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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 40-F

o

Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934orý

Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended December 31, 2009

Commission file number 1-14118




WORLD COLOR PRESS INC.(Exact name of Registrant as specified in its charter)



N/A(Translation of Registrant's name into English (if applicable))



CANADA(Province or other jurisdiction of incorporation or organization)



2750(Primary Standard Industrial Classification Code Number (if applicable))



N/A(I.R.S. Employer Identification Number (if applicable))



999 de Maisonneuve Blvd. West, Suite 1100, Montreal, Quebec, Canada, H3A 3L4
Tel: (514) 877-5334(Address and telephone number of Registrant's principal executive offices)



WORLD COLOR (USA) CORP.
150 East 42nd Street, 11th floor
New York, New York 10017
Telephone: (212) 754-2777(Name, address (including zip code) and telephone number (including area code) of agent for
service in the United States)



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

(Title of Class)

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

Common Shares(Title of Class)

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

(Title of Class)

For
annual reports, indicate by check mark the information filed with this Form:

ý Annual
Information form                        ý Audited financial statements

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.

73,285,000 Common
Shares
12,500,000 Class A Convertible Participating Preferred Shares
10,723,019 Series I Barrier Warrants
10,723,019 Series II Barrier Warrants

Indicate
by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). If "Yes" is marked, indicate the filing number assigned to the Registrant in connection with
such Rule.

Yes o            82-                        
                No ý

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.

Yes ý                        No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post
such files).

Yes o                        No o



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*****************

Disclosure Controls and Procedures

Members of management, at the direction (and with the participation) of the 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 Exchange Act and in National
Instrument 52-109 adopted by the Canadian Securities Administrators), as of December 31, 2009. Based on that evaluation, the Chief Executive Officer and the Chief
Financial Officer concluded that the Registrant's disclosure controls and procedures were effective as of December 31, 2009.

Management's Annual Report on Internal Control over Financial Reporting

The report of management on the Registrant's internal control over financial reporting is located under the heading "Management's Report on Internal
Control Over Financial Reporting" on page 56 of the Management's Discussion and Analysis included in this annual report on Form 40-F and is incorporated herein by
this reference.

Attestation Report of the Registered Public Accounting Firm

The Registrant's independent registered public accounting firm that audited the financial statements included in this annual report on
Form 40-F, has issued an attestation report expressing an opinion on the Registrant's effectiveness of internal control over financial reporting as at December 31, 2009,
which report is located under the heading "Report of Independent Registered Public Accounting Firm" on page 3 of the Registrant's Audited Consolidated Financial Statements for the year ended
December 31, 2009. This attestation report expresses an opinion that the Registrant maintained effective internal control over financial reporting as of December 31, 2009.

Changes in Internal Controls Over Financial Reporting

Based on management's evaluation, the Registrant has identified changes that occurred during the period covered by this annual report on
Form 40-F that materially affected or are reasonably likely to materially affect the Registrant's internal control over financial reporting. These changes related to the hiring of
new employees to perform accounting and finance functions, contracting external consultants to assist with accounting issues, implementing a post-mortem process to review the previous
financial quarter close process issues, and training financial reporting and other key personnel on various accounting topics, each as described under the heading "Material Changes in Internal Control
over Financial Reporting" on page 57 of the Management's Discussion and Analysis included in this annual report on Form 40-F, which is incorporated herein by this reference.

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Audit Committee

The Registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.
The members of the Registrant's audit committee are Mr. Raymond J. Bromark (Chair), Gabriel de Alba, James J. Gaffney and David L. McAusland.

Audit Committee Financial Expert

The Board of Directors of the Registrant has reviewed the definition of "audit committee financial expert" under paragraph 8(b) of General
Instruction B to Form 40-F and determined that the Registrant has at least one audit committee financial expert. The name of the audit committee financial expert of
the Registrant is Raymond J. Bromark. All members of the Audit Committee are "independent" within the meaning of Section 303A.06 of the New York Stock Exchange Standards.

The
Commission has indicated that the designation of Mr. Bromark as the audit committee financial expert of the Registrant does not (i) make Mr. Bromark an "expert" for any
purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933, as amended, as a result of this
designation; (ii) impose any duties, obligations or liability on Mr. Bromark that are greater than those imposed on him as a member of the audit committee and the Board of Directors in
the absence of such designation; or (iii) affect the duties, obligations or liability of any other member of the audit committee or the Board of Directors.

Code of Ethics

We have adopted a Code of Business Conduct (the "Code"), 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 Registrant and its 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 Vice President, 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 Registrant to deal with the non-compliance issues. The Chairman of the Audit Committee informs the Board of Directors thereof at each regular meeting of the Board of
Directors. In December 2009, all the employees of the Registrant and its subsidiaries signed a declaration acknowledging that they have received the new version of the Code, that they have read
and understood the provisions of the Code and that they agree to comply therewith.

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 Registrant's 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 Registrant's
financial documents. Violations of the Specific Code of Ethics may be reported either through the whistleblower program 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 Registrant through the whistleblower program.

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

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Principal Accountant Fees and Services

Fees payable to the Registrant's external auditor, KPMG LLP, for the years ended December 31, 2009 and December 31, 2008,
totaled $9,607,000 and $10,992,000, respectively, as detailed in the following table:

Fees

Financial Year
Ended
December 31, 2009

Financial Year
Ended
December 31, 2008Audit Fees(1)


US$  5,486,000


US$    6,930,000Audit-Related Fees(2)


US$  1,755,000


US$    1,418,000Tax Fees(3)


US$  2,155,000


US$    2,483,000All other Fees(4)


US$     211,000


US$       161,000TOTAL FEES:


US$  9,607,000


US$  10,992,000


(1)Audit Feesconsist of fees billed for the annual integrated audit and quarterly reviews of our annual and
quarterly consolidated financial statements or services that are normally provided by the external auditors in connection with statutory and regulatory filings or engagements. They also include fees
billed for other audit services, which are those services that only the external auditors reasonably can provide, and include the provision of comfort letters and consents, the consultation concerning
financial accounting and reporting of specific issues, the review of documents filed with regulatory authorities.(2)Audit-related Feesconsist of fees billed for assurance and related services that are traditionally
performed by the external auditors, and include consultations concerning financial accounting and reporting standards on proposed transactions; due diligence or accounting work related to business
combinations; and employee benefit plan audits.(3)Tax Feesinclude fees billed for tax compliance services, including the preparation of original and amended
tax returns and claims for refund; tax consultations, such as assistance in connection with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or
technical advice from taxing authorities; tax planning services; and consultation and planning services.(4)All Other Feesinclude fees billed for training and translation services, as well as advice with respect to
our internal controls over financial reporting and disclosure controls and procedures.


Pre-approval policies and procedures

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 Chairman of the Audit Committee may retain our external auditors
for certain audit and non-audit services, provided, however, that the external auditors' estimated fees may not exceed $100,000 per project. All other projects that are expected to entail
fees of over $100,000 must be approved by the Audit Committee either at its next meeting or by way of written resolution. 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 is reviewed by the Audit Committee on an annual basis.

For
each of the years ended December 31, 2009 and 2008, none of the non-audit services described above were approved by the Audit Committee pursuant to the "de minimis exception" to
the pre-approval requirement for non-audit services provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

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Off-Balance Sheet Arrangements

As disclosed on page 48 of the Management's Discussion and Analysis for the year ended December 31, 2009 included in this annual report
on Form 40-F and incorporated herein by reference, other than lease commitments, the Registrant has no significant off-balance sheet arrangements.

Tabular Disclosure of Contractual Obligations

The following table sets forth the Registrant's contractual obligations as at December 31, 2009:

Contractual Obligations(in millions)

Contractual Obligations

2010

2011

2012

2013

2014

2015 and
thereafter

TotalCredit Facility(1)


2


41


406











449Unsecured notes to be issued











46








46Other long term debt


4


1


1


1








7Capital leases


14


15


14


13


13


1


70Interest payments on other long-term debt and capital leases(2)


6


5


3


1


1





16Interest payments on Credit Facility(2)


40


39


23











102Operating leases


46


33


29


25


19


79


231Capital asset purchase commitments


23


5














28Dividend on Preferred shares


5

















5Preferred shares(3)




















Total contractual cash obligations

$
140

$
139

$
476

$
86

$
33

$
80

$
954


(1)Assumes
mandatory repayments and no exercise of the prepayment option by the Registrant and no repayment under the mandatory excess cash flow repayment
clause.(2)Interest
payments were calculated using the interest rate that would prevail should the debt be reimbursed according to its contractual term, assuming no
repayment under the mandatory excess cash flow repayment clause, and using the outstanding balance as at December 31, 2009.(3)Assumes
no exercise of the prepayment option by the Registrant. In the event the holders exercise their conversion option, there would be no cash outflows
for the portion converted.


For
more information about the Registrant's contractual obligations as at December 31, 2009 (as well as for definitions of terms used in the table above), see Management's Discussion and
Analysis included in this annual report on Form 40-F and incorporated by reference herein and, in particular, the Section entitled "Contractual Obligations" on page 48
of the Management's Discussion and Analysis.

Undertaking

Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the
obligation to file an annual report on Form 40-F arises; or transactions in said securities.

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on
Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

Registrant:

WORLD COLOR PRESS INC.By:

/s/Marie-É. Chlumecky Marie-É. Chlumecky
Corporate SecretaryDate:

March 1, 2010


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GRAPHIC

WORLD COLOR PRESS INC.



ANNUAL INFORMATION FORM

FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2009



March 1, 2010

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TABLE OF CONTENTS



PageINTRODUCTORY NOTE


1OUR COMPANY


1Our History


1Our Subsidiaries


2OUR BUSINESS


2Overview of Our Industry


3Description of Business


3Print Services


4Our Employees


6Property, Plants and Equipment


7Manufacturing and Technology


7Sales and Marketing


8Purchasing and Raw Materials


8Competitive Environment


8Seasonality of Our Business


9Government Regulations  Environment


9GENERAL DEVELOPMENT OF THE BUSINESS


10Three-Year History


10Outlook


15OUR DIRECTORS AND OFFICERS


16Our Directors


16Our Senior Officers


19Cease Trade Orders, Bankruptcies, Penalties or Sanctions


22Conflict of Interest


22OUR AUDIT COMMITTEE


23Charter of the Audit Committee


23Composition of the Audit Committee


24Relevant Education and Experience


24Reliance on Certain Exemptions


25Pre-Approval Policies and Procedures


25External Auditor Service Fees


25LEGAL PROCEEDINGS


26RISK FACTORS


26Risks Relating to the Company's Financial
Condition


27Risks Relating to Our Business


28Risks Relating to the Quad/Graphics Transaction


36DESCRIPTION OF CAPITAL STRUCTURE


37Our Capital Structure


37Issued and Outstanding Securities


39Escrowed Securities


39Dividends


39Market for Securities


40Shareholder Rights Plan


41


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PageINTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS


42OUR MATERIAL CONTRACTS


42Warrant Indenture


42Registration Rights Agreement


42Credit Facility


43Indenture of Worldcolor USA


45Arrangement Agreement


45INTERESTS OF EXPERTS


46OUR TRANSFER AGENT AND REGISTRAR


46FORWARD-LOOKING STATEMENTS


46ADDITIONAL INFORMATION


48EXHIBIT A  AUDIT COMMITTEE CHARTER


A-1


ii

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INTRODUCTORY NOTE

Unless otherwise indicated or the context suggests otherwise, all references in this Annual Information Form to "we", "our", "us", the "Company" or
"Worldcolor" are to World Color Press Inc., the successor corporation to Quebecor World Inc. following its reorganization and emergence from bankruptcy, and includes its consolidated
subsidiaries. All references in this Annual Information Form to "QWI", are to Quebecor World Inc., the predecessor corporation of Worldcolor, and includes its consolidated subsidiaries.

Unless
otherwise indicated (a) all references to "dollars" and "$" are to U.S. dollars (b) all references to "Cdn$" are to Canadian dollars; (c) all references to
"€" are to euros; and (d) the information presented in this Annual Information Form is given as at December 31, 2009.

OUR COMPANY

Our History

QWI was incorporated on February 23, 1989 pursuant to theCanada Business Corporations Act(the "CBCA") under the name "Quebecor Printing Inc." ("Quebecor Printing"). QWI was formed to consolidate the assets constituting what was then the printing division of its parent,
Quebecor Inc.

On
January 1, 1990, QWI's predecessors, 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 to consolidate the
assets of the printing sector of Quebecor Inc., QWI's 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 to its certificate of amalgamation under the CBCA.

On
July 21, 2009, QWI implemented a plan of reorganization and compromise (the "Plan") and successfully emerged from protection under theCompanies' Creditors
Arrangement Act(Canada) and under Chapter 11 of the U.S.Bankruptcy Reform Act of 1978, as amended and codified
in Title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the "Bankruptcy Code"). In connection with QWI's exit from protection and
as part of the implementation of the Plan, QWI filed, on July 21, 2009, articles of reorganization to effect, among other things, a change in its name to "World Color Press Inc.".

On
January 25, 2010, Worldcolor and Quad/Graphics, Inc. ("Quad/Graphics") entered into a definitive arrangement agreement (the "Arrangement Agreement"), pursuant to which, subject
to the terms and conditions set forth therein, Worldcolor will amalgamate with a subsidiary of Quad/Graphics (the "Quad/Graphics Transaction"). The Quad/Graphics Transaction is being undertaken
by way of a
plan of arrangement of Worldcolor pursuant to the terms of the CBCA and is expected to close in the summer of 2010, subject to certain regulatory approvals and other closing conditions.

The
registered and head office of Worldcolor is located at 999 de Maisonneuve Boulevard West, Suite 1100, Montreal, Quebec, Canada H3A 3L4. Our telephone number is
(514) 877-5334 and our website address is www.worldcolor.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 Information Form.

1

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Our Subsidiaries

The following organizational chart shows the principal subsidiaries of the Company, along with their governing jurisdiction and the Company's
ownership interest in each such subsidiary. Subsidiaries whose total assets and revenues represented (a) individually, less than 10% of consolidated assets and revenues of the Company as at and
for the financial year ended December 31, 2009 and (b) in the aggregate, less than 20% of consolidated assets and revenues of the Company as at and for the financial year ended
December 31, 2009 have not been included.

GRAPHIC

OUR BUSINESS

Worldcolor is a commercial printer that provides high-value, complete market solutions, including pre-print, print and
post-print services to leading retailers, branded goods companies, cataloguers and publishers of magazines, books, directories and other printed media. With a presence in North American
and Latin American countries (which, for the purposes of this Annual Information Form, include Mexico), Worldcolor is able to serve customers on a regional, national and international basis.

Worldcolor
operates in a dynamic, highly fragmented and competitive printing industry and has established market-leading positions in the segments that it serves through a combination of building
long-term partnerships with the world's leading print media customers, investing in key strategic technologies and expanding the scope of its product offerings and geographical presence
through strategic acquisitions. The customers of Worldcolor include many of the largest publishers, retailers and cataloguers in the geographic areas in which it operates. With respect to retail
inserts, Worldcolor's customers include CVS Caremark Corporation and Wal-Mart Stores Inc. Worldcolor prints catalogues for customers such as Bass Pro Shops Canada, Inc. and
Limited Brands Inc. (Victoria's Secret).

2

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Worldcolor's
book publishing customers include Harlequin Enterprises Limited, The McGraw-Hill Companies, Inc., Pearson Education Inc., Simon & Schuster, Inc.,
The Reader's Digest Association Ltd. and Thomas Nelson, Inc. Worldcolor prints magazines for publishers including Hachette Filipacchi Media U.S., Inc., Source Interlink
Media, LLC, The Reader's Digest Association Ltd. and Wenner Media LLC. Worldcolor's directories customers include Dex One Corporation, Yellow Book USA, Inc. and Yellow
Pages Group Limited.

As
at the date of this Annual Information Form, the Company, together with its corporate office located in Montreal, Quebec, Canada, has 80 printing, distribution and office facilities located
in North America and Latin America. In the United States, Worldcolor is the second largest commercial printer with 57 facilities in 26 states. The Company is the second largest
commercial printer in Canada with 15 premises in five provinces through which the Company offers a diversified mix of printed products and related value-added services to the Canadian and
international markets. The Company is also a leading commercial printer in Latin America, with eight facilities in Argentina, Brazil, Chile, Colombia, Mexico and Peru.

Overview of Our Industry

Commercial printing is a highly fragmented industry, and, in particular, the North American and Latin American printing industries are very
competitive. The 400 largest printers represent approximately 35% of the overall market, according to the Printing Impressions PI400 and the Printing Industries of America/Graphic Arts
Technical Foundation (PIA/GATF) 2008 Print Market Atlas. Printing is one of the largest industries in the United States, with more than 640,000 employees and nearly 30,000 firms
generating an estimated $168 billion in annual sales, according to PIA/GATF 2008 Print Market Atlas. According to the PIA/GATF 2008 Print Market Atlas, the U.S. general
commercial printing sector is estimated to generate approximately $79 billion in sales annually.

Commercial
printers tend to compete based on a number of factors including price, quality, range of services offered, distribution capabilities, customer service, availability of printing time on
appropriate equipment and state-of-the-art technology. Very small competitors may be limited to servicing customers for a specific product category within a
regional market. Mid-size to large commercial printers with greater geographic coverage, such as us, have the ability to serve national and international customers across multiple print
service categories.

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 catalogue or retail insert, and that print plays a synergistic role with many of the new technologies.

Description of Business

We operate in the commercial printing segment of the printing industry and our business segments are located in two main geographical regions: North
America and Latin America.

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North America

In the United States, Worldcolor is the second largest commercial printer with 57 facilities. The Company is a leader in the printing
of books, magazines, directories, retail inserts, catalogues and direct mail.

The
Company is the second largest commercial printer in Canada. It offers publishers and retailers a coast-to-coast manufacturing platform of 14 facilities so customers
are able to print closer to the end user, reducing distribution costs and cycle times. The Company is the leader in Canada in the production of retail inserts and directories and one of the leaders in
the production of magazines, catalogues, books and direct mail products. Customers include many of Canada's leading publishers and retailers, including Canadian Tire Corporation, Limited,
RONA Inc., Canada Wide Media Limited, The Jean Coutu Group (PJC) Inc., Dell Canada, Inc., Best Buy Canada Ltd., Staples, Inc. and The Home Depot, Inc.

Latin America

The Company is a leading commercial printer in Latin America with eight facilities operating in Argentina, Brazil, Chile, Colombia, Mexico and Peru.
It produces magazines, catalogues, retail inserts, books and directories for leading local, regional and international publishers and retailers. The Company provides a digitally linked network of
facilities. The Company's Latin American platform serves as a competitive alternative source to Asia in the printing of books for shipment to North America. 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. Customers include, among others, Santillana, Carvajal, Falabella,
Telmex, Editora Abril, YELL, Televisa, Wal-Mart Stores Inc. and Thomas Nelson Inc.

Print Services

The Company carries out international commercial printing operations, and offers to its customers a broad range of print and related communication
services such as Marketing Solutions (retail inserts, catalogues and direct mail), Publishing Services (magazines, books and directories) and Logistics-Premedia (logistics, pre-media and
other value-added services).

Revenues
by print service are as follows (dollar figures are in millions):

Worldcolor

QWIFive months ended
December 31, 2009

Seven months ended
July 31, 2009

Year ended
December 31, 2008

Year ended
December 31, 2007Marketing Solutions

$
627


46.9%

$
742


42.8%

$
1,867


46.4%

$
2,279


49.0%Publishing Services

$
566


42.3%

$
810


46.7%

$
1,685


42.0%

$
1,842


39.6%Logistics, Premedia and Other

$
144


10.8%

$
183


10.5%

$
465


11.6%

$
534


11.4%Total

$
1,337


100.0%

$
1,735


100.0%

$
4,017


100.0%

$
4,655


100.0%


Retail Inserts

Our major retail insert customers include some of the largest retailers in North America and Latin America, such as CVS Caremark Corporation and
Wal-Mart Stores Inc. We believe that we are a leading retail insert printer in North America.

4

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Catalogues

We are one of the largest printers of catalogues in the United States. Our catalogue customer base includes Bass Pro Shops Canada, Inc.
and Limited Brands Inc. (Victoria's Secret). We offer special catalogue 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 catalogue 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 catalogue needs.

Direct Mail

We are a U.S. industry leader in direct mail production. Two of our facilities, located in Atlanta, Georgia and Effingham, Illinois, are
direct mail facilities that provide complete direct mail production services from the data programming stages through to bulk mailing. We can produce 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 coordinate 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.

Books

We are a North American industry leader in U.S. book manufacturing. We print books for many of the world's leading publishers, including
Harlequin Enterprises Limited, The McGraw-Hill Companies, Inc., Pearson Education Inc., Simon & Schuster, Inc., The Reader's Digest Association Ltd. and
Thomas Nelson, Inc. We are an industry leader in the application of new technologies for book production, including electronic pre-media, information networking and digital
printing. The Company serves more than 500 book publishing customers internationally.

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-Filipacchi Media U.S., Inc.,Maximfor Alpha
Media,Motor Trend,Automobile,Hot Rod, Surfing,Soap Opera WeeklyandPower & Motoryachtfor Source Interlink Media, LLC,The Family HandymanandWeekly Readerfor The Reader's Digest
Association Ltd.,Forbesfor Forbes, Inc.,ESPN The Magazinefor Walt Disney Co., In Touch Weeklyfor Bauer Publishing, andRolling Stone,US
WeeklyandMen's Journalfor Wenner Media LLC. We operate an international print platform with operations in the
United States, Canada and Latin America. We also produce magazine titles such asFortune, Money, Southern Living, Cooking Light, Coastal LivingandPeople 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

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help
publishers reduce costs and improve distribution. Our facilities have selective-binding and ink-jet-imaging capabilities and can utilize our mail analysis system
capabilities for the production of medium to long-run magazines.

Directories

Based on an analysis of printed pages for each of the large directory publishers and their respective printers, Worldcolor is the largest printer of
directories in Canada and Latin America and the second largest printer of directories in the United States. We print directories for some of the largest directory publishers in the world,
including Dex One Corporation, Yellow Book USA, Inc., in the United States and the Yellow Pages Group Limited.

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.

We
provide logistics and mail list services for both ourselves as well as third-party customers, and we manage distribution and mailing services for catalogues, direct mail, magazine (subscriber
copies and newsstand), newspaper inserts, books and bulk printed products. We use scale to consolidate volume and a comprehensive menu of electronic tracking options to efficiently plan all
deliveries. Additionally, we provide customized, flexible mailing strategies based on customers' specific in-home delivery requirements.

Our Employees

As of February 10, 2010, we employed approximately 16,000 people in Canada and the United States, of which approximately 34% are
represented by a labour organization. The Company had 36 collective bargaining agreements in Canada and the United States as of February 10, 2010. As of February 10, 2010
the Company employed approximately 2,400 people in Latin America, the majority of which are either governed by agreements that apply
industry-wide, by a collective agreement or through works councils or similar arrangements.

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Property, Plants and Equipment

Our corporate offices, comprising 38,161 square feet, are located in a leased space at 999 de Maisonneuve Boulevard West,
Montreal, Quebec, Canada, H3A 3L4. We own or lease 57 facilities in the United States, 15 premises in Canada (including the corporate head office) and eight facilities in
Latin America. Many of these facilities have multiple buildings and warehouses. Our facilities occupy approximately 17.2 million square feet of premises in the United States,
approximately 2.1 million square feet in Canada and approximately 1.3 million square feet in Latin America.

The
following table summarizes the locations of our printing, distribution and office facilities:

Location

# of FacilitiesUnited StatesArkansas, 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


57CanadaAlberta, British Columbia, Nova Scotia, Ontario and Quebec


15
(1)Latin AmericaArgentina, Brazil, Chile, Colombia, Mexico and Peru


8Total:


80


(1)Including
the corporate head office located in Montreal, Canada.


Manufacturing and Technology

Description of Manufacturing Processes and Equipment

We use a variety of printing processes to meet our customers' needs, utilizing a mixture of established and modern technologies to provide them with
end-to-end solutions across both printed and electronic media. Technological advances have increased both the speed and efficiency of traditional printing processes, but most
importantly have integrated print into a larger offering encompassing various parts of the internet, such as email and micro sites, and non-traditional printing processes, such as inline
co-mailing.

