFinancial instruments











(4.9
)

(7.0
)

(11.9
)Other comprehensive income (loss), net of income taxes


22











(89.6
)

(89.6
)Equity shares issued from stock plans


20


5.0











5.0Related party transactions


12





0.4








0.4Stock-based compensation


21





3.5








3.5Redemption of convertible notes


26





(15.9
)

15.9





Dividends on preferred shares











(22.2
)




(22.2
)Balance, December 31, 2007




$
1,457.4

$
102.1

$
(1,813.3
)
$
(179.2
)
$
(433.0
)Net loss











(1,659.3
)




(1,659.3
)Cumulative effect of change in accounting policyInventories


2








(17.4
)




(17.4
)Other comprehensive income, net of income taxes


22











416.1


416.1Preferred shares conversion


20


137.8











137.8Stock-based compensation


21





1.1








1.1Balance, December 31, 2008




$
1,595.2

$
103.2

$
(3,490.0
)
$
236.9

$
(1,554.7
)


See
accompanying Notes to Consolidated Financial Statements.

F-9

---



Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS        (Under Creditor Protection as of January 21, 2008Note 1)        Years ended December 31
(In millions of US dollars)

Note

2008

2007

2006Cash flows from operating activities:Net income (loss)




$
(1,659.3
)
$
(2,200.4
)
$
28.3Adjustments for:Reorganization items


3


39.3





Depreciation of property, plant and equipment





261.7


311.4


308.4Impairment of assets and non-cash portion of restructuring and other charges


6, 9


185.9


276.9


34.9Goodwill impairment charge


15


341.1


1,998.9


Future income taxes


8


(59.8
)

(255.8
)

2.2Amortization and write down of other assets





18.8


60.4


30.0Amortization of financing costs





56.6


6.6


2.9Loss on business disposals and other


9


684.6


11.5


3.8Unrealized foreign exchange on long term debt





99.7


(15.6
)

Other





(4.8
)

20.0


5.0Net changes in non-cash balances related to operations:Accounts receivable





126.2


(181.7
)

(38.6
)Inventories





34.0


1.8


5.6Trade payables and accrued liabilities





(388.1
)

65.7


10.9Trade payables and accrued liabilities subject to compromise


4


526.1





Other current assets and liabilities





(10.1
)

41.9


(76.3
)Other non-current assets and liabilities





(162.3
)

(73.6
)

(81.1
)125.8


(145.9
)

(179.5
)Cash flows provided by operating activities





89.6


68.0


236.0Cash flows from financing activities:Net change in bank indebtedness


17


(70.6
)

18.1


Issuance of long-term debt, net of issuance costs


18


6.0


67.0


950.1Issuance of DIP Term Loan, net of issuance costs


18


556.5





Repayments of long-term debt


18


(21.3
)

(332.3
)

(459.3
)Repayments of DIP Term Loan


18


(74.5
)




Redemption of convertible notes


26





(119.5
)

Net borrowings (repayments) under revolving bank facility





77.0


577.9


(239.2
)Net borrowings under revolving DIP Facility





51.9





Net change in secured financing


11


48.6


83.9


Repayment of North American securitization program subsequent to Insolvency Proceedings


1


(413.0
)




Net proceeds from issuance of equity shares


21





5.0


7.9Redemption of preferred shares


21








(175.9
)Dividends on equity shares











(39.8
)Dividends on preferred shares








(17.6
)

(43.1
)Cash flows provided by financing activities





160.6


282.5


0.7Cash flows from investing activities:Business acquisitions, net of cash and cash equivalents








(3.5
)

(0.1
)Net proceeds from business disposals, net of cash and cash equivalents


9


43.5





28.5Additions to property, plant and equipment





(108.7
)

(321.0
)

(313.8
)Net proceeds from disposal of assets





25.4


101.4


82.5Restricted cash


16


(2.5
)

(6.8
)

(15.0
)Restricted cash related to Insolvency Proceedings


16


(43.9
)




Cash flows used in investing activities





(86.2
)

(229.9
)

(217.9
)Effect of foreign currency





(16.4
)

(77.3
)

(19.3
)Net changes in cash and cash equivalents





147.6


43.3


(0.5
)Cash and cash equivalents, beginning of year


26


61.1


17.8


18.3Cash and cash equivalents, end of year


26

$
208.7

$
61.1

$
17.8


Supplementary cash flow information in Note 26.

See
accompanying Notes to Consolidated Financial Statements.

F-10

---





Table of Contents

CONSOLIDATED BALANCE SHEETS        (Under Creditor Protection as of January 21, 2008Note 1)        At December 31  (In millions of US
dollars)

Note

2008

2007AssetsCurrent assets:Cash and cash equivalents


26

$
208.7

$
61.1Accounts receivable


11, 24


694.0


1,030.8Inventories


13


233.9


368.1Income taxes receivable





31.0


15.7Future income taxes


8


13.9


28.6Prepaid expenses and deposits





40.9


18.5Total current assets





1,222.4


1,522.8Property, plant and equipment


14


1,161.0


2,009.0Goodwill


15





342.3Restricted cash


16


96.9


54.9Future income taxes


8


5.8


11.2Other assets


19


334.3


222.8Total assets




$
2,820.4

$
4,163.0Liabilities and Shareholders' DeficitCurrent liabilities:Bank indebtedness


17

$
2.6

$
73.2Trade payables and accrued liabilities





480.3


1,008.1Income and other taxes payable





40.7


39.8Future income taxes


8


0.4


1.0Secured financing


11





462.5Current portion of long-term debt


18


583.2


1,023.7Liabilities subject to compromise


4


2,882.5


Total current liabilities





3,989.7


2,608.3Long-term debt


18


60.8


1,313.6Other liabilities


19


246.4


363.4Future income taxes


8


43.1


132.2Preferred shares


20


35.1


178.5Shareholders' deficit:Capital stock


20


1,595.2


1,457.4Contributed surplus





103.2


102.1Deficit





(3,490.0
)

(1,813.3
)Accumulated other comprehensive income (loss)


22


236.9


(179.2
)(1,554.7
)

(433.0
)Total liabilities and shareholders' deficit




$
2,820.4

$
4,163.0


On behalf of the Board:

/s/Brian MulroneyThe Right Honourable
Brian Mulroney, Director

/s/Alain RhéaumeAlain Rhéaume, Director


See
accompanying Notes to Consolidated Financial Statements.

