WORLD COLOR PRESS INC /DE/, 424B1, 1997-10-03

WORLD COLOR PRESS INC /DE/
424B1, 1997-10-03
COMMERCIAL PRINTING

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Filed pursuant to Rule 424(b)(1)
Registration Nos. 333-35325 and 333-37091
PROSPECTUS
$132,000,000

[LOGO]

6% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2007
-----------------

INTEREST PAYABLE APRIL 1 AND OCTOBER 1
-----------------
THE NOTES ARE CONVERTIBLE INTO COMMON STOCK OF THE COMPANY AT ANY TIME AFTER 90
DAYS FOLLOWING THE ORIGINAL ISSUANCE THEREOF AND PRIOR TO MATURITY, UNLESS
PREVIOUSLY REDEEMED, AT A CONVERSION PRICE OF $41.47 PER SHARE, SUBJECT TO
ADJUSTMENT IN CERTAIN EVENTS. SEE "DESCRIPTION OF NOTES--CONVERSION OF
NOTES." THE COMPANY'S COMMON STOCK IS LISTED ON THE NEW YORK STOCK
EXCHANGE UNDER THE SYMBOL "WRC." ON OCTOBER 2, 1997, THE LAST SALE PRICE
OF THE COMMON STOCK AS REPORTED ON THE NEW YORK STOCK EXCHANGE WAS
$29 PER SHARE.

THE NOTES ARE NOT REDEEMABLE BY THE COMPANY PRIOR TO OCTOBER 4, 2000.
THEREAFTER, THE NOTES ARE REDEEMABLE ON AT LEAST 30 DAYS' NOTICE AT THE OPTION
OF THE COMPANY, IN WHOLE OR IN PART, AT ANY TIME, INITIALLY AT 104.2% AND AT
DECREASING PRICES THEREAFTER TO AND INCLUDING OCTOBER 1, 2007 TOGETHER
WITH ACCRUED INTEREST. HOWEVER, THE NOTES ARE NOT REDEEMABLE PRIOR TO
OCTOBER 4, 2002 UNLESS THE REPORTED LAST SALE PRICE OF THE COMMON
STOCK FOR AT LEAST 20 TRADING DAYS WITHIN A PERIOD OF 30 CONSECUTIVE
TRADING DAYS ENDING WITHIN FIVE TRADING DAYS PRIOR TO THE NOTICE
OF REDEMPTION SHALL HAVE EXCEEDED $58.06 PER SHARE (SUBJECT TO
ADJUSTMENT FOR THE OCCURRENCE OF CERTAIN EVENTS). SEE
"DESCRIPTION OF NOTES-- OPTIONAL REDEMPTION BY THE COMPANY."

------------------------

IN THE EVENT OF A CHANGE IN CONTROL (AS DEFINED), EACH HOLDER OF NOTES MAY
REQUIRE THE COMPANY TO REPURCHASE ITS NOTES, IN WHOLE OR IN PART, FOR CASH OR,
AT THE COMPANY'S OPTION, COMMON STOCK (VALUED AT 95% OF THE AVERAGE CLOSING
PRICES FOR THE FIVE TRADING DAYS IMMEDIATELY PRECEDING AND INCLUDING THE
THIRD TRADING DAY PRIOR TO THE REPURCHASE DATE) AT A REPURCHASE PRICE
OF 100% OF THE PRINCIPAL AMOUNT OF NOTES TO BE REPURCHASED, PLUS
ACCRUED INTEREST TO THE REPURCHASE DATE. SEE "DESCRIPTION OF
NOTES--REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE IN
CONTROL."
CONCURRENTLY WITH THIS OFFERING OF NOTES (THE "NOTES OFFERING"), THE COMPANY IS
OFFERING 4,000,000 SHARES OF COMMON STOCK (4,600,000 SHARES IF THE
UNDERWRITERS' OVER-ALLOTMENT OPTION IS EXERCISED IN FULL) IN A UNITED
STATES OFFERING AND AN INTERNATIONAL OFFERING (THE "STOCK OFFERINGS" AND
TOGETHER WITH THE NOTES OFFERING, THE "OFFERINGS"). THE
CONSUMMA TION OF THE NOTES OFFERING IS NOT CONTINGENT ON THE
CONSUMMATION OF THE STOCK OFFERINGS AND VICE VERSA.

------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 13 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE NOTES OFFERED HEREBY

-----------------
THE NOTES HAVE BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK EXCHANGE, SUBJECT
TO NOTICE OF OFFICIAL ISSUANCE.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------
PRICE 100% AND ACCRUED INTEREST, IF ANY
-------------------

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC (1) COMMISSIONS (2) COMPANY (3)
------------------ ------------------ ------------------
<S> <C> <C> <C>
PER NOTE................................................. 100.00% 2.25% 97.75%
TOTAL (4)................................................ $132,000,000 $2,970,000 $129,030,000
</TABLE>

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(1) PLUS ACCRUED INTEREST, IF ANY, FROM THE DATE OF ISSUANCE.
(2) THE COMPANY HAS AGREED TO INDEMNIFY THE UNDERWRITERS AGAINST CERTAIN
LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. SEE "UNDERWRITERS."
(3) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT $500,000.
(4) THE COMPANY HAS GRANTED TO THE UNDERWRITERS AN OPTION EXERCISABLE WITHIN
30 DAYS OF THE DATE HEREOF, TO PURCHASE UP TO AN ADDITIONAL $19,800,000
AGGREGATE PRINCIPAL AMOUNT OF THE NOTES AT THE PRICE TO THE PUBLIC LESS
UNDERWRITING DISCOUNTS AND COMMISSIONS TO COVER OVER-ALLOTMENTS, IF ANY. IF
THE UNDERWRITERS EXERCISE THE OPTION IN FULL, THE TOTAL PRICE TO PUBLIC,
UNDERWRITING DISCOUNTS AND COMMISSIONS AND PROCEEDS TO COMPANY WILL BE
$151,800,000, $3,415,500 AND $148,384,500 RESPECTIVELY. SEE "UNDERWRITERS."
------------------------

THE NOTES ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF ACCEPTED BY
THE UNDERWRITERS AND SUBJECT TO APPROVAL OF CERTAIN LEGAL MATTERS BY SKADDEN,
ARPS, SLATE, MEAGHER & FLOM LLP, COUNSEL FOR THE UNDERWRITERS. IT IS EXPECTED
THAT DELIVERY OF THE NOTES WILL BE MADE ON OR ABOUT OCTOBER 8, 1997 AT THE
OFFICES OF MORGAN STANLEY & CO. INCORPORATED, NEW YORK, NY, AGAINST PAYMENT
THEREFOR IN IMMEDIATELY AVAILABLE FUNDS.
------------------------
MORGAN STANLEY DEAN WITTER
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
BT ALEX. BROWN
CREDIT SUISSE FIRST BOSTON
OCTOBER 3, 1997
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ART FOR INSIDE FRONT
COVER TO PROSPECTUS

Fold out of the Company's logo
overlaid with examples of the Company's
magazine, catalog, commercial, direct mail,
directory and book customers

ART FOR INSIDE BACK
COVER TO PROSPECTUS

Map of United States indicating location of
40 Production and Distribution Facilities
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No person is authorized in connection with the Notes Offering made hereby to
give any information or to make any representation not contained or incorporated
by reference in this Prospectus and any information or representation not
contained or incorporated herein must not be relied upon as having been
authorized by the Company or the Underwriters. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any of the
Notes offered hereby by any person in any jurisdiction in which it is unlawful
for such person to make such an offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall under any circumstances imply
that the information herein is correct as of any date subsequent to the date
hereof.

CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OR THE
COMMON STOCK. SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT THE NOTES AND THE
COMMON STOCK IN CONNECTION WITH THE OFFERINGS, AND MAY BID FOR AND PURCHASE THE
NOTES OR SHARES OF THE COMMON STOCK IN THE OPEN MARKET. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITERS."

TABLE OF CONTENTS

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PAGE
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<S> <C>
Available Information...................................................................................... 3
Incorporation of Certain Documents by Reference............................................................ 4
Prospectus Summary......................................................................................... 5
Risk Factors............................................................................................... 13
Concurrent Transactions.................................................................................... 16
Use of Proceeds............................................................................................ 17
Price Range of Common Stock and Dividend Policy............................................................ 17
Capitalization............................................................................................. 18
Selected Financial Data.................................................................................... 19
Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 21
Business................................................................................................... 26
Management................................................................................................. 35
Principal Stockholders..................................................................................... 37
Description of Notes....................................................................................... 38
Description of Capital Stock............................................................................... 49
Description of Certain Indebtedness........................................................................ 51
Shares Eligible for Future Sale............................................................................ 53
Certain Federal Income Tax Considerations.................................................................. 54
Underwriters............................................................................................... 56
Legal Matters.............................................................................................. 57
Experts.................................................................................................... 58
Unaudited Pro Forma Combined Condensed Statement of Operations............................................. P-1
Index to Consolidated Financial Statements................................................................. F-1
</TABLE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following regional offices of
the Commission: Seven World Trade Center, Suite 1300, New York, New York 10048

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and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials can be obtained by mail from the Public
Reference Section of the Commission, at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a World
Wide Web site on the Internet at http://www.sec.gov that contains reports, proxy
statements and other information regarding registrants that file electronically
with the Commission. In addition, reports, proxy statements and other
information concerning the Company can be inspected at the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.

This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with amendments and exhibits thereto, the "Registration Statement")
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). The Prospectus omits certain of the information
contained in the Registration Statement, and reference is hereby made to the
Registration Statement for further information with respect to the Company and
the securities offered hereby. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission are not necessarily complete, and in each
instance reference is made to the copy of such document so filed. Each such
statement is qualified in its entirety by such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, filed with the Commission by the Company pursuant
to the Exchange Act, are incorporated herein by reference and made a part of
this Prospectus:

(i) the Company's Annual Report on Form 10-K for the fiscal year ended
December 29, 1996 (the "1996 10-K");

(ii) the portions of the Company's 1996 Annual Report to Stockholders that
have been incorporated by reference into the 1996 10-K;

(iii) the portions of the Company's 1996 definitive Proxy Statement for its
Annual Meeting of Stockholders dated March 27, 1997 that have been incorporated
by reference into the 1996 10-K;

(iv) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 30, 1997 and June 29, 1997;

(v) the description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A filed on January 22, 1996 pursuant to Section
12 of the Exchange Act; and

(vi) the description of the Company's Notes contained in the Company's
Registration Statement on Form 8-A filed on September 16, 1997 pursuant to
Section 12 of the Exchange Act.

Each document filed by the Company pursuant to Section 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
document. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the request of any such person, a copy of any
or all of the foregoing documents incorporated herein by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference in such documents). Written or telephone requests for such copies
should be directed to Dean Cherry, Office of Investor Relations, World Color
Press, Inc., The Mill, 340 Pemberwick Road, Greenwich, Connecticut 06831,
telephone: (203) 532-4200.

4
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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, INCLUDED
ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE STATED, THE INFORMATION IN THIS
PROSPECTUS ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT
EXERCISED. ALL REFERENCES TO FISCAL YEARS ARE TO THE COMPANY'S FISCAL YEAR WHICH
IS THE 52 OR 53-WEEK PERIOD ENDING ON THE LAST SUNDAY IN DECEMBER. ALL
REFERENCES TO THE SECOND QUARTER ARE TO THE COMPANY'S FISCAL SECOND QUARTER
WHICH ENDED ON EITHER JUNE 30, 1996 OR JUNE 29, 1997, RESPECTIVELY. AS USED
HEREIN, "PRO FORMA 1996" GIVES EFFECT TO ALL ACQUISITIONS CONSUMMATED BY THE
COMPANY IN FISCAL 1996, AS IF EACH HAD OCCURRED THE FIRST DAY OF FISCAL 1996.
THE PRO FORMA 1996 AMOUNTS ARE NOT NECESSARILY INDICATIVE OF THE RESULTS THAT
WOULD HAVE OCCURRED HAD THE ACQUISITIONS BEEN CONSUMMATED ON JANUARY 1, 1996, OR
OF WORLD COLOR'S OR THE ACQUISITIONS' INDIVIDUAL OR COMBINED FUTURE RESULTS. SEE
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS." AS USED HEREIN, THE "COMPANY" AND "WORLD COLOR" REFER TO WORLD
COLOR PRESS, INC. AND ITS SUBSIDIARIES.

THE COMPANY

World Color is an industry leader in the management and distribution of
print and digital information, with revenues of $1.9 billion for the twelve
months ended June 29, 1997. The Company is the third largest diversified
commercial printer in the United States, providing digital prepress, press,
multi-media, binding and distribution services to customers in the magazine,
catalog, commercial, direct mail, directory and book market sectors. Founded in
1903, the Company currently operates a national network of 40 production and
distribution facilities and an extensive network of sales offices nationwide.
Through selective acquisitions and internal expansion, World Color has
strategically positioned itself as a full-service provider of multiple high
technology solutions for its customers' imaging, print and distribution needs.

Since the appointment of a new management team in May 1991, World Color has
significantly expanded its national presence as a leading, innovative commercial
printer, and has achieved significant growth in sales, adjusted operating income
(as defined herein) and net income, while also improving its operating margins.
Management's commitment to this growth is evidenced by the management team's
long-term ownership interest in the Company, which has increased since 1991.
Over the past five fiscal years, net sales and adjusted operating income grew at
compound annual rates of 25.5% and 61.3%, respectively, and net income increased
from a net loss of $6.2 million in 1992 to net income of $47.3 million in 1996.
In addition, the Company has recorded five consecutive years of improvement in
its adjusted operating income margins. The Company continued its strong growth
through the first six months of 1997, with net sales, operating income and net
income increasing 31.7%, 50.2%, and 12.4%, respectively, compared with the same
six month period in 1996. In addition, the Company's operating income margin
increased to 7.2% for the first six months of 1997 from 6.3% for the comparable
1996 period.

GROWTH STRATEGY

World Color has increased stockholder value through emphasizing quality,
diversification of its business mix, operational efficiencies and strategic
growth. Specifically, the Company's growth strategy is to (i) further establish
and strengthen its leadership positions in diverse and balanced businesses, (ii)
make strategic acquisitions and broaden the array of services provided to its
customers, (iii) provide high quality services within a low cost operating
structure and (iv) increase efficiency and productivity through investment in
technology. The key elements underlying this strategy are described below.

5
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technological capabilities and competitive pricing. The Company's commitment to
quality, combined with its broad range of services offered, has formed the basis
for World Color's long-standing customer relationships. As a result of its
diverse business mix, geographic presence and reputation for quality, World
Color has been able to attract new customers as well as capture incremental
sales from existing customers.

STRATEGIC ACQUISITIONS. The fragmented printing industry continues to
undergo significant consolidation due primarily to changing customer demand for
a full range of sophisticated services and the high levels of capital investment
necessary to meet this demand. Over the past five years, World Color has
capitalized on the industry's consolidation opportunities by successfully
integrating 16 acquisitions having an aggregate purchase price in excess of $1
billion. The Company has targeted its acquisitions to expand its services and
geographic presence and to diversify its business mix by, among other things,
targeting customers operating in new markets such as the direct mail and book
markets. Additionally, the acquisitions have been accretive to World Color's
earnings because of, among other things, significant cost savings in the
purchase of raw materials, the reduction of overhead costs and productivity
gains captured by the Company's ability to better absorb and manage available
capacity at newly acquired facilities. World Color believes that its competitive
and financial strengths and considerable experience in identifying, acquiring
and integrating complementary businesses will continue to provide significant
growth opportunities. While the Company continuously evaluates opportunities to
make strategic acquisitions, at present it has no commitments or agreements with
respect to any material acquisitions.

LOW COST OPERATING STRUCTURE. World Color makes a vigorous effort to
optimize the management of its financial resources and believes its ratio of
selling, general and administrative expenses to net sales is among the lowest in
the industry. A reengineering process begun in January 1996 has also contributed
to the Company's improved cost structure and productivity. This effort entailed
standardizing and streamlining the many processes of the Company's diverse
operations. Results have included more effective approaches to applying
technology and greater leverage from shared services. World Color's "one-
company" operating structure has also improved capacity utilization by balancing
production across plants and reduced costs by providing a central support
organization for administrative services. In addition, the Company's purchasing
power enables it to acquire raw materials and equipment on more favorable terms
than its smaller competitors, as well as to ensure the availability of raw
materials in tight markets.

TARGETED CAPITAL INVESTMENTS TO INCREASE EFFICIENCY AND PRODUCTIVITY. World
Color historically has been at the forefront of technological advances and is
committed to maintaining its position as an industry leader through strategic
capital spending. Since the beginning of 1993, the Company has invested
approximately $390.0 million in equipment and plant expansions (exclusive of
equipment obtained from acquisitions) to position the Company for continued
growth and productivity improvements. The Company believes that its significant
size and financial strength allow it to invest in technological capabilities
that are not commercially viable for smaller or less well-capitalized
competitors. The Company's ongoing capital investment program has enabled it to
increase its productivity and to serve its customers better by improving the
quality, flexibility, speed and cost of production.

6
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MARKETS AND CUSTOMERS

As illustrated in the charts below, since the appointment of World Color's
current management team in 1991, the Company has diversified its business mix
and expanded into serving customers in faster growth markets, thereby reducing
the Company's dependence on magazine printing.

WORLD COLOR BUSINESS MIX
PERCENTAGE OF NET SALES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
1990 PRO FORMA 1996 *

<S> <C> <C> <C> <C>
Magazines 72% Magazines 29%
Catalogs 4% Catalogs 29%
Commercial 10% Direct Mail 9%
Directories 14% Book Services 3%
Commercial 25%
Directories 5%
</TABLE>

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* Does not give effect to the acquisitions of the Rand McNally Book Services
Group or The Johnson & Hardin Co. in January and July of 1997, respectively.

MAGAZINES. The Company believes that it is the second largest printer of
consumer magazines in the United States, printing over 1.8 billion magazines
annually. The Company believes that its principal competitors in this category
consist of three diversified printing companies. Magazines printed by the
Company are among the best-selling in their class and include such titles as
AMERICAN WAY, ARCHITECTURAL DIGEST, CIGAR AFICIONADO, EBONY, ELLE, ENTERTAINMENT
WEEKLY, FORBES, GOLF DIGEST, GOOD HOUSEKEEPING, MARTHA STEWART LIVING, MEN'S
HEALTH, NATIONAL GEOGRAPHIC, NEWSWEEK, ROAD AND TRACK, ROLLING STONE, SOAP OPERA
WEEKLY, TEEN, TV GUIDE, VOGUE AND WOMAN'S DAY. These magazines are published by
leading publishers such as Conde Nast, Forbes, Hachette Filipacchi, Hearst,
Johnson Publishing, K-III, National Geographic, The New York Times Sports &
Leisure Group, News America Publications, Newsweek, Petersen, Rodale and Wenner
Media. The popularity of these magazines makes them less susceptible to cyclical
downturns in advertising spending, which the Company believes provides it with a
significant advantage over competitors whose customers may be more susceptible
to such downturns. A majority of the Company's magazine printing is performed
under contracts with remaining terms of between one and nine years, the largest
of which are with customers whose relationships with the Company average more
than 20 years. The Company has extended a majority of such contracts beyond
their initial expiration dates and intends to continue this practice when
economically practical.

CATALOGS. The Company is a leading printer for the U.S. catalog market, and
prints approximately 3.0 billion catalogs annually. The Company's key
competitors in this category consist of four diversified commercial printers
whose facilities enable them to compete in the national market and smaller and
local regional printers who compete for regional business. The Company prints
over 2,000 catalog titles including Avon, Blair, Hammacher Schlemmer, J.C.
Penney, J. Peterman Co., Lenox Collections, Potpourri, Service Merchandise,
Sony, Spiegel, Starbucks, Talbot's, Victoria's Secret and Williams-Sonoma. In
addition, the Company's business-to-business catalog printing work spans a broad
range of industries including the computer, home and office furniture, office
products and industrial safety products industries. The Company's
business-to-business customers include Global DirectMail, Paper Direct and
Reliable.

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COMMERCIAL. The Company is a premier printer of high quality specialty
products such as annual reports and automobile and travel brochures, for
customers such as Adobe/Logistix, BMG, Columbia Pictures, Donna Karan/New York,
Ford Motor, Guess?, Outback Steakhouse, Pillsbury and Princess Cruises. World
Color is also a leading printer of product brochures, bill stuffers,
informational marketing materials and other advertising supplements. For
instance, it prints freestanding inserts and retail inserts for established
national retailers such as J.C. Penney, News America, Pier 1 Imports, True Value
and Wal-Mart. The Company has focused on building lasting customer relationships
through investments in equipment, focused customer service and the maintenance
of the flexibility required to accommodate specific and changing customer needs.
The Company believes its reputation for and dedication to innovation and
leadership in specialized services will allow it to enjoy continued loyalty from
its customers.

DIRECT MAIL. Direct mail marketing services are an important and growing
component of many businesses' marketing programs and overall U.S. advertising
expenditures. The Company prints direct mail materials such as booklets,
inserts, bill stuffers and other advertisements for customers including ADVO,
Blair, Citicorp, DiscoverCard, The Franklin Mint, Goodyear Tire & Rubber
Company, National Geographic and Quaker Oats. Among the direct mail services
provided are direct imaging, personalization and other lettershop services.

DIRECTORIES. The Company has printed directories since 1981 predominantly
through its relationship with Pacific Bell. The Company prints four-color
white-page and yellow-page directories for Pacific Bell pursuant to a contract
which extends through the year 2000 and which can be extended by Pacific Bell
for up to an additional five years. The Company prints over a total of 100
different regional directory titles for Pacific Bell and certain other
customers. The Company prints over 34 million directories annually.

BOOKS. Through its acquisition of Ringier America in June 1996, World Color
believes it has become the largest printer of mass-market, racksize books in the
world. The Company prints mass-market, racksize books for customers including
Avon Books, Bantam Doubleday Dell, Kensington Publishing, Penguin Books USA,
Random House and St. Martin's Press/TOR. In January 1997, the Company acquired
the Book Services Group of Rand McNally, which prints hardcover books for the
consumer, education and reference markets, and services many of the largest U.S.
publishers. The Company prints hardcover books for customers including Colliers,
Encyclopaedia Britannica, Grolier, Random House, Reader's Digest, Rodale Press,
Thomas Publishing, and Time Warner.

CONCURRENT TRANSACTIONS

Concurrently with the Notes Offering, the Company is offering 4,000,000
shares (4,600,000 shares if the underwriters' over-allotment option is exercised
in full) of its common stock, par value $0.01 per share (the "Common Stock").
The net proceeds of the Stock Offerings are estimated to be approximately $110.9
million ($127.6 million if the underwriters' over-allotment option is exercised
in full), after deducting underwriting discounts, commissions and estimated
expenses. See "Description of Capital Stock." The Company intends to use the net
proceeds received by it in the Notes Offering and the Stock Offerings to repay
certain indebtedness incurred under its Second Amended and Restated Credit
Agreement dated as of June 6, 1996, as amended (the "Credit Agreement"). The
closings of the Notes Offering and the Stock Offerings are not contingent upon
each other.

Concurrently with the Offerings, the Company will seek to amend the Credit
Agreement in order to provide additional flexibility to pursue the Company's
business strategy. The proposed amendments to the Credit Agreement would, among
other things, increase the Company's borrowing capacity to fund future
acquisitions by $200.0 million. See "Description of Certain Indebtedness--Credit
Agreement."

As a result of the Offerings and the amendments to the Credit Agreement,
World Color believes that it will be well positioned to continue its strategy of
acquiring businesses that can be successfully integrated into the Company's core
operations, to expand its services and geographic presence and to diversify its
business mix.

The Company is a Delaware corporation and has its principal offices at The
Mill, 340 Pemberwick Road, Greenwich, Connecticut 06831, and its telephone
number is (203) 532-4200.

8
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THE OFFERING

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<S> <C>
Securities offered.............. $132.0 million aggregate principal amount at maturity of
6% Convertible Senior Subordinated Notes due 2007 (the
"Notes") ($151.8 million aggregate principal amount if the
Underwriters' over-allotment option is exercised in full).
See "Description of Notes."

Interest........................ 6% per annum on the principal amount, payable semiannually
in arrears in cash on April 1 and October 1 of each year,
commencing April 1, 1998.

Conversion...................... Each note will be convertible into Common Stock, at the
option of the holder, at any time after 90 days following
the latest date of original issuance thereof through
maturity, unless previously redeemed or otherwise
purchased by the Company, at the Conversion Price of
$41.47 per share. The Conversion Price will be subject to
adjustment upon the occurrence of certain events affecting
the Common Stock. See "Description of Notes-- Conversion
of Notes."

Subordination................... The Notes will be subordinated to all existing and future
Senior Indebtedness (as defined herein) and PARI PASSU
with the Company's 9 1/8% Senior Subordinated Notes due
2003 (the "Senior Subordinated Notes"). The Notes will
also be effectively subordinated to all indebtedness and
liabilities of subsidiaries of the Company. At August 24,
1997, the Company had approximately $925.8 million of
outstanding Senior Indebtedness and the Company's
subsidiaries had approximately $13.8 million of
outstanding indebtedness. The Indenture does not prohibit
or limit the incurrence of additional Senior Indebtedness.
See "Risk Factors--Subordination" and "Use of Proceeds."

Sinking Fund.................... None.

Redemption by Company........... The Notes are not redeemable by the Company prior to
October 4, 2000. Thereafter, the Notes will be redeemable
on at least 30 days notice at the option of the Company,
in whole or in part, at any time, at the redemption prices
set forth in "Description of Notes," in each case together
with accrued and unpaid interest. However, on or after
October 4, 2000 and prior to October 4, 2002, the Notes
will not be redeemable at the option of the Company unless
the closing price of the Common Stock shall have exceeded
$58.06 per share (subject to adjustment upon the
occurrence of certain events) for 20 trading days within a
period of 30 consecutive trading days ending within five
trading days prior to the notice of redemption.
</TABLE>

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<S> <C>
Repurchase at Option of Holders
Upon Change in Control........ In the event of a Change in Control (as defined below
under "Description of Notes--Repurchase at Option of
Holders Upon a Change in Control") each Holder of Notes
may require the Company to repurchase its Notes, in whole
or in part, at a repurchase price of 100% of the principal
amount thereof, plus accrued interest to the repurchase
date. The repurchase price is payable in cash or, at the
option of the Company, in Common Stock (valued at 95% of
the average closing prices of the Common Stock for the
five trading days immediately preceding and including the
third trading day prior to the repurchase date).

Concurrent Stock Offerings...... Concurrently with the Notes Offering, the Company is
offering 4,000,000 Shares (4,600,000 Shares if the
underwriters' over-allotment option is exercised in full)
of its Common Stock in the Stock Offerings. See
"Concurrent Transactions."

Use of Proceeds................. The Company intends to use the net proceeds received by it
in the Offerings to repay certain indebtedness incurred
under the Credit Agreement. See "Use of Proceeds."