Through
the use of digital pre-media, the internet, and our own network we are able to link our manufacturing processes, whether print or new media, across our platform. This allows the
customer to benefit from high speed, efficiency and accuracy in our manufacturing processes, while we are able to locally deliver the product to the customer's desired end-use markets.

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. 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

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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. Migration to a complete portable data format, also known as PDF, simplifies and standardizes the process. We also believe that we have established one of
the industry's most 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
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 and larger customers to centralize the purchase of printing services.

Purchasing and Raw Materials

The principal raw materials used in our products are paper and ink. In 2009, we spent approximately $1.0 billion on raw materials. 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. Industry analysts consider most of the industry's markets to have excess capacity, and
competition is significant as the industry is still in the process of consolidating. Competition is based on a number of factors including price, quality, range of services offered, distribution
capabilities, customer service and availability of printing time on appropriate equipment.

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Seasonality of Our Business

Operations in the print business follow a seasonal pattern, 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
catalogue promotions.

Government Regulations  Environment

We are subject to various laws, regulations, permit requirements, contractual obligations, and government policies relating to the protection of the
environment, including, among other things, requirements relating to the generation, storage, transportation and disposal of solid waste and to releases of various substances into the environment,
including air emissions and wastewater discharges. 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 becomes 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. For example, we have been engaged in discussions with the U.S. Environmental Protection Agency concerning
compliance with the Stratospheric Ozone Protection provisions of the U.S. federalClean Air Actfound at 40 CFR Part 82 which
regulate the use of chlorofluorocarbons (CFCs) and hydro chlorofluorocarbons (HCFCs) that are used as refrigerants at many of our facilities. Those discussions have culminated in a verbal agreement
that is expected to lead to a written agreement that would result in increased capital and costs. Among other things, the Company has agreed to replace, retrofit or retire most of the regulated
refrigeration appliances at the U.S. plants. However, we do not anticipate that maintaining compliance with these or other existing environmental requirements 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 Information Form, 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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GENERAL DEVELOPMENT OF THE BUSINESS

Three-Year History

Events Leading Up to the Proceedings

In the last several years, QWI's financial performance suffered as a result of a combination of factors, including declining prices and sales volume
and a temporary disturbance caused by a major retooling of its printing operations initiated in 2002. The retooling program was aimed at upgrading QWI's equipment to reflect
up-to-date technology, including the development of new printing technologies, the upgrade of existing printing assets and the further development of integrated services, to
improve its efficiency and reduce costs. As part of the retooling program, QWI also closed, announced the closure of, or sold a total of, 27 facilities. By consolidating operations into fewer
but larger and more specialized plants, administrative costs were significantly reduced.

A
major component of the retooling program included the purchase of the latest generation web offset presses targeted towards the magazine, catalogue, retail and book platforms of QWI's
U.S. operations. These new presses were meant to further improve efficiency and meet the needs of both publishers and retailers. Under this retooling program, QWI installed 20 new
presses in its U.S. facilities. During this period, QWI permanently decommissioned or sold over 70 presses and relocated nearly 40 presses (excluding European operations). While
it substantially completed its retooling program in North America, and achieved, and even surpassed, its cost reduction objectives, QWI was unable to meet its forecasted earnings projections. Rather,
the combination of significant capital investments and continued operating losses in Europe resulted in increased financing needs.

In
late 2007, QWI repurchased certain outstanding notes that were sold in private placement transactions to various investors to avoid breaching certain financial covenants, while also facing a
reduction in amounts available under its syndicated credit facilities. These factors had a significant impact on QWI, and, accordingly, adversely affected its operations and financial position.

As
a result of the unsuccessful efforts to obtain new financing due mainly to adverse financial market conditions and an inability to conclude a proposed sale of its European operations, as well as
continued operational demands, by mid-January 2008, QWI was experiencing a severe lack of liquidity.

On
January 21, 2008 (the "Filing Date"), QWI obtained an order from the Quebec Superior Court granting creditor protection under theCompanies' Creditors
Arrangement Act(Canada) (the "CCAA") for itself and 53 U.S. subsidiaries (the "U.S. Subsidiaries" and, collectively with QWI, the
"Applicants"). On the same date, the U.S. Subsidiaries filed a petition under Chapter 11 of the 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 and the proceedings under Chapter 11 are hereinafter collectively referred to as the
"Proceedings". QWI's Latin American subsidiaries were not subject to the Proceedings.

Events During the Proceedings

An immediate effect of the Proceedings was the imposition of a stay of proceedings under Section 11 of the CCAA which, with limited
exceptions, enjoined the commencement or continuation of all collection efforts by creditors, the enforcement of liens against property of QWI and the continuation of litigation against it.

On
January 21, 2008, QWI entered into a senior secured superpriority debtor-in-possession credit agreement (the "DIP Credit Facility") between it and Quebecor
World (USA) Inc. ("QWUSA"), as borrowers, the guarantors party thereto, Credit Suisse, as administrative agent, initial issuing bank and

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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, Wachovia Bank, National Association, as documentation agent, and the initial lenders and the other lenders party thereto. The DIP financing
was comprised of both a revolving credit facility with sub-facilities for Canadian dollar borrowings, swing line loans (i.e. portions of the facility which the borrower may access
in a more expedient manner) and issuance of letters of credit for an aggregate maximum commitment of the DIP lenders of $400 million, bearing interest at variable rates and a
$600 million term loan, bearing interest at variable rates.

In
June 2008, QWI decreased its number of business divisions in the U.S. from six to three and eliminated redundant positions to allow it to better serve existing and new customers
through more streamlined and customer-driven operations. On June 16, 2008, QWI merged its U.S. Retail Insert, Catalogue, Sunday Magazine and Direct Mail divisions into a new integrated
U.S. Marketing Solutions Group to better serve the marketing and advertising needs of its customers in multiple markets including retail, direct marketing, Sunday magazine, agency and financial
services. As a result, the U.S. Marketing Solutions Group produced direct mail products, retail inserts, catalogues and Sunday Magazines in a coast-to-coast integrated
network of more than 20 facilities in the United States. This operating and sales structure allowed QWI to improve its operational efficiency and enhance its integrated product offering
to all its customers.

On
June 17, 2008, QWI integrated its U.S. Magazine, Book and Directory Divisions into the Publishing Services Group and merged its U.S. Pre-Media and Logistics
divisions into a single operating structure. The new Publishing Services Group streamlined its operations and improved services to better serve existing and new publishing customers.

The
enhanced U.S. operating structure comprising the three divisions  the U.S. Marketing Solutions Group, Publishing Services Group and
Pre-Media and Logistics Group  resulted in greater synergies, shared resources and faster decision-making with a focus on delivering complete
value-added solutions to two principal customer bases, multi-channel marketers and publishers.

On
June 26, 2008, QWI completed the sale of its European operations to Hombergh/De Pundert Group ("HHBV"), a subsidiary of Hombergh Holdings B.V. ("HHBV"), since renamed CirclePrinters
Holding B.V., a Netherlands-based investment group. At the time QWI sold its European operations, they consisted of 16 printing and related facilities employing approximately
3,500 people in Austria, Belgium, Finland, France, Spain and Sweden producing magazines, catalogues, retail inserts, direct mail products, books and directories. In consideration for the assets
sold, QWI received €52.2 million in cash at closing, and HHBV issued a €21.5 million five-year note bearing interest at 7% per year payable to
QWI. As a result of the divestiture, the Company has been able to remain focused on its core business in the Americas and reduce the operational risks associated with the uncertainty of the
long-term profitability of its European operations.

In
addition to the sale of its European operations, during the course of its reorganization, QWI continuously reviewed its business to seek ways to enhance its operating efficiency, consolidate
operations and dispose of unnecessary or underutilized assets. For example, during the Proceedings, QWI sold a property at 2325 Dandurand, Montreal, Canada, for $l,200,000 in connection
with the closure of the operations at that facility. In addition, on August 18, 2008, QWI sold its property at 975 Gladstone Avenue, Ottawa, Canada, to Broccolini Construction
(Ontario) Inc. for $3,350,000. For some years prior to the sale, QWI had not been using the Ottawa facility for its operations.

QWI
also undertook various restructuring initiatives to ensure that its facilities were producing optimal pressroom efficiencies and higher returns. During 2008, the North American workforce was
reduced by 2,953 employees, or 13.8%, mainly due to these restructuring initiatives. QWI reduced its workforce in most of its facilities, including its corporate offices, to align itself with
current market conditions.

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During
2008 and continuing in 2009, the Company undertook various other initiatives to adapt its cost structure to the rapidly changing economic environment including
the following:



During
the Proceedings, QWI also entered into significant new customer contracts. These include the following:



The Plan

In connection with the Proceedings, QWI developed a Canadian Plan of Reorganization and Compromise pursuant to the provisions of the CCAA
(the "Canadian Plan") and the U.S. Subsidiaries developed a plan of reorganization pursuant to the provisions of the Bankruptcy Code (the "U.S. Plan" and, together with the
Canadian Plan, the "Plan"). The Plan provided for the coordinated restructuring of the Applicants, the compromise of certain claims of certain of their respective creditors and a reorganization of
QWI's capital structure.

On
June 22, 2009, the creditors of the Applicants approved the Plan under both the CCAA and Chapter 11. On June 30, 2009, the Plan was sanctioned by the Quebec Superior Court, and
was

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confirmed
by the U.S. Bankruptcy Court on July 2, 2009. The Plan was implemented following various transactions that were completed on July 21, 2009 (the "Effective Date").
Accordingly, the Applicants emerged from bankruptcy protection and QWI was renamed and began operating as "World Color Press Inc." on the Effective Date.

The
implementation of the Plan on July 21, 2009 resulted in a substantial realignment of the interests in QWI between its existing creditors and shareholders as of the Filing Date. As a result,
the Company adopted fresh start accounting effective July 21, 2009 in accordance with Section 1625 "Comprehensive
Revaluation of Assets and Liabilities" of the Canadian Institute of Chartered Accountants Handbook ("CICA Handbook") under Canadian Generally Accepted Accounting Principles ("GAAP"). Fresh start
accounting requires resetting the historical net book value of assets and liabilities to fair value by allocating the entity's reorganization value of $1.5 billion to its assets and liabilities
in a manner consistent with Section 1581 "Business Combinations" of the CICA Handbook.

Following
implementation of the Plan, Worldcolor reorganized its capital structure. In this regard, the following securities have been (or will be issued) in exchange for $3.1 billion of
liabilities subject to compromise:



In
accordance with the terms of the Plan, the Common Shares, the Preferred Shares and the Warrants were issued in escrow as of the Effective Date pending the resolution of claims. The Preferred Shares
were issued with a nominal value of $8.00 per share. As of February 17, 2010, 65,230,691 Common Shares, 6,158,030 Series I Warrants and 6,158,030 Series II
Warrants have been released from escrow; all of the Preferred Shares have been released from escrow.

In
addition, cash payments of $100 million in satisfaction of certain claims were made to holders of QWI's senior secured debt, all of which were paid on the Effective Date. Also, the Company
will make payments of approximately $60 million in connection with secured, administrative, priority tax and small
convenience unsecured claims, of which $12 million was paid on the Effective Date and $3 million was paid prior to December 31, 2009.

The
implementation of the Plan also involved the following refinancing transactions:



Pursuant
to the Plan, on the Effective Date, QWI's then existing Multiple Voting Shares, Redeemable First Preferred Shares and Subordinate Voting Shares were cancelled for no consideration in
accordance with the Articles of Reorganization that were filed with the Quebec Superior Court as one of the steps to implement the Plan.

In
accordance with the Plan, claims for the recovery of amounts paid to the holders of certain senior unsecured notes and/or other creditors prior to the Filing Date as preferential or fraudulent
conveyances, whether arising under the Bankruptcy Code or similar state laws, including amounts

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received
by the Applicants on account of such claims prior to the Effective Date (such claims and amounts being collectively referred to as the "Avoidance Actions") were transferred to a trust
(the "Litigation Trust") created for the benefit of creditors, as specifically provided for therein. To facilitate the implementation of the Litigation Trust, the Plan required the Company to
fund a secured loan to the Litigation Trust in an amount of up to $5 million in order to pay for the costs and expenses of its administration as well as the prosecution of the Avoidance
Actions. The Litigation Trust will be funded as these costs and expenses are incurred by it. The loan is secured by a pledge in favour of the Company on the Avoidance Actions and all interests thereon
and other earnings, income or other assets of the Litigation Trust. The Company had funded $0.7 million of this secured loan as of December 31, 2009.

Events Following the Proceedings

In the early fall of 2009, Worldcolor announced that it had expanded its co-mail platform by opening an additional facility in Dyersburg,
Tennessee, representing Worldcolor's third strategically located co-mail facility in North America. Our trio of facilities in Tennessee, Illinois and New Jersey form a
regionally focused platform that reduces costly cross-country freight, increases processing capacity and boosts the overall efficiency of our co-mail network. By creating three regionally
located co-mail facilities in the Midwest, Northeast and Midsouth, we are able to shift co-mail capacity closer to customers' target markets. This expanded platform offers many
benefits to Worldcolor customers, including greater postal penetration, reduced cycle time and greater scheduling flexibility. Worldcolor believes that it is an industry leader in co-mail
capacity with nine SIM Products' co-mail machines in all.

In
late October 2009, Worldcolor and Mark Logic Corporation, a leading provider of software for information applications, announced the launch of a new online service: the Worldcolor Custom
Publishing Engine. Based on the award-winning MarkLogic Server, the application allows publishers to repurpose existing content into new, targeted publications. This improves speed to market and meets
the publishing industry's need for a digital solution that drives new revenues.

On
November 24, 2009, the U.S. Marketing Solutions Group, the U.S. Publishing Services Group and our Canadian manufacturing operations were joined into one North American
operation. This new structure is designed to streamline our operations to better serve our customers and to optimize the cost structure of our North American business. The restructuring is expected to
result in further synergies, shared resources and faster decision-making to serve our customers on a North American-wide basis.

To
better align our costs with current market conditions, in December 2009 we completed the closure of our Dallas, Texas and Olive Branch, Mississippi facilities.

Since
the Effective Date, Worldcolor also entered into new, significant customer contracts, including the following:



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Outlook

Global economic conditions affect our customers' businesses and the markets they serve. The credit crisis and global economic weakness have 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.

Despite
an uncertain economic environment, it is expected that volume levels, which recently dropped (mostly following the North American recession) will stabilize in 2010. However, 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 our innovative custom publishing engine, 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 as outlined above.

Although
Latin America also has been affected by the global economic weakness, with current and planned investments in new capacity, this segment's revenues are forecast to increase in line with
expected growth from an existing customer base.

In
January and February of 2010, the Company approved restructuring initiatives related to the closure of four North American facilities. The closures are expected to be completed within the first
half of 2010.

On
January 25, 2010, Quad/Graphics, the largest privately-held printer in the United States, and Worldcolor entered into a definitive Arrangement Agreement pursuant to which,
subject to the terms and conditions set forth therein, Worldcolor will amalgamate with a subsidiary of Quad/Graphics. The expanded Quad/Graphics will have nearly 30,000 employees serving
customers in the United States, Canada, Latin America and Europe. The Quad/Graphics Transaction is expected to close in the summer of 2010. Its completion is conditional on, among other things,
shareholder approvals of Worldcolor and Quad/Graphics and regulatory and court approvals.

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OUR DIRECTORS AND OFFICERS

Our Directors

The Board of Directors of the Company is responsible for supervising the management of the Company's business and affairs, with the objective of
increasing shareholder value. The Board is responsible for the sound governance of the Company and, as such, must effectively and independently supervise the activities and business of the Company
which are conducted on a daily basis by management. The Board may delegate certain tasks to its committees. Such delegation does not relieve the Board from its overall responsibilities with regard to
the management of the Company.

Our
Board of Directors is currently composed of eight members. The term of office of each director expires upon the election of his successor unless the director resigns from office or his office
becomes vacant by death, removal or other cause. The following table sets forth, as at March 1, 2010, the name, place of residence and principal occupation of each director, the year of the
director's appointment and the committees on which the director serves as a member.

The
following information has been provided to us by the persons concerned.

Name, Place of Residence and Committee

Principal Occupation and Position with Worldcolor

Director
SinceMark Alan Angelson
New York, United States

Chairman of the Board, Worldcolor
Chief Executive Officer, Worldcolor


2009Michael Brennan Allen(HRCC)
Illinois, United States

Corporate Director


2009Raymond John Bromark(AC)
Florida, United States

Director, CA, Inc. (computer software corporation)
Chairman of the Audit Committee, Worldcolor


2009Gabriel de Alba(AC)
Ontario, Canada

Managing Director and Partner, Catalyst Capital Group Inc. (private equity investment firm)


2009James Joseph Gaffney(AC)
California, United States

Corporate Director


2009Jack Kliger(HRCC)
New York, United States

Consultant,TV Guide Magazineand OpenGate Capital (private equity investment firm)


2009David Lyman McAusland(AC)
Quebec, Canada

Partner, McCarthy Tétreault LLP (law firm)


2009Thomas O'Neal Ryder(HRCC)
Connecticut, United States

Corporate Director
Chairman of the Human Resources and Compensation Committee, Worldcolor


2009


(AC)
Member of our Audit Committee. 
(HRCC) Member of our Human Resources and Compensation Committee.


Below
is a brief biography of each of our directors:

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Our Senior Officers

The following table shows the names of our senior officers, their places of residence and their positions within the Company as at
March 1, 2010.

Name and Place of Residence

Position with Worldcolor/Principal OccupationMark A. Angelson
New York, United States

Chairman of the Board and Chief Executive OfficerAndrew P. Hines
New Jersey, United States

Executive Vice President and Chief Financial OfficerJohn V. Howard
Colorado, United States

Executive Vice President and Chief Legal OfficerBen Schwartz
Quebec, Canada

Executive Vice President, Human ResourcesRobert L. Sell
Connecticut, United States

Executive Vice President and Chief Information OfficerBrian Freschi
Minnesota, United States

President, North AmericaGuy Trahan
Buenos Aires, Argentina

President, Latin AmericaDan Scapin
New Jersey, United States

President, Logistics and PremediaPhilippe Cloutier
Quebec, Canada

President, CanadaDavid Blair
Ontario, Canada

Senior Vice President, Operations, Technology and Continuous ImprovementLorien O. Gallo
New Jersey, United States

Senior Vice President, Office of the ChairmanSylvain Levert
Quebec, Canada

Senior Vice President, Corporate ServicesJo-Ann Longworth
Quebec, Canada

Senior Vice President, Chief Accounting Officer


All
of our officers have held the positions and principal occupations indicated above for the past five years, except as otherwise indicated below:

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As
of December 31, 2009, to the knowledge of the Company and according to the information received, our directors and officers, as a group, did not beneficially own or exercise control or
direction over any of our Common Shares or Preferred Shares.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or executive officer of the Company or a shareholder holding a sufficient number of securities to affect materially the control of the
Company is, or within the ten years prior to the date hereof has been, a director or executive officer of any company (including the Company) that: (a) while that person was acting in the
capacity of director, chief executive officer or chief financial officer was the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under
securities legislation, for a period of more than 30 consecutive days; (b) after the director or executive officer ceased to be a director, chief executive officer or chief financial
officer, was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation for a period of more than 30 consecutive
days, which order resulted from an event that occurred while the person was acting in that capacity; or (c) while that person was acting in that capacity or within a year of that person ceasing
to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with
creditors or had a receiver, receiver manager or trustee appointed to hold its assets, except as follows:



No
director or executive officer of the Company or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company has, within the ten years
prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise
with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, officer or shareholder.

Conflict of Interest

To the best of our knowledge, and other than as disclosed in this Annual Information Form, in the notes to the Company's financial statements and its
Management's Discussion and Analysis, there are

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no
known existing or potential conflicts of interest between the Company and any director or officer of the Company, and that certain of the directors and officers serve as directors and officers of
other public companies and therefore it is possible that a conflict may arise between their duties as a director or officer of the Company and their duties as a director or officer of such other
companies.

The
directors and officers of the Company are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosure by directors of
conflicts of interest and the Company will rely upon such laws in respect of any directors' and officers' conflicts of interest or in respect of any breaches of duty by any of its directors or
officers. All such conflicts will be disclosed by such directors or officers in accordance with the CBCA and they will govern themselves in respect thereof to the best of their ability in accordance
with the obligations imposed upon them by law.

OUR AUDIT COMMITTEE

Charter of the Audit Committee

The Audit Committee is a standing committee appointed by the Board. The Audit Committee is established to fulfil applicable public corporation
obligations respecting audit committees and to assist our Board in fulfilling its oversight responsibilities with respect to financial reporting, including its responsibility to oversee:
(i) the integrity of the Company's financial statements and financial reporting process, including the audit process and the Company's internal accounting controls and procedures and compliance
with related legal and regulatory requirements; (ii) the qualifications and independence of the external auditors; and (iii) the work of the Company's financial management, internal
auditors and external auditors in these areas. The Audit Committee assumes certain responsibilities relating to pension matters, some of which have been delegated to local management committees. The
Audit Committee provides an open avenue of communication between the external auditors, the internal auditors, the Board and management.

The
Audit Committee is responsible for reviewing annual and quarterly financial statements and 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 holds in camera sessions after each regular meeting and more often, if it deems it necessary.

The
Audit Committee's role and oversight responsibility is described in the Charter of the Audit Committee, which is available on the Company's website at www.worldcolor.com under the "Investors" Tab
and is attached as Exhibit A to this Annual Information Form.

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Composition of the Audit Committee

Our Board of Directors believes that the composition of the Audit Committee reflects a high level of financial literacy and expertise.
Messrs. Raymond J. Bromark (Chair), Gabriel de Alba, James J. Gaffney and David L. McAusland are the current members of our Audit Committee, each of whom is independent within the meaning of
National Instrument 52-110 Audit Committees("NI 52-110"). Our Board of
Directors has also determined that each of the members of the Audit Committee is financially literate within the meaning of NI 52-110. Mr. Bromark is our "audit committee
financial expert" as he has accounting or related financial expertise.

Relevant Education and Experience

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

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Reliance on Certain Exemptions

We have not used or relied upon any exemption pursuant to NI 52-110 at any time during the most recently completed
financial year.

Pre-Approval Policies and Procedures

The Charter 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 Chairman of the Audit Committee may retain our external auditors for certain audit and non-audit services, provided, however, that the external auditors'
estimated fees may not exceed $100,000 per project. All projects that are expected to entail fees of over $100,000 must be approved by the Audit Committee either at its next meeting or by way of
written resolution. 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 is reviewed by the
Audit Committee on an annual basis.

At
no time since the commencement of the most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by
the Board.

External Auditor Service Fees

KPMG LLP served as our independent registered public accounting firm for the fiscal years ended December 31, 2009, 2008
and 2007.

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In
addition to performing the audit of our consolidated financial statements, KPMG LLP provided us with other services and 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, 2009

Financial Year Ended
December 31, 2008Audit Fees(1)

$
5,486,000

$
6,930,000Audit-related Fees(2)

$
1,755,000

$
1,418,000Tax Fees(3)

$
2,155,000

$
2,483,000All Other Fees(4)

$
211,000

$
161,000Total Fees:

$
9,607,000

$
10,992,000


(1)Audit Feesconsist of fees billed for the annual integrated audit and quarterly reviews of our annual and
quarterly consolidated financial statements or services that are normally provided by the external auditors in connection with statutory and regulatory filings or engagements. They also include fees
billed for other audit services, which are those services that only the external auditors reasonably can provide, and include the provision of comfort letters and consents, the consultation concerning
financial accounting and reporting of specific issues and the review of documents filed with regulatory authorities.(2)Audit-related Feesconsist of fees billed for assurance and related services that are traditionally
performed by the external auditors, and include consultations concerning financial accounting and reporting standards on proposed transactions; due diligence or accounting work related to business
combinations, and employee benefit plan audits.(3)Tax Feesinclude fees billed for tax compliance services, including the preparation of original and amended
tax returns and claims for refund; tax consultations, such as assistance in connection with tax audits and appeals; tax advice related to mergers and acquisitions; requests for rulings or technical
advice from taxing authorities; tax planning services; and consultation and planning services.(4)All Other Feesinclude fees billed for training and translation services, as well as advice with respect to
our internal controls over financial reporting and disclosure controls and procedures.


LEGAL PROCEEDINGS

From time to time, we are involved in various legal proceedings arising in the ordinary course of business. None involves a claim for damages in an
amount, exclusive of interest and costs, that exceeds 10% of the current assets of the Company.

