(a) Employee termination charges were related to workforce reductions through facility consolidations and involuntary separation programs.
(b) Impairment charges incurred in the three months ended March 31, 2012 were for certain buildings and equipment no longer being utilized in production as a result of facility consolidations, primarily related to the Company's vacant Pila, Poland facility.
(c) Transaction-related charges incurred in the three months ended March 31, 2012 were primarily due to the Transcontinental transaction.
(d) Integration costs were primarily related to preparing existing facilities to meet new production requirements resulting from work transferring from closed plants, as well as other costs related to the integration of the acquired companies.(e) Gain on the collection of a note receivable in the three months ended March 31, 2012 was related to a settlement of a disputed pre-acquisition Worldcolor note receivable. Gain on the collection of a note receivable in the three months ended March 31, 2011 was related to the June 2008 sale of Worldcolor's European operations. These non-recurring gains were excluded from the calculation of Adjusted EBITDA. (f) Other restructuring charges were primarily from costs to maintain and exit closed facilities, as well as lease exit charges. (2) Includes the Adjusted EBITDA and Adjusted EBITDA Margin for the Canadian operations sold, calculated in a consistent manner with the calculation above for Adjusted EBITDA and Adjusted EBITDA Margin from continuing operations. In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings announcement also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Free Cash Flow and Adjusted Diluted Earnings Per Share. They are presented to provide additional information regarding Quad/Graphics' performance and because they are important measures by which Quad/Graphics assesses the profitability and liquidity of its business. These measures should not be considered alternatives to net earnings (loss) as a measure of operating performance or to cash flows provided by operating activities as a measure of liquidity.
|RECONCILIATION OF GAAP TO NON-GAAP MEASURES|
|Recurring Free Cash Flow|
|For the Three Months Ended March 31, 2012 and 2011|
|Three Months Ended March 31,|
|Net cash provided by operating activities||$||110.6||$||36.7|
|Add back non-recurring payments:|
|Restructuring payments, net (1)||16.3||40.9|
|World Color Press bankruptcy payments||2.0||1.8|
|Recurring cash flows provided by operating activities||128.9||79.4|
|Less: purchases of property, plant and equipment||(21.6||)||(40.5||)|
|Recurring Free Cash Flow||$||107.3||$||38.9|