2016 | 2015 | 2014 | |||||||||
United States | $ | 62.1 | $ | 27.4 | $ | (8.7 | ) | ||||
Non-United States | 6.6 | 2.5 | 6.4 | ||||||||
Total | $ | 68.7 | $ | 29.9 | $ | (2.3 | ) |
2016 | 2015 | 2014 | |||||||||
Federal | |||||||||||
Current | $ | (4.0 | ) | $ | 3.3 | $ | (12.3 | ) | |||
Deferred | 19.2 | 5.3 | (8.3 | ) | |||||||
Total federal | $ | 15.2 | $ | 8.6 | $ | (20.6 | ) | ||||
State and local | |||||||||||
Current | $ | 4.1 | $ | 1.2 | $ | 4.0 | |||||
Deferred | 1.8 | 0.9 | (2.6 | ) | |||||||
Total state and local | $ | 5.9 | $ | 2.1 | $ | 1.4 | |||||
Non-United States | |||||||||||
Current | $ | 4.1 | $ | 4.7 | $ | 5.8 | |||||
Deferred | (0.5 | ) | (1.0 | ) | (2.2 | ) | |||||
Total non-United States | $ | 3.6 | $ | 3.7 | $ | 3.6 | |||||
Total | |||||||||||
Current | $ | 4.2 | $ | 9.2 | $ | (2.5 | ) | ||||
Deferred | 20.5 | 5.2 | (13.1 | ) | |||||||
Total current and deferred | $ | 24.7 | $ | 14.4 | $ | (15.6 | ) |
2016 | 2015 | 2014 | |||||||||
Computed federal statutory provision | 35.0 | % | 35.0 | % | 35.0 | % | |||||
State income tax provision, net of federal income tax benefit | 3.7 | % | 4.2 | % | 43.9 | % | |||||
Difference in effective tax rates on earnings of foreign subsidiaries | 1.2 | % | 3.7 | % | -82.8 | % | |||||
Charitable contributions | -0.4 | % | -1.1 | % | 25.4 | % | |||||
Tax credits | -0.3 | % | -0.5 | % | 5.9 | % | |||||
Valuation allowances | -0.7 | % | 2.4 | % | -16.0 | % | |||||
Uncertain Positions | 3.9 | % | 11.5 | % | 601.9 | % | |||||
Other - net | -6.4 | % | -7.0 | % | 65.0 | % | |||||
Effective tax rates | 36.0 | % | 48.2 | % | 678.3 | % | |||||
Total provision for income taxes | $ | 24.7 | $ | 14.4 | $ | (15.6 | ) |
2016 | 2015 | ||||||
Deferred tax assets | |||||||
Tax uniform capitalization | $ | 19.4 | $ | 17.0 | |||
Prepublication expenses | 13.2 | 13.1 | |||||
Inventory reserves | 25.1 | 27.2 | |||||
Allowance for doubtful accounts | 4.2 | 3.9 | |||||
Other reserves | 26.3 | 27.0 | |||||
Post-retirement, post-employment and pension obligations | 15.9 | 15.6 | |||||
Tax carryforwards | 32.2 | 29.5 | |||||
Lease accounting | (0.4 | ) | (0.4 | ) | |||
Other - net | 12.0 | 25.0 | |||||
Gross deferred tax assets | 147.9 | 157.9 | |||||
Valuation allowance | (28.4 | ) | (28.3 | ) | |||
Total deferred tax assets | $ | 119.5 | $ | 129.6 | |||
Deferred tax liabilities | |||||||
Prepaid expenses | (0.6 | ) | (0.9 | ) | |||
Depreciation and amortization | (50.4 | ) | (41.2 | ) | |||
Total deferred tax liability | $ | (51.0 | ) | $ | (42.1 | ) | |
Total net deferred tax assets | $ | 68.5 | $ | 87.5 |
Gross unrecognized benefits at May 31, 2013 | $ | 35.5 | |
Decreases related to prior year tax positions | (20.4 | ) | |
Increase related to prior year tax positions | 2.8 | ||
Increases related to current year tax positions | 2.6 | ||
Settlements during the period | (1.8 | ) | |
Lapse of statute of limitation | (4.3 | ) | |
Gross unrecognized benefits at May 31, 2014 | $ | 14.4 | |
Decreases related to prior year tax positions | (0.7 | ) | |
Increase related to prior year tax positions | — | ||
Increases related to current year tax positions | 3.6 | ||
Settlements during the period | — | ||
Lapse of statute of limitation | — | ||
Gross unrecognized benefits at May 31, 2015 | $ | 17.3 | |
Decreases related to prior year tax positions | (6.2 | ) | |
Increase related to prior year tax positions | 4.3 | ||
Increases related to current year tax positions | 5.4 | ||
Settlements during the period | (2.9 | ) | |
Lapse of statute of limitation | — | ||
Gross unrecognized benefits at May 31, 2016 | $ | 17.9 |
2016 | 2015 | 2014 | |||||||||
Advertising expense | $ | 127.3 | $ | 129.7 | $ | 123.4 | |||||
Amortization of prepublication and production costs | 26.4 | 30.4 | 32.9 | ||||||||
Foreign currency transaction gain (loss) | (0.5 | ) | 0.1 | (1.0 | ) | ||||||
Purchases related to contractual commitments for minimum print quantities | 48.7 | 68.2 | 62.8 |
2016 | 2015 | ||||||
Prepublication and production costs | $ | 42.0 | $ | 51.7 | |||
Accounts receivable reserve for returns | 32.1 | 27.9 | |||||
Unredeemed credits issued in conjunction with the Company’s school-based book club and book fair operations (included in other accrued expenses) | 8.9 | 9.3 |
2016 | 2015 | 2014 | |||||||||
Advertising expense | $ | 127.3 | $ | 129.7 | $ | 123.4 | |||||
Amortization of prepublication and production costs | 26.4 | 30.4 | 32.9 | ||||||||
Foreign currency transaction gain (loss) | (0.5 | ) | 0.1 | (1.0 | ) | ||||||
Purchases related to contractual commitments for minimum print quantities | 48.7 | 68.2 | 62.8 |
2016 | 2015 | ||||||
Prepublication and production costs | $ | 42.0 | $ | 51.7 | |||
Accounts receivable reserve for returns | 32.1 | 27.9 | |||||
Unredeemed credits issued in conjunction with the Company’s school-based book club and book fair operations (included in other accrued expenses) | 8.9 | 9.3 |
Royalty Advances | Minimum Print Quantities | ||||||
2017 | $ | 10.2 | $ | 44.8 | |||
2018 | 3.4 | 45.5 | |||||
2019 | 0.9 | 46.3 | |||||
2020 | 0.7 | 47.1 | |||||
2021 | 0.2 | 47.9 | |||||
Thereafter | 0.2 | 48.6 | |||||
Total commitments | $ | 15.6 | $ | 280.2 |
Authorization | Amount | |||
September 2010 | $ | 44.0 | (a) | |
Additional authorization July 2015 | 50.0 | |||
Less repurchases | (48.5 | ) | ||
Remaining Board authorization at May 31, 2016 | $ | 45.5 |
2016 | 2015 | ||||||
Accrued payroll, payroll taxes and benefits | $ | 44.9 | $ | 44.3 | |||
Accrued bonus and commissions | 28.2 | 32.6 | |||||
Accrued other taxes | 30.4 | 26.7 | |||||
Accrued advertising and promotions | 35.7 | 33.4 | |||||
Accrued insurance | 7.7 | 7.8 | |||||
Other accrued expenses | 29.0 | 28.8 | |||||
Total accrued expenses | $ | 175.9 | $ | 173.6 |
Operating Leases | Capital Leases | |||||
2017 | $ | 30.8 | $ | 1.4 | ||
2018 | 24.9 | 1.4 | ||||
2019 | 16.4 | 1.2 | ||||
2020 | 11.5 | 1.1 | ||||
2021 | 6.6 | 1.1 | ||||
Thereafter | 11.6 | 3.6 | ||||
Total minimum lease payments | $ | 101.8 | $ | 9.8 | ||
Less minimum sublease income and lease payments to be received | $ | 51.4 | — | |||
Minimum lease payments, net of sublease income | $ | 50.4 | $ | 9.8 | ||
Less amount representing interest | (1.2 | ) | ||||
Present value of net minimum capital lease payments | 8.6 | |||||
Less current maturities of capital lease obligations | 1.1 | |||||
Long-term capital lease obligations | $ | 7.5 |
Royalty Advances | Minimum Print Quantities | ||||||
2017 | $ | 10.2 | $ | 44.8 | |||
2018 | 3.4 | 45.5 | |||||
2019 | 0.9 | 46.3 | |||||
2020 | 0.7 | 47.1 | |||||
2021 | 0.2 | 47.9 | |||||
Thereafter | 0.2 | 48.6 | |||||
Total commitments | $ | 15.6 | $ | 280.2 |
Operating Leases | Capital Leases | |||||
2017 | $ | 30.8 | $ | 1.4 | ||
2018 | 24.9 | 1.4 | ||||
2019 | 16.4 | 1.2 | ||||
2020 | 11.5 | 1.1 | ||||
2021 | 6.6 | 1.1 | ||||
Thereafter | 11.6 | 3.6 | ||||
Total minimum lease payments | $ | 101.8 | $ | 9.8 | ||
Less minimum sublease income and lease payments to be received | $ | 51.4 | — | |||
Minimum lease payments, net of sublease income | $ | 50.4 | $ | 9.8 | ||
Less amount representing interest | (1.2 | ) | ||||
Present value of net minimum capital lease payments | 8.6 | |||||
Less current maturities of capital lease obligations | 1.1 | |||||
Long-term capital lease obligations | $ | 7.5 |
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
2016 | 2015 | ||||||||||||||
Loan Agreement: | |||||||||||||||
Revolving Loan (interest rate of n/a and n/a, respectively) | $ | — | $ | — | $ | — | $ | — | |||||||
Unsecured Lines of Credit (weighted average interest rates of 4.4% and 3.8%, respectively) | $ | 6.3 | $ | 6.3 | $ | 6.0 | $ | 6.0 | |||||||
Total debt | $ | 6.3 | $ | 6.3 | $ | 6.0 | $ | 6.0 | |||||||
Less lines of credit and current portion of long-term debt | (6.3 | ) | (6.3 | ) | (6.0 | ) | (6.0 | ) | |||||||
Total long-term debt | $ | — | $ | — | $ | — | $ | — |
2017 | $ | 6.3 | |
2018 | — | ||
2019 | — | ||
2020 | — | ||
2021 | — | ||