NYSE Symbol..................... The Notes have been approved for listing on the New York
Stock Exchange under the symbol "WRC07," subject to notice
of official issuance.
</TABLE>

RISK FACTORS

Prior to making an investment in the Notes offered hereby, prospective
purchasers of the Notes should take into account the specific considerations set
forth under "Risk Factors" as well as the other information set forth in this
Prospectus.

10
<PAGE>
SUMMARY FINANCIAL DATA

The following summary operating and financial data for the fiscal years
ended December 25, 1994 through December 29, 1996 have been derived from the
Company's financial statements, which have been audited by Deloitte & Touche
LLP, independent auditors, whose report thereon is included elsewhere in this
Prospectus. The following summary financial data for the six month periods ended
June 30, 1996 and June 29, 1997 have been derived from the Company's unaudited
condensed consolidated financial statements which, in the opinion of management,
contain all adjustments (consisting of only normal and recurring adjustments)
necessary to present fairly the Company's financial position and results of
operations at such dates and for such periods. The data presented below should
be read in conjunction with, and are qualified in their entirety by reference
to, the Company's consolidated financial statements and the notes thereto
appearing elsewhere in this Prospectus. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
FISCAL YEAR (1) SIX MONTHS (1)
----------------------------------- --------------------
1994 1995 1996 1996 1997
--------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PERCENTAGES AND PER SHARE DATA)
OPERATING DATA:
Net sales..................................... $ 971,627 $ 1,295,582 $ 1,641,412 $ 671,377 $ 883,998
Cost of sales................................. 817,934 1,074,785 1,349,130 561,149 732,631
--------- ----------- ----------- --------- ---------
Gross profit.................................. 153,693 220,797 292,282 110,228 151,367
Selling, general and administrative
expenses.................................... 90,312 125,539 153,071 67,928 87,852
Streamlining and other special
charges (2)................................. -- 40,900 -- -- --
--------- ----------- ----------- --------- ---------
Operating income.............................. 63,381 54,358 139,211 42,300 63,515
Interest expense.............................. 23,825 37,897 58,417 22,308 40,268
Income tax provision.......................... 15,822 6,584 33,533 7,997 9,764
--------- ----------- ----------- --------- ---------
Net income.................................... $ 23,734 $ 9,877 $ 47,261 $ 11,995 $ 13,483
--------- ----------- ----------- --------- ---------
--------- ----------- ----------- --------- ---------
Net income per common and common equivalent
share (3)................................... $ 0.69 $ 0.29 $ 1.35 $ 0.34 $ 0.39
Weighted average common and common equivalent
shares outstanding (3)...................... 34,409 34,441 35,003 34,965 34,516
OTHER OPERATING DATA:
EBITDA (4).................................... $ 124,023 $ 169,926 $ 243,704 $ 86,215 $ 129,887
Adjusted operating income (5)................. 63,381 95,258 139,211 42,300 63,515
Capital expenditures.......................... 83,875 120,339 70,639 28,844 55,645
Cash provided by operations................... 100,124 6,744 146,583 50,799 5,006
Gross profit margin........................... 15.8% 17.0% 17.8% 16.4% 17.1%
EBITDA margin................................. 12.8 13.1 14.8 12.8 14.7
Adjusted operating income margin.............. 6.5 7.4 8.5 6.3 7.2
Ratio of earnings to fixed charges (6)........ 2.1x 1.3x 2.2x 1.8x 1.5x
</TABLE>

<TABLE>
<CAPTION>
AT JUNE 29,
BALANCE SHEET DATA: 1997
-----------
<S> <C>
Working capital............................................................... $ 238,801
Property, plant and equipment, net............................................ 873,255
Total assets.................................................................. 2,004,205
Long-term debt (including current maturities)................................. 1,092,682
Stockholders' equity.......................................................... 428,415
</TABLE>

(FOOTNOTES ON FOLLOWING PAGE)

11
<PAGE>
- ------------------------

(1) The fiscal years shown each represent the 52 or 53-week period ending on
the last Sunday in December. Fiscal year 1995 consisted of 53 weeks. Fiscal
years 1994 and 1996 each consisted of 52 weeks. The six month periods ended
June 30, 1996 and June 29, 1997 consisted of 26 weeks.

(2) In the fourth quarter of 1995, the Company recorded a streamlining charge
of $40,900 ($24,540 net of tax benefits). This charge, which was primarily
non-cash, was related to the realignment of certain business operations
which resulted in the writedown of certain assets and a provision for other
associated costs. See Note 13 to the Company's consolidated financial
statements.

(3) Net income per common and common equivalent share is based on the weighted
average common and dilutive common equivalent shares outstanding during each
period after giving effect to the change in the Company's capital structure
pursuant to the November 1995 merger of Printing Holdings, L.P., the
Company's former parent company, with and into the Company and the
adjustment of then outstanding options in order to cause such options to be
exerciseable for Common Stock on a basis consistent with the Company's
capitalization after such merger. This weighted average includes incremental
shares for dilutive common equivalent shares related to the assumed exercise
of stock options, using the treasury stock method. In addition, shares
related to Common Stock issued and incremental shares related to stock
options granted within one year prior to November 22, 1995 (the initial
filing of the registration statement for the Company's initial public
offering) at a purchase or exercise price below $19.00 per share were
included in the weighted average, using the treasury stock method for the
stock options, as if they were outstanding for all pre-issuance periods
presented.

(4) EBITDA represents earnings before interest expense, income taxes,
depreciation, amortization and non-recurring streamlining and other special
charges. EBITDA is not intended to represent cash flows for the period, is
not presented as an alternative to operating income as an indicator of
operating performance, may not be comparable to other similarly titled
measures of other companies and should not be considered in isolation or as
a substitute for measures of performance prepared in accordance with
generally accepted accounting principles. See the Company's consolidated
financial statements and the notes thereto appearing elsewhere in this
Prospectus.

(5) Adjusted operating income represents operating income before non-recurring
streamlining and other special charges. Adjusted operating income is not
intended to represent cash flows for the period, is not presented as an
alternative to operating income as an indicator of operating performance,
may not be comparable to other similarly titled measures of other companies
and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with generally accepted accounting
principles. See the Company's consolidated financial statements and the
notes thereto appearing elsewhere in this Prospectus.

(6) For purposes of computing the ratio of earnings to fixed charges, earnings
consists of income before income taxes plus fixed charges (other than
capitalized interest) and amortization of previously capitalized interest.
Fixed charges consist of interest expense and debt issuance cost,
capitalized interest and that portion of rental expenses representative of
the interest factor. The 1995 ratio reflects the 1995 streamlining charge of
$40,900 discussed in footnote (2). Excluding the effect of this charge, the
1995 ratio would be 2.2x.

12
<PAGE>
RISK FACTORS

A PROSPECTIVE INVESTOR SHOULD CONSIDER CAREFULLY ALL OF THE INFORMATION
CONTAINED IN THIS PROSPECTUS BEFORE DECIDING WHETHER TO PURCHASE THE NOTES
OFFERED HEREBY AND, IN PARTICULAR, THE FOLLOWING FACTORS.

FORWARD-LOOKING INFORMATION

This Prospectus contains various forward-looking statements and information
that are based on management's belief as well as assumptions made by and
information currently available to management. When used in this document, the
words "anticipate," "estimate," "project," "expect" and similar expressions are
intended to identify forward-looking statements. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. Such statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, projected or expected. Among the
key factors that may have a direct bearing on the Company's operating results
are changes in customer demands for the Company's products, changes in raw
material and equipment costs and availability, seasonal changes in customer
orders, pricing actions by the Company's competitors and general changes in
economic conditions.

SUBORDINATION; SUBSIDIARY OPERATIONS

The Notes will be general unsecured obligations of World Color and will be
subordinated to all existing and future Senior Indebtedness, including the
obligations of the Company under the Credit Agreement. The Notes will rank PARI
PASSU with the Company's $150.0 million aggregate principal amount of Senior
Subordinated Notes. In the event of bankruptcy, liquidation or reorganization of
World Color, the assets of World Color will be available to pay obligations on
the Notes only after the obligations under the Credit Agreement and other Senior
Indebtedness have been paid in full. The Indenture will not limit the incurrence
by World Color of additional Indebtedness. At August 24, 1997, the Company's
Senior Indebtedness, exclusive of indebtedness of subsidiaries, was
approximately $925.8 million. See "Description of Notes."

Obligations under the Credit Agreement and certain other Senior Indebtedness
are secured by liens on certain of the Company's assets. See "Description of
Certain Indebtedness--Credit Agreement" and "--Receivables Securitization." If
World Color becomes insolvent or is liquidated or if any of its indebtedness is
accelerated, the holders of Senior Indebtedness will be entitled to payment in
full prior to payment to holders of the Notes. If the banks party to the Credit
Agreement were to foreclose on the collateral securing World Color's obligations
to them, it is possible that there would be insufficient assets remaining after
satisfaction in full of all Senior Indebtedness to satisfy fully the claims of
holders of the Notes.

World Color's obligations under the Credit Agreement are guaranteed, subject
to certain limitations, by all of its subsidiaries. The Notes will not be
guaranteed by such subsidiaries. A significant portion of the Company's assets
will be owned by its subsidiaries. The right of World Color, and thus the right
of its creditors, to participate in any distribution of earnings or assets of
World Color's subsidiaries is subject to the prior claims of the creditors of
such subsidiaries, including the lenders under the Credit Agreement. As of
August 24, 1997, such subsidiaries had approximately $13.8 million of
indebtedness outstanding. The incurrence of additional indebtedness by such
subsidiaries will not be limited by the Indenture.

COMPETITION

Although the Company is one of the largest diversified commercial printers
in the United States, the industry is highly competitive in most product
categories and geographic regions. Competition is largely based on price,
quality, range of services offered, distribution capabilities, customer service,
availability of printing time on appropriate equipment and state-of-the-art
technology. The Company competes for

13
<PAGE>
commercial business not only with large national printers, but also with smaller
regional printers. In certain circumstances, due primarily to factors such as
freight rates and customer preference for local services, printers with better
access to certain regions of the country may have a competitive advantage in
such a region. The Company believes that primarily due to the continued excess
capacity in the industry, there has been downward pricing pressure and increased
competition in the printing industry.

TECHNOLOGY

Production technology in the printing industry has evolved and continues to
evolve. Although the Company has invested approximately $390.0 million in
printing facilities and equipment since the beginning of fiscal 1993, it may be
required to invest significant capital in additional production technology in
order to remain competitive. The Company believes that its recent capital
investments in state-of-the-art technology, including new press and binding
technology, digital imaging technology, computer-to-plate and digital processing
technologies and real-time product quality monitoring systems have allowed it to
realize increased efficiencies in the services it offers its customers.

GROWTH THROUGH ACQUISITIONS

To expand its services and geographic presence, diversify its business mix
and lead the consolidation trend in the printing industry, the Company's
business strategy includes growth through acquisitions. There can be no
assurance that future acquisitions will be consummated on acceptable terms or
that any newly acquired companies will be successfully integrated into the
Company's operations. The Company may use Common Stock (which could result in
dilution to the holders of the Common Stock) or may incur additional long-term
indebtedness or a combination thereof for all or a portion of the consideration
to be paid in future acquisitions. While the Company continuously evaluates
opportunities to make strategic acquisitions, it has no present commitments or
agreements with respect to any material acquisitions.

ENVIRONMENTAL COMPLIANCE

The Company is subject to regulation under various federal, state and local
laws relating to the environment and to employee health and safety. These
environmental regulations relate to the generation, storage, transportation,
disposal and emission into the environment of various substances. Permits are
required for operation of the Company's business (particularly air emission
permits), and these permits are subject to renewal, modification and, in certain
circumstances, revocation. The Company believes it is in substantial compliance
with such laws and permitting requirements. The Company is also subject to
regulation under various federal, state and local laws which allow regulatory
authorities to compel (or seek reimbursement for) cleanup of environmental
contamination at its own sites and at facilities where its waste is or has been
disposed. The Company has internal controls and personnel dedicated to
compliance with all applicable environmental laws. The Company expects to incur
ongoing capital and operating costs to maintain compliance with applicable
environmental laws, which costs the Company does not expect to be, in the
aggregate, material. The Company cannot predict the environmental legislation or
regulations that may be enacted in the future or how existing or future laws or
regulations will be administered or interpreted. Compliance with more stringent
laws or regulations, as well as more vigorous enforcement policies of the
regulatory agencies or stricter interpretation of existing laws, may require
additional expenditures by the Company, some or all of which may be material.
See "Business--Environmental Compliance."

INFLUENCE BY KKR; OTHER ANTI-TAKEOVER PROVISIONS

After giving effect to the Offerings, on a fully-diluted basis (assuming the
Underwriters' over-allotment option is exercised in full, but assuming no
conversion of the Notes), approximately 45.7% of the shares of Common Stock will
be held by certain investment partnerships (together, the "KKR Partnerships"),
of which KKR Associates L.P., a New York limited partnership ("KKR Associates")
and an affiliate of Kohlberg Kravis Roberts & Co., L.P. ("KKR"), is the general
partner. KKR Associates has sole voting and investment power with respect to
such shares. Consequently, KKR Associates and its general

14
<PAGE>
partner, of which three directors of the Company are members and one director of
the Company is an executive, influence the Company, the election of its
directors and any actions requiring stockholder approval, including adopting
amendments to the Company's certificate of incorporation and approving mergers
or sales of all or substantially all of the Company's assets.

Such influence by KKR, together with certain provisions of the Company's
certificate of incorporation and by-laws as well as certain provisions of the
Delaware General Corporation Law (the "DGCL"), could increase the difficulty of
effecting a change of control of the Company. These provisions include "blank
check" preferred stock, stockholder nomination procedures and the "interested
stockholders" provisions of Section 203 of DGCL. See "Description of Capital
Stock." Section 203 of DGCL is intended to delay a person who acquires shares of
Common Stock without the approval of the Board of Directors or the stockholders
from engaging in any merger, asset sale or other transactions resulting in a
financial benefit to such person.

PUBLIC MARKET FOR THE NOTES

The Notes have been approved for listing, subject to official notice of
issuance, on The New York Stock Exchange under the symbol "WRC07." Nevertheless,
the Notes are a new issue of securities, have no established trading market and
may not be widely distributed. The Company has been informed by the Underwriters
that they currently intend to make a market in the Notes, as permitted by
applicable laws and regulations; however, the Underwriters are not obligated to
make such a market and may discontinue market making at any time without notice.
Accordingly, no assurance can be given as to the liquidity of, or trading market
for, the Notes.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Stock Offerings (assuming no exercise of the
underwriters' over-allotment option and no conversion of the Notes), 17,738,192
shares of Common Stock held directly or indirectly by the KKR Partnerships and
management and 1,687,283 shares of Common Stock issuable upon exercise of
options outstanding and exercisable immediately following the Stock Offering
held by management and former management will continue to be "restricted shares"
as defined in Rule 144 under the Securities Act. Such shares may be resold only
if they are registered under the Securities Act or if an exemption from
registration is available, including, among others, the exemption provided by
Rule 144 under the Securities Act. After the Offerings, the KKR Partnerships
will continue to have certain demand and incidental registration rights with
respect to all of the shares owned by them, and management will have certain
incidental registration rights.

In addition to the shares sold in the Stock Offerings, as of September 16,
1997, 84,413 shares of Common Stock are eligible for sale by management without
restrictions under the Securities Act.

Each of the Company and its directors, executive officers and the KKR
Partnerships agreed that, subject to certain exceptions, without the prior
written consent of Morgan Stanley & Co. Incorporated ("Morgan Stanley"), on
behalf of the Underwriters, it will not, during the period ending 90 days after
the date of this Prospectus, offer, pledge, sell, contract to sell or otherwise
transfer, lend or dispose of, directly or indirectly, any shares of Common Stock
or any securities convertible into or exercisable or exchangeable for Common
Stock. See "Shares Eligible for Future Sale" and "Underwriters." In addition,
all shares owned by, and all shares issuable upon the exercise of options held
by the Company's management and former management are subject to lock-up
restrictions for either 120 or 180 days after the date of the Prospectus.

No prediction can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock (including shares issued upon the exercise of stock
options), or the perception that such sales could occur, could adversely affect
prevailing market prices for the Common Stock. If such sales reduce the market
price of the Common Stock, the Company's ability to raise additional capital in
the equity markets could be adversely affected.

15
<PAGE>
CONCURRENT TRANSACTIONS

Concurrently with the Notes Offering, the Company is offering 4,000,000
shares (4,600,000 shares if the underwriters' over-allotment option is exercised
in full) of its Common Stock. The net proceeds of the Stock Offerings are
estimated to be approximately $110.9 million ($127.6 million if the
underwriters' over-allotment option is exercised in full), after deducting
underwriting discounts, commissions and estimated expenses. See "Description of
Capital Stock." The Company intends to use the net proceeds received by it in
the Notes Offering and the Stock Offerings to repay certain indebtedness
incurred under the Credit Agreement. The closings of the Notes Offering and the
Stock Offerings are not contingent upon each other.

Concurrently with the Offerings, the Company will seek to amend its Credit
Agreement in order to provide additional flexibility to pursue the Company's
business strategy. The proposed amendments to the Credit Agreement would, among
other things, increase the Company's borrowing capacity to fund future
acquisitions by $200.0 million. See "Description of Certain Indebtedness--Credit
Agreement."

16
<PAGE>
USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the Notes,
after deducting the expenses of the Notes Offering are estimated to be
approximately $128.5 million ($147.9 million if the underwriters' over-allotment
option is exercised in full). The Company intends to use all of such net
proceeds, together with the net proceeds to be received by the Company in the
Stock Offerings, to repay certain indebtedness incurred under the Company's
Credit Agreement. At August 24, 1997, the aggregate outstanding balance under
the Credit Agreement was $779.4 million, and the weighted average interest rate
of the Company's outstanding borrowings under the Credit Agreement was 6.54%.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock has been listed on the New York Stock Exchange under the
symbol "WRC" since January 26, 1996. The following table sets forth the low and
high closing prices of the Common Stock for the fiscal quarters indicated as
reported on the New York Stock Exchange Composite Tape.

<TABLE>
<CAPTION>
LOW HIGH
----------- -----------
<S> <C> <C>
1996
First Quarter (beginning January 26,
1996)............................... 18 1/4 21 1/2
Second Quarter........................ 18 25 1/2
Third Quarter......................... 20 1/2 25 1/8
Fourth Quarter........................ 17 3/4 24 1/8
1997
First Quarter......................... 18 1/8 22 1/4
Second Quarter........................ 19 5/8 26 1/4
Third Quarter......................... 23 3/4 31 13/16
Fourth Quarter (through October 2,
1997)............................... 29 30
</TABLE>

On October 2, 1997, the closing price of the Common Stock as reported on the
New York Stock Exchange was $29.

The Company is restricted by the terms of certain of its outstanding debt
and financing agreements from paying cash dividends on its Common Stock, and may
in the future enter into loan or other agreements or issue debt securities or
preferred stock that restrict the payment of cash dividends on Common Stock. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Description of Certain
Indebtedness."

17
<PAGE>
CAPITALIZATION

The following table sets forth the actual cash and cash equivalents and the
consolidated capitalization of the Company as of June 29, 1997 (i) on a
historical basis, (ii) as adjusted to reflect the Note Offering and (iii) as
adjusted to reflect the Offerings and, in each case, the anticipated application
of the aggregate net proceeds therefrom. See "Use of Proceeds." The information
below should be read in conjunction with the Company's consolidated financial
statements and the notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
JUNE 29, 1997
------------------------------------------------
<S> <C> <C> <C>
AS ADJUSTED
AS ADJUSTED FOR FOR
ACTUAL THE NOTES OFFERING THE OFFERINGS
------------ ------------------ --------------

<CAPTION>
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C>
Cash and cash equivalents...................................... $ 22,383 $ 22,383 $ 22,383
------------ ------------------ --------------
------------ ------------------ --------------
Debt:
Borrowings under the Credit Agreement(1)(2)(3)............... $ 871,100 $ 742,570 $ 631,710
9 1/8% Senior Subordinated Notes due 2003.................... 150,000 150,000 150,000
6% Convertible Senior Subordinated Notes due 2007(4)......... -- 132,000 132,000
Other debt(5)................................................ 71,582 71,582 71,582
------------ ------------------ --------------
Total debt............................................... $ 1,092,682 $ 1,096,152 $ 985,292
------------ ------------------ --------------
Stockholders' equity:
Common Stock, $0.01 par value--authorized, 100,000,000
shares; issued and outstanding, 33,744,531 at June 29,
1997(6).................................................... $ 337 $ 337 $ 377
Additional paid-in capital................................... 583,721 583,721 694,541
Accumulated deficit.......................................... (155,643) (155,643) (155,643)
------------ ------------------ --------------
Total stockholders' equity............................... 428,415 428,415 539,275
------------ ------------------ --------------
Total capitalization........................................... $ 1,521,097 $ 1,524,567 $ 1,524,567
------------ ------------------ --------------
------------ ------------------ --------------
</TABLE>

- ------------------------

(1) The amounts shown as of June 29, 1997 do not give effect to the
securitization transaction entered into on June 30, 1997. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Description of Certain
Indebtedness--Receivables Securitization." As of August 24, 1997, $155,000
of proceeds have been received under this facility, all of which have been
used to repay borrowings under the Credit Agreement.

(2) At August 24, 1997, commitments under the Credit Agreement aggregated
$920,000, and the weighted average interest rate of the Company's
outstanding borrowings under the Credit Agreement was 6.54%. See "Concurrent
Transactions."

(3) Includes current maturities of $35,000.

(4) The consummation of the Notes Offering is not contingent upon the
consummation of the Stock Offerings or vice versa.

(5) Includes current maturities of $8,629.

(6) Does not include 2,931,055 shares of Common Stock issuable upon exercise of
outstanding stock options of which 1,672,122 were then exercisable.

18
<PAGE>
SELECTED FINANCIAL DATA

The following selected operating and financial data for the five fiscal
years ended December 29, 1996 have been derived from the Company's audited
consolidated financial statements. The following selected financial data for the
six month periods ended June 30, 1996 and June 29, 1997 have been derived from
the Company's unaudited condensed consolidated financial statements which, in
the opinion of management, contain all adjustments (consisting of only normal
and recurring adjustments) necessary to present fairly the Company's financial
position and results of operations at such dates and for such periods. The data
presented below should be read in conjunction with, and is qualified in its
entirety by reference to, the Company's consolidated financial statements and
the notes thereto appearing elsewhere in this Prospectus. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
SIX MONTHS
FISCAL YEAR (1) (1)
--------------------------------------------------------------- ------------
1992 1993 1994 1995 1996 1996
---------- ----------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PERCENTAGES AND PER SHARE DATA)
OPERATING DATA:
Net sales................................ $ 660,847 $ 825,569 $ 971,627 $ 1,295,582 $ 1,641,412 $ 671,377
Cost of sales............................ 582,855 715,895 817,934 1,074,785 1,349,130 561,149
---------- ----------- ---------- ------------ ------------ ------------
Gross profit............................. 77,992 109,674 153,693 220,797 292,282 110,228
Selling, general and administrative
expenses............................... 57,423 69,688 90,312 125,539 153,071 67,928
Streamlining and other special charges
(2).................................... 6,140 98,000 -- 40,900 -- --
---------- ----------- ---------- ------------ ------------ ------------
Operating income (loss).................. 14,429 (58,014) 63,381 54,358 139,211 42,300
Interest expense......................... 19,820 25,080 23,825 37,897 58,417 22,308
Income tax provision (benefit)........... 775 (24,700) 15,822 6,584 33,533 7,997
Extraordinary charge (3)................. -- 7,007 -- -- -- --
Cumulative effect of changes in
accounting methods (4)................. -- 55,900 -- -- -- --
---------- ----------- ---------- ------------ ------------ ------------
Net income (loss)........................ $ (6,166) $ (121,301) $ 23,734 $ 9,877 $ 47,261 $ 11,995
---------- ----------- ---------- ------------ ------------ ------------
---------- ----------- ---------- ------------ ------------ ------------
Net income (loss) per common and common
equivalent share (5)................... $ (0.25) $ (4.26) $ 0.69 $ 0.29 $ 1.35 $ 0.34
Weighted average common and common
equivalent shares outstanding (5)...... 24,712 28,468 34,409 34,441 35,003 34,965

OTHER OPERATING DATA:
EBITDA (6)............................... $ 72,655 $ 103,651 $ 124,023 $ 169,926 $ 243,704 $ 86,215
Adjusted operating income (7)............ 20,569 39,986 63,381 95,258 139,211 42,300
Capital expenditures..................... 25,214 57,234 83,875 120,339 70,639 28,844
Cash provided by operations.............. 57,573 83,208 100,124 6,744 146,583 50,799
Gross profit margin...................... 11.8% 13.3% 15.8% 17.0% 17.8% 16.4%
EBITDA margin............................ 11.0 12.6 12.8 13.1 14.8 12.8
Adjusted operating income margin......... 3.1 4.8 6.5 7.4 8.5 6.3
Ratio of earnings to fixed charges
(8)(9)................................. -- -- 2.1x 1.3x 2.2x 1.8x

BALANCE SHEET DATA (AT PERIOD END):
Working capital.......................... $ 40,540 $ 83,125 $ 113,144 $ 160,835 $ 227,068 $ 224,245
Property, plant and equipment, net....... 327,783 356,060 363,929 480,421 818,157 814,844
Total assets............................. 573,907 818,130 837,417 1,150,728 1,822,432 1,768,747
Long-term debt (including current
maturities)............................ 163,122 323,118 293,515 487,106 897,867 918,674
Stockholders' equity..................... 296,847 247,570 274,113 358,766 414,932 379,701

1997
------------
<S> <C>

OPERATING DATA:
Net sales................................ $ 883,998
Cost of sales............................ 732,631
------------
Gross profit............................. 151,367
Selling, general and administrative
expenses............................... 87,852
Streamlining and other special charges
(2).................................... --
------------
Operating income (loss).................. 63,515
Interest expense......................... 40,268
Income tax provision (benefit)........... 9,764
Extraordinary charge (3)................. --
Cumulative effect of changes in
accounting methods (4)................. --
------------
Net income (loss)........................ $ 13,483
------------
------------
Net income (loss) per common and common
equivalent share (5)................... $ 0.39
Weighted average common and common
equivalent shares outstanding (5)...... 34,516
OTHER OPERATING DATA:
EBITDA (6)............................... $ 129,887
Adjusted operating income (7)............ 63,515
Capital expenditures..................... 55,645
Cash provided by operations.............. 5,006
Gross profit margin...................... 17.1%
EBITDA margin............................ 14.7
Adjusted operating income margin......... 7.2
Ratio of earnings to fixed charges
(8)(9)................................. 1.5x
BALANCE SHEET DATA (AT PERIOD END):
Working capital.......................... $ 238,801
Property, plant and equipment, net....... 873,255
Total assets............................. 2,004,205
Long-term debt (including current
maturities)............................ 1,092,682
Stockholders' equity..................... 428,415
</TABLE>

(FOOTNOTES ON FOLLOWING PAGE)

19
<PAGE>
- ------------------------
(1) The fiscal years shown each represent the 52 or 53-week period ending on
the last Sunday in December. Fiscal year 1995 consisted of 53 weeks. Fiscal
years 1992 to 1994 and 1996 each consisted of 52 weeks. The six month
periods ended June 30, 1996 and June 29, 1997 consisted of 26 weeks.

(2) Operating income for 1992 was reduced by $6,140 of non-recurring settlement
costs. Operating income in 1993 was reduced by $98,000 of special charges.
These charges reflect the Company's strategy in 1993 to grant price
concessions to certain significant customers to renew and extend long-term
contracts in advance of their expiration dates and to streamline its
operations in response to the continuing competitive marketplace. In the
fourth quarter of 1995, the Company recorded a streamlining charge of
$40,900. This charge, which was primarily non-cash, was related to the
realignment of certain business operations which resulted in the writedown
of certain assets and a provision for other associated costs. See Note 13 to
the Company's consolidated financial statements.

(3) The 1993 extraordinary charge of $7,007 represents a writeoff, net of an
income tax benefit of $4,670, of deferred financing costs related to early
repayments of indebtedness during 1993.

(4) Effective December 28, 1992, the Company adopted SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" and SFAS No.
109, "Accounting For Income Taxes." Effective this same date, the Company
also elected early adoption of SFAS No. 112, "Employers' Accounting for
Postemployment Benefits." The cumulative effect of adopting these new
accounting standards was a non-cash charge to income of $55,900, net of an
income tax benefit of $22,100.

(5) Net income (loss) per common and common equivalent share is based on the
weighted average common and dilutive common equivalent shares outstanding
during each period after giving effect to the change in the Company's
capital structure pursuant to the November 1995 merger of Printing Holdings,
L.P., the Company's former parent company, with and into the Company and the
adjustment of then outstanding options in order to cause such options to be
exerciseable for Common Stock on a basis consistent with the Company's
capitalization after such merger. This weighted average includes incremental
shares for dilutive common equivalent shares related to the assumed exercise
of stock options, using the treasury stock method. In addition, shares
related to Common Stock issued and incremental shares related to stock
options granted within one year prior to November 22, 1995 (the initial
filing of the registration statement for the initial public offering) at a
purchase or exercise price below $19.00 per share were included in the
weighted average, using the treasury stock method for the stock options, as
if they were outstanding for all pre-issuance periods presented. For all
loss periods, the effect of the assumed exercise of stock options which were
issued in periods prior to the one-year period previously mentioned is not
included because the effect is antidilutive.

(6) EBITDA represents earnings before interest expense, income taxes,
depreciation, amortization and non-recurring streamlining and other special
charges. EBITDA is not intended to represent cash flows for the period, is
not presented as an alternative to operating income as an indicator of
operating performance, may not be comparable to other similarly titled
measures of other companies and should not be considered in isolation or as
a substitute for measures of performance prepared in accordance with
generally accepted accounting principles. See the Company's consolidated
financial statements and the notes thereto appearing elsewhere in this
Prospectus.

(7) Adjusted operating income represents operating income before non-recurring
streamlining and other special charges. Adjusted operating income is not
intended to represent cash flows for the period, is not presented as an
alternative to operating income as an indicator of operating performance,
may not be comparable to other similarly titled measures of other companies
and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with generally accepted accounting
principles. See the Company's consolidated financial statements and the
notes thereto appearing elsewhere in this Prospectus.

(8) For purposes of computing the ratio of earnings to fixed charges, earnings
consists of income (loss) before income taxes, extraordinary charge and
cumulative effect of changes in accounting methods, plus fixed charges
(other than capitalized interest) and amortization of previously capitalized
interest. Fixed charges consist of interest expense and debt issuance cost,
capitalized interest and that portion of rental expense representative of
the interest factor. The 1995 ratio reflects the 1995 streamlining charge of
$40,900 discussed in footnote (2). Excluding the effect of this charge, the
1995 ratio would be 2.2x.

(9) The Company's earnings were inadequate to cover fixed charges by $4,484 and
$83,014 in 1992 and 1993, respectively. Adjusted to eliminate non-cash
charges of depreciation and amortization of $52,086, 1992 earnings would
have exceeded fixed charges by $47,602. Adjusted to eliminate non-cash
charges of depreciation and amortization of $63,665, as well as the
nonrecurring streamlining charge of $98,000, 1993 earnings would have
exceeded fixed charges by $78,651.

20
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL CONDITION
AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED
FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS PROSPECTUS.

GENERAL

The Company is a diversified commercial printer serving customers in the
magazine, catalog, commercial, direct mail, directory and book markets. The
Company's objective is to continue its growth in net sales, operating income,
operating income margin and net income. World Color has achieved compound annual
growth rates in net sales and adjusted operating income over the past five
fiscal years of 25.5% and 61.3%, respectively, and has grown net income from a
net loss of $6.2 million in 1992 to net income of $47.3 million in 1996.

The Company's revenues are derived primarily from the sale of services and
materials to its customer base, including digital and prepress services, press
and binding services and distribution and logistics services. The Company has a
broad and diverse customer base, of which no one customer accounted for more
than 6.0% of 1996 net sales.

Operating expenses include primarily the cost of paper and ink, salaries and
employee benefits, occupancy, depreciation and amortization and other general
and administrative expenses. The Company is focused on providing high-quality
services within a low cost structure by, among other things, increasing
efficiency and productivity and matching costs to revenues.

As in recent years, there continues to be significant pricing pressure on
all printers, including the Company. The Company's net sales include sales to
certain customers of paper purchased by the Company. The price of paper, the
primary raw material used by the Company, is volatile over time and may cause
significant swings in net sales and cost of sales. The Company generally is able
to pass on increases in the cost of paper to its customers, while declines in
paper costs result in lower prices to its customers. In 1995, the availability
of most grades of paper tightened and paper prices increased significantly.
Throughout 1996, paper prices decreased significantly and availability returned
to more normalized levels. Since the beginning of 1997, the paper market firmed
in pricing and availability for certain grades. While no assurances can be
given, the Company anticipates that the price of certain grades of paper may
increase over the next twelve months, but does not expect that such increases
would have a material effect on the Company's net sales, net income and margins.
The Company's contracts with its customers generally provide for price
adjustments to reflect price changes for other materials, wages and outside
services.

The Company's operations are seasonal. Historically, approximately
two-thirds of its operating income has been generated in the second half of the
fiscal year, primarily due to the higher number of magazine pages, new product
launches and back-to-school and holiday catalog promotions.

ACQUISITION HISTORY

World Color has completed 16 strategic acquisitions over the past five years
having a combined purchase price of over $1.0 billion. These acquisitions have
enabled the Company to diversify its business mix and to expand its services and
geographic presence. The following table summarizes these acquisitions.

21
<PAGE>

<TABLE>
<CAPTION>
DATE ACQUISITION LOCATION STRATEGIC BENEFITS
- --------------------- ------------------------ --------------------- -----------------------------------------
<S> <C> <C> <C>
July 1997 THE JOHNSON & HARDIN CO. Lebanon, OH/ COMPLEMENTARY SHORT TO MEDIUM-RUN PRINTER
Red Bank, OH SERVICING THE MAGAZINE AND COMMERCIAL
MARKET SECTORS, LOCATED IN THE MID-REGION
OF THE COUNTRY; PROVIDED VALUABLE SHORT
CUT-OFF PRESS CAPACITY.
January 1997 RAND MCNALLY BOOK & Versailles, KY/ ESTABLISHED PRESENCE AS A PRINTER OF
MEDIA SERVICES COMPANY Taunton, MA HARDCOVER BOOK; COMPLEMENTARY TO
("RAND MCNALLY") OPERATIONS SERVICING MASS-MARKET,
RACKSIZE BOOK PUBLISHERS.
October 1996 MT/ORLANDO, INC. Orlando, FL COMPLEMENTARY EXPANSION OF COMMERCIAL
OPERATING PRESENCE IN SOUTHEASTERN
REGION.
August 1996 ISA DIRECT, INC. Aurora, IL INCREASED NATIONAL PRESENCE AS A PRINTER
OF DIRECT MAIL MATERIALS; PROVIDED DIRECT
IMAGING AND PERSONALIZATION CAPABILITIES.
June 1996 KRUEGER ACQUISITION Itasca, IL SIGNIFICANT EXPANSION OF CATALOG AND
CORPORATION (RINGIER (headquarters) MAGAZINE PRINTING CAPABILITIES; PROVIDED
AMERICA) ENTRY INTO PRINTING FOR MASS-MARKET,
RACKSIZE BOOK PUBLISHERS.

April 1996 SHEA COMMUNICATIONS Oklahoma City, OK COMPLEMENTARY EXPANSION OF COMMERCIAL,
COMPANY CATALOG AND DIRECT MAIL PRINTING
CAPABILITIES.

February 1996 VIKING COLOR Los Angeles, CA INCREASED NATIONAL DIGITAL PREPRESS
CAPABILITIES.
November 1995 DIGITAL PRE-PRESS, INC. New York, NY INCREASED NATIONAL DIGITAL PREPRESS
CAPABILITIES.
September 1995 IMAGE TECHNOLOGIES, INC. St. Petersburg, FL ESTABLISHED PRESENCE AS AN INTERACTIVE,
MULTI-MEDIA SERVICE PROVIDER.

March 1995 THE WESSEL COMPANY, INC. Elk Grove Village, IL STRENGTHENED PRESENCE AS A PRINTER OF
DIRECT MAIL MATERIAL.
March 1995 NORTHEAST GRAPHICS INC. North Haven, CT COMPLEMENTARY EXPANSION OF COMMERCIAL
OPERATING PRESENCE IN NORTHEASTERN
REGION.
March 1995 THE LANMAN COMPANIES,
INC.:
Lanman Progressive Washington, D.C. INCREASED NATIONAL DIGITAL PREPRESS
CAPABILITIES.
Lanman Lithotech, Inc. Orlando, FL INCREASED NATIONAL DIGITAL PREPRESS
CAPABILITIES.
Central Florida Press, Orlando, FL EXPANDED COMMERCIAL CAPABILITIES AND
L.L.C. OPERATING PRESENCE IN SOUTHEASTERN
REGION.
May 1994 UNIVERSAL GRAPHICS Warren, MI INCREASED NATIONAL DIGITAL PREPRESS
CORPORATION CAPABILITIES.

February 1994 WEB INSERTS/ Gainesville, GA INCREASED PRESENCE AS A PRINTER FOR
ATLANTA, INC. CATALOG INSERT AND DIRECT MAIL
PUBLISHERS.
December 1993 GEORGE RICE & SONS Los Angeles, CA ESTABLISHED WEST COAST PRESENCE IN THE
PRINTING OF HIGH-END COMMERCIAL PRODUCTS.
February 1993 THE ALDEN PRESS COMPANY Elk Grove Village, IL SIGNIFICANTLY INCREASED PRESENCE AS A
PRINTER FOR THE SPECIALTY CONSUMER
CATALOG AND DIRECT MAIL.
</TABLE>

22
<PAGE>
RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 29, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

Net sales increased $212.6 million or 31.7%, to $884.0 million in 1997 from
$671.4 million in 1996. The increase was due to the inclusion of the sales from
acquisitions in 1996 and improved base business performance as well as the
contribution from the Rand McNally acquisition in January 1997. Lower paper
prices in the period versus 1996 partially offset the revenue increases.

Gross profit increased $41.1 million or 37.3% to $151.4 million in 1997 from
$110.2 million in 1996, increasing gross profit margin to 17.1% from 16.4% in
1996. This improvement is a result of acquisitions in 1996 and 1997, including
the benefits of certain cost reduction initiatives and other synergies resulting
from the combination of the businesses, increased plant utilization and the
effect of lower paper prices.

Selling, general and administrative expenses increased $19.9 million or
29.3% to $87.9 million in 1997 from $67.9 million in 1996. The increase was
attributable to acquisitions in 1996 and 1997, including the related additional
amortization expense for goodwill.

Interest expense increased $18.0 million or 80.5% to $40.3 million in 1997
from $22.3 million in 1996. The increase was attributable to higher average
borrowings incurred to fund acquisitions as well as capital expenditures and
working capital requirements.

The effective tax rate, primarily composed of the combined federal and state
statutory rates, was 42% for the first six months of 1997 compared to 40% for
the comparable period in 1996. The increase was primarily due to the additional
non-deductible amortization expense for goodwill resulting from acquisitions.

YEAR ENDED DECEMBER 29, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Net sales increased $345.8 million or 26.7% to $1,641.4 million in 1996 from
$1,295.6 million in 1995. The increase was due to acquisitions in 1996,
partially offset by lower paper prices. 1996 net sales also benefited slightly
by continued business growth from new and existing customers.

Gross profit increased $71.5 million or 32.4% to $292.3 million in 1996 from
$220.8 million in 1995. The increase is attributable to the inclusion of
acquisitions in 1996, as well as increased volume and improved operating
efficiencies. Gross profit margins improved to 17.8% in 1996 from 17.0% in 1995
as a result of acquisitions in 1996, including certain cost savings and other
operating synergies that have resulted from the combination of the businesses,
along with the effect of lower paper prices.

Selling, general and administrative expenses increased $27.5 million or
21.9% to $153.1 million in 1996 from $125.5 million in 1995. The increase is
partially attributable to acquisitions in 1996, including the related additional
amortization expense for goodwill, as well as increased selling expenses related
to higher volume.

Operating income increased $84.9 million or 156.1% to $139.2 million in 1996
from $54.4 million in 1995. The increase is attributable to the factors
discussed in the preceding paragraphs, and the absence in 1996 of a streamlining
charge of $40.9 million recorded in the fourth quarter of 1995, when the Company
finalized and committed to a plan to realign certain business operations. The
major components of this realignment plan were to close a facility and to
consolidate certain digital prepress operations and functions. Before the
reduction for the 1995 streamlining charge, 1996 operating income increased
$44.0 million or 46.1%.

Interest expense increased $20.5 million or 54.1% to $58.4 million in 1996
from $37.9 million in 1995. The increase is attributable to higher average
borrowings incurred to fund acquisitions in 1996 and capital expenditures,
partially offset by a slight benefit from a lower average cost of funds.

23
<PAGE>
The effective income tax rate was approximately 41.5% for 1996 and 40.0% for
1995, and was primarily composed of the combined federal and state statutory
rates.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 25, 1994

Net sales increased $324.0 million or 33.3% to $1,295.6 million in 1995 from
$971.6 million in 1994. Acquisitions in 1995 accounted for approximately one
half of the sales increase. In addition, approximately one third of the sales
increase resulted from higher paper prices. Continued business growth from new
and existing customers also benefited 1995 sales.

Gross profit increased $67.1 million or 43.7% to $220.8 million in 1995 from
$153.7 million in 1994. The increase is attributable to the inclusion of
acquisitions in 1995, increased volume and improved operating efficiencies.
Gross profit margins improved to 17.0% in 1995 from 15.8% in 1994 primarily as a
result of acquisitions in 1995.

Selling, general and administrative expenses increased $35.2 million or
39.0% to $125.5 million in 1995 from $90.3 million in 1994. The increase is
partially attributable to acquisitions in 1995, including the related additional
amortization expense for goodwill, as well as increased selling expenses related
to higher volume.

Operating income decreased $9.0 million or 14.2% to $54.4 million in 1995
from $63.4 million in 1994. The decrease is attributable to the inclusion in
1995 of the streamlining charge of $40.9 million described above, as well as the
factors discussed in the preceding paragraphs. Before the reduction for the
streamlining charge, operating income increased $31.9 million or 50.3% to $95.3
million in 1995 from $63.4 million in 1994.

Interest expense increased $14.1 million or 59.1% to $37.9 million in 1995
from $23.8 million in 1994. The increase is attributable to higher average
borrowings primarily incurred to fund acquisitions in 1995, capital expenditures
and working capital requirements associated with significant increases in price
and inventory levels of paper combined with an increased average cost of funds.

The effective income tax rate was 40.0% for both 1995 and 1994, and was
primarily composed of the combined federal and state statutory rates.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically met its liquidity and capital investment needs
with internally generated funds and external borrowings. Net income plus
depreciation and amortization, deferred taxes, and streamlining charge was $98.9
million, $124.7 million and $165.3 million for the fiscal years 1994, 1995 and
1996, respectively, and was $59.4 million and $83.3 million for the first six
months of 1996 and 1997, respectively.

Working capital was $113.1 million, $160.8 million and $227.1 million at
December 25, 1994, December 31, 1995 and December 29, 1996, respectively, and
$224.2 million and $238.8 million at June 30, 1996, and June 29, 1997,
respectively. Exclusive of acquisitions in 1996, raw materials inventory levels
decreased approximately $41.9 million or 43.7% in 1996 as a result of the
Company's successful efforts to utilize existing inventory, combined with lower
inventory requirements due to more normalized availability and lower prices of
paper.

Capital expenditures totaled $83.9 million, $120.3 million and $70.6 million
in 1994, 1995 and 1996, respectively, and are expected to total approximately
$95.0 million in 1997, of which $55.6 million was spent through the first six
months of 1997. These capital expenditures reflect the purchase of additional
press and bindery equipment and the expansion of four of the Company's
facilities. These capital expenditures have increased the Company's capacity and
are part of the Company's ongoing program to maintain modern, efficient plants
and continually increase productivity.

24
<PAGE>
World Color has completed sixteen strategic acquisitions over the past five
years. Since the beginning of fiscal 1997, the Company has completed two
acquisitions having a combined purchase price of approximately $194.0 million,
including assumed indebtedness.

The Company's capital expenditures and acquisitions have been funded in part
by borrowings under the Credit Agreement. In June 1997, the Credit Agreement was
amended in conjunction with the sale of accounts receivable described below.
After giving effect to this amendment, certain pay-downs and concurrent
commitment reductions, the Credit Agreement provides for aggregate total
commitments of $920.0 million, comprised of $95.0 million in term loan
commitments, $250.0 million of revolving loan commitments and $575.0 million in
acquisition term loan commitments. The Credit Agreement provides for reductions
in commitments commencing in 1998 and matures on December 31, 2002. Borrowings
bear interest at rates that fluctuate with the prime rate and Eurodollar rate.
Upon completion of the securitization transaction, the Company had undrawn
commitments of approximately $190.0 million under the Credit Agreement. The
weighted average borrowing rate under the Credit Agreement was 6.51% as of June
29, 1997.

Concurrently with the amendment to the Credit Agreement on June 30, 1997,
the Company entered into an agreement to sell, on a revolving basis for a period
of up to five years, certain of its accounts receivable to a wholly-owned
subsidiary, which entered into an agreement to transfer, on a revolving basis,
an undivided percentage ownership interest in a designated pool of accounts
receivable to a maximum of $204.0 million. These transactions will be reflected
as a reduction of accounts receivable.

In connection with the Offerings, the Company will seek to amend its Credit
Agreement in order to provide additional flexibility to pursue the Company's
business strategy. The proposed amendments to the Credit Agreement would, among
other things, increase the Company's borrowing capacity to fund future
acquisitions by $200.0 million. See 'Description of Certain Indebtedness--Credit
Agreement.'

The Company has operating lease arrangements for certain press and bindery
equipment. Lease expense related to such leases was approximately $29.5 million,
$23.6 million and $24.5 million in 1994, 1995 and 1996, respectively.

The Company received $74.8 million from the sale of Common Stock to
investment partnerships affiliated with KKR in May 1995. These proceeds were
used to repay outstanding borrowings under the Company's bank credit facility
and to fund certain acquisitions.

At December 29, 1996, the Company had net operating loss carryforwards for
federal income tax purposes of $37.1 million available to reduce future taxable
income, expiring primarily between 2004 and 2008, and has tax credits of $2.3
million expiring primarily from 1999 to 2002. Also, the Company has alternative
minimum tax carryover credits of $19.0 million which do not expire and may be
applied against regular tax in the future, in the event regular tax expense
exceeds alternative minimum tax.

The Company believes that its liquidity, capital resources and cash flows
from operations are sufficient to fund planned capital expenditures, working
capital requirements and interest and principal payments for the foreseeable
future.

The Company is currently evaluating the potential impact of the situation
commonly referred to as the "Year 2000 Issue." The Year 2000 Issue, which
affects most corporations, concerns the inability of information systems,
primarily computer software programs, to properly recognize and process date
sensitive information relating to the year 2000 and beyond. The Company is in
the process of determining the costs and expenditures associated with the Year
2000 Issue, however, the majority of the Company's financial systems, as well as
certain other significant information systems, are currently year 2000
compliant.

25
<PAGE>
BUSINESS

GENERAL

Since the appointment of a new management team in May 1991, World Color has
significantly expanded its national presence as a leading, innovative commercial
printer, and has achieved significant growth in sales, adjusted operating income
and net income, while also improving its operating margins. Management's
commitment to this growth is evidenced by the management team's long-term
ownership interest in the Company, which has increased since 1991. Over the past
five fiscal years, net sales and adjusted operating income grew at compound
annual rates of 25.5% and 61.3%, respectively, and net income increased from a
net loss of $6.2 million in 1992 to net income of $47.3 million in 1996. In
addition, the Company has recorded five consecutive years of improvement in its
adjusted operating income margins. The Company continued its strong growth
through the first six months of 1997, with net sales, operating income and net
income increasing 31.7%, 50.2%, and 12.4%, respectively, compared with the same
six month period in 1996. In addition, the Company's operating income margin
increased to 7.2% for the first six months of 1997 from 6.3% for the comparable
1996 period.

GROWTH STRATEGY

ESTABLISH AND STRENGTHEN LEADERSHIP POSITIONS IN DIVERSE, BALANCED
BUSINESSES. World Color continues to increase its services and expand its
geographic presence in order to provide for its customers' full range of digital
imaging, print and information management and delivery needs. The Company has
chosen to operate in areas of the industry in which it believes it can capture a
larger share of its customers' business by offering a broad array of high
quality products and services, cost-effective distribution, advanced
technological capabilities and competitive pricing. The Company's commitment to
quality, combined with its broad range of services offered, has formed the basis
for World Color's long-standing customer relationships. As a result of its
diverse business mix, geographic presence and reputation for quality, World
Color has been able to attract new customers as well as capture incremental
sales from existing customers.

26
<PAGE>
believes that its competitive and financial strengths and considerable
experience in identifying, acquiring and integrating complementary businesses
will continue to provide significant growth opportunities. While the Company
continuously evaluates opportunities to make strategic acquisitions, at present
it has no commitments or agreements with respect to any material acquisitions.

LOW COST OPERATING STRUCTURE. World Color makes a vigorous effort to
optimize the management of its financial resources and believes World Color's
ratio of selling, general and administrative expenses to net sales is among the
lowest in the industry. A reengineering process begun in January 1996 has also
contributed to the Company's improved cost structure and productivity. This
effort entailed standardizing and streamlining the many processes of the
Company's diverse operations. Results have included more effective approaches to
applying technology and greater leverage from shared services. World Color's
"one-company" operating structure has also improved capacity utilization by
balancing production across plants and reduced costs by providing a central
support organization for administrative services. In addition, the Company's
purchasing power enables it to acquire raw materials and equipment on more
favorable terms than its smaller competitors, as well as to ensure the
availability of raw materials in tight markets.

THE PRINTING INDUSTRY

The $60 billion commercial printing industry in the United States is highly
fragmented and capital-intensive, and includes the printing and distribution of
magazines, advertising inserts, catalogs, direct mail, free-standing inserts,
directories and other printed material. There are approximately 35,000
commercial printers in the United States today, approximately 500 of which have
revenues in excess of $10 million. Technological trends in the industry,
together with increasing demands by customers for specialized capabilities and a
full range of services have increased the competitive advantages available to
the Company and other large printers. The Company believes that only large,
well-capitalized printers, such as itself, will be capable of making the capital
expenditures necessary to invest in state-of-the-art technology and provide
customers a full range of services and as a result, the Company believes that
consolidation in the printing industry will continue.

WORLD COLOR SERVICES

As a result of significant capital expenditures and strategic acquisitions
which have allowed the Company to diversify its services, expand its geographic
presence and enhance its use of new technologies, World Color is an industry
leader in the management and distribution of print and digital information. The
Company's services include:

DIGITAL AND PREPRESS SERVICES. The Company provides a complete spectrum of
film and digital preparation services, from traditional paste-up and color
separations to state-of-the-art, all-digital prepress, as well as digital
imaging and digital archiving. The Company's ten specialized digital and
prepress facilities, which are strategically located close to the Company's
customers, provide high quality, 24-hour preparatory services linked directly to
the Company's various printing facilities. In addition, the Company's computer
systems enable customers and World Color to exchange images and textual material
electronically directly between the Company's printing and prepress facilities
and the customers' business

27
<PAGE>
locations. The Company's integrated prepress operations provide it with
comparative advantages over traditional prepress shops that are not able to
provide the same level of integrated services. The Company's digital group also
provides multi-media services such as the transformation of customers' existing
printed and digital material into interactive media such as user-friendly
information kiosk systems, Internet web sites, corporate intranets, CD-ROM's and
computer laptop sales presentations. The Company's digital services group has
provided a natural opportunity for the Company's cross-selling efforts by
offering its integrated prepress and multi-media services to the Company's print
customers who may have historically used third-party suppliers for their
prepress and multi-media needs.

PRESS AND BINDING SERVICES. The Company believes that it provides its
customers with access to state-of-the-art technology in all phases of the
printing and binding process, including, among others, wide-web presses,
computerized quality information systems, computer-to-plate and digital
processing systems, high speed binding and personalization capabilities and
robotic material handling. Wide-web press technology, a large expenditure which
only a small number of well-capitalized printers are able to justify, generates
a significant cost savings on longer press runs. The computerized quality
information systems provide the Company and its customers with instant analysis
of the quality of the printing, thereby enabling the Company to improve its
performance and plan preventative maintenance of its equipment more effectively.
The computer-to-plate and digital processing technologies eliminate the use of
film which significantly reduces costs and production time and enables World
Color's customers to extend their production deadlines. The Company's
personalization capabilities allow customers to include different content,
whether advertising or editorial or both, within different copies of their
product depending upon the geographic, demographic and subscriber specifications
of their readers.

The Company operates web and sheetfed offset, rotogravure and flexographic
presses. The Company believes that the variety and capabilities of its presses
and other production equipment allow World Color to meet the broad range of its
customers' printing needs and be the full service provider demanded by the
market. This capacity provides the Company with the competitive advantage over
those smaller printers who are unable to meet this demand.

DISTRIBUTION AND LOGISTICS. The Company believes that its sophisticated
mailing and distribution capabilities are among the best in the industry. World
Color maintains a network of strategic regional locations from which it provides
its customers important local access to the Company's nationwide services.
Nearly all of the Company's printing facilities dedicated to servicing its
magazine, catalog and direct mail customers are strategically located in the
mid-region of the country. The Company believes that the size of these printing
plants and their central location and close proximity to each other provide the
Company with a significant advantage in distribution capabilities, enabling it
to distribute a greater volume of product than its competitors to a wider target
market at a lower cost. The Company also operates facilities on the west and
east coasts which serve more regionalized needs. The Company uses computerized
cost studies to examine the benefits of pooled and palletized mailing for each
customer to develop an efficient and cost effective distribution plan designed
to ensure that the customer's product reaches consumers at narrowly specified
delivery times.