F-11

---





Table of Contents

QUEBECOR WORLD INC.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        Years ended December 31, 2008, 2007 and 2006  (Tabular amounts are expressed
in million of US dollars, except per share and option amounts)

1.     Creditor Protection and Restructuring



F-12

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

1.     Creditor Protection and Restructuring (Continued)



F-13

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

1.     Creditor Protection and Restructuring (Continued)



F-14

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

1.     Creditor Protection and Restructuring (Continued)



F-15

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

1.     Creditor Protection and Restructuring (Continued)



F-16

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

1.     Creditor Protection and Restructuring (Continued)



F-17

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

1.     Creditor Protection and Restructuring (Continued)



F-18

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

1.     Creditor Protection and Restructuring (Continued)



2.     Summary of Significant Accounting Policies





F-19

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)





F-20

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)







F-21

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)







F-22

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)



Assets

Estimated useful livesBuildings

15 to 40 yearsMachinery and equipment, including spare parts

3 to 18 yearsLeasehold improvements

Lesser of the term of the lease or useful life








F-23

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)



F-24

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)





F-25

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)



F-26

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)









F-27

---





Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

2.     Summary of Significant Accounting Policies (Continued)









F-28

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)



3.     Reorganization Items



Note

2008Amortization of financing costs




$
15.1Amortization of embedded derivatives and hedges interest rate risk


7


(11.2
)Repudiated contracts





12.9Professional fees





69.0Other expenses





23.7Interest income on accumulated cash





(3.6
)$
105.9


4.     Liabilities Subject to Compromise



F-29

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

4.     Liabilities Subject to Compromise (Continued)



NoteTrade payables and accrued liabilities




$
318.5Income and other taxes payable





34.8Litigation and other reserves





20.5Long-term debt


18


2,293.8Derivative financial instruments





31.5Post-filing interest





183.4Total Liabilities subject to compromise




$
2,882.5




F-30

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

4.     Liabilities Subject to Compromise (Continued)





F-31

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

4.     Liabilities Subject to Compromise (Continued)



5.     Condensed Combined Financial Information



F-32

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

5.     Condensed Combined Financial Information (Continued)



Entities in Insolvency ProceedingsOperating revenues

$
3,723.0Operating expenses:Cost of sales


3,308.6Selling, general and administrative


333.7Impairment of assets, restructuring and other charges


238.5Goodwill impairment charge


341.14,221.9Operating loss


(498.9
)Financial expenses


516.1Dividends on preferred shares classified as liability


5.2Reorganization items


105.9Loss from continuing operations before income taxes


(1,126.1
)Income taxes


(47.1
)Net income (loss) from continuing operations


(1,079.0
)Net loss from discontinued operations (net of tax)


(685.3
)Net loss

$
(1,764.3
)


F-33

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

5.     Condensed Combined Financial Information (Continued)



Entities in Insolvency ProceedingsCash flows provided by operating activities

$
(58.6
)Cash flows from financing activities:Issuance of DIP Term Loan, net of issuance costs


556.5Repayment of DIP Term Loan


(74.5
)Net borrowing under revolving DIP Facility


51.9Repayments of long-term debt


(21.3
)Net borrowings under revolving bank facility


77.0Net change in secured financing


(15.0
)Repayment of North American securitization program subsequent to Insolvency Proceedings


(413.0
)Cash flows provided by financing activities


161.6Cash flows from investing activities:Net proceeds from business disposals, net of cash and cash equivalents


76.1Additions to property, plant and equipment


(92.7
)Net proceeds from disposal of assets


24.8Restricted cash related to Insolvency Proceedings


(43.9
)Cash flows used in investing activities


(35.7
)Effect of foreign currency


103.1Net change in cash and cash equivalents


170.4Cash and cash equivalents, beginning of year


0.4Cash and cash equivalents, end of year

$
170.8


F-34

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

5.     Condensed Combined Financial Information (Continued)



Entities in
Insolvency
ProceedingsAssetsCurrent assets

$
1,029.8Property, plant and equipment


1,062.6Restricted cash


40.6Other assets


318.4Total assets

$
2,451.4Liabilities and Shareholders' deficitOther current liabilities

$
389.8Current portion of long-term debt


582.0Liabilities subject to compromise


2,882.5Intercompany payables subject to compromise(a)


2,436.6Total current liabilities


6,290.9Long-term debt


53.6Other liabilities


221.4Future income taxes


38.9Preferred shares


35.1Shareholders' deficit


(4,188.5
)Total liabilities and shareholders' deficit

$
2,451.4


---

F-35

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

6.     Impairment of Assets, Restructuring and Other Charges



Note

2008

2007

2006Impairment of assets




$
183.4

$
188.0

$
31.0Restructuring and other charges





50.0


30.8


33.3Pension settlements and curtailments


28


0.4


4.8


1.9Pension multiemployer plans settlement


28


8.3





$
242.1

$
223.6

$
66.2






2008



F-36

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

6.     Impairment of Assets, Restructuring and Other Charges (Continued)



2007



2006



F-37

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

6.     Impairment of Assets, Restructuring and Other Charges (Continued)



2008
Initiatives

2008
Prior Year
Initiatives

2008
Total

2007
Initiatives

2007
Prior Year
Initiatives

2007
Total

2006
TotalExpensesWorkforce reduction

$
39.2

$
9.3

$
48.5

$
10.8

$
0.4

$
11.2

$
23.7Leases and carrying costs for closed facilities


7.2


4.4


11.6


11.0


11.8


22.8


10.746.4


13.7


60.1


21.8


12.2


34.0


34.4UnderspendingWorkforce reduction





(1.2
)

(1.2
)




(3.2
)

(3.2
)

(0.7
)Leases and carrying costs for closed facilities





(0.6
)

(0.6
)










(0.4
)


(1.8
)

(1.8
)




(3.2
)

(3.2
)

(1.1
)Total expenses


46.4


11.9


58.3


21.8


9.0


30.8


33.3Business disposals





(7.9
)

(7.9
)




(17.7
)

(17.7
)

9.7PaymentsWorkforce reduction


(25.2
)

(4.8
)

(30.0
)