Thereafter | — | ||
Total debt | $ | 6.3 |
• | A Base Rate equal to the higher of (i) the prime rate, (ii) the prevailing Federal Funds rate plus 0.500% or (iii) the Eurodollar Rate for a one month interest period plus 1% plus, in each case, an applicable spread ranging from 0.18% to 0.60%, as determined by the Company’s prevailing consolidated debt to total capital ratio. |
• | A Eurodollar Rate equal to the London interbank offered rate (LIBOR) plus an applicable spread ranging from 1.18% to 1.60%, as determined by the Company’s prevailing consolidated debt to total capital ratio. |
Class A Stock | Common Stock | Preferred Stock | ||||||
Authorized | 4,000,000 | 70,000,000 | 2,000,000 | |||||
Reserved for Issuance | 500,000 | 7,732,183 | — | |||||
Outstanding | 1,656,200 | 32,657,977 | — |
2016 | 2015 | 2014 | |||||||||
Total intrinsic value of stock options exercised | $ | 14.6 | $ | 5.8 | $ | 4.6 | |||||
Stock-based compensation cost (pretax) | $ | 9.7 | $ | 11.3 | $ | 9.3 | |||||
Tax benefits related to stock-based compensation cost | $ | 1.8 | $ | 2.1 | $ | 1.7 | |||||
Weighted average grant date fair value per option | $ | 14.78 | $ | 11.41 | $ | 10.37 |
Options | Weighted Average Exercise Price | Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||
Outstanding at May 31, 2015 | 4,054,126 | $ | 30.63 | |||||||||
Granted | 474,819 | $ | 43.09 | |||||||||
Exercised | (1,476,520 | ) | $ | 31.50 | ||||||||
Expired, cancellations and forfeitures | (27,379 | ) | $ | 38.11 | ||||||||
Outstanding at May 31, 2016 | 3,025,046 | $ | 32.10 | 5.9 | $ | 23.0 | ||||||
Exercisable at May 31, 2016 | 1,859,238 | $ | 29.37 | 4.3 | $ | 18.0 |
2016 | 2015 | 2014 | |||||||||
RSUs granted | 74,536 | 66,146 | 67,670 | ||||||||
Weighted average grant date price per unit | $ | 43.10 | $ | 33.80 | $ | 30.34 |
2016 | 2015 | 2014 | ||||||||
MSPP Stock Units allocated | 58,633 | 67,027 | 827 | |||||||
Purchase price per unit | $ | 30.38 | $ | 23.79 | $ | 21.15 |
Stock Units/RSUs | Weighted Average grant date fair value | |||||
Nonvested as of May 31, 2015 | 316,561 | $ | 19.85 | |||
Granted | 133,169 | $ | 28.59 | |||
Vested | (169,575 | ) | $ | 19.96 | ||
Forfeited | (6,892 | ) | $ | 30.25 | ||
Nonvested as of May 31, 2016 | 273,263 | $ | 23.79 |
2016 | 2015 | 2014 | |||||||||
Shares issued | 43,141 | 55,501 | 57,835 | ||||||||
Weighted average purchase price per share | $ | 33.65 | $ | 31.98 | $ | 26.92 |
Ed Tech | All Other | Total | |||||||||
Revenues | $ | 0.0 | $ | 0.8 | $ | 0.8 | |||||
Operating costs and expenses | 1.5 | 1.2 | 2.7 | ||||||||
Interest income (expense) | — | 0.1 | 0.1 | ||||||||
Gain (loss) on sale (1) | (2.9 | ) | — | (2.9 | ) | ||||||
Earnings (loss) before income taxes | $ | (4.4 | ) | $ | (0.3 | ) | $ | (4.7 | ) | ||
Provision (benefit) for income taxes | (1.1 | ) | (0.1 | ) | (1.2 | ) | |||||
Earnings (loss) from discontinued operations, net of tax | $ | (3.3 | ) | $ | (0.2 | ) | $ | (3.5 | ) |
Ed Tech | All Other | Total | |||||||||
Revenues | $ | 217.4 | $ | 11.7 | $ | 229.1 | |||||
Operating costs and expenses (1) | 208.8 | 14.5 | 223.3 | ||||||||
Interest income (expense) | — | 0.1 | 0.1 | ||||||||
Gain (loss) on sale | 454.0 | — | 454.0 | ||||||||
Earnings (loss) before income taxes | $ | 462.6 | $ | (2.7 | ) | $ | 459.9 | ||||
Provision (benefit) for income taxes | 181.8 | (1.0 | ) | 180.8 | |||||||
Earnings (loss) from discontinued operations, net of tax | $ | 280.8 | $ | (1.7 | ) | $ | 279.1 |
Ed Tech | All Other | Total | |||||||||
Revenues | $ | 246.4 | $ | 14.4 | $ | 260.8 | |||||
Operating costs and expenses (1) | 193.0 | 15.0 | 208.0 | ||||||||
Interest income (expense) | — | 0.1 | 0.1 | ||||||||
Earnings (loss) before income taxes | $ | 53.4 | $ | (0.5 | ) | $ | 52.9 | ||||
Provision (benefit) for income taxes | 22.0 | (0.2 | ) | 21.8 | |||||||
Earnings (loss) from discontinued operations, net of tax | $ | 31.4 | $ | (0.3 | ) | $ | 31.1 |
2016 | 2015 | ||||||
Accounts receivable, net | $ | 0.0 | $ | 2.5 | |||
Inventories, net | — | 0.1 | |||||
Prepaid expenses and other current assets | 0.5 | 0.5 | |||||
Current assets of discontinued operations | $ | 0.5 | $ | 3.1 | |||
Accounts payable | 0.0 | 0.1 | |||||
Accrued royalties | 0.0 | 0.7 | |||||
Deferred revenue | — | 0.1 | |||||
Other accrued expenses | 1.2 | 13.2 | |||||
Current liabilities of discontinued operations | $ | 1.2 | $ | 14.1 |
2016 | 2015 | 2014 | |||||||||
Earnings (loss) from continuing operations attributable to Class A and Common Shares | $ | 43.9 | $ | 15.4 | $ | 13.2 | |||||
Earnings (loss) from discontinued operations attributable to Class A and Common Shares, net of tax | (3.5 | ) | 279.1 | 31.1 | |||||||
Net income (loss) attributable to Class A and Common Shares | 40.4 | 294.5 | 44.3 | ||||||||
Weighted average Shares of Class A Stock and Common Stock outstanding for basic earnings (loss) per share (in millions) | 34.1 | 32.7 | 32.0 | ||||||||
Dilutive effect of Class A Stock and Common Stock potentially issuable pursuant to stock-based compensation plans (in millions) | 0.8 | 0.7 | 0.5 | ||||||||
Adjusted weighted average Shares of Class A Stock and Common Stock outstanding for diluted earnings (loss) per share (in millions) | 34.9 | 33.4 | 32.5 | ||||||||
Earnings (loss) per share of Class A Stock and Common Stock | |||||||||||
Basic earnings (loss) per share: | |||||||||||
Earnings (loss) from continuing operations | $ | 1.29 | $ | 0.47 | $ | 0.42 | |||||
Earnings (loss) from discontinued operations, net of tax | $ | (0.11 | ) | $ | 8.53 | $ | 0.97 | ||||
Net income (loss) | $ | 1.18 | $ | 9.00 | $ | 1.39 | |||||
Diluted earnings (loss) per share: | |||||||||||
Earnings (loss) from continuing operations | $ | 1.26 | $ | 0.46 | $ | 0.41 | |||||
Earnings (loss) from discontinued operations, net of tax | $ | (0.10 | ) | $ | 8.34 | $ | 0.95 | ||||
Net income (loss) | $ | 1.16 | $ | 8.80 | $ | 1.36 |
Net carrying value as of | Fair value measured and recognized using | Impairment losses for fiscal year ended | Additions due to other investments and acquisitions | ||||||||||||||||||||
May 31, 2016 | Level 1 | Level 2 | Level 3 | May 31, 2016 | |||||||||||||||||||
Property, plant and equipment, net | $ | — | $ | — | $ | — | $ | — | $ | 7.5 | $ | — | |||||||||||
Prepublication assets | — | — | — | — | 6.9 | — | |||||||||||||||||
Intangible assets | 1.9 | — | — | 2.4 | — | 2.4 |
Net carrying value as of | Fair value measured and recognized using | Impairment losses for fiscal year ended | Additions due to other investments and acquisitions | ||||||||||||||||||||
May 31, 2015 | Level 1 | Level 2 | Level 3 | May 31, 2015 | |||||||||||||||||||
Property, plant and equipment, net | $ | — | $ | — | $ | — | $ | — | $ | 7.5 | $ | — | |||||||||||
Goodwill | — | — | — | — | 5.4 | — | |||||||||||||||||
Prepublication assets | — | — | — | — | 2.9 | — |
Net carrying value as of | Fair value measured and recognized using | Impairment losses for fiscal year ended | Additions due to other investments and acquisitions | ||||||||||||||||||||
May 31, 2014 | Level 1 | Level 2 | Level 3 | May 31, 2014 | |||||||||||||||||||
Goodwill | $ | — | $ | — | $ | — | $ | — | $ | 13.4 | $ | — | |||||||||||
Property, plant and equipment, net | — | — | — | — | 7.6 | — | |||||||||||||||||
Prepublication assets | — | — | — | — | 5.7 | — | |||||||||||||||||
Investments | — | — | — | — | 5.8 | 1.0 |
• | Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. |
• | Level 2 Observable inputs other than unadjusted quoted prices in active markets for identical assets or liabilities such as |
◦ | Quoted prices for similar assets or liabilities in active markets |
◦ | Quoted prices for identical or similar assets or liabilities in inactive markets |
◦ | Inputs other than quoted prices that are observable for the asset or liability |
◦ | Inputs that are derived principally from or corroborated by observable market data by correlation or other means |
• | Level 3 Unobservable inputs in which there is little or no market data available, which are significant to the fair value measurement and require the Company to develop its own assumptions. |
• | Long-lived assets |
• | Investments |
• | Assets acquired in a business combination |
• | Goodwill and indefinite-lived intangible assets |
• | Long-lived assets held for sale |
Net carrying value as of | Fair value measured and recognized using | Impairment losses for fiscal year ended | Additions due to other investments and acquisitions | ||||||||||||||||||||
May 31, 2016 | Level 1 | Level 2 | Level 3 | May 31, 2016 | |||||||||||||||||||
Property, plant and equipment, net | $ | — | $ | — | $ | — | $ | — | $ | 7.5 | $ | — | |||||||||||
Prepublication assets | — | — | — | — | 6.9 | — | |||||||||||||||||
Intangible assets | 1.9 | — | — | 2.4 | — | 2.4 |
Net carrying value as of | Fair value measured and recognized using | Impairment losses for fiscal year ended | Additions due to other investments and acquisitions | ||||||||||||||||||||
May 31, 2015 | Level 1 | Level 2 | Level 3 | May 31, 2015 | |||||||||||||||||||
Property, plant and equipment, net | $ | — | $ | — | $ | — | $ | — | $ | 7.5 | $ | — | |||||||||||
Goodwill | — | — | — | — | 5.4 | — | |||||||||||||||||
Prepublication assets | — | — | — | — | 2.9 | — |
Net carrying value as of | Fair value measured and recognized using | Impairment losses for fiscal year ended | Additions due to other investments and acquisitions | ||||||||||||||||||||
May 31, 2014 | Level 1 | Level 2 | Level 3 | May 31, 2014 | |||||||||||||||||||
Goodwill | $ | — | $ | — | $ | — | $ | — | $ | 13.4 | $ | — | |||||||||||
Property, plant and equipment, net | — | — | — | — | 7.6 | — | |||||||||||||||||
Prepublication assets | — | — | — | — | 5.7 | — | |||||||||||||||||
Investments | — | — | — | — | 5.8 | 1.0 |
2016 | 2015 | ||||||
Gross beginning balance | $ | 155.9 | $ | 156.0 | |||
Accumulated impairment | (39.6 | ) | (34.2 | ) | |||
Beginning balance | 116.3 | 121.8 | |||||
Impairment charge (1) | — | (5.4 | ) | ||||
Foreign currency translation | (0.1 | ) | (0.1 | ) | |||
Gross ending balance | 155.8 | 155.9 | |||||
Accumulated impairment | (39.6 | ) | (39.6 | ) | |||
Ending balance | $ | 116.2 | $ | 116.3 |
2016 | 2015 | ||||||
Other intangibles subject to amortization - beginning balance | $ | 4.7 | $ | 5.8 | |||
Additions due to acquisition | 2.4 | 0.8 | |||||
Amortization expense | (2.2 | ) | (1.9 | ) | |||
Foreign currency translation | (0.2 | ) | — | ||||
Total other intangibles subject to amortization, net accumulated amortization of $19.5 and $17.3, respectively | $ | 4.7 | $ | 4.7 | |||
Total other intangibles not subject to amortization | $ | 2.1 | $ | 2.1 | |||
Total other intangibles | $ | 6.8 | $ | 6.8 |
2017 | $ | 2.4 | |
2018 | 0.7 | ||
2019 | 0.6 | ||
2020 | 0.6 | ||
2021 | 0.1 |
Stock Units/RSUs | Weighted Average grant date fair value | |||||
Nonvested as of May 31, 2015 | 316,561 | $ | 19.85 | |||
Granted | 133,169 | $ | 28.59 | |||
Vested | (169,575 | ) | $ | 19.96 | ||
Forfeited | (6,892 | ) | $ | 30.25 | ||
Nonvested as of May 31, 2016 | 273,263 | $ | 23.79 |
• | Accounts receivable reserves for returns |
• | Accounts receivable allowance for doubtful accounts |
• | Pension and other post-retirement obligations |
• | Uncertain tax positions |
• | Inventory reserves |
• | Cost of goods sold from book fair operations during interim periods determined based on estimated gross profit rates |
• | Sales taxes |
• | Royalty advance reserves |
• | Customer reward programs |
• | Impairment testing for goodwill for assessment and measurement, intangibles and other long-lived assets and investments. |
• | Assets and liabilities acquired in business combinations. |
2016 | 2015 | 2014 | |||||||||
Estimated fair value of stock options granted | $ | 14.78 | $ | 11.41 | $ | 10.37 | |||||
Assumptions: | |||||||||||
Expected dividend yield | 1.4 | % | 1.8 | % | 1.7 | % | |||||
Expected stock price volatility | 38.2 | % | 38.2 | % | 38.6 | % | |||||
Risk-free interest rate | 1.9 | % | 2.2 | % | 2.2 | % | |||||
Average expected life of options | 6 years | 6 years | 6 years |
2016 | 2015 | ||||||
Accrued payroll, payroll taxes and benefits | $ | 44.9 | $ | 44.3 | |||
Accrued bonus and commissions | 28.2 | 32.6 | |||||
Accrued other taxes | 30.4 | 26.7 | |||||
Accrued advertising and promotions | 35.7 | 33.4 | |||||
Accrued insurance | 7.7 | 7.8 | |||||
Other accrued expenses | 29.0 | 28.8 | |||||
Total accrued expenses | $ | 175.9 | $ | 173.6 |
Pension Plans | Post-Retirement Benefits | ||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Weighted average assumptions used to determine benefit obligations: | |||||||||||||||||
Discount rate | 3.5 | % | 3.7 | % | 4.1 | % | 3.7 | % | 3.8 | % | 4.0 | % | |||||
Rate of compensation increase | 3.8 | % | 4.1 | % | 4.2 | % | — | — | — | ||||||||
Weighted average assumptions used to determine net periodic benefit cost: | |||||||||||||||||
Discount rate | 3.7 | % | 4.1 | % | 4.0 | % | 3.8 | % | 4.0 | % | 3.9 | % | |||||
Expected long-term return on plan assets | 4.7 | % | 5.4 | % | 7.5 | % | — | — | — | ||||||||
Rate of compensation increase | 4.1 | % | 4.2 | % | 4.4 | % | — | — | — |
Pension Plans | Post-Retirement Benefits | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Change in benefit obligation: | |||||||||||||||
Benefit obligation at beginning of year | $ | 173.1 | $ | 180.5 | $ | 36.3 | $ | 33.4 | |||||||
Service cost | — | — | 0.0 | 0.0 | |||||||||||
Interest cost | 6.1 | 6.7 | 1.4 | 1.3 | |||||||||||
Plan participants’ contributions | — | — | 0.3 | 0.3 | |||||||||||
Actuarial losses (gains) | (0.4 | ) | 11.4 | 3.0 | 3.8 | ||||||||||
Foreign currency translation | (2.3 | ) | (3.6 | ) | — | — | |||||||||
Settlement | — | (14.4 | ) | — | — | ||||||||||
Curtailment due to sale of segment | — | 0.1 | — | — | |||||||||||
Benefits paid, including expenses | (11.7 | ) | (7.6 | ) | (2.7 | ) | (2.5 | ) | |||||||
Benefit obligation at end of year | $ | 164.8 | $ | 173.1 | $ | 38.3 | $ | 36.3 |
Pension Plans | Post-Retirement Benefits | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Change in plan assets: | |||||||||||||||
Fair value of plan assets at beginning of year | $ | 173.7 | $ | 188.6 | $ | — | $ | — | |||||||
Actual return on plan assets | 2.6 | 8.5 | — | — | |||||||||||
Employer contributions | 1.3 | 1.3 | 2.4 | 2.2 | |||||||||||
Settlement | — | (14.4 | ) | — | — | ||||||||||
Benefits paid, including expenses | (11.7 | ) | (7.6 | ) | (2.7 | ) | (2.5 | ) | |||||||
Plan participants’ contributions | — | — | 0.3 | 0.3 | |||||||||||
Foreign currency translation | (1.7 | ) | (2.7 | ) | — | — | |||||||||
Fair value of plan assets at end of year | $ | 164.2 | $ | 173.7 | $ | — | $ | — |
Pension Plans | Post-Retirement Benefits | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Non-current assets | $ | 10.1 | $ | 13.3 | $ | — | $ | — | |||||||
Current liabilities | — | — | (2.6 | ) | (2.6 | ) | |||||||||
Non-current liabilities | (10.7 | ) | (12.6 | ) | (35.7 | ) | (33.7 | ) | |||||||
Net funded balance | $ | (0.6 | ) | $ | 0.7 | $ | (38.3 | ) | $ | (36.3 | ) |
2016 | 2015 | ||||||||||||||||||||||
Pension Plans | Post - Retirement Benefits | Total | Pension Plans | Post - Retirement Benefits | Total | ||||||||||||||||||
Net actuarial gain (loss) | $ | (57.2 | ) | $ | (11.9 | ) | $ | (69.1 | ) | $ | (54.0 | ) | $ | (11.7 | ) | $ | (65.7 | ) | |||||
Net prior service credit | — | — | — | — | (0.0 | ) | (0.0 | ) | |||||||||||||||
Net amount recognized in Accumulated other comprehensive income (loss) | $ | (57.2 | ) | $ | (11.9 | ) | $ | (69.1 | ) | $ | (54.0 | ) | $ | (11.7 | ) | $ | (65.7 | ) |
2016 | 2015 | ||||||
Projected benefit obligations | $ | 164.8 | $ | 173.1 | |||
Accumulated benefit obligations | 164.1 | 172.2 | |||||
Fair value of plan assets | 164.2 | 173.7 |
Pension Plans | Post - Retirement Benefits | ||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||
Components of net periodic (benefit) cost: | |||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | — | $ | 0.0 | $ | 0.0 | $ | 0.0 | |||||||||||
Interest cost | 6.1 | 6.7 | 7.2 | 1.4 | 1.3 | 1.3 | |||||||||||||||||
Expected return on assets | (7.8 | ) | (9.3 | ) | (12.7 | ) | — | — | — | ||||||||||||||
Net amortization and deferrals | — | — | — | (0.1 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||
Lump sum settlement charge | — | 4.3 | 1.7 | — | — | — | |||||||||||||||||
Amortization of net actuarial loss | 1.7 | 1.4 | 1.8 | 2.8 | 1.3 | 2.2 | |||||||||||||||||
Net periodic (benefit) cost | $ | (0.0 | ) | $ | 3.1 | $ | (2.0 | ) | $ | 4.1 | $ | 2.4 | $ | 3.3 |
2016 | 2015 | ||||
Equity securities | 29.8 | % | 29.2 | % | |
Debt securities | 63.0 | % | 64.6 | % | |
Real estate | 1.3 | % | 1.3 | % | |
Other | 5.9 | % | 4.9 | % | |
100.0 | % | 100.0 | % |
U.S. Pension Plan | UK Pension Plan | ||||
Equity | 30 | % | 40 | % | |
Debt and cash equivalents | 70 | % | 30 | % | |
Real estate and other | 0 | % | 30 | % | |
100 | % | 100 | % |
Assets at Fair Value as of May 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash and cash equivalents | $ | 4.2 | $ | — | $ | — | $ | 4.2 | |||||||
Equity securities: | |||||||||||||||
U.S. (1) | 34.1 | — | — | 34.1 | |||||||||||
International (2) | 4.2 | 10.7 | — | 14.9 | |||||||||||
Pooled, Common and Collective Funds (3) | — | 93.5 | — | 93.5 | |||||||||||
Fixed Income (4) | — | 9.8 | — | 9.8 | |||||||||||
Annuities | — | — | 5.5 | 5.5 | |||||||||||
Real estate (5) | — | 2.2 | — | 2.2 | |||||||||||
Total | $ | 42.5 | $ | 116.2 | $ | 5.5 | $ | 164.2 |
Assets at Fair Value as of May 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash and cash equivalents | $ | 2.4 | $ | — | $ | — | $ | 2.4 | |||||||
Equity securities: | |||||||||||||||
U.S. (1) | 34.4 | — | — | 34.4 | |||||||||||
International (2) | 4.7 | 11.7 | — | 16.4 | |||||||||||
Pooled, Common and Collective Funds (3) | — | 101.8 | — | 101.8 | |||||||||||
Fixed Income (4) | — | 10.4 | — | 10.4 | |||||||||||
Annuities | — | — | 6.1 | 6.1 | |||||||||||
Real estate (5) | — | 2.2 | — | 2.2 | |||||||||||
Total | $ | 41.5 | $ | 126.1 | $ | 6.1 | $ | 173.7 |
(1) | Funds which invest in a diversified portfolio of publicly traded U.S. common stocks of large-cap, medium-cap and small-cap companies. There are no restrictions on these investments. |
(2) | Funds which invest in a diversified portfolio of publicly traded common stock of non-U.S. companies, primarily in Europe and Asia. There are no restrictions on these investments. |
(3) | Funds which invest in bond index funds available to certain qualified retirement plans but not traded openly in any public exchanges. |
(4) | Funds which invest in a diversified portfolio of publicly traded government bonds, corporate bonds and mortgage-backed securities. There are no restrictions on these investments. |
(5) | Represents assets of a non-U.S. entity plan invested in a fund whose underlying investments are comprised of properties. The fund has publicly available quoted market prices and there are no restrictions on these investments. |
Balance at May 31, 2014 | $ | 6.2 | |
Actual Return on Plan Assets: | |||
Relating to assets still held at May 31, 2015 | 0.7 | ||
Relating to assets sold during the year | — | ||
Purchases, sales and settlements, net | (0.3 | ) | |
Transfers in and/or out of Level 3 | — | ||
Foreign currency translation | (0.5 | ) | |
Balance at May 31, 2015 | $ | 6.1 | |
Actual Return on Plan Assets: | |||
Relating to assets still held at May 31, 2016 | 0.0 | ||
Relating to assets sold during the year | — | ||
Purchases, sales and settlements, net | (0.3 | ) | |
Transfers in and/or out of Level 3 | — | ||
Foreign currency translation | (0.3 | ) | |
Balance at May 31, 2016 | $ | 5.5 |
Post - Retirement | |||||||||||
Pension Benefits | Benefit Payments | Medicare Subsidy Receipts | |||||||||
2017 | $ | 15.6 | $ | 2.9 | $ | 0.3 | |||||
2018 | 10.9 | 2.8 | 0.3 | ||||||||
2019 | 10.7 | 2.8 | 0.3 | ||||||||
2020 | 10.2 | 2.7 | 0.3 | ||||||||
2021 | 9.8 | 2.7 | 0.3 | ||||||||
2022-2026 | 46.8 | 13.4 | 1.6 |
2016 | 2015 | ||||
Health care cost trend rate assumed for the next fiscal year | 7.0 | % | 7.0 | % | |
Rate to which the cost trend is assumed to decline (the ultimate trend rate) | 5.0 | % | 5.0 | % | |
Year that the rate reaches the ultimate trend rate | 2024 | 2022 |
2016 | 2015 | ||||||
Total service and interest cost - 1% increase | $ | 0.2 | $ | 0.1 | |||
Total service and interest cost - 1% decrease | (0.1 | ) | (0.1 | ) | |||
Post-retirement benefit obligation - 1% increase | 4.3 | 4.2 | |||||
Post-retirement benefit obligation - 1% decrease | (3.7 | ) | (3.6 | ) |
2016 | 2015 | ||||||
Land | $ | 77.4 | $ | 77.2 | |||
Buildings | 240.4 | 241.0 | |||||
Capitalized software | 196.0 | 204.9 | |||||
Furniture, fixtures and equipment | 221.5 | 219.8 | |||||
Building and leasehold improvements | 141.7 | 162.2 | |||||
Total at cost | 877.0 | 905.1 | |||||
Less: Accumulated depreciation and amortization | (439.4 | ) | (465.4 | ) | |||
Property, plant and equipment, net | $ | 437.6 | $ | 439.7 |
2016 | 2015 | ||||||
Land | $ | 77.4 | $ | 77.2 | |||
Buildings | 240.4 | 241.0 | |||||
Capitalized software | 196.0 | 204.9 | |||||
Furniture, fixtures and equipment | 221.5 | 219.8 | |||||
Building and leasehold improvements | 141.7 | 162.2 | |||||
Total at cost | 877.0 | 905.1 | |||||
Less: Accumulated depreciation and amortization | (439.4 | ) | (465.4 | ) | |||
Property, plant and equipment, net | $ | 437.6 | $ | 439.7 |
2016 | 2015 | 2014 | |||||||||||||||||||||
Pension Plans | Post - Retirement Benefits | Pension Plans | Post - Retirement Benefits | Pension Plans | Post - Retirement Benefits | ||||||||||||||||||
Service cost | $ | — | $ | 0.0 | $ | — | $ | 0.0 | $ | — | $ | 0.0 | |||||||||||
Net amortization and deferrals | — | (0.1 | ) | — | (0.2 | ) | — | (0.2 | ) | ||||||||||||||
Lump sum settlement charge | — | — | 4.3 | — | 1.7 | — | |||||||||||||||||
Amortization of net actuarial loss | 1.7 | 2.8 | 1.4 | 1.3 | 1.8 | 2.2 | |||||||||||||||||
Tax benefit | (0.3 | ) | (1.1 | ) | (2.0 | ) | (0.4 | ) | (1.4 | ) | (0.8 | ) | |||||||||||
Amounts reclassified from Accumulated other comprehensive income (loss) | $ | 1.4 | $ | 1.6 | $ | 3.7 | $ | 0.7 | $ | 2.1 | $ | 1.2 |
2016 | 2015 | ||||||
Beginning balance | $ | 2.0 | $ | 1.2 | |||
Accruals | 11.9 | 9.6 | |||||
Payments | (9.5 | ) | (8.8 | ) | |||
Ending balance | $ | 4.4 | $ | 2.0 |
2016 | 2015 | ||||||
Projected benefit obligations | $ | 164.8 | $ | 173.1 | |||
Accumulated benefit obligations | 164.1 | 172.2 | |||||
Fair value of plan assets | 164.2 | 173.7 |
Foreign currency translation adjustments | Pension Plans | Post - Retirement Benefits | Total | ||||||||||||
Balance at May 31, 2014(1) | $ | (16.6 | ) | $ | (33.2 | ) | $ | (5.4 | ) | $ | (55.2 | ) | |||
Other comprehensive income (loss) before reclassifications | (15.3 | ) | (8.5 | ) | $ | (2.3 | ) | $ | (26.1 | ) | |||||
Less: amount reclassified from Accumulated other comprehensive income (loss) (net of taxes) | |||||||||||||||
Lump Sum Settlement charge | — | 2.6 | — | 2.6 | |||||||||||
Amortization of net actuarial loss | — | 1.1 | 0.8 | 1.9 | |||||||||||
Net prior service credit | — | — | (0.2 | ) | (0.2 | ) | |||||||||
Other comprehensive income (loss) | (15.3 | ) | (4.8 | ) | (1.7 | ) | (21.8 | ) | |||||||
Balance at May 31, 2015(1) | $ | (31.9 | ) | $ | (38.0 | ) | $ | (7.1 | ) | $ | (77.0 | ) | |||
Other comprehensive income (loss) before reclassifications | $ | (8.1 | ) | $ | (2.8 | ) | $ | (1.8 | ) | $ | (12.7 | ) | |||
Less: amount reclassified from Accumulated other comprehensive income (loss) (net of taxes) | |||||||||||||||
Lump Sum Settlement charge | — | — | — | — | |||||||||||
Amortization of net actuarial loss | — | 1.4 | 1.6 | 3.0 | |||||||||||
Net prior service credit | — | — | (0.0 | ) | (0.0 | ) | |||||||||
Other comprehensive income (loss) | (8.1 | ) | (1.4 | ) | (0.2 | ) | (9.7 | ) | |||||||
