Discontinued Operations

6 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

In June 2019, the Company committed to a plan to divest its Digital Marketing Business in order to focus on its core software-as-a-service and technology solutions for the markets it serves through the CDKNA and CDKI segments. The Digital Marketing Business is comprised of all of the assets of the former Advertising North America segment and certain assets of CDKNA related to mobile advertising solutions and websites services.

The Company's decision to divest its Digital Marketing Business was the result of a comprehensive strategic review of the Company’s business, undertaken during the fiscal quarter ended June 30, 2019. The Company intends to complete its divestiture of the Digital Marketing Business during the current fiscal year. This action resulted in the reclassification of the assets and liabilities comprising the Digital Marketing Business as assets and liabilities held for sale in the accompanying consolidated balance sheets, and a corresponding adjustment to consolidated statements of operations and cash flows to reflect discontinued operations, for all periods presented.

Net assets held-for-sale are recorded at the lower of carrying value or fair value less selling costs. The Company is required to reassess the carrying value on a quarterly basis. At December 31, 2019, the Company estimated fair value from a market participant perspective, which incorporates information obtained through ongoing negotiations with potential buyers, and determined that the carrying value was higher than the estimated fair value less selling costs. As a result, the Company

recorded a valuation allowance of $69.2 million at December 31, 2019. The valuation allowance is included in current assets held-for-sale in the consolidated balance sheets.

The following table summarizes the comparative financial results of discontinued operations which are presented as Net earnings from discontinued operations in the consolidated statements of operations:



	Three Months Ended December 31,						Six Months Ended December 31,
	2019			2018			2019			2018
Revenues	$	84.8		$	111.7		$	170.5		$	219.9

Expenses:
Cost of revenues	65.9			79.3			132.9			157.7
Selling, general and administrative expenses	10.5			7.6			21.6			14.7
Provision for valuation allowance	69.2			—			69.2			—
Restructuring expenses	—			0.1			—			1.5
Total expenses	145.6			87.0			223.7			173.9
Earnings (loss) before income taxes	(60.8		)	24.7			(53.2		)	46.0
Benefit from (provision for) income taxes	15.1			(6.4		)	13.2			(11.9		)
Net earnings (loss) from discontinued operations	$	(45.7	)	$	18.3		$	(40.0	)	$	34.1

The total assets and liabilities held for sale are stated separately in the consolidated balance sheets. Assets and liabilities held for sale were classified as current at December 31, 2019 and June 30, 2019 as it was probable that the sale would occur within one year as of those dates.



	December 31, 2019			June 30, 2019
Assets:
Current assets:
Accounts Receivable	$	108.5		$	121.9
Prepaid and other current assets	2.6			1.1
Total current assets	111.1			123.0
Property, plant and equipment, net	2.3			2.3
Goodwill	59.4			59.4
Intangible assets, net	39.7			35.6
Other assets	2.9			0.2
Total current assets held for sale	215.4			220.5

Liabilities:
Current liabilities:
Accounts payable	13.6			19.4
Deferred revenues	1.1			0.8
Accrued expenses and other current liabilities	34.9			26.0
Total current liabilities	49.6			46.2
Other liabilities	0.4			2.7
Total current liabilities held for sale	50.0			48.9

Net assets held for sale, at unadjusted carrying value⁽¹⁾	165.4			171.6
Valuation allowance	(69.2		)	—
Net assets held for sale, at fair value less selling costs	$	96.2		$	171.6

(1) Includes additional assets and liabilities that met the held-for-sale criteria at December 31, 2019.