Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill is tested annually for impairment as of October 31 or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying value. One of these indicators is entity-specific events, which may be evidenced by, among other things, a contemplation of bankruptcy. On March 25, 2015, due to deteriorating economic conditions, including inflation and currency devaluation, combined with uncertain political conditions, declining print volumes and labor challenges, the Company's Argentina Subsidiaries (included within the Latin America reporting unit) commenced bankruptcy restructuring proceedings with a goal of consolidating operations. As a result, the Company conducted an interim goodwill impairment assessment of the Latin America reporting unit, which included comparing the carrying amount of net assets, including goodwill, to its respective fair value as of March 31, 2015, the date of the interim assessment.

Fair value was determined using an equal weighting of both the income and market approaches. Under the income approach, the Company determined fair value based on estimated future cash flows discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk and the rate of return an outside investor would expect to earn. Under the market approach, the Company derived the fair value of the reporting units based on market multiples of comparable publicly-traded companies. The Company performed an additional fair value measurement calculation to determine whether a Latin America reporting unit impairment charge should be recorded because the fair value of the reporting unit was below its carrying amount. As part of this calculation, the Company also estimated the fair values of significant tangible and intangible long-lived assets in the Latin America reporting unit. This fair value determination was categorized as Level 3 in the fair value hierarchy (see Note 12, "Financial Instruments and Fair Value Measurements," for the definition of Level 3 inputs).

The Company recorded a $23.3 million non-cash goodwill impairment charge as a result of the March 31, 2015 interim goodwill impairment assessment for the Latin America reporting unit within the International segment. The goodwill impairment charge resulted from a reduction in estimated fair value of the reporting unit based on lower expectations for future revenue, profitability and cash flows as compared to expectations in the last annual goodwill impairment assessment performed as of October 31, 2014, and as reviewed for any additional indications of impairment as of December 31, 2014.

Goodwill included $23.3 million of accumulated impairment losses at March 31, 2015. Goodwill at December 31, 2014 did not include any accumulated impairment losses. No goodwill impairment was recorded during the three months ended March 31, 2014. Activity impacting goodwill for the three months ended March 31, 2015, was as follows:



	United States Print and Related Services		International			Total
Balance at December 31, 2014	$	751.3	$	24.2		$	775.5
Impairment	—		(23.3		)	(23.3		)
Translation adjustments	—		(0.9		)	(0.9		)
Balance at March 31, 2015	$	751.3	$	—		$	751.3

The components of other intangible assets at March 31, 2015 and December 31, 2014, were as follows:



	March 31, 2015								December 31, 2014
	Weighted Average Amortization Period (years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Weighted Average Amortization Period (years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Trademarks, patents, licenses and agreements	5	$	22.1	$	(4.1	)	$	18.0	5	$	5.1	$	(3.8	)	$	1.3
Customer relationships	6	442.9		(315.3		)	127.6		6	445.1		(298.5		)	146.6
Capitalized software	5	6.4		(6.1		)	0.3		5	6.7		(6.3		)	0.4
Acquired technology	5	6.2		(5.5		)	0.7		5	6.7		(5.9		)	0.8
Total		$	477.6	$	(331.0	)	$	146.6		$	463.6	$	(314.5	)	$	149.1

The gross carrying amount and accumulated amortization within other intangible assets—net in the condensed consolidated balance sheets at March 31, 2015 and December 31, 2014, differs from the value originally recorded at acquisition due to the effects of currency fluctuations between the purchase date and March 31, 2015 and December 31, 2014.

Amortization expense for other intangible assets was $19.1 million and $18.9 million for the three months ended March 31, 2015 and 2014, respectively. The following table outlines the estimated future amortization expense related to intangible assets as of March 31, 2015:



	Amortization Expense
Remainder of 2015	$	58.9
2016	46.6
2017	14.6
2018	14.1
2019	10.1
2020 and thereafter	2.3
Total	$	146.6

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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