Balance at May 31, 2016 (1) | $ | (40.0 | ) | $ | (39.4 | ) | $ | (7.3 | ) | $ | (86.7 | ) |
2016 | 2015 | ||||
Equity securities | 29.8 | % | 29.2 | % | |
Debt securities | 63.0 | % | 64.6 | % | |
Real estate | 1.3 | % | 1.3 | % | |
Other | 5.9 | % | 4.9 | % | |
100.0 | % | 100.0 | % |
U.S. Pension Plan | UK Pension Plan | ||||
Equity | 30 | % | 40 | % | |
Debt and cash equivalents | 70 | % | 30 | % | |
Real estate and other | 0 | % | 30 | % | |
100 | % | 100 | % |
Assets at Fair Value as of May 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash and cash equivalents | $ | 4.2 | $ | — | $ | — | $ | 4.2 | |||||||
Equity securities: | |||||||||||||||
U.S. (1) | 34.1 | — | — | 34.1 | |||||||||||
International (2) | 4.2 | 10.7 | — | 14.9 | |||||||||||
Pooled, Common and Collective Funds (3) | — | 93.5 | — | 93.5 | |||||||||||
Fixed Income (4) | — | 9.8 | — | 9.8 | |||||||||||
Annuities | — | — | 5.5 | 5.5 | |||||||||||
Real estate (5) | — | 2.2 | — | 2.2 | |||||||||||
Total | $ | 42.5 | $ | 116.2 | $ | 5.5 | $ | 164.2 |
Assets at Fair Value as of May 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash and cash equivalents | $ | 2.4 | $ | — | $ | — | $ | 2.4 | |||||||
Equity securities: | |||||||||||||||
U.S. (1) | 34.4 | — | — | 34.4 | |||||||||||
International (2) | 4.7 | 11.7 | — | 16.4 | |||||||||||
Pooled, Common and Collective Funds (3) | — | 101.8 | — | 101.8 | |||||||||||
Fixed Income (4) | — | 10.4 | — | 10.4 | |||||||||||
Annuities | — | — | 6.1 | 6.1 | |||||||||||
Real estate (5) | — | 2.2 | — | 2.2 | |||||||||||
Total | $ | 41.5 | $ | 126.1 | $ | 6.1 | $ | 173.7 |
(1) | Funds which invest in a diversified portfolio of publicly traded U.S. common stocks of large-cap, medium-cap and small-cap companies. There are no restrictions on these investments. |
(2) | Funds which invest in a diversified portfolio of publicly traded common stock of non-U.S. companies, primarily in Europe and Asia. There are no restrictions on these investments. |
(3) | Funds which invest in bond index funds available to certain qualified retirement plans but not traded openly in any public exchanges. |
(4) | Funds which invest in a diversified portfolio of publicly traded government bonds, corporate bonds and mortgage-backed securities. There are no restrictions on these investments. |
(5) | Represents assets of a non-U.S. entity plan invested in a fund whose underlying investments are comprised of properties. The fund has publicly available quoted market prices and there are no restrictions on these investments. |
Pension Plans | Post-Retirement Benefits | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Non-current assets | $ | 10.1 | $ | 13.3 | $ | — | $ | — | |||||||
Current liabilities | — | — | (2.6 | ) | (2.6 | ) | |||||||||
Non-current liabilities | (10.7 | ) | (12.6 | ) | (35.7 | ) | (33.7 | ) | |||||||
Net funded balance | $ | (0.6 | ) | $ | 0.7 | $ | (38.3 | ) | $ | (36.3 | ) |
2016 | 2015 | ||||||||||||||||||||||
Pension Plans | Post - Retirement Benefits | Total | Pension Plans | Post - Retirement Benefits | Total | ||||||||||||||||||
Net actuarial gain (loss) | $ | (57.2 | ) | $ | (11.9 | ) | $ | (69.1 | ) | $ | (54.0 | ) | $ | (11.7 | ) | $ | (65.7 | ) | |||||
Net prior service credit | — | — | — | — | (0.0 | ) | (0.0 | ) | |||||||||||||||
Net amount recognized in Accumulated other comprehensive income (loss) | $ | (57.2 | ) | $ | (11.9 | ) | $ | (69.1 | ) | $ | (54.0 | ) | $ | (11.7 | ) | $ | (65.7 | ) |
Pension Plans | Post-Retirement Benefits | ||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Weighted average assumptions used to determine benefit obligations: | |||||||||||||||||
Discount rate | 3.5 | % | 3.7 | % | 4.1 | % | 3.7 | % | 3.8 | % | 4.0 | % | |||||
Rate of compensation increase | 3.8 | % | 4.1 | % | 4.2 | % | — | — | — | ||||||||
Weighted average assumptions used to determine net periodic benefit cost: | |||||||||||||||||
Discount rate | 3.7 | % | 4.1 | % | 4.0 | % | 3.8 | % | 4.0 | % | 3.9 | % | |||||
Expected long-term return on plan assets | 4.7 | % | 5.4 | % | 7.5 | % | — | — | — | ||||||||
Rate of compensation increase | 4.1 | % | 4.2 | % | 4.4 | % | — | — | — |
Pension Plans | Post-Retirement Benefits | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Change in plan assets: | |||||||||||||||
Fair value of plan assets at beginning of year | $ | 173.7 | $ | 188.6 | $ | — | $ | — | |||||||
Actual return on plan assets | 2.6 | 8.5 | — | — | |||||||||||
Employer contributions | 1.3 | 1.3 | 2.4 | 2.2 | |||||||||||
Settlement | — | (14.4 | ) | — | — | ||||||||||
Benefits paid, including expenses | (11.7 | ) | (7.6 | ) | (2.7 | ) | (2.5 | ) | |||||||
Plan participants’ contributions | — | — | 0.3 | 0.3 | |||||||||||
Foreign currency translation | (1.7 | ) | (2.7 | ) | — | — | |||||||||
Fair value of plan assets at end of year | $ | 164.2 | $ | 173.7 | $ | — | $ | — |
Pension Plans | Post-Retirement Benefits | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Change in benefit obligation: | |||||||||||||||
Benefit obligation at beginning of year | $ | 173.1 | $ | 180.5 | $ | 36.3 | $ | 33.4 | |||||||
Service cost | — | — | 0.0 | 0.0 | |||||||||||
Interest cost | 6.1 | 6.7 | 1.4 | 1.3 | |||||||||||
Plan participants’ contributions | — | — | 0.3 | 0.3 | |||||||||||
Actuarial losses (gains) | (0.4 | ) | 11.4 | 3.0 | 3.8 | ||||||||||
Foreign currency translation | (2.3 | ) | (3.6 | ) | — | — | |||||||||
Settlement | — | (14.4 | ) | — | — | ||||||||||
Curtailment due to sale of segment | — | 0.1 | — | — | |||||||||||
Benefits paid, including expenses | (11.7 | ) | (7.6 | ) | (2.7 | ) | (2.5 | ) | |||||||
Benefit obligation at end of year | $ | 164.8 | $ | 173.1 | $ | 38.3 | $ | 36.3 |
2016 | 2015 | 2014 | |||||||||
Federal | |||||||||||
Current | $ | (4.0 | ) | $ | 3.3 | $ | (12.3 | ) | |||
Deferred | 19.2 | 5.3 | (8.3 | ) | |||||||
Total federal | $ | 15.2 | $ | 8.6 | $ | (20.6 | ) | ||||
State and local | |||||||||||
Current | $ | 4.1 | $ | 1.2 | $ | 4.0 | |||||
Deferred | 1.8 | 0.9 | (2.6 | ) | |||||||
Total state and local | $ | 5.9 | $ | 2.1 | $ | 1.4 | |||||
Non-United States | |||||||||||
Current | $ | 4.1 | $ | 4.7 | $ | 5.8 | |||||
Deferred | (0.5 | ) | (1.0 | ) | (2.2 | ) | |||||
Total non-United States | $ | 3.6 | $ | 3.7 | $ | 3.6 | |||||
Total | |||||||||||
Current | $ | 4.2 | $ | 9.2 | $ | (2.5 | ) | ||||
Deferred | 20.5 | 5.2 | (13.1 | ) | |||||||
Total current and deferred | $ | 24.7 | $ | 14.4 | $ | (15.6 | ) |
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
2016 | 2015 | ||||||||||||||
Loan Agreement: | |||||||||||||||
Revolving Loan (interest rate of n/a and n/a, respectively) | $ | — | $ | — | $ | — | $ | — | |||||||
Unsecured Lines of Credit (weighted average interest rates of 4.4% and 3.8%, respectively) | $ | 6.3 | $ | 6.3 | $ | 6.0 | $ | 6.0 | |||||||
Total debt | $ | 6.3 | $ | 6.3 | $ | 6.0 | $ | 6.0 | |||||||
Less lines of credit and current portion of long-term debt | (6.3 | ) | (6.3 | ) | (6.0 | ) | (6.0 | ) | |||||||
Total long-term debt | $ | — | $ | — | $ | — | $ | — |
2016 | 2015 | ||||||
Deferred tax assets | |||||||
Tax uniform capitalization | $ | 19.4 | $ | 17.0 | |||
Prepublication expenses | 13.2 | 13.1 | |||||
Inventory reserves | 25.1 | 27.2 | |||||
Allowance for doubtful accounts | 4.2 | 3.9 | |||||
Other reserves | 26.3 | 27.0 | |||||
Post-retirement, post-employment and pension obligations | 15.9 | 15.6 | |||||
Tax carryforwards | 32.2 | 29.5 | |||||
Lease accounting | (0.4 | ) | (0.4 | ) | |||
Other - net | 12.0 | 25.0 | |||||
Gross deferred tax assets | 147.9 | 157.9 | |||||
Valuation allowance | (28.4 | ) | (28.3 | ) | |||
Total deferred tax assets | $ | 119.5 | $ | 129.6 | |||
Deferred tax liabilities | |||||||
Prepaid expenses | (0.6 | ) | (0.9 | ) | |||
Depreciation and amortization | (50.4 | ) | (41.2 | ) | |||
Total deferred tax liability | $ | (51.0 | ) | $ | (42.1 | ) | |
Total net deferred tax assets | $ | 68.5 | $ | 87.5 |
Ed Tech | All Other | Total | |||||||||