(8.2
)

(10.7
)

(18.9
)

(10.8
)Leases and carrying costs for closed facilities


(6.3
)

(4.5
)

(10.8
)

(10.9
)

(13.3
)

(24.2
)

(12.3
)(31.5
)

(9.3
)

(40.8
)

(19.1
)

(24.0
)

(43.1
)

(23.1
)Net change


14.9


(5.3
)

9.6


2.7


(32.7
)

(30.0
)

19.9Foreign currency changes


(0.4
)

(0.3
)

(0.7
)

(0.1
)

0.2


0.1


Balance, beginning of year





17.0


17.0





46.9


46.9


27.0Balance, end of year

$
14.5

$
11.4

$
25.9

$
2.6

$
14.4

$
17.0

$
46.9


2008 restructuring initiatives



F-38

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

6.     Impairment of Assets, Restructuring and Other Charges (Continued)



Prior years restructuring initiatives



2007 restructuring initiatives



2006 restructuring initiatives



F-39

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)



7.     Financial Expenses

Note

2008

2007

2006Interest expenses (a)




$
243.4

$
181.4

$
151.6Bank and other charges





10.5


11.6


6.0Amortization of financing costs





58.1


6.6


2.9Net loss (gain) on foreign exchange





127.7


(119.3
)

(44.7
)Derivative financial instruments (b)





(21.2
)

101.0


32.7Prepayment premium on the early redemption of debts








53.1


Exchange loss from reductions of net investments in self-sustaining foreign operations











2.5418.5


234.4


151.0Interest capitalized to the cost of equipment





(2.3
)

(5.7
)

(16.6
)$
416.2

$
228.7

$
134.4Portion included in discontinued operations


9


6.3


49.8


20.4$
409.9

$
178.9

$
114.0


---

8.     Income Taxes



2008

2007

2006Domestic

$
(339.2
)
$
(133.6
)
$
(48.3
)Foreign


(644.0
)

(1,942.3
)

129.9$
(983.2
)
$
(2,075.9
)
$
81.6


F-40

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

8.     Income Taxes (Continued)



Note

2008

2007

2006Continuing operations




$
(39.3
)
$
(238.2
)
$
(38.0
)Discontinued operations


9


(3.4
)

(12.0
)

1.4Shareholders' equity (deficit):Other comprehensive income





0.3


9.0


(1.3
)Dividends on preferred shares








2.6


3.0$
(42.4
)
$
(238.6
)
$
(34.9
)




2008

2007

2006Current:Domestic

$
(2.4
)
$
1.4

$
2.1Foreign


19.5


4.2


(40.9
)17.1


5.6


(38.8
)Portion included in discontinued operations


(0.8
)

(0.2
)

(0.1
)16.3


5.4


(38.9
)Future:Domestic


(1.3
)

(25.1
)

(25.3
)Foreign


(58.5
)

(230.7
)

27.5(59.8
)

(255.8
)

2.2Portion included in discontinued operations


4.2


12.2


(1.3
)(55.6
)

(243.6
)

0.9Total from continuing operations

$
(39.3
)
$
(238.2
)
$
(38.0
)


F-41

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

8.     Income Taxes (Continued)



2008

2007

2006Domestic statutory tax rate


31.1
%

33.1
%

33.1
%Increase (reduction) resulting from:Change in valuation allowance


(15.1
)

(1.5
)

10.5Effect of foreign tax rate differences


9.9


7.5


(77.6
)Permanent differences


(9.3
)

0.5


1.0Changes in enacted and average tax rates on cumulative temporary differences








(2.4
)Goodwill impairment


(11.6
)

(29.2
)

Other


(1.0
)

1.1


(11.2
)Effective tax rate


4.0
%

11.5
%

(46.6
)%


F-42

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

8.     Income Taxes (Continued)



2008

2007Future income tax assets:Operating loss carryforwards

$
312.4

$
464.0Tax credit carryforwards


17.3


14.7Accounts receivable


15.4


17.8Goodwill and other assets


26.1


22.8Pension, postretirement and workers compensation benefits


29.4


18.5Not deductible provision


25.1


50.9Interest limitation


57.1


53.7Other


30.5


13.0513.3


655.4Future income tax liabilities:Property, plant and equipment


(144.5
)

(265.6
)Inventories


(17.3
)

(24.1
)(161.8
)

(289.7
)Valuation allowance


(375.3
)

(459.1
)Net future income tax liabilities


(23.8
)

(93.4
)Current portion of:Future income tax assets


13.9


28.6Future income tax liabilities


(0.4
)

(1.0
)Long term portion of:Future income tax assets


5.8


11.2Future income tax liabilities


(43.1
)

(132.2
)Future income tax liabilities, net

$
(23.8
)
$
(93.4
)




F-43

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

8.     Income Taxes (Continued)



9.     Discontinued Operations and Other Disposals





F-44

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

9.     Discontinued Operations and Other Disposals (Continued)



Summary of discontinued operations

Note

2008

2007

2006Operating revenues




$
485.8

$
1,033.7

$
1,025.4Operating expenses:Cost of sales





473.2


997.5


973.0Selling, general and administrative





37.0


78.9


68.0Securitization fees


11





7.8


6.4Impairment of assets, restructuring and other charges





2.8


96.0


45.1Goodwill impairment charge


15





166.0


513.0


1,346.2


1,092.5Operating loss





(27.2
)

(312.5
)

(67.1
)Financial expenses


7


6.3


49.8


20.4Net loss before income taxes and loss on business disposals





(33.5
)

(362.3
)

(87.5
)Income taxes


8


(3.4
)

(12.0
)

2.0Net loss before loss on business disposals





(30.1
)

(350.3
)

(89.5
)Loss on business disposals, net of tax





(685.3
)

(12.7
)

(1.0
)Net loss from discontinued operations




$
(715.4
)
$
(363.0
)
$
(90.5
)


F-45

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

9.     Discontinued Operations and Other Disposals (Continued)

Summary of assets and liabilities sold and abandoned

December 31, 2008Assets sold and abandoned:Cash and cash equivalents

$
32.6Non-cash operating working capital


135.5Property, plant and equipment


482.8Other assets


5.2Liabilities sold and abandoned:Secured financing


98.0Long-term debt


14.3Other liabilities


28.1Future income taxes


5.4Net assets

$
510.3Effect of cumulative translation adjustment

$
273.3Proceeds:Cash

$
82.1Note receivable


22.3Transaction fees


(6.1
)$
98.3Net loss on business disposals and other

$
685.3






F-46

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)