MARKETS AND CUSTOMERS

28
<PAGE>
WORLD COLOR BUSINESS MIX
PERCENTAGE OF NET SALES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
1990 PRO FORMA 1996 *

<S> <C> <C> <C> <C>
Magazines 72% Magazines 29%
Catalogs 4% Catalogs 29%
Commercial 10% Direct Mail 9%
Directories 14% Book Services 3%
Commercial 25%
Directories 5%
</TABLE>

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
1990 PRO FORMA 1996 *

<S> <C> <C> <C> <C>
Magazines 72% Magazines 29%
Catalogs 4% Catalogs 29%
Commercial 10% Direct Mail 9%
Directories 14% Book Services 3%
Commercial 25%
Directories 5%
</TABLE>

- ------------------------------

* Does not give effect to the acquisitions of the Rand McNally Book Services
Group or The Johnson & Hardin Co. in January and July of 1997, respectively.

MAGAZINES

The Company believes that it is the second largest U.S. consumer magazine
printer, printing over 1.8 billion magazines annually with approximately 600
titles. The Company had approximately $541.3 million in Pro Forma 1996
consolidated net sales in this category and believes that its principal
competitors in this category consist of three diversified printing companies.

The Company's customers in this sector include publishers such as The Conde
Nast Publications Inc., Forbes, Inc., Hachette Filipacchi Magazines, Inc.,
Hearst Corporation, Johnson Publishing, K-III, National Geographic, The New York
Times Company Sports & Leisure Group, News America Publications, Inc., Newsweek,
Inc., Petersen Publishing Company, Rodale Press, Inc., Wenner Media, and certain
of their respective affiliates, whose titles include:

- - AMERICAN WAY
- - ARCHITECTURAL DIGEST
- - CIGAR AFICIONADO
- - EBONY
- - ELLE
- - ENTERTAINMENT WEEKLY
- - FORBES
- - GOLF DIGEST
- - GOOD HOUSEKEEPING
- - MARTHA STEWART LIVING

29
<PAGE>
- - MEN'S HEALTH
- - NATIONAL GEOGRAPHIC
- - NEWSWEEK
- - ROAD AND TRACK
- - ROLLING STONE
- - SOAP OPERA WEEKLY
- - TEEN
- - TV GUIDE
- - VOGUE
- - WOMAN'S DAY

World Color's publication customer base includes some of the largest and
most established consumer magazines in a diverse range of market categories.
Established publications are the most likely to have a continuing and improving
presence. Additionally, the popularity of these magazines makes them less
susceptible to cyclical downturns in advertising spending, which the Company
believes provides it with a significant advantage over competitors whose
customers may be more susceptible to such downturns.

A majority of the Company's magazine printing is performed under contracts
with remaining terms of between one and nine years, the largest of which are
with customers whose relationships with the Company average more than 20 years.
The Company has extended a majority of such contracts beyond their initial
expiration dates and intends to continue this practice when economically
practical. The Company is currently the largest printer for Conde Nast and
Hachette Filipacchi.

CATALOGS

The Company is a leading printer for the U.S. catalog market, with Pro Forma
1996 consolidated net sales of approximately $542.1 million in this market. The
Company prints approximately 3.0 billion catalogs annually.

The Company believes that the consumer catalogs market is one of the fastest
growing markets of the retail industry. In addition, the Company's
business-to-business catalog printing work spans a broad range of industries
including the computer, home and office furniture, office products and
industrial safety products industries. The Company currently prints over 2,000
catalog titles including:

<TABLE>
<S> <C>
- AVON - RELIABLE
- BLAIR - SERVICE MERCHANDISE
- GLOBAL DIRECTMAIL - SONY
- HAMMACHER SCHLEMMER - SPIEGEL
- J.C. PENNEY - STARBUCKS
- J. PETERMAN CO. - TALBOT'S
- LENOX COLLECTIONS - VICTORIA'S SECRET
- PAPER DIRECT - WILLIAMS-SONOMA
- POTPOURRI
</TABLE>

The Company's key competitors in this category consist of four diversified
commercial printers whose facilities enable them to compete in the national
market and smaller local and regional printers who compete for regional
business.

COMMERCIAL

The Company had Pro Forma 1996 consolidated net sales for the commercial
market of approximately $456.4 million.

The Company is a premier printer of high quality, specialty products such as
annual reports and automobile and travel brochures. World Color is also a
leading printer of product brochures, bill stuffers, informational marketing
materials and other advertising supplements. In addition, the Company prints
free standing inserts and retail inserts for established national retailers such
as J.C. Penney, News America, Pier 1 Imports, True Value and Wal-Mart. The
Company has focused on building lasting customer relationships through
investments in equipment, focused customer service and the maintenance of the
flexibility required to accommodate specific and changing customer needs. The
Company believes its reputation for and dedication to innovation and leadership
in specialized services will allow it to enjoy continued loyalty from its
customers.

30
<PAGE>
The Company's significant customers in this sector include:

<TABLE>
<S> <C>
- ADOBE/LOGISTIX - GUESS?
- BMG - OUTBACK STEAKHOUSE
- COLUMBIA PICTURES - PILLSBURY
- DONNA KARAN/NEW YORK - PRINCESS CRUISES
- FORD MOTOR
</TABLE>

With a broad range of specialized equipment and focused attention to
customer service, the Company provides its commercial customers with format
flexibility, high speed production and the ability to print high quality
commercial products from start to finish at one full-service source.

DIRECT MAIL

The Company had Pro Forma 1996 consolidated net sales for the direct mail
printing market of approximately $167.7 million. The Company believes that it is
a leading provider of production and distribution services for direct mail
marketers. Direct mail marketing services are an important and growing component
of many businesses' marketing programs and overall U.S. advertising
expenditures. Among the direct mail services provided are direct imaging,
personalization and other lettershop services. The Company's traditional
strengths in efficient, high quality production, printing and mailing and
distribution services are the foundation of the Company's direct mail services
and allow the Company to provide a broad range of direct mail services. The
Company focuses on marketing and cross-selling its direct mail services.

World Color's customers in this sector include:

- - ADVO
- - BLAIR
- - CITICORP
- - DISCOVERCARD
- - THE FRANKLIN MINT
- - GOODYEAR TIRE & RUBBER COMPANY
- - NATIONAL GEOGRAPHIC
- - QUAKER OATS

DIRECTORIES

The Company had Pro Forma 1996 consolidated net sales from directory
printing of approximately $97.7 million. The Company has printed directories
since 1981 predominantly through its relationship with Pacific Bell. The Company
prints four-color white-page and yellow-page directories for Pacific Bell
pursuant to a contract which extends through the year 2000 and which can be
extended by Pacific Bell for up to an additional five years. In addition, the
Company prints over a total of 100 different regional directory titles for
Pacific Bell and certain other customers. The Company prints over 34 million
directories annually.

BOOKS

Through its acquisition of Ringier America in June 1996, World Color
believes it has become the largest printer of mass-market, racksize books in the
world. The Company prints mass-market, racksize books for customers including:

- - AVON BOOKS
- - BANTAM DOUBLEDAY DELL
- - KENSINGTON PUBLISHING
- - PENGUIN BOOKS USA
- - RANDOM HOUSE
- - ST. MARTINS PRESS/TOR

In January 1997, the Company acquired the Book Services Group of Rand
McNally, which prints hardcover books for the consumer, education and reference
markets, and services many of the largest U.S. publishers. The Company prints
hardcover books for customers including:

31
<PAGE>
- - COLLIERS
- - ENCYCLOPAEDIA BRITANNICA
- - GROLIER
- - RANDOM HOUSE
- - READER'S DIGEST
- - RODALE PRESS
- - THOMAS PUBLISHING
- - TIME WARNER

The Company believes that its principal competitors in the mass-market,
racksize book and the hardcover book categories consist of two diversified
printing companies.

SALES AND MARKETING

The Company maintains an extensive network of sales offices located
throughout the United States. As of August 31, 1997, the Company had
approximately 230 sales and marketing representatives. The Company offers
incentive-based compensation as well as salary and bonus to reward both targeted
sales efforts and attention to customer service. As part of World Color's
continuing focus on marketing itself as a full-service information production
and distribution provider, the Company maintains an incentive program to
encourage its sales force to cross-sell Company products and services to
customers.

32
<PAGE>
FACILITIES

The Company's corporate office is located in leased facilities in Greenwich,
Connecticut. Production facilities are located throughout the United States, as
set forth below. As of August 31, 1997, in addition to its corporate
headquarters, the Company maintained twenty-four printing plants, four
warehouses, ten digital and prepress facilities, one distribution/bindery
facility and five distribution centers. In order to meet its need for additional
production capacity, in 1994 and 1995 the Company expanded its Dyersburg and
Covington, Tennessee; Oberlin, Ohio; and Gainesville, Georgia plants by
approximately 26%, 60%, 100% and 188% (based on square footage), respectively.
The Company believes its facilities provide adequate production capacity for its
needs. The Company believes that none of its leases is material to its
operations and that such leases were entered into on market terms. Summary
information regarding the Company's facilities is set forth below:

<TABLE>
<CAPTION>
USE AND LOCATION OWNED/LEASED SQUARE FOOTAGE
- ------------------------------------------------------------------------ ------------- --------------

<S> <C> <C>
CORPORATE HEADQUARTERS:
Greenwich, Connecticut................................................ Leased 31,000

PRINTING PLANT:
Augusta, Georgia...................................................... Owned 650,000
Aurora, Illinois...................................................... Owned 227,000
Brookfield, Wisconsin................................................. Owned 309,000
Corinth, Mississippi.................................................. Owned 623,000
Covington, Tennessee.................................................. Owned 565,000
Dresden, Tennessee.................................................... Owned 618,300
Dyersburg, Tennessee.................................................. Owned 865,000
Elk Grove Village, Illinois........................................... Owned 175,000
Elk Grove Village, Illinois........................................... Leased 93,000
Effingham, Illinois................................................... Owned 640,000
Gainesville, Georgia.................................................. Leased 130,000
Jonesboro, Arkansas................................................... Owned 425,000
Lebanon, Ohio......................................................... Owned 280,000
Los Angeles, California............................................... Leased 299,000
Merced, California.................................................... Owned 500,000
North Haven, Connecticut.............................................. Owned 440,000
Oberlin, Ohio......................................................... Owned 110,000
Oklahoma City, Oklahoma............................................... Owned 210,000
Orlando, Florida...................................................... Leased 191,000
Red Bank, Ohio........................................................ Owned 168,000
Salem, Illinois....................................................... Owned 680,000
Stillwater, Oklahoma.................................................. Owned 335,000
Taunton, Massachusetts................................................ Owned 352,000
Versailles, Kentucky.................................................. Owned 1,090,000

DIGITAL SERVICES/PREPRESS:
Charlotte, North Carolina............................................. Leased 28,000
Des Plaines, Illinois................................................. Owned 26,000
Lake Mary, Florida.................................................... Leased 11,000
Los Angeles, California............................................... Leased 21,000
New York, New York.................................................... Leased 10,000
Orlando, Florida...................................................... Leased 27,000
St. Charles, Missouri................................................. Leased 20,000
Tampa, Florida........................................................ Leased 14,300
Warren, Michigan...................................................... Leased 11,000
Washington, D.C....................................................... Owned 65,000

DISTRIBUTION:
Altamont, Illinois.................................................... Leased 27,000
Bensenville, Illinois (DISTRIBUTION/BINDERY).......................... Owned 307,000
Flora, Illinois....................................................... Owned 119,000
Lexington, Kentucky................................................... Leased 175,000
Lexington, Kentucky................................................... Leased 108,000
Trenton, Tennessee.................................................... Leased 96,000

WAREHOUSE:
Corinth, Mississippi.................................................. Leased 25,600
Dresden, Tennessee.................................................... Leased 34,900
Elk Grove Village, Illinois........................................... Leased 102,000
Versailles, Kentucky.................................................. Leased 46,000
</TABLE>

32
<PAGE>
RAW MATERIALS

The primary raw materials required in a printing operation are ink and
paper. The Company supplies all of the ink and a substantial amount of the paper
used in the printing process. The Company provides warehouse space for both
World Color and customer supplied paper. The price of paper, the primary raw
material used by the Company, is volatile over time and may cause significant
swings in net sales and cost of sales. The Company generally is able to pass on
increases in the cost of paper to its customers, while declines in paper costs
result in lower prices to its customers. In 1995, the availability of most
grades of paper tightened and paper prices increased significantly. Throughout
1996, paper prices decreased significantly and availability returned to more
normalized levels. During the first half of 1997, the paper market has firmed in
pricing and availability for certain grades. While no assurances can be given,
the Company anticipates that the price of certain grades of paper may increase
over the next twelve months, but does not expect that such increases would have
a material effect on the Company's net sales, net income and margins. The
Company's contracts with its customers also generally provide for price
adjustments to reflect price changes for other materials, wages and outside
services. World Color's materials management program capitalizes on the
Company's purchasing power in order to minimize materials costs while optimizing
inventory management. In addition, the Company's strong commercial relationships
with a relatively small number of suppliers allow the Company to negotiate
favorable price discounts and achieve more assured sourcing of high quality
paper that meets the Company's specifications. The Company believes that it has
adequate allocations with its paper suppliers to meet its customers' needs and
that an adequate supply of ink is available. The Company is not dependent upon
any one source for its paper or ink. Given the volume of the Company's
purchases, the Company is generally able to obtain quality paper, ink and other
materials at competitive prices.

EMPLOYEES

As of August 31, 1997, the Company had approximately 14,000 employees, of
which approximately 2,300, or 16%, were represented by unions. As of August 31,
1997, approximately 62% of such union employees were covered under several
different labor contracts which expire in September and October 1998, with the
balance covered by labor contracts that expire during 1999 and 2000. The Company
believes it has satisfactory employee and labor relations.

ENVIRONMENTAL COMPLIANCE

The Company is subject to regulation under various and changing federal,
state and local laws relating to the environment and to employee safety and
health. These environmental regulations relate to the generation, storage,
transportation, disposal and emission into the environment of various
substances. Permits are required for operation of the Company's business
(particularly air emission permits), and these permits are subject to renewal,
modification and, in certain circumstances, revocation. The Company believes
that it is in substantial compliance with such laws and permitting requirements.
The Company is also subject to regulation under various and changing federal,
state and local laws which allow regulatory authorities to compel (or seek
reimbursement for) cleanup of environmental contamination at its own sites and
at facilities where its waste is or has been disposed. The Company has internal
controls and personnel dedicated to compliance with all applicable environmental
laws. The Company estimates that capital expenditures in 1997 and 1998 required
to comply with federal, state and local provisions for environmental controls,
as well as expenditures for the Company's share of costs for environmental
clean-up, if any, will not be material and will not have a material adverse
effect on the Company. The Company expects to incur on going capital and
operating costs to maintain compliance with applicable environmental laws, which
costs the Company does not expect to be, in the aggregate, material.

RESEARCH AND DEVELOPMENT

Suppliers of equipment and materials used by companies such as World Color
perform most of the research and development related to the printing industry.
Accordingly, the Company has not spent a

33
<PAGE>
material amount of resources for such purposes. World Color does, however,
dedicate significant resources to improve its operating efficiencies and the
services it provides to its customers. In an effort to realize increased
efficiencies in its printing processes, the Company has made significant
investments in state-of-the-art equipment including new press and binding
technology, digital photography, computer-to-plate and digital processing
technology and real-time product quality monitoring systems.

LEGAL PROCEEDINGS

The Company does not believe that there are any pending legal proceedings
which, if adversely determined, could have a material adverse effect on the
financial condition or results of operations of the Company, taken as a whole.

34
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The table below sets forth the names, ages as of the date of this Prospectus
and titles of the executive officers and directors of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- --------- ----------------------------------------------------------------------
<S> <C> <C>
Robert G. Burton................... 59 Chairman of the Board of Directors, President and Chief Executive
Officer
Jennifer L. Adams.................. 38 Executive Vice President, Chief Legal and Administrative Officer and
Secretary
Jerome V. Brofft................... 52 Senior Vice President, Purchasing and Logistics
Dean E. Cherry..................... 36 Executive Vice President, Investor Relations and Corporate
Communications
Michael W. Harris.................. 42 President, Manufacturing
Martin K. Jacobus.................. 45 President, Publication and Directory Sales
Heidi J. Nolte..................... 40 Senior Vice President, Chief Information Officer
Thomas M. Pierno................... 35 Executive Vice President, Chief Financial Officer
Thomas J. Quinlan III.............. 34 Vice President, Treasurer
Marc L. Reisch..................... 42 Group President, Sales and Chief Operating Officer
Brian W. Sullivan.................. 39 President, Commercial Division
John E. Van Horn................... 57 President, Catalog Sales
</TABLE>

ROBERT G. BURTON has been Chairman of the Board, President and Chief
Executive Officer since May 1991.

JENNIFER L. ADAMS has been Executive Vice President, Chief Legal and
Administrative Officer and Secretary since July 1995 and is responsible for the
legal, benefits, human resources, information systems, safety, and environmental
departments. Ms. Adams was Executive Vice President, General Counsel and
Secretary of the Company since October 1993. Prior thereto, Ms. Adams was Vice
President, General Counsel and Secretary of the Company since December 1991.

JEROME V. BROFFT has been Senior Vice President, Purchasing and Logistics
since October 1995 and prior thereto was Vice President, Purchasing and
Logistics since February 1995. Prior thereto, Mr. Brofft was Vice President,
Purchasing since May 1992. Prior to joining World Color in May 1992, Mr. Brofft
was Director of Purchasing at Western Publishing Company.

DEAN E. CHERRY has been Executive Vice President, Investor Relations and
Corporate Communications since February 1997. Prior thereto, Mr. Cherry was
Executive Vice President, Operations since September 1996 and Senior Vice
President, Operations since January 1994. Mr. Cherry was Vice President,
Regional Manager of World Color's Stillwater, Oklahoma plant from January 1993
to January 1994 and was Vice President, Operations from June 1991 until January
1993.

MICHAEL W. HARRIS has been President, Manufacturing since December 1995 and
prior thereto was Executive Vice President, Manufacturing since July 1995. Prior
thereto, Mr. Harris was Senior Vice President, Manufacturing since October 1993
and was Vice President, Manufacturing since 1992.

MARTIN K. JACOBUS has been President, Publication and Directory Sales since
July 1995 and prior thereto was Vice President and Division President--Magazines
and Directories since October 1993. Prior to such date, Mr. Jacobus was Vice
President, Sales and Marketing since June 1992. From May 1991 to June 1992 Mr.
Jacobus held the position of Group Vice President, Western Sales.

35
<PAGE>
HEIDI J. NOLTE has been Senior Vice President, Chief Information Officer of
the Company since June 1997. Prior thereto, Ms. Nolte was Vice President, Chief
Information Officer since joining World Color in September 1994. Prior to
joining World Color, Ms. Nolte was Senior Director, MIS at U.S. Surgical where
she had been employed since 1979.

THOMAS M. PIERNO has been Executive Vice President, Chief Financial Officer
since March 1997, and prior thereto was Senior Vice President, Finance. Prior
thereto, Mr. Pierno was Vice President, Controller from August 1996. Mr. Pierno
was Assistant Controller from May 1994 to August 1996. Prior to joining World
Color in May 1994, Mr. Pierno was Director of Financial Planning at Paramount
Communications Inc. since 1991.

THOMAS J. QUINLAN III has been Vice President, Treasurer since July 1997.
Prior thereto, Mr. Quinlan was Assistant Treasurer of the Company since February
1994 and prior thereto, was Manager of Treasury Administration at Marsh &
McLennan Companies Inc.

MARC L. REISCH has been Group President, Sales and Chief Operating Officer
since August 1996. Prior thereto, Mr. Reisch was Executive Vice President, Chief
Operating and Financial Officer since June 1996 and Executive Vice President,
Chief Operating and Financial Officer and Treasurer since July 1995. Prior
thereto he was Executive Vice President, Chief Financial Officer and Treasurer
since October 1993. From October 1991 until October 1993, Mr. Reisch was Vice
President, Chief Financial Officer and Treasurer of the Company.

BRIAN W. SULLIVAN has been President, Commercial Division since September
1996. Prior thereto, Mr. Sullivan was President, Northeast Graphics Inc.
("Northeast Graphics") since December 1995 and prior thereto, was Vice
President, Sales & Marketing, Northeast Graphics since April 1989.

JOHN E. VAN HORN has been President, Catalog Sales since August 1995. Prior
thereto, Mr. Van Horn was Group President, Publication and Catalog since July
1995. Mr. Van Horn was Vice President and Division President, Catalog from
August 1993 until July 1995. Prior thereto, Mr. Van Horn was Senior Vice
President of The Alden Printing Company, Sales and Marketing Division since
January 1992.

The Company's Board of Directors consists of Gerald S. Armstrong, Mr.
Burton, Dr. Mark J. Griffin, Mr. Harris, Henry R. Kravis, Alexander Navab, Jr.,
Mr. Reisch, George R. Roberts and Scott M. Stuart. Messrs. Kravis and Roberts
are managing members of the limited liability company which is the general
partner of KKR (the "KKR LLC"). Mr. Stuart is a member of KKR LLC. Messrs.
Kravis, Roberts and Stuart are General Partners of KKR Associates. Mr. Navab is
an Executive of KKR and a limited partner of KKR Associates.

36
<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of August 31, 1997, and is adjusted to reflect
the sale of 4,600,000 shares in the Stock Offerings (assuming exercise of the
underwriters' over-allotment option in full) including beneficial ownership by
(i) each stockholder of World Color who owns more than 5% of the outstanding
shares of the Common Stock, (ii) each director of World Color, (iii) the Chief
Executive Officer of World Color, (iv) World Color's four highest paid executive
officers (exclusive of the Chief Executive Officer) and (v) all directors and
executive officers of World Color as a group. Except as otherwise noted, the
persons named in the table below have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them. The
address for the listed beneficial owners, unless stated otherwise, is c/o World
Color Press, Inc., The Mill, 340 Pemberwick Road, Greenwich, Connecticut 06831.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
AS OF AUGUST 31, 1997 AFTER STOCK OFFERINGS (1)
-------------------------- --------------------------
<S> <C> <C> <C> <C>
NAME SHARES PERCENT SHARES PERCENT
- ---------------------------------------------------------- ------------- ----------- ------------- -----------
KKR Associates (2)........................................ 17,546,289 52.0% 17,546,289 45.7%
Henry R. Kravis (2)....................................... -- -- -- --
George R. Roberts (2)..................................... -- -- -- --
Scott M. Stuart (2)....................................... -- -- -- --
Alexander Navab, Jr. (2).................................. -- -- -- --
Gerald S. Armstrong....................................... 109,661(3) * 109,661(3) *
Mark J. Griffin........................................... 1,657 * 1,657 *
Robert G. Burton.......................................... 725,368(4) 2.1 725,368(4) 1.9
Marc L. Reisch............................................ 169,257(5) * 169,257(5) *
Jennifer L. Adams......................................... 122,591(6) * 122,591(6) *
Michael W. Harris......................................... 106,915(7) * 106,915(7) *
Brian W. Sullivan......................................... 9,568(8) * 9,568(8) *
All directors and executive officers as a group........... 1,587,194(9) 4.5 1,587,194(9) 4.0
</TABLE>

- ------------------------------

* Signifies less than 1%

(1) For purposes of this table "beneficial ownership" includes any shares which
such person has the right to acquire within 60 days of August 31, 1997. For
purposes of computing the percentage of outstanding shares held by each
person or group of persons named above on a given date, any security which
such person or persons has the right to acquire within 60 days after such
date is deemed to be outstanding for purposes of computing the percentage
ownership of such person, but is not deemed to be outstanding in computing
the percentage ownership of any other person.

(2) Shares of the Common Stock shown as owned by KKR Associates are owned of
record by KKR Associates, APC Associates, L.P. ("APC Associates"), GR
Associates, L.P. ("GR Associates"), WCP Associates, L.P. ("WCP Associates")
and KKR Partners II, L.P. ("KKR Partners II"). The sole general partner of
each of APC Associates, GR Associates, WCP Associates and KKR Partners II is
KKR Associates which possesses sole voting and investment power with respect
to the shares of the Common Stock shown as owned by KKR Associates. Messrs.
Kravis, Roberts and Stuart (directors of World Color) and Robert I.
MacDonnell, Paul E. Raether, Michael W. Michelson, Michael T. Tokarz, James
H. Greene, Jr., Edward A. Gilhuly, Perry Golkin and Clifton S. Robbins, as
the general partners of KKR Associates, may be deemed to share beneficial
ownership of the shares of Common Stock shown as beneficially owned by KKR
Associates. Each of such persons disclaim beneficial ownership of such
shares, other than to the extent of his economic interest in such shares.
The address of KKR Associates is 9 West 57th Street, New York, New York
10019.

(3) Includes an aggregate of 90,595 options that are exercisable within 60 days
of the date hereof as well as an aggregate of 1,500 shares owned of record
by children of Mr. Armstrong, of which shares Mr. Armstrong may be deemed to
have indirect ownership.

(4) Includes an aggregate of 609,240 options that are exercisable within 60 days
of the date hereof as well as 44 shares owned of record by children of Mr.
Burton, of which shares Mr. Burton may be deemed to have indirect ownership.

(5) Includes an aggregate of 146,250 options that are exercisable within 60 days
of the date hereof.

(6) Includes an aggregate of 104,111 options that are exercisable within 60 days
of the date hereof as well as an aggregate of 1,000 shares owned of record
by children of Ms. Adams, of which shares Ms. Adams may be deemed to have
indirect ownership. Ms. Adams serves as the custodian for such shares.

(7) Includes an aggregate of 91,665 options that are exercisable within 60 days
of the date hereof.

(8) Includes an aggregate of 9,000 options that are exercisable within 60 days
of the date hereof.

(9) Includes an aggregate of 1,331,998 options that are exercisable within 60
days of the date hereof as well as the shares that may be deemed to be owned
indirectly by each of Mr. Armstrong and Ms. Adams as set forth in notes (3)
and (6).

37
<PAGE>
DESCRIPTION OF NOTES

The Notes are to be issued under an indenture to be dated as of October 8,
1997 (the "Indenture"), between the Company and State Street Bank and Trust
Company, as trustee (the "Trustee") the form of which is filed as an exhibit to
the Registration Statement of which this Prospectus is a part. A copy of the
Indenture will be available from the Trustee upon request by a registered holder
of the Notes. The following summaries of certain provisions of the Notes and the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the Notes and the
Indenture, including the definitions therein of certain terms which are not
otherwise defined in this Prospectus. Wherever particular provisions or defined
terms of the Indenture (or of the Form of Note which is a part thereof) are
referred to, such provisions or defined terms are incorporated herein by
reference.

