Fair Value Measurement

12 Months Ended

Dec. 31, 2015

Note 8. Fair Value Measurement

Certain assets and liabilities are required to be recorded at fair value on a recurring basis. The Company’s assets and liabilities required to be adjusted to fair value on a recurring basis are pension and other postretirement benefits plan assets, foreign exchange forward contracts and interest rate swaps. See Note 11 for the fair value of the Company’s pension and other postretirement benefits plan assets as of December 31, 2015 and 2014 and Note 14 for the fair value of the Company’s foreign exchange forward contracts and interest rate swaps as of December 31, 2015 and 2014. See Note 13 for the fair value of the Company’s debt as of December 31, 2015, which is recorded at book value.

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company is required to record certain assets and liabilities at fair value on a nonrecurring basis, generally as a result of acquisitions or the remeasurement of assets resulting in impairment charges. See Note 2 for further discussion on the fair value of assets and liabilities associated with acquisitions.

The fair value as of the measurement date, net book value as of the end of the year and related impairment charge for assets measured at fair value on a nonrecurring basis subsequent to initial recognition during the years ended December 31, 2015, 2014 and 2013 were as follows:

	Year Ended December 31, 2015				As of December 31, 2015
	Impairment Charge		Fair Value Measurement (Level 3)		Net Book Value
Long-lived assets held and used	$	0.3	$	—	$	—
Long-lived assets held for sale or disposal		10.0		17.9		14.4
Goodwill		18.0		—		—
Other intangible assets		11.9		—		—
Total	$	40.2	$	17.9	$	14.4

	Year Ended December 31, 2014				As of December 31, 2014
	Impairment Charge		Fair Value Measurement (Level 3)		Net Book Value
Long-lived assets held and used	$	5.4	$	1.3	$	1.3
Long-lived assets held for sale or disposal		12.5		20.8		3.2
Goodwill		18.1		—		—
Other intangible assets		15.0		—		—
Total	$	51.0	$	22.1	$	4.5

	Year Ended December 31, 2013				As of December 31, 2013
	Impairment Charge		Fair Value Measurement (Level 3)		Net Book Value
Long-lived assets held and used	$	4.2	$	4.2	$	4.0
Long-lived assets held for sale or disposal		14.8		20.2		18.5
Other intangible assets		3.3		—		—
Total	$	22.3	$	24.4	$	22.5

The fair values of assets held for sale that were remeasured during the years ended December 31, 2015, 2014 and 2013 were reduced by estimated costs to sell of $0.4 million, $1.2 million and $1.4 million, respectively.

During the year ended December 31, 2015, goodwill for the Europe and Latin America reporting units was written down to an implied fair value of zero. See Note 3 for further discussion regarding these impairment charges.

During the year ended December 31, 2015, the Company recorded impairment charges of $11.9 million, including $9.2 million and $2.2 million for the impairment of certain acquired customer relationship intangible assets in the labels reporting unit within the Variable Print segment and the Latin America reporting unit within the International segment, respectively. After recording the impairment charges, remaining customer relationship assets in the labels and Latin America reporting units were zero and $0.9 million, respectively. See Note 3 for further discussion regarding these impairment charges.

During the year ended December 31, 2014, goodwill for the magazines, catalogs and retail inserts reporting unit was written down to an implied fair value of zero. See Note 3 for further discussion regarding this impairment charge.

During the year ended December 31, 2014, the Company recorded impairment charges of $7.8 million, $4.1 million and $1.7 million related to the impairment of acquired customer relationship intangible assets in the Canada, commercial and digital print and financial reporting units, respectively. After recording the impairment charges, remaining customer relationship assets in the Canada, commercial and digital print and financial reporting units were $0.2 million, $181.8 million and $84.0 million, respectively. During the year ended December 31, 2014, $1.4 million of acquired tradenames related to the commercial and digital print reporting unit were written down to an estimated fair value of zero due to facility closures. After recording the impairment charges, remaining tradename intangible assets in the commercial and digital reporting unit were $14.3 million as of December 31, 2014. See Note 3 for further discussion regarding these impairment charges.

During the year ended December 31, 2013, certain acquired customer relationship assets related to the financial reporting unit were written down to an estimated fair value of zero. After recording the impairment charges, remaining customer relationship intangible assets in the financial reporting unit were $101.2 million as of December 31, 2013. See Note 3 for further discussion regarding these impairment charges.

The Company’s accounting and finance management determines the valuation policies and procedures for Level 3 fair value measurements and is responsible for the development and determination of unobservable inputs.

The fair values of the long-lived assets held and used and long-lived assets held for sale or disposal were determined using Level 3 inputs and were estimated based on discussions with real estate brokers, review of comparable properties, if available, discussions with machinery and equipment brokers, dealer quotes and internal expertise related to the current marketplace conditions. Unobservable inputs obtained from third parties are adjusted as necessary for the condition and attributes of the specific asset.

The following table presents the fair value, valuation techniques and related unobservable inputs for these Level 3 measurements for the years ended December 31, 2015, 2014 and 2013:

	Fair Value		Valuation Technique	Unobservable Input	Range
2015
Customer relationships	$	—	Excess earnings	Attrition rate		2.7%

2014
Customer relationships	$	—	Excess earnings	Discount rate	12.0%-18.0%
				Attrition rate	6.6% - 12.0%
2013
Customer relationships	$	—	With and without method	Discount rate		16.0%

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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