DISPOSITION (Notes)

6 Months Ended

Sep. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

DISPOSITION

DISPOSITION:

On July 2, 2018, the Company entered into a definitive agreement to sell its Acxiom Marketing Solutions business (“AMS”) to The Interpublic Group of Companies, Inc. (“IPG”) for $2.3 billion in cash. As required regulatory approvals were being sought and received, the Company solicited and received shareholder approval for the transaction. Shareholder approval was received on September 20, 2018, and the Company began reporting the financial information pertaining to AMS as a component of discontinued operations in the condensed consolidated financial statements. Prior to the discontinued operations classification, the AMS business was included in the AMS segment in the Company’s segment results.

The sale was completed on October 1, 2018. At the closing of the transaction, the Company received total consideration of $2.3 billion ($2.3 billion stated sales price less closing adjustments and transaction costs of $38.5 million). Additionally, the Company applied $230.5 million of proceeds from the sale to repay outstanding Company debt and interest. The Company plans to use further proceeds from the sale to fund expansion of its common stock repurchase program and for general corporate purposes. The Company expects to report a gain on the sale.

Summary results of operations of AMS for the three and six months ended September 30, 2018 and 2017, respectively, are segregated and included in earnings from discontinued operations, net of tax, in the condensed consolidated statements of operations. 

The following is a reconciliation of the major classes of line items constituting earnings from discontinued operations, net of tax (dollars in thousands):

	For the three months ended				For the six months ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenues	$	167,696	$	171,227	$	332,185	$	336,984
Cost of revenue	95,218		91,063		188,835		180,962
Gross profit	72,478		80,164		143,350		156,022
Operating expenses:
Research and development	7,352		8,414		14,918		17,137
Sales and marketing	21,106		24,137		42,633		48,486
General and administrative	27,789		8,200		44,383		16,969
Gains, losses and other items, net	1,369		827		2,653		732
Total operating expenses	57,616		41,578		104,587		83,324
Income from discontinued operations	14,862		38,586		38,763		72,698
Interest expense	(2,864)		(2,524)		(5,702)		(4,866)
Other, net	(145)		(71)		23		(163)
Earnings from discontinued operations before income taxes	11,853		35,991		33,084		67,669
Income taxes (benefit)	(49,950)		13,326		(53,522)		19,225
Earnings from discontinued operations, net of tax	$	61,803	$	22,665	$	86,606	$	48,444

Substantially all of the interest expense was allocated to discontinued operations.

Included in income tax benefit from discontinued operations for the three and six months ended September 30, 2018 is approximately $45.6 million related to the recognition of deferred tax assets for net basis differences of AMS business subsidiaries.

The carrying amounts of the major classes of assets and liabilities of AMS are segregated and included in assets and liabilities held for sale in the condensed consolidated balance sheets. The following is a reconciliation of the assets and liabilities held for sale (dollars in thousands):

	September 30, 2018		March 31, 2018
	(Unaudited)		(Unaudited)
Cash and cash equivalents	$	6,731	$	2,261
Trade accounts receivable, net	122,507		115,141
Refundable income taxes	30		—
Other current assets	23,920		20,972
Property and equipment, net	116,338		124,193
Software, net	21,093		21,014
Goodwill	390,649		392,356
Purchased software licenses, net	6,594		7,502
Deferred income taxes	1,538		1,522
Deferred commissions, net	11,929		—
Other assets, net	1,675		3,815
Assets held for sale	$	703,004	$	688,776
Trade accounts payable	30,755		27,929
Accrued payroll and related expenses	21,893		28,725
Other accrued expenses	18,446		16,241
Deferred revenue	23,486		27,214
Income taxes payable	—		244
Other liabilities	2,583		3,707
Liabilities held for sale	$	97,163	$	104,060