RISK FACTORS

We urge all of our current and potential investors to carefully consider the risks described in the sections referred to below as well as the other
information contained in this Annual Information Form and other information and documents filed by us with the appropriate securities regulatory authorities before making any investment decision with
respect to any of our securities. The risks and uncertainties described in such sections 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 or results of operations
could be materially adversely affected.
Such risk factors should be considered in connection with any forward-looking statements in this document and with the cautionary statements contained under "Forward-Looking Statements", below.

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Risks Relating to the Company's Financial Condition

The Company's actual financial results may vary significantly from the projections filed with the U.S. Bankruptcy Court.

In connection with the Plan process, QWI was required to prepare projected financial information to demonstrate to the U.S. Bankruptcy Court
the feasibility of QWI's ability to continue operations upon emergence from bankruptcy protection. QWI filed projected financial information with the U.S. Bankruptcy Court most recently on
May 18, 2009 as part of the Disclosure Statement approved by the U.S. Bankruptcy Court (the "Disclosure Statement"). The projections reflect numerous assumptions concerning
anticipated future performance and prevailing and anticipated market and economic conditions that were and continue to be beyond management's control and that may not materialize either in whole or in
part. Projections are inherently subject to uncertainties and to a wide variety of significant business, economic and competitive risks. The Company's actual results will vary from those contemplated
by the projections for a variety of reasons, including the fact that given the Company's emergence from bankruptcy protection, the Company has applied Section 1625 "Comprehensive Revaluation of
Assets and Liabilities" of the CICA Handbook regarding fresh start accounting. As indicated in the Disclosure Statement, the projections applied fresh start accounting provisions. However, these
projections were limited by the information available as of the date of the preparation of the projections. Therefore, variations from the projections may be material. The projections have not been
incorporated by reference into this Annual Information Form and neither these projections nor any version of the Disclosure Statement should be considered or relied upon in connection with the
purchase of the Company's securities.

The Company's degree of leverage may limit its financial and operating activities.

The Company has significant indebtedness as a result of the new Credit Facility and obligations of the Company that were not extinguished in the
Proceedings. The substantial indebtedness of the Company could adversely affect its financial health and limit its operations. Further, the Company's historical capital requirements have been
considerable and its future capital requirements could vary significantly and may be affected by general economic conditions, industry trends, performance and many other factors that are not within
its control. The Company's substantial level of indebtedness has, in the past, had important consequences, including: limiting its ability to borrow additional amounts for working capital, capital
expenditures, debt service requirements, execution of its growth strategy and other purposes; limiting its ability to use operating cash flow in other areas of its business because it must dedicate a
substantial portion of these funds to service the debt; increasing its vulnerability to general adverse economic and industry conditions; limiting its ability to capitalize on business opportunities
and to react to competitive pressures and adverse changes in government regulation; limiting its ability or increasing the costs of refinancing indebtedness; and limiting its ability to enter into
marketing, hedging, optimization, and trading transactions by reducing the number of counterparties with whom it can transact as well as the volume of those transactions. These consequences, and
others, may affect the Company's business and operations. The Company cannot ensure that it will be able to obtain financing in the future, or that it will be able to obtain financing at cost and on
other terms necessary for the Company to meet its projections. The Company cannot ensure that it will not experience losses in the future.

The
Company's profitability and ability to generate cash flow will likely depend upon its ability to successfully implement its business strategy. However, the Company cannot ensure that it will be
able to accomplish these results.

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The covenants in the Credit Facility restrict the Company's activities and require it to meet or maintain various financial ratios.

The Credit Facility contains a number of covenants and other provisions that restrict the Company's ability to engage in various financing
transactions and operating activities, including but not limited to: incur additional debt; prepay, redeem or repurchase indebtedness; pay dividends or repurchase shares of capital stock; make loans
or investments; create liens; sell assets; acquire businesses; enter into sale and lease-back arrangements; enter into mergers and
consolidations; change the nature of its businesses; and amend organizational documents, debt documents and other material agreements. The Credit Facility also requires the Company to maintain various
financial ratios. The ability of the Company to meet these financial covenants and ratios may be affected by events beyond its control. If the Company defaults under any of these requirements, the
lenders could declare all outstanding borrowings, accrued interest and fees to be due and payable. If that were to occur, there can be no assurance that the Company would have sufficient liquidity to
repay or be able to refinance this indebtedness or any of its other debt.

The Company's financial results may be volatile and may not reflect historical trends.

The Company expects that its financial results may continue to be volatile following its emergence from the Proceedings, as asset impairments, asset
dispositions and restructuring activities, as well as continuing global economic uncertainty may significantly affect it. As a result, the Company's historical financial performance is likely not
indicative of its financial performance post-consummation.

Because the Company's consolidated financial statements reflect fresh start accounting adjustments starting in the third quarter of 2009, and because of the effects of the
transactions that became effective pursuant to the Plan, financial information in future consolidated financial statements will not be comparable to the Company's financial information from
prior periods.

On the Company's emergence from creditor protection under the CCAA and Chapter 11, the Company adopted fresh start accounting in accordance
with Section 1625 "Comprehensive Revaluation of Assets and Liabilities" of the CICA Handbook pursuant to Canadian GAAP and Position 90-7 "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code" pursuant to U.S. GAAP. Under fresh start accounting, the Company undertook a comprehensive re-evaluation of its assets and liabilities
based on the estimated enterprise value of $1.5 billion as established in the Plan. Enterprise value is generally defined to be the Company's estimated fair value at July 31, 2009, less
cash and cash equivalents. As a result of fresh start accounting, Worldcolor became a new entity for financial reporting purposes. Accordingly, the consolidated financial statements of the Company on
or after August 1, 2009 will not be comparable in many respects to the Company's statement of financial position and statement of operations for periods prior to the adoption of fresh start
accounting and prior to accounting for the effects of the Plan.

Risks Relating to Our Business

We operate in a highly competitive industry.

The industry in which we operate is highly competitive. Competition is based on a number of factors including price, quality, range of services
offered, distribution capabilities, customer service, availability of printing time on appropriate equipment and state-of-the-art technology. The printing industry,
with nearly 30,000 companies in the United States, is highly fragmented. Although there has been industry consolidation, particularly in the past decade, the largest 400 printers
still represent only 35% of the market, according to the Printing Impressions PI400 and the Printing Industries of America/Graphic Arts Technical Foundation 2008 Print Market Atlas. We compete for
commercial business not only with large and mid-sized printers, but also with smaller regional printers. In certain circumstances, due

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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 be preferred by customers in such regions.
In the recent years, 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 effect on the results of our operations, financial condition
or cash flows and could require changes to the way we conduct our business or a reassessment of the strategic alternatives involving our operations.

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 materially adversely affect our results of operations, 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 results of operations, financial
condition and cash flows may be adversely affected.

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 catalogue promotions. Within any year, this seasonality could adversely affect our cash flows and results of operations.

Pricing and demand for our printing services may fluctuate significantly based on factors outside of our control.

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 and the effects of these conditions on our customers' businesses, may adversely affect our results
of operations.

The challenges posed by the economy throughout 2009 are expected to remain in 2010, impacting the Company's results of operations in 2010. The
general economic difficulties continue to affect our customers' businesses and the markets they serve. Economic difficulties 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 results of

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operations
and to make decisions about future investments. Delays or reductions in customers' spending are expected to have an adverse effect on demand for the Company's products and services, and
consequently its results of operations, financial position and cash flow and those adverse affects could be material. Economic downturns may affect the Company's credit ratings, which, if downgraded,
could impact its ability to borrow and cause its borrowing costs to increase.

We will be required to make capital expenditures to maintain our platforms and processes 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 platforms and processes 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 results of operations, 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.

We may be adversely affected by increases in our operating costs, including the cost and availability of raw materials, labour-related, and fuel and other energy costs and
freight rates.

We use paper and ink as our primary raw materials. The price of such raw materials has been volatile over time and may continue to cause significant
fluctuations in our net sales and we may 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, but less frequently been able to pass along the cost of ink and energy, to many of our customers. If we are unable to pass along increases
in the cost of paper, ink or energy to our customers, future increases in these items would adversely affect our margins and profits. If we are able to pass along increases in these costs and the
price of our services increases as a result, customer demand could be adversely affected and thereby negatively impact our financial performance.

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. Recently, a number of paper manufacturers have been experiencing serious financial difficulties, and some have filed for creditor protection,
which could disrupt or limit the Company's paper supplies.

In
addition, Worldcolor may not be able to resell waste paper and other by-products or the prices received for their sale may decline substantially.

Labour
represents a significant component of our cost structure. Increases in wages, salaries and benefits, such as medical, dental, pension and other postretirement benefits, may affect our financial
performance. Changes in interest rates, investment returns or the regulatory environment may affect 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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Freight
rates and fuel costs represent a significant component of our cost structure. If we are not able to pass along a substantial portion of increases in freight rates or in the price of fuel,
these increases
could adversely affect operating costs or customer demand and thereby negatively impact our financial performance.

Worldcolor has significant liabilities with respect to its defined benefit pension plans and other postretirement benefits that could grow in the future and cause it to
incur additional costs.

Worldcolor sponsors defined benefit pension plans for employees in the United States and Canada. The majority of the plans' assets are held in
North American and global equities and fixed income or debt securities. The asset allocation as of December 31, 2009 was approximately 62% equities, 35% debt securities and 3% other. Worldcolor
also maintains postretirement benefits for its employees.

Following
the recent declines in global equity markets, Worldcolor had, as of December 31, 2009, underfunded pension and other postretirement benefit liabilities of approximately
$310 million for its U.S. plans and other postretirement benefits. Under current U.S. pension law, pension funding deficits are generally required to be funded over a
seven-year period. Over the next two financial years, under current U.S. pension law, the contributions required to the U.S. plans are expected to total approximately
$102 million.

Following
the recent declines in global equity markets, Worldcolor had, as of December 31, 2009, an unfunded liability for pension and other postretirement benefits of approximately
Cdn$76 million in its Canadian plans and other postretirement benefits. Under current Canadian legislation, pension solvency deficits are required to be funded over a ten-year
period. Under the current funding rules in Canada, contribution requirements for the Canadian plans are expected to be approximately Cdn$32 million over the next two financial years.

Worldcolor's
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, Worldcolor's potential pension funding obligations. Any
significant increase in Worldcolor's required contributions could have a material adverse impact on its business, financial condition, results of operations and cash flows.

In
addition to its single employer defined benefit plans, Worldcolor also participates in multi-employer pension plans in the United States and Canada. Following the recent declines in the
global equity markets, the financial condition of these plans has been negatively affected. Worldcolor has received notice that certain plans in which it participates are in "Critical Status", as
defined in Section 432 of the U.S.Internal Revenue Code of 1986, as amended. As a result, Worldcolor may be subject to increased
contribution rates associated with these plans or other multi-employer pension plans suffering from declines in their funding levels. Furthermore, should Worldcolor undergo a complete or partial
withdrawal from any of its plans, it would be subject to a withdrawal liability under applicable law. Any actual liability to which Worldcolor may be exposed which may be significant to our operations
depends on the timing and extent of Worldcolor's withdrawal, the financial condition of the plans at that time, the discount rate used to value the future stream of required payments by Worldcolor,
whether the other contributing employers also withdrew and other relevant factors. These plans are accounted for as defined contribution plans. If in the future, Worldcolor withdraws from
multi-employer plans, additional liabilities would need to be recorded. The liabilities are only recorded in the period the withdrawal is made.

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

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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.

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

As of February 10, 2010, we employed approximately 16,000 people in Canada and the United States, of which approximately 34% are
represented by a labour organization. The Company had 36 collective bargaining agreements in Canada and the United States as of February 10, 2010. As of February 10, 2010
the Company employed approximately 2,400 people in Latin America, the majority of which are either governed by agreements that apply industry-wide, by a collective agreement or
through works councils or similar arrangements.

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

On
May 5, 2009, various U.S. subsidiaries of Worldcolor entered into a memorandum of understanding with the labour organizations representing certain of their employees in the
United States. The memorandum of understanding memorialized wage and benefit concessions from such employees and is due to expire on December 31, 2010. Worldcolor's US subsidiaries'
current intent is to negotiate with the appropriate labour organizations so that the expiration of the memorandum of understanding does not have a negative impact on the Company's labour costs.
Depending on the results of such negotiations, the wage and benefit concessions may expire and, in such event, would have a negative effect on the labour costs of the Company.

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

We are exposed to market risks associated with fluctuations in interest rates, foreign currency exchange rates and commodity prices. Because a
portion of our operations are outside the United States, significant revenues and expenses are denominated in local currencies. Although operating in local currencies may limit the impact of
currency rate fluctuations on the results of operations of our non-U.S. subsidiaries and business units, fluctuations in such rates may affect the extent to which these results are
reflected in our financial statements. To the extent revenues and expenses are not in the applicable local currency, we may enter into foreign currency forward contracts to hedge the currency risk.
There can be no assurance, however, that our efforts at hedging will be successful. There is always a possibility that attempts to hedge currency risks will lead to even greater losses
than predicted.

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Upon exiting the Proceedings, our Financial Risk Management Policy was reinstated. Consequently, we resumed our hedging strategy in December 2009 and are in compliance
with our policy regarding market risks associated with movements in foreign currency exchange rates, interest rates and commodity prices. Nonetheless, Worldcolor's Financial Risk Management Policy
does not hedge all exposure to market risks and therefore, we are partially exposed to remaining market risks. We are exposed to risks of loss in the event of non-performance by our
customers. Some of our customers may be highly leveraged or otherwise subject to their own operating and regulatory risks. Even if our credit review and analysis mechanisms work properly, we may
experience financial losses in our dealings with other parties. Any increase in the non-payment or non-performance by our customers could adversely affect our results of
operations and financial condition.

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 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,
leaks and other releases. In the event of a release, we are also subject to environmental regulation requiring an appropriate response to the event. Permits are required for the operation of certain
of our businesses, and these permits are subject to renewal, modification and, in some circumstances, the possibility of 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, to the extent not precluded by applicable laws, 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. While
the Company is not a large emitter of greenhouse gases, laws under consideration to regulate greenhouse gas emissions could have ramifications on our operations. In addition, failure to comply with
any environmental regulations or an increase in regulations could adversely affect our results of operations 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 Proceedings and the events since then have triggered impairment tests for the Company's property, plant and
equipment, and goodwill impairment charges. The Company may be required to take additional write-downs on the value of its long-lived assets. In the

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event
the Company is required to take additional asset write-downs, its financial results as well as the trading prices of the 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 the rules and regulations to which our customers are subject may affect demand for the Company's products and services.

Many of the Company's customers are subject to rules and regulations requiring certain printed or electronic communications, governing the form of
such communications, and protecting the privacy of consumers. Changes in these regulations may affect our customers' business practices and could reduce demand for printed products and related
services. Changes in such regulations could eliminate the need for certain types of printed communications altogether or such changes may affect the quantity or format of printed communications.

Changes in postal rates, postal regulations and postal services may adversely affect 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 and
types of mailings that our customers are willing to mail. Any resulting decline in print volumes mailed could have an adverse effect on our business. Any change in the current service levels provided
by the postal service could impact the demand that customers have for print services. The United States Postal Service has reported net losses in the last three fiscal years and has estimated a
net loss for its current fiscal year and, as a result, may come under increased pressure to adjust its postal rates and service levels.

We are subject to additional reporting requirements under applicable Canadian securities laws and the Sarbanes-Oxley Act in the United States. We can provide no
assurance that we will at all times in the future be able to report that our internal controls over financial reporting are effective.

As a public company, we are required to comply with Section 404 of the Sarbanes-Oxley Act ("Section 404") and National
Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, and we
have to obtain an annual attestation from our independent auditors regarding our internal control over financial reporting. 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 U.S. Securities and Exchange Commission ("SEC") and Public Company Accounting Oversight Board rules and regulations. As a public company, we are required to report,
among other things, control deficiencies that constitute material weaknesses or changes in internal controls that, or that are reasonably likely to, materially affect internal controls over financial
reporting. 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 Company's annual financial statements will not be prevented or detected on a timely basis. If we fail to comply with the requirements of Section 404, Canadian requirements
or report a material weakness, we

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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.

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, the Company may be unable to attract and
retain additional qualified executives as needed in the future.

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 8% of our revenues for the year ended December 31, 2009. 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 depended, and may continue to depend, in
part, upon acquisitions, such as the proposed Quad/Graphics Transaction, 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.

Anti-take-over provisions could negatively affect the Company's shareholders.

The Company has recently adopted the Rights Plan, discussed below under "Description of Capital
Structure  Shareholder Rights Plan". The provisions of the Rights Plan could make it more difficult for a third party to acquire control of the Company even if
an acquisition might be in the best interest of the shareholders of the Company.

U.S. investors may be unable to enforce certain judgments.

Worldcolor is a corporation existing under the CBCA. A number of the Company's directors and officers, as well as certain of the experts named in
this Annual Information Form, are residents of Canada or other jurisdictions outside of the United States, and a significant portion of the Company's assets are located outside the
United States. As a result, it may be difficult for a U.S. investor to effect service within the United States upon the Company or upon such directors, officers and experts.
Execution by U.S. courts of any judgment obtained against the Company, any of the Company's directors or officers or any experts named in this Annual Information Form in U.S. courts
would be limited to the assets of such directors, officers or experts, as the case may be, located in the

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United States.
It may also be difficult for holders of securities who reside in the United States to realize in the United States upon judgments of courts of the
United States predicated upon civil liability and the civil liability of the Company's directors, officers and experts under the U.S. federal securities laws.

Risks Relating to the Quad/Graphics Transaction

The Arrangement Agreement limits Worldcolor's ability to pursue alternatives to the transaction.

The Arrangement Agreement contains provisions that make it more difficult for Worldcolor to sell its business to a party other than Quad/Graphics.
These provisions include the general prohibition on Worldcolor taking certain actions that might lead to or otherwise facilitate an acquisition proposal and the requirement that Worldcolor pay
Quad/Graphics a termination fee of $40 million or reimburse Quad/Graphics for up to $20 million of its costs incurred in connection with the Quad/Graphics Transaction, if the Arrangement
Agreement is terminated in specified circumstances.

These
provisions might discourage a third party that might have an interest in acquiring all or a significant part of the stock, properties or assets of Worldcolor from considering or proposing that
acquisition, even if that party were prepared to pay consideration with a higher per share value than the current proposed Quad/Graphics Transaction consideration.

The announcement and pendency of the Quad/Graphics Transaction could have an adverse effect on Worldcolor's business, financial condition, results of operations or business
prospects and on Worldcolor's stock price.

The announcement and pendency of the Quad/Graphics Transaction could disrupt Worldcolor's business in the following ways,
among others:

Any
of these matters could adversely affect the business, financial condition, results of operations or business prospects of Worldcolor and Worldcolor's stock price.

Failure to complete the Quad/Graphics Transaction could negatively impact the stock price and the future business and financial results of Worldcolor.

If the arrangement is not completed, the ongoing business of Worldcolor may be adversely affected and, without realizing any of the benefits of
having completed the arrangement, Worldcolor will be subject to a number of risks, including the following:

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DESCRIPTION OF CAPITAL STRUCTURE

Our Capital Structure

Authorized Share Capital

The Company is authorized to issue an unlimited number of Common Shares and 12,500,000 Preferred Shares. 10,723,019 Series I
Warrants and 10,723,019 Series II Warrants are authorized to be issued under the Warrant Indenture (as defined below).

Common Shares

Holders of Common Shares are entitled to one vote per share at meetings of shareholders of Worldcolor, to receive dividends if, as and when declared
by the Board of Directors and to receivepro ratathe remaining property and assets of Worldcolor upon its liquidation, dissolution or
winding-up, subject to the rights of the preference shares having priority over Common Shares.

Preferred Shares

Holders of the Preferred Shares are generally entitled to vote on all shareholder matters with holders of the Common Shares on an "as converted"
basis and are entitled to elect up to two additional Board members upon the occurrence of certain triggering events.

Holders
of Preferred Shares are entitled to receive fixed preferential cumulative cash dividends, which accrue on the Preferred Shares at a basic rate of 10% per annum payable quarterly. The
applicable dividend rate on the Preferred Shares escalates based on certain triggering events up to a maximum rate of 19% per annum, the most significant of which is a 5% increase to an annualized
dividend rate of 15% upon non-payment of the cash dividends in any given quarter, with the rate reverting to 10% per annum once the Company pays in full its next quarterly dividend on the
Preferred Shares as well as all accrued and unpaid dividends.

The
Preferred Shares, including any cumulative unpaid dividends, may be converted at any time at the option of the holder (a) during the first five years following the Effective Date, on a
one-for-one basis (subject to certain adjustments, including upon the occurrence of certain trigger events requiring an increase in the applicable conversion ratio) into Common
Shares based upon a Common Share price of $8.00 per share and (b) after the fifth anniversary of the Effective Date, into a variable number of Common Shares based upon the volume-weighted
average trading price of the Common Shares on the Toronto Stock Exchange (the "TSX") during a 60-day reference period (subject to adjustment).

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The
Preferred Shares are redeemable at any time at the option of the Company, subject to a holder's right, during the first five years following the issuance of the Preferred Shares, to opt to convert
its Preferred Shares (including any cumulative unpaid dividends) into Common Shares at the applicable ratio instead of having such shares redeemed. In addition, subject to applicable law and
restrictions in the Company's Credit Facility, the Company is required either to (a) make mandatory quarterly redemptions of Preferred Shares with any excess cash as permitted under the Credit
Facility proportionate to repurchases of Unsecured Notes or (b) permanently increase the dividend rate applicable to the Preferred Shares by 2% per annum. The redemption and liquidation price
of the Preferred Shares is $8.00 per share plus all accrued and unpaid dividends, subject to adjustment. The Company's option to redeem is also contingent on the prior repayment of specified amounts
under the Credit Facility. There is no fixed maturity date for the Preferred Shares.

Holders
of Preferred Shares are entitled to receive, upon liquidation, dissolution or winding-up of the Company, an amount equal to the greater of (a) the aggregate of
(i) the original issuance price, plus (ii) an amount equal to all cash dividends, if any, accrued and unpaid thereon and (b) the amount that such holders would be entitled to
receive if all Preferred Shares had been converted into Common Shares at the applicable rate (the "Liquidation Amount"). The Liquidation Amount shall be paid to the holders of Preferred Shares
before any amount shall be paid by the Company or any assets or funds of the Company shall be distributed to holders of Common Shares.

Warrants

The Warrants are exercisable at an exercise price of $0.01 for an equal number of Common Shares, subject to the volume-weighted average trading
price, during a 30-day period, of the Common Shares being greater than or equal to $13.00 for Series I Warrants and greater than or equal to $16.30 for Series II Warrants. In
addition, the Warrants become exerciseable in the event of a change of control if the "effective price" of the transaction consideration per Common Share to be received (as determined by the
Board of Directors in accordance with the Warrant Indenture) is greater than or equal to the threshold price. (See also "Our Material
Contracts  Arrangement Agreement".) The Warrants expire on July 20, 2014.

Ratings

As of the date of this Annual Information Form, the Company has been assigned credit ratings of B2 with a stable outlook by Moody's Investors
Service, Inc. ("Moody's") and B+ (on CreditWatch positive) by Standard & Poor's Ratings Services ("S&P").

Issuer
credit ratings are current opinions regarding the issuer's overall financial capacity (its creditworthiness) to pay its financial obligations. These opinions focus on the issuer's
capacity and willingness to meet its financial commitments as they come due. They do not apply to any specific financial obligation, and do not take into account the nature of and provisions of the
obligation, its standing in bankruptcy or liquidation, statutory preferences or the legality and enforceability of the obligation. They also do not take into account the creditworthiness of the
guarantors, insurers or other forms of credit enhancement on the obligation.

Moody's
credit ratings are on a long-term debt rating scale that ranges from Aaa to C, which represents the range from highest to lowest quality of such securities rated. A rating of B by
Moody's is assigned to debt securities that are considered speculative and are subject to high credit risk. Moody's applies numerical modifiers 1, 2 and 3 in each generic rating classification
from Aa
through Caa. The modifier 1 indicates that the issue ranks in the higher end of its generic rating category, the modifier 2 indicates a mid-range ranking and the modifier
3 indicates that the issue ranks in the lower end of its generic rating category. A Moody's rating outlook is an opinion regarding the likely direction of a rating over the medium term.

