Revenues (Tables)

3 Months Ended

Aug. 31, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Impact of Adoption of New Accounting Standards

The following table illustrates the amounts by which each summarized income statement line item was affected by the adoption of Topic 606:



	Three months ended August 31, 2018
	As reported			Adjustments				Without adoption of Topic 606
Revenues	$	218.4		$	(12.5	)	⁽¹⁾	$	205.9
Cost of goods sold	125.3			(4.1		)	⁽¹⁾	121.2
Selling, general and administrative expenses	163.7			(3.2		)	⁽²⁾	160.5
Depreciation and amortization	13.2			—				13.2
Operating income (loss)	(83.8		)	(5.2		)		(89.0		)
Interest income (expense), net	0.8			—				0.8
Other components of net periodic benefit (cost)	(0.4		)	—				(0.4		)
Provision (benefit) for income taxes	(22.1		)	(1.4		)	⁽³⁾	(23.5		)
Net income (loss)	$	(61.3	)	$	(3.8	)		$	(65.1	)
Basic earnings (loss) per share:	$	(1.75	)	$	(0.11	)		$	(1.86	)
Diluted earnings (loss) per share:	$	(1.75	)	$	(0.11	)		$	(1.86	)

(1) - Represents incremental revenue and cost of goods sold related to the redemption of book fairs incentive program credits, partially offset by additional deferred revenue on incentive credits awarded during the period.

(2) - Represents direct response advertising costs being expensed as incurred.

(3) - Represents the income tax impact of Topic 606 adjustments.

The cumulative effect of the changes made to the Company’s condensed consolidated balance sheet at June 1, 2018 are as follows:



	As reported - May 31, 2018		Adjustments due to adoption				June 1, 2018
Accounts receivable, net	$	204.9	$	31.1		⁽¹⁾	$	236.0
Inventories, net	294.9		(1.9		)	⁽²⁾	293.0
Prepaid expenses and other current assets	66.6		(4.3		)	⁽²⁾	62.3
Noncurrent deferred income taxes	25.2		16.0			⁽³⁾	41.2
Deferred revenue	24.7		86.3			⁽⁴⁾	111.0
Other accrued expenses	177.9		1.1			⁽⁵⁾	179.0
Retained earnings	$	1,065.2	$	(46.5	)		$	1,018.7

(1) - Primarily represents the reclassification of the Company’s accounting for estimated returns from a reduction to Accounts receivable, net, to a current liability within Other accrued expenses.

(2) - Primarily represents the adjustment for previously capitalized direct response advertising costs of $5.5 and the reclassification of a return asset from Inventory to Prepaid expenses and other current assets.

(3) - Represents the income tax impact of Topic 606 adjustments.

(4) - Represents the deferred revenue related to outstanding book fairs incentive credits as of June 1, 2018.

(5) - Represents a reduction to Other accrued expenses of $27.2 for outstanding book fair incentive credits as of June 1, 2018. This decrease was offset by a $28.3 increase for estimated returns recorded to Other accrued expenses.

Schedule of Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by region and channel:



	Three months ended August 31,
	2018		2017
Book Clubs	$	9.1	$	8.0
Book Fairs	25.2		12.1
Trade	59.0		46.7
Total Children's Book Publishing & Distribution	93.3		66.8

Education	50.3		45.0

Major Markets ⁽¹⁾	50.3		51.7
Other Markets⁽²⁾	24.5		25.7
Total International	74.8		77.4
Total Revenues	$	218.4	$	189.2

(1) - Includes Canada, UK, Australia and New Zealand.