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Restructuring and Related Charges | 9 Months Ended
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Jan. 31, 2021
Restructuring and Related Charges [Abstract] |
Restructuring and Related Charges | Note 9 — Restructuring and Related Charges Business Optimization Program Beginning in fiscal year 2020, we initiated a multi-year Business Optimization Program (the “Business Optimization Program”) to drive efficiency improvement and operating savings. The following tables summarize the pre-tax restructuring charges (credits) related to this program:
|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |  |  | Total Charges |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |  |  | Incurred to Date |
Charges (Credits) by Segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research Publishing & Platforms |  | $ | 83 |  |  | $ | 66 |  |  | $ | (217 | ) |  | $ | 2,731 |  |  | $ | 3,329 |
Academic & Professional Learning |  |  | 314 |  |  |  | 1,556 |  |  |  | 1,628 |  |  |  | 5,098 |  |  |  | 12,103 |
Education Services |  |  | 71 |  |  |  | 4 |  |  |  | 294 |  |  |  | 1,721 |  |  |  | 4,068 |
Corporate Expenses |  |  | 20,193 |  |  |  | 2,167 |  |  |  | 23,247 |  |  |  | 8,267 |  |  |  | 38,265 |
Total Restructuring and Related Charges |  | $ | 20,661 |  |  | $ | 3,793 |  |  | $ | 24,952 |  |  | $ | 17,817 |  |  | $ | 57,765 |
Charges (Credits) by Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Severance and termination benefits |  | $ | 825 |  |  | $ | 2,313 |  |  | $ | 3,618 |  |  | $ | 13,600 |  |  | $ | 30,482 |
Impairment of operating lease ROU assets and property and equipment |  |  | 14,924 |  |  |  | — |  |  |  | 14,924 |  |  |  | 161 |  |  |  | 15,085 |
Acceleration of expense related to operating lease ROU assets and property and equipment |  |  | 3,378 |  |  |  | — |  |  |  | 3,378 |  |  |  | — |  |  |  | 3,378 |
Facility related charges |  |  | 1,614 |  |  |  | 1,480 |  |  |  | 3,112 |  |  |  | 2,720 |  |  |  | 7,098 |
Other activities |  |  | (80 | ) |  |  | — |  |  |  | (80 | ) |  |  | 1,336 |  |  |  | 1,722 |
Total Restructuring and Related Charges |  | $ | 20,661 |  |  | $ | 3,793 |  |  | $ | 24,952 |  |  | $ | 17,817 |  |  | $ | 57,765 |
In November 2020, in response to the COVID-19 pandemic and the Company’s successful transition to a virtual work environment, we increased use of virtual work arrangements for post-pandemic operations. As a result, we expanded the scope of the Business Optimization Program to include the exit of certain leased office space beginning in the third quarter of fiscal 2021, and the reduction of our occupancy at other facilities. We are reducing our real estate square footage occupancy by approximately 12%. These actions resulted in an initial pre-tax restructuring charge of $18.3 million in the three months ended January 31, 2021. This initial restructuring charge primarily reflects the following non-cash charges:
• | impairment charges of $14.9 million, which included the impairment of operating lease ROU assets of $10.6 million related to certain leases that will be subleased, and the related property and equipment of $4.3 million described further below, and
• | acceleration of expense of $3.4 million, which included the acceleration of rent expense associated with operating lease ROU assets of $2.9 million related to certain leases that will be abandoned or terminated and the related depreciation and amortization of property and equipment of $0.5 million.
