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Discontinued Operations
 12 Months Ended
Dec. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Discontinued Operations

On July 12, 2011, the Company and Transcontinental Inc. ("Transcontinental") entered into a definitive agreement whereby Quad/Graphics acquired 100% of Transcontinental's Mexican operations in exchange for the Company's Canadian operations. The Company completed the acquisition of Transcontinental's Mexican operations on September 8, 2011, and completed the sale of the Company's Canadian operations on March 1, 2012.

The Company's determination of the Mexican acquired operations' fair value was $63.6 million. Of the $63.6 million purchase price, $6.1 million was paid in cash ($1.2 million was paid in 2011 and $4.9 million was paid in 2012). The remaining purchase price of $57.5 million was satisfied by the exchange transaction of the Company's Canadian business.

In connection with the acquisition of Transcontinental's Mexican operations, the definitive agreement required the Company to deposit 50.0 million Canadian dollars with Transcontinental until the Canadian operations sale was completed. The Company elected to hedge the foreign currency exchange rate exposure related to the 50.0 million Canadian dollar deposit by entering into short-term foreign currency forward exchange contracts. The Company hedged this foreign currency exposure until the March 1, 2012, sale of Canadian net assets and refund of the 50.0 million Canadian dollar deposit occurred. During the year ended December 31, 2012, $1.6 million of realized mark-to-market losses on the derivative contracts were offset by $1.6 million of transaction gains on translation of the foreign currency denominated deposit within selling, general and administrative expenses. The fair value determination of the foreign currency forward exchange contracts was categorized as Level 2 in the fair value hierarchy (see Note 16, "Financial Instruments and Fair Value Measurements," for the definition of Level 2 inputs).

Transcontinental assumed pension and post-retirement obligations pertaining to approximately 1,500 Canadian employees, located among the seven facilities sold to Transcontinental. The gain on disposal of discontinued operations, net of tax, was finalized in 2012, and determined as follows:

 
As of
 
December 31, 2012
Fair value of the acquired Transcontinental Mexican operations
$
63.6

Cash paid to Transcontinental
(6.1
)
Net proceeds
57.5

Net assets of discontinued operations
(27.2
)
Cumulative translation adjustment of discontinued operations
3.7

Gain on disposal of discontinued operations, net of tax(1)
$
34.0

______________________________
(1)
For tax purposes the disposal of discontinued operations resulted in a long-term capital loss, for which a deferred tax asset was recorded. An offsetting valuation allowance against the deferred tax asset was recorded to reflect the expected value at which the asset will be recovered.

As the sale of the Canadian operations was completed on March 1, 2012, there were no results of operations of the Canadian operations for the years ended December 31, 2014 and 2013. The following table summarizes the results of operations of the Canadian operations, which are included in the loss from discontinued operations in the consolidated statements of operations for the year ended December 31, 2012:

 
Year Ended
 
December 31, 2012
Total net sales
$
32.2

 
 
Loss from discontinued operations before income taxes
(3.2
)
Income tax expense
—

Loss from discontinued operations, net of tax
$
(3.2
)


Prior to the March 1, 2012 closing, the Company continued to execute restructuring events related to plant closures, workforce reductions and other restructuring initiatives, as well as transaction costs related to the sale of the Canadian operations. Due to these initiatives, the Company has recognized $1.7 million in restructuring, impairment and transaction-related costs for the year ended December 31, 2012 within discontinued operations in the consolidated statements of operations.