Discontinued Operations and Dispositions

3 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Assets Held-for-Sale, Discontinued Operations, and Dispositions

3. Discontinued Operations and Dispositions

Shortly after the Company’s acquisition of Time Inc. in fiscal 2018, it announced the planned sale of certain brands and investments. Several of these brands and investments were held during fiscal 2020, and all sales were completed by the end of the third quarter of fiscal 2020. The second step of the two-step transaction to sell the Sports Illustrated brand and the sale of Viant were completed in October 2019. Based on the selling price of Sports Illustrated, an impairment of goodwill for the Sports Illustrated brand of $4.2 million was recorded in the first quarter of fiscal 2020. FanSided was sold in January 2020 and the investment in Xumo was sold in February 2020. The revenues and expenses of these businesses were included in the loss from discontinued operations, net of income taxes line on the Condensed Consolidated Statements of Earnings for the periods prior to their sales. All discontinued operations related to the national media segment.

Amounts applicable to discontinued operations on the Condensed Consolidated Statements of Earnings were as follows:

Three months ended September 30,	2019
(In millions except per share data)
Revenues	$	85.5
Costs and expenses	(86.7)
Impairment of goodwill	(4.2)
Interest expense	(1.2)
Loss before income taxes	(6.6)
Income tax benefit	0.6
Loss from discontinued operations, net of income taxes	$	(6.0)
Loss per share from discontinued operations
Basic	$	(0.13)
Diluted	(0.13)

The Company did not allocate interest to discontinued operations unless the interest was directly attributable to the discontinued operations or was interest on debt that was required to be repaid as a result of the disposal transaction.

Interest expense included in discontinued operations reflected an estimate of interest expense related to the debt that was repaid with the proceeds from the sales of the businesses.

The discontinued operations did not have depreciation, amortization, or significant non-cash investing items for the three months ended September 30, 2019. Share-based compensation expense related to discontinued operations was minimal for the three months ended September 30, 2019, and is included in the calculation of net cash provided by (used in) operating activities on the Condensed Consolidated Statements of Cash Flows.

Meredith continued to provide accounting, finance, human resources, information technology, and certain support services for a short period of time under Transition Services Agreements (TSAs) with certain buyers. In addition, Meredith continues to provide consumer marketing, information technology, subscription fulfillment, paper purchasing, printing, and other services under Outsourcing Agreements (OAs) with certain buyers. The remaining OAs have terms up to three years, subject to renewal. Income of $0.7 million and $3.0 million for the three months ended September 30, 2020 and 2019, respectively, earned from performing services under the OAs was recorded in the other revenue line on the Condensed Consolidated Statements of Earnings. Income of $0.1 million and $1.9 million for the three months ended September 30, 2020 and 2019, respectively, earned from performing services under the TSAs was recorded as a reduction to the selling, general, and administrative expense line on the Condensed Consolidated Statements of Earnings.