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S&P's
credit ratings are on a long-term debt rating scale that ranges from AAA to D, which represents the range from highest to lowest quality of such securities rated. According to the
S&P rating system, an obligor rated B is more vulnerable than the obligors rated BB, but the obligor currently has the capacity to meet its financial commitments. Adverse business, financial or
economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitments. The ratings from AA to CCC may be modified by the addition of a plus (+) or minus
(-) sign to show relative standing within the major rating categories. CreditWatch with positive implications means that the ratings could be raised or affirmed depending on the outcome of
S&P's review. S&P has indicated that our ratings will remain on CreditWatch with positive implications until such time as the Quad/Graphics Transaction is completed and our existing debt is either
repaid or refinanced or the Quad/Graphics Transaction is terminated.

Ratings
are intended to provide investors with an independent assessment of the credit quality of an issue or issuer of securities and do not speak to the suitability of particular securities for any
particular investor. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the rating organization. There is no
assurance that any rating will remain in effect for any given period of time or that any rating will not be withdrawn or revised entirely by a rating agency at any time if in its judgment
circumstances so warrant. Prospective investors should consult the rating agencies with respect to the interpretation and implications of ratings.

Issued and Outstanding Securities

As at March 1, 2010, there were 73,285,000 Common Shares, 12,500,000 Preferred Shares, 10,723,019 Series I
Warrants and 10,723,019 Series II Warrants issued and outstanding.

Escrowed Securities

The following table sets forth certain information as of March 1, 2010 with respect to the securities of the Company that are held
in escrow:

Designation of Securities(1)

Number of Securities
Held in Escrow

Percentage of
Securities OutstandingCommon Shares

8,054,309

10.99%Series I Warrants

4,564,989

42.57%Series II Warrants

4,564,989

42.57%


(1)The
securities of the Company are held in escrow with Computershare Trust Company of Canada ("Computershare") pursuant to an escrow agreement dated as of
July 21, 2009 between the Company and Computershare. In accordance with the terms of the Plan, the remaining Common Shares and Warrants will be held in escrow pending resolution of unsecured
claims. Once these claims are resolved, the securities will be distributed in accordance with the terms of the Plan. None of the securities held in escrow will return to Worldcolor.


Dividends

As of December 31, 2009, no cash dividends or distributions had been declared on the Common Shares or the Preferred Shares. On
February 5, 2010, the Company paid a dividend in respect of its Preferred Shares in the amount of $0.38568662 per Preferred Share, representing the preferential cash dividend accrued on the
Preferred Shares for the period from July 21, 2009 to November 14, 2009. Further cash dividends on the Preferred Shares are limited by the terms of the Credit Facility. Cash dividends
payable on the Preferred Shares shall accrue in accordance with the terms of the Preferred Shares.

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The
payment of cash dividends on the Common Shares is limited by the terms of the Preferred Shares, the terms of the Credit Facility and the Arrangement Agreement. Accordingly, it is not anticipated
that any cash dividends will be paid on the Common Shares for the foreseeable future. Any determination to pay dividends will be at the discretion of the Board of Directors and will depend upon the
Company's results of operations, financial condition, regulatory and contractual restrictions and other factors the Board of Directors deems relevant.

Market for Securities

The Common Shares are listed on the TSX under the symbols "WC" (trading in Canadian dollars) and "WC.U" (trading in U.S. dollars) and the
Series I Warrants and the Series II Warrants are listed on the TSX under the symbols "WC.WT.U" and "WC.WT.V", respectively.

The
following tables show the monthly range of high and low prices, the closing prices on the last trading day of the applicable month and the total monthly volumes of the Common Shares and the
Warrants traded on the TSX for each month from August 26, 2009 (in the case of the Common Shares) or September 11, 2009 (in the case of the Warrants) to
December 31, 2009.

Common Shares in Canadian Dollars (Symbol: WC)High Price

Low Price

Closing Price

Total Monthly
VolumeAugust 26, 2009 to
August 31, 2009


Cdn$10.10


Cdn$8.80


Cdn$9.20


9,560September 2009


Cdn$12.00


Cdn$9.40


Cdn$10.90


614,027October 2009


Cdn$10.90


Cdn$9.50


Cdn$9.50


139,214November 2009


Cdn$10.50


Cdn$9.30


Cdn$9.80


77,507December 2009


Cdn$10.20


Cdn$9.30


Cdn$9.70


29,267




Common Shares in U.S. Dollars (Symbol: WC.U)High Price

Low Price

Closing Price

Total Monthly
VolumeAugust 26, 2009 toAugust 31, 2009


$8.70


$8.00


$8.70


140,400September 2009


$10.00


$8.70


$9.50


4,034,586October 2009


$9.70


$9.00


$9.10


1,310,391November 2009


$10.00


$9.30


$9.50


158,714December 2009


$9.30


$9.10


$9.30


124,380


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Series I Barrier Warrants in U.S. Dollars (Symbol: WC.WT.U)High Price

Low Price

Closing Price

Total Monthly
VolumeSeptember 11, 2009 to
September 30, 2009


$2.10


$2.00


$2.10


78,792October 2009


$4.10


$3.10


$4.10


286,342November 2009


$4.50


$4.10


$4.50


22,126December 2009


$5.00


$4.20


$4.20


8,728




Series II Barrier Warrants in U.S. Dollars (Symbol: WC.WT.V)High Price

Low Price

Closing Price

Total Monthly
VolumeSeptember 11, 2009 to
September 30, 2009


$1.50


$1.50


$1.50


78,791October 2009


$3.70


$2.10


$2.90


273,386November 2009


$3.50


$2.90


$3.30


97,940December 2009


$2.90


$2.90


$2.90


5,328


Shareholder Rights Plan

On February 19, 2010, the Company announced that it had enacted a new shareholder rights plan (the "Rights Plan") pursuant to an
agreement with Computershare Investor Services Inc., as rights agent. The Rights Plan replaced Worldcolor's previous rights plan, dated August 20, 2009, which terminated in accordance
with its terms on February 20, 2010.

The
Rights Plan is designed to encourage the fair treatment of shareholders in any take-over offer for the Company and to prevent a bidder from acquiring control of Worldcolor in a manner
detrimental to shareholders. The Rights Plan is intended to provide the Board of Directors of Worldcolor and its shareholders with more time to consider fully any unsolicited take-over bid
for the Company and allow more time for the Board of Directors to pursue other alternatives to maximize shareholder value, if appropriate. The Rights Plan is also intended to prevent an attempt to
acquire control of Worldcolor other than by means of an offer made to all shareholders.

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The Quad/Graphics Transaction constitutes an Exempt Transaction under the Rights Plan and so will not trigger the Rights Plan.

One
right was issued with respect to each Common Share and Preferred Share (together the "Voting Shares") issued and outstanding as of February 19, 2010. These rights will become exercisable
only when a person, including any party related to it, acquires or attempts to acquire 15% or more of the outstanding Common Shares or of the outstanding Voting Shares without complying with the
"Permitted Bid" provisions of the Rights Plan or without approval of Worldcolor's Board of Directors. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a
rights holder, other than the acquiring person and related persons, to purchase Common Shares at a 50 percent discount to the market price at the time.

Under
the Rights Plan, a Permitted Bid is a bid made to all holders of the Voting Shares and which is open for acceptance for not less than 60 days. If at the end of 60 days at least
50 percent of the outstanding Voting Shares (other than those owned by the offeror and certain related parties) have been tendered, then the offeror may take up and pay for the Voting Shares
provided that it extends the bid for a further 10 days to allow other shareholders to tender.

The
TSX has deferred its decision to consent to the Rights Plan until such time as shareholders have ratified the Rights Plan. The Rights Plan provides that it is subject to confirmation by the
shareholders of Worldcolor at a meeting to be held within six months.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Reference is made to (a) note 32 to our Annual Financial Statements; and (b) the section entitled "Related Party
Transactions" in our Management's Discussion and Analysis for the year ended December 31, 2009. These documents may be found on our website at www.worldcolor.com and under our profile on SEDAR
at www.sedar.com.

OUR MATERIAL CONTRACTS

The only material contracts entered into by the Company within the financial year ended December 31, 2009 or before such time that are still
in effect, other than in the ordinary course of business, is the Rights Plan described under "Description of Capital Structure  Shareholder Rights Plan" and the
material contracts described below.

Warrant Indenture

On July 21, 2009, the Company entered into a warrant indenture (the "Warrant Indenture") with Computershare creating the Warrants. The
Warrant Indenture governs the terms of the Warrants, including their issuance, ownership and method of exercise. Pursuant to the terms of the Warrant Indenture, Computershare has been appointed the
warrant agent of the Company to receive subscriptions and payments from holders of Warrants, to act as registrar and transfer agent for the Warrants and to perform certain services relating to the
exercise and transfer of Warrants. Computershare is entitled to a fee for such services.

Registration Rights Agreement

Pursuant to the Plan, Worldcolor entered into a registration rights agreement (the "Registration Rights Agreement") with Catalyst Fund Limited
Partnership II, Société Générale, New York Branch and Société Générale,
Canada (collectively, the "Selling Securityholders") on July 21, 2009. The Registration Rights Agreement contemplates that the Company will use its commercially reasonable efforts to register
the Registrable Securities (as defined below) no later than January 31, 2010.

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Pursuant
to the terms of the Registration Rights Agreement, the Company agreed to file a short form base shelf prospectus with theAutorité des
marchés financiers(i.e., a Canadian securities regulatory authority) under National
Instrument 44-102 Shelf Distributionsand a registration statement (the "Registration
Statement") with the SEC under the U.S.Securities Act of 1933, as amended (the "Securities Act") so as to permit the Selling
Securityholders to resell their Common Shares and Preferred Shares (the "Registrable Securities") in the United States from time to time after the effective date of the Registration
Statement.

Under
the Registration Rights Agreement, it is provided that the Company will use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act
until the second anniversary of its effective date with respect to the Registrable Securities, subject to extensions in accordance with the terms and conditions of the Registration Rights Agreement
(the "Effectiveness Period"), or such shorter period ending when (a) all Registrable Securities covered by the Registration Statement have been sold by the Selling Securityholders or
(b) a subsequent Registration Statement covering all of the Registrable Securities has been declared effective under the relevant securities laws.

Under
the Registration Rights Agreement, it is provided that (a) Worldcolor agrees to pay all expenses in connection with the registration and (b) the Selling Securityholders are
responsible for all underwriting discounts and commissions, fees of underwriters, selling brokers, dealer managers and similar securities industry professionals, fees and expenses of counsel of the
Selling Securityholders (except for the reasonable fees and expenses of one Canadian counsel and one U.S. counsel selected by the holder of a majority of the Common Shares included in the
Registrable Securities, on a fully diluted basis), fees and expenses of counsel for the underwriters and transfer taxes, if any.

Although
the Company has not been able to complete the registration of the Registrable Securities as a result of the pending Quad/Graphics Transaction, the Company believes it is currently in
compliance with its obligations under the Registration Rights Agreement.

Credit Facility

On July 21, 2009, in connection with the Plan, the Company entered into a $450 million senior secured term loan pursuant to a term
facility credit agreement (the "Term Loan Agreement") among the Company, Novink (USA) Corp. (as successor in interest to QWUSA and renamed Worldcolor USA), as borrowers, Graphicor
Transport Inc. ("TGI") and all of the Company's U.S. subsidiaries (except those subsidiaries that were inactive as of the implementation date), as guarantors, Credit Suisse, General
Electric Capital Corporation, GE Canada Finance Holding Company and Wachovia Bank, National Association, as co-administrative agents and co-collateral agents, Credit Suisse, as
syndication agent, General Electric Capital Corporation, GE Canada Finance Holding Company and Wachovia Bank, National Association, as co-documentation agents and Credit Suisse Securities
(USA) LLC, GE Capital Markets, Inc., GE Capital Markets (Canada) Ltd. and Wells Fargo Securities, LLC, as joint lead arrangers and co-bookrunners, and the
lenders party thereto from time to time. The proceeds of the term facility under the Term Loan Agreement have been used to repay amounts outstanding under the DIP Credit Facility, to finance the fees
and expenses incurred in connection with the DIP Credit Facility, the Credit Agreement (as defined below) and to pay certain allowed priority claims and for working capital and other general
corporate purposes. Borrowings under the term facility, which was fully drawn immediately following the Company's emergence from the Proceedings, bear interest at variable rates based on Libor, or
Eurodollar rate, plus applicable margins, which will total a minimum of 9.0%. Amounts borrowed under the Term Loan Agreement and repaid or prepaid may not be re-borrowed. The term loan
under the Term Loan Agreement has mandatory repayment requirements of $3 million in the first year after the issuance date and $33 million in each of the second and third years after the
issuance date. The Company also has an option to prepay in whole or rateably in part

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the
term loan; during the first two years after issuance a premium of 1% of the nominal value of the prepaid amount is required.

Under
the Plan, on July 21, 2009 the Company and Worldcolor USA, as borrowers, also entered into a senior secured asset-based revolving credit facility, with sub-facilities for
Canadian dollar borrowings, swing line loans and issuance of letters of credit, for an aggregate maximum commitment by the lenders of $350 million pursuant to a credit agreement
(the "Credit Agreement", and together with the Term Loan Agreement, the "Exit Financing Agreements") with TGI and all of the Company's U.S. subsidiaries (except those subsidiaries that
were inactive as of the implementation date), as guarantors, General Electric Capital Corporation, Wells Fargo Foothill, LLC and Credit Suisse, as
co-administrative agents, GE Canada Finance Holding Company, as Canadian agent and Canadian collateral agent, General Electric Capital Corporation, Wells Fargo Foothill, LLC and
Credit Suisse, as co-collateral agents, GMAC Commercial Finance LLC, as syndication agent and GE Capital Markets, Inc., GE Capital Markets (Canada) Ltd., Wells Fargo
Securities, LLC and Credit Suisse Securities (USA) LLC, as joint lead arrangers and co-bookrunners, and the lenders party thereto from time to time. The facility consists of
a $285,000,000 facility to the U.S. borrowers and a $65,000,000 facility to the Canadian borrowers, which amounts have been used to repay amounts outstanding under the DIP Credit Facility, to
finance the fees and expenses incurred in connection with the DIP Credit Facility, the Term Loan Agreement and the Plan, to pay certain allowed priority claims and for working capital and other
general corporate purposes. Under the Credit Agreement, the availability of funds is determined by a borrowing base calculated on percentages of eligible receivables and inventory. The unused portion
of the facility is subject to a commitment fee of between 0.75% and 1.00% per annum. Borrowings under the revolving credit facility bear interest at variable rates based on Libor or Eurodollar rate,
Canadian Banker's Acceptance rate or Canadian prime rate, plus applicable margins, which will total a minimum of 7.5%.

The
Exit Financing Agreements contain covenants that restrict and limit the Company's ability to, among other things, enter into merger or amalgamation transactions, grant encumbrances, incur
additional indebtedness, 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 and pension contributions. They also limit dividend payments, repurchases of equity interests, cash interest payments on the Unsecured Notes and related party transactions. In
addition, the Exit Financing Agreements contain certain financial covenants, including requirements to maintain a maximum level of consolidated leverage and minimum consolidated cash fixed charge
coverage, as defined in the agreements, as well as minimum liquidity. In addition, Worldcolor is required to comply with various other terms and conditions such as maintaining guarantee coverage of
substantially all of its consolidated assets and consolidated earnings before interest, income taxes, depreciation, amortization and restructuring. They also include customary events of default,
including the non-payment of principal or interest, the breach of any financial covenant, the failure to perform or observe any other covenant and certain bankruptcy events relating to the
Company and its subsidiaries.

The
obligations arising under or in connection with the Exit Financing Agreements are supported by,inter alia, guarantees, security interests
and hypothecs granted on substantially all of the Company's, TGI's and the Company's U.S. subsidiaries' present and future property, movable (personal) and immovable (real), corporeal
(tangible) and incorporeal (intangible), regardless of where located.

The
facilities established by the Exit Financing Agreements will mature on the earliest to occur of (a) July 21, 2012 and (b) the acceleration of the Term Loan Agreement payments,
and a termination of the commitments, upon the occurrence of required prepayments resulting from, among other things, excess cash flow, the net proceeds of certain asset sales, the issuance of certain
debt, certain extraordinary receipts or a change of control.

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Indenture of Worldcolor USA

Pursuant to an indenture (the "Indenture") dated as of July 21, 2009 between Worldcolor USA, as issuer, the Company, as guarantor and
The Bank of New York Mellon, as trustee, the Company will act as guarantor of the obligations of Worldcolor USA under a maximum of $75 million of Unsecured Notes. The Company expects
that $43 million of Unsecured Notes will be issued to creditors of certain of the Company's U.S. subsidiaries holding general unsecured claims against such U.S. subsidiaries once
all claims have been resolved in the U.S. Bankruptcy Court. Each such creditor will receive Unsecured Notes equal to 50% of its allowed claim, provided that the maximum aggregate amount of
Unsecured Notes is limited to $75 million. In the event that the total allowed claims of all such creditors exceed $150 million, then each such creditor will receive its pro rataamount
of $75 million in aggregate total of the Unsecured Notes.

The
Unsecured Notes are unsecured, mature as to principal and interest on July 15, 2013, bear interest payable at 10% per annum in cash or 13% per annum in kind and are redeemable at the option
of Worldcolor USA under certain circumstances and at the redemption prices set forth in the Indenture. The Unsecured Notes are unconditionally guaranteed as to payment of principal and interest by
the Company.

The
Indenture provides for various restrictions on, among other things, the ability of Worldcolor and its subsidiaries to incur additional debt, secure such debt, and make investments, dispose of some
of their assets, as well as for limitations on dividend payments and repurchases of equity.

The
Indenture also sets forth certain events of default. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or Worldcolor USA or any
significant subsidiary of the Company or Worldcolor USA, all outstanding Unsecured Notes will become due and payable immediately without further action or notice. If any other event of default occurs
and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding Unsecured Notes may declare all the Unsecured Notes to be due and payable immediately by
notice in writing to the Company and Worldcolor USA specifying the respective event of default.

All
or a portion of the Notes may be redeemed, with all accrued and unpaid interest thereon, at any time on or after July 21, 2010 at redemption prices of 105% in the second year after issuance
date,
103% in the third year and 101% in the fourth year. The option to redeem is contingent on the prior repayment of specified amounts due under the Exit Financing Agreements and proportionate repayment
of the Preferred Share.

Arrangement Agreement

On January 25, 2010, Quad/Graphics and Worldcolor entered into the Arrangement Agreement, pursuant to which, subject to the terms and
conditions set forth therein, the Company will amalgamate with a subsidiary of Quad/Graphics. The Quad/Graphics Transaction is being undertaken by way of a plan of arrangement of Worldcolor pursuant
to the terms of the CBCA and is expected to close in the summer of 2010, subject to the receipt of certain regulatory approvals and other closing conditions.

At
the closing of the Quad/Graphics Transaction, each outstanding Common Share will be converted, after a multi-step transaction, into Class A common stock
(the "Class A Stock") of Quad/Graphics at a share exchange ratio to be determined at closing in accordance with the Arrangement Agreement.

The
Warrants will be convertible into Common Shares prior to the closing of the Quad/Graphics Transaction if the volume-weighted average trading price per Common Share on the TSX in any consecutive
30-day trading period or the effective price of the consideration receivable by holders of Common Shares in the Quad/Graphics Transaction, as determined by the Board of Directors based
upon the advice of an independent valuation expert, is equal to or greater than the applicable threshold price. Warrants that do not become exercisable or are not exercised will be cancelled or
purchased for

45

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cancellation
for cash in accordance with a contractually-specified formula, based in part on the effective price determined by the Worldcolor Board of Directors as referred to above.

Holders
of Common Shares will receive Class A Stock, each having one vote per share, for approximately 40 percent total ownership of the combined company. Quad/Graphics' shareholders
will continue to own Class A Stock, Class B common stock and Class C common stock of Quad/Graphics for approximately 60 percent total ownership of the combined company. The
Harry V. Quadracci family will control the combined company through ownership of the high-voting Class B shares of Quad/Graphics. Any future dividend or consideration received
following the closing will be distributed pro rata to Quad/Graphics' shareholders regardless of class of stock.

Simultaneously
with the closing of the Quad/Graphics Transaction, approximately $140 million will be distributed in cash to Quad/Graphics' existing shareholders. Quad/Graphics will also provide
at least $93.3 million to fund the purchase of any Warrants not converted into Common Shares, to fund redemptions of or payments due on any other equity securities not converted to Common
Shares and to pay any permitted dividends on Worldcolor's stock. If less than $93.3 million is needed to make such purchases, redemptions and payments, the remainder will be distributed to
holders of Common Shares in cash.

Quad/Graphics
and Worldcolor each have agreed not to solicit any alternative acquisition proposal, but may consider superior proposals from third parties in certain circumstances, subject to the match
rights of the other party. The Arrangement Agreement also provides for the payment of a $40 million termination fee to either party or the reimbursement for up to $20 million
out-of-pocket expenses of the other party relating to the Quad/Graphics Transaction if the Arrangement Agreement is terminated under certain circumstances.

INTERESTS OF EXPERTS

KPMG LLP is the public accounting firm that prepared the auditor's report with respect to our Annual Financial Statements. KPMG LLP has
confirmed to us that it is independent within the meaning of the Rules of Professional Conduct of theOrdre des Comptables Agréés du
Québec. These rules are equivalent or similar to Rules of Professional Conduct applicable in the other provinces of Canada.

OUR TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Shares, Preferred Shares and Warrants is Computershare at its principal transfer offices in Montreal,
Toronto, Vancouver, Calgary and Halifax.

FORWARD-LOOKING STATEMENTS

To the extent any statements made in this Annual Information Form contain information that is not historical, these statements are forward-looking
statements within the meaning of Section 27A of the Securities Act and Section 21E of the U.S.Securities Exchange Act of 1934, as
amended, and are forward-looking information within the meaning of the "safe harbor" provisions of applicable Canadian securities legislation (collectively "forward-looking statements"). These
forward-looking statements 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. They include, but are not limited to, statements with respect to expectations, projections or other characterizations of
future events or circumstances, and the Company's objectives, goals, strategies, beliefs, intentions, plans, estimates, projections and outlook, including statements relating to
the following:



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The
Company has based these forward-looking statements on its 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
the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct, and
since forward-looking statements inherently involve risks and uncertainties, undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making
forward-looking statements, and actual results may differ materially from those expressed or implied in such forward-looking statements.

Important
factors and assumptions as well as the Company's ability to anticipate and manage the risks associated therewith that could cause actual results to differ materially from these expectations
include, among other things:



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These
and other risks, as well as the Company's ability to anticipate and manage the risks associated with the foregoing, are detailed from time to time in the Company's filings with the 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.worldcolor.com). Additional information about these factors and about
the material factors or assumptions underlying such forward-looking statements may be found in this Annual Information Form, and in particular under "Risk Factors". The Company cautions 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 the Company's forward-looking statements to make decisions with respect to the business of the Company. The forward-looking statements contained herein were prepared for the
purpose of providing investors with information about the Company and may not be appropriate for other purposes.

Unless
mentioned otherwise, the forward-looking statements in the Annual Information Form reflect the expectations of the Company as of the date hereof, and are subject to change after this date. The
Company expressly disclaims 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.

ADDITIONAL INFORMATION

Additional information about us may be found on the SEDAR website at www.sedar.com.

Other
information, including information on the remuneration and indebtedness of our directors and officers, the principal holders of our securities and securities authorized for issuance under equity
compensation plans, where applicable, will be contained in our Management Proxy Circular to be prepared in connection with our Annual Meeting of Shareholders. Other financial information is included
in our Annual Financial Statements and Management's Discussion and Analysis for the year ended December 31, 2009.

You
may also request a copy of any of the filings of the Company, at no cost, by writing or telephoning the Corporate Secretary of the Company at 999 de Maisonneuve Boulevard West,
Suite 1100, Montreal, Quebec, Canada H3A 3L4, telephone: (514) 877-5334.

The
above mentioned documents and our press releases may be found on our website at www.worldcolor.com.

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EXHIBIT AWORLD COLOR PRESS INC.AUDIT COMMITTEE CHARTER

A.    PURPOSE

The Audit Committee is a standing committee appointed by the Board. The Committee is established to fulfil applicable public corporation obligations respecting audit committees
and to assist the Board in fulfilling its oversight responsibilities with respect to financial reporting including responsibility to:



In
addition, the Committee shall prepare, if required, an audit committee report for inclusion in the Corporation's annual management proxy circular, in accordance with applicable rules and
regulations. Except as provided in the Human Resources and Compensation Committee Charter, the Committee is also responsible for assisting the Board in fulfilling its responsibilities relating to
pension matters.

