Discontinued Operations

9 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

NOTE 3. DISCONTINUED OPERATIONS

During the first quarter of fiscal 2016, management approved a plan to dispose of the Company’s digital education business. As a result of the plan and the discontinuation of further significant business activities in the Digital Education segment, the assets and liabilities of this segment were classified as held for sale and the results of operations have been classified as discontinued operations for all periods presented in accordance with ASC 205-20, “Discontinued Operations.”

In the first quarter of fiscal 2016, the Company recognized a pre-tax non-cash impairment charge of $76 million reflecting a write down of the digital education business to its fair value less costs to sell. In addition, the Company recognized a tax benefit of $144 million upon reclassification of the Digital Education segment to discontinued operations. These amounts are included in Loss before income tax benefit and Income tax benefit, respectively, in the table below for the nine months ended March 31, 2016.

On September 30, 2015, the Company sold the Amplify Insight and Amplify Learning businesses. Included within Loss before income tax benefit for the nine months ended March 31, 2016 was approximately $17 million in severance and lease termination costs which were incurred in conjunction with the sale.

The following table summarizes the results of operations from the discontinued segment:

	For the three months ended March 31,						For the nine months ended March 31,
	2016			2015			2016			2015
	(in millions)
Revenues	$	—		$	21		$	27		$	85
Loss before income tax benefit		(3	)		(29	)		(154	)		(92	)
Income tax benefit		1			7			174			30
(Loss) income from discontinued operations, net of tax	$	(2	)	$	(22	)	$	20		$	(62	)

The following table summarizes the cash flows from discontinued operations:

	For the nine months ended March 31,
	2016			2015
	(in millions)
Net cash used in operating activities	$	(66	)	$	(124	)
Net cash provided by (used in) investing activities		15			(50	)
Net cash used in financing activities		—			—
Net decrease in cash and cash equivalents	$	(51	)	$	(174	)

Assets and liabilities held for sale related to discontinued operations as of March 31, 2016 and June 30, 2015 are included in Other current liabilities and Other current assets, respectively, in the Balance Sheets as follows:

	As of March 31, 2016			As of June 30, 2015
	(in millions)
Current assets	$	1		$	54
Non-current assets		—			100
Total assets	$	1		$	154
Current Liabilities		11			46
Non-current liabilities		—			16
Total liabilities	$	11		$	62
Net (liabilities) assets held for sale	$	(10	)	$	92