SPECIAL CHARGES (RECOVERIES)

12 Months Ended

Jun. 30, 2024

Restructuring, Settlement and Impairment Provisions [Abstract]

Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition-related costs and other charges.


	Year Ended June 30,
	2024		2023		2022
Micro Focus Acquisition Restructuring Plan	$	74,267	$	72,284	$	—
Fiscal 2022 Restructuring Plan	340		6,744		25,778
Other historical restructuring plans	(593)		(1,628)		(3,892)
Divestiture-related costs	46,640		—		—
Acquisition-related costs	2,036		48,941		6,872
Other charges (recoveries)	12,615		42,818		18,115
Total	$	135,305	$	169,159	$	46,873

Micro Focus Acquisition Restructuring Plan

During the third quarter of Fiscal 2023, as part of the Micro Focus Acquisition, we made a strategic decision to implement restructuring activities to reduce our overall workforce and further reduce our real estate footprint around the world (Micro Focus Acquisition Restructuring Plan). The Micro Focus Acquisition Restructuring Plan charges relate to facility costs and workforce reductions. Facility costs include the accelerated amortization associated with the abandonment of right of use assets, the write-off of property and equipment and other related variable lease and exit costs. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate.

During the year ended June 30, 2024, we recognized costs of $36.4 million related to abandoned office spaces that have been early terminated or assigned to a third party, of which $19.2 million was related to the write-off of right of use assets, and $3.5 million in charges associated with the write-off of property and equipment as part of the Micro Focus Acquisition Restructuring Plan.

Since the inception of the Micro Focus Acquisition Restructuring Plan, $146.6 million has been recorded within Special charges (recoveries) within the Consolidated Statements of Income to date. We do not expect to incur any further significant charges relating to the Micro Focus Acquisition Restructuring Plan.

A reconciliation of the beginning and ending restructuring liability, which is included within Accounts payable and accrued liabilities in our Consolidated Balance Sheets, for the year ended June 30, 2024 is shown below.


Micro Focus Acquisition Restructuring Plan	Workforce reduction		Facility charges		Total
Balance payable as of June 30, 2023	$	25,816	$	7,276	$	33,092
Accruals and adjustments	37,889		17,209		55,098
Cash payments	(51,899)		(4,417)		(56,316)
Foreign exchange and other non-cash adjustments	(41)		(3,742)		(3,783)
Balance payable as of June 30, 2024	$	11,765	$	16,326	$	28,091

Fiscal 2022 Restructuring Plan

During the third quarter of Fiscal 2022, as part of our return to office planning, we made a strategic decision to implement restructuring activities to streamline our operations and further reduce our real estate footprint around the world (Fiscal 2022 Restructuring Plan). The Fiscal 2022 Restructuring Plan charges relate to facility costs and workforce reductions. Facility costs include the accelerated amortization associated with the abandonment of right of use assets, the write-off of property and equipment and other related variable lease and exit costs. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate.

During the year ended June 30, 2024, we recognized costs of $0.5 million related to abandoned office spaces that have been early terminated or assigned to a third party, of which $0.1 million was related to the write-off of right of use assets.

Since the inception of the Fiscal 2022 Restructuring Plan, $32.9 million has been recorded within Special charges (recoveries) in our Consolidated Financial Statements to date. We do not expect to incur any further significant charges relating to the Fiscal 2022 Restructuring Plan.


Fiscal 2022 Restructuring Plan	Workforce reduction		Facility charges		Total
Balance payable as of June 30, 2022	$	989	$	5,410	$	6,399
Accruals and adjustments	3,729		1,387		5,116
Cash payments	(4,212)		(3,199)		(7,411)
Foreign exchange and other non-cash adjustments	(9)		(290)		(299)
Balance payable as of June 30, 2023	$	497	$	3,308	$	3,805
Accruals and adjustments	(159)		411		252
Cash payments	(156)		(1,431)		(1,587)
Foreign exchange and other non-cash adjustments	(7)		307		300
Balance payable as of June 30, 2024	$	175	$	2,595	$	2,770

Divestiture-related costs

Divestiture-related costs, recorded within Special charges (recoveries), include the direct costs related to the AMC Divestiture. For the year ended June 30, 2024, divestiture-related costs were $46.6 million (year ended June 30, 2023 and 2022—nil).

Acquisition-related costs

Acquisition-related costs, recorded within Special charges (recoveries) include direct costs of potential and completed acquisitions. Acquisition-related costs for the year ended June 30, 2024 were $2.0 million (year ended June 30, 2023 and 2022—$48.9 million and $6.9 million, respectively).

Other charges (recoveries)

For the year ended June 30, 2024, Other charges (recoveries) includes $5.5 million of compensation related charges and $5.8 million of other miscellaneous charges, both associated with the Micro Focus Acquisition, along with $1.3 million related to pre-acquisition equity incentives of Zix, which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions and Divestitures” for more details).

For the year ended June 30, 2023, Other charges (recoveries) includes $23.0 million of severance charges, $11.8 million of other miscellaneous charges, both associated with the Micro Focus Acquisition and $8.3 million related to pre-acquisition equity incentives of Zix, which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions and Divestitures” for more details).

For the year ended June 30, 2022, Other charges (recoveries) includes $15.4 million related to pre-acquisition equity incentives of Zix, which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions and Divestitures”) and $2.7 million relating to other miscellaneous charges.