Revenues | $ | 0.0 | $ | 0.8 | $ | 0.8 | |||||
Operating costs and expenses | 1.5 | 1.2 | 2.7 | ||||||||
Interest income (expense) | — | 0.1 | 0.1 | ||||||||
Gain (loss) on sale (1) | (2.9 | ) | — | (2.9 | ) | ||||||
Earnings (loss) before income taxes | $ | (4.4 | ) | $ | (0.3 | ) | $ | (4.7 | ) | ||
Provision (benefit) for income taxes | (1.1 | ) | (0.1 | ) | (1.2 | ) | |||||
Earnings (loss) from discontinued operations, net of tax | $ | (3.3 | ) | $ | (0.2 | ) | $ | (3.5 | ) |
Ed Tech | All Other | Total | |||||||||
Revenues | $ | 217.4 | $ | 11.7 | $ | 229.1 | |||||
Operating costs and expenses (1) | 208.8 | 14.5 | 223.3 | ||||||||
Interest income (expense) | — | 0.1 | 0.1 | ||||||||
Gain (loss) on sale | 454.0 | — | 454.0 | ||||||||
Earnings (loss) before income taxes | $ | 462.6 | $ | (2.7 | ) | $ | 459.9 | ||||
Provision (benefit) for income taxes | 181.8 | (1.0 | ) | 180.8 | |||||||
Earnings (loss) from discontinued operations, net of tax | $ | 280.8 | $ | (1.7 | ) | $ | 279.1 |
Ed Tech | All Other | Total | |||||||||
Revenues | $ | 246.4 | $ | 14.4 | $ | 260.8 | |||||
Operating costs and expenses (1) | 193.0 | 15.0 | 208.0 | ||||||||
Interest income (expense) | — | 0.1 | 0.1 | ||||||||
Earnings (loss) before income taxes | $ | 53.4 | $ | (0.5 | ) | $ | 52.9 | ||||
Provision (benefit) for income taxes | 22.0 | (0.2 | ) | 21.8 | |||||||
Earnings (loss) from discontinued operations, net of tax | $ | 31.4 | $ | (0.3 | ) | $ | 31.1 |
2016 | 2015 | ||||||
Accounts receivable, net | $ | 0.0 | $ | 2.5 | |||
Inventories, net | — | 0.1 | |||||
Prepaid expenses and other current assets | 0.5 | 0.5 | |||||
Current assets of discontinued operations | $ | 0.5 | $ | 3.1 | |||
Accounts payable | 0.0 | 0.1 | |||||
Accrued royalties | 0.0 | 0.7 | |||||
Deferred revenue | — | 0.1 | |||||
Other accrued expenses | 1.2 | 13.2 | |||||
Current liabilities of discontinued operations | $ | 1.2 | $ | 14.1 |
2016 | 2015 | 2014 | |||||||||
Earnings (loss) from continuing operations attributable to Class A and Common Shares | $ | 43.9 | $ | 15.4 | $ | 13.2 | |||||
Earnings (loss) from discontinued operations attributable to Class A and Common Shares, net of tax | (3.5 | ) | 279.1 | 31.1 | |||||||
Net income (loss) attributable to Class A and Common Shares | 40.4 | 294.5 | 44.3 | ||||||||
Weighted average Shares of Class A Stock and Common Stock outstanding for basic earnings (loss) per share (in millions) | 34.1 | 32.7 | 32.0 | ||||||||
Dilutive effect of Class A Stock and Common Stock potentially issuable pursuant to stock-based compensation plans (in millions) | 0.8 | 0.7 | 0.5 | ||||||||
Adjusted weighted average Shares of Class A Stock and Common Stock outstanding for diluted earnings (loss) per share (in millions) | 34.9 | 33.4 | 32.5 | ||||||||
Earnings (loss) per share of Class A Stock and Common Stock | |||||||||||
Basic earnings (loss) per share: | |||||||||||
Earnings (loss) from continuing operations | $ | 1.29 | $ | 0.47 | $ | 0.42 | |||||
Earnings (loss) from discontinued operations, net of tax | $ | (0.11 | ) | $ | 8.53 | $ | 0.97 | ||||
Net income (loss) | $ | 1.18 | $ | 9.00 | $ | 1.39 | |||||
Diluted earnings (loss) per share: | |||||||||||
Earnings (loss) from continuing operations | $ | 1.26 | $ | 0.46 | $ | 0.41 | |||||
Earnings (loss) from discontinued operations, net of tax | $ | (0.10 | ) | $ | 8.34 | $ | 0.95 | ||||
Net income (loss) | $ | 1.16 | $ | 8.80 | $ | 1.36 |
2016 | 2015 | ||||||
Total service and interest cost - 1% increase | $ | 0.2 | $ | 0.1 | |||
Total service and interest cost - 1% decrease | (0.1 | ) | (0.1 | ) | |||
Post-retirement benefit obligation - 1% increase | 4.3 | 4.2 | |||||
Post-retirement benefit obligation - 1% decrease | (3.7 | ) | (3.6 | ) |
Balance at May 31, 2014 | $ | 6.2 | |
Actual Return on Plan Assets: | |||
Relating to assets still held at May 31, 2015 | 0.7 | ||
Relating to assets sold during the year | — | ||
Purchases, sales and settlements, net | (0.3 | ) | |
Transfers in and/or out of Level 3 | — | ||
Foreign currency translation | (0.5 | ) | |
Balance at May 31, 2015 | $ | 6.1 | |
Actual Return on Plan Assets: | |||
Relating to assets still held at May 31, 2016 | 0.0 | ||
Relating to assets sold during the year | — | ||
Purchases, sales and settlements, net | (0.3 | ) | |
Transfers in and/or out of Level 3 | — | ||
Foreign currency translation | (0.3 | ) | |
Balance at May 31, 2016 | $ | 5.5 |
2016 | 2015 | 2014 | |||||||||
Computed federal statutory provision | 35.0 | % | 35.0 | % | 35.0 | % | |||||
State income tax provision, net of federal income tax benefit | 3.7 | % | 4.2 | % | 43.9 | % | |||||
Difference in effective tax rates on earnings of foreign subsidiaries | 1.2 | % | 3.7 | % | -82.8 | % | |||||
Charitable contributions | -0.4 | % | -1.1 | % | 25.4 | % | |||||
Tax credits | -0.3 | % | -0.5 | % | 5.9 | % | |||||
Valuation allowances | -0.7 | % | 2.4 | % | -16.0 | % | |||||
Uncertain Positions | 3.9 | % | 11.5 | % | 601.9 | % | |||||
Other - net | -6.4 | % | -7.0 | % | 65.0 | % | |||||
Effective tax rates | 36.0 | % | 48.2 | % | 678.3 | % | |||||
Total provision for income taxes | $ | 24.7 | $ | 14.4 | $ | (15.6 | ) |
Post - Retirement | |||||||||||
Pension Benefits | Benefit Payments | Medicare Subsidy Receipts | |||||||||
2017 | $ | 15.6 | $ | 2.9 | $ | 0.3 | |||||
2018 | 10.9 | 2.8 | 0.3 | ||||||||
2019 | 10.7 | 2.8 | 0.3 | ||||||||
2020 | 10.2 | 2.7 | 0.3 | ||||||||
2021 | 9.8 | 2.7 | 0.3 | ||||||||
2022-2026 | 46.8 | 13.4 | 1.6 |
2016 | 2015 | ||||||
Other intangibles subject to amortization - beginning balance | $ | 4.7 | $ | 5.8 | |||
Additions due to acquisition | 2.4 | 0.8 | |||||
Amortization expense | (2.2 | ) | (1.9 | ) | |||
Foreign currency translation | (0.2 | ) | — | ||||
Total other intangibles subject to amortization, net accumulated amortization of $19.5 and $17.3, respectively | $ | 4.7 | $ | 4.7 | |||
Total other intangibles not subject to amortization | $ | 2.1 | $ | 2.1 | |||
Total other intangibles | $ | 6.8 | $ | 6.8 |
2016 | 2015 | ||||||
Gross beginning balance | $ | 155.9 | $ | 156.0 | |||
Accumulated impairment | (39.6 | ) | (34.2 | ) | |||
Beginning balance | 116.3 | 121.8 | |||||
Impairment charge (1) | — | (5.4 | ) | ||||
Foreign currency translation | (0.1 | ) | (0.1 | ) | |||
Gross ending balance | 155.8 | 155.9 | |||||
Accumulated impairment | (39.6 | ) | (39.6 | ) | |||
Ending balance | $ | 116.2 | $ | 116.3 |
2016 | 2015 | ||||
Health care cost trend rate assumed for the next fiscal year | 7.0 | % | 7.0 | % | |
Rate to which the cost trend is assumed to decline (the ultimate trend rate) | 5.0 | % | 5.0 | % | |
Year that the rate reaches the ultimate trend rate | 2024 | 2022 |
2016 | 2015 | 2014 | |||||||||
United States | $ | 62.1 | $ | 27.4 | $ | (8.7 | ) | ||||
Non-United States | 6.6 | 2.5 | 6.4 | ||||||||
Total | $ | 68.7 | $ | 29.9 | $ | (2.3 | ) |
2017 | $ | 6.3 | |
2018 | — | ||
2019 | — | ||
2020 | — | ||
2021 | — | ||
Thereafter | — | ||
Total debt | $ | 6.3 |
Pension Plans | Post - Retirement Benefits | ||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||
Components of net periodic (benefit) cost: | |||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | — | $ | 0.0 | $ | 0.0 | $ | 0.0 | |||||||||||
Interest cost | 6.1 | 6.7 | 7.2 | 1.4 | 1.3 | 1.3 | |||||||||||||||||
Expected return on assets | (7.8 | ) | (9.3 | ) | (12.7 | ) | — | — | — | ||||||||||||||
Net amortization and deferrals | — | — | — | (0.1 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||
Lump sum settlement charge | — | 4.3 | 1.7 | — | — | — | |||||||||||||||||
Amortization of net actuarial loss | 1.7 | 1.4 | 1.8 | 2.8 | 1.3 | 2.2 | |||||||||||||||||
Net periodic (benefit) cost | $ | (0.0 | ) | $ | 3.1 | $ | (2.0 | ) | $ | 4.1 | $ | 2.4 | $ | 3.3 |
2016 | 2015 | ||||||
Beginning balance | $ | 2.0 | $ | 1.2 | |||
Accruals | 11.9 | 9.6 | |||||
Payments | (9.5 | ) | (8.8 | ) | |||
Ending balance | $ | 4.4 | $ | 2.0 |
