Note 4. Restructuring, Impairment and Other Charges

Restructuring, Impairment and Other Charges Recognized in Results of Operations

2016	Employee Terminations		Other Restructuring Charges			Total Restructuring Charges		Impairment			Other Charges		Total
Variable Print	$	1.4	$	1.7		$	3.1	$	557.9		$	1.9	$	562.9
Strategic Services		1.8		(0.1	)		1.7		—			0.4		2.1
International		9.6		1.8			11.4		(2.5	)		—		8.9
Corporate		9.1		0.1			9.2		1.2			—		10.4
Total	$	21.9	$	3.5		$	25.4	$	556.6		$	2.3	$	584.3

Restructuring and Impairment Charges

For the year ended December 31, 2016, the Company recorded net restructuring charges of $21.9 million for employee termination costs. These charges primarily related to the reorganization of certain corporate administrative functions and operations and two facility closures in the International segment. Additionally, the Company incurred lease termination and other restructuring charges of $3.5 million for the year ended December 31, 2016. For the year ended December 31, 2016, the Company also recorded $0.9 million of net gains on the sale of previously impaired assets.

Additionally in the year ended December 31, 2016, the Company recorded non-cash charges of $416.2 million and $111.6 million to recognize the impairment of goodwill in the commercial and digital print and statement printing reporting units, respectively, which are included within the Variable Print segment. The goodwill impairment charges in the commercial and digital print and statement printing reporting units were due to the continued declines in sales, primarily due to decreased volume, which resulted in a reduction in the estimated fair value of the reporting unit based on lower expectations of future revenue, profitability and cash flows as compared to the expectations as of the October 31, 2016 annual goodwill impairment test. The goodwill impairment charges were determined using the Level 3 inputs, including discounted cash flow analysis, comparable marketplace fair value data and management’s assumptions in valuing the significant tangible and intangible assets.

For the year ended December 31, 2016, the Company recorded non-cash charges of $29.7 million primarily for the impairment of certain acquired customer relationship intangible assets in the commercial and digital print reporting unit within the Variable Print segment. The impairment of the customer relationship intangible assets resulted from lower expectations of future revenue to be derived from those relationships. The impairment of the customer relationship assets was determined using Level 3 inputs and estimated based on cash flow analyses, which included management’s assumptions related to future revenues and profitability.

Other Charges

For the year ended December 31, 2016, the Company recorded charges of $2.3 million for multi-employer pension plan withdrawal obligations unrelated to facility closures. The total liabilities for the withdrawal obligations associated with the Company’s decision to withdraw from all multi-employer pension plans included in accrued liabilities and other noncurrent liabilities are $4.9 million and $34.8 million, respectively, as of December 31, 2016. See Note 12, Retirement Plans, for further discussion of multi-employer pension plans.

The Company’s multi-employer pension plan withdrawal liabilities could be affected by the financial stability of other employers participating in the plans and any decisions by those employers to withdraw from the plans in the future. While it is not possible to quantify the potential impact of future events or circumstances, reductions in other employers’ participation in multi-employer pension plans, including certain plans from which the Company has previously withdrawn, could have a material impact on the Company’s previously estimated withdrawal liabilities, consolidated results of operations, financial position or cash flows.

2015	Employee Terminations		Other Restructuring Charges		Total Restructuring Charges		Impairment			Other Charges		Total
Variable Print	$	3.1	$	4.7	$	7.8	$	(0.5	)	$	1.8	$	9.1
Strategic Services		4.4		0.1		4.5		0.9			0.4		5.8
International		11.9		3.2		15.1		28.5			—		43.6
Corporate		3.0		1.2		4.2		—			—		4.2
Total	$	22.4	$	9.2	$	31.6	$	28.9		$	2.2	$	62.7

Restructuring and Impairment Charges

For the year ended December 31, 2015, the Company recorded net restructuring charges of $22.4 million for employee termination costs. These charges primarily related to a facility closure in the International segment, one facility closure in the Variable Print segment and the reorganization of certain operations. Additionally, the Company incurred lease termination and other restructuring charges of $9.2 million for the year ended December 31, 2015. For the year ended December 31, 2015, the Company also recorded $1.0 million of net gains primarily related to the sale of previously impaired buildings and machinery and equipment associated with facility closings. The fair values of the buildings and machinery and equipment were determined to be Level 3 under the fair value hierarchy 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.

In the third quarter of 2015, as the result of the Company’s interim goodwill impairment review performed under the Company’s previous segment and reporting unit structure, the Company recorded non-cash charges of $13.7 million and $4.3 million to recognize the impairment of goodwill in the former Europe and Latin America reporting units, respectively, both of which are within the International segment. The goodwill impairment charge in the former Europe reporting unit was due to the announced reorganization of certain operations which resulted in a reduction in the estimated fair value of the reporting unit based on lower expectations of future revenue, profitability and cash flows as compared to the expectations as of prior year annual goodwill impairment test. The goodwill impairment charges were determined using Level 3 inputs, including discounted cash flow analyses, comparable marketplace fair value data and management’s assumptions in valuing the significant tangible and intangible assets.

For the year ended December 31, 2015, the Company recorded non-cash charges of $11.9 million for the impairment of intangible assets, including $9.2 million and $2.2 million related to the impairment of certain acquired customer relationship intangible assets in the previous labels reporting unit within the Variable Print segment and the Latin America reporting unit within the International segment, respectively. The impairment of the customer relationship intangible assets resulted from lower expectations of future revenue to be derived from those relationships. The impairment of the customer relationship assets was determined using Level 3 inputs and estimated based on cash flow analyses, which included management’s assumptions related to future revenues and profitability.