10.   Earnings (Loss) Per Share



2008

2007

2006Net income (loss) from continuing operations

$
(943.9
)
$
(1,837.4
)
$
118.8Net income allocated to holders of preferred shares


17.4


22.2


34.0Income (loss) from continuing operations available to holders of equity shares

$
(961.3
)
$
(1,859.6
)
$
84.8(In millions)Weighted-average number of equity shares outstanding


182.6


131.9


131.4Earnings (loss) per share:Basic and diluted

$
(5.26
)
$
(14.10
)
$
0.65




11.   Sales of Accounts Receivable



12.   Related Party Transactions



F-47

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

12.   Related Party Transactions (Continued)



2008

2007

2006Companies then under common control:Revenues

$
41.8

$
56.3

$
66.3Selling, general and administrative expenses


20.4


25.0


13.6Management fees billed by Quebecor Inc.





5.0


4.8




F-48

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

12.   Related Party Transactions (Continued)



13.   Inventories

2008

2007Raw materials and supplies

$
152.3

$
241.7Work in process


81.6


126.4$
233.9

$
368.1




F-49

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

14.   Property, Plant and Equipment

Cost

Accumulated
depreciation

Net book
valueDecember 31, 2008Land

$
54.2

$


$
54.2Buildings and leasehold improvements


473.1


157.2


315.9Machinery and equipment


3,093.4


2,352.5


740.9Projects under development


50.0





50.0$
3,670.7

$
2,509.7

$
1,161.0December 31, 2007Land

$
80.1

$


$
80.1Buildings and leasehold improvements


753.1


246.8


506.3Machinery and equipment


4,219.6


2,843.7


1,375.9Projects under development


46.7





46.7$
5,099.5

$
3,090.5

$
2,009.0




F-50

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

14.   Property, Plant and Equipment (Continued)



15.   Goodwill



North
America

Europe

Latin
America

TotalBalance, December 31, 2005

$
2,156.7

$
140.9

$
8.1

$
2,305.7Business disposals


(0.4
)

(0.6
)




(1.0
)Foreign currency changes





19.1


0.5


19.6Balance, December 31, 2006

$
2,156.3

$
159.4

$
8.6

$
2,324.3Goodwill acquired


3.9





0.5


4.4Goodwill impairment (a)


(1,823.2
)

(166.0
)

(9.7
)

(1,998.9
)Foreign currency changes


5.3


6.6


0.6


12.5Balance, December 31, 2007

$
342.3

$


$


$
342.3Goodwill impairment (b)


(341.1
)







(341.1
)Foreign currency changes


(1.2
)







(1.2
)Balance, December 31, 2008

$


$


$


$



---



F-51

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

15.   Goodwill (Continued)



16.   Restricted Cash



17.   Bank Indebtedness



F-52

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

18.   Long-Term Debt



Note

Maturity

2008

2007Revolving bank facility and other short-term lines (a) (b)





2008

$
712.5

$
643.1Senior Notes 4.875% and 6.125% (a) (c)





2008, 2013


600.0


598.1Senior Notes 9.75% (a) (d)





2015


400.0


400.0Equipment financing credit facility (a) (e)





2015


128.1


168.5Senior Notes 8.75% (a) (f)





2016


450.0


450.0Senior Debentures 6.50% (a) (g)





2027


3.2


3.22,293.8


2,262.9Amortization of effect of fair value hedge on interest rate risk











(1.9
)Adjustment related to embedded derivatives











9.4Financing fees, net of amortization











(25.4
)Less:Long-term debt of Applicants subject to compromisesubsequent to January 21, 2008


4





(2,293.8
)




2,245.0DIP financing (h)





2009


572.0


Capital leases (i)





2008-2016


63.6


62.5Other debts (i)





2008-2022


8.4


29.8644.0


2,337.3Current portion of long-term debt








583.2


1,023.7Long-term debt







$
60.8

$
1,313.6


---

F-53

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

18.   Long-Term Debt (Continued)





F-54

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

18.   Long-Term Debt (Continued)



Capital lease paymentsPrincipal repayments
on long term debtPrincipal

Interest

Payment2009

$
573.3

$
9.9

$
4.8

$
14.72010


3.7


9.8


4.0


13.82011


1.4


10.0


3.3


13.32012


1.0


10.9


2.4


13.32013


1.0


11.9


1.5


13.42014 and thereafter





11.1


0.5


11.6


19.   Other Assets and Other Liabilities



Note

2008

2007Accrued pension benefit asset


28

$
130.7

$
122.8Contract acquisition costs





71.6


33.8Deposits





34.8


1.8Derivative financial instruments








5.3Receivable related to LSTC





45.4


20.5Other





51.8


38.6Total Other Assets




$
334.3

$
222.8


F-55

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

19.   Other Assets and Other Liabilities (Continued)



Note

2008

2007Pension liability


28

$
59.0

$
89.0Postretirement benefits


28


67.0


70.1Workers' compensation accrual





45.8


47.3Derivative financial instruments





32.2


62.4Asset retirement obligations





11.9


14.7Reserve for environmental matters





4.5


8.1Deferred gain on property, plant and equipment disposal


12, 14, 18


29.5


31.6Other





48.5


40.2Total Other Liabilities





298.4


363.4Less Other liabilities subject to compromise:Derivative financial instruments





31.5


Reserve for environmental matters





4.5


Other





16.0


4


52.0$
246.4

$
363.4


20.   Capital Stock





F-56

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

20.   Capital Stock (Continued)



December 31, 2008

December 31, 2007

December 31, 2006Number

Amount

Number

Amount

Number

Amount(Thousands of shares)Multiple Voting Shares


46,987

$
93.5


46,987

$
93.5


46,987

$
93.5Subordinate Voting Shares


154,642


1,289.2


85,585


1,151.4


84,722


1,146.4Redeemable First Preferred SharesSeries 3Classified as Shareholders' equity