The
function of the Committee is oversight and nothing in this Charter is intended to expand applicable standards of conduct under statutory or regulatory requirements for the directors of the
Corporation. It is not the duty or responsibility of the Committee or its members (i) to plan or conduct audits, (ii) to determine that the Corporation's financial statements are
complete and accurate and are in accordance with generally accepted accounting principles or (iii) to conduct other types of auditing or accounting reviews or similar procedures or
investigations. The Committee members are members of the Board of the Corporation, appointed to the Committee to provide broad oversight of the financial, risk and control related activities of the
Corporation, and are specifically not accountable or responsible for the day to day operation or performance of such activities. In particular, the member or members designated as audit committee
financial experts shall not be accountable for giving professional opinions on the internal or external audit of the Corporation's financial information.

Management
is responsible for the preparation, presentation and integrity of the Corporation's financial statements. Management is also responsible for maintaining appropriate accounting and financial
reporting principles and policies and systems of risk assessment and internal controls and procedures designed to provide reasonable assurance that assets are safeguarded and transactions are properly
authorized, recorded and reported and to assure the effectiveness and efficiency of operations, the reliability of financial reporting and compliance with accounting standards and applicable laws and
regulations. The internal auditor is responsible for monitoring and reporting on the adequacy and
effectiveness of the system of internal controls. The external auditors are responsible for planning and carrying out an audit of the Corporation's annual financial statements and, if so mandated, the
effectiveness of the Corporation's system of internal controls in accordance with generally accepted auditing standards to provide reasonable assurance that, among other things, such financial
statements are in accordance with generally accepted accounting principles.

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B.    PROCEDURES, POWERS AND DUTIES

In addition to the procedures and powers set out in the resolution of the Board establishing this Committee, a copy of which resolution is attached hereto as Schedule 1, the
Committee shall have the following procedures, powers and duties:



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C.    AUDIT RESPONSIBILITIES OF THE COMMITTEE

Selection and Oversight of the External Auditors

A-3

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Oversight of Internal Auditors

A-4

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Oversight and Monitoring of Audits

Oversight and Review of Accounting Principles and Practices

A-5

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Oversight and Monitoring of Internal Controls

Communications with Others

Oversight and Monitoring of the Corporation's Financial Disclosures



A-6

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Oversight of Finance Matters

Additional Responsibilities

D.    PENSION RESPONSIBILITIES OF THE COMMITTEE

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THE CHARTER

The Committee shall review and reassess the adequacy of this Charter at least annually and otherwise as it deems appropriate and recommend changes to
the Board. The performance of the Committee shall be evaluated with reference to this Charter annually.

The
Committee shall ensure that this Charter is disclosed on the Corporation's website and in accordance with all applicable securities laws or regulatory requirements.

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SCHEDULE 1    TO    THE AUDIT COMMITTEE CHARTER    WORLD COLOR PRESS, INC.  (the "Corporation")RESOLUTIONS OF THE BOARD OF DIRECTORS

WHEREASthe Corporation wishes to disband its existing board committees, constitute new committees,
approve charters for such new committees and appoint directors to each committee;

Disbanding of Board Committees and Repeal of Charters

RESOLVED THAT:

Establishment of Board Committees and their Charters

RESOLVED THAT:



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A-10

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Appointment of Committee Members





A-11

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GRAPHIC

World Color Press Inc.(Formerly Quebecor World Inc.)



CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SEVEN MONTHS ENDED JULY 31, 2009 AND THE FIVE MONTHS
ENDED DECEMBER 31, 2009



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MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of World Color Press Inc. is responsible for the preparation, presentation and integrity of the accompanying consolidated
financial statements of World Color Press Inc. and its subsidiaries, the Management's Discussion and Analysis (MD&A) and all other information in World Color Press Inc.'s Annual Report.
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 World Color Press Inc.'s Annual Report 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/ Mark A. Angelson Mark A. Angelson
Chairman of the Board and
Chief Executive Officer

/s/ Andrew P. Hines Andrew P. Hines
Executive Vice President and
Chief Financial Officer


Montreal,
Canada

March 1, 2010

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of World Color Press Inc. (formerly Quebecor World Inc.)

We
have audited the accompanying consolidated balance sheets of World Color Press Inc. (formerly Quebecor World Inc.) ("the Company") and subsidiaries as of December 31,
2009 and 2008 and the related consolidated statements of income (loss), comprehensive income (loss), shareholders' equity (deficit) and cash flows for the seven-month period ended July 31, 2009
(to the fresh-start reporting date), the five-month period ended December 31, 2009, as well as for each of the years in the two-year period ended
December 31, 2008. These consolidated financial statements are the responsibility of the Company'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 Canadian generally accepted auditing standards and 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 Company and subsidiaries as of December 31, 2009
and 2008 and the results of operations and their cash flows for the seven-month period ended July 31, 2009 (to the Fresh-start reporting date), the five-month period ended December 31,
2009, as well as for each of the years in the two-year period ended December 31, 2008 in conformity with Canadian generally accepted accounting principles.

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 33 to the consolidated financial statements.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of
December 31, 2009, 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 1, 2010 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

/s/
KPMG LLP (1)
Chartered Accountants

Montréal,
Canada
March 1, 2010

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of World Color Press Inc. (formerly Quebecor World Inc.)

We
have audited World Color Press Inc.'s (formerly Quebecor World Inc.) ("the Company") internal control over financial reporting as of December 31, 2009, based on the
criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Company'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". Our responsibility is to express an opinion on the Company'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
company'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 company'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 company; (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 company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company'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.

In
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal
Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We
also have conducted our audits on the consolidated financial statements in accordance with Canadian generally accepted auditing standards. With respect to the consolidated financial statements for
the year ended December 31, 2009, we also have conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our report dated
March 1, 2010 expressed an unqualified opinion on those consolidated financial statements.

/s/
KPMG LLP(1)
Chartered Accountants

Montréal,
Canada
March 1, 2010

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CONSOLIDATED STATEMENTS OF INCOME (LOSS)(In millions of US dollars, except per share amounts)

PredecessorSuccessorYear ended
December 31,Five months
ended
December 31,
2009

Seven months
ended
July 31,
2009Note

2008

2007Operating revenues




$
1,337

$
1,735

$
4,017

$
4,655Operating expenses:Cost of sales





1,098


1,564


3,545


4,081Selling, general and administrative





122


163


351


389Securitization fees














15Impairment of assets, restructuring and other charges


7


39


22


242


224Goodwill impairment charge


14








341


1,8331,259


1,749


4,479


6,542Operating income (loss)





78


(14
)

(462
)

(1,887
)Financial expenses


8


30


74


410


179Effective interest on preferred shares classified as liability





8


2


5


10Reorganization items


3





67


106


Income (loss) from continuing operations before income taxes





40


(157
)

(983
)

(2,076
)Income taxes


9


19


18


(39
)

(239
)Income (loss) from continuing operations





21


(175
)

(944
)

(1,837
)Loss from discontinued operations (net of tax)


6








(715
)

(363
)Net income (loss)




$
21

$
(175
)
$
(1,659
)
$
(2,200
)Net income allocated to holders of preferred shares








9


18


23Net income (loss) allocated to holders of equity shares




$
21

$
(184
)
$
(1,677
)
$
(2,223
)Earnings (loss) per share:Basic and diluted:Continuing operations


10

$
0.29

$
(0.89
)
$
(5.26
)
$
(14.10
)Discontinued operations











(3.92
)

(2.75
)$
0.29

$
(0.89
)
$
(9.18
)
$
(16.85
)Weighted-average number of equity shares outstanding (in thousands):


10Basic and diluted





73,285


205,482


182,644


131,926


See
accompanying Notes to Consolidated Financial Statements.

5

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(In millions of US dollars)

PredecessorSuccessorYear ended
December 31,Five months
ended
December 31,
2009

Seven months
ended
July 31,
2009Note

2008

2007Net income (loss)




$
21

$
(175
)
$
(1,659
)
$
(2,200
)Other comprehensive income (loss), net of income tax:


24, 25Unrealized gain (loss) on foreign currency translation adjustment





6


(85
)

150


(105
)Portion of foreign currency translation adjustment in income as a result of business disposals











274


Unrealized net gain on derivative financial instruments related to cash flow hedges














10Reclassification of realized net loss (gain) on derivative financial instruments to the statements of income








(1
)

(7
)

5Comprehensive income (loss)




$
27

$
(261
)
$
(1,242
)
$
(2,290
)


See
accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)(In millions of US dollars)

Note

Capital
stock
(Note 22)

Contributed
surplus

Retained
earnings
(deficit)

Accumulated
other
comprehensive
income (loss)

Total
shareholders'
equity (deficit)Balance, December 31, 2006 (Predecessor)




$
1,452

$
114

$
398

$
(83
)
$
1,881Net loss











(2,200
)




(2,200
)Cumulative effect of change in accounting policyFinancial instruments











(5
)

(7
)

(12
)Other comprehensive income (loss), net of income taxes


24











(90
)

(90
)Equity shares issued from stock plans





5











5Related party transactions








1








1Stock-based compensation








3








3Redemption of convertible notes








(16
)

16





Dividends on preferred shares











(22
)




(22
)Balance, December 31, 2007 (Predecessor)




$
1,457

$
102

$
(1,813
)
$
(180
)
$
(434
)Net loss











(1,659
)




(1,659
)Cumulative effect of change in accounting policyInventories











(18
)




(18
)Other comprehensive income, net of income taxes


24











417


417Preferred shares conversion





138











138Stock-based compensation








1








1Balance, December 31, 2008 (Predecessor)




$
1,595

$
103

$
(3,490
)
$
237

$
(1,555
)Net loss from January 1 to July 31, 2009











(175
)




(175
)Other comprehensive loss, net of income taxes


24











(86
)

(86
)Stock-based compensation








4








4Preferred shares conversion





14











14Balance, July 31, 2009 (Predecessor)




$
1,609

$
107

$
(3,665
)
$
151

$
(1,798
)Fresh start adjustments:


1Cancellation of Predecessor capital stock and contributed surplus





(1,609
)

(107
)







(1,716
)Elimination of Predecessor deficit and accumulated other comprehensive income











3,665


(151
)

3,514Issuance of capital stock as part of Plan of Reorganization





628


54








682Balance, July 31, 2009 (Successor)




$
628

$
54

$


$


$
682Net income for five-month period ended December 31, 2009











21





21Other comprehensive income net of income taxes


24











6


6Balance, December 31, 2009 (Successor)




$
628

$
54

$
21

$
6

$
709


See accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions of US dollars)

PredecessorSuccessorYear ended
December 31,Five months
ended
December 31,
2009

Seven months
ended
July 31,
2009Note

2008

2007Cash flows from operating activities:Net income (loss)




$
21

$
(175
)
$
(1,659
)
$
(2,200
)Adjustments for:Reorganization items


3





24


39


Depreciation of property, plant and equipment


12


59


116


262


311Impairment of assets and non-cash portion of restructuring and other charges


7


3


(1
)

186


277Goodwill impairment charge


14








341


1,999Future income taxes


9


23


13


(60
)

(256
)Amortization and write down of other assets








12


19


60Amortization of customer relationships


13


17








Amortization of financing costs


8


9





58


7Effective interest and dividends on preferred shares classified as liability





8








Loss on business disposals and other


6








685


13Unrealized foreign exchange (gain) loss on long term debt








(57
)

100


(16
)Other





1


3


(7
)

19Net changes in non-cash balances related to operations:Accounts receivable





(110
)

233


126


(182
)Inventories





22


44


34


2Trade payables and accrued liabilities





26


(153
)

(388
)

66Trade payables and accrued liabilities subject to compromise








79


526


Amounts owing in satisfaction of bankruptcy claims





(3
)







Other current assets and liabilities





29


(25
)

(10
)

42Other non-current assets and liabilities





4


(5
)

(162
)

(74
)(32
)

173


126


(146
)Cash flows provided by operating activities





109


108


90


68Cash flows from financing activities:Net change in bank indebtedness





(1
)




(71
)

18Issuance of long-term debt, net of issuance costs








463


6


67Repayments of long-term debt





(6
)

(109
)

(21
)

(332
)Fees related to the plan of reorganization








(14
)




Net borrowings under revolving bank facility





(89
)




77


578Net borrowings under revolving DIP Facility








(45
)

52


Issuance of DIP Term Loan, net of issuance costs











557


Repayments of DIP Term Loan








(526
)

(75
)

Net proceeds from issuance of equity shares














5Dividends on preferred shares














(18
)Redemption of convertible notes














(120
)Net change in secured financing











49


84Repayment of North American securitization program subsequent to Insolvency Proceedings











(413
)

Cash flows provided by (used in) financing activities





(96
)

(231
)

161


282Cash flows from investing activities:Additions to property, plant and equipment





(41
)

(56
)

(109
)

(321
)Net proceeds from disposal of assets





2


2


25


101Business disposals and business acquisitions, net of cash and cash equivalents











44


(3
)Restricted cash





(3
)

5


(3
)

(7
)Restricted cash related to Insolvency Proceedings








32


(44
)

Cash flows used in investing activities





(42
)

(17
)

(87
)

(230
)Effect of foreign currency








(4
)

(16
)

(77
)Net changes in cash and cash equivalents





(29
)

(144
)

148


43Cash and cash equivalents, beginning of period


28


65


209


61


18Cash and cash equivalents, end of period


28

$
36

$
65

$
209

$
61


See accompanying Notes to Consolidated Financial Statements.

8

---





Table of Contents

CONSOLIDATED BALANCE SHEETS(In millions of US dollars)

Successor

PredecessorNote

December 31, 2009

December 31, 2008AssetsCurrent assets:Cash and cash equivalents


28

$
36

$
209Accounts receivable


26


562


694Inventories


11


176


234Income taxes receivable





16


31Future income taxes


9


19


14Prepaid expenses and deposits





32


40Total current assets





841


1,222Property, plant and equipment


12


1,113


1,161Intangible assets


13


372


Restricted cash


15


63


97Future income taxes


9


18


6Other assets


16


75


334Total assets




$
2,482

$
2,820Liabilities and Shareholders' equity (deficit)Current liabilities:Bank indebtedness


17

$
2

$
3Trade payables





116


135Accrued liabilities


18


280


345Amounts owing in satisfaction of bankruptcy claims


1


45


Income and other taxes payable





19


41Current portion of long-term debt


19


20


583Liabilities subject to compromise


4





2,883Total current liabilities





482


3,990Long-term debt


19


440


61Unsecured notes to be issued


20


46


Other liabilities


21


515


246Future income taxes


9


192


43Preferred shares


22


98


35Shareholders' equity (deficit):Capital stock


22


628


1,595Contributed surplus


22


54


103Retained earnings (deficit)





21


(3,490
)Accumulated other comprehensive income


24


6


237709


(1,555
)Commitments, Contingencies and Guarantees


29Subsequent Events


34Total liabilities and shareholders' equity (deficit)




$
2,482

$
2,820


See accompanying Notes to Consolidated Financial Statements.

On
behalf of the Board:

/s/ Mark A. Angelson

/s/ Raymond J. BromarkMark A. Angelson, Director

Raymond J. Bromark, Director


9

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Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Five months ended December 31, 2009 and seven months ended July 31, 2009 and for years ended December 31, 2008 and 2007
(Amounts are expressed in millions of US dollars, except per share amounts)

1.     Creditor Protection and the Plan of Reorganization



10

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Creditor Protection and the Plan of Reorganization (Cont'd)





11

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Creditor Protection and the Plan of Reorganization (Cont'd)



in millionsClaims filed net of withdrawn and expunged claims as at February 8, 2010

$
7,394Less:Excluded claims


2,460Duplicate claims


1,867Claims filed net of withdrawn and expunged, excluded and duplicate claims


3,067Claims still under review


286Liabilities subject to compromise (excluding post-filing interest)

$
2,781




12

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Creditor Protection and the Plan of Reorganization (Cont'd)



13

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Creditor Protection and the Plan of Reorganization (Cont'd)



14

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Creditor Protection and the Plan of Reorganization (Cont'd)



Predecessor
July 31, 2009

Plan of
Reorganization

Exit
Financing

Fresh Start
Adjustments

Successor
July 31, 2009AssetsCurrent assets:Cash and cash equivalents

$
293

$
(104
)
$
(124
)
$


$
65Accounts receivable


485


(23
)




(11
)

451Inventories


190








5


195Income taxes receivable


33


(26
)







7Future income taxes


9


9





(4
)

14Prepaid expenses and deposits


61


5





(1
)

65Total current assets


1,071


(139
)

(124
)

(11
)

797Property, plant and equipment


1,121


9





(4
)

1,126Intangible assets











389


389Restricted cash


93


(33
)







60Future income taxes


2


5





14


21Other assets


348


(4
)




(263
)

81Total assets

$
2,635

$
(162
)
$
(124
)
$
125

$
2,474Liabilities and Shareholders' equity (deficit)Current liabilities:Bank indebtedness

$
2

$


$


$


$
2Trade payables


91


(3
)







88Accrued liabilities


293


(6
)




(12
)

275Amounts owing in satisfaction of bankruptcy claims





48








48Income and other taxes payable


44


(3
)




(27
)

14Future income taxes














Current portion of long term debt


13











13Current portion of liabilities subject to compromise


166


(166
)







Total current liabilities


609


(130
)




(39
)

440Liabilities subject to compromise


2,924


(2,924
)







DIP financing


587





(587
)




Long-term debt


57


6





3


66Exit financing








463





463Unsecured Notes





43








43Other liabilities


183


32





302


517Future income taxes


47


174





(52
)

169Preferred sharesPredecessor


26








(26
)

Preferred sharesSuccessor





94








94Shareholders' equity (deficit):Capital stockPredecessor


1,609








(1,609
)

Capital stockSuccessor





721





(93
)

628Contributed surplus


107


54





(107
)

54Deficit


(3,665
)

1,768





1,897


Accumulated other comprehensive income (loss)


151








(151
)

(1,798
)

2,543





(63
)

682Total liabilities and shareholders' equity (deficit)

$
2,635

$
(162
)
$
(124
)
$
125

$
2,474




15

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Creditor Protection and the Plan of Reorganization (Cont'd)



16

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Creditor Protection and the Plan of Reorganization (Cont'd)













17

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Creditor Protection and the Plan of Reorganization (Cont'd)



2.     Summary of Significant Accounting Policies











18

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)





19

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)









20

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)









21

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)



Assets

Estimated useful livesBuildings

15 to 40 yearsMachinery and equipment, including spare parts

3 to 18 yearsLeasehold improvements

Term of the lease or useful life








22

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)







23

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)





24

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)





25

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)











26

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)







27

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Summary of Significant Accounting Policies (Cont'd)



28

---





Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.     Reorganization Items  Predecessor



PredecessorSeven months
ended
July 31,
2009

Twelve months
ended
December 31,
2008Professional fees

$
48

$
69Other expenses


14


24Interest income on accumulated cash


(1
)

(4
)Repudiated contracts


6


13Amortization of financing costs





15Amortization of embedded derivatives & interest rate risk hedges





(11
)$
67

$
106


4.     Liabilities Subject to Compromise  Predecessor



PredecessorJuly 31, 2009

December 31, 2008Trade payables and accrued liabilities

$
310

$
318Income and other taxes payable


33


35Litigation and other reserves


89


21Long-term debt


2,316


2,294Derivative financial instruments


33


32Post-filing interest


309


1833,090


2,883Current portion of liabilities subject to compromise


166


2,883Liabilities subject to compromise

$
2,924

$





5.     Condensed Combined Financial Information  Predecessor



29

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.     Condensed Combined Financial Information  Predecessor (Cont'd)



PredecessorEntities in
Insolvency
ProceedingsOperating revenues

$
3,723Operating expenses:Cost of sales


3,308Selling, general and administrative


334Impairment of assets, restructuring and other charges


239Goodwill impairment charge


3414,222Operating loss


(499
)Financial expenses


516Dividends on preferred shares classified as liability


5Reorganization items


106Loss from continuing operations before income taxes


(1,126
)Income taxes


(47
)Net loss from continuing operations


(1,079
)Net loss from discontinued operations (net of tax)


(685
)Net loss

$
(1,764
)


30

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.     Condensed Combined Financial Information  Predecessor (Cont'd)



PredecessorEntities in
Insolvency
ProceedingsCash flows used by operating activities

$
(59
)Cash flows from financing activities:Issuance of DIP Term Loan, net of issuance costs


557Repayment of DIP Term Loan


(75
)Net borrowing under revolving DIP Facility


52Repayments of long-term debt


(21
)Net borrowings under revolving bank facility


77Net change in secured financing


(15
)Repayment of North American securitization program subsequent to Insolvency Proceedings


(413
)Cash flows provided by financing activities


162Cash flows from investing activities:Net proceeds from business disposals, net of cash and cash equivalents


76Additions to property, plant and equipment


(93
)Net proceeds from disposal of assets


25Restricted cash related to Insolvency Proceedings


(44
)Cash flows used in investing activities


(36
)Effect of foreign currency


103Net change in cash and cash equivalents


170Cash and cash equivalents, beginning of year


1Cash and cash equivalents, end of year

$
171


31

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.     Condensed Combined Financial Information  Predecessor (Cont'd)



PredecessorEntities in
Insolvency
ProceedingsAssetsCurrent assets

$
1,030Property, plant and equipment


1,063Restricted cash


40Other assets


318Total assets

$
2,451Liabilities and Shareholders' deficitOther current liabilities

$
390Current portion of long-term debt


582Liabilities subject to compromise


2,882Intercompany payables subject to compromise(a)


2,437Total current liabilities


6,291Long-term debt


54Other liabilities


221Future income taxes


39Preferred shares


35Shareholders' deficit


(4,189
)Total liabilities and shareholders' deficit

$
2,451


(a)Intercompany
receivables and payables, subject to elimination upon consolidation, are disclosed on a net basis and are recorded at their face value.