Other Charges

For the year ended December 31, 2015, the Company recorded charges of $2.2 million of charges for multi-employer pension plan withdrawal obligations unrelated to facility closures. The total liabilities for the withdrawal obligations associated with the Company’s decision to withdraw from all multi-employer pension plans included in accrued liabilities and other noncurrent liabilities are $4.7 million and $38.0 million, respectively, as of December 31, 2015. See Note 12, Retirement Plans, for further discussion of multi-employer pension plans.

2014	Employee Terminations		Other Restructuring Charges			Total Restructuring Charges		Impairment		Other Charges		Total
Variable Print	$	13.2	$	7.9		$	21.1	$	11.4	$	7.6	$	40.1
Strategic Services		2.8		(0.1	)		2.7		—		3.9		6.6
International		6.1		1.3			7.4		13.7		—		21.1
Corporate		2.5		2.0			4.5		—		—		4.5
Total	$	24.6	$	11.1		$	35.7	$	25.1	$	11.5	$	72.3

Restructuring and Impairment Charges

For the year ended December 31, 2014, the Company recorded net restructuring charges of $24.6 million for employee termination costs. These charges primarily related to the integration of Consolidated Graphics, including the closure of seven Consolidated Graphics facilities, as well as one additional facility closure within the Variable Print segment and the reorganization of certain operations. Additionally, the Company incurred lease termination and other restructuring charges of $11.1 million for the year ended December 31, 2014, including charges related to multi-employer pension plan withdrawal obligations as a result of facility closures. The Company also recorded $11.8 million of impairment charges primarily related to buildings and machinery and equipment associated with facility closings. The fair values of the buildings and machinery and equipment were determined to be Level 3 under the fair value hierarchy 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.

During the fourth quarter of 2014, the Company recorded non-cash impairment charges of $7.8 million and $4.1 million related to the impairment of acquired customer relationship intangible assets within the International and Variable Print segments, respectively. The impairment of the customer relationship intangible assets resulted from a decline in expected future revenue and certain customer losses in the Canada reporting unit within the International segment and the loss of certain customers in the commercial and digital print reporting unit within the Variable Print segment. During the year ended December 31, 2014, the Company also recorded non-cash charges of $1.4 million related to the impairment of trade names in the commercial and digital print reporting unit within the Variable Print segment as a result of the integration of Consolidated Graphics. The impairment of the customer relationship assets was determined using Level 3 inputs and estimated based on cash flow analyses, which included management’s assumptions related to future revenues and profitability.

Other Charges

For the year ended December 31, 2014, the Company recorded charges of $11.5 million as a result of its decision to withdraw from all multi-employer pension plans serving facilities that are currently operating. These charges for multi-employer pension plan withdrawal obligations, unrelated to facility closures, represent the Company’s best estimate of the expected settlement of these withdrawal liabilities. See Note 12, Retirement Plans, for further discussion of multi-employer pension plans.

Restructuring Reserve

The restructuring reserve as of December 31, 2016 and 2015, and changes during the year ended December 31, 2016, were as follows:

	December 31, 2015		Restructuring Charges		Foreign Exchange and Other			Cash Paid			December 31, 2016
Employee terminations	$	6.1	$	21.9	$	(3.6	)	$	(16.8	)	$	7.6
Multi-employer pension plan withdrawal obligations		12.7		0.7		—			(1.6	)		11.8
Lease terminations and other		2.3		2.8		(0.1	)		(3.4	)		1.6
Total	$	21.1	$	25.4	$	(3.7	)	$	(21.8	)	$	21.0

The current portion of restructuring reserves of $6.0 million at December 31, 2016 was included in accrued liabilities, while the long-term portion of $15.0 million, primarily related to multi-employer pension plan withdrawal obligations related to facility closures and lease termination costs, was included in other noncurrent liabilities at December 31, 2016.

The Company anticipates that payments associated with the employee terminations reflected in the above table will be substantially completed by December 2017.

Payments on all of the Company’s multi-employer pension plan withdrawal obligations are scheduled to be substantially completed by 2036. Changes based on uncertainties in these estimated withdrawal obligations could affect the ultimate charges related to multi-employer pension plan withdrawals. See Note 12, Retirement Plans, for further discussion on multi-employer pension plans.

The restructuring liabilities classified as “lease terminations and other” consisted of lease terminations, other facility closing costs and contract termination costs. Payments on certain of the lease obligations are scheduled to continue until 2018. Market conditions and the Company’s ability to sublease these properties could affect the ultimate charges related to the lease obligations. Any potential recoveries or additional charges could affect amounts reported in the Company’s financial statements.

The restructuring reserve as of December 31, 2015 and 2014, and changes during the year ended December 31, 2015, were as follows:

	December 31, 2014		Restructuring Charges		Foreign Exchange and Other			Cash Paid			December 31, 2015
Employee terminations	$	8.8	$	22.4	$	(3.5	)	$	(21.6	)	$	6.1
Multi-employer pension plan withdrawal obligations		13.5		0.5		0.1			(1.4	)		12.7
Lease terminations and other		4.3		8.7		(0.3	)		(10.4	)		2.3
Total	$	26.6	$	31.6	$	(3.7	)	$	(33.4	)	$	21.1

The current portion of restructuring reserves of $6.6 million at December 31, 2015 was included in accrued liabilities, while the long-term portion of $14.5 million, primarily related to multi-employer pension plan complete or partial withdrawal obligations related to facility closures and lease termination costs, was included in other noncurrent liabilities at December 31, 2015.

Payments associated with the employee terminations reflected in the above table were completed by December 2016.