GENERAL

The Notes will represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company as
described under "Subordination of Notes" and convertible into Common Stock as
described under "Conversion of Notes." The Notes will rank PARI PASSU in right
of payment with the Company's 9 1/8% Senior Subordinated Notes due 2003 (the
"Senior Subordinated Notes"). The Notes will be limited to $132.0 million
($151.8 million if the Underwriters' over-allotment option is exercised in full)
aggregate principal amount, will be issued only in denominations of $1,000 or
any multiple thereof and will mature on October 1, 2007, unless earlier redeemed
at the option of the Company or at the option of the holder upon a Change in
Control (as defined below).

The Indenture does not contain any financial covenants or restrictions on
the payment of dividends, the incurrence of Senior Indebtedness (as defined
below under "Subordination of Notes") or the issuance or repurchase of
securities of the Company, except to the extent described under "--Subordination
of Notes." The Indenture contains no covenants or other provisions to afford
protection to holders of the Notes in the event of a highly leveraged
transaction or a change in control of the Company except to the extent described
under "Redemption at Option of Holders Upon a Change in Control."

The Notes will bear interest at the annual rate set forth on the cover page
hereof from October 8, 1997, payable semi-annually on April 1 and October 1,
commencing on April 1, 1998, to holders of record at the close of business on
the preceding March 15 and September 15, respectively, except (i) that the
interest payable upon redemption (unless the date of redemption is an interest
payment date) will be payable to the person to whom principal is payable and
(ii) as set forth in the next succeeding sentence. In the case of any Note (or
portion thereof) which is converted into Common Stock of the Company during the
period from (but excluding) a record date to (but excluding) the next succeeding
interest payment date either (i) if such Note (or portion thereof) has been
called for redemption on a redemption date which occurs during such period, or
is to be redeemed in connection with a Change in Control on a Repurchase Date
(as defined below) which occurs during such period, the Company shall not be
required to pay interest on such interest payment date in respect of any such
Note (or portion thereof) or (ii) if otherwise, any Note (or portion thereof)
submitted for conversion during such period shall be accompanied by funds equal
to the interest payable on such succeeding interest payment date on the
principal amount so converted (see "Conversion of Notes" below). Interest may,
at the Company's option, be paid either (i) by check mailed to the address of
the person entitled thereto as it appears in the Note register or (ii) by
transfer to an account maintained by such person located in the United States;
provided, however, that payments to The Depository Trust Company, New York, New
York ("DTC") will be made by wire transfer of immediately available funds to the
account of DTC or its nominee. Interest will be computed on the basis of a
360-day year composed of twelve 30-day months.

The Notes have been approved for listing on the New York Stock Exchange,
subject to notice of official issuance.

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<PAGE>
FORM, DENOMINATION AND REGISTRATION

The Notes will be issued in fully registered form, without coupons, in
denominations of $1,000 principal amount and multiples thereof.

GLOBAL NOTE, BOOK-ENTRY FORM. The Notes will be evidenced by one or more
global notes (each a "Global Note"), which will be deposited with, or on behalf
of, DTC and registered in the name of Cede & Co. ("Cede") as DTC's nominee.

Except as set forth below, the Global Note may be transferred, in whole or
in part, only to another nominee of DTC or to a successor of DTC or its nominee.
Non-U.S. Persons, if any, will be required to hold their Notes in definitive
registered form. As a result, the ability to transfer beneficial interests in
such Notes may be limited.

So long as Cede, as the nominee of DTC, is the registered owner of the
Global Note, Cede for all purposes will be considered the sole holder of the
Global Note. Except as provided below, owners of beneficial interests in the
Global Note will not be entitled to have certificates registered in their names,
will not receive or be entitled to receive physical delivery of certificates in
definitive form, and will not be considered the holders thereof.

Payment of interest on and the redemption price of the Global Note will be
made to Cede, the nominee for DTC, as the registered owner of the Global Note by
wire transfer of immediately available funds on each interest payment date or
the redemption date, as the case may be. Neither the Company, the Trustee nor
any payment agent will have any responsibility or liability for any aspect of
the records relating to or payments make on account of beneficial ownership
interests in the Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.

The Company has been informed by DTC that, with respect to any payment of
interest on, or the redemption price of, the Global Note, DTC's practice is to
credit Participants' accounts on the payment date therefor with payments in
amounts proportionate to their respective beneficial interests in the principal
amount represented by the Global Note as shown on the records of DTC, unless DTC
has reason to believe that it will not receive payment on such payment date.
Payments by Participants to owners of beneficial interests in the principal
amount represented by the Global Note held through such Participants will be the
responsibility of such Participants, as is now the case with securities held for
the accounts of customers registered in "street name."

Because DTC can only act on behalf of Participants, who in turn act on
behalf of certain banks, brokers, dealers, trust companies and other parties
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly ("Indirect Participants"), the ability of a person
having a beneficial interest in the principal amount represented by the Global
Note to pledge such interest to persons or entities that do not participate in
the DTC system, or otherwise take actions in respect of such interest, may be
affected by the lack of a physical certificate evidencing such interest.

Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the Company that it will take any action permitted
to be taken by a holder of Notes (including, without limitation, the
presentation of Notes for exchange as described below), only at the direction of
one or more Participants to whose account with DTC interests in the Global Note
are credited, and only in respect of the principal amount of the Notes
represented by the Global Note as to which such Participant or Participants has
or have given such direction.

DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York

39
<PAGE>
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC holds securities that its
Participants deposit with DTC. DTC also facilitates the clearance and settlement
of securities transactions between Participants through electronic book-entry
changes to the accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Underwriters. Certain of such
Participants (or their representatives), together with other entities, own DTC.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through, or maintain a custodial
relationship with, a Participant, either directly or indirectly.

Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among Participants, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days, the Company will cause Notes to be issued in
definitive form in exchange for the Global Note.

CERTIFICATED NOTES. If (i) the Company notifies the Trustee in writing that
the DTC is no longer willing or able to act as a depositary and the Company is
unable to locate a qualified successor within 90 days or (ii) the Company, at
its option, notifies the Trustee in writing that it elects to cause the issuance
of Notes in definitive form under the Indenture, then, upon surrender by DTC of
the Global Notes, certificated Notes will be issued to each person that DTC
identifies as the beneficial owner of the Notes represented by the Global Notes.
In addition, any person having a beneficial interest in a Global Note may, upon
request to the Trustee, exchange such beneficial interests for Notes in the form
of certificated Notes. Upon any such issuance, the Trustee is required to
register such certificated Notes in the name of such person or persons (or the
nominee of any thereof) and to cause the same to be delivered thereto.

Neither the Company nor the Trustee shall be liable for any delay of DTC or
any Participant or Indirect Participant in identifying the beneficial owner of
the Notes, and the Company and the Trustee may conclusively rely on, and shall
be protected in relying on, instructions from DTC for all purposes (including
with respect to the registration and delivery, and the respective principal
amounts, of the Notes to be issued).

The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable. The
Company will have no responsibility for the performance by DTC or its
Participants of their respective obligations as described hereunder or under the
rules or procedures governing their respective operations.

CONVERSION OF NOTES

The holders of Notes will be entitled at any time after 90 days following
the date of original issuance thereof through the close of business on the first
business day prior to the final maturity date of the Notes, subject to prior
redemption, to convert any Notes or portions thereof (in denominations of $1,000
or multiples thereof) into Common Stock of the Company, at the conversion price
set forth on the cover page of this Prospectus, subject to adjustment as
described below. Except as described below, no payment or other adjustment will
be made on conversion of any Notes for interest accrued thereon or for dividends
on any Common Stock issued. If any Notes not called for redemption are converted
after a record date for the payment of interest and prior to the next succeeding
interest payment date, such Notes must be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the principal
amount so converted provided that no such payment will be required if the
Company exercises its rights to redeem the Notes. The Company is not required to
issue fractional shares of Common Stock upon conversion of Notes and, in lieu
thereof, will pay a cash adjustment based upon the market price of Common Stock
on the last business day prior to the date of conversion. In the case of Notes
called for redemption, conversion rights will expire at the close of business on
the business day preceding the day

40
<PAGE>
fixed for redemption unless the Company defaults in the payment of the
redemption price. A Note in respect of which a holder is exercising its option
to require redemption upon a Change in Control may be converted only if such
holder withdraws its election to exercise its option in accordance with the
terms of the Indenture.

The initial conversion price of $41.47 per share of Common Stock is subject
to adjustment under formulae as set forth in the Indenture in certain events,
including:

(i) the issuance of Common Stock of the Company as a dividend or
distribution on the Common Stock;

(ii) certain subdivisions and combinations of the Common Stock;

(iii) the issuance to all holders of Common Stock of certain rights or
warrants to purchase Common Stock;

(iv) the distribution to all holders of Common Stock of capital stock
(other than Common Stock), or evidences of indebtedness of the Company or of
assets (including securities, but excluding those rights, warrants,
dividends and distributions referred to above or paid in cash);

(v) distributions consisting of cash, excluding any quarterly cash
dividend on the Common Stock to the extent that the aggregate cash dividend
per share of Common Stock in any quarter does not exceed the greater of (x)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require an adjustment of the conversion price pursuant to
this clause (v) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (y) 3.75 percent of the average of the last reported
sales price of the Common Stock during the ten trading days immediately
prior to the date of declaration of such dividend, and excluding any
dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company. If an adjustment is required to be made as set
forth in this clause (v) as a result of a distribution that is a quarterly
dividend, such adjustment would be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded pursuant to this clause (v). If an adjustment is required to be
made as a result of a distribution that is not a quarterly dividend, such
adjustment would be based upon the full amount of the distribution; and

(vi) the completion of a tender or exchange offer made by the Company or
any subsidiary of the Company for Common Stock that involves an aggregate
consideration that, together with any cash and other consideration payable
in a tender or exchange offer by the Company or any subsidiary of the
Company for Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer in respect of which no
adjustment has been made, exceeds 15% of the Company's market capitalization
on the expiration date of such tender or exchange offer.

In the case of (i) any reclassification of the Common Stock, or (ii) a
consolidation, merger or combination involving the Company or a sale or
conveyance to another person of the property and assets of the Company as an
entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, other securities,
other property or assets (including cash) with respect to or in exchange for
such Common Stock, the holders of the Notes then outstanding will generally be
entitled thereafter to convert such Notes into the kind and amount of shares of
stock, other securities or other property or assets which they would have owned
or been entitled to receive upon such reclassification, change, consolidation,
merger, combination, sale or conveyance had such Notes been converted into
Common Stock immediately prior to such reclassification, consolidation, merger,
combination, sale or conveyance assuming that a holder of Notes would not have
exercised any rights of election as to the stock, other securities or other
property or assets receivable in connection therewith.

41
<PAGE>
In the event of a taxable distribution to holder of Common Stock or in
certain other circumstances requiring conversion price adjustments, the holders
of Notes may, in certain circumstances, be deemed to have received a
distribution subject to United States income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock. See "Certain Federal Income Tax
Considerations."

The Company from time to time may to the extent permitted by law reduce the
conversion price by any amount for any period of at least 20 days, in which case
the Company shall give at least 15 days' notice of such reduction, if the Board
of Directors has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive. The Company
may, at its option, make such reductions in the conversion price, in addition to
those set forth above, as the Board of Directors deems advisable to avoid or
diminish any income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes. See "Certain Federal Income Tax
Considerations."

No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; provided that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing.

OPTIONAL REDEMPTION BY THE COMPANY

The Notes are not entitled to any sinking fund. The Notes are not redeemable
by the Company prior to October 4, 2000. Thereafter, the Notes will be
redeemable on at least 30 days' notice at the option of the Company, in whole or
in part at any time, at the redemption prices (expressed in percentages of the
principal amount) set forth below, in each case together with accrued interest
to and including the date fixed for redemption; provided that, on or after
October 4, 2000 and prior to October 4, 2002, the Notes will not be redeemable
at the option of the Company unless the reported last sale price of the Common
Stock for 20 trading days within a period of 30 consecutive trading days ending
within five trading days prior to the notice of redemption shall have exceeded
$58.06 per share (subject to adjustment upon the occurrence of certain events).

If redeemed during the period beginning October 4, 2000, and ending
September 30, 2001, a redemption price of 104.2%, and if redeemed during the
12-month period beginning October 1:

<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- --------------------------------------------------------------------------------- -----------
<S> <C>
2001............................................................................. 103.6%
2002............................................................................. 103.0
2003............................................................................. 102.4
2004............................................................................. 101.8
2005............................................................................. 101.2
2006............................................................................. 100.6
</TABLE>

and 100% at October 1, 2007; provided that any semi-annual payment of interest
becoming due on the date fixed for redemption shall be payable to the holders of
record on the relevant record date of the Notes being redeemed. Notwithstanding
the foregoing, the Company may not redeem any Notes unless all accrued and
unpaid interest has been paid on all outstanding Notes for all interest periods
terminating on or prior to the last interest payment date before the date of
redemption.

If less than all of the outstanding Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed in principal amounts of $1,000 or
multiples thereof by lot, pro rata or by another method the

42
<PAGE>
Trustee considers fair and appropriate. If a portion of a holder's Notes is
selected for partial redemption and such holder converts a portion of such
Notes, such converted portion shall be deemed to be of the portion selected for
redemption.

REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE IN CONTROL

If a Change in Control (as defined below) occurs, each Holder of Notes shall
have the right, at the Holder's option, to require the Company to repurchase all
of such Holder's Notes, or any portion of the principal amount thereof that is
equal to $1,000 or an integral multiple of $1,000 in excess thereof, on the date
(the "Repurchase Date") that is 45 days after the date of the Company Notice (as
defined below), at a price equal to 100% of the principal amount of the Notes to
be repurchased (the "Repurchase Price"), together with interest accrued to the
Repurchase Date.

The Company may, at its option, in lieu of paying the Repurchase Price in
cash, pay the Repurchase Price in Common Stock, the fair market value of which
Common Stock shall be equal to 95% of the average of the closing prices of the
Common Stock for the five consecutive Trading Days ending on and including the
third Trading Day preceding the Repurchase Date, provided that payment may not
be made in Common Stock unless such shares are listed on a national securities
exchange or traded on the Nasdaq National Market at the time of payment.

Within 30 days after the occurrence of a Change in Control, the Company is
obligated to give to all Holders of the Notes notice, as provided in the
Indenture (the "Company Notice"), of the occurrence of such Change in Control
and of the repurchase right arising as a result thereof. The Company Notice
shall be sufficiently given to Holders of Notes if in writing and mailed, first
class postage prepaid, to each Holder of a Note affected by such event, at the
address of such Holder. The Company must also deliver a copy of the Company
Notice to the Trustee. To exercise the repurchase right, a Holder of Notes must
deliver on or before the 30th day after the date of the Company Notice
irrevocable written notice to the Trustee of the Holder's exercise of such
right, together with the Notes with respect to which the right is being
exercised. At least two business days prior to the Repurchase Date, the Company
must publish a notice in the manner described above specifying whether the
Company will pay the Repurchase Price in cash or in Common Stock.

A Change in Control shall be deemed to have occurred at such time after the
original issuance of the Notes as there shall occur:

(i) the acquisition by any Person of beneficial ownership, directly or
indirectly, through a purchase, merger or other acquisition transaction or
series of transactions, of shares of capital stock of the Company entitling
such person to exercise 50% or more of the total voting power of all shares
of capital stock of the Company entitled to vote generally in elections of
directors, other than any such acquisition by the Company, any subsidiary of
the Company or any employee benefit plan of the Company; or

(ii) any consolidation of the Company with, or merger of the Company
into, any other Person, any merger of another Person into the Company, or
any sale or transfer of all or substantially all of the assets of the
Company to another Person (other than (a) any such transaction (x) which
does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock and (y) pursuant to which
holders of Common Stock immediately prior to such transaction have the
entitlement to exercise, directly or indirectly, 50% or more of the total
voting power of all shares of capital stock entitled to vote generally in
the election of directors of the continuing or surviving person immediately
after such transaction and (b) any merger which is effected solely to change
the jurisdiction of incorporation of the Company and results in a
reclassification, conversion or exchange of outstanding shares of Common
Stock solely into shares of common stock);

43
<PAGE>
provided, however, that a Change in Control shall not be deemed to have occurred
if either (a) the closing price per share of the Common Stock for any five
Trading Days within the period of 10 consecutive Trading Days ending immediately
after the later of the Change in Control or the public announcement of the
Change in Control (in the case of a Change in Control under clause (i) above) or
ending immediately before the Change in Control (in the case of a Change in
Control under clause (ii) above) shall equal or exceed 105% of the conversion
price of the Notes in effect on each such Trading Day, or (b) all of the
consideration (excluding cash payments for fractional shares) in the transaction
or transactions constituting the Change in Control consist of common stock
traded on a national securities exchange or quoted on the Nasdaq National Market
and as a result of such transaction or transactions the Notes become convertible
solely into such common stock. "Beneficial owner" shall be determined in
accordance with Rule 13d-3 promulgated by the Commission under the Exchange Act,
as in effect on the date of original execution of the Indenture.

The Company will comply with the provisions of Rule 13e-4 and any other
tender offer rules under the Exchange Act which may then be applicable in
connection with the redemption rights of Note holders in the event of a Change
in Control. The redemption rights of the holders of Notes could discourage a
potential acquiror of the Company. The Change in Control redemption feature,
however, is not the result of management's knowledge of any specific effort to
obtain control of the Company by means of a merger, tender offer, solicitation
or otherwise, or part of a plan by management to adopt a series of anti-takeover
provisions.

The Company could, in the future, enter into certain transactions, including
certain recapitalizations of the Company, that would not constitute a Change in
Control, but that would increase the amount of Senior Indebtedness outstanding
at such time. Further, the payment of the Change in Control redemption price on
the Notes may be subordinated to the prior payment of Senior Indebtedness as
described under "Subordination of Notes" below and is prohibited by the Credit
Agreement. There are no restrictions in the Indenture on the creation of
additional Senior Indebtedness or other indebtedness. Under certain
circumstances, the incurrence of additional indebtedness could have an adverse
effect on the Company's ability to service its indebtedness, including the
Notes. If a Change in Control were to occur, there can be no assurance that the
Company would have sufficient funds to pay the Change in Control redemption
price for all Notes tendered by the holders thereof. A default by the Company on
its obligations to pay the Change in Control redemption price could result in
acceleration of the payment of other indebtedness of the Company at the time
outstanding pursuant to cross-default provisions.

SUBORDINATION OF NOTES

The Indebtedness evidenced by the Notes is subordinated to the extent
provided in the Indenture to the prior payment in full in cash or cash
equivalents of all Senior Indebtedness whether outstanding on the date of the
Indenture or thereafter incurred, including any interest accruing subsequent to
a bankruptcy or other similar proceeding whether or not such interest is an
allowed claim enforceable against the company in a bankruptcy case under Title
11 of the United States Code, including without limitation, the Company's
obligations under the Credit Agreement, and is PARI PASSU in right of payment
with the Company's 9 1/8% Senior Subordinated Debentures due 2003. Upon any
distribution of assets of the Company of any kind or character, whether in cash,
property or securities upon any dissolution, winding up, total or partial
liquidation or reorganization of the Company (including, without limitation, in
bankruptcy, insolvency, or receivership proceedings or upon any assignment for
the benefit of creditors or any other marshalling of the Company's assets and
liabilities), the holders of Senior Indebtedness shall be first entitled to
receive payment in full in cash or cash equivalents of all amounts payable under
Senior Indebtedness (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Indebtedness whether
or not interest is an allowed claim enforceable against the Company in any such
proceeding) before the holders of Notes will be entitled to receive any payment
with respect to the Notes, and until all Obligations (as defined in the
Indenture) with respect to Senior Indebtedness are paid in full

44
<PAGE>
in cash or cash equivalents, any distribution to which the holders of Notes
would be entitled shall be made to the holders of Senior Indebtedness. The
Indenture will require that the Company promptly notify holders of Senior
Indebtedness if payment of the Notes is accelerated because of an Event of
Default.

No direct or indirect payment by or on behalf of the Company of principal
of, premium, if any, or interest on the Notes whether pursuant to the terms of
the Notes or upon acceleration or otherwise shall be made if, at the time of
such payment there exists a default in the payment of all or any portion of
principal of, premium, if any, or interest on any Designated Senior Debt (and
the Trustee has received written notice thereof), and such default shall not
have been cured or waived or the benefits of this sentence waived by or on
behalf of the holders of the Designated Senior Debt. In addition, during the
continuance of any other event of default with respect to (i) the Credit
Agreement pursuant to which the maturity thereof may be accelerated, (a) upon
the receipt by the Trustee of written notice from the Credit Agent (as defined
in the Indenture), or (b) if such event of default results from the acceleration
of the Notes, the date of such acceleration, no such payment may be made by the
Company upon or in respect of the Notes for a period ("Payment Blockage Period")
commencing on the earlier of the date of receipt of such notice or the date of
such acceleration and ending 179 days thereafter (unless such Payment Blockage
Period shall be terminated by written notice to the Trustee from the Credit
Agent), or (ii) any other Designated Senior Debt, upon receipt by the Trustee of
written notice from the trustee or other representative for the holders of such
Designated Senior Debt (or the holders of at least a majority in principal
amount of such other Designated Senior Debt then outstanding), no such payment
may be made by or on behalf of the Company upon or in respect of the Notes for a
Payment Blockage Period commencing on the date of receipt of such notice and
ending 119 days thereafter (unless such Payment Blockage Period shall be
terminated by written notice to the Trustee from such trustee or other
representative commencing the Payment Blockage Period). Notwithstanding anything
herein to the contrary; in no event will a Payment Blockage Period extend beyond
179 days from the date on which such Payment Blockage Period was commenced. Not
more than one Payment Blockage Period may be commenced with respect to the Notes
during any period of 360 consecutive days; provided that the commencement of a
Payment Blockage Period by the holders of Designated Senior Debt other than
under the Credit Agreement shall not bar the commencement of another Payment
Blockage Period by the Credit Agent within such period of 360 consecutive days.
For all purposes of this paragraph, no event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Debt initiating such Payment Blockage Period
shall be, or be made, the basis for the commencement of a second Payment
Blockage Period by the representative of such Designated Senior Debt whether or
not within a period of 360 consecutive days unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days.

The term "Senior Indebtedness" means (i) the Senior Bank Debt, (ii) all
obligations of the Company under the GECC Lease and (iii) any other Indebtedness
permitted to be incurred under the terms of the Indenture, unless the instrument
under which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Notes. Notwithstanding
any thing to the contrary in the foregoing, Senior Indebtedness shall not
include (a) Indebtedness that is expressly subordinate or junior in right of
payment to any Indebtedness of the Company, (b) Indebtedness that is represented
by Redeemable Stock (as defined in the Indenture), (c) any liability for
federal, state, local or other taxes owed or owing by the Company, (d)
Indebtedness of the Company to any Subsidiary (as defined in the Indenture) or
any other Affiliate (as defined in the Indenture) of the Company, (e) trade
payables, (f) Indebtedness that is incurred in violation of the Indenture
governing the Senior Subordinated Debentures, and (g) the Senior Subordinated
Notes.

The term "Designated Senior Debt" means (i) the Senior Bank Debt and (ii)
any other Senior Indebtedness permitted under the indenture having a principal
amount of at least $30.0 million that is designated as "Designated Senior
Indebtedness" by written notice from the Company to the Trustee.

45
<PAGE>
The term "Senior Bank Debt" means Indebtedness and all other monetary
obligations of every nature outstanding under the Credit Agreement, including
letters of credit and reimbursement obligations in respect thereof and letters
of credit and reimbursement obligations in respect of letters of credit issued
by lenders party to the Credit Agreement.

The term "Credit Agreement" means the Company's Second Amended and Restated
Credit Agreement, dates as of June 6, 1996, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, supplemented,
renewed, refunded, refinanced, restructured or replaced from time to time
(including without limitation, any extension of maturity thereof, or the
inclusion of additional borrowers or guarantors thereunder).

The term "GECC Lease" means the Participation Agreement, dated as of April
30, 1990, by and among the Company, as lessee, General Electric Capital
Corporation, as owner participant, and The Connecticut National Bank, as owner
trustee, and all other agreements entered into in connection therewith, each as
amended from time to time.

The term "Indebtedness" means, with respect to any Person (as defined in the
Indenture), any indebtedness, contingent or otherwise, in respect of borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of such Person or only to a portion thereof), or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
obligations with respect thereto) or representing the balance deferred and
unpaid of the purchase price of any property (including pursuant to financing
leases), if and to the extent any of the foregoing indebtedness would appear as
a liability upon a balance sheet of such person prepared in accordance with GAAP
(as defined in the Indenture) (except that any such balance that constitutes a
trade payable and/or an accrued liability arising in the ordinary course of
business shall not be considered Indebtedness), and shall also include, to the
extent not otherwise included, any Capital Lease Obligations (as defined in the
Indenture), the maximum fixed repurchase price of any Redeemable Stock,
indebtedness secured by a Lien (as defined in the Indenture) to which the
property or assets owned or held by such Person is subject, whether or not the
obligations secured thereby shall have been assumed, guarantees of items that
would be included within this definition to the extent of such guarantees
(exclusive of whether such items would appear upon such balance sheet), and net
liabilities in respect of Currency Agreements and Interest Rate Agreements (as
defined in the Indenture). For purposes of the preceding sentence, the maximum
fixed repurchase price of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to the Indenture;
provided that if such Redeemable Stock is not then permitted to be repurchased,
the repurchase price shall be the book value of such Redeemable Stock. The
amount of Indebtedness of any Person at any date shall be without duplication
(i) the outstanding balance of such date of all unconditional obligations as
described above and the maximum liability of any such contingent obligations at
such date and (ii) in the case of Indebtedness of others secured by a Lien to
which the property or assets owned or held by such person is subject, the lesser
of the fair market value at such date of any asset subject to a Lien securing
the Indebtedness of others and the amount of the Indebtedness secured.

As a result of the subordination provisions described above, in the event of
a liquidation or insolvency, holders of Notes may recover less ratably than
creditors of the Company who are holders of Senior Indebtedness. On a pro forma
basis, after giving effect to the Offerings and the application of the net
proceeds therefrom the principal amount of Senior Indebtedness of the Company
outstanding as of August 24, 1997 would have been approximately $700.2 million.
Except as set forth in the following sentence, the Indenture will not limit the
amount of additional Indebtedness, including Senior Indebtedness, which the
Company can create, incur, assume or guarantee, nor will the Indenture limit the
amount of indebtedness or liabilities which any subsidiary can create, incur,
assume or guarantee. Under the terms of the Indenture, the Company may not incur
any Indebtedness that is expressly by its terms subordinate or

46
<PAGE>
junior in right of payment to any Senior Indebtedness and senior in any respect
in right of payment to the Notes.

In the event that, notwithstanding the foregoing, the Trustee or any holder
of the Notes receives any payment or distribution of assets of the Company of
any kind in contravention of any of the subordination provisions of the
Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Notes before all
Senior Indebtedness is paid in full, then such payment or distribution will be
held by the recipient in trust for the benefit of holders of Senior Indebtedness
or their representatives to the extent necessary to make payment in full of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution, or provision therefor, to or for the holders of Senior
Indebtedness.

