XML 20 R9.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Restructuring, Impairment and Transaction-Related Charges | 6 Months Ended
--- | ---
Jun. 30, 2016
Restructuring and Related Activities [Abstract] |
Restructuring, Impairment and Transaction-Related Charges | Restructuring, Impairment and Transaction-Related Charges The Company recorded restructuring, impairment and transaction-related charges for the three and six months ended June 30, 2016 and 2015, as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Employee termination charges | $ | 1.7 |  |  | $ | 7.4 |  |  | $ | 6.6 |  |  | $ | 12.5 |
Impairment charges | 0.1 |  |  | 17.8 |  |  | 16.8 |  |  | 24.1 |
Transaction-related charges (income) | 0.9 |  |  | 1.0 |  |  | 1.5 |  |  | (8.2 | )
Integration costs | — |  |  | 2.0 |  |  | 0.1 |  |  | 3.8 |
Other restructuring charges | 4.7 |  |  | 6.1 |  |  | 11.3 |  |  | 12.2 |
Total | $ | 7.4 |  |  | $ | 34.3 |  |  | $ | 36.3 |  |  | $ | 44.4 |
The costs related to these activities have been recorded in the condensed consolidated statements of operations as restructuring, impairment and transaction-related charges. See Note 19, "Segment Information," for restructuring, impairment and transaction-related charges by segment. Restructuring Charges Since 2010, the Company has implemented restructuring programs to eliminate excess manufacturing capacity and properly align its cost structure. The Company has announced a total of 33 plant closures and has reduced headcount by approximately 11,000 employees since 2010. The Company announced the closures of the Atglen, Pennsylvania and Lenexa, Kansas plants during the six months ended June 30, 2016. The Company recorded the following charges as a result of plant closures and other restructuring programs:
• | Employee termination charges of $1.7 million and $6.6 million were recorded during the three and six months ended June 30, 2016, respectively, and $7.4 million and $12.5 million were recorded during the three and six months ended June 30, 2015, respectively. The Company reduced its workforce through facility consolidations and involuntary separation programs.
• | There were no integration costs recorded during the three months ended June 30, 2016. Integration costs of $0.1 million were recorded during the six months ended June 30, 2016. Integration costs of $2.0 million and $3.8 million were recorded during the three and six months ended June 30, 2015, respectively, and were primarily related to preparing existing facilities to meet new production requirements resulting from work transferring from closed plants, as well as other costs related to the integration of acquired companies.
• | Other restructuring charges of $4.7 million and $11.3 million were recorded during the three and six months ended June 30, 2016, respectively, which consisted of the following: (1) $3.1 million and $7.1 million, respectively, of vacant facility carrying costs; (2) $1.3 million and $3.8 million, respectively, of equipment and infrastructure removal costs from closed plants; and (3) $0.3 million and $0.4 million, respectively, of lease exit charges. Other restructuring charges of $6.1 million and $12.2 million, respectively, were recorded during the three and six months ended June 30, 2015, which consisted of the following: (1) $4.5 million and $6.7 million, respectively, of vacant facility carrying costs; (2) $0.9 million and $1.3 million, respectively, of equipment and infrastructure removal costs from closed plants; and (3) $0.7 million and $4.2 million, respectively, of lease exit charges primarily related to the closure of the Atlanta, Georgia facility.
