Restructuring Accruals

12 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring Accruals

8. Restructuring Accruals

During fiscal 2021, management committed to a performance improvement plan to control costs. Actions included consolidating certain local media functions and reallocating positions across the Company by shifting resources to digital operations in the national media segment. In connection with these plans, the Company recorded pre-tax restructuring charges of $14.6 million for severance and related benefit costs associated with the involuntary termination of employees. These costs were recorded in the acquisition, disposition, and restructuring related activities line on the Consolidated Statements of Earnings (Loss). Combined, these actions affected approximately 140 employees in the local media segment, 80 in the national media segment, and 10 in unallocated corporate. The majority of the severance costs for these restructuring actions were paid during fiscal 2021, with the remainder to be paid in fiscal 2022.

Details of the severance and related benefit costs by segment for the performance improvement plans are as follows:

	Amount Accrued  in the Period				Total Amount Expected to be Incurred
Years ended June 30,	2021		2020
(In millions)
National media	$	6.7	$	12.4		$	6.7
Local media	7.3		2.4			7.3
Unallocated corporate	0.6		3.3			0.6
	$	14.6	$	18.1		$	14.6

During fiscal 2020, management made the strategic decisions to transition Rachael Ray Every Day into a consumer-driven, newsstand-only quarterly magazine and to discontinue the Family Circle brand. In addition, management committed to several smaller actions in the national media segment, local media segment, and unallocated corporate resulting in selected workforce reductions. In connection with these plans, the Company recorded pre-tax restructuring charges totaling $21.1 million, including $18.1 million for severance and related benefit costs associated with the involuntary termination of employees and $3.0 million in other costs and expenses. Of these charges, $17.4 million were recorded in the acquisition, disposition, and restructuring related activities line and $3.7 million were recorded in the loss from discontinued operations, net of income taxes line on the Consolidated Statements of Earnings (Loss). Combined, these actions affected approximately 165 employees in the national media segment, 15 in the local media segment, and 10 in unallocated corporate. The majority of the severance costs were paid during fiscal 2020, with the remainder paid in the first half of fiscal 2021.

During fiscal 2019, management committed to several performance improvement plans related primarily to business realignments, including continuing those related to the integration of Time that began in fiscal 2018. Improvement plans that were made and executed upon during fiscal 2019 related to the strategic decision to merge Cooking Light magazine with EatingWell, transition Coastal Living from a subscription magazine to a special interest publication, to change Entertainment Weekly from a weekly to a monthly publication, to consolidate much of the local media's digital advertising functions with MNI, and to outsource newsstand sales and marketing operations. During fiscal 2019, the Company also incurred restructuring costs related to the consolidation of office space, including closing the Time Customer Service facility in Tampa, Florida and other office locations in Brooklyn, New York and Birmingham, Alabama. The fiscal 2019 performance improvement plans affected a total of approximately 300 people, including approximately 225 in the national media segment, approximately 25 in the local media segment, and the remainder in unallocated corporate. In connection with these plans, the Company recorded a pre-tax restructuring charge of $56.3 million for severance and related benefit costs related to the involuntary termination of employees and other write-downs of $31.1 million, mainly related to the closing of office locations in Tampa, Brooklyn, and Birmingham, which are recorded in the acquisition, disposition, and restructuring related activities line on the Consolidated Statements of Earnings (Loss). The majority of severance costs have been paid.

During the years ended June 30, 2021, 2020, and 2019, the Company recorded reversals of $2.2 million, $1.8 million, and $6.0 million, respectively, of excess restructuring reserves accrued in prior fiscal years. The reversals of excess restructuring reserves were recorded as credits in the acquisition, disposition, and restructuring related activities line on the Consolidated Statements of Earnings (Loss).

Details of changes in the Company’s restructuring accrual related to employee terminations are as follows:

Years ended June 30,	2021		2020
(In millions)
Balance at beginning of year	$	10.7	$	43.7
Accruals	14.6		18.1
Cash payments	(18.8)		(49.3)
Reversal of excess accrual	(2.2)		(1.8)
Balance at end of year	$	4.3	$	10.7

As of June 30, 2021, the $4.3 million liability was classified as current liabilities on the Consolidated Balance Sheets.