Due to the actions taken above, we tested the operating lease ROU assets and the related property and equipment for those being subleased for recoverability by comparing the carrying value of the asset group to an estimate of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset group. Based on the results of the recoverability test, we determined that the undiscounted cash flows of the asset groups were below the carrying values. Therefore, there was an indication of impairment. We then determined the fair value of the asset groups by utilizing the present value of the estimated future cash flows attributable to the assets. The fair value of these operating lease ROU assets and the property and equipment immediately subsequent to the impairment was $7.5 million and is categorized as Level 3 within the FASB Accounting Standards Codification (“ASC”) Topic, 820, “Fair Value Measurements” fair value hierarchy. In addition, we also incurred ongoing facility-related costs associated with certain properties that resulted in additional restructuring charges of $1.6 million and $3.1 million in the three and nine months ended January 31, 2021, respectively. Other Activities for the nine months ended January 31, 2020 relate to reserves associated with the cessation of certain offerings and the impairment of certain software licenses. The following table summarizes the activity for the Business Optimization Program liability for the nine months ended January 31, 2021:
|  | April 30, 2020 |  |  | Charges (Credits) |  |  | Payments |  |  | Foreign Translation & Other Adjustments |  |  | January 31, 2021 |
Severance and termination benefits |  | $ | 17,632 |  |  | $ | 3,618 |  |  | $ | (16,825 | ) |  | $ | 589 |  |  | $ | 5,014 |
Other activities |  |  | 430 |  |  |  | (80 | ) |  |  | (262 | ) |  |  | (88 | ) |  |  | — |
Total |  | $ | 18,062 |  |  | $ | 3,538 |  |  | $ | (17,087 | ) |  | $ | 501 |  |  | $ | 5,014 |
The restructuring liability as of January 31, 2021 for accrued severance and termination benefits is reflected in Accrued Employment Costs on our Unaudited Condensed Consolidated Statement of Financial Position. Restructuring and Reinvestment Program Beginning in the year ended April 30, 2013, we initiated a global program (the “Restructuring and Reinvestment Program”) to restructure and realign our cost base with current and anticipated future market conditions. We are targeting a majority of the expected cost savings achieved to improve margins and earnings, while the remainder will be reinvested in high-growth digital business opportunities. The following tables summarize the pre-tax restructuring charges (credits) related to this program:
|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |  |  | Total Charges |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |  |  | Incurred to Date |
Charges (Credits) by Segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research Publishing & Platforms |  | $ | — |  |  | $ | (26 | ) |  | $ | (135 | ) |  | $ | 655 |  |  | $ | 26,749 |
Academic & Professional Learning |  |  | 14 |  |  |  | (15 | ) |  |  | 274 |  |  |  | 48 |  |  |  | 43,108 |
Education Services |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (103 | ) |  |  | 3,764 |
Corporate Expenses |  |  | — |  |  |  | (454 | ) |  |  | (278 | ) |  |  | (383 | ) |  |  | 95,662 |
Total Restructuring and Related Charges (Credits) |  | $ | 14 |  |  | $ | (495 | ) |  | $ | (139 | ) |  | $ | 217 |  |  | $ | 169,283 |
Charges (Credits) by Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Severance and termination benefits |  | $ | 14 |  |  | $ | (324 | ) |  | $ | (139 | ) |  | $ | 173 |  |  | $ | 115,870 |
Consulting and contract termination costs |  |  | — |  |  |  | (171 | ) |  |  | — |  |  |  | (171 | ) |  |  | 20,984 |
Other activities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 215 |  |  |  | 32,429 |
Total Restructuring and Related Charges (Credits) |  | $ | 14 |  |  | $ | (495 | ) |  | $ | (139 | ) |  | $ | 217 |  |  | $ | 169,283 |
Other activities for the nine months ended January 31, 2020 include facility related costs. The following table summarizes the activity for the Restructuring and Reinvestment Program liability for the nine months ended January 31, 2021:
|  | April 30, 2020 |  |  | (Credits) |  |  | Payments |  |  | Foreign Translation & Other Adjustments |  |  | January 31, 2021 |
Severance and termination benefits |  | $ | 1,360 |  |  | $ | (139 | ) |  | $ | (888 | ) |  | $ | 69 |  |  | $ | 402 |
Other activities |  |  | 230 |  |  |  | — |  |  |  | (145 | ) |  |  | 345 |  |  |  | 430 |
Total |  | $ | 1,590 |  |  | $ | (139 | ) |  | $ | (1,033 | ) |  | $ | 414 |  |  | $ | 832 |
The restructuring liability as of January 31, 2021 for accrued severance and termination benefits is reflected in Accrued Employment Costs on our Unaudited Condensed Consolidated Statement of Financial Position. The restructuring liability as of January 31, 2021 of $0.4 million of other activities is reflected in Other Long-Term Liabilities on our Unaudited Condensed Consolidated Statement of Financial Position and relate to facility related costs. The amount included in Other Long-Term Liabilities is expected to be paid in the year ended April 30, 2022. We currently do not anticipate any further material charges related to the Restructuring and Reinvestment Program.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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