The Company is obligated to pay reasonable compensation to the Trustee and
to indemnify the Trustee against certain losses, liabilities or expenses
incurred by it in connection with its duties relating to the Notes. The
Trustee's claims for such payments will generally be senior to those of holders
of the Notes in respect of all funds collected or held by the Trustee.

EVENTS OF DEFAULT; NOTICE AND WAIVER

An Event of Default is defined in the Indenture as being: (i) default in
payment of the principal of or premium, if any, on the Notes, either at maturity
(or upon any redemption), by declaration or otherwise; (ii) default for 30 days
in payment of any installment of interest on the Notes; (iii) default by the
Company for 30 days after notice in the observance or performance of any other
covenants in the Indenture; or (iv) certain events involving bankruptcy,
insolvency or reorganization of the Company. The Indenture provides that the
Trustee may withhold notice to the holders of the Notes of any default (except
in payment of principal of, premium, if any, or interest with respect to the
Notes) if the Trustee considers it in the interest of the holders of the Notes
to do so.

The Indenture provides that if an Event of Default shall have occurred and
be continuing, the Trustee or the holders of not less than 30% (or 25% in the
case of an Event of Default with respect to payment of principal of or interest
on the Notes) in principal amount of the Notes then outstanding may declare the
principal of and accrued interest on the Notes to be due and payable
immediately. In the case of certain events of bankruptcy or insolvency, the
principal of, premium, if any, and interest on the Notes shall automatically
become and be immediately due and payable. However, if the Company shall cure
all defaults (except the nonpayment of principal of, premium, if any, and
interest on any of the Notes which shall have become due by acceleration) and
certain other conditions are met, with certain exceptions, such declaration may
be cancelled and past defaults may be waived by the holders of a majority of the
principal amount of the Notes then outstanding.

The holders of a majority in principal amount of the Notes then outstanding
shall have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee, subject to certain
limitations specified in the Indenture.

MODIFICATION OF THE INDENTURE

The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in principal amount
of the Notes at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the holders of the Notes, except that no
such modification shall (i) extend the fixed maturity of any Note, reduce the
rate or extend the time for payment of interest thereon, reduce the principal
amount thereof or premium, if any, thereon, reduce any amount payable upon
redemption or repurchase thereof, change the obligation of the Company to
repurchase any Note upon the happening of any Change in Control in a manner
adverse to holders of Notes, impair the right of a holder to institute suit for
the payment thereof, change the currency in which the Notes are payable, impair
the right to convert the Notes into Common Stock subject to the terms set forth
in the

47
<PAGE>
Indenture, or modify the provisions of the Indenture with respect to the
subordination of the Notes in a manner adverse to the holders of the Notes in
any material respect, without the consent of each holder of a Note so affected,
or (ii) reduce the aforesaid percentage of Notes whose holders are required to
consent to any such supplemental indenture, without the consent of the holders
of all of the Notes then outstanding. The Indenture also provides for certain
modifications of its terms without the consent of holders of the Notes.

INFORMATION CONCERNING THE TRUSTEE

State Street Bank and Trust Company, as the Trustee under the Indenture, has
been appointed by the Company as paying agent, conversion agent, registrar and
custodian with regard to the Notes. The Indenture provides that, except during
the continuance of an Event of Default, the Trustee thereunder will exercise
such rights and powers vested in it under the Indenture and use the same degree
of care and skill in its exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs.

The Indenture and the provisions of the Trust Indenture Act of 1939, as
amended (the "TIA"), incorporated by reference therein contain certain
limitations on the rights of the Trustee thereunder, should it become a creditor
of the Company, to obtain payment of certain claims in certain cases or to
realize on certain property received by it in respect of any such claims, as
security or otherwise. The Trustee is permitted to engage in other transactions;
provided, however, that if it acquires any conflicting interest (within the
meaning of the TIA) it must eliminate such conflicting interest or resign.

GOVERNING LAW

The Indenture and the Notes provide that they will be governed by the laws
of the State of New York, without regard to the principles of conflicts of law.

TAXATION OF NOTES

See "Certain Federal Income Tax Considerations" for a discussion of certain
federal income tax matters.

NO PERSONAL LIABILITY OF STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES

The Indenture will provide that no stockholder, employee, officer or
director, as such, past, present or future of the Company or any successor
corporation shall have any personal liability in respect of the obligations of
the Company under the Indenture or the Notes by reason of his, her or its status
as such stockholder, employee, officer or director.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

GENERAL

The Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") of the Company authorizes 100,000,000 shares of Common Stock,
par value $0.01 per share, and 50,000,000 shares of preferred stock, par value
$0.01 per share. The Board of Directors of the Company, in its sole discretion,
may issue Common Stock from the authorized and unissued shares of Common Stock.
Subject to limitations imposed by law or the Certificate of Incorporation, the
Board of Directors is empowered to determine the designation of and the number
of shares constituting a series of preferred stock; the dividend rate for the
series; the terms and conditions of any voting, conversion and exchange rights
for the series; the amounts payable on the series upon redemption or the
Company's liquidation, dissolution or winding-up; the provisions of any sinking
fund for the redemption or purchase of shares of any series; and the preferences
and relative rights among the series of preferred stock.

As August 31, 1997, no shares of preferred stock and 33,756,531 shares of
Common Stock were issued and outstanding, and 2,919,055 shares of Common Stock
were issuable upon exercise of outstanding options, 1,687,283 of which are
immediately exercisable.

THE COMMON STOCK

Each share of Common Stock is entitled to one vote at all meetings of
stockholders of the Company for the election of directors and all other matters
submitted to stockholder vote. The Common Stock does not have cumulative voting
rights. Accordingly, the holders of a majority of the outstanding shares of
Common Stock can elect all the directors if they choose to do so. Dividends may
be paid to the holders of Common Stock when, as and if declared by the Board of
Directors of the Company out of funds legally available therefor. The Common
Stock has no preemptive or similar rights. Holders of Common Stock are not
liable to further call or assessment. Upon the liquidation, dissolution or
winding up of the affairs of the Company, any assets remaining after provision
for payment of creditors and holders of preferred stock would be distributed pro
rata among holders of Common Stock.

The Company has not declared or paid any dividends on its Common Stock and
does not anticipate doing so for the foreseeable future. The decision whether to
apply legally available funds to the payment of dividends on the Common Stock
will be made by the Board of Directors of the Company from time to time in the
exercise of its prudent business judgment, taking into account, among other
things, the Company's results of operations and financial condition, any then
existing or proposed commitments for the use by the Company of available funds,
and the Company's obligations with respect to any then outstanding class or
series of its preferred stock. In addition, the Company is prohibited by the
terms of certain of its outstanding debt and financing agreements from paying
cash dividends on its capital stock, and may in the future enter into loan or
other agreements or issue debt securities or preferred stock that restrict the
payment of cash dividends on the Company's capital stock. See "Price Range of
Common Stock and Dividend Policy," "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources"
and "Description of Certain Indebtedness."

The Certificate of Incorporation of the Company provides that except for
liability (i) for any breach of a director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the DGCL or (iv) for any transaction from which the director derived an improper
personal benefit, directors of the Company shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duties
as a director. Such provision does not exonerate the directors from liability
under federal securities laws and has no effect on any non-monetary remedies
that may be available to the Company or its stockholders. The By-Laws of the
Company provide for indemnification of the officers and directors of the Company
to the full extent permitted by applicable law.

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<PAGE>
The Company's By-Laws provide for additional notice requirements for
stockholder nominations and proposals at annual or special meetings of the
Company. At annual meetings, stockholders will be entitled to submit nominations
for directors or other proposals only upon written notice to the Company not
less than 60 days, nor more than 90 days, prior to the annual meeting.

Harris Trust Company of New York is the Registrar and the Transfer Agent for
the Common Stock.

SECTION 203 OF THE DELAWARE LAW

Generally, Section 203 of the DGCL prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless (i) prior to the date
of the business combination, the transaction is approved by the board of
directors of the corporation, (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the outstanding voting stock, or (iii) on or
after such date the business combination is approved by the board and by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested stockholder. A "business combination" includes
mergers, asset sales and other transactions resulting in a financial benefit to
the stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more of
the corporation's voting stock.

50
<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS

The summaries contained herein of certain provisions of the indebtedness and
leases of the Company do not purport to be complete and are qualified in their
entirety by reference to the provisions of the various agreements and indentures
related thereto, which are filed as exhibits to the Registration Statement of
which this Prospectus is a part and to which reference is hereby made.

CREDIT AGREEMENT

The Credit Agreement is provided by a syndicate of banks and other financial
institutions. In June 1997, the Credit Agreement was amended in conjunction with
the securitization transaction described below. After giving effect to this
amendment, certain pay-downs and concurrent commitment reductions, the Credit
Agreement provides up to $920.0 million of loans to the Company in three
components: (i) a revolving portion of up to $250.0 million with a final
maturity date of December 29, 2002; (ii) a term portion of up to $95.0 million
with scheduled quarterly reductions beginning in the second quarter of 1998 and
ending in the fourth quarter of 2002; and (iii) an acquisition term loan
facility of up to $575.0 million with scheduled quarterly reductions beginning
in the second quarter of 1998 through December 29, 2002. A portion of the
revolving loan component is available for letters of credit.

Borrowings under the Credit Agreement bear interest at rates that fluctuate
with the prime rate and the Eurodollar rate.

The loans under the Credit Agreement are guaranteed by each of the Company's
direct and indirect subsidiaries other than the receivables financing subsidiary
and certain immaterial subsidiaries. The Company's obligations with respect to
the Credit Agreement and each guarantor's obligations with respect to the
related guaranty are secured by substantially all of their respective assets,
including, without limitation, inventory, equipment, intercompany debt and, in
the case of the Company's subsidiaries, capital stock, but excluding real
property and improvements thereto and accounts receivable.

The Credit Agreement contains covenants and provisions that restrict, among
other things, the Company's ability to: (i) incur additional indebtedness; (ii)
incur liens on its property; (iii) make investments and advances; (iv) enter
into guarantees and other contingent obligations; (v) merge or consolidate with
or acquire another person or engage in other fundamental changes; (vi) engage in
certain sales of assets; (vii) make capital expenditures; (viii) enter into
leases; (ix) engage in certain transactions with affiliates; and (x) make
restricted junior payments. The Credit Agreement also requires the satisfaction
of certain financial performance criteria (including a consolidated fixed charge
coverage ratio, a leverage ratio and consolidated cash flow available for fixed
charges) and the repayment of loans under the Credit Agreement with proceeds of
certain sales of assets and debt issuances, and with 50% of the Company's
Consolidated Excess Cash Flow (as defined in the Credit Agreement).

The Credit Agreement provides for certain customary events of default,
including a Change of Control (as defined in the Credit Agreement).

RECEIVABLES SECURITIZATION

In conjunction with the amendment to the Credit Agreement on June 30, 1997,
the Company entered into an agreement to sell, on a revolving basis for a period
of up to five years, certain of its accounts receivable to a wholly-owned
subsidiary, which entered into an agreement to transfer, on a revolving basis,
an undivided percentage ownership interest in a designated pool of accounts
receivable to a maximum of $204.0 million. These transactions will be reflected
as a reduction of accounts receivable.

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<PAGE>
THE SENIOR SUBORDINATED NOTES DUE 2003

The Senior Subordinated Notes were issued pursuant to an Indenture between
the Company and First Trust National Association, as Trustee (the "Senior
Subordinated Note Indenture"). The Senior Subordinated Notes are general
unsecured obligations of the Company and are subordinated in right of payment to
all Senior Indebtedness (as defined in the Senior Subordinated Note Indenture).

The aggregate principal amount of the Senior Subordinated Notes is $150.0
million and the Senior Subordinated Notes mature on March 15, 2003. Interest on
the Senior Subordinated Notes accrues at the rate of 9 1/8% per annum.

The Senior Subordinated Notes are not redeemable at the Company's option
before March 15, 1998 (other than in connection with certain public offerings of
Common Stock by the Company, as described below). Thereafter, the Senior
Subordinated Notes are subject to redemption at the option of the Company, at
redemption prices declining ratably from 104.56% of the principal amount for the
twelve months commencing March 15, 1998 to 100.00% on and after March 15, 2002,
plus in each case, accrued and unpaid interest thereon to the applicable
redemption date.

In addition, at any time on or before March 15, 1998, up to 50% of the
aggregate principal amount of the Senior Subordinated Notes may be redeemed at a
redemption price of 108.0% of the principal amount thereof, plus accrued and
unpaid interest, out of the net proceeds of public offerings of primary shares
of Common Stock, provided such redemption occurs within 120 days of such public
offering. The Company does not intend to use any portion of the net proceeds of
the Stock Offerings to redeem Senior Subordinated Notes.

The Senior Subordinated Note Indenture contains certain covenants which
impose certain limitations and restrictions on the ability of the Company to
incur additional indebtedness, pay dividends or make other distributions, make
certain loans and investments, apply the proceeds of asset sales (and use the
proceeds thereof), create liens, enter into certain transactions with
affiliates, merge, consolidate or transfer substantially all its assets and make
investments in unrestricted subsidiaries.

GECC PRESS LEASE

On April 30, 1990, World Color entered into a sale and leaseback arrangement
with General Electric Capital Corporation (the "GECC Lease") relating to certain
of its presses in connection with which World Color received proceeds of
approximately $124.0 million. The leases of the presses under the GECC Lease
terminate on various dates commencing on May 1, 2001 and ending on May 1, 2002,
with certain renewal options of one to five years by World Color. World Color
may also exercise certain repurchase rights with respect to the presses at
various times at fixed or market-based prices. The GECC Lease contains covenants
that, among other things (i) limit the ability of World Color to incur certain
liens, enter into mergers, consolidations, sales of assets and other fundamental
changes, pay dividends and make other similar payments, make certain investments
and enter into certain transactions with affiliates to incur certain liens,
enter into mergers, consolidations, sales of assets and other fundamental
changes and (ii) require the delivery of financial and other information.

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<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Stock Offerings, the Company will have outstanding
37,756,531 shares of Common Stock (assuming no exercise of outstanding options
or conversion of the Notes). Of such shares, 17,738,192 shares of Common Stock
are considered "restricted securities" for the purpose of Rule 144 under the
Securities Act and may only be sold if they are registered under the Securities
Act or if an exemption from registration is available, including an exemption
afforded by Rule 144 under the Securities Act. Upon the expiration of certain
lockup agreements, most of the restricted securities will be eligible for sale
in the public market under Rule 144 or Rule 701 of the Securities Act as
described below.

In general, under Rule 144, as currently in effect, a person (or person
whose shares are aggregated), including an affiliate of the Company, who has
beneficially owned his or her restricted securities for at least one year but
less than two years, is entitled to sell within any three-month period a number
of such shares that does not exceed the greater of (i) 1% of the then
outstanding shares of Common Stock or (ii) the average weekly trading volume in
the Common Stock during the four calendar weeks preceding the date on which
notice of such sale is filed with the Commission. Sales pursuant to Rule 144 are
subject to certain requirements relating to manner of sale, notice, and
availability of current public information about the Company. A person who is
not deemed to have been an affiliate of the Company at any time during the three
months preceding a sale, and who owns shares that have not been held by the
Company or an affiliate of the Company for at least two years, would be entitled
to sell the shares under Rule 144(k) without compliance with the limitations
described above. Restricted securities properly sold in reliance on Rule 144 are
thereafter freely tradeable without restrictions or registration under the
Securities Act unless thereafter held by an affiliate of the Company.

In general, under Rule 701 under the Securities Act, any employee, officer,
or director of or consultant to the Company who purchased his or her shares
pursuant to a written compensatory plan or contract is entitled to rely on the
resale provisions of Rule 701. Such provisions permit nonaffiliates to sell
their Rule 701 shares without having to comply with the public information,
holding period, volume limitation, or notice provisions of Rule 144 and permit
affiliates to sell their Rule 701 shares without having to comply with the Rule
144 holding period restrictions.

Each of the Company and its directors, executive officers and the KKR
Partnerships has agreed that, subject to certain exceptions, without the prior
written consent of Morgan Stanley on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of this Prospectus, offer,
pledge, sell, contract to sell or otherwise transfer, lend or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock. See "Underwriters." In
addition, all shares owned by, and all shares issuable upon exercise of options
held by, the Company's management and former management are subject to lock-up
restrictions for either 120 or 180 days after the date of this Prospectus.

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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following is a general summary of certain federal income tax
consequences expected to result to holders who acquire the Notes pursuant to
this Prospectus from the purchase, ownership and disposition of the Notes (or
Common Stock of the Company acquired upon conversion of a Note). The summary is
based upon current provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), applicable Treasury regulations, judicial authority and
administrative rulings and practice, all of which are subject to change,
possibly with retroactive effect.

The following summary is for general information only. The tax treatment of
a holder of Notes may vary depending upon such holder's particular situation.
Certain holders (including insurance companies, tax-exempt organizations,
financial institutions or broker-dealers, persons holding the Notes as part of a
straddle, hedge or conversion transaction, foreign corporations and persons who
are not citizens or residents of the United States) may be subject to special
rules not discussed below. The following discussion assumes that the holders
hold the Notes as a "capital asset" within the meaning of Section 1221 of the
Code. EACH PURCHASER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO THE PARTICULAR
TAX CONSEQUENCES OF PURCHASING, HOLDING, CONVERTING AND DISPOSING OF THE NOTES
OR COMMON STOCK OF THE COMPANY, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN TAX LAWS.

STATED INTEREST

In general, holders of Notes will be required to include stated interest in
gross income in accordance with their methods of accounting for federal income
tax purposes.

CONVERSION

A holder of a Note should not recognize gain or loss on the conversion of a
Note solely into Common Stock except with respect to cash received in lieu of
fractional shares. To the extent the Notes converted are subject to accrued
market discount, the amount of the accrued market discount will carry over to
the Common Stock on conversion and will be treated as interest income on
disposition of the Common Stock. The holding period of the Common Stock received
upon conversion of a Note will include the period during which the Note was
held, and the holder's aggregate tax basis in such Common Stock will be equal to
his or her tax basis in the Note exchanged therefor (less a portion thereof
allocable to any fractional share). A holder will recognize taxable gain or loss
on cash received in lieu of fractional shares of Common Stock in an amount equal
to the difference between the amount of cash received and the holder's tax basis
in such fractional shares. Such gain or loss should be capital gain or loss. The
recently enacted Taxpayer Relief Act of 1997 (the "1997 Act") made certain
changes to the Code with respect to taxation of capital gains of non-corporate
taxpayers. In general, the maximum tax rate for non-corporate taxpayers on long
term capital gains has been lowered to 20% (10%, for the taxpayers in the 15%
regular tax bracket) from the previous 28% rate for most capital assets
(including the Notes), but only if they have been held for more than 18 months.
Capital gain on assets sold on or after July 29, 1997, having a holding period
of more than one year but not more than 18 months, will be taxed as "mid-term
gain" at a 28% rate.

Adjustments in the conversion price of the Notes (or lack thereof) made
pursuant to the anti-dilution provisions thereof to reflect distributions to
holders of Common Stock may, under certain circumstances, result in constructive
distributions to holders of Notes that could be taxable to them as dividends
(subject to a possible received deduction in the case of corporate holders of
Notes) pursuant to Section 305 of the Code. Generally, a holder's tax basis in
the Notes will be increased by the amount of and such constructive
distributions.

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MARKET DISCOUNT

Purchasers of Notes should be aware that the resale of Notes may be affected
by the market discount provisions of the Code. These rules generally provide
that, subject to a statutorily-defined DE MINIMIS exception, if a holder of a
debt instrument purchases it at a market discount and thereafter recognizes gain
on a disposition of the debt instrument (including a gift), the lesser of such
gain (or appreciation, in the case of a gift) or the portion of the market
discount that accrued while the debt instrument was held by such holder will be
treated as ordinary interest income at the time of the disposition. For this
purpose, a purchase at a market discount includes a purchase at or after the
original issue at a price below the stated redemption price at maturity. The
market discount rules also provide that a holder who acquires a debt instrument
at a market discount (and who does not elect to include such market discount in
income on a current basis) may be required to defer a portion of any interest
expense that may otherwise be deductible on any indebtedness incurred or
maintained to purchase or carry such debt instrument until the holder disposes
of the debt instrument in a taxable transaction.

SALE OR DISPOSITION

In general, a holder of a Note will recognize gain or loss upon the sale,
exchange, redemption or other taxable disposition of the Note measured by the
difference between (i) the amount of cash and the fair market value of other
property received (except to the extent that such cash or other property is
attributable to the payment of accrued and unpaid interest not previously
included in income, which amount will be taxable as ordinary income) and (ii)
the holder's adjusted tax basis in the Note. Each holder of Common Stock into
which the Notes are converted, in general, will recognize gain or loss upon the
sale, exchange, redemption or other taxable disposition of the Common Stock
measured under rules similar to those described in the preceding sentence for
the Notes. Such gain or loss recognized with respect to the Notes or the Common
Stock will be capital gain or loss. The 1997 Act reduced the maximum tax rate
applicable to capital gains for non-corporate taxpayers who have held the Notes
or Common Stock for more than 18 months at the time of disposition. See
discussion above under "--Conversion."

BACKUP WITHHOLDING

A holder of Notes may be subject to backup withholding at the rate of 31%
with respect to interest or dividends paid on, and gross proceeds of, a sale of
the Notes or the Common Stock, unless such holder (i) is a corporation or comes
within certain other exempt categories and, when required, demonstrates this
fact, or (ii) provides a correct taxpayer identification number, certifies as to
no loss of exemption from backup withholding and otherwise complies with
applicable requirements of the backup withholding rules. A holder of Notes or
Common Stock who does not provide the Company with his or her correct taxpayer
identification number may be subject to penalties imposed by the Internal
Revenue Service (the "IRS").

The Company will report to the holders of the Notes and the IRS the amount
of any "reportable payments" (including stated interest on the Notes and
dividends on the Common Stock) and any amount withheld with respect to the Notes
or the Common Stock during the calendar year.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If backup withholding results in an overpayment of taxes, a refund may
be obtained, provided that the required information is furnished to the IRS.

THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS FOR
GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH PURCHASER OF
NOTES SHOULD CONSULT HIS OR HER TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES
TO HIM OR HER OF THE ACQUISITION, OWNERSHIP, CONVERSION AND DISPOSITION OF THE
NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS.

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UNDERWRITERS

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof (the "Notes Underwriting Agreement"), the
Underwriters named below for whom Morgan Stanley & Co. Incorporated, Goldman,
Sachs & Co., Bear, Stearns & Co. Inc., BT Alex. Brown Incorporated and Credit
Suisse First Boston Corporation are acting as Representatives have severally
agreed to purchase, and the Company has agreed to sell to them, severally, the
respective aggregate principal amount of Notes set forth opposite the names of
such Underwriters below:

<TABLE>
<CAPTION>
PRINCIPAL
NAME AMOUNT
- -------------------------------------------------------------------------------------------------- --------------
<S> <C>
Morgan Stanley & Co. Incorporated............................................................. $ 59,400,000
Goldman, Sachs & Co. ......................................................................... 33,000,000
Bear, Stearns & Co. Inc....................................................................... 13,200,000
BT Alex. Brown Incorporated................................................................... 13,200,000
Credit Suisse First Boston Corporation........................................................ 13,200,000
--------------
Total....................................................................................... $ 132,000,000
--------------
--------------
</TABLE>

The Notes Underwriting Agreement provides that the obligations of the
several Underwriters to pay for and accept delivery of the Notes offered hereby
are subject to the approval of certain legal matters by their counsel and to
certain other conditions. The Underwriters are obligated to take and pay for all
of the Notes offered hereby (other than those covered by the Underwriters'
over-allotment described below) if any such Notes are taken.

The Underwriters initially propose to offer part of the Notes directly to
the public at the public offering price set forth on the cover page hereof and
part to certain dealers at a price which represents a concession not in excess
of 1.35% of the principal amount of the Notes. After the initial offering of the
Notes, the public offering price and other selling terms may be changed.

The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase up to an aggregate of $19.8
million additional principal amount of Notes at the price to public set forth on
the cover page hereof, less underwriting discounts and commissions. The
Underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, made in connection with the offering of the Notes
offered hereby. To the extent such option is exercised, each Underwriter will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional Notes as the number set forth next to such
Underwriter's name in the preceding table bears to the total principal amount of
Notes set forth next to the names of all Underwriters in the preceding table.

Each of the Company and its directors, and executive officers and the KKR
Partnerships has agreed that, without the prior written consent of Morgan
Stanley & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 90 days after the date of this Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer, lend or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock whether any such transaction described in clause
(i) or (ii) above is settled by delivery of Common Stock, or such other
securities, in cash or otherwise. The restrictions described in this paragraph
do not apply to (x) the sale of shares of Common Stock to the Underwriters in
the Stock Offerings, (y) the issuance by the Company of shares of Common Stock
upon the exercise of an option or a warrant or the conversion of a security
outstanding on the date of this Prospectus of which the Underwriters have been
advised in writing or (z) transactions by any person other than the Company
relating to shares of Common Stock or other securities acquired in open market

56
<PAGE>
transactions after the completion of the Stock Offerings. The restriction on the
Company is subject to exceptions for the issuance of Common Stock pursuant to
existing director and employee benefit plans and as payment for acquisitions by
the Company. The restriction on the directors, executive officers and the
certain stockholders is subject to exceptions for charitable contributions and
estate planning so long as the recipient or donee is subject to a similar
restricted transfer period.

In order to facilitate the offering of the Notes, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Notes. Specifically, the Underwriters may over-allot in connection with the
offering, creating a short position in the Notes for their own account. In
addition, to cover over-allotments or to stabilize the price of the Notes, the
Underwriters may bid for, and purchase, Notes in the open market. Finally, the
underwriting syndicate may reclaim selling concessions allowed to an Underwriter
or a dealer for distributing the Notes in the Notes Offering, if the syndicate
repurchases previously distributed Notes in transactions to cover syndicate
short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the Notes above
independent market levels. The Underwriters are not required to engage in these
activities, and may end any of these activities at any time.

The Company and the Underwriters have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act.

From time to time, Morgan Stanley and BT Alex. Brown have provided
investment banking services to the Company for which, in each case, they
received normal and customary fees. In addition, Bankers Trust Company ("BTC")
is the Administrative Agent under, and Morgan Stanley, Goldman Sachs Credit
Partners L.P., BTC and Credit Suisse First Boston are lenders under, the Credit
Agreement. Affiliates of Morgan Stanley, BT Alex. Brown and Credit Suisse First
Boston Corporation are limited partners in certain KKR-controlled partnerships
which have ownership interests in the Company.