12,000


212.5


12,000


212.5


12,000


212.5Total Capital Stock




$
1,595.2




$
1,457.4




$
1,452.4Redeemable First Preferred SharesSeries 5Classified as liability


1,696


35.1


7,000


178.5


7,000


150.2Total Preferred Shares Classified as Liability




$
35.1




$
178.5




$
150.2


F-57

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

20.   Capital Stock (Continued)





21.   Stock-Based Compensation Plans





F-58

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

21.   Stock-Based Compensation Plans (Continued)





F-59

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

21.   Stock-Based Compensation Plans (Continued)



2007

2006Risk-free interest rate


4.78%


4.45%Dividend yield


%


3.75%Expected volatility


32.71%


33.44%Expected life


4.25 years


4.25 years




2008

2007

2006Options

Weighted
average
exercise
price

Options

Weighted
average
exercise
price

Options

Weighted
average
exercise
priceBalance, beginning of year


6,942,451

$
23.47


7,772,300

$
19.70


5,947,970

$
23.45Granted








100,000


11.78


2,314,500


10.45Exercised








(22,500
)

10.62





Forfeited


(937,885
)

15.23


(839,755
)

12.12


(433,885
)

21.40Expired


(933,666
)

23.37


(67,594
)

22.72


(56,285
)

18.98Balance, end of year


5,070,900

$
20.29


6,942,451

$
23.47


7,772,300

$
19.70Options exercisable, end of year


3,035,456

$
22.07


3,984,005

$
25.90


3,041,159

$
24.67




Options outstanding

Options exercisableRange of exercise prices

Number
outstanding

Weighted
average
remaining
contractual life
(in years)

Weighted
average
exercise
price

Number
exercisable

Weighted
average
exercise
price$9.80$14.99


1,133,625


3.54

$
10.62


394,070

$
10.58$15.00$19.99


703,650


3.23


19.32


401,368


19.04$20.00$24.99


2,355,636


3.90


22.53


1,362,029


22.76$25.00$30.99


877,989


1.70


27.55


877,989


27.555,070,900


3.34

$
20.29


3,035,456

$
22.07


F-60

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

21.   Stock-Based Compensation Plans (Continued)







F-61

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Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)



22.   Accumulated Other Comprehensive Income (Loss)



Translation
adjustment

Cash flow
hedges

Total(Revised,
Note 20)Balance, December 31, 2005

$
(102.6
)
$


$
(102.6
)Other comprehensive income, net of income taxes


20.0





20.0Balance, December 31, 2006

$
(82.6
)
$


$
(82.6
)Change in accounting policyFinancial Instruments, net of income taxes





(7.0
)

(7.0
)Other comprehensive income (loss), net of income taxes


(104.8
)

15.2


(89.6
)Balance, December 31, 2007

$
(187.4
)
$
8.2

$
(179.2
)Other comprehensive income (loss), net of income taxes


423.5


(7.4
)

416.1Balance, December 31, 2008

$
236.1

$
0.8

$
236.9




23.   Income Taxes on Components of Other Comprehensive Income (Loss)



2008

2007Income tax on unrealized gain (loss) on foreign currency
translation adjustment

$
(0.2
)
$
(1.8
)Income tax on unrealized net gain (loss) on derivative financial instruments related to cash flow hedges


(1.4
)

(3.7
)Income tax on reclassification of realized net loss (gain) on derivative financial instruments to the statement of income


1.3


(3.5
)$
(0.3
)
$
(9.0
)


F-62

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

24.   Financial Instruments





2008

2007Note

Book
Value

Fair
Value

Book
Value

Fair
ValueFinancial liabilitiesLong-term debt(1)


18

$
644.0

$
614.9

$
2,337.3

$
2,018.7Preferred shares


20


35.1


0.2


178.5


112.4










F-63

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

24.   Financial Instruments (Continued)



F-64

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Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

24.   Financial Instruments (Continued)



December 31,
2008

December 31,
2007Current

$
481.6

$
847.8130 days overdue


104.6


108.83190 days overdue


24.5


27.9More than 90 days overdue


60.2


41.5670.9


1,026.0Allowance for doubtful accounts


(60.3
)

(43.5
)Other receivables


83.4


48.3$
694.0

$
1,030.8




December 31,
2008

December 31,
2007Balance, beginning of year

$
43.5


48.2Bad debt expense


27.5


5.4Business disposals


(6.0
)

(0.2
)Other


(4.7
)

(9.9
)Balance, end of year

$
60.3


43.5




F-65

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

24.   Financial Instruments (Continued)



2009

2010

2011

2012

2013

2014 and
thereafter

TotalBank indebtedness

$
2.6

$


$


$


$


$


$
2.6Trade payables and accrued liabilities


480.3

















480.3Income and other taxes payable


40.7

















40.7Long-term debt


573.3


3.7


1.4


1.0


1.0





580.4Capital leases


9.9


9.8


10.0


10.9


11.9


11.1


63.6Interest payments on long-term debt, and capital leases(1)


31.4


4.3


3.4


2.5


1.5


0.5


43.6Total Financial Liabilities

$
1,138.2

$
17.8

$
14.8

$
14.4

$
14.4

$
11.6

$
1,211.2






F-66

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

24.   Financial Instruments (Continued)



2008

2007US $

US $Net cash, cash equivalents and bank indebtedness


1.0


(4.5
)Accounts receivable


16.5


19.0Trade payables and accrued liabilities


5.1


6.2Debt


565.7


542.0




F-67

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

24.   Financial Instruments (Continued)



25.   Capital and Liquidity Management



26.   Supplementary Cash Flow Information

2008

2007

2006Cash

$
98.2

$
49.2

$
13.2Cash equivalents


110.5


11.9


4.6Cash and cash equivalents

$
208.7

$
61.1

$
17.8


F-68

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

26.   Supplementary Cash Flow Information (Continued)



2008

2007

2006Interest payments

$
42.0

$
127.6

$
140.0Dividends paid on preferred shares classified as liability





5.7


Income tax paid (net of refund)


6.7


(9.4
)

32.0




27.   Commitments, Contingencies and Guarantees



2009

$
60.12010


40.02011


26.62012


23.52013


20.52014 and thereafter


81.5








F-69

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

27.   Commitments, Contingencies and Guarantees (Continued)





F-70

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)