6.     Discontinued Operations  Predecessor



32

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.     Discontinued Operations  Predecessor (Cont'd)



PredecessorNote

December 31, 2008

December 31, 2007Operating revenues




$
486

$
1,034Operating expenses:Cost of sales





473


997Selling, general and administrative





37


79Securitization fees








8Impairment of assets, restructuring and other charges





3


96Goodwill impairment charge


14





166513


1,346Operating loss





(27
)

(312
)Financial expenses


8


6


50Net loss before income taxes and loss on business disposals





(33
)

(362
)Income taxes


9


(3
)

(12
)Net loss before loss on business disposals





(30
)

(350
)Loss on business disposals, net of tax





(685
)

(13
)Net loss from discontinued operations




$
(715
)
$
(363
)


33

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.     Discontinued Operations  Predecessor (Cont'd)



PredecessorDecember 31, 2008Assets sold and abandoned:Cash and cash equivalents

$
33Non-cash operating working capital


136Property, plant and equipment


483Other assets


5Liabilities sold and abandoned:Secured financing


98Long-term debt


14Other liabilities


28Future income taxes


6Net assets


511Effect of cumulative translation adjustment


273Proceeds:Cash


82Note receivable


22Transaction fees


(5
)99Net loss on business disposals and abandoned

$
685


34

---





Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.     Impairment of Assets, Restructuring and Other Charges



Successor

PredecessorYear ended
December 31,Five months ended
December 31, 2009

Seven months ended
July 31, 2009Note

2008

2007Restructuring and other charges (b)




$
12

$
22

$
50

$
31Impairment of assets (a)





3





183


188Pension settlements and curtailments


30





(1
)

1


5Pension multiemployer plans settlement (b)


30


9


1


8


Reorganization related items (c)





15








$
39

$
22

$
242

$
224






35

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.     Impairment of Assets, Restructuring and Other Charges (Cont'd)



36

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.     Impairment of Assets, Restructuring and Other Charges (Cont'd)



Successor

PredecessorFive months ended
December 31, 2009

Seven months ended
July 31, 20092009
Initiatives

Prior Year
Initiatives

Total

2009
Initiatives

Prior Year
Initiatives

TotalExpensesWorkforce reduction

$
6

$
1

$
7

$
15

$
1

$
16Leases and carrying costs for closed facilities


4


2


6


4


4


8Pension multiemployer plans settlement


9





9


1





119


3


22


20


5


25UnderspendingWorkforce reduction





(1
)

(1
)




(2
)

(2
)Total expenses


19


2


21


20


3


23PaymentsWorkforce reduction


(4
)

(1
)

(5
)

(9
)

(11
)

(20
)Leases and carrying costs for closed facilities


(4
)

(2
)

(6
)

(4
)

(5
)

(9
)(8
)

(3
)

(11
)

(13
)

(16
)

(29
)Net change


11


(1
)

10


7


(13
)

(6
)Foreign currency changes





(1
)

(1
)




1


1Balance, beginning of the period


7


4


11





26


26Liabilities subject to compromise














(10
)

(10
)Balance, end of the period

$
18

$
2

$
20

$
7

$
4

$
11


37

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.     Impairment of Assets, Restructuring and Other Charges (Cont'd)



2008
Initiatives

2008
Prior Year
Initiatives

2008
Total

2007
Initiatives

2007
Prior Year
Initiatives

2007
TotalExpensesWorkforce reduction

$
39

$
1

$
40

$
11

$


$
11Leases and carrying costs for closed facilities


7


5


12


11


12


23Pension multiemployer plans settlement





8


8








46


14


60


22


12


34UnderspendingWorkforce reduction





(1
)

(1
)




(3
)

(3
)Leases and carrying costs for closed facilities





(1
)

(1
)










(2
)

(2
)




(3
)

(3
)Total expenses


46


12


58


22


9


31Business disposals





(8
)

(8
)




(18
)

(18
)PaymentsWorkforce reduction


(25
)

(5
)

(30
)

(8
)

(11
)

(19
)Leases and carrying costs for closed facilities


(6
)

(5
)

(11
)

(11
)

(13
)

(24
)(31
)

(10
)

(41
)

(19
)

(24
)

(43
)Net change


15


(6
)

9


3


(33
)

(30
)Foreign currency changes

















Balance, beginning of year





17


17





47


47Liabilities subject to compromise


(10
)




(10
)







Balance, end of year

$
5

$
11

$
16

$
3

$
14

$
17




38

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.     Impairment of Assets, Restructuring and Other Charges (Cont'd)



39

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



8.     Financial Expenses

Successor

PredecessorYear ended
December 31,Five months ended
December 31, 2009

Seven months ended
July 31, 20092008

2007Interest expense (a)

$
24

$
151

$
243

$
181Bank and other charges


3


2


10


12Amortization of financing costs


9





58


7Net loss (gain) on foreign exchange (b)


(2
)

(74
)

128


(119
)Embedded and derivative financial instruments (c)


(2
)

(2
)

(21
)

101Prepayment premium on the early redemption of debt











5332


77


418


235Interest capitalized to the cost of equipment


(2
)

(3
)

(2
)

(6
)$
30

$
74

$
416

$
229Portion included in discontinued operations








6


50$
30

$
74

$
410

$
179






40

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.     Financial Expenses (Cont'd)



9.     Income Taxes



Successor

PredecessorYear ended
December 31,Five months ended
December 31, 2009

Seven months ended
July 31, 20092008

2007Domestic

$
(17
)
$
(39
)
$
(339
)
$
(134
)Foreign


57


(118
)

(644
)

(1,942
)$
40

$
(157
)
$
(983
)
$
(2,076
)




Successor

PredecessorYear ended
December 31,Five months ended
December 31, 2009

Seven months ended
July 31, 20092008

2007Continuing operations

$
19

$
18

$
(39
)
$
(239
)Discontinued operations








(3
)

(12
)Intangible assets


(1
)







Shareholders' equity (deficit):Other comprehensive income











9Dividends on preferred shares











3$
18

$
18

$
(42
)
$
(239
)


41

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.     Income Taxes (Cont'd)



Successor

PredecessorYear ended
December 31,Five months ended
December 31, 2009

Seven months ended
July 31, 20092008

2007Current:Domestic

$
3

$


$
(2
)
$
1Foreign


(7
)

5


20


4(4
)

5


18


5Portion included in discontinued operations








(1
)

(4
)

5


17


5Future:Domestic


1


1


(1
)

(25
)Foreign


22


12


(59
)

(231
)23


13


(60
)

(256
)Portion included in discontinued operations








4


1223


13


(56
)

(244
)Total from continuing operations

$
19

$
18

$
(39
)
$
(239
)




Successor

PredecessorYear ended
December 31,Five months ended
December 31, 2009

Seven months ended
July 31, 20092008

2007Expense (Recovery) at domestic statutory rate$
12

$
(48
)
$
(306
)
$
(688
)Increase (reduction) resulting from:Change in valuation allowance


6


44


150


31Effect of foreign tax rate differences


(2
)

(29
)

(97
)

(157
)Permanent differences


7


47


92


(10
)Goodwill impairment








114


608Other


(4
)

4


8


(23
)Expense (Recovery) at effective tax rate

$
19

$
18

$
(39
)
$
(239
)


42

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.     Income Taxes (Cont'd)



Successor

PredecessorDecember 31,
2009

December 31,
2008Future income tax assets:Capital and non-capital loss carryforwards

$
356

$
313Tax credit carryforwards


3


17Accounts receivable


10


15Goodwill and intangible assets





26Pension, postretirement and workers compensation benefits


142


29Not deductible provision


33


25Interest limitation


85


57Investment in subsidiaries


72


Other


47


31748


513Future income tax liabilities:Property, plant and equipment


(264
)

(144
)Inventories


(12
)

(17
)Goodwill and intangible assets


(129
)

(405
)

(161
)Valuation allowance


(498
)

(375
)Net future income tax liabilities


(155
)

(23
)Current portion of:Future income tax assets


19


14Future income tax liabilities





Long term portion of:





Future income tax assets


18


6Future income tax liabilities


(192
)

(43
)Net future income tax liabilities

$
(155
)
$
(23
)




43

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.     Income Taxes (Cont'd)



SuccessorFederal, Provincial
and Foreign TaxBalance at July 31, 2009

$
127Increases to tax positions related to prior year


1Decreases to tax positions related to prior year


(1
)Gross UTBs at December 31, 2009


127Adjustments to reflect net reporting(1)


(75
)Balance at December 31, 2009

$
52


(1)The
adjustments of $75 million reflect the amount of UTBs that do not meet the asset recognition criteria.




44

---





Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.     Income Taxes (Cont'd)



10.   Earnings (Loss) per Share



Successor

PredecessorYear ended
December 31,Five months
ended
December 31,
2009

Seven months
ended
July 31,
20092008

2007Basic and dilutedNet income (loss) from continuing operations

$
21

$
(175
)
$
(944
)
$
(1,837
)Net income allocated to holders of preferred shares





9


18


23Net income (loss) from continuing operations available to holders of equity shares

$
21

$
(184
)
$
(962
)
$
(1,860
)Basic and diluted weighted-average number of equity shares outstanding (in thousands)


73,285


205,482


182,644


131,926Earnings (loss) per share:Basic and diluted

$
0.29

$
(0.89
)
$
(5.26
)
$
(14.10
)




45

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.   Inventories

Successor

PredecessorDecember 31, 2009

December 31, 2008Raw materials and supplies

$
106

$
152Work in process


70


82$
176

$
234




12.   Property, Plant and Equipment

Cost

Accumulated
depreciation

Net book
valueSuccessorDecember 31, 2009Land

$
84

$


$
84Buildings and leasehold improvements


358


9


349Machinery and equipment


718


53


665Projects under development


15





15$
1,175

$
62

$
1,113PredecessorDecember 31, 2008Land

$
54

$


$
54Buildings and leasehold improvements


473


157


316Machinery and equipment


3,094


2,353


741Projects under development


50





50$
3,671

$
2,510

$
1,161




46

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12.   Property, Plant and Equipment (Cont'd)



13.   Intangible Assets



SuccessorCustomer relationships and contracts

December 31,
2009CostBalance, August 1, 2009

$
389Adjustment (a)


(1
)Balance, December 31, 2009


388Accumulated depreciationBalance, August 1, 2009


Amortization


17Balance, December 31, 2009


17Foreign currency changes


1Balance, December 31, 2009

$
372


(a)Adjustment
associated with a subsequent recognition of tax benefits from net operating loss carryforwards existing prior to fresh start that are recorded
first to reduce any unamortized intangible assets.




2010

$
432011


432012


432013


372014


292015 and thereafter


177


47

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.   Goodwill

North
America

Latin
America

Discontinued
operations

TotalPredecessorBalance, December 31, 2006

$
2,156

$
9

$
159

$
2,324Goodwill acquired


4


1





5Goodwill impairment (a)


(1,823
)

(10
)

(166
)

(1,999
)Foreign currency changes


5





7


12Balance, December 31, 2007

$
342

$


$


$
342Goodwill impairment (b)


(341
)







(341
)Foreign currency changes


(1
)







(1
)Balance, December 31, 2008

$


$


$


$
SuccessorBalance, December 31, 2009

$


$


$


$







48

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



15.   Restricted Cash



16.   Other Assets



Successor

PredecessorNote

December 31, 2009

December 31, 2008Accrued pension benefit asset


30

$


$
131Contract acquisition costs





6


71Deposits





23


35Long-term receivables





39


65Derivative financial instruments





3


Other





4


32$
75

$
334


17.   Bank Indebtedness



49

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.   Accrued Liabilities



Successor

PredecessorDecember 31, 2009

December 31, 2008Salaries, benefits, bonuses and vacations

$
70

$
107Raw materials and rebates


40


56Volume discount


29


49Medical and worker's compensation benefit


21


24Freight and utilities


21


24Restructuring reserve


20


16Contract acquisition costs


12


Fixed asset and leases


12


22Financial liabilities


9


9Other


46


38$
280

$
345


19.   Long-term Debt



Successor

PredecessorNote

Maturity

December 31,
2009

December 31,
2008Credit Facility







$
383

$
Revolving bank facility and other short-term lines











713Senior Notes 4.875% and 6.125%











600Senior Notes 9.75%











400Equipment financing credit facility











128Senior Notes 8.75%











450Senior Debentures 6.50%











3383


2,294Less:Long-term debt of Applicants subject to compromise subsequent to January 21, 2008


4








(2,294
)383


DIP financing











572Capital leases





2010-2015


70


64Other debts





2010-2013


7


8460


644Current portion of long-term debt








20


583Long-term debt







$
440

$
61


50

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19.   Long-term Debt (Cont'd)



51

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19.   Long-term Debt (Cont'd)



Principal
repayments
on long term
debt

Capital lease paymentsPrincipal

Interest

Payment2010

$
6

$
14

$
4

$
182011


42


15


3


182012


407


14


2


162013


1


13


1


142014





13





132015 and thereafter





1





1




52

---





Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20.   Unsecured Notes to be Issued



53

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21.   Other Liabilities



Successor

PredecessorNote

December 31, 2009

December 31, 2008Accrued pension benefit liability


30

$
339

$
59Postretirement benefits


30


60


67Reserve for tax uncertainties





51


Workers' compensation and post employment





37


46Derivative financial instruments








32Deferred gain on property, plant and equipment disposal








30Other





28


65Total Other Liabilities





515


299Less Other liabilities subject to compromise:Derivative financial instruments








32Reserve for environmental matters








5Other








16


53$
515

$
246


54

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22.   Capital Stock and Contributed Surplus

Successor

PredecessorDecember 31, 2009

December 31, 2008

December 31, 2007Number

Amount

Number

Amount

Number

Amount(Thousands of shares)Common Shares (a)


73,285

$
534




$





$
WarrantsSeries I (b)


10,723


57











WarrantsSeries II (b)


10,723


37











Multiple Voting Shares








46,987


93


46,987


93Subordinate Voting Shares








154,642


1,289


85,585


1,151Redeemable First Preferred SharesSeries 3Classified as Shareholders' equity








12,000


213


12,000


213Total Capital Stock




$
628




$
1,595




$
1,457Redeemable First Preferred SharesSeries 5Classified as Liability




$



1,696

$
35


7,000

$
179Class A Convertible Preferred SharesClassified as Liability (c)


12,500


98











Total Preferred Shares Classified as Liability




$
98




$
35




$
179Conversion option on Class A Convertible Preferred SharesClassified as contributed surplus (c)




$
54




$





$









55

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22.   Capital Stock and Contributed Surplus (Cont'd)





56

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22.   Capital Stock and Contributed Surplus (Cont'd)



23.   Stock-Based Compensation



57

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23.   Stock-Based Compensation (Cont'd)





58

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23.   Stock-Based Compensation (Cont'd)



SuccessorDecember 31, 2009(thousands of units)

Unvested
Units

Vested
UnitsBalance as of August 1, 2009





Granted


819


Vested


(143
)

143Balance as of December 31, 2009


676


143




SuccessorDecember 31, 2009(thousands of units)

Unvested
Units

Vested
UnitsBalance as of August 1, 2009





Granted


169


178Vested


(43
)

43Balance as of December 31, 2009


126


221




59

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23.   Stock-Based Compensation (Cont'd)



Predecessor
2007Risk-free interest rate


4.78%Dividend yield


NilExpected volatility


32.71%Expected life


4.25 years




PredecessorFor the year ended December 31,Five months ended
July 31, 20092008

2007Options

Weighted
average
exercise
price

Options

Weighted
average
exercise
price

Options

Weighted
average
exercise
priceBalance, beginning of year


5,070,900

$
20.29


6,942,451

$
23.47


7,772,300

$
19.70Granted














100,000


11.78Exercised














(22,500
)

10.62Forfeited








(937,885
)

15.23


(839,755
)

12.12Expired


(524,783
)

29.14


(933,666
)

23.37


(67,594
)

22.72Cancelled


(4,546,117
)

21.33











Balance, end of year




$



5,070,900

$
20.29


6,942,451

$
23.47Options exercisable, end of period




$



3,035,456

$
22.07


3,984,005

$
25.90


60

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23.   Stock-Based Compensation (Cont'd)



PredecessorFor the year ended December 31,Five months ended July 31, 2009

2008

2007Options

Weighted
average
grant-date
fair value

Options

Weighted
average
grant-date
fair value

Options

Weighted
average
grant-date
fair valueBalance, beginning of year


2,035,444

$
4.10


2,958,446

$
4.13


4,681,141

$
3.89Granted














100,000


4.02Vested








(507,362
)

4.68


(1,037,515
)

4.07Forfeited








(415,640
)

3.56


(785,180
)

2.78Cancelled


(2,035,444
)

4.10











Balance, end of period




$



2,035,444

$
4.10


2,958,446

$
4.13








61

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



24.   Accumulated Other Comprehensive Income (Loss)



Translation
adjustment

Cash flow
hedges

TotalPredecessorBalance, December 31, 2006

$
(83
)
$


$
(83
)Change in accounting policy  Financial Instruments, net of income taxes





(7
)

(7
)Other comprehensive income (loss), net of income taxes


(105
)

15


(90
)Balance, December 31, 2007

$
(188
)
$
8

$
(180
)Other comprehensive income (loss), net of income taxes


424


(7
)

417Balance, December 31, 2008

$
236

$
1

$
237Other comprehensive income (loss), net of income taxes


(85
)

(1
)

(86
)Balance, July 31, 2009

$
151

$


$
151Fresh start adjustments


(151
)




(151
)SuccessorBalance, July 31, 2009, Successor








Other comprehensive income, net of income taxes, August 1 to December 31, 2009


6





6Balance, December 31, 2009

$
6

$


$
6


62

---





Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

25.   Income Taxes on Components of Other Comprehensive Income (Loss)



PredecessorSuccessorYear Ended December 31Five months
ended
December 31,
2009

Seven months
ended
July 31,
20092008

2007Income tax on unrealized gain (loss) on foreign currency translation adjustment

$


$


$


$
(2
)Income tax on unrealized net loss on derivative financial instruments related to cash flow hedges








(1
)

(4
)Income tax on reclassification of realized net loss on derivative financial instruments to the statement of income








1


(3
)$


$


$


$
(9
)


26.   Financial Instruments



2009

2008Note

Book Value

Fair Value

Book Value

Fair ValueFinancial Assets:Long-term receivables(1)


16

$
39


39

$
65


65Financial liabilities:Long-term debt(1)


19

$
460

$
507

$
644

$
615Redeemable First Preferred Shares  Series 5


22








35


Class A Convertible Preferred Shares(2)


22


103


113












63

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

26.   Financial Instruments (Cont'd)



Fair value measurements at reporting date using:December 31,
2009

Quoted prices in
active markets for
identical assets
(level 1)

Significant other,
observable inputs
(level 2)

Significant
unobservable
inputs
(level 3)Cash and cash equivalents


36


36





Restricted cash


63


63










64

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

26.   Financial Instruments (Cont'd)



December 31, 2009

December 31, 2008Current

$
424

$
4811-30 days overdue


87


10531-90 days overdue


24


25More than 90 days overdue


48


60583


671Allowance for doubtful accounts


(42
)

(60
)Other receivables


21


83$
562

$
694




December 31, 2009

December 31, 2008Balance, Beginning of year

$
60

$
44Bad debt expense(1)


12


27Business disposals





(6
)Write down and other(2)


(30
)

(5
)Balance, end of year

$
42

$
60


(1)For
2009, includes 7 months of Predecessor of $8 million and 5 months Successor of $4 million.(2)For
2009, includes 7 months of Predecessor of ($16 million) and 5 months Successor of ($14 million).




65

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

26.   Financial Instruments (Cont'd)



2010

2011

2012

2013

2014

2015 and
thereafter

TotalCredit Facility(1)

$
2

$
41

$
406

$


$


$


$
449Unsecured notes to be issued











46








46Other long term debt


4


1


1


1








7Capital leases


14


15


14


13


13


1


70Interest payments on other long-term debt and capital leases(2)


6


5


3


1


1





16Interest payments on Credit Facility(2)


40


39


23











102Operating leases


46


33


29


25


19


79


231Capital asset purchase commitments


23


5














28Dividend on Preferred shares


5

















5Preferred shares(3)




















Total contractual cash obligations

$
140

$
139

$
476

$
86

$
33

$
80

$
954


(1)Assumes
mandatory repayments and no exercise of the prepayment option by the Company and no repayment under the mandatory excess cash flow repayment clause.(2)Interest
payments were calculated using the interest rate that would prevail should the debt be reimbursed according to its contractual term, assuming no
repayment under the mandatory excess cash flow repayment clause, and using the outstanding balance as at December 31, 2009.(3)Assumes
no exercise of the prepayment option by the Company. In the event the holders exercise their conversion option, there would be no cash outflows for
the portion converted.




66

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

26.   Financial Instruments (Cont'd)



2009

2008US $

CA $

US $

CA $Net cash, cash equivalents and bank indebtedness


1


10


1


Accounts receivable


14





17


Trade payables and accrued liabilities


1


1


5


Debt








566







67

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

26.   Financial Instruments (Cont'd)



27.   Capital and Liquidity Management





68

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

28.   Supplementary Cash Flow Information

Successor

PredecessorAs of December 31,

2009

2008

2007Cash

$
36

$
98

$
49Cash equivalents





111


12Cash and cash equivalents

$
36

$
209

$
61




PredecessorSuccessorYear Ended December 31Five months
ended
December 31,
2009

Seven months
ended
July 31,
20092008

2007Interest payments

$
18

$
28

$
42

$
128Dividends paid on preferred shares classified as liability











6Income tax paid (net of refund)


2


5


7


(9
)


29.   Commitments, Contingencies and Guarantees



2010

$
462011


332012


292013


252014


192015 and thereafter


79




69

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

29.   Commitments, Contingencies and Guarantees (Cont'd)



70

---





Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits



71

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits (Cont'd)



Pension Benefits

Postretirement BenefitsSuccessor

Predecessor

Successor

PredecessorDecember 31,
2009

July 31,
2009

December 31,
2008

December 31,
2009

July 31,
2009

December 31,
2008Changes in benefit obligationsBenefit obligation, beginning of period

$
895

$
731

$
999

$
60

$
54

$
62Service cost


2


3


7





1


1Interest cost


21


30


52


2


2


4Plan participants' contributions


1


2


3





1


1Plan amendments





(30
)










Divestitures








(115
)







Curtailment gain








(1
)




(4
)

Settlement gain








(2
)







Actuarial loss (gain)


13


153


(109
)

4


8


(7
)Benefits paid


(22
)

(36
)

(48
)

(2
)

(4
)

(5
)Elimination of early measurement date





14








1


Foreign currency changes


7


28


(55
)




1


(2
)Benefit obligation, end of period

$
917

$
895

$
731

$
64

$
60

$
54Changes in plan assetsFair value of plan assets, beginning of period

$
558

$
559

$
795

$


$


$
Actual return on plan assets


50


(7
)

(117
)







Employer contributions


7


18


46


2


3


4Plan participants' contributions


1


2


3





1


1Divestitures








(73
)







Benefits paid


(22
)

(36
)

(48
)

(2
)

(4
)

(5
)Settlement loss








(2
)







Foreign currency changes


5


22


(45
)







Fair value of plan assets, end of period

$
599

$
558

$
559

$


$


$
Reconciliation of funded statusFunded status

$
(318
)
$
(337
)
$
(172
)
$
(64
)
$
(60
)
$
(54
)Unrecognized past service cost (benefit)





(19
)

13





(9
)

(10
)Unrecognized actuarial (gain) loss


(21
)

434


228


4


5


(4
)Adjustment for fourth quarter contributions








3








1Net amount recognized

$
(339
)
$
78

$
72

$
(60
)
$
(64
)
$
(67
)


72

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits (Cont'd)



Pension Benefits

Postretirement BenefitsSuccessor

Predecessor(1)

Successor

Predecessor(1)December 31,
2009

December 31,
2008

December 31,
2009

December 31,
2008Benefit obligations

$
(917
)
$
(720
)
$
(64
)
$
(54
)Fair value of plan assets


599


548





Funded status  plan deficit

$
(318
)
$
(172
)
$
(64
)
$
(54
)


(1)The
measurement date was September 30, 2008. If the Company had used a measurement date of December 31, 2008, the unfunded status would have
been a plan deficit of $325 million (composed of a benefit obligation of $818 million, and a fair value of plan assets of $493 million).


73

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits (Cont'd)



Pension Benefits

Postretirement BenefitsSuccessor

Predecessor

Successor

PredecessorNote

December 31,
2009

December 31,
2008

December 31,
2009

December 31,
2008Accrued pension benefit liability


21

$
(339
)
$
(59
)
$
(60
)
$
(67
)Accrued pension benefit asset


16





131





Net amount recognized




$
(339
)
$
72

$
(60
)
$
(67
)




Successor

PredecessorAsset category

December 31,
2009

December 31,
2008Equity securities


62%


59%Debt securities


35


38Real estate and others


3


3




74

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits (Cont'd)



Fair Value Measurements at December 31, 2009Asset Category

Total

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant
Observable Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)Cash and cash equivalents

$
2

$
2

$


$
Fixed Income (a)Canadian Issuers


70





70


US Issuers


151





151


Equities (b)Large CapCanadian Equities


43


43





US Equities


187


178


6


3Small CapCanadian Equities


12





12


US Equities


18


18





International Equities


106


62


44


Real Estate (c)


8





8


Others (d)


2





1


1Total

$
599

$
303

$
292

$
4


(a)This
category consists of bonds and short-term fixed income securities fair valued based on a compilation of primarily observable market
information or broker quotes in over-the-counter markets.(b)The
fair value of equity investments is based on quoted prices in an active market. The fair value of the equity pooled funds categorized as Level 2
is based on the funds' Net Asset Value (NAV) established by the funds' administrator. Pooled funds which include withdrawal restrictions are categorized as Level 3 and are also valued at
the NAV.(c)The
fair value of the real estate pooled fund categorized as Level 2 is based on the funds' NAV.(d)This
category consists of group insurance contracts and currency forward contracts. The former, categorized as Level 3, is fair valued based on
estimated asset return and projected distributions. Independent valuation is performed yearly. The currency forwards categorized as Level 2 are valued based on a compilation of primarily
observable market information.