In connection with the repayment of certain indebtedness incurred under the
Company's Credit Agreement with the net proceeds of the Offerings, BTC, Morgan
Stanley and Goldman Sachs Credit Partners L.P. will, together in the aggregate,
receive more than 10% of the net proceeds of the Notes Offering. Because over
10% of the net proceeds of the Notes Offering is intended to be paid to
associated or affiliated persons of members of the National Association of
Securities Dealers, Inc. ("NASD") participating in the distribution of the Notes
Offering, the underwriting arrangements for the Notes Offering will comply with
the requirements of Rule 2710(c)(8) of the Conduct Rules of the NASD. Those
requirements provide that, in such circumstances, the price of the securities
must be determined by a "qualified independent underwriter." Accordingly, Bear,
Stearns & Co. Inc. shall act as qualified independent underwriter (the
"Independent Underwriter") for purposes of determining the yield at which the
Notes are to be offered in the Notes Offering and shall conduct due diligence in
connection with its responsibilities as a qualified independent underwriter. The
yield at which the Notes will be sold to the public in the Notes Offering will
be no lower than the yield recommended by the Independent Underwriter.

LEGAL MATTERS

The legality of the Notes will be passed upon for the Company by Latham &
Watkins, New York, New York. Certain legal matters relating to the Notes
Offering will be passed upon for the Underwriters by Skadden, Arps, Slate,
Meagher & Flom LLP, New York, New York. Certain partners of Latham & Watkins,
members of their families, related persons and others have an indirect interest,
through limited partnerships, in less than 1% of the Common Stock of the
Company. Such persons do not have the power to vote or dispose of such shares of
Common Stock. In addition, Latham & Watkins has in the past provided, and may
continue to provide, legal services to KKR and its affiliates.

57
<PAGE>
EXPERTS

The consolidated financial statements as of December 31, 1995 and December
29, 1996 and for each of the three years in the period ended December 29, 1996
included in this Prospectus and the related financial statement schedule
incorporated by reference from the Company's Annual Report on Form 10-K for the
year ended December 29, 1996 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports appearing herein and
incorporated herein by reference and have been so included and incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.

58
<PAGE>
WORLD COLOR PRESS, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

(DOLLARS IN THOUSANDS)

On June 6, 1996, the Company acquired from Ringier A.G. all of the issued
and outstanding capital stock of Krueger Acquisition Corporation, including all
of the issued and outstanding capital stock of Ringier Holdings, Inc., Ringier
America, Inc., Krueger Ringier, Inc., Ringier Print U.S., Inc. and W.A. Krueger
Co. Olathe (collectively, "Ringier America"), for approximately $128,000 (the
"Acquisition"). In addition, the Company assumed approximately $287,000 of
Ringier America's indebtedness, of which approximately $281,000 was liquidated
upon consummation of the Acquisition. See Note 2 of the notes to the Company's
consolidated financial statements for the years ended December 25, 1994,
December 31, 1995 and December 29, 1996. The Acquisition was accounted for as a
purchase, and accordingly the historical statement of operations of World Color
includes the results of Ringier America from the date of the Acquisition.

The accompanying unaudited pro forma combined condensed statement of
operations combines the historical consolidated operations of World Color with
Ringier America for the year ended December 29, 1996 as if the Acquisition and
liquidation of certain indebtedness of Ringier America had occurred at the
beginning of the period presented and includes the adjustments described in the
notes hereto. Certain reclassifications have been made to the historical
statement of operations of Ringier America to conform to the presentation of
World Color.

The unaudited pro forma combined condensed statement of operations should be
read in conjunction with World Color's historical consolidated financial
statements and the notes thereto included elsewhere in this Prospectus. The
unaudited pro forma combined condensed statement of operations does not reflect
identified cost savings and other synergies that resulted from the combination
of the two businesses, and is not necessarily indicative of the results that
would have occurred had the Acquisition been consummated in accordance with the
assumptions set forth in the notes hereto, or of World Color's and Ringier
America's individual or combined future results.

P-1
<PAGE>
WORLD COLOR PRESS, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
WORLD COLOR
PRESS, INC. RINGIER PRO FORMA PRO FORMA
(HISTORICAL) AMERICA(A) ADJUSTMENTS COMBINED
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
NET SALES......................... $ 1,641,412 $183,463 $-- $1,824,875
COST OF SALES..................... 1,349,130 169,105 (2,100)(b) 1,516,135
----------- ---------- ----------- ----------
GROSS PROFIT...................... 292,282 14,358 2,100 308,740
----------- ---------- ----------- ----------
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES......... 153,071 15,961 232(c) 169,264
----------- ---------- ----------- ----------

OPERATING INCOME (LOSS)........... 139,211 (1,603) 1,868 139,476
INTEREST EXPENSE.................. 58,417 9,481 2,730(d) 70,628
----------- ---------- ----------- ----------

INCOME (LOSS) BEFORE INCOME
TAXES........................... 80,794 (11,084) (862) 68,848
INCOME TAX PROVISION (BENEFIT).... 33,533 (3,993) (252)(e) 29,288
----------- ---------- ----------- ----------
NET INCOME (LOSS)................. $ 47,261 $ (7,091) $ (610) $ 39,560
----------- ---------- ----------- ----------
----------- ---------- ----------- ----------

Pro forma net income per common
and common equivalent share..... $ 1.35 $ 1.13

Pro forma weighted average common
and common equivalent shares
outstanding..................... 35,002,923 35,002,923
</TABLE>

See notes to unaudited pro forma combined condensed statement of operations.

P-2
<PAGE>
WORLD COLOR PRESS, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

(IN THOUSANDS)

The following adjustments are necessary to reflect the Acquisition and
repayment of indebtedness described on page P-1 as if they were consummated at
the beginning of the fiscal year ended December 29, 1996:

(a) Represents Ringier America's historical results for the five months
ended May 31, 1996.

(b) Represents the effect of certain adjustments, primarily
depreciation, resulting from the allocation of purchase price to the fair
value of assets acquired.

(c) Represents the amortization of excess cost over estimated fair value
of net assets acquired, over a period of 35 years, for the five months ended
May 1996, substantially offset by the elimination of Ringier America's
historical goodwill amortization.

(d) Represents the net effect of interest expense on borrowings by World
Color to fund, at an effective rate of 7.1%, the Acquisition and liquidation
of Ringier America's indebtedness, along with the reduction of Ringier
America's interest expense for liquidated indebtedness.

(e) Represents the tax effect of the pro forma adjustments to cost of
sales and interest expense, at an estimated marginal rate of 40%.

P-3
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
PAGE
---------
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 29, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND JUNE 29, 1997 (UNAUDITED)
Condensed Consolidated Balance Sheet (Unaudited) as of June 29, 1997..................................... F-2
Condensed Consolidated Statements of Operations (Unaudited) for the Six Months Ended June 30, 1996 and
June 29, 1997.......................................................................................... F-3
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 1996 and
June 29, 1997.......................................................................................... F-4
Notes to Condensed Consolidated Financial Statements (Unaudited)......................................... F-5

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29,
1996
Independent Auditors' Report............................................................................. F-7
Consolidated Balance Sheets as of December 31, 1995 and December 29, 1996................................ F-8
Consolidated Statements of Operations for the Years Ended December 25, 1994, December 31, 1995 and
December 29, 1996...................................................................................... F-9
Consolidated Statements of Stockholders' Equity for the Years Ended December 25, 1994, December 31, 1995
and December 29, 1996.................................................................................. F-10
Consolidated Statements of Cash Flows for the Years Ended December 25, 1994, December 31, 1995 and
December 29, 1996...................................................................................... F-11
Notes to Consolidated Financial Statements............................................................... F-12
</TABLE>

F-1
<PAGE>
WORLD COLOR PRESS, INC.

CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
JUNE 29,
1997
------------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents......................................................................... $ 22,383
Accounts receivable--net.......................................................................... 325,543
Inventories....................................................................................... 158,036
Deferred income taxes............................................................................. 26,560
Other............................................................................................. 30,298
------------
Total current assets.......................................................................... 562,820
------------
Property, plant and equipment, at cost............................................................ 1,458,724
Accumulated depreciation and amortization......................................................... (585,469)
------------
Property, plant and equipment--net.............................................................. 873,255
Goodwill--net..................................................................................... 519,030
Other............................................................................................. 49,100
------------
Total Assets........................................................................................ $ 2,004,205
------------
------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses............................................................. $ 280,390
Current maturities of long-term debt.............................................................. 43,629
------------
Total current liabilities..................................................................... 324,019
------------
Long-term debt.................................................................................... 1,049,053
Deferred income taxes............................................................................. 88,658
Other long-term liabilities....................................................................... 114,060
------------
Total liabilities............................................................................. 1,575,790
------------
Stockholders' Equity
Common stock, $.01 par value--shares authorized, 100,000,000 at June 29, 1997; shares outstanding,
33,744,531 at June 29, 1997..................................................................... 337
Additional paid-in capital........................................................................ 583,721
Accumulated deficit............................................................................... (155,643)
------------
Total stockholders' equity.................................................................... 428,415
------------
Total Liabilities and Stockholders' Equity.......................................................... $ 2,004,205
------------
------------
</TABLE>

See notes to condensed consolidated financial statements.

F-2
<PAGE>
WORLD COLOR PRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTH PERIODS ENDED
----------------------------
<S> <C> <C>
JUNE 30, JUNE 29,
1996 1997
------------- -------------
Net sales.......................................................................... $ 671,377 $ 883,998
Cost of sales...................................................................... 561,149 732,631
------------- -------------
Gross profit..................................................................... 110,228 151,367
Selling, general and administrative expenses....................................... 67,928 87,852
------------- -------------
Operating income................................................................. 42,300 63,515
Interest expense................................................................... 22,308 40,268
------------- -------------
Income before income taxes......................................................... 19,992 23,247
Income tax provision............................................................... 7,997 9,764
------------- -------------
Net income......................................................................... $ 11,995 $ 13,483
------------- -------------
------------- -------------
Net income per common and common equivalent share.................................. $ 0.34 $ 0.39

Weighted average common and common equivalent shares outstanding................... 34,964,688 34,516,134
</TABLE>

See notes to condensed consolidated financial statements.

F-3
<PAGE>
WORLD COLOR PRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTH PERIODS ENDED
----------------------------
<S> <C> <C>
JUNE 30, 1996 JUNE 29, 1997
------------- -------------

<CAPTION>
<S> <C> <C>
Operating activities:
Net income........................................................................ $ 11,995 $ 13,483
Adjustments to reconcile net income to net cash flows provided by operating
activities:
Depreciation and amortization................................................... 43,915 66,372
Deferred income tax provision................................................... 3,494 3,487
Changes in operating assets and liabilities:
Accounts receivable--net...................................................... 19,466 20,449
Inventories................................................................... 15,603 (10,819)
Accounts payable and accrued expenses......................................... (16,633) (48,230)
Other assets and liabilities--net............................................. (27,041) (39,736)
------------- -------------
Net cash provided by operating activities........................................... 50,799 5,006
------------- -------------
Investing activities:
Additions to property, plant and equipment--net................................... (28,844) (55,645)
Acquisitions of businesses, net of cash acquired.................................. (153,498) (154,975)
------------- -------------
Net cash used in investing activities............................................... (182,342) (210,620)
------------- -------------
Financing activities:
Net borrowings on debt............................................................ 126,176 194,815
Proceeds from issuance of common stock............................................ 8,940 --
------------- -------------
Net cash provided by financing activities........................................... 135,116 194,815
------------- -------------
Increase (decrease) in cash and cash equivalents.................................... 3,573 (10,799)
Cash and cash equivalents, beginning of period...................................... 8,902 33,182
------------- -------------
Cash and cash equivalents, end of period............................................ $ 12,475 $ 22,383
------------- -------------
------------- -------------
</TABLE>

See notes to condensed consolidated financial statements.

F-4
<PAGE>
WORLD COLOR PRESS, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in thousands, except per share data)

1. BASIS OF PRESENTATION

The accompanying condensed consolidated interim financial statements have
been prepared by World Color Press, Inc. (along with its subsidiaries, the
"Company") pursuant to the rules and regulations of the Securities and Exchange
Commission and reflect only normal and recurring adjustments, which are, in the
opinion of the Company, considered necessary for a fair presentation. As
permitted by these regulations, these statements do not include all information
required by generally accepted accounting principles to be included in an annual
set of financial statements, however, the Company believes that the disclosures
made are adequate to make the information presented not misleading. It is
suggested that these condensed consolidated financial statements be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's latest Annual Report on Form 10-K.

During the six-month period ended June 29, 1997, the Company acquired a
business whose contribution was not significant to the Company's results of
operations for the periods presented, nor is it expected to have a material
effect on the Company's results on a continuing basis.

Certain reclassifications have been made to prior period amounts to conform
with the current presentation.

2. IMPLEMENTATION OF NEW ACCOUNTING STANDARD

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, EARNINGS PER SHARE, which
establishes new standards for computing and presenting net income per share. The
statement is effective for periods ending after December 15, 1997. Accordingly,
the Company will adopt SFAS No. 128 in the fourth quarter of 1997. If SFAS No.
128 had been implemented for the six months ended June 30, 1996 and June 29,
1997, pro forma basic and diluted net income per share amounts, as defined in
the statement, would not have been materially different from net income per
common and common equivalent share shown in the accompanying condensed
consolidated statements of operations.

3. INVENTORIES

Inventories are summarized as follows:

<TABLE>
<CAPTION>
JUNE 29,
1997
----------
<S> <C>
Work-in-process................................................................... $ 81,405
Raw materials..................................................................... 76,631
----------
Total......................................................................... $ 158,036
----------
----------
</TABLE>

4. AMENDMENT TO CREDIT FACILITY

In June 1997, the Company's Second Amended and Restated Credit Agreement
dated as of June 6, 1996, (as amended, the "Credit Agreement") was amended in
conjunction with the securitization transaction described in Note 5. The effect
of this amendment was to provide for an additional $100,000 in commitments upon
the liquidation of indebtedness from the proceeds of the securitization
transaction, after which the aggregate total commitments of the Credit Agreement
were $920,000. These commitments were comprised of $95,000 in term loan
commitments, $250,000 of revolving loan commitments and

F-5
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

4. AMENDMENT TO CREDIT FACILITY (CONTINUED)
$575,000 in acquisition term loan commitments. All other significant financial
provisions of the Credit Agreement remained substantially unchanged.

5. SUBSEQUENT EVENT

In conjunction with the amended Credit Agreement described in Note 4, on
June 30, 1997, the Company entered into an agreement to sell, on a revolving
basis for a period of up to five years, certain of its accounts receivable to a
wholly-owned subsidiary, which entered into an agreement to transfer, on a
revolving basis, an undivided percentage ownership interest in a designated pool
of accounts receivable to a maximum of $204,000. These transactions will be
reflected as a reduction of accounts receivable.

F-6
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
WORLD COLOR PRESS, INC.:

We have audited the accompanying consolidated balance sheets of World Color
Press, Inc. and subsidiaries as of December 31, 1995 and December 29, 1996 and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 29, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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, such consolidated financial statements present fairly, in
all material respects, the financial position of World Color Press, Inc. and
subsidiaries at December 31, 1995 and December 29, 1996, and the results of
their operations and their cash flows for each of the three years in the period
ended December 29, 1996 in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP
New York, New York
February 5, 1997

F-7
<PAGE>
WORLD COLOR PRESS, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents........................................................... $ 8,902 $ 33,182
Accounts receivable--net of allowances for doubtful accounts of $6,356 and $8,476,
respectively...................................................................... 218,022 311,478
Inventories......................................................................... 130,369 140,160
Deferred income taxes............................................................... 28,364 32,944
Other............................................................................... 11,060 24,843
------------ ------------
Total current assets............................................................ 396,717 542,607
Property, plant and equipment--net.................................................. 480,421 818,157
Goodwill--net....................................................................... 249,473 423,880
Other............................................................................... 24,117 37,788
------------ ------------
Total Assets.......................................................................... $ 1,150,728 $ 1,822,432
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable.................................................................... $ 108,894 $ 172,013
Accrued expenses.................................................................... 89,628 134,854
Current maturities of long-term debt................................................ 37,360 8,672
------------ ------------
Total current liabilities....................................................... 235,882 315,539
Long-term debt...................................................................... 449,746 889,195
Deferred income taxes............................................................... 9,258 91,555
Other long-term liabilities......................................................... 97,076 111,211
------------ ------------
Total liabilities............................................................... 791,962 1,407,500
------------ ------------
Stockholders' Equity:
Common stock, $.01 par value--authorized, 100,000,000 shares in 1995 and 1996;
shares outstanding, 32,218,427 shares in 1995 and 33,744,531 in 1996.............. 322 337
Additional paid-in capital.......................................................... 574,831 583,721
Accumulated deficit................................................................. (216,387) (169,126)
------------ ------------
Total stockholders' equity...................................................... 358,766 414,932
------------ ------------
Total Liabilities and Stockholders' Equity............................................ $ 1,150,728 $ 1,822,432
------------ ------------
------------ ------------
</TABLE>

See notes to consolidated financial statements.

F-8
<PAGE>
WORLD COLOR PRESS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
Net sales............................................................... $ 971,627 $ 1,295,582 $ 1,641,412
Cost of sales........................................................... 817,934 1,074,785 1,349,130
------------ ------------ ------------
Gross profit........................................................ 153,693 220,797 292,282
------------ ------------ ------------
Other operating expenses:
Selling, general and administrative................................... 90,312 125,539 153,071
Streamlining charge................................................... -- 40,900 --
------------ ------------ ------------
Total other operating expenses...................................... 90,312 166,439 153,071
------------ ------------ ------------
Operating income........................................................ 63,381 54,358 139,211
Interest expense........................................................ 23,825 37,897 58,417
------------ ------------ ------------
Income before income taxes.............................................. 39,556 16,461 80,794
Income tax provision.................................................... 15,822 6,584 33,533
------------ ------------ ------------
Net income.............................................................. $ 23,734 $ 9,877 $ 47,261
------------ ------------ ------------
------------ ------------ ------------
Net income per common and common equivalent share....................... $0.69 $0.29 $1.35
Weighted average common and common equivalent shares outstanding........ 34,408,670 34,440,867 35,002,923
</TABLE>

See notes to consolidated financial statements

F-9
<PAGE>
WORLD COLOR PRESS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996

(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED
STOCK CAPITAL DEFICIT
----------- ---------- ------------
<S> <C> <C> <C>
Balance at December 26, 1993................................................. $ 257 $ 497,311 $ (249,998)
Net income................................................................. -- -- 23,734
Capital contribution from PHLP............................................. -- 2,809 --
----- ---------- ------------
Balance at December 25, 1994................................................. 257 500,120 (226,264)
Net income................................................................. -- -- 9,877
Common stock issued........................................................ 65 74,711 --
----- ---------- ------------
Balance at December 31, 1995................................................. 322 574,831 (216,387)
Net income................................................................. -- -- 47,261
Common stock issued........................................................ 15 8,890 --
----- ---------- ------------
Balance at December 29, 1996................................................. $ 337 $ 583,721 $ (169,126)
----- ---------- ------------
----- ---------- ------------
</TABLE>

See notes to consolidated financial statements.

F-10
<PAGE>
WORLD COLOR PRESS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996

(IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1995 1996
----------- ----------- ----------
<S> <C> <C> <C>
Operating activities:
Net income............................................................... $ 23,734 $ 9,877 $ 47,261
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization.......................................... 62,898 74,668 104,493
Streamlining charge.................................................... -- 40,900 --
Deferred income tax provision (benefit)................................ 12,271 (766) 13,573
Changes in operating assets and liabilities:
Accounts receivable -- net........................................... 6,001 (31,097) (30,062)
Inventories.......................................................... (6,004) (51,083) 29,495
Accounts payable and accrued expenses................................ 10,396 (7,650) 35,178
Other assets and liabilities -- net.................................. (9,172) (28,105) (53,355)
----------- ----------- ----------
Net cash provided by operating activities.................................. 100,124 6,744 146,583
----------- ----------- ----------
Investing activities:
Additions to property, plant and equipment............................... (83,875) (120,339) (70,639)
Proceeds from sale of property, plant and equipment...................... 7,763 7,959 1,345
Acquisitions of businesses, net of cash acquired......................... (10,283) (108,738) (167,283)
----------- ----------- ----------
Net cash used in investing activities...................................... (86,395) (221,118) (236,577)
----------- ----------- ----------
Financing activities:
Proceeds from borrowings................................................. 18,750 214,037 562,120
Payments on long-term debt............................................... (48,353) (90,365) (456,751)
Decrease in note payable to PHLP......................................... (2,159) -- --
Proceeds from capital contribution....................................... 2,809 -- --
Proceeds from issuance of common stock................................... -- 74,776 8,905
Proceeds from sale and leaseback transaction............................. 27,988 -- --
----------- ----------- ----------
Net cash provided by (used in) financing activities........................ (965) 198,448 114,274
----------- ----------- ----------
Increase (decrease) in cash and cash equivalents........................... 12,764 (15,926) 24,280
Cash and cash equivalents, beginning of year............................... 12,064 24,828 8,902
----------- ----------- ----------
Cash and cash equivalents, end of year..................................... $ 24,828 $ 8,902 $ 33,182
----------- ----------- ----------
----------- ----------- ----------
</TABLE>

See notes to consolidated financial statements.

F-11
<PAGE>
WORLD COLOR PRESS, INC.
Notes to Consolidated Financial Statements
Years Ended December 25, 1994, December 31, 1995 and December 29, 1996
(Dollars in thousands, except per share data)

1. ORGANIZATION

World Color Press, Inc. and subsidiaries (the "Company") specializes in the
production and distribution of data for the magazine, catalog, commercial,
direct mail, directory, and book markets.

Prior to November 20, 1995, the Company was wholly-owned by Printing
Holdings, L.P. ("PHLP"), a nonoperating affiliate of Kohlberg Kravis Roberts &
Co. L.P. ("KKR"), whose holdings consisted solely of the Company. On November
20, 1995, PHLP was merged with and into the Company, with the Company as the
survivor (the "Merger"). In connection with the Merger, PHLP partnership units
(aggregating approximately 65,500,000 units) were converted into approximately
32,200,000 shares of the Company's common stock, principally at a ratio of one
PHLP partnership unit to 0.50 shares of common stock. Accordingly, the share
information and the related common stock and additional paid-in capital amounts
presented on the face of the consolidated balance sheets and on the consolidated
statements of stockholders' equity have been restated to reflect the change in
the Company's capital structure pursuant to the Merger. Also pursuant to the
Merger, the shares of the Company's common stock owned by PHLP immediately prior
to the Merger were canceled. On November 20, 1995, the Company also amended and
restated its Certificate of Incorporation increasing the authorized number of
shares of common stock to 100,000,000 shares and newly authorizing 50,000,000
shares of preferred stock, par value $0.01 per share. At December 31, 1995 and
December 29, 1996, there were no shares of preferred stock issued or
outstanding.

On January 25, 1996, 15,861,568 shares of the Company's common stock were
sold at $19 per share in an initial public equity offering (the "Offering"). All
of the shares in the Offering were sold by existing stockholders. The Company
did not receive any of the proceeds from the sale of the shares, except that
certain members of former management elected to participate in the Offering by
exercising certain stock options granted to them by the Company. An aggregate of
1,531,290 shares underlying such options were sold in the Offering, generating
proceeds to the Company of approximately $8,900. These proceeds were used to pay
expenses of the Offering and for general corporate purposes.

2. BUSINESS ACQUISITIONS

In June 1996, the Company acquired from Ringier A.G. all of the issued and
outstanding capital stock of Krueger Acquisition Corporation, including all of
the issued and outstanding capital stock of Ringier Holdings, Inc., Ringier
America, Inc., Krueger Ringier, Inc., Ringier Print U.S., Inc. and W.A. Krueger
Co. Olathe (collectively, "Ringier America"), for approximately $128,000 (the
"Acquisition"). In addition, the Company assumed approximately $287,000 of
Ringier America's indebtedness, of which approximately $281,000 was liquidated
upon consummation of the Acquisition. Ringier America is a leading diversified
commercial printer whose business includes the printing of catalogs, magazines
and mass-market, racksize books. The Acquisition and liquidation of certain
indebtedness were funded using proceeds from acquisition term loans under the
Second Amended and Restated Credit Agreement dated as of June 6, 1996, as
amended (the "Credit Agreement"), among the Company and the lenders and agents
party thereto.

The Acquisition is being accounted for as a purchase and the financial
statements include the results of Ringier America's operations from the
acquisition date. The excess of purchase cost over estimated fair value of net
assets acquired was approximately $160,000, and is being amortized using the
straight-line method over 35 years. The Company is in the process of finalizing
the assignment of fair value to assets

F-12
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

2. BUSINESS ACQUISITIONS (CONTINUED)
acquired and liabilities assumed. Accordingly, the final asset and liability
fair values may differ from those included in the accompanying consolidated
balance sheet; however, the final fair values are not expected to be materially
different from those presented herein.

The following unaudited pro forma financial information gives effect to the
Acquisition and liquidation of certain indebtedness of Ringier America as if
these transactions had occurred at the beginning of the periods presented. These
pro forma results reflect certain adjustments, including the increase in
amortization for the excess of purchase cost over estimated fair value of net
assets acquired and the net increase in interest on indebtedness used to fund
the transactions, as well as the impact on depreciation and certain other
expenses, based on a preliminary allocation of purchase price to the fair value
of assets acquired and liabilities assumed. These pro forma results do not
reflect identified cost savings and other synergies that will result or have
resulted from the combination of the two businesses, and are not necessarily
indicative of the results that would have occurred had the Acquisition been
consummated at the beginning of the periods presented, nor are they necessarily
indicative of future results.

<TABLE>
<CAPTION>
UNAUDITED 1995 1996
- -------------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Net sales............................................................................. $ 1,810,391 $ 1,824,875
Net income............................................................................ $ 30,807 $ 39,560
Net income per common and common equivalent share..................................... $ 0.89 $ 1.13
</TABLE>

Pro forma net income and net income per common and common equivalent share
for the year ended December 31, 1995 presented above include $31,481 ($19,373
net of tax, or $0.56 per share) of income recorded by Ringier America in
January, 1995 related to the final settlement of a customer's future obligations
under a printing services contract.

In March 1995, the Company acquired three companies that operate in the
commercial, digital and direct mail market sectors (the "1995 Acquisitions") for
an aggregate purchase price of approximately $108,000. In addition, the Company
liquidated approximately $44,500 of the acquired companies' indebtedness. The
1995 Acquisitions and liquidation of indebtedness were funded using proceeds
from the Company's credit facility. The 1995 Acquisitions were accounted for as
purchases and the financial statements include the results of their operations
from the respective acquisition dates. The excess of purchase cost over
estimated fair value of net assets acquired was approximately $81,700, which is
being amortized over 35 years.

During the years ended December 31, 1995 and December 29, 1996, the Company
acquired certain other businesses whose contributions were not significant to
the Company's results of operations for the periods presented, nor are they
expected to have a material effect on the Company's results on a continuing
basis.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include
the accounts of World Color Press, Inc. and its subsidiaries. Intercompany
transactions have been eliminated.

CASH AND CASH EQUIVALENTS--Cash equivalents consist of highly liquid
instruments with original maturities of three months or less.

F-13
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCOUNTING PERIOD--The Company's fiscal year is the 52 or 53-week period
ending on the last Sunday in December. Fiscal years 1994 and 1996 each included
52 weeks. Fiscal year 1995 included 53 weeks.