28.   Pension and Other Postretirement Benefits



F-71

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

28.   Pension and Other Postretirement Benefits (Continued)



Pension
Benefits

Postretirement
Benefits2008

2007

2008

2007Changes in benefit obligationsBenefit obligation, beginning of year

$
999.3

$
1,041.9

$
62.3

$
64.8Service cost


7.1


12.6


1.3


1.2Interest cost


51.2


57.0


3.7


3.3Plan participants' contributions


2.8


4.4


1.2


1.4Plan amendements





(3.4
)




Divestitures


(114.5
)







Curtailment gain


(1.3
)

(5.7
)

(0.4
)

Settlement gain


(1.9
)

(3.8
)




Actuarial gain


(109.2
)

(51.3
)

(6.6
)

(4.0
)Benefits paid


(47.5
)

(105.9
)

(5.3
)

(6.4
)Foreign currency changes


(54.5
)

53.5


(2.5
)

2.0Benefit obligation, end of year

$
731.5

$
999.3

$
53.7

$
62.3Changes in plan assetsFair value of plan assets, beginning of year

$
795.3

$
720.7

$


$
Actual return on plan assets


(116.6
)

75.8





Employer contributions


46.3


62.0


4.1


5.0Plan participants' contributions


2.8


4.4


1.2


1.4Divestitures


(73.2
)







Benefits paid


(47.5
)

(105.9
)

(5.3
)

(6.4
)Settlement loss


(1.9
)

(1.5
)




Foreign currency changes


(45.1
)

39.8





Fair value of plan assets, end of year

$
560.1

$
795.3

$


$
Reconciliation of funded statusFunded status

$
(171.4
)
$
(204.0
)
$
(53.7
)
$
(62.3
)Unrecognized net transition asset


0.2


(2.3
)




Unrecognized past service cost (benefit)


12.8


13.6


(9.9
)

(12.1
)Unrecognized actuarial (gain) loss


227.5


216.7


(4.4
)

3.0Adjustment for fourth quarter contributions


2.6


9.8


1.0


1.3Net amount recognized

$
71.7

$
33.8

$
(67.0
)
$
(70.1
)


F-72

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

28.   Pension and Other Postretirement Benefits (Continued)



Pension
Benefits

Postretirement
Benefits2008

2007

2008

2007Benefit obligations

$
(720.1
)
$
(954.9
)
$
(53.7
)
$
(62.3
)Fair value of plan assets


548.2


746.2





Funded statusplan deficit

$
(171.9
)
$
(208.7
)
$
(53.7
)
$
(62.3
)




Pension
Benefits

Postretirement
BenefitsNote

2008

2007

2008

2007Accrued benefit liability


19

$
(59.0
)
$
(89.0
)
$
(67.0
)
$
(70.1
)Accrued benefit asset


19


130.7


122.8





Net amount recognized




$
71.7

$
33.8

$
(67.0
)
$
(70.1
)




Asset category

2008

2007Equity securities


59
%

64
%Debt securities


38


33Real estate and others


3


3




F-73

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

28.   Pension and Other Postretirement Benefits (Continued)



Pension
Benefits

Postretirement
Benefits2008

2007

2006

2008

2007

2006Defined benefit plansService cost

$
6.9

$
10.7

$
32.6

$
1.3

$
1.2

$
1.3Interest cost


51.2


50.7


53.6


3.7


3.3


3.7Actual return on plan assets


116.6


(70.3
)

(38.9
)







Actuarial gain


(63.8
)

(47.7
)

(33.9
)

(6.6
)

(4.0
)

(5.2
)Plan amendments








3.0








Curtailment (gain) loss


0.3


(0.1
)

0.1








Settlement loss


0.4


12.9


3.3








Benefit cost before adjustments to recognize the long-term nature of the plans


111.6


(43.8
)

19.8


(1.6
)

0.5


(0.2
)Difference between expected return and actual return on plan assets


(167.2
)

20.9


(8.1
)







Difference between actuarial (gain) loss recognized for the year and actual actuarial (gain) loss on accrued benefit obligation for the year


71.9


60.2


51.0


6.8


4.2


6.1Difference between amortization of past service cost (benefit) for the year and actual plan amendments for the year


1.6


1.6


(1.9
)

(2.1
)

(2.1
)

(2.0
)Amortization of transitional asset





(0.5
)

(0.5
)







Net periodic cost


17.9


38.4


60.3


3.1


2.6


3.9Defined contribution plans


37.4


28.9


17.6








Total periodic benefit cost

$
55.3

$
67.3

$
77.9

$
3.1

$
2.6

$
3.9




F-74

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

28.   Pension and Other Postretirement Benefits (Continued)



Pension
Benefits

Postretirement
Benefits2008

2007

2006

2008

2007

2006Accrued benefit obligations as of December 31:Discount rate


7.4
%

6.0
%

5.6
%

7.4
%

6.2
%

5.8
%Rate of compensation increase


3.5
%

3.4
%

3.4
%







Benefit costs for years ended December 31:Discount rate


6.0
%

5.6
%

5.4
%

6.2
%

5.8
%

5.6
%Expected return on plan assets


7.5
%

7.5
%

7.6
%







Rate of compensation increase


3.4
%

3.4
%

3.4
%










F-75

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

28.   Pension and Other Postretirement Benefits (Continued)



Postretirement BenefitsSensitivity analysis

1% increase

1% decreaseEffect on service and interest costs

$
0.5

$
(0.4
)Effect on benefit obligation


3.7


(3.3
)


29.   Segmented Information



F-76

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

29.   Segmented Information (Continued)



North
America(1)

Latin
America

Other

Inter-
Segment

TotalRevenues2008


3,723.0


294.6


0.2


(0.9
)

4,016.92007


4,373.7


284.8


0.5


(4.5
)

4,654.52006


4,821.7


239.3


0.7


(0.8
)

5,060.9Depreciation and amortization2008


226.8


12.4


0.5





239.72007


237.1


12.7


0.3





250.12006


242.8


10.8


0.6





254.2Impairment of assets2008


182.5





0.9





183.42007


187.0


1.0








188.02006


30.5


0.5








31.0Restructuring and other charges2008


56.0


2.0


0.7





58.72007


34.7


0.9








35.62006


34.5


0.7








35.2Goodwill impairment charge2008


341.1











341.12007


1,823.2


9.7








1,832.92006














Adjusted EBIT2008


109.8


16.9


(5.7
)