75

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits (Cont'd)



Fair Value Measurement Using Significant Unobservable Inputs (Level 3)US Equity

Others

TotalBalance, beginning of year

$
3

$
1

$
4Actual return relating to assets still held at the reporting date


1





1Purchases, sales, and settlements


(1
)




(1
)Balance, end of year

$
3

$
1

$
4




Pension Benefits

Postretirement
Benefits2010

$
49

$
52011


49


52012


51


52013


52


52014


52


52015-2019


280


29


76

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits (Cont'd)



PredecessorSuccessor



Year ended
December 31,Five months ended
December 31,
2009

Seven months ended
July 31,
20092008

2007Service cost

$
2

$
3

$
7

$
11Interest cost


21


30


52


51Actual return on plan assets


(50
)

7


117


(70
)Actuarial loss (gain)


13


153


(64
)

(48
)Plan amendments





(30
)




Settlement loss





3





13Benefit cost before adjustments to recognize the long-term nature of the plans


(14
)

166


112


(43
)Difference between expected return and actual return on plan assets


34


(35
)

(167
)

21Difference between actuarial (gain) loss recognized for the period and actual actuarial (gain) loss on accrued benefit obligation for the
period


(13
)

(151
)

72


60Difference between amortization of past service cost (benefit) for the period and actual plan amendments for the period





30


1


2Amortization of transitional asset











(1
)Net periodic cost


7


10


18


39Defined contribution plans


12


5


37


29Total periodic benefit cost

$
19

$
15

$
55

$
68




77

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits (Cont'd)



PredecessorSuccessorYear ended
December 31,Five months
ended
December 31,
2009

Seven months
ended
July 31,
20092008

2007Defined benefit plansService cost

$


$
1

$
1

$
1Interest cost


2


2


4


4Actuarial loss (gain)


4


8


(7
)

(4
)Curtailment gain





(4
)




Benefit cost before adjustments to recognize the long-term nature of the plans


6


7


(2
)

1Difference between actuarial (gain) loss recognized for the period and actual actuarial (gain) loss on accrued benefit obligation for the
period


(4
)

(8
)

7


4Difference between amortization of past service cost (benefit) for the period and actual plan amendments for the period





(1
)

(2
)

(2
)Total periodic benefit cost

$
2

$
(2
)
$
3

$
3


78

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.   Pension and Other Postretirement Benefits (Cont'd)



Pension Benefits

Postretirement BenefitsSuccessor

Predecessor

Successor

PredecessorYear ended December 31,





Year ended
December 31,December 31,
2009

July 31,
2009

December 31,
2009

July 31,
20092008

2007

2008

2007Accrued benefit obligations assumptions:Discount rate


5.7%


5.8%


7.4%


6.0%


5.7%


5.8%


7.4%


6.2%Rate of compensation increase


3.4%


3.4%


3.5%


3.4%











Benefit costs assumptions:Discount rate


5.8%


7.4%


6.0%


5.6%


5.8%


7.4%


6.2%


5.8%Expected return on plan assets


7.1%


7.1%


7.5%


7.5%











Rate of compensation increase


3.4%


3.4%


3.4%


3.4%
















Postretirement BenefitsSensitivity analysis

1% increase

1% decreaseEffect on benefit obligation

$
5

$
(4
)Effect on service and interest costs








31.   Segmented Information



79

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

31.   Segmented Information (Cont'd)



North
America(1)

Latin
America

Other

Inter-
Segment

TotalRevenuesFive months ended December 31, 2009 (Successor)

$
1,222

$
115

$


$


$
1,337Seven months ended July 31, 2009 (Predecessor)


1,603


132








1,7352008 (Predecessor)


3,723


295





(1
)

4,0172007 (Predecessor)


4,374


285


1


(5
)

4,655Depreciation and amortizationFive months ended December 31, 2009 (Successor)


72


4








76Seven months ended July 31, 2009 (Predecessor)


106


7


3





1162008 (Predecessor)


227


12


1





2402007 (Predecessor)


237


13








250Impairment of assetsFive months ended December 31, 2009 (Successor)


3











3Seven months ended July 31, 2009 (Predecessor)














2008 (Predecessor)


182





1





1832007 (Predecessor)


187


1








188Restructuring and other chargesFive months ended December 31, 2009 (Successor)


30





6





36Seven months ended July 31, 2009 (Predecessor)


22











222008 (Predecessor)


56


2


1





592007 (Predecessor)


35


1








36Goodwill impairment chargeFive months ended December 31, 2009 (Successor)














Seven months ended July 31, 2009 (Predecessor)














2008 (Predecessor)


341











3412007 (Predecessor)


1,823


10








1,833


80

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Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

31.   Segmented Information (Cont'd)

North
America(1)

Latin
America

Other

Inter-
Segment

TotalAdjusted EBITFive months ended December 31, 2009 (Successor)


119


7


(9
)




117Seven months ended July 31, 2009 (Predecessor)


12


4


(8
)




82008 (Predecessor)


109


17


(5
)




1212007 (Predecessor)


181


14


(25
)




170Operating income (loss)Five months ended December 31, 2009 (Successor)


86


7


(15
)




78Seven months ended July 31, 2009 (Predecessor)


(10
)

4


(8
)




(14
)2008 (Predecessor)


(470
)

15


(7
)




(462
)2007 (Predecessor)


(1,864
)

2


(25
)




(1,887
)Additions to property, plant and equipment(2)Five months ended December 31, 2009 (Successor)


39


2








41Seven months ended July 31, 2009 (Predecessor)


51


5








562008 (Predecessor)


93


8


8





1092007 (Predecessor)


251


4


66





321Property, plant and equipment(2)2009 (Successor)


1,031


81


1





1,1132008 (Predecessor)


1,063


94


4





1,161Total assets(2)2009 (Successor)


2,078


266


138





2,4822008 (Predecessor)


2,358


255


207





2,820


(1)Includes
revenues amounting to $222 million and $259 million for the five-month period ended December 31, 2009 and the
seven-month period ended July 31, 2009 respectively ($698 million in 2008 and $857 million in 2007), property, plant and equipment amounting to $87 million
($104 million in 2008) and intangible assets amounting to $32 million (nil in 2008) for Canada.(2)Including
both continued and discontinued operations. Cash flow and balance sheet items for discontinued European operations are included in "Other".




81

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

31.   Segmented Information (Cont'd)



PredecessorSuccessor





Year ended
December 31,Five months ended
December 31, 2009

Seven months ended
July 31, 20092008

2007Marketing Solutions

$
627


47
%
$
742


43
%
$
1,867


46
%
$
2,279


49
%Publishing Services


566


42


810


47


1,685


42


1,842


40Logistics, Premedia and Other


144


11


183


10


465


12


534


11$
1,337


100
%
$
1,735


100
%
$
4,017


100
%
$
4,655


100
%


32.   Related Party Transactions



PredecessorAs of December 31,

2008

2007Companies then under common control:Revenues

$
42

$
56Selling, general and administrative expenses


20


25Management fees billed by Quebecor Inc.





5


82

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

32.   Related Party Transactions (Cont'd)



83

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States



PredecessorSuccessorYear ended
December 31,Five months
ended
December 31,
2009

Seven months
ended
July 31,
20092008

2007Net income (loss), as reported in the consolidated statements of income (loss) per Canadian GAAP

$
21

$
(175
)
$
(1,659
)
$
(2,200
)Adjustments:Preferred shares(1)


8


2


5


10Conversion option(2)


32








Warrants(3)


11








Call option on term loan(4)


(2
)







Fresh start adjustments (net of tax recovery of $3)(5)





449





Gain on settlement of compromised debt (net of taxes of $238)(5)





1,701





Financial reorganization costs(5)





(14
)




Income taxes(7)


(5
)

8


11


(42
)Pension and other postretirement benefits(8)





(5
)

(3
)

Sale-leaseback of a property(9)





(4
)

(8
)

(1
)Inventories(10)





1


2


Loss on disposal of discontinued operations(10)








(9
)

Reduction of a net investment in a foreign operation(11)








108


Convertible senior subordinated notes(12)











3Accounting for derivative instruments(13)











6Total adjustments to net income (loss)


44


2,138


106


(24
)Net income (loss) per US GAAP

$
65

$
1,963

$
(1,553
)
$
(2,224
)Net income allocated to holders of preferred shares(1)


10


11


23


33Net income (loss) per US GAAP available to holders of equity shares


55


1,952


(1,576
)

(2,257
)Weighted average number of equity sharesoutstanding (in thousands):Basic


73,285


205,482


182,644


131,926Diluted


86,226


220,526


182,644


131,926Earnings (loss) per share per US GAAP:Basic

$
0.75

$
9.50

$
(8.63
)
$
(17.11
)Diluted


0.38


8.85


(8.63
)

(17.11
)


84

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



Successor

PredecessorDecember 31, 2009

December 31, 2008Canada

United States

Canada

United StatesAssetsInventories(10)

$
176

$
176

$
234

$
252Property, plant and equipment(9)(10)


1,113


1,113


1,161


1,201Goodwill(5)





174





Other assets(4)(5)(6)(8)(9)


75


139


334


189LiabilitiesAccrued liabilities(1)(7)(8)


280


284


345


352Income and other taxes payable(7)


19


16


41


16Long-term debt(5)(6)(9)


440


506


61


102Other liabilities(2)(3)(7)(8)(9)


515


595


246


522Long-term future income taxes(5)(7)


192


288


43


13Preferred shares(1)


98





35


Shareholders' equity (deficit)Capital stock(1)(3)(5)


628


721


1,595


1,545Contributed surplus(2)


54





103


103Retained earnings (deficit)


21


65


(3,490
)

(3,383
)Accumulated other comprehensive income (loss)(1)(7)(8)(11)


6


16


237


(141
)$
709

$
802

$
(1,555
)
$
(1,876
)


85

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



PredecessorSuccessorYear ended
December 31,Five months
ended
December 31,
2009

Seven months
ended
July 31,
20092008

2007Comprehensive income (loss) as reported in the consolidated statements of comprehensive income per Canadian GAAP

$
27

$
(261
)
$
(1,242
)
$
(2,290
)Adjustments to net income (loss) as per above


44


2,138


106


(24
)Adjustments to other comprehensive income (loss):Pension and other post-retirement benefits(8)


17





(176
)

115Foreign currency translation(1)(11)





(5
)

(106
)

19Taxes(7)


(7
)







(36
)Comprehensive income (loss) as per US GAAP

$
81

$
1,872

$
(1,418
)
$
(2,216
)




Successor

PredecessorDecember 31,
2009

December 31,
2008Accumulated other comprehensive income (loss) as per Canadian GAAP

$
6

$
237Adjustments:Pension and post-retirement benefits, net of tax of 7 (2008  $60)(8)


10


(326
)Foreign currency translation, net of tax of nil(1)(11)





(52
)Accumulated other comprehensive income (loss) as per US GAAP at the end of period

$
16

$
(141
)


86

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



Successor

PredecessorDecember 31,
2009

December 31,
2008Total consolidated shareholders' equity (deficit) as per Canadian GAAP

$
709

$
(1,555
)Adjustments:Current year income adjustments (a)


44


106Current year other comprehensive income adjustments (a)


10


(282
)Reclassification of preferred shares(1)


94


(22
)Reclassification of conversion option(2)


(54
)

Reclassification of warrants(3)


(94
)

Goodwill recorded at fresh start(5)


174


Long term future income taxes(5)


(81
)

Cumulative prior year changes in:Inventories(10)





18Pension and post retirement benefits(8)





(178
)Currency translation adjustments(11)





54Stock-based compensation





(1
)Sale leaseback of a property(9)





(1
)Income taxes(7)





(15
)Total consolidated shareholders' equity (deficit) as per US GAAP at the end of period

$
802

$
(1,876
)


(a)For
2009, these adjustments relate only to the Successor for the five-month period ended December 31, 2009.




87

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



88

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



89

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



UNITED STATES GAAPPredecessor
July 31, 2009

Plan of
Reorganization

Exit
Financing

Fresh
Start

Successor
July 31,
2009AssetsCurrent assets:Cash and cash equivalents

$
293

$
(104
)
$
(124
)
$


$
65Accounts receivable


485


(23
)




(11
)

451Inventories


208








(13
)

195Income taxes receivable


33


(26
)







7Future income taxes


9


9





(4
)

14Prepaid expenses and deposits


61


5





(1
)

65Total current assets


1,089


(139
)

(124
)

(29
)

797Property, plant and equipment


1,165


9





(48
)

1,126Intangible assets











389


389Goodwill











174


174Restricted cash


93


(33
)







60Future income taxes


16


5








21Other assets


189


(4
)

76


(104
)

157Total assets

$
2,552

$
(162
)
$
(48
)
$
382

$
2,724


90

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)

UNITED STATES GAAPPredecessor
July 31, 2009

Plan of
Reorganization

Exit
Financing

Fresh
Start

Successor
July 31,
2009Liabilities and Shareholders' Equity (Deficit)Current liabilities:Bank indebtedness

$
2

$


$


$


$
2Trade payables


91


(3
)







88Accrued liabilities


298


(6
)




(17
)

275Amounts owing in satisfaction of bankruptcy claims





48








48Income and other taxes payable


19


(6
)




1


14Current portion of long term debt


13











13Current portion of liabilities subject to compromise


166


(166
)







Total current liabilities


589


(133
)




(16
)

440Liabilities subject to compromise


2,924


(2,924
)







DIP Financing


587





(587
)




Long-term debt


105


6





(45
)

66Exit Financing








539





539Unsecured notes





43








43Other liabilities


481


183





1


665Future income taxes


2


255





(7
)

250Shareholders' equity (deficit):Capital stock  predecessor


1,545








(1,545
)

Capital stock  successor





721








721Contributed surplus


107








(107
)

Retained earnings (deficit)


(3,556
)

1,687





1,869


Accumulated other comprehensive income (loss)


(232
)







232


(2,136
)

2,408





449


721Total liabilities and shareholders' equity (deficit)

$
2,552

$
(162
)
$
(48
)
$
382

$
2,724


91

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



92

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



93

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



94

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



95

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



96

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



PredecessorJuly 31,
2009

December 31,
2008Balance, beginning of period

$
81

$
46Additions to tax postions related to the current year


34


51Additions to tax postions related to the prior year


12


2Reductions for tax postions related to the prior year





(5
)Settlements with tax authorities





(9
)Lapse of applicable statues of limitations





(2
)Variation in foreign exchange





(2
)Gross UTBs


127


81Adjustments to reflect net reporting (a)


(75
)

(46
)Balance of UTBs, end of period

$
52

$
35


(a)The
adjusments reflect the amount of UTBs that do not meet the asset recognition criteria




97

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



PredecessorSuccessorYear ended
December 31,Five months
ended
December 31,
2009

Seven months
ended
July 31,
20092008

2007Current service cost

$
2

$
3

$
8

$
12Interest cost


21


31


54


54Expected return on assets


(14
)

(26
)

(49
)

(49
)9


8


13


17Amortization of:Net prior service credit











(1
)Net loss





6


8


13Total amortization





6


8


12Net periodic benefit cost of defined benefit plans


9


14


21


29Curtailment/settlement loss (gain)





(1
)

3


13Defined contribution plans


12


5


37


29Net periodic benefit cost

$
21

$
18

$
61

$
71




98

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33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



Pension Benefits



Postretirement BenefitsSuccessor

Predecessor

Successor

PredecessorDecember 31,
2009

July 31,
2009

December
31, 2008

December 31,
2009

July 31,
2009

December 31,
2008Changes in benefit obligationsBenefit obligation, beginning of period

$
895

$
818

$
999

$
60

$
59

$
62Service cost


2


3


7





1


1Interest cost


21


29


51


2


2


4Plan participants' contributions


1


1


4





1


2Plan amendments





(30
)







(2
)

Divestitures








(115
)







Curtailment gain








(1
)




(2
)

Actuarial loss (gain)


13


69


(24
)

4


3


(2
)Benefits paid


(22
)

(23
)

(63
)

(2
)

(3
)

(6
)Elimination of early measurement date








15








1Foreign currency changes


7


28


(55
)




1


(3
)Benefit obligation, end of period

$
917

$
895

$
818

$
64

$
60

$
59Changes in plan assetsFair value of plan assets, beginning of period

$
558

$
493

$
795

$


$


$
Actual return on plan assets


50


50


(176
)







Employer contributions


7


15


49


2


2


5Plan participants' contributions


1


1


4





1


2Divestitures








(73
)







Benefits paid


(22
)

(23
)

(63
)

(2
)

(3
)

(7
)Foreign currency changes


5


22


(43
)







Fair value of plan assets, end of period

$
599

$
558

$
493

$


$


$
Funded status

$
(318
)
$
(337
)
$
(325
)
$
(64
)
$
(60
)
$
(59
)




99

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Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



PensionNet
actuarial
loss

Net prior
service
cost

Net
transitional
asset

TotalPredecessorBalance, December 31, 2007

$
(207
)
$
(14
)
$
2

$
(219
)Recognized in comprehensive income during the year


(178
)

4


(2
)

(176
)Balance, December 31, 2008


(385
)

(10
)




(395
)Eliminated on Fresh-start Date


385


10





395SuccessorBalance, August 1, 2009











Recognized in comprehensive income during the five-month period


(21
)







(21
)Balance, end of year

$
(21
)
$


$


$
(21
)




Other Postretirement BenefitsNet actuarial
loss

Net prior
service cost

TotalPredecessorBalance, December 31, 2007

$
(3
)
$
12

$
9Recognized in comprehensive income during the year


3


(3
)

Balance, December 31, 2008





9


9Eliminated on Fresh-start Date





(9
)

(9
)SuccessorBalance, August 1, 2009








Recognized in comprehensive income during the five-month period


4





4Balance, end of year

$
4

$


$
4




100

---



Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



Fair Value Measurements at December 31, 2009Total

Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)

Significant
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)AssetsCash and cash equivalents

$
36

$
36

$


$
LiabilitiesWarrants (a)

$
83

$


$
83

$
Conversion option on preferred shares (b)


22








22


a.The
fair value of the warrants was initially estimated using a Black-Scholes option pricing model using the following significant inputs as at the
Fresh-start date:


Risk-free interest rate


2.9%Implied volatility


23.5%Dividend yield


NilExpected life


5 years




Implied volatility


23.5%Dividend yield


Nil




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



Conversion
Option

Warrants

TotalBeginning balance, Fresh-start Date

$
54

$
94

$
148Total gains included in earnings (all unrealized)


(32
)

(11
)

(43
)Transfers out of Level 3





(83
)

(83
)22





22Total gains included in earnings attributable to change in unrealized gains relating to liabilities still held at reporting date

$
(32
)
$
(11
)
$
(43
)




North
America

Latin
America

TotalBalance as of January 1, 2009

$
2,164

$
10

$
2,174Accumulated impairment losses


(2,164
)

(10
)

(2,174
)





Goodwill recognized on Fresh-start Date


157


17


174Accumulated impairment losses








Balance as of December 31, 2009

$
157

$
17

$
174


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33.   Significant Differences between Generally Accepted Accounting Principles in Canada and the United States (Cont'd)



SuccessorFive months
ended
December 31,
2009BasicNet income from continuing operations

$
65Dividends on preferred shares


10Net income from continuing operations available to holders of equity shares

$
55Basic weighted-average number of equity shares outstanding (in thousands)


73,285Earnings per share:Basic

$
0.75DilutedNet income from continuing operations available to holders of equity shares

$
55Impact of conversion option on preferred shares


(32
)Dividend on preferred shares


10Net income from continuing operations available to holders of equity shares assuming conversion

$
33Basic weighted-average number of equity shares outstanding (in thousands)


73,285Additional shares assuming conversion of preferred shares


12,941Diluted weighted-average number of equity shares outstanding (in thousands)


86,226Diluted earnings per share:

$
0.38




34.   Subsequent Events



103

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

34.   Subsequent Events (Cont'd)





104

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Table of Contents



GRAPHIC



World Color Press Inc.(Formerly Quebecor World Inc.)



MANAGEMENT'S DISCUSSION AND ANALYSIS



FOR THE YEAR ENDED DECEMBER 31, 2009



INCLUDING THE SEVEN MONTHS ENDED JULY 31, 2009 FOR THE PREDECESSOR AND THE FIVE MONTHS
ENDED DECEMBER 31, 2009 FOR THE SUCCESSOR



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Table of Contents

TABLE OF CONTENTS

Subject

PageIntroduction, highlights, presentation of financial information, combined financial results and forward-looking statements

31.    Creditor protection and the plan of reorganization

72.    Financial review

152.1 Industry trends and outlook

152.2 Fiscal year ended December 31, 2009 compared to 2008

162.3 Fiscal year ended December 31, 2008 compared to 2007

192.4 Three months ended December 31, 2009 compared to 2008

212.5 Segment results

222.6 Impairment of assets and restructuring initiatives

263.    Financial position

303.1 Consolidated balance sheet

303.2 Free cash flow

323.3 Credit ratings

324.    Liquidity and capital resources

324.1 DIP financing

324.2 Exit financing

334.3 Unsecured notes to be issued

344.4 Cash flow

355.    Critical accounting estimates, changes in accounting standards and adoption of new accounting policies

385.1 Critical accounting estimates

385.2 Changes in accounting standards and adoption of new accounting policies

426.    Off-balance sheet arrangements, derivative financial instruments and other disclosures

466.1 Risk arising from financial instruments

466.2 Contractual obligations

486.3 Share capitalization

496.4 Related party transactions

527.    Quarterly trends

548.    Subsequent events

559.    Controls and procedures

569.1 Evaluation of disclosure controls and procedures

569.2 Management's Report on Internal Control over Financial Reporting

569.3 Material Changes in Internal Control over Financial Reporting

57


2

---



Table of Contents

Introduction

The following is a discussion of the consolidated financial condition and results of operations of World Color Press Inc. ("we", "us", "our",
the "Company", the "Successor" or "Worldcolor"), the successor company of Quebecor World Inc. ("QWI" or the "Predecessor") for the years ended December 31, 2009 and 2008, and for the
three month periods then ended, and it should be read together with the Company's consolidated financial statements. All references made to "Notes" in the Management's Discussion and Analysis ("MD&A")
correspond to the Notes to the consolidated financial statements for the year ended December 31, 2009, which include the seven months ended July 31, 2009 for the predecessor and the five
months ended December 31, 2009 for the successor (see "Presentation of financial information and combined financial results"). The consolidated financial statements and this MD&A have
been reviewed and approved by the Company's Board of Directors. This discussion contains forward-looking information that is qualified by reference to, and should be read together with, the discussion
regarding forward-looking statements that is part of this MD&A. Management determines whether or not information is "material" based on whether it believes a reasonable investor's decision to buy,
sell or hold securities in the Company would likely be influenced or changed if the information were omitted or misstated.

A
detailed discussion on the Company's risks and uncertainties can be found in the Company's public filings, including the Annual Information Form, available on SEDAR at www.sedar.com or on EDGAR at
www.sec.gov and on our website at www.worldcolor.com.

Highlights

Financial





Customers



3

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Other



Presentation of financial information and combined financial results

As described in Note 1 to the 2009 annual consolidated financial statements, on January 21, 2008 (the "Filing Date"), QWI
obtained an order from the Quebec Superior Court granting creditor protection under theCompanies' Creditors Arrangement Act(the "CCAA") for
itself and for 53 U.S. subsidiaries (the "U.S. Subsidiaries" and, collectively with QWI, the "Applicants"). On the same date, the U.S. Subsidiaries filed a petition
under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the Southern District of New York (the "U.S. Bankruptcy Court"). The proceedings under the
CCAA and Chapter 11 are hereinafter collectively referred to as the "Insolvency Proceedings".

On
June 22, 2009, the creditors of the Applicants approved a plan of compromise and reorganization (the "Plan") under both the CCAA and Chapter 11. On June 30, 2009, the
Plan was sanctioned by the Quebec Superior Court, and it was confirmed by the U.S. Bankruptcy Court on July 2, 2009. The Plan

4

---



Table of Contents

was
implemented following various transactions that were completed on July 21, 2009 (the "Effective Date"). Accordingly, the Applicants emerged from bankruptcy protection and QWI was
renamed and began operating as Worldcolor on the Effective Date.

The
implementation of the Plan on July 21, 2009 resulted in a substantial realignment of the interests in the Company between its existing creditors and shareholders as of the Filing Date. As a
result, the Company adopted fresh start accounting effective July 21, 2009. In light of the proximity of the Effective Date to the end of its accounting period immediately following
July 21, 2009, which is July 31, 2009, the Company has elected to adopt fresh start accounting and account for the effects of the Plan, including the cancellation of the old capital
stock of QWI and the creation and issuance of Worldcolor's new capital stock, as if such events had occurred on July 31, 2009 (the "Fresh-start Date"). Due to our adoption of fresh start
accounting, the accompanying consolidated statement of income (loss) includes the results of operations for (i) the seven months ended July 31, 2009 of the Predecessor and
(ii) the five months ended December 31, 2009 of the Successor. Therefore, for the purpose of the management's discussion and analysis of the results of operations, we combined the period
and year-to-date results of operations of the Predecessor and the Successor.
The resulting combined results of operations for the three months ended September 30, 2009 and twelve months ended December 31, 2009 are then compared to the corresponding periods in the
prior year.

