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Fair Value Measurements

12 Months Ended

May 31, 2024

FAIR VALUE MEASUREMENTS

The Company determines the appropriate level in the fair value hierarchy for each fair value measurement of assets and liabilities carried at fair value on a recurring basis in the Company’s financial statements. The fair value hierarchy prioritizes the inputs, which refer to assumptions that market participants would use in pricing an asset or liability, based upon the highest and best use, into three levels as follows:

•Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

•Level 2 Observable inputs other than unadjusted quoted prices in active markets for identical assets or liabilities such as:

◦Quoted prices for similar assets or liabilities in active markets

◦Quoted prices for identical or similar assets or liabilities in inactive markets

◦Inputs other than quoted prices that are observable for the asset or liability

◦Inputs that are derived principally from or corroborated by observable market data by correlation or other means

•Level 3 Unobservable inputs in which there is little or no market data available, which are significant to the fair value measurement and require the Company to develop its own assumptions.

The Company’s financial assets and liabilities measured at fair value consisted of cash and cash equivalents, debt and foreign currency forward contracts. Cash and cash equivalents are comprised of bank deposits and short-term investments, such as money market funds, the fair value of which is based on quoted market prices, a Level 1 fair value measure. The Company employs Level 2 fair value measurements for the disclosure of the fair value of its various lines of credit and long term debt. The fair value of the Company's debt approximates the carrying value for all periods presented. The fair values of foreign currency forward contracts, used by the Company to manage the impact of foreign exchange rate changes to the financial statements, are based on quotations from financial institutions, a Level 2 fair value measure.

Non-financial assets and liabilities for which the Company employs fair value measures on a non-recurring basis include:

•Long-lived assets

•Operating lease right-of-use (ROU) assets

•Investments

•Assets acquired in a business combination

•Impairment assessment of goodwill and intangible assets

•Long-lived assets held for sale

Level 2 and Level 3 inputs are employed by the Company in the fair value measurement of these assets and liabilities. For a more detailed description of the fair value measurements employed by the Company, see Note 1, “Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies." The Company employs fair value measurements for certain property, plant and equipment, production assets, investments and prepublication assets and the Company assesses future expected cash flows attributable to these assets. For investments, see Note 7, "Investments," for a more complete description of the fair value measurements employed.

During fiscal 2024, certain operating lease ROU assets, prepublication costs and intangible assets were recorded at fair value in connection with an impairment and fair value was determined using the discounted cash flow method. See Note 4, "Asset Write Down," for a more complete description of the impairments recognized in 2024. In addition, during fiscal 2024, the Company acquired certain amortizable intangible assets and the fair value was determined using the discounted cash flow method. See Note 11, "Goodwill and Intangibles," for a more complete description of the intangibles acquired.

During fiscal 2023, the Company acquired certain intangible assets and goodwill in connection with a business combination. See Note 10, "Acquisitions," for a more complete description of the assets acquired and the fair value measurements employed.

During fiscal 2022, certain assets were impaired in connection with the sale of the direct sales business in Asia. See Note 4, "Asset Write Down", for a more complete description, including the fair value measurements employed. In addition, during fiscal 2022, certain operating lease ROU assets were recorded at fair value in connection with an impairment and fair value was determined using the discounted cash flow method.

The following tables present non-financial assets that were measured and recognized at fair value on a non-recurring basis and the total impairment losses and additions recognized on those assets:


	Net carrying value as of		Fair value measured and recognized using						Impairment losses for fiscal year ended		Additions due to acquisitions
	May 31, 2024		Level 1		Level 2		Level 3		May 31, 2024





Prepublication assets	$	—	$	—	$	—	$	3.0	$	3.0	$	—
Operating lease right-of-use assets, net	$	—	$	—	$	—	$	3.9	$	3.9	$	—

Intangible assets	$	5.5	$	—	$	—	$	6.0	$	3.1	$	6.0


	Net carrying value as of		Fair value measured and recognized using						Impairment losses for fiscal year ended		Additions due to acquisitions
	May 31, 2023		Level 1		Level 2		Level 3		May 31, 2023
Goodwill	$	7.6	$	—	$	—	$	7.6	$	—	$	7.6








Intangible assets	$	3.6	$	—	$	—	$	4.1	$	—	$	4.1


	Net carrying value as of		Fair value measured and recognized using						Impairment losses for fiscal year ended		Additions due to acquisitions
	May 31, 2022		Level 1		Level 2		Level 3		May 31, 2022

Accounts Receivable	$	1.4	$	—	$	—	$	1.4	$	9.3	$	—
Inventory	$	2.3	$	—	$	—	$	2.3	$	1.6	$	—

Other Assets	$	—	$	—	$	—	$	—	$	0.7	$	—


Operating lease right-of-use assets, net	$	—	$	—	$	—	$	—	$	0.4	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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