Children's Book Publishing & Distribution (1) | Education (1) | Overhead (1) (2) | Total Domestic | International (1) | Total | ||||||||||||||||||
2016 | |||||||||||||||||||||||
Revenues | $ | 1,002.5 | $ | 298.1 | $ | — | $ | 1,300.6 | $ | 372.2 | $ | 1,672.8 | |||||||||||
Bad debts | 5.6 | 1.8 | — | 7.4 | 4.9 | 12.3 | |||||||||||||||||
Depreciation and amortization(3) | 28.2 | 10.1 | 19.0 | 57.3 | 8.0 | 65.3 | |||||||||||||||||
Asset impairments | 3.7 | 3.2 | 7.5 | 14.4 | — | 14.4 | |||||||||||||||||
Segment operating income (loss) | 110.6 | 52.8 | (107.2 | ) | 56.2 | 11.4 | 67.6 | ||||||||||||||||
Segment assets at May 31, 2016 | 394.6 | 172.6 | 898.0 | 1,465.2 | 247.4 | 1,712.6 | |||||||||||||||||
Goodwill at May 31, 2016 | 40.9 | 65.4 | — | 106.3 | 9.9 | 116.2 | |||||||||||||||||
Expenditures for long-lived assets including royalty advances | 47.0 | 8.4 | 26.6 | 82.0 | 13.8 | 95.8 | |||||||||||||||||
Long-lived assets at May 31, 2016 | 144.4 | 82.6 | 379.2 | 606.2 | 66.6 | 672.8 | |||||||||||||||||
2015 | |||||||||||||||||||||||
Revenues | $ | 958.7 | $ | 275.9 | $ | — | $ | 1,234.6 | $ | 401.2 | $ | 1,635.8 | |||||||||||
Bad debts | 5.3 | 1.9 | — | 7.2 | 3.4 | 10.6 | |||||||||||||||||
Depreciation and amortization(3) | 36.7 | 11.9 | 21.3 | 69.9 | 8.4 | 78.3 | |||||||||||||||||
Asset impairments | 10.2 | — | 2.9 | 13.1 | 2.7 | 15.8 | |||||||||||||||||
Segment operating income (loss) | 85.6 | 48.4 | (121.7 | ) | 12.3 | 20.6 | 32.9 | ||||||||||||||||
Segment assets at May 31, 2015 | 383.0 | 173.6 | 1,014.6 | 1,571.2 | 248.0 | 1,819.2 | |||||||||||||||||
Goodwill at May 31, 2015 | 40.9 | 65.4 | — | 106.3 | 10.0 | 116.3 | |||||||||||||||||
Expenditures for long-lived assets including royalty advances | 54.4 | 8.4 | 11.6 | 74.4 | 21.1 | 95.5 | |||||||||||||||||
Long-lived assets at May 31, 2015 | 144.6 | 88.5 | 378.5 | 611.6 | 68.5 | 680.1 | |||||||||||||||||
2014 | |||||||||||||||||||||||
Revenues | $ | 893.0 | $ | 255.1 | $ | — | $ | 1,148.1 | $ | 413.4 | $ | 1,561.5 | |||||||||||
Bad debts | 2.6 | 1.7 | — | 4.3 | 3.0 | $ | 7.3 | ||||||||||||||||
Depreciation and amortization(3) | 36.1 | 11.0 | 38.9 | 86.0 | 7.2 | 93.2 | |||||||||||||||||
Asset impairments | 28.0 | — | — | 28.0 | — | 28.0 | |||||||||||||||||
Segment operating income (loss) | 23.8 | 38.5 | (82.3 | ) | (20.0 | ) | 30.4 | 10.4 | |||||||||||||||
Segment assets at May 31, 2014 | 390.6 | 175.1 | 527.9 | 1,093.6 | 256.3 | 1,349.9 | |||||||||||||||||
Goodwill at May 31, 2014 | 46.3 | 65.4 | — | 111.7 | 10.1 | 121.8 | |||||||||||||||||
Expenditures for long-lived assets including royalty advances | 50.7 | 10.7 | 269.6 | 331.0 | 11.7 | 342.7 | |||||||||||||||||
Long-lived assets at May 31, 2014 | 150.0 | 90.8 | 404.2 | 645.0 | 63.6 | 708.6 |
(1) | As discussed in Note 2, “Discontinued Operations,” the Company closed or sold several operations during the fourth quarter of fiscal 2015. All of these businesses are classified as discontinued operations in the Company’s financial statements and, as such, are not reflected in this table. |
(2) | Overhead includes all domestic corporate amounts not allocated to operating segments, including expenses and costs related to the management of corporate assets. Unallocated assets are principally comprised of deferred income taxes and property, plant and equipment related to the Company’s headquarters in the metropolitan New York area, its fulfillment and distribution facilities located in Missouri, its facility located in Connecticut and unabsorbed burden associated with the former educational technology and services business. |
(3) | Includes depreciation of property, plant and equipment and amortization of intangible assets and prepublication costs. |
2016 | 2015 | 2014 | |||||||||
Total intrinsic value of stock options exercised | $ | 14.6 | $ | 5.8 | $ | 4.6 | |||||
Stock-based compensation cost (pretax) | $ | 9.7 | $ | 11.3 | $ | 9.3 | |||||
Tax benefits related to stock-based compensation cost | $ | 1.8 | $ | 2.1 | $ | 1.7 | |||||
Weighted average grant date fair value per option | $ | 14.78 | $ | 11.41 | $ | 10.37 |
2016 | 2015 | 2014 | |||||||||
Shares issued | 43,141 | 55,501 | 57,835 | ||||||||
Weighted average purchase price per share | $ | 33.65 | $ | 31.98 | $ | 26.92 |
2016 | 2015 | 2014 | |||||||||
RSUs granted | 74,536 | 66,146 | 67,670 | ||||||||
Weighted average grant date price per unit | $ | 43.10 | $ | 33.80 | $ | 30.34 |
2016 | 2015 | 2014 | ||||||||
MSPP Stock Units allocated | 58,633 | 67,027 | 827 | |||||||
Purchase price per unit | $ | 30.38 | $ | 23.79 | $ | 21.15 |
Options | Weighted Average Exercise Price | Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||
Outstanding at May 31, 2015 | 4,054,126 | $ | 30.63 | |||||||||
Granted | 474,819 | $ | 43.09 | |||||||||
Exercised | (1,476,520 | ) | $ | 31.50 | ||||||||
Expired, cancellations and forfeitures | (27,379 | ) | $ | 38.11 | ||||||||
Outstanding at May 31, 2016 | 3,025,046 | $ | 32.10 | 5.9 | $ | 23.0 | ||||||
Exercisable at May 31, 2016 | 1,859,238 | $ | 29.37 | 4.3 | $ | 18.0 |
2016 | 2015 | 2014 | |||||||||
Estimated fair value of stock options granted | $ | 14.78 | $ | 11.41 | $ | 10.37 | |||||
Assumptions: | |||||||||||
Expected dividend yield | 1.4 | % | 1.8 | % | 1.7 | % | |||||
Expected stock price volatility | 38.2 | % | 38.2 | % | 38.6 | % | |||||
Risk-free interest rate | 1.9 | % | 2.2 | % | 2.2 | % | |||||
Average expected life of options | 6 years | 6 years | 6 years |
Class A Stock | Common Stock | Preferred Stock | ||||||
Authorized | 4,000,000 | 70,000,000 | 2,000,000 | |||||
Reserved for Issuance | 500,000 | 7,732,183 | — | |||||
Outstanding | 1,656,200 | 32,657,977 | — |
Gross unrecognized benefits at May 31, 2013 | $ | 35.5 | |
Decreases related to prior year tax positions | (20.4 | ) | |
Increase related to prior year tax positions | 2.8 | ||
Increases related to current year tax positions | 2.6 | ||
Settlements during the period | (1.8 | ) | |
Lapse of statute of limitation | (4.3 | ) | |
Gross unrecognized benefits at May 31, 2014 | $ | 14.4 | |
Decreases related to prior year tax positions | (0.7 | ) | |
Increase related to prior year tax positions | — | ||
Increases related to current year tax positions | 3.6 | ||
Settlements during the period | — | ||
Lapse of statute of limitation | — | ||
Gross unrecognized benefits at May 31, 2015 | $ | 17.3 | |
Decreases related to prior year tax positions | (6.2 | ) | |
Increase related to prior year tax positions | 4.3 | ||
Increases related to current year tax positions | 5.4 | ||
Settlements during the period | (2.9 | ) | |
Lapse of statute of limitation | — | ||
Gross unrecognized benefits at May 31, 2016 | $ | 17.9 |
(Amounts in millions) | ||||||||||||||||
Years ended May 31, | ||||||||||||||||
Balance at Beginning of Year | Expensed | Write-Offs and Other | Balance at End of Year | |||||||||||||
2016 | ||||||||||||||||
Allowance for doubtful accounts | $ | 14.9 | $ | 12.3 | $ | 11.1 | $ | 16.1 | ||||||||
Reserve for returns | 27.9 | 56.6 | 52.4 | (1) | 32.1 | |||||||||||
Reserves for obsolescence | 81.1 | 12.0 | 19.2 | 73.9 | ||||||||||||
Reserve for royalty advances | 86.8 | 4.1 | 0.8 | 90.1 | ||||||||||||
2015 | ||||||||||||||||
Allowance for doubtful accounts | $ | 15.6 | $ | 10.6 | $ | 11.3 | $ | 14.9 | ||||||||
Reserve for returns | 27.0 | 53.9 | 53.0 | (1) | 27.9 | |||||||||||
Reserves for obsolescence | 81.8 | 21.7 | 22.4 | 81.1 | ||||||||||||
Reserve for royalty advances | 85.3 | 3.6 | 2.1 | 86.8 | ||||||||||||
2014 | ||||||||||||||||
Allowance for doubtful accounts | $ | 18.0 | $ | 7.3 | $ | 9.7 | $ | 15.6 | ||||||||
Reserve for returns | 26.0 | 56.5 | 55.5 | (1) | 27.0 | |||||||||||
Reserves for obsolescence | 83.8 | 23.7 | 25.7 | 81.8 | ||||||||||||
Reserve for royalty advances | 79.5 | 6.5 | 0.7 | 85.3 |
(1) | Represents actual returns charged to the reserve |
2017 | $ | 2.4 | |
2018 | 0.7 | ||
2019 | 0.6 | ||
2020 | 0.6 | ||
2021 | 0.1 |