We
believe the combined results of operations, specifically revenues, EBITDA and operating income for the twelve months ended December 31, 2009 provide management and investors with a more
meaningful perspective on Worldcolor's ongoing financial and operational performance and trends than if we did not combine the results of operations of the Predecessor and the Successor in this
manner. Similarly, we combined the operations of the Predecessor and the Successor when discussing our sources and uses of cash for the twelve months ended December 31, 2009. Nevertheless, the
application of fresh start accounting results in the financial statements of the Successor may not be comparable to the Predecessor in many respects (see "Risks factors" section in our Annual
Information Form).

The
consolidated financial statements included in this MD&A have been prepared in conformity with Canadian generally accepted accounting principles ("GAAP"). For a discussion of the significant
differences between Canadian GAAP and U.S. GAAP, see Note 33.

In
this MD&A the Company uses certain financial measures that are not calculated in accordance with Canadian GAAP or U.S. GAAP to assess its financial performance, including EBITDA (earnings
before interest, tax, depreciation and amortization), Adjusted EBITDA, Adjusted EBIT, and free cash flow. The Company uses such non-GAAP financial measures because the Company believes
that they are meaningful measures of its performance. The Company's method of calculating these non-GAAP financial measures may differ from the methods used by other companies and, as a
result, the non-GAAP financial measures presented in this MD&A may not be comparable to other similarly titled measures disclosed by other companies. These non-GAAP measures
are intended to provide additional information on the performance of the Company and should not be considered in isolation or as substitutes for measures of performance prepared in accordance with
Canadian GAAP or U.S. GAAP. Numerical reconciliations are provided in Figures 5, 6, 7 and 8.

Since
the Effective Date, the Company's reporting currency and its functional currency is the U.S. dollar.

Forward-looking statements

To the extent any statements made in this MD&A contain information that is not historical, these statements are forward-looking statements as fully
described in our Annual Information Form for the year ended December 31, 2009 section "Forward Looking Statements".

5

---



Table of Contents

Unless
mentioned otherwise, the forward-looking statements in this MD&A reflect the Company's expectations as of March 1, 2010, being the date at which they have been approved, and are subject
to change after this date. The Company expressly disclaims 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.

6

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1.     Creditor protection and the plan of reorganization



7

---



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1.     Creditor protection and the plan of reorganization (Cont'd)







8

---



Table of Contents

1.     Creditor protection and the plan of reorganization (Cont'd)



in millionsClaims filed net of withdrawn and expunged claims as at February 8, 2010

$
7,394Less:Excluded claims


2,460Duplicate claims


1,867Claims filed net of withdrawn and expunged, excluded and duplicate claims


3,067Claims still under review


286Liabilities subject to compromise (excluding post-filing interest)

$
2,781




9

---



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1.     Creditor protection and the plan of reorganization (Cont'd)



10

---



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1.     Creditor protection and the plan of reorganization (Cont'd)



11

---



Table of Contents

1.     Creditor protection and the plan of reorganization (Cont'd)



Predecessor
July 31, 2009

Plan of
Reorganization

Exit
Financing

Fresh Start
Adjustments

Successor
July 31, 2009AssetsCurrent assets:Cash and cash equivalents

$
293

$
(104
)
$
(124
)
$


$
65Accounts receivable


485


(23
)




(11
)

451Inventories


190








5


195Income taxes receivable


33


(26
)







7Future income taxes


9


9





(4
)

14Prepaid expenses and deposits


61


5





(1
)

65Total current assets


1,071


(139
)

(124
)

(11
)

797Property, plant and equipment


1,121


9





(4
)

1,126Intangible assets











389


389Restricted cash


93


(33
)







60Future income taxes


2


5





14


21Other assets


348


(4
)




(263
)

81Total assets

$
2,635

$
(162
)
$
(124
)
$
125

$
2,474Liabilities and Shareholders' equity (deficit)Current liabilities:Bank indebtedness

$
2

$


$


$


$
2Trade payables


91


(3
)







88Accrued liabilities


293


(6
)




(12
)

275Amounts owing in satisfaction of bankruptcy claims





48








48Income and other taxes payable


44


(3
)




(27
)

14Future income taxes














Current portion of long term debt


13











13Current portion of liabilities subject to compromise


166


(166
)







Total current liabilities


609


(130
)




(39
)

440Liabilities subject to compromise


2,924


(2,924
)







DIP financing


587





(587
)




Long-term debt


57


6





3


66Exit financing








463





463Unsecured Notes





43








43Other liabilities


183


32





302


517Future income taxes


47


174





(52
)

169Preferred shares  Predecessor


26








(26
)

Preferred shares  Successor





94








94Shareholders' equity (deficit):Capital stock  Predecessor


1,609








(1,609
)

Capital stock  Successor





721





(93
)

628Contributed surplus


107


54





(107
)

54Deficit


(3,665
)

1,768





1,897


Accumulated other comprehensive income (loss)


151








(151
)

(1,798
)

2,543





(63
)

682Total liabilities and shareholders' equity (deficit)

$
2,635

$
(162
)
$
(124
)
$
125

$
2,474




12

---



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1.     Creditor protection and the plan of reorganization (Cont'd)



13

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1.     Creditor protection and the plan of reorganization (Cont'd)













14

---





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2.     Financial review



15

---



Table of Contents

2.     Financial review (Cont'd)





Revenues by Service ($ millions)For the quarter and the year ended December 31 (Continuing Operations)

GRAPHIC



Selected Annual Information (Continuing Operations)($ millions)

Combined

PredecessorYears ended December 312009

2008

2007Consolidated ResultsOperating Revenues

$
3,072

$
4,017

$
4,655Adjusted EBITDA


329


379


480Adjusted EBIT


125


121


170IAROC


61


242


224Goodwill impairment charge





341


1,833Operating income (loss)


64


(462
)

(1,887
)Net loss from continuing operations


(154
)

(944
)

(1,837
)Net loss


(154
)

(1,659
)

(2,200
)Figure 2


IAROC:
Impairment of assets, restructuring and other charges

Adjusted
EBITDA and EBIT: Defined as before IAROC and goodwill impairment charge




16

---



Table of Contents

2.     Financial review (Cont'd)



Impact of Foreign Currency and Paper Sales($ millions)

Successor

CombinedThree months ended
December 31, 2009

Twelve months ended
December 31, 2009Foreign currency favorable (unfavorable) impact on operating revenues

$
24

$
(58
)Paper sales unfavorable impact on revenues

$
(81
)
$
(280
)Foreign currency favorable impact on operating income

$
3

$
6Figure 3




17

---



Table of Contents

2.     Financial review (Cont'd)



18

---



Table of Contents

2.     Financial review (Cont'd)



19

---



Table of Contents

2.     Financial review (Cont'd)



20

---



Table of Contents

2.     Financial review (Cont'd)



21

---



Table of Contents

2.     Financial review (Cont'd)



22

---



Table of Contents

2.     Financial review (Cont'd)

Segment Results of Continuing Operations ($ millions)(1)Selected Performance Indicators

North America

Latin America

Inter-Segment and Others

Total2009

2008

2007

2009

2008

2007

2009

2008

2007

2009

2008

2007Three months ended December 31Operating revenues

$
772

$
957

$
1,149

$
76

$
77

$
82

$


$
(1
)
$


$
848

$
1,033

$
1,231Adjusted EBITDA


131


105


140


8


12


9


(7
)

1


(11
)

132


118


138Adjusted EBIT


86


40


30


6


9


6


(9
)

1


(11
)

83


50


25IAROC


25


186


120


1


1


2


4


1





30


188


122Goodwill impairment charge





341


1,823








10














341


1,833Operating income (loss)


62


(487
)

(1,913
)

5


8


(6
)

(14
)




(11
)

53


(479
)

(1,930
)Adjusted EBITDA margin (%)


17.0


11.0


12.2


10.5


15.6


11.0











15.6


11.4


11.2Adjusted EBIT margin (%)


11.1


4.2


2.6


7.9


11.7


7.3











9.8


4.8


2.0Operating margin (%)


8.0


(50.9
)

(166.5
)

6.6


10.4


(7.3
)










6.3


(46.4
)

(156.8
)Capital expenditures(2)

$
22


26


110

$



4


1

$






13

$
22


30


124Change in non-cash balances related to operations, cash flow (outflow)(2)


(6
)

(96
)

(4
)

(4
)

(1
)

(6
)

12


109


(111
)

2


12


(121
)Twelve months ended December 31Operating revenues

$
2,825

$
3,723

$
4,374

$
247

$
295

$
285

$


$
(1
)
$
(4
)
$
3,072

$
4,017

$
4,655Adjusted EBITDA


319


354


478


24


30


26


(14
)

(5
)

(24
)

329


379


480Adjusted EBIT


129


110


181


13


17


13


(17
)

(6
)

(24
)

125


121


170IAROC


54


238


222


1


2


2


6


2





61


242


224Goodwill impairment charge





341


1,823








10














341


1,833Operating income (loss)


76


(470
)

(1,864
)

11


15


2


(23
)

(7
)

(25
)

64


(462
)

(1,887
)Adjusted EBITDA margin (%)


11.3


9.5


10.9


9.7


10.2


9.1











10.7


9.4


10.3Adjusted EBIT margin (%)


4.6


3.0


4.1


5.3


5.8


4.6











4.1


3.0


3.7Operating margin (%)


2.7


(12.6
)

(42.6
)

4.5


5.1


0.7











2.1


(11.5
)

(40.5
)Capital expenditures(2)

$
90


92


252

$
7


9


3

$



8


66

$
97


109


321Change in non-cash balances related to operations, cash flow (outflow)(2)


129


(63
)

(19
)

(7
)

(9
)

(12
)

19


198


(115
)

141


126


(146
)Figure 4


IAROC:
Impairment of assets, restructuring and other charges 
Adjusted EBITDA and EBIT: Defined as before IAROC and goodwill impairment charge

(1)The
2009 column includes Predecessor and Successor's combined results. 
The 2008 and 2007 columns include the Predecessor's results.(2)Including
both continuing and discontinued operations




23

---



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2.     Financial review (Cont'd)



24

---



Table of Contents

2.     Financial review (Cont'd)



25

---





Table of Contents



26

---



Table of Contents

Reconciliation of non-GAAP measures($ millions)

Combined

Predecessor

PredecessorYears ended December 312009

2008

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

$
64

$
(462
)
$
(1,887
)Impairment of assets, restructuring and other charges ("IAROC")


61


242


224Goodwill impairment charge





341


1,833Adjusted EBIT(1)

$
125

$
121

$
170Operating income (loss)

$
64

$
(462
)
$
(1,887
)Depreciation of property, plant and equipment(2)


175


262


311Amortization of other assets(2)


12


19


60Amortization of customer relationships(2)


17





Less depreciation and amortization from discontinued operations





(23
)

(61
)Operating income (loss) before depreciation and amortization ("EBITDA")

$
268

$
(204
)
$
(1,577
)IAROC


61


242


224Goodwill impairment charge





341


1,833Adjusted EBITDA(1)

$
329

$
379

$
480Figure 5


(1)Adjusted
EBIT and Adjusted EBITDA are the measures the Company has historically used to assess segment profitability. Adjusted EBITDA excludes the following
items: IAROC, goodwill impairment charge, financial expenses, effective interest on preferred shares classified as liability, dividends, depreciation, amortization, reorganization expenses and income
taxes, that are not under the control of the business segments and that are not considered in the measurement of their profitability. These items are typically managed by Worldcolor's corporate head
office which focuses on strategy development and oversees governance, policy, compliance, human resources, legal, tax and other financial matters. These measures do not have any standardized meanings
provided by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.(2)As
reported in the consolidated statements of cash flows.


27

---



Table of Contents

Reconciliation of non-GAAP measures($ millions)

Successor

PredecessorThree months ended December 31,2009

2008Operating income (loss) from continuing operationsadjustedOperating income (loss)

$
53

$
(479
)Impairment of assets, restructuring and other charges ("IAROC")


30


188Goodwill impairment charge





341Adjusted EBIT(1)

$
83

$
50Operating income (loss)

$
53

$
(479
)Depreciation of property, plant and equipment(2)


38


63Amortization of other assets(2)





5Amortization of customer relationships(2)


11


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

$
102

$
(411
)IAROC


30


188Goodwill impairment charge





341Adjusted EBITDA(1)

$
132

$
118Figure 6


(1)Adjusted
EBIT and Adjusted EBITDA are the measures the Company has historically used to assess segment profitability. Adjusted EBITDA excludes the following
items: IAROC, goodwill impairment charge, financial expenses, effective interest on preferred shares classified as liability, dividends, depreciation, amortization, reorganization expenses and income
taxes, that are not under the control of the business segments and that are not considered in the measurement of their profitability. These items are typically managed by Worldcolor's corporate head
office which focuses on strategy development and oversees governance, policy, compliance, human resources, legal, tax and other financial matters. These measures do not have any standardized meanings
provided by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.(2)As
reported in the consolidated statements of cash flows.


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Table of Contents

Reconciliation of non-GAAP measures($ millions)

Combined

Predecessor

PredecessorYears ended December 31,2009

2008

2007Free cash flow(1)Cash provided by operating activities

$
217

$
90

$
68Dividends on preferred shares








(18
)Additions to property, plant and equipment


(97
)

(109
)

(321
)Net proceeds from disposal of assets


4


25


101Net proceeds from business disposals





44


Free cash flow

$
124

$
50

$
(170
)Figure 7


Reconciliation of non-GAAP measures($ millions)

Successor

PredecessorThree months ended December 31,2009

2008Free cash flow(1)Cash provided by operating activities

$
100

$
(9
)Additions to property, plant and equipment


(22
)

(30
)Net proceeds from disposal of assets


1


Net proceeds from business disposals





Free cash flow

$
79

$
(39
)Figure 8


(1)We
present free cash flow as additional information as we believe it is a useful indicator of our ability to operate without reliance on additional
borrowing or usage of existing cash. Free cash flow is a measure of the net cash generated which is available for debt repayment and investment in strategic opportunities. Free cash flow is not a
calculation based on or derived from Canadian or U.S. GAAP and should not be considered as an alternative to the consolidated statement of cash flows and is unlikely to be comparable to similar
measures presented by other companies.


29

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Table of Contents

3.     Financial position



Successor

Predecessor($ millions)

December 31,
2009

December 31,
2008

ChangeAssetsCurrent assets


841


1,222


(381
)Property, plant and equipment


1,113


1,161


(48
)Intangible assets


372





372Other long-term assets


156


437


(281
)Total assets

$
2,482

$
2,820

$
(338
)Liabilities and Shareholders' equity (deficit)Current liabilities


482


3,990


(3,508
)Long-term debt


440


61


379Unsecured notes to be issued


46





46Other liabilities


515


246


269Future income taxes


192


43


149Preferred shares


98


35


63Shareholders' equity (deficit)


709


(1,555
)

2,264Total liabilities and shareholders' equity (deficit)

$
2,482

$
2,820

$
(338
)








30

---



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3.     Financial position (Cont'd)

















31

---



Table of Contents

3.     Financial position (Cont'd)



Successor

Predecessor

Combined

PredecessorThree months ended
December 31,

Twelve months ended
December 31,Free cash flow($ millions)

2009

2008

2009

2008$
79

$
(39
)
$
124

$
50




Rating AgencyMoody's

S&PCorporate


B2

B+


4.     Liquidity and capital resources



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---



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4.     Liquidity and capital resources (Cont'd)



33

---



Table of Contents

4.     Liquidity and capital resources (Cont'd)



34

---



Table of Contents

4.     Liquidity and capital resources (Cont'd)



Successor

Predecessor

Combined

PredecessorThree months ended
December 31,

Twelve months ended
December 31,Cash provided by (used in) operating activities($ millions)

2009

2008

2009

2008$
100

$
(9
)
$
217

$
90




Successor

Predecessor

Combined

PredecessorThree months ended December 31,

Twelve months ended December 31,Cash provided by (used in) financing activities($ millions)

2009

2008

2009

2008$
(91
)
$
11

$
(327
)
$
161




35

---



Table of Contents

4.     Liquidity and capital resources (Cont'd)



Successor

Predecessor

Combined

PredecessorThree months ended
December 31,

Twelve months ended
December 31,Cash provided by (used in) investing activities($ millions)

2009

2008

2009

2008$
(25
)
$
(22
)
$
(59
)
$
(87
)




36

---



Table of Contents

4.     Liquidity and capital resources (Cont'd)



37

---





Table of Contents

5.     Critical accounting estimates, changes in accounting standards and adoption of new accounting policies



38

---



Table of Contents

5.     Critical accounting estimates, changes in accounting standards and adoption of new accounting policies (Cont'd)



Pension Benefits

Postretirement BenefitsSuccessor

Predecessor

Successor

PredecessorYear ended
December 31,





Year ended
December 31,December 31,
2009

July 31,
2009

December 31,
2009

July 31,
20092008

2007

2008

2007Accrued benefit obligations assumptions:Discount rate


5.7%


5.8%


7.4%


6.0%


5.7%


5.8%


7.4%


6.2%Rate of compensation increase


3.4%


3.4%


3.5%


3.4%











Benefit costs assumptions:Discount rate


5.8%


7.4%


6.0%


5.6%


5.8%


7.4%


6.2%


5.8%Expected return on plan assets


7.1%


7.1%


7.5%


7.5%











Rate of compensation increase


3.4%


3.4%


3.4%


3.4%











Figure 9




39

---



Table of Contents

5.     Critical accounting estimates, changes in accounting standards and adoption of new accounting policies (Cont'd)



40

---



Table of Contents

5.     Critical accounting estimates, changes in accounting standards and adoption of new accounting policies (Cont'd)



Postretirement BenefitsSensitivity analysis

1% increase

1% decreaseEffect on benefit obligation

$
5

$
(4
)Effect on service and interest costs










41

---



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5.     Critical accounting estimates, changes in accounting standards and adoption of new accounting policies (Cont'd)





42

---



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5.     Critical accounting estimates, changes in accounting standards and adoption of new accounting policies (Cont'd)







43

---



Table of Contents

5.     Critical accounting estimates, changes in accounting standards and adoption of new accounting policies (Cont'd)













44

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5.     Critical accounting estimates, changes in accounting standards and adoption of new accounting policies (Cont'd)







45

---





Table of Contents

6.     Off-balance sheet arrangements, derivative financial instruments and other disclosures



2009

2008US $

CA $

US $

CA $Net cash, cash equivalents and bank indebtedness


1


10


1


Accounts receivable


14





17


Trade payables and accrued liabilities


1


1


5


Debt








566







46

---



Table of Contents

6.     Off-balance sheet arrangements, derivative financial instruments and other disclosures (Cont'd)



47

---



Table of Contents

6.     Off-balance sheet arrangements, derivative financial instruments and other disclosures (Cont'd)



2009

2008Book
Value

Fair
Value

Book
Value

Fair
ValueFinancial Assets:Long-term receivables(1)

$
39


39

$
70


65Financial liabilities:Long-term debt(1)

$
460

$
507

$
644

$
615Redeemable First Preferred SharesSeries 5








35


Class A Convertible Preferred Shares(2)


103


113








(1)Includes
current portion.(2)Includes
current portion of $5 million recorded in accrued liabilities.




48

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Table of Contents

6.     Off-balance sheet arrangements, derivative financial instruments and other disclosures (Cont'd)

Financial Cash Obligations($ millions)

2010

2011

2012

2013

2014

2015 and
thereafter

TotalCredit Facility(1)


2


41


406











449Unsecured notes to be issued











46








46Other long term debt


4


1


1


1








7Capital leases


14


15


14


13


13


1


70Interest payments on other long-term debt and capital leases(2)


6


5


3


1


1





16Interest payments on Credit Facility(2)


40


39


23











102Operating leases


46


33


29


25


19


79


231Capital asset purchase commitments


23


5














28Dividend on Preferred shares


5

















5Preferred shares(3)




















Total contractual cash obligations


140


139


476


86


33


80


954Figure 10


(1)Assumes
mandatory repayments and no exercise of the prepayment option by the Company and no repayment under the mandatory excess cash flow repayment clause.(2)Interest
payments were calculated using the interest rate that would prevail should the debt be reimbursed according to its contractual term, assuming no
repayment under the mandatory excess cash flow repayment clause, and using the outstanding balance as at December 31, 2009.(3)Assumes
no exercise of the prepayment option by the Company. In the event the holders exercise their conversion option, there would be no cash outflows for
the portion converted.




49

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Table of Contents

6.     Off-balance sheet arrangements, derivative financial instruments and other disclosures (Cont'd)



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

February 25, 2010Issued and outstanding

Book valueCommon Shares


73,285

$
534Preferred Shares, Class A


12,500


101Warrants, Series I


10,723


57Warrants, Series II


10,723


37Figure 11








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6.     Off-balance sheet arrangements, derivative financial instruments and other disclosures (Cont'd)



51

---



Table of Contents

6.     Off-balance sheet arrangements, derivative financial instruments and other disclosures (Cont'd)



52

---



Table of Contents

6.     Off-balance sheet arrangements, derivative financial instruments and other disclosures (Cont'd)



PredecessorAs of December 31,

2008

2007Companies then under common control:Revenues

$
42

$
56Selling, general and administrative expenses


20


25Management fees billed by Quebecor Inc.





5




53

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Table of Contents

7.     Quarterly trends

Selected Quarterly Financial Data (Continuing Operations)($ millions)

Successor

Combined

Predecessor2009

2008Q4

Q3

Q2

Q1

Q4

Q3

Q2

Q1Consolidated ResultsOperating revenues

$
848

$
770

$
702

$
752

$
1,033

$
994

$
976

$
1,014Adjusted EBITDA


132


103


58


36


118


94


93


74Adjusted EBIT


83


52


5


(15
)

50


34


28


9IAROC


30


12


4


15


188


7


11


36Goodwill impairment charge














341








Operating income (loss)


53


39


2


(30
)

(479
)

27


17


(27
)Operating margin


6.3%


5.1%


0.3%


(4.0%
)

(46.4%
)

2.7%


1.7%


(2.7%
)Adjusted EBITDA margin


15.6%


13.4%


8.3%


4.8%


11.4%


9.5%


9.5%


7.3%Adjusted EBIT margin


9.8%


6.8%


0.7%


(2.0%
)

4.8%


3.4%


2.9%


0.9%Net income (loss) from continuing operations

$
18

$
13

$
(59
)
$
(126
)
$
(654
)
$
(64
)
$
(78
)
$
(148
)Net income (loss)


18


13


(59
)

(126
)

(654
)

(64
)

(751
)

(190
)Per Share DataEarnings (loss) per shareBasic and diluted


0.25



**

(0.31
)

(0.64
)

(3.26
)

(0.35
)

(4.05
)

(1.32
)Figure 12


IAROC:
Impairment of assets, restructuring and other charges 
Adjusted EBITDA and EBIT: Defined as before IAROC and goodwill impairment charge

**:For
the Successor's two-month period ended September 30, 2009, the basic and diluted earnings per share were $0.04 and $0.03
respectively. 
For the Predecessor's one-month period ended July 31, 2009, the basic and diluted earnings per share were $0.05.




54

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7.     Quarterly trends (Cont'd)



8.     Subsequent events



55

---



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9.     Controls and procedures





56

---



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9.     Controls and procedures (Cont'd)



57

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Table of Contents

LIST OF EXHIBITS

The
following document is attached to this annual report on Form 40-F:

23.1

Consent of the Independent Registered Public Accounting Firm31.1

Certification of Mark A. Angelson, Chief Executive Officer, pursuant to Section 302 of the Sarbanes Oxley Act of 200231.2

Certification of Andrew P. Hines, Executive Vice President and Chief Financial Officer, pursuant of Section 302 of the Sarbanes Oxley Act of 200232.1

Certification of Mark A. Angelson, Chief Executive Officer, pursuant to Section 906 of the Sarbanes Oxley Act of 200232.2

Certification of Andrew P. Hines, Executive Vice President and Chief Financial Officer, pursuant to Section 906 of the Sarbanes Oxley Act of 2002


58

---