The restructuring charges recorded were based on plans that have been committed to by management and were, in part, based upon management's best estimates of future events. Changes to the estimates may require future restructuring charges and adjustments to the restructuring liabilities. The Company expects to incur additional restructuring charges related to these and other initiatives. Impairment Charges The Company recognized impairment charges of $0.1 million and $16.8 million during the three and six months ended June 30, 2016, respectively, which consisted of the following: (1) $12.1 million during the six months ended June 30, 2016 of land and building impairment charges related to the Atglen, Pennsylvania plant closure; and (2) $0.1 million and $4.7 million during the three and six months ended June 30, 2016, respectively, of impairment charges primarily for machinery and equipment no longer being utilized in production as a result of facility consolidations, including Atglen, Pennsylvania; Augusta, Georgia; and East Greenville, Pennsylvania, as well as other capacity reduction restructuring activities. The Company recognized impairment charges of $17.8 million and $24.1 million during the three and six months ended June 30, 2015, respectively, which consisted of the following: (1) $16.7 million of impairment charges recorded in the second quarter of 2015 to reduce the book value of the Company's equity method investment in Chile to fair value (see Note 7, "Equity Method Investments in Unconsolidated Entities," for additional details related to the impairment of the Company's equity method investment in Chile); (2) $1.1 million and $5.2 million, respectively, of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations, including Atlanta, Georgia; Dickson, Tennessee; and Queretaro, Mexico, as well as other capacity reduction restructuring initiatives; and (3) $2.2 million of impairment charges recorded in the first quarter of 2015 for property, plant and equipment and other intangible assets as a result of the restructuring proceedings in Argentina for the Company's Argentina subsidiaries, World Color Argentina, S.A. and Anselmo L. Morvillo S.A. (the "Argentina Subsidiaries"). The fair values of the impaired assets were determined by the Company to be Level 3 under the fair value hierarchy (see Note 12, "Financial Instruments and Fair Value Measurements," for the definition of Level 3 inputs) and were estimated based on broker quotes, internal expertise related to current marketplace conditions and estimated future undiscounted cash flows. These assets were adjusted to their estimated fair values at the time of impairment. The non-cash goodwill impairment charges included in the line item entitled goodwill impairment on the Company's condensed consolidated statements of operations are discussed in Note 4, "Goodwill and Other Intangible Assets." Transaction-Related Charges (Income) The Company incurs transaction-related charges (income) primarily consisting of professional service fees related to business acquisition and divestiture activities. The Company recognized transaction-related charges of $0.9 million and $1.5 million during the three and six months ended June 30, 2016, respectively. The Company recognized transaction-related charges of $1.0 million and income of $8.2 million during the three and six months ended June 30, 2015, respectively, which, in the six month period, included a $10.0 million non-recurring gain as a result of Courier Corporation's ("Courier") termination of the agreement pursuant to which Quad/Graphics was to acquire Courier, partially offset by $1.8 million of professional service fees primarily for the terminated acquisition of Courier and for the acquisitions of Marin's and Copac. The transaction-related charges were expensed as incurred in accordance with the applicable accounting guidance on business combinations. Reserves for Restructuring, Impairment and Transaction-Related Charges Activity impacting the Company's reserves for restructuring, impairment and transaction-related charges for the six months ended June 30, 2016, was as follows:
| Employee Termination Charges |  | Impairment Charges |  | Transaction-Related Charges |  | Integration Costs |  | Other Restructuring Charges |  | Total
Balance at December 31, 2015 | $ | 24.4 |  |  | $ | — |  |  | $ | 0.1 |  |  | $ | 1.4 |  |  | $ | 13.0 |  |  | $ | 38.9 |
Expense | 6.6 |  |  | 16.8 |  |  | 1.5 |  |  | 0.1 |  |  | 11.3 |  |  | 36.3 |
Cash payments | (23.4 | ) |  | — |  |  | (1.1 | ) |  | (0.3 | ) |  | (13.7 | ) |  | (38.5 | )
Non-cash adjustments | (0.2 | ) |  | (16.8 | ) |  | — |  |  | (0.1 | ) |  | (1.4 | ) |  | (18.5 | )
Balance at June 30, 2016 | $ | 7.4 |  |  | $ | — |  |  | $ | 0.5 |  |  | $ | 1.1 |  |  | $ | 9.2 |  |  | $ | 18.2 |
The Company's restructuring, impairment and transaction-related reserves at June 30, 2016, included a short-term and a long-term component. The short-term portion included $11.6 million in accrued liabilities and $1.0 million in accounts payable in the condensed consolidated balance sheets as the Company expects these reserves to be paid within the next twelve months. The long-term portion of $5.6 million is included in other long-term liabilities (see Note 13, "Other Long-Term Liabilities") in the condensed consolidated balance sheets.

X
- References No definition available. + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of costs incurred for restructuring including, but not limited to, exit and disposal activities, remediation, implementation, integration, asset impairment, and charges against earnings from the write-down of assets. + References No definition available. + Details
Name: | us-gaap_RestructuringImpairmentAndOtherActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration