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Restructuring, Impairment and Transaction-Related Charges
 12 Months Ended
Dec. 31, 2019
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 years ended December 31, 2019, 2018 and 2017, as follows:

 
2019
 
2018
 
2017
Employee termination charges
$
22.2

 
$
23.0

 
$
26.4

Impairment charges
7.9

 
26.2

 
12.0

Transaction-related charges
51.6

 
8.2

 
3.1

Integration costs
3.3

 
1.3

 
—

Other restructuring charges
4.4

 
44.6

 
18.4

Total
$
89.4

 
$
103.3

 
$
59.9



The costs related to these activities have been recorded on the consolidated statements of operations as restructuring, impairment and transaction-related charges. See Note 21, “Segment Information,” for restructuring, impairment and transaction-related charges by segment.

Restructuring Charges

The Company began a restructuring program in 2010 related to eliminating excess manufacturing capacity and properly aligning its cost structure. The Company has announced a total of 45 plant closures since 2010. The Company announced the closures of the facilities located in Midland, Michigan and Shakopee, Minnesota during the year ended December 31, 2019. The Company classifies the following charges as restructuring:

•
Employee termination charges are incurred when the Company reduces its workforce through facility consolidations and separation programs.

•
Integration costs are incurred primarily for the integration of acquired companies (see Note 3, “Acquisitions and Strategic Investments,” for descriptions of the Company’s recent acquisitions).

•
Other restructuring charges are comprised of the following components and are presented net of the gains on the sale of facilities and businesses. During the year ended December 31, 2019, the Company recognized an $8.4 million gain on the sale of a business, as well as gains from the sale of the facilities located in Franklin, Kentucky and Hazleton, Pennsylvania. During the year ended December 31, 2018, the Company recognized a $32.1 million increase to the Company’s MEPPs withdrawal liability and $10.0 million in charges for certain legal matters and customer contract penalties related to the Company’s operations in Peru, as well as gains from the sale of the facilities located in Taunton, Massachusetts (Book); Dallas, Texas; and San Ixhuatepec, Mexico. During the year ended December 31, 2017, the Company recognized a $6.7 million loss on the sale of a business and a $1.2 million gain from settlements with vendors through bankruptcy proceedings for the Company's Argentina Subsidiaries, as well as gains from the sale of the facilities located in Atglen, Pennsylvania; Dickson, Tennessee; Lenexa, Kansas; East Greenville, Pennsylvania; and Marengo, Iowa.
 
Year Ended December 31,
 
2019
 
2018
 
2017
Vacant facility carrying costs and lease exit charges
$
9.5

 
$
16.9

 
$
18.1

Equipment and infrastructure removal costs
0.4

 
1.4

 
1.9

Gains on the sale of facilities
(6.1
)
 
(17.3
)
 
(7.1
)
Other restructuring activities
0.6

 
43.6

 
5.5

Other restructuring charges
$
4.4

 
$
44.6

 
$
18.4


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 $7.9 million during the year ended December 31, 2019, consisting of the following: (1) $7.6 million of impairment charges primarily for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity and strategic reduction restructuring initiatives; and (2) $0.3 million of land and building impairment charges. Additional impairment charges were recorded related to the Book business during the year ended December 31, 2019, which are disclosed in Note 4, “Discontinued Operations”.

The Company recognized impairment charges of $26.2 million during the year ended December 31, 2018, consisting of the following: (1) $16.6 million of impairment charges primarily for machinery and equipment no longer being utilized in production as a result of facility consolidations, including Waseca, Minnesota; Hazleton, Pennsylvania; and Franklin, Kentucky; as well as other capacity and strategic reduction restructuring initiatives, including $5.0 million of impairment charges for machinery and equipment in Peru; and (2) $4.6 million of land and building impairment charges, primarily related to the Franklin, Kentucky plant closure.

The Company recognized impairment charges of $12.0 million during the year ended December 31, 2017, consisting of the following: (1) $6.7 million of impairment charges primarily for machinery and equipment no longer being utilized in production as a result of facility consolidations, including Waseca, Minnesota; Columbus, Ohio; and Taunton, Massachusetts, as well as other capacity and strategic reduction restructuring initiatives.; and (2) $5.3 million of land and building impairment charges related to the Waseca, Minnesota and Taunton, Massachusetts (Book) plant closures.

The fair values of the impaired assets were determined by the Company to be Level 3 under the fair value hierarchy (see Note 15, “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 discounted cash flows. These assets were adjusted to their estimated fair values at the time of impairment. If estimated fair values subsequently decline, the carrying values of the assets are adjusted accordingly.

Transaction-Related Charges

The Company incurs transaction-related charges primarily consisting of professional service fees related to business acquisition and divestiture activities. The Company recognized transaction-related charges of $51.6 million, $8.2 million and $3.1 million during the years ended December 31, 2019, 2018 and 2017, respectively. Transaction-related charges included a $45.0 million reverse termination fee paid during the year ended December 31, 2019, in
connection with the termination of the definitive agreement pursuant to which Quad would have acquired LSC; $6.4 million related to the then proposed acquisition of LSC during the year ended December 31, 2018; and $1.0 million related to the sale of a business during the year ended December 31, 2017. The transaction-related charges were expensed as incurred in accordance with the applicable accounting guidance on business combinations.

Restructuring Reserves

Activity impacting the Company’s restructuring reserves for the years ended December 31, 2019 and 2018, was as follows:
 
Employee
Termination
Charges
 
Impairment
Charges
 
Transaction-Related
Charges (Income)
 
Integration
Costs
 
Other
Restructuring
Charges
 
Total
Balance at January 1, 2018
$
17.6

 
$
—

 
$
0.4

 
$
0.2

 
$
11.3

 
$
29.5

Expense, net
23.0

 
26.2

 
8.2

 
1.3

 
44.6

 
103.3

Cash payments, net
(28.7
)
 
—

 
(7.4
)
 
(1.1
)
 
(6.6
)
 
(43.8
)
Non-cash adjustments/reclassifications
(2.6
)
 
(26.2
)
 
—

 
(0.2
)
 
(32.2
)
 
(61.2
)
Balance at December 31, 2018
$
9.3

 
$
—

 
$
1.2

 
$
0.2

 
$
17.1

 
$
27.8

Expense, net
22.2

 
7.9

 
51.6

 
3.3

 
4.4

 
89.4

Cash payments, net
(20.0
)
 
—

 
(52.6
)
 
(3.2
)
 
(1.8
)
 
(77.6
)
Non-cash adjustments/reclassifications
(1.6
)
 
(7.9
)
 
0.6

 
(0.1
)
 
(6.1
)
 
(15.1
)
Balance at December 31, 2019
$
9.9

 
$
—

 
$
0.8

 
$
0.2

 
$
13.6

 
$
24.5



The Company’s restructuring reserves at December 31, 2019, included a short-term and a long-term component. The short-term portion included $15.8 million in other current liabilities (see Note 10, “Other Current and Long-Term Liabilities”) and $1.3 million in accounts payable in the consolidated balance sheets as the Company expects these reserves to be paid within the next twelve months. The long-term portion of $7.4 million was included in other long-term liabilities (see Note 10, “Other Current and Long-Term Liabilities”) in the consolidated balance sheets. Included in the above table is a $2.0 million non-cash reclassification to transition lease liabilities previously accounted for under ASC 420 — Exit or Disposal Cost Obligations, to operating lease obligations, in accordance with the new guidance under ASC 842. See Note 13, “Leases,” for additional accounting policy and transition disclosures.