SPECIAL CHARGES (RECOVERIES)

3 Months Ended

Sep. 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 and divestiture-related costs and other similar charges.


	Three Months Ended September 30,
	2024		2023
Business Optimization Plan	$	42,503	$	—
Micro Focus Acquisition Restructuring Plan	(1,627)		6,864
Other historical restructuring plans	(293)		(117)
Divestiture-related costs	4,160		1,597
Acquisition-related costs	736		1,070
Other charges	1,657		4,380
Total	$	47,136	$	13,794

Business Optimization Plan

During the first quarter of Fiscal 2025, we made a strategic decision to align the Company’s workforce to support its growth and innovation plans (Business Optimization Plan). The Business Optimization Plan charges relate to workforce reductions. 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.

As of September 30, 2024, we expect total costs to be incurred in connection with the Business Optimization Plan to be approximately $60.0 million, of which $42.5 million has been recorded within Special charges (recoveries) within the Condensed Consolidated Statements of Income to date.

A reconciliation of the beginning and ending restructuring liability for the Business Optimization Plan, which is included within Accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets, for the three months ended September 30, 2024 is shown below.


Business Optimization Plan	Workforce reduction
Balance payable as of June 30, 2024	$	—
Accruals and adjustments	42,503
Cash payments	(26,633)
Foreign exchange and other non-cash adjustments	589
Balance payable as of September 30, 2024	$	16,459

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.

Since the inception of the Micro Focus Acquisition Restructuring Plan, $144.9 million has been recorded within Special charges (recoveries) within the Condensed 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 for the Micro Focus Acquisition Restructuring Plan, which is included within Accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets, for the three months ended September 30, 2024 is shown below.


Micro Focus Acquisition Restructuring Plan	Workforce reduction		Facility charges		Total
Balance payable as of June 30, 2024	$	11,765	$	16,326	$	28,091
Accruals and adjustments	(1,217)		971		(246)
Cash payments	(6,105)		(1,478)		(7,583)
Foreign exchange and other non-cash adjustments	141		(295)		(154)
Balance payable as of September 30, 2024	$	4,584	$	15,524	$	20,108

Divestiture-related costs

Divestiture-related costs, recorded within Special charges (recoveries), include the direct costs related to the AMC Divestiture.

Acquisition-related costs

Acquisition-related costs, recorded within Special charges (recoveries), include direct costs of potential and completed acquisitions.

Other charges (recoveries)

For the three months ended September 30, 2024, Other charges (recoveries) includes $1.6 million of other miscellaneous charges and $0.1 million related to pre-acquisition equity incentives of Zix Corporation (Zix), which upon acquisition were replaced by equivalent value cash settlements.

For the three months ended September 30, 2023, Other charges includes $2.9 million of Micro Focus compensation related charges, $1.6 million of miscellaneous professional advisory charges, $1.1 million of other miscellaneous charges and $0.4 million related to pre-acquisition equity incentives of Zix, which upon acquisition were replaced by equivalent value cash settlements.