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Discontinued Operations
 9 Months Ended
Feb. 29, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
DISCONTINUED OPERATIONS

The Company continuously evaluates its portfolio of businesses for both impairment and economic viability, as well as for possible strategic dispositions. The Company monitors the expected cash proceeds to be realized from the disposition of discontinued operations’ assets, and adjusts asset values accordingly.

During the nine month period ended February 29, 2016, there were no transactions that were classified as discontinued operations. During fiscal 2015, the Company closed or sold several operations. All of these businesses are classified as discontinued operations in the Company’s condensed consolidated financial statements.

Educational Technology and Services Business

On May 29, 2015, the Company completed the sale of substantially all of the assets comprising its former educational technology and services (“Ed Tech”) business and categorized this business as a discontinued operation. The consideration received was $577.7, of which $34.5 was deposited in escrow as security for potential indemnification and other obligations and $2.7 was received in estimated working capital adjustments. In the quarter ended February 29, 2016, the working capital adjustments from the sale of the Ed Tech business were finalized, resulting in a payment to the purchaser of $2.9. In connection with the sale of the Ed Tech business to the purchaser, the Company entered into a transition services agreement whereby the Company is providing administrative, distribution and other services to the purchaser for a minimum of 6 months and up to a maximum of 24 months. Transition service fees under this agreement are recorded as a reduction to Selling, general and administrative expenses.

As of February 29, 2016, a majority of the escrow is subject to release periodically over the next 5 months upon fulfillment of certain service levels under the transition services agreement between the purchaser and the Company and is presented as Restricted cash held in escrow on the condensed consolidated balance sheets. As of February 29, 2016, the Company had adequately fulfilled all service requirements and $17.2 had been released from Restricted cash held in escrow in accordance with the transition services agreement.

All Other Discontinued Operations

During fiscal 2015, the Company completed a restructuring of the businesses comprising its former Media, Licensing and Advertising segment and discontinued a subscription-based print magazine business, the animation and audio production business, and the game console digital content business, all of which were previously reported in such segment.

The following table summarizes the operating results of the discontinued operations for the three and nine month periods ended February 29, 2016, respectively:
 
Three months ended 
 February 29, 2016
 
Nine months ended 
 February 29, 2016
 
Ed Tech
 
All Other
 
Total
 
Ed Tech
 
All Other
 
Total
Revenues
$
—

 
$
0.4

 
$
0.4

 
$
—

 
$
0.7

 
$
0.7

Operating costs and expenses
0.3

 
0.3

 
0.6

 
1.2

 
1.0

 
2.2

Interest income (expense)
—

 
—

 
—

 
—

 
0.1

 
0.1

Gain (loss) on sale (1)
(2.9
)
 
—

 
(2.9
)
 
(2.9
)
 
—

 
(2.9
)
Earnings (loss) before income taxes
$
(3.2
)
 
$
0.1

 
$
(3.1
)
 
$
(4.1
)
 
$
(0.2
)
 
$
(4.3
)
Provision (benefit) for income taxes
(1.3
)
 
0.0

 
(1.3
)
 
(1.6
)
 
(0.1
)
 
(1.7
)
Earnings (loss) from discontinued
  operations, net of tax
$
(1.9
)
 
$
0.1

 
$
(1.8
)
 
$
(2.5
)
 
$
(0.1
)
 
$
(2.6
)

The following table summarizes the operating results of the discontinued operations for the three and nine month periods ended February 28, 2015, respectively: 
 
Three months ended 
 February 28, 2015
 
Nine months ended 
 February 28, 2015
 
Ed Tech
 
All Other
 
Total
 
Ed Tech
 
All Other
 
Total
Revenues
$
33.6

 
$
1.9

 
$
35.5

 
$
174.1

 
$
9.2

 
$
183.3

Operating costs and expenses (2)
43.4

 
2.7

 
46.1

 
148.0

 
10.8

 
158.8

Interest income (expense)
0.0

 
0.1

 
0.1

 
0.0

 
0.1

 
0.1

Earnings (loss) before income taxes
$
(9.8
)
 
$
(0.7
)
 
$
(10.5
)
 
$
26.1

 
$
(1.5
)
 
$
24.6

Provision (benefit) for income taxes
(3.8
)
 
(0.3
)
 
(4.1
)
 
10.9

 
(0.6
)
 
10.3

Earnings (loss) from discontinued
  operations, net of tax
$
(6.0
)
 
$
(0.4
)
 
$
(6.4
)
 
$
15.2

 
$
(0.9
)
 
$
14.3


(1) For the three and nine months ended February 29, 2016, the Company recognized a pretax loss of $2.9 related to the final adjustment to the working capital estimate from the sale of the Ed Tech business.

(2) For the three and nine months ended February 28, 2015, Operating costs and expenses of the continuing operations included costs related to unabsorbed overhead burden associated with the Ed Tech business of $3.8 and $11.2, respectively. These costs were included in the Overhead segment. For the three and nine months ended February 28, 2015, $0.1 and $0.2, respectively, of the costs were recorded in Cost of goods sold and $3.7 and $11.0, respectively, were recorded in Selling, general and administrative expenses.
The following table sets forth the assets and liabilities of the discontinued operations included in the condensed consolidated balance sheets of the Company:
 
February 29, 2016
 
May 31, 2015
 
February 28, 2015
Accounts receivable, net
$
0.1

 
$
2.5

 
$
29.8

Inventories, net
—

 
0.1

 
13.5

Prepaid expenses and other current assets
0.5

 
0.5

 
1.1

Current assets of discontinued operations
$
0.6

 
$
3.1

 
$
44.4

 


 


 


Property, plant and equipment, net
—

 
—

 
1.7

Prepublication costs, net
—

 
—

 
90.1

Royalty advances, net
—

 
—

 
1.0

Goodwill
—

 
—

 
22.7

Other intangibles, net
—

 
—

 
4.0

Other assets and deferred charges
—

 
—

 
0.3

Noncurrent assets of discontinued operations
$
—

 
$
—

 
$
119.8

 


 


 


Capital lease obligation
—

 
—

 
0.4

Accounts payable
—

 
0.1

 
9.9

Accrued royalties
0.1

 
0.7

 
5.2

Deferred revenue
0.1

 
0.1

 
35.2

Other accrued expenses
1.3

 
13.2

 
5.7

Current liabilities of discontinued operations
$
1.5

 
$
14.1

 
$
56.4

 
 
 
 
 
 
Capital lease obligation
—

 
—

 
0.5

Other noncurrent liabilities
—

 
—

 
0.3

Noncurrent liabilities of discontinued operations
$
—

 
$
—

 
$
0.8



As of February 29, 2016 and May 31, 2015, assets and liabilities of discontinued operations primarily related to insignificant continuing cash flows from passive activities. As of May 31, 2015, other accrued expenses within the current liabilities of discontinued operations included payables for accrued costs of $12.2 related to the sale of the Ed Tech business that had not been paid as of May 31, 2015. These costs directly relate to the discontinued operations of the Ed Tech business and a majority have been or are expected to be paid in fiscal 2016.