• | Children’s Book Publishing and Distribution operates as an integrated business which includes the publication and distribution of children’s books, ebooks, media and interactive products in the United States through its book clubs and book fairs in its school channels and through the trade channel. This segment is comprised of three operating segments. |
• | Education includes the publication and distribution to schools and libraries of children’s books, classroom magazines, supplemental classroom materials and print and on-line reference and non-fiction products for grades pre-kindergarten to 12 in the United States. This segment is comprised of two operating segments. |
• | International includes the publication and distribution of products and services outside the United States by the Company’s international operations, and its export and foreign rights businesses. This segment is comprised of three operating segments. |
Children's Book Publishing & Distribution (1) | Education (1) | Overhead (1) (2) | Total Domestic | International (1) | Total | ||||||||||||||||||
2016 | |||||||||||||||||||||||
Revenues | $ | 1,002.5 | $ | 298.1 | $ | — | $ | 1,300.6 | $ | 372.2 | $ | 1,672.8 | |||||||||||
Bad debts | 5.6 | 1.8 | — | 7.4 | 4.9 | 12.3 | |||||||||||||||||
Depreciation and amortization(3) | 28.2 | 10.1 | 19.0 | 57.3 | 8.0 | 65.3 | |||||||||||||||||
Asset impairments | 3.7 | 3.2 | 7.5 | 14.4 | — | 14.4 | |||||||||||||||||
Segment operating income (loss) | 110.6 | 52.8 | (107.2 | ) | 56.2 | 11.4 | 67.6 | ||||||||||||||||
Segment assets at May 31, 2016 | 394.6 | 172.6 | 898.0 | 1,465.2 | 247.4 | 1,712.6 | |||||||||||||||||
Goodwill at May 31, 2016 | 40.9 | 65.4 | — | 106.3 | 9.9 | 116.2 | |||||||||||||||||
Expenditures for long-lived assets including royalty advances | 47.0 | 8.4 | 26.6 | 82.0 | 13.8 | 95.8 | |||||||||||||||||
Long-lived assets at May 31, 2016 | 144.4 | 82.6 | 379.2 | 606.2 | 66.6 | 672.8 | |||||||||||||||||
2015 | |||||||||||||||||||||||
Revenues | $ | 958.7 | $ | 275.9 | $ | — | $ | 1,234.6 | $ | 401.2 | $ | 1,635.8 | |||||||||||
Bad debts | 5.3 | 1.9 | — | 7.2 | 3.4 | 10.6 | |||||||||||||||||
Depreciation and amortization(3) | 36.7 | 11.9 | 21.3 | 69.9 | 8.4 | 78.3 | |||||||||||||||||
Asset impairments | 10.2 | — | 2.9 | 13.1 | 2.7 | 15.8 | |||||||||||||||||
Segment operating income (loss) | 85.6 | 48.4 | (121.7 | ) | 12.3 | 20.6 | 32.9 | ||||||||||||||||
Segment assets at May 31, 2015 | 383.0 | 173.6 | 1,014.6 | 1,571.2 | 248.0 | 1,819.2 | |||||||||||||||||
Goodwill at May 31, 2015 | 40.9 | 65.4 | — | 106.3 | 10.0 | 116.3 | |||||||||||||||||
Expenditures for long-lived assets including royalty advances | 54.4 | 8.4 | 11.6 | 74.4 | 21.1 | 95.5 | |||||||||||||||||
Long-lived assets at May 31, 2015 | 144.6 | 88.5 | 378.5 | 611.6 | 68.5 | 680.1 | |||||||||||||||||
2014 | |||||||||||||||||||||||
Revenues | $ | 893.0 | $ | 255.1 | $ | — | $ | 1,148.1 | $ | 413.4 | $ | 1,561.5 | |||||||||||
Bad debts | 2.6 | 1.7 | — | 4.3 | 3.0 | $ | 7.3 | ||||||||||||||||
Depreciation and amortization(3) | 36.1 | 11.0 | 38.9 | 86.0 | 7.2 | 93.2 | |||||||||||||||||
Asset impairments | 28.0 | — | — | 28.0 | — | 28.0 | |||||||||||||||||
Segment operating income (loss) | 23.8 | 38.5 | (82.3 | ) | (20.0 | ) | 30.4 | 10.4 | |||||||||||||||
Segment assets at May 31, 2014 | 390.6 | 175.1 | 527.9 | 1,093.6 | 256.3 | 1,349.9 | |||||||||||||||||
Goodwill at May 31, 2014 | 46.3 | 65.4 | — | 111.7 | 10.1 | 121.8 | |||||||||||||||||
Expenditures for long-lived assets including royalty advances | 50.7 | 10.7 | 269.6 | 331.0 | 11.7 | 342.7 | |||||||||||||||||
Long-lived assets at May 31, 2014 | 150.0 | 90.8 | 404.2 | 645.0 | 63.6 | 708.6 |
(1) | As discussed in Note 2, “Discontinued Operations,” the Company closed or sold several operations during the fourth quarter of fiscal 2015. All of these businesses are classified as discontinued operations in the Company’s financial statements and, as such, are not reflected in this table. |
(2) | Overhead includes all domestic corporate amounts not allocated to operating segments, including expenses and costs related to the management of corporate assets. Unallocated assets are principally comprised of deferred income taxes and property, plant and equipment related to the Company’s headquarters in the metropolitan New York area, its fulfillment and distribution facilities located in Missouri, its facility located in Connecticut and unabsorbed burden associated with the former educational technology and services business. |
(3) | Includes depreciation of property, plant and equipment and amortization of intangible assets and prepublication costs. |
2016 | 2015 | 2014 | |||||||||
Estimated fair value of stock options granted | $ | 14.78 | $ | 11.41 | $ | 10.37 | |||||
Assumptions: | |||||||||||
Expected dividend yield | 1.4 | % | 1.8 | % | 1.7 | % | |||||
Expected stock price volatility | 38.2 | % | 38.2 | % | 38.6 | % | |||||
Risk-free interest rate | 1.9 | % | 2.2 | % | 2.2 | % | |||||
Average expected life of options | 6 years | 6 years | 6 years |
2016 | 2015 | 2014 | |||||||||||||||||||||
Pension Plans | Post - Retirement Benefits | Pension Plans | Post - Retirement Benefits | Pension Plans | Post - Retirement Benefits | ||||||||||||||||||
Service cost | $ | — | $ | 0.0 | $ | — | $ | 0.0 | $ | — | $ | 0.0 | |||||||||||
Net amortization and deferrals | — | (0.1 | ) | — | (0.2 | ) | — | (0.2 | ) | ||||||||||||||
Lump sum settlement charge | — | — | 4.3 | — | 1.7 | — | |||||||||||||||||
Amortization of net actuarial loss | 1.7 | 2.8 | 1.4 | 1.3 | 1.8 | 2.2 | |||||||||||||||||
Tax benefit | (0.3 | ) | (1.1 | ) | (2.0 | ) | (0.4 | ) | (1.4 | ) | (0.8 | ) | |||||||||||
Amounts reclassified from Accumulated other comprehensive income (loss) | $ | 1.4 | $ | 1.6 | $ | 3.7 | $ | 0.7 | $ | 2.1 | $ | 1.2 |
Foreign currency translation adjustments | Pension Plans | Post - Retirement Benefits | Total | ||||||||||||
Balance at May 31, 2014(1) | $ | (16.6 | ) | $ | (33.2 | ) | $ | (5.4 | ) | $ | (55.2 | ) | |||
Other comprehensive income (loss) before reclassifications | (15.3 | ) | (8.5 | ) | $ | (2.3 | ) | $ | (26.1 | ) | |||||
Less: amount reclassified from Accumulated other comprehensive income (loss) (net of taxes) | |||||||||||||||
Lump Sum Settlement charge | — | 2.6 | — | 2.6 | |||||||||||
Amortization of net actuarial loss | — | 1.1 | 0.8 | 1.9 | |||||||||||
Net prior service credit | — | — | (0.2 | ) | (0.2 | ) | |||||||||
Other comprehensive income (loss) | (15.3 | ) | (4.8 | ) | (1.7 | ) | (21.8 | ) | |||||||
Balance at May 31, 2015(1) | $ | (31.9 | ) | $ | (38.0 | ) | $ | (7.1 | ) | $ | (77.0 | ) | |||
Other comprehensive income (loss) before reclassifications | $ | (8.1 | ) | $ | (2.8 | ) | $ | (1.8 | ) | $ | (12.7 | ) | |||
Less: amount reclassified from Accumulated other comprehensive income (loss) (net of taxes) | |||||||||||||||
Lump Sum Settlement charge | — | — | — | — | |||||||||||
Amortization of net actuarial loss | — | 1.4 | 1.6 | 3.0 | |||||||||||
Net prior service credit | — | — | (0.0 | ) | (0.0 | ) | |||||||||
Other comprehensive income (loss) | (8.1 | ) | (1.4 | ) | (0.2 | ) | (9.7 | ) | |||||||
Balance at May 31, 2016 (1) | $ | (40.0 | ) | $ | (39.4 | ) | $ | (7.3 | ) | $ | (86.7 | ) |
Authorization | Amount | |||
September 2010 | $ | 44.0 | (a) | |
Additional authorization July 2015 | 50.0 | |||
Less repurchases | (48.5 | ) | ||
Remaining Board authorization at May 31, 2016 | $ | 45.5 |
• | Accounts receivable reserves for returns |
• | Accounts receivable allowance for doubtful accounts |
• | Pension and other post-retirement obligations |
• | Uncertain tax positions |
• | Inventory reserves |
• | Cost of goods sold from book fair operations during interim periods determined based on estimated gross profit rates |
• | Sales taxes |
• | Royalty advance reserves |
• | Customer reward programs |
• | Impairment testing for goodwill for assessment and measurement, intangibles and other long-lived assets and investments. |
• | Assets and liabilities acquired in business combinations. |