121.02007


180.9


13.2


(24.8
)




169.32006


257.8


10.0


(6.0
)




261.8Operating income (loss)2008


(469.8
)

14.9


(7.3
)




(462.2
)2007


(1,864.0
)

1.6


(24.8
)




(1,887.2
)2006


192.8


8.8


(6.0
)




195.6Additions to property, plant and equipment(2)2008


92.2


8.3


8.2





108.72007


251.5


3.5


66.0





321.02006


207.9


29.1


76.8





313.8Property, plant and equipment(2)2008


1,062.6


94.5


3.9





1,161.02007


1,413.8


111.7


483.5





2,009.0Goodwill(2)2008














2007


342.3











342.3Total assets(2)2008


2,357.8


255.1


207.5





2,820.42007


2,885.2


290.5


987.3





4,163.0


---

F-77

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

29.   Segmented Information (Continued)



2008

2007

2006Marketing Solutions

$
1,888.4


47.0
%
$
2,310.6


49.6
%
$
2,540.1


50.2
%Publishing Services


1,720.2


42.8


1,873.2


40.3


2,020.6


39.9Logistics-Premedia


408.3


10.2


470.7


10.1


500.2


9.9$
4,016.9


100.0
%
$
4,654.5


100.0
%
$
5,060.9


100.0
%


30.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States



F-78

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

30.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Continued)





2008

2007

2006Net income (loss), as reported in the consolidated statements of income per Canadian GAAP

$
(1,659.3
)
$
(2,200.4
)
$
28.3Adjustments:Convertible senior subordinated notes(a)(i)





2.9


2.2Hedge accounting(a)(ii)





6.2


(5.1
)Reduction of a net investment in a foreign operation(a)(iii)


107.8





2.5Sale leaseback of property(a)(iv)


(7.8
)

(1.4
)

Dividends on preferred shares classified as liabilities(b)(iii)


5.2


9.8


Inventories(a)(v)


1.6





Loss on disposal of discontinued operations(a)(v)


(8.9
)




Pension and other post-retirement benefits(b)(i)


(2.5
)




Income taxes(a)(vi)


11.0


(41.5
)

1.9Net income (loss), as adjusted per GAAP in the United States

$
(1,552.9
)
$
(2,224.4
)
$
29.8Net income allocated to holders of preferred shares


22.9


32.6


34.0Net income (loss) per GAAP in the United States available to holders of equity shares

$
(1,575.8
)
$
(2,257.0
)
$
(4.2
)Weighted average number of equity shares outstanding (in millions):Basic and diluted


182.6


131.9


131.4Loss per share as adjusted per GAAP in the United States:Basic and diluted

$
(8.63
)
$
(17.11
)
$
(0.03
)


---

Under
Canadian GAAP, the equity component of the convertible notes is recorded under shareholders' equity as contributed surplus. The difference between the carrying amount of the debt component and
its face value is amortized as imputed interest to income over the life of the convertible senior subordinated note. Regarding the repurchase of convertible notes, the Corporation is required to
allocate the consideration paid on extinguishment to the liability and equity components of the convertible notes based on their fair values at the date of the transaction. The amount of gain (loss)
relating to the liability element is recorded to income and the difference between the carrying amount and the amount considered to be settled relating to the conversion option element is treated as
an equity transaction. Under GAAP in the United States, the allocation to equity is not permitted, no imputed interest is needed in relation

F-79

---



Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

30.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Continued)



Under
GAAP in the United States, Statement of Financial Accounting Standards No.133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") establishes accounting
and reporting standards for derivative instruments and hedging activities and requires that all derivatives be recorded as either assets or liabilities in the balance sheet at fair value.

In
accordance with SFAS 133, for derivative instruments designated as fair value hedges by the Corporation, such as certain interest rate swaps and forward exchange contracts, changes in the
fair values of these derivative instruments are substantially offset in the statement of income by changes in the fair values of the hedged items.

For
derivative instruments designated as cash flow hedges by the Corporation, such as certain forward exchange contracts and natural gas swap contracts, the effective portions of these hedges are
reported in other comprehensive income (loss) until it is recognized in income during the same period in which the hedged item affects income, while the current ineffective portions of these hedges
are recognized in the statement of income each period.

Under
Canadian GAAP prior to January 1, 2007, derivative financial instruments were accounted for on an accrual basis. Realized and unrealized gains and losses were deferred and recognized in
income in the same period and in the same financial statement category as the income or expense arising from the corresponding hedged positions. Since January 1, 2007, the standards for hedge
accounting under Canadian GAAP have been harmonized to those prescribed by SFAS 133 and the differences recognized in prior periods have been eliminated.

Prior
to 2008, certain embedded derivatives, such as early prepayment options included in some of the Corporation's borrowing agreements, did not meet the criteria to be considered closely related to
their host contracts and were required to be recorded separately at their fair values with changes recognized to earnings, for GAAP in Canada. Under GAAP in the United States, these embedded
derivatives were considered to be clearly and closely related to the underlying debt and changes to their fair values were not recorded to earnings.

Under
Canadian GAAP, a gain or loss equivalent to a proportionate amount of the exchange gain or loss accumulated in the translation adjustment has to be recognized in income when there has been a
reduction of a net investment in a foreign operation. Under GAAP in the United States, a gain or loss should only be recognized in income in the case of a substantial or complete liquidation, a
sale or partial sale of a net investment in a foreign operation.

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Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

30.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Continued)

For
Canadian GAAP purposes, the Corporation uses the sale-leaseback method of accounting for sales and leaseback transactions that transfer substantially all the risks and rewards of
ownership to the buyer-lessor, whereby a sale is recorded, the asset is removed from the balance sheet, and the leaseback is accounted for as an operating or a capital lease when certain criteria are
met. Any gain on sale is generally deferred and amortized over the lease term. Profit is recognized to the extent that the gain exceeds the net present value of the minimum lease payments. A loss on
the sale is recognized immediately if the sale and leaseback transaction is established above fair value and the excess of the sales price over fair value should be deferred and amortized over the
lease term.

