Revenues (Tables)

12 Months Ended

May 31, 2019

Revenue from Contract with Customer [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The following table illustrates the amounts by which each income statement line item was affected by the adoption of Topic 606:



	May 31, 2019
	As reported			Adjustments			Without adoption of Topic 606
Revenues	$	1,653.9		$	12.8	⁽¹⁾	$	1,666.7
Cost of goods sold	779.9			4.0		⁽¹⁾	783.9
Selling, general and administrative expenses	781.4			1.1		⁽²⁾	782.5
Depreciation and amortization	56.1			—			56.1
Severance	10.6			—			10.6
Asset Impairments	0.9			—			0.9
Operating income (loss)	25.0			7.7			32.7
Interest (income) expense, net	(3.4		)	—			(3.4		)
Other components of net periodic benefit (cost)	(1.4		)	—			(1.4		)
Gain (Loss) on investments and other	(1.0		)	—			(1.0		)
Provision (benefit) for income taxes	10.4			2.1		⁽³⁾	12.5
Net income (loss)	15.6			5.6			21.2
Basic earnings (loss) per share:	$	0.44		$	0.16		$	0.60
Diluted earnings (loss) per share:	$	0.43		$	0.16		$	0.59

(1) - Represents an additional deferral of revenue and reduction of cost of goods sold related to the issuance of book fairs incentive

credits, partially offset by revenue recognized on incentive credits redeemed during the period.

(2) - Represents direct response advertising costs being expensed as incurred.

(3) - Represents the income tax impact of Topic 606 adjustments.

The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet at June 1, 2018 are as follows:



	As reported - May 31, 2018		Adjustments due to adoption				June 1, 2018
Accounts receivable, net	$	204.9	$	31.1		⁽¹⁾	$	236.0
Inventories, net	294.9		(1.9		)	⁽²⁾	293.0
Prepaid expenses and other current assets	66.6		(4.3		)	⁽²⁾⁽³⁾	62.3
Noncurrent deferred income taxes	25.2		16.0			⁽⁴⁾	41.2
Deferred revenue	24.7		86.8			⁽⁵⁾	111.5
Other accrued expenses	177.9		1.1			⁽⁶⁾	179.0
Retained earnings	1,065.2		(47.0		)		1,018.2

(1) - Primarily represents the reclassification of the Company’s accounting for estimated returns from a reduction to Accounts receivable, net, to a current liability within Other accrued expenses.

(2) - Represents the reclassification of a return asset from Inventory to Prepaid expenses and other current assets.

(3) - Primarily represents the adjustment for previously capitalized direct response advertising costs.

(4) - Represents the income tax impact of Topic 606 adjustments.

(5) - Represents the deferred revenue related to outstanding book fairs incentive credits as of June 1, 2018.

(6) - Represents a reduction to Other accrued expenses of $27.2 for outstanding book fair incentive credits as of June 1, 2018. This decrease was offset by a $28.3 increase for estimated returns recorded to Other accrued expenses.

Schedule of Disaggregation of Revenue by Channel

The following table presents the Company’s revenues disaggregated by region and channel during the year ended May 31:



	2019		2018
Book Clubs	$	212.4	$	224.3
Book Fairs	499.6		513.6
Trade	278.3		232.3
Total Children's Book Publishing & Distribution	990.3		970.2

Education	297.4		288.6

Major Markets⁽¹⁾	254.9		258.3
Other Markets⁽²⁾	111.3		111.3
Total International	366.2		369.6
Total Revenues	$	1,653.9	$	1,628.4

(1) - Includes Canada, UK, Australia and New Zealand.

(2) - Primarily includes markets in Asia.

Schedule of Disaggregation of Revenue by Region

The following table presents the Company’s revenues disaggregated by region and channel during the year ended May 31:



	2019		2018
Book Clubs	$	212.4	$	224.3
Book Fairs	499.6		513.6
Trade	278.3		232.3
Total Children's Book Publishing & Distribution	990.3		970.2

Education	297.4		288.6

Major Markets⁽¹⁾	254.9		258.3
Other Markets⁽²⁾	111.3		111.3
Total International	366.2		369.6
Total Revenues	$	1,653.9	$	1,628.4

(1) - Includes Canada, UK, Australia and New Zealand.

(2) - Primarily includes markets in Asia.