CONSOLIDATED STATEMENTS OF CASH FLOWS--During 1994, 1995 and 1996, the
Company borrowed and repaid $103,225, $318,700 and $407,200, respectively,
pursuant to the terms of credit agreements. See also Note 7. Such amounts have
not been reflected in the consolidated statements of cash flows because of the
short-term nature of the borrowings.

Cash paid for interest by the Company during the years 1994, 1995 and 1996
was $21,928, $37,193 and $54,037, respectively, net of capitalized interest of
$1,276, $1,810 and $252. Cash paid for taxes during the years 1994, 1995 and
1996 was $3,319, $8,305 and $18,068, respectively.

REVENUE RECOGNITION--In accordance with trade practice, sales are recognized
by the Company on the basis of production and service activity at the pro rata
billing value of work completed.

INVENTORIES--The Company's raw materials of paper and ink and the related
raw material component of work-in-process are valued at the lower of cost, as
determined using the first-in, first-out ("FIFO") method, or market. The
remainder of the work-in-process is valued at the pro rata billing value of work
completed.

DEPRECIATION AND AMORTIZATION--Property, plant and equipment is stated at
cost. Depreciation is recorded principally on the straight-line method over the
estimated useful lives of the assets. Leasehold improvements are amortized on
the straight-line method over the lesser of the useful life of the improvement
or the lease term. Estimated useful lives used in computing depreciation and
amortization expense are 3 to 15 years for machinery and equipment and 15 to 40
years for buildings and leasehold improvements.

GOODWILL--Goodwill is amortized using the straight-line method primarily
over 35 years. Amortization of goodwill for the years 1994, 1995 and 1996 was
$5,402, $7,275 and $10,757, respectively, and is included in selling, general
and administrative expenses. Accumulated amortization of goodwill was $24,047
and $34,804 as of year-end 1995 and 1996, respectively.

INCOME TAXES--The Company has adopted Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes", which requires
companies to apply current statutory income tax rates to deferred assets and
liabilities arising from differences in financial reporting and tax reporting
bases. Income tax information is disclosed in Note 9.

NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE--Net income (loss)
per common and common equivalent share is based on the weighted average common
and dilutive common equivalent shares outstanding during each period after
giving effect to the change in the Company's capital structure pursuant to the
Merger and the Options Adjustments, as described in Notes 1 and 10. This
weighted average includes incremental shares for dilutive common equivalent
shares related to the assumed exercise of stock options, using the treasury
stock method. In addition, shares related to common stock issued and incremental
shares related to stock options granted within one year prior to the Offering at
a purchase or exercise price below $19.00 per share were included in the
weighted average, using the treasury stock method for the stock options as if
they were outstanding for all pre-issuance periods presented. For all loss
periods, the effect of the assumed exercise of stock options which were issued
in periods prior to the one-year period previously mentioned is not included
because the effect is antidilutive.

F-14
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECLASSIFICATIONS--Certain reclassifications have been made to prior years'
amounts to conform with the current presentation.

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS--In March 1995, the
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of." SFAS No. 121 establishes the
accounting for the impairment of long-lived assets, certain identifiable
intangibles and goodwill related to those assets to be held and used and for
long-lived assets and certain identifiable intangibles to be disposed. The
Company adopted SFAS No. 121 for the year ended December 29, 1996. Accordingly,
the Company evaluates long-lived assets, including goodwill, periodically to
determine if there has been an impairment of value by reviewing current and
estimated undiscounted cash flows. The carrying amounts of such long-lived
assets will be adjusted if and when it has been determined that a permanent
impairment has occurred.

ACCOUNTING FOR STOCK-BASED COMPENSATION--In October 1995, the Financial
Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 encourages companies to account for stock
compensation awards based on their fair value at the date they are granted. The
resulting compensation cost would be shown as an expense on the income
statement. Companies choosing not to apply the new accounting method are
permitted to continue following current accounting requirements, however, they
are required to disclose in the notes to the financial statements the effect on
net income and earnings per share had the new accounting method been applied.
The Company adopted SFAS No. 123 for 1996, but chose to follow the current
accounting requirements. Accordingly, the Company has disclosed in Note 10 the
pro forma effect on net income and net income per common and common equivalent
share.

4. INVENTORIES

<TABLE>
<CAPTION>
Inventories are summarized as follows:

1995 1996
--------- ---------
Work-in-process..................................... $ 34,366 $ 73,747
<S> <C> <C>
Raw materials...................................... 96,003 66,413
--------- ---------
Total............................................ $ 130,369 $ 140,160
--------- ---------
--------- ---------
</TABLE>

F-15
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

5. PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
Property, plant and equipment is as follows:

1995 1996
--------- ---------
Land................................................ $ 7,310 $ 14,822
<S> <C> <C>
Buildings and leasehold improvements............... 163,414 247,806
Machinery and equipment............................ 743,739 1,075,349
Leased property under capitalized leases........... 9,837 8,519
--------- ---------
924,300 1,346,496
Accumulated depreciation and amortization.......... 443,879 528,339
--------- ---------
Total............................................ $ 480,421 $ 818,157
--------- ---------
--------- ---------
</TABLE>

Depreciation expense related to property, plant and equipment was $54,862,
$65,526 and $91,186 for the years 1994, 1995 and 1996, respectively.

6. ACCRUED EXPENSES

<TABLE>
<CAPTION>
Accrued expenses are as follows:

1995 1996
--------- ---------
Compensation........................................ $ 22,622 $ 48,447
<S> <C> <C>
Employee health and welfare benefits............... 11,739 16,593
Streamlining charge................................ 9,052 4,054
Deferred revenue................................... 10,618 16,105
Interest........................................... 6,099 8,493
Other.............................................. 29,498 41,162
--------- ---------
Total............................................ $ 89,628 $ 134,854
--------- ---------
--------- ---------
</TABLE>

7. LONG-TERM DEBT

<TABLE>
<CAPTION>
Long-term debt is summarized as follows:

1995 1996
--------- ---------
Senior Subordinated Notes........................... $ 150,000 $ 150,000
<S> <C> <C>
Borrowings under credit agreements................. 254,200 672,000
Notes payable, average of 9.17% due 2004 - 2005.... 43,234 40,129
Capitalized lease obligations, weighted average
imputed interest rate of 9.25% due through
2007............................................. 3,676 5,067
Other debt, average of 8.45% due 1997-2004......... 35,996 30,671
--------- ---------
Total.............................................. 487,106 897,867
Less current maturities............................ 37,360 8,672
--------- ---------
Noncurrent portion................................. $ 449,746 $ 889,195
--------- ---------
--------- ---------
</TABLE>

F-16
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

7. LONG-TERM DEBT (CONTINUED)
At December 29, 1996, the fair value of the Senior Subordinated Notes was
approximately $150,750 based on quoted market price. The fair value of the
Company's remaining debt approximated its carrying value, based upon the
Company's current incremental borrowing rates for similar types of borrowing
arrangements.

SENIOR SUBORDINATED NOTES--On May 10, 1993, Senior Subordinated Notes were
issued in the aggregate principal amount of $150,000. Interest on the Notes is
payable semi-annually at the annual rate of 9.125%. The Notes have no required
principal payments prior to maturity on March 15, 2003.

BORROWINGS UNDER CREDIT AGREEMENTS-- On June 6, 1996, an amendment was made
to the Company's credit facility to provide for an additional $566,000 of
commitments and to extend the maturity date two years to December 31, 2002. All
other significant financial provisions of the credit agreement remained
substantially unchanged. As of December 29, 1996, the Company's Credit Agreement
provides for aggregate total commitments of $975,000, comprised of $125,000 in
term loan commitments, $250,000 of revolving loan commitments and $600,000 in
acquisition term loan commitments. The Credit Agreement provides for varying
semi-annual reductions in commitments, and the borrowings bear interest at rates
that fluctuate with the prime rate and the Eurodollar rate which ranged from
6.06% to 9.00% in 1995 and 6.25% to 8.50% in 1996. The Credit Agreement includes
a commitment fee of .25% per annum based on the daily average unutilized
revolving credit commitment. At December 29, 1996, $86,500 of acquisition term
loan commitments and $192,929 of the revolving loan commitments were unutilized.
The amount unutilized under the revolving credit commitments has been reduced by
outstanding letters of credit of $23,571, not reflected in the accompanying
consolidated financial statements, for which the Company was contingently liable
under the Credit Agreement. Such letters of credit primarily guarantee various
insurance reserves.

Borrowings under the terms of the Credit Agreement are secured by pledges of
various assets of the Company. The Credit Agreement has covenants which, among
other things, restrict the incurrence of additional indebtedness by the Company
and limit its ability to make payments to affiliated parties. The Credit
Agreement also restricts the payment of dividends or other distributions of
capital. The Company was in compliance with these covenants as of December 29,
1996.

Aggregate annual maturities of long-term debt subsequent to December 29,
1996 are as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
- ---------------------------------------------------------------------------------- ----------
<S> <C>
1997.............................................................................. $ 8,672
1998.............................................................................. 85,485
1999.............................................................................. 95,122
2000.............................................................................. 108,733
2001.............................................................................. 124,428
2002 and thereafter............................................................... 471,305
----------
893,745
Noncurrent portion of capitalized lease obligations............................... 4,122
----------
Total............................................................................. $ 897,867
----------
----------
</TABLE>

F-17
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

8. LEASES

CAPITAL LEASES--The Company is a lessee under several noncancellable capital
lease agreements for certain fixed assets. The leases extend for periods up to
11 years and contain purchase provisions.

OPERATING LEASES--The Company leases certain equipment, warehouse facilities
and office space under noncancellable operating leases which expire over the
next 12 years. Most of these operating leases provide the Company with the
option, after the initial lease term, either to purchase the equipment or renew
its lease based upon the fair value of the property at the option date.

Future minimum rental payments required under noncancellable leases at
December 29, 1996 were as follows:

<TABLE>
<CAPTION>
YEAR CAPITAL OPERATING
- ------------------------------------------------------------------------ --------- ----------
<S> <C> <C>
1997.................................................................... $ 1,379 $ 39,832
1998.................................................................... 1,376 39,680
1999.................................................................... 1,164 38,518
2000.................................................................... 642 37,346
2001.................................................................... 639 35,516
2002 and thereafter..................................................... 1,485 71,835
--------- ----------
Total minimum lease payments............................................ 6,685 $ 262,727
----------
----------
Less imputed interest................................................... 1,618
---------
Capitalized lease obligations........................................... 5,067
Less current maturities................................................. 945
---------
Noncurrent portion...................................................... $ 4,122
---------
---------
</TABLE>

Rental expense for operating leases was $34,995, $31,948 and $36,299 for the
years 1994, 1995 and 1996, respectively. Assets recorded under capital leases
amounted to $4,423 and $5,342, net of accumulated amortization of $5,414 and
$3,177, at the end of 1995 and 1996, respectively.

F-18
<PAGE>
WORLD COLOR PRESS, INC.
Notes to Consolidated Financial Statements--(Continued)
Years Ended December 25, 1994, December 31, 1995 and December 29, 1996
(Dollars in thousands, except per share data)

9. INCOME TAXES

The provision (benefit) for income taxes is summarized as follows:

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Current:
Federal..................................................... $ 2,669 $ 6,540 $ 16,542
State....................................................... 882 810 3,418
--------- --------- ---------
3,551 7,350 19,960
--------- --------- ---------
Deferred:
Federal..................................................... 11,176 (944) 12,491
State....................................................... 1,095 178 1,082
--------- --------- ---------
12,271 (766) 13,573
--------- --------- ---------
Total..................................................... $ 15,822 $ 6,584 $ 33,533
--------- --------- ---------
--------- --------- ---------
</TABLE>

The tax effects of significant items comprising the Company's net deferred
tax asset (liability) as of December 31, 1995 and December 29, 1996 are as
follows:

<TABLE>
<CAPTION>
1995 1996
--------- ----------
<S> <C> <C>
Deferred tax assets:
Operating loss carryforwards......................................... $ 27,903 $ 15,161
Tax credit carryforwards............................................. 19,363 21,241
Postemployment benefits.............................................. 15,577 22,106
Postretirement benefits other than pensions.......................... 8,883 11,450
Pension accrual...................................................... 2,000 7,668
Vacation accrual..................................................... 2,785 5,390
Other differences.................................................... 7,318 21,585
--------- ----------
Gross deferred tax assets.......................................... 83,829 104,601
--------- ----------
Deferred tax liabilities:
Differences between book and tax bases of property................... 41,732 138,116
Other differences.................................................... 16,151 18,256
--------- ----------
Gross deferred tax liabilities..................................... 57,883 156,372
--------- ----------
Deferred tax asset valuation allowance................................. 6,840 6,840
--------- ----------
Net deferred tax asset (liability)..................................... 19,106 (58,611)
Less current deferred tax asset........................................ 28,364 32,944
--------- ----------
Noncurrent deferred tax liability...................................... $ (9,258) $ (91,555)
--------- ----------
--------- ----------
</TABLE>

The 1995 and 1996 amounts above include a valuation allowance of $6,840
relating to a capital loss carryforward that is not expected to be realized for
tax purposes and for the timing limitations of certain state net operating loss
carryforwards.

F-19
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

9. INCOME TAXES (CONTINUED)
The following table reconciles the difference between the U.S. federal
statutory tax rates and the rates used by the Company in the determination of
net income:

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Income tax provision, at 35%................................. $ 13,845 $ 5,761 $ 28,278
State and local income taxes, net of federal income tax
benefit.................................................... 1,285 642 2,941
Deferred tax asset valuation allowance....................... -- (1,160) --
Other, primarily goodwill amortization....................... 692 1,341 2,314
--------- --------- ---------
Total.................................................... $ 15,822 $ 6,584 $ 33,533
--------- --------- ---------
--------- --------- ---------
</TABLE>

At December 29, 1996, the Company has net operating loss carryforwards for
federal income tax purposes of $37,107 available to reduce future taxable
income, expiring primarily between 2004 and 2008. The Company also has tax
credits of $2,291 expiring primarily from 1999 to 2002 and alternative minimum
tax carryover credits of $18,950 which do not expire and may be applied against
regular tax in the future, in the event that the regular tax expense exceeds the
alternative minimum tax.

10. EMPLOYEE BENEFIT PLANS

PENSION PLANS--The Company has defined benefit pension plans in effect which
cover certain employees who meet minimum eligibility requirements and who are
not covered by multiemployer plans. The Company contributes annually amounts
sufficient to satisfy the government's minimum standards.

Net periodic pension cost is determined based upon years of service and
compensation levels, using the projected unit credit method. Prior year service
costs and unrecognized gains and losses are amortized over the estimated future
service periods of active employees in the respective plan.

The components of net periodic pension cost are as follows:

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ----------
<S> <C> <C> <C>
Service cost (for benefits earned during the year)........... $ 2,548 $ 2,270 $ 4,927
Interest cost on projected benefit obligation................ 4,517 5,010 9,218
Actual return on plan assets................................. 1,346 (7,751) (12,467)
Net amortization and deferral................................ (7,046) 1,800 2,295
--------- --------- ----------
Net periodic pension cost.................................... $ 1,365 $ 1,329 $ 3,973
--------- --------- ----------
--------- --------- ----------
</TABLE>

Effective January 1, 1997, several of the Company's defined benefit plans
were merged into the World Color Press, Inc. Retirement Plan, which was then
amended to form the World Color Press Cash Balance Plan (the "Cash Balance
Plan"), which provides for a new benefit formula applicable to all participants.
Annually, under the Cash Balance Plan, the Company will credit each
participant's account with a fixed percentage of the participant's annual
compensation.

F-20
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
The funded status of the Company's pension plans at year-end, which reflects
the aforementioned mergers and amendment, is presented below.
<TABLE>
<CAPTION>
1995 1996
-------------------------- --------------------------
<S> <C> <C> <C> <C>
(PLANS IN WHICH)
------------------------------------------------------

<CAPTION>
ASSETS ACCUMULATED ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
BENEFITS ASSETS BENEFITS ASSETS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Actuarial present value of plan benefits:
Vested.................................................. $ 44,564 $ 16,878 $ 83,262 $ 27,774
Nonvested............................................... 2,905 1,086 5,723 1,273
------------ ------------ ------------ ------------
Accumulated benefit obligation............................ 47,469 17,964 88,985 29,047
Effect of projected future salary increases............... 5,920 167 12,201 2,822
------------ ------------ ------------ ------------
Projected benefit obligation.............................. 53,389 18,131 101,186 31,869
Plan assets at fair value................................. 59,016 14,439 109,669 26,260
------------ ------------ ------------ ------------
Plan assets greater than (less than) the projected benefit
obligation.............................................. 5,627 (3,692) 8,483 (5,609)
Unrecognized net loss (gain).............................. (7,949) 2,591 (18,520) (245)
Unrecognized net transition obligation (asset)............ (1,266) 405 (982) 347
Unrecognized prior service cost (credit).................. (116) 288 (6,508) 694
Adjustment required to recognize minimum liability........ -- (3,116) -- (1,477)
------------ ------------ ------------ ------------
Accrued pension liability................................. $ (3,704) $ (3,524) $ (17,527) $ (6,290)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>

The unrecognized net transition asset or obligation is being amortized over
the average expected future service periods of employees. The market value of
plan assets was used to calculate the assumed return on plan assets. At the end
of 1995 and 1996, an additional minimum pension liability for unfunded
accumulated benefit obligations of $3,116, and $1,477, respectively, was
recognized. The weighted average discount rate and rate of increase in future
compensation levels used in determining actuarial present value of the projected
benefit obligation for the Company's plans were 7.5% and 3.5% in 1995 and 8.0%
and 3.5% in 1996, respectively. The expected long-term rate of return on plan
assets used was 9.0%, 9.0% and 10.0% for 1994, 1995 and 1996, respectively. Plan
assets consist principally of common stocks and U.S. government and corporate
obligations.

Certain union employees of the Company participate in multiemployer plans.
Amounts charged to benefit expense relating to the multiemployer plans for 1994,
1995 and 1996 totaled $2,588, $3,049 and $3,185, respectively. In addition, the
Company has various deferred savings and profit sharing plans for certain
employees who meet eligibility requirements. Amounts charged to benefit expense
related to these plans for 1994, 1995 and 1996 totaled $754, $1,186 and $1,044,
respectively.

F-21
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
POSTRETIREMENT BENEFIT PLANS--The Company provides postretirement medical
benefits to eligible employees. The Company's postretirement health care plans
are unfunded. The status of the plans is as follows:

<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Actuarial present value of plan benefits:
Retirees.............................................................. $ 11,519 $ 15,349
Fully eligible active plan participants............................... 875 2,274
Other active plan participants........................................ 3,807 8,503
--------- ---------
Total accumulated benefit obligation.................................... 16,201 26,126
Unrecognized net deferrals.............................................. 6,186 5,172
--------- ---------
Accrued postretirement benefits......................................... $ 22,387 $ 31,298
--------- ---------
--------- ---------
</TABLE>

The components of net periodic postretirement benefit cost are as follows:

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Service Cost................................................... $ 1,114 $ 511 $ 839
Interest Cost.................................................. 1,649 1,192 1,596
Amortization of unrecognized prior service cost................ -- (1,289) (1,289)
Amortization of unrecognized net gain.......................... -- (194) --
--------- --------- ---------
Net periodic postretirement benefit cost....................... $ 2,763 $ 220 $ 1,146
--------- --------- ---------
--------- --------- ---------
</TABLE>

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 9% and 7% at the end of 1995 and 1996,
respectively, decreasing each successive year to 5% by 1997, after which it
remains constant. A one percentage point increase in the assumed health care
cost trend rate would increase the accumulated postretirement benefit obligation
as of December 29, 1996 by $1,791 and the annual postretirement benefit expense
by approximately $217. The assumed discount rate used in determining the
accumulated postretirement benefit obligation was 7.5% and 8.0% in 1995 and
1996, respectively.

In the fourth quarter of 1994, the plan was amended to generally provide
lower benefits and greater cost-sharing from covered retirees. The plan
amendments became effective January 1, 1995.

STOCK OPTION PLANS--Upon consummation of the Merger described in Note 1, the
Stock Option Committee of the Board of Directors (the "Stock Option Committee")
adjusted all of the outstanding options so that each option became exercisable
for five times the number of shares of common stock for which it had been
exercisable immediately prior to the Merger at an exercise price per share equal
to one-fifth of the exercise price per share immediately prior to the Merger
(the "Options Adjustments"). Accordingly, the following stock option data has
been presented on a post-Merger basis.

The Company has stock option plans that permit the Stock Option Committee to
grant up to an aggregate of 5,250,000 options to purchase shares of the
Company's common stock to certain key employees of the Company. Options granted
under the plans generally vest ratably over a five-year period.

F-22
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
Vested options may generally be exercised up to ten years from the date of
grant. Information related to the Company's stock option plans is presented
below.

<TABLE>
<CAPTION>
NUMBER OF
OPTIONS OPTION PRICE
----------- ------------------
<S> <C> <C>
Outstanding at December 26, 1993............................ 3,417,410 $5.49 to $10.30
Granted................................................... 31,065 $10.30
Exercised................................................. --
Rescinded/Canceled........................................ (42,475) $8.97 to $10.30
-----------
Outstanding at December 25, 1994............................ 3,406,000 $5.49 to $10.30
Granted................................................... 640,555 $11.20 to $15.00
Exercised................................................. (26,575) $5.49
Rescinded/Canceled........................................ (204,660) $6.89 to $10.30
-----------
Outstanding at December 31, 1995............................ 3,815,320 $5.49 to $15.00
Granted................................................... 354,000 $22.00
Exercised................................................. (1,532,290) $5.49 to $6.95
Rescinded/Canceled........................................ (74,725) $8.97 to $15.00
-----------
Outstanding at December 29, 1996............................ 2,562,305 $5.49 to $22.00
-----------
-----------
</TABLE>

<TABLE>
<CAPTION>
RESERVED FOR
EXERCISABLE FUTURE GRANTS
---------- -------------
<S> <C> <C>
December 25, 1994................................................. 2,613,556 594,000
December 31, 1995................................................. 2,810,910 1,434,680
December 29, 1996................................................. 1,655,640 1,155,405
</TABLE>

In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation," which became effective for the
Company's current year financial statements. As allowable by SFAS No. 123, the
Company has not recorded compensation expense for stock options granted to
employees, but rather, has determined the pro forma net income and net income
per common and common equivalent share amounts for fiscal years 1995 and 1996,
had compensation expense been recorded for options granted during those years
under the applicable fair value method described in the statement.

For options granted during 1995, the fair value was estimated using the
minimum value method. Under this method, the expected volatility of the
Company's common stock is not estimated, as prior to the Offering there was no
market for the Company's common stock in which to monitor stock price
volatility. For options granted during 1996, the fair value at the date of grant
was estimated using the Black-Scholes option pricing model. Under the
Black-Scholes model, a volatility factor of .312 was used.

The following weighted average assumptions were used in calculating the fair
value of the options granted in 1995 and 1996, respectively: risk-free interest
rates of 6.41% and 6.80%; an assumed dividend yield of zero; and an expected
life of the options of ten years.

F-23
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
For purposes of the pro forma disclosures, the estimated fair value of the
options granted is amortized to compensation expense over the options' vesting
period. The Company's pro forma information is as follows:

<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Net income:
As reported............................................................ $ 9,877 $ 47,261
Pro forma.............................................................. $ 9,746 $ 46,688

Net income per common and common equivalent share:
As reported............................................................ $ 0.29 $ 1.35
Pro forma.............................................................. $ 0.28 $ 1.34

Weighted average fair value of options granted during the year........... $ 7.01 $ 12.81
</TABLE>

11. TRANSACTIONS WITH AFFILIATES

The Company has incurred expenses of $850, $850 and $750 in 1994, 1995 and
1996, respectively, for management services provided by affiliated companies. In
addition, the Company paid $3,735 in advisory fees in 1995 associated with the
acquisitions described in Note 2, to affiliated companies.

At December 26, 1993, the Company had borrowings of $2,159 from PHLP, which
was evidenced by a promissory note. The promissory note bore interest at the
prime rate with such interest recorded as an addition to the note. Interest
expense for 1994 was $125. In the fourth quarter of 1994, the balance owed of
$2,809 was repaid and PHLP subsequently contributed this amount to the Company
as capital. In the fourth quarter of 1995, PHLP was merged into the Company as
described in Note 1.

12. COMMITMENTS AND CONTINGENT LIABILITIES

The Company is subject to legal proceedings and other claims arising in the
ordinary course of operations. In the opinion of management, ultimate resolution
of proceedings currently pending will not have a material effect on the results
of operations or financial position of the Company.

13. STREAMLINING CHARGE

In the fourth quarter of 1995, the Company finalized and committed to a plan
to realign certain business operations, resulting in a charge of $40,900. The
major components of this realignment plan were to close a facility and to
consolidate certain digital prepress operations and functions. The financial
statement effects of this decision were a writedown of assets to net realizable
value of $30,700, a provision for severance costs of $8,000 and a provision for
certain other related costs of $2,200. The facility referred to above was exited
and the consolidation of the operations and functions were substantially
complete at the end of 1996. At December 29, 1996, of the amounts provided for
as severance and other related costs,

F-24
<PAGE>
WORLD COLOR PRESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

13. STREAMLINING CHARGE (CONTINUED)
approximately $6,100 had been paid in cash and the substantial balance of these
liabilities will be paid by the end of 1997.

14. UNAUDITED QUARTERLY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
NET INCOME WEIGHTED AVERAGE
(LOSS) PER COMMON AND
COMMON AND COMMON
COMMON EQUIVALENT
GROSS NET INCOME EQUIVALENT SHARES
QUARTER ENDED NET SALES PROFIT (LOSS) SHARE OUTSTANDING
- ----------------------------------------- ------------ ----------- ----------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
April 2, 1995............................ $ 275,399 $ 43,434 $ 4,415 $ 0.13 34,440,867
July 2, 1995............................. 305,244 51,540 4,826 0.14 34,440,867
October 1, 1995.......................... 367,331 66,891 14,503 0.42 34,440,867
December 31, 1995........................ 347,608 58,932 (13,867) (0.43) 32,346,096
------------ ----------- -----------
$ 1,295,582 $ 220,797 $ 9,877 0.29 34,440,867
------------ ----------- -----------
------------ ----------- -----------
March 31, 1996........................... $ 329,111 $ 52,286 $ 5,939 $ 0.17 34,827,689
June 30, 1996............................ 342,266 57,942 6,056 0.17 35,084,876
September 29, 1996....................... 487,804 96,406 19,217 0.55 35,059,968
December 29, 1996........................ 482,231 85,648 16,049 0.46 35,015,986
------------ ----------- -----------
$ 1,641,412 $ 292,282 $ 47,261 1.35 35,002,923
------------ ----------- -----------
------------ ----------- -----------
</TABLE>

As described in Note 13, the results of the fourth quarter of 1995 include a
streamlining charge of $40,900 ($24,540 net of tax).

F-25
<PAGE>
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