Under
GAAP in the United States, if the criteria for sale and leaseback accounting are met, any profit or loss on a sale consummated at fair value is generally deferred and amortized in
proportion to the amortization of the leased asset for a capital lease and in proportion to the related gross rental charges for an operating lease. In evaluating whether the criteria for sale and
leaseback accounting are met under GAAP in the United States, any form of continuing involvement with the property, other than a normal leaseback, precludes the recognition of a sale and
results in accounting for the transaction as a financing and the property continues to be shown as an asset of the Corporation until the conditions for sales recognition are met.

As
a result of these differences, the gain that was deferred under Canadian GAAP at the date of a sale and leaseback transaction completed during 2007 with a company then under common control was
reversed under GAAP in the United States. The difference in retained earnings and net income is comprised of the amortization related to reinstated property and imputed interest calculated on
the borrowing recorded under GAAP in the United States as compared to lease payments recognized under Canadian GAAP.

For
Canadian GAAP purposes, effective January 1, 2008 the Corporation adopted CICA handbook section 3031 Inventories, resulting in adjustments to the measurement and allocation of the
cost of inventories. Under GAAP in the United States, no changes regarding the recognition and measurement of inventories took place. An amount of $8.9 million of the adjustment under
GAAP in the United States was related to the European segment at the time of its disposal (Note 9).

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Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

30.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Continued)

This
adjustment represents the tax impact of differences between Canadian GAAP and GAAP in the United States.



2008

2007Canada

United
States

Canada

United
StatesAssetsInventories(a)(vi)


233.9


252.2


368.1


368.1Current future income taxes(a)(v)


13.9


13.6


28.6


30.5Property, plant and equipment(a)(iv)


1,161.0


1,200.9


2,009.0


2,067.0Long-term future income taxes(a)(v)


5.8


5.8


11.2


37.4Other assets(a)(ii)(iv)(b)(i)(iv)


334.3


188.6


222.8


109.5Liabilities and Shareholders' EquityTrade payables and accrued liabilities(a)(ii)(b)(i)(v)


480.3


487.7


1,008.1


1,019.6Income and other taxes payable(b)(v)


40.7


15.6


39.8


12.7Long-term debt(a)(ii)(b)(iv)


60.8


101.8


1,313.6


1,374.7Other liabilities(a)(ii)(iv)(b)(i)(v)


246.4


521.8


363.4


489.7Long-term future income taxes(a)(v)


43.1


12.5


132.2


102.6Preferred shares(b)(iii)


35.1





178.5


Capital stock(b)(ii)(iii)


1,595.2


1,545.3


1,457.4


1,543.0Contributed surplus(a)(i)(v)


103.2


103.0


102.1


101.9Retained earnings (deficit)(a)(b)(i)(ii)(iii)


(3,490.0
)

(3,382.8
)

(1,813.3
)

(1,819.6
)Accumulated other comprehensive income (loss)(c)


236.9


(140.8
)

(179.2
)

(275.3
)


---

Under
GAAP in the United States, Statement No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans ("SFAS 158") was issued in 2006 and requires
the recognition in the balance sheet of the over- or unfunded positions of defined benefit pension and other post-retirement plans, along with a corresponding non-cash
adjustment, which is recorded in the accumulated other comprehensive loss. Under Canadian GAAP, a company is not required to recognize the over- or unfunded positions.

Furthermore,
on January 1, 2008, the Corporation adopted the provision of statement No.158, in relation to changes to the date of measurement for defined benefit plan assets and the projected
benefit obligation as of the date of the fiscal year end statement of financial position. The Corporation elected to use the Alternative method of transition, which resulted in a change of

F-82

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Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

30.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Continued)



Under
GAAP in the United States, share issue costs are deducted from the proceeds of the capital stock issued. Under Canadian GAAP, share issue costs are included in the Retained earnings in
the year in which they are incurred.

Under
Canadian GAAP, the Series 4 and Series 5 Cumulative Redeemable First Preferred Shares are presented as liability in the balance sheet. Under GAAP in the United States, these
preferred shares are classified as equity. As a result, dividends on preferred shares classified as liability which are recorded to income under Canadian GAAP are recorded to equity under GAAP in the
United States.

Under
GAAP in the United States, debt issuance costs are capitalized as an asset and amortized over the term of the debt. Canadian GAAP does not permit an entity to classify debt issuance costs
as
deferred charges but instead requires capitalized financing fees to be deducted from the amortized cost of the debt.

Under
GAAP in the United States, FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement
No. 109, Accounting for Income Taxes, and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. This interpretation also provides guidance as to de-recognition, classification, interest and penalties, accounting in interim periods, disclosure
and transition.

Under
Canadian GAAP, current and long-term tax reserves on income and non-income based taxes are recorded under income tax payable and future tax liabilities, respectively.
Under GAAP in the United States, the liability for unrecognized benefits shall not be combined with deferred tax liabilities or assets.

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Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

30.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Continued)





2008

2007

2006Comprehensive income (loss), as reported in the consolidated statements of comprehensive income per Canadian GAAP

$
(1,243.2
)
$
(2,290.0
)
$
48.3Adjustments to net income (loss) as per (a) above


106.4


(24.0
)

1.5Adjustments to other comprehensive income:Gain (loss) on hedging activities








(21.4
)Pension and other post-retirement benefits(b)(i)


(175.8
)

115.3


1.3Foreign currency translation(a)(iii)(b)(iii)


(106.0
)

18.8


(44.6
)Income taxes(a)(v)





(35.9
)

0.7Comprehensive income (loss), as adjusted per GAAP in the United States

$
(1,418.6
)
$
(2,215.8
)
$
(14.2
)






2008

2007Accumulated other comprehensive income (loss), as reported per Canadian GAAP

$
236.9

$
(179.2
)Adjustments:Pension and postretirement benefits(b)(i)


(385.3
)

(209.5
)Foreign currency translation


(52.2
)

53.6Income taxes(a)(v)


59.8


59.8Accumulated other comprehensive (loss), as adjusted per GAAP in the United States

$
(140.8
)
$
(275.3
)






31.   Restrictions which Limit the Payment of Dividends by the Corporation



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Table of Contents

QUEBECOR WORLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31, 2008, 2007 and 2006
(Tabular amounts are expressed in million of US dollars, except per share and option amounts)

31.   Restrictions which Limit the Payment of Dividends by the Corporation (Continued)





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