DISCONTINUED OPERATIONS AND DISPOSITIONS:

12 Months Ended

Mar. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS AND DISPOSITIONS:

During fiscal 2019, the Company entered into a definitive agreement to sell AMS to The Interpublic Group of Companies, Inc. (“IPG”) for $2.3 billion in cash. Shareholder approval was received on September 20, 2018, and the Company began reporting the results of operations, cash flows, and the balance sheet amounts pertaining to AMS as a component of discontinued operations in the consolidated financial statements as of the second quarter of fiscal 2019. Prior to the discontinued operations classification, the AMS business was included in the AMS segment in the Company’s segment results. The sale was completed on October 1, 2018. At the closing of the transaction, the Company received total consideration of $2.3 billion ($2.3 billion stated sales price less closing adjustments, transaction costs and other items of $49.0 million). Additionally, the Company applied $230.5 million of proceeds from the sale to repay outstanding Company debt and related interest. The Company reported a gain of $1.7 billion on the sale, which is included in earnings from discontinued operations, net of tax. The gain on sale includes a $17.6 million increase in the fourth quarter of fiscal 2019 based on the final purchase price statement delivered by IPG, which is included as a post-closing receivable in other current assets in the consolidated balance sheet (see Note 6 - Other Current and Noncurrent Assets). The Company expects to collect the final purchase price in the second quarter of fiscal 2020.

Summary results of operations of AMS for the fiscal years ended March 31, 2019, 2018 and 2017, respectively, are segregated and included in earnings from discontinued operations, net of tax, in the consolidated statements of operations.

The following is a reconciliation of the major classes of line items constituting earnings from discontinued operations, net of tax (dollars in thousands):


	2019		2018		2017
Major classes of line items constituting earnings from discontinued operations, net of tax:
Revenues	$	332,185	$	697,305	$	705,487
Cost of revenue	213,512		370,040		377,710
Gross profit	118,673		327,265		327,777
Operating expenses:
Research and development	21,621		34,160		32,742
Sales and marketing	60,743		106,960		107,418
General and administrative	71,500		38,372		36,816
Gains, losses and other items, net	(1,673,636)		3,650		3,700
Total operating expenses	(1,519,772)		183,142		180,676
Earnings from discontinued operations	1,638,445		144,123		147,101
Interest expense	(5,702)		(10,131)		(7,381)
Other, net	97		(261)		(318)
Earnings from discontinued operations before income taxes	1,632,840		133,731		139,402
Income taxes	470,346		42,952		49,718
Earnings from discontinued operations, net of tax	$	1,162,494	$	90,779	$	89,684

Substantially all of the Company's interest expense was allocated to discontinued operations.

The carrying amounts of the major classes of assets and liabilities of AMS are segregated and included in assets and liabilities held for sale in the consolidated balance sheet. The following is a reconciliation of the assets and liabilities held for sale (dollars in thousands):


	March 31, 2018
Cash and cash equivalents	$	2,261
Trade accounts receivable, net	115,141

Other current assets	20,972
Property and equipment, net	124,193
Software, net	21,014
Goodwill	392,356
Purchased software licenses, net	7,502
Deferred income taxes	1,522

Other assets, net	3,815
Assets held for sale	$	688,776

Trade accounts payable	27,929
Accrued payroll and related expenses	28,725
Other accrued expenses	16,241
Deferred revenue	27,214
Income taxes payable	244
Other liabilities	3,707
Liabilities held for sale	$	104,060

The Company entered into certain agreements with AMS at the time of the sale in which services will be provided from the Company to AMS, and from AMS to the Company. The terms of these agreements are primarily 60 months from the date of sale.

Cash inflows and outflows related to the agreements are included in cash flows from operating activities in the consolidated statements of cash flows. Revenues and expenses related to the agreements are included in loss from operations in the consolidated statements of operations. The related cash inflows and outflows and revenues and expenses for the six months ended March 31, 2019 was (dollars in thousands):


	For the six months ended March 31, 2019
Cash inflows	$	19,711
Cash outflows	$	860

Revenues	$	23,852
Costs	$	7,198

The revenues include approximately $9.0 million incremental to amounts reported as LiveRamp revenues in previous periods.

Disposition of Impact email business

In fiscal 2017, the Company completed the sale of its Impact email business to Zeta Interactive for total consideration of $22.0 million, including a $4.0 million subordinated promissory note receivable with interest accruing at a rate of 6% per annum. The receivable was paid in full in fiscal 2018.

The business did not meet the requirements of a discontinued business; therefore, all financial results were included in continuing operations. The Company recorded a gain on sale of $0.3 million, included in gains, losses and other items, net. The transaction also generated a $4.3 million income tax benefit.

Revenues and loss from operations from the disposed Impact email business are shown below (dollars in thousands):


	2017
Revenues	$	20,375
Loss from operations	$	(157)